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2Q17 Institutional
Presentation
2/37Investor Relations | 2Q17 |
 Profile and History
 Pine
 History
 Business Strategy
 Competitive Landscape
 Focus Always on the Client
 Corporate Credit
 FICC
 Pine Investimentos
 Strategic Partnership
 Corporate Governance
 Organizational Structure
 Corporate Governance
 Social Investment and Responsibility
 Economic Overview
 Macroeconomic
 Credit Growth
 Expectations
 Highlights and Results
Summary
3/37Investor Relations | 2Q17 |
Profile and History
4/37Investor Relations | 2Q17 |
Pine
Specialized in providing financial solutions for corporate clients…
Credit Portfolio by Annual Client Revenues Customer Profile
Bank Profile
 Focused on establishing long-term relationships
 Fast response | Specialized services
 Customized products | Product diversity
 R$ 6,582 million in Loan Portfolio
 R$ 1,127 million in Shareholders’ Equity
 Long-term National Rating at A by Fitch
 Business is structured along three primary business lines:
 Corporate Credit: credit and financing products
 FICC: instruments for hedging and risk
management
 Pine Investimentos: Capital Markets, Financial
Advisory, Project & Structured Finance and
Research
Large Corporate (> R$ 2.000 millions)
Corporate (R$ 500 - R$ 2.000 millions)
Companies (R$ 50 - R$ 500 millions)
Retail (PFs e small companies)
 Balance sheets audited by third parties, corporate governance,
well defined hedging policies, and the lower risk profileOver R$2
billion
38%
R$500 million
to R$2 billion
26%
Up to R$500
million
36%
5/37Investor Relations | 2Q17 |
...with extensive knowledge of Brazil’s corporate credit cycle.
History
1997
Noberto Pinheiro sell
his stake in BMC and
found Pine
1939
Pinheiro Family
founds
Banco Central do
Nordeste
1975
Noberto Pinheiro
becomes one of
BMC’s controlling
shareholders
Devaluati-
on of the
real
NasdaqSept. 11 Brazilian
Elections
(Lula)
Subprime
Russian
Crisis
European
Community
2007
Discontinuation of the payroll-deductible loan
business, with changes in the corporate business
strategy. Hence, there was a creation of Pine
Investimentos, besides the opening of the Cayman
branch
October, 2011
Subscription of Pine’s capital by DEG
August, 2012
Subscription of Pine’s capital by DEG, Proparco, Controlling Shareholder and Management
2015
Portfolio deleveraging strategy due to an political and economic scenario
March, 2007
IPO
May, 2017
20 years
2005
Noberto Pinheiro
became Pine’s
controller
2H2016
The turning point of the Bank’s portfolio
Car-Wash
155 184 222 341 521 620 755 663 761
1,214
2,854 3,108
4,195
5,763
6,963
7,911
9,920 9,826
6,933
6,445 6,582
18
62
121 126 140 136 152 171
209
335
801
827 825
867
1,015
1,220
1,272 1,256
1,163 1,148
1,127Dec-97
Dec-98
Dec-99
Dec-00
Dec-01
Dec-02
Dec-03
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-10
Dec-11
Dec-12
Dec-13
Dec-14
Dec-15
Dec-16
Jun-17
Corporate Credit Portfolio (R$ Million)
Shareholders' Equity (R$ Million)
6/37Investor Relations | 2Q17 |
Business Strategy
7/37Investor Relations | 2Q17 |
Competitive Landscape
Pine serves a niche market of companies with few options for banks.
100% focused on providing complete service
to companies, offering customized products
100% Corporate
Large Multi-Services banks
Market
 Consolidation of the banking sector has decreased
the supply of credit lines and financial instruments
for corporate
 Foreign banks are in a deleveraging process
PINE
 Full service Bank – Credit, Hedging, and Investment
Bank products – with room for growth
 ~15 clients per officer
 Competitive Advantages:
 Focus
 Fast response: Strong relationship with
clients, with the credit committee meeting
once a week ensures rapid return to customer
needs
 Specialized services
 Tailor-made solutions
 Product diversity
Foreign and
Investment Banks
SME & Retail
Corporate e SME
Retail
8/37Investor Relations | 2Q17 |
Focus Always on the Client
Products tailored to meet the needs of each individual client.
In addition to the
headquarters located in the
city of São Paulo, Pine has 6
branches throughout Brazil, in
the States of Mato
Grosso, Paraná,
Pernambuco, Rio de Janeiro,
Rio Grande do Sul, and
São Paulo. The origination
network also counts with a
Cayman Branch, especially for
Trade Finance transactions.
9/37Investor Relations | 2Q17 |
Corporate Credit
Actions Credit Committee
Strong track record and solid credit origination and approval process.
Credit Approval: Electronic Process
Origination
Officers
Credit origination
Credit analysis, visit to
clients, data updates,
interaction with internal
research team
Credit Analysts
Regional Heads of
Origination and
Credit Analysis
Presentation to the Credit
Committee
Directors and
Analysts of Credit
Centralized and
unanimous decision
making process
CREDIT
COMMITTEE
 Meets once a week – reviewing on ~ 25 proposals
 Mandatory Quorum: 5 members
Committee Members:
 President
 Vice-President for Business
 Vice-President Administrative
 Vice-President for Corporate and Investment Banking
 Credit Superintendent
Superior Committee Members:
 Two members of the Board
Participants:
 FICC Director
 Credit Analysts Team
 Other members of the Corporate Banking origination
team
 Personalized and agile service, working closely with clients and
keeping a low client to account officer ratio: each officer
handles ~15 economic groups
 Geographic coverage of clients, providing the bank with local
and extremely up-to-date credit intelligence and information
 Established long term relationships with more than 500
economic groups
 Pine has approximately 20 professionals in the credit analysis
area, assuring that analysis is fundamentally driven and based
on industry-specific intelligence
 Efficient loan and collateral processes, documentation, and
controls, which has resulted in a low NPL track record
Discussion on sizing,
collateral, structure etc.
Superior
Committee
Approval
Tickets over R$ 15 MM
10/37Investor Relations | 2Q17 |
September 30rd, 2016
 Currencies (89%): Dollar, Euro, Yen, Pound, Canadian
Dollar, Australian Dollar
 Commodities (8%): Sugar, Soybean ( Grain, Meal and Oil),
Corn, Cotton, Metals, Energy
 Fixed income (3%): Fixed, Floating, Inflation, Libor
FICC
Solid trackrecord.
