Banco Votorantim S.A. Institutional Presentation. 2 nd Quarter, 2012

Transcription

1 Banco Votorantim S.A. Institutional Presentation 2 nd Quarter, 2012

2 Disclaimer Disclaimer Certain statements made in this presentation may not be based on historical information or facts. This presentation therefore contains, or may be deemed to contain, forward looking statements (within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended), including those relating to the general business plans and strategy, future financial condition and results and growth prospects of Banco Votorantim S.A. ( Banco Votorantim or the Company ), and future developments in its industry and its competitive and regulatory environment. By their nature, forward looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future and are based on assumptions, data or methods which, although considered reasonable by the company at the time, may turn out to be incorrect or imprecise, or may not be possible to realize. Accordingly, actual results may differ materially from these forward looking statements due to a number of factors, including future changes or developments in the Company s business, its competitive environment, technology developments and political, economic, legal and social conditions in Brazil. Forward looking information is not merely based on historical fact but also reflects management s objectives and expectations. The Company can give no assurance that expectations disclosed in this presentation will be confirmed. The words estimate, believe, "anticipate", wish", "expect", foresee", intend", "plan, "predict", forecast", aim" and similar words, written and/or spoken, are intended to identify affirmations which, necessarily, involve known and unknown risks. Known risks include uncertainties which include, but are not limited to, interest rates, product competition, market acceptance of products, the actions of competitors, regulatory approval, currency type and fluctuations, monetary policy, among others. This presentation is based on events up to June 30 th, The Company or any of its affiliates take no responsibility or liability to update the contents of this presentation in the light of new information and/or future events. Banco Votorantim and/or any of its affiliates do not accept and take no responsibility, whatsoever, direct or indirect, for transactions or investment decisions made on the basis of information contained in this presentation. Banco Votorantim may alter, modify or otherwise change in any manner the contents of this presentation, without the obligation to notify any person of such revision or changes. This presentation does not constitute an offer, or invitation, or solicitation of an offer, to subscribe for or purchase any securities. Neither this presentation nor anything contained herein shall form the basis of any contract or commitment whatsoever. Recipients of this presentation are not to construe the contents of this summary as legal, tax or investment advice and recipients should consult their own advisors in this regard. The market and competitive position data, including market forecasts, used throughout this presentation were obtained from internal surveys, market research, publicly available information and industry publications. Although the Company has no reason to believe that any of this information or these reports are inaccurate in any material respect, the Company has not independently verified the competitive position, market share, market size, market growth or other data provided by third parties or by industry or other publications and therefore does not make any representation as to the accuracy of such information. This presentation and its contents are proprietary information and may not be reproduced or otherwise disseminated in whole or in part without the Company s prior written consent. 1

3 Agenda Macroeconomic environment and the banking sector Corporate governance Strategy and business portfolio highlights Financial highlights 2

4 Brazilian macroeconomic highlights Brazilian macroeconomic highlights GDP (R$T) and real GDP growth (%p.y.) Benchmark interest rate¹ (Selic - %p.y.) and 12 month IPCA consumer price index² (%) % % % % % % %(F) Selic IPCA International reserves (US$B) Unemployment index³ (%) May/12 1. Selic benchmark, by the end of the period; 2. Inflation, measured by the IPCA index; 3. As a % of the economically active population in metropolitan areas (average for the ongoing year) Note: (F) forecast Source: Bacen; IBGE 3

5 Brazilian Financial System Brazilian Financial System (SFN¹) SFN Total loan portfolio (R$T) Credit as % of GDP % 55% % 57% % 55% % 54% % 54% % 53% % 53% Individuals Enterprises 35.2% 40.5% 43.7% 45.2% 49.0% 49.4% 50.6% Dec/07 Dec/08 Dec/09 Dec/10 Dec/11 ² Individuals loans - Non-earmarked (R$B) Reserve requirements collection (R$B) % 20% 35% % 20% 35% % 23% 33% % 25% 33% % 25% 31% % 25% 30% % 25% 29% Others Payroll loans Auto finance Mar/10: changed collection for time deposits and additional reserve requirements for deposits Dec/07 Dec/08 Dec/09 Dec/10 Dec/11 ² Jun/12 1. SFN: Sistema Financeiro Nacional; 2. In, individuals loan portfolio included R$324B of Earmarked resources, and R$688B of Non-earmarked resources, including R$202B in auto finance (CDC+Leasing) Source: Bacen; IBGE 4

6 Agenda Macroeconomic environment and the banking sector Corporate governance Strategy and business portfolio highlights Financial highlights 5

