1. Brazilian Banks’ Roadmap Medium-Term Perspectives New York, March 08, 2010M. Celina Vansetti-Hutchins, SENIOR VICE PRESIDENT

2. March, 2010 2 Agenda  Returning to a stable banking credit outlook  The near-term dynamics  Medium-term perspectives for the Brazilian banking system

3. March, 2010 3 Returning to a Stable Banking Credit Outlook  Economic risks are declining: upcoming favorable credit cycle  Liquidity restored; still incorporates support measures  High credit demand: bank’s growth guidance recently revised upwards  Balance sheets proven resilient to deteriorating asset quality and lower profits  Moody’s rating actions have been limited for Brazilian banks

4. March, 2010 4 Economic Conditions Support Recovery Strong Corporate Demand

5. March, 2010 5 Supportive Labor Market Lifts Loan Growth and Uncertainty on Consumer Credit

6. March, 2010 6 Liquidity and Funding Back to Normalcy Local Currency Funding Will Continue to Support Growth Domestic Investors Seeking High Yield: New Alternative Potentials A Function of Government’s Stimulus Measures

7. March, 2010 7 Liquidity and Funding Back to Normalcy International Capital Markets: Strong Demand for Brazil Risk Issue DateIssuerAmount USDTenorCoupon 29-mai-09BES Invest. Brasil1503 years5.750% 17-set-09Cruzeiro do Sul602 years9.000% 10-jun-09BNDES1,00010 years6.500% 17-set-09Cruzeiro do Sul1753 years8.000% 29-set-09Bradesco (sub)75010 years6.750% 20-out-09Banco do Brasil Perp (sub)1,500Perpetual8.500% 26-out-09Bco Panamericano2003 years7.000% 5-nov-09BMG (sub)30010 years9.950% 6-nov-09Fibra (sub)1107 years8.500% 23-dez-09Parana Banco1003 years7.375% TOTAL 20094,345 12-jan-10BNDES1,00010 years5.500% 20-jan-10Banco Votorantim75010 years7.375% 20-jan-10Bicbanco2753 years6.250% 22-jan-10Banco do Brasil5005 years4.500% 22-jan-10Banco do Brasil50010 years6.000% 8-fev-10Banco Pine1257 years8.750% 11-fev-10Banco Votorantim5003 years4.250% 22-fev-10Cruzeiro do Sul2505 years8.500% TOTAL 20103,900 TOTAL 2009 & 20108,245 Source: Valor Econômico, Moody’s

8. March, 2010 8 Strong Credit Demand Raises Growth Guidance

9. March, 2010 9 Good Prospects for Credit Quality Peak NPLs 90d + at 4.5% in September 2009 vs. 4.4% in December 2009 Leveling off Credit Costs

10. March, 2010 10 Asset Quality at Regional Level

11. March, 2010 11 Capital Could Be Rapidly Consumed by Growth Moody’s Rated Banks’ Capital Composition

12. March, 2010 12 Moody’s Scenario Analysis: Expected Losses Can Be Absorbed Within Capital and Earnings

13. March, 2010 13 Banking Systems Address Future Losses USSpainUKBrazil Coverage Ratio: Reserves % Estimated Losses 42.2%47.2%39.0%143.3%

14. March, 2010 14 Moody’s Bank Ratings Little Changed Since Mid-2008

15. March, 2010 15 Moody’s Bank Ratings Little Changed Since Mid-2008

16. March, 2010 16 The Near-Term Dynamics  Loan growth for 2010 should pick up beyond public banks’ origination  Funding replenishment supports asset growth  Credit costs likely to decline following stabilizing NPLs by 4Q09, thus also benefiting profitability  Managing government’s exit strategy – fiscal, non-fiscal, and sheer presence in the economy

17. March, 2010 17 Profitability Diversified Scale and business penetration in client base Margins trending down

18. March, 2010 18 Resilient Profitability at Regional Levels

19. March, 2010 19 Medium-Term Perspectives  Transitioning from exotic to mainstream implies permanence of stability and growth prospects; stable rules of the game  Long-term trend of interest rate points to a shift in asset and liability dynamics  Capital needs will be sourced on internal replenishment and by capital market alternatives  Improving financial architecture should boost competition  Prudential regulations will continue to bolster system's discipline: Brazil is not Eastern Europe

20. March, 2010 20 More Favorable Funding Dynamics  Attraction of longer-term funding may imply lower cost and less structural tenor mismatches  Diversification of investment instruments away from government securities  Increasing role of capital markets in support of new credit cycle – recent fundraising initiatives have been encouraging  Migration of assets under management to banks’ balance sheets

21. March, 2010 21 Excessive Leverage is an Ongoing Concern

22. March, 2010 22 Increasing Size of Market

23. March, 2010 23 Public Sector Banks: Narrowing the Gaps

24. March, 2010 24 Moody’s Rated Banks: Brazilian Banks with Resilient FSRs

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