2. 2/32Investor Relations | 3Q15 |
Profile and History
Pine
History
Business Strategy
Competitive Landscape
Focus Always on the Client
Corporate Credit
FICC
Pine Investimentos
Highlights and Results
Corporate Governance
Corporate Governance
Committees
Social Investment and Responsibility
Summary
4. 4/32Investor Relations | 3Q15 |
Over R$2
billion
36%
R$500 million
to R$2 billion
34%
Up to R$500
million
30%
Pine
Specialized in providing financial solutions for corporate clients…
Credit Portfolio by Annual Client Revenues
Profile
Focused on establishing long-term relationships
Profound knowledge and product penetration
Business is structured along three primary business lines:
• Corporate Credit: credit and financing products
• FICC: instruments for hedging and risk
management
• Pine Investimentos: Capital Markets, Financial
Advisory, Project & Structured Finance and
Research
September 30th, 2015
5. 5/32Investor Relations | 3Q15 |
184 222 341 521 620 755 663 761 1,214
2,854 3,105
4,192
5,763
6,963
7,912
9,920 9,826
7,691
62
121 126 140 136 152 171
209
335
801
827 825
867
1,015
1,220 1,272 1,256
1,181
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
sept/15
Corporate Credit Portfolio (R$ Million)
Shareholders' Equity (R$ Million)
...with extensive knowledge of Brazil’s corporate credit cycle.
History
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, 2015
18 years
7. 7/32Investor Relations | 3Q15 |
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
~15 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 | 3Q15 |
Focus Always on the Client
Products 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
3,884 Onlending
Overdraft
Accounts
Syndicated and
Structured Loans
Fixed Income
Currencies
Commodities
Equities
CDBs
CDs
RDBs
LCAs
LCIs
DebenturesCRIs
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 Credits
Aircraft
Financing
Investment
Management
In addition to the
headquarters located in the
city of São Paulo, Pine has 7
branches throughout Brazil, in
the States of Ceará, Mato
Grosso, Paraná,
Pernambuco, Rio de Janeiro,
Rio Grande do Sul, and
São Paulo. The origination
network also counts with a
Cayman Branch and a broker
dealer in New York (USA).
9. 9/32Investor Relations | 3Q15 |
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 once 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 Risk Officer
Chief Financial Officer
Participants:
FICC Executive Director
Credit Analysts Team
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 ~15 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 10 branches divided
into 14 origination platforms in Brazil’s major economic
centers
Pine has approximentely 25 professionals in the credit
analysis area, 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 | 3Q15 |
Commodities
13%
Fixed Income
15%
Currencies
72%
September 30th, 2015
Scenario on September 30th, 2015:
Duration: 220 days
Mark-to-Market: R$560 million
Stress Scenario (Dollar: +31% and Commodities Prices: -30%):
Stressed MtM : R$894 million
R$ million
FICC
Solid trackrecord
Client Notional Derivatives by Market
Market Segments
Notional Value and MtM
Portfolio Profile
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
8,376 7,703 7,482 7,948 3,270 6,045
288
221
349 366
560 514
-47
-365
-103
33
894
239
Sept-14 Dec-14 Mar-15 Jun-15 Sept-15 Oct-15
Notional Amount
MtM
Stressed MtM
11. 11/32Investor Relations | 3Q15 |
September, 2015
Infrastructure
Debentures
Lead Coordinator
September, 2015
Debentures
Coordinator
R$10,300,000R$500,000,000
July, 2015
Project Finance
R$104,000,000
Coordinator
R$45,200,000
November, 2014
Debentures
Lead Coordinator
December, 2014
BNDES Onlending
R$630,000,000
Coordinator
July, 2015
February, 2015
March, 2015
Project Finance
R$78,000,000
Coordnator
Project Finance
R$30,000,000
Lead Coordinator
Structuring CRP
R$24,000,000
Lead Coordinator
R$20,000,000
June, 2015
CRI
Lead Coordinator
2
5
2Q15 3Q15
11
10
9M14 9M15
R$ million
Pine Investimentos
Fee Generation
Selected Transactions
Capital Markets: Structuring and Distribution of Fixed
Income Transactions.
Financial Advisory: Project & Structured Finance, M&A,
and hybrid capital transactions.
