Apresentação Sr. Roberto Dumas Damas - CEBC
advertisement
Bilateral Meeting Conselho Empresarial Brasil – China (CEBC) BRAZIL OUTLOOK Roberto Dumas Damas Banco Itau BBA Shanghai Representative Office Xiamen, 10th September 2007 Itaú Group – A Global Brazilian Financial Institution The Itaú Group has an important presence in key financial centers, strong recognition and a broad range of products Member of the Dow Jones Sustainability Group Index 06/07 1st Bank of the Year 2006 Best Brazilian Bank Best Brazilian Bank Best Brazilian Bank Latin America 2006, 2005, 2004, 2003 2004, 2003, 2002, 2000 2004, 2003, 2002, 2001 Itaú Europa London Branch Itaú Europa Itaú BBA NY Rep. Office Itaú Securities (NY) Itaú NY Branch 7th consecutive year The only Latin American bank member since the DJSI creation Itaú’s shares are traded on the Sao Paulo, New York and Buenos Aires Stock Exchanges Itaú Europa Luxembourg Itaú Tokyo Branch Itaú BBA Shanghai Rep. Office Itaú Securities (Hong Kong) Itaú Bank (Cayman) Itaú BBA Nassau Branch Banco Itaú Banco Itaú BBA In August 2006, Itaú acquired BankBoston operations in Chile and Uruguay (still pending approval) Itaú BBA Uruguay Branch Itaú BBA Buenos Aires Rep. Office Banco Itaú Buen Ayre Sarbanes-Oxley: Itaú Holding is the first foreign bank listed on the NYSE to attain all Section 404 requirements of Sarbanes-Oxley Act, one year prior to the compliance deadline set by the U.S. authorities. 2 Itaú Holding Financeira – Highlights Performance leadership is reflected on the high market capitalization and outstanding results Selected Pro Forma Figures (consolidated) 1 Return on Equity – ROE (% - Y/Y) 1 62,421² ► # of employees ► Net income US$ 0.9 billion ► Total assets US$ 125.8 billion ► Loan book (including guarantees) US$ 49.3 billion ► Shareholders’ Equity US$ 12.2 billion ► Assets under Management US$ 90.8 billion ► Market Cap US$ 42.1 billion Note: 1 Recurrent ROE (excluding Goodwill amortization from BankBoston Brazil acquisition) Market Cap – US$ billion Note: 1 As of March 31st 2007 2 Includes 2,504 employees from Itau Chile and Itau Uruguay 3 SECTION 1 Brazil Outlook - Macroeconomics Inflation – CPI-A Until 1994 inflation in Brazil was a chronic phenomenon that jeopardized production capacity. 3000% 2477% 2500% 2000% 1500% ``` 1000% 500% 0% 1989 1990 1991 Year 1992 1993 1994 25% … nevertheless, after July 1994, stabilization program managed to slash inflation to international levels 20% 15% 10% 5% 3.1% 0% 1995 Source: Central Bank of Brazil 1996 1997 1998 1999 2000 2001 Year 2002 2003 2004 2005 2006 5 Current Account and Trade Balance From 1981 to 1994, Brazil had an erratic trend on its current account….. Current Account US$MM 20,000 US$ MM 10,000 …… despite Brazil’s favorite trade balance 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 -10,000 -20,000 -30,000 -40,000 Year Trade Balance US$MM 50,000 US$MM 40,000 30,000 20,000 10,000 Source: Central Bank of Brazil Year 20 05 20 03 20 01 19 99 19 97 19 95 19 93 19 91 19 89 19 87 19 85 19 83 -10,000 19 81 - 6 Current Account and Trade Balance From 1994 to 1999, stabilization program based on pegged FX deteriorated current account dramatically….. Current Account US$MM 20,000 Inflation Targeting US$ MM 10,000 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 -10,000 -20,000 -30,000 -40,000 Year Trade Balance US$MM 50,000 40,000 US$MM Despite successful results in lowering inflation, current account became to follow an unsustainable trend. 30,000 20,000 10,000 Source: Central Bank of Brazil Year 20 05 20 03 20 01 19 99 19 97 19 95 19 93 19 91 19 89 19 87 19 85 19 83 -10,000 19 81 - 7 International Reserves and External Debt Thanks to higher productivity and world economic growth, the built up of International reserves allowed the country to reduce significantly its external exposure and ended up its debt with International Monetary Fund (IMF) International Reserves (US$bn) 170 US$162bn 130 110 90 70 50 30 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 T otal External Debt (US$bn) 300 250 …. as well as to reduce its external debt by 35% since 1998 242 241 200 US$bn US$bn 150 236 210 211 215 201 150 169 158 100 50 0 Source: Central Bank of Brazil 1998 1999 2000 2001 2002 2003 2004 2005 2006 8 External Solvency Indicators Since 2002, Brazil has witnessed an impressive improvement