Earnings Presentation 1 st Quarter, 2015 Disclaimer: This - - PowerPoint PPT Presentation

Earnings Presentation

1st Quarter, 2015

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.

2

Net income of R$ 122M in 1Q15

Consistent revenue generation, drop in credit provisions and reduction of cost base

Executive summary

Net Profit of R$ 122M

Net income totaled R$ 122M in 1Q15, compared to R$ 75M in 4Q14 and R$ 152M in 1Q14 Shareholders' equity reached R$ 7.68B in Mar/15

Consistent revenue generation

Net Interest Income (NII) reached R$ 1.2B in 1Q15, stable compared to 4Q14 Net Interest Margin¹ (NIM) of 5.4% p.y. in 1Q15, down by 10 bps compared to 4Q14 due to the increase in interest-earning assets (driven by exchange rate effects and assignments with recourse)

Drop in delinquency

Consumer Finance: 90-day NPL dropped to 5.3% in Mar/15, lowest level since June/11 Wholesale: 90-day NPL at 9.0% (6.2% in Dec/14) mostly impacted by loans that already had a high allowance level. In contrast, the 15-90 day NPL ratio decreased from 4.1% to 2.4% in 1Q15

Reduction in credit provisions

Credit provision expenses² reduced 17.3% over 4Q14 and 41.5% compared to 1Q14

• Reduction in credit provision expenses occurred both in Consumer Finance and Wholesale segments
• Credit provision expenses of 1Q15 (R$ 417M) correspond to the lowest level since 1Q11

Cost base reduction

Personnel and administrative expenses decreased 3.8% over 4Q14 and 6.2% compared to 1Q14 12-month Efficiency Ratio (ER) reached 37.8% (Mar/14: 37.9%)

Highlights of Banco Votorantim’s results

• 1. Ratio between Net Interest Income (NII) and Average Interest-Earning Assets; 2. Allowance for Loan Losses (ALL), net of income from recovery of written-off loans

3

Banco Votorantim – Overview 1Q15 Results Appendix

Agenda

4 29 45 53 56 207 314 333 390 597 645 BNDES Itaú CEF Banco do Brasil

Votorantim

Banrisul Safra HSBC Santander Bradesco 99 141 155 168 598 871 883 HSBC Santander BNDES Bradesco CEF 1,065 Itaú 1,118 Banco do Brasil 1,324 BTG Pactual Safra

Votorantim

Banco Votorantim is one of the leading banks in Brazil

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

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

Banco Votorantim – Overview

Shareholder 50% Total

10 largest Banks in Dec/14¹ - Total Assets (R$B)

...and also in terms of loan portfolio

10 largest Banks in Dec/14¹ – Loan Portfolio² (R$B)

1.Mar/15 Central Bank (“Bacen”) data unavailable by the preparation of this presentation; 2. On-balance loan portfolio according to Bacen’s Resolution 2,682

10th 8th

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% Voting: 49.99% Non-voting: 50.01% Total: 50.00% Voting: 50.01% Non-voting: 49.99%

Votorantim Group Banco do Brasil Ownership Structure Corporate Governance Structure

National privately-held Foreign State-owned Público Estrangeiro Brasileiro e privado

5

Diversified business portfolio

Focus on increasing business profitability, operating efficiency and synergies with BB

Shareholders Pillars

Banco do Brasil Votorantim Group

+

R$ 68.7B Expanded² credit portfolio

Strategy

Consumer Finance 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

Other Businesses

Payroll loans: to focus on INSS (portfolio refinancing) and Private (portfolio growth) Credit cards, insurance, individual loans and CrediCasa (home equity): to leverage the existing client base Other synergies with BB: BV Promotora, mortgage, etc. R$ 35.8B R$ 29.4B R$ 6.4B

Wealth

• Mgmt. & BVEP

Asset: 10th largest in the market, with innovative products and growing synergies with BB R$ 41.3B in AuM¹ Private: focus on estate management through taylor- made solutions BVEP: investment in real estate projects

Wealth Mgmt. Corporate & IB (CIB)

To be the best wholesale bank to our target clients, focused on:

• Long-term relationships
• Capturing synergies in the
• rigination and structuring of

financial solutions

• Efficient capital management

Wholesale R$ 32.9B

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

Note: In Mar/15, the outstanding volume of loans (off-balance) securitized with recourse prior to Resolution 3,533 totaled R$ 1.1B (versus R$ 1.8B in Dec/14)

