Presentation 4Q10

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Presentation 4Q10

  1. 1. Presentation on 4Q10 Results 0
  2. 2.  Credit Behavior in Brazil Loan Portfolio Funding and Liquidity Results from Operations Capital Market 1
  3. 3. Total Credit Volume and Segmentation Loans in the Brazilian Financial System R$ billion 1,704 Loans to individuals growth mainly supported by 1,410 1,227 34% housing loans with earmarked resources and car 32% financing with free resources 936 29% 733 Corporate Credit earmarked resources from BNDES 29% 607 still stand out as well as working capital with free 71% 71% 68% 66% resources. Government owned banks maintained a 42% share on 2005 2006 2007 2008 2009 2010 total loans in the financial system Nonearmarked Resources Earmarked Resources Variation % Individuals Corporates Non Non Total Credit Earmarked Earmarked Dec/10 earmarked Total earmarked Total Resource Resources Resource Resources In the month 1.8 2.7 2.1 1.1 1.1 1.1 1.6 In the quarter 5.6 7.7 6.2 5.0 5.2 5.1 5.6 In the year 18.8 30.7 21.9 15.4 25.7 19.3 20.5 In 12 months 18.8 30.7 21.9 15.4 25.7 19.3 20.5 Source: Central Bank of Brazil – Credit Information System - SCR 2
  4. 4. Credit Default Ratios Stability in Corporate lending and steady decline in loans to individuals 10 9 8 7 6 5.7 % 5 4.6 4 3.6 3 Source: BACEN 2 1 Corporates Individuals Total 0 Dec Dec Dec 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2006 2007 2008 2009 2010 Central Bank Default Rates = loans overdue above 90 days on total loan portfolio Default Rate on Loans to Individuals: Fast retreat from June 2009 Default Rate on Corporate Loans: Stable at circa 3.6% from March 2010 3
  5. 5.  Credit Behavior in Brazil Loan Portfolio Funding and Liquidity Results from Operations Capital Market 4
  6. 6. 14.3% Loan Portfolio* growth = R$ 1.9 billion Local Currency Loans Trade Finance R$ Million R$ Million 1,572.2 1,400.3 1,425.0 344.1 369.1 298.4 4Q09 3Q10 4Q10 4T09 3T10 4T10  Local currency loans = 80% of total loan portfolio  Trade Finance portfolio comprises :  85.7% Export financing (ACC/ ACE)  Loans in Brazilian Reais and Trade Finance deals  14.1% Import financing (FINIMP) allocated to the “Upper Middle” segment stand  0.2% Import L/Cs for 14% of the total portfolio  Amounts in foreign currency show a 10% growth  Credit assignment accounts just for 0.6% of the in 4Q10 and 31% in 12 months: portfolio and guarantees, 3.3%  US$ 168.3 million – 4Q09  US$ 200.8 million – 3Q10  US$ 221.0 million – 4Q10 Credit Assignment Guarantees issued and L/Cs * including guarantees issued 5
  7. 7. Credit Portfolio Breakdown By Economic Activity By Segment Other Services Individuals 23% 7% Financial Cos Middle 3% Market Upper 82% Middle Commerce 14% 11% Retail and other Industry 4% 56% By Client Concentration By Maturity 10 largest Above 360 Other days 20% 25% 29% Up to 90 days 40% 181 to 360 11 - 60 61 - 160 13% 31% 24% 91 to 180 18% 6
  8. 8. Loan Portfolio breakdown by Industry Food & Beverage Agribusiness Heavy Construction 11% Financial Institutions 2% 18% 2% Chemical & Pharmaceutical 2% Transportation & Logistics 2% Automotive 3% 3% Textile, Apparel & Leather 3% 17% Education 3% Energy 4% Metal Industry 5% 9% 5% Oil & Biofuel 5% 6% Wholesale & Retail Trade Financial Services Individuals Pulp & Paper Other Industries 7
  9. 9. Loan Portfolio Quality Asset Quality Risk Rating Collateral Structure10.4% Performing AA Vehicles 3.8% NPL +60 days Real State Aval PN 2.5% 3% 23% D-H A 9% 14.2% 35.4% Securities Other 3% 4% Monitored Pledge 8% Pledge/ C B Receivables Lien 22.2% 46% 25.6% 4% NPL(*) / Total Loans (%) Allowance for Loan Losses (ALL)(*) Total outstanding amount of contracts with any installment overdue above 60 days R$ Million 133.4 5.9 119.6 112.2 3.7 3.8 4Q09 3Q10 4Q10 4Q09 3Q10 4Q10 Provisioning Coverage = 6.4% of Loan Portfolio and 196% of NPL 90 days 8
  10. 10.  Credit Behavior in Brazil Loan Portfolio Funding and Liquidity Results from Operations Capital Market 9
