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0 Consumer Credit Vehicle Finance August 25 th 2003 Ruy M. Abreu Executive Director Banco Itaú

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Presentation on theme: "0 Consumer Credit Vehicle Finance August 25 th 2003 Ruy M. Abreu Executive Director Banco Itaú"— Presentation transcript:

1 0 Consumer Credit Vehicle Finance August 25 th 2003 Ruy M. Abreu Executive Director Banco Itaú

2 1 Vehicle Finance Market Banco Itaú and the Logic behind the Acquisitions of Fináustria and Fiat Acquisitions Synergies Fiat Consortium Vehicle Financing Operation

3 2 Vehicles MotorcyclesHeavy Vehicles Cars and Light Commercial Vehicles NewUsed NewUsed NewUsed Itaús Business Focus Dispersed risk Better Spreads Lower losses Distribution (Capillary Effect) Efficient Processes (Technology) Scale (Itaús retail volume) Retail Credit (Itaús Customer Base) Success Factors Itaús Skills Vehicle Finance Market

4 3 Forecast Itaú Source: Anfavea Annual Sales of New Vehicles – Brazil (Number of vehicles / thousands)

5 4 % of Financed Sales of New Vehicles Source: Banco Fiat

6 5 Source : Banco Itaú forecast based on Bacen and Abel data Consumer Credit and Leasing Portfolio (New and Used Vehicles) – R$ Billions 44% 19% (6%) CAGR = 12.7%

7 6 Source : Banco Itaú forecast based on Bacen and Abel data New Consumer Credit and Leasing Business (New and Used Vehicles) – R$ Millions

8 7 (*) Includes Dealers Commission and Taxes (Pis, Cofins, ISS, among others) Source: Bacen Gross Spread(*) (p.y.) Vehicle Finance Market

9 8 Source: Bacen Delinquency rates over 90 days (%) Vehicle Finance Market

10 9 Vehicle Finance Market Banco Itaú and the Logic behind the Acquisitions of Fináustria and Fiat Acquisitions Synergies Fiat Consortium Vehicle Finance Operation

11 10 Source : Banco Itaú forecasts based on Bacen, Abel, Itaú, Fiat and Fináustria data In % (1) Acquisition of Fináustria CFI (2) Acquisição of Banco Fiat Itaús Market Share Consumer Credit and Vehicle Leasing Market

12 11 Bahia Minas Gerais Goiás Rio de Janeiro Espírito Santo Paraná Santa Catarina São Paulo Brasília Rio Grande do Sul Mato Grosso do Sul Mato Grosso Regions of Complementary Business Activity: Itaú

13 12 Ceará Rio Grande do Norte Paraíba Pernambuco Bahia Minas Gerais Goiás Rio de Janeiro Espírito Santo Paraná Santa Catarina São Paulo Brasília Rio Grande do Sul Mato Grosso do Sul Maranhão Mato Grosso Piauí Sergipe Alagoas Regiões de Atuação Complementares Itaú + Fináustria

14 13 Ceará Rio Grande do Norte Paraíba Pernambuco Bahia Minas Gerais Goiás Rio de Janeiro Espírito Santo Paraná Santa Catarina São Paulo Brasília Rio Grande do Sul Mato Grosso do Sul Maranhão Mato Grosso Piauí Sergipe Amazonas Roraima Pará Amapá Rondônia Alagoas Acre Tocantins Regions of Complementary Business Activity: Itaú + Fináustria + Fiat

15 14 Source: Banco Itaú, Fiat and Fináustria Distribution of Financing by Vehicle Age 88% 7% 5% 53% 20% 27% 37% 21% 42% 0km to 3 years4 to 6 years> 6 years FiatItaúFináustria Also complementary in different types of market

16 15 Source: Banco Itaú, Fiat and Fináustria Distribution of Financing by Rate 95% 5% 56% 44% 26% 74% 2.0 to 3.0 %> 3.0 % FiatItaúFináustria

17 16 Number Points of Sale Fináustria Itaú Relative Market Share 3, , ,000 2,000 3,000 4,000 Overlapping in only 10% of total points of sale,which corresponds to 16% of total production Source : Banco Itaú and Fináustria Overlapping Active Points of Sale Itaú x Fináustria Banco Fiat: active overlapping points of sale irrelevant

18 17 Vehicle Finance Market Banco Itaú and the Logic behind the Acquisitions of Fináustria and Fiat Acquisitions Synergies Fiat Consortium Vehicle Financing Operation

