Earnings Release
First Quarter 2024
May 13, 2024
Net New Money | Total AuC |
(R$) | (R$) |
64bn | 1.6tn |
1Q 24 | 1Q 24 |
225bn LTM 1Q 24 | 27% y-o-y growth |
Adjusted Net Income | Total Revenues |
(R$) | (R$) |
2.9bn | 5.9bn |
1Q 24 | 1Q 24 |
28% y-o-y growth | 23% y-o-y growth |
Credit and SME | Unsecured Funding |
Portfolio (R$) | (R$) |
182bn | 225bn |
27% y-o-y growth | 26% y-o-y growth |
SME: 22bn | |
Basel Ratio | ROAE Adj |
16.4% | 22.8% |
1Q 24 | 1Q 24 |
Earnings Release
First Quarter 2024
Highlights
Banco BTG Pactual S.A. reported total revenues of R$5,891.5 million and adjusted net income of R$2,889.4 million for the quarter ended March 2024.
BTG Pactual's adjusted net income per unit and annualized adjusted return on average shareholders' equity ("Annualized Adj. ROAE") were R$0.76 and 22.8%, respectively, for the quarter.
As of March 31, 2024, total assets of BTG Pactual were R$567.7 billion, a 15.1% increase compared to December 31, 2023. Our BIS capital ratio was 16.4%.
Banco BTG Pactual Financial Summary and Key Performance Indicators
Highlights and KPIs | Quarter | Year to Date | |||||
(unaudited) | |||||||
(in R$ million, unless otherwise stated) | 1Q 2023 | 4Q 2023 | 1Q 2024 | 3M 2023 | 3M 2024 | ||
Total adjusted revenues | 4,803 | 5,653 | 5,891 | 4,803 | 5,891 | ||
Accounting net income | 2,133 | 2,728 | 2,774 | 2,133 | 2,774 | ||
Adjusted net income (1) | 2,263 | 2,847 | 2,889 | 2,263 | 2,889 | ||
Adjusted net income per unit (R$) | 0.59 | 0.75 | 0.76 | 0.59 | 0.76 | ||
Annualized ROAE | 20.9% | 23.4% | 22.8% | 20.9% | 22.8% | ||
Adjusted cost to income ratio | 39.3% | 36.0% | 37.5% | 39.3% | 37.5% | ||
Adjusted shareholder's equity | 44,208 | 49,382 | 51,962 | ||||
Total Number of Shares (# in '000) | 11,433,761 | 11,433,761 | 11,433,761 | ||||
Number of Units (# in '000) | 3,811,254 | 3,811,254 | 3,811,254 | ||||
Book Value per unit (R$) | 11.6 | 13.0 | 13.6 | ||||
BIS Capital Ratio | 15.5% | 17.5% | 16.4% | ||||
Total assets (in R$ Billion) | 470.4 | 493.2 | 567.7 | ||||
Total of WuM and AuM | 1,285.1 | 1,569.0 | 1,636.0 | ||||
Note: Number of shares ex-treasury
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Earnings Release
First Quarter 2024
BTG Pactual Performance
BTG Pactual is glad to announce, once again, record revenues and net income in 1Q 2024. The increase in revenues combined with our efficient costs control resulted in a 22.8% ROAE, despite the challenging macroeconomic conditions and the typical negative seasonality that often affects the first quarter of the year.
Besides 1Q 2024 all-time high revenues and net income of R$5,891.5 million and R$2,889.4 million, respectively, we posted strong NNM of R$63.8 billion even with natural first quarter seasonality mentioned above, as we continue to gain market share in both Asset Management and Wealth Management franchises, totaling R$1,636.0 billion of assets.
In April, the Bank issued through its Cayman Island's branch an Unsecured Senior Notes, in the total amount of US$500 million at a fixed coupon rate of 6.450% p.a with five-year tenor and semi-annually coupon payments. We were also able to further expand our funding base to R$224.9 billion with a fortress balance sheet highlighted by our robust capital ratios - BIS ratio ended the period at 16.4%, already considering that we've called our Subordinated Tier 2 Bond in February.
During the quarter, with revenues 4.2% higher than the previous quarter and 22.7% above 1Q 2023, we posted solid results in all our business lines, with record revenues in Asset, Wealth and Corporate Lending.
Asset Management posted revenues of R$574.4 million a 13.0% quarterly increase, even in a quarter that typically does not recognize performance fees.
Wealth Management & Personal Banking registered impressive twenty-one quarters of consecutive revenue growth reaching R$879.1 million, with strong net inflows of R$ 43.6 billion, of which R$15.9 billion was related to the Órama acquisition, approved by regulators in March, enlarging our distribution channel and our market share in the retail segment.
Corporate Lending & Business Banking also printed record revenues of R$1,436.2 million, 6.1% above the previous quarter. Credit book reached R$181.6 billion, with the SME book increasing 7.8% in the quarter backed by a complete digital banking platform and continuous expansion of our product offering.
Investment Banking registered outstanding performance of R$654.0 million, driven by record M&A revenues and strong DCM as market activity continues to gain momentum.
