PINE
Av. das Nacóes Unidas 8.501/ 30% andar, Sáo Paulo, SP PINE
BMáFBovespa: PINE4
www.pine.com/ ir
Earnings Realease – 2013 (BR GAAP)
Dear shareholders,
2013 witnessed another year of important achievements and recurrence in all business lines even in an adverse scenario. Once more
the bank’s strategy proved to be adequate and was recognized by international agencies, which upgraded our ratings throughout the
year. It has been many years of solidly grounded strategy, with continuous investments in the Bank’s product portfolio and human
capital. With that, we highlight our key achievements:
Shareholders’ Equity Total Loan Portifolio Total Funding Net Income ROAE
4.0% 24.9%, 18.7% -380 bps
> – 7 13.4%
16.8%
13.0%
1,220 1,272 7,948 9,930 7,062 8,383 187
162
Dec-12 Dec-13 Dec-12 Dec-13 Dec-12 Dec-13 2012 2013 2012 2013
l Includes Standby LC, Bank Guarantees, Credit Securities to be Received and Private Securities (bonds, CRIs, eurobonds and fund shares)
Fundamentals
Positive contributions from all business lines in 2013: 62.9% from Corporate Credit, 27.9% from FICC, 5.5% from Pine
Investimentos, and 3.7%from Treasury.
Upgrade of Pine’s global scale ratings by Fitch and Moody’s. The Bank is now only one notch from Global Investment Grade
according to the three international agencies: Moody’s, Fitch and SSP.
Maintenance of positive liquidity gap over the past years.
Liquid balance sheet, fueled by higher funding, which increased the level of cash.
In April, the Brazilian Central Bank approved the second phase of the capital increase made by DEG, Proparco, controlling and
minority shareholders in approximately R$170 million, announced on the second semester of 2012.
Funding
R$571.4 million through a FIDC structure, with a five-year term.
US$100 million from a syndicated loan, with a two-year term.
US$20 million through a Senior Unsecured Term Loan transaction, with a ten-year term.
US$50 million through Pine’s 3″ Islamic format issuance, with a one-year term.
Business
Sector allocations are based on those sectors in which the economic activity has grown above GDP or sectors in which
development and investments are needed, such as Agribusiness and Infrastructure.
Loan portfolio quality improvement.
Increase in FICC’s share of the revenue mix, due to larger number of clients and greater market volatility. The number of
clients evolved 40% totaling approximately 200.
Pine moved up three positions in the derivative ranking of CETIP – OTC Clearing House, being ranked the 12’” largest bank in
derivative transactions, and maintained ¡ts 2″* in the commodity derivatives segment.
Consolidation of Pine Investimentos’ strategy, with a highlight to Pine Securities, which in its first year of operations executed
three mandates for clients in different sectors, with a total volume of US$900 million.
We are proud of our recognitions and achievements in 2013 and began 2014 confident in our business model. We have all the
necessary pillars (capital, liquidity, funding and human resources) to continue to expand our franchise maintaining the appropriate
balance between risk and return. We will continue to invest in the full coverage of our clients and in our team, increasing the
portfolio of products and services and maintaining very close relationships with each one of them.
Executive Committee
Investor Relations +55 11 3372-5343 | Raquel Varela
Alejandra Hidalgo
Luiz Maximo
Ana Carolina Lopes
A PINE
Macroeconomic Scenario
Monetary policy, both domestic and external, remained the main market driver in 4Q13. For a good part of last year, the
behavior of the global markets was largely conducted by the Federal Reserve, under the baton of activity figures, inflation
and prospects of the normalization of the Fed Funds rate in the coming months. In Brazil, the consequent depreciation of the
real, among other factors, ensured that inflation put up greater resistance and that the Central Bank extended its dollar sale
program until mid-2014, as well as determining the rupture of the supposed less-than-two-digit Selic paradigm.
The postponement of the tapering until the end of 3013 alleviated somewhat the deterioration of the interest/ exchange rate
combination in the emerging countries at the beginning of the fourth quarter. In the wake of the reduction in 10-year
Treasury yields, the real appreciated to 2.19/US$ in October, close to its lowest level since the Fed changed ¡ts tone.
