PINE
Av. das Nacóes Unidas 8.501/30* andar, Sáo Paulo, SP
BMAaFBOVESPA: PINE4
www.pine.com/ir
PINE
Quarterly Earnings Release – 3Q13 (BR GAAP)
PINE REPORTS NET INCOME OF R$40 MILLION,
WITH STRONG UNDERLYING PERFORMANCE IN ALL BUSINESS LINES
Sáo Paulo, November 4, 2013 – PINE (BMEFBOVESPA: PINE4), a wholesale bank focused on establishing and maintaining
long-term relationships with corporate clients and investors, announces today its consolidated results for the third quarter of
2013 (3Q13), presented in BR GAAP. Key data for the period follows.
Total Loan Portfolio *
Total Funding
R$ million
Shareholders’ Equity
+6.0 +11.0% 0.4%
9,537 7,894
8,994 7,111 1,259 1,264
Jun-13 Sept -13 Jun-13 Sept -13 Jun -13 Sept -13
Fee Income Net Income ROAE
+10.0% “5 +50 bps
33
30 39 0 12.9% 13.4%
2013 3013 2013 3Q13 2013 3013
Y Includes Standby LC, Bank Guarantees, Credit Securities to be Received and Private Securities (bonds, CRIs, eurobonds and fund shares)
Other Highlights
= On September 13, Moody’s upgraded PINE”s ratings. The Bank is now only one notch from Global Investment Grade by
the three international agencies: Moody’s, Fitch
and SEP.
= Positive revenue contributions from all business lines in 9M13: 63.3% from Corporate Credit, 29.2% from FICC, 6.3% from
PINE Investimentos, and 1.2% from Treasury.
= Maintenance of the positive liquidity gap for ove!
r 3 years.
= Liquid balance sheet, with cash position of R$1.3 billion, equivalent to 39% of time deposits.
PINE raised R$571.4 million through a FIDC structure, with a five-year term. PINE also concluded a syndicated loan in
the amount of US$100 million and a two-year term, at the end of September.
PINE moved up four positions and was ranked among the 12 largest players in derivative transactions for clients and
remained the second largest player in commodity derivatives, according to the ranking compiled by Cetip.
PINE is among the 15 largest banks offering credit to large corporates and the sixth Brazilian controlled private owned
bank, according to the Melhores e Maiores ranking compiled by Exame magazine.
Also according to Exame magazine, PINE went up 5 positions in the ranking of largest banks by equity and today holds
the thirtieth place, being the thirteenth among Brazilian controlled private owned banks.
+55 11 3372-5343 [Raquel Varela
Alejandra Hidalgo
Luiz Maximo
Ana Carolina Lopes
Investor Relations
Contents
Macroeconomic Scenario
Business Performance
Financial Performance
Financial Margin
Fee Income
Personnel and Administrative Expenses
Efficiency Ratio
Corporate Credit
Loan Portfolio Profile and Quality
FICC
PINE Investimentos
Funding
Asset and Liability Management
Capital Structure
About PINE
Balance Sheet
Income Statement
10
10
11
12
13
14
A PINE
Macroeconomic Scenario
The third quarter of 2013 can be regarded as a watershed in U.S. monetary policy, whose moment of decision arrived in
September. As we know, the Fed”s switch to a more pro-tapering approach in July and August (i.e. a slowing in the purchase
of public and private bonds) led to a significant deterioration in the interest/exchange rate combination, especially in the
domestic market, but also in most of the developed and emerging economies. More specifically, between May and August,
the prospects of a reduction in the quantitative easing process as early as 2013 (rather than in 2014) and the Fed’s more
optimistic view of the market in regard to the recovery of GDP and employment, led 10-year Treasury yields to close to the
monthly average of 2.70% p.a. between July and September, peaking at 3.0% p.a. at the beginning of September. This was
sufficient to trigger a deterioration in the country risk of several important economies and push up the dollar against the
currency basket and, in particular, against the real, which – not coincidentally – hit 2.45/US$ and 2.39/US$ at the end of
August and beginning of September, respectively.
However, the almost universal consensus among investors that the tapering would occur in September was shaken by the
Fed”s decision to postpone the slowdown in its bond purchases, thus now the process is only expected to begin in the first
quarter of 2014. As a result, together with the Fed’”s downward revision of GDP and employment growth projections and the
withdrawal of Lawrence Summers (former Director of the NEC under the Obama administration and regarded as less dovish
than Janet Yellen) as a candidate for the Fed chairmanship, longer-term U.S. yield curve rates fell to 2.6%-2.7% and are
likely to remain there until the end of the year.
