roadshow may 2006. 1 brazilian economy highlights itaú itaú´s positioning 1 st quarter of 2006...

Roadshow

May 2006

2

Brazilian Economy

Highlights Itaú

Itaú´s Positioning

1st Quarter of 2006 Results

Acquisition of BankBoston

Strategy

Agenda

Real exchange rate

may/06 2.066

1,0

1,5

2,0

2,5

3,0

3,5

4,0

4,5

5,0

5,5

6,0

6,5

7,0ja

n/8

4

jan

/85

jan

/86

jan

/87

jan

/88

jan

/89

jan

/90

jan

/91

jan

/92

jan

/93

jan

/94

jan

/95

jan

/96

jan

/97

jan

/98

jan

/99

jan

/00

jan

/01

jan

/02

jan

/03

jan

/04

jan

/05

jan

/06

Effective basket 92-93 average R$/US$ Euro

Collor-ItamarPeriod

Peggedcurrency

Floatingexchange rate

RealPlan

3.5

Trade surplus

accumulated in 12-months (US$ billion)

Source: Central Bank of Brazil

30

40

50

60

70

80

90

100

110

120

Jan-

03

Mar

-03

May

-03

Jul-03

Sep-

03

Nov

-03

Jan-

04

Mar

-04

May

-04

Jul-04

Sep-

04

Nov

-04

Jan-

05

Mar

-05

May

-05

Jul-05

Sep-

05

Nov

-05

Jan-

06

Mar

-06

6

10

14

18

22

26

30

34

38

42

46

Exports Imports Balance

7

Fiscal policy


Net Public Debt (% of GDP)

51.7

0.3

0.0

10.0

20.0

30.0

40.0

50.0

60.0F

eb-0

0

Jun

-00

Oct

-00

Feb

-01

Jun

-01

Oct

-01

Feb

-02

Jun

-02

Oct

-02

Feb

-03

Jun

-03

Oct

-03

Feb

-04

Jun

-04

Oct

-04

Feb

-05

Jun

-05

Oct

-05

Feb

-06

Net debt/GDP Net debt in US$/GDP

%

8

Primary surplus since 1998


-4%

-8.4%

4.4%

-12%

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

Jan-

98

Jul-

98

Jan-

99

Jul-

99

Jan-

00

Jul-

00

Jan-

01

Jul-

01

Jan-

02

Jul-

02

Jan-

03

Jul-

03

Jan-

04

Jul-

04

Jan-

05

Jul-

05

Jan-

06

Nominal result Interest Primary surplus

9

Inflation expectations: 4.33% for 2006 and 4.5% for 2007 (Focus Survey on May 5, 2006)

Interest rate path: compatible with limiting aggregate demand acceleration in order to bring inflation to the target

Exchange rate: remains constant in real terms throughout the forecasting horizon

Primary budget surplus: the target remains at 4.25% of GDP, however the effective primary surplus decreases from 4.8% of GDP in 2005 to 4.25% of GDP in 2006 and 2007

GDP linear growth trend: 3.5% in 2006 and 2007

Baseline scenario

10

Investment grade

Total foreign debt/current-account receipts

20,0%

40,0%

60,0%

80,0%

100,0%

120,0%

140,0%

2005 2006 2007 2008 2009 2010

base scenario

Average of the greatest D/X ratio among investment grade countries

Average investment grade

11

Reserve Requirements (%)

0

5

10

15

20

25

30

35

40

45

50

55

60

65

70

75

80

85

90

95

100

Sep-95

Mar-96

Sep-96

Mar-97

Sep-97

Mar-98

Sep-98

Mar-99

Sep-99

Mar-00

Sep-00

Mar-01

Sep-01

Mar-02

Sep-02

Mar-03

Sep-03

Mar-04

Sep-04

Mar-05

Sep-05

Mar-06

Demand Deposits Time Deposits Savings Deposits

53%

30%23%

45%

20%

Additional 8% remunerated by the Selic rate

20% remunerated by reference rate + 6% p.a.

Additional 10% remunerated by Selic

Remunerated by Selic rate

45% without remuneration

Brazilian Banking System

12

Agenda

Brazilian Economy

Highlights Itaú




Strategy

13

Ownership Structure - Mar/06

ESA Family: 33.72%

• Common Shares: 60.69%

• Preferred Shares: 17.24%

Free Float: 66.18%



Itaúsa

Banco Itaú Holding Financeira S.A.

