Banco Pan S A : Quarterly Reporting Document

INTERIM FINANCIAL STATEMENTS

3Q21

Management Report

3Q21

São Paulo, October 26, 2021 - In accordance with legal provisions, Banco PAN S.A. ("PAN", "Bank", "Banco PAN" or "Institution") and its subsidiaries are pleased to present the results for the quarter ended September 30, 2021, accompanied by the Independent Auditor's Report. The Bank's operating and financial information, unless otherwise indicated, is presented based on consolidated figures and in Reais, in accordance with Brazilian Corporate Law and with accounting practices adopted in Brazil.

MESSAGE TO THE STOCKHOLDERS,

Our vision is to be a leader for the digital financial inclusion of Brazilian families, democratizing banking access and offering a complete platform for financial products and services. We are fully focused on getting to know our customers in detail and offering solutions that make a difference to their lives and offering products to promote their successes including: Credit, Banking, Payment Methods, Insurance, Savings and Marketplace.

Our business strategy is supported by three pillars of action: growth, engagement and monetization. In 3Q21, we expanded the awareness of our brand, we signed a strategic partnership with Luciano Huck and we continue to invest in digital media and in the consolidation of the PAN brand. As a result of this strategy, we grew our base by 52 thousand new customers per business day, 43% of which captured through organic flows in September.

We closed 3Q21 with 15.2 million customers, 52% of which are active customers, with an increasingly complete offering of services and products to further strengthen engagement.

The merger of Mosaico announced in October is another step towards developing a complete platform, creating the largest consumer and banking ecosystem, driven by technology. This will drive a unique value proposition, involving the choice and acquisition of optimum products, with cashback over the best price and the best credit and payment conditions, to over 15.2 million PAN customers and over 22 million (in 2Q21) monthly users of Mosaico's platforms.

The quarter also featured great news. In July, we officially launched the Personal Loan with an FGTS guarantee, being the only bank to offer this through an app. In September, we included the Turbo PAN offering, a payment device, in the app and announced the acquisition of Mobiauto, the largest independent digital platform for the sale of vehicles in Brazil, with 4.6 million monthly visits and a 78% organic flow.

This is witness that our technological area is strategic to our continued growth. We have a team with over 800 professionals organized in 60+ squads with a fully integrated performance in the business areas. This permitted an increasingly assertive acceleration in the pace of product development and delivery. The high investment in technology and products, consistent with our customer-focused culture, permitted 214 million visits to the app and a total transacted volume of R$ 13.8 billion in the third quarter, growing 89% in the quarter and demonstrating the engagement of our base.

For our next steps, we plan an intense journey of launches in the coming months. In October we rolled-out the payroll-deductibles facility in the app in addition to car equity; in November we will launch the Buscapé card, offering cashback to our customers. Next, our app will incorporate our marketplace, insurance tab, pre-approved vehicle credit and the Saúde PAN, and will also be updated with a new version adding new features and improving the user experience.

Analyzing our results, we originated over R$ 7 billion in new credits in 3Q21 and reached R$ 33.3 billion in the credit portfolio, 90% of which with collateral.

Our drive to maintain a healthy growth in line with an efficient engagement strategy allows us to consistently monetize our operation. In 3Q21, we posted net profit of R$ 191 million and an accounting ROE of 13.6%, reflecting significant levels of investment.

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DIGITAL ACCOUNT

Our account increasingly presents products and services that enhance the real engagement of our customers. Offering credit was the main instrument for attracting, engaging and monetizing customers, now our strategy goes further. At the end of 3Q21, our active customers used an average of 2.4 products. We believe that the launch of new products in the app will increase this indicator within a short period, demonstrating even more engagement.

In addition to the number of new customers, in 3Q21, we maintained a strong pace in the issuance of new credit cards, reaching 708 thousand in the quarter, a 74% growth compared to the 408 thousand cards issued in 3Q20.

ORIGINATION OF CREDIT PORTFOLIO AND RETAIL

During 3Q21, PAN originated a monthly average of R$ 2,340 million in new credit operations, compared with R$ 2,429 million in 2Q21 and R$ 1,748 million in 3Q20, a decrease of 3.7% in the quarter due to the sharper decline in payroll-deductibles and an increase of 31.1% compared to 3Q20. The highlight of the quarter was the start of the EP FGTS operation, which presented exponential growth, totaling R$ 1.5 billion in new credits.

Payroll-deductibles operations totaled R$ 3,101 million in 3Q21, compared with R$ 4,660 million in 2Q21 and R$ 3,615 million in 3Q20.

For vehicles, the Bank originated R$ 2,325 million of new financing, down 8% in comparison to R$ 2,514 million in 2Q21 and up 36% in relation to R$ 1,715 million in 3Q20.

