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The Seventh Annual Latam Equity Conference - New York

1. The Seventh Annual Latam Equity Conference - New York. Relevant Events After June 30, 2000. Highlights. Financial Performance. Shares Evolution. Relevant Events After June 30, 2000. Highlights. Acquisition of BANESTADO. 5 th largest GDP in Brazil

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The Seventh Annual Latam Equity Conference - New York

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  1. 1 The Seventh Annual Latam Equity Conference - New York

  2. Relevant Events After June 30, 2000 Highlights Financial Performance Shares Evolution

  3. Relevant Events After June 30, 2000

  4. Highlights Acquisition of BANESTADO

  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; Strategic Vision Paraná

  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 Strategic Vision Motivators

  7. Acquisition of BANESTADO Financial Impact

  8. Evaluation of Banestado’s Tax Credits • 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. Basic Hypothesis: R$ 629 million

  9. Auction Employees + Minorities 1,625 55 88% 12% Total 1,680 100% Multiple Comparative Total Price R$ MM % R$ Million Banestado Bandeirantes Boa Vista Assets 03.31.2000 08.31.2000 08.31.2000 Assets without Tax Credits Tax Credits (Nominal Value) Assets with Tax Credits 6,606 1,659 8,265 5,545 437 5,982 5,164 343 5,507 Stockholders´ Equity (SE) SE without Tax Credits Tax Credits (Nominal Value) SE with Tax Credits 554 1,659 2,213 86 437 523 151 343 495

  10. Multiple Comparative (*) R$ Million Banestado Bandeirantes Boa Vista 03.31.2000 08.31.2000 08.31.2000 Total Price 1,680 1,044 946 Price for the Bank 1,051 753 717 Nominal Value - Tax Credit 1,659 437 343 Price for Tax Credit 629 291 229 (*) For Bandeirantes and Boa Vista, tax credits present value was estimated as 67% of the Nominal Value. In Banestado, it is 38%

  11. Multiple Comparative With Fiscal Credits Without Fiscal Credits Banestado Bandeirantes Boa Vista Banestado Bandeirantes Boa Vista Price/ Stockholders´ Equity (x) 0.76 2.00 1.91 1.90 8.74 4.73 Price / Total Deposits (%) 44.11% 46.03% 68.09% 27.59% 33.18% 51.61% Price / (Total Dep. + Mutual Funds) (%) 36.09% 25.42% 49.39% 22.58% 18.33% 37.44% Price / (Demand + Savings Dep.) (%) 90.31% 76.22% 475.45% 56.49% 54.94% 360.36% Price /Total Assets (%) 20.32% 17.45% 17.18% 15.91% 13.57% 13.88% Price / Credit Operations (%) 100.59% 57.20% 59.17% 62.92% 41.23% 44.85% 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

  12. Conclusion • 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. Distribution Channels Evolution 376 1,754 173 712 Branches Customer-Site Branches ATMs Banestado (*) September 30, 2000

  14. Number of Customers Million September 30, 2000 Banco Itaú: 5.8 Million Banerj: 0.8 Million Bemge: 0.3 Million Banestado: 0.6 Million Itaú Buen Ayre: 0.1 Million

  15. Number of Customers Individual Customers: 436 Thousand 183 Thousand State Payroll Company Customers: 115 Thousand Million September 30, 2000 Banco Itaú: 5.8 Million Banerj: 0.8 Million Bemge: 0.3 Million Banestado: 0.6 Million Itaú Buen Ayre: 0.1 Million

  16. 19% Demand & Savings Accounts Evolution Million 9.5% 18.5 16.9 13.0 10.2 10.9 Growth of 66% in the Period

  17. Market Share in the State of Paraná (%) July, 2000 Itaú

  18. Market Share in the State of Paraná (%) July, 2000 Itaú Banestado 28.9 28.2 27.1 25.7 21.8 9.9

  19. Operating Indices – Paraná State March, 2000 Itaú Banestado

  20. Funds Under Management R$ Billion 40.6 32.0 21.1 17.7 14.2 10.3 6.9 (*) 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. Highlights Internet Banking

  22. PC and Internet Banking Customers Thousands of Customers Forecast: 1.5 million of customers in Dec/2000 The Largest Brazilian Bank in PC and Internet Banking Users 1,363 700 Internet Banking 601 297 663 PC Banking

