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1Q11 Results


   New Partners, Capital Increase, Strenghthened
    Management and Operating Agreement with
                    Sertrading
São Paulo, May 11, 2011 – Banco Indusval S.A., financial institution focused on corporate lending,
operating in the Brazilian market for over 40 years, listed at the Stock, Commodities and Futures
Exchange - BM&FBOVESPA under tickers IDVL3 and IDVL4, announces its financial results for the
first quarter of 2011 (1Q11).



                                        Highlights of the Period
     IDVL4: R$ 8.98 per share
         Closing: 05/11/2011              Capital increase of R$ 201 million, subscribed by
      Total shares: 41.212.984            Warburg Pincus, as well as the controlling
      Market Cap: R$ 370.1 MM             shareholders of Sertrading and of Indusval.
 + 21.892.709 Subscription receipts =
       R$ 566.7 MM Market Cap
                                          Acquisition of minority interest in Sertrading, with
                                          the signing of an operating agreement for the
                                          acquisition of its foreign trade receivables.
  Conference Calls/ Webcasts:
           05/12/2011                     JP Morgan also participates in the deal through a
                                          US$ 25 million loan for operational expansion, with
             In English                   the right to acquire subscription warrants to
  11h00 (Brasília) / 10h00 (US EST)       preferred shares up to 2.5% of the Bank’s capital.
  Connection USA:+1 786 924-6977
 Connection Brazil:+55 11 4688-6361
       Code: Banco Indusval
                                          The Bank’s management is strengthened with the
                                          election of new members to the Board of Directors
                                          and Executive Board who will bring corporate and
           In Portuguese                  financial expertise, as well as international
   10h00 (Brasília) / 9h00 (US EST)
                                          experience.
      Phone: +55 11 4688-6361
        Code: Banco Indusval
                                          New Vision and Strategy: Innovation and
                                          excellence in corporate lending, as well as
                                          leadership in the fixed-income capital market.
 Website: www.indusval.com.br/ir




                                                                                           1/22
Summary

Nessage from the Management...............................................................                                      3
       The Transaction................................................................................................          3
       Strengthned Management………….........................................................................                      5
       First Quarter Results…………................................................................................                6

Key Indicators………….............................................................................                                 7

Operating Performance…........................................................................                                  8

Credit Portfolio……..................................................................................                        10

Funding.................................................................................................                    14

Liquidity...............................................................................................                    15

Capital Adequacy................................................................................. .                         15

Risk Ratings..........................................................................................                      16

Capital Market………...............................................................................                            16

New Statutory Bodies Elected……………………...............................................                                         19

BALANCE SHEET…………...........................................................................                                20

INCOME STATEMENT.……………………...........................................................                                        22




                                                                                                                         2/22
Message from the Management
The first quarter of 2011 marks a new chapter in Indusval’s history. During 43 years of the Indusval
brand’s existence, we witnessed decisive moments in the evolution of our businesses: from
brokerage to bank in 1991; the merger with Multistock in 2003; the sale of the Direct Consumer
Credit operation in 2004; inauguration of the first branch offices outside São Paulo in 2006; the IPO
in 2007; the strategic rethink in 2010; and in 2011, the signing of the Agreements object of a
Material Fact disclosed on March 22, 2011, and adopted the new brand BANCO INDUSVAL &
PARTNERS to reflect this new phase.

More than merely increasing the capital structure to support the growth of our operations, the new
agreements represent a significant leap towards the adoption of a new vision to make us an
innovative bank that excels in corporate lending through a profound knowledge of our clients’
operations and the sectors in which they operate, and become a leader in the growing corporate
bonds market in Brazil in the medium and long terms.

This vision was developed in partnership with our new partners and managers who are adding their
entrepreneurship skills, expertise in the management of companies and financial institutions, their
foreign trade background and knowhow of the agribusiness dynamics and processes. In addition,
this operation will add Sertrading’s important and diversified client base that is complementary to
Indusval’s client portfolio, as well as its global relations and international experience.

The objective is clear: to return our historical growth levels through the generation of high quality
assets in the middle and upper middle markets, while reducing our credit risk through an in-depth
knowledge of our clients’ operations, besides expanding the offering of financial products, reinforcing
our generation of recurring revenue from services.

This transformation is already underway. The professionals working in the new product areas are
already structuring their teams, and concluded their short-, medium- and long-term strategic plan.
Our financial statements should soon show the initial signs. However, our value proposition should
materialize with greater consistency in the medium and long terms.

The Transaction:
   • Expansion of the Capital Base: To strengthen and expand Banco Indusval’s capital base
      with the aim of growing its assets with a stronger structure, the capital was increased by R$
      201 million through the admission of new partners and a private subscription to new shares,
      as follows:
          - R$ 150 million – Warburg Pincus
          - R$ 30 million – Controlling shareholders of Sertrading
          - R$ 21 million – Controlling shareholders of Banco Indusval
       This partial capital increase was approved by the Company’s Board of Directors on May 6,
       2011 and is subject to approval of the Central Bank of Brazil.

   •   Important Strategic Partner: Warburg Pincus is one of the world’s largest private equity
       funds. They have invested approximately US$37 billion in over 600 companies across 30
       countries in its 40 years of history. One of its specialties is investing in finance companies
       and it has already invested approximately US$ 8 billion in 66 financial services institutions
       worldwide. It is currently a shareholder in more than 12 banking institutions in the United
       States, Asia and Europe.

       After subscribing and paying its stake in the Bank’s capital through WP X Fundo de
       Investimento em Participações, Warburg Pincus signed a Shareholders’ Agreement that
       includes the right to appoint a member to the Board of Directors. The fund appointed its CEO



                                                                                              3/22
in Brazil, Mr. Alain Belda, former Chairman and CEO of Alcoa (USA) and current member of
    the Board of Directors of Citibank (USA).

    This is the first significant investment by a large international private equity fund in a
    Brazilian credit bank, which opens up new long-term funding avenues for Brazil’s financial
    sector.

•   Capital Injection in Sertrading S.A. and Operating Agreement: On April 1, 2011, Banco
    Indusval invested R$ 25 million by subscribing to the common shares as part of a capital
    increase at Sertrading, one of the biggest logistics and foreign trade services companies in
    Brazil. Founded in 2001, Sertrading's main shareholders are Alfredo De Goeye Junior, Jair
    Ribeiro da Silva Neto and Mineração Santa Elina Indústria e Comércio S.A. With this
    investment, the bank will hold a 17.7% minority interest in Sertrading.

    The table presents Sertrading’s key financial data:
                                                                               Growth
             R$ Million                               2010         2009
                                                                                (%)
             Foreign Trade Volume transacted         R$ 1,600.0   R$ 1,100.0        45%
             Net Income                               R$ 502.5     R$ 345.8         45%
             Operating Profit                           R$ 30.4      R$ 15.1       101%
             Net Profit                                R$ 12. 8       R$ 6.3       103%
             EBITDA                                     R$ 30.9      R$ 16.2        91%


    On April 1, 2011, the Bank also executed:
        -   a Shareholders’ Agreement with the controlling shareholders of Sertrading regulating
            (a) the Bank’s option to acquire the remaining capital of the company in the next 2
            years; (b) the appointment of two (2) members to the Board of Directors; and (c)
            veto rights on specific matters, including mergers and acquisitions and significant
            indebtedness; and
        -   an Operating Agreement, valid for 5 years, with preemptive rights for the acquisition
            of receivables generated by its foreign trade activities. Note that during its 10 years
            of operations, Sertrading has never registered any default on its receivables, thanks
            to the quality of its clients and its close monitoring of their operations.

    The Bank plans to obtain several synergies from the Sertrading deal, especially (i) to expand
    its operations in the foreign trade platform to gain access to bigger clients, thus broadening
    its quality-asset generation base; (ii) to increase the visibility of its clients’ operational chain,
    mitigating the risks of these operations and expanding the offering of corresponding financial
    products; and (iii) cross-selling of the bank’s financial products to Sertrading’s client base.

•   Acquisition of agricultural bond issuer: On April 15, 2011, the Bank acquired 100% of
    the capital of Serglobal Comércio de Cereais Ltda, an issuer of agricultural bonds, as well as
    the portfolio and team that invests in Sertrading’s Rural Product Certificates, for R$ 15
    million. The transaction signifies the transfer of Sertrading’s expertise in the past 8 years to
    the bank. The objective is to expand the bank’s operations to certain segments in the
    agricultural sector in which the team absorbed from Sertrading has significant expertise.

•   Agreement with J.P. Morgan: Through the agreements signed on March 22, 2011:
    −   J.P. Morgan will grant to the Bank a US$ 25 million loan, with a 2-year term and half-
        yearly interest payments; and
    −   J.P. Morgan has committed to subscribe in the future to Banco Indusval’s preferred stock
        warrants representing 2.5% of its capital. J.P. Morgan will neither join the controlling
        block of shareholders nor participate in the management of Banco Indusval.


                                                                                                4/22
Strengthened Management:
After duly approved by the Central Bank, Manoel Felix Cintra Neto will take office as Chairman of
the Board of Directors, while Luiz Masagão Ribeiro and Jair Ribeiro da Silva Neto take office as
Joint CEOs.

Jair Ribeiro da Silva Neto was one of the founders and served as the chairman of Banco
Patrimônio (1988-1999), chairman of Banco Chase Manhattan S.A. and executive officer at JP
Morgan Chase (NY) (2000-2003). More recently, he was a shareholder, the CEO and chairman of
CPM Braxis S.A. (2005-2010), one of Brazil’s largest IT services companies, whose control was sold
in October 2010 to an industry giant: the European Cap Gemini.

Jair Ribeiro will lead the commercial, funding, treasury, products and corporate finance areas,
while the co-CEO Luiz Masagão will focus on the credit, risk, compliance, IT, legal and
administrative areas. By dividing the areas between two executive officers and seasoned
shareholders, we seek to achieve excellence in all of the bank operations related to corporate loans
and financial services.

The following executives also joined the bank in April 2011:
       −   Francisco Cote Gil (Commercial Vice-President) was partner and executive officer at
           BBA and Itaú BBA (1990 – 2009) and executive officer at Banco Crefisul de Investimento
           (Citibank), where he worked for 18 years.
       −   Gilberto Faiwichow (Treasury Vice-President) worked as treasurer at ING (Brazil) (1989
           – 1992), partner at Black River Asset Management (Cargill Group) (2005 – 2008) and co-
           founder and treasurer of Banco Rendimento (1992 – 2000).
       −   André Mesquita (Products & Corporate Finance Vice-President) served as COO of Cotia
           Trading (Argentina) (1996 – 2000), was co-founder of Sertrading (2001- 2011) and
           former CFO of CPM Braxis (2005 – 2011).
Katia Moroni, currently executive officer at the bank, she will serve as Vice-President of Trade
Finance, Syndications, Funding and Investor Relations.
Gilmar Melo de Azevedo, current executive officer of the bank, will serve as Vice-President for
Special Credits, reporting to Mr. Manoel Cintra, and will be responsible to manage the credit
renegotiation and recovery for lower quality loans.
Eliezer L. Ribeiro da Silva, current executive officer, takes the responsibility for the Credit
Department for midsized companies.
With the aim of constantly improving our governance, Alain Belda (Warburg Pincus), Alfredo de
Goeye Junior (CEO of Sertrading), Guilherme Afonso Ferreira (Bahema) and Walter Iorio
(former KPMG) will serve as Independent Members of our Board of Directors, after duly approved by
the Central Bank of Brazil.


First Quarter Results
The 1Q11 results do not yet reflect the effects of this partnership, except for the expenses already
provisioned, resulting from the negotiation and restructuring process.

For the bank, the first quarter was a period of intense planning and negotiation of the operations
described above. Loan operations remained stable in relation to 4Q10, while increasing 14.4% from
1Q10.

The most important aspect in terms of results was the R$ 67 million increase in allowance for loan
losses and the increase in loans overdue more than 60 days, which generated expenses with



                                                                                            5/22
allowance for loan losses of R$ 101.6 million, raising the balance for loan loss allowances to R$212.6
million, signifying 183% cover of the loans overdue more than 60 days.

The increased allowance, announced in the Material Fact notice dated March 22, 2011, aims to
safeguard the profitability of the bank’s future operations, segregating any credit problems resulting
from loans granted during the economic crisis. This decision provides greater comfort to the new
shareholders and management members so that they may focus their attention and efforts on
devising the new business strategy. Thus, it was a conservative and one-off measure adopted to
pave the way for periods of lower fluctuations in profitability and growth.

Also worth pointing out is the high liquidity of our balance sheet: cash of R$ 1.0 billion, equivalent to
58% of total deposits, reflecting the management’s conservative approach and the capital increase
carried out in late March, which brought Indusval one of the highest capital adequacy (Basel) ratios
in the market: 24%. This high liquidity is unique in the market and places the bank in a privileged
position for the new pace of growth defined by the new shareholders and strategy.




                                                                                                6/22
Key Indicators
The financial and operating information presented in this report are based on consolidated financials prepared in millions of
Reais (local currency), according to Brazilian GAAP (BRGAAP).



