Strategic Partnership

Transcription

1 Strategic Partnership 1

2 Disclaimer This presentation contains references and statements, planned synergies, including estimates, projections of results and future strategy for Banco do Brasil, it s Associated and Affiliated Companies and Subsidiaries. Although these references and statements reflect the management s belief, they also involve imprecision and high difficult risks to be foreseen, consequently, they may conduct to a different result than the one anticipated here. These expectations are highly dependent on market conditions, on Brazil s economic and banking system performances, as well as on international market one. Banco do Brasil is not responsible for bringing up to date any estimate in this presentation. 2

3 Section 1 Transaction Description 3

4 Transaction Highlights Structure Acquisition of a stake at Banco Votorantim, owned by Votorantim Finanças S.A., and partial capital increase equivalent to 50% of the total capital and 49.99% of the voting capital Price of the Transaction Acquisition value of a 50% stake after the transaction: R$ 4.2 billion, paid through: R$ 3.0 billion paid to Votorantim Finanças S.A. R$ 1.2 billion paid in Banco Votorantim S.A., through capital increase Payment Closing date (after Brazilian Central Bank approval): R$ 3.75 billion Six months after closing date: R$ 450 million Precedent Conditions Brazilian Central Bank approval 4

5 Partnership Structuring 1 Stake sale R$ 3.0 billion Banco do Brasil Shares ON R$ Votorantim Finanças 49.99% (ON) 50.01% (PN) 50.01% (ON) 49.99% (PN) 50% Total 50% Total 2 Shares issuance R$ 1.2 billion R$ Newly issued PN shares R$ 0 Historical dividend distribution R$ 0.75 billion BV Financeira e BV Leasing VAM Brokerage House Other business total capital partnership Private sector retains voting capital majority ON: VF with 33,356,791,208 and BB with 33,356,791,198 shares PN: VF with 7,412,620,267 and BB with 7,412,620,277 shares 5

6 Partnership Structuring Shareholders Equity Book Value of Banco Votorantim (R$ bn) Dividend Distribution to VF 2 45% stake acquisition on Banco Votorantim for R$ 3.0 billion 3.00 (0.75) Capital increase of R$ 1.2 billion, reaching a 50% stake in Banco Votorantim total capital % 50% 55% 50% Initial status Dividend distribution of BV to VF Post Dividend distribution Post stake acquisition (secondary) Capital increase from BB at BV Final status after capital increase Stake in BV (%) 100.0% 0.0% 55.0% 45.0% 50.0% 50.0% 6

7 Corporate Structure Banco do Brasil S.A. Votorantim Finanças S.A % (ON) 50.01% (ON) 50.01% (PN) 49.99% (PN) 50% Total 50% Total 100% BV Empreendimentos e Participações Ltda. BV Trading S.A. 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% CP Promotora de Vendas Ltda. BV Sistemas Ltda. BV Financeira S.A. BV Leasing Arrendamento Mercantil S.A. Votorantim CTVM Ltda. Votorantim Asset Management DTVM Ltda. Agência Banco Votorantim Nassau Banco Votorantim Securities Inc. Votorantim Bank Limited BV Corretora de Seguros 7

8 Future Corporate Governance of Banco Votorantim Board with 2 year mandate and Chairman rotation annually Chairman of the Board Antonio Francisco de Lima Neto Vice-Chairman of the Board José Ermírio de Moraes Neto Equal Number of Seats on the Board of Directors 3 members indicated by Votorantim Finanças 3 members indicated by Banco do Brasil CEO Wilson Masao Kuzuhara Existent Management Team Current Management Philosophy remains Current business model and management team of Banco Votorantim will remain 8

9 Section 2 Strategical Alignment 9

10 Strategic Growth Scenario Consolidation of the Brazilian Banking Industry International Financial Crisis: lack of liquidity, change of requirement regulation, and acceleration of consolidation process of the Brazilian Banking Sector Credit Evolution in Brazil - R$ billion 1, Number of Banks 1,2 240 CAGR 8.9% Financial partnership + economic growth Source: Brazilian Central Bank (Banco Central do Brasil) % of total deposits owned by the 5 largest banks 2 59% CAGR 24.8% % 1995 Dec Sep-08 Jun Sep-08 1 Includes only multiple and commercial banks authorized to operate by the Central Bank 2 Pro-forma for the merger of Itaú/Unibanco, Santander/Real, BB/BESC, BB/BEP and BB/Nossa Caixa 3 Loan operations CAGR considering the annualized data from January through September 2008 Banco do Brasil s Initiatives Merger/acquisition of state-owned banks Footprint in mortgage and vehicle financing Alternative product distribution through complimentary channels Purchase of loan portfolios Assessment of potential acquisitions of stakes in financial institutions Expansion to international markets Strength positioning in capital markets 10

