Outlook for 2008
The year 2007 was excellent for Brazil's economy and for
Unibanco. Activity growth and credit expansion anchored
a positive period, despite the housing crisis that affected parts of the market in the second semester. Domestic interest rates plunged to historic lows, while macroeconomic fundamentals continued to improve across the board.
The US housing crisis turned into an international credit crisis with dire consequences on international banks and that continues to worry markets in 2008 - volatility has been even greater than in 2007. Moreover, there are global inflation pressures at work, prompted by persistent rises in energy and food prices, and in response, the main economies are starting to raise interest rates; the latter conditions are reflected in Brazil's economic scenario. Brazil's Central Bank started to tighten monetary policy in April to contain inflation pressures. Even so, prospects for the year remain positive. The attainment of an investment grade by two of the main international credit agencies (Fitch and Standard & Poor's) validate the view that the economy's fundamentals are evolving in a solid and sustainable way.
For Unibanco, future business development will rely on cross-selling, increased client base, and a greater offer of retail credit in conjunction with continued growth in income and GDP. Unibanco expects the Insurance and Pension-Fund Unit to grow most in the private individual and pension-fund segments, given the trend from closed to open pension fund plans.
In the Wholesale segment, given ever-decreasing spreads, future growth will rely on an increasing number of transactions and new opportunities in the capital markets, such as IPOs. In Asset Management, the strategy is to maintain our focus on products with high added value, such as equity funds and credit assets.
Unibanco's constant search for efficiency along with greater volume of revenue will enable the bank to realize its goals of increased profitability and ever-increasing payouts to its shareholders, creating new employment and contributing to the country's development.
Macroeconomic Forecasts
| |
2007 |
2008E |
| GDP Growth |
5.4% |
4.8% |
| Exchange Rate R$/US$ (year end) |
1.77 |
1.60 |
| Selic Interest Rate (year end) |
11.25% |
14.75% |
| IPCA (Consumer Price Index) |
4.5% |
6.2% |
Last Update: 08/22/2008
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This Website contains forward-looking statements relating to UNIBANCO's business that are based on management's current expectations, estimates and projections, therefore, some statements may not prove to be accurate since they are based upon assumptions as to future events. Thus, outcomes and results may differ materially from those expressed or implied in such forward-looking statements.
The aforementioned forward looking-statements are "as of", and as such, UNIBANCO undertakes no obligation or responsibility to update these statements.
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