the seventh annual latin america equity conference new york
DESCRIPTION
1. The Seventh Annual Latin America Equity Conference New York. J.P. Morgan Securities Inc. Monday, November 6 & Tuesday, November 7, 2000. Page. Relevant Events After June 30, 2000. 3. Highlights. 33. Financial Performance. 37. Shares Evolution. 51. - PowerPoint PPT PresentationTRANSCRIPT
The Seventh Annual Latin America Equity Conference
New York
1
J.P. Morgan Securities Inc.Monday, November 6 &
Tuesday, November 7, 2000
2
Relevant Events After June 30, 2000
Highlights
Financial Performance
Shares Evolution
3
33
37
51
Page
3
Relevant Events After June 30, 2000
4
Acquisition of BANESTADO
Highlights
5
• 5th largest GDP in Brazil Growth Rate of 28% Against 12% of Brazil in Last 20 Years;
• 9.1 million inhabitants (78% urban);
• Good industrial development and lots of foreign investment;
• Strategic consistence: to concentrate efforts in the largest markets Leadership in 3 of the 5 largest Brazilian states;
Paraná
Strategic Vision
6
• Banestado is a leader in its market: Strong brand; Wide network (376 branches); Well qualified management team; Strong relation with its customers; Almost 50% of the customers are not public employees;
• 413 thousand debit cards and 181 thousand credit cards
Motivators
Strategic Vision
7Acquisition of BANESTADO
Financial Impact
8
• Simulation model with 12 variables;
• Several hypotheses analyzed;
• IRR = Interbank Deposits Rate (CDI) + 3% per year;
• Present value between R$ 500/800 million in a reasonable hypothesis.
Evaluation of Banestado’s Tax Credits
Basic Hypothesis: R$ 629 millionBasic Hypothesis: R$ 629 million
9Multiple Comparative
Assets without Tax CreditsTax Credits (Nominal Value)Assets with Tax Credits
6,6061,6598,265
5,545437
5,982
5,164343
5,507
Banestado
03.31.2000
Bandeirantes
08.31.2000
Boa Vista
08.31.2000Assets
SE without Tax CreditsTax Credits (Nominal Value)SE with Tax Credits
5541,6592,2132,213
86437523
151343495
Stockholders´ Equity (SE)
R$ Million
AuctionEmployees + Minorities
1,62555
88%12%
Total 1,680 100%
Total Price R$ MM %
10
Total Price 1,680 1,044 946
Banestado
03.31.2000
Bandeirantes
08.31.2000
Boa Vista
08.31.2000
R$ Million
Price for the Bank 1,051 753 717
Price for Tax Credit 629629 291 229
Multiple Comparative (*)
(*) For Bandeirantes and Boa Vista, tax credits present value was estimated as 67% of the Nominal Value. In Banestado, it is 38%
Nominal Value - Tax Credit 1,659 437 343
11Multiple Comparative
Banestado Bandeirantes Boa Vista Banestado Bandeirantes Boa Vista
20.32% 17.45% 17.18%Price /Total Assets (%) 15.91% 13.57% 13.88%
0.76 2.00 1.91Price/ Stockholders´ Equity (x) 1.90 8.74 4.73
36.09% 25.42% 49.39%Price / (Total Dep. + Mutual Funds) (%) 22.58% 18.33% 37.44%
Price / Nº of Customers (R$ Th / customer) 3.0 2.1 10.5 1.9 1.5 8.0
Price / Nº of Branches (R$ Th. / branch) 4,468 6,178 12,613 2,795 4,453 9,560
With Fiscal Credits Without Fiscal Credits
Price / Total Deposits (%) 44.11% 46.03% 68.09% 27.59% 33.18% 51.61%
Price / Credit Operations (%) 100.59% 57.20% 59.17% 62.92% 41.23% 44.85%
90.31% 76.22% 475.45%Price / (Demand + Savings Dep.) (%) 56.49% 54.94% 360.36%
12Conclusion
•The BANESTADO’s acquisition is justified by strong, strategic and financial aspects combined with an adequate management of the risk inherent to the transaction
•Attractive return to the shareholders:There will be no underwriting of new shares;R$ 1.6 billion of tax credits are not reflected in the stockholders’ equity;Low capital consumption (excess of capital remains high);Increase in the liquidity of the group;Synergy potential;Neutral impact on the results for 2001;Positive impact on the results from 2002 on.
