BRAZILIAN HIGH-TECH LITIGATION: Law, Business & Policy Thursday, May 12 Washington, DC Scan to download this presentation or to receive link via e-mail
Introduction Susan L. Karamanian Associate Dean B RA ZILIAN HIGH-TECH LITIGATION: Law, Business & Policy The George Washington University Law School
BRAZILIAN HIGH-TECH LITIGATION: Law, Business & Policy Thursday, May 12 Washington, DC Scan to download this presentation or to receive link via e-mail
Luncheon at Faculty Conference Center Alvir Hoffmann Deputy CEO and Executive Vice-President of FEBRABAN B RA ZILIAN HIGH-TECH LITIGATION: Law, Business & Policy The George Washington University Law School
Brazil: Economic Outlook, credit market and banking sector Alvir Hoffmann Deputy CEO / Vice President
Economic Activity 2007.I 2007.III 2008.I 2008.III 2009.I 2009.III 2010.I 2010.III 2011.I 2011.III 2012.I 2012.III 2013.I 2013.III 2014.I 2014.III 2015.I 2015.III 11/02/2015 26/02/2015 13/03/2015 28/03/2015 12/04/2015 27/04/2015 12/05/2015 27/05/2015 11/06/2015 26/06/2015 11/07/2015 26/07/2015 10/08/2015 25/08/2015 09/09/2015 24/09/2015 09/10/2015 24/10/2015 08/11/2015 23/11/2015 08/12/2015 23/12/2015 07/01/2016 22/01/2016 06/02/2016 21/02/2016 07/03/2016 22/03/2016 06/04/2016 21/04/2016 06/05/2016 GDP (YoY %) Market Expectations* - GDP (YoY %) 10,0 8,0 6,0 4,0 2,0 0,0-2,0-4,0-6,0-8,0 3,0 2,0 1,0 0,0-1,0-2,0-3,0-4,0-5,0 2016 2017 06/05/16 0,50 06/05/16-3,86 Source: IBGE Source: BCB (*Focus of 06/05) 6
Economic Activity out/11 abr/12 out/12 abr/13 out/13 abr/14 out/14 abr/15 out/15 abr/16 set/11 dez/11 mar/12 jun/12 set/12 dez/12 mar/13 jun/13 set/13 dez/13 mar/14 jun/14 set/14 dez/14 mar/15 jun/15 set/15 dez/15 mar/16 jun/16 set/16 dez/16 mar/17 jun/17 set/17 CPI decomposition (ac. in 12 months %) CPI ac. in 12 months (YoY %) 19% 18% 17% 16% 15% 14% 13% 12% 11% 10% 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% IPCA IPCA - monitored prices IPCA - tradable IPCA - nontradable 9,95% 9,11% 9,28% 7,42% 12,0 10,0 8,0 6,0 4,0 2,0 0,0 abr/16 9,28 Focus 06/05 mai/16 9,04 jul/16 8,16 dez/16 7,00 out/17 5,82 Source: IBGE Sources: BCB (Focus of 06/05), & IBGE 7
Economic Activity 11/02/2015 26/02/2015 13/03/2015 28/03/2015 12/04/2015 27/04/2015 12/05/2015 27/05/2015 11/06/2015 26/06/2015 11/07/2015 26/07/2015 10/08/2015 25/08/2015 09/09/2015 24/09/2015 09/10/2015 24/10/2015 08/11/2015 23/11/2015 08/12/2015 23/12/2015 07/01/2016 22/01/2016 06/02/2016 21/02/2016 07/03/2016 22/03/2016 06/04/2016 21/04/2016 06/05/2016 11/02/2015 26/02/2015 13/03/2015 28/03/2015 12/04/2015 27/04/2015 12/05/2015 27/05/2015 11/06/2015 26/06/2015 11/07/2015 