Download - 2012 Annual Public Meeting
Annual Public Meeting withAnalysts & Investors
August 28, 2012
Disclaimer
This presentation may contain references and statements representing futureexpectations, plans of growth and future strategies of BI&P. These references andstatements are based on the Bank’s assumptions and analysis and reflect themanagement’s beliefs, according to their experience, to the economic environment andto predictable market conditions.
As there may be various factors out of the Bank’s control, there may be significantdifferences between the real results and the expectations and declarations herewitheventually anticipated. Those risks and uncertainties include, but are not limited to ourability to perceive the dimension of the Brazilian and global economic aspect, bankingdevelopment, financial market conditions, competitive, government and technologicalaspects 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 statementsavailable at the CVM website (www.cvm.gov.br) and at our Investor Relations page inthe internet (www.bip.b.br/ir) and the making of your own appraisal.
1
COMPANY PROFILE
3
Agency Risk Rating Last Report
Standard & Poor’sGlobal: BB/ Stable/ B
National: brA+/ Stable/ brA-1August 2012
FitchRatings National: BBB/ Stable/ F3 July 2012
Moody’s Global: Ba3/ Stable/ Not Prime
National: A2.br/ Stable/ BR-2November 2011
RiskBankIndex: 10,43
Low Risk Short TermJuly 2012
BI&P - Banco Indusval & Partners is a commercial bank listed at
Level 2 Corporate Governance of the BM&FBOVESPA, with over 40
years of experience in the financial market, focusing on local and
foreign currency corporate loan products. 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 São Paulo Stock, Commodities
and Futures Exchange - BM&FBOVESPA and Serglobal Cereais,
acquired in April 2011, which originates agricultural bonds.
45 years of partnerships and evolution
4
A history built on credibility
1967Brokerage Firm
establihed
1991 Authorized
to operate asa Bank
2003Merger with
BancoMultistock
2004Sale of
Consumer Credit Business
2006Opening of first
4 branches
2007IPO and
opening of 6 branches
2010 Strategic review
2011
2012Level 2
BM&FBOVESPA
CONTROLLING GROUP
ON = 56%PN = 2%
Total = 34%
FREE FLOAT
ON = 44%PN = 95%Total = 65%
Capital Structure
5
Position as of June 30, 2012
Jair Ribeiro
Antonio G. da Rocha
Luiz Masagão Ribeiro
Carlos Ciampolini
Manoel F. Cintra Treasury
PN = 3%Total = 1%
Warburg Pincus
ON = 13%PN = 45%
Total = 26%
Other
ON = 31%PN = 50%
Total = 39%
100.0%100.0%17.7%
Serglobal Cereais
23.8%
Brasil AgrosecSecuritizadora
BI&P Indusval & Partners
Corretora
Sertrading
Class Total capitalControlling
GroupManagement
Treasury Shares
Free Float
Common 36,945,649 20,743,333 277,307 - 15,925,009 43.1%
Preferred 26,160,044 609,226 60,125 734,515 24,756,178 94.6%
Total 63,105,693 21,352,559 337,432 734,515 40,681,187 64.5%
Capital breakdown
Controlling Group34%
Management1%
Treasury1%
Institutional Investors
14%
Foreign Investors
30%
Individuals20%
Shareholder Base
6
As of June, 30, 2012
7
Corporate Governance
Shareholders Meeting
Supervisory Board
Board of Directors
Remuneration Committee
Executive Board
Human resources Committee
Products Committee
IT and Information Safety Committee
Legal Committee
Internal Audit Committee
Compliance Committee
Credit Committee
Special Cases Committee
Committees strenghthen our Governance
Cash and ALCO Committee
Supervisory Board and Board of Directors
Supervisory Board• Francisco de Paulo dos Reis Junior | Sitting Member
• Jairo da Rocha Soares | Sitting Member
• João Verner Juenemann | Sitting Member
Board of Directors• Manoel Felix Cintra Neto | Chairman
• Carlos Ciampolini | Vice Chairman
• Antonio Geraldo da Rocha
• Jair Ribeiro da Silva Neto
• Luiz Masagão Ribeiro
• Alain J.P. Belda | Independent Member
• Alfredo de Goeye Junior | Independent Member
• Guilherme Affonso Ferreira | Independent Member
• Walter Iório | Independent Member
8
Experienced leaders
Jair Ribeiro
CEO
Luiz Masagão Ribeiro
CEO
Kátia Moroni
VP Trade Finance,
Funding,
Syndications &
Fin. Institutions
André Mesquita
VP Commercial,
Products & Structured
Finance
Gilberto Faiwichow
VP Treasury &
Investors Relations
Credit Risk Management
Jair Balma
Local Funding Officer
Claudio CusinCorporate
Eliezer R. da SilvaMiddle Market
Credit
Compliance & Internal Controls
(Operating Risk)
Accounting & Controlling
Administration
Information Technology
Legal
Human Resources & Marketing
Liquidty & Market Risk
Management
A strong executive teamExecutive Board
Branch network
10
• Headquartered in São Paulo
• 10 branches located in the highest economic potential regions
• 1 offshore branch
• 438 employees (Bank + Brokerage)
− 203 front office
− 235 middle & back office
Covering +80% of Brazilian GDP
STRATEGY
Strategy defined by our Vision...
