BANCO DO ESTADO DO RIO GRANDE DO SUL S/A

Transcription

BANCO DO ESTADO DO RIO GRANDE DO SUL S.A.
Corporate Tax Payer’s ID (CNPJ/MF) no 92.702.067/0001-96
NIRE 43300001083
Dear Shareholders:
We present below the necessary information according to CVM Instruction 481, of December 17, 2009,
namely:
1. Proposal for allocation of net income. The retained earnings for the year ended December 31,
2012 totaled R$818.6 million. The proposed distribution comprises the legal, statutory and expansion
reserves and the payment of interest on own capital and/or dividends at amount equivalent to 40% of net
income for the year, and proposed total payout of 40% for 2013;
2. Administrators and Fiscal Council. We have attached the list of the nominees to the Board of
Administration and Fiscal Council indicated by the controlling shareholder;
3. Capital increase proposal. The proposed capitalization for the expansion and statutory reserves,
including the balances of R$246,547,982.19 million and R$3,452,017.81 million related to the respective
accounts, aims at the consolidation of the capital basis necessary to support the Company’s business
expansion. Once the proposal is approved, the capital stock will be increased from R$3.5 billion to R$3.750
billion;
4. Proposed amendment to the Bylaws. The proposal refers to the amendments to articles 4, 5 and
20 of the Company’s Bylaws, which set forth, respectively:
the capital stock value, altered by the use of profit reserves;
the adequacy of the corporate capital, due to the conversion of 18,562 (eighteen thousand,
five hundred and sixty-two) Class A preferred shares into Class B preferred shares that took place between
February 28, 2012 and February 28, 2013;
the inclusion of paragraph 4 in Article 20, to comply with Central Bank of Brazil’s Resolution
no. 4.122 dated August 02, 2012, providing for the mandate of the members of the Board of
Administration.
5. Proposed Management Compensation for the year 2013; and
6. Management comments on the Company’s current condition.
BANRISUL ANNUAL SHAREHOLDERS’ MEETING
MANAGEMENT PROPOSALS
APRIL 30, 2013
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The abovementioned matters will be submitted to the shareholders at the General and Extraordinary
Meetings to be requested by Management, in accordance with the respective terms and other applicable
legal provisions.
Porto Alegre, March 28, 2013.
João Emilio Gazzana
CFO & Investor Relations Officer
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NIRE 43300001083
CVM INSTRUCTION No 481/2009
ALLOCATION OF NET INCOME
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PROPOSAL FOR ALLOCATION OF NET INCOME FOR THE YEAR ENDED 2012, IN ACCORDANCE WITH
ATTACHMENT 9-1-II OF CVM INSTRUCTION No. 481, OF DECEMBER 17, 2009
Allocation of net income
The retained earnings for the year ended December 31, 2012 totaled R$818,590,368.55. The allocation of
profits proposed by management, as well as the prior-year information, is presented below:
Proposal for 2012
Legal Reserve
2011
2010
2009
R$ 40,929,518.43
R$ 45,217,477.16
R$ 37,062,105.82
R$ 27,054,788.55
Statutory Reserve
R$ 204,647,592.14
R$ 226,087,235.81
R$ 185,310,529.08
R$ 135,273,942.74
Expansion Reserve
R$ 246,547,982.19
R$ 274,737,698.01
R$ 225,666,015.24
R$ 163,326,950.60
Interest on Own Capital
R$ 253,387,036.03
R$ 231,641,300.25
R$ 204,858,570.82
R$ 189,025,134.09
R$ 73,078,239.76
R$ 126,665,262.01
R$ 88,644,89.37
R$ 26,414,954.97
Dividends
Interest on own capital / dividends
In accordance with Law no. 9249/95, we paid during the year ended 2012 interest on own capital in the
amount of R$253.3 million, of which R$15.4 million was retained as income tax, being credited on behalf of
the shareholders the net income of R$237.9 million.
The payment of additional dividends proposed to the General Shareholders’ Meeting, in the amount of
R$33.0 million, accounts for the total 40% of the distribution of the adjusted net income for the year ended
2012. All shareholders registered with our company as owners or beneficial owners of our shares on April
30, 2013 will be entitled receive such dividends, and the payment of additional amount should be
completed by May 28, 2013 without any interest or monetary restatement of the declared value. There will
be no distribution of dividends based on profits earned in prior to December 12, 2012. Holders of our
shares do not have the right to receive cumulative dividends.
The payment of interest on own capital resulted in a tax benefit to Banrisul of R$101,354,814.41. The
advanced payment of interest on own capital corresponded to the distribution of 29.06% on retained
earnings in December 2012, which allowed the total tax benefit set forth in Law no. 9,249/95.
For comparison purposes, the tables below set forth the net income for the year ended 2012 and for the
prior years, in addition to the amounts distributed as interest on own capital and dividends, divided also
per type of share:
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In accordance with our Bylaws, the annual mandatory dividend is equivalent to 25% of the net income for
the year, adjusted as determined by applicable law.
At the meeting held on March 12, 2013, our Board of Administration proposed an increase in the
distribution of dividends on net income for the year ended 2013 to 40%, of which 15% as extraordinary
dividends, as set forth in Law no. 6,404/76, which is being submitted to the Annual Shareholders’ Meeting
to be held on April 30, 2013.
The Board of Administration, in a meeting held on May 6, 2008, as set forth in article 79 of our Bylaws,
which determines the payment of interest on own capital and establishes that such payment should be
included in the mandatory minimum dividend, approved the adoption of the policy for the payment of
interest on own capital before the conclusion of each quarter. As from such date, the payments were
performed up to the last business day of the respective quarter.
Our Bylaws allow the payment of interest on own capital as an alternative for the payment of dividends.
The interest on own capital are subject to the variation of the Long-Term Interest Rate (TJLP) on a
proportional basis, and the amount paid, net of income tax, may be included as a portion of the mandatory
minimum dividend.
In accordance with applicable legislation, we are obligated to pay to the shareholders an amount sufficient
to assure that the net amount received as interest on own capital, less the payment of withholding income
tax, plus the value of the dividends declared, is at least equivalent to the value of the mandatory minimum
dividend.
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The payment of interest on own capital to shareholders, resident or not in Brazil, is subject to the
withholding income tax at the following rates:
i. 15% (fifteen percent) applicable to individuals and legal entities in general;
ii. 25% (twenty-five percent) applicable to shareholders resident in tax heaven, that is, a country where the
income tax is not charged or the percentage of which is below 20% (twenty percent), or where the local
legislation sets forth limitations to the disclosure of the shareholders’ composition or the investment’s
holder;
iii. 12.5% (twelve point five percent) applicable to shareholders resident in Japan; and
iv. 0% (zero percent) applicable to shareholders (legal entities) which are able to prove their respective
exemptions.
At the end of the respective financial year, the total dividends proposed is calculated (40% for the year
ended 2012, which is being also proposed for the year 2013), from which value the interest on own capital,
net of income tax already paid, is discounted, being the General Meeting responsible for the resolution of
its respective payment, which payment must be performed within 60 days as from the date such dividends
were declared, except in the event the shareholders determine another payment date; in any case, such
payment must be performed before the end of the fiscal year on which such dividends were declared.
The payment of the dividends for a specific year ended is based on the audited financial statements for the
immediately previous fiscal year, which payment must be performed within 60 days as from the date such
dividends were declared, except in the event the shareholders determine another payment date; in any
case, such payment must be performed before the end of the fiscal year on which such dividends were
declared.
Calculation of mandatory minimum dividend
The shareholders are entitled with the right to receive each year, as mandatory dividend, a percentage
equivalent to 25% of the net income adjusted for the year, less the percentage equivalent to the legal
reserve. The minimum percentage may be supplemented by the extraordinary distribution of dividends, as
approved by the shareholders’ meeting. The mandatory dividend is paid on a full basis.
The net income for the year is decreased or increased (i) 5% to the legal reserve, up to the limit set forth in
the Brazilian Corporate Law, being understood that the company must not create this reserve for the year
when such reserve’s balance, plus the capital reserves, as set forth in paragraph 1, article 182, of Law no.
6,404/76, exceeds 30% (thirty percent) of the capital stock; and (ii) the amount allocated to the creation of
the reserve for contingencies, as proposed by the Executive Board, and the reversal of this reserve for the
prior years.
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The necessary amount for the payment of a fixed dividend of 6% per year to the ordinary shares, Class A
preferred shares and Class B preferred shares will be deducted from the amount allocated to the payment
of the dividends, which amount must be calculated on the value resulting from the division of the capital
stock by the number of shares comprising such capital stock.
Upon payment of dividends equivalent to the abovementioned value to all shares issued by us, regardless
of their type or class, the Class A preferred shares will be entitled with the right to participate in the
distribution of any other dividends and bonus in cash distributed by us, considering the addition of 10% on
the value paid to the ordinary shares and Class B preferred shares.
Legal Reserve
The capital reserves represent the effective additions to the company’s assets originated not from the
income from operations but from shareholders’ or third-parties’ contributions, including governmental
contributions under the form of tax incentives. The legal reserve’s purpose is to assure the company’s
capital stock, which legal reserve must solely be used to offset losses and increase the capital stock.
The proposed allocation of 5% of retained earnings for the year ended 2012 to the legal reserve, in the
amount of R$40,929,518.43, is set forth in Article 193, of Law no. 6,404, of December 15, 1976, which sets
forth the creation of reserves and retained earnings, as well as in accordance with Article 71 of our Bylaws,
which provides for the allocation of said amount to the legal reserve.
Statutory Reserves
The statutory reserves are created as set forth in our Bylaws. In accordance with Article 194, of Law no.
6,404/76, the company may create such type of reserve provided that such company is able to: (i) describe,
accurately and fully, the respective purpose; (ii) set forth the criteria to determine the annual portion of the
net income allocated to create the statutory reserve; and (iii) determine the maximum limit for such
reserve.
Article 77 of our Bylaws sets forth the allocation of up to 25% of the net income for the creation of the
investment reserve, to be invested in IT. The presented proposal suggests an allocation of 25% of the net
income for the year ended 2012 in IT.
The amount allocated to the statutory reserve, in the amount of R$204,647,592.14, was calculated based
on the percentage of 25% on the net income for the year ended 2012, amounting to R$818,590,368.55.
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Expansion Reserve
Amongst the proposal presented by the management bodies at the Shareholders’ Meeting for retained
earnings, as set forth in Article 196 of Law no. 6,404/76, this reserve is denominated differently, such as
income reserve for expansion, reserve for investment plan, among others.
The proposal for the allocation of R$246,547,982.19 as expansion reserve, equivalent to 30.11% of net
income for the year ended 2012, is referred to in the Technical Study 2013/2022 and Capital Budget
2013/2017, as evaluated and approved, in accordance with the Minute no. 847 of our Fiscal Council related
to the meeting held on January 08, 2013, and Minute no. 540 of our Board of Administration related to the
meeting held on January 08, 2013, which were submitted to the Comissão de Valores Mobiliários (CVM –
Brazilian Securities and Exchange Commission) on February 14, 2013.
Allocation of capital stock for investments
In accordance with the long-term strategic plan and considering the equity variations estimated for
2013/2017, the portion of the net income withheld for allocation to investments is indicated below. It is
projected for that period equity variations that amount to R$35.1 billion, comprised of credit assets,
treasury and fixed assets, in accordance with the policy described below.
Capital Stock Budget for investments between 2013 and 2017
R$ Million
2013
2014
2015
2016
2017
Total
Origin
3,811
7,025
7,164
7,950
9,183
35,133
Deposits
4,247
4,829
5,718
6,337
7,244
28,375
(703)
1,900
1,103
1,237
1,494
5,030
267
296
344
377
444
1,728
254
178
141
113
125
811
13
119
202
263
320
917
Allocation
3,811
7,025
7,164
7,950
9,183
35,133
Credit Operations
3,556
4,906
5,112
5,745
6,151
25,470
1
1,942
1,911
2,092
2,907
8,853
178
157
131
103
114
682
76
21
11
11
11
128
Other Funding / Escrow Deposits
Retained Earnings from Prior Years
To be used in Investments
To be used as Working Capital
Marketable Securities
Expansion / Technologial Update
Refurbishments and Expansions
The policy for allocation of funds comprises the following assumptions:
Credit operations
We adopt strict risk management procedures, in order to preserve the company’s selective and
conservative behavior. The goal is to maintain the continuous expansion of the credit portfolio on a proper
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and sustainable manner, as well as assure attractive levels in terms of profitability. It is expected
investments of R$25.5 billion in such assets within five years.
Treasury operations
Due to the estimated credit portfolio expansion, increase of escrow deposits and the Bank’s investments
needs, it is expected that treasury operations increase by R$8.9 billion in the next five years.
Expansion/ Technological modernization
Management intends to maintain and reinforce the investments in the information technology area. This
purpose reflects our pioneer position in the Brazilian market, which position is able to assure a number of
awards and international recognition in the banking technological industry.
Refurbishment and expansion
The modernization and conservation of our physical facilities, in order to provide better working conditions
through refurbishment and expansion of buildings, CFTVs (internal circuits of television), doors able to
detect metals, alarms, thermal conditioning, automatic and electric infrastructure, furniture, layout
modifications and visual modernization.
Equity Investment
In order to leverage customer relationship channels, increase loan portfolio and expand the potential
distribution of financial products and services on a national scale, Banrisul acquired 49.9% of the capital of
the company Credimatone Promotora de Vendas e Serviços S/A, having invested approximately R$40
million in January 2012.
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Minute no. 847
1. Date, time and place: the extraordinary meeting of the Fiscal Council of Banco do
Estado do Rio Grande do Sul S/A (Corporate Tax Payer’s (CNPJ) No. 92.702.067/0001-96
- NIRE no. 43300001083) held on January 08, 2013, at 09:30 am, at the Head Office
Building on Rua Caldas Júnior, 177, 4th floor, Porto Alegre - RS.
2. Verification of attendance: Cláudio Morais Machado – President, André Luiz Barreto de
Paiva Filho – Vice-President; João Victor Oliveira Domingues and Rubens Lahude –
Members; Werner Kohler – Head of Accounting; José Luis Campani Lourenzi – Head of
the Corporate Risk Management Department.
3. Deliberations: Members approved of the 2013/2022 Technical Study, the asset
planning related to tax credits and the Capital Stock budget for investments between
2013 and 2017.
4. Closing: nothing further to discuss, the meeting was closed, these minutes prepared,
read, approved and signed by the present members. Secretary to the meeting: Ms.
Mirian Oliveira Bandeira, analyst at Banrisul’s General Secretariat.
CERTIFICATE
I hereby certify that this document is a true copy of the Minute no. 847 as of January 08, 2013,
drawn in the Book of Minutes of the Meeting of the Fiscal Council of Banco do Estado do Rio Grande
do Sul SA, signed by the following Members: Claudio Morais Machado - President; André Luiz
Barreto de Paiva Filho – Vice-President; João Victor Oliveira Domingues and Rubens Lahude –
Members.
Jorge Irani da Silva,
Secretary-General
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Minute no. 540
1. Date, time and place: the extraordinary meeting of the Board of Administration of
Banco do Estado do Rio Grande do Sul S/A (Corporate Tax Payer’s (CNPJ) No.
92.702.067/0001-96 - NIRE No. 43300001083) held on January 08, 2013, at 02:00 pm,
at the Head Office Building on Rua Caldas Júnior, 177, 4th floor, Porto Alegre - RS.
2. Verification of attendance: Odir Alberto Pinheiro Tonollier – Chairman, Túlio Luiz Zamin
– Vice Chairman; Aldo Pinto da Silva; Dilio Sérgio Penedo; Erineu Clóvis Xavier; Flavio
Luiz Lammel; Francisco Carlos Bragança de Souza and Marcelo Tuerlinckx Danéris –
Members; João Acir Verle – Member of the Audit Comittee; Werner Kohler – Head of
Accounting; Alexandre Pedro Ponzi – Head of IR, Market capital and Governance.
3. Deliberations: 3.1) Interim financial reports for the month of November/2012: upon
presentation made by Mr. Werner Kohler, Board Members examined and approved of
the November’s financial reports, which posted year-to-date net income of R$748.5
million; 3.2) Capital Budget 2013/2017 and Technical Study 2013/2022: the Board of
Administration approved of: a) the Capital Budget from 2013 to 2017, with projected
investments in fixed assets (maintenance, modernization and expansion of facilities
and technological infrastructure) that is linked to business development and results
expectations in the coming years, having being projected retained earnings of up to
R$1,728.0 billion in the same period, of which R$811.0 million for investments and
R$917.0 million for working capital.
4. Closing: nothing further to discuss, the meeting was closed, these minutes prepared,
read, approved and signed by the present members. Secretary to the meeting Mr. Irani
Jorge da Silva, Secretary-General of Banco do Estado do Rio Grande do Sul S.A.
CERTIFICATE
I hereby certify that this document is a true copy of the Minute no. 540 as of January 08, 2013,
drawn in the Book of Minutes of the Meeting of the Board of Administration of Banco do Estado do
Rio Grande do Sul SA, signed by the Board Members Odir Alberto Pinheiro Tonollier - Chairman;
Túlio Luiz Zamin – Vice-Chairman; Aldo Pinto da Silva; Dilio Sérgio Penedo; Erineu Clóvis Xavier;
Flavio Luiz Lammel; Francisco Carlos Bragança de Souza and Marcelo Tuerlinckx Danéris – Board
Members.
Secretary-General
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NIRE 43300001083
ADMINISTRATORS AND FISCAL COUNCIL ELECTION
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INFORMATION ON THE PERSONS INDICATED AS MEMBERS OF THE FISCAL COUNCIL, AS SET FORTH IN
ARTICLE 10 OF CVM INSTRUCTION 481, OF DECEMBER 17, 2009
Item 12.6 of the Reference Form – Administrators and members of the Fiscal Council
12.6.1 Board of Administration
The tables below set forth the candidates to comprise the Board of Administration’s members indicated by
the controlling shareholder (effective members and alternates):
BOARD OF ADMINISTRATION
Name
Age
Occupation
Individual Taxpayer’s ID or Passport No.
Title
Election Date
Initial Office Term
Mandate period
Other duties or functions exercised in the Company
Elected by the controller
Odir Alberto Pinheiro Tonollier
55 years old
Economist
257.977.780-68
Member
April 30, 2013
After approval from the Central Bank of Brazil
Up to the ASM of 2015
Not applicable
Yes
Name
Age
Occupation
Title
Election Date
Initial Office Term
Mandate period
Túlio Luiz Zamin
54 years old
Accountant
232.667.590-87
Member
April 30, 2013
Not applicable
Yes
Name
Age
Occupation
Title
Election Date
Initial Office Term
Mandate period
Aldo Pinto da Silva
74 years old
Agricultural Engineer
008.288.070-00
Member
April 30, 2013
Not applicable
Yes
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Name
Age
Occupation
Title
Election Date
Initial Office Term
Mandate period
Flavio Luiz Lammel
49 years old
Accountant
495.839.729-91
Member
April 30, 2013
Not applicable
Yes
Name
Age
Occupation
Title
Election Date
Initial Office Term
Mandate period
Francisco Carlos Bragança de Souza
57 years old
Civil Engineer
283.918.290-49
Member
April 30, 2013
Not applicable
Yes
Name
Age
Occupation
Title
Election Date
Initial Office Term
Mandate period
Marcelo Tuerlinckx Danéris
42 years old
Professor
511.475.480-72
Member
April 30, 2013
Not applicable
Yes
Name
Age
Occupation
Title
Election Date
Initial Office Term
Mandate period
Erineu Clóvis Xavier
66 years old
Accountant
123.376.680-53
Member
April 30, 2013
Not applicable
Yes
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Name
Age
Occupation
Title
Election Date
Initial Office Term
Mandate period
Olívio De Oliveira Dutra
71 years old
Bank Clerk
050.126.430-20
Nominated Member by minority shareholders
April 30, 2013
Not applicable
Yes
The inauguration of the Board of Administration members elected at the Annual Shareholders’ Meeting of
the Institution held on April 30, 2013 is subject to the approval of the Central Bank of Brazil.
12.6.2 Board of Executive Officers
The election of the Board of Executive Officers’ members is under the responsibility of the Company’s
Board of Administration.
12.6.3 Fiscal Council
The tables below set forth the candidates to comprise the Fiscal Council’s members indicated by the
controlling shareholder (effective members and alternates):
Name
Age
Occupation
Title
Election Date
Initial Office Term
Mandate period
CLÁUDIO MORAIS MACHADO
68 years old
Accountant
070.068.530.-87
President of the Fiscal Council
April 30, 2013
Not applicable.
Yes.
Name
Age
Occupation
Title
Election Date
Initial Office Term
Mandate period
ANDRÉ LUIZ BARRETO DE PAIVA FILHO
44 years old
State Public Servant
563.915.520-53
Member (effective).
April 30, 2013
No.
Yes
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Name
Age
Occupation
Title
Election Date
Initial Office Term
Mandate period
BRUNO LUCIANO RADTKE
44 years old
Economist
488.203.420-49
Member (effective).
April 30, 2013
Not applicable.
Yes.
Name
Age
Occupation
Title
Election Date
Initial Office Term
Mandate period
ANIGER LORENA RIBEIRO DE OLIVEIRA
39 years old
State Public Servant
650.000.668-49
Member (alternate).
April 30, 2013
No.
Yes
Name
Age
Occupation
Title
Election Date
Initial Office Term
Mandate period
FLÁVIO JOSÉ HELMANN DA SILVA
47 years old
Bachelor of Law
472.078.330-91
Member (alternate).
April 30, 2013
No.
Yes
Name
Age
Occupation
Title
Election Date
Initial Office Term
Mandate period
IRNO LUIZ BASSANI
71 years old
Accountant
010.403.400-91
Member (alternate).
April 30, 2013
No.
Yes.
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As the election of the Fiscal Council members is subject to the approval of the Central Bank of Brazil, it is
not possible to estimate the date the candidates elected at the Annual Shareholders’ Meeting of the
Institution to be held on April 30, 2013 will commence their mandate.
Item 12.7 of the Reference Form – Provide information referred to in item “12.6” as regards to the
members comprising the statutory committees, as well as the members comprising the audit, risk,
financial and compensation committees, although these committees are not statutory bodies
The election of the Audit Committee’s members is under the responsibility of the Company’s Board of
Administration.
Item 12.8 of the Reference Form – Summary of the Administrators and Members of the Fiscal Council
a.
Summary of the Administrators and Members of the Fiscal Council
Board of Administration
Odir Alberto Pinheiro Tonollier – Chairman
Mr. Tonollier has a degree in economics from the Catholic University of Pelotas and has completed a
specialization course in finance from the Federal University of Rio Grande do Sul. He has held the following
positions: Parliamentary Assistant at the Legislative Assembly of Rio Grande do Sul (2007 to 2010); Deputy
Secretary of Finance of the State of Rio Grande do Sul (2001 to 2002); Secretary of Finance of the
Municipality of Porto Alegre (1998 to 2000), and of the Audit Court (1985). He has participated as a speaker
in the following courses and conferences: Intergovernmental Fiscal Relations Course at the School of
Finance Administration (ESAF), in Brasília, DF; Experiences in Participatory Budgeting in Porto Alegre; Urban
and City Management Program at the International Seminar of the World Bank Institute in Toronto, Canada
and the Urban and City Management Program at the University of Buenos Aires (2000); Public
Administration and Participative Democracy at the School of the Government of Minas Gerais at the João
Pinheiro Foundation in Belo Horizonte, Minas Gerais; Public Policies and Social Participation at the School
of Finance Administration in Porto Alegre, Rio Grande do Sul (2005); II Encuentro Nacional de Presupuestos
Participativos (ENPP) at Córdoba, Argentina (2009); Participación Internacional - uma Argentina para todos
e Jornada sobre Participación Ciudadana y Gobiernos Locales (2009); Los Desafíos de I Participación
Ciudadana: Estado, Sociedad y Políticas Públicas - Instituto Municipal de Estudios Sociales (IMES) in Zárate,
Buenos Aires.
Túlio Luiz Zamin – Vice-Chairman
Mr. Zamin has a bachelor‘s degree in accounting from the Pontifical Catholic University of Rio Grande do
Sul in 1982 and has held the following positions: Chief of Staff of the Municipal Government of Gravataí
(July 2009 to December 2010); Chief Market Relations Officer at Vipal Financeira S.A. - Crédito,
Financiamento e Investimento (October 2007 to April 2009); Chief Commercial Officer at Paludo
Participações S.A. (May 2007 to April 2009); Municipal Secretary of Finance of São Leopoldo (January 2005
to April 2007); Chief Executive Officer of the Public Transportation and Circulation Corporation of the
Municipality of Porto Alegre (EPTC) (April 2003 to December 2004); Chief Executive Officer of Banco do
Estado do Rio Grande do Sul S.A. (July 2000 to March 2003); Substitute State Finance Secretary, with added
responsibility as Director-General (January 1999 to July 2000); Chief Executive Officer of Companhia Carris
Porto-Alegrense (January 1995 to December 1998); Substitute Finance Secretary of the Municipality of
Porto Alegre (March 1992 to December 1994); Inspection Agent at the State Treasury - Ministry of Finance
APRIL 30, 2013
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of Rio Grande do Sul (March 1996); and Internal Auditor at Farol S.A. Indústria Gaúcha de Farelos e Óleos;
Fiscal Council Member at Petrobrás (March 2003 to January 2011); Vice Chairman of the Board of Directors
of Banrisul (July 2000 to March 2003); Member of the Board of Directors of DETRAN (June 1999 to January
2000); Member of the Fiscal Council of Banrisul(April 1999 to October 1999); Alternate Member of the
Board of Directors of BRDE (April 1999 to March 2001); Alternate Member of the Fiscal Council of Banrisul
S/A Corretora de Valores Mobiliários e Câmbio (March 1988 to April 1991); and Fiscal Council Member at
Distribuidora de Valores do Estado do Rio Grande do Sul (April 1987 to April 1989).
Flavio Luiz Lammel – Member
Mr. Lammel has a bachelor‘s degree in accounting from the University of Passo Fundo (UPF) and has held
the following positions: Managing Director of the Institute of Health and Welfare for Municipal Employees
(ISAM) (2008 to February 2011); Vice President and President of the Federation of Associations of the
Municipalities of Rio Grande do Sul (FAMURS) (2005 to 2006 and 2007 to 2008); Vice President and
President of the Association of Municipalities of Alto da Serra of Botucaraí (AMASBI) (2006 to 2007, 2005 to
2006, and 2007 to 2008); President of the Municipalist Gaúcha Association (AGM) (2003 to 2004); Vice
President of the Association of Municipalities of Alto Jacuí (AMAJA) (2003 to 2004); Mayor of Victor Graeff
(2001 to 2008); and Chief of Staff of the Legislative Assembly of Rio Grande do Sul (1994 to 2000). He has
participated in the following events: IV and V National Seminar on Political, Social and Economic Studies of
the University of Passo Fundo; II Seminar on Political Marketing at ADVB; I Seminar on Public
Administration (AGM), Porto Alegre; Presidency and Internal Control in Public Administration at TCE;
Internal Control Systems study course at AMAJA; and Seminar on new public administration guidelines, and
International Law Seminar at UPF.
Aldo Pinto da Silva – Member
Mr. Silva graduated in Agricultural Engineering from Federal University of Rio Grande do Sul, having also
had the following functions and/or positions: Supervisory Agronomist at the Ministry of Agriculture;
Executive Secretary at Cooperativa Tritícola Palmeirense Ltda.; member of the Deliberative Board of the
Agricultural Society of Rio Grande do Sul; State Deputy from 1974 to 1978, having presented important law
projects, such as: micro-companies and work cooperatives legislation; author of the legislative decree on
forms of government and systems; Federal Deputy for two terms; State Secretary of Agriculture State of Rio
Grande do Sul from 1990 to 1994. Retired from Federal Public Service since 1996.
Francisco Carlos Bragança de Souza – Member
Mr. Souza graduated in Civil Engineering from Universidade Federal do Rio Grande do Sul - UFRGS, with a
doctorate in Environmental Management, professor of IPH/UFRGS, associate professor at LASTRAN UFRGS,
President PDPH/UFRGS, engineering professor at PUC-RS (1987), Coordinator of the Specialized Chamber of
Civil Engineering - CREA-RS (1991-1992), Coordinator of the Specialized Chamber of Civil Engineering CONFEA (1992), Director of CREA-RS, Chairman of the Supervisory Board of the State Utility Company CEEE (1992 -1994), Vice-President of SERGS (1999), Advisor to CONSEMA - RS (2002), Advisor to COMTU City of Porto Alegre (2002), Vice-President of CREA-RS (2005), Director of METROPLAN (2002-2006),
Director of Ports RS - SPH (2007).
Marcelo Tuerlinckx Danéris – Member
Mr. Danéris is graduated in History from the Universidade do Vale do Rio dos Sinos - UNISINOS, with a
master’s in Political Science from the UFRGS. He taught at the Institute of Music Palestrina from 1994 to
1997. He was political adviser in the Câmara Municipal of Porto Alegre from 1998 to 1999, he served as
Parliamentary Secretary in the Câmara Federal in the periods from 1999 to 2000 and in 2009, served in the
office of Alderman in the Câmara Municipal of Porto Alegre from 2001 to 2004 and from 2007 to 2008,
APRIL 30, 2013
19
having served as Leader of the Bench and Leader of the Government in the Board of Aldermen. He was
President of the Partido dos Trabalhadores Municipal Directory in Porto Alegre from 2007 to 2009 and
Secretary in the year of 2010. He is currently Secretary of State of RS, acting as Executive Secretary of the
Conselho de Desenvolvimento Econômico e Social do RS since January 2011.
Erineu Clóvis Xavier – Member
Accounting Degree and MBA in Business Administration from the University of Passo Fundo (UPF);
Additional courses: Strategy and Politics Study Cycles, sponsored by the Association of Graduates from War
Scholl - Passo Fundo (August - November 1990); Internal Audit Seminar (July, 1980); Financial Management
(1978) promoted by the Chamber of Shop Owners and the Commercial and Industrial Association of
Carazinho - RS; VII National Seminar on Law (1977) sponsored by the Center for Legal Studies from
Guanabara, RJ; Intensive Course on Business Administration (1971) sponsored by the University of Passo
Fundo; Leadership Training Course (1965) sponsored by the Institute for Community Development, in Sao
Leopoldo - RS. Professional activities: Owner and Technical Director of Auditter Auditores Associados S/S
Ltda.; Owner and Managing Partner of Stratégya Organizações Contábeis S/S Ltda.; Independent Auditor
and Certified Accountant. Academic activities: Professor of Accountancy at the UPF, since August 1991;
effective Board Member at the University of Passo Fundo Foundation, with office until July 10, 2011, and
Board Member of CRC/RS (regional accounting council), with office until December, 31, 2013.
Olívio de Oliveira Dutra – Nominated Member by minority shareholders
Graduated in Literature from the Federal University of Rio Grande do Sul, former Banrisul employee
(retired), having joined the bank in 1961; chairman of the Union of Banking Workers (1975); Federal Deputy
(1986 to 1988); Mayor of the city Porto Alegre (1988 to 1992); Governor of the state of Rio Grande do Sul
(1998 to 2002); Minister for the Cities (2003 to 2005).
Fiscal Council
Cláudio Morais Machado – Member (effective)
Mr. Machado is graduated in Accounting from Universidade Federal do Rio Grande do Sul, in 1968, with
post graduation in Audit from Universidade Federal de São Paulo, in 1978, post graduation in Finance from
Universidade Federal do Rio Grande do Sul, in 1987, post graduation in Accounting and Audit from
Universidade Fernando Pessoa, Porto – Portugal, in 2001, and also received a master’s degree in Business
Science from Universidade Fernando Pessoa, Porto, Portugal, in 2002. External Control Inspector from the
Accounts Court of the State of Rio Grande do Sul, between 1971 and 1976; Auditor at Central Bank of
Brazil, between 1976 and 1997; Director at IBRACON’s 6th Regional Department, between 2002 and 2008;
principal partner, auditor, auditor, consultant and accounting specialist at Machado & Nedwed Consultores
Associados, successor of CMCS - Auditores, Peritos e Consultores Contábeis S/C Ltda., between 2003 and
2008; Regional Accounting Board’s Director, between 2006 and 2009. He is a professor in the graduation
and post-graduation courses at Faculdade Dom Bosco and a partner and advisor at Quantum Consultoria.
Member of Banrisul’s Fiscal Council since 2003, certified by the Brazilian Institute for Corporate Governance
(IBGC).
André Luiz Barreto de Paiva Filho – Member (effective)
Business Administration and Law and Social Sciences degrees from the Federal University of Rio Grande do
Sul. Professional activities: Fiscal Agent of the State’s Treasury; Technical Advisor in the of Economic and
Fiscal Information Division and in the Regulatory and Tax Proceedings Division; head of tax crimes section;
director of the Public Revenue State Department; representative judge of the Treasury Secretary in the
Administrative Court of Tax Appeals; executive advisor of the Ministry of Finance (March/2003 to
APRIL 30, 2013
20
September/2004); chairman of the Permanent Technical ICMS (sales tax) Committee - Cotepe - ICMS,
technical advisory body of the National Council of TaxPolicy - Confaz (2004-2010); member of the Fiscal
Council of Porto Alegre Urban Trains company - Trensurb (2003-2007); member of the Fiscal Council of
Eletrosul (2005-2005); member of the Board of Administration of Emgea Management Company (20052007); member of the Fiscal Council of the Thermal Electric Power Generation Company (2007-2010); ,
member of the Fiscal Council of the National Social and Economic Development Bank – BNDES (2010-2011);
member of the Fiscal Council of the Data Processing Company of Rio Grande do Sul - Procergs.
Bruno Luciano Radtke – Member (effective)
Bachelor's Degree in Economics from Faculty of Economics, Accounting and Administrative Cachoeira do Sul
- FACECA in 1992. Professional activities as: Accounting Technician; Municipal Secretary of Finance of the f
Cerro Branco city in the periods 1989 to 1992, 1993 to 1996 and 20012 to 2008, Mayor of the Cerro Branco
city (2009-2012). He was President of the Association of Municipal Servants of Cerro Branco - ACERSEB
Assiciação and President of the Municipal Center's Serra - AMCSERRA.
Aniger Lorena Ribeiro de Oliveira– Member (alternate)
Ms. Oliveira obtained a bachelor’s degree in Economics from the Federal University of Rio Grande do Sul in
1997; was a supply supervisor of the Porto Alegre Municipal Secretariat of Industrial Production and
Commerce from August 1997 to December 1998; was a congressional aide from January 1999 to October
1999; was a technical advisor in the State Finance Department from November 1999 to December 2002;
was a strategic planning supervisor at the Porto Alegre Municipality Data Processing Company - PROCEMPA
from April 2003 to December 2004; was a special advisor of the São Leopoldo Municipal Finance Secretariat
office from January to October 2005; was a Rio Grande do Sul State Legislature aide from November 2005
to December 2010; and has been a technical advisor in the State Finance Department since January 2011.
Flávio Hellmann – Member (alternate)
Mr. Hellman graduated in Social Sciences from the Federal University of Rio Grande do Sul and in Law and
Social Sciences from the Catholic University of Rio Grande do Sul. Professional activities: planning adviser at
the Foundation of Social and Communal Education (1989 – 1991); sociologist and community health
supervisor at the Mãe de Deus Hospital (1991 – 1999); general manager and coordinator of the oversight
committee of community action and land tenure in the Porto Alegre Municipal Department of Housing –
DEMHAB (1999 to 2004); professor of socio-historical sciences (2005 to 2010).
Irno Luiz Bassani – Member (alternate)
Mr. Bassani graduated in Accounting from Pontifícia Universidade Católica do Rio Grande do Sul - PUCRS, in
1967. He has extension course in Cost Allocation and Analysis from Pontifícia Universidade Católica do Rio
Grande do Sul-PUCRS, in 1966; extension in Statistical Analysis from Pontifícia Universidade Católica do Rio
Grande do Sul-PUCRS, in 1967. Employee of Banrisul from 1962 to 1997, in the positions of Internal Analysis
Department’s Chief, at the Technical Advisory Department, in 1971; Head at the Financial Planning and
Control Department in 1973; Head at the Research and Planning Department, at the Marketing Advisory
Department in 1974; Substitute Head at the Fund Raising General Management from 1984 to 1986; Head of
the Marketing Department from 1987 to 1990 and in 1995; and Member of Banrisul Ombudsman from
1991 to 1994; Vice-Chairman of the Board of Directors of Banrisul S.A. Arrendamento Mercantil’s from
1996 to 1997. Effective member of Fiscal Council of Banrisul since 2003, certified by the Brazilian Institute
for Corporate Governance (IBGC).
APRIL 30, 2013
21
b.
Legal and administrative plea (including criminal claims) against the administrators and Fiscal
Council’s members
None of the candidates of the Company’s Board of Administration to be indicated by the controlling
shareholder was subject to any legal or administrative plea.
Board of Executive Officers
None of the candidates of the Company’s Board of Executive Officers to be indicated by the Board of
Administration was subject to any legal or administrative plea.
Fiscal Council
None of the candidates of the Company’s Fiscal Council to be indicated by the controlling shareholder was
subject to any legal or administrative plea.
Item 12.9 of Reference Form – Marital relationship, stable relationship or relationship up to the second
degree amongst:
a.
Company’s administrators
None of the members of the Board of Administration has marital relationship, stable engagement or
second degree relatives with any of the administrators of the Company.
b.
(i) Company’s administrators and (ii) administrators of the Company’s subsidiaries, directly or
indirectly controlled
second degree relatives with any of the administrators of the Company’s directly or indirectly controlled
subsidiaries.
c.
(i) Administrators of the Company or its subsidiaries, directly or indirectly controlled and (ii)
Company’s direct or indirect controllers
subsidiaries.
d.
