Unibanco Uniao (UBB)

Established in 1924, Unibanco - Uniao de Bancos Brasileiros S.A. (UBB) is Brazil's fourth largest private bank, with total assets of R$150 billion (US$84 billion) at December 31, 2007. The bank offers a diverse array of products and services, including credit cards, commercial lending, investment banking, cash management, brokerage, mergers and acquisitions advisory, and mutual funds. Unibanco organizes its activities into four business segments: Retail Banking, Wholesale Banking, Insurance and Private Pension Plans, and Wealth Management.

Retail Banking not only serves individuals under the Unibanco brand name, but also provides consumer finance products and services under the Fininvest, PontoCred, and LuizaCred brands. It also serves small and lower-middle market companies. UBB is a major player in credit cards with a 15% market share, offering credit cards through Unicard, Fininvest, and HiperCard. The bank's 33% interest in Credicard, as well as its stake in Orbitall Services, was sold for R$1.7 billion in late December 2004.

The Wholesale Banking segment serves approximately 2,800 medium and large companies in addition to about 400 institutional investors. In this business, UBB is among the industry leaders in BNDES onlendings1, trade finance, and cash management services. This segment also holds an outstanding position in debt capital markets, mergers and acquisitions (M&A), advisory services, and project finance in Brazil.

The bank's Insurance business, carried out through Unibanco AIG Seguros S.A. (or UASEG, a joint venture between UBB and American International Group), provides life, auto, health, property, and casualty insurance coverage, as well as pension and retirement plans to individuals and corporate clients.

The Wealth Management division coordinates the activities of Unibanco Asset Management (UAM) and Unibanco Private Bank. It offers both fixed income and equity-based mutual funds manages portfolios for corporates, institutions, and affluent individuals and provides a variety of financial and non-financial services to its clients.

Approximately 70% of net revenue (total revenue less interest expense) in 2007 was generated from net interest income, and the balance was primarily from fees (25%) and insurance, pensions, and annuities (5%). Unibanco's long-term credit ratings are Baa3 by Moody s, BBB- by Standard & Poor's, and BBB- by Fitch.

On November 3, 2008, UBB announced a merger with Banco Itau Holding Financeira S.A. (or Itau), creating the largest bank in Brazil with R$575 billion in assets, 4,800 branches, and a 19% share of the Brazilian loan market. Based on the established exchanges ratios (as shown in the table following), the valuation attributed for Unibanco in the transaction is R$29.4 billion, corresponding to 2.3 times its book value. The transaction, expected to be completed in first half 2009, should be immediately accretive to earnings. The new company will be named Ita Unibanco Holding S.A. The BIS ratio, pro forma for the operation, will equal approximately 15.1%. Moreira Salles, whose father founded Unibanco more than 80 years ago, will be chairman of the new group Itau's Setubal will be CEO. The group's board will have 14 members, eight of them independent and six named by Itau and Unibanco.

Source: Unibanco

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