Banco Votorantim S.A. Earnings Presentation 1 st Half, 2011 - - PowerPoint PPT Presentation

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Banco Votorantim S.A. Earnings Presentation 1 st Half, 2011 - - PowerPoint PPT Presentation

Banco Votorantim S.A. Earnings Presentation 1 st Half, 2011 Disclaimer Certain statements made in this presentation may not be based on historical information or facts. This presentation therefore contains, or may be deemed to contain,


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Banco Votorantim S.A.

Earnings Presentation 1st Half, 2011

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Disclaimer

“Certain statements made in this presentation may not be based on historical information or facts. This presentation therefore contains, or may be deemed to contain, “forward looking statements” (within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended), including those relating to the general business plans and strategy, future financial condition and results and growth prospects of Banco Votorantim S.A. (“Banco Votorantim” or the “Company”), and future developments in its industry and its competitive and regulatory

  • environment. By their nature, forward‐looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or

may not occur in the future and are based on assumptions, data or methods which, although considered reasonable by the company at the time, may turn out to be incorrect or imprecise, or may not be possible to realize. Accordingly, actual results may differ materially from these forward‐looking statements due to a number of factors, including future changes or developments in the Company’s business, its competitive environment, technology developments and political, economic, legal and social conditions in Brazil. Forward looking information is not merely based on historical fact but also reflects management’s objectives and expectations. The Company can give no assurance that expectations disclosed in this presentation will be confirmed. The words “estimate”, “believe”, "anticipate", “wish", "expect", “foresee", “intend", "plan“, "predict", “forecast", “aim" and similar words, written and/or spoken, are intended to identify affirmations which, necessarily, involve known and unknown

  • risks. Known risks include uncertainties which include, but are not limited to, interest rates, product competition, market acceptance of products, the actions of

competitors, regulatory approval, currency type and fluctuations, monetary policy, among others. This presentation is based on events up to June 30th, 2011. The Company or any of its affiliates take no responsibility or liability to update the contents of this presentation in the light of new information and/or future events. Banco Votorantim and/or any of its affiliates do not accept and take no responsibility, whatsoever, direct or indirect, for transactions or investment decisions made on the basis of information contained in this presentation. Banco Votorantim may alter, modify or otherwise change in any manner the contents of this presentation, without the obligation to notify any person of such revision or changes. This presentation does not constitute an offer, or invitation, or solicitation of an offer, to subscribe for or purchase any securities. Neither this presentation nor anything contained herein shall form the basis of any contract or commitment whatsoever. Recipients of this presentation are not to construe the contents of this summary as legal, tax or investment advice and recipients should consult their own advisors in this regard. The market and competitive position data, including market forecasts, used throughout this presentation were obtained from internal surveys, market research, publicly available information and industry publications. Although the Company has no reason to believe that any of this information or these reports are inaccurate in any material respect, the Company has not independently verified the competitive position, market share, market size, market growth or other data provided by third parties or by industry or other publications and therefore does not make any representation as to the accuracy of such information. This presentation and its contents are proprietary information and may not be reproduced or otherwise disseminated in whole or in part without the Company’s prior written consent."

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Brazilian Macroeconomic Environment Banco Votorantim Overview Strategy and Business Segments Financial Highlights

Agenda

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2010 3.67 2009 3.19 2008 3.03 2007 2.66 2006 2.37 2005 2.15 2004 1.94

Real GDP growth (% p.a.) New light vehicle sales (Million units)

Brazil has shown a strong performance…

Brazilian macroeconomic highlights

Gross domestic product – GDP (R$ Trillion) Net public debt (% of GDP)

2012E¹ 4.0% 2011E¹ 4.0% 2010 7.5% 2009

  • 0.6%

2008 5.2% 2007 6.1% 2006 4.0% 2005 3.2% 2010 40% 2009 43% 2008 39% 2007 46% 2006 47% 2005 48% 2004 51%