Free Float: 51.75%



Total: 48.25%• Commom Shares: 88.84%• Preferred Shares: 0.01%

14

69.681.8

151.2 146.4163.2

130.3118.8111.1

27,334,3

45,4 44,653,3 57,0

72,067,8

6,6 7,69,0

11,914,0 14,6

16,615,6

Highlights

Assets (R$ Billion)

Credit Operations (R$ Billion)

Stockholders’ Equity (R$ Billion)

2,3 3,24,4

7,7

11,0 11,5

15,514,6

Technical Provisions – Insurance, Pension and Capitalization (R$ Billion)

15

2,9864,073

11,15710,220

9,224

7,2505,892

4,541

1.841

3.776

1.141 1.460

2.389 2.377

5.251

3.152

7,056

8,770

2,7822,371

9,0158,425

5,996

10,428

2000

2001

2002

2003

2004

2005

1ºQ

/200

5

1ºQ

/200

6

3.6994.277

6.165

1.794 2.121

7.737

3.465

5.121

Net Income (R$ Million)

Non-interest Expenses (R$ Million)

Banking Service Fees (R$ Million)

Net Interest Margin (R$ Million)

Highlights

16

29.0%

33.1%

28.8% 29.7% 29.2%31.9%

36.3%35.3%

2000

2001

2002

2003

2004

Jun-

05

1ºQ

/200

5

1ºQ

/200

6

3.2% 3.1%2.6% 2.8% 3.0%

3.3%3.7%3.7%

2000

2001

2002

2003

2004

2005

1ºQ

/200

5

1ºQ

/200

6

14,4%16,9%

18,4%19,8% 20,6%

18,3% 16,9%17,0%

67.2%62.1% 58.2% 54.5% 53.9% 50.1%

45.4%50.3%

Obs: Annualized quarterly indexes.

Average ROE (%)

Average ROA (%)

BIS Ratio (%)

Efficiency Ratio (%)

Highlights

17

3,174 3,1993,0753,0733,172

3,1923,1842,995

2000

2001

2002

2003

2004

2005

1ºQ

/200

5

1ºQ

/200

6

4,370

3,6793,6243,157

2,5981,998

1,427

4,198

22,023 22,31621,34620,021

21,150

17,926

13,77712,064

2000

2001

2002

2003

2004

2005

1ºQ

/200

5

1ºQ

/200

6

51,765

42,45045,316 45,803

43,21545,409

47,52451,036

Branches+CSBs

Internet Banking Clients (In million)

ATMs

Employees

Highlights

18

11,879

16,619

15,027

2,229

15,560

9,036

7,578

6,6425,907

4,1983,337

2,857

880

3,152

181

3,776

5,251

2,389

1,8411,869

721592

343

3820

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

11,000

12,000

13,000

14,000

15,000

16,000

17,000

90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06

0

400

800

1,200

1,600

2,000

2,400

2,800

3,200

3,600

4,000

4,400

4,800

5,200

5,600

6,000

Stockholders' Equity

Net Income

CAGR(90-06) = 14.1%

CAGR(90-05) = 25.2%

Real Plan

Mexican Crisis

Asian Crisis

Russian Crisis

Real Devaluation Argentina

Crisis

Collor Plan

Attack to WTC

Brazilian Election Period

R$ MillionEvolution of Stockholders’ Equity and Net Income

Highlights

Adaptability to Different

Scenarios

19

11,879

16,619

15,027

2,229

15,560

9,036

7,578

6,6425,907

4,1983,337

2,857

880

3,152

181

3,776

5,251

2,389

1,8411,869

721592

343

3820

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

11,000

12,000

13,000

14,000

15,000

16,000

17,000

90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06

0

400

800

1,200

1,600

2,000

2,400

2,800

3,200

3,600

4,000

4,400

4,800

5,200

5,600

6,000

Stockholders' Equity

Net Income

CAGR(90-06) = 14.1%

CAGR(90-05) = 25.2%

Real Plan

Mexican Crisis

Asian Crisis

Russian Crisis

Real Devaluation Argentina

Crisis

Collor Plan

Attack to WTC


R$ MillionEvolution of Stockholders’ Equity and Net Income

Highlights

Jan/90 to Mar/06Dividends:

R$ 9.4 BillionIncrease of Capital:

