Earnings Presentation - Banco Votorantim...Earnings growth agenda has three pillars: (i) increase...
Transcript of Earnings Presentation - Banco Votorantim...Earnings growth agenda has three pillars: (i) increase...
Earnings Presentation
1st Quarter, 2016
Disclaimer: This presentation may include references and statements on expectations, planned synergies, growth estimates, projections of results, and future strategies for Banco
Votorantim, it’s associated and affiliated companies, and subsidiaries. Although these references and statements reflect the management’s belief, they also involve imprecision and
risks that are highly difficult to be foreseen. Consequently, they may conduct to different results from those anticipated and discussed here. These expectations are highly dependent on
market conditions, on Brazil’s economic and banking system performances, as well as on international market conditions. Banco Votorantim is not responsible for bringing up to date
any estimate in this presentation.
2
Net Income of R$ 86M in 1Q16 Consistent revenue generation, conservative approach to credit and nominal cost base reduction
Net Income
of R$86M
Net Income of R$ 86M in 1Q16, compared to R$ 77M in 4Q15 and R$ 122M in 1Q15
Shareholders’ equity reached R$ 8.1B in Mar/16, up 6.1% in 1Q16
Consistent
revenue
generation
Net Interest Income (NII) grew 4.7% in 1Q16/1Q15, to R$ 1,233 million in 1Q16
NIM¹ of 5.1% p.y. in 1Q16, stable in relation to 1Q15 and 0.5 p.p. higher than 4Q15 due to higher NII
Income from Services and Insurance amounted to R$ 311 million in 1Q16, 5.3% higher than in 1Q15
Conservative
approach
to credit
Expanded credit portfolio decreased 9.9% in the last 12 months and 5.6% in 1Q16, to R$ 61.9B
• CIB drove the portfolio reduction in the 1Q16 (Mar/16: R$ 28.4B; Dec/15: R$ 31.9B)
• In Consumer Finance, the Vehicles portfolio remained flat in 1Q16, at R$ 27.7B
Delinquency
under control
90-day NPL decreased to 4.6% in Mar/16, against 5.7% in Dec/15
• Wholesale: 90-day NPL of 2.4% (Dec/15: 5.8%)
• Consumer Finance: 90-day NPL of 5.6% (Dec/15: 5.7%). Vehicles’ remained stable at 5.3%
Strengthening of the balance sheet: Coverage Ratio of 145% in Mar/16, against 117% in Mar/15
Effective cost
management
Personnel and administrative expenses decreased 5.1% in relation to 4Q15 and 2.0% over 1Q15
• Nominal expenses reduction reflects the continuous focus on improving operational efficiency
Efficiency Ratio for the last 12 months remains below 40% (Mar/16: 39.1%)
1. Ratio between Net Interest Income and Average Interest-Earning Assets
Executive summary
Highlights of results
3
8677
137146
122+12.0%
1Q16 4Q15 3Q15 2Q15 1Q15
Net income totaled R$ 86M in 1Q16,
up 12% over 4Q15 Shareholders’ equity grew 6.1% in 1Q16,
ending Mar/16 at R$ 8.08B
Shareholders' equity (R$B)
7.78
+6.1%
Mar/16
8.08
Dec/15
7.62
Sept/15 Jun/15
7.85
Mar/15
7.68
Net Income of R$ 86M in 1Q16 Shareholders' equity ended Mar/16 at R$8,080 million, growth of 6.1% in the quarter
Net income (R$M)
1. Earnings growth agenda has three pillars: (i) increase profitability of business, (ii) Increase operational efficiency, and (iii) Strengthen synergies with Banco do Brasil.
