Apimec Meetings Banco do Brasil São Paulo. Paulo Caffarelli CEO

Transcription

1 Apimec Meetings Banco do Brasil São Paulo Paulo Caffarelli CEO

2 WHAT WE DELIVERED BBAS3 PRICE 05/31/ R$ /05/ R$ Growth of 99.4% Peak of R$ in 10/17/2017 PROFITABILITY INCREASE (9M17/9M16) ADJUSTED NET INCOME GREW BY 45.1% ADJUSTED ROE FROM 9.1% TO 12.3% FEE INCOME (9M17/9M16) GROWTH OF 9.9% ADMINSTRATIVE EXPENSES UNDER STRICT CONTROL (9M17/9M16) DECREASED BY 2.7% EFFICIENCY IMPROVEMENT From 39.7% in sep/16 to 38.5% in sep/17 INCREASE IN CREDIT DISBURSEMENTS (3Q17/3Q16) Individuals: +100% Agribusiness: + 39% Companies: + 25% ASSET QUALITY IMPROVEMENT NPL90 from 4.11% in jun/17 to 3.94% in sep/17 PROVISION EXPENSES (9M17/9M16) DECREASED BY18.4% CORE CAPITAL FROM 9% in sep/16 to 10% in sep/17 Goal: 9.5% in January/19

3 WHAT TO EXPECT FOR 2018 ECONOMIC ACTIVITY RECOVERY LOAN PORTFOLIO GROWTH, SPECIALLY IN INDIVIDUALS, AGRIBUSINESS AND VERY SMALL AND SMALL COMPANIES ASSET QUALITY GRADUALLY IMPROVING LOWER PROVISION EXPENSES FEE INCOME ABOVE INFLATION ADMINISTRATIVE EXPENSES BELOW INFLATION PROFITABILITY IMPROVEMENT

4 OUR FOUDANTIONS HUMAN CAPITAL CUSTOMER EXPERIENCE SERVICES QUALITY CREDIT AND CAPITAL MANAGEMENT DIGITAL TRANSFORMATION EFFICIENCY PROFITABILITY

5 Risks Credit Market Operational Investment Credit Liquidity Reserve Requirements Funding Capital + Interest + Fees Capital + Interest - Fees Result Treasury Equity Basel III and IV Capital Market, Payment Methods, Insurance and Pension Plan Financial Results Capital Remuneration Profit or Loss Capital

6 PERSPECTIVES GDP 1,50 1, ,50 Quarterly Change (%) (seasonally adjusted) 0,00-0,50-1, ,50-2,00-2, Source: BCB / IBGE / BB (projections).

7 PERSPECTIVES SELIC RATE/INFLATION Interest Rate at historical levels Inflation under/close to the goal SELIC IPCA Source: BCB / IBGE / BB (projections).

8 PERSPECTIVES CREDIT 10,00 8,00 6, ,00 2,00 - (2,00) (0.70) (4,00) (6,00) (7.10) (8,00) Loan Operations Individuals Companies Source: BCB / BB (projections).

9 PERSPECTIVES CORPORATE STRATEGY OTHER PROMISING MARKETS INSURANCE OPEN BANKING PAYMENT METHODS NON-CLIENTS CAPITAL MARKET

10 PERSPECTIVES CORPORATE STRATEGY FOREIGN TRADE Worldwide growth- Brazil main Partners 4.3 USA Euro Area China Argentina World India Source: FMI.

11 PERSPECTIVES CORPORATE STRATEGY FOREIGN TRADE World Imports x Brazilian Exports 14% % 250 Change 10% 8% 6% % 100 2% 50 0% Volume R$ billion Source: Oxford Economics.

12 PERSPECTIVES CORPORATE STRATEGY GOVERNANCE Responsibilities Segregation Committee Decision To ensure an appropriate control system and to mitigate conflict of interest, BB clearly segregates roles and responsibilities Decisions at any level of the Company are made in Committees, involving several executives in the definition of strategies and proposals for the different businesses lines of Banco do Brasil Committees' Structure Risk management: Defense lines Model Strategic committees' structure decentralize the decision-making process and increase the participation of the Executive Board's members Risk and control management involves the entire organization and is considered essential to achieve the Organization's objectives

13 PERSPECTIVES CORPORATE STRATEGY GOVERNANCE The only Brazilian Bank listed, since 2006 Programs and Certificates Adequacy of BB to the Lei das Estatais¹, one year in advance of the legal deadline Program for State-owned companies with distinguished governance Certificate, created by B3 Level 1 Governance Seal Certificate at IG-SEST BB achieved the maximum score in every evaluated item (1) Regulation for State-owned Companies.

