PINE
Av. das Nacóes Unidas 8,501/ 30% andar, Sáo Paulo, SP PINE
BM FBOVESPA: PINE4
www.pine.com/ ir
Quarterly Earnings Release – 1013 (BR GAAP)
PINE REPORTS NET INCOME OF R$46 MILLION IN 1Q13,
ANOTHER RECURRENT QUARTER IN ALL BUSINESS LINES
Sáo Paulo, May 6, 2013 – PINE (BM€FBOVESPA: PINE4), a wholesale bank focused on establishing and maintaining long-term
relationships with large corporate clients and investors, announces today its consolidated results for the first quarter of 2013
(1Q13), presented in BR GAAP. Key data for the period follows.
R$ millions
Loan Portfolio! Total Funding Shareholders’ Equity
22.4%
12% > 23%, –
7,426 8,405 6,443 6,589 1,029 1,260
Mar-12 Mar-13 Mar-12 Mar-13 Mar-12 Mar-13
Fee Income Net Income ROAE
-3.2% -2.1% b
– -s -Y ps
31 30 47 46 19.5% 15.5%
A AÁAAÓO E OA OOAAAAK-
1012 1013 1012 1013 1012 1013
Y Includes Letters of Credit to be used, Bank Guarantees, Credit Securities to be Received and Private Securities (bonds, DRIs, eurobonds and fund shares)
Other Highlights
= Positive revenue contributions from all business lines in the quarter: 56.6%from Corporate Credit, 34.1%from FICC,
7.6%from PINE Investimentos, and 1.7%from Treasury.
= Positive liquidity gap maintained for over 11 quarters: 15 months for credit, versus 17 months for funding.
= Liquid balance sheet, with cash position of R$1.4 billion, equivalent to 42%of time deposits.
= PINE continues to be ranked among the 15 largest players in derivative transactions and the 2″ largest in commodity
derivatives according to CETIP (OTC Clearing House).
= On April 19, the Central Bank of Brazil approved the capital increase made by Proparco in the Bank. The transaction
resulted in the issuance of 2,211,213 preferred shares, totaling approximately R$32 million, with the participation of
other shareholders who exercised their preemptive rights at the price of R$14.28 per share. The transaction resulted
in a BIS ratio improvement of 40 bps.
= On April 25, DEG disbursed the first transaction of the PINE-DEG partnership, totaling US$16 million with an eight-
year term for a company in the autoparts sector.
= On April 30, we concluded our first DCM transaction through our New York broker dealer. The deal amounted to
US$250 million for a company in the Sugar and Ethanol sector in the state of Sáo Paulo.
Investor Relations +55 11 3372-5343 |Raquel Varela
Alejandra Hidalgo
Eduardo Pinotti
Ana Carolina Lopes
Contents
Macroeconomic Scenario
Business Performance
Financial Performance
Financial Margin
Fee Income
Personnel and Administrative Expenses
Efficiency Ratio
Corporate Credit
Loan Quality and Provision for Loan Losses – Resolution 2682
FICC
PINE Investimentos
Funding
Asset and Liability Management
Capital Structure
Balance Sheet
Income Statement
10
10
12
13
A PINE
Macroeconomic Scenario
The economic environment during the first quarter of 2013 continued the trend seen in 2012. While in Brazil, the five-year
credit default swap (CDS) rose between J] anuary and March, the five and ten-year swaps in Italy and Spain also rose, in a far
more significant manner. The reasons behind these deteriorations are structural and will be explored below. In the US, there
was uncertainty regarding a specific portion of the Fiscal Cliff, which, if not properly handled, would produce contractive
effects resulting in a 0.4%to 0.6%reduction in the US GDP growth forecast for 2013.
Starting with the US and the turmoil surrounding the Fiscal Cliff, the remnants of the ghost that spooked investor optimism
and led to proclamations of the possibility of a recession in the US during the first half of 2013 were the automatic cuts to
public spending, in the event of a failure to reach an agreement on which costs would be cut. In fact, assuming an income
multiplier that is equal to 1.4 times the aggregated expenditure, the automatic spending cuts would do away with the
equivalent of 0.6% of the GDP growth, which could reduce the projected growth of the real GDP from 2.1%to 1.4%in 2013.