Note: in 4Q15, R$ 114M were provisioned for dividend distribution to shareholders, equivalent to 25% of net income
Results confirm the progress in our
sustainable earnings growth agenda¹
Consolidated results
4
Net Interest Income (A) 1,178 1,098 1,233 12.3% 4.7%
ALL expenses¹ (B) (417) (453) (508) 12.0% 21.6%
Net Financial Margin (A+B) 761 645 726 12.5% -4.6%
Operating Income/Expenses (540) (543) (551) 1.4% 2.1%
Income from Services and Banking Fees 243 266 257 -3.6% 5.6%
Personnel and Administrative expenses (588) (607) (576) -5.1% -2.0%
Tax expenses (132) (88) (96) 8.2% -27.6%
Equity in Income of Associated Companies and Subsidiaries 38 40 43 7.4% 13.2%
Other Operating Income/Expenses (100) (153) (178) 16.4% 77.9%
Operating Income (Loss) 221 102 175 71.7% -20.9%
Non-Operating Income (Loss) (3) (2) (0) -77.6% -85.4%
Income Tax and Profit Sharing (96) (23) (88) - -8.2%
Net Income 122 77 86 12.0% -29.3%
(R$ million) 1Q15 4Q15Var.
1Q16/4Q151Q16
Var.
1Q16/1Q15
Highlights of Results Consistent net income, with consistent revenue generation and nominal cost base reduction
1. Allowance for Loan Losses (ALL), net of revenues from recovery of written-off loans.
Managerial Income Statement (R$M)
Consolidated results
5
Consistent revenue generation Net Interest Income (NII) grew in 1Q16, despite the credit portfolio reduction
1. Ratio between Net Interest Income and Average Interest-Earning Assets; 2. Includes guarantees provided and private securities; 3. Sum of reserve requirements, interbank
transactions, securities and loan portfolio; 4. Result of the stake in Votorantim Corretora de Seguros (insurance brokerage) is recognized using the equity method.
Revenues
NIM reached 5.1% in 1Q16,
driven by growth in NII
Income from Services grew QoQ, despite the
decrease in auto finance origination
Net Interest Income (R$M) e NIM¹ (% p.y.) Income from Services, Fees and Insurance4 (R$M)
Expanded credit
portfolio² (R$B) 68.7 65.5
Insurance
(Commission)
Services and
Fees
1,2331,098
1,178
5.1%
4.6%
5.2%
+4.7% +12.3%
1Q16 4Q15 1Q15
61.9
243 266 257
5255 54
-3.0% +5.3%
1Q16
311
4Q15
321
1Q15
295
Auto finance
origination (R$B) 3.3 3.1 2.9
Average
interest-earning
assets³ (R$B)
93.2 98.0 97.9
6
-5.6% -9.9%
Corporate &
Investment
Banking (CIB)
Auto Finance
Payroll
Credit Cards
Mar/16
61.9
28.4
27.7
4.4 1.3
Dec/15
65.5
31.9
27.7
4.6 1.3
Mar/15
68.7
32.9
29.4
5.3 1.0
Maintenance of the conservative approach to credit Total credit portfolio decreased 5.6% in 1Q16, while the Vehicles portfolio remained flat
Credit portfolio by segment
Expanded credit portfolio (R$B) (includes guarantees provided and private securities)
Focus on profitability (vs. asset growth)
-11.0%
-0.1%
∆Mar16
/Dec15
-3.4%
+3.4%
-13.6%
-5.7%
∆Mar16
/Mar15
-16.3%
+26.4%
7
271358 402
285 348
14790
672
168160
+12.0%
1Q16
508
4Q15
453
3Q15
1,075
2Q15
448
1Q15
417
Strengthening of the balance sheet over the past 12 months Coverage ratio reached 145% in Mar/16, versus 117% in Mar/15
Credit provision expenses – ALL¹ (R$M)
Credit provision expenses
grew 12% in relation to 4Q15
90-day CR remains in conservative level,
ending Mar/16 at 145%
90-day Coverage Ratio² (%) – Managed portfolio
1. Allowance for Loan Losses, net of income from recovery of written-off loans; 2. Ratio between the balance of ALL and the balance of loans past due over 90 days;
