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3Q10 Institutional Presentation
- 1. Banco PINE isspecialized in financial services for corporations Institutional Presentation 3Q10
- 2. Content History andProfile Banco PINE at a Glance History of Banco PINE Business Strategy Business Model Wide Product Base Credit Process Organizational Structure Current Scenario and Future Prospects Highlights and Results Corporate Governance and Shares Corporate Governance Main Committees Shareholders’ Structure Dividends Social Responsibility Market Recognition Rating upgrade by Fitch Events and Highlights of the Period Banco PINE Investor Relations | 3Q10 | 2/33
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- 4. Banco PINE ata Glance Results based on strong credit structure and on complete services for companies. Banco PINE Specialized on financial services for corporations: Banco PINE is focused on serving companies with annual revenues above R$150 million and thoroughly Results Growth: Positive contribution of all business lines: Corporate million, Loans Sales Desk and PINE Investimentos understands the needs and strategies of its clients Banco PINE offers: • Credit and onlending products in local and Loans, Close relationship with clients:: Around 80% of the active client base uses more than one product offered by the Bank foreign currency • Financial and strategic advisory services • Treasury products • Investments Solid Credit Ratings A1.br Brazil national scale Ba2 Long/short-term foreign and local-currency deposit br A- Brazil national scale BB- Long/short-term foreign and local-currency deposit A(bra) Brazil national scale BB- Long/short-term foreign and local-currency deposit Investor Relations | 3Q10 | 4/33
- 5. History of BancoPINE Founded in 1997, Banco PINE has been showing a track record of resilient development. 1997 Foundation of Banco PINE Sole focus on Corporate Lending 2007 IPO Foundation of the Cayman Branch 2005 Noberto Pinheiro becomes Banco PINE’s sole shareholder 1939 Foundation of Banco Central do Nordeste 1975 Noberto Pinheiro becomes one of the BMC’s controlling shareholder 2009 Foundation of PINE Investimentos 1939 – Pinheiro Family founds its first bank in Brazil – Banco Central do Nordeste 1975 - Noberto Pinheiro becomes one of the controlling shareholders of Banco BMC 1997 - Noberto and Nelson Pinheiro sell their stake at BMC and found Banco PINE 2005 - Noberto Pinheiro becomes Banco PINE’s sole shareholder 2007 – IPO and start up of Cayman branch 2009 - Foundation of PINE Investimentos Investor Relations | 3Q10 | 5/33
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- 7. Business Model Diversityof financial instruments for the diverse needs of our clients. Credit products in local and foreign currency Loans Funding products in local and foreign currency Local deposits Credit and Funding Products Overdraft accounts Discounts BNDES onlending Guarantees Double index CDB LCA (Agribusiness Letters of Credit)/LCI BNDES onlending FIDC and Credit funds Compror/Vendor ACC/ACE Export Pre-payment Finimp Senior and subordinated local financial notes Time Deposits CD – Certificate of Deposit Eurobonds Letter of Credit 2,770 onlending Subordinated notes 2,770 onlending Clients’ PINE Investimentos Products for mitigating market risk mismatches Currencies, Commodities, Interest and Index derivatives: Credit Structuring Syndicated Loans Third-parties Asset Management Clients Sales Desk NDF Options Swaps Structured Options Credit Funds Private Equity Funds Corporate Services Mergers & Acquisitions p FX Financial Advisory Investor Relations | 3Q10 | 7/33
