Download Report

4Q14 / FY 2014
Earnings Release
São Paulo, March 12, 2015. Banco Industrial e Comercial S.A. (BICBANCO) (BM&FBOVESPA: BICB3 and BICB4), today announced its results for
the fourth quarter (4Q14) and for the fiscal year of 2014 (FY 2014). All operational and financial information contained in this Report, except
where otherwise indicated, is presented in Brazilian currency (Reais - R$), on a consolidated basis, and comprises the Bank's subsidiaries
and the Receivables Investment Funds (FIDCs). The financial statements herein posted comply with the rules set out by the Brazilian Central
Bank (BACEN), the Brazilian Corporate Law, the technical opinions of the Accounting Pronouncement Committee (CPC), and are ruled by the
Brazilian Securities and Exchange Commission (CVM).
Highlights
Extended Loan Portfolio
R$ 12.2 bi
Total Funding
R$ 11.7 bi
ISE 2015
Adjusted Net Result
R$ -219.2 mi
Acquisition of 72%
of BICBANCO’s capital
stock by China
Construction Bank - CCB
At the close of 4Q14, loan operations including guarantees and sureties came to R$ 12,247.1
million, down 0.8% from 3Q14, and down 3.8% year-over-year. Guarantees and sureties
totaled R$ 2,472.2 million at the close of 4Q14, representing increases of 4.6% quarter-overquarter and of 15.2% year-over-year. The share of large corporate clients in the overall loan
operations resulted in 50.8%.
Total funding amounted to R$ 11,733.2 million in 4Q14, down 5.7% quarter-over-quarter
and down 6.6% year-over-year. Domestic funding came to R$ 8,257.3 million, with particular
emphasis on time deposits, which totaled R$ 6,038.2 million. International funding amounted
to R$ 3,475.9 million, accounting for 29.6% of overall funding.
For the fifth year running, BICBANCO was selected to be part of BM&FBOVESPA’s Corporate
Sustainability Index (ISE), which will run until the end of 2015. BICBANCO is the only mediumsized bank that integrates this index, since its inception in 2005.
In the fourth quarter of 2014, the net financial loss rose to R$ 219.2 million and to R$ 719.2
million in FY 2014. This performance has been mainly impacted by the expenses of PLLs
totaling R$ 345.5 million in 4Q14 and R$ 1,274.7 million in FY 2014.
On August 29, CCB Brazil Financial Holding – Investimentos e Participações Ltda. (“CCB
Holding“) acquired the Bank’s shareholding control, as per the Share Purchase and Sale
Agreement executed on October 31, 2013, between China Construction Bank Corporation
(“CCB“) and the former controlling shareholders.
Throughout 2014, many different steps and relevant events were related to the operation.
Further details on the events following the completion of the purchase and sale process are
shown on page 03, whereas those concerning the preceding events are shown on page 15.
Milto Bardini
Investor Relations
Executive Vice President of Operations and IR Officer
Phone [55 11] 2173-9190
Maria Ines Martins Ramos
www.bicbanco.com.br/ir
IR Superintendent
investor.relations@bicbanco.com.br
Claudine Nahas
IR Analyst
4Q14 / FY 2014 Earnings Release
Main indicators
Balance sheet (R$ million)
4Q14
3Q14
4Q/3Q (%)
4Q13
Loan operations
9,774.9
Marketable securities and derivatives
4,282.9
4Q/4Q (%)
9,985.4
(2.1)
10,590.6
(7.7)
1,864.1
129.8
2,049.3
109.0
15,551.4
14,939.5
4.1
15,506.2
0.3
Time deposits
6,038.2
6,583.7
(8.3)
6,264.7
(3.6)
Total deposits
6,675.7
7,222.3
(7.6)
7,048.5
(5.3)
Shareholders’ equity
1,219.4
1,448.7
(15.8)
1,952.2
(37.5)
62.9%
66.8%
-3.9 p.p.
68.3%
-5.4 p.p.
Total assets
Loan operations / total assets
Results (R$ million)
4Q14
3Q14
4Q/3Q (%)
4Q13
4Q/4Q (%)
2014
2013
(191.5)
(452.5)
(57.7)
200.9
n.a.
(582.0)
659.8
n.a.
22.4
23.6
(5.2)
25.8
(13.3)
95.8
97.1
(1.3)
Personnel expenses
(58.5)
(56.3)
3.9
(49.8)
17.3
(225.3)
(206.0)
9.4
Administrative expenses
(48.8)
(52.5)
(7.1)
(51.5)
(5.3)
(197.5)
(184.7)
6.9
(219.2)
(353.0)
(37.9)
44.0
n.a.
(719.2)
146.6
n.a.
4Q14
3Q14
4Q/3Q (%)
4Q13 4Q/4Q (%)
2014
2013
2014/2013 (%)
Adjusted financial operations result
Income from services
Adjusted net result
Indicators (%)
2014/2013 (%)
13.6%
14.4%
-0.8 p.p.
19.1%
-5.5 p.p.
13.6%
19.1%
-5.5 p.p.
Adjusted net interest margin
4.6%
5.1%
-0.5 p.p.
8.0%
-3.4 p.p.
5.2%
6.3%
-1.1 p.p.
Shareholder Remuneration
(R$ million)
4Q14
3Q14
4Q/3Q (%)
4Q13 4Q/4Q (%)
2014
2013
2014/2013 (%)
-
-
n.a.
n.a.
-
52.0
n.a.
4Q14
3Q14
4Q/3Q (%)
4Q13 4Q/4Q (%)
2014
2013
2014/2013 (%)
(0.8894) (1.4320)
(37.9)
0.1787
(597.6)
(2.9177)
0.5954
(590.0)
Basel Index
Interest on equity
Stock Performance
Earnings per outstanding share (R$)
Book value per outstanding share (R$)
Market price - BICB4 (R$) (*)
Market cap (R$ million) (*)
-
4.9469
5.8768
(15.8)
7.9293
(37.6)
4.9469
7.9293
(37.6)
5.70
7.30
(21.9)
7.40
(23.0)
5.70
7.40
(23.0)
1,417.5
1,846.2
(23.2) 2,232.0
(36.5)
1,417.5
2,232.0
(36.5)
(*) last working day of the respective periods
n.a. - not applicable
The adjusted net result is the accounting net result, after deduction of the adjustments resulting from the mark-to-market valuation of
the derivative positions, in connection with the funding operations involving bonds issued abroad, net of taxes. The Bank adopts the
adjusted net result concept in its Earnings Release, for the purpose of providing a better understanding, a more adequate comparative
analysis, as well as a more accurate assessment of BICBANCO’s performance, with special emphasis on operational aspects. An
overview of the accounting result can be found on page 19. The conciliation between the adjusted and the accounting net result is
broken down as follows.
Reconciliation of net result (R$ million)
Net result (accounting)
Effect of the mark-to-market accounted in result with derivative financial instruments
Deferred tax over the mark-to-market
Net effect of the mark-to-market on the result
Adjusted net result
4Q14
3Q14
4Q13
2014
2013
(223.2)
(368.6)
38.5
(735.2)
61.3
6.6
26.0
9.7
26.6
142.8
(2.6)
(10.4)
(4.2)
(10.6)
(57.5)
4.0
15.6
5.5
16.0
85.3
(219.2)
(353.0)
44.0
(719.2)
146.6
Profile
BICBANCO is a foreign capital bank, which specializes in granting corporate credit to the Middle Market segment, which comprises the
group of companies with yearly revenues between R$ 50 million and R$ 500 million. It caters for a wide range of products and services to
its diversified client base spread throughout the country. With over 75 years’ experience in this activity, it stands out as one of Brazil's most
traditional banks, by supporting the sustainability and longevity of its businesses through initiatives related to good corporate governance
practices, corporate ethics and risk management. Since August 29, 2014, the Bank has integrated the China Construction Bank Group
(CCB). CCB is the second largest commercial bank in China, with nearly 60 years of operational track record, besides being the 5th largest
publicly-held bank in the world. CCB's shares are listed in the stock exchanges of Hong Kong and Shanghai.
p. 2|19
4Q14 / FY 2014 Earnings Release
Economic Environment
In 2014, the official inflation rate as measured by IPCA (Broad Consumer Price Index) stood at 6.41%, slightly below the 6.5%
target ceiling, set by the monetary authorities. However, it was half a point above inflation rate recorded in 2013, 5.91%. The
benchmark interest rate (SELIC) stood at 11.75% at the close of 2014. At a meeting held on January 21, 2015, BACEN’s Monetary
Policy Committee (COPOM) raised it to 12.25%.
