Earnings Presentation 2 nd Quarter | 2018 Disclaimer: This - - PowerPoint PPT Presentation

2nd Quarter | 2018

Earnings Presentation

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.

Total revenues (NII + revenues from services and insurance) increased by 8.9% in 1H18/1H17, reflecting the higher profitability in the businesses. Net Interest Margin (NIM) increased to 6.2% in 1H18, compared to 5.3% in 1H17.

Net income of R$ 511M in 1H18, and ROE of 11.6%

Consistent revenue generation, maintenance of credit quality and cost basis control

2

Highlights of results

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

Executive summary

Net Income Revenues Credit Costs¹ Delinquency (NPL90) Cost Basis²

R$ 511M R$ 256M +87.5%

(1H18/1H17)

+0.7% (2Q18/1Q18) R$ 3,502M R$ 1,718M +8.9% (1H18/1H17)

• 3.7% (2Q18/1Q18)

R$ 705M R$ 379M

• 25.8% (1H18/1H17)

+16.3% (2Q18/1Q18) NPL 90 4.0%

• 40bps (1H18/1H17)

+10bps (2Q18/1Q18) R$ 1,194M R$ 541M +3.6% (1H18/1H17)

• 17.3% (2Q18/1Q18)

90-day NPL of 4.0% in Jun/18, down 40 bps against Jun/17.

• Wholesale: 90-day NPL dropped to 1.3% (Jun/17: 2.3%).
• Consumer Finance: 90-day NPL dropped to 4.9% (Jun/17: 5.2%).

Result¹ of loan losses decreased 25.8% in 1H18/1H17. Increase in 2Q18 is a reflection of specific effects arising from the macroeconomic situation. 90-day Coverage Ratio reached 184% in Jun/18 (Jun/17: 158%). Personnel² and administrative expenses increased by 3.6% in 1H18/1H17 (below inflation), mainly reflecting the higher businesses activity Efficiency Ratio (12 months) decreased to 32.9% in Jun/18 (36.0% in Jun/17). Net income of R$ 511M in 1H18, compared to R$ 273M in 1H17. Return on Equity (ROE) of 11.6% p.y. in 1H18 (6.6% in 1H17).

256 255 156 153 145 127 11.6% 2Q18 1Q18 1Q17 6.2% 3Q17 4Q17 7.1% 11.8% 7.3% 2Q17 7.3%

Net Income (R$M) Quarterly net income confirms new level

• f Banco Votorantim results

3

Consolidated result 511 273 11.6% 1H18 1H17 6.6%

Net income of R$ 511M in 1H18, and ROE of 11.6%

ROE (% p.y.) 87%

] Net Interest Income (A) 1,222 1,347 1,259

• 6.6%

2,427 2,606 7.4% Result of loan losses¹ (B) (530) (326) (379) 16.3% (950) (705)

• 25.8%

Net Financial Margin (A+B) 691 1,021 880

• 13.9%

1,477 1,901 28.7% Operating Income/Expenses (506) (517) (412)

• 20.3%

(1,012) (929)

• 8.2%

Income from Services and Banking Fees 326 325 344 6.0% 616 669 8.6% Personnel² and Administrative expenses (612) (653) (541)

• 17.3%

(1,152) (1,194) 3.6% Tax expenses (92) (92) (109) 18.3% (180) (201) 11.7% Income from subsidiaries 66 80 83 3.6% 124 163 30.7% Other Operating Income/(Expenses) (195) (176) (190) 7.5% (421) (366)

• 13.1%

Operating Income (Loss) 185 505 468

• 7.3%

464 972 109.4% Non-Operating Income (Loss) (1) (3) (2)

• 45.4%

(17) (5)

• 70.5%

Income before Taxes 185 501 466

• 7.0%

447 967 116.2% Income Tax and Social Contribution (39) (247) (210)

• 15.1%

(175) (456)

• Net Income

145 255 256 0.7% 273 511 87.5% (R$ Million) 2Q17 1Q18 2Q18 Var. 2Q18/1Q18 1H17 1H18 Var. 1H18/1H17

• 1. Net of revenues from recovery of written-off loans and impairments; 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

Highlights of Results

1H18 x 1H17: Consistent revenues generation, with maintenance of credit quality

4

Consolidated result

Revenues

NIM reached 6.2% in 1H18, driven by the growth of Net Interest Income Income from services and insurance grew in 2Q18 and 1H18, reflecting the auto finance origination