7 Banco Votorantim Overview Banco Votorantim is one of the leading players in Brazil 3 rd largest privately-held Brazilian bank in total assets and loan portfolio Banco Votorantim is the 3 rd largest privatelyheld Brazilian bank in total assets......and is well-positioned to consolidate itself as one of the largest banks in Brazil Banco do Brasil Itaú Unibanco Bradesco CEF Santander HSBC Votorantim Safra BTG Pactual Citibank Largest Financial Institutions - Assets (R$B)¹ State-owned Foreign 935 National privately-held...and also in terms of loan portfolio... Shareholder 50% total Diversified business portfolio Wholesale Banking Top 5 in credit for large enterprises Consumer Finance Market leader in used auto finance Top 5 in payroll loans³ ~ 5.6 million customers Wealth Management 8 th largest asset manager by Anbima s managers ranking: R$43.2B in AuM Largest Financial Institutions Loan Portfolio (R$B)¹ Banco do Brasil Itaú Unibanco CEF Bradesco Santander Votorantim² HSBC Safra Banrisul Volkswagen State-owned Foreign 398 National privately-held Strategic partnership with Banco do Brasil, the largest financial institution in Latin America Strong and committed shareholder base Banco do Brasil and Votorantim Group Low fixed-cost business model Extensive third-party distribution network in Consumer Finance (vs. branches) + 1. Excluding BNDES (state-owned development bank); figures as of, except for Banco Votorantim (); 2. Considers BV s own portfolio (excluding securitization); 3. Includes credit assignments with recourse and FIDCs Source: Banco Votorantim; Bacen; Anbima 6

8 Banco Votorantim Shareholder base Banco Votorantim has a strong shareholder base Two of the largest and most solid Brazilian institutions One of the largest privately-held industrial groups in Latin America Founded in1918 R$23.7B revenues and R$5.3B EBITDA in 2011 Market leader among its diversified portfolio of basic materials and commodities, e.g.: Pulp & Paper: #1 pulp producer in the world Cement: top 10 global player; #1 in Brazil Metals: leading global position in zinc and nickel; #1 aluminum producer in Brazil Steel: established presence in long steel in South America Orange juice: top 3 global player ~65,000 employees Votorantim Group Ratings: Baa3 (Moody s) / BBB (S&P) / BBB (Fitch) Total: 50.00% Common: 50.01% Preferred: 49.99% Largest FI in Brazil, 200+ years old R$12.1B net profit in 2011, and 21.7% ROAE Market leader in terms of Total assets (R$981B) Total deposits (R$442B) Loan portfolio (R$461B) AuM (R$416B) Diversified funding base, with low cost deposits ~65% of the basic interest rate Selic 59.2% controlled by the Brazilian Government Market capitalization: R$74.4B () ~56M retail clients ~114k employees Banco do Brasil (BB) Ratings: Baa2 (Moody s) / BBB (S&P) / BBB (Fitch) Total: 50.00% Common: 49.99% Preferred: 50.01% Note: Figures as of Dec/11 Source: IR websites 7

9 Strategic partnership Partnership with Banco do Brasil was established in 2009, based on a sound strategic rationale Successful operating model in Auto Finance and Alternative Channels National presence, through an extensive distribution network Votorantim Group s solidity and industrial expertise Solidity and tradition of the oldest Brazilian bank Asset origination capacity Robust deposit base: Funding Efficient brokerage structure and differentiated Asset Management products Largest consumer finance customer base in Brazil Stronger and more competitive institution 8

10 Banco Votorantim Corporate Governance Shared governance between the shareholders Governance structure Board of Directors Statutory Advisory Name Position Shareholder Fiscal Council Audit Committee Compensation & HR ALM, Risks & Capital Board of Directors Executive Committee Finance Products & Marketing Operational Review (CRO) Operating Committees Communication José Ermírio de Moraes Neto Chairman Votorantim Finanças Aldemir Bendine Vice-Chairman Banco do Brasil Ivan de Souza Monteiro Director Banco do Brasil Marcus de Camargo Arruda Director Votorantim Finanças Paulo Rogério Caffarelli Director Banco do Brasil Wang Wei Chang Director Votorantim Finanças Equal representation of each shareholder 2-year term of office, and annual Chairman/Vice-Chairman rotation between the two shareholders Decisions are made by absolute majority, with no casting vote Internal Controls Credit Executive Committee Expenses (CAAD) Ombudsman Projects Sustainability Tax Equal representation of each shareholder Business Products Human Resources Technologies Equal representation of each shareholder (temporary) Name Position João Roberto Gonçalves Teixeira CEO Alvaro Jorge Fontes de Azevedo Executive Officer Elcio Jorge dos Santos Executive Officer Marcos L. Monteiro Executive Officer Gestão profissional com executivos experientes Pedro Mollo Neto Executive Officer Ricardo Arruda Executive Officer Robert John van Djik Executive Officer Source: Banco Votorantim 9

