BU Brazil Analyst _ Investor meeting March 2004

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BU Brazil Analyst _ Investor meeting March 2004 Powered By Docstoc
					Delivering growth and value
Business Unit Brazil of C&CC


Fabio Barbosa
SEVP - CEO of BU Brazil

                               June 14, 2004
Table of Contents

Current Brazilian Business Environment
Overview of ABN AMRO Brazil
Overview C&CC Brazil
Financial Performance
Sustainability
Outlook 2004 / 2005
Appendices




                           0             2
    Commitment to orthodox monetary
    policy has enabled stability to return
        The inflationary pressures due to the exchange rate overshooting receded significantly and
        are expected to stabilize along 2004

                                                                                                                                                        forecast
        20                                                                                                                                                                           4.5

        18                                                                                                                                                                           4.0               Dec 04 forecast
        16
                                                                                                                                                                                     3.5
        14
                                                                                                                                                                                                       BRL/USD (eop)
                                                                                                                                                                                     3.0                3.05 (maintained)




                                                                                                                                                                                           BRL / USD
IPCA%




        12
                                                                                                                                                                                     2.5
        10                                                                                                                                                                                             IPCA 12M
                                                                                                                                                                                     2.0                6.8% (revised
         8
                                                                                                                                                                                                        from 6.0%)
                                                                                                                                                                                     1.5
         6
                                                                                                                                                                                     1.0               Dec 05 forecast
         4

         2                                                                                                                                                                           0.5
                                                                                                                                                                                                       BRL/USD (eop)
         0                                                                                                                                                                           0.0                3.25 (maintained)
                                                           Nov-02




                                                                                                                 Nov-03




                                                                                                                                                                            Nov-04
             Jan-02




                                                                    Jan-03




                                                                                                                             Jan-04
                                        Jul-02




                                                                                               Jul-03




                                                                                                                                                          Jul-04
                                                 Sep-02




                                                                                                        Sep-03




                                                                                                                                                                   Sep-04
                      Mar-02

                               May-02




                                                                             Mar-03

                                                                                      May-03




                                                                                                                                      Mar-04

                                                                                                                                               May-04
                                                                                                                                                                                                       IPCA 12M
                                                                                                                                                                                                        4.5% (revised
                                                          IPCA (% , 12 months)                                            BRL / USD                                                                     from 5.1%)

        Sources: Brazilian Central Bank, IBGE, ABN AMRO


                                                                                                                 0                                                                                                 3
 The current account is now well
 under control
 The current account accumulated a USD5.8 billion surplus in 12 months ended in April
 (1.1% GDP). From 1999 to April 2004, the current account adjustment was equivalent to
 USD31.1 billion (5.8% GDP) driven mainly by exports.


                    35000
                    30000
                    25000
                    20000
                    15000
                    10000
      USD billion




                     5000
                        0
                     -5000
                    -10000
                    -15000
                    -20000
                    -25000
                                               Mar-02




                                                                                                              Oct-02




                                                                                                                                                           Mar-03




                                                                                                                                                                                                                           Oct-03




                                                                                                                                                                                                                                                                        Mar-04
                             Jan-02

                                      Feb-02




                                                                 May-02

                                                                          Jun-02

                                                                                   Jul-02




                                                                                                                                         Jan-03

                                                                                                                                                  Feb-03




                                                                                                                                                                              May-03

                                                                                                                                                                                       Jun-03

                                                                                                                                                                                                Jul-03




                                                                                                                                                                                                                                                      Jan-04

                                                                                                                                                                                                                                                               Feb-04
                                                                                                                       Nov-02

                                                                                                                                Dec-02




                                                                                                                                                                                                                                    Nov-03

                                                                                                                                                                                                                                             Dec-03
                                                                                                     Sep-02




                                                                                                                                                                                                                  Sep-03
                                                        Apr-02




                                                                                                                                                                     Apr-03




                                                                                                                                                                                                                                                                                 Apr-04
                                                                                            Aug-02




                                                                                                                                                                                                         Aug-03
                                                                                                Current Account Balance                                             Trade Balance

Sources: Brazilian Central Bank



                                                                                                                                0                                                                                                                                                         4
The surplus of the current account
allows to repay the IMF debt

                                                                                                          In USD billion

                                                              Balance of Payments - Financing Needs

                                                                                         2002         2003      2004F
                                            Trade Balance                                13.1         24.8       27.8
                                            Current Account                              -7.7          4.1        6.3
                                            Amortization
                                              Medium and Long Term Debt                  -31.1        -27.2     -38.7
                                              Short Term Debt                             -2.0         -3.5      -1.2
                                            Total external financing needs               -40.8        -26.6     -33.6
                                            Foreign Direct Investment                    16.6         10.1       12.0
                                            New Issuance                                 18.6         23.0       26.3
                                            Sources of financing                         35.2         33.1       38.3
                                            IMF Support                                  11.5          4.8       -4.4
                                              Amortization                                -4.6        -12.8      -4.4
                                              Issuance                                   16.0         17.6        0.0
                                            Gross Reserves (-/+ = decrease/increase)      1.9         11.5       -0.7
                                              Net Reserves (IMF agreement)               14.2         17.4       22.7




Sources: Brazilian Central Bank, ABN AMRO


                                                             0                                                             5
Market volatility does not reflect
Brazil’s ability to withstand shocks
 Brazil is in much better shape to deal with adverse external factors, compared to mid-90s
 and early 00s
                                 Floating FX regime
                                                        Fiscal Responsibility Law
                                                                            Social Security Reform
                                                                                                New Payments System
                                                                                                                     Capital Markets Reform
 … and currently..
                                                             FX Denominated Debt / Total Debt
                                 41

                                 38

                                 35

                                 32

                                 29
                             %




                                 26

                                 23

                                 20

                                 17

                                 14
                                                          May-02




                                                                                                                   May-03
                                               Mar-02




                                                                                                          Mar-03




                                                                                                                                                                Mar-04
                                                                                      Nov-02




                                                                                                                                              Nov-03
                                                                   Jul-02

                                                                             Sep-02




                                                                                                                            Jul-03

                                                                                                                                     Sep-03
                                      Jan-02




                                                                                                 Jan-03




                                                                                               FX Indexed Debt/Total Debt                              Jan-04
Source: Brazilian Central Bank


