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2012 Annual Public Meeting

BI&P held its annual public meeting with analysts and investors on August 28, 2012. The presentation provided an overview of the company including its profile, capital structure, branch network, strategy, the credit market environment in Brazil, and its financial performance. BI&P aims to grow based on quality assets and recurring income by focusing on customers, products, and its people. It sees continued credit growth in Brazil of 17-20% and is prioritizing quality short term loans and fee income businesses.

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Annual Public Meeting with Analysts & Investors August 28, 2012
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, 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. 1
COMPANY PROFILE
BI&P - Banco Indusval & Partners is a commercial bank listed at Level 2 Corporate Governance of the BM&FBOVESPA, with over 40 years of experience in the financial market, focusing on local and foreign currency corporate loan products. BI&P relies on a network of 11 branches strategically located in economically relevant Brazilian regions, including an offshore branch in Cayman Islands, its brokerage firm operating at the São Paulo Stock, Commodities and Futures Exchange - BM&FBOVESPA and Serglobal Cereais, acquired in April 2011, which originates agricultural bonds. Agency Risk Rating Last Report Global: BB/ Stable/ B Standard & Poor’s August 2012 National: brA+/ Stable/ brA-1 FitchRatings National: BBB/ Stable/ F3 July 2012 Global: Ba3/ Stable/ Not Prime Moody’s November 2011 National: A2.br/ Stable/ BR-2 Index: 10,43 RiskBank July 2012 Low Risk Short Term 3
45 years of partnerships and evolution A history built on credibility 2012 Level 2 BM&FBOVESPA 2011 2010 Strategic review 2007 IPO and opening of 6 2006 branches 2004 Opening of first Sale of 4 branches 2003 Consumer Credit Merger with Business 1991 Banco Authorized Multistock to operate as 1967 a Bank Brokerage Firm establihed 4
Capital Structure Luiz CONTROLLING GROUP FREE FLOAT Manoel F. Masagão Cintra Treasury Warburg Other Ribeiro Pincus Jair Ribeiro PN = 3% ON = 13% ON = 31% Carlos Antonio G. Total = 1% PN = 45% PN = 50% ON = 56% ON = 44% Total = 39% Ciampolini da Rocha Total = 26% PN = 2% PN = 95% Total = 34% Total = 65% 17.7% 100.0% 100.0% 23.8% Sertrading Serglobal Cereais BI&P Brasil Agrosec Indusval & Partners Securitizadora Corretora Position as of June 30, 2012 5
Capital breakdown Controlling Treasury Class Total capital Management Free Float Group Shares Common 36,945,649 20,743,333 277,307 - 15,925,009 43.1% Preferred 26,160,044 609,226 60,125 734,515 24,756,178 94.6% Total 63,105,693 21,352,559 337,432 734,515 40,681,187 64.5% As of June, 30, 2012 Shareholder Base Controlling Individuals Group 20% 34% Management 1% Treasury Foreign 1% Investors 30% Institutional Investors 14% 6
Corporate Governance Committees strenghthen our Governance Shareholders Meeting Supervisory Board Board of Directors Remuneration Committee Internal Audit Committee Executive Board Products Cash and ALCO Credit Special Cases Committee Committee Committee Committee Compliance IT and Information Safety Human resources Committee Legal Committee Committee Committee 7
Supervisory Board and Board of Directors Experienced leaders Supervisory Board • Francisco de Paulo dos Reis Junior | Sitting Member • Jairo da Rocha Soares | Sitting Member • João Verner Juenemann | Sitting Member Board of Directors • Manoel Felix Cintra Neto | Chairman • Carlos Ciampolini | Vice Chairman • Antonio Geraldo da Rocha • Jair Ribeiro da Silva Neto • Luiz Masagão Ribeiro • Alain J.P. Belda | Independent Member • Alfredo de Goeye Junior | Independent Member • Guilherme Affonso Ferreira | Independent Member • Walter Iório | Independent Member 8
Executive Board A strong executive team Luiz Masagão Jair Ribeiro Ribeiro CEO CEO Claudio Cusin Corporate Credit Kátia Moroni André Gilberto Eliezer R. da Silva Mesquita Faiwichow Middle Market VP Trade Finance, VP Commercial, Funding, VP Treasury & Products & Compliance & Syndications & Structured Investors Accounting & Internal Controls Fin. Institutions Relations Controlling Finance (Operating Risk) Liquidty & Jair Balma Credit Risk Market Risk Management Management Local Funding Officer Administration Legal Information Human Resources Technology & Marketing
Branch network Covering +80% of Brazilian GDP • Headquartered in São Paulo • 10 branches located in the highest economic potential regions • 1 offshore branch • 438 employees (Bank + Brokerage) − 203 front office − 235 middle & back office 10
STRATEGY
Strategy defined by our Vision... To be an innovative bank with excellence in corporate credit and deep understanding of our clients’ businesses and industries they operate, becoming also one of the leading players of the high-growth Brazilian corporate bond market. 12
...And built over three pillars Aiming at growing based on quality assets and recurring income PEOPLE CUSTOMERS PRODUCTS • New focus on better credit • Our main intangible asset • Stronger Products team profile customers • The basis for the success of our • Profound knowledge of the • Commercial teams restructured strategy market variables • Profound knowledge of the • Expertise in the Bank’s target • Attraction of new professionals customers activities and industry industry segments segments • Closer interaction with our • Product and service portfolio • Corporate culture cosnolidation customers enhancement • Expansion of business with • Structured solution to meet • Motivating BI&P team Corporate customers: X-selling specific customers’ needs and more stable income flow Middle Market: Companies with annual sales from R$40million to R$400 million Corporate: Companies with annual sales ranging from R$400 million and R$2,0 billion 13
