BI&P- Indusval- 1Q14 Earnings Release
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Banco BI&P Earnings Release - 1st Quarter 2014

Banco BI&P Earnings Release - 1st Quarter 2014

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BI&P- Indusval- 1Q14 Earnings Release BI&P- Indusval- 1Q14 Earnings Release Document Transcript

  • 1/15 EARNINGS RELEASE 1st QUARTER 2014 BI&P - Banco Indusval & Partners is a commercial bank with more than 45 years of experience in the financial market, focusing on local and foreign currency, fixed income and corporate finance for companies. BI&P relies on a network of 7 branches and 2 banking service posts strategically located in economically relevant Brazilian regions, besides an offshore branch in Cayman Islands, its brokerage house Guide Investimentos operating at the São Paulo Stock, Commodities and Futures Exchange - BM&FBOVESPA and Serglobal Cereais, acquired in April 2011, which originates agricultural bonds. Highlights  Expanded Credit Portfolio totaled R$3.9 billion, up 1.5% in the quarter and 28.8% in relation to March 2013.  Loans rated between AA and B corresponded to 90% of the expanded credit portfolio, compared to 81% in March 2013. Of the loans granted in the quarter, 99% were rated between AA and B, reflecting the quality of the credit portfolio being built since April 2011.  The Emerging companies and Corporate segments accounted for 43% and 56%, respectively, of the expanded credit portfolio.  The managerial expense with allowance for loan losses (ALL) annualized in 1Q14 was 1.10% of the expanded credit portfolio (0.95% in 4Q13), in line with the conservative lending policy adopted by the Bank. Additional allowance remained at R$23.7 million, not yet allocated.  Funding totaled R$3.9 billion and Free Cash totaled R$743.2 million at the end of 1Q14, in line with the strategy of loan portfolio growth.  Income from services rendered and tariffs totaled R$12.9 million in the quarter, an increase of 29.7% from the previous quarter and 94.1% from 1Q13.  The quarterly Result was a loss of R$9.9 million, mainly due to the following: (i) 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, without any cash effect, and (ii) the fact that the investments we made during the restructuring period have still not reached equilibrium point since, given the conservative risk adopted by us, we have still not attained the required scale through growth of the credit portfolio and income from services rendered. IDVL4: R$3.58 per share Closing: May 13, 2014 Outstanding Shares: 88,991,729 Market Cap: R$318.6 million Price/Book Value: 0.48 Conference Call / Webcasts May 14, 2014 In English 10 a.m. (US EST) / 11 a.m. (Brasília) Connections Brasil: +55 11 3193-1001 +55 11 2820-4001 EUA: +1 786 924-6977 Code: Banco BI&P In Portuguese 9 a.m. (US EST) / 10 a.m. (Brasília) Number: +55 11 3193-1001 +55 11 2820-4001 Code: Banco BI&P Website www.bip.b.br/ir Expanded Credit Portfolio totaled R$3.9 billion, up 1.5% in the quarter and 29% in twelve months Income from services rendered and tariffs totaled R$12.9 million, up 30% in the quarter and 94% in twelve months Managerial expense with allowance for loan losses (ALL) annualized in 1Q14 was 1.10% of the expanded credit portfolio, in line with Banco BI&P’s conservative lending policy
  • 2/15 EARNINGS RELEASE 1st Quarter 2014 Summary Macroeconomic Scenario .......................................................................................................................................................3 Key Indicators ..........................................................................................................................................................................4 Operating Performance...........................................................................................................................................................5 Expanded Credit Portfolio .......................................................................................................................................................7 Funding ....................................................................................................................................................................................9 Free Cash.............................................................................................................................................................................. 10 Capital Adequacy.................................................................................................................................................................. 10 Credit Ratings ....................................................................................................................................................................... 10 Capital Markets .................................................................................................................................................................... 11 Balance Sheet ...................................................................................................................................................................... 13 Income Statement................................................................................................................................................................ 15