3. Beginning of Banco Votorantim’s adjustment process, which was concluded in 2014.
3,271
4,3874,232
2,2542,923
3,628
145%150%
117%
Mar/16 Dec/15 Mar/15
90-day NPL balance (R$M)
Allowance for Loan Losses balance (R$M)
90-day
Coverage
ratio 78% in
Sept/11³
Delinquency
reduction
22.2%
-5.1%
∆1Q16/
4Q15
Wholesale
Consumer
Finance
Prudential
strengthening of ALL
Credit indicators – ALL and 90-day Coverage
8
5.3%
5.6%
5.3%
5.7%
5.3%
5.4%
5.3%
5.4%
5.3%
5.3%
Total
90-day NPL down to 4.6% in Mar/16 (5.7% in Dec/15) Vehicles’ delinquency remains stable in 5.3%, while the market indicator¹ rose 90 bps against Mar/15
90-day NPL / Managed loan portfolio (%)
Wholesale
4.6%
5.7% 5.3% 5.2%
6.5%
Mar/16
2.4%
Dec/15
5.8%
Sept/15
5.0%
Jun/15
4.8%
Mar/15
9.0%
Consumer
Finance
Vehicles Consumer
Finance 90-day market¹ NPL
increased 90bps over
the last 12 months
Credit indicators – Delinquency
1. National Financial System. 90-day NPL obtained in the historical series released on the Central Bank website.
9
Mar/16
1.0
1.6%
Sept/15 Mar/15
1.1
Sept/14 Mar/14
0.9
Sept/13 Mar/13
1.0
Sept/12 Mar/12
0.7
Sept/11 Mar/11
1.5
Sept/10 Mar/10
1.8
Auto finance: maintenance of quality in auto finance
origination, focusing on used cars
Inad 30¹ (by vintage)
Used car dealers
New car dealers
Origination with better quality has contributed
to the favorable trend in delinquency
1%2%
11%
27%
Mar/16 Dec/15 Dec/14 Dec/13
Lower quality vintages Lower quality vintages /
Managed auto finance portfolio²
Auto Finance – Origination by channel (R$B) and first payment default by vintage – Inad 30¹ (%)
Consumer Finance – Auto Finance
1. First payment default, or % of each month’s production with first installment past due over 30 days; 2. Includes securitization with substantial risk retention before Res. 3,533
10
-13.1%
Used
Cars
Other
Vehicles¹
1Q16
2.9
2.4
(83%)
0.5
4Q15
3.1
2.6
(82%)
0.6
1Q15
3.3
2.7
(82%)
0.6
4Q10
7.8
4.1
(52%)
3.7
26%41% 41%
444452
1Q16 4Q15 4Q10
Auto finance: greater focus on used cars and maintenance
of tight credit origination standards
Origination of auto loans (R$B)
1. New cars, trucks and motorcycles; 2. Benchmark interest rate (Central Bank). Note: In Mar/16, the average ticket size was R$ 20,000, and the average vehicle age was 4.8 years (portfolio)
Banco Votorantim is one of the leading players
in the auto financing market
Down payment
Average term
Down payment (%) and Average term (months)
Greater focus on used cars, which
represented 83% of 1Q16 origination Maintenance of conservative lending standards
D Cars Market:
• New cars: -33%
• Used cars: -13%
29.129.324.6
Mar/16
14.25
Dec/15
14.25
Dec/10
10.75
Auto finance interest rate x Selic² rate (% p.y.)
Selic
BV Financeira
-11.8%
-18.9%
∆1Q16
/1Q15
Consumer Finance – Auto Finance
11
272 302 261
316305
315
-2.0% -5.1%
Administrative
Personnel
1Q16
576
4Q15
607
1Q15
588
Personnel and administrative expenses (R$M)
1. Excludes expenses with labor lawsuits. Note: The IPCA price index reached 9.4% in the last 12 months. In 1Q16, labor lawsuits summed up R$ 106 million against
R$ 79 million in the 4Q15. Excluding labor claims, personnel and administrative expenses would have decreased 7.4% in 1Q16/4Q15.
