BI&P- Indusval - 2Q14 Results Presentation
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BI&P- Indusval - 2Q14 Results Presentation

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Banco BI&P Results Presentation - 2nd Quarter 2014

Banco BI&P Results Presentation - 2nd Quarter 2014

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BI&P- Indusval - 2Q14 Results Presentation BI&P- Indusval - 2Q14 Results Presentation Presentation Transcript

  • RESULTS PRESENTATION 2Q14
  • 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, and competitive, government and technological aspects that may influence both the operations of BI&P as the market and its products. Therefore, we recommend the reading of the documents and financial statements available at the CVM website (www.cvm.gov.br) and at our Investor Relations page in the internet (www.bip.b.br/ir) and the making of your own appraisal. 2
  • Highlights 3  Expanded credit portfolio totaled R$3.9 billion, remaining stable in the quarter but up 21.4% from June 2013.  Loans rated between AA and B corresponded to 91% of the expanded credit portfolio (85% in June 2013). Reflecting the quality of the loan portfolio, 99% of the loans granted in the quarter were rated between AA and B.  The Corporate and Emerging Companies segments accounted for 59% and 40%, respectively, of the expanded credit portfolio, as against 51% and 48% in 2Q13.  The Managerial Expense with Allowance for Loan Losses (annualized) in 2Q14 corresponded to 0.66% of the expanded credit portfolio (1.1% in 1Q14), which is a highly positive outcome of the conservative credit policy being adopted by the bank in recent years.  Funding totaled R$4.1 billion, up 5.2% in the quarter and 31.6% in twelve months, while Free Cash totaled R$748.2 million at the end of 2Q14, reflecting the high liquidity enjoyed by the bank.  Income from services rendered and tariffs totaled R$15.7 million in 2Q14 and R$26.8 million in 1H14, representing growth of 42.3% in the quarter and 117.2% in relation to 1H13. The investment banking area already accounts for 50% of this revenue in 2Q14 (26% in 1Q14), which is the result of investments in the area in 2013 for acquiring the advisory firm VOGA and hiring a few top-notch professionals in this field.  Guide Investimentos, responsible for our wealth management and brokerage operations, entered into important alliances during 2014, with (i) Omar Camargo Corretora de Câmbio e Valores Mobiliários Ltda, (ii) Geraldo Corrêa Corretora de Câmbio e Valores Mobiliários Ltda, and (iii) Bullmark Consultoria Financeira Ltda. With these alliances, Guide has strengthened its distribution network and is now present in important regions across the country. After the migration of all the clients of these partners, Guide will manage assets of around R$2 billion.  The quarterly Result of R$1.1 million already reflects a significant improvement from previous quarters, but was still impacted by (i) the non-cash accounting effects of the discontinuation of the designation of hedge accounting of cash flows from a series of funding operations indexed to inflation indices (IPCA and IGPM), which are still protected by hedge operations; (ii) the negative contribution from Guide Investimentos as result of all the investments made in recent quarters; (iii) the still increasing investment banking, structured operations and sales desks which, despite the significant growth from the same period the previous year, still have tremendous potential for growth; and (iv) the need for economies of scale, considering our appetite for risk and its direct impact on loan spreads. http://image.slidesharecdn.com/20140813-bip2q14resultspresentation-140814122838-phpapp01/95/bip-indusval-2q14-results-presentation-3-638.jpg?cb=1408037385
  • 3,229 3,355 3,867 3,926 3,920 Jun 13 Sep 13* Dec 13 Mar 14 Jun 14 R$million Loans and Financing in BRL Trade Finance Guarantees Issued (L/G and L/C) Agricultural Bonds (CPR, CDA/WA and CDCA) Private Credit Bonds (Debentures) Expanded Credit Portfolio 4 Stable in the quarter, with growth of 21% in twelve months Average Exposure per Client R$ million Mar 14 Jun 14 Corporate 10.5 11.2 Emerging Companies 2.9 3.0 56% 59% 43% 40% 1% 1% Mar 14 Jun 14 Corporate Emerging Companies Other** * Including credits from Banco BI&P which were assigned to Banco Intercap in 3Q13. ** Other Credits include Non-Operating Asset Sales Financing, Consumer Credit Vehicles, and Acquired Loans. http://image.slidesharecdn.com/20140813-bip2q14resultspresentation-140814122838-phpapp01/95/bip-indusval-2q14-results-presentation-4-638.jpg?cb=1408037385