11 Banco Votorantim Main Figures Performance Sep/08 Clients and Distribution 7 th largest bank in Brazil in Total Assets R$ 81.9 billion Loan Portfolio R$ 38.2 billion Assets Under Management R$ 18.8 billion 4 th position 1 Vehicle Financing 12.0% 17 Branches 8 in SP, 8 in other states: GO (1), MG (1), PR (1), RJ (2), RS (2) and SC (1), abroad (Nassau) 3 Million clients attended by BV Financeira Employees Alternative Distribution: BV Financeira: stores 61 branches, 82 credit Outsourcing Network: 29 thousand of partners Net Income LTM R$ 1.15 billion Efficiency Ratio (average 05-07) 25% Diversified Portfolio: corporate market, capital markets, treasury, international businesses, asset management, consumer finance and brokerage 1 September/2008 ranking, considering Itaú and Unibanco merger Source: Austin Asis, Brazilian Central Bank and banks financial statements 11

12 Banco Votorantim Assets Evolution Brazilian largest financial institutions (ranked by total assets R$bn) Today 1 1. BANCO DO BRASIL 2 CAIXA 3. BANESPA 4. BRADESCO 5. BAMERINDUS) 6. NACIONAL 7. UNIBANCO 8. REAL 9. SAFRA 10. ECONOMICO 11. NOSSA CAIXA 12. BANRISUL 13. BNB 14. LLOYDS TSB BANK 15. SANTANDER NOROESTE 16. APLICAP (LIQ EXT) 17. ITAU HOLDING FIN 18. SANTANDER (BOZANO) 19. MULTIPLIC 20. BANERJ EX JUD) 21. CITIBANK, N.A. 22. BBM 23. BANORTE 24. SANTANDER BANESPA 25. ABN - AMRO BANK 26. BANKBOSTON, N.A. 27. IBM 28. ITAMARATI 29. UBS PACTUAL 30. BMB 1. BANCO DO BRASIL 2. CAIXA 3. BRADESCO 4. ITAÚ 5. UNIBANCO 6. BANESPA 7. REAL 8. SAFRA 9. HSBC BANK BRASIL 10. NOSSA CAIXA 11. SANTANDER BANESPA 12. SANTANDER BRASIL 13. ABN - AMRO BANK 14. SANTANDER NOROESTE 15. SANTANDER (BOZANO) 16. BNB 17.VOTORANTIM 18. ITAU HOLDING FIN 19. BICBANCO 20. BANKBOSTON, N.A. 21. BARCLAYS 22. JP MORGAN (CHASE) 23. ALFA 24. BBM 25. LLOYDS TSB BANK 26. BESC 27. RURAL 28. UBS PACTUAL 29. BMB 30. ICATU 4.8 bn 1. BANCO DO BRASIL 2. BRADESCO 3. CAIXA 4. ITAU HOLDING FIN 5. UNIBANCO 6. SANTANDER BRASIL 7. ABN - AMRO BANK 8. BANESPA 9. NOSSA CAIXA 10. CITIBANK 11. SAFRA 12. HSBC BANK BRASIL 13. VOTORANTIM 19bn 14. BANRISUL 15. BNB 16. SANTANDER (BOZANO) 17. JP MORGAN (CHASE) 18. BANKBOSTON, N.A. 19. LLOYDS TSB BANK 20. SANTOS (LIQ) 21. BNP PARIBAS 22. RURAL 23. ALFA 24. BASA 25. UBS PACTUAL 26. BMB 27. WESTLB 28. FIBRA 29. ABC BRASIL 30. VOLKSWAGEN 1. BANCO DO BRASIL 2. BRADESCO 3. ITAU HOLDING FIN 4. SANTANDER + ABN 5. CAIXA 6. UNIBANCO 7. HSBC BANK BRASIL 8.VOTORANTIM 9. SAFRA 10. NOSSA CAIXA 11. CITIBANK 12. UBS PACTUAL 13. BANRISUL 14. BBM 15. BNP PARIBAS 16. DEUTSCHE BANK 17. BNB 18. FIBRA 19. BICBANCO 20. JP MORGAN 21. BMB 22. BANESTES 23. PANAMERICANO 24. VOLKSWAGEN 25. BMG 26. DAYCOVAL 27. ING 28. BASA 29. GMAC 30. BANCO IBI 64bn 1. ITAÚ + UNIBANCO 2. BANCO DO BRASIL + NC 3. BRADESCO 4. SANTANDER + ABN 5. CAIXA 6. HSBC BANK BRASIL 7.VOTORANTIM 8. SAFRA 9. CITIBANK 10. BANRISUL 11. BNP PARIBAS 12. UBS PACTUAL 13. FIBRA 14. BNB 15. ALFA 16. BBM 17. DEUTSCHE BANK 18. JP MORGAN 19. BICBANCO 20. VOLKSWAGEN 21. BANESTES 22. PANAMERICANO 23. SICREDI 24. BMB 25. DAYCOVAL 26. BMG 27. GMAC 28. BASA 29. ABC BRASIL 30. BESC 82 bn 34.VOTORANTIM 0.8 bn Source: Austin Asis 1 Data from sep/08: considering the merger of Itaú-Unibanco and the acquisition of Nossa Caixa by BB (pro-forma) 12