(i) Administrators of the Company and (ii) Administrators of the Company’s direct and indirect
subsidiaries
subsidiaries. Additionally, we inform that none of the candidates for the Fiscal Council of the Bank to be
appointed by the controlling shareholder at the Annual Shareholders’ Meeting to be held in April 30, 2013,
APRIL 30, 2013
22
has marital relationship, stable engagement or second degree relatives with any of the persons mentioned
in Item 12.9, sub items (a), (b), (c) and (d).
Item 12.10 of Reference Form – Relationship of subordination, rendering of services or control over the
last three years amongst the Company’s administrators and:
a.
Subsidiary controlled directly or indirectly by the Company
None of the candidates for the Board of Administration has had any subordination, rendering of services or
control relationship over the last three fiscal years with subsidiaries directly or indirectly controlled by the
Company.
b.
Company’s direct and indirect controller
Name:
Title/Function:
Name:
Title/Function:
Name:
Title/Function:
Name:
Title/Function:
Name:
Title/Function:
Name:
Title/Function:
Name:
Title/Function:
ODIR ALBERTO PINHEIRO TONOLLIER
Individual Tax Payer’s No.
Chairman and State Treasury Secretary
ANDRÉ LUIZ BARRETO DE PAIVA FILHO
Fiscal Council Member and State Treasury Deputy Secretary
FLÁVIO JOSÉ HELMANN DA SILVA
Chief of Staff of the Civil House
JOÃO VICTOR OLIVEIRA DOMINGUES
Executive Coordinator for the High Office of the Governor of the State
ANIGER LORENA RIBEIRO DE OLIVEIRA
Technical Aide at the State Treasury Secretary
FELIPE RODRIGUES DA SILVA
State Treasury Under Secretary
MARCELO TUERLINCKX DANÉRIS
Member of the Board of Administration and Executive Secretary of the State of Rio Grande do Sul
Development Concil
257.977.780-68
563.915.520-53
472.078.330-91
540.197.370-53
650.006.680-49
489.833.570-53
511.475.480-72
Social and Economic
c.
If relevant, the Company’s supplier, client, debtor or creditor, including the subsidiary or parent companies
or subsidiaries of these persons
Not applicable.
APRIL 30, 2013
23
NIRE 43300001083
CAPITAL INCREASE
APRIL 30, 2013
24
CAPITAL INCREASE PROPOSAL, IN ACCORDANCE WITH ATTACHMENT 14 OF CVM INSTRUCTION 481, OF
DECEMBER 17, 2009
Management submits to the shareholders a capitalization proposal in the amount of R$250,000,000.00,
including the balance of R$246,547,982.19 related to the Expansion Reserves and R$3,452,017.81 related
to the Statutory Reserves. The table below sets forth the main information on the proposed capitalization:
CAPITALIZATION EFFECTS
Capital Stock
Capital Reserves
Revenue Reserves
Reserva
Legal
Legal Reserve
Reserva Estatutária
Statutory
Reserve
Reserva para
Expansão
Expansion
Reserve
Equity Adjustments
Equity
BEFORE
3,500,000,000.00
4,510,987.83
1,394,344,361.98
278,578,244.05
869,218,135.74
246,547,982.19
(4,643,849.63)
4,894,211,500.18
AFTER
3,750,000,000.00
4,510,987.83
1,144,344,361.98
278,578,244,05
865,766,117.93
(4,643,849.63)
4,894,211,500.18
The purpose of the proposed capitalization is to consolidate the capital basis necessary to support our
business expansion. Should the capitalization be approved, the balance of the expansion reserve will be
zero and the statutory reserves will amount to R$865,766,117.93.
The Technical Study 2013/2022 and the Capital Budget 2013/2017, approved by the Board of
Administration at the meeting held on January 08, 2013, were structured based on the assumptions of our
business expansion, supported, inclusive, by the shareholders’ equity increase, which, in turn, is affected by
the incorporation of the results generated.
Our business plan for the next years foresees the maintenance of the leadership conquered in the State of
Rio Grande do Sul and the expansion in other markets, which goal requires the extension of the branch
network, specifically in the South region, sharing of the self-service network with other Banks; expansion of
customers’ base, adoption of innovative technologies and improvement of the management model,
planning which require the preservation of our own capital.
In the event the capitalization is approved, there will be no change in the number of shares in our capital
stock.
The proposed capital increase has been appreciated by our Fiscal Council at its meeting on March 13, 2013,
as stated in Minute no. 851, reproduced below.
APRIL 30, 2013
25
Minute no. 851
1.
Date, time and place: the extraordinary meeting of the Fiscal Council of Banco do Estado do Rio Grande
do Sul S/A (Corporate Tax Payer’s (CNPJ) No. 92.702.067/0001-96 - NIRE No. 43300001083) held on
March 13, 2013, at 09:30 am, at the Head Office Building on Rua Caldas Júnior, 177, 4th floor, Porto
Alegre - RS.
2. Verification of attendance: Cláudio Morais Machado – President, André Luiz Barreto de Paiva Filho –
Vice-President; Eduardo Ludovico da Silva, João Victor Oliveira Domingues and Rubens Lahude.
3. Agenda: 3.1) allocation of net income, capital stock increase and dividends – Accounting Unity, and 3.7)
general matters.
4. Deliberations: The Fiscal Council approved the following documents, to be forwarded to the next General
Shareholders' Meeting: a) Allocation of Net Income for the year ended December 31, 2012, in the
amount of R$818,590,368.55 (eight hundred eighteen million, five hundred ninety thousand, three
hundred sixty eight Reais and fifty five cents). The allocation of profits will be done as follows:
Constitution of Legal Reserve, R$40,929,518.43; Constitution of the Statutory Reserve, R$204,647,592.14;
Constitution of the Expansion Reserve: R$246,547,982.19; Interest on Own Capital, R$253,387,036.03;
Dividends Paid, R$40,000,000.00; and Proposed Dividends, R$33,078,239.76; b) capital stock will increase
from R$3,500,000,000.00 (three billion, five hundred million Reais) to R$3,750,000,000.00 (three billion,
seventy hundred fifty million Reais) with the use of the balance of R$246,547,982.19 (two hundred forty
six million, five hundred forty seven thousand, nine hundred eighty two Reais and nineteen cents) from
the Expansion Reserve and R$3,452,017.81 (three million, four hundred fifty two thousand, seventeen
Reais and eighty one cents) from the Statutory Reserve; c) Dividend Distribution: distribution of dividends
for the year 2013 at the percentage of 40% (forty percent).
5. General Matters: 5.1) Ms. Denise Eskeff Coelho updated the Council about the operations with Banco
Cruzeiro do Sul and clarified questions made by the Members; 5.2) the Fiscal Council examined the
proposal of the Board of Administration regarding the payment of interest on capital on 1Q2013, based
on the Distribution of Interest on Own Capital policy, having verified that it is in accordance with current
legislation; 5.3) Mr. Werner Kohler also explained the present development of Banrisul’s Foundation
pension plans, and 5.4) the Member João Victor Domingues proposed convening representatives of
Banrisul’s Marketing Unit for the next meeting of the Fiscal Council, to present the Marketing policy and
the metrics used to measure the results of institutional campaigns.
6. Closing: nothing further to discuss, the meeting was closed, these minutes prepared, read, approved
and signed by the present members. Secretary to the meeting: Ms. Mirian Oliveira Bandeira, analyst at
Banrisul’s General Secretariat.
Cláudio Morais Machado
President
André Luiz Barreto de Paiva Filho
Vice-President
Members
Eduardo Ludovico Silva
João Victor Oliveira Domingues
Rubens Lahude
APRIL 30, 2013
26
Minute no. 542
1.
Date, time and place: the extraordinary meeting of the Board of Administration of Banco do Estado do
Rio Grande do Sul S/A (Corporate Tax Payer’s (CNPJ) No. 92.702.067/0001-96 - NIRE No. 43300001083)
held on March 12, 2013, at 02:00 pm, at the Head Office Building on Rua Caldas Júnior, 177, 4th floor,
Porto Alegre - RS.
2.
Verification of attendance: Túlio Luiz Zamin – Vice Chairman; Aldo Pinto da Silva; Dilio Sérgio Penedo;
Erineu Clóvis Xavier; Francisco Carlos Bragança de Souza; Marcelo Tuerlinckx Danéris and Olivio de
Oliveira Dutra – Members; João Acir Verle – Member of the Audit Comittee; Jone Luiz Hermes Pffeif –
Chief Commercial Officer; Luiz Carlos Morlin – Chief Risk and Compliance Officer; Werner Kohler – Head
of Accounting; José Luis Campani Lourenzi – Head of Corporate Risk Management Unity; Francisco Edgar
Gonçalves Finamor - Controller, and Alexandre Pedro Ponzi – Head of IR, Capital Market and
Governance.
3.
Agenda: Allocation of Net Income; Proposed Capital Increase; Proposed Dividend and Statutory
Reform: The Board approved the following documents, to be submitted to the next Annual
Shareholders’ Meeting: a) Allocation of the Net Income for the year ended December 31, 2012, in the
amount of R$818,590,368.55 (eight hundred eighteen million, five hundred ninety thousand, three
hundred sixty eight Reais and fifty five cents). The proposition distribution covers the following items:
constitution of Legal Reserve, R$40,929,518.43; constitution of Statutory Reserve, R$204,647,592.14;
constitution of the Expansion Reserve, R$246,547,982.19; Interest on Equity, R$253,387,036.03;
Dividends, R$40,000,000.00, and Proposed Dividends, R$33,078,239.76; b) Capital Increase from
R$3,500,000,000.00 (three billion, five hundred million Reais) to R$3,750,000,000.00 (three billion,
seven hundred fifty million Reais) with the use of the balances of R$246,547,982.19 (two hundred forty
six million, five hundred forty seven thousand, nine hundred eighty two Reais and nineteen cents) from
the Expansion Reserve of R$3,452,017.81 (three million, four hundred fifty two thousand, seventeen
Reais and eighty one cents) from the Statutory Reserve; c) Dividend: it is to be maintained the current
policy of dividend distribution of net income, at the percentage of 40% (forty per cent), for the financial
year of 2013, and d) proposed Statutory Reform: 1. Amend the heading of Article 4 to reflect the new
Capital amount, as amended by the use of retained earnings; 2. Amend the heading of Article 5 to
include conversions of shares that took place between February 28, 2012 and February 28, 2013, and 3.
Include paragraph 4 in Article 20, indicating the tenure of office of the members of the Board of
Administration.
CERTIFICATE
I hereby certify that this document is a true copy of the Minute no. 542 as of March 12, 2013, drawn in the
Book of Minutes of the Meeting of the Board of Banco do Estado do Rio Grande do Sul SA, signed by the Board
Members Túlio Luiz Zamin – Vice-Chairman; Aldo Pinto da Silva; Dilio Sérgio Penedo; Erineu Clóvis Xavier;
Flavio Luiz Lammel; Francisco Carlos Bragança de Souza; Marcelo Tuerlinckx Danéris, and Olivio de Oliveira
Dutra – Board Members.
Secretary-General
APRIL 30, 2013
27
NIRE 43300001083
AMENDMENT TO THE BYLAWS
APRIL 30, 2013
28
PROPOSED AMENDMENTS TO THE BYLAWS, IN ACCORDANCE WITH ARTICLE 11, OF CVM INSTRUCTION 481,
OF DECEMBER 17, 2009
Pursuant Article 11 of Comissão de Valores Mobiliários (CVM – Securities and Exchange Commission of
Brazil) Instruction No. 481 of December 17, 2009, we present the proposed amendment to the Company's
Bylaws to be submitted to the Shareholders in general meeting to be held in April 30, 2013.
1. Article 4, to reflect the proposed capital increase of R$250,000,000.00 submitted to the
shareholders at the Shareholders’ Meeting.
Present Wording
Article 4 - The capital stock is R$3,500,000,000.00 (three billion, five hundred million Reais).
Proposed Wording
Article 4 - The capital stock is R$3,750,000,000.00 (three billion, seven hundred fifty million Reais).
2. Article 5, to adequate the Corporate Capital, due to the conversion requested by shareholders of
18,562 (eighteen thousand, five hundred sixty two) Class A preferred shares into Class B preferred shares
that took place between February 28, 2012 and February 28, 2013, in observance to § 4º, Article 5 of our
Bylaws.
Present Wording
Article 5 - The capital stock is divided into 408,974,477 (four hundred and eight million, nine hundred
and seventy-four thousand, four hundred and seventy-seven) shares without par value, of which
205,043,374 (two hundred and five million, forty-three thousand, three hundred and seventy-four) are
common shares, 3,560,939 (three million, five hundred sixty thousand, nine hundred and thirty-nine)
are class A preferred shares and 200,370,164 (two hundred million, three hundred and seventy
thousand, one hundred and sixty-four) are class B preferred shares, being class A preferred shares
convertible into common shares or class B preferred shares.
Proposed Wording
Article 5 - The capital stock is divided into 408,974,477 (four hundred eight million, nine hundred
seventy four thousand, four hundred seventy seven) shares without par value, of which 205,043,374
(two hundred five million, forty three thousand, three hundred seventy four) are common shares,
3,542,377 (three million, five hundred forty two thousand, three hundred seventy five) are class A
preferred shares and 200,388,726 (two hundred million, three hundred eighty eight thousand, seven
hundred twenty six) are class B preferred shares, being class A preferred shares convertible into
common shares or class B preferred shares.
APRIL 30, 2013
29
3. To include a new paragraph in Article 20, the paragraph 4, to comply with Central Bank of Brazil’s
Resolution no. 4,122 of August, 02, 2012.
Present Wording
Not applicable.
Proposed Wording
Article 20 Paragraph 4 - The term of office of the members of the Board of Administration will extend until
the inauguration of their substitutes.
In compliance with Item I of Article 11 of Comissão de Valores Mobiliários (CVM – Securities and Exchange
Commission of Brazil) Instruction no. 481, of December 17, 2009, it is reproduced below the compared
version containing the Bylaws changes that will be submitted to the shareholders of Banrisul in the Annual
Shareholders’ Meeting to be held on April 30, 2013.
PRESENT WORDING
PROPOSED WORDING
CHAPTER I
CHAPTER I
Nature, Duration and Head Office
Nature, Duration and Head Office
Section I
Nature
Article 1 - The BANCO DO ESTADO DO RIO GRANDE DO SUL S/A, in
short ‘BANRISUL’, is a mixed-capital company constituted as a
Corporation (Sociedade Anônima) on September 12, 1928, according to
State Law 459 of June 18, 1928, regulated by State Decrees 4079, 4100,
4102 and 4139 of June 22, July 21, July 26, and September 6, 1928,
respectively.
Paragraph 1 - As per State Law 6223 of June 22, 1971, the
interest held by the state of Rio Grande do Sul in the Bank´s capital
should in no case be lower than 51% (fifty-one percent), of the total
voting shares.
Paragraph 2 - The Company has undergone restructuring
according to these Bylaws, by which it has adopted the provisions of
Federal Law 6404 of December 15, 1976.
Paragraph 3 - With the admission of the Company in the special
listing segment named Level 1 of Differentiated Corporate Governance
of the Brazilian Securities and Derivatives Stock Exchange BM&FBOVESPA, the Company, its Shareholders, Administrators and
members of the Fiscal Council are subject to the provisions of the
Listing Rules of the Level 1 of Differentiated Corporate Governance.
Section I
Nature
Section II
Duration
Article 2 - The duration of the company is indefinite, only depending on
the validity of the operating license.
Section II
Duration
Section III
Head Office and Jurisdiction
Article 3 - The capital of the state of Rio Grande do Sul is the domicile
of the Company for all legal purposes, and the place of the Company´s
head office.
Sole paragraph - The Company may, based on the Executive
Section III
Head Office and Jurisdiction
Not Altered
Not Altered
Not Altered
Not Altered
Not Altered
Not Altered
Not Altered
APRIL 30, 2013
30
Board´s initiatives, open or close branches or representative offices in
any place in Brazil or abroad, after obtaining authorization from
financial authorities.
CHAPTER II
CHAPTER II
Capital and Shares
Capital and Shares
Section I
Capital
Article 4 - The capital stock is R$3,500,000,000.00 (three billion, five
hundred million Reais).
Paragraph 1 - The Annual General Meeting that decides on
capital increase through payment will fix the respective price and
payment terms.
Paragraph 2 - The subscriber in arrears with regard to payment
of capital will be subject to an adjustment of his debt based on the IGPDI (General Price Index - Internal Availability) or any other index in its
place, for the period in arrears, plus interest at 12% (twelve percent)
per annum and a fine of 10% (ten percent). The adjustment will be
made within the legal limits applicable to the case.
Paragraph 3 - The capital stock may be increased, as laid down
by Article 168 of Law 6404/76, up to the limit of 600 million shares,
within the limit for each class of shares established by legislation and
regulations, through a decision of the Board of Directors and
independent of any amendment to the Bylaws. The Board of Directors
will fix the price and the number of shares to be issued, the period and
the conditions for payment.
Paragraph 4 - The issue of shares to increase the capital, through
sale in the stock exchange or through public subscription, may exclude
the preemptive rights, or reduce the period for exercising them, under
Article 171 of Law 6404/76.
Section I
Capital
Article 4 - The capital stock is R$3,750,000,000.00 (three billion,
seven hundred fifty million Reais).
Section II
Shares
Section II
Shares
Article 5 - The capital stock is divided into 408,974,477 (four hundred
and eight million, nine hundred and seventy-four thousand, four
hundred and seventy-seven) shares without par value, of which
205,043,374 (two hundred and five million, forty-three thousand, three
hundred and seventy-four) are common shares, 3,560,939 (three
million, five hundred sixty thousand, nine hundred and thirty-nine) are
class A preferred shares and 200,370,164 (two hundred million, three
hundred and seventy thousand, one hundred and sixty-four) are class B
preferred shares, being class A preferred shares convertible into
common shares or class B preferred shares.
Paragraph 1 - Both the common shares and the preferred shares
will always be registered shares.
Paragraph 2 - Each common share, without restriction, will
correspond to one vote at the general meetings of the shareholders.
Paragraph 3 - The registered common shares and registered
preferred shares will be maintained as book entry shares without issue
of certificates, in depository accounts in the name of their holders in
the Company itself, which shall bear the legal depository charges.
Paragraph 4 - The class A preferred shares will be convertible
into common or class B preferred shares as established by Article 8
(eight) below. The common shares and class B preferred shares are not
convertible.
Paragraph 5 - The state of Rio Grande do Sul, the controlling
shareholder is prohibited from selling the class A preferred shares
owned by it. However, it can convert them according to Paragraph 4 of
this article.
Article 5 - The capital stock is divided into 408,974,477 (four
hundred eight million, nine hundred seventy four thousand, four
hundred seventy seven) shares without par value, of which
205,043,374 (two hundred five million, forty three thousand, three
hundred seventy four) are common shares, 3,542,377 (three
million, five hundred forty two thousand, three hundred seventy
five) are class A preferred shares and 200,388,726 (two hundred
million, three hundred eighty eight thousand, seven hundred
twenty six) are class B preferred shares, being class A preferred
shares convertible into common shares or class B preferred shares.
Article 6 - Upon authorization from the Board of Directors, the Bank
may buy back its shares for cancellation or to hold them in treasury in
order to sell them at a future date.
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Paragraph 1 - The acquisitions mentioned in this article will not
reduce the capital and will be made using funds that shall not exceed
the available profit balances or reserves in the last balance sheet.
Paragraph 2 - The acquisitions cannot be of the shares owned by
the controlling shareholder or shares not yet paid up.
Paragraph 3 - The Bank cannot hold in treasury more than 5%
(five percent) of each class of outstanding shares issued by it.
Paragraph 4 - Acquisitions authorized by this article shall strictly
comply with the norms laid down by the Brazilian Securities and
Exchange Commission in this regard.
Article 7 - Preferred shares, except under the provisions of Paragraph 2
of Article 20 (twenty) and Article 39 (thirty-nine) of these Bylaws, shall
not have voting rights.
Article 8 - The class A preferred shares shall confer on their holders the
following rights: (i) priority in the receipt of fixed non-cumulative
preferential dividend at 6% (six percent) per year, calculated on the
result of dividing the capital amount by the number of shares
comprised in it; (ii) the right to a share, after the common and class B
preferred shares are paid, in the dividend equal to that paid to such
shares, in any other dividends or bonuses in cash distributed by the
Company, under the same conditions as the common and class B
preferred shares, with an increment of 10% (ten percent) on the
amount paid to such shares; (iii) share in the capital increases resulting
from capitalization of reserves under the same conditions as common
and class B preferred shares; (iv) priority in the repayment of capital,
without premium; (v) the right guaranteed by Article 80 (eighty) of
these Bylaws; (vi) convertibility into common or class B shares at any
time, at the discretion of the shareholder, through a notification to the
Company.
Article 9 - the class B preferred shares confer upon their holders the
following rights: (i) share in the capital increases resulting from
capitalization of reserves under the same conditions as common and
class A preferred shares; (ii) priority in the repayment of capital,
without premium; and (iii) the right guaranteed by Article 80 (eighty) of
these Bylaws. Class B preferred shares are not convertible.
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CHAPTER III
CHAPTER III
Corporate Purpose, Operations and Organization
Corporate Purpose, Operations and Organization
Section I
Corporate Purpose
Section I
Corporate Purpose
Article 10 - The purpose of the Company is to carry out borrowing,
lending and other ancillary operations inherent to the respective
authorized portfolios (commercial, real estate lending - 2nd to 8th
Regions, and credit, financing and investment, leasing and development
and investment portfolios), including exchange operations, in
accordance with legal provisions and regulations.
Sole paragraph - Within the norms established by the Brazilian
Central Bank and these Bylaws, the Bank may own interest in other
companies.
Section II
Operations
Article 11 - The Company´s operations will cover all the banking
activities compatible with the nature of a multiple-service bank, which
are or will be granted to it by the monetary authorities and may be or
should be implicit or understood within the corporate objectives.
Article 12 - The Company may acquire the property necessary for its
installations or those for its expansion, within the appropriate technical
limits and, exceptionally, those that are suitable to safeguard its
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Section II
Operations
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interests.
Sole paragraph - Assets acquired from those responsible for
loans with difficult or doubtful settlement, when not of use to the
Company, shall be sold at the moment and manner established by the
Executive Board in compliance with the pertinent legal and normative
provisions.
Section III
Organization
Article 13 - To carry out its operations, the Bank shall have as many
Advisory Services and Units necessary for carrying out its corporate
objectives.
Paragraph 1 - The Company shall have a Department dedicated
to rural lending, which will centralize all types of rural lending
operations.
Paragraph 2 - Rural lending operations with funds allocated or
granted by the shareholder, the state of Rio Grande do Sul, are
restricted to persons domiciled in the same state.
Article 14 - Long-term operations use funds from BNDES (the Brazilian
development bank) on lendings and are limited to 80% (eighty percent)
of the Company´s net equity.
CHAPTER IV
Management of the Company
Article 15 - The management of the Company, in the manner envisaged
in these Bylaws, rests with the Board of Directors and the Executive
Board.
Paragraph 1 - Members to be elected to the management bodies
must be natural persons resident in Brazil, who have university level
education and senior management experience in financial institutions
of the National Financial System or other companies or, if employees of
the Bank, have served as the Superintendent of the Unit or the Region
or in other equivalent function.
Paragraph 2 - Names of the nominees for the Executive Board
should first be approved by the Legislative Assembly of the state of Rio
Grande do Sul.
Paragraph 3 - Members of the Board of Directors and the
Executive Board shall take office after signing the terms of consent in
the Company´s records, with the waiver of guarantee of management,
and only after signing the Statement of Consent From Senior Managers
according to the regulations governing Level 1 corporate governance
practices of the São Paulo stock exchange, and the regulation relating
to the Market Arbitration Panel.
Article 16 - Members of the Board of Directors or the Executive Board
cannot exercise any identical function in financial institutions in which
the Bank or the state do not own direct or indirect shareholding
control.
Article 17 - The following cannot jointly exercise the functions of the
member of the Board of Directors or the Executive Board: a) parents or
children, adoptee or adopted, collateral relatives and others up to the
second degree by civil law; b) persons belonging to the same Company,
except if it is a Sociedade Anônima; c) two or more executive officers,
managers or equivalent positions of the same Company.
Paragraph 1 - In case of impediments and incompatibilities
above, those with the highest number of votes will assume office.
Paragraph 2 - If voting is tied, the oldest nominee will be
considered elected and, if the age is the same, decision will be by draw
of lots.
Article 18 - For each session they take part, members of the Board of
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Section III
Organization
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CHAPTER IV
Management of the Company
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Directors shall receive remuneration approved for them, in each fiscal
year, by the Annual General Meeting convened for the purpose of
Article 132 (one hundred thirty-two) of Law 6404 of December 15,
1976.
Article 19 - The Annual General Meeting convened for the purpose of
Article 132 (one hundred thirty-two) of Law 6404 of December 15, 1976
will set the total monthly or annual remuneration of the Executive
Board members.
Paragraph 1 - The General Shareholders’ Meeting, in the fiscal
years during which mandatory dividend and employees’ profit sharing
are paid, may grant bonuses to members of the Bank‘s Board of
Executive Officers, provided that the sum does not exceed 50% (fifty
percent) of the Board members’ annual salary, nor five thousandths of
the profits (Article 190 of Law No. 6404/76), whichever limit is lower.
Paragraph 2 - Members of the Board of Executive Officers who
are also members of the Board of Administration shall not accumulate
the remuneration of each of the functions and shall be entitled only to
the remuneration of the Executive Officer.
CHAPTER V
Board of Directors
Section I
Composition
Article 20 - The Board of Directors, composed of at least five and at
most nine members, shall be elected for a unified term of two years,
with the possibility of reelection, by the Annual General Meeting which
may at any time remove them.
Paragraph 1 - Members of the Board of Directors shall be elected
without specific designation and the controlling shareholder, the state
of Rio Grande do Sul, shall name, among others, the Chairman who
must compulsorily be the State Finance Secretary, and the Vice
Chairman.
Paragraph 2 - In the election of members of the Board of
Directors, excluding the controlling shareholder, the majority of
shareholders, in a separate voting session at the Annual General
Meeting, shall have the right to vote in the following manner: (i)
owners of common shares, provided they represent at least 15%
(fifteen percent) of the Company´s voting capital, and (ii) owners of
preferred shares, provided they represent at least 10% (ten percent) of
the Company´s voting capital. If neither the holders of voting shares nor
the owners of preferred shares make up the quorum required above,
they can choose to add up their shares to jointly elect one member of
the Board of Directors, provided they jointly represent at least 10% (ten
percent) of the Company´s capital stock.
Paragraph 3 - The Regional Economic, Accounting and
Administration Councils are assured of the right to indicate a
representative on the Board of Directors, in compliance with the
conditions of Paragraph 1 of Article15 (fifteen) of these Bylaws. The
indication shall be done through a list in triplicate presented to the
controlling shareholder, with each Council having the option to indicate
a name. The controlling shareholder may select one among the
nominees.
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CHAPTER V
Board of Directors
Section I
Composition
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Paragraph 4 - The term of office of the members of the
Board of Administration will extend until the inauguration of their
substitutes.
Article 21 - At least 20% (twenty percent) of the Board of Directors
should be Independent Members, as laid down by Paragraph 2 below.
Paragraph 1 - If, applying the percentage referred to in the first
paragraph of this article results in a fraction, the number should be
rounded off: (i) to the immediately higher number if the fraction is
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equal to or greater than 0.5, or (ii) immediately lower number if the
fraction is lower than 0.5.
Paragraph 2 - For the purpose of these Bylaws, an “Independent
Director” is one who: (i) has no relation with the Company, except
interest in the capital; (ii) is not the controlling shareholder, spouse or
related up to the second degree, or is not or has not been, in the past 3
(three) years, related to the Company or any entity related to the
controlling shareholders (persons related to public educational and/or
research institutions are excluded from this restriction); (iii) has not
been in the past 3 (three) years, employed or was an Executive Officer
of the company, the controlling shareholders or the holding company
of the company; (iv) is not the supplier or buyer, directly or indirectly,
of the Company´s products and/or services at a volume that implies
loss of autonomy; (v) is not the employee or manager of the company
or entity offering or requiring the Company´s services and/or products;
(vi) is not the spouse or relative up to the second degree of any
manager of the Company; and (vii) does not receive any other
remuneration from Company than as the board member (cash earnings
from interest in the capital are excluded from this restriction).
Paragraph 3 - Also will be considered Independent Members
those elected according to Paragraphs 4 and 5 of Article 141 of Law
6404/76 and Paragraph 2 of Article 20 of these Bylaws, provided they
meet, in the latter case, the provision of Paragraph 2 of this Article.
Section II
Replacement
Article 22 - In case of vacancy on the Board of Directors, the Board,
after consulting the controlling shareholder, the state of Rio Grande do
Sul, shall designate the replacement to exercise the function till the
next Annual General Meeting. The vacancy shall be filled with voting of
the minority shareholders at the first annual general meeting.
Sole paragraph - Resignation with the permission of the Board of
Directors will not result in a vacancy.
Article 23 - The Chairman of the Board of Directors, in case of vacancy,
absence or temporary impediments, shall be replaced by the Vice
Chairman.
Sole paragraph - The vacancy, absence or temporary
impediment referred to by this article do not depend on notice or
notification to third parties and can be done merely by the replacement
signing the actions that the officer being replaced is authorized to carry
out.
Section III
Meetings
Article 24 - The Board of Directors shall meet ordinarily at least once
per month and extraordinarily, when required. Decisions shall be valid
when at least five of its members, one of them the Chairman or his/her
statutory replacement, are present.
Article 25 - The decisions of the Board of Directors shall be taken by
majority vote of those present at the meeting. Sole paragraph - If a
decision is tied, the Chairman of the Board of Directors or his/her
statutory replacement, besides the personal vote, shall have the casting
vote.
Article 26 - The work and decisions of the Board of Directors shall be
recorded in the Company´s books by means of minutes, which may be
summarized, registering the events, matters discussed, decisions taken,
disagreement, protests, declaration of vote and other necessary items,
signed by the Chairman and other board members present.
Paragraph 1 - For the minutes to be valid, it is enough if the
number of members of the Board of Directors present needed to
constitute the majority required for decision making, sign them.
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Section II
Replacement
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Section III
Meetings
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Paragraph 2 - The documents or proposals submitted at the
meeting and the declarations of vote, protest and other papers
recorded in the minutes shall be numbered and filed at the Company
within six months after the term of office of the Board of Directors.
Paragraph 3 - The Board of Directors, through two or more of its
members present at the meeting, may, at the request of the member
interested, authenticate a specimen or copy of the proposals,
declarations of vote, disagreement or protest made.
Paragraph 4 - From the minutes of the Board of Directors’
meetings, which contain decisions affecting third parties, certificates
are extracted with a summary of the facts and the transcription of the
decisions taken, which will be filed with the Board of Trade and
published according to legislation. These certificates can be validated
merely by the signature of the Chairman of the Board of Directors or
his/her statutory replacement.
Section IV
Powers
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Section IV
Powers
Article 27 - The Board of Directors is empowered to:
1. appoint the Company´s executive officers and confer on them
their respective duties in accordance with the provisions of these
Bylaws;
2. remove the Company´s executive officers in consultation with
the controlling shareholder, the state of Rio Grande do Sul;
3. lay down the general business guidelines of the Company, in
compliance with the governmental strategy of the controlling
shareholder;
4. monitor the activities of the Executive Officers, examine at
anytime the Company’s books and documents, request information
about contracts signed or are about to be signed, and any other acts;
5. decide on convening the general meeting of the shareholders
when they deem appropriate or in the case of Article 132 (one hundred
thirty-two) of the Lei de Sociedades por Ações;
6. opine on the management´s report and accounts, approving
the allocation of net income;
7. opine on the provision of guarantee by the Company, when
the amount is more than five percent (5%) of the Company´s net equity
in the last half-yearly balance sheet;
8. fix, annually, the sum of subsidies and grants to be distributed
by the Executive Board, in compliance with the provisions of these
Bylaws;
9. approve the plans and promotional budgets of the Company
and its subsidiaries;
10. appoint and remove the independent auditors, in compliance
with these Bylaws;
11. organize and amend the Bylaws of the Board of Directors;
12. set the maximum debt limit per client, including business
group, as a percentage of the Bank´s net equity, while the Executive
Board may approve operations up to the limit of 3% of aforementioned
net equity;
13. authorize the Company to buy back its shares under the
terms of Article 6 (six) of these Bylaws, for cancellation or to be held in
treasury for sale at a future date.
14. establish annually the marketing budget based on technical
criteria for market monitoring and control, and focused on marketing
and institutional strategy, on building and in strengthening customers
and community relationship.
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Article 28 - The Chairman of the Board of Directors is empowered to:
1. convene and chair the meetings of the Board of Directors and
coordinating their activities;
2. convene the Bank´s Annual General meetings and establish
their respective agenda;
3. comply with and ensure that the provisions of these Bylaws,
the decisions of the Board of Directors and the General Meetings are
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complied with;
4. use the casting vote in case of tied votes at the Board of
Directors’ meetings;
5. authenticate copies or certificates of minutes and other
documents of the Board of Directors;
6. name relaters, where applicable, to study and forward the
matters under the power of the Board of Directors for voting.
Sole paragraph - In the hypotheses mentioned by Article 23
(twenty-three) of these Bylaws, the Vice Chairman of the Board of
Directors is empowered to replace the Chairman and validly exercise
the actions mentioned in the first paragraph of this article.
CHAPTER VI
Executive Board
Section I
Composition
Article 29 - The Company shall have an Executive Board, with executive
functions, composed of a Chief Executive Officer, a Deputy Chief
Executive Officer and up to six executive officers, whether shareholders
or not, resident in Brazil, who meet the requirements of Article 15
(fifteen) of these Bylaws.
Paragraph 1 - One of the Executive Officers shall exclusively be in
charge of the Asset Management Department under the regulations of
the National Monetary Council and the Brazilian Securities and
Exchange Commission, and will not be accountable for other activities
affecting the Department.
Paragraph 2 - One of the Executive Officers shall mandatorily be
appointed as Investor Relations Officer, position that can be combined
with other functions of the Board, pursuant to regulations issued by the
Comissão de Valores Mobiliários (CVM - Securities and Exchange
Commission of Brazil).
Paragraph 3 - One of the Executive Officers shall exclusively act
as the Information Technology Officer.
Article 30 - The Chief Executive Officer, Deputy Chief Executive Officer
and other members of the Executive Board shall be elected or reelected
for a term of three years, by the Board of Directors, subject to the
following conditions:
a) The Chief Executive Officer and the Deputy Chief Executive
Officer will necessarily be chosen from the Board of Directors;
b) One of the members of the Executive Board must compulsorily
be selected from among employees with more than ten years of service
provided directly to the Bank and who meet the requirements of Article
15 (fifteen) of these Bylaws;
c) The positions of Chairman of the Board and Chief Executive
Officer or CEO of the Company must not be exercised by the same
person.
d) The positions of Deputy Chief Executive Officer and member
of the Board of Directors may be accumulated with the functions of the
Executive Board.
Article 31 - The Board of Directors shall assign special designations to
the Executive officers, according to the functions it assigns them.
Section II
Replacement
Article 32 - In case of any vacancy on the Executive Board, the Board of
Directors shall name the replacement to exercise the function till the
end of the term subject to item “b” of Article 30 (thirty) mentioned
above, where applicable.
Sole paragraph - Any absence/termination with the permission
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CHAPTER VI
Executive Board
Section I
Composition
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a) The Chief Executive Officer and the Deputy Chief Executive
Officer will necessarily be chosen from the Board of Directors;
b) One of the members of the Executive Board must
compulsorily be selected from among employees with more than
ten years of service provided directly to the Bank and who meet the
requirements of Article 15 (fifteen) of these Bylaws;
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Section II
Replacement
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of the Executive Board shall not constitute a vacancy.
Section III
Meetings
Section III
Meetings
Article 33 - The Executive Board shall ordinarily meet at least once a
week and, extraordinarily, when required. Decisions are valid if at least
four of its members are present.
Not Altered
Article 34 - Provisions of Section III of Chapter V of these Bylaws, with
the adaptations specific to this organ, are applicable to the Executive
Board meetings.
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Section IV
Powers
Section IV
Powers
Article 35 - The powers and duties of the Executive Board are:
1. to comply with and ensure that the basic laws of the Bank, the
decisions of the Annual General Meeting and the Board of Directors´
meetings are complied with;
2. to propose to the Board of Directors the general direction of
the business and operations of the Bank;
3. to organize the internal service regulations of the Bank and
amend them when required;
4. to authorize the provision of guarantees, sale of assets and the
transfer or renunciation of rights, subject to the pertinent provisions in
these Bylaws;
5. to establish general and uniform norms for appointment,
promotion, punishment, dismissal, leave, absence, salaries, bonuses
and other benefits for employees not in positions of trust, delegating
authority for execution of these norms;
6. to create, modify and remove positions or functions of trust,
setting for them the respective commissions and benefit amounts,
appoint, punish, dismiss, grant leave to the holders of such positions or
functions;
7. to distribute and invest the profits while respecting, within the
limits of the earnings of each half-year, the compulsory requirement of
distribution of fixed and minimum dividends laid down by these Bylaws
and other legal norms and regulations about dividends in kind;
8. To set up and close down branches and representative offices
in any place in Brazil or abroad;
9. to prepare and review the strategic plan annually, indicating
the principal guidelines about management policy, human resources,
investments and technology, products and services.
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Article 36 - The Chief Executive Officer is empowered:
1. to coordinate the Executive Board meetings, exercising, in
addition to his vote, the casting vote in case of a tie in decisions;
2. to ensure that the decisions taken at the Meeting of the
Shareholders, the Board of Directors and the Executive Board are
carried out, and ensure that the Bank´s basic principles are complied
with;
3. to represent the Bank, actively and passively, in court or in its
relations with third parties, to contract loans, sell assets and properties,
waive and renounce rights;
4. to constitute the Bank´s attorneys-in-fact, specifying in the
instrument the actions or operations they can practice and the duration
of such power of attorney which, in case of judicial power of attorney,
may be for an indefinite period;
5. to designate the Bank´s representatives in court;
6. to present the annual report on the Bank´s operations and
those of the Executive Board, illustrated with the respective financial
statements, to the Annual General Meeting, after consulting the Board
of Directors on such documents;
7. to exercise other functions conferred on him by the Board of
Directors;
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8. appoint and remove the Ombudsman.
