Cc 4Q16_eng

4Q16 Earnings Release

Conference Call

February, 24th 2017

2/15 Investor Relations | 4Q16 |

Highlights

Liquid balance sheet with a cash position of R$1.2 bi, equivalent to 31% of time deposits.

Excess capital, with a BIS ratio of 15.4%, being 15.0% in Tier I Capital.

Loan portfolio coverage ratio of approximately 6% as a result of the significant increase in provisions in the previous periods.

Retraction of approximately 7% in personnel and administrative expenses in the accumulated of 12 months.

Continuous liability management with a diversified portfolio and adequate terms.


7,409 6,859

Sept-15 Dec-15

Total Funding

-7.4%

7,691 6,933

Sept-15 Dec-15

Total Loan Portfolio1

-9.9%

1,181 1,163

Sept-15 Dec-15

Shareholders' Equity

-1.5%

3.5% 3.6%

3Q15 4Q15

ROAE

0.1 p.p

2.9% 3.2%

3Q15 4Q15

NIM Evolution

0.33 p.p.

10 10

3Q15 4Q15

Net Income

Financial Highlights

1 Includes Stand by LCs, Bank Guarantees, Credit Securities to be Received and Securities (bonds, CRIs, eurobonds and fund shares)

R$ million

The main performance indicators were within expectations in the period…

3.2%

2.0%

1.0%

4Q15 3Q16 4Q16

NIM

-220 bps.

-100 bps.

3.4%

1.7%

2015 2016

NIM Evolution

-170 bps

10

-7-9

4Q15 3Q16 4Q16

-190.0%

-37.2%41

-142015 2016

Net Income

-134.9%

3.6%

-2.3%

-3.1%

4Q15 3Q16 4Q16

ROAE

-670 bps.

-80 bps.

3.4%

-1.2%

2015 2016

ROAE

-460 bps

6,9336,238 6,445

Dec-15 Sept-16 Dec-16

Total Loan Portfolio1

3.3%

-7.0%

6,8595,908 5,692


Total Funding

-3.7%

-17.0%

1,163 1,152 1,148


Shareholders' Equity

-0.3%

-1.3%


Revenue Mix

Participations by Business

Evolution of other business lines, such as FICC and Pine Investimentos.

Product and Revenue Diversification

...with contributions from all business lines.

Credit64.4%

FICC22.0%

Pine Investimentos

8.9%

Treasury4.7%

2016

Credit79.1%

FICC14.5%

Pine Investimentos

3.8%

Treasury2.6%

2015


NIM and Efficiency Ratio

NIM

Expenses and Efficiency Ratio

Rigorous cost control.

2321 22

1917

18

60.0%

77.6%

111.1%

-100%

-50%

00%

50%

100%

150%

0

5

10

15

20

25

30

35

40

4Q15 3Q16 4Q16

8985

7467

47.9%

88.2%

-100%

-80%

-60%

-40%

-20%

00%

20%

40%

60%

80%

100%

0

20

40

60

80

100

120

140

2015 2016

PersonnelExpenses

Otheradministrativeexpenses

RecurringEfficiency Ratio(%)

3.2%

2.0%

1.0%

4Q15 3Q16 4Q16

NIM

-220 bps.

-100 bps.

3.4%

1.7%

2015 2016

NIM Evolution

-170 bps


3,282 3,172 3,139 3,275 3,468

794747 659 520

437

2,3732,250

2,122 2,104 2,120

485

438351 339

419

Dec-15 Mar-16 Jun-16 Sept-16 Dec-16

Trade finance: 6.5%

Bank Guarantees: 32.9%

BNDES Onlending : 6.8%

Working Capital: 53.8%

6,6086,271 6,238

6,933

6,445

1 Includes Stand by LC 2 Includes debentures, CRIs, Hedge Fund Shares, Eurobonds, Credit Portfolio acquired from financial institutions with recourse and Individuals

R$ million

Loan Portfolio

The portfolio amounted to R$6.4 billion...

1

2

-7.0%

3.3%


39%36%40%40%39%

6%6%

6%5%5%

9%10%8%9%7%

10%13%14%14%15%

11%10%10%9%9%

12%12%12%14%

12%

13%13%10%9%13%

Dec-16Dec-15Dec-14Dec-13Dec-12

Energy

Real Estate

Agriculture

Sugar and Ethanol

Engineering

Transportationand Logistics

Others

Continuous Loan Portfolio Management

Sectors Rebalance

...with improved sector diversification.

The composition of the portfolio of the 20 largest clients changed by over 20% in the past twelve months;

The share of wallet of the 20 largest clients remained at around 30%, in line with market peers.

Energy13%

Real Estate12%

Agriculture11%

Sugar and Ethanol10%

Engineering9%

Transportation and Logistics

6%Telecom

5%

Foreign Trade4%

Specialized Services

4%

Retail3%

Metallurgy3%

Construction Material

2%

Mining2%

Vehicles and Parts2%

Meatpacking2%

Food Industry1%

Other10%


9.3%

15.1%

13.7%

5.1%

6.1% 5.9%

00%

02%

04%

06%

08%

10%

12%

-01%

01%

03%

05%

07%

09%

11%

13%

15%

17%


D-H Portfolio Coverage of Total Portfolio

80%

193%

426%

50.0%

250.0%

450.0%

650.0%

Coverage of D-H Overdue Portfolio

December 31st, 2016

Contracts Overdue: total amount of the contracts overdue for more than 90 days / Loan Portfolio

excluding Bank Guarantees and Stand-by Letters of Credit.

1D-H Portfolio: D-H Portfolio / Loan Portfolio Res. 2,682 2Coverage of Total Portfolio: Provisions / Loan Portfolio Res. 2,682 3Coverage D-H Overdue Portfolio: Provisions / D-H Overdue Portfolio

Loan Portfolio Quality

86.3% of the loan portfolio is classified between AA-C ratings.

