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February 22, 2006
Conference Call about the Results of 4th Quarter of 2005
2
Banco Itaú Holding Financeira S.A.
Highlights
3. Additional Provisions: Increase of the Exceeding Provisions for Loan Losses of R$ 370 million (R$ 170 million
in the quarter), totaling R$ 1,370 million; Reduction of R$ 30 million of Additional Provisions for Securities Portfolio totaling R$
370 million (reduction in 4th Q/05);
1. Results: 4th Q./05: Net Income of R$ 1,425 million with increase of 5.4% q-o-q; ROE annualized
42.5%; 2005: Net Income of R$ 5,251 million with increase of 39.1% y-o-y; ROE annualized
35.3%;
4. Non-performing Loans Ratio: 3.5% (Loans overdue for more than 60 days / Total Loans)
2. Growth of credit portfolio of 27.2% y-o-y and 10.0% q-o-q. Credit Cards: 40.1% y-o-y and 21.8% q-o-q. Vehicles: 80.1% y-o-y and 18.0% q-o-q.
5. Solvency Ratio (BIS Ratio): • High level of BIS ratio - 17.0%.
3
Banco Itaú Holding Financeira S.A.
Perspectives of Banco Itaú Holding for 2005 stated in conference call on 2004 results.
1. Focus on increasing the credit portfolio to Individuals and to Small and Medium Sized Companies;
4
Banco Itaú Holding Financeira S.A.
Growth of 27.2% of the credit portfolio y-o-y.• Individuals: 57.0% y-o-y.• Small Business and Middle Market: 31.6% y-o-y.
Breakdown of the Credit Portfolio
3
23.0% 28.7% 34.3%42.3%
9.6%
15.5%18.2%
18.9%
9.5%
9.1%
8.5%
57.8%46.8%
39.0%32.1%
6.7%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Dec/02 Dec/03 Dec/04 Dec/05
Individuals Small Business and Middle Market Restricted Loans Corporate
5
Banco Itaú Holding Financeira S.A.
Perspectives of Banco Itaú Holding for 2005 stated in conference call on 2004 results.
1. Focus on increasing the credit portfolio to Individuals and to Small and Medium Sized Companies;
2. Consolidation of initiatives related to consumer loans;
6
Banco Itaú Holding Financeira S.A.
5,002
9,73411,5121,328 1,345
2,439
2,555
2,779
3,301491
777
860
1,035
1,139
1,220
4,773 5,392 6,2728,395
7,381
2,351
1,241
92
432
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
3/31/2004 6/30/2004 9/30/2004 12/31/2004 3/31/2005 6/30/2005 9/30/2005 12/31/2005
Vehicles Credit Cards Taií Payroll Loans
Itaucred
Growth of 84.5% y-o-y of Net Income pro forma of Itaucred y-o-y, totaling R$ 525 million.
Credit Portfolio Own Stores
5
7
Banco Itaú Holding Financeira S.A.
Perspectives of Banco Itaú Holding for 2005 stated in conference call on 2004 results.
1. Focus on increasing the credit portfolio to Individuals and to Small and Medium Sized Companies;
2. Consolidation of initiatives related to consumer loans;
3. Costs constant in real terms, which will lead to an improvement in the efficiency ratio (on the same basis);
8
Banco Itaú Holding Financeira S.A.
4th Q/05 3rd Q/05 Variation 2005 2004 Variation
Personnel Expenses (1) 1,046 1,062 -1.5% 4,034 3,320 21.5%
Other Administrative Expenses 1,422 1,245 14.2% 4,946 4,308 14.8%
Other Operating Expenses 377 220 71.3% 1,141 1,164 -2.0%
Tax Expenses (CPMF / Others) (2) 65 79 -18.2% 337 241 39.4%
Total 2,909 2,606 11.6% 10,457 9,033 15.8%
(-) Itaucred (3) (357) (331) 8.0% (1,097) (462) 137.5%
(-) Orbitall (198) (129) 53.5% (632) (270) 134.3%
Adjusted Total 2,354 2,146 9.7% 8,728 8,302 5.1%
R$ Million
(*) Based in managerial data.
(1) In 3rd Q/05 includes R$ 93 million related to the collective convention of work. (2) Do not includes PIS, COFINS and ISS.
(3) Includes non account holders credit cards holders and Taií.
Non-Interest Expenses*
Elevated efficiency ratio at 50.3% 2005 compared to 53.9% in the prior year.
7
9
Banco Itaú Holding Financeira S.A.
