Earnings Presentation 3 rd Quarter, 2013 Disclaimer: This - - PowerPoint PPT Presentation

Earnings Presentation

3rd Quarter, 2013

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.

1

Results maintained trajectory of gradual improvement

3Q13 Highlights

Executive summary

• 1. Ratio between Net Interest Income and Average Interest-Earning Assets; 2. Includes Banking Fees; 3. Net of income from the recovery of written-off loans; includes ALL

expenses of the portfolios assigned with recourse

Consistent revenue generation

Net Interest Income (NII) increased 3.8% (R$42M) compared to 2Q13, reaching R$1,154M

• 4.6% p.y. Net Interest Margin¹ (NIM) in 3Q13, an improvement of 30 bps vs. 2Q13

Fee Income² grew 1.8% vs. 2Q13, amounting to R$257M in 3Q13

Improved quality of the portfolio

Maintenance of quality and scale in Auto Finance origination

• Better quality vintages reached 67% of the auto finance managed loan portfolio (62% in June/13)

NPL 90 reduced to 5.5% in Sept/13 – improvement of 20 bps in the quarter and 190 bps in 12 months

ALL reduction

Allowance for Loan Losses (ALL) expenses³ reduced 26.4% (R$253M) vs. 2Q13, totaling R$706M

• Comparing 9M13/9M12, there was a 38.3% total reduction and 48.0% (R$1.8B) in Consumer Finance

90-day Coverage Ratio reached 117% in Sept/13 (June/13: 111%; Sept/12: 93%)

Net Financial Margin increase

Net Financial Margin tripled when compared to 2Q13, amounting to R$448M in 3Q13

• Net Financial Margin growth resulted from both NII increase and continuous ALL reduction

Cost base under control

Personnel and Administrative expenses increased only 0.4% vs. 2Q13, totaling R$604M

• It’s worth noting that there was a 1.5% reduction in 9M13 (R$1,800M) vs. 9M12 (R$1,828M)

– Excluding expenses with labor claims, the reduction would have been of 4.5% in the period Results improved R$37M when compared to 2Q13 (3Q13: R$-159M; 2Q13: R$-196M)

2

Banco Votorantim is one of the leading banks in Brazil

“Top 10” in total assets, with diversified business portfolio and robust shareholder base

Banco Votorantim is one of the largest privately-held Brazilian banks in total assets… ...and is well positioned to capture additional business opportunities

Banco Votorantim – Overview

Shareholder 50% Total

10 largest banks in June/13 - Total Assets (R$B)¹

...and also in terms of loan portfolio...

112 125 131 144 478 710 771 814 990

Votorantim²

BTG Pactual Safra HSBC Santander BNDES Bradesco CEF Itaú Banco do Brasil 1,140

10 largest banks in June/13 - Loan Portfolio (R$B)¹

National privately-held Foreign State-owned 24 43 52 56 191 265 275 327 423 537 Banrisul Safra HSBC

Votorantim²

Santander BNDES Bradesco Itaú CEF Banco do Brasil National privately-held Foreign State-owned

• 1. Sept/13 information unavailable by the preparation of this presentation; 2. On-balance portfolio according to Bacen’s Res. 2,682; 3. Banco Votorantim estimate

Diversified business portfolio

• Wholesale Banking

– Relevant position in credit for large enterprises

• Consumer Finance

– Among market leaders in auto finance – 7th largest player in payroll loans³ – 5.6 million customers

• Wealth Management

– 9th largest asset manager by Anbima’s ranking Strong shareholder base, committed to the institution – Votorantim Group and Banco do Brasil Strategic partnership with Banco do Brasil Low fixed-cost business model in Consumer Finance

• Third-party distribution (vs. branches)

7th 10th

3

Diversified portfolio of Wholesale and Consumer businesses

Focus on profitability while deepening synergies with Banco do Brasil

Shareholders Pillars

• 1. Securitization with substantial risk retention before entry in force of Bacen’s Res. 3,533; 2. Includes guarantees provided and private securities; 3. Commissioned products

Consumer Finance Wholesale Auto Finance

Origination with quality, scale and profitability Focus on used vehicles (multi-brand dealers) Advance in new auto finance along with BB (new car dealers)

Other Businesses

Act selectively in payroll loans, focused

• n INSS (retirees and

pensioners) Expand synergic businesses (credit cards, insurance sales) Explore new

• pportunities (e.g.

