BI&P- Indusval - 1Q14 Results Presentation

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Banco BI&P Results Presentation - 1st Quarter 2014

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BI&P- Indusval - 1Q14 Results Presentation

  1. 1. RESULTS PRESENTATION 1Q14
  2. 2. 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
  3. 3. Highlights 3  Expanded Credit Portfolio totaled R$3.9 billion, +1.5% in the quarter and +28.8% in twelve months.  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$9.9 million, mainly due to the following: (i) the effect of discontinuance of the designation of hedge accounting, adopted in 2Q12, of operations to protect the cash flow, which continue to be protected by hedge operations, without any cash effect, and (ii) the fact that the investments we made during the restructuring period have still not reached equilibrium point since, given the conservative risk adopted by us, we have still not attained the required scale through growth of the credit portfolio and income from services rendered.
  4. 4. 3,048 3,229 3,355 3,867 3,926 Mar 13 Jun 13 Sep 13* Dec 13 Mar 14 R$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 Growth of 29% in twelve months * 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. Average Exposure per Client R$ million Dec 13 Mar 14 Corporate 9.2 10.5 Emerging Companies 3.0 2.9 52% 43% 47% 56% 1% 1% Dec 13 Mar 14 Emerging Companies Corporate Other**
  5. 5. Expanded Credit Portfolio Development 5 ...focusing on higher quality assets. 589 773 685 817 794 Mar 13 Jun 13 Sep 13 Dec 13 Mar 14 R$million New Transactions 3,867 3,926 794(591) (60) (84 ) Dec 13 Amortized Credits Credit Exits Write offs New Operations Mar 14 R$million 99% of the new transactions in the last 12 months are classified between AA and B.
  6. 6. Loans & Financing in BRL* 55% Trade Finance* 11% BNDES Onlendings 7% Guarantees Issued 5% Agricultural Bonds 19% Private Credit Bonds 2% Other 1% Mar 14 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* 56% Trade Finance* 14% BNDES Onlendings 10% Guarantees Issued 6% Agricultural Bonds 12% Private Credit Bonds 1% Other 1% Mar 13 13% 10% 12% 29% 26% 26% 27% 24% 25% 31% 39% 36% Mar 13 Dec 13 Mar 14 Client Concentration Top 10 11 - 60 largest 61 - 160 largest Other The reduction of concentration is one of the results of the new credit policy adopted since April 2011.
  7. 7. 10.6% 1.8% 1.8% 2.5% 2.8% 3.0% 3.1% 3.2% 3.3% 3.4% 3.9% 4.0% 4.0% 5.9% 6.5% 6.8% 7.3% 9.2% 17.1% Other industries (less than 1.4%) Raw Materials Machinery and Equipments Education Power Generation & Distribution Publishing and Advertising Textile, Leather and Confection Commerce - Retail & Wholesale Pulp & Paper Metal Industry Chemical & Pharmaceutical Infrastructure Transport and Logistics Automotive Food & Beverage Oil, Biofuel & Sugar Livestock Real Estate Agriculture March 2013 Expanded Credit Portfolio 7 Relevant exposure in agriculture 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 industries (less than 1.4%) International Commerce 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 March 2014
  8. 8. 6.6 8.8 10.3 9.9 12.9 1Q13 2Q13 3Q13 4Q13 1Q14 R$million Income from services rendered and Tariffs NIM and Fees Revenue 8 5.42% 3.20% 5.60% 4.96% 3.23% 4.05% 4.06% 4.08% 3.99% 3.94% 1Q13 2Q13 3Q13 4Q13 1Q14 Net Interest Margin (NIM) Adjusted NIM* Managerial NIM with Clients ** * NIM without effects of discontinuance of designation of hedge accounting and discounts. ** Includes revenues from agro bonds (CPR).
  9. 9. * New Credit Policy: adopted since April 2011. Expanded Credit Portfolio Quality 9 99% of loans granted in the quarter were rated from AA to B Credits rated between D and H totaled R$271,1 million at the end of 1Q14:  R$192.9 million (71% of the expanded credit portfolio between D-H) in normal payment course,  Only R$78.3 million overdue +60 days.1% 3% 2% 48% 51% 52% 31% 33% 35% 11% 4% 3% 7% 9% 7% Mar 13 Dec 13 Mar 14 AA A B C D - H 89.8% 87.1% 81.3% AA 2% AA 2% AA 5% A 52% A 58% A 8% B 35% B 36% B 26% C 3% C 2% C 15%D - H 7% D - H 2% D - H 45% New Credit Policy* Clients Expanded Loan Portfolio Previous Credit Policy Clients Expanded Loan Portfolio 1Q14
  10. 10. Credit Portfolio Quality 1.13% 0.75% 0.95% 1.10% Jun 13 Sep 13 Dec 13 Mar 14 Managerial ALL Expense 1 1 Managerial Expense with Allowance for Loan Losses (ALL) = ALL expenses + Discounts granted upon settlement of loans – Revenues from recovery of loans written off. | * New Credit Policy: adopted since April 2011. 8.5% 8.2% 12.4% 8.1% 15.0% 2.2% 2.1% 2.6% 1.9% 2.6% 0.4% 0.5% 0.6% 0.3% 0.4% Mar 13 Jun 13 Sep 13 Dec 13 Mar 14 NPL 90 days / Credit Portfolio Clients Previous Credit Policy Total Clients New Credit Policy* 9.4% 10.6% 14.0% 10.3% 15.2% 2.3% 2.6% 2.9% 2.3% 2.6% 0.4% 0.5% 0.6% 0.3% 0.5% Mar 13 Jun 13 Sep 13 Dec 13 Mar 14 NPL 60 days / Credit Portfolio Clients Previous Credit Policy Total Clients New Credit Policy* Managerial ALL Expense1 in 1Q14, annualized, was 1.10% of the Expanded Credit Portfolio 10
  11. 11. Time Deposits (CDB) 26% DPGE I 29% LCA 15% LF & LCI 2%Interbank & Demand Deposits 5% Onlendings 10% Foreign Borrowings 13% Mar 13 3,170 3,142 3,082 3,893 3,930 Mar 13 Jun 13 Sep 13 Dec 13 Mar 14 R$million In Local Currency in Foreign Currency Funding 11 Product mix helps with cost reduction Time Deposits (CDB) 21% DPGE I 26% DPGE II 7% LCA 25% LF & LCI 4% Interbank & Demand Deposits 1% Onlendings 7% Foreign Borrowings 9% Mar 14 LCA and LCI account for 28% 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.
  12. 12. Profitability 12 The quarterly result was mainly due to: • 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 • 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. 2.0 1Q13 2Q13 3Q13 4Q13 1Q14 R$million Net Result -9.9 -20.6 -10.0 -91.4
  13. 13. 498.4 569.6 574.5 674.2 667.1 Mar 13 Jun 13 Sep 13 Dec 13 Mar 14 R$million Shareholders’ Equity 14.2% 14.6% 14.5% 14.8% 13.7% Mar 13 Jun 13 Sep 13 Dec 13 Mar 14 Basel Index (Tier I) 6.1x 5.7x 5.7x 5.7x 5.9x Mar 13 jun/13 Sep 13 Dec 13 Mar 14 Leverage Expanded Credit Portfolio / Equity Capital Structure and Ratings 13 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: 9,65 Low Risk Short Term Apr 14

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