Silvio de Carvalho Executive Director 9 th Annual Latin America Conference London 11 to 13...

Silvio de CarvalhoExecutive Director

9th Annual Latin America ConferenceLondon 11 to 13 September, 2006

2

Agenda

Highlights Itaú

2nd Quarter of 2006 Results

Acquisition of BankBoston

Strategy

3

Highlights

Assets (R$ Billion)

Credit Operations (R$ Billion)

Stockholders’ Equity (R$ Billion)

Technical Provisions – Insurance, Pension and Capitalization Plans (R$ Billion)

69.681.4

151.2 146.2172.4

111.1 118.8130.3

17.9%

6.6 7.69.0

11.914.0 15.0

17.615.6

2000

2001

2002

2003

2004

2005

1stQ

/05

1stQ

/06

17.3%

27.334.3

45.4 44.653.3

58.6

74.867.8

27.6%

2.3 3.2 4.4

7.7

11.012.5

16.414.6

31.2%

4

Net Income (R$ Million)

Non-interest Expenses (R$ Million)

Banking Service Fees (R$ Million)

Net Result from Financial Operations (R$ Million)

Highlights

1,841

3,776

2,4752,9583,152

5,251

2,3772,389

2000

2001

2002

2003

2004

2005

1stQ

/05

1stQ

/06

19.5%

3,6994,277

6,165

3,6464,249

7,737

3,465

5,121

2000

2001

2002

2003

2004

2005

1stQ

/05

1stQ

/06

16.5%

7,0568,770

5,4894,944

9,0158,425

5,996

10,428

2000

2001

2002

2003

2004

2005

1stQ

/05

1stQ

/06

11.0%

5.206 5.495

11.15710.220

9.224

7.2505.892

4.541

5.6%

5

Average ROE (%)

Average ROA (%)

BIS Ratio (%)

Efficiency Ratio (%)

Highlights

29.0%

33.1%

28.8% 29.7%29.2%

34.0%35.7%35.3%

2000

2001

2002

2003

2004

2005

1stQ

/05

1stQ

/06

1.7 p.p.

14.4%16.9%

18.4%20.6%

18.3%16.3%

19.8%17.0%

-2.0 p.p.

3.2% 3.1%2.6% 2.8% 3.0%

3.5% 3.6%3.7%

2000

2001

2002

2003

2004

2005

1stQ

/05

1stQ

/06

0.1 p.p.

67.2%62.1% 58.2% 54.5%53.9% 50.3%

44.4%50.3%

-5.9 p.p.

6

4,5013,9653,624

3,1572,598

1,9981,427

4,224

Branches+CSBs

Internet Banking Clients (In million)

ATMs

Employees

Highlights

3,174 3,2023,0653,0733,172

3,1923,1842,995

2000

2001

2002

2003

2004

2005

1stQ

/05

1stQ

/06

4.5%

22,50222,023 21,358

20,02121,150

17,926

13,77712,064

2000

2001

2002

2003

2004

2005

1stQ

/05

1stQ

/06

5.4%

53,277

42,45045,316 46,881

43,21545,409

47,52451,036

13.6%13.5%

7

11,879

17,555

15,027

2,229

9,036

7,578

6,6425,907

4,1983,337

2,857

880

3,152

181

3,776

5,251

2,389

1,8411,869

721592

343

38201,000

2,0003,000

4,0005,000

6,0007,000

8,0009,000

10,00011,000

12,00013,000

14,00015,000

16,00017,000

18,000

90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06

0

400

800

1,200

1,600

2,000

2,400

2,800

3,200

3,600

4,000

4,400

4,800

5,200

5,600

6,000

6,400

Stockholders' Equity

Net Income

CAGR(90-06) = 14.2%

CAGR(90-05) = 25.2%

Real Plan

Mexican Crisis

Asian Crisis

Russian Crisis

Real Devaluation Argentina

Crisis

Collor Plan

Attack to WTC

Brazilian Election Period

R$ MillionEvolution of Stockholders’ Equity and Net Income

Highlights

Adaptability to Different

Scenarios

8

11,879

17,555

15,027

2,229

9,036

7,578

6,6425,907

4,1983,337

2,857

880

3,152

181

3,776

5,251

2,389

1,8411,869

721592

343

38201,000

2,0003,000

4,0005,000

6,0007,000

8,0009,000

10,00011,000

12,00013,000

14,00015,000

16,00017,000

18,000

90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06

0

400

800

1,200

1,600

2,000

2,400

2,800

3,200

3,600

4,000

4,400

4,800

5,200

5,600

6,000

6,400

Stockholders' Equity

Net Income

CAGR(90-06) = 14.2%

CAGR(90-05) = 25.2%

Real Plan

Mexican Crisis

Asian Crisis

Russian Crisis

Real Devaluation Argentina

Crisis

Collor Plan

Attack to WTC


R$ Million

Highlights

Jan/90 to Jun/06Dividends:

