PRESS RELEASE | 3 |
PERFORMANCE ANALISYS | 9 |
MANAGEMENT REPORT | 26 |
FINANCIAL STATEMENTS | 35 |
BALANCE SHEETS | 35 |
INCOME STATEMENT | 36 |
STATEMENT OF COMPREHENSIVE INCOME | 37 |
STATEMENT OF CHANGES IN SHAREOLDERS' EQUITY | 38 |
CASH FLOW STATEMENTS | 39 |
STATEMENT OF ADDED VALUE | 40 |
NOTES TO THE FINANCIAL STATEMENTS | 41 |
NOTE 01 - OPERATIONS | 41 |
NOTE 02 - PRESENTATION OF INTERIM FINANCIAL STATEMENTS | 41 |
NOTE 03 - SIGNIFICANT ACCOUNTING POLICIES | 42 |
NOTE 04 - CASH AND CASH EQUIVALENTS | 48 |
NOTE 05 - INTERBANK INVESTMENTS | 49 |
NOTE 06 - COMPULSORY DEPOSITS OF CENTRAL BANK OF BRAZIL | 49 |
NOTE 07 - PORTFOLIO OF SECURITIES | 49 |
NOTE 08 - DERIVATIVE FINANCIAL INSTRUMENTS | 52 |
NOTE 09 - LOANS, LEASES AND OTHER CONTRACTS WITH LENDIND CHARACTERISTICS | 54 |
NOTE 10 - OTHER FINANCIAL INSTRUMENTS | 58 |
NOTE 11 - DEFERRED TAXES | 59 |
NOTE 12 - OTHER ASSETS | 60 |
NOTE 13 - INVESTMENTS IN ASSOCIATES AND SUBSIDIARIES AND GOODWILL | 60 |
NOTE 14 - PROPERTY AND EQUIPMENT | 61 |
NOTE 15 - INTANGIBLE ASSETS | 62 |
NOTE 16 -FUNDING | 63 |
NOTE 17 - BORROWINGS AND ONLENDINGS | 64 |
NOTE 18 - OTHER FINANCIAL LIABILITIES | 64 |
NOTE 19 - PROVISIONS, CONTINGENT ASSETS AND CONTINGENT LIABILITIES | 64 |
NOTE 20 - OTHER LIABILITIES | 67 |
NOTE 21 - EQUITY | 68 |
NOTE 22 - OTHER OPERATING INCOME | 69 |
NOTE 23 - OTHER OPERATING EXPENSES | 70 |
NOTE 24 - INCOME TAX AND SOCIAL CONTRIBUTION | 72 |
NOTE 25 - EARNING PER SHARING | 72 |
NOTE 26 - COMMITMENTS, GUARANTEES AND OTHER | 72 |
NOTE 27 -POST-EMPLYMENT LONG-TERMBENEFIT OBLIGATIONS TO EMPLOYEES | 73 |
NOTE 28 - CORPORATE RISKS AND CAPITAL MANAGEMENT | 86 |
NOTE 29 - TRANSACTIONS WITH RELATED PARTIES | 95 |
NOTE 30 - OTHER INFORMATION | 98 |
NOTE 31 - SUBSEQUENT EVENT | 100 |
1
March 2024
PRESS RELEASE
We summarize below Banrisul's performance in the first quarter of 2024.
Business Scenario
In 1Q24, the economic environment in Brazil has shown more heated data on economic activity and the labor market than expected. However, there is still a consensus expectation that the basic interest rate (Selic) will be reduced to close to 9% p.a. still in 2024. In the State of Rio Grande do Sul, economic activity grew by 1.7% in 2023 over 2022, accounting for 5.90% of the Brazilian GDP, with smaller growth than that noted in the country as a whole. The estimate for the State GDP should reflect an external environment still favorable throughout the year, with more significant growth in the agricultural sector and consequently in the metric for monitoring the State's activity.
To retain and attract corporate clients, contributing to the development and growth of the State of Rio Grande do Sul, we are developing new credit products for the business segment, including the Contract for Opening a Revolving Credit Limit with Real Estate Guarantee, Revolving and Recurring Business Credit Limit, and Digital Discount. Improvements have been made to products in the individual client segment, aiming at agility and risk reduction.
