2. 2/32Investor Relations | 1Q13 |
History and Profile
PINE
History
Business Strategy
Competitive Landscape
Focus on the Client
Corporate Credit
FICC
PINE Investimentos
Rating Upgrades
Highlights and Results
Corporate Governance and PINE4
Organizational Structure
Corporate Governance
Committees
PINE4
Ownership Structure
Social Investment and Responsibility
Summary
4. 4/32Investor Relations | 1Q13 |
PINE
Specialized in providing financial solutions for large clients…
Credit Portfolio by Annual Client Revenues
Profile
March 311h, 2013
Focused on establishing long-term relationships
Profound knowledge and product penetration
Business is structured along three primary business lines:
• Corporate Credit: credit and financing products
• FICC: instruments for hedging and risk
management
• PINE Investimentos: Capital Market, Financial
Advisory, Project & Structured Finance and
Research
Over R$2
billion
39%
R$500
million to
R$2 billion
39%
R$250million
to R$500
million
15%
Up to R$250
million
7%
5. 5/32Investor Relations | 1Q13 |
155 184 222 341 521 620 755 663 761
1,214
2,854 3,104
4,191
5,746
6,963
7,912
8,379
18
62
121 126 140 136 152 171
209
335
801
827 825
867
1,015
1,220
1,260
Dec-97
Dec-98
Dec-99
Dec-00
Dec-01
Dec-02
Dec-03
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-10
Dec-11
Dec-12
Mar-13
Corporate Credit Portfolio (R$ Millions)
Shareholders' Equity (R$ Millions)
History
...with extensive knowledge of Brazil’s corporate credit cycle.
1997
Noberto and Nelson
Pinheiro sell their
stake in BMC and
found PINE
1939
Pinheiro Family
founds
Banco Central do
Nordeste
1975
Noberto Pinheiro
becomes one of
BMC’s controlling
shareholders
Devaluation
of the real
Nasdaq Sept. 11 Brazilian
Elections
(Lula)
SubprimeAsian
Crisis
Russian
Crisis
European
Community
End of 2007
Focus on expanding the Corporate Banking franchise
Discontinuation of the payroll-deductible loan business
May, 2007
Creation of PINE Investimentos products line and
opening of the Cayman branch
2005
Noberto Pinheiro becomes PINE’s sole
shareholder
October, 2007
Beginning of the FICC Business
October, 2011
Subscription of PINE’s capital by DEG
August, 2012
Subscription of PINE’s capital by DEG, Proparco, Controlling Shareholder and Management
November, 2012
Opening of the broker dealer in New York, PINE Securities USA LLC
March, 2007
IPO
May, 2013
16 years
7. 7/32Investor Relations | 1Q13 |
Competitive Landscape
PINE serves a niche market of companies with few options for banks.
100% focused on providing complete service
to companies, offering customized products
Corporate & SME
SME & Retail
Retail
100% Corporate
Large Multi-Services banks
Market
Consolidation of the banking sector has
decreased the supply of credit lines and financial
instruments for corporate
Foreign banks are in a deleveraging process
PINE
Full service Bank – Credit, Hedging, and
Investment Bank products – with room for
growth
~10 clients per officer
Competitive Advantages:
Focus
Fast response: Strong relationship with
clients, with the credit committee
meeting twice a week and response times
to clients of no more than one week
Specialized services
Tailor-made solutions
Product diversity
Foreign and
Investment Banks
8. 8/32Investor Relations | 1Q13 |
Focus Always on the Client
Strategy of product diversity, tailored to meet the needs of each individual client.
