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Banco Santander (Brasil) S.A. – ‘6-K/A’ for 3/31/24

On:  Tuesday, 3/26/24, at 5:24pm ET   ·   For:  3/31/24   ·   Accession #:  1292814-24-997   ·   File #:  1-34476

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  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 3/26/24  Banco Santander (Brasil) S.A.     6-K/A       3/31/24    1:2.7M                                   MZ Technologies/FA

Document/Exhibit                   Description                      Pages   Size 

 1: 6-K/A       Amendment to Current, Quarterly or Annual Report    HTML   2.55M 
                by a Foreign Issuer                                              

 

SUMMARY

 

1. Message from the Board of Directors

Dear Shareholder,

It is with great pleasure that I invite you, a shareholder of Santander Brasil, to participate in our Ordinary and Extraordinary General Meetings (“OEGM”), to be held on April 26, 2024, at 3:00 P.M.

Besides this Management Proposal (“Proposal”) a Manual for Participation in the OEGM (“Manual”) was prepared to assist you in understanding the matters presented, providing a conscious and reasoned decision-making process, anticipating possible clarifications and voting guidelines.

Pursuant to the Call Notice made available, we shall take resolutions on the following matters:

At the Ordinary General Meeting:

(i) To TAKE the management accounts, to examine, discuss and vote on the Company’s Financial Statements related to the fiscal year ended on December 31, 2023, accompanied by the Management Report, the balance sheet, other parts of the financial statements, external auditors’ opinion and the Audit Committee Report;

(ii) To DECIDE on the allocation of net income for the year 2023 and the distribution of dividends; and

(iii) To FIX the annual global compensation of the Company´s management and members of Audit Committee.

At the Extraordinary General Meeting:

(i)         To ELECT a new member to compose the Company’s Board of Directors;

(ii)        To CONFIRM the composition of the Company’s Board of Directors;

(iii)      To INCREASE the Company’s share capital, in the amount of R$ 10,000,000,000.00 (ten billion Brazilian Reais), without the issuance of new shares, through the capitalization of part of the balance of the Company’s statutory profit reserve;

(iv)      To AMEND the caput of article 5 of the Company’s Bylaws to reflect the increase in its share capital, if approved;

(v)        To CONSOLIDATE the Company’s Bylaws; and

 

(vi) To AMEND the wording of article 7.2 of the Company’s Long Term Incentive General Plan, approved at the Extraordinary General Meeting held on December 21, 2016.

As established by the Brazilian Securities and Exchange Commission (CVM), in order to facilitate its analysis and evaluation of the matters to be resolved on our OEGM, this Proposal includes exhibits containing the information made available in addition to the Call Notice.

We are at your disposal to clarify any questions through the emails acionistas@santander.com.br oriented at non-financial individual and corporate investors and ri@santander.com.br for institutional investors.

We hope that this Proposal and the Manual fulfills its purpose in assisting your decision making. Your participation is essential for the Company.

Sincerely,

Deborah Stern Vieitas

Chairwoman of the Board of Directors

 

2. Call Notice of Meeting

[to be published in the newspaper “Valor Econômico” in editions of March 21, 22 and 23, 2024]

BANCO SANTANDER (BRASIL) S.A.

Publicly-Held Company of Authorized Capital

CNPJ/MF 90.400.888/0001-42 - NIRE 35.300.332.067

NOTICE OF MEETING – ORDINARY AND EXTRAORDINARY GENERAL MEETINGS - Shareholders are hereby invited to attend the Ordinary and Extraordinary General Meetings (“OEGM”) to be held on April 26, 2024, at 3:00 PM, at the principal place of business of the Company, located at Avenida Presidente Juscelino Kubitschek No. 2041 – 2nd mezzanine, Vila Nova Conceição, São Paulo/SP, to resolve upon the following Agenda:

At the Ordinary General Meeting:

(i) To TAKE the management accounts, to examine, discuss and vote on the Company’s Financial Statements related to the fiscal year ended on December 31, 2023, accompanied by the Management Report, the balance sheet, other parts of the financial statements, external auditors’ opinion and the Audit Committee Report;

(ii) To DECIDE on the allocation of net income for the year 2023 and the distribution of dividends; and

(iii) To FIX the annual global compensation of the Company´s management and members of Audit Committee.

At the Extraordinary General Meeting:

(i) To ELECT a new member to compose the Company’s Board of Directors;

(ii)  To CONFIRM the composition of the Company’s Board of Directors;

(iii)To INCREASE the Company’s share capital, in the amount of R$ 10,000,000,000.00 (ten billion Brazilian Reais), without the issuance of new shares, through the capitalization of part of the balance of the Company’s statutory profit reserve;

(iv) To AMEND the caput of article 5 of the Company’s Bylaws to reflect the increase in its share capital, if approved;

(v)  To CONSOLIDATE the Company’s Bylaws; and

 

(vi) To AMEND the wording of article 7.2 of the Company’s Long Term Incentive General Plan, approved at the Extraordinary General Meeting held on December 21, 2016.

Observation for participation and Vote during the Meeting

Participation in the Meeting: Shareholders, their legal representatives or attorneys-in-fact may participate in the Meeting in any of the following ways:

In person - The shareholders or their legal representatives shall appear at the OEGM with the appropriate identity documents. In the event of representation of a shareholder by an attorney-in-fact, shareholders shall leave at the Company's principal place of business (address mentioned bellow), at least seventy-two (72) hours before the OEGM is held, a power of attorney granted according to the applicable law;

Remote Voting Ballot: the Company implemented the remote voting system pursuant to CVM Resolution 81/22, enabling our Shareholders to send remote voting ballots directly to the Company, to the bookkeeper or through their respective custodian agents, in accordance with the procedures described in the General Meeting Participation Manual.

Our recommendation to the shareholders is to make use of remote voting instruments, either by the electronic means available or by sending written votes to the Company, or granting standardized powers of attorney with voting guidance, according to the instructions provided in the Management Proposal for the OEGM to be held in April 26, 2024.

General Instructions

1. As provided in CVM Resolution No. 70/22, the minimum percentage of participation in the voting capital required for the application of the multiple voting process for the election of the members of the Board of Directors is 5% (five percent);

2. As provided in § 2 of article 161 of Law No. 6,404/76 and art. 4 of CVM Resolution No. 70/22, the installation of the Fiscal Council by the General Meeting shall occur at the request of shareholders representing at least 2% (two percent) of the shares with voting rights, or 1% (one per cent) of non-voting shares; and

3. The documents related to the matters to be examined and resolved at the OEGM are available to shareholders (i) at the Company's principal place of business, at Avenida Presidente Juscelino Kubitschek, nº 2041 Wtorre JK, 9th floor - Corporate Legal Department, where they can be consulted, on working days, from 10:00 a.m. until 4:00 p.m., and on its website (www.ri.santander.com.br – at Corporate Governance >> Minutes of the Meeting); (ii) on the website of the Brazilian Securities and Exchange Commission (www.cvm.gov.br) and (iii) on the website of B3 S.A. - Brasil, Bolsa, Balcão (http://www.b3.com.br).

São Paulo, March 20, 2024 – Deborah Stern Vieitas – Chairwoman of the Board of Directors.

___________________________________________________

 

3. Participation of shareholders in the OEGM

Santander Brasil shareholders may participate in the OEGM in person, by a duly appointed proxy, as specified in item 3.2 below, or by Remote Voting.

Shareholders will be required to provide the following documents to participate in the OEGM:

3.1. In-person Participation

Santander Brasil shareholders may participate in the OEGM by attending the place where it will be held and declaring their vote, according to the types of shares they own (common and/or preferred), and the matters to be voted on.

Corporate shareholders, such as companies and investment funds, shall be represented in accordance with their Articles of Association, Articles of Organization or Bylaws, delivering documents proving the regularity of the representation, accompanied by the Minutes of the election of the Managers, if applicable, at the place and term indicated in the item below. Prior to the OEGM, the shareholders shall sign the Attendance Book. Shareholders without voting rights may attend the OEGM and discuss all matters submitted for resolution.

^[1] The following documents may be presented: (i) General Registration Identity Card (RG); (ii) Foreigner Registration Identity Card (RNE); (iii) Valid passport; (iv) Class Organization Card valid as a civil identity for legal purposes (e.g.: OAB, CRM, CRC, CREA); or (v) National Driver's License (CNH) with photo.

^[2] Articles of Incorporation/Organization and Minutes/Instruments of election of legal representatives registered with the competent body.

 

3.2. Participation by Proxy

The shareholder may be represented at the OEGM by an attorney-in-fact, duly appointed under a public or private instrument, and pursuant to article 126, § 1 of the Corporations Act, the attorneys-in-fact shall have been appointed less than one (1) year ago, and they shall be (i) shareholders of the Company, (ii) managers of the Company, (iii) lawyers, or (iv) financial institutions, with the investment fund’s manager being responsible for representing the quota holders.

The originals or copies of the documents mentioned above may be delivered at the Company's principal place of business by the time the OEGM is held.

However, in order to facilitate shareholders' access to the OEGM, we recommend that the delivery of such documents be made at least seventy-two (72) hours before the OEGM is held.

In the case of submittal of documents via email, we request that the shareholder contact the Company, so that the originals or copies can be delivered by the day the OEGM is held.

In case the Shareholder is unable to attend the OEGM or cannot yet be represented by an attorney-in-fact of his/her/their choice, the Company will make available an attorney-in-fact to vote for the shareholder, in accordance with his/her/their voting instructions, according to the power of attorney template in Exhibit I to this Proposal.

Furthermore, it should be noted that in addition to the power of attorney, the shareholder shall forward the documents required by the Company to participate in the OEGM, as provided for in item 3 above.

The documents shall be delivered at the Company’s principal place of business, at Avenida Presidente Juscelino Kubitschek, No. 2041 – Bloco A – Vila Nova Conceição - São Paulo – SP, 26th floor – Company’s Investor Relations, email: ri@santander.com.br.

3.3. Remote Voting Participation

Pursuant to articles 26 et seq. of CVM Ruling No. 81/22, the Company's shareholders may also vote at shareholders’ meetings by means of remote voting, to be formalized through the “remote voting ballot” (“Ballot”), the template of which is available in the Corporate Governance area of the Company’s Investor Relations website (www.ri.santander.com.br), or on the website of the Brazilian Securities and Exchange Commission – CVM (http://sistemas.cvm.gov.br/?CiaDoc).

