Banco do Brasil 4Q08

Transcription

1 Banco do Brasil 4Q08 1

2 Disclaimer This presentation contains references and statements, planned synergies, increasing estimates, projections of results and future strategy for Banco do Brasil, it s Associated and Affiliated Companies and Subsidiaries. Although these references and statements reflect the management s belief, they also involve imprecision and high difficult risks to be foreseen, consequently, they may conduct to a different result than the one anticipated here. These expectations are highly dependent on market conditions, on Brazil s economic and banking system performances, as well as on international market one. Banco do Brasil is not responsible for bringing up to date any estimate in this presentation. 2

3 4Q08 net income reinforced by one-off off items , ,803 6,685 1,290 2,347 1,644 2,037 2,944 5,058 1,217 1,559 1,463 1,867 1,626 4Q07 1Q08 2Q08 3Q08 4Q Net Income R$ million Return on Equity - % Recurring Net Income R$ million Recurring Return on Equity - % 3

4 One-off items sum R$ 1.3 billion R$ million 4Q08 Net Income 2,944 One-off items Previ Actuarial Gains Recognition 5,326 Cassi Actuarial Losses Recognition 1,259 Additional Provision for Loan Losses 1,594 Taxes and Profit Sharing on one-off items 1,110 Economic Plans One-off items - Total 1,318 Recurring Net Income 1,626 4

5 A Quarter full of challenges and opportunities 5

6 Reserve Requirements loosening intensified transactions with other financial institutions R$ 14 billion were contracted in operations with financial institutions until Dec/2008 The Reserve Requirements loosening had an impact of R$ 11.3 billion in liquidity Regular Compulsory 10.7% Transactions totaled R$ 9.8 billion as of Dec/08, of which R$ 3.8 billion accounted in the loan portfolio Additional* Time Deposits Demand Deposits Saving Deposits 22.2% 24.7% 42.4% 60.8% 31.6% 7.6% Payroll Loans Interbank Transactions Car Loans (*) Additional reserve requirements over demand deposits and time deposits 6

7 BB expands loan portfolio to all economic segments % over 4Q07 3Q08 R$ billion Q07 1Q08 2Q08 3Q08 4Q08 Market Share¹ - % Businesses Individuals Agribusiness - Individuals Agribusiness - Businesses Foreign (1) Domestic Loan Portfolio 7

8 Payroll and Car Loans maintain a strong growth Loan Portfolio - Individuals - R$ billion % over 4Q07 3Q (2.0) 7.4 (9.2) Q07 1Q08 2Q Q Q Payroll Loans Other Credit Cards Car Loans Overdraft Account Consumer Finance Backed by Direct Deposits 8

9 Businesses loan portfolio almost reaching R$ 100 billion Loan Portfolio - Businesses - R$ billion % over 4Q07 3Q Q07 1Q08 2Q08 3Q08 4Q Middle and Large Companies SME 9

10 R$ million While individuals portfolio slowed down, loan to businesses focused in working capital transactions Businesses Working Capital Businesses - Advance on Export Contracts 1,367 1,227 2,896 1,455 1,290 3,758 2,167 1,820 2,449 2,856 2,722 2,393 Jul/08 Aug/08 Sep/08 Oct08 Nov/08 Dec/08 Jul/08 Aug/08 Sep/08 Oct08 Nov/08 Dec/08 Individuals Car Loans Individuals - Payroll Loans Jul/08 Aug/08 Sep/08 Oct/08 Nov/08 Dec/08 Jul/08 Aug/08 Sep/08 Oct08 Nov/08 Dec/08 10

11 R$ billion New operations are back to the same level of September in the Banking Industry, while BB raises its market share Jul/08 Aug/08 Sep/08 Oct/08 Nov/08 Dec/08 BI* BB Market Share - % (*) Banking Industry - contracted operations loan as reference for interest rate 11

12 BB grows more than Banking Industry and Private Banks 20.3% CAGR¹ 19.9% 24.0% BI Private BB² Loan Portfolio³ Growth % ¹Compound Annual Growth Rate ²Total Loan Portfolio (includes loan portfolio abroad) ³Balance of the loan portfolio in Dec/2008 over Dec/2001 BI Private BB² 12

