2011 Annual Report

2011 A nnual Report .1

2011 ANNUAL REPORT
N EW HORIZONS


About this Report
T he year 2011 marked the beginning
of a new stage in BI&P – Banco
Indusval & Partners’ path of progress and
BI&P’s main asset, who put into practice
the values they discussed, defined and
assimilated, and who lead the Bank to a new
NEW CULTURE NEW STRUCTURE NEW POSITIONING

development: we attracted new partners, development horizon, effectively embodying Strategic Vision Strong and experienced Deep knowledge of market
strengthened our management, business, the concept that “partners” brings to the management and teams variables and of our
support and control teams, expanded the new brand. customers’ businesses
range of products we offer and markets Throughout this Report, we will
we operate in, and consolidated our present BI&P in all of its aspects, and its
meritocracy-based work culture. That is transformation in 2011: from people to Development of edge The new headquarters and Broader product offer, tailor-
the first step in our path to materialize technology, from management to results – and expertise in certain investments in technology made to meet the needs
our vision of “being an innovative bank, and we will emphasize the importance of our business chains and systems provide more of our customers and the
with excellence in corporate credit and in employees, who play a major role in this new safety and efficiency industries where they operate
depth knowledge of our customers and the excellence-oriented phase.
industries in which they operate, as well as Constant pursuit of Solid policies and enhanced Development of effective
one of the leaders of the growing corporate Enjoy your reading! innovation and excellence operational procedures relationships with mid-
fixed income bond market in Brazil.” sized and large corporate
The theme illustrated in this Annual customers (Middle Market
Report represents this scenario: people, and Corporate)


Contents
MESSAGE FROM MANAGEMENT .........04

ADMINISTRATIVE STRUCTURE .........28
VISION AND VALUES .........06
People Management .........30
Risk Management .........32
MAIN INDICATORS .........07

ECONOMIC AND FINANCIAL PERFORMANCE .........34
CORPORATE PROFILE .........08
Credit Portfolio .........37
History .........09
Funding .........38
New Brand, New Bank .........09
Capital Structure .........39
Strategic Partnerships .........10
Financial Transactions .........39
Corporate Structure .........12
Operating Revenues and Expenses .........40
Efficiency .........41
STRATEGY .........13
Net Income .........42
Customers .........15
Stock Performance .........43
Products .........16
People .........18
SOCIAL-ENVIRONMENTAL ACTIONS .........44
Annual Social Report .........49
CORPORATE GOVERNANCE .........19
Guidelines .........20
FINANCIAL STATEMENTS .........51
Governance Structure .........21
Governance and Capital Markets .........27
CORPORATE INFORMATION .........95


Message from
Management
A NEW BANK WITH 45 YEARS OF EXPERIENCE

A t BI&P, 2011 was a year full of changes, novelties and
improvements that helped us to recover our growth pace with
solidity and profitability. Our Bank underwent a deep restructuring
management, with the admission of professionals with significant
experience in the financial market, and the promotion of various
professionals who already worked at the Institution. This new team MANOEL FELIX CINTRA NETO
of its objectives in a process of strategic repositioning, resulting in redefined the short- and long-term goals for all of our divisions–both
Chairman
changes to shareholders, management, partners, people, systems and the front office and supporting divisions–within the concept of turning
controls, all indispensable to make our new reality come true. BI&P into a benchmark. JAIR RIBEIRO AND
More than expanding the Bank’s capital structure, these changes In order to meet these goals, each division developed its own LUIZ MASAGÃO RIBEIRO
were implemented to provide a qualitative improvement within our Action Plan, engaging the whole team. These Plans were combined Co-CEOs
Vision of becoming “an innovative bank, with excellence in and shared among everyone, and have been systematically monitored
corporate credit and deep knowledge of our customers’ activities by our top management. The commercial, credit, international,
and the industries where they operate.” operational, legal, funding, treasury and products divisions are working
Our goal is very clear: returning to our historical levels of growth at a fast pace to implement their Action Plans, so as to adopt the best
and profitability, by generating high-quality assets in the Middle practices and controls, in addition to developing products that suit our
Market and Corporate segments, more service revenues, and reducing target customers.
credit risks. Finally, we gathered the Bank’s 30 most senior employees to define
The first step was the Bank’s capitalization by U.S. fund Warburg which Values would be included in our DNA – Ethics, Ownership
Pincus, by the controlling shareholders, and by the new Co-CEO, Jair Attitude, Excellence, Team Work, Focus on Results, Innovation and
Ribeiro, who then defined the organization’s new strategic Vision. Credibility. These are the Values that guide us in our everyday activities
T h e s e c o n d s t e p w a s t h e re s t r u c t u r i n g o f t h e B a n k ’s t o p and help us execute our strategy.


