earnings 2q15 conference call

2Q15 Earnings Release Conference Call

August 13th, 2015

Agenda

2Q15 Events and Highlights 3

2Q15 Financial Highlights 4

Net Interest Margin 5

Expenses and Efficiency Ratio 6

Loan Portfolio 7Loan Portfolio 7

Continuous Loan Portfolio Management 8

Main Sectors – Energy | Real Estate | Sugar and Ethanol 9

(cont) Main Sectors – Agriculture | Engineering 10

Loan Portfolio Quality 11

FICC 12

Pine Investimentos 13

Funding 14

Asset & Liability Management 15

Capital Adequacy Ratio (BIS), Basel III 16

Guidance 2015 - Review 17

2/18Investor Relations | 2Q15 |A parte de imagem com identificação de relação rId28 não foi encontrada no arquivo.

2Q15 Events and Highlights

1. Sound positive liquidity gap in the past years, with 385 days for loan portfolio versus 501 days for funding.

2. Liquid balance sheet, with a cash position of R$1.2 billion, equivalent to 47% of time deposits.

3. Active and constant liability management generates benefits both in cost and terms of funding.

4. Loan portfolio coverage ratio above 4% as a result of a preemptive increase in provisions in the last twelve months.

5. Further reduction of personnel and administrative expenses, as a result of the diligence and anticipation of an adverse market inp p , g p

2015.

6. 16tth largest bank in derivative transactions and the 4th largest in commodity derivatives according to CETIP – OTC Clearing House.


2Q15 Financial HighlightsThe main performance indicators were within expectations in the period.

Shareholders' Equity

-2.9%

Total Loan Portfolio1

-10.7%

Total Funding

-9.6%

R$ million

1,244 1,208 9,657 8,621 8,367 7,564 , ,

M 15 J 15M 15 J 15M 15 J 15 Mar-15 Jun-15Mar-15 Jun-15Mar-15 Jun-15

ROAENIM Evolution

-70 bps

Net Income

p

3.3% 3.3%4.0%

3.3%10 10


1 Includes Stand by LCs, Bank Guarantees, Credit Securities to be Received and Securities (bonds, CRIs, eurobonds and fund shares)

1Q15 2Q151Q15 2Q151Q15 2Q15

Net Interest Margin

NIM Evolution Main Impacts

Lower transactions in FICC business;-70 bps

No revenue generation in Treasury;

Smaller proportion of the loan portfolio over total assets;

Prudential adjustments (Resolution 4277); and

Marginal increase in spreads.

4.0%3.3%

NIM Breakdown

1Q15 2Q15

R$ million

2Q15 1Q15 2Q14 1H15 1H14

Financ ial MarginFinanc ial Margin

Income from financial intermediation 80 54 96 134 205

Overhedge effect (10) 34 (3) 24 (6)

Income from financial intermediation ex overhedge 70 88 93 158 199


Expenses and Efficiency RatioRigorous cost control.

37.1% 39.1%44.9%

4 0 . 0 %

6 0 . 0 %

4 0

4 5

5 0

38.7% 41.8%4 0 . 0 %

6 0 . 0 %

1 2 0

1 4 0

Expenses

22 23 2220

18- 2 0 . 0 %

0 . 0 %

2 0 . 0 %

2 5

3 0

3 5

- 2 0 . 0 %

0 . 0 %

2 0 . 0 %

6 0

8 0

1 0 0 Personnel Expenses

Other administrative

18 17

- 8 0 . 0 %

- 6 0 . 0 %

- 4 0 . 0 %

5

1 0

1 5

2 0

46 4446

35

- 8 0 . 0 %

- 6 0 . 0 %

- 4 0 . 0 %

2 0

4 0

expenses

Recurring Efficiency Ratio (%)

- 1 0 0 . 0 %0

2Q14 1Q15 2Q15

- 1 0 0 . 0 %0

1H14 1H15

Efficiency Ratio

R$ million

2Q15 1Q15 2Q14 1H15 1H14

Operating expenses1 48 45 45 93 97

(-) Non-recurring expenses (4) (1) (1) (5) (5)

R i O i E (A) 44 43 43 87 92 Recurring Operating Expenses (A) 44 43 43 87 92

Recurring Revenues2 (B) 98 110 116 208 238

Recurring Effic iency Ratio (A/B) 44.9% 39.1% 37.1% 41.8% 38.7%1 Other administrative expenses + tax expenses + personnel expenses2 Gross Income from financial intermediation - provision for loan losses + fee income + overhedge effect - hedge impact - prudential adjustment according to Resolution 4277


Resolution 4277.

