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Evangeline Bishop
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2 This presentation may include references and statements, planned synergies, estimates, projections of results, and future strategy for Banco do Brasil, its Associated and Affiliated Companies, and Subsidiaries. Although these references and statements reflect the management s belief, they also involve estimates and unforeseen risks. Consequently, results may differ from those anticipated and discussed here. These expectations are highly dependent on market conditions, on Brazil s economic and banking system performances, as well as on international market conditions. Banco do Brasil is not responsible for updating any estimate in this presentation. 2

3 4 Earnings Highlights 11 Agribusiness 5 Market Ratios 12 Net Interest Margin 6 Net Income and Profitability 13 Spread by Portfolio 7 Earnings Breakdown 14 BIS Ratio 8 Loan Portfolio 15 CET1 Impacts 9 Loans to Individuals 16 Guidance Loans to Companies 17 _Appendix

4 9M18 9M18 9M18 9M18 Earnings Highlights Adjusted Net Income Growth (R$) 3.4 BI +25.6% (on ) +5.0% (on 2Q18) 9.7 BI +22.8% (on 9M17) 6.9 BI ALLL¹ 3.2 BI +4.7% (on ) +1.1% (on 2Q18) Fee Income Growth Continuous Credit Quality Improvement -37.5% (on ) -10.0% (on 2Q18) 20.2 BI +5.3% (on 9M17) Administrative Expenses Solid Control +0.0% (on ) 7.9 BI 23.7 BI +0.8% (on 9M17) NPL % -1.9% (on 2Q18) -111 bps (on ) -51 bps (on 2Q18) ALLL¹ 11.1 BI -31.7% (on 9M17) BB Pillars Profitability Credit and Capital Management Efficiency Digital Transformation Customer Experience Services Quality People 1) Allowance for Loan and Lease Losses Expenses Net of Recovery of Write-offs. 4

5 Market Ratios Earnings per Share Dividend Yield² (%) Q17 1Q18 2Q E¹ 2019E¹ 4Q17 1Q18 2Q E¹ 2019E¹ Earnings per Share - R$ Adjusted Earnings per Share - R$ Price/Earnings 12 months Price/Book Value Q17 1Q18 2Q E¹ 2019E¹ 4Q17 1Q18 2Q E¹ 2019E¹ Source: Economatica. Source: Economatica. (1) Bloomberg estimative on November, 07, 2018 based on analysts projections average. Banco do Brasil is not responsible for this information. (2) Dividends and Interest on Capital 12 months / Market Capitalization. Source: Economatica. 5

6 Net Income and Profitability R$ billion (3.23) 6.87 (7.92) (4.91) 3.40 NII¹ ALLL Fee Income Administrative Other Adjusted Expenses Net Income (11.05) (23.74) 9M18 (12.89) 9.67 NII¹ ALLL Fee Income Administrative Other Adjusted Expenses Net Income Profitability Ratios² 2Q18 9M17 9M18 Net Income (R$ billion) Adjusted Net Income (R$ billion) Shareholders ROE % Market ROE % (1) NII net of recovery of write-offs. (2) Shareholders ROE: it does not include the core capital eligible instrument; Market ROE: it reflects the metric that the main market analysts use to project results, including the core capital eligible instrument. 6

7 Earnings Breakdown Fee Income R$ billion -6.9% % % Checking Account +6.1% (9M18/9M17) Asset Management +12.0% (9M18/9M17) Q18 9M17 9M % -0.1% Q Loan Operations Treasury¹ ² M M18 Net Interest Income¹ Funding Expenses Financial Expense for Institutional Funding¹ ³ Administrative Expenses 0.0% Q18 Personnel Expenses M17 Other Administrative Expenses -37.5% 7.9 ALLL Expenses % M Q18 9M17 9M18 ALLL Expenses - Credit Risk Recovery of Write-offs -31.7% Cost to Income Ratio of 38.7%⁴ Asset Quality Improvement in the Companies Portfolio (1) It does not include foreign exchange effect. (2) It includes the result from interest, tax hedging, derivatives, and other financial instruments that offset the effects of the exchange rate variation in the result. (3) It includes senior bonds, subordinated debt, and Hybrid Instruments in Brazil and abroad. (4) Administrative Expenses / Operating Revenues. Data refers to the income statement with reallocations. 7

