3Q18 Investor Relations

Transcription

1 3Q18 Investor Relations 1

2 São Paulo, November 7, Banco Daycoval S.A. announces its results for the third quarter of 2018 (3Q18). Except where otherwise stated, the financial and operating information herein is presented on a consolidated basis and in Brazilian reais. Corporate Profile Diversified bank, specialized in the concession of credit for companies (small, medium and large) and the retail segment, with a significant presence in foreign currency exchange operations. Wide range of products and services. Credit Products, Foreign Exchange and Investments (has Online Platform) for Individuals and companies. 140 Distribution points 41 branches + 38 Daycred Stores (Payroll Loan) + 28 exchange bureaus +33 Daypag outlets (car licensing agents and fine financing). National Coverage Presence in 21 states + 1 overseas branch (Cayman Islands). 1,880 Employees (Sep/2018) Net Income of R$ million in 3Q18, 53.8% higher than 2Q18 and R$ million in 9M18, evolution of 24.1% over 9M17. ROAE of 23.6% p.a. in the quarter and 20.4% in 9 months and Net Financial Margin (NIM) of 12.0% p.a. in 3Q18. Expanded Loan Portfolio of R$ 17.5 billion, up 10.0% in the quarter and a 24.7% increase in the last 12 months. 3Q18 s Highlights The balance of the E-H portfolio closed 3Q18 at R$ million, an improvement of 12.7% compared to 2Q18. The balance of LLP* ended the 3Q18 at R$ million. The loan loss provision divided by the E-H Portfolio reached 107.9%. Loans overdue by more than 90 days/loan Portfolio - including installments falling due was 2.8% versus 3.8% in 3Q17. Basel III Ratio of 15.0%, with the minimum required at 8.625%, and Shareholders Equity of R$ 3,344.1 million. * Excludes the additional provision of R$ million. Key Figures (R$ mn) 3Q18 2Q18 Chg. % 3Q17 Chg. % 9M18 9M17 Chg. % Income from loans operations % % 2, , % Adjusted Gross Income from Financial Intermediation (1) % % 1, , % Recurring Net Income % % % Net Income % % % Shareholders Equity 3, , % 2, % 3, , % Total Assets 26, , % 23, % 26, , % Expanded Loan Portfolio ( 2 ) 17, , % 14, % 17, , % Loan Portfolio (3) 16, , % 13, % 16, , % Funding 17, , % 14, % 17, , % Net Interest Margin (NIM) (% p.a.) 12.0% 12.5% -0.5 p.p 11.2% 0.8 p.p 11.9% 11.0% 0.9 p.p Net Interest Margin (NIM-AR) (% p.a.) (3) 12.9% 13.8% -0.9 p.p 12.3% 0.6 p.p 13.0% 11.5% 1.5 p.p Return on Average Equity (ROAE) (% p.a.) 23.6% 15.7% 7.9 p.p 19.9% 3.7 p.p 20.4% 18.8% 1.6 p.p Recurring ROAE (%) 23.1% 25.2% -2.1 p.p 20.7% 2.4 p.p 23.4% 17.9% 5.4 p.p Efficiency Ratio (%) 30.2% 28.6% 1.6 p.p 33.0% -2.8 p.p 29.1% 32.5% -3.4 p.p BIS Index III (%) 15.0% 15.8% -0.8 p.p 15.9% -0.9 p.p 15.0% 15.9% -0.9 p.p (1) Includes exchange-rate variance on liability and foreign trading operations and income on the Receivables Purchase. (2) Includes Avals and Sureties (3) Includes exchange-rate variance on liability transactions, foreign trading, and excludes matched operations repurchase agreements tri-party repos outstanding. Conference Call 3Q18 November 8, 2018 Portuguese 10:00 a.m. (BRA) 7:00 a.m. (NY) Phone + 55 (11) / Code: Banco Daycoval Investor Relations Ricardo Gelbaum - DRI Erich Romani GRI Claudine Wrobel Analyst Contact: (11) / ri@bancodaycoval.com.br 2

3 Message from the Management The third quarter of 2018, as in the second, presented atypical events. First, there was still some impact of the truckers' strike on inflation and economic activity and, secondly, the level of uncertainty regarding the future rose sharply with the approach of the Brazilian presidential elections. Furthermore, the international scenario was notably troubled by a possible intensification of trade tensions and the rise of global interest rates with the reduction of ultraexpansionist monetary policies. The high level of domestic uncertainty emerging from the electoral process and the more adverse external scenario raised the risk perception and worsened internal financial conditions throughout the quarter. The dollar rose against the real at levels not seen since the beginning of 2016 and the possible inflationary impacts caused the Central Bank to harden its stated positions and suggest that it was ready to make imminent use of monetary policy tools. However, the phenomenon that motivated an increase in risk during the second quarter did not actually materialize. The source of the fear was the possibility that there would be no continuity of the necessary economic reforms during the next president's government, both because of the executive branch s lack of momentum as well as legislative difficulties to getting it done. In this sense, the victory of Jair Bolsonaro (PSL) in the presidential elections accompanied by the strong electoral showing of his party (PSL) reduces uncertainties for the coming years and has led to better financial conditions after the first voting round. This is because the economic proposals presented by the then candidate were aimed at solving latent problems of the Brazilian economy, especially the public accounts. For the future, despite the difficulties inherent in politics, the apparent impetus of the newly elected government and the more favorable legislative conditions substantially increase the possibility of approval of the necessary measures for the Brazilian economy s more vigorous and sustained growth. Inserted in this scenario, Banco Daycoval ended the third quarter of 2018 with Net Income of R$ million, 53.8% higher than in the previous quarter. This increase in the net income mainly was due to lower expenses with the loan loss provision, growth of the loan portfolio over the period and maintenance of margins. In the first nine months of the year, net income was R$ million, an increase of 49.1% over 9M17. In 3Q18, ROAE was 23.6% p.a. and NIM was 12.0% p.a. In 9M18, ROAE stood at 20.4% p.a. and NIM was 11.9% p.a.. The Expanded Loan Portfolio closed the quarter at R$ 17,548.3 million, an increase of 10.0% over 2Q18 and 24.7% over 9M17. With growth in working capital, receivables purchase, leasing and avals and sureties, it posted a 14.8% increase during the quarter and 38.7% up on 9M17. The Payroll Loan Portfolio remained stable while the Auto Portfolio rose 5.9% in relation to the previous quarter. Funding ended the quarter at R$ 17,302.2 million, up 0.6% compared to 2Q18 and with 16.1% growth over 3Q17, in line with the loan portfolio. The index of loans overdue for more than 90 days, including installments falling due, stood at 2.8%, improving 0.6 p.p. in relation to 2Q18 and rising of 1.0 p.p. in relation to 3Q17. The index of loans overdue by more than 14 days showed improvement for the second consecutive quarter and closed at 1.7%, a decrease of 1.1 p.p. in 3Q18 and 0.5 p.p. over 2Q17. The Balance of the Loan Loss Provision on the E-H Portfolio ended the quarter with a coverage of 107.9%. Despite the improvement in net income during the quarter, growth in the Loan Portfolio and reduction of the loan loss provision, we continue to cautiously observe the volatility of political issues and the external scenario. 3

