Institutional Presentation 1Q16
Institutional Presentation
1Q16
Disclaimer
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.
Agenda
Company Profile 1
Banking Industry
2
Earnings Highlights 3
Macroeconomic Information 4
Company Profile
1
5
Founded in 1808
55.3%1 controlled by the Federal Government
Largest Bank in Latin America in total assets
Acess to a broad spectrum of clients
5
1st company listed on the stock exchange in Brazil
(1) As of Mar/2016.
6
Large, diversified and stable funding base
Business diversification including:
Banking Services
Asset Management
Means of Payment
International Franchise
6
Insurance
Capital Market
7
1. Market Leadership
2. Solid Financial Performance
3. Focus on Services
4. Lower deliquency of the Brazilian
Banking Industry
5. Stable and Diversified Funding
200(+) years of solid performance
Investment Highlights
8
Timeline / Governance
BB Shares enter the ISE portfolio
2005
Follow on (primary shares)
2010
Conversion of preferred shares to commom shares
2001 Private offering of subscription bonus
2004
ADR 1 Launching
2009
100% Tag Along clause
2002
BB Shares enter the ITAG portfolio
2003
Follow on (secondary shares)
2007
Banco do Brasil joined “Novo Mercado” (BOVESPA)
2006
BB Shares enter the IBRX-50 portfolio
1998
BB Shares enter the IBrX portfolio
1995
Capitalization and Restructuring Plan
1996
The Board of Directors of BB approved the migration of its program of American Depositary Receipt-ADR from level I to level II
2014
BB Seguridade IPO
2013
BB Shares enter Dow Jones Sustainability Index (DJSI) of NY stock exchange
2012
8
1st company listed on the stock exchange in Brazil
1906
9
Ownership Structure
Free Float 42.1% as of Mar/2016 Free Float Breakdown (%)
Treasury Shares 2.5%
National Treasury
55.3%
Foreign Investors
19.9%
Other 22.2%
20.4 21.6 21.6 21.1 19.9
19.3 18.1 18.1 18.6 22.2
39.7 39.7 39.7 39.8 42.1
Mar/15 Jun/15 Sep/15 Dec/15 Mar/16
Foreign Investors Other
10
Global Presence 10
Banco do Brasil in the world
Presence in 24 countries with 38 points of service
Branches
Sub-branches
Representative Offices
Subsidiaries and affiliates
Shared Services Units
11
4
7
14
2
11
Presence in Brazil
NORTH
27.9% NORTHEAST
31.2%
SOUTHEAST
20.4%
SOUTH
24.8%
MIDWEST
26.4%
Structural data (Mar/16)
Points of services1
17,462
Branches
5,428
Clients
63,890 mil
Employees
109,864
(1) Own Service Network
Own Service Network
Branches
MaisBB Network¹
Shared Service Network2
17,462
5,428
14,313
35,285
Total 67,060
(1) Banking Agents and Postal Bank branches.
Market Share – 23.8%
(Number of branches)
Brazil Total Service Network Mar/16
(2) Shared Service Network: lotteries (CEF), Banco 24h
e ATM (BRB+CEF).
Our more than 63 million clients count on more than 67 thousand points of service, present in 99.8% of the Brazilian municipalities and an increasingly digital Bank.
12
12
Specialized Offices
16 Very Small and Small Companies branches in Brazil.
Expansion project to cover all the country.
2016: Prevision of opening 37 new branches.
BB Estilo Digital
104 BB Estilo Digital branches².
More than 500 thousand benefited clients.
More than 200 Branches by the end of 2016
1.3 million benefited clients by the end of 2016.
1st most common APP in brazilian´s home
screen among all brazilian companies and 6th
overall ranking:¹
(1) Source: Mobile Time/Opinion Box Research – April/2016. (2) As of May/2016.
1. WhatsApp
2. Facebook
3. Instagram
4. Facebook Messenger
5. Youtube
6. Banco do Brasil
7. Twitter
8. Gmail
9. Chrome
10. Waze
Digital Experience
Portal Solução de Dívidas
R$ 2,2 billion agreements signed
since launch
More than 218 thousand customers
Joinville Branch
Innovation
13
13
Automated Service Channels - Transactions BB Digital – Mobile (million transactions)
1,287
2,343
Ourocard APP
Cards Block/Unblock function
Expenses in Timeline format
Function New at the Market – Allows
questioning unrecognized purchases
“Tap and pay” – payment agility
Authorization for abroad usage
Ourocard-e
100% Digital Card
212 thousand virtual cards, 118%
growth compared to 1Q15
Almost 1 million transactions since
launch in Aug/14
R$160 million total turnover on the
last 12 months
(1) Owned by BB.
1Q15
1Q16
Mar/16 Internet
28.5%
Mobile
34.3%
ATM¹
19.4%
In Branches
3.9%
Others
13.9% +82.0%
Innovation
14
Customer Segmentation
Individuals Companies
14
Private > R$ 2mm
Estilo / Estilo Digital > R$ 8k
Personalizado / Exclusivo¹ > R$ 4k < R$ 8k
Mercado Emergente < R$ 1.5k
Varejo > R$ 1.5k < R$ 4k
> R$ 1.5bn > R$ 2bn Large Corporate
> R$ 400mm < R$ 1.5bn
> R$ 600mm < R$ 2bn
Corporate
> R$ 120mm < R$ 400mm
> R$ 200mm < R$ 600mm
Empresarial Upper Middle
> R$ 25mm < R$ 120mm
> R$ 25mm < R$ 200mm
Empresarial Middle
> R$ 5mm < R$ 25mm Empresa
> R$ 1mm < R$ 5mm Pequena Empresa
< R$ 1mm Microempresa
Industry Services
(1) Digital service only.
15
Assets and Market Share
(¹) Source: Central Bank of Brazil (*) Dec/2015
1,404.9
Available Funds, Short-Term
Interbank Investments, Interbank and
Intrabank Accounts
Securities and Financial Derivatives
R$ Billion
Loans
Permanent Assets
Other
1,370.4 1,371.0 1,402.0 1,401.1 1,404.9
20.9 20.9 20.1 20.2 20.2*
Mar/15 Jun/15 Sep/15 Dec/15 Mar/16
Assets Market Share¹ (%)
2.2%
13.3%
8.7%
32.4%
43.4%
Share % - Mar/16
16
Loan Portfolio – Broad Concept¹
(1) It includes private securities and guarantees provided. (2) It considers the classified loan portfolio.
351.8 346.4 355.2 364.6 348.5
171.0 176.8 179.7 183.3 185.9
163.4 168.3 171.8 174.9 179.5
72.1 68.5 81.7 73.8 61.7
758.3 760.0 788.4 796.7
775.6
20.2 20.3 20.3 20.4 20.6
Mar/15 Jun/15 Sep/15 Dec/15 Mar/16
Corporates Individuals Agribusiness Abroad Market Share² - %
9.5%
21.6%
22.5%
46.4%
R$ Billion
8.0%
23.1%
24.0%
44.9%
2.3% on Mar/15
17
17
Mar/15 Dec/15 Mar/16
Balance Provision Share %
Balance Provision Share %
Balance Provision Share %
AA 397,873 - 58.3 373,298 - 52.0 371,909 - 53.0
A 96,106 481 14.1 144,778 724 20.2 138,407 692 19.7
B 121,121 1,211 17.8 124,925 1,249 17.4 115,445 1,154 16.4
C 28,914 867 4.2 25,526 766 3.6 25,554 767 3.6
D 4,983 498 0.7 11,033 1,103 1.5 6,303 630 0.9
E 11,173 3,352 1.6 11,797 3,539 1.6 12,353 3,706 1.8
F 4,217 2,108 0.6 4,768 2,384 0.7 5,352 2,676 0.8
G 2,791 1,954 0.4 3,806 2,664 0.5 7,133 4,993 1.0
H 15,011 15,011 2.2 17,919 17,919 2.5 19,570 19,570 2.8
Total 682,188 25,482 100.0 717,849 30,349 100.0 702,027 34,189 100.0
AA-C 644,013 2,559 94.4 668,526 2,739 93.1 651,315 2,613 92.8
D-H 38,175 22,923 5.6 49,323 27,610 6.9 50,711 31,575 7.2
Total Loan Portfolio - Risk Level
R$ Million
18
Mar/15 Dec/15 Mar/16
Payroll 59,863 62,502 62,589
Mortgage 30,386 37,169 38,446
Salary Loans 17,631 18,610 19,161
Auto Loans 9,979 8,404 7,844
Credit Cards 21,384 23,625 22,730
Consumer Finance 5,976 7,022 7,607
Overdraft 2,550 2,272 2,830
Microcredit 1,110 779 706
Other 4,764 6,522 7,140
TOTAL 153,644 166,905 169,054
76.7% 75.9% 75.7%
Loans to Individuals¹
R$ Million
(1) It considers the organic loan portfolio.
