Apimec Presentation 2010
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The document summarizes a public meeting held by Banco Indusval Multistock on August 19, 2010. Banco Indusval Multistock is a mid-sized Brazilian bank with over 40 years of experience in the financial market, focusing on lending to mid-market companies. The bank has a loan portfolio of R$1.8 billion, total assets of R$3 billion, and equity of R$430 million. The meeting covered the bank's loan portfolio performance, funding and liquidity, results, brokerage business, capital markets activities, and sustainability efforts. Key topics included the bank's growth strategy, credit trends in Brazil, quality of the loan portfolio, and sources of funding
Apimec Presentation 2010
- 1. Public Meeting 2010 São Paulo, August 19, 2010 0
- 2. Disclaimer This presentation may contain references and statements representing future expectations, plans of growth and future strategies of BIM. These references and statements are based on the Bank’s assumptions and analysis and reflect the management’s beliefs, according to their experience, to the economic environment and to predictable market conditions. As there may be various factors out of the Bank’s control, there may be significant differences between the real results and the expectations and declarations herewith eventually anticipated. Those risks and uncertainties include, but are not limited to, our ability to perceive the dimension of the Brazilian and global economic aspect, banking development, financial market conditions, competitive, government and technological aspects that may influence both the operations of BIM, as the market and its products. Therefore, we recommend the reading of the documents and financial statements available at the CVM website (www.cvm.gov.br) and at our Investor Relations page in the internet (www.indusval.com.br/ir) and the making of your own appraisal. 1
- 3. Banco Indusval Multistock Credit in Brazil and the Middle Market Performance Loan Portfolio Funding and Liquidity Results Indusval Multistock Corretora de Valores (brokerage) Capital Market Sustainability 2
- 4. Who is Banco Indusval Multistock? Mid-sized Bank 42 year experience in the Brazilian financial Market Focused on 694 companies Middle Market in the loan lending portfolio 11 branches 350 employees Loan Portfolio Total Assets Equity Basel Ratio R$ 1.8 billion R$ 3.0 billlion R$ 430 million 20.3% Date: June 30, 2010 3
- 5. Our Pathway Indusval Multistock Corretora de Valores acquires Execution Broker Seal from BM&FBOVESPA 2010 and improves its positioning in the BM&F market global Ranking Strategic partnership established to develop the Brokerage Firm business 2009 Evolution BIM was ranked 4th among the “Most Sustainable Midsize Banks in Latin America’’ * Start of BNDES onlending disbursements 2008 First IFC A/B Loan transaction of circa US$ 56 MM in Oct/08 Recognition Award for Best Utilization of IFC GTFP BIM becomes a publicly held company and celebrates 40 years of operations 2007 Second expansion phase: opening of 6 branches by the end of year Growth 2006 Beginning geographic expansion – Opening of 4 branches 2004 Consumer finance company sold - Capital infusion of R$60 million doubles the Bank’s shareholders’ equity 2003 Indusval merges with Multistock and starts to operate as BIM – Banco Indusval Multistock 2000 Partnership with Banco Multistock in a Consumer Finance enterprise 1993 Origin Middle-market credit operations started 1991 Indusval becomes a bank 1971 The partners of Ciampolini & Ribeiro acquire Indusval Corretora 1967 Foundation of Indusval Corretora – a brokerage House * Management & Excellence Consulting 4
- 6. About distribution of our capital Cancellation of treasury shares approved on August 10,2010 # Shares on # Treasury Shares #Shares on Type June 30, 2010 cancelled Aug. 10, 2010 Common 27,000,000 -0- 27,000,000 Preferred 15,475,101 (1,262,117) 14,212,984 TOTAL 42,475,101 (1,262,117) 41,212,984 #Shares on Controlling # Shares Free Type Management Aug. 10, 2010 Group Free Float Float Common 27,000,000 (17,116,173) (2,574,369) 7,309,458 27.07% Preferred 14,212,984 (1,038,047) (159,570) 13,015,367 91.52% TOTAL 41,212,984 (18,154,220) (2,733,939) 20,324,825 49.32% 5
