Institutional Presentation December 2010 Agenda Page 3 Brazilian - - PowerPoint PPT Presentation

Institutional Presentation

December 2010

2

Agenda

Page 7 Page 9 Page 13 Page 24

Distribution Loan Credit Portfolio Daycred - Payroll

Page 14

Daycred – Auto Loans Asset Management Profitability Quality of Loan Portfolio

Page 12

Middle Market Portfolio

Page 19 Page 6 Page 18

Corporate Governance and Financial System Ranking Liquidity Capital Structure

Page 11 Page 17

Daycred – DCC

Page 25 Page 16

Foreign Currency Funding

Page 15

Funding Efficiency Ratio

Page 23 Page 5

Key Figures Peers

Page 26 Page 3

Brazilian Credit Market

30% 31% 30% 29% 30% 28%

70% 69% 70% 71% 70% 72% 2005 2006 2007 2008 2009 Nov-10

Up R$ 100.000 From R$ 100.000 to R$ 10 million

Overview of the Brazilian Credit Market

Credit Evolution in Brazil (% of GDP)

Total credit operations of the financial system - R$Billion

Source: Brazil Central Bank

Loan to Companies up to R$ 100 million – R$ Billion

211.3 250.8 315.8 395.9 423.9 499.5

36.6 32.0 28.8 26.8 27.9 24.9 26.4 24.7 22.0 24.0 24.5 28.1 30.7 34.8 41.3 45.0 46.6 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Nov/10 498.7 607.0 732.6 935.9 1227.3 1414.3

2004 2005 2006 2007 2008 2009 Nov-10

1,704.0

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661 993 1,680 3,574 4,020 4,033 6,222

2004 2005 2006 2007 2008 2009 2010

Banco Santos Crisis / Beginning of Payroll Loans

Financial System Total Credit Operations vs. Banco Daycoval (% p.a.)

Branch Expansion Program IPO

Total Loan Portfolio - R$ Million

World Crisis

19% 22% 21% 28% 31% 15% 17% 40% 51% 67% 112% 15%

• 1%

53% 2004 2005 2006 2007 2008 2009 2010 Brazilian Credit Volume Daycoval Loan Portfolio

Brazilian Credit Market vs. Banco Daycoval

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CAGR 04-10: 45.3%

Key Figures 4Q10

Total Assets R$ 8,938.5 million Loan Portfolio R$ 6,222.5 million Funding R$ 5,241.1 million Shareholders’ Equity R$ 1,777.8 million Basel Index 19.9%

4Q10 2010

Net Income R$ 70.9 million R$ 274.7 million ROAE 17.0% 16.0% ROAA 3.1% 3.3% NIM-A (*) 12.1% 11.9% Efficiency Ratio 27.8% 24.6%

(*) New methodology excluding repurchase agreements – tri-party repos outstanding

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Name / Title Years on Daycoval Sasson Dayan, CEO 42 Morris Dayan, Executive and Investor Relations Officer 18 Salim Dayan, Executive Officer 19 Carlos Moche Dayan, Executive Officer 17 Regina Maciel Nogueira, Officer 20 Nilo Cavarzan, Officer 6 Albert Rouben, Officer 11

Ranking Daycoval (*) Private National Banks Net Income 12º Shareholders’ Equity 16º Total Deposits 19º Total Assets 23º

Rating Ranking Daycoval Board of Directors Board of Executive Officers

Corporate Governance and Financial System Ranking

Global Scale Long Term BB Short Term B National Scale Long Term brAA- Short Term brA‐1 Positive

December 2010

Global Scale Long Term BB Short Term B National Scale Long Term A+ (bra) Short Term F1 (bra) Stable

November 2010

Low Risk – Mid-Term Index 11.40 General Rank: Março/10 8

July 2010

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Representative of the Controlling Shareholder Rony Dayan

Chairman Representative of the Controlling Shareholder Sasson Dayan

Independent Member Gustavo Henrique de Barroso Franco Independent Member Peter M. Yu

Source: Brazil Central Bank – September 2010

30 Branches

SÃO PAULO – SP HD Av. Paulista IFP Promotora de

Serviços de Intermediação Financeira Ltda, is a financial intermediation company created to promote operations for

• individuals. It has 57

stores in operation

throughout Brazil.

