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- 1 - Any redistribution of this information is strictly prohibited.
Copyright © 2014 EMIS, all rights reserved.
Produced by:
Any redistribution of this information is strictly prohibited.
Copyright © 2014 EMIS, all rights reserved.
Banking Sector Brazil
March 2014
- 2 - Any redistribution of this information is strictly prohibited.
Copyright © 2014 EMIS, all rights reserved.
Table of Contents
I. Overview
1. Sector Highlights
2. Key Indicators
3. Market Share Public vs. Private Banks
4. Evolution of Bank Institutions
5. Financial Performance
6. Forecast
7. Liquidity and Funding
8. Loan Portfolio Evolution
9. Credit Distribution
10. Non Performing Loans
11. Spread and Delinquency Evolution
12. Corporate Credits Key Indicators
13. Lending Rate/Corporate Credits
14. Credit to Individuals Key Indicators
15. Lending Rate/Individuals
16. Deposits
17. Bank Cards
18. Government Policy
II. Public Banks
1. Subsector Highlights
2. Public Banks’ Loan Portfolio
3. Profitability of Public Banks
4. Efficiency and Expenses
III. Private Banks
1. Subsector Highlights
2. Private Banks’ Loan Portfolio
3. Profitability of Private Banks
4. Financial Performance and Market Share
5. Efficiency and Expenses
IV. Main Players
1. BNDES
2. BNDES (cont’d)
3. Banco do Brasil
4. Banco do Brasil (cont’d)
5. Itaú Unibanco Holding S.A.
6. Itaú Unibanco Holding S.A. (cont’d)
7. Caixa Econômica Federal
8. Caixa Econômica Federal (cont’d)
9. Banco Bradesco S.A.
10. Banco Bradesco S.A. (cont’d)
11. Banco Bradesco S.A. (cont’d)
V. Appendix
1. Abbreviations
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Copyright © 2014 EMIS, all rights reserved.
I. Sector Overview
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Copyright © 2014 EMIS, all rights reserved.
Sector Highlights
The Brazilian government has lately been accused of lack of control over public spending due to the sharp increase in lending by state banks,
funded predominantly by public money. Analysts note that if public banks reduce their credit portfolios they will not need contributions from the
National Treasury, which will improve control over public spending. As a consequence of uncontrolled lending by state-run financial institutions,
Standard & Poor's has cut Brazil's credit rating to BBB-, citing fiscal deficit, fragile economic growth and the galloping rise in public banks' loan
portfolio as the main reasons for the downgrade.
In 2013, Brazil participated in the Regulatory Consistency Assessment Program (RCAP), an assessment program of the Basel Committee on
Banking Supervision (BCBS), that evaluates the degree of adherence of prudential regulation of a country to the minimum standards approved by
BCBS and endorsed by the Group of 20 leading economies. Brazil received the highest score for capital regulation of the financial system. Out of
the 14 components evaluated, 11 were considered as "Compliant". The other components of the evaluation were considered "Largely Compliant”.
The RCAP, in conjunction with the Financial Sector Assessment Program (FSAP) conducted in 2012 by the World Bank and the IMF, confirmed that
the Brazilian financial system was sound and resilient.
The Brazilian banking system is highly consolidated as a result of significant M&A activity. The six leading banks in the country account for 80% of
the overall bank assets. Federal public banks (Banco do Brazil and Caixa Economica Federal) have maintained a solid position among the four
largest banks in terms of assets over the past years, despite the emergence of large private conglomerates. The largest private banks, Bradesco
and Itaú, have made considerable gains through an accelerated growth and the acquisition of foreign and domestic institutions (BBV by Bradesco,
Bank Boston by Itaú).
Overview
Financial Stability
Credit Rating
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Copyright © 2014 EMIS, all rights reserved.
Source:
Key Indicators
Key Indicators
Bacen, Itau Unibanco, Bradesco
2009 2010 2011 2012 2013
GDP per Capita (USD) 8,469 11,068 12,689 11,611 11,210
GDP (%) -0.3% 7.5% 2.7% 1.0% 2.3%
Credit (% of GDP) 43.7% 45.2% 49.0% 53.8% 56.5%
Total Free Credit (BRL bn) 905 1,058 1,232 1,399 1,504
Credit Growth (%) 15.1% 20.6% 18.8% 16.4% 14.7%
Mortgage Evolution/GDP (%) 3.1% 4.1% 5.3% 6.8% 8.2%
Delinquency Rate > 90 days (%) 5.4% 4.4% 5.6% 5.8% 4.9%
Long Term Interest Rate (TJLP) 6.0% 6.0% 6.0% 5.5% 5.0%
Average SELIC (%) 9.9% 10.0% 11.7% 8.5% 8.3%
Consumer Price Index % (IPCA) 4.3% 5.9% 6.5% 5.8% 5.9%
- 6 - Any redistribution of this information is strictly prohibited.
Copyright © 2014 EMIS, all rights reserved.
Source:
Market Share Public vs. Private Banks
Market Share (%)
Public and Private Banks Performance Dec 2013 (%)
Bank Agencies by Origin of Capital (%)
Bacen, Itau Unibanco
42.0% 40.1% 41.9% 43.4%
40.4% 42.9% 41.4% 40.1%
17.6% 17.0% 16.6% 16.4%
Dec 2010 Dec 2011 Dec 2012 Dec 2013
Public Banks National Private Banks Foreign Banks
Domestic Private Banks
33.2%
Foreign Private Banks
15.5%
State Owned Banks 51.2%
39.7% 51.7% 46.2%
60.3% 48.3% 53.8%
Total Assets Deposits Credit Operations
Public Private
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Copyright © 2014 EMIS, all rights reserved.
Source:
Evolution of Bank Institutions
Distribution of Bank Agencies by Region Dec 2013
Bank Concentration 2013 (%)
Evolution of Bank Institutions
Bacen, Falke Information
Type of
Institution Dec-09 Dec-10 Dec-11 Dec-12 Dec-13
Multiple Banks 139 137 139 137 132
Domestic without
foreign
participation
86 72 69 66 62
Domestic with
foreign
participation
0 12 16 15 15
Under foreign
control 53 53 54 56 55
Commercial
Banks 18 19 20 22 22
Domestic without
foreign
participation
11 12 11 12 11
Domestic with
foreign
participation
- - 1 1 1
Under foreign
control 1 1 2 3 4
Foreign Banks
full branches 6 6 6 6 6
Northeast 3 609 North 1,106
Central West 1 820
Southeast 12 024
South 4,359
87.5% 87.1%
12.5% 12.9%
Total Assets Deposits
10 Major Banks Others
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Copyright © 2014 EMIS, all rights reserved.
Source:
Financial Performance
Evolution of Banks' Net Profit* (BRL bn) Top 10 Banks in Terms of Revenue 2013 (USD bn)
Bacen, Falke Information, * - Accumulated in the last 12 months ended
41.
6
38.