- 7. Who are our shareholders? Shareholders’ Agreement Free Float = 49% Ciampolini & Foreign Institutional Controlling Management Individuals (10) Ribeiro families Investors Investors Group (4) (608) (12) (10) (86) 44% 6% 20% 11% 15% 4% 63% 10% 27% - - - 7% 1% 5% 31% 44% 12% Manuel Felix Cintra Neto Luiz Masagão Ribeiro 51% Carlos Ciampolini Antonio G. da Rocha Total ON PN 6
- 8. Shareholder Remuneration 27.0 We have been remunerating 25.5 Shareholders by quarterly anticipating the payment 6.7 of Interest on Equity 6.4 15.8 6.6 6.5 12.6 11.6 6.1 10.1 6.9 6.6 6.3 5.1 R$ million 2.3 6.0 6.8 6.3 2.3 2.005 2.006 2.007 2.008 2.009 2.010 Pay-out per share R$ 0.3657 R$ 0.3249 R$ 0.3688 R$ 0.5994 R$ 0.6423 R$ 0.3022 1Q 2Q 3Q 4Q 7
- 9. About our Corporate Governance Structure • Listing on Bovespa Level 1 of Installed on April 15, 2010 General Meeting Corporate Governance 3 effective members specialized in accounting & auditing of Shareholders • 100% Tag along Fiscal Board • Arbitration Panel Adherent 9 members Board of Directors Compensation & Benefits • 22% independent Committee • 22% external Internal Auditing Executive Board President Executive Board is supported 9 members by 5 committees: Traesury, Credit, Compliance & Long lasting experience in the Internal Audit, IT & Information financial market Superintendent Safety and Legal Trade Finance Treasury Executive IR & Treasury Commercials Credit & Structured Administrative 8
- 10. Banco Indusval Multistock Credit in Brazil and the Middle Market Performance Loan Portfolio Funding and Liquidity Results Indusval Multistock Corretora de Valores (brokerage) Capital Market Sustainability 9
- 11. Credit Volume in the Brazilian Financial System Individuals credit growth still supported pay payroll lending and housing loans. Growth in Corporate credit is mainly supported by earmarked resources from BNDES, the Brazilian Social and Economic Development Bank. Government owned banks respond for 42% of 1,529 total loans in the system 1,410 1,227 276 R$ billion 607 733 2005 2006 2007 2008 2009 Jun/10 Free Resources Earmarked Resources Source: Banco Central do Brasil – Credit Information System - SCR 10
- 12. Segmented development of credit volume in the system 600 50 0 400 300 200 10 0 R$ billion 0 D ec M ar Jun Sep t D ec M ar Jun Sep t D ec M ar Jun* 2007 2008 2009 2 0 10 Free Resources Corporates Earmarked Resources Individuals Source: Banco Central do Brasil – Credit Information System - SCR 11
- 13. Corporate Credit 806 825 788 801 748 696 699 705 639 582 46% 540 508 45% 460 40% 409 427 37% 38% 38% 43% 44% 17% 17% 16% 19% R$ billion Mar Jun Sept Dec Mar Jun Sept Dec Mar Jun Sept Dec Mar Apr* May* 2007 2008 2009 2010 Amount per Credit Agreement Up to R$100 tsd From R$100 tsd to R$10 million Over R$10 million Relation between amount of credit agreement and size of borrower Up to R$ 100 thousand = Small Enterprises from R$ 100 tsd to R$ 10 million = Mid-sized Enterprises above R$ 10 million = Large Corporates Source: Banco Central do Brasil – Credit Information System - SCR 12
- 14. Default ratios in the Brazilian financial system 10 9 8 7 6.6 6 % 5 5.0 4 3.6 3 2 1 Corporates Individuals Total 0 n Fb n n Fb n n Fb n Dc Dc My Nv Dc My Nv Dc My l l ct ct Mr Mr Mr Ju Ag Ju Ag et et Ar Ar Ar a Sp a Sp a e e Ja e p a Ju o e Ja e p a Ju o e Ja e p a Ju u u O O 2006 2007 2008 2009 2010 Individual Credit Default: - Quick reduction from June 2009 Corporate Default: - Accelerated increase from September 2009 - Slow decline from November 2009 to March 2010 - Stable at 3.6% from March 2010 Source: Banco Central do Brasil – Credit Information System - SCR 13
- 15. Banco Indusval Multistock Credit in Brazil and the Middle Market Performance Loan Portfolio Funding and Liquidity Results Indusval Multistock Corretora de Valores (brokerage) Capital Market Sustainability 14
