Corporate Profile and History

Corporate profile

Since 1995, with the enactment of Decree Law No. 1,488, which authorized the deduction on the payroll of public service employees of the state of Paraná, Paraná Banco has focused its business on the payroll deductible loan segment. Since then, Paraná Banco has shown consistent growth, combined with low default rates, which has turned the Company into a profitable bank..

Through the JMalucelli Seguradora, Paraná Banco was also one of the first banks to operate in the Surety Bond segment in Brazil, a financial product similar to a bank letter of guarantee that is designed to ensure the performance of obligations established in public or private contracts or in bids. This segment had not yet been explored in Brazil, in which JMalucelli Seguradora is the absolute leader in emission of surety bond with a market share of 28.3%, according to data available at SUSEP from December 2012.

Today besides the payroll deductible loan and the surety bond, Paraná Banco also operates in Middle Market loans, consumer finance, through partnerships with the retailing and reinsurance segments. The reinsurance is an innovative service added to Paraná Banco´s portfolio in 2008, after the end of IRB´s monopoly, "Brasil Resseguros S/A".

JMalucelli Re started its operation basically concentrating on the premiums written by JMalucelli Seguradora. 100% of the premiums reinsured by JMalucelli Seguradora are currently conducted through JMalucelli Re, and the others reinsurance companies in this category. Qualified as a local reinsurance company, JMalucelli Resseguradora and others have the right to receive 40% of the reinsured premiums, pursuant to SUSEP´s Dispatch 225. In November of 2013, according to the data available at SUSEP, JMalucelli Resseguradora´s market-share was 30,8% only for the Group who includes surety bonds and loan insurance.

In 2013, Paraná Banco launched a new business, the “non-traditional real estate loan”, known as Home Equity. The new area of Trade Finance has come to contribute with the agility and speed in financing international market operations destined to exporters and importers.

History

Paraná Banco was founded in 1979, as part of the JMalucelli Group and under the name Paraná Financeira, to operate in personal credit and vehicle financing. In the 1980s, still operating under the name Paraná Financeira, the Company began to operate in payroll deductible loans through agreements with the civil servant associations of the state of Paraná and the municipality of Curitiba.

In 1989, Paraná Banco was authorized to operate as a multiservice commercial bank, which included operating in credit, financing and investment. Beginning with the enactment of legislation authorizing the granting of paycheck deductible loans to government and private sector employees, the Company began to operate directly in this market, and in 1995 Paraná Banco executed an agreement with the state of Paraná to operate in paycheck deductible loans granted to state civil servants.

In 1991 was established JMalucelli Seguradora and in six years it was recognized as the leader company in the surety bonds segment with 28.3% market share in december 2012 according to SUSEP"s data. This is more than the sum of the market shares of the companies ranking second, third, fourth and fifth.

In 1998, in a partnership with the municipality of Curitiba, Paraná Banco launched the "Cartão Qualidade," or Quality Card. This project is a pioneer initiative in Brazil, and consists in issueing smart cards to municipal civil servants that grants access to a number of banking and related services, including the online, real-time granting of paycheck deductible loans, with amortization taking place through deductions from monthly paychecks.

In September 2001, Paraná Banco launched the Mastercard Electronic Consignado credit card, pursuant to which the minimum monthly payment on credit card balances is paid through deductions from paychecks and the unpaid balance is billed to clients for a supplementary payment. Today this service is offered to retirees and pension beneficiaries of INSS.

On October of the following year 85% of the capital stock of the Insurance Company was transferred to Advent International. However on 6 March 2007 the Company entered into a shares purchase and sale agreement to reacquire the capital stock transferred to Advent International. By the agreement Advent International received 7.333.332 preferred shares issued by the Company through 2 subscriptions right foreseen. The first capital increase carried out through the issue of 2,760,784 registered preferred shares increased the interest of Paraná Banco in JMalucelli Seguradora to 55%. 100% of JMalucelli Seguradora´s capital stock was purchased by the bank, through the issue of 4,572,548 registered preferred shares.

In 2007, the Company launched the Franchise’s Project and in June 2012 the Company had already had 55 franchises correspondents operating. The success of the project and three years of research and analysis into market behavior, the competition and brokers was recognized with the ABF Award for best sector franchise in 2008, 2009 and 2010.

