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1
December 2003
Institutional Presentation
2
• Founded in 1924• Controlled by Moreira
Salles Group• Brazil’s oldest private
sector bank• 3rd largest private sector
bank
• Country’s largest consumer finance operation
• Universal Banking model– Retail banking– Wholesale banking– Insurance / Pensions– Wealth Management
(R$ billion - as of December 2003)
$69.6
Assets
$27.9
Loans
$25.4
Deposits
$7.2
Shareholders Equity
BIS Ratio 18.6%
Snapshot
3
Core Businesses
Retail Wholesale Insurance WealthBank Bank and Pensions Management
December 31, 2003
• Higher and Middle Income Individuals
• Lower Income Individuals
• Small Companies
• Credit Cards
• Consumer Finance
• Mortgage Finance
• Savings Account Holders and Retirees
• Savings, Capitalization, and Annuities
• Large and Middle Market Corporations
• Trade Finance
• Corporate Finance and Brokerage
• Project Finance
• Leasing
• Treasury
• Cash management
• Mergers and Acquisitions
• Life
• Automobile
• Property & Casualty
• Health
• Homeowners
• Pensions and Retirement Plans
• Asset Management
• Private Banking
4
Special Segment(R$350 < Monthly Income > R$ 1,300)
(R$1,300 < Monthly Income < R$4,000)
Large Companies
(Annual Sales > R$150 million)
Upper Middle Market(R$40 million < Annual Sales < R$150 million)
Lower Middle Market
(R$5 million < Annual Sales < R$40 million)
(Annual Sales < R$5 million)Small Business
Private Bank
(Financial Investment > R$1 million)
UniClass Segment
(Monthly Income > R$4,000)
Banco1.net (Virtual Bank)
(Monthly Income > R$800)
Exclusive Segment
Payroll
PrivateBank
WholesaleBank
RetailBank
IndividualsCorporate
Segmentation
5
The Businesses
6
Brand Positioning
Monthly income
over R$1,000
Monthly income beetween
R$350 and R$1,000
Monthly Income under R$350
17 million people
37 million people
12 million people - Retirees- Payroll
Brands targeted for all segments
- Checking-accountholders
Source: IBGE - 2000 census - Economically active population, over 10 years old
7
In Million
0.8
3.7 4.05.2 5.6 6.0
0.7
3.03.9 3.5
4.0
2.9 3.03.0
1.1 1.11.1
Dec-94 Dec-99 Dec-00 Dec-01 Dec-02 Dec-03
7.7
13.1 13.214.1
Note: Unibanco includes saving account holders and retirees, from 1999.
Operational Highlights
Client Base
8
1,0801,383
3,400
350
3,772
111
1,559
Dec- 99 Dec-00 Dec-01
500
5,459
5,616
CAGR = 34%
1,279
333
8,076
173
Dec-03
9,861
1,314
347
8,442
127
Dec-02
10,230
Dec-94...
711
226+
Note: Fininvest includes Fininvest stores and points-of-sale at retailers
Distribution Network Evolution
9
Wide Distribution Network
Fininvest Stores
PontoCred
LuizaCred
NetworkNetwork
TOTAL
Fininvest - Points of Sale
Branches & in-store branches
Corporate-site branches
Banco 24 Horas (ATMs)110 57 25181
654 258 1,384
8 14 53
36 25 105
North
Northeast
Mid-West
Southeast
South
63 225 1404,559
16 86
6 25 8376
65 52 297
4 217
1,02122
1,792
111
336
173
11,884
7,965
873
406
2,020
10
Direct Management Indirect Management
Consumer Companies
11
Main Indicators
R$ Million
Consumer Companies: Fininvest, Unicard, 50% LuizaCred, 50% PontoCred and 33.3% Credicard
Consumer Companies
2003 2002%
2003/2002
Billings 23,067 20,139 14.5%
Equity Income 504 407 23.8%
Credit Portfolio 4,060 3,511 15.6%
Loan Losses 765 881 -13.2%
Loan Losses / Credit Portfolio 18.8% 25.1% -630 b.p.
Volume of Transactions (in million) 338 274 23.4%
Consumer Companies (including Credicard Group)
12
R$ Million
Consumer Companies Under Management: Fininvest, Unicard, 50% PontoCred and 50% InvestCred.
Consumer Companies Managed by Unibanco
Main Indicators
Consumer Companies
Billings 10,088 9,277 8.7%
Equity Income 308 163 89.2%
Credit Portfolio 2,782 2,411 15.4%
Loan Losses 647 778 -16.8%
Loan Losses / Credit Portfolio 23.3% 32.2% -890 b.p.
