Published on November 13, 2013
Results Presentation 3Q13 Your Banking Partner
Disclaimer This presentation may contain references and statements representing future expectations. plans of growth and future strategies of BI&P. These references and statements are based on the Bank’s assumptions and analysis and reflect the management’s beliefs. according to their experience. to the economic environment and to predictable market conditions. As there may be various factors out of the Bank’s control. there may be significant differences between the real results and the expectations and declarations herewith eventually anticipated. Those risks and uncertainties include. but are not limited to our ability to perceive the dimension of the Brazilian and global economic aspect. banking development. financial market conditions. competitive. government and technological aspects that may influence both the operations of BI&P as the market and its products. Therefore. we recommend the reading of the documents and financial statements available at the CVM website (www.cvm.gov.br) and at our Investor Relations page in the internet (www.bip.b.br/ir) and the making of your own appraisal. 2
Highlights The Emerging Companies and Corporate segments accounted for 48.7% and 50.5%, respectively. Loans rated between AA and B corresponded to 84.5% of the expanded credit portfolio of Banco BI&P. Noteworthy are the loans granted during the period: 99.9% were rated between AA and B The Managerial Expense with ALL in 3Q13 (annualized) was 0.75% of the expanded credit portfolio (1.1% in 2Q13), in line with the conservative credit policy adopted by the Bank and lower than Management’s expectations. Funding volume totaled R$3.1 billion and Free Cash totaled R$657.9 million at the end of 3Q13, in line to the growth of the loan portfolio. Adjusted Revenue from Credit Operations and Agro Bonds (CPR), which reflects the Bank's core business, totaled R$78.0 million in the period, increasing 12.7% in the quarter and 32.7% in 12 months. Income from Services Rendered, which includes fees for structuring corporate finance operations, increased 16.7% in 3Q13 and 31.6% in 12 months. Net Income from the quarter was R$2.0 million, mainly due to the increase in revenues from credit operations and CPR. In the beginning of November, we announced the launch of guide investimentos, which will provide asset management services for high-income individuals through an investment platform that includes investment consulting and advice, financial content and intelligence, and a tailor-made product offering selected by analysts and economists. 3 Volume of origination by the Banco BI&P commercial team: the Expanded Credit Portfolio, including the loans assigned to Banco Intercap, totaled R$3.4 billion, +3.9% in the quarter and +12.2% from September 2012. Including the Banco Intercap portfolio, the consolidated Expanded Credit Portfolio totaled R$3.6 billion, +21.5% in the year. On November 4, 2013, we concluded the acquisition of Banco Intercap S.A. and, consequently, announced a capital increase of R$107 million, to be subscribed by the shareholders of Banco Intercap. Messrs. Roberto de Rezende Barbosa and Afonso Antônio Hennel will join the Bank BI&P’s controlling group, and also, after approval by the extraordinary shareholders’ meeting, the Board of Directors of the Bank as Vice Chairman and Director, respectively.
Banco BI&P Strategic Layout JOINT VENTURES INVESTMENT BANK FOR STRUCTURING AND FIXEDINCOME DISTRIBUTION COMMERCIAL BANK ASSET GENERATION New Management New Commercial Team New Credit and HR Policies New Structure of Controls Business Repositioning Multiproduct Offering Treasury and Derivatives Desk New Joint Ventures 3 new partnerships in negotiation, focusing the following segments: - Agriculture - Real Estate New Team Acquired New Strategy in Course Robust Pipeline and Backlog Partnership with Moelis & Co. BROKERAGE HOUSE DISTRIBUTION RETAIL FUNDING New Management Hired Business Strategy and Model Redefined (global investment bank) New Systems Acquired Launched in November 2013 52 MANDATES IN PROGRESS NEW DISTRIBUTION PLATFORM MORE THAN 65 PROPOSALS 100% INCREASE IN THE CLIENT BASE IN THE LAST 12 MONTHS Active/Creative 82% ASSET GROWTH STRONG QUALITY ASSET GENERATION FUNDING DIVERSIFICATION WELL PROVISIONED, SOLID CREDIT PORTFOLIO 4 MORE THAN R$400 MILLION OF ASSETS ORIGINATED PRESENTED
guide investimentos guide investimentos: innovative investments platform Focus Operates in allocation and distribution of financial assets to high net worth individuals. Products Portfolio Services investment consulting and advice, financial content and intelligence, and a tailor-made product offering selected by analysts and economists. Value Proposition 5 Investment Funds (of third parties), fixed-income, credit, real estate funds, pension funds, structured products, stocks, future markets and commodities. Tailor-made portfolio recommendation for each client without charging for rebates, eliminating any eventual conflict of interest and allowing the recommendation of products that are more suitable to each investment profile.
