Inter & Co, Inc (the Company and, together with its consolidated subsidiaries, the Group) is a holding company incorporated in the Cayman Islands, with limited liability. Inter&Co is the controlling company of the group Inter and indirectly holds all the shares in Banco Inter.

Inter provides e-commerce and financial services, these solutions are offered in a single digital ecosystem that includes a complete range of banking services, investments, credit, insurance, and cross-border banking, as well as a marketplace that brings together the largest retailers in Brazil and in the United States.

As of June 30, 2024 we surpassed a total of 33.3 million customers. The activation rate reached 55.3%, an increase of 3.1 percentage points when compared to June 30, 2023.

The balance of loan operations reached R$33.0 billion, representing a positive variation of 10.7% compared to December 31, 2023.

As of June 30, 2024 we achieved an accumulated profit of R$417.9 million, representing a significant increase of 372.8% in compared to the previous period ending June 30, 2023.

As of June 30, 2024, revenues reached R$2,879.5 million, marking an increase of R$705.4 million compared to the same period in 2023.

Accumulated administrative and personnel expenses incurred as of June 30, 2024, totaled R$(1,192.7) million, an increase of R$(100.6) million compared to June 30, 2023.

Total assets reached R$R$66.6 billion as of June 30, 2024, an increase of 10.3% compared to December 31, 2023.

Shareholder’s equity totaled R$8.6 billion, an increase 13.3% compared to December 31, 2023.

The Company also has a policy with requirements for contractual risk analysis which defines that the Board of Directors must evaluate the transparency, objectivity, governance aspects and the compromising of the independence of the contract, thus ensuring conformity between the parties involved. Additionally, it has an Audit Committee which, among its responsibilities and competencies, in addition to providing opinions and recommendations on the audit service provider, also evaluates the effectiveness of the independent and internal audits, including with regard to the verification of compliance with legal provisions and regulations applicable to Inter, as well as internal policies and codes.

Furthermore, Inter&Co, Inc. confirms that KPMG Auditores Independentes Ltda. has procedures, policies, and controls in place to ensure its independence, which include an evaluation of the work provided, covering any service other than the independent audit of Company's financial information. This evaluation is based on the applicable regulations and accepted principles that preserve the auditor's independence. The acceptance and performance of non-audit professional services on the financial Information by its independent auditors during the period ended as of June 30, 2024 did not affect the independence and objectivity in the conduct of the audit work performed at Inter & Co, Inc. Information related to independent auditors' fees is made available annually in the reference form.

We would like to thank our shareholders, customers, and partners for their trust, as well as each of our employees who build our history each day.

Belo Horizonte, August 05, 2024.

The Management

KPMG Auditores Independentes Ltda
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kpmg.com.br

To the Shareholders, Board of Directors and Management of

Inter & Co, Inc.

We have reviewed the condensed consolidated interim financial information of Inter & Co. Inc. ("Company"), included in the Interim Financial Information Form for the quarter ended June 30, 2024, which comprise the balance sheet as of June 30, 2024, and the statements of profit or loss, comprehensive income (loss) for the three-month and six-month periods then ended and changes in equity and cash flows for the three-month period then ended, including the explanatory notes.

Management is responsible for the preparation and presentation of this condensed consolidated interim financial information in accordance with IAS 34 Interim Financial Reporting, issued by the International Accounting Standards Board – (IASB). Our responsibility is to express a conclusion on this condensed consolidated interim financial information based on our review.

We conducted our review in accordance with Brazilian and international review standards on 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 financial information consists of making inquiries, primarily of people 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 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.

Based on our review, nothing has come to our attention that causes us to believe that the condensed consolidated interim financial information referred to above is not prepared, in all material respects, in accordance with IAS 34, applicable to the preparation of interim financial information.

Belo Horizonte, August 6, 2024

KPMG Auditores Independentes Ltda.

CRC SP 014428/O-6 F-MG

(Amounts in thousands of Brazilian reais, unless otherwise stated)

1.Activity and structure of Inter & Co, Inc. and its subsidiaries

Inter&Co, Inc. (“Inter&Co”), is a company incorporated in the Cayman Islands with limited liability, as of January 26, 2021.

