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Banco do Brasil. 2 Strong Balance Sheet and low funding cost allow quick expansion of loans High and recurrent profitability Cost cutting leads to improving.

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Presentation on theme: "Banco do Brasil. 2 Strong Balance Sheet and low funding cost allow quick expansion of loans High and recurrent profitability Cost cutting leads to improving."— Presentation transcript:

1 Banco do Brasil

2 2 Strong Balance Sheet and low funding cost allow quick expansion of loans High and recurrent profitability Cost cutting leads to improving efficiency HighlightsHighlights Latin Americas largest bank in terms of deposits, assets, number of clients and distribution network One of the lowest funding costs among Brazilian banks

3 3 0% 20% 40% 60% 80% 100% 120% 140% 160% 180% Taiwan China Korea Malaysia Spain Egypt South Africa Chile India Turkey Mexico Russia Brazil Brazil: Low Penetration in Banking Services Approximately 40 million people do not have access to banking services in Brazil Brazil: Loans* / GDP (%) * Including leasing transactions Loans / GDP* (%) * As of % 14% 15% 18% 21% 23% 25% 30%

4 4 Banco do Brasil is the Largest Bank in Brazil Total Deposits (R$ billion) Assets (R$ billion) Loan Portfolio (R$ billion) Banco do Brasil BradescoItaúUnibancoNossa Caixa Banco do Brasil BradescoItauUnibancoNossa Caixa Banco do Brasil BradescoItauUnibancoNossa Caixa

5 5 14,870 5,498 3,199 1,282 1,099 Banco do Brasil BradescoItauUnibancoNossa Caixa Banco do Brasil is the Largest Bank in Brazil Number of Clients (million) Assets Under Management (R$ billion) Outlets Banco do Brasil BradescoItauUnibancoNossa Caixa Banco do Brasil BradescoItauUnibancoNossa Caixa

6 6 Largest number of branches in most Brazilian states Almost 15 thousand outlets and 41 thousand ATMs Presence in more than 21 countries, with branches in the major financial centers in the United States, United Kingdom, Japan and China, allows for a wider funding base and boosts trade finance Largest Distribution Network Midwest 388 Branches Retail: 378 Wholesale: 5 Government: 5 South 800 Branches Retail: 773 Wholesale: 22 Government: 5 Southeast 1494 Branches Retail:1437 Wholesale: 49 Government: 8 North 236 Branches Retail: 227 Wholesale: 2 Government: 7 Northeast 976 Branches Retail: 957 Wholesale: 8 Government: 11 6% 10% 25% 38% 21%

7 7 92.2% 80.9% 57.9% 55.8% 54.2% 48.1% 71.8% Q %55.9% 80.3%80.6% 93.1% 103.9% 112.1% 67.4% Q06 5,491 6,607 1,767 2,103 7, Q051Q06 11,298 11,524 2,992 3,156 12, Q051Q06 Efficiency Ratio (ER) Administrative Expenses (R$ Million) CAGR: 4.8% 5.5% ER = Administrative Expenses Operating Income Banking Services Fees / Personnel Expenses Banking Services Fees (R$ million) CAGR: 18.0% 19.0% Consistent Improvement in Operating Efficiency CAGR IPCA – 6.6%

8 8 Basel Ratio (%) Improvements in operating efficiency and risk assessment R$ 8 billion Capitalization PROEF Strong Balance Sheet Capital Structure Solid balance sheet structure with low leverage allows Banco do Brasil to benefit from credit expansion Q051Q06

9 9 3, ,343 2,381 4, Q051Q Q051Q06 Net Profits (R$ million) Return on Equity (%) CAGR: 32.1% R$ 1.4 billion from non-recurring revenues: 1)Activation of R$ 1.9 billion tax credits 2)Additional PCLD Expenses of R$ 500 million Recurring Profitability 23.5* * Recurrent profit per adjusted equity * 938

10 10 Countrys largest franchise –Wide presence of branches, servicing roughly 21.5 million clients –Large deposits base with low funding cost (demand, savings and legal deposits) –Leader in credit and debit card financial volumes Expansion of Real Estate loans, Payroll loans and Consumer Finance Partnerships with retailers Use of automated channels –Investments in IT amounting to R$ 1.2 billion in the past 2 years –Leader in Internet and Mobile Banking – 8.1 million clients enabled 0.04% 21.5 million clients 2.38% 3.55% 24.81% 69.13% Individuals Breakdown Banco do Brasils strategic focus and main business catalyst RetailRetail monthly salary > R$ 10,000 > R$ 4,000 > R$ 1,000 < R$ 1,000

11 11 Leader in trade finance, with volumes reaching US$ 11.9 billion in 2005 R$ 11.1 billion for working capital 29,200 corporate clients Services companies with annual revenues above R$ 10 million One of the leaders in underwriting of local debt Wholesale activity generates more than 2 million clients (individuals) to the retail segment Wide range of products and strong customer service WholesaleWholesale

12 12 R$ 21.7 billion in legal deposits are in Banco do Brasil: low-cost funding As demanded by law, legal deposits shall only be made in state-owned banks 4.3 million accounts from government employess: –1.5 million federal employees; –0.8 million state employees; –2.0 million municipal employees; Official bank of 7 Brazilian states Banco do Brasil: Strategic relationship with the Federal, State and Municipal Governments Public Sector

13 % market share (ANBID ranking)* R$ billion assets under management Strong participation of Institutional Investors and Individuals (68%) Well-known excellence in Asset Management Assets Under Management (R$ billion) Brazils Largest Asset Manager * ANBID – Associação Nacional de Bancos de Investimento Dez/03Dez/04Dez/05Mar/06 Institutional InvestorsIndividualsGovernment CorporateForeign Investors '

14 14 Novo Mercado Listing: long-term commitment to policies directed at creating value for shareholders 100% of common shares Two-year term for board of directors Global Compact, Princípio de Equador and Agenda 21 Corporate Governance Minimum of two independent board members in a total of seven

15 15 Board of Officers Units Directorships Autonomous Departments Internal Audit Agribusiness Commercial Controlling Investor Relations Marketing and Communication Legal Distribution and Retail Channels Finance Executive Secretariat VP of Retail Service and Distribution VP of Rural Businesses and Government Affairs VP of Technology and Logistic VP of Credit Controlling and Risk Management VP of Finance, Capital Market and Investor Relations Board of Director General Shareholders Meeting President Board of Auditors Audit Committee Information Technology Micro and Small Businesses Employee Relation And Social-Env. Responsibility VP of Human Resources and Social-Enviro- nmental Responsibility Government Affairs Retail Services Capital Markets and Investments Technology Human Resources Credit Internal Controls Foreign Trade International Software Development Security Management Strategy and Organization Risk Management Private Logistic Sustainable Regional Development VP of International Business and Wholesale Accounting Restructuring of Operational Assets StructureStructure

16 16 General Shareholders Meeting President Board of Officers SECEX VIFINVITECVICRIVIPIN VIPAG DIFIN DICOM DIGOV DIRAG DIRIN DIMEC VIVAR VIPES DILOG DIPES DIJUR SIT DITEC SDA RI DIREV DIRED DIREO DIRCO DICRE COGER DIMAC Internal Audit DICOI DIMPE DICEX DIRES DIRAO UGS Board of Auditors Board of Directors Audit Committee DRS DIRIS UAR StructureStructure


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