Article 37 - In case of vacancy, absence or temporary impediment of
the Chief Executive Officer, the Deputy Chief Executive Officer is
empowered to replace him and validly exercise, under the following
hypotheses, the actions laid down in the previous article.
Paragraph 1 - When the Deputy Chief Executive Officer, under
the hypotheses envisaged by this article, is unable to replace the Chief
Executive Officer, any of the Executive Officers, who have or do not
have any specific designation assigned, temporarily or permanently,
can replace the Chief Executive Officer, validly carrying out the actions
authorized for the Chief Executive Officer, on such occasions.
Paragraph 2 - The vacancy, absence or temporary impediment
referred to by this article do not depend on notice or notification to
third parties and can be done merely by the replacement signing the
actions that the officer being replaced is authorized to carry out.
CHAPTER VII
Fiscal Council
Section I
Composition
Article 38 - The Company shall have a permanent Fiscal Council
composed of five members and an equal number of alternate members
elected annually by the Annual General Meeting. Members to be
elected to the Fiscal Council must be natural persons resident in Brazil,
who have university level education and senior management
experience in financial institutions of the National Financial System or
other companies.
Article 39 - Owners of preferred shares without voting rights may, in
separate voting, elect one member and his alternate to the Fiscal
Council; minority shareholders shall have equal rights. The Regional
Economic, Accounting and Administration Councils are assured of the
right to indicate a representative, through a list provided in triplicate,
for one of the vacancies in the Fiscal Council reserved for the majority
shareholder. The controlling shareholder may select one among the
nominees.
Paragraph 1 - The members of the Fiscal Council elected by the
minority shareholders and by holders of preferred shares, in case of
absence or impediment, may be replaced only by their respective
alternate members.
Paragraph 2 - Other members of the Fiscal Council, in case of
absence or impediment, shall be replaced by any alternate member.
Paragraph 3 - Members of the Fiscal Council should sign the
Statement of Consent laid down by the Regulations of the Market
Arbitration Panel.
Article 40 - In addition to the persons referred to in Paragraph 2 of
Article 162 (one hundred sixty-two) of Law 6404 of December 15, 1976,
those, by themselves or in relation to the Executive Officers or the
members of the Board of Directors, meeting the conditions laid down
by Article 17 (seventeen) of these Bylaws, cannot be elected to the
Fiscal Council.
Section II
Functioning
Article 41 - The Fiscal Council shall ordinarily meet once a month and
extraordinarily when required. Decisions are valid if taken by at least
three of its members present.
Article 42 - With the specific adaptations to its functioning, the
meetings of the Fiscal Council are also governed by Section III Chapter V
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CHAPTER VII
Fiscal Council
Section I
Composition
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Section II
Functioning
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of these Bylaws.
Section III
Powers
Article 43 - The Fiscal Council, in addition to the duties and powers
given by it by the Lei de Sociedades por Ações, must meet when
convened by the Board of Directors or the Executive Board and submit
a report on the matters assigned to it.
Section IV
Remuneration
Article 44 - The monthly remuneration of members of the Fiscal Council
shall be fixed by the Annual General Meeting and cannot be lower, for
each member, than one tenth of the average remuneration of each
Executive Officer.
Sole Paragraph - The alternate member of the Fiscal Council is
entitled to the remuneration of the sitting member replaced, in
proportion to the number of meetings he participated in the month.
CHAPTER VIII
Audit Committee
Section I
Composition
Article 45 - The Company shall have a permanent Audit Committee, as
required by the Brazilian Central Bank, composed of 3 (three) members
named by the Board of Directors in the first meeting following the
Annual Shareholders’ Meeting, for a term of 1 (one) year, removable at
any time and may be reappointed up to the maximum legally allowed.
Sole paragraph - The functions of the Audit Committee members
cannot be delegated.
Article 46 - The Audit Committee should directly report to the Board of
Directors.
Article 47 - Members to be named to the Audit Committee must be
natural persons resident in Brazil, who have university level education
and the technical qualification required for the positions, besides
meeting the conditions for exercising the function in statutory organs
of financial institutions and other institutions authorized to function by
the Brazilian Central Bank.
Sole paragraph - At least one member of the Audit Committee
should possess proven knowledge in the accounting and audit areas
that qualify him for the function.
Article 48 - In addition to the previous Article, the following are the
basic conditions for a member of the Audit Committee:
I - is not or should not have been, in the twelve months before
being nominated: a) an executive officer of the institution or its
associated companies; b) employee of the institution or its associated
companies; c) technical person responsible, executive officer, manager,
supervisor or any other member with managerial function, of the unit
involved in audit work for the institution; d) member of the Fiscal
Council of the institution or its associated companies.
II - should not be the spouse, or direct relatives or collateral
relatives or affinity relatives, up to second degree of persons
mentioned in items “a” and “c” of clause I;
III - not receive any other type of remuneration from the
institution or its associated companies, not related to his function as a
member of the Audit Committee;
IV - should not hold any licensed position at the state
government level;
V - should not or should not have been, in the five months before
appointment, in any office or function at the state government level.
Section III
Powers
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Section IV
Remuneration
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CHAPTER VIII
Audit Committee
Section I
Composition
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Article 49 - The Audit Committee member can return to such organ in
the company only at least three years after the end of his earlier term.
Section II
Replacement
Article 50 - In case of any vacancy in the Audit Committee, the Board of
Directors shall designate the replacement to exercise the function till
the end of the term of the person replaced.
Sole paragraph - Resignation with the permission of the Board of
Directors shall not result in a vacancy.
Section III
Functioning
Article 51 - The Audit Committee shall ordinarily meet according to the
rules governing its functioning, and extraordinarily when required.
Decisions are valid if taken by all the members present.
Article 52 - Audit Committee meetings shall be recorded in minutes,
which record the main facts, matters discussed and decisions taken,
and are signed by all and filed at the Company.
Article 53 - The Audit Committee shall meet at least once a quarter
with the Executive Board, the independent audit firm and the internal
audit to check compliance with its recommendations or inquiries,
including those relating to the planning of the respective audit work,
formalizing the proceedings of such meetings in minutes.
Article 54 - The Audit Committee may, within the scope of its powers,
use the services of specialists.
Sole paragraph - Usage of specialist services does not exempt
the Audit Committee from its responsibilities.
Article 55 - At the end of the semesters ended June 30 and December
31, the Audit Committee should prepare a document called the Audit
Committee Report containing the following information:
a) activities exercised in the period within the scope of its
powers;
b) evaluation of the effectiveness of the institution´s internal
control systems, with the focus being on compliance with norms laid
down by the Brazilian Central Bank, and pointing out the shortcomings
detected;
c) description of the recommendations submitted to the
Executive Board, with those not followed and the respective
justification;
d) evaluation of the effectiveness of the independent audit and
internal audit, including with regard to checking of compliance with
legal and normative provisions applicable to the institution, besides the
internal regulations and codes, with evidence of shortcomings
detected;
e) evaluation of the quality of the financial statements relating to
the respective periods, with the focus on the application of accounting
practices adopted in Brazil and compliance with the norms of the
Brazilian Central Bank, evidencing any shortcoming detected.
Paragraph 1 - The Audit Committee should maintain the Audit
Committee Report at the disposal of the Brazilian Central Bank and the
Board of Directors for at least five years after it is prepared.
Paragraph 2 - The Audit Committee should publish, together
with the half-yearly financial statements, the summary of the Audit
Committee Report, providing the main information contained in the
document.
Section IV
Not Altered
Section II
Replacement
Not Altered
Not Altered
Section III
Functioning
Not Altered
Not Altered
Not Altered
Not Altered
Not Altered
Not Altered
Not Altered
Not Altered
Not Altered
Section IV
APRIL 30, 2013
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Powers
Powers
Article 56 - The functions of the Audit Committee are:
1. to establish the operating rules for its own functioning, which
must be approved by the Board of Directors in writing and placed at the
disposal of the shareholders;
2. to submit the technical report to the Bank management about
the firm to be hired to provide independent audit services, as well as
recommend the replacement of the firm providing such services, if it
deems necessary, subject to the legal norms governing the Company´s
rules for contracting;
3. to review, before publication, the half-yearly financial
statements, including the notes, management´s report and report of
the independent auditor;
4. to evaluate the effectiveness of the independent and internal
audits, including with regard to compliance with the legal and
normative provisions applicable to the institution, in addition to the
internal regulations and codes;
5. to evaluate the Bank management´s compliance with the
recommendations made by the independent and internal auditors;
6. to establish and report the procedures for receipt and
treatment of information about noncompliance with the legal and
normative provisions applicable to the Bank, in addition to the internal
regulations and codes, including the estimate of specific procedures for
protecting the provider and the confidentiality of the information;
7. to recommend to the Bank´s Executive Board, rectification or
improvement in policies, practices and procedures identified within the
scope of its duties;
8. to check, on the occasion of the meetings envisaged in Article
53 (fifty-three), the compliance of the institution´s Executive Board with
its recommendations;
9. to meet the Fiscal Council and the Board of Directors based on
their request, to discuss the policies, practices and procedures
identified within the scope of their respective powers;
10. other functions established by the Brazilian Central Bank.
Not Altered
Section V
Remuneration
Section V
Remuneration
Article 57 - The monthly remuneration of the Audit Committee
members shall be set by the Board of Directors that nominates them,
based on their professional qualifications, after consulting the
controlling shareholder.
CHAPTER IX
Ombudsman’s Office
Article 58 - The Ombudsman’s Office, which shall be permanent, will be
entrusted with ensuring that the Company and its subsidiaries strictly
comply with the legal and regulatory norms relating to consumer rights,
and serving as the communication channel between the Company and
the clients and users of its products and services, including for resolving
disputes.
Article 59 - The Ombudsman’s Office shall have the following duties:
a) receive, record, instruct, analyze and formally and
appropriately deal with complaints from the Company´s clients and
users of the products and services that are not resolved by traditional
customer service through the branches and other customer service
points;
b) provide the necessary clarifications and inform the
complainants about the progress of their complaints and the measures
taken;
c) inform the complainants the estimated time for the final
Not Altered
Not Altered
CHAPTER IX
Ombudsman’s Office
Not Altered
Not Altered
a) receive, record, instruct, analyze and formally and
appropriately deal with complaints from the Company´s clients and
users of the products and services that are not resolved by
traditional customer service through the branches and other
customer service points;
b) provide the necessary clarifications and inform the
complainants about the progress of their complaints and the
measures taken;
internal audit, the Audit Committee and the Board of
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response, which cannot exceed fifteen days from the date of the filling
of the complaint;
d) forward the final response to the complaint within the
deadline informed in item “c”;
e) propose to the Board of Directors corrective measures and
other measures to improve the procedures and routines based on
analysis of the complaints received;
f) prepare and forward to internal audit, the Audit Committee
and the Board of Directors, at the end of every six months, a report
showing the numbers and the quality of the Ombudsman´s activities,
containing the proposals mentioned in item “e”.
Article 60 - The Ombudsman’s Office will be administered by the
Ombudsman, selected from the Bank’s employees for a term of 1 (one)
year, and may be extended, who shall be appointed and removed by
the Chief Executive Officer.
Article 61 - The Ombudsman’s Office shall be provided with adequate
working conditions and its functioning will be guided by transparency,
autonomy, impartiality and independence.
Article 62 - The Ombudsman’s Office shall have access to the
information necessary for preparing the appropriate response to the
complaints received, and shall have total administrative support. It can
request information and documents for exercising its activities.
CHAPTER X
Compensation Committee
Directors, at the end of every six months, a report showing the
numbers and the quality of the Ombudsman´s activities, containing
the proposals mentioned in item “e”.
Not Altered
Not Altered
Not Altered
Not Altered
Section I
Composition
Article 63 - The Compensation Committee, nominated by the Board of
Directors, will be made up of three (3) members, resident in the
country, with a university degree and the technical skills demanded by
the position, as well as the requirements for holding positions in
statutory bodies of financial institutions and other organizations
authorized to operate by the Brazilian Central Bank, with a term of
office of three (3) years, removable at any time, and renewable until
the maximum period permitted by Law.
Paragraph 1 - The Board of Directors is responsible for the
Administrators’ compensation policy, compensation incentives and all
other related matters, and for supervising, planning, operating,
controlling and reviewing said policy.
Paragraph 2 – One of the persons chosen to form the
Compensation Committee must not be an Administrator, with no direct
links to any of the Banrisul Group companies, and the others will be
chosen from among the Board of Directors, excluding the Chairman and
Vice-Chairman.
Paragraph 3 - One of the members chosen to form the
Compensation Committee will be nominated by the Board of Directors,
to hold the position of Coordinator.
Paragraph 4 - The members of the Compensation Committee
will officially take up office on the occasion of its first meeting, to be
held after the Brazilian Central Bank approves the chosen members
Paragraph 5 - The functions of a member of the Compensation
Committee are non-transferable.
Article 64 - The Compensation Committee is a collective advisory and
instructive body, which reports directly to the Board of Directors and
whose decisions constitute recommendations to the Board of Directors.
Article 65 - The members of the Compensation Committee will not be
compensated.
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Article 66 - In the event that a position on the Compensation
Committee becomes vacant due to replacement, removal, resignation,
death, proven impediment, invalidity, loss of mandate or any other
hypothesis set forth in law, the Board of Directors will appoint a
substitute to the vacant position until the end of the replaced
member’s term of office
Sole Paragraph - The temporary absence of any member with
the permission of the Board of Directors shall not constitute a vacancy.
Section II
Powers
Not Altered
Article 67 – The duties of the Compensation Committee are:
a) To prepare the compensation policy for the Administrators of
the Bank and its subsidiaries, proposing the various forms of fixed and
variable compensation to the Board of Directors of the Bank and its
subsidiaries, as well as the benefits and specific recruitment and
severance packages;
b) To supervise the implementation and operation of the
compensation policy for the Administrators of the Bank and its
subsidiaries;
c) To review the compensation policy of the Administrators of
the Bank and its subsidiaries on an annual basis, recommending any
relevant corrections or improvements to the respective Boards of
Directors;
d) To propose to the Board of Directors of the Bank and its
subsidiaries the total compensation of the Administrators to be
submitted to the respective Annual Shareholders’ Meetings, pursuant
to Article 152 of Brazilian Corporation Law 6404 of 1976;
e) To evaluate future scenarios, both internal and external, and
their possible impacts on the compensation policy of the
Administrators of the Bank and its subsidiaries;
f) To analyze the compensation policy of the Administrators of
the Bank and its subsidiaries in relation to market practices, with a view
to identifying any significant discrepancies and proposing any necessary
adjustments;
g) To ensure that compensation policy of the Administrators of
the Bank and its subsidiaries is permanently compatible with the
institutions’ risk management policy, targets and current and expected
financial situation;
h) To request clarification from the Boards of Executive Officers
of the Bank and its subsidiaries or any of their members;
i) To invite employees with proven knowledge of their field to
provide additional clarifications; and
j) To obey any other attributions determined by the Brazilian
Central Bank.
Article 68 – The Compensation Committee shall prepare, on an annual
basis, the Compensation Committee Report within ninety days as from
December 31, containing, at least, the following information:
a) description of the composition and attributions of the
Compensation Committee;
b) activities exercised within its powers during the period;
c) a description of the decision making process adopted to
establish the compensation policy;
d) the main characteristics of the compensation policy, including
the criteria used to measure performance and adjust for risk, the
relation between compensation and performance, the policy for
suspending compensation and the parameters used to determine the
cash compensation percentage and other forms of compensation;
e) a description of the modifications to the compensation policy
realized during the period and the resulting implications to the
Institution’s risk profile and to the conduct of the Administrators when
assuming risk;
f) consolidated quantitative information of the structure of the
Administrators’ compensation, including:
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1.
the amount of annual compensation, separated
into fixed and variable compensation and the numbers of
beneficiaries;
2.
the amount of benefits granted and the number
of beneficiaries;
3.
the amount and form of variable compensation,
separated by type, i.e. cash, shares, share-based instruments
and others;
4.
the amount of compensation that was deferred
for payment in the year, separated into compensation paid and
compensation reduced due to adjustments to the Institution’s
performance;
5.
the amounts paid in relation to the recruitment of
new Administrators and the number of beneficiaries;
6.
the amount paid in severance during the year, the
number of beneficiaries and the highest payment to a single
person; and
7.
the percentages of fixed and variable
compensation and benefits granted in relation to period net
income and shareholders’ equity.
Paragraph 1 – The Compensation Committee shall maintain the
report at the disposal of the Brazilian Central Bank and the Board of
Directors for at least five years as of its preparation.
Paragraph 2 - The Compensation Committee shall present the
information for each Banrisul Group subsidiary.
Paragraph 3 - The Compensation Committee shall present said
report to the Board of Directors at its first meeting after the Annual
Shareholders’ Meeting.
Section III
Functions
Article 69 - The Compensation Committee will meet on a quarterly
basis and extraordinarily, whenever necessary, in accordance with its
operational regulations.
Not Altered
Article 70 – The Bank's Secretary-General will be responsible for:
a) offering all the necessary technical and administrative
support to the Compensation Committee by providing a Bank employee
responsible for secretarial duties and preparing, organizing and
distributing the agendas and subjects to be discussed at the meetings;
b) receiving, dispatching and maintaining custody of all
correspondence, processes and other documents that are of interest to
the Compensation Committee;
c) keeping the administrative assets of the Compensation
Committee up-to-date; and
d) drawing up the minutes of the Compensation Committee's
meetings, which will include the date, time, place, list of those present,
tasks, resolutions taken (recording the main facts and subjects which
were dealt with), other matters (if applicable) and closure; said minutes
shall be signed by all members of the Committee and filed.
Section IV
General Provisions
Article 71 -The members of the Compensation Committee shall remain
loyal to the Bank and its subsidiaries and may not disclose documents
or information related to their business to third parties, and shall
maintain the confidentiality of all privileged or strategic information of
the Bank and its subsidiaries obtained due to its duties that has not yet
been officially disclosed to the market, doing everything possible to
prevent third party access to said information. It is prohibited to benefit
from such information, either personally or through another party, in
any form whatsoever. Members are also required to foster the Bank’s
good corporate governance practices.
Not Altered
APRIL 30, 2013
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CHAPTER XI
General Meeting
Section I
General Provision
Article 72 - The General Meeting shall be convened and held and its
decisions shall be according to the legal provisions and, subordinately,
to these Bylaws.
Not Altered
Article 73 - Before starting a meeting, shareholders shall sign the
"Attendance Record", indicating their name, nationality, residence, and
the number and type of shares held by them.
Article 74 - The business of the General Meeting shall be opened by the
Chairman of the Board of Directors or his statutory replacement, who
will immediately request the shareholders to elect the presiding board,
composed of the Chairman and Secretary.
Section II
Annual General Meeting
Article 75 - Every year, in the four months following the end of the
fiscal year, there will be an Annual General Meeting to examine the
material referred to in Article 132 (one hundred thirty-two) of the Lei
de Sociedades por Ações.
Section III
Extraordinary General Meeting
Article 76 - The Extraordinary General Meeting shall be convened
whenever the Company´s business demands it.
Not Altered
CHAPTER XII
Committees
Section I
Composition
Article 77 - Company shall have 15 (fifteen) organs to assist the
Executive Board. They are:
a) Banking Management Committee;
b) Economic Management Committee;
c) Business Management Committee;
d) Marketing Management Committee;
e) Administrative Management Committee;
f) Internal Controls Management Committee;
g) Information Technology Management Committee;
h) Credit Committee;
i) Personnel Management Committee;
j) Cards and Acquiring Business Committee;
k) Environmental Management Committee;
l) Investment Committee;
m) Asset Pricing Committee:
n) Corporate Risk Committee;
o) Treasury Committee.
Sole paragraph - Each Committee shall have at least 4 (four) and
at most 12 (twelve) members.
Not Altered
Article 78 - Members of the Committees will be the Unit
Superintendents, Superintendent of Advisory Boards and the
Controller, named by the Executive Board, and, by appointment of the
Executive Board, administrators of companies in which Banrisul
participates with 50% (fifty percent) or more of the capital stock.
APRIL 30, 2013
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Article 79 - The Committees may be subdivided into groups based on
the service needs and interests of the Executive Board.
Section I
Organization, duties and powers
Article 80 - Subject to the regulations of the Executive Board, each
Committee envisaged in these Bylaws shall opine on matters pertaining
to its respective area, after being submitting them to the Executive
Board for discussion.
CHAPTER XIII
Not Altered
Not Altered
Fiscal Year, Financial Statements, Profits and their
allocations
Section I
Fiscal Year
Article 81- The Fiscal Year shall have duration of one year, ending on
December 31.
Section II
Financial Statements
Article 82 - At the end of each half-year, in compliance with legal
provisions, the Financial Statements shall be prepared, clearly
explaining the Company´s financial standing, the changes in the period
and the respective cash flow statements.
Article 83 - Before any profit sharing is made, accumulated losses and
provision for income tax shall be deducted from the earnings, in
compliance with Article 189 (one hundred eighty-nine) of Law 6404 of
December 15, 1976.
Article 84 - In compliance with the previous Article, at the discretion of
the Executive Board, the employees’ profit sharing shall be earmarked
for distribution as performance award, up to 10% (ten percent) of the
operating results of the half-year.
Section II
Profit and its Allocation
Article 85 - Shareholders shall have the right to receive as mandatory
dividend, every year, a percentage equivalent to 25% (twenty percent)
of the year´s net income, adjusted according to the following norms: I.
The year´s net income shall be reduced or increased with the following
amounts: (a) 5% (five percent) for constitution of the Legal Reserve up
to the limit established by the Lei das Sociedades Anônimas. The
Company is exempted from constituting this Reserve in the year in
which its balance, after adding the amount of Capital Reserve
mentioned by Paragraph 1 of Article 182 (one hundred eighty-two) of
Law 6404/76, exceeds 30% (thirty percent) of the capital; and (b) the
amount allocated to constituting the contingency reserve, as proposed
by the Executive Board, and the reversal of this reserve formed in
previous years; II. From the amount allocated for payment of dividend
mentioned by this Article, subject to the deductions envisaged in item I
above, the following shall be excluded: first, the amount necessary for
payment of a fixed dividend of 6% (six percent) per annum to class A
preferred shares, calculated by dividing the capital by the number of
shares making it (Article 8); III. Subject to the previous items, if there is
any balance, dividend shall be paid to common shares and class B
preferred shares, not greater than that allocated to class A preferred
shares; IV. After payment of the dividend mentioned in previous items,
any balance in the amount allocated for dividend shall be distributed
among all the shareholders. In such a hypothesis, common shares and
preferred shares shall enjoy the same conditions, in compliance with
Not Altered
APRIL 30, 2013
47
item “ii” of Article 8 (eight) of these Bylaws.
Article 86 - The Company shall maintain an Investment Reserve for
investments in information technology. To constitute such reserve, the
Board of Directors may propose up to 25% (twenty-five percent) of the
adjusted net income of each fiscal year, up to 70% (seventy percent) of
the paid-up capital.
Article 87 - Without prejudice to Articles 73 to 77 of these Bylaws, the
Board of Directors may determine preparation of the balance sheet and
payment of dividend in periods shorter than 6 (six) months, provided
the total of dividend paid in each half-year does not exceed the capital
reserve amount.
Article 88 - The amount of interest, paid or credited, as remuneration
on equity, under the terms of Article 9 (nine) Paragraph 7 of Law 9249,
of 12/26/95 and pertinent legislation and regulations, may be imputed
to the mandatory dividend, with that amount being added to the
dividend amount distributed by the Company, for all legal purposes.
CHAPTER XIV
Sole Section - Preservation of the Control of the
Company by the State of Rio Grande do Sul and Rights of
Minority Shareholders
Article 89 - The fundamental and basic rule of the Company is that it
shall necessarily be controlled by the state of Rio Grande do Sul. Under
Article 22 of the Rio Grande do Sul State Constitution, any amendment
to this rule is the prerogative of the state population. Thus, only
through a plebiscite can there be a transfer of shareholding control in
the Company, subject to public interest. If such sale is approved
following this procedure required by the State Constitution, either
through a single operation or through successive operations, it should
be based on a suspensive or resolutory condition that the party
acquiring the control undertakes to place, within 90 (ninety) days, a
public tender offer for acquiring the shares owned by other
shareholders, guaranteeing them a price of at least 100% (one hundred
percent) of the amount paid per share with voting rights in the
controlling block, in order to assure them equal treatment on par with
the seller.
Not Altered
Article 90 - The public tender offer referred to in the previous Article
should also be held, subject to the constitutional norms and the
plebiscite requirement mentioned in Article 80 above: (a) in cases of
encumbered assignment of subscription rights of shares and other
bonds or rights related to securities convertible into shares that may
result in the disposal of the Company Control; and (b) in the case of
indirect sale, that is sale of the control in the company by the
Company´s controlling shareholder(s), in which case the selling
controlling shareholder(s) shall be obliged to inform the São Paulo
Stock Exchange (BOVESPA) the amount to be attributed to the
Company in such sale and attach documentary evidence.
Article 91 - Those already holding the Company´s shares and, subject to
the constitutional norms and the plebiscite requirement mentioned in
Article 80 above, acquiring the shareholding control through a private
instrument of share purchase agreement entered into with the
controlling shareholder(s) involving any amount of shares, shall be
bound to: (a) make the public offer referred to in Article 42 hereof; and
(b) refund the shareholders from whom they purchased shares in the
stock exchange in the (6) six-month period before date of transfer of
the shares representing control in the Company, and shall pay them
any difference in the price paid to such controlling shareholder(s) and
also the amount paid in the stock exchange for shares of the Company
in this same period, duly adjusted according to the Extended Consumer
APRIL 30, 2013
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Price Index - IPCA (“IPCA”) up to the actual payment.
Article 92 - In the public tender offer for the shares to be made by the
controlling shareholder for cancellation of the Bank´s registration as an
open capital Company, the minimum price to be offered should
correspond to the economic value calculated in the valuation report.
Article 93 - If the shareholders at the Extraordinary General Meeting
decide to discontinue the Level 1 Corporate Governance Practices, the
controlling shareholder or group of shareholders (as defined in Article
116 of Law 6404/76) should make a public tender offer for acquisition
of shares owned by other shareholders, for the economic value of the
shares according to the valuation report: (i) within 90 (ninety) days, if
the discontinuance of Level 1 Corporate Governance Practices is for the
shares to be traded outside the Level 1 of Corporate Governance
Practices, or (ii) within 120 (one hundred twenty) days from the date of
the Annual General Meeting that approved the corporate restructuring
in which the Bank´s shares resulting from such reorganization are not
admitted for trading in Level 1.
Not Altered
Article 94 - The valuation report referred to in Articles 83 and 84 should
be prepared by a specialist company with proven experience, which is
independent of the Bank, its managers or controllers. The report should
also satisfy the requirements of Paragraph 1 of Article 8 of Law 6404/76
and contain the responsibility envisaged in Paragraph 6 of the same
Article of said Law.
Article 95 - In compliance with the hypotheses of Article 80 and
subsequent articles, the Company shall not carry out any transfer of
shares to shareholder(s) acquiring control if such shareholder(s) do not
sign the Statement of Consent to the Regulations of Differentiated
Practices of Level 1 Corporate Governance and the Statement of
Consent to the Regulations of the Market Arbitration Panel.
Not Altered
CHAPTER XV
Sole Section - Arbitration
Article 96 - Disputes related to Regulations of Level 1 Corporate
Governance Practices, these Bylaws, any shareholders´ agreements
filed at the Company´s head office, provisions of Law 6404/76, norms of
the National Monetary Council, Brazilian Central Bank, the CVM,
regulations of the BOVESPA and other norms relating to the functioning
of the capital markets in general, or arising from such norms, shall be
resolved by means of arbitration held according to the Regulation of
the Market Arbitration Panel instituted by the BOVESPA.
Not Altered
CHAPTER XVI
Sole Section - General Provisions
Article 97 - The Bank, in compliance with its corporate objectives,
business nature and operational characteristics, following the methods
used by the private sector, shall: a) adopt the principle of tenders for
purchase of assets, works and services contracted; b) observe the
principles instituted by the controlling shareholder for granting
subsidies and grants; c) without prejudice to other norms governing the
inspection of its activities as a financial institution, provide conditions
essential for efficient internal control, the position of Controller and
Auditor General of the controlling shareholder and external control, as
laid down by the State Constitution of Rio Grande do Sul and pertinent
legislation; d) implement the code of ethics governing the relations
with external clients and among the employees; e) guarantee to its past
and present managers and board members, in cases when there is no
incompatibility of interests with those of the Company and in the
manner defined by the Board of Directors and proposed by the
Executive Board, their defense in legal and administrative proceedings
APRIL 30, 2013
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against them for actions in the exercise of their position or function,
subject to provisions of Law 8906 of 07/04/1994.
Article 98 - Except for the funds needed to meet the objectives of
the Fundação Banrisul de Seguridade Social (Banrisul Social Security
Foundation), the amount of subsidies and grants to be distributed
annually by the Executive Board shall be fixed by the Board of Directors,
subject to tax restrictions and the criteria laid down by the State for
concession of these.
Not Altered
Article 99 - The Executive Board shall pass the resolutions establishing
the procedures to be adopted in cases of tender bids and grant of
subsidies and grants.
Article 100 - The Executive Board shall send to the Controller and
Auditor General of the state of Rio Grande do Sul the balance sheets
and the trial balances of the Bank and provide them with all the
information required for the internal and external control by the
controlling shareholder.
Article 101 - The Company shall be dissolved and liquidated according
to prevailing legislation.
Article 102 - Recruitment of personnel for the Bank, in Brazil, shall be
according to Brazilian Labor Laws (Consolidação das Leis do Trabalho)
through a common entrance exam or entrance exams weighted for
qualifications, depending on the nature of the position.
Not Altered
Article 103 - Members of the Executive Board may, once a year, enjoy
vacation of up to thirty days, consecutive or otherwise, without loss of
any benefits or prerogatives guaranteed to these in these Bylaws.
Article 104 - The Banco do Estado do Rio Grande do Sul S.A. shall,
through at least one of the members of its Executive Board, have a
presence on the Board of Directors of the companies in which it owns
50% (fifty percent) or more of the capital. Sole paragraph - The Bylaws
of each of the companies referred to in this Article should envisage the
participation of the Bank´s representatives on their Boards of Directors,
subject to legal provisions.
Article 105 - The acquisition or subscription to the Bank´s shares
implies in the approval of these Bylaws and acceptance of the
responsibilities arising from them and the laws in force.
Article 106 - Cases omitted by these Bylaws shall be regulated by
applicable legislation.
CHAPTER XVII
Sole Section - Temporary Provisions
Article 107 - The rights of current holders of preferred shares
shall be given to the holders of such shares on the date of the
Extraordinary General Meeting held on March 28, 1988, without
prejudice to their right to convert them into registered preferred shares
anytime with no pecuniary liability.
Not Altered
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NIRE 43300001083
REFERENCE FORM
CVM INSTRUCTION No. 480/2009
ITEM 10. MANAGEMENT COMMENTS
APRIL 30, 2013
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We, members of the Board of Executive Officers of Banrisul, according to CVM Instruction 480/09, commented on
item 10 of the Reference Form, the main information related to the Bank, analyzing data from 2010, 2011 and 2012.
We declare that the information is reliable and consistent based on information of the financial statements and
management reports regularly monitored.
Firstly, in section 10.1, we point out the general, operational and financial view of the Bank, our capital structure, our
funding sources and debt levels. We also present the variations between the years 2010/2011 and 2011/2012 of the
Balance Sheet and Income Statement.
In section 10.2 we describe the main components of revenue, the performance of the commercial loan portfolio
classified by product and divided into individuals and corporate, and also the composition of other operational
revenues.
In relation to section 10.3, we commented the events that should cause changes in the results: (i) the acquisition of
49.9% (forty-nine percent and nine tenths) of the shares issued by Credimatone Promotora de Vendas e Serviços S/A
("Bem-Vindo"), along with MatoneInvest Holding, which will acquire the remaining balance shares, becoming a
partner of Bem-Vindo in the proportion of paid-in capital. The Bank announced the acquisition as part of strategic
move to leverage business and enhance the distribution of financial services, (ii) in January 2012, Banrisul concluded a
process of issuing subordinated debt securities abroad, with total captured volume of USD 500 million (500 million
U.S. dollars), with the payment of the interest coupon of 7.375% per annum, payable semiannually from the date of
effectiveness; (iii) change in the recognition of earnings/losses of Fundação Banrisul, which will be identified
respectively as assets or liabilities in the financial statements with an counterpart in the shareholders’ equity.
In section 10.4, we describe the significant changes in accounting practices adopted by the Bank and its effects on the
Financial Statements and also we commented the opinions of Auditors on the Financial Statements for the years 2010,
2011 and 2012.
Regarding the critical accounting policies adopted by Banrisul in section 10.5, we emphasize the methodologies for
the classification of securities and credit risk assessment, and the classifications adopted in credit operations, in
leasing and in others credits. In addition, we describe characteristics of the provision for losses, of fixed assets,
measurements and explanations of provisions for tax, labor and civil contingencies, and the detailing on the income
tax, social contribution and pension, health and retirement plans.
As to section 10.6, we pronounce on internal controls supported by policies that ensure effectiveness and clarity of
the Financial Statements structured by the best market practices and corporate governance, following in details the
legislation and guidance of regulatory agencies.
In section 10.7, we inform the characteristics of the two external funding transactions carried out by the Institution in
2012.
Responding to section 10.8, we list the assets and liabilities held by the Bank, which does not appear in its Balance
Sheet as the judicial deposits, endorsements and sureties, the securities custody and joint obligations for import
credit, the administration of third party resources, the management of consortiums and the properties rental.
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Because we have not presented items not disclosed in the financial statements for the three periods analyzed, the
section 10.9 has not received additional comments.
Finally, in section 10.10, which deals with business plan, we detail the investment policy of Banrisul, structured in
expansion and technological modernization, reforms and expansions of service points, and magnification of the
channels of customer relationship on a national scale through the acquisition of Credimatone Promotora de Vendas e
Serviços S/A.
Because we believe that all the factors that influenced the operational performance of Banrisul were discussed in
sections 10.1 to 10.10, we did not include additional comments in Section 10.11.
10.1
Management comments
a.
General financial conditions
Overview
Founded in 1928, Banrisul is a multiple-service bank controlled by the State of Rio Grande do Sul. Banrisul is
the official and main financial agent of the Government of the State. In 1934, the Bank began its expansion
with the opening of branches in various cities in the state, and continued its growth and consolidation
through the incorporation of public financial institutions such as the Banco Real de Pernambuco (1969),
Banco Sul do Brasil (1970), Banco de Desenvolvimento do Estado do Rio Grande do Sul, BADESUL (Rio
Grande do Sul's Development Bank, 1992) and DIVERGS - Distribuidora de Títulos e Valores Mobiliários do
Estado do Rio Grande do Sul (Securities Distributor of the State of Rio Grande do Sul, 1992).
In 1998, due to the signing of PROES - Incentive Program for the Reduction of State Public Sector in the
Banking Industry, Banrisul underwent a restructuring process that resulted in a capital injection in an
amount equivalent to R$1.4 billion, of which (i) R$700.0 million received in the form of securities issued by
the Federal Government and the Central Bank of Brazil (ii) and the remaining R$700.0 million related to the
(then) actuarial liability with the Banrisul Foundation (pension plan) and to amounts owed to BNDES. The
R$700.0 million capital injection in securities was used to constitute provisions for (a) loan losses, mainly,
and labor contingencies, (b) write-down of tax credits and deferred tax assets and (c) investments.
In 2007 Banrisul carried out a primary and secondary public offering of shares, totaling approximately R$2.1
billion and enrolled to the Level 1 of Corporate Governance Practices of the BM&FBovespa. That year
coincided with the consolidation of an internal restructuring program that started in 2005 and which arose
with the implementation of a result-oriented management model that demanded the review of internal
processes, the development of a new credit model, the restructuring of internal models for business goals
and the development of an incentive compensation program to employees, in addition to the
modernization of the IT park.
In 2011, there was the management reshuffle and the substitution of members of the Board of
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Administration and of the Fiscal Council, and yet, transition occurred smoothly, grounded on corporate
governance standards already practiced by the Bank. Results from all efforts made in 2011 were recognized
with the Bank's rating of investment grade on a global scale and as a maximum rating on a national scale
granted by Moody's Investors Service in early January of 2012 and the credit ratings of BBB- on a global
scale, brAAA on the Brazil National Scale and bbb+ stand-alone credit profile (SACP) by Standard & Poor's
Rating Services in March 2012.
The year 2012 was characterized by several external and internal events that affected the performance of
Banrisul. In the international environment, the financial industry presented deceleration of credit growth
and credit revenues, in a context of slower pace of business expansion and lower interest rates to the end
customer. Locally, the Bank concluded the acquisition of 49.9% of Credimatone Promotora de Vendas e
Serviços S/A, carried out two foreign funding operations in the amount of US$775 million, issued for the
first time shares of a real estate investment fund named Banrisul Novas Fronteiras Fundo de Investimento
Imobiliário – FII (Banrisul New Frontier Real Estate Investment Fund – FII), in the approximately amount of
R$70 million, reinforced Banricompras Network, casting itself as the fourth acquiring network in the Brazil,
able to capture and process Banricompras, MasterCard, VerdeCard and Visa transactions, redesigned
several branches and opened the first affinity branch whose service focuses on relationship and business
differentials, all movements that contributed to the strategy of the Institution set out two years ago upon
the inauguration of the current Board of Executive Officers, which is grounded in four pillars: business
growth, technological innovation, management efficiency and service quality. In addition, Banrisul was the
first company among those controlled by the State Government to publish, in June 2012, the Sustainability
Report 2011. The Investment Grade ratings awarded by Moody's Investors Service and by Standard &
Poor's Rating Service earlier in the year, and for the first time in the history of the 84 years of the
Institution, were fundamental to the implementation of the strategy to diversify sources of funding and
capital strengthening.
