1Q13 Earnings Release Report
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1Q13 Earnings Release Report Document Transcript

  • 1. 1/20Conclusion of the cycle of changes started in April 2011Capital increase of up to R$92 million and additional allowance forloans granted under the previous credit concession criteriaBI&P - Banco Indusval & Partners is a commercial bank with 45 years of experience in the financial market, focusing on local and foreigncurrency, fixed income and corporate finance for companies. BI&P relies on a network of 11 branches strategically located in economicallyrelevant Brazilian regions, including an offshore branch in Cayman Islands, its brokerage firm operating at the São Paulo Stock, Commoditiesand Futures Exchange - BM&FBOVESPA and Serglobal Cereais, acquired in April 2011, which originates agricultural bonds.Highlights This quarter we completed a cycle that begun in April 2011 withthe entry of a new management team and new shareholdersincluding the private equity fund Warburg Pincus. It was twoyears of restructuring of the Bank as a whole, adoption of a new Vision,change in the operating segment (migration to bigger companies withlower risk), changes to the credit granting criteria, expansion andsophistication of the product offering, renewal of nearly 80% of thesales team, structuring of the derivatives and agricultural bonds desk, amore active treasury area, acquisition of an investment banking team(Voga), structuring and distribution of fixed income products andestablishment of new strategic alliances in Brazil and abroad. Today, allthe teams, processes and strategies are fully operational. During the period, we recycled our loan portfolio by acquiringnew customers and through credit exit from poor quality loans. To conclude this first cycle and to ensure that the future Bank resultsare not contaminated, in 1Q13 we decided to strengthen theallowance for loan losses (ALL). Of the total ALL expenses ofR$133.4 million in the quarter, R$126.5 million pertain exclusively to theloans originated before April 2011. With this, the allowance coveragefor loans classified between D and H increased from 47.3% in December2012 to 96.4% in March 2013, reflecting a more conservative approachby the current management. As a result of this allowance, we recordeda loss of R$91.4 million in the quarter. On a parallel note, we announced on this date a capital increase of upto R$92 million, of which the private equity fund Warburg Pincus andthe controlling shareholders have already committed to subscribed toR$82 million, which underlines the confidence of all the parties inlaying the solid foundation for a differentiated bank in themarket. After the approval by Brazilian Central Bank in April 17, we alsoannounced on this date the closing of the acquisition process of VogaEmpreendimentos e Participações Ltda, which is fully integratedinto BI&P activities and working together with the sales team to identifynew business opportunities.IDVL4: R$7.24 per shareClosing: May 14, 2013Outstanding Shares: 62,371,178Market Cap: R$451.6 millionPrice/Book Value: 0.91Conference Call / WebcastsMay 15, 2013In English11 a.m. (US EST) / 12 p.m. (Brasília)ConnectionsBrazil: +55 11 4688-6361USA: +1 786 924-6977Code: BI&PIn Portuguese10 a.m. (US EST) / 11 a.m. (Brasília)Number: +55 11 4688-6361Code: BI&PWebsitewww.bip.b.br/ir
  • 2. 2/20SummaryMessage from the Management .............................................................................................3Macroeconomic Environment .................................................................................................4Key Indicators .....................................................................................................................5Operating Performance .........................................................................................................6Credit Portfolio ....................................................................................................................9Funding ............................................................................................................................ 14Free Cash ......................................................................................................................... 15Capital Adequacy ............................................................................................................... 15Risk Ratings ...................................................................................................................... 15Capital Markets.................................................................................................................. 16Balance Sheet ................................................................................................................... 18Income Statement ............................................................................................................ 20
  • 3. 3/20Message from ManagementSince April 2011, we have been working on broadly restructuring Banco BI&P, on expanding our operations, onreviewing the credit granting criteria, on expanding the product offering and on strengthening the teams. Thisrestructuring was concluded in the first quarter of 2013 and the most significant changes are: New Vision and new management team, with a team of renowned professionals; New sales team: around 80% of the team was renewed, with the entry of professionals better qualified forour multiple product offering; Repositioning of our target market to focus on bigger companies with lower risk; New lending criteria, with more conservative risk and diversification criteria; Reconstruction of the expanded credit portfolio within the new parameters, and portfolio growth of 52.8%since March 2011; Expansion of the product and service offering for the purpose of cross selling to the customer base; Structuring of the derivatives and agricultural bonds desk and an active treasury area in all the markets; Investment banking team from Voga and fixed income structuring and distribution team already integratedwith the Bank’s operations, working jointly with the sales team to identify new business opportunities; Broadening of the funding mix, with diversification of funding sources and reduction of funding cost.In addition to all the efforts and investments made in processes and technology, we have worked in building ahighly qualified team that is aligned with our values. During this period, we conducted organizational climatesurveys, 360-degree feedback, force curve analysis, and constant training programs. We also placed emphasis onthe trainee and intern program since we believe that by laying a solid foundation will we become a sustainablebank in the long run.To conclude this first cycle and to ensure that the future results of the Bank do not get tainted forloan losses, in 1Q13 we decided to strengthen the allowance for loan losses (ALL). Of the total ALLexpenses of R$133.4 million in this quarter, R$126.5 million pertain exclusively to the loans originated beforeApril 2011, of which R$110.7 million are the additional provisions. With this, we substantially improved coveragefor loans classified between D and H, which increased from 47.3% in December 2012 to 96.4% in March 2013,reflecting a more conservative approach by the current management. As a result of this allowance, we recordeda loss of R$91.4 million in the quarter.At the same time, to maintain shareholders equity at the same level as at the end of 2012, weannounced on this date a capital increase of up to R$92 million, of which the private equity fundWarburg Pincus and the controlling shareholders have already committed to subscribe R$82 million, whichunderlines the confidence of all the parties in laying the solid foundation for a differentiated bank in the market.Had this capital increase taken place at the end of March 2013, it would have raised our Basel Index from thecurrent 14.2% to 16.8%.And why create an additional provision now? As mentioned already, this quarter we concluded the whole processof building a new BI&P, with the most recent step being the acquisition of Voga and the arrival of a stronginvestment banking team. With this reinforcement to our allowance, we plan to eliminate possible problems fromthe past that could impact our future results. Our focus now is to gain scale in terms of assets and accelerate thegeneration of fee revenue in order to deliver an adequate result for our shareholders.