Volume of Transactions (in million) 122 111 9.9%
2003 2002%
2003/2002
ROAE 51.7% 36.8% 1,490 b.p.
13
Main Indicators
R$ Million
Consumer Companies
2003 2002
2003/2002
Billings 5,428 4,823 12.5%
Equity Income 130 96 35.4%
Credit Portfolio 1,065 915 16.4%
Loan Losses 234 233 0.4%
Loan Losses / Credit Portfolio 22.0% 25.5% -350 b.p.
Number of Credit Cards (in thousands) 4,385 3,853 13.8%
ROAE 76.5% 64.0% 1,250 b.p.
14
R$ Million
Main Indicators
Consumer Companies
Billings 3,574 3,440 3.9%
Equity Income 159 53 200.0%
Credit Portfolio 1,358 1,202 13.0%
Loan Losses 355 498 -28.7%
Loan Losses / Credit Portfolio 26.1% 41.4% -1530 b.p.
ROAE 49.5% 23.5%
Administrative and Personnel Expenses 387 424 -8.7%
2600 b.p.
2003 2002%
2003/2002
15
Insurance + Private Pension Plans
Technical Reserves
R$ Million
Dec-02 Jun-03 Dec-03Insurance Private Pension Plans
4Q03 3Q03 4Q02 2003 2002
2003/2002
Billings + Premiums Written 788 728 630 3,373 2,460 37.1%
Net Income 54 57 62 258 254 1.6%
Equity Income 27 28 31 129 127 1.6%
825
2,7853,532
+26.8%
3,892
+10.2%
+40%
825781
2,004
809
2,723
821
3,071
16
Market Share – Premiums Written
Insurance
Source: SUSEP and ANS
Administrative Expenses / Premiums Written
1998 2000 2002 Nov-2003
7.21%
6.65%
4.90%
2.88%
17.1%
13.0%10.6% 9.8%
2000 2001 2002 2003
17
Combined Ratio
* Includes Garantech
Source: Susep
December 2003
Market Average 104.7
84.57%
93.87%99.80%
102.43%103.06%104.75%
107.07%108.28%108.91%
112.99%
AGF BRADESCO VERA CRUZ PORTOSEGURO
REAL ITAÚ SULAMERICA
UASEG HSBC CAIXASEGUROS
18
Ranking 2003
Leadership Fire Transportation Petrochemical Aviation D&O Extended Warranty Home* Corporate Pension*
* Second Position on this segments.
19
Consolidated Results
20
R$ Million
Performance Indicators
2003 2002
2003/2002
Net Income 1,052 1,010 4.2%
Earnings/1000 shares (R$) 7.65 7.29 4.9%
Operating income 1,906 1,083 76.0%
ROAE 15.3% 16.0% -70 b.p.
BIS Ratio 18.6% 15.7% 290 b.p.
Total Loans 27,917 26,751 4.4%
Deposits+Funds 52,302 44,372 17.9%
Stockholders' Equity 7,156 6,559 9.1%
Dividends/Interest on Capital Stock- net 362 340 6.5%
21
R$ Million
Financial Margin
2003 2002%
2003/2002
11,431 14,062
(4,923) (8,366)
6,508 5,696
(1,455) (1,837)
5,053 3,859
69,208 62,021
9.4% 9.2% b.p.
-18.7%
-41.2%
14.3%
-20.8%
30.9%
11.6%
2.2
Revenue from Financial Intermediation
Expenses on Financial Intermediation
Financial Margin before Provisions for Loan Losses (A)
Provisions for Loan Losses
Financial Margin after Provisions for Loan Losses
Total Average Assets (-) Fixed Assets (B)
Net Financial Margin (A/B)
22
In R$ Million
Consolidated Results
2003 2002 %
5,053 3,859 31%
2,838 2,616 8%
(4,578) (4,233) 8%
(1,407) (1,159) 21%
1,906 1,083 76%
11 29 -62%
1,917 1,112 72%
(493) 216 -328%
(372) (318) 17%
1,052 1,010 4%
Profit from Financial Intermediation
(+) Fee Income
(-) Personnel & Adm. Expenses
(+/-) Other Operating Income/Expenses
(=) Operating Income
(+/-) Non-Operating Income (expenses), Net
(=) Income Before Taxes & Profit Sharing
(+/-) Income Tax & Social Contrib.