After fluctuating considerably during the year, the exchange rate stood at R$2.66/US$ at the close of December 2014, up from
R$2.34/US$ at the close of December 2013. In the year ended December 2014, Brazilian exports totaled US$225.1 billion, down
7.0% year-over-year. In turn, imports fell by 4.4%, totaling US$229.0 billion. Since the drop in imports did not offset the fall in
exports, there was a trade deficit of US$3.9 billion, the largest since 1998. This deficit was mainly caused by the lower prices of
commodities accounting for much of Brazil’s exports due to the slow recovery of the world economy, which led to a lower demand
for these products. Another reason was the trade deficit in petroleum and petroleum products.
Lending in the financial system totaled R$3.0 trillion in December 2014, up 11.3% year-over-year according to BACEN’s latest data.
Lending accounted for 58.9% of the Brazilian GDP.
Volume of loan operations in the Financial
System (R$ billion)
Sep/14
Oct/14 (*)
Nov/14 (*)
Dec/14 (*)
Dec/Sep (%)
.Individuals
766.8
772.7
773.9
785.9
2.5%
.Corporations
767.5
765.9
778.3
792.9
3.3%
.Directed funds
1,367.7
1,386.1
1,409.2
1,443.0
5.5%
Total Credit
2,902.0
2,924.7
2,961.4
3,021.8
4.1%
57.4%
57.5%
58.0%
58.9%
Total Credit / GDP
(*) Preliminary data
Source: Bacen
Acquisition of 72% of BICBANCO’s capital stock by China Construction Bank - CCB
Following the completion of the sale of the shareholding control on August 29, 2014, further stages came to reflect the actual change
in the shareholding control:
. New classification of the Bank's capital stock within the Brazilian Financial System. On September 18, BACEN's Board of
Organization of the Financial System approved the transfer of shareholding control held by BICBANCO, including its subsidiaries to
CCB, headquartered in Beijing, China. Therefore, as of the date of approval, BICBANCO has turned into a foreign-capital bank, within
the scope of the Brazilian Financial System.
. Tender Offer - Acquisition of all shares issued by the Company. On September 29, 2014, CCB Holding submitted to CVM a
request for the registration of a tender offer for the acquisition of the totality of outstanding shares held by the minority shareholders
of the Company, in view of the process of going private.
In this application, it was requested the CVM’s authorization, aiming to integrate such tender offer, with a view for the: (i) cancellation
of registration of the Company as a issuer of securities; and (ii) the voluntary tender offer for leaving the Level 1 of Corporate
Governance Practices of BM&FBOVESPA ("Delisting Tender Offer", hereafter jointly referred to as "TENDER OFFER").
The brokerage house Morgan Stanley Corretora de Títulos e Valores Mobiliários S.A. was hired to perform as the intermediary institution
to carry out the Tender Offer.
All documentation concerning the request of registration of the Tender Offer filed with CVM, which contains the information required
to carry out the operation, is currently subject to examination.
A comprehensive information contained in the set of Material Facts related to the operation and the Tender Offer, as well as the
Valuation Report, have been disclosed on CVM's website: www.cvm.gov.br, as well on the Investor Relations section of BICBANCO's
website: www.bicbanco.com.br/ir.
p. 3|19
4Q14 / FY 2014 Earnings Release
. Process of price adjustment between the sellers and buyers of BICBANCO's shareholding control. On October 29, 2014,
CCB Holding delivered a notification letter to the former controlling shareholders of the Bank, to inform, in accordance to the terms
and conditions of the share purchase and sale agreement of 72% of BICBANCO's capital stock, that the closing price practiced on
the date of the transaction, should be subject to a price reduction of approximately R$ 287.766 million, corresponding to an adjusted
purchase price reduction of R$ 1.58 per share. On November 14, 2014, the Sellers contested that Price Adjustment, by means of
a notification to the Buyer. The two parties have still been discussing, aiming at a fair solution to the Price Adjustment. As at the
completion of this Report, both parties had not yet reached an agreement with the Price Adjustment, neither as to a determination
regarding the pending issues under discussion. Both CCB Holding and the Buyer shall inform the Bank, as soon as any material fact
concerning this Operation has been brought forth. BICBANCO, in turn, shall disclose to its shareholders and the investor community
on any material fact related to this tender offer, in accordance with the applicable legislation.
Adjustments in 2H14
Since September 2014, the Bank has been taking a series of measures to adapt its criteria and procedures to Headquarters’
paradigms. This process involves the entire operational area, but mainly credit rating, with tighter credit standards for individual
cases and industries, and a more conservative approach to the economic situation as a whole. As a result, there was a substantial
rise in Provisions and coverage.
The 4Q14 numbers were mainly affected by the conclusion of this process; however, they also reflect greater caution in response to a
few recent developments in the industry that may have a negative impact on credit risks and the economy as a whole.
The next step, the implementation of the Business Plan, will require utmost caution in view of Brazil’s economic environment. However,
by being as selective as the situation requires, the Bank will be able to seize all suitable opportunities and achieve sustainable growth.
p. 4|19
4Q14 / FY 2014 Earnings Release
Financial operations result
In 4Q14, financial operations result amounted to R$ 467,8 million, up 1.3% from 3Q14. The amount of financial operations income fell
by 5.3% in 4Q14 with comparison to the previous quarter. Considering the FY 2014, the financial operations result dropped by 8.6%
year-over-year.
Financial operation expenses came to R$ 313.8 million in 4Q14, up 7.0% from 3Q14.
PLL expenses stood at R$ 345.5 million in 4Q14, versus R$ 621.2 million in 3Q14, and R$ 58.6 million in 4Q13. The oscillations in the PLL
balances during the quarterly periods in question are directly related to a number of measures taken by the new controlling shareholder
as of September 2014, aimed at aligning both the Bank’s client classification policy and the applicable rating, with the Parent Company’s
practices. Further information on the policy for the record of PLL may be found on the page 4 of this Report.
The participation of clients from the large-corporate segment accounted for 50.8% in 4Q14, higher than the 46.2% share recorded in
3Q14 and the 40.1% in 4Q13.
In 4Q14 and 3Q14, the recovery of written-off loans totaled R$ 4.2 million, and R$ 3.8 million in 4Q13. In FY 2014, the recovery of
written-off loans totaled R$ 16.4 million versus R$ 94.5 million in FY 2013.
Financial operations result
(exchange variance*) (R$ million)
Financial operations income
4Q14
3Q14 4Q/3Q (%)
4Q13 4Q/4Q (%)
467.8
461.9
1.3
488.3
(4.2)
1,881.4
1,913.0
355.3
375.2
(5.3)
406.9
(12.7)
1,486.4
1,625.7
(8.6)
4.4
3.8
15.6
13.9
(68.4)
29.5
57.8
(49.0)
Marketable securities result
84.1
59.3
41.8
54.5
54.1
277.3
142.2
95.0
Foreign exchange result
Loan operations
Leasing operations
2014
2013 2014/2013 (%)
(1.7)
20.8
21.9
(4.8)
18.2
14.5
73.3
88.1
(16.8)
Exchange variance
3.1
1.5
105.3
(5.9)
n.a.