11 Daypag Offices

in major cities of São Paulo State: Osasco, Barueri, Guarulhos, Americana, Atibaia, Campinas, Ribeirão Preto, Mogi Guaçu e Detran São Paulo

3 exchang in São

Paulo and 2

correspondent foreign exchange

desks distributed strategically in São Paulo and Rio de Janeiro SP - ALPHAVILLE RJ - RIO DE JANEIRO PR - LONDRINA SP - BOM RETIRO AL - MACEIÓ RS - CAXIAS DO SUL SP - BRÁS BA - SALVADOR SC - FLORIANÓPOLIS SP - CAMPINAS CE - FORTALEZA DF - BRASÍLIA SP - FARIA LIMA PE - BOA VIAGEM GO - GOIÂNIA SP - GUARULHOS PE - RECIFE MS - CAMPO GRANDE SP - RIBEIRÃO PRETO RN - NATAL MT - CUIABÁ SP - SÃO BERNARDO RS - PORTO ALEGRE AM - MANAUS ES - VITÓRIA SE- ARACAJU PA - BELÉM MG - BELO HORIZONTE PR - CURITIBA

More than 100 points of distribution

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Daycoval’s Market Capital and Ownership Breakdown

Stock Performance– December 2010

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First middle market bank to implement a ADR Level I Program. Coverage by research analysts from 18 local and international brokerage firms. Free Float: 54.9 million shares.

Ownership Breakdown – December 2010

Total Shares: 216.3 million shares.

65.8% 8.4% 0.4% 25.4%

Daycoval Holding Financeira S/A Controlling Shareholders (Family) + Daycoval Expert Treasury Free-Float DAYC4 (R$) 4Q10 3Q10

• Chg. %

2010 2009

• Chg. %

Closing Quotation 12.95 11.14 16.2% 12.95 9.78 32.4% High for the quater 13.05 11.14 17.1% 13.05 9.80 33.2% Average for the quarter 12.13 9.55 27.0% 10.16 7.18 41.5% Low for the quarter 11.00 8.30 32.5% 7.90 3.90 102.6% Book Value 8.30 8.10 2.5% 8.30 7.90 5.1% Market Value (R$)Million 2,801.40 2,409.86 16.2% 2,801.40 2,115.65 32.4%

3,932 4,210 4,765 5,485 6,031 130 104 80 61 191 4Q09 1Q10 2Q10 3Q10 4Q10

Loan Portfolio Credit Assignments

4,314 4,062 Loan Portfolio – R$ Million

12.2% 53.2 %

4,845 5,546 6,222

Loan Portfolio: robust growth of 53.2% during the last 12 months

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Middle Market

% of Credit Portfolio As of December , 2010 Portfolio (R$ mn) Growth

67.1% 23.7% 8.5% 0.7% 100.0% 4,176.8 1,476.3 526.8 42.6 6,222.5 15.2% vs 3Q10 77.8% vs 4Q09 6.7% vs 3Q10 40.4% vs 4Q09 5.1% vs 3Q10

• 17.4% vs 4Q09

20.7% vs 3Q10 77.5% vs 4Q09 12.2% vs 3Q10 53.2% vs 4Q09 Working Capital, Receivables financing, trade finance, BNDES sureties & avals Loans to INSS, Armed Forces, Courts, Private Companies, Federal Gov, Municipalities, among other Loans to Small Vehicles, Motorcycles, Heavy-duty Vehicles In-store financing Payroll Loans Auto Loans Direct Credit To Consumers

Products

Total

Loan Portfolio: growth in the Middle Market portfolio over the last 12 months

67.1% 23.7% 8.5% 0.7%

Middle Market Payroll Loans Auto Loans DCC

(*)Includes Credit Assignments

Breakdown Loan Portfolio (*) 4Q09

Breakdown Portfolio Middle Market 4Q10 (million)

