Quarterly Management Discussion & Analysis (MDA300905.pdf)
Quarterly Management Discussion & Analysis (MDA300905.pdf) Quarterly Management Discussion & Analysis (MDA300905.pdf)
Analysis of the Consolidated Balance SheetBalance by Currency (*)The Balance Sheet by Currencies shows the balanceslinked to the local and foreign currencies. At September30, 2005, the net foreign exchange position, includinginvestments abroad and disregarding the portion ofminority interests, was a liability totaling US$ 1,740million. It should be pointed out that the gapmanagement policy adopted by the Bank takes intoconsideration the tax effects of this position. As theprofit from exchange rate variation on investmentsabroad is not taxed, Itaú constitutes a hedge (a liabilityin foreign currency derivatives) greater in volume thanthe protected asset, such that the profit from totalforeign currency exposure, net of tax effects, isconsistent with the strategy for low exposure to thisrisk adopted by Banco Itaú Holding Financeira S.A.R$ MillionForeign Exchange Portfolio 8,471 9,214 3,631 5,584 0Other 25,427 24,487 24,423 64 1,257Investments in 727 6,379 283 6,096 448Fixed Assets 1,850 1,797 1,797 0 53Deferred Expenses 220 206 206 0 15Futures 6,264Options 2,827Swaps 4,658Other 1,0827,6731426,3290012,3873,6193,249641Demand Deposits 9,978 9,244 9,243 1 752Savings Accounts 18,564 18,322 18,322 0 242Interbank Deposits 938 562 562 0 437Time Deposits 14,712 10,787 10,787 0 4,452Other Deposits 296 296 296 0 010000Foreign Exchange Portfolio 8,831 9,575 4,712 4,863 0Other 25,872 22,842 21,750 1,092 3,6496,3531,115Capital and Reserves 11,403 11,403 11,403 0 5,763Net Income 3,827 3,827 3,827 0 333Futures 10,846Options 3,016Swaps 7,003Other 2,0440016,1363,4356,3411,109(*) It does not exclude transactions between local and foreign business.44 Management Discussion and AnalysisBanco Itaú Holding Financeira S.A.
Activities AbroadActivities AbroadBanco Itaú Holding Financeira occupies a prominentplace amongst the private capital economic groupswith a presence abroad.This presence is borne out by strategically located unitsin the Americas, Europe and Asia, which afford itimportant synergy in financing foreign trade, in placingEurobonds, in providing more sophisticated financialoperations (Structured Notes), and in private bankingat Banco Itaú Europa Luxemburgo.At September 30, 2005, Itaú's consolidated investmentsabroad totaled R$ 6,096 million (US$ 2,743 million),including non-financial business.Highlights - Units AbroadR$ MillionAssets 6,799 9,049 Higher profit from the realization of the appreciation ofStockholder's Equity 1,805 1,886 securities and from financial derivative instruments, partiallyIncome accumulated in the Financial Year (20) (58) offset by contra-entries in Brazil.Income in the Quarter 39 (78)Quarterly annualized ROA 2.3% -3.4%Quarterly annualized ROE 8.9% -15.5%Assets 2,906 2,926 Lower profit from securities and financial derivativeStockholder's Equity 1,272 1,318 instruments.Income accumulated in the Financial Year 62 42Income in the Quarter 20 35Quarterly annualized ROA 2.7% 4.9%Quarterly annualized ROE 6.3% 11.1%Assets 1,221 1,296 Higher profit coming from the reduction of administrativeStockholder's Equity 218 231 costs.Income accumulated in the Financial Year 1 0Income in the Quarter 1 (2)Quarterly annualized ROA 0.3% -0.7%Quarterly annualized ROE 1.9% -3.8%Assets 7,386 7,684Stockholder's Equity 1,049 1,103Income accumulated in the Financial Year 96 84Income in the Quarter 12 14Quarterly annualized ROA 0.7% 0.7%Quarterly annualized ROE 4.7% 5.0%Recurring income.Assets 9,200 8,998 Higher profit due to the renegotiation of credit transactionsStockholder's Equity 1,750 1,792 with a company from the electricity sector, trading andIncome accumulated in the Financial Year 72 27 appreciation of securities and financial derivative instrumentsIncome in the Quarter 45 (43) that are part of the strategy with counterparties in Brazil.Quarterly annualized ROA 2.0% -1.9%Quarterly annualized ROE 10.7% -9.2%(1) BBA-Creditanstalt Bank Ltd., Banco Itaú-BBA S.A. - Nassau Branch, BBA Representaciones S.A., Banco BBA-Creditanstalt S.A. - Sucursal Uruguai, Nevada Woods S.A., Karen International Ltd., MundostarS.A., AKBAR - Marketing e Serviços Ltda., BBA Overseas Ltd and BBA Icatu Securities, INC.45 Management Discussion and AnalysisBanco Itaú Holding Financeira S.A.