13.5
(2.9)
n.a.
Result from compulsory applications
0.1
0.1
(1.5)
-
n.a.
0.3
0.1
148.1
-
0.1
n.a.
0.7
n.a.
1.1
2.0
(42.1)
(313.8)
(293.2)
7.0
(228.8)
37.1 (1,188.7)
(993.5)
19.6
21.2 (1,046.1)
(879.7)
18.9
(91.1)
(31.5)
Financial assets sales or transfer operations
Financial operations expenses
(276.7)
(267.8)
3.3
(228.4)
Borrowings and onlending
(16.9)
(17.1)
(1.3)
(20.6)
(18.8)
(62.5)
Adjusted result from derivative instruments
(20.2)
(7.8)
n.a.
20.9
n.a.
(79.4)
(8.6)
n.a.
-
(0.5)
n.a.
(0.7)
n.a.
(0.7)
(14.1)
(95.4)
154.0
168.7
(8.7)
259.5
(40.7)
692.7
919.5
(24.7)
(345.5)
(621.2)
(44.4)
(58.6)
n.a. (1,274.7)
(259.7)
n.a.
(191.5)
(452.5)
(57.7)
200.9
n.a.
659.8
n.a.
Money market
Sales operations or financial assets transfers
Financial operations result before PLL
Provision for loan losses
Financial operations result
(582.0)
n.a. - not applicable
* For the purpose of analysis, the currency variation of assets (loan operations, marketable securities and derivatives portfolio and foreign exchange portfolio) and liabilities (funding from
market and foreign exchange portfolio) have been grouped into one single account under the caption of “currency variation”. In the Financial Statements, the balances of the currency
variations were booked under their corresponding income and expenses, as shown in Explanatory Note No. 30 (L).
Net Interest Margin - NIM
In 4Q14, net interest margin (NIM) stood at 4.6%, down 0.5 p.p. quarter-over-quarter. In FY 2014, NIM was 5.2%, down 1.1
p.p. in relation to the same period of 2013.
The net interest margin has been impacted by the drop in the financial operations result, without considering the provision for
loan losses. Moreover, the mix of profitable assets overburdened the highly-liquid assets, which deliver lower yields, in detriment
of declining loan operations.
Net interest margin (R$ million)
4Q14
3Q14 4Q/3Q (%)
4Q13 4Q/4Q (%)
2014
2013 2014/2013 (%)
Financial operations result before PLL
154.0
168.7
259.5
692.7
919.5
Average profitable assets (*)
(8.7)
(40.6)
(24.7)
13,489.3 13,581.3
(0.7) 13,342.5
1.1 13,417.1 14,574.5
(7.9)
- Loan operations
9,731.7 10,212.2
(4.7) 10,541.8
(7.7) 10,188.6 11,504.3
(11.4)
- Securities and derivatives
2,554.9
1,827.5
39.8
2,022.1
26.3
2,093.2
2,110.3
- Interbank investments
1,202.7
1,541.6
(22.0)
778.6
54.5
1,135.3
959.9
18.3
4.6%
5.1%
-0.5 p.p.
8.0%
-3.4 p.p.
5.2%
6.3%
-1.1 p.p.
Net interest margin
(0.8)
(*) Average figures taking into account the monthly balance for each period.
p. 5|19
4Q14 / FY 2014 Earnings Release
Total assets
As at December 31, 2014, the Bank’s total assets amounted to
R$ 15,551.4 million, representing a 4,1% increase quarter-overquarter and practically flat in comparison of R$ 15,506.2 million
recorded at the end of FY 2013.
Total Assets (R$ million)
R$ 15.6 billion in assets,
62.9% of which refers to loan
operations.
0.3%
4.1%
15,506.2
15,262.3
15,021.5
14,939.5
3,121.9
2,886.0
2,831.0
2,212.7
2,259.8
2,269.6
Loan operations
The extended loan portfolio, which comprises loan operations
(as set out by Resolution 2682/99), plus guarantees and sureties,
amounted to R$ 12,247.1 million, down 0.8% quarter-overquarter and 3.8% year-over-year.
15,551.4
3,388.9
5,106.2
2,707.4
Extended Loan Portfolio (R$ million)
1,855.2
-3,8%
10,116.5
10,171.6
4Q13
1Q14
9,920.9
2Q14
8,843.2
3Q14
-0.8%
8,590.2
4Q14
12,736.0
12,792.2
2,145.4
Other assets
Liquid Assets (highly liquid assets)
Loan Operations, net of provision for loan losses
12,966.8
12,349.5
2,242.5
2,431.0
12,247.1
2,364.1
2,472.2
Liquid assets
At the end of 4Q14, highly liquid assets totaled R$ 1,855.2
million, representing decreases of 31.5% quarter-over-quarter
and of 16.2% year-over-year. The Bank’s Management deems
the R$ 1.5-2.5 billion range for liquid assets to be satisfactory,
based on the flow of maturities for both assets and liabilities
operations.
Liquid assets
(R$ million)
4Q14
Cash & cash equivalents
175.1
Open Market
investments (except
FIDCs and Repurchase
Agreements)
3Q14 4Q/3Q
(%)
90.0
94.6
4Q13 4Q/4Q
(%)
308.5
(43.2)
8.3
1,672.1
(99.5)
800.0
(99.0)
118.5
101.8
16.4
138.6
(14.5)
Own portfolio negotiation (except FIDCs 1,553.3
and private securities)
843.6
84.1
965.5
60.9
2,707.4
(31.5)
2,212.7
(16.2)
Investments in Interbank
deposits (except for
deposits for coverage of
swap operations)
Total
1,855.2
10,590.6
4Q13
10,549.7
1Q14
10,535.8
2Q14
9,985.4
3Q14
9,774.9
4Q14
Guarantees and sureties
Loan operations
The portfolio dispersion covers all geographic regions, with no
concentration in any industry, economic activity and risk per
client. The risk dispersion indicators, one of the Bank’s pivotal
values, fell within a satisfactory range of dispersion in 4Q14.
In 4Q14, the Bank did not carry out any sale or assignment of
credit to other financial institutions, neither did it discontinue
any businesses or products. The volume of corporate loans
accounted for 87.9% of the Bank's overall loan operations in
4Q14, whereas payroll-deductible loan operations represented
8.2% of the total and personal loans, 3.9%. Retail operations
are primarily conducted by the Bank's subsidiary Sul Financeira.
In 4Q14, the breakdown of loan operations by economic
segments was as follows: industry 40.7%, services 26.9%,
commerce 14.3%, individuals 12.8%, agriculture 2.8%,
financial intermediaries 0.7% , and public sector 1.8%. In
each economic segment, the policy of risk dispersal is also
evidenced by the granting of loans to clients that operate in a
variety of its business activities, as demonstrated in the table
below.
p. 6|19
4Q14 / FY 2014 Earnings Release
By segment
By activity
%
Individuals
- Individuals
12.8%
Industry
- Construction - Contractors
7.9%
Industry
- Sugar and ethanol mills
6.4%
Services
- Holding companies in general
5.2%
Industry
- Real Estate Developer
4.6%
Services
- Cargo and passengers transportation
3.7%
Commerce
- Supermarkets and wholesalers
3.5%
Services
- Technical and professional services
3.0%
Agriculture
- Agriculture
2.8%
Industry
- Production of pulp and paper
2.4%
Industry
- Metallurgical and mechanical production
2.1%
Industry
- Chemical and petrochemical industry
2.1%
Services
- Medical and dental services
1.9%
Commerce
- Vehicle dealerships and sale yards
1.8%
Public Sector
- State Government
1.8%
Industry
- Production of flour, pasta, cakes and cookies
1.6%
Commerce
- Commerce of Electronics
1.6%
Industry
- Fertilizers and pesticides
1.4%
Services
- Rental services in general
1.4%
Services
- Utilities
1.4%
Industry
- Animal slaughter and meat packing
1.3%
Industry
- Beverage industry
1.3%
Industry
- Production of pipes and iron-based items
1.2%
Services
- Energy distribution
1.2%
Commerce
- Commerce of machines and equipment
1.1%
Outros Segmentos
Econômicos
- Other economic segments
TOTAL
The policy of loan portfolio dispersal implies keeping the main
risks at appropriate levels, both in the case of a single client and
for the groups of largest borrowers. At the end of FY 2014, the
largest borrower accounted for 2.3% of the total portfolio, and
the 100 largest ones jointly accounted for 39.2%.