6

Highlights Corporate & Investment Bank (CIB)

Wholesale: continued focus on improving return on capital and on strengthening the product portfolio

Wholesale Business

Expanded¹ credit portfolio (R$B) Disciplined approach to capital usage

• Credit selectivity
• Focus on services and products with low capital

consumption (FX, IB, derivatives)

• Gradual reduction to the “lower middle market”

– Focus on companies with annual revenues > R$200M Increased relevance of BV to its target clients, thru

• Strengthening of the product portfolio
• Enhancement of international distribution (NY and London)

Focus on capturing synergies in the origination and structuring of Credit, Capital Markets, Derivatives and FX operations

Wholesale business

∆Mar15 /Dec14 Guarantees provided Loans

Large companies Mid-sized companies

Mar/15 32.9 28.1 4.8 Dec/14 32.7 27.0 5.7 Mar/14 32.9 25.8 7.1 +0.5% 2014 3.8 2013 1.3 Local Fixed Income Distribution Ranking²

Distributed amount (R$B)

7th 4th

• 1. Includes loans, guarantees provided (by the bank), and private securities; 2. “Ranking Anbima de Distribuição – Renda Fixa Consolidado” (Dec/14)

Note: Mid-sized companies are those with annual revenues up to R$600M

+4.0%

• 16.4%

9.9 9.9 17.5 17.5 8.9 18.5

7

Consumer Finance: increased focus on used auto finance and INSS payroll loans (retirees and pensioners)

Payroll Loans Auto Finance Consumer Finance Businesses

Managed loan portfolio (R$B) Managed loan portfolio (R$B)

Consumer Finance businesses

Among market leaders in auto financing Operates as an extension of Banco do Brasil in auto financing (outside BB´s branch network)

• Presence in ~20,000 car dealerships nationwide

Average ticket size: R$ 18,000 Continuous improvement of credit processes Focus on refinancing the INSS payroll loan portfolio (retirees and pensioners)… ...and on increasing the private payroll loan portfolio Continuous improvement of credit processes Used/ Total¹ 82% 76% INSS/ Total¹ 66% 63% ∆Mar15 /Dec14 ∆Mar15 /Dec14 32.7 29.7

3.1

On- balance Off- balance

• 1.8%

Dec/14 30.6 Mar/15

0.7

29.4 29.4

1.2

Mar/14 30.1 Dec/14 5.9 5.4 0.5

• 4.3%

Mar/14 7.0 6.0 1.1 Mar/15 0.4 On- balance Off- balance 5.6 5.3

• 1. Only on-balance portfolio
• 41.7%
• 0.1%
• 25.2%
• 2.3%

8

Highlights Wealth Management & Services

Wealth Management: Asset focused on high value-added products and Private Bank focused on estate management

Assets under management¹ (R$B) +1.7% 40.6 Mar/15 41.3 Dec/14 40.6 Mar/14 Asset Management

• Focus on high value-added structured products
• “Top Gestão 2014 – Renda Fixa³”: Fixed Income award
• Synergies with BB: R$ 5.0B AuM of partnership funds, e.g.

– BB Votorantim Highland Infraestrutura4 (FIDC) – 2013 – BB Progressivo II (FII) – 2012 – BB Renda Corporativa (FII) – 2011 – BB Votorantim Energia Sustentável (FIP) – 2011 Private Bank

• Focus on High and Ultra High clients (assets > R$ 25M)
• Integrated estate management, through differentiated and

custom-made solutions BVEP – BV Empreendimentos e Participações

• Focus on real estate, residential, commercial

and logistic projects (SP, RJ and MG)

Wealth Management Businesses

Wealth Management businesses

ANBIMA ranking² 10th 10th 10th

• 1. Includes onshore funds (ANBIMA criteria) and private clients’ assets (fixed income, equities and offshore funds); 2. Managers’ ranking; 3. Awarded by the Valor Investe

magazine, along with Standard & Poor’s, in the “largest asset managers” category; 4. Infrastructure fund launched that raised R$ 300M at the time of launch

9

Banco Votorantim – Overview 1Q15 Results Appendix

Agenda

10

Net income of R$ 122M in 1Q15

BV continues to advance in the implementation of its earnings growth agenda

Earnings growth agenda Net Income evolution (R$M)