Working Capital R$ 2,033.3 48.7% Guaranteed Account R$ 1,080.9 25.9% Trade Finance R$ 332.5 8.0% BNDES R$ 266.4 6.4% Avals and Sureties R$ 249.4 6.0% Receivables Purchase R$ 214.3 5.0% TOTAL R$ 4,176.8 100.0%

57.8% 25.9% 15.7% 0.6%

Middle Market Payroll Loans Auto Loans DCC

Breakdown Loan Portfolio (*) 4Q10

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Middle Market: significant increase of 77.8% over the last 12 months, currently representing 67.1% of the total portfolio

2,349 2,587 3,055 3,627 4,177 4Q09 1Q10 2Q10 3Q10 4Q10

57% 13% 15% 5% 10%

Southeast South Northeast Mid-West North

42% 34% 18% 6%

Industry Services Commerce Other

Sectors Breakdown – Middle Market – 4Q10 Geographic Distribution – Middle Market – 4Q10 Middle Market Portfolio – R$ Million Guarantees Breakdown – 4Q10

55.3% 15.1% 5.7% 11.6% 5.3% 7.0%

Receivables Vehicles / Real Estate Agricultural Products Financial Investments Equipments / Foreign goods Other

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Daycred Payroll: INSS and Army continue to drive growth

203 215 301 416 386

4Q09 1Q10 2Q10 3Q10 4Q10 1,052 1,126 1,238 1,383 1,476 4Q09 1Q10 2Q10 3Q10 4Q10

(*) Includes credit assignments in all of the quarters (R$ 167.9 million in 4Q10)

38.1% 32.9% 12.5% 8.1% 5.3% 2.6% 0.5%

INSS Army State Government Law Courts and Legislative Bodies Municipalities Other Private 39.6% 43.0% 8.1% 7.6% 0.4% 1.3%

INSS Army State Government Law Courts and Legislative Bodies Municipalities Private + Other Total Origination – R$ Million Total Loan Portfolio (*) – R$ Million

Total Loan Portfolio (*) – R$ 1,476 mn – 4Q10 - % Total Origination – R$ 386 mn – 4Q10- %

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637 575 524 501 527 4Q09 1Q10 2Q10 3Q10 4Q10

Daycred Auto Loans: reverse contraction in this portfolio

26 28 37 59 72 4Q09 1Q10 2Q10 3Q10 4Q10

Total Loan Portfolio (*) – R$ Million Total Origination – R$ Million Liquidity of Auto Loans Portfolio 4Q10 – R$ Million

Liquidity Receiving Paid Past due more than 90 days Ratio Liquidity Total Loan Loan Portfolio 1,355 1,215 140 10.3% Old Loan 1,249 1,115 134 10.7% New Loan 88 84 4 4.2% (*) Includes credit assignments in all of the quarters (R$ 23.5 million in 4Q10)

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Direct Credit to Consumers (DCC): product that complements the Bank’s

• perations for individuals

Direct Credit to Consumers

Financing of goods and services through partnerships with a number of retailers, such as home furnishings, Appliances, etc. Payment guaranteed by “pre-dated” checks at rates and Terms that are competitive with the market. Partnerships with many shops, seeking to increase sales,

• ffering the end consumer greater purchasing facilities.

Total Loan Portfolio - R$ Million 24.0 25.3 27.1 35.3 42.6 4Q09 1Q10 2Q10 3Q10 4Q10

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Funding (R$ mn) 4Q10 3Q10

• Chg. %

Total Deposits 3,193.9 3,247.9

• 1.7%

Demand Deposits + Other Deposits 204.2 334.0

• 38.9%

Time Deposits 2,790.8 2,885.6

• 3.3%

Interbank Deposits 198.9 28.3 n.a.

