Banco Santander (BSBR) 6-K Current report (foreign)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE

SECURITIES EXCHANGE ACT OF 1934

For the month of June, 2021

Commission File Number: 001-34476

BANCO SANTANDER (BRASIL) S.A.

(Exact name of registrant as specified in its charter)

Avenida Presidente Juscelino Kubitschek, 2041 and 2235
Bloco A – Vila Olimpia
São Paulo, SP 04543-011
Federative Republic of Brazil

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:Form 20-F ___X___ Form 40-F _______

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Yes _______ No ___X____

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

Yes _______ No ___X____

Indicate by check mark whether by furnishing the information contained in this Form, the Registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934:

Yes _______ No ___X____

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):  N/A

Index

Performance Review

Dear Stockholders:

We are presenting the Performance Commentary to the Individual and Consolidated Financial Statements of Banco Santander (Brasil) S.A. (Banco Santander or Banco) for the semester ended June 30, 2021, prepared in accordance with accounting practices adopted in Brazil, established by the Law of Corporations, in conjunction with the rules of the National Monetary Council (CMN), the Central Bank of Brazil (Bacen) and the document model provided for in the Accounting Plan for National Financial System Institutions (Cosif) and the Securities Commission (CVM) , which do not conflict with the norms issued by Bacen.

The Condensed Consolidated Interim Financial Statements prepared based on the international accounting standards issued by the International Accounting Standards Board (IASB) for the semester ended June 30, 2021 were simultaneously disclosed on the website www.santander.com.br/ri.

1. Macroeconomic Environment

At the end of the second quarter of 2021, Banco Santander observed the median of projections regarding the performance of the Brazilian economy indicating a growth of the Brazilian GDP of 4.85% in 2021, compared to a contraction of 4.06% in the previous year. The projection for 2021 is higher than that observed at the end of the first quarter (3.17%) and, in the Bank's assessment, it was influenced by the recent publication that the actual result observed in that period was beyond the market consensus - the median of the estimates indicated a seasonally adjusted quarterly expansion of 0.9% for the first quarter of 2021. The economic activity data released contrasted with our GDP growth estimate for the previous quarter (we also estimated a 0.9% increase) and changed our expectation that the Brazilian economy will grow 3.6% in 2021. Preliminarily, we changed our GDP growth forecast to 4.9% this year.

Also, in the second quarter of 2021, the Bank witnessed the interannual variation of the IPCA reaching 8.1%, a level well above the target set for 2021 (3.75%) and also higher than the 5.9% projected by Santander for this year. The Bank understands that this inflationary environment and its balance of risks were the motivators for the Central Bank of Brazil to raise the basic interest rate of 2.75% p.a. to 4.25% p.a. between the closings of the first and second quarters of 2021. Santander believes that this approach to the Selic rate increases the chance that inflation will converge to the established targets within the relevant time horizon for monetary policy. In this sense, the Bank projects that the Selic rate will reach 6.50% p.a. at the end of 2021 and 7.00% p.a. at the end of 2022.

Regarding the behavior of the exchange rate, Banco Santander saw the quotation of the Brazilian currency against the US dollar close the second quarter of 2021 quoted at R$5.06/US$. That is, below the price of R$5.63/US$ seen at the end of the previous quarter. This trajectory of appreciation of the real is in line with the Bank's forecast that the exchange rate will end the year 2021 quoted at R$5.25/US$.

The performance of the aforementioned variables took place in the midst of an international environment that the Bank considered favorable and which highlighted the following topics: advances in immunization programs against COVID-19 in advanced economies; faster economic recovery of the world economy; emergence of inflationary pressures and; discussion about the possible reversal of monetary stimuli granted in several economies – with emphasis on the USA. In fact, the themes are intertwined, since the progress in the immunization process – mainly in advanced economies – allowed for a faster recovery in different parts of the globe and generated some bottlenecks in important production chains. In turn, these bottlenecks ended up causing problems in the production of some products – automobiles, for example – and caused a rise in prices that were captured by the inflation indices. Faced with a less relaxed inflationary scenario – albeit caused by some temporary setbacks – the Bank saw a growing discussion about the possibility of reversing the monetary incentive policies that were widely adopted to support demand during the pandemic. For the Bank, this discussion explained the recording of some volatility in asset prices, mainly in the US fixed income market.

In the domestic environment, the Bank understands that the main themes were as follows: lethargy in the immunization program against COVID-19, continuity of the interest rate normalization process; persistence of inflationary pressures; more robust economic activity indices than previously imagined and; reduction of risk perception regarding the Brazilian fiscal framework. For the Bank, the fact that the Brazilian economy showed robust economic growth in 1Q21, despite the worsening of the pandemic scenario and the absence of tax incentives in the period, was a very positive surprise. For the Bank, the performance showed that even the adoption of measures to restrict mobility and the lower mass of income did not prevent the economy from remaining on a path of recovery. For the Bank, this may be the explanation for the extension of inflationary pressures that led the Brazilian monetary authority to signal the continuity of the monetary policy normalization process. Finally, the Bank recognizes that circumstantial elements have resulted in an improvement in the perception of risk regarding government debt in the coming years, as the starting point of its trajectory should be lower than previously imagined. However, the Bank continues to draw attention to the worrying structural dynamics that it could follow in the absence of structural reforms in the near future.

2. Performance 

2.1) Corporate Income    

Consolidated Income Statements (R$ Millions)	1S21	1S20	annual changes%	2Q21	1Q21	quarter changes %
Financial Income	30,253.1	79,563.5	(62.0)	(7,503.8)	37,756.9	(119.9)
Financial Expenses	(8,898.7)	(79,909.1)	88.9	20,918.0	(29,816.7)	(170.2)
Gross Profit From Financial Operations (a)	21,354.4	(345.6)	6.278.9	13,414.2	7,940.2	68.9
Other Operating (Expenses) Income (b)	(7,528.1)	(6,120.7)	23.0	(3,492.5)	(4,035.6)	(13.5)
Operating Income	13,826.3	(6,466.3)	(313.8)	9,921.7	3,904.6	154.1
Non-Operating Income	28.1	236.6	(88.1)	(1.1)	29.2	(103.8)
Income Before Taxes on Income and Profit Sharing	13,854.3	(6,229.8)	(322.4)	9,920.5	3,933.8	152.2
Income Tax and Social Contribution (a)	(5,926.9)	13,065.9	(145.4)	(5,306.5)	(620.4)	755.3
Profit Sharing	(940.5)	(963.5)	(2.4)	(468.6)	(471.9)	(0.7)
Non-Controlling Interest	(67.9)	(73.0)	(7.0)	(42.6)	(25.3)	68.5
Consolidated Net Income	6,919.1	5,799.6	19.3	4,102.9	2,816.3	45.7

OPERATING RESULT BEFORE ADJUSTED TAXATION	1S21	1S20	annual variation%	2Q21	1Q21	annual variation%
(R$ Million)
Result before Taxation on Profit and Participation	13,854.3	(6,229.8)	(322.4)	9,920.5	3,933.8	152.2
Foreign Exchange Hedge	(792.4)	15,447.4	(105.1)	(2,841.9)	2,049.5	(238.6)
Operating Income Before Adjusted Taxation	13,061.9	9,217.6	41.7	7,078.6	5,983.3	18.3
INCOME TAX	1S21	1S20	annual variation%	2Q21	1Q21	annual variation%
(R$ Million)
Income tax and social contribution	(5,926.9)	13,065.9	(145.4)	(5,306.5)	(620.4)	755.3
Foreign Exchange Hedge	792.4	(15,447.4)	(105.1)	2,841.9	(2,049.5)	(238.6)
Adjusted Income Tax and Social Contribution	(5,134.5)	(2,381.5)	115.6	(2,464.6)	(2,669.9)	(7.7)

The annualized return for the first half of 2021, based on the accounting result on average equity, reached 17.8%, an increase of 0.7 p.p compared to the first half of 2020.

a) Foreign Exchange Hedge of the Grand Cayman and Luxembourg Branches

Banco Santander operates branches in the Cayman Islands and Luxembourg, which are used mainly to raise funds in the international capital and financial markets, to provide the Bank with lines of credit that are extended to its customers for trade financing abroad and working capital. To cover exposure to exchange variations, the Bank uses external funding and derivative instruments. In accordance with Brazilian tax rules, as of January 2021, 50% of the gains or losses arising from the impact of the appreciation or devaluation of the Real on foreign investments started to be computed in the determination of taxable income and in the calculation basis of the Contribution Social on Net Income (CSLL) of the investing legal entity domiciled in the country, while gains or losses on obligations and derivative instruments used as coverage are 100% taxable or deductible. The purpose of these derivative instruments is to protect net income after taxes. As of 2022, all exchange variation will be computed in the IRPJ and CSLL tax base.

The different tax treatment of such exchange differences results in volatility in the operating result and in the tax expense accounts (PIS/COFINS) and income taxes (IR/CSLL), as shown below:

Foreign Exchange Hedge of the Grand Cayman and Luxembourg Branches (R$ Million)	1S21	1S20	annual changes%
Exchange Variation - Profit From Financial Operations	(1,944.4)	19,283.1	(110.08)
Derivative Financial Instruments - Profit From Financial Operations	2,869.3	(35,436.2)	(108.10)
Income Tax and Social Contribution	(792.4)	15,447.4	(105.13)
PIS/COFINS - Tax Expenses	(133.4)	705.7	(118.91)

2.2) Assets and Liabilities

Consolidated Balance Sheets (R$ Millions)	Jun/21	Dec/20	semiannual changes%
Current Assets	513,258.1	603,330.9	(14.9)
Long-Term Assets	427,653.9	399,058.1	7.2
Total Assets	940,912.0	1,002,389.0	(6.1)
Current and Long-Term Liabilities	860,176.2	921,914.6	(6.7)
Deferred Income	414.2	355.5	16.5
Non-Controlling Interest	1,297.2	1,150.7	12.7
Stockholders' Equity	79,024.4	78,968.2	0.1
Total Liabilities and Stockholders' Equity	940,912.0	1,002,389.0	(6.1)

2.3) Stockholders’ Equity

On June 30, 2021, Banco Santander's consolidated shareholders' equity increased by 0.1% compared to December 31, 2020.

The change in Shareholders' Equity between June 30, 2021 and December 31, 2020 was mainly due to the net income for the semester in the amount of R$6,919 million, the negative equity valuation adjustment (securities and derivative financial instruments) in the amount of R$1,602 million and the capital reduction in the amount of R$2,000 million.

For additional information, see note 20.

2.4) Basel Index

Bacen determines that financial institutions maintain a Reference Equity (PR), PR Level I and Principal Capital compatible with the risks of their activities, higher than the minimum requirement of the Required Reference Equity, represented by the sum of the credit risk and risk portions market and operational risk.

As established in CMN Resolutions No. 4,193/2013 and No. 4,783/2020, until March 2021 the PR requirement was at 10.25%, including 8.00% Minimum Reference Equity plus 1.25% Additional Conservation of Capital and 1.00% of Systemic Additional. PR Level I was 8.25% and Minimum Core Capital 6.75%.

Throughout 2021, the Capital Conservation Supplement goes through two increases, reaching 1.625% in April and 2.00% in October. Thus, in June the PR requirement is 10.625%. Considering 8.00% of Minimum Reference Equity plus 1.625% of Additional Capital Conservation and 1.00% of Systemic Additional, with the requirement of PR Level I of 8.625% and Minimum Principal Capital of 7.125%. By the end of 2021, the PR requirement reaches 11.0%, considering an 8.00% Minimum Reference Equity plus 2.00% Capital Conservation Additional and 1.00% Systemic Additional, with a requirement of PR Tier I and Minimum Principal Capital at the end of 2021 of 9.00% and 7.50%, respectively.

Continuing with the adoption of the rules established by CMN Resolution No. 4,192/2013, as of January 2015, the Prudential Consolidated, defined by CMN Resolution No. 4,280/2013, came into effect.

