Banco BTG Pactual S A : Dados Econômico-Financeiros

Earnings Release

First Quarter 2023

May 8, 2023

Net New Money

Total AuC

(R$)	(R$)
43bn	1.3tn
1Q 23	1Q 23
245bn LTM 1Q 23	23% y-o-y growth
Adjusted Net Income	Total Revenues
(R$)	(R$)
2.3bn	4.8bn
1Q 23	1Q 23
10% y-o-y growth	10% y-o-y growth
Credit and SME	Unsecured Funding
Portfolio (R$)	(R$)
143bn	178bn
29% y-o-y growth	15% y-o-y growth
SME: 15bn
Basel Ratio	ROAE Adj
15.5%	20.9%

1Q 23

1Q 23

Earnings Release

First Quarter 2023

Highlights

Banco BTG Pactual S.A. reported total revenues of R$4,802.8 million and adjusted net income of R$2,262.6 million for the quarter ended March 2023.

BTG Pactual's adjusted net income per unit and annualized adjusted return on average shareholders' equity ("Annualized Adj. ROAE") were R$0.59 and 20.9%, respectively, for the quarter.

As of March 31, 2023, total assets of BTG Pactual were R$470.4 billion, a 4.4% increase compared to December 31, 2022. Our BIS capital ratio was 15.5%.

Banco BTG Pactual Financial Summary and Key Performance Indicators

	Highlights and KPIs		Quarter		Year to Date
	(unaudited)
	(in R$ million, unless otherwise stated)	1Q 2022	4Q 2022	1Q 2023	3M 2022	3M 2023
	Total adjusted revenues	4,351	3,626	4,803	4,351	4,803
	Accounting net income	1,943	1,644	2,133	1,943	2,133
	Adjusted net income (1)	2,062	1,767	2,263	2,062	2,263
	Adjusted net income per unit (R$)	0.54	0.46	0.59	0.54	0.59
	Annualized ROAE	21.5%	16.7%	20.9%	21.5%	20.9%
	Adjusted cost to income ratio	39.0%	45.8%	39.3%	39.0%	39.3%
	Adjusted shareholder's equity	39,300	42,372	44,208
	Total Number of Shares (# in '000)	11,503,576	11,476,120	11,433,761
	Number of Units (# in '000)	3,834,525	3,825,373	3,811,254
	Book Value per unit (R$)	10.2	11.1	11.6
	BIS Capital Ratio	15.0%	15.1%	15.5%
	Total assets (in R$ Billion)	391.3	450.6	470.4
	Total of WuM and AuM	1,043.8	1,253.8	1,285.1

Note: Number of shares ex-treasury

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Earnings Release

First Quarter 2023

BTG Pactual Performance

Demonstrating once again the resilience and strength of our business, BTG Pactual is pleased to announce a strong quarter with record revenues and 20.9% annualized ROAE, amid challenging macroeconomic scenario. In light of the high interest rates environment, tougher credit market conditions and natural seasonality of a first quarter, we delivered record revenues of R$4.8 billion and posted R$43.2 billion of NNM. We were also able to further expand our funding base, increasing the proportion of retail to 30.8% with a fortress balance sheet highlighted by our robust capital ratios - BIS ratio ended the period at 15.5%. We expect to enhance our performance during the year as capital markets conditions improves.

The 1Q 2023 performance was robust, with record revenues in most business lines (32.4% higher than the previous quarter and 10.4% above 1Q 2022) and continuous AuM/WuM expansion, totaling R$1,285.1 billion of assets. Following our client base growth, revenues from Asset Management registered a 3.1% quarterly increase to R$442.6 million, even in a quarter that typically does not recognize performance fees; and in Wealth Management & Consumer Banking we registered seventeen quarters of consecutive revenue growth, with strong net inflows of R$ 30.7 billion.

As previously mentioned, despite the challenging credit and capital markets environment, we posted revenues of R$1,191.9 million in Corporate & SME Lending, 46.0% above last year, supported by higher spreads in premium counterparties and maintaining adequate provisioning levels. Investment Banking registered record M&A revenues and, as expected, ECM and DCM had weak performance due to low market activity, totaling R$260.2 million in the quarter.

Sales & Trading posted record revenues of R$ 1,485.3, a 31.0% quarterly growth driven by continued diversification and expansion of client activity and efficient VaR allocation. Finally, Principal Investments and Participations recorded revenues of R$53.7 million and losses of R$70.0 million, respectively. It's worth mentioning that Banco Pan's business model includes recurring sales of part of its credit portfolio. Recently, BTG Pactual decided to acquire part of this portfolio to diversify its credit exposure at attractive spreads. If Banco Pan sells these credits to the market, it recognizes a capital gain. However, when these credits are sold do BTG Pactual, this capital gain will be recognized during the portfolio's duration since BTG Pactual consolidates Banco Pan. If Banco Pan had completed the recent credit portfolio sales to the market on the same terms instead of selling to BTG Pactual, Q1 BTGP ROAE would have been 23.0% vs. 20.9%.

Operating expenses ended the quarter at R$2,122.2 million. The quarterly increase was mainly due to the salaries and benefits growth in connection with the annual year-end promotions process and salary adjustments. Our adjusted cost-to-income ratio finished the quarter at 39.3%, below historical average.

Accounting net income was R$2,133.2 million in 1Q 2023, 9.8% above 4Q 2022 and 29.7% up when compared to 1Q 2022. Shareholders' equity ended the period at R$44.2 billion, a 4.3% increase over the previous quarter, and a 12.5% y-o-y increase. Our liquidity coverage ratio ("LCR") was 174%, while the Basel ratio was 15.5%.

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Earnings Release

First Quarter 2023

As we continue to expand our ESG & Impact Investing agenda, we have recently launched our Chilean Venture Debt Fund II, focused on financing SMEs while promoting positive impact and contributing to the Sustainable Development Goals. During the quarter we have also obtained the Transaction Security and Customer Data Protection certification - ISO 27001, which corroborates our higher standards on the matter.

In April, we also released the (i) 2022 Annual Report which follows the GRI, SASB, TCFD, IIRC and WEF frameworks and it is audited by a third party and, (ii) 2022 Social Responsibility Report, which highlights our efforts in this front.

Finally, we are very proud to inform that the White House announced a $50 million debt investment in BTG Pactual's Reforestation strategy by the U.S. Development Finance Corporation, which will help mobilize $1 billion to support the restoration of nearly 300,000 hectares of degraded lands in Brazil, Uruguay and Chile.

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