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1、Global Emerging Markets Brazil 21 February 2013 BTG Pactual Strong and Stable; Maintain Hold on valuation Maintain Hold based on valuation; Favor the 20s within the curve BTG Pactual (BTG) delivered another solid quarter with robust profitability, adequate liquidity and supportive capitalization. On
2、ce again, the diversification of the banks business lines has paved the way for strong and stable results despite the relatively volatile nature of certain of BTGs activities. While BTGs earnings continue to provide a solid footing for the performance of the banks notes, we believe they are fairly v
3、alued at current levels. We maintain our Hold recommendation, but favor the 20s within the curve Outstanding Issues Issue Maturity Amount O/S Mdy/S favor the 20s within the curve On the whole, BTGs earning results have continued to provide solid footing for the performance of the banks notes. They h
4、ave lost some ground recently in line with the markets, but remain overall fairly valued, in our opinion, on a relative value basis. We have compared BTGPBZ 4.875%16 to senior notes from Santander Brasil, Bradesco, Banco Votorantim, Bancolombia, Aval, Bancomer, Banorte, BBVA Banco Continental (Peru)
5、 and Banco de Credito del Peru. The sub notes from Itau, Bradesco, Banco do Brasil, Bancolombia, Bancomer, Davivienda and Banrisul were the main comparables for our valuation on BTGPBZ 5.75%22. Finally, we compared BTGPBZ 4.0%20 to senior notes from Banco do Brasil, Banco de Credito del Peru, BBVA C
6、ontinental (Peru), Banco Internacional del Peru and Banco Santander Mexico. For investors who would like to have exposure to the credit, we believe BTGPBZ 4.0%20 offers the most value within the curve. In addition, supply of senior notes maturing in 2020 is relatively limited within the banking spac
7、e at this stage increasing the attractiveness of the notes. Downside risks to our recommendation include (but are not limited to): sizeable and unexpected losses since a large portion of BTGs revenues are derived from Sales and Trading and Principal Investments; intense competition in Brazil that co
8、uld erode margins; overall market conditions leading to times of significant stress with a long interruption of the equity and debt capital markets. Upside risks include (but are not limited to): significantly better than expected credit performance; capital measures that do not involve the issuance
9、 of dollar denominated subordinated notes. 21 February 2013 Financials BTG Pactual Deutsche Bank Securities Inc. Page 3 Bond Valuation Figure 1: BTG Sr 16s and peers 3m price evolution Figure 2: BTG Sub notes and peers 3m price evolution 102 104 106 108 110 112 Nov-12 Dec-12 Jan-13 Feb-13 Bradesco 1
10、6Banco Santander Brasil 4.25 16 BTGPBZ 4.875 16AVALCB 5.25 17 BBVASM 4.5 16BCOCPE 5.75 17 98 100 102 104 106 108 110 112 114 Nov-12 Dec-12 Jan-13 Feb-13 BANBRA 5.375 21Banco Itau 5.65 22Bradesco 5.75 22 DAVIVI 5.875 22BANBRA 5.875 22BRSRBZ 7.375 22 BTGPBZ 5.75 22 Source: Deutsche Bank Source: Deutsc