Multiproduct Offering Product portfolio allows conquering new customers 14
THE SCENARIO AND OUR PERSPECTIVES
Credit evolution in Brazil Larger companies highlighted (loan agreements > R$10 mm) Credit volume in the Financial System Credit/GDP (%) 49,0% 50,6% 2.800 44,4% 45,2% • Credit/ GDP ratio exceeds 50% 40,5% 2.167 2.600 2.400 2.200 35,2% 2.030 2.000 1.706 1.414 • Individuals respond for 47% of total loans in the 1.800 1.600 1.227 R$ billion 1.400 1.200 1.000 936 system, up 21% during 2011 and 16% in 1H12 800 600 annualized, with great influence of housing loans. 400 200 0 2007 2008 2009 2010 2011 jun/12 • Companies represent 53% of total credit, up 17% in 2011 and 12% 1H12 annualized, driven by free Corporate Credit resources , specially working capital and loans Loan Agreements < R$100 tsd granted with foreign funding. from R$100 tsd to R$10 million Loan Agreements > R$10 million 1.125 1.169 938 696 788 • Credit Agreements with amounts above R$ 10 508 million, usually taken by larger companies, show R$ billion a better growth both in 2011 and in 1H12. 2007 2008 2009 2010 2011 mai/12 Source: Banco Central do Brasil *Annualized 16
Perspectives for Credit in Brazil Worst moment for delinquency is likely to be overcome BACEN data indicates improvement in he coming months Interest rate relevant drop Delinquency ratio dropping, yet marginal (loans overdue from 15 to 90 days fall down) 10% Corp 15-90 days Corp > 90 days Ind 15-90 days Ind > 90 days 8% 8% 6% 6% 4% 4% 2% 2% 0% 0% ja… jul… ja… jul… ja… jul… ja… jul… ja… jul… ja… jul… ja… jul… jan/0 jan/0 jul/0 jan/1 jan/1 jan/1 jul/0 jul/1 jul/1 jul/1 8 9 0 1 2 8 9 0 1 2 Source: Real interest rate 360 days Source: Banco Central do Brasil BM&FBovespa and Banco Central do Brasil 1,4% 1,2% Quartely GDP Projected GDP 1,0% 0,8% 0,6% 0,4% 0,2% 0,0% -0,2% dez/10 mar/11 dez/11 mar/12 dez/12 mar/13 jun/10 jun/11 jun/12 jun/13 set/10 set/11 set/12 17 Source: IBGE and projections by BI&P Economic Dept.
Perspectives for Credit in Brazil Credit shall continue growing in the 17% to 20% range 35% ___ Annual Credit Growth ___ Most likely scenario 30% 25% 20% 15% 10% 5% dez/07 mar/08 dez/08 mar/09 dez/09 mar/10 dez/10 mar/11 dez/11 mar/12 dez/12 mar/13 jun/08 jun/09 jun/10 jun/11 jun/12 jun/13 set/08 set/09 set/10 set/11 set/12 Fonte: BACEN e projeções Depto. Econômico BI&P 18
Taking such scenario into consideration... • Better quality short term loan origination is prioritized. • Fee income business increasing, also with the strengthening of the fixed income capital markets team. • Focus in developing franchise value in specific productive chains is maintained. • Funding mix effective management to support the credit portfolio growth. • Capital management aims at monitoring and developing alternatives to maximize its utilization. • Investments in systems, people and process reviewing are maintained to optimize resources and reduce costs. 19
OUR PERFORMANCE
Expanded Credit Portfolio Cautious growth under macroeconomic scenario 2.759 2.807 2.534 2.248 2.109 R$ million 2Q11 3Q11 4Q11 1Q12 2Q12 Loans & Discounted Receivables in Reais Trade Finance Guarantees Issued (L/G and L/C) Agricultural Bonds (CPR, CDA/WA and CDCA) Private Credit Bonds (PNs and Debentures) 21
Expanded Credit Portfolio Evolution Quality growth strategy maintained 1.163 2.807 2.534 (648) (170) (72) R$ million 4Q11 Credits Credit Write New transactions 2Q12 received and not renewed exits offs New Transactions 656 646 498 517 414 98% of the transactiosn disbursed in 1H12 R$ million were rated from AA to B. 2Q11 3Q11 4Q11 1Q12 2Q12 22
Expanded Credit Portfolio Breakdown by product group Expansion of product line contributed to access larger customers and allowed credit portfolio growth specially with • BNDES Onlendings , with the extension of credit Loans & Discounts line, this portfolio reached R$260.8 million, Trade in Real increasing by 12.9% in 2Q12 and 82.6% in 12 Finance 54% 16% months, mainly in the Corporate segment. • Guarantees and Letters of Credit issued totaled BNDES R$175.8 million, growing 7.3% in 2Q12 and Onlendings 9% 156.6% in 12 months. Receivables • Agricultural Bonds portfolio (CPRs and CDA/WAs, acquired classified as Marketable Securities, and CDCAs, in Other from the credit portfolio), amounted to R$267.0 1% Customers million, up 16.2% in the quarter and 622.4% in 12 Private Agricultural 3% Guarantees months. Credit Bonds Issued • Private Credit Bonds portfolio (debentures) Bonds 10% 6% 1% totaled R$30.7 million, 20.2% above the amount recorded in 1Q12. 23
