the seventh annual latin america equity conference new york

The Seventh Annual Latin America Equity Conference

New York

1

J.P. Morgan Securities Inc.Monday, November 6 &

Tuesday, November 7, 2000

http://www.itau.com.br/

2

Relevant Events After June 30, 2000

Highlights

Financial Performance

Shares Evolution

3

33

37

51

Page

3

Relevant Events After June 30, 2000

4

Acquisition of BANESTADO

Highlights

5

• 5th largest GDP in Brazil Growth Rate of 28% Against 12% of Brazil in Last 20 Years;

• 9.1 million inhabitants (78% urban);

• Good industrial development and lots of foreign investment;

• Strategic consistence: to concentrate efforts in the largest markets Leadership in 3 of the 5 largest Brazilian states;

Paraná

Strategic Vision

6

• Banestado is a leader in its market: Strong brand; Wide network (376 branches); Well qualified management team; Strong relation with its customers; Almost 50% of the customers are not public employees;

• 413 thousand debit cards and 181 thousand credit cards

Motivators

Strategic Vision

7Acquisition of BANESTADO

Financial Impact

8

• Simulation model with 12 variables;

• Several hypotheses analyzed;

• IRR = Interbank Deposits Rate (CDI) + 3% per year;

• Present value between R$ 500/800 million in a reasonable hypothesis.

Evaluation of Banestado’s Tax Credits

Basic Hypothesis: R$ 629 millionBasic Hypothesis: R$ 629 million

9Multiple Comparative

Assets without Tax CreditsTax Credits (Nominal Value)Assets with Tax Credits

6,6061,6598,265

5,545437

5,982

5,164343

5,507

Banestado

03.31.2000

Bandeirantes

08.31.2000

Boa Vista

08.31.2000Assets

SE without Tax CreditsTax Credits (Nominal Value)SE with Tax Credits

5541,6592,2132,213

86437523

151343495

Stockholders´ Equity (SE)

R$ Million

AuctionEmployees + Minorities

1,62555

88%12%

Total 1,680 100%

Total Price R$ MM %

10

Total Price 1,680 1,044 946

Banestado

03.31.2000

Bandeirantes

08.31.2000

Boa Vista

08.31.2000

R$ Million

Price for the Bank 1,051 753 717

Price for Tax Credit 629629 291 229

Multiple Comparative (*)

(*) For Bandeirantes and Boa Vista, tax credits present value was estimated as 67% of the Nominal Value. In Banestado, it is 38%

Nominal Value - Tax Credit 1,659 437 343

11Multiple Comparative

Banestado Bandeirantes Boa Vista Banestado Bandeirantes Boa Vista

20.32% 17.45% 17.18%Price /Total Assets (%) 15.91% 13.57% 13.88%

0.76 2.00 1.91Price/ Stockholders´ Equity (x) 1.90 8.74 4.73

36.09% 25.42% 49.39%Price / (Total Dep. + Mutual Funds) (%) 22.58% 18.33% 37.44%

Price / Nº of Customers (R$ Th / customer) 3.0 2.1 10.5 1.9 1.5 8.0

Price / Nº of Branches (R$ Th. / branch) 4,468 6,178 12,613 2,795 4,453 9,560

With Fiscal Credits Without Fiscal Credits

Price / Total Deposits (%) 44.11% 46.03% 68.09% 27.59% 33.18% 51.61%

Price / Credit Operations (%) 100.59% 57.20% 59.17% 62.92% 41.23% 44.85%

90.31% 76.22% 475.45%Price / (Demand + Savings Dep.) (%) 56.49% 54.94% 360.36%

12Conclusion

•The BANESTADO’s acquisition is justified by strong, strategic and financial aspects combined with an adequate management of the risk inherent to the transaction

•Attractive return to the shareholders:There will be no underwriting of new shares;R$ 1.6 billion of tax credits are not reflected in the stockholders’ equity;Low capital consumption (excess of capital remains high);Increase in the liquidity of the group;Synergy potential;Neutral impact on the results for 2001;Positive impact on the results from 2002 on.

