2Q14 Institutional Presentation

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  • Institutional PresentationInstitutional Presentation 2Q14

  • Profile and History

    Pine

    History

    Business Strategy

    Competitive Landscape

    Focus Always on the Client

    Corporate Credit

    FICC

    Pine Investimentos

    Summary

    2/31Investor Relations | 2Q14 |

    Pine Investimentos

    Rating Upgrades

    Highlights and Results

    Corporate Governance and PINE4

    Organizational Structure

    Corporate Governance

    Committees

    PINE4

    Social Investment and Responsibility

  • Profile and History

  • PineSpecialized in providing financial solutions for large clients

    Credit Portfolio by Annual Client Revenues

    June 30th, 2014

    Over R$2 billion44%

    R$500 million to R$2 billion

    R$250million to R$500 million

    12%

    Up to R$250 million

    6%

    4/31Investor Relations | 2Q14 |

    Profile

    Focused on establishing long-term relationships

    Profound knowledge and product penetration

    Business is structured along three primary business lines:

    Corporate Credit: credit and financing products FICC: instruments for hedging and risk

    management

    Pine Investimentos: Capital Markets, FinancialAdvisory, Project & Structured Finance andResearch

    R$2 billion38%

  • 801 827 825

    867

    1,015

    1,220 1,272 1,270

    ...with extensive knowledge of Brazils corporate credit cycle.

    History

    1939Pinheiro Family

    foundsBanco Central do

    Nordeste

    1975Noberto Pinheiro becomes one of

    End of 2007Focus on expanding the Corporate Banking franchise

    Discontinuation of the payroll-deductible loan business

    May, 2007Creation of Pine Investimentos products line and

    opening of the Cayman branch

    2005Noberto Pinheiro becomes Pines sole

    shareholder

    October, 2007Beginning of the FICC Business

    October, 2011Subscription of Pines capital by DEG

    August, 2012 Subscription of Pines capital by DEG, Proparco, Controlling Shareholder and Management

    November, 2012Opening of the broker dealer in New York, Pine Securities USA LLC

    5/31Investor Relations | 2Q14 |

    155 184 222 341 521 620 755 663 761 1,214

    2,854 3,108

    4,195

    5,763

    6,963

    7,911

    9,920 10,032

    18 62

    121 126 140 136 152 171

    209

    335

    Dec-

    97

    Dec-

    98

    Dec-

    99

    Dec-

    00

    Dec-

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    Dec-

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    Dec-

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    Jun-1

    4

    Corporate Credit Portfolio (R$ Million)

    Shareholders' Equity (R$ Million)

    1997Noberto and Nelson Pinheiro sell their stake in BMC and

    found Pine

    becomes one of BMCs controlling

    shareholders

    Devaluationof the real

    Nasdaq Sept. 11 Brazilian Elections

    (Lula)

    SubprimeAsian Crisis

    Russian Crisis

    European Community

    shareholder

    March, 2007

    IPO

    May, 2014

    17 years

  • Business Strategy

  • Competitive LandscapePine serves a niche market of companies with few options for banks.

    100% Corporate

    Large Multi-Services banks

    Market

    Consolidation of the banking sector has decreasedthe supply of credit lines and financial instrumentsfor corporate

    Foreign banks are in a deleveraging process

    PINE

    Full service Bank Credit, Hedging, and Investment

    7/31Investor Relations | 2Q14 |

    100% focused on providing complete service to companies, offering customized products

    Corporate & SME

    SME & Retail

    Retail

    Full service Bank Credit, Hedging, and InvestmentBank products with room for growth

    ~10 clients per officer

    Competitive Advantages:

    Focus

    Fast response: Strong relationship withclients, with the credit committee meetingtwice a week and response times to clients ofno more than one week

    Specialized services

    Tailor-made solutions

    Product diversity

    Foreign and Investment Banks

  • Focus Always on the ClientStrategy of product diversity, tailored to meet the needs of each individual client.

