1q12 institutional presentation

Institutional Presentation1Q121Q12

Summary

History and ProfilePINEHistory

Business StrategyCompetitive LandscapeFocus on the ClientCorporate CreditCorporate CreditHedging DeskPINE Investimentos and DistributionPillarsRating Upgrades

Highlights and Results

Corporate Governance and PINE4Organizational Structure Organizational Structure Corporate GovernanceCommitteesCapital Increase, Split, and Shareholder StructureDividends and Interest on own Capitalp

Appendix

2/32Investor Relations | 1Q12 |

History and Profile

PINESpecialized in providing financial solutions for large corporates…

Credit Portfolio by Annual Client RevenuesMarch 31st, 2012Up to R$150

million15%

Over R$1 billion52%

R$150 million to

R$500 million

R$500 million to $

million16%

Profile

Focused on establishing long-term relationships with Business is structured along four primary business lines:

R$1 billion17%

g g plarge corporates

Close relationships and product penetration

g p y

• Corporate Credit: credit and financing products• Hedging Desk: instruments for hedging and risk

management• PINE I ti t I t t B ki d• PINE Investimentos: Investment Banking and

Investment/Wealth Management• Distribution: Funding and investment solutions

for foreign and local investors


History...with extensive knowledge of Brazil’s corporate credit cycle.

1939Pinheiro Family

founds

End of 2007Focus on expanding the Corporate Banking franchise

Di ti ti f th ll d d tibl l b i

October, 2011Subscription of PINE`s capital by DEG 1,015 1,029

foundsBanco Central do

Nordeste

May, 2007

October, 2007Creation of the Hedging Desk

Discontinuation of the payroll-deductible loan business

801 827 825

867

1975Noberto Pinheiro

2005Noberto Pinheiro becomes

PINE’s sole shareholder

May, 2007Creation of PINE Investimentos product line

and start up of Cayman branch

Noberto Pinheiro becomes one of

BMC’s controlling shareholders

PINE’s sole shareholder

4,118

5,747

6,921 7,300

121 126 140 136 152 171 209

335 Corporate Credit Portfolio (R$ Millions)

Shareholders' Equity (R$ Millions)

1997155 184 222 341 521 620 755 663 761

1,214

2,854 3,070

18 62

121 126 140 136

Noberto and Nelson Pinheiro sell their stake in BMC and

found PINE

Devaluation Nasdaq Sept 11 Brazilian Banco Santos SubprimeAsian Russian Banco European

Dec

-97

Dec

-98

Dec

-99

Dec

-00

Dec

-01

Dec

-02

Dec

-03

Dec

-04

Dec

-05

Dec

-06

Dec

-07

Dec

-08

Dec

-09

Dec

-10

Dec

-11

Mar

-12


March, 2007IPO

Devaluationof the real

Nasdaq Sept. 11 Brazilian Elections

(Lula)

Banco Santos liquidity crisis

SubprimeAsian Crisis

Russian Crisis

Banco Panamericano

European Community

May, 201215 years

Business Strategy

Competitive LandscapePINE serves a niche market of companies that lack adequate banking options, seeking a bank that fully understands their needs…understands their needs…

Market

Consolidation of the banking sector has

Large Multi-Services banks

Consolidation of the banking sector hasdecreased the supply of credit lines and financialinstruments for corporates

Foreign banks are in a deleveraging process

100% Corporate

g g g p

PINE

100% focused on providing complete service to companies, offering customized products

.

Corporate & SME

Foreing banks

Full service Bank – Credit, Hedging, andInvestment Bank products – with room forgrowth

Corporate & SME

SME & Retail

~10 clients per officer

Competitive Advantages: Focus

Retail

Fast response: Strong relationship withclients, with credit committee twice aweek and answer to clients in up to oneweek

S i li d i


Specialized services Tailor-made solutions Product diversity

Focus Always on the ClientThe bank develops a strategy of product diversity, tailored to meet the needs of each client.