                                                                                                   0                                                                     6
  The government controls a
  comfortable majority in Parliament

     Governing Coalition in the House (votes)                Governing Coalition in the Senate (votes)
                                  Oct-03   Apr-04                                         Oct-03   Apr-04
I. Left-wing                       154      148         I. Left-wing                       24       18
II. Center, center-right           235      234         II. Center, center-right           27       28
(I + II) Governing Coalition       389      382         (I + II) Governing Coalition       51       46
Share in House                    76%      74%          Share in Senate                   63%      57%
PT                                 93       90          PT                                 14       13
PT share of Governing Coalition   24%       24%         PT share of Governing Coalition   27%       28%




     Source: Santa Fé, ABN AMRO


                                                    0                                                    7
Public support for the government
remains high
  Approval ratings have fallen, but are still at respectable levels

                                        Government’s Approval Rating (%)

                                 Mar 03      Jun 03     Dec 03     Feb 04   Mar 04   May 04
Good/excellent                     45          52          41        40       35       35
Regular                            34          36          42        41       43       44
Bad/negative                       8            7          13        15       19       20
Don't know                         13           6          4          4       3        2
Favorable - Unfavorable            37          44          28        25       15       15
                                                                                              Still high
Source: CNT / Sensus, ABN AMRO                                                                approval rating


                                    President Lula’s Approval Rating (%)

                                 Mar 03      Jun 03     Dec 03     Feb 04   Mar 04   May 04
Approves                           79          78          70        65       60       60
Disapproves                        12          13          21        24       31       32
Don't know                         9            9          9         11       10       8
Favorable - Unfavorable            67          65          49        41       29       28
Source: CNT / Sensus, ABN AMRO



                                                       0                                            8
Restored finance and strong
government will facilitate reforms

        Continuous effort to complete reforms

        Revision of mortgage legal framework

        New regulation to reduce number of court actions against the
         financial system regarding principal and interest

        New Bankruptcy Law

        Judiciary reform

        Public and Private Partnership regulation

        Power sector framework




                                   0                                    9
As a result, steady GDP growth seems
to be finally achievable
 GDP started to recover in Q303 albeit at a slower pace than expected. Recovery has been
 led by the manufacturing sector, responding to lower interest rates and robust external
 demand

           8.00%


           6.00%


           4.00%


           2.00%


           0.00%


          -2.00%


          -4.00%


          -6.00%
                   Mar-   Jun-   Sep-   Dec-   Mar-   Jun-   Sep-   Dec-    Jun-   Sep-   Dec-   Mar-   Jun-   Sep-   Dec-   Mar-
                    00     00     00     00     01     01     01     01      02     02     02     03     03     03     03     04

  %QoQ             1.40% 1.00% 0.30% 1.10% 1.00% -0.50%-0.90%-0.40% 0.70% 1.20% 0.10% -1.20%-0.90% 0.50% 1.50% 1.60%
  %QoQ annualized 5.60% 4.20% 1.30% 4.30% 4.10% -2.00%-3.70%-1.50% 2.80% 4.80% 0.60% -4.70%-3.60% 2.00% 6.00% 6.60%

                                                      %QoQ                 %QoQ annualized
Sources: IBGE



                                                             0                                                                 10
 Expected decline in inflation will allow
 further interest rate cuts
        Central Bank will likely continue to gradually ease monetary policy in 2004, reducing
        interest rates with caution and assessing recovery of economic activity

                                                                                                                                                forecast
        20                                                                                                                                                                      30            Dec 04 forecast
        18
                                                                                                                                                                                25            Selic (eop)
        16
                                                                                                                                                                                                14.5% pa (revised
        14                                                                                                                                                                                      from 13.5%)
                                                                                                                                                                                20
        12
IPCA%




                                                                                                                                                                                              IPCA 12M




                                                                                                                                                                                     Selic%
        10                                                                                                                                                                      15              6.8% (revised
         8                                                                                                                                                                                      from 6.0%)
                                                                                                                                                                                10
         6                                                                                                                                                                                    Dec 05 forecast
         4
                                                                                                                                                                                5
                                                                                                                                                                                              Selic (eop)
         2
                                                                                                                                                                                                12% pa
         0                                                                                                                                                                      0               (maintained)
                      Mar-02

                               May-02




                                                                            Mar-03




                                                                                                                                   Mar-04
                                        Jul-02




                                                                                     May-03

                                                                                              Jul-03




                                                                                                                                            May-04
                                                          Nov-02




                                                                                                                Nov-03




                                                                                                                                                     Jul-04




                                                                                                                                                                       Nov-04
             Jan-02




                                                                   Jan-03




                                                                                                                          Jan-04
                                                 Sep-02




                                                                                                       Sep-03




                                                                                                                                                              Sep-04
                                                                                                                                                                                              IPCA 12M
                                                                                                                                                                                                4.5% (revised
                                                          IPCA (%, 12months)                                             Selic (%, p.a.)
                                                                                                                                                                                                from 5.1%)

        Source: Brazilian Central Bank, IBGE, ABN AMRO


                                                                                                                0                                                                                            11
Economic stability and low interest
rates will unleash the growth potential
                                      Total Credit to Private Sector / GDP1
                                                                                               144%    149%
                                                                                   141%
Declining
interest rates
will enable
significant                                                         66%
volume growth
in the still          13%           15%
                                                    25%
underdeveloped
Brazilian            Mexico       Argentina         Brazil          Chile            USA         UK     NL
banking market;    Sources: World Bank, European Union Web site, IBGE


The penetration
of total credit                                   Credit to the Private Sector *
shows a large                                                                                Growth
                                                     EOP Balance
long term                      Period
                                                        in BRL billion                       nominal
growth potential
                                2002                         365                             +13%

                                2003                         395                              +8%
                                1Q04                         408                             +1.5%
                               * does not include external financing to the private sector

                                Source: Brazilian Central Bank, ABN AMRO



                                       0                                                                      12
Table of Contents