4 Profitability Net Income of R$ million and ROAE of 20.4 % p.a. in 9M18 ROAE and ROAA (R$ mn) 3Q18 2Q18 Chg. % 3Q17 Chg. % 9M18 9M17 Chg. % Net Income (A) % % % Recurring Net Income (A1) % % % Average Shareholders' Equity (B) 3, , % 2, % 3, , % Average Assets (C) 26, , % 23, % 25, , % Return on Average Equity (ROAE) (% p.a) (A/B) 23.6% 15.7% 7.9 p.p 19.9% 3.7 p.p 20.4% 18.8% 1.6 p.p Recurring Return on Average Equity (ROAE) (% p.a.) (A1/B) 23.1% 25.2% -2.1 p.p 20.7% 2.4 p.p 23.4% 17.9% 5.4 p.p Return on Average Asset (ROAA) (% p.a.) (A/C) 2.9% 2.0% 0.9 p.p 2.5% 0.4 p.p 2.6% 2.3% 0.3 p.p Recurring ROAA (% p.a) (A/C) 2.9% 3.2% -0.3 p.p 2.6% 0.3 p.p 2.9% 2.2% 0.7 p.p Daycoval recorded Net Income of R$ million in 3Q18, an increase of 53.8% in relation to 2Q18 due to the lower provision for doubtful accounts in the quarter, portfolio growth and margin maintenance. At the end of 9M18 the net income was R$ million, increase of 24.1% over 9M17. In June 2018, a loan loss provision and for Guarantees Given in addition to the minimum required by current regulations was constituted, in the amount of R$ million, based on its own risk assessment methodology, supported by a credit survey. In this quarter, the balance was R$ million, an increase of R$ 17.4 million over 2Q18. Recurring Key Figures (R$ mn) 3Q18 2Q18 Chg. % 3Q17 Chg. % 9M18 9M17 Chg. % Net Income n.a n.a n.a. Additional provision (1) (10.4) (90.0) n.a. - n.a. (100.4) - n.a. Hedge/MTM R$ (mn) 9.5 (7.7) n.a. 1.4 n.a n.a. Hedge Interest rate (DI) R$ (mn) (0.2) 1.0 n.a. (2.4) n.a. (0.4) (5.8) n.a. Exchange Variation - Equivalence - Branch n.a. (4.8) n.a (3.3) n.a. Adjusted Net Income % % % Shareholders Equity 3, , % 2, % 3, , % Total Assets 26, , % 23, % 25, , % Adjusted ROAE (%) 23.1% 25.2% -2.2 p.p 20.7% 2.4 p.p 23.4% 17.9% 5.4 p.p Adjusted ROAA (%) 2.9% 3.2% -0.3 p.p 2.6% 0.3 p.p 3.0% 2.2% 0.8 p.p Adjusted Eficiency Ratio (%) 30.9% 28.1% 2.8 p.p 32.9% -2.0 p.p 29.1% 33.4% -4.3 p.p (*) In 3Q18 refers to the gross amount of R$ 14.6 million for credit operations and R$ 2.8 million for guarantees operations. In 2Q18 refers to the gross amount of R$ million for credit operations and R$ 6.7 million for guarantees operations. In 3Q18, the Recurring Net Income was R$ million, a 6.4% reduction over 2Q18, mainly impacted by the hedge of interest rates on credit operations in the amount of R$ 12.7 million negative. We do not perform mark-to-market foreign funding that is not subject to hedge accounting. However, we perform it on their respective hedges, and therefore we consider this mark-to-market as non-recurring. 4

5 Historic Quarterly and 9 Months Net Income - (R$ mn) Recurring Net Income - (R$ mn) M17 9M18 9M17 9M18 Return on Average Equity (ROAE) - (% p.a.) Return on Average Equity (ROAE) Adjusted and Recurring - (% p.a.) M17 9M18 9M17 9M18 Return on Average Asset (ROAA) - (% p.a.) Return on Average Asset (ROAA) Adjusted and Recurring - (% p.a.) M17 9M18 9M17 9M18 5

6 The Annualized Net Interest Margin (NIM), adjusted for the loan loss provision (LLP), foreign exchange variation on passive operations and foreign trade, and the income from receivables purchase ended 3Q18 at 12.0%, 0.5 p.p. lower than in 2Q18. In 9M18, the index reached 11.9%, up 0.9 p.p. compared to 9M17, demonstrating that we are still managing to keep margins high, even with the lower "interest" margin income. Net Interest Margin (NIM) - (% p.a. ) M17 9M18 Net Interest Margin (NIM) (R$ mn) 3Q18 2Q18 Chg. % 3Q17 Chg. % 9M18 9M17 Chg. % Gross Income from Financial Intermediation % n.a. 1, % Exchange Rate Variation (1) (0.1) (0.1) n.a. (0.3) 64.7 n.a. Income from Receivables purchase (1) % % % Income from Financial Intermediation % % 1, , % (-) Loan Loss Provision % % % Income from Financial Intermediation adjusted by Loan Loss Provision and Exchange Rate Variation (A) % % 1, , % Average Remunerated Assets (B) 23, , % 19, % 22, , % Interbank Investments 5, , % 4, % 5, , % Securities and Derivatives 2, , % 2, % 2, , % Lending Operation (does not include assignments) 15, , % 12, % 14, , % Trade Finance % % % Net Interest Margin (NIM) (% p.a.) (A/B) 12.0% 12.5% -0.5 p.p 11.2% 0.8 p.p 11.9% 11.0% 0.9 p.p (1) Reclassified from other operating/expenseve revenues. The Adjusted and Recurring Net Interest Margin (NIM-AR) was 12.9% p.a. in 3Q18, a 0.9 p.p. decrease over 2Q18. Recurring Adjusted Net Interest Margin (NIM-AR) (R$ mn) 3Q18 2Q18 Var. % 3Q17 Var. % 9M18 9M17 Var. % Income from Financial Intermediation Reported % % 1, , % Hedge/MTM 17.2 (14.0) n.a 2.6 n.a n.a Hedge Interest rate (DI) (R$ mn) (0.4) 1.7 n.a (4.3) n.a. (0.8) (10.5) n.a. Adjusted Income from Financial Intermediation (A) % % 1, , % Average Remunerated Assets 23, , % 19, % 22, , % (-) Expenses of financial intermediation add back provisions (1,981.9) (1,191.2) 14.4% (1,638.5) 21.0% (1,868.4) (1,358.6) 37.5% Average Remunerated Assets (B) 21, , % 18, % 20, , % Recurring Adjusted Net Interest Margin (NIM-AR) (%YoY) (A/B) 12.9% 13.8% -0.9 p.p 12.3% 0.6 p.p 13.0% 11.5% 1.5 p.p 6

7 Distribution 140 Distribution Points 41 Daycoval Branches 38 Daycred/ IFP Stores 28 Exchange Bureaus 33 Daypag Outlets In 3Q18, Banco Daycoval had 40 branches established in 21 states, and the Federal District, plus a branch in the Cayman Islands, which is an essential instrument both for obtaining funding and also for opening commercial lines and for handling our relationship with correspondent banks. During the quarter, we opened a new branch in Barra da Tijuca RJ. In 2018 the Aracaju SE and Florianópolis SC branches moved to new addresses. For the individuals segment, Daycoval works with outsourced sales promoters (the main distributors of its retail products) as well as 38 Daycred stores through our own sales promotion company, IFP-Promotora de Serviços de Consultoria e Cadastro Ltda. Aracaju SE Branch Av. Ministro Geraldo Barreto Sobral, Edifício JFC Trade Center Sl 1206 / 1207 Florianópolis SC Branch Av. Jornalista Rubens de Arruda Ramos, (Av. Beira Mar Norte) 7