The shareholder that chooses to exercise his/her/their voting rights remotely shall do so by one of the options described below:

(I)       Submittal of the Ballot to Custody agents

The Shareholder that chooses to cast remote voting through his/her/its respective custodian agent (“Custodian") shall convey his/her/their voting instructions in accordance to the rules determined by the Custodian, which shall forward said voting ballots to the Central Depository of B3 S.A. - Brasil, Bolsa, Balcão. Shareholders shall contact his/her/their respective Custodians to check the procedures established by them for issuance of ballot voting instructions, as well as the documents and information required to do so.

 

The Shareholder shall convey the instructions for completion of the Ballot to his/her/their Custody agents by 04/19/2024 (including), unless defined otherwise by them.

(II)       Submittal of the Ballot by the Shareholder to the Bookkeeper

The Shareholder who chooses to cast the remote vote through the Company's Bookkeeper shall observe the following instructions, so that the Ballot can be deemed valid and the votes are counted:

(i) all fields shall be duly completed;

(ii) all pages shall be initialed;

(iii) the last page shall be signed by the Shareholder or his/her/their legal representative(s), as applicable, and in accordance with the applicable legislation.

The following documents shall be forwarded to the Bookkeeper:

(i) original copy of the Ballot, duly completed, initialed and signed; and

(ii) copy of the following documents:

• Individual (Shareholder or legal representative): Identity document with photo (RG and CPF; CNH or Professional Card duly attested by the competent authorities, containing CPF number).

• Legal entity: (i) Articles of Organization or Bylaws duly updated, with the documents proving the powers of representation (minutes of election); (ii) Identity document with photo of the representatives (RG and CPF; CNH or Professional Card duly attested by the competent authorities, containing CPF number).

• Investment fund: (i) Latest consolidated Regulations for the fund, as well as the Bylaws or Articles of Organization of its manager, in addition to the corporate documentation that grants proxy powers (minutes of officers’ election and/or power of attorney); (ii) Identity Card with a photograph of the representatives (RG and CPF; CNH (driver’s license) or official Professional Card containing the CPF enrollment number).

The documents shall be sent to the Bookkeeper within 7 days before the date of the OEGM, in other words, by 04/19/2024 (including) (i) at the following address: Banco Santander (Brasil) S.A. – Shareholders – Bookkeeping of Shares – Rua Amador Bueno, 474 – 2nd floor – Setor vermelho - Santo Amaro – São Paulo/SP – CEP 04752- 005; or (ii) via email, to the electronic address custodiaacionistavotodistancia@santander.com.br.

After receiving the documents, the Bookkeeper, within three (3) days, will inform the Shareholder regarding the receipt of the documents and their acceptance. If the submitted documentation is not considered suitable, the Ballot shall be considered invalid, and the Shareholder may regularize it by 04/19/2024.

Ballots received by the Bookkeeper after 04/19/2024 shall be disregarded.

 

(III)       Submittal of the Ballot directly to the Company

The Shareholder who chooses to cast the remote vote through the Company shall observe the following instructions, so that the Ballot can be deemed valid and the votes are counted:

(i) all fields shall be duly completed;

(ii) all pages shall be initialed;

(iii) the last page shall be signed by the Shareholder or his/her/its legal representative(s), as applicable, and in accordance with the applicable legislation.

The following documents shall be forwarded to the Company:

(i) original copy of the Ballot, duly completed, initialed and signed; and

(ii) copy of the following documents:

• Individual (Shareholder or legal representative): Identity document with photo (RG and CPF; CNH or Professional Card duly attested by the competent authorities, containing CPF number).

• Legal entity: (i) Articles of Organization or Bylaws duly updated, with the documents proving the powers of representation (minutes of election); (ii) Identity document with photo of the representatives (RG and CPF; CNH or Professional Card duly attested by the competent authorities, containing CPF number).

• Investment fund: (i) Last consolidated bylaws of the fund and of the Articles of Association or Organization of its manager, in addition to the corporate documentation granting powers of representation (minutes of election of the officers and/or power of attorney) (ii) Identity document with photo of the representatives (RG and CPF; CNH or Professional Card duly attested by the competent authorities, containing CPF number).

The documents shall be sent to the Company within 7 days before the date of the OEGM, in other words, by 04/19/2024 (including) (i) at the following address: Banco Santander (Brasil) S.A. - Investor Relations - Avenida Presidente Juscelino Kubitschek, 2041 – Bloco A - 26th floor – Vila Nova Conceição - São Paulo/SP - CEP 04543-011; or (ii) via email, to the electronic address ri@santander.com.br.

After receiving the documents, the Company, within three (3) days, will inform the Shareholder regarding the receipt of the documents and their acceptance. If the submitted documentation is not considered suitable, the Ballot shall be considered invalid, and the Shareholder may regularize it by 04/19/2024.

Ballots received by the Company after 04/19/2024 shall be disregarded.

General Information:

Ø    in accordance with Article 44 of CVM Resolution nº 81, the Central Depository of B3 S.A. - Brasil, Bolsa, Balcão, upon receiving the voting instructions from the shareholders through their respective custody agents shall disregard any diverging instructions in relation to the same resolution that has been issued by the same CPF or CNPJ registration number; and

 

Ø    upon termination of the deadline for remote voting, in other words, by 04/19/2024 (including), the shareholder will not be able to change the voting instructions already sent, except if attending the Shareholders' Meeting or represented by power of attorney, upon express request for disregard of the voting instructions sent through the Ballot, before the respective matter(s) is subject to voting.

3.4. ADS holders

Holders of American Depositary Shares (ADSs) shall be given the right to vote on the matters listed on the Agenda, subject to the same criteria applied in relation to national investors, according to the type of shares (common or preferred) on which their ADSs are backed. ADS holders will be duly instructed by The Bank of New York Mellon, depository institution for ADSs backed by Santander Brasil shares.

 

4. Matters to be resolved at the OEGM

Below you shall find clarifications made by the Company’s management regarding each of the items to be resolved in the OEGM. According to the Call Notice made available to the shareholders, our OEGM shall take resolutions regarding the following matters of the Agenda:

4.1 At the Ordinary General Meeting

4.1.1 To TAKE the management accounts, to examine, discuss and vote on the Company’s Financial Statements related to the fiscal year ended on December 31, 2023, accompanied by the Management Report, the balance sheet, other parts of the financial statements, external auditors’ opinion and the Audit Committee Report.

The documents presented by the management are:

i. Management Report showing the operating statistics and the analysis and discussion of the Administrative Officers of the principal accounts of the Statement of Income for the Fiscal Year;

ii. Comments of the administrative officers on the financial condition of the Company (Exhibit II - Item 2 of the Reference Form);

iii. Copy of the Financial Statements and Explanatory Notes;

iv. Opinion of the Independent Auditors;

v. Summary of the report of the Audit Committee; and

vi. Standardized financial statements form – DFP – (“demonstrações financeiras padronizadas”).

The management documents identified above, except for item ii above, were made available to the CVM, via the IPE system, at the time of disclosure of the individual and consolidated financial statements of the Company prepared in accordance with Accounting Practices Adopted in Brazil applicable to institutions authorized to operate by the Brazilian Central Bank, on January 31, 2024, and for the consolidated financial statements of the Company in accordance with the IFRS as issued by the IASB made available on February 20th, 2024. These documents can be found on the electronic address of CVM (www.cvm.gov.br), or of the Company (www.ri.santander.com.brand www.santander.com.br/acionistas), according to information shown in Exhibit II to this Management Proposal.

The Company's management proposes that the shareholders examine in detail the management accounts and the Company's Financial Statements so that they can deliberate about their approval.

 

4.1.2. To DECIDE on the allocation of net income for the year ended on December 31, 2023 and the distribution of dividends

(a) Net Profit Allocation

The Management presents a proposal for the fiscal year 2023 net profit allocation in compliance with the provisions of Article 10, first paragraph, item II and the respective Annex A to CVM Resolution 81/22. Said proposal is contained in the Exhibit III to this Management Proposal.

The net profit of the Company in the fiscal year 2023 was R$ 8,864,227,550.25.

Management proposes the following allocation for net income for the year 2023:

1. The amount of R$ 443,211,377.51, to the Company’s legal reserve account;

2. The amount of R$ 6,200,000,000.00, as dividends and Interest on Equity to shareholders, which have been the object of decision in the meetings of the Board of Directors held on January 19, 2023; April 13, 2023; July 13, 2023; and October 10, 2023, of which R$ 5,820,000,000.00 as Interest on Equity allocated within the mandatory minimum dividends and R$ 380,000,000.00 as interim dividends; and

3. The balance of the remaining net profit after the distributions above, to the value of R$ 2,221,016,172.74, for the Dividend Equalization Reserve account, pursuant to Article 36, item III-a of the Company's Bylaws.

The Management understands that the proposal for allocation of net profits above was formulated in accordance with the legal and statutory obligations applicable to the Company, and is in line with the goals and strategies of the Company, which is why the board recommends its approval without restrictions.

(b) Distribution of Dividends

As better detailed in the Exhibit III to this Management Proposal, the Company management has approved the distribution to its shareholders the global amount of R$ 6,200,000,000.00, as dividends and Interest on Equity to the shareholders, which have been the object of decision in the meetings of the Board of Directors held on January 19, 2023; April 13, 2023; July 13, 2023; and October 10^th, 2023, of which R$ 5,820,000,000.00 as Interest on Equity allocated within the mandatory minimum dividends and R$ 380,000,000.00 as interim dividends and were paid to shareholders based on their respective shares in the share capital of the Company.

 

4.1.3. To FIX the annual global compensation of the Company´s management and members of Audit Committee

The management presents a proposal for remuneration of the Company’s management, complying with the provisions of Article 13, items I and II of CVM Resolution 81/22 and item 8 of the Reference Form of the Company, on the terms of Exhibit IV to this Management Proposal

For the period from January to December, 2024, the amount proposed by the management as the annual global compensation for the Company’s management (Board of Directors and Executive Board) is of up to R$ 500,000,000.00 (five hundred million Brazilian Reais), covering fixed remuneration, variable remuneration and the stock base remuneration.

The amount proposed by the Board of Directors as annual global compensation of the members of the Audit Committee for the twelve (12) months period counting from January 1st, 2024 is of up to R$ 4,000,000.00 (four million Brazilian Reais).

