Below is a comparison table between this 2 banks. I wish to draw attention to:
- Financial operations expenses increased a lot, specially in Bic Banco, due to increase in provisions for loan losses (+98%)
- Loan Portfolio of Daycoval has been increasing a great deal: 42% in 2011 and more than doubled since the end of 2009.
- Daycoval seems to have a more diversified portfolio service: exchanges bureaus, Daypag and Asset Management (1.4 billion under management)
- Daycoval also looks more profitable: better NIM, ROE, efficiency ratio...
7 comments:
Before 2011 BicBanco was the more efficient and aggressive. They changed positions last year.
BICB and DAYC has virtually the same shareholders' equity, but BICB has a portfolio 50% higher than DAYC. Nonetheless, BICB bis ratio is higher. Why?
I got it. BICB has a higher BIS ratio because it includes subordinated debts, which increases Reference Equity - TIER II in 877 millions.
Subordinated debt is debt which ranked after other debts should a company fall into receivership or bankruptcy.It has a lower priority than other bonds of the issuer in case of liquidation during bankruptcy, below the liquidator, government tax authorities and senior debt holders in the hierarchy of creditors. Because subordinated debt is repayable after other debts have been paid, they are more risky for the lender of the money. It is unsecured and has lesser priority than that of an additional debt claim on the same asset.
Subordinated loans typically have a much higher rate of return than senior debt due to the decrease of a money devolution and therefore a higher risk.
There's something smelling inside BICB4. Take a look at the line "outras despesas operacionais", wich grew 58,75% in 2011.
I went to the notes, wich don't say explain much, anyway. But I saw those lines that are part of the "outras despesas operacionais" (2011/2010):
- Descontos concedidos em antecipações e renegociações ..........................38.724/6.170
- Programa de remuneração aos funcionários....42.145/28.796
Please explain to me:
- Shouldn't the "descontos concedidos em antecipações e renegociações" be classified as "Resultado de operações de crédito"?
- how the employees got a 46% raise of its compensation if the results went more than 30% down year over year?
From BicBanco earnings release I also noted one other important fact (dez2011/dez2010)
- loans unpaid for more than 60 days: 3,4% / 2,0%
- loans unpaid for more than 90 days: 2,8% / 1,7%
- loans unpaid for more than 14 days: 2,6% / 1,2%
The dez/set 2011 comparison is also frightening:
- loans unpaid for more than 60 days: 3,4%/2,8%
- loans unpaid for more than 90 days: 2,8%/2,2%
- loans unpaid for more than 14 days: 2,6%/1,6%
Somebody screwed it up generating bad loans!
As you see the poor results in 2011 were not only due to caution, there was a real and important rise in NPL.
Yeah, you're right. Loan portfolio decreased and yet they got bad indicators on non performing loans.
I don't know why compensation increased. Also note that personnel and administrative expenses grew a lot (when loan portfolio decreased).
Tomorrow I'll try to listen the audio conference, in search for clues.
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