“Mais BB³”)

Corporate & IB (CIB) Wealth Management Middle Market

Grow among companies with annual revenues above R$ 200M Strengthen the offer

• f products and

services (derivatives, FX, IB) Increase operating efficiency

Banco do Brasil Votorantim Group

Asset: 9th largest in the market, with innovative products Private: focus on estate planning via customized solutions Increase synergies with BB Position itself as a relevant partner via:

• Agile and long-term

relationships

• Integrated financial

solutions (credit, derivatives, IB, FX, structured products and distribution)

+

R$ 36.9B R$ 36.2B R$ 73.1B Expanded credit portfolio²

Off-balance¹ risk portfolio

R$ 5.4B R$ 1.0B Assigned to FI Assigned to FIDC R$ 28.1B R$ 8.1B R$ 29.8B R$ 7.1B Assets under Management R$ 42.7B

Corporate strategy

4 R$M % R$M % Net Interest Income (A) 1,112 1,154 42 3.8 3,355 3,389 33 1.0 ALL Expenses (B) (959) (706) 253 (26.4) (4,140) (2,554) 1,586 (38.3) Consumer Finance (669) (563) 106 (15.9) (3,775) (1,964) 1,811 (48.0) Wholesale (290) (144) 147 (50.5) (365) (590) (225) 61.6 Net Financial Margin (A+B) 153 448 295 193.1 (785) 834 1,619 (206.3) Operating Income/Expenses (549) (682) (134) 24.4 (1,676) (1,880) (204) 12.2 Fee/Banking Fee Income 253 257 4 1.8 749 748 (1) (0.1) Personnel Expenses (250) (241) 9 (3.7) (700) (719) (19) 2.8 Other Administrative Expenses (351) (363) (12) 3.3 (1,129) (1,081) 47 (4.2) Tax Expenses (133) (142) (10) 7.3 (351) (400) (48) 13.8 Other Operating Income/Expenses¹ (67) (193) (126) 188.2 (245) (428) (183) 74.8 Operating Income (Loss) (396) (235) 161 (40.8) (2,461) (1,046) 1,415 (57.5) Non-Operating Income (Loss) 3 (14) (17)

• (116)

(29) 87 (75.0) Taxation and Profit Sharing 197 89 (107) (54.6) 1,016 442 (575) (56.6) Net Income (Loss) (196) (159) 37 (18.8) (1,560) (633) 927 (59.4) 2Q13 3Q13

• Var. 3Q13/2Q13

9M12 9M13

• Var. 9M13/9M12

INCOME STATEMENT (R$ Million)

Results kept their trajectory of gradual improvement, driven by growth in the Net Financial Margin

• 1. Includes Other Operating Income/Expenses, as well as Equity in Income of Associated Companies and Subsidiaries

Consolidated results

Results have confirmed, once again, the progress in Banco Votorantim’s restructuring process

5

Net Interest Income (NII) grew 3.8% (R$42M) in 3Q13 vs. 2Q13

Fee Income increased 1.8% vs. 2Q13, amounting to R$ 257M in the quarter

MFB cresceu 3,8% em relação ao 2T13, impulsionando o NIM do 3T13 para 4,6% Fee Income increased 1.8%

• ver 2Q13, amounting to R$257M
• 1. Ratio between Net Interest Income (before ALL) and Average Interest Earning Assets

1,154 4.6% 2Q13 1,112 4.3% 3Q12 1,120 +3.8% 3Q13 4.4% Net Interest Income (NII) 9M13 3,389 4.3% 9M12 3,355 4.3% +1.0% Net Interest Income (R$M) and NIM¹ (% p.y.) Fee and Banking Fee Income (R$M)

3Q13 NIM increase reflects better portfolio quality, as well as focus on profitability (vs. growth)

257 253 256 3Q12 +1.8% 3Q13 2Q13 749

• 0.1%

9M13 748 9M12

NII increased 3.8% compared to 2Q13, driving the 3Q13 NIM to 4.6%

6

• 1.4%

CIB Middle Market Auto Finance Others¹ Sept/13 73.1 28.1 8.1 29.8 7.1 June/13 74.1 28.2 8.8 29.7 7.4 Sept/12 76.3 29.0 9.5 30.3 7.5