BV completed its restructuring process in 2014 In 2015, earnings growth is expected

122 75 135 140 152 121

• 159
• 196
• 278

+62% 1Q15 4Q14 3Q14 2Q14 1Q14 4Q13 3Q13 2Q13 1Q13 R$-512M R$ 502M

Increase profitability of current and new businesses Increase operational efficiency Strengthen synergies with Banco do Brasil

Consolidated results

11 Net Interest Income (A) 1,296 1,220 1,223 0.3% ALL expenses¹ (B) (714) (505) (417)

• 17.3%

Net Financial Margin (A+B) 583 715 806 12.7% Operating Income/Expenses (504) (686) (585)

• 14.8%

Income from Services and Banking Fees 244 276 243

• 12.1%

Personnel and Administrative expenses (628) (613) (590)

• 3.8%

Tax expenses (111) (104) (132) 26.9% Equity in Income of Associated Companies and Subsidiaries 41 37 38 2.4% Other Operating Income/Expenses (51) (282) (143)

• 49.2%

Operating Income (Loss) 78 29 221

• Net Income

152 75 122 62.7% 4Q14

• Var. 1Q15

/4Q14 1Q15 1Q14 (R$ million)

Continued evolution of results’ fundamentals, with higher Net Financial Margin (post-provisions) and lower expenses

Highlights of Results

Consistent revenue generation, drop in credit provisions and reduction of cost base

Consolidated results

Managerial Income Statement

• 1. Allowance for loan losses: Includes expenses related to credit assignments with recourse (on and off-balance), as well as revenues from credit recovery previously written
• ff as uncollectible. Note: The costs associated with the production from lending operations were reclassified from NII to Other Operating Expenses.

1 2 3

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Consistent revenue generation

• 1. Ratio between Net Interest Income and Average Interest-Earning Assets; 2. Sum of reserve requirements, interbank transactions, securities and loan portfolio; 3. Result of

the stake in Votorantim Corretora de Seguros is recognized using the equity method

Net Interest Income

Net Interest Income (NII) of R$ 1.2B in 1Q15, flat compared to 4Q14 Income from Services flat QoQ, despite the decrease in auto finance origination

Net Interest Income (R$M) e NIM¹ (% p.y.) Income from Services, Fees and Insurance³ (R$M)

Average interest- earning assets³ (R$B)

1

89.8 96.4 93.2

Increased in 1Q15 due to Real depreciation and securitizations with recourse, impacting the NIM

• 3%

3.9 3.4 Auto finance

• rigination

(R$B) 3.3

• 16%

1Q14 5.5% 1,296 5.5% 5.4% 1,223 1,220 1Q15 4Q14 NIM 244 276 243 47 55 52 1Q15 295 4Q14 332 1Q14 292 Insurance (comission) Services and Fees ∆1Q15/ 1Q14 1% 10%

• 1%

∆1Q15/ 4Q14

• 11%
• 6%
• 12%

13

Maintenance of the conservative approach to credit

Expanded credit portfolio of R$ 68.7B in Mar/15, flat compared to Dec/14

Credit portfolio by segment

• 1. Credit cards and individual loans

Note: Mid-sized companies are those with annual revenues up to R$600M

1

+4.0%

• 0.1%

∆Mar15 /Dec14

• 2.3%
• 16.4%

Expanded credit portfolio (R$B)

(includes guarantees provided and private securities)

Gradual reduction in the “lower middle”

Focus on profitability (vs. asset growth)

29.4 5.4 Sept/14 68.2 26.2 6.0 29.3 5.5 June/14 68.8 25.7 6.6 29.6 5.8 Mar/14 25.6 7.3 29.7 6.0 69.6 Dec/14 5.3 68.7 27.0 5.7 28.1 Auto Finance Mar/15 Mid-sized companies Large companies 68.7 0.0% 29.4 4.8

• 1.2%

Payroll Wholesale (CIB) Others¹

14

Auto Finance: loan origination with quality over the past 42 months, focusing on used cars (multi-brand dealers)

Consumer Finance – Auto Finance

2 Auto Finance – Origination by channel (R$B) and first payment default by vintage – Inad 30¹ (%)

Growing participation of the better quality vintages has contributed to reduce credit provision expenses

• 1. First payment default, or % of each month’s production with first installment past due over 30 days; 2. Includes securitization with substantial risk retention before Res. 3,533