The index is calculated on a consolidated basis based on information from the Prudential Consolidated, as shown below:

Basel Index%	Jun/21	Dec/20
Basel I Ratio	13.66	14.06
Basel Principal Capital	12.58	12.87
Basel Regulatory Capital	14.75	15.25

2.5) Main Subsidiaries

The table below shows the balances of total assets, shareholders' equity, net income and loan operations portfolio for the semester ended June 30, 2021, of Banco Santander's main subsidiaries:

Subsidiaries (R$ Millions)	Total Assets	Stockholders' Equity	Net Income	Loan Portfolio (1)	Ownership/Interest (%)
Aymoré Crédito, Financiamento e Investimento S.A.	54,518.7	1,542.3	730.0	50,793.5	100.0%
Banco RCI Brasil S.A.	11,182.0	1,499.5	90.2	9,070.7	39.9%
Santander Leasing S.A. Arrendamento Mercantil	14,026.8	11,094.8	112.7	2,200.6	100.0%
Santander Corretora de Seguros, Investimento e Serviços S.A.	8,723.2	3,595.6	491.8	-	100.0%
Atual Serviços de Recuperação de Créditos e Meios Digitais S.A.	2,409.2	2,358.6	34.0	-	100.0%
Santander Corretora de Câmbio e Valores Mobiliários S.A.	1,220.0	729.8	49.2	-	100.0%

The financial statements of the above Subsidiaries were prepared in accordance with the accounting practices adopted in Brazil, established by the Corporation Law, together with the rules of the CMN, Bacen and the document model provided for in the Accounting Plan of Cosif Institutions, of CVM, which do not conflict with the rules issued by Bacen, without the elimination of operations with affiliates.

3. Corporate Restructuring

During the semester ended June 30, 2021 and the year ended December 31, 2020, several corporate movements were implemented in order to reorganize the operations and activities of the entities in accordance with Banco Santander's business plan.

For additional information, see note 13 to the financial statements.

4. Strategy and Rating Agencies

For information regarding the Bank's strategy and rating at rating agencies, see the Results Report available at www.santander.com.br/ri.

5. Corporate Governance

The Board of Directors of Banco Santander met and resolved:

On June 1, 2021, it approved the election of Ms. Vania Maria da Costa Borgerth as a member of the Company's Audit Committee.

On May 3, 2021, it approved the election of the members of the Company's Executive Board for a new term.

On May 3, 2021, it approved the election of the members of the Advisory Committees to the Company's Board of Directors for a new term.

On April 27, 2021, it approved the proposal for the declaration and payment of interim and interim dividends totaling R$ 3 billion, paid from June 2, 2021 without any remuneration as monetary restatement.

On April 27, 2021, it approved the Management Report and the Company's Financial Statements in BRGAAP and IFRS for the first quarter of 2021.

On March 31, 2021, it approved the partial spin-off of the Company, which will result in the segregation of its shares issued by Getnet, with version 2 of the split portion to Getnet, pursuant to the Protocol and Justification of the Partial Spin-off of Santander (" Partial Spin-off”).

On March 1, 2021, it became aware of the resignation request presented by Tarcila Reis Corrêa Ursini as a member of the Company's Sustainability Committee.

On February 25, 2021, it approved the proposed spin-off of the payment means operation, carried out by the subsidiary, Getnet Acquiring and Services for Means of Payment SA (“Getnet”), in order to concentrate the Group's technology and payments business Santander within PagoNxt, a new technology-focused global payments platform.

On February 2, 2021, it approved the Individual and Consolidated Financial Statements of Banco Santander, prepared in accordance with accounting practices adopted in Brazil, applicable to institutions authorized to operate by Bacen for the year ended December 31, 2020.

On February 2, 2021, it approved, continuing the buyback program that expired on November 4, 2020, a new buyback program for Units and ADRs issued by Banco Santander, directly or through its Cayman branch, to be maintained in treasury or subsequent sale.

On February 2, 2021, it approved the proposal for declaration and payment of dividends, in the amount of R$ 512 million, paid on March 3, 2021, without any remuneration as monetary restatement.

The resolutions of the Board of Directors for the year 2020 are described in the Management Report of the Individual and Consolidated Financial Statements of December 31, 2020.

6. Risk Management        

Bacen published on February 23, 2017, CMN Resolution No. 4,557, which provides for the risk and capital management structure (GIRC) which came into effect from the same year. The resolution highlights the need to implement an integrated risk and capital management structure, definition of an integrated stress test program and Risk Appetite Statement (RAS - Risk Appetite Statement), constitution of a Risk Committee, definition of a disclosure policy of published information, appointment of director for risk management, director of capital and director responsible for the information disclosure policy. Banco Santander develops the necessary actions on a continuous and progressive basis, aiming at adherence to the resolution. No relevant impacts arising from this standard were identified.

For more information, see note 29 to this publication.

Capital Management Structure

Banco Santander 's capital management structure has robust governance, which supports the processes related to this topic and establishes the responsibilities of each of the teams involved. In addition, there is a clear definition of the guidelines that must be adopted for effective capital management. Further details can be found in the Risk and Capital Management Structure, available on the Investor Relations website.

Internal Audit                     

The Internal Audit reports directly to the Board of Directors, with the Audit Committee responsible for its supervision.

Internal Audit is a permanent function and independent from any other function or unit, whose mission is to provide the Board of Directors and senior management with independent assurance on the quality and effectiveness of internal control and risk management systems (current or emerging) and government, thus contributing to the protection of the organization's value, solvency and reputation. The Internal Audit has a quality certificate issued by the Institute of Internal Auditors (IIA).

In order to fulfill its functions and coverage risks inherent in Banco Santander activity, Internal Audit has a set of tools developed internally and updated when necessary. Among them, the risk matrix stands out, used as a planning tool, prioritizing the risk level of the auditable universe considering, among others, its inherent risks, the latest audit rating, the degree of compliance with the recommendations and its dimension. The work programs, which describe the audit tests to be carried out, are periodically reviewed.

The Audit Committee and the Board of Directors have favorably analyzed and approved the Internal Audit work plan for 2021.

7. People

With the public health crisis unleashed in early 2020, care has never been so much talked about. Take care of yourself and the other. And at the Bank, we continue to take care of our people, an essential element in the Company. After all, they are the ones who think, design, develop, interact and build what Banco Santander wants to be. This is why the Bank invests in each of the 46,426 employees here in Brazil.

On the subject of Health, we designed our internal protocol of action in the containment of COVID-19, guided by Organs sanitary and health agencies. We have the Telemedicine service in partnership with Albert Einstein Hospital, guaranteeing high standard medical care for 100% of employees and their dependents, in addition to investing in the Emotional Health Program that has supported our people in adapting to and coping with social distancing.

For the development of our people, the Corporate University – Santander Academy works towards strong, transversal culture, enabling everyone, online and in person, to improve what they already know and explore new possibilities. From mandatory certifications for certain functions to Digital Leadership courses, the most important thing is to get out of your comfort zone and invest in yourself by expanding your knowledge and repertoire.

Banco Santander supports leaders and managers so that they are close and available. This performance is based on three pillars: Feedback, Open Chat and Personalized Recognition, ensuring that everyone is aligned through recurrent and frank conversations, career guidance and special moments to reward the teams' growth.

Banco Santander values ​​a diverse environment, where every skill and every difference is valued. An example is the Affinity Group, created to promote diversity and inclusion based on the 5 pillars: Female Leadership; Racial Equity; Disabled people; Diversity of Trainings, Experiences and Generations and the LGBT+ pillar. Another good example is the Talent Show. In it, Banco Santander opens space to learn about the most different performances and explore the universe of skills that exist at the Bank, allowing interaction and fraternization among colleagues.

In the Customer sphere, we remain focused on offering the best products and services in a Simple, Personal and Fair manner. For this, the active listening process is essential and, therefore, in March 2021, we received 12 Clients remotely to participate in a coffee with our CEO, Sérgio Rial, and broadcast live to 100% of the Organization. The Consumer Day special “Café com Rial” had a record audience of 41,972 connections, placing the Customer chair as the most important in our organization and signaling that our consumers are at the center of our discussions.

The result of all these actions is the high level of engagement, evidenced by surveys that are carried out annually and that bring excellent indicators. These surveys show that at least 90% of employees say they want to stay at Banco Santander for a long time. It is believed that this satisfaction reflects positively on interactions with Customers, generating greater loyalty, sustainable growth and investments in society, which leads Banco Santander to be the best Bank for all stakeholders.

8. Sustainable Development         

Santander Brasil's Sustainability strategy is based on three pillars: (i) Strategic and efficient use of Environmental Resources, (ii) Development of Potentials and (iii) Resilient and Inclusive Economy. The Bank's vision, through these pillars, is to contribute to a better, more prosperous and fair society, maintaining excellence and responsibility in internal management, based on ethical values ​​and technology at the service of people and businesses.

We recognize our role as a financial institution in fostering sustainable business, helping society to prosper. We highlight some initiatives in 2Q21:

·We made R$27.6 billion feasible in sustainable businesses, 74% of which via bonds.

·In line with the ambition of achieving zero net carbon emissions by 2050, we promoted Net Zero engagement for Brazil and launched initiatives for employees and customers, such as sustainable product offers and the availability of the Carbonometer, a tool that calculates the daily emission of GHG of our operation. In addition, we started replacing cards for recycled PVC

·We launched the first Sustainable Station in Brazil, a model project with 1,454 m² of green area, which uses 70% of energy from solar panels and has a water reuse system with savings of 150 thousand liters/month.

·We made a loan of US$ 25 MM to clean up the Novo Rio Pinheiros river, in partnership with IFC and Desenvolvimento SP, a financial institution of the Government of the State of São Paulo.

We maintained our actions in support of society as a means of supporting the fight against COVID-19 and continued with our private social investment strategy with our programs to support children, adolescents, the elderly and entrepreneurs.

At the end of the Brazil Without Hunger Campaign, 200,351 food baskets were donated, 16.6% of which came from resources donated by employees.

We highlight three recognitions in the period:

·Exame ESG Guide: best ESG bank

·ECO Amcham Award: case “Santander Effect - Total Force in the Pandemic”

·GPTW LGBTQI+ Ranking: we were one of the ten companies awarded in the ranking, in partnership with APOLGBT - Association of the LGBT Pride Parade of São Paulo.

9. Effects of the Pandemic - COVID-19

The Bank monitors the effects of this pandemic that affect its operations and that may adversely affect its results. Since the beginning of the pandemic in Brazil, Committees have been set up to monitor the effects of the spread and its impacts, in addition to government actions to mitigate the effects of COVID-19.

The Bank maintains its operational activities, observing the protocols of the Ministry of Health and other Authorities. Among the actions taken, we highlight (a) the dismissal of employees from the risk group and intensification of home office work, (b) the definition of a monitoring protocol, with health professionals, for employees and family members who have the symptoms of COVID-19 and (c) increased communication about prevention measures and remote means of care.

Future impacts related to the pandemic, which have a certain degree of uncertainty as to their duration and severity and which, therefore, cannot be accurately measured at this time, will continue to be monitored by Management.

10. SX & Open Finance

Our performance, which is based on proximity to the customer and on offering products and services tailored to the needs of each profile, differentiates us in the face of the current transformation of the financial sector. Therefore, we are expanding SX, Santander's special PIX, which totaled R$161.1 billion in PIX sent this quarter, representing a market share of 17% in the same period. In the scope of open finance, we were pioneers in communication with our customers and had a volume of pre-registrations above our expectations.

11. Independent Audit

The policy of Banco Santander, including its subsidiaries, in contracting services not related to the auditing of the Financial Statements by its independent auditors, is based on Brazilian and international auditing standards, which preserve the auditor's independence. This reasoning provides for the following: (i) the auditor must not audit his own work, (ii) the auditor must not exercise managerial functions in his client, (iii) the auditor must not promote his client's interests, and (iv) the need for approval of any services by the Bank's Audit Committee.

In compliance with CVM Instruction 381/2003, Banco Santander informs that in the period ended June 30, 2021, PricewaterhouseCoopers did not provide services unrelated to the independent auditing of the Financial Statements of Banco Santander and controlled companies over 5% of the total fees related to independent audit services.

