Conference Call about the Results of the 1 st Quarter of 2004 May 05, 2004 Conference Call about the...

Conference Call about the Results of the 1st Quarter of 2004

May 05, 2004


Banco Itaú Holding Financeira S.A.

2Conference Call about the Results of the 1st Quarter of 2004


1. Sustainable result in the quarter (diversification of income sources), with little influence of non-recurrent items:

– Efficiency Ratio below 50% for the 6th consecutive quarter (strict cost control);

– Consistent growth of banking service fee revenue above IGP-M.

2. Conservative Account Practices:

– Additional Provision for Loan Losses: R$ 1 billion (Mar. 31, 04);

– Market x Recorded Value: R$ 2.9 billion (Mar. 31, 04), mainly Securities (R$ 1.5 billion) and BPI (R$ 700 million);

– Unrecognized tax credits amounted to the limit (R$ 234 million).

3. Growth in credit portfolio: companies (micro, small and medium-sized companies) and retail:

4. Reduction in credit portfolio non-performing loan ratio (4%)

5. Solvency Ratio above minimum required (19.8%- March 31 2004)

6. Largest Market Capitalization among Latin American banks (R$ 31.2 billion)

7. Growth in Monthly Dividends: R$ 0.13 to R$ 0.17 per one thousand shares

Results


R$ Million (Except where indicated)

854

7.49

11,879

32.0%

118,738

2.9%

2,754

30,453

19.8%

49.5%

4.1%

Net Income

Net Income per 1,000 shares (R$)

Stockholders’ Equity

ROE (%)

Total Assets

ROA (%)

Net Interest Margin

Market Capitalization

BIS Ratio (%)

Efficiency Ratio (%)

NPL (%)

1st Q./04

876

7.68

12,478

31.2%

126,979

2.8%

2,426

31,277

19.8%

48.8%

4.0%

714

6.26

9,983

31.8%

113,098

2.5%

2,965

19,998

19.7%

40.8%

4.2%

4th Q./03 1st Q./03


Highlights


14.05816.890

23.674

29.615

38.659 38.871

16.91619.596

27.25338.419

44.75644.581

34.282

45.414

0

5.000

10.000

15.000

20.000

25.000

30.000

35.000

40.000

45.000

50.000

1998 1999 2000 2001 2002 2003 2004 (*)

Credit Operations Credit Operations and Guarantees

R$ Million

(*) March 31, 2004.


Credit Operations

Loan OperationsLease OperationsCredit CardsAECOtherSub-totalGuaranteesTotal

32,4181,2943,1711,622

15338,6895,923

44,581

Dec.0332,6981,5712,9591,509

13438,8715,885

44,756

Mar.04



R$ Million

CorporateSub-Total

Small / Medium Sized CompaniesIndividualsSub-Total

Mortgage Loans

Total

24,44224,442

7,31212,36919,681

2,267

46,390

Var Mar/04

x Dec/03

-2.6%-2.6%

11.7%4.2%6.9%

-3.4%

1.6%

Dec 31, 03

22,35722,357

7,074(**) 12,563

19,637

2,066

(**) 44,061

Mar 31, 03

(*) Endorsements and Sureties included.

Mar 31, 04

21,77121,771

7,90013,08920,989

1,997

44,756

Var Mar/04

x Mar/03

-10.9%-10.9%

8.0%5.8%6.6%

-11.9%

-3.5%

Credit Operations (*)

(**) The values of Dec 31, 03 were adjusted excluding R$ 520 million in loans made on 12/18/2003 to Rio de Janeiro’s public employees, that were totally settled on 01/05/2004.


R$ 31.2 R$ 31.2 R$ 30.2 R$ 32.3 R$ 32.7

R$ 15.2 R$ 13.4 R$ 12.5 R$ 12.2 R$ 12.1

0.05.0

10.015.020.025.030.035.040.045.050.0

Mar-03 Jun-03 Sep-03 Dec-03 Mar-04Local Currency Foreign Currency

R$ 46.4 R$ 44.6R$ 42.7 R$ 44.6

In Billion

(US$ 4.5) (US$ 4.7) (US$ 4.3)(US$ 4.2)

(*) Endorsements and sureties included

(US$ 4.1)

R$ 44.8


Credit Operations by Currency (*)