1. Focus on increasing the credit portfolio to Individuals and to Small and Medium Sized Companies;
2. Consolidation of initiatives related to consumer loans;
3. Costs constant in real terms, which will lead to an improvement in the efficiency ratio (on the same basis);
4. Keeping the current growth expectations, we visualize that the present levels of ROE will continue steady;
Perspectives of Banco Itaú Holding for 2005 stated in conference call on 2004 results.
10
Banco Itaú Holding Financeira S.A.
28.8%
33.1%
29.7% 29.2%
35.3%
0%
5%
10%
15%
20%
25%
30%
35%
40%
2001 2002 2003 2004 2005
ROE Evolution (%) *
Growth of 610 b.p. y-o-y
(*) This quarter, we have improved the calculation for the return on equity (ROE) and introduced the concept of Annualized Return on Average Equity, where the closing balance of equity has been replaced by its average balance. The average quarterly balance is obtained by the arithmetic average between the balance of the last day of the current quarter and that of the previous quarter. The average balance accumulated for the year is obtained by the arithmetic average of the balances of the last day of the last five quarters ( (Dec + Mar + Jun + Sep + Dec) / 5 ).
9
11
Banco Itaú Holding Financeira S.A.
1. Focus on increasing the credit portfolio to Individuals and to Small and Medium Sized Companies;
2. Consolidation of initiatives related to consumer loans;
3. Costs constant in real terms, which will lead to an improvement in the efficiency ratio (on the same basis);
4. Keeping the current growth expectations, we visualize that the present levels of ROE will continue steady;
5. New Segment – starting in next quarter, disclosure of a new segment to reflect the performance of business areas related to consumer loans;
Perspectives of Banco Itaú Holding for 2005 stated in conference call on 2004 results.
12
Banco Itaú Holding Financeira S.A.
1. Focus on increasing the credit portfolio to Individuals and to Small and Medium Sized Companies;
2. Consolidation of initiatives related to consumer loans;
3. Costs constant in real terms, which will lead to an improvement in the efficiency ratio (on the same basis);
4. Keeping the current growth expectations, we visualize that the present levels of ROE will continue steady;
5. New Segment –starting in next quarter, disclosure of a new segment to reflect the performance of business areas related to consumer loans;
6. Perspectives of increasing of the non-performing loans ratio, due to the strategy of targeting operations with higher margins and higher risks.
Perspectives of Banco Itaú Holding for 2005 stated in conference call on 2004 results.
13
Banco Itaú Holding Financeira S.A.
3.53.3
3.02.92.9
5.6 5.65.8
5.2 5.3
0.9 0.81.1
1.3 1.3
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
Dec-04 Mar-05 Jun-05 Sep-05 Dec-05
NPL Ratio – Global NPL Ratio – Individuals
NPL Ratio – Business
192%200%203%
221%220%
0%
50%
100%
150%
200%
250%
Dec-04 Mar-05 Jun-05 Sep-05 Dec-05
Non-performing Loans Ratio and Coverage Ratio
NPL Ratio (*) Coverage (*)
(*) Provision for Loan Losses / Total Non-performing Loans(Loans overdue for more than 60 days)
(*) Loans overdue for more than 60 days
14
Banco Itaú Holding Financeira S.A.
1. Focus on increasing the credit portfolio to Individuals and to Small and Medium Sized Companies;
2. Consolidation of initiatives related to consumer loans;
3. Costs constant in real terms, which will lead to an improvement in the efficiency ratio (on the same basis);
4. Keeping the current growth expectations, we visualize that the present levels of ROE will continue steady;
5. New Segment – Disclosure, starting in next quarter, of a new segment to reflect the performance of business areas related to consumer loans;
6. Perspectives of increasing of the non-performing loans ratio, due to the strategy of targeting operations with higher margins and higher risks.
Perspectives of Banco Itaú Holding for 2005 stated in conference call on 2004 results.
15
Banco Itaú Holding Financeira S.A.
R$ Million
Itaú Holding (pro forma)
(*) Evolution considerably influenced by the acquisition of Orbitall and Credicard. Impact of R$ 30 million between the 3rd and the 4th quarters of 2005 and of R$ 545 million between the years of 2004 and 2005.
