1q04 earnings. highlights largest bank in brazil in total assets leadership in assets under...
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1Q04 Earnings1Q04 Earnings
HighlightsHighlights
Largest Bank in Brazil in Total Assets
Leadership in Assets Under Management
Leadership in loan Portfolio
Leadership in Total Funding
Customer Base
Customers in BB’s Internet
Largest ATM Network in Latin America
Largest network service in the country
2
efficiency reflected in numbersefficiency reflected in numbers
R$ million
1Q03 4Q03 1Q04 /1Q03 /4Q03
Total Assets 209,240 230,144 231,107 10.5 0.4
Credit Portfolio ¹ 65,715 77,636 79,647 21.2 2.6
Securities Portfolio 75,631 69,590 67,875 (10.3) (2.5)
Deposits ² 98,130 110,014 110,219 12.3 0.2
Asset Management - R$ bi 78.0 102.6 116.0 48.7 13.0
Shareholders’ Equity 10,164 12,172 12,686 24.8 4.2
Market Capitalization 7,485 17,568 17,041 127.7 (3.0)
Net Income 479 637 616 28.5 (3.4)
ROE % ³ 21.3 23.1 21.3
Change %
1- Credit Portfolio, Leasing operations and others credits, according Res. 2682/992 - Demand, Time, Savings and Interbank3 - Net Income included
result building upresult building up
Spread Reduction
Increase of Allowance for Loan Losses
Credit Delinquency under Control
Growth of the Retail Credit Portfolio
Increase in Service Fees
Administrative Expenses Control
solid resultssolid results
Income Statementwith reallocations
1Q03 4Q03 1Q04 / 1Q03 / 4Q03
Gross Financial Margin 3,917 3,977 3,829 (2.2) (3.7)
Provision for NPL (636) (827) (901) 41.6 9.0
Net Financial Margin 3,281 3,150 2,928 (10.7) (7.0)
Service Fees 1,218 1,511 1,553 27.5 2.8
Turnover Tax Expenses (232) (289) (284) 22.5 (1.7)
Contribution Margin 4,267 4,372 4,197 (1.6) (4.0)
Administrative Expenses (2,709) (3,149) (2,735) 0.9 (13.1)
Commercial Income 1,558 1,223 1,462 (6.1) 19.5
Operating Income 1,244 1,335 1,227 (1.4) (8.1)
Income before Profit Sh.Taxes Ext. Items 1,295 1,374 1,242 (4.1) (9.6)
Income Tax and Social Contribution (687) (453) (370) (46.0) (18.2)
Profit sharing (20) (155) (41) 108.7 (73.6)
Recurrent Result 589 765 831 41.1 8.5Extraordinary items (110) (128) (215) 96.0 68.0
Net Income 479 637 616 28.5 (3.4)
Quarterly Flow Change %
R$ million
Analysis of volume and spread
ready to a new environmentready to a new environment
3,917
(416)
477
(149)
Spread - %
Volume - R$ million
1Q03 - 1.919356
1Q04 - 1.672528
1Q
04
- 2
28
,94
6
1Q
03
- 2
04
,07
6
Loss due to spread decrease
Gain due to volume increase
Loss due to decrease in spread combined with volume increase
* Average balance
R$ million 1Q03 4Q03 1Q04 /1Q03 /4Q03
Gross Financial Margin 3,917 3,977 3,829 (2.2) (3.7)
Asset (-) Permanent * 204,076 221,377 228,946 12.2 3.4Annualized Spread 7.9 7.4 6.9
Change %
deliquency under controldeliquency under control
1Q03 2Q03 3Q03 4Q03 1Q04
1Q03 2Q03 3Q03 4Q03 1Q04
Loss / Portfolio - % ¹
Expenses Prov. / Port. - % ²Overdue Loans / Total Credit Portfolio - %
Overdue more than 15 days / Total Credit Portfolio - %