  • 3/15 EARNINGS RELEASE 1st Quarter 2014 Macroeconomic Scenario The beginning of the year was marked by high temperatures and scarce rainfall, which affected both the energy sector and some plantations across the country. In the Southeast and Midwest Brazil, water reservoirs reached alarmingly low levels, raising the possibility of energy rationing in the country. With the government actioning the thermal power plants to meet the energy demand, spot market energy prices rose sharply, forcing the government to announce a rescue plan for energy distribution companies. To prevent the country’s public accounts from getting affected, the major portion of the aid will come from the loan contracted by the Electric Energy Trading Chamber (CCEE), a private entity. Despite the government’s announcement to cut federal spending by R$44 billion this year and its commitment to achieve a primary surplus of R$99 billion, or 1.9% of GDP, worries about the status of public accounts persist. Initial fiscal results from early this year have raised doubts about the government’s ability to meet the target set by it. In this scenario, the rating agency Standard & Poor’s downgraded the country’s sovereign rating from BBB to BBB-, the lowest level still considered investment grade, based on the argument that Brazil’s public accounts and economic activity are deteriorating. Note that the drought did not affect the electricity system alone. Several plantations were damaged by inclement weather, pushing up the prices of fresh food items. The consumer price index (IPCA) in March rose higher than economists’ expectations, and food prices should continue to exert pressure on inflation in the coming months. Expectations regarding inflation have worsened, with a few economists even predicting the IPCA index to end 2014 at above the inflation target of 6.5%. In this scenario, the Central Bank of Brazil continued its monetary tightening policy, raising by one more percentage point the basic interest rate (Selic), which reached 11% p.a. at the end of March. On the positive side, indicators of economic activity at the start of the year positively surprised economists. Industrial production and retail sales registered growth and the Central Bank’s business activity index signaled economic growth in the beginning of the year. Despite these positive developments, the market maintained its forecast of a slowdown in economic activity over the coming months, with GDP growth in 2014 going below 2%. The foreign exchange market remained highly volatile at the start of the year. In January, the negative exchange flows, combined with the apathy of international markets towards emerging economies, resulted in a stronger U.S. dollar, which went past the R$2.40 mark. In the succeeding months, the inflow of funds into the country, mainly reflecting heightened tensions between Russia and Ukraine and the increase in foreign funding by Brazilian companies, pushed up the Brazilian real, which closed the first quarter at R$2.25. Credit volume in Brazil’s national financial system grew 13.7% in the first quarter of 2014 to reach R$2.758 trillion. Average term of loans increased from 85.9 months in March 2013 to 103.6 months in December 2014. Credit as a percentage of GDP ended the first quarter at 55.9%, lower than 56.1% at the end of last year, though still remaining above 50%. Default in the individuals segment dropped from 7.6% in the first quarter of 2013 to 6.5%, while corporate default declined from 3.6% to 3.3%. These marginal improvements in default rates are the result of a more selective approach to credit adopted by Brazilian banks. Macroeconomic Data 1Q14 4Q13 1Q13 2013 2014(e) Real GBP Growth (Q/Previous Q) 0.40%(e) 0.70% 0.00% 2.3% 1.80% Inflation (IPCA - IBGE) – quarterly change 2.18% 2.04% 1.94% 2.04% 1.80% Inflation (IPCA - IBGE) – annual change 6.15% 5.91% 6.59% 5.91% 6.50% FX (US$/R$) – quarterly change -4.47% 6.54% -1.26% 15.36% 1.6% Interest Rate (Selic) 11.00% 10.00% 7.25% 10.00% 11.25% e= expected