The Expanded Credit Portfolio totaled R$ 33,262 million at the end of 3Q21, an increase of 3% in relation to R$ 32,355 million at the end of 2Q21 and an increase of 31% compared to R$ 25,300 million in 3Q20.

In 3Q21, portfolio credits past due over 90 days were 5.8%, compared to 5.4% in 2Q21, in line with the historical average and the trend to change the portfolio mix. The indicator of credits past due between 15 and 90 days over the total portfolio in 3Q21 was 7.5%, in line with that presented in 1Q21 and 0.2 pp. higher than the 7.3% in 2Q20.

PAYROLL-DEDUCTIBLES AND FGTS

In July 2021, we began offering on our platform personal loans guaranteed by the FGTS. We were pioneers in offering 100% digital advance withdrawal of FGTS anniversary-withdrawal directly through the account's app. In addition to directly reaching our target audience, this modality provides the opportunity for customers with unfavorable credit scores to have access to personal loans without impacting default rates, increasing customer engagement and loyalty.

During 3Q21, we were witness to the demand for this product and its cross-selling power. Since its launch, we have already created a portfolio of R$ 1,473 million, with robust monthly demand.

In the payroll-deductibles market, our focus is on granting payroll-deductible loans and credit cards to government employees, retirees and pensioners of the National Institute of Social Security (INSS). Our strategy is to keep focused on federal agreements, as these are the largest market originators of INSS beneficiaries and pensioners.

In October 2021, we included payroll-deductibles in our app, making it easier to contract new credits. This new experience is in line with our strategy of offering a complete platform, increasingly engaging through our B2C audience.

Our operation, focused on federal agreements digitally formalized, remained strong in the quarter, even with a decline due to the peak in 2Q21, when there was an increase in the allowable margin. We originated R$ 2,805 million in 3Q21, compared to volumes of R$ 4,393 million in 2Q21 and R$ 3,274 million in 3Q20.

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For the payroll-deductible credit card product, we originated R$ 257 million in 3Q21, compared to R$ 267 million in 2Q21 and R$ 342 million in 3Q20, a decrease of 4% in the quarter and 25% in the 12 months comparison.

The payroll-deductible loan portfolio at the end of the quarter totaled R$ 11,530 million, compared to R$ 13,298 million in 2Q21 and R$ 11,204 million in 3Q20, a decrease of 13% in the quarter and an increase of 3% in the year. The payroll-deductible credit card portfolio at the end of the quarter totaled R$ 2,120 million, an increase of 1% when compared with the balance of R$ 2,089 million in the previous quarter and of 2% in relation to the balance of R$ 2,069 million in 3Q20.

VEHICLE FINANCING

In this segment, we focus on financing pre-owned light vehicles (mainly between four to eight years old) and new motorcycles.

In 3Q21, we acquired Mobiauto, the largest independent digital vehicle sales platform in Brazil. In addition to credit expertise, we believe that the acquisition of Mobiauto will bring an important instrument to leverage PAN's participation in the financing of light vehicles and motorcycles. The objective is to improve the customer experience and increase the engagement of partner retailers, expanding PAN's ecosystem through technology and contextualization of products and services

In 3Q21, the Bank originated R$ 2,331 million of new financing, including light vehicles and motorcycles, down 7% in comparison to R$ 2,514 million in 2Q21 and up 36% in relation to R$ 1,715 million in 3Q20.

The origination of light vehicles was R$ 1,986 million in 3Q21, a decrease of 8% compared to R$ 2,164 million originated in 2Q21 and an increase of 70% against R$ 1,169 million originated in 3Q20. In the motorcycles segment, we originated R$ 345 million in 3Q21, compared to R$ 350 million in 2Q21 and R$ 547 million in 3Q20, a decrease of 1% and 37%, respectively.

CREDIT CARDS

Leveraged by the growth of our digital account and in line with our strategy of diversifying customers and products, we continue developing the credit card segment and expanding our customer base.

Our credit card portfolio grew as our customers used installment payment and revolving credit instruments. At the end of 3Q21, the card portfolio totaled R$ 3,118 million, 19% and 119% higher when compared to R$ 2,622 million and R$ 1,422 million in 2Q21 and 3Q20, respectively.

We recently launched the cobranded Buscapé card, in a joint initiative with Mosaico. The new card will offer benefits such as an annual fee waiver, cashback on all purchases and the lowest price guarantee. Customers will also be able to monitor the price of the purchased item and, if they identify a lower price, can request a refund of the difference.

PERSONAL LOANS

Focused on the strategy of creating a complete platform for PAN customers, personal loans aims to complement the range of products that, in our view, engage and retain the end customer.

Personal loans are fundamental to the daily lives of customers, who at times need to supplement their cash flows, make specific investments and cover their daily needs.

We ended 3Q21 with a portfolio of R$ 359 million, 65% higher than the R$ 217 million in 2Q21 and 1,442% higher than the R$ 23 million in 3Q20.

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