in terms of liquidity building important buffer against international turbulences Source: Central Bank of Brazil 9 Brazil Country Risk (EMBI+) Better solvency indicators indeed led to better perceived country risk by international market players Brazil Country Risk EMBI+ and Relative EMBI+ 1,600 180 EMBI+1445 bps Relative EMBI+ 168 1,400 160 140 1,200 120 bps 1,000 100 800 80 600 60 400 EMBI+ 211bps Relative EMBI+ 24 200 40 20 0 0 Mar-07 Oct-06 May-06 Dec-05 Jul-05 Feb-05 Dec-01 Source: JP Morgan 10 Brazil Rating - Moody’s Senior Unsecured / Foreign Currency Nov-86 Upper Inv. Grade Aaa Aa1 Aa2 Aa3 A1 A2 A3 Lower Inv. Grade Baa1 Baa2 Baa3 Non-Inv. Grade Dec-87 Oct-89 Nov-94 Sep-98 Oct-00 Aug-02 Sep-04 Oct-05 Aug-06 Aug-07 Ba1 Ba2 Ba3 B1 B2 B3 Lower Caa1 Non-Inv. Caa2 Grade Caa3 Ca C Outlook Stable 11 Brazil Rating - S&P S&P - Issuer Credit Rating / Foreign Currency - Upper Inv. Grade AAA AA+ AA AAA+ A A- Lower Inv. Grade BBB+ BBB BBB- Non-Inv. Grade - Dec-94 Jul-95 Apr-97 Jan-99 Jan-01 Jul-02 Sep-04 Feb-06 May-07 BB+ BB BB- B+ B BLower CCC+ Non-Inv. CCC Grade CCCCC C Outlook Positive 12 Brazil Rating - Fitch Long Term Issuer Default Rating - Upper Inv. Grade AAA AA+ AA AAA+ A A- Lower Inv. Grade BBB+ BBB BBB- Non-Inv. Grade Dec-94 Jan-99 Feb-00 May-00 Jun-02 Oct-02 Nov-03 Sep-04 Jun-06 May-07 BB+ BB BB- B+ B BLower CCC+ Non-Inv. CCC Grade CCCCC C Outlook Stable 13 ► SECTION 2 Business Opportunities 14 Infrastructure Business Opportunities • Macroeconomic stabilization is complete and well based to face international turmoil due to high level of international reserves and low external debt. • Nevertheless, Brazil is thirsty for investments in infra structure. The Federal and State government have no available resources to invest in important sectors of the economy. • If Brazil wants to pursue a sustainable path of growth, it has to attract the private sector (domestic and mainly international) to invest in order to avoid production bottlenecks. • Investments in electric energy generation, logistics (highway and railway) are crucial to seek lasting economic growth in the long term. 15 Electric Energy - Business Opportunities • Should Brazilian economy grow at 5%p.a. in average until 2010, the current situation foresees a energy deficit scenario . Demand Scenario Energy Supply (average) 90,000 5% GDP 2% GDP 4% GDP 80,000 average MW 70,000 60,000 50,000 40,000 30,000 20,000 10,000 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 ……. nevertheless, given the time constrain to build large hydro plants, the opportunity to establish new thermal plants based on biomass (sugar cane, ethanol) and coal are at large in Brazil. 16 Infrastructure Business Opportunities • In June 2007, the Federal government along with the Ministry of Transports launched a very ambitious program named National Plan of Logistics and Transports (PNLT), for the next 15 years. Source: Ministerio dos Transportes Through Public Private Partnership (PPP) and concession grants to private sector, the government aims to accomplish US$ 86.2bn of investments from 2007 to 2022. 17 Highway - Business Opportunities Highway Net 1,724,931 Km Ppp Paved P paved Not P Under construction 196,244 Km Paved 58, 149 Km Federal 115,360 Km State 22,735 Km Municipal BRAZIL – Highways Source: ANTT – Ministerio dos transportes 11% Highway Conservation 120% 100% 80% 60% 66% 52% 39% 52% 89% 56% 48% 44% 40% 20% 34% 48% 61% 0% 2000Not Paved 2001 Good Source: CNT 2004 2002 Paved 2003 Bad 2004 18 Railway - Business Opportunities Extension of 28,977Km as 28,225 Km concession granted 90,119 cars 2,394 locomotives 11 concessionaires CVRD – 9,890Km ALL do Brasil: 7,225 Km MRS Logistica: 1,674 Km Others: 9,436 Km 19 Railway Business Opportunities • According to estimates of National Association of Railway Transport (ANTF), railway net should have 55,000 Km of extension or 89% higher!!!!!! • Approximately 85% of the products transported by railways is towards international markets (exports): . 83% iron ore . 8% soybeans . 7% steel industry • Envisages window of opportunities for international manufacturers. 20 Banco Itau BBA S.A. Shanghai Representative Office Room 1009, 10/F, One Corporate Avenue, No 222 – Hu Bin Road – Shanghai 200021 Phone: +86 21 3311 3466 dcovre@itaubba.com.br rddamas@itaubba.com.br Xiamen, 10th September 2007