19
30.4 37.2 38.4
10.6 11.9 11.9
41.0 49.1 50.3
1.02 1.16 1.38
Mar/15 Dec/15 Mar/16
Mortgages withCompanies
Mortgages withIndividuals
Mortgage withIndividuals NPL +90days (%)
Salary Loans Auto Loans²
Mortgages Payroll²
Growth in lower risk lines¹
88.9 89.0 88.7
7.4 7.6 8.1 3.7 3.4 3.2
59.9 62.5 62.6
1.37 1.26 1.28
Mar/15 Dec/15 Mar/16
INSS Retirees andPensioners
Private SectorEmployees
Civil Servants
Payroll NPL +90 days(%)¹
17.6 18.6 19.2
2.59 2.49 2.30
Mar/15 Dec/15 Mar/16
Total
Salary Loans NPL +90days (%)
23.8 22.3 22.6
0.83 0.90 0.93
Mar/15 Dec/15 Mar/16
Auto Loans
Auto Loans NPL +90days (%)
(1) Classified Loan Portfolio (2) Organic Loan Portfolio
+8.7%
+4.6%
-5.3%
R$ Billion
+22.6%
20
Relationship
Individuals Portfolio¹ Individuals Portfolio Profile²
66.4% 67.3% 68.2%
21.0% 20.4% 19.9%
7.8% 8.1% 8.0%
4.9% 4.1% 3.9%
Mar/15 Dec/15 Mar/16
Time of Relationship
More than 10 years From 5 to 10 years From 2 to 5 years Up to 2 years
78.1% 78.9% 78.6%
14.6% 13.9% 13.8%
7.3% 7.2% 7.7%
Mar/15 Dec/15 Mar/16
Direct Consumer Credit + Auto Loans
Civil Servants
Private Sector Employees
INSS Retirees and Pensioners
(1) BB Classified Loan Portfolio. (2) BB Organic Loan Portfolio.
21
183.5 183.5 172.1
106.9 109.0 105.6
24.3 23.4 20.3 16.5 19.6 19.7
20.6 29.1 30.8
351.8 364.6 348.5
Mar/15 Dec/15 Mar/16
Working Capital² Investments + Private Securities Guarantees Trade Finance³ Other
(1) It includes private securities and guarantees provided. (2) It includes Working Capital, Receivables, Credit Card and Overdraft Account. (3) It Includes FEC/ACE and BNDES Exim. (4) Companies with annual revenues up to R$ 25 million.
Corporate Portfolio by Size
-0.9%
2.4% on Mar/15
-9.3% on Mar/15
Loans to Companies – Broad Concept¹
R$ Billion
251.4 271.0 257.4
100.4 93.6 91.1
351.8 364.6 348.5
Mar/15 Dec/15 Mar/16
Middle Market, Corporates and Government Very Small and Small Companies⁴
22
Relationship Amount Distribution by Time of
Company Foundation – Very Small
and Small Companies Portfolio (R$ bn)
(1) BB Classified Loan Portfolio - Companies with annual revenues up to R$ 25 million.
Total
Amount
R$91.1bn
39.4% 42.5% 43.4%
33.0% 33.3% 34.5%
22.0% 20.7% 19.5%
5.5% 3.5% 2.7%
Mar/15 Dec/15 Mar/16
Time of Relationship
More than 10 years From 5 to 10 years From 2 to 5 years Up to 2 years
0.9
10.5
26.0
30.3
23.4
Up to 2years
From 2 to5 years
From 5 to10 years
From 10to 20years
More than20 years
Very Small and Small Companies Portfolio¹
23
Carteira PJ por setor
Mar/15 Share % Dec/15 Share % Mar/16 Share % Oil and Gas 44,250 9.70% 47,716 10.00% 45,739 10.10%
Mining and Metallurgy 43,790 9.60% 43,986 9.20% 42,310 9.30%
Government 34,085 7.50% 42,924 9.00% 39,858 8.80%
Eletricity 39,617 8.70% 40,528 8.50% 39,416 8.70%
Foodstuffs of Vegetable Origin 36,090 7.90% 37,512 7.90% 33,862 7.50%
Transportation 29,908 6.50% 33,633 7.10% 32,095 7.10%
Automotive 26,648 5.80% 28,189 5.90% 26,372 5.80%
Services 24,753 5.40% 24,869 5.20% 23,056 5.10%
Real Estate Agents 20,545 4.50% 22,013 4.60% 21,358 4.70%
Retail Trade 20,858 4.60% 19,435 4.10% 18,099 4.00%
Foodstuffs of Animal Origin 13,755 3.00% 15,173 3.20% 17,188 3.80%
Financials Institutions 14,270 3.10% 17,456 3.70% 16,933 3.70%
Specific Activities of Construction 15,332 3.40% 15,742 3.30% 14,733 3.30%
Agricultural Inputs 11,274 2.50% 11,740 2.50% 11,105 2.50%
Textile and Clothing 12,696 2.80% 11,794 2.50% 11,103 2.50%
Pulp and Paper 11,207 2.50% 10,715 2.20% 9,776 2.20%
Electrical and Electronic Goods 10,206 2.20% 9,868 2.10% 8,841 2.00%
Chemicals 9,415 2.10% 9,339 2.00% 8,056 1.80%
Heavy Construction 9,327 2.00% 8,305 1.70% 7,865 1.70%
Telecommunication 9,035 2.00% 7,740 1.60% 7,449 1.60%
Wholesale and Various Industries 7,598 1.70% 6,838 1.40% 7,122 1.60%
Woodworking and Furniture 6,963 1.50% 6,394 1.30% 6,036 1.30%
Leather and Shoes 3,100 0.70% 3,040 0.60% 2,793 0.60%
Beverages 1,774 0.40% 1,875 0.40% 1,631 0.40%
Other Activities 728 0.20% 157 0.00% 69 0.00%
Total 457,225 100.0% 476,979 100.0% 452,866 100.0%
Companies Portfolio by Macro-sector
Included Companies and Agro Companies Portfolio.
R$ Million
24
9.8% growth in the past 12 months
61.2% of the total Rural Credit is at Banco do Brasil
23.1% of Banco do Brasil Credit Portfolio*
Agribusiness
Portfolio
R$179.5Billion
24
The Agribusiness Bank in Brazil
*It considers Agribusiness Broad Concept Portfolio
25
Agribusiness
Agribusiness Loan Portfolio by Costumer Type¹
(1) It includes Rural Product Bills and guarantees provided. (2) Source: Central Bank of Brazil – Mar/16.
