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RESULTS PRESENTATION 1Q14
14

BI&P- Indusval - 1Q14 Results Presentation REAL

Aug 23, 2014

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Investor Relations

Banco BI&P Results Presentation - 1st Quarter 2014
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Page 1: BI&P- Indusval - 1Q14 Results Presentation REAL

RESULTS PRESENTATION

1Q14

Page 2: BI&P- Indusval - 1Q14 Results Presentation REAL

Disclaimer

This presentation may contain references and statements representing future expectations, plans

of growth and future strategies of BI&P. 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, and

competitive, government and technological aspects that may influence both the operations of BI&P

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.bip.b.br/ir)

and the making of your own appraisal.

2

Page 3: BI&P- Indusval - 1Q14 Results Presentation REAL

Highlights

3

Expanded Credit Portfolio totaled R$3.9 billion, +1.5% in the quarter and +28.8% in twelve months.

Loans rated between AA and B corresponded to 90% of the expanded credit portfolio, compared to 81%

in March 2013. Of the loans granted in the quarter, 99% were rated between AA and B, reflecting the

quality of the credit portfolio being built since April 2011.

The Emerging companies and Corporate segments accounted for 43% and 56%, respectively, of the

expanded credit portfolio.

The managerial expense with allowance for loan losses (ALL) annualized in 1Q14 was 1.10% of the

expanded credit portfolio (0.95% in 4Q13), in line with the conservative lending policy adopted by the

Bank. Additional allowance remained at R$23.7 million, not yet allocated.

Funding totaled R$3.9 billion and Free Cash totaled R$743.2 million at the end of 1Q14, in line with the

strategy of loan portfolio growth.

Income from services rendered and tariffs totaled R$12.9 million in the quarter, an increase of 29.7%

from the previous quarter and 94.1% from 1Q13.

The quarterly Result was a loss of R$9.9 million, mainly due to the following: (i) the effect of

discontinuance of the designation of hedge accounting, adopted in 2Q12, of operations to protect the cash

flow, which continue to be protected by hedge operations, without any cash effect, and (ii) the fact that the

investments we made during the restructuring period have still not reached equilibrium point since, given

the conservative risk adopted by us, we have still not attained the required scale through growth of the

credit portfolio and income from services rendered.

Page 4: BI&P- Indusval - 1Q14 Results Presentation REAL

3,048 3,229 3,355

3,867 3,926

Mar 13 Jun 13 Sep 13* Dec 13 Mar 14

R$

millio

n

Loans and Financing in BRL Trade Finance

Guarantees Issued (L/G and L/C) Agricultural Bonds (CPR, CDA/WA. and CDCA)

Private Credit Bonds (Debentures)

Expanded Credit Portfolio

4

Growth of 29% in twelve months

* Including credits from Banco BI&P which were assigned to Banco Intercap in 3Q13.

** Other Credits include Non-Operating Asset Sales Financing, Consumer Credit Vehicles, and Acquired Loans.

Average Exposure per Client

R$ million Dec 13 Mar 14

Corporate 9.2 10.5

Emerging Companies 3.0 2.9

52%

43%

47%

56%

1%

1%

Dec 13

Mar 14

Emerging Companies Corporate Other**

Page 5: BI&P- Indusval - 1Q14 Results Presentation REAL

Expanded Credit Portfolio Development

5

...focusing on higher quality assets.

589

773 685

817 794

Mar 13 Jun 13 Sep 13 Dec 13 Mar 14

R$

millio

n

New Transactions

3,867 3,926

794 (591)

(60) (84 )

Dec 13 Amortized

Credits

Credit

Exits

Write offs New

Operations

Mar 14

R$

millio

n

99% of the new transactions

in the last 12 months are

classified between AA and B.

Page 6: BI&P- Indusval - 1Q14 Results Presentation REAL

Loans &

Financing in

BRL*

55%

Trade

Finance*

11%

BNDES

Onlendings

7%

Guarantees

Issued

5%

Agricultural

Bonds

19%

Private

Credit Bonds

2%

Other

1%

Mar 14

Expanded Credit Portfolio

6

* Starting from March 2014, export credit notes (NCE) and export notes (CCE) originated by Banco Intercap are included in Loans &

Financing in BRL, as well as NCE and CCE originated by Banco BI&P are classified.

