Download - Institutional presentation_1_q15
Profile and History
Pine
History
Business Strategy
Competitive Landscape
Focus Always on the Client
Corporate Credit
FICC
Summary
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FICC
Pine Investimentos
Highlights and Results
Corporate Governance
Corporate Governance
Committees
Social Investment and Responsibility
PineSpecialized in providing financial solutions for corporate clients…
Credit Portfolio by Annual Client Revenues
December 30th, 2014
Over R$2 billion37%
R$500 million to R$2 billion
R$250 million to R$500 million
12%
Up to R$250 million
15%
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Profile
Focused on establishing long-term relationships
Profound knowledge and product penetration
Business is structured along three primary business lines:
• Corporate Credit: credit and financing products
• FICC: instruments for hedging and riskmanagement
• Pine Investimentos: Capital Markets, FinancialAdvisory, Project & Structured Finance andResearch
R$2 billion36%
801 827 825
867
1.015
1.220
1.272 1.256 1.244
...with extensive knowledge of Brazil’s corporate credit cycle.
History
1939Pinheiro Family
foundsBanco Central do
Nordeste
1975Noberto Pinheiro becomes one of
End of 2007Focus on expanding the Corporate Banking franchise
Discontinuation of the payroll-deductible loan business
May, 2007Creation of Pine Investimentos products line and
opening of the Cayman branch
2005Noberto Pinheiro becomes Pine’s sole
shareholder
October, 2007Beginning of the FICC Business
October, 2011Subscription of Pine’s capital by DEG
August, 2012 Subscription of Pine’s capital by DEG, Proparco, Controlling Shareholder and Management
November, 2012Opening of the broker dealer in New York, Pine Securities USA LLC
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184 222 341 521 620 755 663 761 1.214
2.854 3.108
4.195
5.763
6.963
7.911
9.920 9.826 9.657
62
121 126 140 136 152 171 209
335
Dec-9
8
Dec-9
9
Dec-0
0
Dec-0
1
Dec-0
2
Dec-0
3
Dec-0
4
Dec-0
5
Dec-0
6
Dec-0
7
Dec-0
8
Dec-0
9
Dec-1
0
Dec-1
1
Dec-1
2
Dec-1
3
Dec-1
4
Mar
-15
Corporate Credit Portfolio (R$ Million)
Shareholders' Equity (R$ Million)
1997Noberto and Nelson Pinheiro sell their stake in BMC and
found Pine
becomes one of BMC’s controlling
shareholders
Devaluationof the real
Nasdaq Sept. 11 Brazilian Elections
(Lula)
SubprimeAsian Crisis
Russian Crisis
European Community
shareholder
March, 2007
IPO
May, 2015
18 years
Competitive LandscapePine serves a niche market of companies with few options for banks.
100% Corporate
Large Multi-Services banks
Market
Consolidation of the banking sector has decreasedthe supply of credit lines and financial instrumentsfor corporate
Foreign banks are in a deleveraging process
PINE
Full service Bank – Credit, Hedging, and Investment
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100% focused on providing complete service to companies, offering customized products
Corporate & SME
SME & Retail
Retail
Full service Bank – Credit, Hedging, and InvestmentBank products – with room for growth
~15 clients per officer
Competitive Advantages:
� Focus
� Fast response: Strong relationship withclients, with the credit committee meetingtwice a week and response times to clients ofno more than one week
� Specialized services
� Tailor-made solutions
� Product diversity
Foreign and Investment Banks
Focus Always on the ClientProducts tailored to meet the needs of each individual client.
