Banco do Brasil. VII Credit Suisse Banks Field Trip

Transcription

1 Banco do Brasil VII Credit Suisse Banks Field Trip 1

2 Disclaimer This presentation contains references and statements, planned synergies, increasing estimates, projections of results and future strategy for Banco do Brasil, it s Associated and Affiliated Companies and Subsidiaries. Although these references and statements reflect the management s belief, they also involve imprecision and high difficult risks to be foreseen, consequently, they may conduct to a different result than the one anticipated here. These expectations are highly dependent on market conditions, on Brazil s economic and banking system performances, as well as on international market one. Banco do Brasil is not responsible for bringing up to date any estimate in this presentation. 2

3 The financial crisis impact in Brazil Liquidity crunch International funding dries up Sectors that suffered the most Banking, Foreign Trade, Agribusiness & Automobile Government support International reserves Reduction on Reserve requirements Tax exemption The outlook for 2009 Gloomy or Groomy? 3

4 Funding Funding Cost - % of Selic R$ billion Volume Cost Volume Cost Volume Cost 3Q07 2Q08 3Q08 Deposits % % % Core Deposits¹ % % % Money Market Borrowing % % % Total Funding % % % CDB 2 - Balance CDB - Inflow R$ billion R$ billion Aug/08 Sep/08 Oct/08 Nov/08 Dec/08 Aug/08 Sep/08 Oct/08 Nov/08 Dec/08 (1) Demand, Saving, Judicial and Especial Deposits (2) Time Deposit 4

5 Reserve Requirements Reserve Requirements Release - Impacts on BB Month Regulation September/08 Circular 3.405, of 09/24/08 October/08 November/08¹ Amount (R$ million) 200 Circular 3.408, of 10/08/ Circular 3.408, of 10/08/08 3,050 Circular 3.410, of 10/13/ Circular 3.410, of 10/13/08 1,300 Circular 3.413, of 10/14/08 1,200 Circular 3.416, of 10/24/08 1,080 Description Additional Reserve Requirement deductible amount decrease from R$ 100 million to R$ 300 million. Time Deposits Reserve Requirement deductible amount increase from R$ 300 million to R$ 700 million. Time and Demand Deposits Additional Reserve Requirement rate decrease from 8% to 5%. Additional Reserve Requirement deductible amount increase from R$ 300 million to R$ 1 billion. Time Deposits Additional Reserve Requirement deductible amount increase from R$ 700 million to R$ 2 billion. Demand Deposits Reserve Requirement rate decrease from 45% to 42% Deduction of Demand Deposits Reserve Requirement relating to the advance of FGC contributions - Circular of Circular of 10/30/08² 6,964 Deduction of Time Deposits Reserve Requirement to back Interbank loan portfolios purchase and interbank operations. Total 14,894 (1) November s amounts are estimates. (2) Reserve requirement potential release as long as the requirements are fulfilled. 5

6 Loan Portfolio Purchase Loan Portfolio Purchase - Breakdown (October Transactions) 27% 44% Since October, out of R$ 17.1 billion credit operations analyzed by BB, 40% were approved. 29% Payroll Vehicle Middle Market In October, R$ 5.9 billion of credit were purchased, including payroll, vehicle and middle market loan portfolios. Until November, R$ 8.2 billion in loan portfolios were purchased by BB, including payroll, vehicle and middle market loan portfolios. The transactions include loan portfolio purchase and interbank operations with loan portfolio collateral. 6

7 Flow of New Operations Jul/08 Aug/08 Sep/08 Oct/08 Nov/08 Dec/08 BFS* BB Jul/08 Aug/08 Sep/08 Oct/08 Nov/08 Dec/08 (*) Brazilian Financial System (1) Referential Credit to Tax Rate Businesses Individuals 7

8 BB - Flow of New Operations Businesses - Working Capital Businesses - ACC 1,367 2,896 1,455 3,758 2,167 2,449 2,856 2,722 2,393 1,227 1,290 1,820 Jul/08 Aug/08 Sep/08 Oct08 Nov/08 Dec/08 Jul/08 Aug/08 Sep/08 Oct08 Nov/08 Dec/08 Individuals - Car Loans Individuals - Payroll Loans Jul/08 Aug/08 Sep/08 Oct08 Nov/08 Dec/08 Jul/08 Aug/08 Sep/08 Oct08 Nov/08 Dec/08 8