13
1,765
2,130
780885
1,009 1,067 1,0601,244
1,763
896 835 766 726835
11,715 11,570
6,5587,450 7,754
8,876
10,771
0
500
1,000
1,500
2,000
2,500
94 95 96 97 98 99 Sep/00(*)0
2,000
4,000
6,000
8,000
10,000
12,000
Distribution Channels Evolution
(*) September 30, 2000
1,754
712
173
376
Branches Customer-Site Branches ATMs Banestado
14
7.6
7.0
5.25.7
6.46.7 6.8 6.9 7.0
5.85.75.3
4.94.94.74.64.1
3.83.73.63.4
2.0
3.0
4.0
5.0
6.0
7.0
Itaú Consolidado + BanestadoItaú ConsolidatedItaú
Number of Customers
September 30, 2000Banco Itaú: 5.8 MillionBanerj: 0.8 MillionBemge: 0.3 MillionBanestado: 0.6 MillionItaú Buen Ayre: 0.1 Million
Million
15Number of Customers
7.6
7.0
5.25.7
6.46.7 6.8 6.9 7.0
5.85.75.3
4.94.94.74.64.1
3.83.73.63.4
2.0
3.0
4.0
5.0
6.0
7.0
Itaú Consolidado + BanestadoItaú ConsolidatedItaú
September 30, 2000Banco Itaú: 5.8 MillionBanerj: 0.8 MillionBemge: 0.3 MillionBanestado: 0.6 MillionItaú Buen Ayre: 0.1 Million
Million
Individual Customers:Individual Customers:436 Thousand436 Thousand
183 Thousand State Payroll183 Thousand State Payroll
Company Customers:Company Customers:115 Thousand115 Thousand
Individual Customers:Individual Customers:436 Thousand436 Thousand
183 Thousand State Payroll183 Thousand State Payroll
Company Customers:Company Customers:115 Thousand115 Thousand
16Demand & Savings Accounts Evolution
0
2
4
6
8
10
12
14
16
18
BanestadoBemgeBanerjItaú
Million18.5
10.2 10.9
13.019%
9.5%
16.9
17
July, 2000
5.5 4.9 5.80.2 0.62.8
DemandDeposits
SavingDeposits
TimeDeposits
Customers CreditOperations
TotalResources
Itaú
Market Share in the State of Paraná (%)
18
July, 2000
5.5 4.9 5.8
23.4 23.325.5
16.0
24.3
0.2 0.62.8
9.3
DemandDeposits
SavingDeposits
TimeDeposits
Customers CreditOperations
TotalResources
BanestadoItaú28.9 28.2
25.727.1
21.8
9.9
Market Share in the State of Paraná (%)
19
March, 2000
40.8%
56.6%
16.4%
66.2%
Banking Services Fees/NetIncome from Financial
Operations
Efficiency Ratio
BanestadoItaú
Operating Indices – Paraná State
20
4.9 8.2 11.5 13.8 17.025.8
33.9
6.2
5.8
4.13.9
2.72.12.0
0.9
Dec-94 Dec-95 Dec-96 Dec-97 Dec-98 Dec-99 Sep-00
Banestado
Managed Portfolios
Mutual Funds
Funds Under Management
6.910.3 14.2
17.721.1
32.0
40.6R$ Billion
(*) In currency of Constant Purchasing Power as of December 31, 1995 until then, after which the calculation will be made in accordance to the Corporation Law
21
Internet Banking
Highlights
22
0
200
400
600
800
1,000
1,200
1,400
1,600
Dec-96
Mar-97
Jun-97
Sep-97
Dec-97
Mar-98
Jun-98
Sep-98
Dec-98
Mar-99
Jun-99
Sep-99
Dec-99
Mar-00
Jun-00
Sep-00
PC and Internet Banking Customers
1,363
601
297
Thousands of Customers
The Largest Brazilian Bank in PC and
Internet Banking Users
Forecast:1.5 million of
customersin Dec/2000
PC Banking
Internet Banking
663
700
23
7.47.3
2.9 3.1 3.74.7 4.7
5.86.7
2.5
4.05.0
7.0
5.95.7
5.35.2
4.74.4 4.4
3.7
3.2
3.9
3.2
5.5
0
2
4
6
8
10
12
14
Dec-97 Mar-98 Jun-98 Sep-98 Dec-98 Mar-99 Jun-99 Sep-99 Dec-99 Mar-00 Jun-00 Sep-00
PC and Internet Banking - Transactions
