Risk Factors

Investment decisions should be based on the thorough analysis of information on the history and economic and financial performance of the invested companies. Before taking any decision to invest, the potential investor shall consider the information available in this website, especially those related to the risks mentioned below. The business, financial standing and results of the operations of BI&P may be adversely and materially affected by these risks and, consequently, have a negative impact on the securities issued by the Bank. The most relevant risk factors known by BI&P are described in detail in item 4 of the "Formulário de Referência" (Reference Form) prepared in accordance to Instruction # 480/2009 of the Brazilian Securities Commission (CVM- Comissão de Valores Mobiliários) and available for reading and download in the Download Center of this website. Those risk factors are summarized as follows:

Risks Relating to the Macroeconomic Environment

Global and Brazil macroeconomic conditions may affect our business, the results o four operations and our Share prices.

Economic events in other countries, may influence risk perception and affect the Brazilin economy with adverse impact in our business development and our Shares prices.

Risks Relating to our Bank

Growth in our loan portfolio could lead to increased loan defaults.

Any credit deteriorations of our borrowers’ customers could have an adverse effect on our corporate loan portfolio as a good portion is collaterized by receivables.

Problems in the industries with larger importance in the Brazilian GDP may significantly affect the development and profitability of our business.

Certain mismatches in our loan portfolio and funding sources may adversely affect our operating results or our capacity to expand the credit portfolio.

Difficulties in maintaining and expanding funding through time deposits may adversely affect our results since this is and important funding source.

Any downgrade in our credit ratings could increase our funding costs.

Our securities and derivatives portfolios are subject to market variation due to changes in the national and international economic environment.

We may be unable to implement our business strategy.

Risks Relating to Shareholding Control and Management of our Bank

The departure of members of our management team, or our inability to attract and retain additional professionals at the management level, could have an adverse effect on our operations.

The interests of our controlling shareholders could come into conflict with the interests of other investors.

Risks Related to our Shares

An active and liquid market for our preferred shares may not be maintained at any time, limiting the ability of investors to sell our preferred shares at the price and time they wish.

Risks Relating to the Brazilian Banking Industry

Growing competitiveness in the Brazilian banking industry may negatively affect our business.

Our business is highly dependent on the regulatory environment. Brazilian banks are subject to extensive and ongoing regulatory supervision by the Brazilian government, through the Central Bank of Brazil, both to maintain the banking system soundness as well as a monetary policy instrument. The Brazilian government regularly utilizes the regulations on the banking system to control credit availability and consumption. Therefore, permanent or temporary changes in the government’s rules regulating our operations.

We have no control over the government’s rules regulating our operations, including those pertaining to:

  • minimum capital adequacy requirements;
  • compulsory reserve requirements;
  • limits on loans and other credit restrictions, including compulsory allocations;
  • accounting and statistical data requirements;
  • limits and restrictions on interest rates and fees charged on our customers;
  • changes in the interest basic rate;
  • changes in the fiscal and social security laws that may negatively affect our operations.

Changes in the Brazilian Generally Accepted Accounting Principles (BRGAAP) in light of the convergence to the IFRS - International Financial Reporting Standards may adversely impact our results.