| The financial margin before provision for loan losses, adjusted by the net impact
on investments abroad, was R$6,417 million in 2004, 6.6% higher than in the previous
year. The positive factors contributing to the margin increase were credit-portfolio
growth, the migration to a more profitable product portfolio and the 10.3% reduction
in provisions for non-performing loans. The net financial margin was 9%, up from
8.7% in 2003.
Investments abroad reached R$1.6 billion at the end of 2004 and R$2.4 billion
a year earlier. The reduction was due to a US$478 million dividend outlay during
2004.
Unibanco's securities portfolio reached R$16,024 million, 50% of them classified
as "trading securities", another 20% as "available for sale",
and 30% as "held to maturity".
Total fees, at R$3,241 million, rose by 14% over 2003. Banking fees income
and asset-management fees income increased 8.9% and 22.6% in 2004, respectively.
Credit card fee income rose by 34.1% from 2003, reaching R$841 million.
Personnel and administrative expenses totaled R$5,058 million for 2004, impacted
by the acquisitions and efficiency improvement actions, which include the shutdown
of Banco1.net operations and their integration to the retail unit; remodeling
in the bank's facilities abroad; and outsourcing of non-core activities.
Fees from services rendered over personnel and administrative expenses had
a positive evolution, reaching 64.1% in 2004.
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