0 1
Client base ABN AMRO Brazil
* Inactive clients database went through full revision in Jan 03
Significant organic growth based on strong corporate franchise.
3.44.3
0.24.8 5.3 5.6
1.8
1.3
1.31.4
1.51.5
1.1
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
Dec-99 Dec-00 Dec-01 Dec-02 Apr-03
Inactive clients*
Credit Card and Saving Accounts
Consumer Finance
SMEs, Corporate
Retail Banking
Active clients
5.66.2
6.87.1
7.8
6.7
In million clients
0 2
Client base - integrated approach
Front office: Increased benefit from SME platform
Payroll product offer to Corporate/WCS clients: 6,240 payroll relationships; 920,000 individual clients
Important improvements through co-ordinated selection
criteria and pricing
Acquisition of Retail clients through corporate
relationships (Payroll/PAB):
48% of new retail clients acquired through corporate
relationships
Improvements in retail client mix through co-ordinated
selection criteria
Potential growth through supply-chain banking initiatives
Retail: acquisition mix 2002 (%new clients)
Revenue synergies: largely realised
Synergies currently realised between Retail and Corporate/WCS are
significant.
48%
52%
Corporate relationship Branches
0 3
Client segmentation
Breakdown of Active Checking Accounts (2003)
Breakdown by Affinity Group (2003)
Monthly Income
Premium Clients:
> R$4,000
Special Clients:
R$4,000 - R$1,200
Classic Clients:
< R$1,200
17%
30%
53%
Premium Special Classic
23%
29%13%
14%
7%
14%
College StudentsSenior CitizensMilitaryProfessionals of EducationMedical DoctorsOther
0 4
Average account revenue per segment
Index: Avg Classic revenue = 100
Client segmentation
Client segmentation currently being implemented is based on each segment revenue potential and is focused in: Providing products and services in-line with customer expectations
Strengthening relationship management capabilities
100
265
581
1,119
0
200
400
600
800
1000
1200
Classic Special Premium SME's
0 5
Client loyalty vs results
Source: Gallup, 2002
Clients of Banco Real
TotalTotally
EngagedEngaged
Not Engaged
Actively Disengaged
% % % % %
Gross margin 100 135 100 94 71
Avg results = 100
0 6
Client loyalty vs relationship approach
Source: Gallup, 2002
Clients of Banco Real
TotalTotally
EngagedEngaged
Not Engaged
Actively Disengaged
% % % % %
Priority is "Sell" 34 17 24 35 52
Priority is "Relationship" 60 78 70 59 41
0 7
Client loyalty
Source: Gallup, 2002
Around 34% of clients are totally satisfied with Banco Real. The evolution in Special and Premium segments is expressive.
Mar-01 Jul-02 Nov-02
All Segments 18% 32% 34%
Classic 16% 33% 31%
Special 17% 30% 38%
Premium 31% 38% 43%
% Totally Satisfied
0 8
Client loyalty
Source: Gallup, 2002
Besides “overall satisfaction”, clients from segments Special and Premium intend to keep the relationship with Banco Real and would probably recommend the Bank to others, which reflects their Loyalty
Jun/2002 ________
L3 = 15%
Satisfaction32%
Recommend 34%
Continue 33%
L3
Nov/2002 ________
L3 = 17%
Satisfaction34%
Recommend 39%
Continue 35%
L3
0 9
Our focus region
ABN AMRO Brazil focus region for organic growth: the marked area, the States’ capitals and Brazil’s main cities.
Focus Region as %of Brazil
GDP 59%Population 44%GDP per Capita 134% of Brazilian
averageArea 11%Deposits 69%Loans 65%Clients 62%
0 10
Sudameris - The rationale
The consolidation in the Brazilian banking market is continuing. Since Dec/01,
Bradesco has acquired Banco Mercantil de São Paulo, Banco Cidade (SMEs),
Banco do Estado do Amazonas, Banco Ford and BBVA Brazilian operation,
whilst Itaú acquired Banco Fiat and Banco BBA.
Considering size of portfolio, excellent client reach and high concentration of
branches in the state of São Paulo (the wealthiest state of Brazil where Banco
Real had historically lower market share), Sudameris was the best option to fit
ABN AMRO’s growth and strategic goals.
Sudameris improves ABN AMRO’s market share immediately, especially in
some specific segments like SMEs and upscale clients.
The integration of Sudameris operations will enhance ABN AMRO’s
competitive positioning.
