BI&P- Indusval - 2Q14 Results Presentation

19
RESULTS PRESENTATION 2Q14

description

Banco BI&P Results Presentation - 2nd Quarter 2014

Transcript of BI&P- Indusval - 2Q14 Results Presentation

Page 1: BI&P- Indusval - 2Q14 Results Presentation

RESULTS PRESENTATION

2Q14

Page 2: BI&P- Indusval - 2Q14 Results Presentation

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, and

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.

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Highlights

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Expanded credit portfolio totaled R$3.9 billion, remaining stable in the quarter but up 21.4% from June 2013.

Loans rated between AA and B corresponded to 91% of the expanded credit portfolio (85% in June 2013). Reflecting the

quality of the loan portfolio, 99% of the loans granted in the quarter were rated between AA and B.

The Corporate and Emerging Companies segments accounted for 59% and 40%, respectively, of the expanded credit

portfolio, as against 51% and 48% in 2Q13.

The Managerial Expense with Allowance for Loan Losses (annualized) in 2Q14 corresponded to 0.66% of the expanded credit

portfolio (1.1% in 1Q14), which is a highly positive outcome of the conservative credit policy being adopted by the bank in

recent years.

Funding totaled R$4.1 billion, up 5.2% in the quarter and 31.6% in twelve months, while Free Cash totaled R$748.2 million

at the end of 2Q14, reflecting the high liquidity enjoyed by the bank.

Income from services rendered and tariffs totaled R$15.7 million in 2Q14 and R$26.8 million in 1H14, representing growth

of 42.3% in the quarter and 117.2% in relation to 1H13. The investment banking area already accounts for 50% of this

revenue in 2Q14 (26% in 1Q14), which is the result of investments in the area in 2013 for acquiring the advisory firm VOGA

and hiring a few top-notch professionals in this field.

Guide Investimentos, responsible for our wealth management and brokerage operations, entered into important alliances

during 2014, with (i) Omar Camargo Corretora de Câmbio e Valores Mobiliários Ltda, (ii) Geraldo Corrêa Corretora de Câmbio

e Valores Mobiliários Ltda, and (iii) Bullmark Consultoria Financeira Ltda. With these alliances, Guide has strengthened its

distribution network and is now present in important regions across the country. After the migration of all the clients of these

partners, Guide will manage assets of around R$2 billion.

The quarterly Result of R$1.1 million already reflects a significant improvement from previous quarters, but was still

impacted by (i) the non-cash accounting effects of the discontinuation of the designation of hedge accounting of cash flows

from a series of funding operations indexed to inflation indices (IPCA and IGPM), which are still protected by hedge

operations; (ii) the negative contribution from Guide Investimentos as result of all the investments made in recent quarters;

(iii) the still increasing investment banking, structured operations and sales desks which, despite the significant growth from

the same period the previous year, still have tremendous potential for growth; and (iv) the need for economies of scale,

considering our appetite for risk and its direct impact on loan spreads.

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3,229 3,355

3,867 3,926 3,920

Jun 13 Sep 13* Dec 13 Mar 14 Jun 14

R$

millio

n

Loans and Financing in BRL Trade Finance

Guarantees Issued (L/G and L/C) Agricultural Bonds (CPR, CDA/WA and CDCA)

Private Credit Bonds (Debentures)

Expanded Credit Portfolio

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Stable in the quarter, with growth of 21% in twelve months

Average Exposure per Client

R$ million Mar 14 Jun 14

Corporate 10.5 11.2

Emerging Companies 2.9 3.0

56%

59%

43%

40%

1%

1%

Mar 14

Jun 14

Corporate Emerging Companies Other**

* Including credits from Banco BI&P which were assigned to Banco Intercap in 3Q13.

** Other Credits include Non-Operating Asset Sales Financing, Consumer Credit Vehicles, and Acquired Loans.

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Expanded Credit Portfolio Development

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... continuously focusing on higher quality assets.

99% of the new transactions

in the last 12 months are

classified between AA and B.

3,926 3,920 1,424 (1,321)

(80) (29)

Mar 14 Amortized

Credits

Credit

Exits

Write

offs

Credit

Origination

Jun 14

R$

millio

n

773 685 817 794 818

549 391

514 381

606

1,322

1,076

1,331 1,174

1,424

Jun 13 Sep 13 Dec 13 Mar 14 Jun 14

R$

millio

n

Credit Origination

New Transactions Renewed Transactions

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Expanded Credit Portfolio

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* Starting from March 2014, export credit notes (NCE) and export notes (CCE) originated by Banco Intercap are included in Loans &

Financing in BRL, as well as NCE and CCE originated by Banco BI&P are classified.