26/07/2015 10/08/2015 25/08/2015 09/09/2015 24/09/2015 09/10/2015 24/10/2015 08/11/2015 23/11/2015 08/12/2015 23/12/2015 07/01/2016 22/01/2016 06/02/2016 21/02/2016 07/03/2016 22/03/2016 06/04/2016 21/04/2016 06/05/2016 Market Expectations* - CPI (YoY %) Market Expectations* - Selic (YoY % end-of-period) 9,0 16,0 8,0 15,0 14,0 7,0 7,00 13,0 13,00 6,0 12,0 5,0 5,62 11,0 11,75 10,0 4,0 2016 2017 9,0 2016 2017 3,0 8,0 Source: BCB (*Focus of 06/05) Source: BCB (*Focus of 06/05) 8
Economic Activity jan/14 fev/14 mar/14 abr/14 mai/14 jun/14 jul/14 ago/14 set/14 out/14 nov/14 dez/14 jan/15 fev/15 mar/15 abr/15 mai/15 jun/15 jul/15 ago/15 set/15 out/15 nov/15 dez/15 jan/16 fev/16 mar/16 2016* 20.000 dez/11 fev/12 abr/12 jun/12 ago/12 out/12 dez/12 fev/13 abr/13 jun/13 ago/13 out/13 dez/13 fev/14 abr/14 jun/14 ago/14 out/14 dez/14 fev/15 abr/15 jun/15 ago/15 out/15 dez/15 fev/16 CA deficit & TB (ac. in 12 months USD M*) International Reserves / CA (ac. in 12 months) 105.000 46.400 95.000 85.000 75.000 65.000 55.000 45.000 35.000 25.000 15.000 50.000 40.000 30.000 20.000 10.000 0-10.000 10,0 9,0 8,0 7,0 6,0 5,0 4,0 3,0 2,0 1,0 0,0 Current Account Deficit Trade Balance (right) Source: BCB / CA = Current Account Source: BCB / CA = Current Account 9
Economic Activity R$ Bi jul/13 set/13 nov/13 jan/14 mar/14 mai/14 jul/14 set/14 nov/14 jan/15 mar/15 mai/15 jul/15 set/15 nov/15 jan/16 mar/16 Federal Tax Revenue (ac. in 12 months prices of mar/16) Gross Debt and Primary Result (% GDP) 1.410 1.390 1.370 1.350 1.330 1.310 1.290 1.270 1.250 83,0 80,0 77,0 74,0 71,0 68,0 65,0 62,0 59,0 56,0 53,0 50,0 3,5 3,3 2,9 80,0 2,6 2,5 2,2 2,0 1,8 74,4 1,5 66,2 0,5 58,9-0,5 59,3-1,1 56,0 54,8-0,6-1,5-1,7 51,8 53,3-1,9 51,3-2,5 2008 2009 2010 2011 2012 2013 2014 2015 2016* 2017* Gross Debt Primary Result Sources: Receita Federal, BCB e Min. Fazenda Sources: Receita Federal, BCB e Min. Fazenda 10
Economic Activity Source: BM&FBovespa 11 Source: BCB Exchange Rate (/USD) Ibovespa Index 40.000 45.000 50.000 55.000 60.000 65.000 jul/14 set/14 nov/14 jan/15 mar/15 mai/15 jul/15 set/15 nov/15 jan/16 mar/16 2,00 2,50 3,00 3,50 4,00 4,50 jul/14 ago/14 set/14 out/14 nov/14 dez/14 jan/15 fev/15 mar/15 abr/15 mai/15 jun/15 jul/15 ago/15 set/15 out/15 nov/15 dez/15 jan/16 fev/16 mar/16 abr/16
Economic Activity mai-15 jun-15 jul-15 ago-15 set-15 out-15 nov-15 dez-15 jan-16 fev-16 mar-16 abr-16 mai-15 jun-15 jul-15 ago-15 set-15 out-15 nov-15 dez-15 jan-16 fev-16 mar-16 abr-16 Credit Default Swap 1 YR (points) Interest Curve (Pré-DI BM&F - %) 400 350 300 250 200 150 100 16,5 16,0 15,5 15,0 14,5 14,0 13,5 50 13,0 Source: Bloomberg Source: Bloomberg 12
