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Itaú Consolidated Financial Performance Highlights and Evolution - March 2001

Explore Itaú's financial highlights, strategies, and performance evolution in March 2001. Analyze total assets, stockholders' equity, deposits, loans, and more. Learn about the ROA, ROE, BIS ratio, and efficiency ratio.

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Itaú Consolidated Financial Performance Highlights and Evolution - March 2001

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  1. March, 2001 1

  2. Highlights Financial Performance Strategies

  3. Highlights

  4. Financial Highlights Evolution R$ Billion (*) Itaú Consolidated 12.31.00 12.31.99 Var. (%) Total Assets Stockholders’ Equity Deposits Loans Assets under Management Mutual Funds Portfolio under Management 69.6 6.6 27.9 27.3 42.0 36.4 5.6 51.9 5.9 23.2 20.0 32.0 25.8 6.2 34.1% 11.9% 20.3% 36.2% 31.3% 41.1% -9.7% (*) Balances at the end of period

  5. Excellent Performance % Itaú Consolidated 12.31.00 12.31.99 Var. (%) 2.6% 2,7% -0,1% 27.7% 28.9% -1.2% 14.4%(*) 59.5% 3.6% 2.9% 0.7% 31.6% 25.7% 5.9% 21.0% 58.0% -27.8% -6.9% -114.3% -12.3% 12.5% -120.3% -31.4% 1.5% ROA (%) Recurring Extraordinary ROE (%) Recurring Extraordinary BIS Ratio (%) Efficiency Ratio (%) (*) The BIS ratio on December 31, 2000 reached 15.7%, based on the operational conglomerate, and 14.4% based on the financial conglomerate.

  6. Evolution of Stockholders’ Equity, Net Income and Annual Inflation Jan/81 to Dec/00 Dividends: R$ 3.2 Billion Increase of Capital(1): R$ 0.1 Billion R$ Million(*) December, 2000 Stockholders’ Equity R$ 6,642 Million Market Capitalization R$ 21,297 Million Net Income R$ 1,841 Million 95 211 65 416 1,783 480 2,708 15 9 8 2 20 10 Annual Inflation (%) (*) In currency of constant power purchasing as of December, 1995 until then, after wich in Corporation Law. (1) Increase of Capital by cash payment.

  7. Evolution of Consolidated Net Income Quarterly Review R$ Million Recurring 761 Extraordinary 579 281 415 462 360 185 205 207 187 1st 2nd 3rd 4th 1st 2nd 3rd 4th 1st 2nd 3rd 4th 1st 2nd 3rd 4th Quarters of 1997 Quarters of 1998 Quarters of 1999 Quarters of 2000

  8. Highlights Financial Performance

  9. Risk - Based Capital Ratio (BIS Ratio) Itaú Consolidated Dec.31, 2000 • Ratio in September 30, 2000 • Quarter result • Internet on capital amounting • Increase in exchange exposure • Treasury shares • Increase in the weight of tax credits • Increase in weighted assets 18.3% 1.8% -0.5% -0.3% -1.2% -0.5% -3.2% Ratio calculated in accordance with criteria in place 14.4% If taken into consideration all tax credits from Banestado, the asset market value or, instead of it, the future, cash flows net present value, and the amount of exceed provision to the minimum required besides tax credits not accounted, this ratio would be 19%.

  10. Fair Market Value R$ Million Itaú Consolidated 2000 1999 Var.% Excess Provision for Loan Losses Excess Provision for Securities Other Unrealized Gains 603 746 902 686 746 973 -12.1% 0.0% -7.3% Total 2,251 2,405 -6.4%

  11. Funding R$ Billion Itaú Consolidated Dec 00 Dec 99 Var % Deposits Mutual Funds and Portfolio under Management Borrowings and on-Lendings Acceptances and Debentures Money Market Repurchase Commitments and Interbank Deposits 27.9 42.0 6.9 3.0 11.7 23.2 32.0 5.3 3.0 5.6 20.3% 31.3% 30.4% 0.0% 108.9% Total 91.5 69.1 32.4%