Agricultural Bonds Portfolio Specializing in Agribusiness • Agricultural bonds activity started in 1Q11, plays an important role in our growing business strategy. Agricultural Bonds • Our agricultural bonds transactions are focused on commodities financing, specially grains, cotton, sugar 267 230 cane and coffee. 129 • The expertise of our team combined with the support of R$ million 37 52 external specialists improve business opportunities detection and risk mitigation. As an example, this 2Q11 3Q11 4Q11 1Q12 2Q12 year’s drought in the Southern Region did not impact payments in this portfolio. CPR Warrant (CDA/WA) CDCA • Our transactions count on instruments developed to protect from commodity price fluctuations to minimize risks. Our agricultural bonds activity aims to follow the agribusiness growth in Brazil and the great moment of the commodities market. 24
Expanded Credit Portfolio Significant presence of Agribusiness and Food related activities Agribusiness Food & Beverage 10% Civil Construction 1% 19% 2% Transportation & Logistics 2% Chemical & Pharmaceutical 2% 3% Financial Services 3% Pulp & Paper Automotive 4% Oil & Biofuel 16% Metal Industry 4% Textile, Apparel and Leather Education 4% Power Generation & Distribution 4% Financial Institutions 12% Retail & Wholesale 5% 5% Electronics 5% Other Industries (% lower than 1%) 25
Credit Portfolio Strategy for equilibrium between Corporate and Middle Market segment maintained Middle Market companies with annual revenues between • Migration of customers managed by the R$40 million and R$400 million 1.604 1.593 Middle Market team to Corporate, 1.572 1.501 1.267 responding for R$200 million outstanding volume in 2Q12. R$ million • Middle Market segment: 53% of Credit Portfolio (63% in 1Q12), and 51% of 2Q11 3Q11 4Q11 1Q12 2Q12 Expanded Credit Portfolio. Corporate • Corporate clients: 45% of Credit Portfolio companies with annual revenues between (35% in 1Q12), and 47% of Expanded Credit R$400 million and R$2 billion Portfolio. 1.078 • Average Exposure by Customer: R$ million 831 641 322 436 – Middle Market = R$2.2 million – Corporate = R$6.9 million 2Q11 3Q11 4Q11 1Q12 2Q12 26
Credit Portfolio Exposure by client and term of transactions Client Concentration Maturity +360 Other Top 10 days 25% 18% 27% up to 90 days 39% 181 to 11 - 60 61 - 160 360 days largest largest 15% 91 to 32% 25% 180 days 19% • Top 60 borrowers remain at 50% of Credit Portfolio (49% in 2Q11) • 73% of Credit Portfolio to mature up to 360 days 27
Credit Portfolio Quality Higher quality of new transactions Rating NPL / Credit Portfolio 92.1% 6,8% 2Q12 6% 37% 34% 16% 8% 6,3% 5,0% 91.8% 3,2% 6,3% 2,8% 1Q12 4% 39% 32% 17% 8% 4,7% 4,1% 89.7% 2,7% 2,6% 4Q11 2% 40% 28% 20% 10% 2Q11 3Q11 4Q11 1Q12 2Q12 AA A B C D-H NPL 60 days NPL 90 days • 99.4% of the transactions disbursed in 2Q12 were classified between AA and B. • Allowance for Loan Losses covers 176% of loans overdue more than 90 days. • R$17 million of fully provisioned H rated loans were written off during the quarter. 28
Funding Product mix helps cost reduction Time Deposits (CDB & DPGE) are the main sources of funding, however: 2.736 2.755 2.420 2.533 2.230 • Agribusiness Letters of Credit (LCAs) increased by 12.2% in the quarter and R$ million 150.8% in 12 months, supported by the agricultural bonds portfolio growth. 2Q11 3Q11 4Q11 1Q12 2Q12 in Real in Foreign Currency • Funding through Bank Notes (LFs) grew from R$7.4 million in 2Q11 to R$30.6 Time Insured million, and accounted for 1.1% of total Time deposits Deposits funding. (CDB) 27% LCA (DPGE) 12% 28% • 90% of foreign currency borrowings are Onlendings LF 10% 1% Trade Finance related . Foreign Interbank Demand Borrowings Deposits Deposits 16% 5% 1% 29
Performance NIM 7,7% • Financial intermediation income before ALL 6,6% 6,6% 7,1% 5,2% 6,3% 5,5% expenses increases NIM, since there was no material change in the balance of interest 5,8% bearing assets. 4,6% 4,8% 4,9% 5,3% 3,7% 4,1% • The significant improvement in the Efficiency 2Q11 3Q11 4Q11 1Q12 2Q12 1H11 1H12 Ratio keeps the trend started in 3Q11. NIM NIM(a) * • The increasing pipeline of structured transactions should contribute to improve our Efficiency Ratio efficiency through service fees. 78,6% 77,6% 78,6% 71,2% 68,1% • No significant headcount additions are 62,3% 65,1% forecasted and internal processes are continuously reviewed looking for optimizing, excellence and cost reduction. 2Q11 3Q11 4Q11 1Q12 2Q12 1H11 1H12 * NIM(a) adjusts remunerated average assets by repos with equivalent volumes, tenors and rates both in 30 assets and liabilities.
Profitability Bottom line still reflects the risk of credit portfolio originated before 2010 Net Profit Bottom line absorbs allowance for loan losses 10,3 5,1 7,3 5,0 7,5 expenses amounting to R$22.6 million in the 2,4 quarter and R$37.0 million in 1H12 (R$103.2 R$ million million in 1H11). 2Q11 3Q11 4Q11 1Q12 2Q12 1H11 1H12 -49.4 Return on Average Equity (ROAE) % Return on Average Assets (ROAA) % 7,3 1,0 5,2 0,7 3,6 3,5 2,6 0,5 0,5 0,3 1,7 0,2 2Q11 3Q11 4Q11 1Q12 2Q12 1H11 1H12 2Q11 3Q11 4Q11 1Q12 2Q12 1H11 1H12 -18.9 -2.5 31
Capital Structure Capitalization and liquidity still allow healthy growthShareholders’ Equity Assets & Liabilities Management 590,5 1.102 Assets Liabilities 1.106 566,5 577,5 577,1 582,4 810 682 503 442 R$ million R$ million 359 337 2Q11 3Q11 4Q11 1Q12 2Q12 90 days 180 days 360 days +360 days Basel Index (Tier I) Leverage Expanded Credit Portfolio / Shareholders’ Equity 21,3% 21,1% 4,6x 4,8x 18,2% 17,5% 4,4x 17,0% 3,7x 3,9x 2Q11 3Q11 4Q11 1Q12* 2Q12 2Q11 3Q11 4Q11 1Q12 2Q12 * Operating risk calculation for 1Q12 was adjusted, increasing this risk allocation from R$8.2 million 32 to R$20.2 million, with reduction in Basel Index in that quarter from 18.1% to 17.5%.