Working Capit
CDIs
Bank
Guarantees
Exclusive Funds
Portfolio
Management
Swap NDFs
Structured Swaps
BNDES Onlending
Bank Guarantees
Compror
ACC/ACE
Export Finance
Finimp
Lettersof Credit
2,770 onlending
Overdraft
Accounts
Syndicated and
Structured Loans
Fixed Income
Currencies
Commodities
Equities
CDBs
CDs
RDBs
LCAs
LCIs
DebenturesCRIs
CCBs
Eurobonds
Private
Placements
Financial
Letters
Clients
Treasury
Corporate
Credit
FICC
PINE
Investimentos
Distribution
Capital
Markets
Financial Advisory
Local Currency
Foreign Currency
Fixed Income Currencies
Commodities
Pricing of Assets and
Liabilities
Liquidity
Management
Trading
Local Currency
Onlending
Foreign Currency
Trade Finance
Participation
Funds
Options
Working CapitalUnderwriting
Corporate &
Structured
Finance
M&A
Project Finance
Structured
Finance
Private Credit
Funds
Real Estate Funds
Rural Credit
Aircraft
Financing
Investment
Management
In addition to the
headquarters located in the
cityof São Paulo, PINE has 12
branches throughout Brazil, in
the States of Ceará, Mato
Grosso, Minas Gerais, Paraná,
Pernambuco, Rio de Janeiro,
Rio Grande do Sul, Santa
Catarina and São Paulo. The
origination network also
counts with a Cayman branch
and a broker dealer in New
York (USA).
9. 9/32Investor Relations | 1Q13 |
Corporate Credit
Actions Credit Committee
Strong track record and solid credit origination and approval process.
Credit Approval: Electronic Process
Origination Officers
Credit origination Credit analysis, visit to clients, data
updates, interaction with internal
research team
Credit Analysts
Regional Heads of
Origination and Credit
Analysis
Presentation to the Credit Committee
CRO, Executive
Directors and Analysts
of Credit
Centralized and unanimous
decision making process
CREDIT COMMITTEE
Meets twice a week – reviewing 20 proposals on average
Minimum quorum: 4 members - attendance of CEO or
Chairman is mandatory
Members:
Chairman of the Board
CEO
Chief Operating Officer
Chief Administrative Officer
Chief Risk Officer
Participants:
FICC Executive Director
Credit Analysts
Other members of the Corporate Banking
origination team
Personalized and agile service, working closely with
clients and keeping a low client to account officer ratio:
each officer handles ~10 economic groups
Geographic coverage of clients, providing the bank with
local and extremely up-to-date credit intelligence and
information
Established long term relationships with more than 600
economic groups
Origination network is comprised of 12 branches divided
into 14 origination platforms in Brazil’s major economic
centers
More than 30 credit analysts, assuring that analysis is
fundamentally driven and based on industry-specific
intelligence
Efficient loan and collateral processes, documentation,
and controls, which has resulted in a low NPL track record
Discussion on sizing, collateral,
structure etc.
10. 10/32Investor Relations | 1Q13 |
March 31, 2013 R$ millions
Scenario on March, 31:
Duration: 149 days
Mark-To-Market : R$174 million
Stress Scenario (Dollar: +31% and Commodities Prices: -30%):
Stressed MTM: R$298 million
Fixed Income: Fixed, Floating, Inflation, Libor
Currencies: Dollar, Euro, Yen, Pound, Canadian Dollar,
Australian Dollar
Commodities: Sugar, Soybean (Grain, Meal and Oil), Corn,
Cotton, Metals, Energy
1Source: Cetip Report, March 2013
FICC
Proven trackrecord: 2nd in commodity derivatives1.
Client Notional Derivatives Portfolio by Market
Market Segments
Notional Value and MtM
Portfolio Profile
Commodities
20%
Fixed
Income
20%
Currencies
60%
4,287 4,720 4,875 5,036 5,180
126
256 238
197 174
354
597 629
498
298
Mar-12 Jun-12 Sept-12 Dec-12 Mar-13
Notional value
MtM
Stressed MtM
11. 11/32Investor Relations | 1Q13 |
Capital Markets: Structuring and Distribution of Fixed
Income Transactions.
Financial Advisory: Project & Structured Finance, M&A,
and hybrid capital transactions.
Research: Macro, Commodities, and Corporate.
R$ millions R$ millions
R$50,000,000
January, 2013
Capital Increase
Advisor
US$250,000,000
April, 2013
Senior Notes
Bookrunner
R$800,000,000
January, 2013
Debentures
Coordinator
16
9
10
1Q12 4Q12 1Q13
+11.1%
PINE Investimentos
Consolidation of the investment done through the years in the franchise.
Volume of Underwriting Transactions
Transactions
Revenues
317
160
1,045
1Q12 4Q12 1Q13
+553.1%
12. 12/32Investor Relations | 1Q13 |
Rating Upgrades
...with market recognition and positive evaluation by rating agencies.