Loans &

Financing in

BRL*

56%

Trade

Finance*

14%

BNDES

Onlendings

10%

Guarantees

Issued

6%

Agricultural

Bonds

12%

Private

Credit Bonds

1% Other

1%

Mar 13

13%

10%

12%

29%

26%

26%

27%

24%

25%

31%

39%

36%

Mar 13

Dec 13

Mar 14

Client Concentration

Top 10 11 - 60 largest 61 - 160 largest Other

The reduction of concentration is one of

the results of the new credit policy

adopted since April 2011.

Page 7: BI&P- Indusval - 1Q14 Results Presentation REAL

10.6%

1.8%

1.8%

2.5%

2.8%

3.0%

3.1%

3.2%

3.3%

3.4%

3.9%

4.0%

4.0%

5.9%

6.5%

6.8%

7.3%

9.2%

17.1%

Other industries (less than 1.4%)

Raw Materials

Machinery and Equipments

Education

Power Generation & Distribution

Publishing and Advertising

Textile, Leather and Confection

Commerce - Retail & Wholesale

Pulp & Paper

Metal Industry

Chemical & Pharmaceutical

Infrastructure

Transport and Logistics

Automotive

Food & Beverage

Oil, Biofuel & Sugar

Livestock

Real Estate

Agriculture

March 2013

Expanded Credit Portfolio

7

Relevant exposure in agriculture

14.2%

1.9%

1.9%

2.1%

2.1%

2.7%

3.2%

3.9%

3.9%

3.9%

4.0%

5.0%

6.8%

8.7%

13.7%

22.3%

Other industries (less than 1.4%)

International Commerce

Raw Materials

Chemical & Pharmaceutical

Textile, Leather and Confection

Metal Industry

Commerce - Retail & Wholesale

Infrastructure

Transport and Logistics

Livestock

Power Generation & Distribution

Automotive

Food & Beverage

Oil, Biofuel & Sugar

Real Estate

Agriculture

March 2014

Page 8: BI&P- Indusval - 1Q14 Results Presentation REAL

6.6

8.8 10.3 9.9

12.9

1Q13 2Q13 3Q13 4Q13 1Q14

R$

millio

n

Income from services rendered and Tariffs

NIM and Fees Revenue

8

5.42% 3.20%

5.60% 4.96% 3.23%

4.05% 4.06% 4.08% 3.99% 3.94%

1Q13 2Q13 3Q13 4Q13 1Q14

Net Interest Margin (NIM)

Adjusted NIM* Managerial NIM with Clients **

* NIM without effects of discontinuance of designation of hedge accounting and discounts.

** Includes revenues from agro bonds (CPR).

Page 9: BI&P- Indusval - 1Q14 Results Presentation REAL

* New Credit Policy: adopted since April 2011.

Expanded Credit Portfolio Quality

9

99% of loans granted in the quarter were rated from AA to B

Credits rated between D and H totaled R$271,1

million at the end of 1Q14:

R$192.9 million (71% of the expanded credit

portfolio between D-H) in normal payment

course,

Only R$78.3 million overdue +60 days. 1%

3%

2%

48%

51%

52%

31%

33%

35%

11%

4%

3%

7%

9%

7%

Mar 13

Dec 13

Mar 14

AA A B C D - H

89.8%

87.1%

81.3%

AA

2%

AA

2%

AA

5%

A

52%

A

58%

A

8%

B

35%

B

36% B

26%

C

3% C

2%

C

15% D - H

7% D - H

2%

D - H

45%

New Credit Policy* Clients

Expanded Loan Portfolio

Previous Credit Policy Clients

Expanded Loan Portfolio 1Q14

Page 10: BI&P- Indusval - 1Q14 Results Presentation REAL

Credit Portfolio Quality

1.13%

0.75% 0.95%

1.10%

Jun 13 Sep 13 Dec 13 Mar 14

Managerial ALL Expense 1

1 Managerial Expense with Allowance for Loan Losses (ALL) = ALL expenses + Discounts granted upon settlement of loans – Revenues

from recovery of loans written off. | * New Credit Policy: adopted since April 2011.

