BANCO DO BRASIL S.A. Management Discussion
and Analysis
1Q24
Management Discussion & Analysis 1Q24
Presentation
The Management Discussion and Analysis Report (MD&A) presents Banco do Brasil's economic and financial situation. Addressed to market analysts, shareholders, and investors with quarterly periodicity. The reader can find information about profitability, productivity, loan portfolio quality, capital structure, capital market, structural data, among others.
The MD&A and other documents can be accessed on the Investor Relations' website, where additional information about Banco do Brasil is also available, such as: structural information, corporate governance and sustainability, material facts and information to the market, presentations, corporate events, among others. All documents related to the earnings release can be consulted in the Results Centeras well as download in the Investor's Kit.
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Banco do Brasil S.A. | BBAS3 | BDORY
Management Discussion & Analysis 1Q24
This report makes references and statements about expectations, planned synergies, growth estimates, earnings projections and future strategies projections regarding Banco do Brasil's Conglomerate. Such statements are based on current expectations, estimates and projections of management about future eventsand financial trends that may affect the business of the Group.
These references and statements are not guarantees of future performance and involve risks and uncertainties that could extrapolate the control of management, and thus can result in balances and values different from those anticipated and discussed in this report. The expectations and projections depend on the market conditions (technological changes, competitive pressures on products, prices, among others), the macroeconomic performance of the country (interest and exchange rates, political and economic changes,inflation, changes in tax legislation, among others) and international markets.
Future expectations based in this report should consider the risks and uncertainties about the business of the Group. Banco do Brasil has no responsibility to update any estimate contained in reports published in previousperiods.
The tables and charts in this report shows, in addition to the accounting balances and values, financial and managerial numbers. The changes of relative rates are calculated before rounding procedure in millions of R$. Rounding utilized follows the rules established by Resolution 886/66 of IBGE's Foundation: if the decimal number is equal or greater than 0.5, it increases by one unit, if the decimal number is less than 0.5, there is noincrease.
Banco do Brasil S.A. | Investor Relations | 1 |
Management Discussion & Analysis 1Q24 | |
Table of Contents | |
Performance Summary | 9 |
Earnings Summary | 10 |
Statement of Income | 11 |
Financial Margin | 12 |
Net Interest Income (NII) | 12 |
Managerial NII | 13 |
ALLL Expanded View | 14 |
Fee Income | 15 |
Administrative Expenses and Cost-to-Income Ratio | 16 |
Capital Adequacy Ratio | 17 |
Loan Portfolio | 18 |
Guidance | 20 |
1. Summary Consolidated Financial Information | 21 |
Consolidated Balance Sheet | 22 |
Consolidated Statement of Income | 23 |
Reallocations Breakdown | 24 |
2. Net Interest Income | 27 |
Accounting NII | 28 |
Financial Income from Loans Operations | 29 |
Financial Expenses from Commercial Funding | 31 |
Financial Expenses from Institutional Funding | 32 |
Treasury Result | 33 |
Managerial NII | 36 |
Assets and Liabilities Analysis | 38 |
Earnign Assets | 38 |
Interest-Bearing Liabilities | 39 |
Volume and Rate Analysis | 40 |
Spreads | 41 |
Net Interest Margin | 41 |
Clients Spread | 42 |
Managerial Credit Spread | 43 |
Balance in Foreign Currencies | 44 |
Balance Sheet by Index | 45 |
3. Fee Income | 47 |
4. Administrative Expenses | 50 |
Customer Service Network | 53 |
Automated Teller Machines (ATM) | 54 |
Indicators | 55 |
5. Other Operating Income and Expenses | 56 |
Other Income and Expenses | 57 |
Banco do Brasil S.A. | Investor Relations | 2 |
