Quarterly Information - ITR Banco ABC Brasil S.A. March 31, 2016

Transcription

1 Quarterly Information - ITR Banco ABC Brasil S.A. March 31, 2016

2 Contents Company Information Capital Composition... 1 Individual Financial Statements Balance Sheet - Assets... 2 Balance Sheet - Liabilities... 3 Income Statement... 4 Statement of Comprehensive Income... 5 Statement of cash flow... 6 Statement of Changes in Equity Period from 01/01/2016 to 03/31/ Period from 01/01/2015 to 03/31/ Statement of Value Added... 9 Comments on the Company s Performance Notes to Quarterly Information Reports and Representations Independent Auditors Review Report - Unqualified Executive Board Representation on the Financial Statements Executive Board Representation on Independent Auditors Report... 66

3 Quarterly Information - ITR - 03/31/ BANCO ABC BRASIL S/A Release: 1 Company Information / Capital Composition Number of shares Current quarter (Units) 03/31/2016 Paid-up capital Common 87,515,454 Preferred 86,482,563 Total 173,998,017 Treasury stock Common - Preferred 4,752,546 Total 4,752,546 Page: 1 of 66

4 A free translation from Portuguese into English of the Quarterly Financial Information (ITR) prepared in Brazilian currency and in accordance with accounting practices adopted in Brazil applicable to institutions authorized to operate by the Central Bank of Brazil and presented according with the standards issued by the Brazilian Securities Exchange Commission CVM and Central Bank of Brazil Individual financial statements / Balance sheet - Assets (In thousands of reais) Current quarter Prior year Code Description 03/31/ /31/ Total assets 22,716,159 23,963, Current assets 16,319,412 17,519, Cash and banks 86,147 46, Interbank short-term investments 4,321,667 5,776, Money market investments 3,486,601 4,433, Interbank deposits 202, , Foreign investments 632, , Marketable securities 4,045,811 3,769, Ow n portfolio 2,860,568 3,103, Linked to guarantees given 634,723 54, Linked to repurchase agreements 16,230 4, Derivative financial instruments 534, , Interbank accounts 6, Unsettled payments and receipts 5, Reserve requirements - Central Bank Deposits 1, Loans 6,053,575 6,315, Public sector 52,957 63, Private sector 6,182,891 6,413, Credit assignments operations - 5, Allow ance for loan losses (182,273) (166,274) Other credits 1,737,129 1,572, Foreign exchange portfolio 760, , Income receivable 9,665 9, Trading and intermediation of securities 361, , Credits on guarantees honored 22,189 23, Others 611, , Allow ance for losses on other credits (28,431) (25,325) Other assets 68,095 39, Prepaid expenses 6,405 2, Other assets 61,690 36, Non-current assets 6,177,518 6,227, Interbank short-term investments - 2, Interbank deposits - 2, Marketable securities 1,788,531 1,626, Ow n portfolio 842, , Linked to guarantees given 345, , Derivative financial instruments 600, , Loans 4,046,892 4,303, Public sector 24,000 36, Private sector 4,126,795 4,356, Allow ance for losses on lending operations (103,903) (88,732) Other credits 340, , Income receivable 1,535 1, Sundry 396, , Allow ance for losses on other credits (57,419) (58,512) Other assets 1,907 6, Prepaid expenses 1,907 6, Permanent assets 219, , Investments 174, , Investments in subsidiaries 173, , Other investments Fixed assets 30,274 29, Other fixed assets 46,597 44, Accumulated depreciation (16,323) (15,157) Intangible 14,439 14, Intangible assets 32,303 31, Accumulated amortization (17,864) (16,770) Page: 2 of 66

5 Individual financial statements / Balance sheet - Liabilities (In thousands of reais) Current quarter Prior year Code Description 03/31/ /31/ Total liabilities and equity 22,716,159 23,963, Current liabilities 13,776,859 14,917, Deposits 3,597,311 4,298, Demand deposits 67,439 70, Interbank deposits 159, , Time deposits 3,370,325 3,909, Open market funding 80,793 67, Ow n portfolio 16,197 4, Free movement 64,596 62, Acceptance and issue of securities 3,617,910 3,416, Securities issued abroad - 138, Real estate, mortgage, credit and similar notes 3,601,223 3,276, Certificates of structured finance 16,687 1, Interbank accounts 359, Interbranch accounts 59,336 18, Third party funds in transit 59,336 18, Borrow ings 2,888,379 3,588, Foreign borrow ings 2,888,379 3,588, Onlendings in Brazil 936, , BNDES 570, , FINAME 255, , Other agencies 110, , Foreign onlendings 480, , Other liabilities 1,757,061 1,876, Foreign exchange portfolio 561, , Derivative financial instruments 550, , Social and statutory 45,643 63, Taxes and social security 131, , Trading and intermediation of securities 315, , Tax collection 971 3, Subordinated debts 79,506 60, Sundry 72,141 89, Non-current liabilities 6,283,538 6,506, Deposits 180, , Time deposits 180, , Interbank deposits Acceptance and issue of securities 1,276,039 1,640, Real estate, mortgage, credit and similar notes 1,275,809 1,640, Certificates of structured finance Borrow ings 716, , Foreign borrow ings 716, , Onlending in Brazil 1,174,739 1,214, BNDES 584, , FINAME 561, , Other agencies 29,307 17, Foreign onlendings 654, , Other liabilities 2,280,406 1,865, Derivative financial instruments 475,346 70, Social and statutory Taxes and social security 255, , Subordinated debts 1,535,047 1,627, Debts instruments elegible for capital 6,033 24, Sundry 8,499 7, Deferred income 25,898 29, Equity 2,629,864 2,509, Capital 2,043,014 1,980, Brazilian residents 314, , Foreign residents 1,728,628 1,656, Capital reserve 24,740 27, Profit reserve 518, , Legal 122, , Statutory 444, , Equalization of dividends 389, , Repurchase of ow n company shares 55,000 55, Other income reserves (48,745) (53,322) Treasury stock (48,745) (53,322) Equity valuation adjustments (1,439) (10,958) Securities adjustments (1,439) (10,958) Retained profit 45,507 - Page: 3 of 66