Current Brazilian Business Environment
Overview of ABN AMRO Brazil
Overview C&CC Brazil
Financial Performance
Sustainability
Outlook 2004 / 2005
Appendices




                           0             13
        ABN AMRO Brazil is a client led
        institution
                          Training
                          Competitive market conditions         Since the acquisition of Banco Real
                          Engagement in decision-               we have updated our IT infrastructure
                           making process                        to competitive standards




   Client knowledge                                                                                        Spreading
                                                                                                           ABN AMRO
   Segmentation
                                                                                                         Corporate Values
                                                                                                          Respect
                                                                                                          Professionalism

                                                                                                          Integrity

                                                                                                          Teamwork




                                                 Sustainability Model


                                                           0                                                      14
Leveraging the local, regional and
international presence to serve clients
 ABN AMRO has leading positions and strong market shares in the full range of financial
 services




     Retail Banking               Largest foreign institution by branches, loans and deposits


     Consumer Finance             Largest car financier in Brazil


     Commercial Banking           Maintains relationship with +2500 companies


     Insurance                    7th largest insurer; 5th largest pension fund by reserves


     Wholesale Banking            Relationship with +400 largest corporation in Brazil


     Asset Management             4th largest privately owned; R$25.1 bio in AUM as of Mar 04




 All data in the overview section are in Brazilian GAAP, in BRL and include all businesses of ABN AMRO Brazil - WCS and C&CC


                                                                     0                                                         15
        Leveraging on business units to
        grow the franchise
                                                                                                               As of 1Q04
                                                                                                               • 34% of individuals
                                                                Retail                                           current accounts were
                                                                                                                 from Payrolls
                                                                                                               • 29% of individual
                                                                                                                 current accounts were
                                                       Payroll                                                   from Mini Branches

                                               Commercial and
                                                 Wholesale
                    1                                                                          3
                                                                                                               Cross-selling
                                 Main banker                                                                    of financial
                                                                                                               services, loan
                                                                         Current Accounts                     and investment
                                                                            Acquisition -                        products
Higher entry
   barrier                                                                Individuals and
               Mini Branch                                               Suppliers (SMEs)   Mini Branch

                                       3                                                                               2

       2                                                                           1
               Capturing of Value
               Chain opportunities
                 through closer                                                               Payroll Loans
                client knowledge
                   and Supplier
                     relations



                                                                0                                                               16
The performance has been very good
notwithstanding economic difficulties
                  Total Assets                    in BRL million                                         Total Loans          in BRL million

                                         55,424     55,644
                                                                                                                            27,236    27,286


                              36,952
                     31,811                                                                                       17,359
            27,514                                                                                       14,065
   22,260                                                                                     11,701
                                                                                     9,577




   Dec-99   Dec-00   Dec-01    Dec-02    Dec-03     Mar-04
                                                                                     Dec-99    Dec-00    Dec-01   Dec-02    Dec-03    Mar-04



                                                               Net Income             in BRL million
                                                                   1,208     203
                                                                    336                                  Cayman Effect (positive)
                                                                            1,137
                                                                                                         Cayman Effect (negative)
                                                         91

                                                         784
                                            649
                                                                                                  7
                                 420
                                                                                       57        349
                                                                                      298                              Average inflation
                                                                                                                       in period: 8.3% pa
                                Dec-99     Dec-00      Dec-01      Dec-02   Dec-03   Mar-03     Mar-04
All data in this slide are in Brazilian GAAP, in BRL and include all businesses of ABN AMRO Brazil - WCS and C&CC


                                                                    0                                                                      17
 Results are underpinned by good
 efficiency ratios
 On a standalone basis ABN AMRO showed a significantly lower efficiency ratio in 2003
 (55.7% w/o Sudameris), the integration of Sudameris impacts this ratio temporarily.


                                               Efficiency Ratio
 65.0%
         63.8%
                 58.1%




                                           57.8%
                                                   57.6%
                                                           57.3%
                         56.8%




                                                                     56.8%




                                                                                                                   56.8%
                                                                                                                           56.0%
                                  55.9%




                                                                                                          55.7%




                                                                                                                                   55.0%
                                                                             52.4%


                                                                                              50.8%
                                                                                      49.5%                                                          ABNAMRO
                                                                                                                                           Fee Revenue/ Personnel Expenses



     ABN AMRO                             Bradesco                              Itau                              Unibanco                             70.6%        76.8%
                                                                                                                                           61.5%
                                 Dec-01            Dec-02          Dec-03            Mar-04


                                                                                                                                           Dec-02      Dec-03       Mar-04


All figures based on Brazilian GAAP as published by each institution



                                                                                                      0                                                                18
The franchise continues to deliver
high ROE


                                                                              31.8%
                                                                                         31.2%


                24.6%

                          20.8%
                                              18.5%      19.1%

                                                                                                         15.9%
                                                                                                 13.6%




                  ABN AMRO                        Bradesco                        Itau             Unibanco

                                                           1Q03        1Q04

All figures based on Brazilian GAAP as published by each institution



                                                                 0                                               19
 Retail is a key growth engine of the
 franchise
  ABN AMRO is stronger in the southeast, the wealthiest and most populated region of
  Brazil. Our strategy is to focus on this region and on the major Brazilian cities.


         C&CC Revenue Breakdown




          27%


                                                              Ranking Dec 03          Branch Network (includes Mini Branches)
                                  55%
         5%                                                   1 Bradesco                                    5,167

                                                              2 Itau                                        3,172
              12%
                                                              3 ABN AMRO                                    1,947
                                                              4 Santander*                                  1,909

Retail    Consumer Finance   Commercial Banking   Other       5 HSBC*                                       1,516
                                                              6 Unibanco                                    1,279

                                                              * June 2003 figures
                                                              Mini Branches: Branches in company premises



                                                          0                                                            20
    The growth of the retail loan book has
    been robust and relatively cycle proof
                 12.0               Consolidated Credit Portfolio
                                           (per business)
                 10.0

