Earnings Conference Call 2nd Quarter of 2019 · 2019-08-06 · Conference Call 2nd Quarter of 2019...

EarningsConference Call

2nd Quarter of 2019

August 6th, 2019

Estratégia, segmentos e produtos

Highlights

2

Recurring Net Income reached BRL 125.2 million in 2Q19, up 3.3% quarter-over-quarter and 12.2% year-over-year.

Recurring Return on Average Equity (ROAE) was 13.0% in 2Q19, flat quarte-over-quarter and year-over-year.

The Expanded Credit Portfolio reached BRL 27.1 billion at the end of June 2019, up2.1% quarter-over-quarter and 6.9% year-over-year.

The Bank launched ABC LAB, which is a work space apart of the headoffice. Thespot is focused in building, analyzing and deploying high-added technology projectswhich shall bear innovation and digital transformation initiatives of Banco ABCBrasil.

Expanded Credit Portfolio

3 Appendix

(BRL million) Jun/19 Mar/19 Chg 3M Jun/18 Var 12M Dec/18 Chg 6M

Loans 13,633.3 13,064.9 4.4% 12,352.4 10.4% 12,978.9 5.0%

Large Corporate 4,339.2 3,992.4 8.7% 3,987.2 8.8% 4,216.1 2.9%

Corporate 8,904.6 8,725.0 2.1% 7,983.6 11.5% 8,403.4 6.0%

Middle 389.5 347.5 12.1% 381.6 2.1% 359.5 8.3%

Guarantees Issued 10,164.5 10,540.6 -3.6% 10,753.6 -5.5% 10,650.9 -4.6%

Large Corporate 8,865.9 9,171.9 -3.3% 9,352.8 -5.2% 9,336.5 -5.0%

Corporate 1,280.8 1,350.3 -5.2% 1,383.7 -7.4% 1,296.4 -1.2%

Middle 17.8 18.4 -2.9% 17.1 4.5% 17.9 -0.4%

Corporate Securities 3,266.8 2,897.7 12.7% 2,221.1 47.1% 2,610.5 25.1%

Large Corporate 1,467.1 1,310.0 12.0% 1,288.2 13.9% 1,198.0 22.5%

Corporate 1,799.7 1,587.6 13.4% 932.9 92.9% 1,412.5 27.4%

Middle - - - -

Expanded Credit Portfolio 27,064.7 26,503.1 2.1% 25,327.0 6.9% 26,240.3 3.1%

Large Corporate 14,672.2 14,474.3 1.4% 14,628.2 0.3% 14,750.6 -0.5%

Corporate 11,985.1 11,663.0 2.8% 10,300.2 16.4% 11,112.3 7.9%

Middle 407.3 365.8 11.3% 398.7 2.2% 377.4 7.9%

Estratégia, segmentos e produtosStrategy and business segments4

Segments Highlights

Expanded Credit Portfolio*(BRL million)

Large Corporate: Clients with annual revenues above BRL 2 billion. | Corporate: Clients with annual revenues between BRL 250 million and 2 billion.

Middle: Clients with annual revenues between BRL 100 to BRL 250 million.

Jun/18 Mar/19 Jun/19

Large Corporate Corporate


Middle


260 241 255

51.3 54.6 51.8

883 874 866

10.6 11.5 11.8

105 90 100

3.8 4.1 4.1 Average Ticket(BRL million)

Average Tenor(days)

Total Numberof Clients

Clients withCredit Exposure

64% 64% 62%

24% 27% 30%

8% 8% 8%


South

Rio de Janeiro, MinasGerais and Northeast

São Paulo

13,340 13,164 13,205

28% 29% 30%

22% 23% 24%

26% 25% 19%6% 6% 6%7% 5% 6%

11% 11% 11%


Minas Gerais

Midwest

Rio de Janeiro

SP Countryside

South

SP Capital

4,440 5,107 5,197

*100% of the Middle portfolio is concentrated in SP Capital.

381 425 439357 290 303 294 295 384

1,292 1,326 1,313 412 408 399 135 132 142

Credit Portfolio Quality

5

Loans overdue for more than 90 days (includes falling due and overdue installments)

% of loan portfolio

Loans Loss Reserve% of loan portfolio

Loans rated D and E-H (Brazilian Central Bank Resolution No. 2682)

% of loan portfolio

Loan Loss Provision Expenses (Loan Portfolio)

48.954.1 50.2 55.3 57.9 56.6 54.9 50.8

22.533.1 33.1 29.5 29.9

19.3

1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19

LLP Expenses (BRL million)

1.7% 2.0% 1.9% 2.0% 2.0% 1.9% 1.9% 1.7%0.7% 1.1% 1.1% 0.9% 0.9% 0.6%

% of Loan Portfolio(annualized)