3
March 2024
Economic and Financial Indicators
Main Income Statement Accounts - R$ million | 1Q2024 | 4Q2023 | 1Q2023 | 1Q2024/ | 1Q2024/ |
1Q2023 | 4Q2023 | ||||
Financial Margin | 1,536.3 | 1,476.6 | 1,250.2 | 22.9% | 4.0% |
Expenses with Allowance for Loan Losses | (407.0) | (216.8) | (284.9) | 42.8% | 87.7% |
Income from Services | 579.0 | 604.0 | 521.6 | 11.0% | -4.1% |
Administrative Expenses | (1,055.1) | (1,070.3) | (1,000.6) | 5.4% | -1.4% |
Civil, Tax, and Labor Provisions | (121.7) | (133.1) | (119.1) | 2.1% | -8.6% |
Other Operating Income / (Expenses) | (119.4) | (33.0) | (10.6) | 1,028.5% | 262.3% |
Net Income | 187.6 | 304.0 | 213.1 | -12.0% | -38.3% |
Main Balance Sheet Accounts - R$ million | Mar 2024 | Dec 2023 | Mar 2023 | Mar 2024/ | Mar 2024/ |
Mar 2023 | Dec 2023 | ||||
Total Assets | 129,228.7 | 125,063.7 | 113,569.8 | 13.8% | 3.3% |
Marketable Securities (1) | 35,422.3 | 33,567.9 | 30,474.3 | 16.2% | 5.5% |
Total Loan Portfolio | 53,861.7 | 53,669.3 | 50,087.7 | 7.5% | 0.4% |
Allowance for Loan Losses | 2,694.3 | 2,572.2 | 2,481.9 | 8.6% | 4.7% |
Past Due Loans > 90 Days | 1,287.0 | 1,047.1 | 868.7 | 48.1% | 22.9% |
Funds Raised and Managed | 97,353.3 | 95,938.9 | 87,812.4 | 10.9% | 1.5% |
Equity | 9,802.2 | 9,668.9 | 9,478.1 | 3.4% | 1.4% |
Prudential Conglomerate Reference Equity | 10,043.8 | 9,609.3 | 9,195.3 | 9.2% | 4.5% |
Key Stock Market Information - R$ Million | 1Q2024 | 4Q2023 | 1Q2023 | 1Q2024/ | 1Q2024/ |
1Q2023 | 4Q2023 | ||||
Interest on Equity / Dividends (2) | 50.0 | 74.9 | 150.0 | -66.7% | -33.3% |
Market Capitalization | 5,459.8 | 5,459.8 | 4,089.7 | 33.5% | 0.0% |
Book Value per Share | 23.97 | 23.64 | 23.18 | 3.4% | 1.4% |
Average Price per Share (R$) | 14.28 | 11.78 | 9.45 | 51.1% | 21.2% |
Earnings per Share (R$) | 0.46 | 0.74 | 0.52 | -12.0% | -38.3% |
Financial Indexes | 1Q2024 | 4Q2023 | 1Q2023 | ||
Annualized Adjusted ROAA (3) | 0.6% | 1.0% | 0.8% | ||
Annualized Adjusted ROAE (4) | 7.7% | 12.7% | 9.0% | ||
Adjusted Efficiency Ratio (5) | 57.3% | 58.4% | 62.9% | ||
Interest Margin on Interest-Earning Assets | 5.45% | 5.42% | 5.09% | ||
Delinquency Rate > 90 Days (6) | 2.39% | 1.95% | 1.73% | ||
Coverage Ratio 90 days (7) | 209.3% | 245.6% | 285.7% | ||
Provisioning Ratio (8) | 5.0% | 4.8% | 5.0% | ||
Basel Ratio (Prudential Conglomerate) | 17.6% | 16.8% | 17.1% | ||
Structural Indicators | Mar 2024 | Dec 2023 | Mar 2023 | ||
Branches | 492 | 492 | 495 | ||
Service Stations | 125 | 127 | 129 | ||
Electronic Service Stations | 403 | 413 | 430 | ||
Employees | 9,437 | 9,089 | 8,804 | ||
Economic Indicators | 1Q2024 | 4Q2023 | 1Q2023 | ||
Selic Rate (YTD) | 2.62% | 2.83% | 3.25% | ||
Exchange Rate Variation (%) | 1.69% | -3.32% | -2.63% | ||
IGP-M (General Market Price Index) | -0.92% | 1.84% | 0.20% | ||
IPCA (Extended Consumer Price Index) | 1.42% | 1.08% | 2.09% |
- Includes derivative financial instruments, interbank liquidity investments, and cash and cash equivalents and deduces repurchase obligations.
