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2Q10 Presentation

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Paraná Banco
Paraná Banco

The document provides financial information for Paraná Banco and its subsidiaries for 2Q10. Key highlights include: - Consolidated net income was R$31.8 million, up 42.4% from 1Q10, with total assets of R$2,955.2 million, up 18% from 2Q09. - The loan portfolio was R$1,431.4 million, a 7% increase from 1Q10, with 94.9% of the portfolio rated AA to C. - The insurance subsidiaries reported strong results, with the insurer reporting net income of R$12.5 million and the reinsurer R$3.8 million.

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2Q10
Disclaimer All financial information presented herein is consolidated, including the Bank´s financial statements, its subsidiaries, the insurers JMALUCELLI Seguradora, JMALUCELLI Seguradora de Crédito (pending SUSEP`s approval) the reinsurer JMALUCELLI Re JMALUCELLI Agenciamento SUSEP s approval), Re., and Paraná Administradora de Consórcio. All information, except when otherwise indicated, is presented in the Brazilian currency (in Reais) and was prepared based on the accounting practices g p pursuant to the Brazilian Corporate Law, associated with the regulations and instructions issued by the National Monetary Council (“CMN”), the Brazilian Central Bank (“BACEN”), the Brazilian Securities and Exchange Commission ("CVM"), the National Council of Private Insurance (“CNSP”), the Brazilian Private Insurance Authority (“SUSEP”) and the Accounting Standards Committee (“CPC”), whenever applicable. ( CPC ), Information contained herein regarding future events is exposed to risks and uncertainties and is subject to change, resulting from, among other factors: market behavior, Brazil’s economical and political situation, and changes i l i l i and regulations. I f li i l i i d h in legislation d l i Information presented h i i i d herein is entirely based on the expectations of the Bank’s Administration regarding its future performance, and does not constitute a guarantee of performance. 2
Qualidade da Carteira de Crédito 4T09 x 4T09 x R$ 4T09 3T09 4T08 3T09 4T08 Main PDD Carteira (> 90 dias) Carteira (> 180 dias) Highlights g g Carteira Total* (a) Índice de cobertura da carteira (PDD / > 90 dias) Índice de cobertura da carteira (PDD / > 180 dias) 2Q10 70.649 70 649 74.725 46.820 1.398.582 94,5% 94 5% 150,9% 62.331 62 331 67.023 38.475 1.347.703 93,0% 93 0% 162,0% 13,3% 13 3% 11,5% 21,7% 1,5 3,8% 1 5 p.p. (11,1 p.p.) 51.469 51 469 56.151 30.420 1.330.658 91,7% 91 7% 169,2% 37,3% 37 3% 33,1% 53,9% 5,1% 2,9 2 9 p.p. (18,3 p.p.) PDD / Carteira Total 5,1% 4,6% 0,5 p.p. 3,9% 1,2 p.p. (b) Créditos Baixados a Prejuízo              8.754            13.250 (33,9%)              7.856 11,4% (b/a) Nível d Ní l de perda d 0,6% 0 6% 1,0% 1 0% (0,4 (0 4 p.p.) ) 0,6% 0 6% 0,0 0 0 p.p. * Inclui saldo da cessão com coobrigação. Inadimplência Paraná Banco Consignado (>90 dias) = 5,9% PME (>90 dias) = 0,8% Inadimplência SFN PF (>90 dias) = 7,8% PJ (>90 dias) = 3,8% 3
Consolidated Net Income: Total Deposits: R$ 31.8 million R$ 1,173.8 million 42.4% x 1Q10 10.5% x 1Q10 Total A T t l Assets: t Profitability: P fit bilit R$ 2,955.2 million ROAE of 16.9% 18.0% x 2Q09 ROAA of 4.4% NIM of 12.0% Loan Portfolio: Portfolio from AA to C: R$ 1,431.4 million 94.9% of Paraná Banco’s 7.0% x 1Q10 portfolio. 4
Insurance Group Net Income - Insurer: Net Income - Reinsurer: R$ 12.5 million in 2Q10 R$ 3.8 million in 2Q10 ROAE of 46.3% ROAE of 17.4% 81.2% x 1Q10 32.1% x 1Q10 Insurance business share: I b i h Market h M k t share: 52.4% of JM Seguradora: 32.4% Net income JM Re: 30.1% Combined Ratio Retained Premiums JM Seguradora: JM Seguradora + JM Re: 45.6% R$ 139.8 million 22.8 p.p. 22 8 p p x 1Q10 36.7% x 1Q10 5
