Sustainability - bicbanco

42 Annual and Sustainability Report 2011
CORPORATE CHECKING
This product is a rotating credit line for corporate client
transactional accounts. With a fixed interest rate,
this pre-approved funding limit provides agility and
flexibility for lower volume financial operations. Corporate
checking reached BRL74.7 million, growing 23.6%
compared to the previous year. At the end of 4Q11, this
product accounted for 0.6% of the portfolio.
OTHER CREDIT
This is mostly made up of Resolution No. 2,770
modalities of compror and vendor. This credit totaled
BRL 275.0 million, down by 31.1% compared to 2010.
All other credit were equal to 2.4% of operations.
SECURITIES AND BONDS
The Bank had a total of BRL778.9 million in its securities
and bonds portfolio at the close of 2011, 9.5% less
than the previous year. In line with actions of a preventive
nature due to international turbulence and true to its
conservative profile, the BICBANCO treasury continued
its policy of investing most available resources in lowrisk
bonds, especially in government bonds and bonds
issued by large private companies in Brazil.
Free cash reached the BRL4,010.1
million mark at the end of 2011,
up 65% for the year.
ACCOMMODATIONS AND GUARANTEES
Accommodations and guarantees offered to Bank clients
– a modality not included in the credit portfolio
– reached BRL1,332.5 million at the close of 2011,
31.3% higher than in 2010.
FREE CASH
Aimed at ensuring the liquidity of its assets, the Bank
ended 2011 with net cash of BRL4,010.1 million. This
total is 65% more than in 2010. This result fits with
the Bank’s assessment of the international situation,
indicating the need to leave its assets unexposed to
greater risks, at least as long as the climate of uncertainty
concerning the foreign crisis continued.
DEFAULT AND PROVISION FOR LOSSES
Provisions made by the Bank in 2011 considered losses
that had already been incurred as well as estimated
losses – weighted based on the current crisis situation
the international market is experiencing. When
evaluating credit quality indicators, the so-called “14day
overdue payments” weigh upon the credit portfolio,
since the majority of these overdue payments
are less than 30 days overdue and tend to return to
the standard level after the process of renegotiating
conditions has been started with clients.
For the so-called NPL (“More than 60 days overdue”)
indicators, there was an annual growth of BRL138
million, with little likelihood of a reversal; this should
represent the peak of this type of default. Despite
growth, the provision is already at an unsatisfactory
level of 142.4% higher, as is the Bad Debt Loss Provision
on the total portfolio, which is 4.9%.