relatório de administração - banco votorantim...its client base, which at the end of 1h12...
TRANSCRIPT
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Contents
Management Report
Independent Auditors' Report on Financial Statements
Individual and Consolidated Balance Sheets
Individual and Consolidated Statements of Income
Statements of Changes in Shareholders' Equity
Individual and Consolidated Statements of Cash Flows
Individual and Consolidated Statements for Added Value
Notes to the Financial Statements
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Management Report
Dear Shareholders,
In compliance with legal and statutory provisions, we are submitting Banco Votorantim S.A.'s
("Banco Votorantim") individual and consolidated financial statements for your appreciation
concerning the six month period ended June 30, 2012 (1H12) and 2011 (1H11), accompanied by
the corresponding notes and independent auditors' report.
1. Economic Environment and Banking Sector
1H12 period was marked by the instability in the global financial market, derived from the
European sovereign and banking crisis. Brazil continues to be highly assessed by the rest of the
world, as attested by the positive foreign exchange flow of the period, of US$ 22.9 billion, which
helped international reserves to set a new record high of US$ 373.9 billion. However, the country
did not escape unscathed from this turbulence and some of its indicators became weaker. The
second wave of the global crisis of 2008/09 affected the Brazilian economy through two main
channels: (i) that of international trade, with the reduction of 45.4% in the trade surplus over the
same period last year; and (ii) that of confidence of local entrepreneurs, so that investments in
expansion of productive capacity were significantly reduced.
Even with the several stimulant measures to reanimate the economy, unemployment at historical
minimum levels and expanding income, the increase in family indebtedness and the consequent
impairment of income with these debts prevented a more pronounced reaction from consumers.
At the same time, and still reflecting the changes in the economic and regulatory context as of
2010/11, which has been affecting Brazilian economic activity since then, the delinquency of
individuals continued to expand and reached 7.8% in Jun.12 (7.4% in Dec.11). This growth was
boosted by the market delinquency of the auto finance segment, niche in which Banco
Votorantim operates, which reached 6.0% in Jun.12 (5.0% in Dec.11) and rose at a faster pace
than the other categories of loans for individuals.
The volume of credit concession for auto finance operations by individuals reached the monthly
average of R$ 7.5 billion in 1H12, down 11.7% from the monthly average of 2011 (R$ 8.5
billion), when the macroprudential credit restriction measures were still in force.
It is estimated that economic activity will accelerate in 2H12, reflecting the significant reduction
of the basic interest rate of the economy promoted in recent months and the tax reliefs already
introduced by the government, besides the impetus that should be given in public investment, in
order to create conditions for the gradual reduction of delinquency levels.
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2. Key Information – Consolidated Position
RESULTS (R$ Million)
Gross financial margin¹ (a) 3,016 2,325 -22.9%
Allowance for loan losses - ALL (b) (1,268) (3,025) 138.5%
Net income from financial intermediation (a - b) 1,748 (700) -140.0%
Fee income/Banking fees income 627 492 -21.5%
Administrative and personnel expenses 2 (1,112) (1,213) 9.1%
Operating income 825 (1,808) -319.2%
Net income (loss) 541 (1,132) -309.4%
MANAGEMENT INDICATORS (%)
Retorn on Average Equity 3
(ROAE) 13.0 (25.4) -38.4 p.p.
Retorn on Average Assets 4 (ROAA) 1.0 (2.0) -2.9 p.p.
Efficiency Ratio (ER) - accumulated basis of 12 months5 36.2 48.1 11.9 p.p.
Basel Index 13.9 15.5 1.6 p.p.
BALANCE SHEET (R$ Million)
Total assets 119,190 113,610 -4.7%
Loan portfolio 61,213 58,809 -3.9%
Wholesale segment 20,443 20,484 0.2%
Consumer Finance segment 40,769 38,325 -6.0%
Guarantees provided 10,598 12,634 19.2%
Credit assignments with recourse 12,943 12,031 -7.0%
FIDCs6 2,926 3,345 14.3%
Funding sources 81,145 80,985 -0.2%
Shareholders' equity 8,706 9,304 6.9%
Capital (Basel Index) 12,592 13,624 8.2%
OTHER INFORMATION
Assets under Management - AuM (R$ Million) 37,839 43,203 14.2%
1. Net income from financial intermediation before allowance for loan losses;
3. Ratio between net income and average equity o f the period. This ratio is annualized;
4. Ratio between net income and average assets of the period. This ratio is annualized;
Variation
5. ER = administrative and personnel expenses / (gross financial margin + fee income/banking fees income + other operational
income and expenses + fiscal hedge adjustment);
6. Investments funds in credit rights in which Banco Votorantim holds 100% of subordinated quotas.
1H11 1H12
2. Considers non-recurring expenses associated to reestructuring under process and to the increase of co llection charges in the
Consumer Finnace segment;
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3. Business Performance
Transactions of Banco Votorantim are conducted in the context of a set of subsidiaries that
operate in an integrated manner in the financial market, including in relation to risk management.
These subsidiary companies include BV Financeira, BV Leasing, Votorantim Asset Management
and Votorantim Corretora de Títulos e Valores Mobiliários.
Banco Votorantim has a robust and committed shareholder base (Votorantim Group and Banco
do Brasil – ―BB‖) and a diversified wholesale bank, consumer finance and wealth management
business portfolio. These factors, combined with BB’s strategic partnership, place Banco
Votorantim in a privileged position to occupy the space created by banking consolidation and to
seize business opportunities associated with the expansion of the middle class, increase of
investments in infrastructure and the development of the local capital markets.
In 2011, economic-regulatory shifts and the worsening of the international crisis have changed
the Brazilian banking scenario. At the same time, a systemic increase of delinquency concerning
Individuals was recorded, imposing challenges mainly to financial institutions more focused on
consumer finance, such as Banco Votorantim.
In the auto finance market, in which Banco Votorantim has a strong presence, delinquency
doubled last year (2.5% in Dec.10; 5.0% in Dec.11) and has continued to rise now in 1H12,
reaching 6.0% in Jun.12.
In addition, Bacen Resolution 3,533 came into effect on Jan.12, changing the accounting method
of credit assignments with recourse. This new regulatory change impacted the securitization
market and the income of banks operating in it.
In this wise, Banco Votorantim continued its prudential adjustment process, from the 4Q11,
advancing in the initiatives from its Change Agenda. After a period of strong growth, with
important economies of scale, the current focus is on increasing profitability in all the business
lines in the medium term.
Banco Votorantim’s consolidated result in 1H12 totaled R$ -1,132million (R$ 541 million in
1H11). The variation of the net income of 1H12 in relation to that recorded in the same prior-year
period is explained by three main factors – all related to Consumer Finance: (i) increase in
expenses with credit provisions, mainly due to delinquency above the historical average of the
auto finance portfolios originated by BV Financeira between Jul.10 and Sept.11; (ii) non-
realization of credit assignments with recourse in 1H12; and (iii) reduction of origination
volumes. An increase in personnel and administrative expenses was also recorded in 1H12,
justified by timely expenses associated with the restructuring in progress and with the increase in
credit collection expenses in Consumer Finance.
Wholesale, composed of the Corporate & Investment Banking (CIB), BV Empresas, Asset
Management, Private Bank and Treasury segments, maintained its track record of good
performance, with consistent generation of revenues and delinquency under control.
CIB ended Jun.12 with an expanded loan portfolio (with guarantees provided) of R$ 32.7 billion,
having strengthened its capital discipline and boosted its importance to clients by means of the
offer of integrated financial credit solutions, structured products and investment bank services. At
BV Empresas, the expanded loan portfolio reached R$ 9.6 billion, growth of 30% in 12 months,
with efficiency gains and delinquency under control – 2.3% in Jun.12. The third-party wealth
management segment, through Asset Management, reached R$ 43.2 billion of funds under
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management in Jun.12, growth of around 14% in 12 months, deepening its partnership with BB
and consolidating its position as 8th largest asset management company in the market by the
Anbima managers ranking. Private Bank, in turn, maintained its focus on the estate planning of
its client base, which at the end of 1H12 presented expansion of 17% in relation to Jun.11. In the
same period, the volume of assets under management grew 12%.
Consumer Finance totaled a managed portfolio of R$ 53.7 billion in Jun.12, including assets
assigned with recourse to other financial institutions and the assets assigned to FIDCs – Credit
Receivables Investment Funds. As mentioned, Consumer Finance had its results compressed
mainly by the systemic increase of delinquency in auto finance operations, a segment that
corresponds to 80% of its managed loan portfolio.
In this context of results, Banco Votorantim has significantly strengthened the quality of its credit
risk profile. The Basel index closed Jun.12 at 15.5%, 250 base points over Mar.12, benefiting
from the capital investment of R$ 2 billion made in Jun.12. With this measure, BB and
Votorantim Finanças maintain the capitalization of Banco Votorantim at appropriate levels, as
provided in the Shareholders’ Agreement.
To resume growth with profitability, Banco Votorantim continued progressing in 1H12 in the
implementation of a series of strategic initiatives in its Change Agenda, with special emphasis on:
Auto finance operating model: intensification of the focus of activity on multi-brand
dealers (used vehicles) for origination targeting the own loan portfolio, besides the
adaptation of incentives for distribution channels (multi-brand dealers and new car
dealers);
Credit: improvements of Consumer Finance policies, processes and models. After the
significant improvement in the credit risk levels of 4Q11 origination, 1H12 productions
maintained the track record of good quality levels evidenced by the behavior of the
leading indicator ―delay of the 1st installment‖ of auto finance production;
Credit Collection: review of Consumer Finance processes, targeting delinquency
reduction and the recovery and/or minimization of losses;
Efficiency: adaptation of the organizational structures to the new production threshold of
Consumer Finance; and
Operations: continuity of the work of the Operational Review Committee (CRO),
formed by representatives of the shareholders, which has worked with teams from BV
Financeira in the implementation of operational improvements and refinement of internal
controls.
The progress in the Change Agenda creates the conditions for Banco Votorantim to resume
growth with profitability over the medium term. However, the short-term results will continue
impacted by the same three factors (related to Consumer Finance) mentioned previously.
The strategies and initiatives adopted, whose effects are evident both in maintaining the good
performance of Wholesale, and in the generation of good, new businesses with profitability in
Consumer Finance, will allow Banco Votorantim to resume its path of sustainable growth with
profitability in the medium term.
This process of prudential adjustment, from 4Q11, relies on full support of shareholders, who are
committed to maintaining the capital structure at appropriate levels, as provided in the
Shareholders’ Agreement. The shareholders' commitment extends to the preparation of Banco
Votorantim to the new regulatory context of Basel III.
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For further information on the consolidated economic and financial performance of Banco
Votorantim, see the ―2Q12 Earnings Release‖ on the Investor Relations website
(www.bancovotorantim.com.br/ir).
4. Advances in Strategic Partnership with Banco do Brasil
Banco Votorantim and Banco do Brasil (BB) have explored joint business opportunities in
several segments, with tangible progress achieved, such as:
Development of new credit assignment model without recourse: in view of the new
economic and regulatory context, BV Financeira has prioritized the production at multi-
brand dealers (used vehicles) for the own loan portfolio, in which it has recognized
expertise, and in 2012 has made progress in the structuring of a new credit assignment
model without recourse to BB (―BV Financeira Originadora‖), focused on the channel of
new car dealers. In 2Q12, a pilot operation was executed to test and refine the systemic
developments of this new model, to be consolidated in 2H12.
Offer of investment products: BB DTVM and Votorantim Wealth Management &
Services (VWM&S), the consolidating structure of Banco Votorantim’s third-party asset
management, have made a joint effort in the development and distribution of innovative
and customized Credit Receivables Investment Funds (FIDCs), Real Estate Investment
Funds (FIIs), Equity Investment Funds (FIPs) and Private Credit. In 1H12, VWM&S
continued with the business expansion in partnership with BB, with the development of
exclusively structured products tailored for the needs of the shareholder partner in a total
volume that reached about R$ 2.2 billion in Jun.12. Other projects are approaching
completion and should be concluded over the course of 2H12.
Expansion of the business of CIB: deepening of the partnership with BB in the
Corporate & Investment Banking businesses, focusing on credit origination, structured
products, derivatives (hedging), mandates for issues of shares and bonds in the
international market. In 1H12, it is worth emphasizing the joint performance of Banco
Votorantim and BB in the IPO of Locamérica.
Expansion of the business of Votorantim Corretora: BB is making more extensive use
of Banco Votorantim’s brokerage firm to trade propriety positions, investment funds and
its consumer finance segment (via BB’s home broker).
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5. Rating agencies
Banco Votorantim holds investment grade rating from the three leading international rating
agencies, in recognition of its credit quality.
Foreign Currency IDR (LT/ST) - BBB-/F3
Local Currency IDR (LT/ST) - BBB-/F3
National Scale (LT/ST) AA+(bra)/F1+(bra) -
Foreign Currency Senior Unsecured MTN (LT/ST) - Baa2/P-2
Foreign Currency Deposits (LT/ST) - Baa2/P-2
Local Currency Deposits (LT/ST) Aaa.br/BR-1 Baa2/P-2
Foreign Currency (LT/ST) - BBB-/A-3
Local Currency (LT/ST) - BBB-/A-3
National Scale (LT/ST) brAAA/brA-1 -
Note: LT = Long-Term; ST= Short-Term
Standard & Poor´s
Moody´s
Fitch Ratings
RATING AGENCIES National International
6. Awards and Acknowledgements
We present below the main awards and acknowledgements received by Banco Votorantim and its
subsidiaries in 1H12:
“Top 10 Assets”, classification of Votorantim Asset Management among the top 10
managers for institutional investors, edition of March 2012, of Investidor Institucional
magazine;
“Fundos Excelentes”, or Excellent Funds of the ranking ―Os Melhores Fundos para
Institucionais‖ (Best Funds for Institutional Investors), awarded to eight funds of
Votorantim Asset Management by Valor Investe magazine, in partnership with Luz
Engenharia Financeira, for excellency and consistency in performance;
“20 Empresas Mais Admiradas pelos RHs” (20 Companies Most Admired by HR),
“RHs Mais Admirados do Brasil” (Most Admired HRs in Brazil) and “10 Melhores
Empresas em IDHO - Indicador de Desenvolvimento Humano Organizacional” (10
Best Companies in OHDI – Organizational Human Development Indicator), awards
granted to Banco Votorantim by Gestão & RH Editora;
“10 Melhores Empresas em Cidadania Corporativa 2012” (10 Best Companies in
Corporate Citizenship 2012), award granted to BV Financeira by Gestão & RH Editora.
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7. Corporate Governance
Banco Votorantim’s governance is divided between the two shareholders, with a model under
continuous improvement to achieve more robustness and transparency, ensuring agility in
decision-making processes — a strong characteristic of Banco Votorantim.
Governance is organized in two complementary levels of authority: the first is composed of the
Board of Directors and its Advisory Committees (Finance, Products and Marketing, and
Compensation and Human Resources), and involves the shareholders; the second is composed of
the Executive Committee and its Operational Committees involving the executive leaders of Banco
Votorantim.
In addition, Banco Votorantim has a Fiscal Council, which is an independent body created to
supervise the administrative management acts of Banco Votorantim, and an Audit Committee,
which provides advice to the Board of Directors.
As part of its Change Agenda, as of Sept.11, Banco Votorantim has been promoting the integration
of corporate areas, such as Credit, Finance and Legal, and has also created two committees that
have contributed towards an efficiency increase and improvement of the institution’s governance:
Cost Analysis and Approval of Expenses Committee (Comitê de Análise e Aprovação
de Despesas - CAAD): formed by corporate executives, CAAD’s duties include helping
management in the implementation of initiatives targeting greater efficiency in the
management of costs and expenses; and
Operational Review Committee (Comitê de Revisão Operacional - CRO): composed
of representatives of the shareholders, the CRO is a temporary committee that has worked
together with the teams of BV Financeira in the identification and implementation of
operational and internal control improvements.
In 1H12 Banco Votorantim continued with the process of improving its governance within the
establishment of the ―Compensation and Human Resources‖ committee to provide advice to the
Board of Directors. This new committee contains representatives of both the shareholders, besides
the CEO of Banco Votorantim and an independent member, who meet on a quarterly basis to keep
track of and decide on matters related to the Director´s Compensation Policy and HR practices
within the jurisdiction of the Board of Directors. Also in 1H12, Banco Votorantim hired several
professionals with market experience in areas such as Credit and Collection of Consumer Finance,
Wholesale bank, BV Empresas (segment of mid-sized companies), and others to join its staff of
executives.
8. People Management
With the objective of supporting the strategy, as all of the actions that will steer the organization
towards sustainable growth, Banco Votorantim maintains three important fronts in the sphere of
Human Resources:
Workforce Planning and Development: map actions to equip, adapt, train and qualify
the employees for the organization’s strategic guidelines;
Talent Management: monitor the individual performance of employees, identify talents,
create retention mechanisms, and solidify them by means of the succession program;
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Culture and Climate: ensure that the work environment is consistent with the
organization’s culture, values and strategic guidelines.
These fronts enabled the structuring of actions and products aligned to the company's needs.
Initiatives were defined for this purpose that will support the institution’s guidelines, such as:
Attraction and retention: strengthen the Banco Votorantim brand, bringing
professionals with competitive differentials and providing opportunities for professional
growth;
Development: fulfill the organization’s need and at the same time train the employees in
the execution of their work, favoring personal and professional growth, by means of the
Business Schools, of the Leadership School and executive coaching programs;
Culture and Climate: ensure that the work environment is consistent with the
organization’s culture, values and strategic guidelines, one of the top priority conditions
for the company’s constant presence. The organizational climate is monitored
continuously by means of the ―Falando Francamente‖ (Speaking Frankly) program.
Hence, it is possible to objectively evaluate the employees’ perception of the policies and
practices, spawning proactive performance for the improvement of the organizational
climate, besides favoring the engagement and satisfaction of all the employees.
Banco Votorantim’s current strategy aims to consolidate its position as one of the three main
national private banks recognized for guidance in serving its clients and partners in a sustainable
manner and with long-term relationships, leveraging synergies with Banco do Brasil. In order to
enable all the employees to work in synergy with the organization’s new guidelines, it is crucial
for each one to know their role in the organization. The new Performance and Compensation
Management models were disclosed in 1H12 to all the organization with the above objective in
mind.
The new Performance Management model involves: annual cycle, quantitative appraisal with
contracting of targets and qualitative appraisal that translate the desirable behaviors and attitudes
for all the employees, since the manner in which results are obtained is just as important as their
obtainment.
Banco Votorantim believes that the success and constant presence of an organization are only
possible when there is a work team prepared for future challenges and that acts in harmony with
the company’s objectives. All these initiatives, together with the new Performance and
Compensation models, are aimed at maintaining people management that is coherent with the
company’s values, vision and mission.
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9. Sustainablility
The Sustainability concept is intrinsically linked to the institution’s business practices and to the
daily routine of its operations. Banco Votorantim aims to establish ethical, transparent and lasting
relations across all areas of activity, respecting the economic, social, environmental and human
aspects in its processes.
The Sustainability Committee, formed in 2011, defined the guidelines for the insertion of
Sustainability across the organization, according to the Corporate Sustainability Policy in force.
For Banco Votorantim to achieve these goals, the performance of the Sustainability area is based
on three main pillars: Business Sustainability, Conscious Consumption and Social Investment.
Business Sustainability
Sustainability and its incorporation into the business strategy is a global movement that is
becoming increasingly important in the Brazilian market. As regards the inclusion of Business
Sustainability, the structuring of a tool for socio-environmental risk analysis was prioritized as
the source of information to justify the granting of corporate loans.
Votorantim Asset Management (VAM), a subsidiary of Banco Votorantim, became a signatory of
PRI (Principles of Responsible Investment) in May 2012. This fact serves to reinforce its
commitment of incorporating corporate governance, social and environmental criteria in the asset
analysis and management processes.
Conscious Consumption
Internal campaigns were held in 1H12 to disseminate concepts relating to sustainability and
conscious consumption, making use of several media. The employees’ awareness of the
Conscious Consumption concepts is directly related to the principles established by the Green
Protocol (―Protocolo Verde‖), of which Banco Votorantim has been a signatory since 2009.
Social Investment
According to its Social Investment Policy, Banco Votorantim provides funding incentives for
cultural, sports and social projects developed by widely recognized third-sector institutions,
prioritizing projects designed for the democratization of access to culture and sports and the
fulfillment of demands of children and adolescents.