                   8.0
BRL billion




                   6.0

                   4.0

                   2.0

                   0.0
                               Dec-02                 Dec-03                Mar-04

                   Commercial and Wholsale               Consumer Finance             Retail


                                                                                 Growth 1Q04/1Q03                 w/ Sudameris       w/o Sudameris

                                                                                         Retail                       +97%                  +31%

                                                                                 Consumer Finance                      +5%                  Stable
                                                                           Commercial and Wholesale                   +61%                  -5%

              All data in the overview section are in Brazilian GAAP, in BRL and include all businesses of ABN AMRO Brazil - WCS and C&CC


                                                                            0                                                                  21
This performance is due to above
average acquisition of wealthy clients
Market Structure - Bankarized Individuals

                  4%
            13%




                       83%                                         13%                             16%
                                                     951
                                                                   24%
                                                                                                   30%


                                          562


                                                                   62%
                        284                                                                        54%

      100

                                                                   2002                            2003
     Classic           Special           Premium     SMEs
                                                                          Classico   Especial    Premium
               Average Account Revenue
                         (per segment)                          ABN AMRO Individual Clients Acquisition
                                                                                 (per segment)
      Index: Average Revenue Classic Account = 100


                                                            0                                              22
Table of Contents

Current Brazilian Business Environment
Overview of ABN AMRO Brazil
Overview C&CC Brazil
Financial Performance
Sustainability
Outlook 2004 / 2005
Appendices




                           0             23
Since the acquisition of Banco Real the
client base increased by nearly 50%
   Besides the strong organic
   growth, Sudameris acquisition
   has accelerated the process
                                                                8.3

                                                       7.1
                                                6.8
                                    6.2
                           5.6
        million clients




                          Dec-99   Dec-00   Dec-01    Dec-02   Dec-03




                                            0                           24
The desired critical mass has been
reached with the Sudameris deal
ABN AMRO is the 4th largest privately owned Brazilian bank by total loans and assets, and
3rd by deposits


    Top Privately Owned Banks
    Figures in Brazilian GAAP

                                                 Loans                      Assets                 Deposits
                                              in BRL billion               in BRL billion          in BRL billion
                                        Dec. 03           Mar 04       Dec. 033       Mar 04   Dec. 033       Mar 04

   1 Bradesco                             54.3             54.9         176.1         161.0      58.0          59.2

   2 Itau                                 38.7             38.9         118.7         127.0      36.7          34.6

   3 Unibanco                             27.9             27.3          69.9          71.5      25.4          27.4

   4 ABN AMRO                             27.2             27.3          55.4          55.6      26.7          26.1
   5 Santander                            16.3              NA           58.9           NA      18.00           NA




All figures based on Brazilian GAAP as published by each institution



                                                                  0                                                   25
Sudameris added more scale in
wealthy retail clients and SMEs
Financial assets
are concentrated
                                                                               Individual Clients - Mix
in a small                                                                               Jan 2004
percentage of the
population. The
wealthiest 2%                                                                        18%
hold almost half
of net financial                                                                                    50%
                                 Client Base
assets.                            Jan 2004                                        32%

                                       7%                        10%

            28%                       15%
                                                        22%              26%
                                                                 16%

                        51%
                                      29%
           23%                                                   29%



           27%
                                      49%                        46%

           21%


          Sudameris                   AAR                        Total

                      Classico   Especial     Premium     SMEs



                                                  0                                                   26
Our retail growth strategy consists
in providing differentiated services




                0                  27
Our retail model is relationship driven

                                                             Sole Proprietors
                                                                                       PJ (up to R$20m)
                                                            PJ (up to R$100k)

   Focus:                                                       Selected Payroll to all Segments
   1. Tailoring offers to needs and
      potential of all segments
   2. Strengthening customer
      relationships                                                                                          Premium
   3. Managing „migration‟ from



                                      University Students
                                                                                                          Premium     Van Gogh
      segment to segment over                                                                           R$4001–8000   R$8001+
      client‟s lifetime
   4. Growth in Especial and PJ                                                        Especial
   5. Efficiency in Classico                                                       Lower         Upper
   6. “Aspiration” in Premium                                                   R$1201–2000   R$2001-4000


                                                                Clássico                Near-term growth
                                                                                            potential

                                                             Lower      Upper
                                                            R$0–700   R$701-1200




                                      0                                                                               28
          Relationship’s costs and revenues
          have to be calibrated
                Individuals Market Structure1,2                                                            Segment Descriptions3
      Individuals (m)            Financial Assets (R$m)                                                    Demographic                   Banking Needs
        90                                        200                                Classico      Monthly income of                Credit for consumption
                    2%
        80          6%                                                               (Low-income)   R$0-1.2k                         Credit for daily expenses
        70                                                    Premium
                                     45%          150                                              Individuals with                 Savings/transactional product
                   40%                                        (Affluent)
        60                                                                                          restricted financial
        50                                                    Especial                              access; low potential
                                                  100
        40                                                    (Mass Affluent)                       social mobility
                                     29%
        30
        20         53%                            50          Classico                                  Monthly income of           Credit for asset building
                                     26%                      (Low-Income)           Especial            R$1.2-4.0k                  Credit for consumption
        10
                                                                                     (Mass              Middle-class and            Credit for daily expenses
         0                                        0           Unbankarized           Affluent)           mass affluent               Savings/transactional product
                Individuals    Financial Assets


                         SME Market Structure                                        Premium            Monthly income of         Investment to generate
                                                                                     (Affluent)          >R$4k                      and maintain value
                        No. of                                    Annual
                                                                                                        High social class,        Investment for consumption
                     Companies (m)           % of Total        Revenue (R$m)
                                                                                                         mature, and wealthy       Reserve for extra spending
SME 3                       0.1                  2.3%               5.0 - 20.0                                                     Health protection
SME 2                       0.3                  7.0%                0.5 - 5.0
SME 1                       1.5                 34.9%                    < 0.5          Lower PJ           Annual revenue of         Short-term credit products
(With at least one                                                                      (Small SME)         <R$0.5m                   Some use of transaction
employee)                                                                                                  Small, informal             products (supplier payment)
SME 1                       0.2                  4.7%                    < 0.5                              companies or one-         Similar financial needs
(Sole Proprietorship)                                                                                       person proprietorships of Individual
Unbankarized                2.2                 51.2%                    < 0.5
1. Deposits + Investments - Credit Outstanding = Net Financial Assets; 2. Booz Allen & Hamilton Estimates. MfV Analysis; 3. Banco Real Segments -
market segment definitions differ slightly



