MD&A
3Q23
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- P R E S E N T A T I O N
The Management Discussion and Analysis - MD&A presents the economic and financial status of BB Seguridade Participações S.A. (BB Seguridade). Directed to financial analysts, shareholders and investors, this quarterly report provides an analysis of economic and financial
indicators of BB Seguridade, stocks' performance and other aspects considered relevant for the assessment of the company's
achievements.
The consolidated financial statements were prepared in compliance with the International Financial Reporting Standards - IFRS.
On the other hand, the analysis provided on this report are based on the accounting standards adopted by insurance regulators in Brazil - Susep and ANS -, except when otherwise mentioned.
- O N - L I N E A C C E S S
This MD&A is available at BB Seguridade's IR website, where additional information about the Company is also available such as: corporate structure, corporate governance, historical data, among other important information for shareholders and investors. The company's website can be accessed through www.bbseguridaderi.com.br.
This report makes references and statements about expectations, expected synergies, growth estimates, earnings forecasts and future strategies regarding BB Seguridade. Such statements are based on current expectations, estimates and projections of the Managementabout future events and financial trends that may affect the businesses that the company is involved in.
These forward looking statements are not guarantee of future performance and involve risks and uncertainties that could overextendthe control of the management, and thus can result in balances and values different from those anticipated and discussed in this report. The expectations and projections depend on market conditions (technological changes, competitive constraints on products, prices, etc.), on the country's macroeconomic performance (interest and exchange rates, political and economic changes, inflation, changes in tax rules, etc.) and on international markets.
Future expectations based on this report should consider the risks and uncertainties that involve BB Seguridade's businesses. BBSeguridade has no responsibility to update any estimate contained either in this report or in previously published reports.
Tables and charts in this report show, in addition to the accounting balances, financial and managerial figures. The relative variationrates are calculated before the rounding procedure in R$ million. The rounding method used follows the rules established by Resolution 886/66 of IBGE's Foundation: if the decimal number is equal or greater than 0.5, it increases by one unit, if the decimalnumber is less than 0.5, there is no increase.
BB Seguridade Participações S.A. | Management Discussion & Analysis 3Q23 | 2 |
3Q23 Earnings Conference Call
November 6th, 2023
Portuguese with simultaneous translation into English
Time: 11:00 AM (Brasilia time) 09:00 AM (EST)
Livestream via ZOOM platform
To register for the event and receive the connection information, access Zoom idor the investor relations website www.bbseguridaderi.com.br/en
Contacts
Investor Relations
- +55 (11) 4297-0730
- ri@bbseg.com.br
IR Website: www.bbseguridaderi.com.br/en
Rua Alexandre Dumas, 1671 - Térreo - Ala B Chácara Santo Antônio - São Paulo - SP CEP: 04717-903
BB Seguridade Participações S.A. | Management Discussion & Analysis 3Q23 | 3 |
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1 . S U M M A R Y
- N E T I N C O M E A N A L Y S I S
The Brazilian Securities and Exchange Commission - CVM Rule No. 42/2021 made it mandatory for Brazilian Public-held companies the adoption of the principles of IFRS 17 standards for the recognition, measurement, presentation, and disclosure of insurance contracts as of January 1, 2023. Thus, since the 1Q23, the audited financial statements of BB Seguridade follows the new accounting standards of IFRS 17, particularly regarding the recognition of the equity investment balance and results arising from Brasilseg, Brasilprev and Brasildental that operate insurance contracts within the new accounting standards.
On the other hand, the Brazilian insurance regulators, namely Superintendência de Seguros Privados - Susep and National Supplementary Health Insurance Agency - ANS, have not adopted the IFRS 17 for their sectors and, therefore, the insurance and health insurance companies shall comply with the former standard (IFRS 4), both for recognition, measurement, presentation, and disclosure of financial information, as well as for provisions, liquidity and capital management, including the regulatory capital, that weigh the shareholders' remuneration policies.
