Presentation 1Q10

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Conference Call Conference Call

1Q10 Results1Q10 Results

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�� Credit Behavior in BrazilCredit Behavior in Brazil

� Loan Portfolio

� Funding and Liquidity

� Result from Operations

� Indusval Multistock Corretora de Valores

� Share Performance

2

733607

2005 2006 2007 2008 2009 31/mar

Nonearmarked Resources Earmarked Resources

Volume of Credit OperationsR$ billion

Credit to individuals growth supported by payroll lending, vehicle and real state

financing.

In Corporate Credit earmarked resources from BNDES still stand out.

Improved participation of private institutions from March.

936

1,2271,410

29%

71%

29%

68%

32%

71%

16.814.234.04.620.124.318.6In 12 months2.61.22.50.44.46.33.7In the year2.61.22.50.44.46.33.7In the quarter1.10.20.20.22.22.82.0In the month

TotalEarmarked Resources

Non earmarked Resources

TotalEarmarked Resource

Non earmarked Resource

Mar/10Total Credit

CorporatesIndividualsVariation%

1,452

67%

33%

Total Credit Volume and SegmentationTotal Credit Volume and Segmentation

Source: Central Bank of Brazil – Credit Information System - SCR

3

0

1

2

3

4

5

6

7

8

9

10

Dec Dec Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

2006 2007 2008 2009 2010

Corporate Individuals Total

Sou

rce

BA

CE

N

%

Gradual decline in Corporate Credit Back to Dec 2007 levels for credit to Individuals

7.0%

5.2%

3.6%

Default Rate on Loans to Individuals: Fast retreat from June 2009, returning to the levels of Dec/07.

Default Rate on Corporate Loans: Accelerated increase until September/09, with slow decline from November 2009.

Credit Default RateCredit Default Rate

4

� Credit Behavior in Brazil

�� Loan PortfolioLoan Portfolio





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Slightly over R$ 1.7 billion *Slightly over R$ 1.7 billion *

� Increased origination partially dissipated by write offs

� Local currency loans respond for 80% of loan portfolio

� 94% of Loan Portfolio allocated to midsized companies

� Mainly Export financing (ACC/ACE) and, in lesser amount, import financing

� Trade Finance portfolio in foreign currency:• US$ 116.7 million in 1Q09• US$ 173.7 million in 4Q09• US$ 186.9 million in 1Q10

� Growth reflects the retake of exports with reaction from December/09

Local Currency Loans Trade Finance

332.7293.3270.1

1Q09 4Q09 1Q10

R$ Million

+23.1%1,398.6 1,342.6 1,322.9

1Q09 4Q09 1Q10

-5.4%

R$ Million

* Including guarantees and L/Cs

6

61 to 160 24%

11 to 60 31%

10 largest 18%

Other 27%

Industry54%

Commerce12%

Services25%

Individuals9%

Local Currency

80%

Foreign Currency

20%

Above 360 days 29%

181 to 360 14%

91 to 180 20%

Up to 90 days37%

The average of contracts final tenors is 442 days

By Client Concentration

By Economic Activity By Currency

By Tenor

Credit Portfolio BreakdownCredit Portfolio Breakdown

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22%

10%5%5%

4%4%

3%1%

14%

13%

3%

4%

4%

4%

4%

Food, Beverage and Tobacco

Agribusiness

Construction

Automotive

Transportation & Logistics

Metal Industry

Education

Financial Institutions

Chemical and Pharmaceutical

Textile, Clothing & Leather

Individuals

Financial Services

Oil and Biofuel

Paper & Pulp

Other Industries

Loan Portfolio breakdown by Industry Loan Portfolio breakdown by Industry

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Allowance for Loan LossesNPL(*) / Total Loan (%)

Asset Quality

Middle Market loans are 81% collateralized, being, 54% in receivables and securities