8 Daycred - IFP Promotora In 3Q18, IFP - Promotora de Serviços de Consultoria e Cadastro Ltda., a company of the Daycoval Group, focused on promoting payroll loans, accounted for approximately 14.0% of the total origination and 34.3% only for the Bank's INSS operations, which were responsible for the highest production among our Correspondents in Brazil. IFP has 38 stores across Brazil and 288 employees. To improve its productivity, IFP also provides services to other financial institutions. Daytravel Exchange Bureaus In the third quarter of 2018, Daycoval had 28 currency exchange bureaus. The Bank also operates through partnerships with travel operators and agencies (107 currency exchange correspondents and 365 travel agencies) to facilitate access to clients and offer greater flexibility for conducting their operations, providing a quick and secure service. To expand availability, the number of bureaus should rise by signing on new currency exchange correspondents. In 3Q18, Daycoval Exchange sold approximately 128,900 transactions using prepaid cards, cash and remittances expressed in different currencies reaching R$ million. In the accumulated nine months of 2018, 374,400 transactions were made in prepaid cards of different currencies and in cash, with movement equivalent to R$ 1,032.8 million. Daypag Daypag units, operating throughout the state of São Paulo, were created to finance vehicle payment slips, IPVA payments, licensing, fines and the DPVAT insurance for car licensing agents and driving schools. We ended 3Q18 with 33 outlets, staffed by specialists in the segment, offering quick and efficient services. Daypag outlets processed 1,456,000 payment slips in 3Q18, compared to 1,649,000 in 3Q17. This business unit is part of the Bank s strategy of diversifying its products. Asset Management Daycoval Asset Management serves clients seeking sophisticated solutions that are aligned with their investment profiles through a number of different types of investment funds and distinctive products, such as portfolio management. Daycoval Asset ended 3Q18 with a total of managed and/or administered of some R$ 3,486.1 million. Currently, it manages 64 funds: 33 Multimarket Funds, seven Fixed Income Funds, two Stock Funds, five FIDCs, 12 Investment Club funds, one Real Estate Fund, three Holding Funds and one Managed Portfolio. Gross revenue from the management of investment funds was R$ 2.7 million in 3Q18 and R$ 7.3 million accrued in the first nine months of The Asset area has a specialized team of 17 employees, including traders, managers, back office and sales staff with extensive market knowledge. Managed Funds (R$ MM) 3,486 2,842 2,561 2,655 2,427 For more information, please access: 8

9 Loan Portfolio by Type and Expanded Loan Portfolio Expanded Loan Portfolio of R$ 17.5 billion, growth of 10.0% over 2Q18. Loan Portfolio (R$ mn) 3Q18 2Q18 Chg. % 3Q17 Chg. % Companies (1) 10, , % 7, % Payroll Loans 4, , % 4, % Auto Loans/Other % % Property Guaranteed Credit % % Total Loan Portfolio 16, , % 13, % (1) Does not consider Avals and Sureties Expanded Loan Portfolio (R$ mn) 3Q18 2Q18 Chg. % 3Q17 Chg. % Working Capital 4, , % 3, % Guaranteed Account 1, , % 1, % Receivables Purchase 2, , % 1, % Trade Finance % % BNDES % % Leasing % % Avals and Sureties 1, % % Total Companies 11, , % 8, % Payroll Loans 4, , , % Payroll Card % % Total Payroll Loans 4, , % 4, % Auto Loans/Others % % Direct Credit to Consumers (DCC) % % Total Expanded Loan Portfolio 17, , % 14, % The expanded loan portfolio, which includes the Avals and Sureties, totaled R$ 17,548.3 million, up 10.0% in the quarter and 24.7% over the last 12 months. In 9M18, operations with companies grew 38.7%, whereas credits for individuals were stable. Expanded Loan Portfolio (R$ mn) Expanded Loan Portfolio Breakdown 3.8% 0.3% 14,078 16,033 15,654 15,954 17, % Companies Payroll 67.5% Vehicles Other 9

10 Companies The Companies Portfolio closed 3Q18 at R$ 11.8 billion, growth of 14.8% compared to 2Q18 and an increase of 38.7% in relation to 3Q17. The progress in the quarter was due to the greater demand for the Working Capital, Guaranteed Account and Receivables Purchase product lines, which together represented 75.4% of the Companies Portfolio. Companies Portfolio - (R$ mn) Companies Portfolio Breakdown 8,548 10,533 10,106 10,324 11,856 9% 6% 3% 6% 40% Working Capital Receivables Purchase Guaranteed Account Trade Finance Aval and Sureties 14% Leasing 22% BNDES Credit to Companies Breakdown (R$ mn) 3Q18 2Q18 Chg. % 3Q17 Chg. % Working Capital 4, , % 3, % Guaranteed Account 1, , % 1, % Receivables Purchase 2, , % 1, % Trade Finance % % BNDES % % Leasing % % Avals and Sureties 1, % % Total Companies 11, , % 8, % Concentration of the Expanded Portfolio 100 largest clients Concentration of Credit Sep/16 Sep/17 Sep/18 Largest debtor 0.8% 0.8% 0.8% 10 Largest debtor 4.9% 5.4% 3.6% 20 Largest debtor 8.0% 8.4% 6.1% 50 Largest debtor 13.3% 13.4% 10.4% 100 Largest debtor 18.5% 18.4% 14.9% 10

11 Payroll The segment ended 3Q18 with a balance of R$ 4,984.6 million, practically stable compared to 2Q18 and modest growth of 1.1% over 3Q17. The payroll card portfolio closed the quarter with a balance of R$ million, an increase of 5.0% versus 2Q18 and growth of 21.3% compared to the same period of the previous year. We continue implementing the portfolio maintenance strategy. The focus of payroll loans continues to be with the most solid national agreements such as the INSS and Federal Government, which together represent 40.2% of the portfolio. In 3Q18, Daycoval had 1,070,000 active contracts, which corresponds to an average ticket of R$ 5,200 and an average plan of 49 months. Since 2Q16 no loans have been transferred resulting in joint liability. The carrying amount of credit assignments recorded under "Loan operations" at September 30, 2018 amounted to R$ 87.7 million, with the respective obligation assumed by the assignment recognized under Other liabilities Miscellaneous Liabilities on the sale and transfer of financial assets. It is important to mention that this transaction is considered a funding operation, not generating early revenue. Payroll Portfolio (R$ mn) Payroll Breakdown 4,928 4,884 4,915 4,966 4, % 8.5% 31.7% 13.2% 13.6% 29.0% INSS State Government Army Municipalities Government /SIAPE Others 11

12 Total Payroll Loan Origination, Net Origination exc. Refin and Refin Origination During 3Q18, new contracts were created with a total volume of R$ million, and in 9M18 origination totaled R$ 2.5 billion. In the charts below we consider the REFIN credit financing as a new credit transaction. The client (public servant/inss pensioner) gets the previous loan settled with the Bank and is given a new loan. In this transaction, the commission paid to the correspondent bank is lower than the traditional paid. The Bank adopted this strategy to focus more on the product margin. Payroll Origination (R$ mn) Breakdown of Payroll Origination % 8.7% 30.2% 14.5% 17.4% 26.4% INSS Army State Government Municipalities Government /SIAPE Others Payroll Net Origination (R$ mn) Payroll Net Origination Breakdown % 6.0% 15.6% 29.7% INSS Army State Government Municipalities 19.6% 26.5% Government /SIAPE Others Refinancing Origination (R$ mn) Refinancing Origination 3.1% 12.5% 13.0% 30.6% INSS Army State Governments 14.2% 26.6% Government /SIAPE Municipalities Others 12