(-) Profit Sharing/Minority Interest
Net Income
23
R$ Million
Securities Portfolio
Dec-03 % Porfolio Dec-02 % Porfolio
Trading Securities 5,845 39% 4,957 28%
Securities Available 3,452 23% 6,411 35%
for Sale
Securities Held
to Maturity 5,773 38% 6,610 37%
Total Securities 15,070 17,978
24
R$ Million
Loan Portfolio Breakdown
4.4%
Retail Bank
Wholesale Bank
10,881 11,401 12,123
15,870 15,223 15,794
Dec-02 Sep-03 Dec-03
+4.8%
-4.1%
-0.5%
+6.3%
+3.8%
+4.9%26,751 26,62427,917
25
Loan Portfolio Breakdown
Corporate
14,566
1,159 2,324
18,049
13,888
1,5143,064
18,466
Large Corporate Middle Market Small Companies Total Corporate
-4.7%
+30.6%+31.8%
+2.3%
5,225
1,462 2,015
8,702
5,453
1,6722,326
9,451
Total Individuals
+4.4%
+8.6%
+15.4%+14.4%
Fininvest / PontoCred /
LuizaCredUnicard / Credicard 2002
Individuals
2003
R$ Million
Multiple Bankand Other Companies
26
Loan Portfolio Breakdown
R$ Million
27,917
17.0% 12.2%7.9%
10.1%9.9%
9.8%
29.0% 33.9%34.5%
34.9% 34.5% 39.0%
9.0% 9.5% 8.8%Dec-02 Jun-03 Dec-03
26,751 26,195
91.0%90.5%
91.2%
AA-C Loan Porfolio / Total Loan Portfolio
AA
D-H
A
B
C
27
Non-Accrual Portfolio / Loan Portfolio
4.2% 4.4%5.5%
6.0%
4.8%
140.5%
126.5%
102.8%96.6%
115.1%
Dec-02 Mar-03 Jun-03 Sep-03 Dec-03
Non-Accrual Portfolio / Loan Porfolio
Coverage Ratio of Non-Accrual Portfolio
28
Net Write-Off / Loan Portfolio
Required Provision vs. Additional
Loan Portfolio
Additional Provision / Total Provision
Minimum Required Provision / Total Provision
2002 2003
5.2% 3.9% 87% 86%
13% 14%
Dec-02 Dec-03
29
R$ Million
Funding
25,988 25,357
18,38426,945
Dec-02 Dec-03
FundsDeposits
44,372
52,302
-2.4%
+46.6%
+17.9%
30
Deposits and Funds Under Management
Sep-03 Dec-02
Dec03-Sep03
Dec03-Dec02
R$ Million
Demand Deposits 2,729 2,309 3,251 420 (522)
Savings Deposits 5,918 5,509 5,722 409 196
Time Deposits 16,710 17,168 17,015 (458) (305)
Total Deposits 25,357 24,986 25,988 371 (631)
Funds 26,945 24,336 18,384 2,609 8,561
Deposits + Funds 52,302 49,322 44,372 2,980 7,930
Dec-03
31
Issues – Capital Markets
DateIssue Amount
(Million)Term Maturity Coupon Return (p.y.)
US$ 1.4 billion raised in 2003
EUROBONDS
Jan-03 US$ 100 1 year Jan/04 6.875% 7.000%
Jul-03 US$ 125 18 months Jan/05 4.000% 4.000%
Jun-03 US$ 105 6 years Jul/09 6.150% 6.150%
Nov-03 US$ 226 10 years Oct/13Libor + Libor +2.860% 2.860%
SECURITIZATION
Dec-03 US$ 2001st to 5th year Dec/08 7.375%
8.200%6th to 10th year Dec/13 9.375%
TIER II
Jan-04* US$ 100 18 months Aug/05 3.000% 3.050%
Jun-03 US$ 120 6 years Jul/09Libor +4.250%
Libor +4.250%
32
Net Revenue by Business
Net Financial Result
Banking Fees
Credit Cards
Insurance/Annuities/Pension Plans
Asset Management Fees
11%
7% 5% 4% 4%
12% 11% 11%
15% 21% 21% 19%
20% 22% 27% 25%
46% 40%37%
41%
1998 2000 2002 2003
33
Fee Income / Personnel Expenses
Fee Income / Personnel and Administrative Expenses
Fee Income / Personnel and Administrative Expenses
61.8% 62.0%
158.9% 160.1%
2002 2003
34
15.5%
23.0%
IPC-A
Unibanco
8.2%
Total Expenses
IPC-A
Unibanco
9.3%
3,963 4,2334,578
2001 2002 2003
R$
mill
ion
Personnel and Administrative Expenses x IPC-A
Total Expenses - Unibanco Consolidated
35
Unibanco Pessoas Human Resources
36
Human Resources
Critical Conditions to Strategy Positioning
Business units aligned with Unibanco’s goals
Employees’ commitment
Allows the long term strategy tracking
Objectives and challenges transparent to all employees
Balanced Scorecard (BSC)Internally known as
PDG – Painel de Gestão
37
ORGANIZATION FOCUSED ON
STRATEGY
Mobilize change through leadership
Strategic Management: 5 Main Principles
Executives’ CommitmentPerformance Culture
Mission / VisionStrategic MapsObjectives, Ratios and Initiatives
Relationship: Unibanco and Businesses UnitsBusinesses Units and Support Units
Strategy CommunicationPerformance and Potential EvaluationBonus based on performance
Planning and budget linked to BSC
Data systems and analysis
Translate the strategy into operational
terms
Align the organization to the
strategy
Make strategy a continual process
Make strategy everyone’s everyday
job
Human Resources
38
Balanced Scorecard Hall of Fame
Human Resources
Saatchi & Saatchi
Unibanco is now the first and only Latin American
institution to appear in the
Balanced Scorecard Hall of
Fame, title reserved for the companies that
excel in the implementation of
the Balanced Scorecard (BSC)
model.
