presentation title - bocombbm.com · miguel flaksman managing director treasury control and...

Institutional Presentation3Q.2018

SUMMARY

Who We Are

History

Our Business

Ownership Structure

Organizational Flowchart

Financial Highlights and Ratings

Corporate Credit

Funding

Wealth Management

HR | Competitive Advantages

Bank of Communications | Financial Highlights| Global Presence

Who We Are

Banco BOCOM BBM S.A. is a Brazilian financial

institution controlled by Bank of Communications, which

owns 80% of its equity, as a joint venture with

Brazilians who own the rest.

Bank of Communications was founded in 1908 in the

city of Shanghai with the aim of boosting Chinese

industry. It opened its first branch in Hong Kong in

1934. Banco BOCOM BBM S.A.’s origins date from 1858

in the city of Salvador in Bahia State, Brazil.

Coherently with these two origins, today we are

dedicated to meeting the credit and financial service

requirements of companies established in Brazil, and to

providing wealth management services for individuals,

including the management of liquid assets and

protection against financial risks.

We look to the future with determination to participate

in the growing economic and cultural integration

between Brazil and China, always based on the two

institutions’ and countries’ core values.

HIGHLY QUALIFIED STAFF

TRADITION AND SOLIDITY TRANSPARENCY IN TRANSACTIONS

EXCELLENCE IN RISK CONTROL

AGILITY IN DECISION MAKING FLEXIBILITY TO MEET CLIENTS’ NEEDS

Origin in a joint venture between one of the largest and oldest banks in China and Brazil’s oldest private financial group.

Transparency in selecting the best products and services available on the market, with high governance standards: this is what distinguishes the advisory services we offer to our clients in accordance with each profile.

We have a long tradition of excellence in risk management. In

the past 20 years we have investedin continuous development of proprietary risk management methodologies, always at the cutting edge of the industry.

Banco BOCOM BBM is a hub for identifying and training talented people. We place a high value on the systematic pursuit of advanced knowledge and prioritize people who add value to the organization in the course of their professional development.

We have a sound and transparent governance framework. Our executives are deeply committed to the activities affected by their decisions in the short and long term, and have the expertise to minimize any conflicts of interest between business units, executives and shareholders.

With a team of trained and certified professionals, we seek personalized solutions to meet clients’ requirements, which go beyond financial portfolio management and include succession and family planning.

History

Our Business

Corporate Credit

Credit lines and guarantees to companies through the following platforms:

Corporate: economic groups with annual revenues from R$ 200 million up to R$ 3 billion;

Large Corporate: economic groups with annual revenues starting at R$ 3 billion;

China Corporate Desk: credits for Chinese companies based in Brazil.

Wealth Management

Financial advisory to high net-worth clients.

Financial Services

DCM structuring and distribution, pricing of derivatives andother products.

Ownership Structure

100%

80%

100%

The Southern Atlantic

Investments, Ltd.

BBM Bank Ltd.(Bahamas)

BOCOM BBM Corret. de Câmbio e Val. Mobil. S.A.

100%

BoCom Brazil Holding

Company Ltda

Brazilian Shareholders

100%

20%

- Participation of less than 0.001% were excluded from this organizational chart and the value was rounded to the controlling company.- Percentages considered excluding shares held in treasury.

Organizational Flowchart

Shaohui Yang* Pedro H. Mariani

Sun XuPo Ying

Sun Rongjun Board

Corporate Credit I

Local FIG & Distribution

Pedro H. MarianiCEO

Miguel Flaksman

Managing Director

Treasury Control andSettlement

Compliance & General Secretary

Corporate Credit II

International FIG & Distribution

Credit Control

Administrative and Internal Controls

Alexandre LowenkronCRO & COO

Large CorporateCredit

Client Desk and Market Making

Sergio Freitas

Managing Director

Integration Risk and Control

Sun XuCFO

Integration Accounting and Budget

BOCOM Client Desk

Corporate Treasury (ALM)

Accounting and Tax

Legal

Credit Analysis

Products

DCM / Structuring

Human Resources

IT

Risk and Performance Analytics

Macroeconomic Research & Corporate

Communications

Leonardo Oliveira

Managing Director

Cassio von Gal

Managing Director

Internal Audit

Corporate Credit III

Relationship Management – Ultra High Clients

Asset Allocation

Products and Services

Client Support

Relationship Management–Private/ High/Ultra High Clients

* Chairman of the board

Financial Highlights and Ratings

Shareholders' Equity

Net Income Accumulated

Total Expanded Credit Portfolio ¹

Total Funding

Return on Average Equity (p.a.)

