1 banco itaú s.a. conference call 3 rd quarter of 2002

1

Banco Itaú S.A.Conference Call

3rd Quarter of 2002

2

Income StatementR$ Million

(Except where shown)

Total Assets

2nd Q./02 Var. (%)3rd Q./02

Financial Margin

Provisions for Loan Losses

Service Fee Income

Administrative Expenses

Recurrent Income

Extraordinary Results

Net Income

2,803

(682)

1,042

(1,880)

640

(0)

639

99,014

2,060

(512)

1,004

(1,756)

567

(23)

544

86,385

36.1

33.2

3.8

7.1

12.9

-

17.5

14.6

3

Credit Operations

(*) On September 30, 2002

R$ Million

Credit Operations Credit Operations and Guarantees

14,05816,890

23,67416,077

19,596

27,253 33,799

29,615

14,414

16,916

34,282

39,687

1997 1998 1999 2000 2001 2002*

4

Credit Portfolio by Currency (*)

Indexed in Foreign Currency In Foreign CurrencySubtotal

In Local Currency Total

Sep 30, 02

(*) Including Endorsements and Sureties

Jun 30, 02 Sep 30, 01Variation

Sep/02 – Jun/02Variation

Sep/02 – Sep/01

R$ Million

4,302 8,219 12,521

27,166

39,687

3,883 5,821

9,704

25,135

34,839

4,326 4,978

9,304

24,182

33,485

10.8 % 41.2 %

29.0 %

8.1 %

13.9 %

-0.5 % 65.1 %

34.6 %

12.3 %

18.5 %

5

Non Accrual and Coverage Ratios

Coverage Ratio (*)Coverage Ratio (*)

Total Non Accrual

Individuals Non Accrual

Companies Non Accrual

(*) Provision for Loan Losses / Non Accrual

Non Accrual Ratio %Non Accrual Ratio %

190% 189% 186% 173% 168% 164% 172%

Mar.01 Jun.01 Sep.01Dec.01 Mar.02 Jun.02 Sep.02

9.93

1.21

11.10 11.6212.67 12.90

1.551.50 1.73 1.66

5.905.665.014.394.254.21

5.60

Mar.01 Jun.01 Sep.01 Dec.01 Mar.02 Jun.02 Sep.02

6

R$ Million

(Constitutions) / Reversals in ResultAdditional

MinimumRequired

Provision for Securities Devaluation

Provision for Derivative Financial Instruments – Assets

Provision for Derivative Financial Instruments – Liabilities

Provision for Loan Losses

Total

(1,189)

-

-

(31)

(1,220)

(51)

(968)

699

(651)

(971)

Total

(1,240)

(968)

699

(682)

(2,191)

3rd Quarter of 2002Balance

Sep 30, 02

(3,969)

(1,293)

880

(3,262)

(7,644)

Provisions

7

564348 Result derived from Investments Abroad

3rd Q/02

(1) 1,113 (634)

479 (131)

Foreign Exchange Variation on Investments AbroadEffect Foreign Exchange Risk Management on Investments Abroad (Net)Results AbroadFunding Expenses (CDI)

2nd Q/02

785(93)

692 (128)

Investments AbroadR$ Million

196 145 Result affected by Exchange Rate

2nd Q/02

564266

(553) (3) (132)

-

Results of Investments AbroadResults of Local Operations affected by Exchange Rate (Net)Reversal/(Constitution) of Additional Provision for Securities (Net)Complement of the Provision to “marked-to-market” – AOLAExpenses related to mark-to-market adjustments of fiscal incentive options

3rd Q/02

348 724

(661)(2) (36)

(179)

(1) After provision for US$ = R$ 3,50, excluding foreign exchange variation of the investment in AOLA of R$ 233 million in the 3rd quarter of 2002 and R$ 128 million in the 2nd quarter of 2002.

(2) Provision basically referring to the variation of AOLA´s share market quotation: from US$ 0.640 in 06/28/02 to US$ 0.245 in 09/30/02.

