Conference Call May 14, 2004

1

Conference Call

May 14, 2004

Consolidated Results

1st Quarter 2004

2

Performance Indicators

R$ Million

1Q04 1Q03%

1Q04/1Q03

Net Income 276 218 26.6%

Earnings/1,000 shares (R$) 2.01 1.58 27.2%

ROAE (Annualized) 16.1% 13.8% 231 b.p.

BIS Ratio 18.1% 16.2% 190 b.p.

Total Assets 71,505 70,014 2.1%

Total Risk 27,343 25,991 5.2%

Deposits+Funds 56,738 44,867 26.5%

Stockholders' Equity 7,358 6,717 9.5%

3

R$ Million

Income Statement

1Q04 1Q03

1Q04/1T03

Profit from Financial Intermediation 1,205 1,033 16.7%

(+) Fee Income 741 662 11.9%

(-) Personnel & Adm. Expenses (1,143) (1,062) 7.6%

(+/-) Other Operating Income/Expenses (332) (175) 89.7%

(=) Operating Income 471 458 2.8%

(+/-) Non-Operating Income (expenses), Net (12) 10

(+/-) Income Tax & Social Contrib. (79) (148) -46.6%

(-) Profit Sharing/Minority Interest (104) (102) 2.0%

Net Income 276 218 26.6%

4

R$ Million

Impact on Investments Abroad

1Q04 1Q03

Investments Abroad (US$ Million) 674 999

Exchange Rate (R$/US$) 2.9086 3.3531

Exchange Rate Fluctuation on Investments Abroad 8 (200)

Hedge on Investments Abroad 34 135

Net Accounting Impact before Income Tax and Social Contribution 42 (65)

Fiscal Effects 3 (68)

Net Impact after Income Tax and Social Contribution 45 (133)

5

1Q04 1Q03

Effective Tax Rate

Income before Taxes and Profit Sharing

Profit Sharing

(A) Income before Taxes and after Profit Sharing

Income Tax @ 25% and Social Contribution @ 9%

Adjustments to Derive Effective Tax Rate:

Interest on Capital Stock

Permanent Differences (net)

Exchange Rate Fluctuation non Taxable / (non Deductible)

(B) Income Tax & Social Contribution for the Period

(B/A) Effective Income Tax & Social Contribution Rate

459 468

(69) (56)

390 412

(133) (140)

50 51

(1) 18

5

(77)

(79)

(148)

20% 36%

6

R$ Million

Financial Margin

1Q04 1Q03

1Q04/1Q03

Revenue from Financial Intermediation 2,891 2,854 1.3%

Expenses on Financial Intermediation (1,373) (1,537) -10.7%

Financial Margin before Provision for Loan Losses (A) 1,518 1,317 15.3%

Provision for Loan Losses (313) (284) 10.2%

Financial Margin after Provision for Loan Losses 1,205 1,033 16.7%

Total Average Assets (-) Fixed Assets (B) 67,045 69,321 -3.3%

Net Financial Margin (A/B) 9.4% 7.8% 160 b.p.

7

R$ Million

Securities Portfolio

Mar-04%

PortfolioMar-03

% Portfolio

Trading Securities 8,185 47% 5,482 30%

Securities Available for Sale 3,544 20% 6,458 36%

Securities Held to Maturity 5,795 33% 6,230 34%

Total Securities Portfolio 17,524 18,170

8

Ajuste ao Valor

Mercado 31/12/2003

R$

Ajuste ao Valor

Mercado 31/12/2002

Impacto no Resultado 171 190 (19)

Impacto no Patrimônio Líquido (318) 101 (419)

Impacto Total (147) 291 (438)

Mantidos até o vencimento 394 1.397 (1.003)