4th Q/05 3rd Q/05 Variation 2005 2004 Variation
Managerial Financial Margin 3,650 3,331 9.6% 13,272 10,634 24.8%
• Banking Operations 3,351 3,104 8.0% 12,017 9,231 30.2%
• Treasury / Management of Foreign Exchange Risk from Investments Abroad - net of tax effects
299 227 32.0% 1,254 1,403 -10.6%
Result from Loan Losses (971) (784) 24.0% (2,840) (935) 203.7%
Service Fees (*) 2,121 1,971 7.6% 7,738 6,166 25.5%
Non-Interest Expenses (2,909) (2,606) 11.6% (10,459) (9,034) 15.8%
Extraordinary Result - - 0.0% (192) (1,094) -82.5%
Net Income 1,425 1,352 5.4% 5,251 3,776 39.1%
Average Equity 15,394 15,128 1.8% 14,883 12,917 15.2%
ROE Annualized (%) 42.5% 40.8% 1.7 p.p. 35.3% 29.2% 6.1 p.p.
16
Banco Itaú Holding Financeira S.A.
Dec 31, 05 Sep 30, 05 Dec 31, 04Dec 05 - Sep05
Dec 05 - Dec04
Individuals 28,691 25,593 18,272 12.1% 57.0% • Credit Card 7,216 5,926 5,150 21.8% 40.1%
• Personal Loans 10,320 10,211 6,926 1.1% 49.0%
• Vehicles 11,155 9,456 6,196 18.0% 80.1%Businesses 34,524 31,745 30,480 8.8% 13.3%
• Small Businesses and Middle Market 12,784 11,494 9,718 11.2% 31.6%
• Corporate 21,740 20,251 20,763 7.4% 4.7%
Restricted Loans (*) 4,541 4,278 4,523 6.2% 0.4%
Total - Loan Portfolio 67,756 61,616 53,275 10.0% 27.2%
R$ Million
Credit Portfolio
(*) Rural Loans and Mortgage Loans – Loans linked to the availability of Demand and Savings deposits..
17
Banco Itaú Holding Financeira S.A.
Dec 31, 05 Sep 30, 05 Dec 31, 04Dec 05 - Sep05
Dec 05 - Dec04
Individuals 28,691 25,593 18,272 12.1% 57.0% • Credit Card 7,216 5,926 5,150 21.8% 40.1%
• Personal Loans 10,320 10,211 6,926 1.1% 49.0%
• Vehicles 11,155 9,456 6,196 18.0% 80.1%Businesses 34,524 31,745 30,480 8.8% 13.3%
• Small Businesses and Middle Market 12,784 11,494 9,718 11.2% 31.6%
• Corporate 21,740 20,251 20,763 7.4% 4.7%
Restricted Loans (*) 4,541 4,278 4,523 6.2% 0.4%
Total - Loan Portfolio 67,756 61,616 53,275 10.0% 27.2%
R$ Million
(*) Rural Loans and Mortgage Loans – Loans linked to the availability of Demand and Savings deposits..
Credit Portfolio
18
Banco Itaú Holding Financeira S.A.
Dec 31, 05 Sep 30, 05 Dec 31, 04Dec 05 - Sep05
Dec 05 - Dec04
Individuals 28,691 25,593 18,272 12.1% 57.0% • Credit Card 7,216 5,926 5,150 21.8% 40.1%
• Personal Loans 10,320 10,211 6,926 1.1% 49.0%
• Vehicles 11,155 9,456 6,196 18.0% 80.1%Businesses 34,524 31,745 30,480 8.8% 13.3%
• Small Businesses and Middle Market
12,784 11,494 9,718 11.2% 31.6%
• Corporate 21,740 20,251 20,763 7.4% 4.7%
Restricted Loans (*) 4,541 4,278 4,523 6.2% 0.4%
Total - Loan Portfolio 67,756 61,616 53,275 10.0% 27.2%
R$ Million
(*) Rural Loans and Mortgage Loans – Loans linked to the availability of Demand and Savings deposits..
Credit Portfolio
19
Banco Itaú Holding Financeira S.A.
4th Q/05 3rd Q/05 Variation 2005 2004 Variation
Banking Product (1) 4,042 3,694 9.4% 14,390 10,180 41.4%
Adjusted Results from Loan and Lease
Losses (2) (801) (734) 9.3% (2,605) (841) 209.7%
Adjusted Banking Product 3,240 2,960 9.5% 11,785 9,339 26.2%
Average of Credit Operations (3) 56,124 52,252 7.4% 51,702 40,932 26.3%
Adjusted Banking Product / Average of Credit Operations annualized
23.1% 22.7% 0.4 p.p. 22.8% 22.8% 0.0 p.p.
R$ Million
Contribution of Credit Portfolio
(1) Managerial Financial Margin + Banking Service Fees with operations of credit and credit cards – Taxes Expenses for PIS and COFINS.(2) Results from Loan and Lease Losses + Revision of classification (operations with real estate security) + Excess provision.(3) Average balance of credit portfolio net of non-performing operations.