11 Agenda Macroeconomic environment and the banking sector Corporate governance Strategy and business portfolio highlights Financial highlights 10

12 Banco Votorantim Corporate strategy Banco Votorantim has a diversified business portfolio, internally divided into Wholesale and Consumer Finance Expanded¹ loan portfolio R$80.6B R$80.6B Wholesale R$42.3B Cons. Finance² R$38.3B Corporate & IB (CIB) Middle Market Wealth Management Auto Finance Other businesses Pillars Position CIB as a relevant partner, by building agile and long-term relationships, as well as offering integrated financial solutions (IB, derivatives, structured products and distribution), suitable for each client Continue to grow with quality in this segment of mid-sized companies, gaining scale and efficiency Focus on relationships and operational agility Enhance product offering 8 th largest asset manager, with innovative products Private Bank focused on estate planning, offering customized solutions, with an open architecture Continuously expand synergies with BB Among the top players in the market, enhancing partnership with BB Focus on used auto finance (multi-brand dealers) Partner with BB in new auto finance (new car dealers) Increase profitability in individual loans, with focus on INSS payroll loans Continue to grow in credit cards Expand insurance brokerage revenues (e.g. Auto) Shareholders Banco do Brasil + Votorantim Group Banco Votorantim is focused on increasing the return on capital of all business lines in the medium-term 1. Includes guarantees provided and private securities; 2.Consumer Finance s own loan portfolio totaled R$38.3B in, besides R$15.4B in credit assignments with recourse (including FIDCs subordinated shares, which represented R$3.3B) Note: Middle Market segment refers to enterprises with annual sales between R$20M and R$400M; when annual sales are above R$400M, the enterprise belongs to CIB segment 11

13 Wholesale CIB and Middle Market CIB and Middle Market have increased their focus on profitability, and kept the conservatism in credit provisions CIB & Middle Market Wholesale: expanded¹ loan portfolio reached R$42.3B in Corporate & IB (CIB) highlights Middle Market Corporate (CIB) Wholesale expanded¹ loan portfolio (R$B) June.12/ June.11 8% 30% 3% More disciplined capital allocation (focus on profitability) Assessment of operations via Business Committee (weekly) Individual business plans for each client Improved relevance to customers, through strengthening of the product platform. 1H12 highlights: Derivatives (hedge): ranked 8 th in CETIP s ranking Investment Bank: 25 Fixed Income and 2 Equities operations, besides the announcement of 4 Mergers & Acquisitions Project Finance: R$1.1B in concluded operations One-stop-shop Project Structuring factory Advisory and financing throughout the project cycle Middle Market highlights Focus on profitability (vs. growth) Coverage Ratio² 180% 189% Cautious loan portfolio expansion Delinquency levels below market average (2.3%³ in ) Scale and efficiency gains Focus on exploring opportunities related to infrastructure investments and the expected growth of capital market 1. Includes guarantees provided and private securities; 2. Ratio between ALL balance and balance of operations past due by over 90 days (Bacen s Res. 2,682 criteria); 3. Past due by over 90 days (Bacen s Res. 2,682 criteria) 12

14 Wholesale Wealth Management VWM&S reached R$43.2B in assets under management Wealth Mgmt Wealth Management (VWM&S) expands 14% in 12 months and VAM is now the 8 th largest Asset¹ Asset Management highlights VWM&S assets under management²(r$b) Anbima ranking¹ 13th 9th 8th +14% Continuous market share expansion in the last months, reaching 1.9% in Structured Products (FIDC, FII and FIP³) ends with R$11.4B in assets under management Enhanced synergies with BB: assets from funds structured in partnership reach R$2.2B 4 Private Bank highlights 12% growth in assets under management (AuM) and 17% growth in the customer base, in the last 12 months ISO 9001:2008 Certificate for the scope of Relationship, Wealth Management and Advisory regarding Brazilian clients, by Bureau Veritas Focus on estate planning via customized solutions, with an open architecture concept VWM&S aims at being one of the best in structuring and managing high value-added products 1. Includes Treasury, Brokerage and offshore products; 2. Votorantim Asset Management s(vam) position in Anbima s managers ranking; 3. Investment funds in credit receivables, real estate, and equity shares; 4. Total assets by the end of Source: Banco Votorantim; Anbima 13