Market Segments Competitive Advantages
 One Stop Shop: credit and risk mitigation
 Every transaction demands prior credit approval
 Collaterals surpass approved derivative’s limits
 Agility| Client Focused| Diversification
 Average of 30 days to close a derivative transaction
(domestic large banks average - 90 days)
Sample Transaction
Trader prices the
transaction, including spread
Treasury hedges the
transaction
Transaction closed
Treasury informs the spot
price
Global Derivatives
Agreement
(ISDA Master Agreement)
• Limits
• Types of Derivatives
• Collaterals
• Market Risk: 100% Hedged
• Limits
PINE
Credit Analysis
Process
FICC
• Credit Analysis
• Collaterals
• Cross-selling opportunity
• Credit Committee Approval
Client
1st
2nd
Margin Calls ManagementDerivatives
11/37Investor Relations | 2Q17 |
Pine Investimentos
5th player in volume of CRI’s origination and 7th place in number of short-term fixed income operations
Operating Model
Selected Transactions
Pine Investimentos
Financial AdvisoryCapital Markets
Project
Finance
 Fixed Income (CRIs, CRAs)
 Infrastructure Debentures
 Equities
 Securitization
 Hybrid capital
transactions
 Project & Structured
Finance
Investidores
 Family Offices
 Individuals
 Companies
 Asset Managers
 Financial Institutions
 Pension Funds
 Foreign Investors
 Hedge Funds
January, 2017
Structure Credit
Facility
R$ 6,000,000
Lead Coordinator
January, 2017
Structure Credit
Facility
R$ 15,000,000
Lead Coordinator
March, 2017
CCBI
R$ 15,000,000
Lead Coordinator
March, 2017
Promissory Note
R$ 35,000,000
Coordinator
March, 2017
CRI
R$ 47,000,000
Lead Coordinator
March, 2017
Structure Credit
Facility
R$ 90,000,000
Lead Coordinator
May, 2017
R$ 60,000,000
Bond
May, 2017
Promissory Note
R$ 40,000,000
Lead Coordinator
May, 2017
BRDE Bank Guarantee
R$ 10,000,000
12/37Investor Relations | 2Q17 |
Strategic Partnerships
About DEG
About PROPARCO
Group Structure
Group Structure
DEG and PROPARCO
 Founded in 1962 in Germany, DEG is one of the largest
institutions in Europe that contribute to growth and
development of private companies in emerging market
 It belongs to the KFW Bankengruppe, Germany's largest public
development bank
 Promotes development of private enterprises in emerging
markets through long-term financing
Consolidated Assets
EUR 5.8 billion
December, 2016
 Founded in 1977 in Paris, started it´s activities in Brazil in
2006
 Proparco is the subsidiary of Agence Francaise de
Dévelopement ( AFD)
 Focused on emergence of a strong and innovative private
sector with aim of supporting growth and sustainability in
Emerging Market
Consolidated Assets
EUR 5.4 billion
December, 2016
57%
French
Financial
Institutions
International
Financial
Organisations
French
Companies
Investment
funds &
Foundations
26% 13% 3% 1%
13/37Investor Relations | 2Q17 |
Corporate Governance
14/37Investor Relations | 2Q17 |
Organizational Structure
Non-bureaucratic Culture, entrepreneurial and meritocratic with a flat hierarchy
INTERNAL AUDIT
COMPENSATION
COMMITTEE
AUDIT COMMITTEE
EXTERNAL AUDIT
PWC
Rodrigo Pinheiro Igor Pinheiro Noberto Pinheiro Norberto Zaiet Gustavo Junqueira Mailson de Nóbrega
Vice Chairman Member Chairman Member
Independent
Member
Independent
Member
BOARD OF DIRECTORS
RISKS COMMITTEE
Corporate & IB
Mauro Sanchez
Finances
Welinton Gesteira
Operations
Ulisses Alcantarilla
Business
João Brito
Structuring- DCM
Investment Banking
Corporate Banking
Assets and Liabilities
Back-office
Collaterals Management
Management Special
Assets
Middle Office
Exchange
Services
Register
Sales & Trading
International
Research Macro /
Commodities/ Companies
Funding & Distribution
Marketing
Investor Relations
Structured Products
ALM e FLOW
Accounting and Tax
Planning
Market and Liquidity
Risks
Strategic Planning and
P&L
Commercial Planning and
Valuation
CEO
Norberto Zaiet Jr.
IT
Eugenio Fabbri
HR
Camilla Suave
Credit
Marcelo Camargo
Legal & Compliance
Jefferson Miceli
15/37Investor Relations | 2Q17 |
Corporate Governance
Pine is committed to best corporate governance practices
 Two Independent Members on the Board of Directors
 Mailson Ferreira da Nóbrega: Brazil’s Finance Minister from 1988 to 1990
 Gustavo Junqueira: Former Head of Pine Investimentos, Member of the Board of Directors at EZTEC, Financial
Advisor at Arsenal Investimentos and CFO at Gradiente Eletrônica
 São Paulo Stock Exchange (BM&FBOVESPA) Level 2 Corporate Governance
 Audit and Compensation Committee reporting directly to the Board of Directors
 100% tag along rights for all shareholders, including non-voting shares
 Arbitration procedures for fast settlement of litigation cases
16/37Investor Relations | 2Q17 |
Social Investment and Responsibility
Focus on the short, medium and long term.
Social Investment Recognition
Partnerships
Most Green Bank
Recognized by the International Finance Corporation (IFC), private
agency programs of the World Bank as the most "green" bank as a result
of its transactions under the Global Trade Finance Program (GTFP) and
its onlending to companies focused on renewable energy and ethanol
Efficiency Energy
Recognition by World Bank for support in the Energy Efficiency sector.
Responsible Credit
“Lists of Exceptions”: the Bank does not finance projects or those
organizations that damage the environment, are involved in illegal
labor practices or produce, sell or use products, substances or activities
considered prejudicial to society.
System of environmental monitoring, financed by the IADB and
coordinated by FGV, and internally-produced sustainability reports for
corporate loans
Protocolo Verde – “Green Protocol”, an agreement
between FEBRABAN and the Ministry of the Environment
to support development that does not compromise future
generations.
Exhibition and sponsorship of Brazilian artists, for instance Paulo von Poser and
Miguel Rio Branco, in addition to sponsoring and supporting films and
documentaries such as Quebrando o Tabu (Fernando Henrique Cardoso on the
drug war), O Brasil deu certo, e agora? (idealized by Mailson da Nóbrega), Além
da Estrada (Charly Braun) and others.
Sustainability Annual Report
Seventh consecutive year disclosing the
Sustainability Report in the GRI
standard. The 2015 report, with its high
level of clarity, transparency and quality
was recognized with the fourth place in
the Abrasca Annual Report Award,
considering its category of companies
with net income to R$3 billion.
17/37Investor Relations | 2Q17 |
Economic Overview
18/37Investor Relations | 2Q17 |
17.617.5
19.2
23.5
16.4
19.1
15.3
12.012.5
10.19.9
11.7
8.5 8.4
11.0
13.6
14.1
9.9
7.3
8.6
9.5
5
10
15
20
25
2000 2004 2008 2012 2016 2020
Forecast
Selic (interest rate, average) Média móvel 4 anos
4.4
1.4
3.1
1.1
5.8
3.2
4.0
6.1
5.1
-0.1
7.5
3.9
1.9
3.0
0.1
-3.9-3.8
0.3
1.8
2.5
1.5
-6
-4
-2
0
2
4
6
8
10
2000 2004 2008 2012 2016 2020
Forecast
Real GDP growth rate (%) Média móvel 4 anos
Macroeconomic
Real GDP
SELIC
IPCA (CPI)
Gross Government Debt
Due to the challenging economic scenario...
Moving Avarage 4 years
Moving Avarage 4 years
6.0
7.7
12.5
9.3
7.6
5.7
3.1
4.5
5.9
4.3
5.9
6.5
5.8 5.9
6.4
10.7
6.3
3.5
4.2 4.3 4.0
2.5
3.5
4.5
5.5
6.5
7.5
8.5
9.5
10.5
11.5
12.5
13.5
2000 2004 2008 2012 2016 2020
Forecast
IPCA (CPI)
67
76
72
68 67
55
57 56
59
52 51
55
53
59
66
70
75
76
77
79
50
60
70
80
90
2000 2004 2008 2012 2016 2020
Forecast
Gross government debt (% GDP)
19/37Investor Relations | 2Q17 |
Credit Growth
Corporate and Households
Credit/GDP
Public Banks, National and Internacional Privates Banks
Interest and Spread
... the credit environment is directly affected...
-20
-10
0
10
20
30
40
50
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Credit growth (% YoY, nominal))
Corporate Households
4.3
- 7.3
5
10
15
20
25
30
35
2011 2012 2013 2014 2015 2016 2017
Interest and Spread - Corporate (% YoY)
Investment Funding Spread
24.8
15.4
9.4
-20
-10
0
10
20
30
40
50
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Credit growth (% YoY, nominal)
Public banks National private banks
5.1
30
35
40
45
50
55
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
(%)
Total credit/GDP (%)
48.2
20/37Investor Relations | 2Q17 |
Expectations
...however, we expect that this scenario has a slight improvement in 2017.