Overdue more than 60 days / Total Credit Portfolio - %
1Q03 4Q03 1Q04 / 1Q03 / 4Q03
Gross Financial Margin 3,917 3,977 3,829 (2.2) (3.7) Provision for NPL (636) (827) (901) 41.6 9.0 Net Financial Margin 3,281 3,150 2,928 (10.7) (7.0)
Quarterly Flow Change %
R$ million
2.52.1 2.0 1.8 1.8
1.0 1.3 1.1 1.1 1.1
4.8 5.0 4.7 4.4 4.6
¹ Loss and average portfolio of the Last 12 months
² Loss and average portfolio of the quarter
³ Loss and average portfolio of the Last 12 months
5.6 5.35.0 4.7
5.2
5.55.1
4.8 4.65.1
3.1 3.2 3.2 3.0 3.2
Expenses Prov. / Port. - % ³
margin growth guaranteed by business diversification
margin growth guaranteed by business diversification
R$ million 1Q03 4T03 1Q04 / 1Q03 / 4Q03
Gross Financial Margin 3,917 3,977 3,829 (2.2) (3.7) Provision for NPL (636) (827) (901) 41.6 9.0Net Financial Margin 3,281 3,150 2,928 (10.7) (7.0) Service Fees 1,218 1,511 1,553 27.5 2.8 Turnover Tax Expenses (232) (289) (284) 22.5 (1.7)Contribution Margin 4,267 4,372 4,197 (1.6) (4.0)
Quarterly Flow Change %
R$ million 1Q03 4Q03 1Q04 / 1Q03 / 4Q03Service revenues 1,218 1,511 1,553 27.5 2.8 Customer Relationship Fees 387 451 481 24.4 6.8 Asset Management fees 167 220 234 40.1 6.2 Credit Operations 111 148 147 32.1 (1.2) Collection 107 143 150 40.1 4.3 Services to Related Companies 22 27 39 77.3 45.6 Third Party Revenue and Payments 87 106 106 21.6 (0.5) Credit Cards 107 130 129 20.5 (1.4) Others 231 285 268 16.1 (5.8)
Quarterly Flow Change %
Asset Management - R$ billion
customers’ loyalty and asset management leadership
customers’ loyalty and asset management leadership
Customer Base - in millions
1Q03 2Q03 3Q03 4Q03 1Q04
1Q03 2Q03 3Q03 4Q03 1Q04
15.9 16.7 17.018.7 19.3
338 309 326 321 300
78.083.2
91.8102.9
116.0
Service Fees + GFM / Customer - R$ ¹
¹ Costumer base average of the last 4 quarters
18.6 18.7 18.8 19.0 20.2
Market Share - %
cost structure suitable with business generation
cost structure suitable with business generation
R$ million
Contribution Margin 4,267 4,372 4,197 (1.6) (4.0)Administrative Expenses (2,709) (3,149) (2,735) 0.9 (13.1)Commercial Income 1,558 1,223 1,462 (6.1) 19.5
1Q03 4Q03 1Q04 / 1Q03 / 4Q03Quarterly Flow Change %
R$ million 1Q03 4Q03 1Q04 / 1Q03 / 4Q03
Administrative Expenses (2,709) (3,149) (2,735) 0.9 (13.1)
Other Administrative Expenses (1,170) (1,165) (1,126) (3.8) (3.3)
Employees Expenses (1,509) (1,949) (1,574) 4.3 (19.2)
Salaries (639) (894) (721) 12.9 (19.3)
Benefits (158) (196) (182) 15.5 (6.9)
Social Charges (239) (342) (269) 12.6 (21.3)
Training (5) (17) (6) 24.0 (65.0)
Honorary of Directors and councilmen (2) (2) (1) (7.9) (12.5)
Provision for Employees Expensives (234) (107) (273) 16.6 154.6
Provisions for Labor Suits (191) (309) (60) (68.7) (80.6) Labor Suits (41) (82) (61) 48.8 (25.3)
Quarterly Flow Change %
Points of Service - in thousands
Human Resources - in thousands
cost structure suitable with business generation
cost structure suitable with business generation