In addition, the Bank confirms that PricewaterhouseCoopers has procedures, policies and controls in place to ensure its independence, which include assessing the work performed, covering any service other than an independent audit of the Financial Statements of Banco Santander and its subsidiaries. This assessment is based on the applicable regulations and accepted principles that preserve the auditor's independence. The acceptance and provision of professional services not related to the auditing of the Financial Statements by its independent auditors during the semester ended June 30, 2021, did not affect the independence and objectivity in conducting the external audit exams carried out at Banco Santander and other entities of the Group, since the above principles were observed.

The Board of Directors

The Executive Board

(Authorized at the Board of Directors' Meeting of 07/27/2021)

Balance Sheet

			Bank		Consolidated
	Notes	06/30/2021	12/31/2020	06/30/2021	12/31/2020
Current Assets		514,763,562	586,324,279	512,612,711	603,330,917
Cash	4	28,091,844	19,522,250	28,111,171	19,512,315
Financial Instruments		430,248,800	511,695,788	423,688,555	523,139,590
Interbank Investments	5	90,122,582	112,963,929	39,790,639	68,116,477
Securities and Derivative Financial Instruments	6	80,389,530	96,534,510	91,172,211	107,235,066
Derivative Financial Instruments	6	16,466,798	17,886,650	14,974,809	18,446,009
Lending Operations	8	108,550,262	114,776,536	137,668,990	141,271,392
Others Assets Instruments	9	134,719,628	169,534,163	140,081,906	188,070,646
Leasing Operations		-	-	1,069,868	905,502
Provisions for Expected Losses Associated with Credit Risk	8.e	(6,060,619)	(7,078,539)	(7,650,091)	(8,563,593)
Other Assets	11	62,483,537	62,184,780	67,393,208	68,337,103
Long-Term Assets		433,024,882	403,900,472	428,299,302	399,058,061
Financial Instruments		362,511,974	331,190,945	374,044,162	340,476,305
Interbank Investments	5	32,665,913	30,940,159	3,125,879	1,581,776
Securities and Derivative Financial Instruments	6	119,736,947	119,283,560	127,402,382	126,013,272
Derivative Financial Instruments	6	13,831,266	14,394,066	13,875,643	14,394,066
Lending Operations	8	192,243,420	164,803,732	225,605,911	196,839,325
Others Assets Instruments	9	4,034,347	1,769,428	4,034,347	1,647,866
Leasing Operations		-	-	1,385,353	1,565,882
Provisions for Expected Losses Associated with Credit Risk	8.e	(16,537,202)	(14,756,906)	(18,351,922)	(16,503,895)
Other Assets	11	16,845,489	16,309,573	20,017,519	19,747,782
Current and deferred tax assets	10	34,863,823	35,748,981	39,224,471	39,920,834
Investments		24,629,508	23,208,562	398,237	332,851
Investments: Investments in Associates and Subsidiaries	13	24,608,580	23,187,617	377,255	311,852
Other Investments		20,928	20,945	20,982	20,999
Fixed Assets	14	5,870,506	6,102,538	6,191,511	7,046,685
Real Estate for Use		2,450,519	2,443,916	2,751,498	2,744,391
Other Fixed Assets in Use		12,659,345	12,405,737	12,836,593	14,220,916
(Accumulated Depreciation)		(9,239,358)	(8,747,115)	(9,396,580)	(9,918,622)
Intangible	15	4,840,783	6,096,779	5,389,971	6,471,617
Goodwill on Acquisition of Subsidiaries		27,236,896	28,523,504	27,886,642	29,680,240
Other Intangible Assets		9,811,735	9,510,686	10,095,887	10,208,203
(Accumulated Amortizations)		(32,207,848)	(31,937,411)	(32,592,558)	(33,416,826)
Total Assets		947,788,444	990,224,751	940,912,013	1,002,388,978

The accompanying notes from Management are an integral part of these financial statements

			Bank		Consolidated
	Notes	06/30/2021	12/31/2020	06/30/2021	12/31/2020
Current Liabilities		602,491,674	642,103,558	609,147,876	657,760,203
Deposits and Other Financial Instruments		570,472,075	612,837,974	561,473,571	566,373,198
Deposits	16	301,972,406	292,520,822	297,186,903	290,741,035
Local Borrowings	16	105,791,613	119,188,451	101,812,663	114,214,008
Money Market Funding	16	65,993,517	53,750,603	65,993,517	53,790,402
Domestic Onlendings - Official Institutions	16	4,389,585	4,920,596	9,284,588	4,920,596
Funds from Acceptance and Issuance of Securities	16	28,019,196	36,043,882	24,846,931	30,549,046
Derivative Financial Instruments	6	15,488,484	17,389,567	13,848,235	18,372,819
Other Financial Liabilities	17.a	48,817,274	89,024,053	53,395,737	91,955,496
Other Liabilities	18	27,327,367	26,145,866	34,863,670	48,710,732
Provision for Tax Risks and Legal Obligations	19.b	33,709	33,573	118,243	115,852
Provision for Judicial and Administrative Proceedings – Labor and Civil Lawsuits	19.b	2,265,028	2,343,001	2,364,780	2,457,423
Other Provisions	18	1,719,937	1,348,726	5,959,637	5,365,387
Others	18	23,308,693	18,683,091	26,421,009	34,619,094
Current and Deferred Tax Liabilities	10	4,692,232	3,119,718	5,810,635	4,506,069
Long-Term Liabilities		265,579,030	268,624,333	258,028,420	251,064,721
Deposits and Other Financial Instruments		229,996,608	232,775,324	216,872,902	211,859,598
Deposits	16	99,457,786	99,950,659	101,400,684	99,310,763
Money Market Funding	16	21,635,135	40,783,009	21,635,135	40,783,009
Local Borrowings	16	1,673,704	1,221,159	1,673,704	1,221,159
Domestic Onlendings - Official Institutions	16	7,479,913	7,827,793	7,479,913	7,827,793
Funds from Acceptance and Issuance of Securities	16	68,229,615	51,015,924	51,411,182	40,078,721
Derivative Financial Instruments	6	16,350,495	17,737,559	16,350,495	17,896,646
Other Financial Liabilities	17.a	15,169,960	14,239,221	16,921,789	15,400,664
Other Liabilities		32,659,302	33,579,893	37,568,188	38,833,292
Provision for Tax Risks and Legal Obligations	19.b	4.159.784	4.216.171	6.542.289	6.591.441
Provision for Judicial and Administrative Proceedings – Labor and Civil Lawsuits	19.b	2.999.987	3.578.881	3.220.123	3.884.857
Other Provisions	18	697.358	811.461	775.486	896.819
Others	18	24.802.173	24.973.380	27.030.291	27.460.175
Current and Deferred Tax Liabilities	10.b	2,923,120	2,269,116	3,587,330	2,802,311
Deferred Income		378,872	313,983	414,185	355,526
Stockholders' Equity	20	79,338,868	79,182,877	79,024,369	78,968,183
Capital	20.a	55,000,000	57,000,000	55,000,000	57,000,000
Capital Reserves                                                                            20.c		273,136	302,665	265,784	298,313
Profit Reserves                                                                              20.c		26,696,430	23,128,797	25,995,261	22,511,135
Adjustment to Fair Value		(1,920,928)	(457,227)	(1,526,906)	(49,907)
(-) Treasury Shares                                                                        20.d		(709,770)	(791,358)	(709,770)	(791,358)
Non Controlling Interest	20.e	-	-	1,297,163	1,150,708
Total Stockholders' Equity		79,338,868	79,182,877	80,321,532	80,118,891
Total Liabilities		947,788,444	990,224,751	940,912,013	1,002,388,978

The accompanying notes from Management are an integral part of these financial statements.

Statement of Income

			Bank		Consolidated
	Notes	01/01 to 06/30/2021	01/01 to 06/30/2020	01/01 to 06/30/2021	01/01 to 06/30/2020
Income Related to Financial Operations		25,092,779	73,967,441	30,253,142	79,563,473
Loan Operations		20,057,178	28,009,033	25,417,072	34,491,929
Leasing Operations		-	-	114,234	156,260
Securities Transactions	6.a.V	3,014,908	50,573,998	1,780,397	49,202,392
Derivatives Transactions		2,292,845	518,129	3,210,944	711,669
Foreign Exchange Operations		(964,628)	(6,145,592)	(964,628)	(6,017,339)
Compulsory Deposits		692,476	1,011,873	695,123	1,018,562
Expenses on Financial Operations		(6,872,745)	(77,610,921)	(8,898,749)	(79,909,105)
Funding Operations Market	16.b	(4,208,818)	(40,619,135)	(5,108,163)	(41,193,858)
Borrowings and Onlendings Operations		3,169,053	(27,328,721)	3,169,830	(27,347,015)
Operations of Sale or Transfer of Financial Assets		103,754	(1,005,682)	103,761	(1,005,631)
Allowance for Loan Losses	8.e	(5,936,734)	(8,657,383)	(7,064,177)	(10,362,601)
Gross Income Related to Financial Operations		18,220,034	(3,643,480)	21,354,393	(345,632)
Other Operating Revenues (Expenses)		(5,581,545)	(3,782,437)	(7,528,126)	(6,120,713)
Banking Service Fees	22	5,138,652	4,494,803	6,860,257	6,127,134
Income Related to Bank Charges	22	2,342,439	2,162,490	2,691,467	2,457,211
Personnel Expenses	23	(2,973,558)	(3,142,349)	(3,485,775)	(3,621,626)
Other Administrative Expenses	24	(6,715,375)	(5,279,853)	(7,045,077)	(6,133,482)
Tax Expenses	10.d	(1,891,715)	(719,006)	(2,436,627)	(1,294,924)
Investments in Affiliates and Subsidiaries	13	1,959,333	1,822,223	28,566	9,548
Other Operating Revenues	25	1,503,845	2,333,231	2,657,802	3,178,973
Other Operating Expenses	26	(4,945,166)	(5,453,976)	(6,798,739)	(6,843,547)
Operating Income		12,638,489	(7,425,917)	13,826,267	(6,466,345)
Non-Operating Income	27	52,584	230,830	28,077	236,583
Income Before Taxes on Income and Profit Sharing		12,691,073	(7,195,087)	13,854,344	(6,229,762)
Income Tax and Social Contribution	10.c	(4,737,863)	14,018,215	(5,926,879)	13,065,872
Provision for Income Tax		(2,634,890)	(373,844)	(3,499,625)	(1,126,484)
Provision for Social Contribution Tax		(2,181,006)	(327,040)	(2,626,205)	(744,220)
Deferred Tax Credits		78,033	14,719,099	198,951	14,936,576
Profit Sharing		(858,133)	(880,250)	(940,467)	(963,508)
Non Controlling Interest	20.e	-	-	(67,918)	(73,040)
Net Income		7,095,077	5,942,878	6,919,080	5,799,562
Number of Shares (Thousands)	20.a	7,498,531	7,498,531
$)		946,20	792,54

The accompanying notes from Management are an integral part of these financial statements.

Statement of Comprehensive Income

		Bank		Consolidated
	01/01 to 06/30/2021	01/01 to 06/30/2020	01/01 to 06/30/2021	01/01 to 06/30/2020
Profit for the Semester	7,095,077	5,942,878	6,919,080	5,799,562
Other Comprehensive Income that will be subsequently reclassified for profit or loss when specific conditions are met:	(1,588,341)	(797,140)	(1,601,640)	(802,253)
Available-for-sale financial assets	(1,543,168)	(658,290)	(1,556,467)	(663,403)
Available-for-sale financial assets	(2,394,802)	(1,536,565)	(2,413,486)	(1,541,918)
Income taxes	851,634	878,275	857,019	878,515
Cash flow hedges	(45,173)	(138,850)	(45,173)	(138,850)
Cash flow hedges	(359,922)	99,414	(359,922)	99,414
Income taxes	314,749	(238,264)	314,749	(238,264)
Other Comprehensive Income that won't be reclassified for Net income:	124,641	679,503	124,641	679,503
Defined Benefits plan	124,641	679,503	124,641	679,503
Defined Benefits plan	264,348	1,278,431	264,348	1,278,431
Income taxes	(139,707)	(598,928)	(139,707)	(598,928)
Comprehensive Income for the Semester	5,631,377	5,825,241	5,442,081	5,676,812
Attributable to parent company			5,374,163	5,603,772
Attributable to Minority Shareholders			67,918	73,040
Total			5,442,081	5,676,812

The accompanying notes from Management are an integral part of these financial statements.

