1Q08 Presentation

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1Q08 Presentation

  1. 1. 1Q08 Earnings Presentation
  2. 2. The Bank's financial statements are presented on a consolidated and pro-forma basis, encompassing the financial statements of Paraná Banco, its subsidiaries, the Credit Receivables Investment Funds Paraná Banco I, the Credit Receivables Investment Fund Paraná Banco II (FIDCs) and the insurer J. Malucelli Seguradora. In the 1Q07, Paraná Banco retained only 15% ofJ.Malucelli Seguradora. The pro-forma statements of this period include 100% of the insurer. The statements were prepared based on the accounting practices pursuant to Brazilian Corporate Law, and associated with the regulations and instructions issued by the National Monetary Council (“CMN”), the Brazilian Central Bank (“BACEN”) and the Brazilian Securities and Exchange Commission ("CVM"). 2
  3. 3. Overview Niche Bank, focused on payroll-deductible and middle-market loans. Focus on profitability and a low-risk customer base (civil servants, private-sector employees and INSS social security system retirees and pensioners). At the close of the 1Q08, the Bank had 700 payroll-deduction loan agreements (state and private entities). Four sales channels: brokers, call center, franchises and own stores. The Franchise Channel closed the quarter with 81 operational units spread through several important regions of the country. Paraná Banco concluded the acquisition of 100% of J. Malucelli Seguradora, as outlined in the IPO Prospectus. The acquisition was ratified by SUSEP in April of this year. Paraná Banco has filed a request with SUSEP seeking authorization to constitute Brazil’s first private-sector reinsurance company, J. Malucelli Resseguradora S/A. 3
  4. 4. Paraná Banco Operating Highlights Total Originations Number of Agreements (R$ ‘000) 20% 70% 4
  5. 5. Distribution Channels Brokers Franchises • The segment’s most traditionalchannel • Control over operational and image-related risks • Highly scalable model • Guaranteed exclusivity and long-term agreements • Wide spectrum of agreements • Expansion of product mix • User-friendly IT system: Brokers’ Portal 81 franchises in Network of 568 operation and 21 brokers nationwide under development Call Center • Extensive capillarity • Acquisition of debts • Absence of commissions • Refinancing • Portfolio defense • Marketing campaigns 5
  6. 6. Total Assets and Shareholders’ Equity (R$ ’000) Total Assets Shreholders’ Equity 1,972 1,882 1,043 5% 5% 89% 336% 1Q07 4Q07 1Q08 6
  7. 7. Loan Portfolio The loan portfolio totaled R$ 1,310.09 million in the 1Q08 1.310,9  1,310.9 1,210.6 1.210,6  722,5  722.5 8% 81% 1Q07 1T07 4Q07 4T07 1Q08 1T08 7 7
  8. 8. Portfolio Quality High Quality and Exceptional Stability 1Q07 1Q08 5.1% 3.9% AA-C D-H 94.9% 96.1% 8
  9. 9. Market Funding Operations (R$ ‘000) 30.1% 923,045.00 45,304.00  709,264.00 88,800.00  877,741.00  620,464.00  1Q07 1Q08 Total  Deposits Funds, acceptances and securities 9
  10. 10. Summary of Financial Indicators and Highlights 1Q07 1Q08 1Q07 x 1Q08 4Q07 4Q07 x 1Q08 Net income 10,175 23,628 132.2% 36,124 -34.6% Shareholders’ equity 186,959 815,867 336.4% 776,572 5.1% Total assets 1,042,700 1,971,872 89.1% 1,881,567 4.8% Return on average equity 20.2% 12.4% -7.8 p.p. 18.6% -6.7 p.p. (annualized) Return on average assets 3.7% 5.0% -1.3 p.p. 7.9% -3.0 p.p. (annualized) Net interest margin 17.7% 14.8% -2.9 p.p. 17.9% -3.1 p.p. (annualized) 10
  11. 11. Financial Revenues and Loan Assignments 1Q07 1Q08 1Q07 x 1Q08 4Q07 4Q07 x 1Q08 Income from loan operations 60,233 75,706 25.7% 79,974 -5.3% Income ffrom securities 3,241 10,752 231.7% 15,475 -30.5% operations Revenue from financial 64,996 86,458 33.0% 95,449 -9.4% operations Total originations 169,210 307,021 81.4% 365,231 -14.9% Payroll-deductible originations 166,500 283,450 70.2% 235,953 20.1% Middle-market originations 2,710 23,571 769.8% 129,278 -78.8% Loan assignments (other institutions) 20,079 - -100.0% - n/a Loan Assignments (FIDCs) 110,854 73,167 -34.0% 80,378 -9.0% Loan portfolios acquired - - n/a 33,400 -100.0% % assigned to other institutions 12.1% 0.0% 0.0% % assigned to FIDCs (payroll-deductible) 66.6% 25.9% -40.7 p.p. 34.1% 8.2 p.p. 11
  12. 12. Operating Revenue (Expenses) Operating Revenue (Expenses) (R$ ‘000) 1Q07 1Q08 1Q07 x 1Q08 4Q07 4Q07 x 1Q08 Personnel expenses (2,264) (5,578) 146.4% (5,520) 1.1% IPO expenses - - n/a (504) -100.0% Commissions paid (11,786) (10,726) 9% (9,226) 16.3% (payroll-deductible loan origination) Other administrative and (4,356) 3,920 n/a (4,985) -178.6% operating revenue (expenses) 12