Million
Companies
Individuals
200019991998
13.3
IndividualsIndividuals 1,1541,154 1,0671,067
CustomersCustomers Sep/00Sep/00 Jun/00Jun/00
CompaniesCompanies 209209 196196
Thousand
5.7
24
Strategic Cooperation Itaú - La Caixa
Highlights
25Strategic Cooperation Itaú - La Caixa
Caja de Ahorros yPensiones de Barcelona“la Caixa”
•Over 150 years of activity•1st Place among the European Banks
Classified by Net Income•3rd Spanish Financial Group•Assets: US$ 74 billion•Stockholders´ Equity: US$ 5 billion•20,465 Employees.•10% of the Spanish market.•36% of the market in the Catalonia region.•4,300 branches•6,300 self-service points.
Relevant participations:•Deutsche Bank•Telefonica•Repsol-YPF•Endesa•BPI(*)
3.83%5%
9.9%5%
12.5%
(*) Itaúsa has an equal participation.
26
Caja de Ahorros y Pensiones de Barcelona - “la Caixa”
Banco Itaú S.A.
1 member in the International Advisory Committee
1 Managing Director
1%
Spain is the second largest foreign investor in Brazil
“For Itaú, the cooperation
with la Caixa means enlarge
and diversify its strategic relations,
bringing new business
opportunities”
“For Itaú, the cooperation
with la Caixa means enlarge
and diversify its strategic relations,
bringing new business
opportunities”
Strategic Cooperation Itaú - La Caixa
27Highlights
Itaú is Part of Dow Jones
28Itaú is Part of Dow Jones - SAM Group Index
Banco Itaú was, for the first time, chosen as a member of the Dow Jones Sustainability Group Index (DJSGI), along with 236 other companies, of which only two are Brazilian.
Corporate Sustainability
Ability to Create Value to the Shareholder in the Long-Term
Social, Cultural and Environmental Consciousness
Quality of Management
Basic requirements of the DJSGI companies:
DJSGI became, since its creation, in January 1999, an important reference to investors and foreign portfolio managers, who analyze
its evolution to take their investment decisions.
29Highlights
Awards
30Awards
Best Domestic Bank in Latin America – 2000 Euromoney
Investor Relations Professional – 1999 Abamec - NE
Transparency Prize - 1997, 1998 e 1999 Atlantic Rating
Investor Relations Professional - 1999 Abamec - Nationwide
Best Brazilian Bank - 1998,1999 e 2000 Euromoney
Best Domestic Bank in Brazil - 1999 Global Finance
Best Bank in Latin America - 1999 America Economia
The Best Listed Company - 1999 Abamec - SP
Investor Relations Professional - 1999 Abamec - Sul
The Best Listed Company - 1999 Abamec* - Nationwide
Best Bank in Latin America - 1998, 1999 Latin Finance
Bank of the Year – Brazil, 1999 The Banker
Best Annual Report Award - 2000 Abrasca*
Best IR Web Site In Brazil - 2000 Offline Bulletin Boardroom, Inc., New York
(*) Abrasca – Brazilian Association of Listed Companies Abamec - Brazilian Association of Capital Market Analysts
31Banco Itaú´s Ratings
Short Term Long Term Individual LegalNationalInternational
F1+B
AA+BB-
-B/C
-2T
Financial Strength RatingBank DepositsLong-Term Debts
CB3/NP
B2
Intra-Country Issuer A
Local Currency BBpi
AAA
Besides...