Harvest 15/16 (Mar/16)
Use of Mitigators (Working Capital for Input Purchase)
118.7 120.7 120.6 123.3 125.9
44.7 47.6 51.2 51.6 53.6
163.4 168.3 171.8 174.9 179.5
60.0 61.0 60.5 60.9 61.2
Mar/15 Jun/15 Sep/15 Dec/15 Mar/16
Individuals Companies Market Share - %
Insured
64.8%
Not Insured
35.2%
Total disbursement in15/16 harvest
R$ 59.8 billion 1st 61.2 % Market Share²
+9.8%
26
The Brazilian Foreign Trade Bank
Operating abroad for over 50 years,
Banco do Brasil has supported Brazil's
relations with its trading partners, being
a reference point for entrepreneurs,
investors, economic agents and
foreign governments that maintain or
wish to maintain investments in Brazil.
26
2,042
2,185
1,865
24.5
30.0
26.7
1Q15 4Q15 1Q16
Contracted Amount (US$ million) Market share (%)
FCE/ACE
27
R$ Thousand Sep/14 Dec/14 Mar/15 Jun/15 Sep/15 Dec/15 Mar/16
Commercial Funding¹ 619,799 632,913 641,603 639,193 660,175 669,506 638,611
Domestic Onlending 86,061 89,157 90,686 90,032 90,543 90,065 88,082
Financial and Development Funds 9,569 10,840 12,265 12,404 14,677 15,003 14,781
Subordinated Debt 47,646 49,413 49,664 50,764 54,256 54,018 51,903
Capital Eligible Debt³ 27,908 29,351 32,876 32,441 37,926 35,393 33,728
Commercial Papers ⁴ 2,475 2,549 2,622 2,705 47 2,117 2,309
HCDI domestic 90 150 110 175 210 256 20
Foreign Borrowing² 59,487 61,654 71,829 72,547 94,590 82,306 65,668
Compulsory Deposits (78,714) (63,224) (56,613) (57,168) (60,362) (60,811) (62,613)
Total 774,319 812,803 845,042 843,092 892,061 887,854 832,489
Sources
(1) Includes part of the balances of Private Securities (Note 17c).
(2) Includes Foreign Borrowing, Foreign Securities, Foreign Onlending, Subordinated Debt Abroad, Hybrid Capital Debt Instruments and Judicial Deposits.
(3) From 3Q14 on, includes Capital Eligible Debt reallocated to Core Capital, as authorized by the Central Bank by Official Letter 15006/2014-BCB/DEORF/DIFIN.
(4) Includes Letters of Credit and Debentures.
28
Sources
R$ Thousand Sep/14 Dec/14 Mar/15 Jun/15 Sep/15 Dec/15 Mar/16
Foreign Securities 28,886 28,560 31,175 34,803 44,103 33,500 22,885
Foreign Borrowing 18,735 20,516 25,133 23,074 31,236 29,617 25,178
Foreign Onlending - - - - 9 10 -
HCDI Abroad 4,717 4,716 6,158 5,485 7,641 7,611 7,205
Subordinated Debt Abroad 7,149 7,862 9,361 9,186 11,600 11,569 10,400
Total² 59,487 61,654 71,829 72,547 94,590 82,306 65,668
R$ Thousand Sep/14 Dec/14 Mar/15 Jun/15 Sep/15 Dec/15 Mar/16
Demand Deposits 69,398 74,224 73,705 64,755 66,063 66,550 62,631
Savings Deposits 148,996 148,699 144,089 147,306 149,764 151,845 151,919
Interbank Deposits 27,638 30,354 36,736 33,337 41,465 41,483 36,885
Time Deposits 110,622 99,889 93,304 82,126 89,068 90,890 88,433
Judicial Deposits 110,095 115,010 118,591 116,805 116,107 113,652 114,140
Agribusiness Letters of Credit 104,094 102,325 118,263 132,372 134,555 134,823 135,420
Mortgage Bonds 7,772 14,156 19,067 18,526 18,474 18,121 18,681
Repurchase Agreement with Private Sec.¹ 41,184 48,256 37,848 43,965 44,678 52,142 30,471
Total 619,799 632,913 641,603 639,193 660,175 669,506 638,611
Commercial Funding
Foreign²
(1) Includes part of the balances of Private Securities (Note 17c).
(2) Includes Foreign Borrowing, Foreign Securities, Foreign Onlending, Subordinated Debt Abroad, Hybrid Capital Debt Instruments and Judicial Deposits.
30
Emissões no Exterior
Bonds Issued Abroad
Issue Date Volume (US$
million) Currency Term in Years Maturity Coupon (%) Structure
Rating ¹ (S&P / Moody´s/Fitch)
07/18/2007 187 BRL 10 07/18/2017 9.750 Senior SR / Ba2 / SR
04/29/2008 150 USD 10 04/29/2018 5.250 Securitization BBB+ / Ba1 / SR
10/20/2009 1,500 USD Perpetual Perpetual 8.500 Perpetual SR / B2 / SR
01/22/2010 500 USD 10 01/22/2020 6.000 Senior BB / Ba2 / BB+
10/05/2010 660 USD 10 10/05/2020 5.375 Tier II Subordinated SR / Ba3 / SR
05/26/2011 1,500 USD 10 05/26/2021 5.875 Tier II Subordinated SR / Ba3 / SR
11/23/2011 500 USD 5 11/23/2016 3.875 Senior SR / Ba2 / SR
01/20/2012 1,000 USD Perpetual Perpetual 9.250 Perpetual B- / SR / SR
03/05/2012 750 USD Perpetual Perpetual 9.250 Perpetual B- / SR / SR
06/19/2012 750 USD 10 06/19/2022 5.875 Tier II Subordinated B / Ba3 / SR
10/10/2012 1,925 USD 10 10/10/2022 3.875 Senior BB / Ba2 / BB+
01/31/2013 2,000 USD Perpetual Perpetual 6.250 Perpetual B- / SR / SR
07/25/2013 930 EUR 5 07/25/2018 3.750 Senior BB / Ba2 /BB+
12/20/2013 307 CHF 5.5 06/20/2019 2.500 Senior BB / Ba2 / BB+
03/26/2014 417 EUR 5 03/26/2019 3.750 Senior BB / Ba2 /BB+
06/18/2014 2,500 USD Perpetual Perpetual 9.000 Perpetual B- / B2 / SR
Foreign Borrowing
(1) Ratings were revised in 03/31/2016.