However, greater optimism regarding the U.S. recovery, which culminated in the slowing of Quantitative Easing 3 at the
FOMC meeting in December, taking market analysts by surprise, was sufficient to exacerbate the country risk of several
important economies and push up the dollar against the currency basket. In particular, Brazil’s 5-year CDS spread widened
from 160 basis points in October to 190 at year-end, while the real averaged 2.35/US$ in December, the highest monthly
average since the 2008 crisis.
The outlook for the U.S. economy will continue to impose challenges for the emerging nations, including Brazil.
Developments in the United States in the second half of 2013, and especially in the fourth quarter, underscored the
acceleration of growth. Firstly, period GDP growth outpaced the long-term growth rate estimated by the Fed, suggesting
further reductions in the unemployment rate in the near future. In addition, there has been a not inconsiderable impact on
wealth from the upturn in the equities market and more interestingly, from the increase in real estate prices: while the SEP
500 repeated its historical highs, the S€P/Case-Shiller residential property price index reached ¡ts highest level since the
epicenter of the subprime crisis. Finally, there is expected to be less GDP leakage due to the fiscal approach in 2014, both
through the recently reached budgetary agreements and the apparent reduction in the political polarization. In such a
scenario, assets in dollars will become increasingly attractive to the detriment of domestic and real-denominated external
assets. In fact, Brazil recorded net financial outflow of US$14 billion in 4Q13, accounting for more than half of total outflow
in the full year.
The context described above determined and will continue to determine the oscillation pace and volatility of the real;
Brazilian prospects of low economic growth, persistent consumer inflation and a high current account deficit, all of which
generated by full employment, are aggravating the challenges imposed by the international scenario. A well-known aspect of
the Brazilian economy is the relation between foreign exchange volatility and its malign influence on business confidence.
Once again, we witnessed ¡ts impact on 3Q13 GDP, which fell by 0.5% over the previous quarter. Nevertheless, few
uncertainties were resolved in the fourth quarter, which should result in slight period growth, consistent with an annual
expansion of close to 2.2% Unfortunately, according to our projections, Brazil is only likely to record real GDP growth of
between 1.7% and 2.0% in 2014, only slightly above potential annual growth, which we currently estimate at 1.7% Part of
this reflects full employment and the growing inefficiencies in the job market, which are resulting in total factor productivity
growth of only 0.7% per year, a decline in corporate operating results and, consequently, a gross investment/GDP ratio of
less than 20%
As a result of all this, consumer inflation reflected and will continue to reflect the negative consequences of increased
exchange volatility, leading to potential price shocks to the IPCA, keeping it close to 6.0%in 2014. This became apparent in
the final 2013 numbers through the monthly variation in the IPCA, which was 0.68% the largest period average since 2010.
Consequently, annual consumer inflation of 5.9% higher than in 2012, forced the Central Bank to maintain the upward pace
of the Selic at 50 basis points, thereby raising it to 10.0%per year. The Monetary Policy Committee”s biggest worry lies in the
arduous task of maintaining a consistent deceleration of the Selic in the near future, implying a rate of around 11.5%in 2014,
even at the cost of a paltry 2.0%of real economic growth in yet another year of difficulties.
PINE
Sáo Paulo, February 17, 2014 – Pine (BMS:.FBOVESPA: PINE4), a wholesale bank focused on establishing and maintaining long-term
relationships with corporate clients and investors, announces today its consolidated results of 2013, presented in BR GAAP.
Business Performance
Pine is a wholesale bank focused on establishing and maintaining long-term relationships with corporate clients and
investors. Its strategy is based on knowing its clients well and understanding their businesses and potential in order to build
customized and alternatives financial solutions. 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 continued to contribute around 40% of total revenue, strengthening the
increasingly efficient allocation of capital and value creation in all the Bank’s business lines.
012 2013
Treasury
Treasury 3.7%
10.2%
Corporate Corporate
Credit Credit
62.8% 62.9%
FICC FICC
16.7% 27.9%
PINE
Investimentos PINE
10.3% Investimentos
5.5%
Financial Performance
Annualized Return on Average Equity (ROAE) closed 2013 at 13.0% while net Income totaled R$162 million and Shareholders’
Equity came to R$1.3 billion in December 2013.