In order to stand out among other mid-
sized banks, we have expanded our focus
and included services to companies in the
Corporate segment. We strengthened our
sector segmentation, with special focus on
agribusiness, which is becoming increasingly
more professionalized and profitable.
T h e s t r u c t u r i n g o f a s t ro n g p ro d u c t s Our results throughout the year have shown an improvement
division was essential to the success of that should gain pace, since the teams are already assembled and
our strategy. In 2011, in addition to the integrated to the new Vision and strategy, experiencing the Values
redevelopment of traditional products, 23 determined for the business development of BI&P.
new financial products were created and In 2012, the practices and controls implemented will be
implemented, including the creation of a consolidated and improved, in order to achieve excellence in all of
derivatives division. Today we offer a broad our divisions, thus ensuring the means for the solid and consistent
range of products to the market, leveraging growth we have planned. In this context, it is critical for us to
the relationships developed by the commercial develop even further our knowledge of our customers’ activities
division. In addition, we have completed the and the industries where they operate, in order to leverage the
creation of the structured operations division, quality of our credit, customize our products to the needs of our
home to our team specializing in fixed income customers and strengthen our relationship with them, materializing
markets and M&A. recurring businesses through offers of multiple products, thus
Another change worthy of mention is the improving our efficiency, margins and profitability.
new stance adopted by our credit division. In The Company underwent several changes in 2011, and will
addition to segmenting it into two different continue to grow. However, Ethics and Credibility, key values that
divisions—Corporate and Middle Market— we have carried with us throughout our 45-year history, still guide
the analysis parameters and criteria were our actions in society and in the financial market.
revisited by applying many of the concepts We appreciate the trust, support and efforts of our shareholders,
used to evaluate companies in the Corporate customers, business partners, and particularly our employees and
segment to mid-sized companies. As a result, collaborators, who played a key role in the implementation of
the analysis of the customer’s operational the corporate and organizational changes developed throughout
activities in their industry of operation and the year, making us a stronger and more dynamic and innovative
their payment capacity became critical for bank. There is still a lot to do for us to reach the level of growth,
the approval of credit facilities, serving as profitability and excellence we aim at. 2011 was just a great start
accessory guarantees to transactions. of this new cycle.


Vision
B eing an innovative bank, with
excellence in corporate credit and
in depth knowledge of our customers
and the industries in which they operate,
as well as one of the leaders of the
growing corporate fixed income bond
market in Brazil.

Values
E thics
O wnership Attitude
E xcellence
T eam Work
F ocus on Results
I nnovation
C redibility

Main
Indicators Branches
São Paulo
Campinas
Rio de Janeiro
BI&P is a Brazilian bank listed on Belo Horizonte
Uberlândia
BM&FBovespa’s Level 2 *1 (Nível 2) of Corporate Goiânia
Governance, and it is using its 45-year Campo Grande
Curitiba
experience in the financial market to position Maringá
itself as an innovative financial institution, Porto Alegre
focused on corporate credit and on creating
customized products and services for mid-sized
AGENCY RATING LAST REPORT
and large companies.
In order to help our customers develop
Global: BB/ Stable /B
Standard & Poor’s December 2011
their business in Brazil and abroad, the BI&P National - Brazil: brA+/ Stable /brA-1
team, made of more than 400 employees, has
Global: Ba3/ Stable /Not Prime
global expertise and deep knowledge of market Moody’s November 2011
National - Brazil: A2.br/ Stable /BR-2
variables, and is always ready to evaluate
each transaction and find the best credit and FitchRatings National - Brazil: BBB/ Stable /F3 December 2011
investment options for it. With this purpose,
Index: 10.08
we have established bonds with our customers RiskBank January 2012
Low Risk to Short Term
in order to get to know their businesses and
segments of operation, which also allows us to
Consolidated - R$ million 2007 2008 2009 2010 2011(d)
develop and customize products that will meet Income Statement
each of their needs. Income from Financial Intermediation 289.0 641.0 407.5 453.8 631.7
Gross Income from Financial Intermediation 129.2 200.1 94.3 141.2 52.5
With assets totaling around R$4.3 billion Net Income 45.4 71.8 12.8 29.0 (31.7)
at the end of 2011, BI&P operates in various Balance Sheet
Free Cash (a) 255.6 422.6 695.9 732.8 887.3
modalities, such as loans, financing, foreign
Credit Portfolio 1,255.2 1,723.0 1,635.9 1,876.9 2,269.6
trade transactions, corporate finance, corporate, Expanded Credit Portfolio (b) 1,329.0 1,793.7 1,698.7 1,941.2 2,534.4
Total Assets 2,211.2 2,225.4 2,730.5 3,276.1 4,278.3
real estate and agricultural bonds, securitization
Total Deposits 810.4 824.9 1,273.2 1,577.6 1,851.2
o f re c e i v a b l e s , m e r g e r s a n d a c q u i s i t i o n s , Open Market 656.6 2.7 365.8 538.6 867.9
structured transactions, and debt restructuring. Loans and Onlending 229.7 775.2 520.0 453.0 682.0
Shareholders' Equity 406.7 448.5 432.7 426.4 577.1
Performance Indicators (a) Free Cash = Cash and Cash
Equivalents and Interfinancial Marketable
Return on Average Equity (ROAE) 16.3% 16.8% 2.9% 6.8% -6.3%
Securities net of Funds obtained on
Return on Average Assets (ROAA) 2.7% 3.2% 0.5% 1.0% -0.8% the Open Market. (b) Expanded Credit
Default Ratio (c) 0.7% 1.9% 5.4% 3.3% 4.7% Portfolio includes: Sureties, Guarantees,
L/Cs, CPRs and NPs. (c) Contracts more
Basel Ratio 33.2% 24.0% 22.5% 17.6% 18.2% t h a n 9 0 d a y s o v e rd u e / To t a l C re d i t
Operating Indicators Portfolio. (d) Under the Investment
Number of Corporate Borrowers 983 699 660 709 734 Agreements established in March 2011,
complementary provisions for doubtful
Number of Depositors 592 571 672 628 661 accounts were created in the amount
Number of Employees 331 329 333 362 421 of R$67.2 million to segregate potential
credit losses as a result of deals closed in
Number of Branches 11 11 12 11 11 previous years.
1. Level 2 listing as of March 1, 2012.