5.9

4.23.5

1Q09 4Q09 1Q10

Collateral Structure

Aval PN19%

Vehicles2%

Pledge/Lien6%

Real State9%

Monitored Pledge

10%

Securities3%

Receivables50%

RisK Rating

A31%

D-H14%

B28%

C27%

133.4

97.8110.7

1Q09 4Q09 1Q10

+13.2%

Quality of Loan PortfolioQuality of Loan Portfolio

(*) Total amount of contracts with any installment overdue above 60 days

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� Loan Portfolio

�� Funding and LiquidityFunding and Liquidity




10

Time Deposits

37%

DPGE(*)30%

Interbank Deposits

2%

Foreign Borrowings

22%

BNDES Onlending

6%

LCA1%

Demand Deposits

2%

R$ Million

� Moderate growth in funding compared to 4Q09

� Increasing average tenor of deposits to 497 days:

• CDBs R$ 698,5 million 363 days

• DPGE R$ 572,0 million 692 days• CDI R$ 42,5 million 69 days

• LCA R$ 8,7 million 90 days

Total Funding Funding Breakdown

1,880.71,793.2

1,555.7

1Q09 4Q09 1Q10

+20.9%

� Funding in Insured Time Deposits (DPGE) privileged in the quarter due to longer terms, defined maturities and total costs lower than foreign funding

� Funding in local currency equivalent to 78% of total funding

Longer Funding TenorsLonger Funding Tenors

(*) Fundo Garantidor de Crédito (FGC) - Insured Time Deposits

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332

245

516

733

375

127

659674

90 days 180 days 360 days Above 360 days

Assets Liabilities

Liquidity to RetakingLiquidity to Retaking

436

696 708

1Q09 4Q09 1Q10

Free Cash (*)R$ Million

R$ Million

Assets and Liabilities Management

� Management of liquidity, interest rate, currencies and tenor mismatch risks is our Treasury’s main task

� Free Cash:

� 52% of Total Deposits

� 164% of Shareholder’s Equity

(*) Cash, Liquid Financial Assets (CDI), Securities and Derivatives (–) Open Market Funds and Derivatives

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� Loan Portfolio


�� Result from OperationsResult from Operations

� Indusval Multistock Corretora


13

114.4

93.3

117.7

1Q09 4Q09 1Q10

� Results from Financial Intermediation recovery:

• Increased Financial Intermediation Income

• Lower Loan Loss Provision Expenses

� Gross margin improved to 5.3% from 4.1% in the 4Q09

R$ MillionR$ Million

� Evolution of Income from Financial Intermediation of 22.7% in the quarter due to:

• Small increase in revenues from loans and financing

• Higher Foreign Exchange Operations Income

• FX variation on trade finance operations

Income from Financial Intermediation Gross Profit from Financial intermediation

Gradual recovery of income, lower default benefitsGradual recovery of income, lower default benefits

-2.8%

35.227.428.4

1Q09 4Q09 1Q10

+23.4%

14

24.423.323.0

1Q09 4Q09 1Q10

� Operating expenses under control

� Stable income from fees and commissions

� Lower other operating income during the quarter

In %R$ Million

Net Operating Expenses

Slight improvement in EfficiencySlight improvement in Efficiency

Efficiency Ratio

61.063.2

44.5

1Q09 4Q09 1Q10

S&

P M

odel

� The 2.2 percentage points improvement in the quarter resulted from:

• Reduced operating expenses, and

• Small increase in financial intermediation revenues

+6.0%

+16.5 p.p.

15

R$ Million

Net Profit

8.0

4.4

7.3

1Q09 4Q09 1Q10

Recovering Profitability Recovering Profitability

� 66% Net Profit increase in the quarter results from:

� The evolution in the Intermediation Financial Result

� The 30% drop Loan Loss Provision expenses

Net Interest Margin (NIM)

12.5%

10.6%9.8%

6.1% 6.7% 7.0%

0.9%

5.1%4.9%

8.5%

5.3%

4.1%

4Q08 1Q09 2Q09 3Q09 4Q09 1Q10

NIM GFM

� Financial Margin confirms recovery trend started 4Q09

� Maintenance of liquidity levels also impacts NIM

-8.8%

GFM = Gross Financial Margin

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� Loan Portfolio



�� Indusval Multistock Indusval Multistock CorretoraCorretora de de ValoresValores


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� The modernization and restructuring of the Brokerage House included:

� Relocation of facilities closer to target market

� Hiring new professionals

� Development of new products, including fixed income offerings

� Business management specialized tools deployment

� Construction of a new homebroker system, in progress

� DMA – Direct Market Access

� Acquisition of the Execution Broker Seal from BM&FBOVESPA

� Repositioning in the BM&F Market Ranking� 2008: 52th position� 2009: 44th position� 1Q10: 17th position