Inter&Co, Inc. is registered with the U.S. Securities and Exchange Commission (“SEC”). Common shares are traded on Nasdaq under the symbol “INTR” and Brazilian Depositary Receipts (“BDRs”) are traded on B3 - Brasil, Bolsa, Balcão (“B3”), the Brazilian stock exchange, under the symbol “INBR32” .

2.Basis for preparation

a.Compliance statement

The Group's Unaudited interim condensed consolidated financial statements was prepared in accordance with IAS 34 - interim financial reports issued by the International Accounting Standards Board (IASB).

This Unaudited interim condensed consolidated financial statements was prepared following the preparation basis and accounting policies consistent with those adopted in the preparation of the consolidated financial statements of Inter&Co, Inc., as of December 31, 2023, and is therefore intended only to provide an update of the content of the latest financial statements and must be read together, in accordance with IAS 34.

The information in the explanatory notes that did not undergo significant changes or that did not present new disclosures in relation to December 31, 2023 was not fully repeated in this condensed consolidated interim financial statement. However, information has been included to explain the main events and transactions that have occurred, allowing an understanding of the changes in the financial position and performance of the Inter&Co operations since the publication of the consolidated financial statements as of December 31, 2023.

This Unaudited interim condensed consolidated financial statement was authorized for issuance by the Company's Board of Directors on August 05, 2024.

b.Functional and presentation currency

This Unaudited interim condensed consolidated financial statement is presented in Brazilian reais (BRL or R$). The functional currency of the Group companies is shown in note 4a. All balances were rounded to the nearest thousand, unless otherwise indicated.

c.Use of estimates and judgments

In preparing this Unaudited interim condensed consolidated financial statement, management has made judgments, estimates and assumptions that affect the application of the accounting policies of the Group and the reported amounts of assets, liabilities, revenues, and expenses. Actual results may differ from such estimates. Estimates and assumptions are reviewed on an ongoing basis. Adjustments, if any, related to changes in estimates are recognized prospectively. The significant judgments made by management during the application of the Inter&Co accounting policies and the sources of estimation uncertainty are described below:

Judgments

Information about the judgments made in the application of accounting policies that have the most relevant effects on the amounts recognized in financial projections are included in the following notes:

•Basis for consolidation (see note 4a): whether Inter&Co has de facto control over an investee;

•Equity accounted investees (see note 14): whether Inter&Co has significant influence over an investee.

Estimates

The estimates present a significant risk and may have a material impact on the values of assets and liabilities in the next year, and the actual results may differ from those previously established. They are disclosed below and are related to the following notes:

•Classification of financial assets (see notes 6 and 7) - evaluation of the business model in which the assets are held and evaluation if the contractual terms of the financial asset relate only to payments of principal and interest (SPPI test).

•Measuring the provision for expected credit losses on financial assets measured at amortized cost and fair value through other comprehensive income (FVOCI) requires the use of complex quantitative models and assumptions about future economic conditions and credit behavior. Several significant judgments are also necessary to apply accounting requirements to measure the expected credit loss, such as: determining the criteria for evaluating the significant increase in credit risk; select quantitative models and appropriate assumptions to measure expected credit loss; and establish different prospective scenarios and their weighting, among others.

•Business combination (see note 4b): determination of fair values of assets acquired and liabilities assumed in business combinations.

•Impairment test of intangible assets and goodwill (see notes 16): for the purposes of impairment testing, each invested entity was considered a cash generating unit (“CGU”).

•Deferred tax asset (note 34): the expected realization of the deferred tax asset is based on projected future taxable income and other technical studies.

3.Material changes of accounting policies

The following new or revised standards have been issued by IASB, and were effective for the year covered by these Unaudited interim condensed consolidated financial statements, and had no material impact on these condensed consolidated interim financial statements.

•Definition of accounting estimates - Amendments to IAS 8: defines accounting estimates as monetary values susceptible to uncertainties in their measurement. Among these estimates we can mention the expected credit loss and the fair value of assets and liabilities.

