Banco BTG Pactual S A : Date 04/12/2021 1Q21 Earnings Release

Earnings Release

First Quarter 2021

May 11, 2021

Net New Money

Total AuC

(R$)	(R$)
+76bn	767bn
1Q 21	1Q 21
+182bn LTM
Total Revenues	Adjusted Net Income
(R$)	(R$)
+84%	+52%
y-o-y	y-o-y
2.8bn in 1Q 21	1.2bn in 1Q 21
Credit and SME	Unsecured Funding
Portfolio (R$)	(R$)
80bn	+98%
+69% y-o-y	y-o-y
SME: 10.4bn	121bn in 1Q 21
Basel Ratio	ROAE Adj
17.7%	17%

1Q 21

1Q 21

Highlights

Banco BTG Pactual S.A. reported total revenues of R$2,795.8 million and adjusted net income of R$1,197.4 million for the quarter ended March 2021.

BTG Pactual's adjusted net income per unit and annualized adjusted return on average shareholders' equity ("Annualized ROAE") were R$1.28 and 16.8%, respectively, for the quarter.

As of March 31, 2020, total assets of BTG Pactual were R$279.8billion, a 14.2% increase when compared to December 31, 2020. Our BIS capital ratio was 17.7%.

Banco BTG Pactual Financial Summary and Key Performance Indicators

	Highlights and KPIs		Quarter
	(unaudited)
	(in R$ million, unless otherwise stated)	1Q 2020	4Q 2020	1Q 2021
	Total revenues	1,518	2,825	2,796
	Net income	768	1,229	1,176
	Adjusted Net income	789	1,258	1,197
	Adjusted Net income per unit (R$)	0.91	1.39	1.28
	Annualized ROAE	14.5%	19.1%	16.8%
	Cost to income ratio	42.9%	36.5%	42.9%
	Shareholders' equity	22,053	26,681	30,414
	Total Number of Shares (# in '000)	2,607,390	2,712,707	2,796,040
	Number of Units (# in '000)	869,130	904,236	932,013
	Book Value per unit (R$)	25.4	29.5	32.6
	BIS Capital Ratio	19.4%	16.7%	17.7%
	Total assets (in R$ Billion)	200.4	244.9	279.8
	Total of WuM and AuM	429.4	635.4	767.3

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BTG Pactual Performance

We continue to adopt all necessary measures to ensure the health and safety of our employees and our community, as Brazil experiences its worst phase of the Covid-19 pandemic. In this context, we have released our Social Responsibility Report where we provide more details of our ongoing initiatives. Alongside with the social agenda, we maintain our commitment to improve the transparency of our environmental & impact investing strategies. During the quarter, we have also released our first ESG research report ("Inside ESG") and our "Annual and Sustainability Report" of 2020. These reports are available in our website.

Following the strategy to expand further our revenues and distribution capabilities while keeping a robust balance sheet, we successfully concluded a follow-on offering of R$2.57 billion (27.8 million of units) on January 13,2021. As a result, we ended the quarter with a Basel ratio of 17.7% and very comfortable liquidity levels. Our annualized adjusted ROAE and adjusted net income were 16.8% and R$1,197.4 million, respectively.

We have reported revenues of R$2,795.8 million, which remained flat when compared to a very strong 4Q 2020 and increased 84.2% compared to the same period one year ago. Operating revenues (i.e. total revenues excluding interest and other, participations and principal investments) reached R$2,408.7 million, also flat compared to previous quarter, but increasing 86.1% when compared to 1Q20.

The 1Q 2021 performance was very strong across all our business units: (i) Investment Banking reported revenues of R$483.6 million, 6.0% below 4Q 2020 (the best quarter since our IPO) and over two times larger than 1Q 2020, maintaining a leading position in industry rankings; (ii) Corporate and SME Lending also posted very strong revenues of R$554.8 million, while we continued to grow our portfolio to R$80.4 billion, focusing on good asset quality in high grade credit, and rapid expansion of our SME business - which just passed the R$10 billion threshold in only two years; (iii) we had solid contribution as well from Sales & Trading, 7.9% above the previous quarter (and an increase of 78.2% compared to a weak 1Q20), with record contribution from client activities; (iv) Asset Management continues to deliver very strong inflows and growing management fees, with record net new money in a quarter, posted R$264.7 million in revenues, 24.3% below last quarter due to natural seasonality of performance fees accrued in the 4Q 2020, and (v) Wealth Management & Consumer Banking revenues were up 19.2% QoQ (and 73.5% compared to 1Q20), establishing record revenues in a single quarter of R$294.7 million, with WuM growing 22.8% during the quarter - also with record net inflows. In our non-core business units, Principal Investments and Participations reported solid performance, with revenues of R$238.4 million and R$115.9 million, respectively.

Our operating expenses were R$1,198.6 million in 1Q 2021 (a 16.2% increase when compared to 4Q 2020). The increase was mostly due to higher bonus following the strong operating performance, and higher salaries and benefits expenses, as we increased our headcount by 9%. Cost-to-income ratio was slightly above historical levels, reaching 42.9% for the 1Q 2021. Compensation ratio was 26.0% in the quarter.

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Our accounting net income was R$1,176.5 million in 1Q 2021, 4.3% down when compared to 4Q 2020 and 53.2%, up when compared to 1Q 2020. Shareholders' equity was R$30.4 billion, a 14.0% increase when compared to the previous quarter, considering R$2.57 billion of the proceeds from our follow on. Our liquidity coverage ratio ("LCR") was 238%.

Assets under management/custody achieved R$767.3 billion in the end of the quarter, leveraging our product distribution capacity. This is comprised of: AuM/AuA at R$449.9 billion, a 19.3% increase when compared to 4Q 2020, and WuM of R$317.4 billion, a 22.8% increase. Both businesses units combined are growing significantly and have established, for the second quarter in a role, a record NNM of R$75.9 billion.

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