� Strategic Objectives:

� Expansion of the institutional and qualified individual investors client base

� Extending services to retail investors

� Becoming a liquidity center for institutional clients

Positive results from restructuringPositive results from restructuring

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� Loan Portfolio




�� Share PerformanceShare Performance

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� Capital:

Common Shares 27,000,000

Preferred Shares 15,475,101

Total 42,475,101

� Treasury Shares(*): 829,279 preferred shares – 5.4% of preferred and 1.9% of total capital

� Preferred shares Free Float (*): 13.4 million – free float = 31.7%

� Stock Options Program: 916,521 options granted, not exercise or cancellation

� Shareholder Remuneration: Anticipated payment of Interest on Own Equity for 1Q10 of R$ 6,3 million equivalent to R$ 0,15015 per share in March 2010

(*) Posição em 31.03.2010

Free Float and Remuneration Free Float and Remuneration

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IDVL4 X IBOV IDVL4 X IBOV -- 20102010

+0.1%

+2.4%

+2.6%

+5.0%

+3.1%

1Q10

+79.9%

+78.9%

+71.9%

+73.3%

+57.2%

In 12 months

Earnings Adjusted

ITAG

IGC

IBOV

IDVL4

Performance

80

90

100

110

120

130

30/1

2/20

0909

/01/

2010

19/0

1/20

1029

/01/

2010

08/0

2/20

1018

/02/

2010

28/0

2/20

1010

/03/

2010

20/0

3/20

1030

/03/

2010

09/0

4/20

1019

/04/

2010

29/0

4/20

10IBOVESPA IDVL4

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� Credit Behavior in Brazil�Private Financial Institutions slowly retaking share in credit volume

�Reducing of default contributes to growth retake

� Loan Portfolio�Focused in midsized companies, origination was retaken and, as delinquency sets back along the

year, credit portfolio shall develop gradual growth

� Funding and Liquidity� There is availability at satisfactory costs to resume growth

� Result from Operations�Default ratios decline and expense management contribute to result recovery

� Indusval Multistock Corretora de Valores� Investments in new facilities, new professionals and expansion of activities with DMA, fixed income

and retail investors

�Acquisition of Execution Broker Seal contributes to its positioning upgrade

In SummaryIn Summary

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Please note that this is the English version of the presentation. The original version is in Portuguese. If there is any discrepancy between such versions, the Portuguese version shall prevail. Banco Indusval Multistock’s full financial statements will be available on our website at www.indusval.com.br/ir, under Financial Information – Financial Statements, as soon as they are filed with the CVM – Brazilian Securities and Exchange Commission. Any reference or statement regarding Banco Indusval Multistock - or its subsidiaries and affiliates - anticipated synergies, growth plans, projected results and future strategies are just estimates. Although these forward-looking statements reflect management’s good faith beliefs, they involve known and unknown risks and uncertainties that may cause the Company’s actual results or outcomes to be materially different from those anticipated and discussed herein. These risks and uncertainties include, but are not limited to, our ability to realize the amount of the projected synergies and in the timetable projected, as well as economic, competitive, governmental and technological factors affecting Banco Indusval Multistock’s operations, markets, products and prices, and other factors detailed in Banco Indusval Multistock’s filings with the CVM – Brazilian Securities and Exchange Commission which, readers are urged to read carefully, in analyzing the forward-looking statements that are contained herein. Banco Indusval Multistock undertakes no obligation to update any of the projections contained herein.

Questions and AnswersQuestions and Answers

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Investor Relations Investor Relations –– Contact InformationContact Information

Ziro Murata Jr.

IRO

Phone: (55 11) 3315-6961

E-mail: [email protected]

Maria Angela R. Valente

Head of IR

Phone: (55 11) 3315-6821

E-mail: [email protected]

Banco Indusval S/A

Rua Boa Vista, 356 – 7º andar

01014-000- São Paulo – SP

Brasil

IR Site:

www.indusval.com.br/ir

Presentation 1Q10

Investor Relations

Transcript of Presentation 1Q10