3
37.
0
43.
2
46.
0
48.
6
52.
2
53.
9
55.
5
58.
3
61.
2
59.
7
58.
9
56.
7
53.
7
54.
9
54.
7 5
9.6
61.
1
60.
6
Mar
200
9
Jun
2009
Sep
200
9
Dec
200
9
Mar
201
0
Jun
2010
Sep
201
0
Dec
201
0
Mar
201
1
Jun
2011
Sep
201
1
Dec
201
1
Mar
201
2
Jun
2012
Sep
201
2
Dec
201
2
Mar
201
3
Jun
2013
Sep
201
3
Dec
201
3
Net Profit Net Revenue ROA (%)
Banco do Brasil 8.9 50.6 1.5%
Itau Unibanco 7 41.8 1.4%
Caixa Econômica Federal 3.7 34.3 0.9%
Bradesco 5.7 42.2 1.5%
Santander 2.7 25.2 1.2%
HSBC 0.5 7.3 0.6%
Safra 0.6 5.1 0.9%
BTG Pactual 1.3 1.7 2.2%
Votorantim -0.4 6.4 -0.7%
Citibank 0.2 2.9 0.8%
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Copyright © 2014 EMIS, all rights reserved.
Source:
Financial Performance cont’d
Revenues from Services & Operating Income* (BRL bn)
Annual Return on Equity * (%)
Bacen, * - Accumulated in the last 12 months ended
20.47 21.37 21.83 21.85 22.05 22.04 22.56 22.84
12.97 13.82 14.69 15.40 15.95 16.53 17.17 17.63
49.3 49.3 49.9 51.3 52.7 54.4 55.7 56.1
223.94 226.18 225.10 228.34 230.03 232.01 238.30 233.28
Apr2012
Jul2012
Oct2012
Jan2013
Apr2013
Jul2013
Oct2013
Bank Tariffs Revenues (Indiv. & Corp.) Credit Cards Revenues Other Services Operating profit (before administrative expenses)
-5
0
5
10
15
20
Jan 2010 Jul 2010 Jan 2011 Jul 2011 Jan 2012 Jul 2012 Jan 2013 Jul 2013 Dec 2013
Annual Roe Equity Growth Rate Growth Rate of Gross Income from Loans
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Copyright © 2014 EMIS, all rights reserved.
Source:
Sector Forecast
Financial Services Output, value-added index
Interest Rate (% yoy)
Credit Evolution (%)
Comments
Oxford Economics, Parallaxis Economic Research
Crediting is expected to witness a moderate expansion in Brazil in the
coming years due to a slower pace of economic growth. The lending
will be pushed up mainly by real estate financing. Considering the
expansion of credit supply, the diversification in the activities of
national banks and banks' policies to focus on the main, more secure,
credit lines, the expectation is that the industry will continue to
maintain good levels of growth and profitability. In addition, there are
some important events for the country's economy in the near future
such as the start of exploration of the pre-salt area of Brazil, the FIFA
World Cup 2014 and the Olympics in 2016, that are expected to
stimulate employment and personal income levels. These factors will
contribute to the positive development of local banking services.
190.67 201.57
212.65 223.63
234.75
2014 2015 2016 2017 2018
13.8% 10.2%
17.1%
61.5% 63.9% 69.5%
2014 2015 2016
Credit Growth Credit as % of GDP
10.8% 12.5%
10.5%
3.7% 6.0% 6.0%
1.0%
7.6% 7.2%
2014 2015 2016
Selic rate target - end of year
Real Interest Rate (IPCA deflated)
Interest Rate over Exchange Rate
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Copyright © 2014 EMIS, all rights reserved.
Comments
Source:
Liquidity and Funding
Brazil's banking system is characterised by low liquidity risk, despite its small increase in the second half of 2013. According to the Central Bank, the
liquidity index of the system is 1.52, down from 1.63, due to the decrease in net assets, which coincided with an increase of stressed cash flow. The latter's
growth is explained by the rising trend of the Selic rate in last few months.
Other factors which contributed to the slight rise in liquidity risk were the growth of demand deposits and repurchase agreements, which increased the
banks' liabilities. In 2013, Brazilian banks joined the REFIS, a government tax debt installment programme, which was followed by capital disbursement
and drop in assets and also helped to increase the liquidity risk.
Liquidity (BRL bn) Profile of Attracted Funds (BRL bn)
Bacen
524.1 532.4 574.0
622.0 625.9 587.8
543.3 541.7 529.3
321.7 325.4 343.4 323.5 335.7 323.9 339.6 323.1 347.3
Jan
2012
Apr
201
2
Jul 2
012
Oct
201
2
Jan
2013
Apr
201
3
Jul 2
013
Oct
201
3
Dec
201
3Net Assets Stressed Cash Flow
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
Jun2009
Dec2009
Jun2010
Dec2010
Jun2011
Dec2011
Jun2012
Dec2012
Jun2013
Dec2013
Others
IHCD + LFS
LCA + LCI + LF + DPGE
Commitments (withprivate securities)
Loans andTransfers
Deposits
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Copyright © 2014 EMIS, all rights reserved.
Comments
Source:
Loan Portfolio Evolution
In 2013, the Brazilian banks' loan portfolio saw an increase of 14.6% compared to 2012. The Central Banks expects that in 2014 crediting activity will
register a more moderate expansion of about 13%. Notably, the credit growth rate started to slow down in the second half of last year and caused a
negative effect on the profitability of the system. Individual real estate financing is expected to grow by 15% in 2014 to BRL 126bn. Although this rise is
higher than the forecast for the total loan portfolio, it is less than half of the 32% growth in 2013. Last year's results were due to a 41% increase in
individual financing. As of November 2013, mortgage lending accounted for 8.1% of the GDP.
Outstanding Loans by Sector (BRL mn) Annual Growth of the Loan Portfolio (BRL bn)
CEIC, Bacen, Abecip
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
Jan 2011 Jan 2012 Jan 2013 Jan 2014
Public Sector Industry Real Estate
Rural Commerce Households
Other Services
0
1,000
2,000
3,000
4,000
5,000
6,000
Dec2009
Jun2010
Dec2010
Jun2011
Dec2011
Jun2012
Dec2012
Jun2013
Dec2013
Nonearmarked Earmarked Total
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Copyright © 2014 EMIS, all rights reserved.
Source:
Credit Distribution
Total Credit Distribution (March 2013)
Non-earmarked Credit Distribution (March 2013)
Loans as % of GDP
CEIC, Bacen
24.5
%
24.8
%
26.9
%
29.4
%
30.5
%
19.4
%
20.6
%
22.2
%
24.5
%
26.0
%
43.9
%
45.4
%
49.1
% 53
.9%
56.5
%
Dec 2009 Dec 2010 Dec 2011 Dec 2012 Dec 2013
Corporate Loans as % of GDP Households Loans as % of GDP
Loans: % of GDP
Nonearmarked Credit 58%
BNDES 20%
Agricultural 6%
Housing 13%
Others 3%
Individuals 50%
Corporate Entities 50%
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Copyright © 2014 EMIS, all rights reserved.
