4Q12 Results Presentation
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Transcript of 4Q12 Results Presentation
4th Quarter
Results Presentation
Disclaimer
2
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.
Highlights
3
Expanded Credit Portfolio came to R$3.1 billion (+2.6% QoQ and +21.0% YoY), with R$728
million new loans granted in the period (11% above 4Q11).
The Corporate segment reached 59.3% of the Expanded Credit Portfolio. We have maintained
the tactics of originating higher quality assets with shorter term in order to resume origination
of higher spread assets in a more favorable macro scenario, expect for 2013.
Continuous improvement in the quality of the Credit Portfolio: the share of credits rated from
AA to B increased to 79.1% of the Expanded Credit Portfolio at the end of 2012 (69.9% at the
end of 2011); 99.2% of the new loans granted in the quarter were rated between AA and B.
Reduction in past due loans above 60 days to 1.5% by the end of 2012 (-1.5 p.p. QoQ and 3.5
p.p. YoY)
Revenues from Services climbed R$26.4 million in 2012, +32.3% YoY.
Net Profit totaled R$3.6 million in 4Q12 (+15.8%) e R$14.2 million in the year.
Association with Lifegrain Holding de Participações Ltda, company of the Ceagro Agrícola Ltda,
through the creation of the joint venture C&BI Agro Partners. In February 2013, we signed the
Purchase and Sale Commitment to acquire Voga Empreendimentos e Participações Ltda.
2,534 2,759 2,807 2,991 3,068
4Q11 1Q12 2Q12 3Q12 4Q12
R$
mill
ion
Loans and Financing in Real
Trade Finance
Guarantees Issued (L/G and L/C)
Agricultural Bonds (CPR, CDA/WA and CDCA)
Private Credit Bonds (PN and Debentures)
Expanded Credit Portfolio Growth still driven by shorter term assets given the macroeconomic environment...
4
Expanded Credit Portfolio Development ...maintaining the focus on higher quality assets...
656 646 517
687 728
4Q11 1Q12 2Q12 3Q12 4Q12
R$
mill
ion
New Transactions
5
2,991 3,068 728 (552)
(85) (15)
3Q12 Amortized Credits
Credit Exits
Write offs New Operations
4Q12
R$
mill
ion
99,2% of new
transactions in
4Q12 are classified
between AA and B.
Multiproduct Offering …employing the +50 product portfolio...
6
Loans 33.1%
Credit Assignments
15.6%
Confirming 0.1%
Discount Receivables
0.3%
NCE 3.7%
CCE 2.4%
CCBI 1.7%
Loans 53.2%
Credit Assignments
5.9%
Confirming 1.6%
Discount Receivables
0.7%
NCE 0.3%
CCE 0.1%
CCBI 0.2%
Expanded Credit Portfolio …and increasing the new products share in the portfolio...
7
Loans & Discounts in
Real 62%
Trade Finance
18%
BNDES Onlendings
8%
Guarantees Issued
6% Agricultural
Bonds 5% Private
Credit Bonds 0.4% Other
1%
4Q11
Loans & Discounts in
Real 57%
Trade Finance
14%
BNDES Onlendings
11%
Guarantees Issued
5% Agricultural
Bonds 11%
Private Credit Bonds
1.3% Other 1%
4Q12
NCE: Export Credit Notes; CCE: Export Credit Certificate; CCBI: Real State Credit Bank Note
189
315 371
529 482
4Q11 1Q12 2Q12 3Q12 4Q12
R$
mill
ion
Large Corporate Ecosystem (*)
Receivables from Clients Receivables drawn on Clients
129 230 267 307 327
4Q11 1Q12 2Q12 3Q12 4Q12
R$
mill
ion
Agricultural Bonds
CPR Warrant (CDA/WA) CDCA
Developing Franchise Value ...in specific niches...
8
15 41
60
94 92
4Q11 1Q12 2Q12 3Q12 4Q12
R$
mill
ion
Fixed Income Bonds
PNs Debentures Real State Credit Bank Notes
The expertise development in certain niches and
structures that create competitive advantages
allows profitability increase through fees.
(*) Acquisition and/or assignment of receivables originated by our customers and Transactions with receivables of suppliers drawn on our clients (Confirming).
1.6% 1.9% 2.0% 2.0%
2.6% 3.0% 3.1% 3.4% 3.5% 3.6% 3.8%
4.5% 4.8%
6.4% 8.1%
14.4% 14.6%
16.8%
Financial institutions Advertising & Publishing
Commerce Individuals
Oil & Biofuel Education
Metal Industry Transport. & Log. Financial Services
Chemical & Pharma Pulp & Paper
Power Gen. & Distr. Textile, App. & Leather
Automotive Other*
Construction Food & Beverage
Agribusiness
4Q11
1.5% 1.6%
2.1% 2.4%
3.2% 3.2% 3.5% 3.5% 3.9% 4.0% 4.1%
6.5% 11.9%
13.1% 13.3%
22.2%
Financial Services Machinery and Equipments
Oil & Biofuel Education
Pulp & Paper Textile, App. & Leather
Commerce Metal Industry
Chemical & Pharma Electronics
Transport. & Log. Automotive
Other Industry Food & Beverage
Construction Agribusiness
4Q12
Expanded Credit Portfolio ...with relevant exposure in agribusiness...