- 8. Wide Product Base Financial instruments diversity for the diverse needs of our clients. Corporate Foreign Exchange Onlending Guarantees Sales Desk PINE Investments Loans Loans Overdraft accounts Discounts Compror/Vendor / Trade Finance Exports ACC/ACE Letter of Credit Documentary BNDES FINAME BNDES Automatic BNDES Working Capital Bidding Public tenders Performance Credit/Financial Currencies Rates Commodities Equities Local Currency CDB/ RDB /CDI Financial Bonds (Letras Financeiras) Government Bonds Investimentos Capital Markets CRI, FIDC, CCB, Debenture Underwriting Linked Collection Collection Prepayment Imports Letter of Credit BNDES EXIM FINEM PRODECOP Institutions Macro Advisory FIDC (Receivables Investment Funds) LCA (Agribusiness Letters of Credit) Credit Funds P i E i Syndicated Loans Project Finance Asset Management Advance Payments Spot Foreign Exchange Foreign currency Private Equity DPGE Foreign Currency CD -Certificate of D it Credit Fund, Mutual Fund and exclusive Fund Management Asset Allocation Private Equity loans Deposit CLN – Credit Linked Notes Eurobonds Custody Account M M kt Financial Advisory M&A Private Placement Money Market Accounts Time Deposit Private Equity Financial Restructuring Appraisal Reports Operational and Strategic Partnerships Investor Relations | 3Q10 | 8/33
- 9. Credit Process 72-hourprocess in average; credit analysis may be concluded within 1 business day in special cases. Strong origination team CREDIT COMMITTEE Deep knowledge of our client base Cross-selling of credit products and financial services Presentation of proposals to the Chief Credit Officer Diligent and complete credit analysis Expertise and flexibility in structuring Committee rocess and Credit Analysts Platform and credit Close monitoring of clients’ credit evolution decision process Issue of opinion Credit analysis, visits li d ctronic Pr Regional Superintendents Agile credit decision-making Management of receivables portfolio and collateral quality to clients, data update, interaction with internal research and issue of opinion Ele Credit Analyst Efficient loan process, documentation and controls Sales Officer Credit Origination Investor Relations | 3Q10 | 9/33
- 10. Organizational Structure Non-bureaucraticstructure and flat hierarchy, streamlining the decision making process. Board of Directors Internal Auditors Tikara Yoneya External Auditors Deloitte Noberto Pinheiro Chairman Noberto N. Pinheiro Jr. Vice-Chairman Maurizio Mauro Independent Member Fernando Albino External Member Mailson da Nóbrega Independent Member CEO Fiscal Council Operating Risks Sidney Veneziani Sérgio Machado Alcindo Itikawa Noberto N. Pinheiro Jr. & Compliance Pine Investimentos Gustavo Junqueira Control and Market/ Liquidity Risk M t Financial & Products N b t Z i t J Origination Cli B t lh Credit Risk & Analysis G b i l Chi t Operations Uli Al t ill Management Susana Waldeck Clive Botelho Norberto Zaiet Jr. Ulisses Alcantarilla Gabriela Chiste Corporate • Loan Portfolio R$5.3 billion • Around 900 Clients Corporate Credit • Analysis and granting of credit • Credit monitoring Sales Desk Distribution • Local • I t ti l Market and liquidity Risk Human Resources Capital Markets Asset Management Financial Advisory Corporate Processing and Formalization L l • São Paulo • Campinas • Ribeirão Preto • São José do Rio Preto • Rio de Janeiro • Curitiba • Porto Alegre risk and analysis by sector International Pricing Desk • FX • Interest • Commodities • Equities Macro Research Accounting Controlling Department Legal • Belo Horizonte • Recife • Fortaleza Products Investor Relations Investor Relations | 3Q10 | 10/33
- 11. The Current Scenarioand Future Prospects Banco PINE has the key resources to continue developing its strategy: adequate capitalization, efficient funding and qualified personnel. Adequate capital structure 9 Issuance of a US$125 million subordinated debt, approved by the Brazilian Central Bank as Tier II capital Efficient funding structure 9 Lengthening of maturities: 18 months average (September/2010) 9 in June Greater diversification 9Still room for Tier II capital 9Capital Adequacy Ratio (BIS) of 18.4% Cross selling opportunities in the client Well prepared and encouraged team 9Meritocracy Cross-base 9Customized client service, understanding thoroughly their needs y 9Qualification 9 Products diversity built over the past years 9Around 80% of the client base uses more than one product (September/2010) Investor Relations | 3Q10 | 11/33