R$ 0.1 Billion

1st Quarter of 2006Net Income R$ 1,460 million

20

Agenda

Brazilian Economy

Highlights Itaú




Strategy

22

Presence in Brazil– Mar/2006

Including: Banco Itaú, Itaú BBA and Taií

ATMs

North Region

Branches+CSBs 1.6%

1.5%

GDP 5.0%

ATMs

MidWest Region

Branches+CSBs 8.0%

5.5%

GDP 7.4%

ATMs

South Region

Branches+CSBs 20.4%

14.9%

GDP 18.6%

ATMs

Southeast Region

Branches+CSBs 65.8%

73.2%

GDP 55.2%

ATMs

Northeast Region

Branches+CSBs 4.2%

4.9%

GDP 13.8%

23

Foreign Presence – Mar/2006

Itau Bank 1,603 558

Banco Itaú Europa 3,281 501

Consolidated 13,792 2,869

Assets Stockholders’ Equity

Foreign Branches 3,587 834

Banco Itaú Buen Ayre 582 99

Itaú BBA and subsidiaries 4,739 877

US$ Million

24

Number of Clients (Thousands)

Scale of Operations– Consolidated

8,886 9,491 9,764 10,516

2,108 1,865 1,9081,927

2,513

8,13410,410

1,963

1,917

1,96311,87812,864

13,547

17,203

10,872

16,649

Dec/01 Dec/02 Dec/03 Dec/04 Dec/05 Mar/06

Account Holders Savers

Non Account Holders - Taií Non Account Holders - Credit Cards

Non Account Holders - Insurance and Pension Plans Non Account Holders - Vehicles and Real State

Total

25

154

402

525

643

344

11179514142

222

1,998

3,157

3,623

4,224

1,4271,121

813477

284141

2,598

0

70

140

210

280

350

420

490

560

630

700

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

0

400

800

1,200

1,600

2,000

2,400

2,800

3,200

3,600

4,000

4,400

Transactions (million)

Customers (thousands)

Jan.- Mar. 2006Transactions: 178 Million

Customers: 4.4 Million

Internet Banking

Technology

26

Agenda

Brazilian Economy

Highlights Itaú




Strategy

27

3. Additional provisions: R$ 130 million increase in the excess provision for loan losses in the quarter, reaching the

balance of R$ 1.5 billion; R$ 90 million reversal of additional provision for securities in the quarter, remaining the

balance of R$ 280 million.

1. Results: Net Income of R$ 1,460 million in the 1st Qtr/06, a 2.5% increase in comparison to the previous

quarter and a 27.9% increase in comparison to the 1st Qtr/05; annualized ROE of 36.3%. Earnings per Share reached R$ 1.32 in 1st Qtr/06, growing 32.0% in comparison to 1st Qtr/05.

4. Nonperforming Loans Ratio: Nonperforming loans ratio of 4.0%.

2. 6.3% growth in the loan portfolio in the quarter: Personal Loans: 11.0% in the quarter and 35.3% in the last 12 months; Vehicles: 13.9% in the quarter and 71.3% in the last 12 months;

5. BIS Ratio: Maintenance of the high level of 16.9%.

Highlights


28

16,890

47,407

60,63663,969

19,596

27,253

34,282

44,581

53,275

67,75672,046

38,419 38,65929,615

23,674

14,058

16,077

45,414

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

1998 1999 2000 2001 2002 2003 2004 2005 M2006

Credit Operations Credit Operations including Endorsements and Sureties

CAGR: 23.0%

CAGR: 23.2%

R$ Million

Credit Portfolio


29

Loans by Type of Customer R$ Million

(*) Farming and agribusiness Credit and Mortgage Loans – Linked to available funds from Demand and Savings Deposits.

Mar 31, 06 Dec 31, 05 Mar 31, 05Var.

