Banco ABC Brasil (ABCB4) Investor Presentation summary

Strategy and business overview

• Focuses on providing financial solutions to companies in C&IB, Corporate, and Middle segments, with a segmented client approach and expansion in new initiatives to diversify revenue streams.

• Growth strategy includes scaling client base, expanding product portfolio, leveraging infrastructure, and developing new distribution channels to reduce risk and increase scalability.

• Geographical footprint covers 53 cities across Brazil, with a client base growth of 8% in the last 12 months, reaching 4,946 clients as of 1Q24.

• Investment banking operations have been revamped, with new initiatives in project finance, equity capital markets, and proprietary insurance brokerage.

• Emphasizes reduction in client acquisition and service costs, aiming for lower volatility and higher structural ROAE over cycles.

Financial performance and portfolio

• Expanded credit portfolio reached R$48.3 billion in Jun/24, up 11.4% YoY, with Corporate segment representing 57.2% and C&IB 33.8%.

• Net interest income for 2Q24 was R$530.7 million, with a NIM of 4.3% and annualized spread with clients at 3.3%.

• Service revenues totaled R$122.2 million in 2Q24, representing 24.1% of total revenue.

• Recurring net income for 2Q24 was R$250.1 million, with a recurring ROAE of 16.1%.

• Efficiency ratio improved to 36.9% in 2Q24, reflecting disciplined expense management.

Credit quality and risk management

• Loans overdue for more than 90 days remained low at 0.2% of the portfolio in 2Q24, with a coverage ratio of 182%.

• Expanded provision expenses were 0.6% of the portfolio (annualized) in 2Q24, with loan loss reserves at 2.3% of the portfolio.

• NPL formation and loans rated D-H have declined, indicating stable asset quality.

• Collateralized portfolio varies by segment, with 39% of Corporate and 48.4% of Middle portfolios secured.

• Sector exposure is diversified, with significant presence in energy, agribusiness, and services.