Strategy and Competitive Advantages
Banco Industrial believes that its main competitive advantages, which will support its strategic goals, are:
Operate in segments of the credit market with high growth potential and profitability
The credit market in Brazil has shown continuous growth over the last few years, resulting in favorable conditions for a significant increase in the demand for credit. Taking into consideration our position and operating network, Banco Industrial believes it has a significant capacity to take advantage of the growth potential of the Brazilian credit market, in particular the middle market and paycheck deductible loan segments.
Efficient credit evaluation, assignment and monitoring system
The assignment of credit to Middle Market companies involves a significant level of complexity, requiring a close relationship with the client, profound knowledge of its activities and efficient control of the collateral tendered by such client and which is frequently linked to the loan. Banco Industrial believes its successful assignment of credit to Middle Market companies results from its solid experience in this segment, which allows the Bank to have a profound knowledge on the nature of these operations and consequently, develop an extremely important group of tools to operate in a safe and profitable manner.
Financial Strength and Low Default Level
The growth of Banco Industrial´s credit portfolio has always been followed by the maintenance of its credit quality, reflected by the low levels of default within the Bank´s operations. This results from Banco Industrial´s conservative and rigid credit policy, which involves the detailed evaluation of its clients, operations and the collateral received by Banco Industrial. In addition, Banco Industrial´s expertise in the credit sector has allowed it to develop a method for the conservative analysis of credit risks and implement efficient credit control procedures, adjusted to the profile of each client, which Banco Industrial believes provides the Bank with lower exposure to credit risk. Both in the Middle Market and paycheck deductible loan segments, Banco Industrial gives priority to the high quality of its credit portfolio, thereby adopting the [“Borrower Risk”] and [“Self-Liquidated Loan”] models as the basis for its credit policy.
Widespread and Differentiated Client Base
Banco Industrial´s credit policy provides for the diversification of its total credit portfolio, including the adoption of a strict control of credit concentration per client as a tool to mitigate risks. Banco Industrial´s clients operate in different sectors of the economy, which it believes will reduce Banco Industrial´s exposure to the seasonal factors affecting each industry. Furthermore, the own nature of the credit segments in which Banco Industrial operates contributes to the quality of its portfolio. Banco Industrial believes that its loans to Middle Market companies are largely backed by low-risk collaterals, represented by [checked] trade receivables monitored through Banco Industrial´s IT system, with borrowers. On the other hand, Banco Industrial´s receivables reflect a reduced risk profile, since payment of installments is directly deducted from the paychecks, benefits or salaries of its clients.
Qualified employees and experienced management team
Banco Industrial has a highly skilled and qualified team of employees and officers and directors, and it also has a solid history of stability and professionalism in its activities, which provides the Bank with market credibility. Banco Industrial invests in the academic and professional development of its employees, officers and directors in order to expand their expertise in the banking area and the Middle Market and paycheck deductible loan segments. Banco Industrial has a low staff turnover as compared to the banking market in general.
Banco Industrial intends to continue to expand its activities and seek new business opportunities to provide the high returns to its shareholders. Based on its conservative risk analysis and credit policy, Banco Industrial intends to expand its operations without affecting the quality of its credit portfolio and the low default levels recorded in recent years. Banco Industrial believes that its historically successful strategy will support the growth of its business and generation of value to its shareholders. For this purpose, the Bank will seek to implement the following strategies:
Further increase Banco Industrial´s operations in the Middle Market segment
Banco Industrial intends to consolidate its qualitative leadership position in the Middle Market segment. The Bank believes that the Middle Market operations are and will continue to be an important niche of opportunity for the development of its activities. Banco Industrial also intends to expand its operations in the Middle Market segment by expanding its distribution network through the successful operating strategy of its managers in several locations in Brazil and by hiring new managers in order to expand the Bank´s sales team.
Reduce Banco Industrial´s cost of funding
and increase the diversification of its sources of funds, including, but not limited to, through the issuance of securities abroad and credit assignment agreements with other financial institutions.