Share Performance 120 110 100 90 80 70 60 IBOVESPA IDVL4 IDVL4 adjusted for earnings 50 IDVL4 in 2Q12 IDVL4 Maximum Share Price in the period R$ 8.65 Average Daily Volume Minimum Share Price in the period R$ 6.21 - in June 2012 R$ 168,931 Share Price on Mar 30, 2012 R$ 8.60 - in 2Q12 R$ 117,887 Share Price on Jun 29, 2012 R$ 6.69 - in 12 months R$ 129,281 Change in the period -22.2% IBOVESPA Change in the period -15.7% 33
SUSTAINABILITY
Business Sustainability Policy of Social and Environmental Responsibility Encouraging the adoption of responsible attitudes towards: Social development, citizenship rescue and Environmental Respect Clients Goals: Credit restriction to companies: Expectation: • To expand social and • Using child labor, slavery or • To contribute for the environmental performance of alike; awareness of people and our customers; • With activities related to enterprises about the • To development of social and gambling and prostitution; importance of the rational environmental products - ABC utilization of natural resources • Operating in the production or and of the respect towards the Program - BNDES already marketing of substances deployed; social environment and threatening health and safety citizenship. • Quality in business relationships. of people, animals and plants. Social & Environmental Policy applied to credit 35
Sustainability and the Workforce • Benefits: Safety, Health and Life Quality • Training and Capabilities Development • Scholarship Programs • Trainee Program • Leadership Development • Policies and Code of Ethics • Social Inclusion Initiatives • Volunteer Program • Social & Environmental awareness • Sports Incentive 36
Sustainability and the Community • Through partnerships with nongovernmental organizations, BI&P invests in projects focused on education, culture, sports, environment, entrepreneurship and income generation. • The supported projects directly reach about 8,700 children, young people and adults and indirectly reach 32,800 people, including household members and community. • Furthermore, Indusval Sustainability Institute is part of RedEAmérica, an important network of institutes and foundations that join private capital for grassroots development. 37
IN A NUTSHELL
We are consolidating our fundamentals NEW CULTURE NEW STRUCTURE NEW POSITIONING Deep knowledge of market Strong and experienced Strategic Vision variables and of our customers’ management and teams businesses The new headquarters and Broader product offer, tailor- Development of edge and investments in technology and made to meet the needs of our expertise in certain business systems provide more safety customers and the industries chains where they operate and efficiency Development of effective Constant pursuit of innovation Solid policies and enhanced relationships with mid-sized and and excellence operational procedures large corporate customers 39
Highlights Amounts in R$ million, unless otherwise stated BALANCE SHEET 2010 2011 1H12 1Q12 2Q12 Credit Portfolio 1,876.9 2,269.6 2,395.6 2,385.6 2,395.6 Middle Market 1,538.5 1,571.8 1,266.7 1,500.8 1,266.7 Corporate 256.5 641.3 1,078.0 830.6 1,078.0 Other 1 81.9 56.5 51.0 54.2 51.0 Expanded Credi t Portfolio 2 1,941.2 2,534.4 2,807.1 2,759.1 2,807.1 Total Assets 3,276.1 4,278.3 4,966.5 4,583.0 4,966.5 Shareholders Equity 426.4 577.1 582.4 590.5 582.4 RESULTS 2010 2011 1H12 1Q12 2Q12 Financial Intermediation before ALL 190.2 170.6 110.4 50.8 59.6 3 ALL Expenses (49.0) (118.1) (37.0) (14.4) (22.6) Service Fees 12.8 19.9 12.0 6.6 5.4 Personell and Operating Expenses (95.9) (122.1) (71.4) (35.9) (35.6) Operating Result 41.6 (59.1) 15.3 9.3 6.0 Net Profit 29.0 (31.7) 7.5 5.0 2.4 1 Including Consumer Credit, Acquired Loans and Non-Operating Assets Sale Financing 2 Including Guarantees , Sureties, Leters of Credit, PN, debentures and agro bonds. 3 Including complementary allowance for loan losses. 40
Highlights Amounts in R$ million, unless otherwise stated PERFORMANCE 2010 2011 1H12 1Q12 2Q12 Leverage (Credit portfolio/ Equity) 4.6x 4.4x 4.8x 4.7x 4.8x Basel ratio 17.6% 18.2% 17.0% 17.5% 17.0% Return on average Equity 6.8% -6.3% 2.6% 3.5% 1.7% Adjusted Net Financial Margin 6.6% 4.3% 5.3% 4.9% 5.8% Efficiency Ratio 60.1% 76.3% 65.1% 68.1% 62.3% STOCK 2010 2011 1H12 1Q12 2Q12 Number of Shares in Free Float1 (in thousand) 40,466 62,359 62,371 62,371 62,371 IOE paid 25.1 27.8 - - - IOE paid per Share (R$) 0.61 0.53 - - - Price/ Book Value 0.75x 0.73x 0.72x 0.91x 0.72x Market Capitalization 321.7 420.9 417.3 536.4 417.3 1 Shares issued (-) Treasury Shares 41
Investor Relations Contact Information Gil Faiwichow Banco Indusval S/A Treasury VP and IRO Rua Iguatemi, 151 – 6th floor Phone: (55 11) 3315-6821 01451-011 São Paulo – SP – Brazil E-mail: gfaiwichow@bip.b.br Website: www.bip.b.br/ir Maria Angela R. Valente Isabel Paiva e Sousa Oliveira Head of IR IR Manager Phone: (55 11) 3315-6821 Phone: (55 11) 3315-6677 E-mail: mvalente@bip.b.br E-mail: ipoliveira@bip.b.br 42
2012 Annual Public Meeting

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2012 Annual Public Meeting

  • 1.
    Annual Public Meeting with Analysts& Investors August 28, 2012
  • 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, 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. 1
  • 3.