Even though this scenario would produce the fiscal adjustment that investors would like to see implemented in the US, the
lack of consensus over the necessary cuts is causing concern, particularly when the S8€P500 ¡is close to 1,600 points,
approaching its historical high. Over the long term, however, the uncertainty embedded in this context implies the
maintenance of both the Fed Funds rate at 0.25%until 1015, as well as the monetary base of US$3.0 trillion until the start of
2014. This framework should continue as long as economic growth in the US is less than or equal to 2.0% the unemployment
rate remains above 7.0% and the consumer inflation index is below 2.0%
In the Euro zone, even though the forces that haunted the region during the second half of 2012 have been mitigated in 1013
by the near continuous provision of liquidity by the EFSF/ESM fund and the European Central Bank (ECB) in the primary and
secondary markets for sovereign bonds, there is always the possibility of a new ghost to emerge in the future. In the specific
Case of the last quarter, the solution to the Cypriot impasse generated uncertainty in the Euro zone and a concern among
investors that other countries might resort to the same solution. The taxation of deposits in Cyprus sets a new precedent in
the Euro zone. Therefore, given the political and electoral gridlock in Italy, along with the severe fiscal adjustments in Italy,
Spain, Greece, Cyprus and Ireland, the fissures in the banking union of the Euro zone open space for increasing concern over
the adoption of increasingly heterodox solutions, particularly when the fiscal adjustment is severe and the surrounding social
dynamics are negative impacted.
In Brazil, the highlights in the 1013 were the signs on the domestic front pointing towards accelerated inflation vis-á-vis
economic activity and the growing likelihood of an increase in the Selic rate in April, which, in fact, did take place. It is true
that the announcement of new tax cuts at the end of last quarter, particularly with respect to basic goods, and the moderate
recovery (below market expectations) of domestic economic activity and the growth of the global GDP could delay, or even
prevent, a higher Selic rate. However, consumer inflation reached uncomfortable levels in 1Q13, when the inflation rate of
the IPCA price index reached 6.6% exceeding the ceiling for the inflation target. In addition, the broad array of IPCA ¡items
experiencing inflationary highs (70% close to their historical maximums) and the worsening of other core inflation measures
leave no doubt as to the limited scope of the tax cuts adopted during the last quarter as a palliative to mitigate the recent
acceleration of inflation in Brazil.
Therefore, the outlook for interest rates in Brazil points to a high of 150 basis points, at most, in 2013, bringing the Selic rate
to 8.75% by December 2013. The pace for increasing the basic rate should remain at 0.25% per meeting, but that depends on
the deceleration of average monthly inflation figures to a level below 0.4% vis-á-vis the recovery of domestic economic
activity. The European crisis and recession, the forecast for slower growth of the US GDP relative to projections at the
beginning of the year and the slowdown of the Chinese economy can be used as arguments against raising the Selic rate.
Likewise, the slowing productivity in Brazil, accompanied by a clear compression of profit margins (within a context of full
employment) and institutional uncertainties arising from the constant changes in taxes and government measures, have all
reduced companies’ appetites for investment. Without question, this could serve as yet another reason to mitigate the desire
of the Monetary Policy Committee (COPOM) to accelerate the increase in the base rate throughout the year.
Business Performance
PINE
PINE is a wholesale bank focused on establishing and maintaining long-term relationships with large corporate clients and
investors. lts strategy is based on knowing its clients well and understanding their businesses and potential in order to build
customized financial solutions and alternatives. This strategy requires a diverse range of products, highly qualified human
capital and efficient and agile risk management, areas in which the Bank is consistently evolving.
The contribution to overall revenue from products and services complementary to credit maintained its participation at
around 40% This confirms the increasingly more efficient allocation of capital and the value creation in all of the Bank’s
business lines.