Management Discussion & Analysis 1Q24
Information on Subsidiaries and Affiliates | ............................................................................................................ 58 |
6. Capital Management | 59 |
7. Loan | 65 |
Expanded Loan Portfolio | 66 |
Individuals Loan Portfolio | 76 |
Companies Loan Portfolio | 83 |
Agribusiness Loan Portfolio | 91 |
8. Funding | 97 |
Balance and Market Share | 98 |
Sources and Uses | 100 |
9. Financial Services | 102 |
Payment Methods | 103 |
Asset Management | 104 |
Custody | 107 |
Capital Market | 108 |
Consortium | 109 |
Global Treasury | 111 |
10. Other Information | 112 |
Actuarial Assets and Liabilities | 113 |
International Businesses | 115 |
Strategic Books | 119 |
CustomerExperience | 120 |
Sustainability | 135 |
Digital Strategy | 141 |
Investment Advisory Services | 150 |
Glossary | 156 |
Banco do Brasil S.A. | Investor Relations | 3 |
Management Discussion & Analysis 1Q24 | |
List of Tables | |
Table 1. Banco do Brasil - Summary of Income, Balance Sheet and Multiples | 9 |
Table 2. Summary Statement of Income - R$ million | 11 |
Table 3. Net Interest Income (NII) and Net Interest Margin (NIM) - R$ million | 12 |
Table 4. Margin with Clients and with the Market - R$ million | 13 |
Table 5. ALLL Expanded View - R$ million | 14 |
Table 6. Fee Income - R$ million | 15 |
Table 7. Balance Sheet - Assets, Liabilities and Shareholder's Equity - R$ million | 22 |
Table 8. Statement of Income with Reallocations - R$ million | 23 |
Table 9. Reallocations and One-Off Items Breakdown - R$ million | 25 |
Table 10. Tax Effects and Profit Sharing on One-Off Items - R$ million | 26 |
Table 11. Key Indicators | 28 |
Table 12. Net Interest Income Breakdown - R$ million | 28 |
Table 13. Loans Operations Income - R$ million | 29 |
Table 14. Commercial Funding Result - R$ million | 31 |
Table 15. Funding vs. Selic Rate - R$ million | 31 |
Table 16. Institutional Funding Expenses - R$ million | 32 |
Table 17. Treasury Result - R$ million | 33 |
Table 18. Securities Income - R$ million | 33 |
Table 19. Securities Portfolio by Category - Market Value - R$ million | 34 |
Table 20. Securities Portfolio by Maturity - Market Value - R$ million | 34 |
Table 21. Liquidity Balance - R$ million | 35 |
Table 22. Open Market Funding Expenses - R$ million | 35 |
Table 23. Margin with Clients and with the Market - R$ million | 37 |
Table 24. Average Balances and Interest Rate - Earning Assets (YoY) - R$ million | 38 |
Table 25. Average Balances and Interest Rate - Earning Assets (QoQ) - R$ million | 38 |
Table 26. Average Balances and Interest Rates - Interest-Bearing Liabilities (YoY) - R$ million | 39 |
Table 27. Average Balances and Interest Rates - Interest-Bearing Liabilities (QoQ) - R$ million | 39 |
Table 28. Change in Volume and Rate - R$ million | 40 |
Table 29. NIM and NII - R$ million | 41 |
Table 30. NIM and Risk-Adjusted NIM - % | 41 |
Table 31. Clients Spread and Risk-Adjusted Clients Spread - R$ million | 42 |
Table 32. Balance in Foreign Currencies - R$ million | 44 |
Table 33. Maturity Mismatch (Multiple Bank) - R$ million | 46 |
Table 34. Fee Income - R$ million | 48 |
Table 35. Administrative Expenses - R$ million | 51 |
Table 36. BB's Staff Profile | 52 |
Table 37. Service Network | 53 |
Table 38. Traditional and Specialized Service Network | 53 |
Table 39. Adjusted Coverage Ratios - R$ million | 55 |
Table 40. Adjusted Cost-to-Income Ratio - R$ million | 55 |
Banco do Brasil S.A. | Investor Relations | 4 |
Management Discussion & Analysis 1Q24 | |
Table 41. Other Operating Income/Expenses - R$ million | 57 |
Table 42. Investments in associates and joint ventures in Brazil - R$ thousand | 58 |
Table 43. Basel Index - R$ million | 61 |
Table 44. PRMR Regarding the Portion of the RWACPAD1 - R$ million | 63 |
Table 45. PRMR Regarding the RWAOPAD Portion - R$ million | 63 |
Table 46. PRMR Regarding the RWAMPAD Portion - R$ million | 63 |
Table 47. RWACPAD1 Segregated by Risk Weighting Factor - FPR - R$ million | 64 |
Table 48. Loan Portfolio - Classified and Expanded¹ - R$ million | 66 |
