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History and ProfilePINE at a Glance
Summary
HistoryOrganizational Structure
Business StrategyBrazilian Competitive LandscapeBrazilian Competitive LandscapeDiversity of ProductsCorporate CreditSales DeskDistributionPINE InvestimentosCurrent Scenario and Future Prospects
Highlights and Results
IFRS
Corporate Governance and SharesCorporate GovernanceCorporate GovernanceMain CommitteesShareholders’ StructureShareholders ProfileDividends
Other HighlightsDEG and PINE Partnership 2010 EventsSocial Responsibility
2/44Investor Relations | 4Q10 |
Social Responsibility
Appendix
PINE at a GlancePINE specializes in providing corporate banking and risk management services for mid and large companies
Credit Portfolio by Clients’ Annual Revenuescompanies
PINE is an agile bank, focused on establishing long-termrelationships with companies in the Upper Middle andCorporate segments
Up to R$150 MM12%
December 31, 2010
Corporate segments
PINE thoroughly understands the needs and strategies ofits clients, offering a broad range of financialinstruments and risk management tools for local andforeign currency
Over R$1 BI53%
R$150 MM to R$500 MM
20%
12%
foreign currency
Strong relationships and penetration with clients: morethan 80% of our clients are served by more than one ofour financial products
R$500 MM to R$1 BI15%
20%
Business is structured along four primary business lines:• Corporate Credit: credit and financing products• Sales Desk: Instruments for hedging and risk
management
15%
Solid Credit Ratings
management• PINE Investimentos: vehicle for Investment
Banking products and Asset Management• Distribution: investment solutions for foreign and
local investorsBr A- Brazil national scale
A1.br Brazil national scale
Ba2 Long term foreign and local-currency deposit
Strategy based on:• Product diversity• Qualified human capital• Efficient risk management
BB- Long term foreign and local-currency deposit
A(bra) Brazil national scale
BB Long term foreign and local
4/44Investor Relations | 4Q10 |
• Efficient risk management• Agility
BB- Long term foreign and local-currency deposit
HistoryFounded in 1997 PINE has shown a track record of continued development
1997 20051939 1975 20071997Foundation of Banco
PINE
2005Noberto Pinheiro
becomes Banco PINE’s sole shareholder
1939Foundation of
Banco Central do Nordeste by the Pinheiro Family
1975Noberto Pinheiro becomes one of
BMC’s controlling shareholders
….Consolidation of PINE’s corporate banking strategy
2007IPO
1939 – Pinheiro Family founds its first bank in Brazil – Banco Central do Nordeste
1975 - Noberto Pinheiro becomes one of the controlling shareholders of Banco BMC
1997 - Noberto and Nelson Pinheiro sell their stake at BMC and found Banco PINE
2005 - Noberto Pinheiro becomes Banco PINE’s sole shareholder
2007 – IPO
5/44Investor Relations | 4Q10 |
Organizational StructureNon-bureaucratic structure and flat hierarchy, streamlining the decision making process
Board of Directors
Internal AuditorsTikara Yoneya
Internal AuditorsTikara Yoneya
External AuditorsPwC
External AuditorsPwC
Noberto Pinheiro Chairman
Noberto N. Pinheiro Jr.Vice-Chairman
Maurizio MauroIndependent
Member
Fernando AlbinoExternal Member
Mailson da NóbregaIndependent
Member
Fiscal Council
O ti l Ri kO ti l Ri k
Tikara YoneyaTikara Yoneya PwCPwC
Sidney VenezianiSérgio MachadoAlcindo Itikawa
Sidney VenezianiSérgio MachadoAlcindo Itikawa
Fiscal Council
CEONoberto N. Pinheiro Jr.
CEONoberto N. Pinheiro Jr.
