The consumer businesses encompass credit cards and consumer credit; their success story has secured the leadership in the segment for Unibanco. The group comprises Unicard, Hipercard, Fininvest, Redecard, in addition to joint ventures such as PontoCred (Ponto Frio), LuizaCred (Magazine Luiza) and a financing company with the Sonae group.

Credit Cards

Unicard
Unicard's net earnings reached R$126 million in 2004, with a return on average equity (ROAE) of 45.6%. Revenues, measured in terms of volume of purchases withdrawals, totaled R$6.8 billion, up 25.9% from 2003. Loan portfolio grew 21.4% over 2003, reaching R$1.7 billion. Unicard closed the year with 4.8 million credit cards, 9.5% above the previous year.

Hipercard
In March 2004, Unibanco acquired, through its subsidiaries, Hipercard Administradora de Cartão de Crédito S.A. from the Netherlands-based group Ahold, for R$630 million. At the same time, Ahold sold its supermarket chain Bompreço to Wal-Mart.

Hipercard was created in 1982 to provide private label credit card services to the Bompreço customers, and now also serves a network of about 70,000 accredited retailers in northeastern Brazil. Its operations ran the full range: client acquisition, credit card issuance and processing. Hipercard is now the choice means of payment at Bompreço's 120 stores, and market leader in the region.

From its acquisition, in March, to the year-end, Hipercard contributed R$108 million earnings to Unibanco's consolidated results. In December, Hipercard had 2.7 million credit cards and a loan portfolio of R$1.1 billion.

Credicard Divestiture
On November 8, Unibanco, Citibank and Itaú announced a shareholders restructuring of the Credicard Group, completed in December. Unibanco sold its stake to Itaú and Citibank, each now owning 50% of Credicard. Citibank and Unibanco sold both their stakes in Orbitall to Itaú. There was no change for Redecard. The deal yielded R$1.4 billion in pre-tax non-operating income for Unibanco; the majority of this non-recurring income was used to settle goodwill balances and reinforce provisions for non-performing loans.

Consumer Finance Companies

Fininvest
Fininvest owns 253 stores in 120 cities, in addition to more than 11,000 points-of-sale and a R$1.6 billion loan portfolio. The company has a strong presence in the consumer finance market, operating 9.9 million credits cards under its own flag and private label cards.

The company in 2004 contributed with R$197 million equity income, a 23.9% increase from the previous year, and posted a 40.7% return on average net equity. A brand recognition survey conducted in December 2004 elected Fininvest the Top of Mind in its segment, with a 53% score on awareness.

LuizaCred
LuizaCred is a joint-venture between Fininvest and Magazine Luiza department store chain. In 2004 the company posted earnings of R$24 million, with a 47.7% return on average equity. Revenues for the year totaled R$807 million, up 48.9% from 2003, LuizaCred had 1.4 million clients at year-end, and R$469 million in loan operations, a 47% increase over 2003. In addition to a presence in all 250 Magazine Luiza stores, LuizaCred sells financing products through Lojas Arno's 48 stores, recently acquired by Magazine Luiza.

PontoCred
A joint-venture with Globex (controlling partner of home appliance store chain Ponto Frio, Brazil's leader in the segment), PontoCred has 3.6 million clients and operates in the chain's 339 stores. Besides financing PontoFrio customers, PontoCred offers financial and logistical support to small retailers. The company earned R$51 million in 2004, 37.8% more than in the previous year, and posted a 31.9% return on average equity. At the end of the year, PontoCred's loan portfolio totaled R$917 million, growing 27.9% over 2003.

Sonae
Unibanco and Grupo Sonae in August 2004 formed a joint-venture to offer financial services to the customers of the supermarket chain. Sonae owns 47 hypermarkets, 91 supermarkets and 11 wholesale distributors in Brazil's south-southeast regions.

Microcredit
Unibanco operates in this segment through Microinvest, a pioneer in the offer of financing to low-income entrepreneurs. Created in October 2003 through a joint-venture between Unibanco (82%) and the International Finance Corporation (IFC, 18%), Microinvest has since funded over 1,800 credit operations, for R$3.7 million.