14 PERSPECTIVES CORPORATE STRATEGY GOVERNANCE 2017 Governance Highlights Comprehensive review of BB's Bylaws Code of Ethics and Standards of Conduct Review Governance Internal Regulations Review Development of a policy governing transactions with related parties Creation of the Indication and Succession Policy (members of the Board of Directors, Board of Officers and Fiscal Council) Preparation of the Annual Chart of Public Policies and Corporate Governance Reference Form upgrade (State-owned companies with distinguished governance, B3) Corporate Governance Code Review

15 PURPOSE TAKE CARE OF WHAT MATTERS TO PEOPLE

16 APIMEC BANCO DO BRASIL 2017 SOCIAL-ENVIRONMENTAL AND FINANCIAL PERFORMANCE PANEL BERNARDO ROTHE / CFO

17 Disclaimer This presentation may include references and statements, planned synergies, estimates, projections of results, and future strategy for Banco do Brasil, its Associated and Affiliated Companies, and Subsidiaries. Although these references and statements reflect the management s belief, they also involve estimates and unforeseen risks. Consequently, results may differ from those anticipated and discussed here. These expectations are highly dependent on market conditions, on Brazil s economic and banking system performances, as well as on international market conditions. Banco do Brasil is not responsible for updating any estimate in this presentation.

18 Index More than 200 years of history 4 Sustainability Approach 5 Fundação Banco do Brasil 6 Culture Support 7 Sponsored Sports 8 Ownership Structure 9 Share Performance 10 Market Indicators 11 Adjusted Net Income 12 Loan Portfolio 13 Loans to Individuals 14 Disbursements 17 Quality of the loan portfolio 18 ALL Balance and Coverage Ratio 19 Delinquency control 20 Net Interest Income and Spread 21 Risk-adjusted pricing 22 Fee Income 23 Administrative expenses 24 Cost to Income Ratio 25 Common Equity Tier I 26 Guidance Loans to Companies 15 Disbursements to Plano Safra 16

19 More than 200 years of history Founded in st company listed on the stock exchange in Brazil Diversified and stable funding International Franchise Diversified Businesses 4

20 Sustainability Approach Market Regulators Demands Sustainability Plan Agenda 30 BB Most prominent global agreements UN defined 17 sustainable development objectives and 169 goals Change in consumer behavior 80% of the investors consider nonfinancial performance supervision by senior management as "essential" or "important 1 (1) EY, Tomorrow s Investment Rules 2.0, 2015 Social Dimension Economic Dimension CSER* Governance and socio-environmental risk management Socially Responsible Businesses and Private Social Investment Increasing demand for nonfinancial information Stock Exchanges are demanding for more disclosure of nonfinancial, risk and performance information Growing and stricter regulation Need to better manage risks Environment Dimension Environmentally responsible businesses and conscious use of natural resources * Corporate Social and Environmental Responsibility 5

21 Fundação Banco do Brasil R$ 2.6 billion disbursed since 2007 in actions to generate jobs and income, community development and the environment, along with education projects. 3.8 million participants 2,048 municipalities served 6,543 projects Vetores de Atuação Solid Waste Water Education Agroecology Agroindustry 6

22 Culture Support 4 Cultural Centers in the country More than 7 million de visitors from Jan/2016 to Jun/2017 The 3 most seen exhibitions in the World in 2016¹ Rio de Janeiro Brasília São Paulo Belo Horizonte (1) According to The Art Newspaper article 1 st Triunfo da Cor; 2 nd ComCiência and 3 rd Castelo Ra-Tim-Bum. 7

23 Sponsored Sports Beach Volleyball 25 years partnership 13 Olympic medals Indoor Volleyball 25 years partnership 9 Olympic medals Social Inclusion Projects: Beach volley schools, Vivavôlei and social activities with sports ambassadors Handball 4 years partnership 1 world championship Social Inclusion Projects Minihand Running 1 st edition 8 stages 24 thousand registered 8