Corporate
Profile


NEW BRAND, NEW BANK

A dding “Partners” to our name was not a
mere change in our brand.
In 2011, the Bank consolidated strategic
relationships—with shareholders, executives,
employees and partners—in order to put into
practice a business plan that seeks to turn the
Bank into a reference in corporate credit through

Corporate Profile
knowledge, innovation and excellence. This plan
becomes feasible with the new structure and the
engagement of strategic partners.
This new design involved the admission of
new shareholders: the controlling shareholders
of foreign trade company Sertrading, and private
A HISTORY OF TRANSFORMATION AND PARTNERSHIPS
equity fund Warburg Pincus, listed as one of the
world’s largest funds. It also includes the admission
of one of the best executive teams in the market,
1967. Establishment of Indusval Corretora de Valores. leading the implementation of the new strategy.
To make the development of the businesses with
excellence our staff was also strengthened.
1991. Creation of Banco Indusval, operating with a focus on corporate credit specializing in the Middle Market.

2003. Merger with Banco Multistock, creating Banco Indusval Multistock.
BI&P ATTRACTED THE FIRST PRIVATE EQUITY
INVESTMENT IN A BRAZILIAN BANK, PAVING THE WAY
FOR LONG-TERM RESOURCES FOR THE DOMESTIC
2007. IPO on the BM&FBovespa and capitalization of R$227.5 million. FINANCIAL SECTOR.

2009. Strategic partnership with experienced professionals for developing the business of Indusval
Multistock Corretora de Valores.

2011. New expansion phase with a capital increase of R$201 million (Tier I); attracting new investors: Warburg
Pincus and the controlling shareholders of Sertrading; strengthening of the Bank’s management; and,
under an innovative vision of excellence, the BI&P – Banco Indusval & Partners brand was born.

MATERIALIZATION OF
STRATEGIC PARTNERSHIPS

T he first step was the Bank’s capitalization:
Warburg Pincus invested R$150 million,
t h e c o n t ro l l i n g s h a re h o l d e r s o f S e r t r a d i n g
invested R$30 million, and the Bank’s controlling
shareholders invested another R$21 million, in a
Indusval
capital increase of R$201 million (tier I), executed Warburg
Controlling
in March 2011. Pincus
At the same time, the Bank acquired a 17.7% Group
interest in Sertrading’s capital, closed a 5-year
R$21 million
operating agreement with preference in the R$150 million capital
capital investment.
investment, 26%
acquisition of its receivables from the foreign
of the capital stock.
trade activity, and took over its subsidiary that
generates agricultural bonds (CPRs).
J.P. Morgan Bank also participated in the
transaction, providing BI&P with a credit facility of
US$25 million, and obtaining subscription rights
over preferred shares corresponding to 2.5% of
the Bank’s capital for a future minority interest.

R$30 million
investment, 5.5% of
the capital stock, by the
controlling shareholders
of Sertading.
Subscription rights
R$25 million investment, of preferred shares
17.7% of the capital stock. (2.5% of capital stock).
Operating Agreement for US$25 million,
preference in receivables 2-year credit line.
acquisition.
Acquisition of 100%
of agricultural securities
originator for R$15 million. J.P. Morgan
Sertrading
Sale of Vastera JPM Chase
(foreign trade).

STRATEGIC PARTNERS

Sertrading

A leader in foreign trade services in Brazil, with a
transaction volume of R$1.6 billion in 2011, Sertrading
conducts exports and imports for more than 90 countries,
operating through its offices in São Paulo, Rio de Janeiro, Vitória,
Itajaí, Paranaguá, Franca, Varginha and China since 2001.
Our partnership with Sertrading is strategic, and provides
for various synergies. The acquisition of Serglobal transfers
to BI&P the expertise in agricultural bond generation (Rural
Product Certificates - CPR) developed in the last 8 years. The
possibility for the Bank to finance transactions of Sertrading’s
customers favors the expansion of its foreign trade activities
Warburg Pincus
and the growth of the Bank’s Trade Finance portfolio. It also
gives access to Sertrading’s large customers, making it easier
to analyze the cycle and the operating activity of importers
and exporters, mitigating the risks of transactions, enabling the
F ounded in 1966, Warburg Pincus, one of the largest global private equity funds manager,
has already invested more than US$40 billion in circa 650 companies, in over 30 countries.
With US$30 billion in assets under management at the end of 2011 and a portfolio of more than 125
structuring of an offer of multiple financial products to these companies, it is highly diversified both by state and sector, as well as geographically. Warburg Pincus
customers, and expanding the generation basis of quality assets. has vast experience in the financial industry, with investments amounting to US$8.0 billion in more than
70 banks and companies linked to the provision of financial services.