2.0

Mar/10 Sept/09 Mar/15 Sept/14

1.2

Mar/14 Sept/13

0.9

Mar/13 Sept/12

0.7

Mar/12 Sept/11 Mar/11 Sept/10

Lower quality vintages Inad 30¹ (by vintage) Used car dealers New car dealers

Lower quality vintages / Managed auto finance portfolio²

8% 11% 27% 48% Mar/15 Dec/14 Dec/13 Dec/12

42 months

June09- June10 average

15

Consumer Finance – auto finance

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

1. New cars, trucks and motorcycles; 2. Benchmark interest rate (Central Bank). Note: In Mar/15, the average ticket size was R$ 18,000, and the average vehicle age was 4.7 years (portfolio)

Auto finance: greater focus on used cars and maintenance

• f tight credit origination standards

2 Greater focus on used cars Conservatism in lending Process automation and efficiency gains

• 3%

Used cars Other vehicles¹ 1Q15 3.3 2.7 (82%) 0.6 4Q14 3.9 3.2 (80%) 0.8 1Q14 3.4 2.7 (80%) 0.7

Origination of auto loans (R$B)

Mar/15 12.75 27.5 Dec/14 11.75 26.7 Dec/10 10.75 24.6 Down payment Average term

Down payment (%) and Average term (months) Auto finance interest rate x Selic² rate (% p.y.)

26% 40% 40% 44 44 52 4Q14 1Q15 4Q10 BV Financeira Selic

Proposals with automatic credit decision (%) Headcount in credit underwriting (Dec/11: base 100)

Mar/15 76% Dec/11 28% 42 Mar/15 Dec/11 100

16

Credit provision expenses reduced 17% in 1Q15 / 4Q14

Reduction of allowance for loans losses expenses both in Consumer Finance and Wholesale

• 1. Allowance for Loan Losses (ALL), net of income from recovery of written-off loans; 2. Coverage Ratio: ratio between ALL balance and balance of operations past

due over 90 days; 3. Beginning of Banco Votorantim’s adjustment process, which was concluded in 2014

Credit provision expenses reduced 17.3% in 1Q15 / 4Q14 90-day CR² reached 115% due to delinquency

• f loans that already had a high level of ALL

Credit indicators – ALL and 90-day Coverage

78% in Sept/11³

2

Credit provision expenses – ALL¹ (R$M) Managed loan portfolio’s 90-day Coverage Ratio² (%) 557 293 271 156 212 147

• 17.3%
• 41.5%

1Q15 417 4Q14 505 1Q14 714 Wholesale Consumer Finance ∆1Q15 /4Q14

• 7.6%
• 30.8%

∆1Q15 /1Q14

• 51.4%
• 6.1%

130% 124% Mar/15 3,628 4,174 115% Dec/14 3,154 4,092 Mar/14 3,563 4,421

90-day NPL balance (R$M) ALL balance (R$M)

90-day Coverage ratio

17

Credit provision expenses at the lowest level since 1Q11

Ratio “Credit Provision Expenses / Credit Portfolio" reduced to 0.75% in 1Q15

Credit indicators– ALL

Note: “Managed loan portfolio” Includes on-balance loans and off-balance loans securitized with recourse

2

417 505 451 523 714 761 959 889 951 950 860 403 2Q13 1.5% 1Q13 1.3% 4Q12 1.4% 3Q12 1,286 1.8% 2Q12 1,398 1.9% 1Q12 1,456 1.9% 4Q11 1.2% 1Q15 4Q13 4Q14 1,266 0.9% 3Q14 2.1% 0.8% 3Q13 2Q14 0.9% 1Q14 1.2% 0.75% 1.1% 1Q11 0.6% 1,294 1.6% 1.2% 3Q11 2Q11 Credit provision expenses / Loan portfolio (%) Credit provision expenses (R$M)

Credit provision expenses / Managed loan portfolio (%)

Specific Wholesale case

3,564M 5,092M 3,875M 1,688M

18

Consumer Finance 90-day NPL down to 5.3%in Mar/15

Excluding a specific case with 90% provisioning, the Bank’s 90-day NPL ended Mar/15 at 5.5%

• 1. Specific Wholesale case that, by the end of Mar/15, was classified in the “G” risk level according to Resolution 2,682, with 90% of provisioning (or R$ 541M)