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10 Inadimplência Businesses Pessoa Delinquency¹ Jurídica Credit Risk Sep/07 Oct/07 Nov/07Dec/07 Jan/08 Feb/08Mar/08 Apr/08 May/08 Jun/08 Jul/08 Aug/08 Sep/08 Past Due 15 SFN Past Due 15 BB Past Due 90 SFN Past Due 90 BB Inadimplência Individuals Delinquency¹ Pessoa Física Agribusiness Delinquency Sep/07 Oct/07 Nov/07Dec/07Jan/08 Feb/08Mar/08 Apr/08May/08Jun/08 Jul/08Aug/08 Sep/08 Past Due15 SFN Past Due15 BB Past Due90 SFN Past Due90 BB (1) Loan as Reference for Interest Rate *SFN= Brazilian Banking System Sep/07Oct/07Nov/07Dec/07Jan/08Feb/08Mar/08Abr/08May/08Jun/08Jul/08Aug/08Sep/08 Past Due90 BB Required Provision/Loan Portfolio 10

11 Individual Delinquency - Vintage¹ Delinquency +90 days Vintage Months Annual Vintage Analysis (since 2005) Client Risk: A,B,C,D and E Delinquency: 90 days (1) Individual Loan Operations except overdraft account, credit cards and vehicle loans 11

12 Credit Risk Q07 4Q07 1Q08 2Q08 3Q08 Allowance/Loan Portfolio - % Required Provision/Loan Portfolio - % Past Due Loans + 60 days/loan Portfolio - % 12

13 Credit Risk ,216 1,497 1,534 1,687 1,339 3Q07 4Q07 1Q08 2Q08 3Q08 Expenses for Loan Losses/Loan Portfolio¹ - % Expenses for Loan Losses - R$ million (1) Average loan portfolio and expenses of the past 12 months 13

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15 Agribusiness Loan Portfolio Agribusiness Loan Portfolio by Region Agribusiness Loan Portfolio by Financed Items Product R$ million Share Livestock 7, % Soybeans 3, % Sugar Cane 3, % Corn 3, % Coffee 1, % Poultry 1, % Orange 1, % Machinery and Equipment 1, % Others 35, % T o t a l 60, % Soft Commodities Price R$ / US$ ÍMar/02 = ÍMar/02 = CRB Index Soft Commodities in US$ 100 Í CRB Index Soft Commodities in R$(*) /06/ /06/ /06/2008 Fonte: Bloomberg. 15

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17 Basel II Implementation Capital Release - Seven Levels of Risk Weighting FPR - 75% FPR to retail credit operations - Risk mitigators taken into consideration in capital requirement Capital Requirement - Capital requirement for preapproved credit lines - From 50% to 100% FPR for ACC (FX operations) - Operational Risk capital allocation Basel¹ Q07 4Q07 1Q08 2Q08 3Q08 4Q08* (1) Since 3Q08 * BIS Ratio estimated for dec/08 considering change in the impacts of tax credits and the acquisition of Nossa Caixa and Banco Votorantin. Level I Level II 17

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19 Guidance Reported Guidance 9M08* 2008 Sustained Administrative Expenses 9.3% 7% - 10% ROE 26.7% 23% - 27% Credit Cards 23.7 million 25 million NIM 7.1% 7% - 7.5% Fee Income** 7.5% 5% - 8.0% Reviewed Loan Portfolio Domestic 37.1% 30% - 35% Individuals 45.4% 40% - 45% Businesses 42.9% 35% - 40% Agribusiness 24.9% 20% Total Deposits 33.6% 25% - 30% Tax Rate 23.4% 23% - 25% Allowance for Loan Losses 3.3% 3.5% - 3.8% Average Portfolio (*) Last 12 months growth rates (**) If the 4Q08 result remains as the 3Q08, the growth will be of 6.3% 19

