Earnings Presentation 2 nd Quarter | 2017 Disclaimer: This - - PowerPoint PPT Presentation

Earnings Presentation

2nd Quarter | 2017

Disclaimer: This presentation may include references and statements on expectations, planned synergies, growth estimates, projections of results, and future strategies for Banco Votorantim, it’s associated and affiliated companies, and subsidiaries. Although these references and statements reflect the management’s belief, they also involve imprecision and risks that are highly difficult to be foreseen. Consequently, they may conduct to different results from those anticipated and discussed here. These expectations are highly dependent on market conditions, on Brazil’s economic and banking system performances, as well as on international market conditions. Banco Votorantim is not responsible for bringing up to date any estimate in this presentation.

Consistent result, with drop in delinquency and effective cost management

Net Income of R$ 145M in 2Q17 and R$ 273M in 1H17

Executive summary

Net Income

• f R$ 145M

Net income of R$ 145M in 2Q17, compared to R$ 127M in 2Q17 and R$ 108M in 2Q16

• In 1H17, the net income totaled R$ 273M, growth of 40.2% over 1H16 (R$ 194M)

Shareholders’ equity reached R$ 8.51B in Jun/17

Diversification

• f revenues

Income from Services and Insurance increased 23.6% in 1H17/1H16, virtually offsetting the 10.1% decrease in the NII, due to the retraction in the corporate market and the greater conservatism in credit Expanded credit portfolio of R$ 57.3B in Jun/17, down 4.5% in 2Q17 and 3.7% in the last 12 months

Reduction of ALL in 1H17/1H16

ALL expenses¹ increased 4.7% in 2Q17/1Q17, but reduced 21.9% in 1H17/1H16

• Wholesale and Consumer Finance presented an ALL expenses reduction in half-yearly comparison

Coverage Ratio of 158% in Jun/17 (Jun/16: 148%)

Drop in delinquency

90-day NPL of 4.4%, 10 bps lower than Mar/17

• Wholesale: 90-day NPL dropped to 2.3% (Mar/17: 2.6%)
• Consumer Finance: 90-day NPL of 5.2% (Mar/17: 5.2%). Vehicles’ NPL dropped to 4.7% (Mar/17: 4.8%)

Effective cost management

Personnel² and administrative expenses decreased nominally 7.1% in 1H17/1H16 Efficiency Ratio for the last 12 months reached 38.1% in Jun/17 (Jun/16: 39.1%)

Highlights of results

• 1. Net of income from recovery of written-off loans; 2. Includes profit sharing expenses

2

Net Income of R$ 145M in 2Q17 and R$ 273M in 1H17

145 127 119 112 108 86 +13.9% +34.1% 4Q16 3Q16 1Q16 2Q17 1Q17 2Q16

Net Income (R$M) 2Q17 profit confirms the consistency

• f Banco Votorantim’ s results

3

R$ 194M +40.2% R$ 273M

Result grew 34% over 2Q16 and 40% in the 1H17/1H16 comparison

Consolidated results

] Net Interest Income (A) 1,208 1,153 1,077

• 6.6%

2,481 2,230

• 10.1%

ALL expenses¹ (B) (457) (368) (385) 4.7% (965) (753)

• 21.9%

Net Financial Margin (A+B) 751 785 691

• 11.9%

1,516 1,477

• 2.6%

Operating Income/Expenses (591) (506) (506) 0.1% (1,167) (1,012)

• 13.2%

Income from Services and Banking Fees 263 290 326 12.5% 519 616 18.6% Personnel² and Administrative expenses (646) (540) (612) 13.2% (1,240) (1,152)

• 7.1%

Tax expenses (95) (88) (92) 4.5% (177) (180) 1.6% Income from subsidiaries 47 58 66 13.5% 90 124 38.5% Other Operating Income/(Expenses) (161) (226) (195)

• 13.7%

(359) (421) 17.2% Operating Income (Loss) 160 279 185

• 33.7%

349 464 33.0% Non-Operating Income (Loss) 6 (16) (1)

• 6

(17)

• Income before Taxes

166 263 185

• 29.8%

355 447 26.2% Income Tax and Social Contribution (58) (135) (39)

• 70.9%

(160) (175) 9.1% Net Income 108 127 145 13.9% 194 273 40.2% (R$ Million) 2Q16 1Q17 2Q17 Var. 2Q17/1Q17 1H16 1H17 Var. 1H17/1H16

Highlights of Results

Consolidated results

• 1. Allowance for Loan Losses (ALL), net of revenues from recovery of written-off loans; 2. Includes profit sharing expenses.