5

• 6.6%

1,347 2Q18 1,259 1Q18 1,222 2Q17 Net Interest Income – NII (R$M) Income from Services, Fees and Insurance2 (R$M)

5.4% NIM¹ (%p.y.) 6.6% 3.9 Auto finance

• rigination (R$B)

4.1

1H18 2,606 1H17 +7.4% 2,427 326 325 344 92 112 115 437 2Q18 459 +5.1% 1Q18 2Q17 419 897 616 +13,8% 172 227 669 1H18 1H17 788

5.3% 6.2% 7.2 8.1

Growing and diversified revenue base

1H18 x 1H17: Both NII and income from services and insurance increased

6.1% 3.6

Services and Fees Insurance (Commission)²

Decrease in NII in market activities

• 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.

25.2 (42%)

Jun/17 Wholesale Auto Finance Loans¹ +1.5%

3.6 1.9

Sept/17 59.7

3.3 3.8 1.7

59.2 Mar/18 59.4

29.4 23.0 21.8

58.3

31.2 31.6 2.0 3.4 1.9

Dec/17 59.0

22.4 (38%) 30.5 3.9 28.5 1.7

Jun/18

24.7

Expanded credit portfolio (R$B)

(includes guarantees provided and private securities)

+2.6% +1.3% ∆Jun18 /Mar18

• 4.4%

+4.0%

• 11.4%

+10.7% ∆Jun18 /Jun17

• 16.0%

+17.1%

Focus on profitability, with increased participation of the Consumer Finance business in the portfolio

Maintenance of the conservative approach to credit

Expanded credit portfolio of R$ 59.2B in Jun/18, increase of 1.5% in 2Q18 and stable YoY

6

Consumer Finance Credit Cards

• 1. Portfolio comprised by products: payroll (retirees, private and public), personal credit (with and without guarantee), home equity, student credit and solar

Credit portfolio

+14.4% 2Q17 4.1 3.5 (90%) 3.9 3.6 0.4 2Q18 3.7 (89%) 0.4 0.5 1Q18 3.1 (87%)

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. Weighted average rate for the quarterly origination.

Note: in Jun/18, the average ticket size was R$ 23,000, and the average vehicle age was 5.0 years (portfolio).

Banco Votorantim is one of the market leaders in auto financing

Consumer Finance – Auto Finance

Focus on used cars, which represented 89% of 2Q18 origination Maintenance of conservative lending standards

+16.8%

• 18.7%

∆2Q18 /2Q17

41% 42% 41% 44 44 44 2Q18 1Q18 2Q17 Down payment (%) Average term (months)

Down payment, average term and interest rate

Other Vehicles¹ Used cars 22.6 24.0 21.5 Interest rate (% p.y.)²

7

90-day Coverage Ratio remains in a sturdy level

184% 191% 192% 165% 158% 1,924 3,218 1,969 1,861 3,257

Jun/17

2,068

Sept/17

1,947

Jun/18

3,688 3,630

Mar/18 Dec/17

3,551

Allowance for loan losses balance (R$M) 90-day NPL balance (R$M)

Result¹ of loan losses and impairments declined over the 1H17, mainly in Wholesale

297 299 371 233

2Q18 379

8

1Q18

26

2Q17 326 530

Wholesale Consumer Finance ∆1H18 /1H17 +9.9%

• 90.0%

8

Credit costs dropped 26% in 1H18/1H17

90-day Coverage Ratio reached 184% in Jun/18

Credit indicators – Loan losses and 90-day Coverage

340

• 25.8%

705 610 670

1H18 1H17

950 34 90-day Coverage Ratio² Result of loan losses¹ and impairments - (R$M)

• 1. Net of revenues from recovery of written-off loans; 2. Ratio between the balance of Allowances for Loan Losses and the balance of loans past due over 90 days.

90-day Coverage Ratio

Banco Votorantim Wholesale

5.5% 4.0% 3.9% 5.7% 5.2% 4.0% 4.6% 4.4% Jun/17 Sept/17 2.3% Mar/17 Jun/15 4.8% 5.6% Sept/15 Dec/16 2.0% Mar/16 Dec/15 5.8% Jun/16 Sept/16 1.5% Jun/18 1.3% Dec/17 Mar/18 1.8%

Consumer Finance

4.7% 4.7% 5.5% 5.7% 5.7% 5.1% 4.9% 5.2% 5.3% 4.4% 5.4% 5.3% 5.4% 4.1% 4.6% 4.2%

9

90-day NPL declined to 4.0% in Jun/18 (4.4% in Jun/17)