            Results                                              1Q11      4Q10      1Q10     1Q11/ 4Q10    1Q11/1Q10
            Financial Intermediation Income                      118.1     115.9     114.4         1.9%         3.3%
            Financial Interm. Expenses bef. ALL                  (77.8)    (67.9)    (67.7)       14.7%        14.9%
            Result from Financial Int. before ALL                 40.3      48.0      46.7       -16.2%       -13.7%
                               1
            ALL Expenses                                        (101.6)    (13.5)    (11.5)      652.3%       787.6%
            Result from Financial Intermediation                 (61.4)     34.5      35.2      -277.7%      -274.2%
            Recurring Operating Result                           (87.5)       6.4     11.2     -1459.2%      -880.6%
            Non-Recurring Operating Expenses                      (2.7)     (0.3)     (0.4)      788.6%       540.6%
            Operating Result                                     (90.3)       6.1     10.8     -1571.5%      -936.5%
            Net Profit (Loss)                                    (54.5)       5.9       7.3    -1024.2%      -841.5%


            Assets & Liabilities                                 1Q11      4Q10      1Q10     1Q11/ 4Q10    1Q11/1Q10
            Loan Portfolio                                      1,890.2   1,876.9   1,655.6        0.7%        14.2%
              Loan Portfolio + Guarantees and L/Cs              1,966.6   1,941.2   1,719.0        1.3%        14.4%
            Cash & Short Term Investments                        567.1      51.7     377.3       996.3%        50.3%
            Securities and Derivatives                          1,825.9   1,261.3    979.4        44.8%        86.4%
            Total Assets                                        4,346.8   3,276.1   3,048.6       32.7%        42.6%
            Total Deposits                                      1,759.0   1,577.6   1,363.6       11.5%        29.0%
            Open Market                                         1,312.8    538.6     605.7       143.7%       116.8%
            Foreign Borrowings                                   350.7     325.3     408.4         7.8%       -14.1%
            Domestic On-lending                                  137.0     127.7     108.7         7.3%        26.0%
            Shareholders’ Equity                                 563.7     426.4     430.7        32.2%        30.9%


            Performance                                          1Q11      4Q10      1Q10     1Q11/ 4Q10    1Q11/1Q10
            Free Cash                                           1,027.0    732.8     707.1        40.1%        45.2%
            NPL 60 days/ Loan portfolio                           6.1%      3.8%      3.5%       2.3 p.p.     2.6 p.p.
            NPL 90 days/ Loan portfolio                           4.6%      3.3%      2.8%       1.4 p.p.     1.8 p.p.
                           2
            Basel Index                                         23.7%     17.6%     21.1%        6.1 p.p.     2.6 p.p.
            ROAE                                                -37.3%      5.6%      7.0%     -42.9 p.p.   -44.2 p.p.
            Net Interest Margin (NIM)                             4.6%      6.5%      7.0%      -1.9 p.p.    -2.5 p.p.
            Adjusted Net Interest Margin (NIMa)                   5.9%      7.9%      8.5%      -2.0 p.p.    -2.7 p.p.
                                   3
            Efficiency Ratio                                    80.9%     65.7%     61.0%       15.2 p.p.    19.9 p.p.
            Efficiency Ratio (excl. non-recurring Expenses)     72.3%     64.3%     60.2%        8.0 p.p.    12.1 p.p.


            Other Information                                    1Q11      4Q10      1Q10     1Q11/ 4Q10    1Q11/1Q10
            Number of Corporate Clients                            707       709       680        -0.3%         4.0%
            Number of Employees                                    357       362       350        -1.4%         2.0%

            Details in the respective sessions of this report
            1
              1Q11 additional Loan loss Allowances incl.
            2
              1T11 partial capitalization under reserves
            3
              non-recurring expenses included


Banco Indusval & Partners (BI&P) is a commercial bank with 43 years of experience in the financial markets, focusing
on local and foreign currency corporate loan products. The Bank relies on a network of 11 branches strategically
located in economically relevant Brazilian regions, including an offshore branch, and its brokerage firm operating at
the São Paulo Stock, Commodities and Futures Exchange - BM&FBOVESPA. The Bank is a publicly-held financial
institution listed at Level 1 Corporate Governance of the BM&FBOVESPA since July 2007 and voluntarily adopts
additional practices specific to companies listed in the Novo Mercado special trading segment.




                                                                                                                         7/22
Operating Performance
Profitabilty


           Financial Intermediation                                 1Q11      4Q10      1Q10      1Q11/ 4Q10      1Q11/1Q10
           Financial Intermediation Revenues                        118.1     115.9     114.4         1.9%           3.3%
           Loan Operations                                            64.3     68.8      61.2         -6.5%           5.2%
              Loans & Discounts Receivables                           60.3     61.3      52.1         -1.7%          15.8%
              Financing                                                3.6       4.5      6.5        -20.6%         -44.8%
              Other                                                    0.4       2.9      2.6        -85.7%         -83.8%
           Securities                                                 40.7     24.2      24.3         68.2%          67.7%
           Derivative Financial Instruments                            5.4     14.2       1.6        -61.8%         231.9%
           FX Operations Result                                        7.7       8.7     27.3        -12.3%         -72.0%
           Financial Intermediation Expenses                        179.5      81.4      79.2      120.5%          126.7%
           Money Market Funding                                       72.0     60.1      38.8         19.8%          85.5%
              Time Deposits                                           46.4     41.7      29.5         11.1%          57.2%
              Repurchase Transactions                                 22.3     16.1       8.3         38.8%         168.3%
              Interbank Deposits                                       3.3       2.3      1.0         46.9%         238.0%
           Loans, Assign. & Onlending                                  5.9       7.8     28.9        -25.1%         -79.7%
           Foreign Borrowings                                          3.6       5.8     26.3        -37.0%         -86.2%
           Dom. Borrowings+Onlending                                   2.2       2.1      2.7          8.2%         -16.0%
           Allowance for Loan Losses                                 101.6     13.5      11.5        652.3%         787.6%
           Financial Intermediation Result                         (61.4)      34.5      35.2      -277.7%        -274.2%



Result from Financial Intermediation, detailed in notes 15.a and 15.b to the quarterly financial
statements, reflects the stability in the income from financial intermediation in the quarter. The
increase in funding expenses was mainly due to the higher funding volume and, consequently,
higher cash balance in the period, which resulted in higher income from securities operations.

The R$ 67 million increase in allowance for loan losses and the increase in loans overdue more than
60 days resulted in provisioning expenses of R$ 101.6 million for loan losses, raising the allowance
of loan losses to R$ 212.6 million, with a 183% cover of the loans overdue more than 60 days. The
increased allowance, announced in the Material Fact notice, aims to safeguard the profitability of the
bank’s future operations, segregating any credit problems resulting from loans granted during the
economic crisis. This decision provides greater comfort to the new shareholders and management
members so that they may focus their attention and efforts on devising the new business strategy.



Net Interest Margin
        Net Interest Margin (*)                                      1Q11      4Q10      1Q10       1Q11/ 4Q10      1Q11/1Q10
        A. Result from Financial Int. before ALL                      40.3      48.0       46.7        -16.2%          -13.7%
        A1'' Adjustment FX fluctuation *1                             (1.5)     (0.4)     (0.0)        241.4%        70658.8%

        A.a Adj. Financial Interm Result before ALL                   38.8      47.6       46.7        -18.5%          -16.8%
        B. Average Interest bearing Assets                         3,583.1    3,036.4   2,720.1         18.0%           31.7%
        Zero remuneration average assets adjustment                (881.2)    (561.5)   (484.6)         56.9%           81.8%
        B.a Adj Average Interest bearing Assets                    2,701.9    2,474.9   2,235.5          9.2%           20.9%
        Net Interest Margin (NIM) (A/B)                             4.6%       6.5%      7.0%         -0.3 p.p.       -0.4 p.p.

        Adj.Net Interest Margin (NIMa) (Aa/Ba)                      5.9%       7.9%      8.6%         -2.0 p.p.       -2.7 p.p.

        (*) annualized
        *1 FX changes from ADR deals deducted from other Operating Expenses




                                                                                                                                  8/22
Net interest margin (NIM) stood at 4.6%, mainly due to the higher carry-forward of cash. Adjusted
net interest margin (NIMa) stood at 5.9%, reflecting the foreign exchange effects on financial
intermediation and exclusion from the remunerable asset base the average balances of assets with a
balancing item of equal amount, interest rate and tenor in repo operations under liabilities.

Efficiency Ratio


        Efficiency Ratio                                             1Q11         4Q10      1Q10    1Q11/ 4Q10    1Q11/1Q10
        Personnel Expenses                                            14.7          15.4     12.4       -4.2%        18.7%
        Contributions and Profit-sharing                               2.1           1.2      2.5       82.1%       -14.9%
        Administrative Expenses                                       11.4          11.3      8.9        1.1%        27.8%
        Taxes                                                          3.5           4.2      3.2      -16.2%        11.3%
        Other Operating Expenses                                       4.8           3.0      3.5       57.1%        36.0%
        A1'- Recurring Operating Expenses                            36.6          35.1     30.5         4.2%       19.9%
        A1'' Adjustment FX fluctuation *1                            (1.5)         (0.4)    (0.0)     241.4%           n.m.
        A1- Adj. Recurring Operating Exp.                            35.1          34.7     30.5        1.3%        15.1%
        Personnel Expenses*2                                           1.4           0.3      0.0      353.6%          n.m.
        Administrative Expenses*3                                      0.0           0.0      0.4         n.m.         n.m.
        Other Operating Expenses*4                                     1.3           0.0      0.0         n.m.         n.m.
        A2- Total Adjusted Op. Expenses                               2.7            0.3     0.4     788.6%        540.6%
        A- Operating Expenses Total                                  37.8          35.0     30.9        8.2%        22.3%
        Gross Income Fin. Interm. (w/o ALL)                           40.3          48.0     46.7      -16.2%       -13.7%
        Income from Services Rendered                                  3.5           4.0      2.8      -14.2%        22.4%
        Income from Banking Tariffs                                    0.2           0.3      0.2      -10.6%        21.5%
        Other Operating Income                                         4.6           1.5      1.0      200.5%       361.6%
        B- Operating Income Total                                    48.6          53.9     50.7       -9.9%        -4.2%
        Recurring Efficiency Ratio (A1/B)                           72.3%       64.3%      60.2%      8.0 p.p.    12.1 p.p.
        Efficiency Ratio (A/B)                                      77.9%         64.9%    61.0%      13.0 p.p.    16.9 p.p.
        *1 FX expenses from ADR deals accounted under Other operating expenses deducted
        *2 Taxes and indemnifications- dismissals
        *3 Consultancy expenses
        *4 Investment Agreement Expenses- Lawyers, Auditors, etc.


The efficiency ratio in 1Q11 was impacted by non-recurring expenses of R$ 2.7 million (R$ 0.3
million in 4Q10 and R$ 0.4 million in 1Q10) in other operating expenses. These expenses are related
to amounts and charges provisioned and/or paid as severance pay to employees terminated (R$ 1.4
million), additional labor contingency provisions (R$ 0.8 million) and expenses related to the
Investment Agreement (R$ 0.5 million paid to auditors, lawyers, etc.). The efficiency ratio adjusted
for non-recurring expenses came to 72.3% in the quarter, versus 64.3% in 4Q10 and 60.2% in
1Q10. We understand that this ratio is still high and shall be normalized with the gradual asset
growth and cash reduction.

Net Profit
The results of the quarter reflect the expenses pursuant to the Management’s decision in line with
the negotiations under the Investment Agreement, preparing the Bank for its new phase. The main
impact results from expenses with allowance for loan losses, amounting to R$ 101.6 million,
including the constitution of additional allowance of R$ 67 million, and non-recurring expenses of R$
2.7 million related to severance pay, labor contingencies and costs related to the structuring of the
investment agreement, as detailed above.




                                                                                                                               9/22
Credit Portfolio
On March 31, 2011, the Credit Portfolio, which includes guarantees, sureties and letters of credit,
detailed in Note 6 to the Financial Statements, totaled around R$ 2.0 billion, up 14.4% from 1Q10.


            Credit Portfolio by Product                1Q11       4Q10      1Q10 1Q11/ 4Q10   1Q11/1Q10
            Loan Operations                          1,527.2    1,550.9   1,348.2     -1.5%      13.3%
            Loans & Discounted Receivables           1,348.0    1,353.5   1,158.9     -0.4%      16.3%
            BNDES/ Finame                              124.6      112.6      85.0    10.6%       46.6%
            Direct Consumer Credit – used vehicles       4.8        6.2      12.7    -22.2%     -61.8%
            Financing in Foreign Currency               32.0       51.9      32.4    -38.3%      -1.1%
            Other Financing                             10.2       14.2      22.8    -27.8%     -55.1%
            Assignment with Co-obligation                7.5       12.4      36.5    -39.7%     -79.5%
            Advances on Foreign Exchange Contracts     353.8      316.2     300.3    11.9%       17.8%
            Other Loans                                  9.2        9.8       7.1     -5.7%      30.9%
            DISBURSED CREDIT OPERATIONS              1,890.2    1,876.9   1,655.6     0.7%      14.2%
            Guarantees Issued (L/Gs and L/Cs)           76.4       64.3      63.4    18.9%       20.6%
            TOTAL                                    1,966.6    1,941.2   1,719.0     1.3%      14.4%
            Allowance for Loan Losses                 (212.6)   (119.6)   (110.7)    77.7%       92.0%


            Credit Portfolio by Currency               1Q11       4Q10      1Q10 1Q11/ 4Q10   1Q11/1Q10
            Local Currency - Real                    1,504.4    1,508.7   1,322.9     -0.3%      13.7%
            Foreign Currency                           385.9      368.2     332.7     4.8%       16.0%
            TOTAL                                    1,890.2    1,876.9   1,655.6     0.7%      14.2%



Working capital loans and discounts of receivables to the middle market companies accounted for
the bulk (88%) of the total loans in the period.

Trade finance operations, which include foreign currency loans (R$ 32.0 million) and advances on
foreign exchange contracts (R$ 353.8 million), totaled R$ 385.9 million, representing 20% of the
loan portfolio, up 5% in the quarter and 16% in 12 months, despite the 2.04% and 8.98%
appreciation of the Brazilian real in the respective periods. In U.S. dollar terms, the trade finance
portfolio grew 7.01% in the quarter and 26.7% in 12 months, to US$ 236.7 million, from US$ 221.1
million on December 31, 2010 and US$ 186.8 million on March 31, 2010.

The Loan Portfolio also includes BNDES/FINAME onlendings, which increased 11% and 47% in the
comparison periods, respectively; the run off balance from the Direct Consumer Credit – Used
Vehicles portfolio discontinued in October 2008; and the portion of middle market loans and car
financings assigned to other financial institutions under our credit risk coverage (co-obligation). It is
worth mentioning that the used vehicle financing and credit assignments outstanding balances
represent only R$ 12.3 million, less than 1% of the loan portfolio.

As shown below, the middle market segment accounts for 82% of the Loan Portfolio, while the Large
Companies platform (companies with revenues of over R$ 400 million), which was structured in July
2010, represents 14% of the portfolio, up 4% in the quarter.




