80 Years of innovation. Institutional Presentation. 3 rd Quarter, Years of innovation. Highlights

Transcription

1 Institutional Presentation 3 rd Quarter, Highlights 2

2 Unibanco s profile Established in 1924 Controlled by the Moreira Salles Group Brazil s oldest private sector bank 3rd largest private sector bank Country s largest consumer finance operation Universal Banking model - Retail - Wholesale - Insurance / Pensions - Wealth Management Wide Client Base Unibanco In R$ billion September, 2004 BIS Ratio 15.4% Wide Distribution Network September 04 September 04 1,265 branches, in-store and corporate site branches 6.3 million clients under Unibanco s brand 7,316 ATMs 11.1 million clients of consumer finance 209 Fininvest Stores 2,026 wholesale clients 5 regional wholesale offices 400 institutional investors Offices and braches in Nassau, Luxembourg, 1.6 million clients use Unibanco s Internet banking Cayman, Assunción Brokerages in São Paulo, New York and Luxembourg 7.9 Stockholders Equity 30.7 Loans 32.0 Deposits 84.1 Assets 3 Segmented approach Large companies (Sales > R$150 million) Private Bank (Financial Investments> R$1 million) Upper middle (R$40 million < Sales < R$150 million) UniClass (Monthly Income> R$4,000) Middle (R$5 million < Sales <R$40 million) Exclusive (R$1,300 < Monthly Income < R$4,000) Small (Sales < R$5 million) Payrolls Alliances Special (R$350 < Monthly Income < R$1,300) COMPANIES INDIVIDUALS Wholesale Retail Wealth management 4

3 Recent strategic movements In the last years Unibanco has focused in acquisitions and partnerships 1998/ 2001/ % acquisition Listed NYSE Asset Management Joint-venture Unibanco and AIG Remaining 50% acquisition Tricard 5 Multiple of total assets Unibanco posted the highest growth since June 2004 Multiple Multiple 1- Banco do Brasil* 13.8x 2- CEF* 8.2x 3- Bradesco 2.9x 4- Itaú 2.3x 5- Banespa 2.3x 6- Bamerindus 1.6x 7- Unibanco 1.0x 8- Econômico 0.9x 9- Nossa Caixa* 0.9x 10-Nacional 0.8x 11-Real 0.7x 1- Banco do Brasil* 2.8x 2- Bradesco 2.2x 3- CEF* 2.1x 4- Itaú 1.5x 5- Unibanco 1.0x 6- Santander Banespa 0.9x 7- ABN + Sudameris 0.8x 8- Safra 0.5x 9- HSBC + Lloyds 0.4x 10- Nossa Caixa* 0.3x 11- BankBoston 0.2x (*) State owned banks 6

4 Current ranking position As of June 2004 In R$ billion Total Assets Stockholder s Equity Total Deposits Banco do Brasil CEF Bradesco Itaú Unibanco 72.2 Santander/Banespa 66.1 ABN Amro 58.5 Safra 38.7 Votorantim 34.9 HSBC 32.3 Citibank 29.8 Itaú 13.7 Bradesco 13.7 Banco do Brasil 12.9 ABN Amro 8.8 Santander/Banespa 8.1 Unibanco 7.9 CEF 6.2 Safra 3.4 Citibank 3.2 Votorantim 3.0 BankBoston 3.0 Banco do Brasil CEF 83.8 Bradesco 64.3 Itaú 36.6 Unibanco 29.6 ABN Amro 26.9 Nossa Caixa 19.8 HSBC 19.4 Santander/Banespa 19.1 Votorantim 11.6 Safra 8.8 Source: Central Bank of Brazil Restructuring 8

5 Consolidation in the 90 s - Focus on each business Retail Wholesale Insurance & pension Wealth management 9 Structure until 1Q04 Board of Directors Chairman: Pedro Moreira Salles Vice-chairmen: Pedro Malan, Gabriel Jorge Ferreira Members: Israel Vainboim, Pedro Bodin, Tomas Zinner, Armínio Fraga Legal, auditing, IR Gabriel Jorge Ferreira Planning and control Geraldo Travaglia Efficiency Adalberto Schettert HR Marcelo Orticelli Retail bank Castro Neto Wholesale bank Fernando Sotelino Insurance/pension José Rudge Wealth management Cesar Sizenando 10