Auto Finance: delinquency decreased 30bps YoY, to 4.4%; Wholesale’s NPL decreased again

Credit indicators – Delinquency

• 30bps

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

Consumer Finance Auto Finance

The cost base management contributed to the improvement

• f the Efficiency Ratio for the last 12 months

275 277 301 289 272 194 105

36.0% 541 33.7%

46

1Q18 612 2Q18 653 32.9%

47

2Q17

Personnel¹ and administrative expenses (R$M)

+8.6%

• 11.5%

∆1H18 /1H17

Personnel

Efficiency ratio – last 12 months² (%) +59.3%

10

Personnel and administrative expenses

532 578 526 466 95 151

1H18 +3.6% 1,194 1H17 1,152 Labor claims Personnel – Other¹ Administrative

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

Net Income and ROE Personnel and Administrative expenses NII and Income from Services¹ and Insurance Result² of loan losses and impairments

437 459 1,259

419

1,222 1,718 1,640 2Q18 1,784 1Q18 2Q17

• 3.7%

1,347 275 277 301 337 377 240 2Q17 612 653

• 17.3%

Admin. Personnel³ 2Q18 541 1Q18 297 299 371

233

+16.3% Consumer Finance Wholesale 2Q18 326 1Q18 379 530

8 26

2Q17

11

Summary: Net income of R$ 511M in 1H18, and ROE of 11.6%

Consistent revenue generation, maintenance of credit quality and cost basis control

Consolidated result

788 2,606 1H18 3,502 897 3,215 +8.9% 1H17 2,427 620 1H18 532 1,152 +3.6% 578 616 1H17 1,194

• 25.8%

1H18 705 670

34

950 610

340

1H17

Net Interest Income Services¹ and Insurance

• 1. Income from services and banking fees; 2. Net of revenues from recovery of written-off loans; 3. Includes profit sharing expenses.

R$ Million 1H18 1H17 273 6.6% 511 11.6%

256 255 145 11.6% 7.1% 2Q18 2Q17 1Q18 11.8% Net income ROE

20.5 (35%) 7.7 7.7 (13%) 8.6 5.6 4.5 10.4 (16%) 2.7 8.4 2.6 Jun/17

63.4

2.6 20.4 (32%) 20.8 (33%) 4.6 3.5 2.6 Mar/18

58.4

6.5 10.7 4.1 8.2 (13%)

Bills (LF)

Jun/18

63.8

Loans and onlendings Debentures (repos) Loans securitized to Banco do Brasil Sub Debt Time deposits Bills (LCA, LCI and LAM)

7.9 5.8 2.8 6.4

• 1. Includes cash and interbank deposits, and securities abroad, whose balance was R$ 0.6B in Jun/18; 2. Ratio of total high quality liquid assets (HQLA) and the total

cash inflows for a 30 days period in a stress scenario, being the minimum regulatory of 90%. Does not consider standby credit facility with Banco do Brasil.

Funding evolution (R$B)

11.2 172% Other¹

12

Funding volume amounted to R$ 63.8B in Jun/18

Credit assignments and Bills represented almost half of total funding

Funding and liquidity

11.2 196% High Quality Liquidity Assets (HQLA) (R$B) Liquidity Coverage Ratio (LCR)²

Additionally, Banco Votorantim has a standby credit facility with BB since 2009, which has never been tapped

13

10.3 13.1 3.3

3.2

Jun/17 3.4 Mar/18 12.8 Jun/18 16.0 13.5 16.6

• 60bps

CET1: 10.8%

Tier I Tier II Jun/17 Jun/18 Mar/18 8.5 8.2 9.5 9.1 9.6 9.3 Total Capital Shareholders’ equity 1.7 51.8 5.2 2.3 53.6 Jun/17 1.4 Credit 5.6 50.1 Mar/18 5.6 Jun/18 Market Operational 59.8 60.4 57.1

Capital structure

Basel Ratio of 16.0% in Jun/18

Tier I Capital ratio of 12.8%, with 10.8% of CET1

Total Capital and Shareholders’ Equity (R$B) Basel Ratio¹ (%) Risk-weighted assets – RWA (R$B)

• 1. On Nov / 17 the Bank issued USD 300M in perpetual bonds, which were approved in Mar/18 to compose complementary CET1.

Note: In 2018, the minimum regulatory capital requirement was 10.5% for the Basel Ratio, 7.88% for Tier I Capital Ratio and 6.38% for CET1.

