The Company - 1 Half 2010 - Banco do Brasil

The Companyst1 Half 2010

bb.com.br

1 Half 2010 Highlights

Latin American leader in total assets, with market share of 21.5%

Brazilian bank with largest number of customers: 53.3 million

Largest coverage in Brazil, with 18.3 thousand own points of service

Leader in total deposits, with R$ 344.0 billion and 26.7% market share

Leader in asset management¹, with R$ 354.4 billion under management and market

share of 22.9%

Loan portfolio of R$ 326.5 billion, for market share of 20.1%, confirming leadership

Brazilian leader in foreign exchange market, with share of 24.8% in imports and 30.6%

in exports

Trade finance (ACC/ACE) leader, with market share of 33.6%

Market leader in BNDES onlending, with disbursements of R$ 8.5 billion

Leadership in agribusiness, with market share of 60.5%

Presence in 3.6 thousand of Brazil's cities

Present in 23 countries

(1) These figures accounted 50% of Banco Votorantim asset management portfolio.

st

Economic Highlights

Economic Activity

* As of March 2010(1) Gross fixed capital formation(2) As of the fourth quarter of each year

2004 2005 2006 2007 2008 2009 1H09 1H10

External Sector

Monetary Indicators

Public Finance

Credit Indicators

Nominal GDP (R$ bi)

GDP (% YTD in 12 months)

Household Consumption

Government Consumption

CAPEX¹

Exports²

Imports²

Use of Installed Capacity (%)

Agent Population (% 12 months)

Unemployment Rate (% 12 months)

Formal Employment–Net Creation (% 12 months)

Industrial Production (% 12 months)

Current Account Balance (% 12 months)

Foreign Direct Investment

International Reserves (US$ billion)

Country Risk (base points - EOP)

Trade Balance (US$ billion)

Exports (US$ billion)

Imports (US$ billion)

PTax Dollar Sell (EOP)

IGP-DI FGV (% 12 months)

IGP-M FGV (% 12 months)

IPCA - IBGE (% 12 months)

SELIC, EOP (%)

SELIC, Cumulative (% 12 months)

TR (exBTN) Cumulative (% 12 months)

TJLP, IBGE, EOP (%)

LIBOR, EOP (%)

Primary Surplus (12 months accumulated GDP)

PSGD (% GDP)

PSND (% GDP)

Credit/GDP (% 12 months)

Total Default (% loans past due 90 days)

Individuals

Businesses

Total Investment Rate (%)

Individuals

Businesses

Total Spread (%)

Individuals

Businesses

Average Term (%)

Individuals

Businesses

2,147.2

3.2

4.5

2.3

3.6

9.33

8.5

80.8

0.6

9.9

(17.7)

3.1

1.6

15.1

53.8

305

44.9

118.5

73.6

2.34

1.2

1.2

5.7

18.0

19.0

2.8

9.7

4.0

3.9

-

48.2

28.1

3.7

6.7

2.1

45.9

59.3

31.7

28.6

42.8

13.8

10.6

7.3

2,369.8

3.7

4.6

2.8

9.8

4.67

18.4

81.5

2.5

10.0

(2.0)

2.8

1.3

18.8

85.8

193

46.5

137.8

91.4

2.13

3.8

3.8

3.1

13.3

15.1

2.0

6.8

5.4

3.2

55.1

47.0

30.7

3.7

7.6

3.1

39.8

52.1

26.2

27.2

39.6

13.8

12.3

7.8

2,661.3

5.4

6.5

3.1

13.4

6.19

19.9

83.4

1.5

9.3

31.6

6.0

0.1

34.6

180.3

222

40.0

160.6

120.6

1.77

7.9

7.7

4.5

11.3

11.9

1.5

6.4

5.2

3.4

55.0

45.1

34.3

3.2

7.0

3.4

33.8

43.9

22.9

22.3

31.9

11.9

14.6

9.2

3,004.9

5.1

5.4

5.6

13.8

(0.64)

18.0

81.5

2.0

7.9

(10.2)

(3.1)

(1.7)

45.1

206.8

416

24.7

197.9

173.2

2.34

9.1

9.8

5.9

13.8

12.5

1.8

6.2

3.9

3.5

56.3

38.4

41.3

3.2

8.0

1.8

43.3

57.9

30.7

30.6

45.0

18.3

16.3

10.1

3,143.0

(0.2)

4.1

3.7

(9.9)

(10.28)

(11.4)

81.6

0.5

8.1

(31.5)

(7.4)

(1.6)

25.9

239.1

196

25.3

153.0

127.6

1.74

(1.4)

(1.7)

4.3

8.8

9.9

0.7

6.0

0.3

2.1

63.0

42.8

45.0

4.4

7.8

3.8

34.3

42.7

25.5

24.3

31.6

16.5

17.3

9.4

3,053.9

1.0

4.4

2.9

(2.4)

(7.64)

(0.9)

79.4

0.7

8.1

(79.3)

(6.5)

(1.3)

12.7

208.4

281

13.9

70.0

56.0

1.95

0.7

1.5

4.8

9.3

11.4

1.7

6.3

1.2

2.0

60.9

41.2

41.8

4.4

8.6

3.4

36.7

45.6

27.5

27.2

35.7

18.3

16.1

8.9

3,252.0*

2.4*

5.95*

3.1*

(1.5)*

(4.21)*

(0.4)*

82.8

2.5

7.5

455.7

6.5

(2.1)

6.5

253.1

251

7.9

89.2

81.3

1.80

1.1

5.2

4.8

10.3

9.0

0.4

6.0

0.3

2.1

60.1

41.4

45.7

3.7

6.6

3.6

34.6

40.4

27.3

23.5

28.6

16.9

0.0

17.6

12.7

1,941.5

5.7

3.8

4.1

9.1

15.29

13.0

81.9

1.4

11.6

136.0

8.3

12.1

12.4

7.6

17.8

16.2

1.8

9.7

2.0

3.8

-

50.6

24.5

3.1

6.1

1.6

44.6

60.5

31.0

26.8

42.9

13.0

9.9

6.3

1.8

18.1

52.9

383

33.8

96.7

62.8

2.65

1.8

18.1

52.9

383

33.8

96.7

62.8

2.65

Figures at a GlanceR$ million 2004 2005 2006 2007 2008 2009

3,024

15,464

(3,531)

6,614

(12,595)

239,014

88,554

73,485

115,532

124,021

14,106

1.2

23.0

8.4

54.2

2.8

218.9

93.1

15.2

954

5.80

1.24

31.5

3.7

22,140

20,771

1,369

14.4

39.0

6,918

34,365

79.7

3.7

4,154

16,709

(4,527)

7,649

(13,147)

252,977

101,789

66,470

137,658

153,508

16,850

1.4

26.8

8.6

48.1

3.4

193.8

102.3

17.1

1,498

6.93

1.71

36.1

4.4

22,400

22,968

1,432

14.8

40.2

9,282

39,974

83.7

3.9

6,044

18,107

(5,743)

8,888

(13,745)

296,356

133,157

73,108

158,841

182,682

20,758

1.3

32.1

8.1

47.5

2.5

255.3

112.9

17.3

2,418

8.38

2.44

40.0

4.6

25,709

24,150

1,559

15.1

39.7

14,096

41,661

82.7

4.0

5,058

20,807

(5,378)

9,903

(15,902)

367,210

160,739

75,201

188,282

220,136

24,262

1.7

22.5

7.6

46.2

2.7

241.7

127.7

15.6

2,023

9.80

2.04

40.0

2.7

27,414

25,746

1,667

15.3

39.3

21,329

47,229

81.9

4.0

8,803

24,515

(6,799)

11,811

(16,787)

521,273

224,808

86,909

270,841

246,334

29,937

2.0

32.5

7.0

45.6

2.4

257.7

136.2

15.2

3,521

11.66

3.44

40.0

9.3

30,378

28,494

1,884

16.0

39.7

25,377

52,654

89.0

4.3

10,148

33,060

(11,629)

13,511

(23,050)

708,549

300,829

124,337

337,564

306,686

36,119

1.7

30.7

6.7

40.7

3.3

190.3

128.2

13.7

4,059

14.06

3.95

40.0

5.3

34,988

32,781

2,207

17.9

45.4

27,981

59,328

103.9

4.9

1H09 1H10

4,014

15,472

(5,663)

6,379

(11,221)