                                                                                0                                                                        29
             Our service offer calibrated to our
             clients needs
                                      From                                                           To
Classico           “Better than market” product and service offer        “In-line with market” product and service offer
(Low Income)        Broad range of products including                    Limited product range; debit card, instalment credit, and
                     multifunction cards, check books, etc.                savings account (w/ limited additions for Upper/ University)
                   Full branch and channel access served by              Direct channels with Greeters; access to staffed Call
                     assistants and managers                               Center for questions; and informative communication

Especial           Core product vehicles include Realmaster,             Proactive relationship managers with a higher manager to
(Mass Affluent)     RealParcelado, and credit cards                        client ratio and trained managers, assistants and greeters
                   Full branch access served by managers                 Proactive and frequent offer in every direct channel,
                   Full channel access                                    branches and direct mailing
                                                                          Delivery by ATM‟s, Call Center, Internet, Banco24Horas,
                                                                           checkbook and branches
                                                                          Debit cards as a foundation of the offer

Premium/           “Lower than market” product and service offer         “In-line with market” product and service offer
Van Gogh           Core product vehicles include Realmaster and          Training, developing and hiring managers observing a new,
(Affluent)          RealParcelado                                          higher manager to clients ratio
                   Full branch access served by managers                 Branch rebuilding or remodelling to deliver select number
                   Full channel access                                    of “Van Gogh” and “Premium” Branches
                                                                          Specialised managers with clear responsibility and
                                                                           accountability; specialised Call Center support

PJ                   No explicit segmentation                            Explicit segmentation and focus on high potential clients
(SME)
                     Package discounts by investment level                (R$100k + turnover)
                     Exclusive area in branch served by managers         Automated credit tools and proactive direct channel
                                                                           availability (lower PJ)
               These changes:         1) Bring products and services in-line with customer expectations and market
                                      2) Strengthen relationship management capabilities


                                                                     0                                                                 30
Credit cards is a key product for the
mass affluent
ABN AMRO (including Sudameris) has a market share of 6.5% of the credit card
transaction volume and 4% of the cards in force, therefore has a higher than average
utilisation ratio and a solid base for growth



                                    # of Cards                                                Transaction Volume
                                                    Credicard                                 Other
                                                                                                              Credicard
                       Other                           16.1%                                  15.4%
                                                                                                                 19.0%
                      21.9%

                                                                                    HSBC
                                                                                    3.6%


                                                                Bco. Brasil   ABN AMRO
               HSBC                                                12.9%      6.7%
               3.7%
                                                                                                                          Bco. Brasil
           ABN AMRO                                                            Santander
                                                                                                                             16.9%
           4.0%                                                                4.2%

              Santander
                                                                                    Unicard
              5.9%                                                                  7.9%
                                                             Itau
                                                           12.9%
                          Unicard                                                                            Itau
                          10.2%                                                                Bradesco      12.6%
                                         Bradesco                                              13.7%
                                            12.4%




Source: ABECS, Mastercard, Visa market research


                                                                    0                                                               31
  Credit cards have a significant growth
  potential
          ...and a solid base for growth



                                      # Credit Cards                                                                      Transaction Volume
          2.50                                                                                             600




                                                                                             BRL million
          2.00
million




                                                                                                           550


          1.50




          1.00                                                                                             500
                 Jan-03   Mar-03   May-03   Jul-03   Sep-03   Nov-03   Jan-04   Mar-04                           Mar-03   Jun-03   Dec-03      Mar-04




          All data in the overview section are in Brazilian GAAP, in BRL and include all businesses of ABN AMRO Brazil - WCS and C&CC



                                                                                         0                                                       32
Debit cards enable to generate
volumes with our retail client base
 Brazil
 Debit cards have grown
 faster than other
 electronic payment                                                     # Debit Cards
 methods, largely due to              5.8
 low income
 bankarization. 2003
 transaction volume was
                                      5.5                                                                              5.5
 up 59%

 ABN AMRO
                            million




                                      5.3
 Debit card business grew
 63% in 2003, exceeding
 the debit market growth
 ratio, reducing check                5.0
 processing costs
                                                4.8
                                      4.8
                                            Jan-03    Mar-03   May-03    Jul-03   Sep-03   Nov-03   Jan-04   Mar-04



Source: Visane, ABN AMRO


                                                        0                                                             33
We have created a true multi-channel
platform to best serve our clients

 Direct Channels include: call center, Internet, ATMs

  Direct Channels/ Total Transactions
    74% in 1Q04                  (up from 50% in 1998)

  Branch Transactions/ Total Transactions
    21% in 1Q04                  (down from 23% in 4Q01)

  Direct Channel Availability
    99% in 1Q04                  (up from 97% in 4Q01)

  Internet Users
    Individuals 34% in 1Q04      (up from 17% in 4Q01)
    Corporates 79%in 1Q04        (up from 17% in 4Q01)




                                 0                         34
Distribution and differentiation have
become key competitive advantages
                                                 Created in 2002 by the Financial
                                                 Executives Magazine, e-finance
                                                 award is intended recognize the most
                                                 prominent financial institutions in the
                                                 implementation of infra-structure
                                                 solutions, IT and telecom applications


2003 categories: Internet Banking, Business Platform, Outsourcing Strategy,
                 Branch BackOffice Solutions
2004 categories: Retail Internet Banking, New Call Center Technologies,
                 Mobile Mini Branch

   Reliability

   Transparency                       Driver of client satisfaction for mass
                                       affluent and client profitability for low income
   Accessability




                                      0                                                    35
Our strategy and employees have
created a valuable brand
           Ranking                          “MOST VALUABLE BRAZILIAN BRANDS”




Source: Interbrand - Dinheiro Publication



                                                   0                           36
Table of Contents

Current Brazilian Business Environment
Overview of ABN AMRO Brazil
Overview C&CC Brazil
Financial Performance
Sustainability
Outlook 2004 / 2005
Appendices




