4Q11 Results Presentation
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4Q11 Results Presentation Presentation Transcript

  • 1. 4Q11 Results Presentation
  • 2. DisclaimerThis presentation may contain references and statements representing futureexpectations, plans of growth and future strategies of BI&P.These references and statements are based on the Bank’s assumptions andanalysis and reflect the management’s beliefs, according to their experience, tothe economic environment and to predictable market conditions.As there may be various factors out of the Bank’s control, there may besignificant differences between the real results and the expectations anddeclarations herewith eventually anticipated. Those risks and uncertaintiesinclude, but are not limited to our ability to perceive the dimension of theBrazilian and global economic aspect, banking development, financial marketconditions, competitive, government and technological aspects that mayinfluence both the operations of BI&P as the market and its products.Therefore, we recommend the reading of the documents and financialstatements available at the CVM website (www.cvm.gov.br) and at our InvestorRelations page in the internet (www.indusval.com.br/ir) and the making of yourown appraisal.
  • 3. Highlights Expanded Loan Portfolio grew around 13% in 4Q11 and 31% in 2011: ‒ Corporate: 28% of Loan Portfolio, +47% in the quarter and +150% in the year; ‒ Middle Market: The volume remained steady, despite the significant exit of lower quality loans. After finishing the exit of non-target credits, Middle Market portfolio will resume growth, in line with the strategy of loan portfolio balance of 45% of Corporate and 55% and Middle Market loans until the end of 2012. Latest funding at lower cost due to rating improvement, diversification of funding product mix and expansion of investors base. Net Profit increased by 41% in the quarter, accompanied by a slight increase in net margin and recovery in profitability ratios. Migration to Level 2 Corporate Governance Segment of BM&FBovespa in final phase. In 4Q11 we finished most of the workforce changes and the introduction of new products, systems and controls defined in the strategic plan. Great emphasis on the construction of stronger teams and the building of a meritocratic culture focused on excellence and results. 1
  • 4. Evolution of Credit PortfolioGrowth with quality assets 2,534 2,248 2,109 1,941 1,994 R$ million 4Q10 1Q11 2Q11 3Q11 4Q11 Loans in Reais Trade Finance Guarantees Agricultural Notes (CPRs) Promissory Notes (NPs) 2
  • 5. With Multi-Product Offering23 created or redesigned financial products 3
  • 6. Credit PortfolioBreakdown by Product Group Agro and Promissory Loans and Discount Operations in Notes (CPR/PNs) Reais share remained steady, with Guarantees 5% Issued significant growth in the Corporate 6% portfolio. Other 1% BNDES Trade Finance portfolio of US$265 8% Loans & million grew 3,8% in 4Q11, despite Discounts the foreign lines contraction. Trade in Reais Finance 62% 18% Agricultural Notes (CPRs) portfolio increased from R$40 million in 3Q11 to R$114 million in 4Q11. 4
  • 7. Credit PortfolioMaintenance of Corporate and Middle Market balance until the end of 2012 Other 3% Definition: Corporate 28% • Middle Market: companies with annual revenues from R$40 million to R$400 million; 4Q11 • Corporate: companies with annual revenues above R$400 million up to R$2 billion. Middle Market Corporate clients already account for 28% of loan 69% portfolio with 47% volume growth in the quarter and 150% in the year. Other Corporate 3% Middle Market portfolio volume maintained, 21% despite substantial exit of lower quality loans. The previously disclosed strategy of maintaining 3Q11 the Corporate / Middle Market credit portfolio mix Middle at 45% / 55% until the end of 2012 will continue. Market 76% 5