• Investment of R$150 million, corresponding to 26% of the total capital.
• BI&P acquires 17.7% of their capital, with an investment • Right to elect a representative in BI&P’s Board of Directors.
of R$25 million and the possibility to expand its equity
interest in the next two years.
• Acquisition of subsidiary Serglobal Comércio de Cereais
Ltda, a generator of agricultural bonds, for R$15 million.
• A 5-year Operating Agreement that guarantees BI&P’s
preemptive rights to finance Sertrading’s customers
J.P. Morgan
through the acquisition of receivables generated in the
• Long-term credit facility.
foreign trade activity.
• Acquisition of Subscription Rights for Preferred Shares, equivalent to 2.5% of BI&P’s capital.
• Sale of J.P. Morgan Chase Vastera in Brazil and Argentina, J.P. Morgan’s foreign trade
companies, to Sertrading.


CORPORATE STRUCTURE
CONTROLLING GROUP

A fter the capital increase of R$201.4 million, resolved
in May and approved by the Central Bank of Brazil
in September 2011, BI&P’s capital stock went to R$572.4 Carlos Ciampolini
million, and is comprised of 36,945,649 common shares Luiz Masagão
(ON) and 26,160,044 preferred shares (PN), totaling Antonio G. da Rocha
Jair Ribeiro ON = 56%
63,105,693 shares. Manoel Cintra PN = 3%
In this context, the shareholders’ agreement to determine
TOTAL = 34%
the control group, entered into by Messrs. Manoel Felix Cintra
Neto, Luiz Masagão Ribeiro, Carlos Ciampolini and Antonio FREE FLOAT J.P. MORGAN
G. da Rocha, now also includes Mr. Jair Ribeiro da Silva Neto. Warburg Pincus Other Subscription rights to 2.5% of the
ON = 13% ON = 31% Bank’s capital stock in preferred shares
PN = 43% PN = 51%
TOTAL = 26% TOTAL = 39% TREASURY

ON = 44% | PN = 94% | TOTAL = 65% PN = 3% | TOTAL = 1%

17.7% 23.1% 100% 100%

SERTRADING BRASIL AGROSEC SERGLOBAL BI&P
SECURITIZADORA CEREAIS INDUSVAL & PARTNERS
CORRETORA


Strategy


Strategy
I n 2011, with the new partnerships and the
s t r e n g t h e n i n g o f i t s m a n a g e m e n t , B I & P, b a s e d
on the Vision of “being an innovative bank,
with excellence in corporate credit and in deep
knowledge of our customers and the industries
in which they operate”, with active participation of
a l l i t s d i v i s i o n s , r e d i r e c t e d i t s b u s i n e s s s t r a t e g y. T h i s
strategy, which was developed for the medium and long
t e r m s , t a r g e t s g ro w t h w i t h q u a l i t y a s s e t s t h ro u g h t h e
offer of multiple products and a healthy generation
of recurring revenue, keeping a focus on corporate
c u s t o m e r s , a l w a y s s u p p o r t e d b y t h re e k e y p i l l a r s :


CUSTOMERS

F ollowing its expertise in corporate credit, BI&P decided to expand its operation
with larger customers – Corporate segment. This segment, in addition to
being less susceptible to cycles of economic instability, allows for an increase in
product distribution per customer (cross-selling) and the generation of higher stability
in the revenue flow. BI&P also promoted changes in the Middle Market segment.
The Bank adopted a series of initiatives to improve the relationship of account and
product managers with customers, and to deepen the operations support team’s
knowledge on customers’ profile and needs, promoting synergies that are translated
into operating excellence.

Structuring of sales teams
The Corporate customer relationship team was strengthened by new professionals,
and the Middle Market team underwent renovation with the purpose of assembling
a staff that is trained to detect business opportunities, combining the offer of various
products. The commercial division works in partnership with the products teams,
maximizing the relationship potential between the Bank and its customers.

Deep knowledge of customers and industries
One of the pillars in the pursuit of excellence in BI&P’s customer relationships Closer relationships with our customers
is a daily exercise to deepen our knowledge of the activities developed by these BI&P is tightening its customer relationships by engaging several areas of the bank that,
customers, which includes optimizing the Bank’s expertise of the industries where together, provide better support and quality to service, expanding the alternatives to meet
they operate, in order to: customer needs more efficiently.
In the Commercial division: detect business opportunities that will add value
and mitigate risks for both the customer and the Bank.
In the Products division: develop innovative and customized products and Middle Market: companies with annual revenue between R$40 million and R$400 million.
solutions to meet the demands of customers that present an increasing level of Corporate: companies with annual revenue between R$400 million and R$2.0 billion.
sophistication and competitiveness in the market.
In the Credit division: in addition to segmenting credit analysis into the
Corporate and Middle Market teams, these teams are also being segmented for OUR PURPOSE IS TO BECOME A REFERENCE BANK IN THE MARKET AND FOR OUR
a specialized analysis in economic sectors, increasing the capacity to identify risks CUSTOMERS, SUPPORTING THE CONSTRUCTION AND DEVELOPMENT OF THEIR
inherent to both the industries and the activities of each customer. BUSINESS WITH EFFECTIVE SOLUTIONS, AS WELL AS CLOSE AND CUSTOMIZED
SERVICE TO MEET AND EXCEED THEIR EXPECTATIONS.