6 A single CEO; Structural changes Establishment of the Audit Committee; New Board of Directors; New attributions to the CFO: IT, Support and Back-Office areas, Efficiency Planning; Middle Market and Cash Management under Retail area (formerly under Wholesale); Establishment of a Corporate Communication area (consolidating marketing functions of all business units); Establishment of an independent Risk Management and Economic Research area (formerly under Planning & Control and Wholesale, respectively). 11 New structure Board of Directors Pedro Sampaio Malan Pedro Moreira Salles Chairman Vice-Chairman Board Members Armínio Fraga Israel Vainboim Gabriel J. Ferreira Pedro Bodin Joaquim F. de Castro Neto Pedro Moreira Salles CEO Audit Committee Gabriel Jorge Ferreira Chairman Eduardo A. Guimarães Guy Almeida Andrade Members Retail Wholesale Insurance/Pensions Wealth Management Márcio Schettini João Dionísio Amoêdo José Rudge Demosthenes Madureira Legal, Auditing, Institutional Relations Lucas Melo Planning, Control and Operations Geraldo Travaglia Risk Mgt and Macroeconomic Research Daniel Gleizer Corporate Communication Marcos Caetano HR Marcelo Orticelli 12

7 Corporate Governance 13 Unibanco s corporate highlights US GAAP financial statements since 1997; First Brazilian bank listing Level 3 ADRs at NYSE ; Earnings release: Conference Calls both in Portuguese and English; Public meetings with equity analysts; Distribution of 35% of net income to stockholders (after legal reserve); Unibanco was part of the first group of companies to adhere to Bovespa's Level 1 of Corporate Governance in June

8 Initiatives to increase Units liquidity at Bovespa 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); May-04 Market Maker Hiring for the Units traded at Bovespa; Jul/04 Reverse Stock Split Proposal Approved; Sep/04 Entered the IBrX-50 with 2.724% weight. 15 Stock liquidity Stock liquidity has increased (UBBR11) Daily Average # of lots of 100 shares traded # of trades 3, , ,038 2,876 2, , ,684 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 16

9 Shareholder structure UNIBANCO HOLDINGS Participation Indireta (Direct and Indirect) Shareholders no Unibanco (*) UNIBANCO HOLDINGS 59.4% Moreira Salles Group 17.7% Caixa Brasil 7.5% Moreira Salles Group - Float 0.2% Commerzbank 2.6% BNL 0.7% Units + GDSs 28.6% Other 2.2% Caixa Brasil 4.8% Moreira Salles Group - Float 0.2% Commerzbank 2.6% BNL 0.7% Units + GDSs 28.6% Other 3.7% TOTAL % UNIT 57.2% November, 2004 UBH PN UBB PN 17 Transparent management practices Board of Directors Seven members, annually elected Executive Committee Formed by the CEO and by the executives directly reporting to him Policies and Strategy Internal Audit Other Committees Insurance and Pension Wealth Management Treasury Thematic 18

10 Compensation of directors and officers Directors and Officers Stock Option Plan On October 31, shareholders approved a stock option plan; The stock options committee may not grant options in any year representing more than 1% of the total authorized capital and there may not be outstanding options representing, in the aggregate, more than 10% of the total authorized capital; As of September 2004, there were 11.4 million options of Units outstanding, of which 1.8 million become vested in Business units 20

11 Retail at Unibanco Branches network, Corporate site branches, In-stores, Credit and Collection, Marketing, Products and Internet Financeira Capitalização 21 Retail Strategy Segmentation strengthening; Focus on client needs; Higher growth with profitability; Cross-selling among the various retail distribution channels and other business units. 22

12 Retail - Core competencies Consistent results, lower volatility; Large-scale distribution; Superior market segmentation; Excellence in credit risk and collection; Expertise in statistical modeling; State-of-the-art IT and infrastructure; Tight internal controls; Competitive costs; Highly qualified team. 23 Retail Client base growth In Million Dec-94 Dec-99 Dec-00 Dec-02 Dec-03 Sep-04 24

13 Retail - Distribution Lines of business Branch network Consumer finance/ credit card SMEs market Auto loans Branches + In-store points of sale Distribution network Corporate site Branches 397 9,979 points of sale 209 stores Over 65 thousand retailers 118 Bompreço stores 148 stores/ points of sale 338 points of sale 2,315 points of service 25 Retail Acquisitions and Alliances Tricard Business CC CF CF CF CC/CF/Private Label CC/Private Label Private Label Nature acquisition JV 50/50 JV 50/50 JV 50/50 alliance alliance alliance Distribution network Bompreço stores 148 stores 333 stores 250 stores 149 stores - over 60,000 retailers over 4,000 gas stations 3,500 stores Opportunities Leverage portfolio & retailers relationship Explore customer base CC Expansion to the South Explore customer base Private Label Expansion to countryside Loan portfolio: Consumer finance companies: R$1,958 million Credit cards: R$1,976 million CC Credit Card CF Consumer Finance JV - Joint Venture 26