  11. 11. Local Currency Funding prevalence Total Funding Funding Breakdown R$ Million BNDES Onlending 6% 2.030,6 Foreign Time 1.902,7 Borrowings Deposits 1.793,2 16% 37% Interbank Deposits 6% Demand Deposits ALC & 2% BN(*) 4% DPGE(*) 4Q09 3Q10 4Q10 29%  6.7% increase in the quarter  CDs and DPGEs(*) account for 66% of total funding  84% of funding in Brazilian Real  Deposits average term to maturity = 496 days  CDs: R$ 740 MM - 347 days  Foreign Borrowings:  DPGEs: R$ 591 MM - 795 days • Trade Finance – 94%  ALC & BN: R$ 82 MM – 120 days • IFC – 6%  Interbank Deposits: R$ 117 MM - 175 days (*) DPGE – Time Deposits bearing Special Insurance from FGC; ALC – Agribusiness Letters of Credit; BN – Bank Notes 10
  12. 12. Good Liquidity maintained Free Cash R$ Million  Treasury’s main task is the 733.8 management of liquidity, interest rate, 696.9 680.7 currencies and tenor mismatch risks  Free Cash:  46% of Total Deposits  172% of Shareholder’s Equity 4Q09 3Q10 4Q10 Assets and Liabilities Management R$ Million 791 734 Free Cash = 603 (Cash + Liquid Fin. Assets + Securities + Derivatives) 521 492 (-) 348 (Open Market Funds + Derivatives) 248 244 90 days 180 days 360 days Above 360 days Assets Liabilities 11
  13. 13.  Credit Behavior in Brazil Loan Portfolio Funding and Liquidity Results from Operations Capital Market 12
  14. 14. Financial Intermediation Results Evolution Income from Financial Intermediation Gross Profit from Financial intermediation R$ Million R$ Million 141.9 454.0 407.0 94.3 123.0 39.1 34.5 93.0 116.0 27.4 4Q09 3Q10 4Q10 2009 2010 4Q09 3Q10 4Q10 2009 2010  Income from Financial Intermediation  Profit from Financial Intermediation growth in composed by revenues from: 2010 derived from:  Loans 59%  Securities 21%  Increased revenue from securities,  Derivatives 12% derivatives and FX operations  Foreign Exchange Operations 8%  Stability in Financial Intermediation  Revenues from derivatives are both related to Expenses, including the lower pressure of hedge of investments in government bonds provisioning expenses and time deposits 13
  15. 15. Slight increase in Operating Expenses Net Operating Expenses Efficiency Ratio R$ Million In % 63.2% 65.7% 100.3 61.6% 60.9% 93.2 52.3% S&P method 23.2 26.5 28.4 4Q09 3Q10 4Q10 2009 2010 4Q09 3Q10 4Q10 2009 2010  Net operating expenses increased by 7.2%  Closely tied to scale, the efficiency ratio quarter on quarter, also impacted by the reflects: labor union agreement  stable loan portfolio throughout the year  Third party services were also relevant in the  Maintenance of high liquidity to ensure increased administrative expenses business sustainability  the "upper middle" business unit implementation and the structured finance area strengthening 14
  16. 16. Improved Recurring Profit Net Profit Net Interest Margin (NIM) R$ Million NIM NIM(a) GIM 29.0 7,9% 6,5% 12.8 4,6% 7.5 4.4 5.9 4Q09 3Q10 4Q10 2009 2010 1Q 09 2Q 09 3Q 09 4Q 09 1Q 10 2Q 10 3Q 10 4Q 10 GIM= Gross Interest Margin Net Recurring Profit:  NIM(a) net interest margin adjusted by FX  4Q10: R$ 5.9 million / 4Q09: R$ 4.2 million = +40.5% effects on financial assets and by deducting the balance of repos from the average  2010: R$ 28.5 million / 2009: R$ 9.8 million = +190.8% interest-bearing assets ROAE • 4Q10: 5.6% / 4Q09: 4.1% = +150 bps • 2010: 6.8% / 2009: 2.9% = +390 bps 15
  17. 17.  Credit Behavior in Brazil Loan Portfolio Funding and Liquidity Result from Operations Capital Market 16
  18. 18. Capital Distribution and Free Float Capital Distribution on Dec. 31, 2010 Controlling Free Class # of Shares Management Treasury Free Float Group Float Common 27,000,000 (17,116,173) (2,574,269) - 7,309,558 27.1% Preferred 14,212,984 (1,026,653) (159,570) (746,797) 12,280,064 86.9% TOTAL 41,212,984 (18,142,826) (2,733,839) (746,797)* 19,589,622 47.5% Directors + Officers Treasury 6.6% 1.8% * 4th Share Buyback Program for up to 1,301,536 preferred shares Controlling Free Float valid until Aug. 09, 2011 Group 47.5% 44.0% 17