13 Funding Cost - % of Selic Expressive growth in funding allowed business expansion R$ billion (average balance) Volume Cost Volume Cost Volume Cost 4Q07 3Q08 4Q08 Deposits % % % Core Deposits¹ % % % Money Market Borrowing % % % Total Funding % % % Time Deposits - Balance R$ billion R$ billion Time Deposits - Inflow Aug/08 Sep/08 Oct/08 Nov/08 Dec/08 Aug/08 Sep/08 Oct/08 Nov/08 Dec/08 (1) Demand Deposits. Savings. Judicial and Special Deposits 13

14 Net Interest Income boosted by strong credit growth R$ billion Q07 1Q08 2Q08 3Q08 4Q NII Interest Expenses Other Interest Revenues Loan Revenues 14

15 NIM remains stable in the quarter Q07 1Q08 2Q08 3Q08 4Q08 Selic¹ - % NIM² - % Annualized NIM by Loan Portfolio - % Q07 1Q08 2Q08 3Q08 4Q08 (1) Annualized Selic (end of period) (2) Annualized Net Interest Income over Earning Assets Individuals Businesses Agribusiness 15

16 NIM decrease is more than compensated by earning assets growth 9.0% 9.4% 9.1% 8.4% 8.6% 8.1% 7.6% % Spread Effect 1 R$ billion Volume effect 2 R$ billion NIM 3 Loan Portfolio R$ billion (1) Net Interest Income change related to spread variation (2) Net Interest Income change related to the Average Earning Assets growth (3) Spread Net Interest Margin over Earning Assets 16

17 R$ billion Expenses with Allowance for Loan Losses in line with the loan portfolio growth % = % = Q07 1Q08 2Q08 3Q08 4Q Allowance for Loan Losses² Net Interest Income after Provision (1) Average Loan Portfolio and expenses (LTM) (2) Without one-off items Expenses for Loan Losses / Loan Portfolio¹ - % 17

18 Loan Portfolio increase with maintenance of quality Additional + Required Provision / Loan Portfolio - % Required Provision / Loan Portfolio - % Past Due Loans + 90 days¹ / Loan Portfolio - % Losses² / Loan Portfolio - % (1) Information from 2002 and 2003 refers to Past Due Loans + 60 days (2) Net of Recovery 18

19 BB s delinquency is lower than the Banking Industry Businesses delinquency¹ - % Dec/04 Dec/05 Dec/06 Dec/07 1Q08 2Q08 3Q08 4Q08 Past Due 90 BI Past Due 90 BB Past Due 15 BI Past Due 15 BB 16.4 Individuals Delinquency¹ - % Agribusiness Delinquency - % Dec/04 Dec/05 Dec/06 Dec/07 1Q08 2Q08 3Q08 4Q Dec/04 Dec/05 Dec/06 Dec/07 1Q08 2Q08 3Q08 4Q08 Past Due 90 BI Past Due 90 BB Past Due 15 BI Past Due 15 BB (1) Contracted operations loan as reference for interest rate Past Due 90 BB Required Provision/Loan Portfolio 19

20 2005 s Vintage¹ presented the highest delinquency rate Highest Rate in 2005 = 6.5% Delinquency 90 days Annual Vintage Analysis (since 2005) Client Risk: A.B.C.D and E Delinquency: 90 days Months (1) Individual Loan Operations except overdraft account, credit cards and car loans 20

21 Delinquency in the car loan Vintage reflects the learning curve Car dealers origination Delinquency 90 days Delinquency 90 days BB s network origination 21

22 Banco Votorantim Loan Portfolio shows quality Car Loan 90% of the portfolio compounded by used cars Dec/2007 Dec/2008 Past Due Loans + 90 days / Loan Portfolio - % Losses¹ / Loan Portfolio - % Past Due Loans / Loan Portfolio - % Allowance for Loan Losses / Average Loan Portfolio (12 months) - % In Dec/08 the average contracted vintage term was 43 months Loan to Value of 60% Financed cars average age is 6.5 years 2.2% average interest rate in Dec/08 vintage (1) Net of Recovery 22