  • 4/15 EARNINGS RELEASE 1st Quarter 2014 Key Indicators The financial and operating information presented in this report are based on consolidated financials prepared in millions of Real (local currency), according to Brazilian Central Bank rules, except were otherwise stated. Results 1Q14 4Q13 1Q14/4Q13 1Q13 1Q14/1Q13 Loan Operations & Agro Bonds (CPR) adjusted 1 108.8 110.7 -1.7% 60.7 79.2% Effect of recoveries and discounts (0.1) (0.5) -80.7% (2.2) -95.8% Revenues from Securities (w/o agro bonds), Derivatives & FX 28.3 46.5 -39.0% 44.6 -36.5% Effect of discontinuance of hedge accounting (4.0) (3.6) 12.5% (15.6) -74.2% Financial Intermediation Expenses (w/o ALL) (105.0) (111.4) -5.8% (64.8) 61.9% Result from Financial Int. before ALL 28.1 41.7 -32.6% 22.7 23.6% ALL Expenses 2 (13.4) (16.0) -16.4% (133.4) -90.0% ALL Expenses - Banco BI&P (9.2) (7.0) 30.0% (133.4) -93.1% ALL Expenses - Banco Intercap 3 (4.2) (9.0) -52.9% 0.0 n.c. Result from Financial Intermediation 14.7 25.7 -42.7% (110.6) 113.3% Net Operating Expenses (26.0) (38.3) -32.2% (33.9) -23.4% Recurring Operating Result (11.2) (12.6) -10.7% (144.5) -92.2% Non-Recurring Operating Expenses 0.0 0.0 n.c. 0.0 n.c. Operating Result (11.2) (12.6) -10.7% (144.5) -92.2% Net Profit (Loss) (9.9) (10.0) -0.8% (91.4) -89.2% Assets & Liabilities 1Q14 4Q13 1Q14/4Q13 1Q13 1Q14/1Q13 Loan Portfolio 3,014.6 3,025.2 -0.4% 2,522.7 19.5% Expanded Loan Portfolio 4 3,926.1 3,867.1 1.5% 3,047.5 28.8% Cash & Short Term Investments 211.4 241.0 -12.3% 611.3 -65.4% Securities and Derivatives 1,402.5 1,347.7 4.1% 769.7 82.2% Securities excl. Agro Sec. & Private Credit Bonds 5 702.1 684.8 2.5% 417.4 68.2% Total Assets 5,032.4 4,936.8 1.9% 4,259.1 18.2% Total Deposits 3,308.3 3,219.0 2.8% 2,451.3 35.0% Open Market 95.6 85.9 11.3% 193.2 -50.5% Foreign Borrowings 348.2 364.3 -4.4% 396.4 -12.1% Domestic Onlendings 273.4 310.0 -11.8% 322.1 -15.1% Shareholders’ Equity 667.1 674.2 -1.0% 498.4 33.8% Performance 1Q14 4Q13 1Q14/4Q13 1Q13 1Q14/1Q13 Free Cash 743.2 758.0 -1.9% 760.1 -2.2% NPL 60 days/ Loan portfolio 2.6% 2.3% 0.3 p.p. 2.3% 0.3 p.p. NPL 90 days/ Loan portfolio 2.6% 1.9% 0.7 p.p. 2.2% 0.4 p.p. Basel Index 13.7% 14.8% -1.1 p.p. 14.2% -0.4 p.p. ROAE -5.8% -6.2% 0.5 p.p. -52.2% 46.4 p.p. Adjusted Net Interest Margin (NIMa) 6 3.2% 5.0% -1.7 p.p. 5.4% -2.2 p.p. Efficiency Ratio 105.6% 101.0% 4.5 p.p. 155.2% -49.7 p.p. Other Information 1Q14 4Q13 1Q14/4Q13 1Q13 1Q14/1Q13 Number of Corporate Clients 1,128 1,063 6.1% 811 39.1% Number of Employees 453 443 2.3% 449 0.9% Banco BI&P employees 379 372 1.9% 397 -4.5% Brokerage house and Serglobal employees 74 71 4.2% 52 42.3% n.c. = not comparable (percentage above 300% or below -300%, or number divided by zero). Details in the respective sections of this report: 1 Excluding (i) revenues from recovery of loans written off, and (ii) discounts granted upon settlement of operations in the period. More details in the Profitability section of this report. 2 Including additional provisions. 3 The allowance for loan losses on loans originated at Banco Intercap and absorbed by Banco BI&P will be fully reimbursed by the former controlling shareholders of Banco Intercap since it has already exceeded the contractual ceiling of R$6.0 million for the first year after the merger (06/30/2013 to 06/30/2014). 4 Including Guarantees issued, Private Credit Bonds (PNs and Debentures) and Agro Securities (CDA/WA and CPR). 5 Excluding Agro Securities (CPRs and CDA/WA) and Private Credit Bonds (PNs and debentures) for trading. 6 Excluding (i) repos with equivalent volumes, tenors and rates both in assets, and (ii) effects of the discontinuance of the treatment of hedge accounting, and also discounts granted in operations settled in the period.
  • 5/15 EARNINGS RELEASE 1st Quarter 2014 Operating Performance The quarterly result was a loss of R$9.9 million, mainly due to the following: (i) 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, without any cash effect, and (ii) the fact that the investments we made during the restructuring period have still not reached equilibrium point since, given the conservative risk policy adopted by us, we have still not attained the required scale. Though loan origination by our commercial area continues to be a positive highlight, the expected profitability will come with the gains in scale, that is, through growth of the loan portfolio and income from services rendered. Financial Intermediation Result before Allowance for Loan Losses Net Result Profitability Financial Intermediation 1Q14 4Q13 1Q14/4Q13 1Q13 1Q14/1Q13 Financial Intermediation Revenues 133.1 153.1 -13.1% 87.6 51.9% Loan Operations and Agro Bonds adjusted ** 108.8 110.7 -1.7% 60.7 79.2% Effects recoveries and discounts (0.1) (0.5) -80.7% (2.2) -95.8% Loan Operations and Agro Bonds 108.7 110.2 -1.3% 58.6 85.7% Loans, Discount Receivables and Agro bonds (CPR) 91.2 99.0 -7.9% 47.4 92.4% Financing 16.7 9.5 75.4% 6.8 143.8% Other 0.8 1.7 -50.4% 4.3 -80.4% Securities (w/o Agro bonds) 21.7 26.4 -17.7% 17.0 27.4% Derivatives (8.8) (6.5) 36.2% 2.0 n.c. FX Operations Result 11.4 23.0 -50.3% 10.0 14.1% Financial Intermediation Expenses (105.0) (111.4) -5.8% (64.8) 61.9% Money Market Funding (90.1) (82.5) 9.2% (53.2) 69.4% Time Deposits (64.2) (59.2) 8.4% (40.8) 57.3% Repurchase Transactions (2.3) (4.8) -52.7% (4.6) -50.2% Interbank Deposits (0.4) (0.4) 9.6% (1.3) -65.7% Agro Bonds (LCA), Real Estate Notes (LCI) & Bank Notes (LF) (23.2) (18.1) 28.6% (6.5) 255.4% Loans, Assignments & Onlending (14.8) (28.4) -47.8% (11.6) 27.3% Foreign Borrowings (10.1) (22.6) -55.2% (6.9) 47.6% Domestic Borrowings & Onlending (3.4) (4.7) -26.2% (4.8) -27.9% Sales