RESULTS PRESENTATION. 2Q l 2015

Transcription

1 RESULTS PRESENTATION 2Q l 2015

2 Disclaimer This presentation may contain references and statements representing future expectations, plans of growth and future strategies of BI&P. These references and statements are based on the Bank s assumptions and analysis and reflect the management s beliefs, according to their experience, to the economic environment, and to predictable market conditions. As there may be various factors out of the Bank s control, there may be significant differences between the real results and the expectations and declarations herewith eventually anticipated. Those risks and uncertainties include, but are not limited to, our ability to perceive the dimension of the Brazilian and global economic aspect, banking development, financial market conditions, and competitive, government and technological aspects that may influence both the operations of BI&P as the market and its products. Therefore, we recommend the reading of the documents and financial statements available at the CVM website ( and at our Investor Relations page in the internet ( and the making of your own appraisal.. 2

3 Highlights Banco BI&P announces capital increase of R$ 80 mm, fully guaranteed by controlling shareholders; constitution of additional provision to cover possible losses from credit transactions related to Ceagro Agrícola Ltda.; intentional reduction of its loan portfolio and strengthening its focus in fee-related platforms. Expanded Credit Portfolio was intentionally reduced Increase in ALL of R$210 mm Excluding the specific and non-recurring event related to Ceagro operations The Expanded Credit Portfolio of the Bank was reduced intentionally from R$4.1 bi in December 2014 to the current R$2.7 bi (August 11, 2015). We plan to reduce it further to around R$2.3 bi in the next months, on account of the challenging macroeconomic scenario. We will continue operating in specific niches of the credit market that offer significant value generation capacity or that will originate investment banking operations. However, we will be cautious, given the uncertainties caused by the current scenario. We constituted a provision for ALL, already reflected in the Income Statement on June 30, 2015, in the amount of R$210 mm, which, in the Management s opinion, conservatively covers possible temporary losses arising from the bank s exposure to Ceagro and to the CPRs originated by the company. According to our legal advisors, the Bank has very good chances of recovering notably the CPRs through negotiations and legal action - already in due course against the producers or distributors that endorsed the operations. We consider this provision for ALL as a result of a punctual and non-recurring problem. We wish to reiterate that the Bank s remaining credit portfolio present a healthy track-record. Excluding the specific and non-recurring event related to Ceagro operations, our managerial allowance for loan losses (ALL) in the second quarter of 2015 would only be R$1.5 million, which annualized it is equivalent to 0.2% p.a. of the current Expanded Portfolio of R$3.0 billion (June 30, 2015) maintaining the managerial ALL at the healthy rate of 1% p.a. for the past twelve months. Capital increase of R$80 mm An Extraordinary Shareholders Meeting has been called for August 31, 2015 to deliberate on the capital increase of R$80 mm. This capital increase, offered to all shareholders of the Company, will be fully guaranteed by the controlling shareholders, who reaffirm their confidence in the strategy rolled out by the bank. Figures after Capital Increase Free Cash After the capital increase, the Bank will have shareholders equity of approximately R$620 mm, and will operate with a Basel ratio of over 17%, one of the highest in our segment, when we achieve the targeted expanded credit portfolio of R$2.3 bi in the coming months. We also maintained a healthy cash balance: R$942 mm on June 30, 2015, equivalent to 29% of our total deposits. The Management remains committed to reducing costs The Management also remains committed to reducing costs, planning to reduce personnel and administrative expenses in the second half of

4 R$ million Expanded Credit Portfolio The Expanded Credit Portfolio of the Bank was reduced intentionally from R$4.1 bi in December 2014 to the current R$2.7 bi (August 11, 2015). We plan to reduce it further to around R$2.3 bi in the next months. 3,920 3,992 4,136 3,853 3,030 2,300 Jun 14 Sep 14 Dec 14 Mar 15 Jun 15 Oct 15* Loans and Financing in BRL Guarantees Issued (L/G and L/C) Private Credit Bonds (Debentures) Trade Finance Agricultural Bonds (CPR, CDA/WA & CDCA) Jun % 38.5% 0.6% Average Exposure per Client R$ mm Jun 14 Mar 15 Jun 15 Jun % 40.3% 0.6% Corporate Emerging Companies Other** Corporate Emerging Companies * Expanded credit portfolio forecast. ** Other Credits include Non-Operating Asset Sales Financing, Consumer Credit Vehicles, and Acquired Loans 4