                                                                                                          10/22
Credit Portfolio By Cliente Segment                     1Q11          4Q10          1Q10 1Q11/ 4Q10       1Q11/1Q10
Middle Market                                         1,554.5       1,538.5       1,557.5    1.0%           -0.2%
Local Currency - Real                                  1,241.3       1,253.5       1,224.8        -1.0%       1.3%
Loans & Discounted Receivables                         1,118.6       1,139.3       1,139.8        -1.8%      -1.9%
Financing                                                  10.2          14.2                -   -27.8%        n.m.
BNDES / FINAME                                           112.4           99.9          85.0       12.5%      32.3%
Foreign Currency                                         313.1         285.1         332.7         9.8%      -5.9%
Large Companies                                         267.2         256.5                  -    4.2%        n.m.
Local Currency - Real                                    194.5         173.4                 -    12.1%        n.m.
Loans & Discounted Receivables                           182.3         160.7                 -    13.4%        n.m.
BNDES / FINAME                                             12.2          12.7                -    -4.2%        n.m.
Foreign Currency                                           72.7          83.1                -   -12.5%        n.m.
Other                                                     68.6          81.9          98.1       -16.3%    -30.1%
Consumer Credit – used vehicles                            11.7          15.2          28.2      -23.2%     -58.6%
Acquired Loans & Financing                                 47.7          56.9          62.9      -16.2%     -24.2%
Other Loans                                                 9.2           9.8           7.1       -5.7%      30.9%
Disbursed Credit Operations                           1,890.2       1,876.9       1,655.6         0.7%      14.2%
Guarantees Issued                                          76.4          64.3          63.4       18.9%      20.6%
TOTAL                                                 1,966.6       1,941.2       1,719.0         1.3%      14.4%
Allowance for Loan Losses                              (212.6)       (119.6)        (110.7)       77.7%      92.0%




                        Industry                                                       %
                        Agribusiness                                                   17.56%
                        Food & Beverage and Tobacco                                    17.52%
                        Civil Construction                                             10.01%
                        Chemical & Pharmaceutical                                       4.96%
                        Automotive                                                      4.51%
                        Transportation & Logistics                                      4.47%
                        Financial Institutions                                          4.44%
                        Textile, Apparel and Leather                                    3.93%
                        Education                                                       3.42%
                        Metal Industry                                                  2.91%
                        Power Generation & Distribution                                 2.84%
                        Individuals                                                     2.72%
                        Oil and Biofuel                                                 2.63%
                        Financial Services                                              2.20%
                        Pulp & Paper                                                    2.19%
                        Wood & Furniture                                                1.81%
                        Retail & Wholesale                                              1.37%
                        Other Industries (*)                                           10.51%
                        TOTAL                                                        100.00%

                        (*) Individual participation of less than 1.3% of credit portfolio




                                                                                                                      11/22
By Economic Activity                                                             By Segment

                             Other                                                                                      Upper
                            Services                Individuals
                                                                                                                        Middle
                              23%                       7%
                                                                                                                        14%

                    Financial                                                              Middle                             Retail and
                       Cos                                                                 Market                               other
                       3%                                                                   82%                                  4%

                   Commerce
                     11%                                 Industry
                                                           56%

                                   By Product                                               By Client Concentration
                                                                                                                        10 largest
                                                                                                 Other
                                                                                                                          20%
                          Other                                                                  24%
                          1%

                      BNDES /                                    Loans &
                      FINAME                                    Discounts
                        8%                                         91%
                                                                                            61 - 160                         11. - 60.
                                                                                             24%                               32%


                                   By Maturity                                                       By Guarantee
                                                       181 to
                            91 to 180                   360                                       Vehicles     Securities
                              19%                       15%                             Real State 1%            3%
                                                                                                                               Aval PN
                                                                                           10%
                                                                                                                                26%
                                                                                     Pledge /
                                                                                       Lien
                                                                                       2%                                          Others
                                                                                       Pledge                                       4%
                                                            Above                    Monitored
                       Up to 90                            360 days                      6%
                        days                                 30%                            Receivables
                        36%                                                                    48%




       Loan Portfolio Quality
       Rating                           AA      A          B          C      D       E       F         G        H                                Prov /
                                                                                                                       Comp.        TOTAL       Cred %
       Required Provision %          0%        0.5%       1%        3%      10%     30%    50%      70%        100%
       O/S Loans                        35.4   666.1     476.4      430.8    87.5   91.7    22.2       10.1     69.9           -    1,890.2
1Q11




                                                                                                                                                11.2%
       Allowance for Loan Losses         0.0     3.3        4.8      12.9     8.8   27.5    11.1         7.1    69.9        67.2      212.6

       O/S Loans                        47.8   664.4     480.7      417.1   107.9   65.5    37.8       20.2     35.5           -    1,876.9
4Q10




                                                                                                                                                 6.4%
       Allowance for Loan Losses         0.0     3.3        4.8      12.5    10.8   19.6    18.9       14.1     35.5         0.0      119.6

       O/S Loans                         0.0   488.8     471.2      494.3    63.6   26.3    20.2         6.2     0.0           -    1,570.5
1Q10




                                                                                                                                                 4.3%
       Allowance for Loan Losses         0.0     2.4        4.7      14.8     6.4    7.9    10.1         4.4     0.0        17.3         68.0




                                                                                                                                                12/22
On March 31, 2011, allowance for loan losses totaled R$ 212.6 million and consisted of: (a)
regulatory provisions of R$ 145.4 million; and (b) complementary provisions of 3.5% of the loan
portfolio in the amount of R$ 67.2 million. Complementary provisions are constituted to meet
potential difficulties in the payment of renegotiated loans and the aging of loans overdue more than
60 days (non-performing loans – NPL), classified between D and H, thus increasing the cover to
75.5%, from 44.8% in 4Q10 and 49.3% in 1Q10.


As explained earlier, despite the impact on immediate results, the increase in allowance for loan
losses aims to safeguard the future operations of the bank, segregating problematic loans resulting
from the economic crisis and providing more comfort to new shareholders and management
members to focus their attention and efforts on devising the new business strategy.


On March 31, 2011, the Loan Portfolio comprised loans renegotiated with clients in the amount of
R$242.6 million, mostly classified between D and H, even when they are not overdue. Loans
classified between D and H totaled R$ 281.5 million, equivalent to 14.9% of the loan portfolio, of
which 59% were performing loans.


The balance of loans with installments overdue more than 60 days totaled R$ 115.9 million,
equivalent to 6.1% of the loan portfolio. The balance of loans with installments overdue more than
90 days, comparable to Central Bank data, totaled R$ 87.6 million, equivalent to 4.6% of the loan
portfolio (NPL 90 days). According to the Central Bank, default rates (more than 90 days) for
corporate loans have remained stable at around 3.6% since March 2010.


                                                                       > 60 days                                    > 90 days
Default by segment            1Q11            4Q10
                                                              1Q11                  4Q10                   1Q11                  4Q10
                              Total Credit Portfolio    NPL           %T      NPL            %T      NPL           %T      NPL            %T
Middle Market                  1,554.5        1,538.5   112.1         7.2%     67.2          4.4%     84.2         5.4%     56.6           3.7%

Large Companies                  267.2         256.50         -                      -                     -                      -
                                                                          -                      -                     -                       -
Other                             68.6           81.9     3.8         5.5%         5.1       6.2%      3.4         4.9%         4.5        5.5%
TOTAL                         1,890.2         1,876.9   115.9         6.1%     72.2          3.8%    87.6          4.6%     61.2          3.3%
Allowance Loan Losses (ALL)       212.6         119.6
ALL / NPL                                 -               183.4%                   165.6%              242.76%                  195.6%
ALL/ Loan Portfolio             11.2%           6.4%              -                      -                     -                      -




The table above shows that the allowance for loan losses corresponds to 11.2% of the loan portfolio,
up 4.8 p.p. from 4Q10, covering 183.4% (+17.8 p.p.) of the loans overdue more than 60 days and
2.4 times the loans overdue more than 90 days (+47.1 p.p.).


In 1Q11, loans amounting to R$ 8.7 million (R$ 6.0 million in 4Q10), classified as H for 180 days
and hence were 100% provisioned, were written off. Recovery of overdue loans totaled R$ 0.4
million in the quarter (R$ 3.0 million in 4Q10).




                                                                                                                                          13/22
Funding

Funding increased 10.6% from the previous quarter to reach R$ 2.2 million, 84.4% in reais and
15.6% in foreign currency.

           Total Funding                                       1Q11       4Q10        1Q10 1Q11/ 4Q10           1Q11/1Q10
           Total Deposits                                     1,759.0   1,577.6      1,363.6          11.5%           29.0%
             Time Deposits                                     680.5      739.9           698.5       -8.0%           -2.6%
             Insured Time Deposits (DPGE)*                     830.0      591.0           572.0       40.4%           45.1%
             Agribusiness & Bank Notes                          95.9       82.0             8.7       16.9%      1006.6%
             Interbank Deposits                                113.5      116.5            42.5       -2.6%       166.9%
             Demand Deposits and Other                          39.1       48.2            42.0      -18.7%           -6.7%
           Domestic Onlending                                  137.0      127.7           108.7        7.3%           26.0%
           Foreign Borrowings                                  350.7      325.3           408.4        7.8%       -14.1%
             Trade Finance                                     331.9      307.0           296.8        8.1%           11.8%
             IFC A/B Loan                                       18.8       18.3           111.6        2.8%       -83.1%
           TOTAL                                          2,246.7       2,030.6     1,880.7          10.6%        19.5%


Funding in reais mainly consists of deposits (78% of total funding), mainly through the issue of Bank
Deposit Certificates (CDB) (30.3%) and Time Deposits with Special Guarantee (DPGE) (36.9%). The
increase in the balance of DPGEs over the previous quarter reflects the 2- and 3 year-funding
operations, before the capital increase date was confirmed, anticipating the demand for longer-term
assets. Therefore, the average term of deposits was 806 days from issue (+49 days) and 532 days
from the close of the quarter (+36 days), as follows:

                                                                    Avg term from                  Avg term
                 Type of Deposit
                                                                      issuance                    to maturity
                 Time Deposits                                                     572                          341
                 Interbank                                                         228                          125
                 DPGE                                                             1,141                         790
                 Agribusiness & Bank Notes                                         203                          132
                 Portfolio of Deposits                                             806                          532

                 (*) from March 31, 2011



                                                          Deposits
            By Type                                      By Investor                                          By Maturity
                   A LC+B N                           Other
 Time                 5%    Interbk                     5%
                                             Individual                                             +360
Depo sit                      6%
                                                13%                                                 days                        up to 90
(DP GE)
                                Demand                                                              46%                          days
  48%                                      Financial                        Institucio
                                  2%          Inst                                                                                33%
                                                                               nal
                                               6%                              55%

                                             Enterpris                                                                        91to 180
                      Time                                                                          1 to
                                                                                                     81
                                                e                                                                               days
                     Depo sit                                                                      360 days
                                               21%                                                                              13%
                      39%                                                                            8%




                                                                                                                                14/22
Foreign borrowings reflect basically the growth of the Trade Finance portfolio financed through lines
granted by foreign correspondent banks. The balance of IFC’s A loan, amounting to R$ 18.8 million
and maturing in September, is totally hedged against exchange and interest rate fluctuations since
its disbursement in October 2008.



Liquidity

On March 31, 2011, cash totaled R$ 2,339.8
million and, excluding Money Market                                 Free Cash – R$ MM
Funding (R$ 1,312.8 million), resulted in
free cash of R$ 1,027.0 million, equivalent                                                        1,027
to 58.4% of total deposits, including R$
197.7 million subscribed and paid till March                                  733
                                                          707
31, 2010, held in reserve for capitalization
until approved by the Central Bank of Brazil.
Bear in mind that the period for subscription
of    the   preemptive    rights    by    the
shareholders of Banco Indusval S.A. ended
on April 25, 2011, and the period for
subscription of the remaining reserved and                1Q10                4Q10                  1Q11
apportioned shares ended on May 2, 2011.




Capital Adequacy
The Basel Accord requires banks to maintain a minimum percentage of the capital weighted by the risk
in their operations. In this context, the Central Bank of Brazil has stipulated that banks operating in
the country should maintain a minimum percentage of 11.0%, calculated according to the Basel
Accord regulations, which provides greater security to Brazil’s financial system against oscillations in
economic conditions.

The following table shows Banco Indusval S.A.’s position in relation to the minimum capital
requirements of the Central Bank:



            Basel Index                           1Q11      4Q10      1Q10 1Q11/ 4Q10       1Q11/1Q10
            Total Capital                         563.7     426.4     443.1         32.2%      27.2%
            Required Capital                      261.8     266.6     231.4         -1.8%      13.2%
            Margin over Required Capital          301.9     159.8     211.7         89.0%      42.6%
            Basel Index                         23.7%      17.6%     21.1%     609.3%        262.0%




As mentioned in the previous item, the reference equity already includes the amounts subscribed up
to March 31, 2011, held for capital increase, and absorbs the negative net result of R$ 54.5 million,
mainly due to the additional allowance.




                                                                                                           15/22
Risk Ratings
                                                                                                                   Financial
         Agency                     Classification                     Obs.                   Last Report
                                                                                                                  Statements

                                     B+/Positive/B                    Global
    Standard & Poors                                                                          Dec. 28, 2010      Sept. 30, 2010
                              brBBB+/ Positive/ brA-3             National Brasil

                           Financial Strenghth: D- Stable
                                                                      Global
         Moody's                 Ba3/Stable/ Not Prime                                        Nov. 25, 2010      Sept. 30, 2010
                                                                  National Brasil
                                  A2br/ Stable/ BR-2
                                        10.02                    Riskbank Index
        RiskBank                                                                              April 20, 2011     Dec. 31, 2010
                                     Ranking: 56               Low Risk Short Term

      FitchRatings                  BBB/ Stable/ F3               National Brasil             Dec. 21, 2011      Sept. 30, 2010




Capital Market
Total shares
On March 31, 2011, Banco Indusval S.A. had a total of 41,212,984 shares, of which 27,000,000
were common shares (IDVL3) and 14,212,984 were preferred shares (IDVL4), with 746,853 held in
treasury. The shares from the capital increase will be issued only after the Central Bank’s approval,
in accordance with legislation.