At the end of 2012, Banrisul reached R$47 billion in assets. In December 2012, loan portfolio totaled R$24
billion, deposits totaled R$27 billion and shareholders' equity reached R$5 billion.
Banrisul focuses in meeting credit demands of individuals and providing working capital to companies.
Regarding the individuals segment, several agreements with public and private entities were signed,
allowing access to payroll loans, as well as the acquisition of Bem-Vindo credit promoter company,
specializing in selling payroll loans, and the Programa Gaúcho de Microcrédito (Rio Grande do Sul’s
Microcredit Program), established in 2011 in partnership with the State Government, favored the portfolio
increase. In the companies segment, the placement of new lines of working capital and adherence to the
Programa Progredir of Petrobrás (financing program for Petrobrás’ suppliers), were favored by increased
activity in the acquiring market. Additionally, customers are nurtured with credit lines for real estate
finance, agricultural loans, long-term finance, trade finance and credit lines specifically designed for the
public sector.
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Non ear-marked credit (commercial credit portfolio) maintained a prominent position in the total loan
book, making up 72.7% of loan assets. The corporate segment stands out in the commercial credit,
increasing 17.4% in twelve months. Credit to individuals increased 14.5% in twelve months, representing
38.0% of total loan book at the end of 2011. It should be noted, also, the year-on-year growth in long-term
finance (43.1%) and in real estate finance (29.0%), both largely incentivized during last year.
Banrisul's geographical area is the Southern Region of Brazil, especially the state of Rio Grande do Sul, with
the 4th largest Gross Domestic Product (GDP) and where Banrisul's headquarters is located.
Banrisul group consists of Banco do Estado do Rio Grande do Sul S.A., Banrisul S.A. Administradora de
Consórcios, Banrisul S.A. Corretora de Valores Mobiliários e Câmbio, Banrisul Armazéns Gerais S.A., Banrisul
Serviços Ltda and Credimatone Promotora de Vendas e Serviços S/A.
In the banking industry in Brazil, in September, 2012 Banrisul occupied, among mid- and large sized
Brazilian banks, the 11th position in total assets, 11th in equity, 7th in total deposits and 7th in the number of
branches, according to rankings released by the Central Bank Brazil (BNDES not included).
From December 2011 to December 2012, Banrisul's domestic market share in time deposits grew 0.7014
pp, with a participation of 2.6588% over total balance of time deposits in Brazil. While time deposit base
decreased 10.1% from 2011 to 2012 within the banking system, time deposit base at Banrisul increased
22.1% in the same period. Likewise, Banrisul's market share in credit operations also increased, from
1.0047% in 2011 to 1.0310% at the end of 2012.
In the State of Rio Grande do Sul, Banrisul's market share in time deposits and demand deposits increased
3.2257 pp. and 0.7644 pp., respectively, from 2011 to 2012, absorbing the decrease in savings deposits in
0.6456 pp. Credit operations balance reached, in September 2012, 22.4688% of total loans recorded locally,
while in September 2011, the representativeness was 22.4586% of the credit operations in the State.
Financial and Operational Overview
The tables 1 and 2 show the data related to the main operational and financial indicators:
Table 1: Main Balance Sheet Accounts
2012
Total Assets
Total Credit Operations (1)
Assets under Management (2)
Funding (3)
Deposits
Shareholders' Equity
Consolidated Basel Ratio (4)
(1)
(2)
(3)
(4)
R$ Million
2010
2011
46,571
24,327
7,138
28,374
26,746
4,894
18.7%
37,586
20,393
6,638
23,693
22,361
4,400
17.24%
32,128
17,033
6,038
20,364
19,053
3,855
16.07%
Includes all types of credit operation.
Management of third party funds made through investment funds and managed portfolios.
Includes the balances of deposits and money market funding.
Basel ratio represents the relation between base capital (Referential Equity) and risk weighted assets.
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Table 2: Main Income Statement Accounts
R$ Million, except service points
Net Income
Gross Profit from Financial Operations
Other Operating Income (Expenses)
Efficiency Ratio
ROAE (p.a.)
(1)
2012
2011
2010
819
904
741
2,878
2,739
2,397
47.5%
45.19%
47.76%
17.6%
21.91%
20.41%
(2)
(3)
(4)
(5)
Number of Service Points
1,301
1,278
1,230
(1)
Corresponds to the total Income from Financial Intermediation less total Costs of Financial Intermediation.
(2)
Considers the (i) revenues from services and fees, (ii) administrative expenses, (iii) tax expense, (iv) equity participation in
subsidiaries, and (v) other operating income and expenses.
(3)
Efficiency Ratio, based on 12-month accumulated period and consists of (i) personnel costs summed to (ii) other
administrative expenses, then divided by (iii) net interest income added of (iv) income of services and (v) the net result of other
income/expenses.
(4)
Net income as a percentage of the average balance of shareholders' equity.
(5)
Considers branches, banking service posts and electronic service points.
Fiscal year ended December 31, 2012
Banrisul’s economic performance in 2012 was affected by the slowdown of the growth in interest income,
in line with an environment of lower business activity and the reduction of interest rates to end-customers.
The growth strategy designed two years ago was put into practice with the acquisition of 49.9% of the
capital of the payroll-loan specializing company Credimatone Promotora de Vendas e Serviços S/A, a
company with points of service dispersed through five regions of Brazil. In the southern region, the
expansion project has continued with the opening of 9 new branches and the transformation of 18 banking
service posts into full branches. The Bank also concluded two foreign funding subordinate capital injections
in February and December 2012, in the total amount of USD775 million, foreign and corporate events that
exemplify a year marked by various movements.
Banrisul’s funding structure, mainly represented by savings and time deposits, includes financial and
investment funds and counts on the issuance of foreign subordinated bonds. Throughout 2012, the Bank
also raised funds by issuing real estate bonds.
In 2012, Banrisul accessed the international debt capital market in two opportunities, reaching the amount
of USD775 million in foreign subordinated notes issued with a term of 10 years, maturing in 2022 and
interest coupon of 7.375% p.a., with the purpose of increasing Tier II capital. The first issue, in the amount
of USD500 million, took place in late January 2012, with a yield of 7.50% p.a. The second, in the amount of
USD275 million, was concluded in late November 2012, with a yield of 5.95% p.a. The authorization from
the Central Bank of Brazil for the use of the external funding as Tier II capital was received in January 2013.
Banrisul’s funding and AUM structure, consisting of deposits, financial and development funds, external
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funding and investment funds, reached R$40,985.3 million in December 2012, an increase of 20.2%
(R$6,887 million) over the amount recorded in December 2011. Funding consists of 65.3% of deposits,
14.5% of financial and investment funds, 2.8% of subordinate debt (related to the first issue, as the second
will only be used as Tier II Capital from January 2013) and 17.4% of investment funds.
The balance of deposits totaled R$26,746 million in December 2012, an expansion of 19.6% over the
amount recorded in December 2011. Financial and investment funds reached R$5,942 million, with a
growth of 16.5% over December 2011. The foreign subordinated debt totaled R$1,158 million in December
2012. Funding from real estate bonds totaled R$315 million at the end of 2012. Assets under management
totaled R$7,138 million at the end of December 2012, an increase of 7.5% over the previous year.
Total assets reached R$46,571 million in December 2012, 23.9% higher than December 2011. Loan portfolio
represents 52.2% of the total assets; securities and interbank deposits, 36.4%; interbank and interbranch
accounts, 7.9%; and other assets, 3.5%.
Loan book reached R$24,327 million, with an increase of 19.3% (R$3,934 million) in twelve months. Loan
portfolio consists mainly of borrowings to individuals and medium-sized companies. Among the credit lines,
payroll loans to individuals stand out by their representativeness, with 27.8% of total loans at the end of
December 2012, seconded by working capital loans to companies, which absorbed 26.7% of the total credit
portfolio. Real estate and agricultural loans also presented favorable growth in the last twelve months since
December 2012, representing 9.2% and 7.4% of the loan book, respectively. Payroll loans originated from
branches, working capital and real estate loans are the main lending highlights of 2012.
The commercial (non-earmarked) credit portfolio totaled R$17,698 million, with a growth of 15.9%
(R$2,427 million) in twelve months. In 2012, both credit to companies and consumer credit contributed to
the increasing trend of the commercial credit portfolio; the expansion of credit to companies totaled
R$1,254 million and the contribution of the commercial credit to individuals reached R$1,173 million.
Delinquency rate over 60 days reached 3.80% of total loans in December 2012, an increase of 1.04 pp. over
last year’s. NPLs over 90 days reached 2.93% in December 2012, higher than the 2.38% of December 2011.
The coverage ratio reached 172.2% and 223.5% for loans 60- and 90-day overdue, respectively, in line with
market trends. In the last quarter, default and cover ratios were impacted by the delay in the remittance of
payments received by Banco Cruzeiro do Sul (currently in extrajudicial liquidation) upon loans that were
sold to Banrisul. This delay was due to the fact that the company Banco Cruzeiro do Sul hired to collect and
process all installments credited by the consignors entities (mostly public companies, from the payments of
payroll loans taken by their employees), as agreed by all the banks that acquired credit portfolios from
Cruzeiro do Sul, has not yet concluded the operational process that will expedite the identification of
payments and their transferences to the corresponding creditor banks. Of the amount more than 60 days
overdue, 11.9% was referred to contracts with overdue installments not yet transferred by Banco Cruzeiro
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do Sul, the equivalent to 0.45 pp. out of the 60 days default rate presented by Banrisul, i.e., if excluded,
delinquency would have reached 3.35% in 4Q12, in comparison to the 3.39% of September 2012. Of the
amount more than 90 days overdue, 7.4% arose from installments of contracts not yet transferred by
Banco Cruzeiro do Sul and represented 0.22 pp. of Banrisul’s 90-day default rate, i.e., the rate would have
been 2.71% in 4Q12, reducing from the 2.76% in September 2012.
As to Banrisul’s treasury management, cash and cash equivalents are invested into to federal bonds
indexed to the Selic Rate, in Treasury Bills or in matched transactions, always backed by federal securities.
In December 2012, the balance in securities, interbank transactions, net of matched transactions, totaled
R$15,343 million, an increase of 38.5% from December 2011.
The Bank has room to support credit growth, capacity attested by the 18.7% Basel ratio in December 2012.
Operating performance indicators, the administrative costs to total assets and the administrative costs to
total revenue ratios, representing the operational cost and efficiency indicators, reached 4.5% and 47.5% in
December 2012, respectively.
Banrisul’s net income of R$819 million in 2012 is 9.5% below that recorded in 2011, largely reflecting the
business slowdown in the economic environment and the rise of delinquency. Although the effect of
situational constraints, 2012 performance produced increases in credit and treasury revenues (derivatives
included) and in service fees, although offset by the increases in financial, operating and administrative
expenses, the latter related to events associated with the Bank’s growth strategy that comes from the
prospection of new business opportunities and from the issuance of foreign subordinated debt.
Gross financial income reached R$2,878 million in 2012, with growth of 5.1% (R$140 million) over that of
2011. The results delivered at the end of 2012 are equivalent to an ROAE of 17.6%. In December 2012,
shareholders’ equity totaled R$4,894 million, an increase of 11.2% over the balance of December 2011.
ROE reflects the net interest margin and lower credit average interest rates, the increase of default rates
and of administrative expenses, grandly linked of Banrisul’s expansion strategies.
Banrisul collected and provisioned R$752 million in taxes and contributions in 2012. Taxes withheld and
paid, which are levied directly on financial intermediation and other payments, amounted to R$685 million.
The volatility of the global financial environment has required adjustments in the domestic monetary policy
and regulatory mark, implemented through the release of macro prudential measures by the Central Bank
of Brazil at the end of 2010, through changes in the trajectory of the basic interest rate (with a hike of 1.75
pp. in the Selic rate until August 2011, reaching its peak of 12.50% p.a., then gradually dropping 1.50 pp.
until December, closing 2011 at 11.00% p.a.), by the definition of capital allocation based on Basel III and by
the relaxation of macro prudential measures to contain credit. In the banking industry, the effects of the
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monetary authority were felt reflected by the credit slowdown - even though internal demand remained
heated - and the increase in delinquency.
In 2011, credit grew by 19.0% (2010 - 20.6%) within the financial industry. Even though at lower rates,
credit growth in 2011 increased its ratio as a proportion of GDP, reaching 49.1%. The delinquency bank
market reached 3.6% at the end of December 2011, as opposed to the 3.2% recorded in 2010.
Although 2011 had been marked by financial uncertainties and instabilities worldwide, Banrisul did present
consistent results and outpaced, in most cases, its own guidance disclosed in February 2011 and unaltered
throughout the year.
The institution continued its strategy of increasing credit operations, encouraged by the prospects of the
economic environment, and enjoyed its competitive advantages in relation to other institutions:
comfortable cash at hand, low exposure to treasury risks, adequate levels of default and cost of funding,
and the financial capacity to sustain the growth of loan assets.
Banrisul's liquidity is favored by its market fundraising features, the cash and cash equivalents are invested
in federal bonds indexed to the Selic Rate, Treasury bills or in matched transactions, always backed by
federal securities, without any exposure to foreign exchange, swaps or derivatives operations.
The funding for credit assets is obtained from retail deposits from customers made directly at branches,
with the positive effect of lowering Banrisul's cost of funding. At the end of 2011, funding balance totaled
R$22 billion, of which 62.6% were represented by time deposits. Total deposits represented 67.4% of the
third parties liabilities of the Bank.
Credit assets reached R$20 billion, accounting for 54.3% of the total assets. The loan portfolio is composed
of pulverized operations, hired mainly by individuals, SME and micro companies. Of all credit lines, payroll
loans to individuals, with 29.4% of total loan book, and working capital to companies, which absorbed
26.7% of total loan portfolio at the end of December 2011, are the most representative. In twelve months,
real estate finance presented the highest growth rate, increasing 35.4% year-on-year, closing 2011 with a
participation of 8.5% in the total portfolio. As per the increase of credit grant working capital, guaranteed
account, overdraft and rural finance were the main contributors in relation to December 2010.
The delinquency rate over 60 days reached 2.8% of total loans in December 2011, an increase of 0.3 pp.
over the same period last year. NPLs over 90 days reached 2.4% at the end of 2011 (2.2% at the end of
2010). Despite the small deterioration in credit quality, delinquency levels remain below those reported by
the banking industry in Brazil. The coverage ratio for loans overdue for more than 60 days reached 234.0%,
which is adequate to banking market practices vis-à-vis the risks of past due loans.
Banrisul has conditions to support credit growth, as demonstrated by the Basel Ratio of 17.2% in December
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2011. All structural indicators demonstrate the effectiveness of the administrative structure, at favorable
levels, as showed by the operating costs/total assets and cost/income ratios, which reached 4.9% and
45.2% in December 2011, respectively.
The net income of R$904 million in 2011 is 22.0% (R$163 million) higher than that of 2010, reflecting the
increase in credit and treasury revenue and foreign exchange results, minimized by higher financial and
onlendings expenses and costs with market funding. From 4Q10 to 4Q11, net income reduced 1.4% due to
the increase of financial expenses, which offset the increase of credit and securities revenues and foreign
exchange results. From 3Q11 to 4Q11, net income dropped 5.2%, totaling R$227 million, strongly
influenced by the decrease in revenues from financial intermediation, by the reduction in other operating
revenues, and higher administrative expenses which were partially offset by lower financial expenses.
2011's total profit is equivalent to a 21.9% ROAE. In December 2011, shareholders' equity totaled R$4,400
million, an increase of 14.1% over the balance of December 2010, and 2.4% above that of September 2011.
Gross profit from financial operations reached R$2,739 million in the twelve months of 2011, with a growth
of 14.3% (R$342 million) on the outcome of the twelve months of 2010. In the last quarter of 2011, the
gross income from financial operations totaled R$741 million, 12.3% (R$81 million) higher than in the last
quarter of 2010 and 7.3% (R$50 million) higher than the amount recorded in 3Q11.
Total assets reached R$37,586 million in December 2011, 17.0% higher than the same month last year, and
2.8% over the balance of September 2011. The allocation of funding into credit assets, especially in the
commercial (non-earmarked) portfolio, and in treasury, explains the asset growth.
The credit operations at Banrisul increased 19.7% (R$3,360 million) in 2011, totaling R$20,393 million. In
comparison with the previous quarter, the credit assets increased 3.8% (R$738 million). The commercial
credit portfolio totaled R$15,271 million, an increase of 16.3% (R$2,140 million) in twelve months and of
2.4% (R$364 million) in the quarter. Commercial credit to individuals totaled R$8,079 million in December
2011, 9.2% (R$681 million) increase in twelve months, especially driven by the increase in payroll loans, and
a decrease of 3.0% (R$247 million) in the last quarter, reflecting the drop in the acquired payroll loan
portfolio. Credit to companies totaled R$7,191 million in December 2011, an increase of 25.4% over the
same period in 2010, and of 9.3% (R$611 million) over September 2011. The year-on-year and quarter-onquarter increases in credit to companies were driven by working capital credit lines.
Funds raised and under management totaled R$28,999 million in December 2011, with an increase of
15.6% (R$3,909 million) over the balance recorded in the same period of 2010, and of 5.4% (R$1,494
million) compared to the previous quarter. The deposit balance totaled R$22,361 million in December 2011
- time deposit being the highlight. Total deposits increased 17.4% from 4Q10 to 4Q11, and expanded 6.9%
over last quarter's. Assets under management totaled R$6,638 million, 9.9% higher than the balance the
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end of 2010 and 0.6% over the balance of September 2011.
Banrisul collected and provisioned R$863 million in taxes and contributions in the year of 2011. Taxes
withheld and paid, which are levied directly on financial intermediation and other payments, amounted to
R$588 million.
The economic scenario in 2010 was characterized by the heterogenic performance of the global economy.
While emerging economies, Brazil amongst them, showed vigorous, robust growth rates, developed
economies presented faltering growth trends, especially Europe and the USA, reason why, throughout the
year, their Governments sought to stimulate economic recovery by developing or maintaining programs
towards fiscal and monetary stimulus.
After moments of euphoria in the first quarter, with asset recovery and decreased risk aversion, the
international financial markets operated more cautiously, especially after the outbreak of the European
fiscal crisis, reflecting the fear of new recessionary relapse. Indeed, the belief in a global economic recovery
slower and more uneven than the initial expectation enhanced capital flows to developing countries,
exacerbating the imbalance in the foreign exchange market, the so called foreign exchange war.
Brazil's GDP grew by 7.5% in 2010, with domestic demand as the main engine, fueled by payroll expansion
and the strengthening of the credit market. Such factors, combined with the sharp interest rate, helped
keep the Brazilian Real appreciated over the period, a phenomenon similar to what happened to so-called
emerging currencies. At the end of 2010, the foreign exchange ratio was R$1.67/USD1.00.
Price indexes, in turn, presented an erratic behavior. Even after the economic activity having shown some
stabilization since the second quarter, upward pressures from hikes in commodity prices adversely affected
the current inflation levels as well as the forming of future expectations. The IPCA grew 5.91% in 2010. The
inflationary pressures reflected in the increase of the Selic rate to 10.75% from 8.75% annually, level
maintained at year-end.
In the regional scene, indicators, show that throughout 2010 the economy of Rio Grande do Sul presented a
robust performance, in line with Brazil and the other states of the Southern Region. GDP at market prices
reached R$228.3 billion in 2010, an increase of 7.8%, recovering from the 0.8% fall recorded in the previous
year.
In the banking segment, the credit supply expansion took place in an environment of reduced interest
rates, lower delinquency and longer terms. The credit/GDP ratio reached 46.6% in December 2010 and the
balance of total credit operations within the National Financial System totaled R$1,703.7 billion, an
increase of 20.5% in twelve months.
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Banrisul ended 2010 with consistent equity growth and with favorable profitability and solvency indicators.
The expansion of the loan portfolio, in line with the greater dynamism of both national and regional
economic activity, constituted the predominant strategy of asset allocation in 2010.
We have room to sustain the growth of our operations, given the Basel Ratio of 16.1% in December 2010.
Our operating cost indicators, determined by the ratio of administrative costs in relation to total assets or
in relation to income generation maintained the downward trend, as is evidenced by our operating cost
and efficiency indicators, which were 5.3% and 47.8% In December 2010, respectively.
Net income reached R$741.2 million in 2010, R$200.1 million or 37.0% above the result recorded in 2009. It
is a significant result, not impacted by non-recurring events. Our performance reflects measures adopted to
support credit growth and service expansion, here included the growth of the Banricompras network. In
comparison to 2009, credit and leasing revenues increased by R$636.0 million in 2010, while service fess
grew R$62.3 million. Efforts towards recovering loans written off as losses and reducing costs also
contributed significantly to the performance. Revenues from debt recovery added R$135.4 million to
2010’s income, R$47.8 million higher than in 2009.
The net income in 2010 is equivalent to a 20.4% return on the average shareholders’ equity. In December
2010, our shareholders’ equity reached R$3,855.2 million, a 13.1% increase over the balance registered in
December 2009.
Total assets reached R$32,127.7 million in December 2010, 10.5% higher than December 2009. Among the
assets operations, credit portfolio delivered the best performance, mainly from credit operations with
Individuals.
Our credit operations totaled R$17,033.2 million at the end of December 2010, an increase of 27.0% over
the same month last year. The commercial credit portfolio totaled R$13,130.6 million, an increase of 29.9%
in twelve months. The commercial credit with individuals totaled R$7,398.4 million at the end of December
2010 an expansion of 36.5% when compared to December 2009. Commercial credit to corporations totaled
R$5,732.2 million in December 2010, an increase of 22.3% in twelve months.
Funds raised and under management reached R$25,090.8 million in December 2010, a nominal growth of
14.6% in comparison to the amount recorded in December 2009. Deposits reached R$19,053.0 million in
December 2010, an increase of 16.4% over December 2009. Assets under management reached R$6,037.8
million, 9.1% higher than December 2009.
b.
Capital structure and possibility of redemption of shares or quotas:
Fully subscribed paid-up capital as of December 31, 2012 is R$3,500,000 and it is represented by 408,974
thousand shares without par value. From January to December of 2012, 34,410 PNA shares were converted
into PNB shares. The Extraordinary Shareholders’ Meeting held on April 30, 2012, approved of a capital
APRIL 30, 2013
62
increase through use of Earnings Reserves in the amount of R$300,000, without the issuance of new shares,
already approved by the Brazilian Central Bank.
ON
Amount
(*)
%
PNA
Amount
(*)
%
PNB
Amount
(*)
%
Total
Amount
%
Rio Grande do Sul State.........................
204,199,859
99.6
2,721,484
76.8
26,086,957
13.0
233,008,300
57.0
Fundação Banrisul de Seguridade Social
(pension plan)...................................
449,054
0.2
158,983
4.5
0
0.0
608,037
0.1
Social Security Institute of Rio Grande do
Sul State .......................................
44,934
0.0
168,612
4.8
0
0.0
213,546
0.0
Market ...................................................
349,527
0.2
493,698
13.9
174,301,369
87.0
175,144,594
42.8
205,043,374 100.00
3,542,777
100.00
Total ....................................................
(*)
200,388,326 100.00
408,974,477 100.00
Classes of shares – ON (Ordinary), PNA and PNB (Preferred shares defined as follow).
Fully subscribed paid-up capital as of December 31, 2011 is R$3,200,000 and it is represented by 408,974
thousand shares without par value. In fiscal year 2011, 88,172 PNA shares were converted into PNB shares.
The Extraordinary Shareholders' Meeting held on April 29, 2011 approved the capital increase through the
use of revenue reserves in the amount of R$300,000 without the issuance of new shares. This capital
increase has been approved by the Central Bank of Brazil.
ON
Amount
(*)
PNA
(*)
PNB
Amount
204,199,859
99.6
2,721,484
76.1
26,086,957
13.0
233,008,300
57.0
(pension plan)...................................
449,054
0.2
158,983
4.4
0
0.0
608,037
0.1
Social Security Institute of Rio Grande
do Sul State .......................................
44,934
0.0
168,612
4.7
0
0.0
213,546
0.0
349,527
0.2
528,108
14.8
174,266,959
87.0
175,144,594
42.8
205,043,374 100.00
3,577,187
100.00
200,353,916
100.00
Market ...................................................
Total ....................................................
(*)
Amount
Total
%
%
(*)
%
Amount
%
408,974,477 100.00
Classes of shares – ON (Ordinary), PNA and PNB (Preferred shares defined as follow).
Fully subscribed paid-up capital as of December 31, 2010 is R$2,900,000 thousand and it is represented by
408,974 thousand shares without par value. The Extraordinary Shareholders’ Meeting held on April 30,
2010 approved a capital increase by using the earnings reserve in the amount of R$300,000 thousand, with
no issuance of new shares, already homologated by BACEN.
APRIL 30, 2013
63
ON
Amount
(*)
%
PNA
Amount
(*)
%
PNB
Amount
(*)
Total
%
Amount
%
204,199,859
99.6
2,721,484
74.2
26,086,957
13.0
233,008,300
57.0
(pension plan)...................................
449,054
0.2
158,983
4.3
0
0.0
608,037
0.1
Social Security Institute of Rio Grande
do Sul State.......................................
44,934
0.0
168,612
4.6
0
0.0
213,546
0.0
349,527
0.2
616,280
16.8
174,178,787
87.0
175,144,594
42.8
205,043,374 100.00
3,665,359
100.00
200,265,744
100.00
Market ...................................................
Total ....................................................
408,974,477 100.00
Banrisul increased the percentage of operations financed by third party capital in 2012, now reaching
89.5% when compared to the ratios of 88.3% in 2011 and of 88.0% in 2010.
Operations Financing Pattern
2012
2011
2010
Own Capital
4,896
10.5%
4,401
11.7%
3,857
12.0%
Third Party Capital
41,675
89.5%
33,185
88.3%
28,271
88.0%
Total Capital
46,571
100.0%
37,586
100.0%
32,128
100.0%
(i) Events of redemption
(ii) Formula for calculation of the redemption amount
There are no events of redemption of shares issued by the Company, other than those set forth by
legislation.
c.
Payment capacity with respect to financial obligations assumed
Banrisul’s liquidity position benefits from our funding characteristics, through an extensive network, in
particular in the State of Rio Grande do Sul, in other locations in the Southern Region and in other Brazilian
states. We also prioritize widespread transactions in credit operations, the main type of asset, and primarily
operate with individuals and small and medium-sized companies. Deposits are our main funding source.
The treasury policy was not modified in 2012, although the allocation in treasury assets had shown a higher
growth over credit assets allocation, position that differs to that recorded in 2011, due to the foreign
funding bond issuances held in December 2012 in the amount of USD275 million, whose proceeds will be
directed to credit assets throughout 2013. Total net available funds continue to be invested in government
bonds indexed to the SELIC rate, in Financial Treasury Bill (“LFTs”), or in repurchase transactions, always
APRIL 30, 2013
64
backed by government bonds, with no exposure to foreign exchange rates, swap or derivative transactions.
The Bank participates in transactions involving derivative financial instruments in the form of swaps and
forward currency contracts, recorded in balance sheet and memorandum accounts, which are intended to
meet own needs to manage its global exposure. The use of derivative financial instruments is
predominantly aimed to mitigating risks arising from currency swings of the external funding operation
conducted by Banrisul and cited in Notes 11 and 13 of the Financial Statements, which results in the
conversion of these rates to the variation of the CDI rate. With this purpose, swap operations with
derivative financial instruments are long term, accordingly to the flow and tenor of the external funding,
while forward currency transactions are short-term, maturing as portions of the external funding are
protected by natural hedge. Such operations are based on OTC contracts registered in the Custody and
Settlement Chamber (CETIP) and have as counterparties top-tier financial institutions. The Bank uses hedge
accounting practices laid down by the Central Bank of Brazil, and the effectiveness expected from the
designation of hedging instruments and in the course of the operation is in accordance with the provisions
of the Central Bank of Brazil.
Banrisul has financial capacity, confirmed through technical studies developed internally, and intents to
hold to maturity securities classified as "held to maturity", as provided in Article 8 of Circular no. 3,068 of
the Central Bank of Brazil, dated November 08, 2001.
The table below sets forth our average asset and liability terms for 2012, showing our payment capacity
with respect to financial obligations assumed:
Table 3: Assets and Liabilities by Maturity
R$ Million
No
maturity
Up to 3 From 3 to 1 to 3 3 to 5 5 to 15 Over
months 12 months years
years
years
years
15
Total
ASSETS
Current and Long-term
Cash
Interbank Investments
(1)
Securities and Derivatives
Lending, Lease and Other Receivables Operations
Other Assets
Permanent Assets
Total Assets
LIABILITIES AND SHAREHOLDERS´ EQUITY
Current and long-term
Deposits
Money Market Funding
Borrowings ans Onlendings
Other Payables
Other Liabilities
Shareholders’ Equity
Total Liabilities and Shareholders’ Equity
809
4,559
33
552
4,202
262
10,417
9,239
0
7,589
306
4,894
22,028
57
4,513
51
4,135
6,918
2,300
7,699
1,743
2,734
4,092
1,460
1
451
4,570
11,103
10,000
4,477
5,552
452
1,762
1,628
918
5,013
5,207
1,535
31
3,960
513
80
586
698
296
294
941
1,078
2
4,307
5,607
6,787
1,829
2,050
3,962
809
4,609
12,361
24,327
4,202
262
46,571
26,746
1,628
3,255
9,445
603
4,894
46,571
APRIL 30, 2013
65
d.
Sources of working capital loans and investments in non-current assets used
We make use of own and third-party funds to conduct our activities.
Own Funds – Shareholders’ Equity
The shareholders’ equity of Banrisul reached R$ 4,894 million at the end of December 2012, 11.2% above
the previous year balance.
The allocation of own funds into different alternatives of active investments is however subject to strict risk
and return assessments. We present level close to the average for large banks of national network and, as
any other Brazilian financial institution, we are required to adjust our capital adequacy based on risk
weight, a methodology developed in July 1988 by the Basel Committee on Banking Supervision, and
implemented including the modifications defined by the Central Bank.
The Basel Accord, modified by the New Capital Accord – Basel II, sets out a minimum ratio of 11% between
capital (Reference Equity – “PRE”) and weighted risks.
The portions that compose the PRE encompass credit, market, exchange, operating, price fluctuation and
commodities price fluctuation risks, in addition to interest rate risks on transactions not included in the
trading portfolio. The total weighted-risk capital ratio required is 11.0%. In December 2012, our weightedrisk capital ratio calculated according to the criteria set forth in the Basel Accord was 18.7%, 7.7 percentage
points above the 11% required.
Third-party Funds
Our widespread funding policy benefits small and medium-sized investors, instead of corporate investors,
such as pension funds and investment funds, which ensure the reduction of financial costs and diversified
funding sources, or non-concentrated funding sources, which policy is adequate to the funding
requirements for extension of new loans.
In December 2012, the main sources of funding were deposits, R$ 26,746 million, representing 64.2% of
third-party sources, the Financial and Development Funds in R$ 5,942 million, comprising 14.3% of
liabilities, followed for loans and onlendings, in R$ 3,255 million, with the participation of 7.8%, money
market funding, R$ 1,628 million, accounting for 3.9% and the subordinated debt, in R$ 1,158, contributing
with 2.8% of total third party funds.
In 2012, total deposit volume reached R$26,746 million, a growth by R$4,385 or 19.6% as compared to
December 2011. The table 4 sets forth the year-end balance of the main third-party funding sources for the
years ended December 31, 2010, 2011 and 2012.
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66
Table 4: Main Funding Sources
R$ Million
2012
Deposits
Demand Deposits
Saving Account
Time Deposits
Other Deposits
Borrowings and Onlendings (1)
Financial and Development Funds
Others (2)
Third Party Resources
26,746
3,400
5,836
17,090
420
1,628
3,255
5,942
1,158
2,945
2011
22,361
3,195
5,136
13,997
33
1,332
2,155
5,099
2,238
33,185
Variation
Variation
2010
R$
%
R$
%
4,385
19.6%
16,370 3,309
17.4%
205
6.4%
2,101
-585
-15.5%
700
13.6%
5,637
-444
-8.0%
3,093
22.1%
8,531 4,317
44.6%
387
1,171.8%
101
21
175.0%
296
22.2%
2,007
21
1.6%
1,100
51.0%
1,482
533
32.9%
843
16.5%
4,140
654
14.7%
1,158
0.0%
1,675
0
0.0%
707
31.6%
25,674
397
21.6%
(¹) Includes borrowings and onlendings Country - Official Institutions and Onlending - Foreign (short and long term), including foreign funding
effected in december/2012 recognized as subordinated debt, as authorized by the Central Bank in January/2013.
2
( ) Includes funds from acceptance of issuance of securities, Interbank and Interbranch, Derivatives and Other payables.
Total deposits
Deposits are our main funding instrument accounting for 64.2% of funding sources at the end of 2012.
Term deposits, encouraged by the trading policy, are carried out with customers distributed throughout the
entire branch network, with pre- or post-fixed charges.
Repurchase or resale transactions with other institutions are used to manage liquidity. Such transactions in
general mature in one business day and are carried out upon the purchase or sale of federal government
bonds and yield defined on the trading date due to the repurchase or resale commitment, however the
case may be. Although spreads relating to such transactions are normally low, such instruments are highly
liquid and maximize cash management.
Funding through repurchase operations complemented, in large part, financial intermediation transactions,
reaching in 2012 the participation of 3.9% over all funding sources. It is observed, the increase of the
balance of these transactions, from 1.6% in 2011, and from 22.2% in 2012. The money market funding
operations are contracted at an average equivalent to 100% of the CDI.
Borrowings and Onlendings
We raise onlendings funds with BNDES, FINAME and Caixa Econômica Federal, in accordance with the
programs defined by such financial institutions. The funds are transferred to our customers based upon
same terms and interest rates, increased by an intermediation commission.
Based on our strategy, we only raise funds in the foreign market when there is a defined fund borrower in
Brazil, without arbitration between foreign exchange rates and risk. The balances of borrowings and
onlendings, both domestically and internationally obtained, accounted for 7.8% of the balance of thirdBANRISUL ANNUAL SHAREHOLDERS’ MEETING
APRIL 30, 2013
67
party liabilities as of December 31, 2012.
We also raise funds abroad for the conduction of foreign exchange transactions. We incur in foreign
exchange variation and pay interest at rates lower than those practiced in the market in connection with
such transactions. At the end of 2012, with the reopening of the issue of subordinated notes held in
January of the same year, the Bank obtained foreign funding included in Borrowings, which is subject to
comments in the Subordinated Debt item below.
Financial and Development Funds
The balance of Financial and Development Funds has substantially increased over the last years, reaching
the participation of 14.3% of liabilities, due to the increase of sources, and also, due the fact that the State
of Rio Grande do Sul, under its statutory discretion, is no longer using such funds.
State Law no. 12,069, which addresses the management of escrow deposits, was enacted in April 2004. In
August 2006, such legislation was amended by Law no. 12,585, which created the State Letter Rogatory
Fund and modified from 70% to 85% the portion of use of the deposited amount by the State Government,
except for those which litigant is a municipality.
However, as of 2007, the State of Rio Grande do Sul reduced the use of the reserve fund to ensure the
refund of such escrow deposits, and any such escrow deposits accounted for 14.3% of the funding sources
for our lending operations at the end of 2012.
Subordinated Debt
In 2012, Banrisul issued its first international debt capital market bond, settled in two tranches that totaled
US$775 million for 10-year subordinated notes maturing in 2022 and coupon of 7.375% p.a., used to
compose its Tier II capital. The first US$500 million tranche took place in late January with a yield to
investors of 7.50% p.a. The second tranche, worth US$275 million, was held in late November, with a yield
of 5.95% p.a., and the approval from the Central Bank of Brazil as Tier II capital granted in January 2013.
e.
Sources of Working Capital Loans and Investments in Non-Current Assets to be Used to Cover Liquidity
Deficiencies
Banrisul adopts a Liquidity Contingency Plan in order to identify, in advance, and adjust the Institution's
ability to meet internal and/or external liquidity crises, minimizing its potential effects on the business
continuity of the Institution in its capacity to generate result and its image.
The Liquidity Contingency Plan and the corresponding policy systematize parameters that identify adverse
situations, the responsibilities of the departments and executives involved in its implementation and the
procedures to be followed to restore the proper level of liquidity.
APRIL 30, 2013
68
Aiming to restoring liquidity levels, the Treasury Committee should immediately propose to the Financial
Office the following measures, singly or cumulatively:
a)
realignment of interest rates charged on credit operations, in order to contemplate the new level of risk;
b) the increase of interest rates offered on funding instruments, in order to halt and reverse observed volume
reductions in funding products;
c)
the implementation of marketing and sales actions to strengthen Banrisul’s brand, including new products,
focusing on reducing image and reputation risks;
d) the contingency of credit operations, to enable greater cash control;
e) the intensification of relationship with other financial institutions seeking funding from interbank deposit
certificates;
f)
the sale of part or all negotiable assets;
g)
the sale of part or all of the loan portfolio classified as trading book in accordance with the Market and
Liquidity Risk Management Policy; and
h) to access, ultimately, the rediscount credit facilities provided by the Monetary Authority.
f.
Indebtedness levels and debt characteristics, also describing:
(i)
Material loan and financing agreements
We are parties to several financing extended using funds arising out of BNDES, FINAME and Caixa
Econômica Federal, wherein our obligation is to transfer part or all of such funds to the end borrower, upon
payment of compensation set forth in the agreement. In specific circumstances, we operate with other
financial institutions for any such purpose, it being understood that each party is held liable for the transfer
of one portion of the financing.
Pursuant to the “Provisions Applicable to BNDES Agreements” (BNDES Resolution n.º 665/87), we are
jointly liable, before BNDES, for the solvency of the end borrowers, and we are also required to extend
credit to BNDES, if so determined by BNDES, and to demand end borrowers to offer personal guarantee on
our behalf, at the minimum amount of 130% of principal, except in the events where BNDES waives such
guarantee.