Note: the Wholesale 15-90-day NPL reduced from 4.1% in Dec/14 to 2.4% in Mar/15

Credit indicators – Delinquency

2

Increase in the Wholesale 90-day NPL is largely explained by cases that already had high level of provisioning

1 2 3 4 5 6 7 8 9 10 % 1.9% 5.1% 6.5% Sept/13 June/13 2.4% 5.7% 7.1% Mar/13 Mar/15 9.0% 6.5% 5.3% Dec/14 6.2% 5.7% 5.5% Sept/14 June/14 6.2% 6.4% 6.5% Mar/14 Dec/13

90-day NPL / Managed loan portfolio (%)

Total Wholesale Consumer Finance 5.2% 2.8% 2.1% Mar/14 June/14 4.8% Sept/14 1.6% 4.7% 2.9% 5.4% Dec/14 5.5% 5.9% Mar/15

Excluding specific Wholesale case¹ Lowest NPL since June/11

19

Balance Provision Part.% Balance Provision Part.% Balance Provision Part.% AA 4,283

• 7.3%

4,678

• 8.5%

3,520

• 6.4%

A 30,797 154 52.8% 27,779 139 50.3% 27,355 137 49.4% B 9,162 92 15.7% 9,777 98 17.7% 10,278 103 18.5% C 7,317 220 12.6% 7,264 218 13.2% 8,463 254 15.3% D 1,637 164 2.8% 1,215 122 2.2% 1,183 118 2.1% E 757 227 1.3% 741 222 1.3% 814 244 1.5% F 846 425 1.5% 402 201 0.7% 386 193 0.7% G 1,339 998 2.3% 1,346 1,062 2.4% 1,392 1,094 2.5% H 2,142 2,142 3.7% 2,030 2,030 3.7% 2,030 2,030 3.7% TOTAL 58,281 4,421 100.0% 55,231 4,092 100.0% 55,422 4,174 100.0% AA-C 51,559 465 88.5% 49,498 455 89.6% 49,617 493 89.5% D-H 6,722 3,956 11.5% 5,734 3,637 10.4% 5,805 3,680 10.5% RISK (R$ Million) Mar.14 Dec.14 Mar.15

Loan portfolio quality improved in the last 12 months

89.5% of loans rated between “AA-C” in Mar/15 (88.5% in Mar/14)

• 1. Specific Wholesale case that, by the end of Mar/15, was classified in the “G” risk level according to Resolution 2,682, with 90% of provisioning (or R$ 541M)

Note: From 1Q15, Banco Votorantim ceased to rate Consumer Finance loans at risk level “AA”

Managed loan portfolio rated by risk level – Resolution 2,682/CMN

Excluding a specific Wholesale case¹ rated as "G", the percentage of "AA-C" would be 90.5% in Mar/15

2

Credit indicators – Loan portfolio quality

20

Cost base reduction

Personnel and administrative expenses decreased 3.8% over 4Q14 and 6.2% compared to 1Q14

Personnel and administrative expenses

• 1. They include indemnities and provisions for labor contingencies, mainly linked to the restructuring process ended in 2014

Note: The IPCA price index reached 8,1% in the last 12 months

3 Expenses recorded a new nominal reduction, despite inflation Personnel expenses are still affected by labor claims

• 3.8%
• 6.2%

1Q15 590 274 316 4Q14 613 291 321 1Q14 628 284 345 Personnel and Admin expenses (R$M) Personnel expenses (R$M) Personnel Admin 1Q15 316 221 94 (30%) 4Q14 321 233 89 (28%) 1Q14 345 222 123 (36%)

• 1.8%
• 8.5%

∆1Q15 /4Q14

• 6.0%
• 1.8%

Labor claims¹ Personnel – Other

∆1Q15 /4Q14

• 5.0%

6.6% 37.9 Efficiency ratio – 12 months (%) 37.8

21

Summary: Net Income of R$ 122M in 1Q15

Consistent revenue generation, drop in ALL expenses and reduction in cost base

Net Interest Income (NII) Credit provision expenses – ALL Personnel and Administrative expenses Net income and Net Financial Margin

R$ million

Consolidated results

557 293 271 156 212 147

• 17.3%

Consumer Finance Wholesale 1Q15 417 4Q14 505 1Q14 714

• 31%
• 8%

∆1Q15 /4Q14

122 75 152 806 715 583 1Q15 4Q14 1Q14 Net Margin (post-provisions) Net Income 284 291 274 345 321 316