Statement of Changes in Stockholders' Equity – Bank

				Profit Reserves		Adjustment to Fair Value
	Notes	Capital	Capital Reserves	Legal Reserve	Reserve for Dividend Equalization	Own Position	Affiliates and Subsidiaries	Others Adjustment to Fair Value	Retained     Earnings	(-) Treasury Shares	Total
Balances as of december 31, 2019		57,000,000	197,369	3,818,064	9,091,672	3,920,714	91,380	(3,750,341)	-	(681,135)	69,687,723
Employee Benefit Plans		-	-	-	-	-	-	679,503	-	-	679,503
Treasury Shares		-	-	-	-	-	-	-	-	(111,373)	(111,373)
Emission Costs of Treasury Shares		-	(16,746)	-	-	-	-	-	-	-	(16,746)
Reservations for Share - Based Payment		-	17,338	-	-	-	-	-	-	-	17,338
Adjustment to Fair Value - Securities and Derivative Financial Instruments		-	-	-	-	(830,970)	33,830	-	-	-	(797,140)
Net Income		-	-	-	-	-	-	-	5,942,878	-	5,942,878
Allocations:
Legal Reserve	20.c	-	-	297,144	-	-	-	-	(297,144)	-	-
Interest on Capital	20.b	-	-	-	-	-	-	-	(890,000)	-	(890,000)
Reserve for Dividend Equalization	20.c	-	-	-	4,755,734	-	-	-	(4,755,734)	-	-
Balances as of june 30, 2020		57,000,000	197,961	4,115,208	13,847,406	3,089,744	125,210	(3,070,838)	-	(792,508)	74,512,183
Changes in the Semester		-	592	297,144	4,755,734	(830,970)	33,830	679,503	-	(111,373)	4,824,460
Balances as of december 31, 2020		57,000,000	302,665	4,520,871	18,607,926	2,596,867	124,185	(3,178,279)	-	(791,358)	79,182,877
Employee Benefit Plans		-	-	-	-	-	-	124,641	-	-	124,641
Treasury Shares		-	-	-	-	-	-	-	-	81,588	81,588
Result of Treasury Shares	20.d	-	40,582	-	-	-	-	-	-	-	40,582
Reservations for Share - Based Payment		-	(70,111)	-	-	-	-	-	-	-	(70,111)
Adjustment to Fair Value - Securities and Derivative Financial Instruments		-	-	-	-	(1,221,525)	(366,817)	-	-	-	(1,588,341)
Spin-off	20.a	(2,000,000)	-	-	(527,444)	-	��                 -	-	-	-	(2,527,444)
Net Income		-	-	-	-	-	-	-	7,095,077	-	7,095,077
Allocations:
Legal reserve	20.c	-	-	354,754	-	-	-	-	(354,754)	-	-
Dividends	20.b	-	-	-	(2,800,000)	-	-	-	(200,000)	-	(3,000,000)
Reserve for Dividend Equalization	20.c	-	-	-	6,540,323	-	-	-	(6,540,323)	-	-
Balances as of june 30, 2021		57,000,000	273 ,136	4,875,625	21,82 0,805	1 ,375,342	(242,632)	(3,053,638)	-	(709,770)	79,338,868
Changes in the Semester		(2,000,000)	(29,529)	354,754	3,212,879	(1,221,525)	(366,817)	124,641	-	81,588	155,991

Statement of Changes in Stockholders' Equity – Consolidated

				Profit Reserves		Adjustment to Fair Value
	Notes	Capital	Capital Reserves	Legal Reserve	Reserve for Dividend Equalization	Own Position	Affiliates and Subsidiaries	Others Adjustment to Fair Value	RetainedEarnings	(-) Treasury Shares	Stockholders' Equity		MinorityInterest		Total Stockholders' Equity
Balances as of december 31, 2019		57,000,000	194,115	3,818,065	9,168,713	3,932,436	91,380	(3,750,342)	-	(681,135)	69,773,232	1,695,361		71,468,593
Employee Benefit Plans		-	-	-	-	-	-	679,503	-	-	679,503		-		679,503
Treasury Shares		-	(16,746)	-	-	-	-	-	-	(111,373)	(128,119)		-		(128,119)
Result of Treasury Shares		-	-	-	-	-	-	-	-	-	-	-		-
Reservations for Share - Based Payment		-	18,968	-	-	-	-	-	-	-	18,968		-		18,968
Adjustment to Fair Value - Securities and Derivative Financial Instruments		-	-	-	-	(836,083)	33,830	-	-	-	(802,253)	-		(802,253)
Capital Restructuring		-	-	-	-	-	-	-	-	-	-		-		-
Net Income		-	-	-	-	-	-	-	5,799,562	-	5,799,562		-		5,799,562
Allocations:
Legal Reserve	20.c	-	-	297,144	-	-	-	-	(297,144)	-	-		-		-
Provision of Interest on Capital	20.b	-	-	-	-	-	-	-	(890,000)	-	(890,000)		-		(890,000)
Reserve for Dividend Equalization	20.c	-	-	-	4,755,734	-	-	-	(4,755,734)	-	-		-		-
Unrealized Profit		-	-	-	(141,628)	-	-	-	141,628	-	-		-		-
Non Controlling Interest Results	20.e	-	-	-	-	-	-	-	-	-	-		(73,040)		(73,040)
Others		-	-	-	-	-	-	-	1,688	-	1,688		(518,976)		(517,288)
Balances as of june 30, 2020		57,000,000	196,337	4,115,209	13,782,819	3,096,353	125,210	(3,070,839)	-	(792,508)	74,452,581	1,103,345		75,555,926
Changes in the Semester		-	2,222	297,144	4,614,106	(836,083)	33,830	679,503	-	(111,373)	4,679,349	(592,016)		4,087,333

				Profit Reserves		Adjustment to Fair Value
	Notes	Capital	Capital Reserves	Legal Reserve	Reserve for Dividend Equalization	Own Position		Affiliates and Subsidiaries		Others Adjustment to Fair Value		Retained Earnings		(-) Treasury Shares		Stockholders' Equity		MinorityInterest		Total Stockholders' Equity
Balances as of December 31, 2020		57,000,000	298,313	4,520,872	17,990,263	3,004,187		124,186		(3,178,280)		-		(791,358)		78,968,183		1,150,708		80,118,891
Employee Benefit Plans		-	-	-	-	-	-		124,641		-		-		124,641		-		124,641
Treasury Shares		-	40,582	-	-	-		-		-		-		81,588		122,170		-		122,170
Reservations for Share - Based Payment		-	(73,111)	-	-	-		-		-		-		-		(73,111)		-		(73,111)
Adjustment to Fair Value - Securities and Derivative Financial Instruments		-	-	-	-	(1,231,063)	(370,577)		-		-		-		(1,601,640)		-		(1,601,640)
Spin-off	20.a	(2,000,000)	-	-	(527,444)	-		-		-		-		-		(2,527,444)		-		(2,527,444)
Net Income		-	-	-	-	-		-		-		6,919,080		-		6,919,080		-		6,919,080
Allocations:
Legal Reserve	20.c	-	-	345,954	-	-		-		-		(345,954)		-		-		-		-
Dividends		-	-	-	(2,800,000)	-		-		-		(200,000)		-		(3,000,000)		-		(3,000,000)
Reserve for Dividend Equalization	20.c	-	-	-	5,847,526	-		-		-		(5,847,526)		-		-		-		-
Unrealized Profit		-	-	-	525,600	-		-		-		(525,600)		-		-		-		-
Non Controlling Interest Results	20.e	-	-	-	-	-		-		-		-		-		-		67,918		67,918
Others		-	-	-	92,490	-		-		-		-		-		92,490		78,537		171,027
Balances as of June 30, 2021		55,000,000	265,784	4.866.826	21,128,435	1,773,124	(246,391)		(3,053,639)		-		(709,770)		79,024,369		1,297,163		80,321,121
Changes in the Semester		(2,000,000)	(32,529)	345.954	3,138,172	(1,231,063)	(370,577)		124,641		-		81,588		56,186		146,455		202,641

Statement of Cash Flows

		Bank		Consolidated
		01/01 to 06/30/2021	01/01 a 06/30/2020	01/01 to 06/30/2021	01/01 a 06/30/2020
	Notes
Operational Activities
Net Income		7,095,077	5,942,878	6,919,080	5,799,562
Adjustment to Net Income		57,332,110	2,662,402	60,657,215	6,292,704
Allowance for Loan Losses	8.e	5,936,734	8,657,383	7,064,177	10,362,601
Provision for Legal Proceedings and Administrative and Legal Obligations	19.c	682,691	693,936	748,235	788,593
Monetary Adjustment of Provision for Legal Proceedings and Administrative and Legal Obligations	19.c	256,714	198,219	281,504	229,162
Deferred Tax Credits and Liabilities	10	444,203	(13,232,363)	441,755	(13,391,622)
Equity in Affiliates and Subsidiaries	13	(1,959,333)	(1,822,223)	(28,566)	(9,548)
Depreciation and Amortization	24	2,289,078	1,257,520	2,413,988	1,512,014
Recognition (Reversal) Allowance for Other Assets Losses	27	18,008	(10,660)	12,901	(20,408)
Gain (Loss) on Sale of Other Assets	27	(48,891)	(30,607)	(45,565)	(21,150)
Gain (Loss) on Sale of Investments	27	-	(168,588)	59	(168,588)
Provision for Financial Guarantees	18.a	68,864	22,140	68,864	22,140
Monetary Adjustment of Escrow Deposits	25	(89,156)	(194,100)	(106,148)	(222,440)
Recoverable Taxes	25	(147,406)	(104,250)	(155,573)	(121,134)
Effects of Changes in Foreign Exchange Rates on Cash and Cash Equivalents		(5,325)	2,432	(5,325)	2,432
Effects of Changes in Foreign Exchange Rates on Assets and Liabilities		49,872,057	7,437,463	49,872,057	7,437,463
Others		13,872	(43,900)	94,852	(106,811)
Changes on Assets and Liabilities		(59,342,287)	21,026,605	(59,265,674)	29,549,008
Decrease (Increase) in Interbank Investments		24,164,722	(15,026,083)	29,564,925	(686,774)
Decrease (Increase) in Securities and Derivative Financial Instruments		11,899,979	(35,949,907)	9,409,958	(37,638,082)
Decrease (Increase) in Lending and Leasing Operations		(26,398,275)	(44,489,416)	(31,086,826)	(45,910,563)
Decrease (Increase) in Deposits on Central Bank of Brazil		(2,639,646)	12,237,319	(2,665,608)	12,531,685
Decrease (Increase) in Other Receivables		45,267,855	(50,393,080)	44,496,192	(48,195,538)
Decrease (Increase) in Other Assets		(261,970)	(279,893)	(155,289)	(253,431)
Net Change on Other Interbank and Interbranch Accounts		(5,206,070)	(3,253,311)	9,700,910	(2,027,289)
Increase (Decrease) in Deposits		8,958,711	87,045,960	8,535,789	85,133,317
Increase (Decrease) in Money Market Funding		(32,544,712)	1,254,931	(31,549,219)	979,231
Increase (Decrease) in Borrowings		7,324,629	7,057,076	7,284,829	6,569,259
Increase (Decrease) in Other Liabilities		(88,850,958)	62,854,894	(100,328,415)	60,036,725
Increase (Decrease) in Change in Deferred Income		64,889	(31,885)	58,659	190,666
Income Tax Recovered/(Paid)		(1,121,441)	-	(2,531,079)	(1,180,198)
Net Cash Provided by (Used in) Operational Activities		5,084,900	29,631,885	8,310,621	41,641,274
Investing Activities
Increase in Equity at Affiliates and Subsidiaries	13	-	(385,100)	-	(6,000)
Investment Acquisition		-	(130)	-	(130)
Acquisition of Fixed Assets		(374,469)	(506,672)	(387,139)	(596,703)
Intangible Applications		936,500	(474,226)	723,373	(804,719)
Net Cash Received on Disposal of Investments		-	266,100	-	171,220
Acquisition of Residual Minority Interest in Subsidiary		(600,000)	(1,600,000)	(18,664)	(1,600,000)
Disposal of Non-Financial Assets Held for Sale		343,668	255,038	354,469	270,325
Disposal of Fixed Assets		23,634	56,190	573,482	60,114
Disposal of Interests in Affiliates and Subsidiaries		876,065	-	-	-
Dividends and Interest on Equity Received		-	289,524	39,612	152,761
Net Cash Provided by (Used in) Investing Activities		1,205,398	(2,099,276)	1,285,133	(2,353,132)
Financing Activities
Purchase of Own Share	20	81,588	(111,373)	81,588	(111,373)
Issuance of Long - Term Emissions		56,264,246	46,892,014	53,546,544	36,662,956
Long - Term Payments		(46,964,881)	(49,038,353)	(47,732,251)	(49,038,353)
Payments of Eligible Debt Instruments to Capital		-	(436,407)	-	(436,407)
Dividends and Interest on Capital Paid		(4,057,853)	(8,360,113)	(4,115,414)	(8,425,919)
Increase (decrease) in Minority Interest		5,323,100	(11,054,232)	1,780,467	(21,349,096)
Net Cash Provided by (Used in) Financing Activities		5,325	(2,432)	5,325	(2,432)
Exchange Variation on Cash and Cash Equivalents		11,618,723	16,475,945	11,381,546	17,936,614
Increase (Decrease) in Cash and Cash Equivalents	4	29,191,171	21,421,432	28,999,315	21,443,663
Cash and Cash Equivalents at the Beginning of Semester	4	40,809,894	37,897,377	40,380,861	39,380,277

The accompanying notes from Management are an integral part of these financial statements.

