Message from the CEO

It was a successful year for all the companies, one guided by consistent and responsible management.

The management strategy defined by the Itaúsa Conglomerate for the associated companies have been focused primarily on strengthening corporate governance at all its levels. These actions were effective as of 2010, when since the first months of the year our companies have worked to restructure their respective boards, committees and executive management.

Taking advantage of the positive recovery of both the Brazilian and global economies after two intense years of crisis and uncertainties, the Itaúsa Conglomerate demonstrated that it was on the right track.

One of the positive points of the Itaúsa operations in the financial area was the integration of the entire Itaú Unibanco customer assistance base – an operation completed in the record time of six months and within two years of the merger. In all, over 1,200 Unibanco points were migrated, creating a network of nearly 5,000 units all over the country, all with the Itaú Unibanco brand.

Itaú Unibanco is currently disseminating a new Vision (to become the leading bank in terms of sustainable performance and customer satisfaction) and a new Culture, both launched at the start of 2010 and resulting from the combination of the best of the two cultures, complete with new challenges and postures. That is why we sought inspiration in the "Itaú Way" and the "Unibanco Way" and developed "Our Way," or decalogue, a set of 10 attitudes and values that guide all of our relationships and which represent the language we want to use – both inside and outside the company.

In this way, Itaúsa believes that Itaú Unibanco will be able to more efficiently follow Brazil's sustainable growth. By extending our operations abroad, we inaugurated an international banking unit, Itaú Suisse, located in Zurich, Switzerland. And we went even farther: we established a commercial and cooperation agreement with China Unionpay Co. Ltd. (CUP), allowing customers of the Chinese bank to make withdrawals at the over 30,000 Itaú ATM machines.

In the industrial area, we are reaping the benefits of the extensive activities of the boards and their committees. The year of 2010 was one focused on corporate governance, which is currently directed at increasingly more mature levels, starting with the entry of independent board members, which increased our entry into new markets and reaffirmed the guaranteed autonomy of the Itaúsa Conglomerate companies.

During the year, Duratex completed yet another important incorporation in its production portfolio. Our market growth strategy led us to Brazil's Northeastern region, where we acquired the company Elizabeth Louças Sanitárias Ltda. Located in João Pessoa, Paraíba, it will add 1.8 million annual produced parts to the current capacity. Also in the country's Northeastern region, the Deca Division is investing in the expansion of its production capacity in the municipality of Cabo de Santo Agostinho, in Pernambuco. In the Southeastern region, we are working to reactivate and expand the Queimados unit in Rio de Janeiro and the Jundiaí unit in São Paulo. We plan to invest approximately R$400 million between 2010 and 2012.

Duratex, which after merging with Satipel became the largest manufacturer of industrialized wood panels in the Southern hemisphere, completes six decades of existence in 2011, in a state of full business maturity. It is a company prepared to face challenges and maintain its position of leadership in the markets in which it operates.

Itautec embarked on an in-depth restructurization of its corporate governance. The structure was strengthened and the implemented improvements should begin to be visible in 2011. The Automation Solutions Unit was the highlight for the year, with the sale of 12,200 ATMs for major financial institutions in different regions of the country. The company's goal is to extend its retail actions for the direct consumer and extend the quantity and quality of its services to computation and automation customers.

During a year marked by economic recovery, both within the country and abroad, our companies made important progress. For Elekeiroz, for example, 2010 was a year of general recovery in the consumer markets. After two years of global economic crisis, which led to a drop in demands primarily in the petrochemical industry segment – already affected by the cycle of low prices that normally occurs right after the conclusion of major investments in the sector – there was a slow and gradual recovery in all markets. This led to an improvement in the Elekeiroz business result, when compared to 2009.

As a result of the holding company's positioning, for the seventh time Itaúsa was selected for inclusion in the Dow Jones Sustainability World Index portfolio. And for the fourth consecutive year, it was named leader in the Financial Services sector in the Environmental and Social categories.

The net profit in IFRS for the Itaúsa holding company reached R$4.4 billion in 2010, with 18% return on average net equity.

Completing its 45-year history consolidated as one of the main Brazilian conglomerates – top-ranked in terms of earnings among the 200 largest business groups in the country in the "Biggest and Best" survey conducted by the Exame magazine – makes Itaúsa a Brazilian patrimony that renews its worth every day, employing security and planning to guarantee its continued success. For four years, Itaúsa has developed continuous improvement processes for its governance systems.

In this way, we are prepared for a new reality, one that involves a scenario marked by Brazil's insertion into the global arena. A country that was able to make such an important political transition by electing a woman president and which leads the economic sphere in Latin America with stability designed for growth. By positioning itself in sectors that notably represent secure paths of growth over upcoming years, we are attentive to business opportunities.

We prepare people, using training, qualification and recognition. We align the management of the companies with economic, social and environmental performance indicators and we communicate our processes to the market. It is for this new, more globalized world that Itaúsa is preparing its companies.