R$ 9.8 BillionIncrease of Capital:

R$ 0.1 Billion

1st Semester of 2006Net Income R$ 2,958 million

Evolution of Stockholders’ Equity and Net Income

9

Agenda

Highlights Itaú



Strategy

10

3. Additional provisions : R$ 230 million increase in the excess provision for loan losses in the semester, reaching the

balance of R$ 1.6 billion; R$ 190 million reversal of additional provision for securities in the semester, remaining the

balance of R$ 180 million;

1. Results: 2nd Qtr/06: Net Income of R$ 1,498 million, 2.6% higher than the previous quarter;

annualized ROE of 35.1%; 1st Sem/06: Net Income of R$ 2,958 million, 19.5% higher than the 1st Sem/05; annualized

ROE of 35.7%;

4. Nonperforming Loans Ratio: Nonperforming loans ratio of 4.4% (previous criteria);

2. The loan portfolio grew 3.8% in the quarter and 10.4% in the first half: Personal Loans: 9.8% in the quarter and 21.9% in the semester; Vehicles: 12.8% in the quarter and 28.4% in the semester;

5. BIS Ratio: Maintenance of the high level of 16.3%.

Highlights

11

R$ Million (except where indicated)

2nd Qtr/06 1st Qtr/06 Variation 1st Sem/06 1st Sem/05 Variation

Net Income 1,498 1,460 2.6% 2,958 2,475 19.5%

Earnings per share (R$) 1.35 1.32 2.3% 2.67 2.20 21.4%

Stockholders' Equity 17,555 16,619 5.6% 17,555 15,027 16.8%

Annualized ROE (%) 35.1% 36.3% -120 b.p. 35.7% 34.0% 170 b.p.

Market Capitalization 69,911 70,895 -1.4% 69,911 48,580 43.9%

BIS Ratio (%) 16.3% 16.9% -60 b.p. 16.3% 18.3% -200 b.p.

Efficiency Ratio (%) 43.5% 45.2% -170 b.p. 44.4% 50.3% -600 b.p.

Nonperforming Loans Ratio (%) 4.4% 4.0% 40 b.p. 4.4% 3.0% 140 b.p.

Highlights

12

R$ Million

2nd Qtr/06 1st Qtr/06

Net Income 1,498 1,460

Financial Margin on Banking Operations (94) (158)

Revenue and expenses from deposits and liabilities - (99)

Securities available for sale (64) -

Reversal of the additional provision for securities (66) (59)

Hedge for BankBoston's positions 36 -

Result from Loan Losses 13 86

Loans Sold (122) -

Exceeding Allowance 66 86

Effects of the Adequacy of Credicard's Criteria of Provisioning 69

-

Extraordinary Results 60 10

Total - Non recurring effects (21) (63)

Recurring net income 1,477 1,397

Non Recurring Effects – Net of tax effects

13

R$ Million

2nd

Qtr/061st

Qtr/06Variation

1st Sem/06

1st Sem/05

Variation

Managerial Financial Margin 3,920 4,087 -4.1% 8,007 6,291 27.3%

• Banking Operations 3,603 3,642 -1.1% 7,246 5,561 30.3%

• Treasury 182 296 -38.6% 478 417 14.6%

• Management of FX Risk from Investments Abroad 135 149 -9.4% 283 312 -9.2%

Result of Loan Losses (1,226) (1,287) -4.7% (2,513) (1,085) 131.7%

Banking Service Fees 2,127 2,121 0.3% 4,249 3,646 16.5%

Non-Interest Expenses (2,711) (2,779) -2.5% (5,489) (4,944) 11.0%

Net Income 1,498 1,460 2.6% 2,958 2,475 19.5%

Average Stockholders' Equity 17,087 16,089 6.2% 16,578 14,542 14.0%

Annualized ROE (%) 35.1% 36.3% -120 b.p. 35.7% 34.0% 170 b.p.

Itaú Holding Pro Forma

14

R$ Million

2nd Qtr/06 1st Qtr/06 Variation

Managerial Financial Margin 3,920 4,087 (167)

• Banking Operations 3,603 3,642 (39)

Revenues and Expenses from Deposits and Liabilities - (169) 169

Securities Available for Sale (104) - (104)

Reversal of Additional Provision for Securities (100) (90) (10)

Hedge of BankBoston’s positions 59 - 59

• Recurring Banking Operations 3,458 3,383 75

• Treasury 182 296 (114)

• Management of Foreign Exchange Risk from Investments Abroad- net of tax effects

135 149 (14)

The presented values differ from screen 3 therefore are gross of the fiscal effect.

Managerial Financial Margin

15

R$ Million

(*) Farming and Agribusiness Credit and Mortgage Loans – Linked to the available funds from Demand and Savings Deposits.

