Earnings Release - Amazon S3 · Earnings Highlights (1H19 vs 1H18) 4 8. 7 Bn Adjusted net Income...
Transcript of Earnings Release - Amazon S3 · Earnings Highlights (1H19 vs 1H18) 4 8. 7 Bn Adjusted net Income...
EarningsRelease
BB em números
This presentation may include references and statements, plannedsynergies, estimates, projections of results, and future strategy for Bancodo Brasil, its Associated and Affiliated Companies, and Subsidiaries.Although these references and statements reflect the management’sbelief, they also involve estimates and unforeseen risks. Consequently,results may differ from those anticipated and discussed here. Theseexpectations are highly dependent on market conditions, on Brazil’seconomic and banking system performances, as well as on internationalmarket conditions. Banco do Brasil is not responsible for updating anyestimate in this presentation.
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Earnings Highlights
BB Results
Net Interest Income
Loan Portfolio
Loans to Individuals
Loans to Companies
Agribusiness Loans
ALL Expenses
Credit Quality by Portfolio
Net Interest Margin and
Spread by Portfolio
BIS Ratio
Guidance 2019
Net Interest Margin
AppendixFee Income
Administrative Expenses and
Cost-to-IncomeCredit Quality
Earnings Highlights (1H19 vs 1H18)
4
8.7 Bn
Adjusted net
Income
+38.5%
14.2 Bn
Fee Income
+6.7%
36.2%
Cost to
Income Ratio¹
170bps
Improvement
15.2 Bn
+0.3%
Administrative
Expenses
17.4%
Market ROE²
+ 455 bps
(1) Administrative Expenses / Operating Revenues accumulated in 12 months. Data refers to the income statement with reallocations.
(2) It reflects the metric that the main market analysts use to project results. The index is annualized using the linear method.
$
14.5 17.5
BB Results
ROE¹ (%)
(1) It reflects the metric that the main market analysts use to project results. The index is annualized using the linear method.5
Adjusted Net Income
R$ billion
Guidance (R$ bn)
2Q18 1Q19 2Q19
3.2
4.2 4.4
+36.8% +4.4%
13.2
2Q18 1Q19
16.8
2Q19
17.6
1H18
8.7
1H19
6.3
+38.5%
Net Interest Income
6
Funding Expenses stability
Good performance from
Treasury
+12.7% q/q
R$ billion 3.6
18.5 18.7
3.2
18.4
2.8
-6.0 -6.4
-2.8
2Q18
-2.4
1Q19
-2.6
-6.6
2Q19
12.7 12.7 13.1
+3.2% +2.5%
Loan Operations
Treasury ¹
Funding Expenses
Financial Expense for Institutional Funding ²
Net Interest Income
Loan Operations
revenues growth
+1.5% q/q
5.3 6.7
37.0 37.0
1H18
-12.0
-5.6
-13.0
-5.0
1H19
24.7 25.8
+4.5%
(1) It includes the result from interest, tax hedging, derivatives, and other financial instruments that offset the effects of the exchange rate variation in the result. (2) It includes senior bonds, subordinated
debt, and Hybrid Instruments in Brazil and abroad.
3.0 7.0
Guidance (%)
+25 bps on
loan operations
spread
Companies
spread
increased to
5.21% driven by
working capital
line.