For the reason set forth herein, except when otherwise mentioned, the analysis on this report are based on managerial information prepared according to IFRS 4, which are not audited at the holding level. For information purposes, Chapter 6 of this document presents the audited financial statements in accordance with IFRS 17 of the holding co., Brasilseg and Brasilprev so that the stakeholders can get used to the new reporting models. This information does not rule out the need of reading the explanatory notes to the audited financial statements to understand the accounting practices and impacts on the transition and on the recognition of insurance contracts' income.
Finally, it should be noted that, due to operational issues, as of January 2023, the accounting recognition of the investment in Brasildental will be carried out with a delay of one month. Thus, 3Q23 contains information related to June, July and August, immaterially impacting the comparison with 3Q22 earnings.
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Table 1 - Income statement of the holding
Quarterly Flow | Chg. % | 9 Months Flow | Chg. % | |||||
R$ thousand | 3Q22 | 2Q23 | 3Q23 | On 3Q22 | On 2Q23 | 9M22 | 9M23 | On 9M22 |
Equity income | 1,648,550 | 1,835,739 | 2,038,548 | 23.7 | 11.0 | 4,235,022 | 5,637,978 | 33.1 |
Underwritting and accumulation businesses | 883,131 | 1,108,531 | 1,235,335 | 39.9 | 11.4 | 2,256,001 | 3,396,438 | 50.6 |
Brasilseg | 636,121 | 724,236 | 786,181 | 23.6 | 8.6 | 1,445,518 | 2,189,033 | 51.4 |
Brasilprev | 217,118 | 337,195 | 396,048 | 82.4 | 17.5 | 691,325 | 1,061,982 | 53.6 |
Brasilcap | 25,002 | 42,358 | 48,667 | 94.7 | 14.9 | 103,241 | 132,880 | 28.7 |
Brasildental | 4,890 | 4,741 | 4,439 | (9.2) | (6.4) | 15,918 | 12,543 | (21.2) |
Distribution businesses | 750,605 | 706,795 | 790,833 | 5.4 | 11.9 | 1,957,719 | 2,205,339 | 12.6 |
Other | 14,814 | 20,413 | 12,380 | (16.4) | (39.4) | 21,302 | 36,200 | 69.9 |
G&A expenses | (5,542) | (5,592) | (5,943) | 7.2 | 6.3 | (17,433) | (20,478) | 17.5 |
Net investment income | 10,673 | 11,119 | 31,850 | 198.4 | 186.4 | 21,894 | 48,760 | 122.7 |
Earnings before taxes and profit sharing | 1,653,681 | 1,841,267 | 2,064,454 | 24.8 | 12.1 | 4,239,484 | 5,666,260 | 33.7 |
Taxes | (1,501) | (233) | (7,659) | 410.2 | - | (1,501) | (7,892) | 425.7 |
Net income | 1,652,180 | 1,841,034 | 2,056,795 | 24.5 | 11.7 | 4,237,982 | 5,658,368 | 33.5 |
In 3Q23, BB Seguridade's net income amounted to R$2.1 billion (+24.5% YoY). The key highlights contributing to the increment of R$404.6 million in the results were as follows:
- Brasilprev (+R$178.9 million): sustained by the improvement in financial results, primarily explained by the reduction in the cost of liabilities linked to traditional plan reserves;
- Brasilseg (+R$150.1 million): driven by the growth in earned premiums and an increase in financial results;
- BB Corretora (+R$40.2 million): led by the growth in brokerage revenues and, to a lesser extent, the increase in financial results; and
- Brasilcap (+R$23.7 million): attributed to the growth in financial results, stemming from the expansion of the average balance of earning assets and an improvement in the interest margin.
For the 9M23, net income increased by R$1.4 billion (+33.5%), reaching R$5.7 billion. The most significant variations by business line were:
- Brasilseg (+R$743.5 million): supported by a decrease in loss ratio, the growth of earned premiums and an increase in financial results;
- Brasilprev (+R$370.7 million): driven by the reduction in the cost of liabilities linked to traditional plan reserves;
- BB Corretora (+R$247.6 million): due to an increase in brokerage revenues and an uptick in financial results; and
- Brasilcap (+R$29.6 million): sustained by the growth in financial results, with an expansion of the average balance of assets and an improvement in the interest margin.