PINE
Investiment:
10.2%
1012
os
Treasury
8.2%
Financial Perfo
FIcC
24.3%
rmance
Corporate
Credit
57.3%
1013
PINE
Investimentos
7.6%
Treasury
1.7%
FICC
34.1%
Corporate
Credit
56.6%
PINE reached R$1.3 billion in Shareholders’ Equity, 22.4% higher when compared to March 2012, influenced by the capital
increase made by PINE’s controlling shareholder, management, DEG, Proparco and minority shareholders, concluded in April,
2013. Annualized Return on Average Equity (ROAE) reached 15.5%in the quarter.
Earnings and Profitability
Net income (R$ millions)
Annualized ROAE
Annualized ROAAw*
Annualized financial margin before provision
Annualized financial margin after provision
Balance Sheet (R$ millions)
Total assets
Loan portfolio?
Risk weighted assets
Deposits?
Funding
Shareholders’ equity
Credit portfolio quality
Non performing loans – 90 days
Credit coverage index
Performance
BiSratio
Efficiency ratio
Earnings per share* (R$)
Book value per share* (R$)
Market Cap* (R$)
1013
46
15.5%
2.4%
5.5%
4.8%
10,204
8,405
7,293
3,521
6,589
1,260
0.6%
3.4%
17.1%
37.1%
0.41
11.37
1,601
7]
48
16.8%
2.4%
5.0%
3.9%
10,406
7,948
8,179
3,716
7,062
1,220
0.6%
3.3%
16.2%
39.3%
0.44
11.23
1,629
nr] 1]
47 -4.2%
19.5% -130 bps
2.1%
7.0% 50 bps
6.4% 90 bps
10,368 -1.9%
7,426 5.1%
7,219 -10.8%
3,786 -5.2%
6,443 -6.7%
1,029 3.3%
0.2%
3.4% 10 bps
16.4% 90 bps
29.5% -160 bps
0.47 -6.8%
10.41 1.2%
1,360 -1.7%
R$ millions
MOS
-2.1%
-400 bps
-30 bps
-150 bps
-160 bps
-1.6%
13.2%
1.0%
-7.0%
2.3%
22.4%
40 bps
70 bps
820 bps
-12.8%
9.2%
17.7%
Risk weighted assets
2 Includes Letters of Credit to be used, Bank Guarantees, Credit Securities to be Received and Private Securities (bonds,
CRIs, eurobonds and fund shares)
3 Includes Agribusiness and Real Estate Letters of Credit
* It considers 110,842,313 stocks for 1013, 108,631,100 for 4Q12 and 98,852,774 stocks for 1012
PINE
Financial Margin
In 1013, Income from Financial Intermediation before provisions for loan losses was R$102 million. Net interest margin (NIM)
before provisions reached 5.5%in the quarter, 50 bps higher than the 4012. This result is explained by the increased activity
in the FICC business, the growth of the loan portfolio in the second half of the quarter, and the return of cash reserves to a
level close to 40%of deposits.
R$ millions
1013 4Q12 mr] Q0Q 3
Income fromfinancial intermediation 102 93 122 9.7% -16.4%
Overhedge effect (2) (1) (1 100.0% 100.0%
Income from financial intermediation ex-overhedge 100 92 121 8.7% -17.4%
Provision for loan losses (13) (19) (11) -31.6% 18.2%
Income from financial intermediation after provision 87 73 110 19.2% -20.9%
Average earning assets (C ) 7,412 7,515 7,010 -1.4% 5.1%
Interbank Investments 508 418 331 21.5% 53.5%
Securities! 1,934 2,260 1,815 -14.4% 6.6%
Credit transactions 5,076 4,972 5,096 2.1% -0.4%
(-) FIDC senior shares (106) (135) (232) -21.5% -54.3%
Annualized Financial Margin before provision (%) (A/C) 5.5% 5.0% 7.0% 50 bps -150 bps
Annualized Financial Margin after provision (%) (B/C) 4.8% 3.9% 6.4% 90 bps -160 bps
1 Excludes repo transactions and the liability portion of derivatives
Fee Income
The fee income came in line with the last quarter’s results.