4.2 At the Extraordinary General Meeting

4.2.1. To ELECT a new member to compose the Company’s Board of Directors

After complying with the applicable governance approvals, with favorable opinion from the Nominating and Governance Committee, the Company proposes to the OEGM the election for a complementary term of office that will be enforce until the investiture of the members elected in the Ordinary General Meeting to be held in 2025, of the following candidate recommended by the controlling shareholders to compose the Board of Directors of the Company:

The information related to the election of the new member of the Board of Directors of the Company, pursuant to article 11, item I of CVM Resolution 81/22, can be found in the Exhibit V to this Management Proposal.

4.2.2. To CONFIRM the composition of the Company’s Board of Directors

Once the item above has been approved and, in view of the changes in the composition of the Company’s Board of Directors since the election held on the Extraordinary General Meeting held on June 30, 2023, the Management proposes the confirmation of the members with a term of office that will be enforce until the investiture of the members elected in the Ordinary General Meeting to be held in 2025, which is:

 

4.2.3 To INCREASE the Company’s share capital, in the amount of R$ 10,000,000,000.00 (ten billion Brazilian Reais), without the issuance of new shares, through the capitalization of part of the balance of the Company’s statutory profit reserve.

In view of the excess balance of the statutory profit reserve for the Company's Dividend Equalization verified in the balance sheet at the end of the fiscal year of December 31, 2023, the Company's management proposes, in accordance with art. 36, III, (a) of the Company's Bylaws and art. 199 of Law No. 6,404/76, the increase in share capital, in the amount of R$ 10,000,000,000.00 (ten billion Brazilian reais) through the capitalization of part of the balance of the aforementioned profit reserve, without the issuance of new shares of the Company.

In compliance with article 15 of CVM Resolution 81, Exhibit VI of this Proposal contains detailed information about the proposed capital increase.

4.2.4 To AMEND the caput of article 5 of the Company’s Bylaws to reflect the increase in its capital stock, if approved.

The Company's management proposes that an amendment be approved to the caput of article 5 of the Company's Bylaws, in order to reflect the Capital Increase, if approved.

 

In compliance with article 12 of CVM Resolution 81, Exhibit VII of this Proposal contains a comparative chart, including the current wording, proposed wording and justification for the change to the Company's Bylaws.

4.2.5 To CONSOLIDATE the Company’s Bylaws.

In view of the change proposed in the previous item of the Agenda, the Company's management proposes that, if the change is approved, the consolidation of the Company's Bylaws contemplating said changes, in the form of Exhibit VIII, shall also be approved.

4.2.6 To AMEND the wording of article 7.2 of the Company’s Long Term Incentive General Plan, approved at the Extraordinary General Meeting held on December 21, 2016.

Finally, management proposes to adjust the wording of clause 7.2 of the Company's Long-Term Incentive General Plan in order to adjust the average period of the daily quotation for calculating the conversion for bonus payment purposes, from 15 (fifteen) to 50 (fifty) last trading sessions.

To facilitate viewing and understanding of the proposed adjustment, management presents a comparative chart, including the current wording and proposed wording of the Company's Long-Term Incentive General Plan, under the terms of Exhibit IX, as well as its complete final consolidated wording, under the terms of Exhibit X.

 

EXHIBIT I:
TEMPLATE OF POWER OF ATTORNEY

[SHAREHOLDER], [QUALIFICATION] (“Grantor”), appoints as his/her/its attorneys-in-fact Messrs. CAROLINA SILVIA ALVES NOGUEIRA TRINDADE, Brazilian, married, registered with OAB/RJ under no. 182.414 and under the CPF/ME under no. 124.143.167.13; and RAFAEL TRIDICO FARIA, Brazilian, married, registered with OAB/SP 358.447 and under the CPF/ME under no. 409.544.508-41, both of them lawyers, with commercial address in the Capital City of the State of São Paulo, at Avenida Presidente Juscelino Kubitschek Nos. 2041 - Bloco A - Vila Nova Conceição (“Grantees”) to represent, collectively or individually, regardless of the order of appointment, the Grantor, as shareholder of Banco Santander (Brasil) S.A. ("Company"), at the Company's Ordinary and Extraordinary General Meetings to be held, on first call, on April 26, 2024, at 3:00 PM, at the Company's principal place of business, at Avenida Presidente Juscelino Kubitschek No. 2041 - 2nd mezzanine, Vila Nova Conceição, São Paulo/SP, and if necessary on second call, on a date to be informed in due course, to whom powers are granted to attend the meeting and vote, on behalf of the Grantor, in accordance with the voting guidelines set forth below for each of the items on the Agenda:

At Ordinary General Meeting

(i)         To TAKE the management accounts, to examine, discuss and vote on the Company’s Financial Statements related to the fiscal year ended on December 31, 2023, accompanied by the Management Report, the balance sheet, other parts of the financial statements, external auditors’ opinion and the Audit Committee Report.

( ) For ( ) Against ( ) Abstention

(ii)        To DECIDE on the allocation of net income for the year 2023 and the distribution of dividends.

( ) For ( ) Against ( ) Abstention

(iii)      To FIX the annual global compensation of the Company´s management and members of Audit Committee.

( ) For ( ) Against ( ) Abstention

At Extraordinary General Meeting

(i)         To ELECT a new member to compose the Company’s Board of Directors.

( ) For ( ) Against ( ) Abstention

(ii)        To CONFIRM the composition of the Company’s Board of Directors.

( ) For ( ) Against ( ) Abstention

 

(iii)      To INCREASE the Company’s share capital, in the amount of R$ 10,000,000,000.00 (ten billion Reais), without the issuance of new shares, through the capitalization of part of the balance of the Company’s statutory profit reserve.

( ) For ( ) Against ( ) Abstention

(iv)      To AMEND the caput of article 5 of the Company’s Bylaws to reflect the increase in its share capital, if approved.

( ) For ( ) Against ( ) Abstention

(v)        To CONSOLIDATE the Company’s Bylaws.

( ) For ( ) Against ( ) Abstention

(vi)      To AMEND the wording of article 7.2 of the Company’s Long Term Incentive General Plan, approved at the Extraordinary General Meeting held on December 21, 2016.

( ) For ( ) Against ( ) Abstention

The Grantees are hereby authorized to abstain from any resolution or act for which they have not received, at their discretion, sufficiently specific voting guidelines. The Grantor shall hold the Grantees above harmless and free from any and all claims, disputes, demands, losses, or damages, of any nature, arising from the fulfillment of this instrument, except in cases of acts performed in an abusive and excessive manner, pursuant to the legislation in effect.

This power of attorney shall only be valid for the Company's Ordinary and Extraordinary General Meeting mentioned above. 

[Local], [month] [day], 2024.

_____________________________________________

[Signature of Grantor]

 

EXHIBIT II:

COMMENTS OF THE MANAGEMENT TO THE FINANCIAL CONDITION OF THE COMPANY

(Pursuant to Item III of the article 10 of CVM Resolution 81/22)

2.1. Officers should comment on:

(i)                 Economic situation

Ø  Development of complementary proposals to support the new fiscal framework recently approved.

The Brazilian currency exchange rate against the U.S. dollar fluctuated between R$ 4.83/US$ and R$ 5.19/US$ in the fourth quarter and ended the period at R$ 4.84/US$, lower than the R$ 5.01/US$ recorded at the end of the third quarter. In Banco Santander’s view, the appreciation of the Real resulted from the approval of the complementary procedures of the new fiscal framework, reducing uncertainty regarding the public debt track record in the short term, associated to the consolidation of the perception that the maintenance of the monetary global conditions in a restrictive field may be shorter than previously imagined. Despite those repercussions, we continue to believe that there are risks in the domestic fiscal sphere and assess that the process of reducing international rates will happen later than expected in the markets. Thus, we project that the exchange rate will reach R$ 5.25/US$ by the end of 2024.

Ø  The more tenuous slowdown in the economic growth in the 4Q23 was due to the resilience of the labor market.

The average of the projections of the economic agents regarding the performance of the Brazilian economy indicated Brazilian GDP growth of 2.9% in 2023 – virtually the same pace of expansion observed in the previous year (3.0%), with the expectation of maintaining the positive GDP variation due to the maintenance of the fiscal incentives implemented throughout 2022, partially extended to the beginning of 2023. The more promising start to the year and the continued favorable conditions in the labor market led Banco Santander to review the projection of expansion of the Brazilian GDP from 2.5% to 2.8% in 2023, despite the perception that the economy is slowing down regarding the tightening effects arising from the increase in the interest rates that began in 2021 and ended in August 2022.

Ø  Marginal increase in inflationary dynamics, especially in services, reinforcing the continuity of the cycle of interest rates cuts throughout 2024.

The annual variation of IPCA decreased to 4.6%, compared to the level of 5.2% recorded at the end of September of 2023, due to an improvement in the dynamics of readjustment of the prices of industrial and food products, as well as the inflation of services. Although the result was higher than the inflation target determined by the monetary regime, from the first time since 2020, the variation returned to be within the tolerance range, allowing the Central Bank of Brazil to maintain the process of monetary distension, having reduced the basic interest rate by 1.0 percentage points at the COPOM reunions in the fourth quarter, bringing Selic to 11.75% per year. As Banco Santander assesses that this inflationary dynamic will remains favorable, the bank projects that the Selic rate will reach 9.50% per year throughout 2024.

 

2023

For the year ended by December 31, 2023, we reported a consolidated net income of R$ 9.5 billion, a reduction of 33.8% compared to 2022. Total assets for the year ended December 31, 2023, reached R$ 1,115,653 million, an increase of 13.2% compared to 2023. Shareholders’ equity reached R$ 114,453 million and adjusted ROAE (excluding the effect of goodwill) was 11.3% in 2023.

Our Basel capital adequacy ratio, in accordance with Central Bank regulations, was 14.5% as of December 31, 2023.

As of December 31, 2023, our portfolio of loans and advances to gross customers grew by 5.1%, reaching R$ 551,536 million, compared to R$ 524,655 million as of December 31, 2022.

The following table presents a managerial breakdown of our portfolio of loans and advances to customers (gross) by customer category on the dates indicated.

(1)        Companies with annual gross revenues in excess of R$200 million, including our global corporate clients.

