Conference Call 2006 Results

transcript

Conference Call

2006 Results

February 14, 2007

Banco Itaú Holding Financeira S.A.

Highlights

2. Effects of BankBoston (BKB) acquisition in Brazil, Chile and Uruguay• Payment – Capital increase in Itaú (R$ 5,954 million), transferring common and preferred shares to

Bank of America (7.44% of the total capital of Itaú).• Effects of BKB acquisition amounted R$ 2,171 million, net of tax effects.

1.Results: • Q4/06: Recurring Net Income of R$ 1,628 million, 2.3% increase compared to Q3/06; annualized

ROE of 28.8%. (Full Year 2006: Net Income of R$ 6,195 million and ROE of 32.6%).• Q4/06: Net Income of R$ 1,280 million (Year 2006: Net Income of R$ 4,309)

3. 38.2% growth in credit portfolio during 2006, including BKB, and of 24.7%, not considering BKB.

• Vehicles: 64.7% in 2006 and of 14.3% in Q4/06.• Small and Medium Sized Companies: 59.9% (including BKB), 22.4% (excluding BKB) and 3.5% in

Q4/06.• 5.3% delinquency ratio as of December 31, 2006, stable Q-Q.

Non-recurring Effects – After Tax

R$ Million

4th Q/06 3rd Q/06 2006 2005Recurring Net Income 1,628 1,592 6,195 5,443 Non-recurring effects 1 60 286 429 (192) Result of BKB Brazil 2 - (43) (145) - Net Income without BKB Brazil acquisition effects 1,687 1,835 6,480 5,251 BKB Acquisition effects (408) (1.764) (2,171) - Net Income 1,280 71 4,309 5,251

1 For more details, see page 4 of Management Discussion and Analysis Report.

2 For more details, see Notes to Financial Statements 2a and 21i.

Highlights 4th Q/06 3rd Q/06 Variation 2006 2005 Variation

Net Income 1,280 71 1,702.1% 4,309 5,251 -17.9%

Recurring Net Income 1,628 1,592 2.3% 6,195 5,443 13.8%

Recurring Net Income per share (R$) 1.38 1.39 -1.2% 5.44 4.84 12.4%

Stockholders’ Equity 23,564 21,693 8.6% 23,564 15,560 51.4%

Recurring ROE / Average Equity annualized (%) 28.8% 32.5% -370 b.p. 32.6% 36.6% -400 b.p.

Market Capitalization 1 92,270 76,453 20.7% 92,270 61,935 49.0%

Solvency Ratio (%) 17.2% 16.8% 40 b.p. 17.2% 17.0% 30 b.p.

Efficiency Ratio 2 (%) 47.4% 49.9% -250 b.p. 47.6% 50.3% -270 b.p.

Delinquency Ratio (%) 5.3% 5.2% 0.1 p.p.

R$ Million (Except where indicated)

1 Based on the average quotation of the last trading day in the period. It includes the number of shares related to BKB Chile and Uruguay acquisition.

Itaú Holding Pro Forma

4th Q/06 3rd Q/06 Variation 2006 2005 Variation

Managerial Financial Margin 4,747 4,328 9.7% 16,958 13,272 27.8%

• Banking Operations 4,191 4,043 3.7% 15,354 12,016 27.8%

• Treasury 429 149 188.1% 1,056 600 76.0%

• Management of Foreign Exchange Risk from Investments Abroad 127 137 -6.9% 547 656 -16.5%

Result from Loan Losses (1,475) (1,350) 9.2% (5,302) (2,840) 86.7%

Banking Service fees 2,456 2,286 7.4% 9,097 7,738 17.6%

Non Interest Expenses (3,371) (3,246) 3.9% (12,346) (10,459) 18.0%

Recurring Net Income 1,628 1,592 2.3% 6,195 5,443 13.8%

Average Stockholders Equity 22,629 19,624 15.3% 18,998 14,883 27.6%

ROE annualized (%) 28.8% 32.5% -370 b.p. 32.6% 36.6% -400 b.p.