In the cultural area, funds were earmarked for projects developed by MAM, OSESP, Mozarteum
and Instituto Inhotim. These projects contemplate cultural diffusion, valuing popular
demonstrations and the extent of the project’s social impact.
In the social area, funds were set aside for Municipal Funds for Children and Adolescents, in
Itabuna, Maceió, Ouro Preto, Rio Branco and São José do Rio Preto, which present demands in
the area of childhood and adolescence aligned to the guidelines of ECA – Child and Adolescent
Statute, and that rely on branches of Banco Votorantim and/or of its subsidiaries.
In the area of sports, funding incentives were provided for the Instituto Reação project, which
offers sports and educational activities to children and adolescents in a situation of social
vulnerability, in the city of Rio de Janeiro.
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10. Acknowledgement
Banco Votorantim management is grateful to its clients and shareholders for their trust and to the
employees for their continuous effort and dedication.
São Paulo, August 02, 2012
Management
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Independent auditors' report on financial statements
To
The Board of Directors and Shareholders of
Banco Votorantim S.A.
São Paulo - SP
We have examined the individual and consolidated financial statements of Banco Votorantim
S.A. ("Institution") referred as ―Bank‖ and ―Consolidated‖, respectively, which comprise the
balance sheet as of June 30, 2012 and the respective statements of income, changes in
shareholders’ equity and cash flows for the semester then ended and a summary of significant
accounting practices and other accompanying notes to the financial statements.
Responsibility of management for the financial statements
The Bank's management is responsible for the preparation and adequate presentation of the
individual and consolidated financial statements in accordance with the accounting practices
adopted in Brazil, applicable to institutions authorized to operate by the Central Bank of Brazil,
and the internal controls it deemed necessary to enable the preparation of these financial
statements free of significant distortions, regardless of whether the latter were caused by fraud or
error.
Responsibility of the Independent auditors
Our responsibility is to express an opinion on these financial statements based on our auditing,
carried out in accordance with the Brazilian auditing and international accounting standards.
These standards require the fulfillment of ethical requirements by the auditors and that the audit
be planned and performed for the purpose of obtaining reasonable assurance that the financial
statements are free of significant distortions.
An audit involves the carrying out of procedures selected to obtain evidence related to the
amounts and disclosures presented in the financial statements. The procedures selected depend on
the auditor's judgment, including an assessment of the risks of significant distortion in the
financial statements, regardless of whether the latter are caused by fraud or error. In this risk
assessment, the auditor considers relevant internal controls for the preparation and adequate
presentation of the financial statements of the Bank, to plan the audit procedures that are
appropriate in the circumstances, but not for purposes of expressing an opinion on the efficacy of
these internal controls of the Bank. An audit also includes the evaluation of the adequacy of
adopted accounting practices and reasonability of accounting estimates made by Management, as
well as an assessment of the presentation of financial statements taken as a whole.
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We believe that the audit evidence obtained is sufficient and appropriate to support our
opinion.
An opinion on the individual and consolidated financial statements
In our opinion, the individual and consolidated aforementioned financial statements present
fairly, in all material respects, the financial position of Banco Votorantim S.A. at June 30, 2012,
the performance of its operations and its cash flows, for the semester then ended, in accordance
with the accounting practices adopted in Brazil, applicable to institutions authorized to operate by
the Central Bank of Brazil.
Other issues - Statements of added value
We have also reviewed the individual and consolidated statement of added value (DVA),
prepared directly under the responsibility of the Institution for the semester ended June 30, 2012,
whose presentation has been carried out in a spontaneous manner by the Institution. These
statements were submitted to the same audit procedures previously described and, in our opinion,
these supplementary statements are adequately presented, in all material respects, in relation to
the basic financial statements taken as a whole.
São Paulo, August 2, 2012
KPMG Auditores Independentes
CRC 2SP014428/O-6
Original report in Portuguese signed by
Alberto Spilborghs Neto
Accountant CRC 1SP167455/O-0
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Banco Votorantim S.A.
Balance sheetsJune 30, 2012 and 2011
(In thousands of Reais)
Bank Consolidated Bank Consolidated
Assets 2012 2011 2012 2011 Liabilities 2012 2011 2012 2011
Current assets 89,046,668 88,282,753 59,115,305 73,825,287 Current liabilities 87,344,537 71,712,951 71,875,504 74,979,474
Cash and cash equivalents 90,451 62,452 162,873 151,625 Deposits 18,566,196 19,337,722 18,334,321 19,134,161
Interbank funds applied 42,925,411 35,158,994 14,157,961 16,680,548 Demand deposits 475,046 353,229 479,795 374,282
Interbank deposits 2,468,676 1,333,190 2,243,302 1,130,510
Money market repurchase commitments 16,972,110 14,856,571 12,369,519 14,856,571 Time deposits 15,622,474 17,651,196 15,611,224 17,629,262
Interbank deposits 25,757,552 20,177,468 1,580,257 1,699,022 Other deposits - 107 - 107
Foreign currency investments 195,749 124,955 208,185 124,955
Money market borrowings 34,309,910 37,124,674 28,660,349 35,612,070
Securities andSecurities and
derivative financial instruments 31,890,577 35,728,429 10,744,443 19,586,785 Own portfolio 20,486,944 26,096,351 20,489,520 24,994,865
Third-party portfolio 13,278,747 9,276,880 7,626,610 8,865,762
Own portfolio 9,377,389 5,613,731 3,903,404 8,361,183 Free portfolio 544,219 1,751,443 544,219 1,751,443
Subject to repurchase agreements 19,714,107 26,236,672 4,417,299 7,372,660
Derivative financial instruments 1,754,565 815,904 1,332,424 751,409 Acceptances and endorsements 8,425,579 901,640 11,258,791 2,148,045
Subject to guarantees provided 1,044,516 3,062,122 1,091,316 3,101,533
Funds from housing bonds, mortgage notes, letters of credit and alike 6,972,101 473,952 6,972,101 473,952
Interbank accounts/relations 3,013,454 6,113,585 3,013,454 6,113,585 Debenture funds - - 2,833,212 1,478,978
Securities issued abroad 1,453,478 427,688 1,453,478 195,115
Payments and receivables to be settled 544 1,494 544 1,494
Brazilian Central Bank deposits 2,835,795 6,048,845 2,835,795 6,048,845 Interbank accounts/relations 5,532 11,518 5,532 11,518
Interbank onlendings 176,199 61,119 176,199 61,119
Correspondent 916 2,127 916 2,127 Payments and receivables to be settled 5,532 11,518 5,532 11,518
Loans 9,270,887 8,679,297 24,013,217 23,482,252 Interbranch accounts 124,564 113,618 124,588 113,621
Public sector 27,590 11,009 27,590 11,009 Third-party funds in transit 124,564 113,618 124,564 113,618
Private sector 9,567,933 8,778,872 26,411,236 24,429,429 Internal funds transfer - - 24 3
Loan operations subject to assignment - - 41,311 -
Borrowings and onlendings 6,167,786 6,976,970 6,169,341 6,977,821
Allowance for loan losses (324,636) (110,584) (2,466,920) (958,186)
Borrowings in local currency - Other institutions 3,885 10,076 3,885 10,076
Leases - - 2,008,437 3,208,584 Foreigns loans 3,574,832 3,823,217 3,574,832 3,823,217
Local onlendings - Official institutions 2,589,069 3,143,677 2,590,624 3,144,528
Lease receivable - Private sector - - 3,196,343 4,542,013 National Treasury 107,032 60,926 107,032 60,926
Unearned income from leasing - - (1,083,625) (1,251,178) BNDES 1,676,895 1,680,911 1,676,895 1,680,911
FINAME 805,142 1,401,840 806,697 1,402,691
Allowance for loan losses - - (104,281) (82,251)
Derivative financial instruments 17,700,374 4,426,575 2,110,731 5,260,500
Other receivables 1,791,072 2,478,276 4,743,308 3,796,856
Derivative financial instruments 17,700,374 4,426,575 2,110,731 5,260,500
Foreign exchange portfolio 1,284,999 1,739,919 1,284,999 1,739,919
Income receivable 43,704 112,710 65,711 131,034 Other liabilities 2,044,596 2,820,234 5,211,851 5,721,738
Securities Clearing Accounts 129,812 98,988 302,274 213,203
Other 383,850 573,388 3,141,617 1,759,429 Collection and levy of taxes and alike 6,324 11,404 12,864 34,278
Foreign exchange portfolio 286,352 1,599,349 286,352 1,599,349
Allowance for loan losses (51,293) (46,729) (51,293) (46,729) Social and statutory 60,192 207,689 114,489 323,994
Tax and social security 120,872 806,593 1,525,891 2,265,513
Other assets 64,816 61,720 271,612 805,052 Securities Clearing Accounts 19,925 88,592 211,885 180,189
Subordinated debts 1,396,182 - 1,396,182 -
Other assets 327 - 133,935 90,271 Other 154,749 106,607 1,664,188 1,318,415
Prepaid expenses 64,489 61,720 137,677 714,781
Long-term liabilities 33,736,491 51,812,583 32,405,394 35,465,642
Long-term assets 36,967,336 40,767,541 54,106,564 45,124,379
Deposits 4,727,582 4,565,084 4,634,226 4,498,250
Interbank funds applied 13,809,216 19,085,059 526,750 382,820
Interbank deposits 1,344,143 97,270 1,261,559 30,436
Interbank deposits 13,809,216 19,085,059 526,750 382,820 Time deposits 3,383,439 4,467,814 3,372,667 4,467,814
Securities and Money market borrowings 3,623,787 4,319,205 3,629,051 4,319,289
derivative financial instruments 12,620,447 10,305,895 20,260,001 10,190,727
Own portfolio 3,584,184 4,271,409 3,589,448 4,271,493
Own portfolio 5,261,891 4,132,537 7,897,734 4,132,537 Free portfolio 39,603 47,796 39,603 47,796
Subject to repurchase agreements 4,112,057 3,411,415 8,289,660 3,411,415
Derivative financial instruments 1,177,658 1,009,986 828,802 894,818 Acceptances and endorsements 10,167,685 11,765,324 10,168,115 13,527,134
Subject to guarantees provided 2,068,841 1,751,957 3,243,805 1,751,957
Funds from housing bonds, mortgage notes, letters of credit and alike 5,253,647 6,816,633 5,253,647 6,816,633
Loans 9,334,170 10,525,505 27,049,188 31,361,530 Debenture funds - - 430 1,529,237
Securities issued abroad 4,914,038 4,948,691 4,914,038 5,181,264
Public sector 25,329 50,658 25,329 50,658
Private sector 9,747,250 10,722,286 28,706,550 32,081,952 Borrowings and onlendings 4,829,613 5,698,632 4,847,204 5,721,618
Loan operations subject to assignment - - 55,460 -
Borrowings in local currency - Other institutions 9,451 - 9,451 -
Allowance for loan losses (438,409) (247,439) (1,738,151) (771,080) Foreigns loans 1,804,048 1,727,895 1,804,048 1,727,895
Local onlendings - Official institutions 3,016,114 3,970,737 3,033,705 3,993,723
Lease operations - - 228,319 213,357 National Treasury 20,781 7,500 20,781 7,500
BNDES 1,328,919 2,165,275 1,328,919 2,165,275
Lease receivable - Private sector - - 1,408,119 2,073,795 FINAME 1,666,414 1,797,962 1,684,005 1,820,948
Unearned income from leasing - - (1,080,754) (1,758,683)
Allowance for lease losses - - (99,046) (101,755) Derivative financial instruments 3,174,590 19,765,160 736,048 1,075,943
Derivative financial instruments 3,174,590 19,765,160 736,048 1,075,943
Other receivables 1,030,838 596,802 4,785,719 2,395,212
Other liabilities 7,213,234 5,699,178 8,390,750 6,323,408
Credits for sureties and guarantees paid - 672 - 672
Securities Clearing Accounts 8,253 - 8,253 - Tax and social security 783,399 18,950 1,801,849 531,431
Other 1,022,585 596,130 4,777,466 2,394,540 Subordinated debts 6,429,835 5,680,228 6,429,835 5,680,228
Other - - 159,066 111,749
Other assets 172,665 254,280 1,256,587 580,733
Deferred income 25,759 38,872 25,759 38,872
Other assets 4,402 3,125 4,402 3,125
Prepaid expenses 168,263 251,155 1,252,185 577,608 Interest of non-controlling shareholders - - - 59
Fixed assets 4,396,594 3,219,659 388,599 239,928 Shareholders' equity 9,303,811 8,705,547 9,303,811 8,705,547
Investments 4,309,532 3,134,547 209,002 65,446 Capital
Domestic 7,026,841 4,026,841 7,026,841 4,026,841
Ownership interest in Brazilian subsidiaries and abroad 4,283,254 3,109,160 140,030 432 Capital reserves 585,104 585,104 585,104 585,104
Other investments 37,312 35,685 111,413 105,071 Profit reserves 2,504,820 3,861,317 2,504,820 3,861,317
Provision for losses (11,034) (10,298) (42,441) (40,057) Equity evaluation adjustments 319,208 (152,882) 319,208 (152,882)
Retained earnings (losses) (1,132,162) 385,167 (1,132,162) 385,167
Fixed assets for use 33,290 39,377 103,565 109,339
Other property for use 80,473 79,219 200,606 185,385
Accumulated depreciation (47,183) (39,842) (97,041) (76,046)
Intangible 25,423 14,803 47,359 32,338
Intangible assets 25,496 14,803 57,056 37,263
Accumulated amortization (73) - (9,697) (4,925)
Deferred assets 28,349 30,932 28,673 32,805
Organizational and expansion expenses 35,140 35,126 43,168 43,192
Accumulated amortization (6,791) (4,194) (14,495) (10,387)
Total assets 130,410,598 132,269,953 113,610,468 119,189,594 Total liabilities 130,410,598 132,269,953 113,610,468 119,189,594
See the accompanying notes to the financial statements.
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Banco Votorantim S.A.
Statements of incomeSemesters ended June 30, 2012 and 2011(In thousands of Reais, except net income / (loss) for the period per thousand shares)
2012 2011 2012 2011
Income from financial intermediation 5,744,269 4,780,477 7,331,755 6,797,009
Loans 1,286,601 1,030,210 4,819,928 4,959,533
Leases - - 211,518 280,680
Securities 5,046,342 5,242,787 2,467,012 2,308,984
Derivative financial instruments (860,693) (1,834,781) (439,773) (1,094,427)
Foreign exchange operations 87,025 15,344 87,008 15,322
Compulsory deposits 184,994 326,917 184,994 326,917
Sale or transfer operation from financial assets - - 1,068 -
Expenses from financial intermediation (5,276,680) (3,878,202) (8,031,398) (5,049,292)
Money market borrowings (4,537,925) (3,751,221) (4,517,077) (3,794,258)
Borrowings and onlendings (488,527) 14,145 (489,276) 13,399
Allowance for loan losses (250,228) (141,126) (3,025,045) (1,268,433)
Net income from financial operations 467,589 902,275 (699,643) 1,747,717
Other operating income (expenses) (1,546,758) (210,508) (1,107,885) (923,178)
Fee income 139,326 112,557 244,363 225,555
Banking fees 1,476 4,778 247,889 401,876
Personnel expenses (181,815) (160,731) (478,822) (414,900)
Other administrative expenses (120,954) (143,520) (734,052) (696,994)
Tax expenses (58,411) (100,807) (222,006) (330,282)
Equity in income of subsidiaries (1,373,980) 109,013 30,145 (170)
Other operational income 58,473 16,723 97,521 45,611
Other operational expenses (10,873) (48,521) (292,923) (153,874)
Operating income (1,079,169) 691,767 (1,807,528) 824,539
Non-operating income (loss) 1,531 1,983 (72,378) 17,002
Income (loss) before taxation and profit sharing (1,077,638) 693,750 (1,879,906) 841,541
Income and social contribution taxes 20,121 (68,171) 954,724 (110,574)
Provision for income tax (2,572) (3,540) (242,530) 43,694
Provision for social contribution payable 37 (6,004) (145,085) (105,230)
Deferred tax assets 22,656 (58,627) 1,342,339 (49,038)
Profit sharing (74,645) (84,994) (206,980) (190,381)
Net income (loss) before interest of
non-controlling shareholders (1,132,162) 540,585 (1,132,162) 540,586
Interest of non-controlling shareholders - - - (1)
Net income (loss) for the period (1,132,162) 540,585 (1,132,162) 540,585
Net income / (loss) per thousand shares - R$ (10.89) 6.63
See the accompanying notes to the financial statements.
Bank Consolidated
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Banco Votorantim S.A.
Statements of changes in shareholders' equitySemesters ended June 30, 2012 and 2011
(In thousands of Reais)
Realized Capital Capital Equity evaluation
capital increase reserves Legal Expansion adjustments earnings (loss) Total
Balances at December 31, 2010 3,994,896 31,945 585,104 394,583 3,439,705 (57,356) - 8,388,877
Capital increase 31,945 (31,945) - - - - - -
Equity evaluation adjustments - - - - - (95,526) - (95,526)
Net income for the period - - - - - - 540,585 540,585
Distribution of net income
Legal reserve - - - 27,029 - - (27,029) -
Dividends - - - - - - (128,389) (128,389)
Balances at June 30, 2011 4,026,841 - 585,104 421,612 3,439,705 (152,882) 385,167 8,705,547
Balances at December 31, 2011 4,026,841 1,000,000 585,104 421,612 2,083,208 (75,346) - 8,041,419
Capital increase 3,000,000 (1,000,000) - - - - - 2,000,000
Equity evaluation adjustments - - - - - 394,554 - 394,554
Loss for the period - - - - - - (1,132,162) (1,132,162)
Balances at June 30, 2012 7,026,841 - 585,104 421,612 2,083,208 319,208 (1,132,162) 9,303,811
See the accompanying notes to the financial statements.
Capital
Retained
Profit reserves
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Banco Votorantim S.A.
Statements of cash flows
Semesters ended June 30, 2012 and 2011
(In thousands of Reais)
Consolidated
2012 2011 2012 2011
Cash flows originating from operations
Net income (loss) (1,132,162) 540,585 (1,132,162) 540,585
Adjustments to net income (loss): 1,654,072 76,984 3,221,960 1,379,490
Depreciation and amortization 5,538 5,232 15,424 22,179
Equity income (loss) 1,373,980 (109,013) (30,145) 170
Allowance for doubtful accounts 250,228 141,126 3,025,045 1,268,433
Provision for contingent liabilities/legal obligations 26,021 41,757 218,825 117,343
Non-operating income (loss) (1,695) (2,118) (7,189) (28,635)
Equity variations
Interbank investments (4,249,692) (4,756,654) (1,988,524) (340,944)
Trading securities and derivative financial instruments (6,432,189) 814,605 (1,843,496) 1,620,433
Interbank accounts and investments 3,026,822 289,934 3,026,628 289,934
Loans/leases 547,753 (516,249) (1,477,389) (4,361,817)
Other receivables (464,403) (809,162) (2,948,780) (1,083,816)
Other assets 32,434 (292,877) (20,325) (744,360)
Deposits (2,594,764) 43,747 (2,656,096) 33,955
Money market repurchase commitments 4,408,146 5,768,322 (1,245,595) 5,551,439
Acceptances and endorsements 3,857,768 5,382,400 3,560,262 5,377,048
Liabilities from borrowings and repass (456,872) 1,449,586 (461,817) 1,444,959
Other liabilities 290,665 (92,474) 623,366 (251,176)
Deferred income (16,107) (2,888) (16,107) (2,888)
Cash generated (consumed) by operations (1,528,529) 7,895,859 (3,358,075) 9,452,842
Cash flows from financing activities
Capital increase 2,000,000 - 2,000,000 -
Dividends paid - (128,301) - (128,301)
Interest of non-controlling shareholders - - (10) -
Subordinated debts 428,707 227,041 428,707 (1,224,034)
Net cash generated (consumed) in financing activities 2,428,707 98,740 2,428,697 (1,352,335)
Cash flows from investment activities
Securities available for sale (1,229,382) (6,437,713) (2,590,388) (6,415,016)
Sale of fixed assets for use 2,564 23 2,787 2,748
Disposal of deferred assets - 3 - 586
Disposal of intangible assets 1,453 604 2,812 804
Investment acquisition (3,260,016) 69,707 (109,605) (518)
Acquisition of fixed assets for use (2,060) (1,394) (7,005) (34,111)
Investments in intangible assets (6,899) (8,372) (12,357) (14,317)
Dividends received 8,079 80,835 8,079 80,835
Net cash generated (consumed) in investment activities (4,486,261) (6,296,307) (2,705,677) (6,378,989)
Net variation of cash and cash equivalents (3,586,083) 1,698,292 (3,635,055) 1,721,518
Cash and cash equivalents at the beginning of the period 5,444,251 816,961 5,594,048 906,219
Cash and cash equivalents at the end of the period 1,858,168 2,515,253 1,958,993 2,627,737
Increase (decrease) in cash and cash equivalents (3,586,083) 1,698,292 (3,635,055) 1,721,518
See the accompanying notes to the financial statements.