13

1,765

2,130

780885

1,009 1,067 1,0601,244

1,763

896 835 766 726835

11,715 11,570

6,5587,450 7,754

8,876

10,771

0

500

1,000

1,500

2,000

2,500

94 95 96 97 98 99 Sep/00(*)0

2,000

4,000

6,000

8,000

10,000

12,000

Distribution Channels Evolution

(*) September 30, 2000

1,754

712

173

376

Branches Customer-Site Branches ATMs Banestado

14

7.6

7.0

5.25.7

6.46.7 6.8 6.9 7.0

5.85.75.3

4.94.94.74.64.1

3.83.73.63.4

2.0

3.0

4.0

5.0

6.0

7.0

Itaú Consolidado + BanestadoItaú ConsolidatedItaú

Number of Customers

September 30, 2000Banco Itaú: 5.8 MillionBanerj: 0.8 MillionBemge: 0.3 MillionBanestado: 0.6 MillionItaú Buen Ayre: 0.1 Million

Million

15Number of Customers

7.6

7.0

5.25.7

6.46.7 6.8 6.9 7.0

5.85.75.3

4.94.94.74.64.1

3.83.73.63.4

2.0

3.0

4.0

5.0

6.0

7.0

Itaú Consolidado + BanestadoItaú ConsolidatedItaú

September 30, 2000Banco Itaú: 5.8 MillionBanerj: 0.8 MillionBemge: 0.3 MillionBanestado: 0.6 MillionItaú Buen Ayre: 0.1 Million

Million

Individual Customers:Individual Customers:436 Thousand436 Thousand

183 Thousand State Payroll183 Thousand State Payroll

Company Customers:Company Customers:115 Thousand115 Thousand

Individual Customers:Individual Customers:436 Thousand436 Thousand

183 Thousand State Payroll183 Thousand State Payroll

Company Customers:Company Customers:115 Thousand115 Thousand

16Demand & Savings Accounts Evolution

0

2

4

6

8

10

12

14

16

18

BanestadoBemgeBanerjItaú

Million18.5

10.2 10.9

13.019%

9.5%

16.9

17

July, 2000

5.5 4.9 5.80.2 0.62.8

DemandDeposits

SavingDeposits

TimeDeposits

Customers CreditOperations

TotalResources

Itaú

Market Share in the State of Paraná (%)

18

July, 2000

5.5 4.9 5.8

23.4 23.325.5

16.0

24.3

0.2 0.62.8

9.3

DemandDeposits

SavingDeposits

TimeDeposits

Customers CreditOperations

TotalResources

BanestadoItaú28.9 28.2

25.727.1

21.8

9.9

Market Share in the State of Paraná (%)

19

March, 2000

40.8%

56.6%

16.4%

66.2%

Banking Services Fees/NetIncome from Financial

Operations

Efficiency Ratio

BanestadoItaú

Operating Indices – Paraná State

20

4.9 8.2 11.5 13.8 17.025.8

33.9

6.2

5.8

4.13.9

2.72.12.0

0.9

Dec-94 Dec-95 Dec-96 Dec-97 Dec-98 Dec-99 Sep-00

Banestado

Managed Portfolios

Mutual Funds

Funds Under Management

6.910.3 14.2

17.721.1

32.0

40.6R$ Billion

(*) In currency of Constant Purchasing Power as of December 31, 1995 until then, after which the calculation will be made in accordance to the Corporation Law