8 Loan Portfolio Expanded View R$ billion +1.4% +0.1% % 6.4% 6.2% 26.7% 27.5% 27.4% 27.7% 27.7% 28.0% Sep/17 NPL Ratio +90 days (%) Dec/ Mar/ Jun/18 Sep/ NPL Formation Q17 1Q18 2Q18 New NPL / Loan Portfolio (%)¹ BB BB ex-specific case Banking Industry Quarterly ALLL/New NPL (%) New NPL (R$ billion) ² 39.5% Sep/ % Jun/ % Sep/18 Foreign branches ans subsidiaries abroad Agribusiness Individuals Companies Sep/17 Dec/17 Coverage ratio (%) BB ex-specific case Coverage Ratio Mar/ Jun/18 Sep/18 Provision balance (R$ Bi) Q17 1Q18 2Q18 ALLL / Loan Portfolio³ Cost of Risk ALLL Expenses ⁴ (1) It considers the Classified Loan Portfolio of the previous quarter. (2) Quarterly change in the balance of transactions over 90 days past due + current quarter write-offs. (3) ALLL expenses accumulated in 12 months / 12 months Average Loan Portfolio. (4) Allowance for Loan and Lease Losses Expenses gross of Recovery of Write-offs. 8

9 Loans to Individuals¹ +5.7% +2.0% NPL Ratio +90 days (%) Sep/17 Dec/17 Mar/18 Jun/ Sep/18 R$ billion NPL Formation Q17 1Q18 2Q18 New NPL / Loan Portfolio (%) ² New NPL (R$ billion) ³ Quarterly ALLL/New NPL (%) Coverage Ratio ALLL Expenses⁴ Sep/17 Jun/18 Sep/ Payroll Loan Salary Loan and Consumer Finance Mortgage Auto Loan Credit Card Other 4Q17 1Q18 2Q18 4Q17 1Q18 2Q18 Coverage Ratio (%) Balance of Provision (R$ Bi) (1) It considers the organic Loan Portfolio. (2) It considers the Classified Loan Portfolio of the previous quarter. (3) Quarterly change in the balance of transactions over 90 days past due + current quarter write-off. (4) Allowance for Loan and Lease Losses Expenses gross of Recovery of Write-offs. 9

10 Loans to Companies Expanded View¹ -1.4% +0.2% Chg. (%) on Jun/ Sep/ NPL Ratio +90 days (%) NPL Formation Dec/17 Companies Mar/ Jun/18 Coverage Ratio (%) Sep/18 Companies ex-specific case Q17 New NPL / Loan Portfolio (%) ³ Quarterly ALLL/New NPL (%) 2.8 1Q18 ALLL Expenses⁵ 1.2 2Q18 R$ billion New NPL (R$ billion) ⁴ Sep/17 Jun/18 Sep/18 Very Small and Small Companies² Middle Market, Corporates and Government Q Coverage Ratio (%) Companies ex-specific case 1Q18 2Q18 Balance of Provision (R$ Bi) (1) It includes private securities and guarantees provided. (2) Companies with annual revenues up to R$25 million. (3) It considers the Classified Loan Portfolio of the previous quarter. (4) Quarterly change in the balance of transactions over 90 days past due + current quarter write-off. (5) Allowance for Loan and Lease Losses Expenses gross of Recovery of Write-offs. (6) On occured the impact from the regularization of a specific case. Disregarding this effect, the ALLL expenses over the New NPL would be % and the New NPL over the loan portfolio would be 0.87% Q Q Q

