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3Q16 Institutional Presentation
2/37Investor Relations | 3Q16 |
Profile and History Pine History
Business Strategy Competitive Landscape Focus Always on the Client Corporate Credit FICC Pine Investimentos Strategic Partnership
Corporate Governance Organizational Structure Corporate Governance Social Investment and Responsibility
Economic Overview Macroeconomic Credit Growth Expectations
Highlights and Results
Summary
3/37Investor Relations | 3Q16 |
Profile and History
4/37Investor Relations | 3Q16 |
PineSpecialized in providing financial solutions for corporate clients…
Credit Portfolio by Annual Client Revenues Customer Profile
Bank Profile
Focused on establishing long-term relationships
Fast response | Specialized services
Customized products | Product diversity
R$ 6,238 million in Loan Portfolio
R$ 1,152 million in Shareholders’ Equity
Long-term National Rating at AA+ by Fitch
Business is structured along three primary business lines:
Corporate Credit: credit and financing products
FICC: instruments for hedging and risk management
Pine Investimentos: Capital Markets, Financial Advisory, Project & Structured Finance and Research
Large Corporate (> R$ 2.000 millions)
Corporate (R$ 500 - R$ 2.000 millions)
Companies (R$ 50 - R$ 500 millions)
Retail (PFs e small companies)
Balance sheets audited by third parties, corporate governance, well defined hedging policies, and the lower risk profile
Over R$2 billion38%
R$500 million to R$2 billion
23%
Up to R$500 million39%
5/37Investor Relations | 3Q16 |
...with extensive knowledge of Brazil’s corporate credit cycle. History
1997Noberto Pinheiro sell his stake in BMC and found
Pine
1939Pinheiro Family
foundsBanco Central do
Nordeste
1975Noberto Pinheiro becomes one of
BMC’s controlling shareholders
Devaluati-on of the
real
Nasdaq Sept. 11 Brazilian Elections
(Lula) Subprime
Russian Crisis European
Community
End of 2007Focus on expanding the Corporate Banking franchise
Discontinuation of the payroll-deductible loan business
May, 2007Creation of Pine Investimentos products line and
opening of the Cayman branch 2005
Noberto Pinheiro becomes Pine’s controller
October, 2007Beginning of the FICC Business
October, 2011Subscription of Pine’s capital by DEG
August, 2012 Subscription of Pine’s capital by DEG, Proparco, Controlling Shareholder and Management
2014Portfolio deleveraging strategy due to an adverse scenario
March, 2007IPO
May, 201619
years
155 184 222 341 521 620 755 663 761 1,2142,854 3,105
4,1925,763
6,9637,911
9,920 9,826
6,933 6,238
1862
121 126 140 136 152 171 209
335
801 827 825867
1,015
1,2201,272 1,256
1,163 1,152
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Sept
-16
Corporate Credit Portfolio (R$ Million)Shareholders' Equity (R$ Million)
6/37Investor Relations | 3Q16 |
Business Strategy
7/37Investor Relations | 3Q16 |
Competitive LandscapePine serves a niche market of companies with few options for banks.
100% focused on providing complete service to companies, offering
customized products
100% Corporate
Large Multi-Services banks
Market
Consolidation of the banking sector has decreased the supply of credit lines and financial instruments for corporate
Foreign banks are in a deleveraging process
PINE
Full service Bank – Credit, Hedging, and Investment Bank products – with room for growth
~15 clients per officer
Competitive Advantages: Focus Fast response: Strong relationship with
clients, with the credit committee meeting once a week ensures rapid return to customer needs
Specialized services Tailor-made solutions Product diversity
Foreign and Investment
Banks
SME & Retail
Corporate e SME
Retail
8/37Investor Relations | 3Q16 |
Focus Always on the ClientProducts tailored to meet the needs of each individual client.
In additionto theheadquarterslocatedin thecity ofSão Paulo, Pine has6 branchesthroughoutBrazil, in theStates of Mato Grosso, Paraná, Pernambuco, Rio de Janeiro, Rio Grande do Sul, and São Paulo. The originationnetwork also counts with aCayman Branch, especially for Trade Finance transactions.
9/37Investor Relations | 3Q16 |
Corporate Credit
Actions Credit CommitteeStrong track record and solid credit origination and approval process.
