Banco BTG Pactual S A : 1Q24 Earning Release

Earnings Release

First Quarter 2024

May 13, 2024

Net New Money

Total AuC

(R$)	(R$)
64bn	1.6tn
1Q 24	1Q 24
225bn LTM 1Q 24	27% y-o-y growth
Adjusted Net Income	Total Revenues
(R$)	(R$)
2.9bn	5.9bn
1Q 24	1Q 24
28% y-o-y growth	23% y-o-y growth
Credit and SME	Unsecured Funding
Portfolio (R$)	(R$)
182bn	225bn
27% y-o-y growth	26% y-o-y growth
SME: 22bn
Basel Ratio	ROAE Adj
16.4%	22.8%

1Q 24

1Q 24

Earnings Release

First Quarter 2024

Highlights

Banco BTG Pactual S.A. reported total revenues of R$5,891.5 million and adjusted net income of R$2,889.4 million for the quarter ended March 2024.

BTG Pactual's adjusted net income per unit and annualized adjusted return on average shareholders' equity ("Annualized Adj. ROAE") were R$0.76 and 22.8%, respectively, for the quarter.

As of March 31, 2024, total assets of BTG Pactual were R$567.7 billion, a 15.1% increase compared to December 31, 2023. Our BIS capital ratio was 16.4%.

Banco BTG Pactual Financial Summary and Key Performance Indicators

	Highlights and KPIs		Quarter		Year to Date
	(unaudited)
	(in R$ million, unless otherwise stated)	1Q 2023	4Q 2023	1Q 2024	3M 2023	3M 2024
	Total adjusted revenues	4,803	5,653	5,891	4,803	5,891
	Accounting net income	2,133	2,728	2,774	2,133	2,774
	Adjusted net income (1)	2,263	2,847	2,889	2,263	2,889
	Adjusted net income per unit (R$)	0.59	0.75	0.76	0.59	0.76
	Annualized ROAE	20.9%	23.4%	22.8%	20.9%	22.8%
	Adjusted cost to income ratio	39.3%	36.0%	37.5%	39.3%	37.5%
	Adjusted shareholder's equity	44,208	49,382	51,962
	Total Number of Shares (# in '000)	11,433,761	11,433,761	11,433,761
	Number of Units (# in '000)	3,811,254	3,811,254	3,811,254
	Book Value per unit (R$)	11.6	13.0	13.6
	BIS Capital Ratio	15.5%	17.5%	16.4%
	Total assets (in R$ Billion)	470.4	493.2	567.7
	Total of WuM and AuM	1,285.1	1,569.0	1,636.0

Note: Number of shares ex-treasury

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Earnings Release

First Quarter 2024

BTG Pactual Performance

BTG Pactual is glad to announce, once again, record revenues and net income in 1Q 2024. The increase in revenues combined with our efficient costs control resulted in a 22.8% ROAE, despite the challenging macroeconomic conditions and the typical negative seasonality that often affects the first quarter of the year.

Besides 1Q 2024 all-time high revenues and net income of R$5,891.5 million and R$2,889.4 million, respectively, we posted strong NNM of R$63.8 billion even with natural first quarter seasonality mentioned above, as we continue to gain market share in both Asset Management and Wealth Management franchises, totaling R$1,636.0 billion of assets.

In April, the Bank issued through its Cayman Island's branch an Unsecured Senior Notes, in the total amount of US$500 million at a fixed coupon rate of 6.450% p.a with five-year tenor and semi-annually coupon payments. We were also able to further expand our funding base to R$224.9 billion with a fortress balance sheet highlighted by our robust capital ratios - BIS ratio ended the period at 16.4%, already considering that we've called our Subordinated Tier 2 Bond in February.

During the quarter, with revenues 4.2% higher than the previous quarter and 22.7% above 1Q 2023, we posted solid results in all our business lines, with record revenues in Asset, Wealth and Corporate Lending.

Asset Management posted revenues of R$574.4 million a 13.0% quarterly increase, even in a quarter that typically does not recognize performance fees.

Wealth Management & Personal Banking registered impressive twenty-one quarters of consecutive revenue growth reaching R$879.1 million, with strong net inflows of R$ 43.6 billion, of which R$15.9 billion was related to the Órama acquisition, approved by regulators in March, enlarging our distribution channel and our market share in the retail segment.

Corporate Lending & Business Banking also printed record revenues of R$1,436.2 million, 6.1% above the previous quarter. Credit book reached R$181.6 billion, with the SME book increasing 7.8% in the quarter backed by a complete digital banking platform and continuous expansion of our product offering.