Loan PortfolioThe portfolio amounted to R$8.6 billion...

R$ million

-14.1%

903 989 1,116 924 826

9,6579,5379,930

10,090 10,0329,800 9,826

-10.7%

3 073

2,909 2,905 2,941 2,896 2,969

3,191

1,059

965 903 1,116 924 826

909

585

Trade finance: 6.8%8,6218,994

1

844 990

1,068 1,103 1,071 1,248 1,302

1,118 1 074

2,807

3,073

2,896 Bank Guarantees: 33.6%

4 284 4,509 5,050 5,093 4,904 4,731 4,730 4,440

1,074

BNDES Onlending : 12.5%

4,284 4,509 4,440 4,066

J 13 S 13 D 13 M 14 J 14 S 14 D 14 M 15 J 15

Working Capital: 47.2%2


Jun-13 Sept-13 Dec-13 Mar-14 Jun-14 Sept-14 Dec-14 Mar-15 Jun-15

1 Includes Stand by LC2 Includes debentures, CRIs, Hedge Fund Shares, Eurobonds, Credit Portfolio acquired from financial institutions with recourse and Individuals

Continuous Loan Portfolio Management...with improved sector diversification.

12.4%12%12%11%8% EnergyEnergy12%

Construction Material

2% Food IndustryOther7%

Sectors Rebalance

9 7%10%10%7%8%

12.2%13%12%14%20%

12.3%12%13%12%9%

12.4%12%%

Real Estate

Sugar and Ethanol

12%

Real Estate12%Vehicles and Parts

3%

Retail3%

Meatpacking2%

y1%

6.7%7%5%5%5%

8.5%8%8%7%8%

9.7%10%10%7%8%Agriculture

Engineering

Transportation Sugar and Ethanol

12%Telecom4%

Specialized Services

4%

Metallurgy3%

38.2%38%40%44%42%

Jun‐15Mar‐15Jun‐14Jun‐13Mar‐12

and Logistics

OthersAgriculture

10%Engineering

9%

Transportation and Logistics

7%

Chemicals5%

Foreign Trade4%

4%

The composition of the portfolio of the 20 largest clients changed by over 20% in the past twelve months;

The share of wallet of the 20 largest clients remained below 30%, in line with market peers.


Main SectorsEnergy| Real Estate | Agriculture

Mall

Energy (12.4%) Real Estate (12.3%)

Exposure by Product Exposure by Segment Exposure by Product Exposure by Segment

BNDES UTE

Warehouse15%

7%Commercial

6%Guarantees

23%Working Capital

17%

BNDES Onlending

9%

UTE14%

Distributors10%

Transmitting9%

Equipment S li

Residential37%

Residential Lots35%

Working Capital

77%Guarantees74%

Wind Energy57%

Supplier6%

SHPs UHEs3%

Sugar and Ethanol (12.2%)

Exposure by Product Exposure by State

BNDES Onlending

11%Trade

Finance9%

PR

GO2%

Exposure by Product Exposure by State

Working

Guarantees26% SP

73%

MG19%

7%


gCapital

55%

Main SectorsAgriculture| Engineering

BNDES Trade

Agriculture (9.7%) Engineering (8.5%)

Exposure by Product Exposure by Product

Guarantees12%

BNDES Onlending

4%

BNDES Onlending

17%

Trade Finance

12%

Guarantees1%

Working Capital

Working Capital

71%

p84%

Exposure by SegmentExposure by State

MT31%

Others8%

Concession35% Transportation

32%

SP37%

PR

BA11%

MS3%

Oil and Gas

Energy1%


PR10%

Industrial24%

Oil and Gas9%

Loan Portfolio Quality93.4% of loan portfolio classified between AA-C ratings.