20 Acquisition of Control of 20

21 Loan Portfolio 16.1 R$ billion Δ % over 3Q07 2Q (3.0) 12.0 (1.2) Q07 4Q07 1Q08 2Q08 3Q08 Market Share¹ - % Businesses (1) Domestic Loan Portfolio Individuals Agribusiness - Individuals Agribusiness - Businesses Abroad 21

22 The combination of BB and Nossa Caixa will create the largest branch network in the State of São Paulo Branches Located in the State of São Paulo Consolidation Branches Located in the State of São Paulo After the Recent Consolidation Process Source: Brazilian Central Bank figures as of June Branches 22

23 1 The synergies with Nossa Caixa credit growth can be captured even with an average spread of 4% R$ million Scenario 1 - Spread BB 9M08 Scenario 2 - Spread for Payroll Loans Scenario 3 - Conservative Spread Loan Portfolio BB 1 202,201 Loan Portfolio BB 202,201 Loan Portfolio BB 202,201 Total Deposits BB 1 230,050 Total Deposits BB 230,050 Total Deposits BB 230,050 Loan / Deposits 87.9% Loan / Deposits 87.9% Loan / Deposits 87.9% Loan Portfolio NC 2 11,489 Loan Portfolio NC 11,489 Loan Portfolio NC 11,489 Total Deposits NC 2 33,960 Total Deposits NC 33,960 Total Deposits NC 33,960 Loan / Deposits 33.8% Loan / Deposits 33.8% Loan / Deposits 33.8% 3 Additional Credit NC 18,360 Additional Credit NC 18,360 Additional Credit NC 18,360 Spread % Spread % Spread % Gains before Taxes 1,303.5 Gains before Taxes 2,019.6 Gains before Taxes 734,4 IR + CSLL 40% IR + CSLL 40% IR + CSLL 40% Gains after Taxes Gains after Taxes 1,211.7 Gains after Taxes Under different scenarios, even considering conservative assumptions, suggests gains after taxes in excess of R$440 million per year, in a recurring basis 1 Data from Banco do Brasil as of September 30, Data from Nossa Caixa as of September 30, Additional credit calculated based on the difference between the loan to deposits ratio of Banco do Brasil and Nossa Caixa. 4 Consolidated spread of Banco do Brasil as of September 30, Average spread for individuals of Banco do Brasil as of September 30, Conservative spread. 23

24 Synergies with credit expansion are possible even considering a reduction in growth expected for 2009 Spread 4.1% 7.0% 11.0% Loan Portfolio R$ million # of Clients - million Loan / Clients R$ Loan / Clients BB / Nossa Caixa BB São Paulo 44,662 11, ,570 2, x Average balance of additional credit R$ million 1 Net Gains - R$ million 1, , , , , , EPS - R$ 1, , , , , , Figures relative to September 30, Net gains calculated considering spread net of taxes (40% tax rate of IR + CSLL). 2 EPS of 2.65 forecasted for 2009 (Bloomberg consensus) was considered as the break-even point. 24

25 Why acquiring Nossa Caixa now? Timing Considerations Banco do Brasil s Historical P / BV 1 Favorable regulation MP n o 443 Scenario of increasing consolidation within the Brazilian banking sector Complementary operations with focus in the State of São Paulo and strong potential to capture synergies Average = 2.7x Average 2008 = 2.4x Price paid reflects strategic value of Nossa Caixa to BB and is in line with BB s historical trading multiple and recent transactions in the sector Precedent Transaction Multiples Date Buyer Target P/BV Nov-08 Itaú Unibanco 2.0x Sep-07 BB BESC 1.7x May-07 Santander Real 3.6x Feb-07 Societe Generale Cacique 2.6x Jan-07 Bradesco BMC 2.8x May-06 Itaú Bank Boston 2.1x Dec-05 Bradesco BEC 1.9x Feb-04 Bradesco BEM 2.3x Average 2.4x Jan-07 Mar-07 May-07 Jul-07 Sep-07 Nov-07 Jan-08 Mar-08 May-08 Jul-08 Sep-08 Nov x (19-Nov-08) 1 Price to book value based on Banco do Brasil s common shares (ON). Based on closing market prices and on the last available published shareholders equity. Source: Economática, Companies' reports and Brazilian Central Bank. 25