Source: Pine Bank, June 2017
Brazil: Key Economic Indicators - PINE
INDICATORS 2012 2013 2014 2015 2016E 2017E 2018E
Real GDP growth rate (%) 1.9% 3.0% 0.5% -3.8% -3.6% 0.3% 1.8%
BRLUSD (eop) 2.08 2.35 2.65 3.87 3.35 3.19 3.40
BRLUSD (average) 1.95 2.16 2.35 3.34 3.48 3.18 3.27
IPCA (CPI) 5.8% 5.9% 6.4% 10.7% 6.3% 3.4% 4.2%
IGP-M (PPI) 7.8% 5.5% 3.5% 10.5% 7.2% -1.0% 5.4%
Selic (interest rate, eop) 7.25% 10.00% 11.75% 14.25% 13.75% 7.25% 7.25%
Selic (interest, average) 8.46% 8.44% 11.02% 13.58% 14.15% 9.90% 7.25%
Trade balance (USD bn) 19.4 2.6 -3.9 19.7 47.7 60.0 55.0
Current account (USD bn) -74.2 -74.8 -104.2 -58.9 -23.5 -10.0 -20.0
Current account (% GDP) -3.0% -3.0% -4.2% -3.3% -1.3% -0.5% -0.9%
FDI (US$bn) 87 69 97 75 79 80.0 80.0
Primary surplus (% GDP) 2.2% 1.7% -0.6% -1.9% -2.5% -2.4% -1.4%
Gross government debt (% GDP) 54.8% 53.3% 58.9% 66.4% 69.5% 74.6% 76.1%
21/37Investor Relations | 2Q17 |
Highlights and Results
22/37Investor Relations | 2Q17 |
Highlights
 Liquid balance sheet with a cash position of R$1.4 billion, above 1.0x Shareholders’ Equity.
 Excess capital, with a BIS ratio of 14.6%, being 14.2% Tier I Capital.
 Loan portfolio coverage ratio over 7% as a result of the significant increase in provisions in the previous periods.
 Pine Investimentos: 5th player in volume of CRI’s origination.
 Continuous liability management with a diversified portfolio and adequate terms.
 Pine launched its digital investment platform, Pine Online.
23/37Investor Relations | 2Q17 |
7,409 6,859
Sept-15 Dec-15
Total Funding
-7.4%
1,181 1,163
Sept-15 Dec-15
Shareholders' Equity
-1.5%
3.5% 3.6%
3Q15 4Q15
ROAE
0.1 p.p
2.9% 3.2%
3Q15 4Q15
NIM Evolution
0.33 p.p.
10 10
3Q15 4Q15
Net Income
Financial Highlights
1 Includes Stand by LCs, Bank Guarantees, Credit Securities to be Received and Securities (bonds, CRIs, eurobonds and fund shares)
R$ million
7,691 6,933
Sept-15 Dec-15
Total Loan Portfolio
1
-9.9%
6,271 6,465 6,582
Jun-16 Mar-17 Jun-17
Total Loan Portfolio1
+ 1.8%
+ 5.0%
1
-21
1H16 1H17
-2.4%
0.2%
-7.3%
2Q16 1Q17 2Q17
ROAE
-490 bps.
- 750 bps.
0.2%
-3.6%
1H16 1H17
ROAE
-380 bps
2.0%
3.4%
2.9%
2Q16 1Q17 2Q17
NIM
+ 90 bps.
- 50 bps.
24/37Investor Relations | 2Q17 |
Revenue Mix
Product and Revenue Diversification
Business Lines
Credit
68.0%
FICC
15.9%
Pine
Investimentos
7.8%
Treasury
8.3%
1H17
Credit
66.8%
FICC
20.6%
Pine
Investimentos
6.1%
Treasury
6.5%
1H16
25/37Investor Relations | 2Q17 |
NIM and Efficiency Ratio
NIM
Expenses and Efficiency Ratio
21 21 22
16
18 19
86.7%
61.2%
68.9%
-100%
-80%
-60%
-40%
-20%
00%
20%
40%
60%
80%
100%
0
5
10
15
20
25
30
35
40
2Q16 1Q17 2Q17
41 43
32
37
84.0%
64.8%
-100%
-80%
-60%
-40%
-20%
00%
20%
40%
60%
80%
100%
0
20
40
60
80
100
120
140
1H16 1H17
Personnel
Expenses
Other
administrative
expenses
Recurring
Efficiency Ratio
(%)
2.0%
3.4%
2.9%
2Q16 1Q17 2Q17
NIM
+ 90 bps.
- 50 bps.
26/37Investor Relations | 2Q17 |
3,139 3,275 3,468 3,673 3,773
659 520
437
370 298
2,122 2,104 2,120 2,022 2,123
351 339
419 399 388
Jun-16 Sept-16 Dec-16 Mar-17 Jun-17
Trade finance: 5.9%
Bank Guarantees: 32.3%
BNDES Onlending : 4.5%
Working Capital: 57.3%
6,238
6,445 6,465
6,271
6,582
1 Includes Stand by LC
2 Includes debentures, CRIs, Hedge Fund Shares, Eurobonds, Credit Portfolio acquired from financial institutions with recourse and Individuals
R$ million
Loan Portfolio
The portfolio amounted to R$6.6 billion...
1
+ 5.0%
+ 1.8%
2
27/37Investor Relations | 2Q17 |
New Operations
... facing lower average ticket and better quality for the new operations...
Ratings Sectors
Average Ticket Evolution (R$ thousand)
17,694
15,000
17,000
19,000
21,000
23,000
25,000
1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17
Average Ticket Evolution
25,953
Energy
20%
Chemical and
petrochemical
17%
Real Estate
11%
Agriculture
9%Transportation
and logistics
9%
Sugar and
ethanol
8%
Engineering
6%
Others
40%
AA-B
91%
C
9%
28/37Investor Relations | 2Q17 |
Continuous Loan Portfolio Management
Sectors Rebalance
...always focusing on sector diversification.
 Diversified growth (lower tickets and increased number of clients).
 The composition of the portfolio of the 20 largest clients changed by over 30% in the past twelve months.
 The share of wallet of the 20 largest clients remained at around 30%, in line with market peers.
Real Estate
12%
Sugar and Ethanol
11%
Agriculture
11%
Energy
11%
Engineering
10%
Transportation
and Logistics
6%
Telecom
5%
Specialized
Services
4%
Retail
3%
Foreign Trade
3%
Metallurgy
2%
Construction
Material
2%
Mining
2%
Vehicles and Parts
2%
Food Industry
1%
Meatpacking
1%
Other
11%
39%37%38%40%44%
6%7%7%5%
5%
10%10%9%8%
7%
11%12%12%12%
11%
11%10%10%10%7%
11%12%12%12%14%
12%12%12%13%12%
Jun-17Jun-16Jun-15Jun-14Jun-13
Real Estate
Sugar and Ethanol
Agriculture
Energy
Engineering
Transportation
and Logistics
Others
29/37Investor Relations | 2Q17 |
1D-H Portfolio: D-H Portfolio / Loan Portfolio Res. 2,682
2Coverage of Total Portfolio: Provisions / Loan Portfolio Res. 2,682
June 30th, 2017
Contracts Overdue: total amount of the contracts overdue for more than 90 days / Loan Portfolio
excluding Bank Guarantees and Stand-by Letters of Credit.
Loan Portfolio Quality
-85% of the loan portfolio is classified between AA-C ratings.
Loan Portfolio Quality – Res. 2,682
Credit Coverage
Non Performing Loans > 90 days (Total Contract)
Collaterals
1 2
3.7%
0.7%0.6%
1.5%1.3%
0.7%
1.7%
1.2%
1.8%
Jun-17Mar-17Dec-16Sept-16Jun-16Mar-16Dec-15Sept-15Jun-15
Tangible
Movable
Property
31%
Receivables
8%
Real State
55%
Financial
Assets
6%
AA-A
28.5%
B
23.6%
C
34.2%D-E
5.9%
F-H
7.8%
13.8%
15.5%
13.7%
5.9% 5.9%
7.1%
00%
02%
04%
06%
08%
10%
12%
00%
02%
04%
06%
08%
10%
12%
14%
16%
18%
Jun-16 Mar-17 Jun-17
D-H Portfolio Coverage of Total Portfolio
30/37Investor Relations | 2Q17 |
R$ million
Funding
Diversified sources of funding.