Loans &

Financing in

BRL*

52%

Trade

Finance*

13%

BNDES

Onlendings

11%

Guarantees

Issued

6%

Agricultural

Bonds

15%

Private Credit

Bonds

1%

Other

2%

June 13

11.8%

12.0%

13.4%

28.3%

26.4%

27.5%

26.8%

25.1%

26.2%

33.1%

36.5%

33.0%

Jun 13

Mar 14

Jun 14

Client Concentration

Top 10 11 - 60 largest 61 - 160 largest Other

Loans &

Financing in

BRL*

53%

Trade

Finance*

11%

BNDES

Onlendings

6%

Guarantees

Issued

5%

Agricultural

Bonds

23%

Private Credit

Bonds

2%

June 14

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8.9%

2.0%

2.2%

2.4%

2.4%

2.9%

2.9%

3.1%

3.2%

3.3%

3.5%

4.0%

5.3%

5.9%

6.0%

8.3%

8.8%

9.1%

15.7%

Other Industries (less than 1.4%)

Machinery and Equipments

International Commerce

Education

Power Generation & Distribution

Financial Activities

Textile, Leather and Confection

Raw Materials

Commerce - Retail & Wholesale

Chemical & Pharmaceutical

Metal Industry

Transport and Logistics

Infrastructure

Livestock

Automitive

Food & Beverage

Oil, Biofuel & Sugar

Real Estate

Agriculture

June 2013

Expanded Credit Portfolio

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Relevant exposure in agriculture

13.6%

1.5%

1.7%

1.9%

2.0%

2.3%

2.3%

2.6%

3.5%

3.9%

4.1%

4.3%

5.5%

6.9%

10.7%

12.0%

21.0%

Others Industries (less than 1.4%)

Raw Materials

Financial Activities

International Commerce

Metal Industry

Chemical & Pharmaceutical

Textile, Leather and Confection

Power Generation & Distribution

Commerce - Retail & Wholesale

Infrastructure

Transport and Logistics

Automotive

Livestock

Food & Beverage

Oil, Biofuel & Sugar

Real Estate

Agriculture

June 2014

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Agricultural Franchise

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Specialization in the agricultural segment with low levels of loss

CPR and CDA/WA

71%

Loans 15%

Trade Finance

12% BNDES

Onlending 1% Guarantees

Issued 1%

Products

Midwest 56%

Southeast 25%

South 12%

Northeast

(Bahia)

7%

Regions

Cultivation Amount %

Soybean 557,158 67.7%

Coffee 101,346 12.3%

Corn 65,692 8.0%

Cotton 55,708 6.8%

Orange 15,705 1.9%

Grape 7,913 1.0%

Other 19,609 2.4%

Total 823,131 100.0%

More than R$2.8 billion in assets have been

generated over the past three years, with an

annual loss of 0.03% (annualized).

Position as of June 30, 2014

R$ thousand

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Net Interest Margin (NIM)

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4.06% 4.08% 3.99% 3.94% 4.43%

2Q13 3Q13 4Q13 1Q14 2Q14

Managerial NIM with Clients

In the 2Q14, Managerial NIM with Clients went up to 4.4%.

In this quarter we managed to negotiate lower taxes with our clients, we also had

our funding costs decreased and evolution in our Derivative fees.

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Fees, Client Desk, IB, and Brokerage Revenues

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9.1 10.3

9.1

12.0

17.9

14.4

30.0

2Q13 3Q13 4Q13 1Q14 2Q14 1H13 1H14

R$

millio

n

Fees, Client Desk, IB, and Brokerage Revenue

Comercial Fee Client Desk IB Guide Investimentos

Structured areas start to exhibit results and still present large potential for growth

with bigger cross-selling of products. Emphasis on the IB area that also counts with

an important back-log of more than 41 mandates in course

107.3%

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Investment Banking

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Major IB deals in 1H14

Real Estate

Debenture 476

R$ 175 million

Real Estate

CRI

R$ 31 million

Retail, Publishing & Services

Advisory

Telecom

Advisory

Real Estate

M&A Sell Side

2nd phase

Education

M&A Buy Side

R$ 676 million

Financial

Advisory

R$ 300 million

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* New Credit Policy: adopted since April 2011.

Expanded Credit Portfolio Quality

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99% of loans granted in the quarter were rated from AA to B

Credits rated between D and H totaled R$207.6 million

at the end of 2Q14:

R$148.9 million (72% of the expanded credit

portfolio between D-H) in normal payment course;

Only R$58.7 million overdue +60 days.

Additional ALL not allocated balance = R$19.1 million 2%

2%

2%

50%

52%

57%

33%

35%

32%

6%

3%

4%

9%

7%

5%

Jun 13

Mar 14

Jun 14

AA A B C D - H

90.9%

89.8%

85.1%

AA

2%

AA

1%

AA

6%

A

57%

A

62%

A

9%

B

32%

B

33% B

20% C

4% C

2%

C

22% D - H

5% D - H

1%

D - H

43%

New Credit Policy* Clients

Expanded Loan Portfolio

Previous Credit Policy Clients

Expanded Loan Portfolio 2Q14

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Credit Portfolio Quality

0.75% 0.95%

1.10%

0.66%

Sep 13 Dec 13 Mar 14 Jun 14

Managerial ALL Expense

1 Managerial Expense with Allowance for Loan Losses (ALL) = ALL expenses + Discounts granted upon settlement of loans – Revenues

from recovery of loans written off. | * New Credit Policy: adopted since April 2011.