14 Wholesale Strategy Focus on companies with sales over R$ 150 million; Value and strengthen client relationship; Focus on day-to-day operations; Higher senior management involvement; Increased speed and flexibility; Higher integration with other business units; War room corporate clients strategic database management tool. 27 Wholesale Client orientation Relationship oriented; 1,341 corporations with total sales over R$150 million/year; 331 financial institutions; Regional coverage; 408 employees in September 2004; Regional units closer to clients. 28

15 Insurance Group highlights Partnership with AIG since /50 Joint-Venture; Management control; Product distribution agreement with Unibanco s branch network; Premium: 32% CAGR over the last 8 years, versus 15% market CAGR; 29 Insurance and pension - strategy Focus on operational result; Branch network: increase in the number of products per client; Copa do Milhão reaching leadership in retail; Consolidate corporate leadership; Direct distribution (consumer finance cross-selling); Increase number of active brokers. 30

16 Insurance and pension - highlights Individuals # 1 Ranking - Insurance Property risks Petrochemical Aeronautical Corporate Directors and Officers Extended Warranty # 1 Ranking - Pensions Corporate Pension Plans 31 Loss Ratio Insurance and pension - highlights 51.7% 51.9% 50.5% 44.1% Combined Ratio 2Q03 1Q04 2Q04 107,0 108,0 104,2 106,2 106,5 106,0 102,1 102,0 101,0 98,7 3Q04 104,5 104,7 107,0 99,8 99,6 99, E 2004 Source: Susep INDUSTRY UASEG 32

17 Wealth management strategy Functional structures with clearly defined activities 33 UAM: focus on asset management R$32.7 billion in assets under management, mainly from institutional and retail INSTITUTIONAL INVESTORS 43.2% RETAIL 27.2% September, 2004 INTERNATIONAL 0.4% CORPORATE 11.3% WEALTH MANAGEMENT 18.0% Independent company focused exclusively on asset management Segregated from Unibanco s Treasury 34

18 Consolidated Results 3rd Quarter, Performance indicators R$ Million 3Q04 2Q04 3Q03 Operating income Net income Earnings per share (R$) (1) ROAE (%) 17.8% 17.3% 16.5% Total assets 84,062 80,011 68,066 Total loans 30,667 30,045 26,624 Deposits + funds 64,698 59,831 49,322 Stockholders' equity 7,932 7,704 7,023 (1) In August, 2004, a reverse stock split in a ratio of 100 shares per share was performed. Amounts from previous periods were adapted for better comparison. 36

19 Performance indicators R$ Million 9M04 9M03 Operating income Net income Earnings per share (R$) (1) ROAE 1,428 1, % 15.2% (1) In August, 2004, a reverse stock split in a ratio of 100 shares per share was performed. Amounts from previous periods were adapted for better comparison. 37 Consolidated Results R$ Million 3Q04 2Q04 3Q03 Net financial intermediation 1,400 1,142 1,116 (+) Fees from services rendered (-) Personnel & adm. expenses (1,308) (1,242) (1,181) (+/-) Other operating income/ expenses (365) (319) (192) (=) Operating income (+/-) Non-operating income (expenses), net (5) 18 (7) (+/-) Income tax and social contribution (141) (18) (56) (-) Profit sharing / minority interest (83) (96) (95) Net income

20 Financial margin R$ Million 3Q04 2Q04 3Q03 Revenue from financial intermediation 3,095 3,414 3,419 Expenses on financial intermediation (1,420) (1,956) (1,887) Gross financial margin (A) 1,675 1,458 1,532 Provision for loan losses Net financial margin 1,400 1,142 1,116 Total average assets (-) Average balance of interbank loans and fixed assets (=) Adjusted total assets (B) Adjusted annualized gross financial margin (A / B) 82,036 75,758 67,079 18,853 16,253 12,901 63,183 59,505 54, % 10.2% 11.8% Note: Unadjusted net financial margin would be 8.8%, 8.4% and 10.0% in 3Q04, 2Q04 and 3Q03, respectively. 39 Consumer Companies (including Credicard Group) R$ Million 3Q04 2Q04 3Q03 Contribution to Unibanco s results Revenues Credit portfolio Provision for loan losses Provision for loan losses / credit portfolio ,915 5,919 3,974 5,286 4,992 3, % 3.9% 5.5% Includes: Fininvest, Unicard, HiperCard, 50% LuizaCred, 50% PontoCred, 33.3% Credicard, 33.3% Orbitall and 31.94% Redecard. 40