q 3013 EA ENE En]
Earnings and Profitability
Net income (R$ million) 37 40 48 162 187
Annualized ROAE 12.2% 13.4% 16.8% 13.0% 16.8%
Annualized ROAAw! 1.7% 2.0% 2.4% 1.9% 2.5%
Annualized financial margin before provision 4.0% 5.1% 5.0% 4.1% 6.3%
Annualized financial margin after provision 2.8% 3.9% 3.9% 3.4% 5.1%
Balance Sheet (R$ million)
Total assets 10,545 10,508 10,406 10,545 10,406
Expanded loan portfolio? 9,930 9,537 7,948 9,930 7,948
Risk weighted assets 9,312 8,386 8,179 9,312 8,179
Deposits* 3,875 3,477 3,716 3,875 3,716
Funding 8,383 7,894 7,062 8,383 7,062
Shareholders’ equity 1,272 1,264 1,220 1,272 1,220
Credit portfolio quality
Non performing loans – 90 days 0.1% 0.1% 0.6% 0.1% 0.6%
Credit coverage index 2.1% 3.0% 3.3% 2.7% 3.3%
Performance
BISratio 14.1% 15.9% 16.2% 14.1% 16.2%
Efficiency ratio 51.9% 35.1% 39.3% 39.8% 32.8%
Earnings per share* (R$) 0.34 0.37 0.45 1.48 1.74
Book value per share* (R$) 11.68 11.61 11.33 11.68 11.33
Market Cap* (R$) 1,147 1,089 1,615 1,147 1,615
“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)
% Includes Agribusiness and Real Estate Letters of Credit
41t considers 108,924,268 stocks for the 2013 periods and 107,636,260 stocks for the 2012 periods
Note: after stock bonus process held on January 1, 2014, the book value would be R$0.47
PINE
Financial Margin
In 2013, Income from Financial Intermediation before provisions for loan losses totaled R$377 million. The net interest
margin (NIM) before provisions stood at 4.7%in the year, within the guidance range of 4.5%6.5% The margin’s performance
throughout 2013 reflected the decline in the average Selic benchmark interest rate, which affected returns on cash
investments; the weak Treasury performance due to a reduction in risk taking; lower spreads; and, the expansion of the loan
portfolio with a mix that favored unfunded products.
In 4013, Income from Financial Intermediation before provisions for loan losses reached R$81 million, with net interest
margin (NIM) before provisions of 4.0% The change in margin, compared to the previous quarter, was a result of two factors.
The first is the rise in the volume of funding made at the end of the period without proper allocation to earnings assets,
which raised cash position to R$1.5 billion. Considering a cash position of 30% of deposits the margin would benefit from 40
bps.
The second factor is the significant growth in the loan portfolio at the end of December, thus, not reflecting the total of ¡ts
revenues in the quarter. This impact would represent 10 bps in the margin.
R$ million
4013 3013 El pP] 2013 pla
Income fromfinancial intermediation 78 108 93 3711 459
Overhedge effect 3 (1) (1) 6 3
Income fromfinancial intermediation desconsidering overhedge (A) 8l 107 92 3717 462
Provision for loan losses (24) (34) (19) (101) (83)
Income fromfinancial intermediation after provision (B) 57 73 73 276 379
Average earning assets (C ) 8,128 7,693 7,515 8,031 7,361
Interbank Investments 769 710 418 537 451
Securities! 1,696 1,517 2,260 2,072 2,075
Credit transactions 6,119 5,669 4,972 5,710 5,009
(-) FIDC senior shares (456) (263) (135) (288) (174)
Annualized Financial Margin before provision (%) (A/C) 4.0% 5.7% 5.0% 4.1% 6.3%
Annualized Financial Margin after provision (%) (B/C) 2.8% 3.9% 3.9% 3.4% 5.1%
1 Excludes repo transactions and the liability portion of derivatives
Fee Income
Fee income remained stable over the previous year. The approximately 40% upturn in the balance of Bank Guarantees offset
lower revenue generation from Pine Investimentos, resulting from a less favorable market scenario. Pine Investimentos’
mandate pipeline remains robust.
R$ million
4013 3Q13 e L0Yv] p11E] 2012
Bank 23 26 21 91 59
PINE Investimentos 2 7 9 27 61
Total 25 33 30 118 120
Personnel and Administrative Expenses
In 2013, personnel and administrative expenses moved up by 3.3% below the 5%10%guidance range, underlining the Bank’s
rigorous expense controls. Pine’s headcount closed the year at 408.
