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Banco do Brasil National Meeting with Analysts and Investors

Banco do Brasil National Meeting with Analysts and Investors. Schedule. 1. Businesses leverage boost. 2. Stabilization of loan delinquency. 3. New scenario for Fee Income. 4. Continued upgrade in productivity. 5. Sustainable Businesses. 6. What’s next?. 1. Businesses leverage boost.

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Banco do Brasil National Meeting with Analysts and Investors

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  1. Banco do Brasil National Meeting with Analysts and Investors

  2. Schedule 1 Businesses leverage boost 2 Stabilization of loan delinquency 3 New scenario for Fee Income 4 Continued upgrade in productivity 5 Sustainable Businesses 6 What’s next?

  3. 1 Businesses leverage boost 2 Stabilization of loan delinquency 3 New scenario for Fee Income 5 Sustainable Businesses 6 What’s next? Schedule 4 Continued upgrade in productivity levels

  4. Net Interest Income boosted by strong credit growth... 25.9 24.5 R$ billion 20.8 62.6 18.1 16.8 58.4 15.7 26.4 23.9 40.0 36.7 33.6 31.3 14.7 15.1 14.4 14.2 36.2 34.5 25.3 21.6 19.2 17.1 2004 2005 2006 2007 2009¹ 2008 Loan Revenues Net Interest Income Other Interest Revenues ¹ Accumulated last 12 months

  5. 19.1 16.2 15.3 12.5 11.9 11.3 8.6 8.4 8.1 7.6 7.1 6.8 2004 2005 2006 2007 2008 2009² Selic - % 35.7 Spread¹ - % 30.1 28.7 25.4 21.0 20.2 9.0 8.4 8.1 6.8 6.9 6.7 6.3 6.0 5.2 5.6 5.5 5.7 2004 2005 2006 2007 2008 2009² ...although the reduction in interest rates brings a spread contraction. NIM by Loan Portfolio - % Individuals Agribusiness 1 Net Interest Income over Earning Assets annualized Businesses 2 Accumulated last 12 months

  6. 5.5 8.6 8.4 8.1 7.6 7.1 3.9 6.8 241.9 2.3 2.0 224.8 101.8 160.7 1.3 0.9 133.2 88.6 0.4 -0.6 -0.9 -1.2 -1.7 -1.2 2004 2005 2006 2007 2008 2009¹ In this scenario, NIM decrease is more than compensated by earning assets growth... Loan Portfolio – R$ billion Spread Effect2 – R$ billion Volume effect3 – R$ billion NIM4 1 Accumulated last 12 months 2 Net Interest Income change related to spread variation 3 Net Interest Income change related to the Average Earning Assets growth 4 Spread – Net Interest Margin over Earning Assets

  7. 18.3 17.1 16.5 16.0 15.9 15.3 241.9 224.8 14.7 15.1 R$ billion 64.4 CAGR (%): 26.7 160.8 63.7 12.2 11.4 133.2 19.6 12.2 101.8 51.9 101.7 88.5 30.0 9.2 45.1 97.2 9.0 36.9 35.7 30.0 65.5 51.9 38.5 33.4 61.1 48.8 32.0 24.0 16.1 18.4 2004 2005 2006 2007 2008 2009² ...demonstrated by the loan portfolio growth, that overcame the banking industry. Individuals Agribusiness Market Share1 - % Businesses Foreign 1 Domestic Loan portfolio ² Mar/09. Adds 13.8 billion from Nossa Caixa

  8. CAGR (%): 36.9 110.0 9.4 36.6 18.4 94.3 16.1 0.2 2.2 15.4 0.3 2.5 2.3 3.8 2.0 1.5 9.7 10.0 Others Car Loans Credit Cards Payroll Loans Overdraft Account In individual’s businesses, payroll and car loans lead the credit growth. 61.1 7.0 R$ billion 48.8 3.4 7.5 6.7 2.5 32.0 7.6 24.0 3.0 24.8 0.9 2.3 2.2 3.8 17.6 3.1 11.9 8.3 18.4 14.4 9.5 11.0 2004 2005 2006 2007 2008 2009¹ ¹ Mar/09