  • 4. 4/20Macroeconomic ScenarioDespite the recent volatility of economic data - with strong growth in January and a slowdown in February - theBrazilian economy is showing more consistent signs of recovery in the first quarter, especially in terms ofinvestments. The country’s GDP will probably show that the economy grew at the best pace since 2010, withindustry recovering. Another sector worthy of highlighting is agriculture which, in the first quarter, did not sufferfrom the unusual climatic conditions such as in the beginning of 2012 in south Brazil and should register a newgain production record during the harvest in the first half of this year.In a scenario of improved economic data and continuously high inflation, the Central Bank of Brazil started amonetary tightening cycle, yet maintained a cautious approach on account of the deep uncertainties surroundingthe global economy, notably the weak economic growth in Europe and the recent slowdown of the Chineseeconomy, indicating that the increase in interest rates should be less intense.In the foreign exchange market, the higher volatility seen at the end of 2012 continued in the beginning of thisyear and the Central Bank once again intervened by using exchange derivatives several times during the quarterto maintain the exchange rate within the range of R$1.95 and R$2.05. These interventions make it clear that theCentral Bank wants to avoid inflationary pressures resulting from the devaluation of the Real as it happened in2012.Credit volume in the national financial system grew 2.5% in the quarter to reach R$2.43 trillion. Credit volume in12 months increased by 17%, with the average loan term increasing to 75 months in March 2012 to 86 monthsin the first quarter of 2013. As a percentage of GDP, credit volume increased from 53.8% in the fourth quarter of2012 to 53.9% in March 2013, well above the 49.3% in the same period last year.Default in the individuals segment dropped from 8.0% in the last quarter of 2012 to 7.6% now, while corporatedefault remained practically stable at 3.6%. The slight improvement in default indicators is in line with the moreselective approach to lending adopted by banks and the gradual improvement of the economy, which has keptunemployment rates at close to historic lows.Macroeconomic Data 1Q13 4Q12 1Q12 2013eReal GBP Growth (Q/Previous Q) 1.0%(e) 0.6% 0.1% 2.9%Inflation (IPCA - IBGE) – quarterly change 1.94% 1.99% 1.22% 6.00%Inflation (IPCA - IBGE) – annual change 6.59% 5.84% 5.24% 6.00%FX (US$/R$) – quarterly change -1.45% 0.64% -2.86% 5.50%Interest Rate (Selic) 7.25% 7.25% 9.75% 8.50%e= expectation
  • 5. 5/20Key IndicatorsThe financial and operating information presented in this report are based on consolidated financials prepared inmillions of Real (local currency), according to Brazilian GAAP (BRGAAP), except were otherwise stated.Results 1Q13 4Q12 1Q13/4Q12 1Q12 1Q13/1Q12Result from Financial Int. before ALL adjusted 144.8 44.3 1.2% 51.6 -13.1%Effects of hedge accounting and discounts 1(22.1) 4.3 -618.9% (0.7) n.c.Result from Financial Int. before ALL 22.8 48.5 -53.1% 50.8 -55.2%ALL Expenses 2(133.4) (7.9) 1598.1% (14.4) 826.4%Result from Financial Intermediation (110.6) 40.7 -371.9% 36.4 -403.7%Net Operating Expenses (33.9) (33.8) 0.2% (27.2) 24.8%Operating Result (144.5) 6.9 n.c. 9.3 n.c.Net Profit (Loss) (91.4) 3.6 n.c. 5.0 n.c.Assets & Liabilities 1Q13 4Q12 1Q13/4Q12 1Q12 1Q13/1Q12Loan Portfolio 2,522.7 2,624.3 -3.9% 2,385.6 5.7%Expanded Loan Portfolio 33,047.5 3,067.9 -0.7% 2,759.1 10.5%Cash & Short Term Investments 611.3 447.8 36.5% 642.3 -4.8%Securities and Derivatives 769.7 731.3 5.2% 1,309.8 -41.2%Securities excl. Agro Sec. & Private Credit Bonds 4417.4 445.9 -6.4% 1,100.1 -62.1%Total Assets 4,259.1 4,022.0 5.9% 4,583.0 -7.1%Total Deposits 2,451.3 2,274.6 7.8% 2,087.8 17.4%Open Market 193.2 241.9 -20.1% 1,058.4 -81.7%Foreign Borrowings 396.4 388.6 2.0% 407.8 -2.8%Domestic Onlending 322.1 335.5 -4.0% 240.2 34.1%Shareholders’ Equity 498.4 587.2 -15.1% 590.5 -15.6%Performance 1Q13 4Q12 1Q13/4Q12 1Q12 1Q13/1Q12Free Cash 760.1 571.1 33.1% 643.6 18.1%NPL 60 days/ Loan portfolio 2.3% 1.5% 0.8 p.p. 3.2% -0.8 p.p.NPL 90 days/ Loan portfolio 2.2% 1.2% 1.0 p.p. 2.7% -0.6 p.p.Basel Index 414.2% 14.9% -0.7 p.p. 17.5% -3.4 p.p.ROAE -52.2% 2.5% -54.7 p.p. 3.5% -55.7 p.p.Adjusted Net Interest Margin (NIMa) 55.4% 5.2% 0.2 p.p. 6,7% -1.3 p.p.Efficiency Ratio 155.3% 78.4% 76.8 p.p. 67.6% 87.7 p.p.Other Information 1Q13 4Q12 1Q13/4Q12 1Q12 1Q13/1Q12Number of Corporate Clients 811 851 -4.7% 775 4.6%Number of Employees 449 436 3.0% 426 5.4%BI&P Employees 397 401 -1.0% 394 0.8%Brokerage house and Serglobal Employees 52 35 48.6% 32 62.5%Details in the respective sections of this report:1Excluding (i) effects of the discontinuance of the treatment of hedge accounting, adopted in 2Q12, for booking hedges of cash flows, whichcontinue to be protected by hedge, and (ii) discounts granted in operations renegotiated in the period. More details in the Profitability sectionof this report.2Including additional provisions.3Including Guarantees issued, Private Credit Bonds (PNs and Debentures) and agro securities (CDCA, CDA/WA and CPR).4Excluding Agro Securities (CPRs and CDA/WA) and Private Credit Bonds (PNs and debentures).5Excluding (i) repos with equivalent volumes, tenors and rates both in assets, and (ii) effects of the discontinuance of the treatment of hedgeaccounting, and also discounts granted in operations renegotiated in the period.n.c. = not comparable
