PRESENTATION

CONFERENCE CALL

4Q19

1

MANDATE

2

Implement the PHYGITAL Strategy

• Leverage the entire network of correspondents and franchisees with a high degree of knowledge of the low-digital audience

• Combine physical stores and digital channels to start relationships

• Add scale and efficiency by embedding this audience with broader offers via digital media

Manage costsobsessively

• Achieve maximum efficiency through the application of Zero Base Budget

• Increase control mechanisms and proactive performance in the main cost offenders

• Evolve corporate governance to best in class for publicly traded companies

Accelerate theBank modernization

• Evolve organizational culture to quickly incorporate major market changes

• Evolving agile work model in all areas of the organization

• Accelerate upskilling of the current team, always reinforcing a more competitive human capital in the market

A B C

Physical channel helps the onboarding

of the digital bank

PHYGITAL STRATEGY

Client’s PHYGITAL Journey

Client goes to the physical channel

Client acquires new products and benefits

Meritocratic alignment

Maintains maximum profitability Optimizes service capacity

Client hires credit

products

Client renews credit

products

PHYSICAL DIGITAL

SCALE GAIN

GREATER LOYALTY

HIGHER CROSS SELL

HIGHER MARGIN

LOWER CAC

PHYGITAL

3

A

3.5 3.6 3.8 3.94.1

4Q18 1Q19 2Q19 3Q19 4Q19

Client Lifecycle

CLIENT CENTRICITY IS THE BASIS OF PHYGITAL

+15%

Evolution of active clients(million)

4Qx4Q

OF PAYROLLCREDIT CARDS

+4 million +830 KACCOUNTSOPPENED

1.75xCROSS-SELLING

INDEX

4

Client

DirectDebit Loan

Payroll CreditCard

Investments

Payroll Loan

Credit Card

Insurance

Save For Me

COSTS MANAGEMENT

Main actions being carried out for a new cost management culture at BMG

Unprecedented granularity

Redirection for investments

Reinforcement ofcontrol mechanisms

Best-in-class governance

Incorporation into culture

5

B

Scrutiny of all bank costs through a zero-based budget, attacking every opportunity

Redirection of part for investments and strengthening of technology, with aggressive search for efficiency on all fronts

Implementation of mechanisms for strict and constant control of the main cost offenders. Implementation of alignment of incentives and of mass civil claims end-to-end process for cost reduction

Evolution of the bank's decision-making process to have a reference governance model among publicly-held companies

Impression of the cost management obsession in the bank's DNA, as well as in the way all employees act

1McKinsey Organizational Health Research (OHI) ²Spencer Stuart Leadership and Organizational Culture Assessment

BANK MODERNIZATION

6

C

Engagement of professionals within of the top 10% of the market1

89 years as a Bank with constant reinventions in the way it operates

Strengths of the Bank’s Current Culture

High Engagement

Entrepreneurship

Adaptability

Executive profile closer to start-ups than traditional banks2

More agile work model, counting with 40 squads on the main value fronts

Evolve culture to offer differentiated journey for both clients and talents

Agility

Technology

Differentiation

Strengthen the technological and process backbone to sustain growth

Enhanced through ....

2019 HIGHLIGHTS

NIM

22.5%

+3.5p.p.

RECURRING NET INCOME

R$ 344 million+33.4%

802 help! stores

+69.9%

RETAIL LOAN PORTFOLIO

R$ 9.7 billion+22.9%

BASEL RATIO

22.5%

+10.1p.p.

4Q19 AccountingExchange

Var. &Overhedge

Securitization

Goodwill

CSLL & Provision

Sale % BMG

SegurosManagerial

(R$ Million)Income from financial intermediation 912 18 930

Expenses on financial intermediation (242) (23) (2) (267)

Net provision for impairment of credits (138) (138)

Gross profit from financial intermediation 532 (5) (2) 525

Other operating income (expenses) (742) 1 2 36 313 (26) (416)

Non-operating results (1) (1)

Profit before taxes and profit sharing (210) (4) 0 36 313 (26) 108

Income tax, social contribution andparticipation 373 4 (15) (121) 278

Increase in the social contribution rate (276) (276)

Net Income 163 0 0 22 (84) (26) 74

NIM EFFECTS RESULTS EFFECTS

MANAGERIAL INCOME STATEMENT

8

Net interest margin before and after cost of credit

1 - interest income + interest income / average profitable assets2 - interest financial margin after expenses with net provision for recovery and expenses with agent fees + revenue from services rendered / average profitable assets 9

CONSTANT MARGIN EVOLUTION

22.3% 22.8% 23.2% 25.1% 26.6%

15.2% 14.9% 14.1% 15.5% 16.5%

4Q18 1Q19 2Q19 3Q19 4Q19

NIM NIM adjusted to the cost of credit

+4.3 p.p.

+1.3 p.p.

4Qx4Q

1 2

INVESTMENTS

Operational efficiency 1

1 - (Personnel Expenses + Other Administrative Expenses (does not include amortization) + Other Operating Expenses, Net of Revenue) / (Result of Financial Intermediation before PDD + Income from Services Rendered + Tax Expenses) 10

+12.2 p.p.