Moody’s
Fitch IBCA
Thomson
Standard & Poors
Atlantic Rating
32
Banco Itaú
First Aaa in Brazil
Moody’s granted Banco Itaú grade “Aaa.br”,
the highest in its scale, in the concept of
National Rating
Banco Itaú´s Ratings
33
Highlights
34Financial Highlights Evolution R$ Billion (*)
(*) Balance at the end of period (1) Including Matrix Funds
56.3 54.3 51.9 54.1 54.5 57.2
Jun.99 Sep.99 Dec.99 Mar.00 Jun.00 Sep.00
Total Assets
22.122.123.220.121.4 21.8
Jun.99 Sep.99 Dec.99 Mar.00 Jun.00 Sep.00
Deposits39.7
27.2 28.032.0 34.1 37.3
Jun.99 Sep.99 Dec.99 Mar.00 Jun.00 Sep.00
Asset Management (1)
17.6 18.5 20.0 20.2 21.6 22.2
3.1 3.0 2.9 2.9 2.8 2.7
14.5 15.5 17.1 17.4 18.7 19.6 17.6 18.5 20.0 20.2 21.6 22.2
Jun.99 Sep.99 Dec.99 Mar.00 Jun.00 Sep.00
Loans
Loans & LeasingGuarantees
35
3.5%3.2%2.7%
4.1%3.3%
2.4%
-0.3%-0.9%-0.6%
Excellent Performance
(*) Annualized
33.3%30.3%
26.1%
40.3%33.8%
26.2%
-2.2%-7.0%-5.2%
ROE*
2Q99 3Q99 4Q99 1Q00 2Q00 3Q00
2Q99 3Q99 4Q99 1Q00 2Q00 3Q00
ROA*
Extraordinary
Recurring27.3%
31.2%30.7%
2.7%3.2%
3.3%
36Excellent Performance
3Q00
Efficiency Ratio
58.4%58.6%56.6%57.3%
63.2%
57.5%
2Q99 3Q99 4Q99 1Q00 2Q00 3Q00
The BIS ratio in the third quarter reached 20.2%, based on the financial
conglomerate, and18.3% based on
the company conglomerate.
BIS Ratio
20.9% 21.0% 20.8%
19.6%
18.3%
3Q99 4Q99 1Q00 2Q00 3Q00
37
Financial Performance
38Balance Sheets - Consolidated
Corporation Law Assets Liabilities
R$ Million
(*) Not included Advances on Exchange Contracts (AEC).
Deposits
Money Market Repurchase Comm.
Acceptances and Debentures
Interbank Accounts
Borrowing and On-lending Borrowings
Other Liabilities
Minority Interest
Stockholders’ Equity
Credit Operations (*)
Prov. Loan Losses
Other Assets
Permanent
Total Assets Total Liabilities
Cash and Cash Eq.
Money Market
Interbank Funds Applied
Securities
Interbank Deposits
Jun 00 Jun 00
21,888
4,672
2,916
3,152
5,191
9,912
445
6,353
16,833
(1,443)
8,183
2,991
54,529 54,529
1,557
3,867
2,740
14,188
5,613
Sep 00
22,106
6,919
2,711
2,426
5,385
10,567
441
6,678
57,233
Sep 00
1,414
2,932
2,541
16,224
6,636
17,826
(1,516)
8,189
2,987
57,233
39Balance Sheets - Consolidated
Corporation Law Assets Liabilities
R$ Million
(*) Not included Advances on Exchange Contracts (AEC).
Deposits
Money Market Repurchase Comm.
Acceptances and Debentures
Interbank Accounts
Borrowing and On-lending Borrowings
Other Liabilities
Minority Interest
Stockholders’ Equity
Credit Operations (*)
Prov. Loan Losses
Other Assets
Permanent
Total Assets Total Liabilities
Cash and Cash Eq.