2022

For the year ended December 31, 2022, we reported consolidated net income of R$14.4 billion, a decrease of 7.8% compared to 2021. Total assets for the year ended December 31, 2022 reached R$985,451 million, an increase of 5.8% over 2021. Shareholders' equity reached R$110,183 million and adjusted ROAE (excluding the effect of goodwill) was 14.2% in 2022.

Our Basel capital adequacy ratio, in accordance with Central Bank regulations, was 13.9% as of December 31, 2022.

 

As of December 31, 2022, our portfolio of loans and advances to gross customers grew by 6.3% to R$524,655 million, compared to R$493,355 million as of December 31, 2021.

The following table presents a managerial breakdown of our portfolio of loans and advances to customers (gross) by customer category on the dates indicated.

Our total funding as of December 31, 2022, was R$741,611 million, an increase of 6.5% compared to R$696,104 million at December 31, 2021.

2021

For the year ended December 31, 2021, we reported consolidated net income of R$15.6 billion, an increase of 15.7% compared to 2020. Total assets for the year ended December 31, 2021 reached R$931,208 million, a decrease of 0.3% compared to 2020. Shareholders' equity reached R$105,974 million and adjusted ROAE (excluding the effect of goodwill) was 20.2% in 2021.

Our Basel capital adequacy ratio, in accordance with Central Bank regulations, was 14.9% as of December 31, 2021.

As of December 31, 2021, our portfolio of loans and advances to gross customers grew by 18.1% to R$493,355 million, compared to R$417,822 million as of December 31, 2020.

The following table presents a managerial breakdown of our portfolio of loans and advances to customers (gross) by customer category on the dates indicated.

Our total funding as of December 31, 2021 was R$696,104 million, an increase of 7.5% compared to R$647,465 million at December 31, 2020.

 

       b. capital structure:

(1)        Includes Non-Controlling Participation

(2)        Current liabilities

(3)        Total liabilities, except Shareholders' Equity and Current Liabilities

Debt ratio, according to the formula: third-party capital / total assets x 100, is 89.

In addition, the following table shows the direct shareholding (common and preferred shares) as of December 31, 2023:

As of December 31, 2023, the Company's share capital was R$ 55,000,000,000.00, fully paid up and divided into 7,498,531,051 shares, all nominative, book-entry and without par value.

In accordance with our current bylaws, our share capital may be increased to the limit of the authorized capital, regardless of statutory changes, by resolution of our Board of Directors and through the issuance of up to 9,090,909,090 new shares, being established that the total number of preferred shares may not exceed 50.0% of the total number of shares in circulation. Any capital increase exceeding this limit requires shareholder approval.

 

Income from equity instruments for the year ended December 31, 2023 totaled R$22 million, a decrease of R$16 million compared to R$38 million for the year ended December 31, 2022, mainly due to lower dividend gains from an investment fund, Santander Fundo de Investimento Amazonas Multimercado Amazon.

Income from equity instruments for the year ended December 31, 2022 totaled R$38 million, a reduction of R$52 million over the R$90 million year ended December 31, 2021, mainly due to higher dividend gains received from an investment fund, Santander Fundo de Investimento Amazonas Multimercado Crédito Privado de Investimento no Exterior, in 2021 compared to 2022.

Our capital management is based on conservative principles with continuous monitoring of items that affect our level of solvency. We are obliged to comply with Brazilian capital adequacy regulations in accordance with the rules of the Central Bank of Brazil. In October 2013, the new capital implementation regulations and regulatory capital requirements of the Basel Committee on Banking Supervision (Basel III) came into force in Brazil. The minimum regulatory capital requirement is currently 11%. The Tier I requirement is 6.0%, divided into basic capital of at least 4.5%, consisting primarily of share capital and profit reserves, including shares, units of ownership, reserves and income earned, and additional capital consisting primarily of certain reserves, earned income, and securities and hybrid instruments as capital authorized by the Central Bank of Brazil.

According to the new rules on regulatory capital in Brazil, the value of the goodwill for the calculation of the capital base was deducted in accordance with the "phase-in" for implementation of Basel III in Brazil, which was completed on January 1, 2019, this being a 100% from then on.

For the base year 2023, the Reference Equity requirement was 11.5%, including 8.00% Minimum Reference Equity, plus 2.5% Additional Capital Conservation and 1.00% Systemic Additional. The Level I Reference Equity reaches 9.5% and the Minimum Principal Capital 8.00%.

For the base year 2022, the Reference Equity requirement was 10.625%, including 8.00% Minimum Reference Equity, plus 1.625% Additional Capital Conservation and 1.00% Systemic Additional. The Level I Reference Equity reaches 8.625% and the Minimum Principal Capital 7.125%.

 

c. ability to pay in relation to financial commitments entered into

Our Executive Board understands that we present sufficiently adequate financial and patrimonial conditions for the payments of our commitments.

The management of our payment capacity is done dynamically through the implementation of limits and control models, approved and monitored by the Assets and Liabilities Committee (ALCO), which acts in accordance with the guidelines and procedures established by the Santander Group and the Central Bank. The control and management of the ability to pay are carried out through the analysis of cash flow positions, structural liquidity and simulations of potential losses of resources under stress scenarios. A funding plan is also elaborated that takes into account the best structuring of the sources of funding to achieve the necessary diversification in terms of maturities, instruments and markets in addition to the establishment of contingency plans. These controls, together with the maintenance of a minimum liquidity margin, guarantee sufficient resources to honor customer deposits and other obligations, grant loans and financing to clients, meet their own working capital needs for investment and address any risks related to liquidity crises.

We actively manage the risks intrinsic to commercial banking activity, such as the structural risks of interest rates, liquidity and exchange rates. Our goal of financial management is to make net interest income from business activities more stable and recurring while maintaining adequate levels of liquidity and solvency. Financial management also analyzes the structural interest rate risk derived from divergences between the maturity dates and revision of assets and liabilities in each of the currencies we operate.

The following tables show the intervals between pricing dates of financial assets and liabilities with different maturity dates, at December 31, 2023, 2022 and 2021, respectively (liquidity position):

 

 

The following table shows financial assets and liabilities by domestic and foreign currency as of December 31, 2023, 2022 and 2021 (currency position):

 

d. sources of financing for working capital and for investments in used non-current assets

The following table presents the composition of the fundraisers on the dates indicated:

 

Our balance of deposits from the Central Bank of Brazil and credit institutions was R$ 118.5 billion at December 31, 2023, R$ 116.1 billion at December 31, 2022, R$ 121.0 billion at December 31, 2021, representing 16.9%, 19.2% and 20.5% of total deposits, respectively.

 

Our deposit balance mainly includes national loans and Transfers Obligations:

Our balance of negotiable debt securities was R$ 124.4 billion as of December 31, 2023, R$107.1 billion as of December 31, 2022, R$79.0 billion as of December 31, 2021, representing 14.6%, 14.4% and 11.5% of our total financing, respectively.

The Agribusiness Letter of Credit, which are freely negotiable credit notes and represent an unconditional promise of payment in cash, are issued exclusively by financial institutions and related to credit rights originated from transactions carried out between rural producers and their cooperatives and agents of the agribusiness production chain and foreign exchange acceptances, reached R$ 36.4 billion on December 31, 2023, R$ 24.0 billion on December 31, 2022, and R$ 17.0 billion at December 31, 2021.

Financial Letters are an alternative financing available to banks that can be characterized as senior or eligible to compose the reference equity, under the terms of CMN Resolution No. 5,007, of March 24, 2022, its minimum term must be 24 months and must be issued for a minimum amount of R$ 300,000 for subordinated transactions and R$ 50,000 for senior transactions. Our treasury bills balance totaled R$ 22.7 billion as of December 31, 2023, a reduction of 32.6% compared to December 31, 2022.

Real Estate Letters of Credit increased by 31.6%, from R$ 43.8 billion on December 31, 2022 to R$ 57.6 billion on December 31, 2023.

We issue securities, including under our Global Medium-Term Billing Program. Our balance of securities and other securities was R$13.6 billion as of December 31, 2023 and R$14.5 billion as of December 31, 2022. This change was mainly due to the fact that in 2022 we issued a higher aggregate value of securities than those that matured that year.

 

On November 5, 2018, our board of directors approved the issuance, through our agency in the Cayman Islands, of debt instruments to form part of our benchmark Tier 1 and Tier 2 equity in the total amount of $2.5 billion, pursuant to an offer made to non-U.S. persons pursuant to Regulation S of the U.S. Securities Act of 1993, as amended, or the "Offer of Notes". Our Note Offering was structured as follows: (i) $1.25 billion indexed at 7.25% per annum without maturity (perpetual) and interest paid semi-annually; and (ii) US$ 1.25 billion indexed at 6.125% per year due in November 2028 and interest paid semi-annually. These issues were made through our Cayman Islands branch and, as a result, do not generate liability for income tax at source. In addition, our board of directors also approved the redemption of debt instruments issued to be part of our Tier 1 and Level 2 regulatory capital as set forth in the board's resolution of January 14, 2014. The proceeds of the Note Offering were used to finance this redemption. On December 18, 2018, the Central Bank of Brazil authorized the operations contemplated in the Offer of Notes and the redemption, which were concluded on January 29, 2019.

In November and December 2021, Santander Brasil issued Financial Bills with subordination clause, to be used to compose our Level 2 reference equity, in the total amount of R$ 5.5 billion. The Financial Letters have a term of ten years and redemption and repurchase options in accordance with the applicable regulations. Financial Bills had an estimated 92 basis point impact on our Tier 2 benchmark equity.

As of October and November of 2023, Santander Brasil exercised its option to repurchase the Tier 2 debt instruments issued in 2018 in the amount of $ 1.25 billion. In its place to compose out Tier 2 regulatory capital, Santander Brasil issued financial bills with subordination clause in the total amount of R$ 6.0 billion. These new financial bills have a term of 10 years and redemption and repurchase option in accordance with the applicable regulation. As of December 31, 2023, the balance of Tier 1 and Tier 2 debt instruments was R$ 19.6 billion compared to R$ 19.5 billion as of December 31, 2022.

As of December 31, 2023, we had no subordinated debts.

e. Sources of financing for working capital and for investments in non-current assets that you intend to use to cover liquidity deficiencies

Due to our stable and diversified sources of fundraising, which include a large deposit base of their clients as detailed in paragraph 10.1.d above, we have historically had no liquidity issues.