• 3.8%

Admin Personnel 1Q15 590 4Q14 613 1Q14 628 +0.3% 1Q15 1,223 4Q14 1,220 1Q14 1,296

22

Funding profile improved over the past 12 months

Bills and Credit Assignments represent 44% of total funding (40% in Mar/14)

Funding

Funding evolution (R$ billions) Funding evolution (mix %)

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

• 1. Includes cash and interbank deposits and Structured finance certificates (“COEs”); 2. Funding from loans assigned with recourse under Resolution 3,533

Note: International funding is 100% swapped for BRL

+4.1% Mar/15 75.2 17.2 15.9 15.4 7.1 3.2 1.8 Dec/14 72.3 16.3 15.2 17.4 6.2 2.4 1.4 Mar/14 74.7 15.9 13.9 16.7 7.5 4.3 4.3 6.0 6.1 6.6 6.7 7.2 7.5 19% 21% 22% 21% 8% 10% 8% 10% 10% 9%

Bills (LF, LCA and LCI) Loans securitized to Banco do Brasil² Debentures (BV Leasing) Sub debt Time deposits (CD)

Mar/15 75.2 23% 4% 2% Mar/14 74.7 21% 6% 6%

Securities abroad Loans and onlendings Other¹

100%

23

Total Capital 10,770 11,276 10,523 Tier I Capital 7,029 7,159 6,873 Common Equity Tier I 7,029 7,159 6,873 Additional Tier I

• Tier II Capital

3,741 4,117 3,651 Risk Weighted Assets (RWA) 74,299 75,375 76,289 Credit risk 68,624 67,932 68,988 Market risk 1,513 3,255 2,894 Operational risk 4,162 4,188 4,407 Minimum Capital Requirement 8,173 8,291 8,392 Basel Ratio (Capital/RWA) 14.5% 15.0% 13.8% Tier I Capital Ratio 9.5% 9.5% 9.0% Common Equity Tier I Ratio 9.5% 9.5% 9.0% Additional Tier I Ratio

• Tier II Capital Ratio

5.0% 5.5% 4.8% Dec.14 Mar.15 Mar.14 BASEL RATIO (R$ Million)

Basel Ratio of 13.8% in Mar/15 (15.0% in Dec/14)

Tier I Capital of 9.0%, entirely composed of Common Equity

Capital structure

Restrainer of sub debts issued prior to Resolution 4,192 (80% to 70%) BIS III deductions (from 20% to 40%)

24

Banco Votorantim – Overview 1Q15 Results Appendix

Agenda

25

Balance sheet

Balance sheet

Mar.15/Dec.14 Mar.15/Mar.14 CURRENT AND LONG-TERM ASSETS 104,272 98,227 105,142 7.0 0.8 Cash and cash equivalents 90 190 124 (35.0) 36.8 Interbank funds applied 12,015 7,374 14,743 99.9 22.7 Securities and derivative financial instruments 27,846 29,133 27,236 (6.5) (2.2) Derivative financial instruments 1,105 1,505 2,227 48.0 101.5 Interbank accounts or relations 171 77 67 (13.3) (61.0) Loan Operations, Leases and Others receivables 53,245 52,783 53,619 1.6 0.7 Alowance for loan losses (4,214) (3,999) (4,117) 2.9 (2.3) Tax credit 6,559 6,657 6,825 2.5 4.1 Others 7,454 4,508 4,419 (2.0) (40.7) NON-CURRENTS 346 455 369 (18.9) 6.7 Investments 187 300 195 (35.1) 3.8 Fixed assets 93 94 101 8.0 9.1 Intangible and deferred charges 66 62 73 18.8 11.4 TOTAL ASSETS 104,617 98,682 105,511 6.9 0.9 Mar.15/Dec.14 Mar.15/Mar.14 CURRENT AND LONG-TERM LIABILITIES 97,247 91,096 97,803 7.4 0.6 Deposits 6,917 3,811 4,928 29.3 (28.8) Demand deposits 176 149 86 (42.5) (51.3) Interbank deposits 2,472 1,230 1,636 33.0 (33.8) Time deposits 4,268 2,432 3,206 31.9 (24.9) Money market borrowings 29,350 27,986 29,227 4.4 (0.4) Acceptances and endorsements 23,457 22,914 24,409 6.5 4.1 Interbank accounts 41 36 177