12
To be an innovative bank with excellence incorporate credit and deep understanding ofour clients’ businesses and industries theyoperate, becoming also one of the leadingplayers of the high-growth Brazilian corporatebond market.
...And built over three pillars
13
PEOPLE CUSTOMERS PRODUCTS
• Our main intangible asset• New focus on better credit
profile customers• Stronger Products team
• The basis for the success of our strategy
• Commercial teams restructured• Profound knowledge of the
market variables
• Attraction of new professionals• Profound knowledge of the
customers activities and industry segments
• Expertise in the Bank’s target industry segments
• Corporate culture cosnolidation• Closer interaction with our
customers• Product and service portfolio
enhancement
• Motivating BI&P team• Expansion of business with
Corporate customers: X-sellingand more stable income flow
• Structured solution to meet specific customers’ needs
Middle Market: Companies with annual sales from R$40million to R$400 million
Corporate: Companies with annual sales ranging from R$400 million and R$2,0 billion
Aiming at growing based on quality assets and recurring income
Multiproduct OfferingProduct portfolio allows conquering new customers
14
THE SCENARIO AND OUR PERSPECTIVES
508696
788938
1.125 1.169
2007 2008 2009 2010 2011 mai/12
R$
bill
ion
Corporate Credit
Loan Agreements < R$100 tsdfrom R$100 tsd to R$10 millionLoan Agreements > R$10 million
9361.227
1.4141.706
2.030 2.16735,2%40,5%
44,4% 45,2%49,0% 50,6%
0
200
400
600
800
1.000
1.200
1.400
1.600
1.800
2.000
2.200
2.400
2.600
2.800
2007 2008 2009 2010 2011 jun/12
R$
bill
ion
Credit volume in the Financial SystemCredit/GDP (%)
Credit evolution in Brazil
16
Source: Banco Central do Brasil
Larger companies highlighted (loan agreements > R$10 mm)
*Annualized
• Credit/ GDP ratio exceeds 50%
• Individuals respond for 47% of total loans in the system, up 21% during 2011 and 16% in 1H12 annualized, with great influence of housing loans.
• Companies represent 53% of total credit, up 17% in 2011 and 12% 1H12 annualized, driven by free resources , specially working capital and loans granted with foreign funding.
• Credit Agreements with amounts above R$ 10 million, usually taken by larger companies, show a better growth both in 2011 and in 1H12.
Perspectives for Credit in Brazil
17
Worst moment for delinquency is likely to be overcomeBACEN data indicates improvement in he coming months
Interest rate relevant drop Delinquency ratio dropping, yet marginal(loans overdue from 15 to 90 days fall down)
0%
2%
4%
6%
8%
10%
jan
/0 8
jul/
08
jan
/0 9
jul/
09
jan
/1 0
jul/
10
jan
/1 1
jul/
11
jan
/1 2
jul/
12
-0,2%
0,0%
0,2%
0,4%
0,6%
0,8%
1,0%
1,2%
1,4%
jun
/10
set/
10
dez
/10
mar
/11
jun
/11
set/
11
dez
/11
mar
/12
jun
/12
set/
12
dez
/12
mar
/13
jun
/13
0%
2%
4%
6%
8%
ja…
jul… ja…
jul… ja…
jul… ja…
jul… ja…
jul… ja…
jul… ja…
jul…
Corp 15-90 days Corp > 90 days Ind 15-90 days Ind > 90 days
Source: Real interest rate 360 daysBM&FBovespa and Banco Central do Brasil
Source: Banco Central do Brasil
Source: IBGE and projections by BI&P Economic Dept.