  9. 101.8 97.2 R$ billion CAGR (%): 30.0 37.4 34.9 65.5 27.8 51.9 24.6 38.5 18.3 31.3 33.4 64.4 15.4 62.3 13.2 40.9 33.6 23.1 20.2 2004 2005 2006 2007 2008 2009¹ Businesses loan portfolio exceeds R$ 100 billion... Middle and Large Companies SME ¹ Mar/09

  10. Businesses Individuals ...and the Agribusiness credit growth is followed by the intensive use of risk mitigators. 64.3 63.7 Agri Insurance 51.9 18.0 Contracted Crop 08/09 Crop 08/09 18.5 R$ billion 45.1 11.7 8.5 35.8 30.1 35% 5.3 65% 4.2 46.3 45.2 40.2 36.6 30.5 25.9 Insured Agricultural Costs Not Insured Livestock Costs Investment 2004 2005 2006 2007 2008 2009¹ Marketing Agroindustrial Costs ¹Mar/09

  11. CAGR (%): 24.9 9.9 21.3 12.2 22.8 35.1 Market Share - % Open Market Saving Deposits Time Deposits Demand Deposits Others The expressive growth in funding allowed business expansion. 24.7¹ 21.7 20.9 19.6 19.8 19.1 411.5 8.7 R$ bilhões 70.6 362.0 47.3 14.3 260.6 55.0 5.6 208.1 106.5 45.8 51.9 5.2 168.2 160.1 36.7 51.3 5.5 5.8 32.8 91.1 40.1 31.1 35.8 72.3 29.0 178.5 49.3 30.5 44.5 149.6 63.5 85.5 76.9 49.7 2004 2005 2006 2007 2008 2009² 1 Sep/08 2 Mar/09

  12. 5 Sustainable Businesses 6 What’s next? Schedule 1 Businesses leverage boost 2 Stabilization of loan delinquency 3 New scenario for Fee Income 4 Continued upgrade in productivity levels

  13. 5,743 5,380 4,527 3,528 2004 2005 2006 2007 Loan Portfolio increase with maintenance of quality... 5.0 4.7 4.3 3.8 3.7 3.6 7,757 6,800 6.6 6.5 6.4 6.4 6.1 6.1 5.8 5.7 5.4 5.4 5.4 5.1 3.4 2.9 2.8 2.7 2.7 2.4 2009³ 2008 2.5 Provision Expenses/Loan Portfolio¹ - % 2.2 2.1 2.0 Provision Expenses - R$ million 1.4 1.1 2009 2008 2004 2005 2006 2007 Additional + Required Provision / Loan Portfolio - % Required Provision / Loan Portfolio - % Past Due Loans + 90 days / Loan Portfolio - % 1 Average Loan Portfolio 2 Net of Recovery 3 Accumulated last 12 months Losses² / Loan Portfolio - %

  14. ...confirmed by delinquency levels, lower than Banking Industry. Businesses Delinquency¹ - % 5.2 4.3 4.0 3.9 3.7 3.7 3.5 3.2 3.7 3.4 2.7 2.6 2.4 3.3 2.9 2.2 2.0 1.8 2.4 2.1 2.0 2.0 1.7 1.8 2004 2005 2006 2007 2008 2009² Past Due 90 BI Past Due 90 BB Past Due 15 BI Past Due 15 BB Individuals Delinquency¹ - % 16.4 15.7 14.7 13.9 13.8 13.0 11.8 10.5 12.9 10.5 9.9 9.6 9.6 8.3 8.5 8.0 7.6 7.0 6.3 6.3 6.7 5.9 5.9 6.1 2004 2005 2006 2007 2008 2009² 1 Contracted operations loan as reference for interest rate 2 Mar/09 Past Due 90 BI Past Due 90 BB Past Due 15 BI Past Due 15 BB

  15. Loans¹ in the last crops show low delinquency levels. Delinquency 90 days Months Annual Vintage Analysis (since 2003) Client Risk: A.B.C.D and E Delinquency: 90 days 1 Individual Loan Operations except overdraft account, credit cards and car loans

