Banco do Brasil. 3Q10 Conference Call

Transcription

1 Banco do Brasil 3Q10 Conference Call 1

2 Disclaimer This presentation may include 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 those anticipated and discussed 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 BB shows solid operational performance. 1 Maintaining leadership in Banking Industry 2 Growth of business revenues 3 Credit risk improvement 3

4 BB maintains leadership in key segments... R$ billion Assets¹ Loan Portfolio² % 20.0% 78.8% 80.0% Banking Industry Deposits¹ 26.3% Asset Management³ 22.1% % 77.9% (1) Market Share: Central Bank of Brazil Top 50 banks: Total Banking - Consolidated I + II (as of Jun/10) (2) Market Share: Central Bank of Brazil Domestic Portfolio Informations. Balance of BB portfolio includes guarantees and private securities. (3) ANBIMA Ranking (assets managed by Banco do Brasil + 50% of the assets managed by Banco Votorantim) 4

5 ...and presents solid results. R$ million ROE - % ,701 Recurring ROE - % 5,992 6,960 5,014 1,979 1,764 2,725 2,327 2,625 2,578 = 38.8% Net Profit Recurring Net Profit 3Q09 2Q10 3Q10 9M09 9M10 5

6 Loan operations income drives NII growth... R$ billion = 21.9% NII¹ Interest Expense = 34.0% 39.8 Other Interest Income Loan Income 3Q09 2Q10 3Q10 9M09 9M10 (1) Before Provision for Loan Losses 6

7 ... that remains stable when adjusted by risk. NIM by Product NIM vs. Selic Q09 2Q10 3Q10 Individuals - % Loan Operations Businesses - % Agribusiness - % Q09 2Q10 3Q10 NIM¹ - % Risk adjusted NIM³- % Cumulative Selic² - % (1) Net Interest Income over Earning Assets (2) Annualized (3) Net Financial Margim over Earning Assets 7

8 Total Deposits Low Cost Deposits keep growing. Core Deposits¹ = 1.3% = 2.7% Sep/09 Jun/10 Sep/10 Loan Portfolio / Deposits - % Foreign Borrowing US$ billion ,4 5.1 Loan Portfolio Exterior Sep/09 Jun/10 Sep/10 (1) Demand, savings, judicial and special deposits (2) Including 50% of BV managed resources (3) Source: ANBIMA Ranking Balance - R$ billion Individuals Businesses Issues Repo Interbanking Sep/09 Jun/10 Sep/10 Cost / Selic - % Balance - R$ billion Assets under Management Sep/09 Jun/10 Sep/10 Asset Management² - R$ billion Market Share³ -% 8

9 BB Loan Portfolio has 20% market share. R$ billion Market Share¹ - % Offshore Agribusiness Businesses Agribusiness Individuals % 23.8% 30.0% % 21.5% 31.0% % 21.8% 31.6% Individuals Businesses % % % = 4.1% Sep/09 Jun/10 = 19.0% Sep/10 (1) Source: Central Bank of Brazil Press Releases BB Domestic Loan Portfolio 9

10 Individuals Loan Portfolio reaches R$ 107 billion. R$ billion % over Sep/09 Market Share¹ - % Mortgage Overdraft Account Consumer Finance Backed by Direct Deposits Vehicle Finance % Credit Cards Other % Payroll Loan Sep/09 Jun/10 = 6.2% Sep/10 (1) Source: Central Bank of Brazil Press Releases Domestic Loan Portfolio Loan as Reference for Interest Rate 10

11 R$ billion Market Share¹ - % 20.5 Business loans grow more than 20% in the last 12 months % over Sep/ Small and Micro Enterprises % Medium and Large Enterprises % Sep/09 Jun/10 = 3.6% Sep/10 (1) Source: Central Bank of Brazil Press Release Loan as Reference for Interest Rate 11

12 R$ billion...with highlight on investment and working capital transactions. % over Sep/09 Other % 12.0% % 7.2% % 9.3% 21.9% % Foreign Trade Investment Working Capital % % % 23.2 Sep/09 Jun/10 = 3.6% Sep/10 12

13 SME loans to investments grow in BNDES onlending. R$ billion % over Sep/09 Other BNDES Cards % 15.6% BNDES/Finame FCO + Proger Sep/09 Jun/10 = 18.6% Sep/10 13

14 Balance of FGO transactions grows and surpasses 11% of SMEs loan portfolio Thousand Operations Operations Average Amount ,104 5,643 R$ thousand 2,404 3,469 Operations Balance R$ million 380 = 10.6% Sep/09 Dec/09 Mar/10 Jun/10 Sep/10 = 134.7% 14

15 R$ billion Market Share - % Other BB expands leadership in agribussiness financing % 27.6% % % 26.5% % over Sep/ Marketing % % % 12.0 Investment Costs % % % 12.9 Sep/09 Jun/10 = 5.2% Sep/10 15

16 ...increasing the use of agricultural insurance. Working Capital (R$ billion) Crop Insurance Breakdown - % 38.4% 39.3% 32.7% 58.4% 61.6% 60.7% 67.3% 66.6% 54.7% Crop 2008/2009 Crop 2009/2010 Crop 2010/2011 With Mitigators¹ Without Mitigators 35.7% (1) Agricultural insurance, Proagro or Hedge Price (2) Up to September 2010 (3) Crop 2010/2011 R$ million % Mitigated Costs³ Rural Insurance Hedge Price Soybean ,4% 7,0% Korn ,2% 10,1% Rice ,0% - Wheat 16 87,3% - Others ,4% - Total ,0% 5,3% 73,8% 74.2% 16