5 Expanded Credit Portfolio June 2014 June 2015 BNDES Onlendings Trade 11% Finance* 5% Loans & Financing in BRL* 54% Guarantees Issued 5% Other 0% Agricultural Bonds 23% Private Credit Bonds 2% BNDES Onlendings Trade 12% Finance* 3% Loans & Financing in BRL* 52% Guarantees Issued 5% Other 1% Agricultural Bonds 25% Private Credit Bonds 2% Client Concentration Jun % 33.0% 27.6% 23.2% Mar % 30.6% 26.4% 29.1% Jun % 27.5% 26.2% 33.0% top largest largest Other 5

6 Expanded Credit Portfolio We will continue operating in specific niches of the credit market that offer significant value generation capacity or that will originate investment banking operations. However, we will remain cautious, given the uncertainties caused by the current scenario. June 2014 Agriculture Real Estate Oil, Biofuel & Sugar Food & Beverage Livestock Automotive Transport and Logistics Infrastructure Commerce - Retail & Wholesale Power Generation & Distribution Textile, Leather and Confection Chemical & Pharmaceutical Metal Industry International Commerce Financial Activities Raw Materials Others Industries (less than 1.4%) 12.0% 10.7% 6.9% 5.5% 4.3% 4.1% 3.9% 3.5% 2.6% 2.3% 2.3% 2.0% 1.9% 1.7% 1.5% 13.6% 21.0% Agriculture Real Estate Oil, Biofuel & Sugar Livestock Food & Beverage Transport and Logistics Raw Materials Textile, Leather and Confection Commerce - Retail & Wholesale Automotive Infrastructure Financial Activities Power Generation & Distribution International Commerce Other Sectors (less than 1.4%) June % 6.9% 6.6% 3.4% 3.1% 3.1% 2.6% 2.5% 2.4% 2.2% 2.1% 1.4% 13.7% 15.0% 27.4% 6

7 Case Ceagro Agrícola Ltda. CEAGRO AGRÍCOLA LTDA A soy and corn trading company with a long-time presence in the state of Mato Grosso. In recent years, the company disclosed to the market audited balance sheets that reflected excellent financial results, as well as high levels of liquidity, profitability and growth. CI&BI (JV DEACTIVATED) In 2013 we set up, together with the company, a structure (since deactivated) to originate for the bank, Rural Product Certificates (CPRs), which are debt securities issued by farmers that stipulate the delivery of a certain quantity of grains at the end of the harvest. ORIGINATION TRACK RECORD These CPRs were issued by hundreds of farmers, whose plantations were constantly monitored by our team and by a specialized company hired by the Bank. During these four years, the CPRs originated by Ceagro had, until the latest crop, registered losses of less than 0.2% of the total volume originated. 2014/15 CROP In the 2014/15 crop the Bank acquired CPRs originated by Ceagro and issued by 147 farmers, a substantial portion of which had also been endorsed by important distributors in the region. In this period, we also granted to Ceagro an Advance on Foreign Exchange Contracts (ACC). CEAGRO DISCLOSED NEW FINANCIAL STATEMENTS WITH ADJUSTMENTS In 2015, to the surprise of the market, the company disclosed new financial statements that suffered adjustments in hundreds of millions of Reais, with a significant reduction in cash, accounts receivable and inventory. These adjustments were never reasonably explained by the company or its auditors, who alleged significant losses not only in 2014 but also in previous years. 7