R$ million
4013 3013 Eloy P] PLE) 2012
Personnel expenses 25 23 23 92 89
Other administrative expenses 25 24 22 95 92
Subtotal 50 47 45 187 181
Efficiency Ratio
The efficiency ratio stood at 39.8%at the end of 2013. In the quarter, the ratio was 51.9% as a result of the same atypical
effects demonstrated in the Financial Margin section together with a less favorable market, which limited revenue
generation by Pine Investimentos.
PINE
For 2014, we estimate an efficiency ratio level similar to the one in 2013.
R$ million
4013 3013 eloxx, 2013 2012
Operating expenses * 56 51 49 203 198
(-) Non-recurring expenses 1 1 1 6 7
Recurring Operating Expenses (A) 55 50 48 197 191
Revenues ? (B) 106 140 122 495 582
Ratio (A/B) 51.9% 35.7% 39.3% 39.8% 32.8%
l Other administrative expenses +tax expenses + personnel expenses
? Gross Income fromfinancial intermediation – provision for loan losses +fee income +overhedge effect
Corporate Credit
The expanded loan portfolio totaled R$9,930 million on December 31, 2013, up 24.9% in 12 months. The Working Capital
portfolio, combined with the Private Securities and Credit Notes Receivable portfolio, which have similar characteristics,
grew by 21.5% YoY. The average term of the credit portfolio stood at 15 months.
Thanks to its comfortable capitalization and relatively low leverage in 2013, the Bank was able to keep pace with the growth
in demand for several credit products. Working Capital transactions and BNDES Onlendings recorded moderate growth
throughout the year and became stronger at the end of 4Q13. In parallel, Pine’s offering of BNDES Guarantees allowed the
Bank to cater to a suppressed demand in various sectors, especially Electric and Renewable Energy, Infrastructure, and Sugar
and Ethanol. In 2013, approximately 90% of origination was related to operations rated between AA and B, with significant
levels of real guarantees.
R$ million
Dec-13 Sept-13 Dec -12 Q0Q DS
Working capital? 5,060 4,495 4,164 12.6% 21.5%
BNDES Onlendings 1,108 990 853 11.9% 29.9%
Trade finance ? 843 965 781 -12.6% 7.9%
Bank guarantees 2,909 3,073 2,114 -5.3% 37.6%
Loan Portfolio 9,920 9,523 7,912 4.2% 25.4%
Individuals * 10 13 36 -23.1% -72.2%
Expanded Loan Portfolio 9,930 9,537 7,948 4.1% 24.9%
“includes debentures, CRIs, Hedge Fund Shares and Eurobonds
? Includes Stand by LC
3Loan portfolio with recourse acquired from financial institutions
Loan Portfolio Profile and Quality
Loan Portfolio Breakdown
Dec-13 Dec-12
Working Working
Capital + Capital +
Securities Securities
51.0% 52.4%
Individuals Individuals
0.1% 0.5%
finance frade
finance
8.4% 9.8%
BNDES
Onlendings BNDES
11.2% Onlendings
Bank 10.7% Bank
Guarantees Guarantees
29.3% 26.6%
Loan Quality and Provision for Loan Losses – Resolution 2682
4013 3013
A e TT Rating Overdue To Expire E TO
AA 1,007 1,007 15.8% AA 881 881 15.1%
A 2,089 2,089 32.1% 10 A 1,807 1,807 30.9% 9
B 0 2,347 2,348 36.8% 23 B 0 2,300 2,300 39.3% 23
Cc 31 540 570 8.9% 17 Cc 2 467 468 8.0% 14
D 0 194 194 3.0% 19 D 0 198 198 3.4% 20
E 1 43 44 0.7% 13 E 0 40 40 0.7% 12
F 0 25 25 0.4% 12 F 0 66 66 1.1% 33
G 0 50 50 0.8% 35 G 1 48 49 0.8% 35
H 3 52 55 0.9% 55 H 8 36 44 0.8% 44
Total 35 6,347 6,382 100.0% 186 Total u 5,844 5,855 100.0% 190
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%
Loan Portfolio Coverage Ratios
Total Loan Portfolio Coverage
0, 3.4% 3.4%
3.3% 3.0%
2.7%
Dec-12 Mar-13 Jun-13 Sept-13 Dec-13
*Coverage of Loan Portfolio: Provision/ Portfolio without Bank Guarantees
and Stand by LC
Portfolio by Risk Rating!