  • 6. 6/20Operating PerformanceFinancial Intermediation Resultbefore Allowance for Loan LossesNet ProfitExpanded Credit Portfolio FundingProfitabilityFinancial Intermediation 1Q13 4Q12 1Q13/4Q12 1Q12 1Q13/1Q12Financial Intermediation Revenues 87.6 123.7 -29.2% 161.8 -45.9%Credit Operations 56.0 62.3 -10.2% 70.2 -20.3%Loans & Discounts Receivables 44.8 46.9 -4.3% 62.9 -28.7%Financing 6.8 7.5 -9.2% 6.4 7.4%Other 4.3 8.0 -45.8% 0.9 354.7%Securities 19.6 28.6 -31.4% 68.6 -71.4%Derivative Financial Instruments 2.0 15.6 -87.4% (3.7) 152.3%FX Operations Result 10.0 17.2 -41.7% 26.7 -62.5%Financial Intermediation Expenses 64.8 75.2 -13.8% 111.0 -41.6%Money Market Funding 53.2 56.4 -5.7% 85.3 -37.6%Time Deposits 40.8 40.0 2.1% 45.2 -9.8%Repurchase Transactions 4.6 8.4 -45.2% 30.5 -84.9%Interbank Deposits 1.3 1.6 -19.9% 3.1 -59.8%Agro Notes (LCA), Real Estate Notes (LCI) & Bank Notes (LF) 6.5 6.5 0.5% 6.4 1.6%Loans, Assignments & Onlending 11.6 18.8 -38.0% 25.6 -54.6%Foreign Borrowings 6.9 14.5 -52.7% 22.2 -69.1%Domestic Borrowings & Onlending 4.8 4.3 11.9% 3.5 37.9%Gross Result from Financial Intermediation before ALL 22.8 48.5 -53.1% 50.8 -55.2%Allowance for Loan Losses (ALL) (133.4) (7.9) 1598.1% (14.4) 826.4%Gross Result from Financial Intermediation (110.6) 40.7 n.c. 36.4 n.c.50,859,648,4 48,522,851,643,3 45,6 44,3 44,81Q12 2Q12 3Q12 4Q12 1Q13R$millionFinancial Intermediation Result before ALLFinancial Intermediation Result before ALL adjusted5,02,4 3,1 3,61Q12 2Q12 3Q12 4Q12 1Q13R$million2,8 2,8 3,0 3,1 3,01Q12 2Q12 3Q12 4Q12 1Q13R$billionPrivate Credit Bonds (PNs and Debentures)Agro Bonds (CPR, CDA/WA and CDCA)Guarantees IssuedTrade FinanceLoans & Financing in Reais2,7 2,8 2,9 3,0 3,21Q12 2Q12 3Q12 4Q12 1Q13R$billiontotal Trade Finance & Foreign BorrowingsDomestic Onlending Interbank & Demand DepositsAgro Bonds, Bank and Real Estate Notes Insured Time Deposits-91.410.5% 15.8%
  • 7. 7/20In 1Q13, the Result from Financial Intermediation before Expenses with Allowance for Loan Losses totaledR$22.8 million, down 53.1% from 4Q12 and 55.2% from 1Q12. This result was especially impacted: (i) in theitem Derivative Financial Instruments, by the effect of discontinuance of the designation of hedge accounting,adopted in 2Q12, of operations to protect the cash flow, which continue to be protected by hedge operations;and (ii) in the item Loan Operations, by the discounts granted in operations renegotiated during the period.Excluding the impact of the discontinuance of hedge accounting and the discounts given on renegotiations toenable correct comparison between the quarters, the Result from Financial Intermediation before Expenses withAllowance for Loan Losses would be R$44.8 million, up 1.2% in the quarter and down 13.1% from 1Q12, asshown below:Financial Interm. Result before ALL w/o effects of hedgeaccounting and discounts granted in operations renegotiated1Q13 4Q12 1Q13/4Q12 1Q12 1Q13/1Q12A. Result from Financial Int. before ALL 22.8 48.5 -53.1% 50.8 -55.2%B. Effect of discontinuance of the designation of hedge accounting (15.6) 6.2 -350.3% - n.m.C. Discounts granted in operations renegotiated (6.5) (2.0) 228.6% (0.7) 771.3%Adjusted Result from Financial Int. before ALL (A-B-C) 44.8 44.3 1.2% 51.6 -13.1%n.m. = not measurableRevenue from Credit Operations decreased (ROC) decreased from R$62.3 million in 4Q12 to R$56.0 million in1Q13, basically due to the discounts granted on loans renegotiated during the period (R$6.5 million). Excludingthis amount, for correct comparison of the ROCs, the same remained practically stable, despite the fewerbusiness days in the period.Income from Securities, which includes the results from the treasury’s proprietary position and CPR, CDA/WA anddebentures, with offset in funding expenses, decreased significantly during the period in proportion to thesignificant reduction in the positions in the quarter.The Result from Derivative Financial Instruments includes results from operations involving swaps, forwards,futures and options used to hedge against exchange and interest rate exposure for funding operations indexedto the inflation indexes, as well as foreign borrowings (non-trade related), hedging of commodity prices resultingfrom CPR operations and indexers of federal government bonds held in the securities portfolio, in addition to theproprietary position. The decrease in this item in the quarter is mainly due to the effect of discontinuance of thedesignation of hedge accounting in 2Q12 of operations to protect cash flow from funding indexed to inflationindexes IPCA and IGPM and foreign borrowings, with exposure to the risk of variation in interest and foreignexchange rates, as detailed in notes 3(d) and 5(c) of the financial statements. Since then, the mark to market ofthe hedge operations, which continue to protect these cash flows, was no longer booked in shareholders equitybut in the income statement. The result of this in 1Q13 was a loss of R$15.8 million.Income from Foreign Exchange Transactions and expenses with Foreign Borrowings were especially impacted bythe drop in demand from customers and the decline in spreads on these operations.As for Expenses with Time Deposits, the increase of 2.1% in the quarter is in line with the 1.1% increase in theaverage balance of Time Deposits in these periods (R$1,703.1 million in 1Q13 and R$1.684,9 million in 4Q12)and the decrease of 9.8% in 12 months refers, in particular, to the fall of the benchmark interest rate. Similar tothese expenses, Expenses with Interbank Deposits and Agribusiness Letters of Credit, Real Estate Notes andBank Notes are also related to the average balances in the periods being compared.Note that the Result from Financial Intermediation in 1Q13 was strongly impacted by expenses with allowancefor loan losses amounting to R$133.4 million. In the first quarter, as a prudential measure in light of a few loansthat are in the credit exit phase and which have longer terms, we set aside an additional allowance of R$110.7million. With this, we strengthened our balance sheet for a possible deterioration of these loans, pertaining tocustomers acquired before 2011, increasing the coverage of loans classified between D and H (ALL/Loans D-H)from 47.3% at the end of December 2012 to 96.4% at the end of March 2013.