operations/transfer of financial assets 0.0 (0.5) n.c. 0.0 n.c. Gross Result from Financial Intermediation before ALL 28.1 41.7 -32.6% 22.7 23.6% Allowance for Loan Losses (ALL) (13.4) (16.0) -16.4% (133.4) -90.0% ALL Expenses - Credits from Banco BI&P (9.2) (7.0) 30.0% (133.4) -93.1% ALL Expenses - Credits from Banco Intercap (4.2) (9.0) -52.9% 0.0 n.c. Gross Result from Financial Intermediation 14.7 25.7 -42.7% (110.6) 113.3% * Excluding the effects of (i) discounts granted upon settlement of loans in the peri, and (ii) by the discontinuance of the designation of hedge accounting, more details in the Profitability section of this report. ** Excluding the effects of (i) recoveries from operations written off, and (ii) discounts granted upon settlement of loans in the period. 22.8 2.4 46.0 41.7 28.1 44.8 26.9 47,7 47.5 33.1 1Q13 2Q13 3Q13 4Q13 1Q14 R$million Financial Intermediation Result before ALL Financial Intermediation Result before ALL adjusted * 2.0 -10.0 -9.9 1Q13 2Q13 3Q13 4Q13 1Q14 R$million -20.6 -91.4
  • 6/15 EARNINGS RELEASE 1st Quarter 2014 Net Interest Margin (NIM) Net Interest Margin adjusted was 3.2% in the quarter as against 5.0% in 4Q13. The Managerial NIM with clients was 3.94% due to the increase participation of the Corporate segment. Margem Financeira Líquida 1Q14 4Q13 1Q14/4Q13 1Q13 1Q14/1Q13 A. Result from Finan. Int. before ALL adjusted1 33.1 47.5 -30.4% 44.8 -26.2% B. Average Interest bearing Assets 4,237.6 4,018.5 5.5% 3,603.6 17.6% Adjustm. for non-remunerated average assets 2 (98.3) (116.4) -15.5% (229.2) -57.1% B.a. Adjusted Average Interest bearing Assets 4,139.3 3,902.1 6.1% 3,374.4 22.7% Net Interest Margin (Aa/Ba) 1 3.2% 5.0% -1.7 p.p. 5.4% -2.2 p.p. Managerial NIM with Clients 3.94% 3.99% 0.05 p.p. 4.05% -0.11p.p. 1 Excluding (i) effects of the discontinuance of the treatment of hedge accounting, adopted in 2Q12, for booking hedges of cash flows, which continue to be protected by hedge, and (ii) discounts granted in operations settled in the period. 2 Repos with equivalent volumes, tenors and rates both in assets and liabilities. Efficiency Efficiency ratio stood at 105.6% in 1Q14, compared to 101.0% no 4Q13. Though personnel and administrative expenses decreased significantly in the quarter, due to (i) the strict control over expenses and (ii) the seasonality of personnel expenses that is typical of the fourth quarter, which was further impacted by the drop in financial intermediation income caused by the factors mentioned earlier. Efficiency Ratio 1Q14 4Q13 1Q14/4Q13 1Q13 1Q14/1Q13 Personnel Expenses 27.5 29.8 -7.7% 26.4 4.3% Contributions and Profit-sharing 2.4 1.8 32.1% 5.4 -55.6% Administrative Expenses 20.6 21.6 -4.6% 13.4 53.8% Taxes 3.5 3.8 -8.5% 3.6 -3.3% A. Total Operating Expenses 54.0 57.0 -5.3% 48.8 10.7% Gross Income Financial Intermediation (w/o ALL) 28.1 41.7 -32.6% 22.7 23.6% Income from Services Rendered 12.6 9.6 31.1% 6.5 96.0% Income from Banking Tariffs 0.2 0.3 -20.9% 0.2 20.9% Other Net Operating Income * 10.2 4.8 112.4% 2.0 n.c. B. Total Operating Income 51.1 56.4 -9.4% 31.4 62.8% Efficiency Ratio (A/B) 105.6% 101.0% 4.5 p.p. 155.2% -49.7 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.
  • 7/15 EARNINGS RELEASE 1st Quarter 2014 Expanded Credit Portfolio In March 2014, the credit portfolio totaled R$3.0 billion, stable in the quarter and +19.5% in twelve months. The expanded credit portfolio reached R$3.9 billion, +1.5% in the quarter and +28.8% in twelve months. Expanded Credit Portfolio by Product Group 1Q14 4Q13 1Q14/4Q13 1Q13 1Q14/1Q13 Loans & Financing in Real 2,344.2 2,315.5 1.2% 1,676.9 39.8% Assignment of Receivables Originated by our Customers 222.0 308.9 -28.1% 402.6 -44.9% Trade Finance (ACC/ACE/IMPFIN)1 420.0 372.2 12.8% 415.4 1.1% Other2 28.3 28.7 -1.2% 27.8 2.0% Expanded Credit Portfolio 3,014.6 3,025.2 -0.4% 2,522.7 19.5% Guarantees Issued (LGs & L/Cs) 211.2 179.0 18.0% 172.5 22.4% Agro Bonds (Securities: CPRs & CDA/WA; Credit: CDCAs) 615.2 637.8 -3.5% 311.2 97.7% Private Credit Bonds (Securities: PNs & Debentures) 85.1 25.2 238.5% 41.1 107.2% Expanded Credit Portfolio 3,926.1 3,867.1 1.5% 3,047.5 28.8% 1 Starting from March 2014, export credit notes (NCE) and export notes (CCE) originated by Banco Intercap are included in Loans & Financing in BRL, as well as NCE and CCE originated by Banco BI&P are classified. 