CDIsCDs

LCIs

CCBs PrivatePricing of Assets and

Liabilities

Fixed Income

Currencies

CDBs

RDBs

LCAs

Eurobonds

PrivatePlacements

Financial Letters

Local Currency

Liabilities

LiquidityManagement

Working Capital

Overdraft

Currencies

Commodities

Equities

DebenturesCRIs

TreasuryDistribution

Foreign Currency

Trading

Working CapitalUnderwriting

BNDES Onlending

Bank Guarantees

Compror

ACC/ACE

OverdraftAccounts

ClientsCorporate

Credit PINE

Investimentos

Capital Markets

Advisory

Local Currency

Onlending

Foreign Currency

Trade Finance

g

Advisory

Investment/Wealth

Private Placements

Structured/

BankGuarantees

Fixed Income Funds

ACC/ACE

Export Finance

Finimp

Letters of Credit

2,770 onlending

Hedging Desk

Fixed Income Currencies

Credit Funds

Wealth Management

Structured/ProjectFinance

Structured/ ProjectFinance

StructuredFinance

Funds

Portfolio Management

Swap NDFsStructured Swaps

Syndicated andStructured LoansCommodities


Options

Corporate CreditStrong track record and solid credit origination and approval process.

Actions Credit Committee

Meets twice a week – reviewing 20 proposals on average

Minimum quorum: 4 members - attendance of CEO or

Personalized, agile service, working closely with clientsand keeping a low client to account officer ratio: eachofficer handles ~10 economic groups on average. q

Chairman is mandatory

Members:Chairman of the Board

officer handles 10 economic groups on average.

Geographic coverage of clients, providing the bank withlocal and extremely up-to-date credit intelligence andinformation.

Chairman of the BoardCEOChief Operations OfficerChief Administrative OfficerChief Credit Officer

Established long term relationship with more than 600economic groups

Origination network is comprised of 11 branches dividedinto 14 origination platforms in Brazil’s major economiccenters

Participants:Executive Director of the Hedging DeskTreasurer

centers

More than 30 credit analysts, assuring that analysis isfundamentally driven and based on industry-specificintelligence

Credit Approval: Electronic Process

Credit AnalystsOther members of the Corporate Banking origination team

Efficient loan and collateral processes, documentation,and controls, which has resulted in a low NPL track record

pp

Origination OfficersOrigination Officers

Credit origination Credit analysis visit to clients data

Credit AnalystsCredit AnalystsRegional Heads of

Origination and Credit Analysis

Regional Heads of Origination and Credit

Analysis

Presentation to the Credit Committee

Vice President and Analysts of CreditVice President and Analysts of Credit

Centralized and unanimous

CREDIT COMMITTEE CREDIT COMMITTEE

Discussion on sizing collateral


Credit origination Credit analysis, visit to clients, data updates, interaction with internal

research team

Presentation to the Credit Committee Centralized and unanimous decision making process

Discussion on sizing, collateral, structure, etc.

Hedging DeskPINE is the 1st player in terms of commodities to clients¹.

Client Notional Derivatives Portfolio by Market Notional Value and (MtM)March 31st, 2012

R$ Millions

358 354 354

Notional Value

MtMMtM Stressed

Fixed Income

30%

Currency62%

106 84

178 157 126

236 224

Commodities8% 3 428 3 457 3 709 3 712 4 287 8%

Market Segments Portfolio Profile

Notional: R$4.3 billion

Scenario on March 31stFixed Income: Fixed Floating Inflation Libor

3,428 3,457 3,709 3,712 4,287

Mar-11 Jun-11 Sept -11 Dec-11 Mar -12

Scenario on March, 31st

Duration: 198 days

Mark-To-Market : R$126 million

Fixed Income: Fixed, Floating, Inflation, Libor

Currencies: Dollar, Euro, Yen, Pound, Canadian Dollar,Australian Dollar

Stress Scenario (Dollar: +31% and Commodities Prices: -30%):

Stressed MTM: R$354 million

Commodities: Sugar, Soybean (Grain, Meal and Oil), Corn,Cotton, Metals, Energy


*Source: Cetip Report, March 2012.

PINE Investimentos and Distribution...adding value for clients, while optimizing the use of the Bank's capital.

