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3 q10 investor presentation

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3 q10 investor presentation

  1. 1. 1 Investor Presentation 3Q2010
  2. 2. 2 . Who we are . Business Segments . Competition . Financial Highlights
  3. 3. 3 IPO 1989 1991 1997 2005 2006 20102007 History in Brazil Arab Banking Corporation and local management acquire Roberto Marinho Group´s shares Current management starts running the bank The bank´s name changes to Banco ABC Brasil S.A. The bank structures its Middle Market operations Arab Bank Corporation and Roberto Marinho Group jointly initiate Banco ABC Roma SA, acting in the segments of corporate lending, trade finance and treasury 3
  4. 4. 4 Focus on Companies • Expertise in corporate credit risk analysis with remarkably low historical losses. • Wide range of products. • Winning combination of a strong controlling shareholder and an independent local Management team. 4 ABC Brasil strongly focuses on providing loans and structured products to mid-sized and large companies. Middle Market Other Corporate 29.9% 100% 94.0% 88.5% 86.3% 2,011 2,605 2,911 4,992 6,485 84.3% 6.0% 11.0% 11.8% 12.5% 8,509 Credit Portfolio Including Guarantees Issued. BRL Million. 84.1% 14.6% 31.2% 26.0% 10,725 13.1% 86.9% 0.5% 1.9% 3.2% 1.3% 2004 2005 2006 2007 2008 2009 3Q10Sep10
  5. 5. 5 RO AC AM RR PA AP MA PI CE BA MG ES RJ SP PR SC RS MS MT GO DF RN PB PE AL SE Geographical presence 5 •Banco ABC Brasil has business platforms in seven states that are responsible for 70% of the Brazilian GDP. •From these business platforms other states are covered. TO BUSINESS PLATFORMS CORPORATE MIDDLE SP Capital 3 3 SP Countryside 1 1 South 1 3 RJ 1 1 MG - 1 GO - 1 TOTAL 6 10 ABC Brasil offices
  6. 6. 6 Ownership Structure Local Management 14.4% ABC 85.6% Voting Capital ABC 56.5% Local Management 9.5% Associates 1.0% Free float 33.0% Total Capital 6 Support of a strong international controlling shareholder.
  7. 7. 7 Controlling Shareholder International bank headquartered in Bahrain Listed in the Bahrain stock exchange Present in 21 countries Main Shareholders Central Bank of Libya 41.6% Kuwait Investment Authority 29.7% Abu Dhabi Investment Authority 17.7% 7 Arab Banking Corporation Total Assets: US$ 26.8 Bn Shareholders’ Equity: US$ 3.4 Bn Ratings: BBB+ A3BBB+ 3Q10
  8. 8. 8 Ratings Strong controlling shareholder Access to attractive funding Independent management Agile decision making process Successful track record Outstanding performance in corporate credit Local Global Aa1.Br Baa3 AA- BB+ Our high rating is a consequence of the combination of independent management, successful track record and a strong controlling shareholder. 8 Investment grade