;
D-H
5.3%
AA-C
94.7:
487%
Overdue Portfolio Coverage
1,696%
379% 405%
PINE
532%
Dec-12
Mar-13 Jun-13 Sept-13
*Coverage of Overdue Portfolio: Provision/ Overdue Portfolio
D-H
6.2%
Sept-13
AA-C
93.8%
Dec-13
The quality of the loan portfolio is one of Pine’s pillars. In the second half, the ratio of overdue installments posted an
improvement. Thus, at year-end, the ratio of installments overdue by more than 90 days dropped to 0.1% versus 0.6% in
December 2012. Considering total loan contracts, the ratio of installments overdue by more than 90 days fell from 1.2% to
0.1%in the same period.
Non-Performing Loans (Overdue Installments)*
1E] Sept-13 Dec
More than 15 days 0.5% 0.2% 0.7%
More than 30 days 0.1% 0.2% 0.7%
More than 60 days 0.1% 0.2% 0.6%
More than 90 days 0.1% 0.1% 0.6%
More than 120 days 0.1% 0.1% 0.6%
More than 180 days 0.1% 0.1% 0.4%
PINE
Non-Performing Loans (Total Contract)’
Dec -13 Sept-13 TIP]
More than 15 days 0.6% 0.9% 1.5%
More than 30 days 0.2% 0.9% 1.5%
More than 60 days 0.2% 0.7% 1.3%
More than 90 days 0.1% 0.7% 1.2%
More than 120 days 0.1% 0.4% 1.1%
More than 180 days 0.1% 0.3% 0.5%
Includes debentures, CRs, Hedge Fund, and Eurobonds and excludes Bank Guarantees and Stand by LC.
Active Management of the Loan Portfolio
Pine continued to diversify ¡ts loan portfolio throughout 2013, seeking to further increase the solidity of ¡ts balance sheet. It
is particularly worth mentioning the rebalancing of sectors, with a significant relative increase in the Infrastructure and
Construction industries.
Over the last 12 months, the composition of the portfolio of the 20 largest clients changed by approximately 25%
demonstrating the liquidity and flexibility of the Bank’s operations. The total portfolio share of the 20 largest clients
remained below 30%
2013 2012
sel Meatpacking
tetal 2% Other Meatpacking
2% De Other
9%
Food Industry
Sugar and Etanol
2% a
Construction Material
2%
Sugar and Etanol
Construction Material
Financial Institutions
2%
Telecom
2%
Beverages and Tobacco
2%
Chemicals
2%
Metals and Mining
2%
Chemicals.
3%
Foreign Trade
EN Construction
10%
Electricand Renewable
Energy
13%
Telecom. Vehiclesand Parts
4%
FoodIndustry
Vehicles and Parts se
Foreign Trade
Electric and Renewable merallurey
4%
Specialized Services,
5%
Transportation
“and Logistics
e Infrastructure
9%
Specialized Services,
4%
Agriculture
Transportation andl – infrastructure 9%
Logistics 7%
5%
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 its clients
the main derivative instruments, which include non-deliverable forwards (NDFs), swaps and some options-based structures.
On December 31, 2013, the total notional value of the derivatives portfolio for clients was R$11.1 billion, with an average
duration of 183 days. In 4Q13, demand from clients remained high, following the upward trend begun in 3Q13, due to a
scenario of greater volatility as well as the 40%increase in the number of clients.
Client Notional Derivatives by Market – 4013 Notional Amount and Counterparty Credit Risk (MtM)
Notional value:
– un
Currencies Tm Stressed MM
83% 498
e
> 298 298
e a a
327
248
197 174 N
Fixed 1 y
ixed Income 0]
Eo -_ 60
A 5,036 5,180 5,891 11,090 11,148
Commodities
8% Dec-12 Mar-13 J un-13 Sept-13 Dec-13
A PINE
The R$327 million of counterparty risk exposure (Mark to Market) considers the net value of Pine’s payables and receivables.
Thus, in December 2013, Pine would receive R$415 million from its counterparties and pay R$88 million. It is worth
emphasizing that approximately 80%of amounts receivable are rated between AA and B.
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$3.10/USD, and commodity prices falling by 30%
the potential Mark to Market in the portfolio would have been R$310 million payable.