26 Strategic Partnership 26

27 Partnership Structuring Shareholders Equity Book Value of Banco Votorantim (R$ bn) Dividend Distribution to VF 2 45% stake acquisition on Banco Votorantim for R$ 3.0 billion 3.00 (0.75) Capital increase of R$ 1.2 billion, reaching a 50% stake in Banco Votorantim total capital % 50% 55% 50% Initial status Dividend distribution of BV to VF Post Dividend distribution Post stake acquisition (secondary) Capital increase from BB at BV Final status after capital increase Stake in BV (%) 100.0% 0.0% 55.0% 45.0% 50.0% 50.0% 27

28 Banco Votorantim Assets Evolution Brazilian largest financial institutions (ranked by total assets R$bn) Today 1 1. BANCO DO BRASIL 2 CAIXA 3. BANESPA 4. BRADESCO 5. BAMERINDUS) 6. NACIONAL 7. UNIBANCO 8. REAL 9. SAFRA 10. ECONOMICO 11. NOSSA CAIXA 12. BANRISUL 13. BNB 14. LLOYDS TSB BANK 15. SANTANDER NOROESTE 16. APLICAP (LIQ EXT) 17. ITAU HOLDING FIN 18. SANTANDER (BOZANO) 19. MULTIPLIC 20. BANERJ EX JUD) 21. CITIBANK, N.A. 22. BBM 23. BANORTE 24. SANTANDER BANESPA 25. ABN - AMRO BANK 26. BANKBOSTON, N.A. 27. IBM 28. ITAMARATI 29. UBS PACTUAL 30. BMB 1. BANCO DO BRASIL 2. CAIXA 3. BRADESCO 4. ITAÚ 5. UNIBANCO 6. BANESPA 7. REAL 8. SAFRA 9. HSBC BANK BRASIL 10. NOSSA CAIXA 11. SANTANDER BANESPA 12. SANTANDER BRASIL 13. ABN - AMRO BANK 14. SANTANDER NOROESTE 15. SANTANDER (BOZANO) 16. BNB 17.VOTORANTIM 4.8 bn 18. ITAU HOLDING FIN 19. BICBANCO 20. BANKBOSTON, N.A. 21. BARCLAYS 22. JP MORGAN (CHASE) 23. ALFA 24. BBM 25. LLOYDS TSB BANK 26. BESC 27. RURAL 28. UBS PACTUAL 29. BMB 30. ICATU 1. BANCO DO BRASIL 2. BRADESCO 3. CAIXA 4. ITAU HOLDING FIN 5. UNIBANCO 6. SANTANDER BRASIL 7. ABN - AMRO BANK 8. BANESPA 9. NOSSA CAIXA 10. CITIBANK 11. SAFRA 12. HSBC BANK BRASIL 13. VOTORANTIM 19bn 14. BANRISUL 15. BNB 16. SANTANDER (BOZANO) 17. JP MORGAN (CHASE) 18. BANKBOSTON, N.A. 19. LLOYDS TSB BANK 20. SANTOS (LIQ) 21. BNP PARIBAS 22. RURAL 23. ALFA 24. BASA 25. UBS PACTUAL 26. BMB 27. WESTLB 28. FIBRA 29. ABC BRASIL 30. VOLKSWAGEN 1. BANCO DO BRASIL 2. BRADESCO 3. ITAU HOLDING FIN 4. SANTANDER + ABN 5. CAIXA 6. UNIBANCO 7. HSBC BANK BRASIL 8.VOTORANTIM 64bn 9. SAFRA 10. NOSSA CAIXA 11. CITIBANK 12. UBS PACTUAL 13. BANRISUL 14. BBM 15. BNP PARIBAS 16. DEUTSCHE BANK 17. BNB 18. FIBRA 19. BICBANCO 20. JP MORGAN 21. BMB 22. BANESTES 23. PANAMERICANO 24. VOLKSWAGEN 25. BMG 26. DAYCOVAL 27. ING 28. BASA 29. GMAC 30. BANCO IBI 1. ITAÚ + UNIBANCO 2. BANCO DO BRASIL + NC 3. BRADESCO 4. SANTANDER + ABN 5. CAIXA 6. HSBC BANK BRASIL 7.VOTORANTIM 82 bn 8. SAFRA 9. CITIBANK 10. BANRISUL 11. BNP PARIBAS 12. UBS PACTUAL 13. FIBRA 14. BNB 15. ALFA 16. BBM 17. DEUTSCHE BANK 18. JP MORGAN 19. BICBANCO 20. VOLKSWAGEN 21. BANESTES 22. PANAMERICANO 23. SICREDI 24. BMB 25. DAYCOVAL 26. BMG 27. GMAC 28. BASA 29. ABC BRASIL 30. BESC 34.VOTORANTIM 0.8 bn Source: Austin Asis 1 Data from sep/08: considering the merger of Itaú-Unibanco and the acquisition of Nossa Caixa by BB (pro-forma) 28

