Banco do Nordeste do Brasil S A : Financial Statements - Position 12.31.2021.pdf

FINANCIAL STATEMENTS

DECEMBER 2021

Position: 12.31.2021

ÍNDICE

SUMMARY	.........................................................................................	ERRO! INDICADOR NÃO DEFINIDO.
MANAGEMENT REPORT.....................................................................	ERRO! INDICADOR NÃO DEFINIDO.
FINANCIAL STATEMENTS BANK..........................................................	ERRO! INDICADOR NÃO DEFINIDO.
BALANCE SHEET...........................................................................................	ERRO! INDICADOR NÃO DEFINIDO.
INCOME STATEMENTS ................................................................................	ERRO! INDICADOR NÃO DEFINIDO.
STATEMENTS OF COMPREHENSIVE INCOME ..............................................	ERRO! INDICADOR NÃO DEFINIDO.
STATEMENTS OF CASH FLOWS ....................................................................	ERRO! INDICADOR NÃO DEFINIDO.
STATEMENTS OF CHANGES IN EQUITY ........................................................	ERRO! INDICADOR NÃO DEFINIDO.
STATEMENTS OF VALUE ADDED ..................................................................	ERRO! INDICADOR NÃO DEFINIDO.
NOTES TO THE INDIVIDUAL FINANCIAL STATEMENTS OF BANK .........	ERRO! INDICADOR NÃO DEFINIDO.
NOTE 1 - THE BANK AND ITS CHARACTERISTICS.....................................................	ERRO! INDICADOR NÃO DEFINIDO.
NOTE 2 - BASIS OF PREPARATION AND PRESENTATION OF INDIVIDUAL FINANCIAL STATEMENTS ....ERRO! INDICADOR NÃO
	DEFINIDO.
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES................................	ERRO! INDICADOR NÃO DEFINIDO.
NOTE 4 - SEGMENT REPORTING ........................................................................	ERRO! INDICADOR NÃO DEFINIDO.
NOTE 5 - CASH AND CASH EQUIVALENTS .............................................................	ERRO! INDICADOR NÃO DEFINIDO.
NOTE 6 - INTERBANK INVESTMENTS....................................................................	ERRO! INDICADOR NÃO DEFINIDO.
NOTE 7 - SECURITIES AND DERIVATIVE FINANCIAL INSTRUMENTS ..............................	ERRO! INDICADOR NÃO DEFINIDO.
NOTE 8 - INTERBANK ACCOUNTS - LINKED CREDITS ................................................	ERRO! INDICADOR NÃO DEFINIDO.
NOTE 9 - LOAN PORTFOLIO AND ALLOWANCE FOR EXPECTED LOAN LOSSES .................	ERRO! INDICADOR NÃO DEFINIDO.
NOTE 10	- OTHER CREDITS ...............................................................................	ERRO! INDICADOR NÃO DEFINIDO.
NOTE 11	- OTHERS ASSETS ...............................................................................	ERRO! INDICADOR NÃO DEFINIDO.
NOTE 12	- OTHER VALUES AND ASSETS ...............................................................	ERRO! INDICADOR NÃO DEFINIDO.
NOTE 13	- INVESTMENTS, PROPERTY AND EQUIPMENT AND INTANGIBLE ASSETS..........	ERRO! INDICADOR NÃO DEFINIDO.
NOTE 14	- DEPOSITS, OPEN MARKET FUNDING, FUNDS FROM ACCEPTANCE AND ISSUE OF SECURITIES, DEBT
	INSTRUMENTS ELIGIBLE TO CAPITAL AND SUBORDINATED DEBTS .............	ERRO! INDICADOR NÃO DEFINIDO.
NOTE 15	- BORROWINGS AND ONLENDING .........................................................	ERRO! INDICADOR NÃO DEFINIDO.
NOTE 16	- FUNDS FROM ACCEPTANCE AND ISSUE OF SECURITIES ..............................	ERRO! INDICADOR NÃO DEFINIDO.
NOTE 17	- OTHER LIABILITIES ...........................................................................	ERRO! INDICADOR NÃO DEFINIDO.
NOTE 18	- DEBT INSTRUMENTS ELIGIBLE TO CAPITAL (NOTE 30.G.II).......................	ERRO! INDICADOR NÃO DEFINIDO.
NOTE 19	- INCOME RECEIVED IN ADVANCE..........................................................	ERRO! INDICADOR NÃO DEFINIDO.
NOTE 20	- EQUITY ..........................................................................................	ERRO! INDICADOR NÃO DEFINIDO.
NOTE 21	- OTHER OPERATING INCOME/EXPENSES ...............................................	ERRO! INDICADOR NÃO DEFINIDO.
NOTE 22	- TAXES AND CONTRIBUTIONS...............................................................	ERRO! INDICADOR NÃO DEFINIDO.
NOTE 23	- PROVISIONS, CONTINGENT ASSETS, CONTINGENT LIABILITIES AND LEGAL OBLIGATIONS - TAX AND SOCIAL