The continuation of monetary accommodation diminished external anxieties in the second half of September, despite the
fiscal imbroglio in the U.S. In other words, the government shutdown and the mutual threats between republicans and
democrats regarding the increase in the country”s sovereign debt ceiling were not sufficient to reduce the premiums implicit
in the devaluation of a representative basket of international currencies (including the real) against the dollar and the
country risks of important emerging economies. In fact, the substantial improvement in both indicators accompanied the
decline in 10-year Treasury yields to 2.60% p.a. Consequently, given expectations that tapering will begin in the first quarter
of next year, both baskets of country risk spreads and currency against the dollar are likely to remain low until the end of
the year.
The international scenario described above subjected the real to substantial volatility. In fact, the Brazilian currency jumped
from almost 2.20/US$ in the first half of July to 2.45/US$ in the second half of August, closing September at around 2.20/US$
once again. Such abrupt swings have a disruptive effect on inflation and economic growth in the short term – consequently,
industrial output and GDP growth in Brazil almost certainly suffered a downturn last quarter. Consumer inflation, in tum,
should begin to feel the negative consequences of greater foreign exchange volatility as of the final quarter of 2013 in a
reversal of the 3Q13 scenario, when the IPCA hovered around a monthly average of 0.21%. It should reach 0.56% in the 4013,
reflecting the partial impact of the previous quarter’s devaluation and the increased volatility of the real. All of this will
hamper the handling of monetary policy by the Brazilian Central Bank, which pushed up the Selic benchmark interest rate
from 8.0% to 9.0% in the third quarter. Currency devaluations against a background of full employment constitutes a
dangerous combination for inflation and economic growth: inflationary shocks in the short term, inflationary persistence in
the long term, average production costs outpacing average productivity, and low real industrial output and GDP growth
rates.
Given expected annual inflation of 5.8% in 2013 and 6.0% in 2014, despite sluggish economic growth (2.4% and 2.2% in 2013
and 2014, respectively), the Monetary Policy Committee (Copom) will have no choice but to maintain its trajectory of raising
the Selic to 10.0% by year-end. The major worry concerns the arduous task of pushing up the rate to 10.5% in the first half of
next year, thereby jeopardizing still weak GDP growth in the long term. Brazil’s fortune is that, despite the slow economic
recovery in the Eurozone and the USA and (still) robust growth in China and some important emerging economies, global GDP
is only likely to grow by 3.2% in average next year.
PINE
Business Performance
PINE is a wholesale bank focused on establishing and maintaining long-term relationships with 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.
Products and services complementary to credit remained with participation around 40% to overall revenue. This strengthens
the increasingly more efficient allocation of capital and value creation in all the Bank’s business lines.
9M12 9M13
Treasury
1.2%
Treasury Corporate poe
11.2% Credit
60.2% 63.3%
FICC
FICC 29.2%
17.6%
PINE PINE
Investimentos Investimentos
11.0% 6.3%
Financial Performance
Annualized Return on Average Equity (ROAE) reached 13.4% in the 3Q13, up 50 bps over 2013. Net Income reached R$40
million in the period, growth of 2.6% over 2Q13. PINE recorded Shareholders” Equity of R$1.3 billion in September 2013.