Return on Average Assets (p.a.)

Expanded NIM (Before allowances for loan losses) ² ³ (p.a)

Basel Ratio (Core Tier I)

Liquid Assets

Efficiency Ratio (ER)

583

31

1,862

2,416

7.1%

1.1%

5.93%

19.4%

898

57.0%

571

19

3,421

4,022

4.4%

0.6%

5.75%

14.9%

1,259

59.4%

605

48

4,067

4,547

10.8%

1.2%

5.64%

15.3%

1,389

56.5%

4,106 5,003 5,554

Financial Highlights (BRL Million) Sep/16 Sep/17 Sep/18

Total Assets

583

38

1,726

2,352

8.7%

1.5%

5.95%

23.6%

1,029

52.5%

3,388

Sep/15

² Includes the result of equity pickup. ³ Including services fees and adjustment in open market operations.

¹ Includes sureties, guarantees, letters of credit and operations bearing credit risk (debentures and promissory notes).

Moody’s

Rating Brazil

Domestic

Fitch BB-

Ba1

BB+

Global

Local Currency Local CurrencyForeign

Currency

Aaa.Br

AAA(bra)

Ba3

BB

Ratings

Ba2

Corporate and Large Corporate;

Credit transactions such as working capital, trade finance, guarantees and corporate securities.

Credit Portfolio

Total Expanded Credit PortfolioR$ Million

4,067

1,726

Total Expanded Credit

3,421

1,862

359 5911,056 1,138

1,3161,266

2,2922,887

51 5

73

42

Sep/15 Sep/16 Sep/17 Sep/18

Others Corporate Large Corporate

Credit Portfolio

Total Expanded Credit PortfolioBreakdown by Transaction – Sep/18

Total Expanded Credit PortfolioBreakdown by Sector – Sep/18

Loans and Guarantees Portfolio*Risk Rates – Sep/18

Collaterals* – Sep/18Loans and Guarantees

* Expanded Credit operations, classified according to the Central Bank of Brazil’s 2.682/99 Resolution.** Less than 1% of the total.

* In Sep/18, the outstanding balance with some kind of collateral was 56.40%.The total value of the exposure to agribusiness (sugar and ethanol, food and agriculture) accounted for 30.28% of the loan portfolio.

11%

14%

44%

27%

4% Trade Finance

Export Credit Notes

Working Capital

Guarantees and Others

Corporate Securities

39%

36%

20%

4%

1%

AA

A

B

C

D**

(E-H)

79%

9%

12%Receivables

Inventories / Crops

Assignment of Real

Estate

17%

9%

11%

7%5%6%

5%

40%

Sugar and Ethanol

Agriculture

Utilities (energy)

Civil Construction

Specialized Services

Retailers

Foods

Others

Loans and Guarantees Portfolio

Quality Ratios

Allowances for loan losses Loans rated D and E-H

3.5% 3.5%

2.8%

1.2%


4.3%

3.4% 3.4%

1.0%

4.8%5.1%

4.1%

1.1%


Loans from (E to H) Loans from (D to H)

Total Credit Portfolio Collateralization – Sep/18

70%

30%

Collateralized Clean

Corporate

Risk Management: Collateralization

56.4%

43.6%


34%

66%

Large Corporate


Client Base

(Days)

(R$ Thousand)

(Units)

