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 to promote the economic and social development of the Northeast Region, as well as part of the states of Minas Gerais and Espírito Santo, as set out in its bylaws. Organized as a mixed-capital corporation, Banco do Nordeste is a publicly traded company, with shares traded on B3 under the ticker BNBR3, and has an indefinite duration. Throughout its history, it has established itself 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 assistance, services, technical support and training to projects of economic and social interest. To this end, the bank may carry out all active, passive and ancillary banking transactions typical of institutions that are part of the Brazilian Financial System, including securities advisory, financial intermediation, portfolio management, issuance and management of credit cards, and foreign exchange and rural credit operations. Its business model is strongly associated with long-term credit, short-term loans, microfinance and capital markets transactions, always aligned with the credit policy guidelines defined in law and in Federal Government regulations.

One of Banco do Nordeste’s differentiating factors is its role as 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 purpose 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 acts as operating and financial agent and manager of the securities portfolio of the Northeast Investment Fund (Finor), which allocates resources to subscribe shares and debentures of companies eligible to receive tax incentives from Sudene. The bank also operates as a credit agent for Pronaf, focused on family farming, and as operator of the Northeast Development Fund (FDNE), reinforcing its role as a coordinator of regional development credit.

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

Banco do Nordeste’s product portfolio includes credit transactions for the acquisition of machinery, equipment and raw materials, the modernization of industrial plants, retail and wholesale trade, the services sector, rural activity and agribusiness, as well as urban and rural microcredit. Additionally, the bank offers traditional banking services, such as demand and time deposit accounts, savings accounts, securities custody, foreign exchange transactions, electronic transfers, collection services and credit cards. In the capital markets area, Banco do Nordeste structures and distributes local debt and securities, such as debentures, promissory notes, Real Estate Receivables Certificates (CRI) and 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 portfolios, in addition to leasing.

Banco do Nordeste’s geographic presence is focused on its core area of operation, which covers all 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, as of December 2024 the bank maintained a network of 294 branches, equivalent to 9.5% of the banking network in the region. This capillarity is reflected in 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 agroindustrial credit portfolio, considering commercial and multiple banks with a commercial portfolio, with FNE financings added to the Central Bank’s statistics.

The distribution process for products and services 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 establish workflows, segregation of duties and responsibilities of the areas in charge. Proposals for the creation, improvement or discontinuation of products go through a Product Committee before proceeding to approval by the executive board, 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 operations are strongly influenced by government 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 issued by the National Monetary Council. In the environmental, social and climate dimensions, the bank states that it complies with federal, state and municipal legislation on environmental licensing, water resources management, the Forest Code and the National System of Conservation Units, in addition to following recent CMN resolutions on 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 social, environmental and climate risk and opportunity reports and is subject to legal prohibitions on granting credit and contributions to political agents and parties.

In the environmental, social and governance (ESG) field, Banco do Nordeste publishes an Integrated Annual Report, available on its website, following the standards of the Global Reporting Initiative (GRI). 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 topics the eradication of poverty, 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 funds. Its operations are conducted in a highly regulated environment, both in prudential and socio-environmental terms, and the institutional strategy is accompanied by transparency practices on ESG topics, which together provide relevant information for understanding its risk profile and the nature of its business.