banco abc - 4th quarter 2007 earnings presentation
TRANSCRIPT
1
4Q07 Results PresentationJanuary, 31
Speakers:
Tito Enrique da Silva Neto CEO & Member of the Board of DirectorsSérgio Lulia Jacob Executive Vice President & IR OfficerAlexandre Sinzato IR Manager
2
DISCLAIMER
The following material, on this date, is a presentation containing general information about the Banco ABCBrasil S.A. We offer no guarantee and make no declaration, implicitly or explicitly, as to theaccuracy, completeness or scope of this information.
This presentation may include forward-looking statements of future events or results according to theregulations of the Brazilian and International securities and exchange commissions. These statements arebased on certain assumptions and analyses by the Company that reflect its experience, the economicenvironment, future market conditions and expected events by the company, many of which are beyond thecontrol of the Company. Important factors that may lead to significant differences between the actualresults and the statements of expectations about future events or results include the company’s businessstrategy, Brazilian and International economic conditions, technology, financial strategy, financial marketconditions, uncertainty regarding the results of its future operations, plans, objectives, expectations andintentions, among others. Considering these factors, the actual results of the company may be significantlydifferent from those shown or implicit in the statement of expectations about future events or results.
The information and opinions contained in this presentation should not be understood as arecommendation to potential investors and no investment decision is to be based on the veracity, currentevents or completeness of this information or these opinions. No advisors to the company or parties relatedto them or their representatives should have any responsibility for any losses that may result from the useor contents of this presentation.
2007 Highlights• Banco ABC BRASIL successfully concluded its initial public offering (IPO) in July
2007. Proceeds from the offering increased stockholders’ equity to R$1,085.6 million
as of 12/31/2007.
• The credit portfolio, including guarantees, reached R$4,992.2 million, growing 71% in
relation to the 4Q06 and 17% in relation to the 3Q07.
• The quality of the loan portfolio remained high, with 99.5% of loan operations rated
between AA and C (Brazilian Central Bank Resolution 2682), compared to 98.8% in
the 4Q06 and 99.3% in the 3Q07.
• Net income in the quarter (excluding non-recurring expenses from the IPO)
increased by 154.6% to R$50.7 million, from R$19.9 million in the 4Q06, representing
an increase of 117.6% over 3Q07. Net income for 2007 was R$118.2 million, an
increase of 93.8% compared with R$61.0 million in 2006. The bank distributed the
gross amount of R$ 43.4 million as interest on shareholders equity.
• Our credit rating assigned by Fitch Ratings, equivalent to “AA-” on the national level
and “BB+” on the global level, with a stable outlook, is the highest among publicly-