- Interest on equity and dividends paid credited and/or provisioned (before retention of income tax).
- Net income over average total assets.
- Net income over average equity.
- Personnel expenses + other administrative expenses / financial margin + income from services + (other operating income - other operating expenses - civil, tax, and labor expenses). Considers LTM income and expenses.
- Past due loans > 90 days / loan portfolio.
- Provisions for loan losses / past due loans > 90 days.
- Provision for loan losses / loan portfolio.
4
March 2024
Financial Highlights
Net income came to R$187.6 million in 1Q2024, down by 12.0% or R$25.6 million from the net income reported in 1Q2023, reflecting specially (i) the increase in financial margin, (ii) higher expenses from the provision for loan losses, (iii) higher income from services, (iv) higher administrative expenses, (v) the favorable result of other operating income, net of other operating expenses, and (vi) the subsequent tax effect and the Profit Sharing Program (PPR).
Compared to 4Q2023, net income decreased by 38.3% or R$116.5 million in 1Q2024, mainly due to (i) the increase in financial margin, (ii) higher expenses from the provision for loan losses, (iii) lower income from services, (iv) lower administrative expenses, (v) the unfavorable result in other operating income, net of other operating expenses, (vi) lower expenses with labor, tax, and civil provisions, and (vii) the subsequent tax effect and the PPR.
The financial margin reported in 1Q2024 totaled R$1,536.3 million, up by 22.9% or R$286.1 million over 1Q2023, mainly reflecting the increase in interest income, in a scenario with falling effective Selic Rate and higher loan volumes. Compared to 4Q2023, the financial margin reported in 1Q2024 increased by 4.0% or R$59.7 million, reflecting a more significant reduction in interest expenses compared to the decrease in interest income, in a scenario with falling effective Selic rate and relative stability in the volume of loan
transactions.
The annualized financial margin on interest-earning assets reported in 1Q2024 increased by 0.36 p.p. over 1Q2023 and by 0.03 p.p. over 4Q2023.
Expenses with provision for loan losses came to R$407.0 million in 1Q2024, up by 42.8% or R$122.1 million over 1Q2023, mainly due to the rolling over of the loan portfolio according to the credit rating levels and the increase in overdue loans, within a context of
higher volume of loan transactions. Compared to 4Q2023, the increase came to 87.7% or R$190.2 million, mainly reflecting the rolling over of the loan portfolio according to rating levels, the increase in overdue loans, the base effect of comparing the settlement of loan transactions that were 100% provisioned, and the revision of the rural credit provision policy in 4Q2023.
Income from services increased by 11.0% or R$57.4 million in 1Q2024 over 1Q2023, mainly reflecting the rise in credit card income and revenues from Banrisul Pagamentos. Comparing 1Q2024 and 4Q2023, these revenues fell by 4.1% or R$25.0 million, mainly reflecting the reduction in revenues from Banrisul Pagamentos and checking account services.
5
March 2024 | ||||||||
Breakdown of Income from Services - R$ Million | ||||||||
1Q2024 | 4Q2023 | 1Q2023 | 1Q2024/ | 1Q2024/ | ||||
1Q2023 | 4Q2023 | |||||||
Income from services - Banrisul Pagamentos | 202.4 | 220.3 | 190.6 | 6.2% | -8.1% | |||
Insurance Brokerage Commissions | 69.5 | 74.2 | 69.3 | 0.2% | -6.3% | |||
Checking Account Services | 152.2 | 158.1 | 154.6 | -1.6% | -3.7% | |||
Consortium Management | 36.4 | 35.1 | 30.2 | 20.4% | 3.5% | |||
Other Revenues (1) | 118.5 | 116.3 | 76.9 | 54.2% | 1.9% | |||
Total | 579.0 | 604.0 | 521.6 | 11.0% | -4.1% |
(1) Includes, mainly, collection services, credit card, fund management, collection, and custody services.