(3) Provision basically referring to the variation of AOLA´s share market quotation: from US$ 2.25 in 03/29/02 to US$ 0.640 in 06/28/02.

Foreign Exchange Variation onInvestments Abroad - Considering the Funding Cost

8

R$ Million

Administrative Expenses

3rd Q./02

888

397119111214

46992

1,880

2nd Q./02

800

356116113216

-956

1,756

Variation

88

413

(2)(2)4636

124

55.3 %49.6 % Efficiency Ratio

- As a result of the 2002/2003 Collective Labor Agreement in September 2002, the Bank incurred additional expenses of R$ 91 million, comprising R$ 46 million for the payment of bonuses to employees and R$ 45 million for compensation and payroll charges .

Personnel Expenses

Remuneration Social Charges Social Benefits / Training Dismissals / Labor Suits Allowance Work ConventionOther Administrative Expenses

Total

9

Market Value

In Result

MarketValue In Equity

RecordedValue

Unrealized Income / (Loss) (2) (3)

(1) Does not include the reclassification of additional provision in the amount of R$ 1 billion.(2) Includes unrealized gains to minority interest amounting to R$ 93 million.(3) Does not consider the corresponding fiscal effects.

R$ Million

2,336

(1,441)

(40)

231

48

331

1,466

24,563

26,000

6,990

11,642

4,069

- Securities and Derivatives

Provision – Available for Sale Securities Reclassification of Additional Provision- Loans Operations

- Other Assets

- Time and Interbank Deposits and Funds

from Acceptance and Issuance of Securities

- Other

Total Unrealized

2,336

(1,000)(40)

231

48

326

1,902

22,227 (1)

26,040

6,760

11,690

4,405

10

Funding and Fund Management

R$ Million

Sep 30, 01(C)

Sep 30, 02(A)

Jun 30, 02(B)

Evolution %(A/C)

Evolution %(A/B)

Deposits

Demand Deposits Savings Deposits Time DepositsManaged Funds

Investment Funds Managed Portfolio

Total Funds

26,743

6,09415,550

5,09953,478

47,7535,725

80,221

28,105

6,35616,019

5,73056,243

49,8196,424

84,348

19.3

25.712.133.3

2.7

0.421.1

8.2

31,891

7,66217,433

6,79654,893

47,9616,932

86,784

13.5

20.68.8

18.6(2.4)

(3.7)7.9

2.9

11

Solvency Ratio

R$ Million

Sep 30, 02

12,532

(718)(401)

11,413

Sep 30, 02 Effect Res.3156

12,532

(1,437)(401)

10,695

Referential Equity

Capital Allocation to Foreign Exchange RiskOther

Adjusted Referential Equity (D)

Jun 30, 02

11,826

(2,440)(356)

9,031

67,436 67,436 Total Risk Weighted Assets (C = A + B) 58,940

61,5475,889

61,5475,889

Weighted Assets (A) Weighted Off-Balance Sheet Exposures (B)

54,1464,794

15.9 %16.9 % Solvency Ratio (E = D / C) 15.3 %

- BACEN resolution 3,155 changed from 50% to 75% the capital allocation to cover foreign exchange exposure. BACEN resolution 3,156 changed this capital allocation to 100%.

12

Corporate Reorganization

12

13

• The companies and its several financial business lines will be

controlled by Banco Itaú Holding Financeira S.A. (ITAÚ

HOLDING). The Banco Itaú Holding Financeira S.A. will

incorporate all the shares of Banco ITAÚ S.A., which will thus

become a wholly owned subsidiary. In the future, Banco ITAÚ

BBA will also become a subsidiary of ITAÚ HOLDING.


14

Intermediary

52.15%

47.85%

100%

Banco Itaú Holding

Financeira S.A.

Investimentos Itaú S.A. - Itaúsa

Banco Itaú S.A.

Free Float

Present

52.15%

47.85%

Banco Itaú S.A.


Free Float


15

53.54%

46.46%

100%

Final

95.75%


Banco Itaú Holding Financeira S.A.