Share Buyback Program
The 4th Share Buyback Program for the acquisition of up to 1,301,536 preferred shares, approved by
the Board of Directors on August 10, 2010, is effective till August 9, 2011. Indusval S.A. CTVM is the
intermediary for this program. Until March 31, 2011, a total of 772,453 preferred shares (IDVL4)
had been acquired under this program.

Free Float
                                                                                      Number of Shares as of 31.03.2011
                     Corporate          Controlling
        Type                                             Management            Treasury          Free Float          %
                      Capital             Group
    Common             27,000,000         (17,116,985)       (2,574,269)                  -          7,309,558        27.1%

    Preferred          14,212,984            (610,981)        (159,570)          (746,853)          12,299,964        86.5%

    TOTAL             41,212,984        (17,727,966)        (2,733,839)          (746,853)        19,609,522         47.6%



The 7,309,458 common shares in free float are owned by the Ribeiro and Ciampolini families, who
are not part of the controlling group. Thus, the preferred shares regularly traded on the stock
exchange total 12,299,964, equivalent to 29.8% of the total capital.

Stock Option Plan
The following Stock Option Plans were approved for the Company’s executive officers and managers,
as well as individuals who provide services to the Company or its subsidiaries:

•       Stock Option Plan I approved at the Extraordinary Shareholders’ Meeting of March 26, 2008.

•       Stock Option Plan II approved at the Extraordinary Shareholders’ Meeting of April 29, 2011.

•       Stock Option Plan III approved at the Extraordinary Shareholders’ Meeting of April 29, 2011.




                                                                                                                      16/22
The above-mentioned Stock Option Plans are filed in the IPE System of the Securities and Exchange
Commission of Brazil (CVM) and are also available for consultation on the Company’s IR website.

The table below shows the options granted by Banco Indusval S.A. under the Stock Option Plan I:

                                                                                 Quantity
    Data da                    Term for   Exercise
              Grace period                            Granted       Exercised            Extinct       Not Exercised
    outorga                    exercise   Price R$
   07/22/08     3 years         5 years       10.07     161,896              -                     -          161,896

   02/10/09     3 years         5 years        5.06     229,067         25,600                  10            203,457

   02/22/10     3 years         5 years        8.56     525,585              -              15,263            510,322

   08/06/10     3 years         5 years        7.72     261,960              -               2,524            259,436

   02/09/11     3 years         5 years        8.01     243,241              -                     -          243,241

                                                      1,421,749        25,600               17,797         1,378,352

No option was granted till date under the Stock Option Plans II and III.


Shareholder Remuneration
On April 7, 2011, the Bank paid Interest on Equity in the amount of R$ 4.2 million related to 1Q11,
as advance payment of the minimum mandatory dividend for 2011. This amount corresponds to R$
0.10477 per share or R$ 0.08905 net of withholding income tax.

Share Performance
The shares of Banco Indusval (IDVL4) closed 1Q11 at R$ 9.02, for market cap of R$ 365.0 million,
including the shares on March 31, 2011 and excluding treasury stock. The price of IDVL4 shares
appreciated 13.46% in 1Q11 and 5.5% in 12 months, while the Ibovespa index dropped 1.04% and
2.54%, respectively.


                                   Share Price Evolution in the last 12 months



                      130


                      120


                      110


                      100


                          90


                          80                                      IBOVESPA       IDVL4


                          70
                     5/ 010




                               10




                               10




                     1/ 011




                     3/ 011




                               11
                              10




                                0

                              10
                     6/ 010

                                0



                     8/ 010

                                0



                                0




                                0




                     2/ 011

                                1




                       12 1

                                1
                    12 201
                             01




                             01



                             01




                    11 201




                             01



                             01

                             01
                            20




                            20




                            20
                            20




                            20
                            2

                          /2

                          /2




                          /2

                          /2



                          /2




                            2

                          /2

                          /2

                            2

                          /2

                          /2
                         4/



                         3/

                         3/
                         7/




                         6/




                         4/




                         2/




                         3/




                         2/
                          /
                       27

                       16




                       26

                       15



                       24




                        /3




                       22

                       11



                       23
                       5/




                       7/




                       9/




                       1/




                       3/




                       5/
                      /1



                      /2

                      /1
                     11
                     7/




                     9/




                     4/
                    10




Liquidity and Trading Volume

The preferred shares of Banco Indusval (IDVL4) were traded in 98% of the sessions in 1Q11 and in
the past 12 months. In 1Q11, a total of 3.7 million IDVL4 shares were traded over 1,272



                                                                                                               17/22
transactions on the spot market, for total volume of R$ 32 million. In the past 12 months, the
volume traded on the spot market was R$ 90.7 million, representing approximately 11.1 million
preferred shares over 3,990 trades.

Shareholder Base

Detailed distribution of preferred capital:

                                                  March 31/ 2011                          Dec.31/ 2010
                                       #                            %
   Type of Shareholder                       Qty PN       % PN              # Inv.   Qty PN       % PN     % Total
                                      Inv.                         Total
   Controlling Group                   4      1,062,453    7.48%   44.11%     4       1,026,653   7.20%     44.00%
   Management                         10       159,570     1.12%    6.63%    10        159,570    1.10%      6.60%
   Families                           14       539,931     3.80%   19.05%    12        515,931    3.60%     19.00%
   National Institutional Investors   57      7,273,467   51.17%   17.65%    47       7,332,667   51.60%    17.90%
   Foreign Investors                  11      2,818,399   19.83%    6.84%    12       2,842,625   20.00%     6.90%
   Corporates                         11        26,100     0.18%    0.06%     9         17,400    0.10%      0.00%
   Individuals                        437     1,586,211   11.16%    3.85%    514      1,571,341   11.10%     3.80%
   Treasury                            0       746,853     5.25%    1.81%     -        746,797    5.20%      1.80%
   TOTAL                              544    14,212,984     100%     100%    608     14,212,984    100%       100%




Subscription of Shares

On March 23, 2011, the Board of Directors approved a capital increase, within the authorized
capital, through a private subscription to new shares, at the issue price of R$ 9.20 per common and
preferred share, under the same conditions as the shares existing on that date.

As announced in the Notice to Shareholders dated March 24, 2011, the period for subscription of the
preemptive rights and for reservation of unsubscribed shares ended on April 25, 2011. In the period,
a total of 9,585,090 common shares and 11,947,060 were subscribed for a total amount of R$
198,095,780.00. In the same period, a firm order was placed for subscription of the 360,559
unsubscribed common shares amounting to R$ 3,317,142.80, guaranteeing a minimum capital
increase of R$ 201,412,922.80.

As announced in the Notice to Shareholders on April 27, 2011, since the reservations for
subscriptions of unsubscribed shares were fewer than the unsubscribed shares available, all the
reservation orders were approved for exercise between April 28, 2011 and May 2, 2011.

After the subscription of the preemptive rights and apportionment of unsubscribed shares, a total of
9,945,649 common shares and 11,947,060 preferred shares were subscribed and paid, which were
represented by subscription receipts amounting to R$ 201,412,922.80, deposited at the Central
Bank of Brazil until its ratification, when they will be substituted by shares in the shareholders’
custody. The subscription receipts are available for trading on the Bovespa under the tickers IDVL9
and IDVL10.




                                                                                                            18/22
Elected Statutory Bodies

Board of Directors: (elected at the AGM held on April 29, 2011 and subject to the approval of the Central
Bank of Brazil)

    Manoel Felix Cintra Neto     – Executive Chairman
    Antonio Geraldo da Rocha
    Carlos Ciampolini
    Jair Ribeiro da Silva Neto
    Luiz Masagão Ribeiro
    Alain JP Belda               –   Independent   member
    Alfredo de Goeye Junior      –   Independent   member
    Guilherme Afonso Ferreira    –   Independent   member
    Walter Iorio                 –   Independent   member


Executive Office: elected at the Board of Directors meeting held on May 06, 2011 subject to the approval of
the Central Bank of Brazil)
    Jair Ribeiro da Silva Neto   –   Co-CEO
    Luiz Masagão Ribeiro         –   Co-CEO
    André Mesquita               –   Vice-President - Products & Corporate FInance
    Francisco Paulo Cote Gil     –   Vice-President - Commercial
    Gilberto Faiwichow           –   Vice-President - Treasury
    Gilmar Melo de Azevedo       –   Vice-President – Special Loans
    Katia Ap Rocha Moroni        –   Vice-President - Trade Finance, Syndications, Funding & IR
    Eliezer L Ribeiro da Silva   –   Officer – Middle Market Credit Dept.


Supervisory Board:
As per the A.G.M. of April 29, 2011, the Supervisory Board will be operative during FY 2011 with the
members that acted during 2010 reelected, to mention:
    Francisco de Paula dos Reis Jr - Accountant
    Jairo da Rocha Soares            – Accountant, Auditoe and Economist
    Luiz Alberto de Castro Falleiros – Economist




                                                                                                  19/22
BALANCE SHEET
     Consolidated                                                                                    R$ '000
     Assets                                                             3/31/2010    12/31/2010    3/31/2011
     Current                                                            2,516,462     2,672,676    3,818,699

      Cash                                                                  2,949         7,081        3,897

      Short-term interbank investments                                    374,362        44,648      563,227
       Open market investments                                            311,163        22,507      540,959
       Interbank deposits                                                  63,199        22,141       22,268

      Securities and derivative financial instruments                     975,295      1,255,106    1,819,265
        Own portfolio                                                     443,867        586,517      658,024
        Subject to repurchase agreements                                  398,223        540,385      781,924
        Linked to guarantees                                               93,303         92,751      134,012
        Subject to the Central Bank                                                                   198,683
        Derivative financial instruments                                   39,902        35,453        46,622

      Interbank accounts                                                    4,235         1,553        2,106
        Payment and receipts pending settlement                               940             -        1,092
        Restricted credits - Deposits with the Brazilian Central Bank      3,295          1,553        1,014
      Loans                                                               782,771       920,861      842,536
        Loans - private sector                                            789,212       933,827      890,506
        Loans - public sector                                               21,767         9,137        4,247
        (-) Allowance for loan losses                                     (28,208)      (22,103)     (52,217)
      Other receivables                                                   337,075       400,319      539,599
        Foreign exchange portfolio                                       324,835        325,586      397,698
        Income receivables                                                    642             85           13
        Negotiation and intermediation of securities                      17,033         75,341        63,055
        Sundry                                                              3,708          4,756       97,269
        (-) Allowance for loan losses                                      (9,143)       (5,449)     (18,436)
      Other assets                                                         39,775        43,108       48,069
        Other assets                                                       40,499        43,538       49,447
        (-) Provision for losses                                           (1,420)       (1,915)      (2,505)
        Prepaid expenses                                                       696         1,485        1,127

     Long term                                                           518,989       590,638      515,696

      Marketable securities and derivative financial instruments            4,083         6,151        6,614
        Linked to guarantees                                                  36             31           31
        Derivative financial instruments                                   4,047          6,120        6,583
                                                                                                         31
      Interbank Accounts                                                   10,681         7,352        7,140
        Pledged Deposits - Caixa Economica Federal                        10,681          7,352        7,140
      Loans                                                               427,513       503,536      484,806
        Loans - private sector                                            497,331       595,564      624,937
        Loans - public sector                                               3,479             -            -
        (-) Allowance for loan losses                                     (73,297)      (92,028)    (140,131)
      Other receivables                                                    75,332        72,703       16,469
        Trading and Intermediation of Securities                                74          244           243
        Sundry                                                             75,323        72,503       17,994
        (-) Allowance for loan losses                                         (65)          (44)      (1,768)
      Other rights                                                          1,380           896          667
        Prepaid Expenses                                                    1,380           896          667

     Permanent Assets                                                     13,104        12,828       12,410

      Investments                                                           1,686         1,686        1,686
        Other investments                                                   1,686         1,686        1,686
      Property and equipment                                               11,418        11,142       10,724
        Property and equipment in use                                        2,179         2,192        2,192
        Revaluation of property in use                                       3,538         3,538        3,538
        Other property and equipment                                       12,379        12,515       12,511
        (-) Accumulated depreciation                                       (6,970)       (7,103)      (7,517)
        Leasehold Improvements                                                 292
                                                                               300             -            -
                                                                                                            -
     TOTAL ASSETS                                                       3,048,555     3,276,142    4,346,805




                                                                                                                20/22
Consolidated                                                                                 R$ '000
Liabilities                                               3/31/2010       12/31/2010       3/31/2011
Current                                                   1,895,649        2,074,519       2,780,139

  Deposits                                                  725,274          820,679         761,590
   Cash deposits                                             41,707           47,682          38,240
   Interbank deposits                                        42,510          105,393         105,087
   Time deposits                                            640,801          667,133         617,356
   Other                                                        256              471             907
  Funds obtained in the open market                         605,650          538,580        1,312,773
    Own portfolio                                           395,980          538,580         776,286
    Third party portfolio                                   209,670                          462,999
    Free cash portfolio                                                                       73,488
  Funds from securities issued or accepted                    8,665           74,648          88,319
    Agribusiness Letter of Credit & Bank Notes                8,665           74,648          88,319
  Interbank accounts                                            476                    -         475
    Receipts and payment pending settlement                     476                    -         475
  Interdepartamental accounts                                 9,947            5,898           9,004
    Third party funds in transit                              9,947            5,898           9,004
  Borrowings                                                389,450          324,800         350,689
   Foreign borrowings                                       389,450          324,800         350,689
  Onlendings                                                 42,074           43,297          44,025
   BNDES                                                     19,569           18,087          16,131
   FINAME                                                    22,505           25,210          27,894
  Other liabilities                                         114,113          266,617         213,264

    Collection and payment of taxes and similar charges         818              571             650
    Foreign exchange portfolio                               22,164           22,002          62,996
    Taxes and social security contributions                   2,932            4,474           9,590
    Social and statutory liabilities                          2,352            3,661           5,534
    Negotiation and intermediation securities                24,155          195,316          77,938
    Derivative financial instruments                         55,228           34,184          45,398
    Sundry                                                    6,464            6,409          11,158