31
Sep/14 Dec/14 Mar/15 Jun/15 Sep/15 Dec/15 Mar/16
Available Funds 107,417 122,554 142,744 137,925 168,680 154,936 118,235
Net Loan Portfolio (a) = (b) + (c) + (d) 666,902 690,249 702,298 705,167 723,381 732,918 714,254
Classified Loan Portfolio (b) 643,577 669,020 682,188 687,664 710,612 717,849 702,027
Private Securities (c) 47,082 46,524 46,973 45,078 44,695 48,645 47,625
Allowance for Loan Losses (d) (23,757) (25,295) (26,862) (27,575) (31,926) (33,577) (35,398)
Adjusted Net Loan Portfolio (a) - (e)* 551,192 569,635 578,161 580,929 595,903 604,599 588,131
Domestic Onlending Loans (e) 115,710 120,614 124,137 124,238 127,478 128,319 126,122
Uses 774,319 812,803 845,042 843,092 892,061 887,854 832,489
Uses
Indicators (%)
Adjusted Net Loan Portfolio* / Commercial Funding** 88.9 90.0 90.1 90.9 90.3 90.3 92.1
Commercial Funding** 619,799 632,913 641,603 639,193 660,175 669,506 638,611
32
Compulsory/Reserve Requirements (%) 1Q15 2Q15 3Q15 4Q15 1Q16
Demand Deposits
Reserve Requirement 45 45 45 45 45
Additional Reserve Requirement 0 0 0 0 0
Marked to Rural 34 34 34 34 34
Marked to Micro Finance 2 2 2 2 2
Unmarked 19 19 19 19 19
Savings Deposits
Rural
Reserve Requirement 13 15.5 15.5 15.5 15.5
Additional Reserve Requirement 10 5.5 5.5 5.5 5.5
Marked 72 72 74 74 74
Unmarked 5 7 5 5 5
Mortgage
Reserve Requirement 20 24.5 24.5 24.5 24.5
Additional Reserve Requirement 10 5.5 5.5 5.5 5.5
Marked 65 65 65 65 65
Unmarked 5 5 5 5 5
Time Deposits
Reserve Requirement 20 20 25 25 25
Additional Reserve Requirement 11 11 11 11 11
Unmarked 69 69 64 64 64
Compulsório e Direcionamento Compulsory and Reserve Requirements
33
Means of Payment
Banco do Brasil BB Banco de Investimentos
BB Adm Cartões
BB ELO Cartões
100%
100%
100%
|
Serviços
49.99%
70%
66.64%
100%
40.95%
50,1%
100%
100%
\
100%
70%
100%
100%
30%
28.65%
30%
Banco
CBSS 100%
Promotora
34
Leadership
Assets (R$ billion – Mar/16)
Loan Portfolio (R$ billion – Mar/16)
Assets Under Managmt.¹ (R$ billion – Mar/16)
Deposits (R$ billion– Mar/16)
1,404.9 1,283.1
1,101.8
BB Bank A Bank B
(1) Source: Central Bank of Brazil - Market Share as of Dec/2015.
20.2% Market Share¹
775.6
554.3 463.2
BB Bank A Bank B
(1) Source: Central Bank of Brazil - Market Share as of Mar/16 for domestic loan portfolio.
20.6% Market Share¹
644.8
519.5
414.2
BB Bank A Bank B
(1) It does not include Banco Votorantim (2) Source: Anbima - Market Share as of Mar/16.
22.0% Market Share¹
454.0
266.3
189.2
BB Bank A Bank B
(1) Source: Central Bank of Brazil - Market Share as of Dec/2015.
23.4% Market Share¹ 1st 1st 1st 1st
35
Leadership
Cards
Total turnover
Debit
Credit
1st
2nd
Insurance - Collection
Business 1Q16
Rural
Pension Plan
Premium Bonds
Life
Vehicle
Source: Abecs Mar/16 Source: Susep Mar/16
1st
1st
1st
2nd
2nd
36
19.3%
14.0% 13.9%
11.5% 11.1%
BB Bank 1 Bank 2 Bank 3 Bank 4
24.7%
16.0%
9.8% 8.1% 7.6%
BB Bank 1 Bank 2 Bank 3 Bank 4
Foreign Exchange Export Contracts Foreign Exchange Import Contracts
Leadership in Foreign Trade
1st 1st
Source: Central Bank of Brazil – YTD Mar/16
37
Awards and Achievements
38
Decisions at any level of the Company are made collectively. With the purpose of involving all the executives in the definition of strategies and approval of proposals for the different businesses of Banco do Brasil.
The Only Brazilian Bank listed since 2006, in this BM&F Bovespa segment, destined to companies that voluntarily adopt the best practices for corporate governance.
Corporate Governance
3 Higher Committees
14 Executive Committees
3 Other Committees
Global Risk Committee Asset and Liabilities Management
and Liquidity Committee Investor Relations
Executive Committee
Credit Risk Executive Committee
Credit Limit Executive Committee Ethics Executive
Committee
Capital Management Executive Committee
Products and Services Executive Committee
Market and Liquidity Risk Executive Committee
Related Companies Governance Executive Committee
Internal Controls and Operational Risk Executive Commitee
Prevention of Financial,Foreign Exchange Illicit and Information Security Executive Committee
Administrative and Operational Executive Committee
Credit Transactions Executive Committee
Information Technology Executive Committee
Human Resources Executive Committee
Disciplinary Review Executive Committee
Credit Transactions Committee Human Resources Committee Information Technology
Committee
Objective Mitigate risks, share visions, aggregate value and quality to the decision process and disseminate knowledge.
Asset & Liability Management and Liquidity Executive Committee
39
Banco do Brasil: Ratings
2012 2013 2014 2015 1Q16
Standard & Poor's
Long-Term - Local Currency BBB BBB BBB- BB+ BB
Long-Term - Foreign Currency BBB BBB BBB- BB+ BB
Moody's
Financial strength C- C- C- - -
Long-Term Debt - Foreign Currency Baa1 Baa2 Baa2 Baa3 Ba2
Long-Term Deposits - Foreign Currency Baa2 Baa2 Baa2 Baa3 Ba3
Long-Term Deposits - Local Currency A3 Baa2 Baa2 Baa3 Ba2
Fitch Ratings
Long-Term - Local Currency BBB BBB BBB BB+ BB
Long-Term - Foreign Currency BBB BBB BBB BB+ BB
39
* Ratings were revised in May/2016.
Banking Industry
2
41
80.1 81.3 81.4 87.6 88.2 89.1 91.8 92.1 93.0
5 Largest 10 Largest 20 Largest
77.8 78.2 77.5
87.8 88.0 88.1 92.9 93.1 93.2
5 Largest 10 Largest 20 Largest
Concentration - %
Assets Loans
Source: Central Bank of Brazil *Dec/15
2013 2014 2015* 2013 2014 2015*
42
67.1 69.3 70.2
88.7 88.8 88.7
5 Largest 10 Largest
Concentration - %
Deposits Assets under Management Credit Card Revenue**
82.2 82.5 79.8
88.2 88.2 90.8 93.4 93.6 95.1
5 Largest 10 Largest 20 Largest
2014 2015 1Q16 2013 2014 2015*
93.0 98.0
3 largest 4 largest
Source: Central Bank of Brazil *Dec/15 ** Source: CardMonitor Research as of 4Q15 per acquiring.
Earnings Highlights
3
44
Net Interest Income Grew by 13.7%
Pre-Tax and Pre-Provision Earnings Increased by 15.6%¹
Fee Income 2.5% Growth. Excluding income migrations to Cateno, growth would be 10.8%².
Administrative Expenses Under control (2.5% growth)
Cost to income ratio Ended the quarter at 40.8%
Highlights 1Q16 / 1Q15
(1) Pre-Tax and Pre-Provision Earnings accumulated in four quarters. It does not consider a portion of estimated interchange revenues that migrated to Cateno from Mar/15. (2) It excludes interchange revenues in Jan/15 and Feb/15 that migrated to Cateno from Mar/15.
45
Net Income
Excluding the ALL impact on a specific case
(1) It excludes the Additional ALL reversion and the Tax Effect and Statutory Profit Sharing on One-Off Items.
(2,155)
672
2,648 9
(424)
536 1,286
1,073 2,359
4Q15Adj. Net Income
NII ALL Fee Income AdministrativeExpenses
Other 1Q16 Adj. NetIncome
One-Off Items 1Q16 Net Income
(134)
672 2,648 9
(424) (438)
2,333 26 2,359
4Q15Adj. Net Income
NII ALL Fee Income AdministrativeExpenses
Other 1Q16 Adj. NetIncome¹
One-Off Items 1Q16 Net Income
R$ Million ROE
12.0%
ROE
5.6%
ROE
10.5%
ROE
10.4%
46
Pre-Tax and Pre-Provision Earnings
36.0 40.3
1Q15 1Q16
+11.7%
R$ Billion
34.8 40.3
1Q15 1Q16
+15.6%
Annual change Adjusted annual change¹
(1) Pre-Tax and Pre-Provision Earnings accumulated in four quarters. It does not consider a portion of estimated interchange revenues that migrated to Cateno from Mar/15.