Quartely GDP Projected GDP
18
5%
10%
15%
20%
25%
30%
35%
dez
/07
mar
/08
jun
/08
set/
08
dez
/08
mar
/09
jun
/09
set/
09
dez
/09
mar
/10
jun
/10
set/
10
dez
/10
mar
/11
jun
/11
set/
11
dez
/11
mar
/12
jun
/12
set/
12
dez
/12
mar
/13
jun
/13
Credit shall continue growing in the 17% to 20% range
Fonte: BACEN e projeções Depto. Econômico BI&P
Perspectives for Credit in Brazil
___ Annual Credit Growth ___ Most likely scenario
Taking such scenario into consideration...
• Better quality short term loan origination is prioritized.
• Fee income business increasing, also with the strengthening of the fixed income capital markets team.
• Focus in developing franchise value in specific productive chains is maintained.
• Funding mix effective management to support the credit portfolio growth.
• Capital management aims at monitoring and developing alternatives to maximize its utilization.
• Investments in systems, people and process reviewing are maintained to optimize resources and reduce costs.
19
OUR PERFORMANCE
2.1092.248
2.5342.759 2.807
2Q11 3Q11 4Q11 1Q12 2Q12
R$
mill
ion
Loans & Discounted Receivables in Reais Trade Finance
Guarantees Issued (L/G and L/C) Agricultural Bonds (CPR, CDA/WA and CDCA)
Private Credit Bonds (PNs and Debentures)
Expanded Credit PortfolioCautious growth under macroeconomic scenario
21
Expanded Credit Portfolio EvolutionQuality growth strategy maintained
414498
656 646517
2Q11 3Q11 4Q11 1Q12 2Q12
R$
mill
ion
New Transactions
22
2.5342.8071.163
(648)
(170) (72)
4Q11 Credits received and not renewed
Creditexits
Write offs
New transactions 2Q12
R$
mill
ion
98% of the transactiosn disbursed in 1H12
were rated from AA to B.
Expanded Credit Portfolio Breakdown by product group
Loans & Discounts
in Real54%
Trade Finance
16%
BNDES Onlendings
9%
Receivables acquired
from Customers
3%
Other1%
Guarantees Issued
6%
Agricultural Bonds10%
Private Credit Bonds
1%
Expansion of product line contributed to access
larger customers and allowed credit portfolio growth
specially with
• BNDES Onlendings , with the extension of credit
line, this portfolio reached R$260.8 million,
increasing by 12.9% in 2Q12 and 82.6% in 12
months, mainly in the Corporate segment.
• Guarantees and Letters of Credit issued totaled
R$175.8 million, growing 7.3% in 2Q12 and
156.6% in 12 months.
• Agricultural Bonds portfolio (CPRs and CDA/WAs,
classified as Marketable Securities, and CDCAs, in
the credit portfolio), amounted to R$267.0
million, up 16.2% in the quarter and 622.4% in 12
months.
• Private Credit Bonds portfolio (debentures)
totaled R$30.7 million, 20.2% above the amount
recorded in 1Q12.
23
• Agricultural bonds activity started in 1Q11, plays an
important role in our growing business strategy.
• Our agricultural bonds transactions are focused on
commodities financing, specially grains, cotton, sugar
cane and coffee.
• The expertise of our team combined with the support of
external specialists improve business opportunities
detection and risk mitigation. As an example, this
year’s drought in the Southern Region did not impact
payments in this portfolio.
• Our transactions count on instruments developed to
protect from commodity price fluctuations to minimize
risks.