12.5 12.8 12.9 13.2 13.4
4.3 4.4 4.7 5.0 5.0
1Q03 2Q03 3Q03 4Q03 1Q04
Credit operations / Points of Service - R$ million
10.6 10.8 10.8 10.2 10..5
1Q03 2Q03 3Q03 4Q03 1Q04
2.2 2.3 2.4 2.6 2.8
Employees Interns
Deposits + Assets under Manag/ Employee - R$ million
Points of Service
79.5 79.5 79.7 80.6 81.8
productivity equation completed by technology
productivity equation completed by technology
Automatization
Electronic Transactions / Total Transactions - %
Efficiency Ratio - % Coverage Ratio - %Service Income / Personnel Expenses
ATM Internet Financial Manager POS Cashier
Administrative Expenses / Operational Income
81.482.5 82.4
84.1 84.6 85.0 85.286.4 86.3
1Q03 2Q03 3Q03 4Q03 1Q041Q02 2Q02 3Q02 4Q02
50.6
12.2
16.2
4.7
13.72.6
53.7
10.5
14.3
4.1
15.42.0
1Q04 - %1Q03 - %
Others
80.790.7
84.077.5
98.6
1Q03 2Q03 3Q03 4Q03 1Q04
56.754.0
57.6
1Q03 2Q03 3Q03 4Q03 1Q04
56.5 54.2
BB - the bank that invests the most in Brazil
BB - the bank that invests the most in Brazil
Market Funding - R$ billionAsset Composition - %
Liquid assets Credit Operations
Tax Credit Other Assets
Interbank Deposits
Demand Deposits
Savings Deposits
Time Deposits
Open Market Funds
5.2 21
.0
26.8 45
.0
49.6
147.
7
7.3
27.1
27.4
48.2
40.1
150.
1
6.2
30.3
27.6 46
.1
40.3
150.
6
Total
1Q03 4Q03 1Q04
28.8
3.9
27.0 28.8 24.7 22.9 22.0
1Q03 2Q03 3Q03 4Q03 1Q04
1Q03 4Q03 1Q04 / 1Q03 / 4Q03Total Assets 209,240 230,144 231,107 10.5 0.4 Liquid Assets 88,366 102,439 104,795 18.6 2.3 Credit Operations 53,475 65,604 66,461 24.3 1.3 Tax Credit 10,927 9,406 9,116 (16.6) (3.1) Other Assets 56,473 52,695 50,736 (10.2) (3.7)
Total Liabilities 209,240 230,144 231,107 10.5 0.4 Deposits 98,130 110,014 110,219 12.3 0.2 Other Liabilities 100,227 107,959 108,202 8.0 0.2Shareholders’ Equity 10,164 12,172 12,686 24.8 4.2
Change %R$ million
45.3
28.5
44.5
28.127.525.6
42.638.642.2
4.14.65.15.2
Securities Portfolio
liquidity preservedliquidity preserved
Securities Portfolio Maturity - %
Up to 1 year 1 to 5 years 5 to10 years Over 10 years
1.7 1.7 1.8 2.1 0.7
1Q03 2Q03 3Q03 4Q03 1Q04
1Q03 4Q03 1Q04 / 1Q03 / 4Q03
Securities Portfolio 75,631 69,590 67,875 (10.3) (2.5)
Available for trading 5,137 16,095 12,338 140.2 (23.3) Available for sale 43,352 28,307 30,266 (30.2) 6.9 Held to Maturity 26,846 24,821 24,959 (7.0) 0.6 Derivatives 296 368 331 11.7 (10.0)
Change %R$ million
10.6
69.3
19.5
9.3
72.0
16.7
8.7
70.5
18.9
12.6
64.1
21.6
13.3
58.2
26.8
well balanced credit portfoliowell balanced credit portfolio
Credit Portfolio1Q04 - Balance R$ 79.6 billion
1Q03 - Balance R$ 65.7 billion
20.3%
22.2%
27.9%
12.3%
14.5%2.7%
22.3%
20.2%
10.3%
12.6%2.0%
32.5%
Retail Commercial Agribusiness Foreign Trade Abroad Others
20.6%
20.9%
35.0%
9.5%
12.2%1.9%
4Q03 - Balance R$ 77.6 billion
Credit Portfolio by Risk Level
Shares % - 1Q04
increase with resposibilityincrease with resposibility
AA-B C-D E-H
Retail Commercial Agribusiness Foreign Trade
11.0
2.5 1.6 0.64.7 6.7
BB NFS
31.1