Bank
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Banco Votorantim S.A.
Statements of added value
Semesters ended June 30, 2012 and 2011
(In thousands of Reais)
2012 2011 2012 2011
Revenues 5,683,974 4,726,871 4,531,182 6,064,746
Income from financial intermediation 5,744,269 4,780,477 7,331,755 6,797,009
Revenue from services rendered and bank fees 140,802 117,335 492,252 627,431
Allowance for doubtful accounts (250,228) (141,126) (3,025,045) (1,268,433)
Other income / (expenses) 47,600 (31,798) (195,402) (108,263)
Non-operating income (loss) 1,531 1,983 (72,378) 17,002
Financial intermediation expenses (5,026,452) (3,737,076) (5,006,353) (3,780,859)
Inputs acquired from third parties (94,241) (117,868) (652,887) (609,013)
Materials, energy and other (1,440) (1,605) (3,822) (5,505)
Outsourced services (1,989) (1,869) (6,170) (8,583)
Others (90,812) (114,394) (642,895) (594,925)
Communications (4,824) (6,021) (38,541) (47,370)
Maintenance and preservation of assets (2,361) (2,318) (7,253) (9,268)
Data processing (24,497) (32,840) (80,112) (72,767)
Promotions and public relations (1,706) (7,051) (2,861) (10,322)
Publications (431) (632) (868) (737)
Advertising and publicity (263) (1,140) (1,993) (4,227)
Services of the financial system (18,348) (16,781) (87,893) (75,222)
Specialized technical services (25,402) (32,904) (220,037) (202,361)
Transportation (2,336) (2,367) (9,251) (11,683)
Others (10,644) (12,340) (194,086) (160,968)
Gross added value 563,281 871,927 (1,128,058) 1,674,874
Amortization/depreciation expenses (5,538) (5,232) (15,424) (22,179)
Net added value produced by the Entity 557,743 866,695 (1,143,482) 1,652,695
Added value received as transfer (1,373,980) 109,013 30,145 (170)
Equity in income of associated companies and subsidiaries (1,373,980) 109,013 30,145 (170)
Added value payable (816,237) 975,708 (1,113,337) 1,652,525
Total added value paid (816,237) 975,708 (1,113,337) 1,652,525
Personnel 228,387 219,235 622,506 539,652
Salaries and fees 113,761 106,648 298,729 263,962
Profit sharing 74,645 84,994 206,980 190,381
Benefits and training programs 30,254 18,359 88,960 61,394
FGTS 9,717 9,165 27,679 23,799
Others 10 69 158 116
Taxes, rates and contributions 66,363 195,468 (669,422) 506,485
INSS on salaries 28,073 26,490 63,296 65,629
Tax expenses (excepting income and social contribution taxes) 58,411 100,807 222,006 330,282
Income tax / social contribution (20,121) 68,171 (954,724) 110,574
Third-party capital remuneration 21,175 20,420 65,741 65,802
Rentals 21,175 20,420 65,741 65,802
Remuneration of own capital (1,132,162) 540,585 (1,132,162) 540,586
Dividends - 128,389 - 128,389
Retained earnings (loss) (1,132,162) 412,196 (1,132,162) 412,196
Minority interests in retained earnings - - - 1
See the accompanying notes to the financial statements.
Bank Consolidated
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Banco Votorantim S.A.
Notes to the financial statements
June 30, 2012 and 2011
(In thousands of Reais)
1 Operations
Banco Votorantim S.A. is a closed corporation that, operating in the form of a Multiple
Bank, develops banking activities in authorized categories, by means of its commercial,
financing and foreign exchange operation portfolios.
Through its subsidiaries, the Company also operates in various other categories, with an
emphasis on the activities of consumer credit, leasing, administration of investment funds
and credit cards.
Transactions are conducted in the context of a set of institutions that operate in an integrated
manner in the financial market, including in relation to risk management, and certain transactions
have the joint participation or the intermediation of member institutions, which form an integral
part of the financial system. The benefits of the services provided between these institutions and
the costs of the operational and administrative structure, are absorbed based on the practicality
and reasonableness of the allocation of benefits and costs, jointly or individually.
2 Presentation of financial statements
The financial statements were prepared on a basis of the accounting guidelines derived
from Corporation Law and rules and instructions of the National Monetary Council
(CMN).
Law 11638/07 was enacted on December 28, 2007, amended by Law 11941/09, which
amended Corporate Law regarding accounting practices adopted in Brazil. Although said
Law is already effective, some changes it introduced depend on normatization by the
National Monetary Council. The amendments approved by CMN were:
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Procedures to measure the recoverable value of assets; Elaboration of the statement of cash flows in place of the statement of changes in financial
position;
The disclosure of related party information in notes to the financial statements;
Share based payment;
Definition of criteria for selecting, changing, and disclosing accounting policies, for changes in accounting estimates and for correcting errors;
Subsequent events; and
Procedures for the recognition, measurement and disclosure of provisions, contingent assets
and liabilities;
The following statement was also applied, which is not in conflict with the rules of the Central
Bank of Brazil, as provided for in the prevailing regulations:
Statement of added value.
The consolidated financial statements include Banco Votorantim and the direct subsidiaries in the
country and abroad, listed below:
Ownership interest
06/30/2012 06/30/201
1
Direct subsidiaries in Brazil
Votorantim Corretora de Títulos e Valores Mob. Ltda. 99.99% 99.98%
Votorantim Asset Management Distrib. de TVM Ltda. 99.99% 99.99%
BV Financeira S.A. Crédito, Financiamento e
Investimento
100% 100%
BV Leasing Arrendamento Mercantil S.A. 100% 99.99%
Direct subsidiaries overseas
Votorantim Bank Limited 100% 100%
Banco Votorantim Securities Inc. 100% 100%
Banco Votorantim Securities (UK) Limited 100% -
Interest in Corporations reflected in the above table consists in common shares only.
The consolidated financial statements include Banco Votorantim and the direct
subsidiaries in the country and abroad, listed below:
The main procedures adopted in the consolidation process of the financial statements
from the Financial conglomerate are:
a. Elimination of the balances of accounts of assets, liabilities, income and expenses
between parent company and subsidiary companies;
b. Elimination of investments in the subsidiaries’ capital, reserves and retained earnings;
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c. Presentation of lease operations under the financial method, reclassifying "Lease
property" to "Lease operations", net of the residual value received in advance;
d. The book balances of the overseas direct subsidiaries, which are prepared according
to international accounting standards, were translated into reais, using the US dollar
quotation on the closing date of the period, and were adjusted to accounting practices
described in Note 4;
e. The exchange variation of the operations of the branch and of the subsidiary
companies abroad was distributed on the lines of the statement of income, according
to the respective assets and liabilities that originated them, and
f. The consolidation process does not include the consolidation of the exclusive
investment funds and of the credit receivable investment funds in conformity with the
consolidation rules established by the National Monetary Council (CMN).
Income statement balances as of June 30, 2011 were reclassified to permit comparability
of financial statements, as a result of the change in internal aggregation policies of
revenue and expense accounts, in order to provide users with a better understanding of
the Company's results. The key reclassifications were:
a. Balances previously presented under caption "Income from interest in associates and
subsidiaries", in the amount of R$43,512, that were substantially reclassified to
caption "Other operational expenses".
Bank
Previous
disclosure
Reclassification
Balance
reclassified
Securities 5,245,316 (2,529) 5,242,787
Derivative financial instruments (1,822,454) (12,327) (1,834,781)
Other administrative expenses (158,376) 14,856 (143,520)
Equity in income of associated companies and subsidiaries 65,501 43,512 109,013
Other operational expenses (5,009) (43,512) (48,521)
b. Balances previously presented under caption "Other administrative expenses", in the
amount of R$15,011, that were substantially reclassified to captions "Income from
securities transactions" in the amount of R$2,684 and "Derivative financial
instruments" in the amount of R$12,327.
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Consolidated
Previous
disclosure
Reclassification
Balance
reclassified
Loans 4,960,874 (1,341) 4,959,533
Securities 2,311,668 (2,684) 2.308.984
Derivative financial instruments (1,082,100) (12,327) (1,094,427)
Income from lease operations 279,339 1,341 280,680
Personnel expenses (414,909) 9 (414,900)
Other administrative expenses (712,005) 15,011 (696,994)
Nonoperational income (loss) 17,011 (9) 17,002
c. Balances previously presented under caption "Expenses from financial intermediation
expenses - Lease transactions" were reclassified to "Income from financial
intermediation - Leases".
The issuance of financial statements was given by Company's directors on August 02,
2012.
3 Risk management
Risk management policies comply with market best practices and are in line with the
guidelines defined by the CMN. They encompass Bank Institutions that comprise
Votorantim Financial Conglomerate (―Conglomerate‖).
The Company implemented policies and procedures and management system capable of
managing, evaluating and mitigating the risks inherent to its business, providing the
Management with a view of all risks.
Market risk
Market risk is defined as the possibility of losses arising from the variation in the market
value of positions held. Management is executed in a centralized manner, by an area that
maintains independence in relation to the front office.
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The basic procedures adopted for risk management are: (a) integrity of the pricing of
assets and derivatives; (b) evaluation of the risk using the Value at Risk methodology and
from simulating scenarios; and (c) accompanying the daily results using the back-test
methodology.
The Conglomerate undertakes operations that involve derivative financial instruments,
operating in organized and over the counter markets, in order to ensure the management
of market risk appropriate to its policy. These instruments are used for hedging positions
to meet the demand of counterparties and as a means of reversing the positions at times
of significant oscillations.
Operational risk
Operational risk is defined as loss risk, resulting from failure, weakness or inadequacy of
internal processes, people and systems or external events.
The basic principles considered by the Institution in operational risk management and
control comply with the current regulations of the Central Bank of Brazil and with best
market practices:
Involvement by Senior Management in global supervision and risk assumption by
means of established committees and commissions;
Mapping operating and systemic procedures, plotting existing controls and analysis
of inherent and residual risks;
Assessment of the potential financial impact and the likely occurrence of identified
risks;
Based on this assessment, operational risk exposure is defined according to entire
institution's standard risk matrix;
Recording of operating losses and maintenance of a structured database with
information related to the events;
Analysis, communication, and deployment of action plans to improve processes and
controls for mitigation of the risks incurred; and
Calculating Capital allocated to operational risk based on structured methods, based
on best market practices that are appropriate with regulatory requirements.
Credit risk
Credit risk consists of the possibility of occurring losses associated to a loan taker or a
counterpart's failure to fulfill their respective financial obligations under the agreed-upon
conditions, and losses associated to devaluation of a loan agreement due to deterioration
of the loan taker's risk classification, reduction in gains or compensations, advantages
granted in renegotiations and loan recovery costs.
As part of the credit risk management process, monitoring are conducted for policies,
rules, processes, established limits, in addition to risk analysis and submission to
appropriate levels and approving committees. The credit policy is formulated upon the
analysis of internal indicators in the portfolio, company pricing and evaluation processes,
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and of external factors related to the financial situation of the companies and the
economic situation of the country and foreign countries.
Conglomerate carries out credit risk assessments of their operations, determined by
means of judgment and statistical models. It is worth emphasizing that in the
identification of the deterioration of the loan portfolio quality, risk mitigation measures
are taken, such as reassessment of customer risk profile and industry analysis that
influence threshold management and management and control of guarantees.
Asset and liability management
The ALM Operating Committee, Risks and Capital is in charge of managing the
structural risks of interest rate, liquidity and exchange rate, as well as the capital
management, aiming to optimize the risk/return ratio and seeking greater efficiency when
composing the factors that impact the Solvability Index (Basel).
Basel Index 06/30/2012 06/30/2011
Capital (PR) 13,624,297 12,592,040
Level I 8,948,314 8,825,463
Shareholders' equity 9,303,811 8,705,547
Deferred Fixed Assets (36,289) (32,966)
Adjustment to market value (319,208) 152,882
Level II 4,675,983 3,766,577
Adjustment to market value 319,208 (152,882)
Subordinated debt elegible to capital 4,356,775 3,919,459
Capital requirement (PRE) 9,669,244 9,999,931
Credit risk 9,109,878 9,106,298
Market risk 239,420 530,641
Operational risk 319,946 362,992
Excess of capital 3,955,053 2,592,109
Basel Index (PR x 100 / (PRE / 0.11) 15.5% 13.9%
Fixed assets limit 06/30/2012 06/30/2011
Fixed assets limit 6,812,147 12,592,040
Value of fixed assets limit position 352,307 6,296,020
Value of margin or insufficiency 6,459,840 6,077,203
In compliance with the Brazilian Central Bank (BACEN) Circular no. 3477/09, Banco
Votorantim maintains additional information on its risk management process available in the
website: www.bancovotorantim.com.br/ir.
4 Significant accounting policies
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a. Statement of income
The Income and expenses are recorded according to the accrual basis and are
recorded by the pro rata criterion and calculated with a basis on the exponential
method, excepting those related to transactions with foreign countries, which are
calculated by the straight-line method.
b. Cash and cash equivalents
Cash and cash equivalents are represented by available funds, deposits, investments
in foreign currency with high liquidity and insignificant risk of changes in value and
money market borrowings – own portfolio, whose maturity of the operations on the
date of the investment is up to 90 days.
c. Interbank funds applied
Interbank funds applied are recorded at investment value, plus income accrued up to
the balance sheet date, calculated pro rata with a basis on the variation of the index
and on the agreed interest rates.
d. Securities
Securities are recorded by the amount effectively paid and classified in keeping with
Management's intention in three different categories:
i. Securities for trading - Acquired for the purpose of being actively and
frequently negotiated. Adjusted to its market value with the corresponding entry
to the results for the period;
ii. Securities available for sale - Securities that are not for trading or held to
maturity. Adjusted to its market value with the corresponding entry to a separate
account in shareholders' equity, reduced for any tax effects; and
iii. Securities held to maturity - Securities acquired with the intention and financial
capacity to hold them in the portfolio to maturity. Recorded at cost of acquisition,
plus income accrued in contra account to income (loss) for the period. In this
category, the securities are not adjusted to market value.
The market valuation methodology was established in compliance with consistent
and verifiable criteria, which take into consideration the average price of trading on
the date of calculation, or, in the absence thereof, the daily adjustment value of future
market transactions disclosed by Andima, BM&FBovespa and BACEN, or the
probable net realizable value obtained using interest rate future value curves,
exchange rates, price and currency indexes, besides any adjustments in the prices of
securities of low liquidity.
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Income accrued with securities, regardless of the category in which it is classified, is
calculated pro rata with a basis on the variation of the index and on the agreed interest
rates, by the exponential or straight-line method, up to the date of maturity or of the
final sale of the security, and is recognized directly in income for the period.
e. Derivative financial instruments
Derivative financial instruments are stated at its market value, with consistent and
verifiable criteria, considering the average price of trading on the date of calculation,
or, in the absence thereof, conventional and proven methodologies.
The derivative financial instruments are classified according to the intention of
Management, taking into account its purpose. Financial instruments used to offset, in
whole or in part, the risks arising from exposure to variations in asset or liability
market values are considered hedge instruments and are classified according to their
nature as:
i. Market risk hedge - adjustments to market value of the derivative financial
instruments classified in this category, as well as of the item hedged , are recorded
in counter entry to income (loss) for the period; and
ii. Cash flow hedge - Derivative financial instruments classified in this category
have their adjustments to market value recorded in the account in shareholders'
equity, reduced for any tax effects.
Derivative financial instruments that do not fulfill the hedge criteria have their
adjustments to market value recorded directly in income for the period.
For derivative financial instruments traded in association with funding operations,
both the derivative and the funding are accounted for by the intrinsic conditions
contracted, and are not adjusted by the market value.
f. Hedge accounting
The Conglomerate uses financial hedge derivatives to hedge its exposures to foreign
currency and interest rate changes.
Upon initial designation of the hedge, the Management formally documents the
relationship between the hedge instruments and the hedgeable instruments, including
the risk management goals and the strategy in the execution of the hedge transaction,
together with the methods that will be used to assess the effectiveness of the hedge
relationship, considering the conventional and well-established calculation methods.
The Management makes an assessment, both in the beginning of this relationship, and
continuously, to check if it is expected that these instruments are highly effective in
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the compensation of changes in fair value of respective items object of hedge during
the period for which is designed, and if real results are within the range of 80-125 per
cent, as provided in the regulation in force.
g. Loans and leases, advances on foreign exchange contracts, other receivables with loan
characteristics and allowance for possible loan losses
Loans and leases, advances on foreign exchange contracts and other receivables with loan
characteristics are classified according to Management's discernment with respect to the level
of risk, taking into consideration the economic panorama, past experience and specific risks
in relation to the operation, to obligators and guarantors, periods of delinquency, and
economic group, observing the parameters established by CMN, which requires the analysis
of the portfolio and its rating at nine levels, ranging from AA (minimum risk) to H
(maximum risk). In relation to the period of delinquency verified in retail operations with a
term of over thirty-six (36) months, a double count is permitted over intervals of delinquency
defined for the nine levels. Income from loans overdue for more than sixty (60) days,
regardless of their level of risk, are only recognized as income when effectively received.
Operations rated at level H continue in this status for 180 days, when they are written off
against the existing provision and controlled in memorandum accounts. Renegotiated
operations are maintained, at a minimum, at the same level at which they were rated, in
conformity with CMN Resolution no. 2682. Renegotiations of loans that had already been
written off against provision that were in memorandum accounts are rated as H and any gains
from renegotiation are recognized as income when effectively received.
Loans and leases that are subjects of hedges of derivative financial instruments are
stated at market value using consistent and verifiable criterion. The adjustments of
valuation at market value of these operations are recorded, when positive, in Other
Receivables - Sundry, and, when negative, in Other Liabilities - Sundry, in counter
entry to Income from derivative financial instruments and income from leases.
Loan assignment calculated recognizing income at the time of assignment carried out
up to December 31, 2011, irrespectively of retention or not of risk.
Beginning as of January 1, 2012, granted financial assets consider the transfer level
of risks and benefits of assets transferred to another entity:
when financial assets are transferred to another entity but risks and benefits
related to transferred assets are not substantially transferred, assets remain
recognized in the Company's balance sheet; and
when all risks and benefits related to the assets transferred to an entity are
substantially transferred, assets are written-off from the Company's balance
sheet.
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For the portfolio of loan assignments with recourse, Management established a provision for
losses, recorded under "Other liabilities - Sundry".
h. Prepaid expenses
Funds applied in prepayments, where the benefits or rendering of services are to occur
in future periods, are recorded. Prepaid expenses are recorded at cost and amortized
upon their realization.
i. Accounting estimates
Preparation of the financial statements requires that Management use its judgment in
determining and recording accounting estimates. The settlement of transactions
involving these estimates may result in significantly different amounts due to the lack
of precision inherent to the process of their determination. Material items subject to
these estimates and assumptions include the assessment of financial assets, liabilities
and derivative financial instruments at fair value, credit risk analysis to find the
allowance for loan losses, as well as to analyze contingent liabilities. The
Management reviews the estimates and assumptions on a regular basis.
The chief values recognized in the financial statements by means of estimates are
included in the following explanatory notes:
no. 8 – Securities;
no. 9 – Derivative financial instruments;
no. 12 – Loans; and
no. 49 – Contingent assets, liabilities and legal obligations.
j. Fixed assets
i. Investments in equity interest are valued using the equity method. Other
permanent investments are valued at cost of acquisition less allowance for losses,
when applicable;
ii. Property, plant and equipment stated at acquisition cost, less accumulated
depreciation. Depreciation of fixed assets is calculated using the straight line
method, based on the following annual rates according to the useful economic
lives of the assets, as follows:
Facilities, furniture and equipment in use - 10%;
Communication, security, and transportation system - 10% and
Data processing and similar systems - 20%.
iii. Deferred assets are stated at acquisition or formation cost less the respective
amortization, comprised basically of expenses on third-party property up to
September 30, 2008. Amortization is calculated by the straight-line method, based
on the period over which the benefit is generated. There were no acquisitions
during the period owing to the regulations in force. Losses on leases are
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amortized over the remaining useful life of the leased items and in compliance
with current regulation; and
iv. Intangible include rights relating to intangible assets that are intended for the
maintenance of the company or exercised for this purpose. Amortization is
calculated by the straight-line method, based on the period over which the benefit
is generated.
