2q12 earnings conference call

Earnings Conference Call2Q12

2/16Investor Relations | 2Q12|

Agenda

2Q12 Events and Highlights Page 3

Capital Increase Page 4

2Q12 Financial Highlights Page 5

Product and Revenue Diversification Page 6

Loan Portfolio Page 7

Loan Portfolio Profile Page 8

Loan Portfolio Quality Page 9

Hedging Desk Page 10

PINE Investimentos Page 11

Funding Page 12

Asset & Liability Management Page 13

Capital Adequacy Ratio (BIS) Page 14

Guidance for 2012 Page 15


2Q12 Events and Highlights

Capital increase of approximately R$155.0 million. The increase will take place starting with theexecution, on this date, of a subscription agreement with DEG in the amount of R$30.0 million coupledwith an investment of R$93.7 million by the controlling shareholder and R$7.2 million by PINE’smanagement. In addition, the French agency Proparco approved the principle of an investmentamounting up to €10 million. These transactions will increase the BIS Ratio to 17.5%, an improvement ofapproximately 160 bps. All transactions are subject to regulatory approvals and other precedentconditions as announced in the Material Fact released today.

In April, PINE carried out its first offering of financial bills known as Letras Financeiras, issuing R$313.2million in two-year notes.

Highly liquid balance sheet with a strong cash position of R$1.4 billion, which corresponds to 38% of timedeposits.

Positive liquid gap between the credit and funding portfolios of 3 months: 13 months for credit and 16months for funding. PINE has maintained this positive gap for over 2 years.

Positive contributions from all business lines in the quarter: 58.4% from Corporate Credit, 19.8% from theHedging Desk, 11.5% from the Treasury, and PINE Investimentos contributed 10.3%, demonstratingrecurrence in its results.

Ranked amongst the 15 largest banks in the Cetip derivatives ranking and 1st in terms of OTC commoditiesNDF for clients

9th largest bank in Brazil offering credit to large corporates, 15th in credit to companies, and 5th in wealthgenerated per employee, according to the “Melhores e Maiores” ranking compiled by Exame magazine


Capital IncreasePINE is honored with DEG’s trust and partnership in the announcement of another transaction and welcomes Proparco.

The aforementioned transactions further strengthen the capital structure of PINE, as well as the relationships with DEGand Proparco, and will allow the Bank to continue to expand its activities in a sustainable manner.

After approval by the Brazilian Central Bank, the ownership structure will have the following composition:

The second equity investment by DEG in a Brazilian financial institution, both on PINE, and the first by Proparco in aLatin America financial institution.

Summary

Total of ~R$155 million

Premium on Shares: 15% over the average price of the last 60 days

Total Shares: 6,558,123 common shares and 4,352,590 preferred shares

BIS Ratio: to 17.5%, 14.5% for Tier I and 3.0% for Tier II

In addition to the subscription made by DEG, of R$30.0 million, and by Proparco, of R$25.0 million, the capital increasealso includes the participation of the controlling shareholder and the senior management, in a total of R$100.8 million.

With Capital increase Common Preferred Total %Controlling Shareholder 58,444,889 15,595,863 74,040,752 67.5%Management - 5,591,947 5,591,947 5.1%Free Float - 30,005,788 30,005,788 27.3%

DEG - 5,005,068 5,005,068 4.6%Proparco - 1,750,700 1,750,700 1.6%Individuals - 3,382,393 3,382,393 3.1%Local Institutional Investors - 11,054,997 11,054,997 10.1%Foreign Investors - 8,812,630 8,812,630 8.0%

Treasury - 125,000 125,000 0.1%Total 58,444,889 51,318,598 109,763,487 100%


2Q12 Financial HighlightsThe main performance indicators continued to show positive development in the period…

R$ Millions

6,305 7,478

Jun -11 -12

Loan Portfolio¹

18.6%

5,902 6,933

Jun -11 Jun -12

Total Funding

17.5%

36 46

2Q11 2Q12

Net Income

27.8%

Jun Jun

893 1,053

Jun -11 -12

Shareholders’ Equity

17.9%

17.3% 18.7%

2Q11 2Q12

ROAE

140 bps

2.7% 4.0%

Jun-11 Jun-12

Credit Coverage

130 bps

¹ Includes debentures, CRIs, eurobonds and hedge fund shares


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

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

Revenue Mix

2.6

2.8

2.9

Jun-10 Jun-11 Jun -12

CorporateCredit63.5%

Hedging Desk27.7%

Treasury3.3%

PINE Investimentos

5.5%

1H11

CorporateCredit58.4%

Hedging Desk19.8%

Treasury11.5%

PINE Investimentos

10.3%

1H12

40%56% 62%

60%44% 38%

Jun-10 Jun-11 Jun-12

More than 1 product 1 product


Loan Portfolio1

The portfolio continued to grow, +2.4% QoQ and +18.6% YoY…

¹ Includes debentures, CRIs, eurobonds and hedge fund shares

2,792 3,251 3,358 3,132 3,126 3,300 3,286 3,370 3,332

71 122 251 297 342 572

472

644 846 881 912

881 883 883 821

842

827 1,022 1,117

1,372 1,534 1,687 1,684 1,599

722

569

547 622

782

765 782

1,021 1,154

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

Trade finance

Guarantes

Onlending BNDES

Private Securities

Working Capital

4,8285,292

5,773 5,823

6,3146,732 6,935

7,300 7,478

R$ millions


Loan Portfolio Profile

Loan Portfolio by Industry Segments Geographic Distribution

... in a diversified manner...