Appendix

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

Banco Votorantim – Overview

Shareholder 50% Total

10 largest Banks in Mar/18 - Total Assets (R$B)

...and also in terms of loan portfolio

83 94 153 168 713 855 BTG Pactual Safra Votorantim Santander BNDES Bradesco 1,074 Cielo S.A. 1,401 1,421 Itaú 1,272 CEF Banco do Brasil

10 largest Banks in Mar/18 - Loan Portfolio¹ (R$B)

National privately-held State-owned Foreign 19 31 48 61 279 297 409 538 614 688 CEF Banco do Brasil Itaú Bradesco Santander BNDES Banrisul Safra PAN Votorantim Foreign National privately-held State-owned

8th 9th

Banco Votorantim is one of the leading banks in Brazil

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

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

15 Board of Directors Executive Board Fiscal Council Audit Committee Compensation & HR Committee Advisory Committee Risk and Capital Committee

General Meeting

Management

Corporate Governance Structure

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

Shareholders

Pillars

Banco do Brasil Votorantim S.A.

+

R$ 59.2B Expanded¹ credit porfolio

Strategy

• 1. Includes guarantees provided by the Bank and private securities; 2. Risk-adjusted return.

Auto Finance

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

R$ 31.6B

Other Businesses

Credit Cards and Insurance: revenue diversification cross- selling to Auto customer base Loans: revenue diversification

• Payroll loans
• Personal loans
• Home equity
• Student loans
• Solar energy

Promotiva: dedicated payroll loans origination to BB

R$ 5.3B

Consumer Finance

R$ 36.8B

Corporate Bank

Corporate: growth

• cash management, financial

structure, guarantees, floating capital, hedge, FX, capital markets and M&A Large Corp.: profitability

• capital markets, financial

structure, guarantees and treasury Agility and flexibility to serve Capital discipline (RAR²)

Wealth Management

Asset: 11th largest in the market, with innovative products and growing relevance with BB R$ 50.1B in AuM Private: focus on asset management through tailor- made solutions

Wholesale

R$ 22.4B

16

Diversified business portfolio

Focus on increasing profitability, operating efficiency and diversifying revenues

Loans and financing Auto finance

New 28.5 Used 25.3 (89%) 28.8 (91%) 28.3 (91%) Mar/18 Jun/17 3.2 2.8 2.9 31.2 Jun/18 31.6 2.4

0.8

Payroll loans Personal Loans¹ + Other² Jun/18 Mar/18 3.4 2.6 3.3 Jun/17

0.8

3.9

0.7

3.2

Consumer Finance businesses

17

Consumer Finance Businesses

Loan portfolio (R$B) Loan portfolio (R$B)

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

INSS Private Public

Among market leaders in auto financing, with the following advantages:

• Capillarity: presence in ~18,000 car dealerships nationwide
• Agility: 91% of proposals with automatic credit decision
• Expertise: continuous improvement of management tools

(pricing, credit, collection etc.)

• Long-term relationship: first access to customer record

Payroll loans: refinancing of the INSS (retirees and pensioners) portfolio; increasing the Private portfolio; selective operation in Public payroll agreements Personal loans and other businesses:

• Personal loans
• Student loans
• Home equity
• Solar energy
• Partnerships with fintechs (ex: Guia Bolso; Neon Pagamentos)
• 1. With and without guarantees; 2. Includes home equity, student credit and solar energy.

Insurance brokerage Credit Cards

Mar/18 Loan Portfolio Jun/18 Jun/17 1.99 1.91 1.70 24 176 121 2Q17 32 Other 234 140 36 58 Credit Insurance Auto 35 2Q18 228 138 54 1Q18

Consumer Finance businesses

0.9 0.9 0.9

18

Credit Cards and Insurance: revenue diversification through cross-selling to auto finance customers

Consumer Finance Businesses

Active cards (million) and Loan Portfolio (R$B) Insurance premiums (R$M) Active Cards Issuance of Visa and Mastercard credit cards Focus on exploring the current customer base of vehicle financing... ... and growing organically through new business partnerships (ex.: Netpoints) Increase commission revenues by leveraging retail customer base Diversify the insurance portfolio:

• Life
• Home
• Personal accidents, etc.

Highlights and strategy Corporate Bank Wholesale Business

Wholesale business

• 1. Risk-adjusted return.