Credit Approval: Electronic Process
Origination Officers
Credit originationCredit analysis, visit to clients, data updates,
interaction with internal research team
Credit AnalystsRegional Heads of Origination
and Credit Analysis
Presentation to the Credit Committee
Directors and Analysts of
Credit
Centralized and unanimous decision
making process
CREDIT COMMITTEE
Meets once a week – reviewing on ~ 20 proposals
Minimum quorum: 4 members - attendance of CEO or Chairman is mandatory
Committee Members: CEO Chief Financial Officer Chief Administrative Officer Credit Director Corporate and Investment Banking Director
Superior Committee Members: Two members of the Board
Participants: FICC Director Credit Analysts Team Other members of the Corporate Banking
origination team
Personalized and agile service, working closely with clients and keeping a low client to account officer ratio: each officer handles ~15 economic groups
Geographic coverage of clients, providing the bank with local and extremely up-to-date credit intelligence and information
Established long term relationships with more than 500 economic groups
Pine has approximately 20 professionals in the credit analysis area, assuring that analysis is fundamentally driven 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.
Superior Committee Approval
Tickets over R$ 15 MM
10/37Investor Relations | 3Q16 |
September 30rd, 2016
Currencies (83%): Dollar, Euro, Yen, Pound, Canadian Dollar, Australian Dollar
Fixed income (10%): Fixed, Floating, Inflation, Libor
Commodities (7%): Sugar, Soybean ( Grain, Meal and Oil), Corn, Cotton, Metals, Energy
FICCSolid trackrecord.
Market Segments Competitive Advantages
One Stop Shop: credit and risk mitigation
Every transaction demands prior credit approval
Collaterals surpass approved derivative’s limits
Agility| Client Focused| Diversification
Average of 30 days to close a derivative transaction (domestic large banks average - 90 days)
Sample Transaction
Trader prices the transaction, including
spread
Treasury hedges the transaction
Transaction closed
Treasury informs the spot price
Global Derivatives Agreement
(ISDA Master Agreement)
• Limits• Types of Derivatives• Collaterals
• Market Risk: 100% Hedged • Limits
PINE Credit Analysis Process
FICC
• Credit Analysis• Collaterals• Cross-selling opportunity• Credit Committee Approval
Client 1st
2nd
Margin Calls Management
Derivatives
11/37Investor Relations | 3Q16 |
Pine Investimentos9th place in volume of short-term fixed income transactions, being the 5th player in the number of transactions
Operating Model
Selected Transactions
Pine Investimentos
Financial AdvisoryCapital MarketsProjectFinance
Fixed Income (CRIs, CRAs)
Infrastructure Debentures
Equities Securitization
Hybrid capital transactions
Project & Structured Finance
Investidores Family Offices Individuals Companies Asset Managers Financial Institutions Pension Funds Foreign Investors Hedge Funds
J uly, 2016
Bank Guarantee
R$ 38,000,000
Coordinator
J une, 2016
CPR
R$22,700,000
Lead Coordinator
May, 2016
CPR
R$25,500,000
Lead Coordinator
April, 2016
Structure CCB
R$35,000,000
Lead Coordinator
April, 2016
Promissory Note
R$20,000,000
Lead Coordinator
J uly, 2016
Bond
R$ 400,000,000
September, 2016
Structure CreditFacility
R$ 10,000,000
Lead Coordinator
September, 2016
Mortage Backed Securities
R$ 10,000,000
Lead Coordinator
September, 2016
Bond
R$ 469,000,000
12/37Investor Relations | 3Q16 |
Strategic Partnerships
About DEG
About PROPARCO
Group Structure
Group Structure
DEG and PROPARCO
Founded in 1962 in Germany, DEG is one of the largest institutions in Europe that contribute to growth and development of private companies in emerging market
It belongs to the KFW Bankengruppe, Germany's largest public development bank
Promotes development of private enterprises in emerging markets through long-term financing
Consolidated AssetsEUR 7.6 billion
May, 2015
Founded in 1977 in Paris, started it´s activities in Brazil in 2006
Proparco is the subsidiary of Agence Francaise de Dévelopement ( AFD)
Focused on emergence of a strong and innovative private sector with aim of supporting growth and sustainability in Emerging Market
Consolidated AssetsEUR 3.72 billion
May, 2015
57%
French Financial
Institutions
International Financial
Organisations
French Companies
Investment funds &
Foundations
26%
13%
3% 1%
13/37Investor Relations | 3Q16 |
Corporate Governance
14/37Investor Relations | 3Q16 |
Organizational StructureNon-bureaucratic Culture, entrepreneurial and meritocratic with a flat hierarchy
CEONorberto Zaiet Jr.