23 Agribusiness in the present scenario 23

24 Raise of disbursements for 08/09 crop brought higher equalization revenues R$ million 41,516 40,780 45,822 43,904 42,486 Subsidized loans grew 27.6% comparing to the previous quarter 15,008 15,744 15,789 16,620 21, Q07 1Q08 2Q08 3Q08 4Q08 Subsidized Loans Non-Subsidized Loans Equalization Revenues reach R$ 494 million in forth quarter 100-1Q02 4Q02 3Q03 2Q04 1Q05 4Q05 3Q06 2Q07 1Q08 4Q08 Equalization Revenues Weightening Factors 24

25 Soilbean and corn - price to cost with better trend for next crops 60.0 Margin - Soilbean 55.7 Relation Price Cost - Soilbean 0.73 % R$/sc / / / / / Price Costs 2004/ / / / /2009 Margin - Corn Relation Price Cost - Corn % / / / / /2009 R$/sc Price Costs 2004/ / / / /2009 (1) Average Prices and costs - soilbean - MS and corn - PR 25

26 69% of 08/09 Crop costs were insured Agri Insurance Contracted Crop 08/09 08/09 07/08 06/07 14% 4% 69% 31% 50% 50% 42% 58% 11% 58% 13% Insured Not Insured Agricultural Costs Investment Marketing Livestock Costs Agroindustrial Credit Reinsurance % IRB 25 SCOR 15 SWISS RE 15 PARTNER RE 15 MUNICH RE 10 OTHERS 10 Total 90 26

27 BB ends 2008 fulfilling the goals 27

28 BB fulfills Administrative Expenses objective¹ in 2008 R$ million % = ,296 14, million 6,219 6,794 3,567 1,729 3,358 1,590 3,569 1,636 3,671 1,704 4,100 1,864 7,077 7,904 1,838 1,768 1,933 1,967 2,236 4Q07 1Q08 2Q08 3Q08 4Q Personnel Expenses Other Administrative Expenses (1) Not including legal risk and one-off items 28

29 Cost Income Ratio close to 40% Efficiency Ratio - % Efficiency Ratio w/o one-off items - % Coverage Ratio¹ - % (1) Fee Income / Personnel Expenses 29

30 BB met 2008 expectations 2008 Guidance Fee Income 6.4% 5% - 8% Recurring ROE 24.7% 23% - 27% Loan Portfolio Growth - Domestic 40.2% 30% - 35% Individuals % 40% - 45% Businesses % 35% - 40% Agribusiness 22.8% 20% Total Deposits 44.0% 25% - 30% NIM 7.1% 7% - 7.5% 3 Allowance for Loan Losses 3.6% 3.5% - 3.8% Administrative Expenses % 7% - 10% Tax Rate 22.6% 23% - 25% (1) Not considering banks acquisition and purchased portfolios, there would be an organic grow th of 40.0% (2) Not considering banks acquisition and purchased portfolios, there would be an organic growth of 48.1% (3) Average Portfolio (4) Excluding BESC and BEP Administrative Expenses, the increase would go to 9.94% 30

31 What to be expected in 2009? 31

32 BB will consolidate its non-organic growth strategy Proforma R$ billion * % Change % Total Assets Loan Portfolio Total Deposits Net Income Acting as the financial agent of the State of São Paulo Low Cost Funding (judicial deposits) and great leverage margin Consolidation as the biggest bank in the state Strengthening and widening the footprint in the car financing market Access to well developed alternative distribution channels Widening corporate segments and capital market businesses * Position as of Sep/30,

33 Even with acquisitions, capital base allows a reasonable leverage margin BIS Leverage Margin R$ billion R$ 77.5 billion Proforma 4Q07 1Q08 2Q08 3Q08 4Q08 Tier I Tier II BIS Ratio 33

34 Besides the expected slowdown in economy, BB foresees business improvement Guidance 2009 Fee Income 5% - 8% Recurring ROE 19% - 22% Loan Portfolio - domestic 13% - 17% Individuals 23% - 25% Business 16% - 19% Agribusiness 2% - 5% Total Deposits 10% - 14% Global NIM 6.8% - 7.2% (1) Allowance for Loan Losses 3.8% - 4.2% Administrative Expenses 9% - 12% Tax Rate 26% - 29% (1) Average Portfolio 34

35 Investor Relations Unit SBS - Quadra 1 - Bloco C - Ed. Sede III 5th floor Brasília (DF) Phone: 55 (61) Fax: 55 (61) bb.com.br ri@bb.com.br For further information access bb.com.br/ir 35