2. Credit Behavior in Brazil
Loan Portfolio
Funding and Liquidity
Result from Operations
Indusval Multistock Corretora de Valores
Share Performance
1
3. Total Credit Volume and Segmentation
Volume of Credit Operations
R$ billion 1,529
1,410
1,227
Credit to individuals growth continues
32% 33%
936 29% supported by payroll lending, vehicle and real
state financing.
29%
In Corporate Credit earmarked resources
733 from BNDES still stand out.
607 67%
71% 71% 68%
Public institutions account for 42.3% of total
2005 2006 2007 2008 2009 Jun/10 loans in the financial system
Nonearmarked Resources Earmarked Resources
Variation% Individuals Corporate
Non Non Total
Earmarked Earmarked Credit
Jun/10 earmarked Total earmarked Total
Resource Resources
Resource Resources
In the month 0.9 1.3 1.0 2.6 3.1 2.8 2.0
In the quarter 3.9 6.0 4.5 5.8 6.3 6.0 5.3
In the year 7.6 12.5 8.9 5.6 10.6 7.5 8.1
In 12 months 16.4 26.9 19.1 10.2 40.7 20.3 19.7
Source: Central Bank of Brazil – Credit Information System - SCR
2
4. Credit Default Ratios
Stabilized in Corporate Credit
and continuous decline in credit to Individuals
10
9
8
7
6.6%
6
%
5 5.0%
4
3.6%
3
2
Corporate Individuals Total
Source BACEN
1
0
Dec Dec Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
2006 2007 2008 2009 2010
Default Rate on Loans to Individuals: Fast retreat from June 2009.
Default Rate on Corporate Loans: Accelerated increase until September/09, with slow decline
from November 2009 to March 2010, when stabilized at 3.6%
3
5. Credit Behavior in Brazil
Loan Portfolio
Funding and Liquidity
Result from Operations
Indusval Multistock Corretora de Valores
Share Performance
4
6. Credit Loans over R$ 1.7 billion *
* Including guarantees issued and L/Cs
Local Currency Loans Trade Finance
R$ Million R$ Million
-3.7%
1,460.0 1,405.4
1,385.7
+33.5%
333.3 357.2
267.5
2Q09 1Q10 2Q10 2Q09 1Q10 2Q10
Local currency loans maintain 80% 88% export financing (ACC/ ACE)
participation in total loan portfolio
L/Cs and Import financing respond for 12% of
Prevalence of Working Capital Loans and Trade Finance business
Discounts = 68% of Total Loan Portfolio
In foreign currency, portfolio growth of 3% in the
Guarantees issued in local currency
represent only 4.7% of the portfolio in Reais quarter and 41% in 12 months:
• US$ 136.6 million in 2Q09
• US$ 186.9 million in 1Q10
• US$ 192.1 million in 2Q10
Credit Assignment Guarantees issued and L/Cs
5
7. Credit Portfolio Breakdown
By Economic Activity By Currency
Individuals
Finance
8%
Interm. Foreign
1% Currency
21%
Services
23%
Industry
57%
Local
Currency
Commerce 79%
11%
By Client Concentration By Tenor
The average of contracts final tenors is 451 days
10 largest Above 360
Other
19% days
25%
28% Up to 90
days
38%
11 to 60 181 to 360
61 to 160 32% 15%
24% 91 to 180
19%
6
8. Loan Portfolio breakdown by Industry
FOOD, BEVERAGE AND TOBACCO
AGRIBUSINESS
12% HEAVY CONSTRUCTION
22%
1% 1% CHEMICAL AND PHARMACEUTICA
3% AUTOMOTIVE
3% TRANSPORTATION & LOGISTICS
EDUCATION
3% TEXTILE, CLOTHING & LEATHER
METAL INDUSTRY
3%
FINANCIAL INSTITUTIONS
4% 15%
OIL AND BIOFUEL
4% FINANCIAL SERVICES
4% INDIVIDUALS
4% 10%
5% 5% INTERNATIONAL TRADE
PAPER & PULP
OTHER INDUSTRIES
7
9. Developments in Loan Portfolio Quality
Asset Quality
Risk Rating Collateral Structure - Middle Market
D-H Vehicles
Real State
12% 10%
2% Aval PN
21%
A Monitored
33% Pledge
11%
Pledge/Lien
Securities