47
Earnings per Share (R$)
Market Ratios
2.07
1.05 1.08 0.89 0.83 1.06 1.06 1.01 0.92
0.45
1Q15 2Q15 3Q15 4Q15 1Q16Earnings per Share Adjusted Earnings per Share
Dividend Yield1 (%)
8.95 8.56
13.98 13.96
7.38
1Q15 2Q15 3Q15 4Q15 1Q16
(1) Dividends and Interest on Capital 12 months / Market Capitalization. Source: Economatica.
Source: Economatica. Source: Economatica.
Price/Book Value Price/Earnings 12 months
4.45 4.66
2.86 2.86
5.05
Mar/15 Jun/15 Sep/15 Dec/15 Mar/16
0.77 0.82
0.51 0.50 0.66
Mar/15 Jun/15 Sep/15 Dec/15 Mar/16
48
NPL Ratio +90 days (%)
NPL Ratio +90 days (%)
(1) Classified Loan Portfolio. (2) Required Provision / BB Classified Loan Portfolio.
NPL +15 Days (%)
2.90 2.70 2.80 2.90 3.10 3.40 3.50
1.91 1.86 1.84 1.89 2.06 2.24 2.60
Sep/14 Dec/14 Mar/15 Jun/15 Sep/15 Dec/15 Mar/16
Banking Industry Banco do Brasil
2.39 2.30 2.20 2.16 2.17 2.17 2.41
0.59 0.69 0.82 0.73 0.84 0.97 1.19
2.68 2.59 2.52 2.72 3.10
3.42 4.01
Sep/14 Dec/14 Mar/15 Jun/15 Sep/15 Dec/15 Mar/16
Individuals Agribusiness Companies
4.32 4.26 4.60
4.47 4.79 4.52 5.51
4.07 3.90 4.69
4.50 5.62 5.56
7.07
1.08 1.19 1.29 1.29 1.69 1.66 1.80
Sep/14 Dec/14 Mar/15 Jun/15 Sep/15 Dec/15 Mar/16
Individuals Companies Agribusiness
Average Risk² (%)
4.80 4.90 4.90 5.00 5.50 5.70 5.90
3.47 3.57 3.74 3.81 3.97 4.23 4.87
Sep/14 Dec/14 Mar/15 Jun/15 Sep/15 Dec/15 Mar/16
Banking Industry Banco do Brasil
Delinquency Ratios¹ and Average Risk
49
Annual Vintage – Very Small and Small Companies Loan
Portfolio Annual Vintage – Individuals Loan Portfolio
Vintages
50
(1) Quarterly change in the balance of past due for over 90 days operations + current quarter write-off. (2) Estimated flow of the Renegotiated loan portfolio contracts of past due for over 90days operations. (3) It considers the Classified Loan Portfolio of the previous quarter.
New NPL¹, Write Off and NPL Formation Rate
New NPL¹, Write Off and NPL Formation Rate including the Past Due Renegotiated loan Portfolio²
3.86 4.28 4.91 5.59 6.22
7.39
3.69 4.16 4.45 3.97 4.81 5.18
0.60 0.64 0.72 0.81 0.88 1.03
126.76 131.99 105.64 104.33 112.32 123.80
Dec/14 Mar/15 Jun/15 Sep/15 Dec/15 Mar/16
New NPL (R$ billion)
Write Off (R$ billion)
Quarterly ALL/New NPL (%)
New NPL / Loan Portfolio³ (%)
NPL Formation
4.44 4.81 5.98
6.73 8.03 8.47
3.69 4.16 4.45 3.97 4.81 5.18
0.69 0.72 0.88 0.98 1.13 1.18
110.23 117.46 86.77 86.73 87.07 107.97
Dec/14 Mar/15 Jun/15 Sep/15 Dec/15 Mar/16
New NPL with Past due Credits Portfolio (R$ million)
Write Off (R$ million)
Quarterly ALL/New NPL (%)
New NPL with Past due Credits Portfolio / Loan Portfolio³ (%)
51
Allowance for Loan Losses
(1) BB Classified Portfolio. (2) Quarterly ALL. It does not consider additional provision.
Coverage Ratios (%) and ALL Balance (R$ million)¹
ALL by Segment²
56 206 144 246 391 1,942
2,832 3,142 3,810 3,832 4,319
4,754 1,291
1,405 680 1,221 1,326
1,408
712 902 557
536
954
1,041
4,890 5,654 5,191
5,835 6,991
9,145
Dec/14 Mar/15 Jun/15 Sep/15 Dec/15 Mar/16
Agribusiness
Individuals
Companies
Abroad
23,889 25,482 26,170 28,220 30,349 34,189
1,405 1,380 1,405 3,705
3,228 1,209
25,295 26,862 27,575 31,926 33,577 35,398
181.48 175.00 172.41 177.42 167.65 168.57
203.48 213.99 211.79 218.07 209.19 193.83
124.75 98.89
119.14 113.11 119.68 104.05
Dec/14 Mar/15 Jun/15 Sep/15 Dec/15 Mar/16
Additional (Complementary) Provision
Required Allowance - R$ million
Banking Industry + 90 days
Banco do Brasil + 90 days
Banco do Brasil + 15 days
52
Renegotiated Overdue Loan Portfolio¹ 1Q15 4Q15 1Q16
Renegotiated Overdue Loan Portfolio - Changes
Initial Balance 9,030 15,520 19,653
Contracts 1,767 6,015 3,611
Payments received minus capitalized interest (99) (1,037) (449)
Write Off (514) (845) (777)
Final Balance 10,183 19,653 22,038
Allowance for Loan Losses Balance 6,111 8,585 9,495
NPL + 90 days 1,588 3,171 4,303
Indicators - %
ALL for Loan Losses / Loan Portfolio 60.0 43.7 43.1
NPL + 90 days / Loan Portfolio 15.6 16.1 19.5
ALL for Loan Losses Balance/NPL + 90 days 384.9 270.7 220.7
Credits Renegotiated/Classified Loan Portfolio 1.5 2.7 3.1 (1) Table according Explanatory Notes 10.k.
R$ Million
0.60 0.33 0.68 0.79 1.24 1.55
1.91
0.33 0.51 0.51 0.65 0.50 0.84 0.78
7.94
4.14
7.50 7.73
9.80 9.96 9.71
320.06 403.08 384.91 382.74
302.24 270.72
220.67
Sep/14 Dec/14 Mar/15 Jun/15 Sep/15 Dec/15 Mar/16
New NPL - Renegotiated Overdue Loan Portolio (R$billion)
Write Off (R$ billion)
New NPL/Past due Renegotiated Portfolio²
ALL Balance/NPL + 90 days
New NPL¹, Write Off and NPL Formation Rate
(1) Quarterly change in the balance of past-due for over 90 days operations + current quarter write off. (2) It considers the classified loan portfolio of the previous quarter.
53
(1) It corresponds to two large Brazilian private banks.
BB x Peers¹
Renegotiated Loan Portfolio – 1Q16
22,038 17,893
3.1
4.5
BB Peers Average¹
Renegotiated Loan Portfolio
Renegotiated LoanPortfolio/Classified Loan Portfolio(%)
7,064 6,982 7,414 8,112 8,563
6,111 6,616
7,464 8,585
9,495
22.3
17.5 16.5
18.5
23.0
15.6
13.6 15.9 16.1
19.5
Mar/15 Jun/15 Sep/15 Dec/15 Mar/16
Peers Average - ALL Balance
BB - ALL Balance
Peers Average - Renegotiated Portfolio NPL +90days (%)
BB - Renegotiated Portfolio NPL +90 days (%)
R$ Million
Renegotiated Loan Portfolio
54
10,579
13,577 15,653
18,951
27,749
17,411 19,133
21,565
25,295
33,577
2011 2012 2013 2014 2015
IFRS ALL Balance BRGAAP ALL Balance¹
R$ million
Allowance for Loan Losses: IFRS x BRGAAP
(1) BB Conglomerate from 2011 to 2013 and it does not consider BV. In 2014 and 2015, BB Multiple Bank.