- 16. Total Loan Portfolio 2,080 . p.a 1,794 1,794 0% 1,736 1,728 1,719 1,763 G R r 10 1,684 1,699 CA ter o ar 1,519 r qu pe 1,329 9% +1 1,059 960 a. % p. or 31 arter 717 7% p er qu CAGR: + R$ million 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 Local Currency Loans Trade Finance Letters of Guarantee and L/Cs issued 15
- 17. Local Currency Loans and Financing CAGR -1.0% per quarter -3.7% in the year 1,460 1,430 1,400 1,405 1,386 R$ million 2Q09 3Q09 4Q09 1Q10 2Q10 Disbursed Credits Assignments Guarantees issued 16
- 18. Trade Finance arter 7.5% per qu CAGR + year in the +33.5% 333 357 298 267 254 R$ million 2Q09 3Q09 4Q09 1Q10 2Q10 Disbursed Loans Import L/Cs issued 17
- 19. Credit Portfolio Breakdown By Segment By Economic Activity Individual s Financial 8% Interm. Middle Retail Other Market 1% Services Manufact 95% 23% uring Other 57% 4% Trading 11% 18
- 20. Credit Portfolio Breakdown By Product By Collateral BNDES Vehicles Onlending 2% Aval PN Trade 4% Real State 21% Finance 20% 10% Pledge/ Lien Guarantees 6% Issued Monitored 4% Pledge of Other Goods 4% 10% Loans & Discounts Securities & Deposits Receivable 68% s 4% 47% 19
- 21. Credit Portfolio Breakdown By Maturity By Client Concentration +360 10 days Other largest 28% Up to 90 19% 25% days 38% 11 - 60 181 to 32% 61 - 160 360 24% 15% 91 to 180 19% 20
- 22. Quality of Credit Portfolio Default (+60 days) Risk Rating 8.1% 6.9% 5.9% D-H 3.5% 2.6% 12% A 33% 2Q09 3Q09 4Q09 1Q10 2Q10 Allowance for Loan Losses C 27% 133.0 133.4 B 118.2 110.7 107.8 28% R$ million 2Q09 3Q09 4Q09 1Q10 2Q10 21
- 23. Banco Indusval Multistock Credit in Brazil and the Middle Market Performance Loan Portfolio Funding and Liquidity Results Indusval Multistock Corretora de Valores (brokerage) Capital Market Sustainability 22
- 24. Total Funding . 1,881 1,881 p.a 1,789 1,772 1,793 % 1,732 R r 84 G o CA rter 1,600 1,556 a 1,488 r qu pe % +17 1,233 1,040 % p. a. 868 or 35 836 arter 715 8% p er qu CAGR: + R$ million 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 in Local Currency (Real) in Foreign Currency 23
- 25. Funding Development and breakdown arter per qu +1.5% C AGR year in the +6.1% 1,881 1,881 1,772 1,732 1,793 R$ million 2Q09 3Q09 4Q09 1Q10 2Q10 Demand Deposits Interbank Dep. Time Deposits DPGE LCA & other Onlending funds Foreign Loans 24
- 26. Free Cash 735 707 708 696 696 R$ million 2Q09 3Q09 4Q09 1Q10 2Q10 Free Cash = (Cash + S.T. Liquid Assets + Securities + Derivative Assets) (-) (Open Market + Derivative Liabilities) 25
- 27. Asset & Liability Management 720 586 559 533 383 307 293 286 R$ million 90 days 180 days 360 days above 360 days Assets Liabilities 26
- 28. Banco Indusval Multistock Credit in Brazil and the Middle Market Performance Loan Portfolio Funding and Liquidity Results Indusval Multistock Corretora de Valores (brokerage) Capital Market Sustainability 27
- 29. Income from Financial Intermediation 2nd quarter 2010 FX Op 17% Derivativ +2.1% es 6% 220 225 Loans +7.8% Securitie 60% s 17% 102 114 110 94 93 R$ million 1st half 2010 FX Op. 21% 2Q09 3Q09 4Q09 1Q10 2Q10 1H09 1H10 Derivati ves 4% Loans 56% Securiti es 19% 28
- 30. Financial Intermediation Expenses 2º Trimestre 2010 Allowance for Loan Losses 16% -1.9% Borrowings, 159 156 Assignment +10.1% s& Open Market Funds Onlending Funds 60% 88 79 24% 70 77 66 R$ million 1º Semestre 2010 Allowance for Loan Losses 2Q09 3Q09 4Q09 1Q10 2Q10 1H09 1H10 15% Open Market Borrowings, Funds Assignment 55% s& Onlending Funds 30% 29
- 31. Gross Result and Financial Margin Quarter NIM GIM 6.8% % 2.8 4.9% +1 68.3 60.5 +2.9% 32.1 35.2 33.1 2Q09 3Q09 4Q09 1Q10 2Q10 27.4 R$ million Semester 6.4 6.9% 2Q09 3Q09 4Q09 1Q10 2Q10 1H09 1H10 5.1% NIM (Net Interest Margin) = Net of Loan Loss Allowance GIM (Gross Interest Margin) = including Loan Loss Allowance 1S09 2S09 1S10 30
- 32. Other Operating Expenses and Efficiency Net Operating Expenses Efficiency Ratio -4.4% -14.7% 47.5 45.4 61% 63% 61% 55% 58% 46% 45% 24.5 23.2 24.4 22.5 20.9 R$ million 2Q09 3Q09 4Q09 1Q10 2Q10 1H09 1H10 2Q09 3Q09 4Q09 1Q10 2Q10 1H09 1H10 31