  • 8. 8/20Net Interest Margin (NIM)Adjusted net interest margin was 2.7% in 1Q13, down 3.1 p.p. in the quarter and 3.9 p.p. from 1Q12.Net Interest Margin 1Q13 4Q12 1Q13/4Q12 1Q12 1Q13/1Q12A. Result from Financial Interm. before ALL 22.8 48.5 -53.1% 50.8 -55.2%B. Average Interest bearing Assets 3,603.6 3,891.0 -7.4% 4,234.5 -14.9%Adjustment for non-remunerated average assets 1(229.2) (505.2) -54.6% (1,096.9) -79.1%B.a Adj. Average Interest bearing Assets 3,374.4 3,385.8 -0.3% 3,137.6 7.5%Adjusted Net Interest Margin (NIMa) (Aa/Ba) 2.7% 5.9% -3.1 p.p. 6.6% -3.9 p.p.1Repos with equivalent volumes, tenors and rates both in assets and liabilities.As described in the section on Profitability, considering the effects on the Result from Financial Intermediationfrom the discontinuance of the designation of hedge accounting and discounts granted during renegotiations, of-R$15.8 million and R$6.5 million, respectively, in the quarter, NIM would increase to 5.4% in 1Q13, as thefollowing table shows:Net Interest Margin w/o effects of hedge accountingand discounts granted in operations renegotiated1Q13 4Q12 1Q13/4Q12 1Q12 1Q13/1Q12A. Result from Financial Interm. before ALL 45.0 43.1 4.3% 51.6 -12.7%B. Average Interest bearing Assets 3,603.6 3,891.0 -7.4% 4,234.5 -14.9%Adjustment for non-remunerated average assets 1(229.2) (505.2) -54.6% (1,096.9) -79.1%B.a Adjusted Average Interest bearing Assets 3,374.4 3.385,8 -0.3% 3,137.6 7.5%Adjusted Net Interest Margin (NIMa) (Aa/Ba) 25.4% 5.2% 0.2 p.p. 6,7% -1.3 p.p.1Repos with equivalent volumes, tenors and rates both in assets and liabilities2Excluding (i) effects of the discontinuance of the treatment of hedge accounting, adopted in 2Q12, for booking hedges of cash flows, whichcontinue to be protected by hedge, and (ii) discounts granted in operations renegotiated in the period.EfficiencyThe efficiency ratio was 115.3% in 1Q13, -76.8 p.p. in the quarter and -87.7 p.p. when compared to 1Q12.Efficiency Ratio 1Q13 4Q12 1Q13/4Q12 1Q12 1Q13/1Q12Personnel Expenses 26.4 23.7 11.3% 22.7 16.0%Contributions and Profit-sharing 5.4 1.8 196.6% 2.1 153.9%Administrative Expenses 13.4 13.3 0.3% 13.1 1.9%Taxes 3.6 4.3 -16.8% 3.7 -2.8%A- Total Operating Expenses 48.8 43.2 12.9% 41.7 17.0%Gross Income Financial Intermediation (w/o ALL) 22.8 48.5 -53.1% 50.8 -55.2%Income from Services Rendered 6.5 6.7 -4.4% 6.6 -2.1%Income from Banking Tariffs 0.2 0.2 -10.9% 0.2 -13.6%Other Net Operating Income (*) 2.0 (0.4) n.c. 4.1 -49.9%B- Total Operating Income 31.4 55.1 -43.0% 61.7 -49.1%Efficiency Ratio (A/B) 155.3% 78.4% 76.8 p.p. 67.6% 87.7 p.p.(*) Net of other Operating Expenses to offset the cost of acquisition and income on sale of commodities in the activity of Serglobal Cereais.Net ProfitThe operating income of -R$144,5 million in 1Q13, after (i) the non-operating loss from the sale of properties andnon-operating assets of the R$669 thousand, (ii) taxes and contributions of the R$59,2 million, and (iii) profitsharing of the R$5,4 million, resulted in a loss of R$91.4 million.
  • 9. 9/20Credit PortfolioExpanded Credit PortfolioThe Expanded Credit Portfolio remained practically stable in the quarter but grew 10.5% in 12 months. TheExpanded Credit Portfolio includes loan and financing operations in Brazilian Real and trade finance operations,both detailed in note 6(a) to the financial statements, as well as: (i) guarantees issued (sureties, guarantees andletters of credit), (ii) agribusiness bonds originated from the absorption of the operations of Serglobal Cereais(CPR and CDA/WA); and (iii) private credit bonds (promissory notes and debentures). Items (ii) and (ii) wereboth booked under Securities as per Central Bank regulations.Expanded Credit Portfolio by Product Group 1Q13 4Q12 1Q13/4Q12 1Q12 1Q13/1Q12Loans & Financing in Real 2,019.8 2,080.6 -2.9% 1,861.3 8.5%Trade Finance (ACC/ACE/IMPFIN) 415.4 426.0 -2.5% 442.8 -6.2%Guarantees Issued (LGs & L/Cs) 172.5 158.2 9.0% 163.8 5.3%Agro Bonds (Securities: CPRs & CDA/WA; Credit: CDCAs) 370.9 327.1 13.4% 229.7 61.5%Private Credit Bonds (Securities: PNs & Debentures) 41.1 40.1 2.5% 25.5 60.9%Other 27.8 35.9 -22.5% 35.9 -22.5%TOTAL 3,047.5 3,067.9 -0.7% 2,759.1 10.5%The Middle Market segment comprises customers withannual revenue between R$40 million and R$400 millionand Corporate segment includes companies with annualrevenue between R$400 million and R$2 billion. TheOther segment basically refers to Consumer Creditoperations for Used Vehicles and financing of non-operating assets.Loans and financing operations in Real, which include loans, bills discounted, acquisition of client receivables andBNDES onlendings, represented 66.3% of the Expanded Credit Portfolio. The highest growth was in loans anddiscounted receivables, up 10.2% in 12 month and down 2.6% in the quarter, and BNDES onlending, up 38.2%in 12 months and down 4.8% in the quarter.Trade Finance operations correspond to 13.6% of the Expanded Credit Portfolio and include import financing,which account for 27.5% of Trade Finance operations, and export financing, which account for 72.5%. Thoughwe maintained our credit lines with foreign banks, the Trade Finance portfolio was negatively impacted, mainlydue to the adverse external scenario.Guarantees issued (sureties, guarantees and import letters of credit) correspond to 5.7% of the Expanded CreditPortfolio, up 9.0% from 4Q12 and 5.3% from 1Q12. This growth reflects the higher share of Corporate segmentcustomers since these operations have greater demand in this segment.Though the portfolio of agribusiness bonds and private credit bonds represent credit exposure, it is classifiedunder “held for sale” marketable securities in the balance sheet, in accordance with Brazilian Central Bankregulations due to its tradability, and has been growing consistently in recent quarters. The private bondsportfolio grew 2.5% in the quarter and 60.9% in 12 months.51% 51% 42% 39% 47%48% 48% 56% 59% 51%2% 2% 2% 2% 1%1Q12 2Q12 3Q12 4Q12 1Q13Expanded Credit PorfolioMiddle Market Corporate Others