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

• Focus on capital market operations, financial structuring,

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

• Focus on cash management operations, financial structuring,

guarantees, floating capital, hedge, FX, capital markets and M&A Discipline in capital allocation and risk management (RAR¹) Leverage competitive capabilities

• Agility and flexibility to serve clients
• Sectoral expertise (infrastructure and agribusiness)
• DCM distribution
• Officers with responsibility for credit

Improve cost-to-income ratio

Wholesale: focus on growing in the Corporate segment to improve return on capital and diversify credit risk

Wide range of products

19 Foreign currency & FX Local currency & Cash Management Funding Derivatives Corporate Finance Project Finance Capital market & M&A

Key indicators

Financial highlights

Financial highlights

20

Managerial Income Statement Balance sheet

• 1. Net of revenues from recovery of written-off loans and impairments; 2. Includes profit sharing expenses; 3. Ratio between net interest income and average interest-

earning assets of the period. This ratio is annualized; 4. ER = administrative and personnel expenses / (net interest income+ fee income/ banking fees income + equity in income from subsidiaries + other operational income and expenses); Return on Average Equity (ROAE) 7.1 11.8 11.6 Return on Average Assets (ROAA) 0.6 1.1 1.1 Net Interest Margin3 (NIM) 5.4 6.6 6.1 Efficiency Ratio - LTM4 36.0 33.7 32.9 (%) 2Q17 1Q18 2Q18 Net Interest Income (A) 1,222 1,347 1,259 Result of loan losses¹ (B) (530) (326) (379) Net Financial Margin (A+B) 691 1,021 880 Operating Income/Expenses (506) (517) (412) Income from Services and Banking Fees 326 325 344 Personnel² and Administrative expenses (612) (653) (541) Tax expenses (92) (92) (109) Income from subsidiaries 66 80 83 Other Operating Income/(Expenses) (195) (176) (190) Operating Income (Loss) 185 505 468 Non-Operating Income (Loss) (1) (3) (2) Income before Taxes 185 501 466 Income Tax and Social Contribution (39) (247) (210) Net Income 145 255 256 (R$ Million) 2Q17 1Q18 2Q18

CURRENT AND LONG-TERM ASSETS 101,657 93,309 96,750 Cash and cash equivalents 135 159 92 Interbank funds applied 17,942 16,356 20,658 Securities and derivative financial instruments 27,004 18,309 15,143 Derivative financial instruments 2,722 3,414 4,817 Interbank accounts or relations 357 233 1,297 Loan Operations, Leases and Others receivables 46,476 46,749 47,441 Alow ance for loan losses (3,231) (3,540) (3,622) Tax credit 7,495 7,102 7,042 Others 2,757 4,527 3,885 NON-CURRENTS 809 1,054 1,404 TOTAL ASSETS 102,467 94,363 98,154 CURRENT AND LONG-TERM LIABILITIES 93,928 85,255 88,766 Deposits 10,255 10,128 12,636 Demand and Interbank deposits 1,821 2,180 1,984 Time deposits 8,433 7,948 10,652 Money market borrow ings 31,017 25,119 22,124 Acceptances and endorsements 24,054 23,549 26,058 Interbank accounts 56 139 72 Borrow ings and onlendings 4,459 3,533 4,111 Derivative financial instruments 2,960 3,199 4,285 Others obligations 21,127 19,588 19,480 Subordinated debts 5,560 5,766 6,352 Credit transactions subject to assignment 10,447 7,731 8,198 Others obligations 5,121 6,090 4,930 DEFERRED INCOME 31 34 40 SHAREHOLDERS’ EQUITY 8,508 9,074 9,349 TOTAL LIABILITIES 102,467 94,363 98,154 BALANCE SHEET | Liabilities (R$ Million) Jun.17 Mar.18 Jun.18 BALANCE SHEET | Assets (R$ Million) Jun.17 Mar.18 Jun.18

Credit quality indicators

Credit quality

Jun/17 Jun/18

11.1%

Dec/17 AA-C

10.5% 11.3% 88.7%

D-H

88.8%

Mar/18

89.2% 10.8% 89.5% 88.9% 11.2%

Sept/17

245 401 295 348 343 Net Loss Write-off Revenues from recovery (385) (315) (267) (327) (145) (252) (872)

2Q18

(379) (52) (326) (530) (487)

1Q18

(59) (567)

2Q17

385

4Q17 3Q17

Provisions (-) Revenues from recovery Impairments 21 7.4% 3,540 22 7.4% 3,630 8 3,688 3,674

Jun/18

11

Dec/17

7.0% 14 7.6% 3,218 3,622

Sept/17

3,257

Mar/18

26 3,231 6.8% 3,196

Jun/17

3,551 Generic¹ Specific + Additional ALL balance/Loan portfolio 312 133 167 201 304 557 534 461 549 646

3Q17 2Q17 4Q17 1Q18 2Q18

Allowance for loan losses balance (R$M) Loan portfolio rated by risk level (%) Net Loss² (R$M) Result of loan losses and impairments (R$M)

• 1. Considers credit provisions recognized as Liabilities in the "Other“ line (see Note #18d of Financial Statements); 2. Net loss = loans written-off to losses in the quarter

+ revenues from credit recovery.