• Borrowings and onlendings

6,126 6,662 7,500 12.6 22.4 Derivative financial instruments 1,390 1,674 2,746 64.0 97.5 Others obligations 29,966 28,013 28,816 2.9 (3.8) Subordinated debts 7,512 6,240 7,079 13.5 (5.8) Credit transactions subject to assignment 13,856 15,250 15,873 4.1 14.6 Others obligations 8,597 6,524 5,863 (10.1) (31.8) DEFERRED INCOME 32 32 29 (9.2) (6.6) SHAREHOLDERS’ EQUITY 7,339 7,554 7,679 1.7 4.6 TOTAL LIABILITIES 104,617 98,682 105,511 6.9 0.9

BALANCE SHEET | Assets (R$ Million)

Mar.14 Dec.14 Mar.15 Variation %

BALANCE SHEET | Liabilities (R$ Million)

Mar.14 Dec.14 Mar.15 Variation %

26

Total Assets Assets under Management¹ On-balance loan portfolio

Financial highlights

Financial highlights

R$ billion

Shareholders’ Equity

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

+6.9% Mar/15 105.5 Dec/14 98.7 Sept/14 98.0 June/14 96.3 Mar/14 104.6 +1.6%

Consumer Finance CIB

Mar/15 54.3 35.8 18.5 Dec/14 53.5 36.0 17.5 Sept/14 53.3 36.0 17.3 June/14 53.6 36.4 17.2 Mar/14 54.2 36.7 17.5 +1.7% Mar/15 41.3 Dec/14 40.6 Sept/14 41.7 June/14 40.6 Mar/14 40.6 +1.7% Mar/15 7.68 Dec/14 7.55 Sept/14 7.68 June/14 7.59 Mar/14 7.34

27

Net Interest Income (A) 1,296 1,220 1,223 0.3%

• 5.7%

ALL Expenses (714) (505) (417)

• 17.3%
• 41.5%

Net Financial Margin 583 715 806 12.7% 38.3% Average Interest-Earning Assets (B) 96,317 89,774 93,183 3.8%

• 3.3%

Compulsory Reserves (Bacen) 94 52 48

• 7.3%
• 48.6%

Interbanks Funds Applied 11,860 9,295 11,059 19.0%

• 6.8%

Securities 29,568 27,046 28,184 4.2%

• 4.7%

Loan Portfolio 54,794 53,381 53,892 1.0%

• 1.6%

NIM (A/B) - quarter 5.5% 5.5% 5.4%

• 0.1 p.p.
• 0.1 p.p.
• Var. 1Q15

/4Q14

• Var. 1Q15

/1Q14

NET INTEREST MARGIN (NIM)

(R$ million) 1Q14 1Q15 4Q14

Net Interest Margin (NIM)

Financial highlights

28

Credit quality indicators

ALL Balance (R$M) 90-day Coverage ratio¹ (%) 90-day NPL / Managed loan portfolio (%) 15-90-day NPL / Managed loan portfolio (%)

• 1. Ratio between ALL balance and balance of operations past due over 90 days

Credit portfolio

5.3% 5.5% 6.1% 6.5% 6.6% 6.5% 9.0% 6.2% 5.4% 6.2% 5.0% Mar/15 Dec/14 5.7% Sept/14 5.9% June/14 6.4% Mar/14 6.1% Wholesale Total Consumer Finance 8.2% 7.3% 7.9% 9.4% 9.7% 5.4% 5.0% 5.5% 7.7% 2.4% 4.1% 2.6% 1.5% 2.9% Mar/15 Dec/14 Sept/14 June/14 6.6% Mar/14 Wholesale Total Consumer Finance 4,421 4,308 4,114 4,092 4,174 7.5% 7.4% 7.4% 7.6% 7.6% Mar/15 Dec/14 Sept/14 June/14 Mar/14 ALL balance / Managed loan portfolio ALL balance (R$M) 3,563 3,662 3,273 3,154 3,628 115% 130% 126% 118% 124% Mar/15 Dec/14 Sept/14 June/14 Mar/14 90-day NPL balance 90-day coverage ratio