We also have a supplementary private pension plan managed by Fundação Banrisul de Seguridade Social.
Banrisul, under such plan, has an outstanding debt portion in the amount of R$67 million as of December
31, 2012 (as compared to R$64 million as of December 31, 2011). Such debt is paid increased by interest at
the percentage rate of 6% p.a. and restated based on the variation of the General Price Index – Internal
Availability (IGP-DI), by means of monthly adjustments, with final term in 2028.
APRIL 30, 2013
69
(ii)
Other long-term relationships with financial institutions.
We do not have other long-term relationships with financial institutions.
However, in early 2012, Banrisul debuted in the international market of subordinated debt securities,
obtaining USD500 million in funding for a tenor of 10 years. At the end of 2012, by reopening that issue of
subordinated notes, the Bank held the second international funding in the amount of USD275 million, also
with a term of 10 years.
(iii)
Subordination level between debts
There is no degree of subordination between the debts. However, obligations recorded under Liabilities are
sorted accordingly to their precedence in the likelihood contest from universal creditors, in accordance
with Law no. 11,101, art.83, which ranks credits prioritizing those derived from labor legislation, followed
by credits with collateral, and tax credits. After these, all other claims are considered pursuant to the
aforementioned law.
As for Banrisul, in a potential need of drafting a creditor’s framework and obeying the ordering cited in such
law, we have:
Non Current Liabilities
In Rs Million
Banrisul Consolidated
2012
Tax, Labor and Social Security Liabilities
%
2011
%
2010
%
41,675
100.0%
33,184
100.0%
28,271
100.0%
1,155
2.8%
1,127
3.4%
978
3.4%
Labor
432
1.0%
365
1.1%
324
1.1%
Tax and Social Security
724
1.7%
761
2.3%
654
2.3%
45
0.1%
35
0.1%
24
0.1%
Collected Taxes and Other
Other
39,268
94.2%
31,949
96.3%
27,242
96.4%
Other Payables
1,206
2.9%
74
0.2%
28
0.1%
Subordinated Debt
1,158
2.8%
-
0.0%
-
0.0%
48
0.1%
74
0.2%
28
0.1%
Social and Statutory
Furthermore, as for the subordinated debt, we inform that the Central Bank of Brazil has considered the
previously mentioned foreign funding, in the total amount of USD775 million, eligible as Tier II capital of the
Reference Equity, in the category of Subordinated Debt, according to approvals granted in April 2012 and
January 2013.
(iv) Potential restrictions on the Company, in particular with respect to indebtedness levels and taking out of net
debts, distribution of dividends, disposal of assets, issuance of new securities and transfer of shareholding control
APRIL 30, 2013
70
We are subject to the limits imposed by BNDES for the use of funds based on our reference equity and
upon rating analysis carried out by an independent institution. In the case of onlendings, resources are fully
transferred to the customers with the same maturity and fees, with the corresponding brokerage
commission due to Banrisul. There are no specific restrictions from BNDES regarding operating with
Banrisul aside credit risk limitations. However, there are restrictive clauses regarding BNDES financial
agents, in general, that can be checked in "Provisions Applicable to BNDES Agreements" (Resolution BNDES
no. 665/87), Chapter I - Of the Conditions of Collaboration Use, II – Onlendings Contracts and III – Contracts
for the Financing of Shareholders, and in regulatory updates later issued by BNDES, and which refer to the
suspensive clauses for the use of the Financial Collaboration and of each and every installment originated
from the Financial Collaboration.
Average interest rates of BNDES obligations are shown below by credit line.
Indexing Factor
Line of Credit
Annual Interest Rate
Fixed Interest Rates
BNDES AUTOMATICO PROSOFT
7.00%
CARTÃO BNDES
7.83%
BNDES/FINAMEX PRE-EMBARQUE
1.50%
BNDES FINEM INDIRETO
1.50%
BNDES/PERGIRO
2.50%
FINAME INDUSTRIAL RURAL
1.91%
FINAME MODERMAQ
8.50%
FINAME CAMINHOS DA ESCOLA
1.50%
FINAME CAMINHÕES
1.50%
FINAME COMPONENTES
3.30%
FINAME PACA
3.39%
FINAME PROCAMINHONEIRO
1.50%
FINAME REVITALIZA
3.50%
FINAMEX PRE EMBARQUE
4.67%
Long-Term
Reductor
Interest
Rate
with BNDES/POC 01
UM BNDES-Res 635/87
UR/IPCA
2.74%
BNDES/FINEM/INDIRET DIR 522/2002
1.84%
BNDES/EXIM PRE-EMBARQUE EXPORTAÇÃO
6.53%
BNDES/HOSPITAIS/SUS
2.54%
BNDES PROGEREN
2.58%
BNDES RECONVERSUL
1.00%
BNDES/MUNICIPIOS/SANEAMENTO
3.00%
BNDES SANEAMENTO HOSPITAIS
1.00%
FINAME CAMINHOES
1.00%
FINAME CAMINHOS DA ESCOLA
1.00%
FINAME PACA
1.70%
FINAME PROVIAS
1.00%
FINAME COMPONENTES
1.50%
BNDES/POC MOE RES 635/87
1.82%
BNDES/FINEM/INDIRET DIR 522/2002
2.80%
FINAME/PACA/635
1.23%
BNDES/HOSPITAIS/SUS
8.61%
Regarding onlending operations under Programa Saneamento para Todos (Basic Sanitation Program), we
APRIL 30, 2013
71
follow the rules outlined in the Credit Handbook (FGTS Trustee Council, responsible for the issuance of
rules) issued by Caixa Econômica Federal (CEF) regulating such financings in line with the guidelines of the
Ministry for the Cities. We have entered in agreement with CEF to renew the role of Banrisul as Technical
Operational Agent (ATO), as approved by our legal department and soon to be signed by our Chief Credit
Officer, with the responsibilities for supervising and reinforce funding procedures for projects financed
under the Program. Recently we conducted a study to reclassify Banrisul’s credit risk with CEF in order to
obtain new credit thresholds for future prospective operations. It is also noteworthy that in 2012, as
approved in the Annual Shareholders' Meeting, long-term operations are now limited to 80% of the Bank’s
Shareholders’ Equity.
Indebtedness Levels
Table 5: Funds Raised by Maturity 2012 and 2011
In R$ Million
No maturity
Up to 3 3 to 12 1 to 3 3 to 5 5 to 15 Above 15
2012
months
months
years
years
years
years
Deposits
(a)
Demand
3,400
(a)
Savings
5,836
Interbank
27
243
(*)
Term
3
1,735
4,770
Total Deposits
9,239
1,762
5,013
Market Money Funding
Own Portfolio
1,628
Total Market Money Funding
1,628
Short Term
Long Term
(a)
Classified as without maturity, because there is no contractual maturity date.
(*)
Considered the maturities set for each investment.
2011
16
5,190
5,207
103
1,432
1,535
31
0
31
3,960
3,960
3,400
5,836
420
17,090
26,746
3,195
5,136
32
13,997
22,361
-
-
-
-
1,628
1,628
17,642
10,732
1,332
1,332
15,977
7,716
Table 6: Funds Raised by Maturity 2011 and 2010
In R$ Million
No maturity
Up to 3 3 to 12 1 to
months
months
years
Deposits
(a)
Demand
3,195
(a)
Savings
5,136
Interbank
10
(*)
Term
3
1,709
Other Deposits
Total Deposits
8,334
1,719
Market Money Funding
Own Portfolio
1,332
Total Market Money Funding
1,332
Short Term
Long Term
(a)
Classified as without maturity, because there is no contractual maturity date.
(*)
Considered the maturities set for each investment.
3 3 to
years
5 Above 5
2011
years
2010
4,592
4,592
4,850
4,850
22
317
339
2,527
2,527
3,195
5,136
32
13,997
22,361
3,780
5,580
12
9,680
1
19,053
-
-
-
-
1,332
1,332
15,977
7,716
1,311
1,311
16,912
3,452
Deposits and Money Market Funding
APRIL 30, 2013
72
Funding by means of term deposits is carried out with our customers, with pre- or post-fixed charges,
corresponding to 92% and 8% of total portfolio, respectively. The average funding rate for post-fixed
deposits corresponds to 70.60% (compared to 70.04% in 2011) of CDI variation and, for pre-fixed deposits,
it corresponds to 7.08% (as compared to 9.40% in 2011) per annum. Funding by means of repurchase and
resale transactions, own portfolio, in the money market, carried out with financial institutions, have an
average funding rate of 100% of CDI variation.
Borrowings
Foreign – are represented by funds raised from banks abroad for investment in foreign exchange
transactions based on the foreign exchange variation of the respective currencies plus interest rates
between 2.11% and 5.80% (2011 – 2.48% to 5.50%) per annum, with maximum maturity within up to 1,528
days (2011 – 1,078 days), and presents a balance of R$1,586 million (2011 – R$912 million).
Onlendings
Domestic funds for onlendings basically represent funding from official institutions (BNDES, FINAME and
Caixa Econômica Federal). Such obligations have monthly maturities up to December 2028, with financial
charges on post-fixed transactions of 0.50% to 8.61% (2011 – 0.50% to 8.61%) per annum, in addition to the
variations of indexes (TJLP, U.S. dollar and Currency Basket), and on pre-fixed transactions up to 11.00%
(2011 – 11.00%) per annum. Funds are transferred to customers on the same maturity dates and funding
rates, increased by the intermediation commission. The collaterals received for the corresponding loans
were transferred to secure such funds.
Domestic and international onlendings are shown in details in tables 7 and 8.
Table 7: Onlendings 2012 and 2011
R$ Million
Domestic Onlendings
Official Institutions
2012
2011
Foreign Onlendings
Total
2012
2012
2011
Up to 3 months
128
95
1
3 to 12 months
311
224
25
1 to 3 years
584
383
-
3 to 5 years
294
235
Above 5 years
326
Total
8
2011
129
103
336
224
584
405
-
294
235
276
-
326
276
22
1,644
1,213
26
30
1,669
1,243
Short Term
439
319
26
8
465
327
Long Term
1,205
894
-
22
1,205
916
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Table 8: Onlendings 2011 and 2010
R$ Million
Domestic Onlendings
Official Institutions
2011
Foreign Onlendings
2010
2011
Total
2010
2011
2010
Up to 3 months
95
249
2011
7
103
256
3 to 12 months
224
61
8
12
224
73
1 to 3 years
383
325
5
405
330
3 to 5 years
235
187
1
235
188
276
236
25
1,243
1,083
Above 5 years
22
276
236
1,213
1,058
Short Term
319
310
30
19
327
329
Long Term
894
748
8
6
916
754
Total
g.
Limits of use of financing already taken
Given the characteristics of our indebtedness, the long-term transactions are subject to statutory hiring limits of.
According to article 14 of the Banrisul’s Bylaws, "the long-term transactions carried out with funds from the BNDES
onlendings are limited to 80% (eighty percent) of the Shareholders’ Equity of the company". In the event of
onlendings, the releases of the amounts can be carried out on regular basis in accordance to the total amount
negotiated. In 2012, the amount of R$722 million was hired via BNDES onlendings, of which 78.9% has already been
used. In relation to onlendings from Caixa Econômica Federal, no operation was contracted in the period; however,
the amount of R$14 million were released in operations contracted in previous years.
h.
Material changes in each line item of the financial statements
Year ended December 31, 2012 compared to the year ended December 31, 2011
The tables 9 and 10 set forth simplified versions of our consolidated income statement and consolidated balance
sheet for the fiscal years ended December 31, 2012 and 2011.
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Table 9: Income Statement for Fiscal Years 2012 and 2011
2012
2011
R$ Million
Variation
Variation
R$
%
6,346
5,947
400
Credit Revenues
4,611
4,277
334
7.8%
Lease Revenues
13
16
(3)
-18.4%
1,081
1,250
(169)
-13.6%
Derivatives Revenues
207
0
207
-
Foreign Exchange
107
140
(34)
-23.9%
Compulsory Investments Revenues
298
263
35
13.2%
29
0
29
-
(3,468)
(3,208)
(260)
8.1%
(1,986)
(1,795)
(191)
10.6%
(630)
(783)
154
-19.6%
-
-
-
-
(852)
(630)
(223)
35.4%
Revenues from financial intermediation
Securities Revenues
Revenues from sales or transfers of financial assets
Expenses of Financial Operations
Funding Operations
Borrowings, Assignments and Onlendings
Derivatives
Allowance for Loan Losses
Other Operating Income/Expenses
Income from Services Rendered
6.7%
2,878
2,739
140
5.1%
(1,675)
(1,366)
(308)
22.6%
196
154
42
27.4%
42
603
548
55
9.9%
(1,234)
(1,101)
(133)
12.0%
Other Administratives Expenses
(861)
(741)
(120)
16.2%
Tax Expenses
(258)
(232)
(26)
11.1%
1
-
Bank Fees Income
Personnel Expenses
Equity in Subsidiaries
1
250
243
7
2.7%
(371)
(237)
(134)
56.7%
Operating Income
1,204
1,372
(169)
-12.3%
Income Before Taxes on Income and Employee Profit
1,204
1,372
(169)
-12.3%
Income Tax and Social Contribution
(309)
(406)
97
-23.8%
(76)
(62)
(14)
21.9%
(0)
(0)
0
-18.7%
819
904
(86)
-9.5%
Other Operating Income
Other Operating Expenses
Employee Profit Sharing
Minority Interest
Net Income
Net income
Banrisul’s net income in 2012 reached R$818.6 million, 9.5% (R$85.8 million) lower than 2011. The results show the
slowdown in credit and treasury revenue and higher delinquency rates, as well as the increase of administrative and
operational expenses, associated with the issuance of the subordinated debts, with the prospection for new business
strategies, and the improvements in compliance mechanisms.
From 2011 to 2012, net income was influenced (i) by lower growth of net interest income, which increased R$363
million, (ii) by the increase in administrative expenses coming from the acquisition of the payroll sales company, the
external issuances and the increase of the workforce, (iii) by higher expenses with credit provisions, R$223 million,
due to the increase in delinquency, (iv) the increase in other operating expenses of R$134 million recorded from
compliance review on labor and civil lawsuits, and (v) by the increase of R$97 million in banking fees.
A comparison between the main income accounts in the fiscal years ended December 31, 2012 and 2011 is presented
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below.
Revenues from Financial Intermediation
Financial income totaled R$6,346 million in 2012, 6.7% (R$400 million) more than in 2011. The growth of financial
income in 2012, compared to 2011, is related to the increase of R$360 million in revenues from credit and leasing and
from the sale or transfer of financial assets, driven by the increase of 19.3% in the balance of credit, by the increase of
R$38 million in the income from securities and derivatives due to variations of the foreign exchange rate and to the
mark-to-market of forward contracts and swaps, by the growth of R$35 million in the results of compulsory deposits,
offset by the decrease of R$34 million in the income from foreign exchange transactions.
Revenues from Credit and Leasing Operations
Revenues from credit and leasing operations and from sales or financial assets transfer operations totaled R$4,653
million in 2012, 8.4% (R$360 million) above the amount reported in 2011. The increase in the revenues from credit,
leasing and sale or transfer of financial assets in 2012 was driven by the increase in the volume of credit assets, in
R$3,934 million, in comparison to last year’s results. The increase in credit revenue was mainly influenced by revenues
from commercial credit, which increased by R$250 million, by revenue from real estate loans, which increased by
R$33 million, by revenues from credit recovery, which increased by R$31.2 million, and by the revenues from
agricultural loans, which registered an increase of R$29.3 million.
Revenues from Securities and Derivatives
Revenues from securities and derivatives totaled R$1,288 million in 2012, 3.0% (R$38 million) above the amount
reported in 2011. From 2011 to 2012, the increase revenues from securities and derivatives is mainly due to markingto-market swap contracts made to mitigate risks of fluctuations in foreign currency linked to the foreign subordinated
bond, which absorbed the reduction in the income resulting from treasury allocations. The increase in treasury income
was absorbed by the increase in the cost of foreign debt, recorded under funding costs, and also influenced by
exchange rate variations.
Revenues from Foreign Exchange
The revenues from foreign exchange transactions totaled R$107 million at the end of December 2012, 23.9% (R$34
million) below the amount reported in 2011. In 2012, the decrease in the results from foreign exchange operations is
related to the 8.9%, currency devaluation, in opposition to the 12.6% currency devaluation registered at the end of
2011. Foreign exchange operations in Banrisul are matched to their funding in foreign currencies and, hence, any
variation in revenues is proportionally offset by the similar movement in costs with foreign currency loans and
onlendings.
Revenues from Restricted Deposits
Results from compulsory allocations reached R$298 million in 2012, 13.2% (R$35 million) above the amount recorded
in December 2011. Compared to 2011, revenues from compulsory deposits increased in 2012 especially due to the
R$26 million growth in reserve requirement revenues from time deposits, and also from the R$18 million revenues
related to the additional compulsory deposits, offset by the income reduction of R$10 million in relation to reserve
requirements over savings. The increase in the balances of time deposits and savings impacted the income increase of
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the period, as well as the drop of the Selic rate influenced the reduction in income from reserve requirement deposits
over savings, due to changes on their remuneration since May 2012.
Financial Expenses
Financial expenses totaled R$3,468 million in 12M12, an increase of 8.1% (R$260 million) over December 2011. Higher
financial expenses from December 2011 to December 2012 are due to the increase of 35.4% (R$223 million) in
expenses for loan loss provisions, arising from the growth of the credit portfolio and also of delinquency, and the
increase of 10.6% (R$191 million) in market funding expenses as a result of marking-to-market the subordinated bond
and exchange rate variation, but partially offset by the decrease of 19.6% (R$154 million) in borrowings and
onlendings expenses. The increase in expenses from the subordinated debt also increased the revenue from
derivatives, as both debt and swap instruments were marked to market.
Expenses with Market Funding Operations
Market funding expenses totaled R$1,986 million in 12M12, 10.6% (R$191 million) above the amount aggregated in
2011. The higher flow of funding expenses from 12M11 to 12M12 came especially from the R$340 million related to
mark-to-market and exchange rate impacts and from the expenses on the forward contracts of the subordinated debt
operation, partially offset by lower time and savings deposits expenses (in the amount of R$117 million) and expenses
from repurchase agreements (in R$57 million). The reduction in time and savings deposits expenses was influenced by
the reduction in the Selic rate, especially due to the change in savings remuneration that, since May 2012, has been
indexed to the Selic rate trend. The increase in funding expenses results from marking-to-market the subordinated
debt, partially offset by the increase in treasury gains due to the mark-to-market of the swap contract entered with in
order to mitigate the risk of currency fluctuations on the foreign funding.
Expenses with Borrowings and Onlendings
Expenses with borrowings and onlendings totaled R$630 million in 12M12, 19.6% (R$154 million) below the amount
recorded in the last year. In 12M12, borrowing and onlendings expenses decreased over 12M11, driven especially by
the decrease of R$74 million in escrow deposits reserve fund expenses, due to the reduction of 3.13 pp. of the
(effective) Selic rate, and to the decrease of R$50 million in expenses with foreign exchange transfers.
Financial Margin
Net interest income reached R$3,731 million in 12M12, 10.8% (R$363 million) higher than that of 12M11. Net interest
income in the period was influenced especially by the slowdown in credit revenues, impacted by lower average credit
rates, by marking-to-market the subordinated debt and swap contracts, and by lower expenses with borrowings and
onlendings as the outcome of the drop of the Selic rate.
The expenses with allowance for loan losses totaled R$852 million at the end of 2012, 35.4% (R$223 million) above
the amount reported in the year 2011. Expenses with allowance for loan losses increased from 12M11 to 12M12 on
account of the growth of 19.3% of the credit portfolio and of 64.1% in credit operations 60 days past due.
Revenue from Services Rendered
Revenues from services and banking fees totaled R$798 million in 12M12, 13.8% (R$97 million) more than in 12M11.
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The increase in revenue from services and fees from 12M11 to 12M12 is mainly due to (i) the R$22 million in
collection service fees, impacted by increasing insurance brokerage fees, (ii) the R$16.4 million growth in revenues
from checking account fees, (iii) fees from Banricompras’ (R$11 million increase), on account of the growth of 14.3% in
the financial turnover and of 9.9% in the number of transactions, (iv) the R$6 million from pool groups’ management
fees, on account of the 24.4% growth in the number of participants, and (iv) the increase of R$4 million in fees from
direct debit.
Administrative Expenses
In 2012, administrative expenses totaled R$2,095 million, 13.7% (R$253 million) above the amount recorded in 2011.
Personnel expenses, which make up for 58.9% of total accumulated administrative costs in 2012, posted an increase
of 12.0% (R$133 million) over the amount recorded in 2011, a trend accompanied by other expenses administrative,
which registered growth of 16.2% (R$120 million) in the year.
The increase in personnel expenses from 2011 to 2012 is due to the wage increase and the addition of 1,222 new
employees to the total headcount. The variation of other administrative expenses came especially (i) from R$63
million with third-party services and with financial system expenses, related to the structuring and issuance of the
foreign subordinate bond and to commissions and fees paid to investment banks, legal advisors, auditing and
consulting firms that participated in the foreign debt bonds and in the Credimatone deal, (ii) from the increase of R$21
million with data processing and telecommunications expenses, (iii) from the increase of R$18 million with security
and money transportation expenses, on account of the expansion of the branch network, and (iv) the evolution of the
costs of advertising, promotions and publicity, in R$10 million.
Other operating income totaled R$250 million in 12M12, 2.7% (R$7 million) above the amount recorded in the last
year. In 2012, the increase in other operating income can be explained by the R$19 million growth in revenues from
the reversal of operating provisions and the R$7 million increase in insurance commission and management fees,
while offset by a decrease of R$12 million in revenues from the Escrow Deposits Reserve Fund revenues.
In 12M12, other operating expenses totaled R$371 million, 56.7% (R$134 million) higher than those of 12M11. From
12M11 to 12M12, the growth of other operating expenses was especially influenced by the increasing flow of civil and
labor lawsuits provisions (R$69 million), arising from review of compliance mechanisms, the higher expenses with
discounts on credit renegotiations (R$25 million).
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Table 10: Balance Sheet 2012 and 2011
2012
2011
R$ million
Variation
Variation
R$
%
ASSETS
Current
25,997
19,230
6,768
35.2%
809
624
185
29.6%
4,609
2,686
1,923
71.6%
5,780
2,528
3,252
128.7%
Interbank Accounts
2,921
2,918
2
0.1%
85
46
40
86.5%
Lending Operations
9,819
8,931
888
9.9%
Leasing Operations
36
36
(0)
-0.3%
1,870
1,439
431
30.0%
Cash
Interbranch Accounts
Other Credits
Other Assets
68
22
46
206.6%
20,311
18,077
2,234
12.4%
6,581
7,198
(617)
-8.6%
Interbank Accounts
680
625
54
8.7%
Lending Operations
11,860
9,547
2,313
24.2%
Long-Term
Leasing Operations
38
38
0
1.1%
Other Credits
1,140
659
480
72.8%
Other Assets
12
10
3
26.5%
Permanent
262
279
(17)
-5.9%
Investments
48
8
41
544.4%
167
164
4
2.2%
47
108
(61)
-56.7%
46,571
37,586
8,985
23.9%
Current
27,047
23,887
16,014
14,646
3,159
1,368
13.2%
Deposits
1,628
1,332
296
22.2%
28
27
1
4.5%
5
6
(1)
-8.9%
248
211
37
17.7%
Borrowings
966
908
58
6.4%
Onlendings in the Country
439
319
120
37.7%
Onlendings Abroad
26
9
17
197.0%
Derivative Financial Instruments
23
-
23
0.0%
7,669
6,431
1,238
19.3%
Long-Term
14,628
9,297
10,732
7,715
5,331
3,017
57.3%
Deposits
287
-
287
0.0%
9
12
(3)
-25.8%
15817.5%
Property in Use
Intangible
TOTAL ASSETS
LIABILITIES
Funds from Acceptances Issue of Securities
Intebank Accounts
Other Payables
Intebank Accounts
Borrowings
Onlendings Abroad
Other Payables
Minority Interest
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
9.3%
39.1%
620
4
616
1,205
894
311
34.7%
-
22
(22)
-100.0%
1,776
650
1,125
173.0%
2
2
0
5.1%
4,894
4,400
495
11.2%
46,571
37,586
8,985
23.9%
APRIL 30, 2013
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Total Assets
Total assets reached R$46,571 million in December 2012, and are composed of (i) of loans (52.2% of total assets), (ii)
of securities and interbank deposits (36.4%), (iii) of interbank and interbranch accounts (7.9%), and (iv) of other assets
(3.5%). As to durations, assets are mostly short term. Over the last twelve months, the 23.9% (R$8,985 million)
expansion in the balance of assets at was especially originated from the growth of deposits (R$4,385 million) and of
the subordinated debt (R$1,158 million), the growth of loans and onlendings (R$1,100 million), impacted by the
foreign funding issuance of December 2012, whose balance reached R$618 million, and the increase in the financial
and development funds (R$844 million). Funds raised were partly invested in securities and interbank deposits, which
presented an increase of R$4,559 million, and in the loan portfolio, which grew by R$3,934 million.
Securities
Securities, derivatives, and interbank investments totaled R$15,343 million in December 2012, growth of 38.5%
(R$4,263 million) from December 2011. This amount excludes total liabilities from matched transactions. The
expansion of deposits, financial and development funds, external funding and equity financed the increases observed
both in securities and in credit operations.
Interbank and Interbranch Transactions
Interbank and interbranch transactions reached R$3,686 million in December 2012, 2.7% (R$96 million) higher than
December 2011. In comparison with December 2011, the balance of interbank and interbranch transactions
increased, influenced especially by the growth of R$54 million in credits linked to the Salary Variation Compensation
Fund.
Credit Operations
Banrisul’s credit portfolio totaled R$24,327 million in December 2012, an increase of 19.3% (R$3,934 million) over
December 2011.
Breakdown of Credit by Company Size
Credit operations to corporations totaled R$11,657 million in December 2012, equivalent to 47.9% of the total loan
portfolio. Credit to companies increased 18.3% from December 2011. In twelve months, the most significant variation
occurred in credit to mid-sized companies, with an increase of R$1,160 million, followed by credit to large companies,
with an increase of R$892 million. Micro-, small- and medium-sized companies represented 68.8% of the total
portfolio of credit to companies and 33.0% of total credit portfolio.
Breakdown of Credit by Sector
When loan portfolio is divided by segment, private sector increase its representativeness by 19.4% (R$3,940 million) in
the past twelve months, reaching 99.5% of the credit assets in December 2012. At the end of 2012, individuals (with
39.8%), industry (with 19.0%) and services and others (with 12.6%) were the sectors with higher stakes over the total
loan book. Compared to December 2011, loans to individuals stand out, with an increase of R$1,593 million, seconded
by the service sector (increase of R$834 million), followed by the industry sector (growth of R$583 million) and real
estate (increase of R$505 million).
Breakdown of Credit by Portfolio
The breakdown of credit by portfolio presents both unmarked and directed allocation in loan assets. The commercial
(non-earmarked) portfolio, leasing, credits linked to acquired portfolio with recourse and public sector are freely
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funded from time deposits and equity and, in December 2012, composed 75.3% of the total credit portfolio.
Development (long-term finance), agricultural, real estate financing and foreign exchange portfolios, which are mostly
supported by specific funding sources and are used for mandatory credit allocation, detained 24.7% of total credit
allocation in the same.
The commercial (non-earmarked) credit portfolio, which comprises 72.7% of Banrisul’s total loan book, ended
December 2012 with the balance of R$17,698 million. In relation to December 2011, this credit portfolio grew 15.9%
(R$2,427 million).
Within the commercial credit portfolio, credit to individuals corresponded, in December 2012, to 52.3% of the balance
of the commercial portfolio and of 38.0% of the total loan book. Credit to companies represented, in the same period,
47.7% of the balance of commercial credit and 34.7% of the total stock of credit.
In accordance with National Monetary Council’s Resolution no. 3533 and Central Bank of Brazil’s Circular Letter no.
3543, operations dealing with the sale or transfer of financial assets have had their account entries changed. Hence,
from January 2012 on, the balance of acquired payroll loans with recourse was classified to other receivables,
therefore no longer composing the balance of the commercial portfolio of the Bank, which amounted to R$419 million
in December 2012.
The real estate finance totaled R$2,246 million in December 2012, an increase of 29.0% (R$505 million) in twelve
months. The institution’s performance in the real estate loans portfolio in 2012 was influenced by the conclusion of
several agreements, investments in employee training and qualification as well as by the participation by the Bank as
the financial agent of “Pense Imóveis” (real estate fair). Under the balance of the real estate portfolio it is included the
amount of R$109 million related to a Certificate of Real Estate Receivables (with recourse) operation held in
December 2012.
The balance of the agricultural loans totaled R$1,812 million in December 2012, an increase of 6.3% (R$107 million) in
twelve months.
The long-term finance totaled R$1,312 million in December 2012, an increase of 43.1% (R$395 million) in twelve
months.
The foreign exchange portfolio totaled R$648 million in December 2012, 16.3% (R$91 million) higher than the balance
recorded in December 2011.
Breakdown of Credit by Rating
Credit operations rated between AA and C, normal risk according to Resolution no. 2682/99 of the National Monetary
Council, accounted for 89.5% of the credit portfolio in December 2012, increase of 0.4 pp. over last year’s.
Allowance for loan losses totaled R$1,591 million in December 2012, representing 6.5% of the total loan portfolio, the
same proportion recorded in December 2011. The increase in the allowance for loan losses was driven by the growth
in the loan portfolio and the increase in the amount of overdue transactions.
The breakdown of the allowance for loan losses in December 2012, according to Resolution no. 2682/99 of the
National Monetary Council, was as follows:
R$592 million for operations with installments 60 days overdue;
R$861 million for contracts due or less than 60 days overdue; and
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R$138 million relating to the excess allowance to the minimum required by Resolution no. 2682/99 of the
National Monetary Council, established based on periodic review carried out by the administration of the
quality of the customer, in order to cover possible events not identified by internal customer rating model.
Funds Raised and Under Management
The funds raised and managed reached R$40,985 million at the end of December 2012, the balance 20.2% or R$6,887
million higher than the same month last year.
Demand Deposits
Demand deposits accounted, in December 2012, for 10.0% of the total funding raised by Banrisul, reaching the
amount of R$3,400 million. Compared to December 2011, the amount of demand deposits increased 6.4% (R$ 205
million), driven by the growth in the deposits from the public sector.
Savings Accounts
Savings deposits totaled R$5,836 million at the end of 2012, totaling 17.2% of the funds obtained by Banrisul. Savings
balance grew 13.6% (R$700.0 million) year-on-year. The growth of savings deposits in period can be explained by the
appeal of the yield of the product as a result of the drop of the Selic Rate, even after the changes in its interest rates.
Time Deposits
Time deposits are the main funding vehicle for Banrisul, amounting to 50.5% of total funds raised. In December 2012,
the balance of time deposits totaled R$17,090 million, an increase of 22.1% (R$3,093 million) over the same month
last year. The inception of a new type of time deposit targeted to highly liquid investors, with differentiated terms and
interest rates, and the reduction of the minimum amounts for automatic application influenced the increase of the
funding item in the last twelve months.
Financial and Investment Funds (Escrow Deposits - FRDJ)
The financial and Investment funds totaled R$5,942 million in December 2012, 16.5% (R$844 million) above the
amount in December 2011.
Subordinated Debt
The subordinate debt amounted to R$1,158 million at the end of December 2012, the amount resulting from the
foreign debt issue of 10-year tenor USD500 million matures was settled in February 2012. In May 2012, hedge
accounting procedures related to the subordinated debt were structured, from which the foreign debt and the
hedging instruments are marked to market.
At the end of 2012, by reopening the issue of subordinated bond held in January of the same year, the Bank made an
additional funding, USD275 million, maturing in 2022. The amount of this issue, in December 2012, was R$618 million.
In January 2013, the Central Bank of Brazil approved the issue to be classified as Tier II capital of the type of
subordinated debt.
Assets under Management
Assets under management totaled R$7,138 million at the end of December 2012, accounting for 17.4% of the funds
raised and managed, 7.5% (R$500 million) higher than in December 2011. The increases seen in the AUM portfolio
from December 2011 to December 2012 are explained mainly by the growth of fixed income funds, offset by the
reduction of referenced funds.
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Banrisul’s shareholders’ equity reached R$4,894 million in 2012, expansion of 11.2% (R$495 million) in comparison to
2011. The variations in shareholders’ equity are related to the addition of net income proceeds over the past twelve
months, reduced by the payments of dividends and interest on equity.
Return on average shareholders’ equity stood at 17.6% p.a. in 2012, year-on-year reduction of 4.3 pp. in an
environment marked by lower credit rates, higher delinquencies and administrative and operational expenses, these
arising from the strategy of business expansion and improvements in the compliance mechanisms in the provisioning
of judicial proceedings.
Year ended December 31, 2011 compared to the year ended December 31, 2010
The tables 11 and 12 set forth simplified versions of our consolidated income statement and consolidated balance
sheet for the fiscal years ended December 31, 2011 and 2010.
Table 11: Income Statement for Fiscal Years 2011 and 2010
2011
2010
R$ Million
Variation
Variation
R$
%
5,947
4,842
1,105
22.82%
Credit Revenues
4,277
3,498
780
22.29%
Lease Revenues
16
15
1
3.77%
1,250
1,082
168
15.54%
140
55
86
157.23%
263
192
71
36.85%
(3,208)
(2,445)
(763)
31.19%
(1,795)
(1,403)
(393)
27.99%
(783)
(523)
(260)
49.75%
-
(1)
1
-
(630)
(518)
(111)
21.45%
Revenues from financial intermediation
Securities Revenues
Foreign Exchange
Compulsory Investments Revenues
Expenses of Financial Operations
Funding Operations
Borrowings, Assignments and Onlendings
Derivatives
2,739
2,396
342
14.28%
(1,366)
(1,249)
(118)
9.43%
Income from Services Rendered
154
151
2
1.56%
Bank Fees Income
548
490
58
11.82%
(1,101)
(966)
(134)
13.90%
Other Administratives Expenses
(741)
(743)
2
-0.25%
Tax Expenses
(232)
(204)
(28)
13.88%
243
209
34
16.29%
(237)
(185)
(51)
27.63%
Operating Income
Income Before Taxes on Income and Employee Profit Sharing
1,372
1,148
224
19.56%
1,372
1,148
224
19.56%
Income Tax and Social Contribution
(406)
(357)
(49)
13.60%
(62)
(49)
(13)
26.12%
(0)
(0)
0
-32.43%
904
741
163
22.00%
Other Operating Income/Expenses
Personnel Expenses
Employee Profit Sharing
Minority Interest
Net Income
APRIL 30, 2013
83
Net Income
Banrisul's net income of R$904 million in 12M11 is 22% (R$163 million) above December 2010's. From 2010 to 2011,
the Bank's performance positively reflects the increase of 22.2% (R$780 million) in credit revenues, the increase of
15.5% (R$168 million) in treasury income, the revenue from exchange operations of R$86 million and the increase of
9.4% (R$60 million) in services fees. On the negative side, net income was affected by the increase of 28.0% (R$393
million) in market funding expenses, the increase of 49.7% (R$260 million) in credit and onlendings expenses, the
increase of 21.4% (R$111 million) in expenses with provision for loan losses and the increase of 7.7% (R$133 million) in
administrative costs.
We present below the comparison between our main income statement accounts for the fiscal years ended December
31, 2011 and 2010.
Financial income totaled R$5,947 million in 2011, 22.8% (R$1,105 million) above the amount registered in 2010. The
growth of financial income from 4Q10 to 4Q11 is related to the R$780 million growth in credit revenues, on account of
increasing credit operations, to the increase of R$168 million in treasury income, due to increases of the Selic rates
between periods and to the growth of interest-earning assets, the increase of R$86 million in foreign exchange
operations, influenced by exchange rate devaluation and the increase of R$71 million in the outcome of compulsory
deposits, due to the increase of the balance of compulsory assets explained by changes in regulations on reserve
requirements issued by the National Monetary Council.
Revenues from Credit and Leasing Operations
Revenues from credit and leasing operations totaled R$4,293 million in 2011, 22.2% (R$780 million) above 2010. The
year-to-year increase in credit revenues reflects the growth of R$3,360 million in credit assets. Credit revenues were
positively impacted by revenues from commercial credit, which increased 22.6% (R$723 million), by the growth of
30.3% (R$37 million) in revenues from real estate financing, by the increase of 24.9% (R$19 million) in revenues from
agricultural loans and by the R$44 million increase in foreign exchange revenues, on account of exchange devaluation
observed between periods.
Revenues from Securities and Derivatives
Revenues from securities and derivatives totaled R$1,250 million in the twelve months of 2011, 15.7% (R$169 million)
above the amount reported in the same period of 2010 In the twelve months of 2011, securities and derivatives
revenues reflect the increase of 14.0% (R$1,527 million) in the balance of securities and interbank investment assets,
the increase of 1.8 pp. of the Selic rate between periods, when it increased from 9.78% in 2010 to 11.62% in 2011, and
the termination of transactions with derivative instruments in December 2010.
Revenues from Foreign Exchange
The result of foreign exchange transactions totaled R$140 million in the twelve months of 2011, 157.2% (R$86 million)
above the amount reported in the same period of 2010. In 12M11, the positive result of the exchange rate reflects the
foreign exchange devaluation of 12.6% in comparison to the 4.3% valuation seen on 12M10. Trade finance operations
APRIL 30, 2013
84
in Banrisul are matched to the funding in foreign currencies, hence any increase in revenues is proportionally offset to
the increase in costs with foreign currencies loans and onlendings.
Revenues from Restricted Deposits
Restricted deposits, to comply with reserve requirements from the Central Bank of Brazil added, in the twelve months
of 2011, R$263 million in revenues, 36.8% (R$71 million) above the amount recorded in 12M10. Revenues from
restricted deposits increased from 2010 to 2011 on account of higher reserve requirements revenues over time
deposits (R$32 million) resulting from changes in Banrisul's deposit mix, and also from monetary tightening measures
over compulsory deposits put into practice by the Central Bank of Brazil.