Managerial Income Statement (R$M) Banco Votorantim continues advancing in the profitability of its businesses, operational efficiency, and revenue diversification

4

1H17/1H16: decrease of ALL expenses, diversification of revenues and cost base reduction

Growth in service and insurance revenues virtually offset the reduction in the NII

Diversification of revenue sources

• 1. Ratio between Net Interest Income and Average Interest-Earning Assets; 2. Result of the stake in Votorantim Corretora de Seguros (insurance brokerage) is

recognized using the equity method.

Revenues

5

5.1% 5.1% 4.8%

NIM¹ (% p.y.)

Insurance (Commission)² Services and Fees

263 290 326 2Q16 1,208 (79%) 79 1,535 64 1,523 1,153 (76%)

• 1.8%

2Q17 1Q17 1,077 (72%) 1,495 92 519 616

• 3.2%

1H17 3,018 2,230 (74%) 172 118 2,481 (80%) 3,118 1H16

Net Interest Income and Income from Services, Fees and Insurance² (R$M)

Net Interest Income (NII)

• 10.1%

+18.6% ∆1H17 /1H16 +45.4%

• 6.6%

+12.5% +16.4% ∆2Q17 /1Q17

Higher share of service and insurance in total revenues

Sept/16

4.2 26.3 26.0

Credit Cards 3.2

26.8

1.7

59.5

1.7

57.3

• 3.7%

60.0 Payroll Jun/17 Jun/16

27.4 3.6

1.6

• 4.5%

29.1

Auto finance Dec/16 60.9

27.8

60.0 3.4

3.9 27.5

1.4

Mar/17 Wholesale

28.2 23.2 28.8

1.5

Credit portfolio by segment

Expanded credit portfolio (R$B)

(includes guarantees provided and private securities)

• 10.8%

+1.0% ∆Jun17 /Mar17

• 6.4%

+2.3%

• 12.0%

+5.9% ∆Jun17 /Jun16

• 23.4%

+22.7%

Focus on profitability (vs. growth)

Maintenance of the conservative approach to credit

Expanded credit portfolio of R$ 57.3B in Jun/17, down 4.5% against Mar/17

6

348 341 313 370 313 297 159 116 179 252 55 88

385

• 15.7%

+4.7%

2Q17 1Q16 3Q16 2Q16 368 508 623 4Q16 492 457 1Q17

Credit provision expenses – ALL¹ (R$M)

Credit provision expenses reduced 15.7% in 2Q17/2Q16 90-day CR remains in a conservative level: 158% in Jun/17

Credit indicators – ALL and 90-day Coverage

90-day Coverage Ratio² (%) – Credit portfolio

• 1. Allowance for Loan Losses, net of income from recovery of written-off loans; 2. Ratio between the balance of ALL and the balance of loans past due over 90 days

158% 153% 140% 127% 148%

Jun/17

2,120

Mar/17

3,245

Sept/16

3,267 3,257 2,065

Dec/16

2,638 3,684 2,567

Jun/16

2,174 3,221

90-day NPL balance (R$M) Allowance for Loan Losses balance (R$M)

90-day Coverage Ratio (CR) Wholesale Consumer Finance

Credit provision expenses reduced 21.9% in 1H17/1H16

90-day Coverage Ratio reached 158% in Jun/17

7

R$ 965M R$ 753M

• 21.9%

Banco Votorantim

Auto Finance: delinquency reduced 70bps against Jun/16, to 4.7%

90-day NPL declined to 4.4% in Jun/17

Credit indicators – Delinquency

90-day NPL ratio of the credit portfolio (%)

