Banco ABC

1. ABC Brasil

1.1 Midia

1.1.1 Rating Moodys: Baa3 – a menor na escala de Grau de Investimento

1.1.2 Recorde, em Setembro, de emissão de divida externa (apenas 3 semanas após liquidação do Cruzeiro do Sul).

1.1.3 Reducao da taxa media de títulos de bancos médios

1.1.4 O mercado já separou o joio do trigo (de um lado, intituicoes com altos níveis de capital, de outro instituições vulneráveis) -> ABC ficou no lado bom e por isso tem acesso ao capital externo

1.1.5 Controlador: Arab Banking Corp. Acionistas majoritários: Banco Central da Libia e Kwait Investment Authority. Free float: 34%

1.1.6 Desde Julho de 2012 (~ 1 ano), as acoes do ABC valorizaram 55%!! (x Ibovespa -2%)

1.1.7 Principais concorrentes: Pine, Bic Banco, Daycoval, Banrisul

1.1.8 Tendencia: baixo crescimento econômico, custo de captação elevado, queda de rentabilidade:

Rentabilidade

Daycoval ↘ ABC ↗

Pine ↘ Parana Banco ↗

Banrisul ↘ Bicbanco ↗

1.1.9 Banco Central: Ciclo de intervenções ENCERRADO! (PanAmericano, Cruzeiro do Sul, Prosper, VBA,..). Tombini: “O BC reconhece a importância desse segmento e trabalha continuamente para o desenvolvimento dos bancos pequenos e médios”. Após a “faxina”, o sistema financeiro esta ainda mais solido. Empenho atual do BC: criar condições para ampliar os investimentos (esp. Em infraestrutura). Os bancos médios fizeram o dever de casa nos últimos 12 meses e estão mais preparados, com carteiras de credito menores e de melhor qualidade -> menor despesa PDD.

1.1.10 FGC: elevação do teto de cobertura -> bancos médios serão os principais beneficiados (70 mil -> 250 mil). Bom para: CDBs, Letras de Cambio, LCA, LCI,..

1.2 Relatorio Fitch

1.2.1 Good performance during 2012 through a difficult environment of lower economic growth, higher credit costs and great uncertainty.

1.2.2 Agility in managing risks and adapting to diversify its income and funding

1.2.3 Credit portfolio quality, strong liquidity and adequate capitalization

1.2.4 Strong asset quality despite higher credit costs. In a challenging 2012, the bank was able to grow its assets by 28% and its total credit portfolio by 16,3%.

1.2.5 Lower but satisfactory profitability: lower interest rates, higher credit costs, rising competition, higher liquid assets. Future returns are expected to be pressured. However, ABC`s strong underwriting standards and high efficiency levels should be mitigating factors.

1.2.6 Easy Funding and Comfortable Liquidity: funding sources are well diversified. The banks has further improved its funding mix b taking advantage of attractive rates mainly in the local market. Important source of long-term funding: Programa de Letras Financeiras. The bank does not rely on funding from the majority parent (ABC). In 2012 issued subordinated debt that was well-subscribed.

1.2.7 Adequate capitalization: core capital/risk-weighted -> adequate rate.Regulatory capital -> comfortable. ABC Brazil provides a significant share of the groups operating income and, in a stress scenario, ABC Brazil would likely receive some degree of support from the parent (which is strongly capitalized..!!)

1.2.8 What might go wrong (although unlikely): deterioration of portfolio quality and/or reduction in liquidity or capitalization.

1.2.9 History: established in 1989 through JV between ABC and Roberto Guarantees6.2

1.2.10 Marinho Group. 1997: ABC acquires total control. 2007: IPO -> R$ 570 million.

1.2.11 Profile:

1.2.12 Corporate governance: day-to-day operations are conducted by six senior executives. Credit transactions that exceed local limits are sent to the board. Bovespa Level 2.

1.2.13 Strategy

 specific business niche: providing loans and guarantees to the corporate segment (mostly on an unsecured basis) and on providing credit services to middle market clients (again, mostly on an unsecured basis). 2010 portfolio`s growth: 33%.

 ABC Brazil management anticipated the risks of a slowing economy and adopted a cautious approach in 2011 by limiting loan growth to under 1% and focused on lower risk clients and expanded the volume of its guaranteed service which resulted in a conservative 12% growth in its total credit portfolio (both loan and guarantee portfolios).

 Managements goal is to increase participation of the middle market segment (strong growth potential with further improved profitability). The bank has expanded its team and increased the scope of potential targeted companies with R$ 250 M in sales. New regions. 13 middle-market business platforms. Various products (discounting of receivables, cash management, credit cards, BNDES transactions).

 Keeping conservative underwriting policies (80% of middle-market exposure was backed by real collateral – trade notes, receivables and property). The bank took advantage of the room left by the pullback of some competitors and by the consolidations of the larger banks. New clients: 30%.

 The bank views its corporate segment as a mature market