Banco ABC Brasil S A : Dados Econômico-Financeiros

EARNINGS RELEASE

2nd Quarter of 2023

EARNINGS RELEASE

2nd Quarter of 2023

Earnings Release

HIGHLIGHTS

Aug 11, 2023

(before market opening)

Profitability

• Net Income reached R$201.9 million in the 2Q23 - an increase of 6.2% quarter-over-quarter and of 0.1% in relation to the same period of 2022.
• The Return on Average Equity (ROAE) was 15.1% in the quarter, an expansion of 63 basis points over the previous quarter.

Conference Call

Aug 14, 2023

English & Portuguese

10:00 AM (US EDT) / 11:00 AM (BRT)

Investor Relations

Sérgio Ricardo Borejo

Executive Vice President

Ricardo Moura

Director of IR, Proprietary M&A and Strategy

Credit Quality

• Loans Overdue More than 90 Days accounted for 1.2% of the loan portfolio, in line with the historical average.
• Excluding the effect of an isolated case in the C&IB segment, currently under Chapter 11, the ratio in the 2Q23 was 0.8% of the loan portfolio.

Margin with Clients and Net Interest Income

• ABC Brasil ended the 2Q23 with Margin with Clients reaching R$327.3 million, an increase of 7.5% over the same period of 2022 and a decrease of 5.2% over the previous quarter - as a result of the reduction in the Loan Portfolio and lower revenues from derivatives and FX, after a record in the previous quarter.
• In the last 12 months the Margin with Market and the Shareholders' Equity Remunerated at CDI expanded 21.3% and 28.4%, respectively, also contributing to a Net Interest Income 14.2% growth in the period.

Expenses Base

• After a strong investment cycle in 2022, in which ABC Brasil significantly increased its infrastructure and employee base, we entered a new phase of expense discipline, focusing on capturing operating leverage. In this sense, the bank reduced the growth speed of its Personnel, Other Administrative, and Profit-Sharing Expenses, which increased 2.6% quarter-over-quarter and 12.4% in relation to the same period of 2022.
• This reduced growth trend was even more evident when comparing the quarterly expense per employee, stable on a quarterly basis and with an increase of 1% year-over-year.

Phone: [phone]

E-mail: [e-mail]

Website: ir.abcbrasil.com.br

Cont.

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EARNINGS RELEASE

2nd Quarter of 2023

Earnings Release

HIGHLIGHTS (cont.)

Aug 11, 2023

(before market opening)

Conference Call Aug 14, 2023

Client Base Expansion

• In line with our diversification strategy, ABC Brasil continued to grow its corporate client base, with the addition of 185 new clients in the quarter and of 592 in the last 12 months - equivalent to an annual expansion of 14.8%.
• The quarterly growth was again led by the Middle segment (+151 clients), also complemented by the Corporate segment (+25). We believe that the expanding client base will continue to contribute to our future revenue growth.

English & Portuguese

Agri Project

10:00 AM (US EDT) / 11:00 AM (BRT)

Investor Relations

Sérgio Ricardo Borejo

Executive Vice President

Ricardo Moura

Director of IR, Proprietary M&A and Strategy

Phone: [phone]

E-mail: [e-mail]

Website: ir.abcbrasil.com.br

• We launched a working group dedicated to the agribusiness sector, consisting of a multidisciplinary team of professionals, including a dedicated proprietary sales force, aiming at expanding our presence in the sector, especially among medium-sized rural producers.
• This new initiative aims at offering a new service model developed specifically for the needs of Middle segment clients, including the expansion of the product portfolio and the use of new technologies in onboarding and credit approval processes. In addition, it leverages on ABC Brasil's accumulated knowledge in serving the agribusiness value chain over decades.

ESG

• Reiterating its commitment to transparency, ethics and responsibility, ABC Brasil released its second Sustainability Report, a document that describes the main initiatives and results related to social, environmental and corporate governance obtained throughout 2022. The Report adopts the internationally recognized standards of the Global Reporting Initiative (GRI) and incorporates indicators of the Sustainability Accounting Standards Board (SASB), in addition to being assured by an independent external assurance. In order to serve stakeholders in a broad and accessible way, a pocket version and an explanatory video of the report were prepared, with subtitles and Brazilian sign language.

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EARNINGS RELEASE

2nd Quarter of 2023

EXECUTIVE SUMMARY

We present below the financial information and indicators for Banco ABC Brasil in the 2Q23.

