Banco Pine - Institutional Presentation 1Q12
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Banco Pine - Institutional Presentation 1Q12 Banco Pine - Institutional Presentation 1Q12 Presentation Transcript

  • Institutional Presentation1Q12
  • Summary History and Profile PINE History Business Strategy Competitive Landscape Focus on the Client Corporate Credit Hedging Desk PINE Investimentos and Distribution Pillars Rating Upgrades Highlights and Results Corporate Governance and PINE4 Organizational Structure Corporate Governance Committees Capital Increase, Split, and Shareholder Structure Dividends and Interest on own Capital p AppendixInvestor Relations | 1Q12 | 2/32
  • History and Profile
  • PINESpecialized in providing financial solutions for large corporates… Credit Portfolio by Annual Client Revenues Up to R$150 March 31st, 2012 million 15% Over R$1 R$150 billion million to 52% R$500 million 16% R$500 million to R$1 billion $ 17% Profile Focused on establishing long-term relationships with g g p Business is structured along four primary business lines: g p y large corporates • Corporate Credit: credit and financing products Close relationships and product penetration • Hedging Desk: instruments for hedging and risk management • PINE I Investimentos: I ti t Investment B ki t t Banking and d Investment/Wealth Management • Distribution: Funding and investment solutions for foreign and local investorsInvestor Relations | 1Q12 | 4/32
  • History...with extensive knowledge of Brazil’s corporate credit cycle. 1939 End of 2007 October, 2011 Pinheiro Family Focus on expanding the Corporate Banking franchise Subscription of PINE`s capital by DEG 1,015 1,029 founds Discontinuation of th payroll-deductible l Di ti ti f the ll d d tibl loan b i business Banco Central do 867 Nordeste October, 2007 827 825 Creation of the Hedging Desk 801 May, 2007 Creation of PINE Investimentos product line and start up of Cayman branch 2005 1975 Noberto Pinheiro becomes Noberto Pinheiro PINE’s sole shareholder 7,300 becomes one of 6,921 BMC’s controlling Corporate Credit Portfolio (R$ Millions) 335 shareholders 5,747 Shareholders Equity (R$ Millions) 209 152 171 4,118 121 126 140 136 62 2,854 3,070 18 1,214 155 184 222 341 521 620 755 663 761 1997 Noberto and Nelson Dec-97 Dec-98 Dec-99 Dec-00 Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Mar-12 Pinheiro sell their stake in BMC and found PINE Asian Russian Devaluation Nasdaq Sept. Sept 11 Brazilian Banco Santos Subprime Banco European Crisis Crisis of the real Elections liquidity crisis Panamericano Community (Lula) March, 2007 May, 2012 IPO 15 yearsInvestor Relations | 1Q12 | 5/32
  • Business Strategy
  • Competitive LandscapePINE serves a niche market of companies that lack adequate banking options, seeking a bank that fullyunderstands their needs… Market Consolidation of the banking sector has decreased the supply of credit lines and financial instruments for corporates Large Multi-Services banks Foreign banks are in a deleveraging process g g gp 100% Corporate PINE Full service Bank – Credit, Hedging, and 100% focused on providing complete service Investment Bank products – with room for to companies, offering customized products growth Foreing banks . Corporate & SME ~10 clients per officer Competitive Advantages: SME & Retail  Focus  Fast response: Strong relationship with clients, with credit committee twice a week and answer to clients in up to one Retail week  S Specialized services i li d i  Tailor-made solutions  Product diversityInvestor Relations | 1Q12 | 7/32