Large CorporateCorporate

Total Number of Clients

AverageTicket

AverageTerm

Sep/15 Sep/16 Sep/17 Sep/18 Sep/15 Sep/16 Sep/17 Sep/18

124110

156173

100

140

180

1622

32 32

10

30

50

10,61611,510

14,69416,686

10.000

14.000

18.000

22,41626,850

33,00735,566

20.000

30.000

40.000,

,

,

388

534631 668

300

500

700

431

304

504

603

300

500

700

,

,

,

R$ Thousand

Exposure by Group

133,236

1,052,853

1,586,559

2,538,139

3,439,249

4,066,547

3.3%

25.9%

39.0%

62.4%

84.2%

100%

Top debtor

Top 10 debtors

Top 20 debtors

Top 50 debtors

Top 100 debtors

Total Expanded Credit Portfolio

Funding Sources

Institutional Investors

Wealth Management

BoCom

Others

TOTAL

Funding by Type of InvestorR$ Million

Total Funding

4,547 Total Funding

4,022

2,416


54% 41% 42% 37%

27% 39% 36% 32%

- 6% 17% 17%

19% 14% 5% 14%

100% 100% 100% 100%

2,352

1,271 9841,664 1,665

644 933

1,478 1,482155

669 770

437

344

211 630


Institutional Investors Wealth Management

BoCom Others

Maturity Profile1

Loans and Guarantees Issued Portfolio vs. Funding2

Funding Sources

Funding and Asset Liability Management

1) Average term of issuance (days).

2) Not considering demand deposits (days).

11%

38%

20% 23%8%

11%

18% 13%

64%

37% 54% 64%

16% 14% 8%

1%

Credit Assignment with RecourseMultilateral AgenciesBanknotes, Agribusiness & Real Estate Credit BillsTrade Finance/LoansDeposits, Structured Operations Certificates and Others


392

491563

631

722

528

752695


Loans and Guarantees Issued PortfolioFunding

Financial advisory to high net worth individuals and families, Brazilian and Foreign¹;

R$ 7 billion under advisory, grounded on:

More than 160 years of experience in theBrazilian market with a high expertise in riskmanagement;

Products diversification (open platform);

Transparency.

¹ Resolution 4,373

Wealth Management

Assets under AdvisoryR$ Billion

3.03.3

4.6

7.0


OPEN PLATFORM

Access to the best products and services available on the market.

PERFORMANCE

Technology and expertise in evaluating and recommending investments through excellence in risk control and strict observance of the highest ethical standards.

Modern tools and vast experience in advisory for high net worth individuals and families, both Brazilian and foreign, pursuing their investment objectives through structured financial solutions based on an open-platform model.

Besides the portfolio management of liquid assets, BOCOM BBM Wealth Management also offers advisory services in other areas, including non-financial matters, through its partners.

Wealth Management

PERSONALIZED SERVICE

Creation of taylor made solutions that go beyond the traditional portfolio management.

TRANSPARENCY

Mitigation of conflicts of interest through transparency in selection of the best products and services available on the market, with high governance standards and personalized advisory according to the client’s profile.

Wealth Management

▪ Corporate treasury

▪ Products

▪ Macroeconomic research

▪ Equity research

▪ Credit structuring

▪ Account for Non Resident Investors (res. 4.373)

FAMILY OFFICE SERVICESPartnership in managing the family firm’s consolidated assets

BANKERClient’s main contact with BOCOM BBM

BOCOM BBM PLATFORMUse of BOCOM BBM’s structure

CLIENT SUPPORTOperational support to both the Banker and the Client

ASSET ALLOCATIONPortfolio management

▪ Transactions

▪ Account opening

▪ CRM monitoring

▪ Client service

▪ Understanding client’s profile and requirements

▪ Integration with BOCOM BBM’s products and services

▪ Risk analysis

▪ Suitability control

▪ Market watch

▪ Management of exclusive funds

▪ Portfolio allocation

▪ M&A and auditing

▪ Income tax

▪ Succession planning

▪ Real estate advisory in Brazil and abroad

▪ Pensions

Highly qualified professionals with competitive and performance driven compensation.


ATTRACT HIGH TALENTED PROFESSIONALS

▪ Close relationships with the best universities;

▪ Support for research and academic development;

▪ Scholarships for undergraduates with the best performance indicators, undergraduate and graduate monitors, and candidates for an MSc or PhD in economics.

MOTIVATE AND RETAIN TOP PERFORMERS

▪ Dynamic and intellectually challenging workplace climate;

▪ Unremitting pursuit of excellence, industry best practices, and innovations that make a difference in our business;

▪ Market-competitive and meritocracy-based compensation.

ALIGN INTERESTS

▪ Objectives of individuals and teams aligned with business strategy;

▪ Compensation model aligns interests of the executives with business results.


Data in reference to September, 2018.

