(Convenience Translation into English from the Original Previously Issued in Portuguese) Banco Daycoval S.A.

Transcription

1 (Convenience Translation into English from the Original Previously Issued in Portuguese) Banco Daycoval S.A. Report on Review of Interim Financial Information (ITR) for the Third Quarter of 2016 Deloitte Touche Tohmatsu Auditores Independentes

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4 Interin Financial Information 09/30/ Banco Daycoval S.A. Company information / Capital arrangement Number of shares (Units) Paid-in Capital Current quarter 09/30/2016 Commom shares 160,869,792 Preferred shares 80,594,699 Total 241,464,491 Treasury Shares Commom shares - Preferred shares 37,311,506 Total 37,311,506 3

5 Interin Financial Information 09/30/ Banco Daycoval S.A. Company information / Dividends and interest on capital Event Aproved Iten Beginning of payment Share type Share class Earnigs per share (R$ / share) Extraordinary General Meeting 09/30/2016 Interest on capital 10/17/2016 Commom Extraordinary General Meeting 09/30/2016 Interest on capital 10/17/2016 Preferred

6 Interin Financial Information 09/30/ Banco Daycoval S.A. BANCO DAYCOVAL S.A. Individual Financial Statements / Balance Sheet - Asset (In thousands of Brazilian reais - R$) Account number Account description Current quarter 09/30/2016 Prior year 12/31/ TOTAL ASSETS #REF! #REF! 1.01 CURRENT ASSETS 11,634,069 13,399, Cash and cash equivalents 128, , Interbank investments 2,999,673 3,787, Money market investments 2,868,503 3,566, Interbank deposits 110,719 87, Foreign currency investments 20, , Securities and derivatives 85, , Own portfolio 72, , Linked to repurchase commitments 1, Derivatives 10, , Linked to guarantees - 4, Interbank accounts 142, , Payments and receipts pending settlement 8, Restricted deposits - Central of Brazil 134, , Correspondents , Lending operations 5,754,934 6,118, Lending operations - Public sector 2,818 72, Lending operations - Private sector 6,166,242 6,450, (Allowance for loan losses) (414,126) (403,754) Other receivables 2,334,123 2,554, Foreign exchange portfolio 605, , Income receivable 3,576 5, Trading account , Other 1,925,232 1,947, Allowance for other loan losses (200,832) (130,571) Other assets 189, , Repossessed assets 109,547 90, (Allowance for repossessed assets losses) (15,367) (11,470) Prepaid expenses 94, , NONCURRENT LONG-TERM ASSETS #REF! #REF! Interbank investments 48,624 41, Interbank deposits 48,624 41, Securities and derivatives 2,202,816 1,480, Own portfolio 1,877, , Linked to repurchase commitments 120, Derivatives 107, , Linked to guarantees 96, , Lending operations 4,586,002 4,693, Lending operations - Public sector 46, Lending operations - Private sector 4,743,738 4,889, (Allowance for loan losses) (204,088) (196,580) Other receivables 1,749,175 1,505, Foreign exchange portfolio 3,036 5, Other 1,748,969 1,504, Allowance for other loan losses (2,830) (4,257) The accompanying notes are an integral part of these financial statements. 5

7 Interin Financial Information 09/30/ Banco Daycoval S.A. BANCO DAYCOVAL S.A. Individual Financial Statements / Balance Sheet - Asset (In thousands of Brazilian reais - R$) Account number Account description Current quarter 09/30/2016 Prior year 12/31/ Other assets 169, , Prepaid expenses 169, , PERMANENT ASSETS 487, , Investments 471, , In subsidiaries 471, , Other investments Fixed assets 16,182 22, Fixed assets in progress - 2, Other fixed assets 16,182 19,137 6

8 Interin Financial Information 09/30/ Banco Daycoval S.A. BANCO DAYCOVAL S.A. Individual Financial Statements / Balance Sheet - Liability (In thousands of Brazilian reais - R$) Account number Account description Current quarter 09/30/2016 Prior year 12/31/ TOTAL LIABILITIES 20,877,578 21,846, CURRENT LIABILITIES 10,149,783 10,882, Deposits 3,513,156 3,162, Demand deposits 500, , Interbank deposits 424, , Time deposits 2,581,232 2,108, Foreign currency deposits 7,618 8, Money market funding 1,549, , Own portfolio 122, Third parties 1,427, , Funds from acceptance and issuance of securities 2,919,607 4,163, Mortgage loan notes 428, , Agrobusiness letter of credit 420, , Financial bills 2,067,329 2,089, Securities issued abroad 3,547 1,233, Interbank accounts 10,777 3, Interbranch accounts 118,249 41, Borrowings 1,119,953 1,515, Foreign borrowings 1,119,953 1,515, Domestic onlendings 115, , BNDES 60,107 80, FINAME 55,680 61, Other payables 802, , Collected taxes and other 13,010 6, Foreign exchange portfolio 182, , Social and statutory 75,873 62, Tax and social security 206, , Trading account , Derivatives 3,920 9, Other 321, , NONCURRENT LONG-TERM LIABILITIES 8,166,888 8,155, Deposits 1,815,328 1,630, Interbank deposits 16, , Time deposits 1,799,227 1,473, Funds from acceptance and issuance of securities 3,619,445 3,843, Mortgage loan notes 87,371 96, Agrobusiness letter of credit 31,478 4, Financial bills 1,831,828 1,886, Securities issued abroad 1,668,768 1,855, Borrowings 322,311 1,004, Foreign borrowings 322,311 1,004, Domestic onlendings 177, , BNDES 94,554 19, FINAME 82, , Other payables 2,232,332 1,553, Foreign exchange portfolio Tax and social security 1,625,336 1,356, Derivatives 816 1, Other 606, , DEFERRED INCOME 23,432 21, SHAREHOLDERS' EQUITY 2,537,475 2,786, Realized Capital 1,892,143 1,892, Capital 1,892,143 1,892, Capital Reserve Earnings reserves 573, , Legal 132, , Bylaws 780, , Other profit reserves (339,722) (11,568) Treasury shares (339,722) (11,568) Adjustment to asset valuation (12,751) (38,239) Adjustments of securities (12,751) (38,239) Retained earnings 84,513 - The accompanying notes are an integral part of these financial statements. 7

9 Interin Financial Information 09/30/ Banco Daycoval S.A. BANCO DAYCOVAL S.A. Individual Statements of Income (In thousands of Brazilian reais - R$) Account number Account description Accumulated in the current quarter from 07/01/2016 to 09/30/2016 Accumulated in the current year from 01/01/2016 to 09/30/2016 Equal prior year's quarter 07/01/2015 to 09/30/2015 Accumulated in the previous year from 01/01/2015 to 09/30/ INCOME FROM FINANCIAL INTERMEDIATION 974,256 2,038,664 2,084,072 4,415, Lending operations 741,192 2,163, ,400 2,229, Securities transactions 179, , , , Derivatives 17,750 (651,779) 854,927 1,396, Foreign exchange transactions 35,650 30, , , EXPENSES ON FINANCIAL INTERMEDIATION (705,981) (1,859,427) (1,931,391) (3,753,918) Funding operations (471,350) (1,230,535) (1,222,662) (2,437,424) Borrowings and onlendings (53,367) (98,603) (538,596) (809,592) Financial assets sale or transfer (22,996) (40,708) (14,258) (28,914) Allowance for loan losses (158,268) (489,581) (155,875) (477,988) 3.03 GROSS PROFIT FROM FINANCIAL INTERMEDIATION 268, , , , OTHER OPERATING (EXPENSES) INCOME (137,252) 176,024 (105,418) (314,598) Income from services provided 23,505 68,294 24,180 73, Personnel expenses (67,234) (186,958) (58,779) (176,609) Other administrative expenses (124,173) (351,328) (116,600) (358,848) Tax expenses (23,163) (77,460) (23,709) (75,585) Other operating income 92, , , , Other operating expenses (47,823) (231,138) (50,743) (153,521) Equity income 9,472 15,772 18,191 27, INCOME FROM OPERATIONS 131, ,261 47, , NONOPERATING (EXPENSES) INCOME (2,272) (38) (459) (5,868) Income 3,723 18,314 5,304 8, Expenses (5,995) (18,352) (5,763) (14,050) 3.07 INCOME BEFORE TAXES ON INCOME AND PROFIT SHARING 128, ,223 46, , Provision for income and social contribution taxes (72,572) (231,344) (36,513) (189,724) Provision for income tax (39,747) (127,003) (21,312) (116,440) Provision for social contribution (32,825) (104,341) (15,201) (73,284) 3.09 Deferred tax credits 45, ,737 91, , Profit Sharing (11,524) (34,592) (16,405) (45,672) Profit Sharing (11,524) (34,592) (16,405) (45,672) 3.13 NET INCOME (LOSS) 90, ,024 85, , Earnings per share - (R$ / share) The accompanying notes are an integral part of these financial statements. 8

