Consolidated Financial Information -
Third Quarter 2008
Performance
Unibanco's net income reached R$704 million in 3Q08, up 5.5% from 3Q07. In 9M08, net income was R$2,201 million, a 16.8% growth when compared to recurring net income in 9M07. The highlight was the 22.2% increase in operating income in 9M08 when compared to 9M07, which reached R$3,333 million. Annualized return on average equity (ROAE) reached 23.9% in 3Q08 and 24.4% in 9M08.
Highlights - Balance Sheet
Unibanco's total assets reached R$179 billion, a 33.3% annual increase. This evolution is explained mainly by the R$18.4 billion increase in total loans, mostly in auto loans, large corporate, small and medium enterprises (SME), mortgages, credit cards and payroll loans (own origination) portfolios.
The loan portfolio reached R$74,272 million, a 7.7% evolution in the quarter and 32.9% in 12 months. Retail portfolio increased 28.5% in 12 months, with highlight for growth in auto loans, 65.3%, SME, 37.0%, mortgages, 32.2%, credit cards, 26.8%, and payroll loans (own origination) portfolio, 26.6%. Wholesale portfolio grew 39.8% in 12 months, influenced by the 20.3% Real depreciation in the quarter and 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$3,463 million in September 2008, representing 4.7% of the loan portfolio, from which R$970 million are based on percentages above those required by the regulatory authority.
Highlights - Results
The financial margin before provision for loan losses, was R$8,732 million in 9M08, up 18.4% from the same period last year. This evolution is mostly explained by a higher credit volume.
Unibanco's total personnel and administrative expenses posted a 9.0% growth in 9M08 when compared to 9M07, largely due to growth in volume of business, increase of 2,816 employees and wage increases. It is worth mentioning the growth of 6.8% in other administrative expenses under Unibanco?s direct management in the same period, below the inflation rate of 12.31% (IGPM), due to the efficiency gains and cost controls, despite the expansion of business activities.
In 9M08, the efficiency ratio improve from 9M07, reaching 46.0%. The cost to average assets ratio also favorably decreased from 4.7% in 9M07 to 3.7% in 9M08.
Stocks
Unibanco's market capitalization, based on the Unit closing quotation of R$19.45, as of September 30, 2008, was R$27.1 billion.
Sustainability
In July 2008, Unibanco Asset Management (UAM) endorsed the Principles for Responsible Investment (PRI), an initiative by the United Nations for incorporating environmental, social and corporate governance (ESG) issues into the investment decision-making process.
Subsequent Event
On November 3, Itaú and Unibanco signed an agreement for merger of their financial operations, establishing the largest conglomerate in southern hemisphere, with a market value among the 20 largest financial institutions in the world. The created financial institution will be fully capable of competing with the biggest banks in the global market.
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