Statement of Value Added

					Bank				Consolidated
		01/01 to 06/30/2021		01/01 to 06/30/2020		01/01 to 06/30/2021		01/01 to 06/30/2020
	Notes
Income Related to Financial Operations		25,092,779		73,967,441		30,253,142		79,563,473
Income Related to Bank Charges and Banking Service Fees	22	7,481,091		6,657,293		9,551,724		8,584,345
Allowance for Loans Losses	8.e	(5,936,734)		(8,657,383)		(7,064,177)		(10,362,601)
Other Revenues and Expenses		(3,388,737)		11,127,747		(4,112,860)		10,741,886
Financial Expenses		(841,324)		(68,953,538)		(1,678,175)		(69,546,504)
Third-party Input		(4,031,153)		(3,627,068)		(4,232,884)		(4,217,331)
Materials, Energy and Others		(129,235)		(139,471)		(137,879)		(146,489)
Third-Party Services	24	(1,071,342)		(883,218)		(1,268,193)		(1,171,919)
Others		(2,830,576)		(2,604,379)		(2,826,812)		(2,898,923)
Gross Added Value		18,375,922		10,514,492		22,716,770		14,763,268
Retentions
Depreciation and Amortization	24	(2,289,078)		(1,257,520)		(2,413,988)		(1,512,014)
Added Value Produced Net		16,086,844		9,256,972		20,302,782		13,251,254
Added Value Received from Transfer Investments in Affiliates and Subsidiaries	13	1,959,333		1,822,223		28,566		9,548
Added Value to Distribute		18,046,177		11,079,195		20,331,348		13,260,802
Added Value Distribution
Employee		3,446,718	19.1%	3,614,803	32.6%	3,978,470	0.0%	4,105,649	31.0%
Compensation	23	1,699,140		1,826,713		1,958,920		2,066,652
Benefits	23	594,143		631,309		706,617		724,363
Government Severance Indemnity Funds for Employees - FGTS		162,531		144.814		192,968		175,481
Others		990.904		1,011,967		1,119,965		1,139,153
Taxes and Contributions		7,109,238	39.4%	1,126,249	10.2%	8,967,675	0.0%	2,859,499	21.6%
Federal		6,754,897		798,860		8,521,200		2,449,589
State		336		166		376		235
Municipal		354,005		327,223		446,099		409,675
Compensation of Third-Party Capital - Rental	24	395,144	2.2%	395,265	3.6%	398,205	0.0%	404,137	3.0%
Remuneration of Interest on Capital		7,095,077	39.3%	5,942,878	53.6%	6,986,998	0.0%	5,891,517	44.4%
Dividends	20.b	3,000,000		-		3,000,000		-
Interest on Equity	20.b	-		890,000		-		890,000
Profit Reinvestment		4,095,077		5,052,878		4,054,916		5,074,557
Participation Results of Non-Controlling Stockholders	20.e	-		-		(67,918)		(73,040)
Total		18,046,177	100.0%	11,079,195	100.0%	20,331,348	0.0%	13,260,802	100.0%

1.General Information

Or Banco Santander (Brasil) SA (Banco Santander or Banco), directly and indirectly controlled by Banco Santander, SA, headquartered in Spain (Banco Santander Spain), and leading institution of two Financial and Prudential Conglomerates (Santander Conglomerate) or Central Bank do Brasil (Bacen), incorporated as a joint stock company, headquartered at Avenida Presidente Juscelino Kubitschek, 2041, Cj. 281, Block A, Cond. Wtorre JK - Vila Nova Conceição - São Paulo - SP. Banco Santander acts as a multiple-service bank and develops its operations through commercial, investment, credit, financing and investment, real estate credit, leasing and foreign exchange operations. Through controlled companies, there are also markets for payment institution, consortium management, mobile securities brokerage, insurance brokerage, consumer finance, digital platforms, benefits management, management and recovery of non-performing loans, capitalization and bonds private., And provision and administration of food stamps, meals and others. How operations are conducted in the context of a group of institutions that fully serve the financial market. The benefits and costs corresponding to the services provided are absorbed between them and are realized in the normal course of two businesses and under switching conditions.

2.Presentation of Financial Statements

The individual and consolidated financial statements of Banco Santander, which include its branches abroad (Bank) and the consolidated statements (Consolidated), were prepared in accordance with the accounting practices adopted in Brazil, established by the Brazilian Corporate Law, together with the norms of the National Monetary Council (CMN), Bacen and the document model provided for in the Accounting Plan of National Financial System Institutions (COSIF), of the Brazilian Securities Commission (CVM), in which they do not conflict with the norms issued by Bacen and show evidence all relevant information specific to the financial statements, which are consistent with those used by Management in its management.

CMN Resolution No. 4,818/2020 and BCB Resolution No. 2/2020 establish the general criteria and procedures for preparing and disclosing the Financial Statements. BCB Resolution No. 2/2020, revoked Bacen Circular No. 3,959/2019, and entered into force as of January 1, 2021, being applicable in the preparation, disclosure and remittance of Financial Statements. Said standard, among other requirements, determined the separate disclosure in an explanatory note of recurring and non-recurring results.

On May 27, 2021, CMN Resolution No. 4,911 was published, which will become effective on January 1, 2022 and propose changes to the documents and disclosures to be made. The Bank is in the process of evaluating and adapting to the Resolution, which determines the extinction of the documents:

·Trial Balance and Balance Sheet - headquarters and dependence (documents 4020 and 4026);

·Analytical Balance Sheet - Consolidated Position of Branches and Equity Interests Abroad (document 4343);

·Balance Sheet and Balance Sheet of the Financial Conglomerate (documents 4040 and 4046);

·Analytical Balance Sheet - Individual Position of Equity Interest Abroad (document 4313) will be simplified;

·Prudential Conglomerate Financial Statements with Explanatory Notes / Auditor's Opinion.

The resolution maintains the obligation to publish documents:

·Analytical Balance Sheet – Prudential Conglomerate, monthly (CADOC 4060);

·Balance Sheet – Prudential Conglomerate, semiannually (CADOC 4066), for the base dates of June 30 and December 31; and

·Report on the Prudential Conglomerate, every six months, for the base dates of June 30 and December 31 (which will be further detailed by the regulator).

The preparation of the financial statements requires the adoption of estimates by Management, impacting certain assets and liabilities, disclosures on provisions and contingent liabilities, and revenues and expenses in the periods shown. Since Management's judgment involves estimates regarding the probability of occurrence of future events, the actual amounts may differ from these estimates, the main ones being provision for expected losses associated with credit risk, realization of deferred tax assets, provision for legal proceedings, civil, tax and labor, pension plan and the fair value of financial assets.

The Board of Directors authorized the issue of individual and consolidated financial statements for the semester ended June 30, 2021, at the meeting held on July 27, 2021.

The Condensed Consolidated Interim Financial Statements prepared based on the international accounting standards issued by the International Accounting Standards Board (IASB) for the semester ended June 30, 2021 were simultaneously disclosed on the website www.santander.com.br/ri.

3.Significant Accounting Policies

a)Calculation of the result

The accounting method for calculating the result is on an accrual basis and considers income, charges and monetary or exchange variations, calculated at official indices or rates, pro rata day levied on assets and liabilities restated up to the balance sheet date.

b)Functional Currency

Functional Currency and Presentation Currency

CMN Resolution No. 4,524 of September 29, 2016, with prospective application from January 1, 2017, started to establish accounting procedures for recognition by financial institutions and other institutions authorized to operate by Bacen that hold investments abroad: I - the effects of exchange variations resulting from the conversion of transactions carried out in foreign currency by investees abroad into the respective functional currencies; II - the effects of exchange variations resulting from the conversion of the balances of the financial statements of investees abroad from the respective functional currencies to the national currency; and III - operations with the purpose of hedging the exchange variation of investments abroad. These changes did not impact Banco Santander's financial statements in 2020. The functional currency is the currency of the main economic environment in which the entity operates.

The financial statements are presented in Reais, the functional and presentation currency of Banco Santander and its subsidiaries, including its subsidiary and foreign branches.

The assets and liabilities of the foreign branches and subsidiary are translated into Real as follows:

• Assets and liabilities are translated at the exchange rate on the balance sheet date; and

• Income and expenses are converted at the monthly average exchange rate.

c)Current and Long-Term Assets and Liabilities

They are stated at realization and/or liability values, including income, charges and monetary or exchange variations earned and/or incurred up to the balance sheet date, calculated on a daily pro rata basis and, when applicable, the effect of adjustments to reduce the cost of assets at their market value (fair value) or realization.

Receivables and payables within 12 months are classified in current assets and liabilities, respectively. Securities classified as trading securities, regardless of their maturity date, are fully classified in current assets, as established by Bacen Circular 3,068/2001.

d)Cash and Cash Equivalents

For the purposes of the statement of cash flows, cash equivalents correspond to the balances of interbank investments with immediate convertibility, subject to an insignificant risk of change in value and with an original term equal to or less than ninety days.

e)Interbank investments of liquidity and interest-bearing credits linked to Bacen

They are stated at realization and/or liability values, including income, charges and monetary or exchange variations earned and/or incurred up to the balance sheet date, calculated on a daily pro rata basis.

e.1) Repo Transactions

Sale with Repurchase Agreement

Own fixed-income securities used to back repurchase agreements are highlighted in specific asset accounts (restricted securities) on the transaction date, at the updated average book value, by type and maturity of the security. The difference between the repurchase and sale amounts represents the transaction expense.

The Bank also uses third-party guarantees to raise funds in sales operations with a repurchase agreement, such funding is recorded as a financed position.

Purchase with Resale Commitment

Financing granted based on fixed income securities (from third parties) are recorded in the bank position at the settlement value. The difference between the resale and purchase values ​​represents the transaction income. Securities acquired with resale commitment are transferred to the financed position when used to back sales transactions with repurchase commitment.

Repurchase Transactions carried out with Free Movement Agreement

For operations with a free movement clause, at the time of the definitive sale of the securities acquired with a resale commitment, the liability related to the obligation to return the security must be evaluated at the security's market value.

f) Bonds and Securities

The securities portfolio is demonstrated, in accordance with Circular No. 3.068/2001 of Central Bank, by the following accounting registration and evaluation criteria:

I - trading securities;

II - securities available for sale; and

III - securities held to maturity.

