The document is Paraná Banco's 2Q07 earnings presentation. It summarizes the bank's financial performance in 2Q07 and 1H07 compared to the prior periods. Key highlights include an increase in origination and credit portfolio growth. Net income grew 99.6% in 2Q07 compared to 2Q06. The bank continued expanding its franchise channel. Credit quality remained high, with 94% of loans rated AA-C. Deposits increased to fund loan growth. The insurer J. Malucelli Seguradora also experienced growth.
2. The Bank's financial statements and consolidated financial statements herein
are presented on a pro forma basis, encompassing the financial statements of
the Bank, its subsidiaries, the Credit Receivables Investment Funds (FIDC) and
insurer J. Malucelli Seguradora.
They were prepared based on the accounting practices pursuant to Brazilian
Corporate Law, and associated with the regulations and instructions issued by
the National Monetary Council (“CMN”), the Brazilian Central Bank (“BACEN”)
and the Brazilian securities and exchange commission Comissão de Valores
Mobiliários ("CVM") (“BR GAAP”).
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3. Summary
Paraná Banco Overview 3
Operational Highlights 4
Origination Evolution 5
Franchise: an innovative sales channel 6
Total Assets and Equity 7
Period Result Composition 8
Financial Highlights 9
Credit Portfolio 10
Credit Portfolio Quality 11
Funding Structure 12
Operating Income and Expenses 13
J. Malucelli Seguradora – Performance 14
Ratings 15
IPO 16
Share Price Evolution 17
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4. Paraná Banco Overview
Niche Bank, specialized in payroll deductible loans
Focus in profitability and a low-risk customer base (civil servants,
private-sector employees and retirement beneficiaries, and pensioners
under the INSS social security system)
Deductible loans agreements with more than 560 state and private
entities
3 sales channels: brokers, call center and franchises
Repurchase of 85% of J. Malucelli Seguradora, coming to 100%
ownership, after SUSEP approval
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5. Operational Highlights
New Origination (R$ mm) Number of Agreements
379.2 564
286.4
399
212.8
157.5
2Q06 2Q07 1H06 1H07 2Q06 2Q07
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6. Origination Evolution (R$ x 1,000)
80,000
70,000
60,000
50,000
40,000
30,000
20,000
10,000
-
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2005 2006 2007
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7. Franchise: an innovative sales channel
Exclusivity and long term agreements
Low initial investment and low operating costs
Initial activities in march 2007
Original target of 30 franchisees at end of 2007
27 franchises in operation today, with 27 more in the pipeline
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8. Total Assets and Equity
Total Assets Shareholders’ Equity
746,582
1,656,882
678,835
192,556
2Q06 2Q07 2Q06 2Q07
Note: the deferred comission adjustment initiated in 2007
resulted in na increase of R$ 25,505 thousand in the
Sahreholders’ Equity and right to dividends of 25% on this
sum.
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9. Period Result Composition (1H07)
(R$ x 1,000)
60000
50000
24,505
40000
30000
12,541
56,341
20000
31,836
10000 19,295
0
Net Income Non-Recurring Net Adjusted Deferred Period Result
IPO expenses Income Comissions
Adjustment
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10. Financial Highlights
Variation Variation
2Q06 2Q07 1H06 1H07
2Q06 x 2Q07 1H06 x 1H07
Net Adjusted Income 21,487 18,392 -14.4% 30,895 31,836 3.0%
Deferred Commission Result 24,505 24,505
Period Result 21,487 42,897 99.6% 30,895 56,341 82.4%
Annualized Return over
57.5% 20.0% 85.4% 30.2%
average Equity (%)
Annualized financial
operations margin da 29.3% 15.5% 26.8% 16.0%
intermediação (%)
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11. Credit Portfolio (R$ x 1,000)
• Total Credit Portfolio, including credit assignments (with and
without recourse to the FDIC’s), grew to R$ 932,5 million in the
2Q07.
932,527
840,740
607,050
53.6%
2Q06 1Q07 2Q07
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16. Ratings
Rating Rating / Ranking Rating / Ranking Rating / Ranking
brBBB+/B+ 9,94 A- A-
Low Credit Risk Low Risk –Medium Term Low Credit Risk Low Credit Risk
June 2007 March 2007 June 2007 June 2007
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17. IPO
IPO in June 14th, 2007
100% primary issue
R$529,2 million total proceedings
Corporate Governance
Adherence to BOVESPA Level 1 corporate governance practices.
Bank intends to migrate to Level 2
All shares issued with 100% Tag-along
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19. IR Contacts
Luis César Miara
CFO and Investor Relations Officer
Maurício N. G. Fanganiello
IR Coordinator
Phone: (55 41) 3351-9907 / 3351-9961
e-mail: ir@paranabanco.com.br
IR Website: www.paranabanco.com.br/ir
“This document may include estimates and forward-looking statements. These estimates and forward-looking statements are to a large extent based on
current expectations and projections about future events and financial trends that affect or may come to affect our business. Many important factors may
adversely affect the results of Paraná Banco as described in our estimates and forward-looking statements. These factors include, but are not limited to, the
following: the Brazilian and international economic conjunctures, fiscal, foreign-exchange and monetary policies, higher competition in the payroll
deductible loan segment, the ability of Paraná Banco obtain funding for its operations, and amendments to Central Bank regulations.
The words “believe”, “may”, “could”, “seek”, “estimate”, “continued”, “anticipate”, “plan”, “expect” and other similar words have the objective of
identifying estimates and projections. The considerations involving estimates and forward-looking statements include information related to results and
projections, strategies, competitive positioning, the environment in the industry, growth opportunities, the effects of future regulations, and the impacts
from competitors. Said estimates and projections refer only to the date on which they were expressed, and we do not assume any obligation to publicly
update or revise any of these estimates arising from the occurrence of new information, future events, or any other factors. In view of the risks and
uncertainties described above, the estimates and forward-looking statements contained herein may not materialize. Given these limitations, shareholders
and investors should not make any decisions based on the estimates, projections and forward-looking statements contained in this report
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