3Q13 2013 3Q12 EXE EXA
Earnings and Profitability
Net income (RS milion) 40 39 47 124 139
Annualized ROAE 13.4% 12.9% 17.7% 13.6% 17.0%
Annualized ROAAw’ 2.0% 2.1% 2.5% 2.0% 2.5%
Annualized financial margin before provision 5.7% 4.9% 6.0% 5.1% 6.9%
Annualized financial margin after provision 3.9% 3.3% 4.7% 3.8% 5.7%
Balance Sheet (R$ million)
Total assets 10,508 10,457 10,175 10,508 10,175
Expanded loan portfolio” 9,537 8,994 7,444 9,537 7,444
Risk weighted assets 8,386 7,845 7,745 8,386 7,745
Deposits* 3,477 3,581 3,655 3,477 3,655
Funding 7,894 7,111 6,804 7,894 6,804
Shareholders’ equity 1,264 1,259 1,216 1,264 1,216
Credit portfolio quality
Non performing loans – 90 days 0.1% 0.6% 0.4% 0.1% 0.4%
Credit coverage index 3.0% 3.4% 3.5% 3.0% 3.5%
Performance
BIS ratio 15.9% 17.0% 17.0% 15.9% 17.0%
Efficiency ratio 35.7% 38.1% 35.7% 37.0% 31.0%
Earnings per share* (RS) 0.37 0.35 0.48 1.14 1.41
Book value per share* (RS) 11.61 11.49 12.35 11.61 12.35
Market Cap* (RS) 1,089 1,315 1,447 1,089 1,447
“Risk weighted assets
? Includes Letters of Credit to be used, Bank Guarantees, Credit Securities to be Received and Private Securities (bonds, CRIs, euro bonds and fund shares)
* Includes Agribusiness and Real Estate Letters of Credit
*It considers 110,842,3B stocks for the 20% periods and 108,631,100 stocks for the 2012 periods, excluding shares hold in treasury
PINE
Financial Margin
In 3Q13, Income from Financial Intermediation before provisions for loan losses totaled R$108 million, 30% higher than 2Q13.
Net interest margin (NIM) before provisions stood at 5.7% in the quarter, 80 bps better Q0Q. The increase in margin was
driven by higher average balance of the loan portfolio during the quarter, and a marginal improvement of spreads across all
business lines. Additionally, NIM was positively affected by credit recoveries during the quarter.
RS milion
3Q13 2013 Ele xpA 9M13 EVA
Income from financial intermediation 108 83 112 292 368
Overhedge effect (1) 6 (0) 3 4
Income from financial intermediation desconsidering overhedge (A) 107 89 112 295 372
Provision for loan losses (34) (29) (24) (77) (65)
Income from financial intermediation after provision (B) 73 60 88 218 307
Average earning assets (C ) 7,693 7,356 7,572 7,749 7,224
Interbank Investments 770 640 501 638 464
Securities’ 1,517 1,499 2,163 1,952 2,008
Credit transactions 5,669 5,299 5,072 5,446 4,942
(-) FIDC senior shares (263) (82) (164) (287) (190)
Annualized Financial Margin before provision (%) (A/C) 5.7% 4.9% 6.0% 5.1% 6.9%
Annualized Financial Margin after provision (%) (B/C) 3.9% 3.3% 4.7% 3.8% 5.7%
Y Excludes repo transactions and the liability portion of derivatives
Fee Income
Fee income increased 10.0% QoQ. Credit related fees were also positively impacted by the rise in Bank Guarantees, over 80%
in 12 months. Revenues with this product increased over 40.0%, 9M13 vs 9M12. (Note 21 of the Financial Statements)
R$ million
Elo YE] 2013 3012 9M13 9M12
Credit related fees 26 22 10 68 38
PINE Investimentos fees 7 8 18 24 52
Total 33 30 28 92 90
Personnel and Administrative Expenses
In 9M13, total personnel and administrative expenses remained flat over 9M12, reflecting PINE”s tight cost control policies.
Other administrative expenses were primarily driven by legal expenses related to credit recoveries. In September, PINE had
401 employees.
R$ million
3Q13 2013 lex y] 9M13 9M12
Personnel expenses 23 22 22 67 66
Other administrative expenses 24 21 26 69 70
Subtotal 47 43 48 136 136
Efficiency Ratio
The efficiency ratio reached 35.7% in the quarter, 240 bps better than the one posted in the 2Q13. In the 9M13, the
efficiency ratio remained at adequate levels.
RS million
3Q13 2013 3Q12 9M13 9M12
Operating expenses * 51 47 53 147 149
(-) Non-recurring expenses 1 2 3 4 6
Recurring Operating Expenses (A) 50 45 50 143 143
Revenues ? (B) 140 118 140 387 462
Ratio (A/B) 35.7% 38.1% 35.7% 37.0% 31.0%
* Other administrative expenses +tax expenses +personnel expenses
2 Gross Income from financial intermediation – provision for loan losses +fee income +overhedge effect
PINE
Corporate Credit
The total expanded loan portfolio totaled R$9,537 million in September 30, 2013, representing increases of 6.0% QoQ and
28.1% YoY. Noteworthy that 90% of transactions originated in the quarter are rated between AA and B.