Research: Macro and Commodities.
13. 13/32Investor Relations | 3Q15 |
3Q15 Events and Highlights
1.Positive liquidity gap in the past years, with 401 days for credit versus 486 days for funding.
2.Liquid balance sheet with a cash position equivalent to 41% of time deposits.
3.Deeper deleveraging strategy in the loan portfolio, given the worsening of the economic scenario.
4.Voluntary pre-payment of the FIDC AGRO senior quotas amounting to R$340 million, in line with the Bank’s constant and active
liability management.
5.Loan portfolio coverage ratio above 4% as a result of preventive provision increases in the last fifteen months.
6.Further reduction of expenses, as a result of the diligence and anticipation of an adverse market in 2015.
14. 14/32Investor Relations | 3Q15 |
3Q15 Financial Highlights
1 Includes Stand by LCs, Bank Guarantees, Credit Securities to be Received and Securities (bonds, CRIs, eurobonds and fund shares)
R$ million
The main performance indicators were within expectations in the period.
3.3% 2.9%
2Q15 3Q15
NIM Evolution
-40 bps
10 10
2Q15 3Q15
Net Income
3.3% 3.5%
2Q15 3Q15
ROAE
+20 bps
1,208 1,181
Jun-15 Sept-15
Shareholders' Equity
-2.2%
8,621 7,691
Jun-15 Sept-15
Total Loan Portfolio 1
-10.8%
7,564 7,409
Jun-15 Sept-15
Total Funding
-2.0%
15. 15/32Investor Relations | 3Q15 |
R$ million
3Q15 2Q15 3Q14 9M15 9M14
Financial Margin
Income from financial intermediation 1 80 92 135 297
Overhedge effect 55 (10) 4 79 (2)
Income from financial intermediation ex overhedge 56 70 96 214 296
Net Interest Margin
NIM Evolution Main Impacts
NIM Breakdown
Lower participation in revenues from FICC business and
Treasury;
Mark to market of securities and derivatives according to
4.277 Resolution of the Central Bank of Brazil;
Voluntary pre-payment of the FIDC senior quotas; and
Marginal increase in spreads.
3.3%
2.9%
2Q15 3Q15
-40 bps
17. 17/32Investor Relations | 3Q15 |
1 Includes Stand by LC
2 Includes debentures, CRIs, Hedge Fund Shares, Eurobonds, Credit Portfolio acquired from financial institutions with recourse and Individuals
R$ million
Loan Portfolio
The portfolio amounted to R$7.7 billion...
-21.5%
-10.8%
1
2
4,509
5,050 5,093 4,904 4,731 4,730 4,440
4,066
3,650
990
1,068 1,103
1,071 1,248 1,302
1,118
1,074
924
3,073
2,909 2,905
2,941 2,896 2,969
3,191
2,896
2,492
965
903 989 1,116 924 826
909
585
626
Sept-13 Dec-13 Mar-14 Jun-14 Sept-14 Dec-14 Mar-15 Jun-15 Sept-15
Trade finance: 8.1%
Bank Guarantees:
32.4%
BNDES Onlending : 12.0%
Working Capital: 47.5%
9,657
8,621
7,691
9,537
9,930 10,090 10,032
9,800 9,826
18. 18/32Investor Relations | 3Q15 |
38%38%40%41%41%
7%7%6%5%6%
9%9%8%9%6%
10%10%11%8%9%
12%12%14%14%16%
12%12%
12%14%12%
12%12%9%9%10%
Sept-15Jun-15Sept-14Sept-13Sept-12
Energy
Real Estate
Sugar and
Ethanol
Agriculture
Engineering
Transportation
and Logistics
Others
Continuous Loan Portfolio Management
Sectors Rebalance
...with improved sector diversification.
The composition of the portfolio of the 20 largest clients changed by over 20% in the past twelve months;
The share of wallet of the 20 largest clients remained below 30%, in line with market peers.