Efficiency ratio –
last 12 months¹ (%) 39.1 37.8
∆1Q16
/4Q15
+3.4%
∆1Q16
/1Q15
-0.1%
-13.7% -4.2%
Nominal cost base reduction Administrative and personnel expenses decreased 5.1% over 4Q15 and 2.0% compared to 1Q15
Personnel and administrative expenses
39.5
12
8677137146
122
726645
59
843761 726645618843761
1Q16 4Q15 3Q15 2Q15 1Q15
Net Interest Income (NII) Credit provision expenses – ALL
Personnel and Administrative expenses Net Income and Net Margin (post provisions)
R$ million
Summary: Net Income of R$ 86M in 1Q16 Highlight to the Net Margin growth and cost base reduction
+12.3%
1Q16
1,233
4Q15
1,098
3Q15
1,134
2Q15
1,291
1Q15
1,178
272 268 286 302 261
316 314 275 305 315
-5.1%
Admin.
Personnel
1Q16
576
4Q15
607
3Q15
561
2Q15
582
1Q15
588
271 358 402 285 348
147
672
168 160
+12.0%
Consumer
Finance
Wholesale
1Q16
508
4Q15
453
3Q15
1,075
2Q15
448
90
1Q15
417
Net Margin without prudential provisions
Net Margin
Net income
-5.1%
+22.1%
∆1Q16
/4Q15
Prudential
strengthening of ALL
Consolidated results
13
Funding profile improved over the last years Bills and Credit Assignments accounted for 47% (R$ 34.0B) out of the total funding sources
Funding
Other ¹
-7.2%
Bills (LF, LCA and LCI)
Loans securitized to
Banco do Brasil
Debentures
(BV Leasing)
Loans and onlendings
Sub debt
Securities abroad
Time deposits (CD)
72.3
17.5
(24%)
16.5
(23%)
16.7
7.0
2.3 2.2
Dez/15
78.0
17.2
6.6 3.3
15.7
17.9
7.9
6.9
8.1 2.2 2.0
Dez/14
72.3
16.3
15.2
17.4
6.7
6.2
Mar/16
2.4 1.4
Dez/13
75.6
15.7
(21%)
12.8
(17%)
6.6
6.7
7.4
6.9
5.8 4.3
16.1
LF: R$14.1B
LCA and LCI: R$3.4B
Funding evolution (R$ billions)
Expanded credit portfolio²/
Total Funding 81% 80% 72%
1Q16: +R$ 3.2B
75%
Bond matured (R$ 5B)
in Feb/16
Additionally, Banco Votorantim has a stand-by credit
facility of ~R$7B from BB, which has never been tapped
1. Includes cash and interbank deposits and Structured finance certificates (“COEs”); 2. Excludes guarantees provided.
Note: International funding is 100% hedged for BRL
14
Total Capital 10,523 10,742 9,742
Tier I Capital 6,873 6,686 6,587
Common Equity Tier I 6,873 6,686 6,587
Additional Tier I - - -
Tier II Capital 3,651 4,056 3,155
Risk Weighted Assets (RWA) 76,289 70,549 67,714
Credit risk 68,988 62,926 59,714
Market risk 2,894 2,843 1,984
Operational risk 4,407 4,780 6,016
Minimum Capital Requirement 8,392 7,760 6,687
Basel Ratio (Capital/RWA) 13.8% 15.2% 14.4%
Tier I Capital Ratio 9.0% 9.5% 9.7%
Common Equity Tier I Ratio 9.0% 9.5% 9.7%
Additional Tier I Ratio - - -
Tier II Capital Ratio 4.8% 5.8% 4.7%
Mar.16Dec.15Mar.15BASEL RATIO
(R$ Million)
Basel Ratio of 14.4% in Mar/16 Tier I Capital rose to 9.7%, entirely composed of Common Equity
Note: In 2016, the minimum capital requirement was changed to 10.50% (11.00% in 2015), including 0.63% for maintenance capital.
Capital structure
15
Appendix
16
Banco Votorantim is one of the leading banks in Brazil “Top 10” in total assets, with strong shareholders and shared governance
Banco Votorantim is one of the largest
privately-held Brazilian banks in total assets...