Long Term                                                  721,751          774,736        1,002,235

  Deposits                                                  629,625          674,941         901,534
                                                                  -
    Interbank Deposits                                            -           11,088           8,392
    Time deposits                                           629,625          663,853         893,142
  Funds from securities issued or accepted                            -        7,345           7,571
    Agribusiness Letter of Credit & Bank Notes                  -             7,345            7,571
  Loan obligations                                           18,984              549                   -
    Foreign loans                                            18,984              549                   -
  Onlending operations - Governmental Bureaus                66,663           84,354          92,984
   Federal Treasure                                          19,299                -          12,694
   BNDES                                                      3,161           28,154          30,445
   FINAME                                                    39,621           39,856          47,852
   Other Institutions                                         4,582           16,344           1,993
  Other liabilities                                           6,479            7,547             146
    Taxes and social security contributions                   5,815            5,647             117
    Derivative financial instrument                             482                -              29
    Sundry                                                      182            1,900               -
Future results                                                  423              462             701

Shareholders' Equity                                       430,732          426,425         563,730
  Capital                                                   370,983          370,983         568,665
  Capital Reserve                                              1,016            2,212           2,540
  Revaluation reserve                                          1,978            1,928           1,911
  Profit reserve                                             63,322           55,812           55,812
  (-) Treasury stock                                         (6,898)          (5,957)         (5,958)
  Asset valuation Adjustment                                     331            1,447           (553)
  Accumulated Profit / (Loss)                                      -                -        (58,687)

    TOTAL LIABILITIES                                     3,048,555        3,276,142       4,346,805




                                                                                                           21/22
INCOME STATEMENT

                                                                             R$ '000
     Consolidated                                       1Q10       4Q10        1Q11
     Income from Financial Intermediation              114,386    115,930    118,123
        Loan operations                                 61,153     68,758     64,312
        Income from securities                          24,272     24,198     40,713
        Income from derivative financial instruments    1,638      14,239      5,437
        Income from foreign exchange transactions       27,323      8,735      7,661
     Expenses from Financial Intermediaton              79,167     81,396    179,487
       Money market funding                             38,792     60,052     71,972
       Loans, assignments and onlendings                28,923      7,833      5,866
       Income from derivative financial instruments          -          -          -
       Allowance for loan losses                        11,452     13,511    101,649
     Gross Profit from Financial Instruments            35,219     34,534    (61,364)
     Other Operating Income (Expense)                  (24,429)   (28,400)   (28,900)
       Income from services rendered                      2,831      4,041      3,466
       Income from tariffs                                  195        265        237
       Personnel expenses                              (12,422)   (15,700)   (16,139)
       Other administrative expenses                    (9,331)   (11,258)   (11,383)
       Taxes                                            (3,188)    (4,234)    (3,549)
       Other operating income                               990      1,521      4,570
       Other operating expense                          (3,504)    (3,035)    (6,102)
     Operating Profit                                   10,790      6,134    (90,264)
     Non-Operating Profit                                  (16)     1,417       (483)
     Earnings before taxes ad profit-sharing            10,774      7,551    (90,747)
     Income tax and social contribution                   (947)      (499)    38,394
     Income tax                                             162        154      (461)
     Social contribution                                     97        183      (277)
     Deferred fiscal assets                             (1,206)      (836)    39,132
     Contributions and Equity                           (2,482)    (1,159)    (2,111)

     Net Profit for the Period                          7,345      5,893     (54,464)




                                                                                    22/22

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Earnings Release Report 1Q11