598,839

252,485

109,564

310,846

293,896

32,360

1.4

27.4

6.9

42.1

3.3

214.0

134.7

15.3

1,605

12.60

1.56

40.0

3.0

37,747

32,555

2,192

17.210

44.0

27,158

56,974

103.5

4.9

5,076

18,817

(5,897)

7,588

(12,441)

755,706

326,522

132,249

343,961

344,886

39,332

1.4

28.7

6.4

43.5

2.7

203.9

121.0

12.8

2,052

15.31

1.98

40.0

3.2

34,920

32,695

2,225

18.286

43.9

28,751

57,490

106.2

5.0

Net Income

Net Interest Income*

Allowance for Loan Losses

Fee Income

Administrative Expenses

Total Assets

Loan Portfolio

Securities Portfolio

Deposits

Assets Under Management

Shareholder´s Equity

Ratios (%)

ROA - Annualized

ROE - Annualized

NIM - Annualized

Cost/Income Ratio

Delinquency

Allowance / Deliquency

Coverage

BIS Ratio

Shares

Dividends / Interest on Own Capital (R$ million)

Book Value per Share (R$)

Earnings per Share (R$)

Payout (%)

Dividend Yield (%)

Other Indicators (In thousand)

Checking Account

Individuals

Businesses

Service Network

Automated Teller Machine (ATM)

Credit Cards

Debit Cards

Employees

Number of Branches

a) Net Interest Income/ Earnings Assets.

b) Administrative Expenses/Operating Income (Does not include one-off items).

c) Loans past due over 90 days/ Loan Portfolio.

d) Fee Income/Personnel Expenses

e) Adjusted series considering the stock split (1:3) in the second quarter of 2007.

f) Consolidated statements, including non-financial companies, since March/2008.

*Income Statement with Reallocations

(Does not include one-off items).

a*

b

c

d

e

e

Table of Contents

01. Economic Environment

02. Industry Outlook

03. Banco do Brasil Positioning

04. Financial Performance

05. Banco do Brasil Stock

06. Corporate Governance

6.1 Organizational Structure

6.2 Risk Management

6.3 Regulatory Capital

07. Human Resources

08. Social and Environmental Responsibility

09. Products and Services

9.1 Credit

9.1.1 Individuals

9.1.2 Businesses

9.1.3 Agribusiness

9.1.4 Foreign Trade

9.2 Securities

9.3 Funding

9.4 Asset Management

9.5 Capital Markets

9.6 Insurance, Pension Plans and Savings Bonds

9.7 Cards

10. Banco do Brasil Presence

10.1 Client Base

10.1.1 Retail

10.1.2 Wholesale

10.1.3 Public Sector

10.2 Distribution Channels in Brazil and Abroad

10.3 Technology Structure

11. Market Opinion

12. Awards

13. Banco do Brasil Figures

Distribution Network Abroad

Contact List

03

09

12

16

19

21

22

25

25

26

27

29

29

30

32

34

37

39

40

41

42

43

47

48

48

48

49

49

50

52

54

55

56

59

63

1Banco do Brasil - The Company 1 Half 2010st

3

1. Economic Environment

The first half of 2010 was marked by the exacerbation of uncertainties regarding the fiscal sustainability of

European countries such as Portugal, Italy, Ireland, Greece and Spain. Despite the approval of financial aid

packages by both the European Union (EU) and the International Monetary Fund (IMF), concerns are

mounting that a banking crisis could potentially impact the public finances of countries in the region. This

situation, combined with the slow pace of the recuperation in economic activity in other advanced

economies, adversely affected investor confidence in a faster recovery of the world economy. The latest

macroeconomic figures indicated that developed economies still have high rates of unemployment with only

marginal improvement in industrial production, signaling that the recovery process should remain moderate

and inhomogeneous.

Meanwhile, major emerging economies continued to show more dynamic situations. However, this was not

enough to ensure positive moves in the prices of key assets in the world economy, in particular stocks and

commodities.

Like other countries, the Brazilian economy underwent a period of higher volatility in risk indicators and the

exchange rate. However, this situation did not have significant impacts on the prospects for inflation or GDP

growth, which remain positive. Meanwhile, Brazil's country risk premium (EMBI) has remained significantly

below the average of emerging economies.

Against this backdrop, the rating agencies Moody's, Standard and Poor's and Fitch maintained their

investment grade ratings for Brazil, based on the domestic and foreign-currency ratings, and further

upgrades are still expected.

The positive perception of Brazil remains in place, given the satisfactory performance of the economy during

the global crisis, which was maintained by prudent economic policy, supported by inflation targeting and

flexible exchange rate regimes, a strong trade balance and a healthy financial sector.

Source: Brazilian Institute Geography and Statistics (IBGE)*As of March 2010

GDP at current prices Services Industry Agribusiness

GDP (R$ billion)

2004

1,941

1,049

502

115

3,005

2,147

1,198

539

105

2005

2,370

1,338

586

111

2006

2,661

1,524

636

127

2007

1,706

699

151

2008

3,143

1,852

686

164

2009

1,496

890

312

90

826480

1H09 1H10*

18043

Banco do Brasil - The Company 1 Half 2010st

Exchange Rate (R$/US$)¹

Inflation, IPCA index¹ (%)

Source: Brazilian Geography and Statistics Institute (IBGE)(1) Dollar sell price on last business day of each year

(1) Annual inflation(2) Source: Central Bank of Brazil(3) Source: Brazilian Geography and Statistics Institute (IBGE)* For 1H09 and 1H10, half-year cumulative IPCA

Inflation Target² IPCA³

4

2004 2005 2006 2007 2008 2009

2.6544

2.34072.1380

1.7700

2.3400

1.7412

1.9516

1.8015

1H09 1H10

2004 2005 2006 2007 2008 2009

3.8

7.6

62,8

118,5

73,8

5.75.5

3.1

4.5 4.5 4.5 4.5

5.9

4.54.3

2.6

3.1

1H09* 1H10*


Interest Rate (Selic)

Trade Balance, FOB (US$ million)*

Source: Economática

*Cumulative Amount in periodSource: Ministry of Development, Industry and Foreign Trade

9.9

19.016.2

15.1

11.9 12.5

Interest Rate, EOP (%) Interest Rate, Average (%)

33.8

44.946.5

40.0

24.7 25.3

5

Exports Imports

11.4

9.017.818.0

13.3

11.3

13.8

2004 2005 2006 2007 2008 2009

8.89.3

10.3

1H09 1H10

13.9

7.9197.9

2004 2005 2006 2007 2008 2009

96.7

62.8

118.5

73.6

137.8

91.4

160.6

120.6

173.2

153.0

127.6

70.0

56.0

89.2

81.3

1H09 1H10

Surplus


Brazil Sovereign Risk¹

Internacional Reserves (US$ billion)

(1) End of periodSource: Bloomberg

Source: Central Bank of Brazil

6

383

305

193222

416

196

281

251

2004 2005 2006 2007 2008 2009 1H09 1H10

2004 2005 2006 2007 2008 2009

52.9 53.8

85.8

180.3

206.8

239.1253.1

208.4

1H09 1H10


Foreign Direct Investment (US$ billion)

Public Sector Net Debt (% GDP) vs. Primary Surplus (% GDP)



PSND (%) Primary Surplus

18.1

15.1

18.8 34.6

45.1

25.9

2004 2005 2006 2007 2008 2009

12.7

6.5

1H09 1H10

3.83.9

3.2 3.4 3.5

2.12.0

2.1

48.248.0

45.942.8

37.3

43.0

2004 2005 2006 2007 2008 2009

41.241.42

1H09 1H10


8

Brazil’s Compelling Demographic Dynamics

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

19501960

19701980

19902000

20102020

20302040

2050

Dependency Ratio¹ Brazilian Population Aged 15-64

Source: United Nations(1) Dependency ratio is the ratio of the population aged 0-14 and over 65 to the population aged 15-64

Middle and Low Income Classes (% Households)¹ and Unemployment Rate²

2004 2005 2006 2007 2008 2009

47.6

40.8

46.7

40.1

50.0

36.0

51.9

33.4

53.8

30.9

53.6

30.8

(1) Data as of June of each year. Income classes classified based on household income as defined by Fundação Getúlio Vargas. Low income class:household income up to R$ 1,114 per month. Middle income class: household income from R$ 1,115 to R$ 4,808 per month.(2) Average in last 12 months.Sources: Ipea Data, Fundação Getúlio Vargas and IBGE.

