Transcript Itaucred Conference Call of the Results of the 3rd Quarter/2007 November 07, 2007

Itaucred
Conference Call of the Results of the
3rd Quarter/2007
November 07, 2007
1
Highlights
1. Results:
• 3rd Qtr/07: Net Income of R$ 2,428 million an increase of 14.8% compared to 2nd Qtr./07;
annualized ROE of 35.6% (Net Income of R$ 6,444 million for the nine months ended in Sep 30,
2007; annualized ROE of 33.3%);
• 3rd Qtr/07: Recurring Net Income of R$ 1,569 million, an 18.2% decrease; annualized ROE of
23.0% (Recurring Net Income of R$ 5,389 million for the nine months ended in Sep 30, 2007;
annualized ROE of 27.9%).
2. The loan portfolio grew 8.8% in the quarter and 26.9% in the last 12 months:
• Credit Cards:
6.8% in the 3rd Qtr/07 and 18.7% in the last 12 months;
• Vehicles:
14.7% in the 3rd Qtr/07 and 62.1% in the last 12 months;
• Small and Mid-Sized Companies:
9.8% in the 3rd Qtr/07 and 26.4% in the last 12 months.
3. Managerial Financial Margin:
• The treasury performance under the highly volatility scenario prevalent in the period resulted in a loss
of R$ 64 million (R$ 40 million, after taxes) in the quarter.
4. Non-Recurring Events:
• The sell of part of our shareholding in Redecard resulted in a positive impact of R$ 1.0 billion, after
taxes, in the 3rd Qtr/07.
5. Nonperforming Loans Ratio: Nonperforming loans ratio of 4.7%, representing a reduction compared
to the prior quarter.
6. BIS Ratio: BIS ratio of 15.3%. Considering BACEN Circular Letter 3,367, which will be effective as
from 4th Quarter of 2007, the BIS ratio in September 30, 2007 would be 18.5%.
2
Current Account Opening
Units
200,000
180,894
180,000
153,844
152,867
160,000
143,594
130,694
140,000
122,535
120,000
130,331
126,981
124,338
100,000
80,000
60,000
72,242
40,000
20,000
0
mar-03
sep-03
mar-04
sep-04
mar-05
sep-05
mar-06
sep-06
mar-07
sep-07
3
Non Recurring Effects 1
R$ Million
3rd Q./07
Jan –
Sep./07
2nd Q./07
Jan –
Sep./06
Net Income
2,428
2,115
6,444
3,029
Non Recurring Effects
(859)
(196)
(1,055)
1,539
Managerial Financial Margin
-
124
124
(645)
Result from Loan Losses
-
400
400
149
303
96
398
118
-
-
-
16
(1,552)
(850)
(2,402)
(46)
-
-
-
1,909
Minority Interests
(24)
(77)
(101)
(48)
Tax effects on non-recurring effects
415
111
526
85
1,569
1,919
5,389
4,568
Non-interest Expenses
Tax Expenses for ISS, PIS and Cofins
Non-operating Results
Effects of BkB acquisition
Recurring Net Income
1 For further details, please consult Itaú Holding’s Management Discussion and Analysis report – page 4.
4
Highlights
R$ Million
3rd Q/07
2nd Q/07
Variance
Jan –
Sep./07
Jan –
Sep./06
Variance
Net Income
2,428
2,115
14.8%
6,444
3,029
112.7%
Recurring Net Income
1,569
1,919
-18.2%
5,389
4,568
18.0%
1.31
1.60
-18.2%
4.49
4.07
10.4%
Stockholders’ Equity
28,003
26,546
5.5%
28,003
21,693
29.1%
Recurring ROE (Average Equity)
annualized (%)
23.0%
29.8 %
-6.8b.p.
27.9%
34.1%
-6.2b.p.
110,747
103,219
7.3%
110,747
76,453
44.9%
Solvency Ratio (%)
15.3%
17.6%
-230b.p.
15.3%
16.8%
-150b.p.
Efficiency Ratio (%) (*)
47.1%
45.8%
130b.p.
45.6%
47.5%
-190b.p.
4.7%
5.1%
-40b.p.
