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Presentation on Presentation on
3Q10 Results3Q10 Results
1
�� Credit Behavior in BrazilCredit Behavior in Brazil
� Loan Portfolio
� Funding and Liquidity
� Results from Operations
� Capital Market
2
733607
2005 2006 2007 2008 2009 Set/10
Nonearmarked Resources Earmarked Resources
936
1.2271.410
29%
71%
29%
68%
32%
71%
19,619.831.213.319.326.016.9In 12 months14.013.619.510.014.520.412.4In the year5.45.67.54.45.27.64.4In the quarter1.81.71.12.21.82.91.4In the month
TotalEarmarked Resources
Non earmarked Resources
TotalEarmarked Resource
Non earmarked Resource
Sep/10Total Credit
CorporatesIndividualsVariation %
1.612
66%
34%
Total Credit Volume and SegmentationTotal Credit Volume and Segmentation
Volume of Credit OperationsR$ billion
Source: Central Bank of Brazil – Credit Information System - SCR
Credit to individuals supported by payroll lending, car loans, but mainly by earmarked
resources for real state financing.
In Corporate Credit earmarked resources from BNDES still stand out, after 24 months,
in September, free credit grew above earmarked.
Public institutions still account for 42% of total loans in the financial system
3
3.5
6.0
4.7
0123456789
10
Dec Dec Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
2006 2007 2008 2009 2010
Corporates Individuals Total
Sou
rce:
BA
CE
N
%
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: Accelerated increase until September 2009, with slow decline from November 2009 to March 2010, when it stabilized around 3.6%, retreating to 3.5% in September/10.
Small retreat in Corporate Credit and steady decline for Individuals
Credit Default RatiosCredit Default Ratios
4
� Credit Behavior in Brazil
�� Loan PortfolioLoan Portfolio
� Funding and Liquidity
� Results from Operations
� Capital Market
5
Loan Portfolio of R$ 1.8 billion* Loan Portfolio of R$ 1.8 billion*
� Local currency loans maintain 80% share in total loan portfolio with a 1.4% growth in the third quarter
� Working Capital Loans and Discounts respond for 70% the loan portfolio
� Guarantees issued responded for 3.5% of the loan portfolio being:
� 3.3% in Real
� 0.2% in Foreign Currency
� Trade Finance portfolio comprises export (ACC/ ACE) and import (FINIMP) financing.
� The 3.6% drop observed in the figures reported in Real for the quarter is due to the BRL appreciation in the period.
� In foreign currency this portfolio grew by 7% in the quarter and 41% in 12 months:
• US$ 143.2 million in 3Q09• US$ 189.2 million in 2Q10
• US$ 201.6 million in 3Q10
Local Currency Loans Trade Finance
344.1357.1254.5
3Q09 2Q10 3Q10
+35.2%1,425.01,405.41,429.7
3Q09 2Q10 3Q10
-0.3%
* Including guarantees issued and L/Cs
R$ MillionR$ Million
Credit Assignment Guarantees issued and L/Cs
6
Middle Market90%
Retail and other4%
Upper Middle
6%
61 - 160 25%
11 - 60 32%
10 largest 18%
Other 25%
Industry55%
Commerce11%
Other Services
25%
Individuals8%
Financial Cos1%
Above 360 days 30%
181 to 360 15% 91 to 180
21%
Up to 90 days 35%
By Client Concentration
By Economic Activity By Segment
By Maturity
Credit Portfolio BreakdownCredit Portfolio Breakdown
7
19%
11%5%5%
5%4%
14%
3%
3%
3%
4%
3%
17%
1%
2%
3%
FOOD, BEVERAGE AND TOBACCO
AGRIBUSINESS
HEAVY CONSTRUCTION
CHEMICAL AND PHARMACEUTICAL
AUTOMOTIVE
TRANSPORTATION & LOGISTICS
TEXTILE, CLOTHING & LEATHER
EDUCATION
INDIVIDUALS
FINANCIAL SERVICES
OIL AND BIOFUEL
FINANCIAL INSTITUTIONS
METAL INDUSTRY
WHOLESALE AND RETAIL TRADE
PULP & PAPER
OTHER INDUSTRIES
Loan Portfolio breakdown by Industry Loan Portfolio breakdown by Industry
8
Loan Portfolio QualityLoan Portfolio Quality
Allowance for Loan LossesNPL(*) / Total Loan (%)
Asset Quality
Provisioning Coverage = 6.6% of Loan Portfolio, 44% of loans rated D-H and 179% of NPL 60 days
2.6
8.1
3.7
3Q09 2Q10 3Q10