  • 8. Credit PortfolioExposure by client and terms of transactions 10 Other largestConcentration 24% 17% Client 60 largest borrowers account for 49% of Loan Portfolio, from 51% in 3Q11 11 - 60 and 52% in 4Q10. 61 - 160 32% 27% Average exposure by client: • Middle Market = R$ 2.7 million • Corporate = R$ 7.2 million +360 days 26% up 90 days 73% of Loan Portfolio to mature up toMaturity 40% 360 days. 181 to 360 days 15% 91 to 180 days 19% 6
  • 9. Credit PortfolioSignificant presence of Agribusiness and Food related activities 8% 2% 17% Agribusiness 2% Food & Beverage 2% Civil Construction 2% Automotive 3% Textile, Apparel and Leather 3% Power Generation & Distribution Pulp & Paper 3% Chemical & Pharmaceutical 15% Financial Services 3% Transportation & Logistics Metal industry 3% Education Oil & Biofuel 4% Retail & Wholesale 4% Individuals 14% Advertising and Publishing 4% Financial Institutions 5% Other Industries 6% 7
  • 10. Credit Portfolio Quality 89.7% 4Q11 86.9% 3Q11 85.8% 4Q10 AA A B C D-H Loans rated between D and H include: – R$ 119 million in normal payment performance = 5.3% of Loan Portfolio; – R$ 114 million overdue more than 60 days = 5.0% of Loan Portfolio. Default levels still related to transactions with medium-sized companies booked in previous years. Decrease of 1.3 p.p. in the 60 days default rate compared to 3Q11. Allowance for Loan Losses cover 133% of loans overdue +90 days. 8
  • 11. FundingEnsures liquidity and supports the growth of credit portfolio 2,533 2,420 2,247 2,230 2,031 R$ million 4Q10 1Q11 2Q11 3Q11 4Q11 in Reais in Foreign Currency 9
  • 12. FundingDiversification of sources to reduce costs Onlendings 9% Foreign Time Borrowings Deposits Local Funding accounts for 82% of total funding. 18% (CDBs) 29% There was a slight reduction in the cost of new local Interbank funding, due to the: Deposits 3% − improvement of risk perception among Demand Deposits investors, as evident from the three-notch raise 2% in the ratings assigned by Standard & Poor’s Agro & Financial Insured Time (BB/stable/brA+); Notes Deposits (LCA/LF) (DPGE) − diversification of the product mix (LCAs); 9% 30% − strong expansion of the investor base. Trade Finance funding accounts for 90% of foreign Foreign Funding – US$ million borrowings. 247 Despite the foreign funding remained contracted, our new funding in foreign currency totaled US$247 195 million in Dec/2011 from US$196 million in Dec/2010, up 26.6% in the year. 4Q10 4Q11 10
  • 13. Liquidity and Asset & Liability Management Free Cash Asset & Liability Management Assets Liabilities 1,027 1,087 923 914 887 959 733 642 620 474 415 335 R$ millionR$ million 253 4Q10 1Q11 2Q11 3Q11 4Q11 90 days 180 days 360 days +360 days Free Cash equivalent to 48% of Deposits and 154% of Shareholder’s Equity. 11