Jun 30, 06 Mar 31, 06 Dec 31, 05 Jun 30, 05Jun/06 - Mar/06

Jun/06 - Dec/05

Jun/06 - Jun/05

Individuals 33,992 30,813 28,471 22,816 10.3% 19.4% 49.0%

• Credit Cards 7,372 6,904 7,216 5,359 6.8% 2.2% 37.6%

• Personal Loans 12,575 11,457 10,320 9,276 9.8% 21.9% 35.6%

• Vehicles 14,046 12,451 10,936 8,181 12.8% 28.4% 71.7%

Businesses 36,128 36,703 34,744 31,584 -1.6% 4.0% 14.4%

• Small and Medium Sized Companies 14,024 13,741 12,784 11,147 2.1% 9.7% 25.8%

• Corporate 22,104 22,962 21,960 20,437 -3.7% 0.7% 8.2%

Mandatory Loans (*) 4,663 4,529 4,541 4,247 3.0% 2.7% 9.8%

Total Loans 74,783 72,046 67,756 58,647 3.8% 10.4% 27.5%

Loans by Type of Customer

16

28.3% 29.9% 34.3% 36.4% 38.9% 41.5% 42.0% 42.8% 45.5%

17.7% 18.4%18.2% 18.4% 19.0% 18.7% 18.9% 19.1% 18.8%

8.4% 9.1%8.5%

7.2% 6.9% 6.7% 6.3% 6.2%

45.6% 42.5% 39.0% 37.6% 34.8% 32.9% 32.4% 31.9% 29.6%

7.6%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

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

Individuals Small and Medium-Sized CompaniesMandatory Loans Corporate

Composition of the Loan Portfolio

17

Coverage Ratio (*)

164%181%

192%200%203%

jun/05 set/05 dez/05 mar/06 jun/06

(*) Balance of Provision for Loans Losses / Balance of Loans overdue for more than 60 days and that do not generate income. Accounting

CriteriaPrevious Criteria

Nonperforming Loans Ratio (%)

BusinessesNPL Ratio Individuals

1.5%1.8%0.9% 0.8% 1.3%1.1% 1.3% 1.5% 1.4%

3.2%3.5%

2.9% 2.9%3.0% 3.3%

3.5% 4.0% 4.4%

6.5%6.0%

5.6% 5.6% 5.2%5.3%

5.8%

6.5% 7.1%

Jun/04 Dec/04 Jun/05 Dec/05 Jun/06

8.1%

5.1%

1.6%

Nonperforming Loans and Coverage Ratios

18

R$ Million

(1) Mutual Funds and Consortia.


Asset Management (1) 462 449 3.0% 911 813 12.1%

Current Account Services 375 365 2.7% 739 683 8.2%

Credit Cards 502 487 3.2% 989 895 10.4%

Loans and Guarantees Issued 390 388 0.7% 778 568 37.0%

Collection Services 207 224 -7.5% 431 402 7.2%

Other 190 210 -9.1% 400 285 40.4%

Total 2,127 2,121 0.3% 4,249 3,646 16.5%

Banking Service Fees

19

R$ Million

(1) Not including PIS, Cofins and ISS.

2nd

Qtr/061st

Qtr/06Variation

1st Sem/06

1st Sem/05

Variation

Personnel Expenses 1,058 1,132 -6.6% 2,190 1,927 13.6%

Other Administrative Expenses 1,289 1,229 4.8% 2,518 2,280 10.5%

Other Operating Expenses 299 335 -10.8% 634 544 16.5%

Tax Expenses (CPMF / Others) (1) 66 82 -19.7% 146 193 -24.4%

Total 2,711 2,779 -2.4% 5,489 4,944 11.0%

Non-Interest Expenses

20

49.8% 50.8% 50.5% 50.1%45.2% 43.5%

48.0%

4th Q/04 1st Q/05 2nd Q/05 3rd Q/05 4th Q/05 1st Q/06 2nd Q/06

Note: For further details about the criteria, please consult Itaú Holding’s Management Discussion and Analysis report.

50.3%

44.4%

50.3%

Efficiency Ratio

21

(1) Does not take into consideration the corresponding tax effects.(2) Includes unrealized minority interest gains in Equity of R$ 660 million in June/06, R$ 567 million in

March/06 and R$ 266 million in June/05.

R$ Million

1,991 2,465 2,415 Total Unrealized

401 347 405 Other Liabilities

32 (41) 40 Subordinated Debt

129 3 10 Securitization of Foreign Payment Orders

649 1,381 1,609 Investment in BPI (2)

195 275 31 Loans

575 466 306 Securities and Derivatives

11 34 14 Interbank Deposits

06/30/0503/31/0606/30/06

In Stockholders' EquityUnrealized Profits/(Losses) (1)

Financial Instruments - Market Value

22

Itaú

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 the Itaucred segment basically reflects the transactions carried out in channels intended for non current account holders.