  • 4.
    BI&P - BancoIndusval & Partners is a commercial bank listed at Level 2 Corporate Governance of the BM&FBOVESPA, with over 40 years of experience in the financial market, focusing on local and foreign currency corporate loan products. BI&P relies on a network of 11 branches strategically located in economically relevant Brazilian regions, including an offshore branch in Cayman Islands, its brokerage firm operating at the São Paulo Stock, Commodities and Futures Exchange - BM&FBOVESPA and Serglobal Cereais, acquired in April 2011, which originates agricultural bonds. Agency Risk Rating Last Report Global: BB/ Stable/ B Standard & Poor’s August 2012 National: brA+/ Stable/ brA-1 FitchRatings National: BBB/ Stable/ F3 July 2012 Global: Ba3/ Stable/ Not Prime Moody’s November 2011 National: A2.br/ Stable/ BR-2 Index: 10,43 RiskBank July 2012 Low Risk Short Term 3
  • 5.
    45 years ofpartnerships and evolution A history built on credibility 2012 Level 2 BM&FBOVESPA 2011 2010 Strategic review 2007 IPO and opening of 6 2006 branches 2004 Opening of first Sale of 4 branches 2003 Consumer Credit Merger with Business 1991 Banco Authorized Multistock to operate as 1967 a Bank Brokerage Firm establihed 4
  • 6.
    Capital Structure Luiz CONTROLLING GROUP FREE FLOAT Manoel F. Masagão Cintra Treasury Warburg Other Ribeiro Pincus Jair Ribeiro PN = 3% ON = 13% ON = 31% Carlos Antonio G. Total = 1% PN = 45% PN = 50% ON = 56% ON = 44% Total = 39% Ciampolini da Rocha Total = 26% PN = 2% PN = 95% Total = 34% Total = 65% 17.7% 100.0% 100.0% 23.8% Sertrading Serglobal Cereais BI&P Brasil Agrosec Indusval & Partners Securitizadora Corretora Position as of June 30, 2012 5
  • 7.
    Capital breakdown Controlling Treasury Class Total capital Management Free Float Group Shares Common 36,945,649 20,743,333 277,307 - 15,925,009 43.1% Preferred 26,160,044 609,226 60,125 734,515 24,756,178 94.6% Total 63,105,693 21,352,559 337,432 734,515 40,681,187 64.5% As of June, 30, 2012 Shareholder Base Controlling Individuals Group 20% 34% Management 1% Treasury Foreign 1% Investors 30% Institutional Investors 14% 6
  • 8.
    Corporate Governance Committees strenghthen our Governance Shareholders Meeting Supervisory Board Board of Directors Remuneration Committee Internal Audit Committee Executive Board Products Cash and ALCO Credit Special Cases Committee Committee Committee Committee Compliance IT and Information Safety Human resources Committee Legal Committee Committee Committee 7
  • 9.
    Supervisory Board andBoard of Directors Experienced leaders Supervisory Board • Francisco de Paulo dos Reis Junior | Sitting Member • Jairo da Rocha Soares | Sitting Member • João Verner Juenemann | Sitting Member Board of Directors • Manoel Felix Cintra Neto | Chairman • Carlos Ciampolini | Vice Chairman • Antonio Geraldo da Rocha • Jair Ribeiro da Silva Neto • Luiz Masagão Ribeiro • Alain J.P. Belda | Independent Member • Alfredo de Goeye Junior | Independent Member • Guilherme Affonso Ferreira | Independent Member • Walter Iório | Independent Member 8
  • 10.
    Executive Board A strong executive team Luiz Masagão Jair Ribeiro Ribeiro CEO CEO Claudio Cusin Corporate Credit Kátia Moroni André Gilberto Eliezer R. da Silva Mesquita Faiwichow Middle Market VP Trade Finance, VP Commercial, Funding, VP Treasury & Products & Compliance & Syndications & Structured Investors Accounting & Internal Controls Fin. Institutions Relations Controlling Finance (Operating Risk) Liquidty & Jair Balma Credit Risk Market Risk Management Management Local Funding Officer Administration Legal Information Human Resources Technology & Marketing
  • 11.
    Branch network Covering +80% of Brazilian GDP • Headquartered in São Paulo • 10 branches located in the highest economic potential regions • 1 offshore branch • 438 employees (Bank + Brokerage) − 203 front office − 235 middle & back office 10
  • 12.
  • 13.
    Strategy defined byour Vision... To be an innovative bank with excellence in corporate credit and deep understanding of our clients’ businesses and industries they operate, becoming also one of the leading players of the high-growth Brazilian corporate bond market. 12
  • 14.
    ...And built overthree pillars Aiming at growing based on quality assets and recurring income PEOPLE CUSTOMERS PRODUCTS • New focus on better credit • Our main intangible asset • Stronger Products team profile customers • The basis for the success of our • Profound knowledge of the • Commercial teams restructured strategy market variables • Profound knowledge of the • Expertise in the Bank’s target • Attraction of new professionals customers activities and industry industry segments segments • Closer interaction with our • Product and service portfolio • Corporate culture cosnolidation customers enhancement • Expansion of business with • Structured solution to meet • Motivating BI&P team Corporate customers: X-selling specific customers’ needs and more stable income flow Middle Market: Companies with annual sales from R$40million to R$400 million Corporate: Companies with annual sales ranging from R$400 million and R$2,0 billion 13
  • 15.
    Multiproduct Offering Product portfolio allows conquering new customers 14
  • 16.
    THE SCENARIO ANDOUR PERSPECTIVES
  • 17.