2 The Other segment basically consists of Consumer Credit operations for Used Vehicles and financing of non-operating assets. The Emerging Companies segment consists of companies with annual revenue between R$80 million and R$400 million, this segment reached 43% of the Expanded Credit Portfolio while the Corporate segment which includes companies with annual revenue between R$400 million and R$2 billion reached 56%. Expanded Credit Portfolio by Segment Expanded Credit Portfolio by Client Concentration * The Other segment basically consists of Consumer Credit operations for Used Vehicles and financing of non-operating assets. ** Including R$97,2 million of loans assigned to Banco Intercap. The agro bonds portfolio totaled R$747.1 million in 1Q14, down 1.5% in the quarter but up 101.4% in 12 months. The growth in 12 months is due to our joint ventures and alliances, while the slight decline in the quarter is the result of the typical seasonality of certain agricultural commodities. Agricultural Bonds Porfolio 1Q14 4Q13 1Q14/4Q13 1Q13 1Q14/1Q13 Booked under Securities 615.2 637.8 -3.5% 311.2 97.7% Warrants - CDA/WA 35.5 15.6 127.3% 7.1 n.c. Agro Product Certificate - CPR 579.8 622.2 -6.8% 304.1 90.7% Booked under Credit Portfolio - Loans & Financing 131.9 121.0 9.0% 59.7 120.8% Agro Credit Rights Certificate - CDCA 131.9 121.0 9.0% 59.7 120.8% Agricultural Bonds 747.1 758.8 -1.5% 370.9 101.4% The agricultural and Real Estate sector has increased their participation in the expanded credit portfolio due to our joint ventures and alliances in these segments. 47% 48% 49% 47% 43% 51% 51% 50% 52% 56% 1% 1% 1% 1% 1% Mar13 Jun13 Sep13** Dec13 Mar14 Emerging Companies Corporate Others* 13% 10% 12% 29% 26% 26% 27% 24% 25% 31% 39% 36% Mar13 Dec13 Mar14 Top 10 11 - 60 largest 61 - 160 largest Other
  • 8/15 EARNINGS RELEASE 1st Quarter 2014 Expanded Credit Portfolio by Region Expanded Credit Portfolio by Economic Sector Quality of the Expanded Credit Portfolio In 1Q14, we maintained our focus on lending to customers with better credit standing, which is evident from the high percentage of loans rated between AA and B, which represented 99% of total lending. The balance of loans classified in the low risk categories (AA to B) ended the quarter at 89.8% of total loans (compared to 87.1% and 81.3% at the end of 4Q13 and 1Q13, respectively), as the following chart shows. Expanded Credit Portfolio by Rating Coverage Ratio The reduction in the share of loans rated between D and H in March 2014 is due to the write-off of a few loans that had already been fully provisioned for. Of the R$271.1 million rated in this range, R$192.9 million, or 71%, consisted of loans whose payments are regular. The default rate on loans overdue more than 60 days (NPL 60 days) increased 0.3 p.p. in the quarter and 12 months. Loans overdue more than 90 days (NPL 90 days) increased 0.7 p.p. in the quarter and +0.4 p.p. in relation to March 2013. Default by segment Mar 14 Dec 13 > 60 days > 90 days Mar 14 Dec 13 Mar 14 Dec 13 Credit Portfolio NPL % NPL % NPL % NPL % Emerging Companies 1,252.4 1,357,9 61.1 4.9% 51.9 3.8% 60.0 4.8% 38.5 2.8% Corporate 1,727.6 1,636,5 9.9 0.6% 11.0 0.7% 9.9 0.6% 10.5 0.6% Other 34.5 30,8 7.3 21.0% 7.3 23.8% 7.3 21.0% 7.3 23.7% TOTAL 3,014.6 3,025.2 78.3 2.6% 70.3 2.3% 77.2 2.6% 56.3 1.9% Allowance for Loan Losses (ALL) 150.1 220.4 The managerial expense with allowance for loan losses (ALL), including Banco Intercap’s portfolio, corresponded to 1.10% of the expanded credit portfolio, in line with the conservative credit policy adopted by the Bank. There were no fresh provisions for the balance of loans granted prior to April 2011 and we still have an additional allowance (not allocated) of R$23.7 million. North 1% Northeast 6% Midwest 19% Southeast 58% South 16% 14,2% 1,9% 1,9% 2,1% 2,1% 2,7% 3,2% 3,9% 3,9% 3,9% 4,0% 5,0% 6,8% 8,7% 13,7% 22,3% Other Sectors (less than 1.4%) Financial Activities Raw Materials Chemical & Pharmaceutical Textile, Leather and Confection Metal Industry Commerce - Retail & Wholesale Infrastructure Transport and Logistics Livestock Power Generation & Distribution Automotive Food & Beverage Oil, Biofuel & Sugar Real Estate Agriculture
  • 9/15 EARNINGS RELEASE 1st Quarter 2014 Funding Funding totaled R$3.9 billion in March 2014, remaining practically stable in the quarter and increasing 24.0% in 12 months. The main funding sources were time deposits (CDB and DPGE) and agribusiness letters of credit (LCA), which jointly accounted for 78% of total funding. Note that LCAs, which bring tax advantages for individual investors, are backed by agribusiness operations, in which Banco BI&P has operational expertise. Funding 1Q14 4Q13 1Q14/4Q13 1Q13 1Q14/1Q13 Total Deposits 3,308.3 3,219.0 2.8% 2,451.3 35.0% Time Deposits 807.7 1,004.2 -19.6% 818.1 -1.3% Insured Time Deposits (DPGE) 1,307.1 1,227.5 6.5% 931.8 40.3% Insured Time Deposits – DPGE I 1,023.8 1,153.9 -11.3% 931.8 9.9% Insured Time Deposits – DPGE II 283.3 73.5 285.2% 0.0 n.c. Agro Notes (LCA) 964.0 751.7 28.2% 473.7 103.5% Real Estate Notes (LCI) 119.3 110.7 7.8% 23.9 n.c. Bank Notes (LF) 57.1 55.6 2.7% 33.1 72.8% Interbank Deposits 15.9 25.6 -37.8% 91.4 -82.6% Demand Deposits and Other 37.1 43.9 -15.4% 79.3 -53.2% Domestic Onlending 273.4 310.0 -11.8% 322.1 -15.1% Foreign Borrowings 348.2 364.3 -4.4% 396.4 -12.1% Trade Finance 314.6 329.1 -4.4% 345.9 -9.0% Other Foreign Borrowings 33.6 35.2 -4.5% 50.5 -33.4% TOTAL 3,930.0 3,893.3 0.9% 3,169.7 24.0% By Type By Investor By Maturity * Insured time deposits are represented by DPGE. DPGE I and II are two types of time deposits insured by FGC and differ in cost and framework. The average