8.2%

12.4%

8.1%

15.0%

7.5%

2.1% 2.6% 1.9%

2.6% 1.8%

0.5% 0.6% 0.3% 0.4% 1.0%

Jun 13 Sep 13 Dec 13 Mar 14 Jun 14

NPL 90 days / Credit Portfolio

Clients Previous Credit Policy

Total

Clients New Credit Policy*

10.6%

14.0%

10.3%

15.2%

7.9%

2.6% 2.9% 2.3% 2.6% 2.0%

0.5% 0.6% 0.3% 0.5% 1.2%

Jun 13 Sep 13 Dec 13 Mar 14 Jun 14

NPL 60 days / Credit Portfolio

Clients Previous Credit PolicyTotalClients New Credit Policy*

Managerial ALL Expense1 in 2Q14,

annualized, was 0.66% of the

Expanded Credit Portfolio

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Time

Deposits

(CDB)

26%

DPGE I

30%

LCA

16%

LF & LCI

2% Interbank &

Demand

Deposits

3%

Onlendings

11%

Foreign

Borrowings

12%

June 13

3,142 3,082

3,893 3,930 4,135

Jun 13 Sep 13 Dec 13 Mar 14 Jun 14

R$

millio

n

In Local Currency In Foreign Currency

Funding

14

Product mix helps with cost reduction

Time

Deposits

(CDB)

21%

DPGE I

23%

DPGE II

10%

LCA

28%

LF & LCI

3% Interbank &

Demand

Deposits

2%

Onlendings

6%

Foreign

Borrowings

7%

June 14

LCA and LCI account for

31% of funding volume

Agribusiness letters of credit, Real estate letters of credit and Bank notes are represented, respectively, by LCA, LCI and LF.

Insured time deposits are represented by DPGE. DPGE I and II are two types of DPGE and differ in cost and framework.

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Guide Investimentos

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In 2014, Guide entered into important alliances:

Guide continues to strength its distribution network and is now present in

important regions across the country. After the migration of all the clients of these

partners, Guide will manage assets of around R$2 billion.

AUM: R$500 million

14 independent investment advisors

1.320 Active Clients

AUM: R$300 million

8 independent investment advisors

702 Active Clients

In migration process

AUM: R$500 million

43 independent investment advisors

1.080 Active Clients

In migration process

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23.6 21.5 27.1

24.5 22.8

11.2 10.6 14.2 11.8 11.0

392 373 374 381

349

0

50

100

150

200

250

300

350

400

450

-

10.00

20.00

30.00

40.00

50.00

60.00

2Q13 3Q13 4Q13 1Q14 2Q14 2Q13 3Q13 4Q13 1Q14 2Q14

Personnel and Administrative Expenses

Personnel Expense Administrative Expense Headcount

Efficiency Ratio

16

• Personnel Expense: Headcount 8% lower in the

quarter and 11% lower when compared to 2Q13.

The effects on personnel expenses will be notice

by the second half.

• Administrative Expense: -7,5% in the quarter and

+7,1 when compared to 2Q13, this last impact

occurred specially due to period’s inflation and

investments for improvements in the technological

infrastructure of the Bank.

147.2%

79.3% 98.3% 100.5%

72.6%

2Q13 3Q13 4Q13 1Q14 2Q14

Efficiency Ratio

* Information based on the managerial income statement of the financial conglomerate without Guide Investimentos.

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Profitability

17

-20.6

2.0

-10.0 -9.9

1.1

2Q13 3Q13 4Q13 1Q14 2Q14

R$

millio

n

Net Result

The quarterly result of R$1.1 million already reflects a significant improvement from previous quarters, but was still impacted by:

• the non-cash accounting effects of the discontinuation of the designation of hedge accounting of cash flows from a series of

funding operations indexed to inflation indices (IPCA and IGPM), which are still protected by hedge operations;

• the negative contribution from Guide Investimentos as result of all the investments made in recent quarters;

• the still increasing investment banking, structured operations and sales desks which, despite the significant growth from the

same period the previous year, still have tremendous potential for growth;

• the need for economies of scale, considering our appetite for risk and its direct impact on loan spreads.

Page 18: BI&P- Indusval - 2Q14 Results Presentation

569.6 574.5

674.2 667.1 671.4

Jun 13 Sep 13 Dec 13 Mar 14 Jun 14

R$

millio

n

Shareholders’ Equity

14.6% 14.5% 14.8% 13.7% 13.3%

Jun 13 Sep 13 Dec 13 Mar 14 Jun 14

Basel Index (Tier I)

5.7x 5.7x 5.7x 5.9x 5.8x

Jun 13 Sep 13 Dec 13 Mar 14 Jun 14

Leverage

Expanded Credit Portfolio / Equity

Capital Structure and Ratings

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Agency Rating Last

Report

Standard

& Poor’s

Global: BB-/Stable/ B

National: brA/Stable/brA-2 Apr/14

Moody’s Global: Ba3/Negative/Not Prime

National: A2.br/Negative/BR-1 Jul/13

Fitch

Ratings National: BBB/Stable/F3 Sep/13

RiskBank Index: 9,98

Low Risk Short Term Jul/14

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