8 Case Ceagro Agrícola Ltda. IMPACT ON CRP S ORIGINATED BY THE JV WITH CEAGRO Recently we discovered that the product for the settlement of a portion of CPRs held by us was inappropriately received by Ceagro despite our notifications and records to producers, distributors and the respective buyers of these products. According to our legal advisors, we have rights on all the CPRs held by us and are adopting negotiations and legal measures to defend our rights, both with Ceagro and with all the sureties and guarantors to receive the full amount. INCREASE IN ALL However, some of these negotiations and legal executions could take time and hence we are setting aside a provision of R$210 mm in the income statement dated June 30, In the Management s opinion, this provision conservatively covers possible temporary losses arising from the bank s exposure to Ceagro and the CPRs originated by it. According to our legal advisors, the Bank has good chances of recovering notably the CPRs through negotiations and legal action - already in due course against the producers or the distributors that endorsed the operations. 8

9 Case Ceagro Agrícola Ltda. After the capital increase, the Bank will have shareholders equity of approximately R$620 mm, and will operate with a Basel ratio of over 17%, one of the highest in our segment. INCREASE IN ALL Of the R$210 mm provisioned, R$131 mm was set aside as additional provisions not allocated and R$79 mm as the portion of credit risk while marking to market the exposure classified under marketable securities. SHAREHOLDERS EQUITY LEVELS After the increase in ALL levels the Bank shareholders equity totaled R$539 mm on June 30, 2015 (R$671 mm on March 31, 2015). After the capital increase, the Bank will have shareholders equity of approximately R$620 mm, in line with the intentional reduction of its loan portfolio and strengthening of its focus in fee-related platforms which requires lower capital allocation levels. 9

10 R$ million R$ million Free Cash We maintained a healthy cash balance: R$942 mm on June 30, 2015, equivalent to 29% of our total deposits. Free Cash 29% of total deposits Jun 14 Sep 14 Dec 14 Mar 15 Jun 15 Assets and Liabilities management June 2015 Assets Free Cash Liabilities 2, , , days 180 days 360 days +360 days 10

11 Net Interest Margin (NIM) Managerial net interest margin with clients was 4.07% in 2Q15, stable in the quarter. Net Interest Margin (NIM) 4.43% 4.12% 4.14% 4.04% 4.07% 2Q14 3Q14 4Q14 1Q15 2Q15 11

12 R$ millions Fees, Client Desk, IB and Brokerage Revenues In 2Q15, Income from services rendered by Guide Investimentos accounted for 54% of total Revenue from Fees, Client Desks, IB and Brokerage, which underlines the results of the investments made in this platform Q14 3Q14 4Q14 1Q15 2Q15 1H14 1H15 Commercial Fee Client Desk IB Guide Investimentos 12

13 14.00% 9.00% 4.00% -1.00% -6.00% 15.00% 10.00% 5.00% 0.00% -5.00% % Expanded Credit Portfolio Quality We highlight that the exposure related to Ceagro and the CPRs originated by the company didn't have any impact in the NPL indicator, since these operations were at the Securities Portfolio. Delinquency (NPL) Managerial ALL Expense 1 2.0% 2.0% 2.1% 2.8% 2.4% 0.66% 1.45% 0.67% 1.58% 0.30% 1.8% 1.5% 1.7% 2.1% 2.0% 0.87% 1.05% 0.97% 1.09% 1.01% Jun 14 Sep 14 Dec 14 Mar 15 Jun 15 Jun 14 Sep 14 Dec 14 Mar 15 Jun 15 NPL 60 days NPL 90 days Last 12-month Managerial ALL Expense Quarterly Managerial ALL Expense annualized Considering the Ceagro event, both with respect to its direct exposure and to CPRs originated thereby, the indicators would be: NPL 60: 14.4%; NPL 90: 10.9%; Managerial expense with allowance for loan losses in the last 12 months: 4.94% 1 Managerial ALL Expense = ALL expense + Discounts granted upon settlement of loans Revenues from recovery of loans written off + Adjustments due to the shareholders agreement at the time of acquisition of Banco Intercap and to credit assignments. 13

