outros quadros para tradução itr 1ºt 2018 - inglÊs · 01/01/2018 to 03/31/2018 9 01/01/2017 to...

ITR - Quarterly Information - 03/31/2018 - BANCO INDUSVAL S.A. Version : 1

Index

Company information

Composition of Capital 1

Individual Financial Statements

Balance Sheet Assets 2

Balance Sheet Liabilities and Equity 4

Statement of Operation 6

Statement of Comprehensive Income 7

Statement of Cash Flows 8

Statement of Changes in Equity

01/01/2018 to 03/31/2018 9

01/01/2017 to 03/31/2017 10

Statement of Value Added 11

Management Report 12

Notes to the Quarterly Information 25

Other Relevant Information 69

Reports

Report on Special Review of Quarterly Information 79

Executive Board Statement on the Financial Statements 81

Executive Board Statement on the Auditor's Report 82


Company information / Composition of Capital

Number of Shares Current Quarter(Units) 03/31/2018Paid-up Capital

Common Shares 115,033,148

Preferred Shares 37,494,103

Total 152,527,251

Treasury shares

Common Shares 0

Preferred Shares 543,396

Total 543,396


Individual / Balance Sheet - Assets

(in thousands of reais)

Account Account Description Current Quarter Prior YearCode 03/31/2018 12/31/20171 Total assets 2,556,399 2,518,399 1.01 Current assets 1,385,183 1,303,963 1.01.01 Cash 18,150 8,557 1.01.02 Short-term Interbank Investments 506,127 328,671 1.01.02.01 Open market investments 477,267 250,576 1.01.02.02 Interbank deposits 28,860 78,095 1.01.03 Marketable securities 530,317 647,283 1.01.03.01 Own portfolio 449,277 540,024 1.01.03.02 Subject to repurchase agreements 12,599 11,586 1.01.03.03 Subject to guarantees 68,439 95,642 1.01.03.04 Derivative financial instruments 2 31 1.01.04 Interdepartmental accounts 673 541 1.01.04.01 Unsettled payments and receipts 135 - 1.01.04.02 Restricted deposits - Brazilian Central Bank 519 540 1.01.04.03 Restricted deposits - Agreements 19 1 1.01.06 Loan operations 221,045 226,738 1.01.06.01 Private sector 232,550 237,405 1.01.06.03 Allowance for loan losses (11,505) (10,667) 1.01.08 Other receivables 108,385 92,059 1.01.08.01 Foreign exchange portfolio 56,700 52,675 1.01.08.02 Income Receivable 810 720 1.01.08.03 Negotiation and intermediation of securities 19,167 17,900 1.01.08.04 Sundry 52,869 24,198 1.01.08.06 Allowance for loan losses (21,161) (3,434) 1.01.09 Other assets 486 114 1.01.09.03 Prepaid expenses 486 114 1.02 Long-term receivables 948,747 990,641 1.02.02 Marketable securities 35,561 34,475 1.02.02.01 Own portfolio 15,381 8,231 1.02.02.02 Subject to repurchase agreements 20,180 26,244 1.02.03 Interdepartmental accounts 2,712 2,669 1.02.03.01 Restricted deposits - Agreements 2,712 2,669 1.02.05 Loan operations 160,185 215,427 1.02.05.01 Private sector 209,298 248,281 1.02.05.03 Allowance for loan losses (49,113) (32,854) 1.02.07 Other receivables 512,370 502,189 1.02.07.01 Credits for guarantees honored - 4,456 1.02.07.02 Sundry 548,620 604,955 1.02.07.03 Allowance for loan losses (39,066) (110,158) 1.02.07.05 Income Receivable 2,816 2,936 1.02.08 Other assets 237,919 235,881 1.02.08.01 Non-operating assets 257,208 251,941 1.02.08.02 Provision for losses (19,289) (16,670) 1.02.08.03 Prepaid expenses - 610


Individual / Balance Sheet - Assets


Account Account Description Current Quarter Prior YearCode 03/31/2018 12/31/20171.03 Permanent assets 222,469 223,795 1.03.01 Investments 216,094 216,721 1.03.01.02 Investments in subsidiaries 198,253 198,769 1.03.01.02.01 Local 198,253 198,769 1.03.01.03 Investments in subsidiaries 16,148 16,266 1.03.01.04 Other investments 1,693 1,686 1.03.02 Property and equipment in use 2,445 2,817 1.03.02.03 Other - Property and equipment in use 21,221 21,409 1.03.02.04 Accumulated depreciation (18,776) (18,592) 1.03.04 Intangible 3,930 4,257 1.03.04.01 Other intangible assets 13,100 13,100 1.03.04.02 Accumulated amortization (9,170) (8,843)


Individual / Balance Sheet - Liabilities and Equity


Account Account Description Current Quarter Prior YearCode 03/31/2018 12/31/20172 Total liabilities 2,556,399 2,518,399 2.01 Current liabilities 1,282,575 1,151,148 2.01.01 Deposits 701,106 624,885 2.01.01.01 Demand Deposits 28,268 23,346 2.01.01.02 Interbank 48,810 48,443 2.01.01.03 Time Deposits 624,028 553,096 2.01.02 Funds obtained in the open market 179,973 69,983 2.01.02.01 Own portfolio 32,559 37,372 2.01.02.02 Third-party portfolios 147,414 32,611 2.01.03 Funds from acceptance and issuance of securities 369,761 413,783 2.01.03.01 Agribusiness, Real estate and Financial credit bills 369,761 413,783 2.01.04 Interdepartmental accounts 269 - 2.01.04.01 Unsettled receipts and payments 269 - 2.01.05 Interbank accounts 3,213 6,095 2.01.05.01 Third-party funds in transit 3,213 6,095 2.01.07 Local onlendings 3,017 5,229 2.01.07.01 BNDES 830 1,375 2.01.07.02 FINAME 2,187 3,854 2.01.09 Other liabilities 25,236 31,173 2.01.09.01 Collection and payment of taxes and similar 78 58 2.01.09.02 Foreign exchange portfolio 9,625 397 2.01.09.03 Taxes and social security contributions 1,535 1,883 2.01.09.04 Social and statutory payables - 900 2.01.09.05 Negotiation and intermediation of securities 3,804 210 2.01.09.06 Derivative financial instruments 578 2,721 2.01.09.07 Sundry 9,616 25,004 2.02 Long-term liabilities 1,068,285 1,092,279 2.02.01 Deposits 933,358 960,931 2.02.01.02 Time Deposits 933,358 960,931 2.02.03 Funds from acceptance and issuance of securities 92,208 107,869 2.02.03.01 Agribusiness, Real estate and Financial credit bills 92,208 107,869 2.02.07 Local onlendings 8,030 8,303 2.02.07.02 FINAME 3,878 4,245 2.02.07.03 Other institutions 190 190 2.02.07.04 National Treasury 3,962 3,868 2.02.09 Other liabilities 34,689 15,176 2.02.09.03 Sundry 34,689 15,176 2.03 Deferred income 3,792 4,112


Individual / Balance Sheet - Liabilities and Equity


Account Account Description Current Quarter Prior YearCode 03/31/2018 12/31/20172.05 Equity 201,747 270,860 2.05.01 Capital 849,843 849,843 2.05.01.01 Local capital 849,843 849,843 2.05.02 Capital reserve 35,960 35,960 2.05.04 Profit reserve (4,283) (4,283) 2.05.04.05 Profit retention (4,283) (4,283) 2.05.04.05.01 Treasury shares (4,283) (4,283) 2.05.05 Carrying value adjustments (200) (198) 2.05.05.01 Mark-to-market adjustment on AFS securities (200) (198) 2.05.06 Retained earnings (accumulated deficit) (679,573) (610,462)


Individual / Statement of Operations


Account Account Description Accumulated

Current Year Accumulated

Prior YearCode 01/01/2018 to 03/31/2018 01/01/2017 to 03/31/20173.01 Income from financial intermediation 40,235 105,925 3.01.01 Loan operations 11,911 33,752 3.01.02 Marketable securities 19,402 60,107 3.01.03 Derivatives 4,456 7,469 3.01.04 Foreign exchange 4,466 4,597 3.02 Expenses for financial intermediation (111,791) (113,575) 3.02.01 Funds obtained in the market (40,365) (102,145) 3.02.02 Loans and onlendings (3,231) (1,999) 3.02.03 Sales / Transference operations of financial assets - (76) 3.02.04 Allowance for loan losses (68,195) (9,355) 3.03 Gross profit from (loss for) financial intermediation (71,556) (7,650) 3.04 Other operating income (expense) (23,684) (21,647) 3.04.01 Income from services rendered 1,282 2,720 3.04.02 Personnel expenses (11,532) (11,016) 3.04.03 Other administrative expenses (11,193) (10,602) 3.04.04 Taxes (537) (843) 3.04.05 Other operating income 1,751 2,009 3.04.06 Other operating expenses (3,994) (2,030) 3.04.07 Equity in the results of investees 539 (1,885) 3.05 Operating profit (loss) (95,240) (29,297) 3.06 Non-operating income (2,302) (840) 3.06.01 Revenue 548 836 3.06.02 Expenses (2,850) (1,676) 3.07 Profit (loss) before taxation (97,542) (30,137) 3.09 Deferred income tax 28,523 - 3.10 Profit Sharing/Statutory Contributions (92) (1,309) 3.10.01 Profit Sharing (92) (1,309) 3.10.01.01 Employees (92) (1,309) 3.13 Net income (loss) for the period (69,111) (31,446) 3.99 Net profit/income per share (0.45473) (0.20690)


Individual / Statement of Comprehensive Income




Prior YearCode 01/01/2018 to 03/31/2018 01/01/2017 to 03/31/20174.01 Net income (loss) for the period (69,111) (31,446) 4.02 Other comprehensive income (2) (190) 4.02.01 Carrying value adjustments (2) (190) 4.03 Comprehensive income (loss) for the period (69,113) (31,636)


Individual / Statement of Cash Flows - Indirect Met hod




Prior YearCode 01/01/2018 to 03/31/2018 01/01/2017 to 03/31/20176.01 Net cash provided used in operating activities 76,569 12,995 6.01.01 Cash from operations 3,776 (38,103) 6.01.01.01 Net income (loss) (69,111) (31,446) 6.01.01.02 Allowance for loan losses 68,195 9,355 6.01.01.03 Provision for loss on non-operating assets 2,619 893 6.01.01.04 Provision for contingencies 2,804 986 6.01.01.05 Depreciation and amortization 1,625 1,766 6.01.01.06 Equity in the results of investees (539) 1,885 6.01.01.07 Result on disposal of tangible assets (316) (12) 6.01.01.09 Market to Market adjustment - Securities and derivatives (1,500) (21,530) 6.01.01.10 Result on disposal of investments (1) - 6.01.02 Variation in assets and liabilities 72,793 51,098 6.01.02.01 Short-term Interbank Investments (115,197) (45,436) 6.01.02.02 Securities and derivatives 115,241 186,017 6.01.02.03 Loan operations 31,041 79,528 6.01.02.04 Other receivables and other assets (64,570) 21,240 6.01.02.05 Interbank and interdepartmental accounts (2,788) (5,584) 6.01.02.06 Deposits 48,648 49,805 6.01.02.07 Repo Operations 109,990 (94,815) 6.01.02.08 Agribusiness, Real estate and Financial credit bills (59,683) (128,568) 6.01.02.09 Borrowings (2,484) (5,849) 6.01.02.10 Other liabilities 12,915 (4,880) 6.01.02.11 Deferred income (320) (360) 6.02 Net cash provided by (used in) Investing activities (4,718) (6,122) 6.02.01 Disposal of tangible assets 3,105 706 6.02.02 Acquisition of tangible assets (7,979) (6,152) 6.02.03 Acquisition of investments (7) (1,200) 6.02.04 Disposal of investments 20 475 6.02.05 Dividends received 143 49 6.05 Increase(decrease) in cash and cash equivalents 71,851 6,873 6.05.01 Opening balance of cash and cash equivalents 276,213 754,151 6.05.02 Closing balance of cash and cash equivalents 348,064 761,024


Individual / Statement of Changes in Equity - 01/01 /2018 to 03/31/2018


Account Code Account Description Capital

CapitalReserves

RevaluationReserves

Revenue Reserves

Retained earnings/Accumulated deficit

Carrying value adjustments Total

5.01 Opening balance 849,843 35,960 - (4,283) (610,462) (198) 270,860

5.03 Adjusted balance 849,843 35,960 - (4,283) (610,462) (198) 270,860

5.04 Profit/loss for the period - - - - (69,111) - (69,111)

5.07 Adjustments to carrying value - - - - - (2) (2)

5.13 Closing balance 849,843 35,960 - (4,283) (679,573) (200) 201,747


Individual / Statement of Changes in Equity - 01/01 /2017 to 03/31/2017



CapitalReserves

RevaluationReserves

Revenue Reserves


Carrying value adjustments Total

5.01 Opening balance 849,843 35,960 - (4,283) (387,566) (126) 493,828

5.03 Adjusted balance 849,843 35,960 - (4,283) (387,566) (126) 493,828

5.04 Profit/loss for the period - - - - (31,446) - (31,446)

5.07 Adjustments to carrying value - - - - - (190) (190)

5.07.01 Adjustment of securities - - - - - (190) (190)

5.13 Closing balance 849,843 35,960 - (4,283) (419,012) (316) 462,192


Individual / Statement of Value Added




Prior YearCode 01/01/2018 to 03/31/2018 01/01/2017 to 03/31/20177.01 Revenues (27,216) 100,436 7.01.01 Financial intermediation 40,235 105,925 7.01.02 Services rendered and bank fees 1,282 2,720 7.01.03 Allowance for loan losses (68,195) (9,355) 7.01.04 Others (538) 1,146 7.02 Expenses for financial intermediation (43,596) (104,220) 7.03 Goods and services acquired from third parties (12,300) (9,432) 7.03.01 Materials, electricity and others (4,139) (4,475) 7.03.02 Third-party services (5,180) (3,969) 7.03.04 Others (2,981) (988) 7.04 Gross value added (83,112) (13,216) 7.05 Retentions (1,625) (1,766) 7.05.01 Depreciation and amortization (1,625) (1,766) 7.06 Net value added produced by the Institution (84,737) (14,982) 7.07 Value added transferred from others 539 (1,844) 7.07.01 Equity in the results of investees 539 (1,885) 7.07.02 Others - 41 7.08 Total value added to be distributed (84,198) (16,826) 7.09 Distribution of value added (84,198) (16,826) 7.09.01 Personnel 10,116 10,583 7.09.01.01 Salaries 7,244 8,504 7.09.01.02 Benefits 1,891 1,610 7.09.01.03 Employee severance indemnity fund (FGTS) 981 469 7.09.02 Taxes, charges and contributions (26,469) 2,595 7.09.02.01 Federal (26,638) 2,304 7.09.02.03 Municipal 169 291 7.09.03 Remuneration of third-party capital 1,266 1,442 7.09.03.01 Rents 1,266 1,442 7.09.04 Remuneration of own capital (69,111) (31,446) 7.09.04.03 Retained earnings (loss) for the period (69,111) (31,446)


Message from the Management

During the first quarter of 2018, when faced with this macroeconomic scenario that demands caution, the management has maintained a conservative stance, maintaining a high free cash level to its highest historical level, a shorter duration in our credit portfolio and rigor in provisioning, acting on specific niches of the credit market, particularly the agro sector, while boosting the growth of our brokerage and wealth management branch, Guide Investimentos.

The Bank’s Expanded Credit Portfolio closed the quarter at R$1.0 billion, with a 45.2% intentional retraction year-over-year. We pointed out that at the end of this quarter, the agro portfolio totaled R$ 505 million (48.5% of the total portfolio), of which approximately 88% of its loans were classified between AA and C. It is also important to highlight the high liquidity of the bank’s expanded portfolio, since its average duration ended the semester at only 12 months.

It is worth mentioning that the management of assets and liabilities reflects long-term profile of our funding sources versus the shorter-term profile of our assets, with 62% of our expanded credit portfolio’s operations e xpiring within the next 12 months.

At the end of 1Q18, free cash totaled R$834.9 million, corresponding to 40.5% of total deposits , compared to 39.2% at the end of 1Q17, maintaining the historically high level of recent quarters. Our comfortable cash position is the result of our strategy to maintain a high level of liquidity and diversify our funding sources in recent years and by the end of 1Q18, we had a depositor base of more than 30,400 investors, compared to 27,800 by late 1Q17 – up 9% in the period.

Financial Intermediation Result before ALL manageri al expenses totaled R$1.3 million compared to (R$2.7 million) in 4Q17, this decline still impacted by (i) the voluntary reduction policy of the credit portfolio, (ii) the cost of cash carryover and assets without financial compensation.

Consolidated managerial revenues from services rend ered and tariffs¹ from the Bank and Guide amounted R$24.5 million in the quarter, increased by 1.7% quarter-over-quarter and 44.0% compared to 1Q17. It is important to note that Guide Investimentos maintained its high share of this revenues, 93.6% vs. 75.5% in 1Q17, and showed a growth of 103.2% in its gross revenue in the same comparison.

We attained high growth levels on both the Individual and Institutional channels of Guide Investimentos . With the Digital platform, the wealth management area and our independent agent network, the Individual segment reached the outstanding milestone of approximately R$13 billion in assets under custody at the end of 1Q2018, with over 58,000 clients. We started 2018 with the highest quarterly revenue ever reported by the company, 90% higher than the same period last year. At the same time, the Institutional segment had the maturity of the products launched at the end of last year, which both boosted our revenues and increased our market share, as well as having specialized tables recognized in the market as major providers of liquidity for the main players in the market.

Consolidation of Guide’s activities and the resulting expanded coverage also contributed to increasing revenue and fundraising, as well as reaching a prominent position in structured product placement, participating in public offers of fixed income, real estate funds, and also Investment Fund distribution.


Regarding the Bank’s management expenses , personnel expenses grew 2.3% in the quarter and 1.8% in the year, basically due to expenses related to staff adjustments. The number of employees fell 13.9% year-over-year. Administrative expenses, in turn, increased 4.5% over 4Q17 and 7.7% year-over-year, mostly due to legal expenses related to debt collection and storage costs for coffee operations (expense for cash & carry coffee operations that contribute incremental benefits as a return). We should also highlight the continued commitment by Bank’s management in cutting costs. Personnel expenses for Guide Investimentos climbed 3.8% in the quarterly comparison and advanced 22.1% year-over-year, administrative expenditures fell 6.0% in the quarter and increased 33.7% in 12 months.

The quarter’s Net Result was negative in R$69.6 million, reflecting (i) the high expenditure with ALL due to the conservative standing of the bank's management and the impact of the current economic recession in our portfolio, (ii) the voluntary reduction policy of the credit portfolio, and (iii) the cost of cash carryover and assets without financial compensation.

¹ Gross income from services rendered from commissions paid to independent agents, classified under administrative expenses.


Macroeconomic Scenario

On the domestic front, the first quarter of 2018 was once again shaken by political instability. The social security reform was not approved in early 2018 as the government expected and will most likely become a sensitive issue in the October elections.

Public finances are not a cause for much concern in the short term. The government is expected to reach all three targets this year: the primary deficit target, spending cap and the Golden Rule. However, some fiscal measures are essential in the medium and long term, especially the social security reform, in order to regain balance in public finances. The need to pass fiscal reforms heightens the focus on October elections, since the next President of the Republic will be tasked with passing these measures in Congress. Many doubts remain as to who the candidates will be and their positions on fiscal balance. This uncertainty may already be restricting a stronger recovery of investments, but its major impact on the economy should be felt in the coming months.