Working Capit
CDIs
OverdraftAccounts
Fixed Income
Currencies
Commodities
Equities
CDBs
CDs
RDBs
LCAs
LCIs
DebenturesCRIs
CCBs
Eurobonds
PrivatePlacements
Financial Letters
TreasuryDistribution
Capital Markets
Financial Advisory
Local Currency
Foreign Currency
Pricing of Assets and Liabilities
LiquidityManagement
Trading
Local Currency
Working CapitalUnderwriting
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BankGuarantees
Exclusive Funds
Portfolio Management
Swap NDFsStructured Swaps
BNDES Onlending
Bank Guarantees
Compror
ACC/ACE
Export Finance
Finimp
Lettersof Credit
2,770 onlending
Accounts
Syndicated andStructured Loans
ClientsCorporate
Credit
FICC
PineInvestimentos
Capital Markets
Financial Advisory
Fixed Income Currencies
Commodities
Local Currency
Onlending
Foreign Currency
Trade FinanceParticipation
Funds
Options
Corporate & Structured
Finance
M&A
Project Finance
StructuredFinance
Private Credit Funds
Real Estate Funds
Rural Credits
AircraftFinancing
Investment Management
In addition to the
headquarters located in the
city of São Paulo, Pine has 10
branches throughout Brazil, in
the States of Ceará, Mato
Grosso, Minas Gerais, Paraná,
Pernambuco, Rio de Janeiro,
Rio Grande do Sul, and
São Paulo. The origination
network also counts with a
Cayman Branch and a broker
dealer in New York (USA).
Corporate Credit
Actions Credit Committee
Strong track record and solid credit origination and approval process.
Meets once a week – reviewing 20 proposals on average
Minimum quorum: 4 members - attendance of CEO orChairman is mandatory
Members:
Chairman of the Board
CEO
Chief Operating Officer
Chief Risk Officer
Personalized and agile service, working closely withclients and keeping a low client to account officer ratio:each officer handles ~15 economic groups
Geographic coverage of clients, providing the bank withlocal and extremely up-to-date credit intelligence andinformation
Established long term relationships with more than 600economic groups
Origination network is comprised of 10 branches dividedinto 14 origination platforms in Brazil’s major economiccenters
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Credit Approval: Electronic Process
Origination OfficersOrigination Officers
Credit origination Credit analysis, visit to clients, data updates, interaction with internal
research team
Credit AnalystsCredit AnalystsRegional Heads of
Origination and Credit Analysis
Regional Heads of Origination and Credit
Analysis
Presentation to the Credit Committee
CRO, Executive Directors and Analysts
of Credit
CRO, Executive Directors and Analysts
of Credit
Centralized and unanimous decision making process
CREDIT COMMITTEE CREDIT COMMITTEE
Participants:
FICC Executive Director
Credit Analysts Team
Other members of the Corporate Banking origination team
centers
Pine has approximentely 25 professionals in the creditanalysis area, assuring that analysis is fundamentallydriven and based on industry-specific intelligence
Efficient loan and collateral processes, documentation,and controls, which has resulted in a low NPL track record
Discussion on sizing, collateral, structure etc.
Commodities13%
Fixed Income7%
Currencies80%
March 31st, 2015 R$ million
FICCProven trackrecord: leadership largest bank in commodity hedging1
Client Notional Derivatives by Market Notional Value and MtM
11,268 14,382 8,376 7,703 7,482
482
354 288 221
349
(243)
(532)
(47)
(365)
(103)
Notional Amount
MtM
Stressed MtM
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13%
Scenario on March 31st,2015:
Duration: 149 days
Mark-to-Market: R$349 million
Stress Scenario (Dollar: +31% and Commodities Prices: -30%):
Stressed MtM : (R$103 million)
Market Segments Portfolio Profile
1Source: Report Cetip, March 2015
Fixed Income: Fixed, Floating, Inflation, Libor
Currencies: Dollar, Euro, Yen, Pound, Canadian Dollar,Australian Dollar
Commodities: Sugar, Soybean (Grain, Meal and Oil), Corn,Cotton, Metals, Energy
Mar-14 Jun-14 Sept-14 Dec-14 Mar-15
Long Term Loan
US$25,000,000
Debentures
R$50,000,000R$45,200,000
Debentures
December, 2014
BNDES Onlending
R$630,000,000
Coordinator
February, 2015March, 2015
Project Finance
R$30,000,000
Lead Coordinator
Structuring CRP
R$24,000,000
Lead Coordinator
Pine Investimentos
Selected Transactions
Capital Markets: Structuring and Distribution of Fixed
Income Transactions.
