investor relations | 1 investor relations consolidated earnings 3 rd quarter 2006 november 10 th,...
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Investor Relations | 1
Investor Relations
Consolidated Earnings
3rd Quarter 2006
November 10th, 2006
Unibanco and Unibanco Holdings, S.A.
Investor Relations | 2
Annualized ROAE (%) Stockholders’ Equity (R$ Bln)
Performance
9.8
2Q06
9.0
3Q053Q04
7.9
10.1(1)
3Q06 9M05 9M069M04
R$ Millions
9.0
7.9
21.3%
16.4%
23.1%
Net Income(1)
Operating Income
24.7%
23.3%
17.8%
24.8%
+ 19%
+ 19%
3Q06/3Q053Q06
566
906
9M06
1,634
2,609
+ 23%
+ 21%
9M06/9M05
10.1(1)
(1) Before the extraordinary event
Investor Relations | 3
• Interest on Capital Stock/Dividends of 2006 will disregard the extraordinary effect of the goodwill amortization
Goodwill Amortization
5 years
10 years
Goodwill amortization
period:
Before Extraordinary Event
Extraordinary Result
After Extraordinary Event
• R$460 million accounted as an Extraordinary Result
3Q06
566
(460)
106
10,070
(460)
9,610
9M06
ROAE9M06
23.1%
16.9%
1,634
(460)
1,174
Stockholders´Equity
Net Income
R$ Millions
Investor Relations | 4
1,062
598
Former Criteria - 10 years
New Criteria - 5 years
GoodwillBalance Sep-06
GoodwillBalance Sep-06
Amortization
Amortization
Goodwill Amortization Expenses
• R$(464) million - Impact in net income due to reduction in the
goodwill amortization period from 10 to 5 years.
R$ Millions
(46) (176) (169) (113) (76) (18)
4Q06 2007 2008 2009 2010 2011
(37)
2012to
2016
4Q06 2007 2008 2009 2010 2011
-
2012to
2016
(156) (167) (171) (175) (86) (270)
• The R$(464) million does not consider the goodwill amortization related to the 3Q06.
Therefore, the net income of R$566 million was impacted by a goodwill
amortization expense of R$ 33 million related to this quarter.
Investor Relations | 5
Extraordinary Result in 3Q06
Net Income before the extraordinary event 566
Extraordinary Result in the Period (460)
Extraordinary Goodwill Amortization (464)
Fiscal Effect of Goodwill Amortization 158
Additional Provision for Loan Losses (net of taxes) (50)
Provision for Fiscal and Labor Contingencies (net of taxes) (108)
Minority Interest 4
Net Income after the extraordinary event 106
Extraordinary Result
R$ Millions
Investor Relations | 6
Destaques
Loan Portfolio
Improvement of loan portfolio quality 3.3% growth in the quarter Up 17.5% in 12 months. Highlight: 30.2% growth in credit card portfolio
Assets Unibanco total assets surpassed the mark of R$100 billion in 3Q06
Reduction of 13.3%, 3Q06 versus 2Q06Provision for
loan losses
Results
23% net income growth, 9M06 versus 9M05 (21% growth in operating income)
Financial Margin (before provisions for loan losses) grew to 10.4% in 9M06, vis-a-vis 10.0% in 9M05 – despite declining interest rates
Highlights
Investor Relations | 7
Highlights
Units
UBBR11
Efficiency
15% gain in 3Q06, while the Ibovespa stayed flat
Larger weighting in the Ibovespa index: 1.935% (0.984% in May, 2005)
Efficiency ratio of 48.5% in 9M06, a 400 b.p. improvement over 9M05 (52.5%)
0.7% variation in personnel expenses, 3Q06 versus 2Q06
Insurance
Technical Reserves: R$7.9 billion in September 2006, compared to R$6.7 billion in September 2005
94.5% combined ratio in 9M06, from 99.3% in 9M05
50.3% loss ratio in 9M06, from 53.7% in 9M05
Investor Relations | 8
Financial Indicators
Profit from Financial Intermediation
Total Assets Loan Portfolio
Earnings per Unit (R$)
Sep-05 Dec-05 Mar-06 Jun-06 Sep-05 Dec-05 Mar-06 Jun-06Sep-06 Sep-06
3Q05 4Q05 1Q06 2Q06 3Q06 3Q05 4Q05 1Q06 2Q06 3Q06
0.33
0.37 0.36
0.380.39
2,481
2,141
2,262
2,357
2,392
88,585
91,831
93,770
98,217
101,999
36,872
39,87539,684
41,929
43,323
R$ Millions
Investor Relations | 9
Income Statement
3Q06 2Q06 3Q05 9M06 9M05
Profit from Financial Intermediation afterProvisions for Loan Losses
(+) Fees from Services Rendered
(-) Personnel & Administrative Expenses
(+/-) Other Operating Income / Expenses
(=) Operating Income
(+/-) Non-Operating Income
(+/-) Income Tax and Social Contribution
(Effective Income Tax Rate)
(-) Profit Sharing / Minority Interest
Net Income(1)
1,724 1,638
901 847
(1,373) (1,324)
4,742
2,381
(3,744)
(1) Before the extraordinay event of goodwill amortization.