29 Strategic reasons behind the partnership Banco do Brasil is the only retail bank that does not have a consumer finance arm Rationale of BV Financeira to Banco do Brasil Consumer Finance Portfolio Breakdown of Major Banks Consumer Finance Arm Controller Retail Funding Instituição + Crédito PF (R$ bi) % Crédito Total Veículos 1 (R$ bi) % Crédito PF % % % % % % % % % % % % Source: Quarterly company information, Central Bank Funding Generation + Assets 1 Considers CDC Auto and Leasing The strategic partnership will foster BB s vehicle financing growth off-branches, what today represents R$ 1.9 billion, 34% of vehicle loan portfolio 29

30 Banco do Brasil and Banco Votorantim Combination Vehicle Financing Payroll Loans Corporate and Large Corporate Credit 4 th place in ranking (16%) 1 st place in ranking (22%) 2 nd place in ranking (21%) Market Share (%) Market Share (%) Market Share (%) 12% 19% 14% 7% 4% 3% Source: Central Bank; Austin Asis; banks financial statements; press Note: Considering the merger of Itaú + Unibanco (pro-forma), sep/08 data for vehicle financing, jun/08 data for payroll deductible loans and dec/07 data for Corporate/Large loans 30

31 BB-BV Partnership Fit into Nossa Caixa acquisition Credit and Funding Fit Diversified Individuals Product Portfolio Huge Client Base (Individuals and Corporate) Low Cost Funding National Presence Low Cost Funding Low Leverage Resources Availability State of SP Payroll High Quality Asset Generation Diversified Corporate Product Portfolio Outsourced Distribution Brokerage House 31

32 Spread (p.p.) Evolution of vehicle financing in the last 12 months Although there was a small spike in delinquency rates, recent evolution of vehicle financing demonstrates spread increases and average maturity reductions 1 1 Final Balance (R$ bn) Estimated data for Spt/08, Oct/08 and Nov/08 1 Estimated data for Spt/08, Oct/08 and Nov/ Average Maturity (days) Delinquency (%) Dec-08 Jan-07 Feb-08 Mar-08 Apr/08 May/08 Jun-08 Jul-08 Aug/08 Sep/08 Oct/08 Nov Dec-08 Jan-07 Feb-08 Mar-08 Apr/08 May/ Jun-08 Jul-08 Aug/08 Sep/ Oct/08 Nov Dec Jan Feb Mar Apr/ Mai/ Jun Jul-08 Agug08 Sep/ Oct/08 Nov % 4.0% Market 3.0% 2.0% 1.0% 0.0% Nov-06 May-07 Nov-07 May-08 Nov-08 1 Estimated 1 data data for for Spt/08, Spt/08, Oct/08 Oct/08 and and Nov/08 Nov/08 1 Estimated data for Spt/08, Oct/08 and Nov/08 32

33 Investor Relations Unit SBS - Quadra 1 - Bloco C - Ed. Sede III 5th floor Brasília (DF) Phone: 55 (61) Fax: 55 (61) bb.com.br [email protected] For further information access bb.com.br/ir 33

