Banco BTG Pactual S A : 3Q22 Earning Release

Earnings Release

Third Quarter 2022

November 08, 2022

Net New Money

Total AuC

(R$)	(R$)
63bn	1.2tn
3Q 22	3Q 22
250bn LTM	25% y-o-y growth
Adjusted Net Income	Total Revenues
(R$)	(R$)
2.3bn	4.8bn
3Q 22	3Q 22
28% y-o-y growth	24% y-o-y growth
Corporate & SME	Unsecured Funding
Portfolio (R$)	(R$)
130bn	170bn
33% y-o-y growth	17% y-o-y growth
SME: 21bn
Basel Ratio	ROAE Adj
15.2%	22.0%
3Q 22	3Q 22

Earnings Release

Third Quarter 2022

Highlights

Banco BTG Pactual S.A. reported total revenues of R$4,756.4 million and adjusted net income of R$2,302.0 million for the quarter ended September 30th, 2022.

BTG Pactual's adjusted net income per unit and annualized adjusted return on average shareholders' equity ("Annualized ROAE") were R$0.60 and 22.0%, respectively, for the quarter.

As of September 30, 2022, total assets of BTG Pactual were R$439.9 billion, a 3.3% decrease compared to June 30, 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)	3Q 2021	2Q 2022	3Q 2022	9M 2021	9M 2022
	Total revenues	3,845	4,513	4,756	10,412	13,621
	Net income	1,743	2,067	2,188	4,598	6,198
	Adjusted Net income	1,794	2,175	2,302	4,711	6,539
	Adjusted Net income per unit (R$)	0.47	0.57	0.60	1.23	1.71
	Annualized ROAE	20.1%	21.6%	22.0%	20.0%	21.9%
	Adjusted cost to income ratio	40.2%	38.7%	38.1%	40.3%	38.6%
	Shareholders' equity	36,259	41,359	42,262
	Total Number of Shares (# in '000)	11,476,985	11,496,481	11,492,477
	Number of Units (# in '000)	3,825,662	3,832,160	3,830,826
	Book Value per unit (R$)	9.5	10.8	11.0
	BIS Capital Ratio	16.1%	15.2%	15.2%
	Total assets (in R$ Billion)	372.2	454.8	439.9
	Total of WuM and AuM	941.9	1,067.6	1,174.1

Note: Number of shares ex-treasury

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Earnings Release

Third Quarter 2022

BTG Pactual Performance

BTG Pactual is glad to report another astounding quarter with record revenues, profits, and bold return on equity. Our client franchises continue to drive strong topline growth and sustain a higher level of ROAE. This quarter, our Wealth under Management (WuM) surpassed the five hundred billion mark, doubling in size in less than two years, while our total client assets under management/administration reached the impressive mark of R$1.2 trillion and maintained robust levels of NNM of R$62.9 billion.

Total revenues reached R$4,756.4 million, 5.4% above 2Q22, our previous record, and 23.7% higher than the same period last year. While we grow topline at a fast pace, we also improve operational leverage, with quarterly adjusted cost-to-income ratio declining to 38.1%, below our historical average. BTG Pactual also had its best adjusted net income figure for a single quarter of R$2,302.0, a 5.8% and 28.3% q-o-q and y-o- y growth, respectively. Adjusted ROAE was 22.0% in 3Q22.

Notwithstanding the difficult market conditions during the quarter, we have posted solid quarterly revenue growth among all our business units: (i) Investment Banking reported the third largest quarterly revenue in our history, R$524.8 million, an 8.1% quarterly growth as a result of record contributions from both DCM and M&A, despite very weak market activity in ECM, and; (ii) Corporate & SME Lending posted record revenues of R$936.9 million, 6.8% above the previous quarter, as we continue to grow the portfolio with the same level of spreads and excellent asset quality; (iii) Sales & Trading delivered solid results once again with revenues reaching R$1,384.0 million, a q-o-q growth of 5.7%, as a consequence of steady growth of institutional client activity and continuously-high market volatility; (iv) Asset Management reported strong revenue generation of R$407.4 million as our managed funds' business grows especially in the Fixed Income segment, while NNM maintained a strong pace of R$35.9 billion; (v) Wealth Management & Consumer Banking delivered once again record revenues of R$655.4 million, 5.5% higher than the previous quarter, with solid NNM of R$27.0 billion. Lastly, Principal Investments and Participations posted solid results of R$41.4 million and R$99.7 million, respectively.

Operating expenses were R$2,020.1 million this quarter, 4.0% higher than 2Q22. Adjusted cost-to-income ratio improved this quarter and reached 38.1%, substantially below the 40.2% ratio of 3Q21. This quarter, higher bonus expenses - which are determined by revenue generation - accounted for most of the total operating expense growth. Salaries & benefits remained stable while administrative & other expenses grew quarterly by 2.5%.

Accounting net income reached a third consecutive quarterly record of R$2,187.7 million, 5.8% above the previous quarter and 25.5% higher than the same period last year. Shareholder's equity finished the period at R$42.3 billion - which considers the R$1.2 billion of interest on equity (JCP) we distributed, a 2.2% q-o- q increase and a 16.6% y-o-y increase. Our liquidity coverage ratio (LCR) ended the period at 373%, while the Basel ratio was 15.2%, demonstrating strong liquidity and capital levels.

In 3Q 2022 we were named as Bank of the Year Americas and Brazil 2022 by The Banker and also named as Best Bank for SMEs in Brazil, Latin America and globally by Global Finance. These awards motivate us to relentlessly pursue the best customer service, and we thank our clients for such important recognitions.

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Earnings Release

Third Quarter 2022

As for our ESG accomplishments, this quarter we have structured and distributed two green-labeled debt issuances for clients, totaling US$495 million in volume, adding up to US$2.5 billion of total volume in 2022. Our Sustainable Financing Program (Programa de Captação Sustentável) reached R$1.2 billion this quarter. Finally, BTG Pactual was the lead coordinator and pioneered the first blue bond offer in Brazil. This R$1.9 billion issuance was also the first issued in the sanitation sector globally. We remain at the forefront of innovation in sustainable finance markets.

ESG & Impact Investing | Main KPIs 3Q22

			Corporate & SME Lending Portfolio
US$			Socio-Environmental Categories
495mn	DCM Issuances
		Sustainable Debt	3%
			14%
R$	8.8bn	Eligible Portfolio		48%
	Corporate & SME Lending	35%
R$	7.6bn	Unsecured Funding
	Sustainable Issuances	Medium risk2	High risk2
			KYC1	Low risk2

Notes:

1. 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
2. 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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