Source:
Non Performing Loans
Evolution of Non Performing Loans (%)
NPL per Financial Institution (%)
CEIC
2.1
2.2
2.2
2.3
2.2
2.2
2.2
2.3
2.2 2.4
2.3
2.2
2.2
2.2
2.2
2.3
2.3
2.1
2 2 2 2 1.9
1.8
1.8
5.9
5.9
5.8
5.9
6.0
5.9
5.9
5.9
5.9
5.8
5.7
5.6
5.5
5.4
5.4
5.3
5.3
5.0
5.0
4.8
4.8
4.6
4.5
4.4
4.4
Jan2012
Feb2012
Mar2012
Apr2012
May2012
Jun2012
Jul2012
Aug2012
Sep2012
Oct2012
Nov2012
Dec2012
Jan2013
Feb2013
Mar2013
Apr2013
May2013
Jun2013
Jul2013
Aug2013
Sep2013
Oct2013
Nov2013
Dec2013
Jan2014
Corporate Entities Households
3.8 3.8 3.8 3.9 3.9 3.8 3.8 3.9 3.8 3.9 3.8 3.7 3.7 3.6 3.6 3.6 3.6 3.4 3.3 3.2 3.3 3.2 3.1 3.0 3.0
1.9 1.9 1.9 2.0 1.9 1.8 1.8 1.9 1.9 2.0 1.9 1.8 1.8 1.9 1.9 2.0 2.0 1.9 1.9 1.9 2.0 1.9 1.9 1.8 1.8
5.2 5.4 5.3 5.4 5.6 5.6 5.6 5.6 5.5 5.6 5.5 5.3 5.3 5.2 5.0 5.0 5.0 4.7 4.7 4.6 4.6 4.5 4.3 4.3 4.3 5.2 5.3 5.2 5.2 5.2 5.2 5.3 5.5 5.4 5.7 5.5 5.6 5.8 5.7 5.6 5.5 5.5 5.2 5.1 4.9 4.6 4.3 4.3 4.1 4.2
Jan2012
Feb2012
Mar2012
Apr2012
May2012
Jun2012
Jul2012
Aug2012
Sep2012
Oct2012
Nov2012
Dec2012
Jan2013
Feb2013
Mar2013
Apr2013
May2013
Jun2013
Jul2013
Aug2013
Sep2013
Oct2013
Nov2013
Dec2013
Jan2014
NPL NPL Public Financial Institutions NPL: National Private Financial Institutions NPL: Foreign Financial Institutions
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Copyright © 2014 EMIS, all rights reserved.
Source:
Spread and Delinquency Evolution
Overall Spread and Delinquency (%)
Individual Spread and Delinquency (%)
Corporate Spread and Delinquency (%)
Comments
Itau Unibanco
The overall spread of the Brazilian economy remains very high
compared to global averages. In Argentina, Chile, Mexico, South
Africa, China, Russia, for example, spreads lie between 3 and 4
percentage points per year, compared to 11.1 pp in Brazil.
Individual real estate financing has the lowest delinquency rate of the
overall banking system (1.8%). Overdraft has the highest delinquency
rate of 8.1%. In terms of corporate loans, the crediting of SMEs is
characterised by higher delinquency rate than the loans to large
corporations. In 2013, the corporate non-performing loans grew by
2.5% in comparison to 2012.
3.9% 3.9% 3.7% 3.6% 3.3% 3.0%
9.0% 7.5% 7.3% 8.0%
9.0% 10.0%
14.8%
12.7% 11.6% 11.7% 11.3%
11.1%
Feb2012
Apr2012
Jun2012
Aug2012
Oct2012
Dec2012
Feb2013
Apr2013
Jun2013
Aug2013
Oct2013
Dec2013
NPL 90 days SELIC Total Spread
10.3% 10.0%
8.3% 7.5% 7.0%
7.6% 6.7% 7.1% 7.2% 7.1% 7.1% 7.0%
2.2% 2.3% 2.2% 2.3% 2.4% 2.2% 2.1% 2.0% 2.0% 2.0% 1.9% 1.8%
Feb2012
Apr2012
Jun2012
Aug2012
Oct2012
Dec2012
Feb2013
Apr2013
Jun2013
Aug2013
Oct2013
Dec2013
Corporate Spread NPL 90 days
21.0% 22.5%
21.1% 18.7% 18.6% 17.7% 17.9% 17.3% 16.3% 16.6% 17.0% 16.4%
5.7% 5.9% 5.9% 5.8% 5.6% 5.4% 5.0% 5.3% 4.8% 4.6% 4.5% 4.4%
Feb2012
Apr2012
Jun2012
Aug2012
Oct2012
Dec2012
Feb2013
Apr2013
Jun2013
Aug2013
Oct2013
Dec2013
Individual Spread NPL 90 days
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Source:
Corporate Credits Key Indicators
Delinquency of Corporate Loans (%)
Comments
Distribution of Lending for Corporate Entities (%)
Bacen
28.3%
7.9%
19.5%
15.0%
3.8%
3.3%
Nonearmarked2012
Earmarked 2012
Working Capital Foreign Trade BNDES direct
BNDES indirect Rural Real Estate Financing
26.5%
8.3%
19.2%
16.0%
4.6%
3.7%
Nonearmarked 2013 Earmarked 2013
0
2
4
6
8
Dec2012
Mar2013
Jun2013
Sep2013
Dec2013
Delinqunecy SMEs Delinquency Large Corp.
Average Provision/SMEs Average Provision/Large Corp.
In 2013, corporate lending accounted for 63.1% of the overall companies
financing, compared to 66% in 2012. In December 2013, the corporate
credit portfolio reached BRL 1.46 trillion, up by 13.3% from the end of
2012. Rural credit and real estate financing increased the most during
2013 (by 37.6% and 25.2% respectively.) Despite government intentions
to decrease the share of public lending, the BNDES financing continued
to receive the highest share in earmarked credit. Free loans to
corporations reached BRL 763.2bn in 2013, up by 8% from 2012. The
moderate expansion is mainly explained by the slowdown in working
capital credit, which represents more than half of this portfolio and grew
by only 5.9% during the year.