INTERNAL AUDIT COMPENSATION COMMITTEE AUDIT COMMITTEEEXTERNAL AUDIT
PWC
Noberto N. Pinheiro Jr. Rodrigo Pinheiro Igor Pinheiro Noberto Pinheiro Norberto Zaiet Gustavo
JunqueiraMailson de Nóbrega Susana Waldeck
President Vice-President Vice-President Member Member Independent Member
Independent Member
External Member
BOARD OF DIRECTORS
RISKS COMMITTEE
Corporate & IB FinancesOperationsBusiness
Structuring- DCMInvestment BankingCorporate Banking
Assets and Liabilities Back-office LegalCompliance, Internal Control and Security of InformationCollaterals ManagementManagement Special AssetsMiddle OfficeExchangeServices
Sales & TradingInternationalResearch Macro / Commodities/ CompaniesFunding & DistributionMarketingInvestor RelationsStructured ProductsALM e FLOW
Accounting and Tax PlanningTechnologyMarket and Liquidity RisksStrategic Planning and P&LCommercial Planning and Valuation
Credit
CreditRegister
15/37Investor Relations | 3Q16 |
Corporate GovernancePine is committed to best corporate governance practices
Two Independent Members and one External Member 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 at EZTEC,
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 the company.
She brings the day-to-day experience to the Board.
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
16/37Investor Relations | 3Q16 |
Social Investment and ResponsibilityFocus on the short, medium and long term.
Social Investment Recognition
Partnerships
Most Green Bank
Recognized by the International Finance Corporation (IFC), private agency programs of the World Bank as the most "green" bank as a result of its transactions under the Global Trade Finance Program (GTFP) and its onlending to companies focused on renewable energy and ethanol
Efficiency Energy
Recognition by World Bank for support in the Energy Efficiency sector.
Responsible Credit
“Lists of Exceptions”: the Bank does not finance projects or those organizations that damage the environment, are involved in illegal labor practices or produce, sell or use products, substances or activities considered prejudicial to society.
System of environmental monitoring, financed by the IADB and coordinated by FGV, and internally-produced sustainability reports for corporate loans
Protocolo Verde – “Green Protocol”, an agreement between FEBRABAN and the Ministry of the Environment to support development that does not compromise future generations.
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.
Sustainability Annual Report
Seventh consecutive year disclosing the Sustainability Report in the GRI standard. The 2015 report, with its high level of clarity, transparency and quality was recognized with the fourth place in the Abrasca Annual Report Award, considering its category of companies with net income to R$3 billion.
17/37Investor Relations | 3Q16 |
Economic Overview
18/37Investor Relations | 3Q16 |
17.6
17.5
19.2
23.5
16.4
19.1
15.3
12.0
12.510.1
9.9
11.8
8.6
8.3
11.0
13.5 14.1
11.8
9.510.0
5
10
15
20
25
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
Forecast
Selic (interest rate, average) Média móvel 4 anos
4.4
1.43.1
1.1
5.8
3.24.0
6.15.1
-0.1
7.5
3.9
1.93.0
0.1
-3.8-3.5
0.82.5
1.5
-6
-4
-2
0
2
4
6
8
10
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
Forecast
Real GDP growth rate (%) Média móvel 4 anos
Macroeconomic
Real GDP
SELIC
IPCA (CPI)
Gross Government Debt
Due to the challenging economic scenario...
Moving Avarage 4 years
Moving Avarage 4 years
6.0
7.7
12.5
9.3
7.6
5.7
3.14.5
5.9
4.3
5.96.5
5.8 5.9 6.4
10.7
7.0
5.0 4.5 4.5
3
5
7
9
11
13
15
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
Forecast
IPCA (CPI)
67
76
7268
67
55 57
56
59
5251
5452
57
6772
75
8082
50
60
70
80
90
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
Forecast
Gross government debt (% GDP)
19/37Investor Relations | 3Q16 |
0
10
20
30
40
50
60
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Credit growth (% YoY, nominal)
Credit Growth
Corporate and Households
Credit/GDP
Public Banks, National and Internacional Privates Banks
Interest and Spread
... the credit environment is directly affected...