10 Interin Financial Information 09/30/ Banco Daycoval S.A. BANCO DAYCOVAL S.A. Individual Statements of Comprehensive Income (In thousands of Brazilian reais - R$) Account number Account description Accumulated in the current quarter from 07/01/2016 to 09/30/2016 Accumulated in the current year from 01/01/2016 to 09/30/2016 Equal prior year's quarter 07/01/2015 to 09/30/2015 Accumulated in the previous year from 01/01/2015 to 09/30/ NET INCOME 90, ,024 85, , OTHER COMPREHENSIVE INCOME 6,832 25,488 (30,559) (26,211) Adjustments to asset valuation - adjustments of securities available for sale 12,422 46,342 (55,562) (47,656) Deferred tax in adjustments to asset valuation - securities available for sale (5,590) (20,854) 25,003 21, COMPREHENSIVE INCOME 97, ,512 55, ,765 The accompanying notes are an integral part of these financial statements. 9

11 Interin Financial Information 09/30/ Banco Daycoval S.A. BANCO DAYCOVAL S.A. Individual Statements of Cash Flow (In thousands of Brazilian reais - R$) Account number Account description Accumulated in the current year from 01/01/2016 to 09/30/2016 Accumulated in the prior year from 01/01/2015 to 09/30/ CASH FROM OPERATING ACTIVITIES 1,843,825 1,825, NET CASH PROVIDED BY OPERATING ACTIVITIES 916, , Net income 245, , Depreciation and amortization 3,499 4, Deferred taxes (155,737) (168,423) Allowance for risks 313, , Allowance for other loan losses (3,479) 2, Allowance for loan losses 420, , Allowance for losses on other assets 68,834 95, Allowance for Avals and Sureties 3,897 2, Equity income (15,772) (27,141) Effects of exchange rate change on cash and cash equivalents 36,590 20, CHANGES IN ASSETS AND LIABILITIES 927,150 1,131, (Increase) Decrease in interbank investments (46,600) (72,974) (Increase) Decrease in securities and derivatives (379,997) (150,892) (Increase) Decrease in interbank and interbranch accounts 167,626 (5,892) (Increase) Decrease in lending operations 40,695 (1,422,606) (Increase) Decrease in other receivables 65, , (Increase) Decrease in other assets 80,477 (13,989) Increase (Decrease) in deposits 534, , Increase (Decrease) in money market funding 122, , Increase (Decrease) in funds from acceptance and issuance of securities 208, , Increase (Decrease) in borrowings and onlendings (145,714) 209, Increase (Decrease) in other payables 375, , Income tax and social contribution paid (97,121) (84,505) Increase (Decrease) in deferred income 1,526 8, NET CASH IN INVESTING ACTIVITIES (483) (1,129) Acquisition of property, plant and equipment (483) (1,129) 6.03 NET CASH IN FINANCING ACTIVITIES (3,095,587) 614, (Purchase) Sale of own shares (366,224) 3, Increase (Decrease) in funds from acceptance and issuance of securities (1,676,213) (230,699) Increase (Decrease) in borrowings and onlendings (904,182) 913, Interest on Own Capital / Dividends Paid (148,968) (70,640) 6.04 EFFECTS OF EXCHANGE RATE CHANGE ON CASH AND CASH EQUIVALENTS (36,590) (20,582) 6.05 INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (1,288,835) 2,418, Cash and cash equivalents at beginning of period 2,878,443 1,924, Cash and cash equivalents at end of period 1,589,608 4,343,236 The accompanying notes are an integral part of these financial statements. 10

12 Interin Financial Information 09/30/ Banco Daycoval S.A. BANCO DAYCOVAL S.A. Individual Statements of Changes in Equity - from 01/01/2016 to 09/30/2016 (In thousands of Brazilian reais - R$) Account number Account description Capital Capital reserves Revaluation reserves Earnings reserves Retained earnings Adjustments of patrimonial evaluation Shareholders equity 5.01 Opening balance 1,892, ,037 - (38,239) 2,786, Adjusted balance 1,892, ,037 - (38,239) 2,786, Net income (Loss) for the period , , Allocation ,723 (161,287) - (153,564) Interest on capital (153,564) - (153,564) Other destinations ,723 (7,723) Legal reserve ,723 (7,723) Realization of Retained earnings , Valuation adjustments to equity , Adjustment Securities , Increase/Decrease of Capital - (776) - (366,224) (366,224) Acquisition of treasury shares (328,154) - - (328,154) Redemption of treasury shares (38,070) - - (38,070) Grant of recognized share's purchase options ("vesting period") - (220) Exercise of options to purchase shares granted - (556) Closing balance 1,892, ,536 84,513 (12,751) 2,537,475 The accompanying notes are an integral part of these financial statements. 11

13 (Quaterly Information 09/30/ Banco Daycoval S.A.) BANCO DAYCOVAL S.A. Individual Statements of Changes in Equity - from 01/01/2015 to 09/30/2015 (In thousands of Brazilian reais - R$) Account number Account description Capital Capital reserves Revaluation reserves Earnings reserves Retained earnings Adjustments of patrimonial evaluation Shareholders equity 5.01 Opening balance 1,892, ,995 - (19,998) 2,522, Adjusted balance 1,892, ,995 - (19,998) 2,522, Net income (Loss) for the period , , Allocation ,421 (119,113) - (109,692) Interest on capital (109,692) Other destinations ,421 (9,421) Legal reserve ,421 (9,421) Valuation adjustments to equity (26,211) (26,211) Adjustments of securities (26,211) Constitution / Realization of Capital Reserves Grant of recognized share's purchase options ("vesting period") Exercise of options to purchase shares granted - (437) Realization of equity securities - (201) Treasury Shares , , Other - - (930) - 1, Realization of revaluation reserves - - (1,294) - 1, Tax and social contribution of revaluation reserves Closing balance 1,892, , ,874 (46,209) 2,664,567 The accompanying notes are an integral part of these financial statements. 12

14 Interin Financial Information 09/30/ Banco Daycoval S.A. BANCO DAYCOVAL S.A. Individual Statements of Value Added (In thousands of Brazilian reais - R$) Account number Account description Accumulated in the current year from 01/01/2016 to 09/30/2016 Accumulated in the prior year from 01/01/2015 to 09/30/ REVENUE 2,415,309 4,275, Income from financial intermediation 2,038,664 4,659, Revenue from services 68,294 73, Allowance for loan losses (489,581) (477,988) Other 797,932 20, EXPENSES ON FINANCIAL INTERMEDIATION (1,369,846) (3,275,930) 7.03 INPUTS PURCHASED FROM THIRD PARTIES (336,432) (342,456) Materials and utilities (51,848) (72,324) Outside services (284,728) (270,132) Loss / Recovery asset values GROSS VALUE ADDED 709, , RETENTION (3,499) (4,715) Depreciation and amortization (3,499) (4,715) 7.06 WEALTH CREATED 705, , WEALTH RECEIVED IN TRANSFER 15,772 27, Equity income 15,772 27, TOTAL WEALTH FOR DISTRIBUTION 721, , DISTRIBUTION OF WEALTH 721, , EMPLOYEES 193, , Salaries and wages 130, , Benefits 57,165 66, Severance pay fund - FGTS 5,553 5, TAXES 271, , Federal 264, , State 1,956 1, Municipal 5,634 4, THIRD PARTIES 11,253 11, Rental 11,253 11, SHAREHOLDERS 245, , Interest on capital 153, , Retained earnings for the period 91, ,284 The accompanying notes are an integral part of these financial statements. 13

15 Message from the Management Recent data on the Brazilian economy still shows no signs of recovery. However, with the Chamber of Deputies approving PEC 241, which limits Government spending, coupled with a drop in current inflation, strengthening the Central 's decision to reduce the interest rate for the first time in four years. We believe that the continuing fiscal commitment is crucial for interest rates to continue falling. We ended the third quarter of 2016 with Recurring Net Income of R$ 85.8 million, 2.3% down compared to 2Q16, Recurring ROAE of 12.5% p.a. and NIM-AR of 12.8% p.a. In 9M16, the Recurring Net Income was R$ million, 1.5% up on the same period in the previous year, demonstrating that even with the scenario of high default and low demand, the has maintained a steady growth annually. The balance of the expanded credit portfolio ended the quarter at R$ 13,427.5 million, remaining virtually stable in relation to 2Q16 and up 2.6% compared to the last 12 months. The business credit segment ended the quarter with a balance of R$ 7,477.7 million, slight increase of 1.4% over 2Q16 and up 4.8% on 3Q15, demonstrating that the is in line with its policy of sustainable growth in this uncertain environment. Funding was aligned with the Loan Portfolio's values, currencies and maturities for another quarter. The amount totaled R$ 13,508.4 million, stable with 2Q16. In October, we had the 5th Public Local Bond Issue, for the amount of R$ 400 million with a wide spread of investors and lower funding costs. With this, the may extend the average maturity of the credit transactions In this quarter, we saw an improvement in default indicators. The Loan Loss Provision was R$162.2 million in 3Q16, 7.4% down on 2Q16. The rate of overdue by more than 90 days improved by 0.1 p.p. compared to 2Q16 and the rate of overdue by more than 14 days improved 0.3 p.p. This is the second consecutive quarter that shows this improvement and the balance of the E-H portfolio ended the quarter at R$ million, an improvement of 5.0% in the quarter. We understand that the indicators are still at high levels. In August 2016, the public share offering was successfully carried out, where the repurchased 58,394,941 preferred shares for R$ 530,226, Despite all the instability that the political and economic environment has brought to Brazil, we are seeing an increase in demand for Daycoval, but we continue to have a conservative strategy in credit while maintaining diversification, working with high margins and strength in guarantees.