PRODUCTS

I n order to help our customers develop their business in Brazil and
abroad, the BI&P team has global expertise and deep knowledge
of market variables, and is always ready to evaluate each transaction and
find the best credit and investment options for it. With this purpose, we
establish close relationships with our clients in order to understand their
businesses and industry segments, which also allow us to develop and
customize products that will meet each of their needs.
The success of our strategy mostly depends on our capacity to offer intelligent
and efficient solutions; therefore we work on the following key points:

Deep knowledge of customers’ activities and industries where they operate
In order to better identify and evaluate business risks and opportunities, and also to develop
more efficient products and solutions to our customers without giving up on profitability, we
have been seeking specialization in the most promising economic sectors and geographic
regions, and, throughout time, the creation of franchise value in certain production chains.

Strengthening of the products division
Professionals specializing in developing financial products and services, connecting the
experience in financial institutions and in companies. This combination allows for a unique
experience in structuring solutions to meet the needs of corporate customers. Knowing the
specific demands and characteristics of both sides at the negotiation table is an important edge
in order to quickly understand the needs, detect opportunities and develop product offering.

Expansion of the product and service portfolio
In order to meet an increasingly sophisticated demand, and making use of the expertise of
professionals in the products division, we have expanded our product and service offer with
the purpose of strengthening our relationship with customers and increasing the profitability
of our operations. In 2011, 23 new products were developed. Together with existing products,
they cover most needs of our target customers, in addition to building the basis for structuring
customized solutions.
The products division, operating in close cooperation with the commercial team, has been
able to identify opportunities and develop products and services which by means of customized
and recurring transactions tighten mutual benefit relationships with clients.

PRODUCTS 2011 A nnual Report .17
CLIENTS
MULTIPLE PRODUCT OFFERING
AGRO BONDS
LCA – Agri Letter of Credit
CPR – Agri Product Certificate
CPR Term
CPR – Physical Settlement
CPR – Financial Settlement
CPR – Indexed Financial Settlement
CDA/WA – Inventory Financing
CDCA – Certificate of Agri Credit Rights
Barter
CRA – Agri Receivables Certificate

LOCAL CURRENCY
Credit Cession
Confirming
Discount of Receivables
Overdraft Account
Export Credit Notes
Working Capital
Local Guarantees

FOREIGN CURRENCY
Export Finance (ACC/ACE)
Import Finance
Law Nbr. 4,131
Import Draft Discount
International Guarantees (SBLC)
INVESTMENT BANKING
Letter of Credit
Real State Products
Capital Markets
Corporate Finance
Investment Management BNDES ONLENDINGS
Mergers & Acquisitions There are more than 50 products—23 launched or
Finem
Syndications remodeled in 2011—in various modalities: loans
Finame
and financing, foreign trade transactions, corporate
BNDES-Exim
DERIVATIVES finance, issuance of corporate, real estate and
PROCAP-AGRO
Swap agricultural bonds, securitization of receivables,
BNDES Progeren
NDF mergers and acquisitions, structured transactions, and
BNDES Automático debt restructuring.
Options

PEOPLE

P eople are the main intangible asset of
any financial institution. Through their
knowledge and experience, they are capable of
Attraction
Besides the significant additions to the Company’s management, both
in its Board of Directors and Board of Executive Officers, in order to meet
Motivation
Retaining teams and keeping them producing with
a focus on results is just as important as attracting
generating relationships, developing products, the Excellence and Innovation goals proposed by the Vision, it was critical them. Therefore, in addition to the initiatives taken in
evaluating and managing risks and producing to hire highly qualified and experienced professionals, as well as young people management, with the purpose of becoming,
growth and sustainable results in the long term. talents with excellent education and motivation. This blend guarantees in the medium term, one of the 100 best companies
The progress of any successful strategy the experience and speed required to effectively make the proposed to work for in Brazil, BI&P believes that meritocracy
begins with the attraction, retention and changes. The combination of experienced and young professionals with the is the path for the success of its strategy. For that
motivation of people, who build the company’s opportunity to take part in a transformation and expansion project like BI&P purpose, in addition to the initiatives arising from the
everyday life and implement its strategy. enables the development of our strategy with limited impacts on expenses. organizational climate research, it has strengthened
Therefore, we will begin with the actions that its performance evaluation process, adopting the 360º
are related to the people that comprise the Consolidation of the New Corporate Culture evaluation method, which is further described in the
BI&P team: Such a significant transformational process in an organization requires People Management item.
dedicated work to consolidate the new corporate culture. Disseminating
and internalizing the Company’s Values and Vision was, and still is, OUR STRATEGY FOR CUSTOMERS AND
essential for the development of an organizational culture where PRODUCTS IS SUPPORTED BY PEOPLE.
managers, employees and collaborators are all integrated and working in ONLY THEY ARE CAPABLE OF GENERATING
line with the same values. With that in mind, each of the Values has been RELATIONSHIPS, DEVELOPING PRODUCTS,
broadly disseminated throughout the organization, so as to effectively ASSESSING AND MANAGING RISKS AND
become part of the routine of all employees. PRODUCING SUSTAINABLE GROWTH AND RESULTS.