Borrowing and Onlending 1,379.7 1,269.8 8.7% Foreign Issuances 664.3 656.0 1.3% Banknotes 3.2 1.0 220.0% Total 5,241.1 5,174.7 1.3%

Funding – R$ Million Breakdown of Funding – R$ Million

44.4 %

Total Deposits Breakdown – R$ 3,193.9 Million

Funding: focus on the diversification of sources of funding and control of costs

39.5% 20.0% 26.5% 7.7% 6.3%

Corporates + Demand Deposits Individuals Investment Funds Institutional Financial Institutions + Interbank Deposits

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5,175 4,310 4,842 3,631

66% 58% 57% 63% 61% 24% 21% 28% 25% 26% 10% 21% 15% 12% 13% 4Q09 1Q10 2Q10 3Q10 4Q10 Total Deposits Borrowing and Onlending Foreign Issuances 1.3%

5,241

Foreign Currency Funding: greater than expected demand with attractive rates Foreign Issuances and Borrowing and Onlending - R$ Million

Eurobond held in January /2011 Issuer Banco Daycoval S.A. Issuer Rating (S&P) BB Positive / (Fitch) BB Stable Issue Denominations US$ 300 million Term January 2016 (5 years) Ranking Status Euro Medium Term Note Programme Yield 6,37% p.a Coupon 6,25% p.a Interest Semi- annual (30/360) Listing Irish Stock Exchange Joint Bookrunners Co-Manager

16

Date of Transaction Maturity Amount (US$ mn)

Eurobond July/2008 July/2011 100 International Finance Corporation (IFC) December/2007 January/13 (due of last tranche) 115 Syndicated Loan (IFC) June/2010 June/14 (due of last tranche) 165 Eurobond March/2010 March/2015 300 Syndicated Loan (IIC) November/2010 November/15 (due of last tranche) 112.5

30% 50% 34% 34% 32% 70% 50% 66% 66% 68% 4Q09 1Q10 2Q10 3Q10 4Q10 Borrowing and Onlending Foreign Issuances

1,249.0 1,804.5 2,066.9 1,925.8 2,044.0

Liquidity: positive gap in duration between credit and funding operations 32.2% 34.5% 25.3% 7.3% 0.7%

Up to 3 months From 3 to 12 months From 1 to 3 years From 3 to 5 years Over 5 years Outstanding Operations (Loan Portfolio) 4Q10 - % Outstanding Operations (Funding) 4Q10 - %

3,9%

17,7% 27,3%

29,5% 20,7%

0.9%

No maturity Up to 3 months From 3 to 12 months From 1 to 3 years From 3 to 5 years Over 5 years Average Term of Loan Portfolio: 407days

Average Term of Funding Portfolio: 515 days

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Profitability Funds Year Assets Under ManagementR$ Million Daycoval Renda Fixa 10.01% 162.11 % CDI 102.31% Multifunds Daycoval Multifunds 9.53% 14.66 % CDI 97.81% Parnamirim 10.44% 322.24 % CDI 107.15% Oasis 11.19% 62.8 % CDI 147.88% Stocks Daycoval Target 5.78% 27.8 % Ibovespa 4.74%

36 91 138 241 238 643 1,158 2004 2005 2006 2007 2008 2009 2010

Assets Under Management – R$ Million

Daycoval Asset Management

Daycoval Asset Management offers a variety of investment funds and differentiated products such as portfolio

• administration. At the present time we have seven open funds and ten closed funds.

Asset ended the year 2010 with a total of funds generated of R$ 1,157.8 million.

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Quality of Loan Portfolio (*): constitution provisions return to historic levels

4Q10 Portfolio R$ mn %

Provision R$ mn Total Provision / Loan (%)

Middle Market 3.713,1 66,4% 106,4 2,9% Payroll 1.308,4 23,4% 31,6 2,4% Auto Loans 339,6 6,1% 29,5 8,7% DCC Retailers + Other 42,6 0,8% 2,3 5,4% Subtotal 5.403,7 96,7% 169,8 3,1% Credit Assignments 191,4 3,3% 1,0 0,5% Total 5.595,1 100,0% 170,8 3,1% Total Loan Portfolio (excludes FIDCs)