R$ millions
1013 pl0J Pa 1012 Q0Q ODA
Bank 20 21 15 -4.8% 33.3%
PINE Investimentos 10 9 16 11.1% -37.5%
Total 30 30 31 – -3.2%
Personnel and Administrative Expenses
In the first quarter of 2013, the total personnel and administrative expenses increased by 2.2%compared to 4Q12. By the end
of the quarter, PINE’s workforce numbered 405, compared to 412 in March, 2012.
R$ millions
1013 Eno] E 777] 037
Personnel expenses 22 23 22 -4.3%
Other administrative expenses 24 22 20 9.1% 20.0%
Subtotal 46 45 qa 2.2% 9.5%
Efficiency Ratio
The Efficiency Ratio ended the quarter at 37.7% down 160 bps when compared to the 4Q12, mainly due to increased activity
in the FICC business.
R$ millions
1013 PToFPa TE) Q0Q 74
Operating expenses | 50 49 46 2.0% 8.7%
(-) Non-recurring expenses 1 1 1
Recurring Operating Expenses (A) 49 48 45 2.1% 8.9%
Revenues ? (B) 130 122 152 6.6% -14.5%
Ratio (A/B) 37.1% 39.3% 29.5% -160 bps 820 bps
Other administrative expenses +tax expenses +personnel expenses
2Gross Income from financial intermediation – provision for loan losses +fee income +overhedge effect
PINE
Corporate Credit
Total credit risk, which includes Letters of Credit, Bank Guarantees, Credit Receivables and Private Securities, reached
R$8,405 million on March 31, 2013, increasing 5.7% Q0Q and 13.2% YoY. The Working Capital portfolio, combined with the
portfolio of Private Securities and Credit Receivable, which have similar characteristics, grew by 12.4% YoY. The average
maturity of the credit portfolio reached 15 months in March 2013.
During the 1013, PINE’s comfortable capitalization and its relatively low leverage, allowed the Bank to respond to the
growing credit demand, especially in the second half of the quarter. Nearly 90% of the credit origination was comprised of
transactions rated AA and A, with high levels of collaterals.
R$ millions
Dec-12 12 Q0Q YoY
Working capital 3,550 3,317 3,389 5.1% 4.8%
Onlending 826 853 884 -3.2% -6.6%
Trade finance! 832 781 1,021 6.5% -18.5%
Bank guarantees 2,501 2,114 1,684 18.3% 48.5%
Loan Portfolio 7,709 7,125 6,978 8.2% 10.5%
Private securities ? 670 787 367 -14.9% 82.6%
Expanded Loan Portfolio 8,379 7,912 7,345 5.9% 14.1%
Remaining retail portfolio ? 26 36 8l -27.8% -67.9%
Ajusted Total Corporate Risk 8,405 7,948 7,426 5.7% 13.2%
“Includes letters of credit to be used
Includes debentures, CRIs, Hedge Fund Shares and Eurobonds
Loan portfolio with recourse acquired from financial institutions
Loan Portfolio Profile
PINE’s loan transactions remain mostly short-term, with 59% of the portfolio due in less than 360 days, and adequately
collateralized. PINE has broad expertise in formalizing and monitoring the collateral of its transactions, in order to bring
security and robustness for the balance sheet.
Loan Maturity profile Collateral Mix
41%
38% Guarantees Products
1% Pledge
Investments 39%
2%
Properties
Pledge o
30% Receivables
From Oto 90 days From91to360 Morethan 360 28%
days days
Loan Quality and Provision for Loan Losses – Resolution 2682
1013 4Q12
AS A % provision Rating Overdue To Expire A % provision
AA – 965 965 18.9% – – 941 941 18.7%
A – 1,603 1,603 31.3% 8 A 1,386 1,386 27.5% 7
B 0 1,758 1,758 34.4% 18 B 0 2,008 2,008 39.9% 20
Cc 0 531 531 10.4% 16 Cc 1 442 443 8.8% 13
D 0 80 80 1.6% 8 D 0 76 76 1.5%
E 0 3 3 0.1% 1 E 1 7 7 0.1% 2
F 0 25 26 0.5% 13 F 0 26 27 0.5% 13
G 1 54 54 11% 38 6 u 71 82 1.6% 57
H 49 44 93 18% 93 H 25 42 67 1.3% 67
Total 51 5,063 5,114 100.0% 195 Total 39 4,999 5,038 100.0% 188
Required provision according to the transaction rating: AA: 0% A: 0.5% B: 1% C: 3% D: 10% E: 30% F: 50% G: 70% H: 100%
Includes provision of investment fund shares and private securities
PINE
The coverage of the total loan portfolio ended the quarter at 3.4% The coverage of the D-H portfolio ended the quarter
close to 80%and total coverage of the overdue portfolio was approximately 380%
Loan Portfolio Coverage Ratio!
