1/18 EARNINGS RELEASE 4 th QUARTER 2014 BI&P - Banco Indusval & Partners is a commercial bank with more than 45 years of experience in the financial market, focusing on local and foreign currency, fixed income and corporate finance for companies. BI&P relies on a network of 7 branches and 2 banking service posts strategically located in economically relevant Brazilian regions, besides an offshore branch in Cayman Islands, its brokerage house Guide Investimentos operating at the São Paulo Stock, Commodities and Futures Exchange - BM&FBOVESPA and BI&P Cereais, acquired in April 2011, which originates agricultural bonds. Highlights Highlights Highlights Highlights Expanded Credit Portfolio Expanded Credit Portfolio Expanded Credit Portfolio Expanded Credit Portfolio totaled R$4.1 billion, growing 3.6% in the quarter and 6.9% from December 2013. Loans originated Loans originated Loans originated Loans originated in 4Q14 totaled R$1.4 billion, proof of the tremendous asset generation capacity of the commercial area. Loans rated between AA and B Loans rated between AA and B Loans rated between AA and B Loans rated between AA and B corresponded to 92% of the expanded credit portfolio (87% in December 2013). Of the loans granted in the quarter, 98% were rated between AA and B, reflecting the Bank’s focus on preserving the quality of its loan portfolio. The Emerging Companies and Corporate segments Emerging Companies and Corporate segments Emerging Companies and Corporate segments Emerging Companies and Corporate segments accounted for 62% and 38%, respectively, of the expanded credit portfolio, compared to 52% and 47%, respectively, in December 2013. Funding Funding Funding Funding totaled R$4.4 billion, up 4.8% in the quarter and 12.6% in the year. We continued to diversify the funding mix, especially through the issue of agro notes (LCA) and dispersion of the depositor base, which once again broke the record of over 11,000 depositors at the end of the quarter (4,000 in December 2013), through alliances with more than 50 brokerages and distributors, positively impacting also our funding costs. Free Cash Free Cash Free Cash Free Cash totaled R$748.6 million at the end of December 2014. Income from services rendered and Tariffs Income from services rendered and Tariffs Income from services rendered and Tariffs Income from services rendered and Tariffs totaled R$14.0 million in 4Q14 and R$56.0 million in 2014, down 8.6% in the quarter, due to lower fee income generated by the commercial banking operation, but was 94.4% higher than in 2013, mainly due to revenue from the investment banking operation, which earned fees of R$21.6 million in 2014. We announced important strategic alliances in the quarter: with Gran Viver and Cipasa in the real estate sector, and with Lojas Renner in the retail segment, which is expected to be concluded in March 2015. In December 2014, loans generated by join join join joint ventures and business associations t ventures and business associations t ventures and business associations t ventures and business associations in the agricultural and real estate sector, constituted over the last two years and which are fully operational, already accounted for 12.7% of the expanded credit portfolio, amounting to R$526.4 million. Throughout the year 2014, the investments in technology, review of processes and the strict control over expenses control over expenses control over expenses control over expenses resulted in the reductions of 17.4% in the Bank’s workforce and 5.8% in personnel expenses when compared to 2013, including more than R$8 million of severance costs. Similarly, administrative expenses in 2014 decreased 0.6% from 2013, despite the inflation rate higher than 6% in 2014. The quarterly Result Result Result Result was R$2.0 million, growing slightly from the previous quarter and with significant increase when compared to 4Q13, but far below the Bank’s potential. IDVL4: IDVL4: IDVL4: IDVL4: R$2.38 per share Closing: March 5, 2015 Outstanding Shares: 88,991,729 Market Cap: R$211.8 million Price/Book Value: 0.31 Conference Call / Webcasts Conference Call / Webcasts Conference Call / Webcasts Conference Call / Webcasts March 05 March 05 March 05 March 05, 201 , 201 , 201 , 2015 In English In English In English In English 9 a.m. (US EST) | 12 p.m. (Brasília) Connections Brazil: +55 11 3193-1001 +55 11 2820-4001 EUA: +1 786 924-6977 Code: Bank BI&P In Portuguese In Portuguese In Portuguese In Portuguese 8 a.m. (US EST) | 11 a.m. (Brasília) Number: +55 11 3193-1001 +55 11 2820-4001 Code: Bank BI&P Website Website Website Website www.bip.b.br/ir www.bip.b.br/ir www.bip.b.br/ir www.bip.b.br/ir Expanded Credit Portfolio totaled R$4.1 billion, up 3.6% in the quarter and 6.9% in the year Expanded Credit Portfolio totaled R$4.1 billion, up 3.6% in the quarter and 6.9% in the year Expanded Credit Portfolio totaled R$4.1 billion, up 3.6% in the quarter and 6.9% in the year Expanded Credit Portfolio totaled R$4.1 billion, up 3.6% in the quarter and 6.9% in the year Funding totaled R$4.4 billion, up 4.8% in the quarter and 12.6% in the year Funding totaled R$4.4 billion, up 4.8% in the quarter and 12.6% in the year Funding totaled R$4.4 billion, up 4.8% in the quarter and 12.6% in the year Funding totaled R$4.4 billion, up 4.8% in the quarter and 12.6% in the year Income from services rendered and Tariffs totaled R$14.0 million in 4Q14 and R$56.0 million in 2014, for growth Income from services rendered and Tariffs totaled R$14.0 million in 4Q14 and R$56.0 million in 2014, for growth Income from services rendered and Tariffs totaled R$14.0 million in 4Q14 and R$56.0 million in 2014, for growth Income from services rendered and Tariffs totaled R$14.0 million in 4Q14 and R$56.0 million in 2014, for growth of 94.4% from 2013, mainly driven by revenues from investment banking operations of 94.4% from 2013, mainly driven by revenues from investment banking operations of 94.4% from 2013, mainly driven by revenues from investment banking operations of 94.4% from 2013, mainly driven by revenues from investment banking operations Guide Investimentos already has Guide Investimentos already has Guide Investimentos already has Guide Investimentos already has AUM AUM AUM AUM of R$1.9 billion, growing of R$1.9 billion, growing of R$1.9 billion, growing of R$1.9 billion, growing 25% in t 25% in t 25% in t 25% in the quarter and 126% in the year he quarter and 126% in the year he quarter and 126% in the year he quarter and 126% in the year
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1/18
EARNINGS RELEASE
4th QUARTER 2014
BI&P - Banco Indusval & Partners is a commercial bank with more than 45 years of experience in the financial market, focusing on local and foreign currency, fixed
income and corporate finance for companies. BI&P relies on a network of 7 branches and 2 banking service posts strategically located in economically relevant Brazilian
regions, besides an offshore branch in Cayman Islands, its brokerage house Guide Investimentos operating at the São Paulo Stock, Commodities and Futures Exchange -
BM&FBOVESPA and BI&P Cereais, acquired in April 2011, which originates agricultural bonds.