11 Agribusiness¹ R$ billion % -0.2% Chg. (%) on Jun/ NPL Ratio +90 days (%) NPL Formation Sep/17 Dec/17 Mar/18 Jun/18 Sep/18 4Q17 1Q18 2Q Coverage Ratio New NPL / Loan Portfolio (%) ² Quarterly ALLL/New NPL (%) New NPL (R$ billion) ³ ALLL Expenses⁴ Sep/17 Jun/18 Sep/ Agroindustrial Rural 4Q17 1Q18 2Q18 4Q17 1Q18 2Q18 Coverage Ratio (%) Balance of Provision (R$ Bi) (1) It includes Rural Product Bills and guarantees provided. (2) It considers the Classified Loan Portfolio of the previous quarter. (3) Quarterly change in the balance of transactions over 90 days past due + current quarter write-off. (4) Allowance for Loan and Lease Losses Expenses gross of Recovery of Write-offs. 11

12 Net Interest Margin¹ % Q17 1Q18 2Q18 Net Interest Margin (NIM) Risk Adjusted NIM NIM with Recovered Credits (1) Net interest income / average balance of earnings assets, annualized. It does not include recovery of write-offs 12

13 Spread by Portfolio % Q17 1Q18 2Q18 Individuals Loan Operations Companies¹ Agribusiness (1) Government loans not included. 13

14 BIS Ratio % Sep/17 Dec/17 Mar/18 Jun/18 Sep/18 Tier II Tier I Common Equity Tier I 1 Minimum CET1 of 11% in January/2022 (1) It considers the effects of the CMN Resolution 4,680/

15 CET1 Impacts % Common Equity Tier I - Jun/18 Resolution CMN 4,680 Common Equity Tier I (pro-forma) - Jun/18 Net Income Mark to market CET1 ex- Patagonia effect Patagonia Common Equity Tier I - Sep/18 15

16 Guidance 2018 Guidance M18 Performance Adjusted Net Income - R$ billion 11.5 to NII (Net of Recovery of Write-offs) - % ¹ -6.5 to Organic Domestic Loan Portfolio - Expanded View - % 1 to Individuals - % 4 to Companies - % -3 to Rural Loans - % 4 to ALLL Expenses net of Recovery of Write-offs - R$ billion -16 to Fee Income - % 4 to Administrative Expenses - % 1 to Revised (1) Estimatives revised. Previous range between -5% and 0%. 16

17 Income Statement with Reallocations One-Off Items Net Interest Income Earnings Assets Breakdown Fee Income Administrative Expenses and Cost to Income ratio Commercial Funding Loan Portfolio by Risk Level Renegotiated Overdue Loan Portfolio Portfolio Delinquency by Lines Vintages

18 Income Statement with Reallocations Main Lines R$ million 2Q18 Chg. (%) on Chg. (%) on 9M17 9M18 2Q18 9M17 Net Interest Income 13,153 12,595 12,578 (4.4) (0.1) 39,886 37,135 (6.9) Allowance for Loan Losses (5,163) (3,583) (3,226) (37.5) (10.0) (16,184) (11,053) (31.7) ALLL Expenses - Credit Risk (6,257) (5,134) (4,858) (22.4) (5.4) (19,628) (15,441) (21.3) Credit Recovery 1,094 1,551 1, ,444 4, Net Financial Margin 7,990 9,012 9, ,702 26, Fee income 6,562 6,798 6, ,207 20, Contribution Margin 13,294 14,652 15, ,158 42, Administrative Expenses (7,915) (8,070) (7,915) (0.0) (1.9) (23,553) (23,744) 0.8 Commercial Income 5,251 6,431 7, ,231 18, Other Operating Income (135) (11) Income Before Taxes 4,330 5,924 6, ,274 16, Income and Social Contribution Taxes (799) (1,870) (1,832) (2.0) (3,128) (4,706) 50.5 Statutory Profit Sharing (362) (406) (432) (1,024) (1,227) 19.8 Adjusted Net Income 2,708 3,240 3, ,872 9, One-Off Items 133 (105) (227) (609) - Net Income 2,841 3,135 3, ,903 9,