  • Expanded Credit Portfolio Development 5 ... continuously focusing on higher quality assets. 99% of the new transactions in the last 12 months are classified between AA and B. 3,926 3,920 1,424(1,321) (80) (29) Mar 14 Amortized Credits Credit Exits Write offs Credit Origination Jun 14 R$million 773 685 817 794 818 549 391 514 381 606 1,322 1,076 1,331 1,174 1,424 Jun 13 Sep 13 Dec 13 Mar 14 Jun 14 R$million Credit Origination New Transactions Renewed Transactions
  • Expanded Credit Portfolio 6 * 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. Loans & Financing in BRL* 52% Trade Finance* 13% BNDES Onlendings 11% Guarantees Issued 6% Agricultural Bonds 15% Private Credit Bonds 1% Other 2% June 13 11.8% 12.0% 13.4% 28.3% 26.4% 27.5% 26.8% 25.1% 26.2% 33.1% 36.5% 33.0% Jun 13 Mar 14 Jun 14 Client Concentration Top 10 11 - 60 largest 61 - 160 largest Other Loans & Financing in BRL* 53% Trade Finance* 11% BNDES Onlendings 6% Guarantees Issued 5% Agricultural Bonds 23% Private Credit Bonds 2% June 14
  • 8.9% 2.0% 2.2% 2.4% 2.4% 2.9% 2.9% 3.1% 3.2% 3.3% 3.5% 4.0% 5.3% 5.9% 6.0% 8.3% 8.8% 9.1% 15.7% Other Industries (less than 1.4%) Machinery and Equipments International Commerce Education Power Generation & Distribution Financial Activities Textile, Leather and Confection Raw Materials Commerce - Retail & Wholesale Chemical & Pharmaceutical Metal Industry Transport and Logistics Infrastructure Livestock Automitive Food & Beverage Oil, Biofuel & Sugar Real Estate Agriculture June 2013 Expanded Credit Portfolio 7 Relevant exposure in agriculture 13.6% 1.5% 1.7% 1.9% 2.0% 2.3% 2.3% 2.6% 3.5% 3.9% 4.1% 4.3% 5.5% 6.9% 10.7% 12.0% 21.0% Others Industries (less than 1.4%) Raw Materials Financial Activities International Commerce Metal Industry Chemical & Pharmaceutical Textile, Leather and Confection Power Generation & Distribution Commerce - Retail & Wholesale Infrastructure Transport and Logistics Automotive Livestock Food & Beverage Oil, Biofuel & Sugar Real Estate Agriculture June 2014
  • Agricultural Franchise 8 Specialization in the agricultural segment with low levels of loss CPR and CDA/WA 71% Loans 15% Trade Finance 12% BNDES Onlending 1%Guarantees Issued 1% Products Midwest 56% Southeast 25% South 12% Northeast (Bahia) 7% Regions Cultivation Amount % Soybean 557,158 67.7% Coffee 101,346 12.3% Corn 65,692 8.0% Cotton 55,708 6.8% Orange 15,705 1.9% Grape 7,913 1.0% Other 19,609 2.4% Total 823,131 100.0% More than R$2.8 billion in assets have been generated over the past three years, with an annual loss of 0.03% (annualized). Position as of June 30, 2014 R$ thousand
  • Net Interest Margin (NIM) 9 4.06% 4.08% 3.99% 3.94% 4.43% 2Q13 3Q13 4Q13 1Q14 2Q14 Managerial NIM with Clients In the 2Q14, Managerial NIM with Clients went up to 4.4%. In this quarter we managed to negotiate lower taxes with our clients, we also had our funding costs decreased and evolution in our Derivative fees.
  • Fees, Client Desk, IB, and Brokerage Revenues 10 9.1 10.3 9.1 12.0 17.9 14.4 30.0 2Q13 3Q13 4Q13 1Q14 2Q14 1H13 1H14 R$million Fees, Client Desk, IB, and Brokerage Revenue Comercial Fee Client Desk IB Guide Investimentos Structured areas start to exhibit results and still present large potential for growth with bigger cross-selling of products. Emphasis on the IB area that also counts with an important back-log of more than 41 mandates in course 107.3%
  • Investment Banking 11 Major IB deals in 1H14 Real Estate Debenture 476 R$ 175 million Real Estate CRI R$ 31 million Retail, Publishing & Services Advisory Telecom Advisory Real Estate M&A Sell Side 2nd phase Education M&A Buy Side R$ 676 million Financial Advisory R$ 300 million
  • * New Credit Policy: adopted since April 2011. Expanded Credit Portfolio Quality 12 99% of loans granted in the quarter were rated from AA to B Credits rated between D and H totaled R$207.6 million at the end of 2Q14:  R$148.9 million (72% of the expanded credit portfolio between D-H) in normal payment course;  Only R$58.7 million overdue +60 days. Additional ALL not allocated balance = R$19.1 million2% 2% 2% 50% 52% 57% 33% 35% 32% 6% 3% 4% 9% 7% 5% Jun 13 Mar 14 Jun 14 AA A B C D - H 90.9% 89.8% 85.1% AA 2% AA 1% AA 6% A 57% A 62% A 9% B 32% B 33% B 20% C 4% C 2% C 22% D - H 5% D - H 1% D - H 43% New Credit Policy* Clients Expanded Loan Portfolio Previous Credit Policy Clients Expanded Loan Portfolio 2Q14
