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Presentation on
4Q10 Results
1
Credit Behavior in Brazil
Loan Portfolio
Funding and Liquidity
Results from Operations
Capital Market
2
1,704
607
733
936
1,2271,410
2005 2006 2007 2008 2009 2010
Nonearmarked Resources Earmarked Resources
Source: Central Bank of Brazil – Credit Information System - SCR
Loans in the Brazilian Financial System
R$ billion
29%
71%
29%
68%
32%
71%
Variation % Individuals Corporates
Total Credit Dec/10
Non
earmarked
Resource
Earmarked
Resource Total
Non
earmarked
Resources
Earmarked
Resources Total
In the month 1.8 2.7 2.1 1.1 1.1 1.1 1.6
In the quarter 5.6 7.7 6.2 5.0 5.2 5.1 5.6
In the year 18.8 30.7 21.9 15.4 25.7 19.3 20.5
In 12 months 18.8 30.7 21.9 15.4 25.7 19.3 20.5
Total Credit Volume and Segmentation
66%
34%
Loans to individuals growth mainly supported by
housing loans with earmarked resources and car
financing with free resources
Corporate Credit earmarked resources from BNDES
still stand out as well as working capital with free
resources.
Government owned banks maintained a 42% share on
total loans in the financial system
3
3.6
5.7
4.6
0
1
2
3
4
5
6
7
8
9
10
Dec Dec Dec 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
2006 2007 2008 2009 2010
Corporates Individuals Total
Sourc
e: B
AC
EN
%
Central Bank Default Rates = loans overdue above 90 days on total loan portfolio
Default Rate on Loans to Individuals: Fast retreat from June 2009
Default Rate on Corporate Loans: Stable at circa 3.6% from March 2010
Credit Default Ratios Stability in Corporate lending and steady decline in loans to individuals
4
Credit Behavior in Brazil
Loan Portfolio
Funding and Liquidity
Results from Operations
Capital Market
5
14.3% Loan Portfolio* growth = R$ 1.9 billion
Local currency loans = 80% of total loan portfolio
Loans in Brazilian Reais and Trade Finance deals
allocated to the “Upper Middle” segment stand
for 14% of the total portfolio
Credit assignment accounts just for 0.6% of the
portfolio and guarantees, 3.3%
Trade Finance portfolio comprises :
85.7% Export financing (ACC/ ACE)
14.1% Import financing (FINIMP)
0.2% Import L/Cs
Amounts in foreign currency show a 10% growth
in 4Q10 and 31% in 12 months: US$ 168.3 million – 4Q09
US$ 200.8 million – 3Q10
US$ 221.0 million – 4Q10
Local Currency Loans Trade Finance
298.4344.1 369.1
4T09 3T10 4T10
R$ Million
1,400.3 1,425.01,572.2
4Q09 3Q10 4Q10
R$ Million
* including guarantees issued
Credit Assignment Guarantees issued and L/Cs
6
10 largest
20%
11 - 60
31%61 - 160
24%
Other
25%
Industry
56%
Other
Services
23%
Individuals
7%
Financial
Cos
3%
Commerce
11%
Up to 90
days
40%
91 to 180
18%
181 to 360
13%
Above 360
days
29%
Credit Portfolio Breakdown
By Client Concentration
By Economic Activity By Segment
By Maturity
Middle
Market
82%
Upper
Middle
14%
Retail and
other
4%
7
Loan Portfolio breakdown by Industry
18%
9%6%5%
5%5%
3%
3%
3%
4%
3%
17%
2%
2%
2%
2%
11%
Food & Beverage
Agribusiness
Heavy Construction
Financial Institutions
Chemical & Pharmaceutical
Transportation & Logistics
Automotive
Textile, Apparel & Leather
Education
Energy
Metal Industry
Oil & Biofuel
Wholesale & Retail Trade
Financial Services
Individuals
Pulp & Paper
Other Industries
8
Loan Portfolio Quality
(*) Total outstanding amount of contracts with any installment overdue above 60 days
Allowance for Loan Losses (ALL) NPL(*) / Total Loans (%)
Asset Quality
Provisioning Coverage = 6.4% of Loan Portfolio and 196% of NPL 90 days
5.9
3.7 3.8
4Q09 3Q10 4Q10
Collateral Structure
Securities
3%
Real State
9%
Other
4%
Aval PN
23%
Monitored
Pledge
8%
Vehicles
3%
Pledge/
Lien
4%
Receivables
46%
Risk Rating
C
22.2%
D-H
14.2%
AA
2.5%A
35.4%
B
25.6%
133.4
112.2119.6
4Q09 3Q10 4Q10
R$ Million
10.4% Performing
3.8% NPL +60 days
9
Credit Behavior in Brazil
Loan Portfolio
Funding and Liquidity
Results from Operations
Capital Market
10
Time
Deposits
37%
DPGE(*)
29%
Interbank