6%
4%
C
27%
B
Receivables
28%
46%
NPL(*) / Total Loan (%) Allowance for Loan Losses
(*) Total amount of contracts with any installment overdue above 60 days
6.9
118.2
110.7 107.8
3.5
2.6
2Q09 1Q10 2Q10 2Q09 1Q10 2Q10
Provisions of 6.4% of Loan Portfolio ensure good coverage = 51% of D-H and 245% of NPL 60 days
8
10. Credit Behavior in Brazil
Loan Portfolio
Funding and Liquidity
Result from Operations
Indusval Multistock Corretora de Valores
Share Performance
9
11. Stable volumes, Longer tenors
Total Funding Funding Breakdown
R$ Million
BNDES
+6.1% Onlending
Foreign 5%
1,880.7 1,880.6 Borrowings
1,772.3 22%
Time
Deposits
Interbank 40%
Deposits
2%
Demand
Deposits
2% LCA
1%
DPGE(*)
2Q09 1Q10 2Q10 28%
Predominance of local currency funding Time Deposits (CDs + DPGEs) equivalent to
73% in Deposits 68% of total funding
16% Trade Finance lines Lengthening of average term to maturity of total
6% IFC A/B Loan deposits to 593 days in the 2Q10 from 494 days
5% BNDES onlending lines in the 1Q10:
CDBs: R$ 743.8 MM - 382 days
DPGEs: R$ 525.4 MM - 946 days
Interbank Deposits: R$ 45.7 MM - 142 days
(*) Time Deposits insured by Fundo Garantidor de Crédito (FGC)
10
12. Good Liquidity maintained
Free Cash (*)
R$ Million Management of liquidity, interest
rate, currencies and tenor
735,2
mismatch risks is our Treasury’s
707,9 695,5 main task
Free Cash:
51% of Total Deposits
162% of Shareholder’s Equity
2Q09 1Q10 2Q10
Assets and Liabilities Management
R$ Million
720,1
(*) Free Cash = 586,4
558,5 533,1
(Cash + Liquid Financial Assets + Securities + Derivatives)
382,7
(-) 306,8 293,2 285,8
(Open Market Funds + Derivatives)
90 days 180 days 360 days Above 360 days
Assets Liabilities
11
13. Credit Behavior in Brazil
Loan Portfolio
Funding and Liquidity
Results from Operations
Indusval Multistock Corretora
Share Performance
12
14. Financial Intermediation Profit stands complementary provisions
Income from Financial Intermediation Gross Profit from Financial intermediation
R$ Million R$ Million
+7.8%
114,4 -3.5% 110,4
102,3 +2.9%
-6.1%
32.1 35.2 33.1
2Q09 1Q10 2Q10 2Q09 1Q10 2Q10
3.5% drop in Income from Financial Gross Profit from Financial Intermediation
Intermediation in the quarter derived from lower equivalent to 30% of Income from Financial
FX variation volume on Trade Finance operations Intermediation in the 2Q10 towards 31% in the
1Q10 and 2Q09.
The FX rate effect also reflected in the reduction
in Expenses with Foreign Borrowings Increase of 10.4% in the expenses of
Allowance for Loan Losses to maintain the
volume of complementary allowance for loan
losses in R$ 11 million and give good
coverage to exposure of the loan portfolio
13
15. Efficiency keeps evolving
Net Operating Expenses Efficiency Ratio
R$ Million In %
+9.6 p.p.
-5.8
61.0% p.p.
55.2%
-14.6%
45.6%
-14.3
24.5 24.4 %
20.9
S&P Model
2Q09 1Q10 2Q10 2Q09 1Q10 2Q10
Net Operating Expenses reduced to 63% of Decrease of net operating expenses offset a
Result from Financial Intermediation small reduction in results of financial
compared to 69% in 1Q10 and 76% in 2Q09, intermediation, with favorable impact on the
as result of: efficiency ratio in the quarter.
Strict control of operating expenses
Maintaining this trend should remain as the
Increased contribution of other revenues, positive scenario persist.
operating, including positive exchange
variation on arbitrage operations.