648 617 460 464 446
261 376
384 460 421
1,939
2,600 2,980
3,241
3,893
156
133
46
72
114
19
29
17
11
27
668
530 454
383
331
296
198 213
240
203
734
259 247
203
176
216 206 204
86
89
718 698 448
386
403
270 262
239 150
1785,925 5,908
5,692 5,697
6,280
Jun-16 Sept-16 Dec-16 Mar-17 Jun-17
Trade Finance: 2.8%
Multilateral Lines: 6.4%
International Capital Markets:
1.4%
Financial Letter : 2.8%
Local Capital Markets: 3.2%
Onlending: 5.3%
Demand Deposits: 0.4%
Interbank Time Deposits: 1.8%
High Net Worth Individual Time
Deposits: 62%
Corporate Time Deposits: 6.7%
Institutional Time Deposits:
7.1%
31/16Relações com Investidores | 2T17 |
PINE ONLINE
 Pine launched its digital investment plataform, Pine Online
 Products: CDBs, LCAs e LCIs
 Website: www.pineonline.com.br
 App: IOS and Android
32/37Investor Relations | 2Q17 |
Leverage: Expanded Loan Portfolio / Shareholders’ Equity
Expanded Loan Portfolio excluding Bank Guarantees and Stand-by Letters of Credit /
Shareholders’ Equity
Credit over Funding ratio: Loan Portfolio excluding Bank Guarantees and Stand-by Letters of
Credit / Total Funding
Asset & Liability Management
Matching assets’ and liabilities’ duration.
Leverage Credit over Funding Ratio
Total Deposits over Total Funding
R$ millionR$ billion
Asset and Liability Management (ALM)
5.4x 5.4x 5.6x 5.6x 5.8x
3.6x 3.6x 3.8x 3.8x 4.0x
-
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
10.00
Jun-16 Sept-16 Dec-16 Mar-17 Jun-17
Expanded loan Porfolio
Loan Portfolio excluding
Bank Guarantees
70% 70%
76% 78%
71%
Jun-16 Sept-16 Dec-16 Mar-17 Jun-17
1.1
1.1
5.8
0.00.5
0.5
Assets
0.1
0.7
4.0
2.7
0.2
1.3
Liabilities
9.0 9.0
Coverage
of 145%
Cash and cash equivalents
Assets financed through REPOs
Other assets
Credit Portfolio
Trading portfolio assets
Illiquid assets
Secured funding
Other liabilities
Unsecured funding
Demand deposits
Equity
REPO Financing
51%
64% 68%
75% 78%
49%
36% 32%
25% 22%
Jun-16 Sept-16 Dec-16 Mar-17 Jun-17
Total Deposits Others
5,6975,925 5,908 5,692 6,277
33/37Investor Relations | 2Q17 |
Capital Adequacy Ratio (BIS), Basel III
BIS ratio of 14.6%, being 14.2% in Tier I Capital.
15.4% 15.3% 15.0% 14.7% 14.2%
0.5% 0.5% 0.4% 0.4% 0.4%
Jun-16 Sept-16 Dec-16 Mar-17 Jun-17
Tier II Tier I
Minimum Regulatory
Capital (10.5%)
14.6%
15.1%15.4%15.8%15.9%
34/37Investor Relations | 2Q17 |
Rating
Foreign
andLocal
Currency
Long Term B+ BB- B1
National
Long Term BBB+ A Baa2
35/37Investor Relations | 2Q17 |
R$ million
Jun-17 Mar-17 Jun-16 QoQ (%) YoY (%)
Assets 8,975 8,703 8,436 3.1% 6.4%
Cash 200 90 71 123.2% 183.9%
Interbank investments 1,116 475 836 134.9% 33.6%
Securities 2,672 3,194 2,893 -16.3% -7.6%
Interbank accounts 1 1 1 24.6% 45.5%
Lending operations 4,013 3,967 3,746 1.1% 7.1%
(-) Provisions for loan losses (285) (235) (223) -21.3% -5.5%
Net lending operations 3,727 3,732 3,523 -0.1% 5.8%
Other receivables 1,141 1,094 994 4.3% 14.7%
Property and equipments 118 117 119 0.2% -1.2%
Investments 108 108 108 0.0% -0.4%
Property and equipment in use 10 9 10 2.6% -8.2%
Intangible 0 0 1 -1.0% -24.4%
Liabilities 7,848 7,549 7,270 4.0% 8.0%
Deposits 3,709 3,014 1,976 23.1% 87.7%
Money market funding 465 640 612 -27.3% -23.9%
Funds from acceptance and securities issued 1,417 1,485 1,913 -4.6% -25.9%
Interbank and Interbranch accounts 7 1 11 376.6% -32.7%
Borrowings and onlendings 912 920 1,542 -0.9% -40.9%
Derivative financial instruments 1,064 1,223 709 -13.0% 50.1%
Other liabilities 175 161 441 8.6% -60.3%
Deferred Results 100 105 67 -4.2% 49.6%
Shareholders' equity 1,127 1,154 1,165 -2.4% -3.3%
Liabilities and shareholders' equity 8,975 8,703 8,436 3.1% 6.4%
Balance Sheet
36/37Investor Relations | 2Q17 |
Managerial Income Statement
(overhedge effect)
R$ million
2Q17 1Q17 2Q16 1H17 1H16
Income from financial intermediation 242 173 71 416 164
Lending transactions 131 118 114 249 235
Securities transactions 72 75 79 147 156
Derivative financial instruments 10 14 (67) 23 (139)
Foreign exchange transactions 30 (33) (55) (3) (88)
Expenses with financial intermediation (251) (145) (74) (396) (161)
Funding transactions (159) (137) (113) (296) (237)
Borrowings and onlendings (42) 10 72 (32) 135
Provision for loan losses (50) (17) (33) (67) (60)
Gross income from financial intermediation (8) 29 (4) 20 3
Other operating (expenses) income (31) (22) (23) (53) (46)
Fee income 20 20 15 40 32
Personnel expenses (22) (21) (21) (43) (41)
Other administrative expenses (19) (18) (16) (37) (32)
Tax expenses (4) (4) (5) (8) (12)
Other operating income 3 37 15 40 25
Other operating expenses (8) (36) (11) (45) (18)
Operating income (39) 6 (26) (33) (44)
Non-operating income 2 0 3 3 12
Income before taxes and profit sharing (37) 7 (23) (30) (31)
Income tax and social contribution 20 (0) 18 20 40
Profit sharing (4) (6) (2) (11) (7)
Net income (21) 1 (7) (21) 1
37/37Investor Relations | 2Q17 |
Income Statement
R$ million
2Q17 1Q17 2Q16 1H17 1H16
Income from financial intermediation 239 182 92 421 224
Lending transactions 131 118 114 249 235
Securities transactions 72 75 79 147 156
Derivative financial instruments 6 22 (46) 28 (79)
Foreign exchange transactions 30 (33) (55) (3) (88)
Expenses with financial intermediation (251) (145) (74) (396) (161)
Funding transactions (159) (137) (113) (296) (237)
Borrowings and onlendings (42) 10 72 (32) 135
Provision for loan losses (50) (17) (33) (67) (60)
Gross income from financial intermediation (12) 37 18 25 63
Other operating (expenses) income (31) (22) (23) (53) (46)
Fee income 20 20 15 40 32
Personnel expenses (22) (21) (21) (43) (41)
Other administrative expenses (19) (18) (16) (37) (32)
Tax expenses (4) (4) (5) (8) (12)
Other operating income 3 37 15 40 25
Other operating expenses (8) (36) (11) (45) (18)
Operating income (43) 15 (5) (28) 16
Non-operating income 2 0 3 3 12
Income before taxes and profit sharing (40) 15 (1) (25) 28
Income tax and social contribution 23 (8) (4) 15 (20)
Profit sharing (4) (6) (2) (11) (7)
Net income (21) 1 (7) (21) 1
38/37Investor Relations | 2Q17 |
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.