Securities Portfolio – Market Value Adjustment

Income Statement Impact 111 7

Stockholders´ Equity Impact (257) 61

Total Impact (146) 68

Market Value

Adjustment 03/31/2004

R$ Million

9

R$ Million

Loan Portfolio Evolution

Wholesale Bank

Retail Bank

27,91725,991

7.4%

10.1%

5.4%

27,343

-4.5%

1.1%

-2.1%

5.2%

% Mar-04/Mar-03

+0.7%

% Mar-04/Mar-03

+11.3%

11,012 12,123 12,259

14,97915,794 15,084

Mar-03 Dec-03 Mar-04

10

Loan Portfolio Breakdown by Type of ClientR$ Million

Mar-03 Mar-04

3,4083,845

8,692

5,284

9,527

5,682

Consumer Finance Companies

Total

12.8%7.5%

9.6%

Individuals

Multiple Bank and Other Companies

17,299

13,025

4,274

17,816

13,139

4,677

Large Corporate Total

9.4%

0.9%

3.0%Corporate

Middle Market andSmall Companies

11

Loan Portfolio

R$ Million

Mar-03 Mar-04

Consumer Finance Companies - Individuals

3,845

918

3,408

266

1,0711,045

108343

1,215

162

1,141984

Total

7.2%16.3%

50.0%28.9%

6.5%

12.8%

12

R$ Million

Loan Portfolio Breakdown

D-H

A

C

AA

B

Non-Accrual Portfolio / Total Risk

AA-C Loan Porfolio

13.6%7.9% 7.5%

10.6%

9.8% 9.9%

32.7%

34.5% 37.4%

34.4%39.0% 37.1%

8.7% 8.8% 8.1%


25,991 27,917 27,343

4.8%

4.7%


91.3%91.2%

91.9%

4.4%

R$ Million

13

R$ Million

+26.5%

Funding

44,86753,302

56,738

0.7%

36.8% 8.8%

8.1%

18.8%6.4%

25,176 25,357 27,414

19,69126,945

29,324


Deposits Funds

% Mar-04/Mar-03

+48.9%

% Mar-04/Mar-03

+8.9%

14

1Q03

Net Revenue by Business

1Q04

Net Financial Result

Banking Fees

Credit Cards

Insurance/Annuities/Pension Plans

Asset Management Fees

12%

4%

19%

25%

40%

11%

5%

19%

24%

41%

15

Direct Management Indirect Management


16

R$ Million


Consumer Finance Companies: Fininvest, Unicard, 50% LuizaCred, 50% PontoCred and 33.3% Credicard

Consumer Finance Companies Under Direct Management: Fininvest, Unicard, 50% PontoCred and 50% LuizaCred.

1Q04 1Q03 1Q04 1Q03

Equity Income 131 93 85 53

Billings 3,986 3,637 2,566 2,286

Volume of Transactions (# million) 52 45 33 28

Credit Portfolio 3,891 3,408 2,676 2,363

Provision for Loan Losses 164 170 136 143

Provision for Loan Losses / Credit Portfolio 4.2% 5.0% 5.1% 6.1%

ROAE 74.3% 76.0% 57.7% 55.6%

Consumer FinanceCompanies

Consumer FinanceCompanies under Direct Management

17

R$ Million


Net Income

Billings Number of Transactions (million)

Credit Portfolio

69.2%

26

44

1Q03 1Q04

13.1%

1,179

1,333

1Q03 1Q04

30.5%

10.5

13.7

1Q03 1Q04

Note: All numbers Include Luizacred.

5.3%

910

958

1Q03 1Q04

18

Net Income

Billings Number of Transactions (million)

Credit Portfolio and Revolving Credit

R$ Million


43.5%

23

33

1Q03 1Q04Credit PortfolioRevolving Credit

8.9%

10.6%

9181,000

387 428

1Q03 1Q04

17.4%1,203

1,412

1Q03 1Q04

17

20

1Q03 1Q04

17.6%

19

Technical Reserves

R$ Million

Insurance and Private Pension Plans

1Q04 1Q03%

1Q04/1Q03

Billings + Gross Premiums Written 982 912

Technical Reserves 4,281 3,134

Operating Income 2 (5)

Financial Income / Technical Reserves 81 123

Net Income 67 90

3,134

3,892 4,28110%

24%

1Q03 4Q03 1Q04

Insurance

2,309

825

3,071

821

3,379

902

Private Pension Plans

7.7%

36.6%

-34.1%

-25.6%

Combined Ratio 99.5% 101.4% -190 b.p.

R$ Million

20

Claims Ratio

Administrative Expenses / Net Premiums Written

Insurance

62.8%

59.7%

56.8%

1Q03 4Q03 1Q04

14.6%

13.0%

12.3%

1Q03 4Q03 1Q04

21

Personnel Expenses

Other Administrative Expenses

4Q03 1Q04

460

776

459

684

-0.2%

-11.9%

-7.5%

Total Expenses

Personnel and Other Administrative Expenses

1,143

1,236

22

Total Expenses

Fee Income / Personnel and Administrative Expenses

Personnel and Administrative Expenses R$ Million

Administrative Expenses Organic Growth / Acquisitions

1,062

1Q03 1Q04

IPC-A 5.9%

23

1,120

5.5%

7.6%

62.4%

64.8%

1Q03 1Q04

1,143

23

Number of Employees

Branch Network

Consumer Division

Wholesale Bank

Insurance

Wealth Management

Others

Total

Mar-04 Mar-03

15,152 13,473 1,679

3,142 2,936 206

1,053 1,239 -186

1,341 1,400 -59

330 280 50

7,211 7,075 136

28,229 26,403 1,826

24

• Over 2.4 million cards issued to 1.6 million clients

• More than 60,000 affiliated stores

• Billings of R$3.6 billion in 2003

• Main means of payment at the 119 stores

• 5% Credit Card Market Share

• Strong client base

• 57% are clients for more than 3 years, representing more than 73% of total billings

• low client overlap (92% of the individuals and 93% of the affiliated stores are not clients of the bank)

• more than 82% of loans outstanding are not past due

• Opportunities

• Loan portfolio increase –minimum required payment of credit card bill from 50% up to 15%

• Unibanco´s checking account holders growth

• Cross selling with Unibanco´s companies

• Cost of funding decrease

Highlights

25

• Unibanco paid R$630 million to Ahold for HiperCard´s total capital

• Goodwill of R$237 million and deferred tax assets of R$107 million

• HiperCard’s stockholders’ equity was R$286 million as of January 2004

• Unicard, HiperCard, and Bompreço (acquired by Wal Mart) signed, at the

same date, a long- term service agreement (“Master Services Agreement”)

that:

• guarantees HiperCard remain Bompreço’s sole private label credit

card;

• guarantees the maintenance of the current relationship and

cooperative environment between HiperCard and Bompreço.