  12. Dec.00 Dec.99 Var% Loans Leasing O.Receivables AEC Sub-total Guarantees Total 20,874 955 661 1,184 23,674 3,579 27,253 15,220 534 187 1,358 17,299 2,706 20,005 37.1 78.6 253.5 -12.8 36.9 32.3 36.2 Credit Operations R$ Million Credit Operations Market Share November 30, 2000 Itaú 8.6% Banerj 0.2% Bemge 0.1% Banestado 0.8% Total 9.7% Credit Operations and Guarantees

  13. Credit Operations by Segment R$ Million Credit Operations by Segment Dec 00 Dec 99 Var % Credit Card Real Estate Individuals Small and Medium-Sized Companies Corporate Non-Accrual Loans + Other Receivables 2,130 3,305 4,486 2,115 14,768 449 1,423 2,930 2,541 973 11,729 409 49.7% 12.8% 76.5% 117.4% 25.9% 9.8% Total 27,253 20,005 36.2% (-) Real Estate 3,305 2,930 12.8% Total Excluding Real Estate 23,948 17,075 40.2%

  14. Provision for Loan Losses December 31, 2000 R$ Million Provision for Loan Losses Risk % Provision Abnormal Course Normal Course Total Provision Specific Generic Total AA A B C D E F G H 0.0% 0.5% 1.0% 3.0% 10.0% 30.0% 50.0% 70.0% 100.0% - - 322 453 444 111 305 92 618 6,407 5,527 6,637 1,282 1,003 163 120 101 89 - - 3 14 44 33 153 64 618 - 29 66 38 100 49 60 70 89 - 28 69 52 145 82 212 135 707 Sub-Total 2,345 21,329 929 501 1,430 Guarantees 3,579 Total 27,253

  15. Provision for Loan Losses December 31, 2000 R$ Million Provision for Loan Losses Risk % Provision Abnormal Course Normal Course Total Provision Specific Generic Total Excess Provision: R$ 603 million AA A B C D E F G H 0.0% 0.5% 1.0% 3.0% 10.0% 30.0% 50.0% 70.0% 100.0% - - 322 453 444 111 305 92 618 6,407 5,527 6,637 1,282 1,003 163 120 101 89 - - 3 14 44 33 153 64 618 - 29 66 38 100 49 60 70 89 - 28 69 52 145 82 212 135 707 Total Provision: R$ 2,033 million Sub-Total 2,345 21,329 929 501 1,430 Guarantees 3,579 83% of Total Portfolio Until Risk B (1%) Total 27,253

  16. Provision for Loan Losses R$ Million December 31, 2000 Provision for Loan Losses Risk Credit Operations Provision for Loan Losses Total with Banestado Excluding Banestado Itaú Consol. (A) Banestado (B) Itaú excluding Banestado (A-B) AA A B C D E F G H 6,407 5,527 6,959 1,736 1,447 275 425 192 707 6,316 4,839 6,712 1,407 1,216 235 317 176 471 - 28 69 52 145 82 212 135 707 - 4 2 10 23 12 53 12 236 - 24 67 42 122 70 159 123 471 Total 23,674 21,690 1,430 352 1,078

  17. Ratio of Default (%) Percentage of credits that are 11 to 30 days overdue in relation credits that are 11 to 30 days, and in December/00 using credits that are 15 to 30 days overdue (accordance with Resolution 2,682) Percentage of credits that are 31 to 60 days overdue in relation credits that are 31 to 60 days Obs: Banestado Included Percentage of credits that are 61 to 90 days overdue in relation credits that are 61 to 90 days

  18. Income Statement R$ Million Itaú Consolidated 2000 1999 Var % Net Interest Margin Provision for Loan Losses Banking Service Fees Salaries, Employee Benefits and Other Adm. Expenses Recurring Net Income Net Income EPS (per thousand shares) Recurring ROE Recurring ROA 5,072 (764) 3,465 (5,173) 1,918 1,841 15.85 28.9% 2.8% 4,629 (814) 3,159 (4,610) 1,518 1,869 15.99 25.7% 2.9% 9.6% -6.1% 9.7% 12.2% 26.4% -1.5% -0.9% 12.5% -3.4%