Investor Relations
Norberto Zaiet Junior
CEO
João Brito
CFO
Raquel Varela Bastos
Head of Investor Relations, Local Funding and Communication
Luiz Maximo
Investor Relations Manager
Kianne Paganini
Investor Relations Analyst
Phone: (55 11) 3372-5343
ir.pine.com
ir@pine.com

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Institutional presentation 2_q17

  • 2. 2/37Investor Relations | 2Q17 |  Profile and History  Pine  History  Business Strategy  Competitive Landscape  Focus Always on the Client  Corporate Credit  FICC  Pine Investimentos  Strategic Partnership  Corporate Governance  Organizational Structure  Corporate Governance  Social Investment and Responsibility  Economic Overview  Macroeconomic  Credit Growth  Expectations  Highlights and Results Summary
  • 3. 3/37Investor Relations | 2Q17 | Profile and History
  • 4. 4/37Investor Relations | 2Q17 | Pine Specialized in providing financial solutions for corporate clients… Credit Portfolio by Annual Client Revenues Customer Profile Bank Profile  Focused on establishing long-term relationships  Fast response | Specialized services  Customized products | Product diversity  R$ 6,582 million in Loan Portfolio  R$ 1,127 million in Shareholders’ Equity  Long-term National Rating at A by Fitch  Business is structured along three primary business lines:  Corporate Credit: credit and financing products  FICC: instruments for hedging and risk management  Pine Investimentos: Capital Markets, Financial Advisory, Project & Structured Finance and Research Large Corporate (> R$ 2.000 millions) Corporate (R$ 500 - R$ 2.000 millions) Companies (R$ 50 - R$ 500 millions) Retail (PFs e small companies)  Balance sheets audited by third parties, corporate governance, well defined hedging policies, and the lower risk profileOver R$2 billion 38% R$500 million to R$2 billion 26% Up to R$500 million 36%
  • 5. 5/37Investor Relations | 2Q17 | ...with extensive knowledge of Brazil’s corporate credit cycle. History 1997 Noberto Pinheiro sell his stake in BMC and found Pine 1939 Pinheiro Family founds Banco Central do Nordeste 1975 Noberto Pinheiro becomes one of BMC’s controlling shareholders Devaluati- on of the real NasdaqSept. 11 Brazilian Elections (Lula) Subprime Russian Crisis European Community 2007 Discontinuation of the payroll-deductible loan business, with changes in the corporate business strategy. Hence, there was a creation of Pine Investimentos, besides the opening of the Cayman branch October, 2011 Subscription of Pine’s capital by DEG August, 2012 Subscription of Pine’s capital by DEG, Proparco, Controlling Shareholder and Management 2015 Portfolio deleveraging strategy due to an political and economic scenario March, 2007 IPO May, 2017 20 years 2005 Noberto Pinheiro became Pine’s controller 2H2016 The turning point of the Bank’s portfolio Car-Wash 155 184 222 341 521 620 755 663 761 1,214 2,854 3,108 4,195 5,763 6,963 7,911 9,920 9,826 6,933 6,445 6,582 18 62 121 126 140 136 152 171 209 335 801 827 825 867 1,015 1,220 1,272 1,256 1,163 1,148 1,127Dec-97 Dec-98 Dec-99 Dec-00 Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Jun-17 Corporate Credit Portfolio (R$ Million) Shareholders' Equity (R$ Million)
  • 6. 6/37Investor Relations | 2Q17 | Business Strategy
  • 7. 7/37Investor Relations | 2Q17 | Competitive Landscape Pine serves a niche market of companies with few options for banks. 100% focused on providing complete service to companies, offering customized products 100% Corporate Large Multi-Services banks Market  Consolidation of the banking sector has decreased the supply of credit lines and financial instruments for corporate  Foreign banks are in a deleveraging process PINE  Full service Bank – Credit, Hedging, and Investment Bank products – with room for growth  ~15 clients per officer  Competitive Advantages:  Focus  Fast response: Strong relationship with clients, with the credit committee meeting once a week ensures rapid return to customer needs  Specialized services  Tailor-made solutions  Product diversity Foreign and Investment Banks SME & Retail Corporate e SME Retail
  • 8. 8/37Investor Relations | 2Q17 | Focus Always on the Client Products tailored to meet the needs of each individual client. In addition to the headquarters located in the city of São Paulo, Pine has 6 branches throughout Brazil, in the States of Mato Grosso, Paraná, Pernambuco, Rio de Janeiro, Rio Grande do Sul, and São Paulo. The origination network also counts with a Cayman Branch, especially for Trade Finance transactions.
  • 9. 9/37Investor Relations | 2Q17 | Corporate Credit Actions Credit Committee Strong track record and solid credit origination and approval process. Credit Approval: Electronic Process Origination Officers Credit origination Credit analysis, visit to clients, data updates, interaction with internal research team Credit Analysts Regional Heads of Origination and Credit Analysis Presentation to the Credit Committee Directors and Analysts of Credit Centralized and unanimous decision making process CREDIT COMMITTEE  Meets once a week – reviewing on ~ 25 proposals  Mandatory Quorum: 5 members Committee Members:  President  Vice-President for Business  Vice-President Administrative  Vice-President for Corporate and Investment Banking  Credit Superintendent Superior Committee Members:  Two members of the Board Participants:  FICC Director  Credit Analysts Team  Other members of the Corporate Banking origination team  Personalized and agile service, working closely with clients and keeping a low client to account officer ratio: each officer handles ~15 economic groups  Geographic coverage of clients, providing the bank with local and extremely up-to-date credit intelligence and information  Established long term relationships with more than 500 economic groups  Pine has approximately 20 professionals in the credit analysis area, assuring that analysis is fundamentally driven and based on industry-specific intelligence  Efficient loan and collateral processes, documentation, and controls, which has resulted in a low NPL track record Discussion on sizing, collateral, structure etc. Superior Committee Approval Tickets over R$ 15 MM
  • 10. 10/37Investor Relations | 2Q17 | September 30rd, 2016  Currencies (89%): Dollar, Euro, Yen, Pound, Canadian Dollar, Australian Dollar  Commodities (8%): Sugar, Soybean ( Grain, Meal and Oil), Corn, Cotton, Metals, Energy  Fixed income (3%): Fixed, Floating, Inflation, Libor FICC Solid trackrecord. Market Segments Competitive Advantages  One Stop Shop: credit and risk mitigation  Every transaction demands prior credit approval  Collaterals surpass approved derivative’s limits  Agility| Client Focused| Diversification  Average of 30 days to close a derivative transaction (domestic large banks average - 90 days) Sample Transaction Trader prices the transaction, including spread Treasury hedges the transaction Transaction closed Treasury informs the spot price Global Derivatives Agreement (ISDA Master Agreement) • Limits • Types of Derivatives • Collaterals • Market Risk: 100% Hedged • Limits PINE Credit Analysis Process FICC • Credit Analysis • Collaterals • Cross-selling opportunity • Credit Committee Approval Client 1st 2nd Margin Calls ManagementDerivatives
  • 11. 11/37Investor Relations | 2Q17 | Pine Investimentos 5th player in volume of CRI’s origination and 7th place in number of short-term fixed income operations Operating Model Selected Transactions Pine Investimentos Financial AdvisoryCapital Markets Project Finance  Fixed Income (CRIs, CRAs)  Infrastructure Debentures  Equities  Securitization  Hybrid capital transactions  Project & Structured Finance Investidores  Family Offices  Individuals  Companies  Asset Managers  Financial Institutions  Pension Funds  Foreign Investors  Hedge Funds January, 2017 Structure Credit Facility R$ 6,000,000 Lead Coordinator January, 2017 Structure Credit Facility R$ 15,000,000 Lead Coordinator March, 2017 CCBI R$ 15,000,000 Lead Coordinator March, 2017 Promissory Note R$ 35,000,000 Coordinator March, 2017 CRI R$ 47,000,000 Lead Coordinator March, 2017 Structure Credit Facility R$ 90,000,000 Lead Coordinator May, 2017 R$ 60,000,000 Bond May, 2017 Promissory Note R$ 40,000,000 Lead Coordinator May, 2017 BRDE Bank Guarantee R$ 10,000,000
