2. 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
3. Highlights
3
This quarter we completed a cycle that has begun in April 2011 with the entry of a new
management team and new shareholders, including the private equity fund Warburg
Pincus. Today, all the teams, processes and strategies are fully operational.
During this period, we recycled our loan portfolio by acquiring new clients and through
credit exit from poor quality loans.
To conclude this first cycle and to ensure that the future results of the Bank are not
contaminated, in 1Q13 we decided to strengthen the allowance for loan losses (ALL). Of
the total ALL expenses of R$133.4 million in the quarter, R$126.5 million pertain exclusively
to the loans granted before April 2011.
Reflecting the more conservative position of the current management, our allowance for
loan losses is enough to cover 96.4% of loans classified between D and H in March 2013
(47.3% in December 2012).
As a result of this allowance, we recorded a loss of R$91.4 million in the 1Q13.
We announced a capital increase of up to R$92 million, of which the private equity fund
Warburg Pincus and the controlling shareholders have already committed to subscribe to
R$82 million.
We also announced the closing of the acquisition process of Voga Empreendimentos e
Participações Ltda., which is already fully integrated to BI&P activities.
4. The cycle of changes started in April 2011 was
completed...
4
Broad change in the Management team and the sales force
Repositioning of our target market to focus on bigger
companies with lower risk
Reconstruction of the credit portfolio
Multiple product offering and cross selling to customer base
Attraction of an IB and fixe income team
Funding Diversification & Cost Reduction
5. Complementary ALL and Capital Increase
Allowance for loan losses in 1Q13 of R$133 million
• R$126 million related to loans granted before April 2011
(R$110 million as additional allowance for loan losses)
• ALL enough to cover 96.4% of loans rated from D to H (47.3% in 4Q12)
Capital Increase up to R$92 million in Tier I
• R$82 million: Warburg Pincus and controlling shareholders
Reinforces the confidence of all the partners in BI&P project
Maintained the same equity level of December 2012
In case of the capital increase occurred in the end of March 2013:
5
1Q13 1Q13*
Index Basel 14.2% 16.8%
* In case of the capital increase occurred in the end of 1Q13.
6. 2,759 2,807 2,991 3,068 3,048
1Q12 2Q12 3Q12 4Q12 1Q13
R$million
Loans and Financing in Real
Trade Finance
Guarantees Issued (L/G and L/C)
Agricultural Bonds (CPR, CDA/WA and CDCA)
Private Credit Bonds (PN and Debentures)
-0.7%
Expanded Credit Portfolio
We achieved a better balance between Middle Market and Corporate
segments...
6
7. Client Segmentation
...Middle Market increases its share in the credit portfolio...
7
39%
47%
59%
51%
2%
1%
4Q12
1Q13
Middle Market Corporate Other
Average exposure per
client | R$ million
1Q13 4Q12
Corporate 5.0 5.2
Middle Market 3.0 2.4
1,396
1,422 1,253
1,200
1,445
1Q12 2Q12 3Q12 4Q12 1Q13
R$million
Middle Market
1,309
1,334
1,682 1,820
1,567
1Q12 2Q12 3Q12 4Q12 1Q13
R$million
Corporate
Note: Other Credits includes Consumer Credit Vehicles, Acquired Loans and Non-Operating Asset Sales Financing.
Migration of clients from Middle to Corporate = ~R$200mn as of June 30, 2012 and ~R$260mn as of Sept. 30, 2012
Annual revenues from R$40mn to R$400mn Annual revenues of between R$400mn and R$2bn
8. Expanded Credit Portfolio Development
...maintaining the focus on higher quality assets...
8
646
517
687 728
589
1Q12 2Q12 3Q12 4Q12 1Q13
R$million
New Transactions
3,068 3,048
589(512)
(89) (8)
4Q12 Amortized
Credits
Credit
Exits
Write offs New
Operations
1Q13
R$million
99,1% of the new
transactions in the
last 12 months are
classified between
AA and B.
9. Loans
45.8%
Credit
Assignments
10.9%
Confirming
0.8%
Discount
Receivables
0.3%
NCE
0.3%
CCE
0.4%
CCBI
0.6%
Expanded Credit Portfolio
...and increasing the new products share in the porfolio...
9
Loans &
Discounts in
Real
59%
Trade
Finance
16%
BNDES
Onlendings
9%
Guarantees
Issued
6% Agricultural
Bonds
8%
Private
Credit Bonds
0.9%
Other
1%
1Q12
Loans &
Discounts in
Real
56%
Trade
Finance
14%
BNDES
Onlendings
10%
Guarantees
Issued
6% Agricultural
Bonds
12%
Private
Credit Bonds
1.3%
Other
1%
1Q13
Loans
32.7%
Credit
Assignments
13.2%
Confirming
0.0%
Discount
Receivables
0.2%
NCE
5.2%
CCE
2.8%
CCBI
1.6%
10. 315
371
529 482
403
1Q12 2Q12 3Q12 4Q12 1Q13
R$million
Large Corporate Ecosystem*
Receivables drawn on Clients Receivables from Clients
230 267 307 327 371
1Q12 2Q12 3Q12 4Q12 1Q13
R$million
Agricultural Bonds
CPR Warrant (CDA/WA) CDCA
Developing Franchise Value
...in specific niches...
10
41
60
94 92 90
1Q12 2Q12 3Q12 4Q12 1Q13
R$million
Fixed Income Bonds
Debentures Real Estate Credit Bank Notes
* Acquisition and/or assignment of receivables originated by our customers and
Transactions with receivables of suppliers drawn on our clients (Confirming).
The expertise development in certain
niches and structures that create
competitive advantages allows
profitability increase through fees.