4.7%
5.2%
-50b.p.
Recurring Net Income per share (R$)
Market Capitalization
Nonperforming Loans Ratio (%)
(*) If Treasury had performed in this quarter like the average of the last quarters - R$ 200 million – the efficiency ratio would be 45.2%.
5
Itaú Holding Pro Forma
R$ Million
Jan –
Sep./07
Jan –
Sep./06
3rd Q/07
2nd Q/07
Variance
Managerial Financial Margin
4,825
5,250
-8.1%
15,059
12,211
23.3%
• Banking Operations
4,635
4,417
5.0%
13,421
11,163
20.0%
• Treasury (1)
(64)
571
-111.2%
875
627
39.5%
• Management of Foreign Exchange Risk
from Investments Abroad
253
262
-3.3%
763
420
81.5%
2,529
2,550
-0.8%
7,500
6,641
12.9%
7,354
7,800
-5.7%
22,559
18,852
19.7%
Result of Loan Losses (2)
(1,330)
(1,217)
9.3%
(3,813)
(3,827)
-0.4%
Non Interest Expenses (3)
(3,447)
(3,524)
-2.2%
(10,251)
(8,975)
14.2%
1,569
1,919
-18.2%
5,389
4,568
18.0%
Banking Service Fees
Managerial Financial Margin plus
Banking Service Fees
Recurring Net Income
(1)
(2)
(3)
It does not include the result of R$ 88 million which would be recognized if the liabilities were marked-to-market.
Credit transactions increased 8.8% in the quarter.
Include the effects of R$ 51 million of Collective Labor Agreement.
Variance
6
Net Interest Margin (NIM) x SELIC
16.5%
13.3%
15.3%
14.0%
14.3%
13.5%
13.3%
12.7%
12.8%
12.5%
12.0%
11.3%
11.3%
11.4%
1st Q./ 06 2nd Q./ 06 3rd Q./ 06 4th Q./ 06 1st Q./ 07 2nd Q./ 07 3rd Q./ 07
NIM
SELIC
7
Loans by Type of Customer
R$ Million
Sep 30,07
Individuals
Jun 30, 07
Dec 31, 06
Sep 30,06
Variance
sep/07jun/07
Variance
sep/07dec/06
Variance
sep/07sep/06
49,174
45,035
40,358
37,463
9.2%
21.8%
31.3%
9,466
8,867
9,188
7,976
6.8%
3.0%
18.7%
• Personal Credit
14,149
13,886
13,156
13,721
1.9%
7.6%
3.1%
• Vehicles
25,558
22,282
18,014
15,766
14.7%
41.9%
62.1%
Company Loans
50,880
46,885
46,552
45,825
8.5%
9.3%
11.0%
• Corporate
31,247
28,982
30,312
30,294
7.8%
3.1%
3.1%
• Small and Medium Sized
19,633
17,903
16,240
15,532
9.8%
20.9%
26.4%
Mandatory Credit 1
5,853
5,711
5,896
5,740
2.5%
-0.7%
2.0%
Argentina, Chile and Uruguay
8,164
7,190
842
841
13.6%
869.9%
871.1%
114,071
104,821
93,648
89,869
8.8%
21.8%
26.9%
• Credit Cards
Total Loans
1 Rural and Mortgage Loans – linked with the balances of Demand and Savings Deposits, respectively.
8
Loans by Type of Customer
R$ Million
CAGR = 28.5%
114,071
CAGR = 17.5%
93,648
CAGR = 43.2%
67,756
53,275
27,768
50,880
46,552
44,581
30,480
34,095
49,174
40,358
28,372
12,777
dec-03
18,272
dec-04
Individuals
dec-05
Companies
dec-06
sep-07
Total
9
Nonperforming Loans and Coverage Ratios
Nonperforming Loans Ratio
8.3%
5.2%
8.1%
5.3%
2.1%
2.2%
Sep/06
Dec/06
7.8%
7.5%
5.0%
5.1%
2.1%
2.3%
Mar/07
Jun/07
Coverage Ratio (*)
7.3%
4.7%
169%
168%
166%
162%
161%
sep/06
dec/06
mar/07
jun/07
sep/07
1.7%
NPL Ratio
NPL Ratio- Individuals
NPL Ratio- Companies
Sep/07
(*) Provision for loan losses / Credits overdue for more than
60 days, which are not accrued.