...and also in terms of loan portfolio
10 largest Banks in Dec/15 – Loan Portfolio¹ (R$B)
10 largest Banks in Dec/15 - Total Assets (R$B)
10th
Shareholder
50% Total
Banco Votorantim - Overview
Equal
representation
of each
shareholder
Board of
Directors
Executive board
Fiscal
Council
Audit
Committee
Compensation
& HR
Committee
Products &
Marketing
Committee
Finance
Committee
Total: 50.00%
Voting: 49.99%
Non-voting: 50.01%
Total: 50.00%
Voting: 50.01%
Non-voting: 49.99%
Votorantim Group Banco do Brasil
Ownership Structure
Corporate Governance Structure
1.On-balance loan portfolio according to Bacen’s Resolution 2,682
10th
110
148
175
242
682905
926
1,204
1,285
1,439
CEF
Itaú
Banco do Brasil
Bradesco
BNDES
Safra
Santander BTG Pactual
HSBC
Votorantim
State-owned
Foreign
National privately-held
49
50
66
71
260392
435
539
674
705
Itaú
CEF
Banco do Brasil
Votorantim Safra
BTG Pactual
Santander BNDES
Bradesco
HSBC State-owned
Foreign
National privately-held
17
Banco do Brasil Grupo Votorantim +
Consumer Finance
Auto
Finance
To originate portfolios with quality, scale and profitability
To focus on used auto finance (multi-brand dealers), where BV has a history of leadership and expertise
Other
Businesses
Payroll loans: to focus on
INSS (portfolio refinancing)
and Private (portfolio growth)
Credit cards, insurance,
individual loans and
CrediCasa (home equity): to
leverage the existing client
base
Other synergies with BB:
Promotiva, mortgage, etc.
Wealth
Mgmt. & BVEP
Asset: 9th largest in the market, with innovative products and growing synergies with BB
R$ 51.2B in AuM¹
Private: focus on estate management through taylor-made solutions
BVEP: investment in real estate projects
Wealth Mgmt.
Corporate &
IB (CIB)
To be the best wholesale bank to our target clients, focused on:
• Long-term relationships
• Capturing synergies in the origination and structuring of financial solutions
• Efficient capital management
Wholesale
Diversified business portfolio Focus on increasing business profitability, operating efficiency and synergies with BB
Strategy
1. Assets under management 2. Includes guarantees provided by the Bank and private securities Note: In Mar/16, the outstanding volume of loans (off-balance) securitized with recourse prior to Resolution 3,533 totaled R$ 0.1B (versus R$ 0.3B in Dec/15)
Shareholders
Pillars
Expanded² credit portfolio
R$ 61.9B
R$ 33.5B
R$ 27.7B R$ 5.8B
R$ 28.4B
18
Consumer Finance: increased focus on used auto
finance and INSS payroll loans (retirees and pensioners)
Payroll Loans Auto Finance
Consumer Finance Businesses
Loan portfolio (R$B) Loan portfolio (R$B)
Among market leaders in auto financing, with the following
advantages:
• Capillarity: presence in ~13,000 car dealerships nationwide
• Agility: 84% of proposals with automatic credit decision
• Expertise: continuous improvement of management tools
(pricing, credit, collection etc.)
• Long-term relationship: first access to customer record
Mar/15
29.4
24.1
5.3
Used
New
Mar/16
27.7
23.9
3.8
Dec/15
27.7
23.7
4.1
INSS
Private
Public
Mar/16
4.4
3.0
0.8
0.6
(14%)
Dec/15
4.6
3.1
0.8
0.7
Mar/15
5.3
3.5
0.8
1.0
(19%)
States: 40%
Cars: 95%
Consumer Finance businesses
Focus on refinancing the INSS payroll loan portfolio
(retirees and pensioners)…
...and on increasing the private payroll loan portfolio
Selective operation in public payroll agreements
Continuous improvement of management tools
(pricing, credit, collection etc.)
