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Scenario and Strategy

Economic Scenario

The first half of 2020 was marked by highly uncertainties in the global scenario, due to the Covid-19 pandemic, although the number of new cases has shown significant reduction in several regions, especially in Asia and in Europe. In the opposite direction, in many parts of the world the disease has not been controlled and cases keep increasing, as is the situation in some states in USA and in various emerging countries, particularly those in Latin America. In this environment, the prospects for loosening social distancing measures have evolved below expectations, with impacts inthe activity indicators, which continued showing predominantly unfavorable readings, with minor improvementsimprovements during the second quarter that were not enough to avoid forecasts of lower growth for the major world’s economies and, consequently, the global GDP.

Especially in China, primary source of the disease, the restrictions began to be removed throughout the second quarter, trend that, in connection to measures towards fiscal and monetary support, exercised positive influence into monitors of activity, especially within the industrial and service segments. In line, Europe, that passed though severe difficulties fighting Covid-19 in the first months of the year, has seen a gradual reduction in the number of new cases, allowing in several countries the partial return of economic activities, dynamics that, together with monetary actions actively implemented by the European Central Bank, helped increase confidence indicators and support household consumption, hence improving retail business and industry performance in important economies of the region. As to the USA, the problems related to the restraint of Coronavirus and the various peaking times of the pandemic in the states substantially penalized economic activities, leading to the imposition of several restrictions during most part of the half-year period, aiming to avoid an even more accelerated spread of the disease.

In Brazil, the social distancing measures aiming at restraining the virus that started at the end of the first quarter in several states was later relaxed in many regions, causing the increase of new Covid-19 cases and the occupancy rate of intensive care units, which led the World Health Organization to consider the country the new pandemic epicenter. Therefore, the already struggling economy was highly penalized in all economic sectors, deteriorating both consumers and business confidence indicators. With this, the pre-Coronavirus high idleness dove further, contributing to maintain prices at very comfortable prices, despite the ongoing devaluation of the Real against the US Dollar, with exchange rate reaching R$5.48/US$1.00 at the end of June, a depreciation of 36.2% since January. Facing this context, the Central Bank of Brazil continued the cycle of loosening monetary measures, driving the Selic Interest Rate down to its new historical low of 2.25% per year, in addition to keeping and announcing measures towards extending credit payment conditions, which, together with the Federal Government Emergency measures, tends to avoid the increase in defaults and an even worse drop of the GDP.

In Rio Grande do Sul, even though only recently the Covid-19 cases have increased, the adoption of several social distancing measures since the end of the first quarter have brought negative economic impacts to the region, reflected into the significant decrease of industrial production, retail sales and in the services sector. Thus, the state’s unfavorable foreign trade performance in the period, in which the positive balance of US$3.5 billion accumulated in the first six months of 2020 dropped against the US$4.9 billion recorded in the same period of 2019, with exports and imports decreasing 26.3% and 23.7%, respectively.

Corporate Strategy

Banrisul is a retail bank whose Mission is to be the most important financial agent within Rio Grande do Sul, helping promote the economic and social development of the State. Taking not only its Mission into consideration, but also the Vision of being a profitable, solid and competitive public Bank, fully integrated with the communities and providing services with excellence, the Company‘s strategy was structured based on five pillars that drive its efforts

Essence: reinforce the commitment to being a retail bank, with a focus on Rio Grande do Sul. To do this, it heavily invests in financial products for micro and small companies, and also for the agricultural sector, which is the basis of the economic development of the state. It is worth mentioning that such commitment helps Banrisul consolidate its mission, as well as bringing the Company closer to and strengthening customers’ relations.

Employees: for Banrisul, the strength of its employees is key to achieve organizational success. To this end, the Bank has developed a challenging, agile environment, fostering the engagement and improving the management of human resources.

Efficiency: the Institution focuses on the efficiency of management, centering objectives on faster, simplified processes, improving IT infrastructure and architecture, improving risk management and also adhering to best management practices.

Transformation: following the path of transformation, through the implementation of new business models and new technologies, to maintain Banrisul’s competitiveness.

Customer: considering the similarity of products offered in the financial market, the entry of new competitors and the targeting of customers by perception of value and innovation, Banrisul intensifies focus on customer, in order to provide the best experience in financial solutions and raise their level of satisfaction.

Business Strategy

Regarding its business strategy, the Company reinforces services to retail customers in the individual segment and expand the service to small and medium-sized companies. In this sense, the main highlights and strategies for these customers are detailed below.

The focus of commercial activity in the individual segment prioritizes, within the public sector, particularly payroll credit lines offered to civil servants and INSS retirees, as well as the to improve relationship with self-employed professionals, young public and high net-worth customers.

As for companies, the commercial drive is towards medium, small companies and micro-enterprises, focusing on the offering of credit products for collateralized working capital, which encompasses the acquisition of goods, investments in sustainable projects, advancement of receivables, receivable-backed working capital lines and credit cards, as well as the supply of acquiring equipment by Vero and services such as collection, payroll management and general management of electronic payments.

In relation to earmarked credit lines, the Bank promotes agricultural loans for funding, investment, marketing and industrialization of agricultural goods, serving family farmers, medium-sized producers, business farmers and rural cooperatives.

The diversification of the service fees portfolio as a way of generating revenues for the Institution is an important factor for covering fixed costs. Thus, the Bank focuses efforts on products such as credit cards, acquiring network, consortium and insurance, increasing the number of products used by its customers.


Contact IR

Phone: +55 51 3215-3232
E-mail: ri@banrisul.com.br

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