1,5101,692

1,853 1,9532,196

2,5152,332 2,285 2,234 2,378

630680

680715

715

715

747841 843 848

913906

1,000

2,257

1

3,172 3,128 3,0823,290 3,163 3,103

2,911

3,262

2,6682,568

2,3722,190

2,036

Mar.01 Sep.01 Mar.02 Sep.02 Mar.03 Sep.03 Mar.04

R$ Million

Minimum Provision

Excess Provision

Total Provision

1,406

2,103


Provision for Loan Losses


Nonperforming Loans and Coverage Ratio

Coverage Ratio (*)Coverage Ratio (*)

Nonperforming Loans ratio – TotalNonperforming Loans ratio – Individuals

Nonperforming Loans ratio – Companies

(*) Provision Balance / Total Nonperforming Loans

Nonperforming Loans Ratio (%)Nonperforming Loans Ratio (%)

4.24.7 4.7

4.1 4.0

8.58.9

7.3

8.37.3

2.0 2.4 2.52.2 1.9

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

10.00

Mar-03 Jun-03 Sep-03 Dec-03 Mar-04

189%173%

189% 198% 202%

Mar-03 Jun-03 Sep-03 Dec-03 Mar-04



R$ Million

1st Q./04

3281792

2896257

16424424

129

1,405

4th Q./03

3351888

2593759

14425024

128

1,343

Mutual Funds Management Fees Consortium Administration Collection Checking Account Services Tax Collection Interbank Fees Credit Operation Fees Credit Card Income from Guarantees Provided Other

Total

1st Q./03

2821 73

2474649

13323629

116

1,212

Banking Service Fees



R$ Million

Personnel Expenses

Other Administrative Expenses

Reorganization

Total

1st Q./04

694

1,235

79

2,009

Administrative Expenses

4th Q./03

725

1,277

104

2,107

Administrative Expenses under Strict Control



Financial Instruments – Market Value

Total Unrealized

Interbank Deposits

Securities and derivatives

Additional Provision Adjustment of Securities Available for Sale Adjustment of Securities Held to MaturityCredit Operations

Investments (basically BPI)

Time and Interbank Deposits and Funds from

acceptance and issuance of securities abroad

Securitization and Payment Orders Abroad

Subordinated Debt and Treasury Shares

R$ Million

Unrealized Income/(Loss) (1) (2)Income Equity

December/2004

2,677 2,048

10

1,556

545758253319

627

33

74

58

10

688

545-

143319

627

33

74

297

Income EquityMarch/2004

2,919 2,279

9

1,512

545712255399

697

75

109

119

9

693

545-

148399

697

75

109

298

(1) Tax effects not considered.(2) Includes unrealized gains to minority interest amounting to R$ 336 millions in March and R$ 307 millions in December andR$ 286 millions in March and R$ 257 millions in December on Stockholders’ Equity.



. The following slides show the pro forma information about Banco Itaú and Banco Itaú BBA operations, using internal data for a better disclosure of the managerial performance of the business units.

. In 2003, it was considered as if the integration process between Banco Itaú BBA and the corporate segment of Banco Itaú occurred in the beginning of the year.

Pro Forma



R$ Million

(*) Endorsements and sureties included.

Pro Forma


Banco Itaú

601

7,213

37.7%

22,985

101,881

Banco Itaú-BBA

215

3,104

30.7%

22,030

31,130

Net Income

Allocated Capital Tier I

ROE (%)

Credit Operations (*)

Total Assets

Banco Itaú

651

6,479

46.7%

22,224

95,079

Banco Itaú-BBA

48

2,924

6.7%

22,468

30,233

March / 2004 December / 2003Corpo-ration

60

2,162

11.6%

-

4,620

Corpo-ration

155

2,477

27.4%

-

5,680Note: The Consolidated doesn’t represent the sum of the parts since there are operations among related parties, eliminated only in the Consolidated


Variation

-9.6%

30.9%

5.2%

-4.3%

30.8%

-39.0%

-7.7%

11.3%

-

R$ Million

Net Interest Margin

Result from Loan Losses



Income Tax and Social Contribution

Other

Net Income


ROE (%)

1st Q./04

2,047

(352)

1,356

(1,928)

(272)

(250)

601

7,213

37.7%

4th Q./03

2,264

(269)

1,289

(2,015)

(208)

(410)

651

6,479

46.7%

Banco Itaú S.A.