•Disclosure of Accounting Policies – Changes to IAS 1 and IFRS Practice Statement 2: The Inter&Co adopted disclosure from January 1, 2023. Although the amendments made to the accounting policies did not result in any changes to the accounting policies themselves, they did have an impact on the disclosure of accounting policy information in the consolidated financial statements. The amendments require 'material' disclosure of policies instead of 'significant' disclosure. Additionally, they provide guidance on the application of materiality to the disclosure of accounting policies, thus assisting entities in providing useful and specific policy information that users require to understand other information in the financial statements. Management made certain updates to the information presented in Note 4, which pertains to Material Accounting Policies (previously referred to as Significant Accounting Policies), in line with the amendments.

•Deferred tax on leasing transactions – Amendments to IAS 12: clarify that the exemption for accounting for deferred taxes arising from temporary differences generated in the initial recognition of assets or liabilities does not apply to leasing transactions.

•Changes to IFRS 16 - Leases: the IASB has issued narrow-scope changes to the requirements for sale and leaseback transactions in IFRS 16, explaining how an entity accounts for a sale and leaseback after the date of the transaction. Sale and leaseback transactions in which some or all of the lease payments are variable lease payments that are not dependent on an index or rate and are more likely to be impacted.

•Insurance Contracts - IFRS 17: The standard on Insurance Contracts replaces IFRS 4 - Insurance Contracts, and brings important changes to the measurement, recognition and disclosure of these contracts, through specific methodologies for each type of agreement.

•Changes to IAS 7 and IFRS 7 - Supplier financing arrangements: these changes require disclosures to increase the transparency of supplier financing arrangements and their effects on a company's liabilities, cash flows and liquidity risk exposure. The disclosure requirements are the IASB's response to investor concerns that some companies' supplier financing arrangements are not sufficiently visible, making it difficult for investors to review.

•Classification of Liabilities as Current or Non-Current – Amendments to IAS 1: clarifies when to take into account contractual conditions (covenants) that may impact the unconditional right to postpone the settlement of the liability for a minimum period of 12 months after the closure of the report, in addition to establish disclosure requirements for liabilities with covenants classified as non-current. These changes will come into effect from the start of the 2024 financial year, and there is no impact on the consolidated financial statements.

•Amendment to IAS 21 - Effects of Changes in Exchange Rates and Conversion of Financial Statements: the changes will require the application of a consistent approach when assessing whether one currency can be exchanged for another and the amendment clarifies how entities should determine the exchange rate to be used, and disclosures to be provided, when a currency is difficult, or cannot, be exchanged. The changes aim to improve the information that an entity provides in its financial statements. The changes to IAS 21 are effective from January 1, 2025, and their adoption may be brought forward. Management does not expect impacts on the Group’s financial statements.

•New IFRS 18 - Presentation and Disclosure in Financial Statements: issued in April 2024, replaces IAS 1 and brings additional requirements to improve the disclosure of companies' financial performance. It defines three categories for income and expenses: operating, investments and financing, in addition to including new subtotals, such as operating profit. The standard also provides guidance on the disclosure of performance indicators defined by management and provides specific requirements for companies in the banking and insurance sector. IFRS 18 will come into force on January 1, 2027, and Management is currently analyzing its impacts on the Group’s financial statements.

4.Material accounting policies

The accounting policies described below were applied in all of the years presented in the Unaudited interim condensed consolidated financial statements.

a.Basis for consolidation

Companies under Inter&Co control are classified as controlled. The company is considered the controller of an entity when it is exposed to or has the right to variable returns arising from involvement with that entity, in addition to having the ability to use its power to influence the value of these returns.

The subsidiaries are consolidated in full as from the date the company gains control of their activities until the date on which control ceases to exist. With regard to the significant restrictions on the Group’s ability to access or use the assets and settle the Group's liabilities, only the regulatory restrictions, linked to the compulsory reserves maintained in compliance with the requirement of the Central Bank of Brazil, which restrict the ability of subsidiaries of Inter&Co to transfer cash to other entities within the economic group. There are no other legal or contractual restrictions and no guarantees or other requirements that may restrict that dividends and other capital distributions are paid or that loans and advances are made or paid to (or by) other entities within the economic group.