Operational Risk& Compliance
Operational Risk& Compliance
PINE InvestimentosGustavo Junqueira
PINE InvestimentosGustavo Junqueira
Planning and ControlSusana Waldeck
Planning and ControlSusana Waldeck
Sales & TradingNorberto Zaiet Jr.Sales & Trading
Norberto Zaiet Jr.Origination
Clive BotelhoOrigination
Clive BotelhoCredit Risk & Analysis
Gabriela ChisteCredit Risk & Analysis
Gabriela ChisteOperations
Ulisses AlcantarillaOperations
Ulisses Alcantarillaqq
Corporate• 14 origination
platforms• São Paulo• Campinas• Ribeirão Preto
Corporate Credit• Analysis and granting
of credit• Credit risk monitoring
and analysis by sector
Market and liquidity RisksHuman ResourcesAccountingControlling
Investment Banking• Capital Markets• Corporate Finance• Distressed and
Special Situations
Investment
Corporate Processing and FormalizationLegal
TradingRisk Management• Fixed Income• Currencies• Commodities
Local Distribution• São José do Rio Preto• Rio de Janeiro• Curitiba• Porto Alegre• Belo Horizonte• Recife• Fortaleza
ManagementAsset Management
Local DistributionInternational DistributionMacro and Commodities ResearchProductsInvestor Relations
6/44Investor Relations | 4Q10 |
Fortaleza
Brazilian Competitive LandscapeFinancial sector consolidation reduced options to our target segment
Focus on the upper middle and low corporatesegments
Large Multiple banks
Large Multiple banks
segments
Consolidation in the banking sector causedreduction in the availability of credit lines and
Corporate sector mid-sized banks Opportunity to expand operations
PINE f d l i f IB and IB and
reduction in the availability of credit lines andfinancial instruments to the bank’s segment
Unique approach: offering diversity of products toPINE: focused on complete service for companies, offering tailor-made products.
IB and Foreign Banks
IB and Foreign Banks
Unique approach: offering diversity of products toa market segment poorly serviced by the bankingindustry
PINE is the generally the client’s first call forstructured solutions
Fast responseDedicated team of specialists with deep
Mid-sized banksMid-sized banksknowledge of the clients business, balancesheet and market positioningTailor-made solutions based on a diverseproduct base
8/44Investor Relations | 4Q10 |
Diversity of ProductsA diversity of financial instruments for the diverse needs of our clients
Credit products in local andforeign currency
Corporate Credit
Derivative products for mitigatingmarkets’ mismatches risks for clients
Sales Desk
Investment Banking
C it l k t
PINE Investimentos
LoansOverdraft accountsBNDES onlendingBank Guarantees
Fixed IncomeCurrenciesCommodities
Capital marketsCorporate financeDistressed & Special Situations
Investment ManagementCompror/VendorACC/ACEExport FinanceFinimpLetters of Credit
g
Asset ManagementWealth Management
Letters of Credit2,770 onlendingSyndicated LoansStructured Loans
Investment products in local and foreign currencyDistribution
CD – Certificate of DepositEurobondsSubordinated notes2,770 onlending
Local depositsDouble index CDBLCA /LCISenior and subordinated local notes
9/44Investor Relations | 4Q10 |
Multilateral linesDebt Capital Markets
Time Deposits
Corporate CreditConstantly searching for diversification and expansion of the credit exposure
Actions
Personalized, agile service, working closely with clientsand keeping a low ratio of companies per officer: eachaccount manager covers only 13 economic groups on
Credit Portfolio by Product
Working l
Trade
Resolution 27700.2%
account manager covers only 13 economic groups onaverage.
More than 70 officers focused on specific geographicareas. It provides the bank with local and highly updatedcredit intelligence.
Capital58.4%
Bank G
Finance9.1%
Active business relationship with more than 600 differenteconomic groups
Origination network is comprised of 10 branches dividedinto 14 b siness platforms in different Bra ilian economic BNDES
Guarantees17.8%
into 14 business platforms in different Brazilian economiccenters
More than 30 credit analysts that guarantee intelligentanalysis in each sector
BNDES onlending
14.5%
Credit Approval: Electronic Process
Efficient loan and collaterals process, documentation andcontrols, which results in historically low NPL ratios
Origination OfficersOrigination Officers
Credit origination Credit analysis, visit to clients, data updates, interaction with internal
Credit AnalystsCredit Analysts
Discussion around sizing, collateral, structure etc
Regional Heads of Origination and Credit
Analysis
Regional Heads of Origination and Credit
Analysis
Presentation to the Credit Committee
Chief Credit Officerand Credit AnalystsChief Credit Officerand Credit Analysts
Centralized and unanimous decision making process
CREDIT COMMITTEE (6 Members)
CREDIT COMMITTEE (6 Members)
10/44Investor Relations | 4Q10 |
updates, interaction with internal research team
collateral, structure etc decision making process
Sales DeskExpertise qualifies the Bank to quickly respond to market conditions and clients demands
Portfolio Breakdown Business
DERIVATIVE SEGMENTS
Fixed Income: Fixed Floating Inflation Libor
As of December 31, 2010
Fixed Fixed Income: Fixed, Floating, Inflation, Libor
Currencies: Dollar, Euro, Yen, Pound, Canadian Dollar,Australian Dollar, Spot
Fixed Income
29%Currencies
63%
Commodities: Sugar, Soybean (Grain, Meal and Oil),Corn, Cotton, Metals, Energy
Notional: R$ 2,822 million
Commodities8%
Purpose
To bring predictability to the clients’ balance sheet
TRENDS
Increased participation of Commodities hedging in theTo bring predictability to the clients balance sheet
Executed with clients that have an ongoing creditrelationship with PINE, rated between AA and C
8 professionals assigned to the desk, dedicated to serve
Increased participation of Commodities hedging in thetotal portfolio
Short-term portfolio (average maturity of transactionsunder 6 months)
p g ,clients on their daily needs
According to Cetip ranking, PINE is number 13 in overallderivatives and top 3 in commodities hedging
Increased usage of risk mitigation tools such as initialmargin and threshold.