16 Profitability Recurring Net Income of R$ 85.8 million and Recurring ROAE of 12.5% p.a. ROAE and ROAA (R$ mn) 3Q16 2Q16 Chg. % 3Q15 Chg. % 9M16 9M15 Chg. % R ecurring Net Income (A1) % % % Net Income (A) % % % Average S hareholders' E quity (B) 2, , % 2, % 2, , % Average A s s ets (C) 20, , % 21, % 20, , % Recurring Return on Average Equity (ROAE) (% p.a.) (A1/B) 12.5% 12.3% 0.2 p.p 15.2% -2.7 p.p 12.7% 13.4% -0.7 p.p R eturn on Average E quity (R OA E) (% p.a) (A/B) 13.2% 9.7% 3.5 p.p 12.8% 0.4 p.p 11.7% 13.9% -2.2 p.p R ecurring R OAA (% p.a) (A/C) 1.7% 1.7% 0.0 p.p 1.9% -0.2 p.p 1.8% 1.7% 0.1 p.p R eturn on Average As s et (R OAA) (% p.a.) (A/C) 1.8% 1.4% 0.4 p.p 1.6% 0.2 p.p 1.6% 1.8% -0.2 p.p Daycoval obtained a Net Income of R$ 90.6 million, up 30.9% on 2Q16. If we consider that in 2Q16, there was a negative mark-tomarket impact on the foreign funding hedge of R$ 8.8 million and R$ 9.8 million negative from the exchange variation of Brach, at 3Q16 these same items resulted in a positive impact of 5.7 million, coupled with a lower expense for the loan loss provision in the quarter, which all together resulted in a positive impact on net income this quarter. In 9M16, Net Income reached R$ million, 10.6% down on the same period in the previous year. The Recurring Net Income was R$ 85.8 million in 3Q16, 2.3% down on 2Q16. This quarter we have had a R$ 4.7 million positive impact from the mark-to-market on the foreign funding hedge. In 9M16, the Recurring Net Income reached R$ million, up 1.5% on the same period in the previous year, showing that a gradual increase in margins has been offsetting high rates of default. We do not perform mark-to-market on foreign funding that is not subject to hedge accounting. However, we perform it on their respective hedges, and therefore, consider this mark-to-market as non-recurring. Recurring Key Figures (R$ mn) 3Q16 2Q16 Chg. % 3Q15 Chg. % 9M16 9M15 Chg. % Net Income % % % Majoração CSL n.a. Hedge/MTM R $ (mn) 4.7 (8.8) n.a. (110.8) n.a. 9.1 (100.0) n.a. Hedge Interest rate (DI) R $ (mn) (0.9) 0.0 n.a n.a. (13.0) 35.9 n.a. E xchange Variation - E quivalence - B ranch 1.0 (9.8) n.a n.a. (18.6) 34.5 n.a. Adjusted Net Income % % % S hareholders E quity 2, , % 2, % 2, , % Total As sets 20, , % 21, % 20, , % Adjusted ROAA (%) 1.7% 1.7% 0.0 p.p 1.9% -0.2 p.p 1.8% 1.7% 0.1 p.p Adjusted ROAE (%) 12.5% 12.3% 0.2 p.p 12.8% -0.3 p.p 12.7% 13.4% -0.7 p.p Adjusted E ficiency Ratio (%) 37.0% 34.6% 2.4 p.p 32.5% 4.5 p.p 34.4% 33.8% 0.6 p.p

17 Recurring Net Income and Net Income / Recurring ROAE and ROAE / Recurring ROAA and ROAA Net Income Adjusted and Recurring-(RS mn) Net Income-(R$ mn) Q15 4Q15 1Q16 2Q16 3Q16 9M15 9M16 3Q15 4Q15 1Q16 2Q16 3Q16 9M15 9M16 Return on Average Equity (ROAE) Adjusted and Recurring-(% yoy) Return on Average Equity (ROAE)-(%yoy) Q15 4Q15 1Q16 2Q16 3Q16 9M15 9M16 3Q15 4Q15 1Q16 2Q16 3Q16 9M15 9M16 Return on Average Asset (ROAA) Adjusted and Recurring-(% yoy) Return on Average Asset (ROAA)-(% yoy) Q15 4Q15 1Q16 2Q16 3Q16 9M15 9M16 3Q15 4Q15 1Q16 2Q16 3Q16 9M15 9M16

18 Recurring Interest Margin (NIM-AR) of 12.8% p.a. in the quarter. Recurring Interest Margin (NIM-AR) For the sake of better comparison, we are now disclosing this indicator, which takes into consideration the exchange variances on liability transactions and foreign trading. Moreover, it excludes the value of the tri-party repurchase agreements, booked under Current Liabilities, from the Interest-bearing Assets, considering that this amount, even when relevant in the composition of Interestbearing Assets, results in virtually a zero-interest margin in relation to the traded volume. The Adjusted and Recurring Net Interest Margin (NIM-AR) was 12.8% p.a. in 3Q16, virtually stable compared to 2Q16. We have managed to keep our recurring margin (NIM-AR) at high levels, around 12.0% p.a. over the past few years. Recurring Adjusted Net Interest Margin (NIM-AR) (%) 3Q16 2Q16 Chg. % 3Q15 Chg. % 9M16 9M15 Chg. % Income from Financial Intermediation adjusted by Loan Loss Provision and Exchange Rate Variation R$ (mn) % % 1, , % Hedge/MTM R $ (mn) 8.5 (16.0) n.a. (194.3) n.a (176.3) n.a. Hedge Interes t rate (DI) R $ (mn) (1.6) 0.1 n.a n.a. (23.7) 62.5 n.a. Recurring R Adjusted Income from Financial ncial Intermediation (A) R$ R $ (mn) % % 1, , % Average R emunerated Assets R $ (mn) 17, , % 18, % 18, , % (-) E xpenses of financial intermediation add back provisions R $ (mn) (1,286.7) (1,191.2) 8.0% (636.2) n.a. (1,197.7) (814.8) n.a. Average Remunerated Assets (B) R$ (mn) 16, , % 18, % 16, , % Recurring Adjusted Net Interest Margin (NIM-AR) (%p.a.) (A/B) 12.8% 12.9% -0.1 p.p 11.8% 1.0 p.p 12.4% 12.8% -0.4 p.p The Annualized Net Interest Margin (NIM), adjusted by the loan loss provision (LLP), exchange variance on liability and foreign trading operations and revenue from the purchase of credit rights, ended 3Q16 at 12.0% p.a., up 0.4 p.p. compared to 2Q16. Net Interest Margin (NIM) (R$ mn) 3Q16 2Q16 Chg. % 3Q15 Chg. % 9M16 9M15 Chg. % G ros s Income from F inancial Intermediation (82.4) n.a n.a n.a. E xchange R ate V ariation n.a. 0.0 n.a (3.8) n.a. Income from Receivables purchase (1) % % % Income from Financial Intermediation % % 1, % (-) Loan Los s P rovis ion % % % Income from Financial Intermediation adjusted by Loan Loss Provision and Exchange Rate Variation (A) % % 1, , % Average Remunerated Assets (B) 17, , % 18, % 18, , % Interbank Inves tments 3, , % 4, % 3, , % S ecurities and Derivatives 2, , % 1, % 1, , % Lending Operation (does not include as s ignments) 12, , % 11, % 12, , % Trade F inance % % % Net Interest Margin (NIM) (% p.a.) (A/B) 12.0% 11.6% 0.4 p.p 8.2% 3.8 p.p 11.5% 11.2% 0.3 p.p (1) Reclassified from other operating/expenseve revenues.