  16. Agribusiness delinquency has shown lower delinquency levels than provisions. Agribusiness Delinquency - % 8.0 7.4 7.0 6.1 5.3 4.0 2.2 2.3 2.0 1.9 1.8 Equalization Revenues – R$ million 1.5 307 2004 2005 2006 2007 2008 235 2009¹ Past Due 90 BB Required Provision/Loan Portfolio 287 140 1,531 1,526 1,351 821 497 408 2009² 2004 2005 2006 2007 2008 ¹Mar/09 Equalization Revenues Weightening Factors ²Accumulated last 12 months

  17. 2 Stabilization of loan delinquency 5 Sustainable Businesses 6 What’s next? Schedule 1 Businesses leverage boost 3 New scenario for Fee Income 4 Continued upgrade in productivity levels

  18. 11.8 2008 The great diversity of BB’s loan portfolio and its huge client base allows the growth of non-financial income... Fee Income Accounts - million 11.8 30.6 30.4 R$ billion 27.4 9.9 1.9 1.9 25.7 8.9 24.4 1.7 22.1 7.6 1.6 1.4 6.6 1.4 28.7 28.5 25.7 24.2 23.0 20.8 2004 2005 2006 2007 2004 2005 2006 2007 2008 2009² 2009¹ Individuals Businesses Asset Management Revenues - Debit and Credit Cards 259.3 246.3 R$ billion R$ billion 69.7 66.2 220.1 182.7 50.5 153.5 38.6 124.0 30.3 24.8 2009² 2009¹ 2004 2005 2006 2007 2008 2004 2006 2007 2008 2005 ¹ Accumulated last 12 months ² Mar/09

  19. ...with an emphasis on non-banking businesses. R$ million Cards – Added Value 3,918 3,607 2,338 1,911 1,551 Insurance - Added Value 974 1,579 1,511 1,209 2004 2005 2006 2007 2008 2009¹ 1,130 889 749 2009¹ 2004 2005 2006 2007 2008 ¹Accumulated last 12 months

  20. 2 Stabilization of loan delinquency 5 Sustainable Businesses 6 What’s next? Schedule 1 Businesses leverage boost 3 New scenario for Fee Income 4 Continued upgrade in productivity levels

  21. 127.7 93.1 54.2 2004 2007 48.1 47.5 46.2 45.3 45.2 Banco do Brasil cost income ratio approaches the level of private banks... Coverage Ratio1 - % 132.0 124.5 112.9 102.3 Efficiency Ratio2 - % 2009³ 2005 2006 2008 2004 2005 2006 2007 2008 2009³ 1 Fee Income / Personnel Expenses 2 Administrative Expenses / Operating Income (without one-off itens) 3 Accumulated last 12 months

  22. ...with recurring productivity gains... Assets per Collaborator – R$ million Deposits per branch – R$ million 62.4 61.6 5.4 5.4 3.9 47.0 3.2 40.0 2.7 2.7 35.4 31.0 2009¹ 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 2009¹ Loan per branch – R$ million Clients per Collaborator 52.4 51.8 313 309 301 278 40.1 243 234 33.5 25.6 23.8 2009¹ 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008 2009¹ ¹ Mar/09

  23. 89.0 83.8 82.7 79.7 2004 2005 2006 2008 ...resultant from the mix of intensive tecnology and BB’s distribution network. Points of Service - thousand Employees - thousand 89.5 16.2 81.9 16.0 15.3 15.1 14.8 14.5 4.4 4.3 4.0 4.0 3.9 3.7 11.9 11.6 11.1 11.3 10.9 10.7 2007 2009¹ 2004 2005 2006 2007 2008 2009¹ Others Branches ATMs - thousand Transaction in Automated Channels - % 91.3 91.3 91.1 40.5 40.2 90.0 89.2 39.7 39.7 88.4 39.3 39.0 2004 2005 2006 2007 2008 2009¹ 2004 2005 2006 2007 2008 2009¹ ¹ Mar/09

  24. 2 Stabilization of loan delinquency 6 What’s next? Schedule 1 Businesses leverage boost 3 New scenario for Fee Income 4 Continued upgrade in productivity levels 5 Sustainable Businesses