• 3.0%

Sept/13 79.5 28.1 8.1 34.7 8.6 June/13 81.9 28.2 8.8 35.7 9.2 Sept/12 89.7 29.0 9.5 40.8 10.5

• 4.5%

0.4%

• 7.7%
• 0.4%

∆Sept13 /June13

• 6.8%
• 2.8%
• 7.7%
• 0.4%

∆Sept13 /June13

The Bank maintained its conservative position in credit

R$73.1B expanded credit portfolio in Sept/13, with a 1.4% reduction vs. June/13

Expanded portfolio (interest earning) reduced 1.4% when compared to June/13… ...while managed portfolio decreased 3.0% due to the reduction in off-balance securitization

R$ Billion 6.4 13.4 7.8

Credit portfolio by segment

1 Payroll loans, credit cards and individual loans; 2. Since Jan/12, revenues from credit assignments with recourse are recognized over the term of the contract, while the assets themselves remain recorded in the assignor’s balance sheet Note: private securities criteria were revised in 3Q13, in order to be better aligned to BB’s methodology

Off-balance securitization

Expanded credit portfolio

(includes guarantees provided, private securities, and on-balance securit.)

Expanded managed credit portfolio

(includes off-balance securitization with recourse)

Credits assigned with recourse until Dec/11 had their revenues recognized by the time of the assignment²

7

• 0.4%

Sept/13 28.1 June/13 28.2 Sept/12 29.0

Middle Market CIB

Note: expanded credit portfolio includes on-balance portfolio, guarantees provided and private securities; private securities’ criteria were revised in 3Q13, in order to be better aligned to BB’s methodology

Wholesale – Highlights and credit portfolio

Wholesale: CIB and Middle Market maintained their focus

• n profitability and on strengthening their product offering

Wholesale businesses

Focus on clients with revenues of R$200M-R$600M/year

• R$100M-R$200M/year: selective action

Strengthening of the product platform (derivatives, FX, IB) Increase operating efficiency Focus on profitability (disciplined capital allocation) Serves companies with revenues above R$600M/year Increase the Bank’s relevance to clients via:

• Strengthening of the product platform
• Enhancement of international distribution (NY and London)
• Agile relationships, with long-term vision and industry

knowledge Focus on profitability (disciplined capital allocation) Expanded credit portfolio (R$B) Expanded credit portfolio (R$B) Sept/13 8.1 June/13 Sept/12 9.5 8.8

From R$100M to R$600M

79% 74%

8

Payroll Loans Auto Finance

• 1. Only on-balance portfolio; 2. Refers to light vehicles

Consumer Finance businesses

7th largest player in the payroll loans market² Focus on INSS (retirees and pensioners) Selective operation in private and public payroll loans Among market leaders in auto finance Acts as an extension of Banco do Brasil in auto finance outside the branch network Continuous improvement of credit processes

• 58%² automated credit decisions in Sept/13

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

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

Consumer Finance – Highlights and loan portfolio

Sept/12 40.8 30.3

10.5 6.0

• 2.8%

On- balance Off- balance Sept/13 34.7 29.8

4.9

June/13 35.7 29.7

• 7.3%

On- balance Off- balance Sept/13 8.2

6.6 1.5

June/13 8.8

7.0 1.8

Sept/12 10.1

7.2 2.9

• 18.9%

0.4% ∆Sept13 /June13

• 15.9%
• 5.1%

∆Sept13 /June13 Used/ Total¹ 73% 68% INSS/ Total 61% 51%

9

• 42%

+24% Used light vehicles Other vehicles¹ 9M13 10.1 7.4 (73%) 2.7 9M12 8.2 5.5 (67%) 2.7 9M11 17.5 9.2 (52%) 8.3

Auto Finance: origination increased 24% in 9M13 vs. 9M12

Maintained focus on used light vehicles and conservatism in credit concession

Origination grew 24% in the 9M13 vs. 9M12, focused on used light vehicles... ...while maintaining conservative criteria in credit concession

9.00 25.9 Sept/12 7.50 24.1 Sept/11 12.00 27.5 Dec/10 10.75 24.6 Selic² BVF rate Sept/13

• 1. Composed of trucks, motorcycles and new light vehicles ; 2. Market’s benchmark interest rate

26% 27% 38% 37% 45 44 49 52 3Q13 3Q12 3Q11 4Q10 Down payment Average tenor

Consumer Finance – Auto Finance

∆ 9M13/ 9M12 0.4% 35% ∆ 9M13/ 9M11

• 67%
• 19%

Banco Votorantim is one of the market leaders in auto finance, focused on used light vehicles

Auto Finance origination (R$B) Down payment (%) and average tenor (months) Auto finance origination interest rate x Selic rate² (% p.y.)