Wholesale

5.2% 4.6% 5.7% 6.4% 5.7% 4.5% 5.5% 4.4% 2.6% 5.6% 5.8% Sept/15 Sept/16 Jun/16 Jun/17 2.3% Mar/17 Dec/16 2.0% Mar/16 Dec/15 Jun/15 4.8% Mar/15 Dec/14 6.2% Sept/14 Jun/14 6.2% Consumer Finance Auto Finance

Consumer Finance

• 1. National Financial System. 90-day NPL obtained in the historical series released on the Central Bank website

8

4.8% 5.5% 5.2% 4.7% 5.2% 5.4% 5.7% 5.3% 5.7% 5.5% 5.3% 6.5% 5.4% 5.1% 5.5% 6.9%

• 70bps

90-day market¹ NPL reduced 25 bps over the last 12 months

0.5 2Q16 1Q17 2Q17 3.2 (86%) 3.7 +20% 3.7 3.2 (85%) 3.1 2.5 (82%) 0.5 0.6

Auto finance: continued focus on used cars and maintenance of tight credit origination standards

Origination of auto loans (R$B)

• 1. New cars, trucks and motorcycles; 2. Average rate practiced in the last month of the quarter; 3. % of each month’s production with first installment past due over 30
• days. Note: In Jun/17, the average ticket size was R$ 22,000, and the average vehicle age was 4.9 years (portfolio)

Banco Votorantim is one of the leading players in the auto financing market

Consumer Finance – Auto Finance

Focus on used cars, which represented 86% of 2Q17 origination Maintenance of conservative lending standards

+25.3%

• 3.7%

∆2Q17 /2Q16

42% 41% 41% 44 44 44 2Q16 1Q17 2Q17 Down payment Average term

Down payment (%) and Average term (months)

1.2 Sept/16 Jun/16 Mar/17 1.6 1.1 1.4 Dec/16 May/17 1.4

First payment default by vintage³ (%)

Other Vehicles¹ Used cars 25.6 27.1 24.2 Auto finance interest rate² Trigger (2%)

9

304 256 275 267 237 289 75

• 5.3%

Labor claims

Administrative

Personnel – Other¹

2Q17 612

47

1Q17 540 646

47

2Q16

Personnel¹ and administrative expenses (R$M)

• 1. Includes profit sharing expenses; 2. Excludes expenses with labor lawsuits and profit sharing expenses.

Personnel¹ and administrative expenses decreased 7.1% in 1H17/1H16

Effective cost management, with efficiency gain

• 5.2%

+2.5% ∆1H17 /1H16

Personnel

38.4 39.1 Efficiency ratio – last 12 months² (%)

• 43.1%

10

561 532 513 526 167 95 1,240 1H16

• 7.1%

1H17 1,152

Personnel and administrative expenses

145 127 108 691 785 751 751 2Q17 1Q17 2Q16

NII and Income from Services¹ and Insurance

Credit provision expenses – ALL Personnel and Administrative expenses Net Income and Net Margin (post provisions)

R$ Million

Consolidated results

369 418

327

2Q16 1Q17 1,208 1,153 1,077 1,535 1,495 1,523 2Q17 304 256 275 342 284 337 540 Personnel² 2Q16 612 Admin. 646 1Q17 2Q17 341 313 297 116 2Q17 Consumer Finance Wholesale

88 55

2Q16 457 385 368 1Q17 Net Margin Net Income Net Interest Income Services¹ and Insurance

• 1. Income from services and banking fees; 2. Includes profit sharing expenses.

Summary: Net income of R$145M in 2Q17 and R$273M in 1H17

1H17/1H16: decrease of ALL expenses, diversification of revenues and cost base reduction

11

3,018

• 3.2%

2,230 (74%) 788 1H16 3,118 1H17 2,481 (80%) 638 1H17 965 275

• 21.9%

143 1H16 753 610 690 1H16

• 7.1%

532 561 1,152 1H17 620 1,240

679

194 1H16 1,516 1H17 273 1,477 1,516

Reduction in debentures was offset by time deposit and Financial Letters

Funding and Liquidity

Additionally, Banco Votorantim has a stand-by credit facility of ~R$ 7B from BB, which has never been tapped