19 One-Off Items R$ million Chg. (%) on Chg. (%) on 2Q18 9M17 9M18 2Q18 9M17 Adjusted Net Income 2,708 3,240 3, ,872 9, One-Off Item s 133 (105) (227) (609) - Economic Plans (280) (503) (444) 58.6 (11.8) (571) (1,486) Extraordinary Provision for Law suits (32.6) (88.7) IPO - IRB Neonergia BB Seguridade - Premium and Brokerage Adjustments Real Estate exchange w ith the Federal Government Tax Eff. and Stat. Prof. on One-Off Items Net Incom e 2,841 3,135 3, ,903 9,

20 Net Interest Income R$ million 2Q18 Chg. (%) on Chg. (%) on 9M17 9M18 2Q18 9M17 Net Interest Incom e 13,153 12,595 12,578 (4.4) (0.1) 39,886 37,135 (6.9) Loan Operations 21,412 18,482 18,390 (14.1) (0.5) 66,809 55,231 (17.3) Funding Expenses (7,814) (5,967) (6,190) (20.8) 3.7 (25,972) (18,156) (30.1) Financial Expense for Institutional Funding¹ (3,197) (2,762) (2,734) (14.5) (1.0) (9,603) (8,311) (13.5) Treasury² 2,753 2,842 3, ,652 8,371 (3.2) (1) It includes senior bonds, subordinated debt, and Hybrid Instruments in Brazil and abroad. (2) It includes the result from interest, tax hedging, derivatives, and other financial instruments that offset the effects of the exchange rate variation in the result. 20

21 Earnings Assets Breakdown 2Q % 49.1% 32.8% 34.1% Retail Operations¹ Wholesale Operations² 46.9% 48.5% 33.1% Retail Operations¹ 33.7% Wholesale Operations² 33.1% Agribusiness 33.2% Agribusiness 5.1% 4.6% Other Secur. + Interbank Invest. w/o Hedge Loans and Leasing Operations (1) It includes loans with individuals, very small and small companies. (2) It includes loans with Government and remaining companies. 21

22 Fee Income R$ million Chg. (%) on Chg. (%) on 2Q18 9M17 9M18 2Q18 9M17 Fee Income 6,562 6,798 6, ,207 20, Checking Account Fees 1,790 1,819 1, ,116 5, Asset Management Fees 1,419 1,559 1, (0.2) 4,051 4, Insurance, Pension and Premium Bonds (11.6) 2.4 2,237 2,183 (2.5) Credit / Debit Cards ,460 1,435 (1.8) Brazil¹ ,127 1, Loan Fees² (10.5) 1,336 1, Collections (11.4) (4.8) 1, (11.9) Billings (3.3) Consortium National Treasury and Manag. of Official Funds (3.9) Capital Market (6.8) (1.4) Interbank (4.3) (5.9) (8.0) Other (2.9) 1,377 1, (1) Fee Income earned in the country. (2) Historical series revised in the. 22

23 Administrative Expenses and Cost to Income ratio¹ % Set/17 Sep/17 Jun/18 Sep/18 Set/18 On Sep/17 Abs. Chg. Chg. % Employees 99,305 97,675 97,232 (2,073) (2.1) Traditional Branches 4,365 4,148 4,143 (222) (5.1) Digital and Specialized Service Estilo Offices Exclusivo Offices Small and Very Small Companies Offices (35) (89.7) Empresa Branches Estilo Branches Government Branches (1) (3.2) Private Banking Q17 1Q18 2Q18 Total 4,871 4,759 4,765 (106) (2.2) R$ billion Administrative Expenses Cost to Income Ratio (12 months) % (1) Administrative Expenses / Operating Revenues 12 months accumulated. Data from the Income Statement with Reallocations. 23

24 Commercial Funding % % R$ billion Sep/17 Dec/17 Mar/18 Jun/18 Sep/18 Time Deposits¹ Savings Deposits Agribusiness Let. Credit + Mortgage Bonds² Demand Deposits Rep. Agreement with Private Securities³ Interbank Deposits Adjusted Net Loan Portfolio⁴ / Commercial Funding (1) It includes Other Deposits. (2) It includes the balance of CRI (Certificates of Real Estate Receivables). (3) It includes part of the balances of the Private Securities shown on Notes to the Consolidated Financial Statements. (4) It does not include the domestic onlending loans. 24