Sales & Trading posted solid revenues of R$1,371.3 million, driven mostly by client flows, despite challenging macro scenario locally and in the international markets. It's worth noting that we consolidated Principal Investments revenues within Sales & Trading due to the similar nature of the business and reduced relevance to total revenues. As a reference, 1Q 2024 principal Investments revenues consisted in R$13mn.
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Earnings Release
First Quarter 2024
Participations reported solid revenues of R$175.7 million coming from our investments, especially Banco PAN and Too Seguros. It's worth mentioning that in line with Banco Pan's strategy of retaining a larger portion of its credit origination, we reduced the portfolio's acquisition during the quarter.
Operating expenses ended the quarter at R$2,418.5 million. The quarterly increase was mainly due to (i) higher bonus provision, which are determined by revenue generation and, (ii) an increase in salaries and benefits in connection with the annual year-end promotions process and salary adjustments. Nevertheless, our adjusted cost-to-income ratio finished the quarter at 37.5%, below historical average.
Accounting net income was R$2,773.9 million in 1Q 2024, up 1.7% and 30.0% on a quarterly and annual basis respectively. Shareholders' equity ended the period at R$52.0 billion, a 5.2% increase over the previous quarter, and a 17.5% y-o-y increase. Our liquidity coverage ratio ("LCR") was 166.5%, while the Basel ratio ended at 16.4%.
Aligned with our commitment to sustainable development, for the fourth consecutive year, BTG Pactual was recognized by the Sustainable Finance Awards, from Global Finance, as Best Bank for Sustainable Finance in Latin America, Best Bank for Sustaining Communities, Best Bank for Sustainable Financing in Emerging Markets and Best Bank for Sustainable Finance in Brazil. In addition, in 1Q 2024, we contributed to the structuring and distribution of US$ 1.7 billion in green and blue bonds and increased our funding base through sustainable finance instruments reaching an amount of R$ 7.7 billion.
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Earnings Release
First Quarter 2024
Adjusted Net Income and ROAE (unaudited)
Adjusted Net Income and ROAE | 1Q 2024 | Non Recurring | 1Q 2024 | ||
Items & | |||||
(unaudited) | Accounting | Adjusted | |||
Goodwill | |||||
Investment Banking | 654.0 | 654.0 | |||
Corporate Lending & Business Banking | 1,436.2 | 1,436.2 | |||
Sales and Trading(1) | 1,371.3 | 1,371.3 | |||
Asset Management | 574.4 | 574.4 | |||
Wealth Management & Personal Banking | 879.1 | 879.1 | |||
Participations | 175.7 | 175.7 | |||
Interest and Other | 800.7 | 800.7 | |||
Total revenues | 5,891.5 | - | 5,891.5 | ||
Bonus | (635.3) | (635.3) | |||
Salaries and benefits | (614.9) | (614.9) | |||
Administrative and other | (653.4) | (653.4) | |||
Goodwill amortization | (210.1) | 210.1 | - | ||
Tax charges, other than income tax | (304.9) | (304.9) | |||
Total operating expenses | (2,418.5) | 210.1 | (2,208.4) | ||
Income before taxes | 3,473.0 | 210.1 | 3,683.1 | ||
Income tax and social contribution | (699.1) | (94.5) | (793.6) | ||
Net Income | 2,773.9 | 115.6 | 2,889.4 | ||
Annualized ROAE | 21.9% | 22.8% | |||
Notes: Results excluding non-recurring items and goodwill provide a more meaningful information of the underlying profitability of our businesses.
(1) Includes Principal Investments
Non-Recurring Items & Goodwill
Goodwill: mainly attributable to some of our most recent acquisitions, such as Banco Pan, Necton, BTG Pactual Advisors, Fator, Empiricus and Órama Investimentos.
Income tax and social contribution: due to goodwill amortization
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Earnings Release
First Quarter 2024
Consolidated Revenues
1Q 2024 was marked by all-time high revenues of R$5,891.5 million, a 22.7% y-o-y growth and 4.2% quarterly increase. Despite the usual seasonality of the first quarter and the challenging environment during the period, our client franchise continued to grow in a strong pace, and we posted record revenues in Corporate Lending & Business Banking, Wealth and Asset Management.
Revenues (unaudited) | Quarter | 1Q 2024 % change to | Year to Date | 3M 2024 % | ||||||||||||||
change to | ||||||||||||||||||
(in R$ million, unless otherwise stated) | 1Q 2023 | 4Q 2023 | 1Q 2024 | 1Q 2023 | 4Q 2023 | 3M 2023 | 3M 2024 | 3M 2023 | ||||||||||
Investment Banking | 260 | 464 | 654 | 151% | 41% | 260 | 654 | 151% | ||||||||||
Corporate Lending & Business Banking | 1,192 | 1,353 | 1,436 | 20% | 6% | 1,192 | 1,436 | 20% | ||||||||||
Sales and Trading(1) | 1,539 | 1,524 | 1,371 | -11% | -10% | 1,539 | 1,371 | -11% | ||||||||||
Asset Management | 443 | 509 | 574 | 30% | 13% | 443 | 574 | 30% | ||||||||||
Wealth Management & Personal Banking | 694 | 862 | 879 | 27% | 2% | 694 | 879 | 27% | ||||||||||
Participations | (70) | 50 | 176 | n.a. | 255% | (70) | 176 | n.a. | ||||||||||
Interest & Others | 745 | 893 | 801 | 7% | -10% | 745 | 801 | 7% | ||||||||||
Total revenues | 4,803 | 5,653 | 5,891 | 23% | 4% | 4,803 | 5,891 | 23% | ||||||||||
Note: (1) Includes Principal Investments, which represented revenues of R$13mn in the quarter.
