Prior to making an investment decision, potential investors should carefully consider all information available on this website and on Banco BTG Pactual’s Reference Form, especially the risks mentioned below and those mentioned on Banco BTG Pactual’s Reference Form. Banco BTG Pactual’s business, financial condition and results of operations may be adversely and materially affected by any of these risks and, therefore, negatively impact the instruments issued by the Bank.

The risks described below are those already known by Banco BTG Pactual, which most likely may materially affect its performance. Additional unknown or irrelevant risks may also affect Banco BTG Pactual’s businesses.

1. Risk Factors Relating to Banco BTG Pactual

• Banco BTG Pactual depends on its Senior Management. The departure of any team member can adversely affect the Bank’s ability to execute its business strategies, investment policies and growth;
• Banco BTG Pactual’s ability to retain its professionals is critical to its success and its ability to grow and continue to compete effectively may depend on its ability to attract new Partners and key professionals;
• Banco BTG Pactual may not be able to identify, conclude, integrate or realize the benefits expected from assets acquired or disposed of;
• Banco BTG Pactual’s and Banco Pans Investment Banking and Corporate Lending revenue, as well as other interest held in other economic group, may reduce due to adverse market or economic conditions;
• The hiring of Banco BTG Pactual to provide Investment Banking advisory services does not necessarily imply subsequent contracting;
• Banco BTG Pactual’s Asset Management and Wealth Management business areas may be affected by the poor performance of its investment products;
• Banco BTG Pactual’s management fee revenue from Asset Management and Wealth Management may reduce in case of market deterioration;
• Reduction of AuM, AuA and WuM due to image crisis;
• The inability to obtain financing or sell assets may jeopardize Banco BTG Pactual’s liquidity;
• Banco BTG Pactual’s rating downgrade may jeopardize its liquidity and competitiveness, as well as increase its borrowing costs;
• Banco BTG Pactual’s market, credit and operating risk management policies, procedures and methods may not be totally effective to mitigate the exposure to unidentified risks or risks not expected by Banco BTG Pactual;
• Inquiries about ongoing anticorruption acts in Brazil may adversely affect Banco BTG Pactual;
• Legal and regulatory risks are inherent and material to Banco BTG Pactual’s businesses;
• Banco BTG Pactual is subject to several operating risks inherent to its business;
• The illegal behavior of a Partner and/or employee may jeopardize Banco BTG Pactual. These behaviors are difficult to be detected and prevented;
• Banco BTG Pactual is subject to contingencies that may have an adverse effect on its businesses;
• Political instability may adversely affect our businesses and results and the prices of our shares.
• The maintenance of significant and concentrated positions may expose Banco BTG Pactual to large-scale losses.

2. Risks Related to Banco BTG Pactual’s Operating Segment

• Changes in the benchmark interest rates by the Brazilian Central Bank may jeopardize Banco BTG Pactual;
• Banco BTG Pactual faces risks that increase as new business initiatives lead it to do business with different clients and counterparties and to expose itself to new asset classes and new markets;
• The financial services industry is extremely competitive;
• Banco BTG Pactual faces an increase in competition due to a trend towards consolidation;
• Developments and the perception of risk in other countries and particularly in emerging market countries, may adversely affect the market price of Brazilian securities.Other financial institutions in default can jeopardize financial markets in general, and Banco BTG Pactual, specifically;
• Banco BTG Pactual may experience an increase in the number of overdue loans.

3. Risks Relating to Banco BTG Pactual’s Regulatory Environment

• The extensive regulation of Banco BTG Pactual’s business may limit its activities and adversely affect it;
• Changes in the regulation of activities carried out by Brazilian banks and their foreign subsidiaries (including the subsidiary in Luxembourg) may adversely affect Banco BTG Pactual;
• Changes in regulations regarding reserves and compulsory deposits may adversely affect Banco BTG Pactual;
• Minimum capital adequacy requirements imposed on Banco BTG Pactual following the implementation of the Basel III Accord may negatively impact its results and financial condition;
• Limits on bank loan interest rates may have a negative effect on Banco BTG Pactual’s activities, financial condition and operating results.

4. Risks Related to Macroeconomic Factors

• Banco BTG Pactual is vulnerable to the disruptions and volatility of global financial markets, as well as the government’s measure intended to ease off the effects of the global financial crises.
• Banco BTG Pactual may suffer significant losses in its trading and investment activities due to the market’s fluctuations and volatility.
• The Brazilian government exerted, and continues to exert, a considerable influence on the Brazilian economy. This influence, as well as the Brazilian economic and political conditions, could jeopardize Banco BTG Pactual.
• The political instability and the corruption scandals can adversely affect our business and outcomes and the price of our shares.
• The inflation and certain measures taken by the federal government to restrain it may lead to economic uncertainties and adversely affect Banco BTG Pactual.
• The ability of clients and counterparties to make payments on time to Banco BTG Pactual may be jeopardized by the liquidity constraints in Brazil.
• Events and the perception of risk in other countries, such as the recent developments in the global financial market, and particularly in emerging markets, may adversely affect the price of Brazilian securities.
• The securities and financial instruments held by Banco BTG Pactual are subject to the price variations in the market and in liquidity, due to changes in the economic conditions, which may lead to significant losses for Banco BTG Pactual.