PINE INVESTIMENTOS

Market Segments

Capital Markets:16

Volume of Underwriting Transactions Revenues

Capital Markets:

Structuring and Distribution of Fixed

Income Transactions317

Financial Advisory

Project Finance

M&A

Hybrid capital transactions

233

Hybrid capital transactions

Assets under Management

Fixed Income

-

1Q11 4Q11 1Q12

0 1

1Q11 4Q11 1Q12

Distribution Desk

Credit Funds

Exclusive Mandates

Portfolio Management

Foreign InvestorsFamily Offices Corporates Financial Institutions

Local and Foreign Investors


High Net Worth Individuals Asset Managers Pension Funds

PillarsStrategy supported by solid fundamentals, built and achieved over the years…

Strong and motivated teamAdequate capital structureCapital Adequacy Ratio (BIS) of 16 4% Meritocracy

Right incentivesHighly qualified team

Capital Adequacy Ratio (BIS) of 16.4%Regulatory Capital: R$1.3 billionDEG and PINE partnershipR$ 237 million subordinated debt, qualified as Tier II capital

Corporate clientsStrong relationshipCustomized service

Efficient funding structureLonger average maturities: 17 months (Mar/12)Greater diversification of funding sources

In-depth knowledge of client needsProduct diversity

USD25 million 10 year funding with ProparcoUSD37.5 million funding uptake in Islamic format with the Saudi bank Al RajhiUSD106 million A/B Loan (Jan/11) with the IIC


Rating Upgrades...with market recognition and positive evaluation by rating agencies.

On December 7th, 2011:PINE’s rating in global scale, toBB+ from BB- (two notches)

On May 14th, 2012Foreign and Local Currency Long-Term IDR to 'BB' from 'BB'-

PINE’s rating in national scale, tobrAA from brA (three notches)

On August 23rd, 2011:Local currency rating, to brA from

National Long-Term Rating to'A+(bra)' from 'A(bra)'Viability rating upgraded to 'bb'from 'bb-'Banco Pine S.A. USD 125 millionLocal currency rating, to brA from

brA-Reaffirmed the Rating in foreigncurrency in BB-Revision from PINE’s outlook topositive

Subordinated notes to 'B+' from 'B'

positive

Fitch attributed this upgrade to the diversification ofPINE's funding profile and its good assets andliabilities management, provided by the adequate

h f h di d f di b k ddi i

The agency based its ratings on the strong asset-quality, adequate liquidity, capital, and earnings.S&P also emphasizes the gradual fundingdi ifi i h h f i i match of the credit and funding books. In addition,

the Agency considered that the positive liquidity gapallied with the good cash position evidences theBank's overall solid financial strength. According tothe Agency, the Bank’s continued increase in feeincome mainly due to higher product penetration is

diversification, through foreign issuances,securitizations, and the recent capital increasesubscribed by DEG


income, mainly due to higher product penetration, isa good indicator of the successful maintenance ofprofitability levels.

Highlights and Results

1Q12 Key FiguresThe main indicators showed improvement in the period…

R$ Millions

Expanded CorporateCredit Portfolio1

25.4 %

Total Funding

20.7%

Corporate CreditCoverage

80 bps

5 823 7,300 5,322 6,421 2.7% 3.5%5,823

Mar 11 Mar 12 M 11 M 12M 11 M 12Mar -11 Mar -121 Includes guarantees and private securities

Mar-11 Mar-12

Shareholders´ Equity Net Income ROAE

Mar-11 Mar-12

17.1 %51.6%

430 bps

879 1,029 31 47 15.2% 19.5%


Mar-11 Mar-12 1Q11 1Q12 1Q11 1Q12

Product and Revenue Diversification ...with contributions from all business lines, as a result of the strategy of complete service to clients.

Clients with more than one Product Penetration Ratio – Clients with more than one Product