34 Net Income ,859 4,590 1,642 1,290 2,347 1,644 2,037 3,841 5,059 1,364 1,217 1,559 1,463 1,867 3Q07 4Q07 1Q08 2Q08 3Q08 9M07 9M08 Net Income R$ million Return on Equity - % Recurring Net Income R$ million Recurring Return on Equity - % 34

35 Net Interest Income Q07 4Q07 1Q08 2Q08 3Q08 Annualized Selic Rate - % Annualized¹ NIM - % Annualized NIM by Loan Portfolio - % Q07 4Q07 1Q08 2Q08 3Q08 (1) Net Interest Income Over Earning Assets Individuals Businesses Agribusinesses 35

36 A stronger and more competitive Banco do Brasil + Improve capacity of assets origination in the competitive consumer finance industry; Access to well developed alternative distribution channels - auto dealers, partners and BV Financeira stores; Successful sales promotion model with nationwide presence in the vehicle financing industry; Strength positioning of BB in capital markets; Higher diversification in the corporate product portfolio 36

37 Other Informations Net Income Net Interest Income Loan and Funding Loan Portfolio Consumer Finance Businesses Foreign Trade Derivatives Agribusiness Contracts by Risk Levels New Contracts and Payments of 2008 Risk Mitigators Vintage Fee Income Administrative Expenses Ratios Structure Productivity 37

38 Net Income R$ million 2Q08 2Q08 Net Income 1,644 Net Interest Income Growth Allowance for Loan Losses Reduction Administrative Expenses Growth 103 Other Effects 54 3Q08 Recurring Net Income 2,037 One-off Items¹ 170 3Q08 Net Income 1,867 (1) Net of Taxes 38

39 R$ billion Net Interest Income Q07 4Q07 1Q08 2Q08 3Q08 9M07 9M08 Net Interest Income Interest Expenses Other Interest Revenues Loan Revenues 39

40 Loan and Funding Quarterly Flow Δ % over R$ million Sept/07 Jun/08 Sept/08 Sept/07 Jun/08 Total Funding 172, , , Total Deposits 172, , , Domestic Onlending - Official Institutions 16,528 19,255 19, Financial and Development Funds 1,847 2,251 2, FCO (Subordinated Debt) 9,829 10,774 11, Foreign Borrowings 5,530 5,750 6, Reserve Requirement (33,641) (39,421) (45,892) Net Loan Portfolio 140, , , Loan Portfolio 150, , , Allowance for Loan Losses 9,663 11,165 11, Available Funding 31,751 15,167 32, Ratio - % Net Loan Portfolio / Total Deposits Net Loan Portfolio / Total Funding Available Funding / Total Funding

41 Consumer Finance R$ billion Δ % over 3Q07 2Q Q07 4Q07 1Q08 2Q08 3Q08 Payroll Loans Credit Card Overdraft Account Other Car Loan Consumer Finance Backed by Direct Deposits 41

42 Loan Portfolio - Businesses R$ billion Δ % over 3Q07 2Q Q07 4Q07 1Q08 2Q08 3Q Middle and Large Companies SME 42

43 Foreign Trade ACC/ACE - Contracts ACC/ACE - Average Portfolio US$ billion Jun/08 Jul/08 Aug/08 Sep/08 Contracted Amount (US$ billion) Quantity of Contracts (million) Oct/08 Jun/08 Jul/08 Aug/08 Sep/08 Oct/08 43

44 Derivatives Currency Swap and Forward Contracts - Major Clients (R$ million) Client Contract BB Creditor 1 Swap Forward Forward Forward Forward Forward Forward Forward Forward Forward Others¹ Total (1) Include 899 clients and an average exposure of R$ 6.9 million. Client Contract BB Debtor 1 Swap (43.42) 2 Swap (38.94) 3 Forward (9.06) 4 Forward (5.37) 5 Forward (4.40) 6 Swap (2.73) 7 Swap (1.97) 8 Swap (1.75) 9 Forward (1.60) 10 Swap (1.59) Others¹ - (18.36) Total - (129.19) (1) Include 331 clients and an average exposure of R$ 5.8 million. 44

