3q07 presentation
TRANSCRIPT
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Presentation
1H07
Apresentação dos Resultados do 3T07
9 de novembro de 2007
3Q07 Results
November 9, 2007
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The Bank's financial statements and consolidated financial statements herein are presented on a pro forma basis, encompassing the financial statements of the Bank, its subsidiaries, the Credit Receivables Investment Funds (FIDC) and insurer J. Malucelli Seguradora.
They were prepared based on the accounting practices pursuant toBrazilian Corporate Law, and associated with the regulations andinstructions issued by the National Monetary Council (“CMN”), the Brazilian Central Bank (“BACEN”) and the Brazilian securities and exchange commission Comissão de Valores Mobiliários ("CVM") (“BR GAAP”).
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Summary
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General OverviewOperational HighlightsOrigination EvolutionFranchise and innovative sales channelAlternative Channel’s EvolutionTotal Assets and EquityPeriod Result Composition (R$ x 1,000)Financial Highlights SummaryCredit PortfolioFinancial Revenue and Loan AssignmentsCredit Portfolio QualityLoan AssignmentFunding Structure (R$ x 1,000)Operating Income and ExpensesJ. Malucelli Seguradora – PerformanceRatingsCorporate GovernanceShare Price Evolution
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General Overview
Niche Bank, specialized in payroll deductible loans
Focus in profitability and a low-risk customer base (civil servants, private-sector employees and retirement beneficiaries, and pensioners under the INSS social security system)
Deductible loans agreements with 665 state and private entities
4 sales channels: brokers, call center, franchises and regionals
On August 31, 2007, an integral bank subsidiary acquired 800,622common shares and 2,570,418 preferred shares issued by the J.M. Seguradora, owning 55% of the Company and for that concluding the first stage of the contract to remerge the company.
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Operational Highlights
New Originations (R$ mm) Number of Agreements
159.7 258.5
446.2
637.7
3Q06 3Q07 9M06 9M07
435
665
3Q06 3Q07
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Origination Evolution(R$ X 1,000)
-
50.000
100.000
150.000
200.000
250.000
300.000
350.000
2005 2006 2007
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
195%
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Franchise: an innovativesales channel
Original target of 75 franchises at the end 2007 and 210 franchises at the end of 2008
Initial activities in march 2007
Franchise channel acquires up to 51 operating units
Exclusivity and long-term agreements
Low initial investment and low operating costs
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Alternative Channel´s Evolution
The Alternative Channels are composed as follows:
RegionalCall CenterFranchises
21%
79%
3Q073%
97%
3Q06
Alternative channels
Correspondent
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Total Assets and Equity
Total Assets Shareholders’ Equity
888,290
1,792,443
3Q06 3Q07
211,755
781,243
3Q06 3Q07
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Period Result Composition(R$ x 1,000)
3Q07
9M0721,212 21,384
172
Net Income Non-Recurring IPO expenses
Net Adjusted Income
40,507 53,220
77,725 12,713
24,505
Net Income Non-Recurring IPO expenses
Net Adjusted Income
Deferred Comissions Adjustment
Period Result
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Financial HighlightsSummary
3Q06 3Q07 Variation3Q06 x 3Q07 9M06 9M07 Variation
9M06 x 9M07
Net Adjusted Income 7,806 21,212 171.7% 38,701 40,507 4.7%
Deferred Commission Result 24,505
Period Result 7,806 21,384 173.9% 38,701 77,725 100.8%
Annualized Return over average Equity (%) 19.7% 19.0% -0.70% 29.5% 22.1% -7,4p.p
Annualized Intermediary margin of financial operations (%)
16.0% 12.5% -3.5p.p. 57.0% 37.9% -19.1p.p.
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Credit Portfolio(R$1,000)
Total Credit Portfolio, including credit assignments to the FDIC’s, grewup to R$ 1,080.5 million in the 3Q07.
