Moody's Upgrades Itau's Rating
21 Marzo 2005 - 2:35PM
PR Newswire (US)
Moody's Upgrades Itau's Rating SAO PAULO, Brazil, March 21
/PRNewswire-FirstCall/ -- Moody's, a leading international rating
agency, has upgraded Banco Itau's (NYSE:ITU) (Bovespa: ITAU4)
financial strength rating from C- to C, with a stable outlook.
Moody's states that this upgrade reflects the Bank's consistently
strong financial performance. Of the 23 banks that operate in
Brazil and are evaluated by Moody's in this rating category, Itau
is the best classified, being the only one to receive a C rating.
Moody's explained that this performance is the result of
management's efforts to enhance the Bank's credit operations with
high-margin segments. It also reflects the consistent improvements
in the Bank's operating efficiency. According to Moody's, Itau's
efforts have focused on the expansion of bank services and credit
lines to small and mid-sized businesses as well as conservative
provisioning and loan-origination policies. Moody's also noted
Itau's solid and well-protected strategic position, with an
important market share and a diversified product mix -- advantages
that have been achieved through key acquisitions and organic
growth. This expansion has provided the Bank with an increasingly
important operating scale and has enhanced its access to stable and
low-cost sources of funding, thus generating a sustainable earnings
flow. "We are very pleased with this new rating classification from
Moody's exactly at a time when Itau is commemorating 60 years since
its foundation. The Bank's development over this period reflects a
policy based on sustainability and corporate social responsibility,
at the same time always creating value for our stockholders," says
Roberto Setubal, Itau's CEO. Moody's further noted a mix of less
volatile assets and an increase in financial margins, despite the
inherent volatility of the Brazilian economic scenario. No less
important to the Bank's performance has been the impact of
recurring earnings and the rigid control over operating expenses,
the rating agency declared. It added that such advantages have
contributed to profitability indicators considerably higher than
other Brazilian banks of a similar size and are consistent with the
C rating category. Itau's strategy has effectively cushioned the
Bank against the effects of volatility, a positive factor in terms
of rating classifications according to Moody's. The rating agency
has frequently drawn attention to Brazilian bank exposure to
government risk and the resulting limitations on financial
flexibility, particularly under stress scenarios. Itau's competent
management, its ability to ensure a high level of earnings, and its
conservative risk profile and strong financial fundamentals all
combine to protect it against credit losses and the volatility
inherent in the Brazilian economy. "Our values are solid and we
believe in Brazil's growth potential. For this reason, we shall
continue to invest strongly in the expansion of the business, in
the quality of service and in the responsibility in the way we
always use our financial products and services to the benefit of
society," says Setubal. Investor Relations Area Banco Itau Holding
Financeira S.A. DATASOURCE: Banco Itau Holding Financeira S.A.
CONTACT: Geraldo Soares, Banco Itau Holding Financeria, S.A.,
+011-55-11-5019-1549, or Web site: http://www.itau.com/
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