The merger of Itaú and Unibanco in 2008 created a milestone in the history of Brazil’s financial services industry.
We have created a new and unprecedented institution which is the largest bank in the southern hemisphere, possessing the numbers and size for us to conduct business on a far greater scale than the sum of our parts.
The new bank was born with 108,000 employees, R$632.7 billion in assets, a R$271.9 billion credit portfolio, R$272.2 billion in deposits and commercial banking operations in every Mercosul country.
The merger gives us, above all, gains in scale, which is a key variable for the success of our business.
It is exactly this range of possibilities that makes our project so massive and challenging. We intend to build the southern hemisphere’s best bank, not its largest. We look toward a modern, strong, competitive, agile, open and transparent organization, with significant rates of growth and return, where people enjoy working in teams.
To fulfill this aspiration, our similar operating structures, equal perception of the market and, more importantly, converging cultures and values, are factors that will clearly enable us to increase our ability to generate business, offer credit and contribute to the growth of the economy, in addition to becoming more competitive for our international expansion.
We have the opportunity to change and, in particular, to evolve. The integration process is enabling us to adopt a more open stance regarding our differences and assess how much we can learn from each other. We have already seen numerous examples of Itaú and Unibanco employees sharing practices and identifying the best aspects of each bank, which underlines the value of the synergy between the teams. What is different about this merger process is its size. On the other hand, this reorganization is taking place during a period of slow economic growth, which is particularly favourable to us, as we will have to devote considerable energy to the integration process.
By the end of 2008 the Bank had prepared itself to face the challenges of these new times: our credit portfolios have suitable provisions and feature efficient analysis policies which are the result of measures taken since the beginning of the year; plus we have strengthened our control, risk and audit areas, as today’s economy requires the highest levels of accuracy and discipline in asset allocation.
Our business grew significantly in 2008. Itaú and Unibanco’s convergent focus on growing the commercial customer area brought excellent results, particularly in gaining new clients in the small and middle market company segment. We will continue investing to expand in these areas, despite current conditions, because Itaú Unibanco’s presence in this market does not yet match its overall presence in the economy.
In the credit cards segment Itaú Unibanco has a solid position in issuing and sales, reflecting growth by both institutions in this market in recent years, while vehicles, real estate credit and insurance are other key operations that are now combined.
For 2009 our focus will be on integrating our operations, which should take about two years. After this stage we will again intensify our international expansion, which should coincide with the recovery of the market. At the same time we will dedicate our efforts for our customers to benefit from the best that Itaú and Unibanco have to offer in terms of service quality and product competitiveness.
By combining its values and attitudes, Itaú Unibanco is strengthening its commitment to good corporate governance, respect for human rights, socio-environmental responsibility and ethical conduct. The market recognizes these efforts in different ways: Itaú and Unibanco were both part of the São Paulo Stock Exchange Corporate Sustainability Index (ISE) in 2008, while Itaú has been on the Dow Jones Sustainability Indexes of the New York Stock Exchange since 1999. The merger also increases the bank’s responsibility to lead the financial sector in promoting sustainable development through its services, processes, products and relationships.
We are living through a unique moment of major changes and repercussions in Brazil. We are also optimistic. We believe in the economy of the country, the strength and differentiated control mechanisms of our financial system, and the partnership we are forging. I wish to use this opportunity to reiterate my absolute conviction in the promising future we have ahead of us. Knowing the strength and skill of our teams, I have no doubt that the merger is only the first of many achievements that lie ahead for our organization. Now is the time for us to build this new and unparalleled bank.
Sincerely,
Roberto Setubal
President and CEO of Itaú Unibanco