3.1%4.0% 3.9% 4.5% 4.0% 4.0%

3.3%2.7%

2.2% 2.2%

2.8% 2.9% 3.4% 3.1%

2.5%3.2% 2.7%

1.4% 1.7%

3.2% 2.7% 2.6%

2.5% 2.9%

2.6% 2.4% 2.0% 2.4%

Mar/16 Jun/16 Sep/16 Dec/16 Mar/17 Jun/17 Sep/17 Dec/17 Mar/18 Jun/18 Sep/18 Dec/18 Mar/19 Jun/19

E-H

D

2.5%3.0%

3.3% 2.8% 2.9% 3.7%

4.3%4.1%

2.6%

3.0% 3.7% 3.8% 4.2% 3.7%3.7% 4.3% 3.8% 4.2% 4.4%4.2%

3.2%

2.8% 2.8%2.4% 2.4% 2.4% 2.5% 2.5%

4.7% 5.5%

3.0% 2.5% 2.3% 2.5% 2.7%3.0%

4.0% 3.6%4.5% 4.6%

3.0%

2.5%

3.4% 3.9% 3.6% 3.7% 3.9% 4.0%3.6%

3.3% 2.8%2.6% 2.9%

2.9% 3.0% 2.9%


Large Corporate

Corporate

Middle

Total

0.6%

2.2% 2.2%

0.6%0.3%

2.1%2.6% 2.4%

0.9% 1.4%0.6% 0.7%

2.7%2.4%

1.5%

1.2% 0.6%0.8% 0.9%

1.1% 0.9%0.6%

0.6%0.2% 0.3% 0.3%

0.7%0.6%

2.9%3.3%

0.7%0.2%

0.4%0.2% 0.1% 0.3% 0.5%

1.4% 1.5% 1.4%

0.1% 0.0%

1.2%1.6% 1.1%

0.7% 0.7%1.4% 1.4% 1.2%

0.7% 0.6%0.5% 0.4%

1.3% 1.1%


Large Corporate

Corporate

Middle

Total

Funding & Ratings

Funding and capital base6

Ratings

Diversified funding with access to local and international sources

Local

BrAAA

AAA

Aa2.Br

Global

BB-

BB

Ba2

Standard & Poor’s

Fitch Ratings

Moody’s

Sovereign

BB-

BB-

Ba2

BrazilABC Brasil

BIS Ratio & Shareholders’ Equity

Funding and capital base7

13.08% 13.23% 13.43% 13.31% 13.36%

0.37%1.07%

3.06% 2.94% 3.73% 3.64%3.49%

Jun/18 Sep/18 Dec/18 Mar/19 Jun/19

Tier 2

AT1

CET1

16.14% 16.17%17.16% 17.31%

13.68% 14.43%

17.91%

4,153 4,2504,651 4,772 5,136

3,446 3,619 3,666 3,824 3,882

Referential Equity

Shareholders' Equity

(BRL million)

Capital Adequacy (BRL million) Jun/19 Mar/19 Chg 3M Jun/18 Chg 12M

Reference Equity 5,136.5 4,772.2 7.6% 4,153.2 23.7%

Required Capital Base 2,294.0 2,204.9 4.0% 2,220.0 3.3%

Excess of equity in relation to limit 2,842.5 2,567.3 10.7% 1,933.3 47.0%

Basel Ratio 17.91% 17.31% 0.60 16.14% 1.77

Tier 1 14.43% 13.68% 0.75 13.08% 1.34

CET1 13.36% 13.31% 0.05 13.08% 0.27

AT1 1.07% 0.37% 0.70 0.00% 1.07

Tier 2 3.49% 3.64% -0.15 3.06% 0.43

Net Interest Income

8

NIM(% p.a.)

Net Interest Income(BRL million)

(BRL million) 2Q19 1Q19 2Q19x1Q19 2Q18 2Q19x2Q18 1H19 1H18 1H19x1H18

Net Interest Income 239.8 233.9 2.5% 253.6 -5.4% 473.8 483.8 -2.1%

Shareholders' Equity Remunerated at CDI Rate 52.7 47.8 10.2% 44.6 18.0% 100.4 85.3 17.8%

Financial Margin with Clients 137.6 141.1 -2.5% 144.3 -4.6% 278.8 285.8 -2.5%

Financial Margin with Market 49.6 45.0 10.0% 64.6 -23.3% 94.6 112.7 -16.1%

Loan Loss Provision (LLP) (19.3) (29.9) -35.3% (33.1) -41.6% (49.2) (55.6) -11.5%