Energy
12%
Real Estate
12%
Sugar and Ethanol
12%
Agriculture
10%
Engineering
9%
Transportation
and Logistics
7%
Specialized
Services
4%
Telecom
4%
Chemicals
4%
Foreign Trade
3%
Metallurgy
3%
Retail
3%
Vehiclesand Parts
3%
Construction
Material
2%
Meatpacking
2%
Food Industry
1%
Other
9%
19. 19/32Investor Relations | 3Q15 |
SP
68%
MG
22%
PR
8%
GO
2%
Working
Capital
48%
Guarantees
31%
BNDES
Onlending
12%
Trade
Finance
9%
Working
Capital
77%
Guarantees
23%
Residential
Lots
39%
Residential
37%
Warehouse
12%
Mall
8%
Commercial
4%
Guarantees
59%
Working
Capital
31%
BNDES
Onlending
10%
Wind Power
67%
UTE
1%
Distributors
13%
Transmitting
9%
Equipment
Supplier
6%
SHPs UHEs
4%
Main Sectors
Energy| Real Estate | Agriculture
Energy (12%) Real Estate (12%)
Sugar and Ethanol (12%)
Exposure by Product Exposure by Segment Exposure by Product Exposure by Segment
Exposure by Product Exposure by State
20. 20/32Investor Relations | 3Q15 |
MT
31%
SP
29%
BA
11%
PR
10%
MG
8%
Others
11%
Concession
33%
Transporta-
tion
33%
Industrial
25%
Oil and
Gas
7%
Energy
2%
Working
Capital
64%
BNDES
Onlending
19%
Trade
Finance
15%
Guarantees
1%
Working
Capital
83%
Guarantees
13%
BNDES
Onlending
4%
Main Sectors
Agriculture| Engineering
Agriculture (10%) Engineering (9%)
Exposure by Product Exposure by Product
Exposure by SegmentExposure by State
21. 21/32Investor Relations | 3Q15 |
AA-A
37.7%
B
29.5%
C
25.1%
D-E
4.3%
F-H
3.4%
1.1% 0.7%
0.1%
0.7%
0.3% 0.3%
1.1%
2.1%
1.8%
Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15
September 30th, 2015
Contracts Overdue: total amount of the contracts overdue for more than 90 days / Loan Portfolio
excluding Bank Guarantees and Stand-by Letters of Credit.
1D-H Portfolio: D-H Portfolio / Loan Portfolio Res. 2,682
2Coverage of Total Portfolio: Provisions / Loan Portfolio Res. 2,682
3Coverage D-H Overdue Portfolio: Provisions / D-H Overdue Portfolio
Loan Portfolio Quality
92.3% of the loan portfolio is classified between AA-C ratings.
Loan Portfolio Quality – Res. 2,682
Credit Coverage
Non Performing Loans > 90 days (Total Contract)
Collaterals
1 2 3
0.7%
0.1%
0.7%
0.3% 0.3%
1.1%
2.1% 1.8%
1.2%
set-13 dez-13 mar-14 jun-14 set-14 dez-14 mar-15 jun-15 set-15Sept-13 Dec-13 Mar-14 Jun-13 Sept-14 Dec-14 Mar-15 Jun-15 Sept-15
Products
Pledge
41%
Receivables
15%
Properties
Pledge
41%
Investments
3%
1,628%
172% 127%
50%
1.050%
2.050%
4.2%
6.6%
7.7%
2.1%
4.1% 4.1%
00%
02%
04%
06%
08%
10%
12%
00%
01%
02%
03%
04%
05%
06%
07%
08%
09%
10%
Sept-14 Jun-15 Sept-15
D-H Portfolio Coverage of Total Portfolio Coverage of D-H Overdue Portfolio
23. 23/32Investor Relations | 3Q15 |
43% 41% 36% 37% 39%
57% 59% 64% 63% 61%
Sept-14 Dec-14 Mar-15 Jun-15 Sept-15
Total Deposits Others
Leverage: Expanded Loan Portfolio / Shareholders’ Equity
Expanded Loan Portfolio excluding Bank Guarantees and Stand-by Letters of Credit /
Shareholders’ Equity
Credit over Funding ratio: Loan Portfolio excluding Bank Guarantees and Stand-by Letters of
Credit / Total Funding
Asset & Liability Management
... keeping a positive gap between credit and funding.