6 Quarterly Information - ITR 03/31/ BANCO ABC BRASIL S/A Release: 1 Individual financial statements / Income statement (In thousands of reais) YTD - current year YTD - prior year Code Description 01/01/2016 to 01/01/2015 to 03/31/ /31/ Income from financial intermediation 353,955 1,179, Lending operations 345, , Marketable securities operations 279, , Gain (losses) on derivative financial instruments (311,122) 523, Foreign exchange operations 35,331 (5,465) Income from receivables acquired 4,693 3, Financial intermediation expenses (20,709) (1,263,180) Funding expenses (191,216) (499,342) Borrow ings and onlendings 219,506 (719,597) Allow ance for loan losses (49,813) (42,221) Allow ance for loan losses- exchange rate variation on foreign exchange contracts 882 (1,059) Income from receivables acquired (68) (961) 3.03 Gross profit from financial intermediation 333,246 (84,034) 3.04 Other operating expenses/income (119,158) 114, Income from services rendered 56,107 45, Personnel expenses (53,140) (40,207) Other administrative expenses (23,989) (23,128) Taxes (8,158) (5,116) Other operating income 9, , Other operating expenses (103,092) (6,555) Equity pickup from subsidiaries 3,331 2, Operating income 214,088 30, Non-operating loss (7,880) (771) Income 1, Expenses (9,053) (886) 3.07 Income before taxes and profit sharing 206,208 29, Provision for income and social contribution taxes (89,526) 73, Provision for income tax (50,367) (3,045) Provision for social contribution tax (44,378) (1,749) Deferred tax credits 5,219 78, Profit sharing/statutory contributions (25,533) (22,953) Profit sharing (25,533) (22,953) 3.13 Net income for the period 91,149 80, Profit per share - (Reais) Page: 4 of 66

7 Quarterly Information - ITR 03/31/ BANCO ABC BRASIL S/A Release: 1 Individual financial statements / Statement of comprehensive income (In thousands of reais) YTD current year YTD prior year Code Description 01/01/2016 to 01/01/2015 to 03/31/ /31/ Net income for the period 91,149 80, Other comprehensive income (loss) 9,519 (6,093) 4.03 Comprehensive income for the period 100,668 74,162 Page: 5 of 66

8 Quarterly Information - ITR 03/31/ BANCO ABC BRASIL S/A Release: 1 Individual financial statements / Statement of cash flows - Indirect method (In thousands of reais) YTD current year YTD prior year Description 01/01/2016 to 01/01/2015 to 03/31/ /31/ Net cash generated (used in) operating activities 1,004, , Cash generated by (used in) operating activities 157, , Net income for the period 91,149 80, Depreciation and amortization 2,261 1, Equity pickup from subsidiaries (3,331) (2,815) Adjustment to market value - securities 9,519 (6,093) Provision for impairment of assets not for ow n use 6, Gain (loss) on disposal of assets not for ow n use 1, Gain (loss) on disposal of fixed assets and intangible Allow ance for loan losses 48,931 43, Provision for contingent liabilities 1,340 4, Changes in assets and liabilities 846,894 91, Interbank investments 354,928 (186,831) Marketable securities and derivative financial instruments (235,688) 177, Lending operations 469,754 (466,310) Other credits and assets (223,385) 167, Interbank accounts - assets / liabilities 353,010 (4,950) Interbranch accounts 40,806 11, Other liabilities 91, , Deferred income (3,676) (4,896) 6.02 Net cash from investing activities (29,901) (28,690) Disposal of assets not for ow n use 1, Acquisition of assets not for ow n use (26,073) (13,431) Acquisition of fixed assets and intangible assets (2,719) (14,871) Disposal of fixed assets for ow n use and intangible assets Allocations of reserves (2,273) (607) 6.03 Net cash from financing activities (2,038,212) 1,592, Deposits (817,027) (127,052) Open market funding 13, Borrow ings and onlendings (1,093,347) 1,323, Securities acceptance and issuance (163,243) 381, Capital increase 62,875 42, Treasury shares 4, Interest on equity (45,642) (29,563) 6.05 Increase (decrease) in cash and cash equivalents (1,063,446) 1,777, Cash and cash equivalents at beginning of the period 4,966,820 2,932, Cash and cash equivalents at end of the period 3,903,374 4,709,856 Page: 6 of 66

9 Quarterly Information - ITR 03/31/ BANCO ABC BRASIL S/A Release: 1 Individual financial statements / Statement of changes in equity - 01/01/2016 to 03/31/2016 (In thousands of reais) Income reserve Retained earnings / accumulated losses Equity valuation Code Capital Revaluation Total equity Description Capital reserve reserve adjustment 5.01 Opening balance 1,980,139 27, ,465 - (10,958) 2,509, Adjusted balance 1,980,139 27, ,465 - (10,958) 2,509, Net income of the period ,149-91, Allocations (45,642) - (45,642) Interest on equity (45,642) - (45,642) 5.07 Equity valuation adjustments ,519 9, Marketable securities adjustment ,519 9, Capital Increase 62, , Allocations of capital reserves - (2,273) (2,273) Allocations of reserves - Management remuneration - (2,273) (2,273) 5.10 Treasury shares , , Closing balance 2,043,014 24, ,042 45,507 (1,439) 2,629,864 Page: 7 of 66