  9. 9. 9 Corporate Governance ABC Brasil is listed at Bovespa Nivel 2 and has always followed strict Corporate Governance practices, with shareholders represented in the Board of Directors. Members • 3 representing ABC • CEO • 2 independent members Main responsibilities Overall business guidelines, including its long-term strategy and performance control and monitoring. Election and removal of the members of the Executive Board and monitoring the performance of their duties. Board of Directors Board Risk Committee Audit ABC Brasil’s management, review the Bank’s financial statements and report their conclusions to the Bank’s shareholders. Fiscal Council • 4 members of the Board of Directors • 2 representing ABC • 1 representing minority shareholders Delegate Credit Limits to Credit Committees. Approval of specific transactions that exceeds the delegated limits. Risk Management Guidelines. 9 Review financial statements Assess the effectiveness of internal and independent audits Audit Comitee • 2 independent members of the Board of Directors • 1 accounting specialist
  10. 10. 10 Corporate Governance 10 ABC Brasil’s decision process is based on committees and no one has the authority to individually approve a transaction or a product. Main committees: Credit Corporate Committee Products Committee Technology Committee Credit Middle Committee Compliance Committee ALCO Results Committee Executive Directors Meeting
  11. 11. 11 Successful Track Record 11 371 727 640 1,095 1,619 2,452 2,061 1,749 2,011 2,605 2,911 4,992 6,485 8,509 0.0% 0.7% 0.0% 0.6% 0.0% 0.1% 0.1% 0.8% 1.4% 0.0% 0.0% 0.2% 0.2% 0.6% 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Credit Portfolio Losses / Credit Portfolio BRL million Mexican Crisis Asian Crisis Russian Crisis Devaluation of BRL “Apagão” September 11th Argentinean Crisis Presidential Elections of Lula Banco Santos Bankruptcy Subprime Growth with low losses despite adverse economic conditions. Losses / Loan Portfolio
  12. 12. 12 . Who we are . Business Segments . Competition . Financial Highlights
  13. 13. 13 Corporate Companies with annual revenues over BRL 250 million 13 CREDIT PORTFOLIO (BRL million)GEOGRAPHICAL DISTRIBUTION Focus, agility and expertise in credit analysis are key differentiating features. 6.1% 6,305.0 7,157.2 8,079.8 8,790.8 9,323.9 3.858,6 4.410,4 4.950,3 5.426,1 5.784,0 2.446,4 2.746,8 3.129,4 3.364,7 3.539,9 3Q09 4Q09 1Q10 2Q10 3Q10 Guarantees issued Loans São Paulo - Capital; 57% São Paulo - Countryside; 21% Rio de Janeiro; 14% South; 8% 3Q09 2Q10 3Q10 Average Ticket (BRL million) 11.5 12.9 13.7 Duration (days) 322 360 376 Groups 549 679 682
  14. 14. 14 Middle Market Companies with annual revenues from BRL 30 to 250 million 14 CREDIT PORTFOLIO (BRL million)GEOGRAPHICAL DISTRIBUTION Besides expertise in credit analysis, state of the art collateral controls are essential. Sep 10Sep 09 São Paulo - Capital; 45% São Paulo - Countryside; 10% Rio de Janeiro; 10% South; 30% BH; 6% 3Q09 2Q10 3Q10 Average Ticket (BRL million) 1.8 2.0 2.0 Duration (days) 241 261 257 Groups 547 695 717 1.0% 984.4 1,242.0 1,314.3 1,388.0 1,401.8 932,5 1.173,7 1.252,2 1.346,1 1.365,3 51,9 68,3 62,1 41,9 36,4 3Q09 4Q09 1Q10 2Q10 3Q10 Guarantees issued Loans 55,8% 44,7% 44,2% 55,3% Other SP Capital
  15. 15. 15 Other Activities Treasury Investment Banking Pricing & Asset Liability Management Proprietary Trading Hedge & Derivatives 15 FIDC Debentures Promissory Notes Capital Markets M&A ABC Brasil is prepared to meet the growing demand of companies for sophisticated financial products in a developing capital markets scenario in Brazil.