3.7%
3.4% a
Mar-12 Jun-12 Sept-12 Dec-12 Mar-13
Portfolio by Risk Rating!
Mar-13 Dec-12
D-H
D-H
4.4%
L 4.5% L
AA-C
a 95.5%
.6%
The ratio of installments overdue more than 15 days stood at 0.9% compared to 0.7% in December 2012. The ratio of
installments overdue more than 90 days remained at 0.6% Considering total loan contracts overdue more than 90 days, the
index remained stable.
Non-Performing Loans (Overdue Installments)*
SE] TIP] Mar-12
More than 15 days 0.9% 0.7% 0.7%
More than 30 days 0.9% 0.7% 0.6%
More than 60 days 0.9% 0.6% 0.5%
More than 90 days 0.6% 0.6% 0.2%
More than 120 days 0.6% 0.6% 0.2%
More than 180 days 0.6% 0.4% 0.1%
Non-Performing Loans (Total Contract)’
Mar-13 Idea Mar-12
More than 15 days 1.7% 1.5% 2.3%
More than 30 days 1.5% 1.5% 2.2%
More than 60 days 1.5% 1.3% 1.2%
More than 90 days 1.2% 1.2% 0.7%
More than 120 days 1.2% 1.1% 0.4%
More than 180 days 1.0% 0.5% 0.3%
The fluctuation of the short-term indicators was caused by eventual delays in the quarter. However, we note significant
improvements in the last 12 months. The long term indicators have been impacted by a transaction in the Electric Energy
sector, which is 100%provisioned for as of March 2013.
1 Includes debentures, CRIS, Hedge Fund, and Eurobonds and excludes Bank Guarantees and Letters of Credit.
PINE
In 1013, PINE kept diversifying its loan portfolio, seeking to further increase the solidity of its balance sheet.
Active Management of the Loan Portfolio
1. Greater Diversification across Industries
The allocation of the portfolio by industry changed. The exposure to the Sugar and Ethanol sector decreased to 15%from 20%
in the last twelve months, in addition to the increased participation of various other sectors. Among them, we highlight
Electric and Renewable Energy and Construction.
con Financial Construction
aterial Institutions Material
2% PA Other Telgcom 2% Other
6% Financial
Meatpacking X Sugar and Ethanol institutions Sugar and Ethanol
20%
2%
Metals and Mining
2%
Chemicals,
2%
Electric and Vehicles and Parts.
| py
Renewable Energy met 1 A
12% etalluray
3% —-
Beverages and
Tobacco
3%
Meatpacking
3%
Chemicals >
2%
Food Industry
3%
Telecom__– Tf,
3%
Vehicles and Parts
/
|_- Construction
9%
Beverages and
Tobacco
3%
Foreign Trade
4%
Metallurgy
4%
Construction
Specialized
1% Services Agriculture
4% 8%
Food Industry
4%
Infrastructure
Agriculture
Specialized Transportation and.
Transportation and-/ “Services Infrastructure Logistics Foreign Trade
Logistics 5% 7% 5% %
5%
Electric and
Renewable Energy
8%
2. Rebalancing of the 20 Largest Clients
The composition of the 20 largest clients in the portfolio changed by approximately 20% demonstrating the liquidity and
flexibility of the Bank’s operations. It is also important to note that PINE operates with low levels of leverage. The 20 largest
clients over the total portfolio is still adequate, at approximately 29%
FICC
FICC business provides risk management products and hedging solutions to help clients manage the risks on their balance
sheets. The key markets in this business line are Fixed Income, Currencies, and Commodities. PINE offers to ¡ts clients the
main derivative instruments, which include non-deliverable forwards (NDFs), swaps and some options-based structures.