10 Quarterly Information - ITR 03/31/ BANCO ABC BRASIL S/A Release: 1 Individual financial statements / Statement of changes in equity - 01/01/2015 to 03/31/2015 (In thousands of reais) Income reserve Retained earnings / accumulated losses Equity valuation Code Capital Revaluation Total equity Description Capital reserve reserve adjustment 5.01 Opening balance 1,191,586 20, ,668 - (3,648) 2,188, Adjusted balance 1,191,586 20, ,668 - (3,648) 2,188, Net income of the period ,255-80, Allocations (29,563) - (29,563) Interest on equity (29,563) - (29,563) 5.07 Equity valuation adjustments (6,093) (6,093) Marketable securities adjustment (6,093) (6,093) 5.08 Capital Increase 42, , Allocations of capital reserves - (607) (607) Allocations of reserves - Management remuneration - (607) (607) 5.10 Treasury shares Closing balance 1,234,189 20, ,424 50,692 (9,741) 2,275,896 Page: 8 of 66

11 Quarterly Information - ITR - 03/31/ BANCO ABC BRASIL S/A Release: 1 Individual financial statements / Statement of value added (In thousands of reais) YTD current year YTD prior year Code Description 01/01/2016 to 03/31/ /01/2015 to 03/31/ Revenues 370,914 1,322, Financial intermediation 353,955 1,179, Income from services rendered 56,107 45, Allow ance for loan losses (48,931) (43,280) Other 9, , Financial intermediation expenses 28,222 (1,219,900) 7.03 Inputs acquired from third parties (129,803) (26,412) Services provided by third parties (1,833) (1,763) Others (127,970) (24,649) Data Processing and Telecom (3,372) (3,607) Financial system services (4,090) (3,359) Specialized technical services (3,275) (3,584) Travel expenses (1,124) (1,019) Promotions and Public Relations (205) (630) Other Operating Expenses (103,092) (6,555) Non-operating income (7,880) (771) Other Administrative Expenses (4,932) (5,124) 7.04 Gross value added 269,333 76, Allow ances (2,261) (1,984) Depreciation, amortization and depletion (2,261) (1,984) 7.06 Net produced value added 267,072 74, Value added received on transfer 3,331 2, Equity pickup 3,331 2, Total distributable value added 270,403 77, Value added distribution 270,403 77, Personnel 68,418 55, Direct compensation 34,299 25, Benefits 5,295 4, Unemployment Compensation Fund (FGTS) 2,951 2, Other 25,873 23, Profit Sharing 25,533 22, Training Taxes, charges and contributions 107,939 (61,030) Federal 106,460 (62,237) State Municipal 1,466 1, Third party capital remuneration 2,897 2, Rents 2,897 2, Ow n capital remuneration 91,149 80, Interest on equity capital 45,642 29, Retained earnings 45,507 50,692 Page: 9 of 66

12 Comments on the Company s Performance Performance in the third quarter of 2016 We submit to your consideration the individual and consolidated accounting information of Banco ABC BRASIL S.A. for the quarter ended on March 31, Banco ABC BRASIL S.A. Banco ABC Brasil S.A. is a commercial bank specialized in lending and services for midsized to large companies, and is one of the few Brazilian banks featuring international control and local autonomy. The bank is managed by a highly qualified team of senior executives with long experience in financial markets, which are also shareholders of the bank and have broad autonomy and agile decision making to detect and exploit sectorial and cyclical opportunities of the Brazilian economy. Banco ABC Brasil S.A. is present in Brazil since 1989, and since then has built a solid customer base in the Corporate segment by offering high-value added financial products tailored to clients' specific needs. As of 2005, also started to operate in the midsized business segment. The bank is known by its deep expertise in credit risk assessment and concession, and offers a broad portfolio of products and services to its clients. Banco ABC Brasil S.A. is listed in the Level 2 of Corporate Governance of São Paulo Stock Exchange (BM&FBovespa). Shareholding Structure As of March 31, 2016 the shareholding structure of Banco ABC Brasil S.A. was the following: Bank ABC: 59.46%; Free-float: 31.14%; Management and Board members: 6.67%; and Stocks in Treasury: 2.73%. Business Profitability Banco ABC BRASIL S.A. reported net income of R$ 91.1 million in the first quarter of 2016 (R$ million in 4Q15 and R$ 80.3 million in 1Q15), reaching an annualized return on average equity of 14.3% in the quarter (17.0% in 4Q15 and 14.5% in 1Q15). The bank s quarterly net income variation quarter over quarter is explained mainly due to a reduction in the managerial financial margin, in the service revenues and higher expenses. Loan loss reserve expenses remained flat. The bank s quarterly net income variation year over year is explained mainly due to a growth in service revenues and managerial financial margin, partially offset by higher loan loss reserve and operational expenses. Page: 10 of 66

13 Comments on the Company s Performance Credit Portfolio The credit portfolio (including guarantees issued) totaled R$ 19,856.0 million as of the end of March 31, 2016 (R$ 20,025.3 million as of the end of December 31, 2015 and R$ 19,907.5 million as of the end of March 31, 2015). The loan portfolio showed a level of credits rated between AA-C of 94.4% of the total portfolio as of the end of March 2016 (95.5% as of the end of December 2015 and 95.5% as of the end of March 2015). The allowance for loan losses represented 3.38% of the loan portfolio as of the end of March 2016 (2.95% as of the end of December 2015 and 2.41% as of the end of March 2015). IN CVM 381/03 In compliance with CVM Ruling No. 381 of January 14, 2003, which provides for the need to disclose, by audited entities, information on service performance by the Independent Auditor, Banco ABC BRASIL S.A., informs that independent audit services of the financial statements of the Bank and its controlled companies are provided by Ernst & Young Auditores Independentes S.S. No services unrelated to audit were performed. The policy adopted meets the principles that preserve Auditor s independence, in accordance with criteria internationally accepted. These principles are as follows: 1) the auditor must not audit his/her own work; 2) the auditor must not perform managerial activities in his/her customer; 3) the auditor must not promote his/her customer s interests. Securities Portfolio At the end of the period, Banco ABC BRASIL S.A. has R$ million in securities classified as held to maturity, in accordance with Circular No. 3,068/01 of November 8, 2001 of the Central Bank of Brazil. The Bank has the financial capability and intention to hold these securities to maturity. Arbitration Clause Banco ABC BRASIL S.A. is subject to arbitration in the Market Arbitration Chamber, in accordance with the Arbitration Clause contained in its Articles of Association. Page: 11 of 66