19
9.7 (34%)
7.8 (28%)
5.4 (19%)
3.5 (12%)
1.2
0.7
Highlights and strategy Corporate & Investment Bank (CIB)
Wholesale: continued focus on improving return on capital
and on strengthening the product portfolio
Wholesale Business
Additional strengthening of the balance sheet
• Prudential strengthening of credit provisions in view of the
uncertainties of the macroeconomic scenario
• 90-day Coverage Ratio exceeds 200%
Conservative approach to credit
• Focus on profitability (vs. asset growth)
Increased relevance of BV to its target clients
• Focus on 400 Corporate groups with credit exposure and
better risk profile, plus Financial Institutions
Exit of non-core clients
Focus on capturing synergies in the origination and
structuring of Credit, IB, Derivatives and FX
2015
22.1
2014
16.4
FX Ranking4 – Traded Volume (US$ B)
Loans2
Onlending
Financing export / import Other3
Guarantees provided
Private
securities1
Expanded credit
portfolio
R$ 28.4B
Diversified portfolio of
wholesale products
Wholesale business
Expanded credit portfolio (R$B e %)
1. Includes debentures and promissory notes; 2. Includes export credit notes, working capital and Loan Offshore; 3. Rural Financing e Advances on Exchange Contracts; 4. Ranking published by the Brazilian Central Bank. Only considers Primary Market.
17th 12th
20
Balance Sheet
Balance Sheet
Mar.16/Dec.15 Mar.16/Mar.15
CURRENT AND LONG-TERM ASSETS 105,142 109,698 108,890 (0.7) 3.6
Cash and cash equivalents 124 180 210 16.6 69.7
Interbank funds applied 14,743 17,187 17,030 (0.9) 15.5
Securities and derivative financial instruments 27,236 30,424 31,117 2.3 14.3
Derivative financial instruments 2,227 2,550 2,929 14.9 31.5
Interbank accounts or relations 67 72 442 - -
Loan Operations, Leases and Others receivables 53,646 51,138 48,363 (5.4) (9.8)
Alowance for loan losses (4,144) (4,152) (3,046) (26.6) (26.5)
Tax credit 6,825 7,833 7,273 (7.1) 6.6
Others 4,419 4,466 4,572 2.4 3.4
NON-CURRENTS 369 522 417 (20.1) 13.0
Investments 195 324 216 (33.4) 11.1
Fixed assets 101 97 98 0.8 (3.1)
Intangible and deferred charges 73 100 103 2.8 40.4
TOTAL ASSETS 105,511 110,221 109,307 (0.8) 3.6
Mar.16/Dec.15 Mar.16/Mar.15
CURRENT AND LONG-TERM LIABILITIES 97,803 102,556 101,186 (1.3) 3.5
Deposits 4,928 4,206 4,491 6.8 (8.9)
Demand deposits 86 81 78 (4.5) (9.5)
Interbank deposits 1,636 1,933 2,086 8.0 27.5
Time deposits 3,206 2,192 2,327 6.1 (27.4)
Money market borrowings 29,227 32,800 36,653 11.7 25.4
Acceptances and endorsements 24,409 25,323 20,860 (17.6) (14.5)
Interbank accounts 177 83 35 (58.2) (80.3)
Borrowings and onlendings 7,500 7,893 7,032 (10.9) (6.2)
Derivative financial instruments 2,746 2,914 2,776 (4.7) 1.1
Others obligations 28,816 29,337 29,339 0.0 1.8
Subordinated debts 7,079 6,928 6,648 (4.0) (6.1)
