Banco BTG Pactual S A : 2Q22 Earning Release

Earnings Release

Second Quarter 2022

August 09, 2022

Net New Money

Total AuC

(R$)	(R$)
71bn	1.07tn
2Q 22	2Q 22
275bn LTM	21% y-o-y growth
Adjusted Net Income	Total Revenues
(R$)	(R$)
2.2bn	4.5bn
2Q 22	2Q 22
27% y-o-y growth	20% y-o-y growth
Corporate & SME	Unsecured Funding
Portfolio (R$)	(R$)
118bn	165bn
36% y-o-y growth	29% y-o-y growth
SME: 20bn
Basel Ratio	ROAE Adj
15.2%	21.6%
2Q 22	2Q 22

Earnings Release

Second Quarter 2022

Highlights

Banco BTG Pactual S.A. reported total revenues of R$4,512.8 million and adjusted net income of R$2,175.3 million for the quarter ended June 2022.

BTG Pactual's adjusted net income per unit and annualized adjusted return on average shareholders' equity ("Annualized ROAE") were R$0.57 and 21.6%, respectively, for the quarter.

As of June 30, 2022, total assets of BTG Pactual were R$454.8 billion, a 16.2% increase compared to March 31, 2022. Our BIS capital ratio was 15.2%.

Banco BTG Pactual Financial Summary and Key Performance Indicators

	Highlights and KPIs		Quarter		Year to Date
	(unaudited)
	(in R$ million, unless otherwise stated)	2Q 2021	1Q 2022	2Q 2022	6M 2021	6M 2022
	Total revenues	3,771	4,351	4,513	6,567	8,864
	Net income	1,678	1,943	2,067	2,855	4,010
	Adjusted Net income	1,719	2,062	2,175	2,916	4,237
	Adjusted Net income per unit (R$)	0.45	0.54	0.57	0.76	1.11
	Annualized ROAE	21.0%	21.5%	21.6%	18.9%	21.5%
	Adjusted cost to income ratio	39.2%	39.0%	38.7%	40.3%	38.9%
	Shareholders' equity	35,041	39,300	41,359
	Total Number of Shares (# in '000)	11,476,985	11,503,576	11,496,481
	Number of Units (# in '000)	3,825,662	3,834,525	3,832,160
	Book Value per unit (R$)	9.2	10.2	10.8
	BIS Capital Ratio	17.3%	15.0%	15.2%
	Total assets (in R$ Billion)	335.2	391.3	454.8
	Total of WuM and AuM	880.3	1,043.8	1,067.6

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Earnings Release

Second Quarter 2022

BTG Pactual Performance

BTG Pactual is pleased to report another historic quarter, with outstanding revenue generation and profitability, and strong net inflows. Throughout the previous quarters, we have announced sequentially strong results led especially by the growth of our client franchises, this quarter was no different. As we continue to gain space in the upper income retail segment while maintaining our leadership status in wholesale, our revenue stream becomes even more consistent and diversified. In 2Q 2022, we posted once again record revenues and net income for a single quarter despite the volatile international and local macroeconomic scenario, which reinforces the resilience and consistency of our business.

The 2Q 2022 performance was especially strong in our fee-based business units: (i) Investment Banking reported revenues of R$485.3 million, a 38.3% q-o-q increase with growing contribution from DCM and M&A; (ii) Corporate & SME Lending posted record revenues of R$877.5 million, up 7.5% quarterly as our portfolio, with competitive spreads and adequate provisioning levels, continues to grow - from R$111.5 billion in the previous quarter to R$117.7 billion in 2Q 2022; (iii) Sales & Trading registered, once more, strong revenue generation of R$1,309.5 million with high activity from our institutional client base due to market volatility; (iv) Asset Management posted the strongest revenue generation in the past seven years, with growing management fees and some performance fees accruals. Total AuM surpassed the six hundred billion milestone, reaching R$605.1 billion in 2Q 2022 with net inflows of R$41.3 billion; (v) Wealth Management reported record revenues of R$621.5 million, with strong NNM levels that led our WuM to R$462.5 billion. Principal Investment and Participations continued to deliver solid results, with revenues of R$46.4 million and R$98.9 million, respectively.

Operating expenses reached R$1,943.1 million, flat when compared to 1Q 2022. Quarter-over-quarter, our adjusted cost-to-income ratio (which excludes goodwill amortization impacts) remained stable at 38.7% (compared to 39.0% on 1Q 2022), an efficient level given our continued technology investments and human capital growth. Adjusted cost-to-income ratio remains below our historical levels. Compensation ratio for 2Q 2022 was 21.6%, below the previous quarter.

Accounting net income reached a record R$2,067.2 million, 6.4% above 1Q 2022 and 23.2% higher than the same quarter last year. Shareholder's equity finished the period at R$41.4 billion, a quarterly and annual growth of 5.2% and 18.0%, respectively. Our liquidity coverage ratio ("LCR") was 228%, while the Basel ratio increased to 15.2%.

We are also glad to announce that, throughout this semester, we have received a record number of awards from the most prestigious local and international publishers. We won the most relevant categories of Institutional Investors 2022 rankings. Furthermore, Euromoney ranked us the Best Bank in the Emerging Markets, Latin America, and Brazil, while The Banker ranked us the #1 bank in Brazil for growth, profitability asset quality, leverage, and soundness. These awards recognize BTG Pactual as the leading service provider in Brazil and Latin America across different business units.

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Earnings Release

Second Quarter 2022

This quarter, we focused on delivering an even more robust ESG agenda. We have structured and distributed five green-labeled debt issuances for our clients, totaling US$1.1 billion in volume. Our Sustainable Financing Program (Programa de Captação Sustentável), the first initiative of its kind in Latin America, continues to grow: we raised R$1.9 billion of sustainable deposits from 33 partner companies on the second phase of the program, reaching R$3.5 billion issued since the beginning of the year. Furthermore, we have also launched an ESG Emerging Markets Bond Fund, dedicated to local sustainable finance issuances, such as green, social, sustainable and SLB bonds. Finally, this quarter BTG Pactual was, once more, recognized by Global Finance as reference on ESG in the region. The most recent awards include: (i) Outstanding Leadership in Sustainable Finance in Latin America, (ii) Outstanding Leadership in Green Bonds in Latin America, (iii) Outstanding Leadership in Sustainable Bonds in Latin America, and (iv) Sustainable Finance Leadership in Brazil.

ESG & Impact Investing | Main KPIs 2Q22

			Corporate & SME Lending Portfolio
US$			Socio-Environmental Categories
	1.1bn	DCM Issuances
		Sustainable Debt	6%
			11%
88.5%	Asset Management		55%
ESG Integration1	28%
R$	7.6bn	Unsecured Funding
	Sustainable Issuances	Medium risk3	High risk3
			KYC2	Low risk3

Notes:

1. Percentage of AuM compliant with thedefinition of ESG Integration formulated by the Principles for Responsible Investment (PRI)
2. Know Your Client (KYC) analysis is made with an automated tool which uses public databases to assess ESG risk. We use information published by the Brazilian Ministry of the Economy, IBAMA, and Brazilian courts
3. Transactions classified in high, medium, and low socioenvironmental risks are submitted to additional rigorous technical analysis related to compliance and socioenvironmental and climate aspects, good market practices and nineteen sectorial policies developed by BTG Pactual

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