Risk exposure levels
4Q14
3Q14
4Q13
Largest risk
10 largest risks
20 largest risks
50 largest risks
100 largest risks
2.27
11.67
16.73
27.65
39.25
1.82
11.17
16.22
26.60
37.30
1.44
9.78
14.60
24.33
35.24
31.1% of the loans mature in
less than 90 days.
The Bank’s portfolio has a short-term maturity profile, with
67.2% of the loans maturing within a year. In 4Q14, R$ 3,036.7
million of the loan operations, or 31.1% of the portfolio, had
maturities of up to 90 days. The loan portfolio duration stood
at 450 days (393 days in 3Q14).
Breakdown by maturity (%)
1.6%
2.2%
1.8%
3.4%
4.7%
26.0%
24.1%
27.7%
28.0%
28.1%
100.0%
35.3%
38.2%
37.3%
37.9%
36.1%
Cayman – 5%
37.1%
35.5%
33.2%
30.7%
31.1%
24.5%
Regional dispersion (%)
4Q13
1Q14
2Q14
3Q14
4Q14
Up to 3 months
From 3 to 12 months
Above 1 year
Installments overdue over 14 days
1%
17%
12%
49%
16%
At the close of 4Q14, installments over 14 days past due totaled
R$ 455.7 million, up 35.8% from the R$ 335.7 million recorded
in 3Q14, and up 173.2% from the balance of R$ 166.8 million
registered at the end of 2013.
The ratio of installments over 14 days past due to loan
operations stood at 4.7% in 4Q14 (3.4% in 3Q14 and 1.6% in
4Q13). The coverage rate of installments over 14 days past due
stood at 260.0% at the close of 4Q14 (340.2% in 3Q14 and
251.2% in 4Q13).
p. 7|19
4Q14 / FY 2014 Earnings Release
Extended loan portfolio (R$ million)
Working capital
Trade finance
Payroll deductible loans
Guaranteed accounts
Personal loan
Leasing operations
Machinery and heavy vehicles financing
Other credits
Total loan operations
Guarantees and sureties
Extended loan portfolio
Breakdown of loan portfolio by operational class (%)
46.9%
22.8%
12.1%
4.3%
2.6%
0.8%
10.5%
Working capital
Trade finance
Payroll deductible
loans / Personal loan
Guaranteed accounts
Leasing operations
Machinery and heavy
vehicles financing
Other credits
Working Capital
This is the Bank’s main product. It aims at meeting the cash flow
requirements of companies, generally with maturities not longer
than one year. At the close of 4Q14, the balance of this portfolio
amounted to R$ 4,588.3 million, or 46.9% of the total loan
portfolio. The volume of this type of operations declined by 2.4%
and 20.2% quarter-over-quarter and year-over-year respectively.
Trade finance
This type of credit comprises advances on foreign exchange
contracts (ACC/ACE), and import/export financing, as well as
notes receivables denominated in foreign-currencies. Foreign
trade finance operations are strategically important for the Bank,
since they expand product supply, ensure loyalty from clients in
foreign trading and disperse loan portfolio risks. At the close
of 4Q14, trade finance operations totaled R$ 2,223.3 million,
or 22.8% of the total loan portfolio. During the quarter, trade
finance operations rose by 0.5% quarter-over-quarter and by
14.8% year-over-year.
4Q14
3Q14
4Q/3Q (%)
4Q13
4Q/4Q (%)
4,588.3
2,223.3
803.8
422.2
383.8
250.1
79.1
1,024.3
9,774.9
2,472.2
12,247.1
4,702.4
2,211.3
804.7
631.0
378.5
288.4
94.5
874.6
9,985.4
2,364.1
12,349.5
(2.4)
0.5
(0.1)
(33.1)
1.4
(13.3)
(16.3)
17.1
(2.1)
4.6
(0.8)
5,752.5
1,937.3
713.2
776.8
261.0
336.9
137.0
675.9
10,590.6
2,145.4
12,736.0
(20.2)
14.8
12.7
(45.6)
47.0
(25.8)
(42.3)
51.5
(7.7)
15.2
(3.8)
Guaranteed accounts
This product consists of credit lines linked to corporate bank
accounts, aimed at promptly meeting the clients’ working
capital needs. At the close of 4Q14, this type of credit
accounted for 4.3% of the total loan portfolio and amounted
to R$ 422.2 million, representing decreases of 33.1% and
45.6% quarter-over-quarter and year-over-year respectively.
Lease operations
Leasing operations, whose portfolio at present value came
to R$ 250.1 million in 4Q14, dropped by 13.3% quarterover-quarter and by 25.8% year-over-year. The portfolio
breakdown by type of segment was as follows: machinery
& equipment: 42.1%; heavy-duty vehicles: 24.1%; aircraft:
18.9%; real estate: 14.5%; and others: 0.4%.
Financing of machinery and heavy-duty vehicles
This is one more credit alternative for the Bank’s clients to
develop their projects by acquiring durable goods intended
to foster their businesses. In 4Q14, this portfolio amounted
to R$ 79.1 million, down 16.3% and 42.3% from 3Q14
and 4Q13 respectively. The portfolio breakdown by type of
segment was as follows: machinery and equipment: 53.1%;
heavy-duty vehicles: 40.9%; and others: 6.0%. In 4Q14, this
type of credit comprised 0.8% of the overall loan portfolio.
Other credits
Other credits mainly comprise the modalities of Corporate
Overdraft, Agribusiness Financing, Resolution 2770, Compror
& Vendor, and debtors for the purchase of assets and goods.
In 4Q14, this type of credit amounted to R$ 1,024.3 million,
and showed rises of 17.1% and 51,5% over 3Q14 and 4Q13
respectively. At the close of 4Q14, the caption "other credits"
accounted for 10.5% of BICBANCO's overall loan operations.
Retail
Sul Financeira, a wholly-owned subsidiary of BICBANCO,
concentrates the operations geared to the retail segment,
which basically comprises payroll-deductible loan operations, as
well as personal loans, car financing and credit cards. In 4Q14,
this segment accounted for 12,1% of the overall loan portfolio,
totaling R$ 1,187.6 million. Operations related to this type of
credit rose by 0.4% over 3Q14 and by 21.9% over 4Q13.
p. 8|19
4Q14 / FY 2014 Earnings Release
Guarantees and sureties
This type of operation is not included in the loan portfolio, in accordance with Resolution 2682, notwithstanding it is taken into account
in the calculation of the Basel index. Its consistent development quarter after quarter led the Bank to start including information on
the extended loan portfolio in its Earning Releases, which includes guarantees and sureties. In 4Q14, guarantees and sureties granted
totaled R$ 2,472.2 million, up 4.6% and 15.2% quarter-over-quarter and year-over-year respectively.