11. 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%
8.0%
13.0%
13.4%
22.8%
Financial institutions
Power Gen. & Distr.
Machinery and Equipments
Electronics
Financial Services
Education
Advertising & Publishing
Commerce
Oil & Biofuel
Metal Industry
Textile, App. & Leather
Pulp & Paper
Chemical & Pharma
Transport. & Log.
Automotive
Other*
Construction
Food & Beverage
Agribusiness
1Q13
1.4%
1.5%
1.9%
2.1%
2.6%
2.9%
3.2%
3.3%
3.5%
3.8%
3.9%
4.2%
4.7%
5.5%
9.4%
13.9%
14.7%
17.6%
Individuals
Commerce
Advertising & Publishing
Financial Services
Oil & Biofuel
Education
Financial institutions
Power Gen. & Distr.
Metal Industry
Chemical & Pharma
Transport. & Log.
Textile, App. & Leather
Pulp & Paper
Automotive
Other*
Food & Beverage
Construction
Agribusiness
1Q12
Credit Portfolio
...with relevant exposure in agribusiness...
11 * Other industries with less than 1.4% of share.
12. Credit Portfolio
...and short term maturity profile maintained.
12
1Q12 1Q13
Top 10
16%
11 - 60
largest
33%
61 - 160
largest
26%
Other
25%
Client Concentration
Top 10
16%
11 - 60
largest
32%
61 - 160
largest
27%
Other
25%
Client Concentration
Up to 90
days
40%
91 to 180
days
18%
181 to 360
days
16%
+360 days
26%
Maturity
Up to 90
days
36%
91 to 180
days
19%
181 to 360
days
16%
+360 days
29%
Maturity
13. 3.2% 2.8% 3.0%
1.5%
2.3%
2.7% 2.6%
1.8%
1.2%
2.2%
1Q12 2Q12 3Q12 4Q12 1Q13
NPL / Credit Portfolio
NPL 60 days NPL 90 days
Credit Portfolio Quality
97.8% of loans granted in the quarter were rated from AA to B
13
Credits rated between D and H totaled
R$228.3 million at the end of 1Q13:
− R$169.1 million (74% of Credit Portfolio
between D and H) in normal payment course;
− Only R$59.2 million overdue +60 days;
− 96.4% covered (46.7% in the 4Q12).
4%
2%
2%
39%
42%
40%
33%
35%
36%
17%
13%
13%
8%
8%
9%
1Q12
4Q12
1Q13
AA A B C D - H
78.2%
79.1%
75.2%
96.4% of credits
rated between D-H
covered
14. 2,736 2,755
2,936 2,999
3,170
1Q12 2Q12 3Q12 4Q12 1Q13
R$million
in Local Currency in Foreign Currency
Funding
Product mix helps with cost reduction
14
Time
deposits
(CDB)
30%
Insured
Time
Deposits
(DPGE)
29%
LCA
11%
LF and LCI
0%
Interbank &
Demand
Deposits
6%
Onlendings
9%
Foreign
Borrowings
15%
1Q12
Time
deposits
(CDB)
26%
Insured
Time
Deposits
(DPGE)
29%
LCA
15%
LF and LCI
2%
Interbank &
Demand
Deposits
5%
Onlendings
10%
Foreign
Borrowings
13%
1Q13
LCA: Agribusiness Letters of Credit; LF: Bank Notes; LCI: Real Estate Letters of Credit
15. Operating Performance and Profitability
15
67.6% 60.8% 69.7% 78.4%
155.3%
1Q12 2Q12 3Q12 4Q12 1Q13
Efficiency Ratio*
6.6%
7.7%
6.1% 5.9%
2.7%
6.7%
5.5% 5.8% 5.3%
5.4%
1Q12 2Q12 3Q12 4Q12 1Q13
Net Interest Margin (NIM)
NIM(a)
NIM(a) w/o effects of hedge accounting and discounts
5.0
2.4 3.1 3.6
1Q12 2Q12 3Q12 4Q12 1Q13
R$million
Net Profit
3.5
1.7 2.2 2.5
1Q12 2Q12 3Q12 4Q12 1Q13
Return on Average Equity (ROAE) %
-91,4
n.r.
n.r.= not representative
* Details about the calculation are available in the 1Q13 Earnings Release at www.bip.b.br/ir .
16. 590.5 582.4 587.6 587.2
498.4
590.4
1Q12 2Q12 3Q12 4Q12 1Q13 1Q13*
R$million
Shareholders’ Equity
17.5% 17.0% 15.8% 14.9% 14.2%
16.9%
1Q12 2Q12 3Q12 4Q12 1Q13 1Q13*
Basel Index (Tier I)
4.7x 4.8x 5.1x 5.2x
6.1x
5.2x
1Q12 2Q12 3Q12 4Q12 1Q13 1Q13*
Leverage
Expanded Credit Portfolio/ Equity
Capital Structure and Ratings
16
Agency Rating
Last
Report
Standard
& Poor’s
Global: BB/Negative/ B
National: brA+/Negative/brA-1
Mar/13
Moody’s
Global: Ba3/Stable/Not Prime
National: A2.br/Stable/BR-2
Feb/13
Fitch Ratings National: BBB/Stable/F3 Nov/12
RiskBank
Index: 10.38
Low Risk Short Term
Apr/13
* In case of the capital increase occurred in the end of 1Q13.
17. 17
Achieve economies of scale through Credit Portfolio growth
Promote IB activities – Fixed Income and M&A
Increase product and derivative desk performance
New Joint Ventures to improve assets generation
New distribution plataforms of our products
Continuous review of processes, systems and controls aiming reduction costs
Strategy for 2013