11/44Investor Relations | 4Q10 |
PINE InvestimentosCreating new values for our clients and optimizing the use of the Bank’s Capital
PINE Investimentos offers unique solutions for its clients in Investment Banking and Investment Management. With ahighly qualified team with deep knowledge of the market, this area operates as an advisor and not as counterparty,serving the interests and needs of companies and their shareholders, in a customized manner and with diversity ofproducts.
Capital MarketsStructuring and Placement of Securities
Investment Banking Investment Management
Asset ManagementFixed Income Funds
Structuring and Placement of SecuritiesIntermediationStructured Transactions
Corporate Finance
Credit FundsExclusive Mandates
Wealth ManagementP tf li M tM&A
Private PlacementsStrategic and Financial AdvisoryRestructuringCorporate Governance
Portfolio Management
p
Distressed & Special SituationsAdvisory on WorkoutsNegotiation of NPLsAd i A i iti f St d A t
12/44Investor Relations | 4Q10 |
Advisory on Acquisitions of Stressed Assets
Distribution DeskInvestment alternatives in local and foreign currency to domestic and foreign investors
PINE’s Distribution Desk is responsible for serving investors, offering traditional investments and also alternatives tiedto the credit origination platform, capital market, asset management and other structured transactions.
The objective is to provide the clients with a diversified portfolio of investments in line with market development,that adjust to investors’ risk profiles. The Distribution Desk counts on PINE’s expertise in structuring andintermediation of fixed income transactions.
O Di t ib ti D k i t d b t f i t t id li d hOur Distribution Desk is segmented by type of investor to provide a personalized approach.
ProductsInvestors
Family Offices
High Net Worth Individuals
Local CurrencyTraditional investments (local deposits such asCDB/RDB/CDI, LCA/LCI)Senior and subordinated local notes
Products
Corporates
Asset Managers
Senior and subordinated local notesDebt Capital Markets (CCBs, Debentures, FIDCs, CRIs,CRAs, CDCAs, among others)Derivatives
F i CFinancial Institutions
Pension Funds
Foreign Investors
Foreign CurrencyTime Deposits and CD – Certificate of DepositSenior and Subordinated bonds issued by PINEDebt Capital Markets (CCB, Credit Fund, Bonds) – throughCredit Linked Notes
13/44Investor Relations | 4Q10 |
Foreign InvestorsDerivatives
The Current Scenario and Future ProspectsPINE has the key resources to continue developing its strategy: adequate capitalization, efficient funding and strong management team
Adequate capital structure Efficient funding structure
funding and strong management team
US$125 million subordinated debt, approved by theBrazilian Central Bank as Tier II capital in June 2010
Regulatory Capital: R$ 1.1 billion (Dec/10)
Lengthening of average maturities: 18 months(Dec/10)
Greater diversification of funding sources
Capital Adequacy Ratio (BIS) of 17.4% (Dec/10)
DEG and PINE partnership (Feb/11)
A/B Loan of USD 106 million (Jan/11)
FIDC of R$ 300 million (Apr/11)
Strong and motivated teamCorporate clients Strong and motivated teamMeritocracy
Incentives
Corporate clientsCustomized service
Deep knowledge of clients needs
QualificationProduct diversity
Around 80% of the client base is served by morethan one product
14/44Investor Relations | 4Q10 |
2010 HighlightsAll major BS and P&L indicators showed improvement in 2010
Corporate Credit Portfolio(R$ Million)
39.5%
Operating Income (R$ Million)