    Working Capit

    CDIs

    OverdraftAccounts

    Fixed Income

    Currencies

    Commodities

    Equities

    CDBs

    CDs

    RDBs

    LCAs

    LCIs

    DebenturesCRIs

    CCBs

    Eurobonds

    PrivatePlacements

    Financial Letters

    TreasuryDistribution

    Capital Markets

    Financial Advisory

    Local Currency

    Foreign Currency

    Pricing of Assets and Liabilities

    LiquidityManagement

    Trading

    Local Currency

    Working CapitalUnderwriting

    8/31Investor Relations | 2Q14 |

    BankGuarantees

    Exclusive Funds

    Portfolio Management

    Swap NDFsStructured Swaps

    BNDES Onlending

    Bank Guarantees

    Compror

    ACC/ACE

    Export Finance

    Finimp

    Lettersof Credit

    2,770 onlending

    Accounts

    Syndicated andStructured Loans

    ClientsCorporate

    Credit

    FICC

    PineInvestimentos

    Capital Markets

    Financial Advisory

    Fixed Income Currencies

    Commodities

    Local Currency

    Onlending

    Foreign Currency

    Trade FinanceParticipation

    Funds

    Options

    Corporate & Structured

    Finance

    M&A

    Project Finance

    StructuredFinance

    Private Credit Funds

    Real Estate Funds

    Rural Credits

    AircraftFinancing

    Investment Management

    In addition to the

    headquarters located in the

    city of So Paulo, Pine has 11

    branches throughout Brazil, in

    the States of Cear, Mato

    Grosso, Minas Gerais, Paran,

    Pernambuco, Rio de Janeiro,

    Rio Grande do Sul, and

    So Paulo. The origination

    network Also counts with a

    Cayman Branch and a broker

    dealer in New York (USA).

  • Corporate Credit

    Actions Credit Committee

    Strong track record and solid credit origination and approval process.

    Meets twice a week reviewing 20 proposals on average

    Minimum quorum: 4 members - attendance of CEO orChairman is mandatory

    Members:

    Chairman of the Board

    CEO

    Chief Operating Officer

    Chief Administrative Officer

    Chief Risk Officer

    Personalized and agile service, working closely withclients and keeping a low client to account officer ratio:each officer handles ~10 economic groups

    Geographic coverage of clients, providing the bank withlocal and extremely up-to-date credit intelligence andinformation

    Established long term relationships with more than 600economic groups

    Origination network is comprised of 11 branches dividedinto 14 origination platforms in Brazils major economiccenters

    9/31Investor Relations | 2Q14 |

    Credit Approval: Electronic Process

    Origination OfficersOrigination Officers

    Credit origination Credit analysis, visit to clients, data updates, interaction with internal

    research team

    Credit AnalystsCredit AnalystsRegional Heads of

    Origination and Credit Analysis

    Regional Heads of Origination and Credit

    Analysis

    Presentation to the Credit Committee

    CRO, Executive Directors and Analysts

    of Credit

    CRO, Executive Directors and Analysts

    of Credit

    Centralized and unanimous decision making process

    CREDIT COMMITTEE CREDIT COMMITTEE

    Chief Risk Officer

    Participants:

    FICC Executive Director

    Credit Analysts

    Other members of the Corporate Banking origination team

    centers

    More than 30 credit analysts, assuring that analysis isfundamentally driven and based on industry-specificintelligence

    Efficient loan and collateral processes, documentation,and controls, which has resulted in a low NPL track record

    Discussion on sizing, collateral, structure etc.

  • Commodities

    Fixed Income4%

    Currencies90%

    5,891 11,090 11,148 11,268 14,382

    248

    530

    327

    482

    354

    298

    (195)(310)

    (243)

    (532)

    Notional value

    MtM

    Stressed MtM

    June 30th, 2014 R$ million

    FICCProven trackrecord: 2nd in commodity derivatives1.

    Client Notional Derivatives by Market Notional Value and MtM

    10/31Investor Relations | 2Q14 |

    Commodities6%

    Jun-13 Sept-13 Dec-13 Mar-14 Jun-14

    Market Segments Portfolio Profile

    1Source: Cetip Report, June 2014

    Scenario on June, 30:

    Duration: 149 days

    Mark-to-Market : R$354 million

    Stress Scenario (Dollar: +31% and Commodities Prices: -30%):

    Stressed MtM: (R$532 million)

    Fixed Income: Fixed, Floating, Inflation, Libor

    Currencies: Dollar, Euro, Yen, Pound, Canadian Dollar,Australian Dollar

    Commodities: Sugar, Soybean (Grain, Meal and Oil), Corn,Cotton, Metals, Energy

  • R$300,000,000

    January, 2014

    Coordinator

    Pine Investimentos

    Selected Transactions

    Consolidation, result of the focused effort through the years despite the capital market cycles.

    Promissory Note

    R$300,000,000

    February, 2014

    Debentures

    Coordinator

    R$25,000,000

    May, 2014

    Debentures

    Coordinator

    Capital Markets: Structuring and Distribution of Fixed

    Income Transactions.

    Financial Advisory: Project & Structured Finance, M&A,

    and hybrid capital transactions.

    Research: Macro, Commodities, and Corporate.

    1