Deposits
6%
Foreign
Borrowings
16%
BNDES
Onlending
6%
Demand
Deposits
2%ALC &
BN(*)
4%
Local Currency Funding prevalence
R$ Million
6.7% increase in the quarter
84% of funding in Brazilian Real
Foreign Borrowings:
• Trade Finance – 94%
• IFC – 6%
Total Funding Funding Breakdown
1.793,21.902,7
2.030,6
4Q09 3Q10 4Q10
CDs and DPGEs(*) account for 66% of total funding
Deposits average term to maturity = 496 days
CDs: R$ 740 MM - 347 days
DPGEs: R$ 591 MM - 795 days
ALC & BN: R$ 82 MM – 120 days
Interbank Deposits: R$ 117 MM - 175 days
(*) DPGE – Time Deposits bearing Special Insurance from FGC; ALC – Agribusiness Letters of Credit; BN – Bank Notes
11
348
248
603
521492
244
791734
90 days 180 days 360 days Above 360 days
Assets Liabilities
Good Liquidity maintained
696.9 680.7733.8
4Q09 3Q10 4Q10
Free Cash
R$ Million
R$ Million
Assets and Liabilities Management
Treasury’s main task is the
management of liquidity, interest rate,
currencies and tenor mismatch risks
Free Cash:
46% of Total Deposits
172% of Shareholder’s Equity
Free Cash =
(Cash + Liquid Fin. Assets + Securities + Derivatives)
(-)
(Open Market Funds + Derivatives)
12
Credit Behavior in Brazil
Loan Portfolio
Funding and Liquidity
Results from Operations
Capital Market
13
Profit from Financial Intermediation growth in
2010 derived from:
Increased revenue from securities, derivatives and FX operations
Stability in Financial Intermediation Expenses, including the lower pressure of provisioning expenses
R$ Million R$ Million
Income from Financial Intermediation composed by revenues from:
Loans 59%
Securities 21%
Derivatives 12%
Foreign Exchange Operations 8%
Revenues from derivatives are both related to hedge of investments in government bonds and time deposits
Income from Financial Intermediation Gross Profit from Financial intermediation
Financial Intermediation Results Evolution
93.0123.0 116.0
407.0454.0
4Q09 3Q10 4Q10 2009 2010
27.439.1
94.3
141.9
34.5
4Q09 3Q10 4Q10 2009 2010
14
63.2% 61.6%65.7%
52.3%
60.9%
4Q09 3Q10 4Q10 2009 2010
Net operating expenses increased by 7.2%
quarter on quarter, also impacted by the
labor union agreement
Third party services were also relevant in the
increased administrative expenses
In %
Net Operating Expenses
Slight increase in Operating Expenses
Efficiency Ratio
Closely tied to scale, the efficiency ratio
reflects:
stable loan portfolio throughout the year
Maintenance of high liquidity to ensure
business sustainability
the "upper middle" business unit
implementation and the structured finance
area strengthening
23.2 26.5 28.4
93.2100.3
4Q09 3Q10 4Q10 2009 2010
S&
P m
eth
od
R$ Million
15
Net Recurring Profit:
4Q10: R$ 5.9 million / 4Q09: R$ 4.2 million = +40.5%
2010: R$ 28.5 million / 2009: R$ 9.8 million = +190.8%
ROAE
• 4Q10: 5.6% / 4Q09: 4.1% = +150 bps
• 2010: 6.8% / 2009: 2.9% = +390 bps
Net Profit
Improved Recurring Profit
Net Interest Margin (NIM)
NIM(a) net interest margin adjusted by FX
effects on financial assets and by deducting
the balance of repos from the average
interest-bearing assets
GIM= Gross Interest Margin
4.47.5
12.8
29.0
5.9
4Q09 3Q10 4Q10 2009 2010
R$ Million
6,5%
7,9%
4,6%
1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10
NIM NIM(a) GIM
16
Credit Behavior in Brazil
Loan Portfolio
Funding and Liquidity
Result from Operations
Capital Market
17
Free Float
47.5%Controlling
Group
44.0%
Directors +
Officers
6.6%
Treasury
1.8%
Capital Distribution on Dec. 31, 2010
Class # of Shares Controlling
Group Management Treasury Free Float
Free
Float
Common 27,000,000 (17,116,173) (2,574,269) - 7,309,558 27.1%
Preferred 14,212,984 (1,026,653) (159,570) (746,797) 12,280,064 86.9%
TOTAL 41,212,984 (18,142,826) (2,733,839) (746,797)* 19,589,622 47.5%
Capital Distribution and Free Float
* 4th Share Buyback Program for
up to 1,301,536 preferred shares
valid until Aug. 09, 2011
18
BIM’s practice for shareholder remuneration has been