  • Focus Always on the ClientThe bank develops a strategy of product diversity, tailored to meet the needs of each client. CDs CDIs LCIs Pricing of Assets and CCBs Private Liabilities Placements RDBs Eurobonds Liquidity LCAs Management Financial Letters Fixed Income CDBs Local Currency Currencies Trading CRIs Debentures Commodities Foreign Currency Equities Distribution Treasury Working Capital Working Capital g Underwriting Overdraft Capital Accounts Markets Local Currency Private BNDES Onlending Placements Clients Onlending Advisory PINE Corporate Bank Guarantees Advisory Investimentos Credit Foreign Currency Compror Investment/ Structured/ Wealth Trade Finance ACC/ACE Project Management Hedging Desk Structured Export Finance Finance Finance Structured/ Credit Funds Project Bank Finimp Finance Guarantees Letters of Credit Fixed Income Fixed Income Currencies Funds 2,770 onlending Syndicated and Portfolio Commodities Structured Loans Management Swap NDFs Structured Swaps OptionsInvestor Relations | 1Q12 | 8/32
  • Corporate CreditStrong track record and solid credit origination and approval process. Actions Credit Committee Personalized, agile service, working closely with clients Meets twice a week – reviewing 20 proposals on average and keeping a low client to account officer ratio: each officer handles ~10 economic groups on average. 10 Minimum quorum: 4 members - attendance of CEO or q Chairman is mandatory Geographic coverage of clients, providing the bank with local and extremely up-to-date credit intelligence and information. Members: Chairman of the Board Established long term relationship with more than 600 economic groups CEO Chief Operations Officer Origination network is comprised of 11 branches divided Chief Administrative Officer into 14 origination platforms in Brazil’s major economic Chief Credit Officer centers More than 30 credit analysts, assuring that analysis is Participants: fundamentally driven and based on industry-specific Executive Director of the Hedging Desk intelligence Treasurer Efficient loan and collateral processes, documentation, Credit Analysts and controls, which has resulted in a low NPL track record Other members of the Corporate Banking origination team pp Credit Approval: Electronic Process Regional Heads of Vice President and Origination Officers Credit Analysts Origination and Credit CREDIT COMMITTEE Analysts of Credit Analysis Credit origination analysis, clients, Credit analysis visit to clients data sizing, collateral, Discussion on sizing collateral Presentation to the Credit Committee Centralized and unanimous updates, interaction with internal structure, etc. decision making process research teamInvestor Relations | 1Q12 | 9/32
  • Hedging DeskPINE is the 1st player in terms of commodities to clients¹. Client Notional Derivatives Portfolio by Market Notional Value and (MtM) March 31st, 2012 Notional Value R$ Millions MtM MtM Stressed 358 354 354 Fixed 236 Currency 224 Income 30% 62% 178 157 106 126 84 Commodities 8% 3,428 3 428 3,457 3 457 3,709 3 709 3,712 3 712 4,287 4 287 Notional: R$4.3 billion Mar -11 Jun-11 Sept -11 Dec-11 Mar -12 Market Segments Portfolio Profile Fixed Income: Fixed Floating Inflation Libor Fixed, Floating, Inflation, Scenario on March 31st March, Duration: 198 days Currencies: Dollar, Euro, Yen, Pound, Canadian Dollar, Australian Dollar Mark-To-Market : R$126 million Commodities: Sugar, Soybean (Grain, Meal and Oil), Corn, Cotton, Metals, Energy Stress Scenario (Dollar: +31% and Commodities Prices: -30%): Stressed MTM: R$354 million*Source: Cetip Report, March 2012.Investor Relations | 1Q12 | 10/32