Acquisition of Banco Intercap Concluded in November 2013 Capital Increase Corporate Governance People R$107 million, to be subscribed by Banco Intercap shareholders Shareholders of 2 solid groups will join the controlling group and the Board of Directors: Afonso Hennel (Semp Group) and Roberto de Rezende Barbosa (NovAmerica / Cosan) Integration taking place, estimated to end in December 2013 By the end of the process, Banco BI&P will have a smaller team compared to June 2013 Technology Basel Index 6 Intercap operations has been absorbed into Banco BI&P technological infrastructure, expected to be ended on January 1, 2014 Index of 15.4%, in case of the acquisition had been concluded in September 2013
Expanded Credit Portfolio Growth of 21.5% in 12 months. 3,068 3,048 3Q12 4Q12 1Q13 3,229 2Q13 3Q13 3,635 R$ milhões 2,991 3,355 3Q13* Expanded Credit Porfolio Intercap Portfolio assigned to Intercap Private Credit Bonds (PN and Debentures) Agricultural Bonds (CPR, CDA/WA and CDCA) Guarantees Issued (L/G and L/C) Trade Finance 7 Expanded Credit Portfolio BI&P Loans and Financing in Real * Considers the consolidated Expanded Credit Portfolio, which includes the expanded credit portfolio of Banco Intercap.
Client Segmentation Emerging Companies and Corporate segments participation in the expanded portfolio of Banco BI&P near the strategic mix of 50%-50%... 3Q13 48.7% 50.5% 0.8% Average exposure per client | R$ million 2Q13 47.6% 51.4% 1.0% Emerging Companies Corporate Other 2Q13 3Q13 Corporate 8.1 8.4 Emerging Companies 3.6 3.2 Emerging Companies Corporate Annual revenues of between R$400mn and R$2bn Annual revenues from R$80mn to R$400mn 1,200 1,445 1,538 1Q13 2Q13 3Q13 1,682 1,586 1,820 3Q12 4Q12 1,567 1,659 1,644 1Q13 2Q13 3Q13 R$ million R$ million 1,253 3Q12 4Q12 Migration of clients from Emerging Companies to Corporate = ~R$260mn as of Sept. 30. 2012 8 Note: Other Credits includes Consumer Credit Vehicles. Acquired Loans and Non-Operating Asset Sales Financing.
Expanded Credit Portfolio Development ...focusing on higher quality assets... 3,229 685 (582) New Operations 3Q13 (11) R$ million (63) 3,258 2Q13 Amortized Credits Credit Exits New Transaction 728 3Q12 4Q12 773 589 685 R$ million 687 9 1Q13 2Q13 3Q13 Write offs 99% of the new transactions in the last 12 months are classified between AA and B.
