MD&A and Financial Statements (PDF) - Banco Itaú

Pro Forma Financial Statements by Segment
Itaú BBA
Itaú BBA segment is responsible for banking operations
with large companies and investment bank services. Itaú
BBA’s net income added up to R$ 789 million in the third
quarter of 2010, increasing by 33.2% compared to the
prior quarter. Return on allocated capital stood at 26.1%
per year, while the efficiency ratio reached 35.7% in the
period. The financial margin with clients totaled R$ 1,164
million, or a 5.0% rise from the prior quarter.
The outstanding quality level of the credit portfolio must
be highlighted, with 94.0% of the credits ascribed risk
ratings “AA”, “A” and “B”, in accordance with the criteria set
forth in the Brazilian Monetary Council Resolution 2,682. In
this context, the result of loan losses ended the third
quarter as R$ 143 million, mainly due to reversal of
provisions amounting to R $ 110 million.
In the third quarter, banking service fees totaled R$ 468
million, declining by 3.9% when compared to the prior
quarter, mostly as a result of the high volume of
investment bank operations carried out in the second
quarter of 2010. Non-interest expenses amounted R$ 533
million, or a 1.7% decrease from the prior quarter.
Consumer Credit
The Consumer Credit segment result includes financial
products and services offered to customers who are nonaccount
holders. In the third quarter of 2010, net income
of the segment was R$ 631 million, or a 7.0% decline in
comparison with the second quarter of the year. Such
variation is mainly related to the reduction in the financial
margin with clients, since the willingness to make financed
purchases on credit cards reduction on the this time of the
year for seasonal reasons, and the increase in costs due to
the expansion in the clients base and the replacement of
cards under the migration from Unibanco to Itaú. Return
on allocated capital was 33.7% per year, while the
efficiency ratio reached 49.3% in the period. The credit
portfolio totaled R$ 86,191 million, corresponding to a
6.4% rise from the prior quarter balance.
Itaú Unibanco Holding S.A.
On September 30, 2010, the financing of new vehicles
accounted for 56.8% of the total vehicle portfolio balance,
versus 56.1% at the end of the prior quarter. As result of
changes introduced in the collection policy during the
second quarter, we continued good performance in the
recovery of credits previously written off as losses in this
quarter.
Partnerships
Our partnerships, in the form of joint ventures and
operating agreements with major retailers present in the
Brazilian market, are responsible for the offering of
consumer credit to non-account holders. Our client base
reached 15.8 million customers in the third quarter of
2010, for total revenues of R$ 5,931 million, equal to a 26%
rise compared to revenues in the same period of the prior
year.
Amount of Transactions
4,709
4,763
5,363
5,776
5,931
3rd Q/09 4th Q/09 1st Q/10 2nd Q/10 3rd Q/10
R$ million
Vehicle Financing
During the third quarter of 2010, new operations for
vehicle financing and leasing added up to R$ 8,298 million,
or a 23.5% growth when compared to the prior quarter.
Despite the end of the IPI tax benefit in April, financing
continued at an accelerated pace and our market share
reached 24.2%, representing a 70 basis points increase
from the second quarter of 2010. As result of this growth,
the vehicle portfolio reached R$ 57,334 million.
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Management Discussion & Analysis 3 rd Quarter, 2010