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Source:
Lending Rate/Corporate Credits
Average Lending Rate for Corporate Entities, Earmarked (% pa)
Average Lending Rate for Corporate Entities, Nonearmarked (% pa)
CEIC
7.7 8.1
8.1
7.8 8.0 8.0 9.0
8.8 9.0
9.2
9.2 9.9 9.8
10.0 10.0 10.3 9.8 10.1 10.1 10.8 10.2 10.3
11.4 10.8 10.7 11.1
9.0 8.2 7.9
8.0 8.1 8.6 8.9 10.0
9.0 9.9
8.8 9.7
13.0
7.3 7.3 7.3 6.7 6.4 6.9 6.6 6.6 6.7 6.6 6.8 6.8 7.0
6.6 5.5
6.5 5.6 5.8 6.0 5.6 5.6
6.4 6.0 5.8 6.0 5.8
Jan 2013 Feb 2013 Mar 2013 Apr 2013 May 2013 Jun 2013 Jul 2013 Aug 2013 Sep 2013 Oct 2013 Nov 2013 Dec 2013 Jan 2014
Rural Credit Real Estate Financing BNDES Funds: Working Capital BNDES Funds: Fixed Capital Investment BNDES Funds: Agroindustry
16.5 16.2 15.7 16.4 15.8 17.3 18.0 18.9 19.2 18.7 19.8 19.9 21.3
36.7 36.7 36.8 37.3 36.8 36.5 37.3 37.5 37.7 38.0 37.5 37.2 38.8
15.7 15.5 16.0 16.2 16.2 16.4 16.3 17.0
17.3 17.5 17.3 17.3
18.3
7.8 9.3 9.5 10.1 11.6 11.8 11.0 11.8 9.6 11.4 12.5 12.3 13.4
10.7 9.6 10.7 12.3 10.1
11.6 11.9 11.9 12.4 13.2 13.2 13.8 13.8
Jan 2013 Feb 2013 Mar 2013 Apr 2013 May 2013 Jun 2013 Jul 2013 Aug 2013 Sep 2013 Oct 2013 Nov 2013 Dec 2013 Jan 2014
Working Capital Guaranteed Overdraft Accounts Vehicles Financing Imports Financing Exports Financing
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Copyright © 2014 EMIS, all rights reserved.
Source:
Credit to Individuals Key Indicators
Delinquency of Individual Credits by Modality (%)
Comments
Distribution of Lending to Individuals (%)
Bacen
13.4% 16.9%
20.6% 23.7% 27.3%
17.1% 17.6%
17.3% 17.6%
17.7%
25.4% 22.2%
20.9% 19.0%
16.7%
9.3% 7.9% 7.9%
8.4% 9.2%
8.6% 9.1% 8.8%
8.6% 8.7%
16.0% 15.7% 15.8% 15.3%
14.0%
10.1% 10.7% 8.7% 7.5% 6.4%
Dec 2009 Dec 2010 Dec 2011 Dec 2012 Dec 2013
Real Estate Payroll Vehicles Rural No Interest Card High Risk Others
0
2
4
6
8
10
Mar 2011Jun 2011Sep 2011Dec 2011Mar 2012Jun 2012Sep 2012Dec 2012Mar 2013Jun 2013Sep 2013Dec 2013
Free Credit Assignment PayrollVehicles RuralReal Estate
Domestic credit to individuals increased by 16.3% in 2013 compared to
2012 and reached BRL 1.25 trillion in December 2013.
Mortgage loans had the highest share in individual lending, followed by
rural credits and payroll.
Having in mind that mortgage loans are characterised by high security,
their highest share in the household credit portfolio explains the fall of
delinquency rates in the last months of 2013.
Rural credit to individuals increased by 27.2% in 2013. This rise was
driven by the growing needs of the fast-developing agricultural sector in
Brazil as well as by the increase in rural savings deposits and the
demand deposits to be applied for agriculture financing.
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Copyright © 2014 EMIS, all rights reserved.
Source:
Lending Rate/Individuals
Average Lending Rate for Individuals, Earmarked (% pa)
Average Lending Rate for Individuals, Non-earmarked (% pa)
CEIC
5.4
5.9 5.5 5.1 4.5
4.9 4.9
4.8 4.5
10.0 9.0 8.1
8.1 8.0 7.9 8.0 8.7 9.6 7.8 7.9 7.1 6.3
4.2 4.1 4.5
4.7 4.6
5.9 5.9 6.0 4.9
3.8 3.7 4.0 3.5 3.8
14.8 15.3 14.3 12.2 11.9 11.9
9.6 9.2 9.3
Jan2012
Apr2012
Jul2012
Oct2012
Jan2013
Apr2013
Jul2013
Oct2013
Jan2014
Rural Credit Real Estate Financing BNDES Funds: Fixed Capital Investment BNDES Funds: Agroindustry Microcredit
169.5 163.2
144.2 140.0 138.5 136.3 138.9 146.4 154.0
44.8 41.4 38.6 37.8 37.3 36.8 39.8 42.2 43.0
25.5 24.8 20.7 20.5 20.5 19.9 20.3 20.8 22.7
75.4 72.0 66.8 69.0 70.6 68.3 67.5 71.2 74.1
Jan2012
Apr2012
Jul2012
Oct2012
Jan2013
Apr2013
Jul2013
Oct2013
Jan2014
Overdraft Personal Credit Vehicles Financing Other Goods Financing
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Copyright © 2014 EMIS, all rights reserved.
Source:
Deposits
Average Monthly Saving Deposits by Region (BRL bn)
Saving Deposits (BRL mn)
Saving Deposits Rate (% per month)
CEIC, * - by June 2013
381,
241
382,
643
384,
897
385,
375
386,
152
388,
728
397,
085
401,
764
408,
442
411,
878
414,
169
420,
009
422,
399
424,
333
428,
998
433,
321
441,
722
449,
041
459,
442
465,
135
473,
262
478,
665
484,
922
496,
302
500,
836
505,
603
513,
829
518,
726
526,
649
538,
446
550,
217
557,
481
566,
883
574,
251
583,
729
597,
943
602,
795
Jan 2011 Jan 2012 Jan 2013 Jan 2014
9.7
11.2
13.1
14.9
46.5
54.1
62.8
71.3
207.
1
236.
4
268.
4
304.
9
63
71.4
82.9
94.4
20.4
23.8
27.6
31.9
2010 2011 2012 2013*
North Northeast Southeast South Central West
0.59 0.61
0.52 0.50 0.51 0.50 0.50 0.50
0.52
0.50
0.59
0.52
0.55
0.61
Jan 2012 Jan 2013 Jan 2014
Savings Deposits Rate
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Source:
Bank Cards
Number Of Cards (mn)
Despite the overall slowdown of Brazilian economy, the
bank cards are expanding both in terms of number of
cards issued and terminals installed as well as in
transactions value.
Bank cards are becoming more popular as payment
method compared to cash and cheques.
Credit cards are expanding their share among corporate
customers as well. Notably, only in February 2014,
Brazilian companies spent BRL 5.95bn through credit
cards, an increase of 2.6% compared to the same period
of 2013. Almost 99% of the total amount was accumulated
by payments from micro and small companies. The
increase of the share of credit cards for corporate entities
was driven most by the BNDES card and its low interest
rates. The card offers a pre-approved revolving credit line
for small business owners for up to BRL 1mn and is
offered by the following banks: Banco do Brasil, Caixa
Economica Federal, Banrisul, Bradesco, BRDE, Itaú and
Sicoob. 41% of all BNDES disbursements in 2013 were
dedicated to this type of financing.