21

Internet Banking

Highlights

22

0

200

400

600

800

1,000

1,200

1,400

1,600

Dec-96

Mar-97

Jun-97

Sep-97

Dec-97

Mar-98

Jun-98

Sep-98

Dec-98

Mar-99

Jun-99

Sep-99

Dec-99

Mar-00

Jun-00

Sep-00

PC and Internet Banking Customers

1,363

601

297

Thousands of Customers

The Largest Brazilian Bank in PC and

Internet Banking Users

Forecast:1.5 million of

customersin Dec/2000

PC Banking

Internet Banking

663

700

23

7.47.3

2.9 3.1 3.74.7 4.7

5.86.7

2.5

4.05.0

7.0

5.95.7

5.35.2

4.74.4 4.4

3.7

3.2

3.9

3.2

5.5

0

2

4

6

8

10

12

14

Dec-97 Mar-98 Jun-98 Sep-98 Dec-98 Mar-99 Jun-99 Sep-99 Dec-99 Mar-00 Jun-00 Sep-00

PC and Internet Banking - Transactions

Million

Companies

Individuals

200019991998

13.3

IndividualsIndividuals 1,1541,154 1,0671,067

CustomersCustomers Sep/00Sep/00 Jun/00Jun/00

CompaniesCompanies 209209 196196

Thousand

5.7

24

Strategic Cooperation Itaú - La Caixa

Highlights

25Strategic Cooperation Itaú - La Caixa

Caja de Ahorros yPensiones de Barcelona“la Caixa”

•Over 150 years of activity•1st Place among the European Banks

Classified by Net Income•3rd Spanish Financial Group•Assets: US$ 74 billion•Stockholders´ Equity: US$ 5 billion•20,465 Employees.•10% of the Spanish market.•36% of the market in the Catalonia region.•4,300 branches•6,300 self-service points.

Relevant participations:•Deutsche Bank•Telefonica•Repsol-YPF•Endesa•BPI(*)

3.83%5%

9.9%5%

12.5%

(*) Itaúsa has an equal participation.

26

Caja de Ahorros y Pensiones de Barcelona - “la Caixa”

Banco Itaú S.A.

1 member in the International Advisory Committee

1 Managing Director

1%

Spain is the second largest foreign investor in Brazil

“For Itaú, the cooperation

with la Caixa means enlarge

and diversify its strategic relations,

bringing new business

opportunities”

“For Itaú, the cooperation

with la Caixa means enlarge

and diversify its strategic relations,

bringing new business

opportunities”

Strategic Cooperation Itaú - La Caixa

27Highlights

Itaú is Part of Dow Jones

28Itaú is Part of Dow Jones - SAM Group Index

Banco Itaú was, for the first time, chosen as a member of the Dow Jones Sustainability Group Index (DJSGI), along with 236 other companies, of which only two are Brazilian.

Corporate Sustainability

Ability to Create Value to the Shareholder in the Long-Term

Social, Cultural and Environmental Consciousness

Quality of Management

Basic requirements of the DJSGI companies:

DJSGI became, since its creation, in January 1999, an important reference to investors and foreign portfolio managers, who analyze

its evolution to take their investment decisions.

29Highlights

Awards

30Awards

Best Domestic Bank in Latin America – 2000 Euromoney

Investor Relations Professional – 1999 Abamec - NE

Transparency Prize - 1997, 1998 e 1999 Atlantic Rating

Investor Relations Professional - 1999 Abamec - Nationwide

Best Brazilian Bank - 1998,1999 e 2000 Euromoney

Best Domestic Bank in Brazil - 1999 Global Finance

Best Bank in Latin America - 1999 America Economia

The Best Listed Company - 1999 Abamec - SP

Investor Relations Professional - 1999 Abamec - Sul

The Best Listed Company - 1999 Abamec* - Nationwide

Best Bank in Latin America - 1998, 1999 Latin Finance

Bank of the Year – Brazil, 1999 The Banker

Best Annual Report Award - 2000 Abrasca*

Best IR Web Site In Brazil - 2000 Offline Bulletin Boardroom, Inc., New York

(*) Abrasca – Brazilian Association of Listed Companies Abamec - Brazilian Association of Capital Market Analysts

31Banco Itaú´s Ratings

Short Term Long Term Individual LegalNationalInternational

F1+B

AA+BB-

-B/C

-2T

Financial Strength RatingBank DepositsLong-Term Debts

CB3/NP

B2

Intra-Country Issuer A

Local Currency BBpi

AAA

Besides...