Net Interest Margin¹ and by portfolio(%)
(1) Net interest income / average balance of earnings assets, annualized. It does not include recovery of write-offs
(2) It does not include government operations.7
7.74
2Q18 3Q18 4Q18 1Q19 2Q19
4.70
7.41
4.37
7.62
4.93 4.87
4.69
7.60
4.75
4.60 4.68
7.99
5.21
4.62
Loan Operations
Companies²
Agribusiness
16.09 16.13
16.54
16.31 16.35
Individuals
3Q18
4.00
2Q18 4Q18 1Q19 2Q19
2.822.86 2.96
3.94 3.98
2.92 2.99
3.97 3.89
Net Interest Margin (NIM)
Risk Adjusted NIM
Fee Income (1H19 vs 1H18)
8
Other
Checking Accounts
+5.4%
Insurance, Pension and
Premium Bonds
+20.5%
Consortium
+36.4%
Credit/Debit Cards
+12.2%
5.0 8.0
Asset
Management
+5.3%
Guidance (%)
R$ 14.2 Bn+6.7%
Capital Market
+11.2%
1H18 1H19 | R$ Mi
Consortium
4311H18
5871H19
36.4%
Credit/Debit Cards
9441H18
1,0591H19
Checking Accounts
3,5731H18
5.4%
Asset Management
2,9801H18
3,1371H19 5.3%
Highlights
Insurance, Pension and Premium Bonds
1,4681H18
1,7701H19 20.5%
12.2%
Capital Market
4151H18
3,7671H19
4621H19
11.2%
Administrative Expenses and Cost-to-Income Ratio
(1) Administrative Expenses / Operating Revenues, 12 months accumulated. Data refers to the income statement with reallocations.
(2) Fee Income / Administrative Expenses, 12 months accumulated. Data refers to the income statement with reallocations. 9
2.0 5.0
R$ billion
Guidance (%)
1Q192Q18
37.5
3Q18 2Q194Q18
37.9 37.7
36.9
36.2
99,603
Jun/17
96,168
Jun/18
97,675
Jun/19
456607 619
Jun/18Jun/17 Jun/19
4,429 4,152 4,092
Employees
Traditional Branches
Digital and Specialized Branches
1H18 1H19
15.2215.16
5.38
9.79
5.43
9.79
+0.3%
87.9
2Q18 3Q18 4Q18
87.0
1Q19 2Q19
89.5 89.9
92.2
Cost to Income Ratio (12 months)¹
Coverage Ratio (12 months)²
Number of Employees
Number of Branches
10
Loan Portfolio¹
-2.0 1.0
Guidance (% )
R$ billion
Increase of retail operations participation – Individuals
and SME – in the loan portfolio to 38.6% in 2Q19
(from 36.1% in 2Q18)(1) It includes private securities and guarantees provided.
(2) Variation in the government and abroad portfolios and guarantees.
-17.0
Jun/18
14.4
-7.8
Individuals Jun/19Agroindustrial
689.6
Wholesale Rural LoansSME
686.64.3
1.9
Other²
1.1
200.3
188.6
43.7
189.8
267.6
Jun/18
39.8
187.4
257.7
Mar/19
39.5689.6
184.8
204.6
257.7
Jun/19
685.3 686.6
-0.4% +0.2%
Abroad
Agribusiness Companies
Individuals
(1) It considers the organic Loan Portfolio.11
Individuals Loan Portfolio8.0 11.0
Payroll Loan:
+8.9% Jun/19 vs Jun/18
R$ billion
Guidance (%)
69.0
19.2
Jun/18
4.4
46.9
72.6
19.4
27.3
4.2
48.8
12.2
Mar/19
11.6 19.9
9.7
27.6
4.2
49.3
12.5
Jun/19
4.98.5
25.1
181.0193.0 198.4
75.1
+9.6% +2.8%
Auto LoanPayroll Loan
Salary Loan
Credit Card
Consumer Finance Mortgage
Other
Consumer Finance:
+97.0% Jun/19 vs Jun/18
Disbursement through
Mobile +168.9% 2Q19/2Q18
(1) Expanded view. It includes private securities and guarantees provided.
(2) Companies with gross revenue up to R$ 200 million. 12
Companies Loan Portfolio¹-13.00 -10.0
R$ billion
Guidance (%)
58.8
163.5 154.4
Jun/18
257.7
58.9 60.7
Mar/19
45.2
154.0
42.9
Jun/19
267.6257.7
44.4
-3.7% 0.0%
SME² Corporates Government
18.7
3.4
18.9
14.2
4.32.7
Jun/18
25.6
12.8
4.6
14.2
Jun/19
58.8 60.7
+3.2%
Working Capital Demais
Investment ACC/ACE
Receivables
+37.1%
SME
(1) It includes Rural Product Bills and guarantees provided. 13
Agribusiness Loans¹3.0 6.0
Market Share of 66.7% in
Rural Loans
R$ billion
Guidance (%)
170.4
Mar/19
184.8
22.3 18.4
Jun/18
166.3 169.0
14.4
Jun/19
188.6 187.4
-2.0% -1.4%
Agroindustrial Rural
Rural Product Bills grew
465% in 12 months
Harvest Plan 2019/2020:
Disbursement of R$ 103 billion
+20% higher compared to
disbursement made on the
harvest plan 2018/2019
+2.4%Jun19 / Jun18
ALL Expenses – Total Loan Portfolio
(1) Allowance for Loan and Lease Losses Expenses Net of Recovery of Write-offs.