HighlightsHighlightsHighlightsHighlights
� Expanded Credit PortfolioExpanded Credit PortfolioExpanded Credit PortfolioExpanded Credit Portfolio totaled R$4.1 billion, growing 3.6% in the quarter
and 6.9% from December 2013.
� Loans originatedLoans originatedLoans originatedLoans originated in 4Q14 totaled R$1.4 billion, proof of the tremendous asset
generation capacity of the commercial area.
� Loans rated between AA and BLoans rated between AA and BLoans rated between AA and BLoans rated between AA and B corresponded to 92% of the expanded credit
portfolio (87% in December 2013). Of the loans granted in the quarter, 98%
were rated between AA and B, reflecting the Bank’s focus on preserving the
quality of its loan portfolio.
� The Emerging Companies and Corporate segmentsEmerging Companies and Corporate segmentsEmerging Companies and Corporate segmentsEmerging Companies and Corporate segments accounted for 62% and
38%, respectively, of the expanded credit portfolio, compared to 52% and
47%, respectively, in December 2013.
� FundingFundingFundingFunding totaled R$4.4 billion, up 4.8% in the quarter and 12.6% in the year.
We continued to diversify the funding mix, especially through the issue of agro
notes (LCA) and dispersion of the depositor base, which once again broke the
record of over 11,000 depositors at the end of the quarter (4,000 in
December 2013), through alliances with more than 50 brokerages and
� Income from services rendered and TariffsIncome from services rendered and TariffsIncome from services rendered and TariffsIncome from services rendered and Tariffs totaled R$14.0 million in 4Q14
and R$56.0 million in 2014, down 8.6% in the quarter, due to lower fee
income generated by the commercial banking operation, but was 94.4%
higher than in 2013, mainly due to revenue from the investment banking
operation, which earned fees of R$21.6 million in 2014.
� We announced important strategic alliances in the quarter: with Gran Viver
and Cipasa in the real estate sector, and with Lojas Renner in the retail
segment, which is expected to be concluded in March 2015. In December
2014, loans generated by joinjoinjoinjoint ventures and business associationst ventures and business associationst ventures and business associationst ventures and business associations in the
agricultural and real estate sector, constituted over the last two years and
which are fully operational, already accounted for 12.7% of the expanded
credit portfolio, amounting to R$526.4 million.
� Throughout the year 2014, the investments in technology, review of
processes and the strict control over expensescontrol over expensescontrol over expensescontrol over expenses resulted in the reductions of
17.4% in the Bank’s workforce and 5.8% in personnel expenses when
compared to 2013, including more than R$8 million of severance costs.
Similarly, administrative expenses in 2014 decreased 0.6% from 2013,
despite the inflation rate higher than 6% in 2014.