Moody’s

Fitch IBCA

Thomson

Standard & Poors

Atlantic Rating

32

Banco Itaú

First Aaa in Brazil

Moody’s granted Banco Itaú grade “Aaa.br”,

the highest in its scale, in the concept of

National Rating

Banco Itaú´s Ratings

33

Highlights

34Financial Highlights Evolution R$ Billion (*)

(*) Balance at the end of period (1) Including Matrix Funds

56.3 54.3 51.9 54.1 54.5 57.2

Jun.99 Sep.99 Dec.99 Mar.00 Jun.00 Sep.00

Total Assets

22.122.123.220.121.4 21.8


Deposits39.7

27.2 28.032.0 34.1 37.3


Asset Management (1)

17.6 18.5 20.0 20.2 21.6 22.2

3.1 3.0 2.9 2.9 2.8 2.7

14.5 15.5 17.1 17.4 18.7 19.6 17.6 18.5 20.0 20.2 21.6 22.2


Loans

Loans & LeasingGuarantees

35

3.5%3.2%2.7%

4.1%3.3%

2.4%

-0.3%-0.9%-0.6%

Excellent Performance

(*) Annualized

33.3%30.3%

26.1%

40.3%33.8%

26.2%

-2.2%-7.0%-5.2%

ROE*

2Q99 3Q99 4Q99 1Q00 2Q00 3Q00

2Q99 3Q99 4Q99 1Q00 2Q00 3Q00

ROA*

Extraordinary

Recurring27.3%

31.2%30.7%

2.7%3.2%

3.3%

36Excellent Performance

3Q00

Efficiency Ratio

58.4%58.6%56.6%57.3%

63.2%

57.5%

2Q99 3Q99 4Q99 1Q00 2Q00 3Q00

The BIS ratio in the third quarter reached 20.2%, based on the financial

conglomerate, and18.3% based on

the company conglomerate.

BIS Ratio

20.9% 21.0% 20.8%

19.6%

18.3%

3Q99 4Q99 1Q00 2Q00 3Q00

37

Financial Performance

38Balance Sheets - Consolidated

Corporation Law Assets Liabilities

R$ Million

(*) Not included Advances on Exchange Contracts (AEC).

Deposits

Money Market Repurchase Comm.

Acceptances and Debentures

Interbank Accounts

Borrowing and On-lending Borrowings

Other Liabilities

Minority Interest

Stockholders’ Equity

Credit Operations (*)

Prov. Loan Losses

Other Assets

Permanent

Total Assets Total Liabilities

Cash and Cash Eq.

Money Market

Interbank Funds Applied

Securities

Interbank Deposits

Jun 00 Jun 00

21,888

4,672

2,916

3,152

5,191

9,912

445

6,353

16,833

(1,443)

8,183

2,991

54,529 54,529

1,557

3,867

2,740

14,188

5,613

Sep 00

22,106

6,919

2,711

2,426

5,385

10,567

441

6,678

57,233

Sep 00

1,414

2,932

2,541

16,224

6,636

17,826

(1,516)

8,189

2,987

57,233

39Balance Sheets - Consolidated

Corporation Law Assets Liabilities

R$ Million

(*) Not included Advances on Exchange Contracts (AEC).

Deposits

Money Market Repurchase Comm.

Acceptances and Debentures

Interbank Accounts

Borrowing and On-lending Borrowings

Other Liabilities

Minority Interest

Stockholders’ Equity

Credit Operations (*)

Prov. Loan Losses

Other Assets

Permanent

Total Assets Total Liabilities

Cash and Cash Eq.

