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Banco Itaú Holding Financeira S.A. New York March 2005 Presentation to: 13 th Annual Latin America Conference Banco Itaú Holding Financeira S.A. Alfredo.

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Presentation on theme: "Banco Itaú Holding Financeira S.A. New York March 2005 Presentation to: 13 th Annual Latin America Conference Banco Itaú Holding Financeira S.A. Alfredo."— Presentation transcript:

1 Banco Itaú Holding Financeira S.A. New York March 2005 Presentation to: 13 th Annual Latin America Conference Banco Itaú Holding Financeira S.A. Alfredo Setubal Investor Relations Director

2 Smith Barney-Citigroup 13 th Annual Latin America Conference Banco Itaú Holding Financeira S.A. 2 Agenda  Results - Banco Itaú Holding Financeira  Pro Forma Results - Banco Itaú and Banco Itaú BBA  Important Facts - Banco Itaú Holding Financeira

3 Banco Itaú Holding Financeira S.A. Smith Barney-Citigroup 13 th Annual Latin America Conference 3 Highlights Growth of Credit Portfolio by Client Type (highlights): 4 th Quarter/04 -Individuals 19.7% and Small and Medium Sized Companies 15.7%. 2004 -Individuals 43.1% and Small and Medium Sized Companies 70.8% Net Interest Margin * 4 th Quarter/04 = 13.6% p.a. 3 rd Quarter/04= 12.4% p.a. 2004 = 13.2% p.a. 2003 = 13.9% p.a. Results: 4 th Quarter/04 – Net Income of R$ 1,030 million with ROE 32.9% p.a.; 2004 - Net Income of R$ 3,776 million with ROE 27.0% p.a.; * Excluding the nonrecurring items of 4 th Quarter of 2004 Growth of Credit Portfolio (including endorsements and sureties): Total: 4 th Quarter/04 = 4.3% Excluding Corporate Clients: 4 th Quarter/04 = 14.8% 2004 = 19.5% 2004 = 43.8%

4 Banco Itaú Holding Financeira S.A. Smith Barney-Citigroup 13 th Annual Latin America Conference 4 Technical Provisions of Pension Plans: Balance at Dec/04 of R$ 8.6 billion – Growth of 56.4% in 2004. Full Amortization of Goodwill: ( R$ Million ) Without Tax Effects With Tax Effects CBD (3 rd Q./04) 381347 Credicard (4 th Q./04) 721656 Orbitall (4 th Q./04) 233212 Intercap - Sales promoter (4 th Q./04) 65 59 TOTAL 1,400 1,274 Solvency - Nonperforming Loans Ratio: 4 th Quarter/04= 2.9% 3 rd Quarter/04= 3.2% 2004 = 2.9% 2003 = 4.1% Highlights

5 Smith Barney-Citigroup 13 th Annual Latin America Conference Banco Itaú Holding Financeira S.A. 5 R$ Million (Except where indicated) Net Income Stockholders’ Equity ROE (%) Total Assets BIS Ratio (%) Efficiency Ratio (%) 3 rd Q/04 4 th Q/04 2004 2003 1,030 920 3,776 3,152 13,971 13,471 13,971 11,879 32.9% 30.3% 27.0% 26.5% 130,339 138,520 130,339 118,738 20.6% 19.4% 20.6% 19.8% 45.9% 52.5% 52.4% 54.5% Highlights

6 Smith Barney-Citigroup 13 th Annual Latin America Conference Banco Itaú Holding Financeira S.A. 6 Financial Ratios (%)

7 Smith Barney-Citigroup 13 th Annual Latin America Conference Banco Itaú Holding Financeira S.A. 7 Efficiency Ratio (%) 54.5% 52.4% Annual Efficiency Ratio.