Credit Market Credit to GDP (%) 50,3 52,6 54,7 54,5 39,7 42,6 44,1 46,5 34,7 dez/07 dez/08 dez/09 dez/10 dez/11 dez/12 dez/13 dez/14 dez/15 Source: BCB 13
Credit Market mar-14 mai-14 jul-14 set-14 nov-14 jan-15 mar-15 mai-15 jul-15 set-15 nov-15 jan-16 mar-16 Credit to GDP (%) Household Credit by modality (YoY %) 30 26 35% 30% 30,5% 22 18 25% 20% 15% 15,5% 12,6% 14 10% 5% 13,2% 7,6% 6,3% 10 dez/07 dez/08 dez/09 dez/10 dez/11 dez/12 dez/13 dez/14 dez/15 0% Non-Earmarked Earmarked Payroll-deducted personal loans Personal Credit Real estate financing Source: BCB Source: BCB 14
Credit Market Non-performing Loans (%) 6,0 4,5 3,0 1,5 dez/11 jun/12 dez/12 jun/13 dez/13 jun/14 dez/14 jun/15 dez/15 Total Nonfinancial Corporations Households Source: BCB 15
Credit Market mar/14 mai/14 jul/14 set/14 nov/14 jan/15 mar/15 mai/15 jul/15 set/15 nov/15 jan/16 mar/16 Credit Quality & Provisions 200 180 160 140 120 100 80 60 40 6,0 5,5 5,0 4,5 4,0 3,5 3,0 2,5 2,0 1,5 1,0 Nonperforming Portfolio - R$ Bi - left axis Provisions (%) - right axis Source: BCB Provisions - R$ bi - left axis Nonperforming Loans (%) - right axis 16
Banking Sector Austrália França Índia China Itália Rússia Japão Coreia do Sul EUA Reino Unido África do Sul Canadá Argentina México Brasil (2) Indonésia Turquia Alemanha Regulatory capital to risk-weighted assets (%) Capital / Assets (%) 18,0 16,0 16,1 15,5 16,7 16,3 16,4 14.0 12.0 14,0 12,0 11,5 11,0 12,3 12,1 11,8 10.0 10,0 8.0 8,0 6.0 6,0 4,0 4.0 2,0 2.0 - dez/13 jun/14 dez/14 jun/15 dez/15 0.0 Common Equity Tier1 Ratio Tier1 Ratio Regulatory Capital to Risk-Weighted Assets Source: BCB Sources: FMI ; BCB (2) 17
Banking Sector dez/09 jun/10 dez/10 jun/11 dez/11 jun/12 dez/12 jun/13 dez/13 jun/14 dez/14 jun/15 dez/15 Net Profit x ROE (BRL bi) (%) 90,0 80,0 70,0 60,0 50,0 40,0 30,0 20,0 10,0 NP Private Banks NP SO Banks ROE Adjusted ROE 25 20 15 10 5 0,0 0 Source: BCB 18
Banking Sector R$ Bi Short-term liquidity (Liquid Assets / Cash Out on Stress) Long-term liquidity (Stable Funding Available / Stable Funding Required) 700.000 2,5 4.500.000.000 Stable Funding Available - R$ mil Stable Funding Required - R$ mil Structural Liquidity Ratio (%) - proxy NSFR 120% 600.000 2,0 500.000 400.000 1,5 300.000 1,0 200.000 0,5 100.000 0 0,0 jan/12 jun/12 nov/12 abr/13 set/13 fev/14 jul/14 dez/14 mai/15 4.000.000.000 3.500.000.000 3.000.000.000 2.500.000.000 2.000.000.000 1.500.000.000 1.000.000.000 500.000.000 100% 80% 60% 40% 20% 0 0% Liquid Assets Stressed Cash Flow Liquidity Ratio (proxy LCR) Source: BCB Source: BCB 19
Thank You! alvir.hoffmann@febraban.org.br