10

The Bank has been originating auto finance vintages with quality for the past 2 years, focused on multi-brand dealers

Sept/13 0.9 June/13 1.0 Dec/12 1.1 June/12 Dec/11 1.0 June/11 Dec/10 2.1 June/10 Dec/09 1.5 June/09 1.1 Vintages indicating lower quality

64% 71%

Multi-brand dealers/ Total production Inad 30¹ (by vintage) New car dealers Multi-brand dealers

80%

Inad 30 (by vintage) returned to historic quality levels since the 4Q11

Consumer Finance – Auto Finance

June09- June10 average

• 1. % of each month’s production with first installments past due over 30 days

Light vehicles – Origination by channel (R$B) and 1st installment delinquency¹ (%)

11

Sept/13 5.5 6.9 6.5 June/13 5.7 7.1 6.8 Mar/13 6.2 7.7 7.2 Dec/12 6.6 8.3 7.7 Sept/12 7.4 9.4 9.1 67%

Growing participation of better quality vintages in auto finance has contributed to reduce delinquency

Better quality vintages reached 67% of the auto finance portfolio in Sept/13...

19% 15% 13% 11% 6% 52% 47% 43% 38% 33% 27% 29% 38% 44% 52% 59% 66% 8% Sept/13 June/13 Mar/13 Dec/12 Sept/12

100%

Up to June/10 July/10 to Sept/11 After Sept/11 Dec/13P

...contributing to the continuous improvement

• n delinquency, that fell to 5.5% in Sept/13

Auto finance managed portfolio¹ by vintage (%) Delinquency

• 1. Includes on-balance loan portfolio according to Bacen’s Res. 2,682, and off-balance credits assigned with substantial risk retention until Dec/11, before entry in force of

Bacen’s Res. 3,533

48% Quality vintages/ Total (%) 73%

• Cons. Finance

Light vehicles Total

Managed loan portfolio’s¹ NPL 90 (%)

Total NPL 90 reduced 190 bps in 12 months

12

Managed Loan Portfolio (A) 76,775 74,185 71,480 68,385 65,923 63,546 61,281 NPL 90 Balance 5,390 5,539 5,276 4,520 4,056 3,616 3,373 NPL 90 Quarterly Variation (B) 793 149 (262) (756) (465) (439) (244) Write-off (C) 693 1,079 1,269 1,434 1,149 1,339 902 New NPL (D=B+C) 1,486 1,228 1,007 678 684 900 659 New NPL Rate¹ (D/A) 1.88% 1.60% 1.36% 0.95% 1.00% 1.36% 1.04% NEW NPL (R$ Million) 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13

“New NPL” rate reduced again in 3Q13

90-day NPL formation decreased to R$659M in 3Q13, vs. R$900M in 2Q13

1.04% 1.36% 1.00% 0.95% 1.36% 1.60% 1.88%

• 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

New NPL rate

Delinquency – New NPL 3Q13 0.90 0.66 2Q13 1.34 0.90 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 Write-off (R$B) New NPL (R$B)

13

ALL expenses decreased 38% in the 9M13 vs. 9M12

And 90-day Coverage Ratio reached 117% in Sept/13

117,1% 110,5% 93,1%

• 1. Includes on-balance loan portfolio according to Bacen’s Res. 2,682, and off-balance credits assigned with substantial risk retention until Dec/11, before entry in force of

Bacen’s Res. 3,533; 2. Ratio between ALL balance and balance of operations past due over 90 days Note: ALL expenses include expenses related to credit assignments with recourse (both on and off-balance), as well as revenues from write-off recovery

Expenses with credit provisions (R$M) Managed loan portfolio¹’s 90-day Coverage Ratio² 669 563 290 144