(383) (398)
869 763
1 (1)
(159) (170)
(163) (117)
548 566 475
21% 25%
(1,217)
2,162
15
(465)
(383)
1,634 1,329
24%
R$ Millions
1,902
909
(1,458)
(447)
906
(27)
(155)
(158)
21%
5,341
2,673
(4,186)
(1,219)
2,609
(29)
(461)
(485)
21%
Investor Relations | 10
9M069M05
Performance – 9M06 versus 9M05
Fee Income
Core Deposits
Loan Portfolio
Financial Margin before Provision
Provision for Loan Losses
Adm. Expenses Operating Income
Net Income
9M05 = 100
100 100
126
100
121
100
151
117
100 100
112100 100
123
112121
Investor Relations | 11
Financial Margin
Provision for Loan Losses/Financial Margin
3Q05 2Q06 3Q06 9M05 9M06
Post Provision Financial Margin Financial Margin
23.5% 27.9% 23.3% 20.8% 26.1%
10.6%10.7% 10.7%
10.4%10.0%
7.9%8.1%7.6%
8.1%7.6%
Investor Relations | 12
Provisions for Loan Losses / Financial Margin
3Q05 4Q05 1Q06 2Q06 3Q06
23.3%
23.5%
29.0%27.2% 27.9%
-20 b.p.
Investor Relations | 13
Loan Portfolio Growth
Jun-06 Sep-06Sep-05
17,995
Retail
Wholesale
17.5%
3.3%
1.7%
36,872
41,92943,323
5.5%
23,934
17,995
24,338
21,193
18,98515,679
R$ Millions
Investor Relations | 14
Loan Portfolio Growth – Individuals and Corporate
Corporate
Individuals
Sep-05 Jun-06 Sep-06
Main Highligths Quarter Year
Sep-05 Jun-06 Sep-06
R$ Millions
R$ Millions
Branch Network
Credit Cards
Car Loans
Consumer Finance Companies
SMEs
Large Corporate
2.1%
14,434
16,04816,383
13.5%
20.1%
22,438
4.1%
25,88126,940
-5.7%
-18.1%
5.2%
0.9%
5.5%
4.4%
2.6%
-41.7%
30.2%
17.7%
21.1%
20.4%
5.3%11.9%
Motorcycle Financing
Investor Relations | 15
Credit Cards
Jun-04 Dec-04 Jun-05 Dec-05 Jun-06
Total Cards
9.7
Credit Cards
19.0
28.7
5.0
10.0
15.0
20.0
25.0
Private Label Cards
30.0
Sep-06
In millions of cards
Investor Relations | 16
114%
109%112%
Coverage
Sep-05 Jun-06 Sep-06
E-H Portfolio
D-H Portfolio 87%
81%
66%
Sep-05 Jun-06 Sep-06
Loan Portfolio, by risk level
93.1% 93.3%
Sep-05 Jun-06 Sep-06
AA-C92.7%
6.7% D-H7.3% 6.9%
Loan Portfolio Quality
Investor Relations | 17
Sep-05 Jun-06 Sep-06
389
548
597
+53.5%
Additional Allowance for Loan Losses
+8.9%
R$ Millions
Investor Relations | 18
Loan Portfolio Coverage
Sep-06 Jun-06 Sep-05
Allowance for Loan Losses / Loan Portfolio
Consumer Finance Companies
Credit Cards
Commercial Bank - Individuals
Auto Financing
SMEs
Retail
Wholesale
Unibanco Consolidated
12.4%
9.8%
9.4%
4.6%
6.6%
7.9%
3.4%
5.8%
11.0%
8.5%
8.8%
4.8%
5.7%
7.2%
3.6%
5.6%
10.0%
5.2%
8.1%
3.3%
4.2%
5.6%
3.9%
4.9%
Investor Relations | 19
Deposits and Assets under Management
Sep-06 Jun-06 Sep-05
Demand Deposits
Savings Deposits
Core Time Deposits
Core Deposits
Time Deposits
Assets Under Management (B)
Total Deposits + Debentures + AUM (A+B)
Total Deposits + Debentures (A)
Debentures
Core Deposits / Total Deposits
4,4054,469 3,505
5,1875,558 5,524
4,2014,648 2,628
13,79314,675 11,657
24,98422,096 22,897
84,92386,280 72,937
5,065 7,034 2,683
43,84243,805 37,237
41,08142,475 35,700
40% 36% 34%
R$ Millions
Investor Relations | 20
Core Deposits Growth