The main card issuers in 2013 were domestic banks
Banco Bradesco, Banco do Brasil, and Caixa Econômica
Federal. Itau Unibanco is expected to become a leader on
the Brazilian credit cards market after it received
regulatory approval for its acquisition of Credicard at the
end of 2013.
Number of ATMs (thou)
Abecs, Falke Information
136 153 173 196 222
233 249 266 285 305 196
225 247
270 292 565
627 686
751 819
2009 2010 2011 2012 2013
Credit Cards Debit Cards Private Label
41.5 45
48 51.8
55.7
2009 2010 2011 2012 2013
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Source:
Bank Cards (cont'd)
Number of Transactions (mn)
Transactions by Type of Used Credit/Individuals (BRL bn)
Value of Transaction (BRL bn)
Card Spending by Region 2Q 2013 (%)
Abecs
15%
3%
62%
12% 7%
11%
4%
61%
15% 9%
North Northeast Southeast South Central West
Credit Cards Debit Cards
54.1 70.9 81.0 92.4
108.6 19.6
22.3 24.1
24.3
25.5
6.1
6.9 8.9
9.8
10.6
Dec 2009 Dec 2010 Dec 2011 Dec 2012 Dec 2013
Full Payment (no interest) Revolving Credit Installment Credit
2,684 3,150
3,624
4,041 4,509
2,430 2,905
3,522
4,109
4,783
2009 2010 2011 2012 2013
Credit Cards Debit Cards
271 337 411 480 553 638 130 161
203 245
300 362
401 498
614 725
853
1,000
2009 2010 2011 2012 2013 2014f
Credit Cards Debit Cards
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Source:
Government Policy
SCR
The Credit Information System (SCR) of the Brazilian Central Bank is an instrument for registration and information about the loans,
sureties, guarantees and credit limits granted by financial institutions to individuals and corporations in the country. It was established
by the National Monetary Council (CMN) and is administered by the Central Bank, which has to store the information, regulate the
correction process and update the information delivered by the participating financial institutions. This is the main tool for bank
supervision and monitoring of the loan portfolios of the financial institutions.
Currently, the financial institutions are obliged to declare all customer operations with full liability equal to or greater than BRL 1,000,
and values related to sureties and guarantees provided by financial institutions to their customers. The legal base of the system is the
Complementary Law 105/01 and Resolution 3,658 of 17/12/2008.
The Credit Information System is not a restrictive registry, as it contains both positive and negative information. To be in the system is
not a negative fact in itself and does not prevent the client to request a credit, and may also contribute positively in the institution's
decision to grant a credit.
The system is regulated by the Consumer Protection Code and contain records for up to five years.
SELIC
The Sistema Especial de Liquidação e de Custódia (Special Clearance and Escrow System) is an index used for the calculation of
interest rates in Brazil. It is also a reference for the monetary policy of the country. There are even several investments that use the
index directly in the calculation of income.
The overnight rate of the Selic, expressed on an annual basis, is the weighted average rate for the volume of financing operations for a
day, backed by federal government bonds. The Selic rate is set by the Monetary Policy Committee (Copom), a committee formed by
the eight members of the board of the Central Bank of Brazil and led by its President.
In the beginning of 2012, in an attempt to reduce the interest rates in Brazil and to stimulate the stagnant economy, the Brazilian
government started to gradually decrease the Selic index. It reached its lowest level ever in October 2012 at 7.25%, and was kept at
that level until April 2013. Thus, the banks' interest rates also fell although the effect on the private banks rates was limited.
However, since April 2013, the Copom is gradually increasing the Selic rate, which currently stands at 11%, in accordance with
government's policy to suppress inflation. Analysts expect that this will be the last increase of Selic, as there are rising concerns by
investors that the government is abusing the monetary policy to keep prices in the country on hold.
Bacen
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II. Public Banks
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Subsector Highlights
Overview
In the last few years, crediting by public banks was the main instrument used by the Brazilian government to stimulate the local
industry and households and avoid a sharper slowdown of the economy.
The loan portfolio of public banks in the country is double that of the private banks. State-owned banks in Brazil operate in
segments of more credits like consumer credit, vehicle financing and credit to small businesses, which are avoided by private
banks in an attempt to prevent a rise in their delinquency rates.
Recently, the government has urged the three main public banks to decrease their loan portfolios in order to stimulate the
competition from private banks. The assessment is that public banks should prioritise the credit lines of little interest to private
players – the individuals real estate financing (Caixa Economica Federal), agribusiness (Banco do Brasil) and heavy
infrastructure (BNDES). According to the government's strategy, the Caixa and BNDES have to limit their financing of large
corporations.
Market Shares
In 2013, more than 50% of the credit stock in Brazil was offered by public banks. The overall growth of the credit market during
the year was 14%, but the increase in lending by private banks was much lower – around 6%.
Notably, Banco do Brasil alone accounted for 21% of the overall credit market in Brazil. The expectations are that the bank will
focus predominantly on credits to companies in the infrastructure and agriculture businesses, sectors in which private banks
are less interested in.
At the end of 2013, BNDES announced that it will decrease the stimuli to the Brazilian economy due to the global economical
recovery. Since 2009, BNDES has extended loans for about BRL 300bn.
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Source:
Public Banks Loan Portfolio
Annual Growth Rate of Public Banks Loans (%)
Delinquency of Corporate Loans (%)
Loans by Type (BRL bn)
Bacen
210
.5
85.
0
89.
4
15.
3
74.
4
150
.0
76.
3
325
.8
89.
0
282
.4
112
.8
111
.0
19.
1
89.
8
177
.4
95.