Segmentation (Pro Forma)

23

Itaubanco Itaú BBA Itaucred Corporation Itaú (1)

June 30, 2006

Net Income for the Quarter 1,026 298 121 53 1,498

Tier I Allocated Capital 10,136 4,249 2,070 1,100 17,555

RAROC in the Quarter (% p.y.) 42.1% 27.7% 23.7% 21.6% 35.1%

Loan Portfolio (2) 29,303 24,244 21,236 - 74,783

Total Assets 132,384 44,445 20,088 2,976 172,413

March 31, 2006

Net Income for the Quarter 860 390 138 71 1,460

Tier I Allocated Capital 9,371 4,354 2,028 865 16,619

RAROC for the Quarter (% p.y.) 40.5% 36.0% 29.7% 20.4% 36.3%

Loan Portfolio (2) 28,479 24,921 18,646 - 72,046

Total Assets 127,225 44,378 17,653 3,023 164,423 (1) Does not represent the sum of the parts, because there are transactions between the segments that were eliminated only in the consolidated figures.(2) Includes endorsements and sureties.

R$ Million

Highlights of the Pro Forma Segments

24

Thousands

Evolution of Credit Cards

1,000 1,1041,829 1,799

2,279

3,321

4,590

5,579 5,780

7,059

8,510 8,369

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 jun/06

8,025

10,655

12,54312,824

4,4554,033

3,596

2,245Credicard

Itaucard

25

R$ Million

2nd Qtr/06 1st Qtr/06 Variation1st

Sem/061st

Sem/05Variation

Itaubanco - Banking 632 498 27.1% 1,130 884 27.8%

• Banking Operations 460 386 19.2% 847 580 46.0%

• Treasury 76 7 956.6% 83 85 -1.8%


Credit Cards – Current Account Holders 162 157 3.1% 319 249 28.0%

Insurance, Pension Plans and Capitalization

187 158 18.5%

344

272 26.4%

Investment Funds and Managed Portfolio 45 48 -5.7%

94

101 -7.7%

Net Income 1,026 860 19.3% 1,887 1,507 25.2%

Pro Forma Net Income by Subsegment - Itaubanco

26


Managerial Financial Margin 289 283 1.8% 572 443 29.1%

Result of Loan Losses (90) (95) -6.1% (185) (60) 210.2%

Banking Service Fees 354 356 -0.6% 709 702 1.0%

Non-Interest Expenses (271) (273) -1.0% (544) (647) -16.0%

Net Income 162 157 3.1% 319 249 28.0%

Tier I Allocated Capital 838 552 51.9% 838 505 66.1%

Annualized RAROC (%) 93.0% 103.4% -10.4b.p. 93.1% 173.3% -80.2b.p.

Number of Cards (thousands) 8,369 8,603 -2.7% 8,369 7,922 5.6%

Billing 4,543 4,310 5.4% 8,853 7,622 16.2%

R$ Million (except where indicated)

Credit Cards – Current Account Holders - Pro Forma

27


Earned Premiums 626 630 -0.7% 1,256 1,064 18.0%

Results from Pension Plans and Capitalization 79 60 31.0% 139 114 21.6%

Retained Claims (312) (360) -13.3% (671) (609) 10.3%

Selling Expenses (146) (148) -1.4% (294) (216) 36.5%

Managerial Financial Margin 139 158 -12.0% 298 258 15.2%

Non-Interest Expenses (150) (174) -13.5% (324) (288) 12.7%

Net Income 187 158 18.6% 344 272 26.4%

Combined Ratio (%) 86.4% 91.2% -4.8 b.p. 88.8% 92.7% -3.9 b.p.

Claim Level (%) 50.4% 57.9% -7.5 b.p. 52.7% 52.8% -0.1 b.p.

Tier I Allocated Capital 1,450 1,379 5.2% 1,450 1,431 1.3%

Annualized RAROC (%) 52.8% 47.2% 5.6 b.p. 50.1% 40.0% 10.1 b.p.

R$ Million

Insurance, Pension Plans and Capitalization - Pro Forma

28

344(324)Non-Interest Expenses 293112 Managerial Financial Margin

(294)Selling Expenses

(671)Retained Claims

139

1,257Earned Premiums

65185 93 (57)(108)(159)

56130

(11)(26)(257)

-(69)(603)

11029 -

-217 1,040

Results from Pension Plans and Capitalization

Net Income

1st Sem/06 Insurance Pension Plans Capitalization TOTAL

272(288)

27484

(216)

(608)

117

1.063

60165 47 (52)(70)(166)

65125

(13)(27)(176)

-(59)(549)

8928 -

-188 875

1st Sem/05 Insurance Pension Plans Capitalization TOTAL

(R$ Millions)

(R$ Milions)