  19. Income Statement R$ Million Itaú Consolidated Banking Credit Cards Insurance (1) Asset Manag. Corporat. Consolid. Interest Income Interest Expenses Net Interest Income Provision for Loan Losses Net Income after PLL Oper. Income/(Expenses) Operating Income Non Operating Income Income Tax Extraordinary Results Minority Interest Net Income 7,836 (3,721) 4,115 (496) 3,619 (1,966) 1,653 (37) (422) - (84) 1,110 432 (4) 427 (243) 184 196 379 1 (129) - (7) 244 295 - 295 (1) 294 (32) 262 14 (94) - (7) 175 - - - - - 271 271 - (92) - (12) 167 - - - - - (24) (24) (9) 312 (77) (57) 144 8,563 (3,725) 4,838 (741) 4,097 (1,556) 2,541 (31) (426) (77) (166) 1,841 (1) Insurance, capitalization and pension plans

  20. Net Interest Margin Annual Average Rates

  21. Banking Service Fees R$ Million Itaú Consolidated 2000 1999 Var % 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 831 216 593 124 156 201 866 478 903 216 570 139 134 171 660 366 -8.0 0.0 4.0 -10.8 16.4 17.5 31.2 30.6 Total 3,465 3,159 9.7

  22. Highlights Financial Performance Strategies

  23. Strategies • Cost Reduction Program

  24. Investments in Automation In 2000 – US$ 179 million Accumulated in the last 6 years: US$ 793 million Thousand of Employees Transactions per Employee 9,484 88.9 Number of Employees 47.5 1,523 Transactions per Employee

  25. Strategies • Cost Reduction Program • Internet

  26. Internet Growth in number of customers: Itaú – PC & Internet Banking Dec.99: 1.1 million Dec.00: 1.4 million Itaú – AOLA Nov. 2000: 4.3 thousand Feb. 18, 2001: 57.3 thousand +1,233% +27% “Continuous improvement of the websites, in order to strengthen the relationship with the customers; strategic alliances that aggregate value and maintain our focus on providing financial services.” • B2B • Partnership in study; • Offer complete solutions for companies through the Internet. • Acquisition of one of the most complete investment portals in Brazil, the only one with Select Funds, recommended by S&P; • Increase in the number of products and services offered.  

  27. Strategies • Cost Reduction Program • Internet • Customer Basis Expansion

  28. Customers Basis Expansion Million December 31, 2000 Banco Itaú: 5.8 Million Banerj: 0.8 Million Bemge: 0.3 Million Banestado: 0.5 Million Itaú Buen Ayre: 0.1 Million

  29. States Branches CSBs Rank (1) % of GDP(2) São Paulo Rio de Janeiro Minas Gerais Rio Grande do Sul Paraná 11% 19% 27% 5% 32% 14% 22% 18% 5% 32% 1 2 3 4 5 35.5% 11.0% 9.8% 7.7% 6.2% Total 16% 17% 70.2% Network DistributionParticipation in the Brazilian Financial System Itaú Consolidated (1) States ranked by their share in total Brazilian GDP. (2) Source: IBGE (95-98) – Brazilian Institute of Geography and Statistics.

  30. Strategies • Cost Reduction Program • Internet • Customer Basis Expansion • Strong Expansion in Personnalité Segment

  31. Year 1998 1999 2000 2001 2002 Branches 32 33 35 55 57 Customers (in thousand) 31.7 36.4 42.8 63.0 100.0 Strong Expansion in Personnalité Segment

  32. Strategies • Cost Reduction Program • Internet • Customer Basis Expansion • Strong Expansion in Personnalité Segment • Emphasis on Credit Cards

  33. Emphasis on Credit Cards Number of Credit Cards x Market Share

  34. Emphasis on Credit Cards Quantities Thousand Mastercard Visa Diners Total Itaucard Banerjcard Bemgecard Personnalité Total without Banestado Banestado Total 1,902 217 25 - 2,144 54 2,198 787 57 38 42 925 124 1,049 75 - - - 75 - 75 2,764 274 63 42 3,143 178 3,321 Average Invoice per Account: R$ 391 (Dec.00) +24.5% over Sep.00

  35. Strategies • Cost Reduction Program • Internet • Customer Basis Expansion • Strong Expansion in Personnalité Segment • Emphasis on Credit Cards • Growth in Loans (mainly consumers)