The milestone of the Company´s history was the IPO in 2007 that turned Paraná Banco into a public Company. On June 14 of the same year the bank celebrated an initial public offer of 37.8 million preferred shares on São Paulo Stock Exchange, BM&FBovespa, under the ticker "PRBC4". The Company is adhered to the Level 1 of corporate governance practices of the BM&FBovespa. Parana Banco offers 100% of tag along rights to all of its shares.

In 2008 the Company launched its ADR program (American Depositary Receipt) becoming one of the first medium-sized banks to trade ADRs, bringing greater visibility to the Bank in the international capital markets, and making it easier for the Bank to trade its shares in those markets. In 2012, was established JMalucelli Resseguradora covering approximately the total amount of the premiums reinsured by JMalucelli Seguradora.

In 2009, JMalucelli Seguradora and Caixa Seguros entered into an operational agreement of co-insurance to comply with demand of funds of constructors that enter in the housing program of the federal government called "Minha Casa Minha Vida" (My House My Life). Insurers will guarantee to Caixa Econômica Federal (CEF), a financial institution responsible for fomenting this program, the conclusion of the contracted works. "Minha Casa Minha Vida" (My House My Life) program ensure investments of R$ 34 billion for construction of 1 million houses for low income families.

In April 2010, the consortium won with the support of a group of insurance companies, including JMalucelli Seguradora, at the Belo Monte hydroelectric plant construction auction, allowed JMalucelli Seguradora to issue the first surety bond of the Belo Monte´s project, the Bid Bond, and the second, the Performance Bond. The Performance Bond guarantees the full compliance of the construction project for the Belo Monte hydroelectric plant to the Brazilian Electricity Regulatory Agency (ANEEL). The performance bond represents 5.5% of the R$ 19 billion amount approved by the Government for the venture. Located on the Xingu River near the city of Altamira, the hydroelectric plant of Belo Monte should generate 11,233 MW, which corresponds to 10% of Brazil’s demand, and will become the third-largest hydroelectric plant in the world. The issue of Belo Monte´s surety bonds confirms the strategy of JMalucelli Seguradora and JMalucelli Resseguradora of being part of the large projects planned for the coming future, maintaining the leadership in the surety bond market.

In November, 2010 Paraná Banco and its subsidiary, JMalucelli Participações em Seguros e Resseguros S.A. have entered into a Subscription Agreement with Travelers Brazil Acquisition LLC, a company controlled by The Travelers Companies, Inc., a leading US based provider of property and casualty insurance, pursuant to which Travelers Brazil agreed to subscribe to a capital increase of the Company in the amount of R$625.0 million.

In June 17, 2011, after the prior approval by the Brazilian Superintendence of Private Insurance (SUSEP), the investment was conclude and start with the subscription and payment of 191,651,225 common shares issued by the Insurance Holding for a total amount of R$657.1 million—R$625 million restated at the CDI from January 1, 2011 to the date the transaction was completed, under the Subscription Agreement executed by the parties on November 3, 2010. This makes Travelers Brazil the holder of 43.4% of the Company‘s voting capital.

In 2012, Paraná Banco has been through a favorable moment in the expansion of its payroll-deductible loan distribution network thats results in R$ 1,431.4 million in origination of payroll-deductible loans. In July we opened another Paraná Crédito store, the second in Rio de Janeiro, this time in the Madureira district. With this store, today we have 21 stores across the country and we are opening 2 more stores: one in Curitiba (Paraná), and one in Niterói (Rio de Janeiro). Following the same trend of payroll-deductible loan, Paraná Banco opened a new middle market platform in Joinville, state of Santa Catarina and carried out the first transaction as a financial institution accredited to onlend BNDES credit facilities. Paraná Banco is expanding its operations in the state of Santa Catarina with the beginning of operations in the city of Blumenau.

In December 05, 2012, Paraná Banco informed its shareholders and the market in general that Travelers Brazil Acquisition LLC ("Travelers Brazil") exercised its option to increase its equity participation in the Company through the subscription of newly issued common shares and as a result thereof Travelers Brazil has reached 49.5% of the capital stock of the Company.

Fechar