• 45.1%
• 26.4%

3Q13 706 2Q13 959 3Q12 1,286 1,167 119

• 38.3%

9M13 2,554 1,964 590 9M12 4,140 3,775 365

ALL expenses reduced 26.4% vs. 2Q13 and 38.3% (R$ 1.6B) in the 9M13 vs. 9M12... ...in parallel to the ongoing increase in the Coverage Ratio, that reached 117% in Sept/13

ALL expenses and 90-day Coverage Ratio

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

Sept/13 3,373 3,996 3,616 June/13 3,948 Sept/12 5,276 4,914 ∆ 9M13/ 9M12

• 48.0%

61.6%

R$ Million Wholesale Cons. Finance

14

Banco Votorantim has also improved cost management

Personnel and Administrative expenses decreased 1.5% (R$28M) in the 9M13 vs. 9M12

Personnel and Administrative Expenses

Personnel and Administrative expenses reduced 1.5% in the 9M13 vs. 9M12 Excluding labor claims, Personnel expenses would reduce 5.1% in 9M13 vs. 9M12

Personnel and Administrative expenses (R$M) 395 351 363 221 250 241 Admin. Person. 3Q13 604 2Q13 601 3Q12 615

• 1.9%

+0.4%

• 1.5%

9M13 1,800 1,081 719 9M12 1,828 1,129 700 ∆ 9M13/ 9M12 2.8%

• 4.2%

Personnel expenses (R$M)

This cost base reduction results from a set of initiatives for efficiency gains undertaken since Sept/11

68

Others Labor claims

9M13 719 651 9M12 700 686 13 ∆ 9M13/ 9M12 404.0%

• 5.1%

Related to restructuring process

15

Summary: results kept trajectory of gradual improvement...

Consistent revenue generation, reduction in ALL expenses and cost base under control

Total revenues

(NII, Fee/Banking Fee Income and Other Op. Revenues)

Credit provision expenses – ALL Personnel and Administrative expenses Net income and Net financial margin

R$ Million

Consolidated results

590

• 38.3%

9M13 2,554

1,964

9M12 4,140

3,775 365 563 669

• 26.4%

Cons. Finance Wholesale

3Q13 706

144

2Q13 959

290

3Q12 1,286

1,167 119 395 363 221 250 241 351

0.4%

3Q13 604 2Q13 601 3Q12 615

700 719

• 1.5%

Administrative Personnel

9M13 1,800

1,081

9M12 1,828

1,129 3.8%

3Q13 1,441 2Q13 1,388 3Q12 1,413

0.7%

9M13 4,227 9M12 4,196

• 159
• 196
• 459

448 153 3Q13 2Q13 3Q12

• 166

633 834 9M13 9M12 1,560

• 785

Net financial margin (post provision) Net income

16

Prepayment expenses of credit assignments³ ALL expenses Expenses with contingencies²

2 3 1

889 959 706 9M13 2,554 5.3% 9M12 4,140 7.4% 9M11 2,214 3.9%

R$M R$M

212 69 444 130 124 406 9M13 9M11 9M12 1Q13 2Q13

R$55M increase in 3Q13 vs. 2Q13

62 80 78 225 457 9M13 9M12 220 9M11

R$M

Revenues recognized by the time of the assignment

Off-balance securitiz. 13.5 10.5 5.4 ALL expenses/Loans¹ (p.y.) 3Q13

...but were still impacted by the following factors

Credit provision expenses (ALL) and contingencies remain above the historic level

Consolidated results

• 1. Refers to the period’s average managed loan portfolio; 2. Civil and labor; 3. Credits assigned with recourse until Dec/11 (before Res. 3,533)

2014 results are going to be substantially better, despite impacts from the past

17

In this context, the Bank has improved its funding profile

Increased participation of long-term instruments (e.g. LF, Securitization) and reduced CDs

Funding evolution (R$B)

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

Funding Sept/13 73.9 16.3 5.1 15.0 7.7 7.1 7.2 10.4 5.1 June/13 76.1 16.4 6.9 14.3 8.5 7.0 7.5 10.3 5.3 Sept/12 79.0 19.8 15.1 12.1 10.2 8.0 6.5 0.9 6.4

• 1. Includes other deposits, debenture issuances, and box of options; 2. Credits assigned with substantial risk retention to FIDCs e to other FI, under Res. 3,533 (i.e. does not

include off-balance credit assignments) Note: International funding is 100% swapped for BRL