  25. BB has incorporated in its businesses sustainable principles... Training Hours1 Employees Turnover - % 8,840 7,344 thousand hours 5,440 0.86 0.84 0.82 4,888 0.78 0.75 4,071 1Q08 2Q08 3Q08 4Q08 1Q09 1Q08 2Q08 3Q08 4Q08 1Q09 Loan Portfolio - BB Produção Orgânica Loan Porfolio - BB Florestal 13.2 R$ million R$ million 430.2 405.3 380.5 349.6 8.0 267.3 5.3 5.1 4.9 1Q08 2Q08 3Q08 4Q08 1Q09 1Q08 2Q08 3Q08 4Q08 1Q09 1 Hours accumulated in the last 12 months

  26. ...reflecting in the company’s daily routine the concern with eco-efficiency practices. Water Comsumption / Employee Main Building (m3) White Paper Comsumption / Client (g) 26.4 25.7 24.3 128.5 23.9 125.9 23.2 120.0 117.9 115.7 1Q08 2Q08 3Q08 4Q08 1Q09² 1Q09² 1Q08 2Q08 3Q08 4Q08 Transactions without use of paper - % Use of Toner (thousand units)1 40.0 23.1 21.7 22.8 22.4 22.4 39.8 38.6 38.3 37.8 1Q08 2Q08 3Q08 4Q08 1Q09 1Q08 2Q08 3Q08 4Q08 1Q09 1 Accumulated last 12 months 2 Reconditioned cartridges

  27. 6.70 2004 Growth, effective risk management, diversification, productivity gains, compose BB’s business model... Boost of businesses operations1 New scenario for Fee Income3 6.84 6.59 6.36 5.58 4.66 3.24 3.11 3.03 2.82 2.69 2.13 20095 2004 2005 2006 2007 2008 20095 2005 2006 2007 2008 Stability in Delinquency2 Continued evolution of cost income Ratio4 4.98 4.85 4.69 4.07 3.49 2.09 2.83 1.84 1.51 1.64 1.55 1.39 20095 2004 2005 2006 2007 2008 20095 2004 2005 2006 2007 2008 1 Net Interest Income / Earning Assets 3 Fee Income / Earning Assets 5 Accumulated last 12 months 2 Allowance for loan losses / Earning Assets 4 Administrative Expenses / Earning Assets

  28. ...that allows BB to assume the commitment to generate value to shareholders... 2.2 2.0 1.7 1.7 1.7 1.3 1.5 1.5 1.4 1.4 1.3 1.2 591.9 521.3 32.1 32.5 28.9 26.8 26.1 23.0 357.7 296.4 23.0 24.7 253.0 22.5 239.0 22.2 22.8 19.5 8.8 8.1 CAGR: 23.8% R$ billion 6.0 5.9 2004 2005 2006 2007 2008 2009¹ 4.2 6.7 6.5 3.0 Assets1 - R$ billion 5.1 3.7 3.4 Recurring Return over Assets 2.8 ROA 2009¹ 2004 2005 2006 2007 2008 Recurring Net Income Recurring Return on Equity - % Net Income Return on Equity - % 1 Accumulated last 12 months

  29. … which is also seen in our 2009 commitments. Domestic Loan Portfolio Individuals: 23% - 25% Companies: 16% - 19% Agribusiness: 2% - 5% Net Interest Margin 6.8% - 7.2% Domestic Loan Portfolio Total: 13% - 17% Fee Income 5% - 8% Recurring ROE 19% - 22% Total Deposits 10% - 14% Allowance for Loan Losses 3.8% - 4.2% Administrative Expenses 9% - 12% Tax Rate¹ 26% - 29% ¹ In revision

  30. 2 Stabilization of loan delinquency 5 Sustainable Businesses 6 What’s next? Schedule 1 Businesses leverage boost 3 New scenario for Fee Income 4 Continued upgrade in productivity levels

  31. Individuals Companies Relating to credit, we foresee… • BNDES disbursement leadership. • Capital Markets structure strengthening. • Operational activities specialization and centralization. Payroll Loans • Leverage the public servant customer base from payroll purchases and state banks acquisitions. Auto Loans • Increase share in the credit cooperative market. • Keep up as SME’s main partner. • Synergic join venture with Banco Votorantim aiming at auto loans market share growth.