  23. PC and Internet Banking - Transactions Million Thousand 13.3 Customers Sep/00 Jun/00 Individuals 1,154 1,067 Companies 209 196 Companies 5.7 Individuals 1998 1999 2000

  24. Highlights StrategicCooperation Itaú - La Caixa

  25. Strategic Cooperation Itaú - La Caixa • Caja de Ahorros y • Pensiones 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. Strategic Cooperation Itaú - La Caixa Caja de Ahorros y Pensiones de Barcelona - “la Caixa” 1% “For Itaú, the cooperation with la Caixa means enlarge and diversify its strategic relations, bringing new business opportunities” Banco Itaú S.A. 1 member in the International Advisory Committee 1 Managing Director Spain is the second largest foreign investor in Brazil

  27. Highlights Itaú is Part of Dow Jones

  28. Itaú is Part of Dow Jones - SAM Group Index Basic requirements of the DJSGI companies: Banco Itaú was, for the first time, chosen as a member of theDow 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 Quality of Management Social, Cultural and Environmental Consciousness 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.

  29. Highlights Awards

  30. Best Brazilian Bank - 1998,1999 e 2000 Euromoney The Best Listed Company - 1999 Abamec* - Nationwide Investor Relations Professional - 1999 Abamec - Nationwide Investor Relations Professional - 1999 Abamec - Sul Investor Relations Professional – 1999 Abamec - NE The Best Listed Company - 1999Abamec - SP Transparency Prize - 1997, 1998 e 1999 Atlantic Rating Bank of the Year – Brazil, 1999 The Banker Best Bank in Latin America - 1999America Economia Best Bank in Latin America - 1998, 1999 Latin Finance Best Domestic Bank in Brazil - 1999Global Finance Awards Best IR Web Site In Brazil - 2000 Offline Bulletin Boardroom, Inc., New York Best Annual Report Award - 2000 Abrasca* Best Domestic Bank in Latin America – 2000 Euromoney (*) Abrasca – Brazilian Association of Listed Companies Abamec - Brazilian Association of Market Capital Analysts

  31. Banco Itaú´s Ratings Fitch IBCA Short Term Long Term Individual Legal National International F1+ B AA+ BB- - B/C - 2T Moody’s Thomson Financial Strength Rating Bank Deposits Long-Term Debts C B3/NP B2 Intra-Country Issuer A Atlantic Rating AAA Standard & Poors Local Currency BBpi Besides...

  32. Banco Itaú´s Ratings 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

  33. Highlights

  34. Loans & Leasing Guarantees Financial Highlights Evolution R$ Billion (*) Total Assets Loans 21.6 22.2 20.0 20.2 17.6 18.5 Deposits Asset Management (1) (*) Balance at the end of period (1) Including Matrix Funds

  35. 2Q99 3Q99 4Q99 1Q00 2Q00 3Q00 2Q99 3Q99 4Q99 1Q00 2Q00 3Q00 Excellent Performance ROE* 31.2% 27.3% 30.7% Recurring Extraordinary ROA* 3.2% 3.3% 2.7% (*) Annualized

  36. Excellent Performance The BIS ratio in the third quarter reached 20.2%, based on the financial conglomerate, and 18.3% based on the company conglomerate. 3Q00

  37. Financial Performance

  38. Sep 00 Sep 00 Jun 00 Jun 00 1,414 2,932 2,541 16,224 6,636 22,106 6,919 2,711 2,426 5,385 10,567 441 6,678 1,557 3,867 2,740 14,188 5,613 21,888 4,672 2,916 3,152 5,191 9,912 445 6,353 16,833 (1,443) 8,183 2,991 17,826 (1,516) 8,189 2,987 57,233 54,529 54,529 57,233 Balance Sheets - Consolidated Corporation Law R$ Million Assets Liabilities Cash and Cash Eq. Money Market Interbank Funds Applied Securities Interbank Deposits 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 (*) Not included Advances on Exchange Contracts (AEC).