� The quarterly ResultResultResultResult was R$2.0 million, growing slightly from the previous
quarter and with significant increase when compared to 4Q13, but far below
Expanded Credit Portfolio totaled R$4.1 billion, up 3.6% in the quarter and 6.9% in the yearExpanded Credit Portfolio totaled R$4.1 billion, up 3.6% in the quarter and 6.9% in the yearExpanded Credit Portfolio totaled R$4.1 billion, up 3.6% in the quarter and 6.9% in the yearExpanded Credit Portfolio totaled R$4.1 billion, up 3.6% in the quarter and 6.9% in the year
Funding totaled R$4.4 billion, up 4.8% in the quarter and 12.6% in the yearFunding totaled R$4.4 billion, up 4.8% in the quarter and 12.6% in the yearFunding totaled R$4.4 billion, up 4.8% in the quarter and 12.6% in the yearFunding totaled R$4.4 billion, up 4.8% in the quarter and 12.6% in the year
Income from services rendered and Tariffs totaled R$14.0 million in 4Q14 and R$56.0 million in 2014, for growth Income from services rendered and Tariffs totaled R$14.0 million in 4Q14 and R$56.0 million in 2014, for growth Income from services rendered and Tariffs totaled R$14.0 million in 4Q14 and R$56.0 million in 2014, for growth Income from services rendered and Tariffs totaled R$14.0 million in 4Q14 and R$56.0 million in 2014, for growth
of 94.4% from 2013, mainly driven by revenues from investment banking operations of 94.4% from 2013, mainly driven by revenues from investment banking operations of 94.4% from 2013, mainly driven by revenues from investment banking operations of 94.4% from 2013, mainly driven by revenues from investment banking operations
Guide Investimentos already has Guide Investimentos already has Guide Investimentos already has Guide Investimentos already has AUMAUMAUMAUM of R$1.9 billion, growing of R$1.9 billion, growing of R$1.9 billion, growing of R$1.9 billion, growing 25% in t25% in t25% in t25% in the quarter and 126% in the yearhe quarter and 126% in the yearhe quarter and 126% in the yearhe quarter and 126% in the year
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4th Quarter 2014
SummarySummarySummarySummary
Message from the Management ............................................................................................................................................ 3
Capital Adequacy .................................................................................................................................................................. 13
Capital Markets .................................................................................................................................................................... 14
Income Statement ................................................................................................................................................................ 18
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4th Quarter 2014
Message from the ManagementMessage from the ManagementMessage from the ManagementMessage from the Management
During 4Q14, we prepared ourselves for a scenario of sharper economic slowdown in the country over the coming
months by maintaining our focus on generating quality assets, especially through our fully operational joint ventures in
the agricultural and real estate sectors, which have played a pivotal role in driving the healthy growth of our portfolio,
since we benefit from the expertise of our partners in the sectors and regions where they operate while sharing the
credit risk in the operations originated in these joint ventures and associations. Expanded Credit Portfolio Expanded Credit Portfolio Expanded Credit Portfolio Expanded Credit Portfolio totaled totaled totaled totaled
R$4.1 billion, growing 3.6% in the quarter and 6.9% from December 2013R$4.1 billion, growing 3.6% in the quarter and 6.9% from December 2013R$4.1 billion, growing 3.6% in the quarter and 6.9% from December 2013R$4.1 billion, growing 3.6% in the quarter and 6.9% from December 2013. As proof of our tremendous asset
generation capacity, we originated loans of R$1.4 billion in the quarter, of which R$692 million were in loan renewals
and R$731 million in fresh loans, 98% of which were rated between AA and B.
At the end of the quarter, the Corporate segment accounted for 62.0% (61.6% in September 2014 and 52.2% in
December 2013) of the expanded credit portfolio, compared to 37.6% (38.0% and 47.0% in the respective comparison
periods) of the Emerging Companies segment, which is in line with our more conservative approach to lending. Loans
overdue more than 60 days (NPL 60) slightly increased in the quarter to close at 2.1% of the loan portfolio, as against
2.0% in 3Q14. ManagerialManagerialManagerialManagerial expenses with allowance for loan losses in the last 12 months correspondexpenses with allowance for loan losses in the last 12 months correspondexpenses with allowance for loan losses in the last 12 months correspondexpenses with allowance for loan losses in the last 12 months corresponded to 0.97% of the ed to 0.97% of the ed to 0.97% of the ed to 0.97% of the
expanded credit portfolio, in line with Management’s expectationsexpanded credit portfolio, in line with Management’s expectationsexpanded credit portfolio, in line with Management’s expectationsexpanded credit portfolio, in line with Management’s expectations and lower than 1.45% in September 2014, due to
increased loan recoveries in the quarter. Our bet to agribusiness segment has proved successful since it has lower
default rates and higher cross-selling opportunities for our other products. Total deposits, which include agro notes Total deposits, which include agro notes Total deposits, which include agro notes Total deposits, which include agro notes
(LCA), real estate notes (LCI), and bank notes (LF), amounted to R$4.0 billion, growing 6.9% in the quarter and 24.6% (LCA), real estate notes (LCI), and bank notes (LF), amounted to R$4.0 billion, growing 6.9% in the quarter and 24.6% (LCA), real estate notes (LCI), and bank notes (LF), amounted to R$4.0 billion, growing 6.9% in the quarter and 24.6% (LCA), real estate notes (LCI), and bank notes (LF), amounted to R$4.0 billion, growing 6.9% in the quarter and 24.6%
from December 2013from December 2013from December 2013from December 2013. We continued to diversify the funding mix, especially through the issue of LCAs, which increased
12.5% in the quarter and 109.3% in 12 months, and dispersion of the depositor base, which reached over 11,000
depositors at the end of the quarter, through alliances with more than 50 brokerages and distributors. As a result of all
this, in relation to the interbank rate (CDI), cost of funding continued to fall and reached the lowest in our history this
quarter.
Financial intermediation result before managerial expense with allowance for loan losses totaled R$41.8 million,
29.1% higher than in 3Q14 and 1.8% lower than in 4Q13, with the quarterly increase mainly due to the reversal of the
result from the hedge of trade finance operations, which caused a negative impact in the previous quarter and is
booked under income from derivative financial instruments, with no cash effect.
Income from services rendered and TariffsIncome from services rendered and TariffsIncome from services rendered and TariffsIncome from services rendered and Tariffs continued to perform well, totaling R$14.0 million in 4Q14, down 8.6% in
the quarter, due to lower fee income from the commercial banking operation, but totaling R$56.0 million in 2014,
94.4% higher than in 201394.4% higher than in 201394.4% higher than in 201394.4% higher than in 2013, mainly due to revenue from the investment banking operation, which earned fees of R$5.3
million in 4Q14 and R$21.6 million in 4Q14 (R$2.3 million in 2013). M&A and fixed income operations totaling nearly
R$2.0 billion were concluded in the quarter and the number of active proposals/mandates has increased constantly -
we currently have 42 ongoing mandates. In 4Q14, we wish to highlight the acquisition by our client Lactalis of the dairy
division of BRF in continuation of the acquisition of dairy assets of LBR, which is also advised by BI&P; the sale of
control of our client Servtec in the full divestment of its Facilities division to the GPS Group; and advisory services for
Camará Shopping in raising funds for the development of a shopping mall in Camaragibe in the state of Pernambuco.