  • Credit Portfolio Quality 0.75% 0.95% 1.10% 0.66% Sep 13 Dec 13 Mar 14 Jun 14 Managerial ALL Expense 1 Managerial Expense with Allowance for Loan Losses (ALL) = ALL expenses + Discounts granted upon settlement of loans – Revenues from recovery of loans written off. | * New Credit Policy: adopted since April 2011. 8.2% 12.4% 8.1% 15.0% 7.5% 2.1% 2.6% 1.9% 2.6% 1.8% 0.5% 0.6% 0.3% 0.4% 1.0% Jun 13 Sep 13 Dec 13 Mar 14 Jun 14 NPL 90 days / Credit Portfolio Clients Previous Credit Policy Total Clients New Credit Policy* 10.6% 14.0% 10.3% 15.2% 7.9% 2.6% 2.9% 2.3% 2.6% 2.0% 0.5% 0.6% 0.3% 0.5% 1.2% Jun 13 Sep 13 Dec 13 Mar 14 Jun 14 NPL 60 days / Credit Portfolio Clients Previous Credit Policy Total Clients New Credit Policy* Managerial ALL Expense1 in 2Q14, annualized, was 0.66% of the Expanded Credit Portfolio 13
  • Time Deposits (CDB) 26% DPGE I 30% LCA 16% LF & LCI 2% Interbank & Demand Deposits 3% Onlendings 11% Foreign Borrowings 12% June 13 3,142 3,082 3,893 3,930 4,135 Jun 13 Sep 13 Dec 13 Mar 14 Jun 14 R$million In Local Currency In Foreign Currency Funding 14 Product mix helps with cost reduction Time Deposits (CDB) 21% DPGE I 23% DPGE II 10% LCA 28% LF & LCI 3%Interbank & Demand Deposits 2% Onlendings 6% Foreign Borrowings 7% June 14 LCA and LCI account for 31% of funding volume Agribusiness letters of credit, Real estate letters of credit and Bank notes are represented, respectively, by LCA, LCI and LF. Insured time deposits are represented by DPGE. DPGE I and II are two types of DPGE and differ in cost and framework.
  • Guide Investimentos 15 In 2014, Guide entered into important alliances: Guide continues to strength its distribution network and is now present in important regions across the country. After the migration of all the clients of these partners, Guide will manage assets of around R$2 billion. AUM: R$500 million 14 independent investment advisors 1.320 Active Clients AUM: R$300 million 8 independent investment advisors 702 Active Clients In migration process AUM: R$500 million 43 independent investment advisors 1.080 Active Clients In migration process
  • 23.6 21.5 27.1 24.5 22.8 11.2 10.6 14.2 11.8 11.0 392 373 374 381 349 0 50 100 150 200 250 300 350 400 450 - 10.00 20.00 30.00 40.00 50.00 60.00 2Q13 3Q13 4Q13 1Q14 2Q14 2Q13 3Q13 4Q13 1Q14 2Q14 Personnel and Administrative Expenses Personnel Expense Administrative Expense Headcount Efficiency Ratio 16 • Personnel Expense: Headcount 8% lower in the quarter and 11% lower when compared to 2Q13. The effects on personnel expenses will be notice by the second half. • Administrative Expense: -7,5% in the quarter and +7,1 when compared to 2Q13, this last impact occurred specially due to period’s inflation and investments for improvements in the technological infrastructure of the Bank. 147.2% 79.3% 98.3% 100.5% 72.6% 2Q13 3Q13 4Q13 1Q14 2Q14 Efficiency Ratio * Information based on the managerial income statement of the financial conglomerate without Guide Investimentos.
  • Profitability 17 -20.6 2.0 -10.0 -9.9 1.1 2Q13 3Q13 4Q13 1Q14 2Q14 R$million Net Result The quarterly result of R$1.1 million already reflects a significant improvement from previous quarters, but was still impacted by: • the non-cash accounting effects of the discontinuation of the designation of hedge accounting of cash flows from a series of funding operations indexed to inflation indices (IPCA and IGPM), which are still protected by hedge operations; • the negative contribution from Guide Investimentos as result of all the investments made in recent quarters; • the still increasing investment banking, structured operations and sales desks which, despite the significant growth from the same period the previous year, still have tremendous potential for growth; • the need for economies of scale, considering our appetite for risk and its direct impact on loan spreads.
  • 569.6 574.5 674.2 667.1 671.4 Jun 13 Sep 13 Dec 13 Mar 14 Jun 14 R$million Shareholders’ Equity 14.6% 14.5% 14.8% 13.7% 13.3% Jun 13 Sep 13 Dec 13 Mar 14 Jun 14 Basel Index (Tier I) 5.7x 5.7x 5.7x 5.9x 5.8x Jun 13 Sep 13 Dec 13 Mar 14 Jun 14 Leverage Expanded Credit Portfolio / Equity Capital Structure and Ratings 18 Agency Rating Last Report Standard & Poor’s Global: BB-/Stable/ B National: brA/Stable/brA-2 Apr/14 Moody’s Global: Ba3/Negative/Not Prime National: A2.br/Negative/BR-1 Jul/13 Fitch Ratings National: BBB/Stable/F3 Sep/13 RiskBank Index: 9,98 Low Risk Short Term Jul/14