Corporate
Gover nance


Corporate Gover nance
KEY STAKEHOLDERS
GOVERNANCE GUIDELINES
Money
Bylaws Laundering
BI&P’s management is guided by its values: Ethics, Ownership Management and
Employees Prevention
Attitude, Excellence, Team Work, Focus on Results, Innovation Shareholders
and Credibility. Its governance is defined by its bylaws and
shareholders’ agreement, in addition to various policies and
codes, which establish the rights and duties of managers and
Information Know your
shareholders, as well as the other audiences that maintain a Disclosure Client
relationship with the Company. All employees are instructed Policy
regarding the management policies and guidelines, which are
available on the intranet and are presented in the chart below:
Securities
Code of Ethics
Trading Policy

Personal
Shareholders’
Investment
Agreement
Policy
* All documents presented are available on the Company’s website: www.bip.b.br/ir

GOVERNANCE STRUCTURE
Board of Directors
BI&P’s Board of Directors, with tenure up to 2013, is comprised of 4 independent members MANOEL FELIX CINTRA NETO
Chairman of the Board of Directors
who are highly qualified professionals in their specific activities, in addition to its controlling
shareholders. Independent members represent more than 40% of all board members. Mr. Cintra is an economist and one of the leaders of the Brazilian
financial community, having served in top positions at Banco
MEMBERS OF THE BOARD OF DIRECTORS IN 2011 Bozano Simonsen (1970-1984), Multiplic Bank and Brokerage
(1985-1999), as CEO and partner of Multistock Bank and
Manoel Felix Cintra Neto Chairman Brokerage and Máxima Consumer Finance (1999-2003). After
Carlos Ciampolini Vice-Chairman the merger with Indusval, he became one of its controlling
Antônio Geraldo da Rocha Member shareholders and President (2003-2011). He also served as
Jair Ribeiro da Silva Neto Member Chairman of ANBID (1990-1992), Executive Officer at FEBRABAN
Luiz Masagão Ribeiro Member (1989-1995), Vice-Chairman of CBLC (1999-2003), Chairman of
Alain Juan Pablo Belda Fernandez Independent Member BM&F (1997-2008). Since 2009, Mr. Cintra has been Chairman
Alfredo de Goeye Junior Independent Member of ANCORD and member of the Fiscal Council of FGC. He is also
Guilherme Affonso Ferreira Independent Member Vice-President of the Organizing Committee of the Olympic and
Walter Iório Independent Member Paralympics Games Rio 2016.

Fiscal Council
Shareholders’
Installed in 2010, the Fiscal Council remains in activity, with the extension of the tenure of Meeting
its members in 2011, providing better contribution to a proper business development.

Fiscal Council
FISCAL COUNCIL MEMBERS IN 2011

Board of
Francisco de Paulo dos Reis Sitting Member Directors
Jairo da Rocha Soares Sitting Member
Luiz Alberto de Castro Falleiros Sitting Member Compensation
Committee

Executive
Board

BI&P CONDUCTS ITS BUSINESSES UNDER THE BEST
CORPORATE GOVERNANCE PRINCIPLES AND ITS COMMITMENT Human Information Watch List Internal Audit Compliance
Resources Technology Committee Committee Committee
TO TRANSPARENCY, FAIRNESS AND CLARITY IN REPORTING.
Committee and Safety
Committee
Products Assets and Legal Credit
Committee Liabilities Committee Committee
Committee
* Access detailed information at: www.bip.b.br/eng/ri/governanca/estrutura.asp

Committees
BI&P maintains 10 committees and two
sub-committees not established in the bylaws,
which support the company’s management
in decision-making processes and in the
development of initiatives related to various
issues that are relevant to the Bank’s business.
With multidisciplinary composition, these
committees gather experienced professionals
in many areas related to their themes in their
work routine.

Board of Directors’ Advisory Committee Periodicity Purpose
Periodically review executive compensation. The Compensation and Benefits Committee is composed of Messers Manoel Felix
Compensation Committee Semiannual minimum
Cintra Neto, Luiz Massagão Ribeiro, Jair Ribeiro da Silva Neto and Alain Juan Pablo Belda Fernandez.

Board of Executive Officers’ Advisory Committees Periodicity Purpose
Credit Committee Weekly To decide on credit limits and operations.
To control the Bank’s liquidity; analyze cash flow projections, funding alternatives, transactions and operating limits;
Assets and Liabilities Committee Weekly
and approve interbank credit limits.
Watch List Committee Weekly To decide on actions to be taken for renegotiation and recovery of credits overdue from 16 to 360 days.
Products Committee Bi-weekly To evaluate and resolve on all matters related to new or existing products.
Internal Audit Committee Monthly To monitor accounting practices and the effectiveness of internal controls.
To establish policies, operating rules and strategies to disseminate the practice of internal controls to internal controls
Compliance Committee Monthly culture diffusion for risk mitigation and legal requirements compliance.
Subordinate to this committee is the Ethics sub-committee that meets weekly or extraordinarly whenever necessary.
Information Technology and Safety Committee Monthly To resolve on investments’ goals, strategies and execution in technology and procedures.
To analyze litigation strategies, rules and procedures related to legal matters, evaluating and defining alternatives
Legal Committee Monthly
to mitigate specific risks.
Human Resources Committee Bi-weekly To discuss the HR strategy, as well as wages, people development and organizational climate.

BOARD OF EXECUTIVE OFFICERS
Elected for the 2011/ 2012 biennium, Manoel Felix Cintra Neto
the Board of Executive Officers is
comprised of nine renowned and
Chief Executive Officers
experienced market professionals, under
CEO CEO
the leadership of Jair Ribeiro and Luiz
Masagão, who share the position of Chief
1. Jair Ribeiro 2. Luiz Masagão Ribeiro

Executive Officer.

