12 foro latibex

12 foro latibex

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  12º FORO LATIBEX 17th November 2010
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  2 • Table of Contents Macro and Social Dynamics Brazil Financial System: Key Features
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  For the firsttime in a long period, we are living in a truly DUAL WORLD Need for PUBLIC SECTOR MATURE MARKETS to adjust large fiscal have started to deficits behave like mature markets… LOW HIGH i.e., not growing… Leverage HIGH MATURE MARKETS Need for PRIVATE …and EMERGING SECTOR to MARKETS have started to deleverage behave like emerging markets… i.e., delivering Balanced LOW DIFFERENTIAL GROWTH… EMERGING MARKETS
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  Brazil took itsmacro fundamentals to a new level… Inflation under control FHC 1 FHC 2 Lula 1 Lula 2 Investiment Grade 916.4% 22.5% 12.5% 9.6% 8.9% 7.7% 9.3% 7.6% 5.2% 6.0% 5.7% 3.1% 4.5% 5.9% 4.3% 5.3% 5.0% 1.7% 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010E 2011E Interest Rates Reduction GDP (Annual Real Growth %) Selic Taxa Nominal (%) Selic Taxa Real (%) 18 18 7.6 6.1 13 13 14 5.1 4.5 11.75 12 11 10.75 9 8 7 6.75 6 5.5 5 -0.2 2004 2005 2006 2007 2008 2009 2010E 2011E 2007 2008 2009 2010E 2011E Source: IPCA-IBGE, The Brazilian Central Bank Projections: FOCUS- The Brazilian Central Bank 4
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  … with lessmacroeconomic volatility and showing resilience to the international crisis… Duration in months of the Brazilian economic expansion and contraction periods Largest Most brief expansion period contraction 48 8 36 25 22 13 61 21 28 20 30 9 16 9 8 6 Feb83 Oct88 Dec91 Sep95 Feb99 Sep01 Jun03 Jan09 Jan87 May89 Nov94 Sep97 Nov00 Sep02 Jun08 Oct10 Oct80 Feb87 Jun89 Dec94 Oct97 Dec00 Oct02 Jul08 Jan83 Sep88 Nov91 Aug95 Jan99 Aug01 Mai03 Dec08 Source: The Brazilian Central Bank
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  Unemployment at historiclows…. Annual Average Unemployment Rate(%) 11.5 9.8 10.0 9.3 7.9 8.1 6.7 2004 2007 2010E Source: FGV-CPS; IBGE PNAD 2008 Projection: Santander Economic Research
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  7 Social dynamicsleverages growth… Favorable Demographic Transiction1 Social Mobility Trends2 ∆abc= 36 ∆abc= 29 200 90% 31 20 Demographic 13 80% Bonus 150 Millions of People 66 +44.0% 70% +19.0% 95 113 60% 100 50% 47 50 44 40% 40 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 49 29 16 0 Population in Active Ages= 15-64 years 2003 2009 2014* Dependence Ratio E D C A/B Sources: 1 - IBGE 2 - Ministry of Finance; * estimated
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  Leading to moreaccess to banking services… More 24 million people had access to bank “Cadastro Positivo” Milion (Positive credit list) 120 An information system that 108.8 allows banks to know about the 100 creditworthiness of a person 84.0 and the likelihood that this 80 person will pay his or her debts. 60 30% It’s possible that over 26 million Brazilians 40 will be included in 20 the banking sector, according to Serasa 0 research. Jul.05 Sep.09 Source: The Brazilian Central Bank, SERASA
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  9 • Table of Contents Macro and Social Dynamics Brazil Financial System: Key Features
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  Brazilian Financial System Well Capitalized – BIS Ratio High Profitability - ROE 20% 18.5% 17.8% 17.4% 17.3% 17.2% 23.7% 16.4% 21.8% 21.7% 16% 18.8% 12% Legal Requirement = 11% 15.5% 16.2% Basel Committee = 8% 8% 4% 0% 2004 2005 2006 2007 2008 jul/09 2005 2006 2007 2008 2009 Jun 10 Banking Sector Consolidation – % on Balance of Reserve Requirements Assets of the 5 largest Banks R$ Billons 350 77.8% 73.6% 75.5% 300 250 57.3% 59.1% 59.0% 200 150 100 50 0 Dec 05 Dec 06 Dec 07 Dec 08 Dec 09 Jun 10 Securities Cash