Financial Performance 15.9% 12.9% 12.0% 15.0% 250000 14.4% 12.6% 10.0% 10 0% 200000 5.0% 150000 0.0% 100000 189,479  189 479 163,923  83,962  90,574  98,905  50000 ‐5.0% ‐10.0%0 (30,986) (41,098) (41 098) (48,881) (48 881) (67,944) ‐50000 (89,979) ‐15.0% ‐100000 ‐20.0% ‐150000 ‐25.0% 2Q09 1Q10 2Q10 1H09 1S09 1H10 1S10 Income from Financial Operations Net Interest Margin NIM Margin- Expenses from Financial Operations 2Q10 x 2Q10 x 1H10 x R$ thousand 2Q10 1Q10 1Q10 2Q09 2Q09 1H10 1H09 1H09 Income from Financial Operations 98,905 90,574 9.2% 83,962 17.8% 189,479 163,923 15.6% 6
Financial Performance Adjusted Net Income (R$ thousand) 6.1% 6 1% 54,666 -1.3% 51,542 29.4% 31,249 31 249 30,838 23,828 49.1% 42.8% 4 1% 54.1% 35.1% 42.7% 2Q09 1Q10 2Q10 1H09 1H10 Participation of insurance sector ROAA ROAE 17.9% 16.9% 5.8% 15.3% 4.3% 4.4% 11.7% 10.9% 3.3% 3.1% 2Q09 3Q09 4Q09 1Q10 2Q10 2Q09 3Q09 4Q09 1Q10 2Q10 7
Loan Portfolio Quality Loan Portfolio (R$ million) 5.2% 4.8% 4.7% Storeowner  4.6% 4.3% Consumer  Others Credit 1.7% 4.0% 1.7% 3.4% SME 3.0% 12.3% 2.9% 2.8% 2.7% 2.4% 2 4% Payroll‐ Deductible  Loan 84.3% 1,105.8  1,158.2  1,205.3  1,297.0  1,338.2  1,431.4  - 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 FIDC I and II Loan O L Operations ti Level H/L L l H/Loan P tf li Portfolio Allowance for Doubtful Accounts (PDD)/Loan Portfolio 8
Loan Portfolio Quality 2Q10 x 2Q10 x R$ 2Q10 1Q10 1Q10 2Q09 2Q09 Allowance for Doubtful Accounts (PDD) 58,805 58 805 60,520 60 520 (2.8%) (2 8%) 56,562 56 562 4.0% 4 0% Portfolio overdue (> 60 days) 67,595 69,314 (2.5%) 63,021 7.3% Portfolio overdue (> 90 days) 54,251 56,601 (4.2%) 49,732 9.1% Total Portfolio* (a) 1,483,493 1,413,329 5.0% 1,339,040 10.8% Portfolio Coverage Index (PDD / > 60 days) 87.0% 87.3% (0.3 p.p.) 89.8% -2.8 p.p. Portfolio Coverage Index (PDD / > 90 days) 108.4% 106.9% 1.5 p.p. 113.7% (5.3 p.p.) Allowance for Doubtful Accounts (PDD) / Total Portfolio 4.0% 4.3% (0.3 p.p.) 4.2% (0.3 p.p.) (b) Written-off credits          10,530          20,383 , , (48.3%)            7,441 , 41.5% (b/a) Loss rate 0.7% 1.4% (0.7 p.p.) 0.6% 0.2 p.p. * Includes balance of assignment with co-obligation. Delinquency rate - Paraná Banco Payroll deductible (>90 days) = 4.4% Small and Mid Enterprises (>90 days) = 0.5% Delinquency rate - Brazilian Financial System (“SFN”) Individuals (>90 days) = 6.6% 6 6% Corporations (>90 days) = 3.6% 9
Payroll‐Deductible Loan Performance Payroll-Deductible Loan Origination Payroll-Deductible Loan Origination (R$ million) 3.3% 0.8% 3 3% 0 8% 340.4  States Municipalities 233.6  19.3% 202.9  44.6% INSS 182.8  161.2  Federal Entities Others 32.0% 2Q09 3Q09 4Q09 1Q10 2Q10 Payroll-Deductible Portfolio Payroll-Deductible Loan Quality of the Payroll-Deductible Loan Portfolio (R$ million) (R$ million) 2.7% 2.6% 6.5% AA - C 1,206 D-G 1,132 1,091 H 1,071 1,046 94.7% 2Q09 3Q09 4Q09 1Q10 2Q10 10
Small and Medium‐Sized  Enterprises ‐ SME p Quality of the SME Portfolio Sector Distribution- SME 0.9% 0.3% AA - C Services D-G 7.9% H 8.6% 8 6% Commerce 83.6% Industry 98.8% SME Portfolio (R$ million) 9.9% 177 161 130 117 99 2Q09 3Q09 4Q09 1Q10 2Q10 11
Distribution PAYROLL-DEDUCTIBLE Small and Medium-Sized Enterprises - SME p 7 PLATFORMS •CURITIBA/PR •SÃO PAULO/SP 86 FRANCHISES 11 OWN STORES •PONTA GROSSA/PR •MARINGÁ/PR Á •LONDRINA/PR •JOINVILLE/SC 427 BRANCHES •FLORIANÓPOLIS/SC FLORIANÓPOLIS/SC 12