                           0             37
        The current performance is impacted
        by the integration of Sudameris

Figures in Dutch GAAP

in BRL million                             1Q2003                 4Q2003*      1Q2004    1Q04/ 1Q03   1Q04/ 4Q03
Revenues                                     1,284                  1,562      1,654       28.8%        5.9%
Expenses                                     (814)                 (1,115)     (1,129)     38.7%        1.3%
Operating Profit                              469                     447       525        11.9%        17.5%
Provisions                                   (149)                   (222)      (237)      59.1%        6.8%
Oper. Profit before Taxes                     320                     225       288        -10%          28%
Taxes                                         (88)                        20    (49)
Cayman Effects                                 57                         11     (7)
Net Profit                                    172                     204       198        15.1%
Efficiency Ratio                             61.7%                  69.5%      66.7%




        All data in this slide are in Dutch GAAP in BRL for C&CC Brazil


                                                                           0                               38
Spreads are declining but volumes
are growing
                                           Though spreads have declined, volumes have sustained solid growth and are
                                           expected to grow further
                                                                         Relative Spreads                                                                                                                                         Assets

                                           1.20                                                                                                                                       20,000
3-Quarter Moving Average, Q1 2001 = 1.00




                                           1.10
                                                                                                                                                                                      15,000
                                           1.00




                                                                                                                                                                         R$ million
                                           0.90                                                                                                                                       10,000

                                           0.80

                                                                                                                                                                                      5,000
                                           0.70


                                           0.60
                                                                                                                                 2004 Q1E

                                                                                                                                            Q2E
                                                                                                                                                  Q3E

                                                                                                                                                        Q4E
                                                     2001 Q1




                                                                              2002 Q1




                                                                                                        2003 Q1
                                                               Q2

                                                                    Q3
                                                                         Q4


                                                                                        Q2

                                                                                              Q3
                                                                                                   Q4


                                                                                                                  Q2
                                                                                                                       Q3

                                                                                                                            Q4




                                                                                                                                                              2005 AVG




                                                                                                                                                                                          0




                                                                                                                                                                                                                                                                                     Q2E

                                                                                                                                                                                                                                                                                           Q3E

                                                                                                                                                                                                                                                                                                 Q4E
                                                                                                                                                                                                                                                                          2004 Q1E
                                                                                                                                                                                                         Q2

                                                                                                                                                                                                              Q3

                                                                                                                                                                                                                   Q4



                                                                                                                                                                                                                                  Q2

                                                                                                                                                                                                                                       Q3

                                                                                                                                                                                                                                            Q4



                                                                                                                                                                                                                                                           Q2

                                                                                                                                                                                                                                                                Q3

                                                                                                                                                                                                                                                                     Q4
                                                                                                                                                                                               2001 Q1




                                                                                                                                                                                                                        2002 Q1




                                                                                                                                                                                                                                                 2003 Q1




                                                                                                                                                                                                                                                                                                       2005 AVG
                                                  Personal Loans                             Auto Loans                              Mortgages

                                                  Cards                                      Overdrafts                              Loan Products                                                                 Overdrafts                                   Personal Loans
                                                                                                                                                                                                                   Auto Loans                                   Other Products - PJ

                                                                                                                                                              0                                                                                                                                  39
The integration is going smoothly and
delivers the expected synergies
 Integration plans are
  being executed by 18
  Integration Fronts (8
  already completed)
 Integration process is
  on track with BRL120.7
  mio synergies captured
  as of Mar 2003                                                      Total Synergies Captured
                                                                                           BRL million
  (annualised cost
  reduction)
     53%of annualised
    cost reduction is
                                                                                                                                                       $300.0
    related to FTE                                                                                                         Planned
    reduction and the
    balance related to                         Actual                           $120.7
                                                                      $83.6
    other expenses                             $37.4     $45.0
                           $0.0      $14.1
                                      Nov-03




                                                                                                Jun-04




                                                                                                                                     Jun-05
                                                             Jan-04


                                                                       Fev-04
                            Oct-03




                                                                                  Mar-04




                                                                                                                            Mar-05
                                                Dec-03




                                                                                                         Sep-04


                                                                                                                  Dec-04




                                                                                                                                              Sep-05


                                                                                                                                                         Dec-05
                                                         0                                                                                             40
Sudameris Acquisition & Integration
   ABN AMRO acquired 94.57% of Banco Sudameris Brasil S.A. in a R$ 2.2 billion
    transaction: R$ 527 million cash and balance through share exchange for ABN
    AMRO Real shares (11.58%)

   Estimated synergies: R$ 300 mln p.a. starting in 2005

   Global integration plan designed June 2003 along with due diligence

   Creation of 18 working fronts, of which 8 have fully executed, 6 depend on other
    migrations (e.g. IT) and 4 are currently detailing migration.

      Fronts already integrated: Audit, Asset Management, Private, Compliance,
        Legal, Treasury, Insurance and Consumer Finance

   Implementation started as of closing in December 2003

   ABN AMRO is ahead of schedule regarding implementation, capturing synergies
    both in the scope of revenues, personnel and administrative expenses



                                        0                                          41
Sudameris Acquisition & Integration

   In October 2003 a career orientation program was created to support personnel
    reallocation

   A „Best Practice‟ approach is being followed, e.g. for FX and Trade Finance
    Sudameris‟ integrated operational model will be adopted

   Complementary businesses will be maintained, e.g. Sudameris retail driven equity
    brokerage is already fully operational under ABN AMRO

   The two banks/operations shall be fully integrated by year end 2004




                                       0                                          42
Client led growth will continue to
produce quality earnings
 In a scenario of declining interest rates ABN AMRO has pursued to build on its loan
 portfolio, expanding client relationship and capturing cross-selling opportunities


                                                Loans / Total Assets Ratio

                             49.1% 49.1%
                     47.0%                                                                          46.4%
                44.2%

                                              40.4%                                                             39.9%
                                                                                                                        38.2%
                                                                           36.4%
                                                      35.6%                                                 35.5%
                                                                 34.1%             34.6%
                                                                                        32.6%
                                                          30.8%                             30.6%




                        ABN AMRO                      Bradesco                       Itau                    Unibanco

                                                Dec-01        Dec-02     Dec-03    Mar-04
All figures based on Brazilian GAAP as published by each institution



                                                                  0                                                             43
Growth will be value creative as a
result of sound credit policies
The expansion of the lending business was implemented with no prejudice to asset
quality; performance of the the loan portfolio is fully within market standards.