Credit Operation by Client Type

1 Rural and Mortgage Loans – Loans linked with the balances of Demand and Savings Deposits.

With BKB Variation

Dec 31, 06 Sep 30, 06 Dec - SepDec/06 – Dec/05

Individuals 40,487 37,571 7.8% 42.2%

• Credit Cards 9,188 7,976 15.2% 27.3%

• Personal Credit 13,284 13,829 -3.9% 28.7%

• Vehicles 18,014 15,766 14.3% 64.7%

Company Loans 47,263 46,558 1.5% 36.0%

• Small and Medium Sized 20,446 19,762 3.5% 59.9%

• Corporate 26,816 26,796 0.1% 22.1%

Mandatory Credit 1 5,898 5,740 2.8% 29.9%

Total Loans 93,648 89,869 4.2% 38.2%

Not considering BKB contribution, total loans reached R$ 84,497 million, an increase of 24.7% in 2006.

Credit Portfolio Break down

34.3% 36.4% 38.9% 41.5% 42.0% 42.8% 45.5% 41.8% 43.2%

18.2% 18.4% 19.0% 18.7% 18.9% 19.1% 18.8% 22.0% 21.8%8.5% 7.6% 7.2% 6.7% 6.3% 6.2% 6.4% 6.3%

39.0% 37.6% 34.8% 32.9% 32.4% 31.9% 29.6% 29.8% 28.6%

Dec-04 Mar-05 Jun-05 Sep-05 Dec-05 Mar-06 Jun-06 Sep-06 Dec-06

Individuals Small and Medium-Sized CompaniesMandatory Loans Corporate

Delinquency and Coverage Ratios

Coverage Ratio (*)

168%164%

192%203%220%

Dec-04 Jun-05 Dec-05 Jun-06 Dec-06

(*) Provision for loan losses / Credits overdue for more than 60 days, which are not accrued.

Delinquency Ratios

Delinquency Ratio - GlobalDelinquency Ratio - IndividualsDelinquency Ratio - Companies

1.6%2.1% 2.2%

5.1% 5.2% 5.3%

8.1% 8.3% 8.1%

Jun/06 Sep/06 Dec/06

Delinquency Ratio (NPL) by Segment

R$ Million

Dec 31, 06

Sep 30, 06

NPLCredit

Portfolio

NPL Ratio

Itaubanco 2,614

35,985 7.3% 7.5%

Branch Banking 2.355 31,031 7.6% 7.7%

Credit Cards – Account Holders 260 4,954 5.2% 5.9%

Itaú BBA 150

21,334 0.7% 0.1%

Itaucred 1,662

26,829 6.2% 6.4%

Vehicles 936 19,316 4.8% 5.0%

Credit Cards – Non Account Holders 235 4,285 5.5% 6.6%

Taií 492 3,228 15.2% 13.9%

Total 4,426

84,148 5.3% 5.2%

Funding

1 Includes Repurchase Agreement – Own Issue Securities

Dec 31,

06Sep 30,

06 Dec 31,

Variation (%)

Dec/06-Sep/06

Dec/06-Dec/05

Deposits 1 89,522 80,949 65,556 10.6% 36.6%

Investment Funds 167,866 166,822 112,573 0.6% 49.1%

Managed Portfolios 11,942 10,044 7,714 18.9% 54.8%

Technical Provisions regarding to Insurance, Pension Plans and Capitalization

19,036 17,534 14,640 8.6% 30.0%

Subtotal – Clients 288,367 275,348 200,482 4.7% 43.8%

Foreign Exchange Portfolio 13,124 21,941 7,828 -40.2% 67.7%

Funds from Acceptances and Securities Issued 7,541 7,568 4,961 -0.4% 52.0%

On-lendings 5,338 5,496 4,305 -2.9% 24.0%

Repurchase Agreement – Third Part Portfolio 8,353 5,477 4,520 52.5% 84.8%

Subtotal - Market 34,355 40,482 21,614 -15.1% 59.0%

Total 322,722 315,831 222,096 2.2% 45.3%

R$ Million (except where indicated)