Operational Performance 2Q10 x 2Q10 x (R$ 000) 2Q10 1Q10 2Q09 1Q10 2Q09 Loan Portfolio 1,431,391 1,338,195 7.0% 1,158,182 23.6% Total Deposits 1,173,773 1,062,649 10.5% 785,231 49.5% Time Deposits 1,026,501 935,334 9.7% 735,891 39.5% Loan Portfolio – Operations Falling Due Funding – Operations Falling Due 8.8% 8 8% 13.4% 23.8% Up to 3 months 27.2% Up to 3 months Between 3 and 12 months Between 3 and 12 months Between 1 and 3 years 42.6% Between 1 and 3 years 36.9% 25.9% Above 3 years 21.3% Above 3 years Matching of terms: 49.7% of the portfolio and 48 6% of the funding maturing within 1 year 49 7% 48.6% 13
Funding Funding Sources Deposits breakdown (R$ million) Institutional investors 1,173.8  1,173.8 Related parties p 36.5% 36 5% 39.5% Individuals 244.3 53.3 3 7% 3.7% Corporate investors 2006 2007 2008 2009 1Q10 2Q10 20.2% MTN Loans Assigment Deposits Medium Term Notes - MTN Tranche Granting Date Maturity Coupon (p.a.) Hedge (US$ thousand) 100,000 December/2009 December/2012 7.375% 100% 35,000 35 000 August/2008 A g st/2008 August/2011 A g st/2011 7.750% 7 750% 100% + interest rate 14
Capital Structure Equity Changes (R$ thousand) 2Q10 1Q10 Initial Balance 805,585 788,576 Net Income 31,836 22,360 Interest on Equity (13,145) (5,506) Treasury shares (27,892) - Adjustment to market value - Marketable securities 149 (51) Others - 206 Final Balance 796,533 805,585 Basel Index Portfolio / Shareholder's Equity 1.80 1.64 1 64 1.66 1 66 39.5% 38.9% 1.44 1.49 37.4% 36.0% 33.9% 2Q09 3Q09 4Q09 1Q10 2Q10 2Q09 3Q09 4Q09 1Q10 2Q10 15
Qualidade da Carteira de Crédito 4T09 x 4T09 x R$ 4T09 3T09 4T08 3T09 4T08 Insurance I PDD Carteira (> 90 dias) Carteira (> 180 dias) Carteira Total* (a) Índice de cobertura da carteira (PDD / > 90 dias) Índice de cobertura da carteira (PDD / > 180 dias) 2Q10 70.649 70 649 74.725 46.820 1.398.582 94,5% 94 5% 150,9% 62.331 62 331 67.023 38.475 1.347.703 93,0% 93 0% 162,0% 13,3% 13 3% 11,5% 21,7% 1,5 3,8% 1 5 p.p. (11,1 p.p.) 51.469 51 469 56.151 30.420 1.330.658 91,7% 91 7% 169,2% 37,3% 37 3% 33,1% 53,9% 5,1% 2,9 2 9 p.p. (18,3 p.p.) PDD / Carteira Total 5,1% 4,6% 0,5 p.p. 3,9% 1,2 p.p. (b) Créditos Baixados a Prejuízo              8.754            13.250 (33,9%)              7.856 11,4% (b/a) Nível d Ní l de perda d 0,6% 0 6% 1,0% 1 0% (0,4 (0 4 p.p.) ) 0,6% 0 6% 0,0 0 0 p.p. * Inclui saldo da cessão com coobrigação. Inadimplência Paraná Banco Consignado (>90 dias) = 5,9% PME (>90 dias) = 0,8% Inadimplência SFN PF (>90 dias) = 7,8% PJ (>90 dias) = 3,8% 16
Potential new business PROINFA PAC TRANSPETRO MCMV PRE‐SALT R$ 10.4 billion R$ 504 billion R$ 15.6 billion R$ 190 billion R$ 34 billion $ 4 years 4 years 6 years 3 years BELO MONTE WORLD CUP OLYMPICS  TRAIN RJ – SP R$ 19 billion R$ 17 billion R$ 30 billion R$ 35 billion 9 years 4 years 6 years 6 years 17
Market Share Market share - direct premiums Market Share - reinsurance premiums (R$ thousand) Financial risk category 703,109 0.1% IRB BRASIL RESSEGUROS 4.6% 8.5% 499,334 JMALUCELLI RESSEGURADORA 346,089 331,632 MAPFRE RE DO BRASIL 187,768 192,364 30.1% 56.7% 167,452 MUNCHENER RUCK DO BRASIL RE 29.2% 37.0% 42.3% 50.4% 43.0% 32.2% 32.4% XL RESSEGUROS BRASIL 2004 2005 2006 2007 2008 2009 Jun-10 JMalucelli Seguradora Market JMalucelli Seguradora: market leader, profitable operation, low claims ratio, quick credit analysis, selected clients and attracti e to reins rers attractive reinsurers. Outlier: R$ 124.7 million for the Madeira River hydroelectric power plant project. JMalucelli Resseguradora: 30.1% market share in the financial risk group 30 1% group. 18
Financial Performance JMalucelli Seguradora JMalucelli Resseguradora 46.3% 29.5% 26.1% 23.3% 12,492 12 492 17.4% 17 4% 13.5% 6,217 6,895 4,319 3,811 2,885 2Q09 1Q10 2Q10 2Q09 1Q10 2Q10 Net Income (R$ thousand) ROAE 19