Non-financial assets are subject to evaluation of the recoverable value annually.
k. Taxes
Income tax was determined with a basis on the rate of 15%, plus a surcharge of 10%, and
social contribution was determined with a basis on the rate of 15%, both applicable to the
taxable income.
Deferred income tax is recognized at the subsidiary BV Leasing, calculated at the rate of
25%, on the adjustment of supervenience of depreciation of the lease portfolio.
The formation of tax credit of income and social contribution taxes is based on a technical
study evidencing the capacity of realization, prepared by Management.
PIS (Social Integration Program) was calculated based on the rate of 0.65% and COFINS
(Contribution for Social Security Funding) was calculated based on the rate of 4%, both
applicable on the Company's income accrued less exclusions and deductions provided for
under legislation in force.
ISS (service tax) was calculated considering a rate of 2% to 5% rate (rate varies for each
municipality) in service revenues earned by the Company.
l. Contingent assets, liabilities and legal obligations
The recognition, measuring and disclosure of contingent assets, liabilities and legal
obligations are carried out according to the following criteria:
i. Contingent assets- These are not recorded except when Management has full
control over the situation or when there are secured guarantees or favorable
sentences to which no further appeals are applicable, characterizing a favorable
judgment as practically certain;
ii. Contingent liabilities - These are recognized in the financial statements when,
based on the opinion of the legal counsel and of Management, the risk of loss of a
lawsuit or administrative proceeding is considered probable, with a probable
outflow of financial resources for the settlement of obligations and when the sums
involved are measurable with sufficient assurance. Contingent liabilities
classified as possible losses are not accounted for, and should only be disclosed in
the notes to the financial statements, whereas those classified as remote do not
require provision and disclosure; and
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iii. Legal obligations - Are lawsuits related to tax obligations, where the subject
being contested is their legality or constitutionality which, regardless of the
probability of success of the lawsuits in progress, have their amounts recognized
in full in the financial statements.
m. Other assets and liabilities
Assets are stated at realizable values, including, when applicable, monetary and exchange
variations earned (on a pro rata daily basis) and a provision for losses, when considered
necessary. Liabilities are stated at known or calculated amounts, plus charges and monetary
variations and exchange variations incurred (on a pro rata daily basis).
5 Breakdown of cash and cash equivalents
Bank Consolidated
06/30/2012 06/30/2011 06/30/2012 06/30/2011
Cash and cash equivalents 90,451 62,452 162,873 151,625
Interbank funds applied
Purchase and sale commitments - Own
portfolio
1,177,416 1,636,099 1,177,416 1,636,099
Interbank deposits 394,552 691,747 410,519 715,058
Investments in foreign currency 195,749 124,955 208,185 124,955
Total 1,858,168 2,515,253 1,958,993 2,627,737
6 Cash and cash equivalents
Bank Consolidated
06/30/2012 06/30/2011 06/30/2012 06/30/2011
Cash 327 242 359 288
Bank deposits 91 34 58,505 78,219
Free reserves 54,841 15,768 54,841 15,768
Cash and cash equivalents in foreign
currency
35,192 46,408 49,168 57,350
Total 90,451 62,452 162,873 151,625
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7 Interbank funds applied
Bank Consolidated
06/30/2012 06/30/2011 06/30/2012 06/30/2011
Purchase and sale
commitments - Own portfolio
3,241,444 3,833,461 2,473,518 3,833,461
Financing bills - 332,800 - 332,800
National treasury bills 827,897 746,276 59,971 746,276
National Treasury notes 2,397,460 2,635,917 2,397,460 2,635,917
Other 16,087 118,468 16,087 118,468
Purchase and sale
commitments - Financed
Operations
13,220,953 9,289,985 9,386,288 9,289,985
Financing bills - 2,148,390 - 2,148,390
National treasury bills 13,162,948 7,005,469 9,328,283 7,005,469
National Treasury notes 58,005 136,126 58,005 136,126
Purchase and sale
commitments - Short position
509,713 1,733,125 509,713 1,733,125
National treasury bills 211,894 196,276 211,894 196,276
National Treasury notes 297,819 1,536,849 297,819 1,536,849
Interbank deposits 39,566,768 39,262,527 2,107,007 2,081,842
Foreign currency investments 195,749 124,955 208,185 124,955
Total
56,734,627 54,244,053 14,684,711 17,063,368
Accounting hedge strategies Bank and
Consolidated
06/30/2012 06/30/2011
Cost Market
value
Unrealized
gain/(loss)
Cost Market
value
Unrealized
gain/(loss)
Purchase and sale
commitments
4,066,854 4,072,502 5,648 - - -
Total 4,066,854 4,072,502 5,648 - - -
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In order to hedge the Prefixed rate risks of part of the purchase and sale commitments, the
Conglomerate entered into contracts on the Interbank Deposit (DI) futures market with
BM&FBOVESPA, in accordance with the maturity of the purchase and sale commitments. The
market value of these derivatives amounts to R$ 3,610,941.
The effectiveness verified in the hedge portfolio complies with the provisions of regulation in
force.
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8 Securities
Breakdown by category, in the Country and Abroad
Bank 06/30/2012 06/30/2011
Trading securities
Cost
Market value
(book value)
Unrealized gain
(loss) Cost
Market value
(book value)
Unrealized gain
(loss)
Domestic 25,879,265 25,924,895 45,630 28,124,856 28,093,209 (31,647)
Financing bills 1,223,884 1,227,974 4,090 1,188,623 1,188,598 (25)
National treasury bills 461,581 462,904 1,323 2,297,521 2,288,140 (9,381)
National Treasury notes 2,398,617 2,409,507 10,890 4,366,115 4,301,683 (64,432)
Debentures 21,239,040 21,239,049 9 19,458,122 19,490,683 32,561
Agricultural debt securities - - - 35,328 36,408 1,080
Rural Product Bills 534,988 564,239 29,251 561,661 569,414 7,753
Promissory notes - - - 169,510 169,354 (156)
Shares of listed companies 21,155 21,222 67 47,976 48,929 953
Abroad 354,497 355,797 1,300 1,151,286 1,101,320 (49,966)
Brazilian foreign debt - - - 74,755 77,817 3,062
Foreign governments - - - 562,038 561,234 (804)
National Treasury 165,046 165,043 (3) 120,192 112,812 (7,380)
Other securities 189,451 190,754 1,303 394,301 349,457 (44,844)
Total 26,233,762 26,280,692 46,930 29,276,142 29,194,529 (81,613)
Bank 06/30/2012 06/30/2011
Securities available for sale
Cost
Market
value (book
value)
Unrealized gain
(loss) Cost
Market value
(book value)
Unrealized gain
(loss)
Domestic 12,734,055 13,071,558 337,503 11,902,003 11,686,041 (215,962)
National treasury bills 1,211,137 1,219,686 8,549 1,171,539 1,168,574 (2,965)
National Treasury notes 5,656,125 5,936,009 279,884 5,861,338 5,733,512 (127,826)
Real estate receivables
certificates
44,267 45,559 1,292 13,277 14,709 1,432
Debentures 2,394,272 2,403,700 9,428 1,533,743 1,549,646 15,903
Agricultural debt securities 30,996 33,203 2,207 - - -
Promissory notes 437,315 432,661 (4,654) 150,773 150,773 -
Shares in invest. funds 890,980 890,980 - - - -
FIDC quotas 341,922 341,922 - 457,486 457,479 (7)
FIP shares - - - 675,205 675,205 -
Shares of listed companies 69,521 50,666 (18,855) 314,562 288,839 (25,723)
Shares of private companies 1,606,543 1,666,195 59,652 1,724,080 1,647,304 (76,776)
Other securities 50,977 50,977 - - - -
Abroad 2,241,010 2,226,551 (14,459) 3,334,934 3,327,864 (7,070)
Foreign governments 1,350,819 1,365,487 14,668 2,299,282 2,304,036 4,754
Other securities 890,191 861,064 (29,127) 1,035,652 1,023,828 (11,824)
Total 14,975,065 15,298,109 323,044 15,236,937 15,013,905 (223,032)
Consolidated 06/30/2012 06/30/2011
Trading securities
Cost
Market value
(book value)
Unrealized gain
(loss) Cost
Market value
(book value)
Unrealized gain
(loss)
Domestic 4,967,520 5,018,755 51,235 11,511,828 11,487,699 (24,129)
Financing bills 1,492,894 1,497,537 4,643 1,253,713 1,253,687 (26)
National treasury bills 461,581 462,904 1,323 2,297,521 2,288,140 (9,381)
National Treasury notes 2,444,000 2,459,943 15,943 4,417,680 4,360,767 (56,913)
Debentures 6,104 6,112 8 264,812 297,373 32,561
Agricultural debt securities - - - 35,328 36,408 1,080
Rural Product Bills 534,988 564,239 29,251 561,661 569,414 7,753
Promissory notes - - - 169,510 169,354 (156)
Shares in invest. funds 6,798 6,798 - 1,591,368 1,591,368 -
FIDC quotas - - - 872,259 872,259 -
Shares of listed companies 21,155 21,222 67 47,976 48,929 953
Abroad 374,709 376,009 1,300 1,173,140 1,122,938 (50,202)
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Brazilian foreign debt - - - 74,755 77,817 3,062
Foreign governments 20,213 20,212 (1) 576,244 575,440 (804)
National Treasury 165,046 165,043 (3) 120,192 112,812 (7,380)
Other securities 189,450 190,754 1,304 401,949 356,869 (45,080)
Total 5,342,229 5,394,764 52,535 12,684,968 12,610,637 (74,331)
Consolidated 06/30/2012 06/30/2011
Securities available for sale
Cost
Market value
(book value)
Unrealized gain
(loss) Cost
Market value
(book value)
Unrealized gain
(loss)
Domestic 20,636,668 21,221,902 585,234 12,408,745 12,192,784 (215,961)
National treasury bills 7,028,545 7,254,198 225,653 1,171,539 1,168,574 (2,965)
National Treasury notes 6,163,017 6,473,527 310,510 5,861,338 5,733,512 (127,826)
Real estate receivables
certificates
44,267 45,559 1,292 13,277 14,709 1,432
Debentures 2,035,471 2,044,901 9,430 1,533,743 1,549,646 15,903
Agricultural debt securities 30,996 33,203 2,207 - - -
Promissory notes 437,315 432,661 (4,654) 150,773 150,773 -
Shares in invest. funds 2,794,830 2,794,830 - 4,572 4,572 -
FIDC quotas 375,186 375,185 (1) 959,656 959,650 (6)
FIP shares - - - 675,205 675,205 -
Shares of listed companies 69,521 50,666 (18,855) 314,562 288,839 (25,723)
Shares of private companies 1,606,543 1,666,195 59,652 1,724,080 1,647,304 (76,776)
Other securities 50,977 50,977 - - - -
Abroad
2,241,010 2,226,551 (14,459) 3,334,934
3,327,864 (7,070)
Foreign governments 1,350,819 1,365,487 14,668 2,299,282 2,304,036 4,754
Other securities 890,191 861,064 (29,127) 1,035,652 1,023,828 (11,824)
Total 22,877,678 23,448,453 570,775 15,743,679 15,520,648 (223,031)
On June 30, 2012 there are not securities classified as "held to maturity".
On June 30, 2012, the Agricultural debt securities was reclassified from category "Trading" to
category "Available for sale", as Management reviewed its intention on respective securities.
Reclassification of these securities does not impact results and shareholders' equity in the
respective base date.
Cost Market value Unrealized
gain/loss
Agricultural debt securities 19,077 20,403 1,326
Accounting hedge strategies Bank and
Consolidated
06/30/2012 06/30/2011
Cost Market
value
Unrealized
gain (loss)
Cost Market
value
Unrealized
gain (loss)
Debentures - with
exchange variation
282,233 305,300 23,067 - - -
Total 282,233 305,300 23,067 - - -
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To hedge against exchange risks of the debentures, Conglomerate negotiated contracts in the DDI
futures market with BM&FBOVESPA, in accordance with maturity of the debentures. The
market value of these derivatives amounts to R$ 336,122.
The effectiveness verified in the hedge portfolio complies with the provisions of regulation in
force.
9 Derivative financial instruments
a. Composition in assets and liabilities
Bank Consolidated
Assets 06/30/2012 06/30/2011 06/30/2012 06/30/2011
Differential of swap receivable 2,107,905 1,177,850 1,336,908 998,187
Term currency contracts 784 1,482 784 1,482
Purchase of call options - shares 176 1,551 176 1,551
Purchase of put options - shares 4,005 5,352 4,005 5,352
Purchase of call options - financial assets/ merc.
520,960 130,408 520,960 130,408
Purchase of put options - financial assets/goods
29,296 76,503 29,296 76,503
Credit derivatives 24,050 320,904 24,050 320,904
Non deliverable forward – NDF 245,047 111,836 245,047 111,836
Others - 4 - 4
Total 2,932,223 1,825,890 2,161,226 1,646,227
Liabilities
Differential of swap payable 1,335,583 1,700,557 1,208,767 2,543,655
Term currency contracts 758 866 758 866
Sale of call options - Shares 236 4,051 236 4,051
Sale of put options - Shares 4,128 10,305 4,128 10,305
Sale of call options - financial assets/goods. 474,195 146,702 474,195 146,702
Sale of put options - financial assets/goods 47,530 109,033 47,530 109,033
Option box - Fixed income strategy 18,923,872 21,912,399 1,022,503 3,214,009
Credit derivatives 22,992 171,731 22,992 171,731
Non deliverable forward – NDF 65,670 136,091 65,670 136,091
Total 20,874,964 24,191,735 2,846,779 6,336,443
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b. Composition of the swap contracts by index
Bank 06/30/2012 06/30/2011
Original
value Cost
Market
value
Original
value Cost Market value
Asset position 48,381,597 55,699,897 57,784,531 54,516,358 59,374,609 59,244,865
DI 13,422,274 14,545,859 15,716,679 13,206,992 15,116,857 15,120,817
Dollar 4,643,783 5,614,951 5,740,111 6,669,055 6,178,266 6,192,310
Euro 461,391 518,395 522,059 475,781 467,136 453,884
IGPM 1,070,857 1,435,979 1,525,866 1,095,141 1,403,290 1,406,216
IPCA 5,045,032 5,638,048 5,783,089 2,764,920 3,056,577 3,024,569
Pre-fixed 21,603,653 25,640,786 26,208,037 28,129,432 30,997,713 30,896,971
Libor 1,388,557 1,458,217 1,436,958 1,471,148 1,412,756 1,414,511
Yen - - - 23,982 23,463 23,380
Commodities 1,808 1,808 1,569 2,976 2,953 3,144
Swiss Franc 441,047 542,659 553,396 441,047 479,715 474,889
Others 303,195 303,195 296,767 235,884 235,883 234,174
Asset position 48,381,597 54,928,633 57,012,209 54,516,358 59,816,307 59,767,572
DI 27,738,461 32,268,483 32,291,714 31,387,401 34,525,843 34,515,750
Dollar 2,531,409 2,930,266 2,955,211 2,802,071 2,621,853 2,615,861
Euro 31,781 32,157 32,098 10,732 10,953 10,874
IGPM 613,570 900,680 969,679 917,270 1,257,463 1,264,985
IPCA 6,146,638 7,853,642 8,227,103 5,427,149 6,647,838 6,575,026
Pre-fixed 10,764,893 10,374,445 11,992,030 13,223,779 14,005,687 14,037,505
Libor 282,195 276,293 250,692 653,975 641,501 642,058
Yen - - - 39,736 39,449 39,309
Long Term
Interest Rate
(TJLP)
257,890 270,282 270,439 37,790 44,069 44,171
Commodities 2,855 2,824 2,423 2,882 2,723 2,573
Others 11,905 19,561 20,820 13,573 18,928 19,460
Net differential - 771,264 772,322 - (441,698) (522,707)
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Consolidated 06/30/2012 06/30/2011
Original
value Cost
Market
value
Original
value Cost Market value
Asset position 27,025,478 30,191,189 31,766,188 29,912,820 32,320,810 32,302,272
DI 11,499,002 12,290,654 13,461,474 10,907,168 12,454,866 12,458,826
Dollar 4,588,397 5,545,987 5,671,178 7,711,086 7,540,171 7,556,348
Euro 461,391 518,395 522,059 475,781 467,136 453,884
IGPM 1,070,857 1,435,979 1,525,866 1,095,141 1,403,290 1,406,216
IPCA 5,045,032 5,638,048 5,783,089 2,764,920 3,056,577 3,024,569
Pre-fixed 2,226,192 2,456,247 2,513,832 4,783,687 5,244,000 5,252,331
Libor 1,388,557 1,458,217 1,436,958 1,471,148 1,412,756 1,414,511
Yen - - - 23,982 23,463 23,380
Commodities 1,808 1,808 1,569 2,976 2,953 3,144
Swiss Franc 441,047 542,659 553,396 441,047 479,715 474,889
Others 303,195 303,195 296,767 235,884 235,883 234,174
Asset position 27,025,478 29,629,840 31,638,047 29,912,820 33,878,731 33,847,740
DI 8,305,614 9,276,194 9,299,425 9,083,687 11,283,590 11,273,470
Dollar 2,516,109 2,911,790 2,936,757 2,689,780 2,515,783 2,511,212
Euro 31,781 32,157 32,098 10,732 10,953 10,874
IGPM 613,570 900,680 969,679 917,270 1,257,463 1,264,985
IPCA 6,146,638 7,853,642 8,227,103 5,427,149 6,647,838 6,575,026
Pre-fixed 8,856,921 8,086,417 9,628,611 11,036,246 11,416,434 11,464,602
Libor 282,195 276,293 250,692 653,975 641,501 642,058
Yen - - - 39,736 39,449 39,309
Long Term
Interest Rate
(TJLP)
257,890 270,282 270,439 37,790 44,069 44,171
Commodities 2,855 2,824 2,423 2,882 2,723 2,573
Others 11,905 19,561 20,820 13,573 18,928 19,460
Net differential - 561,349 128,141 - (1,557,921) (1,545,468)
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c. Composition of the forward contracts by index
Bank and
Consolidated
06/30/2012 06/30/2011
Original
value Cost Market value
Original
value Cost Market value
Asset position
Forward currency 30,493 986 784 59,324 1,482 1,482
Total 30,493 986 784 59,324 1,482 1,482
Asset position
Forward currency 30,493 5,092 758 59,324 866 866
Total 30,493 5,092 758 59,324 866 866
d. Composition of the options contracts by index
Bank and
Consolidated 06/30/2012 06/30/2011
Long position
Amount
contracted
Market value
(book value)
Amount
contracted
Market value
(book value)
Dollar 5,536,488 465,032 7,451,886 81,310
Table of contents 11,708,281 8,655 549,853,347 842
DI - - 26 106,681
Shares 454,151 4,181 434,241 6,903
Commodities 2,922 563 8,955 7,131
Flexible 1,407,175 76,006 598,046 10,947
Total 19,109,017 554,437 558,346,501 213,814
Short position
Dollar 8,207,531 480,642 8,788,017 86,874
Table of contents 11,476,436 6,211 591,110,985 100,901
DI - - 57 641
Shares 459,800 4,364 569,027 14,356
Commodities 42,679 2,688 34,537 1,874
Flexible 1,168,629 32,184 2,588,641 65,445
Total 21,355,075 526,089 603,091,264 270,091
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e. Composition of the futures contracts by index
Bank Consolidated
06/30/2012 06/30/2011 06/30/2012 06/30/2011
Commitment of
purchase
48,202,252 41,058,362 48,202,252 41,058,362
DDI 13,139,042 12,578,598 13,139,042 12,578,598
Dollar 1,880,268 1,507,327 1,880,268 1,869,015
DI 32,895,058 25,902,914 32,895,058 25,902,914
Exchange Coupon 7,533 361,688 7,533 -
Commodities 1,603 3,975 1,603 3,975
Table of contents 22,371 228,459 22,371 228,459
SCC 256,377 475,401 256,377 475,401
Sale commitment 32,895,665 58,710,024 75,825,605 98,403,187
DDI 14,886,597 11,749,711 14,886,597 11,791,842
Dollar 409,384 16,793 409,384 16,793
DI 17,246,117 434,090 60,176,057 434,090
Exchange Coupon 412 45,966,556 412 85,578,763
Commodities 30,033 28,200 30,033 67,025
T-Note - 38,193 - 38,193
Table of contents 71,203 632 71,203 632
Euro 502 - 502 -
BGI 3,901 4,475 3,901 4,475
SCC 247,516 471,374 247,516 471,374
Total 15,306,587 (17,651,662) (27,623,353) (57,344,825)
f. Composition of the NDF contracts by index
Bank and
Consolidated
06/30/2012 06/30/2011
Amount
contracted
Market value (book
value)
Amount
contracted
Market value (book
value)
Assets
Dollar 3,582,699 149,959 1,200,784 29,677
Euro 9,063 193 970 680
Others 1,272,203 94,895 149,479 81,479
Subtotal 4,863,965 245,047 1,351,233 111,836
Liabilities
Dollar 587,483 33,149 470,704 118,945
Euro - 4 13,194 13
Others 1,123,754 32,517 239,125 17,133
Subtotal 1,711,237 65,670 723,023 136,091
Total 3,152,728 179,377 628,210 (24,255)
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Credit derivatives
Bank and Consolidated 06/30/2012 06/30/2011
Reference
value
Market
value
Reference
value
Market
value
Risk taken
Credit swaps 3,264,400 (8,866) 3,293,921 43,322
Credit linked notes - - 285,681 302,703
Total 3,264,400 (8,866) 3,579,602 346,025
Risk transferred
Credit swaps 811,612 9,924 1,311,324 6,091
Credit linked notes - - 107,732 113,262
Equity linked notes - - 27,319 27,257
Total 811,612 9,924 1,446,375 146,610
g. Credit derivatives by index
Bank and
Consolidated
06/30/2012 06/30/2011
Original
value Cost
Market
value
Original
value Cost
Market
value
Asset position
Pre-fixed 3,335,145 16,716 24,050 1,987,280 295,882 320,904
Total 3,335,145 16,716 24,050 1,987,280 295,882 320,904
Asset position
Pre-fixed 740,867 5,370 22,992 3,038,697 138,650 171,731
Total 740,867 5,370 22,992 3,038,697 138,650 171,731
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h. Composition of the Option box contracts - fixed income strategy
Bank 06/30/2012 06/30/2011
Amount
contracted
Market value /
Risk exposure Amount
contracted
Market
value / Risk
exposure
Prefixed Risk
Asset position
Sale of Call with high limit 5,456,850 6,872,299 7,102,043 5,047,879
Sale of Put with low limit 10,340,657 12,051,573 13,211,823 16,864,520
Total 15,797,507 18,923,872 20,313,866 21,912,399
Dollar risk
Asset position
Sale of Put with low limit - 16,465,615 - 16,674,292
Subtotal - 16,465,615 - 16,674,292
Asset position
Sale of Call with high limit - 16,465,615 - 16,674,292
Subtotal - 16,465,615 - 16,674,292
Total - - - -
Consolidated 06/30/2012 06/30/2011
Amount
contracted
Market value /
Risk exposure
Amount
contracted
Market
value / Risk
exposure
Prefixed Risk
Asset position
Sale of Call with high limit 303,772 354,235 1,003,414 662,359
Sale of Put with low limit 667,765 668,268 1,962,337 2,551,650
Total 971,537 1,022,503 2,965,751 3,214,009
Dollar risk
Asset position
Sale of Put with low limit - 841,437 - 2,518,724
Subtotal - 841,437 - 2,518,724
Asset position
Sale of Call with high limit - 841,437 - 2,518,724
Subtotal - 841,437 - 2,518,724
Total - - - -
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i. Securities given in guarantee
Bank Consolidated
06/30/2012 06/30/2011 06/30/2012 06/30/2011
Stock Exchange transactions 763,715 1,087,786 1,960,374 1,111,302
National Treasury notes 763,715 905,351 785,410 928,867
Financing bills - 23,733 - 23,733
National treasury bills - 158,702 1,174,964 158,702
Clearing House operations 101,876 117,489 101,876 117,489
National Treasury notes 101,876 49,702 101,876 49,702
National treasury bills - 67,787 - 67,787
Others 2,247,766 3,608,804 2,272,871 3,624,699
National Treasury notes 503,860 812,302 503,860 812,302
Financing bills 16,027 1,340 41,132 17,235
Others (a) 1,727,879 2,795,162 1,727,879 2,795,162
Total 3,113,357 4,814,079 4,335,121 4,853,490
(a) In 2012, basically refer to securities of foreign governments, in the amount of
R$1,365,487 (R$ 1,879,453 in 2011), and other securities abroad, in the amount of R$
355,146 (R$ 915,709 in 2011).