Leverage
ALM – Average Maturity
Credit over Funding Ratio
Total Deposits over Total Funding
R$ milliondays
8,638 8,367 7,564 7,4098,500
GAP: +3 months
472
498
514
501 486
398
371
362
385 401
Sept-14 Dec-14 Mar-15 Jun-15 Sept-15
Funding
Credit
7.7x 7.8x 7.8x
7.1x
6.5x
5.4x 5.4x 5.2x
4.7x 4.4x
-
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
10.00
Sept-14 Dec-14 Mar-15 Jun-15 Sept-15
Expanded loan Porfolio
Loan Portfolio excluding
Bank Guarantees 80% 80%
77% 76% 70%
Sept-14 Dec-14 Mar-15 Jun-15 Sept-15
24. 24/32Investor Relations | 3Q15 |
Capital Adequacy Ratio (BIS), Basel III
BIS ratio maintained at 13.1%
+80 bps13.7%
12.0% 12.2% 12.2% 12.4% 12.4% 12.2% 12.3% 12.2% 12.9%
2.2%
2.1% 1.5% 1.5% 1.4% 1.4%
0.8% 0.8% 0.9%
1.0%
15.9%
14.1% 13.7% 13.7% 13.8% 13.9%
13.0% 13.1% 13.1%
13.9%
Sept-13 Dec-13 Mar-14 Jun-14 Sept-14 Dec-14 Mar-15 Jun-15 Sept-15 Sept-15*
Tier II Tier I
Minimum Regulatory
Capital (11%)
* Capital Simulation: It considers the new capital allocation weighting of 50% for transactions with guarantees for judicial or administrative
proceedings involving tax matters, pursuant to Circular Letter 3.770 of the Brazilian Central Bank.
25. 25/32Investor Relations | 3Q15 |
Rating
Long term BB BB Ba3 -
Short Term B B - -
Long term brA+ A+(bra) A3.br
Short Term - F1+(bra) Br-2
LocalCurrency
AndForeignCurrency
National
10,70
30. 30/32Investor Relations | 3Q15 |
Corporate Governance
Pine is committed 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
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
Harumi Susana Ueta Waldeck: Former CFO of Pine, with over 17 years of experience at the
company. She brings the day-to-day experience to the Board.
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
31. 31/32Investor Relations | 3Q15 |
Social Investment and Responsibility
Focus on the short, medium and long term.
Social Investment Recognition
Partnerships
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.
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
Protocolo Verde – “Green Protocol”, an agreement
between FEBRABAN and the Ministry of the Environment
to support development that does not compromise future
generations.
Exhibition and sponsorship of Brazilian artists, for instance Paulo von Poser and
Miguel Rio Branco, in addition to sponsoring and supporting films and
documentaries such as Quebrando o Tabu (Fernando Henrique Cardoso on the
drug war), O Brasil deu certo, e agora? (idealized by Mailson da Nóbrega), Além
da Estrada (Charly Braun) and others.
Sustainability Annual Report
Sixth consecutive year disclosing the
Sustainability Report in the GRI
standard. The 2014 report, with its high
level of clarity, transparency and quality
was recognized with the second place in
the Abrasca Annual Report Award,
considering its category of companies
with net income to R$3 billion.
32. 32/32Investor Relations | 3Q15 |
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.
Noberto N. Pinheiro Junior
CEO/IRO
João Brito
CFO
Raquel Varela Bastos
Head of Investor Relations, Marketing & Press
Luiz Maximo
Investor Relations Specialist
Gabriel Netto
Investor Relations Analyst
Phone: (55 11) 3372-5343
ri.pine.com
ri@pine.com
Investor Relations
Editor's Notes
Recurring income from financial intermediation totaled R$389 million, with margin (NIM) at 4.3%, within the guidance range of 4.0% to 5.0%.
Year on year, the lower margin is mainly explained by a defensive mix of portfolio, by an average cash position 16.1% higher than the average of 2013 and also by an increase in FICC and Treasury risk aversion.
In 4Q14, recurring income from financial intermediation totaled R$94 million, with recurring net interest margin (NIM) at 4.2%. This reduction compared to the previous quarter is mainly explained by the lower flow of transactions in the FICC business, by an average cash position 7.5% higher than the 3Q14, and also by the mark to market of private securities that compose the expanded loan portfolio.