Operational Performance (Insurance) Claim Ratio (Retained Claim/ Retained Premium) 70% 60% 50% 40% 30% 20% 10% 11.2% 0% 1.1% -10% 2006 2007 2008 2009 Jun-10 JMalucelli Seguradora Market JM Seguradora has a specialized claim department that mediates and regulates all notifications received from customers. The basic principle is legal defense of the involved parties and plenty of opportunities for discussion on the issues in question. 20
UHE Belo Monte BID BOND PERFORMANCE BOND Apr/2010 Aug/2010 Insurer Insurer UBF  Fator  A B Seguros Seguradora RIOD RIOD JMalucelli  JMalucelli -DAY PER 9-YEAR PER JMalucelli  Seguradora Seguradora 154- Amount  Amount  insured:  insured:  R$ 191.0 million R$ 1.05 billion Premium:  R$ 500,000  Construction companies:  Contract signing Contract signing Project execution Project execution Winning bidders 21
Qualidade da Carteira de Crédito 4T09 x 4T09 x R$ 4T09 3T09 4T08 Corporate  Corporate 3T09 4T08 PDD Carteira (> 90 dias) Governance Carteira (> 180 dias) Carteira Total* (a) Índice de cobertura da carteira (PDD / > 90 dias) Índice de cobertura da carteira (PDD / > 180 dias) 2Q10 70.649 70 649 74.725 46.820 1.398.582 94,5% 94 5% 150,9% 62.331 62 331 67.023 38.475 1.347.703 93,0% 93 0% 162,0% 13,3% 13 3% 11,5% 21,7% 1,5 3,8% 1 5 p.p. (11,1 p.p.) 51.469 51 469 56.151 30.420 1.330.658 91,7% 91 7% 169,2% 37,3% 37 3% 33,1% 53,9% 5,1% 2,9 2 9 p.p. (18,3 p.p.) PDD / Carteira Total 5,1% 4,6% 0,5 p.p. 3,9% 1,2 p.p. (b) Créditos Baixados a Prejuízo              8.754            13.250 (33,9%)              7.856 11,4% (b/a) Nível d Ní l de perda d 0,6% 0 6% 1,0% 1 0% (0,4 (0 4 p.p.) ) 0,6% 0 6% 0,0 0 0 p.p. * Inclui saldo da cessão com coobrigação. Inadimplência Paraná Banco Consignado (>90 dias) = 5,9% PME (>90 dias) = 0,8% Inadimplência SFN PF (>90 dias) = 7,8% PJ (>90 dias) = 3,8% 22
Corporate Governance Distributed Gross Value Interest on Equity Dividend Yield (R$) per share (R$) (%) 1Q10 5,506,435.92 5 506 435 92 0.06000 0 06000 0.57 0 57 2Q10 10,645,443.84 0.12000 1.41 Total 16,151,879.76 0.18000 - Rating Rating Rating / Ranking Rating A‐ brBBB+ 11.56 A+ Low Credit Risk Low Credit Risk  ‐ Low Credit Risk Low Credit Risk Medium term di July 2010 May 2009 July 2010 July 2010 Interest on Equity: R$ 10.6 million, equivalent to R$ 0.12 per share and pay-out of 31.5%. 23
Investor Relations Cristiano Malucelli Mauricio N. G. Fanganiello IRO IR Coordinator Phone: (+55 41) 3351-9950 Phone: (+55 41) 3351-9765 Marianne C. Baggio e-mail: ri@paranabanco.com.br IR Analyst IR Website: www paranabanco com br/ri www.paranabanco.com.br/ri Phone: (+55 41) 3351-9645 This presentation may include estimates and forward-looking statements. These estimates and forward-looking statements are to a large extent based on current expectations and projections regarding future events and financial trends that affect or may come to affect the company’s 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 situation, fiscal, foreign-exchange and monetary policies, higher competition in the payroll deductible loan segment the ability of Paraná Banco to obtain funding for its operations and amendments to Central Bank regulations. The words: “believe”, “may”, “could”, “seek”, “estimate”, “continue”, “anticipate”, “plan”, “expect” and other similar words are intended to identify estimates and projections. The considerations involving estimates and forward-looking statements include information related to results and projections, strategies, competitive positioning, the industry environment, growth of opportunities, the effects of future regulations, and the impact 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 in this presentation may not materialize. Given these limitations, shareholders and investors should not make any decisions based on the estimates, projections and forward-looking statements contained herein. 24