(2) ALL expenses accumulated in 12 months / 12 months Average Loan Portfolio. 14
Cost of Risk² (%)ALL Expenses¹
-14.5 -11.5
Guidance (R$ Bn)
R$ billion
2Q18
-5.1
1Q19 2Q19
-3.6 -3.1 -3.6
-5.1
1.6
-4.9
1.7 1.5
-0.6%
Recovery of Write-offsALL Expenses - Credit Risk
3Q182Q18 4Q18 1Q19 2Q19
3.54
3.33
3.203.10 3.09-10.6 -9.9
1H18
2.8
1H19
3.2
-6.7-7.8
-14.6%
ALL / Loan Portfolio
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Credit Quality – Total Portfolio
NPL +90 days (%) Coverage Ratio (%)
Sep/18 Jun/19Jun/18 Dec/18 Mar/19
3.253.32
3.00
2.81
2.903.00
2.53
2.90
2.58
3.00
2.61
BB BB ex-specific caseBanking Industry
Jun/18
220.69
Sep/18 Dec/18 Mar/19 Jun/19
210.00
192.68
166.17
213.33
211.61210.00
213.94
174.43
217.24
217.84
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Credit Quality – by SegmentN
PL
+90 d
ays
(%)
Co
vera
ge
(%)
Sep/18 Mar/19Jun/18 Dec/18 Jun/19
3.333.27
3.08
3.25 3.31
184.93
113.60
228.04
194.48194.52 192.11
Sep/18 Mar/19Jun/18 Dec/18 Jun/19
3.02
5.10
3.683.15
3.84
3.23
Mar/19Jun/18 Dec/18Sep/18 Jun/19
1.61 1.62 1.531.68
1.54
3.08
240.41
151.44202.28
197.63
246.97228.82
246.97
175.75186.51181.14
194.37184.18
Individuals Companies Agribusiness
(1) Quarterly change in the balance of transactions over 90 days past due + current quarter write-offs / Classified Loan Portfolio of the previous quarter. 17
New NPL¹
0.980.80 0.79 0.74 0.91
BB Portfolio By Segment
0.52
3Q18
0.54
2Q18
0.27
2Q194Q18
0.69
1Q19
1.33
0.69
1Q192Q18 4Q18
0.30 0.45
3Q18
0.45 0.50
1.82
0.30
2Q19
0.53
0.97
0.37
(0.34)
0.68
1.57
Ind
ivid
ua
lsC
om
pa
nie
sA
gri
bu
sin
es
s
New NPL / Loan Portfolio (%) New NPL / Loan Portfolio - ex-specific cases
18.55 18.70 18.86 19.26 18.57
13.00 13.20 13.39 14.00 13.41
9.61 9.66 10.00 10.53 10.01
Jun/18 Sep/18 Dec/18 Mar/19 Jun/19
Tier II Tier I Common Equity Tier I
BIS Ratio Minimum CET1 of 11% in January/2022
(1) It considers the effects of the CMN Resolution 4,680/2018. 18
%
%
1
Credit Risk - RWA
10.53
-0.03
Other Common Equity Tier I - Jun/19
Common Equity Tier I - Mar/19
0.15
Mark to market
-1.07
10.010.05
Actuarial Assets Market Risk - RWA
0.44
Net Income
-0.06
Guidance 2019
Adjusted Net Income - R$ billion 14.5 to 17.5
NII - % 3 to 7
Loan Portfolio¹ (%) 3 to 6
Individuals (%) 7 to 10
Companies² (%) 0 to 3
Rural Loans (%) 3 to 6
Net ALLL Expenses - R$ billion -14.5 to -11.5
Fee Income(%) 5 to 8
Administrative Expenses (%) 2 to 5
8.7
4.5
1.1
9.7
-6.3
2.4
-6.7
6.7
0.3
1H19 Performance
19
Revised Guidance
Unchanged
Unchanged
-2 to 1
8 to 11
-13 to -10
Unchanged
Unchanged
Unchanged
Unchanged
2019 Guidance
(1) Organic Domestic Loan Portfolio with private securities and guarantees. Government operations not included.