10
Nonperforming Loans (NPL) by Segment
R$ Million
Sep 30, 07
NPL
Itaubanco
Banking
Credit Cards – Account Holders
Itaú BBA
Itaucred
Vehicles
Credit Cards – Non Account
Holders
Taií – FIT/FIC/FAI
Taií – Payroll Credit
Total
Credit
Portfolio
NPL
Ratio
Jun 30, 07
Mar 31, 07
NPL Ratio
NPL Ratio
2,553
2,264
289
16
2,301
1,572
42,162
37,005
5,157
26,024
35,647
27,571
6.1%
6.1%
5.6%
0.1%
6.5%
5.7%
6.5%
6.6%
5.8%
0.3%
6.4%
5.4%
6.8%
6.9%
5.7%
0.1%
6.1%
5.1%
241
3,827
6.3%
7.0%
6.5%
475
13
4,870
1,796
2,453
103,832
26.5%
0.5%
4.7%
24.4%
0.7%
5.1%
28.7%
0.5%
5.0%
11
Funding
R$ Million
Variance (%)
Sep 30, 07
Sep 30,06
Sep./07Sep./06
Deposits 1
109,442
105,055
80,949
4.2%
35.2%
Investment Funds
181,469
180,121
166,822
0.7%
8.8%
Managed Portfolios 2
23,873
21,008
10,044
13.6%
137.7%
Technical Provisions Regarding to Insurance,
Pension Plans and Capitalization
22,466
21,510
17,534
4.4%
28.1%
337,250
327,694
275,348
2.9%
22.5%
Funds from Acceptances and Securities Issued
7,327
7,899
7,568
-7.2%
-3.2%
On-lendings
5,684
5,443
5,496
4.4%
3.4%
Repurchase Agreement – Third Part Portfolio
19,250
9,860
5,477
95.2%
251.5%
Subtotal - Market
32,261
23,202
18,541
39.0%
74.0%
369,511
350,896
293,890
5.3%
25.7%
Subtotal – Clients
Total
1
Jun 30, 07
Sep./07Jun./07
Includes Repurchase Agreement – Own Issue Securities.
2
On Jun 30, 07, includes the acquisition of two companies from Bank of America: BankBoston International (Miami) and Bank of America Trust
Company Ltd (Bahamas).
12
Funding
R$ Million
CAGR = 28.1%
369,511
CAGR = 25.1%
32,261
309,598
CAGR = 28.4%
21,232
175,802
14,055
146,102
13,910
214,268
13,786
337,250
288,367
200,482
161,746
132,192
dec-03
dec-04
Customers
dec-05
Market
dec-06
sep-07
Total
13
Banking Service Fees
R$ Million
3rd Q/07
2nd Q/07
Variance
Jan –
Sep./07
Jan –
Sep./06
Variance
Asset Management 1
521
504
3.5%
1,508
1,504
0.3%
Current Account Services
373
406
-8.4%
1,184
1,139
3.9%
Credit Cards
581
556
4.5%
1,682
1,433
17.4%
Loan Operations and Guarantees
Provided
580
545
6.4%
1,622
1,203
34.8%
Collection Services
237
229
3.3%
688
659
4.4%
Other
238
232
2.2%
649
452
43.5%
2,529
2,472
2.3%
7,333
6,390
14.8%
Redecard Banking Service Fees 2
-
35
-
67
94
-29.0%
Serasa Banking Service Fees 3
-
42
-
100
157
-36.0%
2,529
2,550
-0.8%
7,500
6,641
12.9%
Subtotal
Total
1
Funds and Consortia Management Fees
2
We adjusted Redecard Banking Service Fees to reflect the participation change from 31.9% to 23.2% that occurred in July, 2007. Thus, the amount of R$ 35
million corresponds to the reduction of 870 b.p. in the 2nd Q./07.
3
Serasa results started to be recognized under the equity method of accounting.