Indicators for early 2018 show that the economy continues to follow a trend of recovery, although slower than expected. Industrial production in 1Q18 was stable compared to the previous quarter, after growing 1.7% between October and December of last year. Although the result was below expectations, capital goods continue to show strong performance, along with the production of durable consumer goods. Trade results for the beginning of the year also recorded frustrating results. Both restricted and broad sales were practically stable between January and February.

Given the more uncertain recovery scenario for the economy, the job market also showed signs of weakness. The unemployment rate rose to 13.1% in 1Q18, compared to 11.8% in the previous quarter, according to the National Sample Survey of Households (PNAD). Increased unemployment early in the year was already expected for seasonal reasons, but the upsurge was even stronger. Average income performed below expectations as well, attaining an annual growth rate of 0.3% in the three months ending in March, slowing when compared to the previous quarter’s growth of 1.2%.

Despite the weaker economic indexes early in the year and the worsening job market, the outlook for the economy remains positive. According to the Focus Report, the GDP is expected to grow 2.84% in 2018 and 3.00% in 2019.

Regarding inflation, the IPCA closed the first quarter with an accumulated gain of 2.68%, below the previous quarter’s result (2.95%) and the target floor (3.0%). According to the Focus Report, inflation forecasts stand at 3.54% in 2018 and 4.08% in 2019. As a result of this more benign inflation scenario, the Central Bank of Brazil continued the downward cycle for the base interest rate with two 25-point cuts. As a result, the SELIC reached 6.50% p.a. at the end of 1Q18. According to the Focus Report, economists expect the SELIC rate to end 2018 at 6.25% p.a.

Regarding the Brazilian National Financial System, the total stock of credit operations reached BRL 3.081 trillion in March, falling 0.32% compared to the previous quarter. The average of concessions fell 6.83% in the quarter, with a 13.75% drop in corporations and 0.34% in individuals. The average loan term fell to 117.6 months in March 2018 from 119.0 months in December 2017. Credit as a share of the GDP ended this year’s first quarter at 46.6%, below the 47.1% registered in the previous quarter.

In free credit operations, default by individuals fell to 5.04% in March 2018, compared to the 5.25% in December 2017. The corporate default rate also receded to 4.44% at the end of 1Q18, compared to 4.54% in the previous quarter. The drop in interest rates, recovered employment and increased incomes are expected to prompt a gradual improvement to the indicators.

In the external scenario, the U.S. economy continues to show clear signs of recovery. That is why the U.S. Federal Reserve (FED) increased the interest rate by 0.25% in March to a range of 1.50%-1.75%. The European economy showed a slight slowing, while inflation remains below the target. However, the European Central Bank (ECB) expects economic performance to improve in the coming months and impact prices, which drove its indication that the monetary stimulus should be reduced as well. Finally, the Chinese economy continues to sustain growth and commodities prices.


Macroeconomic Data 1Q18 4Q17 1Q17 2017 2018

Real GBP Growth (Q/Previous Q) 0.5% (e) 0.10% 1.44% 0.93% 2.84% (e)

Inflation (IPCA - IBGE) – quarterly change 0.70% 1.14% 0.96% 0.96% 0.70%

Inflation (IPCA - IBGE) – annual change 2.68% 2.95% 4.57% 2.95% 3.54% (e)

FX (US$/R$) – quarterly change 0.48% 4.42% -2.78% 1.50% -0.24% (e)

Interest Rate (Selic) 6.5% 7.0% 12.25% 7.0% 6.25% (e)

e= expected


Key Indicators

Financial Intermediation Result before ALL managerial expenses totaled R$1.3 million compared to -R$2.7 million in 4Q17, this decline still impacted by (i) the voluntary reduction policy of the credit portfolio, (ii) the cost of cash carryover and assets without financial compensation.

Results 1 1Q18 4Q17 1Q18/4Q17 1Q17 1Q18/1Q17

Revenues from Loan Operations & Agro Bonds 2 14.8 21.3 -30.5% 57.7 -74.4%

Revenues Securities (w/o Agro Bonds), Derivatives & FX 3 29.6 25.9 14.0% 55.1 -46.4%

Financial Intermediation Expenses (w/o ALL) 4 (43.0) (49.9) -13.8% (104.0) -58.6%

Result from Financial Intermediation before ALL 1.3 (2.7) 148.9% 8.9 -85.2%

Managerial ALL Expense 5 (67.1) (33.9) 97.9% (10.1) n.c.

Result from Financial Intermediation (65.8) (36.6) 79.7% (1.2) n.c.

Revenues from Services Rendered and Tariffs 6 24.5 24.1 1.7% 17.0 44.0%

Personnel and Administrative Expenses (44.1) (44.2) -0.4% (39.3) 12.1%

Personnel Expenses without Guide (13.4) (13.1) 2.3% (13.2) 1.8%

Personnel Expenses Guide (9.3) (8.9) 3.8% (7.6) 22.1%

Administrative Expenses without Guide 7 (11.5) (11.0) 4.5% (10.7) 7.7%

Administrative Expenses Guide 7 (9.9) (11.2) -11.6% (7.9) 25.8%

Other operating income and expenses 8 (5.0) (9.9) -49.7% (1.1) n.c.

Foreign investments hedge effect 0.0 0.0 n.c. 0.0 n.c.

Recurring Operating Result (90.3) (66.6) 35.5% (24.6) 266.7%

Non-Recurring Operating Expenses 0.0 (0.7) n.c. 0.0 n.c.

Effect of discontinuance of hedge accounting 0.0 0.0 n.c. 0.0 n.c.

Other non-Recurring Operating Expenses 0.0 (0.7) n.c. 0.0 n.c.

Operating Result (90.3) (67.4) 34.1% (24.6) 266.7%

Non-operating Profit (2.3) (1.4) 63.8% (1.1) 103.7%

Foreign investments hedge effect 0.0 0.0 n.c. 0.0 n.c.

Income tax and social contribution 27.9 12.4 125.7% (1.7) n.c.

Statutory contributions & Profit sharing (4.4) (5.2) -15.5% (4.2) 6.3%

Net Profit (Loss) (69.1) (61.6) 12.1% (31.6) 118.8%

1 The financial and operating information presented in this report are based on consolidated financials prepared in millions of Real (local currency), according to Brazilian Central Bank rules, except where otherwise stated. Since 2Q14, Banco BI&P has presented its results through the Managerial Income Statement, which is based on reclassifications of accounting Income Statement and is provided to help analyses.

2 Excluds the effects of (i) recoveries of loans written off, and (ii) discounts granted upon settlement of loans in the period. (iii) the credit risk amount related to securities operations.

3 Excludes the effect of discontinuance of the designation of hedge accounting in 2Q12. This effect is included in Non-Recurring Operating Expenses. 4 Includes expenses related to financial intermediation, such as (i) expenses related to the joint venture C&BI, (ii) commission paid to the distributors of our funding

products, especially LCAs and LCIs, which are classified under administrative expenses. Excludes the accounting heading Result of Sale/Transfer of Financial Assets resulting from the shareholders’ agreement at the time of acquisition of Banco Intercap. This account is considered while calculating the managerial expense with allowance for loan losses.

5 Managerial expense with allowance for loan losses is calculated by adding to the expense with allowance for loan losses, the effects of (i) the recovery of loans written off, (ii) discounts granted upon settlement of loans in the period, (iii) expense with allowance for guarantees issued (LGs & L/Cs), started in December 2014, (iv) the credit risk amount assigned to securities operations and (v) the impacts of other credit assignments in the Income Statement in the accounting heading Result of Sale/Transfer of Financial Assets. In 2Q14 and 2Q15 it also excludes the impacts of the shareholders’ agreement at the time of acquisition of Banco Intercap in the Income Statement: (i) from the accounting heading Result of Sale/Transfer of Financial Assets; and (ii) from other operating expenses and income.

6 Includes expenses booked under administrative expenses related to income from services rendered. 7 Excludes (i) non-recurring operating expenses, (ii) expenses related to financial intermediation, and (iii) expenses related to income from services rendered. 8 Result of the sum of (i) Other operating income and expenses, (ii) taxes and (iii) Result from affiliated companies. Excludes other operating income and

expenses resulting from the shareholders’ agreement at the time of acquisition of Banco Intercap.

n.c. = not comparable (percentage above 300% or below -300%, or number divided by zero).


Key Indicators

The consolidated financial and operational information presented in this report is based on BACEN accounting practices and expressed in millions of Brazilian reais, except when otherwise indicated.

Assets & Liabilities 1Q18 4Q17 1Q18/4Q17 1Q17 1Q18/1Q17

Loan Portfolio 652.6 773.8 -15.7% 1,125.5 -42.0%

Expanded Loan Portfolio 1 1,040.7 1,239.0 -16.0% 1,899.6 -45.2%

Cash & Short Term Investments 498.7 331.3 50.5% 976.9 -49.0%

Securities and Derivatives 703.5 775.2 -9.2% 1,017.5 -30.9%

Securities w/o Agro Sec. & Private Credit Bonds 2 584.3 584.6 -0.1% 571.0 2.3%

Total Assets 2,703.7 2,655.2 1.8% 3,907.7 -30.8%

Total Deposits 2,061.5 2,080.3 -0.9% 3,060.5 -32.6%

Open Market 145.5 46.4 213.7% 129.7 12.2%

Foreign Borrowings 0.0 0.0 n.c. 0.0 n.c.

Domestic Onlendings 11.0 13.5 -18.4% 26.4 -58.2%

Shareholders’ Equity 202.9 272.0 -25.4% 463.4 -56.2%

Performance 1Q18 4Q17 1Q18/4Q17 1Q17 1Q18/1Q17

Free Cash 834.9 786.1 6.2% 1,198.7 -30.3%

NPL 90 days value3 47.7 149.1 -68.5% 55.2 -13.6%

Coverage Index – NPL 903 89.9% 78.9% 11.0 p.p 94.4% -4.5 p.p.

Basel Index4 -6.9% 2.3% -9.2 p.p. 10.9% -17.8 p.p.

Net Interest Margin with Clients 0.00% 3.85% -3.85 p.p. 4.74% -4.74 p.p.

Efficiency Ratio 216.1% 356.5% -140.4 p.p. 172.1% 44.0 p.p.

Other Information 1Q18 4Q17 1Q18/4Q17 1Q17 1Q18/1Q17

Number of Employees 363 379 -4.2% 359 1.1%

Banco BI&P employees 173 189 -8.5% 201 -13.9%

Guide Investimentos and Serglobal employees 190 190 0.0% 158 20.3%

1 Including Guarantees issued, Private Credit Bonds (PNs and Debentures) and Agro Securities (Agro Credit Rights Certificates (CDCA) and CPR).

2 Excluding Agro Securities (CPRs and Agro Credit Rights Certificates (CDCA)) and Private Credit Bonds (PNs and debentures) for trading. 3 Adjusted for the extraordinary, nonrecurring event involving Ceagro Agrícola Ltda.. 4 If considered the transaction, the Basel Index of March 31 would be higher than the minimum percentage required by Central Bank regulations. The transaction is in final stage of approval by the Central Bank.

n.c. = not comparable (percentage above 300% or below -300%, or number divided by zero).


Operating Performance

Financial Intermediation Result before ALL managerial expenses totaled R$1.3 million compared to -R$2.7 million in 4Q17, this decline still impacted by (i) the voluntary reduction policy of the credit portfolio, (ii) the cost of cash carryover and assets without financial compensation.

Profitability

Financial Intermediation 1Q18 4Q17 1Q18/4Q17 1Q17 1Q18/1Q17

Financial Intermediation Revenues 44.3 47.2 -6.1% 112.8 -60.7%

Loan Operations and Agro Bonds 14.8 21.3 -30.5% 57.7 -74.4%

Loans, Discount Receivables and Agro Bonds 9.6 14.9 -35.3% 44.5 -78.4%

Financing 5.2 6.4 -19.3% 13.2 -60.9%

Others 0.0 0.0 n.c. 0.0 n.c.

Securities (w/o Agro Bonds) 23.9 20.5 16.1% 43.4 -45.0%

Derivatives 1.2 0.6 103.6% 7.2 -82.7%

FX Operations Result 4.5 4.8 -6.6% 4.6 -2.8%

Financial Intermediation Expenses (43.0) (49.9) -13.8% (104.0) -58.6%

Money Market Funding (39.8) (46.7) -14.7% (101.9) -60.9%

Time Deposits (29.3) (34.1) -14.1% (62.8) -53.3%

Repurchase Transactions (2.1) (1.7) 21.0% (4.9) -56.7%

Interbank Deposits (0.5) (0.4) 10.3% (4.9) -90.1%

Agro Bonds (LCA), Real Estate Notes (LCI) & Bank Notes (LF) (7.5) (10.0) -24.8% (28.7) -74.0%

Others (0.4) (0.4) -3.5% (0.6) -37.6%

Loans, Assignments & Onlending (3.2) (3.2) 0.0% (2.0) 61.4%

Foreign Borrowings (3.1) (3.0) 1.1% (1.6) 87.1%

Domestic Borrowings & Onlending (0.2) (0.2) -14.9% (0.4) -52.2%

Sales operations/transfer of financial assets 0.0 (0.0) n.c. (0.1) n.c.

Gross Result from Financial Intermediation before A LL 1.3 (2.7) 148.9% 8.9 -85.2%

Managerial ALL Expense (67.1) (33.9) 97.9% (10.1) n.c.

Gross Result from Financial Intermediation (65.8) (36.6) 79.7% (1.2) n.c.

Net Interest Margin (NIM)

Managerial interest margin with clients was 3.57% in 1Q18.

Net Interest Margin 1Q18 4Q17 1Q18/4Q17 1Q17 1Q18/1Q17

A. Result from Financial Intermediation before ALL 1.3 (2.7) 148.9% 8.9 -85.2%

B. Average Interest bearing Assets 1.769.4 1.947.4 -9.1% 3.030.6 -41.6%

Adjustment for non-remunerated average assets 1 (120.2) (87.5) 37.4% (156.3) -23.0%

B.a. Adjusted Average Interest bearing Assets 1.649.2 1.859.9 -11.3% 2.874.3 -42.6%

Net Interest Margin (Aa/Ba) 0.3% -0.6% 0.9 p.p. 1.2% -0.9 p.p.

Managerial NIM with Clients 2 3.57% 3.85% -0.3 p.p. 4.74% -1.2 p.p.

1 Repos with equivalent volumes, tenors and rates both in assets and liabilities.

² Adjusted for the extraordinary, nonrecurring event involving Ceagro Agrícola Ltda..


Efficiency

Throughout 1Q18, we maintained our strict expenditure control, both personnel and administrative expenses. To this end, the Bank’s personnel expenses was practically stable, both in comparison with 4Q17 and 1Q17, proving the effectiveness of the efforts made. Administrative expenses, in turn, increased by 4.5% in relation to 4Q17 and 7.7% in relation to 1Q17, this increase is directly related to legal expenses related to the collection of credits and storage of sacks of coffee operations (expenses related to coffee cash & carry operations that present an incremental revenue as counterpart). It should be stressed that Financial Intermediation Result was impacted by the events detailed in the Operational Performance section.

Efficiency Ratio 1Q18 4Q17 1Q18/4Q17 1Q17 1Q18/1Q17

Personnel Expenses 22.7 22.0 2.9% 20.7 9.2%

Contributions and Profit-sharing 4.4 5.2 -15.5% 4.2 6.3%

Administrative Expenses 21.4 22.2 -3.6% 18.6 15.4%

Taxes 3.7 3.7 1.4% 2.9 29.2%

A. Total Operating Expenses 52.2 53.2 -1.7% 46.4 12.7%

Gross Income Financial Intermediation (w/o ALL) 1.3 (2.7) n.c. 8.9 -130.3%

Income from Services Rendered 24.5 24.1 1.7% 17.0 44.0%

Other Net Operating Income * (1.7) (6.5) -74.1% 1.0 -268.4%

B. Total Operating Income 24.2 14.9 62.1% 26.9 1.4%

Efficiency Ratio 216.1% 356.5% -140.3 p.p. 172.1% 44.0 p.p.

* Net of other operating expenses to eliminate the effects of the revenues and costs of the BI&P Cereais operation.

Expanded Credit Portfolio

The bank’s Expanded Credit Portfolio ended 1Q18 at R$1.0 billion, an intentional downsizing of 45.2% in twelve months.

Expanded Credit Portfolio by Product Group 1Q18 4Q17 1Q18/4Q17 1Q17 1Q18/1Q17

Loans & Financing in Real 556.8 666.2 -16.4% 992.7 -43.9%

Assignment of Receivables Originated by our Customers 25.1 25.5 -1.5% 38.8 -35.3%

Trade Finance (ACC/ACE/IMPFIN) 45.8 50.5 -9.3% 74.8 -38.8%

Other 1 24.9 31.6 -21.2% 19.3 28.9%

Credit Portfolio 652.6 773.8 -15.7% 1,125.5 -42.0%

Guarantees Issued (LGs & L/Cs) 154.9 161.9 -4.4% 218.0 -29.0%

Agro Bonds (Securities: CPRs & CDA/WA; Credit: CDCAs) 82.7 153.9 -46.3% 409.3 -79.8%

Private Credit Bonds (Securities: Debentures) 36.6 36.7 -0.3% 37.2 -1.8%

Funds in Creditor Rights projects (FIDC) 2 114.1 112.8 1.1% 109.6 4.1%

Expanded Credit Portfolio 1,040.7 1,239.0 -16.0% 1,899.6 -45.2%

1 The Other segment basically consists of Consumer Credit operations for Used Vehicles and financing of non-operating assets.

² FIDC: corresponds to the operation that was not being recorded in the credit portfolio until 2Q16.


The Agro segment continues to account for a large part of the expanded credit portfolio, since it closed 48.5% of the total in 1Q18, against 49.7% in 1Q17, while the other sectors closed the same period representing 51.5% of the expanded loan portfolio, compared to 50.3% in 1Q17. Reflecting the aforementioned strategy of strengthening our franchise in the agribusiness sector.

Expanded Credit Portfolio by Segment

Expanded Credit Portfolio by Client Concentration

* The Other segment basically consists of Consumer Credit operations for Used Vehicles and financing of non-operating asset.

In 1Q18, the agro bonds portfolio, classified under marketable securities, totaled R$125.1 million, -37.8% in the quarter and -72.7% in 12 months. The decrease in 12 months is mainly due to the intentional downsizing of the loan portfolio.

Agricultural Bonds 1Q18 4Q17 1Q18/4Q17 1Q17 1Q18/1Q17

Booked under Securities 82.7 153.9 -46.3% 409.3 -79.8%

Warrants - CDA/WA 0.5 8.5 -94.5% 18.8 -97.5%

Agro Product Certificate - CPR 82.2 145.4 -43.5% 390.6 -79.0%

Booked under Credit Portfolio - Loans & Financing 4 2.4 47.2 -10.1% 48.4 -12.3%

Agro Credit Rights Certificate - CDCA 42.4 47.2 -10.1% 48.4 -12.3%

Agricultural Bonds 125.1 201.1 -37.8% 457.7 -72.7%


by Region


by Economic Sector

50% 48% 46% 48% 51%

50% 52% 54% 52% 49%

Mar 17 Jun 17 Sep 17 Dec 17 Mar 18

Other sectors Agro Portfolio

26.2%

34.8%

41.4%

46.3%

48.9%

46.7%

21.5%

13.0%

8.7%

6.0%

3.3%

3.2%

Mar 17

Dec 17

Mar 18

top 10 11 - 60 largest 61 - 160 largest Other

North0%

Northeast5%

Midwest31%

Southeast60%

South4%

4.8%

1.4%

2.6%

2.7%

2.8%

3.1%

4.1%

5.3%

6.0%

7.3%

12.9%

13.5%

33.5%

Other industries (% lower than 1.0%)

Automotive

Machinery and Equipments

Wood & Furniture

Individuals

Financial Activities

Livestock

Power Generation & Distribution

Food & Beverage

Textile, Leather and Apparel

Ethanol & Sugar

Real Estate

Agriculture


Quality of Expanded Credit Portfolio

During the course of 1Q18 we will continue to operate in specific niches of the credit market, with a strong focus on agribusiness and on operations that generate cross selling with investment banking transactions. Even though we are maintaining our conservative approach in relation to our credit policy, with the reduction of the portfolio in the higher risk segment in order to reduce payment delays and defaults, we plan to resume the expansion of our loan portfolio in the coming quarters as we believe in an improvement of the Brazilian macroeconomic environment and the continued strength of the agribusiness sector, always giving priority to good quality and short duration loans.