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1.90% 0.98% 0.67% 1.64% 2.24% 0.94% 1.04% 1.36% 1.00% 0.95% 1.36% 1.60% 1.88% 1Q13 1.15 0.68 4Q12 1.43 0.68 3Q12 1.27 1.01 2Q12 1.08 1.23 1Q12 0.69 1.49 1Q15 0.58 1.05 4Q14 0.67 0.55 3Q14 0.77 0.38 2Q14 0.86 0.96 1Q14 0.87 1.36 4Q13 0.87 0.58 3Q13 0.90 0.66 2Q13 1.34 0.90

New NPL rate

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

Impact of specific Wholesale case

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

Credit portfolio

New NPL rate

Managed Loan Portfolio (A) 76,775 74,185 71,481 68,169 65,923 63,546 61,281 60,539 58,281 56,806 55,712 55,231 55,422 90-day NPL Balance 5,390 5,539 5,276 4,520 4,056 3,616 3,373 3,081 3,563 3,662 3,273 3,154 3,628 90-day NPL Quarterly Variation (B) 793 149 (262) (756) (465) (439) (244) (292) 482 99 (388) (119) 474 Write-off (C) 693 1,079 1,269 1,439 1,144 1,339 902 869 874 857 771 666 578 New NPL (D=B+C) 1,486 1,228 1,007 683 680 900 659 578 1,356 955 383 547 1,052 New NPL Rate¹ (D/A) 1.88% 1.60% 1.36% 0.95% 1.00% 1.36% 1.04% 0.94% 2.24% 1.64% 0.67% 0.98% 1.90% 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 NEW NPL (R$ Million) 1Q12 2Q12 3Q12 4Q12

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Net loss kept downward trend

Annualized “net loss / loan portfolio” ratio of 3.0% in 1Q15

412 508 623 633 755 Net loss / Loan portfolio (%) 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% Net loss (R$M) 1,600 1,200 800 400 1Q15 3.0% 4Q14 3.7% 3Q14 4.5% 2Q14 4.5% 1Q14 5.3% 119 Credit recovery (R$M) 223 148 157 166 Credit portfolio

31

Wholesale has a diversified credit portfolio

Top 20 sectors account from 82% of the Wholesale credit exposure

Credit portfolio

Note: numbers exclude private securities and are net of credit provisions

R$M Part.(%) R$M Part.(%) R$M Part.(%) Financial Institutions 4,609 17.6% 4,201 16.0% 4,297 16.5% Sugar and Ethanol 2,439 9.3% 2,160 8.2% 2,522 9.7% Telecom 1,575 6.0% 2,066 7.9% 1,687 6.5% Agribusiness 1,343 5.1% 1,323 5.1% 1,375 5.3% Petrochemical 1,071 4.1% 1,078 4.1% 1,310 5.0% Retail 1,036 4.0% 1,898 7.2% 1,234 4.7% Agro Trading 934 3.6% 984 3.8% 800 3.1% Eletricity Generation 878 3.4% 828 3.2% 777 3.0% Oil & Gas

• 0.0%

525 2.0% 772 3.0% Heavy Construction 918 3.5% 640 2.4% 749 2.9% Metallurgy 865 3.3% 748 2.9% 735 2.8% Services 647 2.5% 665 2.5% 713 2.7% Railw ays 619 2.4% 731 2.8% 705 2.7% Pulp and Paper 632 2.4% 700 2.7% 662 2.5% Road Cargo Transportation 708 2.7% 663 2.5% 649 2.5% Government 448 1.7% 524 2.0% 600 2.3% Automotive 349 1.3% 503 1.9% 533 2.0% Mining 638 2.4% 590 2.3% 480 1.8% Slaughterhouses 519 2.0% 446 1.7% 460 1.8% Residential Construction 0.0% 364 1.4% 381 1.5% Other sectors 5,925 22.7% 4,548 17.4% 4,669 17.9% Total 26,151 100.0% 26,185 100.0% 26,110 100.0% Wholesale - Sectoral concentration Mar/14 Mar/15 Dec/14

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Banco Votorantim’s main ratings

Ratings RATING AGENCIES International National Long-Term Short-Term Long-Term Short-Term Long-Term Short-Term Fitch Ratings Local Currency Foreign Currency National BBB- F3 BBB- F3 AA+(bra) F1+(bra) Moody’s Local Currency Deposits Foreign Currency Deposits National Baa3 P-3 Baa3 P-3 Aa1.Br BR-1 Standard & Poor's Local Currency Foreign Currency National BB+ B BB+ B brAA+ braA-1

Banco Votorantim is rated Investment Grade by Fitch & Moody’s