24 Ownership Structure¹ and Value Generation Sep/ Free Float: 45.6% Federal Government: National Treasury 52.2% Sovereign Fund 2.2% Federal Government Foreign Capital Local Capital (1) Does not consider the shares owned by the Company R$ 2.3 billion distributed through Dividends and Interest on Own Capital in the 9M17. Dividend yield of 2.68% in the 3Q17. 9

25 Share Performance Change BBAS3 Last 12 months 20.3% In % 5 Years 96.9% 10 Years 102.5% 15 Years 2,427.3% 2,280.5% 423.0% jan.02 jan.03 jan.04 jan.05 jan.06 jan.07 jan.08 jan.09 jan.10 jan.11 jan.12 jan.13 jan.14 jan.15 jan.16 jan.17 BBAS3 Ibovespa BBAS3 Closing price adjusted by proceeds between Jan 02, 2002 and Dec 05, Source: Economática. 10

26 Market Indicators Earnings per Share Q16 4Q16 1Q17 2Q17 3Q E¹ 2018E¹ Earnings per Share - R$ Adjusted Earnings per Share - R$ Price/Earnings 12 months Price/Book Value Q16 4Q16 1Q17 2Q17 3Q E¹ 2018E¹ 3Q16 4Q16 1Q17 2Q17 3Q E¹ 2018E¹ (1) Bloomberg estimative in December 04, 2017 based on analysts projections average. Banco do Brasil is not responsible for this information. 11

27 Adjusted Net Income % ROE¹ 9M16 9M17 9.1% 12.3% 9M16 Adjusted Net Income 3Q R$ billion 9M17 Adjusted Net Income 1H Adjusted Earnings per Share - R$ (1) ROE Market: reflects the metrics that leading market analysts use in their estimates. 12

28 Loan Portfolio - Expanded View¹ R$ billion % % Share Sep/16 Dec/16 Mar/17 Jun/17 Sep/17 Share Foreign Branches and Subsidiaries Agribusiness Individuals Companies Perfomance in 12 months (%) 1) It includes private securities and guarantees provided. 13

29 Loans to Individuals¹ +1.2% R$ billion % Less risky lines Sep/16 Jun/17 Sep/17 Payroll Loan Mortgage Salary Loan Auto Loan Other (1) It considers the organic Loan Portfolio. 14

30 Loans to Companies¹ -15.5% -3.4% Sep/16 Jun/17 Sep/17 Very Small and Small Companies² Middle Market, Corporates and Government Chg. (%) on Jun/17-9.9% -1.8% Very Small and Small Companies Disbursements Increase in the participation of receivables lines from 55.8% in 9M16 to 62.6% in 9M17 Capital Markets R$ billion Revenues of R$ 548 million in 9M17, growth of 13% compared to the same period of the previous year (1) It includes private securities and guarantees provided. (2) Companies with annual revenues up to R$ 25 million. 15

31 Disbursements to Plano Safra reached R$ 19.3 billion Agribusiness loan potfolio¹ +0.6% -4.0% Chg. (%) on Sep/16 Chg. (%) on Jun/ % -19.2% +5.0% -1.1% 60.1 % Market Share² Disbursements in the 3rd Quarter Plano Safra +24.1% % 18.8% 19.6% 26.9% 64.9% 54.3% R$ billion Sep/16 Jun/17 Sep/17 Crop 16/17 Crop 17/18 Agroindustrial Rural Medium Size Producers - Pronamp Small Producers - Pronaf Companies (1) It includes Rural Product Bills and guarantees provided. (2) Source: Brazilian Central Bank Sep/

32 Disbursements quarterly average¹ (1Q16 base 100) Brazil Individuals % % Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 Agribusiness Companies % % Q16 2Q16 3Q16 4Q16 1Q17 2Q17 (1) Does not include revolving lines of credit and overdraft. 3Q17 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 17

33 Quality of the loan portfolio Delinquency Ratio (+90 days)¹ Delinquency Ratio¹ by Segment (+90 days)¹ % Sep/16 Dec/16 Mar/17 Jun/17 Sep/17 Sep/16 Dec/16 Mar/17 Jun/17 Sep/17 BB Banking Industry Individuals Companies Agribusiness (1) BB Classified Loan Portfolio. 18