Moody's explained that the positive outlook reflects
PINE’s profitability through a well-executed
strategy, and which has ensured earnings
recurrence. The rating action also captures the
bank's improved funding diversification, well
managed asset quality metrics and its good liquidity
and capital management.
The agency based its ratings on the strong asset-
quality, adequate liquidity, capital, and earnings.
S&P also emphasizes the gradual funding
diversification, through foreign issuances,
securitizations, and the recent capital increase
subscribed by DEG.
Fitch attributed this upgrade to PINE’s ability to
preserve and to enhance its credit profile in the
last several years. Also, the ratings reflect PINE’s
consistent performance, higher funding
diversification and sound asset quality, liquidity and
capitalization. According to Fitch, PINE has
managed carefully its growth in the corporate
segment with a strategy of revenue diversification
and cross-selling aiming to reduce the dependence
of revenues from lending and to increase the
participation of its FICC Business and PINE
Investimentos.
August 2011
Upgrade
S&P
December 2011
Upgrade
S&P
May 2012
Upgrade
pela Fitch
May 2010
Upgrade
Fitch
August 2012
Upgrade
Perspective
Moody’s
May 2013
Upgrade
Fitch
14. 14/32Investor Relations | 1Q13 |
Recurring results.
1Q13 Events and Highlights
Positive revenue contributions from all business lines in the quarter: 56.6% from Corporate Credit, 34.1% from
FICC, 7.6% from PINE Investimentos, and 1.7% from Treasury.
Positive liquidity gap maintained for over 11 quarters: 15 months for credit, versus 17 months for funding.
Liquid balance sheet, with cash position of R$1.4 billion, equivalent to 42% of time deposits.
PINE continues to be ranked among the 15 largest players in derivative transactions and the 2nd largest in
commodity derivatives according to CETIP (OTC Clearing House).
On April 19, the Central Bank of Brazil approved the capital increase made by Proparco in the Bank. The
transaction resulted in the issuance of 2,211,213 preferred shares, totaling approximately R$32 million, with the
participation of other shareholders who exercised their preemptive rights at the price of R$14.28 per share. The
transaction resulted in a BIS ratio improvement of 40 bps.
On April 25, DEG disbursed the first transaction of the PINE-DEG partnership, totaling US$16 million with an eight-
year term for a company in the autoparts sector.
On April 30, we concluded our first DCM transaction through our New York broker dealer. The deal amounted to
US$250 million for a Sugar and Ethanol company in the State of São Paulo.
1
2
3
4
5
6
7
15. 15/32Investor Relations | 1Q13 |
R$ millions
1 Includes Stand-by Letters of Credit, Bank Guarantees, Credit Securities to be Received and Private Securities (bonds, CRIs, eurobonds and fund shares)
7,426 8,405
Mar-12 Mar-13
Loan Portfolio1
13.2%
1,029 1,260
Mar-12 Mar-13
Shareholders' Equity
22.4%
31 30
1Q12 1Q13
Fee Income
-3.2%
47 46
1Q12 1Q13
Net Income
-2.1%
1Q13 Financial Highlights
The main performance indicators were within expectations in the quarter...
19.5% 15.5%
1Q12 1Q13
ROAE
-400 bps
6,443 6,589
Mar-12 Mar-13
Funding
2.3%
16. 16/32Investor Relations | 1Q13 |
44% 58% 58%
56% 42% 42%
Mar -11 Mar -12 Mar -13
More than 1 product 1 product
2.7
3.0
2.8
Mar -11 Mar -12 Mar -13
Product and Revenue Diversification
... with contributions from all business lines, fruit of the strategy of complete service to clients.
Clients with more than one product Penetration Ratio – Clients with more than one product
Revenue Mix
Corporate
Credit
57.3%
FICC
24.3%
Treasury
8.2%
PINE
Investimentos
10.2%
1Q12
Corporate
Credit
56.6%
FICC
34.1%
Treasury
1.7%
PINE
Investimentos
7.6%
1Q13
17. 17/32Investor Relations | 1Q13 |
5.0% 5.5%
4Q12 1Q13
+50 bps
Increased activity in the FICC business
Loan portfolio growth
Cash reserves returned to approximately 40% of deposits
Net Interest Margin
NIM Evolution Impacts in the Period
NIM Composition
R$ millions
1Q13 4Q12 1Q12 QoQ YoY
Income from financial intermediation 102 93 122 9.7% -16.4%
Overhedge effect (2) (1) (1) 100.0% 100.0%
Income from financial intermediation ex-overhedge 100 92 121 8.7% -17.4%
Provision for loan losses (13) (19) (11) -31.6% 18.2%
Income from financial intermediation after provision 87 73 110 19.2% -20.9%
NIM is within the guidance range.