39.1%
Total Funding(R$ Million)
23.3%
5,747 196.4 4 531
5,589
4,118 141.2 4,531
Dec-09 Dec-10 2009 2010
Net Income(R$ Million) ROAE Effiency Ratio
Dec-09 Dec-10
39.0% 370 bps-70 bps
85.1
118.3
10.3%
14.0% 34.6% 33.9%
16/44Investor Relations | 4Q10 |
2009 2010 2009 2010 2009 2010
2010 Highlights - CorporateHighlights for the corporate business
Consistent performance in the corporate business
Broad and close relationship with companies in various sectors such as sugar and alcohol infrastructureBroad and close relationship with companies in various sectors, such as sugar and alcohol, infrastructure,renewable energy, construction, among others
Positive contribution of all business segments: Corporate Credit, Sales Desk and PINE Investimentos
Net Income of R$ 159.3 million
ROAE of 18.8%
FY 2010
Corporate Business Income Breakdown
Corporate Credit67%
Treasury7%
PINE Investimentos
3%
Sales Desk23%
17/44Investor Relations | 4Q10 |
NIM – Net Interest MarginIncome from financial intermediation increased and margins remained stable
Income from Financial Intermediation Before Provision
(R$ Million)
22.5%
Income from Financial Intermediation After Provision
(R$ Million)
16.7%
422.8 345 3
345.2 295.8 345.3
2009 2010 2009 2010
Financial Margin Before Provision
Financial Margin After Provision
-40 bps -60 bps
7.8% 7.4% 6.7%6.1%
18/44Investor Relations | 4Q10 |
2009 2010 2009 2010
5,747
Credit PortfolioConsistent development
1,022 688
543
520
21 19
18
15
13 Corporate Credit Portfolio Mix (R$ Million)
Resolution 27704,1184,462
4,794
5,265
Corporate credit portfolio
176 242 455
629 833
3 0
511 634
842
827
540 708
663
707 745
688
66 44
36 32
21
Trade Finance
Guarantees
3,0702,842
3,0683,416
Corporate credit portfoliogrew 9.1% in 4Q10, 39.5%in 12 months.
2,104 1 767 1,964
2,284 2,703 2,821 2,792
3,251 3,358
85
72 68
87 276
272 292
350 688 708 Guarantees
BNDES onlending
1,767 ,
Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10
Working Capital
T t l C dit P tf li
Corporate credit portfolio
Total Credit Portfolio (R$ Million)
Corporate credit portfoliorepresents 97% of the totalcredit portfolio.
4,26
4
3,87
3
3,92
2
4,11
3
4,75
3
4,98
0
5,20
8
5,61
7
6,02
9
19/44Investor Relations | 4Q10 |
Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10
Credit Portfolio Profile - CorporateDiversified growth
Agriculture9%
Construction6%
Transportation and Logistics
6%
Financial Institutions
5% Meat packing4%
Specialized Services
Working Capital
Trade Finance
Resolution 27700.2%
Credit Portfolio by Industry Credit Portfolio by Product
Electric and Renewable
Energy10%
3%
Vehicles and Parts3%
Pharmaceutical and Cosmetic
3%
Capital58.4%
Bank Guarantees
Finance9.1%
Infrastructure13%
3%
Telecom3%
Foreign Trade3%
BNDES l di
Guarantees17.8%
Sugar and Ethanol
14%
Foodstuffs2%Metal and
Mining2%
Other14%
onlending14.5%
Credit portfolio by region Local Presence
T t l 71%North
2% Total: 71%Pernambuco 2%
Minas Gerais 9%
Ceará 2%
Northeast
Mid-West11%
2%
10 Branches
14 Business Platforms
Rio de Janeiro 11%
São Paulo 34%
Paraná 6%Southeast
70%South 11%
6%
20/44Investor Relations | 4Q10 |
Rio Grande do Sul 7%
Non-Recurring Provision Countercyclical movement: even more conservative standard for credit coverage
In 4Q10, PINE created non-recurring provisions for loan losses, in two ways:
Reclassification of transactions in accordance with Resolution 2682: all companies with active transactions wereanalyzed and 9.5% of companies in the portfolio were upgraded, while 7.9% were downgraded.
