conference call november 12, 2004

80 years of innovation.

1

Conference Call

November 12, 2004

Consolidated Results

3rd Quarter 2004


2

Performance Indicators

(1) In August, 2004, a reverse stock split in a ratio of 100 shares per share was performed. Amounts from previous periods were adapted for better comparison.

R$ Million

3Q04 2Q04 3Q03

Operating Income 556 401 428

Net income 327 305 270

Earnings per share (R$) (1) 0.23 0.22 0.20

ROAE (%) 17.8% 17.3% 16.5%

Total assets 84,062 80,011 68,066

Total loans 30,667 30,045 26,624

Deposits + Funds 64,698 59,831 49,322

Stockholders' equity 7,932 7,704 7,023


3

9M04 9M03

1,428 1,451

908 761

0.65 0.55

16.4% 15.2%

Performance Indicators

Operating Income

Net income

Earnings per share (R$) (1)

ROAE

R$ Million

(1) In August, 2004, a reverse stock split in a ratio of 100 shares per share was performed. Amounts from previous periods were adapted for better comparison.


4

R$ Million

Consolidated Results

3Q04 2Q04 3Q03

Profit from financial intermediation 1,400 1,142 1,116

(+) Fees from services rendered 829 820 685

(-) Personnel & Adm. Expenses (1,308) (1,242) (1,181)

(+/-) Other Operating Income/ Expenses (365) (319) (192)

(=) Operating Income 556 401 428

(+/-) Non-operating Income (Expenses), net (5) 18 (7)

(+/-) Income tax and social contribution (141) (18) (56)

(-) Profit Sharing / Minority Interest (83) (96) (95)

Net Income 327 305 270


5

Financial Margin

R$ Million

3Q04 2Q04 3Q03

Revenue from Financial Intermediation 3,095 3,414 3,419

Expenses on Financial Intermediation (1,420) (1,956) (1,887)

Financial Margin (Before Provision for Loan Losses) (A) 1,675 1,458 1,532

Provision for Loan Losses 275 316 416

Financial Margin (After Provision for Loan Losses) 1,400 1,142 1,116

Total Average Assets

(-) Average balance of interbank loans

(=) Adjusted total assets

(=) Adjusted total assets – Fixed assets (B)

Adjusted annualized financial margin (A / B)

82,036 75,758 67,079

15,316 12,286 9,623

66,720 63,472 57,456

63,183 59,505 54,178

11.0% 10.2% 11.8%

Note: Unadjusted net financial margin would be 8.8%, 8.4% and 10.0% in 3Q04, 2Q04 and 3Q03, respectively.


6

Effective income tax rate

R$ Million

3Q04 2Q04 3Q03

Income before taxes and profit sharing to employees 551 419 421

Profit sharing to employees (46) (57) (59)

(A) Income before taxes and after profit sharing 505 362 362

Income Tax @ 25% and Social Contribution @ 9% (172) (123) (123)

Tax deductible dividends (interest on capital) / Permanent differences (net)

67 72 54

Non-taxable / non-deductible exchange rate fluctuation and equity income (36) 33 13

(B) Income Tax & Social Contribution for the period (141) (18) (56)

(B /A ) Effective Income Tax & Social Contribution Rate 28% 5% 15%


7

Other Operational Income / Expenses

R$ MillionAnalysis of Q-o-Q changes

3Q04 2Q04 3Q03

3Q04-3Q03

Other Operating Income / Expenses (365) (319) (192) (173)

Main Changes

Provision for labor, fiscal and civil contingencies (114) (106) (74) (40)

Credit Card issuance expenses (92) (87) (63) (29)

Levies on fees and interest (199) (174) (160) (39)

Goodwill amortization (39) (36) (20) (19)

Early Retirement Program (9) (15) - (9)

Total Changes Above (136)