Mar/06 - Dec/05

Var. Mar/06 - Mar/05

Individuals 30,813 28,471 20,770 8.2% 48.4%

• Credit Cards 6,904 7,216 5,033 -4.3% 37.2%

• Personal Loans 11,457 10,320 8,467 11.0% 35.3%

• Vehicles 12,451 10,936 7,270 13.9% 71.3%

Businesses 36,703 34,744 31,905 5.6% 15.0%

• Small and Medium Sized Companies

13,741 12,784 10,496 7.5% 30.9%

• Corporate 22,962 21,960 21,408 4.6% 7.3%

Mandatory Loans (*) 4,529 4,541 4,338 -0.3% 4.4%

Total Loans 72,046 67,756 57,012 6.3% 26.4%


30

Composition of the Loan Portfolio

28.5% 28.3% 29.9% 34.3% 36.4% 38.9% 41.5% 42.0% 42.8%

17.5% 17.7% 18.4%18.2% 18.4% 19.0% 18.7% 18.9% 19.1%8.3% 8.4% 9.1%

7.6% 7.2% 6.9% 6.7% 6.3%

45.6% 45.6% 42.5% 39.0% 37.6% 34.8% 32.9% 32.4% 31.9%

8.5%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Mar-04 Jun-04 Sep-04 Dec-04 Mar-05 Jun-05 Sep-05 Dec-05 Mar-06

Individuals Small and Medium-Sized CompaniesMandatory Loans Corporate


31

Non-performing Loans Ratio and Coverage Ratio

NPL Ratio(1) Coverage(2)

(1) Loans overdue for more than 60 days

181%192%

200%203%221%220%

210%204%202%

0%

50%

100%

150%

200%

250%

Mar-04

Jun-04

Sep-04

Dec-04

Mar-05

Jun-05

Sep-05

Dec-05

Mar-06

3.5

4.0

5.8

6.5

1.11.3 1.3

1.5

4.0

3.53.2

2.9 2.9 3.03.3

5.66.0

5.35.25.6

6.5

7.3

0.80.9

1.51.81.9

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

Mar-04

Jun-04

Sep-04

Dec-04

Mar-05

Jun-05

Sep-05

Dec-05

Mar-06

Nonperforming Loans Ratio - OverallNonperforming Loans Ratio - IndividualsNonperforming Loans Ratio - Businesses

(2) Balance of Provision for Loans Losses / Balance of Loans overdue for more than 60 days and that do not generate income.


32

Contribution from the Change in the Mix of the Loan Portfolio

R$ Million

(*) Average balance of the loan portfolio, net of loans overdue for more than 60 days, which do not generate revenue .

1st Qtr/06 4th Qtr/05 1st Qtr/05

Managerial Financial Margin – Banking Operations (A) 3,628 3,351 2,607

Service Fees with Loans and Credit Cards (B) 847 888 684

Tax Expenses for PIS and COFINS (C) (208) (197) (153)

Banking Product (D = A + B + C) 4,267 4,042 3,138

Adjustment 1 – Result of Loan Losses (E) (1,287) (971) (594)

Adjustment 2 – Excess Provision (F) 130 170 150

Adjusted Result of Loan Losses (G = E + F) (1,157) (801) (444)

Adjusted Banking Product (H = D + G) 3,111 3,240 2,694

Average Loans (*) (I) 59,942 56,124 47,754

Annualized Adjusted Banking Product / Average Loans (H/I) 20.8% 23.1% 22.6%


33

Itaú Holding (pro forma) R$ Million

1st Qtr/06 4th Qtr/05 Variation 1st Qtr/05

Managerial Financial Margin 4,073 3,650 11.6% 2,986

• Banking Operations 3,628 3,351 8.3% 2,607

• Treasury 296 134 120.5% 233

• Management of FX Risk from Investments Abroad

149 165 -9.9% 146

Result of Loan Losses (1,287) (971) 32.5% (594)

Banking Service Fees 2,121 2,121 0.0% 1,794

Non-Interest Expenses (2,782) (2,909) -4.4% (2,371)

Net Income 1,460 1,425 2.5% 1,141

Average Stockholders' Equity 16,089 15,394 4.5% 14,300

Annualized ROE (%) 36.3% 37.0% -0.7 p.p. 31.9%


34

12.6%14.1%

11.0%

12.9%13.6% 14.1%13.5%

4%

6%

8%

10%

12%

14%

16%

3rd Qtr/04 4th Qtr/04 1st Qtr/05 2nd Qtr/05 3rd Qtr/05 4th Qtr/05 1st Qtr/06

(*)

(*) After adjustments for extraordinary items in the amount of R$ 612 million described in the Management Discussion and Analysis report for the 4th Qtr/04.

Evolution of the Net Interest Margin (%)


14.3%15.1%Recurring

Extraordinary

35

R$ Million

Banking Service Fees

(1) Investment Funds and Consortiums.