The total notional value of the derivatives portfolio for clients reached R$5.2 billion, with an average duration of 149 days as
of March 31, 2013. The Mark-to-Market value of the portfolio closed the quarter at R$174 million. Based on the stress test
performed on the derivatives portfolio with clients, under an extremely negative scenario consisting of the U.S. dollar
strengthening by 31% against the Brazilian Real to reach R$2.65/US$, and commodity prices falling by 30% the potential
Mark-to-Market from clients in the portfolio was R$298 million. This shows that the derivatives portfolio is well balanced and
represents relatively low credit risk exposure even under a stressed scenario.
According to the ranking compiled by CETIP – OTC Clearing House published in March 2013, PINE remains as one of the 15
largest players in derivative transactions for clients and the 2″* largest player in commodity derivatives.
A PINE
Client Notional Derivatives by Market – 1Q13 Notional Amount and Counterparty Credit
Risk (MtM)
National value
—
– – Stressed MM
Income Currencies mA
20% 60% 277 =<- 498
354 4 =
e Da 298
256 238
197
126 174
Commodities 4,287 4,720 4,875 5,036 5,180
20%
Mar-12 Jun-12 Sept-12 Dec-12 Mar-13
PINE Investimentos
PINE Investimentos, the Bank’s Investment Banking unit, works closely with ¡ts clients to offer customized and unique
solutions in the Capital Markets, Financial Advisory, and Project €: Structured Finance areas. In the first quarter of 2013, PINE
Investimentos led and structured more than R$1 billion in fixed income transactions.
PINE was ranked 13* in origination by number of transactions and 13* by volume, according to the Brazilian Financial and
Capital Markets Association (Anbima).
On April 30, the U.S subsidiary of the Bank, PINE Securities USA LLC, held its first transaction in the International Capital
Markets. lt is the issuance of Senior Unsecured Debt of Aralco, in the amount of US$250 million and a seven-year term, under
the 144A/RegS format.
Funding
Total funding was R$6,589 million in March 2013, a 2.3% growth YoY. The balance of time deposits, including Agribusiness
Credit Notes (LCA) and Real Estate Credit Notes (LCI), reached R$3,285 million, a 7.9% change when compared to December
2012. The weighted average term of deposits was 12 months, while the weighted average term of funding transactions stood
at 17 months.
R$ millions
050] DEV NT Q0Q 73
Local Funding 4,317 4,617 4,100 -6.5% 5.3%
Demand deposits 126 30 31 320.0% 306.5%
Interbank deposits 110 121 161 -9.1% -31.7%
Time deposits +LCA +LCl 3,285 3,565 3,594 -7.9% -8.6%
Individuals 126 146 281 -13.7% -55.2%
Companies 972 1,174 1,186 -17.2% -18.0%
Institutionals 2,186 2,245 2,128 -2.6% 2.1%
Capital Markets 796 901 314 -11.7% 153.5%
Onlendings +Trade Finance 1,621 1,711 1,709 -5.3% -5.1%
Onlendings 859 892 868 3.1% -1.0%
Trade finance 752 808 Tn -6.9% -2.5%
Offshore onlendings 10 10 70 – -85.7%
International Funding 651 734 634 -11.3% 2.7%
Capital Markets 402 409 233 -1.7% 72.5%
Multilaterals 78 152 216 -48.7% -71.7%
Other private placements and syndicated
loans 171 173 125 -1.2% 36.8%
Total 6,589 7,062 6,443 -6.7% 2.3%
PINE has been diversifying over and over its funding sources. In 4Q12, issuance of Financial Bills and of Huaso Bond, in the
amounts of R$200 million and US$73 million, respectively, raised PINE’s cash position to R$1.8 billion, equivalent to 50% of
time deposits. This allowed PINE to be even more selective on ¡ts funding transactions during the 1Q13, bringing the cash
reserves position to R$1.4 billion, equivalent to 42%of time deposits.