A generic additional provision was made to bring the coverage of the credit portfolio to a more comfortable level.g p g g p
Total Credit Coverage
44 bps
D-H Coverage
-130 bps320 bps
2.45%
71 bps
94.1% 89.6% 92.8%2.01%
1.74%
2.45% 89.6%
21/44Investor Relations | 4Q10 |
Dec-09 Sep-10 Dec-10Dec-09 Sep-10 Dec-10
As of December 31, 2010
Efficient Risk ManagementConstant monitoring of the credit portfolio and balance sheet
Overdue Total Contracts
Overdue Installments
Credit Portfolio qualityB
23.8%
Collaterals
Receivables38%
Property Fiduciary Alienation
Non Performing Loans
2.6%
2.0%
C6.3%
D-E0 9% Product
16%
1.0%1.3%
0.8%0.3%
Dec-08 Dec-09 Dec-10
AA-A67.2%
0.9%F-H
1.7%
Product Fiduciary Alienation
36%Investments
10%
Total portfolio coverage: 2.45%
Leverage1 Cash Position / Time Deposits
Total portfolio coverage: 2.45%
Average Value at Risk (R$ Thousand)
4.7x
5.5x
6.4x
40%
37%
43% 2,669
1,3891,637
22/44Investor Relations | 4Q10 |
2008 2009 2010
1 - Funding / Shareholder Equity
2008 2009 2010 2008 2009 2010
Retail PortfolioReduced impact coming from the retail business expected for 2011, due to the retail credit portfolio run-off
Payroll Credit Portfolio(R$ Million)
run off*
029
1,0
890
730
594
475
378
286
225
177
Projected Run-off of Retail Loans Assigned with Recourse
Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10(*) On and off book portfolio
(R$ Million)
152
74
23/44Investor Relations | 4Q10 |
31 11
Dec-10 Dec-11 Dec-12 Dec-13
Increasingly Diversified Funding SourcesComfortable funding situation
152 200 160 194 194 166 179
55
52 51
Funding Mix (R$ Million)
2770 Lines
Private Placements
5,375
4,8714,6344,531
5,589
199 214 453
626 829
472 393
350
361 326
419 330 249
192 152
226
230 239 227
200
242 141 116 108
75 276 203
105 104 79 74
77 87 151
71 71 60 54
53 54 Capital Market
Multilateral Lines
L
3,8523,6743,6213,729
1,149 1,114 1,146 1,478 1,572
101
102 82 169
199
68
87
176 242 453
601
536
473
472 393
914 797 650
529 317 282 249
6 242 141 116 104 Loan Assignments
Trade Finance
BNDES
1,309 1,778 1,817 1,867 1,908 1,912 681 786
887
891
93 85
84
85 72
68 531 601
Individuals
Corporate Clients
Total Depo
689 683 945
Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10
Clients
Institutional
osits
Foreign Funding – Multilateral Agencies
A/B Loan (January, 2011)
24/44Investor Relations | 4Q10 |
US$106.0 Million
Funding and Credit Portfolio Maturities 3 month positive gap between credit and funding
R$ million
Loan Portfolio + Cash Position
Funding
2,57
8
9
-
2
1,67
5
1,64
4
434
106
42 1,
400
1,42
0
1,75
9
580
396
No Maturity Up to 3 months
(includes Cash)
From 3 to 12 months
From 1 to 3 years
From 3 to 5 years
More than 5 years
(*) Does not consider Shareholders' Equity
Credit: 15 monthsFunding: 18 months
Average Term
25/44Investor Relations | 4Q10 |
Capital Adequacy Ratio (BIS)BIS ratio at comfortable levels
BIS Ratio Tier II Tier I
Public OfferingUS$ 125 Million0.8% 0.8%
0.6%0.5%
0.5% 0 5% 3.7% 3.6%3 6%
19.3% 18.6% 19.3%17.2%
15.6% 14.9%
18.5% 18.4% 17.4%
Minimum Capital Requirement (11%)
Subordinated Notes
18.5% 17.8% 18.7%16.7% 15.1% 14.4% 14.8% 14.8% 13.8%
0.5% 3. % 3.6%3.6%
February / 2010Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10
Tier I 13.8%
BIS Ratio861,152
Equity (R$ Thousand)
26/44Investor Relations | 4Q10 |
Tier II 3.6%
Capital Adequacy 17.4%
226,139
1,087,291
2010 HighlightsThe main ratios show results of PINE's strategy
Total Revenue(R$ million)
14.7%
Corporate Total Revenue(R$ million)
12.7%
Total Revenues (-) Fee Income and Comissions
(R$ Million)
9.4%
484 2 457 7 423 4 463.2 422.3
484.2 406.2
457.7 423.4 463.2
Net Income (R$ million)
2009 2010 2009 2010
ROAE
220 b
Corporate Net Income(R$ million)
2009 2010
22.3% 220 bp12.9%
132.5 162.1
17.7%19.9%
155.5
175.6
28/44Investor Relations | 4Q10 |
2009 2010 2009 2010 2009 2010
IFRS – Main ChangesIFRS impacts over the main figures of the bank
ImpairmentPINE estimates a loan loss provision based on the historical loss and recoverable amounts and other
ImpairmentPINE estimates a loan loss provision based on the historical loss and recoverable amounts and othercircumstances recognized upon evaluation. These criteria differ in certain aspects from the criteriaadopted under BR GAAP.circumstances recognized upon evaluation. These criteria differ in certain aspects from the criteriaadopted under BR GAAP.