held midsize banks.
3
Ownership Structure
Note: market capitalization calculated based on the share price of R$11.85 as of 12/28/2007.
Free Float33,2%
Associates1,4%
Local Management
9,4%
ABC BSC56%
R$ 1.61 Billion
Market Cap
4
Credit Portfolio
88.9% 88.4% 87.2%86.7%
86.3%
10.6%10.7%
11.6%
11.7%
11.8%
0.5%0.9%
1.2%
1.6%
1.9%
4Q06 1Q07 2Q07 3Q07 4Q07
Wholesale+L.Middle Middle Consumer
2,9113,194
3,557
4,251
4,992CAGR = 71.5%
(R$ mm) Including guarantees
5
Portfolio By Ticket
(R$)12/31/07 (%) 12/31/06 (%)
0 - 500 Thousand 125.6 3.2 34.2 1.5
500 Thousand - 2 MM 192.8 5.0 172.1 7.4
2 MM - 5 MM 448.8 11.5 381.9 16.4
5 MM - 10 MM 772.0 19.9 487.4 20.9
> 10 MM 2,348.1 60.4 1,259.6 53.9
Loans 3,887.2 100.0 2,335.1 100.0
AA-C99.45 %
D-H0.55 %
High-Quality Credit PortfolioCredit Porfolio
Rating (*)4Q07
%
Portfolio
AA 707.0 18.2%
A 1,745.6 44.9%
B 1,169.6 30.1%
C 243.8 6.3%
D 7.9 0.2%
E 1.3 0.0%
F 1.0 0.0%
G 1.5 0.0%
H 9.5 0.2%
Total 3,887.2 100.0%
AA-C 3,866.0
D-H 21.2
6
Segment
4Q07
Loan PorfolioWrite-off
2007
%
Portfolio4Q07 PLL
%
PortfolioPast Due
%
Portfolio
Wholesale/Large Middle 3,216.2 3.0 0.09% 25.4 0.79% 7.3 0.23%
Middle 574.7 3.6 0.63% 13.2 2.30% 5.8 1.02%
Consumer 96.3 0.1 0.12% 1.4 1.41% 0.5 0.49%
3,887.2 6.7 0.17% 40.0 1.03% 13.6 0.35%
Average Annual Losses/Portfolio in the past 10 years: 0.25%
(In R$ Million)
(In R$ Million)
*does not include guarantees issued
Middle Market
309
498 587
4Q06 3Q07 4Q07
CAGR = 89.9%
SP87.07%
SP Interior 8.79%
BH4.14%
8
Middle (R$ mm) - Including guarantees
12/31/2006 12/31/2007
Duration 110 days 181 days
Average Ticket R$ 1.3 MM R$ 1.9 MM
Clients 233 311
Wholesale and Large Middle
2,5873,684
4,309
4Q06 3Q07 4Q07
CAGR = 66.5%
SP38.16%
SP Interior /
CO39.42%
Sul11.04%
RJ / NE11.38%
9
Wholesale+L.Middle (R$ mm) - Including guarantees
12/31/2006 12/31/2007
Duration(excl. BNDES)
349 days 352 days
AverageTicket R$ 6,8 MM R$ 9.2 MM
Clients 379 466
Other ActivitiesCapital Market
4Q07 3Q07 Chg (%) 4Q06 Chg (%) 12M07 12M06 Chg (%)
Underwriting Fees and Structured Oper.
(R$ MM)4.6 3.5 32.3 2.9 59.3 17.8 9.5 88.6
Number of Deals 6 7 (14.3) 5 20.0 29 20 45.0
Consumer
4Q07 3Q07 Chg (%) 4Q06 Chg (%)
Portfolio (R$ MM) 96.3 67.9 41.8 14.4 568.6
Agreements 29 24 20.8 10 190.0
Agents 86 58 48.3 36 138.9
% INSS 39.9% 49.7% -9.8 pp 53.9% -14.0 pp
% Others 60.1% 50.3% 9.8 pp 46.1% 14.0 pp
Treasury
4Q07 3Q07 Chg (%) 4Q06 Chg (%) 12M07 12M06 Chg (%)
Revenue (R$ MM) 14.4 2.9 401.6 14.5 (0.8) 45.7 35.9 27.5
Average Consolidated VAR (R$ MM) 2.7 2.6 3.8 2.2 22.7 2.6 2.1 23.8
10
Private2%
Financial Institutions
32%
Private3% Corporate
23%
Institutional19%BNDES
12%
Private2%
Financial Institutions
41%
Funding
Local
11
Abroad
Private3%
Corporate26%
Institutional23%
BNDES14%
3Q07
4Q07
4Q07 Net Income Breakdown
50.7
39.4
-33.4
-11.2
0.7
Net Interest Income
Other Operational Expenses
Income Tax and Social
Distribution
Profit Sharing
Net Income
14.4
28.4
Loan Operations
Treasury
Working Capital
82.2
12.4
Services
12
Results (R$ MM) 4Q07 3Q07 Chg(%) 4Q06 Chg(%)