15 Consumer Finance Auto Finance BV Financeira is one of the leading players in auto finance, and operates in partnership with BB Auto Finance Auto finance represents 80% of Consumer Finance s managed loan portfolio Banco Votorantim Auto finance managed¹ loan portfolio(r$b) Auto Finance highlights BVF operates as BB s arm in auto financing outside BB s branch network Auto finance (securitized)¹ Auto finance (own portfolio) (86%) (86%) (77%) (66%) (72%) BVF is among the leading players in the auto finance market ~19.3% portfolio market share² ~ 5.6 million clients with focus on multi-brand dealers (used vehicles) for own origination Multi-brand dealers represented 81% of light vehicles financed in (67% in ) BB and BV Financeira have jointly advanced in the structuring of a credit assignment model without recourse ( BV Financeira Originadora ) Focus on new car dealers (new vehicles) Auto finance/ Cons. Fin.¹(%) 88% 80% Low fixed-cost business model, based on an extensive third-party distribution network More than 22,000 multi-brand dealers throughout Brazil 1. Includes credit assignments with recourse and for FIDCs; 2.Estimate based on the managed loan portfolio (excluding FIDCs) Source: Banco Votorantim; Bacen; Abel 14

16 Consumer Finance Auto Finance BV Financeira reinforced focus on multi-brand dealers, reduced average tenor and required greater down payment Auto Finance Production via multi-brand¹ dealers/total (%) Auto production average interest rate (%p.y.) 67% 77% 81% Higher than SFN²: 20.7% in Auto production average tenor (months) Auto production loan-to-value³ (%) % 59% 57% 1. Considers light vehicles; 2. National Financial System ( Sistema Financeiro Nacional ); 3. Financed % of the asset s value (the lower the %, the higher the required down payment) Source: Banco Votorantim 15

17 Consumer Finance Payroll loans Banco Votorantim s payroll loans business is focused on INSS (retirees and pensioners) Payroll loans Social security represents 67% of BV s managed payroll loan portfolio Payroll loans highlights Managed¹ payroll loan portfolio (R$M) Securit.¹ Operation focused on INSS (retirees and pensioners) INSS represents 67% of BV s managed payroll loan portfolio Selective operations in both private and public sector (68%) Dec/ (59%) Dec/09 INSS/ Payroll loan portfolio (%) 4.9 (56%) Dec/10 55% 6.2 (59%) Dec/ (64%) 7.0 (68%) 67% Own portfolio Increased focus on refinancing contracts Estimated market share of 5.9% (considering managed¹ portfolio) National presence mainly through an extensive third-party distribution network Relationship with over 1,000 correspondent banks 1. Includes credit assignments with recourse Source: Banco Votorantim; Bacen 16

18 Agenda Macroeconomic environment and the banking sector Corporate governance Strategy and business portfolio highlights Financial highlights 17

19 Financial highlights Financial highlights Total revenues (Gross Financial Margin, Fee Income and Other Operating Income) Allowance for loan losses expenses R$ million 1,819 1,748 1,186 1,400 1,405 Wholesale Cons. Finance , ,181 1, ,357 1, ,331 2Q12/ 1Q12-3% -12% -2% 2Q11 3Q11 4Q11 1Q12 2Q12 2Q11 3Q11 4Q11 1Q12 2Q12 Non-interest expenses (Personnel, Administrative, Operating and Other Tax¹) Net income Other Personnel Administrative Q11 3Q11 4Q11 1Q12 2Q12 2Q11 3Q11 4Q11 1Q12 2Q12 Note: excluding the timely expenses related to the restructuring process (e.g. labor provisions), 2Q12 non-interest expenses would have decreased R$10M vs. 1Q12 1. Federal, state and local taxes (excludes ISS, PIS and Cofins) 18

20 Financial highlights Financial highlights Net Interest Margin NIM (% p.y.) Efficiency Ratio¹ (%) last 12 months 5.5% 4.9% 3.5% 4.5% 4.4% 36.2% 37.0% 39.7% 43.4% 48.1% 2Q11 3Q11 4Q11 1Q12 2Q12 Sept/11 Dec/11 1.Ratio between (a) the sum of Personnel and Other administrative expenses and (b) the sum of Gross income from financial intermediation before Allowance for Loan Losses (ALL), Fee income, Other operating income/expenses, and Fiscal hedge adjustment 19