B38.3%

June 30th, 2015

Loan Portfolio Quality – Res. 2,682 Non Performing Loans > 90 days (Total Contract)

1.1% 0.7%0.1%

0.7% 0.3% 0.3%1.1%

2.1% 1.8%

C17.0%

Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15AA-A38.1%

D-E4.0%

F-H2.6% Contracts Overdue: total amount of the contracts overdue for more than 90 days / Loan Portfolio

12 0%10 0% 162% 161% 172%250%

450%

650%

2.6%

Products

Contracts Overdue: total amount of the contracts overdue for more than 90 days / Loan Portfolioexcluding Bank Guarantees and Stand-by Letters of Credit.

Credit Coverage Collaterals

5.0%

6.4% 6.6%

4.1% 4.1%6.0%

8.0%

10.0%

12.0%

4 0%5.0%6.0%7.0%8.0%9.0%10.0% 162% 161% 172%

50%

250% Products Pledge39%Investments

3%

2.9%4.1% 4.1%

0.0%

2.0%

4.0%

0.0%1.0%2.0%3.0%4.0%

Dec-14 Mar-15 Jun-15 Receivables20%

Properties Pledge39%1


D-H Portfolio Coverage of Total Portfolio Coverage of D-H Overdue Portfolio20%39%

1D-H Portfolio: D-H Portfolio / Loan Portfolio Res. 2,6822Coverage of Total Portfolio: Provisions / Loan Portfolio Res. 2,682 3Coverage D-H Overdue Portfolio: Provisions / D-H Overdue Portfolio

1 2 3

FICCProven trackrecord: 4th biggest bank in commodity derivatives1.

Notional Amount

MtM

June 30th, 2015 R$ million

Client Notional Derivatives by Market Notional Value and MtM

Fi d I

Currencies83% 354

288 221

349 366

(47)(103)

33

Stressed MtM

Commodities10%

Fixed Income7%

14,382 8,376 7,703 7,482 7,948

(532)

(365)

(103)

10%Jun-14 Sept-14 Dec-14 Mar-15 Jun-15

Scenario on June 30th 2015:

Market Segments Portfolio Profile

Scenario on June 30th,2015:

Duration: 153 days

Mark-to-Market: R$366 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$33 million

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


1Source: Cetip Report, June 2015

Pine Investimentos

R$30,000,000R$24,000,000R$20,000,000

Selected Transactions

Capital Markets: Structuring and Distribution of Fixed

Income TransactionsProject Finance

Lead Coordinator

Structuring CRP

Lead Coordinator

CRI

Lead Coordinator

Income Transactions.

Financial Advisory: Project & Structured Finance, M&A,

and hybrid capital transactions.

Debentures

R$50,000,000R$45,200,000

DebenturesBNDES Onlending

R$630,000,000

February, 2015March, 2015

Lead CoordinatorLead Coordinator

June, 2015

Lead Coordinatory p

Research: Macro and Commodities.

S t b 2014

Lead Coordinator

November 2014

Lead Coordinator

D b 2014

CoordinatorR$ millionFee Generation

Export Prepayment FinanceLong Term Loan

US$58,000,000US$25,000,000

September, 2014November, 2014December, 2014

Project Finance

R$391,459,000

3 2

6 6

August, 2014

Structuring Agent

August, 2014

Financial Advisor

July, 2014

Financial Advisor


1Q15 2Q15 1H14 1H15

FundingDiversified sources of funding...

R$ million

58% 48% 48%44% 41%39% 41% 35% 47% Cash over Deposits

8 797 8 638Trade Finance: 8%

-11.6%

8.0%

459 434 323

113 364

346 388

687 429

500

478

473 531 430

773 973

871 834

1,064 819 839

929

605

8,367

7,5647,111

7,8948,383

8,7978,559 8,638 8,500

Private Placements: 9.7%

Multilateral Lines: 10.8%

International Capital Markets:

1 141 1,174 1,086 286

649 632

582 594 709 635

509

689

762 792

833 508 892

747

796 787

435

437

459 427

323 347

338 272

80

69 346

837 819

181

429 735 997 International Capital Markets: 3.6%

Financial Letter : 10.4%

Local Capital Markets: 6.3%

Onlending: 14 4%

1,013 1,048

1,112 1,022 761 731

254 372 475 659

908 920

1,122

110 93 90

76 80 98

69

157 197

19 20 23

27 41 30

27 24 18

862 1,099 1,141 ,

1,292 1,333

1,161 1,091

509 476

Onlending: 14.4%

Demand Deposits: 0.2%

Interbank Time Deposits: 2.6%

Hi h N W h I di id l Ti

2,185 1,944 2,175 2,314 2,271 1,905 1,720

1,209 951

731 545

361 291

1,273 1,322

High Net Worth Individual Time Deposits: 17.5%

Corporate Time Deposits: 3.8%

Institutional Time Deposits: 12.6%



Asset & Liability Management... keeping a positive gap between credit and funding.