Asset Management (1) 449 430 4.3% 398

Current Account Services 386 375 2.9% 349

Credit Cards 487 539 -9.7% 437

Loans and Guarantees Issued 388 371 4.3% 271

Collection Services 224 220 1.7% 209

Other 189 185 1.9% 131

Total 2,121 2,121 0.0% 1,794


36

Non-Interest Expenses

(1) Not including PIS, Cofins and ISS.


Personnel Expenses 1,132 1,046 8.2% 955

Other Administrative Expenses 1,230 1,422 -13.5% 1,101

Other Operating Expenses 338 377 -10.2% 239

Tax Expenses (CPMF / Others) (1) 82 65 26.5% 76

Total 2,782 2,909 -4.4% 2,371

R$ Million


37

Efficiency Ratio

(*) For further details about the Managerial Financial Margin, please consult Itaú Holding’s Management Discussion and Analysis report.

Non-Interest Expenses (Personnel Expenses + Other Administrative Expenses +Other Operating Expenses + Tax Expenses for CPMF and Other Taxes)

(Managerial Financial Margin (*) + Banking Service Fees + Results from Insurance, Pension Plans and Capitalization Operations +Other Operating Income + Tax Expenses for PIS/COFINS/ISS)

EfficiencyRatio

54.3%56.8%

48.0% 49.8% 50.8% 50.5% 50.1%45.4%

58.9%

1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05 1Q06

53.9%

50.3%


38

(*) Values differ from the one published in note “Market Value” because they are net of the additional provision for securities.

Conservative Accounting Practices

SecuritiesAdjust. market value

Additional Provision

Total

Additional Provision for Loan Losses (PDD)

Financial Instruments: Market vs. Recorded Value(*)

R$ 496 million

R$ 280 million

R$ 4.5 billion

03/31/06

R$ 1.5 billion

R$ 2.2 billion

R$ 435 million

R$ 370 million

R$ 3.6 billion

12/31/05

R$ 1.37 billion

R$ 1.4 billion

R$ 540 million

R$ 400 million

R$ 3.8 billion

03/31/05

R$ 1.15 billion

R$ 1.7 billion


39

Agenda

Brazilian Economy

Highlights Itaú




Strategy

40

The Acquisition Agreement

Banco Itaú Holding Financeira S.A. (ITAÚ) and Itaúsa – Investimentos Itaú S.A. (ITAÚSA) announce today that they have entered into an agreement with Bank of America Corporation (BAC) dated 05-01-2006 which involves:

• The acquisition of BankBoston (BKB) in Brazil by ITAÚ pursuant to the issuance of 68,518 thousand new non-voting ITAÚ shares, equal to an approximate 5.8% share of ITAÚ’s total capital;• The exclusive right for ITAÚ to acquire BKB’s operations in Chile and Uruguay, as well as certain other financial assets owned by clients of Latin America.

The largest stock swap ever to be completed in the Brazilian financial services industry

41

Acquired Businesses

Bank of AmericaCorporation

BKB Chile

BKBBrazil

BKB Uruguay

CorporateMiddle

&Small

Premier

Option Option

OCA Uruguay

Credit Cards

Option

42

Price and Transaction Structure

The acquisition of BKB Brazil will be effected in stock pursuant to the issuance of non-voting ITAÚ shares, equal to an approximate 5.8% share of ITAÚ’s total capital (68,518 thousand new shares of ITAÚ). Based on the non-voting shares average price on 04-28-06, these newly-issued shares would be valued at R$ 4.5 billion.

The same transaction structure is expected for the remaining acquisitions and the amounts involved will be generally in line with their respective asset bases vis-à-vis BKB Brazil.

43

Recent Acquisitions in Shares in Brazil

DATE ACQUIRER TARGETTOTAL

AMOUNTR$ MM

% PAID IN

SHARES

SHARES ISSUED / TOTAL

CAPITAL

Apr-03 ABN Amro Real Sudameris 2,293 77.0% 12.9%

Jan-03 Bradesco BBV Brasil 2,480 25.4% 4.4%

Nov-02 Itaú BBA-Creditanstalt 3,119 16.7% 3.0%

Jul-00 Unibanco Bandeirantes 1,044 100.0% 12.3%

Apr-00 Bradesco Boavista 946 100.0% 6.5%

Source: Merrill Lynch

May-06 Itaú BKB Brazil 4,508 100.0% 5.8%

44

Considerations Regarding BAC’s Investment in ITAÚ

BAC will appoint one member of ITAU’s Board of Directors; The acquisition will involve the issuance of new non-voting ITAÚ shares, will not