37 52
129
230267
2Q11 3Q11 4Q11 1Q12 2Q12
R$
mill
ion
Agricultural Bonds
CPR Warrant (CDA/WA) CDCA
Agricultural Bonds PortfolioSpecializing in Agribusiness
Our agricultural bonds activity aims to follow the agribusiness growth in
Brazil and the great moment of the commodities market.
24
Expanded Credit PortfolioSignificant presence of Agribusiness and Food related activities
25
19%
16%
12%
5%5%5%
4%
4%
4%
4%
3%
3%
2%2%
2%1%
10%
Agribusiness
Food & Beverage
Civil Construction
Transportation & Logistics
Chemical & Pharmaceutical
Financial Services
Pulp & Paper
Automotive
Oil & Biofuel
Metal Industry
Textile, Apparel and Leather
Education
Power Generation & Distribution
Financial Institutions
Retail & Wholesale
Electronics
Other Industries (% lower than 1%)
1.604 1.593 1.572 1.5011.267
2Q11 3Q11 4Q11 1Q12 2Q12
R$
mill
ion
Middle Market
322 436641
8311.078
2Q11 3Q11 4Q11 1Q12 2Q12
R$
mill
ion
Corporate
Credit PortfolioStrategy for equilibrium between Corporate and Middle Market segment maintained
• Migration of customers managed by the
Middle Market team to Corporate,
responding for R$200 million outstanding
volume in 2Q12.
• Middle Market segment: 53% of Credit
Portfolio (63% in 1Q12), and 51% of
Expanded Credit Portfolio.
• Corporate clients: 45% of Credit Portfolio
(35% in 1Q12), and 47% of Expanded Credit
Portfolio.
• Average Exposure by Customer:
– Middle Market = R$2.2 million
– Corporate = R$6.9 million
companies with annual revenues between R$40 million and R$400 million
companies with annual revenues between R$400 million and R$2 billion
26
up to 90 days39%
91 to 180 days
19%
181 to 360 days
15%
+360 days27%
Maturity
Top 1018%
11 - 60 largest
32%
61 - 160 largest
25%
Other25%
Client Concentration
Credit Portfolio Exposure by client and term of transactions
• Top 60 borrowers remain at 50% of Credit Portfolio (49% in 2Q11)
• 73% of Credit Portfolio to mature up to 360 days
27
• 99.4% of the transactions disbursed in 2Q12 were classified between AA and B.
• Allowance for Loan Losses covers 176% of loans overdue more than 90 days.
• R$17 million of fully provisioned H rated loans were written off during the quarter.
6,8%6,3%
5,0%
3,2% 2,8%6,3%
4,1%4,7%
2,7% 2,6%
2Q11 3Q11 4Q11 1Q12 2Q12
NPL / Credit Portfolio
NPL 60 days NPL 90 days
Credit Portfolio QualityHigher quality of new transactions
28
2%
4%
6%
40%
39%
37%
28%
32%
34%
20%
17%
16%
10%
8%
8%
4Q11
1Q12
2Q12
Rating
AA A B C D - H
92.1%
91.8%
89.7%
Time deposits
(CDB)27%
Insured Time
Deposits (DPGE)
28%LCA12%
LF1%
Demand Deposits
1%
Interbank Deposits
5%
Foreign Borrowings
16%
Onlendings10%
Time Deposits (CDB & DPGE) are the main
sources of funding, however:
• Agribusiness Letters of Credit (LCAs)
increased by 12.2% in the quarter and
150.8% in 12 months, supported by the
agricultural bonds portfolio growth.
• Funding through Bank Notes (LFs) grew
from R$7.4 million in 2Q11 to R$30.6
million, and accounted for 1.1% of total
funding.
• 90% of foreign currency borrowings are
Trade Finance related .
FundingProduct mix helps cost reduction
2.230 2.420 2.533 2.736 2.755
2Q11 3Q11 4Q11 1Q12 2Q12
R$
mill
ion
in Real in Foreign Currency
29
Performance
• Financial intermediation income before ALL
expenses increases NIM, since there was no
material change in the balance of interest
bearing assets.
• The significant improvement in the Efficiency
Ratio keeps the trend started in 3Q11.
• The increasing pipeline of structured
transactions should contribute to improve our
efficiency through service fees.
