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1Q08 Earnings Presentation
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The Bank's financial statements are presented on a consolidated and pro-forma basis, encompassing the financial statements of Paraná Banco, its subsidiaries, the Credit Receivables Investment Funds Paraná Banco I, the Credit Receivables Investment Fund Paraná Banco II (FIDCs) and the insurer J. Malucelli Seguradora.
In the 1Q07, Paraná Banco retained only 15% ofJ.Malucelli Seguradora. The pro-forma statements of this period include 100% of the insurer.
The statements were prepared based on the accounting practices pursuant to Brazilian Corporate Law, and associated with the regulations and instructions issued by the National Monetary Council (“CMN”), the Brazilian Central Bank (“BACEN”) and the Brazilian Securities and Exchange Commission ("CVM").
Overview
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Niche Bank, focused on payroll-deductible and middle-market loans.
Focus on profitability and a low-risk customer base (civil servants, private-sector employees and INSS social security system retirees and pensioners).
At the close of the 1Q08, the Bank had 700 payroll-deduction loan agreements (state and private entities).
Four sales channels: brokers, call center, franchises and own stores.
The Franchise Channel closed the quarter with 81 operational units spread through several important regions of the country.
Paraná Banco concluded the acquisition of 100% of J. Malucelli Seguradora, as outlined in the IPO Prospectus. The acquisition was ratified by SUSEP in April of this year.
Paraná Banco has filed a request with SUSEP seeking authorization to constitute Brazil’s first private-sector reinsurance company, J. Malucelli Resseguradora S/A.
Paraná Banco Operating Highlights
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Total Originations(R$ ‘000)
Number of Agreements
70%
20%
Call CenterCall Center
FranchisesFranchises
Distribution Channels
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BrokersBrokers
• Control over operational and image-related risks
• Guaranteed exclusivity and long-term agreements
• Expansion of product mix
Network of 568 brokers nationwide
81 franchises in operation and 21
under development
• The segment’s most traditionalchannel
• Highly scalable model
• Wide spectrum of agreements
• User-friendly IT system: Brokers’ Portal
• Extensive capillarity
• Absence of commissions
• Portfolio defense
• Acquisition of debts
• Refinancing
• Marketing campaigns
Total Assets and Shareholders’ Equity(R$ ’000)
Total Assets Shreholders’ Equity
1,043
1,882 1,972
1Q07 4Q07 1Q08
89%
5%
336%
5%
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722,5
1.210,6 1.310,9
1T07 4T07 1T08
Loan Portfolio
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The loan portfolio totaled R$ 1,310.09 million in the 1Q08
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8%
81%
1Q07 4Q07 1Q08
1,310.91,210.6
722.5
Portfolio Quality
High Quality and Exceptional Stability
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96.1%
3.9%
1Q08
AA-C D-H
94.9%
5.1%
1Q07
Market Funding Operations(R$ ‘000)
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709,264.00
923,045.00
30.1%
620,464.00
877,741.00
88,800.00
45,304.00
1Q07 1Q08
Total Deposits Funds, acceptances and securities
Summary of Financial Indicators and Highlights
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1Q07 1Q08 1Q07 x 1Q08 4Q07 4Q07 x 1Q08
Net income 10,175 23,628 132.2% 36,124 -34.6%
Shareholders’ equity 186,959 815,867 336.4% 776,572 5.1%
Total assets 1,042,700 1,971,872 89.1% 1,881,567 4.8%
Return on average equity (annualized) 20.2% 12.4% -7.8 p.p. 18.6% -6.7 p.p.
Return on average assets (annualized) 3.7% 5.0% -1.3 p.p. 7.9% -3.0 p.p.
Net interest margin(annualized) 17.7% 14.8% -2.9 p.p. 17.9% -3.1 p.p.
Financial Revenues and Loan Assignments
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1Q07 1Q08 1Q07 x 1Q08 4Q07 4Q07 x 1Q08
Income from loan operations 60,233 75,706 25.7% 79,974 -5.3%
Income ffrom securities operations 3,241 10,752 231.7% 15,475 -30.5%
Revenue from financial operations 64,996 86,458 33.0% 95,449 -9.4%
Total originations 169,210 307,021 81.4% 365,231 -14.9%Payroll-deductible originations 166,500 283,450 70.2% 235,953 20.1%Middle-market originations 2,710 23,571 769.8% 129,278 -78.8%
Loan assignments (other institutions) 20,079 - -100.0% - n/aLoan Assignments (FIDCs) 110,854 73,167 -34.0% 80,378 -9.0%Loan portfolios acquired - - n/a 33,400 -100.0%% assigned to other institutions 12.1% 0.0% 0.0%% assigned to FIDCs (payroll-deductible) 66.6% 25.9% -40.7 p.p. 34.1% 8.2 p.p.