8.5% 8.2%

12.4%

8.1%

15.0%

2.2% 2.1% 2.6% 1.9% 2.6%

0.4% 0.5% 0.6% 0.3% 0.4%

Mar 13 Jun 13 Sep 13 Dec 13 Mar 14

NPL 90 days / Credit Portfolio

Clients Previous Credit Policy Total

Clients New Credit Policy*

9.4% 10.6%

14.0%

10.3%

15.2%

2.3% 2.6% 2.9% 2.3% 2.6%

0.4% 0.5% 0.6% 0.3% 0.5%

Mar 13 Jun 13 Sep 13 Dec 13 Mar 14

NPL 60 days / Credit Portfolio

Clients Previous Credit Policy Total

Clients New Credit Policy*

Managerial ALL Expense1 in 1Q14,

annualized, was 1.10% of the

Expanded Credit Portfolio

10

Page 11: BI&P- Indusval - 1Q14 Results Presentation REAL

Time

Deposits

(CDB)

26%

DPGE I

29%

LCA

15%

LF & LCI

2% Interbank &

Demand

Deposits

5%

Onlendings

10%

Foreign

Borrowings

13%

Mar 13

3,170 3,142 3,082

3,893 3,930

Mar 13 Jun 13 Sep 13 Dec 13 Mar 14

R$

millio

n

In Local Currency in Foreign Currency

Funding

11

Product mix helps with cost reduction

Time

Deposits

(CDB)

21%

DPGE I

26%

DPGE II

7%

LCA

25%

LF & LCI

4% Interbank &

Demand

Deposits

1%

Onlendings

7%

Foreign

Borrowings

9%

Mar 14

LCA and LCI account for

28% of funding volume

Agribusiness letters of credit, Real estate letters of credit and Bank notes are represented, respectively, by LCA, LCI and LF.

Insured time deposits are represented by DPGE. DPGE I and II are two types of DPGE and differ in cost and framework.

Page 12: BI&P- Indusval - 1Q14 Results Presentation REAL

Profitability

12

The quarterly result was mainly due to:

• the effect of discontinuance of the designation of hedge accounting, adopted in 2Q12, of operations to protect the

cash flow, which continue to be protected by hedge operations, without any cash effect, and

• the fact that the investments we made during the restructuring period have still not reached equilibrium point since,

given the conservative risk adopted by us, we have still not attained the required scale through growth of the credit

portfolio and income from services rendered.

2.0

1Q13 2Q13 3Q13 4Q13 1Q14

R$

millio

n

Net Result

-9.9 -20.6

-10.0

-91.4

Page 13: BI&P- Indusval - 1Q14 Results Presentation REAL

498.4 569.6 574.5

674.2 667.1

Mar 13 Jun 13 Sep 13 Dec 13 Mar 14

R$

millio

n

Shareholders’ Equity

14.2% 14.6% 14.5% 14.8% 13.7%

Mar 13 Jun 13 Sep 13 Dec 13 Mar 14

Basel Index (Tier I)

6.1x 5.7x 5.7x 5.7x 5.9x

Mar 13 jun/13 Sep 13 Dec 13 Mar 14

Leverage

Expanded Credit Portfolio / Equity

Capital Structure and Ratings

13

Agency Rating Last

Report

Standard

& Poor’s

Global: BB-/Stable/ B

National: brA/Stable/brA-2 Apr 14

Moody’s Global: Ba3/Negative/Not Prime

National: A2.br/Negative/BR-1 Jul 13

Fitch

Ratings National: BBB/Stable/F3 Sep 13

RiskBank Index: 9,65

Low Risk Short Term Apr 14

Page 14: BI&P- Indusval - 1Q14 Results Presentation REAL