Core Deposits(1)Source: Brazilian Central Bank, preliminary data
Brazilian Financial System (1)
Core Deposits Evolution
Sep 06vs
Sep 05
Core Time Deposits
Sep 06vs
Jun 06
R$ Millions
Sep-04 Sep-05 Sep-06
Sep 06vs
Sep 04
Brazilian Financial System Unibanco
Credit Core Deposits Core/Credit
25.9%
10.8%
6.4%
4.5%
1,030
2,628
4,648
39.3%
18.5%
Mar-06Dec-05 Jun-06 Sep-06
Dec-05=100Dec-05=100
118
109
31%
34%
Mar-06Dec-05 Jun-06 Sep-06
102
112
42%
38%
Investor Relations | 21
Personnel and Administrative Expenses
2Q06 3Q053Q06 9M059M06
Personnel Expenses 548
Other Administrative Expenses 910
Total 1,458
518
806
1,324
544
829
1,373
1,634
2,552
4,186
1,431
2,313
3,744
3Q06/2Q06 3Q06/3Q05 9M06/9M05
Total
Accounting reclassification in Redecard´s operations
134
36
85
36
442
36
Subtotal 9849 406
Organic growth
Others
6815 220
3034 186
Variations
R$ Millions
Investor Relations | 22
Efficiency Ratio
Efficiency Ratio Evolution
RevenuesEfficiency Ratio Expenses
47.5%
51.4%
61.2%
3Q04 3Q05 2Q06
49.8%
3Q06
2,1362,576
2,891
1,308 1,3241,373
2,930
1,458
7,125
3,744
8,636
4,186
9M05 9M06
52.5%
48.5%
R$ Millions
Investor Relations | 23
Insurance and Private Pension Plans
3Q05 2Q06 3Q06
3Q05 2Q06 3Q06
Sep-05 Jun-06 Sep-06
Technical ReservesPremiums Earned
Combined Ratio Extended Combined Ratio
Private Pension Plans
Insurance
3Q05 2Q06 3Q06
95.6%94.0%
99.5%
87.1%
85.7%86.3%
435
487
52620.9%
4,9755,864 6,027
1,703
1,729 1,8296,678
7,8567,593
17.6%
R$ Millions
Investor Relations | 24
Traditional Products Private label and co-branded Ipiranga credit cards
New Products Personal credit Consumer credit Insurance
Place and Target Markets 4,200 service centers Retail consumer network Retailers
Partnerships – Unibanco and Ipiranga
Investor Relations | 25
Partnerships – Unibanco and VR
Cartão Smart VR Refeição (Smart VR Meal Card) Cartão Smart VR Alimentação (Smart VR Supermarket Card) Cartão Smart VR Auto (Smart VR Auto Card) VR Delivery VR Boas Compras (VR Shopping) Posto de Benefícios (Benefit Store) Payroll Loan Credit Card Credit Card Receivable Account Group Life Insurance Payroll Payroll Loans Overdraft Facilities Tarifa Zero (No Fees) Pension Plans Credit Lines
Investor Relations | 26
Development of a Joint Venture in the segment of payroll loan segment
Establishment of a financial company to operate as a partnership, combining Unibanco’s scale, products and services with Banco Cruzeiro do Sul’s expertise in managing alternative distribution channels
Operating agreement to grant funding to Banco Cruzeiro do Sul
Partnerships – Unibanco and Banco Cruzeiro do Sul
Investor Relations | 27
Save the date
Presence of Unibanco´s main executives
Date: November 23rd, 2006
Time: 3:30 p.m.
Location: Hotel Unique – Av. Brigadeiro Luis Antonio, 4,700
APIMEC Public Analyst Meeting
Investor Relations | 28
Investor Relationsphone: 5511-3097-1980
fax: 5511-3097-1585email: [email protected]
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, Junkets, 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.