Free Float

Banco Itaú BBA S.A. Banco Itaú S.A.


16

• The corporate reorganization aims at:

– Provide a greater autonomy to the wholesale bank operations.

– In the future, other areas of the business can have more autonomy.

– Decentralize management, enhancing growth of the business, but keeping a

centralized control in Itaú Holding.

– Provide more transparency to the financial statements.

– Maximize capital allocation and utilization among the various segments.


17

• The corporate reorganization will not imply any stockholder

dilution or any change in the rights enjoyed by the shares

currently held, since the stockholders will receive shares in

ITAÚ HOLDING of the same type and with the same

characteristics as ITAÚ. ITAÚ HOLDING’s bylaws will

extend the same rights as those already provided under those of

ITAÚ.

Stockholders Rights

18

• The inclusion of ITAÚ HOLDING in the group structure will

not change ITAÚSA stake or the remaining stockholders of

ITAÚ;

• The management of ITAÚ continues as the management of

ITAÚ HOLDING, with the same members of the

Administrative Council and some members of the Executive

Board of ITAÚ;

• The exchange ratio between ITAÚ’s and ITAÚ HOLDING’s

stocks will be 1:1.


19

• Granted by FED at February 20, 2002;

• FED will be requested to authorize the transference of the Financial

Holding Company status from ITAÚ to ITAÚ HOLDING.

Status of Financial Holding Company

20

•There will be no change in the operations and business

transacted with customers, creditors and suppliers;

•With this transaction, ITAÚ and BBA once more reiterate

their confidence in the future of Brazil.


21

Association with Banco BBA

November 2002

22

1. Objective of Association

2. Investment in Banco BBA

Agenda

23

Itaú´s Strategy

Investment in BBA

Internal Business Segmentation

Successful Bank

History of Posting High Returns

Strong presence in the Wholesale

Segment

Objective of Association

24

Investment in Banco BBA

+

New Bank

ITAÚRetailCorporateAsset Manag./Private BankFinancing (Vehicles), etc.

BBACorporatePrivate BankBrokerageFund PortfolioFinancing

ITAÚWill keep focusing retail

operationsPrivate Bank (Incl.BBA)

Fund Portfolio (Incl.BBA)Financing (Incl.BBA)

Brokerage

ITAÚ BBAITAÚ BBA begins its existence as the largest wholesale bank

in the countryCorporate

Investment Bank

Pres

ent

Futu

re

25

• Largest Capital Base of Brazil (R$ 14.8 billion);

• ITAÚ BBA´s capital will be increased by approximate R$ 1.2

billion.


26

Assets 99,014 20,792 119,805

ITAÚ (1) BBA (2) TotalR$ Million

Corporate Loans 23,921 7,486 31,407

Others Loans 10,657 0 10,657

Consumer Finance Loans 5,109 1,153 6,262

21.0%

31.3%

-

22.6%

Deposits 32,498 4,703 37,201 14.5%

Managed Funds and Portfolios 54,893 11,325 66,218 20.6%

Capital Base 11,413 1,856 14,826 -

Change

(1) Data as of September 30, 2002, (2) Preliminary non audited data as of September 30, 2002

If the new structure had been in place at the end of the third quarter, the BIS ratio would have been

18.4%.


27

Price

Cash 671

Subordinated Debt – issued in R$ and indexed to CDI (5 years)

619

Shares 544

Subordinated Debt – issued in US$ and indexed to Libor + 1.25% p.a. (12 years)

1,423

Total 3,257

Equity Value 1,735

Goodwill 1,522

Multiple 1.877

R$ MillionNominal Value

671

598

524

813

2,606

1,735

871

1.502

Market Value

a) Discounted using CDI + 0.95% p.a.b) Discounted using Libor + 8.5% p.a. (if adopted Libor+4.83% - the cost of the last emission –

the value would be R$ 1,066 million).c) Market Value of PN stocks on November 4, 2002 – R$ 151.99

a)

c)

b)

1 banco itaú s.a. conference call 3 rd quarter of 2002

Documents