The following table shows the subsidiaries in each year:

a.On March 27, 2024, the corporate reorganization of Inter Marketplace Intermediação De Negócios e Serviços Ltda. Banco Inter, which was the sole partner of Inter Marketplace Intermediação de Negócios e Serviços Ltda, transferred its shares to Inter&Co Participações Ltda, becoming the direct controller of Inter Marketplace, consequently, an indirect subsidiary of Inter&Co.

b.The reorganization of Inter&Co Securities, LLC ("Securities") was completed on February 22, 2024. Inter&Co, Inc. ("Inter&Co"), which was the sole owner of Securities, transferred Securities' shares to its direct subsidiary, Inter US Holding, Inc. ("US Holding"). With the completion of this reorganization, Securities is now a direct subsidiary of US Holding and, consequently, an indirect subsidiary of Inter&Co.

c.On April 19, 2024, there was a change in the control structure of Inter&Co Tecnologia e Serviços Financeiros Ltda., which became directly controlled by Banco Inter. Previously, Inter&Co Tecnologia e Serviços Financeiros Ltda. was controlled by Inter&Co Payments, Inc.

d.On June 28, 2024, Inter&Co made a significant investment by acquiring a significant number of shares in the Landbank fund. As a result of this acquisition, the financial data relating to these funds began to be included in the consolidation basis of Inter&Co's financial statements.

Minority shareholders' interests

The Inter&Co recognizes the portion of equity relating to non-controlling interests in the consolidated balance sheet. In transactions involving the purchase of interests from non-controlling interests, the difference between the amount paid and the interest acquired is recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity. The company holds 50% or more of the voting capital of all indirect subsidiaries.

Balances and transactions eliminated on consolidation

Intra-group balances and transactions, including any unrealized gains or losses arising from intra-group transactions, are eliminated in the consolidation process. Unrealized losses are eliminated only to the extent that there is no evidence of impairment.

5.Operational segments

Operating segments are disclosed based on internal information that is used by the chief operating decision maker to allocate resources and to assess performance. The chief operating decision-maker, responsible for allocating resources, evaluating the performance of the operating segments and responsible for making strategic decisions for the Inter&Co, is the CEO, together with the Board of Directors.

Profit by operating segment

Each operating segment is composed of one or more legal entities. The measurement of profit by operating segment takes into account all revenues and expenses recognized by the companies that make up each segment.

Transactions between segments are carried out under terms and rates compatible with those practiced with third parties, where applicable. The Inter&Co does not have any single customer accounting for more than 10% of its total net revenue.

a.Banking & Spending

This segment comprises a wide range of banking products and services, such as checking accounts, debit and credit cards, deposits, loans, advances to customers, debt collection services and other services, which are available to the customers primarily by means of Inter&Co’s mobile application. The segment also comprises foreign exchange services and money remittances between countries, including the Global Account digital solution, including investment funds consolidated by the Group.

b.Investments

This segment is responsible for operations related to the acquisition, sale and custody of securities, the structuring and distribution of securities in the capital market and operations related to the management of fund portfolios and other assets (purchase, sale, risk management). Revenues consist primarily of administration fees and commissions charged to investors for the rendering of such services.

c.Insurance Brokerage

This segment offers insurance products underwritten by insurance companies with which Inter has an agreement (‘partner insurance companies’), including warranties, life, property and automobile insurance and pension products, as well as consortium products provided by a third party with whom Inter has a commercial agreement. The income from brokerage commissions is recognized in the income statement when services are provided, that is, when the performance obligation is fulfilled upon sale to the customer.

d.Inter Shop

This segment includes sales of goods and/or services with partner companies through our digital platform. The segment income is primarily comprised of commissions received for sales and/or for the rendering of these services.

6.Financial risk management

Risk management at Inter&Co includes credit, market, liquidity and operational risks. Risk management activities are carried out by independent and specialized structures, in accordance with previously defined policies and strategies. In general, the activities and processes seek to identify, measure, and control the financial and non-financial risks to which Inter is subject.