13 Auto Loans The segment ended 3Q18 with a balance of R$ million, growth of 5.9% compared to 2Q18. The total of these operations represented 3.8% of the total of the expanded credit portfolio. Passenger vehicles remained the largest share in the portfolio in relation to heavy vehicles, 80% in 3Q18. Auto Loan Portfolio (R$ mn) Breakdown of Auto Loans Portfolio % Small Vehicles 80% Heavy-duty Vehicles 79 Auto Loan Portfolio Origination (R$ mn) Breakdown of Origination 18% 82% Small Vehicles Heavy-duty Vehicles The origination volume in 3Q18 was R$ million, and accrued for 9M18 was R$ million. The average age of vehicles is 12 years, the average ticket is currently R$ 6,800 and the average plan is 40 months. CGI - Property Guaranteed Credit As of 3Q17, we began to disclose, separately, the CGI - Daycoval Property Guarantee Credit, which ended 3Q18 with a balance of R$ 46.0 million. 13

14 Assets Breakdown Total Assets in 3Q18 registered a balance of R$ 27.0 billion, a 4.5% growth over the balance of 2Q18 and 16.4% over 3Q17. Assets Breakdown (R$ mn) 3Q18 2Q18 Chg. % 3Q17 Chg. % Interbank Investments 4, , % 5, % Securities and Derivatives 2, , % 1, % Lending Operation 12, , % 10, % Other Assets 6, , % 5, % Total Assets 26, , % 23, % Total Assets (R$ mn) Total Assets Breakdown 23,219 23,786 24,152 25,864 26, % 9.8% 45.8% Lending Operation Other Assets Interbank Investments 25.9% Securities and Derivatives Liquidity Free Cash of R$ 4.0 billion Breakdown of the Liquid Assets (R$ mn) 3Q18 2Q18 Chg. % 3Q17 Chg. % Cash and Cash Equivalents % % Liquidity Interbank Investments 2, , % 3, % Money Market Investment (net) 2, , % 2, % Interbank Investments % % Foreign Currency Investments % % Securities (Own Portfolio - Available for Sale/Trade) 1, , % 1, % Total Liquid Assets 4, , % 4, % The main events that occurred during the last 12 months that caused a fluctuation in this line: (i) In 2Q17, we had no material facts regarding funding and maturities. (ii) In 3Q17, we had the 4 th Public Issue of Local Bonds in the amount of R$ million and the payment of tranches of the syndicated operations of the multilateral entities (IFC and IIC), in the amount of R$ million; (iii) There were no significant events during 4Q17 and 1Q18. (iv) In 2Q18, we had the 6 th Public Issue of Local Bonds in the amount of R$ million; (v) in 3Q18, there was payment of tranches of multilateral organization syndicated operations (IFC and IIC). 14

15 Available Cash Evolution (R$ mn) Cash Breakdown 4,361 3,274 4,006 4,996 4, % 66.4% Overnight Repos (Selic) Federal Government Bonds Asset and Liability Management Positive gap of 5 days The average term of credit operations is currently 310 days and the average term of the funding operations extends for 315 days. Outstanding Operations September/18 7,654 3,176 6,448 5,050 5,364 4,029 1, Up to 3 months From 3 to 12 months From 1 to 3 years From 3 to 5 years Over 5 years Funding Loan Portfolio 15

16 Average Maturity of Loan Operations: 310 days Average Maturity of Funding Operations: 315 days Loan Portfolio by Segment Average term to Maturity (1) days Companies 197 Trade Finance 88 Payroll Loans 474 Auto Loans 445 DCC + Other 1,198 Leasing 564 BNDES 396 Total Loan Portfolio 310 (1) From September 30, 2018 Funding Average term to Maturity (1) days Total Deposits 157 Interbank Deposits 247 Local Bonds (letras financeiras) 439 LCA (Letter of Credit Agribusiness) 175 LCI (Letter Home Mortgage) 220 Foreign Issuances 172 Borrowing and Onlending (2) 326 Leasing 214 BNDES 399 Total Funding 315 (1) From September 30, 2018 (2) Does not consider Avals and Sureties Loan Portfolio - Outstanding Operation Funding - Outstanding Operations 2.5% 0.4% 23.3% 7.7% 37.3% 31.0% 3.0% 21.4% 29.2% 44.2% Up to 3 months From 1 to 3 years Over 5 years From 3 to 12 months From 3 to 5 years Up to 3 months From 3 to 12 months From 1 to 3 years From 3 to 5 years Over 5 years 16

17 Funding Total Funding reaches R$ 17.3 billion in 3Q18, evolution of 16.1% in the past 12 months Funding (R$ mn) 3Q18 2Q18 Chg. 3Q17 Chg. Total Deposits 5, , % 4, % Demand Deposits + Other Deposits % % Time Deposits 4, , % 3, % Interbank Deposits % % Letter of Credit Home Mortgage % % Letter of Credit Agribusiness % % Subordinated Local Bonds (Letras Financeiras Subordinadas) % - n.a. Loc al Bonds (Letras Financ eiras) 6, , % 5, % Private Offerings 5, , % 4, % Public Offerings % n.a. Foreign Issuanc es 1, , % 1, % Bonds 1, , % 1, % Borrowing and O nlending 2, , % 2, % Foreign borrowings 1, , % 1, % Domestic onlendings , % 2, % Total 17, , % 14, % Total funding reached R$ 17.3 billion in 3Q18, stable compared to 2Q18 and 16.1% improvement over 3Q17, in line with the credit portfolio. Local Bond (Letras Financeiras) funding reached R$ 6,525.4 million, a reduction of 3.4% in the quarter and 22.2% over 3Q17. Internationally, Daycoval has relationships with a number of correspondent banks in several countries, including development banks and multilateral agencies. The foreign issuances line ended 3Q18 with a balance of R$ 1,945.8 million, an increase of 2.1% in the quarter, and the foreign borrowings line ended the quarter with a balance of R$ 2,376.2 million, growth of 6.4% in the quarter, due to the pay down of tranches of syndicated loans with multilateral organizations (IFC and IIC). Total Deposits Breakdown (R$ mn) 3Q18 2Q18 Chg. 3Q17 Chg. Corporates 2, , % 2, % Investment Funds % % Financial Institutions + Interbank Deposits % % Individuals % % Institutional % n.a. Demand Deposits % % Letter of Credit Home Mortgage % % Letter of Credit Agribusiness % % Total 6, , % 5, % Total deposits, including LCI (home mortgage letters of credit) and LCA (agribusiness letters of credit), reached R$ 6,444.3 million in 3Q18, representing 37.2% of total funding. 17