8.5 14.5 16.5 15.3
57.9
89.0 83.9
78.8 77.9
18.6
80.9
Retail
Credit Portfolio
Agribusiness
Credit Portfolio by Risk Level -%Commercial and Foreign Trade Portfolio
10,0
20,0
30,0
40,0
50,0
60,0
70,0
80,0
AA A B C D E F G H
10,0
20,0
30,0
40,0
50,0
60,0
70,0
80,0
AA A B C D E F G H
10,0
20,0
30,0
40,0
50,0
60,0
70,0
80,0
AA A B C D E F G H
10,0
20,0
30,0
40,0
50,0
60,0
70,0
80,0
AA A B C D E F G H
1Q041Q03 1Q041Q03
1Q041Q031Q041Q03
increase with resposibilityincrease with resposibility
ability to increase businesses with customers
ability to increase businesses with customers
Capital Adequacy
BIS Ratio - %
Level I Level II
14.3
4.1 4.1 4.2 4.0 4.4
1Q03 2Q03 3Q03 4Q03 1Q04
13.4 13.8 13.7 14.3
1Q03 4Q03 1Q04 / 1Q03 / 4Q03Risk weighted Assets 104.043 120.973 119.691 15,0 (1,1)
11.941 13.772 13.646 14,3 (0,9) Required on weighted assets 11.445 13.307 13.166 15,0 (1,1) Required on swap 154 152 150 (2,8) (1,2) Required on exchange exp - - - Required on Interest rate exp 343 313 331 (3,5) 5,6Referential Shareholders’ Equity 14.545 17.162 17.740 22,0 3,4 Level I 10.139 12.147 12.336 21,7 1,6 Capital Social (623) 228 127 (120,3) (44,4) 20% Realizable Tax Credit After 5 Years - - (326) Level II 4.406 5.015 5.405 22,7 7,8Surplus / shareholders’ equity deficit 2.604 3.391 4.094 57,2 20,7Surplus / leverage deficit 23.673 30.825 37.220 57,2 20,7
Coefficient K % 13,40 13,71 14,30
Change %R$ million
9.3 9.7 10.1 9.7 9.9
Required Shareholders’ Equity
insurance and private pensioninsurance and private pension
Insurance RevenueR$ million
Insurance / Net Aggregated ValueInsurance / Net Aggregated Value
Insurance GFM Others
Total
Auto
Life, Health and Others
Capitalization Plans
Private Pension
Manag. Insur. Funds
74.2%
3.4%22.4%
80.4%
3%16.6%
1Q041Q03
145
18
64
42
13
9
170
19
71
51
14
14
175
15
69
41
36
16
1Q03 4Q03 1Q04
market recognitionmarket recognition
Price Price / Earnings Price / BV - x
13.914.9
16.0 16.6 17.3
3.5 4.15.0
7.4 6.8
0.7 0.91.0
1.4 1.3
1Q03 2Q03 3Q03 4Q03 1Q04
Obs: Share Market Price adjusted by income
new IR websitenew IR website
Investor Relations DivisionSBS - Quadra 1 - Bloco C - Ed. Sede III - 17° floor
70073-901 - Brasília (DF)Phone: 55 (61) 310.5920
Fax: 55 (61) 310.3735
DisclaimerDisclaimer - This presentation contains references and statements, planned synergies, increasing estimates, projections of results and future strategy for Banco do Brasil, it’s Associated and Affiliated Companies and Subsidiaries. Although these references and statements reflect the management’s belief, it also involves imprecision and high difficult risks to be foreseen, consequently, it may conduct to a different result than the one anticipated here. These expectations are highly depended on market conditions, on the Brazilian economic performance, on the sector and the international market. Banco do Brasil is not responsible for bringing up to date any estimate in this presentation.
For further information access www.bb.com.br/ri