Brazilian macroeconomic environment

2010 3.33 2009 3.01 2008 2.67 2007 2.34 2006 1.83 2005 1.62 2004 1.48

  • 1. BV Economy department as of July 2011; 2. The ratio “used cars/new cars” is ~2.5/ 1; and about 55%-60% of all cars sold in Brazil are financed

Source: Brazilian Central Bank; Ipeadata; Anfavea; Fenabrave; ANEF; Banco Votorantim

4th largest market in 2010

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…with solid macroeconomic fundamentals

Brazilian macroeconomic highlights

Brazilian macroeconomic environment

International reserves (US$ Billion) Unemployment index² (%) Price index – IPCA (% pa.) Interest rate – benchmark Selic¹ (% p.a.)

  • 1. Selic = Brazilian Central Bank’s overnight lending rate (target) - End-of-period; 2. As a % of the economic active population in metropolitan areas (average)

Note: estimates from BV Economy department as of July 2011, except for the unemployment index (Tendências Consultoria, as of July 2011) Source: Brazilian Central Bank; Ipeadata; IBGE; Banco Votorantim

2011E 6.2% 2010 5.9% 2009 4.3% 2008 5.9% 2007 4.5% 2006 3.1% 2005 5.7% 2004 7.6% 2011E 12.75 2010 10.75 2009 8.75 2008 13.75 2007 11.25 2006 13.25 2005 18.00 2004 17.75 350 289 239 207 180 86 54 53 2011E 2010 2009 2008 2007 2006 2005 2004 2010 6.7 2009 8.1 2008 7.9 2007 9.3 2006 10.0 2005 9.9 2004 11.5 2011E 6.4

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  • 1. As of December, 2009 (Fitch); except for Brazil (2010); 2. Dependency ratio measures the % of dependent people (people at not working age) / (people at working age)

Note: Monthly income by social class: E = up to R$701; D = R$701 to R$1.160; C = R$ 1.160 to R$4.638; B = R$4.638 to R$7.011; A = above R$7.011 Source: Brazilian Central Bank; Banco Votorantim

Strong financial sector, with considerable room for expansion

90% 80% 70% 60% 50% 40% 2050 2040 2030 2020 2010 2000 1990 1980 1970 1960 1950 Economic Active Population Dependency Ratio³ Demographic bonus

Credit penetration in Brazil (% of GDP) Young, compelling demographic dynamics3 Credit availability (Loans as % of GDP1) Growing middle class (% of population)

Brazilian financial system

2010 46% 2009 44% 2008 41% 2007 35% 2006 31% 2005 28% 2004 26% Mexico 17% Peru 24% Colom bia 26% Russia 43% Brazil 46% India 56% Chile 75% China 131% Class E Class D Class C (Middle) Classes A-B May/11 17.2% 18.7% 53.3% 10.8% Jan/04 35.5% 18.4% 38.7% 7.4%

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Brazilian Macroeconomic Environment Banco Votorantim Overview Strategy and Business Segments Financial Highlights

Agenda

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Banco Votorantim is one of the leading players in Brazil…

7th largest bank with a diversified multi-niche portfolio

Banco Votorantim is the 7th largest bank in Brazil by total assets …

7th largest bank in Brazil by total assets¹

  • Founded in 1988
  • Total assets of R$ 119.2B
  • ~ 7,000 employees (~5,3k in Consumer Finance )
  • ~ 5.9M customers in Consumer Finance arm

Multi-niche strategy Low fixed cost business model

  • Third-party distribution
  • Highly variable compensation

Robust governance structure and conservative financial policies Culture of excellence, cooperation, agility and efficiency Recognized by the market

  • Credibility, credit quality and innovation
  • “Best place to work”

... with a diversified portfolio

  • f attractive businesses

BV Financeira and BV Leasing

(Consumer Finance)

  • Auto Finance: #2 player²
  • Payroll Loans
  • Personal Loans
  • Credit Cards

Votorantim Wealth Management

  • Private Bank
  • Asset Management: “Top 10”