Expanded Credit Portfolio by Rating

The default rate on loans overdue more than 90 days (NPL 90 days), totaled R$47.8 million in 1Q18, excluding operations related to Ceagro Agrícola case, as against R$149.0 million in 4Q17, with provisions covering 90% of this balance . The increase in both quarterly and annual comparison is due to the stricter renegotiation processes, given the worsening macroeconomic situation and the Bank’s conservative approach.

Funding

Funding totaled R$2.1 billion in March 2018, -1.0% in the quarter and -32.9% in twelve months, in line with the intentional reduction of our portfolio. Our cash position remained comfortable, thanks to our strategy of maintaining a high level of liquidity and diversifying our funding sources in recent years and by the end of 1Q18, we had a depositor base of more than 30,400 members, compared to 27,800 at the end of 1Q17, an increase of 9%.

Funding 1Q18 4Q17 1Q18/4Q17 1Q17 1Q18/1Q17

Total Deposits 2,061.5 2,080.3 -0.9% 3,060.5 -32.6%

Time Deposits 1,482.0 1,440.1 2.9% 1,484.2 -0.1%

Insured Time Deposits (DPGE) 74.2 72.9 1.7% 437.0 -83.0%

DPGE I 66.7 65.6 1.7% 387.6 -82.8%

DPGE II 7.4 7.3 1.6% 49.4 -85.0%

Agro Notes (LCA) 409.2 464.1 -11.8% 857.6 -52.3%

Real Estate Notes (LCI) 47.7 52.7 -9.5% 86.8 -45.1%

Bank Notes (LF) 5.4 5.3 2.5% 20.5 -73.4%

Interbank Deposits 29.0 28.5 1.7% 160.8 -82.0%

Demand Deposits 14.0 16.7 -15.9% 13.6 3.4%

Domestic Onlending 11.0 13.5 -18.4% 26.4 -58.2%

Foreign Borrowings 0.0 0.0 n.c. 0.0 n.c.

Trade Finance 0.0 0.0 n.c. 0.0 n.c.

Others 0.0 0.0 n.c. 0.0 n.c.

Total Funding 2,072.6 2,093.8 -1.0% 3,086.9 -32.9%

216

124

350

178

60

3 -

56 54

AA A B C D E F G H

R$

mill

ion

In 1Q18, R$114.0 mm rated between

E-H, with covered ratio of 83.2%.


By Type By Investor By Maturity

Average term of deposits is 716 days from issuance (630 days in March 2017) and 402 days from maturity (279 days in March 2017).

Average Term in days

Type of Deposit from issuance to maturity 1

Interbank Deposit 276 93

Time Deposits 786 486 Time Deposits with Special Guarantee (DPGE) 681 81

Agro Notes (LCA) 539 219

Real Estate Letters of Credit (LCI) 337 177

Bank Notes (LF) 1.857 27

Portfolio of Deposits 2 716 402 1 From March 31, 2018. | 2 Volume-weighted average.

Free Cash On March 31, 2018 free cash totaled R$834.9 million, increasing by 6.2% in the quarter and decreasing by 30.3% from March 31, 2017, corresponding however to 40.5% of total deposits, versus 39.2% at the end of 1Q17 and 4.1 time shareholders' equity. The calculation considers cash, short-term interbank investments and securities, less funds raised in the open market and debt securities classified under marketable securities, comprising rural product certificates (CPR), agribusiness deposit certificates and warrants (CDA/WA), debentures and promissory notes (NP).

Capital Adequacy

The Basel Accord provides for a minimum equity percentage that all banks must abide, weighted by the risk incurred during operations. For this purpose, the Brazilian Central Bank determined that all banks installed in the country must comply with a required minimum equity percentage of 8.625%, in force for the year of 2018, calculated based on the rules established by the Basel Accord III, thus ensuring greater safety for the Brazilian financial system despite fluctuations in the economic conditions. In addition, the Brazilian Central Bank imposed an Additional Main Capital, which currently corresponds to a percentage of 1.875% of the assets weighted by the risk.

We point out that if considered the conclusion of the Guide's sale to Fosun, the Basel Index of March 31 would be higher than the minimum percentage required by Central Bank regulations. The transaction is in final stage of approval by the Central Bank. In addition, the bank's management is making its best efforts to seek new alternatives to further strengthen its capital base through the recovery of provisioned credits, as well as the inclusion of new partners, both in equity and long-term debt securities.

Basel Index 1Q18 4Q17 1Q18/4Q17 1Q17 1Q18/1Q17

-6.9% 10.9% -17.8 p.p. 11.7% -18.6 p.p.

Time Deposits

71%

DPGE I*3%

Agro Bonds20%

Bank & Real

Estate Notes

3%

BNDES Onlending

1%

Interbank & Demand Deposits

2%

Institutional Investors

20%

Enterprises5%

National Banks

8%

Brokers47%

Individuals18%

Other2%

Demand1%

Up to 90 days20%

91 to 180 days11%

181 to 360 days

18%+360 days50%

1,199

786 835

Mar 17 Dec 17 Mar 18

R$

mill

ion


Risk Ratings

Agency Classification Observation Last Report

RiskBank RiskBank Index: 7.33

Under observation Disclosure: Good 04.20.2018

Capital Markets

Total Shares and Free Float

Number of shares as 12.31.2017

Type Corporate Capital

Controlling Group Management Treasury Free Float %

Common 115,033,148 76,548,441 4,180,476 - 34,304,231 29.8%

Preferred 37,494,103 7,080,684 4,990,807 543,396 24,879,216 66.4%

TOTAL 152,527,251 83,629,125 9,171,283 543,396 59,183,447 38.8%

Stock Option Plan

The following Stock Option Plans, approved for the Company’s executive officers and managers, as well as individuals who provide services to the Company, had the following balances on March 31. 2018:

Stock Option Plan

Date of Approval Grace Period Term for

Exercise Quantity

Granted Exercised Extinct Not Exercised

I Mar 26. 2008 Three years Five years 618,195 - 618,195 -

II Apr 29. 2011 Three years Five years 1,840,584 - 1,840,584 -

III Apr 29. 2011 Five years Seven years 1,850,786 - 151,024 1,699,762

IV Apr 24. 2012 Up to five years Five years 867,425 - 660,999 206,426

5,176,990 - 3,270,802 1,906,188

The aforementioned Stock Options Plans are filed in the IPE system of the Securities and Exchange Commission of Brazil (CVM) and are also available in the Company’s IR website.

Remuneration to Shareholder

During 1Q18 the Bank neither provisioned nor paid interest on equity, calculated based on the Long-Term Interest Rate (TJLP) and towards the minimum dividend for fiscal year 2018. The Board of Directors will, by the end of the year, study the possibility of early payment of interest on equity after considering the results and the tax efficiency of such payment.


Share Performance

The preferred shares of Banco BI&P (IDVL4), listed in the Level 2 Corporate Governance segment of BM&FBovespa. closed the quarter at R$1.01, for market cap of R$153 million including the shares existing on March 2018 and excluding treasury stock. The price of IDVL4 shares dropped 14% in the quarter and 28% in the 12 months ended March 2018. In comparison, the Bovespa Index (Ibovespa) rose 12% in the quarter and 31% in relation to March 2017. At the end of 1Q18, the price/book value (P/BV) ratio was 0.76.

Share Price evolution in the last 12 months

Liquidity and Trading

The preferred shares of BI&P (IDVL4) were traded in 96.7% of the sessions in the quarter and 88.5% of the 244 sessions in the 12 months ended in March 2018. The volume traded on the spot market in the quarter was R$9.6 million. involving 7,211 thousands IDVL4 shares in 4,538 trades. Between the close of 1Q17 and 1Q18 the volume of IDVL4 shares traded on the spot market was R$22.2 million involving around 13.7 million preferred shares in 9,398 trades.

Shareholder Base

Position as 03.31.2018

QTY TYPE OF SHAREHOLDER IDVL3 % IDVL4 % TOTAL %

6 Controlling Group 76,548,441 66.5% 7,080,684 18.9% 83,629,125 54.8%

3 Management 4,180,476 3.6% 4,990,807 13.3% 9,171,283 6.0%

- Treasury - 0.0% 543,396 1.4% 543,396 0.4%

19 National Institutional Investors 1,201,090 1.0% 1,167,481 3.1% 2,368,571 1.6%

5 Foreign Investors 12,190,677 10.6% 17,357,025 46.3% 29,547,702 19.4%

6 Corporates 18 0.0% 418,533 1.1% 418,551 0.3%

812 Individuals 20,912,446 18.2% 5,936,177 15.9% 26,848,623 17.6%

851 TOTAL 115,033,148 100.0% 37,494,103 100.0% 152,527,251 100.0%

Banco Indusval S.A. (Indusval & Partners) and Banco Indusval S.A. and Subsidiaries (Indusval & Partners Consolidated) Management notes to the quarterly information at March 31, 2018 In thousands of reais, unless otherwise stated

1


1 Operations The Banco Indusval S.A., “Bank or Institution”, (a multiple bank) and its subsidiaries operate mainly with commercial, investment and foreign exchange portfolios and other transactions related to securities brokerage and distribution. On May 14, 2014, the Central Bank of Brazil approved the change in the corporate object of Banco Indusval S.A. to a multiple bank, with commercial and investment portfolios. The Institution, a corporation headquartered at Rua Iguatemi, 151, 6.th floor, São Paulo – SP, Brazil, has been listed on the São Paulo Stock Exchange (IDVL 3 and IDVL 4) since July 2007 and has seven regional branches, six of which are located in Brazil's most important commercial centers and one in the Cayman Islands (the Branch). The consolidated quarterly financial information of Banco Indusval S.A. and its subsidiaries (Indusval & Partners Consolidated) were approved by the Board of Directors on May 18, 2018.

2 Quarterly financial information presentation

(a) Basis of presentation The quarterly financial information of the Institution (Indusval & Partners) and the consolidated quarterly financial information of Banco Indusval S.A. and its subsidiaries (Indusval & Partners Consolidated) were prepared in accordance with Brazilian Corporation Law, together with the regulations of the Brazilian Central Bank (BACEN) and the Brazilian Securities Commission (CVM). The consolidated quarterly financial information includes the financial information of the Banco Indusval S.A., its branch abroad and the other subsidiaries: Company Relation Activities % Ownership 03/31/2018 12/31/2017 Guide Investimentos S.A. Corretora de Valores Subsidiary Brokerage of securities.

96.307 96.307

BI&P Comércio de Cereais Ltda. Subsidiary Agricultural securities and operations.

100.000 100.000

BI&P Assessoria e Participações Ltda. Subsidiary Financial advisory and corporate finance.

100.000 100.000

Banco Intercap S.A. Subsidiary Financial institution.

100.000 100.000

Distribuidora Intercap de Títulos e Valores Mobiliários S.A.

Subsidiary Distribution of securities. 100.000 100.000

Guide Consultoria de Negócios Ltda. Subsidiary Provision of advisory and consulting services related to the mediation/intermediation of businesses and securities.

99.950 99.950

Simplific Pavarini Gestão de Patrimônio Ltda. (*)

Subsidiary Management of security portfolios. 99.995

Sertrading S.A. Associated company

Logistics and foreign trade. 13.730 13.730

Gran Partners Negócios Imobiliários S.A. Jointly controlled investment

Acquisition, sale and provision of services relating to receivables from real estate contracts and enterprises and housing finance in general.

50.000 50.000

(*) The company Simplific Pavarini Gestão de Patrimônio Ltda. was sold in January 2018.

For further details on these investments, see note 9(a).


2


(b) Critical judgments and estimates When preparing the consolidated quarterly financial information, estimates and assumptions were used to determine the amounts of certain assets, liabilities, income and expenses in accordance with accounting practices adopted in Brazil. These estimates and assumptions were considered in the measurement of the allowance for loan losses, and provisions for non-operating assets and contingencies, in the determination of the market value of financial instruments, deferred income and social contribution taxes and in the selection of the economic useful lives of certain assets. Actual results may differ from estimates and assumptions adopted.

(i) Determination of the market value of certain financial instruments The market value of financial instruments without an active market or whose prices are not available are calculated through pricing techniques. In these cases, the fair values are estimated through the data of similar instruments or through models. When observable market data is not available, they are estimated based on appropriate assumptions. When pricing techniques are used, they are periodically validated and reviewed in order to maintain their reliability. (ii) Financial assets held to maturity The Institution classifies certain non-derivative financial assets with fixed or determinable payments and fixed maturity as financial assets "held to maturity". This classification requires significant judgment, taking into account the intention and capacity to maintain these investments until maturity. (iii) Impairment of non-financial assets According to CPC (Brazilian Accounting Pronouncements Committee) Pronouncement 01, non-financial assets must also be tested for impairment annually in certain situations. The Bank uses cash flow estimates (amount and term), as well as the appropriate discount rates, to calculate the recoverable value (value in use). (iv) Deferred income tax and social contribution on net income Tax credits are recognized only in relation to temporary differences and tax losses to the extent that it is considered probable that the Bank will generate future taxable income for their offset. The expected realization of tax credits of the Institution is based on the projection of future taxable income and other technical studies. (v) Allowance for loan losses The allowance for loan losses is calculated at an amount sufficient to cover probable losses and considers the rules and instructions of the National Monetary Council (CMN) and the Brazilian Central Bank, associated with assessments made by management in determining the credit risks. The amounts of the allowances are mainly determined taking into account the arrears and the credit risk of each loan transaction. These amounts may differ from the present values of the estimated receipts, as well as from the amounts actually received.


3


(vi) Contingent assets and liabilities and legal obligations (tax and social security) The recognition, measurement and disclosure of contingent assets and liabilities and legal obligations (tax and social security) are made in accordance with the criteria set out in Resolution CMN 3823/09, which approved CPC 25 - Provisions, Contingent Assets and Contingent Liabilities and Circular Letter 3429/10 of the Brazilian Central Bank. The amounts recorded or disclosed in the notes are based on the best estimates, including the probability of occurrence of the matter at issue. These facts and amounts may differ from the actual future events.

(c) Process of Convergence with International Financial Reporting Standards (IFRS)

Law 11638 was enacted on December 28, 2007 for the purpose of adjusting Brazilian corporate legislation to enable the convergence of the accounting practices adopted in Brazil with those issued by the International Accounting Standards Board (IASB). As part of the process of convergence with international accounting standards, certain rules and interpretations were issued by the Brazilian Accounting Pronouncements Committee (CPC), which will be applicable to financial institutions only after approval by the Brazilian Central Bank. The accounting standards which have already been approved are the following:

• Resolution 3566/08 – Impairment of Assets (CPC 01(R1));

• Resolution 3604/08 – Statement of Cash Flows (CPC 03(R2));

• Resolution 3750/09 – Related-Party Disclosures (CPC 05(R1));

• Resolution 3823/09 – Provisions, Contingent Liabilities and Contingent Assets (CPC 25);

• Resolution 3973/11 – Subsequent Events (CPC 24);

• Resolution 3989/11 – Share-Based Compensation (CPC 10(R1));

• Resolution 4007/11 – Accounting Policies, Change in Estimates and Correction of Errors (CPC 23)

• Resolution 4144/12 – Conceptual Framework for the Preparation and Presentation of the Accounting-Financial Report (Basic Conceptual Standard (R1)), except in matters that do not conflict with the provisions of BACEN;

• Resolution 4424/15 – Employee benefits (CPC 33 (R1)). Required for fiscal years beginning after January 1, 2016;

• Resolution 4524/16 – The Effects of Changes in Foreign Exchange Rates (CPC 02(R2));

• Resolution 4534/16 – Intangible Assets (CPC 04(R1)); and

• Resolution 4535/16 – Property and equipment (CPC 27). At present, it is not practicable to estimate when Brazilian Central Bank will approve the other CPC accounting standards or whether their application to the financial statements will be retrospective or solely effective for future periods. Consequently, it is not yet possible to estimate the accounting effects of these standards on the financial statements of Institution.

(d) Consolidated quarterly financial information The consolidated quarterly financial information comprises the quarterly financial information of Banco Indusval S.A., its foreign branch and the subsidiaries: Guide Investimentos S.A. Corretora de Valores (Guide Investimentos), Banco Intercap S.A. (Intercap), Distribuidora Intercap de Títulos e Valores Mobiliários S.A. (Intercap DTVM), BI&P Comércio de Cereais Ltda. (BI&P Cereais), BI&P Assessoria e Participações Ltda. (BI&P Assessoria) and Guide Consultoria de Negócios Ltda. (Guide Consultoria).


4


The Bank's investments in the subsidiaries, as well as the assets and liabilities, income and expenses and the unrealized profit or loss of intercompany transactions, were eliminated on consolidation. The Cayman Branch was authorized to operate by the Brazilian Central Bank on March 5, 2008 and, at March 31, 2018, its total assets amounted to R$ 71,293 (R$ 118,390 at December 31, 2017), the equity was R$ 22,603 (R$ 72,116 at December 31, 2017) and the loss was R$ (90) in the first quarter of 2018 (R$ 753 in the first quarter of 2017).

3 Significant accounting practices The main accounting practices applied in the preparation of the quarterly financial information are defined bellow. These practices were applied consistently in the periods presented, unless stated otherwise.

(a) Results of operations The results of operations are recorded on the accrual basis of accounting, which establishes that income and expenses must be recorded in the period in which they occurred, always simultaneously when correlated, independent of their receipt or payment.

(b) Cash and cash equivalents

Cash and cash equivalents comprise cash in local and foreign currency, investments in the open market (except for financed positions) and investments in interbank deposits (except for rural Interbank Deposit Certificates (CDI)), with maturities at the original investment date equal to or less than 90 days and which present an immaterial risk of change in fair value. These are used by the Bank to manage its short-term commitments.

(c) Short-term interbank investments Short-term interbank investments are recorded at cost plus income accrued up to the balance sheet date, less a provision for loss, when applicable.

(d) Marketable securities and derivative financial instruments Marketable securities are valued and classified as follows:

• Trading securities - securities acquired to be traded on a frequent and active basis, adjusted to market value with contra-entry to income for the period.

• Securities available for sale - securities which are neither trading securities nor securities held to maturity, adjusted to market value with contra-entry to a specific equity account, net of tax effects.

• Securities held to maturity - securities which management acquires with the intention and financial ability to hold up to maturity, recorded at acquisition cost plus related income with contra-entry to income for the period.


5


As established by BACEN Circular 3068/01, securities classified for trading purposes are presented in the balance sheet in current assets regardless of their maturity date. Derivative financial instruments are classified by management at the inception of the transaction, according to their intended use. The derivative financial instruments designated for hedging purposes are used to protect exposures to risk or to modify the characteristics of financial assets and liabilities and are recorded at market value, with the corresponding valuations or devaluations recognized directly in income for the period.