  13. 13. Alternative Channels vs. Commissions on payroll-deductible loan originations   Evolution of Alternative Distribution 31% Channels 28% Begin of Franchise 21% Operations % of Payroll Deductible Loan 10% Origination 3% 9% 7% 6% 5% 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 Evolution of Commissions on Loan Origination 8.10% 7.60% 7.10% 1Q06 1Q07 1Q08 * Alternative channels comprise franchises, own stores and the call center 13
  14. 14. Surety Bond Market Surety Bond Premiums – Annual Trends (R$ ‘000)   346,224 205,368 194,664 164,550 167,642 134,749 98,639 77,946 50% 30% 37% 42% 27% 28% 24% 34% 24% 34% 200230% 37% 42% 50% 27% 28% 2000 2001 2003 2004 2005 2006 2007 J. MALUCELLI SEGURADORA S/A Other Insurance Companies * Source: SUSEP 14
  15. 15. Surety Bond Market Claims and Claims Ratio Trends 80.000 70.000 60.000 50.000 50% R$ x 1,000 40.000 40% 30.000 20.000 30% 10.000 20% - 2000 2001 2002 2003 2004 2005 2006 2007 Insurance Claims - Market 10% Insurance Claims - J. Malucelli Seg 4.7% 3.7% 0% 2000 2001 2002 2003 2004 2005 2006 2007 Claims Ratio - Market • Source: SUSEP Claims Ratio - J. Malucelli Seguradora 15
  16. 16. J. Malucelli Seguradora (R$ ‘000) Premiums Written Shareholders’ Equity 48,521 48.521  13.5% 74.9% 69.612  69,612 60.887  60,887 27,746 27.746  1T07 1Q07 1Q08 1T08 1T07 1Q07 1T08 1Q08 16
  17. 17. Ratings 11,39   Rating Rating / Ranking Rating / Ranking Rating brBBB+ 10,87 brA- A- Low Credit Risk    Low Risk – Medium    Low Credit Risk    Low Credit Risk  Term  February 2008  April 2008 November 2007 March 2008 17
  18. 18. Corporate Governance On October 19, 2007, the Board of Directors authorized a stock buy- back program involving the purchase of up to 4,156,481 shares by October 15, 2008. Paraná Banco hired BANCO UBS PACTUAL S.A. as the market maker for its preferred shares for a six-month period, automatically renewable, in order to improve the shares’ liquidity. Paraná Banco’s Fiscal Council was installed on March 14, 2008. 18
  19. 19. SHARE PRICE ( Base 100) 0 100 120 20 40 60 80 13/6 PRBC4 21/6 29/6 10/7 18/7 26/7 3/8 13/8 21/8 29/8 6/9 Share Performance 17/9 25/9 3/10 11/10 22/10 30/10 8/11 19/11 28/11 6/12 14/12 26/12 7/1 15/1 23/1 1/2 13/2 21/2 29/2 10/3 18/3 27/3 0 60,000,000 70,000,000 50,000,000 10,000,000 30,000,000 40,000,000 20,000,000 DAILY TRADED VOLUME (R$) 19
  20. 20. IR Contacts Luis César Miara André Nacli CFO and Investor Relations Officer IR Analyst Phone: (55 41) 3351-9961 Phone: (55 41) 3351-9645 Ricardo Rosanova Garcia Mauricio N. G. Fanganiello IR Manager IR Coordinator Phone: (55 41) 3351-9812 Phone: (55 41) 3351-9765 e-mail: ir@paranabanco.com.br IR Website: www.paranabanco.com.br/ir This presentation may include estimates and forward-looking statements. These estimates and forward-looking statements are to a large extent based on current expectations and projections regarding future events and financial trends that affect or may come to affect our business. Many important factors may adversely affect the results of Paraná Banco as described in our estimates and forward-looking statements. These factors include, but are not limited to, the following: the Brazilian and international economic situation, fiscal, foreign-exchange and monetary policies, higher competition in the payroll- deductible loan segment, the ability of Paraná Banco to obtain funding for its operations, and amendments to Central Bank regulations. The words “believe”, “may”, “could”, “seek”, “estimate”, “continue”, “anticipate”, “plan”, “expect” and other similar words are intended to identify estimates and projections. The considerations involving estimates and forward-looking statements include information related to results and projections, strategies, competitive positioning, the industry environment, growth opportunities, the effects of future regulations, and the impact from competitors. Said estimates and projections refer only to the date on which they were expressed, and we do not assume any obligation to publicly update or revise any of these estimates arising from the occurrence of new information, future events, or any other factors. In view of the risks and uncertainties described above, the estimates and forward-looking statements contained herein may not materialize. Given these limitations, shareholders and investors should not make any decisions based on the estimates, projections and forward-looking statements contained herein. 20

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