Banco do Brasil. 2Q10 Conference Call

Size: px

Start display at page:

Download "Banco do Brasil. 2Q10 Conference Call"

Charla Skinner
5 years ago
Views:

1 Banco do Brasil 2Q10 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 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 Favorable economic dynamics... Middle and Low Income Compelling Demographic Dynamics - % Classes (% Households) (1) % 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 - % Jun/10 (2) Base 100 Dec/2005 Source: IBGE Jun/10 (3) 12 months average Source: IBGE 3

4 ...supports credit performance of the banking industry. Banking Industry Loan Portfolio¹ R$ billion 1,414 1, , months 7.8 Operations Average Term ¹ Jun/10 Loan Portfolio - Banking Industry Businesses Individuals Credit Risk Jun/10 Individuals Businesses Loan / GDP Jun/10 Past Due Loan + 90 days / Loan Portfolio¹ - % (1) Free Resources Jun/10 Loan / GDP - % Loan / GDP - Businesses¹ - % 4 Loan / GDP - Individuals¹ - %

5 BB maintains its leadership in the main segments... R$ billion Jun/10 Market Share Position Total Assets¹ Total Loan Portfolio² Agribusiness Loan Portfolio % % % 1 st 1 st 1 st Total Deposits¹ % 1 st Demand Deposits¹ Time Deposits¹ Assets Under Management³ % % % 1 st 1 st 1 st Trade Finance (ACC/ACE) 4 - US$ 6.2 BNDES Onleading Withdrawal Customers (million) % 1 st 1 st 1 st Points of Service 18,286 1 st (1) Banco Central do Brasil (Central Bank of Brazil) - Top 50 banks: Total Banking - Consolidated I + II (as of Dec/09) (2) Including guarantees and securities. Market Share: Banco Central do Brasil (Central Bank of Brazil) - Press Releases (3) Ranking ANBIMA (assets managed by Banco do Brasil + 50% of the assets managed by Banco Votorantim) (4) Banco Central do Brasil (Central Bank of Brazil) - Economic indicators 5

6 ...and delivers a solid result. R$ million ROAE - % Recurring ROAE - % 5,076 4,014 4,383 2,348 2,351 1,727 2,056 2,725 2,327 3,250 = 34.9% Net Income Recurring Net Income 2Q09 1Q10 2Q10 1H09 1H10 6

7 Loan Revenues backs net interest income growth... R$ billion = 21.6% 38.1 Net Interest Income¹ Interest Expenses Other Interest Income Loan Income = 33.5% 2Q09 1Q10 2Q10 1H09 1H10 (1) Before allowance for loan losses 7

8 ...that is stable when adjusted by risk. NIM by Product Spread vs. Selic Q09 1Q10 2Q10 Individuals - % Loan Operations Businesses - % Agribusinesses - % Q09 1Q10 2Q10 Global Spread¹ /Cumulative Selic² - % Global Spread¹ - % NII adjusted by risk³ - % Cumulative Selic² - % (1) Net Interest Income over Earning Assets (2) Annualized (3) Net Financial Margim over Earning Assets 8

9 Total Deposits Core Deposits grow more... Core Deposits¹ = = 0.4% 0.4% = = 3.0% 3.0% Jun/09 Mar/10 Jun/10 Loan Portoflioo / Deposits - % Balance - R$ billion Jun/09 Mar/10 Jun/10 Cost / Selic - % Balance - R$ billion Foreign Borrowing R$ billion Jun/09 Mar/10 Jun/10 Individuals Businesses Issues Repo Interbanking Assets under Management Jun/09 Mar/10 Jun/10 (1) Demand, judicial and special deposits (2) Including 50% of BV managed resources (3) Source: ANBIMA Ranking Asset Management² - R$ billion Market Share³ -% 9

10 R$ billion supporting loan portfolio performance, that reaches a 20% market share Market Share¹ - % Offshore Agribusiness Businesses Agribusiness Individuals % 26.8% 27.1% % 21.2% 31.1% % 21.5% 31.0% Individuals Businesses % % % Jun/09 Mar/10 = 6.9% Jun/10 = 29.3% (1) Brazilian Central Bank - Press Releases - domestic loan portfolio 10