3.0

More than 1 product 1 product

2.760% 56% 42%

2.5

40% 44% 58%

Corporate Revenues BreakdownMar -10 Mar -11 Mar -12Mar-10 Mar-11 Mar-12

1Q11 1Q12

Corporate Credit69.0%

Treasury3.4%

PINE Investimentos

0.5%

Corporate

PINE Investimentos

10 2%

Hedging Desk

Credit57.3%

Treasury8.2%

10.2%


Hedging Desk27.1%

Hedging Desk24.3%

Credit PortfolioThe portfolio continued to grow, +5.3% QoQ and +25.4% YoY…

R$ Millions

6 9357,300

Expanded Corporate Credit Portfolio1

547 622 782

765 782

1.021 Trade finance

5 2925,773 5,823

6,3146,732

6,935

881 883 883 827 1.022 1.117

1.372 1.534 1.687 1.684

840 722

569

547 622 Guarantees

BNDES Onlending

4,5564,828

5,292

71 122 251 297 342

261 472

644 846 881 912

881

634 842 BNDES Onlending

Private Securities

2,821 2,792 3,251 3,358 3,132 3,126 3,300 3,286 3,370

Working Capital

¹ Includes debentures, CRIs, and hedge fund shares

Mar-10 Jun-10 Sept-10 Dec-10 Mar-11 Jun-11 Sept-11 Dec-11 Mar-12


Credit Portfolio Profile... growing in a diversified manner…

Credit Portfolio by Industry Segments Geographic Distribution

Midwest

North2%

Electric and Renewable

Energy8%

Foreingn Trade5%

Transportation and Logistics

5%Food Industry

4%Specialized

Services

Northeast5%

Midwest10%

Agriculture

Infrastructure8%

Services4%

Meatpacking3%

South7%

8% Metal and Mining3%

Beverages and Tobacco

3%

Southeast76%

Construction9%

3%

Vehicles and Parts3%

Chemicals2%

Sugar and Ethanol20%

2%

Telecom2%

Financial Instituions

2%Materials of Constrution and

D ti

Others9%


Decoration2%

Credit Portfolio Quality... with quality, collaterals, and adequate credit coverage.

Credit Portfolio Quality – March 2012 Non Performing Loans > 90 days

B32.7%

0.7% 0.7%

Contracts Overdue

Installments Overdue

C

0.6%

0.5% 0.5%

0 3% 0 3% 0 3%

AA A

C11.1%

D-E1.5%

F-H

0.3%

0.2%

0.3% 0.3%

0.2%

Total Credit Coverage Collaterals

80 b

AA-A52.7%

F-H2.0% Mar-11 Jun-11 Sept-11 Dec-11 Mar-12

80 bps -10 bps Products

Pledge44%Guarantees

2%

2.7% 3.6% 3.5%

Investments3%


Mar-11 Dec-11 Mar-12 Receivables31%

Properties Pledge

20%

FundingDiverse sources of funding…

R$ MillionsR$ Millions

Trade Finance6,248

6,544 6,421

220 237 246 233 267 310 353 276

158 102 86

250 125

413 377 435

596 814

753 841 Private Placements

Multilateral Lines5,182

4 622

5,437 5,322

5,936

250 281 224 320 210 165 106 161 46 42 53 66 112 31

453

626 829

867 898 867 867 868

-

-21

33

247 256 281 291

203

194 194

201

220 237

239 227

200 160

282

87 151

166 158

172

448 405

413 International Capital Markets

Local Capital Markets

4,6224,304

1 064 1,124 1,463 1,530 1,114

1,287 1,253 1,196 1,186 85 175

198 214 218

212 228 250 281

248 201

224 320 272

210 165

50 36

46 41

53

242 453

-276 BNDES

Demand Deposits

I t b k Ti D it

1,566 1,646 1,654 1,592 1,720 1,845 1,965 2,130 2,128

1,064 Interbank Time Deposits

High Net Worth Individual Time Deposits

Corporate Time Deposits

Mar-10 Jun-10 Sept-10 Dec-10 Mar-11 Jun-11 Sept-11 Dec-11 Mar-12

Corporate Time Deposits

Institutional Time Deposits


Asset & Liability Management... presenting a positive gap of 3 months between the credit and funding portfolios.

Matching of Transactions

CREDIT FUNDING

88%82%

Credit Exposure to Total Funding Ratio

BNDES BNDES

Trade Finance Trade Finance

82% 80%76%

81%

Deposits

Working Capital, PrivateSecurities* And Cash Letras Financeiras

Off h F di* I l d d b CRI b d d h d f d h

5,3224,304 6,421

ALM Deposits vs. Total Funding

Offshore Funding* Includes debentures, CRIs, eurobonds, and hedge fund shares

Mar-11 Jun-11 Sept-11 Dec-11 Mar-12

R$ MillionsR$ Millions

30%37% 41%

Others

, 6,421

2,668

1,969

1,594 1,608

2,336

1 432

Credit Funding

70% 63% 59%

Others

Deposits

-

,

435

109 31

1,432

915

144


Mar-10 Mar-11 Mar-12

No maturity Up to 3 months

(includes Cash)

From 3 to 12 months

From 1 to 3 years

From 3 to 5 years

More than 5 years

Capital Adequacy Ratio (BIS)...and strong capitalization ratios.