19% 7% 15% 20% 13% 10% 10% 10% 10% 7% 8% 14% 8%

Debentures (repos) Time deposits (CD) Bills (LF, LCA e LCI) Loans and onlendings Subordinated debt Private securities Credit Assignments² Others¹

25% 1% Sept/13 73.9 22% Sept/12 79.0

18

Capital (PR) 13,002 12,111 11,430 10,794 10,728 Tier I Capital 8,449 7,875 7,595 7,401 7,338 Tier II Capital 4,553 4,236 3,835 3,393 3,390 Capital Requirement (PRE) 9,396 9,310 9,245 8,541 8,481 Credit risk 8,764 8,721 8,494 7,991 7,846 Market risk 337 294 469 268 234 Operational risk 296 296 282 282 400 Excess Capital 3,606 2,800 2,185 2,253 2,247 Basel Ratio (PR/(PRE/0,11)) 15.2% 14.3% 13.6% 13.9% 13.9% Tier I 9.9% 9.3% 9.0% 9.5% 9.5% Tier II 5.3% 5.0% 4.6% 4.4% 4.4% Mar.13 June.13 Sept.13 BASEL RATIO (R$ Million) Sept.12 Dec.12

Banco Votorantim ended Sept/13 with a 13.9% Basel Ratio

Tier I ended 3Q13 at 9.5%, only composed of Core Capital

Capital structure

Shareholders are committed to maintain the Bank’s capital structure at adequate levels

Note: as of Oct/13, shall come into force some of the new Basel III rules, which considers, among other measures: (i) removal of the subordinated debt limit authorized to integrate Tier II capital, and (ii) 10% decay of subordinated debt that do not fit the new Basel III requirements

19

Annexes

20

Sept/13 42.7 June/13 42.7 Mar/13 41.1 Dec/12 47.3 Sept/12 45.6

Total assets Assets under management On-balance loan portfolio

Sept/13 110.7 June/13 111.9 Mar/13 119.7 Dec/12 121.0 Sept/12 110.7

Financial highlights

Shareholders’ Equity

Sept/13 10.7 7.1 3.6 June/13 10.8 7.1 3.6 Mar/13 11.4 7.7 3.8 Dec/12 12.1 8.2 3.9 Sept/12 13.0 8.7 4.3 Sept/13 54.9 June/13 55.7 Mar/13 56.5 Dec/12 57.0 Sept/12 58.1 Financial highlights

R$ Billion

Capital

21

Net Interest Income (A) 1,120 1,112 1,154 3.8% 3,355 3,389 1.0% ALL Expenses (1,286) (959) (706)

• 26.4%

(4,140) (2,554)

• 38.3%

Net Financial Margin (B) (166) 153 448 193.1% (785) 834

• 206.3%

Average Interest-Earning Assets (C) 104,263 105,840 102,260

• 3.4%

105,371 105,837 0.4% Compulsory Reserves (Bacen) 2,267 491 200

• 59.2%

3,540 564

• 84.1%

Interbank Funds Applied 12,251 15,492 15,374

• 0.8%

14,592 15,920 9.1% Securities 31,301 33,719 31,360

• 7.0%

28,637 33,319 16.4% Loan Portfolio 58,444 56,138 55,326

• 1.4%

58,602 56,034

• 4.4%

NIM (A/C) 4.4% 4.3% 4.6% 0.3 p.p. 4.3% 4.3%

• NIM after ALL (B/C)
• 0.6%

0.6% 1.8% 1.2 p.p.

• 2.9%

3.2% 6.1 p.p. 9M12

NET INTEREST MARGIN (NIM)

(R$ Million) 3Q12 9M13

• Var. 9M13

/9M12 2Q13 3Q13

• Var. 3Q13

/2Q13

Net Interest Margin (NIM)

Financial highlights - NIM

NIM reached 4.6% in 3Q13, reflecting continuous improvement of portfolio quality and focus on profitability

22 Sept/13 6.4% 3,948 June/13 6.3% 3,996 Mar/13 6.5% 4,313 Dec/12 6.6% 4,518 Sept/12 6.9% 4,914 Sept/13 3,373 117.1% June/13 3,616 110.5% Mar/13 4,056 106.4% Dec/12 4,520 99.9% Sept/12 5,276 93.1%