  • 14. ProfitabilityNet Interest Margin NIM NIM(a) 7.9% 6.5% 6.3% 6.6% 5.9% 5.2% 4.8% 4.6% 4.6% 3.7% 4Q10 1Q11 2Q11 3Q11 4Q11 Net Interest Margin 4Q11 3Q11 4Q11/3Q11 4Q10 4Q11/4Q10 2011 2010 2011/2010 A. Result from Financial Int. before ALL 49.3 45.0 9.5% 47.6 3.6% 170.6 190.2 -10.3% B. Average Interest bearing Assets 4,205.8 3,971.7 5.9% 3,036,4 38.5% 3,961.2 2,869.3 38.1% Adjustment for non-remunerated average Assets1 (1,139.7) (1,058.9) 7.6% (561.5) 103.0% (1,071.3) (546.7) 96.0% B.a Adjusted Average Interest bearing Assets 3,066.1 2,912.8 5.3% 2,474.9 23.9% 2,889.9 2,322.6 24.4% Net Interest Margin (NIM) (A/B) 4.8% 4.6% 0.2 p.p. 6.4% -1.6 p.p. 4.2% 13.7% -9.5 p.p. Adusted Net Interest Margin (NIMa) (A/Ba) 6.6% 6.3% 0.3 p.p. 7.9% -1.3 p.p. 5.7% 864% -2.7 p.p.1 Repos with amounts, maturities and rates equivalent both in assets and liabilities. 12
  • 15. Efficiency Ratio 79% 79% 78% 73% 74% 71% 65% 67% 61% 63% 4Q10 1Q11 2Q11 3Q11 4Q11 Efficiency Ratio Standardized Efficiency Ratio Standardized Efficiency Ratio includes management adjustments in order to: – eliminate non-recurring revenues and expenses related to the corporate and organizational restructuring; – standardize 4Q11 events related to the collective bargaining agreement paid in the quarter retroactively to September and the Executive Officers’ variable compensation not provisioned during the year; and – exclude sales revenues and costs of agricultural commodities from the activity of the acquired subsidiary of Sertrading to determine the efficiency ratio of the financial activity. 13
  • 16. Human Resources Increase in headcount, from 385 employees in 3Q11 to 421 professionals in 4T11, including: – Hiring of 10 trainees; – Hiring of 10 former interns. No significant increase of headcount in 2012 is expected. Focus on renovating and training the teams. Leadership training, personnel management and best practices in human resources. 360º Performance Evaluation with forced curve in order to identify and reward the best performances. 3rd Trainee Program: 3,500 candidates, from which 10 trainees were hired.14
  • 17. Profitability Net Profit - R$ million Net Profit increased 40.7% in 4Q11 due to the loan portfolio growth, the local funding 10,3 cost reduction and the credit recovery 5,9 5,1 7,3 observed in the quarter. 4Q10 1Q11 2Q11 3Q11 4Q11 2011 result was mainly affected by the increase in allowance for loan losses, with expense of R$101.6 million in 1Q11. Return on Average Equity (ROAE) - % Return on Average Assets (ROAA) - % 7,3 1,0 5,6 5,2 0,7 0,7 3,6 0,5 4Q10 1Q11 2Q11 3Q11 4Q11 4Q10 1Q11 2Q11 3Q11 4Q11 15
  • 18. Capital Structure Shareholder’s Equity – R$ million Leverage Credit Portfolio / Shareholder’s Equity 564 567 578 577 426 4,6 4,4 3,7 3,9 3,5 4Q10 1Q11 2Q11 3Q11 4Q11 4Q10 1Q11 2Q11 3Q11 4Q11 Basel Index (Tier I) High capitalization index. 23.7% 21.6% 21.1% 17.6% 18.2% Low leverage allows healthy portfolio growth. Discipline in monitoring the strategy and the business goals for improved efficiency, margins and profitability. 4Q10 1Q11 2Q11 3Q11 4Q1116
  • 19. Capital Distribution and Shareholder Remuneration Controlling Group 34% Individuals 20% Management 1% Treasury 1% Institutional Investors Foreign 14% Investors 30% Position as of 12.31.2011 2008 2009 2010 2011 Outstanding Shares 1 43,000,001 42,048,101 40,466,187 62,358,840 IOE gross amount (R$ million) 25.5 27.0 25.1 27.8 IOE gross amount per Share (R$) 0.59 0.64 0.61 0.53 Price to Book Value per Share 0.38 0.81 0.75 0.73 Market Value (R$ million) 171.6 348.6 321.7 420.9 1 Issued Shares - Treasury Shares17
  • 20. Ratings Agency Classification Last Report Global Scale: BB/ Stable/ B Standard & Poors Dec. 2011 Local Scale: brA+/ Stable/ brA-1 Global: Ba3/ Stable/ Not Prime Moody’s Nov. 2011 Local Scale: A2.br/ Stable/ BR-2 FitchRatings Local Scale: BBB/ Stable/ F3 Dec. 2011 Index: 10.08 RiskBank Jan. 2012 Low Risk to Short Term18