Figure 1 - Non-interest operating results¹
Chg. On 3Q22 | Chg. On 9M22 | |||||||||||
Brasilseg | 19.7% | 44.5% | ||||||||||
Brasilprev | 4.6% | 4.1% | ||||||||||
Brasilcap | (82.3% ) | (74.6% ) | ||||||||||
Brasildental | 0.1% | (22.2% ) | ||||||||||
BB Corretora | 3.3% | 10.8% | ||||||||||
Total | 8.9% | 19.2% | ||||||||||
¹Non-interest operating results before taxes, weighted by the equity stake | ||||||||||||
Figure 2 - Normalized net income (R$ million) | ||||||||||||
5,666 | ||||||||||||
4,361 | 5,658 | |||||||||||
4,238 | ||||||||||||
2,057 | ||||||||||||
1,753 | 1,969 | 1,911 | ||||||||||
1,652 | 1,841 | |||||||||||
(101) | (128) | 146 | (123) | (8) | ||||||||
3Q22 | 2Q23 | 3Q23 | 9M22 | 9M23 | ||||||||
Net income | IGP-M lag | Normalized net income¹ |
1. Net income excluding the impacts of the one-month lag in the IGP-M accrual on liabilities.
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▪ N E T I N V E S T M E N T I N C O M E A N A L Y S I S
Figure 3 - Consolidated net investment income
20.4 | 22.4 | 20.8 | ||
14.1 | 14.9 | |||
1,175 | ||||
631 | ||||
376 | 460 | |||
232 | ||||
3Q22 | 2Q23 | 3Q23 | 9M22 | 9M23 |
Net investment income (R$ million) | % Net income |
In 3Q23, the combined net investment income of BB Seguridade and its investees reached R$460.2 million (+98.0% YoY). The deflation of the IGP-M and the positive variation of the IPCA significantly contributed to the improvement of Brasilprev's financial result. This, combined with the expansion of the average balance of financial assets in other group companies, were the main factors responsible for the growth in net investment income compared to the same period last year.
In 9M23, the combined financial result of the group's companies grew by 86.1% YoY. The performance is attributed to the same factors that drove the quarterly result, in addition to the rise in the Selic interest rate.
Figure 4 - Inflation rate (%)
Figure 5 - Average Selic rate (%)
13.47 13.65 13.65 13.65 13.27
Figure 6 - Forward yield curve (%)
13.44
1.6 2.1
0.1 | -1.1 | 0.6 | |
-1.3 | 0.2 |
-1.4 | -2.5 | |
3Q22 | 4Q22 | 1Q23 |
IPCA | IGP-M |
1. IGP-M with a lag of one month.
0.8 0.6
-2.7 | -0.5 |
-2.8 | |
-4.6 | |
2Q23 | 3Q23 |
IGP-M (lagged)¹ |
3Q22 | 4Q22 | 1Q23 | 2Q23 | 3Q23 |
12.85 | 12.75 | 12.63 | 12.65 | 12.72 |
jun/22 | ||||
12.81 | ||||
12.24 | 11.61 | 11.50 | 11.54 | 11.60 | sep/22 |
11.10 | |||||
10.84 | 10.58 | 10.81 | sep/23 | ||
10.75 | jun/23 | ||||
10.09 | 10.12 | 10.28 | |||
DI1F24 | DI1F25 | DI1F26 | DI1F27 | DI1F28 |
Figure 7 - Financial investments (%)
7.2 | |
Sep/23 | 45.6 |
47.2 | |
6.0 | |
Jun/23 | 43.6 |
50.3
7.1 | |
Sep/22 | 45.4 |
47.5 | |
Available for sale | |
Held to maturity | |
Trading |
Figure 8 - Financial investments by index (%)
0.1 | |
Sep/23 | 13.1 |
42.5 | |
44.3 | |
0.1 | |
Jun/23 | 13.1 |
41.6 | |
45.3 | |
0.2 | |
Sep/22 | 12.7 |
39.3 | |
47.9 | |
Other | |
Pre-fixed | |
Floating | |
Inflation |
Figure 9 - Trading portfolio by index
(%)
0.2 | |
Sep/23 | 2.2 |
7.5 | |
90.1 | |
0.1 | |
Jun/23 | 3.6 |
13.8 | |
82.5 | |
0.3 | |
Sep/22 | 2.5 |
14.8 | |
82.4 | |
Other | |
Pre-fixed | |
Inflation | |
Floating |
BB Seguridade Participações S.A. | Management Discussion & Analysis 3Q23 | 6 |
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- 2 0 2 3 G U I D A N C E
In 9M23, the non-interest operating result (ex-holdings) grew by 19.2% compared to 9M22, surpassing the annual growth range of the guidance. Meanwhile, Brasilseg's premiums written and the pension reserves - PGBL and VGBL - performed in line with the estimated ranges.