j. Financial derivative instruments segregated by trading location and counter-party
Bank Consolidated
Asset position 06/30/2012 06/30/2011 06/30/2012 06/30/2011
Stock Exchange transactions 554,437 213,814 554,437 213,814
Over-the-Counter 2,377,786 1,612,076 1,606,789 1,432,413
Financial institutions 2,043,925 1,388,851 1,272,928 1,175,501
Trade accounts receivable 333,861 223,225 333,861 256,912
Total 2,932,223 1,825,890 2,161,226 1,646,227
Bank Consolidated
Asset position 06/30/2012 06/30/2011 06/30/2012 06/30/2011
Stock Exchange transactions 526,089 270,091 526,089 270,091
Over-the-Counter 20,348,875 23,921,644 2,320,690 6,066,352
Financial institutions 20,250,246 23,854,316 2,222,061 5,879,831
Trade accounts receivable 98,629 67,328 98,629 186,521
Total 20,874,964 24,191,735 2,846,779 6,336,443
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k. Breakdown of derivative financial instruments used in hedge strategies
Bank Consolidated
Hedge instruments 06/30/2012 06/30/2011 06/30/2012 06/30/2011
Market risk hedge
Assets 23,980,773 24,302,715 20,221,475 26,498,278
Futures 18,903,915 14,087,540 18,903,915 14,087,540
Swap 3,759,298 4,686,024 - 6,881,587
Options 1,317,560 5,529,151 1,317,560 5,529,151
Liabilities 21,297,783 21,811,773 59,880,934 83,997,298
Futures 16,248,003 12,773,072 57,774,391 50,206,471
Swap 2,943,237 2,545,089 - 27,297,215
Options 2,106,543 6,493,612 2,106,543 6,493,612
Cash flow risk hedge
Assets 883,305 - 883,305 -
Swap 883,305 - 883,305 -
Items to be hedged
Assets 4,748,508 4,442,066 50,453,233 65,231,402
Loans 2,304,280 1,726,405 45,207,907 39,715,670
Securities 380,362 757,765 430,798 19,515,248
Leases - - 2,750,662 4,042,588
Foreign investments 731,065 656,192 731,065 656,192
Other assets 1,332,801 1,301,704 1,332,801 1,301,704
Liabilities 7,828,056 6,960,057 7,828,056 6,960,057
Other liabilities 7,828,056 6,960,057 7,828,056 6,960,057
10 Interbank accounts/relations Assets
Bank and Consolidated
06/30/2012 06/30/2011
Payments and receivables to be settled 544 1,494
Mandatory reserves - BACEN 2,835,795 6,048,845
Compulsory deposits on demand deposits 116,105 116,374
Compulsory deposits on time deposits 1,548,222 3,393,397
Compulsory deposits on additional liabilities 1,165,625 2,533,857
Compulsory deposits on microfinance operations 5,843 5,217
Interbank onlendings 176,199 61,119
Correspondent relations 916 2,127
Total 3,013,454 6,113,585
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Liabilities
Bank and Consolidated
06/30/2012 06/30/2011
Payments and receivables to be settled 5,532 11,518
Total
5,532 11,518
11 Interbranch accounts Bank
Liabilities 06/30/2012 06/30/2011
Funds in transit - Associated companies 4,749 12,576
Receipts in transit - Third parties 513 10
Payment orders in foreign currency 119,302 101,032
Total 124,564 113,618
Consolidated
Liabilities 06/30/2012 06/30/2011
Funds in transit - Associated companies 4,749 12,576
Receipts in transit - Third parties 513 10
Payment orders in foreign currency 119,302 101,032
Local transfer of funds 24 3
Total 124,588 113,621
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12 Loans and leases, advances on foreign exchange contracts, other receivables
with loan characteristics and allowance for possible loan losses
a. Composition of operations by category and past due and falling due installments
Bank Consolidated
06/30/2012 06/30/2011 06/30/2012 06/30/2011
Advances to depositors 641 982 641 982
Loans 9,447,695 9,054,059 16,706,306 15,066,711
Discounted securities 65,302 41,465 65,302 41,465
Loans and financing 4,693,012 5,880,854 33,237,004 36,878,425
Export financing 3,559,919 2,813,195 3,559,919 2,813,195
Financing in foreign currency 631,911 300,643 631,911 300,643
Rural financing agreements 556,426 1,291,456 556,426 1,291,456
Real estate financing agreements 413,196 180,171 413,196 180,171
Loans subject to assignments - - 96,771 -
Subtotal 19,368,102 19,562,825 55,267,476 56,573,048
Advances on exchange contracts 915,352 733,248 915,352 733,248
Leases - - 2,440,083 3,605,947
Credits for sureties and guarantees paid - 672 - 672
Securities and credits receivable - - 186,199 299,867
Total lending operations 20,283,454 20,296,745 58,809,110 61,212,782
Bank Consolidated
06/30/2012 06/30/2011 06/30/2012 06/30/2011
Payments falling due 20,057,220 20,213,512 56,589,444 60,018,124
Total installments 20,283,454 20,296,745 58,809,110 61,212,782
b. Concentration of operations
Bank Consolidated
06/30/2012 06/30/2011 06/30/2012 06/30/2011
Ten main debtors 2,957,037 2,880,019 3,046,802 2,938,187
50 following greatest debtors 4,095,018 4,181,908 4,187,632 4,261,170
Next one hundred main debtors 3,106,930 3,333,792 3,167,985 3,394,856
Other clients 10,124,469 9,901,026 48,406,691 50,618,569
Total 20,283,454 20,296,745 58,809,110 61,212,782
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c. Composition of operations by sector of economic activity
Bank Consolidated
06/30/2012 06/30/2011 06/30/2012 06/30/2011
Legal entities 19,901,313 19,519,672 21,719,119 21,314,407
State public sector
Services 52,919 61,667 52,919 61,667
Private sector
Industry 10,410,037 10,116,783 10,573,947 10,263,942
Commerce 3,138,904 2,919,925 3,866,042 3,756,348
Rural 556,426 1,291,456 556,426 1,291,456
Services 5,743,027 5,129,841 6,669,785 5,940,994
Individuals 382,141 777,073 37,089,991 39,898,375
Total 20,283,454 20,296,745 58,809,110 61,212,782
d. Composition of the operations at the corresponding levels of risk
Bank 06/30/2012 06/30/2011
Risk level Ordinary
course
Overdue
operations
Total
operations
Ordinary
course
Overdue
operations
Total
operations
AA 9,249,735 - 9,249,735 11,100,121 - 11,100,121
A 4,832,204 - 4,832,204 5,459,891 - 5,459,891
B 3,459,253 25,714 3,484,967 2,230,716 13,828 2,244,544
C 1,074,135 45,620 1,119,755 519,446 24,921 544,367
D 504,653 77,318 581,971 553,725 25,683 579,408
E 449,986 35,276 485,262 10,784 4,888 15,672
F 15,788 33,689 49,477 105,655 31,117 136,772
G 16,162 48,190 64,352 19,642 8,093 27,735
H 104,739 310,992 415,731 7,039 181,196 188,235
Total 19,706,655 576,799 20,283,454 20,007,019 289,726 20,296,745
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Consolidated 06/30/2012 06/30/2011
Risk level Ordinary
course
Overdue
operations
Total
operations
Ordinary
course
Overdue
operations
Total
operations
AA 9,598,830 - 9,598,830 11,399,387 - 11,399,387
A 33,441,152 - 33,441,152 39,958,354 - 39,958,354
B 4,209,718 1,699,678 5,909,396 2,375,168 1,853,158 4,228,326
C 1,376,160 1,619,195 2,995,355 593,147 1,434,494 2,027,641
D 556,817 1,015,072 1,571,889 585,170 807,319 1,392,489
E 458,861 678,690 1,137,551 28,270 491,680 519,950
F 23,409 625,193 648,602 116,512 370,328 486,840
G 76,427 650,251 726,678 28,029 243,143 271,172
H 191,065 2,588,592 2,779,657 57,465 871,158 928,623
Total 49,932,439 8,876,671 58,809,110 55,141,502 6,071,280 61,212,782
e. Formation of allowance for loan losses by level of risk and type of portfolios
Bank
Consolidated
Risk level
%
Provision
06/30/2012 06/30/2011
06/30/2012 06/30/2011
A 0.5 24,160 27,300 167,206 199,792
B 1 34,849 22,445 59,094 42,283
C 3 33,592 16,331 89,861 60,829
D 10 58,197 57,940 157,189 139,249
E 30 178,024 4,701 373,709 155,985
F 50 24,739 68,386 324,301 243,421
G 70 45,046 19,414 508,674 189,819
H 100 415,731 188,235 2,779,657 928,623
Total 814,338 404,752 4,459,691 1,960,001
Percentage of the
portfolio 4.01%
1.99% 7.58% 3.20%
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Bank Consolidated
06/30/2012 06/30/2011 06/30/2012 06/30/2011
Provision for loans and discounted
securities 495,682 184,200 1,079,472 484,527
Provision for financing 258,547 167,016 3,116,298 1,237,932
Rural and agroindustrial financing 5,759 6,509 5,759 6,509
Provision for real estate financing 3,057 297 3,057 297
Provision for loss with financial leases - - 187,282 184,006
Provision for loans - - 484 -
Provision for other credits 51,293 46,730 67,339 46,730
Total 814,338 404,752 4,459,691 1,960,001
f. Movement of allowance for loan losses in the period
Bank
Consolidated
01/01 to
06/30/2012
01/01 to
06/30/2011
01/01 to
06/30/2012
01/01 to
06/30/2011
Opening balance 652,592 285,684 3,206,327 1,153,336
Recorded / (Reversals) 250,228 141,126 3,025,045 1,268,433
Write-offs to loss (88,482) (22,058) (1,771,681) (461,768)
Closing balance 814,338 404,752 4,459,691 1,960,001
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g. Information on credit assignments at June 30, 2011
06/30/2011
Transfer amount of assets assigned in the period 7,045,324
Book value of assets assigned in the period (6,243,399)
Gross income from assignments 801,925
Expenses with assigned contracts' early settlement (288,398)
Provision for losses on assigned contracts (90,792)
Income from assignments before costs and taxes 422,735
Acceleration of the recognition in profit or loss of the costs associated with the
asset assigned (180,951)
Income from assignments before taxes 241,784
Tax effects (108,907)
Net Income (loss) from assignments 132,877
At June 30, 2012, the Bank calculated the expenses with early settlement fully recognized in
statement of income accounts in the amount of R$ 131,874 and provision for losses in the
amount of R$ 23,198 for the assignments carried out up to December 31, 2011.
06/30/2012 06/30/2011
Balance of co-obligations with credit assignments
Financial institutions – Related parties 13,205,999 13,496,615
Other financial institutions 534,354 1,343,840
Total 13,740,353 14,840,455
Banco Votorantim and its subsidiary BV Financeira hold 100% of the subordinated quotas of
credit receivables investment funds as follows:
06/30/2012 06/30/2011
BV Financeira FIDC I 278.066 262,888
BV Financeira FIDC II 128,467 164,803
BV Financeira FIDC III 179,711 160,123
BV Financeira FIDC IV 423,176 284,445
BV Financeira FIDC V 820,995 441,843
Total investments in shares 1,830,415 1,314,102
h. Information on credit assignments carried out as from January 1, 2012:
In the first semester of 2012, transfers of financial assets were undertaken (consumer loans -
CDC), with a substantial retaining of the risks and benefits, to credit receivable investment
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funds, of which BV Financeira holds 100% of the subordinated quotas, as demonstrated
below:
Financial assets
subject to sale
Liability related to
obligation assumed
BV Financeira FIDC III 80,465 85,698
BV Financeira FIDC IV 4,582 4,824
BV Financeira FIDC VI 11,724 12,662
Total 96,711 103,184
Revenues from sold or transferred assets totaled R$8,006 and expenses with obligations from
financial asset sale or transfer totaled R$7,622.
Also in 2012, the Bank did not adopt the option provided for in Resolution no. 4,036/11 on
the treatment of anticipated settlement losses.
i. Accounting hedge strategies
Credit portfolio market value was determined as defined in BACEN Resolution 3082/02.
This determination considered the respective derivative hedge that reflects the effects of
interest rate change in credit portfolio, in accordance with installment maturities flow, to
offset adjustments carried out in derivatives market.
Bank
06/30/2012 06/30/2011
Cost
Market
value
Unrealized
gain (loss) Cost
Market
value
Unrealized
gain (loss)
Loans 5,576,176 5,812,595 236,419 2,243,403 2,319,724 76,321
Total 5,576,176 5,812,595 236,419 2,243,403 2,319,724 76,321
On June 30, 2012, the evaluation of such assets generated an unrealized positive adjustment
of R$236,419 (R$76,321 in 2011), recorded under Other receivables - Sundry.
In order to hedge the risks of the pre-fixed interest rates of loans and assignments, the Bank
entered into contracts on the Interbank Deposit (DI) futures market with BM&FBOVESPA,
in accordance with the maturity schedule of the installments. The market value of these
derivatives amounts totalized R$ 2,931,649 at June 30, 2012.
To hedge against variable interest rate risks (US dollar) of export financing, Bank negotiated
contracts in the DDI futures market with BM&FBOVESPA, in accordance with installment
maturities flow. The market value of these derivatives amounts totalized R$ 2,746,871 at
June 30, 2012..
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Consolidated
06/30/2012 06/30/2011
Cost
Market
value
Unrealized
gain (loss) Cost
Market
value
Unrealized
gain (loss)
Loan and
leases
44,005,061 45,973,350 1,968,289 46,618,312 46,758,257 139,945
Total 44,005,061 45,973,350 1,968,289 46,618,312 46,758,257 139,945
On June 30, 2012, the evaluation of such assets generated an unrealized positive adjustment
of R$1,968,289 (R$139,945 in 2011), recorded under Other receivables - Sundry.
To hedge loans, financing and lease transactions (does not include asset sales or transfer
transactions with substantial retention of risks and benefits) against fixed interest rate risk,
the Conglomerated group negotiated contracts in the futures DI market at BM&FBOVESPA,
in accordance with installment maturities flow. The market value of these derivatives
amounts totalized R$ 47,231,101.
To hedge against variable interest rate risks (US dollar) of export financing, Conglomerate
negotiated contracts in the DDI futures market with BM&FBOVESPA, in accordance with
installment maturities flow. The market value of these derivatives amounts totalized R$
2,746,871.