Securities for trading include securities acquired for the purpose of being actively and frequently traded and in the category held-to-maturity securities, those for which there is the Bank's intention and financial capacity to keep them in the portfolio until the Due date. The securities available for sale category includes securities that do not fit into categories I and III. Securities classified in categories I and II are stated at acquisition cost plus income earned up to the balance sheet date, calculated on a daily pro rata basis, adjusted to market value (fair value), computing the appreciation or depreciation arising from such adjustment in return:

(1) the adequate income or expense account, net of tax effects, in the income statement for the period, when related to securities classified in the trading securities category; and

(2) the separate account of shareholders' equity, net of tax effects, when related to securities classified in the category of securities available for sale. Adjustments to market value (fair value) made on the sale of these securities are transferred to profit or loss for the period.

Marketable securities classified in the held-to-maturity category are stated at acquisition cost plus income earned through the balance sheet date, calculated on a daily pro rata basis.

Permanent losses in the realization value of marketable securities classified in the available-for-sale securities and held-to-maturity securities categories are recognized in income for the period.

g) Derivative Financial Instruments

Pursuant to Central Bank Circular No. 3.082/2002, derivative financial instruments are classified according to Management's intention to use them as a hedge instrument or not. Transactions carried out at the request of customers, on their own, or that do not meet the accounting hedge criteria, mainly derivatives used in the management of global risk exposure, are accounted for at market value, with realized and unrealized gains and losses, recognized in the income for the period.

Derivative financial instruments designated as part of a risk protection structure (hedge) can be classified as:

I - market risk hedge; and

II - cash flow hedge.

Derivative financial instruments intended for hedging and the respective hedge objects are adjusted to market value, observing the following:

(1) for those classified in category I, the appreciation or depreciation is recorded against the appropriate income or expense account, net of tax effects, in the income statement for the period; and

(2) for those classified in category II, the valuation or devaluation of the effective portion is recorded as a contra entry to a separate shareholders' equity account, net of tax effects.

Some hybrid financial instruments are composed of a derivative financial instrument and a non-derivative asset or liability. In these cases, the derivative financial instrument represents an embedded derivative. Embedded derivatives are recorded separately in relation to the contract to which they are linked.

We do not have net investment hedge transactions in foreign operations as defined in CMN Resolution No. 4.524/2016.

h) Loan Portfolio and Provision for Expected Losses Associated with Credit Risk

The credit portfolio includes credit operations, leasing operations, advances on exchange contracts and other credits with credit granting characteristics. It is stated at its present value, considering the indices, interest rate and agreed charges, calculated on a daily pro rata basis until the balance sheet date. For operations overdue after 60 days, recognition in revenue will only occur when they are actually received.

Normally, the Bank writes-off credits for loss when they are overdue for more than 360 days. In the case of long-term credit operations (over 3 years) they are written off when they complete 540 days in arrears. The credit operation written off for loss is registered in a memorandum account for a minimum period of 5 years and until all collection procedures have been exhausted.

Credit assignments without risk retention result in the write-off of the financial assets that are the object of the transaction, which are now kept in a memorandum account. The result of the assignment is fully recognized upon its realization.

As of January 2012, as determined by CMN Resolution No. 3,533/2008 and CMN Resolution No. 3,895/2010, all credit assignments with substantial risk retention will have their results recognized for the remaining terms of the operations, and the financial assets objects of the assignment remain recorded as credit operations and the amount received as obligations for sale or transfer of financial assets.

Provisions for credit operations are based on the analysis of outstanding credit operations (overdue and falling due), on past experience, future expectations and specific risks of the portfolios and on the Management's risk assessment policy in the constitution of provisions, as established by the CMN Resolution No. 2682/1999.

CMN Resolution No. 4,855 of September 24, 2020, which entered into force on January 1, 2021, determines that, for the criteria for provision of operations carried out under the programs instituted for the purpose of facing the effects of the pandemic of COVID-19 in the economy, in which there is a sharing of resources or risks between the Federal Government and participating institutions or a guarantee provided by the Federal Government, the percentages defined in Resolution No. 2,682 shall be applied only on the portion of the accounting value of the operation, whose credit risk is held by the institution. In cases of transfer to loss, the amount taken to memorandum accounts must be 100% of the transaction balance.

h.1) Credit Operation Restructuring

CMN Resolution 4,803, later amended by CMN Resolution No. 4,855 mentioned above, allowed Financial Institutions to reclassify to the level at which they were classified on February 29, 2020, operations renegotiated between March 1 and December 31, 2020 (wording given by resolution 4,855), not including those operations with a delay of fifteen days or more on February 29, 2020 and that present evidence of inability to honor the obligation under the new agreed conditions.

i) Non-Current Assets Held for Sale and Other Values ​​and Assets

Non-current assets held for sale include the book value of individual items, disposal groups or items that are part of a business unit destined for disposal (discontinued operations), whose sale in their current condition is highly probable and whose occurrence is expected for within a year.

Other amounts and assets refer mainly to assets not for own use, basically consisting of real estate and vehicles received as payment.

Non-current assets held for sale and assets not for own use are generally recorded at the lower of fair value less cost to sell and book value on the date they are classified in this category and are not depreciated.

j) Prepaid Expenses

Investments of resources in prepayments are accounted for, whose benefits or services will occur in subsequent years and are allocated to income, in accordance with the term of the respective contracts.

j.1) Commissions Paid to Bank Correspondents

Considering what is contained in CMN Resolution No. 4,294 and Bacen Circular No. 3,693 of December 2013, as of January 2015, commissions paid to intermediary agents for the origination of new credit operations are limited to the maximum percentages of (i) 6% of the value of the new originated operation and (ii) 3% of the value of the operation subject to portability.

These fees must be fully recognized as an expense when incurred.

k) Investments

Investments in associated and controlled companies are initially recognized at their acquisition cost, and subsequently valued using the equity method and the results are recognized in the result of interest in affiliates and subsidiaries. Other investments are stated at cost, reduced to recoverable value, when applicable.

Change in the Scope of Consolidation – Consists of the sale, acquisition or change in control of a specific investment.

l) Fixed Assets

It is stated at acquisition cost, net of the respective accumulated depreciation and is subject to the assessment of the recoverable value in annual periods.

Fixed assets are depreciated using the straight-line method, based on the following annual rates: buildings - 4%, facilities, furniture, equipment for use and security and communications systems - 10%, data processing systems and vehicles - 20% and improvements in third-party properties - 10% or until the lease agreement expires.

m) Intangible

Goodwill on the acquisition of subsidiaries and affiliates is amortized within 10 years, subject to the expectation of future results and is subject to the assessment of the recoverable amount in annual periods or more frequently if the conditions or circumstances indicate the possibility of loss of its value.

The rights for the acquisition of payrolls are accounted for by the amounts paid in the acquisition of rights to provide services for the payment of salaries, earnings, salaries, salaries, retirement, pensions and similar, from public or private entities, and amortized in accordance with the duration of the respective contracts.

Software acquisition and development expenses are amortized over a maximum period of 5 years.

n) Technical Provisions Related to Pension and Capitalization Activities

Technical reserves are set up and calculated in accordance with the determinations and criteria established in the regulations of the National Council for Private Insurance (CNSP) and the Superintendence of Private Insurance (SUSEP).

Technical Pension Provisions

Technical provisions are mainly constituted in accordance with the criteria below:

• Mathematical Provisions of Benefits to Be Granted and Granted (PMBaC and PMBC)

PMBaC is constituted from contributions collected through the capitalization financial system. The PMBC represents the obligations assumed in the form of continuing income plans, being constituted through actuarial calculations for the plans of the traditional types.

• Supplementary Coverage Provision (PCC)

The PCC must be created when insufficiency in the technical provisions resulting from the performance of the Liability Adequacy Test (TAP) is observed.

Technical provisions for capitalization

Technical provisions are set up in accordance with the criteria below:

• Mathematical provision for redemption results from the accumulation of applicable percentages on payments made, capitalized with the interest rate provided for in the plan and updated using the Basic Reference Rate (TR);

• Provision for redemption of prepaid securities is constituted from the cancellation due to non-payment or request for redemption of the security, based on the value of the mathematical provision for redemption constituted at the time of cancellation of the security and the provision for redemption of overdue securities is constituted after the end of the term of the title;

• Provision for unrealized drawings is constituted based on a percentage of the installment paid and is intended to cover the drawings in which the titles will compete, but which have not yet been carried out. The provision for raffles payable is set up for the titles drawn, but which have not yet been paid; and

• Provision for administrative expenses is intended to reflect the present value of future expenses on capitalization bonds whose validity extends after their constitution date.

o) Employee Benefit Plan

The post-employment benefit plans comprise the commitments assumed by the Bank to: (i) complement the benefits of the public pension system; and (ii) medical assistance, in the event of retirement, permanent disability or death for those eligible employees and their direct beneficiaries.

Defined Contribution Plan

Defined contribution plan is the post-employment benefit plan whereby the Bank and its subsidiaries, as sponsoring entities, pay fixed contributions to a pension fund during the period of employment of the beneficiary employee, without any legal or constructive obligation to pay additional contributions if the fund does not have sufficient assets to meet all benefits relating to services rendered in the current and prior periods.

Contributions made in this regard are recognized as personnel expenses in the income statement.

Defined Benefit Plans

Defined benefit plan is a post-employment benefit plan that is not a defined contribution plan and are presented in Note 28. For this type of plan, the obligation of the sponsoring entity is to provide the benefits agreed with the employees, assuming the potential actuarial risk that benefits will cost more than estimated.

Since January 2013, Banco Santander has applied the Technical Pronouncement of the Accounting Pronouncements Committee (CPC) 33 (R1), which establishes full recognition in a liability account when unrecognized actuarial losses (actuarial deficit) occur, in contra-entry to the account from equity (other equity valuation adjustments).

Main Definitions

- The present value of a defined benefit obligation is the present value, without deducting any plan assets, from the expected future payments required to settle the obligation resulting from employee service in the current and past periods.

- Deficit or surplus is: (a) the present value of the defined benefit obligation; minus (b) the fair value of plan assets.

- The sponsoring entity may recognize plan assets in the balance sheet when they meet the following characteristics: (i) the fund's assets are sufficient to meet all employee benefit obligations of the plan or sponsoring entity; or (ii) the assets are returned to the sponsoring entity for the purpose of reimbursing it for benefits already paid to employees.

- Actuarial gains and losses are changes in the present value of the defined benefit obligation resulting from: (a) adjustments for experience (effects of differences between the adopted actuarial assumptions and what actually occurred); and (b) effects of changes in actuarial assumptions.

- Current service cost is the increase in the present value of the defined benefit obligation resulting from the service provided by the employee in the current period.

- Past service cost is the change in the present value of the defined benefit obligation for service provided by employees in prior periods, resulting from a change in the plan or a reduction in the number of covered employees.

Post-employment benefits are recognized in income under other operating expenses - actuarial losses - retirement plans (Note 28) and personnel expenses (Note 23).

Defined benefit plans are recorded based on an actuarial study, carried out annually by an external specialized consulting entity and approved by Management, at the end of each year and effective for the subsequent period.

p) Share-Based Compensation

The Bank has long-term compensation plans with conditions for acquisition. The main conditions for acquisition are: (1) conditions of service, as long as the participant remains employed during the term; (2) performance conditions, the number of shares to be delivered to each participant will be determined according to the result of the measurement of a performance parameter of the Bank: comparison of the Total Shareholder Return (RTA) of the Santander Conglomerate with the RTA of the main global competitors of the Group and (3) market conditions, as some parameters are conditioned to the market value of the Bank's shares. The Bank measures the fair value of the services provided by reference to the fair value of the equity instruments granted on the grant date, considering the market conditions for each plan when estimating the fair value.

Settlement in Shares

The Bank measures the fair value of the services provided by reference to the fair value of the equity instruments granted on the grant date, considering the market conditions for each plan when estimating the fair value. In order to recognize personnel expenses against capital reserves over the term, as services are received, the Bank considers the treatment of service conditions and recognizes the amount for services received during the period of term, based on the best assessment of the estimate for the number of equity instruments expected to be granted.