    Credit evolution inBrazil Larger companies highlighted (loan agreements > R$10 mm) Credit volume in the Financial System Credit/GDP (%) 49,0% 50,6% 2.800 44,4% 45,2% • Credit/ GDP ratio exceeds 50% 40,5% 2.167 2.600 2.400 2.200 35,2% 2.030 2.000 1.706 1.414 • Individuals respond for 47% of total loans in the 1.800 1.600 1.227 R$ billion 1.400 1.200 1.000 936 system, up 21% during 2011 and 16% in 1H12 800 600 annualized, with great influence of housing loans. 400 200 0 2007 2008 2009 2010 2011 jun/12 • Companies represent 53% of total credit, up 17% in 2011 and 12% 1H12 annualized, driven by free Corporate Credit resources , specially working capital and loans Loan Agreements < R$100 tsd granted with foreign funding. from R$100 tsd to R$10 million Loan Agreements > R$10 million 1.125 1.169 938 696 788 • Credit Agreements with amounts above R$ 10 508 million, usually taken by larger companies, show R$ billion a better growth both in 2011 and in 1H12. 2007 2008 2009 2010 2011 mai/12 Source: Banco Central do Brasil *Annualized 16
  • 18.
    Perspectives for Creditin Brazil Worst moment for delinquency is likely to be overcome BACEN data indicates improvement in he coming months Interest rate relevant drop Delinquency ratio dropping, yet marginal (loans overdue from 15 to 90 days fall down) 10% Corp 15-90 days Corp > 90 days Ind 15-90 days Ind > 90 days 8% 8% 6% 6% 4% 4% 2% 2% 0% 0% ja… jul… ja… jul… ja… jul… ja… jul… ja… jul… ja… jul… ja… jul… jan/0 jan/0 jul/0 jan/1 jan/1 jan/1 jul/0 jul/1 jul/1 jul/1 8 9 0 1 2 8 9 0 1 2 Source: Real interest rate 360 days Source: Banco Central do Brasil BM&FBovespa and Banco Central do Brasil 1,4% 1,2% Quartely GDP Projected GDP 1,0% 0,8% 0,6% 0,4% 0,2% 0,0% -0,2% dez/10 mar/11 dez/11 mar/12 dez/12 mar/13 jun/10 jun/11 jun/12 jun/13 set/10 set/11 set/12 17 Source: IBGE and projections by BI&P Economic Dept.
  • 19.
    Perspectives for Creditin Brazil Credit shall continue growing in the 17% to 20% range 35% ___ Annual Credit Growth ___ Most likely scenario 30% 25% 20% 15% 10% 5% dez/07 mar/08 dez/08 mar/09 dez/09 mar/10 dez/10 mar/11 dez/11 mar/12 dez/12 mar/13 jun/08 jun/09 jun/10 jun/11 jun/12 jun/13 set/08 set/09 set/10 set/11 set/12 Fonte: BACEN e projeções Depto. Econômico BI&P 18
  • 20.
    Taking such scenariointo consideration... • Better quality short term loan origination is prioritized. • Fee income business increasing, also with the strengthening of the fixed income capital markets team. • Focus in developing franchise value in specific productive chains is maintained. • Funding mix effective management to support the credit portfolio growth. • Capital management aims at monitoring and developing alternatives to maximize its utilization. • Investments in systems, people and process reviewing are maintained to optimize resources and reduce costs. 19
  • 21.
  • 22.
    Expanded Credit Portfolio Cautiousgrowth under macroeconomic scenario 2.759 2.807 2.534 2.248 2.109 R$ million 2Q11 3Q11 4Q11 1Q12 2Q12 Loans & Discounted Receivables in Reais Trade Finance Guarantees Issued (L/G and L/C) Agricultural Bonds (CPR, CDA/WA and CDCA) Private Credit Bonds (PNs and Debentures) 21
  • 23.
    Expanded Credit PortfolioEvolution Quality growth strategy maintained 1.163 2.807 2.534 (648) (170) (72) R$ million 4Q11 Credits Credit Write New transactions 2Q12 received and not renewed exits offs New Transactions 656 646 498 517 414 98% of the transactiosn disbursed in 1H12 R$ million were rated from AA to B. 2Q11 3Q11 4Q11 1Q12 2Q12 22
  • 24.
    Expanded Credit Portfolio Breakdownby product group Expansion of product line contributed to access larger customers and allowed credit portfolio growth specially with • BNDES Onlendings , with the extension of credit Loans & Discounts line, this portfolio reached R$260.8 million, Trade in Real increasing by 12.9% in 2Q12 and 82.6% in 12 Finance 54% 16% months, mainly in the Corporate segment. • Guarantees and Letters of Credit issued totaled BNDES R$175.8 million, growing 7.3% in 2Q12 and Onlendings 9% 156.6% in 12 months. Receivables • Agricultural Bonds portfolio (CPRs and CDA/WAs, acquired classified as Marketable Securities, and CDCAs, in Other from the credit portfolio), amounted to R$267.0 1% Customers million, up 16.2% in the quarter and 622.4% in 12 Private Agricultural 3% Guarantees months. Credit Bonds Issued • Private Credit Bonds portfolio (debentures) Bonds 10% 6% 1% totaled R$30.7 million, 20.2% above the amount recorded in 1Q12. 23
  • 25.
    Agricultural Bonds Portfolio Specializingin Agribusiness • Agricultural bonds activity started in 1Q11, plays an important role in our growing business strategy. Agricultural Bonds • Our agricultural bonds transactions are focused on commodities financing, specially grains, cotton, sugar 267 230 cane and coffee. 129 • The expertise of our team combined with the support of R$ million 37 52 external specialists improve business opportunities detection and risk mitigation. As an example, this 2Q11 3Q11 4Q11 1Q12 2Q12 year’s drought in the Southern Region did not impact payments in this portfolio. CPR Warrant (CDA/WA) CDCA • Our transactions count on instruments developed to protect from commodity price fluctuations to minimize risks. Our agricultural bonds activity aims to follow the agribusiness growth in Brazil and the great moment of the commodities market. 24
  • 26.