Insurance, Pension Plans and Capitalization - Pro Forma

Non-Interest Expenses Managerial Financial Margin

Selling Expenses

Retained Claims

Earned Premiums

Results from Pension Plans and Capitalization

Net Income

29

Itaú BBA Pro Forma


Managerial Financial Margin 361 611 -40.9% 972 847 14.8%

• Banking Operations 255 281 -9.2% 537 458 17.1%

• Treasury 67 285 -76.5% 352 296 19.2%


Result of Loan Losses 46 13 257.8% 59 95 -37.9%

Banking Service Fees 110 131 -15.6% 241 175 37.4%

Non-Interest Expenses (145) (168) -13.8% (312) (306) 2.0%

Net Income 298 390 -23.7% 688 577 19.3%

Tier I Allocated Capital 4,249 4,354 -2.4% 4,249 3,554 19.6%

Annualized RAROC (%) 27.7% 36.0% -830 b.p. 31.9% 34.7% 280 b.p.

R$ Million

30

R$ Million

Itaucred Pro Forma

2nd Qtr/061st

Qtr/06Variation

1st Sem/06

1st Sem/05

Variation

Managerial Financial Margin 922 819 12.5% 1,741 971 79.3%

Result of Loan Losses (473) (371) 27.3% (844) (175) 380.8%

Banking Service Fees 311 270 15.0% 581 366 58.6%

Non-Interest Expenses (509) (484) 5.0% (993) (652) 52.4%

Net Income 121 138 -12.1% 260 313 -17.1%

• Vehicles 125 115 8.3% 239 175 36.9%

• Credit Cards – Non Current Account Holders 38

58 -34.9%

96

147 -34.3%

• Taií (41) (35) 16.4% (76) (8) 801.7%

Tier I Allocated Capital 2,070 2,028 2.0% 2,070 1,309 58.1%

Annualized RAROC (%) 23.7% 29.7% -600 b.p. 26.9% 41.6% -1470 b.p.

Transactions carried out in channels intended for non current account holder customers.

31

R$ Million

(*) The Consolidated Stockholders’ Equity considers the integral amortization of the goodwill.

(*)

ASSETS Itaú BankBoston Itaú + BkB Current and Long-Term Assets 169,458 21,702 191,160 Cash and Cash Equivalents 2,402 1,140 3,542 Short-term Interbank Deposits 27,619 5,134 32,752 Securities 37,023 2,497 39,520 Interbank and Interbranch Accounts 13,801 1,898 15,699 Loans 67,383 9,063 76,445 (Allowance for Loan Losses) (5,609) (394) (6,003) Other Assets 26,840 2,364 29,204 Permanent Assets 2,954 482 3,437 TOTAL ASSETS 172,413 22,184 194,597

LIABILITIES Itaú BankBoston Itaú + BkB Current and Long-Term Liabilities 153,664 19,951 173,615 Deposits 52,921 6,061 58,982 Securities Repurchase Agreements 27,606 3,820 31,426 Funds from Acceptances and Issue of Securities 6,791 575 7,366 Interbank and Interbranch Accounts 2,964 2,618 5,583 Borrowings 7,927 2,270 10,197 Derivative Financial Instruments 2,507 635 3,142 Other Liabilities 36,539 3,971 40,511 Technical Provisions of Insurance, Pension Plans and Capitalization 16,409 - 16,409 Deferred Income 67 8 75 Minority Interest in Subsidiaries 1,126 - 1,126 Stockholders' Equity 17,555 2,225 19,780 TOTAL LIABILITIES 172,413 22,184 194,597

ASSETS UNDER MANAGEMENT 138,923 27,965 166,888

Pro Forma Balance Sheet – Jun 30, 06

32

Agenda

Highlights Itaú



Strategy

33

Banco Itaú Holding Financeira S.A. (ITAÚ) and Itaúsa – Investimentos Itaú S.A. (ITAÚSA) announce today that they have entered into an agreement with Bank of America Corporation (BAC) dated 05-01-2006 and 08-08-06 which involves:

• The acquisition of BankBoston (BKB) in Brazil by ITAÚ pursuant to the issuance of 68,518 thousand new non-voting ITAÚ shares, equal to an approximate 5.8% share of ITAÚ’s total capital;• The transaction for the acquisition of the Chilean and Uruguayan operations provides for a cash payment of R$ 2.3 million and the issue of ITAÚ common shares, equivalent to a stake of approximately 1.7% in ITAÚ’s total capital stock (20,537 thousand common shares of ITAÚ’s capital).

The Acquisition Agreement

The largest stock swap ever to be completed in the Brazilian financial services industry

34

Acquired Businesses

Bank of AmericaCorporation

BKB Chile

BKB Uruguay

CorporateMiddle

&Small

Premier

OCA Uruguay

Credit Cards

BKBBrazil

35

Price and Transaction Structure

The acquisition of BKB Brazil will be effected in stock pursuant to the issuance of non-voting ITAÚ shares, equal to an approximate 5.8% share of ITAÚ’s total capital (68,518 thousand new shares of ITAÚ). Based on the non-voting shares average price on 04-28-06, these newly-issued shares would be valued at R$ 4.5 billion.