13 The transaction complements Banco do Brasil s growth strategy R$ billion Banco do Brasil 1 Banco Votorantim BB + Votorantim (50%) Growth + Total Assets % Loan Portfolio % Individuals % Corporations % Total Deposits % Net Income (nine months) % BIS Ratio % 13.6% 12.5% 100 bps Figures relative to September 30th, Considers BB + Nossa Caixa + BESC + Bescri. 2 BIS Ratio estimated for dec/08 considering change in the impacts of tax credits and the acquisition of Nossa Caixa. 13

14 Section 3 Transaction Rationale 14

15 Strategic reasons behind the partnership Grow faster under an intense consolidation process of the Brazilian Banking Sector Leverage asset generation of low cost, stable and secure funding sources Consolidate and grow in the vehicle financing market Develop and explore off-branch distribution channels Strength positioning in capital markets, including retail segment High quality asset generation Diversified product portfolio for the corporate market Expertise and size in vehicle financing, with more than 3 million serviced clients BV Financeira: 4 th largest in vehicle financing Distribution through sales representatives with more than 29 thousand points of sale Votorantim Corretora (Top 18 at BM&F and Top 35 at Bovespa), with strong potential of leverage on BB client base 15

16 Strategic reasons behind the partnership Banco do Brasil is the only retail bank that does not have a consumer finance arm Rationale of BV Financeira to Banco do Brasil Consumer Finance Portfolio Breakdown of Major Banks Consumer Finance Arm Controller Retail Funding Instituição + Crédito PF (R$ bi) % Crédito Total Veículos 1 (R$ bi) % Crédito PF % % % % % % % % % % % % Source: Quarterly company information, Central Bank Funding Generation + Assets 1 Considers CDC Auto and Leasing The strategic partnership will foster BB s vehicle financing growth off-branches, what today represents R$ 1.9 billion, 34% of vehicle loan portfolio 16

17 Strategic reasons behind the partnership Banco do Brasil is the only retail bank that does not have a brokerage house Macroeconomic Environment Benefits for Banco do Brasil Consistent growth of the average daily trading volume negotiated at Bovespa in the last years Increasing number of individuals in the stock exchange Increasing participation of foreign investors searching for higher return 1 2 Brokerage House Potential value creation through Banco do Brasil client base Votorantim CTVM counting with efficient operational structure to leverage its business through Banco do Brasil strong franchise The combination of brokerage services with the large individuals and institutional investors base of Banco do Brasil will create several opportunities for the partnership 17

18 Banco do Brasil and Banco Votorantim Combination Vehicle Financing Payroll Loans Corporate and Large Corporate Credit 4 th place in ranking (16%) 1 st place in ranking (22%) 2 nd place in ranking (21%) Market Share (%) Market Share (%) Market Share (%) 12% 19% 14% 7% 4% 3% Source: Central Bank; Austin Asis; banks financial statements; press Note: Considering the merger of Itaú + Unibanco (pro-forma), sep/08 data for vehicle financing, jun/08 data for payroll deductible loans and dec/07 data for Corporate/Large loans 18