    Expanded Credit Portfolio Significantpresence of Agribusiness and Food related activities Agribusiness Food & Beverage 10% Civil Construction 1% 19% 2% Transportation & Logistics 2% Chemical & Pharmaceutical 2% 3% Financial Services 3% Pulp & Paper Automotive 4% Oil & Biofuel 16% Metal Industry 4% Textile, Apparel and Leather Education 4% Power Generation & Distribution 4% Financial Institutions 12% Retail & Wholesale 5% 5% Electronics 5% Other Industries (% lower than 1%) 25
  • 27.
    Credit Portfolio Strategy forequilibrium between Corporate and Middle Market segment maintained Middle Market companies with annual revenues between • Migration of customers managed by the R$40 million and R$400 million 1.604 1.593 Middle Market team to Corporate, 1.572 1.501 1.267 responding for R$200 million outstanding volume in 2Q12. R$ million • Middle Market segment: 53% of Credit Portfolio (63% in 1Q12), and 51% of 2Q11 3Q11 4Q11 1Q12 2Q12 Expanded Credit Portfolio. Corporate • Corporate clients: 45% of Credit Portfolio companies with annual revenues between (35% in 1Q12), and 47% of Expanded Credit R$400 million and R$2 billion Portfolio. 1.078 • Average Exposure by Customer: R$ million 831 641 322 436 – Middle Market = R$2.2 million – Corporate = R$6.9 million 2Q11 3Q11 4Q11 1Q12 2Q12 26
  • 28.
    Credit Portfolio Exposure byclient and term of transactions Client Concentration Maturity +360 Other Top 10 days 25% 18% 27% up to 90 days 39% 181 to 11 - 60 61 - 160 360 days largest largest 15% 91 to 32% 25% 180 days 19% • Top 60 borrowers remain at 50% of Credit Portfolio (49% in 2Q11) • 73% of Credit Portfolio to mature up to 360 days 27
  • 29.
    Credit Portfolio Quality Higher quality of new transactions Rating NPL / Credit Portfolio 92.1% 6,8% 2Q12 6% 37% 34% 16% 8% 6,3% 5,0% 91.8% 3,2% 6,3% 2,8% 1Q12 4% 39% 32% 17% 8% 4,7% 4,1% 89.7% 2,7% 2,6% 4Q11 2% 40% 28% 20% 10% 2Q11 3Q11 4Q11 1Q12 2Q12 AA A B C D-H NPL 60 days NPL 90 days • 99.4% of the transactions disbursed in 2Q12 were classified between AA and B. • Allowance for Loan Losses covers 176% of loans overdue more than 90 days. • R$17 million of fully provisioned H rated loans were written off during the quarter. 28
  • 30.
    Funding Productmix helps cost reduction Time Deposits (CDB & DPGE) are the main sources of funding, however: 2.736 2.755 2.420 2.533 2.230 • Agribusiness Letters of Credit (LCAs) increased by 12.2% in the quarter and R$ million 150.8% in 12 months, supported by the agricultural bonds portfolio growth. 2Q11 3Q11 4Q11 1Q12 2Q12 in Real in Foreign Currency • Funding through Bank Notes (LFs) grew from R$7.4 million in 2Q11 to R$30.6 Time Insured million, and accounted for 1.1% of total Time deposits Deposits funding. (CDB) 27% LCA (DPGE) 12% 28% • 90% of foreign currency borrowings are Onlendings LF 10% 1% Trade Finance related . Foreign Interbank Demand Borrowings Deposits Deposits 16% 5% 1% 29
  • 31.
    Performance NIM 7,7% • Financial intermediation income before ALL 6,6% 6,6% 7,1% 5,2% 6,3% 5,5% expenses increases NIM, since there was no material change in the balance of interest 5,8% bearing assets. 4,6% 4,8% 4,9% 5,3% 3,7% 4,1% • The significant improvement in the Efficiency 2Q11 3Q11 4Q11 1Q12 2Q12 1H11 1H12 Ratio keeps the trend started in 3Q11. NIM NIM(a) * • The increasing pipeline of structured transactions should contribute to improve our Efficiency Ratio efficiency through service fees. 78,6% 77,6% 78,6% 71,2% 68,1% • No significant headcount additions are 62,3% 65,1% forecasted and internal processes are continuously reviewed looking for optimizing, excellence and cost reduction. 2Q11 3Q11 4Q11 1Q12 2Q12 1H11 1H12 * NIM(a) adjusts remunerated average assets by repos with equivalent volumes, tenors and rates both in 30 assets and liabilities.
  • 32.
    Profitability Bottom line stillreflects the risk of credit portfolio originated before 2010 Net Profit Bottom line absorbs allowance for loan losses 10,3 5,1 7,3 5,0 7,5 expenses amounting to R$22.6 million in the 2,4 quarter and R$37.0 million in 1H12 (R$103.2 R$ million million in 1H11). 2Q11 3Q11 4Q11 1Q12 2Q12 1H11 1H12 -49.4 Return on Average Equity (ROAE) % Return on Average Assets (ROAA) % 7,3 1,0 5,2 0,7 3,6 3,5 2,6 0,5 0,5 0,3 1,7 0,2 2Q11 3Q11 4Q11 1Q12 2Q12 1H11 1H12 2Q11 3Q11 4Q11 1Q12 2Q12 1H11 1H12 -18.9 -2.5 31
  • 33.
    Capital Structure Capitalization andliquidity still allow healthy growthShareholders’ Equity Assets & Liabilities Management 590,5 1.102 Assets Liabilities 1.106 566,5 577,5 577,1 582,4 810 682 503 442 R$ million R$ million 359 337 2Q11 3Q11 4Q11 1Q12 2Q12 90 days 180 days 360 days +360 days Basel Index (Tier I) Leverage Expanded Credit Portfolio / Shareholders’ Equity 21,3% 21,1% 4,6x 4,8x 18,2% 17,5% 4,4x 17,0% 3,7x 3,9x 2Q11 3Q11 4Q11 1Q12* 2Q12 2Q11 3Q11 4Q11 1Q12 2Q12 * Operating risk calculation for 1Q12 was adjusted, increasing this risk allocation from R$8.2 million 32 to R$20.2 million, with reduction in Basel Index in that quarter from 18.1% to 17.5%.