14 R$ million Funding Funding reduction in line with the intentional decrease of Credit Portfolio. Funding products are distributed to almost 17,000 depositors promoting more stability. Jun 14 Time Deposits (CDB) 21% DPGE I 23% DPGE II 10% 4,135 4,186 4,386 4,071 3,542 Foreign Borrowings 7% Onlendings 6% Interbank & Demand Deposits 2% LCA 28% LF & LCI 3% Jun 14 Sep 14 Dec 14 Mar 15 Jun 15 Local Currency Foreign Currency Foreign Borrowings 3% Time Deposits (CDB) 29% Onlendings 4% Jun 15 Interbank & Demand Deposits 1% DPGE I 20% DPGE II 8% LCA 30% LF & LCI 5% 14

15 Funding by type of investor Jun 14 Jun 15 Retail 37.1% Brokerage Houses 17.2% Institutional 40.6% Retail 11.4% Private 8.4% Companies 18.2% Banks 4.2% Retail 56.1% Brokerage Houses 35.6% Retail 13.2% Private 7.3% Companies 11.4% Banks 0.5% Institutional 31.9% # of Depositors 16,973 13,851 1,038 1,193 1,330 1,483 1,871 2,538 3,973 5,863 7,337 9,002 11,003 Jun 12 Sep 12 Dec 12 Mar 13 Jun 13 Sep 13 Dec 13 Mar 14 Jun 14 Sep 14 Dec 14 Mar 15 Jun 15 Banks Companies Institutional Private Retail Brokerage Houses 15

16 R$ billion Guide Investimentos Banco BI&P increased the capital of Guide by R$10 mm on July 31, 2015 to sustain its strategy of accelerated growth and inorganic growth. ACQUISITIONS Omar Camargo: R$500 million of AUM and 1,320 active clients Geraldo Correa: R$300 million of AUM and 702 active clients Bullmark: R$600 million of AUM e 1,080 active clients SLW: R$1,900 million of AUM. Migration process initiated in April Simplific Pavarini: R$500 million (waiting for Brazilian Central Bank approval) INDICATORS Expectation of R$4.0 billion of assets under management after the migration process is concluded 10,000 active clients are expected after the migration process is concluded GUIDE S CLIENT EXPERIENCE Open investment platform: selection of the best products available in the market Impartial approach: single fee charged on AUM Innovative suitability analysis process: personal documents not required to open an account Assets under Management (AUM) Active Clients ,861 5,200 8,500 Jun 14 Mar 15 Jun 15 Jun 14 Mar 15 Jun 15 16

17 Cost control The Management also remains committed to reducing costs, planning to reduce personnel and administrative expenses in the second half of Personnel and Administrative Expenses* % Q14 3Q14 4Q14 1Q15 2Q15 2Q14 3Q14 4Q14 1Q15 2Q15 Personnel Expenses Administrative Expenses Headcount 0 * Information based on the managerial income statement of the financial conglomerate without Guide Investimentos. Details in the 2Q15 Earnings Release. 17

18 R$ million R$ million Profitability, Capital Structure & Ratings After said capital increase, the Bank will have shareholders equity of approximately R$620 mm, and will operate with a Basel ratio of over 17%, one of the highest in our segment, when we achieve the targeted expanded credit portfolio of R$2.3 billion in the coming months. Net Result Shareholders Equity and Leverage Jun 14 Sep 14 Dec 14 Mar 15 Jun x 5.9x 6.1x 5.7x 5.6x x x 4.0x 2.0x 0.0x -2.0x -4.0x -6.0x -8.0x Jun 14 Sep 14 Dec 14 Mar 15 Jun 15 Oct 15* -10.0x Basel Index (Tier I) Agency Rating Last Report 17.0% Standard & Poor s National: bra-/negative/bra-2 Global: BB-/Negative/B Jul/ % 13.2% 13.1% 13.0% 12.4% Moody s National: Baa2.br/Stable/BR-3 Global: B1/Stablel/Not Prime Mar/15 Fitch Ratings National: BBB-/Stable/F3 Sep/14 Jun 14 Sep 14 Dec 14 Mar 15 Jun 15 Oct 15* RiskBank Índice RiskBank: 9.66 Low Risk Short Term Disclosure: Excellent Jul/15 * Shareholders equity of approximately R$620 mm and Credit portfolio of R$2.3 billion. 18

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