(2) Government operations not included.
BB em números
21
22
23
24
25
26
27
28
29
30 Disbursements
Net Income Breakdown
Income Statement with
Reallocations Main Lines
One-Off Items
Net Interest Income
Commercial Funding
Loan Portfolio by Risk Level
Renegotiated Overdue Loan
Portfolio
Portfolio Delinquency
Vintages
Net Income Breakdown
(1) NII net of recovery of write-offs. 21
25.8
Administrative
Expenses
NII¹ Fee Income
(6.7)
ALL
(9.5)
14.2 (15.2)
Other Adjusted
Net Income
8.7
1H19
R$ billion
Income Statement with Reallocations - Main Lines
22
Chg. (%) on
2Q18 1Q19 1H18
Net Interest Income 12,658 12,739 13,062 3.2 2.5 24,697 25,801 4.5
Allowance for Loan Losses (3,583) (3,126) (3,561) -0.6 13.9 (7,827) (6,687) -14.6
ALLL Expenses - Credit Risk (5,134) (4,851) (5,055) -1.5 4.2 (10,583) (9,907) -6.4
Credit Recovery 1,551 1,725 1,494 -3.7 -13.4 2,756 3,219 16.8
Net Financial Margin 9,075 9,613 9,501 4.7 -1.2 16,870 19,114 13.3
Fee income 6,798 6,795 7,439 9.4 9.5 13,346 14,234 6.7
Contribution Margin 14,715 15,236 15,864 7.8 4.1 27,898 31,100 11.5
Administrative Expenses (7,732) (7,566) (7,649) -1.1 1.1 (15,164) (15,216) 0.3
Commercial Income 6,832 7,542 8,084 18.3 7.2 12,452 15,627 25.5
Other Operating Income (174) 205 67 - -67.4 (329) 272 -
Income Before Taxes 5,924 6,034 6,037 1.9 0.1 10,700 12,071 12.8
Income and Social Contribution Taxes (1,870) (852) (571) -69.5 -33.0 (2,874) (1,422) -50.5
Statutory Profit Sharing (406) (544) (604) 48.8 11.0 (794) (1,149) 44.6
Adjusted Net Income 3,240 4,247 4,432 36.8 4.4 6,266 8,679 38.5
One-Off Items (105) (242) (225) 114.0 -7.1 (383) (467) 22.1
Net Income 3,135 4,005 4,207 34.2 5.1 5,884 8,212 39.6
Chg. (%) on2Q18 1Q19 2Q19 1H18 1H19
R$ million
One-Off Items
23
Chg. (%) on
2Q18 1Q19 1H18
Adjusted Net Income 3,240 4,247 4,432 36.8 4.4 6,266 8,679 38.5
One-Off Items (105) (242) (225) 114.0 -7.1 (383) (467) 22.1
Economic Plans (503) (464) (547) 8.7 18.0 (1,042) (1,011) -3.0
Extraordinary Provision for Lawsuits 2 20 3 31.2 -84.7 5 23 -
Provision Legal Law suits – Adjustment of Parameters - - (1,579) - - - (1,579) -
Tax Credit - - 1,034 - - - 1,034 -
BB Seguridade - Premium and Brokerage Adjustments 75 - - - - 75 - -
Real Estate exchange with the Federal Government 162 - - - - 162 - -
One-Of f Items - BB Seguridade - - - - - - - -
Tax Eff. and Stat. Prof. on One-Off Items 159 201 864 - - 417 1,066 155.3
Net Income 3,135 4,005 4,207 34.2 5.1 5,884 8,212 39.6
Chg. (%) on2Q18 1Q19 2Q19 1H18 1H19
R$ million
Net Interest Income
(1) It includes senior bonds, subordinated debt, and Hybrid Instruments in Brazil and abroad. (2) It includes the result from interest, tax hedging, derivatives, and other financial instruments that offset the
effects of the exchange rate variation in the result.24