14 Comments on the Company s Performance Risk management 1- Corporate Risk Bank ABC Brasil S.A. understands that risk management is a process intended to create and preserve the institution s value, providing reasonable guarantee that events that may affect the institution will be identified and continuously managed in accordance with its risk appetite. Accordingly, Banco ABC Brasil S.A. maintains specific structures to meet Resolutions Nos. 3,380/06, 3,464/07, 3,721/09, 4,090/12 and 4,327/14 of the Central Bank of Brazil, which govern operational, market, credit and liquidity risk management activities, and environmental and social responsibility, respectively. The information related to risk management in compliance with the aforementioned resolutions and Circular No. 3,678/13 of the Central Bank of Brazil is available on the website of Banco ABC Brasil S.A. ( - Investor Relations - IR Services - risk factors - Risk Management Structure - Banco ABC Brasil). Corporate Risk Management is responsibility of all areas and associates. They must perform their activities at best standards and timely communicate risks, failures, and control deficiencies to areas better positioned to solve them. It is exercised, however, in a centralized manner by the departments under the Vice-President of Risk Management and Credit. The governance structure of the Bank considers that the company must be managed with main focus on the generation of value to shareholders, without damaging the rights of other stakeholders, respecting the laws that regulate the markets according to accepted and recommended ethical standards. Such structure meets the regulation of BM&FBovespa SA - Securities, Commodities and Futures Exchange, the Securities and Exchange Commission (CVM) and the Central Bank of Brazil. It is based on bodies defined by the current regulation - such as the Board of Directors and Audit Committee - and supported by internal ones, like the Board Risk Committee and the Executive Committee, and operating committees, such as for example the Credit Committee, the Financial Committee and the Operational Risk and Compliance Committee. The Board of Directors is liable for defining the Institution s risk appetite by the approval of business strategies and maintenance of high governance standards. It must guarantee the effectiveness of the risk management framework, providing independence and resources for the good operation thereof. Accordingly, it is supported by bodies and committees created for such purpose. The Executive Committee is liable for executing the definitions set by the Board of Directors and for managing the activities of the institution. Page: 12 of 66

15 Comments on the Company s Performance 2- Operational Risk The Bank acknowledges that Operational Risk is a specific risk category and should be managed as such. It should cover the institution as a whole, involving all its personnel, including third-party services and consider its processes, activities, systems, products and physical structure. Operational risk management also comprises legal risks, reckoning with the support of the Legal Department. Operational risk management is organized in three defense lines: 1) the managers of the several areas; 2) the Risk Management area and the Operational Risk and Compliance Committee and 3) the Internal Audit. Management is based on ongoing identification, assessment, monitoring, control and mitigation of risks through specific tools. The effectiveness of actions is reinforced by timely communication to management, involvement of people, and the efforts to spread a risk management culture. The Operational Risk and Compliance Committee is the internal body that discusses operational risk, compliance and internal control matters. 3- Market and Liquidity Risk The market and liquidity risks are managed through internal information and tools operated by the Risk Management area, which centralizes the control activities, monitoring the portfolio exposures, as well as current and future acceptable liquidity levels. Treasury executes the decisions taken by the Financial Committee and manages proprietary positions within the limits determined. It also manages the funding as well the inflow and outflow gap. The Financial Committee formally discusses such exposures in its weekly meetings and designs a strategy for the subsequent period. The Risk Management area provides daily information to the Management, Treasury, and members of the Financial Committee. It also prepares periodic specific reports to the Board of Directors and the Audit Committee. In addition, it has to disclose the Bank s risk appetite to the areas involved in the liquidity and market risk management and in the design of new products or activities. 4- Credit Risk Credit risk management permeates diverse Bank activities of authorization, execution, control, and monitoring. This also includes not only individual outlook for economic groups, clients, and operations, but also the aggregate risk factors of the portfolio, such as concentration in a sector, product, or region. The approval of client relationships and of the concession of credit lines is the responsibility of the Credit Committee, up to the limits under Administrative jurisdiction. Beyond that limit, the Board Risk Committee has exclusive rights of approval. The process of management is dynamic and shared, notably in the areas of Credit Risk Analysis, Administration, and Risk Management, which are part of the structure of the Credit and Risks Vice- Presidency. This seeks to guarantee that risks are within stipulated limits and that the coverage of required guarantees are at desired levels, with the expected quality and accessible to the Bank in case of default. Page: 13 of 66