687.5
932.5
1,080.5
3Q06 2Q07 3Q07
15.9%
57.2%
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Financial Revenue andLoan Assignments
Income from Financial Operations (R$ x 1,000)3Q06 3Q07 Variation 3Q06 x
3Q079M06 9M07 Variation 9M06 x
9M07Loans 52,885 69,216 30.9% 159,474 195,049 22.3%
Loan Assigment Evolution (R$ x1,000)3Q06 3Q07 % Variation 9M06 9M07 % Variation
Loan Origination 159,672 258,543 61.9% 446,211 637,721 42.9%Loan Assignments (Banks) 39,090 0 258,816 16,986 -93.4%Loan Assignments (FIDC's) 90,327 48,073 -51.7% 90,327 240,998 Loans Acquired 0 43,619 0 43,619 % Loan Assignments (Banks) 24.48% 0.00% 58.00% 2.66%
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Credit PortfolioQuality
High quality and stability
D‐H6%
AA‐C94%
3Q06 D‐H5.5%
AA‐C95.5%
3Q07
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Loan Assignment
20.9%
11.6%
1st Month End of Contract% N
et In
com
e ov
er F
inan
cial
Inc
ome
Operation with Loan Assignment
Reduction of 45%
0.4%
19.9%
1st Month End of Contract% N
et I
ncom
e ov
er F
inan
cial
Inco
me
Operation retained in Balance Sheet
Results grow 45x
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Funding Structure(R$ x 1,000)
468,236
713,540
52,009
53,850
59,800
69,575
129,954
48,073
0
0
3Q06 3Q07
Open market Medium term notes Credit Assignments Total
885,038
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Operating Income(Expenses)
Operating Income (Expenses) 3Q06 3Q07 Variation
3Q06 x 3Q079M06 9M07 Variation
9M06 x 9M07
Personnel expenses (3.581) (5.205) 45,4% (9.974) (13.710) 37,5%
Other administrativeexpenses (24.146) (24.798) 2,7% (59.514) (81.849) 37,5%
Other Expenses (9.910) (9.379) -5,4% (25.000) (23.587) -5,7%
IPO expenses - (172) - (12.713)
Commissions Expenses(Loan Origination) (14.236) (15.247) 7,1% (34.514) (45.549) 32,0%
Other operating expenses 344 5.436 1480,2% 6.316 7.869 24,6%
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J. Malucelli Seguradora –Performance
Premiums Written Shareholders’ Equity
28.239.5
84.1
121.2
3Q06 3Q07 9M06 9M07
58.8
69.1
3Q06 3Q07
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Ratings
Rating / Classificação Rating / ClassificaçãoÍndice / Classificação Rating
Baixo Risco de Crédito Baixo Risco para médio prazo Baixo Risco de Crédito Baixo Risco de CréditoJulho de 2007 Junho de 2007 Junho de 2007 Junho de 2007
brBBB+ 11,67 brA- A-
Rating Ratiing / Ranking Rating
Low Credit Risk Low Risk – Medium Term Low Credit Risk Low Credit Risk
July 2007 June 2007 June 2007 June 2007
brBBB+ 11.67 brA- A-
Ratiing / Ranking
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Corporate Governance
The Board of Directors of Paraná Banco authorized a stock buyback program, in accordance with CVM Instruction 202, seeking to create value for shareholders by optimizing its capital structure. The program provides for the purchase of up to 4,156,481 preferred shares until October 15, 2008.
Paraná Banco hired Banco UBS Pactual to act as market maker for its preferred shares for a period of six months, automatically renewable, with the objective of increasing liquidity in the shares.
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Share Price Evolution(R$)
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3-Jul 10-Jul 17-Jul 24-Jul 31-Jul 7-Aug 14-Aug 21-Aug 28-Aug 4-Sep 11-Sep 18-Sep 25-Sep 2-Oct 9-Oct 16-Oct 23-Oct 30-Oct 6-Nov
Pric
e pe
r Sha
re
Volu
me
of N
egoc
iate
d Sh
ares
(x 1
,000
)
Paraná Banco
VOLUME Paraná Banco
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IR Contact
Luis César MiaraCFO and Investor Relations Officer
Ricardo Rosanova GarciaIR Manager
Maurício N. G. FanganielloIR Coordinator
Phone: (55 41) 3351-9907 / 3351-9961
e-mail: [email protected]
IR Website: www.paranabanco.com.br/ir“This document may include estimates and forward-looking statements. These estimates and forward-looking statements are to a large extent based on current expectations and projections about future events and financial trends that affect or may come to affect our business. Many important factors may adversely affect the results of Paraná Banco as described in our estimates and forward-looking statements. These factors include, but are not limited to, the following: the Brazilian and international economic conjunctures, fiscal, foreign-exchange and monetary policies, higher competition in the payroll deductible loan segment, the ability of Paraná Banco obtain funding for its operations, and amendments to Central Bank regulations.
The words “believe”, “may”, “could”, “seek”, “estimate”, “continued”, “anticipate”, “plan”, “expect” and other similar words have the objective of identifying estimates and projections. The considerations involving estimates and forward-looking statements include information related to results and projections, strategies, competitive positioning, the environment in the industry, growth opportunities, the effects of future regulations, and the impacts from competitors. Said estimates and projections refer only to the date on which they were expressed, and we do not assume any obligation to publicly update or revise any of these estimates arising from the occurrence of new information, future events, or any other factors. In view of the risks and uncertainties described above, the estimates and forward-looking statements contained herein may not materialize. Given these limitations, shareholders and investors should not make any decisions based on the estimates, projections and forward-looking statements contained in this report.