55
Allowance for Loan Losses (12 months) / Loan Portfolio Allowance for Loan Losses (Quarterly) / Loan Portfolio
Classified Loan Portfolio – Growth by Risk Level
2.9%
in 12 months
(1) Average classified loan portfolio 12 months; (2) ALL accumulated in 12 months / 12 months Average Loan Portfolio; (3) 3 months Average Loan Portfolio; (4) Quarterly ALL / 3 months Average Loan Portfolio.
Allowance for Loan Losses (ALL) and Loan Portfolio
644,255 659,843 675,671 690,144 699,218
19,020 20,036 21,571 23,671 27,161
3.0 3.0 3.2 3.4 3.9
1Q15 2Q15 3Q15 4Q15 1Q16
Loan Portfolio¹ Allowance for Loan Losses ALL / Loan Portfolio (%)²
672,290 683,547 695,770 711,477 710,697
5,654 5,191 5,835 6,991 9,145
0.8 0.8 0.8 1.0 1.3
1Q15 2Q15 3Q15 4Q15 1Q16
Loan Portfolio³ Allowance for Loan Losses ALL / Loan Portfolio (%)⁴
682,188 7,303 1,320 1,180 1,135 4,341 4,560 702,027
Mar/15 AA-C D E F G H Mar/16
R$ Billion
56
Write-off – Percentage on the Classified Loan Portfolio¹
(1) Write-offs to losses accumulated in 12 months / average balance of the classified credit portfolio in 12 months. (2) It corresponds to the three largest Brazilian private banks.
2.38 2.38 2.37 2.49 2.61
4.21 4.05 4.03
4.23 4.47
Mar/15 Jun/15 Sep/15 Dec/15 Mar/16
Banco do Brasil Peers Average²
57
ALL Balance – Current and Past Due Operations
1.4 1.4
3.7 3.2
1.2
12.6 13.1 13.1 14.8
16.4 12.9 13.1
15.1 15.6
17.8
26.9 27.6
31.9 33.6
35.4
1Q15 2Q15 3Q15 4Q15 1Q16
Additional (Complementary) Provision Current (Generic) Past Due (Specific) Total
R$ Billion
58
Net Interest Income
R$ million 1Q15 4Q15 1Q16
Chg. % On 1Q15
Chg. % On 4Q15
Net Interest Income 12,562 14,267 14,276 13.7 0.1
Loan Operations Income 21,839 25,332 25,450 16.5 0.5
Funding Expenses (9,310) (11,305) (10,918) 17.3 (3.4)
Institutional Funding Costs¹ (3,319) (3,830) (3,733) 12.5 (2.5)
Recovery of Write-offs Loans 840 1,247 861 2.5 (30.9)
Treasury Income² 2,513 2,824 2,616 4.1 (7.4)
Global Spread (%)³ Spread by Portfolio (%) ³
(1) It Includes senior debt, subordinated debt and hybrid capital instrument (HCDI). (2) It included interest income, profitable compulsory deposits income, tax hedge, derivatives and other financial instruments that compensate the exchange rate variation in result. (3) Annualized data. (4) Series revised from 1Q15 due to methodology adjustments. (5) It does not include loans with government sector.
4.4 4.3 4.5 4.8 4.8
2.4 2.5 2.5 2.4
1.7
1Q15 2Q15 3Q15 4Q15 1Q16
NIM Risk Adjusted NIM
13.5 14.0
14.9 15.5 15.8
6.9 7.0 7.1 7.4 7.5
5.5 5.6 5.7 5.8 5.9
4.9 4.8 4.5 4.8 4.8
1Q15 2Q15 3Q15 4Q15 1Q16
Individuals NIM Loan Operations NIM⁴ Companies NIM⁵ Agribusiness NIM
59
Net Interest Income
Revenue from Loans
Funding Costs
8.3 8.9 9.1 9.3 10.3 11.6 11.3 10.9
3.4 2.9 3.0 3.3 3.4 3.8 3.8 3.7
9.8 10.4 10.9 11.3 11.9 12.6 13.4 14.2
76.2 76.5 76.8 75.9 76.8 75.9 74.9 75.4
2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16
Funding Expenses Institutional Funding Accumulated Selic (% accumulated in 12 months)¹ Funding Expenses % Selic
(1) Source: Central Bank of Brazil
19.7 20.5 21.3 21.8 22.7 24.8 25.3 25.5
9.8 10.4 10.9 11.3 11.9 12.6 13.4 14.2
2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16
Revenue from Loans Accumulated Selic (% accumulated in 12 months)¹
60
Fee Income 60
R$ Million 1Q15 4Q15 1Q16
Chg. On
1Q15
Chg. On
4Q15
Fee Income 5,423 5,982 5,558 2.5 (7.1)
Account Fees 1,142 1,458 1,435 25.6 (1.6)
Asset Management Fees 813 890 906 11.4 1.8
Insurance, Pension and Premium Bonds 696 750 697 0.2 (7.0)
Collections 418 419 419 0.1 0.0
Loan Fees 351 556 360 2.7 (35.3)
Credit / Debit Cards 681 442 321 (52.9) (27.5)
Billings 260 262 260 0.1 (0.8)
Interbank 186 200 202 9.0 1.1
Fiduciary Services 114 123 129 13.6 4.7
Consortium 95 113 115 21.3 2.0
Capital Market 166 142 110 (34.2) (22.8)
Other 501 622 604 20.5 0.2
Adjusted Fee Income¹
1Q15 4Q15 1Q16 Chg. On
1Q15
Chg. On
4Q15
Fee Income 5,016 5,982 5,558 10.8 (7.1)
Credit / Debit Cards 274 442 321 16.9 (27.5)
(1) ) It excludes interchange revenues in Jan/15 and Feb/15 that migrated to Cateno from Mar/15.
61
BB Seguridade
Adjusted Net Income (R$ million)
949.1 957.7
1Q15 1Q16
0.9%
62
Banco Votorantim
Net Income (R$ million)
Delinquency and Risk Level
122 146 137
77 86
1Q15 2Q15 3Q15 4Q15 1Q16
89.5% 89.8% 89.7% 88.8% 90.6%
10.5% 10.2% 10.3% 11.2% 9.4%
6.5% 5.2% 5.3%
5.7% 4.6%
1Q15 2Q15 3Q15 4Q15 1Q16
AA-C D-H NPL + 90 days / Loan Portfolio
63
Administrative Expenses and Cost to Income Ratio
(1) Administrative Expenses / Operating Revenues. Data from the Income Statement with Reallocations. 2014 and 2015 cost to income ratio is accumulated in 12 months.