  • PINE Investimentos and Distribution...adding value for clients, while optimizing the use of the Banks capital. PINE INVESTIMENTOS Market Segments Volume of Underwriting Transactions Revenues 16 Capital Markets: Structuring and Distribution of Fixed 317 Income Transactions Financial Advisory Project Finance 233 M&A Hybrid capital transactions 1 0 - Assets under Management 1Q11 4Q11 1Q12 1Q11 4Q11 1Q12 Fixed Income Credit Funds Exclusive Mandates Distribution Desk Portfolio Management Local and Foreign Investors Family Offices Corporates Financial Institutions Foreign Investors High Net Worth Individuals Asset Managers Pension FundsInvestor Relations | 1Q12 | 11/32
  • PillarsStrategy supported by solid fundamentals, built and achieved over the years… Adequate capital structure Strong and motivated team Capital Adequacy Ratio (BIS) of 16.4% 16 4% Meritocracy Regulatory Capital: R$1.3 billion Right incentives DEG and PINE partnership Highly qualified team R$ 237 million subordinated debt, qualified as Tier II capital Corporate clients Efficient funding structure Strong relationship Longer average maturities: 17 months (Mar/12) Customized service Greater diversification of funding sources In-depth knowledge of client needs USD25 million 10 year funding with Proparco Product diversity USD37.5 million funding uptake in Islamic format with the Saudi bank Al Rajhi USD106 million A/B Loan (Jan/11) with the IICInvestor Relations | 1Q12 | 12/32
  • Rating Upgrades...with market recognition and positive evaluation by rating agencies. On December 7th, 2011: On May 14th, 2012 PINE’s rating in global scale, to Foreign and Local Currency Long- BB+ from BB- (two notches) Term IDR to BB from BB- PINE’s rating in national scale, to National Long-Term Rating to brAA from brA (three notches) A+(bra) from A(bra) Viability rating upgraded to bb On August 23rd, 2011: from bb- Local currency rating, to brA from Banco Pine S.A. USD 125 million brA- Subordinated notes to B+ from B Reaffirmed the Rating in foreign currency in BB- Revision from PINE’s outlook to positive The agency based its ratings on the strong asset- Fitch attributed this upgrade to the diversification of quality, adequate liquidity, capital, and earnings. PINEs funding profile and its good assets and S&P also emphasizes the gradual funding liabilities management, provided by the adequate diversification, di ifi i through h h foreign f i issuances, i match of the credit and funding books. In addition, h f h di d f di b k ddi i securitizations, and the recent capital increase the Agency considered that the positive liquidity gap subscribed by DEG allied with the good cash position evidences the Banks overall solid financial strength. According to the Agency, the Bank’s continued increase in fee income, income mainly due to higher product penetration is penetration, a good indicator of the successful maintenance of profitability levels.Investor Relations | 1Q12 | 13/32
  • Highlights and Results
  • 1Q12 Key Figures The main indicators showed improvement in the period… R$ Millions Expanded Corporate Corporate Credit Total Funding Credit Portfolio1 Coverage 25.4 % 80 bps 20.7% 2.7% 3.5% 6,421 7,300 5,322 5,823 5 823 Mar -11 11 Mar -12 Mar M -11 Mar M -12 Mar M -11 Mar M -121 Includes guarantees and private securities Shareholders´ Equity Net Income ROAE 430 bps 17.1 % 51.6% 879 1,029 31 47 15.2% 19.5% Mar-11 Mar-12 1Q11 1Q12 1Q11 1Q12 Investor Relations | 1Q12 | 15/32