Table 49. 100 Largest Customers in Relation to the Classified Loan Portfolio and RE- R$ million | 68 |
Table 50. Expanded ALLL- R$ million | 69 |
Table 51. Credit Risk - R$ million | 70 |
Table 52. Classified Loan Portfolio by Risk Level - % | 70 |
Table 53. Renegotiated When Past Due Balance - Multiple Bank¹- R$ million | 74 |
Table 54. Individuals Loan Portfolio - R$ million | 76 |
Table 55. Individuals Classified Loan Portfolio by Risk Level - % | 80 |
Table 56. Companies Loan Portfolio - R$ million | 83 |
Table 57. SME Loan Portfolio ¹ - R$ million | 86 |
Table 58. Concentration of Companies and Agro Companies Loan Portfolio by Macro-Sector - R$ million | 87 |
Table 59. Companies Classified Loan Portfolio by Risk Level - % | 88 |
Table 60. Agribusiness Loan Portfolio - R$ million | 91 |
Table 61. Agribusiness Loan Portfolio by Customer Size - R$ million | 91 |
Table 62. Agribusiness Loan Portfolio by Financed Item - R$ million | 92 |
Table 63. Rural Credit Disbursements by Purpose - R$ million | 92 |
Table 64. Insurance in the Working Capital for Input Purchase - R$ million | 93 |
Table 65. Classified Agribusiness Loan Portfolio by Region - % | 93 |
Table 66. Breakdown of the Sustainable Loan Portfolio - Agribusiness - R$ million | 94 |
Table 67. Agribusiness Classified Loan Portfolio by Risk Level - % | 94 |
Table 68. Commercial Funding - R$ million | 98 |
Table 69. Institutional Funding - R$ million | 99 |
Table 70. Commercial Funding Abroad - Modality - US$ million | 99 |
Table 71. Commercial Funding Abroad - Product - US$ million | 99 |
Table 72. Sources and Uses - R$ million | 100 |
Table 73. Current Bonds Issued Abroad | 101 |
Table 74. Cards Base - Recurring Use1 - million | 103 |
Table 75. Cards Business Income* - R$ million | 104 |
Table 76. Investment Funds by Segment - R$ million | 105 |
Table 77. Investment Funds and Managed Portfolio by Anbima's Categories¹ - R$ million | 105 |
Table 78. Investment Funds with Social Environmental Characteristics Management - R$ million | 106 |
Table 79. Consortium - Active Quotas by Modality - Thousand | 110 |
Table 80. Consortium - Average Ticket - R$ | 110 |
Table 81. Consortium - Average Term and Average Management Rate | 110 |
Table 82. Assets Breakdown - % | 113 |
Table 83. Main Actuarial Assumptions - % | 113 |
Banco do Brasil S.A. | Investor Relations | 5 |
Management Discussion & Analysis 1Q24
Table 84. Effects of Previ (Plano 1) Accounting - CVM Deliberation No.110/2022 - R$ million | 113 |
Table 85. Previ (Plano 1) - Fundos de Utilização1 - R$ million | 114 |
Table 86. Effects of the Cassi Accounting - CVM Deliberation No.110/2022 - R$ million | 114 |
Table 87. Foreign Service Network | 115 |
Table 88. Consolidated Abroad - Assets - R$ million | 116 |
Table 89. Consolidated Abroad - Liabilities - R$ million | 116 |
Table 90. Consolidated Abroad - Statement of Income - R$ million | 116 |
Table 91. Banco Patagonia - Balance Sheet Highlights - R$ million | 117 |
Table 92. Banco Patagonia - Main Statement of Income Items - R$ million | 118 |
Table 93. Banco Patagonia - Net Interest Income - R$ million | 118 |
Table 94. Banco Patagonia - Profitability, Capital and Credit Indicators - % | 118 |
Banco do Brasil S.A. | Investor Relations | 6 |
Management Discussion & Analysis 1Q24 | |
List of Figures | |
Figure 1. Margin with Clients¹ and with the Market² - R$ million | 13 |
Figure 2. Administrative Expenses - R$ million | 16 |
Figure 3. Capital Adequacy Ratio - % | 17 |
Figure 4. Changes in Common Equity Tier 1 (CET1)- % | 17 |
Figure 5. Expanded Loan Portfolio - R$ billion | 18 |
Figure 6. NPL +90d of Classified Loan Portfolio - % | 19 |
Figure 7. Coverage Index of Classified Loan Portfolio - % | 19 |
Figure 8. 2024's Guidance | 20 |
Figure 9. Loan Operations Income Breakdown - % | 30 |
Figure 10. Classified Loan Portfolio Breakdown - % | 30 |
Figure 11. Securities Portfolio by Index (BB Multiple Bank) - % | 34 |
Figure 12. Margin with Clients¹ and with the Market² - R$ million | 36 |
Figure 13. Clients Spread and Risk-Adjusted Clients Spread - %¹ | 42 |
