Earnings Presentation 1 st Quarter | 2018 Disclaimer: This - - PowerPoint PPT Presentation

1st Quarter | 2018

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.

Earnings Presentation

Net income of R$ 255M in 1Q18, and ROE of 11.8%

Consistent revenues generation, drop of loan losses and cost base reduction

2

Growing net income

Net income of R$ 255M in 1Q18, compared to R$ 156M in 4Q17 and R$ 127M in 1Q17 Return on Equity (ROE) increased to 11.8% (4Q17: 7.3%; 1Q17: 6.2%)

Consistent revenues generation

NII increased 11.8% in 1Q18/1Q17, to R$ 1.35B, reflecting the higher profitability in the businesses

• Net Interest Margin (NIM) increased to 6.6% in 1Q18, compared to 5.3% in 1Q17

Revenues from Services and Insurance grew 18.4% in 1Q18/1Q17, due to higher auto finance origination

Drop in credit costs

Result¹ of loan losses decreased 22.4% in 1Q18/1Q17

• 90-day Coverage Ratio of 191% in Mar/18 (Dec/17: 192%; Mar/17: 153%)

Net Margin (post- provisions¹) grew 30.1% against 1Q17, to R$ 1.02B

Drop in delinquency

90-day NPL of 3.9%, down 10 bps against Dec/17 and 60 bps in 12 months

• Wholesale: 90-day NPL dropped to 1.5% (Dec/17: 1.8%; Mar/17: 2.6%)
• Consumer Finance: 90-day NPL of 4.6% (Dec/17:4.7%). Auto Finance’s NPL dropped to 4.1% (Dec/17:4.2%)

Effective cost management

Personnel² and administrative expenses decreased 0.6% over 4Q17 The ongoing efforts of cost base management contributed to the improvement of the Efficiency Ratio for the last 12 months, which decreased to 33.7% in Mar/18 (Mar/17: 36.7%)

Highlights of results

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

Executive summary

255 156 153 145 127 1Q18 4Q17 +99.8% 3Q17 2Q17 1Q17 +62.8%

Net Income (R$M) Quarterly profit of Banco Votorantim reaches a new level

Net income of R$ 255M in 1Q18, and ROE of 11.8%

3

6.2% 7.1% 7.3% ROE (% p.y.) 7.3% 11.8% 0.5% 0.6% 0.6% ROA (% p.y.) 0.6% 1.1%

Consolidated result

Net Interest Income (A) 1,205 1,332 1,347 1.2% 11.8% Result of loan losses¹ (B) (420) (487) (326)

• 33.1%
• 22.4%

Net Financial Margin (A+B) 785 845 1,021 20.9% 30.1% Operating Income/Expenses (506) (546) (517)

• 5.4%

2.2% Income from Services and Banking Fees 290 376 325

• 13.6%

12.1% Personnel² and Administrative expenses (540) (657) (653)

• 0.6%

20.9% Tax expenses (88) (112) (92)

• 17.5%

4.6% Income from subsidiaries 58 81 80

• 1.1%

37.1% Other Operating Income/(Expenses) (226) (234) (176)

• 24.7%
• 22.0%

Operating Income (Loss) 279 298 505 69.2% 80.7% Non-Operating Income (Loss) (16) (4) (3)

• 25.7%
• 80.3%

Income before Taxes 263 294 501 70.6% 90.7% Income Tax and Social Contribution (135) (138) (247) 79.3% 82.2% Net Income 127 156 255 62.8% 99.8% Var. 1Q18/1Q17 (R$ Million) 1Q17 4Q17 1Q18 Var. 1Q18/4Q17

• 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

1Q18/4Q17: Consistent revenues generation and reduction of loan losses

4

Consolidated result

Revenues

NIM reached 6.6% in 1Q18, driven by the growth of Net Interest Income Income from Services grew 1Q18/1Q17, reflecting the higher auto finance origination

5

+1.2% 1Q18 +11.8% 1,347 4Q17 1Q17 1,332 1,205 290 376 325 79 129 112 369 1Q17 +18.4% 1Q18 437 4Q17 505

• 13.5%

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

• 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.