Credit transactions subject to assignment 15,873 15,677 16,538 5.5 4.2
Others obligations 5,863 6,732 6,153 (8.6) 4.9
DEFERRED INCOME 29 48 41 (14.5) 40.0
SHAREHOLDERS’ EQUITY 7,679 7,617 8,080 6.1 5.2
TOTAL LIABILITIES 105,511 110,221 109,307 (0.8) 3.6
BALANCE SHEET | Assets
(R$ Million)Mar.15 Dec.15 Mar.16
Variation %
BALANCE SHEET | Liabilities
(R$ Million)Mar.15 Dec.15 Mar.16
Variation %
21
Mar/16
51.2
Dec/15
47.4
Sept/15
46.6
Jun/15
43.8
Mar/15
41.3
Total Assets Assets under Management¹
On-balance loan portfolio
Mar/16
109.3
Dez/15
110.2
Set/15
110.3
Jun/15
103.3
Mar/15
105.5
Financial highlights
Jun/15
Consumer
Finance
Wholesale
Mar16
48.7
33.6
17.4
33.5
15.2
Sept/15
51.1
Dec/15
51.0
34.2
17.0
51.8
35.1
54.3
35.8
16.7
Mar/15
18.5
Shareholders’ Equity
Mar/15
7.78 7.85 7.68 7.62
Jun/15
8.08
Mar/16 Sept/15 Dec/15
1. Includes onshore funds (ANBIMA criteria) and private clients resources.
Financial highlights
R$ billion
22
Net Interest Income (A) 1,178 1,098 1,233 12.3% 4.7%
Average Interest-Earning Assets (B) 93,183 98,020 97,909 -0.1% 5.1%
Compulsory Reserves (Bacen) 48 24 206 - -
Interbanks Funds Applied 11,059 16,689 17,109 2.5% 54.7%
Securities 28,184 30,258 30,771 1.7% 9.2%
Loan Portfolio 53,892 51,049 49,823 -2.4% -7.5%
NIM (A/B) 5.2% 4.6% 5.1% 0.5 p.p. -0.1 p.p.
Var.
1Q16/1Q154Q15 1Q16
Var.
1Q16/4Q15
NET INTEREST MARGIN (NIM)
(R$ million)1Q15
Net Interest Margin (NIM)
Financial highlights – NIM
23
Total Personnel¹ and Administrative expenses (A) 493 528 470 -11.0% -4.8%
Total Revenues (B) 1,358 1,251 1,354 8.3% -0.3%
Net Interest Income (NII) 1,178 1,098 1,233 12.3% 4.7%
Fee/Banking Fee Income 243 266 257 -3.6% 5.6%
Equity in Income of Associated Companies and Subsidiaries 38 40 43 7.4% 13.2%
Other Operating Income/Expenses (100) (153) (178) 16.4% 77.9%
Efficiency Ratio (A/B) - period 36.3% 42.2% 34.7% -7.5 p.p. -1.6 p.p.
Efficiency Ratio - last 12 months 37.8% 39.5% 39.1% -0.4 p.p. 1.3 p.p.
Var.
1Q16/1Q15
Var.
1Q16/4Q154Q15 1Q161Q15
EFFICIENCY RATIO (ER)
(R$ million)
Efficiency Ratio
Financial highlights - ER
1. Excludes expenses with labor lawsuits
24
3,824 4,200 4,1523,046
4,144
6.7%
8.6%8.6%7.6%7.6%
Sept/15
3,979 225
Jun/15
235 155
Mar/15
4,232
87 225
4,425 4,387
Dec/15 Mar/16
3,271
Specific + Additional
Generic2 ALL balance / Managed loan portfolio
ALL Balance (R$M) Managed loan portfolio rated by risk level¹ (%)
Credit quality indicators
88.8%
11.2%
Sept/15
89.7%
10.3%
Jun/15
90.6% 89.8%
9.4%
Dec/15
10.2%
Mar/15
AA-C
D-H
89.5%
10.5%
Mar/16
166 151 170 197141
693838834
5781,215
1Q16 3Q15 1Q15 4Q15 2Q15
Credit Recovery (R$M) Net Loss (R$M)
412683 669
495
1,074
9.1%
3.9%5.3%5.3%3.0%
4Q15 1Q15 3Q15 2Q15 1Q16
Net loss Net Loss/Managed loan portfolio Credit Recovery Write-off
Credit portfolio
1. According to Bacen’s Resolution 2,682; 2. Considers balance of R$ 225M of “generic” credit provisions recognized as Liabilities in the "Other“ line (see Note #19d of