Chg. (%) on
2Q18 1Q19 1H18
Net Interest Income 12,658 12,739 13,062 3.2 2.5 24,697 25,801 4.5
Loan Operations 18,545 18,377 18,655 0.6 1.5 36,981 37,033 0.1
Funding Expenses (5,967) (6,379) (6,582) 10.3 3.2 (11,967) (12,961) 8.3
Financial Expense for Institutional Funding¹ (2,762) (2,412) (2,565) -7.1 6.4 (5,577) (4,977) -10.8
Treasury² 2,842 3,152 3,554 25.0 12.7 5,259 6,706 27.5
2Q18 1Q19 2Q19Chg. (%) on
1H191H18
R$ million
Commercial Funding
R$ billion
30.8
96.2100.6
610.736.8
Jun/18
20.471.4
18.0
Sep/18
17.433.7
Dec/18
16.333.8
Mar/19
98.8
67.412.432.4
Jun/19
596.6 599.7 614.6 616.7
210.9
167.1
66.8
210.6
172.8
209.7
174.9
67.8
226.2
101.1 97.8
66.4
231.2
174.5174.2
+0.4%
Demand Deposits Repo Agreement with Private Securities³Time Deposits¹ Agribusiness Let. Credit + Mortgage Bonds²Savings Deposits Interbank Deposits
85.086.3 86.0 84.988.9
Adjusted Net Loan Portfolio⁴ / Commercial Funding
%
(1) It includes Other Deposits. (2) It includes the balance of CRI (Certificates of Real Estate Receivables). (3) It includes part of the balances of the Private Securities shown on Notes to the Consolidated
Financial Statements. (4) It does not include the domestic onlending loans.
.
25
Loan Portfolio by Risk Level¹
(1) BB Classified Loan Portfolio. 26
R$ million
Minimum Supplementary Required Minimum Supplementary Required Minimum Supplementary Required
AA 328,642 0 0 0 51.5 313,618 0 0 0 49.9 305,770 0 0 0 48.8
A 69,289 346 42 389 10.9 70,282 351 48 399 11.2 71,219 356 43 399 11.4
B 132,268 1,323 484 1,807 20.7 138,768 1,388 480 1,868 22.1 141,931 1,419 490 1,909 22.7
C 53,899 1,617 1,045 2,662 8.5 55,093 1,653 1,169 2,821 8.8 56,875 1,706 1,239 2,945 9.1
D 11,882 1,188 106 1,295 1.9 10,252 1,025 163 1,188 1.6 10,196 1,020 171 1,191 1.6
E 12,695 3,808 328 4,136 2.0 12,947 3,884 7 3,891 2.1 8,078 2,424 7 2,430 1.3
F 4,764 2,382 58 2,440 0.7 4,608 2,304 46 2,349 0.7 9,198 4,599 33 4,632 1.5
G 5,967 4,177 3 4,180 0.9 3,637 2,546 5 2,551 0.6 3,390 2,373 2 2,375 0.5
H 18,273 18,273 0 18,273 2.9 19,680 19,680 0 19,680 3.1 19,665 19,665 0 19,665 3.1
Total 637,677 33,114 2,067 35,181 100.0 628,884 32,831 1,916 34,747 100.0 626,322 33,562 1,985 35,547 100.0
AA-C 584,097 3,286 1,572 4,858 91.6 577,761 3,392 1,696 5,088 91.9 575,795 3,482 1,772 5,254 91.9
D-H 53,580 29,828 496 30,323 8.4 51,123 29,439 220 29,659 8.1 50,527 30,080 213 30,293 8.1
Jun/18 Mar/19 Jun/19
Balance Share % Balance Share % BalanceProvision
Share %ProvisionProvision
(1) Principal and interest payments net of interest accrued in the period. (2) Quarterly change in the balance of over 90 days past due transactions + current quarter write-off. (3) It considers the
Classified Loan Portfolio of the previous quarter.