8 Smith Barney-Citigroup 13 th Annual Latin America Conference Banco Itaú Holding Financeira S.A. 8 Exposure – Loans and Securities Loans Public Securities Private Securities Total Sep 30, 04 Dec 31, 04 Var Dec04/ Sep04 Dec 31, 03 R$ Million Var Dec04 / Dec03 (*) Rural Loans and Mortgage – Loans linked to the availability of Demand deposits and Savings deposits. 53,275 51,059 44,581 4.3% 19.5% 7,486 9,369 14,306 -20.1% -47.7% 12,145 11,216 8,564 8.3% 41.8% 72,906 71,644 67,451 1.8% 8.1%

9 Smith Barney-Citigroup 13 th Annual Latin America Conference Banco Itaú Holding Financeira S.A. 9 Credit Operations R$ Million CAGR: 21.1% CAGR: 22.5%

10 Smith Barney-Citigroup 13 th Annual Latin America Conference Banco Itaú Holding Financeira S.A. 10 Change in the mix of the Credit Portfolio

11 Smith Barney-Citigroup 13 th Annual Latin America Conference Banco Itaú Holding Financeira S.A. 11 (*) Provision for Loan Losses / Total Nonperforming Loans Nonperforming Loans Ratio and Coverage Ratio We are not expecting an ongoing improvement in these indicators, because of the focus on credit products with higher margins, but, at the same time, with a higher credit risk.

12 Smith Barney-Citigroup 13 th Annual Latin America Conference Banco Itaú Holding Financeira S.A. 12 R$ Million Service Fees 4 th Q/043 rd Q/04 Asset Management (*) Current Account Services Credit Cards Sureties and Credits Granted Collection Services Other Total 2004 (*) Mutual Funds and Consortium. 2003 Var 4Q04 -3Q04 Variation 04-03 376 327 371 266 302 158 1,799 358 303 282 234 180 151 1,508 17 24 89 32 122 7 291 1,411 1,230 1,162 916 866 580 6,165 1,320 1,002 965 653 699 482 5,121 91 228 197 263 167 98 1,044

13 Smith Barney-Citigroup 13 th Annual Latin America Conference Banco Itaú Holding Financeira S.A. 13 Total Unrealized Interbank Deposits Securities and Derivatives Additional provision Adjustment – Securities Held to Maturity Credit Operations Investment on BPI Time and Interbank Deposits and Funds from acceptance and issuance of securities abroad Securitization of Payment Orders Abroad Subordinated Debt and Treasury Shares Unrealized Income/(Loss) (1) (2) Stockholders’ Equity 12/31/04 09/30/04 (1) Tax effects not considered. (2) Includes unrealized minority interest gains in Equity of R$ 271 million at December/04, R$ 284 million at September/04 and R$ 257 million at December/03. Financial Instruments – Market Value R$ Million 12/31/03 Stockholders’ Equity Stockholders’ Equity 10 782 600 182 309 691 39 133 354 10 688 545 143 319 627 33 74 297 2,3192,048 14 620 400 220 248 660 (41) 93 480 2,074

14 Smith Barney-Citigroup 13 th Annual Latin America Conference Banco Itaú Holding Financeira S.A. 14 Internet Banking CAGR: 32.4% CAGR: 43.4%

15 Smith Barney-Citigroup 13 th Annual Latin America Conference Banco Itaú Holding Financeira S.A. 15 Agenda  Results - Banco Itaú Holding Financeira  Pro Forma Results - Banco Itaú and Banco Itaú BBA  Important Facts - Banco Itaú Holding Financeira

16 Smith Barney-Citigroup 13 th Annual Latin America Conference Banco Itaú Holding Financeira S.A. 16 Diversification of the income sources Not dependent only from interest rates Banco Itaú S.A. 829 (555) 3,502 2004 3,776 Banco Itaú BBA S.A. Corporation Total Net Income R$ Million 22.0% (14.7%) 92.7% % 100% 750 (335) 2,737 2003 3,152 23.8% (10.6%) 86.8% % 100%

17 Smith Barney-Citigroup 13 th Annual Latin America Conference Banco Itaú Holding Financeira S.A. 17 Banco Itaú Net Income Tier I Allocated Capital ROE (%) Credit Portfolio (*) Total Assets 20042003 (*) Including endorsements and sureties. R$ Million Pro Forma Corpo- ration Corpo- ration Note: The Consolidated figures do not represent the sum of the parts because certain intercompany transactions were eliminated only at the Consolidated level. Conso- lidated Conso- lidated Banco Itaú BBA Banco Itaú Banco Itaú BBA 2,737 7,550 36.2% 20,739 94,641 3,502 7,843 44.7% 29,736 109,983 829 3,194 25.9% 17,671 34,488 (555) 2,934 -18.9% - 6,597 3,776 13.971 27.0% 47,407 130,339 750 3,213 23.4% 17,919 30,490 (335) 1,117 -30.0% - 5,438 3,152 11,879 26.5% 38,659 118,738