Loan default and provision for loan losses
As previously explained, provisions for loans falling due have been significantly increased since September 2014 due to the introduction
of assessment and rating metrics compatible with those adopted by the China Construction Bank Group. It is worth noting the ratio
between 90-day NPLs and LLPs and the ratio between NPLs and the Total Loan Portfolio, as well as the coverage rate of NPLs over the
four quarters of the year, as shown below.
NPLs & LLPs (R$ million)
360.7%
% in loan portfolio
342.0%
186.5%
12.1%
11.4%
121.1%
1,184.9
1,142.2
5.8%
4.1%
357.6
433.2
614.9
329.6
1Q14
NPLs 90 days
346.5
316.7
2Q14
3Q14
LLPs
4Q14
LLPs/NPLs 90 days (%)
3.4%
3.1%
3.2%
3.5%
1Q14
2Q14
3Q14
4Q14
NPLs 90 days
LLPs
It is clear that the adoption of a more conservative approach to the Portfolio’s risks, combined with tighter standards in the selection
and assessment of new risks, will progressively help the Bank have a better-rating Loan Portfolio.
Loan quality indicators (R$ million)
Total loan operations
PLL
D-H portfolio (2682)
E-H portfolio (2682)
Borrowers with loan installments overdue over 60 days
Borrowers with loan installments overdue over 90 days
Installments overdue over 14 days
Ratios over total loan operations (%)
PLL
D-H portfolio
E-H portfolio
Borrowers with loan installments overdue over 60 days
Borrowers with loan installments overdue over 90 days
Installments overdue over 14 days
Provision indicators (%)
D-H portfolio
E-H portfolio
Borrowers with loan installments overdue over 60 days
Borrowers with loan installments overdue over 90 days
Installments overdue over 14 days
4Q14
3Q14
2Q14
1Q14
4Q13
9,774.9
1,184.9
2,231.2
1,685.2
430.3
346.5
455.7
9,985.4
1,142.2
2,252.2
1,519.7
355.4
316.7
335.7
10,535.8
614.9
1,285.1
922.9
349.6
329.6
191.5
10,549.7
433.2
895.8
646.1
375.3
357.6
235.2
10,590.6
419.0
944.0
582.1
245.6
217.4
166.8
12.1%
22.8%
17.2%
4.4%
3.5%
4.7%
11.4%
22.6%
15.2%
3.6%
3.2%
3.4%
5.8%
12.2%
8.8%
3.3%
3.1%
1.8%
4.1%
8.5%
6.1%
3.6%
3.4%
2.2%
4.0%
8.9%
5.5%
2.3%
2.1%
1.6%
53.1%
70.3%
275.4%
342.0%
260.0%
50.7%
75.2%
321.4%
360.7%
340.2%
47.8%
66.6%
175.9%
186.5%
321.1%
48.4%
67.1%
115.4%
121.1%
184.2%
44.4%
72.0%
170.6%
192.8%
251.2%
p. 9|19
4Q14 / FY 2014 Earnings Release
Funding
Time deposits maturity profile at the end of 4Q14 was as
follows:
The total volume of funds raised in 4Q14 came to R$ 11,733.2
million, showing declines of 5.7% and 6.6% in comparison
with 3Q14 and 4Q13 respectively.
The Bank has maintained its strategy to extend the maturity
terms of its funding operations. At the close of 4Q14, the total
funding featuring below 3-month maturities accounted for
20.7% of the overall funding, whereas 33.0% held over one
year maturities. In 4Q14, the duration of total funding stood at
626 days, higher than the 450-day duration of loan operations.
BICBANCO's healthy structure as concerns the maturity of
boths assets and liabilities delivers an atmosphere of stability
and comfort to the Institution, particularly during periods of
greater market volatility.
Sources of funding (R$ million)
Time deposits by maturity (%)
24.0%
40.1%
35.9%
Up to 3 months
From 3 to 12 months
From 1 to 3 years
The Bank consistently seeks to capture new depositors, aiming
at increasing this type of funding, as well as diversifying its
investor base, thus diluting the risk exposure.
-6.6%
-5.7%
12,562.9
12,284.7
3,727.4
4,069.2
1Q14
11,733.2
3,597.4
8,557.3
8,493.7
4Q13
12,135.0
12,440.4
3,890.5
8,537.6
2Q14
3,475.9
8,549.9
3Q14
8,257.3
% of time deposits
4Q14
3Q14
4Q13
Largest depositor
10 largest depositors
20 largest depositors
50 largest depositors
100 largest depositors
4.2
19.0
25.2
35.5
49.3
4.7
18.5
25.4
35.1
47.6
3.8
15.2
22.2
32.2
44.9
From the total volume of time deposits, the amount of R$ 613.8
million held some liquidity clause, in general, on the date of the
investment anniversary. The commitment executed between
the Bank and the client is registered with the Custody and
Clearance Chamber (CETIP).
4Q14
Foreign currency funding
Local currency funding
Domestic Funding
Time deposits
In 4Q14, time deposits amounted to R$ 6,038.2 million, down
8.3% from 3Q14 and down 3.6% from 4Q13. During the
quarter, the duration of time deposits stood at 467 days (514
days in 3Q14). From the total volume of time deposits, in the
amount of R$ 6,038.2 million, R$ 3,057.4 million consisted
of deposits with special guarantee from the Credit Guarantee
Fund (DPGE).
61.3% of time deposits come
from the Bank's client base
corporations and individuals.
Time deposit by type of depositor (%)
57.6%
38.2%
3.7%
0.5%
Corporations
Institutional investors
Individuals
Financial Institutions
p. 10|19
4Q14 / FY 2014 Earnings Release
Other deposits
Demand, savings and inter-financial deposits totaled R$ 634.4 million at the close of 4Q14, down 0.6% quarter-over-quarter and down
19.1% year-over-year.
Agriculture (LCAs), Mortgage (LCI) Credit and Financial (LFs) Bills
The Bank has been seeking to diversify its financial product mix, by means of resorting to the issuing of bills and bonds, such as the
Agriculture Credit Bills (LCAs), Financial Bills (LFs) and Mortgage Bills (LCIs). Total proceeds from such issues amounted to R$ 746.3
million as at December 31, 2014, representing decreases of 6.8% quarter-over-quarter and of 13.4% over 4Q13. The issue of bills
during the period accounted to 6.4% of the total funding.
FIDCs
Funding raised by means of subscription of FIDC senior quotas amounted to R$ 74.6 million, representing declines of 8.9% quarter-overquarter and of 62.6% year-over-year, deriving from the amortization of quotas of closed-end funds, which was not offset by relevant inflow of
investments.
Subordinated debt
At the close of 4Q14, the volume of subordinated debt issued by BICBANCO, by means of domestic and international funding, totaled
R$ 1,078.9 million, accounting for 9.2% of the overall funding. With respect to the calculation of the Tier III Capital that integrates the
Basel Index, 80% of this type of funding was accounted for as concerns that methodology. Three types of issue carry a subordinated
feature: (i) subordinated CDB of R$ 200 million, issued in 2009, with maturity in 2019; (ii) subordinated Eurobonds in the amount
of US$ 300 million, issued in 2010, maturing in 2020; and (iii) subordinated loan of US$ 32 million, issued in 2010, with maturity
scheduled for 2017.
International Funding
In 4Q14, total international funding accounted for 29.6% of overall funding, amounting to R$ 3,475.9 million, representing an 10.7%
decrease over 3Q14 and a 14.6% fall over 4Q13.
Three types of issue carry a subordinated feature: (i) the funding geared to trading finance operations that provide resources for active
foreign trade being raised from international banks and (ii) funds raised by means of syndicated loans through multilateral bodies (BID,
IFC, IIC, Proparco and DEG), issue of securities, transfers and subordinated debt, which provide funding for loan operations and enjoy
greater maturity terms.