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- 13. 3Q10 Highlights Allmain indicators showed improvement in the period... Corporate Loan Portfolio (R$ Million) Δ Quarter Δ 12M 9.8% 54.1% Total Funding (R$ Million) Δ Quarter Δ 12M 10.2% 39.1% Operating Income (R$ Million) Δ Quarter Δ 12M 20.7% 93.9% 76.0% 5 265 5 390 181.3 3,416 4,794 5,265 3,875 4,890 5,390 37.6 60.4 73.0 103.0 Sep-09 Jun-10 Sep-10 Sep-09 Jun-10 Sep-10 Net Income (R$ Million) Δ Quarter Δ 12M ROAE Δ Quarter Δ 12M 3Q09 2Q10 3Q10 9M09 9M10 Efficiency Ratio Δ Quarter Δ 12M 5.6% 70.4% 61.7% 70 bps 730 bps 610 bps -290 bps -740 bps -500 bps 35 6 37 6 63.9 103.4 11.3% 17.9% 18.6% 10.5% 16.6% 38.0% 33.5% 30.6% 38.9% 33.9% 22.1 35.6 37.6 3Q09 2Q10 3Q10 9M09 9M10 3Q09 2Q10 3Q10 9M09 9M10 3Q09 2Q10 3Q10 9M09 9M10 Investor Relations | 3Q10 | 13/33
- 14. Earnings …with consistentearnings growth. Operating Income (R$ Million) Gradual and consistent income 73.0 growth in post-crisis period: 60.4 50.9 20.7% in the quarter and 93.9% 47 9 versus 3Q09. 29.7 30.8 34.5 37.6 38.2 47.9 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 Net Income (R$ Million) Net Income growth over the last quarters: 5.6% in the quarter and 70.4% in 12 months. 33.4 19.8 20.1 21.8 22.1 21.1 30.2 35.6 37.6 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 Investor Relations | 3Q10 | 14/33
- 15. Credit Portfolio Thecredit portfolio presented selective growth, returning to pre-crisis levels and… Corporate Loan Portfolio (R$ Million) Corporate credit portfolio grew by 9.8% in 3Q10, 27.9% in 9 months and 54 1% in 12 months 34 0 8 6 118 ,462 4,794 5,265 54.1% months. 3,53 3,070 2,842 3,068 3,41 4,1 4 4 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Total Loan Portfolio (R$ Million) Increase of the corporate loan portfolio, which represents 7 96% of the total credit portfolio. 4,885 4,264 3,873 3,922 4,113 4,753 4,980 5,208 5,617 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Investor Relations | 3Q10 | 15/33
- 16. Credit Portfolio Profile- Corporate …growing in a diversified manner, both in sectors and products... Loan Portfolio by Region Mid-West 11 8% North 2.6% Loan Portfolio by Sector 11.8% Northeast 9.0% Agriculture 9% Construction 6% Meat packing 6% Financial Institutions 5% Vehicles and Parts 4% Southeast 65.7% South 10.9% Electric and Renewable Energy Transportation and Logistics 4% Specialized Services Loan Portfolio by Product 9% 4% Foreign Trade 3% Pharmaceutical Resolution 2770 Sugar and Infrastructure 13% and Cosmetic 3% Metallurgy 2% C i F d t ff Working Capital 61.8% Trade Finance 10.3% 0.3% Ethanol 15% Foodstuffs 2% Construction and Decoration Material 2% Other 13% Guarantees 15.7% BNDES onlendings 11.9% Investor Relations | 3Q10 | 16/33
- 17. Credit Portfolio Quality …maintaining portfolio quality and balance sheet strength. Credit Portfolio Quality – September 2010 D-H Overdue Credit Portfolio/ Total Credit Δ Quarter Δ 12M -10 bps -70 bps A 50.9% B 23.4% 1.3% 0.7% 0.6% AA C 2.6% D-E 0.7% F-H Sep-09 Jun-10 Sep-10 Portfolio by Risk Level Sep-09 Sep-10 21.3% 1.1% D-H 3 2% D-H 1.8% p AA AA-C 96.8% 3.2% AA-C 98.2% Investor Relations | 3Q10 | 17/33
- 18. Funding Funding increasedwith quality, diversification and longer terms… Total Funding (R$ Million) 4,311 3,772 3,656 3,701 3,875 4,553 4,655 4,890 5,390 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Funding Mix (R$ Million) 220 560 541 678 440 351 268 208 554 242 447 160 140 29 55 35 35 27 26 27 229 Subordinated Debt 35 29 Funds from 142 229 296 508 429 642 576 586 521 1,005 959 832 679 552 496 382 306 275 Acceptance and Securities Issued Loan Assignments 2,148 1 462 1 553 1,917 2,302 3,029 3,013 3,183 3,584 147 156 143 127 663 713 Trade Finance / Cayman Borrowings and Onlendings 1,462 1,553 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Total Deposits Investor Relations | 3Q10 | 18/33
- 19. Funding and CreditPortfolio Maturities …with a 4 month average maturity gap between the credit and funding portfolios. R$ Million From 1 to 3 years Loan Portfolio + Cash Position From 3 to 5 years $ From 1 to 3 years From 3 to 5 years Funding(1) R$1,761 R$252 More than 5 years R$41 R$1,648 R$390 More than 5 years R$509 No Maturity Up to 3 months (includes From 3 to 12 months R$1,800 R$36 From 3 to 12 Cash) R$2,255 Up to 3 months R$1,359 months R$1,448 (1) Excluding Shareholders’ Equity Credit portfolio: 14 months Funding: 18 months Investor Relations | 3Q10 | 19/33