Began a career at Financial Sector at BOCOM BBM Time in Financial Market (Years)

26,8%

63,9%

9,3%

Postgraduate (MSc and higher) Bachelor Degree High School

9%

32%

45%

67%

83%

Staff

Relationship Manager

Analyst/Coordinator

General Manager

Managing Director

4

5

7

12

18

Analyst/Coordinator

Relationship Manager

Staff

General Manager

Managing Director

Bank of Communications | Financial Highlights

¹ Hong Kong Securities Clearing Company Limited.² National Council for Social Security Fund.

* Foreign currency deposit.

BoCom’s Ownership(Top Shareholders)

Return on Average Assets

Shareholders' Equity ¹

Return on Average Equity²

Net Profit¹

Loan Portfolio

Bad Debt Ratio

Provision Coverage of Impaired Loans

Capital Adequacy Ratio (Core Tier 1)

1.04%

82,074

14.23%

2,326

572,165

1.42%

165.33%

10.97%

0.93%

92,677

12.87%

4,077

588,693

1.53%

150.31%

11.10%

0.83%

100,169

11.96%

2,425

686,881

1.49%

171.09%

10.87%

Total Assets 1,132,923 1,211,748 1,365,208

Financial Highlights (USD Million) Sep/15 Sep/16 Sep/18

¹ Attributable to shareholders of the bank

² Excluding the impact from preference shares.

Exchange rate on Sep/15: 6.3613 (State Administration of Foreign Exchange China);

Exchange rate on Sep/16: 6.6778 (State Administration of Foreign Exchange China);

Exchange rate on Sep/17: 6.6369 (State Administration of Foreign Exchange China);Exchange rate on Sep/18: 6.8792 (State Administration of Foreign Exchange China).

0.84%

99,971

11.97%

2,346

649,785

1.51%

151.06%

10.76%

1,346,380

Sep/17

27%

20%19%

4%

30%

M

H

S

O

inistry of Finance (State)

HKSCC Nominees Ltd (Foreign Legal Person)¹

SBC (Foreign Legal Person)

SF (State)²

thers

Moody’s

S&P

P-1

A-2

Long Term* Short Term*

A2

A-

Ratings

Fitch F1A

Bank of Communications | Global Presence

Bank of Communications is one of the People’s Republic of China's top five commercial banks. With more than 3,000 domestic branches, it operates in more than ten countries including the United States, Japan, Singapore, South Korea, Germany, Australia, Canada, Luxembourg and the United Kingdom.

China is Brazil’s largest trade partner, and the joint venture between BoCom and BBM heralds the advent of a new stage of growth in this relationship.

In the context of this growing cooperation between the two countries, Banco BOCOM BBM has enormous potential to boost business and capital growth, adding value for all stakeholders and driving economic development.

ADDRESSES

www.bocombbm.com.brOmbudsman | Phone.: 0800 724 8448 | Fax: 0800 724 8449

E-mail: [email protected]

Rio de Janeiro, RJ Praça Pio X, 98 – 5º, 6º, 7º and 12º andaresZip Code 20091-040 Tel.: +55 (21) 2514-8448 Fax: +55 (21) 2514-8293

São Paulo, SP Av. Brigadeiro Faria Lima, 3311 – 15º andarZip Code 04538-133 Tel.: +55 (11) 3704-0667 +55 (11) 4064-4867 Fax: +55 (11) 3704-0502

Salvador, BA Rua Miguel Calmon, 398 – 2º andar - parte Zip Code 40015-010 Tel.: +55 (71) 3326-4721 +55 (71) 3326-5583 Fax: +55 (71) 3254-2703

Nassau, Bahamas Shirley House | Shirley House Street, 50, 2nd floor P.O. N-7507 Tel.: (1) (242) 356-6584 Fax: (1) (242) 356-6015

This presentation was prepared by Banco BOCOM BBM. The information contained herein should not be interpreted as investmentadvice or recommendation. Although the information contained herein was prepared with utmost care and diligence, in order toreflect the data at the time in which they were collected, Banco BOCOM BBM cannot guarantee the accuracy thereof. Banco BOCOMBBM cannot be held responsible for any loss directly or indirectly derived from the use of this presentation or its contents. Thisreport cannot be reproduced, distributed or published by the recipient or used for any purpose whatsoever without the prior writtenconsent of Banco BOCOM BBM.

This presentation was developed using Conglomerado Prudencial’s values (4060).

presentation title - bocombbm.com · miguel flaksman managing director treasury control and...

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