Banking Service Fees

Funds management 1 483 539 -10.4% 1,986 1,688 17.7%

Current account services 410 385 6.4% 1,549 1,385 11.8%

Credit Cards 577 525 9.9% 2,104 1,904 10.5%

Credit operations and guarantees provided 486 423 14.8% 1,689 1,259 34.2%

Collection services 250 219 14.4% 909 839 8.3%

Other 250 195 28.4% 859 662 29.7%

Total 2,456 2,286 7.4% 9,097 7,738 17.6%

1 Investment Funds and Consortium.

Not considering BKB, Banking Service Fees reached R$ 8,718 million in 2006, increase of 12.7% compared to 2005.

Non Interest Expenses

Personnel Expenses 1,251 1,260 -0.7% 4,824 4,036 19.5%

Other Administrative Expenses 1,681 1,523 10.4% 5,835 4,946 18.0%

Other Operating Expenses 269 332 -19.1% 1,240 1,141 8.7%

Tax Expenses (CPMF and Others) 1 171 131 30.6% 447 337 32.6%

Total 3,371 3,246 3.8% 12,346 10,459 18.0%

1 It does not include PIS, COFINS and ISS

Not considering BKB, Non Interest Expenses reached R$ 11,470 million in 2006, increase of 9.7% compared to 2005.

50.8% 50.5% 50.1%47.2% 45.7%

49.9%47.4%

1Q/05 2Q/05 3Q/05 4Q/05 1Q/06 2Q/06 3Q/06 4Q/06

Efficiency Ratio 1

1 For further details on the criteria used, see slide 4.

Segmentation (Pro forma)

ItaucredItaú BBAItaubanco

Banking

Cards – Current Account Holders

Insurance, Pension Plans

and Capitalization

Investment Funds and

Managed Portfolio

Corporation

Corporate Operations

Investment Banking

Vehicles

Cards – Non Current Account

Holders

Taií, FIC (CBD) and FAI (LASA)

NB: The organization chart of Itaucred segment reflects, chiefly, the transactions carried out through channels intended for non current account holders.

Highlights of Pro Forma Segments

Itaubanco Itaú BBA Itaucred Corporation Itaú 1

4th Quarter of 2006

Recurring Net Income 1,084 297 202 45 1,628

Allocated Capital Tier I 12,244 5,754 2,780 2,787 23,564

RAROC in the Quarter (% p.y.) 36.3% 21.3% 31.7% 5.5% 28.8%

Total Assets 159,178 61,869 25,844 6,253 209,691

3rd Quarter of 2006

Recurring Net Income 793 337 185 277 1,592

RAROC in the Quarter (% p.y.) 29.1% 28.0% 33.8% 64.1% 32.5%

Total Assets 158,090 53,803 22,613 5,346 206,935

1 It does not represent the sum of the parts, because there are transactions between the segments eliminated in the consolidated figures only.

Highlights of Pro Forma Segments

1 It does not represent the sum of the parts, because there are transactions between the segments eliminated in the consolidated figures only.

Itaubanco Itaú BBA Itaucred Corporation Itaú 1

Recurring Net Income 3,655 1,335 649 557 6,195

RAROC (% p.y.) 35.9% 27.7% 29.8% 30.8% 32.6%

Total Assets 159,178 61,869 25,844 6,253 209,691

Recurring Net Income 3,179 1,242 525 497 5,443

RAROC (% p.y.) 43.1% 34.2% 39.8% 19.5% 36.6%

Total Assets 117,002 43,256 15,955 4,497 152,435

Itaubanco

• Organic growth of classic business lines;• 30.6% assets growth (without BKB) and 146 new branches and 969

new ATMs, not considering the 66 branches and 104 ATMs of BKB. • Expansion of Insurance, Pension Plans and Capitalization business areas;

• Technical provisions increased 30.6%.• Efficiency ratio maintenance (at the same basis);

• Efficiency ratio of 51.2% and 54.1% in 2006 and 2005, respectively.• 25% growth on credit portfolio.