45 Agribusiness Loan Portfolio Agribusiness Contracts by Risk Levels 07/08 Harvest vs. 08/09 Harvest Contract Risk R$ million July to September/2007 July to September/2008 Amount Risk¹ Provision Amount Risk¹ Provision TOTAL 5, % , ,7% 47,98 Contracted Amount - R$ billion - Change % Credit Provisions Inflow - R$ million - Change % Q % 6.6 3Q Q % Q08 (1) Required Provision / Loan Portfolio 45

46 Agribusiness Loan Portfolio Agribusiness New Contracts and Payments of 2008 Average Risk Contracts 1.6% Contracted Amount R$ 25.3 bi Average Risk Payments 6.1% Amount Paid R$ 21.1 bi Contracts and Payments Average Risk % 4.0 8% R$ billion 3.0 6% 2.0 4% 1.0 2% - Jan Feb Mar Apr May Jun Jul Aug Sept 0% New Contracts Payments AR New Contracts AR Payments 46

47 Agribusiness Loan Portfolio New Contracts 08/09 Harvest Risk Mitigators 08/09 Harvest 07/08 Harvest 9.2% 9,2% 1.2% 1,2% 7,5% 7.5% 11,7% 11.7% 70.4% 74,2% 74.2% 25.8% 25,8% 50,0% 50,0% 50.0% 70,4% Agricultural Costs with Mitigation Agricultural Costs without Mitigation Agricultural Costs Working Capital Investment Agro Industrial Loan Marketing 47

48 Individual Delinquency - Vintage¹ 1Q07 Delinquency +90 days 1Q08 4Q07 3Q07 2Q07 3Q08 2Q08 Months Quarterly Vintage Analysis ( ) Client Risk: A,B,C,D and E Delinquency: 90 days (1) Individual Loan Operations except overdraft account, credit cards and vehicle loans 48

49 Fee Income R$ million Quarterly Flow Δ % over 3Q07 2Q08 3Q08 3Q07 2Q08 Fee Income 2,498 2,633 2, Account Fees Loan Fees Credit Card Fees Investment Fund Management Billings Interbank Collection Services Rendered to Affiliated Official Services Fee Others

50 Administrative Expenses¹ R$ million Δ % over 3Q07 2Q08 3,331 3,665 3,357 3,569 3, ,572 1,729 1,590 1,636 1, ,759 1,936 1,768 1,933 1, Q07 4Q07 1Q08 2Q08 3Q08 Personnel Expenses Other Administrative Expenses (1) Legal risk and one-off items are not included 50

51 Structure Employees - thousand Points of Service - thousand Q07 4Q07 1Q08 2Q08 3Q08 Accounts - thousand Q07 4Q07 1Q08 2Q08 3Q08 Branches Others 3Q07 4Q07 1Q08 2Q08 3Q08 51

52 Productivity Ratio¹ Q07 4Q07 1Q08 2Q08 3Q08 (1) Year to Date Coverage Ratio - % Efficiency Ratio - % Coverage Ratio discounted One-Off Items - % Efficiency Ratio discounted One-Off Items - % 52

53 Corporate Structure Banco do Brasil S.A. Votorantim Finanças S.A % (ON) 50.01% (ON) 50.01% (PN) 49.99% (PN) 50% Total 50% Total 100% BV Empreendimentos e Participações Ltda. BV Trading S.A. 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% CP Promotora de Vendas Ltda. BV Sistemas Ltda. BV Financeira S.A. BV Leasing Arrendamento Mercantil S.A. Votorantim CTVM Ltda. Votorantim Asset Management DTVM Ltda. Agência Banco Votorantim Nassau Banco Votorantim Securities Inc. Votorantim Bank Limited BV Corretora de Seguros 53

54 The transaction complements Banco do Brasil s growth strategy R$ billion Banco do Brasil 1 Banco Votorantim BB + Votorantim (50%) Growth + Total Assets % Loan Portfolio % Individuals % Corporations % Total Deposits % Net Income (nine months) % BIS Ratio % 13.6% 12.5% 100 bps Figures relative to September 30th, Considers BB + Nossa Caixa + BESC + Bescri. 2 BIS Ratio estimated for dec/08 considering change in the impacts of tax credits and the acquisition of Nossa Caixa. 54