Financial Advisory: Project & Structured Finance, M&A,
and hybrid capital transactions.
Research: Macro, Commodities, and Corporate.
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August, 2014
Export Prepayment Finance
Structuring Agent
August, 2014
Financial Advisor
US$58,000,000 R$459,300,000
June, 2014
M&A
Advisor
September, 2014
Lead Coordinator
November, 2014
Lead Coordinator
July, 2014
Project Finance
R$391,459,000
Financial Advisor
2
3
4Q14 1Q15
R$ million
Fees
1Q15 Events and Highlights
1. Increase in the positive liquidity gap, with 12 months for credit versus 17 months for funding.
2. Liquid balance sheet, with a cash position of R$1.4 billion, equivalent to 48% of time deposits.
3. Active and constant liability management that led to a further reduction in the cost of funding.
4. Loan portfolio coverage ratio above 4% as a result of an important increase in provisions in the last twelve months.
5. 16% reduction of personnel and administrative expenses in the quarter, as a result of the diligence and anticipation of an adverse
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5. 16% reduction of personnel and administrative expenses in the quarter, as a result of the diligence and anticipation of an adverse
market in 2015.
6. 18th largest bank in derivative transactions and the 3rd largest in commodity hedging according to CETIP – OTC Clearing House.
9,826 9,657
Dec-14 Mar-15
Total Loan Portfolio1
-1.7%
1Q15 Financial Highlights
R$ million
The main performance indicators were within expectations in the period.
8,500 8,367
Dec-14 Mar-15
Total Funding
-1.6%
1,256 1,244
Dec-14 Mar-15
Shareholders’ Equity
-1.0%
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Dec-14 Mar-15
1 Includes Stand by LCs, Bank Guarantees, Credit Securities to be Received and Securities (bonds, CRIs, eurobonds and fund shares)
Dec-14 Mar-15
5 10
4Q14 1Q15
Net Income
+100.0%
Dec-14 Mar-15
4.1% 4.0%
4Q14 1Q15
NIM Evolution
-10 bps
1.7%
3.3%
4Q14 1Q15
ROAE
+160 bps
4.1% 4.0%
4Q14 1Q15
-10 bps
Net Interest Margin
NIM Evolution Impacts in Period
NIM in line with guidance.
Lower revenue contrinution from FICC and Treasury;
Mark to Market of securities; and
Increased spreads at origination.
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4Q14 1Q15
NIM Breakdown
R$ million
1Q15 4Q14 1Q14 QoQ YoY
Recurring Financ ial Margin
Income from financial intermediation 54 83 109 -34.9% -50.5%
Overhedge effect 34 10 (3) 240.0% -1233.3%
Liabilities hedge effect - 1 (4) -100.0% -100.0%
Recurring Income from financial intermediation 88 94 102 -6.4% -13.7%
Expenses and Efficiency Ratio
Expenses
Cost control, better than the guidance range.
23
27
23
26
22
18
39.8% 42.2% 39.1%
- 8 0 . 0 %
- 6 0 . 0 %
- 4 0 . 0 %
- 2 0 . 0 %
0 . 0 %
2 0 . 0 %
4 0 . 0 %
6 0 . 0 %
5
1 0
1 5
2 0
2 5
3 0
3 5
4 0
4 5
5 0
Personnel Expenses
Other administrative expenses
Recurring Efficiency Ratio (%)
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Efficiency Ratio
- 1 0 0 . 0 %0
1Q14 4Q14 1Q15
R$ million
1Q15 4Q14 1Q14 QoQ YoY
Operating expenses 1 45 52 53 -13.5% -15.1%
(-) Non-recurring expenses (1) (3) (4) -66.7% -75.0%
Recurring Operating Expenses (A) 43 49 49 -12.2% -12.2%
Recurring Revenues 2 (B) 110 116 123 -5.2% -10.6%
Recurring Efficiency Ratio (A/B) 39.1% 42.2% 39.8% -310 bps -70 bps
1 Other administrative expenses + tax expenses + personnel expenses2 Gross Income from financial intermediation - provision for loan losses + fee income + overhedge effect - hedge impact
3,073
2,909 2,905 2,941 2,896 2,969
3,191
842
1,059
965
903 989 1,116 924 826 909
Trade finance: 9.4%
9,657
8,405
8,994
9,5379,930 10,090 10,032
9,800 9,826
R$ million
Loan PortfolioThe portfolio ended the period at R$9.7 billion...