50.8
-10
0
10
20
30
40
50
2008 2009 2010 2011 2012 2013 2014 2015 2016
Credit growth (% YoY, nominal)
Corporate Households
-6.5
3.6
-505
1015202530354045
2008 2009 2010 2011 2012 2013 2014 2015 2016
Credit growth (% YoY, nominal)
Public banks National private banks International private banks
-0.3
1.8
-14.6
0
5
10
15
20
25
30
35
2011 2012 2013 2014 2015 2016
Interest and Spread - Corporate (% YoY)
Investment Funding Spread
29.8
11.8
18.0
20/37Investor Relations | 3Q16 |
Expectations...however, we expect that this scenario has a slight improvement in 2017.
Source: Pine Bank, September 2016
Brazil: Key Economic Indicators - PINEINDICATORS 2011 2012 2013 2014 2015 2016E 2017E 2018EReal GDP growth rate (%) 3.9% 1.9% 3.0% 0.1% -3.9% -3.5% 0.8% 2.5%BRLUSD (eop) 1.83 2.08 2.35 2.65 3.87 3.25 3.00 2.85BRLUSD (average) 1.67 1.95 2.16 2.35 3.33 3.47 3.13 2.95IPCA (CPI) 6.5% 5.8% 5.9% 6.4% 10.7% 7.0% 5.0% 4.5%IGP-M (PPI) 5.1% 7.8% 5.5% 3.5% 10.5% 7.7% 4.7% 5.0%Selic (interest rate, eop) 11.00% 7.25% 10.00% 11.75% 14.25% 13.75% 11.00% 9.00%Selic (interest, average) 11.71% 8.46% 8.44% 11.02% 13.58% 14.15% 11.75% 9.50%Trade balance (USD bn) 29.8 19.4 2.6 -3.9 19.7 50.1 35.0 20.0Current account (USD bn) -73.2 -78.4 -83.0 -103.6 -58.9 -18.4 -25.0 -40.0Current account (% GDP) -2.8% -3.5% -3.8% -4.8% -3.3% -1.0% -1.2% -2.0%FDI (US$bn) 101 87 69 97 75 70.0 80.0 90.0Primary surplus (% GDP) 2.9% 2.2% 1.7% -0.6% -1.9% -2.4% -2.1% -1.0%Gross government debt (% GDP) 51.3% 54.8% 53.3% 58.9% 66.4% 72.0% 75.0% 80.0%
21/37Investor Relations | 3Q16 |
Highlights and Results
22/37Investor Relations | 3Q16 |
Highlights
Liquid balance sheet with a cash position of R$ 1.8 bi, equivalent to 50% of time deposits.
Excess capital, with a BIS ratio of 15.8%, being 15.3% in Tier I Capital.
Loan portfolio coverage ratio surpassed 6% as a result of relevant provisions over the past quarters.
Retraction of approximately 8% in personnel and administrative expenses in the accumulated of 9 months.
Continuous liability management with a diversified portfolio and adequate terms.
23/37Investor Relations | 3Q16 |
10
-7 -73Q15 2Q16 3Q16
-163.7%
4.9%
7,409 6,859
Sept-15 Dec-15
Total Funding
-7.4%
1,181 1,163
Sept-15 Dec-15
Shareholders' Equity
-1.5%
3.5% 3.6%
3Q15 4Q15
ROAE
0.1 p.p
2.9% 3.2%
3Q15 4Q15
NIM Evolution
0.33 p.p.
10 10
3Q15 4Q15
Net Income
Financial Highlights
1 Includes Stand by LCs, Bank Guarantees, Credit Securities to be Received and Securities (bonds, CRIs, eurobonds and fund shares)
R$ million
7,691 6,271 6,238
Sept-15 J un-16 Sept-16
Total Loan Portfolio1
-0.5%-18.9%
7,691 6,933
Sept-15 Dec-15
Total Loan Portfolio1
-9.9%
7,409 5,925 5,908
Sept-15 J un-16 Sept-16
Total Funding
-0.3%-20.3%
1,181 1,165 1,152
Sept-15 J un-16 Sept-16
Shareholders' Equity
-1.1%
-2.4%
3.5%
-2.4% -2.3%3Q15 2Q16 3Q16
ROAE-580 bps.