  • 10. 10/20The agribusiness bonds portfolio continues to increase its share of the Expanded Credit Portfolio, accounting for12.2% in 1Q13.Agro Bonds Portfolio 1Q13 4Q12 1Q13/4Q12 1Q12 1Q13/1Q12Booked under Securities 311.2 245.3 26.9% 184.1 69.0%Warrants - CDA/WA 7.1 8.0 -10.6% 7.2 -1.8%Agro Product Certificate - CPR 304.1 237.4 28.1% 176.9 71.9%Booked under Credit Portfolio - Loans & Financing 59.7 81.8 -27.0% 45.6 31.1%Agro Credit Rights Certificate - CDCA 59.7 81.8 -27.0% 45.6 31.1%AGRICULTURAL BONDS 370.9 327.1 13.4% 229.7 61.5%Our Expanded Credit Portfolio breakdown is as follows:By Economic Activity By Region By Customer SegmentBy Economic Sector By ProductIndustry49%Commerce28%OtherServices20%Individuals2%FinancialInstitution1%North1%Northeast2%South19%Midwest21%Southeast57%Corporate52%MiddleMarket47%Others1%7,0%1,0%1,4%1,6%1,7%1,7%1,8%2,5%2,9%3,0%3,0%3,0%3,1%3,3%3,9%4,2%5,7%13,0%13,4%22,8%Other sectors (% lower than 1%)IndividualsFinancial institutionsPower Generation & DistributionMachinery and EquipmentsElectronicsFinancial ServicesEducationAdvertising & PublishingCommerce - Retail & WholesaleOil & BiofuelMetal IndustryTextile, apparel & LeatherPulp & PaperChemical & PharmaceuticalTransportation & LogisticsAutomotiveConstructionFood & BeverageAgribusinessLoans &Discounts56%BNDESOnlending10%TradeFinance14%Agro Bonds12% GuaranteesIssued6%Debentures1%Other1%
  • 11. 11/20Credit PorfolioThe “classic” credit portfolio, which excludes guarantees issued and credits classified under “held for sale”marketable securities, totaled R$2.5 billion at the end of March 2013, in which Operations in Real accounted forR$2.1 billion while Trade Finance operations totaled R$415.4 million.This quarter, the portfolio was more evenly balanced between the Middle Market and Corporate segments: theMiddle Market segment accounted for 49.0% of the credit portfolio (42.0% in December 2012) and theCorporate segment for 49.6% (56.4% in December 2012). Other loans, classified as Other, include the balanceof the direct consumer credit - used vehicles (CDC) portfolio, portfolios acquired from other banks and financingof non-operating assets, and corresponded to 1.4% of the portfolio (1.6% in December 2012).Credit Portfolio By Client Segment 1Q13 4Q12 1Q13/4Q12 1Q12 1Q13/1Q12Middle Market 1,237.1 1,101.9 12.3% 1,500.8 -17.6%Local Currency - Real 1,072.6 882.0 21.6% 1,211.3 -11.4%Loans & Discounted Receivables 913.7 737.4 23.9% 1,051.7 -13.1%Financing 0.0 0.0 n.m. 0.0 n.m.BNDES / FINAME Onlending 158.9 144.7 9.9% 159.6 -0.4%Foreign Currency 164.5 219.9 -25.2% 289.6 -43.2%Corporate 1,251.0 1,479.8 -15.5% 830.6 50.6%Local Currency - Real 1,000.0 1,273.7 -21.5% 677.3 47.6%Loans & Discounted Receivables 839.6 1,083.0 -22.5% 518.8 61.9%BNDES / FINAME Onlending 160.4 190.7 -15.9% 71.5 124.5%Acquired Receivables 0.0 0.0 n.m. 87.1 -100.0%Foreign Currency 250.9 206.1 21.7% 153.3 63.7%Other 34.7 42.6 -18.6% 54.2 -36.0%Consumer Credit – used vehicles 0.3 0.6 -45.7% 3.0 -89.8%Acquired Loans & Financing 4.9 6.7 -26.5% 18.3 -73.0%Non-Operating Asset Sales Financing 29.4 35.3 -16.6% 32.9 -10.5%CREDIT PORTFOLIO 2,522.7 2,624.3 -3.9% 2,385.6 5.7%By Collateral By Customer Concentration By MaturityAval PN50%Receivables25%Pledge /Lien9%Property8%MonitoredPledge5%Vehicles2%Securities1%10 largest16%11 - 6032%61 - 18027%Other25%Up 90days36%91 to 180days19%181 to 360days16%+360 days29%
  • 12. 12/20Quality of Credit PorfolioRating AA A B C D E F G HComp. TOTALALL/LoanPort.%Required Provision % 0% 0,5% 1% 3% 10% 30% 50% 70% 100%1Q13Outstanding Loans 43.9 1,020.3 908.3 321.9 49.0 108.2 42.8 4.5 23.7 - 2,522.78.7%ALL 0.0 5.1 9.1 9.7 4.9 32.5 21.4 3.1 23.7 110.7 220.24Q12Outstanding Loans 53.4 1,103.2 919.8 344.7 65.0 82.2 27.1 8.5 20.4 - 2,624.33.7%ALL 0.0 5.5 9.2 10.3 6.5 24.7 13.6 6.0 20.4 0.0 96.11Q12Outstanding Loans 94.9 921.4 776.9 397.8 38.8 97.8 19.9 11.7 26.4 - 2,385.64.3%ALL 0.0 4.6 7.8 11.9 3.9 29.4 10.0 8.2 26.4 0.0 102.0During the quarter, we maintained the percentage of loans classified between AA and B high, at 97.8%, thusmaintaining the quality of the credit portfolio. The balance of loans classified in the low risk categories (AA to B)accounted for 78.2% of the loan operations in the quarter (79.1% and 75.2%, respectively, at the end of 4Q12and 1Q12), as the following chart shows:Of the R$228.3 million classified between D and H (R$203.2 million in December 2012 and R$194.6 million inMarch 2012), R$169.1 million correspond to loans whose payments are regular, equivalent to 74% of the total(81% in December 2012 and 61% in March 2012). The remaining 26% correspond to overdue loans and aredetailed below:Default by segment 1Q13 4Q12> 60 days > 90 days1Q13 4Q12 1Q13 4Q12Credit Portfolio NPL %T NPL %T NPL %T NPL %TMiddle Market 1,237.1 1,101.9 45.9 3.7% 37.9 3.4% 44.8 3.6% 30.9 2.8%Corporate 1,251.0 1,479.8 5.5 0.4% 1.5 0.1% 1.9 0.2% - 0.0%Others 34.7 42.6 7.7 22.3% 0.2 0.5% 