- Page 5: Executive SummaryConsolidated State
- Page 10 and 11: Executive Summary - Third Quarter o
- Page 12 and 13: Analysis of the Consolidated Net In
- Page 14 and 15: Analysis of the Consolidated Net In
- Page 16 and 17: Analysis of the Consolidated Perfor
- Page 18 and 19: Analysis of the Consolidated Net In
- Page 20 and 21: Analysis of the Consolidated Net In
- Page 22 and 23: 22 Management Discussion and Analys
- Page 24 and 25: Pro Forma Financial Statements by S
- Page 26 and 27: Pro Forma Financial Statements by S
- Page 28 and 29: Itaubanco - Branch BankingThe state
- Page 30 and 31: Insurance, Pension Plan and Capital
- Page 32 and 33: Insurance, Pension Plan and Capital
- Page 34 and 35: Investment Funds and Managed Portfo
- Page 36 and 37: ItaucredThe following tables are ba
- Page 38 and 39: ItaucredVehiclesThe Vehicle segment
- Page 40 and 41: Risk ManagementMarket RiskBanco Ita
- Page 42 and 43: Risk ManagementCredit RiskCredit Op
- Page 46 and 47: Activities AbroadTrade Lines Raisin
- Page 48 and 49: Ownership StructureOwnership Struct
- Page 50: PricewaterhouseCoopersAv. Francisco
<strong>Analysis</strong> of the Consolidated Balance SheetBalance by Currency (*)The Balance Sheet by Currencies shows the balanceslinked to the local and foreign currencies. At September30, 2005, the net foreign exchange position, includinginvestments abroad and disregarding the portion ofminority interests, was a liability totaling US$ 1,740million. It should be pointed out that the gapmanagement policy adopted by the Bank takes intoconsideration the tax effects of this position. As theprofit from exchange rate variation on investmentsabroad is not taxed, Itaú constitutes a hedge (a liabilityin foreign currency derivatives) greater in volume thanthe protected asset, such that the profit from totalforeign currency exposure, net of tax effects, isconsistent with the strategy for low exposure to thisrisk adopted by Banco Itaú Holding Financeira S.A.R$ MillionForeign Exchange Portfolio 8,471 9,214 3,631 5,584 0Other 25,427 24,487 24,423 64 1,257Investments in 727 6,379 283 6,096 448Fixed Assets 1,850 1,797 1,797 0 53Deferred Expenses 220 206 206 0 15Futures 6,264Options 2,827Swaps 4,658Other 1,0827,6731426,3290012,3873,6193,249641Demand Deposits 9,978 9,244 9,243 1 752Savings Accounts 18,564 18,322 18,322 0 242Interbank Deposits 938 562 562 0 437Time Deposits 14,712 10,787 10,787 0 4,452Other Deposits 296 296 296 0 010000Foreign Exchange Portfolio 8,831 9,575 4,712 4,863 0Other 25,872 22,842 21,750 1,092 3,6496,3531,115Capital and Reserves 11,403 11,403 11,403 0 5,763Net Income 3,827 3,827 3,827 0 333Futures 10,846Options 3,016Swaps 7,003Other 2,0440016,1363,4356,3411,109(*) It does not exclude transactions between local and foreign business.44 <strong>Management</strong> <strong>Discussion</strong> and <strong>Analysis</strong>Banco Itaú Holding Financeira S.A.
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