5.6 6.4 4.5 3.0 2.7 20.4 (32%) 0.9 11.8 1.8 19.4 (30%)

Loans securitized to Banco do Brasil Securities abroad

6.0

Bills (LF)

64.1 67.5

14.8 (22%)

Loans and onlendings

8.4 11.4 (18%) 8.6 5.2 4.3 2.6

63.4 72.3

Other¹

17.4

Debentures (BV Leasing) Time deposits (CDs) Sub Debt Bills (LCA and LCI)

Jun/17 10.4 (16%) 1.1 Jun/16 Mar/17 15.7 (23%) 16.2 6.2 1.5 15.2 (21%) 2.4 6.2 3.3 6.6 13.0 (18%) 6.7 Dec/14

• 1. Includes cash and interbank deposits; 2. Ratio of total high quality liquid assets (HQLA) and the total cash inflows for a 30 days period. Considers stand-by credit

facility with Banco do Brasil. Excluding it, the LCR regulatory reported the Central Bank in Jun/17 was 150% and the regulatory minimum of 80%. Note: In 2016, Bacen introduced Resolution 4,527, which prevents the use of debentures from controlled leasing in repo operations transactions.

Funding evolution (R$B)

High Quality Liquidity Assets (HQLA) (R$B) 12.3 11.8 270% 237% Liquidity Coverage Ratio (LCR) – Pro Forma²

12

Funding volume amounted to R$ 63.4B in Jun/17

Total Capital 9,675 8,010 8,178 Tier I Capital 6,892 6,164 6,255 Common Equity Tier I 6,892 6,164 6,255 Additional Tier I

• Tier II Capital

2,782 1,846 1,923 Risk Weighted Assets (RWA) 64,839 60,872 60,445 Credit risk 57,168 54,358 53,575 Market risk 1,654 1,363 1,719 Operational risk 6,016 5,151 5,151 Minimum Capital Requirement 7,132 6,011 5,591 Basel Ratio (Capital/RWA) 14.9% 13.2% 13.5% Tier I Capital Ratio 10.6% 10.1% 10.3% Common Equity Tier I Ratio 10.6% 10.1% 10.3% Additional Tier I Ratio

• Tier II Capital Ratio

4.3% 3.0% 3.2% Mar.17 Jun17 BASEL RATIO (R$ Million) Jun.16

Capital structure

Note 1: In 2017, the minimum capital requirement is 10.5%. For Tier I Capital, it is 7.25% and 5.75% for Common Equity Tier I. Note 2: There is R$ 319M in subordinated debt issued under the Bacen approval process, equivalent to an additional 52 bps in Tier II.

Tier I Capital ratio of 10.3%, entirely composed of Common Equity

13

Basel Ratio of 13.5% in Jun/17

Appendix

Banco Votorantim is one of the largest privately-held Brazilian banks in total assets...

Banco Votorantim – Overview

Acionista 50% Total

10 largest Banks in Mar/17 - Total Assets (R$B)

...and also in terms of loan portfolio

80 104 147 148 715 866 BTG Pactual Votorantim 1,081 Safra CEF Banco do Brasil 1,442 Citibank 1,282 Itaú 1,318 BNDES Santander Bradesco

10 largest Banks in Mar/17– Loan Portfolio¹ (R$B)

State-owned Foreign National privately-held 20 29 46 52 256 333 421 526 622 701 Santander BNDES Safra Banrisul CEF Votorantim Banco do Brasil Itaú Bradesco Citibank State-owned Foreign National privately-held

1.On-balance loan portfolio according to Bacen’s Resolution 2,682.

Equal representation

• f each

shareholder

Board of Directors Executive board Fiscal Council Audit Committee Compensation & HR Committee Products & Marketing Committee Finance Committee

Total: 50.00% ON: 49.99% PN: 50.01% Total: 50.00% ON: 50.01% PN: 49.99%

Votorantim S.A. Banco do Brasil Ownership Structure Corporate Governance Structure

8th 9th

Banco Votorantim is one of the leading banks in Brazil

“Top 10” in total assets, with strong shareholders and shared governance

15

Shareholders Pillars

Banco do Brasil Votorantim S.A.