  • Product and Revenue Diversification...with contributions from all business lines, as a result of the strategy of complete service to clients. Clients with more than one Product Penetration Ratio – Clients with more than one Product More than 1 product 1 product 3.0 60% 56% 42% 2.7 2.5 40% 44% 58% Mar -10 Mar -11 Mar -12 Mar -10 Mar -11 Mar -12 Corporate Revenues Breakdown 1Q11 1Q12 PINE Investimentos 0.5% Corporate Treasury Credit PINE 3.4% 69.0% Investimentos Corporate 10.2% 10 2% Credit 57.3% Treasury 8.2% Hedging Desk 27.1% Hedging Desk 24.3%Investor Relations | 1Q12 | 16/32
  • Credit PortfolioThe portfolio continued to grow, +5.3% QoQ and +25.4% YoY… R$ Millions Expanded Corporate Credit Portfolio1 7,300 6,935 6 935 6,732 1.021 Trade finance 6,314 782 765 5,773 5,823 782 5,292 5 292 547 622 1.687 1.684 Guarantees 4,828 1.534 569 4,556 1.022 1.372 1.117 722 827 840 883 883 881 BNDES Onlending 842 846 881 912 644 342 634 251 297 71 122 261 472 Private Securities 2,821 2,792 3,251 3,358 3,132 3,126 3,300 3,286 3,370 Working Capital Mar-10 Jun-10 Sept-10 Dec-10 Mar-11 Jun-11 Sept-11 Dec-11 Mar-12 ¹ Includes debentures, CRIs, and hedge fund sharesInvestor Relations | 1Q12 | 17/32
  • Credit Portfolio Profile... growing in a diversified manner… Credit Portfolio by Industry Segments Geographic Distribution Electric and Transportation Renewable and Logistics Food Industry Energy Foreingn Trade 5% 4% 5% North 8% Specialized 2% Services Midwest Infrastructure 4% 10% 8% Meatpacking 3% Northeast Agriculture 5% 8% Metal and Mining 3% South 7% Beverages and Tobacco 3% Construction 9% Vehicles and Southeast Parts 76% 3% Chemicals 2% Sugar and Ethanol 20% Telecom Financial Others 2% Instituions 9% Materials of 2% Constrution and Decoration D ti 2%Investor Relations | 1Q12 | 18/32
  • Credit Portfolio Quality... with quality, collaterals, and adequate credit coverage. Credit Portfolio Quality – March 2012 Non Performing Loans > 90 days B Contracts Overdue 32.7% Installments Overdue 0.7% 0.7% 0.6% 0.5% 0.5% C 0.3% 0 3% 0.3% 0 3% 0.3% 0 3% 11.1% 0.2% 0.2% D-E 1.5% AA-A AA A F-H 52.7% 2.0% Mar-11 Jun-11 Sept-11 Dec-11 Mar-12 Total Credit Coverage Collaterals 80 b bps -10 bps Products Pledge Guarantees 44% 2% Investments 3% 2.7% 3.6% 3.5% Properties Pledge 20% Receivables Mar-11 Dec-11 Mar-12 31%Investor Relations | 1Q12 | 19/32
  • FundingDiverse sources of funding… R$ Millions 6,544 Trade Finance 6,421 6,248 5,936 753 Private Placements 841 814 5,437 5,322 596 250 5,182 125 Multilateral Lines 102 86 353 276 377 435 310 267 246 233 4,622 4 622 413 158 237 160 172 220 281 291 International Capital 4,304 166 194 282 247 256 200 21 Markets 405 194 201 151 - 33 867 868 448 829 898 867 Local Capital Markets 227 626 87 203 867 112 31 239 - 46 42 53 66 106 161 224 320 210 165 250 281 276 453 41 228 BNDES - 36 198 214 272 212 242 201 50 218 248 175 85 1,196 1,186 Demand Deposits 1,287 1,253 1,463 1,530 1,114 1,064 1 064 1,124 Interbank Time D I t b k Ti Deposits it High Net Worth Individual 1,965 2,130 2,128 Time Deposits 1,646 1,654 1,720 1,845 1,566 1,592 Corporate Time Deposits Institutional Time Mar-10 Jun-10 Sept-10 Dec-10 Mar-11 Jun-11 Sept-11 Dec-11 Mar-12 DepositsInvestor Relations | 1Q12 | 20/32
  • Asset & Liability Management... presenting a positive gap of 3 months between the credit and funding portfolios. Matching of Transactions Credit Exposure to Total Funding Ratio CREDIT FUNDING 88% 82% 81% 80% BNDES BNDES 76% Trade Finance Trade Finance Deposits Working Capital, Private Letras Financeiras Securities* And Cash*I l d d b Includes debentures, CRI eurobonds, and h d f d shares CRIs, b d d hedge fund h Offshore F di Off h Funding Mar-11 Jun-11 Sept-11 Dec-11 Mar-12 ALM Deposits vs. Total Funding R$ Millions R$ Millions , 4,304 5,322 6,421 Credit Funding 2,668 2,336 30% 37% 41% 1,969 1,608 1,594 , Others 1,432 1 432 Deposits 915 70% 435 63% 59% - 31 109 144 No maturity Up to 3 From 3 to 12 From 1 to 3 From 3 to 5 More than 5 months months years years years (includes Cash) Mar-10 Mar-11 Mar-12Investor Relations | 1Q12 | 21/32