0 11
Sudameris - The Final Agreement
ABN AMRO finalized the terms of the agreement with Intesa, last June 13th, to buy its
94.57% of the total share capital of Banco Sudameris Brasil S.A.. The proposal valued
Intesa’s stake at R$ 2.3bln. The acquisition will be phased over three years and fully
funded in Brazil.
Banco ABN AMRO Real S.A (“AAR”) will pay R$526mln in cash and proceed with a share
swap with shares of AAR. In this structure Intesa will become circa 12.89% shareholder of
AAR (to be confirmed at closing). The exit for Intesa can be summarised as follows:
Intesa will have the right to swap their shares in AAR for shares of ABN AMRO
Holding N.V. (“AA Holding”) in three annual installments. Intesa’s price for the put
right : the book value of Intesa’s stake in AAR, multiplied by 1.82
ABN AMRO Participações Financeiras S.A. (“AA Part”, the Brazilian holding
company of AAR) will have the right to call Intesa’s shares in AAR at anytime. AA
Part’s price for the call right: equivalent to Intesa’s put right, however ABN AMRO
call can be exercized at anytime.
0 12
Focus Region
Clients and Branch Network
Sudameris has approximately 500,000 clients (380,000 current accounts),
concentrated in our Focus Region (especially in São Paulo). Sudameris’ clients are
mainly upscale and the bank is known for its focus on SME’s.
34% of ABN AMRO Brazil’s retail branch
network and 53% of Sudameris’ branch network
are concentrated in São Paulo state.
563
137
287
156
ABN AMRO Sudameris
Other regions São Paulo
0 13
Branch network expansion
Expected Evolution in Number of Branches(excluding PABs)
Growth focused in the most economically developed regions of the country
Presence in all state capitals
Although acquisitions such as Bandepe and Paraiban are focused on client acquisition, they also contribute to increase the number of branches.
680739
849 850 860
1,127
1999 2000 2001 2002 2003E 2003E AAR+
Sudameris
0 14
Non-traditional distribution channels
Non-branch transactions are growing regularly, reducing costs and increasing client convenience.
*Non Branches include transactions through direct channels and operational centres
65% 71% 75% 79% 81%
35% 29% 25% 21% 19%
1999 2000 2001 2002 abr/03
Non Branches* Branches
0 15
Infrastructure and ATM network
Investments made since 1998 created competitive infrastructure to Banco Real, which will be key to integrate Sudameris.
Number of ATM’sMainframeUsage & Capacity (MIPS)
1,603
2,286 2,401
3,244
4,493
5,667 5,715
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
Jan-
00
Apr
-00
Jul-0
0
Oct
-00
Jan-
01
Apr
-01
Jul-0
1
Oct
-01
Jan-
02
Apr
-02
Jul-0
2
Oct
-02
Jan-
03
Apr
-03
3,992
4,912
6,0406,699 6,730
Dec-99 Dec-00 Dec-01 Dec-02 Apr-03
0 16
Call center
Call center implemented in Brazil in
1985
7 days X 24 hours
Full service
Inbound and proactive outbound
activities
450 workstations
1,290 people
14 million calls per month
Part of Call center transactions are
migrating to Real Internet Banking
*Calls answered within 20 seconds**Assisted calls
2001 2002YTD May
2003
Availability 93.7% 99.0% 99.5%
Automatic answering 70.0% 74.0% 77.0%
Level of service* 78.0% 79.0% 87.0%
Transactions per call** 2.7 2.3 2.6
0 17
Internet banking
Real Internet Banking was started on February 2000. Since then, nearly 30% of Real’s current account clients have become users of this service.
Number of Real Internet Bkg users (in thd)
Number of Transactionsdone through internet (in mln)
197248
299
364
421472
527
641680 697
Dez-00
Mar-01
Jun-01
Se
t-01
Dez-0
1
Ma
r-02
Jun-02
Se
t-02
Dez-02
Ma
i-03
2.2
3.2 3.4 3.5
5.0
5.7 5.96.4
6.7
7.3
Dez-00
Mar-01
Jun-01
Se
t-01
Dez-0
1
Ma
r-02
Jun-02
Se
t-02
Dez-02
Abr-0
3
0 18
Corporate internet banking
Real Internet Empresa (Banco Real’s office bank through internet) was launched on August 2000. More than 95 thousand corporate and SME clients of Real are users of this service.