Money Market
Interbank Funds Applied
Securities
Interbank Deposits
Jun 00 Jun 00
21,888
4,672
2,916
3,152
5,191
9,912
445
6,353
16,833
(1,443)
8,183
2,991
54,529 54,529
1,557
3,867
2,740
14,188
5,613
Sep 00
22,106
6,919
2,711
2,426
5,385
10,567
441
6,678
57,233
Sep 00
1,414
2,932
2,541
16,224
6,636
17,826
(1,516)
8,189
2,987
57,233
Excess ProvisionExcess Provision
Loan LossesLoan LossesR$ 616 MillionR$ 616 Million
SecuritiesSecuritiesR$ 746 MillionR$ 746 Million
Excess ProvisionExcess Provision
Loan LossesLoan LossesR$ 616 MillionR$ 616 Million
SecuritiesSecuritiesR$ 746 MillionR$ 746 Million
40Market Capitalization, Stockholders’ Equity and Consolidated Net Income (1)
18,006
5,563 5,801 5,907 6,125 6,353 6,678
9,91411,109
17,83416,566 17,395
462435365
415360
333
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
2Q99 3Q99 4Q99 1Q00 2Q00 3Q00
0
100
200
300
400
500
600
700
800Consolidated Stockholders' Equity
Market Capitalization
Consolidated Net Income
R$ Million
(1) Net Income of Quarter; Stockholders’ Equity and Market Capitalization as of period ended.
41
143
-309
535
165 179 191
403
202275
590
226
333437
522365
435 498
-107-218
-77 -36-68-15
62
Evolution of Consolidated Net IncomeQuarterly Review
R$ Million
Quartersof 1997
Quartersof 1999
Quartersof 1998
1st 2nd 3rd 4th 1st 2nd 3rd 4th 1st 2nd 3rd 4th 1st
Quarters of 2000
2nd 3rd
185
187207 205
281
761
360415 462
RecurringExtraordinary
42Net Interest Margin
11%8% 10% 11%
21%25%
20%17%
3Q97 3Q98 3Q99 3Q00
Financial Margin Interbank Rate CDI
Annual Average Rates
43
19,151
16,890
12,325
8,022
3,958 5,531
11,572
6,328
22,215
19,596
14,127
9,057
4,6345,846
11,798
6,366
82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00*
R$ Million
Credit Operations
Credit Operations and Guarantees
Credit Operations *
Market ShareSeptember 30, 2000Itaú 9.1%Banerj 0.2%Bemge 0.1%Banestado 1.1%Total 10.5%
Market ShareSeptember 30, 2000Itaú 9.1%Banerj 0.2%Bemge 0.1%Banestado 1.1%Total 10.5%
LoansLeasingO.ReceivablesAECSub-totalGuaranteesTotal
17,076751179
1,14619,1513,064
22,215
16,187647166
1,23418,2333,339
21,572
5.516.17.8
-7.15.0
-8.23.0
Sep.00 Jun.00 Var%
(*) September, 30 of 2000
44
11,729 11,680 12,409 12,486
2,147 2,4412,541 3,016
3,414 3,8483,096
3,0142,930 2,889
2,842 2,659
10,62610,025
1,4631,2871,214973
845854
1,7591,442
1,619
1,1311,193
1,423
0
2,500
5,000
7,500
10,000
12,500
15,000
17,500
20,000
22,500
Jun-99 Sep-99 Dec-99 Mar-00 Jun-00 Sep-00
Credit CardReal EstateIndividualsSmall and Medium-Sized CompaniesCorporate
R$ Million
Credit Operations by Segment
17,24318,128
19,596 22,24121,572 22,215
45Provision for Loan Losses
R$ Million
Provision for Loan Losses
Risk
AAABCDEFGH
Sub-Total
Balance
5,4837,1003,3071,598
547284327
85420
19,151
0 0
37
12264857
348
Especific
500
Generic 0
3531414359
1162
72
399
Minimum Provision Required
Guarantees 3,064
Total 22,215
% Provision
0.0%0.5%1.0%3.0%
10.0%30.0%
50.0% 70.0%
100.0%
September 30, 2000
46Provision for Loan Losses
Provision for Loan Losses
Risk
AAABCDEFGH
Sub-Total
Balance
5,4837,1003,3071,598
547284327
85420
19,151
0 0