Net Interest Income after LLP 220.5 204.1 8.1% 220.4 0.0% 424.6 428.2 -0.9%

144 142 155 141 138

286 27945 45 47 48 53

85 100

65 48 37 45 50

113 95

2Q18 3Q18 4Q18 1Q19 2Q19 1H18 1H19

Financial Marginwith Market

Shareholders' EquityRemunerated at CDIRate

Financial Marginwith Clients

254 235 240

2.5%

-5.4%

234 240

-2.1%

484 474 4.0%3.5% 3.4% 3.3% 3.3%

3.8%3.3%

2Q18 3Q18 4Q18 1Q19 2Q19 1H18 1H19

Service Revenues

Financial highlights9

55.1 56.9 57.9 55.0 50.3 50.8

13.520.0 27.5 27.8

16.0

29.4

7.311.0

9.08.8

8.2

7.2

1Q18 2Q18 3Q18 4Q18 1Q19 2Q19

Banking Tariffs

Capital Markets and M&A Fees

Guarantees Issued

(BRL million)

75.9 87.994.4

87.391.6

74.5

26.3% 29.2% 31.1% 29.5% 25.4% 28.4% Services RevenueTotal Revenue

Service Revenues (BRL million) 2Q19 1Q19 2Q19x1Q19 2Q18 2Q19x2Q18 1H19 1H18 1H19x1H18

Guarantees Issued 50.8 50.3 0.9% 56.9 -10.7% 101.1 112.0 -9.8%

Capital Markets and M&A Fees 29.4 16.0 83.8% 20.0 46.8% 45.4 33.5 35.6%

Commercial Banking Tariffs 7.2 8.2 -13.1% 11.0 -34.7% 15.4 18.3 -15.8%

Total 87.3 74.5 17.2% 87.9 -0.6% 161.9 163.8 -1.2%

Expenses and Efficiency Ratio


Recurring Efficiency Ratio (Expenses/Revenues)

35.2% 35.6% 35.6% 37.0% 37.7% 36.0% 37.3%

2Q18 3Q18 4Q18 1Q19 2Q19 1H18 1H19

Expenses (BRL million) 2Q19 1Q19 2Q19x1Q19 2Q18 2Q19x2Q18 1H19 1H18 1H19x1H18

Personnel Expenses (49.9) (49.2) 1.5% (47.7) 4.6% (99.1) (95.5) 3.8%

Other Administrative Expenses (25.9) (24.6) 5.5% (23.3) 11.4% (50.5) (44.3) 14.1%

Subtotal (75.9) (73.8) 2.9% (71.0) 6.8% (149.6) (139.8) 7.0%

Profit Sharing (40.3) (39.2) 2.8% (39.2) 2.7% (79.5) (79.3) 0.2%

Total (116.2) (113.0) 2.8% (110.3) 5.3% (229.1) (219.1) 4.6%

Profitability


Recurring Net Income (BRL million)

Recurring ROAE (% p.a.)

111.7 116.1 121.4 121.2 125.2

220.2246.4

2Q18 3Q18 4Q18 1Q19 2Q19 1H18 1H19

12.2%

3.3%

11.9%

13.0% 13.3% 13.3% 13.0% 13.0% 13.0% 13.0%

2Q18 3Q18 4Q18 1Q19 2Q19 1H18 1H19

Guidance Revision

12

*Includes Loans, Guarantees Issued and Corporate Securities.

2019 Previous Reviewed

Expanded Credit Portfolio* 11% to 15% 6% to 10%

Personnel & Other Administrative Expenses 4% to 6% 4% to 6%

Investor Relations

Website: www.abcbrasil.com.br/ir

Email: [email protected]

Phone: +55 (11) 3170-2186

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Disclosure

The following material, on this date, is a presentation containing general information about the Banco ABC Brasil S.A. We offer no guarantee andmake no declaration, implicitly or explicitly, as to the accuracy, completeness or scope of this information.

This presentation may include forward-looking statements of future events or results according to the regulations of the Brazilian andInternational securities and exchange commissions. These statements are based on certain assumptions and analyses by the Company thatreflect its experience, the economic environment, future market conditions and expected events by the company, many of which are beyond thecontrol of the Company. Important factors that may lead to significant differences between the actual results and the statements of expectationsabout future events or results include the company’s business strategy, Brazilian and International economic conditions, technology, financialstrategy, financial market conditions, uncertainty regarding the results of its future factors, operations, plans, objectives, expectations andintentions, among others. Considering these factors, the actual results of the company may be significantly different from those shown orimplicit in the statement of expectations about future events or results.

The information and opinions contained in this presentation should not be understood as a recommendation to potential investors and noinvestment decision is to be based on the veracity, current events or completeness of this information or these opinions. No advisors to thecompany or parties related to them or their representatives should have any responsibility for any losses that may result from the use orcontents of this presentation.

Earnings Conference Call 2nd Quarter of 2019 · 2019-08-06 · Conference Call 2nd Quarter of 2019...

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