The transaction for the acquisition of the Chilean and Uruguayan operations provides for a cash payment of R$ 2.3 million and the issue of ITAÚ common shares, equivalent to a stake of approximately 1.7% in ITAÚ’s total capital stock (20,537 thousand common shares of ITAÚ’s capital). Based on the average market price for the period from February 21 to April 24 2006, these shares would have been worth R$ 1,373 million

36

Recent Acquisitions in Shares in Brazil

DATE ACQUIRER TARGETTOTAL

AMOUNTR$ MM

% PAID IN

SHARES

SHARES ISSUED / TOTAL

CAPITAL

Apr-03 ABN Amro Real Sudameris 2,293 77.0% 12.9%

Jan-03 Bradesco BBV Brasil 2,480 25.4% 4.4%

Nov-02 Itaú BBA-Creditanstalt 3,119 16.7% 3.0%

Jul-00 Unibanco Bandeirantes 1,044 100.0% 12.3%

Apr-00 Bradesco Boavista 946 100.0% 6.5%

Source: Merrill Lynch and Itaú Holding

May-06 Itaú BKB Brazil 4,581 100.0% 5.8%

August-06 ItaúBKB Chile and Uruguay

1,375 100.0% 1.7%

37

Considerations Regarding BAC’s Investment in ITAÚ

BAC will appoint one member of ITAU’s Board of Directors; The acquisition will involve the issuance of new non-voting ITAÚ shares, will not

give rise to preemptive subscription rights on the part of ITAÚ’s current

shareholders; BAC does not have a Right of First Refusal, but will have tag along rights, in the

event of a change of control at ITAÚ; BAC shall not increase its stake above 20% of the issued and outstanding capital

of ITAÚ in the future; Shares issued in connection with this acquisition are subject to a 3-year lock-up

period and, after this period, the sale of these shares in the market is limited to 15%

of the average daily volume or block trade; ITAÚ has a Right of First Offer should BAC decide to sell its stake.

38

BKB Brazil

Present in Brazil since 1947

Assets (R$ MM) 22,184

Deposits (R$ MM) 6,601

Shareholders’ Equity (R$ MM) 2,225

# of Employees 4,751

# of Clients (thousands) 224

Management of Third Parties Assets (R$ MM) 27,965

Loans (includes sureties and endorsements) (R$ MM) 11,175

Source: BKB Publication, BAC and Central Bank of Brazil.

# of Branches 73

06-30-06

Ranked 13th

by the CentralBank of Brazil

39

BKB Brazil - Segmentation

Banking Revenues (BR) (*) Number of Clients

(*) Banking Revenues = Financial Margins + Service Fees

Position: Dec.05

Corporate31%

High Net Worth Individuals

38%Middle Market

31%

SEGMENTTHOUSANDSOF CLIENTS

INCREASE IN BR (%)

High Net Worth Individuals

178.3 118%

Middle Market 23.8 40%

Corporate 1.3 62%

40

Client Overlap / Opportunities

SEGMENTESTIMATED OVERLAP

ESTIMATED LOSS IN

BANKING REVENUES

OPPORTUNITIES

HIGH NET WORTH 30% 5% Sale of Insurance and Private

Pension Plans

MIDDLE MARKET 37% 11% Cash Management Services

CORPORATE 12% 3%Cash Management Services

Investment BankingCrossborder Transactions

Clients whose limits should be reduced according to information on the largest clients

41

Relevant Aspects

Will become a shareholder of ITAÚ, thus maintaining an important presence in the region, through a significant investment in a leading bank; Will appoint one member of ITAÚ’s Board of Directors.

Leadership position among private banks in assets under management, custody, high net worth individual and corporate segments; Significant economies of scale in the large corporate and middle market segments; Acquisition of a premium credit card client base; Opportunity to expand into foreign markets in which ITAÚ does not currently have a presence.

BAC

ITAÚ and BAC will explore mutual cooperation opportunities to benefit their clients

ITAÚ

42

Important Highlights

Maintenance of BKB’s branches, which are highly regarded for their superior facilities, and integration with the Itaú Personnalité segment (no intention to shut down branches);

The ITAÚ brand will be extended to the acquired businesses;

ITAÚ will add a set of highly qualified professionals to its current structure.