10 bps.3.3%2.0% 2.0%
3Q15 2Q16 3Q16
NIM
-90 bps.
24/37Investor Relations | 3Q16 |
Revenue MixProduct and Revenue Diversification
Business Lines
Credit48.0%
Bank Guarantees 21.9%
FICC20.0%
Pine Investimentos
7.2%
Treasury2.9%
9M16
Credit66.5%
Bank Guarantees 18.0%
FICC11.2%
Pine Investimentos
4.3%
Treasury0%
9M15
25/37Investor Relations | 3Q16 |
Net Interest Margin NIM Breakdown
NIM
NIM Breakdown
R$ million3Q16 2Q16 3Q15 9M16 9M15
Financial MarginIncome from financial intermediation 32 51 1 154 135
Overhedge effect (2) (21) 55 (62) 79 Income from financial intermediation 30 30 56 92 214
3.3%1.97% 2.05%
3Q15 2Q16 3Q16
NIM-90 bps.
10 bps.
26/37Investor Relations | 3Q16 |
Expenses and Efficiency Ratio
Personnel and Administrative Expenses
Expenses and Efficiency Ratio
Rigorous cost control.
R$ million3Q16 2Q16 3Q15 9M16 9M15
Personnel expenses 21 21 22 62 66 Other administrative expenses 17 16 20 49 55 Subtotal 38 37 42 111 121 Non-recurring expenses (3) (3) (4) (9) (7)Total 35 34 38 102 114
Employees1 339 337 375 339 375 1 Including outsourced ones
22 21 2120
16 17
50.6%
86.7% 77.6%
-200%
-150%
-100%
-50%
00%
50%
100%
0
5
10
15
20
25
30
35
40
3Q15 2Q16 3Q16
Personnel Expenses
Other administrativeexpensesRecurring EfficiencyRatio (%)
27/37Investor Relations | 3Q16 |
3,650 3,282 3,172 3,139 3,275
924794 747 659 520
2,4922,373 2,250 2,122 2,104
626
485438
351 339
Sept-15 Dec-15 Mar-16 J un-16 Sept-16
Trade finance: 5.4%
Bank Guarantees: 33.7%
BNDES Onlending : 8.3%
Working Capital: 52.5%
6,9336,608
6,271
7,691
6,238
1 Includes Stand by LC2 Includes debentures, CRIs, Hedge Fund Shares, Eurobonds, Credit Portfolio acquired from financial institutions with recourse and Individuals
R$ million
Loan PortfolioThe portfolio amounted to R$6.2 billion...
1
-18.9%
-0.5%
2
28/37Investor Relations | 3Q16 |
Continuous Loan Portfolio Management
Sectors Rebalance...with improved sector diversification.
Diversified growth (lower tickets and increased number of active clients).
The composition of the portfolio of the 20 largest clients changed by over 25% in the past twelve months;
The share of wallet of the 20 largest clients remained at around 30%, in line with market peers.
38%38%40%41%41%
6%7%6%5%6%9%9%8%9%6%
11%10%11%8%9%
12%12%14%14%16%
12%12%9%9%10%
12%12%12%14%12%
Sept-16Sept-15Sept-14Sept-13Sept-12
Real Estate
Energy
Sugar and Ethanol
Agriculture
Engineering
Transportationand Logistics
Others
Real Estate12%
Energy12%
Sugar and Ethanol12%
Agriculture11%
Engineering9%
Transportation and Logistics
6%Telecom
5%
Foreign Trade5%
Specialized Services
4%
Metallurgy3%
Retail3%
Mining2%
Construction Material
2%
Vehicles and Parts2%
Meatpacking2%
Food Industry1%
Other9%
29/37Investor Relations | 3Q16 |
7.7%
13.8%15.1%
4.1%
5.9% 6.1%
00%
02%
04%
06%
08%
10%
12%
-01%
01%
03%
05%
07%
09%
11%
13%
15%
17%
Set-15 J un-16 Set-16Carteira D-H Cobertura da Carteira Total
127% 167% 193%
50.0%
250.0%
450.0%
650.0%
Cobertura da Carteira D-H Vencida
1D-H Portfolio: D-H Portfolio / Loan Portfolio Res. 2,6822Coverage of Total Portfolio: Provisions / Loan Portfolio Res. 2,682 3Coverage D-H Overdue Portfolio: Provisions / D-H Overdue Portfolio
September 30th, 2016
Contracts Overdue: total amount of the contracts overdue for more than 90 days / Loan Portfolio excluding Bank Guarantees and Stand-by Letters of Credit.