9 * Other industries with less than 1.5% of share.
Expanded Credit Portfolio ...and lower customer concentration and short term maturity profile maintained.
10
Up to 90 days 38%
91 to 180 days 16%
181 to 360 days 17%
+360 days 29%
Maturity
Top 10 14%
11 - 60 largest
31%
61 - 160 largest
28% Other 27%
Client Concentration
Up to 90 days 40%
91 to 180 days 19%
181 to 360 days 15%
+360 days 26%
Maturity
Top 10 17%
11 - 60 largest
32%
61 - 160 largest
27%
Other 24%
Client Concentration
4Q11 4Q12
Tactical decision of originating higher quality assets
with shorter term in 2H12. In a better scenario,
expected for 2013, we will promote the portfolio
reallocation into more favorable spreads.
Average Exposure per Client:
‒ Corporate = R$5.2 million
‒ Middle Market = R$2.4 million
1,572 1,501 1,267
1,128 1,200
4Q11 1Q12 2Q12 3Q12 4Q12
R$
mill
ion
Middle Market
641 831
1,078 1,374
1,820
4Q11 1Q12 2Q12 3Q12 4Q12
R$
mill
ion
Corporate
Client Segmentation Corporate increases its share in the credit portfolio
11
Migration of clients from Middle to Corporate = ~ R$200mn as of June 30, 2012 and ~ R$260mn as of Sept.30, 2012
Middle Market
39%
Corporate 59%
Other 2%
Annual revenues from R$40mn to R$400mn Annual revenues of between R$400mn and R$2bn
Note: In addition to the Middle Market and Corporate operations above, the Credit Portfolio also includes Other Credits of R$43,0 mn in 4Q12 (Consumer Credit Vehicles, Acquired Loans and Non-Operating Asset Sales Financing). The Expanded Credit Portfolio also includes Agricultural Bonds, Private Credit Bonds and Guarantees Issued.
Credits overdue more than 60 days are derived from: − clients acquired up to March 2011: 1.2%;
− clients acquired from April 2011: 0.3%.
NPL indexes show significant improvement due to
the strategy embraced in 2011, focusing on higher
quality and shorter term assets.
2%
6%
2%
40%
37%
42%
28%
35%
35%
20%
14%
13%
10%
8%
8%
4Q11
3Q12
4Q12
Rating
AA A B C D - H
5.0%
3.2% 2.8% 3.0%
1.5% 4.7%
2.7% 2.6% 1.8% 1.2%
4Q11 1Q12 2Q12 3Q12 4Q12
NPL / Credit Portfolio
NPL 60 days NPL 90 days
79.1%
Credit Portfolio Quality 99.2% of loan volumes granted in the quarter were rated from AA to B
78.4%
69.9%
Credits rated between D and H totaled R$203.2
million at the end of 2012:
− R$163.5 million (80% of Credit Portfolio between D
and H) in normal payment course
− Only R$39.6 million overdue more than 60 days
12
Time deposits
(CDB) 29%
Insured Time
Deposits (DPGE)
30%
LCA 8%
LF and LCI 0.3% Interbank &
Demand Deposits
6%
Onlendings 9%
Foreign Borrowings
18%
4Q11
2,533 2,736 2,755 2,936 2,999
4Q11 1Q12 2Q12 3Q12 4Q12
R$
mill
ion
in Local Currency in Foreign Currency
Funding Product mix helps with cost reduction
13 LCA: Agribusiness Letters of Credit; LF: Bank Notes; LCI: Real State Letters of Credit
Time deposits
(CDB) 24%
Insured Time
Deposits (DPGE)
34%
LCA 12%
LF and LCI 1%
Interbank & Demand Deposits
5%
Onlendings 11%
Foreign Borrowings
13%
4Q12
Operating Performance and Profitability
74.2% 67.6%
60.8% 69.7%
78.4% 74.4%
68.7%
4Q11 1Q12 2Q12 3Q12 4Q12 2011 2012
Efficiency Ratio*
4.8% 4.9% 5.8%
4.8% 5.1% 4.3% 5.0%
6.7% 6.6% 7.7%
6.1% 5.9% 5.9% 6.4%
4Q11 1Q12 2Q12 3Q12 4Q12 2011 2012
Net Interest Margin
NIM NIM(a) *
14
10.3
5.0 2.4 3.1 3.6
14.2
4Q11 1Q12 2Q12 3Q12 4Q12 2011 2012
R$
mill
ion
Net Profit
7.3
3.5 1.7 2.2 2.5
-6.3
2.4
4Q11 1Q12 2Q12 3Q12 4Q12 2011 2012
Return on Average Equity (ROAE) %
-31.7
* Details about the calculation are available in the 4Q12 Earnings Release at www.bip.b.br/ir
577.1 590.5 582.4 587.6 587.2
4Q11 1Q12 2Q12 3Q12 4Q12
R$
mill
ion
Shareholders’ Equity
18.2% 17.5% 17.0% 15.8% 14.9%
4Q11 1Q12 2Q12 3Q12 4Q12
Basel Index(Tier I)
4.4x 4.7x 4.8x 5.1x 5.2x
4Q11 1Q12 2Q12 3Q12 4Q12
Leverage Expanded Credit Portfolio/ Equity
Capital Structure & Ratings
15
Agency Rating Last
Report
Standard & Poor’s
Global: BB/Stable/ B National: brA+/Stable/brA-1
Aug/12
Moody’s Global: Ba3/Stable/Not Prime National: A2.br/Stable/BR-2
Feb/13
FitchRatings National: BBB/Stable/F3 Nov/12
RiskBank Index: 10.68 Low Risk Short Term
Jan/13
In 2012 the changing cycle started April 2011 was completed…
16
Repositioning of the Bank’s Client Profile & Product Line
Credit Portfolio Segmentation
New Human Resources Policies
Control Improvements
Funding Diversification & Cost Reduction
Franchise Value Developments
…and 2013 we are seeking synergies and expanding business...
