BI&P- Indusval - 4Q13 Results Presentation

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Banco BI&P Results Presentation - 4th Quarter 2013

Transcript of BI&P- Indusval - 4Q13 Results Presentation

  • Expanded Credit Portfolio of R$3.9 billion, 15.3% up in 4Q13, with the merger of Banco Intercap Launch of Guide Investimentos completes BI&P restructuring cycle 99% of fresh loans granted by BI&P in the period rated between AA and B Managerial ALL Expense (annualized) lower than 1% of the expanded portfolio, reflecting the healthy credit portfolio Highlights IDVL4: R$4.45 per share Closing: February 26, 2014 Outstanding Shares: 88,800,610 Market Cap: R$395.2 million Price/Book Value: 0.59 Conference Call / Webcasts February 27, 2014 In English 10 a.m. (US EST) / 1 p.m. (Braslia) Connections Brazil: +55 11 4688-6361 EUA: +1 786 924-6977 Code: Banco BI&P In Portuguese 9 a.m. (US EST) / 12 p.m. (Braslia) Number: +55 11 4688-6361 Code: Banco BI&P Website www.bip.b.br/ir Expanded Credit Portfolio of R$3.9 billion, with organic and inorganic growth of 15.3% in the quarter and 26.1% in relation to December 2012. Organic portfolio growth, considering only the loans originated by BI&P, was 9.0% in the quarter and 19.2% in the year. Loans rated between AA and B, after consolidating the balance sheet of Banco Intercap, totaled 87.1% of the expanded credit portfolio (81.4% in December 2012). 99% of the loans granted in the quarter were rated between AA and B. Emerging Companies and Corporate segments accounted for 47.0% and 52.2%, respectively, of the expanded credit portfolio. Managerial Expense with Allowance for Loan Losses (ALL) (annualized) in 4Q13 was 0.95% of the expanded credit portfolio (0.75% in 3Q13), in line with the conservative lending policy adopted by the Bank and lower than Managements expectations. Funding totaled R$3.9 billion and Free Cash totaled R$758.0 million at the end of 4Q13, keeping step with credit portfolio growth. Income from Services Rendered and Tariffs totaled R$9.9 million in the quarter, slightly lower than in the previous quarter but 42.8% higher than in 4Q12. Result in the quarter was a loss of R$10.0 million, mainly due to the following: (i) the more conservative approach to lending, (ii) the negative impact, with no cash effect, of the discontinuance of the designation of hedge accounting of operations to protect cash flows, which continue to be protected by hedge operations, and (iii) the ALL expense of Banco Intercap in 4Q13, that reached the limit of R$6.0 million established by the shareholders of both banks for the first year after the merger, concentrating this expense in a single quarter and generating an accounting loss of R$2.3 million for Intercap in 4Q13, further consolidated to the financial statements of Banco BI&P. In November 2013, we announced the launch of the project to transform our brokerage arm, Guide Investimentos, which, besides continuing to serve our institutional customers, will now also provide asset management services for high income individuals through an innovative investment platform. With the announcement, in February 2014, of the strategic alliance with Omar Camargo Corretora de Valores, the biggest and most traditional company in the sector in the state of Paran, apart from expanding its customer base, Guide is also embarking on geographical and operational expansion across all states in Southern Brazil. The creation of Guide is strategically important for the Bank, both in terms of distribution of the products developed by our investment banking team and in the diversification of the Banks funding sources. BI&P - Banco Indusval & Partners is a commercial bank with more than 45 years of experience in the financial market, focusing on local and foreign currency, fixed income and corporate finance for companies. 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 So Paulo Stock, Commodities and Futures Exchange - BM&FBOVESPA and Serglobal Cereais, acquired in April 2011, which originates agricultural bonds. 1/20
  • Summary Message from Management ................................................................................................. 3 Macroeconomic Scenario ..................................................................................................... 4 Key Indicators ................................................................................................................... 5 Operating Performance ....................................................................................................... 6 Credit Portfolio .................................................................................................................. 9 Funding .......................................................................................................................... 14 Free Cash ....................................................................................................................... 15 Capital Adequacy ............................................................................................................. 15 Credit Ratings.................................................................................................................. 15 Capital Markets ................................................................................................................ 16 Balance Statement ........................................................................................................... 18 Income Statement ........................................................................................................... 20 2/20