(e) Loan operations and other receivables (operations with loan characteristics) Loan operations, in their various types, are recorded at present value, including income accrued up to the balance sheet date when at floating interest rates, and net of unearned income based on the terms of the transactions, when at fixed interest rates. The restatement of overdue loans is recorded as income from loans up to the 60th day, and as unearned income as from the 61st day. Loans in arrears classified as level "H" are held in this classification for six months, after which they are written off against the existing allowance for loan losses and controlled, for up to five years, in memorandum accounts and no longer presented in the balance sheet. Renegotiated loans are held at the same level at which they were previously classified, Renegotiations of loans that had already been written off against the allowance for loan losses and which were recorded in memorandum accounts are classified as level "H", and any gains on renegotiation are only recognized when actually received. The allowance for loan losses is calculated on a case by case basis, based on management's analysis of the loans in order to determine the amount required and takes into consideration the economic environment, past experience and the specific and overall portfolio risks, as well as the rules established by National Monetary Council Resolution 2682/99. The customer risk ratings are established based on a credit score model, without any possibility that the Credit Committee may change the rating. For transaction with terms of more than 36 months, the Bank opted for double counting the past-due periods, as permitted by CMN Resolution 2682/99, to determine the risk level for the transaction. In accordance with National Monetary Council Resolution 3533/08, the information on each of the categories used to classify financial asset sales must be disclosed in the notes to the financial statements (Note 6(g)). These categories are:

• Transactions with substantial transfer of risks and rewards: the asset must be derecognized and the results recognized in the statement of operations at the time of transfer;

• Transactions with substantial retention of risks and rewards: the asset must not be derecognized, but a liability must be recognized. The result is computed over the period of the transaction; and

• Transactions with neither substantial transfer nor retention of risks and rewards must be evaluated by the institution which controls the asset.


6


(f) Other assets Comprised mainly of non-operating assets, corresponding to own or unused property, or property received as payment in kind, adjusted to market value through the recording of a provision, in accordance with the rules in force. Non-operating assets with low liquidity may be subject to an independent valuation, and if that is less than the carrying amount, an additional provision is recorded in order to adjust the book value to the realizable value of the asset. Prepaid expenses include the investment of resources whose benefits will occur in future periods.

(g) Investments The investments in subsidiary and associated companies are stated on the equity method of accounting. The other investments are stated at cost.

(h) Property and equipment and intangible assets Property and equipment are stated at cost. Depreciation is computed on the straight-line basis at the annual rates of 20% for vehicles and data processing systems and at 10% for other items. The Bank's intangible assets comprise goodwill on the acquisition of investments in corporate entities and also other intangible assets. The goodwill is amortized based on the expected future profitability of the investees. The other intangible assets are recorded at cost and are amortized on the straight-line basis over 10 years for the Agricultural Product Bond (CPR) business. In Guide Investimentos the development of the electronic platform for distribution and trading of securities is amortized over a period of 7 years based on the related estimated profitability and the other intangible assets are amortized on the straight-line basis; for further details see Note 9(c).

(i) Interbank and time deposits, funds obtained in the open market and from financial, agribusiness and real estate letters of credit These deposits and the funds obtained in the open market and from financial, agribusiness and real estate letters of credit are stated at their corresponding contractual amounts plus accrued charges, in proportion to the time elapsed from the day on which they were contracted.

(j) Borrowings and onlendings Borrowings and onlendings are stated at present value, including the charges incurred up to the balance sheet date and restated at the rates in effect on the reporting dates.


7


(k) Income tax and social contribution (assets and liabilities) Deferred income tax and social contribution, calculated on temporary differences, are recorded in "Other receivables - Sundry". Deferred tax assets on temporary differences are realized upon the use and/or reversal of the corresponding provisions on which they were recorded. The provision for income tax was recorded at the rate of 15% on taxable income, plus an additional 10%, and the social contribution was recorded at 15% up to August 2015. From September 2015, the rate was 20% according to Law 13169/15, and this rate will remain up to 2018, returning to 15 % in January 2019.

(l) Contingent assets and liabilities and legal obligations - taxes and social security contributions These are measured, recognized and disclosed in accordance with the criteria established by Circular Letter 3429/10, CVM Decision 594/09 and ratified by BACEN Resolution 3823/09, (CPC 25 - Provisions, Contingent Liabilities and Contingent Assets).

(i) Contingent assets and liabilities These comprise potential rights and obligations arising from past events, the occurrence of which depends on future events.

• Contingent assets: are not recorded other than when there is evidence which assures a high degree of confidence that they will be realized, normally through a final and unappealable court decision, and the confirmation of recoverability through receipt or offset against another liability.

• Contingent liabilities: arise mainly from civil, labor and tax lawsuits, which are inherent to the normal course of business, filed at the judicial and administrative levels by third parties, former employees and public bodies, as well as from other risks. The evaluation of these contingencies is carried out by legal advisors on a conservative basis and considers the probability that financial resources will be required to settle the obligations and that their amounts can be reliably estimated. The contingencies are classified as probable, for which provisions are recorded; as possible, which are disclosed but for which no provisions are recorded; and as remote, which require neither provisions nor disclosure. The contingency amounts are calculated using models and criteria which permit adequate estimates; despite the inherent uncertainty regarding terms and amounts.

(ii) Legal obligations - tax and social security These are tax liabilities, the legality or constitutionality of which is being contested in court, and which are recorded at the full amount in dispute.

(m) Impairment of non-financial assets

According to CPC 01, the Banco Indusval S.A. and its subsidiaries review the values of non-financial assets annually, except other assets and deferred tax assets to determine whether there is any indication of impairment loss. This is recognized in the statement of operations for the period if the carrying amount of the asset exceeds its recoverable amount.


8


The balances of goodwill arising from the acquisition of businesses and the intangible assets with indefinite useful life are tested for impairment at least annually, regardless of whether there is any indication of impairment. Property and equipment, investments in subsidiaries, associates and joint ventures and other intangible assets are tested only if there is objective evidence of impairment. No impairment losses were identified for the first quarter of 2018 and in the first quarter of 2017.

(n) Share-based remuneration The Bank provides share-based remuneration plans, under which it awards stock options as consideration for employee services. The fair value of the employee services received is recognized as an expense and the corresponding grant of shares in a specific equity account, based on the fair value of the options granted, excluding the effects of any vesting conditions based on the service and performance which are not market variables. These are included in the assumptions regarding the number of options expected to vest. The total amount of the expense is recognized during the vesting period (the period over which the specific vesting conditions should be met). At the reporting date, the Institution reviews the estimated number of options expected to vest based on the vesting conditions which are not market variables.

(o) Deferred income This consists of commissions for sureties issued, which were received in cash and which will be appropriated on the straight-line basis to income up to the due date, in the event the specified debtor fulfills its corresponding contractual obligation (i.e. does not default). If the debtor defaults, the Bank immediately recognizes the balance accumulated in deferred income as income for the period.

4 Cash and Cash Equivalents and Short-Term Interbank Investments

(a) Cash and cash equivalents Indusval & Partners Indusval & Partners Consolidated

03/31/2018 12/31/2017 03/31/2018 12/31/2017

Cash 18,150 8,557 19,742 9,198Short-term interbank investments (cash equivalents) 329,914 267,656 337,201 284,721 Cash and cash equivalents 348,064 276,213 356,943 293,919


9


(b) Short-term interbank investments Indusval & Partners Consolidated 03/31/2018 12/31/2017

Open Market Investments 450,050 244,031

Own portfolio position 337,139 235,029 Treasury Bills (Selic) 20,000 Treasury Bills (Prefixed) 129,016 137,517 Treasury Bills (IPCA) 188,123 97,512 Third Party Portfolio position 112,911 9,002

Treasury Bills (Prefixed) 1,000 2,501 Treasury Bills (IPCA) 111,911 6,501 Interbank Deposits 28,860 78,095

Interbank deposits 28,798 28,404 Rural CDI 28,798 28,404 Foreign currency 62 49,691

478,910 322,126

Current 478,910 322,126

5 Marketable Securities and Derivative Financial Instruments

(a) Valuation, classification and risk management The valuations of fixed income securities and derivative financial instruments are obtained from the markets with greatest liquidity or, in their absence, from correlated markets, including through the interpolation and extrapolation of the terms. The risk management structure, as well as the methodology adopted for calculating capital, are available for consultation on the Bank's website at the following address: http://www.bip.b.br/ir/corporate-governance/risk-management


10


(b) Marketable securities Indusval & Partners Consolidated

03/31/2018 12/31/2017

Amortized cost

Market adjustment

Market/ book value

No maturity

Up to 90 days

91 to 180 days

181 to 360 days

361 to 1080 days

1081 to 1800 days

Over to 1800 days

Market/ book value

Trading Securities 663,677 (3,742) 659,935 142,077 22,538 113,489 76,234 245,152 53,692 6,753 731,620

Treasury Bills (Selic) 431,048 (62) 430,986 75,611 60,425 234,832 53,670 6,448 459,189

Treasury Bills (Prefixed) 3,032 3,032 2,854 146 10 22 426

Treasury Bills (IPCA) 818 36 854 284 273 297 618

Debentures 8 8 8 184

Bank deposit certificates - CDBs 260 260 31 23 45 161 281

Agricultural Product Bonds - CPRs 76,095 (3,725) 72,370 19,653 37,099 15,618 128,471Agribusiness Receivables Certificates -

CRA 9,808 9,808 9,808 16,890

Warrants 463 9 472 472 8,549

Equity securities 2,106 2,106 2,106 18

Investment fund shares (*) 139,971 139,971 139,971 116,927

Bills of exchange 68 68 68 67

Available-for-sale securities 42,689 (154) 42,535 6,974 35,561 41,504

Treasury Bills (IPCA) 6,949 25 6,974 6,974 7,029

Debentures 35,740 (179) 35,561 35,561 34,475

Securities held to maturity 1,013 1,013 1,013 2,016

Debentures 1,013 1,013 1,013 2,016 Total 707,379 (3,896) 703,483 142,077 23,551 120,463 76,234 245,152 89,253 6,753 775,140

Total – 12/31/2017 780,305 (5,165) 775,140 116,945 150,251 19,873 116,033 107,912 259,341 4,785

(*) The Bank has 105.111.079 senior shares of the Investment Fund in Credit Rights Agribusiness Funding I, amounting to R$ 114,052 (December 31, 2017 - R$ 112,802).

(c) Derivative financial instruments

The Bank uses derivative financial instruments, according to its risk management policy, with the objective of hedging risks and mitigating exposure mainly resulting from fluctuations in interest and foreign exchange rates. The derivative instruments used are designed to meet the Banks's needs for managing its overall exposure and to meet its customers' needs for hedging their exposures. The financial derivative transactions are as follows: interest rate swaps, currency swaps, products swaps, index swaps, futures, forwards and options. The derivative financial instruments are presented in the balance sheet at market value, usually based on price quotations or market price quotations for assets or liabilities with similar characteristics. When these are not available, the market values are based on pricing models, discounted cash flow and market operators' quotations. The contracts of traded derivatives are registered at the B3 S.A. - Brasil, Bolsa, Balcão or at the Central System for Custody and Financial Settlement of Securities (CETIP). The transaction amounts are determined based on available information disclosed by B3 S.A. - Brasil, Bolsa, Balcão or by external providers (brokerage firms, banks and others). The Risk Management Area is responsible for the pricing of all derivative financial instruments, using both the mark-to-market (MtM) parameters and the original (curve value) parameters. The market parameters are updated daily in the process of marking the instruments to market value, including the forward structures of interest rates for all the Brazilian indices. The mark-to-market models determine the values of the derivative instruments based on the current market conditions for all the indices, as well


11


as for the sovereign debt securities and Eurobonds of Brazilian companies, and the duration (average term) of the portfolio.

(i) Position by Index Indusval & Partners Consolidated

Assets Liabilities Amounts of contracts recorded

03/31/2018 12/31/2017 03/31/2018 12/31/2017 03/31/2018 12/31/2017

Swap 2 31 394 2,067 41,612 74,873

DI x US$ 3 2,000US$ x DI 2 290 1,760 24,757 53,018Fixed rate x DI 101 307 14,855 19,855Fixed rate x US$ 31 2,000

Forward 184 654 26,300 25,936

Currencies 184 654 26,300 25,936

Futures 378,493 298,747Interest rates 218,427 159,306Currencies 128,545 98,081Financial assets and commodities 31,521 41,360

2 31 578 2,721 446,405 399,556

(ii) Position by terms Indusval & Partners Consolidated

03/31/2018 12/31/2017

Up to 90

days 91 to

180 days 181 to

360 days361 to

1080 days1081 to

1800 daysOver

1800 days Total Total

Reference amount 256,106 64,087 61,647 51,794 12,454 317 446,405 399,556

Swap 29,612 12,000 41,612 74,873Forward 26,300 26,300 25,936Futures 200,194 64,087 49,647 51,794 12,454 317 378,493 298,747

Assets 2 2 31

Swap 2 2 31 Liabilities 527 51 578 2,721

Swap 343 51 394 2,067Forwards 184 184 654

Reference amount – 12/31/2017 218,899 24,974 105,946 38,886 10,229 622 399,556

Assets – 12/31/2017 31 31

Liabilities – 12/31/2017 2,608 92 21 2,721


12


(iii) Guarantees Indusval & Partners Consolidated

03/31/2018

12/31/2017

Clearing of Clearing of

derivatives shares Others Total

Total

Marketable securities 25,769 4,338 44,599 74,706 96,528Sureties 1,933 240 2,173 1,695

Total 27,702 4,578 44,599 76,879 98,223

Total – 12/31/2017 52,741 14,691 30,791 98,223

(d) Custody of portfolio securities The corporate securities comprising the Bank's portfolio are registered at the Central System for Custody and Financial Settlement of Securities (CETIP) under the responsibility of Banco Indusval S.A. The equity securities and derivatives are registered and held under custody in the Bank's own account at B3 S.A. - Brasil, Bolsa, Balcão. Government securities are registered at the Brazilian Central Bank's Special Clearance and Custody System (SELIC).


13


6 Loan Operations - Indusval & Partners Consolidated

(a) Analysis of the loan portfolio by type of operation and allowance for loan losses

03/31/2018 12/31/2017

Levels

Operation AA A B C D E F G H Total Total

Loans, discounted bills and financing 9,575 71,913 139,679 140,194 55,595 3,160 4,433 46,832 471,381 521,219

BNDES/FINAME 6,068 773 107 8 6,956 9,490

Total loan operations 9,575 77,981 140,452 140,194 55,702 3,160 4,433 46,840 478,337 530,709

Advances on foreign exchange contracts 39,850 625 5,301 45,776 50,470

Purchase of receivables (Note 8(a)) 22,102 1,887 1,075 29 25,093 25,486

Financing of sales of non-operating assets (Note 8(a)) 5,560 8,654 3,007 7,637 24,858 31,554

Guarantees honored 4,456

Other credit instruments (Note 8(a)) 26,569 51,933 78,502 131,082

Total credit 49,425 110,735 176,509 142,081 59,784 3,189 56,366 54,477 652,566 773,757

Guarantees provided (Note 19(a)) 154,851 161,892

Total portfolio 49,425 110,735 176,509 142,081 59,784 3,189 56,366 54,477 807,417 935,649

Allowance for loan losses 554 1,765 4,262 5,978 957 39,456 54,477 107,449 151,487

Provision for financial guarantees provided 733 775

Total allowance (*) 554 1,765 4,262 5,978 957 39,456 54,477 108,182 152,262

Total portfolio – 12/31/2017 49,509 129,122 229,019 126,674 104,911 168 287 134,067 935,649

Total allowance – 12/31/2017 646 2,290 3,800 10,491 50 143 134,067 152,262

(*) The allowance for loan losses in the consolidated balance sheet is R$ 122,989 (December 31, 2017 - R$ 158,134), as it includes R$ 15,540 (December 31, 2017 - R$ 6,647) that refers to provision for non-loan credit operations, and R$ 733 (December 31, 2017 - R$ 775) that refers to provision for financial guarantees provided which is recorded in liabilities.

In the first quarter of 2018, an allowance for loan losses was recorded in the total amount of R$ 69,317 (R$ 9,361 in the first quarter of 2017) and a reversal of provision for financial guarantees provided was recorded in the total amount of R$ 42 (reversal of R$ 16 in the first quarter of 2017). The amount of credits written off against the allowance for loan losses was R$ 104,462 in the first quarter of 2018 (R$ 9,014 in the first quarter of 2017) and the amount of loans recovered was R$ 1,363 (R$ 553 in the first quarter of 2017). At March 31, 2018, the portfolio of renegotiated loans amounted to R$ 110,557 (March 31, 2017 - R$ 129,012). These credits have a provision of R$ 24,909 (March 31, 2017 - R$ 24,405). The volume of renegotiations in the first quarter of 2018 was R$ 14 (R$ 80,679 in the first quarter of 2017).


14


(b) Analysis of loan operations by business sector 03/31/2018 12/31/2017

Industry 385,139 388,344 Commerce 130,744 153,114 Financial intermediaries 9 10,030 Other services 83,935 103,040 Individuals 52,739 119,229 652,566 773,757

(c) Analysis of loan operations by index

03/31/2018 12/31/2017 Fixed rate 176,766 241,753 Floating rate (Interbank Deposit Certificate (CDI)) 426,320 472,007 Reference rate (TR)/Basic financial rate (TBF) 72 74 Others 49,408 59,923 652,566 773,757

(d) Analysis of loan operations by installment maturity

03/31/2018 12/31/2017

Overdue From 15 to 60 days 15,602 2,181 From 61 to 180 days 31,470 32,834 Over 180 days 3,086 86,945 50,158 121,960

Maturing Up to 90 days 136,650 110,210 From 91 to 180 days 88,908 110,270 From 181 to 360 days 132,242 146,233 Over 360 days 244,608 285,084 602,408 651,797

652,566 773,757

(e) Concentration of loans

03/31/2018 12/31/2017 Customers Amount % %Accumulate Amount % %Accumulate 10 largest costumers 320,340 49.09 49.09 307,709 39.77 39.77 11th to 60th largest customer 299,623 45.91 95.00 415,655 53.72 93.49 61st to 160th largest customer 20,899 3.20 98.20 36,069 4.66 98.15 Others 11,704 1.80 100.00 14,324 1.85 100.00 652,566 773,757


15


(f) Analysis of loans classified from "C to H" Only a part of the transactions rated from C to H in the following table is past due for more than 60 days and, accordingly, classified as non-performing. The other transactions are performing normally but remain classified at these levels as a result of the criteria used for credit analysis.

03/31/2018 12/31/2017

Level

C D E F G H Total

Total

Performing

141,092 18,953 29,874 15,490 205,409 189,111Non-performing loans

989 40,831 3,189 26,492 38,987 110,488 176,996

Total

142,081 59,784 3,189 56,366 54,477 315,897 366,107

NPL 60 – 12/31/2017

1,632 60,875 137 287 114,065 176,996 Total – 12/31/2017

126,674 104,911 168 287 134,067 366,107

(g) Analysis of the loans assigned by type of loan and nature of risk

There was no result of loan assignments with substantial transfer of risks and rewards for the first quarter of 2018 and in the first quarter of 2017, and there was no result of loan assignments with substantial retention of risks and rewards in the first quarter of 2018 (R$ (76) in the first quarter of 2017).