7 9x 7 7 7 8x 7 8

9 . 0

1 0 . 0

Expanded loan Porfolio

Loan Portfolio excluding Bank Guarantees 83%

80% 80%77% 76%

Leverage Credit over Funding Ratio

7.9x 7.7x 7.8x 7.8x7.1x

5.6x 5.4x 5.4x 5.2x4.7x

4 . 0

5 . 0

6 . 0

7 . 0

8 . 0

77% 76%

‐

1 . 0

2 . 0

3 . 0

Jun-14 Sept-14 Dec-14 Mar-15 Jun-15 Jun-14 Sept-14 Dec-14 Mar-15 Jun-15Jun 14 Sept 14 Dec 14 Mar 15 Jun 15

Total Deposits Others

Leverage: Expanded Loan Portfolio / Shareholders’ EquityExpanded Loan Portfolio excluding Bank Guarantees and Stand-by Letters of Credit /

Shareholders’ Equity

Credit over Funding ratio: Loan Portfolio excluding Bank Guarantees and Stand-by Letters ofCredit / Total Funding

ALM – Average Maturity Total Deposits over Total FundingR$ milliondays

53% 57% 59%

Total Deposits Others

8,638 8,367 7,5648,559 8,500

GAP: +116 days

488 472 498 514 501

47% 43% 41%

57% 59% 64% 63%y

410 398

371 362 385

Funding


47% 43% 41% 36% 37%

Jun-14 Sept-14 Dec-14 Mar-15 Jun-15

Jun-14 Sept-14 Dec-14 Mar-15 Jun-15

Credit

Capital Adequacy Ratio (BIS), Basel III BIS ratio reached 13.1%

Tier II Tier I

2.3%2.2%

13 0% 13 1%

17.0%15.9%

14.1% 13.7% 13.7% 13.8% 13.9%

Minimum Regulatory Capital (11%)

14 7% 13 7%

2.1% 1.5% 1.5% 1.4% 1.4% 0.8% 0.8%13.0% 13.1%

14.7% 13.7%12.0% 12.2% 12.2% 12.4% 12.4% 12.2% 12.3%


R$ Milion BIS Ratio (%)

Tier I 1,174 12.3%

Tier II 75 0.8%

Total 1,248 13.1%


Guidance 2015 - ReviewMarket1 GDP(E) 2015: -1.8%

Published Amended

Expanded Loan Portfolio -5% to +5% -15% to -5%

NIM 4% to 5% 3.5% to 4.5%

Personal and Administrative Expenses -10% to -5% -15% to -10%

ROAE 7% to 10% 5% to 8%


1Source: Report Focus, July 7, 2015

Investor Relations

Noberto N. Pinheiro Junior

CEO/IRO

João BritoCFO

Raquel Varela BastosHead of Investor Relations, Marketing & PressHead of Investor Relations, Marketing & Press

Luiz MaximoInvestor Relations Specialist

Ana LopesInvestor Relations AnalystInvestor Relations Analyst

Gabriel NettoInvestor Relations Analyst

Phone: (55 11) 3372-5343

[email protected]


This report may contain forward-looking statements concerning the business prospects, projections of operating and financial results and growth outlook of PINE. These are merely projections and as suchare based solely on management’s expectations regarding the future of the business. These statements depend substantially on market conditions, the performance of the sector and the Brazilian economy(political and economic changes, volatility in interest and exchange rates, technological changes, inflation, financial disintermediation, competitive pressures on products and prices and changes in taxlegislation) and therefore are subject to change without prior notice.

earnings 2q15 conference call

Investor Relations

2q15 financial highlights

investor relations 2q15

2q14 1q15 2q15

loan portfolio quality

agenda 2q15 events

loan portfolio coverage

nim breakdown 1q15 2q15

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