As part of our liquidity risk management, we have a formal plan with measures to be taken in scenarios of systemic liquidity crisis and/or arising from any risk to our corporate image. This liquidity contingency plan contains parameters of attention, as well as preventive measures and actions to be triggered in times of liquidity deficiency, if the reserves fall below certain parameters.

As sources of financing for working capital and for investments in non-current assets used to cover liquidity shortfalls, the following resources may be used: (i) deposit raising; (ii) securities issuances; (iii) transactions committed to public/private securities; (iv) transfer pricing review; (v) establishment of more restrictive credit policies; and (vi) release of guarantee margin at B3 S.A. – Brasil Bolsa, Balcão.

 

f. levels of indebtedness and the characteristics of such debts, further describing:

There are no loan agreements or other debt instruments that our management deems to be relevant to us, with the exception of the securities representing debt of our issuance described in Section 12 of the Reference Form.

Our main sources of funds are local deposits in the form of cash and term accounts, in line with other Brazilian banks, as well as borrowings in the open market, namely, bonds of own issue and bonds of the Federal Government with commitment to repurchase ("committed operations").

We also have deposits in credit institutions related to export and import financing lines raised from banks abroad and intended for application in foreign exchange commercial operations related to export and import financing. We are also part of long-term obligations via transfers, all in accordance with the operational policies of the BNDES system.

External issues of securities denominated in foreign currency include securities and other securities (Eurobonds and Structured Notes). The following table shows the detailed composition of Eurobonds:

We use subordinated debt instruments in its funding structure, represented by securities issued in accordance with the rules of the Central Bank, which are used as Reference Equity - Level 2, to calculate the operational limits, including Subordinated CDBs, certificates of deposit issued by us in the local market, in various issues, at interest rates updated by the CDI or the IPCA.

In case of our judicial or extrajudicial liquidation there is a preference order regarding the payment of the various creditors of the mass provided for by law, which must be respected under the Brazilian legislation in force at the time. Specifically, with regard to the financial debts that make up our indebtedness, the following payment order must be observed: debts guaranteed by collateral, unsecured debts and subordinated debts. It is worth mentioning that, in relation to debts with real guarantee, creditors prefer to others up to the limit of the asset given as collateral and, as far as it remains, will have their credits included in the payment order of the creditors. Among the creditors there is no degree of subordination, just as there is no degree of subordination between the various subordinated creditors.

 

(iv) any restrictions imposed on the Company, in particular, in relation to debt limits and contracting of new debts, the distribution of dividends, the disposal of assets, the issuance of new securities and the sale of corporate control, as well as whether the Company has been complying with these restrictions

Regarding securities issued abroad, whose descriptions of operations and programs are described in Item 12.7 of the Reference Form ("Securitization Program" and "Medium Term Notes – MTN"), the main restrictions imposed on the issuer, existing in financing agreements, are also described in the same item.

g.           limits on contracted financing and percentages already used

The information requested in this item is not applicable to financial institutions. We are subject, however, to the parameters determined by the monetary authorities, in line with the Basel principles.

h.           material changes in items in the income and cash flow statements

The following are the main changes in balance sheet accounts for the financial years 2023, 2022 and 2021.

 

Our total assets reached, as of December 31, 2023, R$ 1,115,653 million, an increase of 13.21% compared to 2022, whose total assets reached R$ 985,451 million, 5.83% higher than the R$931,208 million of total assets of December 31, 2021.

The portfolio of loans and advances to gross customers, without endorsements and guarantees, totaled R$ 551,536 at December 31, 2023, an increase of 5.1% compared to R$524,655 at December 31, 2022, a growth of 6.3% compared to R$493,355 million at December 31, 2021. The Large Companies presented an increase of 5.5% compared to 2022, being an increase of 5.1% in the Individual segment.

Consolidated shareholders' equity totaled R$ 114,453 million at December 31, 2023, R$110,183 million at December 31, 2022 and R$105,640 million at December 31, 2021, an increase of 3.9% at December 31, 2023 compared to 2022 and an increase of 4.3% at December 31, 2022 compared to 2021. The change in shareholders' equity in the year is mainly due to the growth in revenues, Net Income for the period in the amount of R$ 9,499 million and reduced by the payment of Dividends and Interest on Own Capital in the amount of R$ 6,200 million.

 

2.2. The directors must comment:

a. results of operations of the Company:

Results of Operations for the Years Ended December 31, 2023, 2022 and 2021

The following table provides an overview of the key core aspects of our results of operations for the years ended December 31, 2023, 2022 and 2021:

Results of Operations

The following table presents our consolidated operating results for the years ended December 31, 2023, 2022 and 2021:

 

Consolidated profit for the year

Our consolidated net income for the year ended December 31, 2023, was R$ 9,499 million, a decrease of R$ 4,481 million, or 33.8%, compared to our consolidated net income of R$14,339 million for the year ended December 31, 2022, primarily due to (i) an increase in legal provisions of R$ 3,209 million, or 264%, reaching R$ 4,424 million for the year ended on December 31, 2023, compared to R$ 1,215 million for the year ended December 31, 2022, driven by an increase in provision for labor charges in the period; and (ii) an increase in losses related to financial assets of R$ 3,179 million, or 12.8%, reaching R$ 28,008 million at December 31, 2023, compared to R$ 24,829 million at December 31, 2022, driven by the deterioration of our loan portfolio, which was impacted by an increase in provisions as a result of a specific case of a large client in our wholesale segment; and (iii) a reduction in net interest income of R$ 619 million, which was driven by lower credit income, attributable to a shift in our portfolio mix towards clients with a better risk profile and focus on collateralized products, as well as a decrease in our performance in market operations.

December 31, 2022 was R$14,339 million, a decrease of R$1,220 million, or 7.8%, compared to our consolidated net income of R$15,559 million for the year ended December 31, 2021, primarily due to an increase in losses due to a reduction in the recoverable amount of financial assets of R$7,716 million, or 45.1%, to R$ 24,829 million in the year ended December 31, 2022, from R$ 17,113 million in the fiscal year December 31, 2021, due to the deterioration of the loan portfolio that was impacted by a specific case of a large client in our wholesale segment that filed for judicial reorganization, and a reduction in net interest income from R$3,815 million, or 7.4%, to R$47,503 million in the year ended December 31, 2022 from R$51,318 million in December 31, 2021, primarily due to an increase in interest rates in force in Brazil as a result of the Central Bank of Brazil's increases in the SELIC rate to suppress inflation and a decrease in revenue and d fees received from customers as a result of more selective credit policies and services and an increase in the cost of our obligations as a result of higher interest rates.

 

Net interest income

Net interest income for the year ended December 31, 2023, was R$ 46,884 million, a decrease of 1.3% or R$ 619 million compared to R$47,503 million of the year ended December 31, 2022. Said reduction was mainly due to the decrease in credit revenues, impacted by lower interest rate spreads, attributable to a shift in our portfolio mix towards clients with a better risk profile and a focus on collateralized products. This was partially offset by volume growth, driven by loans to households, small and medium sized companies, and corporates. We also underperformed out market operations.

The average total of assets earned in 2023 was R$ 1,010.4 billion, an increase of 11.8% or R$ 107 million compared to R$ 903.4 billion of 2022. The main driven of said growth was the increase of R$ 35.7 billion, or 7.1%, on the average value of loans and advances of customers.

Net income (net interest income divided by average profitable assets) in 2023 was 4.9% and 5.3% in 2022, mainly due to a change towards our mix portfolio of products with lower risks, as explained above.

The average total of interest-bearing liabilities in 2023 was R$ 758.9 billion, an increase of 12.8% or R$ 85.9 billion compared to R$ 673.0 billion in 2022. The main driven of this growth was an R$ 52.2 billion increases in customer deposits as a result of higher volumes of term deposits, given a higher appeal of the investors in fixed income investments in an environment with a higher interest rate in 2023.

Finally, the yield spread (the difference between gross income from earned assets and the average cost of interest-bearing liabilities) was 2.5% in 2023, mainly due to a change in our mix portfolio towards clients with better rick profile.

Net interest income for the year ended December 31, 2022, was R$ 47,503 million, a decrease of 7.4% or R$ 3,815 million compared to R$ 51,318 million of the year ended December 31, 2021. Said reduction happened mainly due to the increase in interest rates, which increase the pressure over our margins, partially offset by the growth of gains/losses of assets and financial liabilities (net) and exchange rates differences (net).

Total average profitable assets in 2022 were R$ 903.4 billion, an increase of 7.13% or R$ 60.1 billion compared to R$ 843.3 billion in 2021. Mainly driven by an increase of R$ 42.4 billion, or 9.2% in average of loans and in advance to customers.

Net financial margin (financial margin divided by average profitable assets) in 2022 was 5.3% and 6.1% in 2021.

The average total of onerous liabilities in 2022 was R$ 673.0 billion, an increase of 3.9% or R$ 25.3 billion compared to R$ 647.7 billion in 2021. The main driver of this growth was the increase of R$ 18.6 billion in customer deposits due to a shift in consumption preferences towards interest earning assets.

 

Finally, the net yield spread (the difference between gross income on assets earned and the average cost of interest-bearing liabilities) was 3.0% in 2022, mainly due to the increase in interest rates in Brazil in 2022.

Income from equity instruments

Income from equity instruments for the year ended December 31, 2023, totaled R$ 22 million, a decrease of R$ 16 million compared to R$ 38 million in the year ended December 31, 2022, mainly due to higher dividend gains from an investment fund, Santander Fundo de Investimento Amazonas Multimercado Crédito.

Profit from equity instruments for the year ended December 31, 2022 totaled R$38 million, a decrease of R$52 million from R$90 million in the year ended December 31, 2021, mainly due to higher dividend gains from an investment fund, Santander Fundo de Investimento Amazonas Multimercado Credito Privado de Investimento no Exterior, in 2021 compared to 2022.

Equity Result

The result of companies accounted for by the equity method for the year ended December 31, 2023, was R$ 239 million, an increase of R$ 40 million compared to R$ 199 million for the year ended December 31, 2022.

The result of companies accounted for by the equity method for the year ended December 31, 2022 was R$ 199 million, an increase of R$ 55 million compared to R$ 144 million in the year ended December 31, 2021, mainly due to an increase of R$ 50.6 million in the result of operations of Mobills, acquired by us in 2021.

