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Statements of Income - 1999
R$ Million
1st
2nd
3rd
4th
Year
Net Interest Margin
1,213
1,202
1,094
1,120
4,629
Provision for
Loan Losses
(299)
(235)
(146)
(134)
(814)
697
740
744
978
3,159
(1,050)
(1,172)
(1,161)
(1,228)
(4,611)
(335)
(202)
(94)
(214)
(845)
535
761
333
(77)
360
(107)
415
351
1,869
Banking Service
Fees
Administrative
Expenses
Others
Extraordinary
Result
Net Income
Extraordinary Result - 1999
Total for 1999: R$ 351 million
R$ 154
million
R$ 535
million
Full
amortization
of premiums
on the
purchase of
shares of
BPI and IBT.
Investment in
acquisitions since
95: US$ 2 billion
Full amortization
of premiums (Itaú
Consolidated):
US$ 811 million
Due to permanent assets
abroad (US$ 1,483 million).
Consistent Evolution
R$ Million
Stockholders' Equity
Net Income
4,651
4,198
3,842
5,907
1,869
592
1996
721
1997
880
1998
1999
Risk Management Policy
Credit
Market
Compliance
•Risk Quality : 65% Good,
Very Good and Excellent
•Evolution in the
Techniques for the
control of market risks
(interest rates, foreign
currency, shares)
•Implementation of a
new and detailed
systematic of internal
controls and
compliance
•Default Ratio : Lowest in
5 Years
•For the 10th consecutive
year : 100% provisioning
of the credits fallen due
and unpaid over 60 days.
Significant Results
Low Level of Risk
To Limit and Reduce the
Operational Risks in
the Whole Structure
Quality of credit concession + Stable Scenario
Expansion of the Credit Portfolio with Liquidity
Credit Operations
+25%
Credit Operations
R$ Billion
9
94
12
14
95
96
17
16
0.2
0.1
5.7% 4.5%
3.2% 2.0%
3.2%
97
1.0 1.1 1.1
0.6
0.4
15.2%
20
98
99
Provisions Outstanding(*) R$ Billion
0.3
Ratio Default (%)
0.6
0.5
1.3
1.3
0.3
0.3
94
95
96
97
Provisions Expenses
R$ Billion
1.2 1.0
1.0
99
-20%
1.0
0.7
0.6
0.5
98
0.8
1.0
94
95
96
97
98
99
(*) Overdue Credits and General Provision
0.2
94
95
96
97
98
99
Individuals
6.5 million active customers
3.7 million with pre-approved credit, and 65.5% of these
indeed using it.
The pulverization of credit, combined with the approval
models, has insured a good liquidity to the portfolios.
•Outstanding Personal / Overdraft
/ Vehicles Loans: R$ 2.5 billion
Credit Cards
110.2% increase over 1998;
•70% of the transactions
performed by our customers are
through self-service.
Million
2.2
Insurance Contracts
1.1
Private Pension Plans
0.3
Small and Middle Market Business
Itaú has retaken with priority the growth
of the credit offer for this segment:
Growth of 48% in the 2nd
semester of 1999
Outstanding working
capital loan portfolio:
R$ 1.1 billion in Dec.99
200 thousand client companies
In 2000 the continued growth of the portfolio is
expected, although probably at a lower pace.
Corporate
Incorporation of the operational
structures of BFB and IBT
Reinforcement in products and team management area
Agility of the the new business board
Structuring of
Solutions
Business and Operations
Expansion
Record Result
Foreign currency
Project finance
Investment banking
Positive Perspectives due to:
•Privatization
•Economic Growth
Internet (Home Banking)
Huge Opportunity: Increase of Clients, Offer other Services and Reduce Costs
1 million of clients in 99
(+34% over 98)
P F S
e
r
s
o
n
a
l
i
n
a
n
c
i
a
l
e
r
v
i
c
e
s
Strong
Development to
offer all the
services:
Home Broker,
Credit Cards,
Bankline for
Middle Market,
etc.
10.9 million transactions in
Dec. 99 (+39% over 98)
Evaluation of
partnerships to offer
other financial services:
B2B, B2C, Portals,
E-Commerce, etc.
Adoption of Web interface
between branches and
back office.
The Consolidation of the Brazilian Financial
Sector Hasn’t Finished Yet
1. The consolidation should become faster.
2. Besides Banespa and Banestado, 10 more banks should be
privatized.
3. Banco do Brasil and Caixa Econômica Federal, together, represent
35% of assets, 45% of deposits and 50% of Loans of the whole
Financial System.
4. After Banco do Brasil and Caixa Econômica Federal, approximately
90% of the whole banking sector should be concentrated with a few
institutions.
5. There will be many opportunities to acquire state and small banks.
Preferred Shares - Appreciation
Evolution of US$ 100 Invested in December of 1994
500
Annual Appreciation
Create Value to the
. 10 years (average) 40.83%
. 5 years (average) 31.18%
. 1999
88.66%
400
US$ 9,969 million
The Largest Market
Capitalization among the
Latin American Banks
ITAU4 : US$ 86.6
per thousand shares
200
472 - Itaú
Shareholders
Stock Price 12.31.1999
. P/E
9.43
. P/BV
315.04%
. Cash Yield
1.94%
300
US$
186-Bovespa
100
Mexican Crisis
Asian Crisis
Russian Crisis
Real Devaluation
0
94
95
96
97
98
99
Highlights 1999
Amounts in R$ Million
Consolidated Balance Sheet
Total Assets
Loan and Leasing Portfolio + ACC
Sureties, Endorsements and
Guarantees
Securities + Interbank Accounts
Stockholders’ Equity
51,911
16,890
2,706
18,070
5,907
Performance Ratios (%)
BIS Ratio
25.7%
5.9%
31.6%
3.6%
21.0%
Eficiency Ratio
58.0%
ROE Recurring
ROE Extraordinary
ROE
ROA
Statements of Income
Financial Margin
1,518
351
1,869
4,629
Net Income from Financial
Operations
3,814
Banking Service Fees
3,159
Net Income Recurring
Net Income Extraordinary
Net Income
Relevant Data
Assets under Management
Employees
Active Customers (million)
Branches
CSBs
ATMs
31,994
39,011
6.9
1,765
780
11,715