34 ALL Balance and Coverage Ratio Coverage Ratio (%) R$ billion Sep/16 Dec/16 Mar/17 Jun/17 Sep/17 Required Provision Minimum Provision Supplementary Provision Index BI +90 days¹ Allowance for Loan Losses R$ billion 3Q16 4Q16 1Q17 2Q17 3Q17 (1) Banking Industry: Ratio created through Average Risk Index available at SGS (Time Series Management System) of the Brazilian Central Bank 19

35 Delinquency control 0.81 Total NPL Formation Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 New NPL (R$ billion)¹ New NPL / Loan Portfolio (%)² NPL Formation Companies portfolio Cost of credit³ (%) Q15 4Q15 1Q16 2Q16 New NPL (R$ billion)¹ 3Q16 4Q16 1Q17 2Q17 New NPL / Loan Portfolio (%)² 3Q17 3Q16 4Q16 1Q17 2Q17 3Q17 (1) Quarterly change in the balance of over 90 days past due transactions + current quarter write-off. (2) It considers the Classified Loan Portfolio of the previous quarter. (3) Flow of the Renegotiated loan portfolio contracts of over 90 days past due transactions. 20

36 Net Interest Income and Spread 3Q16 2Q17 3Q17 Chg. (%) on Chg. (%) on 9M16 9M17 3Q16 2Q17 9M16 Net Interest Income (R$ milhões) 15,099 14,606 14,247 (5.6) (2.5) 44,008 43,330 (1.5) Net Interest Income W/O Recovery 14,131 13,212 13,153 (6.9) (0.4) 40,796 39,886 (2.2) Loan Operations 26,117 21,786 21,412 (18.0) (1.7) 76,506 66,809 (12.7) Funding Expenses (11,366) (8,404) (7,814) (31.3) (7.0) (33,330) (25,972) (22.1) Financial Expense for Institutional Funding¹ ³ (3,524) (3,040) (3,197) (9.3) 5.2 (10,358) (9,603) (7.3) Treasury² ³ 2,904 2,870 2,753 (5.2) (4.1) 7,978 8, Recovery of Write-offs 968 1,394 1, (21.6) 3,212 3, (1) It includes senior bonds, subordinated debt, and Hybrid Instruments in Brazil and abroad. (2) It includes the result from interest, tax hedging, derivatives, and other financial instruments that offset the effects of the exchange rate variation on result. (3) Series revised (Funding Expense for Institutional Funding to Treasury). Net Interest Margin¹ (%) Q16 4Q16 1Q17 2Q17 3Q17 Net Interest Margin (NIM) Risk Adjusted NIM (1) Net interest income / average balance of earnings assets, annualized. 21

37 Risk-adjusted pricing Loans Spread (%) Q16 4Q16 1Q17 2Q17 3Q17 Individuals Loan Operations Companies¹ Agribusiness (1) Government loans not included. 22

38 Fee Income increased by 9.9% +9.9% +11.3% R$ billion Highlights 9M16 9M17 Checking Account Fees % 4.1 9M16 9M17 9M16 9M17 Fee Income 3Q Fee Income 1H Asset Management Fees 23

39 Rigid control of administrative expenses % Employees Branches Sep/16 Sep/17 109,159 99,305 5,430 4,871 Chg. (%) Traditional Branches 5,192 4, Digital Service ,3 Estilo Branch Estilo Office - 9-9M16 9M17 Exclusivo Office MPE¹ Office Administrative Expenses 3Q Administrative Expenses 1H R$ billion Points of Service 1,736 2,062 Customer Service Points (1) Very Small and Small Companies. 24

40 With continuous improvement in Cost to Income Ratio¹ Q16 4Q16 1Q17 2Q17 3Q17 (1) Cost to Income Ratio: Administrative Expenses / Operating Revenues. Data from the Income Statement with Reallocations. 25

41 9.5% of Common Equity Tier I in 2019 % Sep/16 Dec/16 Mar/17 Jun/17 Sep/17 Tier II Tier I Common Equity Tier I Organic income generation 26