19 Section 4 Benefits of the Transaction 19

20 BB-BV Partnership Fit into Nossa Caixa acquisition Credit and Funding Fit Diversified Individuals Product Portfolio Huge Client Base (Individuals and Corporate) Low Cost Funding National Presence Low Cost Funding Low Leverage Resources Availability State of SP Payroll High Quality Asset Generation Diversified Corporate Product Portfolio Outsourced Distribution Brokerage House 20

21 Operational and strategic fit between both companies will also benefit Nossa Caixa recent acquisition Individuals Loans / Low cost deposits (x) Consumer Credit 1 / Individual Loans 150.5x 0.89x 0.66x 0.48x 0.33x 0.28x Fit between operations will foster profitability 56% of Banco do Brasil deposits and 89% of Nossa Caixa deposits are considered low cost funding Low cost funding: Demand deposits, savings deposits and judicial deposits Note: Figures relative to September 30th, Do not considers payroll deductible loans 21

22 Spread (p.p.) Evolution of vehicle financing in the last 12 months Although there was a small spike in delinquency rates, recent evolution of vehicle financing demonstrates spread increases and average maturity reductions 1 1 Final Balance (R$ bn) Estimated data for Spt/08, Oct/08 and Nov/08 1 Estimated data for Spt/08, Oct/08 and Nov/ Average Maturity (days) Delinquency (%) Dec-08 Jan-07 Feb-08 Mar-08 Apr/08 May/08 Jun-08 Jul-08 Aug/08 Sep/08 Oct/08 Nov Dec-08 Jan-07 Feb-08 Mar-08 Apr/08 May/ Jun-08 Jul-08 Aug/08 Sep/ Oct/08 Nov Dec Jan Feb Mar Apr/ Mai/ Jun Jul-08 Agug08 Sep/ Oct/08 Nov % 4.0% Market 3.0% 2.0% 1.0% 0.0% Nov-06 May-07 Nov-07 May-08 Nov-08 1 Estimated 1 data data for for Spt/08, Spt/08, Oct/08 Oct/08 and and Nov/08 Nov/08 1 Estimated data for Spt/08, Oct/08 and Nov/08 22

23 Banco do Brasil and Banco Votorantim have conditions to make the transaction accretive In R$ millions except otherwise mentioned Banco do Brasil Banco Votorantim Opportunity Cost of Cash in the Transaction Banco do Brasil + Banco Votorantim Net Income LTM08 1 7, (495) 2 7,158 LTM 3Q2008 # Shares (million) Earnings per Share (R$) 2, , Immediate value creation of 1.2% in Earnings per Share, without considering potential synergies 1 Last twelve months net income ended on September 30, Opportunity cost based on current Selic interest rate (13.75%) over the transaction value (R$ 3,600 million) and excluding taxes. Considering cash payment. Value of R$3,600 million = R$3,000 million (stake acquisition) + 50% x R$1,200 million (capital increase) 3 Considering Banco do Brasil stake only 23

24 A stronger and more competitive Banco do Brasil + Improve capacity of assets origination in the competitive consumer finance industry; Access to well developed alternative distribution channels - auto dealers, partners and BV Financeira stores; Successful sales promotion model with nationwide presence in the vehicle financing industry; Strength positioning of BB in capital markets; Higher diversification in the corporate product portfolio 24

25 Section 5 Indicative Timetable 25

26 Next steps indicative timetable Material Fact informing the acquisition of a stake at Banco Votorantim Transaction approval by the Central Bank D D+15 D1 Apr-09 Signing of the Sales and Purchase Agreement and Underwriting Agreement Filling of regulatory documentation with Central Bank Transaction closing and financial settlement Assuming shortest possible timeframe 26

27 Transaction advisors Financial Advisor Due Diligence Legal Advisor FRANÇA A E NUNES PEREIRA ADVOGADOS Fairness Opinion Financial Advisor Due Diligence 27

28 Investor Relations SBS Qd.01 Ed.Sede III, 5º andar CEP Brasília DF Phone: (61) Fax: (61) bb.com.br [email protected] For further details, please access 28