16 Comments on the Company s Performance The Credit Risk Management area is responsible for monitoring the credit portfolio. This includes accompanying the quality of portfolios and carrying out of stress tests, as well as the development and good performance of models for attributing counterparty and deal risk classifications. The area also monitors risk concentration and evaluates the impacts of adverse scenarios. Above all, however, credit risks are the responsibility of the areas and personnel that maintain commercial relationships with the client. 5- Environmental and Social Responsibility The environmental and social responsibility policy defines the guidelines for the identification, assessment, monitoring, mitigation and control of environmental and social risk in compliance with Resolution 4,327/14 of the Central Bank of Brazil. The Bank has research tools, internal analysis processes and governance structure that allow the management of such risks. The Bank also applies environmental and social questionnaires to the clients according to internal eligibility criteria. 6- Gestão de Capital The capital management is conducted jointly by the Executive Committee and the Board of Directors based on activities coordinated by the Financial Planning area, which is also responsible for structuring the annual strategic plan and monitoring the budget. The Risk Management and the Finance areas participate also in the process, contributing with information, subsidies and complementary assessment. The information relating to capital management in compliance with Resolution No. 3,988/11 of the Central Bank of Brazil is available on the website of Banco ABC Brazil S.A. ( - Investor Relations - IR Services - risk factors). 7- Compensation Committee The Bank has a Compensation Committee established in the first General Shareholder s Meeting of 2012 that shall be responsible for (i) proposing to the Board of Directors the various forms of fixed and variable compensation, the benefits as well as the bespoke recruitment and severance programs; (ii) supervising the implementation and operation of the compensation policy for the institution s managers; (iii) reviewing on an annual basis the institution s management compensation policy and recommending to the Board of Directors any correction or improvement; (iv) proposing to the Board of Directors the sum of overall compensation for managers to be submitted to the General Shareholders Meeting in accordance with article 152 of Corporation Law; (v) assessing future internal or external scenarios and their possible impacts on management compensation; (vi) analyzing the institution s management compensation policy in relation to market practices in order to identify significant discrepancies in relation to similar companies and proposing adjustments when necessary; (vii) ensuring that the management compensation policy is always compatible with the risk management policy, with the institution s current and projected objectives and financial position as well the provisions of that resolution; and (viii) preparing on an annual basis in a ninety day period as from December 31, each year a document known as the Compensation Committee Report as provided in Resolution No. 3,921 of Brazil s National Monetary Council. Page: 14 of 66

17 Comments on the Company s Performance 8- Compliance risk Banco ABC Brazil through its Compliance department seeks to ensure the existence of corporate policies, processes, controls and continuous monitoring of meeting regulatory requirements of regulatory agencies and professional associations, as well as prevent anti-money laundering and combat the terrorism financing. Acting on the orientation and awareness, aimed at curbing activities and conduct that could cause damage to the institution's image and use its best efforts in the dissemination and practices of Law Nº 12,846 of Anti- Corruption an Bribery Law. Within the Compliance area have the security area information that is responsible for defining and implementing rules and policies to ensure the confidentiality, integrity and availability of information. Sao Paulo, May 04, The management Page: 15 of 66

18 Notes to the financial statements Based on National Monetary Council Resolution No. 3,853/10 and BACEN Circular Letter No. 3,447/10, Banco ABC Brasil S.A decided to prepare its consolidated quarterly financial information in accordance with accounting practices adopted in Brazil, applicable to financial institutions authorized to operate by the Central Bank of Brazil. Thus, we did not fill in the charts referring to standardized consolidated data since they only apply when preparing consolidated financial statements in accordance with the pronouncements issued by CPC approved by CVM and aligned with international standards issued by IASB. We present below the consolidated balance sheet and the related consolidated income statement, explanatory notes, consolidated cash flows and consolidated statement of value added in accordance with accounting practices adopted in Brazil applicable to financial institutions authorized to operate by the Central Bank of Brazil: Page: 16 of 66

19 Quarterly Information - ITR 03/31/ BANCO ABC BRASIL S/A Release: 1 A free translation from Portuguese into English of the Quarterly Financial Information (ITR) prepared in Brazilian currency and in accordance with accounting practices adopted in Brazil applicable to institutions authorized by Brazilian Central Bank and presented in accordance with the standards issued to operate by Brazilian Securities Exchange Commission CVM and Brazilian Central Bank Banco ABC Brasil S.A. Consolidated balance sheets March 31, 2016 and December 31, 2015 (In thousands of reais) Consolidated March December Assets Notes Current assets 16,831,734 17,939,538 Cash and banks 3 86,147 46,655 Interbank investments 4 4,321,667 5,776,592 Money market investments 3,486,601 4,433,494 Interbank deposits 202, ,353 Foreign investments 632, ,745 Marketable securities and derivative instruments 4,266,201 4,058,457 Ow n portfolio 5.a 3,018,626 3,278,128 Linked to guarantees given 5.a 635,488 54,211 Linked to repurchase agreement 5.a 16,230 4,361 Derivative financial instruments 5.b 595, ,757 Interbank accounts 6 6, Unsettled payments and receipts 5, Reserve requirements Central Bank Deposits 1, Lending operations 6,053,575 6,315,378 Loans - public sector 7 52,957 63,142 Loans - private sector 7 6,182,891 6,413,158 Credit assignments operations 7-5,352 Allow ance for loan losses 8 (182,273) (166,274) Other credits 2,029,061 1,702,690 Credits on guarantees honored 22,189 23,746 Foreign exchange portfolio 9.a 760, ,218 Receivables 9,665 9,366 Trading and intermediation of securities 9.b 653, ,323 Sundry 9.c 611, ,362 Allow ance for losses on other credits 8 (28,431) (25,325) Other assets 68,095 39,556 Other assets 61,690 36,782 Prepaid expenses 6,405 2,774 Noncurrent assets 6,567,958 6,228,003 Interbank investments 4-2,941 Interbank deposits - 2,941 Marketable securities and derivative instruments 2,178,960 1,626,439 Ow n portfolio 5.a 842, ,334 Linked to guarantees given 5.a 345, ,100 Derivative financial instruments 5.b 990, ,005 Lending operations 4,046,892 4,303,774 Loans - public sector 7 24,000 36,000 Loans - private sector 7 4,126,795 4,356,506 Allow ance for loan losses 8 (103,903) (88,732) Other credits 340, ,744 Receivables 1,535 1,500 Sundry 9.c 396, ,756 Allow ance for losses on other credits 8 (57,419) (58,512) Other assets 1,907 6,105 Prepaid expenses 1,907 6,105 Permanent assets 45,327 44,869 Investments Other investments Fixed assets 11 30,274 29,770 Other fixed assets 46,597 44,927 Accumulated depreciation (16,323) (15,157) Intangible 11 14,439 14,485 Intangible assets 32,303 31,255 Accumulated amortization (17,864) (16,770) Total assets 23,445,019 24,212,410 Page: 17 of 66