The effectiveness verified in the hedge portfolio complies with the provisions of regulation in
force
j. Supplementary information
Bank Consolidated
06/30/2012 06/30/2011 06/30/2012 06/30/2011
Amount of credit renegotiated in the period 3,333,014 5,891,661 3,500,320 6,036,033
Amount part of credits recovered, written-off
as loss
7,939 2,323 95,511 95,948
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13 Foreign exchange portfolio
Bank and Consolidated
Other receivables 06/30/2012 06/30/2011
Purchased foreign exchange to be settled 1,091,537 1,719,932
Receivables from foreign exchange sales 168,887 555,086
Advances in national currency received (1,513) (5,137)
Advances in foreign currency received (141) (546,105)
Earnings receivable from granted advances 26,229 16,143
Total 1,284,999 1,739,919
Other liabilities
Sold foreign exchange to be settled 164,374 554,099
Liabilities for foreign exchange purchases 1,011,093 1,762,353
Advances against exchange (889,123) (717,105)
Amount in foreign currency - payable 8 2
Total 286,352 1,599,349
Net foreign exchange position 998,647 140,570
14 Securities clearing accounts
Bank
Consolidated
Other receivables 06/30/2012 06/30/2011 06/30/2012 06/30/2011
Cash pending settlement 129 1,842 5,994 1,842
Debtors accounting settlement pending 16,695 - 145,326 81,280
Oper. with unsettled financial assets and
commodities
21,789 29,307 59,226 61,842
Other receivables 99,452 67,839 99,981 68,239
Total 138,065 98,988 310,527 213,203
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Bank
Consolidated
Other liabilities 06/30/2012 06/30/2011 06/30/2012 06/30/2011
Cash pending settlement 420 9,933 475 32,433
Commissions and brokerage fees payable 500 1,085 1,025 2,955
Creditors - unsettled accounts 129 223 191,509 67,450
Stock loan creditors 18,863 47,366 18,863 47,366
Operations with unsettled financial assets and
commodities
13 29,985 13 29,985
Total 19,925 88,592 211,885 180,189
15 Other receivables - Sundry
Bank
Consolidated
06/30/2012 06/30/2011 06/30/2012 06/30/2011
Advanced and prepaid salaries 5,445 5,060 12,386 13,129
Advances to suppliers 1,954 2,015 2,174 2,521
Tax credit of taxes and contributions 693,103 520,995 4,223,358 2,141,648
Deposits in guarantee 166,510 146,927 519,008 438,647
Taxes and contributions recoverable 107,600 128,240 299,637 385,875
Credit card transactions - - 297,547 209,017
Market adjustments for loans and lease 236,419 76,321 1,968,289 139,945
Credits receivable from leases - - 186,199 299,867
Settlement of securities abroad 158,158 253,525 158,158 253,525
Others 37,246 36,435 252,327 269,795
Total 1,406,435 1,169,518 7,919,083 4,153,969
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16 Other assets
Bank
Consolidated
06/30/2012 06/30/2011 06/30/2012 06/30/2011
Insurance costs 227 566 5,809 5,155
Data processing expenses 4,558 2,945 5,183 3,435
Commission for intermediation of operations (a) - - 1,086,925 915,564
Expenses with issue of securities - 1,294 - 2,855
Financial system service expenses 6,788 8,096 61,133 45,181
Specialized technical service expenses 4,895 30,814 12,214 38,400
Assets not of own use for lease 4,041 2,769 4,041 2,769
Non-operational assets - Vehicles and the like 327 70 142,826 98,542
Provision to devaluation of other assets - - (9,473) (8,201)
Usufruct right on shares 213,637 268,678 213,637 268,678
Others 3,008 768 5,904 13,407
Total 237,481 316,000 1,528,199 1,385,785
(a) Refer to the deferral of costs associated to loan transactions granted by BV Financeira, such
as costs with commissions and commercial agreements.
17 Investments
a. Equity in the income of subsidiaries and associated companies in the country and
abroad
Balance
at
12/31/11
Dividends
received
Capital
increase /
Invest.
acquisition
Equity in net
income
Equity
evaluation
adjustment
Balance at
06/30/12
Domestic
2,337,943 (8,079) 3,109,604
(1,379,300) 158,490 4,218,658
Votorantim CTVM Ltda. 257.116 (1,807) - 4,534 - 259,843
Votorantim Asset DTVM Ltda 83,869 (6,272) - 10,230 - 87,827
BV Financeira S.A. 700,830 - 3,000,000 (1,443,095) 158,490 2,416,225
BV Leasing Arrend. Merc. S.A. 1,295,847 - - 18,886 - 1,314,733
BVIP – BV Inv. e Partic. S.A. 109 - - (59) - 50
BVIA – BV Inv. Alt. Gestão S.A. 172 - - (52) - 120
Votorantim Corretora de Seguros S.A. (a) - - 109,604 30,256 - 139,860
Abroad 59,276 - - 5,320 - 64,596
Votorantim Bank Limited 36,590 - - 2,346 - 38,936
Banco Votorantim Securities 11,019 - - 2,256 - 13,275
Votorantim Securities (UK) Limited 11,667 - - 718 - 12,385
Total 2,397,219 (8,079) 3,109,604 (1,373,980) 158,490 4,283,254
(a) During the first semester of 2012, Banco Votorantim acquired from BV Participações
S.A. the entire 200,000 common shares in Votorantim Corretora de Seguros S.A. for R$
109,604. This interest is stated in Investments in domestic subsidiaries and was appraised
under the equity accounting method.
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06/30/2012
Capital
Shareholders'
equity Net income
No. of common
shares/quotas held
by the Bank in units
Domestic
Votorantim CTVM Ltda. 169,280 259,841 4,534 16,928,021,130
Votorantim Asset DTVM Ltda. 46,536 87,826 10,230 4,653,477,324
BV Financeira S.A. 3,845,719 2,416,225 (1,443,095) 1,641,109
BV Leasing Arrend. Merc. S.A. 998,800 1,314,733 18,878 510,404
BVIP – BV Inv. e Partic. S.A. 301 50 (59) 301,000
BVIA – BV Inv. Alt. Gestão S.A. 301 120 (52) 301,000
Votorantim Corretora de Seguros S.A. 54,802 139,860 30,255 200,000
Abroad
Votorantim Bank Limited 83,461 38,936 (492) 6,002,120
Banco Votorantim Securities 24,256 13,275 1,401 4,000,000
Votorantim Securities (UK) 12,682 12,385 (306) 4.000.000
b. Other investments
Bank Consolidated
06/30/2012 06/30/2011 06/30/2012 06/30/2011
Investments via tax incentives 37,031 35,405 111,102 104,760
Membership certificates 175 175 176 176
Shares and quotas 6 6 6 6
Others 100 99 129 129
37,312 35,685 111,413 105,071
Allowance for losses in investments due to
fiscal incentives (11,034) (10,298) (42,441) (40,057)
Total 26,278 25,387 68,972 65,014
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18 Fixed assets for use
Bank 06/30/2012 06/30/2011
Cost Accumulated
depreciation
Net
balance
Net
balance
Constructions in progress - - - 111
Furniture and equipment in use 33,163 (12,368) 20,795 22,104
Communication system 7,319 (4,858) 2,461 2,994
System data processing 37,101 (28,556) 8,545 12,554
Security system 2,289 (800) 1,489 1,596
Transportation system 601 (601) - 18
Total 80,473 (47,183) 33,290 39,377
Consolidated 06/30/2012 06/30/2011
Cost Accumulated
depreciation
Net
balance
Net
balance
Constructions in progress - - - 111
Facilities 53,629 (8,849) 44,780 38,531
Furniture and equipment in use 55,826 (21,326) 34,500 37,349
Communication system 11,979 (7,573) 4,406 5,247
System data processing 75,722 (57,494) 18,228 26,174
Security system 2,337 (814) 1,523 1,629
Transportation system 1,113 (985) 128 298
Total 200,606 (97,041) 103,565 109,339
Bank
Consolidated
01/01 to
06/30/2012
01/01 to
06/30/2011
01/01 to
06/30/2012
01/01 to
06/30/2011
Opening balance 37,947 41,979 110,436 87,786
Acquisitions 2,060 1,394 7,005 34,111
Disposals (2,564) (23) (2,787) (2,748)
Depreciation (4,153) (3,973) (11,089) (9,810)
Closing balance 33,290 39,377 103,565 109,339
On June 30, 2012, there were no relevant assets indicating impairment loss.
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19 Intangible
Bank 06/30/2012 06/30/2011
Cost
Accumulated
amortization
Net
balance
Net
balance
Software 829 (73) 756 -
Corporate projects 24,667 - 24,667 14,803
Total 26,496 (73) 25,423 14,803
Consolidated 06/30/2012 06/30/2011
Cost
Accumulated
amortization
Net
balance
Net
balance
SISBEX BMF&Bovespa - - - 200
Software 2,584 (867) 1,717 894
Licenses 21,280 (7,290) 13,990 12,231
Sales rights agreements 5,000 (1,540) 3,460 4,210
Corporate projects 28,192 - 28,192 14,803
Total 57,056 (9,697) 47,359 32,338
Bank
Consolidated
01/01 to
06/30/2012
01/01 to
06/30/2011
01/01 to
06/30/2012
01/01 to
06/30/2011
Opening balance 20,050 7,035 40,250 20,691
Acquisitions 6,899 8,372 12,357 14,317
Write-offs (1,453) (604) (2,812) (804)
Amortization (73) - (2,436) (1,866)
Closing balance 25,423 14,803 47,359 32,338
Amortization estimates for software, licenses and trading right agreements
06/30/2012
Bank Consolidated
In 2012 76 2,757
In 2013 151 5,513
In 2014 151 5,542
In 2015 151 4,260
In 2016 151 892
Above 5 years 24,743 28,395
Total 25,423 47,359
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On June 30, 2012, there were no relevant assets indicating impairment loss.
20 Deferred assets
Bank 06/30/2012 06/30/2011
Cost
Accumulated
amortization
Net balance
Net balance
Expenses on third-party properties 35,140 (6,791) 28,349 30,932
Total 35,140 (6,791) 28,349 30,932
Consolidated 06/30/2012 06/30/2011
Cost
Accumulated
amortization
Net balance
Net balance
Expenses on third-party properties 41,559 (13,016) 28,543 32,425
Expenses on software acquisition and
development 1,609 (1,479) 130 380
Total 43,168 (14,495) 28,673 32,805
Bank
Consolidated
01/01 to
06/30/2012
01/01 to
06/30/2011
01/01 to
06/30/2012
01/01 to
06/30/2011
Opening balance 29,661 32,194 30,572 43,894
Write-offs - (3) -
(586)
Amortization (1,312) (1,259) (1,899) (10,503)
Closing balance 28,349 30,932 28,673 32,805
On June 30, 2012, there were no relevant assets indicating impairment loss.
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21 Deposits Bank Consolidated
06/30/2012 06/30/2011 06/30/2012 06/30/2011
Demand deposits 475,046 353,229 479,795 374,282
Individuals 17,351 18,113 17,970 18,916
Legal entities 457,623 323,258 461,753 343,509
Financial institutions 44 11,858 44 11,857
Others 28 - 28 -
Interbank deposits 3,812,819 1,430,460 3,504,861 1,160,946
Time deposits 19,005,913 22,119,010 18,983,891 22,097,076
Individuals 789,871 835,412 789,871 835,412
Legal entities 18,216,042 21,278,020 18,194,020 21,256,086
Others - 5,578 - 5,578
Other deposits - 107 - 107
Total 23,293,778 23,902,806 22,968,547 23,632,411
22 Money market borrowings Bank Consolidated
06/30/2012 06/30/2011 06/30/2012 06/30/2011
Own portfolio 24,071,128 30,367,760 24,078,968 29,266,358
Financing bills 1,177,510 821,310 1,177,510 821,310
National treasury bills 1,596,555 3,178,630 1,596,555 3,178,630
National Treasury notes 4,228,429 5,403,794 4,228,429 4,301,403
Others 17,068,634 20,964,026 17,076,474 20,965,015
Third-party portfolio 13,278,747 9,276,880 7,626,610 8,865,762
Financing bills - 2,148,390 - 2,148,390
National treasury bills 13,220,735 6,992,057 7,568,598 6,580,939
National Treasury notes 58,012 136,433 58,012 136,433
Free portfolio 583,822 1,799,239 583,822 1,799,239
National treasury bills 219,912 196,630 219,912 196,630
National Treasury notes 322,123 1,554,814 322,123 1,554,814
Others 41,787 47,795 41,787 47,795
Total 37,933,697 41,443,879 32,289,400 39,931,359
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23 Acceptances and endorsements
Bank Consolidated
06/30/2012 06/30/2011 06/30/2012 06/30/2011
Debentures
With exchange variation - - - 1,478,978
Post-fixed (a) - - 2,833,642 1,529,237
Real estate credit note funds
Post-fixed (b) 88,494 2,894 88,494 2,894
Agribusiness credit bill funds
Post-fixed (c) 2,006,103 1,582,641 2,006,103 1,582,641
Pre-fixed (d) 14,466
- 14,466 -
Financing bills
Pre-fixed (e) 122,309 46,590 122,309 46,590
Post-fixed (f) 9,994,376 5,658,460 9,994,376 5,658,460
Foreign securities abroad
Pre-fixed (g) 1,494,968 1,477,786 1,494,968 1,477,786
With exchange variation (h) 4,872,548 3,898,593 4,872,548 3,898,593
Total 18,593,264 12,666,964 21,426,906 15,675,179
(a) Rate of restatement in 2012: from 100% to 111% p.a. of the DI / DI + 0.35% p.a.
(b) Rate of restatement in 2012: from 90.00% to 97.33% of the DI.
(c) Rate of restatement in 2012: from 60.00% to 97.00% of the DI.
(d) Rate of restatement in 2012: from 8.48% to 12.35% p.a.
(e) Rate of restatement in 2012: from 9.37% to 14.00% p.a.
(f) Rate of restatement in 2012: from 100% to 112,02% of the DI / from 108% to 109.3% of the Selic / from 3.75% to
7.81% p.a. + IPCA / from 4.95% to 5,99% p.a. + IGPM.
(g) Rate of restatement in 2012: from 6.25% to 14.19% p.a.
(h) Rate of restatement in 2012: from 2.75% to 8.90% p.a. + foreign exchange variation
Accounting hedge strategies
Bank and
Consolidated
06/30/2012 06/30/2011
Cost Market
value
Unrealized
gain (loss)
Cost Market
value
Unrealized
gain (loss)
Foreign securities
abroad
3,125,217 3,194,482 69,265 452,907 450,474 (2,433)
Total 3,125,217 3,194,482 69,265 452,907 450,474 (2,433)
To hedge against variable interest rate risks (US dollar) of securities abroad,
Conglomerate negotiated contracts in the DDI future market and Swap CHF x DOL with
BM&FBOVESPA, in accordance with installment maturities flow. The market value of
these derivatives totaled
R$ 3,351,579.
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The effectiveness verified in the hedge portfolio complies with the provisions of regulation in
force.
24 Borrowings and onlendings
Bank Consolidated
06/30/2012 06/30/2011 06/30/2012 06/30/2011
Domestic loans
With exchange variation (a) 13,336 10,076 13,336 10,076
Foreign loans
With exchange variation (b) 5,378,880 5,551,112 5,378,880 5,551,112
Local onlendings – National Treasury
Pre-fixed (c) 65,386 68,426 65,386 68,426
Post-fixed (d) 62,427 - 62,427 -
Local onlendings - BNDES
Pre-fixed (e) 993,992 1,478,229 993,992 1,478,229
Post-fixed (f) 1,906,059 2,304,825 1,906,059 2,304,825
With exchange variation (g) 105,763 63,132 105,763 63,132
Onlendings in the Country -
FINAME
Pre-fixed (h) 1,979,252 2,619,824 1,998,398 2,643,661
Post-fixed (i) 492,304 579,978 492,304 579,978
Total 10,997,399 12,675,602 11,016,545 12,699,439
(a) Rate of restatement in 2012: CDI + 0.40% p.a. + foreign exchange variation
(b) Rate of restatement in 2012: from 0.64% p.a. to 8.45% p.a. + foreign exchange / from 0.25% p.a. to 3.60% p.a. +
Libor.
(c) Rate of restatement in 2012: 6.75% p.a.
(d) Rate of restatement in 2012: Selic.
(e) Rate of restatement in 2012: from 1.50% p.a. to 8.00% p.a.
(f) Rate of restatement in 2012: from 9.08% p.a. to 9.91% p.a. + IPCA / from 6.50% p.a. to 10.50% p.a. + TJLP.
(g) Rate of restatement in 2012: from 0.90% p.a. to 6.27% p.a. + foreign exchange variation.
(h) Rate of restatement in 2012: from 0.30% p.a. to 9.80% p.a.
(i) Rate of restatement in 2012: from 6.50% p.a. to 11.50% p.a. + TJLP.
Cash flow hedge strategies
Bank and Consolidated 06/30/2012 06/30/2011
Cost
Market
value
Unrealized
gain (loss) Cost
Market
value
Unrealized
gain (loss)
Foreign
borrowings
863,657 883,125 19,468 - - -
Total 863,657 883,125 19,468 - - -
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In order to hedge the cash flow of Foreign borrowings against exchange variation (Euro), the
Conglomerate negotiated a swap agreement with BM&BOVESPA, maturing in 2013, making the
cash flow prefixed in Reais. The market value of this derivative totalized R$ 883,305.
The effectiveness verified in the hedge portfolio complies with the provisions of regulation in
force.
25 Other liabilities - Social and statutory
Bank Consolidated
06/30/2012 06/30/2011 06/30/2012 06/30/2011
Dividends and bonuses payable - 128,389 - 128,389
Provision for profit sharing 60,192 79,300 114,489 195,605
Total 60,192 207,689 114,489 323,994
26 Other liabilities - Taxes and social security contributions payable Bank Consolidated
06/30/2012 06/30/2011 06/30/2012 06/30/2011
Taxes and contributions on income payable 34,687 167,046 77,648 429,273
Taxes and contributions on outsourced services 585 854 3,836 10,182
Taxes and contribution on the salary 2,307 2,107 3,751 4,629
Taxes and contributions on interest earning bank
deposits
56,068 26,653 57,491 26,691
PIS 2,498 4,959 6,458 10,319
COFINS 1,873 4,494 20,999 27,368
ISS 976 1,234 3,793 6,700
Provision for tax risks 626,480 585,210 1,576,805 1,458,421
Provision for deferred taxes and contributions 178,797 32,959 1,576,958 823,331
Other taxes and contributions - 27 1 30
Total 904,271 825,543 3,327,740 2,796,944
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27 Other liabilities - Subordinated debts
Bank and Consolidated
06/30/2012 06/30/2011
Bank deposit certificate
Post-fixed (a) 3,255,599 2,902,704
Subordinated financing bill
With exchange variation (b) 2,481,287 1,708,479
Subordinated financing bills
Post-fixed (c) 2,089,131 1,069,045
Total 7,826,017 5,680,228
(a) Rate of restatement in 2012: from 0.49% p.a. to 1.67% p.a. + CDI / 7.22% p.a. + IGPM / from 7.86% p.a. to
8.00% p.a. + IPCA.
(b) Rate of restatement in 2012: 7.38% p.a. + PTAX.
(c) Rate of restatement in 2012: from 1.30% p.a. to 1.94% p.a. + CDI / from 115% to 119% for CDI / fom 6.71% p.a.
to 7.70% p.a. + IGPM / from 7.00% p.a. to 8.02% p.a. + IPCA.
Accounting hedge strategies Consolidated 06/30/2012 06/30/2011
Cost
Market
value
(book
value)
Unrealized
gain (loss) Cost
Market
value (book
value)
Unrealized
gain (loss)
Subordinated bill 3,066,296 3,137,272 70,976 1,861,142 1,708,479 (152,663)
Total 3,066,296 3,137,272 70,976 1,861,142 1,708,479 (152,663)
To hedge against exchange risks (US dollar) of a portion of subordinated debts, Conglomerate
negotiated contracts in the DDI futures market with BM&FBOVESPA, in accordance with
installment maturities flow. The market value of these derivatives amounts totalizes R$
3,109,559.
The effectiveness verified in the hedge portfolio complies with the provisions of regulation in
force.
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28 Other liabilities - Sundry
Bank Consolidated
06/30/2012 06/30/2011 06/30/2012 06/30/2011
Provision for personnel expenses 41,282 29,316 124,316 93,109
Provision for administrative expenses 6,002 6,860 70,076 58,785
Provision for contingent liabilities 20,002 30,932 499,040 172,961
Commission for intermediation of operations - - 21,063 65,783
Amounts subject to onlending to assignees - - 199,547 295,650
Provision for assigned credit losses 35,033 - 277,943 170,881
Credit card transactions - 596 297,957 208,612
Settlement of securities abroad 36,136 13,837 36,650 14,439
Loans and leases to be released 15 9,834 19,459 87,669
Liabilities regarding transactions related to
assignments (a)
- - 103,184 -
Others (b) 16,279 15,232 174,019 262,275
Total 154,749 106,607 1,823,254 1,430,164
(a) Refers to the obligations related to sales or transfer of financial assets with substantial
retention of risks and benefits.
(b) In the Consolidated, it basically refers to unprocessed amounts arising from the operational
cash flow from the loan operation portfolio and lease.
29 Shareholders' equity
a. Capital
Capital is represented by 103,949,376,612 nominative shares, 85,049,489,946 of which are
common shares with no par value and 18,899,886,666 nominative preferred shares with no
par value.
According to the Special Shareholders' Meeting held on December 30, 2011, was resolved
and approved, for a R$ 1,000,000 Capital Increase with the use of the "Expansion Reserve"
and without issuing new shares. The capital increase was approved by the Brazilian Central
Bank on March 15, 2012.
According to the Special Shareholders' Meeting held on June 27, 2012, was resolved
and approved the capital increase in the amount of R$ 2,000,000, issuing
22,410,553,662 new shares, fully subscribed and paid-in. The capital increase was
approved by the Brazilian Central Bank (BACEN) on June 29, 2012.
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b. Profit reserve
Legal reserve
Formed compulsorily on the basis of 5% of net income for the period, until it reaches 20% of
the capital. Legal reserve may not be formed when the result of its addition to capital
reserves is greater than 30% of capital. The legal reserve can only be used for capital
increase or to offset loss.
