Xiamen, 10 th September 2007

Transcription

1 Bilateral Meeting Conselho Empresarial Brasil China (CEBC) BRAZIL OUTLOOK Roberto Dumas Damas Banco Itau BBA Shanghai Representative Office Xiamen, 10 th September 2007

2 Itaú Group A Global Brazilian Financial Institution The Itaú Group has an important presence in key financial centers, strong recognition and a broad range of products Member of the Dow Jones Sustainability Group Index 06/07 1st Bank of the Year 2006 Best Brazilian Bank Best Brazilian Bank Best Brazilian Bank Latin America 2006, 2005, 2004, , 2003, 2002, , 2003, 2002, 2001 Itaú Europa London Branch Itaú Europa Itaú BBA NY Rep. Office Itaú Securities (NY) Itaú NY Branch 7th consecutive year The only Latin American bank member since the DJSI creation Itaú s shares are traded on the Sao Paulo, New York and Buenos Aires Stock Exchanges Itaú Europa Luxembourg Itaú Tokyo Branch Itaú BBA Shanghai Rep. Office Itaú Securities (Hong Kong) Itaú Bank (Cayman) Itaú BBA Nassau Branch Banco Itaú Banco Itaú BBA In August 2006, Itaú acquired BankBoston operations in Chile and Uruguay (still pending approval) Itaú BBA Uruguay Branch Itaú BBA Buenos Aires Rep. Office Banco Itaú Buen Ayre Sarbanes-Oxley: Itaú Holding is the first foreign bank listed on the NYSE to attain all Section 404 requirements of Sarbanes-Oxley Act, one year prior to the compliance deadline set by the U.S. authorities. 2

3 Itaú Holding Financeira Highlights Performance leadership is reflected on the high market capitalization and outstanding results Selected Pro Forma Figures (consolidated) 1 Return on Equity ROE (% - Y/Y) # of employees 62,421² 1 Net income US$ 0.9 billion Total assets US$ billion Loan book (including guarantees) Shareholders Equity US$ 49.3 billion US$ 12.2 billion Note: 1 Recurrent ROE (excluding Goodwill amortization from BankBoston Brazil acquisition) Assets under Management US$ 90.8 billion Market Cap US$ billion Market Cap US$ 42.1 billion Note: 1 As of March 31 st Includes 2,504 employees from Itau Chile and Itau Uruguay 3

4 SECTION 1 Brazil Outlook - Macroeconomics

5 Inflation CPI-A Until 1994 inflation in Brazil was a chronic phenomenon that jeopardized production capacity. 3000% 2500% 2477% 2000% 1500% 1000% ``` 500% 0% Year 25% nevertheless, after July 1994, stabilization program managed to slash inflation to international levels 20% 15% 10% Source: Central Bank of Brazil 5% 0% Year 3.1% 5

6 Current Account and Trade Balance From 1981 to 1994, Brazil had an erratic trend on its current account.. 20,000 Current Account US$MM US$ MM 10, ,000-20, despite Brazil s favorite trade balance -30,000-40,000 50,000 Year Trade Balance US$MM 40,000 30,000 US$MM 20,000 10, , Source: Central Bank of Brazil Year 6

7 Current Account and Trade Balance From 1994 to 1999, stabilization program based on pegged FX deteriorated current account dramatically.. 20,000 10,000 Current Account US$MM Inflation Targeting US$ MM - -10,000-20, ,000-40,000 50,000 Year Trade Balance US$MM Despite successful results in lowering inflation, current account became to follow an unsustainable trend. US$MM 40,000 30,000 20,000 10, , Source: Central Bank of Brazil Year 7

8 International Reserves and External Debt Thanks to higher productivity and world economic growth, the built up of International reserves allowed the country to reduce significantly its external exposure and ended up its debt with International Monetary Fund (IMF) US$bn International Reserves (US$bn) US$162bn T otal External Debt (US$bn) 250. as well as to reduce its external debt by 35% since 1998 US$bn Source: Central Bank of Brazil

9 External Solvency Indicators Since 2002, Brazil has witnessed an impressive improvement in terms of liquidity building important buffer against international turbulences Source: Central Bank of Brazil 9

10 Brazil Country Risk (EMBI+) Better solvency indicators indeed led to better perceived country risk by international market players Brazil Country Risk EMBI+ and Relative EMBI+ 1,600 1,400 EMBI+1445 bps Relative EMBI bp ps 1,200 1, EMBI+ 211bps Relative EMBI Mar-07 Oct-06 May-06 Dec-05 Jul-05 Feb-05 Dec-01 Source: JP Morgan 10