42 Guidance 2017 Guidance M17 Performance Adjusted Net Income - R$ billion 9.5 to NII (Net of Recovery of Write-offs) - % -4 to Organic Domestic Loan Portfolio - Expanded View - % -4 to Individuals - % 2 to Companies - % -11 to Rural Loans - % 6 to ALL Expenses net of Recovery of Write-offs - R$ billion to Fee Income - % 6 to Administrative Expenses - % -2.5 to

43 Av. Paulista, th. floor Bela Vista São Paulo/SP - Brasil - CEP ri@bb.com.br +55 (11)

44 APIMEC BANCO DO BRASIL 2017 DIGITAL TRANSFORMATION AND USER EXPERIENCE MARCELO LABUTO / VICE-PRESIDENT OF RETAIL BUSINESS ANTÔNIO GUSTAVO DO VALE / VICE-PRESIDENT OF TECHNOLOGY WALTER MALIENI / VICE-PRESIDENT OF RETAIL DISTRIBUTION AND HUMAN RESOURCES

45 TAKE CARE OF WHAT MATTERS TO PEOPLE

46 BB VALUES Customer Focus Protagonism Innovation Reliability Ethics Efficiency Public Spirit

47 VISION Being the company that offers a better experience for people's lives and promote the society development in an innovative, efficient and sustainable way

48 POSITION An innovative company, that connects people to their achievements

49 BB PILLARS human capital customer experience quality of services capital and credit management digital transformation efficiency profitability

50 CUSTOMER SERVICE S YEAR ON A QUARTERLY BASIS Proposition of actions with indicators and goals Analysis of relevance and completeness of these actions Actions resulting from the employees contributions during interactions with the Board of Officers (throughout the whole country) selection Approval of the set of actions for the quarter Dissemination of actions to the Bank Caffarelli, CEO Monthly monitoring the indicators of actions implemented SOME IDEAS ALREADY IMPLEMENTED 1,057 branches with Wi-Fi available to customers and more than 2 thousand until August 2018 Emission of password in the app, with the expected time of service in the branch chosen Improved service with the BB 3.0 Platform: higher performance, customer dashboard with propensity intelligence and most demanded solutions available at one-click

51 BB S CUSTOMERS 65.8 million customers 36.6 million accounts 1.4 million of Contas Fácil

52 SPECIALIZED SERVICES Ecosystem optichannel (customer choose when and where to be served) Estilo Exclusivo Microempresa Empresa Agro Varejo 258 branches 63 offices 123% 39 offices 95% 108 branches 182% 309 specialized branches automated approach 1,2 mm customers 1,1 mm customers 113 thousand customers 155 thousand customers 68,3 thousand customers Mobile Branches / ATM / Agents in the Country [ remuneration among models / conclusive customer service in any branch of the country ]

53 SPECIALIZED SERVICES / benefits and mix of tools ACCOUNT MANAGERS/ SPECIALISTS EXTENDED HOURS TELEPHONE SERVICE VIDEO CHATS S CHAT ONLINE INSIDE THE APP FILE UPLOAD DOUBLE CONFIRMATION HIGHER OPERATIONAL CAPACITY AND INCREASE OF SATISFACTION INDEXES

54 SPECIALIZED SERVICES / implementations REGISTER INDIVIDUALS Any branch can update and confirm the update of customer info increasing the speed in service COMPANIES Instant register update, specially in most demanded items (with higher rate of complaints) AGRO / RURAL PRODUCER Automated guarantees pricing and reduction in the number of documents for the hiring of transactions PASSWORDS Revision and improvement in the process of register and unblocking of passwords via new app solution MODULAR SERVICE PACKAGE (COMPANIES) Service package that agreggates cash management services, along with the revision os access and special rates AGRO Fewer steps for rural transactions analysis in order to reduce the time incurred between hiring and disbursement of agro transactions

55 SPECIALIZED SERVICES / launch of BB Visitas app BB VISITAS APP First application developed exclusively for Account Managers: Increase of qualified visits Online access to customers info List of customers needs available Companies Customer Service Panel (360º solution) Integrated Geolocation Check-in at the beginning of the visit and check-out at the end Documents, photos, or audio recordings upload Synchronization with BB Platform We are visiting 200% more compared to 2016 With an increase in the number of visits, BB is even closer to the customer and negotiates transactions with better levels of RAR¹ The disbursement of receivables lines increased from 57.7% of the daily total in the 2nd quarter to 61.2% in the 3rd quarter, a 6% increase 1. RAR Risk Adjusted Return