5.3% NIM¹ (%p.y.) 6.3% 6.6% 3.6

Auto finance

• rigination (R$B)

4.5 3.9

Growing and diversified revenue base

Revenues from Services and Insurance grew over 1Q17, due to higher auto finance origination

Services and Fees Insurance (Commission)²

Seasonal effect in 1Q18

59.0

3.8 1.7

Sept/17

23.0 30.5 1.9 3.6

59.7

24.7 29.4 1.7

Mar/18

1.9

Dec/17 Loans¹

31.2

Wholesale

21.8 (37%)

58.3 Auto Finance

3.4

• 1.2%

28.5

62.1

28.1 (45%) 4.1 25.2 28.2 3.9

Mar/17

1.7

Jun/17 59.4

Expanded credit portfolio (R$B)

(includes guarantees provided and private securities)

• 5.4%

+2.1% ∆Mar18 /Dec17

• 4.4%

+1.3%

• 22.4%

+10.3% ∆Mar18 /Mar17

• 16.3%

+15.2%

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$ 58.3B in Mar/18, decrease of 1.2% in 1Q18, mainly in Wholesale

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

3.9 4Q17 3.5 (90%) 4.5 0.4 +8.9% 1Q18 3.1 (87%) 0.5 4.0 (90%) 0.4 3.6 1Q17

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 Mar/18, the average ticket size was R$ 22,000, and the average vehicle age was 5.0 years (portfolio).

Consumer Finance – Auto Finance

Focus on used cars, which represented 90% of 1Q18 origination Maintenance of conservative lending standards

+12.6%

• 15.9%

∆1Q18 /1Q17

41% 42% 42% 44 43 44 1Q17 4Q17 1Q18

Down payment, average term and interest rate

Other Vehicles¹ Used cars 22.7 25.3 22.6

7 D Cars Market:

• New: +21%
• Used: +6%

Down payment (%) Average term (months) Interest rate (% p.y.)²

Banco Votorantim is one of the market leaders in auto financing

90-day Coverage Ratio remains in a conservative level

90-day Coverage Ratio² (CR)

• 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.

191% 192% 165% 158% 153% 3,245

Mar/17

2,120 3,257 2,065

Mar/18

1,861

Dec/17

1,924

Sept/17

3,218

Jun/17

3,551 3,688 1,947

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

90-day Coverage Ratio Result of loan losses¹ and impairments - (R$M)

Result¹ of loan losses and impairments declined over the 1Q17, mainly in Wholesale

313 297 284 285 299 107 233 283 202

• 22.4%

326 1Q18

• 33.1%

2Q17 530

26

4Q17 487 567 3Q17 1Q17 420

Wholesale Consumer Finance ∆1Q18 /4Q17 +5.0%

• 85.9%

8

Result of loan losses and impairments dropped 33% in 1Q18

90-day Coverage Ratio reached 191% in Mar/18

Credit indicators – Loan losses and 90-day Coverage

Banco Votorantim

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

Wholesale

4.1% 6.5% 4.6% 3.9% 4.0% 4.5% 5.5% 5.3% 9.0% Jun/15 Mar/15 Dec/17 2.6% 1.8% Dec/15 Mar/17 Dec/16 Sept/17 Jun/17 Sept/16 Mar/18 5.3% Mar/16 2.4% Jun/16 2.1% Sept/15 1.5% 5.0%

Consumer Finance

4.1% 4.6% 4.2% 4.7% 4.3% 4.8% 4.8% 5.5% 5.3% 5.2% 5.2% 5.4% 5.6% 5.3% 5.3% 5.3%

• 70bps

9

90-day NPL declined to 3.9% in Mar/18 (4.5% in Mar/17)

Auto Finance: delinquency decreased 70bps in the last 12 months, to 4.1%

Credit indicators – Delinquency

Consumer Finance Auto Finance

256 275 293 319 277 237 289 259 243 272 47 47 42 95 105

653 657 4Q17 1Q18

Labor claims

540 612 2Q17 594 3Q17 1Q17

Personnel – Other¹

• 0.6%

Administrative

Personnel¹ and administrative expenses (R$M)

• 1. Includes profit sharing expenses; 2. Excludes expenses with labor lawsuits and profit sharing expenses.
• 13.3%

+11.9% ∆1Q18 /4Q17

Personnel

36.7 Efficiency ratio – last 12 months² (%) +10.3%

10

33.7

The cost base management contributed to the improvement

• f the Efficiency Ratio for the last 12 months

Personnel and administrative expenses

Net Income and Net Margin (post provisions) Personnel and Administrative expenses

255 156 153 145 127 845 756 691 785 4Q17 1Q17 1,021 3Q17 2Q17 1Q18

R$ Million

434 505 437

419 369

4Q17 1,332 1,323

• 2.9%

3Q17 1Q18 1,640 1,222 1,347 1,784 1,837 1,757 +13.3% 1,574 2Q17 1Q17 1,205 256 275 293 319 277 284 337 301 338 377 612 657 653 2Q17