7.6 21.9% 0.2 0.5%TOTAL 2,522.7 2,624.3 59.2 2.3% 39.6 1.5% 54.3 2.2% 31.1 1.2%Allowance Loan Losses (ALL) 220.2 96.1ALL / NPL - 372.2% 242.7% 405.1% 309.3%ALL / Loan Portfolio 8.7% 3.7% - - - -The default rate on loans overdue by more than 60 days (NPL 60 days) dropped 0.8 p.p. in 12 months butincreased by 0.8 p.p. from the previous quarter, while loans overdue by more than 90 days (NPL 90 days)increased by 1.0 p.p. in the quarter but declined 0.6 p.p. in relation to March 2012, reflecting the improvingquality of our credit portfolio in the past 12 months.The improvement in the NPL indicators in the 12-month comparison reflects the strategy adopted in 2011 ofenhancing the credit portfolio with better quality loans; on the other hand, the worsening of the indicators in the4%2%2%39%42%40%33%35%36%17%13%13%8%8%9%1Q124Q121Q13AA A B C D - H78.2%79.1%75.2%
  • 13. 13/20quarter basically reflects the performance of older customers, that is, those acquired before 2011, for whom theadditional allowance mentioned earlier was created.A comparison of the performance of the older portfolio (customers acquired before 2011) with that of the newportfolio shows the better quality of the customers acquired under the new lending policy, as the table shows:ALL/Credit Portfolio Ratio 1Q13ALL/Credit Portfolio 8.7%Clients acquired after April 2011 1.7%Middle Market 2.7%Corporate 1.1%Clients acquired before April 2011 8.2%Clients acquired after April 2011 including additional ALL 18.8%Allowance for loan losses totaled R$220.2 million, providing coverage of 3.7x the balance of NPL 60 days, and of4.1x the balance of NPL 90 days, mainly impacted, as mentioned earlier, by the additional provision of R$110.7million for customers in the portfolio prior to April 2011.Note that the potential default rate (ratio of installments overdue by between 15 and 60 days to the total creditportfolio) was 0.2% in March 2013, a significant improvement of 0.6 p.p. in the quarter and of 0.4 p.p. in 12months. During the quarter, R$9.3 million (R$15.3 million in 4Q12 and R$55.1 million in 1Q12) in loanoperations, already fully provisioned, were written off as losses.
  • 14. 14/20FundingFunding totaled R$3.2 billion at the end of March 2013, increasing 5.7% in the quarter and 15.9% in 12 months.Time deposits through the issue of Bank Deposit Certificates (CDB) and Time Deposits with Special Guarantee(DPGE I) are the main sources, accounting for 25.8% and 29.4%, respectively, of total funding. Funding throughagribusiness letters of credit (LCA), which increased 30% in the quarter and 63.9% in the year, Real EstateLetters of Credit (LCI), which began in the second half of 2012, and Bank Notes (LF) correspond, all together, to16.7% of the total funding balance, contributing to more balanced funding costs and diversification of ourproduct offering.Funding in foreign currency is especially allocated to Trade Finance operations and its balance is impacted byforeign exchange variations.Total Funding 1Q13 4Q12 1Q13/4Q12 1Q12 1Q13/1Q12Total Deposits 2,451.3 2,274.6 7.8% 2,087.8 17.4%Time Deposits 818.1 707.0 15.7% 816.2 0.2%Insured Time Deposits (DPGE) 931.8 1,007.4 -7.5% 799.7 16.5%Agro Notes (LCA) 473.7 364.4 30.0% 288.9 63.9%Bank Notes (LF) 33.1 29.5 12.1% 7.6 337.2%Real Estate Notes (LCI) 23.9 12.1 96.9% 0.0 n.m.Interbank Deposits 91.4 98.0 -6.7% 127.4 -28.3%Demand Deposits and Other 79.3 56.1 41.2% 48.0 65.3%Domestic Onlending 322.1 335.5 -4.0% 240.2 34.1%Foreign Borrowings 396.4 388.6 2.0% 407.8 -2.8%Trade Finance 345.9 337.4 2.5% 362.3 -4.5%Other Foreign Borrowings 50.5 51.2 -1.3% 45.4 11.2%TOTAL 3,169.7 2,998.7 5.7% 2,735.7 15.9%By Type By Investor By MaturityThe average term of deposits stood at 745 days from issuance (800 days in December 2012) and 391 days frommaturity (430 days in December 2012).Average Term in daysType of Deposit from issuance to maturity 1Time Deposits 476 310Interbank 100 47Time Deposits Special Guarantee (DPGE) 1,369 661Agro Notes (LCA) 115 67Bank Notes (LF) 891 602Real Estate Notes (LCI) 169 104Portfolio of Deposits 2745 3911From March 31, 2013. | 2Volume weighted average.TimeDeposit26%InsuredTime Dep.(DPGE)29%AgroBonds15%Bank andReal EstateNotes2%Onlendings10%TradeFinance11%ForeignLoans2%Interbank3%Demand2%InstitutionalInvestors42%Corporates15%Individuals6%NationalBanks8%Brokers3%Other4%BNDES10%ForeignBanks12%Demand2%up 90days34%90 to 180days12%180 to360 days13%+360days39%
  • 15. 15/20Free CashOn March 31, 2013, the free cash position totaled R$760.1 million,equivalent to 31% of total deposits and 1.5x shareholders’ equity. Thecalculation considers cash, short-term interbank investments and securitiesless funds raised in the open market and debt securities classified undermarketable securities, comprising rural product certificates (CPRs),agribusiness deposit certificates and warrants (CDAs/WAs), debentures andpromissory notes (NPs).Capital AdequacyThe Basel Accord requires banks to maintain a minimum percentage of the capital weighted by the risk in theiroperations. In this context, the Central Bank of Brazil has stipulated that banks operating in the country shouldmaintain a minimum percentage of 11%, calculated according to the Basel II Accord regulations, which providesgreater security to Brazil’s financial system against oscillations in economic conditions.In line with the best risk management practices, the BI&P bank has been taking steps to implement the Basel IIIrequirements. Thus, the Basel Index in the first quarter was impacted by the new criteria for weighting riskaccording to the size of corporate customers.The following table shows BI&P’s position in relation to the Central Bank’s minimum capital requirements:Basel Index1Q13 1Q13* 4Q12 1Q13/4Q12 1Q12 1Q13/1Q12Total Capital 485.3 577,3 583.3 -16.8% 588.1 -17.5%Tier I 486.3 578,3 584.3 -16.8% 576.6 -15.7%Tier II 1.3 1,3 1.3 -0.9% 14.0 -90.5%Deductions (2.3) (2,3) (2.3) 0.0% (2.4) -4.8%Required Capital 376.8 376,8 430.3 -12.4% 369.1 2.1%Credit Risk allocation 329.0 329,0 372.9 -11.8% 326.8 0.7%Market Risk Allocation 29.9 29,9 38.2 -21.7% 22.1 35.2%Operating Risk Allocation 17.9 17,9 19.7 -9.2% 20.2 -11.4%Excess over Required Capital 108.5 200,5 153.1 -29.1% 219.0 -50.5%Basel Index 14.2% 16,8% 14.9% -0.7 p.p. 17.5% -3.4 p.p.