Wholesale Banking

  • Corporate
  • Investment Banking
  • Middle Market

Banco Votorantim

Votorantim Brokerage

  • Full Service Brokerage House
  • Broker Dealer in New York
  • Rep office in London

Banco Votorantim overview

  • 1. Excluding BNDES; 2. In terms of origination

Source: Banco Votorantim; Brazilian Central Bank

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… with a robust shareholder base

Two of the largest Brazilian institutions as shareholders: Votorantim Group and Banco do Brasil

  • One of the largest privately-held industrial

conglomerates in Latin America

  • Founded in 1918
  • R$29.5B in revenues and R$6.6B in EBITDA in 2010
  • Market leader in a diversified portfolio of basic

materials and commodities, e.g.: – Pulp & paper: #1 pulp producer in the world – Cement: top 10 global player – Metals: leading global position in zinc and nickel; #1 aluminum producer in Brazil – Steel: established presence in long steel in South America – Orange juice: #3 global player

  • ~65,000 employees
  • Rated: Baa3 (Moody’s) / BBB (S&P) / BBB- (Fitch)
  • Largest FI in Brazil, with 200+ years old
  • R$11.7B in net profits in 2010, with 24.6% ROAE
  • Market leader¹ in terms of

– Total assets (R$811B) – Total deposits (R$377B) – Loan portfolio (R$358B) – AuM (R$360B)

  • Diversified funding base, with low cost deposits

– ~65% of the basic interest rate – Selic

  • 59.2% controlled by the Brazilian Government
  • Market capitalization¹: R$89.9B
  • ~54M retail clients
  • ~109,000 employees
  • Rated: Baa2 (Moody’s) / BBB- (S&P) / BBB (Fitch)

Votorantim Group Banco do Brasil (BB)

  • 1. End of 2010 figures 2. Refers to voting capital

Source: Company IR website

Banco Votorantim overview

49.99%² 50.01%²

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Banco Votorantim entered into a strategic partnership with Banco do Brasil in 2009

Robust deposit base: Funding Strength and expertise of Brazil’s premier conglomerate Asset origination capacity: Growth Brokerage: high growth potential and scale gains Largest retail customer base in Brazil Stronger and more competitive institution Successful auto finance and alternative channels models National presence through huge distribution network Strength and historic tradition of Brazil’s oldest bank

Strategic partnership – rationale

Source: Banco Votorantim

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Partnership has already produced tangible results

Both Banco Votorantim and Banco do Brasil have benefited from the strategic agreement

Strategic partnership – results achieved

Asset securitization program

  • Operational Agreement with BB for securitizing credit assets originated by

BV Financeira and thus – Accelerate growth in Consumer Finance (BV Financeira) – Diversify funding sources

Additionally, Banco Votorantim has a stand-by credit facility from BB equal to its shareholder s equity Selected examples of revenue synergies already captured Growth in Auto Finance

  • BV Financeira acts as BB s auto financing arm outside of its retail branches

– BV became 2nd largest auto finance player by origination (~22% share)

Cross-offering

  • f investment

products

  • New structured investment funds created in partnership with BB and

distributed to high net worth individual from both institutions, e.g. – Real Estate (FIIs): BB Votorantim JHSF e BB Renda Corporativa – Receivables (FIDC): Americanas/B2W

Growth of BV Corretora

  • Increased use of BV s brokerage house by BB to process transactions from

its treasury, investment funds and retail segment (homebroker)

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Joint governance while maintaining independent business model and management team

Total: 50% Voting: 49.99% Non-voting: 50.01% Total: 50% Voting: 50.01% Non-voting: 49.99%

2-year term and annual Chairman rotation Maintenance of professional and independent management

  • Independent Management team and business

model

  • Equal representation at the Board of Directors (3

members from each shareholder)

  • All decisions based on majority rule (neither

shareholder has veto power)