  32. 361 30 291 18 10 5 3 2004 2005 2006 2007 2008 2009 2010 105 75 69 50 43 36 4 26 17 2 14 11 Argentina USA Brazil Chile Italy China Japan France England Portugal Germany Netherlands 5% mortgage market share by 2013. Disbursements2 - R$ billion • Business opportunities • Assets growth • Fees Income increase • Customer base expansion and fidelity • Companies financing Mortgage- % GDP Source: ABECIP 1 Estimates 2 Banking Industry - Savings

  33. Brazilian Production Growth1 Soybean + 34.7% Corn + 25.0% Meat + 51.1% Banco do Brasil’s Agribusiness market share maintenance. Opportunities Banco do Brasil’s Guidelines Keep operations under reserve requirements level • Recovery of international demand • Strong domestic market • Production raise capacity • USA subsidies decrease • Agro-energy Maintain Market Leadership Agro book mostly with controlled rates Grow Agro book but decrease its share in BB’s total credit portfolio Increase risk mitigators use Focus on short term operations Improve Agro book risk Reduce over rolled book Social-environmental Responsibility 1 Source: MAPA, Crop 2018/2019 expected growth in relation to Crop 2007/2008

  34. Active role in the Foreign Trade with efficiency gains. 2009 Estimates Foreign Exchange US$ 73 billion Financing US$ 17 billion Initiatives BB • Online Foreign Trade / Digital Signature • Documents Digitalization / Electronic File • International Trade Bureau • Vanguard in Foreign Trade Credit Card • Consult and training in international business Exporting US$ 44 billion 28% share Exporting US$ 14 billion Importing US$ 29 billion 25% share Importing US$ 3 billion

  35. 900 15.6% Share BB - 22% 2014 Share BB – 17% 867 741 R$ billion 630 Private Label 532 446 Debit 375 302 245 200 Credit 159 04 05 06 07 08 09 10 11 12 13 14 Cards’ Market Opportunities: 22% market share by 2014. Cards’ Market Billing Potential with the perspective of market share increase by BB • Initiatives BB • Multiple Functions Card. • Access to different kinds of credit • Platform integrated to banking services granting more synergy with check account. • Replacement of other payment means. • Low income customers attraction. 1 Souerce: ABECS, BCG/BB analysis.

  36. 17.4 11.2 10.5 8.9 7.5 7.0 5.3 4.9 3.2 2.8 Italy USA India Chile Brazil Spain Japan France England Germany Insurance: doubled by 2013 following market expansion. Expected market by 2013: Capitalization - R$11 billion Supplementary Pension Plan - R$68 billion Auto - R$32 billion Life - R$18 billion Health - R$12 billion Insurance ( % GDP ) - 2006 Ranking • BB Initiatives • Intensify selling through brokerages • Grow cross-selling in traditional means • Grow selling through call center and Internet • Grow partnerships

  37. Processes optimization due to improvements in technology and back-office model seeking productivity gains Back-office model restructuring and IT platform modernization Mainframe structure and processing revision Back-office platform creation all around Brazil Modernization of BB’s ATM Network, the largest of Latin America Digitalization of all documents, including the pre-existing ones Linux install in all automated teller machines New data ware center

  38. Business management generate sustainable results. Agenda 21 Social Economic Environmental Processes, Products and Services Credit and Socio-environmental analysis Eco-efficiency Program Transparency GRI Sustainability in BB’s businesses. 3,000 2,500 2,100 1,700 1,300 1,211 Regional Sustainable Development Families Involved - thousands 726 231 71 2005 2008 2007 2009 2011 2012 2013 2006 2010

  39. Customers Return Expansion Wide Distribution Network Distribution Alternative Means New Products Portfolio Customers Diverse Product Portfolio + 47,2 million 9,5 million + Organic Growth1 8.2% a.a. Ease Access ATMs New Technologies 1 Check Accounts CAGR since 2004

  40. Investor Relations Unit SBS - Quadra 1 - Bloco C - Ed. Sede III - 5th floor70073-901 - Brasília (DF) Phone: (61) 3310 3980 Fax: (61) 3310 3735 bb.com.br ri@bb.com.br For further information access bb.com.br/ri

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