21 Consumer Companies (without Credicard and Orbitall) R$ Million 3Q04 2Q04 3Q03 Contribution to Unibanco s results Revenues 4,325 4,353 2,502 Credit portfolio 3,972 3,695 2,550 Provision for loan losses Provision for loan losses / credit portfolio 3.9% 4.4% 6.5% Includes: Fininvest, Unicard, HiperCard, 50% LuizaCred, 50% PontoCred and 31.94% Redecard. 41 Consumer companies 3Q04 ROAE Credit card companies 220.2% 171.8% 42.7% 87.9% Unicard HiperCard Redecard Credicard + Orbitall Consumer finance companies 40.9% 52.3% 29.9% Fininvest LuizaCred PontoCred 42

22 Insurance and pension R$ Million 3Q04 2Q04 3Q03 Net premium written + pension contributions 1,039 1, Insurance and pension reserves 5,106 4,847 3,682 Net income Loss ratio 44.1% 50.5% 58.4% Combined ratio 99.4% 99.6% 103.9% Total reserves 3, , % 38.7% 5.3% 4,847 5,106 1,077 1,067 3,770 4,039 Sep-03 Jun-04 Sep-04 % Sep-04/Sep-03 Insurance +26.8% Pension +42.2% 43 Fees from services rendered R$ Million 3Q04 2Q04 3Q03 Banking fees Credit cards Unibanco s cards + Redecard Credicard Asset management Total fees from services rendered

23 Personnel and administrative expenses R$ Million 3Q04 2Q04 3Q03 Personnel expenses Administrative expenses Total 1,308 1,242 1,181 Efficiency ratio 61.2% 63.4% 58.2% 45 Other operational income / expenses Analysis of Q-o-Q changes R$ Million 3Q04 2Q04 3Q03 3Q04-3Q03 Other operating income / expenses (365) (319) (192) (173) Main changes Provision for labor, fiscal and civil contingencies (114) (106) (74) (40) Credit card issuance expenses (92) (87) (63) (29) Levies on fees and interest (199) (174) (160) (39) Goodwill amortization (39) (36) (20) (19) Early retirement program (9) (15) - (9) Total changes above (136) 46

24 Effective income tax rate R$ Million 3Q04 2Q04 3Q03 Income before taxes and profit sharing to employees Profit sharing to employees (46) (57) (59) (A) Income before taxes and after profit sharing Income 25% and social 9% (172) (123) (123) Tax deductible dividends (interest on capital) / permanent differences (net) Non-taxable / non-deductible exchange rate fluctuation and equity income (36) (B) Income tax & social contribution for the period (141) (18) (56) (B /A ) Effective Income tax & social contribution rate 28% 5% 15% 47 Securities portfolio Market value adjustment R$ Million Market Value Adjustment 09/30/2004 3Q04 Market Value Adjustment 06/30/2004 2Q04 Income statement impact Stockholders equity impact (111) 54 (165) 92 Held to maturity Amortized Cost Market Value Adjustment R$ Million Securities held to maturity 5,338 5,621 Unrealized gains

25 Loan portfolio individuals R$ million 27.0% 4.8% 15.0% 9,050 11,496 10,969 5, % 6,012 6, % 103.1% 20.3% 10.1% 5.1% 1.3% 1,779 1,958 1,551 1,976 1, ,092 1,297 1,314 Multiple Bank and Other Companies Consumer Finance Companies Unibanco's Credit Cards Credicard Total Individuals Sep-03 Jun-04 Sep Loan portfolio mix 25,827 30,667 26,751 27,917 R$ Million 53% 54% 50% 45% 47% 46% 50% 55% Dec-01 Dec-02 Dec-03 Sep-04 Retail Wholesale Note: Wholesale includes only large corporates 50

26 Loan portfolio corporate 9.1% R$ million 2.3% 0.5% -2.5% 17,574 19,076 19, % 8.7% 13,361 14,021 13,674 R$5.9 Bln R$6.8 Bln R$6.3 Bln US$2.0 Bln US$2.2 Bln US$2.2 Bln 4,213 5,055 5,497 Micro, Small and Middle Companies Large Corporate Total Corporate Sep-03 Jun-04 Sep-04 US Dollar indexed portfolio 51 Total loan portfolio R$ Million 15.2% 12.8% 2.1% 26,624 9, % 30,045 30, % 10,969 11,496 % Sep-04/Sep-03 Individuals +27.0% 17, % 0.5% 19,076 19,171 Corporate +9.1% Sep-03 Jun-04 Sep-04 52