Financial Expenses
Financial expenses totaled R$3,208 million in 2011, which are 31.2% (R$763 million) more than 2010's The higher
financial expenses from 2010 to 2011 resulted, especially, from the 28.0% (R$393 million) growth in market funding
costs, that followed the R$4,317 million increase in the balance of time deposits, besides being impacted by the hikes
of the effective Selic rate. Also with relevant participation in the financial expenses, loans and onlendings expenses
increased by 49.7% (R$260 million) due to the growth of escrow deposits in R$654 million and to the growth of R$533
million in loans and onlendings.
Expenses with Market Funding Operations
Market funding expenses totaled R$1,795 million in 2011, 28.0% (R$393 million) higher than in 2010. Market funding
expenses growth from 2010 to 2011 came from the 45.7% (R$370 million) increase in expenses with time deposits
that were originated by the increase of R$4,317 million in the portfolio of time deposits expenses, as well as to the
behavior of the Selic rate and of the Reference Rate (TR), which went from 0.69% in 2010 to 1.21% in 2011, increasing
expenses with savings deposits by 4.5% (R$16 million) even though their balance reduced by 7.9% (R$444 million) in
twelve months.
Expenses with Borrowings and Onlendings
The expenses with borrowings and onlendings totaled R$783 million in 2011, a 49.7% (R$260 million) increase above
2010. In 2011, the evolution of the borrowings and onlendings expenses is explained by expenses with borrowing and
onlendings from foreign banks, in the amount of R$138 million, and the 28.9% (R$118 million) growth of costs with
escrow deposits.
Financial Margin
Net interest income reached R$3,368 million in 2011, 15.6% (R$453 million) higher than in 2010. In 2011, net interest
income was positively impacted by the increase in credit revenues and by the results from treasury, from restricted
deposits, and by result of foreign exchange transactions and compulsory deposits. On the negative side, it was
affected by rising market funding cost and expenses with loans and onlendings.
In 2011, expenses with loan losses allowance totaled R$630 million, 21.4% (R$111 million) above the amount
APRIL 30, 2013
85
recorded in 2010. From 2010 to 2011, provision expenses increased directly due to the growth of 19.7% in credit
portfolio and the increase of 34.7% (R$145 million) in past due operations over 60 days.
Revenue from Services Rendered
Fees from services totaled R$702 million in 2011, 9.4% (R$60 million) more than in 2010. The increase in fees from
services in 2011, in comparison to 2010, was driven mainly by the growth of 8.9% (R$22 million) in checking accounts,
the increase of 18.5% (R$16 million) in Banricompras fees and the 30.3% (R$4 million) increase in consortium
management fees.
Administrative Expenses
In 2011, administrative expenses totaled R$1,842 million, 7.7% (R$132 million) above the amount recorded in 2010.
Personnel expenses, which comprised 59.8% of total administrative costs between January and December 2011,
increased 13.9% (R$134 million) over the amount recorded in 2010, while other administrative expenses decreased
0.2% (R$2 million) in the same period.
The increase of personnel expenses in twelve months comes from salary adjustments and headcount increase of 880
employees. Among other administrative expenses, it is highlighted the reduction of R$38 million in advertising,
promotions and advertising, partially offset by the R$19 million increase in outsourced services and specialized
technical services.
Other operating revenue totaled R$243 million in 2011, 16.3% (R$34 million) above the amount recorded in 2010 In
2011, the growth of other operating income can be explained by (i) the increase of R$14 million in income from the
exchange rate adjustment, generated by the currency devaluation in the period; (ii) the R$9 million increase in fees
from managing escrow judicial deposits, and (iii) due to the R$12 million increase in other operating revenues.
Other operating expenses totaled R$237 million in 2011, 27.6% (R$51) million above the amount recorded in the same
period last year. The growth of other operating expenses accumulated in the twelve months of 2011 compared to the
same period last year, was affected especially by the increase of R$13 million with civil lawsuits provisions, the
increase of R$7 million in lawsuits, the increase of R$6 million with rebates on credit renegotiations, and offset by a
reduction of R$8 million in costs with compensation procedures, and expenses of R$5 million with foreign exchange
adjustment.
APRIL 30, 2013
86
Table 122: Balance Sheet 2011 and 2010
2011
2010
R$ Million
Variation
Variation
R$
%
ASSETS
Current
19,230
17,867
1,363
7.6%
624
403
221
54.8%
2,686
2,359
327
13.8%
2,528
4,031
(1,503)
-37.3%
Interbank Accounts
2,918
2,470
448
18.1%
46
81
(35)
-43.5%
Lending Operations
8,931
7,334
1,596
21.8%
Leasing Operations
36
37
(1)
-2.7%
1,439
1,129
310
27.4%
Cash
Other Assets
Other Assets
22
21
1
4.5%
18,077
13,913
4,164
29.9%
7,198
4,495
2,703
60.1%
Interbank Accounts
625
605
21
3.4%
Lending Operations
9,547
8,145
1,403
17.2%
Long-Term
Leasing Operations
38
38
0
0.2%
Other Assets
659
623
36
5.8%
Other Assets
10
9
1
11.3%
Permanent
279
348
(69)
-19.8%
-1.9%
Investments
8
8
(0)
Property in Use
164
169
(5)
-3.0%
Intangible
108
171
(64)
-37.1%
37,586
32,128
5,458
17.0%
-
-
Current
23,887
23,508
Deposits
14,646
15,601
379
(955)
-6.1%
1,332
1,311
20
1.5%
27
-
27
-
6
10
(4)
-40.6%
211
170
41
24.3%
Borrowings
908
537
371
69.0%
319
310
9
2.9%
9
19
(11)
-55.3%
TOTAL ASSETS
LIABILITIES
Intebank Accounts
Onlendings Abroad
1.6%
-
-
-
-
Other Payables
6,431
5,550
880
15.9%
Long-Term
Deposits
9,297
4,762
7,715
3,452
4,535
4,263
123.5%
12
-
12
-
4
3
1
53.7%
894
748
146
19.6%
22
6
16
274.0%
Intebank Accounts
Borrowings
Onlendings Abroad
Other Payables
Minority Interest
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
95.2%
-
-
-
-
650
554
96
17.4%
2
2
(0)
-3.9%
4,400
3,855
544
14.1%
37,586
32,128
5,458
17.0%
APRIL 30, 2013
87
Total Assets
Total assets reached R$37,586 million at the end of 2011, an increase of 17.0% (R$5,458 million) over 2010. The asset
increase in twelve months came from the R$3,308 million expansion in deposits, the R$654 million increase in the
Reserve Fund of Escrow Deposits (FRDJ) and for the growth of R$533 million in borrowings and transfers. Funding was
partly used into the loan portfolio, which showed an expansion of R$3,360 million, and into securities and the
interbank investments, with an increase of R$1,527 million in their balance.
Securities
Securities totaled R$11,080 million in December 2011, growth of 15.7% (R$1,506 million) over December 2010. This
amount includes liquid interbank transactions but excludes total liabilities from matched transactions.
The expansion of the balance of securities in 2011 resulted from the growth of the deposit base in R$3,308 million, the
expansion of the escrow deposits in R$654 million, and the increase of loans and onlendings of R$533 million,
deducted by the increase of R$3,360 million in credit assets.
Interbank and Interbranch Transactions
Interbank and interbranch transactions reached R$3,589 million in December 2011, 13.7% (R$433 million) higher than
the same month last year. In relation to December 2011, the change of their balances refers to the increase in the
amount of reserve requirements demanded by the Central Bank of Brazil, given the increase of R$4,317 million in time
deposits, even with the reduction in the balances of demand and savings deposits.
Credit Operations
Banrisul credit portfolio reached R$20,393 million in December 2011, an increase of 19.7% over December 2010.
Breakdown of Credit by Company Size
Credit to corporations totaled R$9,854 million in December 2011, the equivalent of 48.3% of the total loan portfolio.
Credit to companies increased 27.5% year-to-date. Corporate credit (large companies) was the highlight in the past
twelve months, increasing by 1.9 pp. its share on the loans to companies. Corporate loans increased 38.5% (R$667
million) from December 2010 to December 2011.
Breakdown of Credit by Sector
In the composition of the loan portfolio distributed by segment, the private sector held 99.4% of credit assets in
December 2011 and increased 19.9% (R$3,364 million) in the last twelve months. Leading segments: services and
other, up R$744 million; individuals, increase of R$740 million; and industry, expansion of R$528 million.
Breakdown of Credit by Portfolio
The portfolio breakdown shows unmarked and directed resources invested in loan assets. The commercial (nonearmarked) portfolio, leasing and public sector, are funded from time deposits and equity and, in December 2011,
composed 75.9% of the total portfolio. Development (long-term finance), agricultural, real estate and foreign
exchange portfolios, are mostly from specific funding sources and are used for mandatory credit allocation, and held
in the last months of the year, 24.1% of total credit allocation.
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The commercial credit portfolio, which comprises 74.9% of Banrisul's total loan book, closed December 2011, with a
balance of R$15,271 million, a growth of 16.3% (R$2,140 million) in relation to December 2010, and accounted for
63.7% of the total increase in credit operations.
Within commercial credit portfolio, credit to individuals totaled R$8,079 million at the end of 2011, with a
participation of 52.9% in the balance of the commercial portfolio and of 39.6% of the total loan book. Credit to
companies totaled R$7,191 million in December 2011, which represents 47.1% of the balance of commercial credit
and 35.3% of the total stock of credit.
The real estate financing totaled R$1,741 million at the end of 2011, an increase of 35.4% (R$456 million) in twelve
months, ranking as the second largest driver to expanding credit supply. Its progress can be explained by several
reasons: (i) the strong demand in the sector; (ii) the addition of real estate financing into Banrisul's business goals; (iii)
by the hiring of real estate brokers to act as Banrisul's correspondents, and (iv) the incentive policies for making
agreements with private companies.
The balance of the agricultural loans totaled R$1,705 million in December 2011, an increase of 32.8% (R$421 million)
in twelve months. The increase in rural lending in 2011 was influenced especially by Banrisul's attending regional
agricultural fairs, including the 34th Expointer, by qualification courses specifically targeted to agribusiness that were
offered to 330 employees and the launch of the program Mais Ovinos no Campo (More Sheeps in Field).
The long-term financing totaled R$917 million in the last month of 2011, an increase of 28.3% (R$202 million) in
twelve months.
The foreign exchange portfolio totaled R$557 million in December 2011, 35.3% (R$146 million) higher than the
balance recorded at the end of 2010. The growth in this product reflects the 12.6% devaluation of the exchange rate
in 2011 and the expansion of business in the period.
Breakdown of Credit by Rating
Credit operations rated between AA and C, normal risk according to Resolution no. 2682/99 of the National Monetary
Council, accounted, in December 2011, for 89.1% of the credit portfolio. In comparison with the end of the previous
year, it decreased 0.4 pp.
Allowance for loan losses totaled R$1,318 million in December 2011, equivalent to 6.5% of the total loan book. The
indicator remained flat from December 2010 to December 2011. The balance of the provision presented a growing
trend directly related to growth in credit operations, as can be observed in last year's performance.
The breakdown of the allowance for loan losses in December 2011, according to Resolution no. 2682/99 of the
National Monetary Council, was as follows:
R$417 million for operations with installments 60 days overdue;
R$787 million for contracts due or to be overdue; and
R$114 million relating to the excess allowance to the minimum required by Resolution no. 2682/99 of the
National Monetary Council, established based on periodic review carried out by the administration of the
APRIL 30, 2013
89
quality of the customer, in order to cover possible events not identified by internal customer rating model.
Funds Raised and Under Management
Funds raised and under management totaled R$28.999 million at the end of December 2011, 15.6% (R$3,909 million)
higher than the balance at the end of December 2010, movement explained by the increase in of time deposits and
assets under management.
From 3Q11 to 4Q11, funds raised and under management increased 5.4% (R$1,494 million), explained by the increase
in time and demand deposits balance, along with the growth of AUM.
Depósitos à Vista
Os depósitos à vista compõem 11,0% dos recursos captados e administrados do Banco. Em dezembro de 2011, a
modalidade atingiu o montante de R$3.195 milhões, com retração de 15,5% ou R$585 milhões em relação a
dezembro do ano anterior. A redução observada, em relação a dezembro de 2010, provém do direcionamento dos
recursos para os depósitos a prazo.
Savings Accounts
The savings deposits totaled R$5,136 million at the end of December 2011, amounting to 17.7% of funds raised and
managed. Savings balance reduced 7.9% (R$444 million) from 4Q10 to 4Q11. The decline of the balance of savings
deposits was due to the deactivation of the automatic savings transfer feature, as well as to the strategy of increasing
funding from time deposits.
Time Deposits
Time deposits are the main funding vehicle for Banrisul, amounting to 48.3% of all funds raised and managed. In
December 2011, the balance of time deposits totaled R$13,997 million, an increase of 44.6% (R$4,317 million) over
the same month last year. The inception of two specific products at the end of 2010, the Automatic Time Deposit and
the Long Term Time Deposit, helped expand significantly the time deposits portfolio during 2011.
Assets under Management
Assets under management totaled R$6,638 million at the end of December 2011, 9.9% (R$601 million) higher than in
December 2010. The increase of AUM was explained mainly by the growth of fixed income investment funds and
funds for managing municipal pension plans.
The shareholders' equity of Banrisul reached R$4,400 million in December 2011, an expansion of 14.12% (R$545
million) in comparison to the same period in 2010. The shareholders' equity variations are related to the incorporation
of the R$904 million net income and by the payment of R$358 million as dividends and interest on equity.
The annualized return on average shareholders' equity reached 21.9% in 2011. The net income of R$904 million in
2011 reflects the growth of services fees and revenues from other operating income, credit and treasury operations,
as well as by the stability of other administrative costs.
APRIL 30, 2013
90
10.2
Management comments on
a.
Company’s operating results, in particular:
(i) Description of any material revenue item
The mainly revenues derived from:
Revenues from financial intermediation: includes revenues deriving from loan and lease operations,
marketable securities and derivatives, compulsory deposits with the Central Bank; and exchange
transactions;
Revenue from services and rates: composed by revenues from banking and service fees, such as thirdparty asset management, collection of bills, Banricompras Network, bank fess of accounts, transactions
involving checks and credit/debit cards, debits in current account and collection services;
Other operating income: formed by the revenue recovery charges and expenses, reversal of operating
provisions, interbank rates, income from reserve funds for deposit in court, among others.
Composition of Total Revenue
The table below sets forth the composition of total revenues for the years ended December 31, 2012, 2011 and 2010.
Table 13: Composition of Total Revenue
R$ million
2012
2011
R$
Partic. %
2010
R$
Partic. %
Variation %
R$
Partic. %
2012 /2011
2011/ 2010
Total Revenue
6,346
b85.8%
5,946
86.3%
4,842
85.0%
6.7%
22.8%
Revenues from
Operations
4,624
62.5%
4,293
62.3%
3,513
61.7%
7.7%
22.2%
1,081
14.6%
1,250
18.1%
1,082
19.0%
-13.5%
15.5%
641
8.7%
403
5.8%
247
4.3%
59.1%
63.2%
799
10.8%
702
10.2%
642
11.3%
13.8%
9.3%
251
3.4%
243
3.5%
209
3.7%
3.2%
16.3%
7,396
100.0%
6,891
100.0%
5,693
100.0%
7.3%
21.0%
Loan
and
Lease
Revenue from Marketable Securities
Transactions
Other
(1)
Revenue from Services and Fees
(2)
Total Revenues
(1)
Considers Foreign Exchange Revenues, Compulsory Investments Revenues, Derivatives Revenues and Sale or Transfer of Financial Assets
Operations.
(2)
Considers Other Operating Income and Subsidiaries Income.
Composition by Product in Commercial Credit - Balance, Revenue and Rate
The table 14 set forth the composition of the credit portfolio, the main item of the revenues, as of December 31,
2012, 2011 and 2010, divided by type of product.
APRIL 30, 2013
91
Table 14: Composition of Commercial Credit by Product in 2012 and 2011
R$ million
2012
2011
Balance
(1)
Income
(2)
Rate
(3)
Balance
(1)
Income
(2)
Rate
(3)
Balance Variation
Income Variation
R$
R$
%
%
Individuals
9,252
2,680
2.5%
8,079
2,462
2.5%
1,173
14.5%
218
8.8%
Payroll-deductible Loan
Payroll-deductible Purchase of
Consumer Goods
Purchase Goods – other
6,610
1,390
1.8%
5,790
1,190
1.7%
820
14.2%
200
16.8%
164
33
1.5%
197
35
1.5%
(33)
-16.7%
(2)
-7.1%
5
1
1.1%
6
1
1.0%
(1)
-22.0%
0
10.0%
Vehicle Loan – Individuals
102
18
1.7%
65
11
1.8%
37
56.8%
7
63.8%
Overdraft
577
606
7.7%
585
622
7.9%
(8)
-1.3%
(16)
-2.6%
One Minute Loan
342
172
4.5%
284
190
5.5%
58
20.4%
(18)
Automatic Individual Loan
225
135
5.1%
235
150
4.9%
(10)
-4.3%
(15)
Non Payroll-deductible Loan
520
191
2.8%
433
159
3.0%
86
19.9%
32
-9.6%
10.2%
19.9%
63
58
7.3%
53
49
7.5%
10
19.5%
9
17.7%
644
76
1.2%
431
54
1.2%
213
49.4%
22
40.6%
2.2%
Credit Card
Other – Individuals
Companies
8,446
1,490
1.6%
7,191
1,458
1.9%
1,254
17.4%
32
39
7
1.6%
36
7
1.7%
3
9.8%
0
6.9%
Vehicle Loan – Companies
52
11
1.9%
42
7
1.9%
9
22.2%
3
43.9%
Working Capital - Guarantee
4.714
658
1.3%
3.876
638
1.6%
838
21.6%
20
3.2%
Working Capital - Receivable
Financing to Customers
Companies
Compror
1.779
246
1.3%
1.561
245
1.6%
218
14.0%
1
0.5%
35
10
2.6%
26
8
2.7%
8
31.6%
2
25.1%
141
15
1.1%
99
17
1.5%
43
43.3%
(2)
Indebted Security Account
195
30
1.4%
170
37
1.6%
25
14.5%
(7)
Guaranted Account
602
372
4.9%
536
348
5.2%
66
12.3%
25
Debt Instruments Discount
367
79
1.8%
394
93
2.1%
(27)
-6.9%
(14)
Vendor
112
15
1.1%
106
16
1.3%
6
5.6%
(1)
-9.6%
19.1%
7.1%
15.1%
-4.4%
61
4
0.5%
71
3
0.4%
(10)
-14.1%
1
28.2%
348
42
1.1%
274
39
1.3%
75
27.2%
3
7.2%
Total
17.698
4.170
(1)
Balance accumulated in the year
(2)
Revenue accumulated in the year
(3)
Monthly Average Revenue / Monthly Average Balance
2.1%
15.271
3.920
2.3%
2.427
15.9%
250
6.4%
–
Foreign Credit
Other – Companies
Composition of Commercial Credit by Product for 2012 and 2011 – Balance, Revenue and Rate
Balance of Commercial Credit
The commercial (non-earmarked) credit to individuals reached R$9,252 million in December 2012, an increase of
14.5% (R$1,173 million) over December 2011.
Payroll loans totaled R$6,774 million in December 2012, accounting for 73.2% of that credit portfolio, an increase of
13.2% (R$787 million) in twelve months, influenced in 73.0% by the increase of the own payroll loans. It should be
noted that the new classification of transactions involving payroll loans portfolio acquired with recourse, required
since January 2012, in R$419, impacted the performance of the payroll loan portfolio by reducing its balance. Such
amount, however, is computed into the total credit portfolio. Among payroll loans portfolio, Banrisul’s own
APRIL 30, 2013
92
origination reached R$4,360 million by December 2012, representing 64.4% of the payroll portfolio and 47.1% of the
commercial portfolio to individuals. Own payroll loans portfolio increased 15.2% (R$574 million) in twelve months,
influenced by several agreements entered with public and private entities. Acquired payroll loans reached R$2,414
million in December 2012, comprising 35.6% of the payroll loan portfolio and 26.1% of commercial credit to
individuals. The balance of acquired payroll loan increased 9.7% (R$213 million) year-on-year.
Commercial credit to companies expanded by 17.4% (R$1,254 million) in twelve months, totaling R$8,446 million in
December 2012. The commercial credit portfolio to companies was driven mainly by working capital, with a balance of
R$6,494 million, and guaranteed accounts, balance of R$602 million. Working capital credit lines accounted for 76.9%
of the commercial portfolio to companies in December 2012, and for 36.7% of total credit portfolio in the same
period. In the past twelve months, working capital lines grew 19.4% (R$1,056 million).
Revenues from Commercial Credit
In 12M12, revenues from commercial credit totaled R$4,170 million, 6.4% (R$250 million) higher than in 12M11.
From 12M11 to 12M12, revenues from commercial credit originated from the 8.8% (R$218 million) growth in
revenues from commercial credit to individuals, influenced mainly by the growth of R$198 million in revenues from
payroll loans. In the case of commercial credit to companies, the 2.2% (R$32 million) increase in revenues influenced
mainly by guaranteed accounts, whose revenues increased by R$25 million, and the income from working capital,
which increased R$22 million, offset by the lower income from receivables discount in R$14 million.
Revenues generated by the payroll loans acquired with recourse, as of January 2012 were recorded as revenues from
sales or financial assets in the amount of R$29 million.
Commercial Credit Rates
The monthly average commercial credit interest rates decreased by 0.2 pp. in the twelve months of 2012 in
comparison to 2011, reaching 2.1% in 12M12. The downward trend of the average interest rates was directly
influenced by credit operations with companies with Selic Rate linked, floating interest rates, which went from 11.6%
in 2011 to 8.5% in 2012. The average interest rates charged to Individuals reduced 0.1 pp. in 12M12.
APRIL 30, 2013
93
Table 15: Composition of Commercial Credit by Product in 2011 and 2010
R$ Million
2011
2010
Balance
(1)
Income
(2)
Rate
(3)
Balance
(1)
Income
(2)
Rate
(3)
Balance Variation
Income Variation
R$
R$
%
%
Individuals
8,079
2,462
2.55%
7,398
2,090
2.54%
681
9.20%
372
17.81%
Payroll-deductible Loan
Payroll-deductible Purchase of
Consumer Goods
5,790
1,190
1.73%
5,456
1,034
1.74%
334
6.12%
156
15.10%
197
35
1.48%
199
28
1.52%
(2)
-1.22%
8
27.21%
6
1
0.97%
5
0
0.61%
1
25.63%
0
42.93%
65
11
1.78%
44
7
1.89%
21
48.00%
4
53.22%
Overdraft
585
622
7.89%
560
537
7.85%
25
4.46%
85
15.88%
One Minute Loan
284
190
5.51%
262
152
5.29%
21
8.11%
38
25.18%
Automatic Individual Loan
235
150
4.94%
255
134
4.76%
(20)
-7.77%
16
12.26%
Non Payroll-deductible Loan
433
159
3.02%
279
122
3.01%
155
55.53%
37
30.65%
53
49
7.46%
52
48
5.41%
1
2.71%
2
3.84%
Vehicle Loan – Individuals
Credit Card
Other – Individuals
Companies
Vehicle Loan – Companies
431
54
1.22%
287
29
1.01%
144
50.43%
25
88.81%
7,191
1,458
1.90%
5,732
1,107
1.80%
1,459
25.45%
351
31.66%
36
7
1.67%
31
5
1.45%
4
14.47%
1
28.38%
42
7
1.90%
23
4
1.78%
19
83.17%
3
65.76%
Working Capital – Guarantee
3,876
638
1.57%
3,025
504
1.54%
852
28.16%
134
26.55%
Working Capital – Receivable
Financing to Customers
Companies
Compror
1,561
245
1.56%
1,168
152
1.40%
393
33.65%
93
61.42%
26
8
2.67%
23
7
2.18%
3
13.30%
1
7.80%
–
99
17
1.49%
110
21
1.34%
(11)
-10.09%
(4)
-17.07%
Indebted Security Account
170
37
1.65%
166
31
1.50%
4
2.67%
6
19.90%
Guaranted Account
536
348
5.24%
437
266
4.88%
99
22.69%
82
30.81%
Debt Instruments Discount
394
93
2.09%
351
76
1.90%
43
12.40%
18
23.42%
Vendor
106
16
1.31%
132
16
1.27%
(26)
-19.99%
0
1.43%
71
3
0.41%
62
2
0.28%
9
14.61%
1
52.59%
Foreign Credit
Other – Companies
274
39
1.34%
205
24
1.16%
69
33.71%
15
62.35%
Total
15,271
(1)
Balance accumulated in the year
(2)
Revenue accumulated in the year
(3)
Monthly Average Revenue / Monthly
Average Balance
3,920
2.26%
13,131
3,197
2.22%
2,140
16.30%
723
22.60%
Composition of Commercial Credit by Product for 2011 and 2010 – Balance, Revenue and Rate
Balance of Commercial Credit
The commercial credit to individual reached R$8,079 million at the end of 2011, an increase of 9.2% (R$681 million)
over December 2010, driven specifically by payroll and non-payroll loans.
The payroll loans totaled R$5,987 million in December 2011, accounting for 74.1% of the portfolio, an increase of 5.9%
(R$332 million) in twelve months. Among payroll loans portfolio, Banrisul's own origination reached R$3,786 million
by December 2011, representing 63.2% of the payroll portfolio and 46.8% of the commercial portfolio to individuals,
with an increase 9.3% (R$321 million) in twelve months. Acquired payroll loans portfolio reached R$2,201 million in
the last quarter of 2011, comprising 36.8% of the payroll portfolio and 27.2% of commercial credit to individuals, with
an increase of 0.5% (R$11 million) over December 2010.
The main highlight of 2011 in regards to the commercial portfolio was the credit for companies, which expanded by
APRIL 30, 2013
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25.4% (R$1,459 million) in twelve months, totaling R$7,191 million. In comparison to September 2011, the portfolio
increased 9.3% (R$611 million). This growth was driven by working capital lines, which totaled R$5,437 million and
represented, in December 2011, 75.6% of the commercial portfolio of companies and 35.6% of the total commercial
credit. In twelve months, working capital lines grew 29.7% (R$1,245 million), increasing 12.5% (R$602 million) in the
last quarter of 2011.
Revenues from Commercial Credit - Individuals and Companies
During the twelve months of 2011, revenues from commercial credit to individuals totaled R$3,920 million. 22.6%
(R$723 million) higher than that produced during 12M10.
In the twelve months of 2011, revenues from commercial credit are the result of a 17.8% (R$372 million) growth in
revenues from individual commercial credit, influenced mainly by the growth of R$164 million in revenues from
payroll loans and of R$85 million in revenues from overdraft accounts.
As to commercial credit to companies, the increase of 31.6% (R$350 million) in revenues was originated mainly from
the R$227 million increase in revenues from working capital lines and by the R$82 million revenues from guaranteed
account. During 2011, revenues from commercial credit to Individuals represented 62.8% of total commercial credit
revenues; companies, 37.2%. The credit revenues from commercial credit to Individuals accounted for 57.3% of the
total credit revenues, while revenues from commercial credit to Companies represented 34.0%.
Commercial Credit Rates
The average commercial credit interest rates increased from 2.2% in 2010 to 2.3% in 2011. The upward trend of the
average interest rates was directly influenced by credit operations to companies with floating rates linked to the Selic
Rate, which reached 11.62% in the twelve months of 2011, 1.84 pp above the 9.78% of the same period of 2010.
Average interest rates charged to Individuals remained practically unchanged.
Composition of Other Operating Income
The table below shows the composition of other operating income for the years ended December 31, 2010, 2011 and
2012.
Table 14: Composition of Other Operating Income
2012
Recovery of Charges and Expenses
Reversal of Operating Reserves for:
Civil
Labor
Other Assets
Reserve for Securitization Losses
Other Taxes Without Credit Characteristics
Commission on Capitalization Cerficates
Interbank Fees
Exchange Adjustment - Foreign Branches
Credit Notes Receivable
Reserve Fund - Escrow Deposit - Law no. 12069
Insurance - Commission and Placement Administration Fee
Total Other Operating Income
50,017
54,414
44
768
49,267
4,335
1,166
21,757
11,672
6,187
14,077
9,944
80,346
249,580
2011
50,792
35,736
767
80
34,159
730
5,664
20,049
14,193
8,244
25,712
2,641
79,906
242,937
R$ Million
Variation %
2012 /2011
2010
47,962
39,450
3,031
33,252
3,167
61
3,070
21,020
9,953
16,782
2,374
68,231
208,903
-1.5%
52.3%
-94.3%
860.0%
44.2%
493.8%
-79.4%
8.5%
-17.8%
-24.9%
-45.2%
276.5%
0.5%
2.7%
2011/ 2010
5.9%
-9.4%
2.7%
-76.9%
100.0%
84.5%
-4.6%
-17.2%
53.2%
11.2%
17.1%
16.3%
APRIL 30, 2013
95
(ii)
Factors materially affecting operating income (expenses)
Requirements on Compulsory Deposits
The Central Bank imposes several compulsory deposits requirements upon financial institutions, as a method to
control liquidity in the Brazilian financial system. Upon the change of compulsory deposit requirements, the Central
Bank has the power to influence the volume of our interest-earning assets and interest-bearing liabilities, thereby
consequently affecting our revenues and expenses from financial intermediation.
Compulsory deposit requirements are applied on the volume of our deposits at the rates set forth in the applicable
regulation, and funds deriving therefrom are deposited with the Central Bank, accruing interest (except for the
amounts relating to demand deposits). As of December 31, 2012, we had R$2,875 million in compulsory deposits in
cash or through federal government bonds with the Central Bank.
Changes in Tax Legislation
Our results are affected by changes in tax legislation and taxation systems which affect ours and our customers’
transactions. Such changes include changes in tax rates and the imposition of temporary taxes, which funds are
separated for satisfaction of specific purposes.
Regulation and Risks of Chance in the Rules Relating to the Credit
The credit restraining measures announced at the end of 2010 (through Central Bank of Brazil Circular no. 3515)
increased the level of capital requirement on operations with maturity over 24 months, except for agricultural loans,
real estate and loans/leasing for the acquisition of freight vehicles. Payroll loans were impacted by the measures on
transactions over 36 months in maturity, what helps explain the decline in the pace of payroll loan grant, especially in
mid-size, niche banks.
Furthermore, in its Communicate no. 20615 as of February 2011, Central Bank of Brazil informed preliminary
orientations on Basel III regulatory measures, involving capital strengthening for bank. The measure includes
essentially the capital increase while adding a countercyclical parcel, allowing banks to go through periods of crisis, as
well as defined two liquidity ratios. The measure also requires new procedures for accounting sales or transfers of
financial assets among banks, regulated by Resolutions no. 3,533 and 3,895, producing effects on the capital structure
of financial institutions, to the size that revenue from sale of portfolios is no longer counted at the time of operation.
Accounting will depend on the type of operation performed, despite the requirement that, in sales with recourse, sold
portfolios must be accounted in the balance sheet of the selling institution, while the acquiring bank must treat
purchased the assets as receivables. The change in the record of financial assets came into force on January 01, 2012,
impacting the market of asset acquisition.
Another measure with effects starting in 2012 is the bank portability, disciplined by Resolutions no. 3.402 and 3.424 of
the National Monetary Council. With that, public servants have the right to choose the bank at what their salaries will
be deposited. This is likely to alter customer loyalty strategies and improve service quality. In addition, the reduction
of interest rates, with a resulting decrease in spreads, impact the new scenario of credit in Brazil.
Credit Default
Certain factors beyond our control could affect the default level to which the Brazilian Financial System is subject,
APRIL 30, 2013
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such as economic recession affecting the country or increases in unemployment rates. A potential increase in the
default level of our credit portfolio could result in the increase of losses from credit operations and adversely affect
our operating results and financial condition.
Banrisul abide by the policies imposed by the Central Bank with respect to the write-off of overdue loans, as we
consider as adequate to our operations and which establish that the loans are to be written off for losses 360 days
after maturity. Accordingly, our allowance for loan losses remains recorded for a period of 360 days until the loan is
written off for losses.
b.
Variations in revenues attributable to changes in prices. exchange and inflation rates, MODIFICATIONS of
volumes and introduction of new products and services
c.
Impact of inflation. changes in prices of main inputs and products, exchange and interest rates on the
Company’s operating and financial results
The Margin Analysis in the following chart was based on the average balances of assets and liabilities, calculated as of
the closing monthly balances in each quarter.
The table 17 shows the revenue-generating assets and interest-bearing liabilities, the corresponding financial incomes
on assets and financial expenses on liabilities, as well as the effective average rates practiced.
Table 15: Margin Analysis
Interest-Earning Assets
Loan Portfolio
Resales pending Settlement
Money Market Investments
Available-for-Sale Securities
Held-to-Maturity Securities
Interbank Deposits
Other Interest-Earning Assets
Compulsories
Other
Non Interest-Earning Assets
Total Assets
Interest - Bearing Liabilities
Domestic Interbank Deposits
Domestic Saving Deposits
Domestic Time Deposits
Subordinated Debt
Borrowings and Onlendings
Domestic
Foreing
Other
Non Interest - Bearing Liabilities
Liabilities and Shareholders’ Equity
Spread
NIM
R$ Million
2012
2011
2010
Average Income / Average Average Income / Average Average Income / Average
Balance
39,857 Expense
6,346 Rate
15.9% Balance
32.488 Expense
5.947 Rate
18,3% Balance
28,716 Expense
4,841 Rate
16.9%
22,229
4,760
21.4%
18.371
4.433
24,1%
15,099
3,567
23.6%
3,834
312
8.1%
2.630
299
11,3%
3,772
369
9.8%
2,221
172
7.7%
2.167
241
11,1%
1,980
183
9.2%
1,187
92
7.7%
1.656
184
11,1%
1,471
136
9.2%
6,582
704
10.7%
4.604
512
11,1%
4,112
380
9.2%
106
8
7.6%
203
14
7,0%
126
11
8.5%
3,696
298
8.1%
2.858
263
9,2%
2,156
195
9.0%
3,040
243
8.0%
2.228
204
9,2%
1,673
132
7.9%
656
56
8.5%
630
59
9,4%
483
63
13.1%
2,693
2.705
2,527
42,549
6,346
14.9%
35.192
5.947
16,9%
31,242
4,841
15.5%
32,357
(2,616)
8.1%
25.756
(2.579)
10,0%
23,115
(1,926)
8.3%
196
(11)
5.6%
14
(2)
12,8%
50
(4)
7.9%
5,468
(328)
6.0%
5.205
(365)
7,0%
5,871
(350)
6.0%
15,720
(1,139)
7.2%
12.163
(1.212)
10,0%
9,160
(837)
9.1%
1,887
(172)
9.1%
1.683
(216)
12,9%
2,004
(214)
10.7%
1,056
(340)
32.2%
0,0%
2,422
(174)
7.2%
1.864
(257)
13,8%
1,633
(112)
6.9%
1,430
(74)
5.2%
1.122
(91)
8,1%
1,043
(77)
7.4%
991
(99)
10.0%
741
(166)
22,4%
590
(35)
5.9%
5,610
(452)
8.1%
4.828
(526)
10,9%
4,398
(408)
9.3%
5,476
5.237
4,470
4,716
4.200
3,657
42,549
(2,616)
6.1%
35.192
(2.579)
7,3%
31,242
(1,926)
6.2%
3,731
8.8%
9.4%
3.368
9,6%
10,4%
2,915
9.3%
10.1%
APRIL 30, 2013
97
Credit operations include advances on foreign exchange contracts and leasing agreements, which are shown at the
current net value of the leasing agreements. Income from credit operations overdue for more than 60 days,
irrespective of their risk level, will only be booked as revenues when they are received.
Average balances of interbank investments, funds invested or raised in the interbank market correspond to the
redemption amount deducted from the income or expenses corresponding to future periods.
Average balances of deposits, open-market funding, loans and onlendings include the fees payable till the date of
closing of the financial statements, booked on a pro rata die basis. As for expenses related to these items, fees relating
to deposits include contributions to the Deposit Guarantee Fund (Fundo Garantidor de Crédito - FGC).
The interest-earning assets margin presented an downward trend in 2012 in relation to 2011, in line with the effective
Selic rate decreased from 11.62% in 12M11 to 8.49% in 12M12. Average interest-earning assets grew 22.7% on the
year, while interest-bearing liabilities increased by 25.6%. The absolute margin increased 10.8%, and the relative
margin retracted by 1.0 percentage points that recorded in 2011.
The fall of the Selic rate registered in the period resulted in decreasing rates on credit assets over liabilities for credit
funding. Besides the basic interest rates that index transactions in the financial sector, the assets and liabilities
structure and also the tenor of the transactions are determinant factors in the formation of the margin recorded in
each period.
The representativeness of credit assets in total average interest-earning assets decreased by 0.7 percentage points
compared to December 2011, reaching 55.8%, while treasury operations increased its share from 34.0%, in December
2011, to 34.7% in December 2012. Compulsory deposits increased their representativeness in total earning assets by
0.7 percentage points, reaching 7.6%. The revenues from the higher volume of credit and treasury transactions
absorbed the falls of the Selic Rate, main reference for the remuneration of credit and treasury operations.
By the side of interest-bearing liabilities, the average balance of time deposits, during the twelve months of 2011 and
2012 increased to represent 48.6% of the liabilities that generated costs, 1.4 pp. above the stake shown in the same
period last year. Savings deposits reduced their participation over interest-bearing liabilities, from 20.2% in 2011, to
16.9% in 2012. Among other interest-bearing liabilities, stands out the participation of 17.3% of the Financial and
Development Funds, that reached the average balance of R$5,610 million in December 2012.
The results of these changes together caused a reduction of 0.8 percentage points in the spread, which reached 8.8%
in 2012.