Collacteral Structure
Aval PN23%
Real State8%
Vehicles7%
Receiv.46%
Monitored Pledge
8%Securities
3%
Pledge/ Lien5%
Risk Rating
D-H14.8%
A34.3%
B27.0%
C23.9%
107.8
133.0112.2
3Q09 2Q10 3Q10
11.1% Performing 3.7% Non-Performing
+ 60 days
(*) Total outstanding amount of contracts with any installment overdue above 60 days R$ Million
9
� Credit Behavior in Brazil
� Loan Portfolio
�� Funding and LiquidityFunding and Liquidity
� Results from Operations
� Capital Market
10
Time Deposits
39%
DPGE(*)28%
Interbank Deposits
4%
Foreign Borrowings
17%
BNDES Onlending
6%
LCA4%
Demand Deposits
2%
Funding mostly in Local CurrencyFunding mostly in Local Currency
� 83% of funding in Real and 17% in foreign currency
� Funding composed by:� Deposits – 77%
� Trade Finance lines– 15%
� IFC A Loan – 2%
� BNDES Onlending – 6%
Total Funding Funding Breakdown
1,902.71,880.6
1,732.0
3Q09 2Q10 3Q10
+9.9%
� CDs and DPGEs(*) account for 67% of total funding
� Average term to maturity for deposits = 526 days
� CDs: R$ 753.1 MM - 361 days
� DPGEs: R$ 543.1 MM - 853 days
� LCAs: R$ 69.6 MM – 167 days
� Interbank Deposits: R$ 67.7 MM - 74 days
R$ Million
(*) DPGE – Time Deposits bearing Special Insurance from FGC
11
536.3
238.5
339.6
645.3
729.9
372.0
227.9
552.7
90 days 180 days 360 days Above 360 days
Assets Liabilities
679.7695.5707.1
3Q09 2Q10 3Q10
Free Cash
Good Liquidity maintainedGood Liquidity maintained
Free Cash =
(Cash + Liquid Financial Assets + Securities + Derivatives)
(-)
(Open Market Funds + Derivatives)
� Management of liquidity, interest rate, currencies and tenor mismatch risks is our Treasury’s main task
� Free Cash:
� 46% of Total Deposits
� 157% of Shareholder’s Equity
Assets and Liabilities ManagementR$ Million
R$ Million
12
� Credit Behavior in Brazil
� Loan Portfolio
� Funding and Liquidity
�� Results from OperationsResults from Operations
� Capital Market
13
� Gross Profit from Financial Intermediation went up by 18% in the quarter and corresponds to 32% of Income from Financial Intermediation in 3Q10 (30% in 2Q10 and 7% in 3Q09).
� Reduction of 10% in Loan Loss Provision Expenses, also contributed to a better result.
� Allowance for Loan Losses maintained at 6.6% of the loan portfolio.
� 12% evolution in the quarter and 31% in 12 months in Income from Financial Intermediation which were composed by
� revenues from Loans 58%
� revenues from Securities 36%
� revenues from Foreign Exchange Operations 5%
� The smaller share of revenues from foreign exchange due to the appreciation of Real, also reflected in the decrease of foreign loan expenses
Evolution in Financial Intermediation ResultsEvolution in Financial Intermediation Results
348.2314.3
123.4110.494.3
3Q09 2Q10 3Q10 9M09 9M10
+31.0%
+10.8%
107.4
66.9
39.133.1
6.4
3Q09 2Q10 3Q10 9M09 9M10
+510.6%
+60.4%
Income from Financial IntermediationR$ Million R$ Million
Gross Profit from Financial intermediation
14
59.3
49.1
61.255.2
60.7
3Q09 2Q10 3Q10 9M09 9M10
� Increase derived from:
� R$ 1.4 MM net FX variation expenses on offshore assets and liabilities which are accounted under “other operating expenses and income” against net revenues of R$ 1.2 MM in 2Q10.
� Increased tax charges on deals carried abroad: Financial Operations Tax (IOF) and COFINS
Slight increase in Operating Expenses Slight increase in Operating Expenses
� The Efficiency ratio reflects this increase in Net Operating Expenses related to FX effects, taxes and personnel.
71.970.0
26.520.922.5
3Q09 2Q10 3Q10 9M09 9M10
+17.8%
+2.7%
S&
P M
odel
+0.5 p.p.+10.2 p.p.
Net Operating Expenses Efficiency RatioIn %R$ Million
15
� Net Profit in the quarter was slightly lower than 2Q10 for the increased net operating expenses.
� 9-month accumulated net profit shows good progress, specially in the recurring results.