56 SPECIALIZED SERVICES / agribusiness Creation of 96 agro-specialized portfolios for medium and large-scale producers 308 specialized branches BB digital tools available to rural producers: GeoMapa Rural: app of measurement of areas that allows to demarcate perimeters of the properties, and send the info to BB for financing Custeio Digital: renewal of working capital for input purchase (agricultural and livestock transactions) directly via mobile app (launched in Feb/17 and Nov/17, respectively) Digital Investment: Launched in May/17

57 SPECIALIZED SERVICES / new areas Funding and Investments Specialized advice for investors and prospects Product efficiency and portfolio diversification Vision oriented to the investor's journey Foreign Trade Strengthen the Bank's performance as a business partner Centralize international business strategy Promote the development of professional skills

58 RESULTS FEE INCOME EVOLUTION ON BB S TOTAL REVENUES: 2016: Fees were 29% of Total Income IN 2017 (9 months): Fees are 31% of Total Income Indicates inflection of the curve, which will accentuate with the focus given by BB

59 video

60 DIGITAL TRANSFORMATION / channel participation (%) 72.1% Other Channels 59.7% Internet and Mobile 40.3% 27.9% SEP/11 SEP/12 SEP/13 SEP/14 SEP/15 SEP/16 SEP/17

61 DIGITAL TRANSFORMATION / numbers 21.8 MM ENABLED USERS (INTERNET + APP) Customers with active account and internet password enabled 21.8 MM MM MILLION MOBILE USERS

62 DIGITAL TRANSFORMATION / numbers ATM COMMUNICATION AVAILABILITY BRANCH SERVER BB WEBSITE DAILY ACCESS (on average) 4.0 million Mobile 0.8 million Internet APP S EVALUATION 4.5 Google Play 4.1 Apple Store 99.4% 99.3% 100% 1 thousand branches with 2 thousand until Aug/18 Wi-Fi WhatsApp Facebook Instagram Google + Banco do Brasil 5 Brazilians favorite apps If you could install only one app in your phone which one would it be? BB is the only financial app listed! MOBILE TIME/OPINION BOX MAY/17 CHAT SERVICE Fale com seu Gerente : 2.5 MM Estilo/Exclusivo/MPE For accounts opened via app: 18 thousand active customers 96.5% of demands are solved CHATBOT MESSENGER Machine Learning (IBM Watson) 81% efectiveness 42% FCR no need of additional human interaction (First Call Resolution)

63 DIGITAL TRANSFORMATION / core banking digitization 2017 HIGHLIGHTS ACCOUNT OPENING APPS UNIFICATION I N D I V U I D U A L S / C O M P A N I E S / G O V E R N M E N T D E C UPDATE INFO PASSWORDS MY FINANCES CONTA FÁCIL OPENING I N D I V I D U A L S / M E I ¹ INSURANCE CONSORTIUM AND PREMIUM BONDS TRANSFER OF LIMITS AMONG CREDIT LINES DEBT SOLUTION INVESTIMENTS SIMULATION 1 - I n d i v i d u a l e n t r e p e n e u r. MORTGAGE SIMULATION

64 DIGITAL TRANSFORMATION / share (%) of auto loans hired via app Disbursement R$ 850 Million since August/15 53% Going to reach R$ 1 Bi in Dec/17 18% 2% NOV/15 NOV/16 NOV/17 Launched on app BB in AUG/15

65 DIGITAL TRANSFORMATION / monthly payroll disbursements¹ via app Increase in the portfolio s profitability Expand the portfolio on lower and neutal risk lines Improve the operational efficiency and drop in the cost of hiring 204% growth as compared to the same period of % Monthly Average disbursement in 2017: R$ 128 Milion Cumulative anual disbursements (Nov) R$ 1 Bi 1. R$ Million 9M16 9M17