Administrative expenses, comprised of personnel and other administrative expenses, increased by 5.4% in 1Q2024 over the figure reported in 1Q2023 and fell by 1.4% in 1Q2024 over 4Q2023. Personnel expenses increased by 5.4% in 1Q2024 over 1Q2023, mainly led by the collective bargaining agreements and the increase in headcount; while other administrative expenses grew by 5.5% in the period, mainly influenced by higher expenses with data processing, advertising, promotions, and marketing, and amortization and depreciation expenses, mitigated by lower expenses with third-party services. Compared to 4Q2023, personnel expenses fell by 2.0% in 1Q2024, reflecting the effect of the vacation period and hiring of new employees. Other administrative expenses remained virtually flat from 4Q2023.
Breakdown of Administrative Expenses - R$ million
1Q2024 | 4Q2023 | 1Q2023 | 1Q2024/ | 1Q2024/ | |
1Q2023 | 4Q2023 | ||||
Personnel Expenses | 546.9 | 558.4 | 518.9 | 5.4% | -2.0% |
Other Administrative Expenses | 508.2 | 512.0 | 481.8 | 5.5% | -0.7% |
Amortization and Depreciation | 76.3 | 72.5 | 65.8 | 15.9% | 5.2% |
Water, Electricity, and Gas | 9.1 | 6.6 | 9.9 | -7.4% | 37.8% |
Rentals and Condominiums | 38.8 | 40.8 | 39.8 | -2.5% | -4.9% |
Data Processing | 57.9 | 49.3 | 40.6 | 42.7% | 17.5% |
Advertising, Promotions and Marketing | 44.8 | 37.6 | 32.4 | 38.3% | 19.1% |
Third-Party Services | 127.6 | 134.1 | 141.4 | -9.8% | -4.9% |
Specialized Technical Services | 52.3 | 59.8 | 54.4 | -3.9% | -12.4% |
Surveillance, Security and Transp. Services - Values | 32.8 | 35.4 | 34.1 | -4.0% | -7.4% |
Other (1) | 68.6 | 75.9 | 63.4 | 8.4% | -9.6% |
Total | 1,055.1 | 1,070.3 | 1,000.6 | 5.4% | -1.4% |
(1) Includes, mainly, communications, materials, asset maintenance and preservation expenses, and services of the financial system.
The efficiency ratio reached 57.3% in the last 12 months through March 2024, compared to 62.9% in the last 12 months through March 2023, reflecting the 20.4% increase in financial margin, the 8.4% growth in income from services, the unfavorable performance of other operating expenses, net of other operating income, and the 23.5% decrease in expenses with civil, tax, and labor provisions, compared to the 4.9% increase in adjusted administrative expenses.
Operational Highlights
Total assets reached R$129,228.7 million in March 2024, up by 13.8% over March 2023, and by 3.3% over December 2023. The main components of assets and liabilities will be discussed below.
Treasury investments (marketable securities, derivative financial instruments, interbank liquidity investments, and cash and cash equivalents) totaled R$53,767.4 million in March 2024. Excluding repurchase agreements, treasury investments increased by R$4,948.0 million over March 2023, mainly reflecting an increase in deposits, bank notes, and the directing of resources to the loan portfolio; compared to December 2023, the increase was R$1,854.4 million, mainly reflecting the growth in deposits, bank notes, and financial and development funds, amid a stable loan portfolio.
Loan transactions reached R$53,861.7 million in March 2024, up by 7.5% or R$3,774.0 million from March 2023, mainly influenced by the expansion in rural and real estate loans. Compared to December 2023, loan transactions remained virtually flat.