term of deposits stood at 690 days from issuance (775 days in December 2013) and 335 days from maturity (393 days in December 2013). Type of Deposit Average Term in days from issuance to maturity 1 Interbank 347 163 Time Deposits 674 504 Time Deposits with Special Guarantee (DPGE) 1.072 389 Agro Notes (LCA) 237 163 Real Estate Letters of Credit (LCI) 241 134 Bank Notes (LF) 834 192 Portfolio of Deposits 2 690 335 1 From March 30, 2014. | 2 Volume weighted average. Time Deposits 21% DPGE I * 26% DPGE II * 7% Agro Bonds 25% Bank & Real Estate Notes 4% BNDES Onlendings 7% Trade Finance 8% Foreign Loans 1% Demand 1% Institutional Investors 32% Enterprises 13% National Banks 9% Brokers 10% Individuals 18% Other 2% BNDES Onlending 7% Foreign Banks 9% Demand 1% Up to 90 days 28% 91 to 180 days 19% 181 to 360 days 18% +360 days 34%
  • 10/1 EARNINGS RELEASE 1st Quarter 2014 Free Cash On March 30, 2014, the free cash position totaled R$743.2 million, equivalent to 22.5% of total deposits and 1.1x shareholders’ equity. The calculation considers cash, short-term interbank investments and securities less funds raised in the open market and debt securities classified under marketable securities, comprising rural product certificates (CPRs), agribusiness deposit certificates and warrants (CDAs/WAs), debentures and promissory notes (NPs). Capital Adequacy The Basel Accord requires banks to maintain a minimum percentage of the capital weighted by the risk in their operations. In this context, the Central Bank of Brazil has stipulated that banks operating in the country should maintain a minimum percentage of 11%, calculated according to the Basel II and Basel III Accord regulations, which provides greater security to Brazil’s financial system against oscillations in economic conditions. The following table shows BI&P’s position in relation to the Central Bank’s minimum capital requirements: Basel Index 1Q14 4Q13 1Q14/4Q13 1Q13 1Q14/1Q13 Total Capital 605.5 643.1 -5.8% 485.3 24.8% Tier I 605.5 643.1 -5.8% 486.3 24.5% Tier II 0.0 0.0 n.c. 1.3 n.c. Deductions 0.0 0.0 n.c. (2.3) n.c. Required Capital 485.1 476.9 1.7% 376.8 28.7% Credit Risk allocation 454.5 444.0 2.4% 329.0 38.1% Market Risk Allocation 14.7 17.0 -13.6% 29.9 -51.0% Operating Risk Allocation 16.0 15.9 0.4% 17.9 -10.9% Excess over Required Capital 120.4 166.2 -27.6% 108.5 11.0% Basel Index 13.7% 14.8% -1.1 p.p. 14.2% -0.4 p.p. Risk Ratings Agency Classification Observation Last Report Standard & Poor’s BB- / Stable / B brA / Stable / brA-2 Global Scale Local Scale - Brazil April 14, 2014 Moody's Ba3 / Negative / Not Prime A2.br / Negative / BR-1 Global Scale Local Scale - Brazil July 04, 2013 FitchRatings BBB / Stable / F3 Local Scale - Brazil September 05, 2013 RiskBank 9,65 Ranking: 56 RiskBank Index Low Risk Short Term April 17, 2014 760 758 743 1Q13 4Q13 1Q14 R$million
  • 11/1 EARNINGS RELEASE 1st Quarter 2014 Capital Market Total Shares and Free Float Number of shares as of March 31, 2014 Type Corporate Capital Controlling Group Management Treasury Free Float % Common 58,513,218 32,564,340 57,876 - 25,891,002 44.2% Preferred 31,021,907 833,223 279,489 543,396 29,365,799 94.7% TOTAL 89,535,125 33,397,563 337,365 543,396 55,256,801 61.7% Share Buyback Program The following Stock Option Plans, approved for the Company’s executive officers and managers, as well as individuals who provide services to the Company or its subsidiaries, had the following balances on March 31, 2014: Quantity Stock Option Plan Date of Approval Grace Period Term for Exercise Granted Exercised Extinct Not Exercised I 03.26.2008 Three years Five years 2,039,944 229,057 449,123 1,361,764 II 04.29.2011 Three years Five years 1,840,584 - 367,243 1,473,341 III 04.29.2011 Five years Seven years 1,850,786 - - 1,850,786 IV 04.24.2012 Up to five years Five years 867,425 - 37,852 829,573 Total 6,598,739 229,057 854,218 5,515,464 The aforementioned Stock Options Plans are filed in the IPE system of the Securities and Exchange Commission of Brazil (CVM) and are also available in the Company’s IR website. Remuneration to Shareholder During 3M14 the Bank neither provisioned nor paid interest on equity, calculated based on the Long-Term Interest Rate (TJLP) and towards the minimum dividend for fiscal year 2014. The Board of Directors will, by the end of the year, study the possibility of early payment of interest on equity after considering the results and the tax efficiency of such payment. Share Performance The preferred shares of BI&P (IDVL4), listed in the Level 2 Corporate Governance segment of BM&FBOVESPA, closed March 31, 2014 at R$4.00, for a market cap of R$356 million, including the shares existing on March 31, 2014 and excluding treasury stock. The price of IDVL4 shares decreased 33.2% in the quarter and 46.6% % in the 12 months ended March 2014. In comparison, the Bovespa Index (Ibovespa) dropped 2.1% in the quarter and 10.5% in relation to the closing of March 2013. At the end of 1Q14, the price/book value (P/BV) was 0.53.
