Banco do Brasil
Mar 26, 2015
Banco do BrasilBanco do Brasil
2
Strong Balance Sheet and low funding cost allow quick expansion of loans
High and recurrent profitability
Cost cutting leads to improving efficiency
HighlightsHighlightsHighlightsHighlights
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
3
0%
20%
40%
60%
80%
100%
120%
140%
160%
180%
Taiwan
China
Korea
Mala
ysia
Spain
Egypt
South
Afri
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eIn
dia
Turke
y
Mex
ico
Russia
Brazil
Brazil: Low Penetration in Banking ServicesBrazil: Low Penetration in Banking ServicesBrazil: Low Penetration in Banking ServicesBrazil: Low Penetration in Banking Services
Approximately 40 million people do not have access to banking services in Brazil
Brazil: Loans* / GDP (%)
* Including leasing transactions
Loans / GDP* (%)
* As of 2004
13%14% 14% 15% 15%
18% 18%
21%
23%
25%
30%
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
4
Banco do Brasil is the Largest Bank in BrazilBanco do Brasil is the Largest Bank in BrazilBanco do Brasil is the Largest Bank in BrazilBanco do Brasil is the Largest Bank in Brazil
Total Deposits (R$ billion) Assets (R$ billion)
Loan Portfolio (R$ billion)
139.2
75.551.7
36.724.7
Banco doBrasil
Bradesco Itaú Unibanco NossaCaixa
264.6216.4
163.2
93.8
34.8
Banco doBrasil
Bradesco Itau Unibanco NossaCaixa
105.5
84.472.0
39.7
6.4
Banco doBrasil
Bradesco Itau Unibanco NossaCaixa
5
14,870
5,4983,199
1,282 1,099
Banco doBrasil
Bradesco Itau Unibanco Nossa Caixa
Banco do Brasil is the Largest Bank in BrazilBanco do Brasil is the Largest Bank in BrazilBanco do Brasil is the Largest Bank in BrazilBanco do Brasil is the Largest Bank in Brazil
Number of Clients (million)
Assets Under Management (R$ billion)
Outlets
23.3
16.612.6
6.5 4.8
Banco doBrasil
Bradesco Itau Unibanco NossaCaixa
169.2
131.3 135.6
39.913.1
Banco doBrasil
Bradesco Itau Unibanco NossaCaixa
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Largest number of branches in most Brazilian states
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
Largest Distribution NetworkLargest Distribution NetworkLargest Distribution NetworkLargest Distribution Network
Midwest
388 Branches
Retail: 378
Wholesale: 5
Government: 5
South800 Branches
Retail: 773
Wholesale: 22
Government: 5
Southeast
1494 Branches
Retail:1437
Wholesale: 49
Government: 8
North
236 Branches
Retail: 227
Wholesale: 2
Government: 7
Northeast
976 Branches
Retail: 957
Wholesale: 8
Government: 11
6%
10%
25%
38%
21%
7
92.2%
80.9%
57.9% 55.8% 54.2%48.1% 48.1%
71.8%
1999 2000 2001 2002 2003 2004 2005 1Q06
55.7% 55.9%
80.3% 80.6%
93.1%103.9%
112.1%
67.4%
1999 2000 2001 2002 2003 2004 2005 1Q06
5,4916,607
1,767 2,103
7,648
2003 2004 2005 1Q05 1Q06
11,298 11,524
2,992 3,156
12,398
2003 2004 2005 1Q05 1Q06
Efficiency Ratio (ER)
Administrative Expenses (R$ Million)
CAGR: 4.8%
5.5%
ER =Administrative Expenses
Operating Income
Banking Services Fees / Personnel Expenses
Banking Services Fees (R$ million)
CAGR: 18.0%
19.0%
Consistent Improvement in Operating EfficiencyConsistent Improvement in Operating EfficiencyConsistent Improvement in Operating EfficiencyConsistent Improvement in Operating Efficiency
CAGR IPCA – 6.6%
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Basel Ratio (%)
Improvements in operating efficiency and risk assessment
R$ 8 billion Capitalization PROEF
1997 2001
Strong Balance Sheet
Capital StructureCapital StructureCapital StructureCapital Structure
Solid balance sheet structure with low leverage allows Banco do Brasil to benefit from credit expansion
8.8
12.7 12.213.7
15.217.1
15.6
18.3
2000 2001 2002 2003 2004 2005 1Q05 1Q06
9
3,024
965
2,3432,381
4,154
2003 2004 2005 1Q05 1Q06
22.3 23.0 26.8 29.3
63.0
2003 2004 2005 1Q05 1Q06
Net Profits (R$ million)
Return on Equity (%)
CAGR: 32.1%
R$ 1.4 billion from non-recurring revenues:
1) Activation of R$ 1.9 billion tax credits 2) Additional PCLD Expenses of R$ 500 million
Recurring ProfitabilityRecurring ProfitabilityRecurring ProfitabilityRecurring Profitability
23.5*
* Recurrent profit per adjusted equity
817
24.6*
938
10
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
Expansion of Real Estate loans, Payroll loans and Consumer Finance
Partnerships with retailers
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
BB Private
BB Estilo
Exclusivo
Preferencial
Pessoa Física
0.04%
21.5 million clients
2.38%
3.55%
24.81%
69.13%
Individuals Breakdown
Banco do Brasil’s strategic focus and main business catalyst
RetailRetailRetailRetail
monthly salary
> R$ 10,000
> R$ 4,000
> R$ 1,000
< R$ 1,000
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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
Wide range of products and strong customer service
WholesaleWholesaleWholesaleWholesale
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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
Banco do Brasil: Strategic relationship with the Federal, State and Municipal Governments
Public SectorPublic SectorPublic SectorPublic Sector
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20.1% market share (ANBID ranking)*
R$ 169.2 billion assets under management
Strong participation of Institutional Investors and Individuals (68%)
Well-known excellence in Asset Management
Assets Under Management (R$ billion)
Brazil’s Largest Asset ManagerBrazil’s Largest Asset ManagerBrazil’s Largest Asset ManagerBrazil’s Largest Asset Manager
* ANBID – Associação Nacional de Bancos de Investimento
44.4
55.963.0 64.4
7.2 9.914.2 13.3 13.6
6.2
47.9
35.728.6
50.7
20.928.5
19.3
8.1 8.19.0
Dez/03 Dez/04 Dez/05 Mar/06
Institutional Investors Individuals Government
Corporate Foreign Investors
'
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Novo Mercado Listing: long-term commitment to policies directed at creating value for shareholders
100% of common shares
Two-year term for board of directors
Global Compact, Princípio de Equador and Agenda 21
Corporate GovernanceCorporate GovernanceCorporate GovernanceCorporate Governance
Minimum of two independent board members in a total of seven
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Board of Officers
Units
Directorships
Autonomous Departments
Internal Audit
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VP of Retail Service and Distribution
VP of Rural Businesses
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VP ofTechnology and Logistic
VP of Credit Controlling
and Risk Management
VP of Finance, Capital Marketand Investor
Relations
Board of Director
General Shareholders’ Meeting
President
Board of Auditors
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