19 Adjusted and Recurring Net Interest Margin (NIM-AR) and the Net Interest Margin Adjusted Net Interest Margin and Recurring (NIM- AR)-(% yoy) Net Interest Margin (NIM)-(% yoy) Q15 4Q15 1Q16 2Q16 3Q16 9M15 9M16 3Q15 4Q15 1Q16 2Q16 3Q16 9M15 9M16 Distribution 149 points of distribution: 39 branches, 41 Daycred/IFPstores, 32 Currency exchange bureaus and 37 Daypag offices 39 branches São Paulo SP Head Offices Av. Paulista SP - ALPHAVILLE SP - SÃO JOSÉ DO RIO PRETO RJ - RIO DE JANEIRO MT - LUCAS DO RIO VERDE DF - BRASÍLIA SP - BOM RETIRO SP - SOROCABA PA - BELÉM MT - CUIABÁ CE - FORTALEZA SP - BRÁS SE- ARACAJU PB - JOÃO PESSOA MS - CAMPO GRANDE BA - SALVADOR SP - CAMPINAS SC - BLUMENAU PE - RECIFE MG - BELO HORIZONTE AM - MANAUS SP - FARIA LIMA SC - FLORIANÓPOLIS PI - TERESINA MG - UBERLÂNDIA AL - MACEIÓ SP - GUARULHOS RS - PORTO ALEGRE PR - CASCAVEL MA - SÃO LUIS SP - RIBEIRÃO PRETO RS - CAXIAS DO SUL PR - CURITIBA GO - GOIANIA SP - SÃO BERNARDO RN - NATAL PR - LONDRINA ES - VITÓRIA SP ALPHAVILLE - Leasing Banco Daycoval currently has 39 branches located in 21 states, plus the Federal District. Daycoval also has a branch in the Cayman Islands, which is an important instrument not only for obtaining funding but also for opening commercial lines of credit and handling our relationship with correspondent banks. In the retail segment, Daycoval works with outsourced sales promoters (the main distributors of Daycoval's retail products), as well as 41 Daycred stores through our own sales promotion company, IFP-Promotora de Serviços de Consultoria e Cadastro Ltda.

20 Daycred - IFP Promotora In 3Q16, IFP - Promotora de Serviços de Consultoria e Cadastro Ltda., a company of the Daycoval Group, focused on promoting payroll loans, which accounted for approximately 11.3% of the total origination and 16.1% only for the 's INSS operations, being responsible for the highest production among our Correspondents in Brazil. IFP has 41 stores across Brazil and 230 employees. To improve their productivity, IFP also provides services to other financial institutions. Daytravel - Exchange Bureaus At the end of 3Q16, Daycoval had 32 currency exchange bureaus. The also operates through partnerships with travel operators and agencies (44 currency exchange correspondents and 202 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 through the signing of new currency exchange correspondents. During this quarter, Daycoval sold approximately 100,500 trading operations with prepaid cards, cash and remittances expressed in different currencies reaching R$ million. In the first 9 months of the year, 276,300 prepaid cards were sold in different currencies, with movement equivalent to R$ million, an increase of 4.0% compared to 9M15. Daypag Daypag units, present throughout the state of São Paulo, were created to finance car fee payment slips, IPVA payments, licensing, fines and the DPVAT insurance for car licensing agents and driving schools. We ended the period with 37 offices, staffed by specialists in the segment, offering quick and efficient services. Daypag offices processed 1,606,000 payment slips in 3Q16, compared to 1,390,000 in 2Q16. This business unit is part of the s strategy of diversifying products and, for this purpose, the still intends to expand the distribution network and improve service to our clients. Asset Management Daycoval Asset Management serves clients seeking sophisticated solutions that are aligned with their investment profile. With several different types of investment funds and distinctive products, such as portfolio management, Daycoval Asset ended the quarter with a total of assets under management and/or administered of R$ 1,684.8 million. Currently, it manages 38 funds, of which three are Fixed Income Funds, 26 Multimarket Funds, one Stock Fund, one FIDC, one Investment Club, one Real Estate Fund, three Holding Funds and two Managed Portfolios. Daycoval Asset presented gross revenues of R$ 1.8 million in 3Q16 through the management of investment funds. The Asset area has a specialized team of 16 employees, including traders, managers, back office and sales staff with an extensive knowledge of the market. For more information please go to 1,907 Asset Management (R$ mn) 1,753 1,696 1,974 1, Q16

21 Credit Portfolio by Modality and Expanded Credit Portfolio The Expanded credit portfolio was R$ 13.4 billion, stable in relation to 2Q16. Loan Portfolio (R$ mn) 3Q16 2Q16 Chg. % 3Q15 Chg. % Companies (1) 7, , % 6, % P ayroll L oans 5, , % 5, % A uto L oans % % Direct Credit to Consumers (DCC) / Other % % Total Loan Portfolio 12, , % 12, % (1) Does not consider Receivables purchase and Avals and Sureties Expanded Loan Portfolio (R$ mn) 3Q16 2Q16 Chg. % 3Q15 Chg. % W orking C apital 3, , % 3, % G uaranteed A c c ount 1, , % 1, % R ec eivables P urc has e 1, , % % Trade F inanc e % % B NDE S % % Leasing % 0.0 n.a Avals and Sureties % % Total Companies 7, , % 7, % Payroll Loans 4, , % 5, % Payroll Card % 28.1 n.a. Total Payroll Loans 5, , % 5, % Auto Loans Portfolio Assignments % % Total Auto Loans % % Direct Credit to Consumers (DCC)/ Other % % Receivables purchase % % Total DCC/Other % % Total Expanded Loan Portfolio 13, , % 13, % The expanded credit portfolio encompasses portfolio of Avals and sureties granted purchase of Credit Rights, Leasing and Transfer of Credit. With a balance of R$ 13,427.5 million at the end of the third quarter of 2016, stable compared to 2Q16 and up 2.6 % over the last 12 months, demonstrating the 's efforts to maintain portfolio at current levels. When we only analyze the business portfolio, which represents 55.7% of the total portfolio in 3Q16, we find that the maturities in this portfolio are very short. In 90 days, almost 50% of the portfolio is repriced, which explains the short-term operations in this segment. Over the past two years, Daycoval has maintained a more conservative lending strategy, targeting the steady growth of margins and guarantees in all transactions. The s portfolio is strongly collateralized. These guarantees are subjected to rigorous evaluation using our own model. In the case of real estate, for example, Daycoval considers the forced sale value, which guarantees the the ownership of the property, as well as any proven quick execution of these assets.

22 Credit to Companies Breakdown R$(mn) 3Q16 2Q16 Chg. % 3Q15 Chg. % W orking C apital 3, , % 3, % G uaranteed A c c ount 1, , % 1, % R ec eivables P urc has e 1, , % % Trade F inanc e % % B NDE S % % L eas ing % 0.0 n.a A vals and S ureties % % Total Companies 7, , % 7, % Companies Portfolio-(R$ mn) 7,138 8,064 7,043 7,375 7,478 3Q15 4Q15 1Q16 2Q16 3Q16 3Q15 4Q15 1Q16 2Q16 3Q16 Concentration of the Expanded Credit Portfolio 100 largest clients Concentration of Credit Sep/14 Sep/15 Sep/16 L arges t debtor 1.0% 1.2% 0.8% 10 L arges t debtor 5.8% 5.4% 4.9% 20 L arges t debtor 8.6% 8.2% 8.0% 50 L arges t debtor 13.4% 13.7% 13.3% 100 L arg es t debtor 18.2% 19.0% 18.5%

23 The portfolio of the 20 largest clients showed change in the composition of over 30% in the last six months, demonstrating the liquidity and flexibility with which the manages its assets. The has decreased its concentration of the largest clients. Overview of the Quality of the Business loan Portfolio (1) Companies Overdue Loans (1) (R$ mn) Overdue L oans more than 60 days pas t due % % Overdue L oans more than 90 days pas t due % % Overdue Loans more than 14 days past due / Companies Loans (%) 3.4% 4.1% -0.7 p.p 2.5% 0.9 p.p Overdue Loans more than 90 days past due / Companies Loans (%) 2.5% 2.5% 0.0 p.p 1.3% 1.2 p.p Final Balance LLP/Loan Portfolio (%) 8.8% 8.7% 0.1 p.p 7.1% 1.7 p.p LLP Balance / Overdue Loans > 90 days (%) 354.5% 344.6% 9.9 p.p 554.9% p.p (1) Includes purchase of credit rights, leasing (3Q16 and 1Q16) and excludes avals and sureties Retail 3Q16 2Q16 Chg. % 3Q15 Chg. % Overdue L oans more than 14 days pas t due % % Payroll Loans: The segment ended 3Q16 with a balance of R$ 5,241.0 million, stable in relation to 2Q16 and a 3.6% increase compared to the last 12 months, showing that the strategy to reduce growth continues. Payroll Loan portfolio ended the quarter with a balance of R$ million, up 24.0% on 2Q16, which is supporting the reduction in the portfolio. Credit assignments carried out by the meet the accounting criteria described in CMN Resolution No /08 (according to note 3H), regarding the classification of such transfers in the category of "Transactions with substantial retention of risks and benefits." In 3Q16, we do not assign credit with guarantee. The carrying amount of these assignments recorded under "Loan operations" (according to note 8) on September 30, 2016 amounts to R $ million with the respective obligation assumed by the assignment recognized in the caption "Other liabilities - Miscellaneous - Obligations for sale and transfer of financial assets. These operations on 1H16 reached R$ million. It is important to mention that this transaction is considered a funding operation, not generating early revenue. We remained focused on the most solid national agreements, such as the INSS (Social Security system) and Federal Government, which together represent 50.0% of the portfolio. In 3Q16, Daycoval had 1,155,000 active contracts, representing an average ticket of R$ 4,800 and an average plan of 54 months. Payroll Portfolio (R$ mn) 5,059 5,137 5,255 5,245 5,242 3Q15 4Q15 1Q16 2Q16 3Q16 9.3% 10.6% Breakdown of Payroll - 3Q16 2.0% 8.3% 1.0% 0.4% 28.8% 0.2% 39.4% INSS State Government Government /SIAPE Municipalities Army Courts Others Debit Account Private

