Banco do Brasil 2010
Disclaimer This presentation may include 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 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 one. Banco do Brasil is not responsible for bringing up to date any estimate in this presentation. 2
BB maintains leadership in key segments... 20.9 Assets 19.8 Loan Portfolio 79.1 80.2 Deposits 25.7 Asset Management 21.9 74.3 78.1 BI* - % BB - % *Banking Industry 3
...presenting record results. Net Income and ROE Net Income 30.7 27.0 25.8 24.6 R$ billion ROE -% RecurringROE-% Recurring Net Income 10.1 11.7 10.7 8.5 25.4% 2009 2010 4
Loan Operations boosts Financial Income. Loan Income Other Interest Income 65.3 81.2 27.0 R$ billion 23.7 30.1% 41.7 54.2 2009 2010 5
Lower spreads offset by a better risk profile. NIM by Product 18.6 16.4 15.5 18.7 15.9 Loan Operations 10.1 7.4 9.2 8.7 6.2 5.6 9.8 9.0 7.2 6.0 Individuals Businesses 5.3 5.5 5.6 5.3 5.6 Agribusiness 4Q09 3Q10 4Q10 2009 2010 NIM 10.9 10.7 9.9 9.8 8.6 6.7 6.5 6.3 6.7 6.3 Cumulative Selic NIM 4.5 4.8 4.9 4.3 4.6 Risk adjusted NIM 4Q09 3Q10 4Q10 2009 2010 6
BB presents a solid deposits base... R$ billion Other Demand Deposits Savings Time Deposits 337.6 348.3 11.8 11.6 56.5 59.0 75.7 85.7 376.9 63.5 89.3 19.4 LTM 17.9% 193.5 192.0 204.7 Dec/09 Sep/10 Dec/10 7
... with a steady growth of foreign borrowings... US$ billion Repos Individuals Corporates Bond Issues 21.7 2.6 2.0 6.3 4.6 24.2 1.7 2.0 6.2 6.9 25.3 1.8 2.1 5.1 7.6 LTM 65.2% Interbanking 6.2 7.4 8.8 Dec/09 Sep/10 Dec/10 Interbank funding lenders: #78 (2009) and #91 (2010). 8
... maintaining its leadership in Asset Management. Market Share¹ -% 21.7 22.1 21.9 R$ billion 316.2 362.5 372.3 Dec/09 Sep/10 Dec/10 (1) Including 50% of assets managed by Banco Votorantim. 9
BB keeps credit market leadership in a fiercer environment... Loan Portfolio Market Share -% 16.0 17.1 20.1 19.8 R$ billion Offshore Agribusiness - Corporates 300.8 358.4 20.4 26.1 Agribusiness - Producers Individuals Corporates 160.7 11.4 11.7 40.2 224.8 15.1 18.5 45.2 48.8 17.3 19.2 47.3 91.8 48.9 113.1 31.6% 32.0 65.5 19.9% 40.7% 97.2 125.3 149.8 41.8% Dec/07 Dec/08 Dec/09 Dec/10 10
... focusing in lower risk portfolios. Loan Portfolio - Individuals Overdraft Account Other Credit Cards Mortgage Consumer Finance Backed by Direct Deposits 91.8 2.4 12.0 9.4 9.2 20.7 36.5 1.5 74.0% 107.4 3.0 11.5 10.4 2.5 12.5 113.1 2.6 10.4 11.9 12.9 27.4 25.3 76.7% 42.2 45.0 3.0 78.0% R$ billion Vehicle Finance Payroll Loan Dec/09 Sep/10 Dec/10 11
Mortgage loans show strong performance. 1,735 669 675 799 682 920 996 838 1,113 1,057 1,000 1,042 329.6 91.9 86.9 114.3 121.9 147.2 151.8 150.5 178.5 165.4 203.3 178.8 Jan/10 Feb/10 Mar/10 Apr/10 May/10 Jun/10 Jul/10 Aug/10 Sep/10 Oct/10 Nov/10 Dec/10 Disbursements- R$ million Contracts 12
BB expands corporate financing leadership. Loan Portfolio Market Share - % 21.1 21.4 22.0 R$ billion Small and Micro Companies Medium and Large Companies 125.3 44.9 80.4 140.5 149.8 48.5 50.9 92.0 98.9 19.5% LTM 13.3% 23.0% Dec/09 Sep/10 Dec/10 13
FGO represents 14% of SMEs loan portfolio. Loan Portfolio Thousand Operations 102.3 180.7 243.0 290.1 353.6 7.0 5.1 5.6 3.5 2.4 Dec/09 Mar/10 Jun/10 Sep/10 Dec/10 FGO Operations Balance - R$ billions 14
BB focus on investment operations supporting economic growth. Corporate Loan Portfolio R$ billion Other 125.3 12.6 25.2 3.9 20.1% 140.5 13.1 30.7 3.5 149.8 14.1 33.0 3.5 22.1% 31.3% Foreign Trade Investment Working Capital 83.6 93.2 99.1 Dec/09 Sep/10 Dec/10 15
BB disburses R$23.4 billion for investment operations in 2010... YTD Disbursement¹ R$ billion Monthly Average R$ 1.9 billion 16.2 18.0 19.6 22.1 23.4 13.1 10.7 1.4 2.8 4.5 6.1 8.0 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 (1) Including BNDES Exim 16
...highlighting BNDES... YTD Disbursement R$ billion Disbursement market leader with 19.4%. Monthly Average R$ 1.5 billion 12.7 14.0 15.0 16.5 18.2 10.6 8.5 1.6 2.9 4.0 5.2 6.5 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 17
...especially in credit card operations. YTD Disbursement R$ billion Market leader in disbursement, number of operations and issued cards. Monthly average R$ 250 million 2.5 2.8 3.0 2.2 1.9 1.5 1.3 1.0 0.1 0.3 0.5 0.8 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 18