11 Vehicles Loan Credit Card Other Payroll Loan R$ billion Market Share¹ - % Mortgage Overdraft Account Consumer Finance Backed by Direct Deposits Individuals loan portfolio surpass R$ 100 billion and expands its market share Jun/09 Mar/10 Jun/ % 5.0% % over Jun/ = 6.3% (1) Source: Banco Central do Brasil - Press Releases: Loan as Reference for Interest Rate 11

12 R$ billion 18.3 Business loan portfolio expands its market share, growing more than 31% in the last 12 months % over Jun/09 Market Share¹ - % % Small and Micro Enterprises 39.5 Medium and Large Enterprises % Jun/09 Mar/10 Jun/10 = 5.9% (1) Source: Banco Central do Brasil - Press Releases: Loan as Reference for Interest Rate 12

13 ... with the highlight on investment and working capital operations. Other R$ billion % 14.2% % 9.3% % 8.9% 21.2% % over Jun/ Foreign Trade % Investment % % % 41.0 Working Capital Jun/09 Mar/10 Jun/10 = 5.9% 13

14 55.1 The balance of working capital operations insured by FGO grows and surpasses 10% of SMEs loan portfolio ,104 3,156 3,469 3,745 4,276 2,789 2, ,689 Aug/09 Sep/09 Oct/09 Nov/09 Dec/09 Jan/10 Feb/10 Mar/10 Apr/10 May/10 Jun/10 Thousand Operations Operations Average amount R$ thousand Operations Balance R$ million = 47.1% 14

15 BB keeps its leadership in agribusiness financing... R$ billion % over Jun/09 Other Market Share¹ - % % % 36.8% % 24.7% Marketing % 5.2% % 11.4 Investment Costs % % 38.5% 9.7 Jun/09 Mar/10 Jun/10 = 8.4% 15

...expanding the use of agricultural insurance. Working Capital (R$ billion) 11.6 15.5 14.9 Crop Insurance Breakdown - % 50% 38% 39% 61.2% 73.4% 50% 62% 61% 71.

16 ...expanding the use of agricultural insurance. Working Capital (R$ billion) Crop Insurance Breakdown - % 50% 38% 39% 61.2% 73.4% 50% 62% 61% 71.8% Crop 2007/2008 Crop 2008/2009 Crop 2009/2010 With Insurance Without Insurance 36.1% 73.8% R$ million Costs Crop 2009/2010 % Insured Soybean 4, Corn 2, Rice Wheat Other 5, Total 14,

17 Jun/09 BB s credit performance was followed by better risk ratios... SFN¹ 9.4% 9.5% 90.6% 90.5% Jun/10 SFN¹ AA-C D-H 7.5% 8.2% 92.5% 91.8% (1) Source: Banco Central do Brasil Press Releases. 17

18 Individuals Loan Portfolio¹ NPL Ratio - % reflecting in the reduction of individuals and businesses delinquency ratios... Jun/09 Mar/10 Jun/10 NPL Ratio (90 days) Banking Industry² NPL Ratio (90 days) BB Business Loan Portfolio¹ NPL Ratio - % Jun/09 Mar/10 Jun/10 (1) Loan as Reference for Interest Rate. (2) Source: Banco Central do Brasil - Press Releases 18

19 Agribusiness Loan Portfolio NPL - past due 90 days - %... and agribusiness loan portfolio ratios Jun/09 Mar/10 Jun/10 Extended¹ Total Portfolio Unextended¹ Agribusiness Loan Portfolio Coverage³ - % Provision / Past Due Loans +90 days Jun/09 Mar/10 Jun/10 Unextended Total Extended (1) Not including third parties 19

20 Coverage and credit recovery are better than market average. Write Off¹ / Average Loan Porfolio (%) 3.2 Recovery¹ / Write - Offs (%) BB Market Average 2 BB Market Average 2 Coverage Ratio³ BB Coverage - % BI Coverage - % Jun/09 Mar/10 Jun/10 (1) Half year flow (2) Three largest Brazilian banks average, excluding BB. (3) Required allowance for loan losses / Past Due Loans +90 days 20

21 Fund management, cards and insurance boost revenues... R$ billion Commercial Revenues¹ 27,3 12,4 13,4 13,9 0,5 0,4 0,5 3,4 3,6 30.3% 4,0 8,5 9,4 9,5 31.9% 22,6 0,8 6,4 15,5 0,9 7,6 18,8 Insurance Result Fee Income Net Interest Income 2Q09 1Q10 2Q10 1H09 1H10 = 3.4% = 20.7% (1) Net Interest Income + Fee Income + Insurance Revenues (2) Including Banco Votorantim 21