PINE
In the international arena, PINE maintained its base of correspondent banks at around 60 institutions, including banks in
various countries and multilateral agencies such as DEG, Proparco, IFC, IDB, and FMO. In the 1013, the reduction in the
Multilaterals line is explained by the payment of principal and interest of the A/B Loan transaction, in the amount of R$69.2
million.
Asset and Liability Management
In accordance with PINE’s asset and liability management, funding sources are aligned in terms of maturity and cost with
their respective credit transactions. While the weighted average maturity of the loan portfolio is 15 months, the funding
period is 17 months, ensuring a comfortable situation for the Bank. This positive liquidity gap has been maintained for
approximately 3 years.
KM Credit Funding
2,471 2,397
2,057
£,788
1,440 1,485
959
712
126 MN 99 219
A
No maturity Upto3 From3to12 Fromlto3 From3to5 Morethan 5
months months years years years
(includes
Cash)
Capital Structure
In March 2013, the Central Bank of Brazil published a substantial part of the rules regarding the definition of capital and
regulatory capital requirements, aiming to implement the recommendations of the Banking Supervision Committee (Basel !11).
These changes brought about positive impacts for PINE. The main change is the reduction to 75% from 100% on the risk
weighted assets for companies that have more than R$100 million of exposure in the Brazilian financial system, where
transactions with the Bank represent less than 10% of the bank’s Reference Equity. This measure translated into a 200 bps
increase in the Basel Ratio.
Considering these guidelines, the BIS ratio reached 17.1%in the quarter, well above the minimum requirement (11%.
R$ millions
Mar-13 Eva Mar-12
Reference Equity 1,454 1,477 1,262
Tier | 1,268 1,220 1,025
Tier | – BIS Ratio % 15.0% 13.4% 13.3%
Tier Il 185 257 237
Tier 11 – BISRatio % 2.1% 2.8% 3.1%
Required Reference Equity 933 1,004 845
Credit Risk 802 900 794
Market Risk 123 95 45
Operational Risk 8 9 6
Excess of Reference Equity 521 473 417
BIS Ratio – % 17.1% 16.2% 16.4%
10
PINE
About PINE
PINE is a wholesale bank focused on long-term relationships with large companies and investors. The bank offers Credit,
including Working Capital, Onlending lines from BNDES and Multilateral Organizations, Trade Finance, Bank Guarantees, as
well as hedging products (Fixed Income, Currencies, and Commodities), Capital Markets, Financial Advisory Services, Project
8. Structured Finance.
Corporate Governance
PINE has active corporate governance policies, given ¡ts permanent commitment to shareholders and other stakeholders.
Besides integrating Level 2 of Corporate Governance of BMSFBOVESPA, some of PINE’s practices include:
Y” Two independent members and one external member to the Board of Directors
Y 100%tag-along rights for all shares, including preferred shares
Y” Adoption of arbitration procedures for rapid settlement of disputes
Y” Quarterly disclosure of earnings in two accounting standards: BR GAAP and IFRS
Y” Compensation and Audit committees, which report directly to the Board of Directors
PINE4
During the 1Q13, PINE, in accordance with ¡ts buyback program and pursuant to the Central Bank Resolution 3,921,
repurchased 138,500 of ¡its own shares, which are currently held in treasury. At the end of the quarter, the total amount held
in treasury was 806, 996 shares.
On April 19, 2013, the Central Bank of Brazil approved the capital increase made by Proparco in the Bank. As of April 29′,
the shareholding structure is as shown below:
Cd OCIO) Total y
Controlling Shareholder 58,444,889 15,410,863 73,855,752 66.6%
Management – 6,101,509 6,101,509 5.5%
Free Float – 30,078,056 30,078,056 27.1%
Individual s – 2,269,684 2,269,684 2.0%
Local Institutional Investors – 12,891,738 12,891,738 11.6%
Foreign Investors – 8,023,962 8,023,962 7.2%
DEG – 5,005,067 5,005,067 4.5%
Proparco – 1,887,605 1,887,605 1.7%
Treasury – 806,996 806,996 0.7%
Total 58,444,889 52,397,424 110,842,313 100%
*For managerial purpose, minority shareholdres were considered individuals
Interest on Own Capital and Dividends
In April, 2013, PINE paid a total of R$30.0 million as dividends and interest on own capital, which corresponds to a gross
payout per share of R$0.28. Of this total, R$15.0 million represents interest on own capital and R$15.0 million, dividends.