Loan Portfolio Quality – Res. 2,682

Credit Coverage

Non Performing Loans > 90 days (Total Contract)

Collaterals

1 2 3

Products Pledge

37%

Receivables14%

Properties Pledge

46%

Investments3%

1.1%

2.1%1.8%

1.2%1.7%

0.7%1.3% 1.5%

0.6%

Dec-14 Mar-15 Jun-15 Sept-15 Dec-15 Mar-16 Jun-16 Sept-16 Dec-16

AA-A22.6%

B23.5%

C40.2%D-E

7.8%

F-H5.8%


December 31st, 2016

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$ million

FICC

Solid trackrecord.

Client Notional Derivatives by Market

Market Segments

Notional Value and MtM

Portfolio Profile

Scenario on December 31st, 2016:

Duration: 151 days

Mark-to-Market: R$103 million

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

Stressed MtM : R$119 million

4,941 4,845 2,968 3,833 3,979

479398

212166

103

160

(171 )

315

164 119


Notional Amount

MtM

Stressed MtM

Commodities17%

Fixed Income9%

Currencies74%


R$ million

Pine Investimentos

Fee Generation

Selected Transactions

Capital Markets: Structuring and Distribution of Fixed

Income Transactions.

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

and hybrid capital transactions.

Research: Macro and Commodities.

4

6

3Q16 4Q16

12

16

2015 2016September, 2016

Structure CreditFacility

R$ 10,000,000

Lead Coordinator

September, 2016

Mortage Backed Securities

R$ 10,000,000

Lead Coordinator

September, 2016

Bond

R$ 469,000,000

October, 2016

NCE

R$ 30,000,000

Coordinator

October, 2016


R$ 50,000,000

Lead Coordinator

November, 2016

Promissory Note

R$ 20,000,000

November, 2016

CRI

R$ 47,400,000

Lead Coordinator

December, 2016


R$ 8,500,000

Lead Coordinator

December, 2016

CRI

R$ 50,000,000

Lead Coordinator


R$ million

Funding

Diversified sources of funding...

53% 52% 50% 53% 31% Cash over Deposits

841 787 648 617 460

324 348261 376

384

1,570 1,662 1,939

2,600 2,980

336 218 156

13346

18 17 19

2917

806 759 668

530 454295 284 296

198 213751 761 734

259 247

279244

216 206 204

1,029777

680 665 416

113

6139 33

33

497

352

270 262239

6,859

6,270

5,925 5,9085,692


Trade Finance: 4.2%

Private Placements: 0.6%

Multilateral Lines: 7.3%

International Capital Markets:3.6%

Financial Letter : 4.3%

Local Capital Markets: 3.7%

Onlending: 8%

Demand Deposits: 0.3%

Interbank Time Deposits: 0.8%

High Net Worth Individual TimeDeposits: 52.4%

Corporate Time Deposits: 6.7%

Institutional Time Deposits:8.1%


45% 48% 51%64% 68%

55% 52% 49%36% 32%


Total Deposits Others

Leverage: Expanded Loan Portfolio / Shareholders’ Equity

Expanded Loan Portfolio excluding Bank Guarantees and Stand-by Letters of Credit /

Shareholders’ Equity

Credit over Funding ratio: Loan Portfolio excluding Bank Guarantees and Stand-by Letters of

Credit / Total Funding

Asset & Liability Management

... matching assets’ and liabilities’ duration.

Leverage Credit over Funding Ratio

Total Deposits over Total Funding R$ million R$ billion

5,692 6,270 5,925 5,908 6,859

Asset and Liability Management (ALM)

66%69% 70% 70%

76%


6.0x5.6x 5.4x 5.4x 5.6x

3.9x 3.7x 3.6x 3.6x 3.8x

-

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

10.0 0


Expanded loan Porfolio

Loan Portfolio excludingBank Guarantees

1.1

0.7

5.0

0.00.7

0.6

Assets

0.1

0.4

3.8

2.7

0.40.7

Liabilities

8.2 8.2

Coverage of 131%

Cash and cash equivalents

Assets financed through REPOs

Other assets

Credit Portfolio

Trading portfolio assets

Illiquid assets

Secured funding

Other liabilities

Unsecured funding

Demand deposits

Equity

REPO Financing


Capital Adequacy Ratio (BIS), Basel III

BIS ratio of 15.4%, being 15.0% in Tier I Capital.

14.1% 14.7% 15.4% 15.3% 15.0%

0.9% 0.4%0.5% 0.5% 0.4%


Tier II Tier IMinimum Regulatory Capital (10.5%)

15.0% 15.1%15.9% 15.8% 15.4%


Guidance 2017

GDP (E) 2017: 0.5%

2017

Expanded Loan Portfolio 10% to 15%

NIM 2% to 3%

Personnel and Administratve Expenses 0% to 5%


This report may contain forward-looking statements concerning the business prospects, projections of operating and financial results and growth outlook of PINE. These are merely projections and as such

are based solely on management’s expectations regarding the future of the business. These statements depend substantially on market conditions, the performance of the sector and the Brazilian economy

(political and economic changes, volatility in interest and exchange rates, technological changes, inflation, financial disintermediation, competitive pressures on products and prices and changes in tax

legislation) and therefore are subject to change without prior notice.

Norberto Zaiet Junior

CEO

João Brito

CFO

Raquel Varela Bastos

Head of Investor Relations, Local Funding and Communication

Luiz Maximo

Investor Relations Coordinator

Kianne Paganini

Investor Relations Analyst

Phone: (55 11) 3372-5343

ir.pine.com

[email protected]

Investor Relations