22 ...and Administrative¹ Expenses rise in line with the business growth... R$ million 9,877 10,771 4,892 5,300 5,471 4,638 4,983 Other Administrative Expenses Personnel Expenses 2,279 2,449 2,534 2,613 2,851 2,937 5,239 5,788 2Q09 1Q10 2Q10 1H09 1H10 2 (1) Personnel Expenses + Other Administrative Expenses Does not include civil and labor claims, premiuns paid to customers and one-off items. = 9.1% 22

23 ... resulting in improved productivity ratios Service Revenues / Personnel Expenses - %¹ Cost / Income Ratio - %(1) (2) 2Q09 1Q10 2Q10 (1) Without one-off items (2) Cost / Income Ratio = Administrative Expenses / Operating Revenuess, which: Administrative Expenses = Personnel Expenses + Other Administrative Expenses Operating Revenuess = Gross Income from Financial Intermediation Allowance for Loan Losses Expenses + Fee Income + Equity Interest in the Resultas of Subsidiaries and Affiliates + Income from Insurance, Pension Plans and Savings Bonds + Other Operating Income + Other Operating Expenses 23

24 BB keeps a consistent growth in the cards market. R$ billion Market Share -% Credit Card Total Revenues = 6.2% 2Q09 1Q10 2Q10 = 20.0% Strategic Partnership 24

25 R$ million Corporate reestructure in the insurance segment will increase its share in BB income Insurance Net Income¹ = - 0.3% 2Q09 1Q10 2Q10 = 5.5% Strategic Partnership (1) Brokerage Net Revenue + Fee Income + Earning / Laws Equity 25

26 With Nossa Caixa, BB conquers leadership in São Paulo, expanding its operations. BEFORE AFTER + % 22 Credit Products (Individuals and Small and Medium Enterprises) Branch Network Integrated Branches (100%) ,710 12, ,226 Automated Teller Machines - ATM Transaction Options Renewed ATM ,251, ,691 Transactions¹ - ATM Transactions¹ - Internet 2,674, , (1) 5th day 26

27 R$ billion Strategic partnership with Banco Votorantim expands business production Market Share BV -- % ,540 Total Loan Portfolio NPL - BV - % 5,762 6,043 6,636 3,704 4,579 BV - Retail Credit Production 1Q09 2Q09 3Q09 4Q09 1Q10 2Q

With the public offering,, BB increases free float and... Before Public Offering Ownership Structure After Public Offering 21.9% 30.4% 2.4% 10.4% 65.3% 10.4% 59.

28 With the public offering,, BB increases free float and... Before Public Offering Ownership Structure After Public Offering 21.9% 30.4% 2.4% 10.4% 65.3% 10.4% 59.2% Federal Government Free Float Previ BNDESPar Shareholder Shareholder Number Increase Before Offering After Offering Qtd. % Individuals 330, ,787 71,813 21% Businesses 10,466 16,870 6,404 57% Foreign Investors 1,076 1, % Free Float 342, ,946 78,430 22% 28

29 ... increases its leverage potential. Proforma after public offering Basel Index -% Tier II - % Tier I - % Jun/09 Mar/10 Jun/10 Jul/10 Leverage Potential¹ of R$ 143 billion (1) 100% weighting 29

30 2Q10 performance confirms most estimates. Items Performance 2010 Guidance Recurring ROAE 24.6% 21% - 24% Net Interest Margin 6.4% 6.5% - 7.0% Total Deposits 6.6% 12% - 16% Domestic Loan Portfolio 18.8% 18% - 23% Individuals 27.6% 27% - 32% Businesses 21.5% 16% - 21% Agribusiness 4.0% 4% - 9% Allowance for Loan Losses 4.1% 4.0% - 4.4% Fee Income 10.8% 7% - 10% Administrative Expenses 9.1% 10% - 12% Tax Rate 33.9% 31% - 34% 30

31 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 31

Banco do Brasil. 3Q10 Conference Call

Banco do Brasil. 3Q10 Conference Call Banco do Brasil 3Q10 Conference Call 1 Disclaimer This presentation may include references and statements, planned synergies, increasing estimates, projections of results and future strategy for Banco