Low Income Middle Income GDP Per capta (US$ thousand) Unemployment Rate

11.6

9.9 10.0

9.3

8.68.2

8.17.97.3

5.9

4.8

3.7

DemographicBonus


9

Banks in Brazil¹

(1) End of periodSource: Central Bank of Brazil

2. Industry Outlook

Loans vs. GDP (%)¹

Source: Central Bank of Brazil(1) Includes only multiple and commercial banks authorized to operate by the Central BankSince 2008, pro forma for the merger of Itaú Unibanco and BB/Nossa Caixa

2004 2005 2006 2007 2008 2009

163160

158

155153

1H09 1H10

155 155153

2004 2005 2006 2007 2008 2009

25.7

28.330.9

35.2

40.8

45.0

1H09 1H10

41.8

45.7


10

Loans by Segment, Free Resources (%)


Individuals Businesses

Main Individual Loan Operations


2004 2005 2006 2007 2008 2009

56.4

43.6

52.8 52.2 51.9 54.7 50.8

47.2 47.8 48.1 45.3 49.2

1H09 1H10

51.7 50.3

48.3 49.7

(R$ million) 2004 2005 2006 2007 2008 200949,356

17,151

38,065

8,027

9,800

105,428

70,739

31,704

50,685

11,260

10,974

143,658

88,710

48,149

63,475

13,418

11,760

177,363

100,928

64,686

81,481

17,150

12,985

317,561

133,025

78,890

139,145

22,088

16,040

394,287

164,323

107,883

157,950

25,699

15,790

469,863

Direct Consumer Credit

Payroll Loan

Vehicles

Credit Cards

Overdraft Account

Total (Free Resources)

1H09 1H10149,429

91,826

147,460

25,386

17,877

434,331

186,133

123,438

157,950

28,558

17,939

505,733


11

Brazilian Banks: Assets, Shareholder´s Equity and BIS Ratio (R$ million)

Source: Central Bank of Brazil, a(1) Banking Consolidated I and II

s of March 2010

Bank Assets Assets Market Share Shareholders Equity

707,440,826

611,485,163

471,463,929

364,315,306

334,167,948

111,905,774

3,289,078,707

21.5%

18.6%

14.3%

11.1%

10.2%

3.4%

100.0%

37,700,851

53,909,685

43,256,154

13,731,867

65,706,181

7,098,776

303,623,623

S. Eq. Market Share

12.4%

17.8%

14.2%

4.5%

21.6%

2.3%

100.0%

Bis Ratio (%)

14.10

17.38

16.76

18.12

32.07

14.25

-

Banco do Brasil

Itaú

Bradesco

Caixa Econômica Federal

Santander

HSBC

Brazilian Banking Industry¹

Mortgage Loans - National Financial System (R$ billion)


1.3 1.41.5

1.7

2.1

2.9

Contracted volume (R$ billion) %GDP (12 months)

2.4

3.3

2004 2005 2006 2007 2008 2009

25.829.1

91.9

35.7

45.9

63.3

1H09 1H10

74.1

111.6


12

3. Banco do Brasil positioning

Profile

Banco do Brasil is the largest bank in Latin America in terms of total assets as of June 30, 2010. It is a multiple-service bank with headquarters in Brasília and has a significant presence throughout Brazil, while also conducting operations in key global economic and financial centers. To expand its operations abroad, BB announced an agreement to acquire a controlling interest in Banco Patagonia in Argentina. BB was also authorized by the U.S. Federal Reserve to perform banking activities in U.S. territory.

The Bank focuses on sustainable results and performance that are compatible with its market leadership. BB acts as an agent of Brazil's federal government to implement its policies and programs involving agribusiness, small and micro businesses and foreign trade, as well as for the development of solutions that simplify the operations and services that cater to these economic sectors.

With over 200 years of operations, BB's principal strength is in Brazil's retail banking market, and its business can be grouped generally into seven general areas: banking services, investments, asset management, insurance, pension and financing, payment services and other businesses. The main activities of each segment are as follows:

Banking services: offering banking services to all customer segments;

Investments: investments in insurers and companies operating in the pension sector;

Asset management: administration and management of third-party assets, organization and administration of investment and other funds, management of portfolios and custody of marketable securities;

Insurance: health, life, financial, vehicle and agricultural;

Pension plans and financing: sale of private pension products and administration of pension plans;

Payment services: commercial payment services under corporate benefit plans, including meal, transportation and fuel plans; and

Other businesses, including:

· Acquisitions and management of bank real estate credit and leasing operations; · Investments in electric power;· Leasing of properties and other assets;· Management of consortium groups; and· Sales, installations and maintenance of computers and other electronic devices.

Mission: To be the solution in financial services and intermediation, to meet the expectations of customersand shareholders, to strengthen the commitment between employees and the Bank, and to

contribute to Brazil's development


Total Assets (R$ billion)

Funding (R$ billion)

(1) Market share figures based on Top 50 Banks data of the Central Bank of Brazil. * As of March, 2010

(1) Market share figures based on Top 50 Banks data of the Central Bank of Brazil.* As of March, 2010

2004 2005 2006 2007 2008 2009

Banco do Brasil Key Statistics

13

19.0

17.316.8

15.6

17.2

22.0

21.618.9 19.3

20.221.5

26.3

Market Share¹ (%) BB


19.721.5*

CAGR: 23.3 %

2004 2005 2006 2007 2008 2009

521.3

708.5

367.2

296.4253,0239.0

1H09 1H10*

598.8

755.7

1H09 1H10

160.1 168.2

208.1

260.6

362.0

498.4

CAGR: 23.5 %

412.3

510.6

23.625.7*


14

Demand Deposits (US$ billion)

Loan Portfolio (R$ billion)

(1) Market share figures based on the Domestic Portfolio as disclosed by the Central Bank of Brazil

(1) Market share figures based on Top 50 Banks data of the Central Bank of Brazil.* As of March, 2010

CAGR: 26.8 %


CAGR: 13.8 %

32.9 33.5

31.9

29.0

31.632.8

29.0

35.8

40.1

51.351.9

56.5

2004 2005 2006 2007 2008 2009

49.1

59.0

1H09 1H10

33.4

33.1*

15.9 15.316.5 16.0

17.1

20.1


88.6

101.8

133.2

160.7

224.8

300.8

2004 2005 2006 2007 2008 2009

252.5

326.5

1H09 1H10

18.8

20.1


Branches

* Market share figures based on Top 50 Banks data of the Central Bank of Brazil.* As of March, 2010

21.6 22.1 21.9 21.6 22.7

24.4

15

Market Share¹ % BB

CAGR: 5.5%

2004 2005 2006 2007 2008 2009

3.7 3.9 4.0 4.04.3

4.9

1H09 1H10

5.04.9

25.6

24.8*


16

4. Financial Performance

In 1H10, Banco do Brasil recorded net income of R$ 5.1 billion and return on equity of 28.7%, which corresponds to earnings per share of R$ 1.98. Shareholders' equity increased 21.5% from the same period in 2009 to R$ 39.3 billion.

Net Income vs. ROE

Net Interest Income (NII) vs. Net Interest Margin (NIM)

15,48416,709

18,107

20,807

24,515

33,060

8.48.6

8.17.6

7.06.7

ROE % Net Income (R$ million)

NIM¹ (%) Net Interest Income¹ (R$ million)

23.026.8

32.1

22.5

32.530.7

2004 2005 2006 2007 2008 2009

3,024

4,154

6,0445,058

8,803

10,148

2004 2005 2006 2007 2008 2009

4,014

5,076

1H09 1H10

27.4 28.7

15,472

18,817

1H09 1H10

6.9

6.4

(1) Income statement with reallocations


Dividends/Interest on Own Capital (R$ million)

Shareholders’ Equity (R$ million)

Fee Income (R$ million)

17

2004 2005 2006 2007 2008 2009

3,521

4,059

2,023

2,418

1,498

954

1H09 1H10

1,605

2,052

2004 2005 2006 2007 2008 2009

29,937

36,119

24,262

20,758

16,85014,106

1H09 1H10

32,360

39,332

2004 2005 2006 2007 2008 2009

11,811

13,511

9,903

8,888

7,6496,614

1H09 1H10

6,379

7,588


18

Administrative Expenses (R$ million)

Cost / Income Ratio (%)¹

Coverage Ratio (%)¹ ²,

2004 2005 2006 2007 2008 2009

136.2

128.2127.7

112.9

102.393.1

2004 2005 2006 2007 2008 2009

16,787

23,050

15,902

13,74513,14712,595

1H09 1H10

11,221

12,441

2004 2005 2006 2007 2008 2009

45.6

40.7

46.247.5

48.1

54.2

1H09 1H10

42.143.5

1H09 1H10

134.7121.0

(1) Does not include one-off items(2) Fee Income/Personnel Expenses

,


19

5. Banco do Brasil Stock

Banco do Brasil stock ended the first half of the year quoted at R$ 24.65, for gains of 23.7% in the last 12 months and devaluation of 16.2% in the quarter. Most of the price depreciation is explained by external factors, such as the slowing of the Chinese economy, weak consumer sentiment in the United States and concern with the fiscal sustainability of certain countries in the Euro Zone. Under this scenario, not even the positive projections for the Brazilian economy were sufficient to boost the local stock market.

