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InstitutionalPresentation1Q20
Agenda
2
Banco BMG
Assets
Liabilities
Corporate Governance
Ratings
Track record of innovation
3
Precursor of third-party correspondent banks
channel
JV with
Payroll Credit Card
Pioneering
Franchising
Distribution channel
Asset Light
Owner’s view
Our Mission
popularizefinancial services
in Brazil
Absolute leader
Payroll Loan
Digital Bank
User friendly
Artificial Intelligence
3.0
3.5
4.1
3.6
4.3
2017 2018 2019 1Q19 1Q20
113
258344
99 97
5.1% 10.8% 12.5%
17.2%
10.5%
15.7% 12.4% 22.5%
12.4%
19.9%
-100,0%
-80,0%
-60,0%
-40,0%
-20,0%
0,0%
20,0%
-10205080
110140170200230260290320350380410440470500530560590620650
2017 2018 2019 1Q19 1Q20Recurring net income Recurring ROAE(%) Basel
Number of clients
4
Credit portfolio
R$ MillionMillion
15.7%19.0%
22.5% 22.8%26.8%
9.7%12.9% 14.4% 14.9%
16.8%
2017 2018 2019 1Q19 1Q20
NIM NIM adjusted to the cost of credit
Net interest margin Recurring results
+19%
% p.a. R$ Million e % p.a.
+21%
6,7117,866
9,6678,206
9,928
1,2931,215
1,625
1,314
1,664
628
432
163333
127
8,6329,513
11,4559,853
11,718
2017 2018 2019 1Q19 1Q20
Retail Wholesale Run off Column1
+17%
Growth with profitability
1.78xCross-selling Index
Full DigitalBanking
5
Client-centricityOne-Stop Shop and Client Lifecycle
Tech-enabled
Full Biometric Profile
DataAnalytics
ArtificialIntelligence
PHYGITAL
4.3 mm Active clients
2.0k Third-party bank correspondents
822Stores
Partnerships
Customers with different needs impact the channel strategy and define the products
Credit and debit card
Investments
Checking account
InvestorSaver
No-choice borrower
Traditional borrower
Payroll loan
Payroll credit card
Directdebit loan
Insurance
Save for me
Poor and financially uneducated
Average Income
R$ 708/month to R$ 5,400/month 93%
Cashback
Banco BMG
PHYSICAL DIGITAL
Physical channels in the most diverse formats
Physical stores: face-to-face or remote service
Call centers with electronic formalization
Partner visiting clients
Fast adaptation
57% 46%87%
W1 W4 W7
% of origination x target
Weeks of quarantine
PHYGITAL strategy
MERITOCRATIC ALIGNMENT
6
Client relates to the physical
channel Client hires credit
products
Physical channel helps the onboarding
of the digital bankClient acquires new products and benefits
Client renews credit
products
help! tech-touch model
Franchise network, specializing in the low-income market financial services, with a one-stop shop concept and tech-touch performance model
Full biometric profile
PinpadFacial Biometry
Fingerprint Reader
Voice Recorder
Eletronic Signature Pad
+security for digital inclusion
Stores evolution
Efficient and scalable
Indicator based on the quarterly evolution of origination of the direct debit product.
Number of consultants per store
7
100125
150179
201
Q1 Q3 Q6 Q9 Q12
Evolution of origination per consultant(base100)
2.12.3
2.7 2.9 3.1
Q1 Q3 Q6 Q9 Q12
161 231 319 360 328
378 389
413 442 494 539
620 732
802 822
1Q19 2Q19 3Q19 4Q19 1Q20
CBFácil Other Franchisees
63% of stores opened in
less then 12 months
44 stores transferred in
1Q20
+ 1 millionaccounts
Duda
Artificial Intelligence helping operations from begining until the end
Means of payment
Basic servicesCredit Products
Investments
• Checking account• Payments• Transfers• Insurance
• Payroll loan• Personal credit
• Opened debit and credit cards
• Payroll Credit Card
• Virtual piggy bank• Cashback
Benefits
Acquisition and monetization strategy
Value proposition and differentiation
Greater capacity of credit operation for target clients
Volta pra Mim: cashback program on BMG’s debit or credit cards
Poupa pra Mim: simple way to save money in a virtual piggy bank
Withdrawn via QRCode
Partnership with soccer clubs
Digital Bank
+ 800 kMonthly Active Users
8
Main features Recent changes
Payroll Credit Card
1990 2003 2005 2015
ROBUST LEGISLATON
On March 17, the CNPS reduced the
maximum INSS rate to 2.7% p.m. from
3.0% p.m.