* Simulation of the Basel Index if the capital increase of R$92 million occurred in March 31, 2013.Risk RatingsAgency Classification ObservationLastReportFinancialDataStandard & Poor’sBB/ Negative/ BbrA+/ Negative/ brA-1Global ScaleLocal Scale - BrazilMar. 13, 2013 Dec 31, 2012MoodysBa3/ Stable/ Not PrimeA2.br/ Stable/ BR-2Global ScaleLocal Scale - BrazilFeb. 14, 2013 Sept 30, 2012FitchRatings BBB/ Stable/ F3 Local Scale - Brazil Nov. 12, 2012 Sept. 30, 2012RiskBank10,38Ranking: 41Riskbank IndexLow Risk Short TermApr. 12, 2013 Dec 31, 2012644 5717601Q12 4Q12 1T13R$million
  • 16. 16/20Capital MarketTotal Shares and Free FloatNumber of shares as of March 31,2013TypeCorporateCapitalControllingGroupManagement Treasury Free Float %Common 36,945,649 20,743,333 277,307 - 15,925,009 43.1%Preferred 26,160,044 619,026 60,125 734,515 24,746,378 94.6%TOTAL 63,105,693 21,362,359 337,432 734,515 40,671,387 64.4%Share Buyback ProgramThe following Stock Option Plans, approved for the Company’s executive officers and managers, as well asindividuals who provide services to the Company or its subsidiaries, had the following balances on March 31,2013:QuantityStockOptionPlanDate ofApprovalGrace PeriodTerm forExerciseGranted Exercised Extinct Not ExercisedI 03.26.2008 Three years Five years 2,039,944 37,938 215,967 1,786,039II 04.29.2011 Three years Five years 1,840,584 - 326,048 1,514,536III 04.29.2011 Five years Seven years 1,850,786 - - 1,850,786IV 04.24.2012 Up to five years Five years 605,541 - 14,745 590,7966,336,855 37,938 556,760 5,742,157The aforementioned Stock Options Plans are filed in the IPE system of the Securities and Exchange Commissionof Brazil (CVM) and are also available in the Company’s IR website.Remuneration to ShareholderIn the first quarter of 2013, the Bank neither provisioned nor paid interest on equity, calculated based on theLong-Term Interest Rate (TJLP) and calculated towards the minimum dividend for fiscal year 2013. The Board ofDirectors will, by the end of the year, study the possibility of early payment of interest on equity afterconsidering the results and the tax efficiency of such payment.Share PerformanceThe preferred shares of BI&P (IDVL4), listed in the Level 2 Corporate Governance segment of BM&FBOVESPA,closed March 2013 at R$7.49, for market cap of R$467.2 million, including the shares existing on March 31, 2013and excluding treasury stock. The price of IDVL4 shares dropped 5.8% in the quarter and 12.9% (11.6%adjusted for earnings) in the 12 months ended in March 2013. The Bovespa Index (Ibovespa) dropped 7.5% inthe quarter and 12.6% in relation to 1Q12. At the end of the quarter, the price/book value (P/BV) was 0.94.
  • 17. 17/20Share Price evolution in the last 12 monthsLiquidity and Trading VolumeThe preferred shares of BI&P (IDVL4) were traded in 100% of the sessions in the quarter and 92.6% of the 243sessions in the past 12 months. The volume traded on the spot market in the quarter was R$2.3 million,involving 294,000 IDVL4 shares in 454 trades. In the 12 months ended in March 2013, the volume traded on thespot market was R$26.3 million, involving around 3.7 million preferred shares in 2,325 trades.Shareholder BasePosition as of March 31, 2013Qtt Type of Shareholder IDVL3 % IDVL4 % TOTAL %5 Controlling Group 20,743,333 56.1% 619,026 2.4% 21,362,359 33.9%6 Management 277,307 0.8% 60,125 0.2% 337,432 0.5%- Treasury - 0.0% 734,515,00 2.8% 734,515 1.2%39 National Investors 1,201,090 3.3% 8,471,079 32.4% 9,672,169 15.3%13 Foreign Investors 4,891,304 13.2% 13,980,344 53.4% 18,871,648 29.9%6 Corporate - 0.0% 6,712 0.0% 6,712 0.0%288 Individuals 9,832,615 26.6% 2,288,243 8.7% 12,120,858 19.2%357 TOTAL 36,945,649 100.0% 26,160,044 100.0% 63,105,693 100.0%
  • 18. 18/20Balance SheetConsolidated R$ thousandAssets 03/31/12 12/31/12 03/31/13Current 3,811,194 3,063,804 3,295,573Cash 25,215 18,250 64,521Short-term interbank investments 617,066 429,535 546,759Open market investments 559,764 377,495 518,490Interbank deposits 57,302 52,040 28,269Securities and derivative financial instruments 1,281,882 671,587 718,515Own portfolio 615,536 473,468 515,238Subject to repurchase agreements 524,128 26,654 51,598Linked to guarantees 129,701 150,415 127,461Subject to the Central Bank - - -Derivative financial instruments 12,517 21,050 24,218Interbank accounts 3,337 938 11,996Loans 1,294,343 1,495,533 1,354,555Loans - private sector 1,316,621 1,515,490 1,451,470Loans - public sector - - -(-) Allowance for loan losses (22,278) (19,957) (96,915)Other receivables 538,250 390,712 545,482Foreign exchange portfolio 408,036 363,445 508,913Income receivables 1,136 67 43Negotiation and intermediation of