18 Ratings Rating at sovereign level Daycoval's ratings demonstrate the low level of risk and the solidity obtained in its operations. The information obtained from the respective rating agencies is widely taken into account by the financial market, but for all effects, should not be taken as an investment recommendation. According to the reports published, the ratings reflect the opinion of the agencies regarding Banco Daycoval: (i) Ba2 on a global scale by Moody's with a "stable" outlook; ii) BB- by Fitch Ratings with a "stable" outlook; iii) BB- by Standard&Poor's with a "Negative" outlook and; iv) by Riskbank - BRMP 1 - Low Risk for the Medium Term (up to two years), very safe. For more information, please go to: Global Long Term Ba2 National Long Term Aa2.br Short Term BR-1 Global Long Term BB- Short Term B National Long Term AA (bra) Short Term F1+(bra) Global Long Term BB- Short Term B National Long Term braa+ Short Term bra-1+ BRMP 1 Low Risk for Short Term (up to 2 years) Very safe Perspective Stable Perspective Stable Perspective Negative Oct/18 Jun/18 Jul/18 Oct/18 18

19 Quality of the Loan Portfolio The quality of the portfolio continues high, with 92.4% of the operations classified AA-C The quality of the portfolio remains high, with 93.4% of the transactions classified between AA-C at the end of 3Q18, in accordance with CMN Resolution The balance of avals and sureties are not included in these tables. The balance of the loan portfolio in 3Q18 was R$ 16.5 billion, with an LLP balance of R$ million that includes the Additional Provision line we have carried since 2Q18 in the amount of R$ million, for a total of R$ 1,029.6 million. Banco Daycoval - R$ MM Required Rating Loans % Provision Provision A 0.5% 7, % 38.6 B 1.0% 6, % 63.1 C 3.0% 1, % 37.8 D 10.0% % 28.6 E 30.0% % 23.2 F 50.0% % 33.5 G 70.0% % 38.5 H 100.0% % Subtotal Additional Provision Total 16, % 1,029.6 Total Provision / Loans 6.2% Companies (1) (R$ mn) Leasing (R$ mn) 3Q18 Loans % Provision 3Q18 Loans % Provision AA - C 6, % AA - C % 7.1 D % 16.5 D % 0.9 E % 6.7 E % 2.2 F % 21.5 F % 0.3 G % 25.7 G % 0.0 H % H % 2.4 Total 7, % Total % 12.9 Total Provision / Loans (1) Does not include Avals and Sureties 8.2% Total Provision / Loans 1.7% Receivables Purchase (R$ mn) 3Q18 Loans % Provision AA - C 2, % 47.7 D % 2.9 E % 2.9 F % 1.7 G % 0.7 H % 0.0 Total 2, % 55.9 Total Provision / Loans 2.2% 19

20 Auto Loans + DCC + Other (R$ mn) Payroll Loans (R$ mn) 3Q18 Loans % Provision 3Q18 Loans % Provision AA - C % 18.0 AA - C 4, % 53.4 D % 5.8 D % 2.7 E % 5.3 E % 6.1 F % 3.5 F % 6.4 G % 4.1 G % 8.0 H % 23.2 H % Total % 59.9 Total 4, % Total Provision / Loans (1) Excluded Avals and Sureties 9.1% Total Provision / Loans 5.7% The E-H credit portfolio ended 3Q18 at R$ million, a 12.7% improvement over 2Q18 Overview of Quality of Loan Portfolio (1) 3Q18 2Q18 Chg. 3Q17 Chg. 9M18 9M17 Chg. Loan Portfolio R$ (mn) 16, , % 13, % 16, , % Establishment of Provision R$ (mn) % 91.9 n.a % LLP excluding additional provision (R$ mn) % % % Final Balance Loan E-H R$ (mn) % % % Overdue Loans more than 14 days past due R$ (mn) % % % Overdue Loans more than 60 days past due R$ (mn) % % % Overdue Loans more than 60 days past due R$ (mn) -installments falling due % % % Overdue Loans more than 90 days past due R$ (mn) % % % Overdue Loans more than 90 days past due R$ (mn) - installments falling due % % % Establishment of Provision/Loan Portfolio (%) 0.6% 0.7% -0.1 p.p 0.7% -0.1 p.p 2.3% 3.1% -0.8 p.p Final Balance LLP/Loan Portfolio (%) 5.3% 6.4% -1.1 p.p 6.8% -1.5 p.p 5.3% 6.8% -1.5 p.p Final Balance Loan EH/Loan Porfolio (%) 4.9% 6.1% -1.2 p.p 7.0% -2.1 p.p 4.9% 7.0% -2.1 p.p Overdue Loans more than 14 days past due / Loan Portfolio (%) 1.7% 2.8% -1.1 p.p 2.2% -0.5 p.p 1.7% 2.2% -0.5 p.p Overdue Loans more than 60 days past due / Loan Portfolio (%) 1.1% 1.7% -0.6 p.p 1.5% -0.4 p.p 1.1% 1.5% -0.4 p.p Overdue Loans more than 60 days past due / Loan Portfolio (%) - installments falling due 3.8% 4.1% -0.3 p.p 4.4% -0.7 p.p 3.8% 4.4% -0.7 p.p Overdue Loans more than 90 days past due / Loan Portfolio (%) 1.0% 1.6% -0.6 p.p 1.3% -0.3 p.p 1.0% 1.3% -0.3 p.p Overdue Loans more than 90 days past due / Loan Portfolio (%) - installments falling due 2.8% 3.4% -0.6 p.p 3.8% -1.0 p.p 2.8% 3.8% -1.0 p.p Final Balance LLP / Overdue Loans more than 14 days past due R$ (mn) 312.7% 227.8% 84.9 p.p 311.3% 1.4 p.p 313.4% 311.3% 2.1 p.p Final Balance LLP / Overdue Loans more than 60 days past due (mn) 479.2% 372.4% n.a % 19.5 p.p 481.3% 459.7% 21.6 p.p Final Balance LLP / Overdue Loans more than 60 days past due (mn) - installments falling due 139.4% 154.4% p.p 152.2% p.p 139.4% 152.2% p.p Final Balance LLP / Overdue Loans more than 90 days past due (mn) 544.1% 412.4% n.a % 21.3 p.p 544.1% 522.8% 21.3 p.p Final Balance LLP / Overdue Loans more than 90 days past due (mn) - installments falling due 188.6% 189.6% -1.0 p.p 176.0% 12.6 p.p 188.6% 176.0% 12.6 p.p Final Balance LLP / Loan EH (%) 107.9% 104.1% 3.8 p.p 96.4% 11.5 p.p 107.9% 96.4% 11.5 p.p Write-offs R$ (mn) (196.5) (143.1) 37.3% (102.8) 91.1% (435.0) (272.1) 59.9% Companies Recovered Loans R$ (mn) % % % Retail Recovered Loans R$ (mn) % % % (1) Does not include avals and sureties and includes Leasing LLP (without additional provision) (R$ mn) 3Q18 2Q18 Chg. 3Q17 Chg. 9M18 9M17 Chg. Balance at the Begining of the Period (without additional provision) % % % Establishment of Provision % % % Companies (1) % % % Payroll % % % Auto + Other % % % Property Guaranteed Credit n.a % % Write-offs (196.5) (143.1) 37.3% (102.8) 91.1% (435.0) (272.1) 59.9% Companies (1) (150.9) (98.8) 52.7% (53.1) n.a. (300.5) (121.0) n.a. Retail (45.6) (44.3) 2.9% (49.7) -8.2% (134.5) (151.1) -11.0% Final Balance LLP (without additional provision) % % % (1) Does not include avals and sureties 20