Kátia Moroni Francisco Cote Gil André Mesquita Gilberto Faiwichow
Credit
Trade Finance Commercial Products and Treasury
Local and Corporate and Investor Claudio Cusin
Foreign Finance Relations Corporate
Fundraising
Syndications Jair Balma Eliezer R. da Silva
Local Middle Market
Financial
Funding
Institutions
Accounting and Compliance and
Controlling Internal Controls

Risk
Management

Administrative Legal

Information
Human Resources
Technology

1. JAIR RIBEIRO DA SILVA NETO
2. LUIZ MASAGÃO RIBEIRO
Co-CEO Co-CEO
Lawyer and economist, he was one of the founders and CEO
of Banco Patrimônio (1988-1999), as well as CEO of Chase Business manager, he was the CEO of Indusval Corretora
Manhattan Bank and Executive Officer of J.P. Morgan Chase (1998-2008), Chairman (1986-1991) and Member
(NY) (2000-2003). More recently, Mr. Silva Neto served as co- (1998-2003) of BM&F’s Board of Directors, Member
founder and CEO, in addition to being a shareholder, of CPM of Bovespa’s Board of Directors (1987-1992), CEO of
Braxis (2006-2010), one of the largest Brazilian companies of Banco Indusval (1988-2003), Chairman of the Board
IT services, the control of which was sold to European group of Directors and Managing Director of Banco Indusval
Capgemini in October 2010. Jair is also the founder and (2003-2011). He is currently a Director of the Brazilian
President of Casa do Saber and NGO Parceiros da Educação, Financial and Capital Markets Association (Anbima).
which “adopts” public schools.

Manoel Felix Cintra Neto

CEO CEO
Jair Ribeiro Luiz Masagão Ribeiro

3. 4. 5. 6.
Credit
Trade Finance Commercial Products and Treasury
Local and Corporate and Investor Claudio Cusin
Fundraising
3. Syndications
Financial
Jair Balma
Local
Eliezer R. da Silva
Middle Market
Funding
Institutions
KATIA MORONI Controlling Internal Controls
Vice-President for
Trade Finance, Risk
Funding and Management
Syndications
Served as a Director in institutions such
as Banco Multiplic S.A., BankBoston N.A.,
Multiplic, CVM S.A. and Santander Group from Information
Human Resources
Technology
1994 to 2003, when she took over the position
of International Officer of Banco Indusval.

4. 5. 6.
FRANCISCO ANDRÉ MESQUITA GILBERTO FAIWICHOW
COTE GIL Vice-President for Products, Vice-President for Treasury
Vice-President for Corporate Finance and and Investor Relations Officer
Commercial Division Agricultural Bonds

Regional Director and Executive Officer of Economist, former controller of Cotia Trading, CEO and COO Engineer, served as Financial Officer and Treasury Director of
Banco Crefisul (Citibank) (1972-1990) and of Cotia Argentina (1994-2000), Co-founder and Financial Banco ING (1987-1992); co-founder and treasurer of Banco
Regional Director of Banco BBA, becoming a Officer of Sertrading (2000 – 2006), and Financial Officer of Rendimento, founder of Zoom Asset Management and partner of
shareholder and Executive Officer of BBA and, CPM Braxis (2006-2011), where he was responsible for the Black River Asset Management (Cargill) (2003-2008), in addition
subsequently, of Itaú BBA (1990-2009). acquisition and integration of seven companies. to BRL Capital (2009-2011).

Manoel Felix Cintra Neto

CEO CEO
Jair Ribeiro Luiz Masagão Ribeiro

Credit
Trade Finance
Local and
Commercial Products and
Corporate
Treasury
and Investor
7. Claudio Cusin
Fundraising
Jair Balma
8.Eliezer R. da Silva
Syndications
7. Financial
Institutions
Local
Funding
Middle Market

Controlling Internal Controls
CLAUDIO CUSIN Risk
Credit Officer – Corporate Management


Engineer and economist, he served as credit director
at BankBoston (1988-1997), ING (1997-2002), WestLB Information
Human Resources
Technology
(2005-2006), Banco Standard de Investimentos (2007-
2009) and KdB (2010).

8. 9.
JAIR BALMA
ELIEZER RIBEIRO Local Currency
Credit Officer – Funding Officer
Middle Market

Business Manager, he has worked in the funding divisions of banks
Accountant, he started his career at Serasa - Centralização dos Serviços
Itaú (1983-1987), Multiplic (1987-1990 e 1995-1999), BCN Barclays
de Bancos S.A. (1980-1989), and later worked in credit analysis at banks:
(1995-1999), Multistock (1999-2003), and as of 2003, Banco Indusval
Sudameris Brasil (1989-1992), BMG (1992-1993), and as of 1994, Banco
S.A., where he was appointed as Executive Officer in 2011.
Indusval S.A., being appointed as Executive Officer in 2007.