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2Q10 Presentation

  • 2. Disclaimer All financial information presented herein is consolidated, including the Bank´s financial statements, its subsidiaries, the insurers JMALUCELLI Seguradora, JMALUCELLI Seguradora de Crédito (pending SUSEP`s approval) the reinsurer JMALUCELLI Re JMALUCELLI Agenciamento SUSEP s approval), Re., and Paraná Administradora de Consórcio. All information, except when otherwise indicated, is presented in the Brazilian currency (in Reais) and was prepared based on the accounting practices g p pursuant to the Brazilian Corporate Law, associated with the regulations and instructions issued by the National Monetary Council (“CMN”), the Brazilian Central Bank (“BACEN”), the Brazilian Securities and Exchange Commission ("CVM"), the National Council of Private Insurance (“CNSP”), the Brazilian Private Insurance Authority (“SUSEP”) and the Accounting Standards Committee (“CPC”), whenever applicable. ( CPC ), Information contained herein regarding future events is exposed to risks and uncertainties and is subject to change, resulting from, among other factors: market behavior, Brazil’s economical and political situation, and changes i l i l i and regulations. I f li i l i i d h in legislation d l i Information presented h i i i d herein is entirely based on the expectations of the Bank’s Administration regarding its future performance, and does not constitute a guarantee of performance. 2
  • 3. Qualidade da Carteira de Crédito 4T09 x 4T09 x R$ 4T09 3T09 4T08 3T09 4T08 Main PDD Carteira (> 90 dias) Carteira (> 180 dias) Highlights g g Carteira Total* (a) Índice de cobertura da carteira (PDD / > 90 dias) Índice de cobertura da carteira (PDD / > 180 dias) 2Q10 70.649 70 649 74.725 46.820 1.398.582 94,5% 94 5% 150,9% 62.331 62 331 67.023 38.475 1.347.703 93,0% 93 0% 162,0% 13,3% 13 3% 11,5% 21,7% 1,5 3,8% 1 5 p.p. (11,1 p.p.) 51.469 51 469 56.151 30.420 1.330.658 91,7% 91 7% 169,2% 37,3% 37 3% 33,1% 53,9% 5,1% 2,9 2 9 p.p. (18,3 p.p.) PDD / Carteira Total 5,1% 4,6% 0,5 p.p. 3,9% 1,2 p.p. (b) Créditos Baixados a Prejuízo              8.754            13.250 (33,9%)              7.856 11,4% (b/a) Nível d Ní l de perda d 0,6% 0 6% 1,0% 1 0% (0,4 (0 4 p.p.) ) 0,6% 0 6% 0,0 0 0 p.p. * Inclui saldo da cessão com coobrigação. Inadimplência Paraná Banco Consignado (>90 dias) = 5,9% PME (>90 dias) = 0,8% Inadimplência SFN PF (>90 dias) = 7,8% PJ (>90 dias) = 3,8% 3
  • 4. Consolidated Net Income: Total Deposits: R$ 31.8 million R$ 1,173.8 million 42.4% x 1Q10 10.5% x 1Q10 Total A T t l Assets: t Profitability: P fit bilit R$ 2,955.2 million ROAE of 16.9% 18.0% x 2Q09 ROAA of 4.4% NIM of 12.0% Loan Portfolio: Portfolio from AA to C: R$ 1,431.4 million 94.9% of Paraná Banco’s 7.0% x 1Q10 portfolio. 4
  • 5. Insurance Group Net Income - Insurer: Net Income - Reinsurer: R$ 12.5 million in 2Q10 R$ 3.8 million in 2Q10 ROAE of 46.3% ROAE of 17.4% 81.2% x 1Q10 32.1% x 1Q10 Insurance business share: I b i h Market h M k t share: 52.4% of JM Seguradora: 32.4% Net income JM Re: 30.1% Combined Ratio Retained Premiums JM Seguradora: JM Seguradora + JM Re: 45.6% R$ 139.8 million 22.8 p.p. 22 8 p p x 1Q10 36.7% x 1Q10 5