7 Foreign Exchange Portfolio Indusval & Partners Consolidated

03/31/2018 12/31/2017 Assets Exchange purchases pending settlement 52,554 51,277 Rights on exchange sales 3,699 402 Advances in local currency (205) (402) Others 652 1,398 56,700 52,675

Liabilities Exchange sales pending settlement 3,721 397 Liabilities for purchases of exchange 51,029 49,072 Advances on foreign exchange contracts (45,125) (49,072) 9,625 397


16


8 Other receivables and other assets

(a) Other receivables - Sundry Indusval & Partners Indusval & Partners Consolidated

03/31/2018 12/31/2017 03/31/2018 12/31/2017

Deferred tax assets (Note 11(b)) 402,800 374,277 449,926 420,978 Debtors for purchase of assets (Note 6(a)) 24,729 31,417 24,858 31,554 Credit instruments receivable (Note 6(a)) 103,595 156,568 103,595 156,568 Credit instruments receivable without characteristics of loans 34,917 34,586 34,917 34,586 Deposits in guarantee ((Note 12(b)) 27,372 23,706 62,757 58,497 Taxes and contributions for offset 165 165 1,599 1,147 Sundry debtors - Local and others 7,911 8,434 20,410 15,375 601,489 629,153 698,062 718,705

Current assets 52,869 24,198 66,659 32,081 Long-term receivables 548,620 604,955 631,403 686,624

(b) Other receivables - Negotiation and intermediation of securities

Indusval & Partners Indusval & Partners Consolidated

03/31/2018 12/31/2017 03/31/2018 12/31/2017

Deposits in guarantee - Stock exchange 19,167 6,787 19,168 7,331 Clearing house account 8,404 38,673 Debtors - Pending settlement account 49,979 15,271 Guarantee fund for settlement of operations 11,113 22,226 Swap intermediation 532 518 19,167 17,900 78,083 84,019

Current assets 19,167 17,900 77,594 83,509 Long-term receivables 489 510

(c) Other assets - Indusval & Partners Consolidated

03/31/2018 12/31/2017

Non-operating assets Properties 253,960 248,692 Vehicles 3,198 3,198 Machinery and equipment 50 50 Others 655 7,746 Provision for loss (19,289) (16,670)

238,574 243,016

Prepaid expenses 3,818 3,707 242,392 246,723

Current assets 2,958 8,634 Long-term receivables 239,434 238,089


17


9 Permanent Assets

(a) Investments in subsidiaries, affiliates and joint ventures - Indusval & Partners Equity in the earnings/

(loss)

Companies

At December

31, 2017Acquisition/

Sale

Amortizationgoodwill/

OthersDividends

received

Preferred share

warrants

Carrying value

adjustments

First quarter

2018

First quarter

2017At March

31, 2018

Guide Investimentos 28,864 (130) (3,681) 28,734

Banco Intercap 110,931 148 1,217 111,079

Intercap DTVM 19,944 167 20,111BI&P Comércio de Cereais 21,214 136 328 21,350BI&P Assessoria 17,780 (616) (198) (481) 16,966

Guide Consultoria 17 (3) 14

Simplific Pavarini (*) 20 (20)

Sertrading (**) 16,186 (388) (143) (6) 418 725 16,067

Gran Partners 79 1 7 80

Total 215,035 (20) (1,004) (143) (6) 539 (1,885) 214,401

(*) The company Simplific Pavarini Gestão de Patrimônio Ltda. was sold in January 2018. (**) The amount of R$ (6) in the Carrying value adjustments column refers to exchange loss on the equity of an associated company abroad.

Information on the subsidiaries, associated companies and joint ventures: Equity Net income/(loss)

Companies Capital 03/31/2018 12/31/2017First quarter

2018 First quarter

2017

Number of shares/quotas

held Holding %

Guide Investimentos 60,417 29,836 29,971 (135) (3,822) 252,131 96.307%

Banco Intercap 116,260 111,079 110,931 148 1,217 358,375 100%

Intercap DTVM 15,493 20,111 19,944 167 2,936,690 100%

BI&P Comércio de Cereais 17,788 21,350 21,214 136 328 17,788,073 100%

BI&P Assessoria 2,954 602 800 (198) (481) 2,953,771 100%Guide Consultoria 2 14 16 (3) 1,999 99.95%

Sertrading (*) 41,351 86,886 85,145 2,828 1,473 392,291 13.73%

Gran Partners 50 161 159 2 14 25,000 50.00% (*) The financial statements used for equity accounting purposes were those of February 28, 2018, representing the profit between December 2017 to February 2018, while the unrealized profits between the companies of R$ 30 was excluded in the first quarter of 2018 (R$ 216 in the first quarter of 2017).

(1) Guide Investimentos On May 2, 2017, 2,466 preferred share warrants were issued (unit price of R$ 11.10). The warrants will guarantee to the acquirer the right to subscribe one preferred share at the price of R$ 90.53. On June 27, 2017, capital was increased by R$ 8,278 through the issuance of 25,113 preferred and 29,746 common shares. This capital increase was approved by the Brazilian Central Bank on July 21, 2017. Banco Indusval executed, on February 26, 2018, with Fosun Investimentos (Brasil) Ltda., an integral subsidiary of Fosun Group (“Fosun”), one of the world’s leading multinational companies, the Share Purchase and Sale Agreement, which establishes the binding terms and conditions for the selling to Fosun of common shares and preferred shares held by Banco Indusval, which will represent, on the closing date of the Transaction, 70% of the total capital of Guide Investimentos S.A. Corretora de Valores, for the amount of up to R$ 290,000.


18


(2) Sertrading S.A. In the first half of 2011, the Bank invested R$ 25,000 through the subscription of common shares as a capital increase in Sertrading, one of the largest foreign trade logistics and services companies in Brazil. The value of the net assets at the acquisition date was R$ 7,616, and goodwill relating to future profitability of R$ 17,384 was recorded as part of the acquisition. The goodwill paid is being amortized based on a technical study and recorded in "Other operating expenses" in the statement of operations, totaling R$ 388 in the first quarter of 2018 (R$ 477 in the first quarter of 2017). At March 31, 2018, the balance of the goodwill was R$ 4,503 (R$ 4,891 at December 31, 2017). In August 2017, 114,284 shares of Sertrading S.A. were disposal, representing 4.00% of the capital, for R$ 4,840. Consequently, the goodwill on acquisition was reduced by R$ 1,569. The Banco Indusval still holds 392,291 common shares, which corresponds to a 13.73% holding. (3) BI&P Assessoria e Participações Ltda. Following the approval by the Central Bank of Brazil, on April 17, 2013, the Bank completed the acquisition of BI&P Assessoria e Participações Ltda. (previously Voga Empreendimentos e Participações Ltda.). The purpose was to expand the Bank's role in the merger and acquisitions business, corporate debt issuance and other fixed income products, IPO processes, corporate governance and financial appraisals, introducing innovative solutions which contribute to enabling customer development. The Bank acquired 3,772 shares and Guide Investimentos, 1 share. The acquisition price consists of four installments:

• Fixed installment: R$ 15,503 paid in cash;

• 20 quarterly installments (starting in 2013 and ending in 2018), adjusted by the General Market Price Index (IGP-M), with present value of R$ 5,685;

• Variable installments: 5 annual installments (starting in 2013 and ending in 2018) contingent on meeting profit before taxes targets in these years; and

• Contingent installment: paid as a result of projects already underway by BI&P Assessoria, totaling R$ 2,454 at the acquisition date.

An additional installment is also included in the acquisition agreement in the event of a change in the control of Banco Indusval & Partners, payable in an amount of up to three times the difference between the sale price of the control and the purchase price of the shares of the Bank, depending on the period during which the control is sold. As a result, the fair value of the amount paid was R$ 23,642. Considering the fair value of the net assets of BI&P Assessoria on the date of the acquisition of R$ 888, goodwill of R$ 22,754 was classified under "Investments" in the Bank and transferred to "Intangible assets" in the consolidated information. In 2016, R$ 2,175 was deducted from the residual balance payable on the acquisition transaction as a result of contractual amendments. Accordingly, the balance of goodwill was reduced to R$ 21,327. The goodwill is being amortized, based on the expected future profitability of BI&P Assessoria and recorded in "Other operating expenses" in the statement of operations, totaling R$ 616 in the first quarter of 2018 (R$ 555 in the first quarter 2017). At March 31, 2018, the balance of goodwill was R$ 16,364 (R$ 16,980 at December 31, 2017).


19


In 2017, capital was increased by R$ 2,200 through the issuance of 2,200,000 new shares identical to those already existing, at the unit price of R$ 1,00. All shares were subscribed by the Bank.

(b) Property and equipment Indusval & Partners Consolidated

12/31/2017 Acquisitions Depreciation Amount

written off 03/31/2018

Purchases in progress 36 (36)

Cost 36 (36) Equipment and facilities 2,039 43 (156) (2) 1,924

Cost 11,130 43 (2) 11,171 Accumulated depreciation (9,091) (156) (9,247)

Others 2,391 9 (264) (83) 2,053

Cost 14,389 9 (307) 14,091 Accumulated depreciation (11,998) (264) 224 (12,038)

Total property and equipment in use 4,466 52 (420) (121) 3,977

Cost 25,555 52 (345) 25,262 Accumulated depreciation (21,089) (420) 224 (21,285)

(c) Intangible assets

(i) Goodwill on the acquisition of subsidiary and associated companies Indusval & Partners Consolidated

12/31/2017 Acquisitions Amortization Amount

written off 03/31/2018

BI&P Assessoria - Cost (Note 9(a)(3)) 25,675 25,675BI&P Assessoria - Accumulated amortization (8,695) (616) (9,311)Simplific - Cost (Note 9(c)(i)(a)) 2,898 2,898Simplific - Accumulated amortization (604) (72) (676)Guide Life - Cost (Note 9(c)(i)(b)) 129 129Guide Life - Accumulated amortization (13) (3) (16)

Total Goodwill 19,390 (691) 18,699

Cost 28,702 28,702Accumulated amortization (9,312) (691) (10,003)

(a) Simplific On November 6, 2015, the Brazilian Central Bank approved the acquisition of Simplific II Participações Ltda, an asset management operation (wealth management) by Guide Investimentos. This acquisition is part of the expansion plan of Guide Investimentos, a financial institution specialized in individual investment management of high net worth and institutional clients, being an important step in executing its strategy of serving major customers. Guide Investimentos acquired 256,999 shares and Banco Indusval & Partners, only one share.


20


The acquisition price consists of three installments:

• Fixed installment: R$ 2,680 paid up to December 30, 2015;

• Supplemental installment: Amount conditional to the achieving of goals of the contribution margin of subsequent years, which was estimated at R$ 324; and

• Additional installment: At the end of each period and after the final approval of the half-yearly statement by the parties, the amounts corresponding to the percentage of the pre-determined contribution margin verified in the respective periods are payable. The fair value is R$ 690.

Thus, the fair value of the acquisition price paid was R$ 3,694. As the fair value of the net assets of Simplific at the acquisition date was R$ 2,644, goodwill of R$ 1,050 was recorded and is classified in "Investments" in the balance sheet of Guide Investimentos in "Intangible assets" in the consolidated information. The goodwill is being amortized on the straight-line basis over 120 months and recorded in "Other operating expenses" in the statement of operations. Two intangible assets were identified: R$ 2,143 - Client relations and R$ 213 - Non-compete clause, which are being amortized on the straight-line basis over 10 years and 6 years, respectively. On November 2016, a revaluation of the purchase price allocation was made through an appraisal report. This revaluation resulted in a change in the value of the supplemental and additional installments, as well as in the recognition of the fair value of assets and liabilities, and, consequently, of the goodwill based on future profitability. The new amounts of the supplemental and additional installments are R$ 737 and R$ 2,725, respectively. Therefore, the fair value of the acquisition price paid was R$ 6,143. The new value of the intangible assets identified was: R$ 2,485 - Client relations and R$ 472 - Non-compete clause. The goodwill was R$ 2,898. (b) Guide Life On November 14, 2016, the Brazilian Central Bank approved the acquisition of DXS Corretora de Seguros e Previdência Ltda., a consulting company of financial planning, by Guide Investimentos. The name of the company was changed to Guide Life Consultoria e Corretora de Seguros Ltda. This acquisition was part of the expansion plan of Guide Investimentos and created a new business based on an innovative concept, targeted to a specific profile of clients that seek long-term customized financial planning. Guide Investimentos acquired 494,900 shares, 98% of Guide Life's capital. The equity value on the acquisition date was R$ 71 and goodwill for future profitability of R$ 129 was recorded. The goodwill is being amortized on the straight-line basis over 120 months and recorded in "Other operating expenses" in the statement of operations, totaling R$ 3 in the first quarter of 2018. In 2017, Guide Life made five capital increases totaling R$ 2,250, through the issuance of 2,250,000 new shares identical to those already existing, at the unit price of R$ 1,00. In the first quarter of 2018, Guide Life made three capital increases totaling R$ 852, through the issuance of 852 new shares identical to those already existing, at the unit price of R$ 1,00.


21


(ii) Other intangible assets Indusval & Partners Consolidated

12/31/2017 Acquisitions Amortization 03/31/2018

Business with food grains 4,258 (328) 3,930

Cost 13,100 13,100Accumulated amortization (8,842) (328) (9,170) Platform for the distribution of financial products (a) 7,519 (560) 6,959

Cost 12,603 12,603Accumulated amortization (5,084) (560) (5,644) Omar Camargo (b) 1,261 (135) 1,126

Cost 3,243 3,243Accumulated amortization (1,982) (135) (2,117) Geraldo Correa 1,239 355 (181) 1,413Cost 1,802 355 2,157Accumulated amortization (563) (181) (744) Simplific - Client relations (Note 9(c)(i)(a)) 1,967 (62) 1,905

Cost 2,485 2,485Accumulated amortization (518) (62) (580) Simplific - Non-compete clause (Note 9(c)(i)(a)) 308 (20) 288

Cost 472 472Accumulated amortization (164) (20) (184) SLW 501 (40) 461

Cost 699 699Accumulated amortization (198) (40) (238) Picchioni (c) 2,275 (175) 2,100

Cost 3,237 3,237Accumulated amortization (962) (175) (1,137) Mesa BM&F project 3,550 (167) 3,383

Cost 3,550 3,550Accumulated amortization (167) (167) Others (BI&P Assessoria) 6 6

Cost 6 6 Other intangible assets 19,334 3,905 (1,668) 21,571

Cost 37,647 3,905 41,552Accumulated amortization (18,313) (1,668) (19,981)

(a) Development of a platform for the distribution and trading of securities – Guide

Investimentos Guide Investimentos recorded R$ 12,603 relating to the development of an electronic platform for the distribution and trading of securities and other financial assets. This intangible asset started operation in January 2014, and is being amortized over a period of 7 years based on its expected revenue. (b) Association of Guide Investimentos with Omar Camargo Corretora de Valores S.A. Guide Investimentos recorded R$ 3,243 relating to the strategic partnership with Omar Camargo to further promote the expansion of Guide Investimentos' businesses in the southern region of the country, most notebly in the State of Paraná. As a result of this transaction, Guide Investimentos will have access to a wide customer base and provide differentiated products and services. This intangible asset is being amortized on a straight-line basis over 6 years.


22


(c) Transfer of the H. H. Picchioni Client Portfolio to Guide Investimentos Guide Investimentos recorded R$ 1,750 relating to the transfer of the H. H. Picchioni client portfolio of brokerage and intermediation activities of fixed and variable income securities, to implement its operations in Belo Horizonte and São Paulo. This intangible asset will be amortized on the straight-line basis over 5 years. In January 2017, an additional payment of R$ 1,487 was made, as provided in the client portfolio transfer agreement.

10 Deposits, funds obtained and onlendings

(a) Analysis of deposits, funds obtained abroad and onlendings by maturity - Indusval &

Partners Consolidated 03/31/2018 12/31/2017

Term

Deposits, funds obtained and onlendings

No maturity

Up to 90 days

From 91 to 180 days

From 181 to 360 days

From 361 to 1080

days

From 1081 to 1800

days Over

1800 days Total Total

Demand deposits 14,032 14,032 16,677Interbank deposits 29,018 29,018 28,537Time deposits (*) 235,282 147,191 241,606 905,974 25,960 150 1,556,163 1,513,019

Total deposits 14,032 235,282 176,209 241,606 905,974 25,960 150 1,599,213 1,558,233

Real estate letters of credit 17,565 17,564 9,452 3,114 47,695 52,703

Agribusiness letters of credit 153,712 36,584 129,787 89,073 21 409,177 464,061Financial letters 5,432 5,432 5,301

Total resources from letter issuance 176,709 54,148 139,239 92,187 21 462,304 522,065

Local onlendings 1,595 673 749 6,550 1,474 6 11,047 13,532

Total 14,032 413,586 231,030 381,594 1,004,711 27,455 156 2,072,564 2,093,830

Total – 12/31/2017 16,677 215,278 377,375 408,642 1,047,157 28,604 97 2,093,830

(*) Of the total time deposits at March 31, 2018, R$ 74,154 comprise time deposits (CDB) with special guarantees (DPGE), maturing up to 08/17/2018 (December 31, 2017 - R$ 72,936).

(b) Funds obtained in the open market Indusval & Partners Consolidated

03/31/2018 12/31/2017

Own Portfolio 32,559 37,372

Treasury Bills (Selic) 12,575 11,586 Debentures 19,984 25,786 Third Party Portfolio 112,911 9,001 Treasury Bills (Prefixed) 1,000 2,501 Treasury Bills (IPCA) 111,911 6,500 145,470 46,373

Current 145,470 46,373


23


11 Income Tax (IRPJ) and Social Contribution (CSLL) - Indusval & Partners

(a) Calculation of tax

03/31/2018

12/31/2017

Loss before tax and after profit sharing (97,634) (259,403)

Effects of permanent differences 1,632 15,917

Investments in subsidiary and associated companies (539) 13,108Investment abroad (Branch) 935 (4,622)Profit abroad (Branch) 3,609Amortization of goodwill 1,004 2,821Others - CSLL and IRPJ 164 595Others - IRPJ (exclusive) 68 406

Effects of temporary diferences 71,308 91,268

Allowance for loan losses 67,700 101,947Provision for contingencies 2,561 5,052Adjustment to market value - Marketable securities and derivatives (1,572) (19,507)Others 2,619 3,776

Tax basis (loss) before offset of tax losses – CSLL (24,762) (152,624)Tax basis (loss) before offset of tax losses – IRPJ (24,694) (152,218)

Deferred tax credits recorded on temporary differences (40%) (Note 11(e)) 28,523 36,507

Income tax and social contribution 28,523 36,507

(b) Changes in deferred tax assets

03/31/2018 12/31/2017

Opening balance on January 1 374,277 339,530

Changes Allowance for loan losses 27,063 41,029 Provision for contingencies 1,101 2,097 Adjustment to market value - Marketable securities and derivatives (629) (9,563) Others 988 1,184 Total deferred tax assets (Note 8(a)) 402,800 374,277

Percentage of equity 199.66% 138.18%

(c) Expected realization of deferred tax assets and tax liabilities

03/31/2018 12/31/2017

Up to 1

yearFrom 1 to

2 yearsFrom 2 to

3 yearsFrom 3 to

4 yearsFrom 4 to

5 yearsOver 5

years Total Total

Allowance for loan losses 20,000 20,000 20,000 164,297 224,297 197,234Tax losses (IRPJ and CSLL) 12,906 12,274 14,261 5,904 113,469 158,814 158,814Adjustment to market value 1,464 1,464 2,093Others 18,225 18,225 16,136 Total 14,370 32,274 34,261 25,904 295,991 402,800 374,277

Total – 12/31/2017 14,999 32,274 34,261 25,904 266,839 374,277


24


The technical study on the realization of deferred taxes was prepared by the Bank's management, based on the current and future scenarios. The main assumptions used in the projections considered macroeconomic, production and cost of funding indicators, the inflow of funds through strengthening capital and the realization of assets. The deferred income tax and social contribution will be realized as temporary differences are reversed or fulfill the parameters for tax deductibility or when the tax losses are offset. This technical study was prepared in accordance with Art.6 of CMN Resolution 3059/02 and is reassessed on a semiannual basis.

(d) Present value of deferred tax assets The Bank's Board of Directors, based on a technical study which forecasts future profitability and the generation of future tax liabilities, estimates the realization of the deferred tax assets within a maximum period of 10 years. The present value of the deferred tax assets, based on the Bank's historical average funding rates, would be R$ 240,063 (R$ 224,731 at December 31, 2017).

