Quarterly Management Discussion & Analysis (MDA300905.pdf)

Credit Cards - Account HoldersThe pro forma financial statements below were prepared based on Itaú internal management information and areintended to report the performance of the businesses connected with the Credit Cards of current accountcustomers, including Itaucard, Orbitall e Redecard.R$ MillionProvision for Loan and Lease Losses (99) (80) (20)Credits Recoveries and Renegotiated 12 30 (18)Service Fees 376 364 12Non-Interest Expenses (350) (329) (21)Tax Expenses for ISS, PIS and COFINS (53) (55) 2Other Operating Income 20 18 2Non-Operating Income 0 1 (0)Income Tax and Social Contribution (42) (55) 14Profit Sharing (14) (14) 1The net income from the Credit Card - Current AccountHolders segment reached R$ 96 million in the thirdquarter of 2005, declining by 15.1% compared to theprior quarter, due to non-performing loan results, as wellas non-interest expenses.The managerial financial margin showed growth, dueto the greater volume of financing, which also had animpact on the allowance for loan losses, generatinggreater expense on setting up allowances. Theincreased volume of financing is intended to improveresults, mostly on a long-term basis. Revenues from therecovery of written-off credits decreased compared tothe previous quarter, as a result of the initial impact ofthe greater efforts to collect amounts written off againstallowances.Service income grew primarily due to interchangearising from the greater volume of transactions. Noninterestexpenses increased basically due to the higherdepreciation of Redecard equipment rented to retailestablishments.Quantity of Credit Cards and Market Share12.4%13.0%13.5%13.8%14.4%14.6%Our own credit card base went up from 7,970 thousandin June to 8,259 thousand in September 2005, increasingby 3.6% in the third quarter of the year.The volume of transactions in the period totaled R$ 4.2billion, up 6.3% from the prior quarter.Volume of Transactions2,9963,2364,0133,6363,9864,2362nd Q./04 3rd Q./04 4th Q./04 1st Q./05 2nd Q./05 3rd Q./05Quantity of Credit Cards by Brand - Sep 30, 05R$ MillionIn September 2005, Itaucard had a level of activeaccounts (accounts that are billed) of 81.0%, of which78.7% carried out transactions in the last month. Theaverage movement in the quarter was R$ 1,151.39 peraccount.Diners1.2%Visa31.7%6,2616,6397,0857,518 7,970 8,259Jun/04 Sep/04 Dec/04 Mar/05 Jun/05 Sep/05Mastercard67.1%Number of Credit Cards (thousand) Market Share (%)29 Management Discussion and AnalysisBanco Itaú Holding Financeira S.A.