  • 12. 12/37Investor Relations | 2Q17 | Strategic Partnerships About DEG About PROPARCO Group Structure Group Structure DEG and PROPARCO  Founded in 1962 in Germany, DEG is one of the largest institutions in Europe that contribute to growth and development of private companies in emerging market  It belongs to the KFW Bankengruppe, Germany's largest public development bank  Promotes development of private enterprises in emerging markets through long-term financing Consolidated Assets EUR 5.8 billion December, 2016  Founded in 1977 in Paris, started it´s activities in Brazil in 2006  Proparco is the subsidiary of Agence Francaise de Dévelopement ( AFD)  Focused on emergence of a strong and innovative private sector with aim of supporting growth and sustainability in Emerging Market Consolidated Assets EUR 5.4 billion December, 2016 57% French Financial Institutions International Financial Organisations French Companies Investment funds & Foundations 26% 13% 3% 1%
  • 13. 13/37Investor Relations | 2Q17 | Corporate Governance
  • 14. 14/37Investor Relations | 2Q17 | Organizational Structure Non-bureaucratic Culture, entrepreneurial and meritocratic with a flat hierarchy INTERNAL AUDIT COMPENSATION COMMITTEE AUDIT COMMITTEE EXTERNAL AUDIT PWC Rodrigo Pinheiro Igor Pinheiro Noberto Pinheiro Norberto Zaiet Gustavo Junqueira Mailson de Nóbrega Vice Chairman Member Chairman Member Independent Member Independent Member BOARD OF DIRECTORS RISKS COMMITTEE Corporate & IB Mauro Sanchez Finances Welinton Gesteira Operations Ulisses Alcantarilla Business João Brito Structuring- DCM Investment Banking Corporate Banking Assets and Liabilities Back-office Collaterals Management Management Special Assets Middle Office Exchange Services Register Sales & Trading International Research Macro / Commodities/ Companies Funding & Distribution Marketing Investor Relations Structured Products ALM e FLOW Accounting and Tax Planning Market and Liquidity Risks Strategic Planning and P&L Commercial Planning and Valuation CEO Norberto Zaiet Jr. IT Eugenio Fabbri HR Camilla Suave Credit Marcelo Camargo Legal & Compliance Jefferson Miceli
  • 15. 15/37Investor Relations | 2Q17 | Corporate Governance Pine is committed to best corporate governance practices  Two Independent Members on the Board of Directors  Mailson Ferreira da Nóbrega: Brazil’s Finance Minister from 1988 to 1990  Gustavo Junqueira: Former Head of Pine Investimentos, Member of the Board of Directors at EZTEC, Financial Advisor at Arsenal Investimentos and CFO at Gradiente Eletrônica  São Paulo Stock Exchange (BM&FBOVESPA) Level 2 Corporate Governance  Audit and Compensation Committee reporting directly to the Board of Directors  100% tag along rights for all shareholders, including non-voting shares  Arbitration procedures for fast settlement of litigation cases
  • 16. 16/37Investor Relations | 2Q17 | Social Investment and Responsibility Focus on the short, medium and long term. Social Investment Recognition Partnerships Most Green Bank Recognized by the International Finance Corporation (IFC), private agency programs of the World Bank as the most "green" bank as a result of its transactions under the Global Trade Finance Program (GTFP) and its onlending to companies focused on renewable energy and ethanol Efficiency Energy Recognition by World Bank for support in the Energy Efficiency sector. Responsible Credit “Lists of Exceptions”: the Bank does not finance projects or those organizations that damage the environment, are involved in illegal labor practices or produce, sell or use products, substances or activities considered prejudicial to society. System of environmental monitoring, financed by the IADB and coordinated by FGV, and internally-produced sustainability reports for corporate loans Protocolo Verde – “Green Protocol”, an agreement between FEBRABAN and the Ministry of the Environment to support development that does not compromise future generations. Exhibition and sponsorship of Brazilian artists, for instance Paulo von Poser and Miguel Rio Branco, in addition to sponsoring and supporting films and documentaries such as Quebrando o Tabu (Fernando Henrique Cardoso on the drug war), O Brasil deu certo, e agora? (idealized by Mailson da Nóbrega), Além da Estrada (Charly Braun) and others. Sustainability Annual Report Seventh consecutive year disclosing the Sustainability Report in the GRI standard. The 2015 report, with its high level of clarity, transparency and quality was recognized with the fourth place in the Abrasca Annual Report Award, considering its category of companies with net income to R$3 billion.
  • 17. 17/37Investor Relations | 2Q17 | Economic Overview
  • 18. 18/37Investor Relations | 2Q17 | 17.617.5 19.2 23.5 16.4 19.1 15.3 12.012.5 10.19.9 11.7 8.5 8.4 11.0 13.6 14.1 9.9 7.3 8.6 9.5 5 10 15 20 25 2000 2004 2008 2012 2016 2020 Forecast Selic (interest rate, average) Média móvel 4 anos 4.4 1.4 3.1 1.1 5.8 3.2 4.0 6.1 5.1 -0.1 7.5 3.9 1.9 3.0 0.1 -3.9-3.8 0.3 1.8 2.5 1.5 -6 -4 -2 0 2 4 6 8 10 2000 2004 2008 2012 2016 2020 Forecast Real GDP growth rate (%) Média móvel 4 anos Macroeconomic Real GDP SELIC IPCA (CPI) Gross Government Debt Due to the challenging economic scenario... Moving Avarage 4 years Moving Avarage 4 years 6.0 7.7 12.5 9.3 7.6 5.7 3.1 4.5 5.9 4.3 5.9 6.5 5.8 5.9 6.4 10.7 6.3 3.5 4.2 4.3 4.0 2.5 3.5 4.5 5.5 6.5 7.5 8.5 9.5 10.5 11.5 12.5 13.5 2000 2004 2008 2012 2016 2020 Forecast IPCA (CPI) 67 76 72 68 67 55 57 56 59 52 51 55 53 59 66 70 75 76 77 79 50 60 70 80 90 2000 2004 2008 2012 2016 2020 Forecast Gross government debt (% GDP)
  • 19. 19/37Investor Relations | 2Q17 | Credit Growth Corporate and Households Credit/GDP Public Banks, National and Internacional Privates Banks Interest and Spread ... the credit environment is directly affected... -20 -10 0 10 20 30 40 50 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Credit growth (% YoY, nominal)) Corporate Households 4.3 - 7.3 5 10 15 20 25 30 35 2011 2012 2013 2014 2015 2016 2017 Interest and Spread - Corporate (% YoY) Investment Funding Spread 24.8 15.4 9.4 -20 -10 0 10 20 30 40 50 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Credit growth (% YoY, nominal) Public banks National private banks 5.1 30 35 40 45 50 55 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 (%) Total credit/GDP (%) 48.2
  • 20. 20/37Investor Relations | 2Q17 | Expectations ...however, we expect that this scenario has a slight improvement in 2017. Source: Pine Bank, June 2017 Brazil: Key Economic Indicators - PINE INDICATORS 2012 2013 2014 2015 2016E 2017E 2018E Real GDP growth rate (%) 1.9% 3.0% 0.5% -3.8% -3.6% 0.3% 1.8% BRLUSD (eop) 2.08 2.35 2.65 3.87 3.35 3.19 3.40 BRLUSD (average) 1.95 2.16 2.35 3.34 3.48 3.18 3.27 IPCA (CPI) 5.8% 5.9% 6.4% 10.7% 6.3% 3.4% 4.2% IGP-M (PPI) 7.8% 5.5% 3.5% 10.5% 7.2% -1.0% 5.4% Selic (interest rate, eop) 7.25% 10.00% 11.75% 14.25% 13.75% 7.25% 7.25% Selic (interest, average) 8.46% 8.44% 11.02% 13.58% 14.15% 9.90% 7.25% Trade balance (USD bn) 19.4 2.6 -3.9 19.7 47.7 60.0 55.0 Current account (USD bn) -74.2 -74.8 -104.2 -58.9 -23.5 -10.0 -20.0 Current account (% GDP) -3.0% -3.0% -4.2% -3.3% -1.3% -0.5% -0.9% FDI (US$bn) 87 69 97 75 79 80.0 80.0 Primary surplus (% GDP) 2.2% 1.7% -0.6% -1.9% -2.5% -2.4% -1.4% Gross government debt (% GDP) 54.8% 53.3% 58.9% 66.4% 69.5% 74.6% 76.1%
  • 21. 21/37Investor Relations | 2Q17 | Highlights and Results
  • 22. 22/37Investor Relations | 2Q17 | Highlights  Liquid balance sheet with a cash position of R$1.4 billion, above 1.0x Shareholders’ Equity.  Excess capital, with a BIS ratio of 14.6%, being 14.2% Tier I Capital.  Loan portfolio coverage ratio over 7% as a result of the significant increase in provisions in the previous periods.  Pine Investimentos: 5th player in volume of CRI’s origination.  Continuous liability management with a diversified portfolio and adequate terms.  Pine launched its digital investment platform, Pine Online.