In 4Q14, we continued making adjustments to our structure, which resulted in a reduction of 6.9% in the Bank’s
workforce in the quarter and of 17.4% in relation to the end of 2013. Personnel expenses decreased 16.8% from
4Q13, proving the effectiveness of the Bank’s cost cutting measures. Similarly, administrative expenses decreased
16.8% from 4Q13 due to our continuous focus on reducing costs, despite the inflation rate higher than 6% in 2014. We
started 2015 with a leaner and more efficient structure, which will certainly result in further decline of these expenses
when compared to those in effect in 2014. We are continuing our investments in Guide, which resulted in
administrative expenses increasing 5.6% in the quarter and 101.6% from 4Q13, while personnel expenses increased
52.9% from 4Q13 but decreased 3.2% in the quarter.
Guide Investimentos, our investment and distribution arm, is one of the biggest distributors of our funding products and
continues to grow significantly: 3,000 new individual accounts were opened in the year, which closed with 5,000
investors and assets under management of R$1.9 billion (compared to R$1.5 billion in September 2014 and R$823
million in December 2013). In 2014, Guide acquired the client portfolios of brokerages Omar Camargo, in the state of
Paraná, and Geraldo Corrêa, in the state of Minas Gerais, as well as Bullmark, a financial consulting firm focused on
asset management services for high net worth individual investors. We continue to study new partnerships with
independent agents from all over Brazil, in line with Guide’s strategy of expanding its client base and geographical
presence throughout the country. Note that Guide ended 2014 as one of the top 10 brokerages in volume traded in the
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4th Quarter 2014
coffee and cattle segments on the BM&F commodities exchange and in the forward equity market of the Bovespa stock
exchange.
The quarterly ResultResultResultResult was R$2.0 million, growing slightly from the previous quarter and with significant increase when
compared to 4Q13, but much below the Bank’s potential. Note that since 2011, we have invested in building an
agricultural franchiseagricultural franchiseagricultural franchiseagricultural franchise and this strategy has proved successful, both from the fact that this is a strong and important
sector of the country’s economy and from the opportunity to earn fee income and grow the portfolio. As a result, Banco
BI&P is today recognized as a benchmark among banks in this sector.
The financial and operating information presented in this report are based on consolidated financials prepared in
millions of Real (local currency), according to Brazilian Central Bank rules, except were otherwise stated.
Since 2Q14, Banco BI&P has presented its results through the Managerial Income Statement, which is based on
reclassifications of accounting Income Statement and is provided to help analyses.
MANAGERIAL INCOME STATEMENTMANAGERIAL INCOME STATEMENTMANAGERIAL INCOME STATEMENTMANAGERIAL INCOME STATEMENT 4444QQQQ14141414 3Q3Q3Q3Q14141414 4444QQQQ14/314/314/314/3QQQQ14141414 4Q4Q4Q4Q13131313 4444QQQQ14/414/414/414/4QQQQ13131313 2014201420142014 2013201320132013 2014/20132014/20132014/20132014/2013
1 Excluding the effects of (i) recoveries of loans written off, and (ii) discounts granted upon settlement of loans in the period.
2 Excludes the effect of discontinuance of the designation of hedge accounting in 2Q12. This effect is included in Non-Recurring Operating Expenses.
3 Includes expenses related to financial intermediation, such as (i) expenses related to the joint venture C&BI, (ii) commission paid to the distributors
of our funding products, especially LCAs and LCIs, which are classified under administrative expenses. Excludes the accounting heading Result of
Sale/Transfer of Financial Assets resulting from the shareholders’ agreement at the time of acquisition of Banco Intercap. This account is
considered while calculating the managerial expense with allowance for loan losses.
4 Managerial expense with allowance for loan losses is calculated by adding to the expense with allowance for loan losses, the effects of (i) the
recovery of loans written off and (ii) discounts granted upon settlement of loans in the period. In 2Q14 it also excludes the impacts of the
shareholders’ agreement at the time of acquisition of Banco Intercap in the Income Statement: (i) from the accounting heading Result of
Sale/Transfer of Financial Assets; and (ii) from other operating expenses and income. In 3Q14 it also excludes the impacts of other credit
assignments in the Income Statement in the accounting heading Result of Sale/Transfer of Financial Assets.
5 Includes expenses booked under administrative expenses related to income from services rendered.
6 Excludes (i) non-recurring operating expenses, (ii) expenses related to financial intermediation, and (iii) expenses related to income from services
rendered.
7 Result of the sum of (i) Other operating income and expenses, (ii) taxes and (iii) Result from affiliated companies. Excludes other operating income
and expenses resulting from the shareholders’ agreement at the time of acquisition of Banco Intercap.
n.c. = not comparable (percentage above 300% or below -300%, or number divided by zero).
Efficiency Ratio BI&P group w/o Guide 87.7% 88.2% -0.5 p.p. 98.6% -10.9 p.p. 86.3% 100.2% -13.9 p.p.