8

Securities Portfolio

Market Value Adjustment R$ Million

Held To Maturity

+ 283

Market Value

Adjustment 09/30/2004

3Q04

Market Value

Adjustment 06/30/2004

2Q04

Income Statement Impact 77 11 65 -46

Stockholders´ Equity Impact (111) 54 (165) 92

Amortized Cost

Market Value Adjustment

Securities Held to Maturity 5,338

5,621

Unrealized gains

R$ Million


9

Fees from Services Rendered

R$ Million

Banking fees and other fees and commissions 408 403 372 Credit Cards 321 321 232

Unibanco’s cards + Redecard 214 220 148

Credicard 107 101 84 Asset management 100 96 82

Total fees from services rendered 829 820 685

3Q04 2Q04 3Q03


10

Personnel and Administrative Expenses

3Q04 2Q04 3Q03

Personnel Expenses 527 484 491

Administrative Expenses 781 758 690

Total 1,308 1,242 1,181

Efficiency Ratio 61.2% 63.4% 58.2%

R$ Million


11

Loan Portfolio Breakdown

Non-Accrual Portfolio

AA-C Loan Portfolio

R$ million

D-H

A

C

AA

B

8.4% 6.9% 6.8%

11.6%8.1% 8.1%

34.4%37.7% 40.9%

36.0% 39.2% 36.4%

9.6% 8.1% 7.8%

Sep 03 Jun 04 Sep 04

26,624 30,045 30,667

AA

A

B

C

D-H

90.4%

91.9% 92.2%

99.2%

96.6%

3Q03 3Q04

1.0%1.0%

6.0%

4.7%

Non-Accrual Portfolio/ Loan Portfolio

Coverage ratio of non-accrual Portfolio

Net Write-Off / Total Portfolio


12

Loan Portfolio – Individuals

Sep-03 Sep-04Jun-04

3.9%

15.0%

10.1%

26.2%

5.1%

103.1%

1.3%

20.3%

4.8%

27.0%

R$ million

973

9,050

6,012

1,779 1,881 1,297

11,496

1,551

5,434

1,092

10,969

1,958 1,3141,976

6,248

Multiple Bank andOther Companies

Consumer FinanceCompanies

Unibanco's CreditCards

Credicard Total Individuals


13

Loan Portfolio – Corporate

Sep-03 Sep-04Jun-04

8.7%

30.5%

-2.5%

2.3% 0.5%

9.1%

R$ million

4,213

13,361

17,574

5,055

14,021

19,076

5,497

13,674

19,171

Micro, Small and Middle Companies Large Corporate Total Corporate


14

47%

Loan Portfolio Mix

54%50% 45%

46%50%

55%

Dec-01 Dec-02 Dec-03 Sep-04

25,827 30,66726,751 27,917

53%

Retail Wholesale

Note: Wholesale includes only large corporates

R$ Million


15

Loan Portfolio Mix

8.5%

21.2%4.8%

0.5%

12.8%2.1%

26,62430,045 30,667

15.2%

Individuals

+27.0%

Corporate

+9.1%

% Sep-04/Sep-03

R$ Million

R$6.3 BlnUS$2.2 Bln

US Dollar indexed portfolio

17,574 19,076 19,171

9,050

10,969 11,496

Sep-03 Jun-04 Sep-04

R$5.9 BlnUS$2.0 Bln

R$6.8 BlnUS$2.2 Bln


16

Consumer Companies (including Credicard Group)

Includes: Fininvest, Unicard, HiperCard, 50% LuizaCred, 50% PontoCred, 33.3% Credicard, 33.3% Orbitall and 31.94% Redecard.

3Q04 2Q04 3Q03

R$ Million

Contribution to Unibanco’s results

Revenues

Credit Portfolio

Provision for Loan Losses

Provision for Loan Losses / Credit Portfolio

161 150 134

5,915 5,919 3,974

5,286 4,992 3,641

188 193 199

3.6% 3.9% 5.5%


17

Consumer Companies (without Credicard and Orbitall)

Includes: Fininvest, Unicard, HiperCard, 50% LuizaCred, 50% PontoCred and 31.94% Redecard.