18. 18/32Investor Relations | 1Q13 |
R$ millions
1Q13 4Q12 1Q12 QoQ YoY
Operating expenses 1
50 49 46 2.0% 8.7%
(-) Non-recurring expenses 1 1 1 - -
Recurring Operating Expenses (A) 49 48 45 2.1% 8.9%
Revenues 2
(B) 130 122 152 6.6% -14.5%
Ratio (A/B) 37.7% 39.3% 29.5% -160 bps 820 bps
1
Other administrative expenses + tax expenses + personnel expenses
2
Gross Income from financial intermediation - provision for loan losses + fee income + overhedge effect
Expenses and Efficiency Ratio
Expenses
Efficiency Ratio
22
23 22
20
22
24
29.5%
39.3% 37.7%
1Q12 4Q12 1Q13
Personnel Expenses
Other Administrative Expenses
Efficiency Ratio (%)
Rigorous management and control of expenses.
19. 19/32Investor Relations | 1Q13 |
R$ millions
3,136 3,175 3,329 3,289 3,389 3,382 3,274 3,377 3,550
71 122
251 322 367 621 683
787 670
881
912
881 883
884
822 800
853 8261,117
1,372
1,534 1,687
1,684
1,599 1,699
2,114
2,501
622
772
756
782
1,021
1,154 942
781
832
230
190
124
102
81
64
47
36
26
Mar -11 Jun-11 Sept-11 Dec-11 Mar -12 Jun-12 Sept-12 Dec-12 Mar -13
Individuals: 0.3%
Trade Finance: 9.9%
Bank Guarantees: 29.8%
BNDES Onlending: 9.8%
Private Securities +
Working Capital: 50.2%
6,545
6,875
7,065
7,426
7,641
7,444
7,948
8,405
6,057
1 Includes Stand-by Letters of Credit, Bank Guarantees, Credit Securities to be Received and Private Securities (bonds, CRIs, eurobonds and fund shares)
Loan Portfolio1
The portfolio maintained its growth to reach R$8.4 billion in March...
20. 20/32Investor Relations | 1Q13 |
Sugar and Ethanol
15%
Electric and
Renewable Energy
12%
Construction
11%
Agriculture
8%
Infrastructure
7%
Specialized
Services
6%
Transportation and
Logistics
5%
Metallurgy
4%
Foreign Trade
4%
Beverages and
Tobacco
3%
Vehicles and Parts
3%
Telecom
3%
Food Industry
3%
Chemicals
2%
Metals and Mining
2%
Meatpacking
2%
Construction
Material
2%
Financial
Institutions
2% Other
6%
Sugar and Ethanol
20%
Construction
9%
Agriculture
8%
Infrastructure
8%
Electric and
Renewable Energy
8%
Foreign Trade
5%
Transportation and
Logistics
5%
Food Industry
4%
Specialized
Services
4%
Meatpacking
3%
Beverages and
Tobacco
3%
Metallurgy
3%
Vehicles and Parts
3%
Chemicals
2%
Financial
Institutions
2%
Telecom
2%
Construction
Material
2% Other
9%
1Q13 1Q12
Reduced exposure of the Sugar and Ethanol sector, from 20% to 15%;
Increased participation in other sectors such as Electric and Renewable Energy, and Construction;
Reshuffle of the 20 largest clients in approximately 20%;
20 largest clients represented 29% of the total portfolio.
Continuous Loan Portfolio Management
...with sector diversification...