21 Additional LLP* (R$ mn) 3Q18 2Q18 Chg. 3Q17 Chg. 9M18 9M17 Chg. Balance at the Begining of the Period n.a. - n.a. - - n.a. Establishment of Provision n.a. - n.a n.a. Final Balance Additional LLP % - n.a n.a. (*) Does not include avals and sureties Total LLP* (with additional provision) (R$ mn) 3Q18 2Q18 Chg. 3Q17 Chg. 9M18 9M17 Chg. Balance at the Begining of the Period 1, % % % Establishment of Provision % % % Provision required by the BACEN Res % % % Additional Provision n.a. - n.a n.a. Write-offs (196.5) (143.1) 37.3% (102.8) 91.1% (435.0) (272.1) 59.9% Companies (1) (150.9) (98.8) n.a. (53.1) n.a. (300.5) (121.0) n.a. Retail (45.6) (44.3) 2.9% (49.7) -8.2% (134.5) (151.1) -11.0% Final Balance Total LLP (with additional provision) 1, , % % 1, % (1) Does not include avals and sureties The provisioning expense, excluding the additional provision, totaled R$ million in 3Q18, a reduction of 4.9% over 2Q18 and 7.5% lower in comparison with 9M17, reflected in a constant updating of the credit award processes and the quality of the guarantees obtained, reducing delinquency indicators and improving the economic environment. The balance of the E-H portfolio ended 3Q18 at R$ million, an improvement of 12.7% over 2Q18. The loan loss provision divided by the E-H Portfolio reached 107.9%. Loans overdue for more than 90 days/companies portfolio - including installments falling due - reached 2.8% in 3Q18, reduction of 0.6 p.p. when compared to 2Q18 and 1.0 p.p. against 3Q18. When we analyze the indicators for loans that are more than 14 and 60 days overdue, we can see a significant improvement over 2Q18. The amount written off for losses was R$ million during the quarter and for 9M18 it was R$ million. During 3Q18, credit recoveries totaled R$ 42.9 million and in 9M18 it was R$ million. During the quarter and the nine-month period ending on September 30, 2018, the Bank renegotiated credit operations of defaulting clients in the amount of R$ million and R$ million, respectively, and Daycoval Leasing renegotiated leasing operations in the amount of R$ 2.2 million and R$ 8,0 million, respectively. 21

22 Overdue loans by more than 90 days/credit Portfolio including installments falling due - was 2.8% in 3Q18 Companies Overdue Loans (1) (R$ mn) 3Q18 2Q18 Chg. 3Q17 Chg. Overdue Loans more than 14 days past due % % Overdue Loans more than 60 days past due % % Overdue Loans more than 90 days past due % % Overdue Loans more than 14 days past due / Companies Loans (%) 1.4% 3.3% -1.9 p.p 2.3% -0.9 p.p Overdue Loans more than 90 days past due / Companies Loans (%) 0.9% 1.9% -1.0 p.p 1.4% -0.5 p.p Final Balance LLP/Loan Portfolio (%) 5.2% 6.7% -1.5 p.p 8.3% -3.1 p.p LLP Balance / Overdue Loans > 90 days (%) 561.1% 346.7% p.p 574.3% p.p Overdue Loans more than 60 days past due - installments falling due % % Overdue Loans more than 90 days past due - installments falling due % % Overdue Loans more than 60 days past due / Companies Loans (%) - installments falling due 2.0% 2.8% -0.8 p.p 2.8% -0.8 p.p Overdue Loans more than 90 days past due / Companies Loans (%) - installments falling due 1.5% 2.4% -0.9 p.p 2.5% -1.0 p.p LLP Balance / Overdue Loans > 60 days (%) - installments falling due 259.1% 242.2% 16.9 p.p 293.9% p.p LLP Balance / O verdue Loans > 90 days (%) - installments falling due 356.0% 278.2% 77.8 p.p 329.8% 26.2 p.p Payroll Overdue Loans (R$ mn) 3Q18 2Q18 Chg. 3Q17 Chg. Overdue Loans more than 14 days past due % % Overdue Loans more than 60 days past due % % Overdue Loans more than 90 days past due % % Overdue Loans more than 14 days past due / Payroll Loans (%) 2.0% 1.7% 0.3 p.p 1.7% 0.3 p.p Overdue Loans more than 90 days past due /Payroll Loans (%) 1.0% 0.8% 0.2 p.p 0.9% 0.1 p.p Final Balance LLP/Loan Portfolio (%) 5.2% 5.7% -0.5 p.p 4.0% 1.2 p.p LLP Balance / Overdue Loans > 90 days (%) 523.0% 697.5% p.p 433.6% 89.4 p.p Overdue Loans more than 60 days past due - installments falling due % % Overdue Loans more than 90 days past due - installments falling due % % Overdue Loans more than 60 days past due / Payroll Loans (%) - installments falling due 6.8% 5.9% 0.9 p.p 6.1% 0.7 p.p Overdue Loans more than 90 days past due / Payroll Loans (%) - installments falling due 5.1% 4.7% 0.4 p.p 5.3% -0.2 p.p LLP Balance / Overdue Loans > 60 days (%) - installments falling due 76.7% 96.6% p.p 93.6% p.p LLP Balance / O verdue Loans > 90 days (%) - installments falling due 101.8% 120.9% p.p 106.7% -4.9 p.p Auto Overdue Loans (R$ mn) 3Q18 2Q18 Chg. 3Q17 Chg. Overdue Loans more than 14 days past due % % Overdue Loans more than 60 days past due % % Overdue Loans more than 90 days past due % % Overdue Loans more than 14 days past due / Auto Loans (%) 4.0% 4.4% -0.4 p.p 4.8% -0.8 p.p Overdue Loans more than 90 days past due /Auto Loans (%) 1.6% 1.7% -0.1 p.p 2.1% -0.5 p.p Final Balance LLP/Loan Portfolio (%) 7.6% 7.9% -0.3 p.p 9.4% -1.8 p.p LLP Balance / Overdue Loans > 90 days (%) 480.0% 454.1% 25.9 p.p 391.0% 89.0 p.p Overdue Loans more than 60 days past due - installments falling due % % Overdue Loans more than 90 days past due - installments falling due % % Overdue Loans more than 60 days past due / Auto Loans (%) - installments falling due 9.8% 10.7% -0.9 p.p 12.0% -2.2 p.p Overdue Loans more than 90 days past due / Auto Loans (%) - installments falling due 6.8% 7.3% -0.5 p.p 9.0% -2.2 p.p LLP Balance / Overdue Loans > 60 days (%) - installments falling due 77.9% 73.9% 4.0 p.p 83.5% -5.6 p.p LLP Balance / O verdue Loans > 90 days (%) - installments falling due 112.0% 108.8% 3.2 p.p 111.5% 0.5 p.p 22