ITAÚ will continue to strengthen its tradition of

providing differentiated service to its customers in the various

market segments

43

BKB Chile (Exclusive Option)

BankBoston Chile

Source: BAC

Investment Grade

Baa1 from Moody´s



Shareholders’ Equity (R$ MM) 788

# of Employees 1,455

# of Clients (thousands) 62

Management of Third Parties Assets (R$ MM) 595

Loans (includes sureties and endorsements) (R$ MM) 4,989

# of Branches 50

06-30-06

44

BKB Uruguay (Exclusive Option)



Management of Third Parties Assets (R$ MM) 1,314

BankBoston Uruguay

Loans (R$ MM) 630

Source: BAC

Assets (R$ MM) 229


Loans (R$ MM) 156OCA

MarketShare 50%


06-30-06

625,000clients

06-30-06

# of Employees 450

# of Branches 15

# of Employees 394

# of Branches 23

http://www.oca.com.uy/index.html

45

Pro Forma AnalysisR$ Billion

(*) Total Shareholders' Equity already considering full amortization of goodwill

Assets

Loans (including sureties and endorsements)

Deposits

Management of Third Parties Assets

Shareholders’ Equity

INFORMATION AS OF 06-30-06

# of Employees

# of Clients (thousands)

# of Branches

172.4

74.8

52.9

138.9

17.6

ITAÚ

53,277

17,224

3,202

22.2

11.2

6.1

26.0

2.2

BKBBrazil

4,751

224

73

6.6

5,0

2.7

0.6

0.8

BKBChile

1,455

62

50

203.3

91.7

63.3

168.8

20.7 (*)

Pro Forma TOTAL

60,327

18,135

3,363

1.9

0.6

1.6

1.3

0.1

BKBUruguay

394

75

15

0.2

0.1

-

-

0.1

OCAUruguay

450

550

23

46

Estimated Effects

(*) The effect of the second issue of shares of Itaú Holding is already considered in the total.(1) Current information.

Issues of Banco Itaú Holding Financeira shares

Bank of America's stake in Banco Itaú Holding Financeira

Goodwill amortization on Banco Itaú Holding Financeira

Cash Disbursement

Equity Income Result at ITAÚSA

Estimated Effects

68,518 thousand preferred

5.82%

R$ (2,433) million

0

R$ 531 million

BankBoston Brazil(1)

20,537 thousand common

1.72%

R$ (401) million

R$ (2.3) million

R$ 279 million

BankBoston Chile and Uruguay

89,055 thousand shares

7.44% (*)

R$ (2,834) million

R$ (2.3) million

R$ 810 million

TOTAL

47

BKB earnings requirements to

avoid dilution in 2005ITAÚ + BKBITAÚ

Net Income (R$ MM)

ROE (%p.a.)

ROA (%p.a.)

Efficiency Ratio

5,5765,251

BKB Brazil

325

Fiscal Year 2005

EPS (R$/share) 4.744.74

Shares Outstanding (mm) 1,176.21,107.7

4.74

68.5

13.4%

1.4%

77.3%

33.7%

3.5%

50.3%

Required

In light of its scale, ITAÚ is in a position to make this acquisition EPS accretive in a short period of time.

48

Accounting Effects

It is management’s intention to effect the write-off of the goodwill amount resulting from this transaction in the fiscal year of 2006. It is estimated that ITAÚ’s net income will be reduced by R$ 2.7 billion, net of taxes, as a result of the amortization of goodwill. The amount of dividends/interest on own capital to be distributed to the pro forma ITAÚ shareholder base for the fiscal year 2006 will not be impacted by this amortization of goodwill and should, therefore, be higher than those paid out in 2005;

The transaction is expected to be EPS accretive in the second half of 2007;

The Basle Ratio, pro forma for the acquisition, will equal approximately 16.1%.

49

Impact of the Transaction on Itaúsa

Decline in stake in ITAÚ from 48.2% to 44.7% (R$ 0.6 billion);

Gain from the equity method due to capital increase at ITAÚ (R$ 2.7 billion);

Negative impact of goodwill amortization at ITAÚ (R$ 1.3 billion);

ESTIMATED POSITIVE NET EFFECT ON NET INCOME (R$ 0.8 BILLION).

50

Agenda

Highlights Itaú



Strategy

51

Segmentation

Investment Banking

52

Itaú


Banking

Credit Cards (Current Account

Holders)Insurance,

Pension Plans and

CapitalizationInvestment Funds and Managed Portfolio

Corporation

Corporate

Operations

&

Investment

Banking

Vehicles

Credit Cards (Non Current

Account Holders)

Taií, FIC (CBD) and FAI (LASA)

Segmentation (pro forma)

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

53

R$ Million

19.9%

8.1%3.5%

68.5%

Banco Itaú

Itau BBA

Itaucred

Corporation

Net Income Breakdown in the 2nd Quarter of 2006:

Net Income per segment (pro forma)

Net Income 1st Q/06 Variation

Itaubanco 860 19.3%

Itaú BBA 390 -23.6%

Itaucred 138 -12.3%

Corporation 71 -25.4%

Consolidated 1,460 2.6%

2nd Q/06

1,026

298

121

53

1,498

54

42.1%

21.6%23.7%27.7%35.1%

I taubanco Consolidated Itaú BBA Itaucred Corporation

RAROC* per segment (pro forma)

(*) Risk-Adjusted Average Return on Allocated Capital

RAROC* per segment2nd Quarter of 2006

RAROC 1st Q/06 Variation

Itaubanco

Itaú BBA

Itaucred

Corporation

Consolidated

2nd Q/06

40.5% 160 b.p.