  • The chairman and vice-chairman positions rotate

annually between the two shareholders

Name Position Company

Aldemir Bendine Chairman Banco do Brasil José Ermírio de Moraes Neto Vice-Chairman Votorantim Finanças Marcus de Camargo Arruda Director Votorantim Finanças Wang Wei Chang Director Votorantim Finanças Paulo Rogério Caffarelli Director Banco do Brasil Ivan de Souza Monteiro Director Banco do Brasil

Name Position

Wilson Masao Kuzuhara CEO Milton Roberto Pereira Executive Vice President Walter Guilherme Piacsek Junior Executive Vice President João Roberto Teixeira Executive Vice President Luis Henrique Rodrigues Executive Vice President

Ownership Structure Corporate Governance Highlights

Strategic partnership – governance

Board of Directors Senior Management

Source: Banco Votorantim

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1994

  • 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

  • 34. VOTORANTIM 0.8 B

2002 2007 1998 March, 2011

  • 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 NOROES.
  • 15. SANTANDER (BOZANO)
  • 16. BNB
  • 17. VOTORANTIM 5 B
  • 18. ITAU HOLDING FIN
  • 19. BICBANCO
  • 20. BANKBOSTON, N.A.
  • 21. BARCLAYS
  • 22. JP MORGAN (CHASE)
  • 23. ALFA
  • 24. BBM
  • 25. LLOYDS TSB BANK
  • 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 19 B
  • 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
  • 1. BANCO DO BRASIL
  • 2. BRADESCO
  • 3. ITAU HOLDING FIN
  • 4. SANTANDER + ABN
  • 5. CAIXA
  • 6. UNIBANCO
  • 7. HSBC BANK BRASIL
  • 8. VOTORANTIM 64 B
  • 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
  • 1. BANCO DO BRASIL
  • 2. ITAU
  • 3. BRADESCO
  • 4. CAIXA
  • 5. SANTANDER
  • 6. HSBC
  • 7. VOTORANTIM
  • 8. SAFRA
  • 9. CITIBANK

10.BTG PACTUAL 11.BANRISUL 12.DEUTSCHE 13.CREDIT SUISSE 14.BNB 15.BNP PARIBAS 16.VOLKSWAGEN 17.BIC 18.JP MORGAN CHASE 19.BANSICREDI 20.PANAMERICANO 21.SOCIETE GENERALE 22.BMG 23.ALFA 24.BANCOOB 25.FIBRA

29% CAGR ’98-’11 15%2

Banco Votorantim has consistently outgrown the market...

Seventh largest bank by total assets and third largest Brazilian privately-owned bank

Largest financial institutions in Brazil by total assets¹ (R$B)

Banco Votorantim overview

  • 1. Current values 2. Growth of the Brazilian financial system (SFN)

Note: Ranking excludes BNDES; June/11 figures not yet available when presentation was updated Source: Brazilian Central Bank ; Banco Votorantim 832 B 751 B 599 B 432 B 391 B 138 B 113 B 77 B 55 B 46 B

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Partnership with Banco do Brasil Niche Bank Multi-Niche Bank Treasury Focused

A rapidly growing franchise with a multi-niche strategy, supported by a strong shareholder base

… and has a proven track record of expanding into new businesses

1st Wave 2nd Wave 3rd Wave 805 575 315 291 450 993 724 343 424 867 1H11 8,706 2010 8,389 2009 7,145 2008 6,362 2007 6,004 2006 5,025 2005 4,029 2004 3,086 2003 2,191 2002 1,516 2001 2000 1999 1998 Enters Auto Financing and Private Bank Representative Office in London Expands into Corporate Partnership with BB with sale of 49.99% voting shares Begins underwriting transactions Expands into Middle Market Broker dealer in the U.S. Expands into IB, Payroll Loans and Credit Cards Opens VAM Opens Bahamas’ Branch Shareholders’ Equity (R$M) Capital Increase (R$M)

Banco Votorantim overview

Source: Banco Votorantim

4th Wave

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Brazilian Macroeconomic Environment Banco Votorantim Overview Strategy and Business Segments Financial Highlights

Agenda

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Multi-niche strategy focused on five main businesses