• 0.6%

Personnel² 1Q17 +20.9% 540 1Q18 594 4Q17 3Q17 Admin. 313 297 284 285 299

233 283 202

3Q17 326 1Q17 420

• 33.1%
• 22.4%

Wholesale 487 Consumer Finance 567

26

2Q17 530 4Q17 1Q18

107

Net Income Net Margin

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

11

Summary: Net income of R$ 255M in 1Q18

Consistent generation of revenues, reduction of loan losses and control of the cost base

Consolidated result

NII and Income from Services¹ and Insurance Result³ of loan losses and impairments

Net Interest Income

Services¹ and Insurance

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

20.6 (34%) 2.8 Mar/17 Dec/17 9.3

61.2

6.4 2.6 7.7 5.8 Mar/18

58.4

3.5 7.7 (13%)

Bills (LCA and LCI)

2.6 9.4 (15%) 20.5 (35%)

64.1

6.0 11.4 (18%) 11.8 19.4 (30%) 4.3 2.6 3.3 5.2

Debentures (repos) Bills (LF) Time deposits (CDs) Sub Debt Loans and onlendings Loans securitized to Banco do Brasil

5.8 4.1 2.9 7.9

• 1. Includes cash and interbank deposits, and securities abroad, whose balance was R$ 0.4B in Mar/18; 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 to the Central Bank in Mar/18 was 196%, and the regulatory minimum of 90%.

Funding evolution (R$B)

11.5 11.2 294% 316% Other¹

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Funding volume amounted to R$ 58.4B in Mar/18

Credit assignments and Bills represented almost half of total funding

Funding and liquidity

High Quality Liquidity Assets (HQLA) (R$B) Liquidity Coverage Ratio (LCR) – Pro Forma²

• 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.

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16.6 Dec/17 15.5 11.4 4.2 Mar/18 Mar/17 13.2 3.4 13.1 10.1

3.0

CET1: 11.3%

Tier I Tier II 9.5

Dec/17 Mar/17

9.2

Mar/18

8.0 8.9 8.4 9.1

Total Capital Shareholders’ equity²

1.4 Market 57.1 50.1 5.6 1.4 Credit Dec/17 59.4 Mar/18 52.1 Operational 60.9 54.4 1.9 Mar/17 5.4 5.2 0.1 13.1 0.4

Tier 1 simulated with BIS III Weighted assets rules anticipation

13.4

Tier 1 Mar/18 Consumption

• f tax credit

until 2019

Capital structure

Basel Ratio of 16.6% in Mar/18

Tier I Capital ratio of 13.1%, with 11.3% of CET1

Total Capital and Shareholders’ Equity (R$B) Basel Ratio (%) Risk-weighted assets – RWA (R$B) Simulation: CET1 under full Basel III (%)

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 Dec/17 - Total Assets (R$B)

...and also in terms of loan portfolio

89 94 143 153 675 861 1,384 1,368 Itaú Santander CEF Banco do Brasil Bradesco 1,055 BTG Pactual Cielo S.A. Votorantim BNDES Safra 1,261

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

National privately-held State-owned Foreign 18 31 48 60 272 306 407 534 621 694 Votorantim Safra Bradesco PAN Itaú BNDES Santander Banco do Brasil CEF Banrisul State-owned Foreign National privately-held

8th 9th

Banco Votorantim is one of the leading banks in Brazil

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

1.On-balance loan portfolio according to Bacen’s Resolution 2,682; 2. Equal representation of each shareholder.

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

Board of Directors Executive board Fiscal Council Audit Committee Compensation & HR Committee Advisory Committee

Corporate Governance Structure

Risk and Capital Committee 15 Statutory²

Shareholders

Pillars

Banco do Brasil Votorantim S.A.

+

R$ 58.3B 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$ 31.2B

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$ 36.5B

Corporate Bank

Corporate: growth

• Increase spread and cross-

sell (DCM, M&A, FX and cash management)

• Diversify portfolio credit risk

Large Corp.: profitability

• Focus on unfunded products

Agility and flexibility to serve Capital discipline (RAR²) Improve cost-income ratio

Wealth Management

Asset: 9th largest in the market, with innovative products and growing relevance with BB R$ 54.1B in AuM Private: focus on asset management through tailor- made solutions

Wholesale

R$ 21.8B

Diversified business portfolio

Focus on increasing profitability, operating efficiency and diversifying revenues

16

Loans and financing Auto finance

New Used Mar/18 31.2 27.5 (90%) 2.9 3.0 28.2 3.3 Mar/17 24.9 (88%) 28.3 (91%) Dec/17 30.5 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 e Neon Pagamentos)

2,6 Payroll loans Mar/18 Personal Loans¹ + Other²

0,8 0,8

2,8 Mar/17 4,1 3,4 Dec/17 3,4 3,6

0,7

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

Consumer Finance businesses

17 INSS Private Public

• 1. With and without warranty; 2. Includes home equity, student credit and solar energy; 3. Partnership does not include operations with credit risk

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

• Capillarity: presence in ~18,000 car dealerships nationwide
• Agility: 90% of proposals with automatic credit decision
• Expertise: continuous improvement of management tools

(pricing, credit, collection etc.)