  39. Sep 00 Sep 00 Jun 00 Jun 00 1,414 2,932 2,541 16,224 6,636 22,106 6,919 2,711 2,426 5,385 10,567 441 6,678 1,557 3,867 2,740 14,188 5,613 21,888 4,672 2,916 3,152 5,191 9,912 445 6,353 16,833 (1,443) 8,183 2,991 17,826 (1,516) 8,189 2,987 57,233 54,529 54,529 57,233 Balance Sheets - Consolidated Corporation Law R$ Million Excess Provision Loan Losses R$ 616 Million Securities R$ 746 Million Assets Liabilities Cash and Cash Eq. Money Market Interbank Funds Applied Securities Interbank Deposits 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 (*) Not included Advances on Exchange Contracts (AEC).

  40. Market Capitalization, Stockholders’ Equity and Consolidated Net Income (1) R$ Million (1) Net Income of Quarter; Stockholders’ Equity and Market Capitalization as of period ended.

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

  42. Net Interest Margin Annual Average Rates

  43. Sep.00 Jun.00 Var% Loans Leasing O.Receivables AEC Sub-total Guarantees Total 17,076 751 179 1,146 19,151 3,064 22,215 16,187 647 166 1,234 18,233 3,339 21,572 5.5 16.1 7.8 -7.1 5.0 -8.2 3.0 Credit Operations * R$ Million Credit Operations Market Share September 30, 2000 Itaú 9.1% Banerj 0.2% Bemge 0.1% Banestado 1.1% Total 10.5% Credit Operations and Guarantees (*) September, 30 of 2000

  44. 22,215 21,572 22,241 19,596 18,128 17,243 Credit Operations by Segment R$ Million

  45. Provision for Loan Losses September 30, 2000 R$ Million Provision for Loan Losses Minimum Provision Required Risk Balance % Provision Especific Generic AA A B C D E F G H 5,483 7,100 3,307 1,598 547 284 327 85 420 0.0% 0.5% 1.0% 3.0% 10.0% 30.0% 50.0% 70.0% 100.0% 0 35 31 41 43 59 116 2 72 0 0 3 7 12 26 48 57 348 Sub-Total 19,151 500 399 Guarantees 3,064 Total 22,215

  46. Provision for Loan Losses September 30, 2000 R$ Million Provision for Loan Losses Minimum Provision Required Risk Balance % Provision Especific Generic AA A B C D E F G H 5,483 7,100 3,307 1,598 547 284 327 85 420 0.0% 0.5% 1.0% 3.0% 10.0% 30.0% 50.0% 70.0% 100.0% 0 35 31 41 43 59 116 2 72 0 0 3 7 12 26 48 57 348 83.0% of Total Portfolio Until Risk B (1%) Sub-Total 19,151 500 399 Guarantees 3,064 Total 22,215

  47. Provision for Loan Losses September 30, 2000 R$ Million Provision for Loan Losses Minimum Provision Required Risk Balance % Provision Especific Generic AA A B C D E F G H 5,483 7,100 3,307 1,598 547 284 327 85 420 0.0% 0.5% 1.0% 3.0% 10.0% 30.0% 50.0% 70.0% 100.0% 0 35 31 41 43 59 116 2 72 0 0 3 7 12 26 48 57 348 83.0% of Total Portfolio Until Risk B (1%) Sub-Total 19,151 500 399 Guarantees 3,064 Existing Provision R$ 899 Million Total 22,215

  48. Provision for Loan Losses September 30, 2000 R$ Million Provision for Loan Losses Minimum Provision Required Risk Balance % Provision Especific Generic AA A B C D E F G H 5,483 7,100 3,307 1,598 547 284 327 85 420 0.0% 0.5% 1.0% 3.0% 10.0% 30.0% 50.0% 70.0% 100.0% 0 35 31 41 43 59 116 2 72 0 0 3 7 12 26 48 57 348 Sub-Total 19,151 500 399 Guarantees 3,064 Existing Provision R$ 899 Million Excess Provision R$ 616 Million Total 22,215

  49. 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 Ratio of Default (%) 16 15.2 14 12 10 9.0 8.2 8 6.8 6 5.7 4.5 4.9 5.3 4.5 4 3.7 4.9 3.2 2.6 4.2 3.0 2.3 3.1* 3.8 3.2 3.0 2 2.5 2.3 2.0 0 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 (*) 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. Banking Service Fees R$ Million Itaú Consolidated 3Q 2000 2Q 2000 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 212 54 140 4 40 50 217 118 208 52 145 37 37 48 214 130 1.9 3.8 -3.4 -89.2 8.1 4.2 1.4 -9.2 Total 835 871 -4.1

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