  • 1. 1Q11 Results New Partners, Capital Increase, Strenghthened Management and Operating Agreement with Sertrading São Paulo, May 11, 2011 – Banco Indusval S.A., financial institution focused on corporate lending, operating in the Brazilian market for over 40 years, listed at the Stock, Commodities and Futures Exchange - BM&FBOVESPA under tickers IDVL3 and IDVL4, announces its financial results for the first quarter of 2011 (1Q11). Highlights of the Period IDVL4: R$ 8.98 per share Closing: 05/11/2011 Capital increase of R$ 201 million, subscribed by Total shares: 41.212.984 Warburg Pincus, as well as the controlling Market Cap: R$ 370.1 MM shareholders of Sertrading and of Indusval. + 21.892.709 Subscription receipts = R$ 566.7 MM Market Cap Acquisition of minority interest in Sertrading, with the signing of an operating agreement for the acquisition of its foreign trade receivables. Conference Calls/ Webcasts: 05/12/2011 JP Morgan also participates in the deal through a US$ 25 million loan for operational expansion, with In English the right to acquire subscription warrants to 11h00 (Brasília) / 10h00 (US EST) preferred shares up to 2.5% of the Bank’s capital. Connection USA:+1 786 924-6977 Connection Brazil:+55 11 4688-6361 Code: Banco Indusval The Bank’s management is strengthened with the election of new members to the Board of Directors and Executive Board who will bring corporate and In Portuguese financial expertise, as well as international 10h00 (Brasília) / 9h00 (US EST) experience. Phone: +55 11 4688-6361 Code: Banco Indusval New Vision and Strategy: Innovation and excellence in corporate lending, as well as leadership in the fixed-income capital market. Website: www.indusval.com.br/ir 1/22
  • 2. Summary Nessage from the Management............................................................... 3 The Transaction................................................................................................ 3 Strengthned Management…………......................................................................... 5 First Quarter Results…………................................................................................ 6 Key Indicators…………............................................................................. 7 Operating Performance…........................................................................ 8 Credit Portfolio…….................................................................................. 10 Funding................................................................................................. 14 Liquidity............................................................................................... 15 Capital Adequacy................................................................................. . 15 Risk Ratings.......................................................................................... 16 Capital Market………............................................................................... 16 New Statutory Bodies Elected……………………............................................... 19 BALANCE SHEET…………........................................................................... 20 INCOME STATEMENT.……………………........................................................... 22 2/22
  • 3. Message from the Management The first quarter of 2011 marks a new chapter in Indusval’s history. During 43 years of the Indusval brand’s existence, we witnessed decisive moments in the evolution of our businesses: from brokerage to bank in 1991; the merger with Multistock in 2003; the sale of the Direct Consumer Credit operation in 2004; inauguration of the first branch offices outside São Paulo in 2006; the IPO in 2007; the strategic rethink in 2010; and in 2011, the signing of the Agreements object of a Material Fact disclosed on March 22, 2011, and adopted the new brand BANCO INDUSVAL & PARTNERS to reflect this new phase. More than merely increasing the capital structure to support the growth of our operations, the new agreements represent a significant leap towards the adoption of a new vision to make us an innovative bank that excels in corporate lending through a profound knowledge of our clients’ operations and the sectors in which they operate, and become a leader in the growing corporate bonds market in Brazil in the medium and long terms. This vision was developed in partnership with our new partners and managers who are adding their entrepreneurship skills, expertise in the management of companies and financial institutions, their foreign trade background and knowhow of the agribusiness dynamics and processes. In addition, this operation will add Sertrading’s important and diversified client base that is complementary to Indusval’s client portfolio, as well as its global relations and international experience. The objective is clear: to return our historical growth levels through the generation of high quality assets in the middle and upper middle markets, while reducing our credit risk through an in-depth knowledge of our clients’ operations, besides expanding the offering of financial products, reinforcing our generation of recurring revenue from services. This transformation is already underway. The professionals working in the new product areas are already structuring their teams, and concluded their short-, medium- and long-term strategic plan. Our financial statements should soon show the initial signs. However, our value proposition should materialize with greater consistency in the medium and long terms. The Transaction: • Expansion of the Capital Base: To strengthen and expand Banco Indusval’s capital base with the aim of growing its assets with a stronger structure, the capital was increased by R$ 201 million through the admission of new partners and a private subscription to new shares, as follows: - R$ 150 million – Warburg Pincus - R$ 30 million – Controlling shareholders of Sertrading - R$ 21 million – Controlling shareholders of Banco Indusval This partial capital increase was approved by the Company’s Board of Directors on May 6, 2011 and is subject to approval of the Central Bank of Brazil. • Important Strategic Partner: Warburg Pincus is one of the world’s largest private equity funds. They have invested approximately US$37 billion in over 600 companies across 30 countries in its 40 years of history. One of its specialties is investing in finance companies and it has already invested approximately US$ 8 billion in 66 financial services institutions worldwide. It is currently a shareholder in more than 12 banking institutions in the United States, Asia and Europe. After subscribing and paying its stake in the Bank’s capital through WP X Fundo de Investimento em Participações, Warburg Pincus signed a Shareholders’ Agreement that includes the right to appoint a member to the Board of Directors. The fund appointed its CEO 3/22
  • 4. in Brazil, Mr. Alain Belda, former Chairman and CEO of Alcoa (USA) and current member of the Board of Directors of Citibank (USA). This is the first significant investment by a large international private equity fund in a Brazilian credit bank, which opens up new long-term funding avenues for Brazil’s financial sector. • Capital Injection in Sertrading S.A. and Operating Agreement: On April 1, 2011, Banco Indusval invested R$ 25 million by subscribing to the common shares as part of a capital increase at Sertrading, one of the biggest logistics and foreign trade services companies in Brazil. Founded in 2001, Sertrading's main shareholders are Alfredo De Goeye Junior, Jair Ribeiro da Silva Neto and Mineração Santa Elina Indústria e Comércio S.A. With this investment, the bank will hold a 17.7% minority interest in Sertrading. The table presents Sertrading’s key financial data: Growth R$ Million 2010 2009 (%) Foreign Trade Volume transacted R$ 1,600.0 R$ 1,100.0 45% Net Income R$ 502.5 R$ 345.8 45% Operating Profit R$ 30.4 R$ 15.1 101% Net Profit R$ 12. 8 R$ 6.3 103% EBITDA R$ 30.9 R$ 16.2 91% On April 1, 2011, the Bank also executed: - a Shareholders’ Agreement with the controlling shareholders of Sertrading regulating (a) the Bank’s option to acquire the remaining capital of the company in the next 2 years; (b) the appointment of two (2) members to the Board of Directors; and (c) veto rights on specific matters, including mergers and acquisitions and significant indebtedness; and - an Operating Agreement, valid for 5 years, with preemptive rights for the acquisition of receivables generated by its foreign trade activities. Note that during its 10 years of operations, Sertrading has never registered any default on its receivables, thanks to the quality of its clients and its close monitoring of their operations. The Bank plans to obtain several synergies from the Sertrading deal, especially (i) to expand its operations in the foreign trade platform to gain access to bigger clients, thus broadening its quality-asset generation base; (ii) to increase the visibility of its clients’ operational chain, mitigating the risks of these operations and expanding the offering of corresponding financial products; and (iii) cross-selling of the bank’s financial products to Sertrading’s client base. • Acquisition of agricultural bond issuer: On April 15, 2011, the Bank acquired 100% of the capital of Serglobal Comércio de Cereais Ltda, an issuer of agricultural bonds, as well as the portfolio and team that invests in Sertrading’s Rural Product Certificates, for R$ 15 million. The transaction signifies the transfer of Sertrading’s expertise in the past 8 years to the bank. The objective is to expand the bank’s operations to certain segments in the agricultural sector in which the team absorbed from Sertrading has significant expertise. • Agreement with J.P. Morgan: Through the agreements signed on March 22, 2011: − J.P. Morgan will grant to the Bank a US$ 25 million loan, with a 2-year term and half- yearly interest payments; and − J.P. Morgan has committed to subscribe in the future to Banco Indusval’s preferred stock warrants representing 2.5% of its capital. J.P. Morgan will neither join the controlling block of shareholders nor participate in the management of Banco Indusval. 4/22
  • 5. Strengthened Management: After duly approved by the Central Bank, Manoel Felix Cintra Neto will take office as Chairman of the Board of Directors, while Luiz Masagão Ribeiro and Jair Ribeiro da Silva Neto take office as Joint CEOs. Jair Ribeiro da Silva Neto was one of the founders and served as the chairman of Banco Patrimônio (1988-1999), chairman of Banco Chase Manhattan S.A. and executive officer at JP Morgan Chase (NY) (2000-2003). More recently, he was a shareholder, the CEO and chairman of CPM Braxis S.A. (2005-2010), one of Brazil’s largest IT services companies, whose control was sold in October 2010 to an industry giant: the European Cap Gemini. Jair Ribeiro will lead the commercial, funding, treasury, products and corporate finance areas, while the co-CEO Luiz Masagão will focus on the credit, risk, compliance, IT, legal and administrative areas. By dividing the areas between two executive officers and seasoned shareholders, we seek to achieve excellence in all of the bank operations related to corporate loans and financial services. The following executives also joined the bank in April 2011: − Francisco Cote Gil (Commercial Vice-President) was partner and executive officer at BBA and Itaú BBA (1990 – 2009) and executive officer at Banco Crefisul de Investimento (Citibank), where he worked for 18 years. − Gilberto Faiwichow (Treasury Vice-President) worked as treasurer at ING (Brazil) (1989 – 1992), partner at Black River Asset Management (Cargill Group) (2005 – 2008) and co- founder and treasurer of Banco Rendimento (1992 – 2000). − André Mesquita (Products & Corporate Finance Vice-President) served as COO of Cotia Trading (Argentina) (1996 – 2000), was co-founder of Sertrading (2001- 2011) and former CFO of CPM Braxis (2005 – 2011). Katia Moroni, currently executive officer at the bank, she will serve as Vice-President of Trade Finance, Syndications, Funding and Investor Relations. Gilmar Melo de Azevedo, current executive officer of the bank, will serve as Vice-President for Special Credits, reporting to Mr. Manoel Cintra, and will be responsible to manage the credit renegotiation and recovery for lower quality loans. Eliezer L. Ribeiro da Silva, current executive officer, takes the responsibility for the Credit Department for midsized companies. With the aim of constantly improving our governance, Alain Belda (Warburg Pincus), Alfredo de Goeye Junior (CEO of Sertrading), Guilherme Afonso Ferreira (Bahema) and Walter Iorio (former KPMG) will serve as Independent Members of our Board of Directors, after duly approved by the Central Bank of Brazil. First Quarter Results The 1Q11 results do not yet reflect the effects of this partnership, except for the expenses already provisioned, resulting from the negotiation and restructuring process. For the bank, the first quarter was a period of intense planning and negotiation of the operations described above. Loan operations remained stable in relation to 4Q10, while increasing 14.4% from 1Q10. The most important aspect in terms of results was the R$ 67 million increase in allowance for loan losses and the increase in loans overdue more than 60 days, which generated expenses with 5/22
  • 6. allowance for loan losses of R$ 101.6 million, raising the balance for loan loss allowances to R$212.6 million, signifying 183% cover of the loans overdue more than 60 days. The increased allowance, announced in the Material Fact notice dated March 22, 2011, aims to safeguard the profitability of the bank’s future operations, segregating any credit problems resulting from loans granted during the economic crisis. This decision provides greater comfort to the new shareholders and management members so that they may focus their attention and efforts on devising the new business strategy. Thus, it was a conservative and one-off measure adopted to pave the way for periods of lower fluctuations in profitability and growth. Also worth pointing out is the high liquidity of our balance sheet: cash of R$ 1.0 billion, equivalent to 58% of total deposits, reflecting the management’s conservative approach and the capital increase carried out in late March, which brought Indusval one of the highest capital adequacy (Basel) ratios in the market: 24%. This high liquidity is unique in the market and places the bank in a privileged position for the new pace of growth defined by the new shareholders and strategy. 6/22
  • 7. Key Indicators The financial and operating information presented in this report are based on consolidated financials prepared in millions of Reais (local currency), according to Brazilian GAAP (BRGAAP). Results 1Q11 4Q10 1Q10 1Q11/ 4Q10 1Q11/1Q10 Financial Intermediation Income 118.1 115.9 114.4 1.9% 3.3% Financial Interm. Expenses bef. ALL (77.8) (67.9) (67.7) 14.7% 14.9% Result from Financial Int. before ALL 40.3 48.0 46.7 -16.2% -13.7% 1 ALL Expenses (101.6) (13.5) (11.5) 652.3% 787.6% Result from Financial Intermediation (61.4) 34.5 35.2 -277.7% -274.2% Recurring Operating Result (87.5) 6.4 11.2 -1459.2% -880.6% Non-Recurring Operating Expenses (2.7) (0.3) (0.4) 788.6% 540.6% Operating Result (90.3) 6.1 10.8 -1571.5% -936.5% Net Profit (Loss) (54.5) 5.9 7.3 -1024.2% -841.5% Assets & Liabilities 1Q11 4Q10 1Q10 1Q11/ 4Q10 1Q11/1Q10 Loan Portfolio 1,890.2 1,876.9 1,655.6 0.7% 14.2% Loan Portfolio + Guarantees and L/Cs 1,966.6 1,941.2 1,719.0 1.3% 14.4% Cash & Short Term Investments 567.1 51.7 377.3 996.3% 50.3% Securities and Derivatives 1,825.9 1,261.3 979.4 44.8% 86.4% Total Assets 4,346.8 3,276.1 3,048.6 32.7% 42.6% Total Deposits 1,759.0 1,577.6 1,363.6 11.5% 29.0% Open Market 1,312.8 538.6 605.7 143.7% 116.8% Foreign Borrowings 350.7 325.3 408.4 7.8% -14.1% Domestic On-lending 137.0 127.7 108.7 7.3% 26.0% Shareholders’ Equity 563.7 426.4 430.7 32.2% 30.9% Performance 1Q11 4Q10 1Q10 1Q11/ 4Q10 1Q11/1Q10 Free Cash 1,027.0 732.8 707.1 40.1% 45.2% NPL 60 days/ Loan portfolio 6.1% 3.8% 3.5% 2.3 p.p. 2.6 p.p. NPL 90 days/ Loan portfolio 4.6% 3.3% 2.8% 1.4 p.p. 1.8 p.p. 2 Basel Index 23.7% 17.6% 21.1% 6.1 p.p. 2.6 p.p. ROAE -37.3% 5.6% 7.0% -42.9 p.p. -44.2 p.p. Net Interest Margin (NIM) 4.6% 6.5% 7.0% -1.9 p.p. -2.5 p.p. Adjusted Net Interest Margin (NIMa) 5.9% 7.9% 8.5% -2.0 p.p. -2.7 p.p. 3 Efficiency Ratio 80.9% 65.7% 61.0% 15.2 p.p. 19.9 p.p. Efficiency Ratio (excl. non-recurring Expenses) 72.3% 64.3% 60.2% 8.0 p.p. 12.1 p.p. Other Information 1Q11 4Q10 1Q10 1Q11/ 4Q10 1Q11/1Q10 Number of Corporate Clients 707 709 680 -0.3% 4.0% Number of Employees 357 362 350 -1.4% 2.0% Details in the respective sessions of this report 1 1Q11 additional Loan loss Allowances incl. 2 1T11 partial capitalization under reserves 3 non-recurring expenses included Banco Indusval & Partners (BI&P) is a commercial bank with 43 years of experience in the financial markets, focusing on local and foreign currency corporate loan products. The Bank relies on a network of 11 branches strategically located in economically relevant Brazilian regions, including an offshore branch, and its brokerage firm operating at the São Paulo Stock, Commodities and Futures Exchange - BM&FBOVESPA. The Bank is a publicly-held financial institution listed at Level 1 Corporate Governance of the BM&FBOVESPA since July 2007 and voluntarily adopts additional practices specific to companies listed in the Novo Mercado special trading segment. 7/22