3
376
.9
123
.3
Dec 2012 Dec 2013
39.2 40.3
32.2
24.8 21.1 19.8
23.6 27.7 28.4 28.6
22.6
Jan2009
Jul2009
Jan2010
Jul2010
Jan2011
Jul2011
Jan2012
Jul2012
Jan2013
Jul2013
Dec2013
2.83% 3.03%
0.14% 0.13%
Dec 2012 Dec 2013
SMEs Large
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Source:
Profitability of Public Banks
Profitability of the Loan Portfolio and Funding Costs* (%) Margin of Provisions (%)
Bacen, * - Accumulated in the last 12 months ended
9.2%
8.4%
7.3%
7.0%
5.6%
5.6%
6.1%
4.9%
4.9%
3.6%
Dec 2009 Dec 2010 Dec 2011 Dec 2012 Dec 2013
Gross Margin Net Margin
16.7
%
16.1
%
16.0
%
14.0
%
12.4
%
7.5%
7.7%
8.7%
7.0%
6.8%
Dec 2009 Dec 2010 Dec 2011 Dec 2012 Dec 2013
Gross Profitability of the Loan Portfolio Funding Cost
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Source:
Efficiency and Expenses
Efficiency Index Adjusted to Risk* (%)
Personnel and Administrative Expenses* (BRL bn)
Bacen, * - Accumulated in the last 12 months ended
32.9
2
34.0
3
35.0
4
36.0
4
37.8
8
38.8
7
40.0
0
40.4
7
22.3
3
23.1
7
24.2
4
24.3
0
24.2
6
24.2
1
24.2
6
25.3
0
77.8
2
79.5
2
80.4
6
81.5
9
82.8
5
81.7
9
84.0
2
83.9
4
Apr 2012 Jul 2012 Oct 2012 Jan 2013 Apr 2013 Jul 2013 Oct 2013 Dec 2013
Personnel Other Administrative Expenses Operating Income
73.07
69.19
67.34 66.79
69.37 68.94 68.19 68.59 69.24 70.42
71.72 72.93 73.36 73.73
76.78 76.00
78.36
Dec 2009 Mar 2010 Jun 2010 Sep 2010 Dec 2010 Mar 2011 Jun 2011 Sep 2011 Dec 2011 Mar 2012 Jun 2012 Sep 2012 Dec 2012 Mar 2013 Jun 2013 Sep 2013 Dec 2013
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III. Private Banks
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Subsector Highlights
Overview
In 2013, private banks in Brazil focused on offering more secure credit lines, in order to avoid growth of their non-performing
loans.
The drop in delinquency rates has helped the banks to increase their profits despite the lower income from safer loans. During
the year, private banks concentrated their operations predominantly on household mortgage financing, payroll deductable
loans, and earmarked credits to companies.
In the real estate financing segment, the growth of private banks (31.5%) was very close to the increase of this type of credit
from public banks (34.2%).
Market Share
There are signs that the private banks in Brazil are preparing to return on the credit market and to compete against the public
banks. Analysts note that a signal for such move is the fact that Itau Unibanco has cut its default expenses to BRL 5.6bn and
Bradesco has increased its total reserves to BRL 388mn. In comparison, state-run Banco do Brasil has raised its default
reserves by 6.5% in 2013, or an increase of BRL 949mn since December 2012. In addition, lately, the government has often
declared its intentions to reduce lending by state banks (Banco do Brasil, Caixa Economica Federal and BNDES) in response
to criticism from rating agencies.
Fitch Ratings has already affirmed that the expected slowdown in public bank lending should help the private sector regain
market share. On the other hand, the rating agency, together with Moody's Investor Service, have classified the government
strategy as doubtful as the decrease in financing by state banks could hamper support for the ruling party in the presidential
elections to be held in October 2014.
The prospect for growth of private banks has already had a positive effect on the share price of the two largest private banks in
the country – Itau Unibanco and Bradesco.
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Source:
Private Banks’ Loan Portfolio
Annual Growth Rate of Private Banks Loans (%)
Delinquency of Corporate Loans (%)
Loans by Type (BRL bn)
Bacen
44.
9
42.
7
99.
5
197
.3
217
.8
216
.4
262
.9
120
.9
50.
4
59.
1
51.
7
110
.8
181
.4
233
.1
210
.7
279
.6
137
.6
63.
1
Dec 2012 Dec 2013
24.6
9.5 6.5
14.3
19.4 19.5
14.5
10.6
7.0 5.5
7.3
Jan2009
Jul2009
Jan2010
Jul2010
Jan2011
Jul2011
Jan2012
Jul2012
Jan2013
Jul2013
Dec2013
4.36%
3.54%
0.62% 0.69%
Dec 2012 Dec 2013
SMEs Large
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Source:
Profitability of Private Banks
Profitability of the Loan Portfolio and Funding Costs* (%) Margin of Provisions (%)
Bacen, * - Accumulated in the last 12 months ended
20.9
%
20.3
%
20.5
%
18.5
%
17.2
%
9.0%
8.7%
9.9%
7.7%
7.2%
Dec 2009 Dec 2010 Dec 2011 Dec 2012 Dec 2013
Gross Profitability of the Loan Portfolio Funding Cost
11.9
%
11.7
%
10.6
%
10.8
%
10.0
%
6.0%
8.1%
6.0%
5.6%
5.7%
Dec 2009 Dec 2010 Dec 2011 Dec 2012 Dec 2013
Gross Margin Net Margin
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Source:
Financial Performance and Market Share
Performance of National Private Banks 2013 (USD bn)
Performance of Foreign Private Banks 2013 (USD bn)
Share of Foreign Private Banks (%)
Falke Information
41.8
42.2
5.1 8.
7
8.6
0.8
7 5.7
0.6
Itaú Unibanco Bradesco Safra
Revenues Operating Profit Net Profit
25.2
7.3
2.9
2.8
0.6
0.3 2.
7
0.5
0.2
Santander HSBC Citibank
Revenues Operating Profit Net Profit
30.5
%
29.8
%
25.8
%
24.8
% 27
.9%
18.2
%
18.6
%
18.0
%
16.6
% 18
.8%
17.8
%
16.9
%
15.7
%
14.9
%
14.8
%
2009 2010 2011 2012 2013
Equity Assets Deposits
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Source:
Efficiency and Expenses
Efficiency Index Adjusted to Risk* (%)
Personnel and Administrative Expenses* (BRL bn)
Bacen, * - Accumulated in the last 12 months ended
72.94
69.64
67.07
64.01 63.92 64.45 65.71 65.04
67.59 68.94 69.60
71.89 71.70 71.76 71.31 70.10
72.23
Dec
200
9
Mar
201
0
Jun
2010
Sep
201
0
Dec
201
0
Mar
201
1
Jun
2011
Sep
201
1
Dec
201
1
Mar
201
2
Jun
2012
Sep
201
2
Dec
201
2
Mar
201
3
Jun
2013
Sep
201
3
Dec
201
3
44.2
6
45.7
4
45.9
3
47.5
4
47.6
3
47.9
2
48.6
7
48.8
3
56.0
5
56.5
4
56.4
2
57.1
5
57.6
0
58.4
1
59.3
0
59.0
4
145.
35
145.
73
143.
71
145.
93
146.
50
149.
71
154.
03
149.
34
Apr 2012 Jul 2012 Oct 2012 Jan 2013 Apr 2013 Jul 2013 Oct 2013 Dec 2013
Personnel Other Administrative Expenses Operating Income
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IV. Main Players
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Source:
BNDES
Financial Indicators (BRL mn)
Funding (BRL mn)
Performance (%)
Comments
Company data, Wall Street Journal, FAT – Workers Support Fund
BNDES is a Brazilian federal public development bank. The bank is
the most important long-term credit provider for the Brazilian business
due to its rates, which are lower than the overall market ones.
Infrastructure and technological projects, as well as large and
medium-sized companies are a priority for BNDES.
Despite its plans to reduce its credit operations in 2013 in order to
increase the competitiveness of private banks, BNDES's lending
surged by 20% during the past year, reaching BRL 190bn – this
amount is more than double the money disbursed by the World Bank
each year. In 2013, BNDES accounted for 7% of the country's gross
debt.