3Q04 2Q04 3Q03

R$ Million

137 123 110

Revenues 4,325 4,353 2,502

Credit Portfolio 3,972 3,695 2,550

Provision for Loan Losses 155 163 167

Provision for Loan Losses / Credit Portfolio 3.9% 4.4% 6.5%

Contribution to Unibanco’s results


18

Funding

Sep-04 Jun-04 Sep-03 %Q-o-Q

%Y-o-Y

R$ Million

Deposits 31,014 28,925 24,986 7.2% 24.1%

SuperPoupe 1,030 403 - 155.6% -

Funds 32,654 30,503 24,336 7.1% 34.2%

64,698 59,831 49,322 8.1% 31.2%


19

Total Reserves

Insurance, Extended Warranty and Pension

R$ Million

3Q04 2Q04 3Q03

Net Premium Written + Pension Contributions 1,039 1,163 753

Insurance and Pension Reserves 5,106 4,847 3,682

Net Income 76 79 58

Combined Ratio 99.4% 99.6% 103.9%Loss Ratio 44.1% 50.5% 58.4%

3,6824,847 5,106

5.3%31.6%

Insurance + Warranty

+26.8%

Private Pension

+42.2%

%

Sep-04/Sep-03

2,8403,770 4,039

8421,077 1,067

Sep-03 Jun-04 Sep-04

38.7%


20

Macroeconomic Perspectives

GDP growth 4.2% 4.0%

Fx Rate (R$ / US$) 2.90 3.00

SELIC (end of the year) 17.75% 15.50%

IPC-A 7.1% 6.1%

2004 2005


21

Unibanco Guidelines 2004

Loan Portfolio

CorporateLargeSmall / Medium

IndividualsMultiple Bank and Other Companies

Consumer FinanceUnibanco’s Credit Cards

Administrative Expenses

Fee Income

Credicard

Sept-04 / Sept-03

15%

9.1%2.3%

30.5%

27%15.0%

26.2%103.1%

11%

16%

GUIDANCEAug 13, 2004

18%

9%5%

22%

30%22%

23%54%

9%

12-16%

NEWGUIDANCE

9%

14-16%

15%

11%2%

37%

15%20%

34%107%

20.3%


Credicard Shareholders’ Restructuring


Credicard – Transaction background

7.5 million credit card portfolio places Unibanco as a leading player

in this segment.

Unibanco has its own credit card processing unit.

Main issuer of private label in Brazil: 9.5 million cards.

Accretive transaction to shareholders.

Unibanco has kept equity in Redecard, a highly profitable company,

which manages the merchants’ relationship.

Promising partnerships and alliances with major retail chains.


Credicard: Before and After the Transaction

Before

After

33.3%

33.3%

33.3%

50%

50%


Orbitall: Before and After the Transaction

Before

After

33.3%

33.3%

33.3%

100%


Redecard: No Changes

32%

32%

32%

4%


(99) (63) (162)

(90) (10) (100)

1.354 67 1.421

Price / Book

Price / Book 1.3 – 1.4Price / Earnings

Credicard Orbitall Total

Transaction amount 1,543 140 1,683(99) (63) (162)

(-) Allowance for future contingencies (90) (10) (100)

Pre-tax non-operational result 1,354 67 1,421

Price / Book value 15.6 2.2 10.4Price / Earnings 18.4 9.5 17.1

Price / Book valuePrice / Earnings 8.1

Shareholders’ Restructuring – Credicard Group

(-) Book value

Transaction multiples

Unibanco’s multiples (Unit @ R$15.15)

R$ Million


Balance Sheet and P&L Impacts


29

Transaction impacts – Estimates for 2005

Cash proceeds + R$1.7 billion

46% reduction in goodwill balance - R$778 million (Bandeirantes)