  • 6. Financial Performance 15.9% 12.9% 12.0% 15.0% 250000 14.4% 12.6% 10.0% 10 0% 200000 5.0% 150000 0.0% 100000 189,479  189 479 163,923  83,962  90,574  98,905  50000 ‐5.0% ‐10.0%0 (30,986) (41,098) (41 098) (48,881) (48 881) (67,944) ‐50000 (89,979) ‐15.0% ‐100000 ‐20.0% ‐150000 ‐25.0% 2Q09 1Q10 2Q10 1H09 1S09 1H10 1S10 Income from Financial Operations Net Interest Margin NIM Margin- Expenses from Financial Operations 2Q10 x 2Q10 x 1H10 x R$ thousand 2Q10 1Q10 1Q10 2Q09 2Q09 1H10 1H09 1H09 Income from Financial Operations 98,905 90,574 9.2% 83,962 17.8% 189,479 163,923 15.6% 6
  • 7. Financial Performance Adjusted Net Income (R$ thousand) 6.1% 6 1% 54,666 -1.3% 51,542 29.4% 31,249 31 249 30,838 23,828 49.1% 42.8% 4 1% 54.1% 35.1% 42.7% 2Q09 1Q10 2Q10 1H09 1H10 Participation of insurance sector ROAA ROAE 17.9% 16.9% 5.8% 15.3% 4.3% 4.4% 11.7% 10.9% 3.3% 3.1% 2Q09 3Q09 4Q09 1Q10 2Q10 2Q09 3Q09 4Q09 1Q10 2Q10 7
  • 8. Loan Portfolio Quality Loan Portfolio (R$ million) 5.2% 4.8% 4.7% Storeowner  4.6% 4.3% Consumer  Others Credit 1.7% 4.0% 1.7% 3.4% SME 3.0% 12.3% 2.9% 2.8% 2.7% 2.4% 2 4% Payroll‐ Deductible  Loan 84.3% 1,105.8  1,158.2  1,205.3  1,297.0  1,338.2  1,431.4  - 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 FIDC I and II Loan O L Operations ti Level H/L L l H/Loan P tf li Portfolio Allowance for Doubtful Accounts (PDD)/Loan Portfolio 8
  • 9. Loan Portfolio Quality 2Q10 x 2Q10 x R$ 2Q10 1Q10 1Q10 2Q09 2Q09 Allowance for Doubtful Accounts (PDD) 58,805 58 805 60,520 60 520 (2.8%) (2 8%) 56,562 56 562 4.0% 4 0% Portfolio overdue (> 60 days) 67,595 69,314 (2.5%) 63,021 7.3% Portfolio overdue (> 90 days) 54,251 56,601 (4.2%) 49,732 9.1% Total Portfolio* (a) 1,483,493 1,413,329 5.0% 1,339,040 10.8% Portfolio Coverage Index (PDD / > 60 days) 87.0% 87.3% (0.3 p.p.) 89.8% -2.8 p.p. Portfolio Coverage Index (PDD / > 90 days) 108.4% 106.9% 1.5 p.p. 113.7% (5.3 p.p.) Allowance for Doubtful Accounts (PDD) / Total Portfolio 4.0% 4.3% (0.3 p.p.) 4.2% (0.3 p.p.) (b) Written-off credits          10,530          20,383 , , (48.3%)            7,441 , 41.5% (b/a) Loss rate 0.7% 1.4% (0.7 p.p.) 0.6% 0.2 p.p. * Includes balance of assignment with co-obligation. Delinquency rate - Paraná Banco Payroll deductible (>90 days) = 4.4% Small and Mid Enterprises (>90 days) = 0.5% Delinquency rate - Brazilian Financial System (“SFN”) Individuals (>90 days) = 6.6% 6 6% Corporations (>90 days) = 3.6% 9
  • 10. Payroll‐Deductible Loan Performance Payroll-Deductible Loan Origination Payroll-Deductible Loan Origination (R$ million) 3.3% 0.8% 3 3% 0 8% 340.4  States Municipalities 233.6  19.3% 202.9  44.6% INSS 182.8  161.2  Federal Entities Others 32.0% 2Q09 3Q09 4Q09 1Q10 2Q10 Payroll-Deductible Portfolio Payroll-Deductible Loan Quality of the Payroll-Deductible Loan Portfolio (R$ million) (R$ million) 2.7% 2.6% 6.5% AA - C 1,206 D-G 1,132 1,091 H 1,071 1,046 94.7% 2Q09 3Q09 4Q09 1Q10 2Q10 10
  • 11. Small and Medium‐Sized  Enterprises ‐ SME p Quality of the SME Portfolio Sector Distribution- SME 0.9% 0.3% AA - C Services D-G 7.9% H 8.6% 8 6% Commerce 83.6% Industry 98.8% SME Portfolio (R$ million) 9.9% 177 161 130 117 99 2Q09 3Q09 4Q09 1Q10 2Q10 11
  • 12. Distribution PAYROLL-DEDUCTIBLE Small and Medium-Sized Enterprises - SME p 7 PLATFORMS •CURITIBA/PR •SÃO PAULO/SP 86 FRANCHISES 11 OWN STORES •PONTA GROSSA/PR •MARINGÁ/PR Á •LONDRINA/PR •JOINVILLE/SC 427 BRANCHES •FLORIANÓPOLIS/SC FLORIANÓPOLIS/SC 12
  • 13. Operational Performance 2Q10 x 2Q10 x (R$ 000) 2Q10 1Q10 2Q09 1Q10 2Q09 Loan Portfolio 1,431,391 1,338,195 7.0% 1,158,182 23.6% Total Deposits 1,173,773 1,062,649 10.5% 785,231 49.5% Time Deposits 1,026,501 935,334 9.7% 735,891 39.5% Loan Portfolio – Operations Falling Due Funding – Operations Falling Due 8.8% 8 8% 13.4% 23.8% Up to 3 months 27.2% Up to 3 months Between 3 and 12 months Between 3 and 12 months Between 1 and 3 years 42.6% Between 1 and 3 years 36.9% 25.9% Above 3 years 21.3% Above 3 years Matching of terms: 49.7% of the portfolio and 48 6% of the funding maturing within 1 year 49 7% 48.6% 13