Interest rates
Fluctuations in interest rates in Brazil materially affect our operating results. The increase in interest rates may
positively affect our revenues as interest rates relating to our interest-earning assets and compensation relating to our
loan operations also increased. On the other hand, our interest expenses can be similarly affected if interest rates
relating to our interest-bearing liabilities, including our funding operations, also increase.
In general, increases in interest rates allow us to expand our revenues from loan operations due to higher spreads.
However, increases in interest rates could adversely affect our results and credit portfolios upon reduction of demand
APRIL 30, 2013
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for credit and increase of the default risk relating to our customers.
On the other hand, drops in interest rates can reduce revenues from loan operations due to lower spreads.
Accordingly, a drop in interest rates could cause the reduction of our revenues and, consequently, the decrease of our
results. Such drop in revenues could eventually be offset against a growth in the volume of credit due to a greater
demand for credit, provided that we are able to extend credit to meet such demand without the substantial growth of
the default levels relating to our operations.
According to Central Bank data, in December 2010, 2011 and 2012, the average monthly spread banking financial
sector, respectively, 23.57 percentage points and 26.87 percentage points and 21.03 percentage points, while at the
end of exercise 2010, 2011 and 2012 the actual Selic rate was 9.78% and 9.78% and 8.49% respectively.
Inflation
Our net income can be adversely affected by the growth in inflation rate in Brazil, which could result in the increase in
our costs and reduce our operating margins, if inflation is not followed by an increase in interest rates. Furthermore,
inflation can contribute to the increase in market volatility due to economic uncertainties, drops in overall spending,
lower growth of actual income and reduction of consumer’s trust, which factors, in turn, could adversely impact our
operating results.
Inflation rates in Brazil presented high volatility in the past, and became more stable, with continuous trend of drop
since the third quarter of 2003. The drop in inflation rates, to a greater extent, derived from the monetary policy
adopted by the Brazilian government, including periodical changes in interest rates and appreciation of the Brazilian
real against the U.S. dollar during the period.
Inflation, as measured by the IGP-M, was 9.81% in 2008, a deflation rate of 1.71% in 2009 and inflation of 11.32% in
2010, 5.10% in 2011 and 7.81% in 2012. Prices, on the other hand, if calculated based on the IPCA, grew 5.90% in
2008, 4.31% in 2009, 5.91% in 2010, 6.50% in 2011 and 5.84% in 2012.
Spread
The result of our operations may be impacted due to changes in our spread, shown in the table 17, where interestearning assets are compared with interest-bearing liabilities, which represent the funding of our operations. In 2012,
our spread of 8.8% was approximately 0.8 percentage points below the 9.6% registered in 2011.
Factors that may influence our spreads are the increase/decrease of the cost of funding on account of variations on
the basic interest rate, increased competition among financial institutions and the behavior of default resulting from
periods of crisis or economic growth.
Given our significant market share in Rio Grande do Sul, we may be especially affected, positively and negatively by
the economic performance of the state. It might be difficult to mitigate the risk from the concentration of our
activities, a factor that we seek to revert through the acquisition of 49.9% stake in Credimatone Promotora de Vendas
e Serviços S/A, which has 73 stores over the country.
Exchange Rates
Our operations in foreign exchange transactions aim exclusively at meeting the needs of our customers with products,
services and funding for import and export transactions. For these operations, we obtain funding from international
APRIL 30, 2013
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financial institutions. Therefore, our assets and liabilities in foreign currencies are similar, which gives us a natural
hedge. Except for the equity of our branches abroad, totaling US$71 million, it is our policy not to expose our own
funding to exchange rates nor do we make leveraged transactions in foreign currencies, justifying why our result is not
impacted by exchange rate variations.
10.3
Management comments on the material effects caused or expected to be caused by the events below on
the Company’s financial statements and results
a.
Introduction or disposal of operating segment
There was no introduction or disposal of the Company’s operating segments not disclosed in the financial statements.
b.
Establishment, acquisition or sale of ownership interest
As part of strategic move to leverage customer relationship channels, increase the loan portfolio and expand the
potential distribution of financial products and services on a national scale, in March 13, 2012, Banrisul acquired,
through the Sale and Purchase of Shares and Other Covenants Agreement, signed with MatoneInvest Holding, 49.9%
(forty-nine percent and nine tenths) the shares of Credimatone Promotora de Vendas e Serviços S/A (Bem-Vindo
Banrisul Serviços Financeiros), a privately held corporation with headquarters in Rio de Janeiro, representing 673,500
common shares.
The investment by Banrisul was R$40 million, goodwill of R$34 million, representing the future economic benefit from
the acquisition. The value of the equity accounting on December 31, 2012 totaled R$1 million.
At the end of December 2012, the balance of loans originated through Bem-Vindo Network reached R$1,675 million.
As for the services for payroll loan origination through covenants, Banrisul paid to Credimatone the amount of
R$23,730 thousand as commissions and performance fees.
c.
Unusual events or transactions
Subordinated Debt
On 2012, Banrisul conducted two external funding issuances, in the total amount of USD775 million.
The first one took place on January 26, 2012, when a transaction for the issuance of subordinated debt abroad with
the total amount of USD500 Million (five hundred million U.S. Dollars) was concluded. The operation was settled on
February 02, 2012 for a 10-year term, with maturity on February 02, 2022.
Coupon was set at 7.375% p.a. payable semiannually from the settlement date. Offering price corresponded to
99.131% of the total principal amount, equivalent to an effective yield to maturity of 7.50% p.a.
The second operation took place on November 26, 2012, by the reopening of the issue of subordinated debt in the
amount of USD275 million. The financial settlement was made on December 3, 2012, maturing on February 02, 2022.
The agreed interest coupon is 7.375% per annum, payable semi-annually from the date of execution. The issue price
was 109.943% of the face value of the securities sold, resulting in an effective interest rate of 5.95% pa.
The Central Bank of Brazil considered the amounts related to these fundings eligible as Tier II capital under the
category of subordinated debt.
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Real Estate Investment Fund
In the year 2012, the first issuance of shares of Banrisul New Frontier Real Estate Investment Fund - FII took place,
coordinated by Banrisul. The Fund's objective is to achieve long-term real estate investments, through the acquisition
and eventual construction and/or development of real estate assets to be rented to the Banrisul Group. The
fundraising reached more than R$70 million.
Banrisul sponsors FBSS - Fundação Banrisul de Seguridade Social (Banrisul Social Security Foundation) and CABERGS Caixa de Assistência dos Empregados do Banco do Estado do Rio Grande do Sul (Medical Assistance for Employees of
Banco do Estado do Rio Grande do Sul) which, respectively, provide retirement benefits and medical care to its
employees (Note 23). The accounting recognition at Banrisul follows the rules laid down by CVM Rule no. 600/09.
Until 31 December, 2012, the recognition of actuarial gains and losses followed the “corridor method” as set out in
regulation CVM Resolution 600/09. From 2013 onwards, it will be applicable the revised IAS 19 standard adopted by
the CPC (Accounting Pronouncements Committee) and CVM Resolution no. 695/2012; therefore, any further actuarial
gains or losses will be respectively recognized as asset or liability in the financial statements against equity as a contra
entry.
In order to diversify the options to participants and beneficiaries currently included in Defined Benefit Plan (BD1),
Banrisul is working, together with Fundação Banrisul de Seguridade Social, towards the implementation of new
pension plans, the Defined Benefit (Settled) and the Variable Contribution plan, to receive the contributions of
participants and beneficiaries from the BD1 plan who voluntarily opt for the settlement and migrating of their
actuarial reserves. This procedure shall be concluded within the year 2013.
10.4
Management comments on
a.
Significant changes in accounting practices
b.
Material effects of the changes in accounting practices
In relation to post-employment benefits, including those offered through the FBSS - Banrisul Foundation, and as
provided in CVM Resolution 695/2012, starting from January 1, 2013, any possible actuarial gains/losses will be
recognized respectively as assets or liabilities in the financial statements against equity as a contra entry. The effect of
the application of this standard in Banrisul will be negatively impacting the equity in R$432 million, amount that
accounted net of tax effects, is equivalent to R$260 million.
c.
Exceptions and emphasis in the auditor’s report
There were no exceptions or emphasis in our auditors’ reports.
10.5
Critical accounting policies adopted by the Company, particularly discussing accounting estimates made by
management on inaccurate and material matters with respect to the description of the financial condition and
results, which require subjective or complex judgments, such as: allowances. contingences, revenue recognition, tax
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credits, long-term assets, useful life of noncurrent assets, pension plans, foreign currency translation adjustments,
environmental recovery costs, asset impairment test criteria and financial instruments
The individual and consolidated financial statements have been prepared in accordance with Brazilian accounting
practices applicable to financial institutions, and with standards and instructions from the Central Bank of Brazil and
from the Brazilian Securities and Exchange Commission (CVM), which include accounting practices and estimates
concerning the recognition of allowances and determination of the value of the assets that comprise its securities
portfolio. Actual results could differ from those estimated.
Within the critical accounting policies are those classified as critical, requiring subjective or complex judgments by
management, usually the result of the need to develop estimates of the effects of matters that inherently involve
uncertainty. As the number of variables and assumptions affecting the future resolution of the uncertainties increases,
those judgments become more subjective and complex.
Banrisul's individual financial statements include operations conducted in Brazil as well as the consolidation of its
foreign branches (Miami and Grand Cayman). The effects of the foreign exchange variation on the operations in
foreign branches are distributed in the statement of income according to the nature of the corresponding assets and
liabilities. In the preparation of the consolidated financial statements, interests held among consolidated companies
were eliminated, as well as intercompany balance sheet and profit and loss accounts. The portions of income for the
period and net equity referring to noncontrolling interests are shown separately in the financial statements.
The preparation of such financial statements necessarily involves assumptions and estimates deriving from our past
results and reasonable and material facts and events. The factors affecting the estimates made by our management
with respect to our financial statements are intrinsically uncertain. Note 3 to our consolidated financial statements for
the year ended December 31, 2012 includes a summary of the main accounting practices and critical accounting
policies used in the preparation of our consolidated financial statements.
Marketable Securities and Derivative Financial Instruments
Pursuant to Circular no 3.068, of November 8, 2001, and supplementary regulation, marketable securities are
classified and asses into three specific categories, in conformity with the following accounting criteria:
Trading securities – include marketable securities purchased in order to be freely traded on regular and active
basis, stated at market value, and any gains and losses on such securities are recognized in net income (loss)
for the year.
Securities available for sale - include marketable securities used as part of our strategy to manage interest
rate fluctuation risks and can be traded as a result of such fluctuations, changes in payment terms and
conditions or any other factors. These securities are marked to market, and the earnings deriving therefrom
are recognized in net income for the year and gains and losses arising out of mark-to-market variations, not
yet realized, are recognized in a specific account in shareholders’ equity, net of the respective tax effects,
when applicable, called as “Equity Adjustments” until realization upon sale. Gains and losses, when realized,
will be recognized on the trading date in the income statement, as a contra-entry to the same specific
account in shareholders’ equity, net of the respective tax effects, when applicable.
Securities held to maturity – include marketable securities with respect to which management has the
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intention and financial capacity to hold until maturity, stated at acquisition cost, restated on pro rata basis in
counterpart the statement of income. The financial capacity is defined in cash flow estimates, without taking
into account the possibility to sell such securities.
Derivative financial instruments – classified on their acquisition date, according to management's intention to
use them as an instrument of protection (hedge) or not, according to Circular No. 3.082/2002 of Central Bank
of Brazil. Transactions involving derivative financial instruments, conducted at the request of clients, on their
own, or who do not meet the hedging criteria (mainly derivatives used to manage the overall risk exposure)
are stated at market value, with gains and losses realized and not realized, recognized directly in the income
statement. Initially, derivatives are recognized by the fair value on the date in which the derivative contract is
signed and are, subsequently, remeasured to their fair value. The method of recognizing the resulting gain or
loss depends on whether the derivative is designated or not as a hedging instrument in cases of adoption of
hedge accounting. In this case, the method depends on the nature of the item being hedged. Banrisul adopts
hedge accounting and designates derivatives contracted to hedge the subordinated debt as a hedge of the
fair value of recognized assets or liabilities or a firm commitment (hedge market risk). Banrisul documents, at
the beginning of the transaction, the relationship between hedging instruments and hedged items, as well as
the risk management objectives and strategy for conducting various hedge transactions. Banrisul also
documents its assessment, both the hedge beginning and continuously, that the derivatives used in hedging
transactions are highly effective in offsetting changes in fair values or cash flows of hedged items.
The total fair value of a hedging derivative is classified as non-current assets or liabilities when the remaining maturity
of the hedged item is more than 12 months, and as current assets or liabilities when the remaining maturity of the
hedged item is less than 12 months.
Market Risk Hedge - are classified in this category derivative financial instruments that are intended to offset risks
from exposure to changes in the market value of the hedge object item.
Banrisul considered in this category the derivative contracts whit object of protect the foreign currency variation
arising from the issuance of the USD775 million debts maturing on February 2, 2022. On December 31, 2012, the only
outstanding open derivatives refer to the swaps and forward currency issued to protect the subordinated debt.
Changes in fair value of derivatives designated and qualify as hedging market risk are recorded in the income
statement, with any changes in fair value of the asset or liability hedged that are attributable to the hedged risk. The
gain or loss relating to this transaction is recognized in the income statement as "Net Interest income".
Loan and lease operations and other receivables
All loans and lease transactions are classified based on Management's risk assessment, taking into account the
economic scenario, past experience and specific risks related to transactions, debtors and guarantors, pursuant to
National Monetary Council (CMN) Resolution no. 2682/ 99, which requires a periodic analysis of the portfolio and its
classification into nine risk levels, from AA to H. A summary of this classification is presented in Notes to the Financial
Statements number 07.
Loans and lease transactions are recorded at present value, calculated on a daily pro-rata basis, based on the agreed
index and interest rate, and are adjusted to the 60th day past-due. Thereafter, revenue is recognized only when the
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payments are actually received.
The risk of renegotiated asset operations is classified in accordance with the criterion established by National
Monetary Council (CMN) Resolution no. 2682/99, i.e. the rating assigned before the renegotiation is maintained.
Renegotiated loans previously written-off against the allowance and controlled in memorandum accounts are rated
level H. Any gains on renegotiation are recognized as revenue only when actually received.
Other receivables – Credit card transactions
Amounts to be invoiced are represented by amounts receivable from credit card holders in connection with the use of
credit cards in member establishments affiliated to Visa and MasterCard. Such amounts are recorded in Trade
accounts receivable, without loan characteristic, and transactions in installments, where we are the issuers, and the
outstanding balance of transactions, which payment was made based on the minimum invoiced amount (revolving
credit), are reclassified into Loan operations.
Allowance for loan, lease and other loan losses
This is recorded in an amount considered sufficient to cover probable losses considering the risk level classification of
the customer based on periodic assessment of credit quality, and on the minimum percentages required by the
National Monetary Council (CMN) Resolution no. 2682/99 when a default event occurs.
As of December 31, 2012, the total amount related to the allowance for loan losses. allowance for doubtful lease
receivables and losses on other receivables, as stated in Notes to the Financial Statements number 07, exceeds the
minimum amount required if only the rating of transactions based on the number of past due days is considered as set
forth by National Monetary Resolution no. 2682/99. This procedure was adopted by Bank's management in addition
to those foreseen on Resolution 2682 as a measure to ensure that, all events for the purpose of setting the allowance
for doubtful receivables, were captured by the process established for rating credit operations and customers.
Permanent assets
Permanent assets are stated at acquisition cost, considering the following aspects:
Investments in subsidiaries are accounted for under the equity method, based on the financial statements
prepared in conformity with the accounting practices adopted by the parent company, i.e. the Brazilian
accounting practices applicable to institutions authorized to operate by the Central Bank of Brazil. Other
investments are stated at cost and adjusted for allowances for losses, when applicable;
Goodwill - corresponds to the excess amount paid on acquisition of investments arising from expected future
profitability. It has no term defined of useful life and are submitted annually to test for impairment of assets;
Depreciation of property and equipment in use is calculated under the straight-line method based on the
expected economic useful lives of assets considering the minimum rates disclosed in Notes to the Financial
Statements number 09;
Intangible Assets consist primarily of investments whose benefits will occur in the future. This group of
accounts is represented by bank services contracts and software acquisition. Amortization is calculated under
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the straight line method at the rates stated in Notes to the Financial Statements number 09; and
Annually, Banrisul reviews intangible assets for impairment losses. When identified, losses are charged to
income. During the year ended December 31, 2012, the Bank did not found any indication that certain assets
could be above the permanent impairment and therefore was not recognized any provision for impairment
loss of these assets.
Foreign-currency denominated assets and liabilities
The balances of assets and liabilities of foreign branches, as well as any other foreign-currency denominated assets
and liabilities, were translated based on the exchange rate on the closing date of the financial statements.
Deposits, Money Market Funding, Borrowings and Onlendings and Financial and Development Fund
These are stated at the amounts of obligations and take into consideration the charges accrued up to the financial
statements date, recognized on pro rata basis.
As set forth in Law no 12,069/04 and Law no 12,585/06 from the State Government of Rio Grande do Sul, up to 85% of
the balance of the amounts deposited in the courts with us by third parties are made available to the State
Government and the outstanding balance is help with us for establishment of a reserve. The balances deposited and
transferred are controlled in a memorandum account and the portion withheld is recorded in Other Liabilities, as
described in Notes to the Financial Statements number 21. Expenses with charges on the outstanding balance are
recorded in Borrowings, Assignments and Onlendings Expenses.
Provisions for Tax, social security, Labor and Civil Contingencies
Contingent assets, contingent liabilities, and legal obligations are recognized, measured and disclosed in accordance
with the criteria set forth by Resolution no. 3823/09 and Technical Pronouncement CPC 25, issued by the Brazilian
FASB (CPC). They are recorded based on the legal counsel's opinion, using models and criteria which permit obtaining
the most reasonable measurement, despite the uncertainty about their period and the final outcome amount. The
criteria used according to the nature of the contingency are as follows:
Contingent Assets - they are not recognized in the financial statements, except when there is evidence of
certain realization, and to which no further appeal can be made.
Contingent Liabilities - they are recognized in the financial statements when the risk of losing a lawsuit or
administrative claim is probable, based on the opinion of management and of legal advisors, with a probable
outflow of funds for the settlement of liabilities and when the amounts involved are measurable reliably, as
follows:
Reserve for Labor Contingencies - they are recognized upon court notification of judicial discussion involving
Banrisul, the risk of loss of which is deemed as probable. Amounts are determined according to disbursement
estimates by Management, timely revised based on information received from the legal counsels, adjusted
based on the amount of the related escrow deposits, when escrow deposits are required.
These refer to lawsuits filed by, mainly, unions and former employees claiming labor rights, in particular the payment
of overtime and other labor rights.
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Of the aforementioned reserve, R$78,039 thousand (Consolidated - R$80,257 thousand) is deposited in an escrow
account. Additionally, R$23,856 thousand (Consolidated - R$24,724 thousand) was required for appeals.
There are also some labor claims whose likelihood of loss, based on their nature, is considered as possible, in the
approximate amount of R$37,795 thousand (Consolidated - R$37,881 thousand). As of December 31, 2011, the total
amount of possible loss on claims related to labor processes that already have the probable loss reserved for, is
R$298,468 thousand (Consolidated - R$304,278 thousand). A reserve for contingencies was not recognized for the
amounts of possible loss on labor claims, in accordance with applicable accounting practices.
Provisions for Civil Contingencies - they are recognized upon court notices, and monthly adjusted based on
the amount of compensation sought, on the evidence presented, and on the legal counsel's evaluation which considers previous court decisions, factual support, evidence produced in the records and legal
decisions that might be rendered for the lawsuit, for the risk of loss on the lawsuit.
Lawsuits for damages refer to compensation for property damage and/or pain and suffering, referring to consumer
relations, in particular, matters relating to credit cards, consumer credit, checking accounts, banking collection and
loans.
There is also and amount of R$976,408 thousand (Consolidated - R$1,000,298) related to lawsuits filed by third parties
against Banrisul, whose likelihood of loss is classified by our legal counsel as possible, and therefore were not
provisioned.
Provisions for Tax and Social Security Contingencies - Basically refer to obligations relating to taxes which
validity or constitutionality is subject to challenge through administrative or legal proceeding, which
probability of loss is, or in previous stages of the proceedings was, considered as probable, and established
based on the full amount of the claim. For claims with the respective escrow deposits, the amounts involved
are not restated, except upon the issuance of a calculation order due to the favorable outcome of the claim.
The main tax contingency refers to income and social contribution taxes on the deduction of expenses arising from the
settlement of the actuarial deficit of Fundação Banrisul de Seguridade Social (Banrisul Social Security Foundation),
challenged by the Federal Revenue Service from 1998 to 2005 in the amount of R$429,060 thousand. Banrisul,
through its legal counsel, has been discussing the matter in court and recorded a reserve for contingencies in the
amount of the estimated loss.
Contingent liabilities assessed as possible losses are reported in the financial statements; those liabilities that cannot
be measured reliably and are assessed as remote losses are neither accrued nor disclosed. There are also some tax
contingencies whose likelihood of loss, based on their nature, is considered as possible, in the amount of R$44,199
thousand (Consolidated - R$67,506 thousand). A reserve for contingencies was not recognized, in accordance with
applicable accounting practices.
Legal, Tax and Social Security Responsibilities - Are recorded as payable regardless of the evaluation about
the probability of loss.
Other Current and Noncurrent Assets and Liabilities
These are stated at realizable or settlement values, including earnings and charges incurred to the balance sheet date,
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calculated on a daily "pro rata" basis, and, where applicable, the effect of adjustments to bring the asset cost to
realizable or fair value. Amounts receivable and payable within twelve months are classified as current assets and
liabilities, respectively.
Income and social contribution taxes
Social contribution tax (CSLL) is calculated at a rate of 15% (9% for non-financial companies) and corporate income tax
(IRPJ) is calculated at 15% (plus a 10% surtax pursuant to legislation) on taxable profit for the period, adjusted for
permanent differences. Deferred income and social contribution taxes were calculated based on the rates in force on
balance sheet date for the temporary differences and recorded under Other Receivables, with offsetting entry in with
the income statement for the period. The attainment of these tax credits will occur simultaneously when the
attainment of the temporary differences and of the related provisions recorded accordingly.
Post-Employment Benefits
Pension Plan and Health Plan
Banrisul sonoras FBSS - Fundação Banrisul de Seguridade Social (Banrisul Social Security Foundation) and CABERGS Caixa de Assistência dos Empregados do Banco do Estado do Rio Grande do Sul (Medical Assistance for Employees of
Banco do Estado do Rio Grande do Sul) which, respectively, ensure the complementation of retirement benefits and
medical care to its employees. The accounting recognition in Banrisul follows the rules provided in CVM Resolution no.
600/09.
The retirement plan in the defined benefit model has the cost of benefits granted determined by the method of
Projected Credit Unit, net of collateral assets of the plan.
The actuarial valuation is prepared based on assumptions and projections of interest rates, inflation, increases in
benefits, life expectancy, among others. The actuarial valuation and its assumptions and projections are updated on
an annual basis at the end of each year.
The defrayal of benefits under the defined benefit plans is determined separately for each plan using the Projected
Credit Unit method. The costs of past services are recognized as expenses, linearly over the average period until the
right to the benefits is acquired. If the entitlement to benefits have already been acquired, past service costs are
recognized immediately upon the introduction or change of a retirement plan.
The asset or liability of the benefit plan recognized in the financial statements corresponds to the present value of the
defined benefit obligation (using a discount rate based on long-term Federal Government bonds), deducted of past
service costs and actuarial gains and losses not yet recognized and diminished of the fair value of plan assets that will
be used to settle the obligations.
When the net accumulated non recognized actuarial gains and losses for each plan at the end of the previous base
period exceeds 10% of the higher amount between the defined benefit obligation or the fair value of plan assets at
such date (corridor method), the excess amount of actuarial gains and losses are then recognized as income or
expense over the average expected working service time remaining of employees participating in the plan.
Plan assets are assets held by a Closed Pension and Health Plan Entity - Cabergs. The plan assets are not available to
creditors of Banrisul and cannot be paid directly to Banrisul. The fair value is based on market price information and in
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the case of listed securities, the quotations on the market. The value of any defined benefit asset recognized is limited
to the sum of any past service cost not yet recognized and the present value of any economic benefits available in the
form of reductions in future contributions made by the employer to the plan.
Until December 31, 2012, the recognition of actuarial gains and losses followed the "corridor method", as set out by
CVM Resolution no. 600/09. From 2013 onwards, the revised standard IAS 19 adopted by the CPC (Accounting
Pronouncements Committee) and CVM Resolution No. 695/2012 will be applicable, when possible gains/losses will be
recognized respectively as assets or liabilities in the financial statements against equity, as described in Note 23 to the
Financial Statements.
Retirement Award
Banrisul offers its employees a premium for retirement that is paid in full on the date the employee leaves the
company for retirement. On December 31, 2012 the existing provision for this benefit was R$100,398 (2011 R$88,487), considering the charges levied.
As set forth in CVM Resolution no. 695/2012, from January 1, 2013 onwards, any actuarial gains or losses will be
respectively recognized as assets or liabilities in the financial statement against equity. According to the assessment of
actuaries, the amount of this obligation plus legal charges is roughly R$153 million and will impact Banrisul equity in
the approximate amount of R$53 million. In December 2012, the Bank had 10,364 active participants of this award.
Cash and cash equivalents
For purposes of the statements of cash flows (as defined in Resolution - CMN 3604/08), cash and cash equivalents
correspond to the balances of cash and readily convertible, highly liquid interbank investments, or with original
maturity not exceeding ninety days and with insignificant risk of change in fair value.
Earnings per Share
The Institution performs the calculations of earnings per lot of one thousand shares, basic and diluted - using the
weighted average number of common shares and preferred total outstanding during the period corresponding to the
result.
The disclosure of earnings per share is conducted in accordance with the criteria defined in CVM Resolution no.
636/2010.
10.6
Internal controls adopted to ensure the preparation of accurate financial statements:
Banrisul's internal control structure is supported by the definition of policies that ensure culture dissemination and
the effectiveness of the system of control through all levels of business, keeping it aligned with company's strategic
goals.
Senior management establishes as policy the alignment of the system of internal controls with the objectives
established by the Institution related to global business strategies and other policies instituted. Seeking full
effectiveness of these guidelines, apart from the Committee of Management of Internal Controls, it was created, in
2011, the Control and Risk Office, which is responsible for the implementation of methodologies and procedures
related to monitoring and evaluating corporate risks and controls.
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Internal control activity is developed together with the commercial, products and back office units, seeking the
improvement of routines, the adoption of best practices, the dissemination of controls procedures and ethical
standards. The proceedings are conducted to reinforce the importance of formalizing policies, responsibilities and
procedures, as well as continuous monitoring in order to reduce and manage risks.
Notable among the actions stand the policy and procedures to prevent money laundering, establishing specific
processes and systems in order to ensure that activities are conducted in an environment of adequate control to
prevent money laundering crimes, according to current legislation.
External regulations
We have established methods to register and monitor operating and risk management process routines conducted in
our various areas, in order to effectively control the aspects recommended by regulatory agencies and the work
performed by the External Audit.
The control of external regulations, carried out by the Legislation Group, consists of the monitoring of the regulations
published by regulatory agencies and banking entities, for purposes of effective compliance by our other areas.
Internal regulations
We have intensified the adoption of measures focused on the strengthening of the internal control system and
compliance management and policies, by establishing a specific Regulatory Instruction, which instructions are
intended to ratify the concepts, main components, goals, responsibilities and regulations relating to the matter.
Money Laundering Prevention - MLP
Based on its institutional policy for the prevention of money laundering, the Bank has internal policies and procedures
to identify and monitor customer’s transactions and provides appropriate training for staff involved in the monitoring.
All these actions abide with the rules for Money Laundering Prevention (MLP) and terrorism financing, including those
of countries where Banrisul has branches. It should be added that our policy of "Know Your Customer" and "Politically
Exposed Persons" complies with international standards established in Basel II.
The Bank also maintains an internal structure with employees exclusively dedicated to the monitoring and analysis of
risks related to preventing money laundering. After assessment and approval by the Committee of Money Laundering
Prevention, suspicious transactions are reported to government authorities.
Policies, internal rules and the procedures adopted must ensure Banrisul (i) that it has knowledge of its customers; (ii)
that external and internal verifications should consolidate the suspect names relating to money laundering and
terrorism, and when assessing the acceptability of a relationship; (iii) that the customer has no commercial
relationship with a shell bank or institutions that maintain business relationships with shell banks; (iv) that, from
within its board of employees, a representative of the Bank is responsible for the compliance with the regulations for
the prevention of money laundering; (v) that it meets the requirements related to the archiving of documents and
reports, as required; (vi) the development and application of appropriate monitoring to enable detection of suspicious
customers activities, and the application of appropriate measures; (vii) that it will report such suspicious activity to the
authorities, and in accordance with the law; (viii) that it has created corporate training programs on prevention of
money laundering, designed verification systems and conducted reliable and compatible audits procedures
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compatible with money laundering prevention.
a.
Efficiency level of such controls, indicating potential errors and measures adopted to correct such errors
The internal controls adopted by us, in our management’s opinion, ensure the preparation of accurate financial
statements and are in line with similar practices adopted in the Brazilian banking market.
b.
Weaknesses and recommendations on internal controls included in the independent auditor’s report
Pursuant to National Monetary Council Resolution no. 3,198, of May 27, 2004, our independent auditors should
prepare as a result of the audit work performed, an internal control system quality and adequacy evaluation report,
including electronic data processing and risk management systems, describing the weaknesses identified.
There was no material weakness identified in our independent auditor’s report in the last year.
10.7
Management comments if the Company has already conducted a public offering
a.
How the proceeds deriving from the offering have been allocated
In early 2012, Banrisul debuted in the international market of subordinated debt securities, obtaining funding of
USD500 million with a 10-year term and coupon of 7.375% pa. (effective yield of 7.50% pa.). At the end of 2012, by
reopening the issue of the subordinated debt held in January of the same year, the Bank accessed for the second time
the international capital market, obtaining the amount of USD275 million with a term of 10 years, interest coupon of
7.375% pa. and an effective yield of 5.95% pa. Both transactions were considered by the Central Bank of Brazil as
eligible to Tier II capital, in the category of subordinated debt according to Resolution no. 3444, of 2007. The funds
captured represent the possibility of extending credit and strengthening Tier II capital, promoting the sustainable
growth of the business.
b.
If there were any material discrepancies between the actual allocation of proceeds and the allocation
proposals disclosed in the offering memoranda of the respective distribution
There were no differences between the application of resources and implementation of the proposals described in the
prospectus.
c.
In the event of discrepancies, the reasons for such discrepancies
There were no discrepancies between the actual allocation of proceeds and the allocation proposals described in the
offering memoranda.
10.8
Management’s description of the material items not disclosed in the Company’s financial statements
a.
The assets and liabilities held by the Company, whether directly or indirectly, which are not recorded in the
Company’s balance sheet (off-balance sheet items)
Escrow deposits
On April 22, 2004, State Law no 12,069, amended by Law no 12,585, of August 29, 2006, was enacted, whereby we are
required to make available, if requested, to the State Government of Rio Grande do Sul up to 85% of the escrow
deposits made by third parties with us (except for those which litigant is the Municipal Government). The unavailable
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portion should be allocated to a reserve fund established to guarantee the refund of such escrow deposits.
As of December 31, 2012, the amount of escrow deposits made by third parties at Banrisul, adjusted through the
balance sheet date by the TR (managed prime rate) variation plus interest of 6.17% p.a., totaled R$7,115,644
thousand (2011 - R$7,115,644 thousand), of which R$2,043,000 thousand (2011 - R$2.043.000 thousand) was
transferred to the State upon its request and written off from the respective balance sheet accounts. The remaining
balance, which makes up the aforementioned fund managed by Banrisul, is recorded in Other Payables - Financial and
Development Funds.
Sureties and Guarantees
Sureties and guarantees granted to customers amount to R$774,737 thousand (2011 - R$598,698 thousand), and are
subject to financial charges and backed by the beneficiaries' sureties.
Securities Custody and Import Credits Co-obligation
Banrisul is responsible for the custody of 398,657 thousand securities owned by customers (2011 – 479,704
thousand).
Banrisul has co-obligations in import credits in the amount of R$69,589 thousand (2011 - R$56.840 thousand).
Third-party Asset Management
Banrisul manages various Funds and Portfolios, which have the following net assets:
Table 18: Assets Under Management
R$ Million
2012
(1)
Investment Funds
Investment Funds in Investment Fund Quotas
Equity Funds
Individual Retirement Funds Program
Fund to Guarantee the Liquidity of Rio Grande do Sul State Debt Securities
Managed Portfolios
Investment Clubs
Total
2011
5,307
103
89
19
66
1,618
2
7,204
2010
5,171
117
84
20
497
1,243
4
7,136
5,285
119
133
229
499
2
6,267
(1)
The investments fund portfolios consist primarily of fixed-rate and variable rate securities. and their carrying amounts already reflect
mark-to-market adjustments at the balance sheet date.
Banrisul is trustee of several Funds and Managed Portfolios, which are composed mainly of fixed income and variable
income securities.
In the quality of trustee, it was responsible for conducting, as counterparty, repo operations of Funds that had
government bonds as collateral. These operations presented an average daily volume of R$1,322,297 in the period,
which represented 18.6% of the average equity of the Funds. Those operations were carried out under market
conditions as it relates to term and rates charged.
Banrisul S.A. Corretora de Valores Mobiliários e Câmbio was responsible for conducting. as counterparty, purchases
APRIL 30, 2013
111
and sales transactions of shares on behalf of equity funds managed by Banrisul carried out from January 01, 2012 to
December 31, 2012. Those transactions had a financial volume of R$144,070, representing 167.9% of the average
equity of equity funds in the same period and were made at market prices through the BM&FBovespa’ s electronic
trading system. Those transactions generated brokerage fees of R$208.
Pool Group Management
Banrisul Consórcios is responsible for the administration of 163 pool groups, such as real estate, motorcycles, vehicles
and tractors. The Company had a customer base of 33,430 active customers at the end of 2012, and a total of R$1
billion in outstanding letters of credit. About 6,000 customers were granted the right to make purchases, with the
amount equivalent to R$156 million being released for the purchase of consumer goods. Net income reached R$14
million.
Property Lease
Banrisul leases properties. mainly used for branches. based on standard contracts which may be cancelled as its own
discretion and include the right to opt for renewal and adjustment clauses. Total future minimum payments under no
cancellable lease agreements as of December 31, 2012 total R$186,625 thousand, of which R$50,548 matures in up to
one year, R$116,439 thousand from one to five years and R$13,589 over five years. Lease payments recognized as
expenses for the period of 2012 amounted to R$57,024.
b.
Other items not recorded in the financial statements
There are no other material items not recorded in the Company’s financial statements.
10.9
Management comments with respect to each of the items not recorded in the financial statements
indicated in item 10.8
Additional comments to each of the items shown in item 10.8 are presented below.
Escrow Deposits
In 2012, approximately 26% of the amount of escrow deposits made by third parties in Banrisul was transferred to the
State. The remainder portion was recorded as liabilities for financial and development funds, constituting one of the
sources of funding for the Bank's treasury. The amount of escrow deposits placed in Banrisul has shown steady growth
in recent years, since historically the State Government has not requested the transfer of the amount that by law it is
entitled. Thus, there is a comfortable amount in the Bank to preserve the liquidity of escrow deposits.
Guarantees
Guarantees and sureties are offered to organizations assessed as low risk by the Institution and there was no record in
2012 that Banrisul had had to honor such sureties and guarantees. The provision of guarantees and sureties generates
revenue for the Institution arising from fees. We do not envision material impact as the outcome of such operations.
Securities Custody and Recourses in Credit Import
The amount reported in item 10.8 as custody services offered to customers, refers to checks deposited, foreign
exchange values in custody and values in custody at the Central Bank of Brazil, among others.
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112
Co-obligations, also mentioned in item 10.8, refer to spot and forward import operations.
Assets Under Management
Assets under management represented 17.4% of the amount raised and under management by Banrisul in December
2012, 19.5% in December 2011 and 20.4% in December 2010. The asset management generated fee revenues of R$68
million to Banrisul in 2012, in comparison to the revenues of R$64 million generated in December 2011 and of R$63
million in December 2010. Those fees represent 34.6% of total revenues generated by the services provided by the
Institution.
Pool Group Management
Revenues originated from pool groups management fees grew in the last three years, reaching R$22 million in
December 2012, and represented 11.1% of fees from services recorded in the period. The increase was due to growth
of pools groups managed by Banrisul.
Property Lease
In 2012, spending on leases grew by 9.8% compared to December 2011, and 10.3% between December 2011 and
December 2010. The changes stem mainly from the implementation of the strategy for the expansion of service
points, and it is expected that lease costs will increase in the coming years.
10.10
Main components of the Company’s business plan:
a.
Investments
The investments in technological modernization and expansion, reform and revitalization of the branch network
focused, in the year of 2012, in expanding the processing capacity to sustain business growth, in the completion of the
safety requirements related to the acquiring project designed for Banricompras Network, in the improvement of
access controls and safety improvements in the technological environments and in network availability as a service
differential. In 2012, R$252 million was invested in technological modernization, enhancements, renovations and
branch expansions.
Expansion / Technological Modernization
Banrisul invested the equivalent of R$213 million in information technology during 2012. These investments reflect
the strategy of continuous improvement of security mechanisms to prevent and combat fraud in banking transactions
and improve the operational efficiency of its systems' infrastructure.
Among the IT infrastructure projects executed in 2012, the following stands out: replacement and expansion of
capacity of mainframe computers, completion of facilities of microcomputer and operating system upgrade of the
servers in the branch network, corporative storage using virtualization, implementation of service desk in the
branches and administrative areas, and the Bank’s membership, on a project pilot, in the channel Infovia RS, the local
Broadband Plan to bring digital communication to the countryside of RS. The technology upgrade package included
the renewal of operating systems, programming languages, databases and other software components.