The deviation in the variation of the non-interest operating result (ex-holdings) was already expected in 9M23 due to the high concentration of retained rural insurance claims at the beginning of 2022, with an expectation of convergence to the estimated range in the last quarter of the year.
It's important to note that all comparisons are being made based on the accounting standards adopted by the Superintendência de Seguros Privados - Susep and the Agência Nacional de Saúde Suplementar - ANS, which do not consider the effects of the new accounting standard IFRS 17, in effect from January/2023.
Figure 10 - 2023 estimates
Estimate interval
Non-interest operating result
(ex-holding)
19.2%
12% | 17% |
Observed 9M23 |
Percentage variation of the combined recurring non-interest operating results of Brasilseg, Brasilprev, Brasilcap, Brasildental and BB Corretora, according to accounting standards adopted by Susep and ANS, weighted by the equity stake held in each company and adjusted by extraordinary events, as released by the company on its quarterly MD&A.
Estimate interval
Premiums written of
Brasilseg
12.4% | |||
10% | 15% | ||
Observed 9M23 |
Percentage variation of the premiums written reported by Brasilseg, adjusted by extraordinary events, as released by the company on its quarterly MD&A
Estimate interval
PGBL and VGBL pension
plans reserves of Brasilprev
13.7% | |
10% | 14% |
Observed 9M23 |
Percentage variation of PGBL and VGBL pension plans reserves, adjusted by extraordinary events, as released by the company on its quarterly MD&A.
Table 2 - Breakdown of the managerial non-interest operating result by company
9 Months Flow | Chg. % | ||
R$ thousand | 9M22 | 9M23 | On 9M22 |
Non-interest operating result | 5,539,715 | 6,603,304 | 19.2 |
Brasilseg | 1,667,998 | 2,409,986 | 44.5 |
Brasilprev | 1,116,156 | 1,161,592 | 4.1 |
Brasilcap | 15,671 | 3,979 | (74.6) |
Brasildental | 21,692 | 16,877 | (22.2) |
BB Corretora | 2,718,198 | 3,010,870 | 10.8 |
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- S U M M A R Y O F I N V E S T E E S P E R F O R M A N C E S
Brasilseg | Insurance (for further details, please refer to the page 23)
Table 3 - Summarized income statement
Quarterly Flow | Chg. % | 9 Months Flow | Chg. % | |||||
R$ thousand | 3Q22 | 2Q23 | 3Q23 | On 3Q22 | On 2Q23 | 9M22 | 9M23 | On 9M22 |
Premiums written | 5,022,255 | 3,942,284 | 5,432,673 | 8.2 | 37.8 | 11,646,161 | 13,094,813 | 12.4 |
Changes in technical reserves and premiums | (2,219,530) | (815,812) | (2,184,880) | (1.6) | 167.8 | (3,810,389) | (3,674,992) | (3.6) |
ceded | ||||||||
Retained earned premiums | 2,802,725 | 3,126,472 | 3,247,793 | 15.9 | 3.9 | 7,835,772 | 9,419,821 | 20.2 |
Retained claims | (747,624) | (880,113) | (868,424) | 16.2 | (1.3) | (2,561,304) | (2,639,355) | 3.0 |
Retained acquisition costs | (818,880) | (867,619) | (894,853) | 9.3 | 3.1 | (2,265,693) | (2,592,336) | 14.4 |
G&A | (272,308) | (334,063) | (326,672) | 20.0 | (2.2) | (784,774) | (967,113) | 23.2 |
Other | (7) | (1,496) | (3,938) | - | 163.3 | 294 | (7,273) | - |