Effective Interest RateIn IFRS all revenues and expenses related to financial instruments are incorporated to theeffective interest rates while the contract is activeAn important impact is the recognition of certain revenues that in BR GAAP are booked as FeeI d i IFRS b k d t f th ff ti i t t t (th f i d i
Effective Interest RateIn IFRS all revenues and expenses related to financial instruments are incorporated to theeffective interest rates while the contract is activeAn important impact is the recognition of certain revenues that in BR GAAP are booked as FeeI d i IFRS b k d t f th ff ti i t t t (th f i d iIncome, and in IFRS are booked as part of the effective interest rate (therefore, recognized in anaccrual basis).Income, and in IFRS are booked as part of the effective interest rate (therefore, recognized in anaccrual basis).
Accrual of Credit Portfolios Sold with RecourseUnder BR GAAP the income from assigned loan portfolio with recourse was recognized upon thesale, in IFRS the income of transactions assigned with recourse are recognized on an accrual basisthroughout the life of the contract.
Accrual of Credit Portfolios Sold with RecourseUnder BR GAAP the income from assigned loan portfolio with recourse was recognized upon thesale, in IFRS the income of transactions assigned with recourse are recognized on an accrual basisthroughout the life of the contract.
Income Tax and Social ContributionAdjustments to deferred Income Tax and Social Contribution calculated on IFRS adjustments were
Income Tax and Social ContributionAdjustments to deferred Income Tax and Social Contribution calculated on IFRS adjustments were
29/44Investor Relations | 4Q10 |
reflected in the reconciliation.reflected in the reconciliation.
Corporate GovernancePINE adopts the best corporate governance practices
Two independent members and one external member on the Board of DirectorsMailson Ferreira da Nóbrega: Brazil’s Finance Minister from 1988 to 1990Maurizio Mauro: Former CEO of Booz Allen Hamilton and Grupo AbrilFernando Albino de Oliveira: Former Director of CVM’s and a partner of Albino AdvogadosAssociados
São Paulo Stock Exchange (BM&FBovespa) Level 1 of Corporate Governance
Fiscal Council
100% tag along rights for all shareholders, including non-voting shares
Arbitration procedures for fast settlement of litigation cases
31/44Investor Relations | 4Q10 |
Main CommitteesPINE believes that the use of the best corporate governance practices substantially enhancesits business outcomeits business outcome
Main decisions are taken by committees: Board of Directors and a structure of specificcommitteesNon stop exchange of knowledge and informationNon-stop exchange of knowledge and informationTransparency
Board ofBoard ofBoard ofDirectorsBoard ofDirectors
Fiscal CouncilFiscal CouncilAuditAudit
SupportCommittee
SupportCommittee
ExecutiveCommitteeExecutiveCommittee
TreasuryCommittee
(ALCO)
TreasuryCommittee
(ALCO)
National andForeign Funding
Products
National andForeign Funding
ProductsCredit
CommitteeCredit
CommitteeRetail
CommitteeRetail
Committee
Complianceand Basel Risk
Committee
Complianceand Basel Risk
Committee
Corporate Finance
Committee
Corporate Finance
Committee(ALCO)(ALCO) CommitteeCommitteeCommitteeCommittee CommitteeCommittee
DelinquencyCommittee
DelinquencyCommittee
PerformanceEvaluationCommittee
PerformanceEvaluationCommittee
EthicsCommittee
EthicsCommittee
ITCommittee
ITCommittee
HumanResourcesCommittee
HumanResourcesCommittee
32/44Investor Relations | 4Q10 |
Shareholders’ StructureOn December 29th, free floating adequacy reached through the sale of a portion from shares in treasury.treasury.