In June 2010, Banco do Brasil carried out a public share offering. On June 30, after the bookbuilding process, Banco do Brasil stock was priced at R$ 24.65, which was in line with the closing price on that date. A total of 396 million shares were traded in the deal, with 286 million in the primary offer and 110 million in the secondary offer.

The offer amounted to R$ 9.8 billion, including the secondary offer. In the primary offer, the sale of new shares totaled R$ 7.0 billion, which will strength the institution's capital base and support its future growth. The offer also helped BB reach a free float of 30.4%.

In December 2009, Banco do Brasil launched its first American Depositary Receipts (ADR) Level 1 program in New York. On August 2, 2010, BB had 7.5 million outstanding ADRs, quoted at US$ 17.70.

In Brazil, BB stock was traded in all sessions on the São Paulo Stock Exchange (Bovespa) in 2010, with average daily trading volume of R$ 95.7 billion in the period. The stock remained a component of various stock indexes: Ibovespa, IBrX50, IBrX, Special Corporate Governance Index (IGC), Corporate Sustainability Index (ISE) and Special Tag-Along Index (ITAG). In the portfolio for the Ibovespa valid from May to August 2010, Banco do Brasil had the 13 highest weighting.th

Ownership Structure

National Treasury

Previ

Free Float

BNDESPar

National Treasury

Previ

Free Float

BNDESPar

21.8%

2.5%

10.2%65.5% 65.3%

21.9%

2.4%

10.4%

June 30, 2009 June 30, 2010 July 31, 2010¹

National Treasury

Previ

Free Float

BNDESPar

(1) Based on post-offering figures

59.2%

30.4%

0.01%

10.4%

rd


20

In a meeting held on February 24, 2010, the Board of Directors established a 40% payout ratio (the percentage of earnings distributed to shareholders), fulfilling the policy for payment of dividends and interest on capital on a quarterly basis.

The chart below shows the performance of the Ibovespa index and Banco do Brasil stock since June 2009. In this period, BBAS3 gained 23.7%, while the Ibovespa increased 18.4%.

Performance of Banco do Brasil Stock vs. Ibovespa, Bradesco and Itau-Unibanco

Source: Economática

(1) Adjusted series considering the stock split (1:3) carried out in the second quarter of 2007.* Considering the public offering free float reaches 30.4%** Considering the public offering foreign capital share reach 16.2%

Indicators 2004 2005 2006 2007 2008 20091.24

5.80

1.63

7.58

31.5

3.7

49.01

26.0

6.9

2.8

1.71

6.93

1.82

7.40

36.1

4.4

86.36

33.7

6.9

3.4

2.44

8.38

2.50

8.59

40.0

4.6

25.17

52.8

14.8

7.2

2.04

9.80

3.10

14.88

40.0

2.7

60.44

75.3

19.6

9.9

3.44

11.66

1.26

4.28

40.0

9.3

93.57

37.7

21.5

11.3

3.95

14.06

2.11

7.52

40.0

5.3

74.77

76.3

21.8

11.8

Earnings per Share (R$)¹

Book Value per Share (R$)¹

Price/Book Value¹

Price/Earnings¹

Payout (%)

Dividend Yield (%)

Average Daily Volume (R$ million)

Market Capitalization (R$ billion)

Free Float

Foreign Capital

1H09 1H101.56

12.60

1.68

6.16

40.0

3.0

66.45

54.4

21.7

11.1

1.98

15.31

1.61

5.65

40.0

3.2

95.73

63.3

21.9*

13.0**

Jun

-09

Ju

l-0

9

Aug

-09

Se

p-0

9

Oct-

09

Nov

-09

De

c-0

9

Jan

-10

Fe

b-1

0

Ma

r-1

0

Ap

r-10

May

-10

Ju

n-1

0

Banco do Brasil Bradesco Ibovespa Itaú


21

6. Corporate GovernanceBanco do Brasil, which joined the Novo Mercado special corporate governance listing segment of the São Paulo Stock Exchange (Bovespa) in 2006, is committed to transparency, accountability, equitable treatment and social and environmental responsibility, aligning the organization's management with the interests of shareholders and society. BB has also adopted stricter corporate governance practices, and since the public offering in June, BB stock has reached a free float of 30.4%, above the 25.0% required by Novo Mercado regulations.

BB stock is also a component of the Special Tag-Along Stock Index (ITAG) and Special Corporate Governance Stock Index (IGC), which track the performance of companies with differentiated tag-along rights and corporate governance best practices, respectively.

Banco do Brasil's decisions are taken collectively at all company levels. To involve executives in the

definition and approval of strategies for the company's different businesses, Management draws on

committees, subcommittees and commissions at a strategic level, which imparts greater agility and security

to the decision-making process.

Market relations

Committees, Subcommittees and Commissions - Strategic Level

In the first half of 2010, BB participated in 34 meetings with domestic investors and analysts, five conferences and organized 16 conference calls with analysts and investors. In addition, due to the public offering, the IR Team intensified its participation in national and international roadshows, marking a presence in 14 countries and eight Brazilian cities. BB's Investor Relations program was recognized as one of the best among large companies. BB also provides up-to-date information to shareholders and analysts through its Investor Relations website (bb.com.br/ri).

Liquidy & Risk

Market

Global Risk

Business andCommunication

Superior Inquiry

AuditorsCommitee

Board Of Directors

Credit Limit

Resources

Committee

Subcommittee

Comission

Prevetion ofFinancial and

Exchange FraudOperations

Operations EmployeeAssignment

Operational Administrative

Credit Risk

OperationalRisk

Channels

WorkAgreement

Management Board Management of Assets& Liabilities

and Liquidity

Management of Assets& Liabilities

and Liquidity

InformationSecurity

InformationTechnology

Ethics Superior

States for Ethics

Cost Managementand Operational

Efficiency


22

Banco do Brasil's administration is formed by a Board of Directors, which is advised by the Audit Committee, and by the Executive Board, which in turn is formed by the Board of Officers (CEO and nine vice-presidents) and 27 statutory managing directors. The Bank also has a standing Board of Auditors.

The Board of Directors has seven members, who were elected on April 2009 for a unified term of office extending to 2011. Of the seven members, three were appointed by minority shareholders. A least two directors on the Board must be independent, in accordance with the regulations of the Novo Mercado special corporate governance listing segment.

The Shareholders Meeting in April 2009 also elected the five members of the Board of Auditors, two of whom were appointed by the minority shareholders and three by the controlling shareholder.

6.1 Organizational Structure

Nelson Henrique Barbosa FilhoChairman - Federal Government

Aldemir BendineVice-Chairman - Federal Government

Francisco GaetaniMember - Federal Government

Adriana Queiroz de CarvalhoMember - Federal Government

Henrique JägerMember - Minority Shareholders

Bernardo Gouthier MacedoMember - Minority Shareholders

Sérgio Eduardo Arbulu MendonçaMember - Minority Shareholders

Daniel SigelmannChairman

Marcos Machado GuimarãesMember

Ênio Alexandre Gomes Bezerra da SilvaMember

Clóvis Ailton MadeiraMember

Pedro Carvalho de MelloMember

Board of Directors Board of Auditors


23

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S


· A relevant portion of BB's financial assets are invested in highly liquid Brazilian government bonds · BB adopts best market practices to develop its own methodologies for rating customer credit risk.

· The credit methodologies developed and implemented by the Bank include customer risk analysis for every corporate and individual customer segment.

· BB's risk profile is dominated by credit risk, which is mitigated by the bank's strong track record in keeping asset quality above the industry average.