Non-interest operating result | 963,907 | 1,043,181 | 1,153,906 | 19.7 | 10.6 | 2,224,294 | 3,213,743 | 44.5 |
Net investment income | 218,882 | 218,746 | 262,994 | 20.2 | 20.2 | 532,114 | 704,745 | 32.4 |
Earnings before taxes and profit | 1,182,789 | 1,261,927 | 1,416,900 | 19.8 | 12.3 | 2,756,409 | 3,918,488 | 42.2 |
sharing | ||||||||
Taxes and profit sharing | (329,605) | (291,012) | (363,383) | 10.2 | 24.9 | (814,066) | (983,977) | 20.9 |
Net income | 853,184 | 970,915 | 1,053,517 | 23.5 | 8.5 | 1,942,343 | 2,934,511 | 51.1 |
In 3Q23, the net income of the insurance operation increased by 23.5% YoY, driven by the growth of retained earned premiums (+15.9%) and the evolution of the net investment income (+20.2%), due to the expansion of both the balance and the average return of investments.
Premiums written grew by 8.2% compared to 3Q22 (+37.8% QoQ), a dynamic led by the strong growth of credit life for farmers insurance (+45.0% YoY | +97.9% QoQ), driven by the increase in the average insured amount, and the good commercial performance of credit life insurance (+15.4% YoY | +20.3% QoQ), with increased credit penetration and reduced cancellations.
The G&A ratio increased by 0.3 p.p. YoY, influenced by the rise in other operating expenses, more concentrated in endomarketing and impairment losses.
Year-to-date, net income grew by 51.1% YoY, the result of a reduction in the loss ratio (-4.7 p.p.), the growth of retained earned premiums (+20.2%), and a higher net investment income (+32.4%).
Figure 11 - Key performance indicators
Chg. On 3Q22 | Chg. On 9M22 | |
Breakdown of premiums written | ||
Rural | 9.1% | 10.1% |
Term Life | (1.8% ) | 0.5% |
Credit Life | 15.4% | 34.6% |
Others | 11.1% | 19.2% |
Performance ratios | ||
Loss ratio | 0.1 p.p. | (4.7 p.p.) |
Commission ratio | (1.7 p.p.) | (1.4 p.p.) |
G&A ratio | 0.3 p.p. | 0.3 p.p. |
Combined ratio | (1.3 p.p.) | (5.8 p.p.) |
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Brasilprev | Pension plans (for further details, see page 44)
Table 4 - Summarized income statement
Quarterly Flow | Chg. % | 9 Months Flow | Chg. % | ||||||
R$ thousand | 3Q22 | 2Q23 | 3Q23 | On 3Q22 | On 2Q23 | 9M22 | 9M23 | On 9M22 | |
Total revenue from pension and | 15,144,470 | 12,278,542 | 16,466,696 | 8.7 | 34.1 | 39,855,359 | 43,534,386 | 9.2 | |
insurance | |||||||||
Provision for benefits to be granted | (15,139,216) | (12,273,659) | (16,461,979) | 8.7 | 34.1 | (39,839,746) | (43,519,725) | 9.2 | |
Net revenue from pension and insurance | 5,254 | 4,883 | 4,717 | (10.2) | (3.4) | 15,613 | 14,661 | (6.1) | |
Management fee | 836,248 | 830,012 | 893,318 | 6.8 | 7.6 | 2,436,283 | 2,561,871 | 5.2 | |
Acquisition costs | (178,283) | (184,971) | (186,259) | 4.5 | 0.7 | (521,224) | (554,330) | 6.4 | |
Retained earned premiums | 49,788 | 54,240 | 43,488 | (12.7) | (19.8) | 143,252 | 117,528 | (18.0) | |
G&A | (171,725) | (177,913) | (191,103) | 11.3 | 7.4 | (505,344) | (527,348) | 4.4 | |
Other | (11,572) | (19,909) | (9,918) | (14.3) | (50.2) | (80,173) | (63,387) | (20.9) | |
Non-interest operating result | 529,709 | 506,342 | 554,243 | 4.6 | 9.5 | 1,488,406 | 1,548,995 | 4.1 | |
