Consolidated Financial Information -
Second Quarter 2008
Performance
Unibanco’s net income reached R$756 million in 2Q08, up 18.5% when compared to 2Q07. The highlight in the quarter was the 19.9% increase in operating income which reached R$1,358 million. Annualized return on average equity (ROAE) was 26.6% in 2Q08 and 25.9% in 1H08.
Highlights - Balance Sheet
Unibanco’s total assets reached R$172 billion, up 32.7% when compared to June 30, 2007. This evolution is explained mainly by the R$17.3 billion increase in total loans, mostly in auto loans, Small and Medium Enterprises (SME), credit cards and payroll loans (own origination) portfolios.
The loan portfolio increased 4.3% in the quarter and 33.6% in the last 12 months, reaching R$68,991 million in June 2008. Retail portfolio increased 39.2% in 12 months, with highlight for growth in auto loans, 86.9%, SME, 48.9%, credit cards, 35.9%, and payroll loans (own origination) portfolio, 33.9%. Wholesale portfolio grew 25.5% in the last 12 months, as a result of the increasing demand from companies in this sector for funds in the Brazilian market, mainly due to the lower liquidity in the international market.
The balance of Allowance for Loan Losses reached R$3,268 million in June 2008, representing 4.7% of the loan portfolio, from which R$985 million are based on percentages above those required by the regulatory authority.
Highlights - Results
The financial margin before provision for loan losses was R$3,215 million in 2Q08, up 22.7% from the same period last year, and 13.2% in the quarter. This evolution is mostly explained by a higher credit volume and by higher yields in some portfolios.
Unibanco’s total personnel and administrative expenses posted a 3.2% increase in the quarter. In 1H08, these expenses posted a 7.1% increase when compared to 1H07, largely due to growth in volume of business, increase of 2,045 employees and wage increases. It is worth mentioning the increase of only 4.9% in other administrative expenses under Unibanco’s direct management in the same period, below the inflation rate of 6.05% (IPCA), due to the efficiency gains and cost controls, despite the expansion of business activities.
The 20.4% revenue growth in 2Q08 compared to 2Q07, vis-à-vis a 7.6% increase in personnel and administrative expenses – a result of growth in volume of business, efficiency management and budgetary discipline – led to a 500 b.p. improvement in the efficiency ratio. In the same period, the cost to average assets ratio also improved from 4.6% to 3.7%.
Investment Banking
Unibanco announced the new Investment Banking structure, which will handle origination, structuring, distribution, and research. The new structure will enlist two new executives: Eleazar de Carvalho Filho, who will head the business unit, and Eduardo Gentil, both with extensive experience in the Brazilian and international financial sectors.
Stocks
Unibanco’s market capitalization, based on the Unit closing quotation of R$21.09, on August 6th, 2008, is R$29.4 billion.
Sustainability
In August 2008, the Bandeirantes Thermoelectric Power Plant project (UTEB) was awarded the best clean development mechanism project in Brazil, winning the Brasil Ambiental (Environmental Brazil) Prize, organized by the American Chamber of Commerce of Rio de Janeiro – AMCHAM RJ, in the category of Clean Development Mechanism.
The new Sustainability Website, launched at the end of June 2008, can be accessed at www.unibanco.com.br. The website presents Unibanco’s initiatives towards sustainable development, products aimed at reaching individual and corporate clients, policies and procedures aligned to sustainability. The website will also be available in English by the end of 2008.
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