  16. 16. 16 . Who we are . Business Segments . Competition . Financial Highlights
  17. 17. 17 Brazilian Banking Sector Competitive advantages in corporate segment Big retail banks 17 Mid-sized international banks Mid-sized family owned banks Scale Funding Products Agility Focus
  18. 18. 18 Large Corporate CorporateMiddleMarket Revenues Range (BRL Mi) 2,000+ 250- 2,000 30-250 Individuals and small companies Retail Main Competitors Big retail banks Middle-sized international banks 18 Big retail banks Middle-sized international banks Big retail banks Middle-sized family owned banks Big retail banks Middle-sized international banks Middle-sized family owned banks NUMBER OF CLIENTS ABC Brasil focuses on the Corporate and Middle Market segments. Brazilian Banking Sector
  19. 19. 19 . Who we are . Business Segments . Competition . Financial Highlights
  20. 20. 20 Credit Portfolio Quality 20 Ratings according to Brazilian Central Bank resolution nº 2.682. Percentage of portfolio. Segments Loan Portfolio * (BRL million) Write Off (BRL million) Write Off / Loan Portfolio LLR ** (BRL million) LLR ** / Loan Portfolio Past Due > 90 days (BRL million) Past Due > 90 days / Loan Portfolio Corporate 5,784.0 4.3 0.07% 67.5 1.17% 5.2 0.09% Middle Market 1,365.3 6.2 0.46% 49.6 3.63% 9.7 0.71% Total - 3Q10 7,149.4 10.6 0.15% 117.0 1.64% 14.9 0.21% D-H 2.4% AA-C 97.6% * Excluding guarantees issued. ** Loan Loss Reserves. 2002 2003 2004 2005 2006 2007 2008 2009 0.1% 0.7% 1.2% 0.0% 0.0% 0.2% 0.2% 0.6% 1.8% 2.7% 1.6% 1.2% 1.4% 1.0% 2.2% 2.3% Losses Loan loss reserves Percentage of portfolio.
  21. 21. 21 Credit Portfolio Quality 20 1,03% 0,99% 0,98% 1,05% 2,23% 2,81% 2,98% 2,64% 2,25% 1,92% 1,78% 1,64% 0,21% 0,25% 0,28% 0,34% 0,64% 1,18% 0,95% 0,65% 0,57% 0,33% 0,23% 0,21% 0,17% 0,11% 0,04% 0,05% 0,04% 0,16% 0,17% 0,28% 0,09% 0,32% 0,12% 0,15% 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 Loan Loss Reserves NPL (over 91 days) Write Off 0.87% 0.71% 0.68% 0.74% 1.80% 2.30% 2.31% 2.16% 1.83% 1.52% 1,29% 1,17% 0.14% 0.05% 0.15% 0.10% 0.38% 0.98% 0.61% 0.38% 0.51% 0.23% 0,12% 0,09% 0.04% 0.08% 0.01% 0.03% 0.00% 0.00% 0.13% 0.15% 0.04% 0.27% 0,00% 0,07% 2.30% 2.39% 2.33% 2.24% 4.03% 5.23% 5.54% 4.39% 3.65% 3.33% 3,64% 3,63% 0.66% 1.27% 0.95% 1.39% 1.84% 2.22% 2.28% 1.06% 0.69% 0.65% 0,60% 0,71% 0.08% 0.26% 0.20% 0.15% 0.13% 0.75% 0.13% 0.69% 0.21% 0.37% 0,50% 0,46% CORPORATE MIDDLE MARKET 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09
  22. 22. 22 Funding 22 Strong funding supply with attractive prices in both local and international markets. BRL million
  23. 23. 23 Shareholder’s equity and Basel index 23 An offshore issuance of Subordinated Notes was concluded on April 8th in the amount of USD300 million, raising the bank´s capital and its ability to leverage. 410 405 422 439 459 483 1.083 1.086 1.107 1.132 1.159 1.162 1.175 1.159 1.182 1.218 1.247 1.279 1.312 14,0% 13,4% 14,0% 13,9% 13,2% 13,6% 26,7% 23,1% 20,7% 19,2% 16,7% 18,0% 18,1% 17,9% 15,4% 14,6% 13,3% 17,8% 16,9% 12,0% 14,0% 16,0% 18,0% 20,0% 22,0% 24,0% 26,0% 28,0% - 200,0 400,0 600,0 800,0 1.000,0 1.200,0 1.400,0 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 Shareholder's equity (BRL M) Basel Index IPO Sub. Debt