	SECURITY......................................................................................	ERRO! INDICADOR NÃO DEFINIDO.
NOTE 24	- EMPLOYEE AND OFFICER COMPENSATION (IN REAIS)..............................	ERRO! INDICADOR NÃO DEFINIDO.
NOTE 25	- POST-EMPLOYMENT BENEFITS ..........................................................	ERRO! INDICADOR NÃO DEFINIDO.
NOTE 26	- PROFIT SHARING (PLR)....................................................................	ERRO! INDICADOR NÃO DEFINIDO.
NOTE 27	- FUNDO CONSTITUCIONAL DE FINANCIAMENTO DO NORDESTE (FNE).........	ERRO! INDICADOR NÃO DEFINIDO.
NOTE 28	- NORTHEAST DEVELOPMENT FUND (FDNE) ..........................................	ERRO! INDICADOR NÃO DEFINIDO.
NOTE 29	- WORKERS' ASSISTANCE FUND (FAT)...................................................	ERRO! INDICADOR NÃO DEFINIDO.
NOTE 30	- RISK MANAGEMENT AND BASEL INDEX ................................................	ERRO! INDICADOR NÃO DEFINIDO.
NOTE 31	- RELATED PARTIES ............................................................................	ERRO! INDICADOR NÃO DEFINIDO.
NOTE 32	- RECURRING AND NONRECURRING INCOME............................................	ERRO! INDICADOR NÃO DEFINIDO.
NOTE 33	- OTHER INFORMATION ......................................................................	ERRO! INDICADOR NÃO DEFINIDO.
INDEPENDENT AUDITOR'S REPORT ON FINANCIAL STATEMENTS ......	ERRO! INDICADOR NÃO DEFINIDO.
SUPERVISORY BOARD'S OPINION ......................................................	ERRO! INDICADOR NÃO DEFINIDO.
SUMMARY OF AND CONCLUSIONS ON THE AUDIT COMMITTEE REPORT	........... ERRO! INDICADOR NÃO
DEFINIDO.
FINANCIAL STATEMENTS FNE.............................................................	ERRO! INDICADOR NÃO DEFINIDO.
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BALANCE SHEET...........................................................................................	ERRO! INDICADOR NÃO DEFINIDO.
STATEMENTS OF CHANGES IN EQUITY ........................................................	ERRO! INDICADOR NÃO DEFINIDO.
INCOME STATEMENTS ................................................................................	ERRO! INDICADOR NÃO DEFINIDO.
STATEMENTS OF CASH FLOWS ....................................................................	ERRO! INDICADOR NÃO DEFINIDO.
NOTES TO THE INDIVIDUAL FINANCIAL STATEMENTS OF FNE............	ERRO! INDICADOR NÃO DEFINIDO.
NOTE 1 - HISTORY..........................................................................................	ERRO! INDICADOR NÃO DEFINIDO.
NOTE 2 - BASIS OF PREPARATION AND PRESENTATION OF INDIVIDUAL FINANCIAL STATEMENTS .....	ERRO! INDICADOR NÃO
DEFINIDO.
NOTE 3 - MANAGEMENT.................................................................................	ERRO! INDICADOR NÃO DEFINIDO.
NOTE 4 - SIGNIFICANT ACCOUNTING PRACTICES ...................................................	ERRO! INDICADOR NÃO DEFINIDO.
NOTE 5 - ONLENDING TO BANCO DO NORDESTE AND OTHER INSTITUTIONS ..............	ERRO! INDICADOR NÃO DEFINIDO.
NOTE 6 - FINANCING TRANSACTIONS, ONLENDING AND ALLOWANCE FOR LOAN LOSSES ERRO! INDICADOR NÃO DEFINIDO.
NOTE 7 - EQUITY ...........................................................................................	ERRO! INDICADOR NÃO DEFINIDO.
NOTE 8- REGISTRATION WITH THE FEDERAL GOVERNMENT INTEGRATED FINANCIAL MANAGEMENT SYSTEM (SIAFI)ERRO!
INDICADOR NÃO DEFINIDO.
NOTE 9 - SUPERVISORY AGENCIES .....................................................................	ERRO! INDICADOR NÃO DEFINIDO.
NOTE 10 - APPROVAL OF FINANCIAL STATEMENTS ................................................	ERRO! INDICADOR NÃO DEFINIDO.
INDEPENDENT AUDITOR'S REPORT ON SPECIAL-PURPOSE FINANCIAL STATEMENTS..	ERRO! INDICADOR
NÃO DEFINIDO.
STATEMENT OF INFORMATION OF A SOCIAL AND ENVIRONMENTAL NATURE - DINSA ..........	ERRO!
INDICADOR NÃO DEFINIDO.
LIMITED ASSURANCE REPORT BY THE INDEPENDENT AUDITORS ON THE STATEMENT OF
INFORMATION OF A SOCIAL AND ENVIRONMENTAL NATURE ...........	ERRO! INDICADOR NÃO DEFINIDO.
OFFICERS' REPRESENTATION ON THE FINANCIAL STATEMENTS .........	ERRO! INDICADOR NÃO DEFINIDO.
OFFICERS' REPRESENTATION ON THE INDEPENDENT AUDITOR'S REPORT	.......... ERRO! INDICADOR NÃO
DEFINIDO.
SIGNATORIES .....................................................................................	ERRO! INDICADOR NÃO DEFINIDO.