17
VOGA
SERTRADING
AGROSEC
SECURITIZATION OF AGRO BONDS
DEVELOPMENT OF INVESTMENT BANKING
ACTIVITIES
IMPROVEMENT OFCREDIT PORTFOLIO THROUGH ITS CLIENTS
C&BI AGRO PARTNERS
IMPROVEMENT OF AGRIBUSINESS
PORTFOLIO
(expertise in the Midwest - soybeans and corn)
VOGA | Areas of Expertise
HEADQUARTERED IN SÃO PAULO, VOGA HAS BRANCHES IN 4 OTHER
BRAZILIAN STATES
Presence in Brazil
VOGA: A Full Service Financial Advisory and M&A Boutique
Merger and Acquisition
Transactions involving mergers, acquisitions, sales or divestures, focused on maximizing client value;
Includes corporate finance services related to capital structure, governance, valuation and business plan development.
Capital Raising
Services comprising all stages of equity and debt raising, from the development of a business plan and marketing material to the negotiation of final terms with investors.
Pre IPO Advisory
Supporting clients in evaluating the appropriateness of an IPO, assisting in its planning, and in the execution of the valuation, necessary audits, legal advice and governance analysis.
Restructuring
Corporate restructurings including negotiations between existing shareholders or corporate reorganizations.
Corporate Governance and Risk Assessment
Advisory on the development of corporate governance structures as well in the elaboration of business plan and at the identification of the optimal capital structure, accordingly with the company perspective of growth.
18
PORTO ALEGRE
SÃO PAULO (HEADQUARTERS)
BELO HORIZONTE
FORTALEZA
RIO DE JANEIRO
Partners have complementary skills from previous experiences
at companies and financial institutions including:
• Mergers and acquisitions / Corporate finance
• Restructurings
• Capital raising (debt and equity)
• Asset management
• Consulting
Transactions concluded by the partners involve over US$50
billion
Partners
VOGA Partners: Extensive IB Experience
Alexandre Dória
(26 years)
Rodrigo Rocha
(17 years)
Samuel Oliveira
(25 years)
Rogério Pacheco
(19 years)
STRATEGY: FULLY INTEGRATED WITH BI&P CURRENT STRUCTURE, LEVERAGING CURRENT AND GROWING CLIENT BASE WITH IB-RELATED
PRODUCTS, NOTABLY M&A AND FIXED INCOME.
CEAGRO: Acting with excellence in agricultural chain
EXPERTISE
PRESENCE
VERSATILITY
Partner with deep understanding of the agricultural sector players, both in credit and production;
High presence in the state Mato Grosso;
Acting with excellence in the agricultural chain (origination; financing; acquisition and barter of inputs; and warehousing, logistics and distribution for domestic and international markets).
FUNDING
SECTOR
PRODUCTS
BI&P has great funding capacity at competitive costs;
Deep understanding of Brazilian agribusiness sector;
BI&P has a diversified and innovative product portfolio specifically to the sector.
20
Focus: financing solutions to soybeans and corn agricultural chain.
Objective:
To develop and enhance agricultural financial products in the state of Mato Grosso
Increase reliability in credit analysis for agricultural producers
To provide clear and fast processes for agricultural bonds.
A reliable and new financing tool for grain producers
Structuring of innovative financial operations to the acquisition of agricultural inputs,
as seeds, fertilizers, pesticides and others
C&BI Agro Partners: joint venture between Banco Indusval & Partners and Ceagro Agrícola Ltda
21
2013 Strategy
22
Achieve economies of scale through Credit Portfolio growth and Fees
Resume the strategic Expanded Credit Portfolio balance: 50% Middle Market
and 50% Corporate
Promote IB activities – Fixed Income through the expertise of Voga
Participações e Empreendimentos Ltda
Continuous processes, systems and controls review aiming reduction costs to
increase efficiency
Q & A