The highlights in the 9M13 were the 23.8% increase in BNDES Onlendings and the 80.9% rise in Bank Guarantees. The growth
of the latter was driven by PINE”s offering of BNDES Guarantees, which allowed the Bank to cater to a suppressed demand in
various sectors, mainly Electric and Renewable Energy, Infrastructure, and Sugar and Ethanol. The quality of origination was
key: 94% of Bank Guarantees were rated between AA and B.
The average maturity of the credit portfolio increased to 16 months, compared to 15 months in 2Q13.
R$ million
AE) ES EA YA Q0Q A
Working capital 3,935 3,717 3,274 5.9% 20.2%
BNDES Onlendings 990 844 800 17.3% 23.8%
Trade finance 1 965 1,059 942 -8.9% 2.4%
Bank guarantees 3,073 2,807 1,699 9.5% 80.9%
Loan Portfolio 8,963 8,427 6,714 6.4% 33.5%
Private securities 2 561 549 683 2.2% -17.9%
Loan Portfolio + Private securities 9,523 8,976 7,397 6.1% 28.7%
Individuals 3 13 18 47 -27.8% -72.3%
Expanded Loan Portfolio 9,537 8,994 7,444 6.0% 28.1%
Y Includes Standby LC
2 Includes debentures, CRIs, Hedge Fund Shares and Eurobonds
3 Loan portfolio with recourse acquired from financial institutions
Loan Portfolio Profile and Quality
PINE focused the portfolio increase in either matched fund or unfunded products. Even with the steady growth in the last 12
months, PINE”s leverage remains lower than its peers.
Important to point out the quality of the Guarantees” portfolio, which comprises over 70% of ¡ts transactions rated between
AA and A.
Loan Portfolio Breakdown
Sept-13 Sept-12
Individuals Individuals
e” 0.1% 0.6%
rivate Working Privat i
secure N capa e, tor
. . 9.2% 44.0%
Trade
finance Trade
10.1% finance
12.7%
Onlending
10.4% Onlendin
10.7%
Bank Bank
Guarantees Guarantees
32.2% 22.8%
PINE
Loan Quality and Provision for Loan Losses – Resolution 2682
3013
LAT)
, a
SN PTA de
COTO
MITO
AA – 881 881 15.1% –
A – 1,807 1,807 30.9% 9
B 0 2,300 2,300 39.3% 23
C 2 467 468 8.0% 14
D 0 198 198 3.4% 20
E 0 40 40 0.7% 12
F 0 66 66 1.1% 33
G 1 48 49 0.8% 35
H 8 36 44 0.8% 44
Total 1 5,844 5,855 100.0% 190
2013
TOS Vol yn
TO OO
COTO
AA 983 983 17.9%
A 1,574 1,574 28.7% 8
B 2,036 2,036 37.1% 20
C 2 517 519 9.5% 16
D 12 164 177 3.2% 18
E 0 39 39 0.7% 12
F 0 25 25 0.5% 12
G 0 49 49 0.9% 34
H 35 48 83 1.5% 83
Total 50 5,433 5,483 100.0% 203
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%
The coverage of the total loan portfolio ended the quarter at 3.0% and the coverage of the overdue portfolio was above
1,000%, higher than the historical average.
Loan Portfolio Coverage Ratios
Total Loan Portfolio Coverage
3.5% 3.3% 3.4% 3.4%
3.0%
Sept-12 Dec-12 Mar-13 Jun-13 Sept-13
*Coverage of Loan Portfolio: Provision/Portfolio without Bank Guarantees
and Standby LC
Portfolio by Risk Rating’
Sept-13
D-H
6.2% ho
93.8%
Overdue Portfolio Coverage
1,696%
487%
402% 379% 405%
Sept-12 Dec-12 Mar-13 Jun-13 Sept-13
*Coverage of Overdue Portfolio: Provision/Overdue Portfolio
Jun-13
AA-C
93.8%
On September 2013, the NPL ratio of installments overdue more than 15 days decreased to 0.2% from 0.8% in June 2013.
Considering the total contract, the ratio of more than 90 days decreased to 0.7% from 1.1% in June 2013.
PINE
Non-Performing Loans (Overdue Installments)’
Sep-13 Jun-13 Sep-12
More than 15 days 0.2% 0.8% 0.9%
More than 30 days 0.2% 0.8% 0.9%
More than 60 days 0.2% 0.7% 0.7%
More than 90 days 0.1% 0.6% 0.4%
More than 120 days 0.1% 0.6% 0.1%
More than 180 days 0.1% 0.3% 0.1%
Non-Performing Loans (Total Contract)’
Sep-13 AE EY
More than 15 days 0.9% 2.9% 2.6%
More than 30 days 0.9% 2.9% 2.3%
More than 60 days 0.7% 2.3% 2.1%
More than 90 days 0.7% 1.1% 0.8%
More than 120 days 0.4% 1.0% 0.3%
More than 180 days 0.3% 0.8% 0.2%
Y Includes debentures, CRIs, Hedge Fund, and Eurobonds and excludes Bank Guarantees and Standby LC.