The model adopted by Inter&Co, Inc., involves a structure of areas and committees that seek to ensure:

•Segregation of function;

•Specific unit for risk management;

•Defined management process;

•Clear norms and competence structure;

•Defined limits and margins; and

•Reference to best management practices.

a.Credit risk

Credit risk is defined as the possibility of losses associated with the failure of the borrower or counterparty to meet their respective financial obligations in the agreed-upon terms or the devaluation of a credit agreement arising from the increased risk of default by the borrower, among others.

The financial instruments subject to credit risk are submitted to careful credit evaluation prior to contracting, as well as throughout the term of the respective operations. The credit analyses are based on the borrower's (or counterparty's) economic and financial capacity behavior, including payment history and credit reputation, in addition to the terms and conditions of the respective credit operation, including terms, rates and guarantees.

Loans and advances to customers, as shown in Note 12, are mainly represented by the following operations:

•Credit card: credit operations related to credit card limits, mostly without attached guarantees;

•Business loans: working capital operations, receivables, discounts and loans in general, with or without attached guarantees;

•Real estate loans: loans and financing operations secured by real estate, with attached guarantees;

•Personal loans: loan and payroll card operations, personal loans with and without transfer guarantees; and

•Agribusiness loans: financing operations for costing, investment, commercialization and/or industrialization granted to rural producers, with or without attached guarantees.

Mitigation of Exposure

In order to maintain the exposures within the risk levels established by senior management, Inter adopts measures to mitigate credit risk. Exposure to credit risk is mitigated through the structuring of guarantees, adapting the risk level to be incurred to the characteristics of the collateral taken at the time of granting. Risk indicators are monitored on an on-going basis and proposal for alternatives forms of mitigation are assessed, whenever the exposure behavior to credit risk of any unit, region, product or segment requires it. Additionally, credit risk mitigation takes place through product repositioning and adjusting operational processes or operation approval levels.

In addition to the activities described above, goods pledged in guarantee are subject to a technical assessment / valuation at least once every twelve months. In the case of personal guarantees, an analysis of the financial and economic circumstances of the guarantor is made considering their other debts with third parties, including tax, social security and labor debt.

Credit standards guide operational units and cover, among other aspects, the classification, requirement, selection, assessment, formalization, control and reinforcement of guarantees, aiming to ensure the adequacy and sufficiency of mitigating instruments throughout the cycle of the loan.

In 2024 there were no material changes to the nature of the credit risk exposures, how they arise or the Group’s objectives, policies and processes for managing them, although Inter continues to refine its internal risk management processes.

Measurement

The measurement of credit risk by Inter&Co is carried out considering the following:

•At the time that credit is granted, an assessment of a customer’s financial condition is undertaken through the application of qualitative and quantitative methods and using information collected from the market, in order to support the adequacy of the risk exposure being proposed;

•The assessment is carried out at the counterparty level, considering information on guarantors where applicable. The exposure to the credit risk is also measured in extreme scenarios, using stress techniques and scenario analysis. The models applied to determine the rating of customers and loans are reviewed periodically in order to ensure they reflect the macroeconomic scenario and actual loss experience, as per information in note 12;

•The aging of late payments in portfolios is monitored in order to identify trends or changes in the behavior of non-performing loans and allow the adoption of mitigating measures when required;

•Expected credit loss reflects the risk level of loans and allows monitoring and control of the portfolio’s exposure level and the adoption of risk mitigation measures;

•The expected credit loss is a forecast of the risk levels of the credit portfolio. Its calculation is based on the historical payment behavior and the distribution of the portfolio by product and risk level. This is a key input to the process of pricing loans and advances to customers; and

•In addition to the monitoring and measurement of indicators under normal conditions, simulations of changes in business environment and economic scenario are also performed in order to predict the impact of such changes in levels of exposure to risks, provisions and balance of such portfolios and to support the process of reviewing the exposure limits and the credit risk policy.

b.Description of guarantees

The financial instruments subject to credit risk are subject to careful assessment of credit prior to being contracted and disbursed and risk assessment is ongoing throughout the term of the instruments. Credit assessments are based on an understanding of the customers’ operational characteristics, their indebtedness capacity, considering cash flow, payment history and credit reputation, and any guarantees given.