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MANAGEMENT REPORT 2021

MANAGEMENT REPORT

MANAGEMENT REPORT

A WORD FROM THE CEO

The year 2021 was marked by major challenges and deliveries. Our team was focused on fulfilling the institutional mission of "acting as the development bank of the Northeast Region". The figures we have achieved point to this, even in a year still heavily impacted by the health crisis. Therefore, we are grateful to each employee, partner and customer who was with us in the construction of these results.

Focusing on the preservation of lives, jobs and aiming to be "recognized for its ability to promote the well-being of families and the competitiveness of companies in the Region", Banco do Nordeste contracted in 2021 a total of five million credit operations that totaled R$41.8 billion of invested resources, an increase of 4.2% on 2020.

Such data meant a positive impact on people's lives, with an estimated generation and/or maintenance of 1.4 million jobs in the nine states of the Northeast, in addition to part of Minas Gerais and Espírito Santo states, as a result of the volume of global loans and financing granted by BNB in 2021. It is also estimated that the global loans contracted and their economic repercussions point to an increase of R$9.64 billion in the salary mass in the area of operation, R$5.5 billion in tax collection, R$59.97 billion in the Gross Value of Production and R$34 billion in Value Added to the Economy. This is the result we are most proud of: the real value of the development that we work on daily in practice.

Funds contracted from Fundo Constitucional de Financiamento do Nordeste (FNE), the Institution's main funding source, through which more than 651 thousand transactions were carried out in 2021, totaled R$25.9 billion, slightly higher than the amount contracted in the previous year.

