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80 years of innovation.
2
Performance Indicators
(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.
R$ Million
3Q04 2Q04 3Q03
Operating Income 556 401 428
Net income 327 305 270
Earnings per share (R$) (1) 0.23 0.22 0.20
ROAE (%) 17.8% 17.3% 16.5%
Total assets 84,062 80,011 68,066
Total loans 30,667 30,045 26,624
Deposits + Funds 64,698 59,831 49,322
Stockholders' equity 7,932 7,704 7,023
80 years of innovation.
3
9M04 9M03
1,428 1,451
908 761
0.65 0.55
16.4% 15.2%
Performance Indicators
Operating Income
Net income
Earnings per share (R$) (1)
ROAE
R$ Million
(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.
80 years of innovation.
4
R$ Million
Consolidated Results
3Q04 2Q04 3Q03
Profit from financial intermediation 1,400 1,142 1,116
(+) Fees from services rendered 829 820 685
(-) Personnel & Adm. Expenses (1,308) (1,242) (1,181)
(+/-) Other Operating Income/ Expenses (365) (319) (192)
(=) Operating Income 556 401 428
(+/-) 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 327 305 270
80 years of innovation.
5
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)
Financial Margin (Before Provision for Loan Losses) (A) 1,675 1,458 1,532
Provision for Loan Losses 275 316 416
Financial Margin (After Provision for Loan Losses) 1,400 1,142 1,116
Total Average Assets
(-) Average balance of interbank loans
(=) Adjusted total assets
(=) Adjusted total assets – Fixed assets (B)
Adjusted annualized financial margin (A / B)
82,036 75,758 67,079
15,316 12,286 9,623
66,720 63,472 57,456
63,183 59,505 54,178
11.0% 10.2% 11.8%
Note: Unadjusted net financial margin would be 8.8%, 8.4% and 10.0% in 3Q04, 2Q04 and 3Q03, respectively.
80 years of innovation.
6
Effective income tax rate
R$ Million
3Q04 2Q04 3Q03
Income before taxes and profit sharing to employees 551 419 421
Profit sharing to employees (46) (57) (59)
(A) Income before taxes and after profit sharing 505 362 362
Income Tax @ 25% and Social Contribution @ 9% (172) (123) (123)
Tax deductible dividends (interest on capital) / Permanent differences (net)
67 72 54
Non-taxable / non-deductible exchange rate fluctuation and equity income (36) 33 13
(B) Income Tax & Social Contribution for the period (141) (18) (56)
(B /A ) Effective Income Tax & Social Contribution Rate 28% 5% 15%
80 years of innovation.
7
Other Operational Income / Expenses
R$ MillionAnalysis of Q-o-Q changes
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)
80 years of innovation.
8
Securities Portfolio
Market Value Adjustment R$ Million
Held To Maturity
+ 283
Market Value
Adjustment 09/30/2004
3Q04
Market Value
Adjustment 06/30/2004
2Q04
Income Statement Impact 77 11 65 -46
Stockholders´ Equity Impact (111) 54 (165) 92
Amortized Cost
Market Value Adjustment
Securities Held to Maturity 5,338
5,621
Unrealized gains
R$ Million
80 years of innovation.
9
Fees from Services Rendered
R$ Million
Banking fees and other fees and commissions 408 403 372 Credit Cards 321 321 232
Unibanco’s cards + Redecard 214 220 148
Credicard 107 101 84 Asset management 100 96 82
Total fees from services rendered 829 820 685
3Q04 2Q04 3Q03
80 years of innovation.
10
Personnel and Administrative Expenses
3Q04 2Q04 3Q03
Personnel Expenses 527 484 491
Administrative Expenses 781 758 690
Total 1,308 1,242 1,181
Efficiency Ratio 61.2% 63.4% 58.2%
R$ Million
80 years of innovation.
11
Loan Portfolio Breakdown
Non-Accrual Portfolio
AA-C Loan Portfolio
R$ million
D-H
A
C
AA
B
8.4% 6.9% 6.8%
11.6%8.1% 8.1%
34.4%37.7% 40.9%
36.0% 39.2% 36.4%
9.6% 8.1% 7.8%
Sep 03 Jun 04 Sep 04
26,624 30,045 30,667
AA
A
B
C
D-H
90.4%
91.9% 92.2%
99.2%
96.6%
3Q03 3Q04
1.0%1.0%
6.0%
4.7%
Non-Accrual Portfolio/ Loan Portfolio
Coverage ratio of non-accrual Portfolio
Net Write-Off / Total Portfolio
80 years of innovation.