· Risk management is segregated from the business units.

· Global risk limits are approved by the Global Risk Committee, which is chaired by the CEO.

Policies for risk measurement and risk management are approved by the Board of Directors and are documented by the risk management unit.

25

6.2 Risk Managment

6.3 Regulatory Capital

· In Brazil, Basel II was officially introduced by the Central Bank of Brazil through Release 12,746 dated Dec.9, 2004 and later adjusted through Release 19,028 dated Oct. 29, 2009.

The timetable for implementing capital requirements was divided into stages, and initially established the use of a standardized approach (determined by the monetary authority) and ended with the use of advanced models.

Banco do Brasil intends to adopt advanced approaches for measuring and managing capital.

Bis Ratio %

Tier I Tier II

17.117.3

15.6 15.215.2

2004 2005 2006 2007 2008 2009

10.6 11.7 11.7 10.7 10.9

4.3

13.7

9.7

4.04.9

5.65.44.6

15.3

1H09 1H10

10.8

4.5

12.8

8.8

4.1


26

At the end of the first half, Banco do Brasil had 106.2 thousand employees, of which 59.0% were male

and 41.0% female. This workforce presented the following profile:

BB provided 113.6 hours of training per staff member during the year as part of its training program. In

addition, 3,759 employees were granted academic scholarships for undergraduate degrees, 5,307 for

graduate degrees, MBAs and master's degrees and 197 for language studies.

Age (%) Tenure (%) Education (%)

7. Human Resources

BB Stand -alone BNC BESC / BEP

35.7

29.2 25.4

27.5

Up to 5 years

From 6 to 10 years

From 11 to 20 years

Above 20 years

Up to 25 years

From 26 to 35 years

From 36 to 45 years

Above 45 years

46.5

21.9

6.2

21.8

0.629.3

48.3

7.6

Specialization, Master’s or Doctorate

High School

Elementary School

Bachelor’s Degree

Worksforce

79,725

83,751 82,672 81,855

86,059

103,971

14,150

2004 2005 2006 2007 2008 2009

2,818

14,027

87,126 14,150

1H09

3,148

86,316

1H10

106,241

14,150

2,752

12,797

89,194

2,878

106,241


BB offers a range of products and services that foster businesses which

directly support the country's sustainable development.

The bank provides credit lines and investment funds with environmental

attributes, such as the money market fund BB Referenciado DI Social 50.

BB is a component of the Corporate Sustainability Index (ISE) of the

BM&FBovespa.

27

8. Social and Environmental ResponsibilityCommitted to the development of communities and the country, Banco do Brasil integrates the aspects

of sustainability (economic, social and environmental) into its strategic positioning and operational

decisions in order to assure value creation over the long term.

The Bank's engagement with the principles of social and environmental responsibility has always been

part of its business practices and relationship with stakeholders, as the following table shows:

Green Protocol

BB Suports the achievement of the Millennium Development Goals

United Nations Global Pact

BB publicly disclosed its pioneer commitment to develop a Business Agenda 21

Pact to Combat Slave Labor

BB Supports the Carbon Disclosure Project

BB signs the National Pact for the Eradication of Slave Labor

Adoption of Equator Principles

BB adopts Global Reporting Initiative (GRI) guidelines in its annual report

BB lauchs its Business Agenda 21

BB took part in the 2 edition of the Pro Equity Gerder Program

Creation of the Brazilian GHG Protocol Program

BB joins Forum Amazônia Sustentável

BB ratifies its participation on the Green Protocol

Review of BB’s Agenda 21 actions for 2008-2012 period

BB performs it’s first greenhouse gas emissions inventory

Adoption of the additional platform of the Caring for Climate Global Compact

Participation in the Platform Companies for Climate (EPC)

Award: BB receives Pro-Gerder Equity Seal

BB’s Annual Report is awarded with ‘‘GRI Readers Choice Awards 2010’’

BB sings a Intention Protocol for the development of Água Brasil Program with

Agência Nacional de Águas - ANA, WWF Brazil and Fundação Banco do Brasil

1995

2000

2003

2004

2005

BB Social and Environmental Commitments History

nd

2010

2009

2008

2006

2007


28

Banco do Brasil also innovated by disclosing on a quarterly basis the highlights of its Social and

Environmental Performance, presenting historical data and analyses that give the reader a better

understanding of how sustainability permeates the company's strategy and management. For more

information go to and read Chapter 9 of the MD&A.

An important approach in the area of sustainability is the BB Sustainable Regional Development (SRD)

strategy, which fosters sustainable development in various regions of Brazil, considering their potential,

vocation and characteristics. With the SRD strategy, BB acts not only as a financial institution, but also as a

catalyst to action, encouraging economic and social players to structure urban and rural activities that

generate income for local populations, in partnership with the federal government.

www.bb.com.br/ri

(1) Due to improvements in the SRD methodology, as of 1Q10, the concepts “Beneficiaries - SRD" and “Municipalities Served”were reviewed, which led to the refinement of the strategy basis and qualification of figures.

When granting loans, BB's responsible credit policy does not permit extending credit to companies that submit their

employees to degrading tasks or companies that have any kind of involvement with the sexual exploitation of children

or the use of child labor. In project finance, credit assessment is performed based on the Equator Principles.

In 2007, Banco do Brasil became Brazil's first bank to launch “Agenda 21

Empresarial”, an agenda of commitments that guides the sustainable

performance of companies. The launch was aligned with the commitment of

nations worldwide to put into practice a plan for sustainability in this century.

BB's Agenda 21 is structured around three dimensions: administrative

practices aimed at social and environmental performance, businesses focused

on sustainable development and private social investment. The commitment to

the development of initiatives in each dimension involves several strategic

business units. For more information on BB's Agenda 21 Empresarial, go to

www.bb.com.br.

On July 2010, BB was approved to be included in the F&C Global Emerging Markets Fund.

The fund is formed by shares in companies that contribute to sustainable development in

emerging markets and demonstrate the adoption of recognized standards of corporate

governance and management of the social and environmental impacts generated by its

operations.

1H09

1H10

4,045

4,087

16,483

17,531 3,827

4,739

957,388

1,188,749

727

841

3,664

4,612

4,904

5,355

8,388

5,858

2004

2005

2006

2007

2008

2009

428

1,482

2,502

3,998

4,028

4,073

1,370

4,062

6,052

13,507

14,974

16,886

642

1,503

2,788

4,553

4,787

4,696

327

1,020

1,324

2,466

1,212

711

120

375

1,020

2,829

4,679

4,480

48

169

866

3,099

5,466

5,232

14

105

314

714

4,676

7,803

PeriodAccredited

Branches SRD

Trainings

Municipalities

Served¹SRD

Beneficiaries¹Business Plans in

implementationBB ’s Planned

Funds-R$ million

Funds invested -

R$ million

SRD

under

development

projects

16,820

70,577

230,939

725,450

1,211,368

1,094,086


http://www.bb.com.br/ri

29

9. Products and Services

The Bank's domestic loan portfolio grew by 28.2% in 1H10 in comparison with the same period of 2009,

outpacing the growth in the financial system and demonstrating its capacity and efficiency in loan

origination. Considering the Bank's total portfolio (domestic and foreign), this growth was 29.3% from

1H09.

9.1 Credit

Loan Portfolio By Client (%)

Individuals Businesses

Agribusiness Foreign

31.0

6.0

21.5

41.5

Credit Risk¹

4.6

3.63.7

5.04.7

4.3

Provision Expenses - R$ billion Provision Expenses/Loan Portfolio (%)

*Data available since 2006

Loan Portfolio (R$ million) 2004 2005 2006 2007 2008 2009

Brazil 79,537 92,612 120,975 149,366 209,693 283,560

. Individuals 16,090 18,386 23,996 31,9 98 48,811 91,791

. Businesses 33,410 38,518 51,916 65,485 97,192 125,336

- SME 13,176 15,436 18,323 24,622 34,9 00 44,920

- Other 20,235 23,082 33,593 40,863 62,292 80,416

. Agribusiness 30,036 35,708 45,063 51,883 63,690 66,434

- Individuals* - - 36,557 40,162 45,202 47,265

- Companies* - - 8,506 11,721 18,487 19,169

. Foreign 9,017 9,177 12,181 11,373 15,115 17,268

Total 88,554 101,789 133,157 160,739 224,808 300,829

1H09 1H10

239,418 307,018

68,467 101,122

103,351 135,575

39,493 47,382

63,858 88,193

67,600 70,321

47,381 47,839

20,219 22,482 13,068 19,504

252,485 326,522

2004 2005 2006 2007 2008 2009

1.7

11.6

3.5 4.5

5.7 5.4 6.8

1H09 1H10

1.7

5.9

5.7

4.2

4.1

(1) Income Statements with Reallocations


30

9.1.1 Individual

Individuals Loan Portfolio

Individuals Deliquency (%)¹

(1) Loan as reference to interest rate(2) Brazilian Banking Industry

Past due 90 BI² Past due 90 BB Past due 15 BI² Past due 15 BB

2004 2005 2006 2007 2008 2009

16.1 18.4 24.0

32.0

48.8

91.8

1H09 1H10

68.5

101.1

(1) For market share figures, from 2004 to 2006, the portfolio refers to free resources. Since 2007 we account the total loan portfolioof the BrazilianBanking Industry. Source: Central Bank of Brazil.