6,73
5
9,91
3
9,04
8
8,12
6
8,15
0
5,82
1
7,03
9
6,48
8
11,9
08
11,6
88
3,99
0 6,15
9
6,96
2
2,64
4
2,45
2
2009 2010 2011 2012 2013
Net Profit Income of Financial Operations Equity Earnings
25.5%
31.0%
23.1%
18.8% 16.9%
2.0% 2.2% 1.6% 1.3% 1.1%
0.20% 0.15% 0.14% 0.06% 0.01%
2009 2010 2011 2012 2013
Return on Net Equity Return on Assets Delinquency Rate
10,127 12,230 15,434 17,042 15,441
105,000 107,052
50,246 55,000
41,000
2009 2010 2011 2012 2013
FAT National Treasury
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Source:
BNDES (cont'd)
Loan Portfolio (BRL mn)
Loan Portfolio by Type of Company 2013 (%)
Loan Portfolio by Sector 2013 (%)
Loan Portfolio by Region (%)
Company data
283,671
361,575
425,518
492,148
565,243
Dec 2009 Dec 2010 Dec 2011 Dec 2012 Dec 2013
Agribusiness 9.8%
Infrastructure 32.7%
Industry 30.5%
Commerce & Services 27.0%
Large Corporation
61.0%
Medium to Large 5.6%
Medium 6.5%
Micro/Small 24.9%
Northeast 13.5%
North 7.2%
Southeast 45.7%
South 22.6%
Central West 11.0%
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Comments
Source:
Banco do Brasil
Banco do Brasil is a state bank and the largest bank in terms of assets in Latin America. The loan portfolio of the bank amounts at almost USD 300bn,
accounting for about 20% of the overall financial system in Brazil. Banco do Brasil has the largest distribution network of banking services in the country,
with 19,143 service points and 5,450 bank agencies, accounting for 23.8% of the total number of bank agencies in Brazil.
In recent years, Banco do Brasil started to expand its operations abroad - in 2010 it acquired Argentina's fourth largest bank, Banco Patagonia SA, followed
by the acquisition of Florida-based Eurobank in 2012. The overseas operations of the bank accounted for about 10% of its total revenue for 2013. In
addition, the bank offers services in more than 20 countries around the world.
Financial Performance (BRL mn) Equity (BRL bn)
Company data
10,1
48
11,7
03
12,1
26
12,2
05
15,7
58
13,5
11
16,1
25
18,2
42
21,0
71
23,3
01
992
1,35
4
2,26
5
2,34
9
3,23
0
2009 2010 2011 2012 2013
Net Profit
Fee Income
Income from Insurance, Pension Plans e Savings Bonds
300.
8 388.
2 465.
1
581
693
498.
4
519
637.
6
472
492
Dec 2009 Dec 2010 Dec 2011 Dec 2012 Dec 2013
Loan Portfolio Deposits
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Source:
Banco do Brasil (cont'd)
Loan Portfolio Evolution (BRL bn)
Loan Portfolio by Risk Level (%)
Loan Portfolio Segmentation Dec 2013 (%)
Comments
Company data
In the beginning of 2014, Banco do Brasil announced plans to expand
on the investment banking market with the aim of diversifying its
portfolio. Analysts note that the creation of a capital market arm of the
bank is due to a slowdown in the overall retail banking in Brazil.
In March 2014, Banco do Brasil raised its first syndicated loan with a
group of 22 banks, amounting to USD 1bn. The loan will be used for
the diversification of the funding structure of the bank.
91.8 113.1 130.6 152.0 168.1
144.0 176.4
210.2 270.6
323.2
67.1 75.7
89.4
108.0
144.8
18.4 23.0
35.0
50.2
56.8
321.4 388.2
465.1
580.8
692.9
Dec 2009 Dec 2010 Dec 2011 Dec 2012 Dec 2013
Individuals Corporate Entities Agribusiness Outside Brazil
Oil 10% Metallurgy 10%
Civil Construction
10%
Foods 12%
Electric Energy 7%
Services 6%
Transport & Automobiles
12%
Others 33%
91.6% 93.7% 93.9% 94.5% 95.0%
8.4% 6.3% 6.1% 5.5% 5.0%
Dec 2009 Dec 2010 Dec 2011 Dec 2012 Dec 2013
AA-C D-H
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Comments
Source:
Itaú Unibanco Holding S.A.
Itau Unibanco is the largest private bank in Brazil and the 13th largest bank in the world by market capitalisation. At the beginning of 2014, in a move to
fortify its presence in the region, the bank announced a USD 3bn acquisition of a controlling stake in CorpBanca - the fourth largest bank in Chile and the
fifth largest in Colombia. The deal is yet to receive a regulatory approval. The bank has operations in 20 countries in the Americas, Asia and Europe. In
Brazil, the bank operates around 5,000 full-service branches.
In 2013, the bank was named the most valuable Brazilian brand by Interbrand's research, for the 10th consecutive year, with a brand value estimated at
BRL 19.3bn.
Financial Performance (BRL mn) Funding (BRL bn)
Company data, Financial Times
73,3
68
78,4
74
78,4
75
16,7
16
18,1
39
22,1
48
14,6
41
14,0
43
15,8
36
2011 2012 2013
Operating Revenues
Banking Service Fee & Income from Banking Charges
Net Income
131.6 154.4 192.1
293.3 284 271.3
449.7
562
628.3
Dec 2011 Dec 2012 Dec 2013
Demand Deposits & Saving Deposits & Onlending
Time Deposits & Debentures
Assets under Management
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Comments
Source:
Itaú Unibanco Holding S.A. (cont'd)
Itau Unibanco's income increased by 12.8% in 2013, mainly due to growth of lower risk products and decrease in non-performing loans. The bank is likely
to become the strongest player in Brazil's card industry, after it acquired the Credicard unit from Citigroup for BRL 2.77bn in 2013. Itau Unibanco also owns
the second-largest card payment company in the country Redecard. Through these two companies, Itau controls 40% of the bank cards market in Brazil.
To meet the rising processing needs, the bank plans to invest BRL 11.1bn by 2015 in technology, most of the funds are dedicated to the construction of a
new data centre, scheduled to be completed in Q1 2014, that will increase the data processing capacity of the bank by ten times.
Loans Portfolio Breakdown 2013 (%) Delinquency Ratio > 90 days (%)
Company data
Corporate 36.6%
SMEs 16.3%
Vehicles 8.3% Personal Loans
5.7% Credit Cards 11.2%
International 8.1%
Mortgage 9.1%
Payroll 4.7%
7.4%
5.8%
6.6% 6.9%
5.8%
4.0%
2.9% 3.5%
3.2%
2.0%
5.6%
4.2%
4.9% 4.8%
3.7%
Individuals Corporate Total
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Source:
Caixa Econômica Federal
Financial Indicators (BRL mn)
Performance (%)
Fee Income (BRL mn)
Comments
Company data, Reuters
Caixa Economica Federal is a state-controlled financial institution,
which focuses on providing credits to individuals, families and small
businesses. Today, it is the largest mortgage lender in Brazil, thanks
to the low rates it offers to its customers.