-4.3%
-1.7%
1
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4,236 4,284 4,509 5,050 5,093 4,904 4,731 4,730 4,440
826 844 990
1,068 1,103 1,071 1,248 1,302
1,118
2,501 2,807
3,073 3,191
Mar-13 Jun-13 Sept-13 Dec-13 Mar-14 Jun-14 Sept-14 Dec-14 Mar-15
Bank Guarantees: 33%
BNDES Onlending : 11.6%
Working Capital: 46%
1 Includes Stand by LC2 Includes debentures, CRIs, Hedge Fund Shares, Eurobonds, Credit Portfolio acquired from financial institutions with recourse and Individuals
2
33.0%
46.0%
43%42%
7%6%5%5%5%
8%8%8%7%8%
10%10%10%8%8%
12%10%12%12%8%
12%12%13%11%9%
13%14%12%15%20%
Sugar and
Ethanol
Real Estate
Energy
Agriculture
Engineering
Transportation
Continuous Loan Portfolio Management
Sectors Rebalance
...with improved sector diversification.
Sugar and Ethanol
13%
Real Estate
12%
Energy
12%
Chemicals
4%
Metallurgy
4%
Specialized
Services
3%
Vehicles and Parts
2%
Retail
2%
Meatpacking
2%
Food Industry
2%
Construction
Material
1%
Other
9%
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38%40%40%43%42%
Mar-15Dec-14Mar-14Mar-13Mar-12
Transportation
and Logistics
Others
The composition of the portfolio of the 20 largest clients changed by over 15% in the past twelve months;
The total portfolio share of the 20 largest clients remained below 30%, in line with market peers.
Agriculture
10%
Engineering
8%Transportation
and Logistics
7%
Telecom
5%
Foreign Trade
4%
4%
Working Capital
77%
Guarantees23%
Residential Lots40%
Residential36%
Warehouse14%
Mall7%
Commercial3%
SP75%
MG17%
PR6%
GO2%
AL0%
MS0%
Working Capital
50%
Guarantees34%
Onlending9%
Trade Finance
7%
Main SectorsSugar and Ethanol | Real Estate | Agriculture
Sugar and Ethanol Real Estate
Exposure by Product Exposure by State Exposure by Product Exposure by Segment
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Working Capital
73%
Trade Finance
14%Onlending
12%
Guarantees1%
Agriculture
Exposure by Product Exposure by State
MT32%
SP30%
PR10%
BA9%
ES5%
CE4%
MS2%
Others8%
Working Capital
Guarantees11%
Onlending3%
Main SectorsEnergy | Engineering
Energy Engineering
Exposure by Product Exposure by Product
Guarantees74%
Working Capital
18%
Onlending8%
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Transporta-tion34%
Concession31%
Industrial22%
Oil and Gas7%
Sanitation5%
Energy1%
Capital86%
Exposure by SegmentExposure by Segment
Wind Energy
59%
UTE13%
Distributors10%
Transmitting
8%
Equipment
Supplier
6%
SHPs UHEs3%
Trader1%
March 31st, 2015
Contracts Overdue: total amount of the contracts overdue for more than 90 days / Loan Portfolio
Loan Portfolio Quality94% of loan portfolio classified between AA-C ratings.