18 Banco Itaú S.A. Smith Barney-Citigroup 13 th Annual Latin America Conference 18 Diversification of income sources Not dependent only on interest rates Consolidated Net Income 4 th Q/043 rd Q/04 Variation 4Q/04 – 3Q/04 Banco Itaú - Banking1,123573550 Credit Cards17512253 Ins., Pension Pl. and Cap.101113(12) Funds and Managed Port.38308 Total1,437837600 20042003 Variation 2004 - 2003 Banco Itaú - Banking2,3841,604780 Credit Cards5435403 Ins., Pension Pl. and Cap.451465(14) Funds and Managed Port.125128(3) Total3,5022,737765

19 Banco Itaú S.A. Smith Barney-Citigroup 13 th Annual Latin America Conference 19 Credit Cards R$ Million (Except where indicated) Participation in the Net Income of Orbitall and Redecard Nº of Cards - Itaucard (thousands) Nº of Cards - Credicard (thousands) (*) Nº of Cards - Total (thousands) 20042003 Variation 7,085 3,595 10,680 12,956 6,519 19,475 390 90 480 5,780 2,246 8,026 10,603 4,787 15,390 400 99 499 1,305 1,349 2,654 2,353 1,732 4,085 (10) (9) (19) 22.6% 60.0% 33.1% 22.2% 36.2% 26.5% -2.5% -9.1% -3.8% (*) Corresponds to the share of Credicard owed by Itaú – 50% at 2004 and 33% at 2003. 63412253.7% Turnover - Itaucard Turnover - Credicard (*) Turnover - Total Net Income - Itaucard Net Income - Credicard (*) Net Income - Total

20 Banco Itaú S.A. Smith Barney-Citigroup 13 th Annual Latin America Conference 20 5.4 6.1 7.7 8.3 9.3 Technical Provisions – Pension Plans: growth of 43% from Dec. 03 to Dec. 04 R$ Billion 10.0 11.0 Insurance, Pension Plans and Capitalization

21 Banco Itaú S.A. Smith Barney-Citigroup 13 th Annual Latin America Conference 21 Var 4ºT04 -3ºT04 3º Tri/04 4º Tri/04 Result of Ins., Pension Plans and Cap. Combined Ratio Claim Ratio Insurance Premiums, Pension Plans Contributions and Premium Bonds Revenues Changes in Technical Provisions Selling Expenses Insurance Claims, Pension Plans Benefits and Premium Bonds Redemption Other Operating Income/(Expenses) Operating Margin Financial Income Administrative and Tax Expenses* Income Tax and Social Contribution Other R$ Million Insurance, Pension Plans and Capitalization 1,475 (636) (100) (591) 54 1,686 (843) (103) (579) 41 115 (169) (23) (24) 115 (146) (39) (20) 113 201202 101 92.3%93.5% 51%55% 14% 33% 3% -2% -24% 0% 16% -41% 21% -10% *Except for ISS, PIS and COFINS 20042003 Var.2004 - 2003 5,008 (2,578) (358) (1,508) 136 6,233 (2,957) (395) (2,251) 177 485 (616) (141) (84) 623 (623) (166) (70) 465 807701 451 94.1%97.2% 53%54% 24% 15% 11% 49% 30% 15% -22% -1% -15% 19% -3%

22 Banco Itaú S.A. Smith Barney-Citigroup 13 th Annual Latin America Conference 22 Resources Managed Growth of 23.0% in the volume of Funds and Portfolios under Management and 43.4% in the volume of Technical Provisions in relation to Dec/2003 R$ Billion Technical Provisions of Insurance, Pension Plans and Capitalization Volume of Mutual Funds and Portfolios under Management

23 Banco Itaú BBA Smith Barney-Citigroup 13 th Annual Latin America Conference 23 4 th Q/04 3 rd Q/04 Net Interest Margin Result from Loan Losses Service Fees Administrative and Tax Expenses* Tax Income and Social Contribution Other Net Income Tier I Allocated Capital ROE (%) 2003 R$ Million Pro Forma 2004 Variation 04-03 391 27 83 (133) (147) (25) 196 3,245 26.4% 464 31 84 (159) (151) (27) 242 3,194 33.9% 1,403 213 306 (622) (416) (55) 829 3,194 25.9% 1,989 (513) 270 (613) (410) 27 750 3,213 23.4% (586) 726 36 (9) (6) (82) 79 (19) *Except for ISS, PIS and COFINS