5.4% 4.5% 3.4% 3.2% 3.1% 4Q09 1Q10 2Q10 3Q10 4Q10

Total Provisions – 4Q10 Total Provision / Loan Porfolio 4Q10

(*) Unconsolidated

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Establishment of Provision - R$ mn 4Q09 1Q10 2Q10 3Q10 4Q10 2009 2010 Middle Market + Trade Finance (4.1) 17.2 12.2 37.1 14.2 112.4 80.7 Payroll 8.5 7.1 7.5 8.6 7.9 28.6 31.2 Auto Loans 12.0 12.8 9.1 5.8 4.8 96.6 32.5 Direct Credit to Consumers 0.6 0.7 0.7 0.6 0.9 1.9 2.9 Total 17.0 37.8 29.5 52.1 27.8 239.5 147.3

203 176 153 160 170 17 38 30 52 28

4Q09 1Q10 2Q10 3Q10 4Q10

Balance of Provision Establishment of Provision

Balance and Establishment of Provision - R$ Million

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Quality of Loan Portfolio (*)

(*) Unconsolidated

212% 310% 270% 96 52 63

4Q09 3Q10 4Q10

LLP / Past due operations (%) Past due operations

LLP / Past due operations > 60 days 156% 184% 201% 130 87 85

4Q09 3Q10 4Q10

LLP / Past due operations (%) Past due operations

LLP / Past due operations > 14 days

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Quality of Loan Portfolio (*)

(*) Unconsolidated

Recovered Loans - R$ mn 4Q09 3Q10 4Q10 (%) Loan 2009 2010 Total 7.7 6.8 6.2 0.1 28.8 32.2 Write-offs - R$ mn 4Q09 3Q10 4Q10 (%) Loan Total (72.1) (45.5) (17.9) 0.3 Loan D-H - R$ mn 3 T 4Q09 3Q10 4Q10 (%) Loan Middle Market + Trade Finance 146.1 133.1 134.6 3.6 Payroll 30.7 31.9 34.6 2.6 Auto 97.1 54.6 49.0 14.4 DCC 2.0 2.7 3.2 7.5 Total 275.9 222.3 221.4 4.1%

22

Quality of Loan Portfolio (*) recover debts continue in hight level during the 4Q10

(*) Unconsolidated

Efficiency Ratio: remains a low-level, showing a constant effort to make lending

• perations profitable

4Q10 3Q10

• Chg. %

4Q09

• Chg. %

2010 2009

• Chg. %

Personnel Expenses (28.3) (22.7) 24.7% (17.8) 59.0% (94.3) (63.9) 47.6% Outher Administrative Expenses (26.0) (23.0) 13.0% (17.5) 48.6% (84.7) (65.9) 28.5%

Subtotal (54.3) (45.7) 18.8% (35.3) 53.8% (179.0) (129.8) 37.9% Comission Expenses (total retail) (8.4) (7.1) 18.3% (9.3)

• 9.7%

(29.9) (43.6)

• 31.4%

Total (62.7) (52.8) 18.8% (44.6) 40.6% (208.9) (173.4) 20.5% Efficiency Ratio (%) 27.8 20.4 7,4 p.p 22.6 5,2 p.p 24.6 22.5 2.1 p.p Efficiency Ratio (considering Profit Sharing) (%) 32.3 23.3 8,9 p.p 25.8% 6,4 p.p 28.2 24.4 3.8 p.p

22.6 23.2 24.1 20.4 27.8

4Q09 1Q10 2Q10 3Q10 4Q10

Efficiency Ratio %

33.0 22.5 24.6

2008 2009 2010

23

2.1 2.2 2.6 2.9 3.0 4Q09 1Q10 2Q10 3Q10 4Q10 28.6 27.2 22.3 21.2 19.9 4Q09 1Q10 2Q10 3Q10 4Q10

1,692.7 1,723.6 1,668.0 1,735.6 1,777.8

4Q09 1Q10 2Q10 3Q10 4Q10 Shareholders’ Equity – R$ Million Basel Index % Loan Portfolio / Shareholders’ Equity - times

Capital Structure: continuation of low leverage, with a reduction in the Basel index

24

Profitability: Net Profits reached 70.9 million and ROAE was 17.0% during the quarter