the quarterly anticipated payment of Interest on Equity
Shareholder Remuneration
2.8 2.3
6.0 6.8 6.32.7 2.3
6.66.9
6.3
2.4 5.1
6.56.6
6.3
2.2
6.1
6.46.7
6.2
10.2
15.9
24.5 25.1
27.0
2006 2007 2008 2009 2010
1Q 2Q 3Q 4Q
R$ M
M
Remuneration per share
R$ 0.34235 R$ 0.41635 R$ 0.59451 R$ 0.63704 R$ 0.60983
19
70
80
90
100
110
120
130
12/3
0/200
9
01/1
4/201
0
01/2
9/201
0
02/1
3/201
0
02/2
8/201
0
03/1
5/201
0
03/3
0/201
0
04/1
4/201
0
04/2
9/201
0
05/1
4/201
0
05/2
9/201
0
06/1
3/201
0
06/2
8/201
0
07/1
3/201
0
07/2
8/201
0
08/1
2/201
0
08/2
7/201
0
09/1
1/201
0
09/2
6/201
0
10/1
1/201
0
10/2
6/201
0
11/1
0/201
0
11/2
5/201
0
12/1
0/201
0
12/2
5/201
0
IBOVESPA IDVL4 IDVL4 adjusted to earnings
Stock Performance IDVL4 X IBOV - 2010
Share Performance 4Q10 2010
IDVL4 -0.62% -4.10%
IDVL4 (adjusted to earnings) +1.40% +3.52%
IBOV -0.18% +1.04%
IGC +2.32% +12.54%
ITAG +1.43% +11.72%
Source: Enfoque
20
Business Focus: Corporate lending
Credit Behaviour in Brazil Earmarked credit accelerated growth throughout the year, lowering speed in the last quarter
Government owned banks maintain 42% share on total credit in the Brazilian financial system
Central Bank data shows stability in corporate loans delinquency ratios at 3.6%
Loan Portfolio Growth resumption: 10% quarter on quarter and 14.3% in the year, reaching R$ 1.9 billion
82% middle market companies and 14% upper-middle, companies with annual sales above R$ 400
million, in line with the strategy of expanding the target market
Adequate provision coverage = 196% on Non Performing Loans above 90 days
Funding and Liquidity High liquidity maintained: Free Cash at 46% of total deposits and 172% of Shareholder’s Equity
Funding totaled R$ 2 billion, an increase of 6.7% in the quarter and 13% in 12 months
Operating Results Evolution on Financial Intermediation Results also helped by lower ALL expenses pressure
Accumulated 12-month net profit reaches R$ 29 MM against R$ 12.8 in 2009
Highlighting recurring profit: R$ 28.7 million in 2010 from R$ 7.7 million in 2009
In Short
21
Questions and Answers Please pose your questions by utilizing the Q&A
button at the right bottom end of the Webcast panel.
Please note that this is the English version of the presentation originally prepared in Portuguese. In case of any discrepancy between those versions,
the Portuguese version shall prevail. Banco Indusval Multistock complete financial statements are available at www.indusval.com.br/ir, under Financial
Information – Financial Statements and they are filed with the CVM – Brazilian Securities and Exchange Commission that disposes them to the market
at www.cvm.gov.br.
Any reference or statement regarding Banco Indusval Multistock - or its subsidiaries and affiliates - anticipated synergies, growth plans, projected
results and future strategies are just estimates. Although forward-looking statements reflect management’s good faith beliefs, they involve known and
unknown risks and uncertainties that may cause the Company’s actual results or outcomes to be materially different from those anticipated and
discussed herein. These risks and uncertainties include, but are not limited to, our ability to realize the amount of the projected synergies and in the
timetable projected, as well as economic, competitive, governmental and technological factors affecting Banco Indusval Multistock’s operations,
markets, products and prices, and other factors detailed in Banco Indusval Multistock’s filings with the CVM – Brazilian Securities and Exchange
Commission which, readers are urged to read carefully, in analyzing investment alternatives.
22
Investor Relations – Contact Information
Ziro Murata Jr.
IRO
Phone: (55 11) 3315-6961
E-mail: [email protected]
Maria Angela R. Valente
Head of IR
Phone: (55 11) 3315-6821
E-mail: [email protected]
Banco Indusval S/A
Rua Boa Vista, 356 – 7º andar
01014-000- São Paulo – SP
Brasil
IR Site:
www.indusval.com.br/ir