20 Quarterly Information - ITR 03/31/ BANCO ABC BRASIL S/A Release: 1 Consolidated March December Liabilities Notes Current liabilities 14,133,331 15,167,026 Deposits 12 3,597,073 4,297,254 Demand deposits 67,201 69,277 Interbank deposits 159, ,605 Time deposits 3,370,325 3,909,372 Money market funding 80,793 67,198 Ow n portifolio 16,197 4,351 Free Movement 64,596 62,847 Funds from acceptance and issue of securities 13 3,617,910 3,416,371 Real estate, mortgage, credit an similar notes 3,601,223 3,276,873 Securities issued abroad - 138,218 Certificates of structured finance 16,687 1,280 Interbank accounts ,788 - Obligations to participants settlement systems 359,788 - Interbranch accounts 59,336 18,530 Third party funds in transit 59,336 18,530 Borrow ings 15 2,888,379 3,588,516 Foreign borrow ings 2,888,379 3,588,516 Onlendings in Brazil government agencies , ,412 BNDES 570, ,882 FINAME 255, ,370 Other institutions 110, ,160 Transfers abroad , ,628 Liabilities due to transfers abroad 480, ,628 Derivative financial instruments 5.b 592, ,723 Derivative financial instruments 592, ,723 Other liabilities 1,521,126 1,248,394 Collection of taxes 971 3,346 Foreign exchange portfolio 16.a 561, ,453 Social and statutory 45,643 63,469 Taxes and social security 16.b 133, ,085 Trading and intermediation of securities 627, ,297 Subordinated debts 16.c 79,506 60,292 Sundry 16.e 72,137 89,452 Noncurrent liabilities 6,655,926 6,506,151 Deposits , ,942 Interbank deposits Time deposits 180, ,347 Funds from acceptance and issue of securities 13 1,276,039 1,640,821 Real estate, mortgage, credit an similar notes 1,275,809 1,640,821 Certificates of structured finance Borrow ings , ,027 Foreign borrow ings 716, ,027 Onlendings in Brazil government agencies 15 1,174,739 1,214,562 BNDES 584, ,803 FINAME 561, ,809 Other institutions 29,307 17,950 Transfers abroad , ,062 Liabilities due to transfers abroad 654, ,062 Derivative financial instruments 5.b 847,735 70,045 Derivative financial instruments 847,735 70,045 Other liabilities 1,805,059 1,795,692 Social and statutory Taxes and social security 16.b 255, ,719 Subordinated debts 16.c 1,535,047 1,627,433 Debts instruments elegible for capital 16.d 6,033 24,429 Sundry 16.e 8,498 7,796 Deferred income 25,898 29,574 Deferred income 25,898 29,574 Equity 26 2,629,864 2,509,659 Capital: 2,043,014 1,980,139 Brazilian residents 314, ,916 Foreign residents 1,728,628 1,656,223 Capital reserve 24,740 27,013 Income reserves 566, ,787 Equity valuation adjustment (1,439) (10,958) Treasury shares (48,745) (53,322) Retained earnings 45,507 - Total Liabilities 23,445,019 24,212,410 See accompanying notes. Page: 18 of 66

21 Quarterly Information - ITR 03/31/ BANCO ABC BRASIL S/A Release: 1 Banco ABC Brasil S.A. Consolidated income statements Period ended March 31, 2016 and 2015 (In thousands of reais, except earnings per share) YTD current YTD prior year year 01/01/2016 to 01/01/2015 to Notes 03/31/ /31/2015 Income from financial intermediation 359,903 1,183,865 Lending operations 345, ,620 Marketable securities 284, ,195 Gain (losses) on derivative financial instruments 5.b (310,883) 523,843 Foreign exchange operations 35,331 (5,465) Gain on financial assets sale or transfer 4,693 3,672 Expenses from financial intermediation (20,709) (1,263,180) Funding expenses (191,216) (500,395) Borrow ings and onlendings 219,506 (718,544) Allow ance for loan losses 8 (49,813) (42,221) Allow ance for loan losses Exchange rate variation on credit assignment operations 882 (1,059) Gain on financial assets sale or transfer (68) (961) Gross income from financial intermediation 339,194 (79,315) Other operating income (expenses) (122,964) 111,554 Income from services rendered 17 56,107 45,324 Personnel expenses (53,258) (40,297) Other administrative expenses 18 (24,087) (23,192) Taxes (8,417) (5,239) Other operating income 19 9, ,513 Other operating expenses 20 (103,092) (6,555) Operating income 216,230 32,239 Non-operating loss (7,880) (771) Income before taxes and profit sharing 208,350 31,468 Income and social contribution taxes 21 (91,668) 71,740 Provision for income tax (51,597) (4,143) Provision for social contribution tax (45,063) (2,277) Deferred tax credits 4,992 78,160 Variable compensation (25,533) (22,953) Net income for the quarter 91,149 80,255 Net earnings per outstanding share - in R$ - 169,245,471 shares (154,778,414 in 2015) See accompanying notes. Page: 19 of 66