BMG INSS portfolio: R$ 6.0 bn (in 1Q20)
Will affect revenues as of April/20
9
Law 8.112:Payroll loan for
federal government employees
Law 10.820/03:Payroll loan for CLT employees, Social
Security retirees and pensioners
INSS/DC 121: Payroll credit card for Social security
(INSS)
Law 13.172/15 : Exclusive margin of 5% on the payroll credit card for
Social Security retirees and pensioners and
government employees
Target - retirees, pensioners and public employees1
Endorsement of 5% to 10%2 of salary
Minimum installment directly discounted from payroll
Important mean of payment
Default events correlated to payroll loan
1 - Market can also operate with private company2 - For municipal and states employees, the consignable margin of the card may vary, reaching up to 10%
Payroll Credit Card
7,316 7,533 7,754 7,933 8,114
1Q19 2Q19 3Q19 4Q19 1Q20
Portfolio
R$ Million
83,8%
Portfolio Quality – E-H (over 90 days)
2
Important mean of payment
9.7%
42%
4.3 million
92%
Main establishments
DIGITAL INCLUSION
Google Play
Netflix
UBER 99TaxiObserved increase in the
volume of purchases
10
Federal Government
risk1
of the transactions made with the BMG payroll credit card are for purchases3
3.0% 3.2% 3.1% 3.3% 3.3%
3.2% 3.4% 3.4% 3.6% 3.7%
1Q19 2Q19 3Q19 4Q19 1Q20
E-H portfolio E-H portfolio insurance simulation
1 - Social Security (INSS) + federal government employees 2 - Management view without the loss mitigation of the lender insurance3 - Frequency in which customers used the payroll credit card for purchases in the last 12 months
of Payroll Credit Cards
growth of interchange fees (1Q20 x 1Q19)
of penetration of mass insurancein the portfolio
SecuritizationCompany
service
Securization Partnership
1
INSS
Volume: R$ 230 million
Entities: INSS and Federal
Average Interest (p.m.): 1,8% (INSS) e 2,0% (Federal)
Volume: R$ 281 million
Assignment result + service: R$ 10 million
Available limit: R$ 1,040 million
0.29%p.m.
Origination 1Q20
Credit Assignment 1Q20
Resumption of payroll loan
DataPrev
Portfolio
11
On March 17, the CNPS reduced the maximum INSS interest rate to 1.8%p.m. and increased the maximum term to 84 months. Such changes do not affect the Bank’s pricing of the product
1 – Credit assignment without retention of risks and benefits
Assignment Limit Value
R$ 1,5 bi
Direct Debit Loan
Portfolio
R$ Million / p.m.
12
Main Features
Portfolio Quality
Personal credit with direct debit from the customer checking account aiming financial reintegration;
Maximum term 15 months
532612
685778
855
20.5% 20.4% 20.3% 20.4% 20.4%
-30,0%
-20,0%
-10,0%
0,0%
10,0%
20,0%
0
200
400
600
800
1000
1200
1Q19 2Q19 3Q19 4Q19 1Q20
Portfolio Interest rate
30.0% 27.4% 28.5% 28.8% 27.6%
1Q19 2Q19 3Q19 4Q19 1Q20
E-H portfolio
74% of Direct Debit clients have BMG Payroll Credit Card.
BMG is payer of Social Security (INSS) benefit
Higher efficiency when collecting installments
Lower default rates
Greatest potential of loyalty
56% of the portfolio
(vs. 38% in 1Q19)
comes from clients who receive the INSS
benefit at BMG
61% of the origination
(vs. 51% in 1Q19)
Other Portfolios
6.8% 7.4% 7.4% 7.5%9.9%
1Q19 2Q19 3Q19 4Q19 1Q20
E-H Portfolio
19.2% 21.5% 23.4% 22.8% 22.3%
1Q19 2Q19 3Q19 4Q19 1Q20
E-H Portfolio
358 383483
595690
92 100 116 148 133
0
100
200
300
400
500
600
700
800
1Q19 2Q19 3Q19 4Q19 1Q20
Balance (R$) Balance (US$)
Credit Portfolio
U.S. Payroll Loan
BMG Money is an independent company that operates inthe United States with focus on payroll loan for the publicsector employees in lower turnover activities such ashospital, school, police and firefighters;
The operation is reflected in BMG through participationagreements among BMG Money and BMG Bank (Cayman).
R$ Million
13
Run-off Portfolio
Credit PortfolioR$ Million
Portfolio Quality Portfolio Quality
Banco BMG has the following run-off portfolios: payrollloan, Lendico, home equity and vehicle financing;
Represents 1.1% of total portfolio.