Pro Forma


Credit Cards21%

Mutual Funds and Managed

Portfolios6%

Insurance, Capitalization and Pension

Plans21%

Banco Itaú - Banking

52%

Diversification of income sourcesNot only restricted to interest rates

Banco Itaú - Banking

57%

Insurance, Capitalization and Pension

Plans16%

Mutual Funds and Managed

Portfolios7%

Credit Cards20%

11stst Quarter 2004 Quarter 2004 44thth Quarter 2003 Quarter 2003

Banco Itaú S.A.

Consolidated Net Income


Technical Provisions of Insurance,Capitalization and Pension Plans

2,821 3,3523,991

4,9075,526

612

923906

902927

977957

1,0211,077

1,1341,168

1,2361,225

2,459

569

Dec-02 Mar-03 Jun-03 Sep-03 Dec-03 Mar-04

Technical Provisions - Pension Plans AGF

Technical Provisions - Capitalization Technical Provisions - Insurance

R$ Million

7,689

4,4034,804

5,3886,086

Technical Provisions of Pension Plans – growth of 96% from March 2003 to March 2004

8,320

Banco Itaú S.A.


1st Q./034th Q./03

Result of Ins., Cap. And Pension Plans 102

Combined Ratio 94.7%Claim Ratio 52.8%

• Insurance Premiums, Pension Plan Contributions

and Premiums Bonds Revenues• Chances in Technical Provisions• Selling Expenses• Insurance Claims, Pension Plan Benefits and

Premium Bonds Redemption• Other Operating Income/(Expenses)

1,622

(968)

(93)

(412)

34

Operating Margin 184

Financial Income



Other

176

(201)

(56)

(1)

R$ Million

1st Q./04

124

94.8%55.0%

1,373

(593)

(96)

(529)

30

186

165

(165)

(64)

2

136

97.8%56.8%

893

(345)

(78)

(336)

11

144

185

(125)

(71)

3

Insurance, CapitalizationAnd Pension Plans

Banco Itaú S.A.


Mutual Funds and Managed Portfolios

59.2 62.9 67.1 71.886.480.1

Dec-02 Mar-03 Jun-03 Sep-03 Dec-03 Mar-04

Assets Under ManagementAssets Under ManagementR$ Billion

Growth of 37% in volume of Mutual Funds and Managed Portfolios in relation to March 2003

Banco Itaú S.A.


1st Q./04

256

150

49

(79)

(88)

(72)

215

3,104

30.7%

4th Q./03

340

(172)

54

(92)

(15)

(67)

48

2,924

6.7%

R$ Million

Net Interest Margin

Result from Loan Losses (*)




Other

Net Income


ROE (%)

Variation

-24.7%

-187.2%

-9.3%

-14.1%

486.7%

7.5%

347.9%

6.2%

-

Banco Itaú BBA

Pro Forma

Net Income(*) Provisions constituted in 4th Q/03 and reverted in 1st Q/ 04, net of taxes

Adjusted Net Income

ROE

215

(46)

169

23.6%

48

46

94

13.5%

347.9%

-

79.8%

Adjusted Net Income


Nonperforming Loans

R$ Million

Dec 31, 03

211

17,864

1.2%

Nonperforming Loans (NPL)

Credit Operations

NPL Ratio (%)

Mar 31, 04 Variation

Itaú BBA has a high quality portfolio with 95.3% of volume classified as “AA”, “A” and “B”.

245

17,361

1.4%

34

(503)

Banco Itaú BBA


4.524.89

5.756.20 6.26

6.797.05

7.49 7.68

1st Q./02 2nd Q./02 3rd Q./02 4th Q./02 1st Q./03 2nd Q./03 3rd Q./03 4th Q./03 1st Q./04

CAGR = 30.4%

R$Evolution of Net Income per Thousand Shares



Preferred Shares AppreciationEvolution of US$ 100 Invested from April 1994 to April 2004


0

200

400

600

800

1.000

1.200

94 95 96 97 98 99 00 01 02 03 04

Itaú (1)Itaú (2)Bovespa

Real Plan

Russian Crisis Real Devaluation

US$

Mexican Crisis

Asian Crisis

100

580

185

834

Argentine Crisis

Attack to WTC

Itaú(1) Itaú(2) Ibov.

10 years 23.63% 19.22% 6.35%

5 years 16.80% 12.50% -0.52%

2004 -16.33% -18.34% -13.49%

Annual Average Appreciation in US$

(1) With reinvestment of dividends (2) Without reinvestment of dividends


May 05, 2004



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