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  Deposit market highlyregulated: High reserve requirements and mandatory lending - Reserve Earmarked Free Funding requirements Loans Demand Pricing 51% 31% 18% Deposits regulated Pricing Savings 30% 65% 5% regulated Free Time Deposits 23% 77% Competition Source: The Brazilian Central Bank
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  Although credit growthhas been robust in the last years, credit penetration is still relatively low Total Loans to GDP 50% 45% 40% Russian Presidential Crisis Elections 35% 9/11 & Energy Crisis 30% Subprime Crisis 25% México Crisis Asian 20% Crisis Real Free Argentina Float Crisis 15% 10% Sep-06 Sep-93 Sep-94 Sep-95 Sep-96 Sep-97 Sep-98 Sep-99 Sep-00 Sep-01 Sep-02 Sep-03 Sep-04 Sep-05 Sep-07 Sep-08 Sep-09 Sep-10 Mar-04 Mar-94 Mar-95 Mar-96 Mar-97 Mar-98 Mar-99 Mar-00 Mar-01 Mar-02 Mar-03 Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Source: The Brazilian Central Bank
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  Total Loans –Banking System Public vs. Private Banks (YoY) Loans per Type of Ownership 26.1% Foreign Banks 18% Public Banks 18.3% Private 42% Banks 40% Mar-08 Mar-09 Mar-10 Jun-08 Jun-09 Jun-10 Dec-07 Sep-08 Dec-08 Dec-09 Sep-07 Sep-09 Sep-10 Public Banks Private and Foreign Banks Source: The Brazilian Central Bank
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  14 Resilient Spreads –Corporate x Individuals 60 50 40 30 28.0 24.1 20 18.4 10 0 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Sep-10 Sep-04 Sep-05 Sep-06 Sep-07 Sep-08 Sep-09 May-05 May-06 May-07 May-08 May-09 May-10 Corporate Individuals Total Source: The Brazilian Central Bank
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  jan/04 46% 54% Operations. abr/04 47% 53% jul/04 48% 52% out/04 48% 52% jan/05 50% 50% abr/05 51% 49% Source: The Brazilian Central Bank jul/05 52% 48% out/05 52% 48% jan/06 54% 46% abr/06 54% 46% jul/06 57% 43% out/06 57% 43% jan/07 59% 41% abr/07 59% 41% Secured Lending* jul/07 60% 40% out/07 61% 39% jan/08 61% 39% abr/08 61% 39% *Payroll Loan + Mortgage + Auto Loans divided by total loans to individuals. Interest Rate Reference Credit jul/08 60% 40% out/08 60% 40% Unsecured Lending jan/09 60% 40% abr/09 60% 40% Loans to Individuals – Secured* x Unsecured Lending jul/09 62% 38% out/09 63% 37% jan/10 64% 36% abr/10 65% 35% jul/10 66% 34% ago/10 67% 33% set/10 67% 33%
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  Household Debt Ratiowith healthy leverage and longer durations % 40,0 39.1 35,0 30,0 25,0 23.8 20,0 15,0 Household Debt Ratio* Household Debt Service Ratio* Source: The Brazilian Central Bank * MSA (Massa Salarial Ampliada)
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  Delinquency (%) 3,5 4,0 4,5 5,0 5,5 6,0 6,5 3,0 Jan-04 May-04 Sep-04 Source: The Brazilian Central Bank Jan-05 May-05 Sep-05 Jan-06 May-06 Spreads Sep-06 Jan-07 May-07 Sep-07 Jan-08 May-08 Sep-08 Delinquency Jan-09 May-09 Banking Spreads and Delinquency Rates normalazing Sep-09 Jan-10 May-10 Sep-10 22,5 25,0 27,5 30,0 32,5 20,0 Spreads (p.p)
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  Cashing in onthe unique environment in Brazil The banking sector has a big opportunity The triple Multiplier Differential GDP growth X (not involved in the excesses of the past cycle) Increased bancarisation X (development of middle classes) Sound Financial System X (Low leverage, conservative, good profitability, supervision)
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  Investor Relations (Brazil) 2,235Juscelino Kubitschek Avenue - 10º floor São Paulo | SP | Brazil | 04543-011 Phone. 55 11 3553-3300 Fax. 55 11 3553-7797 e-mail: [email protected]