Cash Settlement

For cash-settled share-based payments (in the form of share appreciation), the Bank measures the services provided and the corresponding liability incurred at fair value. This procedure consists of capturing the appreciation of the shares between the grant and settlement date. The Bank reassesses the fair value of the liability at the end of each reporting period, any changes in this amount are recognized in profit or loss for the period. In order to recognize personnel expenses against the provisions in "salaries payable" throughout the term, reflecting how services are received, the Bank records the total liability that represents the best estimate of the amount of valuation right of the shares that will be acquired at the end of the effective period and recognizes the value of services received during the effective period, based on the best available estimate. Periodically, the Bank reviews its estimate of the number of share appreciation rights that will be acquired at the end of the vesting period.

Variable Compensation Referenced to Shares

In addition to the administrators, all employees in a position of risk takers receive at least 40% of their variable remuneration deferred in at least three years and 50% of the total variable remuneration in shares (SANB11), subject to the participant's permanence in the Group throughout the term of the plan.

The plan is subject to the application of Malus and Clawback clauses, according to which deferred portions of variable compensation can be reduced, canceled or returned in cases of non-compliance with internal rules and exposure to excessive risks.

The fair value of the shares is calculated based on the average of the final daily quotation of the shares in the 15 (fifteen) last trading sessions immediately prior to the first business day of the grant month.

q) Funding, Issues and Other Liabilities

Fundraising instruments are initially recognized at their fair value, basically considered as the transaction price. They are subsequently measured at amortized cost (expenses) with the inherent expenses recognized as a financial cost (Note 16).

Among the criteria for initial recognition of liabilities, mention should be made of those instruments of a compound nature, which are classified as such, given the existence of a debt instrument (liabilities) and an embedded equity component (derivatives).

The registration of a compound instrument consists of the combination of (i) a principal instrument, which is recognized as a genuine liability of the entity (debt) and (ii) an equity component (convertibility derivative into common shares).

Pursuant to COSIF, hybrid capital and debt instruments represent obligations of issuing financial institutions and must be recorded in specific liability accounts and updated according to agreed rates and adjusted for the effect of exchange variation, when denominated in currency foreign. All remuneration referring to these instruments, such as interest and exchange variation (difference between the functional currency and the currency in which the instrument was denominated) must be recorded as expenses for the period, on an accrual basis.

Regarding the equity component, it is recorded at the initial moment due to its fair value, if different from zero.

The details pertaining to the issuance of composite instruments are described in Note 18.

r) Provisions, Contingent Liabilities, Contingent Assets and Legal Obligations - Tax and Social Security

Banco Santander and its subsidiaries are parties to legal and administrative proceedings of a tax, labor and civil nature, arising from the normal course of their activities.

Provisions include legal obligations, legal and administrative proceedings related to tax and social security obligations, whose object of challenge is their legality or constitutionality, which, regardless of the assessment of the probability of loss, have their amounts fully recognized in the financial statements.

Provisions are reassessed at the end of each reporting period to reflect the current best estimate and may be fully or partially reversed, reduced or may also be supplemented, when there is a change in risk in relation to the outflows of resources and obligations relevant to the process, including the decay of legal deadlines, the unappealable decision of the processes, among others.

Judicial and administrative provisions are constituted when the risk of loss of the legal or administrative action is assessed as probable and the amounts involved are measurable with sufficient certainty, based on the nature, complexity, and history of the actions and on the opinion of internal legal advisors and external and best available information. For lawsuits whose risk of loss is possible, provisions are not set up and information is disclosed in the explanatory notes (Note 18.h) and for lawsuits whose risk of loss is remote, no disclosure is made.

Contingent assets are not recognized in the accounts, except when there are real guarantees or favorable court decisions, over which there are no further appeals, characterizing the gain as practically certain. Contingent assets with probable success, if any, are only disclosed in the financial statements.

In the case of final and unappealable decisions favorable to Banco Santander, the counterparty has the right, if specific legal requirements are met, to file a rescission action within a period determined by the legislation in force. Termination actions are considered new actions and will be assessed for contingent liability purposes if and when they are filed.

s) Social Integration Program (PIS) and Contribution to Social Security Financing (COFINS)

PIS (0.65%) and COFINS (4.00%) are calculated on the revenue of the activity or main object of the legal entity. Financial institutions are allowed to deduct funding expenses when determining the calculation basis. PIS and COFINS expenses are recorded in tax expenses. For non-financial companies the rates are 1.65% for PIS and 7.6% for COFINS.

t) Corporate Income Tax (IRPJ) and Social Contribution on Net Income (CSLL)

The IRPJ charge is calculated at the rate of 15%, plus an additional 10%, applied to the profit, after making the adjustments determined by the tax legislation. CSLL is calculated at the rate of 15% for financial institutions and legal entities of private and capitalization insurance and 9% for other companies, levied on profit, after considering the adjustments determined by tax legislation. The CSLL rate, for banks of any kind, was increased from 15% to 20% effective as of March 1, 2020, pursuant to article 32 of Constitutional Amendment 103, published on November 13, 2019.

Tax credits and deferred liabilities are basically calculated on temporary differences between the accounting and tax results, on tax losses, negative basis of social contribution and adjustments to the market value of securities and derivative financial instruments. Deferred tax credits and liabilities are recognized at the rates applicable to the period in which the asset is expected to be realized and/or the liability settled.

Pursuant to current regulations, tax credits are recorded to the extent that their recovery is considered probable based on the generation of future taxable income. The expected realization of tax credits, as shown in Note 10, is based on projections of future results and based on a technical study.

u) Interest on Equity

Published on December 19, 2018, effective as of January 1, 2019, CMN Resolution No. 4,706 is prospectively applicable and determines procedures for the accounting record of capital remuneration. The Standard determines that Interest on Equity must be recognized from the moment they are declared or proposed and thus constitute an obligation present on the balance sheet date and, in compliance with this determination, this capital remuneration must be recorded in a specific account in Shareholders' Equity.

v) Reduction to the Recoverable Amount of Assets

Financial and non-financial assets are evaluated at the end of each period, in order to identify evidence of impairment of their book value. If there is any indication, the entity shall estimate the recoverable amount of the asset and such loss shall be recognized immediately in the income statement. The recoverable amount of an asset is defined as the greater of its fair value, net, of selling expenses and its value in use.

w) Payments and Advances based on Results

CMN Resolution No. 4,797 was revoked and replaced by CMN Resolution No. 4,820, which was amended by CMN Resolution No.

4.885, which came into effect on December 23, 2020, and with them, it was determined that financial institutions and others institutions

authorized to operate by the Central Bank of Brazil are prohibited from:

(i) remunerate equity, including in the form of advance, above the following amounts:

(a) the amount equivalent to 30% (thirty percent) of the net income adjusted pursuant to item I of art. 202 of Law No. 6.404, of December 15, 1976; and amount equivalent to the minimum distribution of profit established in the articles of association in the case of institutions incorporated as limited liability companies;

(b) the equivalent amount.

1. to the minimum mandatory dividend, established by art. 202 of Law No. 6.404 of 1976, including in the form of interest on equity, in the case of institutions incorporated as a corporation; or

2. the minimum distribution of profit established in the articles of association in the case of institutions incorporated in the form of limited liability companies;

(ii) repurchase own shares (it will only be allowed if through stock exchanges or organized over-the-counter market, up to a limit of 5% (five percent) of the shares issued, including the shares accounted for in treasury at the entry into force of this Resolution);

(iii) reduce the share capital, except in cases where it is mandatory, pursuant to the governing legislation or when approved by the Central Bank;

(iv) increase any remuneration, fixed or variable, of directors and members of the board of directors, in the case of corporations, and of administrators, in the case of limited liability companies;

Any anticipation of the amounts mentioned in items “a” and “b” of item I must be carried out in a conservative, consistent and compatible manner with the uncertainties of the current economic situation.

The amounts subject to the aforementioned prohibitions cannot be subject to future disbursement obligations, and these prohibitions apply from the date of publication of CMN Resolution No. 4,797 (on April 6, 2020) to December 31, 2020 and must be observed regardless of the maintenance of resources in an amount greater than the Additional Principal Capital (ACP), referred to in CMN Resolutions No. 4,193, of March 1, 2013, and 4,783, of March 16, 2020.

x) Results of Future Years

Refers to the income received before the fulfillment of the obligation period to which they originated, including non-refundable income, mainly related to guarantees and sureties provided and credit card annuities. The appropriation to the result is made in accordance with the term of the respective contracts.

y) Minority Shareholder Participation

The participation of non-controlling (minority) shareholders is recorded in a separate equity account of the controlling entity in the consolidated financial statements.

z) Financial Guarantees Provided

CMN Resolution No. 4,512 of July 28, 2016 and Bacen Circular Letter No. 3,782 of September 19, 2016 established accounting procedures to be applied, determining the constitution of a provision to cover losses associated with financial guarantees provided under any prospectively as of January 1, 2017. Losses associated with the probability of future disbursements linked to financial guarantees provided are evaluated in accordance with recognized credit risk management models and practices and based on consistent, reasonable information and criteria of verification. The provision must be sufficient to cover probable losses throughout the term of the guarantee provided and are periodically evaluated.

aa) Recurring/Non-recurring Results

BCB Resolution No. 2, of November 27, 2020, in its article 34, started to determine the segregation of recurring and non-recurring results. Therefore, a non-current result of the exercise is defined as that which: I - is not related or is incidentally related to the institution's typical activities; and II - is not expected to occur frequently in future fiscal years.

The nature and financial effect of events considered non-recurring are shown in Note 30.

ab) Non-financial assets held for sale

As of January 1, 2021, CMN Resolutions no. 4,747 and 4,748 of August 2019 and BACEN Circular Letter No. 3,994, which establish criteria for recognition and measurement of non-financial assets held for sale by Financial Institutions.

CMN Resolution No. 4,747, among other requirements, establishes that depending on the origin of non-financial assets held for sale, financial institutions must classify them as:

a) own;

b) received in the settlement of a difficult or doubtful financial instrument as a form of payment of doubtful financial instruments not intended for its own use.

CMN Resolution No. 4,748, establishes that financial institutions and other institutions authorized to operate by the Central Bank of Brazil must comply with Technical Pronouncement CPC 46 - Fair Value Measurement (CPC46) in the measurement of equity and income elements, in situations in which the measurement at fair value of such elements is provided for in specific regulations.

ac) Current and Deferred Tax Assets and Liabilities

CMN Resolution No. 4,842, of July 30, 2020 consolidated the general criteria for measurement and recognition of current and deferred tax assets and liabilities by financial institutions and other institutions authorized to operate by the Central Bank of Brazil and BCB Resolution No. 15 , of september 17, 2020 (revoked BACEN Circulars No. 3.776/2015 and No. 3.174/2003), consolidated the procedures to be observed by institutions authorized to operate by the Central Bank of Brazil in the constitution or write-off of deferred tax assets and in the disclosure information on deferred tax assets or liabilities in the explanatory notes.

ad) Subsequent Events

Corresponds to the event that occurred between the base date of the financial statements and the date on which the issuance of these statements was authorized and comprises:

• Events that give rise to adjustments: are those that evidence conditions that already existed on the base date of the financial statements; and

• Events that do not give rise to adjustments: are those that show conditions that did not exist on the base date of the financial statements.