Fluctuations in the U.S. dollar do not constitute additional risks to the institution. Fund raising intended for trade finance operations
are naturally hedged by the asset operations. For the set of funding operations listed in item (ii), the Bank carries out hedge operations
aimed to mitigate the risk of currency mismatch.
The table below sets out the maturity schedule for the securities issued abroad (item ii), which altogether totaled US$ 750.1 million
and € 3.0 million as at December 31, 2014.
Maturity
2015
2016
2017
2018
2019
2020
2021
Total
Amount (million)
$390.4
$20.7
$45.2
$5.7
$5.7
$276.6
$5.7
$894.1
and
and
and
€ 1.2
€ 1.2
€ 0.6
€ 3.6
p. 11|19
4Q14 / FY 2014 Earnings Release
The tables below show the Bank’s total funding by currency & products and by maturity & class.
Total funding by currency and products (R$ million)
4Q14
3Q14
4Q/3Q (%)
4Q13
4Q/4Q (%)
8,257.3
8,549.9
(3.4)
8,493.7
(2.8)
Deposits
6,672.6
7,221.6
(7.6)
7,048.5
(5.3)
- Time deposits
6,038.2
6,583.7
(8.3)
6,264.7
(3.6)
- Other deposits
634.4
637.9
(0.6)
783.8
(19.1)
Resources from Issued Bills
746.3
800.7
(6.8)
861.9
(13.4)
- Agriculture Credit Bills (LCA)
295.2
407.7
(27.6)
401.0
(26.4)
- Financial Bills (LF)
169.1
164.8
2.6
271.2
(37.6)
- Mortgage Bills (LCI)
282.0
228.3
23.5
189.7
48.6
Subordinated Debt
674.2
314.7
114.3
291.7
131.2
Receivables Securitization Funds - FIDCs
74.6
82.0
(8.9)
199.7
(62.6)
Onlendings - Official Institutions
89.4
128.3
(30.3)
89.3
0.2
-
2.3
n.a.
2.1
n.a.
Proceeds from Forex notes
0.2
0.2
3.0
0.5
(55.9)
Foreign currency funding
Local currency funding
Debentures proceeds
3,475.9
3,890.5
(10.7)
4,069.2
(14.6)
International loans obligations
1,774.3
1,615.9
9.8
1,689.6
5.0
International securities obligations
1,030.1
976.9
5.4
984.3
4.7
International onlending obligations
263.6
587.3
(55.1)
741.1
(64.4)
Subordinated debt
404.7
709.8
(43.0)
654.2
(38.1)
3.2
0.6
n.a.
-
n.a.
11,733.2
12,440.4
(5.7)
12,562.9
(6.6)
29.6%
31.3%
-1.7 p.p.
32.4%
-2.8 p.p.
Foreign currency deposits
Total funding
Foreign funding's share on total funding
n.a. - not applicable
Total funding by
maturity and class
(R$ million)
Without maturity (*)
Domestic
Onlending Official
Institutions
Borrowings and
onlending
abroad
Securities
issued abroad
Deposits
FIDCs (Credit
Receivables
Investment
Funds)
Credit Bills
(LCA, LF, LCI
and others)
Total
Funding
Subordinated debt
232.4
3.5%
-
-
-
-
-
-
-
-
-
-
-
-
232.4
2.0%
Up to 3 months
1,520.4
22.8%
14.1
1.4%
417.9
20.5%
-
-
239.6
32.1%
-
-
-
-
2,192.0
18.7%
From 3 to 12 months
2,585.8
38.7%
939.6
91.2%
1,464.8
71.9%
86.3
96.5%
350.3
46.9%
64.0
85.7%
11.9
1.1%
5,502.7
46.9%
From 1 year to 3 years
2,196.7
32.9%
76.4
7.4%
94.6
4.6%
3.1
3.5%
156.6
21.0%
10.6
14.3%
-
-
2,538.0
21.6%
2.3
0.0%
-
-
30.3
1.5%
-
-
-
-
-
-
-
-
32.6
0.3%
Above 5 years
138.1
2.1%
-
-
30.4
1.5%
-
-
-
-
-
-
1,067.0
98.9%
1,235.5
10.5%
Total funding
6,675.7
100.0%
1,030.1
100.0%
2,038.0
100.0%
89.4
100.0%
746.5
100.0%
74.6
100.0%
1,078.9
100.0%
11,733.2
100.0%
From 3 to 5 years
(*) Represented as demand and savings deposits.
p. 12|19
4Q14 / FY 2014 Earnings Release
Basel index
At the close of 4Q14, BICBANCO’s Basel Index stood at 13.63%, showing a 0.72 p.p. decrease quarter-over-quarter, and a 5.44 p.p.
decrease year-over-year. During the quarter, this index was impacted by the Bank's operating result.
Furthermore, the comparison between 2014 and 2013 has been harmed by the introduction of changes during the period. In
compliance with the Brazilian Central Bank (BACEN) Resolution No. 4192, the multiplying factor has changed to 80% as of 2014
from 90% applied in 2013.
In addition, the set of regulations that carries the recommendations laid down by the Basel Committee on Banking Supervision, with
regards to the capital structure of financial institutions, known as Basel III, has also included the Brazilian institutions, and came into
effect as of October 1, 2013. The new rules, announced by means of Resolutions and Circulars, have laid down a set of procedures
related to the compilation of minimum level requirements involving the banks' Core Capital, Level I and the Reference Equity (RE).
Three independent requirements have been established for each concept of Capital (Core Capital, Level I and RE), in addition to
variable supplementary amounts. The minimum requirement for the Reference Equity was maintained at 11% in October, but this
is expected to change as of January 2016.
Basel index (%)
19.07%
17.54%
16.72%
14.35%
5.81%
4.92%
13.63%
4.89%
11%
5.07%
13.26%
4Q13
12.62%
1Q14
11.83%
2Q14
5.41%
9.28%
3Q14
8.22%
4Q14
TIER II
TIER I
Remuneration to shareholders
There was no distribution of dividends related the FY 2014.
Human resources
At the close of FY 2014, the Bank’s number of employees totaled 771, representing a 2,2% decrease in relation to 3Q14 and up 2.1%
from 4Q13.
Headcount
Sales
Administrative
Total BICBANCO
Sul Financeira
Consolidated Total
4Q14
3Q14
4Q/3Q (%)
4Q13
4Q/4Q (%)
202
569
771
117
888
219
569
788
119
907
(7.8)
(2.2)
(1.7)
(2.1)
224
531
755
119
874
(9.8)
7.2
2.1
(1.7)
1.6
p. 13|19
4Q14 / FY 2014 Earnings Release
Service outlets
At the close of FY 2014, the Bank had 37 service outlets, and maintained both its footprint and the regional franchise dispersion
throughout the main capitals and cities in Brazil.