Net fee and commission revenues

Net fee and commission revenues for the year ended December 31, 2023, were R$ 15,640 million, an increase of 5.1% or R$ 764 million compared to R$ 14,876 million for the year ended December 31, 2022. This was primarily attributed to (i) asset management and pension fund businesses, which recorded higher revenues driven by out consortium products (“consortium”), (ii) card revenues, due to the increase in the number of transactions and customer spending and (iii) capital markets and trade finance, where we obtained higher revenues from intermediation and financial advisory services to companies.

Net revenue from fees and commissions for the year ended December 31, 2022 were R$14,876 million, a decrease of 2.6% or R$397 million compared to R$15,273 million for the year ended December 31, 2021. This was primarily attributed to (i) a decrease in credit and debit card issuances as a result of a more selective credit approval policy, (ii) Getnet's spin-off (in the first quarter of 2021), (iii) a decrease in current and accountable service fees (as a result of annual fee waiver campaigns and customers' increasing use of PIX as an alternative to traditional banking). This was partially offset by an increase in collection and payment services and in the management of assets and pension funds.

Net management fees and pension funds totaled R$ 1,990 million for the year ended December 31, 2023, an increase of 24.4% compared to the year ended December 31, 2022.

 

Net trade finance fees and commissions totaled R$ 1,926 million in the year ended December 31, 2023, an increase of 5.6% compared to the year ended December 31, 2022.

Net credit and debit card fees and commissions totaled R$ 3,554 million in the year ended December 31, 2023, an increase of 12.8% compared to the year ended December 31, 2022, mainly due to the increase in the number of transactions and customer spending.

Net capital market commissions totaled R$ 1,183 million in the year ended December 31, 2023, an increase of 6.4% compared to the year ended December 31, 2022. This increase was driven mainly by the growth in intermediation and financial advisory revenues provided to companies.

The following table reflects the composition of net fee and commission revenues for the years ended December 31, 2023, 2022 and 2021:

"Gains/losses on financial assets and liabilities (net) and exchange rate changes (net)"

Gains on financial assets and liabilities (net) and exchange differences (net) in the year ended December 31, 2023 totaled R$ 3,795 million, a decrease of R$ 904 million compared to gains of R$ 4,699 million in the year ended December 31, 2022. This variation is mainly due to (i) losses of R$ 938 million related to net hedge accounting gains or losses. For more information, please refer to notes 36 and 37 of our audited consolidated financial statements – included in this annual report.

Gains on financial assets and liabilities (net) and exchange differences (net) in the year ended December 31, 2022 totaled R$4,699 million, an increase of R$6,480 million compared to losses of R$1,781 million in the year ended December 31, 2021. This variation is primarily due to (i) gains of R$ 3,985 million related to net hedge accounting gains or losses and (ii) gains of R$ 426 million related to financial instruments not measured at fair value through income.

The following table presents our gains/losses on financial assets and liabilities (net) and exchange differences (net) in the periods indicated.

 

(1) Gains/losses on financial assets and liabilities (net) and exchange rate differences (net) excluding the effects of overseas hedging are a non-GAAP measure. For more information, see "Item 3. Key Information — A. Financial Data Selected — Reconciliation of Non-GAAP Measures and Indices with the Most Directly Comparable IFRS Financial Measures."

Other Operating Profits/Expenses

Other operating expenses for the year ended December 31, 2023, totaled R$ 716 million, a decrease of R$ 125 million compared to expenses of R$ 841 million for the year ended December 31, 2022, mainly due to higher expenses with pension plans (FGC) arising from a growth in global deposit balance.

Other operating expenses for the year ended December 31, 2022 totaled R$841 million, a decrease of R$279 million compared to expenses of R$1,120 million for the year ended December 31, 2021, primarily due to lower expenses with the Benefit Guarantee Fund (FGB) pension plan and higher expenses with FGC pension plans, given the increase in the balance of deposits from R$ 436 million to R$ 478 million, which was mainly due to the increase in the consumption of products covered by the FGC. For the year ended December 31, 2021, other operating income/expenses were expenses of R$1,120 million, compared to expenses of R$873 million for the year ended December 31, 2020.

 

Administrative Expenses

Administrative expenses for the year ended December 31, 2023 were R$ 19,563 million, an increase of R$ 1,323 million compared to expenses of R$ 18,240 million for the year ended December 31, 2022, primarily due to the increase in expenses for salaries and wages, technology/systems and technical services, resulting from the increase in inflation in the period and investment in expansion of the business.

Administrative expenses for the year ended December 31, 2022 were R$18,240 million, an increase of R$924 million compared to expenses of R$17,316 million for the year ended December 31, 2021, primarily due to the increase in expenses for salaries and wages, technology/systems and technical services, resulting from the increase in inflation in the period.

Personnel expenses increased by R$ 917 million in the year ended December 31, 2023, primarily due to higher employee wages and salaries arising from our collective bargaining with employees in 2022, which was applied to salaries up from September 2022, as well as the collective bargaining with employees in 2023, which was applied to salaries up from September 2023.

Personnel expenses increased by R$871 million in the year ended December 31, 2022, primarily due to higher employee wages and salaries arising from our collective bargaining with employees in 2021, which impacted the first eight months of 2022, and our 2022 collective bargaining agreement, which impacted the last four months of the year.

The following table presents our personnel expenses for each of the periods indicated:

Other administrative expenses increased R$ 406 million to R$ 8,749 million in the year ended December 31, 2023, from R$ 8,343 million in the year ended December 2022, primarily as a result of higher expenses on technical and specialized services, resulting from inflation growth in the period and investments to expand the business.

Other administrative expense increased R$52 million to R$8,343 million in the year ended December 31, 2022, from R$8,291 million in the year ended December 31, 2021, primarily as a result of higher expenses on real estate, utensils and supplies, and technology and systems, resulting from inflationary pressures, which were partially offset by decreased advertising expenses.

 

The following table presents our other administrative expenses for each of the periods indicated:

The efficiency ratio, calculated as total administrative expenses divided by total profit, increased to 29.7% in the year ended December 31, 2023 compared to 27,4% in the year ended December 2022. This increase of 2.3 p.p. in the index is mainly due to the reduction in net income (as a result of out more selective credit approval strategy and lower performance in market operations) and an increase in administrative expenses.

The efficiency ratio, calculated as total administrative expenses divided by total profit, increased to 27.4% in the year ended December 31, 2022, compared to 27.1% in the year ended December 31, 2021. This increase of 0.35 p.p. in the index is mainly due to the increase in administrative expenses, resulting from the increase in inflation in the period, and to the effect of a more selective credit approval policy.

Depreciation and Amortization

Depreciation and amortization for the year ended December 31, 2023 was R$ 2,741 million, an increase of 6.0% or R$155 million from R$2,586 million for the year ended December 31, 2022, primarily due to higher expenses for the amortization of hardware and software items resulting from investments made in the year ended December 31, 2023.

Depreciation and amortization for the year ended December 31, 2022 was R$2,586 million, an increase of 6.2% or R$152 million from R$2,434 million for the year ended December 31, 2021, primarily due to higher expenses for the amortization of hardware and software items resulting from investments made in the year ended December 31, 2022.

Provisions (Net)

The provisions mainly include provisions for tax, civil and especially labor causes. Provisions (net) totaled R$ 4,424 million in the year ended December 31, 2023, a decrease of 264.0%, or R$ 3,209 million, compared to R$ 1,215 million in the year ended December 31, 2022, mainly due to the increase of labor contingencies.

 

The provisions mainly include provisions for tax, civil and especially labor causes. Provisions (net) totaled R$1,215 million in the year ended December 31, 2022, a decrease of 44.2%, or R$964 million, compared to R$2,179 million in the year ended December 31, 2021. This was mainly due to the reduction of civil and labor lawsuits due to the revision of our operating model and the creation of provisions related to lawsuits filed by the Association of Retired Employees of the Bank of the State of São Paulo, or AFABESP, in which the classification of the risk of loss was maintained as probable in December 2022.

Impairment Losses on Financial Assets (Net)

Losses due to impairment of financial assets (net) in the year ended December 31, 2023 were R$ 28,008 million, an increase of R$ 3,179 million compared to R$ 24,829 million in the year ended the year ended December 31, 2022, driven by an increase in the provision as a result of an specific case of large client in our wholesale segment.

Losses due to impairment of financial assets (net) in the year ended December 31, 2022 were R$24,829 million, an increase of R$7,716 million compared to R$17,113 million in the year ended the year ended. December 31, 2021, driven by deteriorating macroeconomic conditions in Brazil and a specific case of a large client in our wholesale segment.

Our credit risk exposure portfolio increased by R$ 55.3 billion to R$ 719.8 billion as of December 31, 2023 compared to R$ 664.5 billion on December 31, 2022. In addition, our depreciated assets increased by R$ 0.7 billion from R$ 39.2 billion as of December 31, 2022 to R$ 39.9 billion in the year ended December 31, 2023.

Our credit risk exposure portfolio increased by R$ 43.4 billion to R$ 664.5 billion as of December 31, 2022, compared to R$ 621.1 billion as of December 31, 2021. In addition, our depreciated assets increased by R$12.3 billion from R$26.9 billion as of December 31, 2021 to R$39.2 billion in the year ended December 31, 2022.

The following table shows the ratio of our non-recoverable assets to total credit risk exposure and our coverage ratio as of December 31, 2023, 2022 and 2021.

 

Non-recoverable assets by Loan Type

The following table shows our non-recoverable assets by loan type as of December 31, 2023, 2022 and 2021.

Commercial and Industrial

Depreciated assets in the commercial and industrial loan portfolio totaled R$ 16,292 million as of December 31, 2023, an increase of R$ 2,136 million, or 15.1%, compared to R$ 14,156 million as of December 31, 2022. This increase was due to a specific case of a large client in our wholesale segment that entered into judicial reorganization proceedings.

Depreciated assets in the commercial and industrial loan portfolio totaled R$14,156 million as of December 31, 2022, an increase of R$2,716 million, or 23.7%, compared to R$11,440 million as of December 31, 2021. This increase was due to a specific case of a large client in our wholesale segment that entered into judicial reorganization proceedings.

Real estate

Depreciated assets in the real estate loan portfolio totaled R$1,352 million as of December 31, 2023, an increase of R$294 million, or 27.9% compared to R$1,058 million as of December 31, 2022. The increase in depreciated assets in this portfolio was mainly due to the maturity of loans granted before we tightened out credit approval conditions with effect from January 2022.