• Long-term relationship: first access to customer record

Consumer Finance Businesses

Insurance brokerage Credit Cards

Active cards (million) and Loan Portfolio (R$B) Insurance premiums (R$M) Loan Portfolio 1.66 Dec/17 Mar/18 1.91 Mar/17 1.89 36 234 140 58 50 164 4Q17 35 249 166 1Q17 Credit Insurance Auto 1Q18 Other 32 22 112

Consumer Finance Businesses

Active Cards

Consumer Finance businesses

0.9 0.9 0.9

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

18

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 incidents, etc.

Highlights and strategy Corporate Bank Wholesale Business

Wholesale business

• 1. Risk-adjusted return.

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

• Focus on unfunded products (guarantees)

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

• Increase spread and cross-sell (FX, derivatives, DCM, M&A,

funding, cash management)

• Diversify portfolio credit risk

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

Annual revenues R$1,500M R$ 300M Large Corporate Corporate PMEs ~500 companies ~1,200 companies Not target Target market (R$B e %)

19

Financial highlights

Financial highlights

20

• 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);

Key indicators Managerial Income Statement Balance sheet

CURRENT AND LONG-TERM ASSETS 103,612 92,503 93,309 Cash and cash equivalents 170 296 159 Interbank funds applied 17,932 15,110 16,356 Securities and derivative financial instruments 27,012 21,083 18,309 Derivative financial instruments 4,211 2,036 3,414 Interbank accounts or relations 107 14 233 Loan Operations, Leases and Others receivables 46,561 47,206 46,749 Alow ance for loan losses (3,223) (3,674) (3,540) Tax credit 7,486 7,215 7,102 Others 3,357 3,218 4,527 NON-CURRENTS 552 1,016 1,054 TOTAL ASSETS 104,166 93,519 94,363 CURRENT AND LONG-TERM LIABILITIES 95,778 84,619 85,255 Deposits 7,429 8,503 10,128 Demand and Interbank deposits 2,227 2,143 2,180 Time deposits 5,202 6,360 7,948 Money market borrow ings 33,563 25,737 25,119 Acceptances and endorsements 23,154 24,085 23,549 Interbank accounts 53 64 139 Borrow ings and onlendings 4,304 4,062 3,533 Derivative financial instruments 4,341 1,701 3,199 Others obligations 22,933 20,468 19,588 Subordinated debts 5,987 5,818 5,766 Credit transactions subject to assignment 11,438 9,445 7,731 Others obligations 5,508 5,205 6,090 DEFERRED INCOME 30 32 34 SHAREHOLDERS’ EQUITY 8,358 8,868 9,074 TOTAL LIABILITIES 104,166 93,519 94,363 BALANCE SHEET | Liabilities (R$ Million) Mar.17 Dec.17 Mar.18 BALANCE SHEET | Assets (R$ Million) Mar.17 Dec.17 Mar.18

Net Interest Income (A) 1,205 1,332 1,347 Result of loan losses¹ (B) (420) (487) (326) Net Financial Margin (A+B) 785 845 1,021 Operating Income/Expenses (506) (546) (517) Income from Services and Banking Fees 290 376 325 Personnel² and Administrative expenses (540) (657) (653) Tax expenses (88) (112) (92) Income from subsidiaries 58 81 80 Other Operating Income/(Expenses) (226) (234) (176) Operating Income (Loss) 279 298 505 Non-Operating Income (Loss) (16) (4) (3) Income before Taxes 263 294 501 Income Tax and Social Contribution (135) (138) (247) Net Income 127 156 255 (R$ Million) 1Q17 4Q17 1Q18 Return on Average Equity (ROAE) 6.2 7.3 11.8 Return on Average Assets (ROAA) 0.5 0.6 1.1 Net Interest Margin3 (NIM) 5.3 6.3 6.6 Efficiency Ratio - LTM4 36.7 34.4 33.7 (%) 1Q17 4Q17 1Q18

Credit quality indicators

Credit quality Mar/17

D-H

Jun/17 Dec/17

AA-C

89.2% 88.7%

Mar/18 Sept/17

89.5% 10.8% 10.5% 88.9% 11.1% 89.1% 10.9% 11.3% 401 295 348 343 804 Net Loss Revenues from recovery Write-off

• 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.