11 Brazil Rating - Moody s Senior Unsecured / Foreign Currency Nov-86 Dec-87 Oct-89 Nov-94 Sep-98 Oct-00 Aug-02 Sep-04 Oct-05 Aug-06 Aug-07 Upper Inv. Lower Inv. Non-Inv. Lower Non-Inv. Aaa Aa1 Aa2 Aa3 A1 A2 A3 Baa1 Baa2 Baa3 Ba1 Ba2 Ba3 B1 B2 B3 Caa1 Caa2 Caa3 Ca C Outlook Stable 11

12 Brazil Rating - S&P S&P - Issuer Credit Rating / Foreign Currency - - Dec-94 Jul-95 Apr-97 Jan-99 Jan-01 Jul-02 Sep-04 Feb-06 May-07 Upper Inv. Lower Inv. Non-Inv. Lower Non-Inv. AAA AA+ AA AA- A+ A A- BBB+ BBB BBB- BB+ BB BB- B+ B B- CCC+ CCC CCC- CC C Outlook Positive 12

13 Brazil Rating - Fitch Long Term Issuer Default Rating - Dec-94 Jan-99 Feb-00 May-00 Jun-02 Oct-02 Nov-03 Sep-04 Jun-06 May-07 Upper Inv. Lower Inv. Non-Inv. Lower Non-Inv. AAA AA+ AA AA- A+ A A- BBB+ BBB BBB- BB+ BB BB- B+ B B- CCC+ CCC CCC- CC C Outlook Stable 13

14 SECTION 2 Business Opportunities 14

15 Infrastructure Business Opportunities Macroeconomic stabilization is complete and well based to face international turmoil due to high level of international reserves and low external debt. Nevertheless, Brazil is thirsty for investments in infra structure. The Federal and State government have no available resources to invest in important sectors of the economy. If Brazil wants to pursue a sustainable path of growth, it has to attract the private sector (domestic and mainly international) to invest in order to avoid production bottlenecks. Investments in electric energy generation, logistics (highway and railway) are crucial to seek lasting economic growth in the long term. 15

16 Electric Energy - Business Opportunities Should Brazilian economy grow at 5%p.a. in average until 2010, the current situation foresees a energy deficit scenario. Demand Scenario 90,000 Energy Supply (average) 5% GDP 2% GDP 4% GDP 80,000 70,000 average MW 60,000 50,000 40,000 30,000 20,000 10, nevertheless, given the time constrain to build large hydro plants, the opportunity to establish new thermal plants based on biomass (sugar cane, ethanol) and coal are at large in Brazil. 16

17 Infrastructure Business Opportunities In June 2007, the Federal government along with the Ministry of Transports launched a very ambitious program named National Plan of Logistics and Transports (PNLT), for the next 15 years. Source: Ministerio dos Transportes Through Public Private Partnership (PPP) and concession grants to private sector, the government aims to accomplish US$ 86.2bn of investments from 2007 to

18 Highway - Business Opportunities 1,724,931 Km Highway Net Ppp Paved Not P paved Under P construction BRAZIL Highways 196,244 Km 58, 149 Km 115,360 Km 22,735 Km Paved Federal State Municipal Source: ANTT Ministerio dos transportes 11% Highway Conservation 120% 100% 80% 60% 66% 52% 39% 89% 52% 56% 40% 20% 34% 48% 61% 48% 44% 0% Not Paved Paved Source: CNT 2004 Good Bad 18

19 Railway - Business Opportunities Extension of 28,977Km as 28,225 Km concession granted 90,119 cars 2,394 locomotives 11 concessionaires CVRD 9,890Km ALL do Brasil: 7,225 Km MRS Logistica: 1,674 Km Others: 9,436 Km 19

20 Railway Business Opportunities According to estimates of National Association of Railway Transport (ANTF), railway net should have 55,000 Km of extension or 89% higher!!!!!! Approximately 85% of the products transported by railways is towards international markets (exports):. 83% iron ore. 8% soybeans. 7% steel industry Envisages window of opportunities for international manufacturers. 20

21 Banco Itau BBA S.A. Shanghai Representative Office Room 1009, 10/F, One Corporate Avenue, No 222 Hu Bin Road Shanghai Phone: Xiamen, 10 th September 2007