Loan Portfolio by Risk Level¹ R$ million Sep/17 Jun/18 Sep/18 Balance Provision Provision Provision Share % Balance Share % Balance Minimum Supplementary Required Minimum Supplementary Required

25 Loan Portfolio by Risk Level¹ R$ million Sep/17 Jun/18 Sep/18 Balance Provision Provision Provision Share % Balance Share % Balance Minimum Supplementary Required Minimum Supplementary Required Minimum Supplementary Required Share % AA 311, , , A 65, , , B 131,710 1, , ,226 1, , ,183 1, , C 63,876 1,916 1,106 3, ,899 1,617 1,045 2, ,885 1,617 1,041 2, D 11,562 1, , ,882 1, , ,860 1, , E 14,021 4, , ,690 3, , ,793 2, , F 5,088 2, , ,763 2, , ,750 2, , G 4,935 3, , ,967 4, , ,127 2, , H 20,752 20,752-20, ,273 18,273-18, ,419 19,419-19, Total 629,372 35,675 2,130 37, ,491 33,111 2,067 35, ,379 32,185 2,245 34, AA-C 573,014 3,563 1,633 5, ,917 3,285 1,572 4, ,431 3,278 1,547 4, D-H 56,358 32, , ,574 29, , ,948 28, , (1) BB Classified Loan Portfolio. 25

26 Renegotiated Overdue Loan Portfolio Credits Renegotiated When Past Due - Changes 2Q18 Initial Balance 27,042 23,630 22,914 Contracts 1,870 2,254 2,403 Amortization Net of Interest¹ (773) (1,304) (996) Write-Off (2,273) (1,665) (1,410) Past due Renegotiated Loan Portfolio (A) 25,867 22,914 22,911 ALLL Balance (B) 12,415 10,867 12,072 NPL + 90 days (C) 6,360 4,490 4,476 Indicators - % ALLL / Loan Portfolio (B/A) NPL + 90 days / Loan Portfolio (C/A) ALLL Balance/NPL + 90 days (B/C) Credits Renegotiated/Classified Loan Portfolio R$ million Credits Renegotiated Contracts % 0 to 14 days Past due to 90 days Past due Over 90 days Past due Written-Off Recovery Total 2, NPL Formation Q17 1Q18 2Q18 New NPL (R$ billion)² New NPL / Loan Portfolio (%)³ (1) Principal and interest payments net of interest accrued in the period. (2) Quarterly change in the balance of over 90 days past due transactions + current quarter write-off. (3) It considers the Classified Loan Portfolio of the previous quarter. 26

27 Portfolio Delinquency by Lines Sep/17 Jun/18 Sep/18 NPL Share % NPL Share % NPL Share % % Individuals Payroll Loan Mortgage Credit Card Salary Loan Auto Loans Companies Working Capital Investments FEC/ACE Receivables Agribusiness Pronaf Working Capital for Input Purchase Pronamp BNDES/Finame Rural

28 Delinquency 90 days Delinquency 90 days Vintages 5.00% Annual Vintage Individuals Loan Portfolio 20% Annual Vintage Very Small and Small Companies Loan Portfolio 4.00% 15% 3.00% 10% 2.00% 1.00% 5% 0.00% 0% Months Months Vintages: 2010A 2011A 2012A 2013A 2014A 2015A 2016A 2017A 2018A Vintages: 2010A 2011A 2012A 2013A 2014A 2015A 2016A 2017A 2018A 28

29 Av. Paulista, th floor Bela Vista São Paulo SP Brasil CEP (11)

This presentation may include references and statements, planned synergies, estimates, projections of results, and future strategy for Banco do

This presentation may include references and statements, planned synergies, estimates, projections of results, and future strategy for Banco do Brasil, its Associated and Affiliated Companies, and Subsidiaries.