4Qx4Q

57.2%51.7% 51.2% 53.7%

59.5%

4Q18 1Q19 2Q19 3Q19 4Q19

BMG provision policy

R$ 16 million

R$ 81 million

R$ 474 million

R$ 571 million

Strategic Massified ~77%

All actions are classified based on the likelihood of loss:

• Likely: provisioned in the balance sheet

• Possible: disclosed in the Financial Statement notes

• Remote: does not require provision or disclosure

• Upon entry, 100% of lawsuits are provisioned

• Provision: by product and region, according to the average ticket of the closing of lawsuits in the last 12 months

OPERATING PROVISIONS

11

Tax Labor Civil Total Provision

FRONTS OF ACTION

Mitigate the filing of new lawsuits:• Consent form

• Strengthening the quality of origination in the sales channel

with meritocratic alignment

Specific projects involving legal matters:

• Periodic and systematic visits to the Judiciary

• Use of artificial intelligence to monitor processes and the

performance of aggressor lawyers

• Strengthen legal theses related to products

• Securities trading policies based on predictive models

7,120 7,316 7,553 7,754 7,993

3.4% 3.4% 3.4% 3.4% 3.4%

4Q18 1Q19 2Q19 3Q19 4Q19

credit portfolio % interest rate p.m.

3.1% 3.0% 3.2% 3.1% 3.3%

3.2% 3.2% 3.4% 3.4% 3.6%

4Q18 1Q19 2Q19 3Q19 4Q19

Accounting Simulation without insurance

BEST CREDIT CARD FOR THE CLIENT

Credit Portfolio

of penetration of mass insurance in the portfolio39%

R$ Million

1 2

1 - Methodology: E-H portfolio / total portfolio | 2 - Management view without mass insurance

Payroll credit card

+12,3%

growth of interchange fees (19x18)29,5%

12

NPL – over 90 days

32.9% 30.0% 27.4% 28.5% 28.8%

4Q18 1Q19 2Q19 3Q19 4Q19

Accounting

447 532 612 685778

20.7% 20.5% 20.4% 20.3% 20.4%

4Q18 1Q19 2Q19 3Q19 4Q19credit portfolio interest rate %p.m.

+74,0%

1

RISK BASED PRICING

53% 60%

13

Direct Debit Loan

1 - Methodology: E-H portfolio / total portfolio

Credit Portfolio R$ Million

NPL – over 90 days

of portfolio of origination receive the INSS benefit at BMGvs. 32% in 2018 vs. 45% in 2018

1 – Credit assignment without retention of risks and benefits

Payroll Loan

RESUMPTION OF PAYROLL LOAN

14

Origination 4Q19

SecuritizationCompany

DataPrev

service

Assignment Limit Value

R$ 1.5 bn

Securitization partnership

INSS

Volume: R$ 391 million

Agreement: Social Security (INSS)

Average Ticket: R$ 5,000

Average Interest: 1.8% p.m.

Term: 72 months

Assignment 4Q19

Volume: R$ 179 million

Result: R$ 2 million

0.29% p.m.

1

15

Issued premiums evolution Sources of Income

R$ 82 mn in revenue in 2019(vs. R$ 54 million in 2018)

+ +

+23,4%R$ Million

PERENNIAL REVENUE AND GROWTH IN THE SALE OF PREMIUMS

Mass Insurance

48 47

57 5459

4Q18 1Q19 2Q19 3Q19 4Q19

R$ 37 million

in servicerevenue

R$ 20 million in profit

share

R$ 25 millionreduction in

provisionexpenses

Evolution of funding

+6 months

OPPORTUNITY TO REDUCE THE AVERAGE FUNDING COST AND THE ALM STRUCTURE

DurationPositive Gap

16

Asset and liability management

R$ Million

76% 77% 77% 76% 82%

13% 13% 13% 13% 6%3% 2% 4%

5%5%

12,354 12,234 12,723 13,246 12,409

4Q18 1Q19 2Q19 3Q19 4Q19

Deposits External FundingFinancial Bills Credit AssignmentsOther

Assets Funding

17months

23 months

In Nov/19, USD 243 million from BMG19 matured with cost of dollar + 9.95% p.a.

In Ago/20, USD 165 million from BMG20 will mature with cost of dollar + 8.875% p.a.

Throughout 2020, ~R$ 1 billion in fixed-rate deposits will mature.

GUIDANCE 2020

1. Includes revenue from credit operations + funding expenses and derivatives + revenue from services rendered2. Includes credit provision net of recovery + agent commission3. Includes personnel + administrative + operating expenses

17

2020

Total Credit Portfolio 30% 40%

Interest Margin 3,800 4,100

Cost of Credit 1,400 1,550

Non-interest expenses 1,600 1,700

Income tax and social contribution rate 25% 35%

Goodwill amortization net of taxes 80

2

3

1

R$ Million

Investor Relations

ri@bancobmg.com.br

www.bancobmg.com.br

/IR