Tier II Tier I

Minimum Regulatory Capital (11%)

3.9% 3.6%3.6% 3.7% 3.4%

4.5%4.2%

3 1%14.9%

18.5% 18.4%17.4% 17.1% 16.6%

19.6%18.5%

16.4%

0.5%3.6% 3.7% 3.4% 3.1%

14.4% 14.6% 14.8% 13.8% 13.4% 13.2% 15.1% 14.3% 13.3%

Mar -10 Jun -10 Sept -10 Dec -10 Mar -11 Jun -11 Sept-11 Dec -11 Mar -12

R$ millions Bis Ratio(%)Tier I 1,025 13.3%Tier II 237 3.1%Total 1,262 16.4%


Total 1,262 16.4%

Guidance 2012PINE is ready to capture 2012's business opportunities, and reaffirms the guidance for 2012.

Guidance

Expanded Corporate Credit Portfolio 17% - 22%

P l d Ad i i i 8% 2%Personnel and Administrative Expenses 8% - 12%

NIM 5.5% - 7.5%

ROAE 17% - 20%


Corporate Governance and PINE4

Management StructureNon-bureaucratic, entrepreneurial, and meritocratic culture with a flat hierarchy, speeding the decision making process.making process.

Noberto Pinheiro Noberto Pinheiro Jr Maurizio Mauro Gustavo Junqueira Mailson da Nóbrega Antonio Hermann

INTERNAL AUDIT COMPENSATION AUDIT COMMITTEEEXTERNAL AUDIT

Noberto Pinheiro Noberto Pinheiro Jr Maurizio Mauro Gustavo Junqueira Mailson da Nóbrega Antonio Hermann

Chairman Vice Chairman IndependentMember

External Member IndependentMember

IndependentMember

CEONoberto Pinheiro Jr

Tikara Yoneya COMMITTEE AUDIT COMMITTEEPWC

ASSET MANAGEMENTDan Cohen

HUMAN RESOURCESSidney Vilhena

COO Norberto Zaiet

CROGabriela Chiste

CAOUlisses Alcantarilla

CFOSusana Waldeck

InternationalOriginationInvestments

Cash Flow ManagementAsset & Liabilities BackOffice

ControllingAccountingTax Planning

CreditCompliance & InternalControls

Sales & TradingResearch Macro / Commodities

LegalCollaterals ManagementSpecial AssetsMiddle Office

gITAccounts PayableOffice ManagementMarketingInvestor Relations

Risks


From April 2012 on

Corporate GovernancePINE has the best corporate governance practices…

Three independent members and one external member on the Board of DirectorsThree independent members and one external member on the Board of DirectorsMailson Ferreira da Nóbrega: Brazil’s Finance Minister from 1988 to 1990Maurizio Mauro: Former CEO of Booz Allen Hamilton and Grupo AbrilAntonio Hermann: Former CEO of Banco Itamarati, Director at FEBRABAN and elected Director ofBrazilian Banking AssociationBrazilian Banking AssociationGustavo Junqueira: Former Head of PINE Investimentos, Member of the Board of Directors atEZTEC, Financial Advisor at Arsenal Investimentos and CFO at Gradiente Eletronica

São Paulo Stock Exchange (BM&FBovespa) Level 2 Corporate GovernanceSão Paulo Stock Exchange (BM&FBovespa) Level 2 Corporate Governance

Audit and Compensation Committee reporting directly to the Board of Directors

100% tag along rights for all shareholders including non-voting shares100% tag along rights for all shareholders, including non voting shares

Arbitration procedures for fast settlement of litigation cases

First Brazilian bank to release BR GAAP and IFRS quarterlyFirst Brazilian bank to release BR GAAP and IFRS quarterly


Committees…favoring collective decision making.