333282
209163
127
1Q19 2Q19 3Q19 4Q19 1Q20
Mass Insurance
14
Partnership with Generali
Issued Premiums Evolution Sources of Income
R$ 24 million in revenue in 1Q20
(vs. R$ 12 million in 1Q19)
R$ 9 million in net
service revenue¹
R$ 3 million in profit
share
R$ 12 million reduction
in provision expenses
+ +
R$ Million
1 - The commission referent to the sale of insurance is accounted by BMG via the equity equivalence of its indirect subsidiary CMG Corretora
47
57 54 59 62
1Q19 2Q19 3Q19 4Q19 1Q20
Means of Payment
~15 thousand merchants
Take rate: 3.6%
1Q20 Highlights
270316
361 343277
1Q19 2Q19 3Q19 4Q19 1Q20
Total Payment Volume R$ Million
In 2018, the Bank acquired 65% of Granito, with the purpose of bolstering its product portfolio and increasing its capillarity with BMG's existing distribution channels. Granito stands out for its
differentiated solutions from the market.
15
Ecosystem
Bar
Beauty shopLocal shop
Gas station
Newstand Bakery
Construction store
Wholesale Portfolio
Companies
Structured Operations
16
structured operations for banking correspondents andsoccer clubs, with collateral that mitigates the issuers' risks.
The portfolio is composed of financing and of structuredfinancial services for medium and large companies.
875972
1,045 1,101 1,138
2.3% 2.0% 1.9% 1.9% 1.7%
0,0%
1,0%
2,0%
3,0%
4,0%
5,0%
6,0%
7,0%
8,0%
9,0%
10,0%
0
200
400
600
800
1000
1200
1Q19 2Q19 3Q19 4Q19 1Q20
Portfolio NPL (E-H portfolio)
439 458528 524 526
25.5%
13.7% 12.4% 12.8% 12.6%
0,0 %
10, 0%
20, 0%
30, 0%
40, 0%
50, 0%
60, 0%
70, 0%
80, 0%
90, 0%
0
100
200
300
400
500
600
700
800
900
1Q19 2Q19 3Q19 4Q19 1Q20
Portfolio NPL (E-H portfolio)
Created in July, 2016, and controlled by Banco BMG, the company focused on the Surety Bond
Segment.
Company belongs to Banco BMG;
Target Audience: Corporate & Large-
Corporate;
Since November 2019, Generali holds 30%
interest in BMG Seguros
Written Premiums: R$ 35 million
Retained Premiums: R$ 23 million
Net Income: R$ 2 million
BMG Seguros
Financial Highlights – 1Q20
Diversified Funding
R$ Million
Funding evolution Asset & Liability Management
• Adequate cash level
• Positive gap with the duration of liabilities longer than the assets by 5 months
• Receipt of credit installments has been performing normally
• Appropriate evolution of the renewal of deposits
• High capacity for securitization of assets
• BACEN measures generate additional liquidityo LFG: R$ 2.9 billion limito NDPGE: R$ 2.0 billion limit
Market funding breakdown
17
12,211 12,697 13,217 12,382 12,673
12,234 12,723 13,246 12,40913,705
1Q19 2Q19 3Q19 4Q19 1Q20
Market funding Subsidiaries
Time Deposit81.0%
Financial Bills5.4%
Credit Assignment
1.0%
External Funding
6.9%
Securitization2.5%
Capital
R$ Million
18
Shareholders’ Equity and Basel Ratio
+ 15 p.p.
Capital quality improvement
54% 56% 58%
70% 69%
2,673 2,700 2,733
4,028 3,968
12.4% 13.6% 13.8%22.5% 19.9%
1Q19 2Q19 3Q19 4Q19 1Q20
Main Capital Shareholders' Equity Basel Ratio
Comfortable capital level, sufficient for growth plan and stress scenario
Corporate Governance
Corporate Structure
Ownership Breakdown
19
Banco Cifra
BMG Leasing
Banco BCV
99.99% 100.00% 100.00%
BMG Bank
Cayman
100.00%
CB FácilCorretora
65.01%
BMG Participaçõesem Negócios
BMG SegurosME
Promotora
BMG Soluções
Eletrônicas
92.99%
CMG Corretora de
SegurosGranito
80.00%
99.99%
99.38% 70.00%99.00%
Help Franchising
99.98%
100.00%
CifraFinanceira
Shareholders % ON % PN % Total
Flávio Pentagna Guimarães - 20.2% 6.5%
BMG Participações S.A 38.6% - 26.1%
Ângela Annes Guimarães 12.9% 4.7% 10.2%
Regina Annes Guimarães 12.9% 4.7% 10.2%
Ricardo Annes Guimarães 12.9% 5.1% 10.4%
João Annes Guimarães 12.9% 4.7% 10.2%
Antônio Mourão Guimarães Neto 4.7% 4.7% 4.7%
Treasury stocks - 1.4% 0.5%
Others 5.1% - 3.5%
Shares traded at B3 - 54.5% 17.6%
Total number of shares (million) 400 191 591
Corporate Governance
20
Board of Directors with Complementary Experience & Skill Set
Independent Board Members
José Eduardo Dominicale
Member