The Transaction

26

Pedro Moreira SallesCEO

Board of Directors

Pedro Sampaio MalanChairman

Pedro Moreira SallesVice-Chairman

Armínio Fraga Castro Neto Fernando Sotelino Gabriel J. Ferreira Israel Vainboim Pedro Bodin

Board Members

Retail

Márcio Schettini

Wholesale

João Dionísio Amoêdo

Insurance

José Rudge

Wealth Management

César Sizenando

Audit Committee

Gabriel Jorge FerreiraPresident

Eduardo A. GuimarãesGuy Almeida Andrade

Members

Organizational Structure

Legal, Auditing and Inst.Relations

Lucas Melo

Risk Management and Macroeconomic

Research

Daniel Gleizer

Efficiency Planning

Adalberto Schettert

Planning, Control and Operations

Geraldo Travaglia

Unibanco Pessoas Human Resources

Marcelo Orticelli

27

Audit Committee

• Gabriel Jorge FerreiraMember of Unibanco’s Board of Directors and President of the National Confederation of Financial Institutions (CNF – Confederação Nacional das Instituições Financeiras).

• Eduardo Augusto de Almeida GuimarãesEx-President of Banco do Brasil (2001-03) and Banco do Estado de São Paulo – BANESPA (1999-2000), he also worked for the Institute of Economic and Social Planning – IPEA and was a Research Director and President of the Brazilian Institute of Geography and Statistics - IBGE (1985-88 and 1990-92).

• Guy Almeida AndradePresident of the Institute of Independent Accountants of Brazil (IBRACON - Instituto dos Auditores Independentes do Brasil). He is also a Member of the board of IFAC - International Federation of Accountants and President of its audit committee. He is a partner at Magalhães Andrade Auditores Independentes.

Members

• Indicate, ad referendum of the Board of Directors, the External Independent Auditor

• Review the half-yearly financial statements

• Evaluate the External Auditors as well as the Internal Auditing

• Establish, divulge, monitor, and oversee procedures regarding compliance with legal requirements

• Recommendations on the correction and improvement of internal policies and strategies

Responsibilities

28

Aug-03 –Conversion Offer - Common Shares into Preferred

Sep-03 – 1st. Exchange Offer - Preferred Shares into UNITs

Sep-03 –UNITs Secondary Offer (R$191MM in the Local Market)

Oct-03 – 2nd. Exchange Offer - Preferred Shares into UNITs

Nov-03 to Nov-05 – Conversion Program - Preferred Shares into Units

Jan-04 – Change in Round Lot (from 100,000 shares to 10,000)

Apr-04 – Reverse Stock Split Approval*

May-04 –Market Maker Hiring for the Units traded at Bovespa

May-04 to Jul-04 – Reduction on ADRs Cancellation Fee (from US$0.05 to US$0.03)

Initiatives to Increase Units Liquidity at Bovespa (UBBR11)

* Pending Brazilian Central Bank’s homologation.

Units Liquidity Growth at Bovespa

29

Units Liquidity Growth (UBBR11)

Average Daily Volume –Units (In 1,000 of Shares)

Liquidity Growth at Bovespa

1Q03 2Q03 3Q03 4Q03 1Q04 2Q04*

* Until 05/10/2004.

25,157

16,835

22,674

39,219

30,371

34,007

30

Macroeconomic Perspectives 2004

GDP 3.5%

Exchange Rate (R$ / US$) 3.05

SELIC (end of year) 13.0%

IPC-A 6.8%

31

Loan Portfolio 20%

Corporate 11%

Large 10%

Middle 20%

Retail 30%

Consumer Finance Companies* 43%

Others 25%

(*) HiperCard 18%

Fee Income 10-15%

Administratives Expenses 7%

Baseline 4%

Acquisitions / Organic Growth 3%

Unibanco´s Perspectives for 2004

32

For further information contact our Investor Relations Area at

phone: 5511-3097-1626 / 1313fax: 5511-3813-6182

email: [email protected]: www.ir.unibanco.com

This presentation contains forward-looking statements regarding Unibanco. its subsidiaries and affiliates - anticipated synergies. growth plans. projected results and future strategies. Although these forward-looking statements reflect management’s good faith beliefs. they involve known and unknown risks and uncertainties that may cause the Company’s actual results or outcomes to be materially different from those anticipated and discussed herein. These risks and uncertainties include. but are not limited to. our ability to realize the amount of the projected synergies and the timetable projected. as well as economic. competitive. governmental and technological factors affecting Unibanco’s operations. markets. products and prices. and other factors detailed in Unibanco’s filings with the Securities and Exchange Commission which readers are urged to read carefully in assessing the forward-looking statements contained herein. Unibanco undertakes no duty to update any of the projections contained herein.

Conference Call May 14, 2004

Documents

Transcript of Conference Call May 14, 2004