Diversified business portfolio of attractive businesses

Shareholders

Consumer Finance Wholesale Banking Auto Finance

Largest used car finance player in Brazil Growing presence in new auto finance 2nd largest overall auto finance player by origination

Payroll Loans

5th largest player in this fast growing segment Focus on retirees and pensioners (INSS)

Corporate & IB (CIB) Wealth Management Middle Market

Aggressive growth in a rapidly expanding segment of the Brazilian economy, gaining scale Leverage CIB structure to enhance product offering

Pillars

Corporate strategy

Source: Banco Votorantim

9th largest asset manager, with innovative products (e.g. leader in real estate funds) Private Bank focused

  • n continued growth

through customized solutions One of the leading players in Brazil, focused on long-term relationships Diversified product platform, based on credit, ECM, DCM, M&A, derivatives, and tailor-made structured finance

Banco do Brasil Votorantim Group

+

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~5,5 milhões empresas

Brazilian Wholesale Market

Corporate Middle Market SME

~5-6 million companies

Leading player in the Corporate segment

  • Strong track record in providing tailor-made structured products
  • High market penetration
  • Focus on cross-selling (esp. fee-based) within its large client base

~2,500 companies ~20,000 companies

R$200M R$20M Annual Revenues

Strong growth opportunities in the Middle Market

  • Fragmented and rapidly expanding segment of the Brazilian economy,

with attractive spreads

  • Market penetration still low, despite recent fast growth
  • Focus on agility and proximity to better serve clients, leveraging the

CIB product platform and expertise 25 38 58 81 89 50 100 Corporate credit assets¹ - Dec 09 (R$B, estimated) Market Share 28% 25% 18% 12% 8%

Wholesale Banking: Top 5 player in the Corporate credit market

Cross-selling (esp. fee based) in Corporate, growing fast in the Middle Market

Complete solution provider, focused on higher value- added structured products

Note: From July 2011 onwards, Middle Market segment includes companies with annual sales between R$20M and R$400M

  • 1. Includes reported credit portfolio (Central Bank criteria) and guarantees provided (avais e fianças); excluded private securities

Source: Banco Votorantim; BCG analysis

Wholesale Banking

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Wholesale: credit portfolio up 5% in 1H11, driven by the strong growth in mid-sized companies

39.0 7.3 31.7 Jun/11 Corporate Middle Market 2010 37.2 31.3 5.9 2009 35.6 33.4 2.1 2008 35.6 33.9 1.7 Expanded¹ credit portfolio (R$B) Loan portfolio rated AA – C² (%)

Expanded wholesale credit portfolio up 4.9% in 1H11, to R$39.0B, driven by Middle Market Wholesale maintains its good quality standards: 95.4% of loans are rated AA – C

95.4% Jun/11 99.0% 2010 2009 97.3% 2008 98.3% Wholesale: Corporate and Middle Jun11/Dec10 +23.8% +4.9% +1.3%

Note: Middle Market: R$20M – R$200M in annual sales; Corporate: annual sales over R$200M; From July 2011 onwards, Middle Market segment includes companies with annual sales between R$20M and R$400M

  • 1. Includes guarantees issued (“avais e fianças”); 2. Brazilian Central Bank resolution no. 2,682

Focus on cross-selling in Corporate, and gaining scale and efficiency in Middle Market

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Auto Finance: well positioned in a fast-growing market

  • #2 auto finance player by origination (~22% share)

– #1 used auto finance player – Growing share in new auto finance

  • ~5.9 million clients
  • Autos account for 85% of the consumer finance portfolio
  • Scalable and low fixed cost business model

– Third-party distribution network – Highly variable compensation Payroll loans: continuous growth focused on retirees and pensioners (INSS)

  • 5th largest player in this fast growing segment¹

Further diversifying into complementary businesses

  • Start-up of credit cards (~1,6M cards issued²)
  • Fast-growing distribution of insurance products