Money Market

Interbank Funds Applied

Securities

Interbank Deposits

Jun 00 Jun 00

21,888

4,672

2,916

3,152

5,191

9,912

445

6,353

16,833

(1,443)

8,183

2,991

54,529 54,529

1,557

3,867

2,740

14,188

5,613

Sep 00

22,106

6,919

2,711

2,426

5,385

10,567

441

6,678

57,233

Sep 00

1,414

2,932

2,541

16,224

6,636

17,826

(1,516)

8,189

2,987

57,233

Excess ProvisionExcess Provision

Loan LossesLoan LossesR$ 616 MillionR$ 616 Million

SecuritiesSecuritiesR$ 746 MillionR$ 746 Million

Excess ProvisionExcess Provision

Loan LossesLoan LossesR$ 616 MillionR$ 616 Million

SecuritiesSecuritiesR$ 746 MillionR$ 746 Million

40Market Capitalization, Stockholders’ Equity and Consolidated Net Income (1)

18,006

5,563 5,801 5,907 6,125 6,353 6,678

9,91411,109

17,83416,566 17,395

462435365

415360

333

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

2Q99 3Q99 4Q99 1Q00 2Q00 3Q00

0

100

200

300

400

500

600

700

800Consolidated Stockholders' Equity

Market Capitalization

Consolidated Net Income

R$ Million

(1) Net Income of Quarter; Stockholders’ Equity and Market Capitalization as of period ended.

41

143

-309

535

165 179 191

403

202275

590

226

333437

522365

435 498

-107-218

-77 -36-68-15

62

Evolution of Consolidated Net IncomeQuarterly Review

R$ Million

Quartersof 1997

Quartersof 1999

Quartersof 1998

1st 2nd 3rd 4th 1st 2nd 3rd 4th 1st 2nd 3rd 4th 1st

Quarters of 2000

2nd 3rd

185

187207 205

281

761

360415 462

RecurringExtraordinary

42Net Interest Margin

11%8% 10% 11%

21%25%

20%17%

3Q97 3Q98 3Q99 3Q00

Financial Margin Interbank Rate CDI

Annual Average Rates

43

19,151

16,890

12,325

8,022

3,958 5,531

11,572

6,328

22,215

19,596

14,127

9,057

4,6345,846

11,798

6,366

82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00*

R$ Million

Credit Operations

Credit Operations and Guarantees

Credit Operations *

Market ShareSeptember 30, 2000Itaú 9.1%Banerj 0.2%Bemge 0.1%Banestado 1.1%Total 10.5%

Market ShareSeptember 30, 2000Itaú 9.1%Banerj 0.2%Bemge 0.1%Banestado 1.1%Total 10.5%

LoansLeasingO.ReceivablesAECSub-totalGuaranteesTotal

17,076751179

1,14619,1513,064

22,215

16,187647166

1,23418,2333,339

21,572

5.516.17.8

-7.15.0

-8.23.0

Sep.00 Jun.00 Var%

(*) September, 30 of 2000

44

11,729 11,680 12,409 12,486

2,147 2,4412,541 3,016

3,414 3,8483,096

3,0142,930 2,889

2,842 2,659

10,62610,025

1,4631,2871,214973

845854

1,7591,442

1,619

1,1311,193

1,423

0

2,500

5,000

7,500

10,000

12,500

15,000

17,500

20,000

22,500

Jun-99 Sep-99 Dec-99 Mar-00 Jun-00 Sep-00

Credit CardReal EstateIndividualsSmall and Medium-Sized CompaniesCorporate

R$ Million

Credit Operations by Segment

17,24318,128

19,596 22,24121,572 22,215

45Provision for Loan Losses

R$ Million

Provision for Loan Losses

Risk

AAABCDEFGH

Sub-Total

Balance

5,4837,1003,3071,598

547284327

85420

19,151

0 0

37

12264857

348

Especific

500

Generic 0

3531414359

1162

72

399

Minimum Provision Required

Guarantees 3,064

Total 22,215

% Provision

0.0%0.5%1.0%3.0%

10.0%30.0%

50.0% 70.0%

100.0%

September 30, 2000



Risk

AAABCDEFGH

Sub-Total

Balance

5,4837,1003,3071,598

547284327

85420

19,151

0 0

37

12264857

348

Especific

500

Generic 0

3531414359

1162

72

399


Guarantees 3,064

Total 22,215

% Provision

0.0%0.5%1.0%3.0%

10.0%30.0%

50.0% 70.0%

100.0%83.0% of Total Portfolio Until Risk B

(1%)