  • 8. Operating Performance Profitabilty Financial Intermediation 1Q11 4Q10 1Q10 1Q11/ 4Q10 1Q11/1Q10 Financial Intermediation Revenues 118.1 115.9 114.4 1.9% 3.3% Loan Operations 64.3 68.8 61.2 -6.5% 5.2% Loans & Discounts Receivables 60.3 61.3 52.1 -1.7% 15.8% Financing 3.6 4.5 6.5 -20.6% -44.8% Other 0.4 2.9 2.6 -85.7% -83.8% Securities 40.7 24.2 24.3 68.2% 67.7% Derivative Financial Instruments 5.4 14.2 1.6 -61.8% 231.9% FX Operations Result 7.7 8.7 27.3 -12.3% -72.0% Financial Intermediation Expenses 179.5 81.4 79.2 120.5% 126.7% Money Market Funding 72.0 60.1 38.8 19.8% 85.5% Time Deposits 46.4 41.7 29.5 11.1% 57.2% Repurchase Transactions 22.3 16.1 8.3 38.8% 168.3% Interbank Deposits 3.3 2.3 1.0 46.9% 238.0% Loans, Assign. & Onlending 5.9 7.8 28.9 -25.1% -79.7% Foreign Borrowings 3.6 5.8 26.3 -37.0% -86.2% Dom. Borrowings+Onlending 2.2 2.1 2.7 8.2% -16.0% Allowance for Loan Losses 101.6 13.5 11.5 652.3% 787.6% Financial Intermediation Result (61.4) 34.5 35.2 -277.7% -274.2% Result from Financial Intermediation, detailed in notes 15.a and 15.b to the quarterly financial statements, reflects the stability in the income from financial intermediation in the quarter. The increase in funding expenses was mainly due to the higher funding volume and, consequently, higher cash balance in the period, which resulted in higher income from securities operations. The R$ 67 million increase in allowance for loan losses and the increase in loans overdue more than 60 days resulted in provisioning expenses of R$ 101.6 million for loan losses, raising the allowance of loan losses to R$ 212.6 million, with a 183% cover of the loans overdue more than 60 days. The increased allowance, announced in the Material Fact notice, aims to safeguard the profitability of the bank’s future operations, segregating any credit problems resulting from loans granted during the economic crisis. This decision provides greater comfort to the new shareholders and management members so that they may focus their attention and efforts on devising the new business strategy. Net Interest Margin Net Interest Margin (*) 1Q11 4Q10 1Q10 1Q11/ 4Q10 1Q11/1Q10 A. Result from Financial Int. before ALL 40.3 48.0 46.7 -16.2% -13.7% A1'' Adjustment FX fluctuation *1 (1.5) (0.4) (0.0) 241.4% 70658.8% A.a Adj. Financial Interm Result before ALL 38.8 47.6 46.7 -18.5% -16.8% B. Average Interest bearing Assets 3,583.1 3,036.4 2,720.1 18.0% 31.7% Zero remuneration average assets adjustment (881.2) (561.5) (484.6) 56.9% 81.8% B.a Adj Average Interest bearing Assets 2,701.9 2,474.9 2,235.5 9.2% 20.9% Net Interest Margin (NIM) (A/B) 4.6% 6.5% 7.0% -0.3 p.p. -0.4 p.p. Adj.Net Interest Margin (NIMa) (Aa/Ba) 5.9% 7.9% 8.6% -2.0 p.p. -2.7 p.p. (*) annualized *1 FX changes from ADR deals deducted from other Operating Expenses 8/22
  • 9. Net interest margin (NIM) stood at 4.6%, mainly due to the higher carry-forward of cash. Adjusted net interest margin (NIMa) stood at 5.9%, reflecting the foreign exchange effects on financial intermediation and exclusion from the remunerable asset base the average balances of assets with a balancing item of equal amount, interest rate and tenor in repo operations under liabilities. Efficiency Ratio Efficiency Ratio 1Q11 4Q10 1Q10 1Q11/ 4Q10 1Q11/1Q10 Personnel Expenses 14.7 15.4 12.4 -4.2% 18.7% Contributions and Profit-sharing 2.1 1.2 2.5 82.1% -14.9% Administrative Expenses 11.4 11.3 8.9 1.1% 27.8% Taxes 3.5 4.2 3.2 -16.2% 11.3% Other Operating Expenses 4.8 3.0 3.5 57.1% 36.0% A1'- Recurring Operating Expenses 36.6 35.1 30.5 4.2% 19.9% A1'' Adjustment FX fluctuation *1 (1.5) (0.4) (0.0) 241.4% n.m. A1- Adj. Recurring Operating Exp. 35.1 34.7 30.5 1.3% 15.1% Personnel Expenses*2 1.4 0.3 0.0 353.6% n.m. Administrative Expenses*3 0.0 0.0 0.4 n.m. n.m. Other Operating Expenses*4 1.3 0.0 0.0 n.m. n.m. A2- Total Adjusted Op. Expenses 2.7 0.3 0.4 788.6% 540.6% A- Operating Expenses Total 37.8 35.0 30.9 8.2% 22.3% Gross Income Fin. Interm. (w/o ALL) 40.3 48.0 46.7 -16.2% -13.7% Income from Services Rendered 3.5 4.0 2.8 -14.2% 22.4% Income from Banking Tariffs 0.2 0.3 0.2 -10.6% 21.5% Other Operating Income 4.6 1.5 1.0 200.5% 361.6% B- Operating Income Total 48.6 53.9 50.7 -9.9% -4.2% Recurring Efficiency Ratio (A1/B) 72.3% 64.3% 60.2% 8.0 p.p. 12.1 p.p. Efficiency Ratio (A/B) 77.9% 64.9% 61.0% 13.0 p.p. 16.9 p.p. *1 FX expenses from ADR deals accounted under Other operating expenses deducted *2 Taxes and indemnifications- dismissals *3 Consultancy expenses *4 Investment Agreement Expenses- Lawyers, Auditors, etc. The efficiency ratio in 1Q11 was impacted by non-recurring expenses of R$ 2.7 million (R$ 0.3 million in 4Q10 and R$ 0.4 million in 1Q10) in other operating expenses. These expenses are related to amounts and charges provisioned and/or paid as severance pay to employees terminated (R$ 1.4 million), additional labor contingency provisions (R$ 0.8 million) and expenses related to the Investment Agreement (R$ 0.5 million paid to auditors, lawyers, etc.). The efficiency ratio adjusted for non-recurring expenses came to 72.3% in the quarter, versus 64.3% in 4Q10 and 60.2% in 1Q10. We understand that this ratio is still high and shall be normalized with the gradual asset growth and cash reduction. Net Profit The results of the quarter reflect the expenses pursuant to the Management’s decision in line with the negotiations under the Investment Agreement, preparing the Bank for its new phase. The main impact results from expenses with allowance for loan losses, amounting to R$ 101.6 million, including the constitution of additional allowance of R$ 67 million, and non-recurring expenses of R$ 2.7 million related to severance pay, labor contingencies and costs related to the structuring of the investment agreement, as detailed above. 9/22
  • 10. Credit Portfolio On March 31, 2011, the Credit Portfolio, which includes guarantees, sureties and letters of credit, detailed in Note 6 to the Financial Statements, totaled around R$ 2.0 billion, up 14.4% from 1Q10. Credit Portfolio by Product 1Q11 4Q10 1Q10 1Q11/ 4Q10 1Q11/1Q10 Loan Operations 1,527.2 1,550.9 1,348.2 -1.5% 13.3% Loans & Discounted Receivables 1,348.0 1,353.5 1,158.9 -0.4% 16.3% BNDES/ Finame 124.6 112.6 85.0 10.6% 46.6% Direct Consumer Credit – used vehicles 4.8 6.2 12.7 -22.2% -61.8% Financing in Foreign Currency 32.0 51.9 32.4 -38.3% -1.1% Other Financing 10.2 14.2 22.8 -27.8% -55.1% Assignment with Co-obligation 7.5 12.4 36.5 -39.7% -79.5% Advances on Foreign Exchange Contracts 353.8 316.2 300.3 11.9% 17.8% Other Loans 9.2 9.8 7.1 -5.7% 30.9% DISBURSED CREDIT OPERATIONS 1,890.2 1,876.9 1,655.6 0.7% 14.2% Guarantees Issued (L/Gs and L/Cs) 76.4 64.3 63.4 18.9% 20.6% TOTAL 1,966.6 1,941.2 1,719.0 1.3% 14.4% Allowance for Loan Losses (212.6) (119.6) (110.7) 77.7% 92.0% Credit Portfolio by Currency 1Q11 4Q10 1Q10 1Q11/ 4Q10 1Q11/1Q10 Local Currency - Real 1,504.4 1,508.7 1,322.9 -0.3% 13.7% Foreign Currency 385.9 368.2 332.7 4.8% 16.0% TOTAL 1,890.2 1,876.9 1,655.6 0.7% 14.2% Working capital loans and discounts of receivables to the middle market companies accounted for the bulk (88%) of the total loans in the period. Trade finance operations, which include foreign currency loans (R$ 32.0 million) and advances on foreign exchange contracts (R$ 353.8 million), totaled R$ 385.9 million, representing 20% of the loan portfolio, up 5% in the quarter and 16% in 12 months, despite the 2.04% and 8.98% appreciation of the Brazilian real in the respective periods. In U.S. dollar terms, the trade finance portfolio grew 7.01% in the quarter and 26.7% in 12 months, to US$ 236.7 million, from US$ 221.1 million on December 31, 2010 and US$ 186.8 million on March 31, 2010. The Loan Portfolio also includes BNDES/FINAME onlendings, which increased 11% and 47% in the comparison periods, respectively; the run off balance from the Direct Consumer Credit – Used Vehicles portfolio discontinued in October 2008; and the portion of middle market loans and car financings assigned to other financial institutions under our credit risk coverage (co-obligation). It is worth mentioning that the used vehicle financing and credit assignments outstanding balances represent only R$ 12.3 million, less than 1% of the loan portfolio. As shown below, the middle market segment accounts for 82% of the Loan Portfolio, while the Large Companies platform (companies with revenues of over R$ 400 million), which was structured in July 2010, represents 14% of the portfolio, up 4% in the quarter. 10/22
  • 11. Credit Portfolio By Cliente Segment 1Q11 4Q10 1Q10 1Q11/ 4Q10 1Q11/1Q10 Middle Market 1,554.5 1,538.5 1,557.5 1.0% -0.2% Local Currency - Real 1,241.3 1,253.5 1,224.8 -1.0% 1.3% Loans & Discounted Receivables 1,118.6 1,139.3 1,139.8 -1.8% -1.9% Financing 10.2 14.2 - -27.8% n.m. BNDES / FINAME 112.4 99.9 85.0 12.5% 32.3% Foreign Currency 313.1 285.1 332.7 9.8% -5.9% Large Companies 267.2 256.5 - 4.2% n.m. Local Currency - Real 194.5 173.4 - 12.1% n.m. Loans & Discounted Receivables 182.3 160.7 - 13.4% n.m. BNDES / FINAME 12.2 12.7 - -4.2% n.m. Foreign Currency 72.7 83.1 - -12.5% n.m. Other 68.6 81.9 98.1 -16.3% -30.1% Consumer Credit – used vehicles 11.7 15.2 28.2 -23.2% -58.6% Acquired Loans & Financing 47.7 56.9 62.9 -16.2% -24.2% Other Loans 9.2 9.8 7.1 -5.7% 30.9% Disbursed Credit Operations 1,890.2 1,876.9 1,655.6 0.7% 14.2% Guarantees Issued 76.4 64.3 63.4 18.9% 20.6% TOTAL 1,966.6 1,941.2 1,719.0 1.3% 14.4% Allowance for Loan Losses (212.6) (119.6) (110.7) 77.7% 92.0% Industry % Agribusiness 17.56% Food & Beverage and Tobacco 17.52% Civil Construction 10.01% Chemical & Pharmaceutical 4.96% Automotive 4.51% Transportation & Logistics 4.47% Financial Institutions 4.44% Textile, Apparel and Leather 3.93% Education 3.42% Metal Industry 2.91% Power Generation & Distribution 2.84% Individuals 2.72% Oil and Biofuel 2.63% Financial Services 2.20% Pulp & Paper 2.19% Wood & Furniture 1.81% Retail & Wholesale 1.37% Other Industries (*) 10.51% TOTAL 100.00% (*) Individual participation of less than 1.3% of credit portfolio 11/22
  • 12. By Economic Activity By Segment Other Upper Services Individuals Middle 23% 7% 14% Financial Middle Retail and Cos Market other 3% 82% 4% Commerce 11% Industry 56% By Product By Client Concentration 10 largest Other 20% Other 24% 1% BNDES / Loans & FINAME Discounts 8% 91% 61 - 160 11. - 60. 24% 32% By Maturity By Guarantee 181 to 91 to 180 360 Vehicles Securities 19% 15% Real State 1% 3% Aval PN 10% 26% Pledge / Lien 2% Others Pledge 4% Above Monitored Up to 90 360 days 6% days 30% Receivables 36% 48% Loan Portfolio Quality Rating AA A B C D E F G H Prov / Comp. TOTAL Cred % Required Provision % 0% 0.5% 1% 3% 10% 30% 50% 70% 100% O/S Loans 35.4 666.1 476.4 430.8 87.5 91.7 22.2 10.1 69.9 - 1,890.2 1Q11 11.2% Allowance for Loan Losses 0.0 3.3 4.8 12.9 8.8 27.5 11.1 7.1 69.9 67.2 212.6 O/S Loans 47.8 664.4 480.7 417.1 107.9 65.5 37.8 20.2 35.5 - 1,876.9 4Q10 6.4% Allowance for Loan Losses 0.0 3.3 4.8 12.5 10.8 19.6 18.9 14.1 35.5 0.0 119.6 O/S Loans 0.0 488.8 471.2 494.3 63.6 26.3 20.2 6.2 0.0 - 1,570.5 1Q10 4.3% Allowance for Loan Losses 0.0 2.4 4.7 14.8 6.4 7.9 10.1 4.4 0.0 17.3 68.0 12/22
  • 13. On March 31, 2011, allowance for loan losses totaled R$ 212.6 million and consisted of: (a) regulatory provisions of R$ 145.4 million; and (b) complementary provisions of 3.5% of the loan portfolio in the amount of R$ 67.2 million. Complementary provisions are constituted to meet potential difficulties in the payment of renegotiated loans and the aging of loans overdue more than 60 days (non-performing loans – NPL), classified between D and H, thus increasing the cover to 75.5%, from 44.8% in 4Q10 and 49.3% in 1Q10. As explained earlier, despite the impact on immediate results, the increase in allowance for loan losses aims to safeguard the future operations of the bank, segregating problematic loans resulting from the economic crisis and providing more comfort to new shareholders and management members to focus their attention and efforts on devising the new business strategy. On March 31, 2011, the Loan Portfolio comprised loans renegotiated with clients in the amount of R$242.6 million, mostly classified between D and H, even when they are not overdue. Loans classified between D and H totaled R$ 281.5 million, equivalent to 14.9% of the loan portfolio, of which 59% were performing loans. The balance of loans with installments overdue more than 60 days totaled R$ 115.9 million, equivalent to 6.1% of the loan portfolio. The balance of loans with installments overdue more than 90 days, comparable to Central Bank data, totaled R$ 87.6 million, equivalent to 4.6% of the loan portfolio (NPL 90 days). According to the Central Bank, default rates (more than 90 days) for corporate loans have remained stable at around 3.6% since March 2010. > 60 days > 90 days Default by segment 1Q11 4Q10 1Q11 4Q10 1Q11 4Q10 Total Credit Portfolio NPL %T NPL %T NPL %T NPL %T Middle Market 1,554.5 1,538.5 112.1 7.2% 67.2 4.4% 84.2 5.4% 56.6 3.7% Large Companies 267.2 256.50 - - - - - - - - Other 68.6 81.9 3.8 5.5% 5.1 6.2% 3.4 4.9% 4.5 5.5% TOTAL 1,890.2 1,876.9 115.9 6.1% 72.2 3.8% 87.6 4.6% 61.2 3.3% Allowance Loan Losses (ALL) 212.6 119.6 ALL / NPL - 183.4% 165.6% 242.76% 195.6% ALL/ Loan Portfolio 11.2% 6.4% - - - - The table above shows that the allowance for loan losses corresponds to 11.2% of the loan portfolio, up 4.8 p.p. from 4Q10, covering 183.4% (+17.8 p.p.) of the loans overdue more than 60 days and 2.4 times the loans overdue more than 90 days (+47.1 p.p.). In 1Q11, loans amounting to R$ 8.7 million (R$ 6.0 million in 4Q10), classified as H for 180 days and hence were 100% provisioned, were written off. Recovery of overdue loans totaled R$ 0.4 million in the quarter (R$ 3.0 million in 4Q10). 13/22
  • 14. Funding Funding increased 10.6% from the previous quarter to reach R$ 2.2 million, 84.4% in reais and 15.6% in foreign currency. Total Funding 1Q11 4Q10 1Q10 1Q11/ 4Q10 1Q11/1Q10 Total Deposits 1,759.0 1,577.6 1,363.6 11.5% 29.0% Time Deposits 680.5 739.9 698.5 -8.0% -2.6% Insured Time Deposits (DPGE)* 830.0 591.0 572.0 40.4% 45.1% Agribusiness & Bank Notes 95.9 82.0 8.7 16.9% 1006.6% Interbank Deposits 113.5 116.5 42.5 -2.6% 166.9% Demand Deposits and Other 39.1 48.2 42.0 -18.7% -6.7% Domestic Onlending 137.0 127.7 108.7 7.3% 26.0% Foreign Borrowings 350.7 325.3 408.4 7.8% -14.1% Trade Finance 331.9 307.0 296.8 8.1% 11.8% IFC A/B Loan 18.8 18.3 111.6 2.8% -83.1% TOTAL 2,246.7 2,030.6 1,880.7 10.6% 19.5% Funding in reais mainly consists of deposits (78% of total funding), mainly through the issue of Bank Deposit Certificates (CDB) (30.3%) and Time Deposits with Special Guarantee (DPGE) (36.9%). The increase in the balance of DPGEs over the previous quarter reflects the 2- and 3 year-funding operations, before the capital increase date was confirmed, anticipating the demand for longer-term assets. Therefore, the average term of deposits was 806 days from issue (+49 days) and 532 days from the close of the quarter (+36 days), as follows: Avg term from Avg term Type of Deposit issuance to maturity Time Deposits 572 341 Interbank 228 125 DPGE 1,141 790 Agribusiness & Bank Notes 203 132 Portfolio of Deposits 806 532 (*) from March 31, 2011 Deposits By Type By Investor By Maturity A LC+B N Other Time 5% Interbk 5% Individual +360 Depo sit 6% 13% days up to 90 (DP GE) Demand 46% days 48% Financial Institucio 2% Inst 33% nal 6% 55% Enterpris 91to 180 Time 1 to 81 e days Depo sit 360 days 21% 13% 39% 8% 14/22