  • Capital Adequacy Ratio (BIS)...and strong capitalization ratios. Tier II Tier I Minimum Regulatory Capital (11%) 19.6% 18.5% 18.4% 18.5% 17.4% 17.1% 16.6% 4.5% 16.4% 3.9% 3.6% 4.2% 14.9% 3.6% 3.7% 3.4% 3.1% 3 1% 0.5% 14.4% 14.6% 14.8% 13.8% 13.4% 13.2% 15.1% 14.3% 13.3% Mar -10 Jun -10 Sept -10 Dec -10 Mar - 11 Jun -11 Sept -11 Dec -11 Mar -12 R$ millions Bis Ratio(%) Tier I 1,025 13.3% Tier II 237 3.1% Total 1,262 16.4%Investor Relations | 1Q12 | 22/32
  • Guidance 2012PINE is ready to capture 2012s business opportunities, and reaffirms the guidance for 2012. Guidance Expanded Corporate Credit Portfolio 17% - 22% Personnel and Ad i i P l d Administrative Expenses i 8% - 12% 2% NIM 5.5% - 7.5% ROAE 17% - 20%Investor Relations | 1Q12 | 23/32
  • Corporate Governance and PINE4
  • Management StructureNon-bureaucratic, entrepreneurial, and meritocratic culture with a flat hierarchy, speeding the decisionmaking process. Noberto Pinheiro Noberto Pinheiro Jr Maurizio Mauro Gustavo Junqueira Mailson da Nóbrega Antonio Hermann Chairman Vice Chairman Independent External Member Independent Independent Member Member Member EXTERNAL AUDIT INTERNAL AUDIT COMPENSATION AUDIT COMMITTEE PWC Tikara Yoneya COMMITTEE CEO Noberto Pinheiro Jr ASSET MANAGEMENT HUMAN RESOURCES Dan Cohen Sidney Vilhena COO CRO CAO CFO Norberto Zaiet Gabriela Chiste Ulisses Alcantarilla Susana Waldeck International Credit Cash Flow Management Controlling Origination Compliance & Internal Asset & Liabilities Back Accounting Investments Controls Office Tax Planningg Sales & Trading Risks Legal IT Research Macro / Collaterals Management Accounts Payable Commodities Special Assets Office Management Middle Office Marketing Investor Relations From April 2012 onInvestor Relations | 1Q12 | 25/32
  • Corporate GovernancePINE has the best corporate governance practices… Three independent members and one external member on the Board of Directors Mailson Ferreira da Nóbrega: Brazil’s Finance Minister from 1988 to 1990 Maurizio Mauro: Former CEO of Booz Allen Hamilton and Grupo Abril Antonio Hermann: Former CEO of Banco Itamarati, Director at FEBRABAN and elected Director of Brazilian Banking Association Gustavo Junqueira: Former Head of PINE Investimentos, Member of the Board of Directors at EZTEC, Financial Advisor at Arsenal Investimentos and CFO at Gradiente Eletronica São Paulo Stock Exchange (BM&FBovespa) Level 2 Corporate Governance Audit and Compensation Committee reporting directly to the Board of Directors 100% tag along rights for all shareholders including non-voting shares shareholders, non voting Arbitration procedures for fast settlement of litigation cases First Brazilian bank to release BR GAAP and IFRS quarterlyInvestor Relations | 1Q12 | 26/32
  • Committees…favoring collective decision making. Main decisions are taken by committees: Board of Directors and a structure of specific committees Non-stop exchange of knowledge, ideas, and information p Transparencyy 45 days BOARD OF DIRECTORS RISK COMPENSATION AUDIT COMMITTEE COMMITTEE COMMITTEE 45 days Bi-annually Monthly CEO COMMITTEES TREASURY INTERNAL INVESTMENT HUMAN PERFORMANCE EXECUTIVE CREDIT COMMITTEE LITIGATION CONTROLS AND IT ETHICS BANK RESOURCES EVALUATION ALCO COMPLIANCE Monthly Twice a week Weekly Weekly Bi-monthly Every 2 months Monthly 45 days Quarterly On demand From April 2012 onInvestor Relations | 1Q12 | 27/32