Loan Portfolio Quality – Res. 2,682 Non Performing Loans > 90 days (Total Contract)
1.2% 1.1% 0.7%0.1%
0.7%0.3% 0.3%
1.1%
2.1%
Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15
AA-A40.2%
B39.0%
C14.3%
D-E3.0%
F-H3.4%
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Contracts Overdue: total amount of the contracts overdue for more than 90 days / Loan Portfolioexcluding Bank Guarantees and Stand-by Letters of Credit.
1D-H Portfolio: D-H Portfolio / Loan Portfolio Res. 2,6822Coverage of Total Portfolio: Provisions / Loan Portfolio Res. 2,682
Credit Coverage Collaterals
6.2%
5.0%
6.4%
2.9% 2.9%
4.1%
Mar-14 Dec-14 Mar-15
D-H Portfolio Coverage of Total Portfolio
Products Pledge
40%
Receivables19%
Properties Pledge
38%
Investments3%
1 2
434 323
113 364
346 388
687 429
500
478
473 531 430
773 973
871
834 1,064
819 839 929
8,367
6,589
7,111
7,894
8,383
8,7978,559 8,638 8,500
Trade Finance: 11.1%
Private Placements: 9.2%
Multilateral Lines: 10%
International Capital Markets:
R$ million
FundingDiversified sources of funding...
58% 48%42% 44% 41%39% 41% 35% 48% Cash over Deposits
-4.9%
10.0%
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2,087 2,185 1,944 2,175 2,314 2,271 1,905 1,720
1,209
972 1,013 1,048
1,112 1,022 761
731 545
361
225 254 372
475 659 908
920 1,122
1,273
110 110 93
90 76 80
98 69
157
126 19 20
23 27 41
30 27
24
859 862 1,099
1,141 1,174 1,086
1,292 1,333
1,161
154 286 649
632 582 594 709
635
509
642 689
762
792 833
508 892 747
796 402
435
437
459 434
427 323
347
338 78 80
69
113 346 687
837
171 181
429 773
762
997 6,589
Mar-13 Jun-13 Sept-13 Dec-13 Mar-14 Jun-14 Sept-14 Dec-14 Mar-15
International Capital Markets: 4%
Financial Letter : 9.5%
Local Capital Markets: 6.1%
Onlending: 13.9%
Demand Deposits: 0.3%
Interbank Time Deposits: 1.9%
High Net Worth Individual Time Deposits: 15.2%
Corporate Time Deposits: 4.3%
Institutional Time Deposits: 14.5%
4.0%
Asset & Liability Management... keeping a positive gap between credit and funding.
Leverage Credit over Funding Ratio
82% 83%80% 80%
77%
Mar-14 Jun-14 Sept-14 Dec-14 Mar-15
7.9x 7.9x 7.7x 7.8x 7.8x
5.6x 5.6x 5.4x 5.4x 5.2x
-
1 . 0
2 . 0
3 . 0
4 . 0
5 . 0
6 . 0
7 . 0
8 . 0
9 . 0
1 0 . 0
Mar-14 Jun-14 Sept-14 Dec-14 Mar-15
Expanded loan Porfolio
Loan Portfolio excluding Bank Guarantees
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47% 47% 43% 41% 36%
53% 53% 57% 59% 64%
Mar-14 Jun-14 Sept-14 Dec-14 Mar-15
Total Deposits Others
Leverage: Expanded Loan Portfolio / Shareholders’ EquityExpanded Loan Portfolio excluding Bank Guarantees and Stand-by Letters of Credit /
Shareholders’ Equity
Credit over Funding ratio: Loan Portfolio excluding Bank Guarantees and Stand-by Letters ofCredit / Total Funding
ALM – Average Maturity Total Deposits over Total FundingR$ millionmonths
8,638 8,3678,797 8,559 8,500
16 16 16
16 17
14 14
13 12 12
Mar-14 Jun-14 Sept-14 Dec-14 Mar-15
Funding
Credit
Capital Adequacy Ratio (BIS), Basel III BIS ratio reached 13.0%.