  • 12/1 EARNINGS RELEASE 1st Quarter 2014 Share Price evolution in the last 12 months Liquidity and Trading Volume The preferred shares of BI&P (IDVL4) were traded in 98.4% of the sessions in the quarter and 95.2% of the 250 sessions in the past 12 months. The volume traded on the spot market in the quarter was R$15.9 million, involving 3.2 million IDVL4 shares in 1,102 trades. In the 12 months ended in March 2014, the volume traded on the spot market was R$43.7 million, involving around 7.6 million preferred shares in 2,937 trades. Shareholder Base Position as of March 30,2014 # TYPE OF SHAREHOLDER IDVL3 % IDVL4 % TOTAL % 8 Controlling Group 32,564,340 55.7% 833,223 2.7% 33,397,563 37.3% 5 Management 57,876 0.1% 279,489 0.9% 337,365 0.4% - Treasury - 0.0% 543,396 1.8% 543,396 0.6% 19 National Investors 1,201,090 2.0% 7,784,181 25.1% 8,985,271 10.0% 11 Foreign Investors 10,681,337 18.3% 17,526,152 56.5% 28,207,489 31.5% 8 Corporate - 0.0% 598,613 1.9% 598,613 0.7% 271 Individuals 14,008,575 23.9% 3,456,853 11.1% 17,465,428 19.5% 322 TOTAL 58,513,218 100.0% 31,021,907 100.0% 89,535,125 100.0% 40 50 60 70 80 90 100 110 IBOVESPA IDVL4
  • 13/1 EARNINGS RELEASE 1st Quarter 2014 Balance Sheet CONSOLIDATED R$ thousand ASSETS 3/31/2013 12/31/2013 3/31/2014 Current 3,295,573 3,759,360 3,864,643 Cash 64,521 38,446 37,068 Short-term interbank investments 546,759 202,571 174,298 Open market investments 518,490 177,500 144,999 Interbank deposits 28,269 25,071 29,299 Securities and derivative financial instruments 718,515 1,314,212 1,369,422 Own portfolio 515,238 972,249 1,097,481 Subject to repurchase agreements 51,598 14,039 26,233 Linked to guarantees 127,461 169,468 186,969 Subject to the Central Bank - 109,250 3,022 Derivative financial instruments 24,218 49,206 55,717 Interbank accounts 11,996 4,412 3,105 Loans 1,354,555 1,725,250 1,573,308 Loans - private sector 1,451,470 1,807,228 1,618,575 Loans - public sector - - - (-) Allowance for loan losses (96,915) (81,978) (45,267) Other receivables 545,482 391,013 607,637 Credit guarantees honored - 507 - Foreign exchange portfolio 508,913 292,330 316,949 Income receivables 43 433 537 Negotiation and intermediation of securities 27,444 72,992 38,148 Sundry 13,909 33,157 257,407 (-) Allowance for loan losses (4,827) (8,406) (5,404) Other assets 53,745 83,456 99,805 Long term 907,312 1,085,304 1,070,663 Short-term interbank investments - - - Marketable securities and derivative financial instruments 51,163 33,518 33,064 Own portfolio 42 839 14,110 Derivative financial instruments 51,121 32,679 18,954 Interbank Accounts - 2,966 3,038 Loans 625,129 738,156 710,730 Loans - private sector 737,581 863,993 798,753 Loans - public sector - - - (-) Allowance for loan losses (112,452) (125,837) (88,023) Other receivables 199,332 309,720 323,109 Credit guarantees honored - - 507 Trading and Intermediation of Securities 517 523 540 Foreign exchange portfolio - 1,171 4,656 Sundry 204,788 312,231 328,791 (-) Allowance for loan losses (5,973) (4,205) (11,385) Other assets 31,688 944 722 Permanent Assets 56,236 92,141 97,106 Investments 29,403 33,460 34,361 Subsidiaries and Affiliates 27,717 31,767 32,668 Other investments 1,842 1,849 1,849 (-) Loss Allowances (156) (156) (156) Property and equipment 14,077 13,937 13,088 Property and equipment in use 1,210 1,152 1,152 Revaluation of property in use 2,634 2,634 2,634 Other property and equipment 20,481 24,657 24,575 (-) Accumulated depreciation (10,248) (14,506) (15,273) Intangible 12,756 44,744 49,657 Goodwill 2,276 25,368 27,868 Other intangible assets 13,100 23,788 27,031 (-) Accumulated amortization (2,620) (4,412) (5,242) TOTAL ASSETS 4,259,121 4,936,805 5,032,412