23 Overdue loans by more than 14 days 4.8% 4.5% 4.4% 4.4% 4.0% 1.7% 1.8% 1.8% 1.7% 2.0% 2.3% 1.9% 3.6% 3.3% 1.4% Overdue Loans by more than 14 days / Auto Loans + Other (%) Overdue Loans by more than 14 days / Payroll Loans (%) Overdue Loans by more than 14 days / Companies Loans (%) Overdue loans by more than 90 days 2.1% 1.8% 1.7% 1.7% 1.6% 0.9% 0.9% 0.8% 0.8% 1.0% 1.4% 1.1% 1.8% 1.9% 0.9% Overdue Loans by more than 90 days /Auto Loans + Other (%) Overdue Loans by more than 90 days / Payroll Loans (%) Overdue Loans by more than 90 days / Companies Loans (%) Overdue loans by more than 90 days - installments falling due 8.3% 7.7% 7.3% 7.1% 7.6% 5.3% 5.1% 5.4% 4.7% 5.1% 2.5% 1.6% 1.9% 2.4% 1.5% Overdue Loans by more than 90 days /Auto Loans + Other (%) Overdue Loans by more than 90 days / Payroll Loans (%) Overdue Loans by more than 90 days / Companies Loans (%) 23

24 Financial Performance Income from credit operations reached R$ 2.2 bi in 9M18, growth of 8.0% compared to 9M17 Income from Financial Intermediation (R$ mn) 3Q18 2Q18 Chg. % 3Q17 Chg. % 9M18 9M17 Chg. % Loans Operations % % 2, , % Companies Portfolio % % 1, % Payroll % % % Auto + Other % % % Direct Credit to Consumer % % % Leasing Operation % % % Securities Operations % % % Derivatives ( 1 ) n.a. (180.2) n.a (154.9) n.a. Foreign Exchange Operations % % % Sales or Transfer Financial Asset Operations n.a. - n.a n.a. Income from Financial Intermediation (A) 1, , % % 3, , % Funding Operations (2) (355.9) (549.8) -35.3% (301.0) 18.2% (1,145.4) (1,083.5) 5.7% Borrowings and Onlendings Operations (3) (104.8) (306.8) -65.8% (8.1) n.a. (440.5) (139.4) n.a. Leasing Operation (62.1) (57.9) 7.3% (55.6) 11.7% (178.1) (159.8) 11.5% Sales or Transfer Financial Asset Operations (3.9) (4.7) -17.0% (10.3) -62.1% (14.6) (41.1) -64.5% Loan Loss Provision (LLP) (119.1) (253.1) -52.9% (91.9) 29.6% (534.1) (406.7) 31.3% Expenses on Financial Intermediation (B) (645.8) (1,172.3) -44.9% (466.9) 38.3% (2,312.7) (1,830.5) 26.3% Gross Income from Financial Intermediation (A-B) % % 1, n.a. Exchange Rate Variation (4) (0.1) (0.1) n.a. (0.3) 64.7 n.a. Income from Receivables purchase (4) % % % Adjusted Income from Financial Intermediation % % 1, , % MTM adjustment - Hedge 17.1 (14.0) n.a. 2.6 n.a n.a. Adjusted Gross Income from financial intermediation - Except MTM - Hedge % % 1, , % (1) Income from Derivatives (Hedge) (185.8) (158.7) (2) Foreign Exchange Variation without Foreign Issues (74.0) (266.0) 26.3 (347.9) 1.7 (3) Foreign Exchange Variation without Borrowings abroad (71.9) (264.2) 25.0 (349.8) (59.2) (4) Reclassified from other operating/expenses revenues In 3Q18, revenues from credit operations reached R$ million, a reduction of 5.1% over 2Q18, and in 9M18 there was an increase of 8.0% over the same period of the previous year, due to the growth of the portfolio and maintenance of the margins. The line of credit operations for Companies ended 3Q18 with revenues of R$ million, down 7.4% in the quarter, with growth of 15.0% accrued for 9M18. The Payroll line ended the quarter with revenues of R$ million, a reduction of 4.0% over 2Q18 and the auto line s balance closed at R$ 52.5 million. Leasing Operations ended the quarter with revenues of R$ 95.0 million, a 6.6% increase compared to 2Q18. Gross Income from Financial Intermediation ended the quarter with a balance of R$ million. Excluding the effect of the MTM hedge adjustment for foreign issues, considering the reclassification of the exchange variation on liabilities and receivables purchase, the gross income from adjusted financial intermediation was R$ million in 3Q18, and R$ 1.4 billion in 9M18. Expenses for market funding, borrowing and on lending were R$ million in the quarter. The derivatives result was R$ million positive in 3Q18 because it included R$ million of hedge result. Excluding these effects, the derivative result was R$ 11.3 million in 3Q18 versus R$ 9.9 million in 2Q18. 24

25 Personnel, Administrative and Commission Expenses Personnel and Administrative Expenses (R$ mn) 3Q18 2Q18 Chg. % 3Q17 Var. % 9M18 9M17 Chg. % Personnel Expenses (95.1) (88.0) 8.1% (75.9) 25.3% (264.4) (219.2) 20.6% Administrative Expenses (71.8) (66.8) 7.5% (58.9) 21.9% (199.5) (171.6) 16.3% Total Personnel and Administrative Expenses (166.9) (154.8) 7.8% (134.8) 23.8% (463.9) (390.8) 18.7% Commission Expenses (total) (55.1) (50.7) 8.7% (54.3) 1.5% (157.8) (164.4) -4.0% Payroll (42.0) (39.9) 5.3% (44.7) -6.0% (123.2) (136.2) -9.5% Auto Loans + Others (8.0) (6.9) 15.9% (6.2) 29.0% (21.3) (18.4) 15.8% Direct Credit to Consumer (DCC) (0.2) (0.1) n.a (0.1) n.a. (0.4) (0.2) n.a. Daytravel (4.9) (3.8) 28.9% (3.3) 48.5% (12.9) (9.6) 34.4% Total (222.0) (205.5) 8.0% (189.1) 17.4% (621.7) (555.2) 12.0% Personnel and administrative expenses ended 3Q18 at R$ million, up 7.8% from 2Q18, mainly impacted by the collective bargaining agreement and in 9M18 presented a 18.7% evolution in comparison with 9M17. We continue to keep expenses under control, without losing business quality or agility, even in an atmosphere of credit portfolio growth. Banco Daycoval consolidated ended 3Q18 with 1,880 employees, a 5.0% increase over June 2018 and 15.0% over the same period of the previous year. Currently, the Companies segment commercial team is comprised of 25% of total employees. Commissions expenses, shown in the table above, totaled R$ 55.1 million, growth of 8.7% during 3Q18. Efficiency Ratio Efficiency Ratio (R$ mn) 3Q18 2Q18 Chg. % 3Q17 Chg. % 9M18 9M17 Chg. % (+) Personnel + Administrative Expenses + Commisions (222.0) (205.5) 8.0% (189.1) 17.4% (621.7) (554.0) 12.2% (+) Depreciation and Amortization % 0.7 n.a n.a. Total Expenses (A) (219.4) (202.9) 8.1% (188.4) 16.5% (614.0) (552.2) 11.2% (+) Income from Financial Intermediation (-) LLP % % 1, , % (+) Income from Services Provided % % % (+) Income from Receivables purchase % % % (+) Exchange Rate Variation (0.1) (0.1) 0.0% 84.9 n.a. (0.3) 64.7 n.a. Total Income (B) % % 2, , % Efficiency Ratio (A/B) (%) 30.2% 28.6% 1.6 p.p 33.0% -2.8 p.p 29.0% 32.5% -3.5 p.p Profit Sharing (18.0) (18.7) -3.7% (12.8) 40.6% (51.7) (41.3) 25.2% Efficiency Ratio (considering Profit Sharing) (%) 32.7% 31.2% 1.5 p.p 35.3% -2.6 p.p 31.5% 34.9% -3.4 p.p In 3Q18, the Efficiency Ratio was 30.2% up 1.6 p.p. compared to 2Q18 and a 3.5 p.p. improvement in 9M18. This ratio is in line with our expectation for the Bank s Efficiency. Other Operating Income/Expense Other Operating Revenues/Expenses posted a positive result of R$ 56.3 million in 3Q18, against a positive R$ 51.6 million in 2Q18. After excluding exchange rate effects, this result was a positive R$ 50.6 million against positive R$ 31.0 million in 2Q18. This increase in the quarter mainly was due to higher revenues from credit purchase operations (R$ 8.4 million) and a lower provision for civil and labor contingencies (R$ 11.1 million). Profit Sharing Program Expenses related to the program totaled R$ 18.0 million in 3Q18 and R$ 51.7 million in the 9M18. 25