give rise to preemptive subscription rights on the part of ITAÚ’s current

shareholders; BAC does not have a Right of First Refusal, but will have tag along rights, in the

event of a change of control at ITAÚ; BAC shall not increase its stake above 20% of the issued and outstanding capital

of ITAÚ in the future; Shares issued in connection with this acquisition are subject to a 3-year lock-up

period and, after this period, the sale of these shares in the market is limited to 15%

of the average daily volume or block trade; ITAÚ has a Right of First Offer should BAC decide to sell its stake.

45

BKB Brazil

Present in Brazil since 1947

Assets (R$ MM) 22,603

Deposits (R$ MM) 5,911

Shareholders’ Equity (R$ MM) 2,124

# of Employees 4,800

# of Clients (thousands) 203

Assets under Management (R$ MM) 26,014

Loans (includes sureties and endorsements) (R$ MM) 11,639

Source: BKB Publication, BAC, Central Bank of Brazil and Market Share taken from ANBID – Mar/05

# of Branches 66

1.4%

0.6%

3.3%

1.4%

MarketShare12-31-05

Ranked 13th

by the CentralBank of Brazil

46

BKB Brazil - Segmentation

Banking Revenues (BR) (*) Number of Clients

(*) Banking Revenues = Financial Margins + Service Fees

Position: Dec.05

Corporate31%

High Net Worth Individuals

38%Middle Market

31%

SEGMENTTHOUSANDSOF CLIENTS

INCREASE IN BR (%)

High Net Worth Individuals

178.3 118%

Middle Market 23.8 40%

Corporate 1.3 62%

47

Client Overlap / Opportunities

SEGMENTESTIMATED OVERLAP

ESTIMATED LOSS IN

BANKING REVENUES

OPPORTUNITIES

HIGH NET WORTH 30% 5% Sale of Insurance and Private

Pension Plans

MIDDLE MARKET 37% 11% Cash Management Services

CORPORATE 12% 3%Cash Management Services

Investment BankingCrossborder Transactions

Clients whose limits should be reduced according to information on the largest clients

48

Relevant Aspects

Will become a shareholder of ITAÚ, thus maintaining an important presence in the region, through a significant investment in a leading bank; Will appoint one member of ITAÚ’s Board of Directors.

Leadership position among private banks in assets under management, custody, high net worth individual and corporate segments; Significant economies of scale in the large corporate and middle market segments; Acquisition of a premium credit card client base; Opportunity to expand into foreign markets in which ITAÚ does not currently have a presence.

BAC

ITAÚ and BAC will explore mutual cooperation opportunities to benefit their clients

ITAÚ

49

Important Highlights

Maintenance of BKB’s branches, which are highly regarded for their superior facilities, and integration with the Itaú Personnalité segment (no intention to shut down branches);

The ITAÚ brand will be extended to the acquired businesses;

ITAÚ will add a set of highly qualified professionals to its current structure.

ITAÚ will continue to strengthen its tradition of

providing differentiated service to its customers in the various

market segments

50

BKB Chile (Exclusive Option)



Shareholders’ Equity (R$ MM) 872

BankBoston Chile

Loans (R$ MM) 3,578

Source: BACParity CLP 514.21 / US$ 1.00 e R$ 2.2407 / US$ 1.00 as of 12-31-05

Investment Grade

Baa1 from Moody´s

# of Branches 44

# of Clients (thousands) 58

12-31-05

51

BKB Uruguay (Exclusive Option)




BankBoston Uruguay

Loans (R$ MM) 503

Source: BACParity UYU 24.17 / US$ 1.00 e R$ 2.2407 / US$ 1.00 as of 12-31-05

Assets (R$ MM) 239


Loans (R$ MM) 160

OCA

MarketShare 50%

# of Branches 15

12-31-05

372,000clients 12-31-05

# of Branches 23

http://www.oca.com.uy/index.html

52

Pro Forma Analysis

Assets

Loans (*)

Deposits

151.2 22.6

67.8 11.6

52.0 5.9

19.8 %

23.4%

21.0%

Assets Under Management 120.3 26.0 40.3%

R$ BILLION

(*) Includes sureties and endorsements

Shareholders’ Equity 15.6 2.1 21.6%

7.4

4.2

5.0

22.4

1.1

181.2

83.6

62.9

168.7

18.9

%BKBBrazil

PRO FORMA

BKBForeign

CombinedITAÚ + BKB

ITAÚINFORMATION AS OF 12-31-05

53

%

Pro Forma Analysis (Continued)