Investment Banking registered outstanding performance of R$654.0 million, driven by record M&A revenues and strong DCM as market activity continues to gain momentum.

Sales & Trading posted solid revenues of R$1,371.3 million, driven mostly by client flows, despite challenging macro scenario locally and in the international markets. It's worth noting that we consolidated Principal Investments revenues within Sales & Trading due to the similar nature of the business and reduced relevance to total revenues. As a reference, 1Q 2024 principal Investments revenues consisted in R$13mn.

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Earnings Release

First Quarter 2024

Participations reported solid revenues of R$175.7 million coming from our investments, especially Banco PAN and Too Seguros. It's worth mentioning that in line with Banco Pan's strategy of retaining a larger portion of its credit origination, we reduced the portfolio's acquisition during the quarter.

Operating expenses ended the quarter at R$2,418.5 million. The quarterly increase was mainly due to (i) higher bonus provision, which are determined by revenue generation and, (ii) an increase in salaries and benefits in connection with the annual year-end promotions process and salary adjustments. Nevertheless, our adjusted cost-to-income ratio finished the quarter at 37.5%, below historical average.

Accounting net income was R$2,773.9 million in 1Q 2024, up 1.7% and 30.0% on a quarterly and annual basis respectively. Shareholders' equity ended the period at R$52.0 billion, a 5.2% increase over the previous quarter, and a 17.5% y-o-y increase. Our liquidity coverage ratio ("LCR") was 166.5%, while the Basel ratio ended at 16.4%.

Aligned with our commitment to sustainable development, for the fourth consecutive year, BTG Pactual was recognized by the Sustainable Finance Awards, from Global Finance, as Best Bank for Sustainable Finance in Latin America, Best Bank for Sustaining Communities, Best Bank for Sustainable Financing in Emerging Markets and Best Bank for Sustainable Finance in Brazil. In addition, in 1Q 2024, we contributed to the structuring and distribution of US$ 1.7 billion in green and blue bonds and increased our funding base through sustainable finance instruments reaching an amount of R$ 7.7 billion.

4

Earnings Release

First Quarter 2024

Adjusted Net Income and ROAE (unaudited)

	Adjusted Net Income and ROAE	1Q 2024	Non Recurring	1Q 2024
	Items &
	(unaudited)	Accounting	Adjusted
	Goodwill
	Investment Banking	654.0		654.0
	Corporate Lending & Business Banking	1,436.2		1,436.2
	Sales and Trading(1)	1,371.3		1,371.3
	Asset Management	574.4		574.4
	Wealth Management & Personal Banking	879.1		879.1
	Participations	175.7		175.7
	Interest and Other	800.7		800.7
	Total revenues	5,891.5	-	5,891.5
	Bonus	(635.3)		(635.3)
	Salaries and benefits	(614.9)		(614.9)
	Administrative and other	(653.4)		(653.4)
	Goodwill amortization	(210.1)	210.1	-
	Tax charges, other than income tax	(304.9)		(304.9)
	Total operating expenses	(2,418.5)	210.1	(2,208.4)
	Income before taxes	3,473.0	210.1	3,683.1
	Income tax and social contribution	(699.1)	(94.5)	(793.6)
	Net Income	2,773.9	115.6	2,889.4
	Annualized ROAE	21.9%		22.8%

Notes: Results excluding non-recurring items and goodwill provide a more meaningful information of the underlying profitability of our businesses.

(1) Includes Principal Investments

Non-Recurring Items & Goodwill

Goodwill: mainly attributable to some of our most recent acquisitions, such as Banco Pan, Necton, BTG Pactual Advisors, Fator, Empiricus and Órama Investimentos.

Income tax and social contribution: due to goodwill amortization

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Earnings Release

First Quarter 2024

Consolidated Revenues

1Q 2024 was marked by all-time high revenues of R$5,891.5 million, a 22.7% y-o-y growth and 4.2% quarterly increase. Despite the usual seasonality of the first quarter and the challenging environment during the period, our client franchise continued to grow in a strong pace, and we posted record revenues in Corporate Lending & Business Banking, Wealth and Asset Management.