Number of companies usingReal Internet Empresa
0
20,000
40,000
60,000
80,000
100,000
120,000
Sep
-00
Dec
-00
Mar
-01
Jun-
01
Sep
-01
Dec
-01
Mar
-02
Jun-
02
Sep
-02
Dec
-02
Mar
-03
0 19
5C&CC Brazil - Financial Performance
0 20
Brazil: contribution to Global C&CC
C&CC Pre-Tax Profit (1Q03)
Brazil accounted for 9% of C&CC’s global result in 1Q03.
9%9%
63%
19%
Brazil North America Netherlands Other
0 21
C&CC Brazil: gross revenues
Evolution total C&CC Brazil gross revenues (NIR + fees)R$ million
912 886
1,019 1,057 1,036 1,0511,144
1,2781,259
1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02 4Q02 1Q03
0 22
C&CC Brazil: fee income retail
Evolution fee income Retail C&CC BrazilR$ million
416
485
575
2000 2001 2002
0 23
Evolution total expenses C&CC Brazil R$ million
C&CC Brazil: total expenses
575 575644
753682
739793
897814
1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02 4Q02 1Q03
0 24
C&CC Brazil: risk management
Credit scoring : Reducing manual approvals of credit limits# of monthly approvals in thd
Sustainable growth in a controlled environment
62 58
101
51
77 829121.9%
6.9%
4.2%1.8%
3.0% 2.4%1.6%
Jun-00 Dec-00 Jun-01 Dec-01 Jun-02 Dec-02 Mar-03
# approvals % manual approvals
0 25
C&CC Brazil: risk management
Actions taken have avoided further deterioration of the credit portfolio despite the 2002 adverse economic scenario... (past due loans > 15 days, % of total credit portfolio)
Sustainable growth in a controlled environment
2.00%
2.20%
2.40%
2.60%
2.80%
3.00%
3.20%
3.40%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2001 2002 2003
0 26
C&CC Brazil: risk management
...The effective credit losses (total credit expenses) are under control & the C&CC runs with sound spread(amounts in R$ million)
Sustainable growth in a controlled environment
Qtrly evolution of total credit expense and revenue as percentage of loans
Qtrly total credit expenses and revenues evolution
0
5,000
10,000
15,000
1Q02 2Q02 3Q02 4Q02 1Q03
0%
5%
10%
Loans Qtrly credit exp.%Loan Qtrly revenues%Loans
-
4,000
8,000
12,000
1Q02 2Q02 3Q02 4Q02 1Q03
-
400
800
1,200
1,600
2,000
Loans Qtrly revenues Qtrly credit exp.
Credit exp., RevenuesLoans
0 27
C&CC Brazil: Profit & Loss R$ million
R$ mln 2001 2002 %change
Revenues 3,852 4,486 16.5
Expenses (2,549) (3,116) 22.2
Operating Profit 1,303 1,370 5.1
Provisions (394) (462) 17.0
Oper. Profit Before Taxes 909 908 (0.0)
Taxes (75) 240 (418.3)
Net Profit 833 1,148 37.8
Efficiency Ratio 66% 69% NA
0 28
C&CC Brazil: Profit & Loss R$ million
R$ mln 4Q02 1Q03 %change
Revenues 1,165 1,278 9.7
Expenses (897) (814) (9.3)
Operating Profit 268 464 73.1
Provisions (83) (149) 79.5
Oper. Profit Before Taxes 185 315 70.3
Taxes (57) (90) 57.9
Net Profit 128 225 75.8
Efficiency Ratio 77% 64% NA
0 29
Thank You
0 30
Appendix 1
Background
0 31
Timeline
1917 1925 1963 1971ABN AMRO Bank initiates its operations in Brazil under the name "Banco Holandês de América do Sul." The first offices are located in Rio de Janeiro and Santos.
Clemente de Faria establishes "Cooperativa Bancária", three years later renamed as Banco de Lavoura de Minas Gerais, the predecessor of Banco Real.
Banco Holandês Unido acquires 50% of Aymoré de Crédito, Financiamento e Investimento, which will become a leader in the segment of car loans. The remaining 50% was acquired in 1970.
Banco de Lavouras de Minas Gerais, which two years before had established its headquarters in São Paulo, is renamed as Banco Real S.A.
1993 1994 1998 2000 2001 2003Banco Holandês is renamed as ABN AMRO Bank and moves its headquarters from Rio de Janeiro to São Paulo.
