BNBR3

Banco do Nordeste do Brasil S.A., known as Banco do Nordeste, is a development financial institution created by Federal Law No. 1,649, of July 19, 1952. Headquartered in Fortaleza, capital of the state of Ceará, the bank was structured to operate as an instrument for promoting the economic and social development of Brazil’s Northeast Region, as well as part of the states of Minas Gerais and Espírito Santo, as set forth in its bylaws. Organized as a mixed-capital corporation, Banco do Nordeste is a publicly held company, with shares traded on B3 under the ticker BNBR3, and has an indefinite term of existence. Over the course of its history, it has consolidated its role as an agent of the Federal Government in implementing public policies aimed at financing productive activities in its area of operation.

The main mission of Banco do Nordeste is to promote development and the circulation of goods by providing financial, service, technical and training assistance to ventures of economic and social interest. To this end, the bank may carry out all typical active, passive and ancillary banking transactions of institutions that are part of the National Financial System, including securities advisory, financial intermediation, portfolio management, issuance and management of credit cards, and foreign exchange and rural credit transactions. Its business model is strongly associated with long-term credit, short-term loans, microfinance and capital markets operations, always aligned with the credit policy guidelines defined in law and in Federal Government regulations.

One of Banco do Nordeste’s distinguishing features is its role as an operator and manager of public development funds and programs. The bank manages the Northeast Constitutional Financing Fund (FNE), created by the Federal Constitution of 1988 and regulated by Law No. 7,827/1989, whose objective is to provide financial support to the productive sectors of the Northeast Region and specific areas of Minas Gerais and Espírito Santo. In addition, Banco do Nordeste is the operating and financial agent and portfolio administrator of the Northeast Investment Fund (Finor), which uses resources to subscribe shares and debentures of companies eligible for tax incentives from Sudene. The bank also acts as a credit agent of Pronaf, focused on family farming, and as an operator of the Northeast Development Fund (FDNE), reinforcing its role as a facilitator of regional development credit.

In its product and service offering, Banco do Nordeste serves a diversified client base. In the corporate segment, it serves companies of all sizes, including Corporate, large and mid-sized companies, as well as micro and small businesses. In rural areas, it operates with agribusiness, small and very small rural producers and family farmers through specific credit lines and microfinance programs. Notable programs include Crediamigo, focused on urban microentrepreneurs, and Agroamigo, directed at family farmers in rural areas. The bank also maintains relationships with individuals and the public sector, serving state and municipal governments and entities of direct and indirect administration, especially in operations aimed at improving infrastructure and financing productive investments.

Banco do Nordeste’s product portfolio includes credit operations aimed at acquiring machinery, equipment and raw materials, modernizing industrial plants, and financing retail and wholesale trade, the services sector, rural activities and agribusiness, in addition to urban and rural microcredit. Complementarily, the bank offers traditional banking services such as demand and time deposit accounts, savings, securities custody, foreign exchange transactions, electronic transfers, collection services and credit cards. In the capital markets area, Banco do Nordeste structures and distributes local securities such as debentures, promissory notes, Real Estate Receivables Certificates (CRI) and Credit Receivables Investment Funds (FIDC). It also manages third-party assets for small, medium and large investor profiles, reinforcing its scope as a multiple bank with commercial, investment, development, credit, financing and investment, as well as leasing portfolios.

Banco do Nordeste’s geographic presence is focused on its core area of operation, which covers all the states in the Northeast, the north of Minas Gerais and part of Espírito Santo, with statutory authorization to open branches in other regions of the country and abroad. To serve the 2,074 municipalities in its area of operation, the bank maintained, in December 2024, a network of 294 branches, corresponding to 9.5% of the region’s banking network. This capillarity translates into a relevant share of development credit: according to data from December 2024, Banco do Nordeste held 50.18% of the total volume of long-term financing in the region and 48.08% of the rural and agro-industrial credit portfolio, considering commercial banks and multiple banks with a commercial portfolio, with FNE financing added to Central Bank statistics.

The product and service distribution process combines physical and digital channels. Transactions are originated through branches, internet and mobile banking channels, ATMs, and service units specialized in microfinance. Internally, the development of products and services is governed by regulations that define workflows, segregation of duties and responsibilities of the areas involved. Proposals for creating, improving or discontinuing products go through a Product Committee before being submitted to the executive board for approval, and there is a periodic performance assessment of the portfolio, with the aim of aligning it with the bank’s strategic guidelines. In terms of concentration risk, the reference form states that, on the reporting date considered, no transaction with an individual client accounted for 10% or more of net revenue, indicating diversification of the revenue-generating base.

Banco do Nordeste’s activities are strongly influenced by state regulation. The bank is authorized by the Central Bank of Brazil to operate as a multiple bank and is subject to extensive prudential regulation, including rural credit, following the Rural Credit Manual and regulations of the National Monetary Council. In the environmental, social and climate dimensions, the bank declares that it complies with federal, state and municipal legislation on environmental licensing, water resource management, the Forest Code and the National System of Conservation Units, in addition to following recent CMN resolutions dealing with the management of social, environmental and climate risks and the Social, Environmental and Climate Responsibility Policy (PRSAC). The bank also complies with Central Bank requirements regarding the disclosure of reports on social, environmental and climate risks and opportunities and is subject to legal prohibitions regarding the granting of credit and contributions to political agents and parties.

In the environmental, social and governance (ESG) field, Banco do Nordeste produces an Annual Integrated Report, available on its website, following Global Reporting Initiative (GRI) standards. This report is audited by an independent firm and includes a materiality matrix updated in 2023, covering topics such as talent development and well-being, diversity and inclusion, risk management, corporate governance, productive inclusion via microcredit, innovation and technology, integrity and ethics, sustainable business, protection of human rights, customer relations, social, environmental and climate responsibility, as well as cybersecurity and data protection. The bank states that it takes into account the UN Sustainable Development Goals (SDGs), highlighting as material issues such as poverty eradication, sustainable agriculture, gender equality, sanitation, clean energy, economic growth, infrastructure, reduction of inequalities, climate action and institutional strengthening. The institution also reports that it publishes greenhouse gas emissions inventories based on the Brazilian GHG Protocol Program methodology, covering scopes 1, 2 and 3, with independent verification, which reinforces the incorporation of climate aspects into its strategy and risk management.

For investors analyzing BNBR3 shares on B3, Banco do Nordeste thus presents itself as a mixed-capital multiple bank with a legal mandate for regional development, a strong presence in long-term and rural credit in its area of operation, and a central role in managing constitutional funds and tax incentive mechanisms. Its operations are conducted in a highly regulated environment, both in prudential and socio-environmental terms, and its institutional strategy is accompanied by transparency practices on ESG topics, which provides a set of relevant information for understanding its risk profile and the nature of its business.