Loans and advances to customers, as shown in Note 10, are mainly represented by the following operations:

•Working capital operations: are guaranteed by receivables, promissory notes, sureties provided by their owners and occasionally by property or other tangible assets, when applicable;

•Payroll loans repayments: are mainly represented by payroll loan cards and personal loans. These are deducted directly from the borrowers’ pensions, income or salaries and settled directly by the entity responsible for making those payments (e.g. company or government body); The operations concerning FGTS (Guarantee Fund for Time of Service) , such as the anniversary withdrawal are guaranteed through transfer;

•Personal loans and credit cards: generally, do not have guarantees; and

•Real estate financing: is collateralized by the real estate financed.

The tables below present the amount of loans and financing secured by property, broken down by loan-to-value. The loan-to-value is calculated by the ratio between the gross value of the exposure and the value of the guarantee at the origination date. Gross amounts exclude any provision for impairment:

c.Liquidity risk

Liquidity risk is the possibility that the Inter&Co will not be able to efficiently meet its expected or unexpected financial obligations, including those arising from guarantees provided or even unexpected redemptions from customers. Therefore, liquidity risk also includes the possibility that Inter will not be able to negotiate the sale of assets at market prices due to their volume in relation to the volume normally traded or due to some discontinuity in the market.

The liquidity risk management structure is segregated and acts proactively with the objective of monitoring and preventing any violation of the liquidity ratio limits. Liquidity risk monitoring covers the entire flow of receipts and payments of the Inter&Co so that risk mitigation actions can be implemented. This monitoring is carried out primarily by the Assets and Liabilities Committee and the Risk and Capital Management Committee. These committees assess the liquidity risk information that is available in the Inter&Co's systems, such as:

•Top 10 investors;

•Mismatch between assets and liabilities;

•Net Funding; Liquidity limits; Maturity forecast;

•Stress tests based on internally defined scenarios;

•Liquidity contingency plans;

•Monitoring of asset and liability concentrations;

•Monitoring of Liquidity Ratio and funding renewal rates; and

•Reports with information on positions held by Inter and its subsidiaries.

In 2024 there were no material changes to the nature of the liquidity risk exposures, how they arise or the Group’s objectives, policies and processes for managing them, although the Group continues to refine its internal risk management processes.

The responsibilities of the Liquidity Risk Management Framework are distributed between different committees and hierarchical levels, including: Board of Directors, Asset and Liability Committee (ALC), Officer in charge of Risk Management, Superintendent of Compliance, Risk Management and Internal Controls and Risk Coordination. These consider the internal and external factors affecting the liquidity of the Group, and a detailed daily monitoring of incoming and outgoing movements of loans and advances to customers, time deposits, savings, Agribusiness Credit Bills (LCA), Real Estate Secured Bonds (LCI), Guaranteed Real Estate Letters (LIG) and demand deposits is performed. Time deposits are analyzed according to the concentration, maturities, renewals, repurchases and new funding.

d.Analyses of financial instruments by remaining contractual term

The table below presents the projected future realizable value of Inter&Co’s financial assets and liabilities by contractual term:

e.Financial assets and liabilities using a current/non-current classification

The table below represents Inter&Co’s current financial assets (realized within 12 months of the reporting date), non-current financial assets (realized more than 12 months after the reporting date) and current financial liabilities (it is due to be settled within 12 months of the reporting date) and non-current financial liabilities (is due to be settled more than 12 months after the reporting date):

f.Market risk

Market risk is the possibility of losses resulting from fluctuations in the fair value of financial instruments held by the Institution and its subsidiaries, including the risks of transactions subject to changes in foreign exchange rates, interest rates, stock prices and commodity prices.

At Inter&Co, market risk management has, among others, the objective of supporting the business areas, establishing processes and implementing tools necessary for the assessment and control of related risks, allowing the measurement and monitoring of risk levels, as defined by Senior Management.

The market risk policy is monitored by the Asset and Liability Committee. Market risk controls allow the analytical assessment of information and are in a constant process of improvements. The Institution and its subsidiaries have improved the internal aspects of risk management and mitigation.

Within the risk management process, Inter&Co classifies its operations, including derivative financial instruments, as follows:

•Trading book: considers all operations intended to be traded before their contractual maturity or intended to hedge the trading portfolio and which are not subject to limitations on their negotiability.