7.6

7.0

8.1

6.3

6.3

6.0

4.8

12.0

13.8

13.0

14.7

13.4

16.4

13.9

10.5

9.6

9.6

8.8

7.8

6.7

6.2

9.9

8.5

12.9

Dec/04 Dec/05 Dec/06 Dec/07 Dec/08 Dec/09 Jun/09 Jun/10

15.4

12.2

9.2

8.28.6

6.6

5.7

4.1

11.6

9.610.1

7.59.2

14.4

11.8

14.6

Market Share¹ Balance (R$ billion)


31

Payroll Loans (R$ Billion)¹

Vehicle Loans

Market Share (%) Balance (R$ billion)

1.2

2.7

4.8

13.2

(1) Includes results from BV since 2H09.

The strategic partnership with Banco Votorantim started on 2009 allowed BB to continue expanding its

vehicle loan portfolio.

2005 2006 2007 2008 2009¹

0.2 0.9

3.0

6.7

20.7

1H09 1H10

8.2

22.85.5

13.6

(1) Includes results from BV and BNC

2004 2005 2006 2007 2008 2009¹

1.5

3.8

8.3

11.9

17.6

36.5

1H09 1H10

29.5

40.5

8.7

12.0

17.2

18.4

22.3

33.8

32.2

32.8

Market Share² (%) Balance (R$ billion)


(2) For market share figures, from 2004 to 2006, the portfolio refers to free resources.Since 2007 we account the total loan portfolio of the BrazilianBanking Industry. Source: Central Bank of Brazil.

32

9.1.2 Businesses

Businesses Loan Portfolio (R$ billion)

Businesses Deliquency (%)¹

Other SME

Past due 90 BI² Past due 90 BB Past due 15 BI² Past due 15 BB

2004 2005 2006 2007 2008 2009

33.6 40.8

62.3

80.4

13.2

33.4 38.551.9

65.4

97.2

125.3

15.4

18.324.6

34.9

44.9

23.120.2

1H09 1H10

39.5

88.2

103.4

135.6

47.4

3.8

2.4

2.01.7

2.93.4

3.5

4.3

3.2

3.7

5.5

2.01.8

2.7

2.01.8

2.42.2

3.7

3.9

2.9

3.7

3.3

4.1

5.7

5.44.7

3.53.4

3.6

3.22.4

Dec/04 Dec/05 Dec/06 Dec/07 Dec/08 Dec/09 Jun/09 Jun/10

(1) Loan as reference to interest rate(2) Brazilian Banking Industry

63.9


33

SME¹ Working Capital Portfolio (R$ billion)

(1) Small and Micro Enterprises

2004 2005 2006 2007 2008 2009

9.1 10.2

12.9

16.9

23.6

31.3

1H09 1H10

26.6

34.9

To assure the operations of micro, small and medium customers for working capital and investment, BB

offers the Guarantee Operations Fund (FGO), an instrument that complements the guarantee already

provided by the borrower. Note that using the Fund does not relieve the company of its debt payments

and does not constitute credit insurance.

At the end of the first half of this year, 244 thousand operations amounting to R$ 7.3 billion were

formalized with FGO coverage. Transactions guaranteed by the FGO represent approximately 36.4%

of the expenditures in lines that allow the use of this guarantee.


34

9.1.3 Agribusiness

Banco do Brasil is the leader in agribusiness credit among financial institutions that are members of the

National Rural Credit System, with 60.5% market share at the end of the half year. BB is also the main

financial agent of the National Program to Strengthen Family Agriculture (Pronaf), a federal government

initiative to foster the development of family farmers and provide credit facilities to this segment.

BB's agribusiness loan portfolio represented 21.5% of the entire credit portfolio, with a balance of R$ 70.3

billion. The agribusiness loan book comprises 38.5% working capital, 24.7% marketing and 34.1%

investment operations, with the following characteristics:

Agribusiness Loan Portfolio (R$ billion)

Agribusinesses Deliquency (%)

1.5

4.0

1.9

1.8

3.2

2.2

6.1

7.0

7.0

2.0

5.3

7.4

Past Due 90 BB Required Provision/Loan Portofolio

2004 2005 2006 2007 2008 2009

30.035.7

45.1

51.9

63.7

66.4

1H09 1H10

67.6

70.3

Dec/04 Dec/05 Dec/06 Dec/07 Dec/08 Dec/09 June/09 June/10

7.6

6.1

2.6

2.3


35

Agribusiness Portfolio by Region Agribusiness Portfolio by Financed Item

Agribusiness Portfolio by Segment (R$ million)

Southeast

% of portfolio: 38.7%


South

6.9%

3.8%

3.2%

Other

58.8%

16.8%

2.6%

3.4%

2.4%

2.2% Poultry

Cattle

Soy

Corn

Sugarcane

Machines and Implements

Coffee

Rice

North


Northeast


Midwest


16.820.2

26.5

31.8

43.6

20.1

22.0

44.5

20.118.6

15.513.2

2004 2005 2006 2007 2008 2009

Investment CapitalWorking Capital

21.5

46.1

1H09

23.9

46.4

1H10


36

The Bank has mechanisms to mitigate risk in the agribusiness loan portfolio. In the 2009/2010 marketing year, as of

June 2010, 61% of loan transactions were carried out with Agricultural Insurance or Proagro (government

insurance), amounting to R$ 9.0 billion.

MarketingAgricultural Costs Agroindustrial CreditInvestment Livestock Costs

National Program to Strengthen Family Agriculture (Pronaf)

Number of Contracts (thousand) Contracted Volume (R$ billion)

894

1,1481,034 1,037

887 915

15.5%

13.6%

26.1% 31.8%

39%

61%

Insured

Not Insured

Contracted Crop 2009/2010 Agri Insurance

13.0%

2004 2005 2006 2007 2008 2009

3.6

4.95.4

5.9

6.6

8.1

1H09

3.0

1H10

3.4

The National Program to Strengthen Family Agriculture (PRONAF) is a federal government program that helps

micro and small farmers who operate by directly employing labor and their families to become part of the

agribusiness chain, providing income improvements and adding value to products and properties by modernizing

the production system and enhancing the professionalism of these farmers.

249245

Family Agriculture


37

Foreign Exchange for Imports

In the first half of 2010, BB consolidated its leadership in the export and import market, with market

shares of 30.6% and 24.8% and contracted volumes of US$ 14.2 billion and US$ 10.4 billion,

respectively

Foreign Exchange for Exports

9.1.4 Foreign Trade

Market Share (%)

Market Share (%) Contracted Volume (US$ billion)

Contracted Volume (US$ billion)

23.922.3

23.8 24.2 24.7 25.4

27.2 27.0 26.5 26.628.0

31.1

2004 2005 2006 2007 2008 2009

25.9

34.239.4

51.2 54.247.1

1H09 1H10

23.225.6

31.330.6

2004 2005 2006 2007 2008 2009

13.5 15.920.7

26.1

34.534.1

1H09 1H10

14.319.5

24.524.9


BB is the exclusive financial agent of Proex, the federal government's Export Finance Program, with

balances of US$ 166 million under the Financing type and US$ 37 million under the Equalization type,

supporting the export market with a total of US$ 203.0 million. BB is also an important player in the Exim

program of the Brazilian Development Bank (BNDES), with volume reaching US$ 219.8 million in the half

year.