  36. Growth in Loans (mainly consumers) R$ Million Portfolio Risk Goods Acquisition Overdraft Personal Financing Leasing Others * 357 866 1,630 795 838 Sub-total 4,486 Housing Credit Cards 2,979 2,130 Total 9,595 * Sureties included

  37. Strategies • Cost Reduction Program • Internet • Customer Basis Expansion • Strong Expansion in Personnalité Segment • Emphasis on Credit Cards • Growth in Loans (mainly consumers) • Segmentation of Specific Channel for Small Companies

  38. Over R$ 50 MM R$ 4 MM to 50 MM R$ 500 thousand to 4 MM Corporate Middle Market Small Companies Segmentation of Specific Channel for Small Companies Business market segmentation of Itaú (annual sales) New Focus in Small Companies Segment with high spreads Specialized Structure in development 39,000 small companies Potential credit portfolio of R$ 1.3 billion

  39. Strategies • Cost Reduction Program • Internet • Customer Basis Expansion • Strong Expansion in Personnalité Segment • Emphasis on Credit Cards • Growth in Loans (mainly consumers) • Segmentation of Specific Channel for Small Companies • Corporate Banking

  40. Corporate Banking Volume Quantities Coordination of Operations in the Local Capital Market Fixed Income R$ 925 million (Of a total of R$ 6.5 billion) 24 operations Variable Income R$ 806 million (Of a total of R$ 9.2 billion) 6 operations Distribution of Fixed Rate Securities in the International Market US$ 1 billion 600 operations Itaú Corretora (Brokerage House) R$ 18 billion (Volume Negotiated in the Bovespa Exchange) 5.5 million (Contracts Negotiated in the BM&F Exchange) Services for the Capital Market R$ 310 billion (Custody / Management of Financing Assets) 873 contracts BNDES On-Lending R$ 1.2 billion (Disbursement) 1,063 releases Exim US$ 395 million (Disbursement) 96 releases

  41. Strategies • Cost Reduction Program • Internet • Customer Basis Expansion • Strong Expansion in Personnalité Segment • Emphasis on Credit Cards • Growth in Loans (mainly consumers) • Segmentation of Specific Channel for Small Companies • Corporate Banking • Strategic Cooperation Itaú - la Caixa

  42. Strategic Cooperation Itaú - la Caixa Caja de Ahorros y Pensiones de Barcelona - “la Caixa” 3% “For Itaú, the strengthening of the alliance with "la Caixa" means an important advance in its strategic global positioning in a context of international diversification, thus enlarging its opportunities for new business.” Banco Itaú S.A. 1 member in the International Advisory Committee 1 Managing Director 1 Member of the Board of Directors Spain is the second largest foreign investor in Brazil

  43. Strategies • Cost Reduction Program • Internet • Customer Basis Expansion • Strong Expansion in Personnalité Segment • Emphasis on Credit Cards • Growth in Loans (mainly consumers) • Segmentation of Specific Channel for Small Companies • Corporate Banking • Strategic Cooperation Itaú - la Caixa • US Broker Dealer

  44. Strategies • Cost Reduction Program • Internet • Customer Basis Expansion • Strong Expansion in Personnalité Segment • Emphasis on Credit Cards • Growth in Loans (mainly consumers) • Segmentation of Specific Channel for Small Companies • Corporate Banking • Strategic Cooperation Itaú - la Caixa • US Broker Dealer • ADR Level II

  45. Preferred Shares - Appreciation * Evolution of US$ 100 Invested in December 1990 US$ Annual Appreciation . 10 years (average) 53.58% . 5 years (average) 33.19% . 2000 12.43% 7,328 Asian Crisis Russian Crisis Mexican Crisis 1,913 Real Plan Real Devaluation * (without reinvestment of dividends)

  46. Preferred Shares - Appreciation * Evolution of US$ 100 Invested in December 1990 US$ Annual Appreciation . 10 years (average) 53.58% . 5 years (average) 33.19% . 2000 12.43% 7,328 “Largest Market Capitalization among all Latin American Banks” Asian Crisis Russian Crisis Mexican Crisis 1,913 Real Plan Real Devaluation * (without reinvestment of dividends)

  47. March, 2001 47

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