Active Management of the Loan Portfolio
In 3Q13, PINE continued to diversify its loan portfolio to further strengthen the solidity of its balance sheet.
The portfolio of the 20 largest clients reshuffled by over 20%, for the fourth consecutive quarter since we started to disclose
this indicator – confirming the liquidity and flexibility of the Bank’s operations. The concentration of the 20 largest clients in
the total portfolio remains below 30%.
Sept-13 Sept-12
Retail Financial Construction Other
Telecom,
2%
Constructio! 2% Meatpacking oye Institutions_ Material 9%
Material 2% 6% 2% 2%
2%
S d Ethanol
Beverages and. / NO Chemicals Sugar and Ethanol
Tobacco 2%
2%
O
Food Industry,
sa Food Industry
Vehicles and Parts 7% Constructi e erase A
> ‘onstruction Beverages and, i
verages a Construction
3%
Vehicles and Parts
Foreign Trade.
4%
Chemicals,
% Metallurgy
4%
Telecom
4%
Electric and
Renewable Energy
%
AN Electric and
Renewable Energy
10%
SS agriculture
ii ñ transportation and Transportation an 9%
es Series Logistics Agriculture Logistics Infrastructure
5% 8% 6% 6%
Specialized Service:
4%
Metallurs
5% a Infrastructure
Foreign Trade
6%
FICC
PINE”s 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 its
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$11.1 billion, with an average duration of 119 days
at the end of September 2013. The increment in notional value was driven by greater demand and an increase in the number
of clients, considering a scenario of greater volatility.
PINE
Notional Amount and Counterparty Credit
Risk (MtM)
Notional value
MtM
== Stressed MtM
238
197 174
4,875 5,036 5,180 5,891 11,090
Sept-12 Dec-12 Mar-13 Jun-13 Sept-13
The R$530 million of counterparty risk exposure (Mark to Market) considers the net value of PINE”s payables and receivables.
Thus, in September 2013, PINE would receive from its counterparties R$590 million, and pay R$60 million. Noteworthy that
approximately 80% of receivables are from clients rated between AA-B.
Based on the stress test performed on the derivatives portfolio with clients amid an extremely negative scenario, with the
U.S. dollar strengthening by 31% against the Brazilian Real to R$2.91/US$ and commodity prices declining by 30%, the
potential Mark to Market in the portfolio would have been R$195 million payable. In this scenario, PINE would have to receive
RS$743 million from its clients, and would have to pay R$939 million.
Additionally, PINE hedges the portfolio in Exchanges and with Bank counterparties, with daily MtM settlement. This, coupled
with the portfolios” short duration, assures the maintenance of liquidity levels according to policy.
According to the ranking compiled by CETIP – OTC Clearing House published in September 2013, PINE moved up four positions
and was ranked among the 12 largest players in derivative transactions for clients and the second largest player in
commodity derivatives.
Clients MtM Derivatives by Market – 3Q13 Derivatives MtM by Sector – 3Q13
Electric and Renewable Other
Energy 2%
Currencies 2%
73% Infrastructure
3%
Metallurgy
4%
Pulp and Paper
24%
Foreign Trade
5%
. Agriculture
Transportation and 13%
Logistics
7%
Rates
21% Food Industry
9%
Meatpacking
11%
Commodities
Sugar and Ethanol
o Construction
11%
PINE Investimentos
PINE Investimentos, the Bank’s Investment Banking unit, works closely with its clients to offer customized and unique
solutions in the Capital Markets, Financial Advisory, and Project €: Structured Finance areas. In the 9M13, PINE Investimentos
led and structured R$1.7 billion in fixed income transactions.
PINE was ranked 16* in fixed income origination by financial volume, according to the Brazilian Financial and Capital Markets
Association (Anbima), as of September 2013. Considering the last twelve months, PINE holds the 14′ position.
PINE
During 2013, in its first year of operation, PINE Securities has already executed two mandates: Aralco and Marfrig, in the
amount of US$250 million and US$400 million, respectively.