Expansion reserve
To fulfill the requirements established in the corporate legislation and rules of the
Central Bank of Brazil, Management proposes that, at the end of the year, the portion
of retained profits not distributed, if it exists, is destinated for ―Expansion reserve‖.
The balance in reserves will remain at the shareholders' disposal for a subsequent
resolution by the General Shareholders' Meeting.
c. Adjustments to equity value recognized in shareholders' equity in the period
Consolidated
01/01 to
06/30/2012
01/01 to
06/30/2011
Opening balance (75,346) (57,356)
Securities available for sale 647,605 (159,757)
Banco Votorantim S.A. 383,456 (160,578)
Subsidiaies 264,149 821
Cash flow hedge (19,159) -
Banco Votorantim S.A. (19,159) -
Tax effects (233,892) 64,231
Closing balance 319,208 (152,882)
30 Balance sheet by maturity breakdown
The "balance sheet by maturity breakdown" statement of June 30, 2012 was prepared
considering the maturity term of the assets and liabilities, regardless of the category
in which they are classified.
Regarding assets and liabilities of indefinite term, operations with assets are
classified in long-term assets and operations with liabilities in current liabilities.
Fixed assets and shareholders' equity are being presented as "over 5 years".
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In the "Balance Sheet" statement, securities classified in the "Trading securities"
category are presented as Current Assets, regardless of the maturity terms.
Lease transactions are presented at the financial method, which consists in
reclassifying leased property, plant and equipment to the caption lease transactions,
less residual value received in advance.
Bank
a. Assets
Up to 90
days
From 91 to
360 days
From 1 to
3 years
From 3 to
5 years
Above 5
years
Total
Cash and cash equivalents 90,451 - - - - 90,451
Interbank funds applied 22,055,753 20,869,658 13,790,515 18,701 - 56,734,627
Purchase and sale commitments – Own portfolio
3,071,514 169,930 - - - 3,241,444
Purchase and sale commitments. -
Financed operations
10,952,534 2,268,419 - - - 13,220,953 Purchase and sale commitments. - Free
movement
509,713 - - - - 509,713
Interbank deposits 7,326,243 18,431,309 13,790,515 18,701 - 39,566,768 Foreign currency investments 195,749 - - - - 195,749
Securities 3,091,039 2,149,229 4,372,548 6,403,712 25,562,273 41,578,801
Trading securities 144,202 1,240,746 1,360,169 2,110,409 21,425,166 26,280,692
Securities available for sale 2,946,837 908,483 3,012,379 4,293,303 4,137,107 15,298,109
Derivative financial instruments 933,890 820,675 614,070 383,692 179,896 2,932,223
Differential of swap 296,197 703,209 549,349 379,254 179,896 2,107,905
Term currency contracts 593 160 31 - - 784
Purchase of options - shares 2,521 1,660 - - - 4,181 Purchase of options – financial
assets/goods
513,070 31,550 5,636 - - 550,256
Credit derivatives 21,437 2,613 - - - 24,050 Non deliverable forward 100,072 81,483 59,054 4,438 - 245,047
Interbank
accounts/Interdepartmental
3,013,454 - - - - 3,013,454
Loans 3,970,050 5,625,473 9,772,579 - - 19,368,102
Allowance for loan losses (215,167) (109,469) (438,409) - - (763,045)
Other receivables 1,653,167 137,905 553,244 176,600 300,994 2,821,910
Foreign exchange portfolio 1,284,999 - - - - 1,284,999 Income receivable 42,688 1,016 - - - 43,704
Securities clearing accounts 123,333 6,479 7,920 333 - 138,065 Other 248,125 135,725 545,324 176,267 300,994 1,406,435
Allowance for loan losses (45,978) (5,315) - - - (51,293)
Other assets 21,866 42,950 113,736 51,091 7,838 237,481
Fixed assets - - - - 4,396,594 4,396,594
Total 34,614,503 29,536,421 28,778,283 7,033,796 30,447,595 130,410,598
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b. Liabilities
Up to 90
days
From 91
to 360
days
From 1 to
3 years
From 3
to 5 years
Above 5
years
Total
Deposits 8,231,274 10,334,922 3,865,375 112,890 749,317 23,293,778
Demand deposits 475,046 - - - - 475,046
Interbank deposits 1,489,092 979,584 630,766 3,972 709,405 3,812,819 Time deposits 6,267,136 9,355,338 3,234,609 108,918 39,912 19,005,913
Money market borrowings 23,257,473 11,052,437 3,339,750 137,648 146,389 37,933,697
Own portfolio 9,436,690 11,050,254 3,339,750 137,432 107,002 24,071,128 Third-party portfolio 13,278,747 - - - - 13,278,747
Free portfolio 542,036 2,183 - 216 39,387 583,822
Acceptances and endorsements 3,288,559 5,137,020 5,850,431 4,263,650 53,604 18,593,264
Interbank accounts /
Interdepartmental
130,096 - - - - 130,096
Borrowings and onlendings 2,043,541 4,124,245 3,466,899 667,886 694,828 10,997,399
Derivative financial instruments 12,961,772 4,738,602 2,835,193 121,405 217,992 20,874,964
Differential of swap 108,751 443,515 443,920 121,405 217,992 1,335,583
Term currency contracts 510 248 - - - 758
Purchase of options - shares 1,706 2,658 - - - 4,364 Purchase of options – Financial
assets/goods
495,691 16,884 9,150 - - 521,725
Option box 12,313,339 4,234,244 2,376,289 - - 18,923,872 Credit derivatives 19,039 3,953 - - - 22,992
Non deliverable forward 22,736 37,100 5,834 - - 65,670
Other liabilities 591,233 1,453,363 1,999,915 1,318,421 3,894,898 9,257,830
Collection and levy of taxes and alike
6,324 - - - - 6,324
Foreign exchange portfolio 265,024 21,328 - - - 286,352
Social and statutory 60,192 - - - - 60,192 Tax and social security 85,032 35,840 53,991 90,992 638,416 904,271
Securities clearing accounts 19,912 13 - - - 19,925
Subordinated debts - 1,396,182 1,945,924 1,227,429 3,256,482 7,826,017 Other 154,749 - - - - 154,749
Deferred income 25,636 27 35 61 - 25,759
Shareholders' equity - - - - 9,303,811 9,303,811
Total 50,529,584 36,840,616 21,357,598 6,621,961 15,060,839 130,410,598
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Consolidated
a. Assets Up to 90
days
From 91 to
360 days
From 1 to
3 years
From 3 to
5 years
Above 5
years
Total
Cash and cash equivalents 162,873 - - - - 162,873
Interbank funds applied 12,756,940 1,401,021 522,959 3,791 - 14,684,711
Purchase and sale commitments – Own
portfolio
2,303,588 169,930 - - - 2,473,518 Purchase and sale commitments. -
Financed operations
8,884,278 502,010 - - - 9,386,288
Purchase and sale commitments. - Free movement
509,713 - - - - 509,713
Interbank deposits 851,176 729,081 522,959 3,791 - 2,107,007
Foreign currency investments 208,185 - - - - 208,185
Securities 2,765,211 2,746,720 8,966,438 6,537,774 7,827,075 28,843,218
Trading securities 171,930 1,322,745 1,488,006 620,723 1,791,359 5,394,763
Securities available for sale 2,593,281 1,423,975 7,478,432 5,917,051 6,035,716 23,448,455
Derivative financial instruments 805,136 527,288 280,051 369,270 179,481 2,161,226
Differential of swap 167,443 409,822 215,330 364,832 179,481 1,336,908 Term currency contracts 593 160 31 - - 784
Purchase of options - shares 2,521 1,660 - - - 4,181
Purchase of options – financial assets/goods
513,070 31,550 5,636 - - 550,256
Credit derivatives 21,437 2,613 - - - 24,050
Non deliverable forward 100,072 81,483 59,054 4,438 - 245,047
Interbank
accounts/Interdepartmental
3,013,454 - - - - 3,013,454
Loans 10,196,381 16,283,756 25,816,497 2,949,412 21,430 55,267,476
Leases 1,869,606 243,112 315,690 11,675 - 2,440,083
Allowance for loan losses (1,633,790) (937,411) (1,630,782) (204,950) (1,465) (4,408,398)
Other receivables 3,113,726 1,629,582 3,315,345 306,730 1,163,644 9,529,027
Foreign exchange portfolio 1,284,999 - - - - 1,284,999
Income receivable 64,684 1,027 - - - 65,711 Securities clearing accounts 295,795 6,479 7,920 333 - 310,527
Other 1,514,226 1,627,391 3,307,425 306,397 1,163,644 7,919,083
Allowance for loan losses (45,978) (5,315) - - - (51,293)
Other assets 171,930 99,682 907,911 340,838 7,838 1,528,199
Fixed assets
- - - -
388,599 388,599
Total 33,221,467 21,993,750 38,494,109 10,314,540 9,586,602 113,610,468
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b. Liabilities
Up to 90
days
From 91
to 360
days
From 1 to
3 years
From 3
to 5 years
Above 5
years
Total
Deposits 8,202,914 10,131,407 3,772,019 112,890 749,317 22,968,547
Demand deposits 479,795 - - - - 479,795
Interbank deposits 1,455,983 787,319 548,182 3,972 709,405 3,504,861
Time deposits 6,267,136 9,344,088 3,223,837 108,918 39,912 18,983,891
Money market borrowings 17,605,351 11,054,998 3,345,014 137,648 146,389 32,289,400
Own portfolio 9,436,705 11,052,815 3,345,014 137,432 107,002 24,078,968
Third-party portfolio 7,626,610 - - - - 7,626,610
Free portfolio 542,036 2,183 - 216 39,387 583,822
Acceptances and endorsements 6,121,771 5,137,020 5,901,976 4,212,535 53,604 21,426,906
Interbank accounts /
Interdepartmental
130,120 - - - - 130,120
Borrowings and onlendings 2,044,001 4,125,340 3,479,340 673,036 694,828 11,016,545
Derivative financial instruments 1,001,139 1,109,592 400,573 117,482 217,993 2,846,779
Differential of swap 107,530 405,018 360,744 117,482 217,993 1,208,767
Term currency contracts 510 248 - - - 758 Purchase of options - shares 1,706 2,658 - - - 4,364
Purchase of options – Financial
assets/goods
495,691 16,884 9,150 - - 521,725 Option box 353,927 643,731 24,845 - - 1,022,503
Credit derivatives 19,039 3,953 - - - 22,992
Non deliverable forward 22,736 37,100 5,834 - - 65,670
Other liabilities 3,214,654 1,997,197 3,091,179 1,384,815 3,914,756 13,602,601
Collection and levy of taxes and alike 12,864 - - - - 12,864
Foreign exchange portfolio 265,024 21,328 - - - 286,352
Social and statutory 114,489 - - - - 114,489
Tax and social security 1,185,395 340,496 986,233 157,342 658,274 3,327,740
Securities clearing accounts 211,872 13 - - - 211,885
Subordinated debts - 1,396,182 1,945,924 1,227,429 3,256,482 7,826,017
Other 1,425,010 239,178 159,022 44 - 1,823,254
Deferred income 25,636 27 35 61 - 25,759
Shareholders' equity - - - - 9,303,811 9,303,811
Total 38,345,586 33,555,581 19,990,136 6,638,467 15,080,698 113,610,468
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31 Loans
Bank Consolidated
01/01 to
06/30/2012
01/01 to
06/30/2011
01/01 to
06/30/2012
01/01 to
06/30/2011
Advances to depositors 89 91 89 91
Loans 713,768 663,169 1,632,145 1,318,525
Discounted securities 5,984 3,885 5,984 3,885
Loans and financing 200,406 228,605 3,135,102 3,346,461
Income from housing loans and
developments
21,325 6,094 21,325 6,094
Export financing 292,802 64,238 292,802 64,238
Financing operations in foreign currency 16,393 (1,931) 16,393 (1,931)
Rural financing agreements 26,873 59,257 26,873 59,257
Income from credit assignments (a) - - (131,509) 422,735
Recovery of loans written off 7,842 2,120 89,785 91,982
Income from rights arising from share loans - 3,220 - 3,220
Others 1,119 1,462 (269,061) (355,024)
Total 1,286,601 1,030,210 4,819,928 4,959,533
(a) On June 30, 2012, this balance refers basically to income from anticipated settlement.
32 Leases
Consolidated
01/01 to 06/30/2012 01/01 to 06/30/2011
Lease transactions 890,024 1,142,342
Financial lease 432,692 824,830
Income from the sale of leased assets 451,703 313,748
Recovery of loans written off 5,629 3,764
Lease expenses (678,506) (861,662)
Financial lease (678,506) (861,662)
Total 211,518 280,680
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33 Securities
Bank Consolidated
01/01 to
06/30/2012
01/01 to
06/30/2011
01/01 to
06/30/2012
01/01 to
06/30/2011
Money market borrowings 661,713 780,119 606,416 780,119
Interbank deposits 2,120,610 2,214,763 71,504 58,806
Fixed income securities 2,047,757 1,889,748 1,389,589 936,979
Securities abroad 124,604 152,880 124,608 152,891
Variable income securities 170,232 353,623 170,232 353,385
Investments in investment funds 52,834 25,627 238,165 204,966
Adjustment to market value (5,429) (161,255) (6,652) (165,287)
Others (125,979) (12,718) (126,850) (12,875)
Total 5,046,342 5,242,787 2,467,012 2,308,984
34 Derivative financial instruments
Bank Consolidated
01/01 to
06/30/2012
01/01 to
06/30/2011
01/01 to
06/30/2012
01/01 to
06/30/2011
Swap contracts 195,488 (292,220) (71,251) (483,777)
Forward contracts (519) 2,635 (519) 2,635
Futures contracts (126,117) (266,943) (1,414,201) (179,821)
Agreements of share options (9,268) (2,609) (9,268) (2,609)
Option agreement – Financial
assets/goods
82,945 9,110 82,945 9,110
Credit derivatives 23,408 13,481 23,408 13,481
―Box‖ of options (1,168,529) (1,187,579) (104,258) (177,537)
Non deliverable forward 61,929 (75,345) 61,929 (75,345)
Adjustment to market value 87,234 (20,610) 998,706 (185,863)
Others (7,264) (14,701) (7,264) (14,701)
Total (860,693) (1,834,781) (439,773) (1,094,427)
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35 Foreign exchange operations
Bank Consolidated
01/01 to
06/30/2012
01/01 to
06/30/2011
01/01 to
06/30/2012
01/01 to
06/30/2011
Income from exports 24,589 17,200 24,589 17,200
Income from imports 822 6,375 822 6,375
Financial income (loss) (101) (150) (101) (150)
Variations and differences in rates 52,548 (14,988) 52,548 (14,988)
Cash and cash equivalents in foreign
currencies
9,070 6,705 9,053 6,683
Recovery of loans written off 97 202 97 202
Total 87,025 15,344 87,008 15,322
36 Money market expenses
Bank Consolidated
01/01 to
06/30/2012
01/01 to
06/30/2011
01/01 to
06/30/2012
01/01 to
06/30/2011
Securities transactions abroad (907,329) (30,057) (907,329) (30,057)
Interbank deposits (173,638) (72,589) (158,117) (57,892)
Time deposits (1,112,186) (1,455,580) (1,111,181) (1,455,580)
Purchase and sale commitments (1,711,969) (2,045,399) (1,565,166) (1,969,554)
Agribusiness credit bills (LCA) (78,963) (79,967) (78,963) (79,967)
Real estate credit note (983) (184) (983) (184)
Financing bills (537,951) (267,625) (537,951) (267,625)
Debentures - - (142,481) (133,579)
Adjustment to market value - 216,655 - 216,655
Others (14,906) (16,475) (14,906) (16,475)
Total (4,537,925) (3,751,221) (4,517,077) (3,794,258)
37 Expenses with borrowings and onlendings Bank Consolidated
01/01 to
06/30/2012
01/01 to
06/30/2011
01/01 to
06/30/2012
01/01 to
06/30/2011
Domestic loans (787) (289) (787) (289)
Foreign loans (470,272) (9,386) (470,272) (9,381)
National Treasury Onlendings (3,456) - (3,456) -
BNDES Onlendings (119,489) (123,535) (119,489) (124,756)
Onlending - FINAME (58,753) (75,307) (59,502) (76,058)
Obligations to foreign bankers (109,489) 29,495 (109,489) 29,495
Adjustment to market value (24,244) - (24,244) -
Foreign exchange 297,963 193,167 297,963 194,388
Total (488,527) 14,145 (489,276) 13,399
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38 Fee income
Bank Consolidated
01/01 to
06/30/2012
01/01 to
06/30/2011
01/01 to
06/30/2012
01/01 to
06/30/2011
Management of investment funds - - 71,540 57,242
Collection income 6,761 4,577 6,761 4,577
Commissions on placing of securities 36,068 32,583 34,756 34,712
Brokerage of Stock Exchange transactions - - 12,293 12,104
Income from custody services 29 - 291 -
Income from guarantees granted 82,456 67,605 82,456 67,605
Credit card transactions - - 12,090 8,708
Insurance brokerage commission - - - 16,657
Financial advisory 9,863 4,108 10,432 4,108
Income from banking services - - 262 13,054
Others 4,119 3,684 13,482 6,788
Total 139,326 112,557 244,363 225,555
39 Banking fees Bank Consolidated
01/01 to
06/30/2012
01/01 to
06/30/2011
01/01 to
06/30/2012
01/01 to
06/30/2011
Individual 7 - 241,990 389,385
Master file registration - - 146,354 262,006
Transfers - - 1 1
Contract amendments - - 5,463 4,917
Appraisal of assets 7 - 69,009 108,292
Credit cards - - 16,772 9,878
Others - - 4,391 4,291
Legal entity 1,469 4,778 5,899 12,491
Master file registration - - 3,327 6,153
Transfers 733 4,403 741 4,408
Appraisal of assets - - 1,095 1,553
Others 736 375 736 377
Total 1,476 4,778 247,889 401,876
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40 Personnel expenses Bank Consolidated
01/01 to
06/30/2012
01/01 to
06/30/2011
01/01 to
06/30/2012
01/01 to
06/30/2011
Fees (5,706) (7,113) (10,088) (13,581)
Benefits (26,886) (17,532) (85,038) (59,961)
Social charges (37,800) (35,724) (91,133) (89,544)
Dividends (108,055) (99,535) (288,641) (250,381)
Training (3,368) (827) (3,922) (1,433)
Total (181,815) (160,731) (478,822) (414,900)
41 Other administrative expenses
Bank Consolidated
01/01 to
06/30/2012
01/01 to
06/30/2011
01/01 to
06/30/2012
01/01 to
06/30/2011
Water, energy and gas (1,110) (878) (2,761) (2,636)
Rentals (21,175) (20,420) (65,741) (65,802)
Communications (4,824) (6,021) (38,541) (47,370)
Maintenance and preservation of
assets
(2,361) (2,318) (7,253) (9,268)
Material (330) (727) (1,061) (2,869)
Data processing (24,497) (32,840) (80,112) (72,767)
Promotions and public relations (1,706) (7,051) (2,861) (10,322)
Advertising and publicity (263) (1,140) (1,993) (4,227)
Publications (431) (632) (868) (737)
Insurance (685) (669) (5,736) (5,497)
Services of the financial system (18,348) (16,781) (87,893) (75,222)
Outsourced services (1,989) (1,869) (6,170) (8,583)
Surveillance and security (559) (670) (1,925) (3,384)
Specialized technical services (25,402) (32,904) (220,037) (202,361)
Transportation (2,336) (2,367) (9,251) (11,683)
Traveling (2,227) (3,171) (4,812) (18,068)
Judicial and notary public fees (4,895) (4,617) (125,389) (84,494)
Amortization (1,385) (1,259) (4,335) (12,369)
Depreciation (4,153) (3,973) (11,089) (9,810)
Others (2,278) (3,213) (56,224) (49,525)
Total (120,954) (143,520) (734,052) (696,994)
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42 Tax expenses
Bank Consolidated
01/01 to
06/30/2012
01/01 to
06/30/2011
01/01 to
06/30/2012
01/01 to
06/30/2011
ISS (6,824) (5,648) (23,389) (32,078)
PIS (4,489) (8,313) (19,294) (30,123)
COFINS (27,626) (51,158) (118,730) (185,361)
Federal taxes (32) - (2,348) -
State taxes (26) - (27) -
Local taxes (1,114) (1,097) (2,936) (2,103)
Taxes abroad (23) - (283) -
Updating tax liabilities (18,195) (20,486) (52,063) (58,306)
Others (82) (14,105) (2,936) (22,311)
Total (58,411) (100,807) (222,006) (330,282)
43 Other operational income
Bank Consolidated
01/01 to
06/30/2012
01/01 to
06/30/2011
01/01 to
06/30/2012
01/01 to
06/30/2011
Foreign exchange variation of foreign
investments
51,828 - 56,552 -
Reversal of provision for contingent
liabilities
141 3,589 6,582 4,839
Monetary restatement - judicial deposit 5,465 6,867 16,073 18,873
Monetary variation assets 1,023 5,646 6,092 10,547
Reimbursement of costs associated - - 12,120 10,245
Others 16 621 102 1,107
Total 58,473 16,723 97,521 45,611