Loan Portfolio Quality~85% of the loan portfolio is classified between AA-C ratings.Loan Portfolio Quality – Res. 2,682
Credit Coverage
Non Performing Loans > 90 days (Total Contract)
Collaterals
1 2 3
0.3%1.1%
2.1% 1.8%1.2%
1.7%0.7%
1.3% 1.5%
sept-14 dec-14 mar-15 jun-15 sept-15 dec-15 mar-16 jun-16 sept-16
Products Pledge39%
Receivables13%Properties
Pledge45%
Investments2%
AA-A23.9%
B26.4%
C34.6%D-E
9.8%
F-H5.3%
30/37Investor Relations | 3Q16 |
853 841 787 648 617
343 324 348 261 376
1,321 1,570 1,662 1,9392,600
359 336 218 156
133
3318 17 19
29
952 806 759 668
530207 295 284 296
198764 751 761 734259
318 279 244 216 206
1,022 1,029777 680 665
545 11361
39 33
692497
352270 262
7,409
6,859
6,2705,925 5,908
Sept-15 Dec-15 Mar-16 J un-16 Sept-16
Trade Finance: 4.4%
Private Placements: 0.6%
Multilateral Lines: 11.3%
International Capital Markets:3.5%Financial Letter : 4.4%
Local Capital Markets: 3.4%
Onlending: 9%
Demand Deposits: 0.5%
Interbank Time Deposits: 2.3%
High Net Worth Individual TimeDeposits: 44%Corporate Time Deposits: 6.4%
Institutional Time Deposits:10.4%
R$ million
FundingDiversified sources of funding...
41%
53%
53%
52%
50% Cash over Deposits
-20.3% -0.3%
31/37Investor Relations | 3Q16 |
39% 45% 48% 51%64%
61% 55% 52% 49%36%
Sept-15 Dec-15 Mar-16 J un-16 Sept-16
Total Deposits Others
Leverage: Expanded Loan Portfolio / Shareholders’ Equity Expanded 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
Asset & Liability Management... matching assets’ and liabilities’ duration.
Leverage Credit over Funding Ratio
Total Deposits over Total FundingR$ millionR$ billion
5,9257,409 6,859 6,270 5,908
Asset and Liability Management (ALM)
70%66% 69% 70% 70%
Sept-15 Dec-15 Mar-16 Jun-16 Sept-16
6.5x6.0x 5.6x 5.4x 5.4x
4.4x3.9x 3.7x 3.6x 3.6x
-
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
10.0 0
Sept-15 Dec-15 Mar-16 J un-16 Sept-16
Expanded loan Porfolio
Loan Portfolio excludingBank Guarantees
1.2
0.7
5.2
0.00.70.5
Assets0.1
0.2
3.7
2.9
0.5
0.9
Liabilities
8.3 8.3
Coverage of 143%
Cash and cash equivalents
Assets financed through REPOs
Other assets
Credit Portfolio
Trading portfolio assets
Illiquid assets
Secured funding
Other liabilities
Unsecured funding
Demand deposits
Equity
REPO Financing
32/37Investor Relations | 3Q16 |
Capital Adequacy Ratio (BIS), Basel III BIS ratio of 15.8%, being 15.3% in Tier I Capital.