OperatingRevenue (Expenses)
Operating Revenue (Expenses) (R$ ‘000)
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1Q07 1Q08 1Q07 x 1Q08 4Q07 4Q07 x 1Q08
Personnel expenses (2,264) (5,578) 146.4% (5,520) 1.1%
IPO expenses - - n/a (504) -100.0%
Commissions paid (payroll-deductible loan origination) (10,726) (9,226) 16.3%
Other administrative and operating revenue (expenses) (4,356) 3,920 n/a (4,985) -178.6%
(11,786) 9%
Alternative Channels vs. Commissions on payroll-deductible loan originations
* Alternative channels comprise franchises, own stores and the call center
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Evolution of Commissions on Loan Origination8.10%
7.60%
7.10%
1Q06 1Q07 1Q08
6% 5%
3% 9%7%
10%
21%
28%
31%
1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08
Begin of Franchise Operations
% of Payroll DeductibleLoanOrigination
Evolution of Alternative Distribution Channels
Surety Bond Market
* Source: SUSEP
Surety Bond Premiums – Annual Trends (R$ ‘000)
50%42%37%24% 34% 30%28%27%
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27% 28% 24% 34% 30% 37% 42%
50%77,94698,639
164,550134,749
205,368167,642
194,664
346,224
2000 2001 2002 2003 2004 2005 2006 2007
J. MALUCELLI SEGURADORA S/A Other Insurance Companies
Surety Bond Market
Claims and Claims Ratio Trends
• Source: SUSEP
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-
10.000
20.000
30.000
40.000
50.000
60.000
70.000
80.000
2000 2001 2002 2003 2004 2005 2006 2007
R$ x
1,0
00
Insurance Claims - Market
Insurance Claims - J. Malucelli Seg 4.7%3.7%
0%
10%
20%
30%
40%
50%
2000 2001 2002 2003 2004 2005 2006 2007
Claims Ratio - Market
Claims Ratio - J. Malucelli Seguradora
60.887 69.612
1T07 1T08
27.746
48.521
1T07 1T08
J. Malucelli Seguradora (R$ ‘000)
Premiums Written Shareholders’ Equity
16
74.9% 13.5%
27,746
60,887
48,52169,612
1Q07 1Q08 1Q07 1Q08
Ratings
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11,39
Rating Rating / Ranking Rating / Ranking RatingbrBBB+ 10,87 brA- A-
Low Credit Risk Low Risk – Medium Term
Low Credit Risk Low Credit Risk
February 2008 April 2008 November 2007 March 2008
Corporate Governance
On October 19, 2007, the Board of Directors authorized a stock buy-back program involving the purchase of up to 4,156,481 shares byOctober 15, 2008.
Paraná Banco hired BANCO UBS PACTUAL S.A. as the market maker for its preferred shares for a six-month period, automatically renewable, in order to improve the shares’ liquidity.
Paraná Banco’s Fiscal Council was installed on March 14, 2008.
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Share Performance PRBC4
19
0
20
40
60
80
100
120
13/6
21/6
29/6
10/7
18/7
26/7 3/8
13/8
21/8
29/8 6/9
17/9
25/9
3/10
11/1
022
/10
30/1
08/
1119
/11
28/1
16/
1214
/12
26/1
27/
115
/123
/1 1/2
13/2
21/2
29/2
10/3
18/3
27/3
SHAR
E PR
ICE
( Bas
e 100
)
DAIL
Y TR
ADED
VOL
UME
(R$)
70,000,000
60,000,000
50,000,000
40,000,000
30,000,000
20,000,000
10,000,000
0
Luis César Miara André NacliCFO and Investor Relations Officer IR Analyst
Phone: (55 41) 3351-9961 Phone: (55 41) 3351-9645
Ricardo Rosanova Garcia Mauricio N. G. FanganielloIR Manager IR Coordinator
Phone: (55 41) 3351-9812 Phone: (55 41) 3351-9765
e-mail: [email protected] Website: www.paranabanco.com.br/ir
IR Contacts
This presentation may include estimates and forward-looking statements. These estimates and forward-looking statements are to a large extent based on current expectations and projections regarding future events and financial trends that affect or may come to affect our business. Many important factors may adversely affect the results of Paraná Banco as described in our estimates and forward-looking statements. These factors include, but are not limited to, the following: the Brazilian and international economic situation, fiscal, foreign-exchange and monetary policies, higher competition in the payroll-deductible loan segment, the ability of Paraná Banco to obtain funding for its operations, and amendments to Central Bank regulations.The words “believe”, “may”, “could”, “seek”, “estimate”, “continue”, “anticipate”, “plan”, “expect” and other similar words are intended to identify estimates and projections. The considerations involving estimates and forward-looking statements include information related to results and projections, strategies, competitive positioning, the industry environment, growth opportunities, the effects of future regulations, and the impact from competitors. Said estimates and projections refer only to the date on which they were expressed, and we do not assume any obligation to publicly update or revise any of these estimates arising from the occurrence of new information, future events, or any other factors. In view of the risks and uncertainties described above, the estimates and forward-looking statements contained herein may not materialize. Given these limitations, shareholders and investors should not make any decisions based on the estimates, projections and forward-looking statements contained herein.
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