  • 14/1 EARNINGS RELEASE 1st Quarter 2014 CONSOLIDATED R$ thousand LIABILITIES 3/31/2013 12/31/2013 3/31/2014 Current 2,512,472 2,680,745 2,988,178 Deposits 928,651 1,036,371 1,118,475 Cash deposits 79,284 43,854 37,095 Interbank deposits 91,336 25,564 15,897 Time deposits 758,031 966,953 1,065,483 Funds obtained in the open market 193,228 85,905 95,601 Own portfolio 51,699 14,005 26,199 Third party portfolio 53,211 71,900 69,402 Unrestricted Portfolio 88,318 - - Funds from securities issued or accepted 497,095 868,884 1,060,943 Agribusiness Letters of Credit, Real Estate Notes & Bank Notes 497,095 868,884 1,060,943 Interbank accounts 180 - 565 Interdepartamental accounts 15,741 8,191 4,083 Borrowings 396,399 329,479 314,592 Foreign borrowings 396,399 329,479 314,592 Onlendings 125,570 122,022 109,752 BNDES 83,659 71,769 61,557 FINAME 41,911 50,253 48,195 Other liabilities 355,608 229,893 284,167 Collection and payment of taxes and similar charges 287 487 1,225 Foreign exchange portfolio 206,208 5,941 38,676 Taxes and social security contributions 4,156 14,646 16,022 Social and statutory liabilities 2,500 3,606 1,352 Negotiation and intermediation securities 74,364 159,262 189,391 Derivative financial instruments 53,512 22,291 15,126 Sundry 14,581 23,660 22,375 Long Term 1,247,172 1,579,460 1,372,811 Deposits 992,003 1,264,708 1,049,373 Interbank Deposits 58 - - Time deposits 991,945 1,264,708 1,049,373 Funds from securities issued or accepted 33,503 49,068 79,499 Agribusiness Letters of Credit, Real Estate Notes & Bank Notes 33,503 49,068 79,499 Loan obligations - 34,800 33,645 Foreign loans - 34,800 33,645 Onlending operations - Governmental Bureaus 196,525 187,959 163,694 Federal Treasure 7,702 6,893 6,747 BNDES 101,588 89,102 75,975 FINAME 87,017 91,769 80,753 Other Institutions 218 195 219 Other liabilities 25,141 42,925 46,600 Taxes and social security contributions 18,468 30,883 31,977 Derivative financial instrument 2,420 6,189 7,358 Sundry 4,253 5,853 7,265 Future results 1,031 2,439 4,289 Shareholders' Equity 498,446 674,161 667,134 Capital 572,396 769,843 769,843 Capital Reserve 17,565 23,468 24,159 Revaluation reserve 1,327 1,290 1,278 Profit reserve - - - (-) Treasury stock (5,859) (5,859) (4,283) Asset valuation Adjustment - (124) (169) Accumulated Profit / (Loss) (87,860) (115,272) (124,462) Minority Interest 877 815 768 TOTAL LIABILITIES 4,259,121 4,936,805 5,032,412
  • 15/1 EARNINGS RELEASE 1st Quarter 2014 Income Statement CONSOLIDATED R$ thousand INCOME STATEMENT 1Q13 4Q13 1Q14 Income from Financial Intermediation 87,588 153,099 133,063 Loan operations 55,972 89,624 85,787 Income from securities 19,626 46,958 44,671 Income from derivative financial instruments 1,960 (6,491) (8,839) Income from foreign exchange transactions 10,030 23,008 11,444 Expenses from Financial Intermediaton 198,223 127,375 118,335 Money market funding 53,208 82,536 90,147 Loans, assignments and onlendings 11,631 28,361 14,807 Sales operations/transfer of financial assets - 469 - Allowance for loan losses 133,384 16,009 13,381 Gross Profit from Financial Instruments (110,635) 25,724 14,728 Other Operating Income (Expense) (33,887) (38,304) (25,958) Income from services rendered 6,451 9,646 12,645 Income from tariffs 172 263 208 Personnel expenses (26,373) (29,815) (27,515) Other administrative expenses (13,371) (21,558) (20,569) Taxes (3,600) (3,804) (3,480) Result from affiliated companies 787 2,175 2,580 Other operating income 3,204 20,267 17,175 Other operating expense (1,157) (15,478) (7,002) Operating Profit (144,522) (12,580) (11,230) Non-Operating Profit (669) (1,285) (1,681) Earnings before taxes ad profit-sharing (145,191) (13,865) (12,911) Income tax and social contribution 59,189 5,741 5,450 Income tax 6,632 1,243 (488) Social contribution 4,057 757 (437) Deferred fiscal assets 48,500 3,741 6,375 Statutory Contributions & Profit Sharing (5,431) (1,826) (2,412) Net Profit for the Period (91,433) (9,950) (9,873)