- 20. Capital Adequacy Ratio(BIS) BIS ratio remained at a comfortable level. BIS Ratio 15.6% 19.3% 18.6% 19.3% 17.2% 15.6% 14.9% 18.5% 18.4% Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Equity (R$ Thousand) BIS Ratio Tier I 875,901 14.8% Tier II 217,009 3.6% Total 1,092,910 18.4% Investor Relations | 3Q10 | 20/33
- 21. Income Statements Highlights Operating Income grew 20.7% in 3Q10. R$ Thousand Q 3Q10 Q 2Q10 Q 3Q09 Gross income from financial intermediation 1 03,102 89,491 50,594 Fee Income 25,147 15,719 21,678 Personnel expenses ( 13,226) ( 11,911) ( 10,116) Administrative expenses ( 21,985) (19,356) ( 19,282) Tax expenses (8,455) (7,361) (6,286) Other operating income / expenses ( 11,616) (6,147) 1,051 Operating Income 72,967 60,435 37,639 Non-operating income (219) (790) (1) Income before taxes and profit sharing 72,748 59,645 37,638 Income and social contribution taxes ( 20,937) ( 15,485) (9,566) Profit sharing (14,215) (8,555) (6,004) Net income 37,596 35,605 22,068 Annualized ROAE 18.6% 17.9% 11.3% Investor Relations | 3Q10 | 21/33
- 22. Balance Sheet Highlights Total assets posted a 14.5% increase in the quarter. R$ Million Sep-10 Jun-10 Sep-09 Assets 9,180 8,014 7,200 Securities and derivative financial instruments 3,849 3,364 3,578 Lending operations 4,583 4,097 3,210 (-) Allowance for loan losses ( 75) ( 68) (105) Net lending operations 4,508 4,029 3,105 Other 809 607 501 Property and equipments 14 14 16 Liabilities 8,307 7,161 6,385 Deposits 3,127 2,929 2,201 Money market funding 2,638 2,100 2,585 Funds from acceptance and securities issued 598 414 376 Borrowings and onlendings 1,237 1,050 718 Subordinated debt 220 229 27 Other 487 439 478 Shareholders' equity 873 853 815 Liabilities and Shareholders Shareholders' equity 9 9,180 180 8 8,014 014 7 7,200 200 Investor Relations | 3Q10 | 22/33
- 23. Corporate Governance and Shares
- 24. Corporate Governance BancoPINE adopts the best corporate governance practices. Two independent members and one external member in the Board of Directors Mailson Ferreira da Nóbrega: Finance Minister of Brazil from 1988 to 1990 Maurizio Mauro: CEO of Booz Allen Hamilton and Grupo Abril Fernando Albino de Oliveira: ex-director of CVM and partner of Albino Advogados Associados São Paulo Stock Exchange Level 1 of Corporate Governance Fiscal Council 100% tag along rights for all shareholders, including non-voting shares Arbitration procedures for fast settlement of litigation Investor Relations | 3Q10 | 24/33
- 25. Main Committees BancoPINE believes that the use of the best corporate governance practices substantially enhances its business outcome. Main decisions are taken by committees: Board of Directors and a structure of specific committees Non-stop exchange of knowledge and information T Transparency Board of Directors Fiscal Council Audit S t Support Committee Executive Committee Treasury Committee National and Foreign Funding Credit Retail Compliance and Basel PINE Investimentos (ALCO) Products Committee Committee Committee Delinquency C itt Risk Committee Performance Evaluation Ethics C itt IT Committee Committee Committee C itt Committee Committee Human Resources Committee Investor Relations | 3Q10 | 25/33
- 26. Ownership Structure OnJuly 1st, BM&FBovespa granted Banco PINE’s request for an extension of the deadline for complying with the minimum free-float requirement Base: 10/31/2010 Common Preferred Total % Controlling Shareholder 45,443,872 14,370,556 59,814,428 70.0% Management - 2,751,246 2,751,246 3.2% Free Float - 20,768,592 20,768,592 24.3% Subtotal 45,443,872 37,890,394 83,334,266 - Treasury - 2,074,839 2,074,839 2.4% Total 45,443,872 39,965,233 85,409,105 100.0% The Bank shall maintain at least 24.3% free float until January 10, 2011 Should free float exceed 24.3% at any time before January 10, 2011, the Bank will not permit a reduction of this level Investor Relations | 3Q10 | 26/33
- 27. Dividends Since 2008,Banco PINE has paid dividends/interest on own capital on a quarterly-basis. Dividends and Interest on Own Capital R$ million R$ Gross Amount Total Amount Amount per share 1Q10 15.0 0.179998 2Q10 20.0 0.239997 3Q10 20.0 0.239997 Total paid in 2010 55.0 0.659992 Dividends and Intrest on Own Capital (R$ Million) 45 16 25 25 33 30 35 20 1H07 2H07 1H08 2H08 1H09 2H09 1H10 3Q10 Investor Relations | 3Q10 | 27/33
