Earnings Presentation 1 st Quarter, 2013
Disclaimer Disclaimer “Certain statements made in this presentation may not be based on historical information or facts. This presentation therefore contains, or may be deemed to contain, “forward looking statements” (within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended), including those relating to the general business plans and strategy, future financial condition and results and growth prospects of Banco Votorantim S.A. (“Banco Votorantim” or the “Company”), and future developments in its industry and its competitive and regulatory environment. By their nature, forward ‐ looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future and are based on assumptions, data or methods which, although considered reasonable by the company at the time, may turn out to be incorrect or imprecise, or may not be possible to realize. Accordingly, actual results may differ materially from these forward ‐ looking statements due to a number of factors, including future changes or developments in the Company‟s business, its competitive environment, technology developments and political, economic, legal and social conditions in Brazil. Forward looking information is not merely based on historical fact but also reflects management‟s objectives and expectations. The Company can give no assurance that expectations disclosed in this presentation will be confirmed. The words “estimate”, “believe”, "anticipate", “wish", "expect", “foresee", “intend", "plan“, "predict", “forecast", “aim" and similar words, written and/or spoken, are intended to identify affirmations which, necessarily, involve known and unknown risks. Known risks include uncertainties which include, but are not limited to, interest rates, product competition, market acceptance of products, the actions of competitors, regulatory approval, currency type and fluctuations, monetary policy, among others. This presentation is based on events up to March 31 st , 2013. The Company or any of its affiliates take no responsibility or liability to update the contents of this presentation in the light of new information and/or future events. Banco Votorantim and/or any of its affiliates do not accept and take no responsibility, whatsoever, direct or indirect, for transactions or investment decisions made on the basis of information contained in this presentation. Banco Votorantim may alter, modify or otherwise change in any manner the contents of this presentation, without the obligation to notify any person of such revision or changes. This presentation does not constitute an offer, or invitation, or solicitation of an offer, to subscribe for or purchase any securities. Neither this presentation nor anything contained herein shall form the basis of any contract or commitment whatsoever. Recipients of this presentation are not to construe the contents of this summary as legal, tax or investment advice and recipients should consult their own advisors in this regard. The market and competitive position data, including market forecasts, used throughout this presentation were obtained from internal surveys, market research, publicly available information and industry publications. Although the Company has no reason to believe that any of this information or these reports are inaccurate in any material respect, the Company has not independently verified the competitive position, market share, market size, market growth or other data provided by third parties or by industry or other publications and therefore does not make any representation as to the accuracy of such information. This presentation and its contents are proprietary information and may not be reproduced or otherwise disseminated in whole or in part without the Company‟s prior written consent. ” 1
Executive summary – Message from the CEO The successful implementation of the Change Agenda indicates a 2013 with substantially better results The 1Q13 results once again confirmed concrete advances in the Change Agenda • Maintenance of excellent quality in Consumer Finance production. BV Financeira has been originating high quality auto finance for over 15 months and, in 1Q13, strengthened its position as the market leader in used vehicles • Consistent drop in delinquency¹. Consolidated NPL 90¹ decreased to 6.2% in Mar/13, vs. 6.6% in Dec/12 • New reduction in credit provision expenses. Consolidated credit provision expenses reduced 6.5% (or R$ 62M) vs. 4Q12 – fourth consecutive quarterly reduction • Reduced cost base. Non-interest expenses dropped 14.4% (or R$ 144M) vs. 4T12, reflecting the effectiveness of the initiatives