Other InformationOther InformationOther InformationOther Information 4444QQQQ14141414 3Q3Q3Q3Q14141414 4444QQQQ14/314/314/314/3QQQQ14141414 4Q4Q4Q4Q13131313 4444QQQQ14/414/414/414/4QQQQ13131313
Number of Corporate Clients 1,198 973 23.1% 1,063 12.7%
Number of Employees 405 427 -5.2% 443 -8.6%
Banco BI&P employees3 309 332 -6.9% 374 -17.4%
Guide Investimentos 96 95 1.1% 69 39.1%
1 Including Guarantees issued, Private Credit Bonds (PNs and Debentures) and Agro Securities (CDA/WA and CPR).
2 Excluding Agro Securities (CPRs and CDA/WA) and Private Credit Bonds (PNs and debentures) for trading.
3 Including BI&P Cereais.
n.c. = not comparable (percentage above 300% or below -300%, or number divided by zero).
Financial intermediation result before managerial expense with allowance for loan losses totaled R$41.8 million, 29.1%
higher than in 3Q13, mainly due to the reversal of the result from the hedge of trade finance operations, which caused a
negative impact in the previous quarter and is booked under income from derivative financial instruments, with no cash
effect.
Managerial expenses with allowance for loan losses in the last 12 months corresponded to 0.97% of the expanded credit
portfolio (1.05% in 3Q14), lower than Management’s expectations. The decline in the ratio was due to higher loan
recoveries in the quarter, which totaled R$14.0 million, as against R$2.1 million in 3Q14.
The quarterly Result was R$2.0 million, growing slightly from the previous quarter and with significant increase when
compared to 4Q13, but much below the Bank’s potential.
Financial Intermediation ResultFinancial Intermediation ResultFinancial Intermediation ResultFinancial Intermediation Result
before Allowance for Loan Lossesbefore Allowance for Loan Lossesbefore Allowance for Loan Lossesbefore Allowance for Loan Losses Net ResultNet ResultNet ResultNet Result
Gross Result from Financial Intermediation before ALLGross Result from Financial Intermediation before ALLGross Result from Financial Intermediation before ALLGross Result from Financial Intermediation before ALL 41.8 41.8 41.8 41.8 32.3 32.3 32.3 32.3 29.1%29.1%29.1%29.1% 42.5 42.5 42.5 42.5 ----1.8%1.8%1.8%1.8% 146.6 146.6 146.6 146.6 150.3 150.3 150.3 150.3 ----2.5%2.5%2.5%2.5%
Gross Result from Financial IntermediationGross Result from Financial IntermediationGross Result from Financial IntermediationGross Result from Financial Intermediation 33.2 33.2 33.2 33.2 19.1 19.1 19.1 19.1 73.5%73.5%73.5%73.5% 29.0 29.0 29.0 29.0 14.3%14.3%14.3%14.3% 110.6 110.6 110.6 110.6 (13.5)(13.5)(13.5)(13.5) n.c.n.c.n.c.n.c.
Managerial NIM with ClientsManagerial NIM with ClientsManagerial NIM with ClientsManagerial NIM with Clients 4444....14%14%14%14% 4444....12%12%12%12% 0000....02 p.p.02 p.p.02 p.p.02 p.p. 3333....99%99%99%99% 0000....15 p.p.15 p.p.15 p.p.15 p.p. 4444....09%09%09%09% 4444....04%04%04%04% 0000....00005555 p.p.p.p.p.p.p.p.
1 Repos with equivalent volumes, tenors and rates both in assets and liabilities.
EfficiencyEfficiencyEfficiencyEfficiency
During the course of 2014, we exercised strict control over both personnel and administrative expenses at the Bank. In
4Q14, the workforce was reduced by 6.9% in the quarter and 17.4% from December 2013, while personnel expenses
increased 8.3% in the quarter due to the effects of the collective bargaining agreement in the sector, and decreased
16.8% from 4Q13, demonstrating the effectiveness of the efforts employed. Similarly, administrative expenses
increased 5.0% from 3Q14, mainly due to loan recovery expenses, yet decreased 16.8% from 4Q13.
Efficiency Ratio w/o Guide InvestimentosEfficiency Ratio w/o Guide InvestimentosEfficiency Ratio w/o Guide InvestimentosEfficiency Ratio w/o Guide Investimentos 4Q144Q144Q144Q14 3Q143Q143Q143Q14 4Q14/3Q144Q14/3Q144Q14/3Q144Q14/3Q14 4Q134Q134Q134Q13 4Q14/4Q134Q14/4Q134Q14/4Q134Q14/4Q13 2014201420142014 2013201320132013 2014/20132014/20132014/20132014/2013
Income from Services Rendered 9.8 10.9 -10.3% 4.7 109.8% 41.3 17.2 140.1%
Other Net Operating Income (2.6) 1.1 n.c. 1.8 -244.7% 4.6 1.0 n.c.
B. Total Operating Income B. Total Operating Income B. Total Operating Income B. Total Operating Income 45.0 45.0 45.0 45.0 42.8 42.8 42.8 42.8 5.1%5.1%5.1%5.1% 46.9 46.9 46.9 46.9 ----4.2%4.2%4.2%4.2% 183.5 183.5 183.5 183.5 163.7 163.7 163.7 163.7 12.1%12.1%12.1%12.1%
Efficiency Ratio (A/B)Efficiency Ratio (A/B)Efficiency Ratio (A/B)Efficiency Ratio (A/B) 87.8%87.8%87.8%87.8% 88.2%88.2%88.2%88.2% ----0.4 p.p.0.4 p.p.0.4 p.p.0.4 p.p. 98.6%98.6%98.6%98.6% ----10.7 p.p.10.7 p.p.10.7 p.p.10.7 p.p. 86.3%86.3%86.3%86.3% 100.2%100.2%100.2%100.2% ----13.9 p.p.13.9 p.p.13.9 p.p.13.9 p.p.
