Banco do Brasil Highlights Latin America’s largest bank in terms of deposits, assets, number of clients and distribution network One of the lowest funding costs among Brazilian banks Strong Balance Sheet and low funding cost allow quick expansion of loans Cost cutting leads to improving efficiency High and recurrent profitability 2 Brazil: Low Penetration in Banking Services Approximately 40 million people do not have access to banking services in Brazil Loans / GDP* (%) 180% 160% 140% 120% 100% 80% 60% 40% 20% Brazil: Loans* / GDP (%) 0% 30% 25% 23% * As of 2004 21% 14% 14% 15% 15% 1996 1997 1998 1999 13% 1995 * Including leasing transactions 18% 18% 2000 2001 2002 2003 2004 2005 3 Banco do Brasil is the Largest Bank in Brazil Assets (R$ billion) Total Deposits (R$ billion) 264.6 139.2 216.4 163.2 75.5 51.7 Banco do Bradesco Brasil Itaú 93.8 36.7 Unibanco 24.7 34.8 Banco do Bradesco Brasil Nossa Caixa Itau Unibanco Nossa Caixa Loan Portfolio (R$ billion) 105.5 84.4 72.0 39.7 6.4 Banco do Bradesco Brasil Itau Unibanco Nossa Caixa 4 Banco do Brasil is the Largest Bank in Brazil Number of Clients (million) Outlets 14,870 23.3 16.6 12.6 5,498 6.5 Banco do Bradesco Brasil Itau 4.8 Unibanco 3,199 Banco do Brasil Nossa Caixa Bradesco Itau 1,282 1,099 Unibanco Nossa Caixa Assets Under Management (R$ billion) 169.2 131.3 135.6 39.9 13.1 Banco do Brasil Bradesco Itau Unibanco Nossa Caixa 5 Largest Distribution Network North Largest number of branches in most Brazilian states 236 Branches Northeast Retail: 227 Wholesale: 2 976 Branches Retail: 957 Wholesale: 8 Government: 7 Government: 11 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 6% 25% Midwest 10% 388 Branches 38% Retail: 378 Wholesale: 5 Southeast 1494 Branches Government: 5 21% Retail:1437 Wholesale: 49 Government: 8 South 800 Branches Retail: 773 Wholesale: 22 Government: 5 6 Consistent Improvement in Operating Efficiency Efficiency Ratio (ER) ER = 92.2% Administrative Expenses 103.9% Operating Income 80.9% 2000 2001 112.1% 93.1% 71.8% 80.3% 80.6% 57.9% 55.8% 54.2% 1999 Banking Services Fees / Personnel Expenses 2002 2003 2004 67.4% 48.1% 48.1% 55.7% 55.9% 2005 1999 1Q06 Banking Services Fees (R$ million) 2000 2001 2002 2003 2004 2005 1Q06 Administrative Expenses (R$ Million) CAGR IPCA – 6.6% 7,648 11,298 6,607 11,524 12,398 5,491 2003 2004 2005 1,767 2,103 1Q05 1Q06 2003 2004 2005 2,992 3,156 1Q05 1Q06 7 Capital Structure Solid balance sheet structure with low leverage allows Banco do Brasil to benefit from credit expansion R$ 8 billion Capitalization PROEF Improvements in operating efficiency and risk assessment Strong Balance Sheet 2001 1997 Basel Ratio (%) 17.1 12.7 12.2 2001 2002 13.7 15.2 18.3 15.6 8.8 2000 2003 2004 2005 1Q05 1Q06 8 Recurring Profitability Net Profits (R$ million) 4,154 3,024 2,381 2,343 R$ 1.4 billion from non-recurring revenues: 965 2003 2004 2005 817 938 1Q05 1Q06 1) Activation of R$ 1.9 billion tax credits 2) Additional PCLD Expenses of R$ 500 million Return on Equity (%) 63.0 22.3 23.0 26.8 29.3 23.5* 24.6* 2003 2004 2005 * Recurrent profit per adjusted equity 1Q05 1Q06 9 Retail Banco do Brasil’s strategic focus and main business catalyst Country’s 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 Individuals Breakdown 21.5 million clients monthly salary 0.04% BB Private 2.38% BB Estilo > R$ 10,000 3.55% Exclusivo > R$ 4,000 Partnerships with retailers 24.81% Preferencial > R$ 1,000 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 69.13% Pessoa Física < R$ 1,000 Expansion of Real Estate loans, Payroll loans and Consumer Finance 10 Wholesale Wide range of products and strong customer service 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 11 Public Sector Banco do Brasil: Strategic relationship with the Federal, State and Municipal Governments 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 12 Brazil’s Largest Asset Manager Well-known excellence in Asset Management 20.1% market share (ANBID ranking)* Assets Under Management (R$ billion) R$ 169.2 billion assets under management 64.4 63.0 55.9 Strong participation of Institutional Investors and Individuals (68%) 35.7 28.6 28.5 14.2 7.2 8.1 Dez/03 Institutional Investors Corporate * ANBID – Associação Nacional de Bancos de Investimento 50.7 47.9 44.4 9.9 13.3 Dez/04 9.0 ' 20.9 13.6 Dez/05 Individuals Foreign Investors 19.3 8.1 6.2 Mar/06 Government 13 Corporate Governance Novo Mercado Listing: long-term commitment to policies directed at creating value for shareholders Minimum of two independent board members in a total of seven 100% of common shares Two-year term for board of directors Global Compact, Princípio de Equador and Agenda 21 14 Autonomous Departments Units Sustainable Regional Development 15 Internal Controls Legal Marketing and Communication Audit Committee Strategy and Organization Executive Secretariat Security Management Restructuring of Operational Assets VP of Human Resources and Social-Environmental Responsibility Credit Board of Director Controlling General Shareholders’ Meeting Risk Management Accounting VP of Technology and Logistic Employee Relation And Social-Env. Responsibility Human Resources Logistic VP of Finance, Capital Market and Investor Relations Software Development Technology Capital Markets and Investments Board of Officers Information Technology Finance Agribusiness VP of Rural Businesses and Government Affairs Investor Relations Directorships Government Affairs VP of Retail Service and Distribution Retail Services Distribution and Retail Channels Micro and Small Businesses VP of International Business and Wholesale Private International Commercial Foreign Trade Structure Board of Auditors Internal Audit President VP of Credit Controlling and Risk Management