12
Loan Portfolio – Individuals
Sep-03 Sep-04Jun-04
3.9%
15.0%
10.1%
26.2%
5.1%
103.1%
1.3%
20.3%
4.8%
27.0%
R$ million
973
9,050
6,012
1,779 1,881 1,297
11,496
1,551
5,434
1,092
10,969
1,958 1,3141,976
6,248
Multiple Bank andOther Companies
Consumer FinanceCompanies
Unibanco's CreditCards
Credicard Total Individuals
80 years of innovation.
13
Loan Portfolio – Corporate
Sep-03 Sep-04Jun-04
8.7%
30.5%
-2.5%
2.3% 0.5%
9.1%
R$ million
4,213
13,361
17,574
5,055
14,021
19,076
5,497
13,674
19,171
Micro, Small and Middle Companies Large Corporate Total Corporate
80 years of innovation.
14
47%
Loan Portfolio Mix
54%50% 45%
46%50%
55%
Dec-01 Dec-02 Dec-03 Sep-04
25,827 30,66726,751 27,917
53%
Retail Wholesale
Note: Wholesale includes only large corporates
R$ Million
80 years of innovation.
15
Loan Portfolio Mix
8.5%
21.2%4.8%
0.5%
12.8%2.1%
26,62430,045 30,667
15.2%
Individuals
+27.0%
Corporate
+9.1%
% Sep-04/Sep-03
R$ Million
R$6.3 BlnUS$2.2 Bln
US Dollar indexed portfolio
17,574 19,076 19,171
9,050
10,969 11,496
Sep-03 Jun-04 Sep-04
R$5.9 BlnUS$2.0 Bln
R$6.8 BlnUS$2.2 Bln
80 years of innovation.
16
Consumer Companies (including Credicard Group)
Includes: Fininvest, Unicard, HiperCard, 50% LuizaCred, 50% PontoCred, 33.3% Credicard, 33.3% Orbitall and 31.94% Redecard.
3Q04 2Q04 3Q03
R$ Million
Contribution to Unibanco’s results
Revenues
Credit Portfolio
Provision for Loan Losses
Provision for Loan Losses / Credit Portfolio
161 150 134
5,915 5,919 3,974
5,286 4,992 3,641
188 193 199
3.6% 3.9% 5.5%
80 years of innovation.
17
Consumer Companies (without Credicard and Orbitall)
Includes: Fininvest, Unicard, HiperCard, 50% LuizaCred, 50% PontoCred and 31.94% Redecard.
3Q04 2Q04 3Q03
R$ Million
137 123 110
Revenues 4,325 4,353 2,502
Credit Portfolio 3,972 3,695 2,550
Provision for Loan Losses 155 163 167
Provision for Loan Losses / Credit Portfolio 3.9% 4.4% 6.5%
Contribution to Unibanco’s results
80 years of innovation.
18
Funding
Sep-04 Jun-04 Sep-03 %Q-o-Q
%Y-o-Y
R$ Million
Deposits 31,014 28,925 24,986 7.2% 24.1%
SuperPoupe 1,030 403 - 155.6% -
Funds 32,654 30,503 24,336 7.1% 34.2%
64,698 59,831 49,322 8.1% 31.2%
80 years of innovation.
19
Total Reserves
Insurance, Extended Warranty and Pension
R$ Million
3Q04 2Q04 3Q03
Net Premium Written + Pension Contributions 1,039 1,163 753
Insurance and Pension Reserves 5,106 4,847 3,682
Net Income 76 79 58
Combined Ratio 99.4% 99.6% 103.9%Loss Ratio 44.1% 50.5% 58.4%
3,6824,847 5,106
5.3%31.6%
Insurance + Warranty
+26.8%
Private Pension
+42.2%
%
Sep-04/Sep-03
2,8403,770 4,039
8421,077 1,067
Sep-03 Jun-04 Sep-04
38.7%
80 years of innovation.
20
Macroeconomic Perspectives
GDP growth 4.2% 4.0%
Fx Rate (R$ / US$) 2.90 3.00
SELIC (end of the year) 17.75% 15.50%
IPC-A 7.1% 6.1%
2004 2005
80 years of innovation.
21
Unibanco Guidelines 2004
Loan Portfolio
CorporateLargeSmall / Medium
IndividualsMultiple Bank and Other Companies
Consumer FinanceUnibanco’s Credit Cards
Administrative Expenses
Fee Income
Credicard
Sept-04 / Sept-03
15%
9.1%2.3%
30.5%
27%15.0%
26.2%103.1%
11%
16%
GUIDANCEAug 13, 2004
18%
9%5%
22%
30%22%
23%54%
9%
12-16%
NEWGUIDANCE
9%
14-16%
15%
11%2%
37%
15%20%
34%107%
20.3%
80 years of innovation.