19 18 Itaú Vehicle Finance Central Office: Dedicated credit, collection, back office and f ront office structure. Platforms Plataforms..... Operators Dealers Vehicle Finance – Banco Itaú

20 19 Source : Banco Itaú, Fiat and Fináustria Customer Vehicle Financing Portfolio ITAÚ Fináustria Banco Fiat TOTAL 325 thousand 225 thousand 350 thousand 895 thousand

21 20 Proposals Examined (*) ITAÚ Fináustria Banco Fiat TOTAL 16 thousand 17 thousand 13 thousand 46 thousand (*) Monthly Average – 2 nd Half 2002 Source : Banco Itaú, Fiat andFináustria

22 21 (*) Monthly Average – 2 nd Half 2002 Source : Banco Itaú, Fiat and Fináustria Number of Monthly Financing Operations (*) ITAÚ Fináustria Banco Fiat TOTAL 7,500 5,700 7,400 20,600

23 22 Call Center – Number of Calls (*) ITAÚ Fináustria Banco Fiat TOTAL 83 thousand 133 thousand 225 thousand 448 thousand (*) Monthly Average – 2 nd Half of 2002 Source : Banco Itaú, Fiat and Fináustria

24 23 Credit score There are 5 regionalized models for new and used vehicles The system compares the proposal with the credit policy and indicates eventual discrepancies. The credit analyst analyzes the veracity of the information via external sources – risk center, SPC, among others. Dealer score 70% of the proposals are sent via internet Credit Systems – Received via Internet 20% are immediately answered

25 24 The system calculates the score based on data input Credit Systems – Received via Fax Scaned Document

26 25 The reply to the credit proposal is sent by the system to the dealer, operator and commercial manager via web or fax. 20% of the proposals receive a reply in real time. Credit Systems – Control Panel

27 26 Credit – Response Time Breakdown Automatic Up to 15 From 15 to 30 > 30 20% 30% 35% 15% Source : Banco Itaú Reply Time (In Minutes) % Production

28 27 80% of the guarantees are constituted at the time of payment of the operation via the National Lien System Credit Systems - Payment of the Operation Analysis of the Guarantee – On line consultation of RENAVAM (Brazilian vehicle registration database) which is integral to the process of payment of the operations

29 28 Back office system for this operation was established based on the factory concept using the technology employed in the processing of bulk volumes for the Itaú Branch Network Back Office – Digitalization of Documents

30 29 Vehicle Finance Market Banco Itaú and the Logic behind the Acquisitions of Fináustria and Fiat Acquisitions Synergies Fiat Consortium Vehicle Financing Operation

31 30 Source : Bacen Ranking of Vehicle Finance Companies Vehicle Consortium – May 2003 Finance Company Ranking by Participants Quantity of Participants Market Share VW1109,35712% Fiat + Itaú295,80311% Fiat 289,257 10% GM367,8328% Disal447,4415% Unibanco Rodobens531,6464% CNF623,7243% Novaterra721,5892% Servopa821,0782% Rodobens Administradora e Promoções Ltda916,3812% União1013,8882%

32 31 Source : Banco Itaú forecast based on Bacen data Consortium Market Active Quotas Portfolio (Thousands)

33 32 Source : Banco Itaú forecast based on Bacen data Consortium Market Quota sales – Monthly Average/Year (Thousands)

34 33 (*) Banco Itaú forecast Source : Anef Share of Consortium Market Sale of New Vehicles

35 34 Vehicle Finance Market Banco Itaú and the Logic behind the Acquisitions of Fináustria and Fiat AcquisitionsSynergies Fiat Consortium Vehicle Finance Operation

36 35 (*)variation in funding rate (p.m.) half year average for Fiat/Fináustria Source: Banco Itaú Itaú Funding Itaú = base hundreds per period

37 36 R$ 100 million 8.5%29%37%... 18%... 29%... 17%(2%)... 51%6.7% 1.3% 2% CommercialCredit Operational Systems Cost reduction Fináustria Commercial CreditOperationalSystems Cost reduction FIAT Cost reduction TOTAL Fináustria Fiat Source : Banco Itaú Estimated Cost Reduction for 2004 After I.T. and Social Contribution

38 37 Source : Banco Itaú Estimated Growth in Annual Total Revenues Itaú = base hundreds (*) Total Revenues: Financial Margin + Banking Service Fees + Insurance Revenues, Pension Plan and Capitalization + Equity Income from Afilliates

39 38 Consumer Credit Vehicle Finance August 25 th 2003 Ruy M. Abreu Executive Director Banco Itaú


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