Depreciated assets in the real estate loan portfolio totaled R$1,058 million as of December 31, 2022, an increase of R$588 million, or 125% compared to R$470 million as of December 31, 2021. The increase in depreciated assets in this portfolio was mainly due to the impact on our clients of deteriorating macroeconomic conditions in Brazil.

 

Installment Loans to Individuals

Depreciated assets in the portfolio of installment loans to individuals totaled R$ 22,239 million as of December 31, 2023, a reduction of R$ 1,760 million, or 7.3%, compared to compared to R$ 23,999 million as of December 31, 2022. The decrease of the depreciated assets in the portfolio of installment loans resulted mainly from the fact that the loans granted after we tightened out credit approval conditions with effect from January 2022 generally perform better than loans granted before that date.

Depreciated assets in the portfolio of installment loans to individuals totaled R$23,999 million as of December 31, 2022, an increase of R$9,003 million, or 60.0% compared to R$14,996 million as of December 31, 2021. The increase in depreciated assets in this portfolio was due to the impact on our clients of deteriorating macroeconomic conditions in Brazil.

Financial Lease

Depreciated assets in the lease loan portfolio totaled R$ 4 million as of December 31, 2023, a decrease of R$ 6 million compared to R$ 10 million as of December 31, 2022. The reduction of the non-recoverable assets in the lease loan portfolio was mainly a result of improved qualities of the most recent credit origination.

Depreciated assets in the lease loan portfolio totaled R$10 million as of December 31, 2022, a decrease of R$7 million compared to R$17 million at December 31, 2021 primarily due to a decrease in delinquent loans.

Impairment Losses on Other Assets (Net)

Impairment losses of other (net) assets in the year ended December 31, 2023 totaled losses of R$ 250 million, a decrease of R$ 89 million compared to R$ 161 million in the year ended December 31, 2022, primarily due to impairment losses on intangible assets.

Impairment losses of other (net) assets in the year ended December 31, 2022 totaled losses of R$161 million, a decrease of R$4 million compared to R$166 million in the year ended December 31, 2021, primarily due to impairment losses on intangible assets.

Other Non-Financial Gains/Losses

Other non-financial gains totaled R$ 1,044 million during the year ended December 31, 2023, an increase of R$ 913 million compared to gains of R$ 131 million during the year ended December 31, 2022, primarily due to the sell of 40% stake in the share capital of Webmotors.

Other non-financial gains totaled R$131 million during the year ended December 31, 2022, an increase of R$99 million compared to gains of R$33 million during the year ended December 31, 2021, primarily due to non-recurring gains from real estate gains in the year ended December 31, 2022.

Operating Income before Taxation

Operating profit before tax for the year ended December 31, 2023 was R$ 11,922 million, a decrease of R$ 7,653 million, or 39.1%, compared to R$19,575 million for the year ended December 31, 2022. For the year ended December 31, 2021, our operating profit before tax was R$ 24,750 million.

 

Excluding the effects of hedging for investments held abroad, operating profit before tax totaled R$ 11,759 million in the year ended December 31, 2023, a decrease of 39.57% compared to R$ 19,446 million in the year ended December 31, 2022. In the year ended December 31, 2021, operating profit before tax was R$ 27,262 million. Operating profit before tax, excluding hedging effects for investments held abroad, is a non-GAAP measure. For more information, see "Item 3. Key Information — A. Financial Data Selected — Reconciliation of Non-GAAP Measures and Indices with the Most Directly Comparable IFRS Financial Measures."

The table below presents our operating profit before tax and our operating profit before taxes, excluding the effects of hedging for investments held abroad in the periods presented.

(1) Adjusted operating income is a non-GAAP measure. For more information, see "Item 3. Key Information — A. Financial Data Selected — Reconciliation of Non-GAAP Measures and Indices with the Most Directly Comparable IFRS Financial Measures."

Income Taxes

Income tax expenses include income tax, social contribution, PIS and COFINS (which are social contributions due on certain revenues net of some expenses).

Total income tax was R$ 2,423 million in the year ended December 31, 2023, a reduction of 53.7%, or R$2,812 million, relative to the income tax balance of R$5,235 million in the year ended December 31, 2022. This reduction in expenses was primarily attributable to the following: (i) decrease of 39.15 or R$ 7,653 million of operational profit before tax to R$ 11,922 million in the year ended December 31, 2023, from R$ 19,575 million in the year ended December 31, 2022, primarily due to an increase in the provision net profit from R$ 3,208 million, or 264%, to R$ 4,24, million in the year ended December 31, 2023, from R$ 1,215 million in the year ended December 31, 2022; and (ii) other events that reduced the value of corporate taxes, such as increase of IOF, wich led to an increase of 12.63,or R$ 298 million, compared to R$ 2,363 million in the year ended in December 31, 2022.

Total income tax was R$5,235 million in the year ended December 31, 2022, a reduction of 43%, or R$3,956 million, relative to the income tax balance of R$9,191 million in the year ended December 31, 2021. This reduction in expenses was primarily attributable to the following: (i) foreign exchange losses of R$129 million as a result of the effects of exchange rate variations on foreign investment in our subsidiary and for hedging instruments, affecting "our gains (losses) on (net) financial assets and liabilities"; and (ii) a 20.9% or R$5,176 million reduction in operating profit before tax arising from the entities' operating results to R$19,575 million in the year ended December 31, 2022, from R$24,750 million in the year ended December 31, 2021, which was primarily due to a decrease in net interest income of R$3,815 million; or 7.4%, to R$47,503 million in the year ended December 31, 2022, of R$51,318 million in the year ended December 31, 2021 driven by our loan portfolio.

 

The following table shows our income tax and income tax excluding the effects of hedging for investments held abroad in the periods indicated.

* Income tax, excluding the effects of hedging investment made abroad, is a non-GAAP measure. For more information, see "Item 3. Key Information — A. Financial Data Selected — Reconciliation of Non-GAAP Measures and Indices with the Most Directly Comparable IFRS Financial Measures."

Results of Operations by Segment for the Years Ended December 31, 2023, 2022 and 2021

The following tables show our operating results for the years ended December 31, 2023, 2022 and 2021 for each of our operating segments.

 

Commercial bank

2023 and 2022

Operating profit before tax attributable to the Commercial Banking segment for the year ended December 31, 2023 was R$ 5,9 billion, a decrease of R$ 7.3 billion compared to R$13.3 billion in the year ended December 31, 2022.

This variation is mainly due to:

• an increase of R$ 3.2 billion in legal provision, representing an increase of 246.7% compared to the year ended December 31, 2022;

• an increase of R$ 2.9 billion in impairment losses on financial assets (net), representing an increase of 12.2% compared to the year ended December 31, 2022, mainly due to an increase in the credit portfolio driven by individuals’ portfolios and consumption loans;

 

• a reduction in net revenue driven by our strategy of selective credit in year ended December 31, 2023 compare to year ended December 31, 2022.

Excluding the effects of hedging for investments held abroad on our revenues, our operating profit before tax would have been R$5.8 billion, 56.0% lower than in the fiscal year ended December 31, 2022. Operating income, excluding hedging effects for overseas investments, is a non-GAAP measure.

2022 and 2021

Operating profit before tax attributable to the Commercial Banking segment for the year ended December 31, 2022 was R$13.3 billion, a decrease of R$6.2 billion from R$19.5 billion in the year ended December 31, 2021.

This variation is mainly due to:

• an increase of R$ 6.5 billion in impairment losses on financial assets (net), representing an increase of 37.9% compared to the year ended December 31, 2021, mainly due to (i) an increase in the loan portfolio driven by the portfolio of individual clients, despite a more selective credit approval policy, and (ii) the deterioration of the loan portfolio driven in particular by the increase in the cost of credit as a result of higher interest rates in 2022 than in 2021.

• a $746 million reduction in net fee and commission revenue due to (i) a more selective credit approval policy and (ii) reduced current and accountable service fees (as a result of annual fee waiver campaigns and as a result of customers' increasing use of PIX as an alternative to traditional banking).

Excluding the effects of hedging for investments held abroad on our revenues, our operating profit before tax would have been R$13.2 billion, 40.2% lower than in the fiscal year ended December 31, 2021. Operating income, excluding hedging effects for overseas investments, is a non-GAAP measure.

Global Wholesale Bank

n.s. = not significant.

 

2023 and 2022

Operating profit before tax attributable to the Global Wholesale Bank segment for the year ended December 31, 2023 was R$5,968 billion, an increase of 5.2% or R$326 million over the year ended December 31, 2022, which was primarily due to an increase in (i) administrative expenses and (ii) losses resulted from the reduction of the amount of recoverable financial assets (net) primarily driven by a specific case of a large client in our wholesale segment that has entered judicial reorganization proceedings.

2022 and 2021

Operating profit before tax attributable to the Global Wholesale Bank segment for the year ended December 31, 2022 was $6.3 billion, an increase of 19.7% or $1,035 million over the year ended December 31, 2021, which was primarily due to an increase in (i) net commission revenue primarily due to capital markets and trade finance and (ii) gain on assets and financial liabilities and exchange rate difference driven by gains on financial assets measured at fair value through the result maintained for trading. These results partially offset the increase in impairment losses in financial assets, primarily driven by a specific case of a large client in our wholesale segment that has entered judicial reorganization proceedings.

2.3. The directors must comment:

a.           Significant changes in accounting practices that have resulted in significant effects on the information provided for in fields 2.1 and 2.2.

IRFS 17 - As of May 2017, IASB issued the IFRS regarding insurance contracts, which aims to replace IFRS 4. The IFRS 17 has an implementation date of January 1^st, 2023, with retrospective adjustments in comparisons. This standard aims to demonstrate greater transparency and useful information in the financial statements, being the recognition of profits to the extent of the delivery of insurance services on of the main changes, in order to evaluate the performance of the insurers over time. The measurement method used was the Building Block Approach (BBA). The transition was divided into two stages with different methodologies, given the availability of data from various acquisitions: • Fair Value Methodology: FBG product portfolio. • Total Retrospective Methodology: Pension Portfolio with Risks (risk coverage (savings). The impacts of the adoption were:

 

The effects of the applicability of IFRS 17 for the year ended December 31, 2022 are not material. For the year ended December 31, 2021, accounting policies for insurance contracts follow IFRS 4.