6
March 2024
Statement of the Loan Portfolio - R$ million
Mar 2024 | Total Loan | Dec 2023 | Mar 2023 | Mar 2024/ | Mar 2024/ | |
(%) | Mar 2023 | Dec 2023 | ||||
Foreign Exchange | 1,061.3 | 2.0% | 886.2 | 1,171.3 | -9.4% | 19.8% |
Commercial | 34,498.2 | 64.0% | 34,832.8 | 34,568.1 | -0.2% | -1.0% |
Individuals | 25,904.2 | 48.1% | 26,127.2 | 25,734.7 | 0.7% | -0.9% |
Payroll-Deductible Loans (1) | 19,282.8 | 35.8% | 19,783.7 | 20,102.8 | -4.1% | -2.5% |
Others | 6,621.4 | 12.3% | 6,343.5 | 5,631.9 | 17.6% | 4.4% |
Corporate Clients | 8,594.1 | 16.0% | 8,705.6 | 8,833.4 | -2.7% | -1.3% |
Working Capital | 6,689.9 | 12.4% | 6,824.2 | 6,911.5 | -3.2% | -2.0% |
Others | 1,904.2 | 3.5% | 1,881.4 | 1,921.9 | -0.9% | 1.2% |
Long-Term Financing | 506.4 | 0.9% | 486.5 | 520.3 | -2.7% | 4.1% |
Real Estate | 6,069.0 | 11.3% | 5,961.4 | 5,246.5 | 15.7% | 1.8% |
Rural | 11,587.7 | 21.5% | 11,359.1 | 8,452.1 | 37.1% | 2.0% |
Others (2) | 139.1 | 0.3% | 143.4 | 129.4 | 7.5% | -3.0% |
Total | 53,861.7 | 100.0% | 53,669.3 | 50,087.7 | 7.5% | 0.4% |
- Includes credits linked to transactions acquired in assignments.
- Includes leasing and the public sector.
The 90-daydelinquency rate reached 2.39% in March 2024, up by 0.66 p.p. YoY and by 0.44 p.p. QoQ. The balance of loan operations overdue for more than 90 days increased by 48.1% in twelve months and by 22.9% in three months. The balance of provisions for loan losses increased by 8.6% over March 2023, reflecting the rolling over of the loan portfolio according to rating levels, the increase in overdue loans, and higher loan transactions. Compared to December 2023, the increase was 4.7%, reflecting the rolling over of the loan portfolio according to rating levels, the increase in overdue loans, the base effect of comparing the settlement of loan transactions that were 100% provisioned, and the revision of the rural credit provision policy in 4Q23.
Loan Quality Indicators (%)
Mar 2024 | Dec 2023 | Mar 2023 | |
Loan Portfolio Normal Risk / Total Loan Portfolio | 93.2% | 93.5% | 93.1% |
Loan Portfolio Risks 1 and 2 / Total Loan Portfolio | 6.8% | 6.5% | 6.9% |
Default Rate > 90 Days | 2.39% | 1.95% | 1.73% |
Coverage Ratio > 90 Days (1) | 209.3% | 245.6% | 285.7% |
Provisioning Ratio (2) | 5.0% | 4.8% | 5.0% |
- Provision for expected loan losses / past due loans > 90 days.
- Provision for expected loan losses / loan portfolio.
Funds raised and managed, consisting of deposits, proceeds from bank notes, subordinated debt, and managed third-party funds, totaled R$97,353.3 million in March 2024, up by R$9,540.9 million over March 2023. Compared to December 2023, the increase came to R$1,414.4 million, mainly influenced, in both periods, by higher deposits, proceeds from bank notes, and funds managed.
Funds Raised and Managed - R$ Million
Mar 2024 | Dec 2023 | Mar 2023 | Mar 2024/ | Mar 2024/ | |
Mar 2023 | Dec 2023 | ||||
Total Deposits | 71,875.3 | 71,131.1 | 66,759.6 | 7.7% | 1.0% |
Proceeds from Bank Notes (1) | 6,956.7 | 6,581.7 | 3,734.2 | 86.3% | 5.7% |
Subordinated Debt (2) | 1,491.1 | 1,450.7 | 1,145.6 | 30.2% | 2.8% |
Total Funds Raised | 80,323.1 | 79,163.5 | 71,639.4 | 12.1% | 1.5% |
Funds Managed | 17,030.2 | 16,775.3 | 16,173.0 | 5.3% | 1.5% |
Total Funds Raised and Managed | 97,353.3 | 95,938.9 | 87,812.4 | 10.9% | 1.5% |
- Bank notes, subordinated bank notes and real estate and agribusiness letters of credit.