(e) Request to the Brazilian Central Bank for the recording of deferred tax assets - Temporary differences and tax losses Due to the non-compliance to item I of article 1 of the Brazilian Central Bank Resolution 3059/02, and based on Resolution 4441/15 and Circular 3776/15, the Bank requested the Central Bank authorize the registration of deferred tax assets based on the technical study prepared by the Bank. The Central Bank instructed Banco Indusval to only record tax credits arising from temporary differences. Thus, in the first quarter of 2018, the amount of R$ 28,523 arising from temporary differences was recorded. The Bank did not record deferred tax assets of R$ 9,888 arising from tax losses during the first quarter of 2018.

12 Other liabilities

(a) Negotiation and intermediation of securities Indusval & Partners Indusval & Partners Consolidated

03/31/2018 12/31/2017 03/31/2018 12/31/2017 Creditors - Pending settlement account 1,498 18 168,412 134,283 Clearing house account 23 19 Creditors for share loans 1,691 1,691 Commissions and brokerage 3,580 3,476 Others 615 192 615 192 3,804 210 174,321 137,970

(b) Contingent assets and liabilities - Indusval & Partners Consolidated

In the normal course of its activities, the Bank is involved in the following contingencies:

(i) Contingent assets No contingent assets were recognized and there are no significant lawsuits classified as having a probable realization.


25


(ii) Contingent liabilities Probable contingencies - Labor and civil The provision for contingent liabilities comprises contingencies classified as a probable risk and are recorded in "Other liabilities - Sundry". The changes in the probable contingencies for the period may be summarized as follows: Indusval & Partners Consolidated

03/31/2018 03/31/2017

Labor Civil Total Total

At January 1 17,467 1,629 19,096 15,308 New provisions 2,476 91 2,567 612 Reversals (5) Payments (2,735) At March 31 19,943 1,720 21,663 13,180

Deposits in guarantee of appeals at March 31, 2018 13,614 1,428 15,042

Deposits in guarantee of appeals at March 31, 2017 8,433 1,381 9,814

Possible contingencies - Labor and civil Contingencies classified as possible loss are monitored by the Bank, based on the reports of the legal advisors regarding each of the legal measures and administrative processes and, pursuant to generally accepted accounting principles, require no provision. The Bank and its subsidiaries are parties to the following lawsuits presenting risk of possible loss:

• Labor claims: The Bank has labor claims classified as possible losses totaling R$ 4,702 (R$ 4,702 at December 31, 2017). On a consolidated basis, they total R$ 8,261 (R$ 8,261 at December 31, 2017).

• Civil suits: The majority of these suits refer to compensation for pain and suffering, disputes regarding protested discounted trade bills endorsed to the Bank by third parties, contract legitimacy and contractual review. The amounts attributed to the suits classified as possible amount to R$ 65,844 (R$ 63,703 at December 31, 2017). On a consolidated basis these amount to R$ 68,322 (R$ 66,181 at December 31, 2017).

Contingencies taxes Indusval & Partners Indusval & Partners Consolidated

03/31/2018 12/31/2017 03/31/2018 12/31/2017

Taxes contested in court 7,325 7,189 36,682 36,076 Other tax related contingencies 6,417 6,316 6,603 6,500 13,742 13,505 43,285 42,576

Long-term liabilities 13,742 13,505 43,285 42,576


26


The changes in the period may be summarized as follows: Indusval & Partners Consolidated 03/31/2018 03/31/2017

At January 1 42,576 39,376

New provisions 326 468 Reversals (17) Indexation/charges 383 679 At March 31 43,285 40,506

Deposits in guarantee of the appeals 47,715 48,859

The balance comprises the following main issues:

• ISS - Complementary Law 116/03 - R$ 3,797 (December 31, 2017 - R$ 3,688): Challenging the levying of this tax on the means, instruments and stages of the financial transactions carried out by the Bank;

• PIS - R$ 3,529 (December 31, 2017 - R$ 3,501): Declaration of the non-existence of a legal-tax relationship between the parties, regarding the application of Constitutional Amendment 1/94 and Provisional Measure 636/94 (and successive republications), permitting the Bank to pay PIS contributions in accordance with the provisions of Complementary Law 7/70;

• INSS - SAT/FAP - R$ 6,416 (December 31, 2017 - R$ 6,316): Challenging the increase in the Work Accident Insurance (SAT) rate and the accident prevention factor (FAP).

• Social contribution (CSLL) - R$ 29,349 (December 31, 2017 - R$ 28,878): Lawsuit filed by Banco Intercap S.A. questioning the social contribution. Since 1996, because of a favorable ruling in a lawsuit filed by Banco Intercap S.A. questioning the provisions of Law 7689, of December 15, 1988, and also the prescription of time during which the Federal Government could enter with a rescission action, Banco Intercap S.A. was not required to pay this social contribution. Despite the fact that the matter has been the subject of a favorable and unappealable ruling, on September 23, 1999 the Federal Revenue Service filed a tax assessment to collect the contribution. Banco Intercap S.A. challenged the assessment by specific action and, based on the opinion of its legal counsel, the final decision has possible chances to be favorable.

Possible contingencies – Taxes The main tax related contingencies with only possible risk of loss are not recognized in the balance sheet and total R$ 118,796 (December 31, 2017 - R$ 117,664), described as follows: • Challenging the levying of IRPJ and CSLL on the indexation, in the reserve account, of exchange

membership certificates of BMF S.A. and Bovespa S.A., arising from demutualization of those organizations, in the amount of R$ 25,475 (December 31, 2017 - R$ 25,250) in Guide Investimentos;

• Challenging the levying of the calculation base of IRPJ and CSLL on the demutualization of BM&FBOVESPA equity securities in the amount of R$ 33,421 (December 31, 2017 - R$ 33,123) and PIS and COFINS of R$ 10,824 (December 31, 2017 - R$ 10,746) in Banco Intercap S.A.; and

• Challenging the levying of social security contributions on the amounts paid as PLR - Profit sharing and PLA - Profit sharing of management, for the period of 2009 to 2011, in the amount of R$ 20,839 (December 31, 2017 - R$ 20,613).


27


13 Equity

(a) Capital

(i) Subscribed and paid-up capital Fully subscribed and paid-up capital comprises 152,527,251 shares, of which 115,033,148 are common and 37,494,103 are preferred shares with no par value (December 31, 2017 - 152,527,251 shares, of which 115,033,148 are common and 37,494,103 are preferred shares with no par value). (ii) Treasury shares At March 31, 2018, there were 543,396 preferred shares in treasury (R$ 543,396 at December 31, 2018). No shares were repurchased in the first quarter of 2018 or in the year of 2017.

(b) Capital reserves

(i) Subscription bonus As a result of the capital increase of the Bank on March 23, 2011, 19,779 preferred share warrants were issued (at a unit price of R$ 14.39), whereby each share will entitle holders on November 8, 2011 to subscribe one hundred preferred (PN) shares. The Bank's stockholders are entitled to subscribe 0.00031717 of a warrant for each share held; accordingly, a holder of 3,152 shares may subscribe one share warrant. The exercise price will correspond to the net asset value of the PN share reported in the quarterly balance sheet published prior to the date of exercise. These may be exercised at any time, as from the date of acquisition up to their expiry on November 8, 2016. No share warrants were subscribed in the first quarter of 2018 or in the year 2017. (ii) Share-based compensation The following Stock Option Plans were approved for the Institution's Directors and management-level employees, as well as individuals who provide services to the Bank or the companies under its control:

• Stock Option Plan I approved at the Extraordinary General Meeting (EGM) held on March 26, 2008;

• Stock Option Plan II approved at the EGM of April 29, 2011 and amended at the EGM of December 22, 2011;

• Stock Option Plan III approved at the EGM of April 29, 2011 and amended at the EGM of December 22, 2011;

• Stock Option Plan IV approved at the EGM on April 24, 2012. The Board of Directors, based on the recommendation of the Remuneration Committee, establishes the terms of the Stock Option Plans and approves the half yearly option programs.


28


Main Objectives of the Stock Option Plans: (i) foster expansion and compliance with the Bank's established business goals, through the creation of incentives that promote integration between plan participants and stockholders; (ii) enable the Bank to attract and retain participants, offering them, as an additional benefit, the opportunity to become stockholders; (iii) promote the achievement of good results by the Bank and foster shareholder interests through the long-term commitment by the participants; and (iv) enable employees to take part in the Bank's development, aligning their interests with those of the stockholders.

Maximum number of shares covered and options granted: Plan I: limited to a maximum number of options which results in a dilution of up to 1.25% of the Bank's capital for each year of the Plan's duration, observing a maximum limit at any time of 5% of this capital. The dilution corresponds to the percentage comprising the number of shares underlying the options, considering all of the options granted under the plan, already exercisable or not, by the total number of shares of the Bank. Plan II: limited to the number of options which results in a maximum dilution of up to 5% of the Bank's capital, after the Brazilian Central Bank's ratification of the capital increase approved by the Bank's Board of Directors on March 23, 2011. The dilution corresponds to the percentage comprising the number of shares underlying the options considering all of the options granted under the Plan, already exercisable or not, by the total number of shares of the Bank. Plan III: limited to the number of options comprising the subscription of 1,850,786 common shares and 1,850,786 preferred shares of the Bank. Plan IV: limited to the number of options comprising the subscription of 1,500,000 common shares and 1,500,000 preferred shares of the Bank. Vesting: the Committee will establish the inception of vesting which will occur in three or five annual installments, depending of the respective grant, the first of which to be defined in the minutes of the Committee Meeting and the remaining two as from the subsequent years. At its own discretion, the Committee may, in exceptional circumstances, shorten the vesting period of the options granted.

Exercise price: The exercise prices of the options to be paid by the participants are shown in following table:


29


Nine stock options were granted as follows: Quantity Vesting

Grant Date Plan (*)

Fair value at grant date - R$

Maximum term for exercise

Exercise price - R$ Granted

Extinct/ Expired Unexercised

% Exercisable From

07/01/2011

II

4.76

4.60

1,167,463

1,167,463

33.33% 07/01/2012

07/01/2016 66.66% 07/01/2013

100.00% 07/01/2014

12/23/2011

II

2.55

4.60

435,322

435,322

33.33% 12/23/2012

12/23/2016 66.66% 12/23/2013

100.00% 12/23/2014

12/23/2011

III

5.48

0.92

1,850,786

151,024

1,699,762

20.00% 12/23/2012

40.00% 12/23/2013

12/23/2018 60.00% 12/23/2014

80.00% 12/23/2015

100.00% 12/23/2016

01/30/2012

I

3.16

6.84

618,195

618,195

33.33% 01/30/2013

01/30/2017 66.66% 01/30/2014

100.00% 01/30/2015

01/30/2012

II

3.26

4.60

101,069

101,069

33.33% 01/30/2013

01/30/2017 66.66% 01/30/2014

100.00% 01/30/2015

08/31/2012

II

2.90

4.60

136,730

136,730

33.33% 08/31/2013

08/31/2017 66.66% 08/31/2014

100.00% 08/31/2015

08/31/2012

IV

3.56

5.25

355,840

355,840

33.33% 08/31/2013

08/31/2017 66.66% 08/31/2014

100.00% 08/31/2015

02/28/2013

IV

4.27

6.30

249,701

249,701

33.33% 02/28/2014

02/28/2018 66.66% 02/28/2015

100.00% 02/28/2016

02/28/2014

IV

2.92

4.95

261,884

55,458

206,426

20.00% 02/28/2015

40.00% 02/28/2016

02/28/2019 60.00% 02/28/2017

80.00% 02/28/2018

100.00% 02/28/2019

5,176,990 3,270,802 1,906,188

(*) Plans I, II and IV have a vesting period of three years and maximum exercise term of five years, and Plan III has a vesting period of five years and a maximum exercise term of seven years.

The Black-Scholes method was used for option pricing. The data and assumptions used under this model were as follows:

• Option calculation date;

• Option expiry date;

• Fixed rate projected by B3 DI futures for the term of the option = risk-free rate;

• Average price weighted by the trading volume of shares over the prior 15 days;

• Option exercise price corresponds to the price of the share at its net asset value;

• Volatility is that disclosed by B3 S.A. - Brasil, Bolsa, Balcão, for a one-year period, When this information is unavailable, the EWMA method is used with a lambda of 0.94 and 252 samples for calculating the expected volatility;

• Under this model, expected dividends are not considered, as the dividends paid will be subtracted from the exercise price over the option term.


30


The Black-Scholes model does not account for the early exercise of a stock option, since over the life of the option it will be more favorable to sell rather than exercise the option. Accordingly, when the binomial model is used, which takes into account the early exercise dates, the fair value of the option is the same as that determined using the Black-Scholes model. The fair values of the options are: Grants 03/31/2018 12/31/2017

February 28, 2014

0.00445 0.02

In the first quarter of 2018 or in the year of 2017, no benefit expense from stock options was calculated under the incentive plan, recorded against the capital reserve.

(c) Revenue reserves and accumulated deficit The Bank's by-laws provide for the appropriation of the annual profit to the following reserves: (a) reserve for equalization of dividends for the purpose of ensuring the regular payment of dividends to stockholders, and (b) the reserve for working capital reinforcement to ensure that the Bank has the financial resources for its continued operation.

(d) Dividends and interest on own capital

The Bank's by-laws provide for the distribution of a minimum annual dividend of 25% of profit adjusted in accordance with Article 202 of Law 6404/76 and subsequent amendments.

14 Employee benefits

(a) Private pension plan Banco Indusval S.A. and its subsidiaries offer their employees a supplementary defined contribution pension plan, managed by a private entity. The plan was started in September 2008 and is sponsored by the Bank and its subsidiaries and employees. The Bank's contributions totaled R$ 87 in the first quarter of 2018 (R$ 95 in the first quarter of 2017). The Consolidated contributions totaled R$ 130 (R$ 132 in the first quarter of 2017).

(b) Contributions and profit sharing Since 2006, the Bank adopted its own model for the payment of profit sharing using criteria and parameters established in accordance with the agreement approved by the Ministry of Labor.


31


15 Analysis of the accounts in the Statement of Operations

(a) Income from financial intermediation Quarters ended March 31

2018 2017

Indusval &

Partners ConsolidatedIndusval &

Partners Consolidated Loan operations 11,911 13,625 33,752 38,014

Advance to depositors 2 2

Loans 5,964 7,078 20,236 24,220

Discounted bills 26 26 59 59

Financing 5,158 5,158 12,902 13,180

Recovery of receivables 763 1,363 553 553 Marketable securities 19,402 27,947 60,107 62,307

Short-term interbank investments 6,933 6,812 28,592 26,851 Fixed income securities 9,797 18,258 6,981 10,605 Variable income securities (324) (323) (1,023) (1,026) Mark-to-market adjustment - Marketable securities 1,296 1,325 24,166 24,486 Foreign investments 1 1 31 31 Investment funds 1,699 1,874 1,360 1,360

Derivative Financial Instruments 4,456 1,238 7,469 7,155

Swaps 1,024 1,040 (76) (50)

Futures 2,986 (248) 7,599 7,266

Options (7)

Forwards 446 446 (54) (54) Foreign Exchange 4,466 4,466 4,597 4,597

Export 691 691 1,136 1,136

Financial (138) (138) (116) (116)

Rate variations 3,051 3,051 1,215 1,215

Funds in foreign currency 862 862 2,362 2,362 40,235 47,276 105,925 112,073


32


(b) Financial intermediation expenses Quarters ended March 31

2018 2017

Indusval &


Partners Consolidated

Funds obtained in the open market (40,365) (39,411) (102,145) (101,264)

Interbank deposits (793) (481) (5,409) (4,850)

Time deposits (29,345) (29,335) (62,802) (62,820)

Repo operations (2,754) (2,116) (5,453) (4,882)

Agribusiness letters of credit (LCA) (6,566) (6,566) (25,984) (26,093)

Financial bills (LF) (131) (131) (644) (644)

Real estate letters of credit (LCI) (776) (782) (1,853) (1,975) Loans and onlendings (3,231) (3,231) (1,999) (2,002)

Foreign borrowings (3,054) (3,054) (1,632) (1,632) Local onlendings - PSH (94) (94) (108) (108) Local onlendings - BNDES (33) (33) (116) (116) Local onlendings - FINAME (50) (50) (143) (146)

Sales/transfers of financial assets (76) (76)

Assignment of loan operations (Note 6(g)) (76) (76) Allowance for loan losses (68,195) (69,317) (9,355) (9,361)

Loan operations and other receivables (68,195) (69,317) (9,355) (9,361) (111,791) (111,959) (113,575) (112,703)

(c) Income from services rendered and bank charges

Quarters ended March 31

2018 2017

Indusval &



Management of funds 206 140 Collection fees 85 85 111 111 Transfer of funds 23 23 18 18 Guarantees provided 1,005 1,005 1,504 1,504 Custody services 11 186 Stock exchange brokerage services 22,059 11,025 Placement commissions of securities 45 3,404 Other(*) 27 4,003 991 6,804

1,185 30,796 2,624 19,788

Bank charges 97 98 96 96

1,282 30,894 2,720 19,884

(*) Refers mainly to commissions on structured transactions.


33


(d) Personnel expenses Quarters ended March 31

2018 2017

Indusval &



Salaries (6,111) (11,249) (5,723) (10,344) Fees (1,003) (2,784) (1,406) (3,190) Benefits (1,721) (3,800) (1,449) (2,721) Social charges (2,576) (4,575) (2,307) (4,205) Training (83) (112) (66) (133) Interns (38) (136) (65) (153)

(11,532) (22,656) (11,016) (20,746)

(e) Other administrative expenses


2018 2017

Indusval &



Water, electricity and gas (126) (187) (129) (188)

Rents (1,266) (1,944) (1,442) (2,064)

Communications (272) (644) (333) (692)

Social responsibility (69) (69) (67) (67)

Maintenance and repair of assets (59) (127) (55) (109)

Materials (25) (47) (36) (61)

Data processing (1,138) (4,011) (968) (3,407)

Promotions and public relations (338) (503) (63) (107)

Advertising and publicity (57) (1,021) (231)

Publications (44) (55) (17) (33)

Insurance (85) (137) (132) (137)

Financial system services (671) (2,327) (851) (1,918)

Third-party services (1,827) (8,696) (2,517) (6,286)

Surveillance and security (210) (215) (218) (219)

Specialized technical services (3,143) (4,491) (1,234) (2,632)

Transportation (111) (141) (249) (265)

Travel (180) (373) (208) (314)

Other (1,572) (3,164) (2,083) (3,290)

(11,193) (28,152) (10,602) (22,020)

(f) Tax expenses


2018 2017

Indusval &



ISS (11) (1,380) (59) (817)

PIS (11) (253) (39) (230)

COFINS (66) (1,524) (241) (1,221)

Others (449) (551) (504) (602)

(537) (3,708) (843) (2,870)


34


(g) Other operating income Quarters ended March 31

2018 2017

Indusval &



Recovery of charges and expenses 152 154 74 76 Income from insurance guarantees - PSH 42 42 74 74 Income from debtors of assets 835 838 326 335 Overseas transactions 178 Product sales - BI&P Cereais (*) 15,645 121,452 Discounts obtained - BI&P Cereais 1 5 Coffee price variations - BI&P Cereais 1,239 781 Monetary variations 149 419 322 912 Others (**) 573 827 1,213 1,852

1,751 19,343 2,009 125,487

(*) Comprises product sales revenues of BI&P Comércio de Cereais (Subsidiary). Note 15 (h) shows the cost of merchandise sold. (**) Refers mainly to the write-off of the provision for PSH (Subsidy program to social housing).