21.4 13.6 16.0 21.4 17.0 14.9 12.9 16.0 4Q09 1Q10 2Q10 3Q10 4Q10 2008 2009 2010

Return on Average Equity (ROAE) - % 13.9 11.3 11.7 14.8 12.1 12.3 12.9 11.9

4Q09 1Q10 2Q10 3Q10 4Q10 2008 2009 2010

Net Interest Margin (NIM-A) (1) - %

5.3 3.3 3.2 3.8 3.1 3.3 3.3 3.3

4Q09 1Q10 2Q10 3Q10 4Q10 2008 2009 2010

Return on Average Assets (ROAA) - % Net Income – R$ million

82.5 54.6 64.2 85.0 70.9 237.0 211.1 274.7 4Q09 1Q10 2Q10 3Q10 4Q10 2008 2009 2010

(1) New methodology excluding repurchase agreements – tri-party repos outstanding 25

Peer Analysis – 9M10

26

Shareholders’Equity (R$ Million) 1 Loan Portfolio / Shareholders’Equity – times 1 Basel Index (%) 1

1,948.1 1,735.6 1,312.1 872.7 776.2 432.4 Bic banco Daycoval ABC Pine Sofisa Indusval 21.2 19.9 18.4 18.0 16.9 16.5 Daycoval Indusval Pine Bic banco ABC Sofisa 3.2 3.7 4.0 6.4 6.7 8.1 Daycoval Sofisa Indusval Pine Bic banco ABC

1 Source: Bank’s reports as of September 2010

13,188.5 10,725.7 5,617.1 5,546.2 2,922.5 1,769.1 Bic banco ABC Pine Daycoval Sofisa Indusval Loan Portfolio (R$ Million) 1 Net Income - R$ mn 1

Peer Analysis –9M10

1 Source: Bank’s reports as of September 2010

278,9 203,8 148,2 103,4 61,1 23,0 Bic banco Daycoval ABC Pine Sofisa Indusval

28

Return on Average Assets (ROAA) - %1 Efficiency Ratio - % 1 Return on Average Equity (ROAE) - %1

Peer Analysis – 3Q10

22.9 21.4 18.6 15.8 12.5 Bic banco Daycoval Pine ABC Sofisa 20 31 35 37 39 62 Daycoval Pine Bic banco ABC Sofisa Indusval 3.8 2.7 2.4 2.1 2.1 Daycoval Bic banco Pine ABC Sofisa

14.8 9.9 8.9 8.5 8.4 5.1 Daycoval Bic banco Sofisa Indusval Pine ABC

(2) (2)

Net Interest Margin (NIM) - %1

(2) NIM-A: New methodology excluding repurchase agreements – tri-party repos outstanding

(1) Source: Bank’s reports as of September 2010

Daycoval’s Strengths

Growth capability with reduced costs Low leverage level Access to diversified funding sources Experienced management team compromised with corporate governance Recognized as one of the best Brazilian Middle Market Banks Conservative profile and solid capital structure Strict credit policy

Investor Relations

Phone: +55 (11) 3138.1024/1025/1039 ri@daycoval.com.br

“This report may include estimates and forward-looking statements. These estimates and forward-looking statements are to a large extent based on current expectations and projections about future events and financial trends that affect or may come to affect our business. Many important factors may adversely affect the results of Banco Daycoval as described in our estimates and forward-looking statements. These factors include, but are not limited to, the following: the Brazilian and international economic conjunctures, fiscal, foreign-exchange and monetary policies, higher competition in the middle-market segment, the ability of Banco Daycoval to obtain funding for its operations, and amendments to Central Bank regulations. The words “believe”, “may”, “could”, “seek”, “estimate”, “continued”, “anticipate”, “plan”, “expect” and other similar words have the objective of identifying estimates and

• projections. The considerations involving estimates and forward-looking statements include information related to results and projections, strategies, competitive positioning, the

environment in the industry, growth opportunities, the effects of future regulations, and the impacts from competitors. Said estimates and projections refer only to the date on which they were expressed, and we do not assume any obligation to publicly update or revise any of these estimates arising from the occurrence of new information, future events, or any other factors. In view of the risks and uncertainties described above, the estimates and forward-looking statements contained herein may not materialize. Given these limitations, shareholders and investors should not make any decisions based on the estimates, projections and forward-looking statements contained in this report”.

4Q10 Institutional Presentation

30