IRR310313.pdf - Banco Itaú

Activities abroad
Main Operations in Latin America
Our main operations in Latin America are mainly focused on
commercial banking and concentrated in Argentina, Chile,
Paraguay and Uruguay.
We are also present in Colombia aiming to be one of the three
main investment and wholesale banks in the next five years,
focusing on companies with annual sales higher than US$100
million or which have significant projects. The segments
evaluated as the most attractive are mining, energy, oil, gas, and
areas related to infrastructure. In Peru, we have a representation
office and are considering increasing our activities in corporate
and investment banking, following the same strategy as in
Colombia, taking advantage of the strong growth of this country.
In Mexico, our focus is in the credit card market through Itaucard
México.
In addition to growing at a rate higher than the world’s average
rate, Latin America is a priority in our international expansion due
to the geographic and cultural proximity to Brazil. Our purpose is
to be recognized as the “Latin American Bank”, becoming a
reference in the region for all financial services provided to
individuals or companies.
We have expanded our business in the region in a sustainable
way over the past years and our priority is to gain economies of
scale, maintain a strong relationship with the local retail market
and strengthen our relationship with local companies. The
growth of Brazilian companies in the region favors our strategy
by setting up a client base for us to start or expand our
operations.
In 2013, we began a new stage of this strategy. Continuing the
efforts made last year, we will keep investing in the
communication and marketing of our brand, in the expansion of
our portfolio of products and services supported by a adequate
risk analysis, in financial education initiatives for clients and in the
consolidation of our corporate culture with our employees.
We are consistently investing in technological infrastructure and
processes so that we can keep growing with quality and security.
Some of the highlights of our regional operations are presented
below:
Latin America - Income Statement (1)
Argentina
Paraguay
R$ million
Uruguay
1Q13 4Q12 1Q13 4Q12 1Q13 4Q12 1Q13 4Q12
Operating Revenues 170 174 293 259 122 116 152 126
Financial Margin 118 123 194 186 88 78 60 32
Banking Service Fees and Income from Banking Charges 50 52 67 48 35 36 92 94
Result from Insurance, Pension Plans and Capitalization Operations
Before Retained Claims and Selling Expenses - - 21 16 - - - -
Other Operating Income 2 (1) 9 7 0 0 0 0
Non-operating Income 0 1 2 1 (1) 2 0 0
Loans and Retained Claims Losses net of Recovery (10) (13) (62) (34) (8) (9) (7) (8)
Operational Margin 160 161 231 224 114 107 145 118
Other Operating Expenses (136) (140) (151) (161) (52) (51) (104) (114)
Non-interest Expenses (136) (140) (150) (161) (52) (51) (104) (114)
Selling Expenses from Insurance - - (1) (0) - - - -
Income before Tax and Profit Sharing 24 21 81 63 62 56 42 3
Income Tax and Social Contribution (12) (10) (19) (13) (5) (1) (16) (2)
Profit Sharing (2) - - 0 - - (6) -
Recurring Net Income 10 11 61 50 57 55 19 1
Return on Average Equity – Annualized 9.0% 9.5% 8.4% 7.7% 30.8% 33.1% 13.2% 1.1%
Return on Average Assets – Annualized 0.9% 1.0% 1.0% 0.9% 4.5% 4.8% 1.2% 0.1%
Efficiency Ratio 79.8% 80.2% 51.5% 62.3% 42.6% 44.0% 68.0% 91.1%
Chile
Net income from our main operations in Latin America increased
26.0% (24.6% in current currency 2 ) when compared to the fourth
quarter of 2012. Operating revenues increased 9.4% (11.3% in
current currency 2 ), highlighting the financial margin increase of
86.7% in Uruguay (91.5% in current currency 2 ) due to the foreign
exchange result. Paraguay also presented a higher financial
margin with a growth of 13.0% (7.1% in current currency 2 ) due to
higher income from interbank investments and securities, and
credit operations. Regarding banking service fees, we recorded
an increase of 39.6% in Chile (42.2% in current currency 2 ), due to
commissions in the corporate segment.
On the other hand, the allowance for loan losses increased 80.6%
(84.3% in current currency 2 ) in Chile, due to the growth in credit
volume, higher defaults in the retail banking segment and the
impact of the reclassification of clients within the corporate
segment. In Paraguay, Argentina and Uruguay, the allowances
were in line with those recorded in the previous quarter.
Non-interest expenses dropped 5.2% (3.1% in current currency 2 )
mainly in Chile and Uruguay, mainly due to variable
compensation, termination of third-party service contracts
(Chile), advertising and promotions, facilities, processing
expenses, among others, and to seasonal effects arising from the
traditional increase in the last quarter of the year.
(1) The information refers to our main operations in Latin America (Argentina, Chile, Paraguay and Uruguay).
(2) Current currency for March 31, 2013.
Note: The elimination of the exchange rate variation impact was obtained by applying the closing rate of March 31, 2013 to all periods.
Management Discussion & Analysis
Itaú Unibanco Holding S.A.
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