  • 23. 23/37Investor Relations | 2Q17 | 7,409 6,859 Sept-15 Dec-15 Total Funding -7.4% 1,181 1,163 Sept-15 Dec-15 Shareholders' Equity -1.5% 3.5% 3.6% 3Q15 4Q15 ROAE 0.1 p.p 2.9% 3.2% 3Q15 4Q15 NIM Evolution 0.33 p.p. 10 10 3Q15 4Q15 Net Income Financial Highlights 1 Includes Stand by LCs, Bank Guarantees, Credit Securities to be Received and Securities (bonds, CRIs, eurobonds and fund shares) R$ million 7,691 6,933 Sept-15 Dec-15 Total Loan Portfolio 1 -9.9% 6,271 6,465 6,582 Jun-16 Mar-17 Jun-17 Total Loan Portfolio1 + 1.8% + 5.0% 1 -21 1H16 1H17 -2.4% 0.2% -7.3% 2Q16 1Q17 2Q17 ROAE -490 bps. - 750 bps. 0.2% -3.6% 1H16 1H17 ROAE -380 bps 2.0% 3.4% 2.9% 2Q16 1Q17 2Q17 NIM + 90 bps. - 50 bps.
  • 24. 24/37Investor Relations | 2Q17 | Revenue Mix Product and Revenue Diversification Business Lines Credit 68.0% FICC 15.9% Pine Investimentos 7.8% Treasury 8.3% 1H17 Credit 66.8% FICC 20.6% Pine Investimentos 6.1% Treasury 6.5% 1H16
  • 25. 25/37Investor Relations | 2Q17 | NIM and Efficiency Ratio NIM Expenses and Efficiency Ratio 21 21 22 16 18 19 86.7% 61.2% 68.9% -100% -80% -60% -40% -20% 00% 20% 40% 60% 80% 100% 0 5 10 15 20 25 30 35 40 2Q16 1Q17 2Q17 41 43 32 37 84.0% 64.8% -100% -80% -60% -40% -20% 00% 20% 40% 60% 80% 100% 0 20 40 60 80 100 120 140 1H16 1H17 Personnel Expenses Other administrative expenses Recurring Efficiency Ratio (%) 2.0% 3.4% 2.9% 2Q16 1Q17 2Q17 NIM + 90 bps. - 50 bps.
  • 26. 26/37Investor Relations | 2Q17 | 3,139 3,275 3,468 3,673 3,773 659 520 437 370 298 2,122 2,104 2,120 2,022 2,123 351 339 419 399 388 Jun-16 Sept-16 Dec-16 Mar-17 Jun-17 Trade finance: 5.9% Bank Guarantees: 32.3% BNDES Onlending : 4.5% Working Capital: 57.3% 6,238 6,445 6,465 6,271 6,582 1 Includes Stand by LC 2 Includes debentures, CRIs, Hedge Fund Shares, Eurobonds, Credit Portfolio acquired from financial institutions with recourse and Individuals R$ million Loan Portfolio The portfolio amounted to R$6.6 billion... 1 + 5.0% + 1.8% 2
  • 27. 27/37Investor Relations | 2Q17 | New Operations ... facing lower average ticket and better quality for the new operations... Ratings Sectors Average Ticket Evolution (R$ thousand) 17,694 15,000 17,000 19,000 21,000 23,000 25,000 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 Average Ticket Evolution 25,953 Energy 20% Chemical and petrochemical 17% Real Estate 11% Agriculture 9%Transportation and logistics 9% Sugar and ethanol 8% Engineering 6% Others 40% AA-B 91% C 9%
  • 28. 28/37Investor Relations | 2Q17 | Continuous Loan Portfolio Management Sectors Rebalance ...always focusing on sector diversification.  Diversified growth (lower tickets and increased number of clients).  The composition of the portfolio of the 20 largest clients changed by over 30% in the past twelve months.  The share of wallet of the 20 largest clients remained at around 30%, in line with market peers. Real Estate 12% Sugar and Ethanol 11% Agriculture 11% Energy 11% Engineering 10% Transportation and Logistics 6% Telecom 5% Specialized Services 4% Retail 3% Foreign Trade 3% Metallurgy 2% Construction Material 2% Mining 2% Vehicles and Parts 2% Food Industry 1% Meatpacking 1% Other 11% 39%37%38%40%44% 6%7%7%5% 5% 10%10%9%8% 7% 11%12%12%12% 11% 11%10%10%10%7% 11%12%12%12%14% 12%12%12%13%12% Jun-17Jun-16Jun-15Jun-14Jun-13 Real Estate Sugar and Ethanol Agriculture Energy Engineering Transportation and Logistics Others
  • 29. 29/37Investor Relations | 2Q17 | 1D-H Portfolio: D-H Portfolio / Loan Portfolio Res. 2,682 2Coverage of Total Portfolio: Provisions / Loan Portfolio Res. 2,682 June 30th, 2017 Contracts Overdue: total amount of the contracts overdue for more than 90 days / Loan Portfolio excluding Bank Guarantees and Stand-by Letters of Credit. Loan Portfolio Quality -85% of the loan portfolio is classified between AA-C ratings. Loan Portfolio Quality – Res. 2,682 Credit Coverage Non Performing Loans > 90 days (Total Contract) Collaterals 1 2 3.7% 0.7%0.6% 1.5%1.3% 0.7% 1.7% 1.2% 1.8% Jun-17Mar-17Dec-16Sept-16Jun-16Mar-16Dec-15Sept-15Jun-15 Tangible Movable Property 31% Receivables 8% Real State 55% Financial Assets 6% AA-A 28.5% B 23.6% C 34.2%D-E 5.9% F-H 7.8% 13.8% 15.5% 13.7% 5.9% 5.9% 7.1% 00% 02% 04% 06% 08% 10% 12% 00% 02% 04% 06% 08% 10% 12% 14% 16% 18% Jun-16 Mar-17 Jun-17 D-H Portfolio Coverage of Total Portfolio
  • 30. 30/37Investor Relations | 2Q17 | R$ million Funding Diversified sources of funding. 648 617 460 464 446 261 376 384 460 421 1,939 2,600 2,980 3,241 3,893 156 133 46 72 114 19 29 17 11 27 668 530 454 383 331 296 198 213 240 203 734 259 247 203 176 216 206 204 86 89 718 698 448 386 403 270 262 239 150 1785,925 5,908 5,692 5,697 6,280 Jun-16 Sept-16 Dec-16 Mar-17 Jun-17 Trade Finance: 2.8% Multilateral Lines: 6.4% International Capital Markets: 1.4% Financial Letter : 2.8% Local Capital Markets: 3.2% Onlending: 5.3% Demand Deposits: 0.4% Interbank Time Deposits: 1.8% High Net Worth Individual Time Deposits: 62% Corporate Time Deposits: 6.7% Institutional Time Deposits: 7.1%
  • 31. 31/16Relações com Investidores | 2T17 | PINE ONLINE  Pine launched its digital investment plataform, Pine Online  Products: CDBs, LCAs e LCIs  Website: www.pineonline.com.br  App: IOS and Android