36.0% -830 b.p.

29.7% -600 b.p.

20.4% 120 b.p.

36.3% -120 b.p.

42.1%

27.7%

23.7%

21.6%

35.1%

55

R$ Milhões

23.3%

12.6%3.1%

61.0%23.2%

8.8%4.2%

63.8%

Itaubanco

Itau BBA

Itaucred

Corporation

1st Sem/06 1st Sem/05

Net Income per segment (pro forma)

56

Itaú

CorporationItaucredItaú BBAItaubanco

FIC50% CBD50% Itaú

FAI50% LASA50% Itaú

Own stores

100% Itaú

Payroll Credit

FináustriaItaucred VehiclesBanco FiatIntercap

Vehicle Credit Cardsnon-account

holders 50% Credicard

Segmentation – Credit for Individuals

http://www.bancobmg.com.br/meio.asp

57

5,002

9,73411,512

14,956

1,328 1,3452,439

2,5552,779

3,301

3,543

491

777

1,097

8601,035

1,139

1,220

1,640

4,773 5,392 6,2728,3957,381

2,351

1,241

92

432

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

Vehicles Credit Cards Taií Payroll Loans

Credit Portfolio (R$ Million) Own Stores

5

Itaucred

58

Itaú Holding


• Organic growth of classic

business lines;• Expansion of Insurance,

Capitalization and Pension

Plan business areas;• Maintenance of Efficiency

Ratio;• Growth of 25% in credit

portfolio; • Expectation of moderate

growth of non-performing

loans ratio.

• Focus on Investment

Banking and banking

services segments;• Continuous improvement

of market risk

management;• Growth of 5% in credit

portfolio.

• Growth of vehicle financing;• Consolidation and growth of

partnerships with CBD (FIC)

and Lojas Americanas (FAI);• Growth of number of Taií´s

Outlets (FIT);• 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.

• Disclosure of the impacts of operational

risks, in compliance with Basel II

Banco Itaú Holding Financeira S.A. in 2006

59

Reinforcement in Corporate Governance

Expansion of the Compensation Committee through the creation of

the Appointments and Compensation Committee, which will, in

addition to provide guidance on the policy of compensation for the

directors of the subsidiaries, analyze and propose names for

appointment to the Executive Board, make known situations of

potential conflict of interests and propose criteria for evaluating the

activities of the Board of Directors;

Election of the fifth independent member of the Board: Dr. Gustavo

Loyola, former chairman of the Brazilian Central Bank;

Approval of an age limit (75 years) to members of the Board;

Approved the Internal Charter of the Board of Directors, which

establishes rules of functioning, functions, self-evaluation and others.

Creation of Shareholder Value

60

R$

776 807 854 876949 920

1,0301,141

1,333 1,352 1,425 1,460 1,498

714

0.71 0.75 0.77 0.84 0.91 1.001.19 1.21 1.29 1.32 1.35

0.810.680.63

0

200

400

600

800

1,000

1,200

1,400

1,600

1Q/03 2Q/03 3Q/03 4Q/03 1Q/04 2Q/04 3Q/04 4Q/04 1Q/05 2Q/05 3Q/05 4Q/05 1Q/06 2Q/06

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

1.80

2.00

Earnings per ShareNet Income

R$ million

12.4%

13.4%

NB: Earnings per share was adjusted to reflect the 900% stock split carried out in Oct/05.

Net Income and Earnings per Share

61

US$

* Until August, 30

Preferred Shares Raises

0

100

200

300

400

500

600

700

800

900

1.000

1.100

1.200

1.300

96 97 98 99 00 01 02 03 04 05 06

Itaú (1)

Itaú (2)

Bovespa

735

277277

1,077Itaú(1) Itaú(2) Ibovespa(3)

10 years 26, 83% 22,07% 10,71%

5 years 39,45% 34,42% 27,60%

12 months 48,80% 44,76% 43,49%

Annual Average Valorization – US$

(1) With Dividend Reinvestment Program (2) Without Dividend Reinvestment Program (3) São Paulo Stock Exchange Index

Increase of US$ 100 invested in Aug/96 to Aug/06(*)

Russian Crises

Real Depreciation

Asiatic Crises

Argentina Crises

WTC Atack


Increase on FED Rates

Silvio de CarvalhoExecutive Director

9th Annual Latin America ConferenceLondon 11 to 13 September, 2006

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