21 Financial highlights Financial highlights R$ Billion Total assets Assets under management Sept/11 Dec/11 Sept/11 Dec/11 Loan portfolio Expanded¹ managed² loan portfolio Securitization Expanded credit portfolio¹ Sept/11 Dec/11 Sept/11 Dec/11 1. Includes guarantees provided and private securities, 2. Includes credit assignments with recourse and credit assignments for FIDCs (of which Banco Votorantim owns 100% of the subordinated quotas) 20

22 Financial highlights Expanded managed loan portfolio Expanded¹ managed² loan portfolio (R$B) Total Others³ June12/June11 June12/Mar12 0.0% -1.9% -0.5% -0.8% Auto finance -7.0% -5.8% Middle Market 30.5% 5.2% Corporate 3.3% 1.1% Sept/11 Dec/ Credit assignments with recourse(r$b) Credit assignments for FIDCs(R$B) 1. Includes guarantees provided and private securities, 2. Includes credit assignments with recourse and credit assignments for FIDCs (of which Banco Votorantim owns 100% of the subordinated quotas); 3. Payroll loans, CDC, credit cards and individual loans 21

23 Financial highlights Credit indicators Credit indicators Non-performing loans - 90 days¹ (%) Non-performing loans - 15 to 90 days¹ (%) Total Wholesale Consumer Finance Total Wholesale 7.1% 8.0% 7.4% 7.6% 8.1% 5.5% 3.3% 4.4% 6.3% 5.8% 4.5% 5.5% 5.9% 6.2% 3.6% 2.7% 1.1% 1.7% 2.0% 2.1% 0.3% 1.1% 1.3% 0.8% Sept/11 Dec/11 Sept/11 Dec/11 Consumer Finance 8.7% 6.7% 1.2% 8.1% 6.0% 0.7% Allowance for loan losses balance Coverage Ratio¹ (%) ALL balance (R$M) ALL balance/managed loan portfolio¹ 5.9% 6.9% 108.2% 103.9% 103.9% 102.0% 108.1% 2.9% 2, % 2, % 3,675 4,536 5,091 Sept/11 Dec/11 Sept/11 Dec/11 1. Considers credit assignments with recourse and credit assignments for FIDCs ; past due loans according to Bacen s Res. 2,682 criteria 22

24 Financial highlights Funding Funding sources FUNDING SOURCES Variation (%) June.11 Mar.12 June.12 (R$ Billion) June12/Mar12 June12/June12 (R$ Bilhões) Deposits (10.2) (2.8) Repos¹ (21.6) (16.5) Issuance of Securities² Financing Bills Subordinated Debt Subordinated Financing Bills (3.6) 95.4 Loans and Others³ (10.0) (27.8) Onlendings (6.4) (21.2) Total Funding (6.5) (0.2) Securitization (credit assignm ents + FIDCs) (14.5) (3.2) Credit assignments - w ith recourse (11.8) (7.0) Credit assignments - for FIDCs (23.0) 14.0 Total Funding and Securitization (7.9) (0.7) International Funding 5 /Total Funding and Securitization (%) Loan Portfolio/Total Funding (%) Additionally, Banco Votorantim has a stand-by credit facility of ~R$7B from BB, which has never been tapped 1. Private securities (excludes government securities); 2. Includes Eurobonds, Debentures, Financial bills and LCA; 3. Includes Option Box and NCE repo; 4. FIDCs of which Banco Votorantim owns 100% of the subordinated quotas; 5. Includes foreign securities, foreign borrowings and subordinated bills 23

25 Financial highlights Capital and liquidity Basel Index and Shareholders Equity Basel Index Shareholders Equity (R$M) Shareholders increased capital by R$ 2B in Tier II 13.9% 4.1% 12.7% 4.2% 14.1% 4.7% 13.0% 4.4% 15.5% 5.3% 8,706 8,718 8,041 7,566 9,304 Tier I 9.7% 8.5% 9.5% 8.7% 10.2% Sept/11 Dec/11 Sept/11 Dec/11 24

26 Ratings Banco Votorantim s main ratings RATING AGENCIES International National Long-Term Short-Term Long-Term Short-Term Long-Term Short-Term Fitch Ratings Local Currency Foreign Currency Nacional BBB- F3 BBB- F3 AA+(bra) F1+(bra) Moody s Local Currency Deposits Foreign Currency Deposits Nacional Baa2 P-2 Baa2 P-2 Aaa.Br BR-1 Standard & Poor's Local Currency Foreign Currency Nacional BBB- A-3 BBB- A-3 braaa bra-1 Banco Votorantim is an Investment Grade bank by Fitch, Moody s and S&P 25