20
Banco Itaú Holding Financeira S.A.
R$ Million
(1) Asset Management and Consortium.
Service Fees
4th Q/05 3rd Q/05 Variation 2005 2004 Variation
Management of Resources (1) 430 445 -3.2% 1,688 1,411 19.6%
Current Account Services 375 351 6.9% 1,429 1,230 16.1%
Credit Cards 539 470 14.7% 1,904 1,162 63.9%
Credit Operations and Guarantees Provided
371 320 16.0% 1,259 916 37.5%
Collection Services 220 216 1.8% 839 866 -3.2%
Other 185 169 9.5% 618 580 6.6%
Total 2,121 1,971 7.6% 7,737 6,165 25.5%
21
Banco Itaú Holding Financeira S.A.
53.9%50.3%
2004 2005
44.0% 40.7%
58.9%54.3% 56.8%
48.0% 49.8% 50.8% 50.5% 50.1%
1st Q/04 2nd Q/04 3rd Q/04 4th Q/04 1st Q/05 2nd Q/05 3rd Q/05 4th Q/05
46.6% 43.8% 47.0%
39.9% 41.2% 40.3%40.6%40.9%
Efficiency Ratio– International
Efficiency Ratio
19
The blue bars indicate the efficiency ratio calculated using the international methodology.
The dashed red line indicates the efficiency ratio calculated by most of Brazilian banks.
21
Efficiency Ratio– National
22
Banco Itaú Holding Financeira S.A.
Net Income 4th Q/05 3rd Q/05 Variation 2005 2004 Variation
Consolidated 1,425 1,352 5.4% 5,251 3,776 39.1%
R$ MillionNet Income per segment (pro forma)
23
Banco Itaú Holding Financeira S.A.
Itaú
ItaucredItaú BBAItaubanco
Banking
Credit Cards (Account Holders)
Insurance, Pension Plans and
Capitalization
Mutual Funds and Managed Portfolio
Corporation
Corporate Operations
&
Investment Banking
Vehicles
Credit Cards (Non-Account Holders)
Taií
Segmentation (pro forma)
24
Banco Itaú Holding Financeira S.A.
Net Income 4th Q/05 3rd Q/05 Variation 2005 2004 Variation
Itaubanco 888 785 13.1% 3,179 3,218 -1.2%
Itaú BBA 379 287 32.2% 1,242 829 49.9%
Itaucred 92 120 -23.6% 525 285 84.5%
Corporation 66 160 -58.7% 305 (555) 154.9%
Consolidated 1,425 1,352 5.4% 5,251 3,776 39.1%
R$ MillionNet Income per segment (pro forma)
25
Banco Itaú Holding Financeira S.A.
Net Income 4th Q/05 3rd Q/05 Variation 2005 2004 Variation
Itaubanco
Itaubanco - Banking 536 534 0.3% 1,954 2,428 -19.5%
- Banking Operations 1,646 1,624 1.4% 6,288 5,450 15.4%
- Treasury / Management of Foreign Exchange Risk from Investments Abroad - net of tax effects
55 131 -58.5% 534 1,016 -47.5%
- Exceeding Provision (45) 23 -296.9% (154) (94) 63.7%
Credit Card - Account Holders 144 96 49.5% 489 213 129.3%
Insurance, Pension and Capitalization 160 114 40.1% 547 451 21.1%
Portfolio under management and Mutual Funds
48 40 18.9% 189 125 51.4%
Net Income Itaubanco 888 785 13.1% 3,179 3,218 -1.2%
Itaú BBA 379 287 32.2% 1,242 829 49.9%
Itaucred 92 120 -23.6% 525 285 84.5%
Corporation 66 160 -58.7% 305 (555) 154.9%
Consolidated 1,425 1,352 5.4% 5,251 3,776 39.1%
*
*
(*) To cover the expense for full amortization of goodwill from investments made in 2004 (accounted as extraordinary results at Corporation), we recognized in the income of period, the surplus of securities (accounted as net interest margin at Itaubanco).
R$ MillionNet Income per segment (pro forma)
26
Banco Itaú Holding Financeira S.A.