24 Total Payroll Loan Origination, Net Origination exc. Refin and Refin Origination In 3Q16, new contracts were originated with a total volume of R$ million, 7.0% down on 2Q16. In the following tables, we consider "REFIN" credit refinancing as a new credit transaction. The client (public servant/inss pensioner) is required to have paid off the previous loan with the and is given a new loan. The commission paid to the correspondent bank, in this mode, is lower than the traditional payment. The adopted this strategy with a higher focus on the product s margin. Payroll Origination R$ (mn) Q15 4Q15 1Q16 2Q16 3Q % 22.3% Payroll Net Origination (R$ mn) 1.0% 0.8% 5.2% 0.4% 0.2% 26.7% 32.3% INSS State Government Army Municipalities Government /SIAPE Courts Others Debit Account Private Payroll Net Origination (R$ mn) Net Origination Distribution - 3Q Q15 4Q15 1Q16 2Q16 3Q16 0.8% 1.1% 0.6% 5.0% 0.3% 11.6% 30.9% 23.3% 26.4% Army State Government INSS Municipalities Government /SIAPE Courts Others Debit Account Private Refinancing Origination (R$ mn) Refinancing Origination - 3Q Q15 4Q15 1Q16 2Q16 3Q16 0.7% 0.9% 0.2% 5.7% 0.1% 8.3%% 10.1% 27.0% 47.0% INSS State Government Municipalities Army Government /SIAPE Courts Others Private Debit Account

25 Overview of the Payroll Loan Portfolio Quality Payroll Overdue Loans (R$ mn) 3Q16 2Q16 Chg. % 3Q15 Chg. % Overdue L oans more than 14 days pas t due % % Overdue L oans more than 60 days pas t due % % Overdue L oans more than 90 days pas t due % % Overdue Loans more than 14 days past due / Payroll Loans (%) 1.3% 1.1% 0.2 p.p 0.7% 0.6 p.p Overdue Loans more than 90 days past due /Payroll Loans (%) 0.6% 0.6% 0.0 p.p 0.4% 0.2 p.p Final Balance LLP/Loan Portfolio (%) 2.8% 2.7% 0.1 p.p 2.3% 0.5 p.p LLP Balance / Overdue Loans > 90 days (%) 486.5% 488.4% -1.9 p.p 600.0% p.p Auto Loans: The vehicle financing portfolio ended 3Q16 with a balance of R$ million, 7.4% down on 2Q16, demonstrating our concern about this segment. It only represents 4.7% of the total expanded credit portfolio. Small vehicles continued to account for most of the portfolio, compared to heavy-duty vehicles: 73.0% in 3Q16. Auto Loan Portfolio (R$ mn) Breakdown of Auto Loans Portfolio 2Q % Small Vehicles 73% Heauy-duty Vehicles 3Q15 4Q15 1Q16 2Q16 3Q16 The origination volume in 3Q16 was R$ 42.3 million, compared to R$ 45.5 million in 2Q16, demonstrating the economic slowdown in the automotive sector. The average age of vehicles is 12 years, the average ticket is currently R$ 6,000 and the average plan is 41 months. Auto Loan Portfolio (R$ mn) Breakdown of Origination 2Q % Small Vehicles Heauy-duty Vehicles 3Q15 4Q15 1Q16 2Q16 3Q16 76%

26 Overview of the Quality of the Auto Loan Portfolio Auto Overdue Loans (R$ mn) 3Q16 2Q16 Chg. % 3Q15 Chg. % Overdue L oans more than 14 days pas t due % % Overdue L oans more than 60 days pas t due % % Overdue L oans more than 90 days pas t due % % Overdue Loans more than 14 days past due / Auto Loans (%) 5.7% 5.6% 0.1 p.p 4.5% 1.2 p.p Overdue Loans more than 90 days past due /Auto Loans (%) 2.5% 2.5% 0.0 p.p 2.0% 0.5 p.p Final Balance LLP/Loan Portfolio (%) 11.4% 11.2% 0.2 p.p 8.6% 2.8 p.p LLP Balance / Overdue Loans > 90 days (%) 447.5% 438.3% 9.2 p.p 432.7% 14.8 p.p Direct Credit to Consumers (DCC): This product involves direct consumer finance operations through partnerships with various retailers, with the largest concentration in the states of São Paulo and Rio de Janeiro. We ended 3Q16 with a balance of R$ 72.4 million, down 12.3% on 2Q16. Asset Breakdown Assets Breakdown (R$ mn) 3Q16 2Q16 Chg. % 3Q15 Chg. % Interbank Inves tments 3, , % 4, % S ec urities and Derivatives 2, , % 2, % L ending O peration 10, , % 10, % O ther A s s ets 4, , % 4, % Total Assets 20, , % 22, % Total Assets R$ (mn) Total Assets Breakdown 2Q16 (%) 22,091 21,930 20,303 20,529 20, % Lending Operation 14.6% 22.7% 50.9% Interbank Investments Other Assets Securities and Derivatives 3Q15 4Q15 1Q16 2Q16 3Q16 Total assets were R$ 20.9 billion, an increase of 1.7% in 3Q16. The credit operations and leasing totaled R$ 10.3 billion, representing 50.5% of the total assets. The line of Other Assets including the purchase of credit rights, the foreign exchange portfolio, among other loans, stood at R$ 4.7 billion

27 Liquidity Free Cash of R$ 3.5 billion Breakdown of the Liquid Assets (R$ mn) 3Q16 2Q16 Chg. % 3Q15 Chg. % C as h and C as h E quivalents % % Liquidity Interbank Investments 1, , % 4, % Money Ma rket Inves tm ent (net) 1, , % 4, % Interba nk Inves tm ents % % F oreig n C urrency Inves tm ents % % S ec urities (Own Portfolio - Available for Sale/Trade) 2, , % 1, % Net Interbank A c c ounts (net) % 31.6 n.a Total Liquid Assets 3, , % 5, % The balance of liquid assets stood at R$ 3,964.9 million, down 7.1% in the quarter. The main events over the past 12 months led to a fluctuation in this line, illustrated in the chart below: (i) 3Q15 an A/B syndicated loan was obtained in the amount of approximately US$ million, for two and three years, and payment occurred of the 2nd Public Issue of Local Bonds in the amount of approximately R$ 450 million (ii) In 4Q15, we paid for the purchase of CIT Brasil and the maturing of the Private Issue, which are part of the Euro Medium-Term Note Programme; and (iii) in 1Q16 the payment of US$ million (R$ 1.26 billion) referring to the Euro Bond, maturing in January (iv). In 2Q16, the maturing of R$ million referring to the 3rd Public Issue of Local Bonds; and (v) In 3Q16, R$ million was paid for the OPA (total of 36,085,958 shares), the payment of tranches of syndicated operations of multilateral bodies (IFC and IIC), for the amount of R$ million and R$ million matures on the 4th Public Issue of Local Bonds. Banco Daycoval believes efficient management is based on maintaining a high cash position with matched assets and liabilities. In 3Q16, our cash position represented 56.4% of total deposits + LCA and LCI and was sufficient to cover 168 days of maturing liabilities without any receipts from assets. Available Cash Evolution (R$ mn) 3Q16 Cash Breakdown (%) 5,058 3,602 3,289 3,749 3, % 42.7% Overnight Repos (Selic) Federal Government Bonds 3Q15 4Q15 1Q16 2Q16 3Q16

28 Asset and liability Management Positive GAP of 64 days Continuity in liability management, with diversification in the portfolio and appropriate maturities with relation to its assets. In total, 60.7% of the credit portfolio will mature over the next 12 months and only 52.1% of the funding operations will fall due in the same period. The average maturity of credit operations is currently 332 days and the average maturity of funding operations is 396 days. Loan Portfolio - Outstanding Operation (September/16) Funding -Outstanding Operations (September/16) 0.7% 9.1% 3.7% 5.5% 20.3% 26.5% 33.4% 41.8% 31.7% 27.3% Up to 3 months From 3 to 12 months From 1 to 3 years From 3 to 5 years Over 5 years Up to 3 months From 3 to 5 years From 3 to 12 months From 1 to 3 years Over 5 years Average Maturity of Credit Operations: 332 days Average Maturity of Funding Operations: 396 days