1.38% 0.97% 0.92% 0.92% 1.57%

• 0.12%

1.27% 0.86% 1.15% 2.17% 1.15% 1.07% 1.75%

2Q16

0.56

4Q15 3Q17

0.54 1.22 0.62 0.64 0.69 0.59 0.93

1Q16

0.47 0.65

1Q17 4Q16

0.55 0.55

3Q16

0.41 0.43 1.02

2Q18 4Q17

0.67 0.53 0.47 0.56

1Q18

0.46 0.44

2Q17

0.82 0.90

• 0.07

0.84

2Q15

0.83

3Q15

New NPL Rate¹

New NPL (R$B) Write-off (R$B)

22

New NPL rate

Credit quality

• 1. Variation in the balance of 90-day NPL balance + loans written-off to loss in the quarter, divided by loan portfolio by the end of the immediately preceding quarter.

Managed Loan Portfolio (A) 52,505 51,576 51,250 48,799 46,925 47,031 47,620 46,931 46,828 47,608 48,679 48,185 49,170 90-day NPL Balance 2,727 2,712 2,923 2,254 2,174 2,567 2,638 2,120 2,068 1,947 1,925 1,861 1,969 90-day NPL Quarterly Variation (B) (901) (14) 211 (669) (80) 393 71 (518) (53) (120) (22) (64) 108 Write-off (C) 834 838 693 1,215 639 624 469 926 646 549 461 534 557 New NPL (D=B+C) (66) 823 903 546 560 1,017 540 408 594 429 439 470 665 New NPL Rate¹ (D/A)

• 0.12%

1.57% 1.75% 1.07% 1.15% 2.17% 1.15% 0.86% 1.27% 0.92% 0.92% 0.97% 1.38% 2Q18 NEW NPL (R$ Million) 1Q18 3Q17 4Q17 3Q16 1Q16 2Q16 2Q15 2Q17 3Q15 4Q15 1Q17 4Q16

Wholesale credit portfolio

Wholesale credit portfolio

23

10 largest debtors / Total loan portfolio Expanded credit portfolio by product - Wholesale (R$B)

7.6% Jun/18 7.3% Mar/18 7.8% Jun/17 22.4 Jun/18 8.8 3.2 8.2 25.2 Jun/17 0.5 5.1 7.4 2.3 0.4 2.6 Mar/18 0.4 5.2 4.9 4.5 5.5 21.8 8.1

Private Securities Guarantees provided Other Onlending (BNDES) Loans Financ Export/Import

Loan portfolio Sectoral concentration¹

On balance loan 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.

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

Financial Institutions 1,979 12.1% 2,280 14.2% Sugar and Ethanol 2,075 12.6% 1,601 9.9% Telecom 1,511 9.2% 1,356 8.4% Retail 957 5.8% 999 6.2% Mining 952 5.8% 952 5.9% Agribusiness 653 4.0% 920 5.7% Petrochemical 1,346 8.2% 869 5.4% Automotive/Auto parts/Car Dealers 353 2.1% 642 4.0% Railways 652 4.0% 605 3.8% Oil & Gas 408 2.5% 503 3.1% Government 499 3.0% 485 3.0% Food and beverages industry 358 2.2% 374 2.3% Slaughterhouses 254 1.5% 371 2.3% Industry 189 1.2% 343 2.1% Services 209 1.3% 330 2.0% Trading Agro 161 1.0% 325 2.0% Electricity Distribution 286 1.7% 298 1.9% Logistics 290 1.8% 288 1.8% Car Rental 320 2.0% 268 1.7% Eletricity Generation 519 3.2% 263 1.6% Other 2,435 14.8% 2,020 12.6% Total¹ 16,405 100.0% 16,092 100.0%

Wholesale Sectorial concentration Jun.17 Jun.18

24

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- brAAA

Short-term

B brA-1+

Brazil

Sovereign rating

Ba2 BB-