Key Indicators

Statements of Income (R$ million)	2Q23	1Q23	2Q23x1Q23	2Q22	2Q23x2Q22	1H23	1H22	1H23x1H22
Recurring/Published Net Income	201.9	190.0	6.2%	201.7	0.1%	391.9	384.8	1.8%
Managerial NII pre-Provisions		544.4	549.7	-1.0%	476.8	14.2%	1,094.1	924.3	18.4%
Managerial NII post-Provisions	1	473.6	444.9	6.4%	436.6	8.5%	918.6	857.7	7.1%
Shares (R$)		2Q23	1Q23	2Q23x1Q23	2Q22	2Q23x2Q22	1H23	1H22	1H23x1H22
	Jun/23	Mar/23	Chg 3M	Jun/22	Chg 12M	Jun/23	Jun/22	Chg 12M
NOSH ex-Treasury (million)		221.1	221.3		220.4		221.1	220.4
Recurring/Published Earnings per Share (EPS)	0.91	0.86	6.3%	0.91	-0.2%	1.77	1.75	1.5%
ABCB4 Quotation		19.07	16.83	13.3%	15.52	22.9%	19.07	15.52	22.9%
Market Capitalization (R$ million)	4,216.4	3,724.2	13.2%	3,421.4	23.2%	4,216.4	3,421.4	23.2%
Book Value per Share2		24.52	23.97	2.3%	22.28	10.0%	24.52	22.28	10.0%
Price / Book Value (P/BV)2		0.78	0.70	10.8%	0.70	11.7%	0.78	0.70	11.7%
IoC3 Declared (R$ million)		184.8	0.0	-	77.6	138.2%	184.8	146.5	26.2%
IoC per Share (R$)		0.84	0.00	-	0.35	137.5%	0.84	0.66	25.8%
Dividend Yield (%) - Annualized		8.8%	0.0%	-	9.1%	-3.4%	8.8%	8.6%	2.4%
Performance Ratios (%)		2Q23	1Q23	2Q23x1Q23	2Q22	2Q23x2Q22	1H23	1H22	1H23x1H22
	Jun/23	Mar/23	Chg 3M	Jun/22	Chg 12M	Jun/23	Jun/22	Chg 12M
NIM - Net Interest Margin (p.a.)		4.6%	4.7%	-0.1	4.5%	0.1	4.7%	4.4%	0.2
Recurring/Published ROAE (annualized)	15.1%	14.4%	0.6	16.6%	-1.6	14.8%	16.1%	-1.3
ROAA (annualized)		1.5%	1.4%	0.1	1.7%	-0.2	1.4%	1.6%	-0.2
Efficiency Ratio		40.1%	38.8%	1.2	38.8%	1.3	39.5%	38.6%	0.8
BIS Ratio		15.0%	14.8%	0.1	15.0%	0.0	15.0%	14.8%	0.1
Tier 1 Capital		12.9%	12.8%	0.1	13.1%	-0.2	12.9%	12.8%	0.1
Core Capital		11.7%	11.6%	0.1	11.8%	-0.2	11.7%	11.6%	0.1
Additional Capital		1.2%	1.2%	0.1	1.3%	-0.1	1.2%	1.2%	0.1
Coverage Ratio		288%	496%	-208.7	619%	-331.2	288%	496%	-208.7
Balance Sheet (R$ million)		Jun/23	Mar/23	Chg 3M	Jun/22	Chg 12M
Total Assets		54,931	54,155	1.4%	50,955	7.8%
Expanded Credit Portfolio		43,326	43,652	-0.7%	39,973	8.4%
Loans		23,493	24,063	-2.4%	24,330	-3.4%
Guarantees Issued		11,903	12,306	-3.3%	11,081	7.4%
Corporate Securities		7,930	7,284	8.9%	4,563	73.8%
Funding with third-party sources	40,514	38,681	4.7%	37,794	7.2%
Tier 1 Capital		5,689	5,645	0.8%	5,257	8.2%
Core Capital		5,143	5,120	0.4%	4,733	8.7%
Additional Capital		546	525	3.9%	523	4.2%
Tier 2 Capital		904	906	-0.2%	735	22.9%
Shareholders' Equity2		5,421	5,303	2.2%	4,912	10.4%
		jun/23	mar/23	Chg 3M	jun/22	Chg 12M
R$/USD		4.82	5.08	-5.1%	5.24	-8.0%
Corporate Clients4		4,580	4,395	4.2%	3,988	14.8%
Employees5		1,235	1,194	3.4%	1,111	11.2%

1. Consists of Managerial Net Interest Income after Loan Loss Provision (LLP) and Provision for the Devaluation of Securities (PDS) , added by Credit Recoveries.
2. Controlling Shareholders' Equity.
3. Interest on Capital.
4. Includes clients with exposure to credit and services.
5. Including Executive Directors, Employees and Interns.