The efficiency ratio of the group, including Guide Investimentos, was higher than the previous ratio because of the
investments made in recent quarters at Guide on account its current phase of structuring and growth.
Income from Services Rendered 14.0 15.3 -8.6% 8.0 75.4% 56.0 28.8 94.4%
Other Net Operating Income (2.7) 1.1 n.c. 1.8 -249.0% 4.6 1.1 n.c.
B. Total Operating Income B. Total Operating Income B. Total Operating Income B. Total Operating Income 53.0 53.0 53.0 53.0 48.8 48.8 48.8 48.8 8.8%8.8%8.8%8.8% 52.3 52.3 52.3 52.3 1.3%1.3%1.3%1.3% 207.2 207.2 207.2 207.2 180.2 180.2 180.2 180.2 14.9%14.9%14.9%14.9%
Efficiency Ratio (A/B)Efficiency Ratio (A/B)Efficiency Ratio (A/B)Efficiency Ratio (A/B) 92.8%92.8%92.8%92.8% 97.4%97.4%97.4%97.4% ----4.6 p.p.4.6 p.p.4.6 p.p.4.6 p.p. 99.0%99.0%99.0%99.0% ----6.2 p.p.6.2 p.p.6.2 p.p.6.2 p.p. 93.5%93.5%93.5%93.5% 102.5%102.5%102.5%102.5% ----9.0 p.p.9.0 p.p.9.0 p.p.9.0 p.p.
* Net of other operating expenses to eliminate the effects of the revenues and costs of the BI&P Cerais operation.
1 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. 2 The Other segment basically consists of Consumer Credit operations for Used Vehicles and financing of non-operating assets.
The Corporate segment (companies with annual revenues of between R$500 million and R$3 billion) accounted for
62% of the expanded credit portfolio while the Emerging Companies segment (companies with annual revenues of
between R$200 million and R$500 million) accounted for 38%, due to the more conservative approach to lending
by by by by SegmentSegmentSegmentSegment Expanded Credit Portfolio by Expanded Credit Portfolio by Expanded Credit Portfolio by Expanded Credit Portfolio by
Quality of Expanded Credit PortfolioQuality of Expanded Credit PortfolioQuality of Expanded Credit PortfolioQuality of Expanded Credit Portfolio
In line with the credit policy being adopted since April 2011, we maintained our focus on lending to clients with better
credit standing, which is evident from the high percentage of loans rated between AA and B in 4Q14, which
represented 98% of total lending in the period. The balance of loans classified in the low risk categories (AA to B)
ended the quarter at 92.1% of total loan operations (compared to 90.8% and 87.1% respectively, at the end of 3Q14
and 4Q13), as the following chart shows.
Expanded Credit Portfolio by RatingExpanded Credit Portfolio by RatingExpanded Credit Portfolio by RatingExpanded Credit Portfolio by Rating Coverage RatioCoverage RatioCoverage RatioCoverage Ratio
The increase in operations rated AA is due to collateralized operations in Brazilian real and foreign currencies, which
were provisioned for starting from December 2014. This provision is booked in the Income Statement under the item
Other Operating Expense in the account Expenses with Contingencies in Recourses (Guarantees).
Of the R$193.2 million rated between D and H, R$131.7 million, or 68%, consists of loans whose payments are regular.
The default rate on loans overdue more than 60 days (NPL 60 days) increased slightly by 0.1 p.p. in the quarter but fell
0.2 p.p. in 12 months. Loans overdue more than 90 days (NPL 90) increased 0.2 p.p. in the quarter but fell 0.2 p.p. in
relation to December 2013.
Default by segmentDefault by segmentDefault by segmentDefault by segment 4444Q14Q14Q14Q14 3333Q14Q14Q14Q14
> 60 days> 60 days> 60 days> 60 days > 90 days> 90 days> 90 days> 90 days
TOTAL TOTAL TOTAL TOTAL 2,988.82,988.82,988.82,988.8 2,951.02,951.02,951.02,951.0 61.561.561.561.5 2.1%2.1%2.1%2.1% 60.260.260.260.2 2.0%2.0%2.0%2.0% 50.650.650.650.6 1.7%1.7%1.7%1.7% 44.844.844.844.8 1.5%1.5%1.5%1.5%
Allowance for Loan Losses (ALL) 101.5 94.0
Managerial expenses with allowance for loan losses in the last 12 months corresponded to 0.97% of the expanded credit
portfolio (1.05% in 3Q14), in line with Management’s expectations. The drop in the percentage in relation to the previous
quarter was mainly driven by loan recoveries, which totaled R$14 million in the quarter, as against R$2 million in 3Q14.
North1%
Northeast7%
Midwest25%
Southeast52%
South15%
12.5%
1.3%
1.6%
2.2%
2.9%
3.1%
3.3%
3.5%
3.7%
4.0%
4.9%
5.2%
6.0%
8.6%
11.8%
25.6%
Other Sectors (less than 1.3%)
Chemical & Pharmaceutical
Financial Activities
Power Generation & Distribution
Infrastructure
International Commerce
Raw Materials
Transport and Logistics
Textile, Leather and Confection
Commerce - Retail & Wholesale
Automotive
Livestock
Food & Beverage
Oil, Biofuel & Sugar
Real Estate
Agriculture
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6666 EARNINGS RELEASE
4th Quarter 2014
FundingFundingFundingFunding
Funding totaled R$4.4 billion in December 2014, up 4.8% in the quarter and 12.6% in 12 months. The leading funding
sources were agro notes (LCA), which increased 12.5% in the quarter and 109.3% from December 2013, and real
estate notes (LCI), which increased 60.2% and 63.5% in the respective comparison periods. Also worth highlighting was
the diversification of the depositor base, which totaled more than 11,000 at the end of the quarter, an increase of 22%
from September 2014 and 177% from December 2013. As a result of all this, in relation to the interbank rate (CDI),
cost of funding continued to fall and reached the lowest in our history this quarter.