44 Other operational expenses Bank Consolidated
01/01 to
06/30/2012
01/01 to
06/30/2011
01/01 to
06/30/2012
01/01 to
06/30/2011
Costs associated with production (1,431) (852) (1,431) (852)
Provision for contingent liabilities (8,053) (2,085) (173,429) (41,252) Foreign exchange variation of foreign
investments
- (43,512) - (46,462)
Civil reparations - - (88,927) (37,463)
Judicial deposits (708) - (5,521) -
Others (681) (2,072) (23,615) (27,845)
Total (10,873) (48,521) (292,923) (153,874)
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45 Non-operating income (loss) Bank Consolidated
01/01 to
06/30/2012
01/01 to
06/30/2011
01/01 to
06/30/2012
01/01 to
06/30/2011
Disposal of assets (165) (138) (79,569) (19,991)
Sales of investments - - - 84
Investments via tax incentives 1,626 2,118 6,342 10,253
Others 70 3 849 26,656
Total 1,531 1,983 (72,378) 17,002
46 Income and social contribution taxes
a. Charges due on operations
Bank Consolidated
01/01 to
06/30/2012
01/01 to
06/30/2011
01/01 to
06/30/2012
01/01 to
06/30/2011
Income / (Loss) before income tax, social
contribution and interest (1,077,638) 693,750 (1,879,906) 841,541
Charges at the current nominal rate 431,055 (277,500) 751,962 (336,616)
Exclusions / (Additions) (462,900) 113,642 (826,767) (72,645)
Tax losses for income tax 9,188 44,773 (38,341) (27,296)
Negative basis for social contribution 4,694 27,374 (32,036) 27,668
Market adjustments of securities (69,818) (63,106) (70,308) (64,717)
Derivatives - adjustment to market value 65,000 (58,328) (281,104) (17,037)
Market adjustments for loans analysis 24,967 (9,971) 371,064 (62,329)
Market adjustments for lease - - 18,492 (13,744)
Profit sharing 29,858 33,998 82,791 75,846
Allowance for loan losses (80,134) (20,829) (891,421) (172,786)
Provision for contingencies (3,187) (835) (66,761) (16,263)
Derivatives – Cash basis (1,817) (7,675) (1,817) (6,075)
Provision for losses on credits assigned - - 4,734 (36,317)
Excess (insufficient) depreciation - - (31,204) 101,318
Income from foreign branches - (7,091) - (7,091)
Additions and permanent exclusions and tax
incentives (440,792) 175,332 119,971 150,196
Others (859) - (10,827) (4,018)
Current income and social contribution
taxes (31,845) (163,858) (74,805) (409,261)
Deferred income and social contribution
taxes 29,310 154,314 (312,810) 347,725
Total income and social contribution taxes (2,535) (9,544) (387,615) (61,536)
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b. Deferred income and social contribution taxes with an impact on result in the
period
Bank Consolidated
01/01 to
06/30/2012
01/01 to
06/30/2011
01/01 to
06/30/2012
01/01 to
06/30/2011
Tax credit
Additions / (Exclusions)
Tax losses for income tax (9,188) (44,774) 38,341 27,296
Negative basis for social contribution (4,694) (27,374) 32,036 (27,668)
Market adjustments of securities - (18,848) - (18,848)
Derivatives - adjustment to market
value (47,642) 3,614 298,326 3,291
Allowance for loan losses 80,134 20,829 891,421 172,786
Provision for contingencies 3,187 835 66,761 16,263
Derivatives – Cash basis - - - (1,600)
Provision for losses on assigned credits - - (4,734) 36,317
Excess (insufficient) depreciation - - 9,361 (267,984)
Income from foreign branches - 7,091 - 7,091
Others 859 - 10,827 4,018
Total 22,656 (58,627) 1,342,339 (49,038)
Bank Consolidated
01/01 to
06/30/2012
01/01 to
06/30/2011
01/01 to
06/30/2012
01/01 to
06/30/2011
Deferred tax liabilities
Additions / (Exclusions)
Market adjustments of securities 69,818 81,954 70,308 83,565
Derivatives - adjustment to market value (17,358) 54,714 (17,222) 13,746
Market adjustment s for loans and lease (24,967) 9,971 (389,556) 76,073
Derivatives – Cash basis 1,817 7,675 1,817 7,675
Excess (insufficient) depreciation - - 21,843 166,666
Total 29,310 154,314 (312,810) 347,725
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c. Deferred income and social contribution taxes with effects on equity accounts in
the period
Bank Consolidated
01/01 to
06/30/2012
01/01 to
06/30/2011
01/01 to
06/30/2012
01/01 to
06/30/2011
Assets (Other credits - Sundry)
Opening balance 670,447 509,038 2,887,586 2,120,103
Tax losses for income tax (9,188) (44,773) 38,341 27,296
Negative basis for social contribution (4,694) (27,374) 32,036 (27,668)
Market adjustments of securities - 51,735 (6,567) 51,735
Derivatives - adjustment to market value (47,642) 3,614 298,326 3,291
Allowance for loan losses 80,134 20,829 891,421 172,786
Provision for contingencies 3,187 835 66,761 16,263
Derivatives – Cash basis - - - (1,600)
Provision for assigned credit losses - - (4,734) 36,317
Income from foreign branches - 7,091 - 7,091
Excess (insufficient) depreciation - - 9,361 (267,984)
Others 859 - 10,827 4,018
Closing balance 693,103 520,995 4,223,358 2,141,648
Bank Consolidated
01/01 to
06/30/2012
01/01 to
06/30/2011
01/01 to
06/30/2012
01/01 to
06/30/2011
Liabilities (Other liabilities - Taxes and social
security)
Opening balance 79,784 180,922 1,036,732 1,164,705
Market adjustments of securities 64,075 (75,603) 162,679 (77,213)
Derivatives - adjustment to market value 11,788 (54,714) 11,651 (13,746)
Market adjustments for loans analysis 24,967 (9,971) 389,556 (76,074)
Derivatives – Cash basis (1,817) (7,675) (1,817) (7,675)
Excess (insufficient) depreciation - - (21,843) (166,666)
Closing balance 178,797 32,959 1,576,958 823,331
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d. Composition of tax credit
Bank Consolidated
06/30/2012 06/30/2011 06/30/2012 06/30/2011
Tax losses for income tax 66,591 59,727 894,849 861,124
Negative basis for social contribution 32,060 27,792 69,711 29,119
Market adjustments of securities - 51,735 - 51,735
Derivatives - adjustment to market value - 3,614 404,061 6,011
Allowance for loan losses 364,539 191,507 2,432,613 999,443
Provision for contingencies 8,568 3,163 201,279 59,736
Provision for assigned credit losses - - 97,165 68,352
Provision for legal obligation 81,877 81,877 223,003 223,002
Income from foreign branches 138,433 101,580 138,433 101,580
Excess (insufficient) depreciation
offsetting - - (258,889) (267,984)
Others 1,035 - 21,133 9,530
Total 693,103 520,995 4,223,358 2,141,648
e. Tax credit collection expectation
Bank
Consolidated
Nominal
value
Present
value
Nominal
value
Present
value
In 2012 35,677 34,389 491,320 473,581
In 2013 113,074 100,873 1,424,545 1,270,831
In 2014 55,904 45,573 781,840 637,356
In 2015 187,829 138,928 381,649 282,288
As of 2015 300,619 167,576 1,144,004 535,941
Total 693,103 487,339 4,223,358 3,199,997
In the six-month period ended June 30, 2012, tax credits in the amount of R$ 34,020,
corresponding to 117% of respective usage projection included in the technical study,
was verified.
There are no tax credits not recorded.
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f. Breakdown of deferred tax liabilities
Bank Consolidated
06/30/2012 06/30/2011 06/30/2012 06/30/2011
Market adjustments of securities 79,517 - 180,851 3,008
Derivatives - adjustment to market value 11,789 - 11,792 136,619
Market adjustments for loans analysis 86,600 28,801 779,349 54,250
Derivatives – Cash basis 891 4,158 891 4,158
Excess (insufficient) depreciation - - 604,075 625,296
Total 178,797 32,959 1,576,958 823,331
47 Related party transactions
a. Summary of related party transactions
06/30/2012 06/30/2011
Assets / (Liabilities)
Cash and cash equivalents
Banco do Brasil S.A. and subsidiaries 323 21,406
Interbank funds applied
Banco do Brasil S.A. and subsidiaries - 1,899,996
BV Financeira S.A. - Crédito, Financiamento e Investimento 42,078,319 37,203,995
Relation with correspondents
Banco do Brasil S.A. and subsidiaries 51 -
Securities
Votorantim Finanças S.A. and subsidiaries - 844
BV Leasing Arrendamento Mercantil S.A. 21,591,737 164,551
Votorantim C.T.V.M. Ltda. - 15,112
Derivative financial instruments
Banco do Brasil S.A. and subsidiaries 66,869 205,476
Votorantim Finanças S.A. and subsidiaries 5,060 5,149
BV Leasing Arrendamento Mercantil S.A. 765,488 -
Votorantim C.T.V.M. Ltda. 5,510 -
Loans and financings
Banco do Brasil S.A. and subsidiaries 30,331 -
Foreign exchange - Active position
Banco do Brasil S.A. and subsidiaries 101,035 -
Prepaid expenses
Banco Votorantim Securities Inc. - 199
06/30/2012 06/30/2011
Assets / (Liabilities)
Deposits
Banco do Brasil S.A. and subsidiaries (24,689) (264,705)
Votorantim Finanças S.A. and subsidiaries (181,800) (179,817)
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06/30/2012 06/30/2011
BV Financeira S.A. - Crédito, Financiamento e Investimento (2,030) (714)
BV Leasing Arrendamento Mercantil S.A. (216) (620)
Votorantim C.T.V.M. Ltda. (247,519) (217,523)
Votorantim Asset Management D.T.V.M Ltda. (82,796) (67,052)
BV Participações S.A. and subsidiaries (158,474) (172,005)
Votorantim Bank Limited (1) (7,505)
Money market borrowings
Votorantim Finanças S.A. and subsidiaries
-
(11,332)
Foreign exchange portfolio - Liability position
Votorantim Finanças S.A. and subsidiaries (1,286) (1,521)
Obligations related to purchase and sale commitments
Banco do Brasil S.A. and subsidiaries (1,102,337) (480,920)
Votorantim Finanças S.A. and subsidiaries (342,311) (299,331)
BV Financeira S.A. - Crédito, Financiamento e Investimento - (1,513,509)
BV Leasing Arrendamento Mercantil S.A. (5,652,137) -
Borrowings and onlendings
Banco do Brasil S.A. and subsidiaries (30,295) -
Derivative financial instruments
Banco do Brasil S.A. and subsidiaries (35,274) (1,014,814)
Votorantim Finanças S.A. and subsidiaries (857,222) (1,572,086)
BV Leasing Arrendamento Mercantil S.A. (18,028,064) (18,873,110)
Votorantim C.T.V.M. Ltda. (121) (18,071)
Votorantim Bank Limited
06/30/2012 06/30/2011
Assets / (Liabilities)
Other values to receive / (Pay)
Banco do Brasil S.A. and subsidiaries (136,755) -
BV Financeira S.A. - Crédito, Financiamento e Investimento 674 (27)
BV Leasing Arrendamento Mercantil S.A. (450) -
Votorantim C.T.V.M. Ltda. (129) (223)
Banco Votorantim Securities Inc. (519) -
Votorantim Bank Limited (177) (111)
BV Participações S.A. and subsidiaries (55,736) (17,339)
Dividends
Votorantim Finanças S.A. and subsidiaries - (127,531)
01/01 to
06/30/2012
01/01 to
06/30/2011
Income / (Expense)
Loans
Banco do Brasil S.A. and subsidiaries (109,423) 8,651
Securities
Banco do Brasil S.A. and subsidiaries 3,289 56,415
BV Financeira S.A. – Crédito, Financiamento e Investimento 2,104,427 2,155,963
BV Leasing Arrendamento Mercantil S.A. 948,436 959,366
Votorantim Finanças S.A. and subsidiaries - (25)
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01/01 to
06/30/2012
01/01 to
06/30/2011
Derivative financial instruments
Banco do Brasil S.A. and subsidiaries (36,643) (25,670)
Votorantim Finanças S.A. and subsidiaries 13,399 (2,940)
Votorantim C.T.V.M. Ltda. 1,697 (2,897)
BV Leasing Arrendamento Mercantil S.A. (799,228) (1,051,539)
Foreign exchange operations
Banco do Brasil S.A. and subsidiaries (13,293) 158,088
Votorantim Finanças S.A. and subsidiaries (212) 271
01/01 to
06/30/2012
01/01 to
06/30/2011
Income / (Expense)
Market funding operations
Banco do Brasil S.A. and subsidiaries (23,856) (71,975)
Votorantim Finanças S.A. and subsidiaries (24,821) (51,610)
BV Financeira S.A. – Crédito, Financiamento e Investimento - 75,882
BV Leasing Arrendamento Mercantil S.A. (147,441) -
Votorantim C.T.V.M. Ltda. (12,098) 10,665
Votorantim Asset Management D.T.V.M. Ltda. (4,257) 4,030
Votorantim Bank Limited (1) 5
BV Participações S.A. and subsidiaries (6,166) (8,026)
Borrowings and onlendings
Banco do Brasil S.A. and subsidiaries (524) -
Income / (Expenses) from rendering of services
BV Financeira S.A. - Crédito, Financiamento e Investimento 1,396 1,378
BV Leasing Arrendamento Mercantil S.A. 92 -
Banco Votorantim Securities Inc. (4,062) (929)
Other administrative expenses
BV Participações S.A and subsidiaries (102,282) (37,764)
Other income / (expenses)
Banco do Brasil S.A. and subsidiaries 63 -
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b. Remuneration of management key personnel
On June 30, 2012, Banco Votorantim spent R$ 73,913 as remuneration of Management key
personnel.
Consolidated
Fees (10,088)
Bonuses (46,550)
Social charges (17,275)
Total (73,913)
c. Employee benefits
There are no post-employment benefits, such as pensions, other retirement benefits,
post-employment life insurance and medical care, other long-term benefits to
employees, including long service leave and other leaves, jubilee or other benefits per
years of service, share-based remuneration and rescission of contract benefits, except
those provided for in collective bargaining of the category.
48 Related credit transactions
The Bank operates with related credit transactions pursuant to CMN Resolution 2921/02.
On June 30, 2012 the balances of related credit transactions and of funds raised for
investments, as well as the respective income, were as follows:
01/01 to 06/30/2012
Assets /
(Liabilities)
Income /
(Expense)
Related credit transactions
Loans 88,144 4,255
Obligations related to credit
transactions
Time deposits (21,843) (961)
Financial bills (65,528) (2,882)
Net income (loss) of related
operations
412
On June 30, 2012 and 2011 there were no non-performing escrow credit transactions, or
court issues on credit transactions or on funding for such transactions.
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49 Contingent assets, liabilities and legal obligations
a. Breakdown of contingent liabilities classified in the probable risk category
Bank Consolidated
06/30/2012 06/30/2011 06/30/2012 06/30/2011
Tax contingencies (a) 1,460 23,026 4,802 24,559
Civil contingencies (b) 218 4 231,506 33,302
Labor contingencies (c) 19,784 7,902 267,534 115,100
Legal obligation (d)
625,020 585,210 1,572,003
1,458,421
Total 646,482 616,142 2,075,845 1,631,382
(a) In the Consolidated, refers, basically, to tax issues involving ISS (service tax)
amounting to R$1,143, and CSSL (social contribution on net income) amounting to
R$1,459; and were presented under caption Other liabilities - Tax and social
security.
(b) In the Consolidated figures, they refer basically to legal claims of the following
nature: refusal of the total real cost of the agreements entered into; review of
contractual conditions and charges; and fees, being presented under caption Other
liabilities - Sundry.
(c) In the Consolidated, they mostly refer to lawsuits filed by former employees
involving indemnities, overtime, working time exemption, supplement per function
and representation, among other matters, and were presented under caption Other
liabilities - Sundry.
(d) In the consolidated, with reference, basically, to claims of non-payment of COFINS
based on the revenues not derived from monthly invoicing (expansion of the
calculation basis introduced by Law 9718/98).
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b. Changes in contingent liabilities classified in the probable risk category
Tax claims
Civil claims
Labor claims
Legal obligation
Bank
01/01 to
06/30/2012
01/01 to
06/30/2011
01/01 to
06/30/2012
01/01 to
06/30/2011
01/01 to
06/30/2012
01/01 to
06/30/2011
01/01 to
06/30/2012
01/01 to
06/30/201
1
Opening
balance
1,680 3,741 157 4 11,879 5,816 606,745 564,825
Formations
87 22,774 61 - 7,905 2,086 - -
Reversals
(141) (3,489) - - - - - -
Restatements
40 - - - - - 18,275 20,385
Write-offs
(206) - - - - - - -
Closing
balance
1,460 23,026 218 4 19,784 7,902
625,020 585,210
Tax claims
Civil claims
Labor claims
Legal obligation
Consolidate
d
01/01 to
06/30/2012
01/01 to
06/30/2011
01/01 to
06/30/2012
01/01 to
06/30/2011
01/01 to
06/30/2012
01/01 to
06/30/2011
01/01 to
06/30/2012
01/01 to
06/30/201
1
Opening
balance
5,309 6,413 192,217 23,290 139,633 83,988 1,519,861 1,400,348
Formations
1,237 22,845 43,608 10,012 128,585 31,170 - -
Reversals
(1,579) (4,872) (4,319) - (684) (58) - -
Restatements
39 173 - - - - 52,142 58,073
Write-offs
(204) - - - - - - -
Closing
balance
4,802 24,559 231,506 33,302 267,534 115,100 1,572,003 1,458,421
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c. Breakdown of contingent liabilities classified in the possible risk category
Bank Consolidated
06/30/2012 06/30/2011 06/30/2012 06/30/2011
Tax contingencies (a) 483,980 361,323 1,001,279 651,642
Civil contingencies (b) 3,169 4,100 19,600 90,157
Labor contingencies (c) 1,646 1,762 23,916 30,298
Total 488,795 367,185 1,044,795 772,097
(a) The Consolidated refers to, basically: a) IRPJ/CS on equity investments abroad in
the amount of R$185,536; b) IRPJ/CS on contingent COFINS and inflation
adjustment amounting to R$ 381,215; c) Income and social contribution tax unduly
offset and bonuses to senior managers totaling R$ 22,914; d) Corporate income tax
allocated to FINOR totaling R$ 33,192; e) INSS on profit sharing and overseas
profits totaling R% 41,693; f) ISS (Tax on Services) in the amount of R$ 50,754; g)
INSS in the amount of R$ 134,542; and h) PIS/Cofins on demutualization totaling
R$ 17,845.
(b) The Consolidated refers to, basically, to collection actions.
(c) In the Consolidated, they mostly refer to lawsuits filed by former employees
involving indemnities, overtime, working time exemption, supplement per function
and representation, among other matters.
d. Judicial deposits presented in Other credits – Sundry
Bank Consolidated
06/30/2012 06/30/2011
06/30/2012 06/30/2011
Tax contingencies 163,147 142,537 416,558 372,772
Civil contingencies - - 64,936 38,301
Labor contingencies 3,330 4,365 37,358 27,444
Others 33 25 156 130
Total 166,510 146,927 519,008 438,647
e. Public civil suits
The Institution has contingent losses involving public lawsuits which, based on legal
advisors opinion and Management judgment, has possible risk of loss. Due to their
current stage, the measurement of the amounts involved of these actions could not
be safely determined.
f. Contingent assets
There is no contingent asset recorded.
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g. Other commitments
The Bank filed at the Internal Revenue Service its adhesion to the Special
Installment Payment Program - PAES, created by Law 10684/03, of the Federal
Government. Adhesion to the program allowed the scheduling of PIS, relating to the
period from January 2000 to January 2003. The amount included in the program is
R$ 3,046.