38

ACC/ACE

PROEX

Supported Companies Contracted Volume - Financing (US$ million)

30,37032,116

29,21127,185

20,557

16,560

409452

337358 359

400

Number of Contracts Contracted Volume (US$ billion)

2004 2005 2006 2007 2008 2009

9.0

11.9 12.1

15.1

13.0

10.9

1H09 1H10

5.56.2

7,785

8,936

2004 2005 2006 2007 2008 2009

286.0

428.9

382.9

331.6297.0

278.3

1H09 1H10

130.5

166.0

251263


Banco do Brasil's securities portfolio reached R$ 132.2 billion in 1H10, an increase of 20.7% from the same

period in 2009. Note that derivative financial instruments represent 0.9% of total securities portfolio, or R$

1.2 billion.

39

9.2 Securities

Balance Dec/06 Dec/07 Dec/08 Dec/09 Jun/09 Jun/10

40,641

24,409

564

7,494

73,108

38,109

16,830

1,150

19,112

75,201

38,374

20,123

2,276

26,136

86,909

62,161

22,439

1,463

38,274

124,337

31,661

46,645

30,477

781

109,564

132,249

44,830

67,153

19,049

132,249

Available for trade

Available for sale

Held to maturity

Derivatives

Total

Securities Portfolio (R$ million)

Securities Portfolio by Maturity, Market Value

Dec/04 Dec/05

13,163

32,790

26,951

581

73,485

3,077

37,832

25,275

287

66,470

Balance Balance Balance BalanceShare %

Up to 1 year 1 to 5 years 5 to 10 years Over 10 years R$ million

Share % Share % Share % Total

Dec/04

Dec/05

Dec/06

Dec/07

Dec/08

Dec/09

Jun/09

Jun/10

72,208

65,771

72,476

74,073

84,612

122,715

109,040

130,902

21,348

17,116

24,057

30,945

27,232

29,640

31,277

31,311

29.6

26.0

33.2

41.8

32.2

24.2

28.7

23.9

44,187

41,900

42,039

38,197

39,465

70,531

64,016

79,737

61.2

63.7

58.0

51.6

46.6

57.5

58.7

60.9

6,233

6,189

5,164

3,518

12,543

15,720

7,301

10,925

8.6

9.4

7.1

4.7

14.8

12.8

6.7

8.3

441

567

1,217

1,413

5,373

6,823

6,445

8,929

0.6

0.9

1.7

1.9

6.3

5.6

5.9

6.8


Banco do Brasil's credibility and broad network have allowed it to maintain its leadership position in funding

operations, ending the first half with a balance of R$ 510.6 billion, up 23.8% from the same period in 2009.

40

9.3 Funding

Time Deposits (R$ billion)

11.6%

2.0%

0.05%

16.0%

37.7%

Funding Breakdown Funding Costs, 1H10

Demand Deposits

Time Deposits

Savings Deposits

Interbank Deposits

32.6%

Money Market Borrowing Notes: 1 Assuming a cumulative Selic rate in 1H10 of 4.3%2 Calculated based on the average monthly balance3 Includes deposits for investment4 Special Deposits and FAT 5 Costs do not reflect the effects of BRL appreciation on foreign liabilities 6 Core deposits = demand deposits + savings + special deposits + judicial deposits

2004 2005 2006 2007 2008 2009

49.7

63.5

76.9

85.5

149.6

193.5

1H09 1H10

185.1 192.7

Investment Deposits


0

Cost (R$ billion)

as % ofSELIC1,2

Core Deposits

Balance (R$ billion)

Time Deposits 4

Savings

Interbank Deposits 5

Demand Deposits 3

Total Deposits

Special Deposits

Judicial Deposits

Others

Total Funding

6

54.8

79.3

195.2

12.4

59.1

123.7

11.1

205.6

340.4

156.3

496.8

-

(2.5)

(7.2)

(0.4)

(1.8)

(5.0)

(0.2)

(4.7)

(9.9)

(6.7)

(16.7)

-

73.9

85.7

69.3

72.8

93.4

52.1

53.6

68.0

100.2

78.2

Open Market

BB Administração de Ativos - Distribuidora de Títulos e Valores Mobiliários (BB DTVM), a wholly owned

subsidiary of Banco do Brasil, increased its market share at the end of the first half of 2010 to 22.3 %, from

20.3% in the same period of 2009, according to the Brazilian Financial and Capital Markets Association

(Anbima). Meanwhile, the balance of assets under management increased to R$ 344.9 billion, up 17.4%

from 1H09, composed of R$ 332.4 billion in investment funds and R$ 15.0 billion in managed portfolios.

41

9.4 Asset Management

Asset Management¹

(1) Excludes BV

Investment Funds and Managed Portfolios by Investment Profile / (%)Client

14.6

14.6

12.4

54.1

Fixed Income

Others

Multi-strategy

Equities

25.9

22.3

37.4

4.8

9.6

Institutional

Wholesale

Foreign Investor

Government

Retail

21.119.7

20.219.1

18.3

20.7

Market Share (%) Total Assets (R$ billion)

2004 2005 2006 2007 2008 2009

124.0

153.6182.7

220.1246.3

306.7

1H09 1H10

239.9344.9

20.3

22.3


42

9.5 Capital Markets

Banco do Brasil operates in local capital markets through BB Banco de Investimento S.A. (BB-BI). In the first half of 2010:

stBB-BI arranged 20 fixed-income issues totaling R$5.5 billion, placing 1 in the Anbima ranking,

with market share of 20.8%.

Securities: issue of two receivables-backed investment funds (FIDC) and mortgage-backed

securities (MBS) funds and one real estate fund, amounting to R$ 397 million.

ndCustody of assets in the local market: 2 in the Anbima ranking, with R$ 487 billion in custody,

which represents market share of 25.8%

International capital markets: BB, through its brokerage firms located abroad, BB Securities Ltd

(London) and Banco do Brasil Securities LLC (New York), took part in 15 of Brazil's 32 fixed-income

issuances, considering both own and third-party funding operations. BB acted as lead manager in nine

operations and in six as co-manager, including Braskem, CSN, Magnesita, Marfrig, Minerva, Banco

Votorantim, BNDES, Fibria, Votorantim, BESI and STN, arranging a combined total of over US$ 9 billion.

Interests in subsidiaries generated earning/loss equity for the Bank of R$ 1.4 billion, an increase of 39.7% in the first half from the same period of 2009. The Bank is a shareholder in companies involved in areas related to its business and that adopt best corporate governance practices.

Private equity industry BB acts through BB-BI to provide economic and financial advisory services

to various private-equity funds that observe good principles of social and environmental

responsibility, such as:

FIP Brazil Corporate Governance: Committed capital of R$ 600 million

- Brazil FIP Sustainability: Committed capital of R$ 411 million

FIP Brazil Agribusiness: Committed capital of R$ 840 million

Since 2004, BB-BI has been an active shareholder in eight Private-Equity Funds (FIPs) and

Emerging Company Investment Funds (FMIEEs), and more recently provided advisory services to

four financial private-equity funds, of which three are in the investment period and one in the funding

phase within institutional investors, for committed capital of R$ 1.85 billion.

thStock issues: BB-BI acted as lead manager in share offerings worth R$ 327 million, placing 10 in the Anbima ranking, with market share of 2.4%


43

Since October 2009, BB is implementing a program to restructure its operations in the insurance segment in order to advance its strategy of increasing the contribution from the insurance, annuity plans and pension plan businesses to its income.

Two subsidiaries were set up: BB Seguros Participações S.A. (BB Seguros) and BB Aliança Participações S.A. (BB Aliança). In 2010:

9.6 Insurance, Pension Plans and Savings Bonds

BB Seguros is holding dealings with the Spanish Insurance Group MAPFRE in order to conclude a partnership agreement to stablish a strategic alliance in the segments of individuals, P&C and auto insurance, for a period of 20 years.

BB also continues helding negotiations without binding effetct with the Federal Government, aiming at acquiring a stake in the IRB–Brazil RE S.A., the largest reinsurer group in Latin America.

BB Seguros Participações and Grupo Icatu signed a Memorandum of Understanding in order to set a strategic partnership to the development and marketing of Savings bonds in Brazil.

BB Seguros and PFG do Brasil Ltda., part of Principal Financial Group, renewed their strategic partnership in the development and marketing of open private pension products in Brazil. On the other hand, BB Seguros holds the share of 74.995% from the total capital of Brasilprev.

BB Seguros and Sul América Companhia Nacional de Seguros signed a Sales and Purchase Agreement for the acquisition of all shares owned by Sul América (60% of common shares) on Brasilveículos Companhia de Seguros.