  • Capital Increase, Split, and Shareholder StructureSuccessful capital increase done in September and approved by the Central Bank in December. The first and only equity investment by DEG in a Brazilian bank. The agreement will expand the collaboration between the two institutions institutions. Split adjusted price per share: R$15.06 Total shares: 2,904,228 preferred shares Total amount: R$43,749,988.80 Approximately 14% split on February 27th. Split ratio: 14.18 New shares issued: 12,274,766 Ownership structure: As of M arch 31, 2012 Common Preferred Total % Controlling Shareholder 51.886.766 15.595.863 67.482.629 68,3% M anagement g t - 5.155.650 5 155 650 5.155.650 5 155 650 5,2% 5 2% Free Float - 26.214.495 26.214.495 26,5% Individuals - 3.608.935 3.608.935 3,7% Institutional Investors - 10.445.307 10.445.307 10,6% Foreign Investors - 12.160.253 12.160.253 12,3% Total 51.886.766 46.966.008 98.852.774Investor Relations | 1Q12 | 28/32
  • Dividends and Interest on Own CapitalPINE has delivered an attractive dividend yield paying dividends/interest on own capital on a quarterlybasis. 55 45 40 35 35 33 30 25 25 16 15 1S07 2S07 1S08 2S08 1S09 2S09 1S10 2S10 1S11 2S11 1Q12Investor Relations | 1Q12 | 29/32
  • Appendix
  • Social Investment and ResponsibilityPINE supports and promotes the Brazilian culture and sports Culture Social Paulo von Poser: exhibit of the painter Paulo von Poser, who is one of Brazil’s most prominent Instituto Alfabetização Solidária artists Instituto Casa da Providência Quebrando o Tabu: documentary based on the analysis from the former President of Brazil, Fernando Henrique Cardoso, on the fight against drugs Além da Estrada: motion picture, which received the award for best director in the 2010 Sports Rio Festival Minas Tênis Clube: training program for athletes Responsible Credit “Lists of E “Li f Exceptions”: the B k d i ” h Bank does not fi finance projects or those organizations that damage the environment, are involved in illegal labor Most Green Bank practices or produce, sell or use products, substances or activities considered prejudicial to society. y System of environmental monitoring, financed by the IADB and coordinated by FGV, and internally- produced sustainability reports for corporate loans. Recognized by the International Finance Corporation (IFC), private agency programs of the World Bank as the most "green" bank as a result of its transactions under the Global Trade Finance Program (GTFP) and its on lending to companies focused on renewable energy and ethanol.Investor Relations | 1Q12 | 31/32
  • Investor Relations Noberto Pinheiro Jr. CEO Susana Waldeck Norberto Zaiet Jr. CFO COO Raquel Varela Head of Investor Relations Alejandra Hidalgo Investor Relations Manager Phone: +55-11-3372-5343 www.pine.com.br/ir ir@pine.com.br This presentation contains forward-looking statements related to business prospects, estimates for operating and financial results, and estimates related to prospects for growth at Banco Pine. These are merely projections and as such are based exclusively on the expectations of Banco Pine’s management concerning the future of the business and its continued access to capital to fund the Company’s business plan. Such forward-looking statements depend, substantially, on changes in market conditions, government regulations, competitive pressures, and the performance of the Brazilian economy and the industry, among other factors and risks disclosed in Banco Pine’s filed disclosure documents, and are, therefore, subject to change without prior notice.Investor Relations | 1Q12 | 32/32