26 Income Tax and Social Contribution Expenses for Income Tax and Social Contributions totaled R$ million. Equity and Leverage Basel Ratio of 15.0% in 3Q18. Shareholder's Equity Net Equity totaled R$ 3.3 billion in 3Q18, an increase of 4.6% compared to 2Q18. In the third quarter of 2018, a payout of R$ 49.5 million of Interest on Equity was decided, totaling R$ 49.5 million for the 9M18, totaling R$ million in 9M18. Shareholder's Equity (R$ mn) 2,923 3,009 3,128 3,197 3,344 Basel III Ratio The Basel Accords call for banks to maintain a minimum percentage of weighted equity as a guarantee against risk incurred by their operations. In Brazil, the Central Bank requires that banks operating in Brazil comply with a minimum percentage of 8.625% of risk weighted assets calculated based on the Basel III Accord, which provides the Brazilian financial system with greater security against fluctuations in economic conditions BIS Ratio (%) In 3Q18, the Basel III Ratio, calculated using the standardized approach, stood at 15.0%, a decrease of 0.8 p.p. in relation to 2Q18, due to the growth of the portfolio. Loan Portfolio/Equity Loan Portfolio / Shareholder's Equity - times The Bank's leveraging is at its tipping point, and today the loan portfolio tends to maintain its current levels and, depending on a favorable political and economic environment, to potentially expand the portfolio Loan Portfolio Expanded Loan Portfolio 26

27 Subsequent Events a) Distribution of dividends from prior years At a meeting of the Board of Directors held on October 30, 2018, the distribution of dividends on profits from prior years in the amount of R$ million at R$ per share was discussed and approved, payment of which occurred on the same date. b) Capital stock increase According to the Extraordinary Shareholders Meeting held on October 30, 2018, the following resolutions were discussed and approved: (i) Conversion of all the preferred shares issued by the Bank, corresponding to 43,253,988 preferred shares, into common shares at the ratio of one common share for each preferred share; and (ii) Increase in the capital stock of Banco Daycoval in the amount of R$ million, through issuance of 26,696,649 common shares, subscribed and fully paid up on the same date. Accordingly, after ratification by BACEN, the capital stock of Banco Daycoval will increase from R$ 1,892.1 million to R$ 2,253.6 million, comprising 230,820,429 nominal common shares, all registered, without par value. c) Issuance of Local Bonds with subordination clause On October 30, 2018, the Bank completed funding through the issuance of Local Bonds with a Subordination clause, in the total amount of R$ million maturing on October 30, After authorization by BACEN, this funding will become Level II of the Bank's Reference Equity, pursuant to CMN Resolution No /13. 27

28 Upcoming Events 3Q18 Conference Call: In Portuguese November 8, a.m. (BR) Dial in with connections from Brazil: / Code: Banco Daycoval Disclaimer "This material may include estimates and forward-looking statements. These estimates and forward-looking statements are to a large extent based on current expectations and projections about future events and financial trends that affect or may come to affect the Bank's business. Many important factors may adversely affect the results of Banco Daycoval as described in management's estimates and forward-looking statements. These factors include, but are not limited to, the following: the performance of the Brazilian and international economies; fiscal, foreign-exchange and monetary policies; increasing competition in the companies segment; Banco Daycoval's ability to obtain funding for its operations; and changes to Central Bank rules and regulations. The words "believe," "may," "could," "seek," "estimate," "continue," "anticipate," "plan," "expect" and other similar words are used to identify estimates and projections. Considerations involving estimates and forward-looking statements include information relating to results and projections, strategies, competitive positioning, the industry environment, growth opportunities, the effects of future regulation, and the effects of competition. Such estimates and projections are valid only at the time of writing. Daycoval does not undertake to publish updates or review any of these estimates in response to new information, future events or other factors. In light of the risks and uncertainties involved, the estimates and forward-looking statements contained herein may not materialize. Given these limitations, shareholders and investors should not make decisions based on the estimates, projections and forward-looking statements contained in this material." 28

29 Annex I Balance Sheet in R$ thousand Assets 3Q18 2Q18 3Q17 Current Assets 17,601,869 16,816,099 14,999,826 Cash and Cash Equivalents 139, , ,359 Interbank Investments 4,977,737 5,389,495 5,019,265 Securities and Derivatives 865, , ,513 Interbank Accounts 122, , ,018 Lending Operations 6,809,197 6,485,332 6,045,381 Leasing Operations 321, , ,820 Other Receivables 4,263,170 3,490,592 2,981,814 Other Assets 101, , ,656 Long-Term Assets 9,312,493 8,965,240 8,130,985 Interbank Investments 7,998 25,624 21,638 Securities and Derivatives 1,775,966 1,800,773 1,462,661 Lending Operations 4,890,472 4,641,715 4,319,780 Leasing Operations 372, , ,823 Other Receivables 2,259,039 2,180,254 2,058,990 Other Assets 6,107 4,962 65,093 Permanent 80,738 82,256 87,824 Investments Fixed assets in progress ,865 Property and Equipment in Use 79,941 81,451 11,204 Intangible Total Assets 26,995,100 25,863,595 23,218,635 Liabilities 3Q18 2Q18 3Q17 Current Liabilities 15,268,352 14,267,003 9,856,203 Deposits 3,272,349 3,268,193 3,110,796 Money Market Funding 2,426,940 1,922,878 1,862,001 Funds from Acceptance and Issuance of Securities 6,372,656 6,057,741 2,680,573 Interbank Accounts 12,736 11,809 10,652 Interbranch Accounts 114,638 63,214 69,879 Borrowings and Onlendings 1,716,952 1,884, ,632 Derivatives 30,146 34,139 13,297 Provisions of Insurance and Pension Plans 67,720 67,829 61,884 Other payables 1,254, ,974 1,090,489 Long-term Liabilities 8,281,283 8,296,067 10,344,877 Deposits 1,755,038 1,487,201 1,692,366 Funds from Acceptance and Issuance of Securities 3,515,544 3,835,485 5,325,896 Borrowings and Onlendings 659, ,757 1,141,706 Derivatives - 7 1,098 Other Payables 2,351,526 2,319,617 2,183,811 Deferred Income 100, ,981 93,671 Minority Interest Shareholders Equity 3,344,071 3,196,570 2,922,945 Capital of Brazilian Residents 1,892,143 1,892,143 1,892,143 Profit Reserves 1,449,302 1,304,615 1,027,078 Adjustments of Shareholders' Equity Evaluation - 2,626 (188) 3,724 Total Liabilities 26,995,100 25,863,595 23,218,635 29

30 Annex II Income Statement in R$ thousand 30