L
ALEXANDRE ATHERINO
e d b y A l e x a n d re A t h e r i n o a n d L u i z F e r n a n d o
Monteiro de Gouvea since 2009, a team of experienced Alexandre Atherino has worked in the capital markets since
professionals works in the intermediation of transactions in the 1983, when he started his career at Doria & Atherino S/A
stock, commodities, futures exchanges and public bonds at CCVM (1983-1999), playing a major role in the company’s
Indusval & Partners Corretora de Valores, in full synergy with merger with Fator Corretora (1999-2008). At Banco Fator
the Bank’s activities. and Fator Corretora, he served as CEO and was responsible
• Indusval & Partners Corretora de Valores is prepared for several divisions, including Equity Research, Products and
to support the distribution of fixed income bonds, Planning & Strategy.
such as Debentures, Bank Deposit Certificates (CDBs),
Agribusiness Credit Certificates (LCAs), and also
Agribusiness Receivables Certificates (CRAs) and Real
Estate Receivables Certificates (CRIs).
• The Agricultural Commodities Dealing Desk is able to
fastly develop commodity prices hedge transactions, LUIS FERNANDO MONTEIRO DE GOUVEA
mitigating risks of product price variation.
• In line with its Stock Arbitration Desk, BI&P Corretora Luis Fernando Monteiro de Gouvea has over 40 years of

is the market maker for 21 BDRs (Brazilian Depositary experience in the financial market, and built his career at the

R e c e i p t s ) o f U . S . c o m p a n i e s t h a t a re t r a d e d a t brokerage firm Comercial S/A. He also served as COO and main

BM&FBovespa: 3M, Abbot, Apple, Avon, Arcelor Mittal, shareholder of Comercial Asset Management Administração

Bank of America, Citigroup, ConocoPhillips, DuPont, de Recursos S/A (2005-2009). Comercial S/A’s history begins in

Ebay, Eli Lilly, Exxon Mobil, Goldman Sachs, Google, 1971, with the participation of Luis Fernando since 1976, when

Home Depot, J.P. Morgan, McDonald’s, Pfizer, United he became the company’s partner and officer.

Parcel, US Steel and Walmart.
In 2011, despite the highly challenging scenario for brokerage
activities, due to high competitiveness and uncertainties arising
from the global macroeconomic scenario, Indusval & Partners
Corretora has maintained a solid business volume, ensuring an INDUSVAL & PARTNERS CORRETORA IS THE MARKET MAKER OF 21 BDRS
outstanding position in certain segments of BM&FBovespa: (BRAZILIAN DEPOSITARY RECEIPTS) OF U.S. COMPANIES TRADED ON BM&FBOVESPA.
• In the Bovespa segment: 3 rd position in forward
transactions;
• In the BM&F segment: it stands out in transactions with
agricultural commodities, especially live cattle and coffee,
ranking 9th and 12th, respectively, in 2011.


BI&P confir ms its commitment to the best
Corporate Gover nance practices
MIGRATION TO THE CORPORATE GOVERNANCE
LEVEL 2 (NÍVEL 2) LISTING SEGMENT

O n March 1, 2012, BI&P voluntarily adhered to the Listing Rules of BM&FBovespa’s
Corporate Governance Level 2.

Despite having initially listed its shares in Corporate Governance Level 1, BI&P already provided
its shareholders with the same rights as those granted by companies listed in the Novo Mercado,
except for capital consisting in common shares only, making it eligible to integrate the Special
Tag Along and Special Corporate Governance Stock Indexes.

By adhering to Level 2, BI&P also provides its preferred shares with the right to vote in shareholders’
meetings that address certain issues of extreme relevance for the conduction of its business.

Additional voting rights in shareholders’ meetings granted to preferred shareholders, limited
to the following matters:
1. Transformation, incorporation, merger or spin-off of the Company;
2. Approve agreements between the Company and related parties, directly or indirectly,
whenever resolved in a General Meeting;
3. Evaluation of assets used to pay the Company’s capital increase;
4. Choosing a specialized company to determine the Company’s Economic Value, in the event
of cancellation of the register as a publicly-held Company; and
5. Amendment or cancellation of provisions in the bylaws that alter or modify requirements
provided in the basic clauses of the Level 2 Listing Rules.

THE COMPANY’S ADHESION TO CORPORATE
GOVERNANCE LEVEL 2 SHOULD CONTRIBUTE TO
INCREASING THE LIQUIDITY OF BI&P’S SHARES,
IDVL3 BECAUSE IT WILL ATTRACT A DIFFERENT TYPE OF
INVESTOR, ONE THAT VALUES AND IS COMMITTED
TO GOOD CORPORATE GOVERNANCE STANDARDS.
IDVL4


Administrative
Str ucture


Administrative Administrative

Str ucture
Compliance e Internal Controls

Accounting and Controlling

Risk Management

THE BASIS FOR SAFE AND EFFICIENT BUSINESS DEVELOPMENT
Legal

I
Human Resources
n order to guarantee the implementation and development of the new
business strategy, and also its continuity and expansion in a safe and efficient
Information Technology
manner, it is important that the support and control divisions be committed to it.

The divisions that comprise the administrative structure worked hard in 2011
to internalize the culture of excellence, taking over the challenge of becoming a
reference in processes and systems.

These divisions also received additions to their teams and invested in equipment
and systems, including the installation of the new headquarters in the Faria Lima
region, to ensure higher efficiency and proximity to our business partners.

Fundamental issues for the success of our strategy are:
• People Management
• Risk Management

2011 Annual Report

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2011 Annual Report