(h) Other operating expenses


2018 2017

Indusval &



Provision for contingencies (2,804) (3,040) (958) (1,378) Withholding tax (IRRF) on indirect remuneration (9) (9) (10) (10) Amortization of goodwill - Sertrading (388) (388) (477) (477) Amortization of goodwill - BI&P Assessoria (616) (616) (555) (555) Amortization of goodwill - Simplific (72) (72) Amortization of goodwill - Guide Life (3) (3) Coffee price variations - BI&P Cereais (8,199) Cost of products and services - BI&P Cereais (17,331) (113,407) Exchange variations of foreign deposits in guarantee (27) (27) Sundry (177) (310) (3) (339)

(3,994) (21,769) (2,030) (124,467)


35


(i) Non-operating income (expenses) Quarters ended March 31

2018 2017

Indusval &



Gains (losses) on sale of property and equipment and non-operating assets 316 316 12 (315) Gains (losses) on sale of investments 1 1 Depreciation of property and equipment not in use (2,743) (2,743) (893) (893) Reversal of same provision 124 124 37 Other 41 41

(2,302) (2,302) (840) (1,130)

16 Risk and Capital Management - Indusval & Partners Consolidated The activities of Banco Indusval & Partners and its subsidiaries involve the assumption of risks in line with specific orientation and the professional management of these risks. The core functions of the Risk Management Department are the identification of all significant risks to the Institution and group companies, the measurement of these risks, the management of their positions and to establish the allocation of capital. The Bank and its subsidiaries regularly review their risk and systems management policies to reflect changes in markets, products and best market practices and to ensure an adequate balance between risks and rewards, as well as minimizing potential adverse effects on the Bank's financial performance. The Bank defines risks as the possibility of losses which could be due to either internal or external factors. The risk integrated management policies ensure that the control structure is compatible with the Bank's transactions, products and services, as well as enabling the measurement of the exposure to risks and guaranteeing that these risks are properly managed, identified, assessed, controlled and reported with efficiency and efficacy. In addition, the internal audit area is responsible for conducting an independent review of the risk management and control environment. The risks arising from financial activities to which the Bank and the group companies are exposed are:

• Credit risk

• Market risk

• Liquidity risk

• Operational risk

(a) Credit risk In its widest sense, credit risk is the probability that losses may occur as a result of the non-fulfillment of contractually agreed obligations, by either the borrower or the counterparty, and also the devaluation of the contract assumed, due to increased exposure to risk by the borrower, a reduction in income or remuneration, advantages ceded during renegotiation and the costs of recovery.


36


Credit risks include the following, among others:

• Counterparty risk: the possibility of non-fulfillment of obligations related to the settlement of transactions which involve the negotiation of financial assets;

• Country risk: the possibility of losses arising from borrowers located outside the country, as a result of measures taken by the government of the country in which these borrowers reside;

• The possibility of disbursements to honor sureties, guarantees, co-obligations, credit commitments, or other similar transactions;

• The possibility of losses as a result of the non-fulfillment of financial obligations under the terms and conditions agreed upon by an intermediary or contracting party of loan operations.

The Credit Risk Management framework enables the Bank to: identify, measure, control and mitigate risks, as well as to define consistent procedures and routines that allow for full management of the credit risk involved in all phases of the business. The following four business stages define the credit cycle: (a) Credit analysis: credit analysis has clearly defined criteria and procedures for all those involved in the credit granting process, as regards the input necessary for a complete understanding of the credit risk involved in customer risk level rating, the analysis of new business proposals, the renewal of limits and the risk classification of loan operations. The main objective of the credit analysis is to provide a technical basis for decision making by the Credit Committee through the economic and financial analyses of the customers. (b) Credit granting: the main objective of credit granting is to analyze and decide on the granting of limits and loan operations proposed by the Commercial Area, based on information obtained by the latter and the analyses carried out by the Credit Department. (c) Credit management: as soon as a loan is granted, Credit Management becomes responsible for the following: (i) formalizing the transactions, as well as the collateral involved, ensuring compliance with the form and content of the constituent instruments of approval and contracting and associated collateral; (ii) monitoring the loan operations, identifying critical points, to ensure the quality of the loans, as well as the actual receipt of the amounts lent to the counterparties; (iii) analyzing and monitoring the collateral involved in the operations, verifying its sufficiency and liquidity, as well as detecting indications of and preventing deterioration in the quality of the operations, based on credit risk. (d) Credit recovery: when a credit transaction becomes overdue, administrative, renegotiation or legal measures are taken. All these measures are designed to recover the past-due receivable at the lowest possible cost and within the shortest period of time. The main focus of the Credit Risk department is to identify and measure the exposure to credit risk, providing Senior Management with studies concerning the Bank's loan portfolio, providing support for decision-making processes and enabling the control and mitigation of the risks involved in the operations. The studies take into consideration the performance of the portfolio, providing data which can be compared to macroeconomic perspectives, through stress tests, as well as default probability rates. The credit risk management framework is subject to an effective and comprehensive review by the Internal Audit, which operates independently from the Credit Risk department. This area is responsible for


37


checking whether the credit risk management practices are being carried out in accordance with Institutional Policy. Accordingly, the Internal Audit area has autonomy to advise, support, or even challenge the decisions related to credit risk management. Regular reviews are carried out by the related areas to assess the control environment, test the efficacy of the models implemented, and, as described above, ensure that the activities of the Credit Risk department comply with Institutional Policy.

(b) Market risk The Bank and its subsidiaries are exposed to market risks, which are the risk of fluctuations in the fair value or future cash flows of financial instruments, as a result of changes in market rates and prices. These risks arise from outstanding positions in interest rates, currencies and shares. The exposure to market risk is divided between the trading and banking portfolios. The trading portfolio includes the positions in market-making transactions, where the Bank acts as the principal with customers or the market. The banking portfolio corresponds to the Bank's commercial transactions. The main tools and means used to manage market risk are as follows: Value at Risk (VaR) a statistical measurement which estimates the maximum potential loss in value of the Bank's portfolio under normal market conditions in a specific circumstance (time horizon); the calculation of losses in a stress scenario (Stress test), which determines the effects of extreme market conditions (both positive and negative) on the value of the Bank's portfolio; and the Sensitivity Analysis. The sensitivity analysis, as defined by instruction CVM 475, is shown below:

Factors Risk Probable situation

Deterioration of 25%

Deterioration of 50%

Trading portfolio Fixed rate Fixed interest rates in reais (23) (226) (452) Exchange coupons Foreign currency coupon rates (363) (791) (1,581)

Price indexes Price index coupon rates (2) (7) (15) Variable income Share prices (306) (876) (1,753)

Trading and banking portfolio Fixed rate Fixed interest rates in reais (62) (416) (832) Exchange coupons Foreign currency coupon rates (548) (1,062) (2,124) Foreign currency Exchange variations (65) (1,104) (2,208) Price indexes Price index coupon rates (263) (856) (1,711) TR and TJLP TR and TJLP rates (6) (12) Variable income Share prices (306) (876) (1,753)

In compliance with the classification criteria of transactions addressed in BACEN Resolution 4557/17 and Circular 3354/07, and in the Basel III Accord, the financial instruments of the Bank are segregated between the Trading Portfolio (for trade) and the Banking Portfolio (structural). The sensitivity analysis considered the risk factor stress scenarios in all of the Bank's transactions. The high stress reference curve scenarios are generally used when the Bank has a net debt exposure in a particular risk factor. On the other hand, the low risk reference curve scenarios are used when there is a net credit exposure in each risk factor considered for this analysis.


38


Scenario I considers the variations expected by the Bank in relation to the market reference curves used for marking these products to market. Senior management attributes to Scenario I the variations expected for each risk factor, either above or below the reference factors. Scenarios II and III are defined in accordance with CVM Instruction 475, which establishes that the high scenarios should consider variations of +25% and +50% and the low scenarios variations of -25% and -50%. As a result, scenario II is defined by the variation of +/- 25% in relation to the market value of the products comprising each risk factor and scenario III by the variation of +/- 50% in relation to the market value of the products of each risk factor. The variations in the scenarios are based on the expectation of an immediate settlement of all of the Bank's assets and liabilities, and may not necessarily represent a loss or gain since it is a hypothetical situation.

(c) Liquidity risk This is the risk of the possible mismatching of payments and receipts which could affect the Bank's ability to meet one or more of its obligations. It also arises when the funds obtained are insufficient to meet the short, medium and long-term commitments in a position affecting, accordingly, their value. The Bank has a Liquidity Risk Management Policy approved by the Board of Directors and subject to annual review, which establishes the principles, guidelines and responsibilities adopted in the Bank's liquidity risk management, in conformity with the liquidity risk control practices as addressed in Resolution 4557/17. These criteria and procedures establish the liquidity reserve to be maintained in cash in a normal market scenario, as well as the measures to be taken in the event of a liquidity contingency. The Risk Management area is responsible for independently monitoring the Treasury area. The cash flow positions and projections are reported on a daily basis to management. In cases of non-compliance with the established limits, management is immediately informed and must report to the Cash Committee and use the mechanisms necessary for recoupment.

(d) Operational Risk In compliance with legal requirements and in line with best market practices, the Indusval & Partners Group implemented a framework for managing operational risk, consisting of a series of policies, procedures and actions based on their philosophy of ongoing improvement. As defined in BACEN Resolution 4557/17, operational risk is the possibility of the occurrence of financial losses resulting from the failure, deficiency or inadequacy of internal processes, systems or people and/or extend events to the Bank. The Bank adopted the ASA 2 - Alternative Simplified Approach to calculate the capital allocation of the operational risk portion, in line with BACEN Circular 3640/13.


39


(e) Capital management Capital management is one of the Bank's most important activities and the ongoing enhancement of the management and control of credit, market, liquidity and operational risks is essential in achieving stability in financial results and improving capital allocation. In accordance with BACEN Resolution 4557/17, capital management is a permanent process for:

• Capital monitoring and control carried out by the Bank;

• Assessing the need for capital to face the risks to which the Bank is subjected;

• Planning targets and capital requirements, based on the Bank's strategic objectives. The Capital Management Framework will also comprise the Policies related to Risk Management, Credit Risk Management, Market and Liquidity Risk Management, Operational Risk Management and the Disclosure of Risk Information. An efficient capital management process considers the optimization of capital utilization and alignment with the Bank's business strategy and risk appetite. The Capital Management Framework should assist the Executive Board and Board of Directors in managing the Bank based on appropriate and consistent information. The management reports should provide a detailed view of the Bank's risk profile compared to the capital requirements for each type of risk, show how the Capital Plan relates to the results achieved, present action plans to mitigate deviations and disseminate any new rules related to this subject matter. The capital management policies and strategies, in accordance with legislation in force, will be reviewed at least annually by the Bank's Executive Board and Board of Directors, for the purpose of revising their content and ensuring that the Bank's strategic planning is in line with market conditions. Pursuant to CMN Resolution 4192/13, Reference Equity (RE) mainly comprises the sum of Tier I capital and Tier II capital. Tier I RE consists of the sum of amounts of equity, income accounts and deposits in linked accounts meant to make up for capital deficiencies. Tier II RE consists of the sum of amounts corresponding to revaluation reserves, contingency reserves and special profit reserves related to non-distributed mandatory dividends, plus the amounts corresponding to hybrid capital and debt instruments, subordinated debt instruments, preferred shares issued with repayment clause and preferred shares with cumulative dividends issued by financial institutions and other institutions authorized to function by the Brazilian Central Bank; non-realized gains and losses due to market value adjustments in securities classified as available for sale.


40


The calculation of the Bank's regulatory capital for risk coverage is based on BACEN Resolution 4193/13, which addresses the criteria used to determine minimum Reference Equity (RE) requirements, of Tier I and Principal Capital and establishes the Principal Capital Additional. The Risk Weighed Assets (RWA) comprise the portions of credit risk, market risk - comprised by the risks of the exposure to gold, foreign currencies and transactions subject to exchange rate variations, transactions subject to interest rate variations, transactions subject to commodity price variations and transactions subject to variations in the price of shares, and operational risk. Compliance with the regulatory capital limits is strictly monitored daily by the Risk area. At March 31, 2018, the Bank's Basel ratio was -6.86% (2.34% at December 31, 2017), calculated based on the consolidated financial information. 03/31/2018 12/31/2017

Reference equity (RE) (106,685) 40,749

Reference equity - Level I (106,685) 40,749

Main capital (106,685) 40,749

Equity 201,747 270,860 Mark-to-market adjustments 265,292 230,111 Excess of permanent assets 43,140Complementary capital Risk weighted assets (RWA) 1,554,314 1,738,626

RWA credit risk (RWA cpad) 1,342,340 1,530,805 RWA Market risk (RWA mpad) 46,898 47,461 RWA operational risk (RWA opad) 165,076 160,360 Capital - Main - % -6.86% 2.34%Capital - Tier I - % -6.86% 2.34%Basel ratio - % -6.86% 2.34%

At March 31, 2018, the Bank's Minimum Reference Equity Requirement was lower than that established by Resolution 4193/13. The Bank is preparing an action plan to adjust the limit mentioned above. One is the disposal of its part of shareholding in Guide Investimentos, as mentioned in note 9(a)(1).


41


(f) Market value of financial instruments In accordance with CMN Resolution 4277/13, the Bank has established procedures to assess the need for adjustments in the valuation of financial instruments at market value, verifying the criteria of prudence, relevance and reliability. The financial instruments mentioned in this resolution are:

• Securities classified as "trading securities" and "available for sale", according to BACEN Circular 3068/01;

• Derivative financial instruments mentioned in BACEN Circular 3082/02; and

• Other financial instruments measured at fair value, irrespective of their classification in the trading portfolio, established in Resolution 3464/07.

03/31/2018 12/31/2017 Book value Market value Book value Market value

Assets

Interbank deposits 28,798 28,798 28,404 28,404 Investments in foreign currency 62 62 49,691 49,691 Marketable securities 703,483 703,483 775,139 775,139 Loan operations

Originated loans 409,186 407,198 517,881 506,846 Trade finance 218,287 221,750 230,390 233,682 Acquired credits 25,093 30,684 25,486 27,360

Liabilities

Interbank deposits 29,018 29,018 28,537 28,537 Time deposits 1,556,163 1,555,914 1,513,019 1,511,422 Funds from real estate letters of credit, mortgage notes

and similar 462,304 459,112 522,065 518,632 Onlendings 11,047 11,047 13,532 13,532 Loans of shares 1,691 1,691 Equity securities (short sales) 438 438 18 18


42


17 Related Parties

(a) Subsidiaries and Joint ventures The transactions between the parent company and its subsidiaries and joint ventures were carried out at normal market rates and terms on a commutative basis, and comprise the following: 03/31/2018 12/31/2017

Assets Income Assets Income Linked with Institution Contract objective and characteristics (liabilities) (expenses) (liabilities) (expenses) Banco Indusval S.A. and subsidiaries

Demand deposits

(14,236) (6,669)

Interbank deposits: 100% to 109% of CDI at maturity

(19,792) (312) (19,907) 647

Time deposits: from 100% to 115% of CDI after grace period

(1,277) (11) (1,246) (2)

Repo operations: Treasury SELIC and Treasury IPCA from 10.15% to 13.65%p.a.

(7,286) (46) (17,065) (709)

Other receivables/payables 60 103 416 (331) Pending settlement 1,061 Joint ventures Demand deposits (1) Time deposits: 100% of CDI after grace period (85) (1) (83) (3)

(b) Other transactions with related parties - intergroup contract balances

Link with Institution Contract objective and characteristics 03/31/2018 12/31/2017

Management Demand deposits 177 Time deposits: from 108% to 120% of the CDI after grace period 5,758 5,833 LCA: from 96% to 100% of the CDI at maturity 1,499 1,704 LCI: from 95% a 102% of the CDI at maturity 70 Repo operations: Debentures 85% of the CDI 5,397 Companies linked to management Demand deposits 202 809 Time deposits: from 107% to 115% of the CDI after grace period 38,454 30,526 Repo operations: Treasury SELIC Prefixed from 6.2% to 12.95%p.a. 11,606 11,586 People linked to management Demand deposits 174 493 Time deposits: from 100% to 120% of the CDI after grace period 19,623 17,523 LCA: from 93% to 102% of the CDI at maturity 2,837 4,624 LCI: from 100% to 102% of the CDI at maturity 347 291 Repo operations: Debentures Prefixed from 3,5 p.a. + 85% from the CDI 357 8,079 Associated companies Demand Deposits 1 Intangible assets: CPR Business exclusivity agreement 3,930 4,257 84,965 91,192


43


(c) Remuneration of key management personnel 03/31/2018 03/31/2017 Short-term benefits 1,065 1,526 Long-term benefits 16 18 1,081 1,544

In accordance with CMN Resolution 3921/10, the financial institutions that operate as listed companies or that are required to establish an Audit Committee should establish a Remuneration Committee responsible for carrying out and verifying compliance with the requirements of this resolution in preparing their management remuneration policies (Executive Board and Board of Directors). This committee must prepare the Bank's annual "Remuneration Committee Report" containing a series of information on management remuneration.

18 Management of Investment Funds Balance – Equity 03/31/2018 12/31/2017

Duna FICFI Multimercado Crédito Privado 13,826 13,835

13,826 13,835

19 Supplementary Information

(a) Guarantees and sureties - Indusval & Partners Consolidated 03/31/2018 12/31/2017 Sureties - financial institutions 5,004 4,987 Sureties - individuals and non-financial companies 149,847 156,905 154,851 161,892

(b) Guide Investimentos

The subsidiary Guide Investimentos S.A. Corretora de Valores operates as an intermediary in the trading of contracts in the forward, futures and options markets totaling R$ 4,823,498 (R$ 4,758,902 at December 31, 2017), and is also responsible for the custody of customers' securities totaling R$ 18,610,485 (R$ 4,400,831 at December 31, 2017), deposited in B3 S.A. - Brasil, Bolsa, Balcão, and Central System for Custody and Financial Settlement of Securities (CETIP).

(c) Strategic partnership between Banco Indusval S.A. and The Hive BR Holding, LLC: Banco Intercap S.A. On December 04, 2017, Banco Indusval announced an association with The Hive, a company based in Palo Alto with offices in India and Brazil and company focused on implementing disruptive technologies in several sectors, for the creation of a digital platform, with an initial focus to provide banking products, including credit, to Small and Medium-sized Companies (“SMCs”). The project will be developed within Banco Intercap S.A..


44


(d) Service agreement - CVM Instruction 381 The policy of the Bank and its subsidiaries for contracting services unrelated to the external audit is based on the applicable regulations and on internationally accepted principles which safeguard the independence of the auditors. These principles establish that the auditors: (i) should not audit their own work; (ii) should not perform management functions for their clients; and (iii) should not promote the interests of their clients. In the first quarter of 2018 and the prior year, the independent auditors and their related parties rendered no services that were not related to the external audit.

(e) Insurance cover The Bank has insurance contracts to cover risks related to property and equipment. Management considers the amount sufficient to cover potential losses.