Expanded Credit Portfolio ...and increasing the new products share in the portfolio... 3Q13 3Q12 BNDES Onlendings 10% Trade Finance 16% Private Credit Bonds 1.4% Loans & Discounts in Real 56% NCE 1.9% CCE 2.2% Other 1% CCBI 1.8% Discount Receivables 0.2% Confirming 0.6% Credit Assignments 16.5% 10 Guarantees Issued Agricultural 6% Bonds 10% Loans 32.8% BNDES Onlendings 10% Trade Finance 12% CCE 3.3% Other 1% CCBI 2.5% Discount Receivables 0.3% Confirming 0.0% Credit Assignments 5.7% NCE: Export Credit Notes; CCE: Export Credit Certificate; CCBI: Real Estate Credit Bank Note. Agricultural Bonds 21% Private Credit Bonds 0.9% Loans & Discounts in Real 49% NCE 5.9% Guarantees Issued 6% Loans 30.8%
Expanded Credit Portfolio ...with relevant exposure in agriculture... 3Q12 Agriculture Construction Automotive Livestock Food & Beverage Oil, Biofuel & Sugar Metal Industry Financial Activities Commerce - Retail & Wholesale Pulp and Paper Infrastructure Transportation & Logistics Textile, Apparel & Leather International Comerce Chemical & Pharmaceutical Education Power Generation & Distribution Machines and Equipment Electronics Information, Comunication and I.T. Other industries* 8.9% 8.1% 7.6% 6.9% 5.2% 4.0% 3.9% 3.9% 3.9% 3.5% 3.4% 3.0% 3.0% 2.8% 2.4% 2.0% 1.8% 1.5% 1.4% 7.5% 15.3% 3Q13 Food & Beverage Oil, Biofuel & Sugar Automotive Infrastructure Livestock Commerce - Retail & Wholesale Transportation & Logistics Power Generation & Distribution Textile, Apparel & Leather Chemical & Pharmaceutical Raw Materials Education Metal Industry Financial Activities Other industries* 11 * Other industries with less than 1.4% of share. 23.6% Agriculture Construction 8.7% 7.9% 7.5% 5.5% 4.4% 4.3% 3.7% 3.7% 3.4% 2.7% 2.6% 2.6% 2.4% 2.3% 1.8% 12.8%
Expanded Credit Portfolio ...and promoting risk dilution. Client Concentration 3Q13 11.7% 3Q12 13.3% 3Q11 28.6% 26.0% 29.6% 32.0% 18.5% Top 10 11 - 60 largest 33.7% 27.0% 30.0% 26.9% 61 - 160 largest The reduction of concentration is one of the results of the new credit policy adopted since April 2011. 12 22.2% Other
Credit Portfolio Quality 99.9% of loans granted in the quarter were rated from AA to B In Sept 2013, 66.2% of credits rated between D-H covered 79.7% 3Q13 2% 36% 42% 7% Credits rated between D and H totaled R$317.8 million at the end of 3Q13: 13% 81.7% 2Q13 3% 42% 38% − R$247.6 million (78% of Credit Portfolio between D-H) in normal payment course; 7% 11% − Only R$70.1 million overdue +60 days; and 78.4% 3Q12 6% 37% AA 35% A B C 14% − 66.2% covered. 8% D-H New Credit Policy* Clients Loan Portfolio B A 42% 36% A 42% C 7% AA 2% D-H 13% 3Q13 13 * New Credit Policy: adopted since April 2011. AA 2% Previous Credit Policy Clients Loan Portfolio D-H 60% B 48% C D-H 4% 3% AA 3% A 3% C B 23% 11%