Funding
Funding totaled R$7,894 million in September 2013, growth of 11.0% QoQ and of 16.0% YoY. The weighted average term of
deposits remained 10 months, while the weighted average term of all funding transactions reached 18 months, compared
with 17 months in 2Q13.
At the end of 3Q13, PINE concluded a syndicated loan with a two-year term in the amount of US$100 million, and raised
R$571.4 million through a FIDC structure focused on the agribusiness sector, with a five-year term. Cash position stood at
RS1.3 billion, equivalent to 39% of time deposits.
In the international arena, PINE”s base of correspondent banks improved to around 70 institutions, including banks in various
countries, development banks, including DEG and Proparco, and multilateral agencies, including the IFC, IDB and FMO.
Local Funding
Demand deposits
Interbank deposits
Time deposits + LCA + LCI
Individuals
Companies
Institutionals
Capital Markets
Onlendings + Trade Finance
BNDES Onlendings
Trade finance
International Funding
Capital Markets
Multilaterals
Other private placements and syndicated
loans
Total
Sep-13
4,888
20
93
3,364
113
1,048
2,203
1,411
2,072
1,099
973
935
437
69
429
7,894
Es
4,556
19
110
3,452
119
1,013
2,320
975
1,859
862
997
696
435
80
181
7,111
1,073
596
260
156
180
6,804
[ole]
7.3%
5.3%
-15.5%
-2.5%
-5.0%
3.5%
-5.0%
44.7%
11.5%
27.5%
-2.4%
34.3%
0.2%
-13.8%
137.0%
11.0%
R$ million
AOS
13.8%
-39.4%
-47.2%
-2.4%
-46.9%
-11.0%
7.1%
120.5%
8.4%
30.8%
-9.3%
56.9%
68.1%
-55.8%
138.3%
16.0%
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 16 months, the funding
period is 18 months, ensuring a comfortable situation for the Bank. This positive liquidity gap has been maintained for over 3
years.
Mi Credit Funding
3,360
3,014 3,021
2,299
1,703
1,182
867
228 318
: 20 _ . Ml a
No maturity Upto 3
months
(includes
Cash)
From3to 12 From1to3 From3to5 More than 5
months
years
years
years
10
Capital Structure
The BIS ratio reached 15.9% in the quarter, well above the minimum requirement (11%).
R$ milion
AE AE E YA
Reference Equity 1,476 1,472 1,466
Tier | 1,276 1,273 1,210
Tier | – BIS Ratio % 13.7% 14.7% 14.0%
Tier Il 200 199 257
Tier 11 – BIS Ratio % 2.2% 2.3% 3.0%
Required Reference Equity 1,024 954 948
Credit Risk 922 863 852
Market Risk 84 84 87
Operational Risk 18 8 9
Excess of Reference Equity 452 518 518
BIS Ratio – % 15.9% 17.0% 17.0%
PINE
11
PINE
About PINE
PINE is a wholesale bank focused on long-term relationships with corporate clients 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
€: Structured Finance.
Corporate Governance
PINE has active corporate governance policies, given its permanent commitment to shareholders and other stakeholders. In
addition to integrating Level 2 of Corporate Governance of the BMEFBOVESPA, 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 results in two accounting standards: BR GAAP and IFRS
Y” Compensation and Audit committees, which report directly to the Board of Directors
PINE4
In accordance with its buyback program and pursuant to the Central Bank Resolution 3,921, PINE repurchased 1,062,459 of its
own shares during the 3Q13, which are currently held in treasury. At the end of the quarter, a total of 1,918,045 shares were
held in treasury.
As of September 30″, 2013
ON Preferred ART %
Controlling Shareholder 58,444,889 15,410,863 73,855,752 66.6%
Management – 6,435,438 6,435,438 5.8%
Free Float – 28,633,078 28,633,078 25.8%
Individuals – 2,736,737 2,736,737
Local Institutional Investors – 12,707,626 12,707,626
Foreign Investors – 6,296,043 6,296,043
DEG – 5,005,067 5,005,067
Proparco – 1,887,605 1,887,605
Subtotal 58,444,889 50,479,379 108,924,268 98.3%
Treasury – 1,918,045 1,918,045 1.7%
Total 58,444,889 52,397,424 110,842,313 100.0%
On November 1%, an Extraordinary Shareholders Meeting approved the proposed capital increase through the capitalization of
legal and statutory reserves in the amount of R$145 million. These reserves will be converted into shares. Accordingly, PINE
will issue 12,770,443 new shares: 6,733,594 common shares and 6,036,849 preferred shares, which will be distributed to
shareholders as stock bonus in the proportion of 11.521270762367 new bonus shares to each lot of 100 shares.
