BMIN3 Banco Mercantil de Investimentos

Banco Mercantil de Investimentos S.A. traces its origins to Banco Campina Grande de Investimento S.A., incorporated on February 6, 1971, in Rio de Janeiro, from the merger of three credit, financing and investment institutions: Rique S.A., RIOCRET – Crédito, Financiamento e Investimentos do Rio S.A., and Nordestina S.A. – Crédito, Financiamento e Investimentos. In 1972, this bank was acquired by Banco Mercantil de Minas Gerais S.A., now Banco Mercantil do Brasil S.A., which became its controlling shareholder, transferred its headquarters to Belo Horizonte, and changed its corporate name to Banco Mercantil de Investimentos S.A. As of April 1973, it began operating under the management of its controller with a focus on equity participation and medium- and long-term financing transactions, management of securities portfolios, and other activities typical of the segment, always in compliance with the legal and regulatory rules of the financial system. In 1977, it was registered as a publicly held company with the Brazilian Securities and Exchange Commission (CVM), and since then its shares, including tickers BMIN3 and BMIN4, have been traded on B3 S.A. – Brasil, Bolsa, Balcão.

Over the following decades, Banco Mercantil de Investimentos went through capitalizations and reached its operational peak in the 2000s. From then on, as a strategic decision, it began to operate in an integrated manner with its controlling shareholder, Banco Mercantil do Brasil, which has a traditional presence in the national financial system. This integration allows BMI to rely on several portfolios within the group, including commercial, investment, credit and financing, leasing, and mortgage lending. The company currently focuses on building an in-house team with a specialized technical profile, capable of executing the business plan in its strategic fronts, as well as on improving its governance structure and internal policies. In parallel, it seeks M&A mandates in sectors considered strategic and aligned with its expertise, reinforcing its positioning as an investment bank focused on structured capital markets solutions.

The main activity of Banco Mercantil de Investimentos is the offering of structured capital markets products, combined with advisory services in mergers and acquisitions (M&A) and corporate finance transactions, operating throughout Brazil and across various economic sectors. The institution is fully capable of structuring transactions that are typical for investment banks, such as Agribusiness Receivables Certificates (CRA) and Real Estate Receivables Certificates (CRI), investment funds (FIP, FII, FIDC), securitizations, and securities offerings, including debentures and promissory notes. In the fiscal year ended December 31, 2024, most of the company’s net revenue came from the result of transactions with securities, which accounted for 88.72% of revenue (R$ 8,179 thousand), while credit operations accounted for 3.00% (R$ 290 thousand) and service revenue totaled R$ 562 thousand. BMIN3 and BMIN4 shares reflect this business model, which is strongly anchored in financial intermediation and structuring of capital markets transactions.

From an operational standpoint, BMI organizes its activities into three main pillars: structured debt (DCM), M&A, and corporate finance. In DCM, the focus is on structuring and distributing debentures and receivables certificates (CRA and CRI), especially for the agribusiness and real estate sectors. The institution has already acted as lead coordinator in debenture offerings with restricted efforts, as well as in CRI and CRA offerings, and also as a special participant in the distribution of these securities. In M&A, the bank performs comprehensive company and sector valuations, advises on the search for new partners, capital restructuring, going public, or full or partial sale of equity stakes. In corporate finance, it focuses on structured financing linked to future market transactions, especially bridge loans, supporting expansion projects, debt restructuring and corporate reorganization.

The distribution of structured products by Banco Mercantil de Investimentos is supported by the extensive branch network of its controlling shareholder, allowing access to a broad investor base. The institution operates with a lean and efficient structure, maintaining an office in São Paulo to remain close to companies and institutional investors. Its operating model prioritizes placing securities in the market, with no focus on keeping these assets in its proprietary portfolio beyond the legal terms, directing most offerings to the institutional public. In its transactions with securities, the bank applies its own cash availability with its controller, predominantly in interbank transactions, which explains the significant weight of this line in financial intermediation revenue. Credit operations, in turn, are carried out in Brazil and are concentrated in working capital loans and corporate credit transactions generally linked to capital markets mandates.

In the competitive landscape, BMI operates in a specific niche of the investment banking market in Brazil. In working capital lending, as of December 31, 2024, the bank had a market share of 0.016%, competing with investment banks linked to major commercial banks such as Bradesco BBI, Itaú BBA, Banco Santander and Banco do Brasil, in addition to foreign institutions. Competition is described as fierce, especially due to the ability of large banks to offer more competitive rates. In the capital markets segment, Banco Mercantil de Investimentos focuses on transactions that generally do not reach the volumes that would justify the involvement of large investment houses, serving smaller companies that are well positioned in their sectors, with good governance and liquidity, which often do not have access to long-term funding instruments. Initially, the focus was on the controlling shareholder’s client base, which has gradually been expanded to other states and sectors where shortcomings in service by traditional investment banks have been identified.

Banco Mercantil de Investimentos is a financial institution regulated by the Central Bank of Brazil, which granted it an operating license on April 9, 1973, and it has since maintained what is considered an appropriate relationship with the monetary authority, with no records of situations that put its activities at risk. As a publicly held company, it is also subject to the rules of the Brazilian Securities and Exchange Commission (CVM), which granted its registration on July 20, 1977. The company’s activities are restricted to Brazilian territory, with no revenue from countries other than Brazil. From the customer standpoint, the institution reports no material concentrations, with no customer accounting for more than 10% of net revenue in 2024, which suggests a relatively diversified business portfolio. In terms of operational dependence, BMI makes intensive use of its controller’s infrastructure and does not show material dependence on specific suppliers, although it adopts supplier evaluation criteria that take into account price, term, quality, and social and environmental aspects.

Regarding environmental, social and governance (ESG) practices, Banco Mercantil de Investimentos follows the guidelines of Grupo Mercantil, which maintains a Social, Environmental and Climate Responsibility Policy (PRSAC), in compliance with CMN Resolution 4,945/21 and Febraban guidelines. This policy guides the conduct of business with a focus on social, environmental and climate risk, covering topics such as ethical conduct, a whistleblower channel managed by an independent company, people management aligned with labor legislation, and the promotion of an inclusive work environment that values diversity. On the environmental front, despite the low direct impact of banking activities, the group manages water and energy consumption, practices selective paper collection and proper disposal of light bulbs and electronic equipment, and promotes internal awareness initiatives. ESG information is disclosed in an annual report prepared based on Global Reporting Initiative (GRI) concepts, available on the investor relations website and at the CVM, although there is no reference to specific independent assurance of these data.

For individual investors interested in BMIN3 and BMIN4 shares, it is worth noting that Banco Mercantil de Investimentos positions itself as a niche investment bank, integrated into a traditional financial group and focused on structured capital markets products, M&A transactions, and corporate credit linked to future transactions. Its operations are concentrated in Brazil, with a strong weight of revenue from securities, exposure to credit cycles and capital markets dynamics, and participation in a competitive environment dominated by large banks, but with an identified space in smaller clients and transactions that are not fully served by the main market players.