- 33. Profitability Net Profit Net Recurring Result -3.1% 5% +34. 16.1 15.6 % +2.5 +22. 1% 8.1 7.3 8.3 15.6 4.4 11.6 6.8 7.3 8.3 R$ million R$ million 2.4 2Q09 3Q09 4Q09 1Q10 2Q10 1H09 1H10 2Q09 3Q09 4Q09 1Q10 2Q10 1H09 1H10 -7.8 -7.8 As reported in the respective periods, 2009 net profit include non-recurring income net of taxes as follows: 1Q09 – R$ 3.2 MM – sale of BM&FBovespa shares 2Q09 – R$ 1.2 MM – sale of CETIP shares 4Q09 – R$ 2.0 MM – effect of the Bank’s adhesion to the government’s tax amnesty program (REFIS) for the monetary updating of the pledged deposits 32
- 34. Banco Indusval Multistock Credit in Brazil and the Middle Market Performance Loan Portfolio Funding and Liquidity Results Indusval Multistock Corretora de Valores (brokerage) Capital Market Sustainability 33
- 35. Investment plan maintained Challenging market in 2Q10 The brokerage firm modernization process keeps its pace with investments in technology and people to develop new products and markets within its strategic targets: To broaden the institutional clients and qualified individual investors base To expand to the retail segment To become an institutional clients’ liquidity center Repositioning in the BM&F Ranking 2Q09: 53th position 1Q10: 17th position 2Q10: 33th position 34
- 36. Banco Indusval Multistock Credit in Brazil and the Middle Market Performance Loan Portfolio Funding and Liquidity Results Indusval Multistock Corretora de Valores (brokerage) Capital Market Sustainability 35
- 37. 30 /1 2/ 09 2 0 0 80 90 100 110 120 130 /0 9 1/ 19 20 / 0 10 1/ 29 2 0 1 /0 0 1/ 08 2 0 1 /0 0 2/ 18 2 0 1 /0 0 2/ 28 2 0 1 0 IBOVESPA /0 2/ 10 20 / 0 10 3/ 20 2 0 1 0 IDVL4 X IBOV - 2010 /0 3/ 30 2 0 1 /0 0 3/ 09 2 0 1 /0 0 4/ 20 IDVL4 19 / 0 10 4/ 29 2 0 1 /0 0 4/ 09 20 / 0 10 5/ 19 2 0 1 /0 0 5/ 29 2 0 1 /0 0 5/ 08 2 0 1 /0 0 6/ 18 20 / 0 10 6/ 28 2 0 1 /0 0 6/ 08 2 0 1 /0 0 7/ IDVL4 Earnings Adjusted 18 2 0 1 /0 0 7/ 28 20 / 0 10 7/ 07 2 0 1 /0 0 8/ 20 10 36
- 38. Banco Indusval Multistock Credit in Brazil and the Middle Market Performance Loan Portfolio Funding and Liquidity Results Indusval Multistock Corretora de Valores (brokerage) Capital market Sustainability 37
- 39. Commitment Continuous improvement in key sustainability aspects: Business Employees Communities Environment We believe to be in the beginning of a right track: Ranking Management & Excellence - 2009 – 4th Most Sustainable Mid-sized Bank in Latin America – 2nd Most Sustainable Mid-sized Bank in Brazil 38
- 40. Business Sustainability Ethics Transparency Corporate Governance Sustainable business development Social & Environmental Responsibility Policy: aiming at encouraging our employees, suppliers, business partners, clients to adopt a responsible attitude towards – Social development, – Citizenship recovery, – Respect for environment 39
- 41. Social & Environmental Responsibility Policy and Lending Clients Lending prohibited to enterprises that: Expectation: • Utilize infantile or To contribute for the slavery labor awareness of people and • Operate in activities Expanding the Social enterprises about the directly or indirectly Environmental action to importance of the rational related to gambling & Corporate customers utilization of natural prostitution resources and of the respect towards the social • Produce or trade environment and substances that may citizenship threaten the health and safety of people, plants and animals Social & Environmental Policy 40
- 42. Sustainability and our Internal Stakeholders Ethics Code Fair Benefits to support Training and Compensation Health, Safety and Qualification Policy Quality of Living Professional Social Inclusion Job opportunities Intern and Trainee Training for people Initiatives for young people Programs with disabilities Social & Knowledge Leadership Environmental Dissemination Development Awareness 41
- 43. Sustainability and the Community Education Culture Sport Indusval Multistock Institute Community Environment Development Entrepreneurship 42
- 44. Investor Relations – Contact Information Ziro Murata Jr. Banco Indusval S/A IRO Rua Boa Vista, 356 – 7º andar 01014-000- São Paulo – SP Phone: (55 11) 3315-6961 Brazil E-mail: ziro@indusval.com.br Maria Angela R. Valente Head of IR IR Site: Phone: (55 11) 3315-6821 www.indusval.com.br/ir E-mail: mvalente@indusval.com.br 43