Net investment income | (34,835) | 223,399 | 296,547 | - | 32.7 | 69,309 | 766,538 | - | |
Earnings before taxes and profit sharing | 494,874 | 729,741 | 850,790 | 71.9 | 16.6 | 1,557,715 | 2,315,533 | 48.6 | |
Taxes and profit sharing | (205,365) | (291,418) | (323,186) | 57.4 | 10.9 | (635,888) | (911,259) | 43.3 | |
Net income | 289,509 | 438,323 | 527,604 | 82.2 | 20.4 | 921,827 | 1,404,273 | 52.3 | |
In 3Q23, the net income of the pension operation grew 82.2% higher YoY, to R$527.6 million, driven by the improvement in the net investment income. The deflation of the IGP-M, which significantly reduced the cost of the liabilities linked to traditional plans, was the main factor responsible for this growth, even though the negative impact of the mark-to-market related to the steepening forward yield curve, which amounted to -R$73.5 million, partially offset the improvement.
The non-interest operating result grew by 4.6%, a consequence of a 6.8% increase in management fee revenues, driven by the expansion of 12.7% in pension reserves over the last 12 months. On the other hand, the annualized average management fee rate contracted by 0.04 p.p., influenced by a higher flow of investments directed towards more conservative products, leading to a lower share of multimarket funds in the total reserves, with 23.2% at the end of September 2023 (-5.0 p.p. on Sep/22 | -1.3 p.p. on Jun/23).
Pension contributions grew by 8.7% compared to 3Q22, totaling R$16.5 billion, the highest quarterly volume in the historical series. The evolution of contributions, coupled with the sequential improvement in redemption (-2.4 p.p. YoY | -1.3 p.p. QoQ) and portability (-1.5 p.p. YoY | -0.2 p.p. QoQ) ratios, led to a net inflow of R$5.1 billion, nearly three times higher than reported in the same period of 2022.
Year-to-date, net income grew by 52.3%, driven by the significantly higher net investment income as compared to the same period last year, reflecting the lower cost of liabilities, as mentioned in the quarterly analysis.
The net inflow accumulated until September 2023 was R$7.3 billion, more than seven times higher the 9M22, driven by the increase in contributions (+9.2%), a reduction in the redemption ratio (-1.0 p.p.), and a decrease in the portability ratio (-1.2 p.p.).
Figure 12 - Key performance indicators
3Q23 | Chg. On | 9M23 | Chg. On | |
3Q22 | 9M22 | |||
Net inflows (R$ billion) | 5,107 | 187.8% | 7,306 | 611.9% |
Reserves (R$ billion) | 379 | 12.7% | - | - |
Management fee (% ) | 0.95 | (0.04 p.p.) | 0.95 | (0.05 p.p.) |
Redemption ratio (% ) | 9.5 | (2.4 p.p.) | 10.7 | (1.0 p.p.) |
Portability ratio (% ) | 1.0 | (1.5 p.p.) | 1.2 | (1.2 p.p.) |
Cost to income ratio (% ) | 41.1 | 0.6 p.p. | 42.5 | (0.1 p.p.) |
Year-to-date, management fee revenues grew by 5.2%, helped by the increase in the reserve balance, which more than offset the
0.05 p.p. reduction in the average management fee rate, explained by the lower representation of multimarket funds in the total assets under management, as mentioned in the quarterly
analysis.