12.2%14.1% 14.7% 15.4% 15.3%
0.9%0.9% 0.4% 0.5% 0.5%
13.1%
15.0% 15.1%15.9% 15.8%
Set-15 Dez-15 Mar-16 J un-16 Set-16
Tier II Tier I Minimum Regulatory Capital (10.5%)
33/37Investor Relations | 3Q16 |
Rating
Fore
ign
and
Loca
l Cu
rren
cy
Long Term B+ BB- B1 -
Natio
nal
Long Term BBB- A+ Baa2 9.29
34/37Investor Relations | 3Q16 |
Balance Sheet
R$ millionSept-16 Jun-16 Sept-15
Assets 8,323 8,436 9,920 Cash 70 71 123 Interbank investments 865 836 445 Securities 2,867 2,893 3,451 Interbank accounts 0 1 1 Lending operations 3,655 3,746 4,775 (-) Provisions for loan losses (223) (223) (198) Net lending operations 3,432 3,523 4,577 Other receivables 971 994 1,310 Property and equipments 118 119 13
Investments 108 108 - Property and equipment in use 10 10 12 Intangible 1 1 1
Liabilities 7,171 7,270 8,739 Deposits 2,641 1,976 1,846 Money market funding 478 612 756 Funds from acceptance and securities issued 1,398 1,913 2,036 Interbank and Interbranch accounts 27 11 13 Borrowings and onlendings 1,487 1,542 3,040 Derivative financial instruments 813 709 264 Other liabilities 261 441 719 Deferred Results 66 67 65
Shareholders' equity 1,152 1,165 1,181
Liabilities and shareholders' equity 8,323 8,436 9,920
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Managerial Income Statement(overhedge effect and provisions reclassified)
R$ million
3Q16 2Q16 1Q16 4Q15 3Q15 9M16 9M15
Income from financial intermediation 236 71 94 215 758 401 1,570 Lending transactions 116 114 122 146 178 352 555 Securities transactions 99 79 77 93 81 254 232 Derivative financial instruments 12 (67) (72) (18) 488 (127) 709 Foreign exchange transactions 10 (55) (33) (7) 11 (78) 75
Expenses with financial intermediation (224) (74) (87) (183) (758) (385) (1,510)Funding transactions (180) (101) (111) (163) (322) (392) (713)Borrowings and onlendings (26) 59 50 6 (380) 83 (644)Provision for loan losses (17) (33) (26) (26) (56) (77) (154)
Gross income from financial intermediation 13 (4) 6 32 (0) 16 60
Other operating (expenses) income (25) (23) (24) (37) (53) (71) (121)Fee income 19 15 16 18 26 50 72 Personnel expenses (21) (21) (20) (23) (22) (62) (66)Other administrative expenses (17) (16) (16) (19) (20) (49) (55)Tax expenses (3) (5) (7) (6) (2) (14) (16)Other operating income 3 15 10 2 2 28 14 Other operating expenses (6) (11) (8) (7) (36) (25) (70)
Operating income (12) (26) (17) (5) (53) (56) (61)
Non-operating income 3 3 9 3 (1) 15 5
Income before taxes and profit sharing (10) (23) (9) (2) (53) (41) (56)
Income tax and social contribution 7 18 22 22 73 47 111 Profit sharing (4) (2) (5) (9) (10) (11) (24)Net income (7) (7) 8 10 10 (5) 31
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Income Statement
R$ million3Q16 2Q16 3Q15 9M16 9M15
Income from financial intermediation 239 92 703 463 1,491 Lending transactions 116 114 178 352 555 Securities transactions 99 79 81 254 232 Derivative financial instruments 14 (46) 433 (65) 629 Foreign exchange transactions 10 (55) 11 (78) 75
Expenses with financial intermediation (224) (74) (758) (385) (1,443)Funding transactions (180) (101) (322) (392) (713)Borrowings and onlendings (26) 59 (380) 83 (644)Provision for loan losses (17) (33) (56) (77) (87)
Gross income from financial intermediation 15 18 (55) 78 48
Other operating (expenses) income (25) (23) (53) (71) (188)Fee income 19 15 26 50 72 Personnel expenses (21) (21) (22) (62) (66)Other administrative expenses (17) (16) (20) (49) (55)Tax expenses (3) (5) (2) (14) (16)Other operating income 3 15 2 28 14 Other operating expenses (6) (11) (36) (25) (137)
Operating income (10) (5) (108) 6 (140)
Non-operating income 3 3 (1) 15 5
Income before taxes and profit sharing (7) (1) (108) 21 (135)
Income tax and social contribution 4 (4) 128 (15) 190 Profit sharing (4) (2) (10) (11) (24)Net income (7) (7) 10 (5) 31
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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 such are 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 tax legislation) and therefore are subject to change without prior notice.
Investor Relations
Norberto Zaiet JuniorCEO
João BritoCFO
Raquel Varela BastosHead of Investor Relations, Funding & Distribution, Marketing & Press
Luiz MaximoInvestor Relations Coordinator
Kianne PaganiniInvestor Relations Analyst
Phone: (55 11) 3372-5343