Base 03/21/11
ON PN Total %
Controlling Shareholder 45,443,872 14,370,556 59,814,428 70.0%
Management - 2,737,946 2,737,946 3.2%
Free Float - 21 481 892 21 481 892 25 2%Free Float 21,481,892 21,481,892 25.2%
Individuals - 4,509,255 4,509,255 5.3%
Institutional Investors - 6,608,707 6,608,707 7.7%
Foreign Investors - 10,363,930 10,363,930 12.1%
Subtotal 45,443,872 38,590,394 84,034,266 0.0%
Treasury - 1,374,839 1,374,839 1.6%
Total 45,443,872 39,965,233 85,409,105 100.0%
Market MakerIn January 2011, hiring of XP Investimentos as Market Maker to increase the PINE4’sliquidity in the marketliquidity in the market
33/44Investor Relations | 4Q10 |
Shareholders’ ProfileShareholders' profile change since the crisis
2007IPO
ForeignInvestors
78.4%
ForeignInvestors
78.4% 40.5%41.0%
42.0% 41.6%41.7%
42.7% 42.7% 42.2%41.2%
38.2%
40.1% 39.6% 39.8%
40 4%
44.8%
Institutional Investors
InstitutionalInvestors12.9%
InstitutionalInvestors12.9%
38.5%39.5% 39.8%
38.4% 38.2% 38.1% 38.0%37.3% 37.6% 37.9%
39.0%
40.4%
Foreign Investors
Individuals
Individuals8.7%
Individuals8.7%
21.4%20.9% 20.4%
21.1% 20.8%19.9% 20.4%
21.0%19.7% 19.4%
18.7% 18.3%17.0%
Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10
34/44Investor Relations | 4Q10 |
DividendsSince 2008, Banco PINE has paid dividends/interest on own capital on a quarterly-basis.
Dividends and Interest on Own Capital
R$ million R$
Gross Amount Total Amount Amount per Share1Q10 15.0 0.179998
2Q10 20.0 0.239997
3Q10 20.0 0.239997
4Q10 20.0 0.238282
Total paid in 2010 75.0 0.898274
Dividends and Interest on Own Capital (R$ Million)
45
16
25 25 33
45
30 35
40
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1H07 2H07 1H08 2H08 1H09 2H09 1H10 2H10
DEG and PINE PartnershipSubscription agreement with DEG – a leading German bank – for an equity investment in PINE
Highlights
M b f KfW B k f th fi l t b k i GMember of KfW Bankengruppe, one of the five largest banks in Germany
DEG’s investment in PINE will be their first equity investment in a Brazilian financial institution
ll b b f d h d b h k b h l l b $DEG will subscribe new preferred shares issued by the Bank by the lower value between R$43.7million and €20 million
DEG will acquire approximately 2,422,480 shares (with capital increase)
If the investment had occurred in December 2010, the book value per share would have gonefrom R$10,33 to R$10,54 by the end of 2010
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2010 Events and HighlightsMarket Recognition
PINE is one of the 15 largest banks in the country in Corporate credit*, according to the 2010 edition ofMelhores e Maiores, from Exame magazine
PINE was considered the Best Commercial Bank in Brazil by World Finance Banking Awards in August 2010.The award was created by British magazine World Finance. Some of the most important criteria were:solutions for clients and optimization of relationships, innovation and flexibility, and staying ahead of thecompetition
On May 24, Fitch Ratings raised PINE's ratings, citing the agility in adapting to economic volatility, itsstrategy of consistently managing risks and balance sheet adjustments
In September, 2010, LF Ratings raised PINE’s rating from A to A+. According to the agency, the upgradereflects aspects related to support, management, strategy and financial strength
During the same period Austin Ratings upgraded PINE's rating outlook to positive
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Social ResponsibilityBanco PINE supports and promotes Brazilian culture
SocialCasa HopeInstituto Alfabetização Solidária
CultureA Cidade e a Rosa (The City and the Rose): retrospective ofthe artist Paulo Von Poser
Instituto Sedes SapientiaeInstituto Casa da Providência Paisagem e Olhar (Landscape and View):
featuring watercolors of the biodiversityof the Rainforest
SportsMinas Tênis Clube: training program forathletesPasse de Mágica: created in 2004 by MagicP l d B f B ili b k tb ll
Embarcações (Typical Vessels of the Brazilian Coast):registers the historic beauty of vessels from north to south ofBrazil
Paula and Branca, former Brazilian basketballplayers, to offer basketball instruction forchildrenProjeto Rede Atletismo Novos Talentos:(New Talent Athletics Network Project)
i i f hl d l d dResponsible Credit
training program for athletes developed andmaintained by the Aquarela Foundation
Green Building
“Lists of Exceptions”: the Bank does not finance – withmultilateral organizations lines - projects or those organizationsthat damage the environment, are involved in illegal laborpractices or produce, sell or use products, substances oractivities considered prejudicial to societyactivities considered prejudicial to society.