+

R$ 57.3B XX Expanded² credit portfolio

Strategy

• 1. Assets under management 2. Includes guarantees provided by the Bank and private securities

Auto Finance

To originate portfolios with quality, scale and profitability To focus on used auto finance (multi-brand dealers), where BV has a history of leadership and expertise

R$ 29.1B

Other Businesses

Payroll loans: to focus on INSS (portfolio refinancing) and Private (portfolio growth) Credit Card, Insurance, Student and Individual loans and Home Equity: to leverage the existing client base and diversify revenues Other synergies with BB: Promotiva etc

R$ 5.0B

Consumer Finance

R$ 34.1B

Corporate Bank

Corporate bank: growth

• Leverage customer base
• Increase spread and cross-

sell Large Corporate: profitability Capital discipline

• Active portfolio management

Business approach focused on long-term relationships

• Agility to serve

Wealth Management

Asset: 9th largest in the market, with innovative products and growing synergies with BB R$ 54.4B in AuM¹ Private: tailor-made solutions

Wholesale

R$ 23.2B

Diversified business portfolio

Focus on increasing profitability and operating efficiency, and diversifying revenues

16

Payroll Loans Auto finance

Loan portfolio (R$B) Loan portfolio (R$B) Among market leaders in auto financing, with the following advantages:

• Capillarity: presence in ~12,000 car dealerships nationwide
• Agility: 83% of proposals with automatic credit decision
• Expertise: continuous improvement of management tools

(pricing, credit, collection etc.)

• Long-term relationship: first access to customer record

Jun/17 23.9 (87%) 25.9 (89%) 3.2 Mar/17 27.5 29.1 3.3 25.5 (89%) Used Jun/16 New 28.8 3.6 Focus on refinancing the INSS payroll loan portfolio (retirees and pensioners)… ...and on increasing the private payroll loan portfolio Selective operation in public payroll agreements Continuous improvement of management tools (pricing, credit, collection etc.) 4.2

0.5 (13%)

2.3 3.2 2.1

0.4 (11%)

Jun/17 3.4 2.8 Private 0.8 0.8

0.3 (10%)

0.8 Mar/17 INSS Public Jun/16

Consumer Finance: increased focus on used auto finance and selective operation in payroll agreements

17

Consumer Finance Businesses

Consumer Finance businesses

Insurance Credit Cards

Active cards (thousand) e Loan Portfolio (R$B) Insurance premiums (R$M) 1.66 1.70 Loan Portfolio Jun/17 Mar/17 1.39 Jun/16 Increase commission revenues by leveraging retail customer base Diversify the insurance portfolio:

• Credit insurance
• Auto
• Personal injury, etc.

8.3 Others Credit Insurance 2Q17 11.4 1Q17 8.5 63.4 61.7 Auto 48.0 5.2 11.8 33.6 41.4 43.6 9.2 2Q16

18

Consumer Finance Businesses

Issuance of Visa and Mastercard credit cards Focus on exploring the current customer base of vehicle financing... ... and growing organically through new business partnerships Active Cards

Consumer Finance businesses

827 774 666

Cards and Insurance: diversification of revenue sources

8.2 5.1 5.4 3.2 0.5 0.8

Highlights and strategy Corporate Bank

Leverage Corporate customer base, increasing spread and cross-sell

Wholesale: continued focus on improving return on capital

Wholesale Business (CIB)

Expanded credit portfolio (R$B and %)

Wholesale business

• 1. Includes debentures and promissory notes; 2. Includes export credit notes, working capital and Loan Offshore; 3. Rural Financing e Advances on Exchange Contracts;

Corporate bank (R$ 300M to R$ 1,500M): portfolio growth

• Increase and leverage the customer base
• Increase spread and cross-sell (FX, derivatives, DCM,

M&A)

• Diversify risk and revenue base

Large Corporate (> R$ 1,500M): increase profitability

• Focus on unfunded products (guarantees) and BNDES
• nlendigns

Discipline in capital allocation

• Risk x return management
• Active portfolio management
• Officers with responsibility for credit

Business approach focused on long-term relationships

• Agility to serve clients

Explore competitive advantages (e.g.: DCM)