In 2013, the credit portfolio of the bank grew by 37% compared to
2012. However, the expectations for 2014 are for a slower expansion.
The loans granted by Caixa in 2013 were about 19% of the overall
banking system crediting for the year.
1.01% 1.14% 0.93% 0.86%
26.3% 29.6%
25.9% 26.2%
66.1% 59.0% 61.2% 60.4%
2010 2011 2012 2013
Return on Assets Return on Equity Operating Efficiency Ratio
6,811
1,376
5,881
212
8,093
1,603
6,439
216
Banking Fees Asset Management GovernmentServices
Others
2012 2013
14,2
27
58,1
47
73,0
49
27,9
67
34,3
91
46,4
94
4,60
3
4,32
5
5,19
5
5,18
3
5,64
0
6,72
3
2011 2012 2013
Income from Financial Intermediation Loans Operation Income
Operating Income Net Profit
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Source:
Caixa Econômica Federal (cont'd)
Market Share (%)
Delinquency Ratio > 90 days (%)
Amplified Loan Portfolio Dec 2013 (%)
Comments
Company data
In 2012, Caixa Economica announced plans to create an investment
banking arm, which was forecast to provide 20% of the bank's
revenue within a period of five years.
However, analysts estimate that the bank would probably abandon
the expansion into investment banking as the government has
decided to stop providing more capital to the state-run bank and
recommended that Caixa should focus on services for individuals and
small companies.
7.3%
69.1
%
35.5
%
15.7
% 42
.6%
10.3
%
7.5%
15.2
%
9.6%
68.5
%
35.1
%
14.0
%
52.8
%
11.2
%
8.7%
18.1
%
2012 2013
2.0% 2.1% 2.0% 2.0% 2.1% 2.3% 2.3% 2.4% 2.3%
3.6% 3.8% 3.8% 3.8% 3.7% 3.6%
3.4% 3.3% 3.0%
Dec2011
Mar2012
Jun2012
Sep2012
Dec2012
Mar2013
Jun2013
Sep2013
Dec2013
Caixa Market
Government 3% Large
Corporations 5% SMEs 11%
Payroll Deductable Loans 9%
Personal Loans 1%
Home Equity 1%
Housing 55%
Infrastructure & Development
8%
Others 7%
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Source:
Banco Bradesco S.A.
Financial Performance (BRL mn)
Fee Income 2013 (%)
Net Income Breakdown 2013 (%)
Comments
Company data
Bradesco operates in two main business segments – financial
services and insurance, pension plans and capitalization, which
account respectively for 69% and 31% of its total income for 2013.
It is the largest insurance group in Brazil, in terms of both revenue
and technical provisions.
By the end of 2013, Bradesco had 59,307 service points. In terms of
presence, the bank holds a market share of 20.7% in Brazil.
11,6
16
13,3
72
15,2
23
17,5
12
19,7
86
10,0
66
14,2
88
16,2
89
17,5
52
18,8
84
7,58
6
9,80
4
11,1
98
11,5
23
12,2
02
2009 2010 2011 2012 2013
Fee Income Operating Income Net IncomeFees 28%
Loans 28%
Securities 6% Funding 7%
Insurance 31%
Cards 36%
Checking Accounts 18%
Credit Operation 11%
Asset Management
12%
Collection 7%
Tax Payments 2%
Consortium 4%
Custody/Brokerage 3%
Others 7%
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Source:
Banco Bradesco S.A. (cont'd)
Market Share 2013 (%)
Comments
Funding (BRL bn)
Company data, Wall Street Journal
10.7%
17.1% 13.4%
18.1%
24.2% 21.9%
30.3% 34.6%
26.3%
32.7%
Loan Portfolio DemandDeposits
SavingDepaosits
AssetManagement
Insurance,Private Pension
Plans andSavings Bonds
PremiumsBanking System Private Banks
35.7 37.5 33.1 38.4 40.6
44.2 53.4 59.7 69.0 80.7
90.5 102.2
124.1 104.0 95.8
36.9
46.0
49.8 59.8 64.4
27.3
38.2
53.2 44.2 56.1
7.5
17.7
41.5 51.4
57.7
23.1
26.3
26.9 34.9
35.9
265.2
321.1
388.4 401.7
431.1
Dec 2009 Dec 2010 Dec 2011 Dec 2012 Dec 2013
Demand Deposits Saving DepositsTime Deposits DebenturesBorrowing & Onlending Funds from Issuance of SecuritiesSubordinated Debts
At the end of 2013, Bradesco announced that it would raise two
private-equity funds with a total amount of USD 800mn to invest in
infrastructure.
The bank's investment unit, Bradesco Asset Management, is the
third-largest asset manager in Brazil, with USD 130bn of assets under
management.
Since 2013, Bradesco Asset Management is authorised to operate on
the U.S. market. The bank plans to raise funds from North American
investors and invest them into Brazilian and Latin American assets.
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Source:
Banco Bradesco S.A. (cont'd)
Loan Portfolio Segmentation/Individuals Dec 2013 (%)
Delinquency Ratio > 90 days (%)
Loan Portfolio Segmentation/Corporate Dec 2013 (%)
Company data
Vehicle 21%
Payroll 20%
Credit Card 18%
Personal 13%
Mortgage 10%
Rural 6%
BNDES Finame 5%
Overdraft 3%
Others 4%
Working Capital 15%
BNDES Finame 11%
Operations Abroad 11%
Mortgage 5%
Export Financing 5%
Credit Card 4%
Overdraft 4%
Vehicles 3% Rural 2% Leasing 2%
Sureties & Guarantees
23%
Commercial Portfolio 11%
Others 4%
6.2% 6.2% 6.2% 6.2% 6.0% 5.5%
5.2% 5.0%
0.4% 0.9%
0.4% 0.3% 0.3% 0.2% 0.4% 0.7%
4.2% 4.2% 4.3% 4.2% 4.2% 4.0% 4.0% 3.7%
4.1% 4.2% 4.1% 4.1% 4.0% 3.7% 3.6% 3.5%
Mar 2012 Jun 2012 Sep 2012 Dec 2012 Mar 2013 Jun 2013 Sep 2013 Dec 2013
Individuals Large Corporates SMEs Total
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V. Appendix
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Source:
Abbreviations
Bacen
DPGE - Term Deposits with Special Guarantee
IHCD - Hybrid Capital and Debt Instruments
LCI -Letras de Credito Imobiliario - Real Estate Credit Bills
LCA - Letras de Credito do Agronegocio - Agribusiness Credit Notes
LF - Letra Financeira - Financial Bill
LFS - Subordinate Financing Bill
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