Other actions related to corporate systems were improvements in the process of acquiring and Banricompras
environment, implementation of check clearing by image, introduction of new technology features in Correspondent
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Banking network, expansion of services in Home and Office Banking and ATMs, startup the Virtual Card project, for
use on mobile devices, implementation of the Pay and Withdraw project and the migration of various systems for
lower platform and intranet. Among the security enhancements, it is listed: the acquiring network, the Banrifone,
Internet and Mobile Banking; issuance of VISA and MasterCard chip card to be used at Banco 24 Horas and Banrisul
ATM network, and the use of Banrisul multiuse card for WEB authentication services offered by the state Department
of Finance (SEFAZ/RS).
Renovations and Expansions
The Bank invested in 2012 the equivalent to R$ 40 million in renovations and expansions of its network, including the
renovation of existing facilities and new branches, with wider, modern structures and within accessibility standards.
The institution's network covers 98.1% of the population of Rio Grande do Sul, besides providing services in several
other states of Brazil, especially in Santa Catarina and Paraná.
In the year 2012, the Service Network Banrisul reached 1,301 points distributed in 468 branches, of which 427 in Rio
Grande do Sul, 26 in Santa Catarina, 13 in other Brazilian states, 2 overseas, 251 stations and 582 Banking Electronic
Service points. Throughout the period, 9 branches were new ones opened and 18 are related to the transformation of
service stations into full branches. Also in 2012, Banrisul innovated in terms of points of service, having created the
Affinity branch focusing on customer relationship and segmentation. It is expected that 87 branches will be
refurbished in the biennium 2013/2014.
b.
Acquisitions already disclosed of plants. equipment. patents or other assets which could materially affect
the Company’s production capacity
Acquired in March 2012, the loans promoting network called Bem-Vindo Banrisul Serviços Financeiros, specializing in
the distribution of payroll loans, is present in five Brazilian regions and represents an opportunity for the Bank to
expand loan origination outside the State of Rio Grande do Sul. The insertion into other markets composes the Bank’s
strategy for growth and geographic deconcentration.
c.
New products and services. indicating: (i) description of surveys in progress already disclosed; (ii) total
amounts disbursed by the Company in connection with surveys for development of new products or services; (iii)
projects in progress already disclosed; and (iv) total amounts disbursed by the Company in connection with the
development of new products or services
We have not developed any new products or services or conducted any surveys over the last three years.
10.11
Comments on other factors materially affecting the operating performance and which have not been
identified or commented in the other items of this sections
There are no other factors materially affecting the Company’s operating performance and which have not been
identified or commented in the other items of this Section 10.
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NIRE 43300001083
COMPENSATION OF DIRECTORS, EXECUTIVE OFFICERS
AND FISCAL COUNCIL’S MEMBERS
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115
PROPOSED COMPENSATION OF THE MEMBERS OF THE BOARD OF ADMINISTRATION, BOARD OF EXECUTIVE
OFFICERS, FISCAL COUNCIL AND AUDIT COMMITTEE, IN ACCORDANCE WITH ARTICLE 12 OF CVM INSTRUCTION 481,
OF DECEMBER 17, 2009
It has been proposed the total amount of up to R$5,500,000.00 (five million, five hundred thousand
Reais) for the compensation of the Management, including the remuneration of the members of the Board of
Administration, of the Board of Executive Officers and of the Fiscal Council, and the Representation Allowance of
the Executive Officers and the respective legal costs.
The Executive Officers are entitled to receiving thirteen compensations per year and are eligible to Profit
Sharing, the latter calculated in accordance with the criteria defined by the collective bank employees bargaining
agreement calculated based on the remuneration.
It will be established the following remuneration:
Executive Officers
a)
for the position of Chief Executive Officer: salary of R$16,413.40 (sixteen thousand, four
hundred thirteen Reais and forty cents) and representation allowance of R$16,413.40 (sixteen thousand, four
hundred thirteen Reais and forty cents);
b)
for the position of Vice-President: salary of R$15,592.72 (fifteen thousand, five hundred
ninety two Reais and seventy two cents) and representation allowance of R$15,592.72 (fifteen thousand, five
hundred ninety two Reais and seventy two cents); and
c)
for the position of Executive Officer: salary of R$14,771.40 (fourteen thousand, seven
hundred seventy one Reais and forty cents) and representation allowance of R$14,771.40 (fourteen thousand,
seven hundred seventy one Reais and forty cents).
Board of Administration: monthly gross salary, per member, of R$7,236.28 (seven thousand, two
hundred thirty six Reais and twenty eight cents);
Fiscal Council: monthly gross salary, per active member, of R$5,789.02 (five thousand, seven
hundred eighty nine Reais and two cents); and
Audit Committee: monthly gross salary, per active member, of R$11,578.05 (eleven thousand, five
hundred seventy eight Reais and five cents).
The compensation of the Executive Officers shall not exceed the ceiling set in Article 2 of the Rio Grande
do Sul’s State Law no. 13,670 of January 14, 2011, which limits the same monthly allowance in cash to the Justices
of the Court of the State of Rio Grande do Sul, equivalent to R$24,117.62 (twenty-four thousand, one hundred and
seventeen Reais and sixty-two cents) in April 2012. The compensation and the profit sharing cannot exceed the
total aforementioned amount, although they are not added one another, nor with the remuneration of the month
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116
in which payment is carried out, nor with the advance of holiday pay, nor with the 13th salary, the additional holiday
pay and profit sharing.
Executive Officers who are Banrisul’s employees or who have being transferred from other gubernatorial
bureaus may opt to continue receiving their original pay plus the amount corresponding to the representation
allowance. The Controlling Shareholder may opt, during the year, to change the compensation of Management, in
compliance with the laws and/or relevant state ordinances, even retroactively, pending the approval of the next
Annual Shareholders’ Meeting, if any, for such changes. If the proposal is approved, the total amount of Banrisul’s
Management, including the remuneration of the Executive Officers, of the Board of Administration and of the Audit
Committee to be submitted to the Shareholders’ Meeting will be limited to up to R$6,000,000.00 (six million Reais)
for the year 2013.
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117
Minute no. 002
1.
Date, time and place: the extraordinary meeting of the Compensation Committee of Banco do Estado
do Rio Grande do Sul S/A (Corporate Tax Payer’s (CNPJ) No. 92.702.067/0001-96 - NIRE No.
43300001083) held on March 25, 2013, at 08:30 am, at the Head Office Building on Rua Caldas Júnior,
177, 4th floor, Porto Alegre - RS.
2.
Verification of attendance: Jorge Luis Tonetto – Coordinator; Francisco Carlos Bragança de Souza and
Marcelo Tuerlinckx Danéris – Members.
3.
Agenda: Management Compensation for Banrisul and its Subsidiaries.
4.
Deliberations: Provided what is set forth by the Article 2 of the Rio Grande do Sul’s State Law no. 13,670
of January 14, 2011, which limits the same monthly allowance in cash to the Justices of the Court of the
State of Rio Grande do Sul, equivalent to R$24,117.62 (twenty-four thousand, one hundred and
seventeen Reais and sixty-two cents) in March 25, 2012, the members of the Compensation Committe
decided to submit to the Board of Administration the following proposal: The Executive Officers are
entitled to receive thirteen compensations per year and are eligible to Profit Sharing, the latter
calculated in accordance with the criteria defined by the collective bank employees bargaining
agreement calculated based on the remuneration. Readjuested by the Ample Consumer Price Index
(IPCA) for the year 2012, which stood at 5.84% (five point eighty-four per cent) the monthly
remuneration of the members of the Board of Directors and Audit Committee and the Board is as
follows: for the position of Chief Executive Officer: salary of R$16,413.40 and representation allowance
of R$16,413.40; for the position of Vice-President: salary of R$15,592.72 and representation allowance
of R$15,592.72; for the position of Executive Officer: salary of R$14,771.40 and representation
allowance of R$14,771.40; Board of Administration: monthly gross salary, per member, of R$7,236.28;
Fiscal Council: monthly gross salary, per active member, of R$5,789.02, and Audit Committee: monthly
gross salary, per active member, of R$11,578.05. The compensation and the profit sharing cannot
exceed the total aforementioned amount, although they are not added one another, nor with the
remuneration of the month in which payment is carried out, nor with the advance of holiday pay, nor
with the 13th salary, the additional holiday pay and profit sharing. Executive Officers who are Banrisul’s
employees or who have being transferred from other gubernatorial bureaus may opt to continue
receiving their original pay plus the amount corresponding to the representation allowance. The
Controlling Shareholder may opt, during the year, to change the compensation of Management, in
compliance with the laws and/or relevant state ordinances, even retroactively, pending the approval of
the next Annual Shareholders’ Meeting, if any, for such changes. If the proposal is approved, the total
amount of Banrisul’s Management, including the remuneration of the Executive Officers, of the Board of
Administration and of the Audit Committee to be submitted to the Shareholders’ Meeting will be limited
to up to R$6,000,000.00 (six million Reais) for the year 2013. They also decided to forward to the Board
of Administration proposal of 7.5% (seven point five percent) adjustment to the management
compensation for Banrisul’s Subsidiaries: Banrisul S.A. Corretora de Valores Mobiliários e Câmbio,
Banrisul S.A. Administradora de Consórcios and Banrisul Serviços Ltda., and of 6% (six percent)
adjustment to the management compensation for Banrisul Armazéns Gerais S.A., in observance of
Resolution no. 04/2009, issued by the the Committee on Corporate Governance of State Owned
Companies - CGCE dated of January 20, 2009 and State Law no. 13,670, dated of January 14, 2011,
namely:
Banrisul S.A. Corretora de Valores Mobiliários e Câmbio:
President
Officers
Remuneration: R$8,817.42
Representation Allowance: R$4,408.71
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118
Total: R$13,226.13
Total: R$11,903.52
Executives are entitled to receiving thirteen compensations per year and are eligible to Profit Sharing, the
latter calculated in accordance with the criteria defined by the Controlling Shareholder, Banco do Estado do
Rio Grande do Sul S.A.
Board of Administration: monthly gross salary of R$2,468.88, and
Fiscal Council: monthly gross salary of R$1,851.66.
Banrisul S.A. Administradora de Consórcios:
President
Officers
Total: R$13,226.13
Total: R$11,903.52
Banrisul Armazéns Gerais S.A.:
President
Officers
Total: R$12,480.73
Total: R$11,232.65
latter calculated in accordance with the criteria defined by the collective bargaining agreement negotiated
with the Union of Employees.
Banrisul Serviços Ltda.:
5. Closing: nothing further to discuss, the meeting was closed, these minutes prepared, read, approved and
signed by the present members. Secretary to the meeting: Mr. Jorge Irani da Silva, Secretary-General.
Jorge Luis Tonetto
Francisco Carlos Bragança de Souza
Marcelo Tuerlinckx Danéris
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119
Minute no. 543
1.
Date, time and place: the extraordinary joint meeting of the Board of Administration and the Fiscal
Council of Banco do Estado do Rio Grande do Sul S/A (Corporate Tax Payer’s (CNPJ) No.
92.702.067/0001-96 - NIRE No. 43300001083) held on March 26, 2013, at 02:00 pm, at the Head Office
Building on Rua Caldas Júnior, 177, 4th floor, Porto Alegre - RS.
2.
Verification of attendance: Túlio Luiz Zamin – Vice-Chairman; Aldo Pinto da Silva; Dilio Sérgio Penedo,
Erineu Clóvis Xavier; Flavio Luiz Lammel; Francisco Carlos Bragança de Souza and Marcelo Tuerlinckx
Danéris – Members of the Board of Administration; Claudio Morais Machado – President, André Luiz
Barreto de Paiva Filho – Vice-President; João Victor de Oliveira Domingues; Eduardo Ludovico da Silva
and Rubens Lahude – Members of the Fiscal Council; Luiz Carlos Morlin – Chief Risk and Control Officer,
and Werner Kohler – Head of the Accounting Unit. Also present, PricewaterhouseCoopers Consultants
for IFRS, Fernando Resch and Alessandra Salami.
3.
Agenda: 3.1) Consolidate Financial Reports under IFRS for the years ended in December 31, 2011 and
2012 – Accounting Unit; 3.2) Management Compensation – General Secretary, and 3.3) General matters.
4.
Deliberations: 4.1) Review of Consolidated Financial Statements under IFRS – December 2012: after the
explanations given by Mr. Werner Kohler, the Members examined and approved of the consolidated
financial statements under IFRS for the years ended December 31, 2011 and 2012, which registered net
income of R$833.7 million, and 4.2) Management Compensation: the Board of Administration approved
of and submitted to the General Shareholders’ Meeting the proposed compensation for the
management of Banrisul and its Subsidiaries for the year 2013, as recommended by the Compensation
Committee at the meeting held on March 25, 2013, as follows: “Provided what is set forth by the Article
2 of the Rio Grande do Sul’s State Law no. 13,670 of January 14, 2011, which limits the same monthly
allowance in cash to the Justices of the Court of the State of Rio Grande do Sul, equivalent to
R$24,117.62 (twenty-four thousand, one hundred and seventeen Reais and sixty-two cents) in March 25,
2012, the members of the Compensation Committe decided to submit to the Board of Administration the
following proposal: The Executive Officers are entitled to receive thirteen compensations per year and
are eligible to Profit Sharing, the latter calculated in accordance with the criteria defined by the collective
bank employees bargaining agreement calculated based on the remuneration. Readjuested by the Ample
Consumer Price Index (IPCA) for the year 2012, which stood at 5.84% (five point eighty-four per cent) the
monthly remuneration of the members of the Board of Directors and Audit Committee and the Board is
as follows: a) for the position of Chief Executive Officer: salary of R$16,413.40 and representation
allowance of R$16,413.40; b) for the position of Vice-President: salary of R$15,592.72 and
representation allowance of R$15,592.72; c) for the position of Executive Officer: salary of R$14,771.40
and representation allowance of R$14,771.40; d) Board of Administration: monthly gross salary, per
member, of R$7,236.28; e) Fiscal Council: monthly gross salary, per active member, of R$5,789.02, and f)
Audit Committee: monthly gross salary, per active member, of R$11,578.05. The compensation and the
profit sharing cannot exceed the total aforementioned amount, although they are not added one
another, nor with the remuneration of the month in which payment is carried out, nor with the advance
of holiday pay, nor with the 13th salary, the additional holiday pay and profit sharing. Executive Officers
who are Banrisul’s employees or who have being transferred from other gubernatorial bureaus may opt
to continue receiving their original pay plus the amount corresponding to the representation allowance.
The Controlling Shareholder may opt, during the year, to change the compensation of Management, in
compliance with the laws and/or relevant state ordinances, even retroactively, pending the approval of
the next Annual Shareholders’ Meeting, if any, for such changes. If the proposal is approved, the total
amount of Banrisul’s Management, including the remuneration of the Executive Officers, of the Board of
Administration and of the Audit Committee to be submitted to the Shareholders’ Meeting will be limited
to up to R$6,000,000.00 (six million Reais) for the year 2013. They also decided to forward to the Board
APRIL 30, 2013
120
of Administration proposal of 7.5% (seven point five percent) adjustment to the management
compensation for Banrisul’s Subsidiaries: Banrisul S.A. Corretora de Valores Mobiliários e Câmbio,
Banrisul S.A. Administradora de Consórcios and Banrisul Serviços Ltda., and of 6% (six percent)
adjustment to the management compensation for Banrisul Armazéns Gerais S.A., in observance of
Resolution no. 04/2009, issued by the the Committee on Corporate Governance of State Owned
Companies - CGCE dated of January 20, 2009 and State Law no. 13,670, dated of January 14, 2011,
namely:
Banrisul S.A. Corretora de Valores Mobiliários e Câmbio:
President
Officers
Total: R$13,226.13
Total: R$11,903.52
Banrisul S.A. Administradora de Consórcios:
President
Officers
Total: R$13,226.13
Total: R$11,903.52
Banrisul Armazéns Gerais S.A.:
President
Officers
Total: R$12,480.73
Total: R$11,232.65
latter calculated in accordance with the criteria defined by the collective bargaining agreement negotiated
with the Union of Employees.
Banrisul Serviços Ltda.:
5. Closing: nothing further to discuss, the meeting was closed, these minutes prepared, read, approved and
signed by the present members. Secretary to the meeting: Mr. Jorge Irani da Silva, Secretary-General.
CERTIFICATE
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121
I hereby certify that this document is a true copy of the Minute no. 543 as of March 26, 2013, drawn in the
Book of Minutes of the Meeting of the Fiscal Council of Banco do Estado do Rio Grande do Sul SA, signed by
the following Members: Túlio Luiz Zamin – Vice-Chairman; Aldo Pinto da Silva; Dilio Sérgio Penedo; Erineu
Clóvis Xavier; Flavio Luiz Lammel; Francisco Carlos Bragança de Souza and Marcelo Tuerlinckx Danéris –
Members.
Secretary-General
Corporate Tax Payer’s (CNPJ) No. 92.702.067/0001-96
NIRE 43300001083
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122
NIRE 43300001083
REFERENCE FORM
ITEM 13. MANAGEMENT COMPENSATION
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123
13.1
Description of the compensation policy or practice with respect to the Board of Directors, Statutory and
Non-statutory Board of Executive Officers, Fiscal Council, Statutory Committees and Audit, Risk, Financial and
Compensation Committees, discussing the following aspects:
a.
Compensation policy or practice goals
We are mixed-capital Company, controlled by the State Government of Rio Grande do Sul. Consequently, in
addition to the general provisions of Law 6.404/76 and the regulations issued by the Brazilian Securities and
Exchange Commission applicable to publicly-held companies, our management compensation policy is subject to
public law rules, including regulatory laws and instructions issued by the State Government of Rio Grande do Sul.
The compensation of the members of our Board of Executive Officers is set forth by our shareholders meeting,
subject to corporate governance standards and the rules stipulated by our controlling shareholder under Resolution
no. 04/2005, dated November 25, 2009, issued by the Corporate Governance Committee for State-Controlled
Entities of the State of Rio Grande do Sul, created by Decree no. 42,273/07 of the State Government of Rio Grande,
which assigned to such committee the responsibility for determining the compensation of managers of statecontrolled companies. And from 2011 on, the management compensation should also observe the limit set by State
Law no. 13,670 of January 14, 2011.
The features of the compensation of our Boards are described below:
a.
b.
Breakdown of the compensation,
including:
i. Description of compensation components
and the purpose of each component
ii. Proportion of each component in overall
compensation
iii. Calculation and adjustment method of
each compensation component
iv. Reasons
to
explain
compensation
composition
c.
Key performance indicators taken into
consideration on the determination of each
The compensation of the members of our Board of Directors is
determined by resolution passed by our shareholders meeting.
As our standard practice, our managers are not paid for two
offices held at the same time; accordingly, members of the
Board of Directors who are also members of the Board of
Officers or the Audit Committee receive only the compensation
for the latter, and not the compensation stipulated for members
of the Board of Directors.
In 2011, the Vice-Chairman and one of the members of our
Board of Administration also held the offices of Chief Executive
Officer and Vice-President, respectively.
Salary: fixed monthly salary.
Salary: 100%
Not applicable. Remuneration without bound indicator.
The compensation of our management is composed of fixed
portion established in accordance with legal requirements set
forth by applicable legislation and other rules aimed at mixedcapital companies in the State of Rio Grande do Sul.
Not applicable.
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124
compensation component
d.
How the compensation is structured to
reflect the growth of the performance indicators
e.
How the compensation policy or practice
is aligned with the Company’s short, medium and
long-term interests
f.
Existence of compensation paid by
subsidiary, controlled or direct or indirect
controlling companies
g.
Existence of any compensation or benefit
subject to the occurrence of any given corporate
event, such as transfer of the Company’s
shareholding control
Not applicable.
Not applicable. The compensation of our management is
composed of fixed portion only.
The overall compensation payable to our management is paid
by us.
Nihil.
13.1.ii – Worksheet stating the participation held by each element of compensation described in item 13.1.b.i in the
total compensation of the Board of Administration, as mentioned in item 13.1.
BOARD
Compensation
2012
%
444,405.00
a.
b.
Breakdown
including:
of
the
2011
100%
%
492,719.80
2010
100%
%
445,000.00
100%
The compensation of the members of our Board of Executive
Offices is determined by our shareholders meeting, observing
the principles of corporate governance and the rules
established by the controlling shareholder.
Executive Officers who are originally Banrisul’s employees or
public servants from the State of Rio Grande do Sul may opt
to continue receiving their original pay.
Until 2010, to Banrisul’s employees in the function of
Executive Officers, compensation includes profit sharing,
calculated in accordance with the criteria defined by the
collective bank employees bargaining agreement, which is
calculated as a fixed percentage upon the salary of the
beneficiary.
From 2011 on, as stated on Article 19 of the Company's
Bylaws, the payment of profit sharing may be extended to all
members of the Board of Executive Officers.
Additionally, our Executive Officers are entitled to receive a
fixed Representation Allowance, which amount is set by our
Board of Administration, fixed at 50% of the compensation
payable with respect to the respective position.
compensation,
i. Description of compensation components
and the purpose of each component
Salary: fixed monthly salary.
Representation Allowance.
Profit Sharing, calculated in accordance with the criteria
defined by the collective bank employees bargaining
agreement, which is calculated upon the salary of the
beneficiary.
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125
ii. Proportion of each component in overall
compensation
Salary: 50% of the fixed monthly compensation;
Representation Allowance: 50% of the fixed monthly
compensation;
Profit Sharing: variable, calculated in accordance with the
criteria defined by the collective bank employees bargaining
agreement, which is calculated upon the salary of the
beneficiary.
iv. Reasons
to explain compensation
composition
c.
d.
e.
long-term interests
f.
g.
Not applicable.
Not applicable.
Not applicable. The compensation of the Executive Officers is
composed by salary (fixed part), by the representation
allowance (also in a fixed percentage) and the profit sharing
(PLR), calculated in accordance with the criteria defined by
the collective bank employees bargaining agreement, which is
calculated upon the salary of the beneficiary.
by us.
Nihil.
total compensation of the Board of Executive Officers, as mentioned in item 13.1.
BOARD
2012
%
2011
%
2010
%
997,120.37
997,120.37
89,678.67
48%
48%
4%
1,215,195.70
1,215,195.70
67,000.00
49%
49%
2%
1,481,765.48
1,481,765.48
65,008.00
48%
48%
2%
62,000.00
2%
3,090,538.96
100%
Salary
Representation Allowance
Profit Sharing
Other Variable Compensation
TOTAL REMUNERAÇÃO DIRETORIA
2,083,919.40
100%
2,497,391.40
100%
Fiscal Council
Our Fiscal Counsel is a permanent by composed by renowned professionals, with the powers and duties determined in
law. Compensation of the members of our Fiscal Council is annually set by our shareholders in the Annual
Shareholders’ Meeting, subject to the provisions of paragraph 3 of Article 162 of Law 6.404/76.
APRIL 30, 2013
126
total compensation of the Fiscal Council, as mentioned in item 13.1.
BOARD
2012
Fiscal Council
Compensation
%
289,888.80
100%
2011
289,888.80
%
100%
2010
%
328,000.00
100%
Audit Committee
a.
b.
Breakdown of the compensation,
including:
i. Description
of
compensation
components and the purpose of each component
ii. Proportion of each component in
overall compensation
iv. Reasons to explain compensation
composition
c.
d.
e.
long-term interests
f.
g.
We have a permanent Audit Committee, consisting of three
members, appointed by our Board of Directors, subject to the
requirements of the Central Bank of Brazil. The monthly
compensation payable to the members of our Audit
Committee is also set by our Board of Administration.
Compensation: fixed monthly salary.
Salary: 100% of the fixed monthly compensation.
There is no variable compensation, only the fixed monthly
salary, without bound indicator.
Not applicable.
The monthly compensation paid to members of the Audit
Committee was set considering the fixed amount paid to the
members of the Board of Executive Officers as salary and the
Company’s short, medium and long term interests, being
compatible with the (local) market remuneration, stimulating
Committee members towards the improvement of practices
and aligning themselves the objectives of the Bank.
by us.
Nihil.
APRIL 30, 2013
127
total compensation of the Audit Committee, as mentioned in item 13.1.
BOARD
2012
Audit Committee
Compensation
13.2
%
393,811.80
2011
100%
393,811.80
%
2010
100%
%
393,811.80
100%
Compensation recorded in net income for the last two fiscal years and estimated compensation for the
current year payable to the board of directors, statutory board of executive officers and fiscal council:
In R$, except for the numbers of Members
BOARD
Board of Executive Officers/Members
Salary
Representation Allowance
Profit Sharing
Other
Board of Executive Officers –
Compensation
Board of Administration/Members
Compensation
2013
2012
2011
2010
9
1,410,880.77
1,410,880.77
108,529.29
9
997,120.37
997,120.37
89,678.67
9
1,215,195.70
1,215,195.70
67,000.00
8
1,481,765.48
1,481,765.48
65,008.00
62,000.00
2,930,290.83
2,083,919.40
2,497,391.40
3,090,538.96
9
738,396.00
9
444,405.00
9
492,719.80
9
445,000.00
5
328,176.00
4,42
289,888.80
4
289,888.80
5
328,000.00
TOTAL COMPENSATION
Compensation-related costs
3,996,862.83
1,073,115.91
2,818,213.20
669,000.00
3,280,000.00
725,000.00
3,863,538.96
865,000.00
TOTAL COMPENSATION + CHARGES
5,069,978.74
3,487,213.20
4,005,000.00
4,728,538.96
Fiscal Council/Members
Compensation
Total
Remark: Year 2012 - In relation to its value, we inform that there is a difference in the total amount of Management remuneration when comparing
Table 13.2 of this document with Note 25 to the Financial Statements 4Q2012, which is related to the compensation of the Audit Committee
(R$393,811.20) that is included in such note.
13.3
With respect to the variable compensation for the 3 last fiscal years and the estimated compensation for
the current fiscal year:
Not applicable. Until 2010, the compensation payable to our management was composed of only one fixed portion
and representation allowance in fixed percentage rate, as described in item 13(a). From 2011 on, the bonuses paid to
Officers, also according to item 13(a), concerning the participation in profit sharing, are subject to the terms of the
collective bargaining applicable to all employees of the Bank.
13.4
With respect to the stock-based compensation plan of the Board of Directors and Statutory Board of
1
Executive Officers in force in the last fiscal year and the estimated stock-based compensation for the current fiscal
3
year:
a.
General terms and conditions
b.
Main goals of the plan
c.
Method of the plan’s contribution to achieve such goals
d.
How the plan is aligned with the Company’s compensation policy
APRIL 30, 2013
128
e.
How the plan aligns the management’s and Company’s interests in the short, medium and long term
f.
Maximum number of shares
g.
Maximum number of stock options to be granted
h.
Conditions for purchase of shares
i.
Criteria for definition of the purchase or exercise price
j.
Criteria for definition of the exercise period
k.
Settlement method
l.
Restrictions on the transfer of share
m.
Criteria and events which, upon verification, will give rise to the interruption, modification or cancellation
of the plan
n.
Effects from the member’s withdrawal from the Company’s bodies on his/her rights set forth in the stockbased compensation plan
Not applicable. We do not have any stock-based compensation plan.
13.5
Number of shares or quotas, and other securities convertible into shares or quotas, issued by the Company,
its direct or indirect controlling shareholders, controlled companies or companies under common control, directly
or indirectly held, in Brazil or abroad, by members of the board of directors, statutory board of executive officers or
fiscal council, separated by body, on the closing date of the last fiscal year.
BANCO DO ESTADO DO RIO GRANDE DO SUL S.A. - BANRISUL
BOARD (SHAREHOLDERS)
ON
ON%
PNA
PNA%
PNB
PNB%
TOTAL
TOTAL%
7
0.00000341%
2
0.00005646%
9
0.00000220%
1
0.00000049%
4
0.00011292%
5
0.00000122%
122
0.00344402%
100
0.00004990%
222
0.00005428%
128
0.00361339%
100
0.00004990%
236
0.00005771%
Fiscal Council
Total Shares from Management
Total Shares
8
0.00000390%
205,043,374
100.00%
3,542,377
100.00%
200,388,726
100.00%
408,974,477
100.00%
BANRISUL ARMAZÉNS GERAIS S/A
ON
ON%
TOTAL
TOTAL%
Board of Admi ni s trati on
Board of Executi ve Offi cers
Fi s cal Counci l
Total Shares
32
0.00457143%
32
0.00457143%
32
0.00457143%
32
0.00457143%
700,000
100.00%
700,000
100.00%
BANRISUL ARMAZÉNS GERAIS S/A
ON
ON%
TOTAL
TOTAL%
Board of Admi ni s trati on
Board of Executi ve Offi cers
Fi s cal Counci l
Total Shares
32
0.00003575%
32
0.00003575%
32
0.00003575%
32
0.00003575%
89,500,000
100.00%
89,500,000
100.00%
APRIL 30, 2013
129
13.6
With respect to the stock-based compensation recorded in the net income for the 3 last fiscal years and the
estimated stock-based compensation for the current fiscal year payable to the board of directors and the statutory
board of executive officers
13.7
With respect to outstanding options granted to the Board of Directors and the Statutory Board of Executive
Officers at the end of the last fiscal year
13.8
With respect to the options exercised and shares delivered relating to the stock-based compensation
payable to the Board of Directors and the Statutory Board of Executive Officers in the 3 last fiscal years
13.9
Summary description of the information necessary to understand the data disclosed in items “13.6” to
“13.8”, such as the explanation on the pricing method of stock and option amounts
13.10
Private pension plans in force offered to the members of the board of directors and the statutory board of
executive officers
Our Executive Officers who are members of our staff receive their regular career pension benefits.
R$ per Year, except Number of Members
Number of Members
Plan's Denomination: Defined Benefit I from Banrisul Foundation
Board of
Administration
Board of
Executive
Officers
Total
4
4
Number of Officers and Executive Officers who comply with
eligible requirement conditions
Restated amount of accumulated contributions in the private
pension plan until the end of last fiscal year, net of the portion
related to contributions directly made by the Management
Restated amount of accumulated contributions made during the
last fiscal year, net of the portion related to contributions directly
made by the Management
2,716,069.00
2,716,069.00
379,612.22
379,612.22
APRIL 30, 2013
130
13.11
Average compensation payable to the members of the Board of Directors, Board of Executive Officers and
Fiscal Council in the Two Last Fiscal Years
Year Ended December 31, 2010
In R$/Year, except Number of Members
Board of
Board of Executive
Officers
Administration (a)
Number of Members
9
Fiscal Council
8
5
Amount of the greater individual compensation
413,008.00
82,044.00
66,635.00
Amount of the lower individual compensation
385,798.54
82,044.00
66,635.00
Average individual compensation amount
386,317.37
74,067.00
66,635.00
(a)
Pursuant to our Bylaws, all members of our Board of Administration receive the same remuneration. The annual salary varies only
according to the number of months in office. In the year ended December 31, 2010, that monthly amount was R$6,837.00 for each
member. Thus, the maximum annual salary indicated in the table above (R$82,044.00) corresponds to the monthly pay times 12 months.
This amount was paid to those members who were in office throughout the year 2010. Using the same metric, in the event that any
given member is paid for periods of less than 12 months, the annual compensation is therefore reduced proportionally.
Board of
Board of Executive
Officers
Administration (a)
Fiscal Council (b)
Number of Members
8.42
6
255,536.43
75,207.00
65,635.20
6,203.10
10,939.20
65,635.20
296,602.30
82,119.97
65,635.20
(b)
(c)
4.42
There was the addition of another Executive Officer to the Board of Executive Officers replacement of Board after the Annual
Shareholders’ Meeting held on April 2011, when in July of the same year the Chief of Information Technology was appointed, totaling
nine executive officers on the Board since that date. The Executive Officer with the highest individual remuneration in 2011 was in office
for ten months out of twelve in 2011, being Mr. Mateus Affonso Bandeira the Executive Officer with the lowest salary in the same
period, as he stepped down from his position as Banrisul’s CEO on January 12, 2011. Average Board of Administration Compensation is
the result of the division of R$2,497,391.40 by 8.42.
There was a reduction in the number of the members of the Fiscal Council from 05 to 04 in May 2011, as defined by the Annual
Shareholders’ Meeting held on April 2011. In the year ended December 31, 2011, the monthly amount paid to the Fiscal Council was
R$5,469.60. Average Fiscal Council Compensation is the result of the division of R$289,889.00 by 4.42.
APRIL 30, 2013
131
Board of Executive
Officers
Number of Members
(b)
(c)
Board of
Administration (c)
9
(a)
(a)
9
Fiscal Council (b)
4.42
323,595.20
82,044.00
65,635.20
10,105.45
41,022.00
5,469.60
231,546.60
82,044.00
65,635.20
Messrs. Tulio Zamin Luiz, Flavio Luiz Lammel and Ivandre of Jesus Medeiros, Banrisul’s CEO, Vice-President and Executive Officer,
respectively, originally located at other organs of the State Public Administration, have opted to continue receiving their previous
remuneration, added to the representation allowance defined to the positions they currently held pursuant to what is defined in Article
2 of State Law no. 13,670 dated January 14, 2011, which limits the monthly allowance in cash to the Justices of the Court of the State of
Rio Grande do Sul, now equivalent to R$24,117.62. Hence, and as per the same limitation, the executiveofficer with the lowest salary in
the period was Mr. Guilherme Cassel (Chief Credit Officer). Average Board of Executive Officers compensation is the result of the division
of R$2,083,919.40 by 9.00.
The composition of the Fiscal Council was altered from 04 to 05 in August 2012, as defined by the Annual Shareholders’ Meeting held in
April 2012. The lowest compensation is paid was perceived by the member of the Fiscal Council Mr. Rafael Rodrigues Alves da Rocha,
elected in the ASM of April, who attended one meeting of the Board of Administration and then was replaced by the alternate member
Mr. Eduardo Ludovico da Silva. Average Fiscal Council Compensation is the result of the division of R$289,889.00 by 4.42.
Only five out of the nine members of the Board of Administration perceive their remuneration, as two of them are also members of the
Board of Executive Officers and two others have declined their remuneration. The Board member with the highest pay in the period was
paid twelve monthly remuneration, while the member who perceived the lowest remuneration earned the equivalent to six-month pay.
Average Board of Administration compensation is the result of the division of R$444,405.00 by 5.42.
Number of Members
Board of Executive
Board of
Officers (a)
Administration (c)
9
9
5
Fiscal Council (b)
325,587.87
82,044.00
65,635.20
325,587.87
82,044.00
65,635.20
325,587.87
82,044.00
65,635.20
(a)
(b)
(c)
Remark: amounts related to payment forecast for 2013.
Average Board of Executive Officers compensation is the result of the division of R$2,390,290.5440 by 9.00.
The composition of the Fiscal Council was altered from 04 to 05 in relation to 2011, as defined by the Annual Shareholders’ Meeting held
in April 2012. Average Fiscal Council Compensation is the result of the division of R$328,176.00 by 5.00.
Six out of the nine members of the Board of Administration perceive their remuneration until June 2012, as two of them are also
members of the Board of Executive Officers and another has declined his remuneration. From July 2012, only five members of the Board
of Administration are paid, as the Chairman of the Board als declined to receiveing his pay. Average Board of Administration
compensation is the result of the division of R$738,396.00 by 9.00.
APRIL 30, 2013
132
13.12
Contractual arrangements, insurance policies or any other instruments which provide for management
compensation or indemnification methods in the event of removal/resignation from position or retirement and
which are the financial impacts on the Company
Not applicable. We do not have any contractual arrangements, insurance policies or any other instruments which
provide for management compensation or indemnification methods in the event of removal/resignation from position
or retirement.
13.13
With respect to the two last fiscal years, indicate the percentage rate of the overall compensation relating
to each management body recognized in the Company’s net income with respect to the members of the board of
directors, statutory board of executive officers or fiscal council who are parties related to the direct or indirect
controlling shareholders, as defined in the accounting policies discussing the matter
Board
Fiscal Council
2011
2011
2010
26.15%
45.28%
18.87%
22.64%
23,10%
-
The percentages herein shown refer to the remuneration recognized in our financial statements for the years
2010 and 2011 paid to Mr. Ricardo Englert and Mr. Mateus Affonso Bandeira, members of our Board of
Administration, who then occupied the positions of Treasury Secretary and Planning and Budget Secretary in the
administration of the State of Rio Grande do Sul, respectively.
As for the years 2011 and 2012, Mr. Odir Alberto Pinheiro Tonnolier, Banrisul’s Chairman of the Board of
Administration, was also the Treasury Secretary for the State of Rio Grande do Sul, while Mr. Andre Luiz Barreto de
Paiva Filho, Mr. João Victor Oliveira Domingues and Mr. Marcelo Tuerlinckx Danéris, held the positions of State
Treasury Deputy Secretary, Executive Coordinator for the High Office of the Governor of the State and Executive
Secretary of the State of Rio Grande do Sul Social and Economic Development Concil, respectively. None of the
members of our Board of Executive Officers occupies similar position or qualifies as a related party of our controlling
shareholder.
13.14
With respect to the two last fiscal years, indicate the amounts recognized in the Company’s net income as
compensation payable to the members of the board of directors, statutory board of executive officers or fiscal
council, divided by body, for any reason other than the position held by such members, such as consulting or
advisory commissions and services provided.
There was no payment of compensation to the members of the board of directors, statutory board of executive
officers or fiscal council for any reason, other than the position held.
13.15
With respect to the 3 last fiscal years, indicate the amounts recognized in the net income of the Company’s
direct or indirect controlling shareholders, subsidiaries or companies under common control, as compensation
APRIL 30, 2013
133
payable to the members of the Company’s board of directors, statutory board of executive officers or fiscal council,
divided by body, describing the reason why such amounts were paid to such individuals.
Not applicable. We are controlled by the State Government of Rio Grande do Sul.
13.16
Other information deemed as material by the Company
All the members of our Board of Directors, Board of Executive Officers and Fiscal Council are covered against civil
liabilities by our D&O insurance policy, with a coverage of up to R$10.0 million.
APRIL 30, 2013
134

BANCO DO ESTADO DO RIO GRANDE DO SUL S/A

Transcription

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