•Banking book: considers operations not classified in the trading portfolio, the main characteristic of which is the intention to hold the respective operations until maturity

In line with market practices, Inter&Co manages its risks dynamically, seeking to identify, measure, evaluate, monitor, report, control and mitigate the exposures to market risks of its own positions. One of the methods of assessing the positions subject to market risk is the Value at Risk (VaR) model. The methodology used to calculate the VaR is the parametric model with a confidence level (CL) of 99% and a time horizon (TH) of twenty one days.

We present the trading book 21-day VaR below:

We present the trading book VaR below:

g.Sensitivity analysis

To determine the sensitivity of the positions to market movements, a sensitivity analysis was carried out in different scenarios, considering the relevant risk factors in the period analyzed, and using scenarios that would negatively affect our positions, as follows:

•Scenario I: based on market information, shocks were applied and 1 basis point for interest rates and 1% variation for prices (foreign currencies and shares);

•Scenario II: shocks of 25% variation in market curves and prices were determined;

•Scenario III: shocks of 50% variation in market curves and prices were determined.

It should be noted that the impacts reflect a static view of the portfolio and that the dynamism of the market and the composition of the portfolio means that these positions change continuously and do not necessarily reflect the position demonstrated here. The group has a process of continuous monitoring of market risk and, in the event of position/portfolio deterioration, mitigating actions are taken to minimize possible negative effects.

h.Operational risk

Policy

Operational Risk Management aims to identify, evaluate and monitor risks, being defined as the risk of losses resulting from inadequate or failed internal processes, people and systems or external events. This definition includes legal risk, but excludes strategic and reputational risk.

The operational risk events can be classified:

•Internal fraud;

•External fraud;

•Employment practices and workplace safety;

•Clients, products and business practices;

•Damage of physical assets;

•Business disruption and system failures, execution; and

•Delivery and process management.

We adopt the three lines of defense model, the structure and activities of the three lines often varies, depending on the bank’s portfolio of products, activities, processes and systems; the bank’s size; and its risk management approach. A strong risk culture and good communication among the three lines of defense are important characteristics of good operational risk governance.

Qualitative Evaluation

The qualitative assessment uses a scale which considers measures for probability and impact, taking into account the vulnerabilities and threats that, combined, determine the level of risk exposure to each event. Identification and verification is performed by in-person monitoring, interviews and workshops with the managers and employees from all operational areas, business partners and business units.

The identified risks are categorized and organized by risk factors.

Quantitative Evaluation

In the quantitative assessment of operational risk, the Group maintains an internal database fed by various sources of information. This contains descriptions and details of operational losses. In the quantitative assessment, information from external sources deemed reliable and relevant to the businesses of the Group may also be used.

Monitoring

An effective risk management process requires a communication and review structure that ensures the correct, effective and timely identification and assessment of the risks. In addition, it also seeks to assure that controls and responses to these risks are implemented.

Control tests and regular audits intended to verify compliance with applicable policies and standards are performed. The monitoring and review process seeks to verify whether:

•The adopted measures have achieved the intended results;

•The procedures adopted and the information gathered to perform the assessment were appropriate;

•Higher levels of knowledge may have contributed to make better decisions; and

•There is an effective possibility of obtaining information for future assessments.

7.Fair values of financial instruments

a.Financial instruments – Classification and fair values

Financial Instruments are classified into the following categories:

•Amortized cost;

•Fair value through other comprehensive income (FVOCI); and

•Fair value through profit or loss (FVTPL).

The fair value of a financial asset or liability is measured using one of three approaches below, weighting the levels of the fair value hierarchy as follows:

•Level I – instruments with prices traded in the active market;

•Level II – using financial valuation techniques, weighing data and market variables; and

•Level III – uses meaningful variables that are not based on market data.

The following table sets forth the breakdown of financial assets and liabilities according to the accounting classification. It also shows the carrying amounts and fair values of financial assets and liabilities, including their levels in the fair value hierarchy. It does not include information on the fair value of financial assets and liabilities, when the carrying amount is a reasonable approximation of the fair value.