7.0%
8.5%
5.4%
1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10
NIM NIM(a) GIM
� Gross Interest Margin benefited from the reduced need for provisioning
� Stable NIM and Adjusted NIM (NIMa)
� NIM(a) is the NIM adjusted by bringing the exchange rate variation effects accounted as “other operating expenses and income” to the financial intermediation results and by reducing the average balance of repos from the average interest-bearing assets
-7.8
23.1
8.38.3 7.5
3Q09 2Q10 3Q10 9M09 9M10
+196.3%
+177.4%
Recovering profitabilityRecovering profitability
R$ Million
Net Profit Net Interest Margin (NIM)
GIM= Gross Interest Margin
16
� Credit Behavior in Brazil
� Loan Portfolio
� Funding and Liquidity
� Result from Operations
�� Capital MarketCapital Market
17
Free Float47.7%
Controlling Group44.0%
Board + Officers
6.6%Treasury
1.6%
Capital Distribution on Oct. 31, 2010
(674,998)*
(674,998)
-
Treasury
19,661,221
12,351,763
7,309,458
Free Float
47.7%(2,733,939)(18,142,826)41,212,984TOTAL
86.9%(159,570)(1,026,653)14,212,984Preferred
27.1%(2,574,369)(17,116,173)27,000,000Common
ManagementFree Float
Controlling Group
# of SharesClass
Capital Distribution and Free FloatCapital Distribution and Free Float
* 4th Share Buyback Program for up to 1,301,536 preferred shares valid until Aug. 09, 2011
18
6.36.86.0
2.32.82.9
6.36.9
6.6
2.32.72.9
6.3
6.66.5
5.12.4
3.0
6.7
6.4
6.1
2.22.6
2005 2006 2007 2008 2009 2010
1Q 2Q 3Q 4Q
11.610.1
15.8
25.5
R$
MM
27.0
18.9
R$ 0.45544R$ 0.63704R$ 0.59451R$ 0.41635R$ 0.34235R$ 0.3657
Remuneration per share
Shareholder RemunerationShareholder Remuneration
BIM’s practice for shareholder remuneration has been the quarterly anticipated payment of Interest on Equity
19
15.18%
15.16%
4.45%
1.92%
-3.74%
YTDNov.10, 2010
20.23%
18.67%
13.94%
6.67%
4.58%
3Q10
-3.50%IDVL4
10.15%
9.99%
1.23%
2.17%
9M10
ITAG
IGC
IBOV
IDVL4 (adjusted to earnings)
Performance
Source: Enfoque
Stock PerformanceStock PerformanceIDVL4 X IBOV IDVL4 X IBOV -- 20102010
80
85
90
95
100
105
110
115
30/12
/2009
08/01
/2010
17/01
/2010
26/01
/2010
04/02
/2010
13/02
/2010
22/02
/2010
03/03
/2010
12/03
/2010
21/03
/2010
30/03
/2010
08/04
/2010
17/04
/2010
26/04
/2010
05/05
/2010
14/05
/2010
23/05
/2010
01/06
/2010
10/06
/2010
19/06
/2010
28/06
/2010
07/07
/2010
16/07
/2010
25/07
/2010
03/08
/2010
12/08
/2010
21/08
/2010
30/08
/2010
08/09
/2010
17/09
/2010
26/09
/2010
05/10
/2010
14/10
/2010
23/10
/2010
01/11
/2010
10/11
/2010
IBOVESPA IDVL4 IDVL4 Earnings Adjusted
20
� Business Focus: Corporate lending
� Credit Behavior in Brazil�Private Financial Institutions start reacting. After 24 months, corporate free credit growth exceeds earmarked credit’s in September.
�Government Financial Institutions respond for 42% of total credit in the Brazilian financial system.
� Loan Portfolio�90% middle market companies and 6% companies with annual sales above R$ 400 million�Our loan portfolio growth in Real is limited by BRL appreciation on the Trade Finance portfolio and the implementation of the business expansion strategy to larger companies.
�Allowance for Loan Loss provide adequate coverage to NPL.
� Funding and Liquidity�Funding predominantly in local currency deposits (77%) �Good volume long term funding available. �High liquidity maintained to provide stability
� Operating Results�Evolution on Financial Intermediation Results �Taxes and FX expenses increase Other Operating Expenses�Accumulated 9-month net profit reaches R$ 23 MM against R$ 8.3 in 9M09.
In SummaryIn Summary
21
Questions and AnswersQuestions and AnswersPlease pose your questions by utilizing the Q&A Please pose your questions by utilizing the Q&A
button at the right bottom end of the Webcast panel.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 alternatiives.
22
Investor Relations Investor Relations –– Contact InformationContact Information
Ziro Murata Jr.IROPhone: (55 11) 3315-6961E-mail: [email protected]
Maria Angela R. ValenteHead of IR Phone: (55 11) 3315-6821E-mail: [email protected]
Banco Indusval S/ARua Boa Vista, 356 – 7º andar01014-000- São Paulo – SPBrasil
IR Site: www.indusval.com.br/ir