Total FundingTotal FundingTotal FundingTotal Funding 4Q144Q144Q144Q14 3Q143Q143Q143Q14 4Q14/3Q144Q14/3Q144Q14/3Q144Q14/3Q14 4Q134Q134Q134Q13 4Q14/4Q134Q14/4Q134Q14/4Q134Q14/4Q13
By TypeBy TypeBy TypeBy Type By InvestorBy InvestorBy InvestorBy Investor By MaturityBy MaturityBy MaturityBy Maturity
* Insured time deposits are represented by DPGE. DPGE I and II are two types of time deposits insured by FGC and differ in cost and framework.
Average term of deposits is 568 days from issuance (597 days in September 2014) and 251 days from maturity (270
days in September 2014).
Average Term in daysAverage Term in daysAverage Term in daysAverage Term in days
Type of DepositType of DepositType of DepositType of Deposit from issuancefrom issuancefrom issuancefrom issuance to maturity ¹to maturity ¹to maturity ¹to maturity ¹
Interbank 225 102
Time Deposits 663 504
Time Deposits with Special Guarantee DPGE) 918 236
Agro Notes (LCA) 259 139
Real Estate Letters of Credit (LCI) 217 124
Bank Notes (LF) 1.141 638
Portfolio of DepositsPortfolio of DepositsPortfolio of DepositsPortfolio of Deposits 2222 568568568568 251251251251
1 From December 31, 2014. | 2 Volume weighted average.
Time Deposits
20%
DPGE I *20%
DPGE II *10%
Agro Bonds36%
Bank & Real Estate
Notes5%
BNDES Onlendings
4%
Trade Finance
4%
Interbank & Demand
1%
Institutional Investors
32%
Enterprises14%
National Banks0.2%
Brokers30%
Individuals13%
Other2%
BNDES Onlending
4%Foreign Banks
5%
Demand1%
Up to 90 days32%
91 to 180 days
22%
181 to 360 days
25%
+360 days20%
13/18 13/18
6666 EARNINGS RELEASE
4th Quarter 2014
Free CashFree CashFree CashFree Cash
On December 31, 2014, free cash totaled R$748.6 million, equivalent to 18.7%
of total deposits and 1.1 times shareholders' equity. The calculation considers
cash, short-term interbank investments and securities, less funds raised in the
open market and debt securities classified under marketable securities,
comprising rural product certificates (CPR), agribusiness deposit certificates and
warrants (CDA/WA), debentures and promissory notes (NP).
Capital Adequacy Capital Adequacy Capital Adequacy Capital Adequacy
The Basel Accord requires banks to maintain a minimum percentage of the capital weighted by the risk in their
operations. The Brazilian Central Bank stipulates that banks operating in the country should maintain at least 11%,
calculated according to the Basel II and Basel III Accord regulations, which provides greater security to the country’s
financial system against volatile economic conditions.
The following table shows BI&P’s position in relation to the Central Bank’s minimum capital requirements
The preferred shares of Banco BI&P (IDVL4), listed in the Level 2 Corporate Governance segment of BM&FBOVESPA,
closed the quarter at R$2.78, for market cap of R$247.0 million, including the shares existing on December 31, 2014
and excluding treasury stock. The price of IDVL4 shares dropped 34% in the quarter and 54% in the 12 months ended
December 2014. In comparison, the Bovespa Index (Ibovespa) dropped 8% in the quarter and 3% in relation to
December 2013. At the end of 4Q14, the price/book value (P/BV) ratio was 0.37.
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6666 EARNINGS RELEASE
4th Quarter 2014
Share Share Share Share Price evolution in the last 12 monthsPrice evolution in the last 12 monthsPrice evolution in the last 12 monthsPrice evolution in the last 12 months
Liquidity and Trading VolumeLiquidity and Trading VolumeLiquidity and Trading VolumeLiquidity and Trading Volume
The preferred shares of BI&P (IDVL4) were traded in 98.4% of the sessions in the quarter and 99.2% of the 248
sessions in 2014. The volume traded on the spot market in the quarter was R$1.6 million, involving 511,000 IDVL4
shares in 524 trades. In 2014, the volume of IDVL4 shares traded on the spot market was R$42.7 million, involving
around 10.8 million preferred shares in 3,658 trades.