  • 15. Foreign borrowings reflect basically the growth of the Trade Finance portfolio financed through lines granted by foreign correspondent banks. The balance of IFC’s A loan, amounting to R$ 18.8 million and maturing in September, is totally hedged against exchange and interest rate fluctuations since its disbursement in October 2008. Liquidity On March 31, 2011, cash totaled R$ 2,339.8 million and, excluding Money Market Free Cash – R$ MM Funding (R$ 1,312.8 million), resulted in free cash of R$ 1,027.0 million, equivalent 1,027 to 58.4% of total deposits, including R$ 197.7 million subscribed and paid till March 733 707 31, 2010, held in reserve for capitalization until approved by the Central Bank of Brazil. Bear in mind that the period for subscription of the preemptive rights by the shareholders of Banco Indusval S.A. ended on April 25, 2011, and the period for subscription of the remaining reserved and 1Q10 4Q10 1Q11 apportioned shares ended on May 2, 2011. Capital Adequacy The Basel Accord requires banks to maintain a minimum percentage of the capital weighted by the risk in their operations. In this context, the Central Bank of Brazil has stipulated that banks operating in the country should maintain a minimum percentage of 11.0%, calculated according to the Basel Accord regulations, which provides greater security to Brazil’s financial system against oscillations in economic conditions. The following table shows Banco Indusval S.A.’s position in relation to the minimum capital requirements of the Central Bank: Basel Index 1Q11 4Q10 1Q10 1Q11/ 4Q10 1Q11/1Q10 Total Capital 563.7 426.4 443.1 32.2% 27.2% Required Capital 261.8 266.6 231.4 -1.8% 13.2% Margin over Required Capital 301.9 159.8 211.7 89.0% 42.6% Basel Index 23.7% 17.6% 21.1% 609.3% 262.0% As mentioned in the previous item, the reference equity already includes the amounts subscribed up to March 31, 2011, held for capital increase, and absorbs the negative net result of R$ 54.5 million, mainly due to the additional allowance. 15/22
  • 16. Risk Ratings Financial Agency Classification Obs. Last Report Statements B+/Positive/B Global Standard & Poors Dec. 28, 2010 Sept. 30, 2010 brBBB+/ Positive/ brA-3 National Brasil Financial Strenghth: D- Stable Global Moody's Ba3/Stable/ Not Prime Nov. 25, 2010 Sept. 30, 2010 National Brasil A2br/ Stable/ BR-2 10.02 Riskbank Index RiskBank April 20, 2011 Dec. 31, 2010 Ranking: 56 Low Risk Short Term FitchRatings BBB/ Stable/ F3 National Brasil Dec. 21, 2011 Sept. 30, 2010 Capital Market Total shares On March 31, 2011, Banco Indusval S.A. had a total of 41,212,984 shares, of which 27,000,000 were common shares (IDVL3) and 14,212,984 were preferred shares (IDVL4), with 746,853 held in treasury. The shares from the capital increase will be issued only after the Central Bank’s approval, in accordance with legislation. Share Buyback Program The 4th Share Buyback Program for the acquisition of up to 1,301,536 preferred shares, approved by the Board of Directors on August 10, 2010, is effective till August 9, 2011. Indusval S.A. CTVM is the intermediary for this program. Until March 31, 2011, a total of 772,453 preferred shares (IDVL4) had been acquired under this program. Free Float Number of Shares as of 31.03.2011 Corporate Controlling Type Management Treasury Free Float % Capital Group Common 27,000,000 (17,116,985) (2,574,269) - 7,309,558 27.1% Preferred 14,212,984 (610,981) (159,570) (746,853) 12,299,964 86.5% TOTAL 41,212,984 (17,727,966) (2,733,839) (746,853) 19,609,522 47.6% The 7,309,458 common shares in free float are owned by the Ribeiro and Ciampolini families, who are not part of the controlling group. Thus, the preferred shares regularly traded on the stock exchange total 12,299,964, equivalent to 29.8% of the total capital. Stock Option Plan The following Stock Option Plans were approved for the Company’s executive officers and managers, as well as individuals who provide services to the Company or its subsidiaries: • Stock Option Plan I approved at the Extraordinary Shareholders’ Meeting of March 26, 2008. • Stock Option Plan II approved at the Extraordinary Shareholders’ Meeting of April 29, 2011. • Stock Option Plan III approved at the Extraordinary Shareholders’ Meeting of April 29, 2011. 16/22
  • 17. The above-mentioned Stock Option Plans are filed in the IPE System of the Securities and Exchange Commission of Brazil (CVM) and are also available for consultation on the Company’s IR website. The table below shows the options granted by Banco Indusval S.A. under the Stock Option Plan I: Quantity Data da Term for Exercise Grace period Granted Exercised Extinct Not Exercised outorga exercise Price R$ 07/22/08 3 years 5 years 10.07 161,896 - - 161,896 02/10/09 3 years 5 years 5.06 229,067 25,600 10 203,457 02/22/10 3 years 5 years 8.56 525,585 - 15,263 510,322 08/06/10 3 years 5 years 7.72 261,960 - 2,524 259,436 02/09/11 3 years 5 years 8.01 243,241 - - 243,241 1,421,749 25,600 17,797 1,378,352 No option was granted till date under the Stock Option Plans II and III. Shareholder Remuneration On April 7, 2011, the Bank paid Interest on Equity in the amount of R$ 4.2 million related to 1Q11, as advance payment of the minimum mandatory dividend for 2011. This amount corresponds to R$ 0.10477 per share or R$ 0.08905 net of withholding income tax. Share Performance The shares of Banco Indusval (IDVL4) closed 1Q11 at R$ 9.02, for market cap of R$ 365.0 million, including the shares on March 31, 2011 and excluding treasury stock. The price of IDVL4 shares appreciated 13.46% in 1Q11 and 5.5% in 12 months, while the Ibovespa index dropped 1.04% and 2.54%, respectively. Share Price Evolution in the last 12 months 130 120 110 100 90 80 IBOVESPA IDVL4 70 5/ 010 10 10 1/ 011 3/ 011 11 10 0 10 6/ 010 0 8/ 010 0 0 0 2/ 011 1 12 1 1 12 201 01 01 01 11 201 01 01 01 20 20 20 20 20 2 /2 /2 /2 /2 /2 2 /2 /2 2 /2 /2 4/ 3/ 3/ 7/ 6/ 4/ 2/ 3/ 2/ / 27 16 26 15 24 /3 22 11 23 5/ 7/ 9/ 1/ 3/ 5/ /1 /2 /1 11 7/ 9/ 4/ 10 Liquidity and Trading Volume The preferred shares of Banco Indusval (IDVL4) were traded in 98% of the sessions in 1Q11 and in the past 12 months. In 1Q11, a total of 3.7 million IDVL4 shares were traded over 1,272 17/22
  • 18. transactions on the spot market, for total volume of R$ 32 million. In the past 12 months, the volume traded on the spot market was R$ 90.7 million, representing approximately 11.1 million preferred shares over 3,990 trades. Shareholder Base Detailed distribution of preferred capital: March 31/ 2011 Dec.31/ 2010 # % Type of Shareholder Qty PN % PN # Inv. Qty PN % PN % Total Inv. Total Controlling Group 4 1,062,453 7.48% 44.11% 4 1,026,653 7.20% 44.00% Management 10 159,570 1.12% 6.63% 10 159,570 1.10% 6.60% Families 14 539,931 3.80% 19.05% 12 515,931 3.60% 19.00% National Institutional Investors 57 7,273,467 51.17% 17.65% 47 7,332,667 51.60% 17.90% Foreign Investors 11 2,818,399 19.83% 6.84% 12 2,842,625 20.00% 6.90% Corporates 11 26,100 0.18% 0.06% 9 17,400 0.10% 0.00% Individuals 437 1,586,211 11.16% 3.85% 514 1,571,341 11.10% 3.80% Treasury 0 746,853 5.25% 1.81% - 746,797 5.20% 1.80% TOTAL 544 14,212,984 100% 100% 608 14,212,984 100% 100% Subscription of Shares On March 23, 2011, the Board of Directors approved a capital increase, within the authorized capital, through a private subscription to new shares, at the issue price of R$ 9.20 per common and preferred share, under the same conditions as the shares existing on that date. As announced in the Notice to Shareholders dated March 24, 2011, the period for subscription of the preemptive rights and for reservation of unsubscribed shares ended on April 25, 2011. In the period, a total of 9,585,090 common shares and 11,947,060 were subscribed for a total amount of R$ 198,095,780.00. In the same period, a firm order was placed for subscription of the 360,559 unsubscribed common shares amounting to R$ 3,317,142.80, guaranteeing a minimum capital increase of R$ 201,412,922.80. As announced in the Notice to Shareholders on April 27, 2011, since the reservations for subscriptions of unsubscribed shares were fewer than the unsubscribed shares available, all the reservation orders were approved for exercise between April 28, 2011 and May 2, 2011. After the subscription of the preemptive rights and apportionment of unsubscribed shares, a total of 9,945,649 common shares and 11,947,060 preferred shares were subscribed and paid, which were represented by subscription receipts amounting to R$ 201,412,922.80, deposited at the Central Bank of Brazil until its ratification, when they will be substituted by shares in the shareholders’ custody. The subscription receipts are available for trading on the Bovespa under the tickers IDVL9 and IDVL10. 18/22
  • 19. Elected Statutory Bodies Board of Directors: (elected at the AGM held on April 29, 2011 and subject to the approval of the Central Bank of Brazil) Manoel Felix Cintra Neto – Executive Chairman Antonio Geraldo da Rocha Carlos Ciampolini Jair Ribeiro da Silva Neto Luiz Masagão Ribeiro Alain JP Belda – Independent member Alfredo de Goeye Junior – Independent member Guilherme Afonso Ferreira – Independent member Walter Iorio – Independent member Executive Office: elected at the Board of Directors meeting held on May 06, 2011 subject to the approval of the Central Bank of Brazil) Jair Ribeiro da Silva Neto – Co-CEO Luiz Masagão Ribeiro – Co-CEO André Mesquita – Vice-President - Products & Corporate FInance Francisco Paulo Cote Gil – Vice-President - Commercial Gilberto Faiwichow – Vice-President - Treasury Gilmar Melo de Azevedo – Vice-President – Special Loans Katia Ap Rocha Moroni – Vice-President - Trade Finance, Syndications, Funding & IR Eliezer L Ribeiro da Silva – Officer – Middle Market Credit Dept. Supervisory Board: As per the A.G.M. of April 29, 2011, the Supervisory Board will be operative during FY 2011 with the members that acted during 2010 reelected, to mention: Francisco de Paula dos Reis Jr - Accountant Jairo da Rocha Soares – Accountant, Auditoe and Economist Luiz Alberto de Castro Falleiros – Economist 19/22
  • 20. BALANCE SHEET Consolidated R$ '000 Assets 3/31/2010 12/31/2010 3/31/2011 Current 2,516,462 2,672,676 3,818,699 Cash 2,949 7,081 3,897 Short-term interbank investments 374,362 44,648 563,227 Open market investments 311,163 22,507 540,959 Interbank deposits 63,199 22,141 22,268 Securities and derivative financial instruments 975,295 1,255,106 1,819,265 Own portfolio 443,867 586,517 658,024 Subject to repurchase agreements 398,223 540,385 781,924 Linked to guarantees 93,303 92,751 134,012 Subject to the Central Bank 198,683 Derivative financial instruments 39,902 35,453 46,622 Interbank accounts 4,235 1,553 2,106 Payment and receipts pending settlement 940 - 1,092 Restricted credits - Deposits with the Brazilian Central Bank 3,295 1,553 1,014 Loans 782,771 920,861 842,536 Loans - private sector 789,212 933,827 890,506 Loans - public sector 21,767 9,137 4,247 (-) Allowance for loan losses (28,208) (22,103) (52,217) Other receivables 337,075 400,319 539,599 Foreign exchange portfolio 324,835 325,586 397,698 Income receivables 642 85 13 Negotiation and intermediation of securities 17,033 75,341 63,055 Sundry 3,708 4,756 97,269 (-) Allowance for loan losses (9,143) (5,449) (18,436) Other assets 39,775 43,108 48,069 Other assets 40,499 43,538 49,447 (-) Provision for losses (1,420) (1,915) (2,505) Prepaid expenses 696 1,485 1,127 Long term 518,989 590,638 515,696 Marketable securities and derivative financial instruments 4,083 6,151 6,614 Linked to guarantees 36 31 31 Derivative financial instruments 4,047 6,120 6,583 31 Interbank Accounts 10,681 7,352 7,140 Pledged Deposits - Caixa Economica Federal 10,681 7,352 7,140 Loans 427,513 503,536 484,806 Loans - private sector 497,331 595,564 624,937 Loans - public sector 3,479 - - (-) Allowance for loan losses (73,297) (92,028) (140,131) Other receivables 75,332 72,703 16,469 Trading and Intermediation of Securities 74 244 243 Sundry 75,323 72,503 17,994 (-) Allowance for loan losses (65) (44) (1,768) Other rights 1,380 896 667 Prepaid Expenses 1,380 896 667 Permanent Assets 13,104 12,828 12,410 Investments 1,686 1,686 1,686 Other investments 1,686 1,686 1,686 Property and equipment 11,418 11,142 10,724 Property and equipment in use 2,179 2,192 2,192 Revaluation of property in use 3,538 3,538 3,538 Other property and equipment 12,379 12,515 12,511 (-) Accumulated depreciation (6,970) (7,103) (7,517) Leasehold Improvements 292 300 - - - TOTAL ASSETS 3,048,555 3,276,142 4,346,805 20/22
  • 21. Consolidated R$ '000 Liabilities 3/31/2010 12/31/2010 3/31/2011 Current 1,895,649 2,074,519 2,780,139 Deposits 725,274 820,679 761,590 Cash deposits 41,707 47,682 38,240 Interbank deposits 42,510 105,393 105,087 Time deposits 640,801 667,133 617,356 Other 256 471 907 Funds obtained in the open market 605,650 538,580 1,312,773 Own portfolio 395,980 538,580 776,286 Third party portfolio 209,670 462,999 Free cash portfolio 73,488 Funds from securities issued or accepted 8,665 74,648 88,319 Agribusiness Letter of Credit & Bank Notes 8,665 74,648 88,319 Interbank accounts 476 - 475 Receipts and payment pending settlement 476 - 475 Interdepartamental accounts 9,947 5,898 9,004 Third party funds in transit 9,947 5,898 9,004 Borrowings 389,450 324,800 350,689 Foreign borrowings 389,450 324,800 350,689 Onlendings 42,074 43,297 44,025 BNDES 19,569 18,087 16,131 FINAME 22,505 25,210 27,894 Other liabilities 114,113 266,617 213,264 Collection and payment of taxes and similar charges 818 571 650 Foreign exchange portfolio 22,164 22,002 62,996 Taxes and social security contributions 2,932 4,474 9,590 Social and statutory liabilities 2,352 3,661 5,534 Negotiation and intermediation securities 24,155 195,316 77,938 Derivative financial instruments 55,228 34,184 45,398 Sundry 6,464 6,409 11,158 Long Term 721,751 774,736 1,002,235 Deposits 629,625 674,941 901,534 - Interbank Deposits - 11,088 8,392 Time deposits 629,625 663,853 893,142 Funds from securities issued or accepted - 7,345 7,571 Agribusiness Letter of Credit & Bank Notes - 7,345 7,571 Loan obligations 18,984 549 - Foreign loans 18,984 549 - Onlending operations - Governmental Bureaus 66,663 84,354 92,984 Federal Treasure 19,299 - 12,694 BNDES 3,161 28,154 30,445 FINAME 39,621 39,856 47,852 Other Institutions 4,582 16,344 1,993 Other liabilities 6,479 7,547 146 Taxes and social security contributions 5,815 5,647 117 Derivative financial instrument 482 - 29 Sundry 182 1,900 - Future results 423 462 701 Shareholders' Equity 430,732 426,425 563,730 Capital 370,983 370,983 568,665 Capital Reserve 1,016 2,212 2,540 Revaluation reserve 1,978 1,928 1,911 Profit reserve 63,322 55,812 55,812 (-) Treasury stock (6,898) (5,957) (5,958) Asset valuation Adjustment 331 1,447 (553) Accumulated Profit / (Loss) - - (58,687) TOTAL LIABILITIES 3,048,555 3,276,142 4,346,805 21/22
  • 22. INCOME STATEMENT R$ '000 Consolidated 1Q10 4Q10 1Q11 Income from Financial Intermediation 114,386 115,930 118,123 Loan operations 61,153 68,758 64,312 Income from securities 24,272 24,198 40,713 Income from derivative financial instruments 1,638 14,239 5,437 Income from foreign exchange transactions 27,323 8,735 7,661 Expenses from Financial Intermediaton 79,167 81,396 179,487 Money market funding 38,792 60,052 71,972 Loans, assignments and onlendings 28,923 7,833 5,866 Income from derivative financial instruments - - - Allowance for loan losses 11,452 13,511 101,649 Gross Profit from Financial Instruments 35,219 34,534 (61,364) Other Operating Income (Expense) (24,429) (28,400) (28,900) Income from services rendered 2,831 4,041 3,466 Income from tariffs 195 265 237 Personnel expenses (12,422) (15,700) (16,139) Other administrative expenses (9,331) (11,258) (11,383) Taxes (3,188) (4,234) (3,549) Other operating income 990 1,521 4,570 Other operating expense (3,504) (3,035) (6,102) Operating Profit 10,790 6,134 (90,264) Non-Operating Profit (16) 1,417 (483) Earnings before taxes ad profit-sharing 10,774 7,551 (90,747) Income tax and social contribution (947) (499) 38,394 Income tax 162 154 (461) Social contribution 97 183 (277) Deferred fiscal assets (1,206) (836) 39,132 Contributions and Equity (2,482) (1,159) (2,111) Net Profit for the Period 7,345 5,893 (54,464) 22/22