14
16. Recovering profitability
Net Profit Net Interest Margin (NIM)
R$ Million
NIM GIM
+2.5%
8.3 6,8%
8.1 7.3 +13.7%
4,9%
2Q09 1Q10 2Q10 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10
GIM= Gross Interest Margin
Net Profit progressed due to reduction of: NIM 0.2 p.p. drop in the quarter reflects:
14% in Net Operating Expenses; and
25% in Profit Sharing - management and employees
• The increase of Trade Finance share in
the average interest bearing assets;
Compensating: and
6% drop in Financial Intermediation Result; and
25% increase in Income Tax and Social Contribution • Maintenance of liquidity levels
Recurring Profit in the quarter was 22% higher
than 2Q09 which had a non-recurring net income
of R$ 1.3 million
15
17. Credit Behavior in Brazil
Loan Portfolio
Funding and Liquidity
Result from Operations
Indusval Multistock Corretora de Valores
Share Performance
16
18. Investment plan maintained
Challenging market in 2Q10
The brokerage firm modernization process keeps its pace with investments in
technology and people to develop new products and markets within its strategic
targets:
• To broaden the institutional clients and qualified individual investors base
• To expand to the retail segment
• To become an institutional clients’ liquidity center
Repositioning in the BM&F Ranking
• 2Q09: 53th position
• 1Q10: 17th position
• 2Q10: 33th position
17
19. Credit Behavior in Brazil
Loan Portfolio
Funding and Liquidity
Result from Operations
Indusval Multistock Corretora de Valores
Share Performance
18
20. Capital Distribution and Free Float
On August 10, 2010, the Board of Directors of Banco Indusval Multistock approved:
The cancellation of 1,262,117 preferred shares held in treasury
# of Shares # of Shares Treasury # of Shares
Class
06.30.2010 Cancelled 08.11.2010
Common 27,000,000 -0- 27,000,000
Preferred 15,475,101 (1,262,117) 14,212,984
TOTAL 42,475,101 (1,262,117) 41,212,984
Current free float:
# of Shares Controlling # of Shares Free
Class Management
08.11.2010 Shareholders Free Float Float
Common 27,000,000 (17,116,173) (2,574,369) 7,309,458 27.07%
Preferred 14,212,984 (1,038,047) (159,570) 13,015,367 91.52%
TOTAL 41,212,984 (18,154,220) (2,733,939) 20,324,825 49.32%
The closure of the 3rd share buyback program; and,
The opening of the 4th preferred shares buyback program for the acquisition of up to 1,301,536
preferred shares in force until Aug.09,2011 to be maintained in treasury, future sale or
cancellation, without capital reduction.
19
21. Shareholder Remuneration
BIM’s practice for shareholder remuneration in the last years is
the quarterly anticipated payment of Interest on Equity
27.0
25.5
6,7
6,4
15.8 6,6
6,5
6,1 12.6
11.6
2,6
10.1 6,9
2,2 6,6 6,3
3,0 2,4 5,1
R$ MM
2,9 2,7 2,3 6,0 6,8 6,3
2,9 2,8 2,3
2005 2006 2007 2008 2009 2010
1Q 2Q 3Q 4Q
Remuneration per share
2005 2006 2007 2008 2009 1H2010
R$ 0,3657 R$ 0,3249 R$ 0,3688 R$ 0,5994 R$ 0,6423 R$ 0,3022
20
23. In Summary
Credit Behavior in Brazil
Private Financial institutions start reaction, however, the public banks reach a high 42%
participation in total credit in financial system.
Loan Portfolio
More positive macroeconomic scenario reflected in better SMEs performance.
Slow origination retaking, with a 2.5% portfolio QonQ growth overcoming the maturities and
write-offs in the period.
Trade Finance portfolio has a faster reaction as a consequence of the scenario.
Retreated default levels maintained from March/2010.
Good loan loss allowance NPL coverage.
Funding and Liquidity
Available volumes at longer tenors.
Results
Controlled Operating Expenses contributed to better results with Net Profit 14% higher than
the previous quarter and 22% above the recurring results of 2Q09.
22
24. Questions and Answers
Please note that this is the English version of the presentation. The original version is in Portuguese. If there is any discrepancy between
such versions, the Portuguese version shall prevail. Banco Indusval Multistock’s full financial statements will be available on our website
at www.indusval.com.br/ir, under Financial Information – Financial Statements, as soon as they are filed with the CVM – Brazilian
Securities and Exchange Commission.
Any reference or statement regarding Banco Indusval Multistock - or its subsidiaries and affiliates - anticipated synergies, growth plans,
projected results and future strategies are just estimates. Although these forward-looking statements reflect management’s good faith
beliefs, they involve known and unknown risks and uncertainties that may cause the Company’s actual results or outcomes to be
materially different from those anticipated and discussed herein. These risks and uncertainties include, but are not limited to, our ability
to realize the amount of the projected synergies and in the timetable projected, as well as economic, competitive, governmental and
technological factors affecting Banco Indusval Multistock’s operations, markets, products and prices, and other factors detailed in Banco
Indusval Multistock’s filings with the CVM – Brazilian Securities and Exchange Commission which, readers are urged to read carefully, in
analyzing the forward-looking statements that are contained herein. Banco Indusval Multistock undertakes no obligation to update any of
the projections contained herein.
23
25. Investor Relations – Contact Information
Ziro Murata Jr. Banco Indusval S/A
IRO Rua Boa Vista, 356 – 7º andar
01014-000- São Paulo – SP
Phone: (55 11) 3315-6961
Brasil
E-mail: ziro@indusval.com.br
Maria Angela R. Valente IR Site:
Head of IR www.indusval.com.br/ir
Phone: (55 11) 3315-6821
E-mail: mvalente@indusval.com.br
24