Banco Industrial do Brasil is a privately owned Brazilian bank, established in 1994, headquartered in the city of São Paulo, with branches in the main states of the country. It operates essentially as a credit bank focused on the financing of small and medium sized enterprises (SME), offering competitive products to fit the needs of its clients.

With a long history and experience in the SME segment, the bank developed a profitable and sustainable business model based on three pillars: (i) focus and specialisation in credit market niches with high growth potential; (ii) agility in the origination of quality assets; and (iii) strict credit, liquidity and internal control policies.

Established as a multiple bank, Banco Industrial do Brasil is authorised to conduct credit, foreign exchange, and leasing operations, among other business lines, according to the Brazilian regulation.

History
The history of Banco Industrial do Brasil begins with the acquisition of Banco Santista by Carlos Alberto Mansur. Founded in 1988, Banco Santista was the financial arm of Bunge Group and its business model was focused in treasury operations.

After acquisition by Mansur, the bank changed its strategy focusing in SME credit operations, providing working capital, trade finance, foreign exchange and lending operations.

In 2000, Banco Industrial do Brasil began the process of opening new branches, in order to expand its activities. Currently, the Bank has seven branches and three offices providing services to the main economic centers of Brazil.

Focusing on diversifying its funding base, in 2002 the bank established a short term notes program of US$50 million, issuing its first tranche in the same year. In the following years, the bank has also raised funding with multilateral banks, such as DEG (Deutsche Investitions and Entwicklungsgesellschaft MBH), Inter-American Development Bank (IADB) and International Finance Corporation (IFC).

Corporate profile
Banco Industrial do Brasil prioritises the high quality of its loan portfolio, adopting a conservative credit policy. Clients are evaluated according to objective parameters that take into account the financial capacity, the liquidity of the guarantees, punctuality in meeting their obligations and the performance of the receivables portfolio.

The bank seeks to establish a long-term relationship with its customers, ensuring a deep knowledge of their needs and agility to meet their demands, offering a diversified portfolio of products, highly qualified human resources and decision-making oriented technological environment.

All transactions are analyzed by the Credit Committee, comprising of the bank’s executive, and approved only by unanimous decision. The bank has over 90 percent of its loan portfolio covered by guarantees such as receivables and other collaterals, thus contributing for the maintenance of a non-performing loans rate below 2.0 percent of the bank’s total credit portfolio.

The market risk is managed with a high conservative level. Treasury is not a profit centre. Its main function is to assure competitive and proper funding for the bank’s assets, avoiding exposure in currency, tenor and interest rates.

The main characteristics of the bank’s business model is conservatism featuring a low leverage level, strictness in lending and the maintenance of a high-liquidity level.

Credit portfolio
The credit transactions of Banco Industrial do Brasil are oriented to companies with annual revenues between $10m and $300m. The bank has developed a wide base of products, grouped into three categories: working capital, financing and trade finance.

The working capital loans are conducted by the lending of free resources, designed to industrial, commercial and service sectors, in order to meet the cash needs of the clients. They are generally for short and medium term and are guaranteed by receivables, pledge of goods, equipments, and certificates of deposit (CDs). The main products offered for this modality are: guaranteed account, working capital, hot money and discount of receivables.

The financing products consist in lending operations with directed resources, to industrial and commercial enterprises, in order to facilitate the acquisition of machinery, vehicles and other equipment. The main products offered for this modality are: lending from BNDES (Brazilian development bank) and lease sale.

Concerning the trade finance products, the bank conducts import and export financing operations and international remittances for foreign exchange settlement. These products are designed to agribusiness, industrial and commercial sectors and rely on credit lines from international banks and multilateral institutions.

Funding
The funding structure of Banco Industrial do Brasil is well diversified and appropriate to its assets’ profile. The management of the funding portfolio is aimed to prevent terms, interest rates and currency mismatch, and to guarantee the liquidity needed for the institution’s daily operations.

The local market is the main source of funding, which is vastly comprised of asset companies, investment funds, financial institutions, enterprises and individuals. This funding is raised through certificate of deposits.

International funding is structured through the issue of eurobonds and from multilateral institutions. Trade finance operations are financed by correspondent banks. The bank has credit lines with over 30 banks throughout the world. And is also a member of the Trade Finance Facilitation Program from IADB and the Global Trade Finance Program from IFC.

Corporate governance
Banco Industrial do Brasil adopts a solid corporate governance policy, based on sound practices, believing that it contributes for the evolution of its internal structure, improving its decision processes, as well as its internal control system, thus guaranteeing consistency, fairness and disclosure to the information flow.

The bank’s management comprises a Board of Directors and an Executive Board. The independent directors represent two thirds of the Board of Directors members.

The bank has established a Code of Ethical Conduct, applicable to all of its managers and employees, defining the guidelines that must be followed in all of its activities. It reflects the bank’s values, cultural identity and commitment with the markets where it operates and with the communities to with it relates.

The Internal Control System is established by a structured process involving all the bank’s employees, in order to enable secure, adequate and efficient conduction of activities.

Banco Industrial do Brasil also relies on an Anti Money Laundering program, developed in order to prevent that its products and services are used to intermediate illicit resources. Every single employee attends an annual training program.

Risk Management is conducted according to the principles of Basel II, regulated in Brazil by the Brazilian Central Bank. Such structure relies on the indirect participation of all areas of the institution and includes identification, evaluation, monitoring, control, and mitigation of risks, in addition to the requirements established by regulators, when specified.

The Bank’s Management opted to outsource the Internal Auditing, reinforcing its commitment with the independence needed to conduct such activity. In order to do so, the bank has hired a well known global auditing company, which annually defines the internal auditing plan along with the Board of Directors.

Banco Industrial do Brasil provides all information regarding its history, operational profile, and ownership structure on its Investor Relations website; in addition, there are downloadable versions of its financial statements, institutional presentations and rating reports. The Investor Relations website is available in Portuguese and in English.

Growth with solidity
Banco Industrial do Brasil conducts its business model through a client-orientation and relationship-based structure. The capability to anticipate its clients’ needs and the agility to meet them with competitive solutions are the bank’s main differential to maintain its growth throughout the years. Thus, the conservative management policies allied with its appropriate funding structure and comfortable capitalisation and liquidity levels allow the bank to maintain a solid financial position.

For more information: www.bancoindustrial.com.br/ri