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 in December 2013, Pine was ranked the twelfth largest
player in derivative transactions for clients and the second largest in commodity derivatives.
Pine Investimentos
Pine Investimentos, the Bank’s Investment Banking unit, works closely with ¡ts clients to offer customized and unique
solutions in the Capital Market, Financial Advisory, and Project € Structured Finance areas.
In the domestic market, Pine Investimentos participated in the structuring of R$2.1 billion in fixed income transactions. In
the international market, Pine Securities in its first year of operations executed three mandates for clients in different
sectors totaling US$900 million.
Funding
Total funding reached R$8,383 million in December 2013, 6.2% up from 3Q13 and 18.7% YoY. The volume of time deposits
increased by 5.5% in the year, while onlendings grew 27% The weighted average term of funding transactions reached 17
months.
2013 was another successful year for Pine’s strategy of diversifying its funding sources. As a result, the Bank was able to
access both the domestic market, through a FIDC structure totaling R$571.4 million over five-years term, and the
international market, through the following operations: a syndicated loan of US$100 million, with a two-year term, and a
Senior Unsecured Term Loan transaction in the amount of US$20 million, with a ten-year term, with a focus on financing
agribusiness, renewable energy and energy efficiency. In 4Q13, Pine carried out ¡ts 3% Islamic format issuance. The amount
increased by 33%to US$50 million, with a one-year term.
In the international arena, Pine expanded its base of correspondent banks to around 70 institutions, including banks in
various countries, development banks such as DEG and Proparco, and multilateral agencies, including the IFC, IDB, and FMO.
R$ million
DO Sept-13 Dec-12 Eu 3
Local Funding 5,299 4,888 4,617 8.4% 14.8%
Demand deposits 23 20 30 15.0% -23.3%
Interbank deposits 90 93 121 -3.2% -25.6%
Time deposits +LCA +LCI 3,762 3,364 3,565 11.8% 5.5%
Individuals 139 113 146 23.0% -4.8%
Companies 1112 1,048 1,1174 6.1% -5.3%
Institutionals 2,511 2,203 2,245 14.0% 11.8%
Capital Markets 1,424 1,411 901 0.9% 58.0%
Onlendings +Trade Finance 2,012 2,072 1711 -2.9% 17.6%
BNDES Onlendings 1,147 1,099 903 4.4% 27.0%
Trade finance 866 973 808 -11.0% 1.2%
International Funding 1,072 935 734 14.7% 46.0%
Capital Markets 459 437 409 5.0% 12.2%
Multilaterals 113 69 152 63.8% -25.1%
Other private placements and syndicated
loans 500 429 173 16.6% 189.0%
Total 8,383 7,894 7,062 6.2% 18.7%
PINE
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.
R$ million
3,045 3,079
2,592 ÍCredit
2,2112.281 Funding
1,979
714
520
307
2 A e
e
No maturity- Upto3 From3to12 Fromlto3 From3to5 Morethan5
months months years years years
(includes
Cash)
Capital Structure
The capital adequacy ratio (BIS) ratio stood at 14.1% and with 12.0% as Tier | in the quarter, well above the minimum
requirement of 11% The lower ratio is due to the growth of the loan portfolio and the amendment made to the weighting of
risk-weighted assets for exposures to corporate companies, which changed from 75%to 85% (Circular No. 3,679, of October
31, 2013). In addition, the Reference Equity was also impacted by prudential adjustments.
R$ million
55 Sept-13 5
Reference Equity 1,442 1,476 1,477
Tier! 1,220 1,276 1,220
Tier | – BISRatio % 12.0% 13.7% 13.4%
Tier Il 222 200 257
Tier 11 – BIS Ratio % 2.1% 2.2% 2.8%
Required Reference Equity 928 1,024 1,004
Credit Risk 847 922 900
Market Risk 66 84 95
Operational Risk 15 18 9
Excess of Reference Equity 514 452 473
BIS Ratio – % 14.1% 15.9% 16.2%
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
8. Structured Finance.
According to Melhores e Maiores ranking compiled by Exame magazine, based on the balance sheet of 2012, Pine went up
five positions in the ranking of the largest banks by equity and today holds the thirtieth position, and considering Brazilian
controlled private owned banks, Pine occupies the thirteenth place. Also according to the ranking, Pine is among the fifteen
largest banks offering credit to large companies, being the sixth Brazilian controlled private owned bank.