4.6 5.0
4.8
3.0
3.4 3.0
43.2 41.5 40.8
1Q15 4Q15 1Q16
Personnel Expenses Other Expenses Cost to Income Ratio (%)¹
R$ Million
64
8.68 8.71 8.07 8.17 8.26
2.68 2.64 3.54 3.22 3.12
16.02 16.18 16.20 16.13 16.24
Mar/15 Jun/15 Sep/15 Dec/15 Mar/16
Core Capital AT 1 Tier 2
BIS Ratio %
4.66 4.82 4.58 4.75
Tier I 11.38%
4.86
65
BIS Ratio
Tier 1
Full application of Basel III rules
16.2 15.6 15.3
0.9 16.2
(0.7) (0.3)
BIS Ratio Deductions ScheduleAnticipation
BIS Ratio with fulldeductions
RWA Rules Anticipation BIS Ratio with FullyLoaded Basel III Rules
Use of Tax Credits Simulated BIS Ratiounder complete Basel III
Rules
10.7 10.5
11.3 11.4
(0.7) (0.2)
0.9
Tier 1 Deductions ScheduleAnticipation
Tier 1 with fulldeductions
RWA Rules Anticipation Tier 1 with Fully LoadedBasel III Rules
Use of Tax Credits Simulated Tier 1 undercomplete Basel III Rules
66
BIS III – Capital Requirements % 66
2016 2017 2018 2019
Common Equity Tier I (CET1) 4.500 4.500 4.500 4.500
Tier 1 6.000 6.000 6.000 6.000
Brazilian BIS Ratio 9.875 9.250 8.625 8.000
Capital Conservation Buffer 0.625 1.250 1.875 2.500
Additional CET1 Countercyclical Buffer (superior limit) 0.625¹ 1.250 1.875 2.500
Additional CET1 Systemic (D-SIB) Buffer 0.000 0.250 0.500 1.000
CET1 + Buffers 5.125¹ 7.250 8.750 10.500
Tier 1 + Buffers 6.625¹ 9.000 10.250 12.000
Brazilian BIS Ratio + Buffers 10.500¹ 12.000 12.875 14.000
Implementation Schedule
(1) The Additional CET1 Countercyclical Buffer was not activated by the Central Bank in 2016, according to Central Bank Circular 3,769/15.
67
Tax Rate R$ Million
EBT Reallocations 1,202
Additional ALL 2,047
Tax Hedge 826
Other One-Off Items 24
Tax Base 4,100
IR/CSLL Reallocations 659
Interest on Own Capital Tax Benefit (291)
Statutory Profit Sharing (135)
Eq. Int. in Results of Subsidiaries and Affiliates (461)
Tax Hedge (826)
Tax Effect on One-Off Items (878)
Other 86.8
IR/CSLL (1,845)
EBT Effects Tax Rate Effects
Source: Income Statement with Reallocations and Explanatory Note 24.
Tax Rate: 45%
68
(1) Adjusted ROE estimated for 2015 uses estimated adjusted shareholders’ equity, free from the effects of: (i) the restatement of actuarial assets and liabilities arising from the Deliberation CVM/695; and (ii) minority interests in controlled companies. (2) It includes private securities and guarantees provided. (3) Allowance for Loan Losses expenses of the last twelve months / Average Classified loan portfolio for the same period.
2016 Guidance 2016 Performance 2016 Guidance
Revised
Adjusted Return on Equity¹ 11 - 14 5.6 9 - 12
Net Interest Income 7 - 11 13.7 Unchanged
Domestic Loan Portfolio² - Broad Concept 3 - 6 4.0 Unchanged
Individuals 5 – 8 8.7 Unchanged
Companies 1 – 4 -0.9 Unchanged
Agribusiness 6 - 9 9.8 Unchanged
Allowance for Loan Losses³ 3.7 – 4.1 3.9 4.0 – 4.4
Fee Income 7 - 11 2.5 Unchanged
Administrative Expenses 5 - 8 2.5 Unchanged
Guidance
Macroeconomic Information
4
70
Inflation and Selic Rate
6.50 5.84 5.91
6.41
10.67
8.13
10.67
9.39
7.28
6.00
11.00
7.25
10.00
11.75
14.25
12.75
14.25 14.25 14.19
12.75
4.50
1.41
4.09
5.34
3.58 4.62
3.58
4.86
6.91
6.75
2011 2012 2013 2014 2015 1Q15 4Q15 1Q16 2016 2017
IPCA – IBGE (% accumulated in 12 months) Selic (% - end of the period) Real Interest Rate¹
Source: Central Bank of Brazil and IBGE. Projection for 2016 and 2017, according to Boletim Focus as of 05/01/2016. (1) Real Interest Rate = Selic - IPCA
71
GDP
50.3 52.6 53.1 54.2 53.2 54.2 53.1
32.3 30.6
33.1 36.2
32.1
36.2
1.9
3.0
0.1
-3.8
-1.2
-3.8
2.2
1.7
-0.6
-1.9 -0.7
-1.9
2012 2013 2014 2015 1Q15 4Q15 1Q16
Credit/GDP (% accumulated in 12 months) Public Sector Net Debt (% GDP) GDP (% accumulated in 12 months) Primary Surplus (% accumulated in 12 months)
Source: Central Bank of Brazil .
72
Loans/GDP
Loans/GDP (%) and Evolution of Loan Portfolio of Banking Industry
Source: Central Bank of Brazil
50.3 52.6 53.1 54.2 53.2 53.1
3.1 3.1 3.0 3.2 3.1 3.2
2012 2013 2014 2015 1Q15 1Q16
Credit/GDP (% accumulated in 12 months) Loan Portfolio Banking Industry (R$ trillon)
73
Unemployment
109.2
100.0 99.0 96.2 98.9 97.3 96.3 98.7 97.6
45.2 40.2 38.5 38.9 37.1 35.0 36.0 37.1 36.2
Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16
Consumer Expectations (INEC) Business Confidence (ICEI)
-2.3
2.1
-3.0
-8.3
-4.6
-8.3
5.5 5.4 4.8
6.8 5.0
6.8
2012 2013 2014 2015 1Q15 1Q16*
Industrial Production (% accumulated in 12 months)
Unemployment Rate (% accumulated in 12 months)
Source: IBGE and Confederação Nacional da Indústria *As of 4Q15.
74
Trade Balance US$ Billion
29.8
19.4
2.3
-4.0
19.7
44.8
50.0
-5.6
9.4 8.4
2011 2012 2013 2014 2015 2016 2017 1Q15 4Q15 1Q16
Source: MDIC. Projection for 2016 and 2017, according to Boletim Focus as of 05/01/2016.
75
International Reserves
Gross Foreign Debt (R$ billion) International Reserves (US$ billion)
570.8
621.3
712.5
668.1 665.0
352.0
378.6 375.8 374.1
368.7
2011 2012 2013 2014 2015
Source: Central Bank of Brazil.