  • 14. Funding Funding Sources Deposits breakdown (R$ million) Institutional investors 1,173.8  1,173.8 Related parties p 36.5% 36 5% 39.5% Individuals 244.3 53.3 3 7% 3.7% Corporate investors 2006 2007 2008 2009 1Q10 2Q10 20.2% MTN Loans Assigment Deposits Medium Term Notes - MTN Tranche Granting Date Maturity Coupon (p.a.) Hedge (US$ thousand) 100,000 December/2009 December/2012 7.375% 100% 35,000 35 000 August/2008 A g st/2008 August/2011 A g st/2011 7.750% 7 750% 100% + interest rate 14
  • 15. Capital Structure Equity Changes (R$ thousand) 2Q10 1Q10 Initial Balance 805,585 788,576 Net Income 31,836 22,360 Interest on Equity (13,145) (5,506) Treasury shares (27,892) - Adjustment to market value - Marketable securities 149 (51) Others - 206 Final Balance 796,533 805,585 Basel Index Portfolio / Shareholder's Equity 1.80 1.64 1 64 1.66 1 66 39.5% 38.9% 1.44 1.49 37.4% 36.0% 33.9% 2Q09 3Q09 4Q09 1Q10 2Q10 2Q09 3Q09 4Q09 1Q10 2Q10 15
  • 16. Qualidade da Carteira de Crédito 4T09 x 4T09 x R$ 4T09 3T09 4T08 3T09 4T08 Insurance I PDD Carteira (> 90 dias) Carteira (> 180 dias) Carteira Total* (a) Índice de cobertura da carteira (PDD / > 90 dias) Índice de cobertura da carteira (PDD / > 180 dias) 2Q10 70.649 70 649 74.725 46.820 1.398.582 94,5% 94 5% 150,9% 62.331 62 331 67.023 38.475 1.347.703 93,0% 93 0% 162,0% 13,3% 13 3% 11,5% 21,7% 1,5 3,8% 1 5 p.p. (11,1 p.p.) 51.469 51 469 56.151 30.420 1.330.658 91,7% 91 7% 169,2% 37,3% 37 3% 33,1% 53,9% 5,1% 2,9 2 9 p.p. (18,3 p.p.) PDD / Carteira Total 5,1% 4,6% 0,5 p.p. 3,9% 1,2 p.p. (b) Créditos Baixados a Prejuízo              8.754            13.250 (33,9%)              7.856 11,4% (b/a) Nível d Ní l de perda d 0,6% 0 6% 1,0% 1 0% (0,4 (0 4 p.p.) ) 0,6% 0 6% 0,0 0 0 p.p. * Inclui saldo da cessão com coobrigação. Inadimplência Paraná Banco Consignado (>90 dias) = 5,9% PME (>90 dias) = 0,8% Inadimplência SFN PF (>90 dias) = 7,8% PJ (>90 dias) = 3,8% 16
  • 17. Potential new business PROINFA PAC TRANSPETRO MCMV PRE‐SALT R$ 10.4 billion R$ 504 billion R$ 15.6 billion R$ 190 billion R$ 34 billion $ 4 years 4 years 6 years 3 years BELO MONTE WORLD CUP OLYMPICS  TRAIN RJ – SP R$ 19 billion R$ 17 billion R$ 30 billion R$ 35 billion 9 years 4 years 6 years 6 years 17
  • 18. Market Share Market share - direct premiums Market Share - reinsurance premiums (R$ thousand) Financial risk category 703,109 0.1% IRB BRASIL RESSEGUROS 4.6% 8.5% 499,334 JMALUCELLI RESSEGURADORA 346,089 331,632 MAPFRE RE DO BRASIL 187,768 192,364 30.1% 56.7% 167,452 MUNCHENER RUCK DO BRASIL RE 29.2% 37.0% 42.3% 50.4% 43.0% 32.2% 32.4% XL RESSEGUROS BRASIL 2004 2005 2006 2007 2008 2009 Jun-10 JMalucelli Seguradora Market JMalucelli Seguradora: market leader, profitable operation, low claims ratio, quick credit analysis, selected clients and attracti e to reins rers attractive reinsurers. Outlier: R$ 124.7 million for the Madeira River hydroelectric power plant project. JMalucelli Resseguradora: 30.1% market share in the financial risk group 30 1% group. 18
  • 19. Financial Performance JMalucelli Seguradora JMalucelli Resseguradora 46.3% 29.5% 26.1% 23.3% 12,492 12 492 17.4% 17 4% 13.5% 6,217 6,895 4,319 3,811 2,885 2Q09 1Q10 2Q10 2Q09 1Q10 2Q10 Net Income (R$ thousand) ROAE 19
  • 20. Operational Performance (Insurance) Claim Ratio (Retained Claim/ Retained Premium) 70% 60% 50% 40% 30% 20% 10% 11.2% 0% 1.1% -10% 2006 2007 2008 2009 Jun-10 JMalucelli Seguradora Market JM Seguradora has a specialized claim department that mediates and regulates all notifications received from customers. The basic principle is legal defense of the involved parties and plenty of opportunities for discussion on the issues in question. 20