Interest on Own Capital and Dividends
In September 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$15.6 million represents interest on own capital and R$14.4 million, dividends.
This payment will be added to the minimum mandatory dividends related to the 2013 fiscal year. Based on PINE’s shares
average price in the quarter (R$10.15) and the proceeds paid over the past four quarters, PINE4 has a dividend yield of
10.9%.
Ratings
On September 13%, Moody’s upgraded PINE’s ratings. The Bank is now only one notch from Global Investment Grade by the
three international agencies: Moody’s, Fitch and S€P. The agency attributed this upgrade to the stability of financial
indicators, and specifically the asset quality, profitability and capitalization, as a result of revenue diversification.
STANDARD – FitchRatings Moodys.com RISKbank
¿POOR’S e
hi] Long Term BB+ BB+ Bal
59
DE Short Term B B
538
35 Long Term B8+ BB+ Bal
5 [5]
5 Short Term B B
El Long Term brAA AA-(bra) Aa2.br
= 10.78
ña
4 Short Term Fi+(bra) Br-1
12
Balance Sheet
RS million
Sep-13 Jun-13 Epa Q0Q YoY
Assets 10,508 10,457 10,175 0.5% 3.3%
Cash 281 120 169 134.2% 66.3%
Interbank investments 870 669 431 30.0% 101.9%
Securities 2,627 2,977 3,900 -11.8% -32.6%
Interbank accounts 6 1 3 500.0% 100.0%
Lending operations 5,855 5,483 4,905 6.8% 19.4%
(-) Provisions for loan losses (190) (203) (196) -6.4% -3.1%
Net lending operations 5,665 5,280 4,708 7.3% 20.3%
Other receivables 957 1,316 932 -27.3% 2.7%
Property and equipments 101 94 31 7.4% 225.8%
Investments 73 66 – 10.6% 100.0%
Property and equipment in use 26 27 29 -3.7% -10.3%
Intangible 2 2 2 – –
Liabilities 9,243 9,198 8,959 0.5% 3.2%
Deposits 2,924 3,236 3,212 -9.6% -9.0%
Money market funding 829 1,245 1,602 -33.4% -48.3%
Funds from acceptance and securities issued 1,505 1,230 994 22.4% 51.4%
Interbank and Interbranch accounts 34 17 12 100.0% 183.3%
Borrowings and onlendings 2,933 2,090 2,414 40.3% 21.5%
Derivative financial instruments 221 274 107 -19.3% 106.5%
Other liabilities 727 1,046 570 -30.5% 27.5%
Deferred Results 70 60 48 16.7% 45.8%
Shareholders’ equity 1,264 1,259 1,216 0.4% 3.9%
Liabilities and shareholders’ equity 10,508 10,457 10,175 0.5% 3.3%
PINE
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PINE
Income Statement
RS million
EE] 2013 Ely] 9M13 9M1
Income from financial intermediation 298 341 265 871 985
Lending transactions 154 140 137 405 432
Securities transactions 71 71 84 200 363
Derivative financial instruments 33 48 28 142 58
Foreign exchange transactions 40 82 17 124 132
Expenses with financial intermediation (224) (288) (177) (656) (682)
Funding transactions (146) (175) (122) (439) (480)
Borrowings and onlendings (44) (84) (31) (140) (137)
Provision for loan losses (34) (29) (24) (77) (65)
Gross income from financial intermediation 74 53 88 215 303
Other operating (expenses) income (13) (18) (24) (50) (94)
Fee income 33 30 28 92 90
Personnel expenses (23) (22) (22) (67) (66)
Other administrative expenses (24) (21) (27) (69) (70)
Tax expenses (4) (4) (4) (11) (13)
Other operating income 6 5 13 21 45
Other operating expenses (1) (6) (12) (16) (80)
Operating income 60 35 64 165 209
Non-operating income 2 3 – 7 5
Income before taxes and profit sharing 62 38 64 172 213
Income tax and social contribution (11) 8 (14) (22) (41)
Profit sharing (11) (7) (4) (26) (33)
Net income 40 39 47 124 139
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.
14
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