Southeast73%

South8%

Northeast7%

Midwest11 %

North1 %

Sugar and Ethanol; 19%

Construction10%

Electric and Renewable Energy;

9%

Agriculture; 9%

Infrastructure; 7%Foreign Trade; 5%

Transportation and Logistics; 5%

Specialized Services; 4%

Vehicles and Parts; 4%

Beverages and Tobacco; 4%

Metal and Mining; 3%

Food Industry; 3%

Chemicals; 3%

Financial Institutions; 2%

Meatpacking; 2%

Telecom2%

Others; 9%


Loan Portfolio Quality

Loan Portfolio Quality

Credit Coverage

Non Performing Loans > 90 days

Collaterals

... with quality, collaterals, and adequate credit coverage.

Products Pledge

46%

Receivables26%

Properties Pledge

23%

Investments3%

Guarantees2%

2.7%3.6% 4.0%

Jun -11 Mar-12 Jun-12

+40 bps

+130 bps

0.5% 0.5%

0.7% 0.7%

0.6%

0.2%

0.3% 0.3%

0.2%

0.3%

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

Contracts Overdue

Installments Overdue

AA-A48.1%

B36.9%

C10.9%

D-E1.8%

F-H2.3%

June 30th, 2012


Commodities16%

Fixed Income24% Currency

60%

Hedging Desk

Client Notional Derivatives Portfolio by Market

Market Segments

Notional Value and MtM

Portfolio Profile

PINE is the 1st player in terms of OTC commodities NDF for clients¹.

Scenario on June, 30th

Duration: 249 days

Mark-To-Market : R$256 million

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

Stressed MTM: R$597 million

June 30th, 2012

1Source: Cetip Report, June 2012

Fixed Income: Fixed, Floating, Inflation, Libor

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

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

3,457 3,709 3,712 4,287 4,720

84 178 157 126

256

224 358 354 354

597


Notional Value MtM Stressed MtM

R$ millions


PINE InvestimentosCreating new values to clients and optimizing PINE´s use of capital.

Volume of Underwriting Transactions Revenues

Selected Transactions

R$ Millions R$ Millions

R$540,000,000

March, 2012

M&A

Exclusive Advisor

R$115,000,000

May, 2012

Project Finance

Exclusive Advisor

R$25,000,000

May, 2012

Certificate of Real EstateReceivables

Coordinator

R$100,000,000

May, 2012

Promissory Notes (ICVM 476)

R$67,000,000

June, 2012

Promissory Notes (ICVM 476)

Coordinator Coordinator

381

317 346

2Q11 1Q12 2Q12

12

16 18

2Q11 1Q12 2Q12


FundingDiverse sources of funding…

R$ millions

1,646 1,654 1,592 1,720 1,845 1,965 2,130 2,128 2,153

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

1,287 1,253 1,196 1,186 1,228 175 198 214

218 212 228 250 281 223

201 224 320

272 210 165 106 161 194

36 46 42

41 53 66 112 31 33

453

626 829

867 898 867 867 868 813

-

-21

33 247 256 281 291 553

203

194 194

185

205 237 246 233 295

227

200 160

282

267 310 353 276

234

151

166 158

155

84 86 250 125

118

405

413 377 435

596 814

753 841

1,089

Jun-10 Sept-10 xDec-10 Mar-11 Jun-11 Sept-11 xDec-11 Mar-12 Jun-12

Trade Finance

Private Placements

Multilateral Lines

International Capital Markets

Local Capital Markets

BNDES

Demand Deposits

Interbank Time Deposits

High Net Worth Individual Time Deposits

Corporate Time Deposits

Institutional Time Deposits

5,4375,182

4,622

5,322

5,9026,248

6,544 6,241

6,933


61% 59% 55%

39% 41% 45%

Jun-11 Mar-12 Jun-12

Others

TotalDeposits

6,4215,902 6,933

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

ALM Deposits vs. Total Funding

Matching of Transactions

CREDIT FUNDING

BNDES BNDES

Trade Finance Trade Finance

DepositsWorking Capital, Private

Securities1 And Cash Financial Bills

Offshore Funding1 Includes debentures, CRIs, eurobonds, and hedge fund shares

R$ Millions

82% 80%76%

81%76%


Loan / Total Funding

R$ Millions

-

3,124

1,921 1,642

402 94 33

1,590

2,344

1,775

1,056

135

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

Credit Funding


Capital Adequacy Ratio (BIS)BIS ratio reached 15.9%.

R$ million BIS Ratio (%)

Tier I 1,055 12.6%

Tier II 277 3.3%

Total 1,331 15.9%

14.6% 14.8% 13.8% 13.4% 13.2% 15.1% 14.3% 13.3% 12.6% 14.5%

3.9% 3.6%3.6% 3.7% 3.4%

4.5%4.2%

3.1% 3.3% 3.0%

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

Tier II Tier I

18.5% 18.4%17.4% 17.1%

18.5%

Minimum Capital Requirement (11%)

19.6%

16.4% 15.9% 17.5%16.6%

With Capital

Increase


Guidance for 2012PINE is ready to continue growing with its clients, and reaffirms its guidance for 2012.

Guidance

Expanded Corporate Credit Portfolio 17% - 22%

Personnel and Administrative Expenses 8% - 12%

NIM 5.5% - 7.5%

ROAE 17% - 20%


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

Investor Relations

Noberto N. Pinheiro Júnior

CEO

Susana Waldeck Norberto Zaiet Junior

CFO / IRO COO

Raquel Varela

Head of Investor Relations

Alejandra Hidalgo

Investor Relations Manager

Fone: +55-11-3372-5343

www.pine.com.br/ir

[email protected]

2q12 earnings conference call

Economy & Finance

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