  24. 24. 24 Revenues 24 MANAGERIAL NET INTEREST INCOME INCOME FROM SERVICES RENDERED * Treasury result with managerial adjustments NIM (p.a.) NII (BRL million) 3Q10 2Q10 Chg.(%) 3Q09 Chg.(%) 9M10 9M09 Chg.(%) Financial Margin with Clients 109.7 104.7 4.8 86.0 27.6 308.2 260.4 18.4 Treasury * 7.2 8.6 7.8 30.5 16.9 Net Interest Income before Loan-Loss Provisions (LLP) 116.9 113.3 3.2 93.8 24.6 338.7 277.2 22.2 LLP (8.9) (9.0) (1.1) (8.6) 3.5 (31.7) (49.1) (35.4) LLP (Brazilian Central Bank resolution nº 2,682) (9.4) (11.6) (19.0) (17.0) (44.7) (34.8) (52.4) (33.6) Additional LLP 0.5 2.6 8.4 3.1 3.4 Total 108.0 104.3 3.5 85.2 26.8 307.0 228.2 34.5 Income from services rendered (BRL million) 3Q10 2Q10 Chg.(%) 3Q09 Chg.(%) 9M10 9M09 Chg.(%) Guarantees issued 17.4 16.5 5.7 12.4 41.1 48.8 29.7 64.7 Underwriting Fees and M&A 0.5 1.6 0.0 4.5 0.8 Banking Fees 4.8 8.1 (40.3) 3.7 29.8 20.1 9.4 113.8 Total 22.7 26.2 (13.2) 16.1 41.1 73.4 39.9 84.1 3Q09 4Q09 1Q10 2Q10 3Q10 9M09 9M10 5,6% 5,5% 5,7% 5,3% 5,1% 5,6% 5,3%
  25. 25. 25 Expenses 25 PERSONNEL, ADMINISTRATIVE AND PROFIT-SHARING EXPENSES EFFICIENCY RATIO (including profit sharing) Expenses (BRL million) 3Q10 2Q10 Chg.(%) 3Q09 Chg.(%) 9M10 9M09 Chg.(%) Personnel (23.1) (22.4) 3.2 (19.5) 18.4 (66.4) (57.6) 15.3 Other administrative expenses (13.7) (13.5) 1.8 (14.1) (2.5) (40.6) (39.6) 2.5 Profit Sharing (15.0) (15.4) (11.8) 27.1 (45.8) (28.5) 60.7 Total (51.8) (51.3) 1.1 (45.4) 14.2 (152.8) (125.7) 21.6 41,6% 41,7% 38,0% 37,6% 37,0% 39,9% 37,3% 3Q09 4Q09 1Q10 2Q10 3Q10 9M09 9M10
  26. 26. 26 Profitability 26 NET INCOME BRL million ROAE (p.a.) * Excluding extraordinary effects of divestment of participation in CETIP and adhesion to the Federal Government´s program for settlement of tax debits. * * 38,1 44,5 46,9 50,2 51,1 97,4 148,2 3Q09 4Q09 1Q10 2Q10 3Q10 9M09 9M10 13,0% 14,8% 15,2% 15,9% 15,8% 11,1% 15,7% 3Q09 4Q09 1Q10 2Q10 3Q10 9M09 9M10
  27. 27. 27 High Rating with Strong Sponsor & Independent Management High Level of Corporate Governance Expertise in Corporate Credit Risk Assessment Agile Decision Making & Experienced Management Sophisticated and Diversified Products Strong Business Origination Capacity Compelling investment case 27
  28. 28. 28 Investor Relations Sergio Lulia Jacob Director Vice-President and IRO Alexandre Sinzato, CFA Head of Investor Relations Web Site: www.abcbrasil.com.br/ir Email: ri@abcbrasil.com.br Phone: +55 (11) 3170-2186 28
  29. 29. 29 Credit Middle Market Credit Corporate Deputy CEO Anis Chacur Neto Auditing Committee Information Technology Financial Control Group Audit / Credit Group Bahrein Internal Auditing Board Commercial Corporate VP Jose Eduardo C. Laloni Legal Risk Compliance Capital Markets Investment Banking CFO / COO Sergio R. Borejo Treasury & IR VP Sergio Lulia Jacob Commercial Middle VP Gustavo A. Lanhoso Commercial Middle Market Back Office Human Resources CEO Tito Enrique da Silva Neto Commercial Corporate International / FI Treasury Investor Relations Products Appendix – Corporate Structure 29 Business Intelligence

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