(*) Adjusted for BKB Brazil hedge transactions

# of Employees

# of Clients (thousands)

# of Branches

BKBBrazil

PRO FORMA

51,036 4,800

16,649 203

2,391 66

13.7%

3.9%

6.2%

Efficiency Ratio (*) 50.3% 77.3% 2.4 bps

Basle Ratio 17.0% 14.7% -0.3 bps

2,200

450

82

78.0%

15.8%

58,036

17,303

2,539

52.7%

16.7%

BKBForeign

CombinedITAÚ + BKBITAÚINFORMATION AS OF 12-31-05

54

BKB earnings requirements to avoid dilution in 2005

ITAÚ + BKBITAÚ

Net Income (R$ MM)

ROE (%p.a.)

ROA (%p.a.)

Efficiency Ratio

5,5765,251

BKB Brazil

325

Fiscal Year 2005

EPS (R$/share) 4.744.74

Shares Outstanding (mm)

1,176.21,107.7

4.74

68.5

13.4%

1.4%

77.3%

33.7%

3.5%

50.3%

Required

In light of its scale, ITAÚ is in a position to make this acquisition EPS accretive in a short period of time.

55

Accounting Effects

It is management’s intention to effect the write-off of the goodwill amount resulting from this transaction in the fiscal year of 2006. It is estimated that ITAÚ’s net income will be reduced by R$ 2.2 billion, net of taxes, as a result of the amortization of goodwill. The amount of dividends/interest on own capital to be distributed to the pro forma ITAÚ shareholder base for the fiscal year 2006 will not be impacted by this amortization of goodwill and should, therefore, be higher than those paid out in 2005;

The transaction is expected to be EPS accretive in the second half of 2007;

The Basle Ratio, pro forma for the acquisition, will equal approximately 16.7%.

56

Impact of the Transaction on Itaúsa

Decline in stake in ITAÚ from 48.2% to 45.4% (R$ 0.4 billion);

Gain from the equity method due to capital increase at ITAÚ (R$ 2.0 billion);

Negative impact of goodwill amortization at ITAÚ (R$ 1.0 billion);

ESTIMATED POSITIVE NET EFFECT ON NET INCOME (R$ 0.6 BILLION).

57

Agenda

Brazilian Economy

Highlights Itaú




Strategy

58

Segmentation

Investment Banking

59

Itaú

ItaucredItaú BBAItaubanco

Banking

Credit Cards (Current Account

Holders)Insurance,

Pension Plans and

CapitalizationInvestment Funds and Managed Portfolio

Corporation

Corporate

Operations &

Investment

Banking

Vehicles

Credit Cards (Non Current

Account Holders)

Taií, FIC (CBD) and FAI (LASA)

Segmentation (pro forma)

NB: The organization chart of the Itaucred segment basically reflects the transactions carried out in channels intended for non current account holders.

60

R$ MillionNet Income per segment (pro forma)

26.7%

8.9%

7.9%

56.5%

Banco Itaú

Itau BBA

Itaucred

Corporation

Net Income Breakdown in the 1st Quarter of 2006:


Net Income 4th Q/05 Variation 2005 2004 Variation

Itaubanco 888 -7.1% 3,179 3,218 -1.2%

Itaú BBA 379 2.9% 1,242 829 49.9%

Itaucred 92 41.8% 525 285 84.5%

Corporation 66 74.2% 305 (555) 154.9%

Consolidated 1,425 2.5% 5,251 3,776 39.1%

1st Q/06

824

390

130

115

1,460

61

RAROC* per segment (pro forma)


RAROC 4th Q/05 Variation 2005 2004 Variation

Itaubanco 47.2% -830 b.p. 43.1% 46.9% -380 b.p.

Itaú BBA 37.0% -100 b.p. 34.2% 27.2% 700 b.p.

Itaucred 22.9% 510 b.p. 39.8% 35.2% 460 b.p.

Corporation 12.2% 2,070 b.p. 12.0% -21.5% 3,350 b.p.

Consolidated 37.0% -70 b.p. 35.3% 28.7% 660 b.p.