National geographic coverage

  • National coverage via 120+ consumer financing

stores…

  • … and especially via an extensive third-party

distribution network – ~24,600 auto resellers – ~1,500 correspondent banks (“promotoras”)

103 consumer financing stores 25 combined stores 40 branches

Consumer Finance

Consumer Finance: A successful business model based on third-party distribution

  • 1. Considering securitization 2. ~300k active cards

BVF is well positioned in the fast-growing Auto Finance and Payroll loans segments… … with an extensive geographic coverage, especially via third-party channels

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BV Financeira has gained share in two of the most relevant and fastest growing consumer credit segments

2010 560 33% 25% 42% 2009 470 33% 23% 44% 2008 394 35% 20% 45% 2007 318 35% 20% 44% 601 Jun/11 32% (195) 43% (257) 25% (149)

19% CAGR 2007-Jun/11 27% 17%

20%

Payroll Auto Finance³ Others²

Brazilian Consumer Credit Market¹ (R$B) BV Financeira's Loan Portfolio (R$B)

Relevance of Auto Finance and Payroll loans explained by lien on vehicle and payroll deduction, resulting in low NPL

40.8 Jun/11 34.6 5.8 2010 37.2 31.9 4.9 2009 26.3 22.6 3.4 2008 19.2 17.2 1.7 2007 15.6 13.3 2.0 Consumer Finance

12%

Auto Finance - market share (%)

18% CAGR 2007-Jun/11 36% 31%

32%

Auto Finance and Payroll loans are the most relevant consumer credit segments... … and BV Financeira has consistently

  • utgrown the market, gaining market share
  • 1. Balance of non-earmarked resources (“recursos livres”); 2. Includes personal credit, credit card installments not financed, credit cards, rural, overdraft, CDC –others, housing credit and other

credit transactions with non-earmarked resources; 3. Includes CDC and Leasing Source: Brazilian Central Bank (Notimp, Séries temporais); Banco Votorantim

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Jun/11 94.6% 2010 97.1% 2009 95.0% 2008 95.8%

Auto Finance remains a profitable market where BV maintains its credit quality

Auto financing has a track record of high profitability in Brazil … … and BV Financeira's loan portfolio has maintained good levels of credit quality

Consumer Finance Auto Finance: Average Market interest rate and spread (% p. a.) 12.9 25.2 Jun 10 11.6 23.6 Dec 09 13.9 25.4 Jun 09 16.8 26.9 Dec 08 23.5 36.5 Jun 08 16.3 31.1 17.3 Jun 11 29.8 Dec 10 Interest rate (%) Spread (%) BV Financeira: Loan portfolio rated AA – C¹ (%)

  • 1. Brazilian Central Bank resolution no. 2,682, including securitized assets

Source: Brazilian Central Bank; Banco Votorantim

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BV Financeira is the 2nd largest Auto Finance player

And has a growing presence in Payroll Loans

BV Payroll loans – origination (R$B) and estimated market share (%) Consumer Finance

BVF is the 2nd largest auto finance player, with ~22% market share in new loans … … and continues growing in payroll loans, focusing on retirees and pensioners

2Q11 1.9 7.3% 1Q11 1.5 6.6% 4Q10 1.6 6.4% 3Q10 1.9 6.5% 2Q10 1.6 5.9% 1Q10 1.6 6.1% 90% % of INSS and Public 88% BV Auto Finance – origination (R$B) and estimated market share (%) 23% 22% 23% 23% 19% 20% 6.2 2Q11 1Q11 5.1 4Q10 7.8 3Q10 7.3 2Q10 5.9 1Q10 5.0 Used cars/ Loan Portfolio 81% 69% Loan to value (%) 64% 67%

Source: Brazilian Central Bank; ABEL – Brazilian Leasing Association; Banco Votorantim

2nd largest player

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Brazilian Macroeconomic Environment Banco Votorantim Overview Strategy and Business Segments Financial Highlights

Agenda

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Solid profitability and capital base