• No significant headcount additions are
forecasted and internal processes are
continuously reviewed looking for optimizing,
excellence and cost reduction.
78,6%71,2%
77,6%
68,1%62,3%
78,6%
65,1%
2Q11 3Q11 4Q11 1Q12 2Q12 1H11 1H12
Efficiency Ratio
3,7%4,6% 4,8% 4,9%
5,8%4,1%
5,3%
5,2%6,3% 6,6% 6,6%
7,7%
5,5%7,1%
2Q11 3Q11 4Q11 1Q12 2Q12 1H11 1H12
NIM
NIM NIM(a) *
* NIM(a) adjusts remunerated average assets by repos with equivalent volumes, tenors and rates both in assets and liabilities.30
3,65,2
7,3
3,51,7 2,6
2Q11 3Q11 4Q11 1Q12 2Q12 1H11 1H12
Return on Average Equity (ROAE) %
5,17,3
10,3
5,02,4
7,5
2Q11 3Q11 4Q11 1Q12 2Q12 1H11 1H12
R$
mill
ion
Net Profit
-49.4
0,50,7
1,0
0,50,2 0,3
2Q11 3Q11 4Q11 1Q12 2Q12 1H11 1H12
Return on Average Assets (ROAA) %
ProfitabilityBottom line still reflects the risk of credit portfolio originatedbefore 2010
Bottom line absorbs allowance for loan losses
expenses amounting to R$22.6 million in the
quarter and R$37.0 million in 1H12 (R$103.2
million in 1H11).
31
-18.9 -2.5
566,5 577,5 577,1 590,5 582,4
2Q11 3Q11 4Q11 1Q12 2Q12
R$
mill
ion
Shareholders’ Equity
21,3% 21,1%18,2% 17,5% 17,0%
2Q11 3Q11 4Q11 1Q12* 2Q12
Basel Index (Tier I)
3,7x 3,9x4,4x 4,6x 4,8x
2Q11 3Q11 4Q11 1Q12 2Q12
LeverageExpanded Credit Portfolio /
Shareholders’ Equity
Capital StructureCapitalization and liquidity still allow healthygrowth
32* Operating risk calculation for 1Q12 was adjusted, increasing this risk allocation from R$8.2 million to R$20.2 million, with reduction in Basel Index in that quarter from 18.1% to 17.5%.
1.102
503359
682810
442 337
1.106
90 days 180 days 360 days +360 days
R$
mill
ion
Assets & Liabilities Management
Assets Liabilities
Share Performance
IDVL4 in 2Q12
Maximum Share Price in the period R$ 8.65
Minimum Share Price in the period R$ 6.21
Share Price on Mar 30, 2012 R$ 8.60
Share Price on Jun 29, 2012 R$ 6.69
Change in the period -22.2%
IBOVESPA Change in the period -15.7%
IDVL4
Average Daily Volume
- in June 2012 R$ 168,931
- in 2Q12 R$ 117,887
- in 12 months R$ 129,281
33
50
60
70
80
90
100
110
120
IBOVESPA IDVL4 IDVL4 adjusted for earnings
SUSTAINABILITY
Clients
Goals:
• To expand social and environmental performance of our customers;
• To development of social and environmental products - ABC Program - BNDES already deployed;
• Quality in business relationships.
Expectation:
• To contribute for the awareness of people and enterprises about the importance of the rational utilization of natural resources and of the respect towards the social environment and citizenship.
Credit restriction to companies:
• Using child labor, slavery or alike;
• With activities related to gambling and prostitution;
• Operating in the production or marketing of substances threatening health and safety of people, animals and plants.
Social & Environmental Policy applied to credit
Policy of Social and Environmental ResponsibilityEncouraging the adoption of responsible attitudes towards:
Social development, citizenship rescue and Environmental Respect
Business Sustainability
35
• Benefits: Safety, Health and Life Quality
• Training and Capabilities Development
• Scholarship Programs
• Trainee Program
• Leadership Development
• Policies and Code of Ethics
• Social Inclusion Initiatives
• Volunteer Program
• Social & Environmental awareness
• Sports Incentive
Sustainability and the Workforce
36
Sustainability and the Community
• Through partnerships with nongovernmental organizations, BI&P
invests in projects focused on education, culture, sports,
environment, entrepreneurship and income generation.
