Banco Pine is a publicly-held multiple bank specialising in servicing the corporate segment, especially companies with annual revenues above R$150m. It is a client-focused, relationship-based bank; its strategy is based on a deep understanding of each of its clients, including their histories, businesses and potential.
Through this, the bank builds customised solutions and offers alternatives to suit each client’s profile and expectation.
This strategy requires product diversity, qualified human capital and agility – characteristics that are consistently developed by the bank.
Product diversity
Banco Pine has developed a wide base of products, including several credit and onlending alternatives in domestic and foreign currencies. In addition, the bank has established a solid sales desk for it clients, being able to offer hedging derivatives in FX, interest rates and several commodities. It is also a provider of financial and strategic advisory services, including M&A, and is a niche player in the DCM and syndicated loan markets.
Credit is Banco Pine’s flagship product, and the main entry door for the client to the bank. It has an established track record and expertise in this segment, ensuring market leadership, agility and solidness in the lending business.
The bank has a unique policy of evaluating each transaction diligently and completely. All credit decisions follow a strict credit policy, and need to be approved unanimously by the credit committee.
As part of its business model, the bank has a relatively low number of clients assigned to each origination officer, enabling for a closer credit monitoring and constant and proactive client management. The same is valid in the credit department. Transactions are analysed and monitored by a staff of approximately 16 percent of the bank’s personnel.
PINE has also an efficient loan and collateral formalisation and documentation policy and process, which keeps the credit portfolio robust and with very low default rates.
The loan portfolio is well dispersed across various economic sectors. The bank acts prudently with diversified exposure to each of the sectors.
Sales desk
The main objective of the sales desk is to offer alternatives for clients to hedge against adverse market moves, giving more predictability to a client’s balance sheet.
Banco Pine has important credentials in this business. Most importantly, the expertise acquired over the years qualifies the bank to quickly respond to market conditions, offering adequate hedge products to mitigate gaps in its clients’ balance sheets.
The main areas of business are currency, commodities and interest rates. The main products are traditional derivatives instruments such as non-deliverable forwards (NDFs), options and swaps.
All hedging transactions are executed with clients that already have an active credit relationship with the bank, rated between AA and C. Most of these transactions are short-term, with duration of 120 days. The sales desk keeps no mismatches, since all material market risk is hedged through the BM&FBovespa or directly with counterparties through OTC transactions.
PINE Investimentos
Banco Pine’s investment arm offers unique solutions for its clients in capital markets, asset management and financial advisory. With a highly qualified team that is deeply knowledgeable of the market, this area operates as an advisor and not as counterparty, serving the interests and needs of its clients in a customised manner in line with market demands.
Moreover, one of its goals is to provide personalised, high value-added financial advice, offering resources and alternatives for financial and capital restructuring, which demands complex solutions and long-term relationships in line with client profiles and expectations.
Funding
The bank’s funding sources are highly diversified. It funds in the local market from companies, individuals and institutions, mainly through CDs, Letras Financeiras and other instruments such as LCAs. It also funds through the Brazilian Development Bank for its onlending business.
In the international market, the bank funds through senior and subordinated debt, with foreign banks and investors and trade finance lines from correspondent banks. It also has close relationships with multilateral agencies such as the International Finance Corporation and the Inter-American Investment Corporation, regional agencies like the Inter-American Development Bank, and bilateral agencies such as the German Investment Corporation, the Dutch Development Bank and the US Agency for International Development. As a rule, the bank hedges 100 percent of the currency risk from offshore funding transactions.
A good example of this kind of funding is the syndicated A/B loan contracted on January 21st, 2011. The transaction, which reached $106m, was globally coordinated by the Inter-American Investment Corporation (IIC) in the “A” portion and by three co-leading banks for the “B” portion (Santander, WestLB and Standard Bank), and by two joint lead arranger banks (Bradesco and Banco do Brasil). Demand for the issuance exceeded the initial offer, which was $75m.
The IIC carried out due diligence of the bank and also evaluated its commitment to social and environmental responsibility, as part of the loan approval process.
Asset and liability management
Historically, PINE maintains a conservative policy in relation to its liquidity position. On December 31, 2010, the liquidity position remained at comfortable levels, representing 43 percent of time deposits on that date. PINE also maintains a conservative asset and liability management policy. Accordingly, its funding sources are adequately aligned on terms and costs with the respective assets in the credit portfolio: while the weighted average maturity of the loan portfolio is 15 months, the weighted average maturity of the funding is 18 months.
Human resources
Banco Pine’s mains assets are its employees; it therefore attracts, retains and develops the best talent while maintaining a high-performance work environment focused on results and based on meritocracy. The bank constantly invests in training and qualification of its employees, encouraging deep knowledge of clients and products, which facilitates cross-selling opportunities that bring value to clients and to the bank.
Corporate governance
Banco Pine has active corporate governance policies, given its permanent commitment to shareholders and other stakeholders. The most important differentials of its corporate governance practices are:
– Two independent members and one external member on the board of directors
– 100 percent tag-along rights for all shares, including preferred shares
– Arbitration procedures for rapid settlement of disputes
– Fiscal council
The bank adopts best corporate governance practices, with an internal compliance and auditing structure that assures an operational environment based on the company’s best values.
A well-prepared bank
Today, Banco Pine has the main resources necessary for sustained growth: qualified human capital, comfortable capitalisation and adequate funding. In other words, the bank is ready to continue developing its strategy of providing complete service to corporations, building trust and loyalty on the one hand and profitability on the other.
These resources enable the bank to provide a continually improving service by creating new solutions, generating client captivity and promoting an environment that is propitious for cross-selling. Banco Pine is well prepared to continue growing with quality, capitalising on the momentum of the Brazilian economy.