21. 21/32Investor Relations | 1Q13 |
AA-A
56.0%
B
30.4%
C
9.2%
D-E
1.4%
F-H
3.0%
3.4%
3.7% 3.5%
3.3% 3.4%
Mar-12 Jun-12 Sept-12 Dec-12 Mar-13
March 31, 2013
0.7%
0.6%
0.8%
1.2% 1.2%
0.2% 0.2%
0.4%
0.6% 0.6%
Mar-12 Jun-12 Sept-12 Dec-12 Mar-13
Contracts overdue
Installments overdue
Contracts Overdue: Total amount of the contracts overdue for more than 90 days / Loan Portfolio
excluding Bank Guarantees and Stand-by Letters of Credit.
Installents Overdue: Total amount of installments overdue for more than 90 days / Loan Portfolio
excluding Bank Guarantees and Stand-by Letters of Credit.
Credit Coverage: Provision / Loan Portfolio excluding Bank Guarantees and Stand-by Letters of
Credit.
Loan Portfolio Quality
... quality, collaterals, and adequate credit coverage.
Loan Portfolio Quality
Credit Coverage
Non Performing Loans > 90 days
Collaterals
Products
Pledge
39%
Receivables
28%
Properties
Pledge
30%
Investments
2%
Guarantees
1%
26. 26/32Investor Relations | 1Q13 |
Organizational Structure
Non-bureaucratic, entrepreneurial, and meritocratic culture with a flat hierarchy.
CEO
Noberto Pinheiro Jr.
COO
Norberto Zaiet
CRO
Gabriela Chiste
CAO
Ulisses Alcantarilla
CFO
Susana Waldeck
Origination
Investment Banking
Sales & Trading
Research Macro/
Commodities/Corporate
International
Asset & Liabilities Back
Office
Legal
Collaterals Management
Special Situations
Middle Office
Controlling
Accounting
Tax Planning
IT
Accounts Payable
Office Management
Marketing
Investor Relations
Credit
Corporate Research
Compliance , Internal
Controls and IT Security
Credit, Market, Operational
and Liquidity Risks
Financial Modeling
INTERNAL AUDIT
Tikara Yoneya
COMPENSATION
COMMITTEE
AUDIT
COMMITTEE
EXTERNAL AUDIT
PWC
Noberto Pinheiro Noberto Pinheiro Jr. Maurizio Mauro Gustavo Junqueira Mailson da Nóbrega
Chairman Vice Chairman Independent
Director
External
Director
Independent
Director
HUMAN RESOURCES
Sidney Vilhena
BOARD
27. 27/32Investor Relations | 1Q13 |
Corporate Governance
PINE commits to best corporate governance practices…
Two Independent Members and one External Member on the Board of Directors
Mailson Ferreira da Nóbrega: Brazil’s Finance Minister from 1988 to 1990
Maurizio Mauro: Former CEO of Booz Allen Hamilton and Grupo Abril
Gustavo Junqueira: Former Head of PINE Investimentos, Member of the Board of Directors at
EZTEC, Financial Advisor at Arsenal Investimentos and CFO at Gradiente Eletrônica
São Paulo Stock Exchange (BM&FBovespa) Level 2 Corporate Governance
Audit and Compensation Committee reporting directly to the Board of Directors
100% tag along rights for all shareholders, including non-voting shares
Arbitration procedures for fast settlement of litigation cases
First Brazilian bank to release BR GAAP and IFRS quarterly
28. 28/32Investor Relations | 1Q13 |
Committees
…favoring collective decision making.
Main decisions are taken by committees.
Non-stop exchange of knowledge, ideas, and information.
Transparency.
CEO
Bi-annuallyMonthly
AUDIT
COMMITTEE
BOARD OF DIRECTORS
COMPENSATION
COMMITTEE
COMMITTEES
CREDIT
ASSET & LIABILITY
COMMITTEE
ALCO
EXECUTIVE
TRANSACTIONS
MONITORING
HUMAN
RESOURCES
INVESTMENT
BANK
PERFORMANCE
EVALUATION
IT ETHICS
INTERNAL
CONTROLS AND
COMPLIANCE
RISK
Twice a week WeeklyMonthly Twice a month Every 2 monthsWeekly Monthly Quarterly On demandEvery 2 months
45 days
45 days
29. 29/32Investor Relations | 1Q13 |
R$ thousands
PINE4
Price (R$) 14.44
P/BV 1.3x
P/E(1) 7.6x
7.8%
6.6% 6.5%
4.5% 4.3%
1.5%
PINE4 Bank 1 Bank 2 Bank 3 Bank 4 Bank 5
Average: 4.7%
PINE4
PINE4 Evolution (since 2012)
Multiples
Average Daily Traded Volume
Dividend Yield
Dividend Yield: Average daily closing prices of the stocks in 1Q13 / Dividends and Interest on Own
Capital of the last twelve months
75
80
85
90
95
100
105
110
115
120
125
PINE4: +12.0%
IBOV: -2.6%
162
272 266 275
524
1Q12 2Q12 3Q12 4Q12 1Q13
+90.5%
(1) Considers the market consensus for the 2013 net income; source: Bloomberg
30. 30/32Investor Relations | 1Q13 |
Ownership Structure
Highlights
Issuance of 2,211,213 new shares for the capital increase made by Proparco and minority shareholders on April 30, 2013.