29 Loan Portfolio by Segment Average term to Maturity (1) days Companies 183 Trade Finance 78 Payroll Loans 529 Auto Loans 401 DCC + Other 463 Leasing 312 BNDES 462 Total Loan Portfolio 332 Funding Average term to Maturity (1) days Total Deposits 206 Interbank Deposits 200 Local Bonds (letras financeiras) 423 (LCA) Letter of Credit Agribusiness 129 LCI (Letter Home Mortgage) 216 Foreign Issuances 844 Borrowing and Onlending (2) 315 Leasing 43 BNDES 465 Total Funding 396 (1) From September 30, 2016 (2) Funding with not liquidity to criteria weighting Operating Performance Funding Funding in line with the Credit Portfolio Funding (R$ mn) 3Q16 2Q16 Chg. % 3Q15 Chg. % Total Deposits 5, , % 4, % Demand Depos its + O ther Depos its % % Time Depos its 4, , % 3, % Interbank Depos its % % Letter of Credit Home Mortgage % % Letter of Credit Agribusiness % % Local Bonds (Letras Financeiras) 3, , % 3, % Individuals % % Ins titutional 3, , % 3, % Ins titutional - P ublic O fferings % % Foreign Issuances 1, , % 3, % B onds 1, , % 3, % Bonds Issued Abroad (Private Placement) n.a. Borrowing and Onlending 1, , % 3, % F oreign borrowings 1, , % 2, % Domes tic onlendings % % Total l 13, , % 16, % Total funding stood at R$ 13,436.8 million in 3Q16, virtually stable compared to 2Q16. It is worth mentioning that there was sustainable growth in term deposits and legal local bonds, without the pressure to increase funding costs. There were key maturities during the quarter including: syndicated operations, maturity of 4º Public Local Bonds and payment of the OPA (Public Share Offering). In October, we had the 5th Public Issue of Banco Daycoval Local Bonds, amounting to R$ million, with demand of R$ 1.0 billion, as shown in the table at the side. This operation had wide spread of investors (28 houses) and a reduction in funding costs. This funding will help the Daycoval not only to diversify their funding base, but also to extend the average term of operations.

30 Total deposits, including LCIs (home mortgage letters of credit) and LCAs (agribusiness letters of credit) represent 46.0% of the total funding, with a balance of R$ 6,185.4 million, up 7.0% on 2Q16. Time deposits that ended in 3Q16 reached R$ 4,308.6, up 12.3% on 2Q16. Funding through Local Bonds stood at R$ 3,857.7 million, up 1.2% in the quarter (Not included the 5th issue of LB) and R$ million matured, relating to the 4th issue of Public Local Bonds. Local Bonds (Letra Financeira) Issue on October 25, 2016 Issuer Banco Daycoval Issue Denominations R$ million Term November 01, 2018 Rating 5th Issue Moody s: Aa2.br Leading Coordinator Banco Santander (Brasil) S.A. Banco ABC Brasil S.A. Coordinator Banco Bradesco BBI S.A. Banco Votorantim S.A. Internationally, Daycoval has relationships with a number of correspondent banks in several countries, including development banks and multilateral agencies. The line of foreign issues ended 3Q16 with a balance of R$ 1,658.2 million, up 3.5% on 2Q16 and foreign loans ended the quarter with a balance of R$ 1,442.3 million, reduction of 23.5%, due to the payment of tranches of syndicated operations of multilateral bodies (IFC and IIC), for the amount of R$ million Funding is also compatible with the capital structure of the, allowing it to keep credit operation maturities and the balance of assets and liabilities in line. We have worked to increase the client/investor base and, in 3Q16, we ended with 8,131 active clients in the CDB portfolio.

31 Total Deposits Breakdown (R$ mn) 3Q16 2Q16 Chg. % 3Q15 Chg. % C orporates 2, , % 2, % Inves tment F unds 1, , % 1, % F inanc ial Ins titutions + Interbank Depos its % % Individuals % % Ins titutional % % Demand Depos its % % L etter of C redit Home Mortgage % % L etter of C redit A gribus ines s % % Total 6, , % 5, % Banco Daycoval (unconsolidated) has not taken any Time Deposits with Special Guarantees from the Credit Guarantee Fund (DPGE 1 and DPGE 2) up until now.

32 Ratings Rating at Sovereign level Daycoval's classification in the ratings shown below demonstrates the low level of risk and the solidity obtained in its operations. The information obtained by 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 understanding of the agencies that Banco Daycoval maintains a conservative profile and has a consistent earnings history, with good quality indicators of its assets and strong capitalization ratios, coupled with a low leverage level, principally in comparison with its peers, as follows: i) Ba2 on Moody's Global Scale, ii) BB on Fitch Ratings; iii) BB- on Standard&Poor's ratings, all with a "Negative" outlook and; iv) Riskbank - BRMP 1 Low Risk for Medium Term (up to two years), very safe. For more information please go to: Global Scale Long Term Ba2 Global Scale Long TermBB Short Term F3 BRMP 1 Global Scale Long Term BB- Short Term B LowRisktoMid- Term(upto2 years) VerySafe National Scale Long Term Aa2 National Scale Long Term AA (bra) Short Term F1 (bra) National Scale Long Term A-(bra) Short Term A-2 (bra) Index Negative Negative Negative February 2016 August 2016 April 2016 June 2016

33 Credit Portfolio Quality Total of the Provision/Credit Portfolio of 6.5% in the quarter The quality of the portfolio remains high, with 91.4% of the operations classified between AA-C at the end of 3Q16, in accordance with Central Resolution The balance of Aval and surety operations granted are not included in these tables. The balance of the loan portfolio at the end of September 2016 was R$ 12,958.3 million, with an LLP balance of R$ million. Required Banco Daycoval - R$ mn Rating Provision Loans % Provision AA 0.0% % - A 0.5% 5, % 30.0 B 1.0% 4, % 45.0 C 3.0% 1, % 40.4 D 10.0% % 22.7 E 30.0% % 26.6 F 50.0% % 53.4 G 70.0% % H 100.0% % Loan Portfolio 12, % Credit Assignments until #REF! #REF! #REF! Total Total Provision / Loans 12, % % Companies (R$ mn) LEASING (R$ MM) 3Q16 Loans % Provision 3Q16 Carteira % Provisão A A - C 5, % 75.5 A A - C % 2.5 D % 13.0 D % 0.9 E % 6.1 E % 1.7 F % 37.6 F % 1.3 G % G % 0.8 H % H % 13.1 Subtotal l 6, % Subtotal l % 20.3 Total l 6, % Total % 20.3 Total Provision / Loans 8.8% Total da Provisão/ Carteira 6.9% (1) Excluded Avals and Sureties Auto Loans (R$ mn) Payroll Loans (R$ mn) 3Q16 Loans % Provision 3Q16 Loans % Provision A A - C % 7.3 A A - C 5, % 29.7 D % 4.4 D % 4.4 E % 6.0 E % 12.3 F % 5.5 F % 8.3 G % 7.3 G % 8.4 H % 42.0 H % 84.8 Subtotal l % 72.5 Subtotal l 5, % Total % 72.5 Total l 5, % Total Provision / Loans 11.4% Total Provision / Loans 2.8% (1) Does not consider Receivables purchase and Avals

34 LLP/Loan Portfolio Breakdown (%) Q15 4Q15 1Q16 2Q16 3Q16 Companies Payroll Auto Loans + DCC Retailers Loan Loss Provision and Other Credits (LLP) (1) LLP balance/eh portfolio (%) at 95.0% in 3Q16 Overview of Quality of Loan Portfolio 3Q16 2Q16 Chg. % 3Q15 Chg. % 9M16 9M15 Chg. % Loan P ortfolio R $ (mn) 12, , % 12, % 12, , % E s tablis hment of P rovis ion R $ (mn) % % % Final Balance LLP (R$ mn) % % % F inal B alance Loan E H R $ (mn) % % % Overdue Loans more than 14 days pas t due R $ (mn) % % % Overdue Loans more than 60 days pas t due R $ (mn) % % % Overdue Loans more than 90 days pas t due R $ (mn) % % % E s tablis hment of P rovis ion/loan P ortfolio (%) 1.3% 1.4% -0.1 p.p 1.2% 0.1 p.p 3.9% 3.6% 0.3 p.p F inal B alance LLP/Loan P ortfolio (%) 6.5% 6.5% 0.0 p.p 5.3% 1.2 p.p 6.5% 5.3% 1.2 p.p F inal B alance Loan E H/Loan P orfolio (%) 6.8% 7.2% -0.4 p.p 4.8% 2.0 p.p 6.8% 4.8% 2.0 p.p Overdue Loans more than 14 days pas t due / Loan P ortfolio (%) 2.7% 3.0% -0.3 p.p 2.0% 0.7 p.p 2.7% 2.0% 0.7 p.p Overdue Loans more than 60 days pas t due / Loan P ortfolio (%) 2.0% 2.3% -0.3 p.p 1.3% 0.7 p.p 2.0% 1.3% 0.7 p.p Overdue Loans more than 90 days pas t due / Loan P ortfolio (%) 1.7% 1.8% -0.1 p.p 1.0% 0.7 p.p 1.7% 1.0% 0.7 p.p F inal B alance LLP / Overdue Loans more than 14 days pas t due (mn) 240.7% 214.4% 26.3 p.p 263.6% p.p 240.7% 263.6% p.p F inal B alance LLP / Overdue Loans more than 14 days pas t due (mn) 329.6% 287.1% 42.5 p.p 419.4% p.p 329.6% 419.4% p.p F inal B alance LLP / Overdue Loans more than 14 days pas t due (mn) 372.7% 364.4% 8.3 p.p 528.2% p.p 372.7% 528.2% p.p F inal B alance LLP / Loan E H (%) 95.0% 90.0% 5.0 p.p 110.6% p.p 95.0% 110.6% p.p Write-offs R $ (mn) (159.6) (137.7) 15.9% (79.6) 100.5% (261.2) 56.1% C ompanies R ecovered Loans R $ (mn) % % % R etail R ecovered Loans R $ (mn) % % % (1) Doesn t include receivables and avals and sureties and includes leasing in 2Q16 and 1Q16