for cost reduction and operating efficiency gains These important achievements in our Change Agenda were once again accompanied by the solid performance of both business divisions – Consumer Finance and Wholesale The combination of consistent revenue generation by the business areas and the new reduction in credit provision expenses led to Net Financial Margin of R$ 234M in 1Q13, 14.0% growth over 4Q12 The 1Q13 results were still impacted by: • Still high credit provisions expenses due to delinquency of auto finance portfolios originated between July/10 and Sept/11 • Expenses with the early settlement of credits assigned with recourse until Dec/11 (before Res. 3,533) • Expenses with provisions for contingencies, mainly related to the restructuring process Nevertheless, results maintained their trajectory of gradual improvement (1Q13: R$-278M, 4Q12: R$-358M) In 2013 we will conclude the adjustment process in order to resume profitable growth in a sustainable way • In the short-term, results will still be impacted by the same factors that affected 1Q13 The success already shown in the implementation of the Change Agenda indicates that 2013 will be a year of substantially better results, mainly in the second semester 1. Operations past due over 90 days 2
Banco Votorantim overview Results and recent Change Agenda advances Appendix – financial highlights 3
Banco Votorantim – Overview Banco Votorantim is one of the leading players in Brazil... Banco Votorantim is one of the largest ...and is well-positioned to consolidate itself privately-held Brazilian banks in total assets... as one of the largest banks in Brazil Largest Financial Institutions in Dec/12 - Assets (R$B)¹ Diversified business portfolio Shareholder • Wholesale Banking Banco do Brasil 1,087 50% total – “Top 5” in credit for large enterprises Itaú Unibanco 951 Bradesco 755 • Consumer Finance CEF 703 – Among the leaders in auto finance Santander 458 HSBC 127 – 7 th largest player in payroll loans³ Votorantim 121 State-owned – ~ 4.9 million customers Safra 112 Foreign • Wealth Management BTG Pactual 88 National privately-held 61 Citibank – 9 th largest asset manager by Anbima‟s managers‟ ranking: R$41.1B in AuM ...and also in terms of loan portfolio... Strategic partnership with Banco do Brasil, the largest Largest Financial Institutions in Dec/12 – Loan Portfolio (R$B)¹ financial institution in Latin America + Banco do Brasil 491 CEF 354 Strong and committed shareholder base Itaú Unibanco 312 • Banco do Brasil and Votorantim Group Bradesco 260 Santander 185 Votorantim² 57 Low fixed-cost business model 47 HSBC State-owned • Extensive third-party distribution network in Consumer 42 Safra Foreign 23 Banrisul Finance (vs. branches) National privately-held 22 Volkswagen 1. Excluding BNDES (state- owned development bank); 2. Considers BV‟s on balance loan portfolio (excluding off balance securitiza tion); 3. Considers credit assignments with recourse Source: Banco Votorantim; Bacen; Anbima 4
Banco Votorantim – Corporate strategy ...and has a diversified business portfolio, internally divided into Wholesale and Consumer Finance Off balance assets R$7.7B Assigned to FI¹ R$1.7B Assigned to FIDC R$76.9B Wholesale Cons. Finance R$39.3B R$37.7B Corporate & Middle Wealth Auto Other IB (CIB) Market Management Finance Businesses Market leader in used Increase profitability Position itself as a Grow with quality and 9 th largest Asset in auto finance in payroll loans, relevant partner by profitability among the market, with Ensure quality and building agile and acting selectively with mid-sized companies innovative products profitability of new long-term (R$50M-R$600M focus on lucrative Pillars Private focused on vintages relationships, as well annual revenues) agreements estate planning via as offering integrated Focus on used Increase efficiency and customized solutions Continue to grow in financial solutions (IB, vehicles (multi-brand scale gains and an open credit cards derivatives, structured dealers) for own Focus on relationship architecture concept products and portfolio Expand insurance and operational agility Continuous growth of distribution), always Partnership with BB in brokerage revenues Strengthen product synergies with BB suitable for each new auto financing (e.g. Auto and Credit) offering client‟s needs (new car dealers) + Banco do Brasil Votorantim Group Shareholders X Expanded² credit portfolio 1. Financial Institutions; 2. Includes guarantees provided and private securities, besides on balance loan portfolio according to Bacen‟s Res. 2,682 5
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