Long-term financing, which encompass rural, manufacturing, agroindustry, infrastructure, trade and service investments, accounted for 67% of the funds taken out and amounted to R$28 billion and 655.3 thousand transactions - a growth of 5% and 0.3%, respectively, in the contracted amount and in the number of transactions. Short- term loans, intended mainly for urban microcredit (Crediamigo), among other products, reached R$13.8 billion, corresponding to an increase of 2.8% in relation to the previous year and representing 33% of the amount contracted in 2021.

Among the short-term loans taken out, the Crediamigo program stands out, accounting for 92.2% of the total volume, with a disbursement of R$12.7 billion applied in 4.2 million urban microcredit transactions that moved the economy of the Region, reflecting a growth of 4.7% in relation to 2020. At the year end, the Program had 2.4 million active customers, establishing itself as a leader in the segment with an impressive 50 million transactions contracted since its creation, reflecting the importance of Crediamigo for economic and social development. Knowing how transformative this performance is for so many micro-entrepreneurs is another reason of great pride for us.

In the countryside, the role of Agroamigo, our rural microcredit program, is also highly transformative. The year of 2021 ended with an invested amount of R$3.39 billion

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MANAGEMENT REPORT 2021

in a total of 589,700 transactions, a 16.89% increase on 2020. The Agroamigo Program portfolio reached 1.4 million active clients, of which 73% are in the semiarid region - a priority area of our development work.

Considering the priority geographic area, we are very proud to say that, in general, we provided R$16.1 billion in financing for projects located in the semiarid region, of which R$7.41 billion refers to infrastructure projects - a very significant fact to reduce regional inequalities and promote equal access to development opportunities.

Effective support for the micro and small business segment, which is one of our corporate priorities, was reflected in contracts totaling R$3.87 billion with MSEs in 27,400 transactions, above the target for the period. The volume reflects the efforts made by the Bank to prospect business in this segment and ensure assistance for micro and small entrepreneurs, who generate so much employment and income opportunities in our Region.

Banco do Nordeste also takes pride in being the major Agribusiness partner in our area of operation. BNB accounts for 55.7% of the credit support, with only 8.9% of the banking network. In 2021, we recorded a 23.45% growth in FNE contracts in the Rural sector compared to the previous year, a fact that reinforces the significance of Agriculture and Livestock for the economy of the Region and the Country. We are also the main financial agent of the National Family Farming Strengthening Program (Pronaf) in the Region, with an active portfolio of over R$10.88 billion, which corresponds to 1.9 million transactions.

In 2021, 17,647 financing transactions were contracted by the Bank in this segment, amounting to approximately R$675,8 million, 70.8% of which were allocated to financing in the semiarid region. An increase of 19.59% in the volume of funds invested was recorded in relation to 2021.

In 2021, we also worked hard to settle more than R$3.16 billion of non-performing loans that were recorded as loss and/or overdue for more than 60 days. This amount comprised 86,501 regularized FNE-sourced transactions and 5,589 regularized non- FNE-sourced transactions. Opportunities for renegotiations were intended for sectors impacted by the Covid-19 pandemic and for customers who were experiencing temporary difficulties in repayment, due to the persistence of adverse effects resulting from the health crisis on the economy.

Amidst this scenario, Banco do Nordeste has maintained the continuous improvement of its financial and social-environmental performance as a guideline, with daily action guided by the Environmental, Social and Governance (ESG) Agenda, remaining a profitable company that adds value to society.

Among the various activities, in the ESG context, carried out by the Bank, we highlight: financing granted to projects aimed at sustainability, strengthening and advances in the implementation of the Social and Environmental Responsibility Policy (PRSA) and the ESG Agenda institutionally, in addition to financial support to various social projects with funds from tax incentives.

The promotion of green credit is among our priorities. In 2021, through the aforementioned credit lines, R$6.9 billion were contracted, with around 12 thousand transactions carried out. We have guaranteed consistent support for the implementation of energy generation from renewable sources.

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