Improvement in goodwill/equity ratiofrom 21.4% to 11.4% (as of Sep/04)

Reduction in investments account - R$162 million

Loan portfolio reduction - R$1.3 billion

Interest income from transaction proceeds

+ R$284 million (CDI @16.6% 2005)

Reduction of goodwill amortization +R$95 million

Credicard / Orbitall equity pick-up elimination

- R$112 million

Maintenance of Redecard equity pick-up

R$ 102 million

Balance Sheet P&L


Estimated 2005 impacts

R$ million

Additional interest income (interbank rate (CDI) @ 16.6% 2005) 284

Elimination of goodwill amortization 95

Equity pick-up lost (2004 + interbank rate (CDI) @16.6% 2005) (112)

Income tax (129)

Incremental net income for 2005 138

ROE improvement 1.5%


Our Credit Card and Private Label

Businesses


32

CredicardUnibanco’s cards*

September - 2004December-1999

Credit cards issued (million cards)

* Unicard, HiperCard and Fininvest

2.0

4.1

7.5 7.6

7.5 million credit cards

9.5 million private label cards

High potential retail client base (Ponto Frio and Magazine Luiza)

Credit Card business

Unibanco’s portfolio, as of September 2004:

R$ million


33

Unibanco and Credicard’s revenues comparison

Credicard 100.0 100.0 100.0 100.0

Unibanco’s cards 44.3 45.3 48.1 78.0

Private Label Unibanco 10.9 14.3 16.3 20.9

Total Unibanco 55.2% 59.6% 64.4% 98.9%

3Q02 3Q03 3Q043Q01

%


34

Market total: Abecs

Credicard

Banco do Brasil

Itaú

Bradesco

UBB = Visa + MasterCard

14.2%

7.6%

13.9%

12.7%

10.8%

Billing – Credit cards – without HiperCard

23.0%

21.0%

19.0%

17.0%

15.0%

13.0%

11.0%

9.0%

7.0%

5.0%


35

Credicard

Banco do Brasil

Itaú

Bradesco

UBB = Visa + MasterCard + HiperCard

14.2%

11.7%

13.9%12.7%

10.8%

Billing – Credit cards – with HiperCard

Market total: Abecs

23.0%

21.0%

19.0%

17.0%

15.0%

13.0%

11.0%

9.0%

7.0%

5.0%


Total Cards Issued – Sept/04

Before After

TOTAL

Cards Issued (thousand) 4,206 2,621 8,486 1,422 305 2,453 19,494 17,041

Hipercard - 2,621 - - - - 2,621 2,621

Visa / MC 4,206 - 708 - - 2,453 7,368 4,914

Private Label - - 7,779 1,422 305 - 9,505 9,505

Billings (R$ million) 4,603 3,093 2,251 479 122 4,599 15,146 10,548

Loan Portfolio (R$ million) 1,400 891 1,071 156 34 1,171 4,723 3,553


37

For further information contact our Investor Relations Area atphone: 5511-3097-1980

fax: 5511-3813-6182email: [email protected]

site: www.ir.unibanco.com

This presentation contains forward-looking statements regarding Unibanco. its subsidiaries and affiliates - anticipated synergies. growth plans. projected results and future strategies. Although these forward-looking statements reflect management’s good faith beliefs. they involve known and unknown risks and uncertainties that may cause the Company’s actual results or outcomes to be materially different from those anticipated and discussed herein. These risks and uncertainties include. but are not limited to. our ability to realize the amount of the projected synergies and the timetable projected. as well as economic. competitive. governmental and technological factors affecting Unibanco’s operations. markets. products and prices. and other factors detailed in Unibanco’s filings with the Securities and Exchange Commission which readers are urged to read carefully in assessing the forward-looking statements contained herein. Unibanco undertakes no duty to update any of the projections contained herein.

conference call november 12, 2004

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