Renegotiated Overdue Loan Portfolio
1Q192Q18 3Q18 4Q18 2Q19
1.401.200.70
1.43 1.29
New NPL (R$ billion)²
5.09 6.09 6.273.08
5.67
New NPL
27
2Q18 1Q19 2Q19Credits Renegotiated When Past Due - Changes
Initial Balance 23,630 22,874 22,727Contracts 2,254 2,336 2,736
Amortization Net of Interest¹ (1,304) (843) (1,439)
Write-Off (1,665) (1,641) (1,355)
Past due Renegotiated Loan Portfolio (A) 22,914 22,727 22,669ALL Balance (B) 10,867 12,229 12,165NPL + 90 days (C) 4,490 3,650 3,584Indicators - %
ALL / Loan Portfolio (B/A) 47.4 53.8 53.7
NPL + 90 days / Loan Portfolio (C/A) 19.6 16.1 15.8
ALL Balance/NPL + 90 days (B/C) 242.0 335.0 339.5
Credits Renegotiated/Classified Loan Portfolio 3.6 3.6 3.6
Credits Renegotiated Contracts %
0 to 14 days Past due 716 26.16
15 to 90 days Past due 806 29.48
Over 90 days Past due 813 29.72
Written-Off Recovery 401 14.65
Total 2,736 100
2Q19
New NPL / Loan Portfolio (%)³
R$ million
Portfolio Delinquency by Lines
28
NPL Share % NPL Share % NPL Share %
Individuals 3.33 100.00 3.25 100.00 3.31 100.00
Payroll Loan 2.0 36.5 1.8 36.4 1.8 36.9
Mortgage 2.9 24.7 3.1 24.4 3.2 24.2
Credit Card 2.6 13.2 2.8 13.6 3.2 13.5
Salary Loan 5.2 10.1 4.0 9.7 4.2 9.8
Auto Loans 1.0 6.8 0.9 5.5 1.2 4.8
Companies 5.10 100.00 3.02 100.00 3.84 100.00
Working Capital 3.9 50.1 1.2 48.9 1.6 49.5
Investments 1.9 23.9 0.8 24.1 2.5 23.8
FEC/ACE 0.1 7.7 0.9 8.2 0.0 8.6
Receivables 1.6 5.0 1.0 6.2 1.0 6.0
Agribusiness 1.61 100.00 1.68 100.00 3.08 100.00
Pronaf 3.1 23.1 3.3 23.9 3.2 24.1
Working Capital for Input Purchase 0.9 20.4 1.1 20.4 0.9 21.0
Pronamp 2.7 12.8 2.6 12.2 2.2 12.6
BNDES/Finame Rural 1.8 3.8 1.7 3.6 0.9 3.7
Jun/18 Mar/19 Jun/19
%
Vintages
Annual Vintage – Individuals Loan Portfolio Annual Vintage – SME Loan Portfolio
29
Gross Quarterly Disbursement ¹ (Base 100 on 1Q17 )
100
150121
142125
151 146165
138
191
1Q17 1Q182Q17 3Q17 3Q184Q17 2Q18 4Q18 1Q19 2Q19
Brazil
100133 117 123 119
157 147 156 169193
2Q171Q17 3Q17 2Q184Q17 1Q18 3Q18 4Q18 1Q19 2Q19
100
186
150181
118
182 191162
87
180
4Q181Q17 3Q172Q17 3Q184Q17 1Q18 2Q18 1Q19 2Q19
100
140
106131 132 128 119
172148
195
3Q18 4Q183Q171Q17 2Q17 2Q181Q184Q17 1Q19 2Q19
(1) Revised series. Gross disbursements. Does not include credit card operations, overdraft and revolving fast turn.
Individuals Loan
Agribusiness Loans Companies Loans
30
31
+55 (11) 4298-8000www.bb.com.br/[email protected]
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18th floor
Bela Vista
São Paulo – SP | Brazil
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