17 Banco Votorantim partnership expands business R$ million Market Share¹ BV- % Total Loan Portfolio NPL BV - % 9,178 4,579 5,762 6,043 6,636 7,540 BV Retail Credit Production 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 + (1) Source: ABEL 17

18 BB improves the credit risk level... Sep/09 BI¹ 9,0% 9.0% 9.4% 9,4% Sep/10 BI¹ 90,6% 91.0% 91,0% 90.6% 7,2% 7.2% 7,8% 7.8% AA-C D-H (1) Brazilian Banking Industry. Source: Central Bank of Brazil Press Releases 92.8% 92,8% 92.2% 92,2% 18

19 ... reflecting in the reduction of individuals and businesses delinquency ratios... Individuals Loan Portfolio¹ NPL Ratio - % Sep/09 Jun/10 Sep/10 Businesses Loan Portfolio¹ NPL Ratio - % NPL Ratio (90 days) Banking Industry² NPL Ratio (90 days) BB Sep/09 Jun/10 Sep/10 (1) Loan as Reference for Interest Rate. (2) Source: Central Bank of Brazil Press Releases.. 19

20 ... and in lower level of credit cost. Allowance for Loan Losses Expenses / Average Portfolio (%) ,017 2,871 2,639 Allowance for Loan Losses / Loan Portfolio¹ Allowance for Loan Losses Expenses 3Q09 2Q10 3Q10 Coverage Ratio² BB Coverage - % BI Coverage - % Sep/09 Jun/10 Sep/10 (1) Annual Allowance for Loan Losses Expenses over 12 months Average Portfolio (2) Required allowance for loan losses / Past Due Loans + 90 days 20

21 Commercial Revenues¹ boost BB results... R$ million 42,041 34,863 13,038 11,072 12,237 3,918 13,883 4,422 14,726 4,541 23,792 29,003 Other Commercial Income NII 8,320 9,461 10,185 3Q09 2Q10 3Q10 9M09 9M10 = 6.1% = 20.6% (1) Net Interest Income + Fee Income + Insurance Revenues 21

22 ...with highlight to business diversification. R$ million Credit / Debit Cards Asset Management 1,770 2,271 1,483 1, = 28.3% = 16.2% 3Q09 2Q10 3Q10 9M09 9M10 3Q09 2Q10 3Q10 9M09 9M10 Insurance, Pension Plans and Saving Bonds Capital Markets = 59.0% = 25.0% 323 3Q09 2Q10 3Q10 9M09 9M10 3Q09 2Q10 3Q10 9M09 9M10 22

23 BB continues growing in cards market. R$ billion Market Share¹ -% Cards Revenues = 11.3% 3Q09 2Q10 = 19.8% 3Q10 (1) Source: ABECS 3Q10 preliminary data 23

24 R$ million Corporate reestructure increased insurance share in BB income Insurance Ratio - % Insurance Income¹ = 16.7% 3Q09 2Q10 3Q10 = 37.6% (1) Brokerage Net Revenue + Fee Income + Earning / Laws Equity 24

25 R$ million Administrative¹ Expenses increase in line with the business growth. 16,497 14,992 6,978 7,524 Other Administrative Expenses 5,115 2,341 5,471 2,534 5,726 2,541 8,014 8,973 Personnel Expenses 2,774 2,937 3,186 3Q09² 2Q10 3Q10 9M09² 9M10 = 10.0% (1) Does not include civil and labor claims. (2) Pro forma considering BNC and BV expenses. 25

26 BIS Ratio surpasses 14%. Pro forma¹ BIS Ratio -% Tier II - % Tier I - % Sep/09 Jun/10 Sep/10 Oct/10 (1) Pro forma Added subordinated debt issued in the amount of U$ 650 million. (2) 100% weighting. Leverage Potential² R$ 129 billion 26

27 3Q10 performance confirms most estimates. Items - % Performance 2010 Guidance Recurring ROE NIM Total Deposits Domestic Loan Portfolio Individuals Businesses Agribusiness Allowance for Loan Losses Fee Income Administrative Expenses Tax Rate

28 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 28

29 Additional Slides 29

30 Favorable economic dynamics... Middle and Low Income Classes¹ (% Households) Compelling Demographic Dynamics - % % 46% 46% 48% 50% 52% 53% 44% 46% 41% 38% 37% 33% 31% 90% 80% 70% Demographic bonus 60% % 40% Middle Income Class Low Income Class GDP per Capita (U$'000) Economic Active Population = years Economic Inactive Population Source: IBGE, Brazilian Central Bank, FGV and Ipeadata. (1) Data as of June of each year. Income classes classified according to income by household. Low income class: households with incomes up to R$1,063 per month. Middle income class: between R$1,064 and R$4,590 per month Total Payroll Index² Unemployment Index³ - % Sep/10 (2) Base 100, Dec/2005 Source: IBGE Sep/10 (3) 12 months average Source: IBGE 30

31 733 Banking Industry Loan Portfolio¹...supports credit performance of the banking industry. R$ billion Months , , , Operations Average Term ¹ Sep/10 Loan Portfolio - Banking Industry Businesses Individuals Credit Risk Sep/10 Individuals Businesses Loan / GDP , Sep/10 Past Due Loan + 90 days / Loan Portfolio¹ - % (1) Free Resource Loans Sep/10 Loan / GDP - % Loan / GDP - Businesses¹ - % 31 Loan / GDP - Individuals¹ - %