27 Loan portfolio breakdown 90.4% 91.9% 92.2% R$ million Non-accrual portfolio 99.2% 26,624 30,045 30,667 AA 36.0% 39.2% 36.4% AA 96.6% 6.0% 4.7% 34.4% A 37.7% 40.9% A 1.0% 1.0% 11.6% B 8.4% 8.1% C 8.1% 6.9% 6.8% 9.6% 8.1% D-H 7.8% Sep 03 Jun 04 Sep 04 B C D-H 3Q03 3Q04 Coverage ratio of non-accrual portfolio Non-Accrual Portfolio/ Loan Portfolio Net Write-Off / Total Portfolio AA-C Loan Portfolio 53 Grupo Credicard Shareholders Restructuring Unibanco sold its 33.3% participation in Credicard and 33.3% in Orbitall. The transaction amounted to R$1,7 billion. Unibanco has kept equity in Redecard, a highly profitable company, which manages the merchants relationship. Accretive transaction to shareholders. Unibanco has its own credit card processing unit. Main issuer of private label in Brazil: 9.5 million cards. Promising partnerships and alliances with major retail chains. 54

28 Funding R$ Million Sep-04 Jun-04 Sep-03 % Q-o-Q % Y-o-Y Deposits 31,014 28,925 24, % 24.1% SuperPoupe 1, % - AUM 32,654 30,503 24, % 34.2% 64,698 59,831 49, % 31.2% 55 Funding - SuperPoupe Improving the funding mix 1,004.3 In R$ Million Yield: TR + 9.5% p.y. (3.5% above the saving account) Cost of funding: 77% of time deposits Apr/04 May/04 Jun/04 Jul/04 Aug/04 Sep/04 56

29 Capital Adequacy BIS Ratio Variation (%) Quarter 12 Months BIS Ratio at the beginning of the period Changes in risk weighted assets (0.60) (1.80) Changes in credit swap risk Net foreign exchange exposure (0.90) (2.50) Changes in market risk - interest rates (0.10) (0.10) Stockholders' equity growth BIS Ratio on September 30, Social Responsibility 58

30 Instituto Moreira Salles IMS maintains 4 Cultural Centers in Rio de Janeiro, São Paulo and Minas Gerais; Coordination of 42 art film theaters. (Espaço Unibanco / Unibanco Arteplex). In the first half of 2004: 139,000 visited the IMS Cultural Centers; Public of 1.7 million people in Espaço Unibanco/Unibanco Arteplex chains. Together, these centers constitute the largest private complex dedicated to arts and culture in Brazil 59 Social Responsibility Instituto Unibanco Target: Mainly teenagers and youngsters Formal Education Teacher s Skill Development Professional Education Employability 60

31 Social Responsibility Microinvest: a partnership between International Finance Corporation (IFC) and Unibanco; Controlling Shareholders: 75% Banco Fininvest and 25% IFC; Offers loans to micro and small entrepreneurs, between R$ and R$ 10,000.00, helping them start and consolidate their businesses. Established on October 2003; Points of sale (SP, RJ and RS): 96 Fininvest stores; 2 points of sale in poor communities: Rocinha and Jardim Ângela; 1,400 active clients, with 2.5 million in portfolio; The microfinance company that most grew in 2004 (average of 35% monthly). 61 Sustainable business Initiative led by the International Finance Corporation and a group of banks in 2002; Unibanco was the first emerging market bank to adopt the Equator Principles; Equator Principles are a set of social and environmental voluntary criteria used to evaluate and approve credit for infrastructure projects over US$ 50 million; Demonstration effect to stimulate other banks to join. Corporate loans other than Equatorregulated: procedures to evaluate and monitor environmental risks. 62

32 Sustainable business Bandeirantes Landfill Unibanco finalized in 2004 the largest landfill gas energy project in the world, becoming self producer in clean energy; Energy supply to 1,000 branches and central units in São Paulo; The plant generates 170 million KwH of electricity annually, equivalent to supply power to more than 200,000 consumers; 22 MW installed capacity; Investments of US$ 16 million. 63 For further information contact our Investor Relations Area at phone: fax: site: 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. 64