22 Quarterly Information - ITR 03/31/ BANCO ABC BRASIL S/A Banco ABC Brasil S.A. Consolidated statements of changes in equity Period ended March 31, 2016 and 2015 (In thousands of reais) Income reserves Equity Capital Legal Dividends Share valuation Retained Treasury Capital reserve reserve equalization buyback adjustment earnings shares Total Balances at December 31, ,191,586 20, , ,178 55,000 (3,648) - (45,168) 2,188,545 Adjustment to market value - securities and derivatives (6,093) - - (6,093) Acquisition / distribuition of treasury shares Capital Increase 42, ,603 Net income for the period ,255-80,255 Interest on equity capital (29,563) - (29,563) Realization of reserves - M anagement remuneration - (607) (607) Balances at March 31, ,234,189 20, , ,178 55,000 (9,741) 50,692 (44,412) 2,275,896 Balances at December 31, ,980,139 27, , ,583 55,000 (10,958) - (53,322) 2,509,659 Adjustment to market value - securities and derivatives , ,519 Acquisition / distribuition of treasury shares ,577 4,577 Capital Increase 62, ,875 Net inco me for the period ,149-91,149 Interest on equity capital (45,642) - (45,642) Realization of reserves - M anagement remuneration - (2,273) (2,273) Balances at M arch 31, ,043,014 24, , ,583 55,000 (1,439) 45,507 (48,745) 2,629,864 See accompanying notes. Page: 20 of 66

23 Quarterly Information - ITR 03/31/ BANCO ABC BRASIL S/A Banco ABC Brasil S.A. Consolidated of cash flows statements - Indirect method Period ended March 31, 2016 and 2015 (In thousands of reais) Consolidated YTD current year YTD prior year 01/01/2016 to 03/31/ /01/2015 to 03/31/2015 Operating activities Adjusted net income of the period 161, ,094 Net income of the period 91,149 80,255 Adjustment to net income: 69,955 44,839 Depreciation and amortization 2,261 1,984 Income (loss) on disposal of assets not used in banking operations 1, Gain (loss) on disposal of fixed assets and intangible - 15 Provision for impairment of assets not of ow n use 6, Allow ance for loan losses 48,931 43,280 Provision for contingent liabilities 1,340 4,904 Mark-to-market - marketable securities and derivatives 9,519 (6,093) Changes in assets and liabilities 842,766 88,117 Decrease in interbank investments 354,928 (186,831) (Decrease ) / Increase in marketable securities and derivative financial instruments (assets / liabilities) (267,653) 176,755 Decrease / (Increase) in lending operations 469,754 (466,310) Decrease / (Increase) in other credits and other assets (385,162) 169,465 Decrease in interbank accounts (assets / liabilities) 353,010 (4,950) Decrease in interbranch accounts 40,806 11,672 Increase in other liabilities 280, ,212 (Decrease) in deferred income (3,676) (4,896) Cash flow used in from operating activities 1,003, ,211 Investments activities Acquisition of fixed assets and intangible (2,719) (14,871) Acquisition of assets not used in banking operations (26,073) (13,431) Disposal of fixed assets for ow n use and intangible assets Disposal of assets on ow n use 1, Realization of reserves of capital (2,273) (607) Cash flow used in investment activities (29,901) (28,690) Financing activities (Decrease) in deposits (816,230) (126,783) Increase in money market funding 13, (Decrease) / Increase in borrow ings and onlendings (1,093,347) 1,323,939 Increase / (Decrease) in acceptance and issuance of securities (163,243) 381,393 Treasury shares 4, Capital Increase 62,875 42,603 Interest on equity capital (45,642) (29,563) Cash (used in) / provided by financing activities (2,037,415) 1,593,217 Increase of cash and cash equivalents (1,063,446) 1,777,738 At beginning of the period 4,966,820 2,932,118 At end of the period 3,903,374 4,709,856 Change in cash and cash equivalents (1,063,446) 1,777,738 See accompanying notes. Page: 21 of 66

24 Quarterly Information - ITR 03/31/ BANCO ABC BRASIL S/A Banco ABC Brasil S.A. Consolidated statements of value added Period ended March 31, 2016 and 2015 (In thousands of reais) Determination of Value Added Notes Consolidated YTD current year YTD prior year 01/01/2016 to 01/01/2015 to 03/31/ /31/2015 Income 376,862 1,327,422 Income from financial intermediation 359,903 1,183,865 Income from services rendered 17 56,107 45,324 Set-up of allow ance for loan losses (48,931) (43,280) Other operating income 19 9, ,513 Expenses from financial intermediation 28,222 (1,219,900) Assets acquired from third parties (129,901) (26,476) Telecommunications and data processing 18 (3,377) (3,618) Services provided by third parties 18 (1,713) (1,674) Financial services 18 (4,200) (3,363) Specialized technical services 18 (3,288) (3,621) Travel expenses 18 (1,124) (1,019) Promotions and public relations 18 (205) (630) Other operating expenses 20 (103,092) (6,555) Non-operating income (7,880) (771) Other administrative expenses 18 (5,022) (5,225) Gross value added 275,183 81,046 Retained values (2,261) (1,984) Depreciation and amortization 18 (2,261) (1,984) Total value added to be distributed 272,922 79,062 Distribution of value added 272,922 79,062 Salaries and social charges 68,514 56,013 Direct compensation 34,380 25,786 Benefits 5,303 4,697 Social Charges - FGTS 2,958 2,053 Training Profit sharing 25,533 22,953 Taxes, charges and compulsory contributions 110,362 (59,264) Federal 108,880 (60,471) State Municipal 1,469 1,190 Compensation of third party capital 2,897 2,058 Rental 18 2,897 2,058 Compensation of shareholders 91,149 80,255 Interest on equity capital 26.b 45,642 29,563 Retained profit 45,507 50,692 See accompanying notes. Page: 22 of 66