15.0% 14.7% 13.7%
2.1% 2.3%2.2%
2.1% 1.5% 1.5% 1.4% 1.4%0.8%13.0%
17.1% 17.0%15.9%
14.1% 13.7% 13.7% 13.8% 13.9%
Tier II Tier I
Minimum Regulatory Capital (11%)
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R$ Million BIS (%)
Tier I 1,232 12.2%
Tier II 85 0.8%
Total 1,317 13.0%
15.0% 14.7% 13.7%12.0% 12.2% 12.2% 12.4% 12.4% 12.2%
Mar-13 Jun-13 Sept-13 Dec-13 Mar-14 Jun-14 Sept-14 Dec-14 Mar-15
Corporate GovernancePine is committed to best corporate governance practices…
Two Independent Members and Two External Members on the Board of Directors
Mailson Ferreira da Nóbrega: Brazil’s Finance Minister from 1988 to 1990
Gustavo Junqueira: Former Head of Pine Investimentos, Member of the Board of Directors atEZTEC, Financial Advisor at Arsenal Investimentos and CFO at Gradiente Eletrônica
Harumi Susana Ueta Waldeck: Former CFO of Pine, with over 17 years of experience at thecompany. She brings the day-to-day experience to the Board.
São Paulo Stock Exchange (BM&FBOVESPA) Level 2 Corporate Governance
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São Paulo Stock Exchange (BM&FBOVESPA) Level 2 Corporate Governance
Audit and Compensation Committee reporting directly to the Board of Directors
100% tag along rights for all shareholders, including non-voting shares
Arbitration procedures for fast settlement of litigation cases
Social Investment and ResponsibilityFocus on the short, medium and long term.
Partnerships
Responsible Credit
“Lists of Exceptions”: the Bank does not finance projects or thoseorganizations that damage the environment, are involved in illegallabor practices or produce, sell or use products, substances or activitiesconsidered prejudicial to society.
System of environmental monitoring, financed by the IADB andcoordinated by FGV, and internally-produced sustainability reports forcorporate loans
Protocolo Verde – “Green Protocol”, an agreementbetween FEBRABAN and the Ministry of the Environmentto support development that does not compromise futuregenerations.
Sustainability Annual Report
Sixth consecutive year disclosing theSustainability Report in the GRIstandard. The 2014 report, with its highlevel of clarity, transparency and qualitywas recognized with the second place inthe Abrasca Annual Report Award,considering its category of companies
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Social Investment Recognition
Most Green Bank
Recognized by the International Finance Corporation (IFC), privateagency programs of the World Bank as the most "green" bank as a resultof its transactions under the Global Trade Finance Program (GTFP) andits onlending to companies focused on renewable energy and ethanol
Efficiency Energy
Recognition by World Bank for support in the Energy Efficiency sector.
Exhibition and sponsorship of Brazilian artists, for instance Paulo von Poser and
Miguel Rio Branco, in addition to sponsoring and supporting films and
documentaries such as Quebrando o Tabu (Fernando Henrique Cardoso on the
drug war), O Brasil deu certo, e agora? (idealized by Mailson da Nóbrega), Além
da Estrada (Charly Braun) and others.
considering its category of companieswith net income to R$3 billion.
Noberto N. Pinheiro Junior
CEO
Raquel Varela BastosHead of Investor Relations
Luiz Maximo
Investor Relations Specialist
Ana LopesInvestor Relations Analyst
Investor Relations
28/28Investor Relations | 1Q15 |
This report may contain forward-looking statements concerning the business prospects, projections of operating and financial results and growth outlook of PINE. These are merely projections and as suchare based solely on management’s expectations regarding the future of the business. These statements depend substantially on market conditions, the performance of the sector and the Brazilian economy(political and economic changes, volatility in interest and exchange rates, technological changes, inflation, financial disintermediation, competitive pressures on products and prices and changes in taxlegislation) and therefore are subject to change without prior notice.
Gabriel NettoInvestor Relations Analyst
Fone: (55 11) 3372-5343
www.pine.com/[email protected]