  • 34.
    Share Performance 120 110 100 90 80 70 60 IBOVESPA IDVL4 IDVL4 adjusted for earnings 50 IDVL4 in 2Q12 IDVL4 Maximum Share Price in the period R$ 8.65 Average Daily Volume Minimum Share Price in the period R$ 6.21 - in June 2012 R$ 168,931 Share Price on Mar 30, 2012 R$ 8.60 - in 2Q12 R$ 117,887 Share Price on Jun 29, 2012 R$ 6.69 - in 12 months R$ 129,281 Change in the period -22.2% IBOVESPA Change in the period -15.7% 33
  • 35.
  • 36.
    Business Sustainability Policy of Social and Environmental Responsibility Encouraging the adoption of responsible attitudes towards: Social development, citizenship rescue and Environmental Respect Clients Goals: Credit restriction to companies: Expectation: • To expand social and • Using child labor, slavery or • To contribute for the environmental performance of alike; awareness of people and our customers; • With activities related to enterprises about the • To development of social and gambling and prostitution; importance of the rational environmental products - ABC utilization of natural resources • Operating in the production or and of the respect towards the Program - BNDES already marketing of substances deployed; social environment and threatening health and safety citizenship. • Quality in business relationships. of people, animals and plants. Social & Environmental Policy applied to credit 35
  • 37.
    Sustainability and theWorkforce • Benefits: Safety, Health and Life Quality • Training and Capabilities Development • Scholarship Programs • Trainee Program • Leadership Development • Policies and Code of Ethics • Social Inclusion Initiatives • Volunteer Program • Social & Environmental awareness • Sports Incentive 36
  • 38.
    Sustainability and theCommunity • Through partnerships with nongovernmental organizations, BI&P invests in projects focused on education, culture, sports, environment, entrepreneurship and income generation. • The supported projects directly reach about 8,700 children, young people and adults and indirectly reach 32,800 people, including household members and community. • Furthermore, Indusval Sustainability Institute is part of RedEAmérica, an important network of institutes and foundations that join private capital for grassroots development. 37
  • 39.
  • 40.
    We are consolidatingour fundamentals NEW CULTURE NEW STRUCTURE NEW POSITIONING Deep knowledge of market Strong and experienced Strategic Vision variables and of our customers’ management and teams businesses The new headquarters and Broader product offer, tailor- Development of edge and investments in technology and made to meet the needs of our expertise in certain business systems provide more safety customers and the industries chains where they operate and efficiency Development of effective Constant pursuit of innovation Solid policies and enhanced relationships with mid-sized and and excellence operational procedures large corporate customers 39
  • 41.
    Highlights Amounts in R$ million, unless otherwise stated BALANCE SHEET 2010 2011 1H12 1Q12 2Q12 Credit Portfolio 1,876.9 2,269.6 2,395.6 2,385.6 2,395.6 Middle Market 1,538.5 1,571.8 1,266.7 1,500.8 1,266.7 Corporate 256.5 641.3 1,078.0 830.6 1,078.0 Other 1 81.9 56.5 51.0 54.2 51.0 Expanded Credi t Portfolio 2 1,941.2 2,534.4 2,807.1 2,759.1 2,807.1 Total Assets 3,276.1 4,278.3 4,966.5 4,583.0 4,966.5 Shareholders Equity 426.4 577.1 582.4 590.5 582.4 RESULTS 2010 2011 1H12 1Q12 2Q12 Financial Intermediation before ALL 190.2 170.6 110.4 50.8 59.6 3 ALL Expenses (49.0) (118.1) (37.0) (14.4) (22.6) Service Fees 12.8 19.9 12.0 6.6 5.4 Personell and Operating Expenses (95.9) (122.1) (71.4) (35.9) (35.6) Operating Result 41.6 (59.1) 15.3 9.3 6.0 Net Profit 29.0 (31.7) 7.5 5.0 2.4 1 Including Consumer Credit, Acquired Loans and Non-Operating Assets Sale Financing 2 Including Guarantees , Sureties, Leters of Credit, PN, debentures and agro bonds. 3 Including complementary allowance for loan losses. 40
  • 42.
    Highlights Amounts in R$ million, unless otherwise stated PERFORMANCE 2010 2011 1H12 1Q12 2Q12 Leverage (Credit portfolio/ Equity) 4.6x 4.4x 4.8x 4.7x 4.8x Basel ratio 17.6% 18.2% 17.0% 17.5% 17.0% Return on average Equity 6.8% -6.3% 2.6% 3.5% 1.7% Adjusted Net Financial Margin 6.6% 4.3% 5.3% 4.9% 5.8% Efficiency Ratio 60.1% 76.3% 65.1% 68.1% 62.3% STOCK 2010 2011 1H12 1Q12 2Q12 Number of Shares in Free Float1 (in thousand) 40,466 62,359 62,371 62,371 62,371 IOE paid 25.1 27.8 - - - IOE paid per Share (R$) 0.61 0.53 - - - Price/ Book Value 0.75x 0.73x 0.72x 0.91x 0.72x Market Capitalization 321.7 420.9 417.3 536.4 417.3 1 Shares issued (-) Treasury Shares 41
  • 43.
    Investor Relations ContactInformation Gil Faiwichow Banco Indusval S/A Treasury VP and IRO Rua Iguatemi, 151 – 6th floor Phone: (55 11) 3315-6821 01451-011 São Paulo – SP – Brazil E-mail: gfaiwichow@bip.b.br Website: www.bip.b.br/ir Maria Angela R. Valente Isabel Paiva e Sousa Oliveira Head of IR IR Manager Phone: (55 11) 3315-6821 Phone: (55 11) 3315-6677 E-mail: mvalente@bip.b.br E-mail: ipoliveira@bip.b.br 42