24 Banco Itaú BBA Smith Barney-Citigroup 13 th Annual Latin America Conference 24 Strategy  Itaú BBA: wholesale bank integrated into a financial conglomerate;  Credit perspective for the corporate segment in Brazil: declining spreads, increase in the competition, limited client base. Currently 51% of all our revenues are non-credit related;  Challenge: to maintain current profitability levels in the next years considering lower margins in credit;  Our strategy: compensate lower gains in credit with an increase in the distribution of non-credit related products and services to our clients through:  Cross-selling – continue to take advantage of the synergy with Itaú, by increasing the selling of structured treasury operations such as hedging and also simpler products such as payroll and collection;  Investment banking – segment likely to expand in the next 5 years (we expect that by the end of this period Brazil becomes an investment grade country).  Itaú BBA is well-positioned in investment banking – leader in fixed income issuances and reinforcing our variable income team in order to build a strong investment banking. Investment banking currently stands for 5% of Itaú BBA´s revenues. In the next 5 to 6 years our goal is to increase this participation to 20%.

25 Smith Barney-Citigroup 13 th Annual Latin America Conference Banco Itaú Holding Financeira S.A. 25 Agenda  Results - Banco Itaú Holding Financeira  Pro Forma Results - Banco Itaú and Banco Itaú BBA  Important Facts - Banco Itaú Holding Financeira

26 Banco Itaú Holding Financeira S.A. Smith Barney-Citigroup 13 th Annual Latin America Conference 26 Banco Itaú Holding in 2005 1.Focus in increasing the credit portfolio to Individuals and to Small and Medium Sized Companies; 2.Consolidation of initiatives related to consumer loans: (Taií, CBD, Lojas Americanas, Credicard…); 3.Costs constant in real terms, which will lead to an improvement in the efficiency ratio (at the same basis); 4.New Segment – Disclosure, starting in next quarter, of a new segment to reflect the performance of business areas related to consumer loans.

27 Smith Barney-Citigroup 13 th Annual Latin America Conference Banco Itaú Holding Financeira S.A. 27 Taií  New Brand Name (Itaú-based).  Focus on lower income consumers.  Proprietary platform.  Operation launched in June/04 with 3 branches in São Paulo (currently 29).  Uses the Itaú ATM network.  Diversifies credit-related revenues.  Responsive and efficient.  Forecast: 150 stores by YE 2005.

28 Smith Barney-Citigroup 13 th Annual Latin America Conference Banco Itaú Holding Financeira S.A. 28 Retail partnerships 170 stores 250 stores Forecast for 2005: February 28, 2005 October 27, 2004  Expansion of Focus on direct consumer credit  Long term partnership: 20 years, and renewal option  Operating Management under the responsibility of Itaú  Exclusivity in exploitation of financial products and services to retailers’ customers

29 Smith Barney-Citigroup 13 th Annual Latin America Conference Banco Itaú Holding Financeira S.A. 29 8,0268,259 8,674 9,077 10,680 In Thousand Market Share: 20.3% Increase in Participation on Credicard Credit Card Base

30 Smith Barney-Citigroup 13 th Annual Latin America Conference Banco Itaú Holding Financeira S.A. 30 Evolution of Earnings per Share and Dividends per Share (*) CAGR = 28.6% R$ (*) In the previous years per lot of thousand shares, as in 2004 a reverse split of shares was carried out. CAGR = 26.2% Dividends per Share (*)Earnings per Share (*)

31 Banco Itaú Holding Financeira S.A. Smith Barney-Citigroup 13 th Annual Latin America Conference 31 US$ 100 800 192 1,145 Russian Crisis Real Devaluation Mexican Crisis Asian Crisis Argentine Crisis Attack to WTC Itaú (1) Itaú (2) Ibov. 10 years 27.60%23.12% 6.75% 5 years 20.05%15.75%0.65% 2004 64.36%58.79%28.23% Annual Average Appreciation in US$ (1)With dividends reinvestment. (2)Without dividends reinvestment. Election Period Preferred Shares Appreciation – in US$ Evolution of US$ 100 Invested from Dec. 94 to Dec. 04

32 Banco Itaú Holding Financeira S.A. Presentation to: 13 th Annual Latin America Conference Alfredo Setubal Investor Relations Director New York March 2005


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