ALL Balance (R$M) 90-day Coverage ratio¹ (%) NPL 90 / Managed loan portfolio (%) NPL 60 / Managed loan portfolio (%)

ALL balance/Managed loan portfolio ALL balance (R$M)

Managed loan portfolio’s credit indicators

Improved asset quality and coverage ratio of the portfolio

Financial highlights - Credit

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

Note: refers to managed loan portfolio (includes credits assigned with substantial risk retention until Dec/11 (before Res. 3,533))

2.4% 6.6% 8.3% Sept/12 2.4% 7.4% 9.4% Sept/13 2.1% 5.5% 6.9% June/13 2.4% 5.7% 7.1% Mar/13 2.3% 6.2% 7.7% Dec/12 Wholesale Total Consumer Finance 2.9% 7.7% 7.2% 9.0% Mar/13 Sept/13 2.6% 6.9% 8.6% June/13 2.8% 9.7% Dec/12 3.1% 8.2% 10.3% Sept/12 2.7% 8.8% 11.2% Wholesale Total Consumer Finance NPL 90 balance (R$M) 90-day Coverage

23

Total Past due Falling due Total Past due Falling due Total Past due Falling due AA 8,034

• 8,034

6,662

• 6,662

5,244

• 5,244

A 33,087

• 33,087

26,293

• 26,293

26,285

• 26,285

B 6,640 1,632 5,008 10,109 1,227 8,882 10,062 1,125 8,936 C 3,645 1,443 2,202 6,819 1,454 5,364 7,814 1,303 6,511 D 1,411 837 574 1,556 891 664 1,198 678 521 E 1,104 637 467 1,139 530 609 1,180 469 711 F 554 517 37 569 440 130 461 379 82 G 678 589 88 522 416 106 498 358 140 H 2,925 2,698 226 2,078 1,987 92 2,162 2,035 127 TOTAL 58,079 8,354 49,725 55,748 6,946 48,802 54,903 6,347 48,557 B-C/Total 18% 37% 15% 30% 39% 29% 33% 38% 32% RISK (R$ Million) Sept.12 June.13 Sept.13

On-balance loan portfolio per risk level

Greater B-C portfolio due to the adoption of a more conservative “departure rating” policy since 2Q12

Financial highlights – Credit On-balance loan portfolio classified as levels B and C (R$M) Falling due Past due Sept/13 17,875 86% 14% June/13 16,928 84% 16% Mar/13 15,273 79% 21% Dec/12 12,759 76% 24% Sept/12 10,285 70% 30% June/12 8,905 63% 37% Mar/12 9,141 58% 42%

Increase in B-C portfolio related to greater % of initial provisioning applied to vehicles financed since 2Q12 (“departure rating”)

24

Personnel Expenses (221) (250) (241)

• 3.7%

9.2% Other Administrative Expenses (395) (351) (363) 3.3%

• 8.1%

Total Personnel and Administrative Expenses (A) (615) (601) (604) 0.4%

• 1.9%

Net Interest Income (NII) 1,120 1,112 1,154 3.8% 3.0% Fee/Banking Fee Income 256 253 257 1.7% 0.1% Equity in Income of Associated Companies and Subsidiaries 18 20 30 50.9% 63.9% Other Operating Income/Expenses (95) (87) (223) 156.9% 133.7% Total Revenues (B) 1,300 1,297 1,218

• 6.1%
• 6.3%

Efficiency Ratio (A/B) - 3M 47.4% 46.4% 49.6% 3.2 p.p. 2.2 p.p. Efficiency Ratio (A/B) - 12M 50.6% 51.0% 51.6% 0.6 p.p. 1.0 p.p. Expenses with labor claims and contingencies (183) (98) (143) 45.2%

• 22.1%

Efficiency Ratio (A/B) excl. labor claims and conting. - 3M 41.5% 41.9% 43.6% 1.7 p.p. 2.1 p.p. Efficiency Ratio (A/B) excl. labor claims and conting. - 12M 44.4% 43.6% 44.2% 0.6 p.p.

• 0.2 p.p.

EFFICIENCY RATIO (ER) (R$ Million) 3Q12 2Q13 3Q13

• Var. 3Q13

/2Q13

• Var. 3Q13

/3Q12

Financial highlights – Efficiency Ratio

Efficiency Ratio (ER)

Efficiency Ratio still impacted by specific expenses with contingencies and labor claims