                                         Non-performing Loans >90 days

              5.0%

              4.5%

              4.0%

              3.5%

              3.0%

              2.5%
                     Mar-02   Jun-02   Sep-02   Dec-02    Mar-03    Jun-03    Sep-03   Dec-03   Mar-04

                                                 Market            ABN AMRO




Source: Brazilian Central Bank



                                                           0                                             44
Table of Contents

Current Brazilian Business Environment
Overview of ABN AMRO Brazil
Overview C&CC Brazil
Financial Performance
Sustainability
Outlook 2004/ 2005
Appendices




                           0             45
   The Dynamics of Sustainability
                                                          Governo
   ABN AMRO has a leading role in creating and delivering sustainable value

                                                     Government
                                    Client
     Employees

                   Society

                                                                   ABN AMRO

                Labor Union                  Shareholders


                                                                  Media
Community                                    Suppliers

                      Environment



                                     0                                        46
Key Initiatives for Sustainability
 Core Business Linked Initiatives
  New financing products directed to social and environmental projects
  Assessment of the social and environmental risk of ABN AMRO clients
  MicroCredit - Credit offering to population traditionally excluded by the financial sector
  Ethical Investment Fund investing in socially and environmentally responsible enterprises


 Management Initiatives
  Eco-efficiency / environmental management (e.g. recycling)
  Staff Diversity initiatives
  Supply Chain
            Engagement and mobilization of suppliers
            Social and environmental criteria as a key factor in the choice of supply chain partners
  Bi-annual publication of Brazilian Sustainability Report


 Social Initiatives
  70% of our financial donations are destined to public education and the remaining 30% to initiatives in
   income generation, environment and diversity
  Wherever possible, we encourage our employees to be engaged in our social action initiatives



                                                 0                                                      47
Table of Contents

Current Brazilian Business Environment
Overview of ABN AMRO Brazil
Overview C&CC Brazil
Financial Performance
Sustainability
Outlook 2004/ 2005
Appendices




                           0             48
Outlook 2004 / 2005
• Inflation under control
 (IPCA forecast 6.8% 2004; 4.5% 2005)
 Revised from 6.0% 2004; 5.1% 2005


• Pick-up of economic growth
 (GDP forecast 3.7% 2004; 3.6% 2005)

• Lower foreign exchange volatility
 (BRL/USD forecast 3.05 eop 2004; 3.25 eop 2005)
 maintained


• Lower interest rates
 (Selic forecast 14.5% eop 2004; 12.0% eop 2005)
 Revised from 13.5% eop 2004; maintained for 2005


• Growing credit portfolio, offsetting lower margins and maintaining
standards of credit quality
 (credit portfolio growth forecast for 2004 in the range of 20%)


                                              0                        49
Thank You



    0       50
Table of Contents

Current Brazilian Business Environment
Overview of ABN AMRO Brazil
Overview C&CC Brazil
Financial Performance
Sustainability
Outlook 2004 / 2005
Appendices




                           0             51
 Sovereign Spread
 Economic Environment


 Low international interest rates have pushed investors towards higher yield instruments. In
 this environment Brazil sovereign spread has been driven to historically low levels, at 500-
 700 bps over Treasuries
                 4.50                                                                                                                                            3000

                 4.00                                                                                                                                            2500

                 3.50
                                                                                                                                                                 2000




                                                                                                                                                                        EMBI Brazil
                 3.00
           BRL




                                                                                                                                                                 1500
                 2.50
                                                                                                                                                                 1000
                 2.00

                 1.50                                                                                                                                            500


                 1.00                                                                                                                                            0
                                 Mar-02




                                                                                       Mar-03




                                                                                                                                               Mar-04
                        Jan-02




                                          May-02

                                                   Jul-02




                                                                              Jan-03




                                                                                                May-03
                                                                     Nov-02




                                                                                                           Jul-03




                                                                                                                                      Jan-04




                                                                                                                                                        May-04
                                                                                                                             Nov-03
                                                            Sep-02




                                                                                                                    Sep-03
                                                                      BRL / USD                          EMBI Brazil (bps)
Sources: Brazilian Central Bank, Bloomberg



                                                                                       0                                                                                              52
 External Private Debt Rollover Rate
 Economic Environment


 After a sluggish performance in 2002 external private debt* rollover picked up reflecting the
 renewed appetite for Brazil. The 2004 drop is a consequence of awaiting definitions with
 regards to international interest rates.
                                                                                                                                                                            133%

                               run-up to 2002 presidential elections

                                                                                                             98%                                               102%
                                                                                                                                   94%
                                                                                                                        89%
                                                                                                                                                                              90%

                                                                                                                          81%                                74%
                       67%     63%
                                                                                              60%                                             66%
                                       58%                                                                         57%
                                                                           48%                                                                                                          55%
                                                             45%                                                                                51%
                                                  41%                                                                                                                         52%
                                                              43% 40%
                                       36%
                                                  30%                                   29%              26%
                             28%                                               25%
                                                                            Nov-02




                                                                                                                                                    Nov-03
                    Jan-02




                                                                                     Jan-03




                                                                                                                                                                   Jan-04
                                                    Jul-02




                                                                                                                          Jul-03
                                                               Sep-02




                                                                                                                                     Sep-03
                              Mar-02


                                         May-02




                                                                                                    Mar-03


                                                                                                               May-03




                                                                                                                                                                               Mar-04
                                                                        External Private Debt* Rollover Rate
( * ) External private debt defined Bonds, Notes, Commercial Papers, Direct Loans and Commercial Credit
Sources: Brazilian Central Bank, ABN AMRO


                                                                                          0                                                                                                   53
Business Environment
Economic Environment


            % Public Debt / Exports

   3.96%
                  3.45%
                                  2.79%    2.74%
                                                          2.07%