66 DIGITAL TRANSFORMATION / debt solution and transfer of limits among credit lines DEBT SOLUTION VIA APP A L T E R N A T I V E S F O R C O S T U M E R S - DELINQUENCY REDUCTION - ALLL EXPENSES REDUCTION - GREATER DISBURSEMENT OF CREDIT RENEWAL 130,000 contracts R$ 1.2 billion renegotiated loans until Nov/17 ADHESION TO AUTOMATIC TRANSFER OF CREDIT LIMITS. A V A I L A B L E L I M I T S F O R O V E R D R A F T A C C O U N T, C A R D O R D I R E C T C O N S U M E R C R E D I T. - EFFICIENCY IN CAPITAL ALLOCATION. - OPTIMIZATION OF THE USE OF LIMITS. - REDUCTION OF DENIED CREDIT CARD TRANSACTIONS. 44,000 adhesions in 10 days

67 DIGITAL TRANSFORMATION / investments simulator INVESTMENTS SIMULATOR I N T H E APP Investments volume R$ 100 MM R$ 57 MM R$ 47 MM 4 months of Pilot Project More than 116,000 customers performed simulations The average value of investments in this period was R$ 15,600 Clients with a conservative profile accounted for 68% of hirings R$ 21 MM R$ 28 MM R$ 25 MM High Income segment customers made 47% of the total number of hirings Jul/26 Aug/31 Sep/30 Oct/31 Nov/07 Nov/20 Dec/01 Total Alta Renda Personalizado Varejo

68 DIGITAL TRANSFORMATION / mortgage in BB app MORTGAGE I n B B A PP STILL IN 2017 CLIENT WILL HIRE A N D F O L L O W T H E R E L E A S E O F T H E I R M O R T G A G E L O A N S T H R O U G H A N E X C L U S I V E T R A C K I N G S Y S T E M A L L V I A B B A P P 3 months pilot with 2.7 million simulations made via app by over 760 thousand clients R$ 62 Million in mortgages hired FIRST BANK IN BRAZILIAN MARKET TO PROVIDE A MOBILE SOLUTION FOR THESE TRANSACTIONS.

69 DIGITAL TRANSFORMATION / Ourocap and consortium wherever the client is, whenever he wants Ourocap Over R$ 30 million in Ourocap hired via BB App in an unprecedent Black Friday promotional action Consortium The share (%) of BB App sales reached 7.5% and for 2018 the goal is to reach 15% of new hirings via mobile. 15.0% DEC/18 App release in Feb/ thousand hirings until november Accumulated disbursement of 37 million 1.0% Sales via app are greater than! website BB and ATM combined 7.5% NOV/17 App release in May/ thousand hirings via app over R$ 220 million in effective sales Sales costs in this channel are 99.8% lower as compared to sales costs in branches!

70 DIGITAL TRANSFORMATION / Ourocard app Ourocard app highlights BB provides all sollutions in the proximity payments systems environment (NFC) Samsung Pay, Android Pay, App Ourocard, dual chip Cards and wearables (Ourocard bracelet) 400 thousand clients using Ourocard App with NFC 2.1 Million transactions with virtual cards (Ourocard-e) 65 thousand clients registered in the Samsung Pay solution Over 11 thousand Ourocard bracelets sold BB Client New card request Card delivery tracking Blocking and Unblocking Invoices and purchases inquiry Anticipation of installments Transaction contestation Enabling usage abroad Ourocard-e NFC payment Payment of purchases with points Custom cards Wearables

71 DIGITAL TRANSFORMATION / Ourocard cidades Customization with Rates Exemptions POS Rent (R$ 1 thousand revenue card/month) Package Receivables Launch in 23 cities Oct/2017 Annual Fee Expemption 12 months Credit 4 months exemption 5th to 8th month 50% Discount Government Products Basket REDUCTION IN PAPER CURRENCY RUNNING (REDUCTION IN THE RISK OF LOSS) INCREASE IN USE OF ALTERNATIVE MEANS OF PAYMENTS (DEBIT, CREDIT AND DIGITAL CHANNELS) INCENTIVE TO DIGITAL TECHNOLOGIES (USE OF BB APP AND OUROCARD) STRENGHTHENING OF LOCAL ECONOMY (RESOURCES MAINTAINED IN THE COUNTY)

72 DIGITAL TRANSFORMATION / potential of offering in digital channels CRM / ANALYTICS DIGITIZED PRODUCTS + = DIGITAL SOLUTIONS OFFERINGS Implementation of segmented Market Actions, from February 2017, obtained an amount of deals close to R$ 4.8 BILLION, being 17% made in the same channel THE CONVERTION RATIO OF CUSTOMERS THAT RECEIVED THE OFFER WAS TWICE AS HIGHER