35 Overdue loansmore than 14 days past due Overdue loansmore than 90 days past due 5.0% 4.5% 2.1% 2.5% 0.7% 0.9% 5.4% 5.6% 5.7% 4.7% 4.1% 3.4% 1.2% 1.1% 1.3% 2.4% 2.5% 2.5% 2.3% 2.0% 2.5% 2.5% 1.7% 1.0% 1.3% 0.4% 0.4% 0.5% 0.6% 0.6% 3Q15 4Q15 1Q16 2Q16 3Q16 Overdue Loans more than 14 days past due / Companies Loans (%) Overdue Loans more than 14 days past due / Payroll Loans (%) Overdue Loans more than 14 days past due / Auto Loans (%) 3Q15 4Q15 1Q16 2Q16 3Q16 Overdue Loans more than 90 days past due / Companies Loans (%) Overdue Loans more than 90 days past due /Payroll Loans (%) Overdue Loans more than 90 days past due /Auto Loans (%) For a better understanding of the evolution of provisions, the following table shows the nominal amounts for movements of the quarterly provision, classified by segment: Loan Loss Provision (LLP) (R$ mn) 3Q16 2Q16 Chg. % 3Q15 Chg. % 9M16 9M15 Chg. % B alance at the B egining of the P eriod % % % Reclassification of Guarantee n.a. Establishment of Provision P % % % Companies (*) % % % Payroll % % % Auto % % % DCC + Other (*) % % % Write-offs (159.6) (137.7) 15.9% (79.6) 100.5% (407.7) (261.2) 56.1% Companies (*) (107.7) (85.1) 26.6% (42.6) 152.8% (257.5) (153.5) 67.8% R etail (51.9) (52.6) -1.3% (37.0) 40.3% (150.2) (107.7) 39.5% Final Balance LLP (R$ MM) % % % (*) Include receivables purchase and does not consider avals and sureties A provision of R$ million was set in 3Q16, 7.4% down on 2Q16. Year to date, it was down 8.3% on 9M15. This deterioration demonstrates the worsening economic situation in all segments, together with the low demand for credit, leading all the portfolios to continue maintaining provisions at high levels. In the Business lines of credit, we ended 3Q16 with a provision expense of R$ million, down 6.4% against 2Q16. The 9M16, the provision amounted to R$ million, 5.7% up on 9M15, with almost the same size of portfolio and it is important to mention that more than 50% of the business credit portfolio falls due in up to 90 days. We work with a high provision, there is no significant concentration in any sector or company, the credit risks are priced properly, and a margin is obtained to compensate for any possible expansion of default In the payroll loan segment, the provision expense was R$ 34.0 million, down 6.4% in the quarter. In the auto loan portfolio, the quarterly provision expense was R$ 14.3 million, 23.5% down on 2Q16. Year to date there has been an improvement of 6.1% compared to the same period in the previous year. For the fourth consecutive quarter, the provision has been reduced in this portfolio, even in a scenario that has been successively worsening. We believe that this segment is directly connected with unemployment and we are working with indicators that this index will continue rising over the coming periods. The E-H portfolio ended the quarter with a balance of R$ million, a 5.0% improvement in the quarter, and for the 2nd consecutive quarter this figure has shown an improvement. The Loan Loss Provision divided by the E-H Portfolio, reached 95.0%, an improvement of 5.0 p.a. compared to 2Q16. We understand that this indicator should return to above 100% in the next few quarters. Loans overdue by more than 14 days, 60 days and 90 days showed improvements in their indicators. Analyzing loans overdue by more than 14 days showed an improvement of 0.3 p.p. in comparison to 2Q16, which happened for the second consecutive quarter. This improvement happened in the business loans segment, where 88% of our active clients have revenues of up to R$ 300 million per year. In this quarter, loans overdue of more than 60 days ended 3Q16 at 2.0%, 0.3 p.a. down on 2Q16. The loans overdue by more than 90 days, ended at 1.7%, an improvement of 0.1 p.a. in relation to 2Q16.

36 During 3Q16, the renegotiated loans with defaulting clients for R$ million. In the 9 months of 2016, R$ million has been renegotiated. Daycoval Leasing has renegotiated R$ 4.9 million of leasing operations during the 9-month period of It is important to mention that a provision had already been set for the renegotiated loans. The rate of loans overdue by more than 14, 60 and 90 days showed improvement in the 's indicators. The rate of loans overdue by more than 14 days presented a 0.3 p.p. improvement compared to 2Q16, a fact that occurred for the second consecutive quarter. This same development was seen in the companies credit segment, where 88% of our active clients invoice up to R$ 300 million/year. In this quarter, the rate of loans overdue by more than 60 days ended at 2.0%, a 0.3 p.p. reduction compared to 2Q16. The rate of loans overdue by more than 90 days ended at 1.7%, a 0.1 p.p. improvement in relation to 2Q16. During 3Q16, the renegotiated credit operations with delinquent clients in the amount of R$ million. Accrued in the nine months of 2016, R$ million was renegotiated. Daycoval Leasing renegotiated leasing operations in the amount of R$ 4.8 million during the first nine months of It is important to mention that the renegotiated credits with the bank maintained the previously established provision (Rating). The amount of loan write-offs was R$ million in 3Q16. We continue in our efforts to recover the credit from operations that have already been written down. In 3Q16, credit recovery amounted to R$ 48.1 million, and year to date we have recovered R$ million of which came 78.4% from business loans. Companies Overdue Loans (R$ mn) 3Q16 2Q16 Chg. % 3Q15 Chg. % O verdue L oans more than 14 days pas t due % % O verdue L oans more than 60 days pas t due % % O verdue L oans more than 90 days pas t due % % Overdue Loans more than 14 days past due / Companies Loans (%) 3.4% 4.1% -0.7 p.p 2.5% 0.9 p.p Overdue Loans more than 90 days past due / Companies Loans (%) 2.5% 2.5% 0.0 p.p 1.3% 1.2 p.p Final Balance LLP/Loan Portfolio (%) 8.8% 8.7% 0.1 p.p 7.1% 1.7 p.p LLP Balance / Overdue Loans > 90 days (%) 354.5% 344.6% 9.9 p.p 554.9% p.p Payroll Overdue Loans (R$ mn) 3Q16 2Q16 Chg. % 3Q15 Chg. % O verdue L oans more than 14 days pas t due % % O verdue L oans more than 60 days pas t due % % O verdue L oans more than 90 days pas t due % % Overdue Loans more than 14 days past due / Payroll Loans (%) 1.3% 1.1% 0.2 p.p 0.7% 0.6 p.p Overdue Loans more than 90 days past due /Payroll Loans (%) 0.6% 0.6% 0.0 p.p 0.4% 0.2 p.p Final Balance LLP/Loan Portfolio (%) 2.8% 2.7% 0.1 p.p 2.3% 0.5 p.p LLP Balance / Overdue Loans > 90 days (%) 486.5% 488.4% -1.9 p.p 600.0% p.p Auto Overdue Loans (R$ mn) 3Q16 2Q16 Chg. % 3Q15 Chg. % O verdue L oans more than 14 days pas t due % % O verdue L oans more than 60 days pas t due % % O verdue L oans more than 90 days pas t due % % Overdue Loans more than 14 days past due / Auto Loans (%) 5.7% 5.6% 0.1 p.p 4.5% 1.2 p.p Overdue Loans more than 90 days past due /Auto Loans (%) 2.5% 2.5% 0.0 p.p 2.0% 0.5 p.p Final Balance LLP/Loan Portfolio (%) 11.4% 11.2% 0.2 p.p 8.6% 2.8 p.p LLP Balance / Overdue Loans > 90 days (%) 447.5% 438.3% 9.2 p.p 432.7% 14.8 p.p DCC + Other Overdue Loans (R$ mn) 3Q16 2Q16 Chg. % 3Q15 Chg. % O verdue L oans more than 14 days pas t due % % O verdue L oans more than 60 days pas t due % % O verdue L oans more than 90 days pas t due % % Overdue Loans more than 14 days past due / DCC + Other Loans (%) 15.3% 14.9% 0.4 p.p 12.3% 3.0 p.p Overdue Loans more than 90 days past due /DCC + Other Loans (%) 10.4% 9.2% 1.2 p.p 5.7% 4.7 p.p Final Balance LLP/Loan Portfolio (%) 17.3% 16.3% 1.0 p.p 10.0% 7.3 p.p LLP Balance / Overdue Loans > 90 days (%) 166.7% 177.6% p.p 174.2% -7.5 p.p Final Balance LLP / Overdue Loans more than 90 days past due (%) 372.7% 364.4% 8.3 p.p 528.2% p.p (1) Doesn t include receivables and avals and sureties and includes leasing in 3Q16 and 2Q16

