Itau Unibanco Banco Multiplo SA ADR Q1 2010 Earnings Call Transcript

Itau Unibanco Banco Multiplo SA ADR Q1 2010 Earnings Call Transcript
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Itau Unibanco Banco Multiplo SA ADR (ITUB)

Q1 2010 Earnings Call

May 5, 2010 9:00 am ET

Executives

Daniela Ueda - Financial IR, Brazil

Alfredo Egydio Setubal - IRO

Sérgio Ribeiro da Costa Werlang, EVP of Risk Control and Finance

Silvio de Carvalho - CFO

Jean Marc Etlin - EVP of Itaú BBA

Caio Ibrahim David - Executive Officer

Marco Antunes - Accounting Director

Analysts

Daniel Abut - Citi

Jason Mollin - Goldman Sachs

Saul Martinez - JPMorgan

Marcelo Telles - Credit Suisse

Tito Labarta - Deutsche Bank

Victor Galliano - HSBC

Paul Tucker - Egerton Capital

Jorg Friedemann - Merrill Lynch

Paul Hebero - HSBC

Presentation

Operator

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» Itau Unibanco Banco Multiplo SA ADR Q1 2010 Earnings Call Transcript

This is Itaú Unibanco Holding Conference Call. (Operator Instructions). As a reminder this conference is being recorded. At this time, I would like turn the conference over to Ms. Daniela Ueda of Financial Investor Relations, Brazil. Please go ahead.

Daniela Ueda

Good morning and welcome to Itaú Unibanco Holding Conference Call about the first quarter of 2010 earnings. This conference call is being broadcast live on www.itau-unibanco.com/ir. A slide presentation is also available on this site.

Before proceeding, let me mention that forward-looking statements are being made under the Safe Harbor of the Securities Litigation Reform Act of 1996. Actual performance could differ materially from those anticipated in any forward-looking comments as a result of macro economic conditions, market risks and other factors.

With us today in this conference call in Sao Paolo are Alfredo Egydio Setubal, Investor Relations Officer; Sérgio Ribeiro da Costa Werlang, Executive Vice President of Risk Control and Finance, Silvio de Carvalho, Chief Financial Officer; Jean Marc Etlin, Itaú BBAs Executive Vice President, Caio Ibrahim David, Executive Officer and Marco Antunes, Accounting Director.

First, Mr. Alfredo Egydio Setubal will comment on the first quarter of 2010 earnings, afterwards management will be available for a question and answer session. It is now my pleasure to turn the call over to Mr. Alfredo Egydio Setubal.

Alfredo

Egydio Setubal

Good morning. It is a pleasure to be with you again to talk about the results for the first quarter of 2010. In our view the quarter's results were that we released was very good, very strong showing already some synergies of the merger and also the number that we are taking advantage of the good environment that we have here in Brazil in terms of the growth of GDP in the quarter.

For those who are following through the Internet, I will start on the highlight on slide number 2. The first one is the earnings, the recurring net income of R$ 3,168 million. That number means an increase when we compare to the previous quarter of 12.6%; and ROE of 24.4%. If we look at the number that we released considering the extraordinary items R$3.2 billion, means ROE of 25%.

The second point is extraordinary items; we show R$66 million, that is mainly related because we use the program for installment payment of federal taxes that we could use and this gave us a gain of R$145 million.

The third highlight is that we didn't use for the second quarter the additional provisions for loan losses that we made and we have at the end of the quarter the same amount as at the end of the year of R$6.1 billion, because the conditions of the economy as I said at the beginning is much better and we are seeing numbers for loan losses lower than in the previous quarter.

Related to that is the fourth highlight is the NPL ratio over 90 days and the NPL ratio over 60 days that achieved 4.9% and 5.9%. That is in line with what we have been seeing in the last quarters that we expected these numbers to reduce when we compare to the 2009, remembering that the peak was in the third quarter, 5.6. For NPL over 90 days, we continue to expect the numbers to be a little bit better during the year, as the economy continues to show good support. The final highlight is our BIS ratio that finished at 17.3%.

On slide number three, we can see on the bottom of the slide, total assets of R$634 billion with the increase of 1.6% over 12 months and 4.3% when we compare to the end of the year of 2009. Stockholders' equity of R$52.9 billion, also the increase of 4.5% when we compare to the last year.

On slide number four, recurring effect, net of taxes. As I said, we have a gain using these law for the program for installment payment of R$145 million and also we made provisions of R$79 million related to economic planned claim by individuals and debtors that entered into [adjusted] and we made the provision to face these claims. The net is R$66 million in terms of non-recurrent gain.

On slide number five, we can the managerial financial margin, $16.1 billion, it's a growth if 2.7% when we compare to the first quarter of 2009 and 2.6% negative compared to the end of the year of the fourth quarter. That financial margin with customers increased 2.1% in 12 months and 0.5% in this quarter.

The big difference is the financial margin related with the market when we had the gains last year in treasury due to the better environment and we have a decrease, both when we compare with the first quarter of 2009, we see a reduction of 23% and when we compare to the fourth quarter of 2009 31.5%.

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