1st Q/06

38.9%

36.0%

28.0%

32.9%

36.3%

(*) Risk-Adjusted Average Return on Allocated Capital

38.9%28.0%32.9%36.0%36.3%

I taubanco Consolidated Itaú BBA Corporation Itaucred

RAROC* per segment1st Quarter of 2006

62

Itaú

CorporationItaucredItaú BBAItaubanco

FIC50% CBD50% Itaú

FAI50% LASA50% Itaú

Own stores

100% Itaú

Payroll Credit

FináustriaItaucred VehiclesBanco FiatIntercap

Vehicle Credit Cardsnon-account

holders 50% Credicard

Segmentation – Credit for Individuals

http://www.bancobmg.com.br/meio.asp

63

5,002

9,73411,512

13,1591,328 1,345

2,439

2,555

2,779

3,301

3,167

491

777

936

8601,035

1,139

1,220

1,384

4,773 5,392 6,2728,3957,381

2,351

1,241

92

432

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

Mar-04 Jun-04 Sep-04 Dec-04 Mar-05 Jun-05 Sep-05 Dec-05 Mar-06

Vehicles Credit Cards Taií Payroll Loans

Growth of 41.8% q-o-q of Net Income pro forma of Itaucred, totaling R$ 130 million in the 1st quarter of 2006.

Credit Portfolio (R$ Million)

Own Stores

5

Itaucred

64

Itaú Holding

ItaucredItaú BBAItaubanco

• Organic growth of classic

business lines;• Expansion of Insurance,

Capitalization and Pension

Plan business areas;• Maintenance of Efficiency

Ratio;• Growth of 25% in credit

portfolio; • Expectation of moderate

growth of non-performing

loans ratio.

• Focus on Investment

Banking and banking

services segments;• Continuous improvement

of market risk

management;• Growth of 5% in credit

portfolio.

• Growth of vehicle financing;• Consolidation and growth of

partnerships with CBD (FIC)

and Lojas Americanas (FAI);• Growth of number of Taií´s

Outlets (FIT);• Growth of operations with non-

account holders;• Credicard / Orbitall integration

on Itaú with operation gains;• Growth of 30% in credit

operations;• Expectation of moderate

growth of non-performing loans

ratio.

• Disclosure of the impacts of operational

risks, in compliance with Basel II

Banco Itaú Holding Financeira S.A. in 2006

65

Reinforcement in Corporate Governance

Expansion of the Compensation Committee through the creation of

the Appointments and Compensation Committee, which will, in

addition to provide guidance on the policy of compensation for the

directors of the subsidiaries, analyze and propose names for

appointment to the Executive Board, make known situations of

potential conflict of interests and propose criteria for evaluating the

activities of the Board of Directors;

Election of the fifth independent member of the Board: Dr. Gustavo

Loyola, former chairman of the Brazilian Central Bank;

Approval of an age limit (75 years) to members of the Board;

Approved the Internal Charter of the Board of Directors, which

establishes rules of functioning, functions, self-evaluation and others.

Creation of Shareholder Value

66


R$

Net Income and Earnings per Share

776 807 854 876949 920

1,0301,141

1,333 1,352 1,425 1,460

714

0.71 0.75 0.77 0.84 0.91 1.001.19 1.21 1.29 1.32

0.810.680.63

0

200

400

600

800

1,000

1,200

1,400

1,600

1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05 1Q06

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

1.80

2.00

Earnings per ShareNet Income

R$ Million

27.9%

NB: The earnings per share was adjusted to reflect the 900% stock split carried out in Oct/05.

32.0%

67

0

100

200

300

400

500

600

700

800

900

1,000

1,100

1,200

1,300

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Itaú (1)

Itaú (2)

Bovespa

In US$

100

Itaú(1) Itaú(2) Ibov.

10 years

5 years

12 months

Annual Average Appreciation in US$

Preferred Shares AppreciationEvolution of US$ 100 invested from Apr/96 to Apr/06

Asian Crisis

Russian Crisis

Real Devaluation

Argentine Crisis

Attack to WTC


(1) With dividends reinvestment (2) Without dividends reinvestment


806

371371

1,170

27,89% 23,20% 14,02%

35,98% 31,20% 23,12%

85,70% 80,37% 96,86%

Roadshow

May 2006

roadshow may 2006. 1 brazilian economy highlights itaú itaú´s positioning 1 st quarter of 2006...

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