  • Message from the Management In 4Q13, we concluded the second phase of the strategic restructuring program we launched in April 2011. In this second phase, the focus was on strengthening the investment banking area, gaining scale and diversifying the funding structure. During the course of 2013, these objectives were attained through: The joint venture C&BI Agro Partners between Banco BI&P and Ceagro Agrcola Ltda to focus on originating agro bonds. With this merger, we positioned ourselves as a major partner in Brazils agro business market: the agro bonds portfolio, which totaled R$327.1 million at the end of 2012, ended 2013 at R$758.8 million, growing 132% in the period. The acquisition of Voga Empreendimentos e Participaes Ltda, expanding our operation into fixed income securities, long-term funding, mergers and acquisitions, and structured operations. Additional allowance for loan losses in the amount of R$110.7 million for loans granted before April 2011, to prevent contamination of the Banks future results, and the subsequent capital increase of R$90.0 million to which Warburg Pincus, a private equity fund, the controlling shareholders and a few other shareholders of the Company subscribed. The merger of Banco BI&P with Banco Intercap, expanding our capital base and strengthening the controlling group and the Board of Directors of BI&P with the entry of Messrs. Afonso Antnio Hennel and Roberto de Rezende Barbosa, former controlling shareholders of Banco Intercap. The launch of the project to transform our brokerage Guide Investimentos, which provides wealth management services for high income individuals, thereby expanding our capacity for distribution of investment products, diversification of funding sources and broadening our fee revenue sources. As a result of the initiatives taken in 2013, we closed the quarter with a significant growth in the expanded credit portfolio, which totaled R$3.9 billion, up 15.3% in the quarter (9.0% organic growth) and 26.1% in the year (19.2% organic). Loans to the Corporate segment corresponded to 52.2% and loans to the Emerging Companies segment accounted for 47.0% of the expanded credit portfolio. We maintained the high quality of the expanded credit portfolio, which closed 4Q13 with 87.1% of the loans rated between AA and B (81.4% in 4Q12). The managerial allowance for loan losses (annualized) was 0.95% in the quarter, which is in line with the credit risk profile drawn up by the management. Funding volume kept in step with credit portfolio growth, ending the quarter at R$3.9 billion, for growth of 26.3% from 3Q13 and 29.8% in twelve months. It is worth highlighting the funds raised through time deposits (bank deposit certificates (CDB) and time deposits with special guarantee (DPGE)), agribusiness letters of credit (LCA), real estate letters of credit (LCI) and bank notes (LF), which reached the historic mark of R$3.0 billion in this quarter, and the increase in the number of customers, which increased from 2,538 in September 2013 to 3,973 in December 2013, especially through the distribution of our funding products in the retail segment through brokers and distributors. Result in the quarter was a loss of R$10.0 million, mainly due to the following: (i) the more conservative approach to lending, (ii) the negative impact, with no cash effect, of the discontinuance of the designation of hedge accounting of operations to protect cash flows, which continue to be protected by hedge operations, and (iii) the ALL expense of Banco Intercap in 4Q13, that reached the limit of R$6.0 million established by the shareholders of both banks for the first year after the merger, concentrating this expense in a single quarter and generating an accounting loss of R$2.3 million for Intercap in 4Q13, further consolidated to the financial statements of Banco BI&P. The expected profitability will come with scale gains, that is, with the expansion of the credit portfolio and increase in service fees. For this, we rely on well-structured teams that are committed to our institutional values and are already executing the strategies drawn up. Today we have a robust Bank that is prepared fo