Net income of R$541M in 1H11, up 13.2% compared to 1H10 ROAE of 13.0% in 1H10 (12.7% in 1H10) BIS ratio of 13.9% in Jun/11, up from 13.1% in Dec/10

Fast growing, high quality credit portfolio

Expanded¹ credit portfolio increased 7.2% from Dec/10, to R$79.8B,…

  • Middle Market grew 23.8% from Dec/10, to R$7.3B
  • Consumer Finance grew 9.6% from Dec/10, to R$40.8B

– Growth rate reduced in 1H11 due to macro-prudential measures …while maintaining its good quality standards, despite the growth observed in market delinquency levels for individuals

  • 94.1% of the consolidated loans portfolio rated AA – C as of June 2011

Increasingly diversified funding

Continuous funding from strategic partner BB via securitization, in addition to a stand-by credit facility equal to BV’s shareholders’ equity Local funding via “Letras Financeiras” of R$6.8B, up from R$2.9B in Dec/10 International funding rose to 13% (10% in Dec/10)

Increased efficiency and scale

Cost to income ratio² of 36.3% in 1H11, benefited by a low fixed cost business model – third-party distribution and highly variable compensation

Financial Highlights – 1H11

Financial Highlights – Summary

  • 1. Includes guarantees provided and private securities; 2. Accumulated in the last 12 months
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Loan portfolio risk profile (%)

High quality and fast growing credit portfolio

Credit portfolio growth driven by Middle Market and Consumer Finance

Financial Highlights – Credit Portfolio

17% 40% 28% 13% 2%

Jun/10 – R$46.7B Jun/11 – R$61.2B

15% 40% 29% 13% 2%

Over 3 years 1 to 3 years 91 to 360 days Up to 90 days Past due²

  • 1. Includes guarantees provided and private securities; 2. Installments past due from 15 days; other figures are related to installments falling due

Expanded¹ credit portfolio (R$B) Loan portfolio by maturity date (%)

+13.3% Consumer Finance Wholesale Jun/11 79.8 40.8 39.0 2010 74.4 37.2 37.2 2009 61.8 26.2 35.6 2008 54.8 19.3 35.6

Expanded¹ credit portfolio by segment (%)

5.9% 94.1%

Jun11/Dec10 +4.9% +9.6% +7.2%

D-H AA-C

35% 42% 50% 51% 62% 54% 42% 40% Jun/11 Corporate Middle Consumer Finance

100%

79.8 9% 2010 74.4 8% 2009 61.8 3% 2008 54.8 3% Jun/11 – R$61.2B

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Jun/11 3.2% 2010 2.0% 2009 3.2% 2008 2.0% Jun/11 4.8% 2010 5.5% 2009 9.3% 2008 12.6%

Diversified and good quality loan portfolio

65% of the loan portfolio distributed over 5.9 million clients

Jun/11 99% 2010 130% 2009 101% 2008 113% Jun/11 – R$61.2B Corporate entities 35% Individuals 65% Financial Highlights – Credit Portfolio

Loan portfolio by segment (%) Coverage ratio² (%) Client concentration – 10 largest clients Allowance for loan losses/ Loan portfolio¹ (%)

  • 1. Does not consider securitized assets 2. Allowance for Loan Losses / Non-performing Loans (past-due over 90 days)

Over 5.9M Consumer Finance clients

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Jun/11 36.3% 2010 36.9% 2009 34.1% 2008 34.3%

  • 1. Gross financial margin (before allowance for loan losses), divided by average interest-earning assets 2. Efficiency Ratio: ratio, expressed as a percentage, of (a) the sum of personnel

expenses and other administrative expenses and (b) the sum of gross income from financial operations before allowance for loan losses, Income from banking fees and rendered services, Other operating income, Other operating expense and Fiscal hedge adjustment; 3. Indicator was revised from 6.3% to 5.3% due to reclassifications in the 2010 Income Statement

1H11 13.0% 2010 12.7% 2009 11.9% 2008 14.6% 541 478 802 902 1,015 2008 2009 +13.2% 1H11 1H10 2010 2009 5.3%³ 2010 5.8% 1H11 6.9% 2008 5.9% Financial Highlights – Performance