11、he Bank Figure 3: BTG Sr 16s and peers 3m yield evolution Figure 4: BTG Sub notes and peers 3m yield evolution 2.0 2.5 3.0 3.5 4.0 Nov-12 Dec-12 Jan-13 Feb-13 Bradesco 16Banco Santander Brasil 4.25 16 BTGPBZ 4.875 16AVALCB 5.25 17 BBVASM 4.5 16BCOCPE 5.75 17 4 5 6 Nov-12 Dec-12 Jan-13 Feb-13 BANBRA
12、5.375 21Banco Itau 5.65 22Bradesco 5.75 22 DAVIVI 5.875 22BANBRA 5.875 22BRSRBZ 7.375 22 BTGPBZ 5.75 22 Source: Deutsche Bank Source: Deutsche Bank 21 February 2013 Financials BTG Pactual Page 4 Deutsche Bank Securities Inc. Figure 5: BTG Sr 16s and peers 3m spread evolution Figure 6: BTG Sub notes
13、and peers 3m spread evolution 100 150 200 250 300 350 Nov-12 Dec-12 Jan-13 Feb-13 Bradesco 16Banco Santander Brasil 4.25 16 BTGPBZ 4.875 16AVALCB 5.25 17 BBVASM 4.5 16BCOCPE 5.75 17 250 300 350 400 450 500 Nov-12 Dec-12 Jan-13 Feb-13 BANBRA 5.375 21Banco Itau 5.65 22Bradesco 5.75 22 DAVIVI 5.875 22B
14、ANBRA 5.875 22BRSRBZ 7.375 22 BTGPBZ 5.75 22 Source: Deutsche Bank Source: Deutsche Bank Figure 7: BTG Sr 16s and peers Yield v Duration Figure 8: BTG Sub notes and peers Yield v Duration BANVOR 5.25 16 SANBBZ 4.25 16 Bradesco 16 BANBOG 5.0 17 BANCOL 4.25 16 AVALCB 5.25 17 BBVASM 4.5 16 Banorte 4.37
15、5 15 BCOCPE 5.75 17 BCP 4.75 16 BTGPBZ 4.875 16 2 2.2 2.4 2.6 2.8 3 3.2 3.4 3.6 2.22.42.62.833.23.43.6 Yield Duration BANBRA 5.375 21 Banco Itau 5.75 21 Banco Itau 5.65 22 Bradesco 5.75 22 BANCOL 5.125 22 DAVIVI 5.875 22 BBVASM 6.75 22 BANVOR 7.375 20 BANBRA 5.875 22 BRSRBZ 7.375 22 BTGPBZ 5.75 22 4
16、.3 4.5 4.7 4.9 5.1 5.3 5.5 5.7 5.9 6.1 5.35.86.36.87.37.8 Yield Duration Source: Deutsche Bank Source: Deutsche Bank 21 February 2013 Financials BTG Pactual Deutsche Bank Securities Inc. Page 5 Figure 9: BTG 4.00% 20 and peers Yield v Duration BTGPBZ 4.00 20 BSANTM 4.125 22 BINTPE 5.75 20 BCP 5.37 5
17、 20 BANBRA 6.0 20 BCOCPE 5.5 20 3.2 3.4 3.6 3.8 4 4.2 4.4 5.35.86.36.87.37.8 Yield Duration Source: Deutsche Bank 21 February 2013 Financials BTG Pactual Page 6 Deutsche Bank Securities Inc. Financial Summary Figure 10: BTG Pactual adjusted income statement (BRLm) 4Q114Q11 1Q121Q12 2Q122Q12 3Q123Q12
18、 4Q124Q12 LTMLTM qoqqoq yoyyoy Investment banking 46 50 129 148 121 448 -18.2% 163.0% Corporate lending 119 102 140 140 182 564 30.0% 52.9% Sales and trading 214 562 334 407 215 1,518 -47.2% 0.5% Asset management 153 171 178 205 637 1,191 210.7% 316.3% Wealth management 41 37 36 55 74 202 34.5% 80.5
19、% Banco PanAmericano (8) (21) (98) (94) (32) (245) -66.0% 300.0% Principal investments 108 572 687 566 512 2,337 -9.5% 374.1% Interest and other 286 130 232 258 182 802 -29.5% -36.4% Total revenues 959 1,603 1,638 1,685 1,891 6,817 12.2% 97.2% Bonus (172) (333) (280) (335) (222) (1,170) -33.7% 29.1%
20、 Retention expenses 13 (6) - - - (6) NM -100.0% Salaries and benefits (68) (70) (74) (78) (103) (325) 32.1% 51.5% Administrative and other (93) (68) (150) (128) (194) (540) 51.6% 108.6% Goodwill amortization (9) (5) (170) (14) (278) (467) 1885.7 % 2988.9 % Tax charges, other than income tax (51) (50
21、) (58) (63) (71) (242) 12.7% 39.2% Total operating expenses (380) (532) (732) (618) (868) (2,750) 40.5% 128.4% Income before taxes 579 1,071 906 1,067 1,023 4,067 -4.1% 76.7% Income tax and social contribution 475 (284) (83) (275) (170) (812) -38.2% -135.8% Net income 1,054 787 823 792 853 3,255 7.7