The Brazilian operation of ABN AMRO presents the third largest net income of the international network.
in July ABN AMRO announces the acquisition of Banco Real, completed in November. Also in November ABN AMRO acquires Bandepe S.A.
Banco Real mergers with Banco ABN AMRO S.A.
ABN AMRO acquires Paraiban
ABN AMRO acquires Sudameris
0 32
Appendix 2
Sudameris Acquisition
0 33
Sudameris - Background
On 4Q01 ABN AMRO approached Intesa showing interest in Sudameris.
On December 2001, Intesa and Banco Itaú entered into an agreement for the
purchase of Sudameris.
On November 2002, the parties broke up the negotiations since they could
not reach a satisfactory agreement in connection with the purchase price
adjustment.
ABN AMRO approached Intesa again on December 2002.
Further to subsequent discussions with Intesa, a new proposal has evolved
and finally an agreement was reached on April 16th.
0 34
Sudameris - Branch network
Apr-03
Branch Network Banco Real Sudameris
São Paulo 287 156
Focus Region(except São Paulo)
293 68
Outras region 270 69
# Branches Total 850 293
# PAB's Total 796 51
0 35
R$ mln
Sudameris Financials
Total Assets 16,020 18,716 -14.4%
Securities (TVM) 3,344 6,390 -47.7%
Loans 7,861 8,359 -6.0%
Off balance guaraqntees 561 759 -26.1%
Provisions 559 634 -11.9%
Provisions / Loans 7.1% 7.6% -48 bp
Loan Portfolio AA-B% 79.0% 83.0% -396 bp
Deposits 5,709 4,950 15.3%
AUM (Anbid) 5,403 7,400 -27.0%
Deposits + AUM 11,112 12,350 -10.0%
Networth 1,324 1,276 3.7%
Interest Revenue 4,582 3,886 17.9%
Financial Margin 1,519 1,300 16.8%
Provisions (P&L) 369 393 -6.2%
Net Interest Margin 1,150 907 26.8%
Fee Income 301 322 -6.5%
Personnel Expenses 552 515 7.2%
Other Expenses 456 454 0.4%
Net Income 220 178 24.0%
ROE 16.6% 13.9% 271 bp
ROA 1.4% 0.9% 43 bp
Branches 293 292 0.3%
Branches + PABs 344 356 -3.4%
Employees 6,298 6,531 -3.6%
Dec/02 Dec/01 % ch Dec/02 Dec/01 % varR$ mln
0 36
Appendix 3
C&CC Brazil - Financial Performance
0 37
C&CC Brazil: Profit & Loss R$ million
R$ mln 1Q02 1Q03 %change
Revenues 1,036 1,278 23.4
Expenses (682) (814) 19.4
Operating Profit 354 464 31.1
Provisions (117) (149) 27.4
Oper. Profit Before Taxes 237 315 32.9
Taxes (66) (90) NA
Net Profit 171 225 31.6
Efficiency Ratio 66% 64% NA
0 38
C&CC Brazil: Profit & Loss Euro million
EUR mln 2001 2002 %change
Revenues 1,920 1,736 (9.6)
Expenses (1,290) (1,199) (7.1)
Operating Result 630 537 (14.8)
Provisions (193) (193)
Oper. Profit Before Taxes 437 344 (21.3)
Taxes (39) 57
Profit After Taxes 398 401 0.8
Minority Interest (9) (10) 11.1
Net Profit 389 391 0.5
Efficiency Ratio 67% 69% NA
0 39
C&CC Brazil: Profit & Loss Euro million
EUR mln 1Q02 1Q03 %change
Revenues 536 361 (32.6)
Expenses (355) (227) (36.1)
Operating Result 181 134 (26.0)
Provisions (59) (42) (28.8)
Oper. Profit Before Taxes 122 92 (24.6)
Taxes (34) (41) NA
Profit After Taxes 88 51 (42.0)
Minority Interest (3) (1) (66.7)
Net Profit 85 50 (41.2)
Efficiency Ratio 66% 63% NA
0 40
C&CC Brazil: Profit & Loss Euro million
EUR mln 4Q02 1Q03 %change
Revenues 346 361 4.3
Expenses (257) (227) (11.7)
Operating Result 89 134 50.6
Provisions (30) (42) 40.0
Oper. Profit Before Taxes 59 92 55.9
Taxes (18) (41) NA
Profit After Taxes 41 51 67.0
Minority Interest 1 (1) NA
Net Profit 42 50 68.2
Efficiency Ratio 74% 63% NA
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