Quarterly Management Discussion & Analysis (MDA300905.pdf)

Risk ManagementCredit Portfolio Development Consolidated by Client Type and CurrencyR$ MillionCredit Card 5,926 5,359 5,150 567 10.6% 776 15.1%Personal Loans 10,211 9,276 6,926 935 10.1% 3,285 47.4%Vehicles 9,456 8,200 6,196 1,256 15.3% 3,260 52.6%Corporate 20,251 20,418 20,763 (167) -0.8% (511) -2.5%Small and Medium-Sized Companies 11,494 11,147 9,718 347 3.1% 1,776 18.3%Rural Loans 2,443 2,363 2,627 80 3.4% (184) -7.0%Mortgage Loans 1,835 1,884 1,897 (49) -2.6% (61) -3.2%Credit Card 5,926 5,316 5,116 610 11.5% 810 15.8%Personal Loans 10,098 9,161 6,845 937 10.2% 3,254 47.5%Vehicles 9,456 8,200 6,196 1,256 15.3% 3,260 52.6%Corporate 13,070 12,622 11,896 448 3.6% 1,174 9.9%Small and Medium-Sized Companies 9,146 8,690 7,149 456 5.2% 1,997 27.9%Rural Loans 2,443 2,363 2,627 80 3.4% (184) -7.0%Mortgage Loans 1,828 1,878 1,893 (50) -2.7% (64) -3.4%Credit Card - 44 34 (44) -100.0% (34) -100.0%Personal Loans 113 115 82 (2) -1.5% 32 38.6%Vehicles - - - - - - -Corporate 7,181 7,796 8,866 (615) -7.9% (1,685) -19.0%Small and Medium-Sized Companies 2,347 2,456 2,568 (109) -4.4% (221) -8.6%Rural Loans - - - - - - -Mortgage Loans 7 6 4 1 23.3% 3 73.3%Note: Endorsements and sureties included.DepositsAt September 30, 2005, the balance of deposits added up toR$ 44,488 million, which is equivalent to a 1.8% increase in thequarter. The higher positive change was seen in time deposits,with a 4.3% growth in the quarter, to reach R$ 14,712 million.Itaú's deposit base is extremely wide and diversified; 59.9% ofDeposits Balancethe total deposit balance comes from retail customers, 14.9%from institutional customers, 13.9% from large companies, and8.9% from micro, small and mid-size companies. Itaú relies onits wide and diversified deposit base for funding, so as to ensurethe expansion of its credit portfolio.R$ MillionDemand deposits 10,274 23.1% 10,463 23.9% 11,156 26.5% -1.8% -7.9%Savings deposits 18,564 41.7% 18,571 42.5% 19,197 45.7% 0.0% -3.3%Interbank deposits 938 2.1% 556 1.3% 647 1.5% 68.7% 45.0%Time deposits 14,712 33.1% 14,104 32.3% 11,029 26.2% 4.3% 33.4%SolvencyThe solvency ratio as of September 2005 was 17.6%,corresponding to a 0.7 percentage point reduction whencompared to the prior quarter. Such decrease was primarilydriven by the acquisition of shares to be held in treasury(in connection with the sale of Itaú shares by laCaixa), thedistribution of Interest on Own Capital and the increase inweighted assets (which are particularly affected by theexpansion in the credit portfolio).43 Management Discussion and AnalysisBanco Itaú Holding Financeira S.A.