Loans² Onlending (BNDES) Financ Export / Import Other³ Guarantees provided Private Securities1 Expanded portfolio R$ 23.2B 19

Balance Sheet

20

Balance Sheet

Jun17/Mar.17 Jun17/Jun.16 CURRENT AND LONG-TERM ASSETS 107,564 103,613 101,658 (1.9) (5.5) Cash and cash equivalents 141 170 135 (20.6) (4.4) Interbank funds applied 19,855 17,932 17,942 0.1 (9.6) Securities and derivative financial instruments 27,458 27,012 27,004 (0.0) (1.7) Derivative financial instruments 4,231 4,211 2,722 (35.4) (35.7) Interbank accounts or relations 619 107 357

• (42.3)

Loan Operations, Leases and Others receivables 46,457 46,641 46,563 (0.2) 0.2 Alow ance for loan losses (2,969) (3,220) (3,231) 0.3 8.8 Tax credit 7,260 7,486 7,495 0.1 3.2 Others 4,511 3,274 2,671 (18.4) (40.8) NON-CURRENTS 463 552 809 46.6 74.6 Investments 262 338 579 71.1 121.3 Fixed assets 95 95 95 0.1 0.3 Intangible and deferred charges 107 119 135 13.8 26.3 TOTAL ASSETS 108,028 104,166 102,468 (1.6) (5.1) Jun17/Mar.17 Jun17/Jun.16 CURRENT AND LONG-TERM LIABILITIES 99,709 95,778 93,928 (1.9) (5.8) Deposits 3,708 7,429 10,255 38.0 176.5 Demand deposits 76 77 67 (12.6) (12.5) Interbank deposits 1,795 2,151 1,754 (18.4) (2.2) Time deposits 1,837 5,202 8,433 62.1

• Money market borrow ings

38,070 33,563 31,017 (7.6) (18.5) Acceptances and endorsements 19,276 23,154 24,054 3.9 24.8 Interbank accounts 32 53 56 6.0 74.9 Borrow ings and onlendings 6,209 4,304 4,459 3.6 (28.2) Derivative financial instruments 3,856 4,341 2,960 (31.8) (23.2) Others obligations 28,559 22,933 21,127 (7.9) (26.0) Subordinated debts 6,426 5,987 5,560 (7.1) (13.5) Credit transactions subject to assignment 15,690 11,438 10,447 (8.7) (33.4) Others obligations 6,443 5,508 5,121 (7.0) (20.5) DEFERRED INCOME 36 30 31 2.5 (13.6) SHAREHOLDERS’ EQUITY 8,282 8,358 8,508 1.8 2.7 TOTAL LIABILITIES 108,028 104,166 102,468 (1.6) (5.1) BALANCE SHEET | Liabilities (R$ Million) Jun.16 Mar.17 Jun17 Variation % BALANCE SHEET | Assets (R$ Million) Jun.16 Variation % Mar.17 Jun17

Mar/17 Jun/17 Sept/16 54.4 Dec/16 55.3 53.8 Jun/16 53.1 51.2

Total Assets Assets under Management¹ Loan portfolio

Jun/17 Sept/16 Mar/17 103.0 Jun/16 102.5 103.8 108.0 Dec/16 104.2 34.1 Dec/16 Jun/17 47.6 33.1 Jun/16 33.5 Mar/17 12.7 34.0 12.9 47.0 33.2 13.8

Consumer Finance

46.9

Wholesale

Sept/16 13.7 14.2 46.9 46.8

R$ Billion

Shareholders’ Equity

• 1. Includes onshore funds (ANBIMA criteria) and private clients resources.

Jun/17 8.51 Mar/17 8.36 Dec/16 8.28 8.43 Jun/16 Sept/16 8.42

Financial highlights

Financial highlights

21

Efficiency Ratio

• 1. Excludes labor lawsuits and profit sharing expenses.