Credicard – Transaction background
7.5 million credit card portfolio places Unibanco as a leading player
in this segment.
Unibanco has its own credit card processing unit.
Main issuer of private label in Brazil: 9.5 million cards.
Accretive transaction to shareholders.
Unibanco has kept equity in Redecard, a highly profitable company,
which manages the merchants’ relationship.
Promising partnerships and alliances with major retail chains.
80 years of innovation.
Credicard: Before and After the Transaction
Before
After
33.3%
33.3%
33.3%
50%
50%
80 years of innovation.
Orbitall: Before and After the Transaction
Before
After
33.3%
33.3%
33.3%
100%
80 years of innovation.
(99) (63) (162)
(90) (10) (100)
1.354 67 1.421
Price / Book
Price / Book 1.3 – 1.4Price / Earnings
Credicard Orbitall Total
Transaction amount 1,543 140 1,683(99) (63) (162)
(-) Allowance for future contingencies (90) (10) (100)
Pre-tax non-operational result 1,354 67 1,421
Price / Book value 15.6 2.2 10.4Price / Earnings 18.4 9.5 17.1
Price / Book valuePrice / Earnings 8.1
Shareholders’ Restructuring – Credicard Group
(-) Book value
Transaction multiples
Unibanco’s multiples (Unit @ R$15.15)
R$ Million
80 years of innovation.
29
Transaction impacts – Estimates for 2005
Cash proceeds + R$1.7 billion
46% reduction in goodwill balance - R$778 million (Bandeirantes)
Improvement in goodwill/equity ratiofrom 21.4% to 11.4% (as of Sep/04)
Reduction in investments account - R$162 million
Loan portfolio reduction - R$1.3 billion
Interest income from transaction proceeds
+ R$284 million (CDI @16.6% 2005)
Reduction of goodwill amortization +R$95 million
Credicard / Orbitall equity pick-up elimination
- R$112 million
Maintenance of Redecard equity pick-up
R$ 102 million
Balance Sheet P&L
80 years of innovation.
Estimated 2005 impacts
R$ million
Additional interest income (interbank rate (CDI) @ 16.6% 2005) 284
Elimination of goodwill amortization 95
Equity pick-up lost (2004 + interbank rate (CDI) @16.6% 2005) (112)
Income tax (129)
Incremental net income for 2005 138
ROE improvement 1.5%
80 years of innovation.
32
CredicardUnibanco’s cards*
September - 2004December-1999
Credit cards issued (million cards)
* Unicard, HiperCard and Fininvest
2.0
4.1
7.5 7.6
7.5 million credit cards
9.5 million private label cards
High potential retail client base (Ponto Frio and Magazine Luiza)
Credit Card business
Unibanco’s portfolio, as of September 2004:
R$ million
80 years of innovation.
33
Unibanco and Credicard’s revenues comparison
Credicard 100.0 100.0 100.0 100.0
Unibanco’s cards 44.3 45.3 48.1 78.0
Private Label Unibanco 10.9 14.3 16.3 20.9
Total Unibanco 55.2% 59.6% 64.4% 98.9%
3Q02 3Q03 3Q043Q01
%
80 years of innovation.
34
Market total: Abecs
Credicard
Banco do Brasil
Itaú
Bradesco
UBB = Visa + MasterCard
14.2%
7.6%
13.9%
12.7%
10.8%
Billing – Credit cards – without HiperCard
23.0%
21.0%
19.0%
17.0%
15.0%
13.0%
11.0%
9.0%
7.0%
5.0%
80 years of innovation.
35
Credicard
Banco do Brasil
Itaú
Bradesco
UBB = Visa + MasterCard + HiperCard
14.2%
11.7%
13.9%12.7%
10.8%
Billing – Credit cards – with HiperCard
Market total: Abecs
23.0%
21.0%
19.0%
17.0%
15.0%
13.0%
11.0%
9.0%
7.0%
5.0%
80 years of innovation.
Total Cards Issued – Sept/04
Before After
TOTAL
Cards Issued (thousand) 4,206 2,621 8,486 1,422 305 2,453 19,494 17,041
Hipercard - 2,621 - - - - 2,621 2,621
Visa / MC 4,206 - 708 - - 2,453 7,368 4,914
Private Label - - 7,779 1,422 305 - 9,505 9,505
Billings (R$ million) 4,603 3,093 2,251 479 122 4,599 15,146 10,548
Loan Portfolio (R$ million) 1,400 891 1,071 156 34 1,171 4,723 3,553
80 years of innovation.
37
For further information contact our Investor Relations Area atphone: 5511-3097-1980
fax: 5511-3813-6182email: investor.relations@unibanco.com
site: 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.
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