39
PDG as an achiever to EVA (Economic Value Added)
Managing from a value creation standpoint
Making decisions intended at adding
market value to Unibanco
Results
Clients
Internal Processes
People and Technology
AC
HIE
VE
R:
PD
G
GVU
Managing from a value creation standpoint
Making decisions intended at adding
market value to Unibanco
Results
Clients
Internal Processes
People and Technology
AC
HIE
VE
R:
PD
G
GVUGVU
Human Resources
40
Social Responsibility
41
Social Responsibility – Instituto Moreira Salles
Created in 1990, committed exclusively to promote and develop cultural programs
Conceives and executes the majority of its initiatives
Priority to medium/long-term activities and projects
Aiming to make culture even more accessible to the
public
Web Site: www.ims.com.br
Instituto Moreira Salles
42
The country’s largest private complex dedicated to
culture and arts in Brazil.
Cultural Centers dedicated to photography, literature, music and history of Brazil.
Espaços Unibanco de Cinema, a network of 35 movie theatres showing high quality / independent films.
Cultural Centers Espaços Unibancode Cinema
Poços de Caldas
São Paulo
Belo Horizonte
Rio de Janeiro
São Paulo
Rio de Janeiro
Belo Horizonte
Porto Alegre
Fortaleza
Juíz de Fora
Social Responsibility – Instituto Moreira Salles
43
Brazilian Literature Brochures
Published twice a year by the Instituto Moreira Salles Institute since March 1996.
Each publication is a monography that leans over the most important Brazilian authors
Literary features, interviews, biographical data, declarations, photo’s archive and bibliography are some of the items that can found in these brochures.
Since 2003, São Paulo State Bureau has addopted the Brazilian Literature
Brochures to supply public schools and libraries.
Social Responsibility – Instituto Moreira Salles
44
2002 – New Concept
Main focus definition, concentrating on Unibanco’s social activities.
To Promote Education
Support dedicated to Non-Governamental Organizations or foundations focused on education and Unibanco Ecologia efforts directed to Environmental Education (Environment Defense and
Preservation)
Social Responsibility – Unibanco Institute
45
Target:Mainly teenagers and young grown-ups
Formal Education
Teacher´s Skill Development
Professional Education
Employability
Social Responsibility – Unibanco Institute
46
Closing Remarks
47
Corporate Governance
Unibanco HoldingsUnibanco
Chairman: Pedro Moreira Salles
Vice-Chairmen: Gabriel Jorge Ferreira
Pedro Sampaio Malan
Board Members: Israel Vainboim
Pedro Bodin de Moraes
Armínio Fraga
Chairman: Roberto Konder Bornhausen
Vice-Chairman: Pedro Moreira Salles
Board Members: Israel Vainboim
Tomas Zinner
Gabriel Jorge Ferreira
Carlos Alberto Cruz
Guilherme Affonso Ferreira
Koji Yamada
Unibanco
Board of Directors – as of end of January 2004
Tomas Zinner
48
Unibanco: Positioned for Growth
In the year of its 80th anniversary, Unibanco enjoys an unique position in the Brazilian financial market.
The largest consumer
credit franchise in Brazil.
Cutting-edge wealth
management expertise.
Wholesale bank Benchmark for the industry.
Alliance with the world’s largest
insurance company.
Great opportunities of
cross-selling.
Improving eficciency ratios.
Massive use of technology.
ExperiencedManagement
Team
Widespread distribution
network
Comfortable capital adequacy
ratio.
The largest credit card
operation in Brazil.
A full-range product offering
49
For further information contact our Investor Relations Area at
phone: 5511-3097-1626 / 1313fax: 5511-3813-6182
email: [email protected]: www.unibanco.com
(select Investor Relations option)
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. markets. 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.