Financial highlights - ER

22

Total Personnel¹ and Administrative expenses (A) 526 454 507 11.5% Total Revenues (B) 1,357 1,276 1,274

• 0.1%

Net Interest Income (NII) 1,208 1,153 1,077

• 6.6%

Income from Services and Banking Fees 263 290 326 12.5% Income from subsidiaries 47 58 66 13.5% Other Operating Income/Expenses (161) (226) (195)

• 13.7%

Efficiency Ratio (A/B) - period 38.7% 35.6% 39.8% 4.2 p.p. Efficiency Ratio - last 12 months 39.1% 38.1% 38.4% 0.2 p.p. EFFICIENCY RATIO (ER) (R$ Million) 2Q16 1Q17 2Q17 Var. 2Q17/1Q17

21 3,069

Jun/16

6.9% 3,257 26 2,989 232 3,267 3,245 198 3,221 3,231 3,223

Mar/17

6.9%

Jun/17 Dec/16

6.9% 3,684 7.7% 3,671 13

Sept/16

6.9% All balance / Managed loan portfolio Specific + Additional Generic²

ALL Balance (R$M) Loan portfolio rated by risk level¹ (%)

Credit quality indicators

Credit portfolio quality

D-H AA-C

11.7% 10.8% 90.2% 9.8%

Jun/17

88.9%

Mar/17

88.3% 11.1%

Sept/16 Dec/16 Jun/16

89.2% 90.2% 9.8% 140 176 262 121 304 646 926 469 624 639

1Q17 4Q16 3Q16 2Q17 2Q16

Credit Recovery (R$M) Net Loss (R$M)

500 448 804 343 207

2Q17 2Q16 4Q16

7.0% 3.9% 4.3% 2.9% 1.7%

3Q16 1Q17

Net Loss³ Net Loss/Managed loan portfolio Revenues from recovery Write-off 23

• 1. According to Bacen’s Resolution 2,682; 2. Considers credit provisions recognized as Liabilities in the "Other“ line (see Note #18d of Financial Statements);
• 3. Net Loss = loans written-off to losses in the quarter + revenues from credit recovery.

Wholesale has a diversified credit portfolio

• 1. Numbers exclude private securities and are net of credit provisions.

Note: Does not consider application of Credit Conversion Factor of 50% in transactions relating to some specific guarantees provided.

24

Credit Portfolio

R$M Part.(%) R$M Part.(%) R$M Part.(%)

Sugar and Ethanol 1,823 8.9% 1,996 10.1% 2,034 12.4% Financial Institutions 3,752 18.2% 4,445 22.4% 1,739 10.6% Petrochemical 1,567 7.6% 1,541 7.8% 1,520 9.3% Telecom 1,606 7.8% 1,468 7.4% 1,478 9.0% Mining 883 4.3% 914 4.6% 951 5.8% Retail 1,236 6.0% 911 4.6% 921 5.6% Railways 781 3.8% 706 3.6% 652 4.0% Agribusiness 762 3.7% 685 3.5% 563 3.4% Eletricity Generation 605 2.9% 537 2.7% 526 3.2% Government 565 2.7% 471 2.4% 499 3.0% Automotive 324 1.6% 548 2.8% 490 3.0% Oil & Gas 401 1.9% 401 2.0% 401 2.4% Pulp and Paper 361 1.8% 326 1.6% 335 2.0% Electricity Distribution 426 2.1% 336 1.7% 307 1.9% Residential Construction 459 2.2% 388 2.0% 287 1.8% Steel industry 116 0.6% 289 1.5% 273 1.7% Road Cargo Transportation 507 2.5% 306 1.5% 273 1.7% Meat and Poultry 286 1.4% 255 1.3% 254 1.5% Car rental 231 1.1% 256 1.3% 237 1.4% Services 314 1.5% 208 1.0% 217 1.3% Other sectors 3,569 17.3% 2,815 14.2% 2,449 14.9% Total¹ 20,576 100.0% 19,801 100.0% 16,405 100.0%

Wholesale Sectorial concentration Jun.16 Mar.17 Jun17

Banco Votorantim’ s main ratings

Ratings

RATING AGENCIES International National

Local Foreign Local

Moody’s

Long-term

Ba2 Ba3 Aa3.br

Short-term

NP NP BR-1

Standard & Poor’s

Long-term

BB brA+

Short-term

B brA-1

Brazil

Sovereign rating

Ba2 BB

25