Main decisions are taken by committees: Board of Directors and a structure of specific committeesNon-stop exchange of knowledge, ideas, and informationTransparencyp y

45 days BOARD OF DIRECTORS

RISK COMMITTEE

AUDIT COMMITTEE

COMPENSATION COMMITTEE

CEO

Bi-annually Monthly45 days

COMMITTEES

Twice a week WeeklyMonthly Bi-monthly Every 2 monthsWeekly Monthly Quarterly On demand45 days

CREDITTREASURY

COMMITTEE ALCO

EXECUTIVE LITIGATIONHUMAN

RESOURCESINVESTMENT

BANKPERFORMANCE EVALUATION IT ETHICS

INTERNAL CONTROLS AND

COMPLIANCE


From April 2012 on

Capital Increase, Split, and Shareholder StructureSuccessful capital increase done in September and approved by the Central Bank in December.

The first and only equity investment by DEG in a Brazilian bank. The agreement will expand the collaboration between the two institutionsthe two institutions.

Split adjusted price per share: R$15.06 Total shares: 2,904,228 preferred sharesTotal amount: R$43,749,988.80

Approximately 14% split on February 27th.

Split ratio: 14.18New shares issued: 12,274,766

Ownership structure:As of March 31, 2012

Common Preferred Total %

Controlling Shareholder 51.886.766 15.595.863 67.482.629 68,3%

M g t 5 155 650 5 155 650 5 2%Management - 5.155.650 5.155.650 5,2%

Free Float - 26.214.495 26.214.495 26,5%

Individuals - 3.608.935 3.608.935 3,7%

Institutional Investors - 10.445.307 10.445.307 10,6%

Foreign Investors - 12.160.253 12.160.253 12,3%


Total 51.886.766 46.966.008 98.852.774

Dividends and Interest on Own CapitalPINE has delivered an attractive dividend yield paying dividends/interest on own capital on a quarterly basis.basis.

55

33

45

30 35

40 35

16

25 25 30

15

1S07 2S07 1S08 2S08 1S09 2S09 1S10 2S10 1S11 2S11 1Q12


Appendix

Social Investment and ResponsibilityPINE supports and promotes the Brazilian culture and sports

Social

Instituto Alfabetização Solidária

CulturePaulo von Poser: exhibit of the painter Paulovon Poser, who is one of Brazil’s most prominentartists

Instituto Casa da Providência Quebrando o Tabu: documentary based on theanalysis from the former President of Brazil,Fernando Henrique Cardoso, on the fight againstdrugsAlém da Estrada: motion picture, whichreceived the award for best director in the 2010

SportsMinas Tênis Clube: training program forathletes

received the award for best director in the 2010Rio Festival

Responsible Credit

“Li f E i ” h B k d fi

Most Green Bank

“Lists of Exceptions”: the Bank does not financeprojects or those organizations that damage theenvironment, are involved in illegal laborpractices or produce, sell or use products,substances or activities considered prejudicial tosociety.y

System of environmental monitoring, financed bythe IADB and coordinated by FGV, and internally-produced sustainability reports for corporateloans.

Recognized by the International Finance Corporation(IFC), private agency programs of the World Bank as themost "green" bank as a result of its transactions underthe Global Trade Finance Program (GTFP) and its on


the Global Trade Finance Program (GTFP) and its onlending to companies focused on renewable energy andethanol.

Investor Relations

Noberto Pinheiro Jr.

CEOCEO

Susana Waldeck Norberto Zaiet Jr.

CFO COO

Raquel Varela

Head of Investor Relations

Alejandra Hidalgo

Investor Relations Manager

Phone: +55-11-3372-5343

www.pine.com.br/ir

[email protected]


This presentation contains forward-looking statements related to business prospects, estimates for operating and financial results, and estimates related to prospects for growth at Banco Pine. These aremerely projections and as such are based exclusively on the expectations of Banco Pine’s management concerning the future of the business and its continued access to capital to fund the Company’sbusiness plan. Such forward-looking statements depend, substantially, on changes in market conditions, government regulations, competitive pressures, and the performance of the Brazilian economy andthe industry, among other factors and risks disclosed in Banco Pine’s filed disclosure documents, and are, therefore, subject to change without prior notice.

1q12 institutional presentation

Economy & Finance