Net income (R$M) Return on average equity – ROAE (%) Net Interest Margin – NIM (%)¹ Cost to income ratio – Last 12 months (%)²

Solid cost to income ratio, benefited from a low fixed cost business model, based on third-party distribution

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Solid capital base and strong liquidity level

2010 13.1%

9.3% 3.8%

2009 13.0%

10.1% 2.9%

2008 13.5%

11.0% 2.5% 4.2%

13.9% Jun/11

9.7%

Jun/11 38% 2010 36% 2009 45% 2008 35%

  • 1. Cash includes cash, interbank funds applied, and securities

Jun/11 8,706 2010 8,389 2009 7,145 2008 6,362 128 241 190 220 Jun/11 2010 2009 2008

Tier I Tier II

Financial Highlights – Capitalization and Liquidity

Dividend distribution (R$M) Cash as percentage of total assets1 Shareholders’ equity (R$M) BIS ratio (%)

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Diversified funding sources

… and increased international funding Funding grew 11.1% from 4Q10… …with steady diversification of local funding sources…

Financial Highlights – Funding 6.9 8.8 13.5 2009 62.3 24.5 14.2 6.3 4.4 Jun/11 6.1 2008 49.6 18.9 9.2 6.3 2.9 8.7 3.6 +11.1% Deposits Repos Issuance of securities² Subordinated debt Loans and others¹ Securitization 89.9 23.6 19.4 15.7 5.7 6.9 9.6 15.9 2010 80.9 23.6 17.7 10.3 Credits assigned to BB Financing bills³ (LFs) Jun/11 18.5 11.7 6.8 Dec/10 12.3 9.4 2.9 +50% 11.5 Jun/11 Eurobonds and loans +38% Dec/10 8.3

  • 1. Includes Box of options and NCE repo; 2. Includes Eurobonds, Debentures, LFs and LCA ; 3.Includes subordinated financing bills

Note: International funding accounted for ~13% of the total in Jun-11, being 100% swapped to BRL; Onlending and repos with government securities are not considered funding

Funding evolution (R$B) R$B R$B

Additionally, Banco Votorantim has a stand-by credit facility from BB equal to its shareholders’ equity

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Banco Votorantim’s current ratings

National International Foreign Currency Senior Unsecured MTN (LT)

  • Baa1 / P-2

Foreign Currency Bank Deposits (LT/ ST)

  • Baa2 / P-2

Local Currency Bank Deposits (LT/ ST) Aaa.br / BR-1 A3 / P-2 Financial Strength

  • C-

National International Foreign Currency (LT/ ST)

  • BB+ / B

Local Currency (LT/ ST)

  • BB+ / B

National (LT/ ST) brAA+ / brA-1

  • National

International Foreign Currency (LT/ ST)

  • BBB- / F3

Local Currency (LT/ ST)

  • BBB- / F3

National (LT/ ST) AA+ (bra) / F1+ (bra)

  • Individual
  • C/D

Support

  • 2

Ratings

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Brazilian Macroeconomic Environment Banco Votorantim Overview Banco Votorantim Strategy Financial Highlights Appendix

Agenda

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49.99% (ON) 50.01% (PN) 50% Total 50.01% (ON) 49.99% (PN) 50% Total

Banco do Brasil Equity sale (R$ 3.0 B) 1 Equity issuance (R$ 1.2 B) 2

Voting shares (ON) R$ New issue Non-voting shares (PN)

Note: Voting shares (ON): VF with 33,356,791,208 and BB with 33,356,791,198 shares. Non-voting shares (PN): VF with 7,412,620,267 and BB with 7,412,620,277 shares.

Dividend distribution (R$ 0.75 B)

BV Financeira BV Leasing Asset Management (VAM) Brokerage Other businesses

Details on Banco Votorantim / BB Transaction

50 – 50 total capital partnership

R$ R$ Strategic partnership - transaction