22、% -19.1% Source: Deutsche Bank, Company Data 21 February 2013 Financials BTG Pactual Deutsche Bank Securities Inc. Page 7 Figure 11: BTG Pactual summarized balance sheet (BRLm) AssetsAssets 4Q114Q11 1Q121Q12 2Q122Q12 3Q123Q12 4Q124Q12 qoqqoq yoyyoy Cash and bank deposits 546 148 354 742 609 -17.9% 1
23、1.5% Interbank investments 22,579 27,470 28,707 33,160 23,980 -27.7% 6.2% Marketable securities and derivatives 62,037 73,063 78,070 93,291 98,440 5.5% 58.7% Interbank transactions 877 1,067 918 812 475 -41.5% -45.8% Loans 5,041 4,905 5,720 7,234 7,990 10.5% 58.5% Other receivables 19,977 24,841 20,
24、224 22,787 15,185 -33.4% -24.0% Other assets 27 19 24 22 36 63.6% 33.3% Permanent assets 1,405 2,651 2,882 3,268 4,068 24.5% 189.5% Total assets 112,489 134,164 136,899 161,316 150,783 -6.5% 34.0% LiabilitiesLiabilities 4Q114Q11 1Q121Q12 2Q122Q12 3Q123Q12 4Q124Q12 qoqqoq yoyyoy Deposits 14,138 15,08
25、1 16,301 16,306 14,606 -10.4% 3.3% Open market funding 48,977 64,806 60,996 76,114 74,045 -2.7% 51.2% Funds from securities issued and accepted 3,775 4,303 5,012 6,570 8,480 29.1% 124.6% Interbank transactions (liabilities) - 7 33 30 - -100.0% NM Loans and onlendings 1,027 1,518 1,497 1,811 2,191 21
26、.0% 113.3% Derivatives 3,182 4,413 7,536 6,827 8,629 26.4% 171.2% Subordinated liabilities 4,158 4,231 4,486 6,148 6,246 1.6% 50.2% Other liabilities 28,448 30,368 28,559 34,224 22,241 -35.0% -21.8% Deferred income 32 29 55 68 112 64.7% 250.0% Total liabilities 103,737 124,756 124,475 148,098 136,55
27、0 -7.8% 31.6% Shareholders equity 8,540 9,318 12,333 13,125 14,145 7.8% 65.6% Non-controlling interest 212 91 91 91 88 -3.3% -58.5% Total liabilities + shareholders equity 112,489 134,165 136,899 161,314 150,783 -6.5% 34.0% Source: Deutsche Bank, Company Data 21 February 2013 Financials BTG Pactual
28、Page 8 Deutsche Bank Securities Inc. Figure 12: BTG Pactual 4Q12 summary financials (BRLm) Income Statement (BRLm)Income Statement (BRLm)4Q114Q111Q121Q122Q122Q123Q123Q124Q124Q12% qoq% qoq% yoy% yoy2011201120122012% yoy% yoy Net interest incomeNet interest income768.7768.71,343.91,343.9899.4899.41,40
29、0.51,400.51,067.71,067.7-23.8%38.9%2,049.82,049.84,711.54,711.5129.8% Net non-interest income203.9203.9400.2400.2449.7449.7387.3387.3919.7919.7137.4%351.1%1,283.11,283.12,156.92,156.968.1% Operating expense(287.0)(329.4)(267.6)(394.5)(922.5)133.8%221.4%(1,175.5)(1,914.0)62.8% Pre-provision operating
30、 income (PPI)687.01,490.71,239.91,498.51,193.7-20.3%73.7%2,187.55,422.7147.9% Loan impairment provision(1.5)(76.0)(158.3)(105.2)(128.8)22.4%8693.2%(30.0)(468.3)1459.8% Net IncomeNet Income1,052.51,052.5786.1786.1822.1822.1792.9792.9854.4854.47.8%-18.8%1,921.71,921.73,255.63,255.669.4% Balance Sheet
31、(BRLm)Balance Sheet (BRLm)4Q114Q111Q121Q122Q122Q123Q123Q124Q124Q12% qoq% qoq% yoy% yoy2011201120122012% yoy% yoy Cash other political risks including changes to laws and tariffs, and nationalization of assets; and currency exchange risk. Deutsche Bank may engage in securities transactions, on a prop
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