Corporate Governance
Pine has active corporate governance policies, given ¡ts permanent commitment to shareholders and other stakeholders. In
addition to integrating Level 2 of Corporate Governance of the BM€FBOVESPA, Pine’s practices include:
+ Twoindependent members and one external member to the Board of Directors
+. 100%tag-along rights for all shares, including preferred shares
+ Adoption of arbitration procedures for rapid settlement of disputes
+ Quarterly disclosure of earnings results in two accounting standards: BR GAAP and IFRS
+ Compensation and Audit committees, which report directly to the Board of Directors
PINE4
As of December 31*, 2013
TS LIO) ul y
Controlling Shareholder 58,444,889 15,410,863 73,855,752 66.6%
Management – 6,333,605 6,333,605 5.1%
Free Float – 28,734,911 28,734,911 25.9%
Individuals – 3,321,748 3,321,748 3.0%
Local Institutional Investors – 12,705,969 12,705,969 11.5%
Foreign Investors – 5,814,522 5,814,522 5.2%
DEG – 5,005,067 5,005,067 4.5%
Proparco – 1,887,605 1,887,605 1.7%
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%
After stock bonus process approved at the EGM on November 1, 2013, and effective on January 7, 2014, the current total
shares increased to 123,612,756, with 65,178,483 common shares and 58,434,273 preferred shares.
Interest on Own Capital and Dividends
In January 2014, 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$15.9 million represents interest on own capital and R$14.1 million, dividends.
During 2013, Pine distributed a total of R$62.2 million interest on own capital and R$57.8 million in dividends, representing a
dividend yield of 10.6% Since 2008, Pine distributes dividends/ interest on own capital quarterly.
Ratings
ings Moodys.com – RISKbanls
Long Term
Short Term B B
Long Term BB+ BB+ Bal
Short Term B B
Long Term brAA AA-(bra) Aa2.br
10.5
Short Term Flxbra) Br-1
10
PINE
Balance Sheet
R$ million
TE] UE] TP)
Assets 10,545 10,508 10,406
Cash 157 281 126
Interbank investments 668 870 405
Securities 2,515 2,627 4,261
Interbank accounts 1 6 1
Lending operations 6,382 5,855 5,038
(-) Provisions for loan losses (186) (190) (190)
Net lending operations 6,196 5,665 4,848
Other receivables 904 957 734
Property and equipments 104 101 31
Investments 76 73 –
Property and equipment in use 26 26 29
Intangible 2 2 2
Liabilities 9,272 9,243 9,186
Deposits 3,156 2,924 3,319
Money market funding 509 829 1,833
Funds fromacceptance and securities issued 1,738 1,505 1,292
Interbank and Interbranch accounts 15 34 22
Borrowings and onlendings 2,954 2,933 1,975
Derivative financial instruments 191 221 100
Other liabilities 641 727 588
Deferred Results 68 70 56
Shareholders’ equity 1,272 1,264 1,220
Liabilities and shareholders’ equity 10,545 10,508 10,406
11
PINE
Income Statement
R$ million
4013 Elo JE] Lio jp] 2013 PL Ya
Income from financial intermediation 310 298 252 1,182 1,237
Lending transactions 163 154 115 568 548
Securities transactions 63 71 117 263 480
Derivative financial instruments 53 33 7 196 64
Foreign exchange transactions 31 40 13 155 145
Expenses with financial intermediation (256) (224) (178) (912) (860)
Funding transactions (169) (146) (127) (608) (607)
Borrowings and onlendings (63) (44) (32) (203) (170)
Provision for loan losses (24) (34) (19) (101) (83)
Gross income from financial intermediation 54 74 74 270 376
Other operating (expenses) income 1 (13) (21) (50) (115)
Fee income 25 33 30 118 120
Personnel expenses (25) (23) (23) (92) (89)
Other administrative expenses (25) (24) (22) (95) (92)
Tax expenses (6) (4) (4) (17) (17)
Other operating income 52 6 3 73 48
Other operating expenses (20) (1) (5) (37) (85)
Operating income 55 60 52 220 261
Non-operating income 2 2 15 9 20
Income before taxes and profit sharing 57 62 68 229 281
Income tax and social contribution (9) (11) (17) (31) (58)
Profit sharing (11) (11) (2) (37) (36)
Netincome 37 40 48 162 187
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.
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