Figure 14. Managerial Credit Spread - %¹ | 43 |
Figure 15. Assets and Liabilities by Index and Net Position (Multiple Bank) - R$ billion¹ | 45 |
Figure 16. Quarterly Changes in Fee Income - R$ million | 49 |
Figure 17. Annual Changes in Fee Income - R$ million | 49 |
Figure 18. Automated Teller Machines (ATM) | 54 |
Figure 19. Evolution of the Basel Index - % | 60 |
Figure 20. RWA consumption - R$ billion | 62 |
Figure 21. Composition of the RWA - % | 62 |
Figure 22. Portfolio - Guidance View - R$ billion | 67 |
Figure 23. Sustainable Business Portfolio - R$ billion | 67 |
Figure 24. BB's Classified Loan Portfolio in Brazil by Contracted Period - % | 68 |
Figure 25. Expanded ALLL- R$ million | 69 |
Figure 26. ALLL - Classified Loan Portfolio - R$ million | 71 |
Figure 27. NPL+90d - As % of the Classified Loan Portfolio | 72 |
Figure 28. Classified Loan Portfolio Coverage Index | 72 |
Figure 29. New NPL - % on the Classified Loan Portfolio | 73 |
Figure 30. Credits Renegotiated When Past Due Disbursement - Multiple Bank¹- R$ million | 73 |
Figure 31. Credit Regularization Rate Over Collection Period - % | 74 |
Figure 32. Collection and Regularization before Write Off (Accumulated 12 months) - % | 75 |
Figure 33. Accumulated Recovery (R$ billions) and Cash Recovery Index - % | 75 |
Figure 34. Expanded Individuals Loan Portfolio Breakdown - R$ million | 76 |
Figure 35. Payroll Loans - R$ million | 77 |
Figure 36. Mortgage - R$ million | 77 |
Figure 37. Non-Payroll Loan - R$ million | 78 |
Figure 38. Credit Card - R$ million | 79 |
Figure 39. Credit Card - Portfolio Composition - R$ million | 79 |
Figure 40. Individuals NPL+90d and Classified Loan Portfolio Coverage Index - % | 80 |
Banco do Brasil S.A. | Investor Relations | 7 |
Management Discussion & Analysis 1Q24
Figure 41. NPL+90d Individuals Portfolio - % by Credit Line | 81 |
Figure 42. New NPL - Individuals Loan Portfolio | 81 |
Figure 43. Individuals Loan Portfolio - Annual Vintage | 82 |
Figure 44. Expanded Companies Loan Portfolio Breakdown - R$ million | 83 |
Figure 45. Expanded Companies Loan Portfolio Breakdown ¹ - R$ million | 84 |
Figure 46. Expanded Corporate Portfolio - R$ million | 85 |
Figure 47. Companies NPL+90d and Classified Loan Portfolio Coverage Index - % | 88 |
Figure 48. NPL+90d Companies Portfolio - % by Credit Line | 89 |
Figure 49. New NPL - Companies Loan Portfolio | 89 |
Figure 50. SME Companies Loans Portfolio - Annual Vintage | 90 |
Figure 51. Agribusiness NPL+90d and Classified Loan Portfolio Coverage Index - % | 95 |
Figure 52. NPL+90d Agribusiness Portfolio - % by Credit Line | 95 |
Figure 53. New NPL - Agribusiness Loan Portfolio | 96 |
Figure 54. BB's Funding Market Share - R$ billion | 98 |
Figure 55. BB's Cards Turnover - R$ billion | 103 |
Figure 56. Resource Management and Market Share - R$ billion | 104 |
Figure 57. Fiduciary Management and Market Share - R$ billion | 105 |
Figure 58. Total Domestic Custody Assets and Market Share - R$ billion | 107 |
Figure 59. Consortium - Fee Income¹ and Active Quotas | 109 |
Figure 60. Banco Patagonia - Funding - US$ million | 117 |
Figure 61. Commitments to Sustainability | 137 |
Figure 62. Sustainable Portfolio - R$ billion | 138 |
Figure 63. Additionality/Contribution - Sustainable Loan Portfolio | 138 |
Figure 64. Investments in Technology - R$ billion - % | 142 |
Figure 65. Evolution of Fixed Income and LCA Funds' Net Asset Value as of (Base 100) - Retail and Style Segment | |
.................................................................................................................................................................................. | 152 |
Figure 66. NPS High Income Investors (Base 100) | 153 |
Figure 67. Balance High Income Retail Products (Base 100) | 153 |
Figure 68. Volume Contracted by Robot Advisor and Investment Simulator (Accumulated) - R$ billion | 154 |
Banco do Brasil S.A. | Investor Relations | 8 |
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Banco do Brasil SA published this content on 08 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 08 May 2024 22:09:15 UTC.