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Earnings Release
First Quarter 2024
Investment Banking
The tables below include details related to announced transactions in which BTG Pactual participated:
BTG Pactual Announced Transactions | Number of Transactions(1),(3) | Value | (2),(3) | ||||||||
(unaudited) | |||||||||||
(US$ mln) | |||||||||||
1Q 2023 | 4Q 2023 | 1Q 2024 | 1Q 2023 | 4Q 2023 | 1Q 2024 | ||||||
Financial Advisory (M&A)(4) | 81 | 10 | 21 | 14 | 1,625 | 4,646 | 751 | ||||
Equity Underwriting (ECM) | 84 | 3 | 3 | 6 | 330 | 227 | 279 | ||||
Debt Underwriting (DCM) | 87 | 13 | 49 | 22 | 1,293 | 3,276 | 2,199 | ||||
BTG Pactual Announced Transactions | Number of Transactions(1),( | Value | (2),(3) | ||||||||
(unaudited) | |||||||||||
(US$ mln) | |||||||||||
3M 2013 | 3M 2014 | 3M 2015 | 3M 2023 | 3M 2024 | 3M 2023 | 3M 2024 | |||||
Financial Advisory (M&A)(4) | 81 | 8 | 12 | 5 | 10 | 14 | 1,625 | 751 | |||
Equity Underwriting (ECM) | 84 | 5 | 4 | 1 | 3 | 6 | 330 | 279 | |||
Debt Underwriting (DCM) | 87 | 18 | 6 | 8 | 13 | 22 | 1,293 | 2,199 | |||
Source: Dealogic for ECM, M&A and International Brazilian DCM and ANBIMA for Local DCM
Notes:
- Equity underwriting and debt underwriting represent closed transactions. Financial advisory represents announced M&A deals, which typically generate fees upon their subsequent closing.
- Local DCM transactions were converted to U.S. Dollars using the end of quarter exchange rates reported by the Brazilian Central Bank.
- Market data from previous quarters might vary in all products, due to potential inclusions and exclusions.
- M&A market data for previous quarters may vary because: (i) deal inclusions might be delayed at any moment, (ii) canceled transactions will be withdrawn from the rankings, (iii) transaction value might be revised and (iv) transaction enterprise values might change due to debt inclusion, which usually occurs some weeks after the transaction is announced (mainly for non-listed targets).
Investment Banking 1Q 2024 market share highlights
M&A: #1 in number of transactions in both Brazil and LatAm
ECM: #2 in number of transactions in Brazil
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Earnings Release
First Quarter 2024
Revenues (in R$ million)
654
590
464
306
260
1Q 2023 | 2Q 2023 | 3Q 2023 | 4Q 2023 | 1Q 2024 |
1Q 2024 vs. 4Q 2023
Investment Banking posted strong revenues of R$654.0 million, up 41.0% compared to the previous quarter. The outstanding performance was mostly driven by record M&A revenues and strong performance in DCM as market volumes continue to gain momentum in both local and international markets.
Despite the weak contribution from ECM in the quarter, we maintained our leading position in the industry ranking.
1Q 2024 vs. 1Q 2023
Investment Banking revenues increased 151.4%% compared to 1Q 2023, when we delivered R$260.2 million. During 1Q 2023 we had a very restrictive capital markets environment with few concluded transactions in DCM, which explains the strong y-o-y revenue increase.
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Earnings Release
First Quarter 2024
Corporate Lending & Business Banking
Credit Portfolio grew 5.9% during the quarter reaching R$181.6 billion and increased 26.7% on a yearly basis. Even with the strong growth, we were able to maintain our high quality, with more than 80% of our exposure concentrated in AA/A ratings, while maintaining stable spreads.
SME book increased 7.8% in the quarter reaching R$22.1 billion compared to R$20.5 billion in 4Q 2023 as we continue to increase our product offering. We keep gaining market share in both SMEs and large corporations' segments.
Credit Portfolio (in R$ million)
171.577 | 181.647 | ||||||||||||||
160.582 | |||||||||||||||
153.819 | 22.104 | ||||||||||||||
143.380 | 20.513 | ||||||||||||||
17.660 | |||||||||||||||
14.928 | |||||||||||||||
14.605 | 142.922 | 151.064 | 159.543 | ||||||||||||
138.892 | |||||||||||||||
128.775 | |||||||||||||||
1Q 2023 | 2Q 2023 | 3Q 2023 | 4Q 2023 | 1Q 2024 | |||||||||||
Corporate Credit | SME Lending | ||||||||||||||
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Banco BTG Pactual SA published this content on 13 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 13 May 2024 09:21:04 UTC.