Shareholder BaseShareholder BaseShareholder BaseShareholder Base
Position as of December 31,2014
#### TYPE OF SHAREHOLDERTYPE OF SHAREHOLDERTYPE OF SHAREHOLDERTYPE OF SHAREHOLDER IDVL3 IDVL3 IDVL3 IDVL3 %%%% IDVL4 IDVL4 IDVL4 IDVL4 %%%% TOTALTOTALTOTALTOTAL %%%%
8 Controlling Group 31,415,436 53.7% 673,521 2.2% 32,088,957 35.8%
303030307777 TOTAL TOTAL TOTAL TOTAL 58585858,,,,513513513513,,,,218218218218 100100100100....0%0%0%0% 31313131,,,,021021021021,,,,907907907907 100100100100....0%0%0%0% 89898989,,,,535535535535,,,,125125125125 100100100100....0%0%0%0%
Funds obtained in the open marketFunds obtained in the open marketFunds obtained in the open marketFunds obtained in the open market 204,937 204,937 204,937 204,937 338,461 338,461 338,461 338,461 85,905 85,905 85,905 85,905
Own portfolio 61,237 338,461 14,005
Third party portfolio 143,700 - 71,900
Unrestricted Portfolio - - -
Funds from securities issued or acceptedFunds from securities issued or acceptedFunds from securities issued or acceptedFunds from securities issued or accepted 1,696,104 1,696,104 1,696,104 1,696,104 1,456,876 1,456,876 1,456,876 1,456,876 868,884 868,884 868,884 868,884
Agribusiness Letters of Credit, Real Estate Notes & Bank Notes 1,696,104 1,456,876 868,884
Other l iabil i tiesOther l iabil i tiesOther l iabil i tiesOther l iabil i ties 188,156 188,156 188,156 188,156 240,712 240,712 240,712 240,712 229,893 229,893 229,893 229,893
Collection and payment of taxes and similar charges 845 557 487
Foreign exchange portfolio 6,323 12,767 5,941
Taxes and social security contributions 10,807 14,544 14,646
Social and statutory liabilities 4,444 1,962 3,606
Negotiation and intermediation securities 93,908 169,014 159,262
Funds from securities issued or acceptedFunds from securities issued or acceptedFunds from securities issued or acceptedFunds from securities issued or accepted 83,940 83,940 83,940 83,940 79,956 79,956 79,956 79,956 49,068 49,068 49,068 49,068
Agribusiness Letters of Credit, Real Estate Notes & Bank Notes 83,940 79,956 49,068
Other l iabil i tiesOther l iabil i tiesOther l iabil i tiesOther l iabil i ties 50,273 50,273 50,273 50,273 45,637 45,637 45,637 45,637 42,925 42,925 42,925 42,925
Taxes and social security contributions 33,683 32,489 30,883
INCOME STATEMENTINCOME STATEMENTINCOME STATEMENTINCOME STATEMENT 4Q134Q134Q134Q13 3Q143Q143Q143Q14 4Q144Q144Q144Q14 2013201320132013 2014201420142014
Income f rom Financial IntermediationIncome f rom Financial IntermediationIncome f rom Financial IntermediationIncome f rom Financial Intermediation 153,099 153,099 153,099 153,099 171,673 171,673 171,673 171,673 187,227 187,227 187,227 187,227 459,879 459,879 459,879 459,879 639,543 639,543 639,543 639,543
Income from securities 46,958 57,518 64,447 124,748 208,463
Income from derivative financial instruments (6,491) (17,737) (11,775) (9,367) (25,416)
Income from foreign exchange transactions 23,008 42,664 37,808 83,819 95,410
Expenses f rom Financial IntermediatonExpenses f rom Financial IntermediatonExpenses f rom Financial IntermediatonExpenses f rom Financial Intermediaton (127,375) (127,375) (127,375) (127,375) (146,298) (146,298) (146,298) (146,298) (155,105) (155,105) (155,105) (155,105) (503,259) (503,259) (503,259) (503,259) (515,649) (515,649) (515,649) (515,649)
Loans, assignments and onlendings (28,361) (25,942) (16,534) (100,857) (62,008)
Sales operations/transfer of financial assets (469) (19,600) (8,438) (1,005) (32,658)
Allowance for loan losses (16,009) 5,115 (11,453) (156,208) (9,653)
Gross Prof it from Financial InstrumentsGross Prof it from Financial InstrumentsGross Prof it from Financial InstrumentsGross Prof it from Financial Instruments 25,724 25,724 25,724 25,724 25,375 25,375 25,375 25,375 32,122 32,122 32,122 32,122 (43,380) (43,380) (43,380) (43,380) 123,894 123,894 123,894 123,894
Other Operat ing Income (Expense)Other Operat ing Income (Expense)Other Operat ing Income (Expense)Other Operat ing Income (Expense) (38,304) (38,304) (38,304) (38,304) (30,726) (30,726) (30,726) (30,726) (31,803) (31,803) (31,803) (31,803) (141,218) (141,218) (141,218) (141,218) (132,339) (132,339) (132,339) (132,339)
Income from services rendered 9,646 17,498 17,248 34,810 66,043
Earnings before taxes and profit-sharingEarnings before taxes and profit-sharingEarnings before taxes and profit-sharingEarnings before taxes and profit-sharing (13,865) (13,865) (13,865) (13,865) 3,866 3,866 3,866 3,866 1,203 1,203 1,203 1,203 (185,433) (185,433) (185,433) (185,433) (1,398) (1,398) (1,398) (1,398)
Income tax and social contribut ionIncome tax and social contribut ionIncome tax and social contribut ionIncome tax and social contribut ion 5,741 5,741 5,741 5,741 1,095 1,095 1,095 1,095 3,279 3,279 3,279 3,279 77,234 77,234 77,234 77,234 6,307 6,307 6,307 6,307
Net Prof it for the PeriodNet Prof it for the PeriodNet Prof it for the PeriodNet Prof it for the Period (9,950) (9,950) (9,950) (9,950) 1,661 1,661 1,661 1,661 2,005 2,005 2,005 2,005 (120,018) (120,018) (120,018) (120,018) (5,155) (5,155) (5,155) (5,155)