Operating Performance and Profitability Adjusted Revenues from Credit Operations and CPR 3Q13 2Q13 3Q13/2Q13 3Q12 3Q13/3Q12 A. Revenues from Credit Operations and agro bonds (CPR) 79.4 60.0 32.4% 62.9 26.3% 3.0 1.7 75.2% 5.9 49.1% C. Discounts granted on settled operations (1.6) (11.0) 85.5% (1.8) -11.4% Adjusted Revenues from Credit Operations and CPR (A-B-C) 78.0 60.7 12.7% 74.3 32.3% B. Recoveries of written-of operations Net Interest Margin (NIM) 5.8% 5.3% 5.4% 3.2% 5.6% 5.9% 4.5% 4.4% 4.1% 4.1% 4.1% 4.8% 4.1% 3Q12 4Q12 1Q13 2Q13 3Q13 9M12 9M13 4.7% NIM without effects of discontinuance of designation of hedge accounting and discounts * Managerial NIM with Clients * 14 * Includes revenues from agro bonds (CPR)
Credit Portfolio Quality NPL 60 days / Credit Portfolio NPL 90 days / Credit Portfolio 14.0% 9.4% 7.5% 8.5% 5.5% 4.9% 3.1% 12.4% 10.6% 2.3% 1.5% 2.6% 2.9% 1.9% 8.2% 4.5% 2.2% 1.2% 2.1% 2.6% 1.1% 0.4% 0.4% 0.5% 0.6% 0.3% 0.1% 0.4% 0.5% 0.6% 3Q12 4Q12 1Q13 2Q13 3Q13 3Q12 4Q12 1Q13 2Q13 3Q13 Clients Previous Credit Policy Clients Previous Credit Policy Total Total Clients New Credit Policy* Clients New Credit Policy* Managerial ALL Expense 1 1.10% Managerial Allowance for Loan Losses (ALL) 0.75% Expense1 in 3Q13, annualized, was 0.75% of the Expanded Credit Portfolio 2Q13 Managerial Expense with Allowance for Loan Losses (ALL) = ALL expenses + Discounts granted upon settlement of loans – Revenues from recovery of loans written off. | * New Credit Policy: adopted since April 2011. 1 15 3Q13
Funding Product mix helps with cost reduction 3Q12 Time Deposits (CDB) 23% 2,999 3,142 3,082 Foreign Borrowings 15% R$ million 2,936 3,170 LF and LCI 1% Onlandings 10% 3Q13 3Q12 4Q12 In Local Currency 1Q13 2Q13 3Q13 in Foreign Currency Time Deposits (CDB) 23% Interbank & Demand Deposits 5% Insured Time Deposits (DPGE) 30% LCA 19% LF and LCI 3% Foreign Borrowings 12% Onlandings 11% 16 Insured Time Deposits (DPGE) 35% LCA 11% Interbank & Demand Deposits 2%
Operating Performance and Profitability Net Profit R$ million 10.8 3.1 3.6 3Q12 4Q12 2.0 1Q13 2Q13 -91.4 3Q13 9M12 -20.6 9M13 -110.1 Return on Average Equity (ROAE) % 2.2 2.5 n.r. 3Q12 17 n.r.= not representative 4Q12 n.r. 1Q13 2Q13 1.4 3Q13 2.4 n.r. 9M12 9M13
Capital Structure and Ratings Leverage Shareholders’ Equity Expanded Credit Portfolio / Equity 683.0 587.2 498.4 569.6 BI&P+ Intercap 574.5 5.1x 5.2x 3Q12 4Q12 BI&P+ Intercap 6.1x 5.7x 5.7x 5.3x 1Q13 2Q13 3Q13 3Q13* R$ million 587.6 3Q12 4Q12 1Q13 2Q13 3Q13 3Q13* Basel Index (Tier I) Agency Rating Last Report 18 4Q12 1Q13 2Q13 3Q13 3Q13* Global: BB/Negative/ B National: brA+/Negative/brA-1 Aug/13 Global: Ba3/Negative/Not Prime National: A2.br/Negative/BR-2 Jul/13 Fitch Ratings 3Q12 Standard & Poor’s Moody’s 15.82% 14.94% 14.17% 14.55% 14.48% 15.4% BI&P+ Intercap National: BBB/Stable/F3 Set/13 RiskBank Index: 9.80 Low Risk Short Term Oct/13 * Simulation of the conclusion of the merger with Banco Intercap at the end of 3Q13.
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