  • 21. UHE Belo Monte BID BOND PERFORMANCE BOND Apr/2010 Aug/2010 Insurer Insurer UBF  Fator  A B Seguros Seguradora RIOD RIOD JMalucelli  JMalucelli -DAY PER 9-YEAR PER JMalucelli  Seguradora Seguradora 154- Amount  Amount  insured:  insured:  R$ 191.0 million R$ 1.05 billion Premium:  R$ 500,000  Construction companies:  Contract signing Contract signing Project execution Project execution Winning bidders 21
  • 22. Qualidade da Carteira de Crédito 4T09 x 4T09 x R$ 4T09 3T09 4T08 Corporate  Corporate 3T09 4T08 PDD Carteira (> 90 dias) Governance Carteira (> 180 dias) Carteira Total* (a) Índice de cobertura da carteira (PDD / > 90 dias) Índice de cobertura da carteira (PDD / > 180 dias) 2Q10 70.649 70 649 74.725 46.820 1.398.582 94,5% 94 5% 150,9% 62.331 62 331 67.023 38.475 1.347.703 93,0% 93 0% 162,0% 13,3% 13 3% 11,5% 21,7% 1,5 3,8% 1 5 p.p. (11,1 p.p.) 51.469 51 469 56.151 30.420 1.330.658 91,7% 91 7% 169,2% 37,3% 37 3% 33,1% 53,9% 5,1% 2,9 2 9 p.p. (18,3 p.p.) PDD / Carteira Total 5,1% 4,6% 0,5 p.p. 3,9% 1,2 p.p. (b) Créditos Baixados a Prejuízo              8.754            13.250 (33,9%)              7.856 11,4% (b/a) Nível d Ní l de perda d 0,6% 0 6% 1,0% 1 0% (0,4 (0 4 p.p.) ) 0,6% 0 6% 0,0 0 0 p.p. * Inclui saldo da cessão com coobrigação. Inadimplência Paraná Banco Consignado (>90 dias) = 5,9% PME (>90 dias) = 0,8% Inadimplência SFN PF (>90 dias) = 7,8% PJ (>90 dias) = 3,8% 22
  • 23. Corporate Governance Distributed Gross Value Interest on Equity Dividend Yield (R$) per share (R$) (%) 1Q10 5,506,435.92 5 506 435 92 0.06000 0 06000 0.57 0 57 2Q10 10,645,443.84 0.12000 1.41 Total 16,151,879.76 0.18000 - Rating Rating Rating / Ranking Rating A‐ brBBB+ 11.56 A+ Low Credit Risk Low Credit Risk  ‐ Low Credit Risk Low Credit Risk Medium term di July 2010 May 2009 July 2010 July 2010 Interest on Equity: R$ 10.6 million, equivalent to R$ 0.12 per share and pay-out of 31.5%. 23
  • 24. Investor Relations Cristiano Malucelli Mauricio N. G. Fanganiello IRO IR Coordinator Phone: (+55 41) 3351-9950 Phone: (+55 41) 3351-9765 Marianne C. Baggio e-mail: ri@paranabanco.com.br IR Analyst IR Website: www paranabanco com br/ri www.paranabanco.com.br/ri Phone: (+55 41) 3351-9645 This presentation may include estimates and forward-looking statements. These estimates and forward-looking statements are to a large extent based on current expectations and projections regarding future events and financial trends that affect or may come to affect the company’s 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 situation, fiscal, foreign-exchange and monetary policies, higher competition in the payroll deductible loan segment the ability of Paraná Banco to obtain funding for its operations and amendments to Central Bank regulations. The words: “believe”, “may”, “could”, “seek”, “estimate”, “continue”, “anticipate”, “plan”, “expect” and other similar words are intended to identify estimates and projections. The considerations involving estimates and forward-looking statements include information related to results and projections, strategies, competitive positioning, the industry environment, growth of opportunities, the effects of future regulations, and the impact 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 in this presentation may not materialize. Given these limitations, shareholders and investors should not make any decisions based on the estimates, projections and forward-looking statements contained herein. 24