25 Quarterly Information - ITR 03/31/ BANCO ABC BRASIL S/A Banco ABC Brasil S.A. Consolidated income statements Period ended March 31, 2016 and 2015 (In thousands of reais) YTD current ye ar YTD prior year 01/01/2016 to 03/31/ /01/2015 to 03/31/2015 Net income for the period 91,149 80,255 Other comprehensive income (loss) 9,519 (6,093) Comprehensive income for the period 100,668 74,162 See accompanying notes. Page: 23 of 66

26 Quarterly Information - ITR 01/31/ BANCO ABC BRASIL S/A Release: 1 1. Operations The Bank is a publicly traded corporation and a subsidiary of the Arab Banking Corporation, based in Bahrain. In Brazil, the Bank is engaged in asset and liability operations inherent to multiple bank activities, being authorized to operate with commercial, foreign exchange, investment, credit and financing and housing financing portfolios. The Bank s operations are conducted through branches in Brazil and abroad through an overseas branch located in Georgetown, Cayman Islands (Note 23). 2. Financial statements presentation, consolidation criteria and significant accounting practices I Financial statements presentation and consolidation criteria The financial statements (individual and consolidated) were prepared in accordance with accounting practices adopted in Brazil, in light of accounting guidelines contained in Law No. 6,404/76 with amendments introduced by Law No. 11,638/07 and 11,941/09, and the standards and instructions of the Central Bank of Brazil (BACEN) and the Brazilian Securities and Exchange Commission (CVM). The consolidated financial statements include the financial statements of Banco ABC BRASIL S.A. and those of the subsidiaries ABC BRASIL Distribuidora de Títulos e Valores Mobiliários S.A. and ABC BRASIL Administração e Participações Ltda., for which the direct and indirect ownership interest as of March 31, 2016, is equivalent to approximately 100%. The accounting practices adopted to record operations and assess the Bank s assets, including operations conducted by the overseas branch and its consolidated subsidiaries were consistently applied and investments, rights, obligations and P&L among consolidated companies were eliminated. In accordance with the convergence process to international accounting standards, certain standards and interpretations were issued by Brazilian FASB (CPC), which will be applicable to financial institutions only when approved by BACEN. The accounting pronouncements already approved by BACEN are: Resolution No. 3,566/08 - Impairment of assets; Resolution No. 3,604/08 - Cash flow statement; Resolution No. 3,750/09 - Related party disclosure; Resolution No. 3,823/09 - Provisions, contingent liabilities and contingent assets; Resolution No. 3,973/11 - Subsequent events; Resolution No. 3,989/11 - Share-based payments; Resolution No. 4,007/11 - Accounting policies, change in estimates and correction of errors; Resolution No. 4,144/12 - Conceptual framework; and Resolution No. 4,424/12 Employee benefits. The preparation of the financial statements (individual and consolidated) in accordance with accounting practices adopted in Brazil, applicable to institutions authorized to operate by the Central Bank of Brazil, require that management use assumptions and professional judgment in determining amounts and in recording of accounting estimates, such as the allowance for loan losses, deferred income tax, provision for contingencies and valuation of derivative instruments receivable and payable. Settlement of these transactions involving these estimates may result in amounts different from those estimated, due to the uncertainties related to the determination process. Page: 24 of 66

27 Quarterly Information - ITR 01/31/ BANCO ABC BRASIL S/A Release: 1 Significant accounting practices are summarized as follows: a) Asset valuation criteria Interbank investments, loans and other rights, except for marketable securities and derivative financial instruments, are stated at cost of acquisition, of investment or release, plus exchange rate variation, monetary restatement and contractual interest. Allowances are recognized for adjustment to realizable value when market value is lower. Marketable securities and derivative financial instruments are classified in accordance with management s intention to hold them in the portfolio, or their availability for sale, and are recorded as follows: Trading securities: are acquired for the purpose of being actively and frequently traded. They are adjusted to market value with the related gain or loss recognized directly in the statements of income for the period. Held to maturity: marketable securities for which the Bank has the intent and ability to maintain in portfolio to maturity are stated at cost, plus earnings reflected in the statements of income for the period. Permanent losses are recognized in P&L for the year. Available for sale: marketable securities which cannot be classified as either trading securities or as held to maturity are adjusted to market value. The difference between the amounts restated by the yield curve of the security and market value is recorded under a separate account in shareholders equity, net of tax effects, and transferred to the statements of income for the period when effectively realized. Derivative financial instruments: marked to market against P&L for the period. Forward operations are recorded at final contracted value, less the difference between such value and cash value of the asset or right. This difference is recognized as income or expenses based on the agreement effective terms. Option transactions are recorded at the value of premiums paid or received through effective exercise thereof reduction restated at market value. They are then written off as a decrease or increase in asset or right cost, for the effective exercise thereof, or as income or expenses if not exercised. Futures transactions are recorded at daily adjustment values, allocated as income or expenses. Swap operations are recorded at the value of the receivables-payables difference, which is allocated as income or expenses. Operations with other derivative financial instruments are recorded based on the agreement characteristics. The allowance for loan losses is recognized at an amount considered sufficient to cover potential losses on the Bank s loan portfolio, based on past experience, assessment of delinquent accounts and collateral risks, as well as specific terms and conditions of the operations, in conformity with BACEN Resolution No. 2,682/99. Investments in subsidiaries are stated by the equity method in proportion to the Bank s ownership interest; other investments are stated at cost of acquisition, less a reserve, where applicable, to cover permanent losses. Assets and rights, classified under fixed assets in use are stated at cost of acquisition, less depreciation, where applicable, provided under the straight line method using rates that take the useful lives of the assets into consideration. Page: 25 of 66