PINE hired Itau to serve as Market Maker in order to increase PINE4’s liquidity. The activities of the Market Maker began on
May 13, 2013.
As of April 30, 2013
Common Preferred Total %
Controlling Shareholder 58,444,889 15,410,863 73,855,752 66.6%
Management - 6,034,158 6,034,158 5.4%
Free Float - 29,935,154 29,935,154 27.0%
Individuals - 3,109,773 3,109,773 2.8%
Local Institutional Investors - 11,839,327 11,839,327 10.7%
Foreign Investors - 8,093,382 8,093,382 7.3%
DEG - 5,005,067 5,005,067 4.5%
Proparco - 1,887,605 1,887,605 1.7%
SubTotal 58,444,889 51,380,175 109,825,064 99.1%
Treasury - 1,017,249 1,017,249 0.9%
Total 116,889,778 52,397,424 110,842,313 100%
31. 31/32Investor Relations | 1Q13 |
Social Investment and Responsibility
Focus on the short, medium and long term.
Social Investment Recognition
Partnership
Most Green Bank
Recognized by the International Finance Corporation (IFC), private
agency programs of the World Bank as the most "green" bank as a result
of its transactions under the Global Trade Finance Program (GTFP) and
its onlending to companies focused on renewable energy and ethanol
Efficiency Energy
Recognition by World Bank for support in the Energy Efficiency sector.
The UN initiative mobilizes the international business
community to adopt fundamental and internationally
accepted values in their business practices in the areas
of human rights, labor relations, environment and
combating corruption, which are reflected in ten
principles. Since October 2012
Responsible Credit
“Lists of Exceptions”: the Bank does not finance projects or those
organizations that damage the environment, are involved in illegal
labor practices or produce, sell or use products, substances or activities
considered prejudicial to society.
System of environmental monitoring, financed by the IADB and
coordinated by FGV, and internally-produced sustainability reports for
corporate loans
Principles applied to Project Finance transactions where
total project capital costs exceed US$10 million and are
based on International Finance Corporation Performance
Standards on social and environmental sustainability and
on the World Bank Group Environmental, Health, and
Safety Guidelines (EHS Guidelines). Since December/2012
Exhibition and sponsorship of Brazilian artists, for instance Paulo von Poser,
in addition to sponsoring and supporting films and documentaries such as
Quebrando o Tabu (Fernando Henrique Cardoso on the drug war), Além da
Estrada (Charly Braun) and others.
32. 32/32Investor Relations | 1Q13 |
This report may contain forward-looking statements concerning the business prospects, projections of operating and financial results and growth outlook of PINE. These are merely
projections and as such are based solely on management’s expectations regarding the future of the business. These statements depend substantially on market conditions, the
performance of the sector and the Brazilian economy (political and economic changes, volatility in interest and exchange rates, technological changes, inflation, financial
disintermediation, competitive pressures on products and prices and changes in tax legislation) and therefore are subject to change without prior notice.
.
Investor Relations
Noberto Pinheiro Jr.
CEO
Susana Waldeck Norberto Zaiet Junior
CFO / IRO COO
Raquel Varela
Head of Investor Relations
Alejandra Hidalgo
Investor Relations Manager
Eduardo Pinotti
Investor Relations Analyst
Ana Lopes
Investor Relations Analyst
Phone: +55-11-3372-5343
www.pine.com/ir
ir@pine.com