UF
City
Service outlets
AL
Maceió
Maceió
BA
Salvador
Salvador
CE
Fortaleza
Aldeota - Bezerra - Centro
Juazeiro do Norte
Juazeiro do Norte
DF
Brasília
Brasília
GO
Goiânia
Goiânia
MA
São Luis
São Luis
MG
Belo Horizonte
Belo Horizonte
Uberlândia
Uberlândia
MT
Cuiabá
Cuiabá
PA
Belém
Belém
PB
João Pessoa
João Pessoa
PE
Recife
Recife
PI
Teresina
Teresina
PR
Curitiba
Curitiba
Londrina
Londrina
RJ
Rio de Janeiro
Rio de Janeiro
RN
Natal
Natal
RS
Porto Alegre
Porto Alegre
Caxias do Sul
Caxias do Sul
Blumenau
Blumenau
Chapecó
Chapecó
Florianópolis
Florianópolis
SE
Aracaju
Aracaju
SP
Barueri
Alphaville
Bauru
Bauru
Campinas
Campinas
Guarulhos
Guarulhos
Santo André
ABC
Santos
Santos
São José do Rio Preto
São José do Rio Preto
São Paulo
Berrini - Brasil - MASP
Ribeirão Preto
Ribeirão Preto
SC
Grand Cayman
37 Service
outlets
Election of the Board of Directors and the Board of Executive Officers
Board of Directors
Function
Date of Election
End of Mandate
Mr. Wensheng Yang (*)
Chairman
09/01/2014
AUG 2015
Mr. Tiejun Chen (*)
Member
09/01/2014
AUG 2015
Mrs. Hong Yang (*)
Member
09/01/2014
AUG 2015
Mr. José Bezerra de Menezes
Member
04/15/2013
AUG 2015
Mr. Heraldo Gilberto de Oliveira
Independent Member
04/15/2013
AUG 2015
Mr. Daniel Joseph McQuoid
Independent Member
04/15/2013
AUG 2015
(*) Under process of approval by the Brazilian Central Bank
p. 14|19
4Q14 / FY 2014 Earnings Release
Executive Board
Function
Date of Election
End of Mandate
Mr. Tiejun Chen (*)
President
09/01/2014
1st BDM after the AGM 2016
Mr. Milto Bardini
Executive Vice-President and IR Officer
05/05/2014
1st BDM after the AGM 2016
Mrs. Xiaowei Dong (*)
Executive Vice-President
09/01/2014
1st BDM after the AGM 2016
Mr. Jin Li (*)
Executive Vice-President
09/01/2014
1st BDM after the AGM 2016
Mr. Paulo Celso Del Ciampo
Executive Vice-President and International Division Officer
05/05/2014
1st BDM after the AGM 2016
Mr. Yongdong Jiang (*)
Executive Vice-President
12/11/2014
1st BDM after the AGM 2016
Mr. Zhongzu Wang (*)
Executive Director
09/01/2014
1st BDM after the AGM 2016
Mrs. Hong Yang (*)
Executive Director
09/01/2014
1st BDM after the AGM 2016
Mr. Francisco Edênio Barbosa Nobre
Executive Director
05/05/2014
1st BDM after the AGM 2016
Mr. Carlos José Roque
Executive Director
05/05/2014
1st BDM after the AGM 2016
(*) Under process of approval by the Brazilian Central Bank
Summary of events preceding the sale of BICBANCO's shareholding control
. Pending Approvals. On July 21, 2014, the Presidential Decree was passed, which the approved Operation, as per the terms set out
in article IV of teh Constitution of the Brazilian Federal Constitution, and on July 22, 2014, the Brazilian Central Bank also approved the
Operation (“Brazilian Approval”). The Chinese regulatory bodies, along with the Cayman Islands’ banking authoriries, have also approved
the Operation on April 2, 2014 and on June 24, 2014, respectively (“Foreign Approvals”, which together with the “Brazilian Approval”,
make up the “Required Approval”). The Brazilian Administrative Council for Economic Defense (CADE) also approved the Operation on
January 9, 2014.
. Shareholding restructuring. This event involved the Bank, as well as its former shareholders Gemini Holding S.A. BIC Corretora de
Câmbio e Valores S.A., and Primus Holding S.A. On an economic viewpoint, a neutral treatment was taken for all the parties involved,
leading to a shareholding benefit deriving from the operation, as well as streamlining of the merging those companies into a single
structure. The shareholding restructuring, an essential pre-condition for this Operation, was completed on August 7, 2014, and filed with
the relevant commercial bodies, containing all required shareholding acts.
. Consent Solicitation. For the holders of senior notes and creditors of some international loans in which contracts a Change of Control
clause is included, BICBANCO made and concluded a Consent Request.
. Business plan delivered to BACEN. In January 2014, CCB submitted to the regulatory bodies, mainly BACEN, all the information
(Business Plan) required to obtain approval for the Transaction.
p. 15|19
4Q14 / FY 2014 Earnings Release
Ratings
Following the transfer of BICBANCO's shareholding control to China Construction Bank, both the rating agencies S&P and Fitch have decided
to upgrade the Bank's ratings. Moody`s and S&P attributed investment grade rating to the Bank. Fitch Ratings upgraded the Bank's ratings
on a Domestic Scale.
Agencies/
consulting
Rating/index
Scope of activities - classification
Baa3
P-3
Global activities
- Foreign currency deposits:
. Long term
. Short term
Baa3
P-3
- Local currency deposits:
. Long term
. Short term
Aa1,br
BR-1
Domestic activities
- Deposits:
. Long term
. Short term
D
Financial strength
Baa3
Ba1
Foreign currency debt
. Bonds
. Subordinated debt
Stable
Outlook
BBBA-3
Global activities - counterpart rating
- Foreign currency deposits
. Long term
. Short term
BBBA-3
- Local currency deposits
. Long term
. Short term
Moody´s
Standard & Poor´s
Date of publication of Rating
12/01/2014
10/01/2014
Domestic activities
brAAA
Stable
. Long term
Outlook
Domestic activities
Fitch Ratings
AAA (bra)
. Long term
F1+ (bra)
. Short term
02/12/2015
Stable
Outlook
brAA-
Domestic activities
. Long term domestic activities
Positive Watch
Outlook
LF Rating
AANeutral
. Local currency
Outlook
12/19/2014
Management &
Excellence
AA
. Sustainability
July/2014
Austin Rating
04/11/2014
p. 16|19
4Q14 / FY 2014 Earnings Release
Annex I
CONSOLIDATED BALANCE SHEET
(R$ million)
4Q14
3Q14
4Q/3Q (%)
4Q13
4Q/4Q (%)
ASSETS
Cash and cash equivalents
Interbank investments
Securities and derivative financial instruments
Interbank accounts
Loan, leasing, forex-finance and other receivables
Provision for loan losses
175.1
90.0
94.6
308.5
(43.2)
180.5
1,882.8
(90.4)
1,023.6
(82.4)
4,282.9
1,864.1
129.8
2,049.3
109.0
98.2
100.1
(1.9)
113.5
(13.5)
9,774.9
9,985.4
(2.1)
10,590.6
(7.7)
(1,184.9)
(1,142.2)
3.7
(419.0)
n.a.
184.9
181.5
1.9
198.5
(6.8)
Other assets
2,039.8
1,977.8
3.1
1,641.2
24.3
Total assets
15,551.4
14,939.5
4.1
15,506.2
0.3
6,675.7
7,222.3
(7.6)
7,048.5
(5.3)
6,038.2
6,583.7
(8.3)
6,264.7
(3.6)
637.5
638.6
(0.2)
783.8
(18.7)
Permanent assets
LIABILITIES
Deposits
Time deposits
Other deposits
Money market
1,614.6
23.0
n.a.
41.1
n.a.