Consolidated / Balance Sheet - Assets


Account Account Description Current Quarter Prior YearCode 03/31/2018 12/31/20171 Total assets 2,703,731 2,655,217 1.01 Current assets 1,593,941 1,516,308 1.01.01 Cash 19,742 9,198 1.01.02 Short-term Interbank Investments 478,910 322,126 1.01.02.01 Open market investments 450,050 244,031 1.01.02.02 Interbank deposits 28,860 78,095 1.01.03 Marketable securities 667,924 740,696 1.01.03.01 Own portfolio 530,162 581,899 1.01.03.02 Subject to repurchase agreements 12,599 11,586 1.01.03.03 Subject to guarantees 125,161 147,180 1.01.03.04 Derivative financial instruments 2 31 1.01.04 Interdepartmental accounts 673 541 1.01.04.01 Unsettled payments and receipts 135 - 1.01.04.02 Restricted deposits - Brazilian Central Bank 519 540 1.01.04.03 Restricted deposits - Agreements 19 1 1.01.06 Loan operations 241,399 268,035 1.01.06.01 Private sector 253,328 279,367 1.01.06.03 Allowance for loan losses (11,929) (11,332) 1.01.08 Other receivables 182,335 167,078 1.01.08.01 Foreign exchange portfolio 56,700 52,675 1.01.08.02 Income Receivable 2,543 2,247 1.01.08.03 Negotiation and intermediation of securities 77,594 83,509 1.01.08.04 Sundry 66,659 32,081 1.01.08.06 Allowance for loan losses (21,161) (3,434) 1.01.09 Other assets 2,958 8,634 1.01.09.01 Non-operating assets 655 7,745 1.01.09.03 Prepaid expenses 2,303 889 1.02 Long-term receivables 1,047,675 1,077,733 1.02.02 Marketable securities 35,561 34,475 1.02.02.01 Own portfolio 15,381 8,231 1.02.02.02 Subject to repurchase agreements 20,180 26,244 1.02.03 Interbank accounts 2,712 2,669 1.02.03.01 Restricted deposits - Agreements 2,712 2,669 1.02.05 Loan operations 174,477 218,433 1.02.05.01 Private sector 225,009 251,342 1.02.05.03 Allowance for loan losses (50,532) (32,909) 1.02.07 Other receivables 595,491 584,067 1.02.07.01 Credits for guarantees honored - 4,456 1.02.07.02 Sundry 631,403 686,624 1.02.07.03 Allowance for loan losses (39,367) (110,459) 1.02.07.05 Income Receivable 2,966 2,936 1.02.07.06 Negotiation and intermediation of securities 489 510 1.02.08 Other assets 239,434 238,089 1.02.08.01 Prepaid expenses 1,515 2,818 1.02.08.02 Non-operating assets 257,208 251,941 1.02.08.03 Provision for losses (19,289) (16,670)


Consolidated / Balance Sheet - Assets


Account Account Description Current Quarter Prior YearCode 03/31/2018 12/31/20171.03 Permanent assets 62,115 61,176 1.03.01 Investments 17,868 17,986 1.03.01.02 Investments in associated companies 16,147 16,265 1.03.01.02.01 Local 16,147 16,265 1.03.01.04 Other investments 1,721 1,721 1.03.02 Property and equipment in use 3,977 4,466 1.03.02.03 Other - Property and equipment in use 25,262 25,555 1.03.02.04 Accumulated depreciation (21,285) (21,089) 1.03.04 Intangible assets 40,270 38,724 1.03.04.01 Other intangible assets 41,552 37,647 1.03.04.02 Goodwill 28,702 28,702 1.03.04.03 Accumulated amortization (29,984) (27,625)


Consolidated / Balance Sheet - Liabilities and Equi ty


Account Account Description Current Quarter Prior YearCode 03/31/2018 12/31/20172 Total liabilities 2,703,731 2,655,217 2.01 Current liabilities 1,397,161 1,255,421 2.01.01 Deposits 667,129 598,547 2.01.01.01 Demand deposits 14,032 16,677 2.01.01.02 Interbank deposits 29,018 28,537 2.01.01.03 Time Deposits 624,079 553,333 2.01.02 Funds obtained in the open market 145,470 46,373 2.01.02.01 Own portfolios 32,559 37,372 2.01.02.02 Third-party portfolios 112,911 9,001 2.01.03 Funds from acceptance and issuance of securities 370,096 414,196 2.01.03.01 Agribusiness, Real estate and Financial credit bills 370,096 414,196 2.01.04 Interbank accounts 269 - 2.01.04.01 Unsettled receipts and payments 269 - 2.01.05 Interdepartmental accounts 3,213 6,095 2.01.05.01 Third-party funds in transit 3,213 6,095 2.01.07 Local Onlendings 3,017 5,229 2.01.07.01 BNDES 830 1,375 2.01.07.02 FINAME 2,187 3,854 2.01.09 Other liabilities 207,967 184,981 2.01.09.01 Collection and payment of taxes and similar 87 71 2.01.09.02 Foreign exchange portfolio 9,625 397 2.01.09.03 Taxes and social security contributions 5,249 6,660 2.01.09.04 Social and statutory payables 4,552 8,853 2.01.09.05 Negotiation and intermediation of securities 174,321 137,970 2.01.09.06 Derivative financial instruments 578 2,721 2.01.09.07 Sundry 13,555 28,309 2.02 Long-term liabilities 1,099,910 1,123,700 2.02.01 Deposits 932,084 959,686 2.02.01.02 Time Deposits 932,084 959,686 2.02.03 Funds from acceptance and issuance of securities 92,208 107,869 2.02.03.01 Agribusiness, Real estate and Financial credit bills 92,208 107,869 2.02.07 Local Onlendings 8,030 8,303 2.02.07.02 FINAME 3,878 4,245 2.02.07.03 Other institutions 190 190 2.02.07.04 National Treasury 3,962 3,868 2.02.09 Other liabilities 67,588 47,842 2.02.09.01 Taxes and social security contributions 368 69 2.02.09.03 Sundry 67,220 47,773 2.03 Deferred income 3,792 4,112


Consolidated / Balance Sheet - Liabilities and Equi ty


Account Account Description Current Quarter Prior YearCode 03/31/2018 12/31/20172.05 Equity 202,868 271,984 2.05.01 Capital 849,843 849,843 2.05.01.01 Local capital 849,843 849,843 2.05.02 Capital reserves 35,960 35,960 2.05.04 Profit reserves (4,283) (4,283) 2.05.04.05 Profit retention (4,283) (4,283) 2.05.04.05.01 Treasury shares (4,283) (4,283) 2.05.05 Carrying value adjustments (200) (198) 2.05.05.01 Mark-to-market adjustments on marketable securities (200) (198) 2.05.06 Retained earnings (accumulated deficit) (679,573) (610,462) 2.05.07 Minority interest in subsidiary 1,121 1,124


Consolidated / Statement of Operations




Prior YearCode 01/01/2018 to 03/31/2018 01/01/2017 to 03/31/20173.01 Income from financial intermediation 47,276 112,073 3.01.01 Loan operations 13,625 38,014 3.01.02 Marketable securities 27,947 62,307 3.01.03 Derivatives 1,238 7,155 3.01.04 Foreign exchange 4,466 4,597 3.02 Expenses for financial intermediation (111,959) (112,703) 3.02.01 Funds obtained in the market (39,411) (101,264) 3.02.02 Loans and onlendings (3,231) (2,002) 3.02.03 Sales/transfers of financial assets - (76) 3.02.04 Allowance for loan losses (69,317) (9,361) 3.03 Net profit/(loss) from financial intermediation (64,683) (630) 3.04 Other operating income/(expense) (25,629) (24,001) 3.04.01 Income from services rendered 30,894 19,884 3.04.02 Personnel expenses (22,656) (20,746) 3.04.03 Other administrative expenses (28,152) (22,020) 3.04.04 Taxes (3,708) (2,870) 3.04.05 Other operating income 19,343 125,487 3.04.06 Other operating expenses (21,769) (124,467) 3.04.07 Equity in the earnings of subsidiaries and associated companies 419 731 3.05 Operating profit (loss) (90,312) (24,631) 3.06 Non-operating income/(expenses) (2,302) (1,130) 3.06.01 Revenue 548 927 3.06.02 Expenses (2,850) (2,057) 3.07 Profit (loss) before taxation (92,614) (25,761) 3.08 Provision for income tax and social contribution (1,045) (1,262) 3.08.01 Income tax (596) (754) 3.08.02 Social contribution (449) (508) 3.09 Deferred income tax 28,969 (404) 3.10 Profit Sharing and Statutory Contributions (4,436) (4,172) 3.10.01 Profit Sharing (4,436) (4,172) 3.10.01.01 Employees (4,436) (4,172) 3.13 Net income (loss) for the period (69,126) (31,599) 3.13.01 Attributable to controlling interest (69,111) (31,446) 3.13.02 Attributable to minority interest (15) (153)


Consolidated / Statement of Comprehensive Income




Prior YearCode 01/01/2018 to 03/31/2018 01/01/2017 to 03/31/20174.01 Net income (loss) for the period (69,126) (31,599) 4.02 Other comprehensive income (expense) (2) (190) 4.02.01 Carrying value adjustments (2) (190) 4.03 Comprehensive income (loss) for the period (69,128) (31,789) 4.03.01 Attributable to controlling interest (69,113) (31,636) 4.03.02 Attributable to minority interest (15) (153)


Consolidated / Statement of Cash Flows - Indirect M ethod




Prior YearCode 01/01/2018 to 03/31/2018 01/01/2017 to 03/31/20176.01 Net cash provided by (used in) operating activities 64,565 (7,688) 6.01.01 Cash from operations 6,989 (39,045) 6.01.01.01 Net income (loss) (69,126) (31,599) 6.01.01.02 Allowance for loan losses 69,317 9,361 6.01.01.03 Provision for loss on non-operating assets 2,619 856 6.01.01.04 Provision for contingencies 3,276 1,737 6.01.01.05 Depreciation and amortization 3,167 2,869 6.01.01.06 Equity in the earnings of subsidiaries and associated companies (419) (731) 6.01.01.07 Gain on sale of tangible assets (316) 315 6.01.01.08 Gain/(loss) on sale of investments (1) - 6.01.01.10 Market to market adjustment – Marketable securities and derivatives (1,528) (21,853) 6.01.02 Changes in assets and liabilities 57,576 31,357 6.01.02.01 Short-term interbank investments (104,303) (37,134) 6.01.02.02 Marketable securities and derivatives 71,074 174,553 6.01.02.03 Loan operations 39,576 64,752 6.01.02.04 Other receivables and other assets (65,093) 9,233 6.01.02.05 Interbank and interdepartmental accounts (2,788) (5,584) 6.01.02.06 Deposits 40,980 54,372 6.01.02.07 Repo Operations 99,096 (103,114) 6.01.02.08 Agribusiness, Real estate and Financial credit bills (59,761) (130,906) 6.01.02.09 Borrowings and onlendings (2,484) (6,241) 6.01.02.10 Other liabilities 41,599 11,786 6.01.02.11 Deferred income (320) (360) 6.02 Net cash provided by (used in) Investing activities (1,553) 1,322 6.02.01 Disposal of tangible assets 10,196 8,664 6.02.02 Purchases of tangible assets (7,988) (6,156) 6.02.03 Purchases of intangible assets (3,905) (1,710) 6.02.05 Disposal of investments 1 475 6.02.06 Dividends received 143 49 6.03 Net cash provided by (used in) financing activities 12 - 6.03.03 Increase / (decrease) in minority interest 12 - 6.05 Increase / (decrease) in cash and cash equivalents 63,024 (6,366) 6.05.01 Opening balance of cash and cash equivalents 293,919 725,093 6.05.02 Closing balance of cash and cash equivalents 356,943 718,727


Consolidated / Statement of Changes in Equity - 01/ 01/2018 to 03/31/2018



CapitalReserves

RevaluationReserves

Revenue Reserves


Carrying value adjustments

Equity of the controlling interest Minority interest Total

5.01 Opening balance 849,843 35,960 - (4,283) (610,462) (198) 270,860 1,124 271,984

5.03 Adjusted balance 849,843 35,960 - (4,283) (610,462) (198) 270,860 1,124 271,984

5.04 Profit / (loss) for the period - - - - (69,111) - (69,111) (15) (69,126)

5.07 Carrying value adjustments - - - - - (2) (2) - (2)

5.12 Others - - - - - - - 12 12 5.12.03 Increase / (decrease) in minority interest - - - - - - - 12 12

5.13 Closing balance 849,843 35,960 - (4,283) (679,573) (200) 201,747 1,121 202,868


Consolidated / Statement of Changes in Equity - 01/ 01/2017 to 03/31/2017



CapitalReserves

RevaluationReserves

Revenue Reserves


Carrying value adjustments

Equity of the controlling interest Minority interest Total

5.01 Opening balance 849,843 35,960 - (4,283) (387,566) (126) 493,828 1,396 495,224

5.03 Adjusted balance 849,843 35,960 - (4,283) (387,566) (126) 493,828 1,396 495,224

5.04 Profit / (loss) for the period - - - - (31,446) - (31,446) (153) (31,599)

5.07 Carrying value adjustments - - - - - (190) (190) - (190)

5.13 Closing balance 849,843 35,960 - (4,283) (419,012) (316) 462,192 1,243 463,435


Consolidated / Statement of Value Added


Account Account DescriptionCode 01/01/2018 to 03/31/2018 01/01/2017 to 03/31/20177.01 Revenues 25,894 246,911 7.01.01 Financial intermediation 47,276 112,073 7.01.02 Services rendered and bank fees 30,894 19,884 7.01.03 Allowance for loan losses (69,317) (9,361) 7.01.04 Others 17,041 124,315 7.02 Expenses for financial intermediation (42,642) (103,342) 7.03 Goods and services acquired from third parties (44,800) (141,545) 7.03.01 Materials, electricity and others (10,717) (9,058) 7.03.02 Third-party services (13,402) (9,138) 7.03.04 Others (20,681) (123,349) 7.04 Gross value added (61,548) 2,024 7.05 Retentions (3,167) (2,869) 7.05.01 Depreciation and amortization (3,167) (2,869) 7.06 Net value added produced by the Institution (64,715) (845) 7.07 Value added transferred from others 419 772 7.07.01 Equity in the results of investees 419 731 7.07.02 Others - 41 7.08 Total value added to be distributed (64,296) (73) 7.09 Distribution of value added (64,296) (73) 7.09.01 Personnel 24,106 21,677 7.09.01.01 Salaries 18,628 17,860 7.09.01.02 Benefits 4,041 2,987 7.09.01.03 Employee severance indemnity fund (FGTS) 1,437 830 7.09.02 Taxes, charges and contributions (21,220) 7,785 7.09.02.01 Federal (22,794) 6,702 7.09.02.02 State 2 3 7.09.02.03 Municipal 1,572 1,080 7.09.03 Remuneration of third-party capital 1,944 2,064 7.09.03.01 Rents 1,944 2,064 7.09.04 Remuneration of own capital (69,126) (31,599) 7.09.04.03 Retained earnings / (loss) for the period (69,111) (31,446) 7.09.04.04 Non-controlling interest (15) (153)

Accumulated Current Year

Accumulated Prior Year

(A free translation of the original in Portuguese)


Opinions and Statements / Report on Special Review Report on Review of Quarterly Information To the Board of Directors and Shareholders of Banco Indusval S.A. (Indusval & Partners) Introduction We have reviewed the accompanying parent company and consolidated interim accounting information of Banco Indusval S.A. (Indusval & Partners) and Banco Indusval S.A. and its subsidiaries (Indusval & Partners Consolidated), included in the Quarterly Information Form (ITR) for the quarter ended March 31, 2018, comprising the balance sheet at that date and the statements of operations, and comprehensive income, and the statements of changes in equity and cash flows for the quarter then ended, and a summary of significant accounting policies and other explanatory information. Management is responsible for the preparation of the interim accounting information in accordance with accounting practices adopted in Brazil, applicable to institutions authorized to operate by the Brazilian Central Bank (BACEN), as well as the presentation of this information in accordance with the standards issued by the Brazilian Securities Commission (CVM), applicable to the preparation of the Quarterly Information (ITR). Our responsibility is to express a conclusion on this interim accounting information based on our review. Scope of the review We conducted our review in accordance with Brazilian and International Standards on Reviews of Interim Financial Information (NBC TR 2410 – Review of Interim Financial Information Performed by the Independent Auditor of the Entity and ISRE 2410 – Review of Interim Financial Information Performed by the Independent Auditor of the Entity, respectively). A review of interim information consists of making inquiries, primarily of persons responsible for financial and accounting matters and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Brazilian and International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Conclusion on the interim information Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim accounting information included in the Quarterly Information referred to above has not been prepared, in all material respects, in accordance with accounting practices adopted in Brazil, applicable to the preparation of the Quarterly Information by institutions authorized to operate by the BACEN and presented in accordance with the standards issued by the CVM.



Emphasis Tax credits (deferred tax assets) As described in note 8a, there were, as of March 31, 2018, tax credits recorded in assets, in the amount of R$ 450 million in Banco Indusval S.A. and its subsidiaries. Management of Indusval & Partners Consolidated recorded these tax credits support by a projection study for their realization. This projection of realization of tax credits was prepared by the management of Banco Indusval S.A. and is in line with the semi-annual study prepared by Management for the base date of December 31, 2017, which was duly approved by the Board of Directors on March 23, 2018. The main assumptions used were macroeconomic indicators, production and cost of funding. The realization of these tax credits, in the estimated period of realization, depends on the materialization of these projections and the business plan in the form approved by the management bodies. Our conclusion is not qualified in respect to this matter. Operational limit and sale of investment As of March 31, 2018, Banco Indusval S.A. and its subsidiaries have an operating limit lower than that established by Resolution No. 4,193 / 13, as described in Note 16e. The Bank is preparing a plan of actions for re-framing the minimum limits mentioned above. As part of this plan, as explained in note 9a (1), on February 26, 2018, the Bank entered into a purchase and sale agreement for a portion of its interest in the subsidiary Guia Investimentos S.A. Corretora de Valores, for the Fosun group. This transaction is subject to the approval of the Central Bank of Brazil. Our conclusion is not qualified in respect to this matter. Other matters Interim statements of value added We have also reviewed the parent company and consolidated interim statements of value added for the quarter ended March 31, 2018. These statements are the responsibility of the Institution’s management, and are required to be presented in accordance with standards issued by the CVM applicable to the preparation of Quarterly Information (ITR). These statements have been submitted to the same review procedures described above and, based on our review, nothing has come to our attention that causes us to believe that they have not been prepared, in all material respects, in a manner consistent with the interim financial information taken as a whole. São Paulo, May 18, 2018. PricewaterhouseCoopers Auditores Independentes CRC 2SP000160/O-5 Carlos Augusto da Silva Contador CRC 1SP197007/O-2



Opinions and Statements / Executive Board Statement on the Financial Statements Statement The undersigned members of the Executive Board of Banco Indusval S.A., under the terms of Article 25 paragraph 1 item

VI of CVM Instruction 480 dated December 7, 2009, STATE that they have reviewed the Financial Statements of Banco

Indusval S.A. for the quarter ended March 31, 2018, and based on the discussions held, they agree that the Financial

Statements adequately reflect the relevant aspects and the financial position of the Bank for the period reported.

São Paulo, May 18, 2018. JAIR RIBEIRO DA SILVA NETO CPF/MF 022.718.058-56 LUIZ MASAGÃO RIBEIRO CPF/MF 525.253.688-00 ANDRE JACINTHO MESQUITA CPF/MF 071.767.968-31 CLAUDIO ROBERTO CUSIN CPF/MF 051.156.318-30 JAIR DA COSTA BALMA CPF/MF 783.929.188-00



Opinions and Statements / Executive Board Statement on the Auditor’s Report Statement The undersigned members of the Executive Board of Banco Indusval S.A., under the terms of Article 25 paragraph 1 item

V of CVM Instruction 480 dated December 7, 2009, STATE that to the best of their knowledge and based on the work

plan presented by the independent auditors and the discussions held on the results of the auditing process, they agree

with the opinion issued by PricewaterhouseCoopers Auditores Independentes, and that there are no disagreements.

São Paulo, May 18, 2018.

JAIR RIBEIRO DA SILVA NETO CPF/MF 022.718.058-56 LUIZ MASAGÃO RIBEIRO CPF/MF 525.253.688-00 ANDRE JACINTHO MESQUITA CPF/MF 071.767.968-31 CLAUDIO ROBERTO CUSIN CPF/MF 051.156.318-30 JAIR DA COSTA BALMA CPF/MF 783.929.188-00

outros quadros para tradução itr 1ºt 2018 - inglÊs · 01/01/2018 to 03/31/2018 9 01/01/2017 to...

Documents