76
Source: World Bank and FAO
Brazil has the Ideal Conditions for Sustainable Growth Only a few countries have the same potential as Brazil
Sustainable Growth
Urban Population > 80 million people* (2011)
GDP > US$ 1 trillion*
UK
France
Korea
Italy
Canada Germany
Spain
Mexico
Japan
Indonesia
Kasakhstan
Argentina
Brazil
India
USA China Russia
Planting Area > 140 million ha*
Australia
*2011
77
Main Pilars of Brazilian Growth
Agriculture Foreign Trade Infrastructure
77
78
Overview
Area 8.5 million Km²
Population (2015) 204 million
GDP (2015) -3.8%
Agribusiness GDP (2015) 1.8%
Brazil’s Unique Advantages
Greater availability of arable land
in the world at low costs
Easy Access to Clean Water Supplies
Competitive Prices for Land
Excellent Climate
Rich soil
Source: Agriculture Ministry and IBGE
Brazilian Agribusiness: Overview
79
Brazilian Agribusiness: Area X Production
Planted Area (thousands Ha) vs Production (thousands Tons)
47,674 47,416 49,873 50,885 53,563 57,060 57,931 58,395
135,135
149,255 162,803 166,172
188,658 193,622
207,667 209,011
2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 E
Planted Area Production
CAGR
54.7%
CAGR
22.5%
Source: CONAB
80
Brazilian Agribusiness: Undisputable Leadership
Brazil: World Commodities Ranking
Coffee
Orange Juice
Sugar
Soybean
Poultry
Beef
Corn
Production Export
Source: Agriculture Ministry
1st
1st
1st
3rd
2nd
3rd
1st
1st
1st
1st
1st
1st
2nd
1st
81
Source: Federal Government (MPOG) - Dec/15 *Private Service Terminal
The Federal Government holds Investment Programs in progress
R$51.9 bn IN PROGRESS
R$198.4 bn AUCTION LAUNCHED
PIL – Logistics Investment Program – Stage I (2012-2014)
PIL – Logistics Investment Program – Stage II (2015-2018)
R$186.0 bn AUCTION LAUNCHED
PIEE – Electricity Investment Program
+ than R$400bn Total Investment Forecast
R$8.5bn
Airports
R$86.4bn
Railroad
R$66.1bn
Highway
R$37.4bn
Ports
7 projects - R$27.7bn
Highway
5 projects - R$21.0bn
Airports
7 projects - R$3.2bn
TUPs*
R$116bn
Generation
R$70 bn
Transmission
Infrastructure: Investment Programs
82
Brazilian Foreign Trade Balance Evolution (US$ billion)
Brazilian Foreign Trade Balance: Overview
242.6 242.0 225.1
191.1
42.8 40.6
223.2 239.7
229.1
171.5
48.3 32.2
2012 2013 2014 2015 Mar/15 Mar/16
Exports (US$ billion – year accumulated) Imports (US$ billion – year accumulated)
Source: Ministry of Development, Industry and Foreign Trade.
19.4 2.3 -4.0
19.7
-5.6 8.4
Trade Balance (US$ billion – year accumulated)
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Brazilian Exports (by country of destination¹)
Brazilian Foreign Trade Balance: Exports
17.2%
12.5%
7.5%
5.5%
3.2% 2.5% 2.3% 2.0% 2.0% 2.0% 1.9% 1.6%
China USA Argentina Netherlands Japan Germany Chile Mexico Belgium South Korea Italy India
Source: Ministry of Development, Industry and Foreign Trade. (1) YTD Mar/2016
84
Summary Table
Annual Collected Data Quarterly Data
2011 2012 2013 2014 2015 1Q15 4Q15 1Q16
Economic Activity
GDP (% YTD in 12 months) 3.9 1.9 3.0 0.1 -3.8 -1.2 -3.8
Family Consumption 4.7 3.5 3.5 1.3 -4.0 0.3 -4.0
Government Consumption 2.2 2.3 1.5 1.2 -1.0 0.5 -1.0
Gross Fixed Capital Formation 6.7 0.8 5.8 -4.5 -14.1 -7.8 -14.1
Exports 4.8 0.3 2.4 -1.1 6.1 -1.0 6.1
Imports 9.4 0.7 7.2 -1.0 -14.3 -2.5 -14.3
Use of Installed Capacity (%) 82.8 82.8 82.3 81.1 77.6 79.6 77.6
Economically active population - PEA (% YTD in 12 months) 1.2 1.7 -0.8 -0.1 -0.3 1.0 -0.3 -1.9
Unemployment Rate (% YTD in 12 months) 6.0 5.5 5.4 4.8 6.8 5.0 6.8
Formal employment – net creation in 12 m (thousand jobs) 1,566.0 868.2 730.7 152.7 -1,625.6 -215.7 -1,625.6
Industrial Production (% YTD in 12 months) 0.4 -2.3 2.1 -3.0 -8.3 -4.6 -8.3
External Sector
Current Transactions (% GDP in 12 months) -3.0 -3.1 -3.1 -4.3 -3.3 -4.5 -3.3 -2.4
Direct Foreign Investment (US$ billion - year accumulated) 101.2 86.6 69.2 96.9 75.1 13.1 75.1 16.9
International Reserves (US$ billion – end of period) 352.0 378.6 375.8 374.1 368.7 371.0 368.7 375.2
Sovereign Risk (basis points – EOP) 223.0 142.0 224.0 259.0 432.0 322.0 432.0 502.0
Trade Balance (US$ billion – year accumulated) 29.8 19.4 2.3 -4.0 19.7 -5.6 19.7 8.4
Exports (US$ billion – year accumulated) 256.0 242.6 242.0 225.1 191.1 42.8 191.1 40.6
Imports (US$ billion – year accumulated) 226.2 223.2 239.7 229.1 171.5 48.3 171.5 32.2
Trade Balance (US$ billion – quarterly accumulated) -5.6 9.4 8.4
Exports (US$ billion – quarterly accumulated) 42.8 46.6 40.6
Imports (US$ billion – quarterly accumulated) 48.3 37.2 32.2
Ptax Dollar Rate (EOP) 1.9 2.0 2.3 2.7 3.9 3.2 3.9 3.6
Ptax Dollar Rate (% YTD in 12 months) 12.6 8.9 14.6 13.4 47.0 41.8 47.0 10.9
All indicators were obtained from official sources such as Central Bank of Brazil, FGV( Getúlio Vargas Foundation), IBGE, etc.
85
Summary Table
Annual Collected Data Quarterly Data
2011 2012 2013 2014 2015 1Q15 4Q15 1Q16
Monetary Ratios
IGP-DI FGV (% YTD in 12 months) 5.0 8.1 5.5 3.8 10.7 3.5 10.7 11.1
IGP-M FGV (% YTD in 12 months) 5.1 7.8 5.5 3.7 10.5 3.2 10.5 11.6
IPCA – IBGE (% YTD in 12 months) 6.5 5.8 5.9 6.4 10.7 8.1 10.7 9.4
Selic (EOP %) 11.00 7.25 10.00 11.75 14.25 12.75 14.25 14.25
Accumulated Selic (% YTD in 12 months) 11.6 8.5 8.2 10.9 13.4 11.3 13.4 14.2
Accumulated TR (exBTN) (% YTD in 12 months) 1.4 0.3 0.3 1.0 1.8 1.1 1.8 2.1
TJLP - IBGE (EOP %) 6.0 5.5 5.0 5.0 7.0 5.5 7.0 7.5
Libor (EOP %) 0.4 0.4 0.2 0.2 0.3 0.3 0.3 0.6
Public Finance
Primary Surplus (% GDP 12 months accumulated) 2.9 2.2 1.7 -0.6 -1.9 -0.7 -1.9
Public Sector Gross Debt (% GDP) 51.3 53.8 51.7 57.2 66.5 60.5 66.5
Public Sector Net Debt (% GDP) 34.5 32.3 30.6 33.1 36.2 32.1 36.2
Credit Ratios
Banking Industry Loan Portfolio (R$ billion) 3,017.5 3,060.7 3,100.4 3,017.5 3,216.9 3,060.7 3,216.9 3,160.7
Individuals (R$ billion) 921.1 1,075.8 1,245.8 1,412.1 1,512.2 1,438.7 1,512.2 1,520.3
Companies (R$ billion) 1,112.9 1,292.6 1,465.5 1,605.4 1,707.2 1,622.0 1,707.2 1,640.4
Credit/GDP (% YTD in 12 months) - (%) 46.5 50.3 52.6 53.1 54.2 53.2 54.2 53.1
Household Debt (%) 41.6 43.6 45.1 46.0 45.6 46.1 45.6
Total Default (% past due loans over 90 days) 3.6 3.7 2.8 2.7 3.1 2.8 3.4 3.5
All indicators were obtained from official sources such as Central Bank of Brazil, FGV( Getúlio Vargas Foundation), IBGE, etc.
86
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Av. Paulista 2163, 2nd Floor – Cerqueira César
São Paulo/SP - Brazil - 01311-933 +55 (11) 3066-9110 www.bb.com.br/ir [email protected]