Net Income 4th Q/05 3rd Q/05 Variation 2005 2004 Variation
Itaubanco 888 785 13.1% 3,179 3,218 -1.2%
Itaú BBA
Managerial Financial Margin 554 340 63.0% 1,740 1,249 39.4%
- Banking Operations 304 241 26.0% 1,004 923 8.8%
- Treasury / Management of Foreign Exchange Risk from Investments Abroad - net of tax effects
250 98 153.6% 737 326 125.9%
Result from Loan Losses 127 77 65.0% 298 210 42.1%
Service Fees 108 100 8.5% 383 307 25.0%
Non-Interest Expenses (234) (141) 66.6% (681) (622) 9.4%
Net Income Itaú BBA 379 287 32.2% 1,242 829 49.9%
Itaucred 92 120 -23.6% 525 285 84.5%
Corporation 66 160 -58.7% 305 (555) 154.9%
Consolidated 1,425 1,352 5.4% 5,251 3,776 39.1%
R$ MillionNet Income per segment (pro forma)
27
Banco Itaú Holding Financeira S.A.
Net Income 4th Q/05 3rd Q/05 Variation 2005 2004 Variation
Itaubanco 888 785 13.1% 3,179 3,218 -1.2%
Itaú BBA 379 287 32.2% 1,242 829 49.9%
Itaucred
Vehicles 95 127 -25.0% 397 198 100.5%
- Excess Provisions (93) (46) 104.4% (267) - N/A
Credit Cards - Non-Account Holders 55 32 74.0% 234 97 140.0%
- Excess Provisions (1) (6) -83.4% 68 - N/A
Taií (59) (39) 52.2% (106) (11) 883.4%
- Excess Provisions (12) 1 -889.7% (12) - N/A
Net Income Itaucred 92 120 -23.6% 525 285 84.5%
Corporation 66 160 -58.7% 305 (555) 154.9%
Consolidated 1,425 1,352 5.4% 5,251 3,776 39.1%
R$ MillionNet Income per segment (pro forma)
28
Banco Itaú Holding Financeira S.A.
R$
3,1523,776
5,251
2,377
3.33
4.76
2.77
2.14
0
1,000
2,000
3,000
4,000
5,000
6,000
2002 2003 2004 2005
2.00
2.50
3.00
3.50
4.00
4.50
5.00
5.50
6.00
6.50
7.00
Net Income per shareNet Income
R$ million
Note1: On october 3 was made a 900% split of the common and preferred shares traded at Bovespa and on october 6 was made a 400% split of the ADRs traded at
NYSE.
Note2: The values of the Net Income per share was adjusted to better analyzes.
Net Income and Net Income per Share.
19.8%
39.1%
20.7%
42.9%
29.0%
32.6%
29
Banco Itaú Holding Financeira S.A.
0
100
200
300
400
500
600
700
800
900
1.000
1.100
1.200
1.300
95 96 97 98 99 00 01 02 03 04 05
Itaú (1)
Itaú (2)
Bovespa
In US$
100
863
323323
1,245Itaú(1) Itaú(2) Ibov.
10 years 28.69% 24.05% 12.45%
5 years 24.93% 20.52% 12.87%
12 months 64.86% 60.01% 44.83%
Annual Average Appreciation in US$
(*) December, 29
Preferred Shares AppreciationEvolution of US$ 100 invested from Dec/95 to Dec/05*
Asian Crisis
Russian Crisis
Real Devaluation Argentine
Crisis
Attack to WTC
Brazilian Election Period
(1) With dividends reinvestment (2) Without dividends reinvestment
30
Banco Itaú Holding Financeira S.A.
• Organic growth of classic business lines;• Expansion of Insurance, Capitalization and Pension Plan business
areas;• Maintenance of Efficiency Ratio (same basis);• Growth of 25% in credit portfolio; • Expectation of moderate growth of non-performing loans ratio as a
consequence of targeting operations with higher margins and higher
risks (personal loans and credit cards).
2006
Itaubanco
31
Banco Itaú Holding Financeira S.A.
• Focus on Investment Banking and banking services segments;• Continuous improvement of market risk management.
2006
Itaú BBA
32
Banco Itaú Holding Financeira S.A.
• Growth of vehicle financing, developing new segments and presence
in regions less penetrated;• Consolidation and growth of partnerships with CBD (FIC) and Lojas
Americanas (FAI);• Growth of number of Taií´s Outlets (FIT)• New products launch at FIC, FIT and FAI;• Growth of operations with non-account holders;• Credicard / Orbitall integration on Itaú with operation gains;• Growth of 30% in credit operations;• Expectation of moderate growth of non-performing loans ratio as a
consequence of targeting operations with higher margins and higher
risks (personal loans and credit cards).
2006
Itaucred
33
Banco Itaú Holding Financeira S.A.
Itaú Holding
• Disclosure of the impacts of operational risks, in compliance with
Basel II.
2006
February 22, 2006
Conference Call about the Results of 4th Quarter of 2005