    1999           2000            2001    2002           2003


                                                                             % Exports/ GDP                          15.7%
                                                                                                             14.8%           14.5%
                                                                                                     13.3%
                                                                                             11.4%

                                                   8.4%                          8.9% 9.2%

                                                           6.6% 6.1% 6.6% 6.5%




                                                   1994 1995 1996 1997 1998 1999      2000 2001 2002 2003 2004* 2005*
Source: Brazilian Central Bank, ABN AMRO



                                                                  0                                                          54
Asset Management
Overview


                  as of Mar 2004
                                                             in BRL billion
                  Asset Managers       Mutual Funds   Market Share
                                           AUM
ABN AMRO
                  1 Banco do Brasil        111.2                 20.8%
ranks 3rd among
privately owned   2 Bradesco                75.2                 14.1%
retail driven     3 Itaú                    74.6                 13.8%
asset manager
                  4 CEF                     27.1                   5.0%
                  5 Citibank                26.6                   4.9%
                  6 ABN AMRO                25.1                   4.7%

                  7 HSBC                    24.5                   4.6%
                  8 Santander               23.6                   4.4%
                  9 Unibanco                23.0                   4.3%
                  10 BankBoston             21.9                   4.2%
                  Other                    103.0                 19.2%
                  TOTAL                    535.8                  100%

Source: ANBID


                                   0                                     55
              Credit Portfolio ABN Amro and Sudameris
              Overview


                       Consolidated Credit Portfolio
                                        26,287             26,337
BRL million




                    16,560




                    Dec-02              Dec-03              Mar-04



                                                                     Credit to the Private Sector *              ABN AMRO BRAZIL

                                                                            EOP Balance               Growth
                                                            Period                                                       Growth
                                                                               in BRL billion         nominal
                                                            2002                   365                +13%                +15%
                                                            2003                   395                 +8%                +59%

                                                            1Q04                   408                +1.5%               +0.2%
                                                           Source: Brazilian Central Bank, ABN AMRO

              All data in the overview section are in Brazilian GAAP, in BRL and include all businesses of ABN AMRO Brazil - WCS and C&CC



                                                                             0                                                              56
Consumer Finance
Overview

ABN AMRO consumer finance division is Brazil‟s largest car financier through its Aymoré
brand, driven by strong customer service. Main competitors are aggressively reducing
margins in order to obtain additional market share.

                             Car Financing Market Share
         100%

                   15.8%                                    18.0%
                                        22.2%


                   15.8%                                    16.4%
                                        14.2%                              ABN AMRO
                                                                           Bradesco
                   17.1%                                    11.7%
                                        11.2%                              Itau

                   4.5%                                                    Votorantim
                                         8.9%               10.4%
                   4.4%                                                    Santander
                                         5.3%               7.1%           Other



                   42.4%
                                        38.2%               36.5%




Source: DETRAN     2001                  2002                2003


                                        0                                               57
WEB Motors
Overview




  WebMotors has
   85% share of the
   views in the
   internet auto
   segment

  4% of internet       WebMotors Audience
   visits search for    Category               #
   information on the
   auto segment         Unique users / day     70 thousand
                        Unique users / month      2 million
                        Page views / month      28 million
Source: IBOPERating
                        Banner views / month    48 million
                        Source: ABN AMRO




                                   0                          58
Mortgage
Overview

 Historically 75% of assets are acquired through the branch network. Intermediaries such
 as developers and real estate brokers provide a growth platform. The Brazilian mortgage
 market may benefit from the new law (currently under approval) regarding statutory lien.

                    Mortgage Balance                                                        2003 Market Share
                                               in BRL million

                             1,164                  1,173                                                  Bradesco
                                                                                          Itau
                                                                                                               15%
                                                                                         15%


                               451                    448                                                             Santander
                                                                                                                            6%

                                                                                                                       ABN AMRO
                                                                                                                                4%
                                                                                                                        Nossa Caixa
                                                                                                                                 4%
                                                                                                                       Unibanco
                                                                                                                             3%
                                                                                                                      HSBC
                               713                    725                                                               2%
         631
                                                                                                                     Bank Boston
                                                                                                               Other         1%
                                                                                      CEF                        5%
                                                                                      45%


        2002                  2003                  Mar-04

                       ABN AMRO Real      Sudameris                                                                     Source: ABECIP

All data in the overview section are in Brazilian GAAP, in BRL and include all businesses of ABN AMRO Brazil - WCS and C&CC


                                                                0                                                                     59
Awards


                                             Created in 1998 by Exame magazine
                                             the guide to identify the best
                                             companies in People Management
         Awards
Ranked among “100 Best Workplaces” in 2002 and 2003
Ranked among “100 Best Workplaces for Women” in 2003




                                   0                                             60
Cautionary Statement regarding Forward-Looking Statements

This announcement contains forward-looking statements. Forward-looking statements are
statements that are not historical facts, including statements about our beliefs and expectations.
Any statement in this announcement that expresses or implies our intentions, beliefs,
expectations or predictions (and the assumptions underlying them) is a forward-looking
statement. These statements are based on plans, estimates and projections, as they are currently
available to the management of ABN AMRO. Forward-looking statements therefore speak only as
of the date they are made, and we take no obligation to update publicly any of them in light of
new information or future events.

Forward-looking statements involve inherent risks and uncertainties. A number of important
factors could therefore cause actual future results to differ materially from those expressed or
implied in any forward-looking statement. Such factors include, without limitation, the conditions in
the financial markets in Europe, the United States, Brazil and elsewhere from which we derive a
substantial portion of our trading revenues; potential defaults of borrowers or trading
counterparties; the implementation of our restructuring including the envisaged reduction in
headcount; the reliability of our risk management policies, procedures and methods; and other
risks referenced in our filings with the U.S. Securities and Exchange Commission. For more
information on these and other factors, please refer to our Annual Report on Form 20-F filed with
the U.S. Securities and Exchange Commission and to any subsequent reports furnished or filed
by us with the U.S. Securities and Exchange Commission.

The forward-looking statements contained in this announcement are made as of the date hereof,
and the companies assume no obligation to update any of the forward-looking statements
contained in this announcement.




                                                                   0                                    61

				
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