securities 34,381 14,356 27,444Sundry 100,282 17,300 13,909(-) Allowance for loan losses (5,585) (4,456) (4,827)(-) Outras provisões - - -Other assets 51,101 57,249 53,745Other assets 52,183 59,695 50,248(-) Provision for losses (2,780) (4,277) -Prepaid expenses 1,698 1,831 3,497Long term 719,321 906,467 907,312Short-term interbank investments - - -Open market investments - - -Interbank deposits - - -Marketable securities and derivative financial instruments 27,918 59,737 51,163Own portfolio 52 42 42Subject to repurchase agreements - - -Linked to guarantees - - -Derivative financial instruments 27,866 59,695 51,121Interbank Accounts 4,784 4,083 -Loans 556,306 693,561 625,129Loans - private sector 625,260 756,459 737,581Loans - public sector - - -(-) Allowance for loan losses (68,954) (62,898) (112,452)Other receivables 129,823 148,536 199,332Credit guarantees honored - 778 -Trading and Intermediation of Securities 536 524 517Sundry 134,501 156,024 204,788(-) Allowance for loan losses (5,214) (8,790) (5,973)Other rights 490 550 31,688Permanent Assets 52,498 51,711 56,236Investments 24,578 24,980 29,403Subsidiaries and Affiliates 22,892 23,294 27,717Other investments 1,842 1,842 1,842(-) Loss Allowances (156) (156) (156)Property and equipment 13,739 13,648 14,077Property and equipment in use 1,210 1,210 1,210Revaluation of property in use 2,634 2,634 2,634Other property and equipment 18,440 19,660 20,481(-) Accumulated depreciation (8,545) (9,856) (10,248)Intangible 14,181 13,083 12,756Goodwill 2,391 2,276 2,276Other intangible assets 13,100 13,100 13,100(-) Accumulated amortization (1,310) (2,293) (2,620)TOTAL ASSETS 4,583,013 4,021,982 4,259,121
  • 19. 19/20Consolidated R$ thousandLiabilities 03/31/12 12/31/12 03/31/13Current 2,984,718 2,123,097 2,512,472Deposits 982,842 839,973 928,651Cash deposits 47,964 56,145 79,284Interbank deposits 126,365 97,867 91,336Time deposits 808,513 685,961 758,031Other - - -Funds obtained in the open market 1,058,390 241,904 193,228Own portfolio 520,776 26,745 51,699Third party portfolio 175,021 106,200 53,211Unrestricted Portfolio 362,593 108,959 88,318Funds from securities issued or accepted 296,488 376,325 497,095Agribusiness Letters of Credit, Real State Notes & Bank Notes 296,488 376,325 497,095Interbank accounts 327 - 180Receipts and payment pending settlement 327 - 180Interdepartamental accounts 19,724 9,168 15,741Third party funds in transit 19,724 9,168 15,741Borrowings 362,521 388,626 396,399Foreign borrowings 362,521 388,626 396,399Onlendings 95,761 119,575 125,570BNDES 58,487 77,426 83,659FINAME 37,274 42,149 41,911Other liabilities 168,665 147,526 355,608Collection and payment of taxes and similar charges 835 509 287Foreign exchange portfolio 72,021 46,177 206,208Taxes and social security contributions 3,563 4,682 4,156Social and statutory liabilities 1,750 10,320 2,500Negotiation and intermediation securities 63,956 70,082 74,364Derivative financial instruments 18,050 7,604 53,512Sundry 8,490 8,152 14,581Long Term 1,006,412 1,310,648 1,247,172Deposits 808,429 1,028,553 992,003Interbank Deposits 1,080 110 58Time deposits 807,349 1,028,443 991,945Funds from securities issued or accepted - 29,751 33,503Agribusiness Letters of Credit, Real State Notes & Bank Notes - 29,751 33,503Loan obligations 45,230 - -Foreign loans 45,230 - -Onlending operations - Governmental Bureaus 144,477 215,876 196,525Federal Treasure 9,980 8,407 7,702BNDES 61,639 118,477 101,588FINAME 71,873 88,780 87,017Other Institutions 985 212 218Other liabilities 8,276 36,468 25,141Taxes and social security contributions 6,297 29,598 18,468Derivative financial instrument 213 2,620 2,420Sundry 1,766 4,250 4,253Future results 1,378 1,036 1,031Shareholders Equity 590,505 587,201 498,446Capital 572,396 572,396 572,396Capital Reserve 8,248 14,886 17,565Revaluation reserve 1,377 1,340 1,327Profit reserve - 3,512 (87,860)(-) Treasury stock (5,859) (5,859) (5,859)Asset valuation Adjustment 12,578 - -Accumulated Profit / (Loss) 1,765 - -Minority Interest - 926 877TOTAL LIABILITIES 4,583,013 4,021,982 4,259,121
  • 20. 20/20Income StatementConsolidated R$ thousand1Q12 4Q12 1Q13Income from Financial Intermediation 161,778 123,742 87,588Loan operations 70,197 62,343 55,972Income from securities 68,606 28,626 19,626Income from derivative financial instruments (3,746) 15,554 1,960Income from foreign exchange transactions 26,721 17,219 10,030Expenses from Financial Intermediaton 125,348 83,055 198,223Money market funding 85,303 56,444 53,208Loans, assignments and onlendings 25,647 18,756 11,631Allowance for loan losses 14,398 7,855 133,384Gross Profit from Financial Instruments 36,430 40,687 (110,635)Other Operating Income (Expense) (27,151) (33,835) (33,887)Income from services rendered 6,590 6,747 6,451Income from tariffs 199 193 172Personnel expenses (22,738) (23,700) (26,373)Other administrative expenses (13,123) (13,331) (13,371)Taxes (3,705) (4,326) (3,600)Result from affiliated companies 1,544 991 787Other operating income 4,971 5,473 3,204Other operating expense (889) (5,882) (1,157)Operating Profit 9,279 6,852 (144,522)Non-Operating Profit 2,884 (1,616) (669)Earnings before taxes ad profit-sharing 12,163 5,236 (145,191)Income tax and social contribution (4,979) 220 59,189Income tax 579 (4,553) 6,632Social contribution 415 (2,722) 4,057Deferred fiscal assets (5,973) 7,495 48,500Statutory Contributions & Profit Sharing (2,139) (1,831) (5,431)Net Profit for the Period 5,045 3,625 (91,433)