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