• The credit portfolio grew 13.7% and 38.8%, not considering BKB and

considering it, respectively.• Moderate growth in delinquency ratio are expected as a consequence of

targeting operations with higher margins and higher risks (personal loans

and credit cards).• Delinquency ratio of 7.3% in Dec 31, 2006 and of 6.7% in June of 2006.

The 2006 Outlook of Itaubanco broadcasted in 2005 Results Conference Call.

Itaú BBA

• Focus on Investment Banking and banking services segments;• 37.9% growth in banking service fees.

• Continuous improvement of market risk management.• 26.8% increase in Treasury Financial Margin.

The 2006 Outlook of Itaú BBA broadcasted in 2005 Results Conference Call.

Itaucred

• Growth of vehicles financing, developing new segments and presence in regions where penetration is

reduced;•67.7% growth in the balance of vehicles financing and leasing.•12 Commercial Platforms opened and 4,569 new car dealers registered in 2006.

• Consolidation and growth of partnerships with CBD (FIC) and Lojas Americanas (FAI);•48.2% increase in credit portfolio of FIC and 164.7% of FAI.

• Growth of Taií’s outlets number (FIT);•118 new outlets, increase of 90.8% from 2005.

• New products launch through FIC, FIT and FAI;• Co-branded card, Private Label, Personal Loan - Card, Installments and Home Insurance.

• Growth of operations with non-account holders;•Itaucred income correspond to 10.5% of Itaú’s income, with approximately 2.7 million new non

account holders customers. • Growth of 30% in credit portfolio.

•59.8% growth in credit portfolio• Expectation of moderate growth of delinquency ratio as a consequence of targeting operations with

higher margins and higher risks (Taií and credit cards).• Delinquency ratio was 6.2% and 7.1% in Dec 31, 06 and Jun 30, 06, respectively.

The 2006 Outlook of Itaucred broadcasted in 2005 Results Conference Call.

Itaubanco

2007 Outlook

• Small reduction in delinquency ratio.

• Efficiency ratio improvement.

• 20% - 25% growth in credit portfolio.

• 10% growth in Banking Service Fees (15% in Itaú Holding).

• Opening of 130 branches.

• Expansion the operations in Argentina, Chile and Uruguay.

Itaú BBA

2007 Outlook

• Focus on Investment Banking activities.

• Continuous improvement of market risk management.

• Continuous improvement of service fees.

• Consolidation of Corporate clients portfolio in Argentina, Chile and Uruguay.

• Slight reduction in the credit portfolio.

Itaucred

2007 OutlookTaií

• 100 new sales points.

• 50% growth in credit portfolio (not including payroll loans).

• Delinquency ratio improvement.

• On the 4Q/07, we wait to reach break-even of the three operation (FIC, FAI and FIT).

Vehicles

• 40% growth in vehicles financing and leasing portfolio.

• Maintenance of delinquency ratio.

Credit Card

• 20% growth in billing.

• Maintenance of delinquency ratio.

Net Income and Net Income per Share

Recurring Net Income per share R$Recurring Net Income

Note: The Net Income per Share was adjusted to reflect the stock split of 900% that occurred in oct/05.

1,2831,383 1,352 1,425 1,397

1,579 1,592 1,628

1,0301.19 1.21 1.29 1.32 1.39 1.381.33

1.000.91

4Q/04 1Q/05 2Q/05 3Q/05 4Q/05 1Q/06 2Q/06 3Q/06 4Q/06

2.5R$ million

25February 14, 2007

Conference Call

2006 Results

Conference Call 2006 Results

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