Funds from acceptance and issue of securities
1,776.6
1,780.2
(0.2)
1,848.8
(3.9)
Foreign currency borrowings
1,774.3
1,615.9
9.8
1,689.6
5.0
Onlending
353.0
715.6
(50.7)
830.4
(57.5)
Other liabilities
984.3
1,027.3
(4.2)
950.0
3.6
74.6
82.0
(8.9)
199.7
(62.6)
Subordinated debt
1,078.9
1,024.5
5.3
945.9
14.1
Total liabilities
14,332.0
13,490.8
6.2
13,554.0
5.7
1,219.4
1,448.7
(15.8)
1,952.2
(37.5)
15,551.4
14,939.5
4.1
15,506.2
0.3
Receivables Securitization Fund - FIDC
Shareholders’ equity
Total liabilities and shareholder’s equity
n.a. - not applicable
p. 17|19
4Q14 / FY 2014 Earnings Release
Annex II - (Adjusted Results)
CONSOLIDATED STATEMENT
OF INCOME (R$ million)
Financial operations Income
Loans operations
Leasing operations
4Q14
3Q14 4Q/3Q (%)
4Q13 4Q/4Q (%)
2014
2013 2014/2013 (%)
701.5
781.8
(10.3)
680.3
3.1
2,199.5
2,419.8
362.3
384.6
(5.8)
409.1
(11.5)
1,490.5
1,638.5
(9.0)
4.4
3.8
15.6
13.9
(68.4)
29.5
57.8
(49.0)
(9.1)
83.5
58.6
42.5
54.2
54.1
276.3
135.2
104.3
Adjusted result from derivative instruments
130.7
187.5
(30.3)
133.3
(2.0)
159.6
309.0
(48.3)
Foreign exchange result
120.5
147.1
(18.1)
69.1
74.4
242.2
277.2
(12.7)
0.1
0.1
(1.5)
-
n.a.
0.3
0.1
148.1
-
0.1
n.a.
0.7
n.a.
1.1
2.0
(42.1)
Result from investments in marketable securities
Result from compulsory applications
Financial assets sales or transfer operations
Financial operations expenses
(893.0)
(1,234.3)
(27.7)
(479.4)
86.2
(2,781.5)
(1,760.0)
58.0
Money market
(402.7)
(420.3)
(4.2)
(297.4)
35.4
(1,238.6)
(1,080.4)
14.6
Borrowings and onlending
(144.8)
(192.3)
(24.7)
(122.7)
18.0
(267.5)
(405.8)
(34.1)
-
(0.5)
n.a.
(0.7)
n.a.
(0.7)
(14.1)
(95.4)
(345.5)
(621.2)
(44.4)
(58.6)
n.a.
(1,274.7)
(259.7)
n.a.
Financial operations result
(191.5)
(452.5)
(57.7)
200.9
n.a.
(582.0)
659.8
n.a.
Other operating income (expenses)
(166.9)
(123.6)
34.9
(135.6)
22.9
(562.8)
(469.8)
19.8
Financial assets sales or transfer operations
Provision for loan losses
22.4
23.6
(5.2)
25.8
(13.3)
95.8
97.1
(1.3)
Personnel expenses
(58.5)
(56.3)
3.9
(49.8)
17.3
(225.3)
(206.0)
9.4
Tax expenses
(48.8)
(52.5)
(7.1)
(51.5)
(5.3)
(197.5)
(184.7)
6.9
11.7
19.0
(20.1)
34.0
(55.3)
64.1
74.9
(9.8)
(79.6)
(44.3)
87.6
(75.2)
10.4
(243.3)
(178.3)
38.4
(358.4)
(576.1)
(37.8)
65.3
n.a.
(1,144.8)
190.0
n.a.
Banking services fees
Other administrative expenses
Other operating expenses
Operating result
Non-operating result
(10.9)
(49.1)
(77.8)
(0.7)
n.a.
(80.1)
(5.1)
n.a.
Income before taxes
(369.3)
(625.2)
(40.9)
64.6
n.a.
(1,224.9)
184.9
n.a.
4.9
4.3
13.4
4.7
3.0
(0.2)
(21.7)
(99.0)
Income taxes
Social contributions
Adjusted Deferred tax credits
Profit sharing
Adjusted Net Result
2.0
2.0
(4.4)
1.2
58.3
(3.0)
(15.5)
(80.6)
143.2
265.9
(46.2)
(26.5)
n.a.
516.8
7.5
n.a.
-
-
n.a.
-
n.a.
(7.9)
(8.6)
(8.2)
(219.2)
(353.0)
(37.9)
44.0
n.a.
(719.2)
146.6
n.a.
n.a. - not applicable
p. 18|19
4Q14 / FY 2014 Earnings Release
Annex III - (Accounting)
CONSOLIDATED STATEMENT
OF INCOME (R$ million)
Financial operations income
Loans operations
Leasing operations
4Q14
3Q14 4Q/3Q (%)
4Q13
4Q/4Q (%)
2014
2013 2014/2013 (%)
694.9
755.8
(8.1)
670.7
3.6
2,173.0
2,276.9
362.3
384.6
(5.8)
409.2
(11.5)
1,490.5
1,638.5
(9.0)
4.4
3.8
15.6
13.9
(68.4)
29.5
57.8
(49.0)
(4.6)
83.5
58.6
42.5
54.2
54.1
276.3
135.2
104.3
Result from derivative instruments
124.1
161.5
(23.2)
123.6
0.4
133.1
166.1
(19.9)
Foreign exchange result
120.5
147.1
(18.1)
69.1
74.4
242.2
277.2
(12.7)
0.1
0.1
(1.5)
-
n.a.
0.3
0.1
(12.7)
-
0.1
n.a.
0.7
n.a.
1.1
2.0
148.1
Result from investments in marketable securities
Result from compulsory applications
Financial assets sales or transfer operations
Financial operations expenses
86.2 (2,781.5) (1,760.0)
58.0
Money Market
(893.0) (1,234.3)
(402.7)
(420.3)
(27.7) (479.4)
(4.2)
(297.4)
35.4 (1,238.6) (1,080.4)
14.6
Borrowings and onlending
(144.8)
(192.3)
(24.7)
(122.7)
18.0
(267.5)
n.a.
(405.8)
(34.1)
-
(0.5)
n.a.
(0.7)
(0.7)
(14.1)
(95.4)
(345.5)
(621.2)
(44.4)
(58.6)
n.a. (1,274.7)
(259.7)
n.a.
Financial operations results
(198.1)
(478.5)
(58.6)
191.3
n.a.
(608.5)
516.9
n.a.
Other operating income (expenses)
(166.9)
(123.6)
34.9 (135.6)
22.9
(562.8)
(469.7)
19.8
Financial assets sales or transfers operations
Provision for loan losses
22.4
23.6
(5.2)
25.8
(13.3)
95.8
97.1
(1.3)
Personnel expenses
(58.5)
(56.3)
3.9
(49.8)
17.3
(225.3)
(206.0)
9.4
Tax expenses
(14.1)
(13.1)
7.2
(18.9)
(25.5)
(56.6)
(72.8)
(22.3)
Other administrative expenses
(48.8)
(52.5)
(7.1)
(51.5)
(5.3)
(197.5)
(184.7)
6.9
11.7
19.0
(20.1)
34.0
(55.3)
64.1
74.9
(9.8)
(79.6)
(44.3)
87.6
(75.2)
10.4
(243.3)
(178.2)
38.4
Banking services fees
Other operating income
Other operating expenses
Operating result
(365.0)
(602.1)
(39.4)
55.7
n.a. (1,171.3)
47.2
n.a.
Non-operating result
(10.9)
(49.1)
(77.8)
(0.7)
n.a.
(80.1)
(5.1)
n.a.
Income before taxes
(375.9)
(651.2)
(42.3)
55.0
n.a. (1,251.4)
42.1
n.a.
Income taxes
4.9
4.3
13.4
4.7
3.0
(0.2)
(21.7)
(99.0)
Social contributions
2.0
2.0
(4.4)
1.2
58.3
(3.0)
(15.5)
(80.6)
Deferred tax credits
145.8
276.3
(47.2)
(22.4)
n.a.
527.3
65.0
n.a.
-
-
n.a.
-
n.a.
(7.9)
(8.6)
(8.2)
(223.2)
(368.6)
(39.4)
38.5
n.a.
(735.2)
61.3
n.a.
Profit sharing
Net result (accounting)
n.a. - not applicable
p. 19|19