  19. 19. Shareholder Remuneration BIM’s practice for shareholder remuneration has been the quarterly anticipated payment of Interest on Equity 27.0 24.5 25.1 6.7 6.4 6.2 15.9 6.6 6.5 6.3 6.1 10.2 6.9 2.2 6.6 6.3 2.4 5.1 R$ MM 2.7 2.3 6.8 6.0 6.3 2.8 2.3 2006 2007 2008 2009 2010 1Q 2Q 3Q 4Q Remuneration per share R$ 0.34235 R$ 0.41635 R$ 0.59451 R$ 0.63704 R$ 0.60983 18
  20. 20. Stock PerformanceIDVL4 X IBOV - 2010 130 120 110 100 90 80 IBOVESPA IDVL4 IDVL4 adjusted to earnings 70 09 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 /20 /20 /20 /20 /20 /20 /20 /20 /20 /20 /20 /20 /20 /20 /20 /20 /20 /20 /20 /20 /20 /20 /20 /20 /20 30 14 29 13 28 15 30 14 29 14 29 13 28 13 28 12 27 11 26 11 26 10 25 10 25 12/ 01/ 01/ 02/ 02/ 03/ 03/ 04/ 04/ 05/ 05/ 06/ 06/ 07/ 07/ 08/ 08/ 09/ 09/ 10/ 10/ 11/ 11/ 12/ 12/ Share Performance 4Q10 2010 IDVL4 -0.62% -4.10% IDVL4 (adjusted to earnings) +1.40% +3.52% IBOV -0.18% +1.04% IGC +2.32% +12.54% ITAG +1.43% +11.72% Source: Enfoque 19
  21. 21. In Short  Business Focus: Corporate lending  Credit Behaviour in Brazil  Earmarked credit accelerated growth throughout the year, lowering speed in the last quarter  Government owned banks maintain 42% share on total credit in the Brazilian financial system  Central Bank data shows stability in corporate loans delinquency ratios at 3.6%  Loan Portfolio  Growth resumption: 10% quarter on quarter and 14.3% in the year, reaching R$ 1.9 billion  82% middle market companies and 14% upper-middle, companies with annual sales above R$ 400 million, in line with the strategy of expanding the target market  Adequate provision coverage = 196% on Non Performing Loans above 90 days  Funding and Liquidity  High liquidity maintained: Free Cash at 46% of total deposits and 172% of Shareholder’s Equity  Funding totaled R$ 2 billion, an increase of 6.7% in the quarter and 13% in 12 months  Operating Results  Evolution on Financial Intermediation Results also helped by lower ALL expenses pressure  Accumulated 12-month net profit reaches R$ 29 MM against R$ 12.8 in 2009  Highlighting recurring profit: R$ 28.7 million in 2010 from R$ 7.7 million in 2009 20
  22. 22. Questions and Answers Please pose your questions by utilizing the Q&A button at the right bottom end of the Webcast panel.Please note that this is the English version of the presentation originally prepared in Portuguese. In case of any discrepancy between those versions,the Portuguese version shall prevail. Banco Indusval Multistock complete financial statements are available at www.indusval.com.br/ir, under FinancialInformation – Financial Statements and they are filed with the CVM – Brazilian Securities and Exchange Commission that disposes them to the marketat www.cvm.gov.br.Any reference or statement regarding Banco Indusval Multistock - or its subsidiaries and affiliates - anticipated synergies, growth plans, projectedresults and future strategies are just estimates. Although forward-looking statements reflect management’s good faith beliefs, they involve known andunknown risks and uncertainties that may cause the Company’s actual results or outcomes to be materially different from those anticipated anddiscussed herein. These risks and uncertainties include, but are not limited to, our ability to realize the amount of the projected synergies and in thetimetable projected, as well as economic, competitive, governmental and technological factors affecting Banco Indusval Multistock’s operations,markets, products and prices, and other factors detailed in Banco Indusval Multistock’s filings with the CVM – Brazilian Securities and ExchangeCommission which, readers are urged to read carefully, in analyzing investment alternatives. 21
  23. 23. Investor Relations – Contact InformationZiro Murata Jr. Banco Indusval S/AIRO Rua Boa Vista, 356 – 7º andar 01014-000- São Paulo – SPPhone: (55 11) 3315-6961 BrasilE-mail: ziro@indusval.com.brMaria Angela R. Valente IR Site:Head of IR www.indusval.com.br/irPhone: (55 11) 3315-6821E-mail: mvalente@indusval.com.br 22

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