- Refers to the subordinated foreign fundraising.
Equity reached R$9,802.2 million in March 2024, up by 3.4% or R$324.2 million over March 2023, mainly due to the recognition of results, payments of interest on equity, and accrued dividends, re-measuring of actuarial liabilities of post-employment benefits (CPC 33 (R1)), as well as the reclassifications of exchange rate variations with the write-offs of foreign investments. Compared to December 2023, Equity grew by 1.4% or R$133.3 million in March 2024, reflecting the recognition of results and payment of Interest on Equity.
7
March 2024
In terms of own taxes and contributions, Banrisul collected and provisioned R$265.8 million in 1Q2024. Withheld and transferred taxes, levied directly on financial intermediation and other payments, totaled R$267.3 million in the period.
Guidance
The outlook disclosed in the Guidance on December 31, 2023 is maintained, as shown below.
2024 | |
Banrisul's Outlook | Projected |
Total Loan Portfolio | 2% to 7% |
Financial Margin | 25% to 30% |
Expenses with the Provision for Loans/Loan Portfolio | 2.5% to 3.5% |
Administrative Expenses (1) | 6% to 10% |
(1) Administrative Expenses excluding fee commissions on banking correspondents.
Such information reflects the wishes and expectations of the Company's management. The words "anticipates", "wants", "expects", "plans", "predicts", "projects", "aims" and the like identify that they mainly involve known and unknown risks. Known risks include uncertainties not limited to the impact of price and product competitiveness, acceptance of products on the market, product transitions from the Company and its competitors, regulatory approval, currency fluctuations, changes in product mix, and other risks described in the Company's reports. This Guidance is up to date with current data, and Banrisul may or may not update it upon new and/or future events.
Porto Alegre, May 14, 2024.
8
Performance Analysis
March 2024
PERFORMANCE ANALYSIS
We present the Performance Analysis of Banco do Estado do Rio Grande do Sul S.A. for the first quarter of 2024.
Net Income
In 1Q2024, net income reached R$187.6 million, down by 12.0% or R$25.6 million from the net income reported in 1Q2023, mainly reflecting (i) the increase in financial margin, by R$286.1 million; (ii) the increase in expenses from the provision for loan losses, by R$122.1 million; (iii) higher service revenue, by R$57.4 million;
- higher administrative expenses, by R$54.5 million;
- an unfavorable result in other operating income, in the amount of R$108.9 million; (vi) the consequent tax effect and the Profit Sharing Program - PPR.
Compared to 4Q2023, net income declined by 38.3% or R$116.5 million in 1Q2024, mainly due to (i) an increase of R$59.7 million in financial margin, (ii) higher expenses with provision for loan losses (R$190.2 million), (iii) a decrease of R$25.0 million in income from services, (iv) a decline of R$15.2 million in administrative expenses, (v) the unfavorable result of R$86.5 million in other operating income, net of other operating expenses, (vi) lower expenses with labor, tax, and civil provisions (R$11.5 million), and (vii) the consequent tax effect and the PPR.
Analytical Financial Margin
The analytical financial margin presented was calculated based on the average balances of assets and liabilities, which were calculated based on the closing balances of the months making up the respective periods under analysis. The following table describes the income-producing assets and onerous liabilities, the corresponding amounts of income from financial intermediation on assets and financial intermediation expenses on liabilities, as well as the actual average rates. Income from loan transactions overdue for more than 60 days, regardless of their risk levels, is only recognized as such when it is effectively received. The average balances of short-term interbank investments and funds invested or raised in the interbank market correspond to the redemption amount, excluding income or expenses to be recognized that are equivalent to future periods. The average balance of deposits, open market funding, and obligations arising from loans and transfers include charges that are mandatory up to the reporting date of the Financial Statements, recognized on a pro rata basis. As for expenses linked to these accounts, those related to deposits include expenses resulting from contributions made to the Credit Guarantee Fund - FGC.
The margin on interest-earning assets increased by 0.09 p.p. compared to 1Q2024 and 1Q2023, reaching 1.36% in 1Q2024. The average interest-earning assets increased by 14.8% and onerous liabilities increased by 16.8%.