37 Financial Performance Credit operation revenues reached R$ million in 3Q16 Income from F inancial Intermediation (R $ mn) 3Q16 2Q16 Chg. % 3Q15 Chg. % 9M16 9M15 Chg. % Loans Operations % % 2, , % C ompanies P ortfolio % % , % P ayroll % % % Auto % % % Direct C redit to C ons umer + Other % % % Leas ing Operation % - n.a n.a. S ecurities Operations % % % Derivatives 17.9 (379.3) n.a % (651.2) 1,396.6 n.a. F oreign E xchange Operations 35.6 (15.1) n.a % % Income from Financial Intermediation (A) 1, % 2, % 2, , % Funding Operations (2) (465.6) (384.1) 21.2% (1,219.3) -61.8% (1,218.0) (2,428.5) -49.8% Borrowings and Onlendings Operations (3) (53.4) (17.6) 203.4% (538.6) -90.1% (98.6) (809.6) -87.8% Leas ing Operation (44.2) (48.9) -9.6% - n.a. (140.0) - n.a. S ales or Trans fer F inancial A s s et Operations (23.0) (11.5) n.a. (14.2) 62.0% (40.7) (28.9) 40.8% Loan Los s P rovis ion (LLP) (162.2) (175.2) -7.4% (155.9) 4.0% (501.4) (478.0) 4.9% Expenses on Financial Intermediation (B) (748.4) (637.3) 17.4% (1,928.0) -61.2% (1,998.7) (3,745.0) -46.6% Gross Income from Financial Intermediation (A-B) (82.4) n.a % n.a. Exchange Rate Variation (4) n.a. - n.a (3.8) n.a. Income from Receivables purchase (4) n.a n.a n.a. Adjusted Income from Financial Intermediation % % 1, % MTM adjus tment - Hedge 8.5 (16.0) n.a. (194.3) n.a (176.3) n.a. Adjusted Gross Income from financial intermediation - Exc % % 1, , % (1) Income from Derivatives (Hedge) 17.4 (383.6) (153.7) (653.1) (2) Foreign Exchange V ariation w ithout Foreign Is s ues (18.2) 0.0 (82.6) (18.2) (386.1) (3) Foreign Exchange V ariation w ithout Borrow ings abroad (29.2) 0.0 (22.2) (29.2) (111.2) (4) Reclas s ified from other operating/expenses revenues (3.8) In 3Q16 loan revenue reached R$ million, 4.0% up on 2Q16. Highlighting the Business Loans 3Q16 ended with Revenue of R$ million, 7.3% up on 2Q16. The Payroll Loans ended the quarter with revenues of R$ million, an increase of 2.5% against 2Q16 and auto loans had revenues of R$ 54.2 million, worsening 4.1% in the quarter, driven by the reduction of the portfolio over recent quarters. As from November/2015, we began including Leasing Results, considering the acquisition of CIT Brasil. This line ended 3Q16 with revenues of R$ 62.8 million and expenses of R$ 44.2 million. The Gross Income from Financial Intermediation ended the quarter with a positive balance of R$ million. Excluding the MTM hedge adjustment for foreign issues, considering the reclassification of foreign exchange variance on liability operations and revenue from the purchase of credit rights, the Gross income from adjusted financial intermediation was R$ million in 3Q16, practically stable with 2Q16. Expenses for market funding and borrowing and transfers were R$ million in the quarter, 29.2% up on 2Q16. The result with derivatives was positive R$ 17.9 million in 3Q16 because it included a positive result of hedge of R$ 17.4 million. Excluding these effects, the derivative result was positive R $ 0.5 million in 3Q16, versus negative R $ 4.3 million in 2Q16.

38 Personnel, Administrative and Commission Expenses Personnel and Administrative Expenses (R$ mn) 3Q16 2Q16 Chg. % 3Q15 Var. % 9M16 9M15 Chg. % P ers onnel E xpens es (73.5) (70.0) 5.0% (63.3) 16.1% (211.0) (192.4) 9.7% A dminis trative E xpens es (63.3) (58.2) 8.8% (64.1) -1.2% (177.5) (197.5) -10.1% Total Personnel and Administrative Expenses (136.8) (128.2) 6.7% (127.4) 7.4% (388.5) (389.9) -0.4% Commission Expenses (total) (61.1) (60.1) 1.7% (50.1) 22.0% (173.2) (156.3) 10.8% P ayroll (50.6) (49.4) 2.4% (37.1) 36.4% (140.1) (114.9) 21.9% A uto Loans (6.1) (7.1) -14.1% (8.9) -31.5% (21.3) (29.6) -28.0% Direct C redit to C ons umer (DC C) + Others (0.8) (0.8) 0.0% (0.8) 0.0% (2.5) (1.9) 31.6% Daytravel (3.6) (2.8) 28.6% (3.3) 9.1% (9.3) (9.9) -6.1% Total l (197.9) (188.3) 5.1% (177.5) 11.5% (561.7) (546.2) 2.8% Personal and administrative expenses ended 3Q16 at R$ million, up 6.7% on 2Q16. Analyzing personnel expenses, we ended the quarter with R$ 73.5 million, 5.0% up on 3Q15, driven by hiring and the collective bargaining provision. In the accumulated 9M16, it ended virtually stable, versus 9M15, demonstrating the 's efforts to reduce their expenses, even in an inflationary scenario, without losing quality and agility in business. Banco Daycoval ended 3Q16 with 1,435 employees, Growth of 23 employees when compared to 2Q16. Currently, the sales team for the Business segment represents 25% of total employees. The commission expense, illustrated in the table above, amounted to R$ 61.1 million, up 1.7% on 2Q16, practically stable compared to 2Q16. Recurring Efficiency Ratio In 3Q16 the Recurring Efficiency Ratio was 37.0%, 2.4 p.p. up on 2Q16. The ratio is in line with our expectation for efficiency. Recurring Efficiency Ratio (R$ mn) 3Q16 2Q16 Chg. % 3Q15 Chg. % 9M16 9M15 Chg. % (+) P ers onnel + Adminis trative E xpens es + C ommis ions (197.9) (188.3) 5.1% (177.5) 11.5% (561.6) (546.2) 2.8% (+) D epreciation and Amortiz ation n.a 1.7 n.a n.a. Total Expenses (A) (197.3) (186.7) 5.7% (175.8) 12.2% (557.9) (541.1) 3.1% (+) Income from R ecurring F inancial Intermediation - LLP % % , % (+) Income from S ervices P rovided % % % (+) Income S ervice F ee % % % (+) E xchange R ate Variation n.a 0.0 n.a (3.8) n.a Total Income (B) % % 1, , % Recurring Efficiency Ratio (A/B) (%) 37.0% 34.6% 2.4 p.p 32.5% 4.5 p.p 34.4% 33.8% 0.6 p.p P rofit S haring (12.2) (12.1) 0.8% (16.7) -26.9% (36.3) (46.6) -22.1% R ecurring E fficiency R atio (cons idering P rofit S haring) (%) 39.3% 36.8% 2.5 p.p 35.5% 3.8 p.p 36.6% 36.7% -0.1 p.p

39 Other Operating Revenues/Expenses Other Operating Revenues/Expenses presented a positive result of R$ 40.4 million in 3Q16 (according to note 24K e 24L), against R$ million in 2Q16. After excluding the effects of currency exchange variation, this result was a positive R$ 39.5 million compared to a positive R$ 29.9 million in 2Q16. The increase in the period was mainly due to higher revenues from the purchase of credit rights in the amount of R $ 11.0 million. Profit Sharing Program Expenses related to the provision for payment of the PPR and PLR amounted to R$ 12.2 million in 3Q16. Income tax and Social Contributions Expenses for Income Tax and Social Contributions amounted to R$ 33.9 million in 3Q16, compared to R$ 19.9 million in 2Q16.

40 Shareholders' Equity and Leverage Basel index of 15.9% in 3Q16 Shareholders' Equity Shareholders' Equity (SE) amounted to R$ 2,537.5 million in 3Q16, 11.1% down on 2Q16, driven by the OPA - Public Share Offering for R$ million in September 2016 and the payment of Interest on Own Capital amounting to R$ 48.6 million. It is important to note that the only has a Tier I capital structure. 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 requires that banks operating in Brazil comply with a minimum percentage of 9.875% 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. In 3Q16, the Basel III Ratio, calculated using the standardized approach, stood at 15.9%, down 1.8 p.p. on 2Q16, driven by the payment of the Tender Offer, in the amount of R$ million in September, Loan portfolio / Equity 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. 4.4 Loan Portfolio / Shareholder's Equity - times Q15 4Q15 1Q16 2Q16 3Q16 Loan Portfolio Expanded Loan Portfolio