Background
Eliane Aleixo Lustosa¹
Member - Independent member
Background
Background
Antônio M. Guimarães
Member
Olga Stankevicius Colpo
Vice-Chairwoman -Independent member
Background
Background
Ângela Annes Guimarães
Member
Background
Chairman
Regina Annes Guimarães
Member
Background
AuditCommittee
3 Monthly
Since: 2013
8 Quarterly
Since: 2012
Innovation and StrategyCommittee
Bimonthly
Since: 2019
Risk and Capital Management
Committee
8 Monthly
Since: 2018
Corporate Governance Committee
8 Quarterly
Since: 2019
Committees report directly to the Board of Directors
8
People & CompensationCommittee
Ricardo Annes Guimarães
+10 executive forums reporting directly to the Executive Officers
# of fixed members | 1 – Pending Central Bank approval
Dorival Dourado Jr.¹Member - Independent member
Background
Main Indicators
21
Financial Highlights (R$ Million) 1Q20 4Q19 3Q19 2Q19 1Q19 2019 2018
Net Income - Recurring1 97 74 88 84 99 344 258
ROAE - Recurring1 10.5% 9.6% 14.6% 14.1% 17.2% 12.5% 10.8%
ROAA - Recurring 2.0% 1.6% 2.0% 2.0% 2.4% 2.0% 1.6%
Basel Index 19.9% 22.5% 13.8% 13.6% 12.4% 22.5% 12.4%
Net Interest Margin - Recurring1 26.8% 26.6% 25.1% 23.2% 22.8% 22.5% 19.0%
Efficiency Ratio - Recurring1 56.3% 59.5% 53.7% 51.2% 51.7% 54.3% 52.1%
NPL4 – E-H Portfolio 5.9% 5.8% 5.6% 5.6% 6.0% 5.8% 6.6%
Coverage Ratio 107.0% 110.3% 110.6% 115.5% 114.9% 110.3% 111.0%
Net Income 76 163 66 62 77 367 171
Balance Sheet (R$ Million) 1Q20 4Q19 3Q19 2Q19 1Q19 2019 2018Total Credit Portfolio 11,718 11,455 10,814 10,261 9,853 11,455 9,513
Retail Portfolio6 9,928 9,667 9,032 8,548 8,206 9,667 7,866
Wholesale Portfolio7 1,664 1,625 1,573 1,430 1,314 1,625 1,215
Run-off Portfolio8 127 163 209 282 333 163 432
Total Assets 20,312 18,911 18,045 17,331 16,830 18,911 16,938
Shareholders’ Equity 3,968 4,028 2,733 2,700 2,673 4,028 2,640
Total Funding 13,705 12,409 13,246 12,723 12,234 12,409 12,354
1) Recurring Net Income and ROAE, excluding the effects of goodwill and other non-recurring events, see “Managerial Income Statement”.2) Methodology: Portfolio classified by E-H/Total Portfolio, including overdue plus falling due installments. 3) Methodology: Credit provision balance / operations overdue for more than 90 days (considering overdue installments plus falling due).4) The retail portfolio includes payroll credit card, payroll loan and personal credit.5) The wholesale portfolio includes structured Operations and companies.6) The run off portfolio includes the legacy payroll loan, Lendico, vehicles and home equity loan
Ratings
22
Agency Date Rating Perspective
Fitch April 2020
Local currency A (bra) Local: Negative
Foreign currency B+ IDR: Stable
Moody‘s March 2020
Local currency Baa1.br
Positive
Foreign currency B1
RISKbank January 2020 9.81Low Risk Medium
Term 1
Contact & Disclaimer
23
INVESTOR RELATIONS TEAM
www.bancobmg.com.br/IR
We make forward-looking statements that are subject to risks and uncertainties. These statements are based on the beliefs and assumptions of ourmanagement. and on information currently available to us. Forward-looking statements include statements regarding our intent. belief or currentexpectations or that of our directors or executive officer.Forward-looking statements also include information concerning our possible or assumed future results of operations. as well as statements preceded by.followed by. or that include the words ''believes'' ''may'' ''will'' ''continues'' ''expects'' ''anticipates'' ''intends'' ''plans'' ''estimates'' or similar expressions.Forward-looking statements are not guarantees of performance. They involve risks. uncertainties and assumptions because they relate to future eventsand therefore depend on circumstances that may or may not occur. Our future results and shareholder values may differ materially from those expressedin or suggested by these forward-looking statements. Many of the factors that will determine these results and values are beyond our ability to control orpredict.