ABCB4 Banco ABC Brasil

Banco ABC Brasil S.A. is a private multiple-service bank founded in 1989, originating from a joint venture between Arab Banking Corporation and Grupo Roberto Marinho, under the name Banco ABC Roma S.A. From the outset, the institution has focused its activities on corporate lending and treasury, targeting medium and large companies. In 1991, a new management team composed of Brazilian executives took over, bringing experience in the local financial segment. In 1997, Arab Banking Corporation acquired Grupo Roberto Marinho’s stake, becoming the controlling shareholder, and the executives began to hold a minority stake, aligning interests between management and the controlling shareholder. In that same year, the name was changed to Banco ABC Brasil S.A., a name that has been maintained to the present day. The bank’s headquarters is located in São Paulo, in the Itaim Bibi district, and the institution also has a branch in the Cayman Islands.

Banco ABC Brasil’s shares, traded on B3 under the ticker ABCB4, joined the Level 2 Corporate Governance segment in 2007, after its initial public offering. This classification entails adherence to differentiated governance practices, with enhanced rights for preferred shareholders and a commitment to greater transparency in its relationship with the market. The institution structures its internal governance with committees responsible for decisions on credit, treasury, investments, and administrative matters, reflecting a partnership-style model of local management supported by an international controlling shareholder. The bank is regulated and supervised by the Central Bank of Brazil and, as a publicly traded company, also by the Brazilian Securities and Exchange Commission (CVM), in addition to being subject to oversight by the Cayman Islands Monetary Authority for its overseas branch.

Banco ABC Brasil’s business model is centered on financial intermediation and the granting of corporate credit, focusing on companies in the C&IB, Corporate and Middle segments. The C&IB segment covers companies with annual revenue above R$ 4 billion; the Corporate segment comprises companies with revenue between R$ 300 million and R$ 4 billion; and the Middle segment includes companies with revenue between R$ 30 million and R$ 300 million. The main business line is the net interest income generated by credit operations, supplemented by fee income from services, guarantees provided, investment banking and insurance brokerage. In 2024, net interest income accounted for more than 80% of total revenue, with emphasis on client margin and market operations, while fee income was composed, among other items, of guarantees, investment banking activities and insurance-related fees.

Banco ABC Brasil’s expanded loan portfolio, which includes loans, guarantees provided and private securities, reached R$ 53.171 billion at the end of December 2024, increasing compared to previous years. The loan portfolio totaled R$ 24.0498 billion at the end of 2024, equivalent to 0.96% of the total loan balance to legal entities in the Brazilian Financial System, indicating a relevant but non-dominant presence in the corporate market. Credit quality is a central aspect of the institution’s strategy, with 96.2% of the loan portfolio rated between AA and C at the end of 2024 and loan loss provisions corresponding to 2.3% of the total portfolio. The bank emphasizes a conservative stance in taking on credit risk and in treasury management, supported by continuous investments in technology, risk control systems and improvements to operational processes.

Over the years, Banco ABC Brasil has broadened its scope within the corporate segment, adding new products and business areas. In 2013, it began investment banking operations focused on Debt Capital Markets (DCM) and mergers and acquisitions (M&A), helping companies in capital markets fundraising and strategic consolidation decisions. In 2019, it began operating in the Middle segment, expanding its addressable market to relatively smaller companies, and added Project Finance and Equity Capital Markets (ECM) to its investment banking platform. In 2020, it added energy trading with the acquisition of a power trading company and launched ABC Link, a distribution channel for financial services through banking correspondents and partner offices. In 2021, it set up an insurance brokerage, and in 2022 it structured the Credit Recovery area, dedicated to analyzing and pricing non-performing loan portfolios and to receivables management intelligence.

Banco ABC Brasil’s product portfolio includes recurring and non-recurring lines aimed at corporate clients. Among the recurring products, cash management stands out, encompassing payment, collection and transfer solutions. Among the non-recurring products, the bank offers various credit facilities in local currency, such as working capital, overdraft credit lines, receivables discount, supplier prepayment, Cheque-Empresa, FINAME, onlending of BNDES credit lines, bank credit notes and promissory notes. In foreign currency, it operates with export financing (ACC) and import financing. It also offers guarantees in the form of avals and sureties, foreign exchange transactions, derivatives, investment banking services (including debentures, CRIs, CRAs, FIIs, M&A, project finance and ECM), insurance brokerage, energy trading and credit recovery services. The group’s securities dealer complements this offering with intermediation of public offerings, portfolio management, custody and operations in foreign exchange, commodities and futures markets.

Banco ABC Brasil’s geographic presence is distributed through a network of business platforms segmented by client profile. At the end of 2024, the institution maintained two platforms for the C&IB segment, fifteen platforms for the Corporate segment (including one dedicated to multinationals), eleven platforms for Middle clients, three platforms focused on clients in the Agribusiness sector and one specific platform for financial institutions. This structure enabled commercial presence in 50 cities, spread across several Brazilian states, including important economic hubs such as São Paulo, Rio de Janeiro, Belo Horizonte, Campinas, Curitiba, Porto Alegre, Fortaleza, Recife and Salvador, as well as locations strongly linked to agribusiness and industry. The distribution strategy is reinforced by ABC Link, which extends its reach through partner offices, with an emphasis on credit, cash management, guarantees, derivatives, foreign exchange, insurance and investment banking.

Banco ABC Brasil’s activities take place within a complex and highly supervised regulatory environment. In Brazil, the institution depends on authorization from and is supervised by the Central Bank, which granted its authorization certificate in August 1989. As a publicly traded company, it is subject to CVM rules, having obtained its registration in 2007, and follows prudential and disclosure rules required by the authorities. Abroad, its Cayman Islands branch operates under a type “B” license issued by the Cayman Islands Monetary Authority, in compliance with local and Brazilian regulations. Funding, which is essential to support its credit operations, is raised through the issuance of financial bills, real estate credit bills and agribusiness credit bills, certificates of deposit, onlending of BNDES funds and note issuances in the overseas market, in an environment of rates and conditions influenced by monetary policy, default levels and taxation.

Regarding environmental, social and governance (ESG) aspects, Banco ABC Brasil maintains a dedicated structure, with an ESG area and a Sustainability Committee, and publishes an annual sustainability report in Integrated Report format. The report is prepared based on Global Reporting Initiative standards and incorporates SASB indicators for commercial banks and investment banking and brokerage. The selection of material topics is guided by a recently revised materiality matrix, covering ethics, transparency, data privacy, innovation, risk management, corporate governance, customer experience, economic performance, human capital, diversity and climate change. The bank also observes specific regulations from the National Monetary Council and the Central Bank on social, environmental and climate responsibility, management of social, environmental and climate risks and reporting of information related to these topics, integrating these guidelines into its responsibility policy and corporate risk management.