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Brasilcap | Premium Bonds (for further details, see page 57)
Table 5 - Summarized income statement
Quarterly Flow | Chg. % | 9 Months Flow | Chg. % | |||||
R$ thousand | 3Q22 | 2Q23 | 3Q23 | On 3Q22 | On 2Q23 | 9M22 | 9M23 | On 9M22 |
Premium bonds collection | 1,615,265 | 1,638,676 | 1,648,071 | 2.0 | 0.6 | 4,206,108 | 4,715,855 | 12.1 |
Changes in provisions for redemption, lottery | (1,447,294) | (1,482,827) | (1,496,940) | 3.4 | 1.0 | (3,765,831) | (4,257,483) | 13.1 |
and bonus | ||||||||
Revenue with load fee | 167,970 | 155,849 | 151,131 | (10.0) | (3.0) | 440,277 | 458,373 | 4.1 |
Result with lottery | 2,326 | 11,128 | 19,012 | - | 70.9 | 15,820 | 36,548 | 131.0 |
Acquisition costs | (139,662) | (146,749) | (141,537) | 1.3 | (3.6) | (363,824) | (412,301) | 13.3 |
G&A | (26,081) | (24,617) | (28,022) | 7.4 | 13.8 | (67,762) | (76,521) | 12.9 |
Other | (974) | (556) | 49 | - | - | (1,004) | (140) | (86.1) |
Non-interest operating result | 3,580 | (4,945) | 633 | (82.3) | - | 23,507 | 5,959 | (74.6) |
Net investment income | 62,600 | 110,756 | 124,462 | 98.8 | 12.4 | 240,121 | 330,261 | 37.5 |
Earnings before taxes and profit | 66,179 | 105,811 | 125,095 | 89.0 | 18.2 | 263,628 | 336,221 | 27.5 |
sharing | ||||||||
Taxes and profit sharing | (28,671) | (42,369) | (52,205) | 82.1 | 23.2 | (108,750) | (137,201) | 26.2 |
Net income | 37,508 | 63,442 | 72,890 | 94.3 | 14.9 | 154,878 | 199,019 | 28.5 |
In 3Q23, the net income from the premium bonds operation was up 94.3% YoY, reaching R$72.9 million. This performance is attributed to the nearly two-fold increase in the net investment income, with the expansion of the average balance of interest earning assets and an increase in the net interest margin (+1.6 p.p.).
Premium bonds collection increased 2.0%, driven by the higher number of single-payment bonds sold. However, the revenue with load fee decreased by 10.0%, impacted by the higher share of single-payment bonds with shorter terms (12 and 24 months) in the total collection, as these products have lower load fees compared to the longer-term ones.
Year-to-date, the net income amounted to R$199.0 million, 28.5% higher than reported in the same period of 2022. The performance was sustained by the growth of the net investment income (+37.5%), due to the expansion of the average balance of interest earning assets and an increase of 0.4 p.p. in the net interest margin.
The premium bonds collection increased 12.1%, driven by the expansion in the quantity of single-payment bonds sold (+92.3%) and the growth of the monthly payment bonds base, generating a higher level of recurrence in 9M23.
On the other hand, the revenue with load fee grew at a slower pace (+4.1%), reflecting the 0.7 p.p. reduction in the average load fee quote, which is justified by the higher share of single-payment bonds with shorter terms, as mentioned in the quarterly analysis.
Figure 13 - Key performance indicators
Chg. On 3Q22 | Chg. On 9M22 | |
Premium bonds collection | ||
Unique payment | 2.4% | 16.2% |
Monthly payment | 1.3% | 5.2% |
First Installments | (9.9%) | (6.2%) |
Recurring | 1.8% | 5.7% |
Installments | ||
Average quotes | ||
Reserve quote | 0.8 p.p. | 0.3 p.p. |
Lottery quote | 0.4 p.p. | 0.5 p.p. |
Bonus quote | (0.00 p.p.) | (0.00 p.p.) |
Load fee quote | (1.2 p.p.) | (0.7 p.p.) |
Other ratios | ||
Technical reserves | 24.9% | 24.9% |
Net interest margin | 1.6 p.p. | 0.4 p.p. |
BB Seguridade Participações S.A. | Management Discussion & Analysis 3Q23 | 10 |
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BB Seguridade Participações SA published this content on 06 November 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 06 November 2023 10:04:52 UTC.