Amendment to IAS 12 – Taxes on Profit: in December 2021, the Organization for Economic Cooperation and Development (OECD) released the rules of the Pillar Two model aiming at a reform of international corporate taxation in order to ensure that multinational economic groups within the scope of these rules pay tax on the minimum effective profit at the rate of 15%. The effective profit tax rate of each country, calculated in this model, was called “Global effective tax rate”. Those rules must be approved by the local legislation of each country, some of which have already enacted new laws or are in the process of being discussed and approved, and there will be no impact on Santander.

Amendment to IAS 1 and IFRS Practice Statement 2 – Disclosure of Accounting Policies: change of the term “significant accounting policies” to “material accounting policies”. The amendment also defines what “material accounting policies information” is, explains how to identify it and clarifies which immaterial accounting policies information may not be disclosed, but if it is, that is should not obscure the relevant accounting information. The “IFRS Practice Statement 2 Making Materiality Judments”, also amended, provides guidance on how to apply the concept of materiality to accounting policy disclosure.

Amendment to IAS 8 – Accounting Policies, Shift of Estimate and Rectification of Error: clarifies how entities must distinguish changes in accounting policies from changes in accounting estimates, since changes in accounting estimates are applied prospectively to future transactions and other future events, but changes in accounting policies are generally applied to previous transactions and other previous events, as well as to the current period. This change is effective as of January 1^st, 2023 and will have no impact on Santander.

 

Amendment to IAS 12 – Taxes on Profit: requires that entities recognize deferred tax on transactions that in the initial recognition give rise to equal amounts of taxable and deductible temporary differences. This typically applies to lease transactions (right-of-use assets and lease liabilities) and decommissioning and restoration obligations, as an example, and will require the recognition of additional deferred tax assets and liabilities. Said amendment is effective as of January 1^st, 2023 and has no impact on Santander.

There are no other IFRS or interpretation that have not yet been in force that could have material impact on the Bank’s financial statements.

b.           Modified opinions and emphases in the auditor's report

In the years ended December 31, 2023, 2022 and 2021, there were no caveats and emphases present in the opinion of the auditor in charge.

 

2.4. The officers shall comment on the material effects that the following events have caused or are expected to cause in the Company's financial statements and results:

a.           introduction or disposal of operating segment

No introduction or divestiture of an operating segment was carried out in the last 3 fiscal years.

b.        incorporation, acquisition or disposal of equity interest

On December 22, 2023, Santander Holding Imobiliária S.A. (“SHI”) – wholly-owned subsidiary of the Company – formalized, together with the shareholders of Apê 11 Tecnologia e Negócios Imobiliários Ltda. (“Apê11”), certain Quota Purchase Agreement to acquire the remaining 10% of the capital stock of Apê11 held by minority shareholders (“Transaction”). As a result of the Transaction, SHI now holds 100% of the capital stock of Apê11.

On December 31, 2023, Mob Soluções em Tecnologia Ltda (“Mob”) wes fully merged by its direct parent company, Mobills Labs Soluções em Tecnologia Ltda. (“Mobills”), in accordance with the conditions set forth in the Protocol and Justitication of the transaction. The implementation of the full merger of Mob did not imply an increase in Mobills’ share capital, since all Mob’s shares were held by Mobills and, therefore, already reflected in an investment account by equivalence.

·                 Sale of the entire Equity Stake held by Aymoré Crédito, Financiamento e Investimento S.A. in Banque PSA Finance, S.A. and Santander Corretora de Seguros, Investimentos e Serviços S.A. in PSA Corretora de Seguros e Serviços Ltda.

On August 31, 2023, Aymoré Crédito, Financiamento e Investimento S.A. ("Aymoré") and Santander Corretora de Seguros, Investimentos e Serviços S.A. ("Santander Corretora de Seguros”) concluded the sale of equity interest held by (a) Aymoré representing fifty percent (50%) of the share capital of Banco PSA Finance Brasil S.A., for Banque PSA, and (b) Santander Corretora de Seguros, representing fifty percent (50%) of the share capital of PSA Corretora de Seguros e Serviços Ltda., for Stellantis Services ("Transaction"). With the conclusion of the Transaction, Aymoré will no longer hold an equity interest in Banco PSA and Santander Corretora de Seguros will no longer hold an equity interest in Stellantis Corretora.

 

·                 Joint-venture between Banco Santander (Brasil) S.A. and Sodexo Pass International and Sodexo Pass do Brasil Serviços de Inovação Ltda.

On July 24, 2023, Banco Santander, Sodexo Pass International and Sodexo Pass do Brasil Serviços de Inovação Ltda entered into a joint-venture agreement, so that, once the transaction is completed, Banco Santander will hold twenty percent of capital stock of Sodexo Pass do Brasil Serviços e Comércio S.A. (“Transaction”). The conclusion of the Transaction will be subject to the fulfillment of certain conditions precedent customary in similar transactions, including obtaining the relevant regulatory clearances.

·                 Acquisition of the entire shareholding interest in Toro Participações S.A. and merger by Toro Corretora de Títulos e Valores Mobiliários S.A.

On January 3rd, 2024, after the fullfilment of the conditions precedente, Banco Santander concluded the transaction for the acquisition of all the shares of Toro Participações, so that it indirectly held 100% of the shares capital of Toro Corretora de Valores Mobiliários S.A. and Toro Investimentos S.A. On Febuary 29, 2024, the merger of Toro Participações S.A. by Toro Corretora de Títulos e Valores Mobiliários S.A. was approved. The effectiveness of the merge ris subject to approval by the Brazilian Central Bank.

·                 Sale of portion of Santander Corretora’s shareholding in Webmotors S.A. to Carsales.com Investments PTY LTD

On April 28, 2023, Santander Corretora de Seguros, Investimentos e Serviço S.A. (“Santander Corretora”) concluded the sale of shares representing fourty percent of the share capital of Webmotors S.A. (“Webmotors”) to Carsales.com Investments PTY LTD (“Carsales”) (“Transaction”). With the conclusion of the Transaction, Santander Corretora became Holder of thirty percent and Carsaled seventy percent of the shares capital of Webmotors.

·                 Investment of Santander Corretora de Seguros, Investimentos e Serviços S.A. in Biomas – Serviços Ambiental, Restauração e Carbono S.A.

On November 9, 2022, Santander Corretora de Seguros, Investimentos e Serviços S.A. ("Santander Corretora") entered into an investment agreement to become a shareholder ("Operation") of Biomas – Serviços Ambiental, Restauração e Carbono S.A. ("Biomas"). Biomas is a company established with the purpose of providing services aimed at the development and execution of activities aimed at the restoration and conservation of biodiversity and natural ecosystems, aligning, therefore, with the ESG (Environmental, Social and Governance) purposes of the Santander Group. After the fulfillment of the condition’s precedent established in the Agreement, the closing of the Transaction took place on March 20, 2023, so that Santander Corretora now holds 16.66% of the shareholding of Biomas.

On December 20, 2022, Banco Santander (Brasil) S.A. ("Santander"), together with the other shareholders, closed the investment transaction, through the subscription of new shares, by Lexisnexis Serviços de Análise de Risco Ltda. ("Lexisnexis") in Gestora de Inteligência de Crédito S.A. ("GIC"). Upon completion of the subscription, Lexisnexis becomes a shareholder holding shares equivalent to 20% (twenty percent) of GIC's share capital. With the implementation of the closure and the entry of Lexisnexis into GIC, Santander becomes the holder of 15.559% of the shares issued by GIC.

 

·                 Total spin-off of Atual Serviços de Recuperação de Crédito e Meios Digitais S.A. to Return Capital S.A. e Liderança Serviços Especializados em Cobrança Ltda.

On October 31, 2022, Atual Serviços de Recuperação de Crédito e Meios Digitais S.A. ("Atual") was fully divided and its assets were absorbed by both of its direct subsidiaries, Return Capital S.A. ("Return") and Liderança Serviços Especializados em Cobrança Ltda. ("Leadership") in accordance with the proportions established in the Protocol and Justification of the operation. With the implementation of the total spin-off, Return had its capital increased by R$ 3,990,617,559.32 and the Leadership by R$ 267,027,054.61, both of which were directly owned by Banco Santander (Brasil) S.A. as the sole shareholder of Return and the only partner of Leadership.

·                 Acquisition of an Equity Stake in SX Tools Soluções e Serviços Compartilhados Ltda.

On September 26, 2022, Banco Santander (Brasil) S.A. ("Banco Santander") underwrote the capital increase in SX Tools Soluções e Serviços Compartilhados Ltda ("SX Tools") becoming the sole partner of the company. SX Tools will act primarily in the provision of services to Banco Santander and Group companies and will concentrate the hiring of technology providers focused on the provision of such services.

·                 Acquisition of an Equity Stake in CSD Central de Serviços de Registro e Depósito aos Mercados Financeiro e de Capitais S.A.

On January 21, 2022, Santander Corretora de Seguros, Investimentos e Serviços S.A. ("Santander Corretora"), together with other investors, together with CSD Central de Serviços de Registro e Depósito aos Mercados Financeiro e de Capitais S.A. ("CSD BR") and its respective shareholders, a certain investment agreement and other agreements ("Agreement") with a view to subscribing to a minority interest in CSD BR ("Transaction"). CSD BR operates as a registrar of financial assets, derivatives, securities and insurance policies, authorized by the Central Bank of Brazil, the Securities and Exchange Commission and the Superintendence of Private Insurance. After compliance with the conditions precedent set forth in the Agreement, the closing of the Transaction took place on May 26, 2022, so that Santander Corretora now holds 20% (twenty percent) of CSD BR's shareholding.

 

·                 Sale of the entire Equity Stake held in Paytec Tecnologia em Pagamentos Ltda. and Paytec Logística e Armazém Ltda.

On May 26, 2022, Banco Santander entered into a contract with Getnet Adquirência e Serviços para Meios de Pagamento S.A. – Instituição de Pagamento ("Getnet IP"), the contract for the purchase and sale of shares, transfer of title and other covenants, of 100% of the shares of Paytec Tecnologia em Pagamentos Ltda. ("Transaction"). With the implementation of the Operation, Getnet IP directly held 100% of the shares of Paytec Tecnologia em Pagamentos Ltda and indirectly controlled Paytec Logística e Armazém Ltda.

·                 Acquisition of an Equity Stake in Monetus Investimentos Ltda. and Monetus Corretora de Seguros Ltda.