System of environmental monitoring, financed by the IADB andcoordinated by FGV, and internally-produced sustainabilityreports for corporate loans.
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Ratings
Fitch RatingsFitch Ratings LF RatingLF Rating AustinAustinRiskbankRiskbankMoody’sMoody’s Standard & Poor's
Standard & Poor's
nd
Fo
reig
n
rren
cy
Long Term Ba2 BB- BB- - - -
Short Term B B-
- -
Lo
cal an
Cu
r
Long Term Ba2 BB- BB- - - -
Short Term B B-
- -
Bra
zil
Nati
on
al
Sca
le Long Term A1.br brA- A(bra) 10.47Low Risk for the Medium Term (-)
A+ A
Short Term Br-1 F1(bra)
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Key Performance Indicators – BR GAAP
4Q10 3Q10 4Q09 2010 2009
Earnings and Returns
Net Income (R$ million) 14,898 37,596 21,148 118,270 85,086
Annualized ROAE 7.0% 18.6% 10.7% 14.0% 10.3%
Annualized ROAAw 1 1.1% 3.0% 1.9% 2.3% 1.9%
Annualized financial margin before provision 8.5% 8.4% 11.3% 7.4% 7.8%
Annualized financial mergin after provision 4.9% 7.4% 11.9% 6.1% 6.7%
Balance Sheet (R$ thousand)Balance Sheet (R$ thousand)
Total loan portfolio 2 6,015,846 5,601,470 4,731,043 6,015,846 4,731,043
Corporate credit portfolio 2 5,746,649 5,265,410 4,118,057 5,746,649 4,118,057
Assets weighted by risk 5,473,250 5,206,221 4,682,157 5,473,250 4,682,157
Total deposits 3 3,698,360 3,584,541 3,029,269 3,698,360 3,029,269
Total funding 5,588,883 5,374,700 4,531,036 5,588,883 4,531,036
Shareholders' equity 867,132 872,761 825,212 867,132 825,212
Credit portfolio quality
Non performing loans - 15 days 0.26% 0.83% 0.77% 0.26% 0.83%
Non performing Loans - 60 days 0.24% 0.69% 0.72% 0.24% 0.69%
Non performing loans - 90 days 0.15% 0.56% 0.54% 0.15% 0.56%
Loan coverage 2.45% 1.74% 2.01% 2.45% 2.01%
PerformancePerformance
BIS ratio 17.4% 18.4% 15.6% 17.4% 15.6%
Efficiency ratio 33.8% 30.6% 26.4% 33.9% 34.6%
Earnings per share (R$) 0.18 0.45 0.25 1.41 1.02
Book value per share (R$) 10.33 10.47 9.90 10.33 9.90 (1) Risk weighted assets.
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( ) g(2) Includes guarantees.(3) Includes Agribusiness Letter o f Credit.
Key Performance Indicators – IFRS
2010 2009 Year (%)
Earnings and Returns
Net Income (R$ thousand) 162,073 132,537 22.3
ROAE 19 9% 17 7% 220 bROAE 19.9% 17.7% 220 bps
ROAAw 1 3.2% 3.0% 20 bps
NIM 7.8% 8.4% -60 bps
Balance Sheet (R$ thousand)Balance Sheet (R$ thousand)
Total loan portfolio 2 6,004,414 4,722,309 27.1
Shareholders' equity 855,290 769,566 11.1
Loan coverage 2.0% 1.9% 10 bps
Performance
Efficiency ratio 31.5% 32.2% -70 bps
Earnings per share (R$) 1.95 1.58 23.4
Book value per share (R$) 10.19 9.23 10.3 (1) Ri k i ht d t(1) Risk weighted assets .(2) Includes guarantees.
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Investor Relations
Norberto Zaiet Junior
CFOCFO
Nira Bessler
Head of Investor RelationsHead of Investor Relations
Alejandra Hidalgo
Investor Relations Analyst
Phone: +55-11-3372-5553 / 5552
www.bancopine.com.br/rir
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This presentation contains forward-looking statements relating to the prospects of the business, estimates for operating and financial results, and those related to growth prospects of Banco Pine. These aremerely projections and, as such, are based exclusively on the expectations of Banco Pine’s management concerning the future of the business and its continued access to capital to fund the Company’sbusiness plan. Such forward-looking statements depend, substantially, on changes in market conditions, government regulations, competitive pressures, the performance of the Brazilian economy and theindustry, among other factors and risks disclosed in Banco Pine’s filed disclosure documents and are, therefore, subject to change without prior notice.