The exchange rate variation, especially due to loan transactions (foreign exchange and financing in foreign currency), derivative financial instruments, subordinated debt, international transfers, and the reduction in the Selic rate had an impact on the rates of interest-earning assets and onerous liabilities in the period. Besides the economy's basic interest rates on which financial transactions are referenced, the structure of assets and liabilities, as well as the agreed-upon terms and interest, are determining factors when calculating the margin in every reporting period.
As for the structure, among the interest-earning assets, we highlight: a) loan transactions, accounting for 44.2% of these assets, increased by 2.7 p.p. between 1Q2024 and 1Q2023; and b) securities transactions, accounting for 45.2% of these assets, fell by 2.6 p.p. in the period. As for onerous liabilities, we highlight the following: a) term deposits, accounting for 52.5% of these liabilities in 1Q2024, decreasing by 3.2 p.p. from
9
Performance Analysis
March 2024
1Q2023; b) open market funding, accounting for 17.6% of onerous liabilities, increasing by 3.7 p.p. in the period; and c) savings deposits, accounting for 10.8% of onerous liabilities, decreasing by 2.0 p.p. in the period; and d) proceeds from bank notes, accounting for 6.7% of onerous liabilities, rising by 2.7 p.p.
Analytical Financial Margin - R$ Million and %
1Q2024 | 1Q2023 | 2023 | 2022 | |||||||||
Average | Revenue | Average | Average | Revenue | Average | Average | Revenue | Average | Average Revenue | Average | ||
Balance | Expense | Rate | Balance | Expense | Rate | Balance | Expense | Rate | Balance Expense | Rate | ||
Interest-Earning Assets | 112,694.0 | 3,947.9 | 3.50% | 98,189.1 | 3,681.9 | 3.75% | 103,429.5 | 15,734.1 | 15.21% | 96,247.3 | 12,992.5 | 13.50% |
Loan Transactions (1) | 49,796.7 | 2,324.0 | 4.67% | 46,089.0 | 2,070.9 | 4.49% | 47,644.7 | 8,949.8 | 18.78% | 41,657.3 | 7,381.3 | 17.72% |
Marketable Securities (2) | 50,898.9 | 1,298.2 | 2.55% | 41,866.5 | 1,363.1 | 3.26% | 45,205.4 | 5,602.7 | 12.39% | 43,872.1 | 5,182.0 | 11.81% |
Derivative Financial Instruments (3) | (10.3) | 28.9 | -281.01% | (621.4) | (76.8) | 12.36% | (566.7) | (113.4) | 20.01% | 13.2 | (725.2) | 5,494.09% |
Compulsory Deposits | 10,979.0 | 281.2 | 2.56% | 9,858.3 | 307.5 | 3.12% | 10,124.6 | 1,223.5 | 12.08% | 9,514.8 | 1,075.5 | 11.30% |
Others | 1,029.7 | 15.5 | 1.51% | 996.6 | 17.3 | 1.74% | 1,021.5 | 71.5 | 7.00% | 1,190.0 | 78.9 | 6.63% |
Non-Interest-Earning Assets | 14,580.9 | - | - | 13,939.7 | - | - | 14,307.0 | - | - | 13,620.7 | - | - |
Total Assets | 127,274.9 | 3,947.9 | 3.10% 112,128.8 | 3,681.9 | 3.28% | 117,736.5 | 15,734.1 | 13.36% | 109,867.9 | 12,992.5 | 11.83% | |
Onerous Liabilities | 102,367.8 | (2,411.6) | 2.36% | 87,626.5 | (2,431.8) | 2.78% | 92,840.7 | (10,245.3) | 11.04% | 85,292.7 | (8,323.7) | 9.76% |
Interbank Deposits | 2,246.7 | (37.1) | 1.65% | 2,779.3 | (52.2) | 1.88% | 2,620.0 | (202.5) | 7.73% | 1,284.9 | (76.2) | 5.93% |
Savings Deposits | 11,045.6 | (176.7) | 1.60% | 11,189.5 | (220.5) | 1.97% | 11,144.2 | (840.5) | 7.54% | 11,494.7 | (854.6) | 7.43% |
Term Deposits | 53,715.5 | (1,220.6) | 2.27% | 48,842.2 | (1,380.9) | 2.83% | 50,166.3 | (5,478.1) | 10.92% | 48,258.8 | (5,042.0) | 10.45% |
Open Market Funding | 18,053.8 | (486.7) | 2.70% | 12,142.8 | (410.5) | 3.38% | 15,053.3 | (1,927.1) | 12.80% | 13,734.7 | (1,723.2) | 12.55% |
Proceeds from Bank Notes (4) | 6,878.3 | (172.3) | 2.51% | 3,486.0 | (107.7) | 3.09% | 4,439.7 | (511.7) | 11.53% | 2,348.2 | (266.8) | 11.36% |