	Revenues (unaudited)				Quarter				1Q 2024 % change to		Year to Date		3M 2024 %
									change to
	(in R$ million, unless otherwise stated)		1Q 2023		4Q 2023		1Q 2024		1Q 2023		4Q 2023		3M 2023		3M 2024		3M 2023
	Investment Banking	260	464	654	151%	41%	260	654	151%
	Corporate Lending & Business Banking	1,192	1,353	1,436	20%	6%	1,192	1,436	20%
	Sales and Trading(1)	1,539	1,524	1,371	-11%	-10%	1,539	1,371	-11%
	Asset Management	443	509	574	30%	13%	443	574	30%
	Wealth Management & Personal Banking	694	862	879	27%	2%	694	879	27%
	Participations	(70)	50	176		n.a.	255%	(70)	176		n.a.
	Interest & Others	745	893	801	7%	-10%	745	801	7%
	Total revenues		4,803		5,653		5,891		23%		4%		4,803		5,891		23%

Note: (1) Includes Principal Investments, which represented revenues of R$13mn in the quarter.

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Earnings Release

First Quarter 2024

Investment Banking

The tables below include details related to announced transactions in which BTG Pactual participated:

	BTG Pactual Announced Transactions			Number of Transactions(1),(3)		Value	(2),(3)
	(unaudited)
							(US$ mln)
				1Q 2023	4Q 2023	1Q 2024	1Q 2023	4Q 2023	1Q 2024
	Financial Advisory (M&A)(4)	81		10	21	14	1,625	4,646	751
	Equity Underwriting (ECM)	84		3	3	6	330		227	279
	Debt Underwriting (DCM)	87		13	49	22	1,293	3,276	2,199
	BTG Pactual Announced Transactions				Number of Transactions(1),(		Value	(2),(3)
	(unaudited)
								(US$ mln)
			3M 2013	3M 2014	3M 2015	3M 2023	3M 2024	3M 2023	3M 2024
	Financial Advisory (M&A)(4)	81	8	12	5	10	14	1,625	751
	Equity Underwriting (ECM)	84	5	4	1	3	6		330	279
	Debt Underwriting (DCM)	87	18	6	8	13	22	1,293	2,199

Source: Dealogic for ECM, M&A and International Brazilian DCM and ANBIMA for Local DCM

Notes:

1. Equity underwriting and debt underwriting represent closed transactions. Financial advisory represents announced M&A deals, which typically generate fees upon their subsequent closing.
2. Local DCM transactions were converted to U.S. Dollars using the end of quarter exchange rates reported by the Brazilian Central Bank.
3. Market data from previous quarters might vary in all products, due to potential inclusions and exclusions.
4. M&A market data for previous quarters may vary because: (i) deal inclusions might be delayed at any moment, (ii) canceled transactions will be withdrawn from the rankings, (iii) transaction value might be revised and (iv) transaction enterprise values might change due to debt inclusion, which usually occurs some weeks after the transaction is announced (mainly for non-listed targets).

Investment Banking 1Q 2024 market share highlights

M&A: #1 in number of transactions in both Brazil and LatAm

ECM: #2 in number of transactions in Brazil

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Earnings Release

First Quarter 2024

Revenues (in R$ million)

654

590

464

306

260

1Q 2023

2Q 2023

3Q 2023

4Q 2023

1Q 2024

1Q 2024 vs. 4Q 2023

Investment Banking posted strong revenues of R$654.0 million, up 41.0% compared to the previous quarter. The outstanding performance was mostly driven by record M&A revenues and strong performance in DCM as market volumes continue to gain momentum in both local and international markets.

Despite the weak contribution from ECM in the quarter, we maintained our leading position in the industry ranking.

1Q 2024 vs. 1Q 2023

Investment Banking revenues increased 151.4%% compared to 1Q 2023, when we delivered R$260.2 million. During 1Q 2023 we had a very restrictive capital markets environment with few concluded transactions in DCM, which explains the strong y-o-y revenue increase.

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Earnings Release

First Quarter 2024

Corporate Lending & Business Banking

Credit Portfolio grew 5.9% during the quarter reaching R$181.6 billion and increased 26.7% on a yearly basis. Even with the strong growth, we were able to maintain our high quality, with more than 80% of our exposure concentrated in AA/A ratings, while maintaining stable spreads.

SME book increased 7.8% in the quarter reaching R$22.1 billion compared to R$20.5 billion in 4Q 2023 as we continue to increase our product offering. We keep gaining market share in both SMEs and large corporations' segments.

Credit Portfolio (in R$ million)

										171.577		181.647
							160.582
			153.819							22.104
143.380							20.513
						17.660
		14.928
	14.605				142.922		151.064		159.543
		138.892
128.775
1Q 2023	2Q 2023	3Q 2023	4Q 2023	1Q 2024
					Corporate Credit		SME Lending

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