This payment will be added to the amount of mandatory minimum dividend related to the fiscal year 2013. Based on PINE’s
shares average price in the quarter (R$14.30) and the proceeds paid over the past four quarters, PINE4 has a dividend yield
of 7.8%
Ratings
STANDARD – FitchRatings Moodys.com RISKbank
8POOR’S o
k-] o Long Term BB+ BB Ba2
; hi] ly Short Term B B
Ko] E b Long Term BB+ BB Ba2
H Short Term B B
E Long Term brAA Aw(bra) Al.br
10.74
E Short Term – Fibra) Br-1
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PINE
Balance Sheet
R$ millions
Mar-13 FP] IED] [oJ:]0] YoY
Assets 10,204 10,406 10,368 -1.9% -1.6%
Cash 212 126 146 68.3% 45.2%
Interbank investments 611 405 167 50.9% 265.9%
Securities 3,604 4,261 4,333 -15.4% -16.8%
Interbank accounts 1 1 2 – -50.0%
Lending operations 5,114 5,038 5,213 1.5% -1.9%
(-) Provisions for loan losses (195) (190) (181) 2.6% 1.1%
Net lending operations 4,920 4,848 5,032 1.5% -2.2%
Other receivables 827 734 679 12.7% 21.8%
Property and equipments 30 31 9 -3.2% 233.3%
Property and equipment in use 28 29 7 -3.4% 300.0%
Intangible 2 2 3 – -33.3%
Liabilities 8,944 9,186 9,339 -2.6% -4,2%
Deposits 3,199 3,319 3,401 -3.6% -5.9%
Money market funding 1,954 1,833 2,402 6.6% -18.7%
Funds from acceptance and securities issued 1,163 1,292 659 -10.0% 76.5%
Interbank and Interbranch accounts 6 22 26 -72.1% -76.9%
Borrowings and onlendings 1,859 1,975 2,070 -5.9% -10.2%
Derivative financial instruments 110 100 123 10.0% -10.6%
Other liabilities 595 588 598 1.2% -0.5%
Deferred Results 58 56 60 3.6% -3.3%
Shareholders’ equity 1,260 1,220 1,029 3.3% 22.4%
Liabilities and shareholders’ equity 10,204 10,406 10,368 -1.9% -1.6%
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Income Statement
R$ millions
1013 Elo 4p) plo pa Q0Q ED
Income from financial interme diation 233 252 281 -7.5% -17.1%
Lending transactions 111 115 139 -3.5% -20.1%
Securities transactions 58 117 137 -50.4% -57.1%
Derivative financial instruments 62 7 (6) 785.7% -1133.3%
Foreign exchange transactions 2 13 12 -84.6% -83.3%
Expenses with financial intermediation (144) (178) (170) -19.1% -15.3%
Funding transactions (119) (127) (150) -6.3% -20.7%
Borrowings and onlendings (12) (32) (9) -62.5% 33.3%
Provision for loan losses (13) (19) (11) -31.6% 18.2%
Gross income from financial interme diation 89 74 111 20.3% -19.8%
Other operating (expenses) income (19) (21) (35) -9.5% -45.7%
Fee income 30 30 31 – -3.2%
Personnel expenses (22) (23) (22) -4.3% –
Other administrative expenses (24) (22) (20) 9.1% 20.0%
Tax expenses (4) (4) (4) – –
Other operating income 10 3 23 233.3% -56.5%
Other operating expenses (9) (5) (43) 80.0% -79.1%
Operating income 70 52 76 34.6% -7.9%
Non-operating income 2 15 3 -86.7% -33.3%
Income before taxes and profit sharing 7 68 79 5.9% -8.9%
Income tax and social contribution (19) (17) (19) 11.8% –
Profit sharing (8) (2) (14) 300.0% -42.9%
Net income 46 48 47 -4.2% -2.1%
PINE
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 such are 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 tax legislation) and therefore are subject to change without prior notice.
13
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