Subordinated Debt | 1,470.8 | (87.8) | 5.97% | 1,137.6 | (24.8) | 2.18% | 1,163.0 | (375.3) | 32.27% | 1,713.5 | 447.7 | -26.12% |
Obligations arising from Domestic Loans and | ||||||||||||
Transfers | 2,135.0 | (30.7) | 1.44% | 2,558.9 | (35.1) | 1.37% | 2,384.3 | (133.9) | 5.61% | 1,747.1 | (82.4) | 4.72% |
Obligations arising from International Loans and | ||||||||||||
Transfers | 999.0 | (49.0) | 4.90% | 1,039.5 | (11.6) | 1.11% | 907.3 | (74.9) | 8.25% | 1,104.0 | (169.3) | 15.34% |
Financial and Development Funds | 5,823.1 | (150.7) | 2.59% | 4,450.8 | (188.4) | 4.23% | 4,962.8 | (701.5) | 14.13% | 3,606.8 | (556.7) | 15.44% |
Non-Onerous Liabilities | 15,166.3 | - | - | 15,018.0 | - | - | 15,375.6 | - | - | 15,494.9 | - | - |
Equity | 9,740.8 | - | - | 9,484.2 | - | - | 9,520.2 | - | - | 9,080.3 | - | - |
Liabilities and Equity | 127,274.9 | (2,411.6) | 1.89%112,128.8 | (2,431.8) | 2.17% | 117,736.5 | (10,245.3) | 8.70% | 109,867.9 | (8,323.7) | 7.58% | |
Spread | 1.21% | 1.11% | 4.66% | 4.25% | ||||||||
Financial Margin | 1,536.3 | 1.36% | 1,250.2 | 1.27% | 5,488.7 | 5.31% | 4,668.8 | 4.85% | ||||
Annualized Financial Margin | 5.45% | 5.09% |
- Includes advances on foreign exchange contracts, leasing operations, and other credits characterized as loans. The leasing operations are shown by the net present value of lease agreements.
- Includes short-term interbank investments.
- Includes swap positions and DI futures contracts.
- Includes bank notes, subordinated financial bills, real estate letters of credit, and agribusiness letters of credit.
Variations in interest income and expenses: volume and rates
The financial margin in 1Q2024, totaling R$1,536.3 million, grew by 22.9% or R$286.1 million over 1Q2023, mainly reflecting the increase in interest income. The growth in revenue is related to the increase in the average volume of interest-earning assets, especially in treasury investments and loan transactions, being offset by lower average rates, mainly for treasury investments, influenced by the lower effective Selic rate. The drop in expenses was chiefly related to the decline in the average rates of onerous liabilities, especially term deposits and financial and development funds, being impacted by the lower effective Selic rate, partly offset by the growth of the average volume of onerous liabilities, especially in the open fund market, term deposits, and bank notes.
Variations in volume and interest rates were calculated based on the changes in average balances in the period and the variations in average interest rates, including exchange rate variations on interest-earning assets and onerous liabilities. The interest rate variation was calculated by the interest rate fluctuation in the period multiplied by the average interest-earning assets or average onerous liabilities in the second period. The change in volume was calculated as the difference between the interest volume of the most recent period and the previous one.
The following table presents the allocation of variations in interest income and expenses by the change in average volume of interesting-earning assets and onerous liabilities and the variation in the average interest rate over these assets and liabilities, comparing (i) 1Q2024 vs. 1Q2023, and (ii) 2023 vs. 2022.
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BANRISUL - Banco do Estado do Rio Grande do Sul SA published this content on 14 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 15 May 2024 10:47:04 UTC.