- 28. Social Responsibility BancoPINE supports and promotes the Brazilian culture Social Casa Hope Instituto Alfabetização Solidária Culture A Cidade e a Rosa (The City and the Rose): retrospective of the artist Paulo Von Poser Instituto Sedes Sapientiae Instituto Casa da Providência Paisagem e Olhar (Landscape and View): featuring watercolors of the biodiversity of the Rainforest Sports Minas Tênis Clube: training program for athletes Passe de Mágica: created in 2004 by Magic P l d B f B ili b k tb ll Embarcações (Typical Vessels of the Brazilian Coast): registers the beauty of vessels from north to south of Brazil Paula and Branca, former Brazilian basketball players, to offer basketball instruction for children Projeto Rede Atletismo Novos Talentos: (New Talent Athletics Network Project) training program for athletes developed and maintained by the Aquarela Foundation Green Building Responsible Credit “Lists of Exceptions”: the Bank does not finance – with multilateral organizations lines - 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 loans. Investor Relations | 3Q10 | 28/33
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- 30. Rating upgrade byFitch Consistent performance and credit quality. On May 24, Fitch Ratings, one of the main international ratings agencies, raised PINE's ratings as follows: Long-Term Local and Foreign Currency IDR from “B+” to “BB-” National Long-Term rating from “A-(bra)” to “A(bra)” National Short-Term rating from “F2(bra)” to “F1(bra)” Individual rating from “D” to “C/D” The agency attributed the improvement in ratings due to the following factors : Bank's consistent performance during the global financial crisis Adequate credit quality Consistent risks and credit manage Favorable capitalization ratios According to the agency, “the Bank’s rating reflects its agility in adapting to economic volatility, its strategy of consistently managing risks and balance sheet adjustments”. Additionally, "since the second half of 2009, Pine resumed focus on Corporate credit growth (...) and also expanded revenues from cross-selling with the Treasury, addressed to its customers, and services financial advisory”. Investor Relations | 3Q10 | 30/33
- 31. Events and Highlightsof 2010 Market recognition. Banco PINE is one of the top 15 banks in Brazil in terms of Corporate Loans, according to the 2010 edition of Melhores e Maiores, from Exame magazine Banco PINE was considered the Best Commercial Bank in Brazil by World Finance Banking Awards The award was created by British magazine World Finance. Among the factors analyzed were: solutions for clients and optimization of relationships, innovation and flexibility and staying ahead of the competition. Investor Relations | 3Q10 | 31/33
- 32. Banco PINE Pioneeringspirit, solid and transparent, with the agility that companies need. The first Brazilian bank of its size to go public One of the 15 largest banks in Corporate loans, noted for its good management during the crisis Clear, accessible and consistent information Investor Relations | 3Q10 | 32/33
- 33. Investor Relations NorbertoZaiet Junior CFO Nira Bessler Head of Investor Relations Alejandra Hidalgo Investor Relations Analyst Phone: +55-11-3372-5553 / 5552 www.bancopine.com.br/ir ir@bancopine.com.br This presentation contains forward-looking statements relating to the prospects of the business, estimates for operating and financial results, and those related to growth prospects of Banco Pine. These are merely projections and, as such, are based exclusively on the expectations of Banco Pine’s management concerning the future of the business and its continued access to capital to fund the Company’s business plan. Such forward-looking statements depend, substantially, on changes in market conditions, government regulations, competitive pressures, the performance of the Brazilian economy and the industry, among other factors and risks disclosed in Banco Pine’s filed disclosure documents and are, therefore, subject to change without prior notice. Investor Relations | 3Q10 | 33/33