| Headline: Brazil Source: Euromoney Date: July 2001 Best bank: Banco Itaú Best debt house: Citigroup/Salomon Smith Barney Best equity house: UBS Warburg Best M&A house: JPMorgan Banco Itaú is undoubtedly the best bank in Brazil, and quite possibly the best-run bank in Latin America. Its figures for the first quarter of 2001 were astounding: a net profit of $310 million and return on equity of 42%. Remember that Banco Itaú is a commercial bank, not an investment bank where returns on equity of 42% might be more achievable. Partly for this reason, Banco Itaú has the largest market capitalization in Latin America, excluding the recently-acquired Banacci, despite the fact that its rival, Bradesco, has significantly more assets and equity. Although Banco Itaú’s BIS ratio of 13.4% is down from 18.3% in the third quarter of 2000, if excess provisions are included, as well as unrecorded tax credits, the tier one capital ratio would be above 17.8%. Banco Itaú is not just an incredibly well-run retail bank, however. Its traders are legendary, and indeed $76 million of the bank’s first-quarter profits came from long-dollar positions that took advantage of the plunging Brazilian real. |