1Q16 Financial Statements)
25
1.07%
1.75% 1.57%
-0.12%
1.90%
0.98% 0.67%
1.64% 2.24%
0.94% 1.04% 1.36%
1.00%
1.22
0.55
4Q15
0.69 0.90
3Q15
0.84 0.82
2Q15
0.83
-0.07
1Q15
0.58
1.05
4Q14
0.67 0.55
3Q14
0.77
1Q16 2Q14
0.86 0.96
1Q14
0.87
1.36
4Q13
0.87
0.58
3Q13
0.90 0.66
2Q13
1.34
0.90
1Q13
1.15
0.68
0.38
New NPL rate
New NPL
rate Write-off (R$B)
New NPL (R$B)
Credit portfolio
1. Variation in the balance of 90-day NPL balance + loans written-off to loss in the quarter, divided by loan portfolio by the end of the immediately preceding quarter
Managed Loan Portfolio (A) 65,923 63,546 61,281 60,539 58,281 56,806 55,712 55,231 55,422 52,505 51,576 51,250 48,799
90-day NPL Balance 4,056 3,616 3,373 3,081 3,563 3,662 3,273 3,154 3,628 2,727 2,712 2,923 2,254
90-day NPL Quarterly Variation (B) (465) (439) (244) (292) 482 99 (388) (119) 474 (902) (14) 211 (669)
Write-off (C) 1,144 1,339 902 869 874 857 771 666 578 834 838 693 1,215
New NPL (D=B+C) 680 900 659 578 1,356 955 383 547 1,052 (67) 823 903 546
New NPL Rate¹ (D/A) 1.00% 1.36% 1.04% 0.94% 2.24% 1.64% 0.67% 0.98% 1.90% -0.12% 1.57% 1.75% 1.07%
1Q13 2Q13 3Q13 4Q13 4Q15NEW NPL
(R$ Million)3Q151Q14 2Q14 3Q14 4Q14 1Q15 2Q15 1Q16
26
Wholesale has a diversified credit portfolio Top 20 sectors account for 85% of the Wholesale credit exposure
Credit portfolio
1. Numbers exclude private securities and are net of credit provisions. Note: Does not consider application of Credit Conversion Factor of 50% in transactions relating to
some specific guarantees provided.
R$M Part.(%) R$M Part.(%) R$M Part.(%)
Financial Institutions 4,297 17.1% 5,229 21.5% 3,800 17.3%
Sugar and Ethanol 2,522 10.0% 2,153 8.9% 2,033 9.2%
Telecom 1,687 6.7% 1,675 6.9% 1,568 7.1%
Petrochemical 1,310 5.2% 1,684 6.9% 1,558 7.1%
Retail 1,234 4.9% 1,313 5.4% 1,440 6.5%
Agribusiness 1,375 5.5% 1,001 4.1% 908 4.1%
Mining 480 1.9% 1,006 4.1% 889 4.0%
Railw ays 705 2.8% 771 3.2% 810 3.7%
Eletricity Generation 777 3.1% 683 2.8% 751 3.4%
Government 600 2.4% 401 1.7% 616 2.8%
Pulp and Paper 662 2.6% 755 3.1% 606 2.8%
Road Cargo Transportation 649 2.6% 533 2.2% 527 2.4%
Residential Construction 628 2.5% 522 2.1% 462 2.1%
Electricity Distribution 309 1.2% 461 1.9% 448 2.0%
Food Industry 314 1.2% 314 1.3% 423 1.9%
Heavy Construction 749 3.0% 472 1.9% 401 1.8%
Oil & Gas 772 3.1% 401 1.7% 401 1.8%
Automotive 533 2.1% 404 1.7% 391 1.8%
Services 713 2.8% 414 1.7% 304 1.4%
Slaughterhouses 460 1.8% 284 1.2% 292 1.3%
Other sectors 4,422 17.5% 3,823 15.7% 3,378 15.4%
Total¹ 25,198 100.0% 24,300 100.0% 22,005 100.0%
Wholesale - Sectoral concentrationMar.15 Mar.16Dec.15
27
Banco Votorantim’ s main ratings
Ratings
RATING AGENCIES International National
Domestic Foreign Domestic
Fitch Ratings
Long-term BB- AA+(bra)
Short-term B F1+(bra)
Standard & Poor’s
Long-term BB brA+
Short-term B brA-1
Moody’s
Long-term Ba2 Ba3 Aa3.br
Short-term NP NP BR-1
Brazil
Sovereign rating
BB
BB
Ba2