(362) (385) (315) (267) (145) (252) (872)

1Q18

(59) (326)

4Q17

(420) (567) (58)

3Q17

385 (487)

2Q17

(530)

1Q17

Impairments Provisions (-) Revenues from recovery 21 7.4% 3,540 11 3,674

Mar/18

3,551 3,688 7.6% 26 3,218 7.0% 3,196 6.8% 22

Mar/17

3,257 3,231 14 3,245 6.9%

Jun/17

3,223 21

Sept/17 Dec/17

ALL balance/Loan porfolio Specific + Additional Generic¹ 133 167 201 304 121 534 461 549 646 926

2Q17 1Q18 3Q17 4Q17 1Q17

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)

1.75% 1.26% 1.15% 1.57% 0.97% 1.07% 0.92% 2.17%

• 0.12%

0.86% 1.15% 0.92% 1.90%

1Q15

0.58 0.84

• 0.07

0.55 1.05 0.90

3Q15

0.83 0.69

4Q15

0.82

2Q15 4Q16 4Q17

0.55

3Q16 2Q17

0.64 0.56 1.22 0.44

3Q17 1Q18

0.93 0.53 0.41 0.54 0.46 0.59

1Q17

1.02 0.43 0.65 0.47 0.62 0.47

2Q16 1Q16

New NPL Rate¹

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

22

New NPL rate

• 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.

Credit quality

Managed Loan Portfolio (A) 55,422 52,505 51,576 51,250 48,799 46,925 47,031 47,620 46,931 46,828 47,608 48,679 48,185 90-day NPL Balance 3,628 2,727 2,712 2,923 2,254 2,174 2,567 2,638 2,120 2,065 1,947 1,924 1,861 90-day NPL Quarterly Variation (B) 474 (902) (14) 211 (669) (80) 393 71 (518) (55) (118) (23) (63) Write-off (C) 578 834 838 693 1,215 639 624 469 926 646 549 461 534 New NPL (D=B+C) 1,052 (67) 823 903 546 560 1,017 540 408 591 431 439 471 New NPL Rate¹ (D/A) 1.90%

• 0.12%

1.57% 1.75% 1.07% 1.15% 2.17% 1.15% 0.86% 1.26% 0.92% 0.92% 0.97% 1Q18 3Q17 4Q17 3Q16 1Q16 2Q16 1Q15 2Q15 2Q17 3Q15 4Q15 1Q17 4Q16 NEW NPL (R$ Million)

Wholesale credit portfolio

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.

Wholesale credit porfolio

23

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

7,8% 7,5% 7,3% Dec/17 Mar/18 Mar/17 2.6 8.1 0.4 8.9 Dec/17 23.0 Mar/18 21.8 5.5 5.2 4.9 4.9 8.0 7.2 0.6 2.8 0.3 Mar/17 28.1 8.2 3.2

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

Loan portfolio Sectoral concentration¹

On balance loan portfolio R$M Part.(%) R$M Part.(%)

Financial Institutions 4,783 24.4% 2,211 14.5% Sugar and Ethanol 2,050 10.5% 1,721 11.3% Telecom 1,489 7.6% 1,393 9.2% Mining 915 4.7% 952 6.3% Agribusiness 828 4.2% 843 5.5% Retail 905 4.6% 841 5.5% Petrochemical 1,293 6.6% 769 5.1% Railways 706 3.6% 573 3.8% Food nad benerages industry 316 1.6% 479 3.2% Oil & Gas 409 2.1% 466 3.1% Trading Agro 230 1.2% 429 2.8% Government 471 2.4% 414 2.7% Services 231 1.2% 338 2.2% Electricity Distribution 313 1.6% 329 2.2% Automotive/Auto parts/Car Dealers 383 2.0% 317 2.1% Eletricity Generation 524 2.7% 290 1.9% Steel industry 326 1.7% 281 1.8% Industry 178 0.9% 275 1.8% Residential Construction 364 1.9% 248 1.6% Slaughterhouses 255 1.3% 232 1.5% Other sectors 2,630 13.4% 1,805 11.9% Total¹ 19,598 100.0% 15,206 100.0%

Wholesale Sectorial concentration Mar.17 Mar.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- brAA-

Short-term

B brA-1+

Brazil

Sovereign rating

Ba2 BB-