  • 32. 32/37Investor Relations | 2Q17 | Leverage: Expanded Loan Portfolio / Shareholders’ Equity Expanded Loan Portfolio excluding Bank Guarantees and Stand-by Letters of Credit / Shareholders’ Equity Credit over Funding ratio: Loan Portfolio excluding Bank Guarantees and Stand-by Letters of Credit / Total Funding Asset & Liability Management Matching assets’ and liabilities’ duration. Leverage Credit over Funding Ratio Total Deposits over Total Funding R$ millionR$ billion Asset and Liability Management (ALM) 5.4x 5.4x 5.6x 5.6x 5.8x 3.6x 3.6x 3.8x 3.8x 4.0x - 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00 9.00 10.00 Jun-16 Sept-16 Dec-16 Mar-17 Jun-17 Expanded loan Porfolio Loan Portfolio excluding Bank Guarantees 70% 70% 76% 78% 71% Jun-16 Sept-16 Dec-16 Mar-17 Jun-17 1.1 1.1 5.8 0.00.5 0.5 Assets 0.1 0.7 4.0 2.7 0.2 1.3 Liabilities 9.0 9.0 Coverage of 145% Cash and cash equivalents Assets financed through REPOs Other assets Credit Portfolio Trading portfolio assets Illiquid assets Secured funding Other liabilities Unsecured funding Demand deposits Equity REPO Financing 51% 64% 68% 75% 78% 49% 36% 32% 25% 22% Jun-16 Sept-16 Dec-16 Mar-17 Jun-17 Total Deposits Others 5,6975,925 5,908 5,692 6,277
  • 33. 33/37Investor Relations | 2Q17 | Capital Adequacy Ratio (BIS), Basel III BIS ratio of 14.6%, being 14.2% in Tier I Capital. 15.4% 15.3% 15.0% 14.7% 14.2% 0.5% 0.5% 0.4% 0.4% 0.4% Jun-16 Sept-16 Dec-16 Mar-17 Jun-17 Tier II Tier I Minimum Regulatory Capital (10.5%) 14.6% 15.1%15.4%15.8%15.9%
  • 34. 34/37Investor Relations | 2Q17 | Rating Foreign andLocal Currency Long Term B+ BB- B1 National Long Term BBB+ A Baa2
  • 35. 35/37Investor Relations | 2Q17 | R$ million Jun-17 Mar-17 Jun-16 QoQ (%) YoY (%) Assets 8,975 8,703 8,436 3.1% 6.4% Cash 200 90 71 123.2% 183.9% Interbank investments 1,116 475 836 134.9% 33.6% Securities 2,672 3,194 2,893 -16.3% -7.6% Interbank accounts 1 1 1 24.6% 45.5% Lending operations 4,013 3,967 3,746 1.1% 7.1% (-) Provisions for loan losses (285) (235) (223) -21.3% -5.5% Net lending operations 3,727 3,732 3,523 -0.1% 5.8% Other receivables 1,141 1,094 994 4.3% 14.7% Property and equipments 118 117 119 0.2% -1.2% Investments 108 108 108 0.0% -0.4% Property and equipment in use 10 9 10 2.6% -8.2% Intangible 0 0 1 -1.0% -24.4% Liabilities 7,848 7,549 7,270 4.0% 8.0% Deposits 3,709 3,014 1,976 23.1% 87.7% Money market funding 465 640 612 -27.3% -23.9% Funds from acceptance and securities issued 1,417 1,485 1,913 -4.6% -25.9% Interbank and Interbranch accounts 7 1 11 376.6% -32.7% Borrowings and onlendings 912 920 1,542 -0.9% -40.9% Derivative financial instruments 1,064 1,223 709 -13.0% 50.1% Other liabilities 175 161 441 8.6% -60.3% Deferred Results 100 105 67 -4.2% 49.6% Shareholders' equity 1,127 1,154 1,165 -2.4% -3.3% Liabilities and shareholders' equity 8,975 8,703 8,436 3.1% 6.4% Balance Sheet
  • 36. 36/37Investor Relations | 2Q17 | Managerial Income Statement (overhedge effect) R$ million 2Q17 1Q17 2Q16 1H17 1H16 Income from financial intermediation 242 173 71 416 164 Lending transactions 131 118 114 249 235 Securities transactions 72 75 79 147 156 Derivative financial instruments 10 14 (67) 23 (139) Foreign exchange transactions 30 (33) (55) (3) (88) Expenses with financial intermediation (251) (145) (74) (396) (161) Funding transactions (159) (137) (113) (296) (237) Borrowings and onlendings (42) 10 72 (32) 135 Provision for loan losses (50) (17) (33) (67) (60) Gross income from financial intermediation (8) 29 (4) 20 3 Other operating (expenses) income (31) (22) (23) (53) (46) Fee income 20 20 15 40 32 Personnel expenses (22) (21) (21) (43) (41) Other administrative expenses (19) (18) (16) (37) (32) Tax expenses (4) (4) (5) (8) (12) Other operating income 3 37 15 40 25 Other operating expenses (8) (36) (11) (45) (18) Operating income (39) 6 (26) (33) (44) Non-operating income 2 0 3 3 12 Income before taxes and profit sharing (37) 7 (23) (30) (31) Income tax and social contribution 20 (0) 18 20 40 Profit sharing (4) (6) (2) (11) (7) Net income (21) 1 (7) (21) 1
  • 37. 37/37Investor Relations | 2Q17 | Income Statement R$ million 2Q17 1Q17 2Q16 1H17 1H16 Income from financial intermediation 239 182 92 421 224 Lending transactions 131 118 114 249 235 Securities transactions 72 75 79 147 156 Derivative financial instruments 6 22 (46) 28 (79) Foreign exchange transactions 30 (33) (55) (3) (88) Expenses with financial intermediation (251) (145) (74) (396) (161) Funding transactions (159) (137) (113) (296) (237) Borrowings and onlendings (42) 10 72 (32) 135 Provision for loan losses (50) (17) (33) (67) (60) Gross income from financial intermediation (12) 37 18 25 63 Other operating (expenses) income (31) (22) (23) (53) (46) Fee income 20 20 15 40 32 Personnel expenses (22) (21) (21) (43) (41) Other administrative expenses (19) (18) (16) (37) (32) Tax expenses (4) (4) (5) (8) (12) Other operating income 3 37 15 40 25 Other operating expenses (8) (36) (11) (45) (18) Operating income (43) 15 (5) (28) 16 Non-operating income 2 0 3 3 12 Income before taxes and profit sharing (40) 15 (1) (25) 28 Income tax and social contribution 23 (8) (4) 15 (20) Profit sharing (4) (6) (2) (11) (7) Net income (21) 1 (7) (21) 1
  • 38. 38/37Investor Relations | 2Q17 | 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. Investor Relations Norberto Zaiet Junior CEO João Brito CFO Raquel Varela Bastos Head of Investor Relations, Local Funding and Communication Luiz Maximo Investor Relations Manager Kianne Paganini Investor Relations Analyst Phone: (55 11) 3372-5343 ir.pine.com ir@pine.com