• The supported projects directly reach about 8,700 children, young
people and adults and indirectly reach 32,800 people, including
household members and community.
• Furthermore, Indusval Sustainability Institute is part of
RedEAmérica, an important network of institutes and foundations
that join private capital for grassroots development.
37
IN A NUTSHELL
39
We are consolidating our fundamentals
NEW CULTURE NEW STRUCTURE NEW POSITIONING
Strategic VisionStrong and experienced
management and teams
Deep knowledge of market variables and of our customers’
businesses
Development of edge and
expertise in certain business
chains
The new headquarters and
investments in technology and
systems provide more safety
and efficiency
Broader product offer, tailor-made to meet the needs of our customers and the industries
where they operate
Constant pursuit of innovation
and excellence
Solid policies and enhanced
operational procedures
Development of effective relationships with mid-sized and
large corporate customers
Highlights
40
BALANCE SHEET 2010 2011 1H12 1Q12 2Q12
Credit Portfolio 1,876.9 2,269.6 2,395.6 2,385.6 2,395.6
Middle Market 1,538.5 1,571.8 1,266.7 1,500.8 1,266.7
Corporate 256.5 641.3 1,078.0 830.6 1,078.0
Other 1 81.9 56.5 51.0 54.2 51.0
Expanded Credi t Portfolio 2 1,941.2 2,534.4 2,807.1 2,759.1 2,807.1
Total Assets 3,276.1 4,278.3 4,966.5 4,583.0 4,966.5
Shareholders Equity 426.4 577.1 582.4 590.5 582.4
RESULTS 2010 2011 1H12 1Q12 2Q12
Financial Intermediation before ALL 190.2 170.6 110.4 50.8 59.6
ALL Expenses 3 (49.0) (118.1) (37.0) (14.4) (22.6)
Service Fees 12.8 19.9 12.0 6.6 5.4
Personell and Operating Expenses (95.9) (122.1) (71.4) (35.9) (35.6)
Operating Result 41.6 (59.1) 15.3 9.3 6.0
Net Profit 29.0 (31.7) 7.5 5.0 2.4
Amounts in R$ million, unless otherwise stated
1 Including Consumer Credit, Acquired Loans and Non-Operating Assets Sale Financing2
Including Guarantees , Sureties, Leters of Credit, PN, debentures and agro bonds.3
Including complementary allowance for loan losses.
PERFORMANCE 2010 2011 1H12 1Q12 2Q12
Leverage (Credit portfolio/ Equity) 4.6x 4.4x 4.8x 4.7x 4.8x
Basel ratio 17.6% 18.2% 17.0% 17.5% 17.0%
Return on average Equity 6.8% -6.3% 2.6% 3.5% 1.7%
Adjusted Net Financial Margin 6.6% 4.3% 5.3% 4.9% 5.8%
Efficiency Ratio 60.1% 76.3% 65.1% 68.1% 62.3%
STOCK 2010 2011 1H12 1Q12 2Q12
Number of Shares in Free Float1 (in thousand) 40,466 62,359 62,371 62,371 62,371
IOE paid 25.1 27.8 - - -
IOE paid per Share (R$) 0.61 0.53 - - -
Price/ Book Value 0.75x 0.73x 0.72x 0.91x 0.72x
Market Capitalization 321.7 420.9 417.3 536.4 417.3
Highlights
41
1 Shares issued (-) Treasury Shares
Amounts in R$ million, unless otherwise stated
Gil Faiwichow
Treasury VP and IRO
Phone: (55 11) 3315-6821
E-mail: [email protected]
Banco Indusval S/A
Rua Iguatemi, 151 – 6th floor
01451-011 São Paulo – SP – Brazil
Website: www.bip.b.br/ir
Maria Angela R. Valente
Head of IR
Phone: (55 11) 3315-6821
E-mail: [email protected]
Isabel Paiva e Sousa Oliveira
IR Manager
Phone: (55 11) 3315-6677
E-mail: [email protected]
Investor Relations Contact Information
42