14
Non Interest Expenses 1
R$ Million
Jan –
Sep./07
Jan –
Sep./06
3rd Q/07
2nd Q/07
Variance
Personnel Expenses
(1,375)
(1,341)
2.6%
(3,968)
(3,574)
11.0%
Other Administrative Expenses
(1,570)
(1,624)
-3.3%
(4,734)
(4,153)
14.0%
(388)
(460)
-15.7%
(1,225)
(973)
25.9%
(114)
(100)
13.9%
(325)
(275)
18.2%
(3,447)
(3,524)
-2.2%
(10,251)
(8,975)
14.2%
Other Operating Expenses
Tax Expenses (CPMF and Others)
Total
2
1
Includes the effect of R$ 51 million due to Collective Labor Agreement
2
It does not include PIS, Cofins and ISS
Variance
15
Financial Instruments – Market Value
R$ Million
Unrealized Profits /(Losses)
1
At the Stockholders’ Equity
Sep 30, 07
Jun 30, 07
Sep 30,06
19
32
18
Securities and derivative financial instruments
210
220
153
Loan, lease and other credit operations
223
293
80
5,188
-
-
352
-
-
1,401
1,584
1,526
Parent company
826
934
899
Minority stockholders
575
650
626
Securitization of foreign payment orders
(18)
(13)
(5)
Subordinated debt
(64)
(134)
21
Other liabilities
957
801
473
8,268
2,782
2,265
Interbank deposits
Redecard Participation
Serasa Participation
Investment in BPI
Total unrealized
1
It does not consider corresponding tax effects.
16
Segmentation (Pro forma)
Itaú
Itaubanco
Itaú BBA
Itaucred
Banking
Corporate
Operations
Vehicles
Credit Cards –
Account Holders
&
Investment Banking
Corporation
Credit Card – Non
Account Holders
Insurance,
Capitalization and
Pension Plans
Taií: FIT, FIC (CBD),
FAI (LASA) and
Payroll Credit
Investment Funds
and Managed
Portfolio
NB: The organization chart of Itaucred segment reflects, chiefly, the transactions
carried out through channels intended for non current account holders.
17
Highlights of Pro Forma Segments
R$ Million
Itaubanco
Itaú BBA
Itaucred
Corporation
Itaú 1
3rd Quarter of 2007
Recurring Net Income
833
321
333
83
1,569
Allocated Capital Tier I
14,106
6,442
3,315
4,140
28,003
RAROC in the Quarter (% p.y.)
25.1%
21.6%
40.2%
7.0%
23.0%
245,703
105,852
35,125
8,113
298,484
Total Assets
2nd Quarter of 2007
Recurring Net Income
1,255
302
310
52
1,919
Allocated Capital Tier I
12,454
5,425
3,313
5,354
26,546
RAROC in the Quarter (% p.y.)
40.8%
23.8%
39.6%
3.9%
29.8%
207,752
85,110
30,951
9,966
255,418
Total Assets
1
It does not represent the sum of the parts, because there are transactions between the segments eliminated in the consolidated figures only.
18
Net Income
R$ Million
3,000
2,428
2,500
2,115
1,902
2,000
1,500
1,000
1,352
1,352
1,425
1,425
1,460
1,397
1,579
1,592
1,498
500
1,628
1,902
1,919
1,569
1,280
71
0
3Q/05
4Q/05
Net Income
1Q/06
2Q/06
3Q/06
4Q/06
1Q/07
2Q/07
3Q/07
Recurring Net Income
19
APIMEC Meetings 2007
APIMEC Meetings 2007
Itaúsa and Banco Itaú Holding Financeira
Date:
Where:
December 5th, 2007 – Wednesday
Buffet Rosa Rosarum - São Paulo
RSVP: 0800 722 8880
 From 11:00 am to 1:30 pm – Presentations of Itaúsa and Subsidiaries
Investor Relations Officers;
 From 3:00 pm to 6:00 pm – Presentation of Banco Itaú Holding Financeira
CEO and Executives Directors.
More information on: www.itausa.com.br and www.itauir.com
20
Itaucred
Conference Call of the Results of the
3rd Quarter/2007
November 07, 2007
21