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EARNINGS RELEASE

2nd Quarter of 2023

Managerial Income Statement

Managerial Income Statement (BRL million)	2Q23	1Q23	2Q23x1Q23	2Q22	2Q23x2Q22	1H23	1H22	1H23x1H22
Net Interest Income	544.4	549.7	-1.0%	476.8	14.2%	1,094.1	924.3	18.4%
Shareholders' Equity remunerated at CDI Rate	143.1	141.0	1.5%	111.4	28.4%	284.1	201.3	41.1%
Financial Margin with Clients	327.3	345.1	-5.2%	304.4	7.5%	672.4	592.1	13.6%
Financial Margin with Market	74.0	63.6	16.4%	61.0	21.3%	137.6	131.0	5.1%
Provision Expenses	1	(70.8)	(104.8)	-32.4%	(40.3)	75.7%	(175.5)	(66.6)	163.5%
Net Interest Income post-Provisions	473.6	444.9	6.4%	436.6	8.5%	918.6	857.7	7.1%
Service Fees		79.4	79.7	-0.4%	105.3	-24.6%	159.1	167.7	-5.2%
Guarantees Issued	39.4	42.8	-7.9%	44.4	-11.2%	82.3	84.2	-2.3%
Investment Banking	18.2	14.1	29.0%	44.1	-58.7%	32.4	51.6	-37.3%
Commercial Banking and Insurance Brokerage Fees	21.7	22.7	-4.7%	16.7	29.5%	44.4	31.8	39.5%
Personnel & Other Administrative Expenses	(169.4)	(166.2)	2.0%	(146.9)	15.4%	(335.6)	(279.6)	20.1%
Personnel Expenses	(109.8)	(108.6)	1.1%	(92.7)	18.4%	(218.4)	(181.4)	20.4%
Other Administrative Expenses	(59.7)	(57.6)	3.6%	(54.2)	10.1%	(117.2)	(98.2)	19.4%
Tax Expenses		(16.7)	(32.7)	-48.9%	(32.6)	-48.7%	(49.5)	(37.4)	32.2%
Other Operating Income/Expenses	(17.6)	0.9	-2006.0%	(11.8)	49.9%	(16.7)	(20.2)	-17.3%
Non Operating Income	0.1	0.4	-82.0%	6.0	-98.7%	0.5	(3.7)	-113.6%
Earnings before Tax and Profit Sharing	349.3	327.1	6.8%	356.6	-2.0%	676.3	684.5	-1.2%
Income Tax and Social Contribution	(80.5)	(72.9)	10.4%	(91.6)	-12.2%	(153.4)	(178.1)	-13.9%
Profit Sharing		(66.2)	(63.4)	4.3%	(62.8)	5.4%	(129.6)	(120.6)	7.4%
Minority Interest		(0.8)	(0.7)	16.1%	(0.5)	43.0%	(1.4)	(0.9)	49.5%
Recurring Net Income	201.9	190.0	6.2%	201.7	0.1%	391.9	384.8	1.8%

1 Includes: Loan Loss Provision (LLP), Provision for the Devaluation of Securities (PDS), and Credit Recoveries.

2Q23 - Accounting and Managerial Reconciliation Statement

		Managerial	Tax Effect of
(R$ million)	ACCOUNTING	Reclassifications	MANAGERIAL
Hedge (2)
		(1)
Net Interest Income	472.7	(16.9)	88.6	544.4
Provision Expenses	(68.9)	(1.9)	0.0	(70.8)
Net Interest Income post-Provisions	403.8	(18.8)	88.6	473.6
Service Fees	81.6	(2.3)	0.0	79.4
Personnel Expenses	(117.1)	7.4	0.0	(109.8)
Other Administrative Expenses	(74.9)	15.2	0.0	(59.7)
Tax Expenses	(23.6)	0.6	6.2	(16.7)
Other Operating Income (Expenses)	(22.8)	5.2	0.0	(17.6)
Operating Income	247.0	7.4	94.8	349.2
Non Operating Income	0.1			0.1
Earnings before Tax and Profit Sharing	247.1	7.4	94.8	349.3
Income Tax and Social Contribution	14.3	0.0	(94.8)	(80.5)
Profit Sharing	(58.8)	(7.4)	0.0	(66.2)
Minority Interest	(0.8)	0.0	0.0	(0.8)
Net Income	201.9	0.0	0.0	201.9

1. Reclassification of figures from "Personnel Expenses" (related to the Social Security portion of the variable compensation) to "Profit Sharing", from "Other Administrative Expenses" (expenses related to volume of revenues) to "Net Interest Income" and "Service Fees", from "Other Administrative Expenses" (related to expenses linked to recovery of credit and other charges) to "Other Operating (Income) Expenses", from "Net Interest Income" (related to Credit Recoveries and Provision for the Devaluation of Securities (PDS)) to "Provision Expenses", from "Service Fees" (related to credit structuring fees) to "Net Interest Income" and from "Other Operating Income (Expenses)" (related to the Energy Trading provisions) to "Provision Expenses".
2. Reclassification of the hedge tax effect from "Tax Expenses" and "Income Tax and Social Contribution" to "Net Interest Income".

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