37
12264857
348
Especific
500
Generic 0
3531414359
1162
72
399
Minimum Provision Required
Guarantees 3,064
Total 22,215
% Provision
0.0%0.5%1.0%3.0%
10.0%30.0%
50.0% 70.0%
100.0%83.0% of Total Portfolio Until Risk B
(1%)
R$ MillionSeptember 30, 2000
47Provision for Loan Losses
Provision for Loan Losses
Risk
AAABCDEFGH
Sub-Total
Balance
5,4837,1003,3071,598
547284327
85420
19,151
0 0
37
12264857
348
Especific
500
Generic 0
3531414359
1162
72
399
Minimum Provision Required
Guarantees 3,064
Total 22,215
% Provision
0.0%0.5%1.0%3.0%
10.0%30.0%
50.0% 70.0%
100.0%83.0% of Total Portfolio Until Risk B
(1%)Existing Provision
R$ 899 Million
R$ MillionSeptember 30, 2000
48Provision for Loan Losses
Provision for Loan Losses
Risk
AAABCDEFGH
Sub-Total
Balance
5,4837,1003,3071,598
547284327
85420
19,151
0 0
37
12264857
348
Especific
500
Generic 0
3531414359
1162
72
399
Minimum Provision Required
September 30, 2000
Guarantees 3,064
Total 22,215
% Provision
0.0%0.5%1.0%3.0%
10.0%30.0%
50.0% 70.0%
100.0%
Existing ProvisionR$ 899 Million
Excess ProvisionR$ 616 Million
R$ Million
49Ratio of Default (%)
5.74.9
3.1*
2.5
2.6
2.0
2.3
2.3
3.0
6.8
8.2
3.2
3.0
3.73.8
4.54.55.3
4.9 4.2
15.2
9.0
3.2
0
2
4
6
8
10
12
14
16
M J S D M J S D M J S D M J S D M J S D M J S
1995 1996 1997 1998 1999 2000
Ratio of Default = 11 to 30 days overdue / credits that are 11 to 30 days. Since Dec. 99, this index is not calculated anymore.
Not taken into account portion of credits receivable that is issued in Provision for Loan Losses
(*) The risk control allows for the maintenance of ratios of default. In the third quarter, when compared to the previous period, the increase in the ratio can be justified by the reduced increase in total past due collections between 11 to 30 days (R$ 12 million) on the total forecasted coming due collections in the same period (R$ 2,401 million).
50
Total
Itaú Consolidated
835
3Q 2000
-4.1
Var %
1.9
3.8
-3.4
-89.2
8.1
4.2
1.4
-9.2
212
54
140
4
40
50
217
118
871
2Q 2000
208
52
145
37
37
48
214
130
R$ Million
Mutual Funds Management Fees
Collection Fees
Current and Savings Accounts Service Fees
Collection Fees Agreement with Public Co.
Interbank Tariff
Credit Operations
Credit Cards
Other Services
Banking Service Fees
51
Shares Evolution
52
0
1.000
2.000
3.000
4.000
5.000
6.000
7.000
8.000
Sep-90 Dec-91 Dec-92 Dec-93 Dec-94 Dec-95 Dec-96 Dec-97 Dec-98 Dec-99 Sep-00* Without Reinvestment
Annual AppreciationAnnual Appreciation• 10 years (Average)10 years (Average) 52.96 % 52.96 %• 5 years (Average)5 years (Average) 28.09 % 28.09 %• 12 months (Average)12 months (Average) 77.11 % 77.11 %• 2000 3.71 %2000 3.71 %
Annual AppreciationAnnual Appreciation• 10 years (Average)10 years (Average) 52.96 % 52.96 %• 5 years (Average)5 years (Average) 28.09 % 28.09 %• 12 months (Average)12 months (Average) 77.11 % 77.11 %• 2000 3.71 %2000 3.71 %
ItaúItaú BovespaBovespa
Preferred Shares - Appreciation *Evolution of US$ 100 Invested in September of 1990
7,035
1,145100
Collor Plan
Real Plan
Mexican Crisis
Asian Crisis
Russian Crisis
Real Devaluation
US$