R$ MillionSeptember 30, 2000



Risk

AAABCDEFGH

Sub-Total

Balance

5,4837,1003,3071,598

547284327

85420

19,151

0 0

37

12264857

348

Especific

500

Generic 0

3531414359

1162

72

399


Guarantees 3,064

Total 22,215

% Provision

0.0%0.5%1.0%3.0%

10.0%30.0%

50.0% 70.0%

100.0%83.0% of Total Portfolio Until Risk B

(1%)Existing Provision

R$ 899 Million

R$ MillionSeptember 30, 2000



Risk

AAABCDEFGH

Sub-Total

Balance

5,4837,1003,3071,598

547284327

85420

19,151

0 0

37

12264857

348

Especific

500

Generic 0

3531414359

1162

72

399


September 30, 2000

Guarantees 3,064

Total 22,215

% Provision

0.0%0.5%1.0%3.0%

10.0%30.0%

50.0% 70.0%

100.0%

Existing ProvisionR$ 899 Million

Excess ProvisionR$ 616 Million

R$ Million

49Ratio of Default (%)

5.74.9

3.1*

2.5

2.6

2.0

2.3

2.3

3.0

6.8

8.2

3.2

3.0

3.73.8

4.54.55.3

4.9 4.2

15.2

9.0

3.2

0

2

4

6

8

10

12

14

16

M J S D M J S D M J S D M J S D M J S D M J S

1995 1996 1997 1998 1999 2000

Ratio of Default = 11 to 30 days overdue / credits that are 11 to 30 days. Since Dec. 99, this index is not calculated anymore.

Not taken into account portion of credits receivable that is issued in Provision for Loan Losses

(*) The risk control allows for the maintenance of ratios of default. In the third quarter, when compared to the previous period, the increase in the ratio can be justified by the reduced increase in total past due collections between 11 to 30 days (R$ 12 million) on the total forecasted coming due collections in the same period (R$ 2,401 million).

50

Total

Itaú Consolidated

835

3Q 2000

-4.1

Var %

1.9

3.8

-3.4

-89.2

8.1

4.2

1.4

-9.2

212

54

140

4

40

50

217

118

871

2Q 2000

208

52

145

37

37

48

214

130

R$ Million

Mutual Funds Management Fees

Collection Fees

Current and Savings Accounts Service Fees

Collection Fees Agreement with Public Co.

Interbank Tariff

Credit Operations

Credit Cards

Other Services

Banking Service Fees

51

Shares Evolution

52

0

1.000

2.000

3.000

4.000

5.000

6.000

7.000

8.000

Sep-90 Dec-91 Dec-92 Dec-93 Dec-94 Dec-95 Dec-96 Dec-97 Dec-98 Dec-99 Sep-00* Without Reinvestment

Annual AppreciationAnnual Appreciation• 10 years (Average)10 years (Average) 52.96 % 52.96 %• 5 years (Average)5 years (Average) 28.09 % 28.09 %• 12 months (Average)12 months (Average) 77.11 % 77.11 %• 2000 3.71 %2000 3.71 %

Annual AppreciationAnnual Appreciation• 10 years (Average)10 years (Average) 52.96 % 52.96 %• 5 years (Average)5 years (Average) 28.09 % 28.09 %• 12 months (Average)12 months (Average) 77.11 % 77.11 %• 2000 3.71 %2000 3.71 %

ItaúItaú BovespaBovespa

Preferred Shares - Appreciation *Evolution of US$ 100 Invested in September of 1990

7,035

1,145100

Collor Plan

Real Plan

Mexican Crisis

Asian Crisis

Russian Crisis

Real Devaluation

US$

the seventh annual latin america equity conference new york

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