73 TRANSFORMAÇÃO DIGITAL / my finances = financial management BB s Gerenciador Financeiro Monthly budget creation Timeline of expenses by category Income Tax advice

74 DIGITAL TRANSFORMATION / my finances = financial management O V E R 3.5 MILLION O F T O T A L U S E R S 43% ACCESS DAILY

75 DIGITAL TRANSFORMATION / my finances = financial management BUDGET 408 THOUSAND B U D G E T S C R E A T E D S I N C E T H E L A U N C H I N O C T / 1 7 R $ 405 M I L L I O N / M O N T H E C O N O M Y S T I M U L A T E D ( a v e r a g e of R $ 1, )

76 DIGITAL TRANSFORMATION / update to 2018 integration quickness functionality availability usability

77 DIGITAL TRANSFORMATION / openbanking Systems Integration through APIs For new business creation generating support for digital ecosystem Developer Website Launched in Winner of e-finance premium Open Banking category

78 DIGITAL TRANSFORMATION / openbanking + Brazil s First OPEN BANKING Partnership. Whe are changing the financial management of small companies Use of APIs for financial data synchronization Fast and easy configuration Accounts statements synchronized between the bank and the management system Coverage of all accounts (checking account, credit cards, investments, etc.) Real-time update Roadmap Api collection Api bill payments Api working capital

79 DIGITAL TRANSFORMATION / labbs [ Silicon Valley and Brasilia ] Banco do Brasil s labs of experimentation Development of services and business innovation Spread of Innovation Culture New ways of work and processes INITIATIVES DEVELOPED HERE SOLUTIONS DEVELOPED 52 35

80 DIGITAL TRANSFORMATION / labbs [ Silicon Valley and Brasília ] Labbs BB Silicon Valley, Oct,26th BB received the Corporate Innovation award during the Fall Summit, arranged by Plug and Play, one of the main startup incubators on the planet. Amongst competitors, there were enterprises like Credit Suisse, Deutsche Bank e BNP Paribas. For 2018 Expand LABBS Partnerships with startups and incubators

81 BANCO DIGITAL DEMOCRATIZE SOLUTIONS THAT SATISFIES CUSTOMER S NEEDS

82 DIGITAL BANK / ambition 5 million 3 million million Pure digital customers 2018 Dec/2017 Launch of Conta Fácil Digitization of new Products/Services Account opening on BB s app Exclusive service on CHAT Free WiFi on BB s branches NOV/16 FEB/17 JUL/17 AUG/17 SEP/17

83 DIGITAL BANK / November million Conta Fácil Immediate opening of Payment Account Opening cost 98% lower than face-to-face procedure 100% digital account upgrade option 79 thousand upgrades for checking accounts NPS (Net Promoter Score) 15% higher¹ Exclusive Sevice package for digital model /developed with customers interaction Dedicated Chat, with 96.5% success rate and 100% digital experience 1. Compared to face-to-face procedure

84 DIGITAL BANK SUSTAINABILITY AND PERENITY FOR BUSINESS, BASED ON THE RENEWAL OF CUSTOMER BASE OPERATIONAL EFFICIENCY (adequate cost of service) + CUSTOMER SATISFACTION (experience and stage of life) + SUSTAINABLE RESULT (tangible benefits) = DIGITAL BANK

85 HUMAN CAPITAL / INSPIRA BB 6 EDITIONS with over 10 thousand viewers 30 speakers (BB staff) and over 40 invited attractions WITH CULTURA TV COVERAGE over 7 million views

86 HUMAN CAPITAL / INSPIRA BB video

87 HUMAN CAPITAL / Banco do Brasil Corporate University over 30 Million UniBB website hits Average 5.7 million hits per year 24.6 million million 2017 Best Corporate University of the World in Innovation in 2017 according to Global CCU

88 HUMAN CAPITAL / Banco do Brasil Corporate University 99.4% of employees trained with focus on the improvement of customer service and BB s results 7,039,770 hours of training / Average 73 hours of training per employee 163,274 internal certifications obtained by employees 4,878 scholarships awarded for graduate, postgraduate and language courses Partnership with Korn Ferry evaluated 218 Executives

89