FCO records a historical performance. YTD Disbursement R$ billion The largest contracted amount in a year ever. Monthly Average R$ 269 million 2.3 2.5 2.8 3.1 3.2 1.1 1.4 1.6 1.7 0.8 0.1 0.5 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 19
Agribussines financing reaches R$ 75 billion. CRÉDITO R$ billion 59.2 61.9 60.6 Market Share -% 66.4 19.2 74.0 75.0 26.0 26.1 12.9% LTM Agribusiness - Corporate Agribusiness - Producers 47.3 48.0 48.9 Dec/09 Sep/10 Dec/10 36.2% 3.5% 20
2010/11 Crop: BB finances 17% of the most important grains production. Agribusiness Corn Beans Rice Soybean Wheat 21
Credit risk level improves... 2009 8.4 2010 6.3 91.6 93.7 AA C - % D H - % 22
... delinquency ratios drop steadily... NPL + 90 days Total Loan Portfolio - % 4.3 4.0 3.6 3.4 3.2 3.3 3.1 2.7 2.7 2.3 Dec/09 Mar/10 Jun/10 Sep/10 Dec/10 BB Banking Industry 23
... in both segments. NPL + 90 days Individuals - % 7.8 7.0 6.6 6.0 5.7 4.8 4.4 4.1 3.8 3.3 3.8 3.6 3.6 3.5 3.6 Corporates - % 2.9 2.6 2.4 2.2 Dec/09 Mar/10 Jun/10 Sep/10 Dec/10 1.8 BB Banking Industry 24
Provision levels reflects prudence. Credit Risk Coverage Ratio¹ - % 161.9 156.1 181.6 190.5 171.2 174.7 BB Banking Industry Dec/09 Sep/10 Dec/10 (1) Required allowance for loan losses / NPL+ 90 days 25
BB expands market share in cards segment, with revenues growth. Cards Turnover 20.3 20.7 R$ billion Market Share - % 111.2 88.7 25.4% 2009 2010 26
Capital markets revenues increase 33.1%. Capital Markets Revenues 98 R$ million Number of Deals 66 328.0 436.5 33.1% 2009 2010 27
Consistent operational performance provides evolution in cost to income ratio. Cost to Income Ratio - % 44.4 45.0 39.0 43.4 42.6 4Q09 3Q10 4Q10 2009 2010 28
BIS Ratio allows business expansion. BIS Ratio - % CAPITALIZAÇÃO 13.8 14.2 14.1 3.2 4.0 3.1 Tier II Tier I 10.6 10.2 11.0 Dec/09 Sep/10 Dec/10 R$ 110.7 billion credit leverage potential 29
After public offering BBAS3 outperformed the market twice as much. BBAS3 Performance 30.8% - BBAS3 30.7% - BBDC4 26.6% - SAMB11 23.5% - ITUB4 13.7% - IBOV 10/06/30 10/12/30 Banco do Brasil Itaú Ibovespa Bradesco Santander 30
2010 performance in line with estimates. Guidance 2010 Items Recurring ROE Net Interest Margin Total Deposits Domestic Loan Portfolio Individuals Corporates Agribusiness Estimate - % 21.0 24.0 6.5 7.0 12.0 16.0 18.0 23.0 27.0 32.0 16.0 21.0 4.0 9.0 Performance - % 24.6 6.3 11.6 19.2 23.2 19.5 12.9 Allowance for loan losses Fee Income Administrative Expenses 4.0 4.4 7.0 10.0 10.0 12.0 3.3 12.6 10.3 Tax Rate 31.0 34.0 33.0 31
Management and operational efficiency drivers in 2011: 1 Banking service modernization 2 Investment loans prioritization 3 Cards segment growth 4 Insurance business segment expansion 5 Internationalization 32
More convenience and modern branches. Leblon - RJ João Naves - MG Gramado - RS Augusta - SP Parque dos Poderes - MS 33
New business platform allows service agility. 34
Full time with you, effectively. MELHORIA NO ATENDIMENTO E EFICIÊNCIA OPERACIONAL 35
BB confirms its commitment to the Brazilian economy development... Itapoá Port - SC Bons Ventos Power Plant - CE NORBE VI Oil Platform Soybean harvest - MT Subway - SP 36
... and expands its bancarization strategy. 37
JVs boost Insurance segment. Life Aliança do Brasil Market Share 3rd 5th 1st 19.3% P&C Aliança do Brasil 7th 2nd 2nd 12.5% Vehicles BrasilVeículos 6th 5th 2nd 15.6% Annuity Plans BrasilCap 1st 7th 1st 30.0% Pension Plans BrasilPrev 2nd 2nd 2nd 19.9% Source: Susep Nov/2010 38
BB expands its borders to serve companies... 39
... and Brazilian citizens. BB Nova Iorque Branch 40
BB is committed to maintain historical levels of profitability. Guidance 2011 Items Recurring ROE Net Interest Income¹ Total Deposits Domestic Loan Portfolio Individuals Corporates Agribusiness Estimate - % 21.0 24.0 16.0 20.0 14.0 18.0 17.0 20.0 19.0 23.0 17.0 20.0 5.0 8.0 Allowance for Loan Losses 3.3 3.7 Fee Income 12.0 17.0 Administrative Expenses 10.0 13.0 Tax Rate 31.0 34.0 (1) Net Interest Margin ratio was replaced by Net Interest Income. 41
Investor Relations Unit SBS - Quadra 1 - Bloco C - Ed. Sede III 5th floor 70073-901 - Brasília (DF) Phone: (61) 3310 3980 Fax: (61) 3310 3735 bb.com.br ri@bb.com.br