4.Cash and Cash Equivalents

				Bank
	06/30/2021	12/31/2020	06/30/2020	12/31/2019
Cash	28,091,844	19,522,250	20,790,248	9,543,649
Interbank Investments	12,718,051	9,668,922	17,107,129	11,877,783
Money Market Investments	5,163,132	7,348,568	12,744,453	110,746
Interbank Deposits	1,128,431	1,131,436	1,062,210	1,465,065
Foreign Currency Investments	6,426,487	1,188,917	8,967,936	10,301,972
Total	40,809,894	29,191,171	3,300,466	21,421,432
				Consolidated
	06/30/2021	12/31/2020	30/06/2020	12/31/2019
Cash	28,111,171	19,512,315	22,654,686	9,924,644
Interbank Investments	12,269,690	9,487,000	16,725,591	11,519,019
Money Market Investments	5,163,132	7,306,408	12,744,453	110,746
Interbank Deposits	680,071	991,675	679,822	1,105,446
Foreign Currency Investments	6,426,487	1,188,917	3,301,316	10,302,827
Total	40,380,861	28,999,315	39,380,277	21,443,663

5.Interbank Investments

					Bank
				06/30/2021	12/31/2020
	Up to 3 Months	From 3 to 12 Months	Over 12 Months	Total	Total
Money Market Investments	30,606,722	-	-	30,606,722	62,644,146
Own Portfolio	1,859,650	-	-	1,859,650	12,833,464
Financial Treasury Bills - LFT	83,040	-	-	83,040	2,869,850
National Treasury Bills - LTN	301,258	-	-	301,258	2,218,460
National Treasury Notes - NTN	1,475,352	-	-	1,475,351	7,745,154
Third-party Portfolio	6,098,716	-	-	6,098,716	6,203,774
National Treasury Bills - LTN	902,515	-	-	902,515	-
National Treasury Notes - NTN	5,046,039	-	-	5,046,039	-
Financial Treasury Bills - LFT	150,162	-	-	150,161	6,203,774
Sold Position	22,648,357	-	-	22,648,357	43,606,908
National Treasury Bills - LTN	2,834,909	-	-	2,834,909	1,498,684
National Treasury Notes - NTN	19,199,583	-	-	19,100,583	8,469,234
Financial Treasury Bills - LFT	712,865	-	-	712,865	33,638,990
Interbank Deposits	8,879,811	44,209,562	32,665,913	85,755,286	80,071,025
Foreign Currency Investments	6,426,487	-	-	6,426,487	1,188,917
Total	45,913,020	44,209,562	32,665,913	122,788,495	143,904,088
					Consolidated
				06/30/2021	12/31/2020
	Up to 3 Months	From 3 to 12 Months	Over 12 Months	Total	Total
Money Market Investments	30,606,722	18,947	-	30,625,670	62,601,986
Own Portfolio	1,859,649	18,947	-	1,878,597	12,833,464
Financial Treasury Bills - LFT	83,040	-	-	83,040	2,869,850
National Treasury Bills - LTN	301,258	18,947	-	320,206	2,218,460
National Treasury Notes - NTN	1,475,351	-	-	1,475,351	7,745,154
Third-party Portfolio	6,098,716	-	-	6,098,716	6,203,774
National Treasury Bills - LTN	902,515	-		902,515	-
National Treasury Notes - NTN	5,046,039	-	-	5,046,039	-
Financial Treasury Bills - LFT	150,161	-	-	150,161	6,203,774
Sold Position	22,648,357	-	-	22,648,357	43,564,748
Financial Treasury Bills - LFT	2,834,909	-	-	2,834,909	1,456,524
National Treasury Bills - LTN	19,100,583	-	-	19,100,583	8,469,234
National Treasury Notes - NTN	712,865	-	-	712,865	33,638,990
Interbank Deposits	1,164,421	1,574,060	3,125,879	5,864,360	5,907,350
Foreign Currency Investments	6,426,488	-	-	6,426,488	1,188,917
Total	38,197,631	1,593,008	3,125,879	42,916,518	69,698,253

6.Securities and Derivatives Financial Instruments

a)Securities

I) By Category

					Bank					Consolidated
				06/30/2021	12/31/2020				06/30/2021	12/31/2020
		Effect of Adjustment to Fair Value on:					Effect of Adjustment to Fair Value on:
	Amortized Cost	Income	Equity	Carrying Amount	Carrying Amount	Amortized Cost	Income	Equity	Carrying Amount	Carrying Amount
Trading Securities	48,099,678	(114,535)	-	47,985,143	65,380,859	59,337,065	183,680	-	59,520,745	75,006,276
Government Securities	47,332,531	(112,428)	-	47,220,103	64,621,598	56,061,579	156,251	-	56,217,830	72,038,263
Private Securities	767,147	(2,107)	-	765,040	759,261	3,275,486	27,429	-	3,302,915	2,968,013
Available-for-Sale Securities	137,601,882	-	859,027	138,460,909	134,119,306	144,777,234	-	596,189	145,373,423	141,924,157
Government Securities	101,881,147	-	(65,741)	101,815,406	102,157,294	110,972,474	-	(334,228)	110,638,246	113,549,050
Private Securities	35,720,735	-	924,768	36,645,503	31,962,012	33,804,760	-	930,417	34,735,177	28,375,108
Held-to-Maturity Securities	13,680,425	-	-	13,680,425	16,317,905	13,680,425	-	-	13,680,425	16,317,905
Government Securities	12,425,787	-	-	12,425,787	14,739,539	12,425,787	-	-	12,425,787	14,739,539
Private Securities	1,254,638	-	-	1,254,638	1,578,365	1,254,638	-	-	1,254,638	1,578,365
Total Securities	199,381,985	(114,535)	859,027	200,126,477	215,818,070	217,794,724	183,680	596,189	218,574,593	233,248,338

II) Trading Securities

										Bank
			06/30/2021	12/31/2020	By Maturity					06/30/2021
Trading Securities	Amortized Cost	Adjustment to Fair Value -Income	Carrying Amount	Carrying Amount	Without Maturity	Up to 3 Months	From 3 to 12 Months	From 1 to 3 Years	Over 3 Years	Total
Government Securities	47,332,531	(112,428)	47,220,103	64,621,598	-	1,998,976	3,947,703	12,048,937	29,224,487	47,220,103
Financial Treasury Bills - LFT	2,873,524	362	2,873,886	2,208,130	-	559,070	623,521	896,242	795,053	2,873,886
National Treasury Bills - LTN	11,268,226	(19,538)	11,248,688	23,439,521	-	390,430	3,147,175	5,196,991	2,514,092	11,248,688
National Treasury Notes - NTN	32,492,692	(94,145)	32,398,547	38,186,441	-	394,925	169,306	5,940,700	25,893,616	32,398,547
Agricultural Debt Securities - TDA	29,050	1,238	30,288	44,820	-	2,103	7,465	15,001	5,719	30,288
Brazilian Foreign Debt Notes	652,909	(6)	652,903	678,533	-	652,274	235	3	391	652,903
Debentures	16,130	(339)	15,791	64,153	-	174	1	-	15,616	15,791
Private Securities	767,147	(2,107)	765,040	759,261	317,762	6,975	3,273	49,238	387,792	765,040
Investment Fund Shares	315,946	1,816	317,762	369,041	317,762	-	-	-	-	317,762
Debentures	159,532	(3,216)	156,316	273,671	-	6,722	2,676	42,508	104,410	156,316
Certificates of Real Estate Receivables - CRI	30,954	(73)	30,881	23,008	-	-	19	290	30,572	30,881
Certificates of Agribusiness Receivables - CRA	260,715	(634)	260,081	23,866	-	253	578	6,440	252,810	260,081
Financial Bills - LF	-	-	-	69,675	-	-	-	-	-	-
Total	48,099,678	(114,535)	47,985,143	65,380,859	317,762	2,005,951	3,950,976	12,098,175	29,612,279	47,985,143

										Consolidated
			06/30/2021	12/31/2020	By Maturity					06/30/2021
Trading Securities	Amortized Cost	Adjustment to Fair Value -Income	Carrying Amount	Carrying Amount	Without Maturity	Up to 3 Months	From 3 to 12 Months	From 1 to 3 Years	Over 3 Years	Total
Government Securities	56,061,579	156,251	56,217,830	72,038,263	-	2,371,128	4,624,847	16,984,219	32,237,636	56,217,830
Financial Treasury Bills - LFT	9,414,264	17,086	9,431,350	7,316,112	-	931,222	1,300,665	5,820,573	1,378,890	9,431,350
National Treasury Bills - LTN	11,279,624	(19,985)	11,259,639	23,450,858	-	390,430	3,147,175	5,207,942	2,514,092	11,259,639
National Treasury Notes - NTN	34,669,603	158,256	34,827,859	40,483,786	-	394,925	169,306	5,940,700	28,322,928	34,827,859
Agricultural Debt Securities - TDA	29,050	1,238	30,288	44,820	-	2,103	7,465	15,001	5,719	30,288
Brazilian Foreign Debt Bonds	652,909	(6)	652,903	678,533	-	652,274	235	3	391	652,903
Debentures	16,129	(338)	15,791	64,153	-	174	1	-	15,616	15,791
Private Securities	3,275,486	27,429	3,302,915	2,968,013	2,009,101	6,975	136,878	49,238	1,100,723	3,302,915
Shares	1,643,713	8,280	1,651,993	1,339,892	1,651,993	-	-	-	-	1,651,993
Investment Fund Shares	355,292	1,816	357,108	401,442	357,108	-	-	-	-	357,108
Debentures	851,207	18,040	869,247	1,077,513	-	6,722	2,676	42,508	817,341	869,247
Certificates of Real Estate Receivables - CRI	30,954	(73)	30,881	23,008	-	-	19	290	30,572	30,881
Certificates of Agribusiness Receivables - CRA	260,715	(634)	260,081	23,866	-	253	578	6,440	252,810	260,081
Bill of Exchange	133,605	-	133,605	32,618	-	-	133,605	-	-	133,605
Financial Bills - LF	-	-	-	69,675	-	-	-	-	-	-
Total	59,337,065	183,680	59,520,745	75,006,276	2,009,101	2,378,103	4,761,725	17,033,457	33,338,359	59,520,745

*For the purposes of Financial Statements, Securities Held for Trading are fully presented in the Balance Sheet in the short term.

III) Available-for-Sale Securities

											Bank
				06/30/2021	12/31/2020	By Maturity					06/30/2021
		Effect of Adjustment to Fair Value on:
Available-for-Sale Securities	Amortized Cost	Income	Equity	Carrying Amount	Carrying Amount	Without Maturity	Up to 3 Months	From 3 to 12 Months	From 1 to 3 Years	Over 3 Years	Total
Government Securities	101,881,147	-	(65,741)	101,815,406	102,157,294	-	13,186,026	6,568,697	31,483,260	50,577,423	101,815,406
Treasury Certificates - CFT	1,627	-	66	1,693	1,441	-	207	1,486	-	-	1,693
Securitized Credit	147	-	(10)	137	460	-	137	-	-	-	137
Financial Treasury Bills - LFT	28,047,925	-	(119,333)	27,928,592	20,633,213	-	-	-	7,937,574	19,991,018	27,928,592
National Treasury Bills - LTN	28,872,522	-	(659,119)	28,213,403	34,350,939	-	11,533,139	3,256,982	13,423,282	-	28,213,403
National Treasury Notes - NTN (2)	40,404,102	-	730,685	41,134,787	45,885,764	-	1,402,455	11,547	10,122,404	29,598,381	41,134,787
Brazilian Foreign Debt Bonds	1,238,132	-	(20)	1,238,112	1,285,477	-	250,088	-	-	988,024	1,238,112
Spanish Foreign Debt Bonds	2,822,727	-	(26,079)	2,796,648	-	-	-	2,796,648	-	-	2,796,648
Mexican Foreign Debt Securities	493,965	-	8,069	502,034	-	-	-	502,034	-	-	502,034
Private Securities	35,720,735	-	924,768	36,645,503	31,962,012	3,410,780	1,922,637	6,049,897	10,187,441	15,074,748	36,645,503
Shares	320	-	(269)	51	53	48	-	-	3	-	51
Investment Funds	3,111,307	-	-	3,111,307	1,894,532	3,111,307	-	-	-	-	3,111,307
Investment Fund Real Estate	197,271	-	-	197,271	200,691	197,271	-	-	-	-	197,271
Debentures (1)	18,632,223	-	869,496	19,501,719	14,968,154	18,982	860,829	1,495,364	6,442,439	10,684,105	19,501,719
Promissory Notes - NP	2,350,032	-	7,775	2,357,807	4,525,164	-	160,635	905,559	1,162,860	128,753	2,357,807
Financial Bills - LF	271,306	-	(2,554)	268,752	270,298	-	-	107,731	161,021	-	268,752
Certificates of Real Estate Receivables - CRI	3,042	-	74	3,116	23,625	-	-	-	-	3,116	3,116
Certificates of Agribusiness Receivables - CRA	165,481	-	(1,352)	164,129	171,916	-	��                -	-	36,289	127,840	164,129
Eurobonds	3,052,886	-	64,792