Credit - PLL 39.4 29.0 35.8 22.7 74.0
Services 12.4 9.3 32.9 7.3 69.7
Treasury 14.4 2.9 401.6 14.5 -0.8
Working Capital 28.4 24.0 18.5 10.8 163.0
Operational Results 94.7 65.2 45.1 55.3 71.2
Other Income\Expenses (33.4) (25.1) 33.3 (29.7) 12.4
Profit Sharing (11.2) (4.5) 152.2 (1.6) 597.7
Taxes 0.7 (12.3) -105.9 (4.0) -118.1
Net Income 50.7 23.3 117.4 19.9 154.8
*Excluding IPO expenses
3Q07: R$ 30.5MM 4Q07 : R$ 0.87MM
2007 Net Income Breakdown
118,2
119,5
-111.7
-22,7
-34,3
45,7
79,3
244,5
42,4
Net Interest Income
Other Operational Expenses
Income Tax and Social
DistributionProfit
Sharing
Net Income
Loan Operations
Treasury
Working Capital
Services
13
Results (R$ MM) 12M07 12M06 Chg.(%)
Credit - PLL 119.5 89.1 34.2
Services 42.4 25.2 68.4
Treasury 45.7 35.9 27.5
Working Capital 79.3 38.5 106.2
Operational Results 287.0 188.6 52.2
Other Income\Expenses (111.7) (103.6) 7.9
Profit Sharing (22.7) (5.0) 353.1
Taxes (34.3) (19.0) 80.6
Net Income 118.2 61.0 93.8*Excluding IPO expenses
3Q07: R$ 30.5MM 4Q07 : R$ 0.87MM
Expenses Breakdown
Expenses (R$ MM) 4Q07 3Q07 Chg(%) 4Q06 Chg(%) 12M07 12M06 Chg(%)
Personnel expenses (14.6) (12.5) 17 (15.5) -6.2 (47.0) (55.6) -15.5
Other administrative expenses (8.5) (7.3) 15.7 (11.7) -27.5 (43.7) (37.6) 16.1
Comissions - Payroll Deductible (1.5) (0.8) 77.1 (0.1) 1,448.8 (3.1) (0.1) 2,759.3
Profit Sharing (11.2) (4.5) 152.2 (1.6) 597.7 (22.7) (5.0) 353.1
Total (35,8) (25,1) 42,6 (29,0) 23,5 (116,4) (98,3) 18,4
Associates 406 378 7.4 314 29.3 406 314 29.3
Front-Office 140 124 12.9 97 44.3 140 97 44.3
Back-Office 266 254 4.7 217 22.6 266 217 22.6
Other Revenues\Expenses
(R$ MM) 4Q07 3Q07 Chg(%) 4Q06 Chg(%) 12M07 12M06 Chg(%)
Other Operational
Income\Expenses (8.0) (3.1) 160.2 (1.4) 480.0 (13.3) (5.4) 146.3
Tax Expenses (0.9) (1.0) -16.3 (0.7) 18.0 (4.0) (4.2) -5.6
Other Non-Operational
Income\Expenses (0.1) (0.4) n/a (0.3) -64.5 (0.8) (0.7) 14.1
Total (8.9) (4.5) 99.3 (2.4) 271.0 (18.0) (10.3) 75.4
14
*Excluding IPO expenses
3Q07: R$ 30.5MM 4Q07 : R$ 0.87MM
18.6%
10.1%
18.6%
4Q06 3Q07 4Q07
14.7% 16.1%
2006 2007
Profitability
15
19.9 23.3
50.7
4Q06 3Q07 4Q07
CAGR = 154.6%
61.0
118.2
2006 2007
CAGR = 93.8%
Net Profit (R$ mm) - Quarter
ROAE (% aa) - Quarter ROAE (% aa) – Year
Net Profit (R$ mm) – Year
50.7%
39.0%48.1%
31.0%
2006 2007
ÍNDICE DE EFICIÊNCIA (%) - includ Profit Sharing
ÍNDICE DE EFICIÊNCIA (%) - exclud Profit Sharing
Other Indicators
Efficiency Ratio (%)Quarter
Efficiency Ratio* (%)Year
439
1,083 1,086 13.9%
26.7% 23.1%
4Q06 3Q07 4Q07
49.6%
35.8% 38.2%46.7%
28.9% 25.5%
4Q06 3Q07 4Q07
ÍNDICE DE EFICIÊNCIA (%) - includ Profit Sharing
ÍNDICE DE EFICIÊNCIA (%) - exclud Profit Sharing
Stockholders’ Equity (R$ mm)
and Basel Index (%)
17
Ratings
ControllingShareholder
(9M07)
Total Assets: US$ 28,640 Mi.
Equity Shareholders: US$ 2,307 Mi.
ROE: 13.1%
Ratings:
BBB+ A3BBB+
ABC Brasil strength attested by its solid credit rating history
2004 2005 2006 2007
National – Long Term A A AA- AA-
National – Short Term F1 F1 F1+ F1+
International – Long Term - BB- BB BB+
International – Short Term - B B B
18