BB Seguros and Sul América Seguro Saúde S.A. signed a Sales and Purchase Agreement for the selling of all shares owned by BB Seguros (49.92% of total stakes) on Brasilsaúde Companhia de Seguros (“Brasilsaúde”) to Sul América Seguro Saúde.

Ranking Position AfterCorporate Reorganization


Life33rdrd 55stst 11stst

Market share:18.4%Aliança do Brasil

Non-Life66thth 22ndnd 22ndnd

Market share:13.1%Aliança do Brasil

Vehicles55thth 66thth 22ndnd

Market share :

15.7%BrasilVeículos

Annuity Plans11stst 77thth 11stst

Market share:30.2%BrasilCap

Pension Fund22ndnd 22ndnd

Market share :20.1%BrasilPrev

Auto Insurance

44

Brasil Veiculos recorded net income of R$ 14.8 million in the half, with return on average equity of

4.5%;thThe company ended the half year with market share of 8.1% and ranked 5 in the market of retained

premiums;

Supported by strong customer loyalty, the retention index ended the period at 82.7%;

The portfolio reached R$ 666 million in managed volume in the half year.

Insurance Ratio

The insurance, pension and savings bonds businesses contributed R$ 596.2 million to the overall net income ofBanco do Brasil in the first half 2010, up 19.4% from the same period in 2009.

Managed portfolio (R$ million)Vehicles Insured (thousand)

2004 2005 2006 2007 2008 2009

238.7

318.5367.0

453.3

593.7

665.3

971

578 625 676 747 807

1H09 1H10

635.7 665.6

848

1.055

Insurance Ratio¹ (%) Insurance Income (R$ million) Recurring Income (R$ million)

2005 2006 2007 2008 2009

501.0 617.6 671.9 758.5 992.2

3,441 3,665

5,880

6,6856,833

16.814.5

11.311.4

14.6

1H09 1H10

3,250

4,383

499.2 596.2

15.4

13.6

(1) The Insurance Ratio indicates the share of income from the Insurance, Pension Plans and Savings bonds in the conglomerate's overall income added by the five companies that operates in strategic segments of the insurance industry: Aliança do Brasil; Brasilveículos; Brasilprev; Brasilcap and Brasilsaúde.


Brasilsaúde's health insurance portfolio reached R$ 105.5 million in retained premiums;

101.4 thousand members at the end of the first half of 2010, with a focus on the corporate

segment;

Health insurance portfolio ended June with a managed portfolio of R$ 55.0 million.

Brasilprev ended the first six months of 2009 with net income of R$ 138.1 million, with return on

average equity of 31.2%;

Market share in private pension plans of 20.1% in tax revenues, with financial income of

R$ 1.1 billion in the first half;

Brasilprev strengthened its sales team by using agents in the retail segment.

Health Insurance

Pension Fund

Lives Insured (thousand) Managed portfolio (R$ million)

45

Aliança do Brasil's life insurance portfolio reached R$ 1.1 billion in retained premiums;

With market share of 39.8%, Aliança do Brasil is Brazil's largest rural insurer in Brazil;

Net profit of R$ 224.0 million in the first half of 2010, for return on average equity of 38.2% in the

period.

Life Insurance

2004 2005 2006 2007 2008 2009

1,351 1,417 1,748 1,791

2,105

2,866

680.6 717.1

820.1

984.5

1,139.4

1,436.7

1H09 1H10

1,270.0

1,464.0

2,373

3,640


Brasilcap maintained its leadership in the first half with market share of 24.2% in provisions and

23.0% in tax revenues;

Payment of R$ 20,135 thounsand in prizes, with 5,644 winning certificates;

In the first half, Brasilcap recorded net income of R$ 55.5 million, with annualized return on

average equity of 33.0%.

Savings bonds¹

46

Managed portfolio (R$ million)Number of Plans (Thousand)

Pension Fund

Managed portfolio (R$ million)Active Participants (Thousand)

2004 2005 2006 2007 2008 2009

7,781

1,3651,576

1,7602,062

2,598

3,197

9,65912,473

16,189

20,429

26,954

2004 2005 2006 2007 2008 2009

2,264

2,875 2,886 2,668

3,267

3,807

2,791 2,950 2,851 2,754

2,895

3,137

1H09 1H10

23,284

30,805

1H09 1H10

3,488

4,085

2,886

3,524

3,009

3,267

(1) A kind of savings bonds that guarantees holders, in addition to interest payments, the right to participate in regular prizedrawings.


47

9.7 Cards

Credit and debit cards help increase customer loyalty, while lowering costs and generating loans with higher spreads. BB expanded its market share in card revenue from 20.2 % in June 2009 to 20.3% in June 2010.

Revenues from credit cards and debit cards reached R$ 49.5 billion in the first half of 2010, up 26.2% from the same period in 2009.

Banco do Brasil ended the period with a base of 28.8 million credit cards and 57.5 million debit cards. Fee income from cards totaled R$ 1.4 billion in 1H10, 26.2% more than in 1H09, which represents 19.0% of BB's overall fee income.

Revenues (R$ billion)Debit Cards Issued (million) Credit Cards Issued (million)

*BNC figures included as of June 2009.

Partnership between BB and Bradesco - Cards

In April 27, 2010 Banco Bradesco S.A. and Banco do Brasil S.A. signed a non-binding Memorandum of Understanding to develop a new business model in the card sector. If concluded, Elo, the new holding to be created, will be the largest card company in Latin America.

Local brand with strong awareness and excellent accessibility that can be used as the

largest bancarization platform in Brazil

Issuer can leverage consumer finance business

Hybrid cards in partnership with retail franchisees

Strong brand with presence in the benefit cards market totaling more than R$ 20 billion

in transactions per year

Leverage current platform to compete in the larger pre-paid cards business with more

than R$ 90 billion in transactions per year

Broaden and strengthening of operations with retailers

Strengthening transaction capture through cross-selling

2004 2005 2006 2007 2008 2009*

24.331.6

37.9

50.1

66.2

88.6

34.3

41.349.3 55.8

68.678.0

87.3

40.041.7

47.252.7

59.3

6.99.3

14.1

21.3

25.4 28.025.4

1H09* 1H10*

84.186.2

57.0 57.5

25.4 28.027.2

39.2

49.5

Integrated Platform in the cards MarketBrand + Issuer + Preferred Acquiring


48

10.1 Customer Base

10.1.1 – Retail

To assure specialized and efficient service, customers are targeted by income, profile, investments and relationship with the institution. Banco do Brasil has adopted a segmentation model to improve the management of its customer base and to gain a better understanding of the specific needs of each company.

10. Banco do Brasil Presence

Client Base and Distribution Channels

Characteristics Benefits

Wholesale

Retail

Wholesale

Public Sector

53.3 million clients18,286 points of service§§

§§

§§

§§

§

§§

§§§

§§§

§§§

Large deposits baseLarge credit base

42.3 thousand customers

Leader in tradeOne of the leaders in

underwriting of local debt

8.1 Thousand customersJudicial depositsBNDES partnership

Low Funding CostsPayroll Loans

Consumer FinanceDatabase

ClientBusiness generationPayroll loans

Payroll loansConsumer FinanceCorporate & SMEs

The Retail segment is composed of individuals and small and micro enterprises (SMEs);

Consumer finance is the main product targeting individuals, with a portfolio of R$ 57.8 billion at the end of the first half of 2010, up 39.7 % from a year earlier;

This strong growth was due to the merger of the loan portfolios of Banco Nossa, Caixa and Banco Votorantim;

Payroll loans are responsible for 57.1% of the individuals loan portfolio.


49

10.1.2 Wholesale

The Wholesale segment offers products targeting midsized and large companies and corporate

customers;

Working capital lines for midsized and large companies and corporate customers reached R$

64.8 billion, 59.8% from the same period in 2009;

In 1H10, investment lines reached a balance of R$ 13.1 billion, growing 32.7% from the first half

of 2010;

BB's investment line drawing on BNDES/Finame funds reached a balance of R$ 9.7 billion at the end of June, up 41.6% from a year earlier;Banco do Brasil has adopted a segmentation model to improve the management of its customer base and gain a better understanding of the specific needs of each company, as the following figure shows:

10.1.3 Public Sector

Banco do Brasil is one of the government's main partners in implementing policies, programs and projects focused on regional and national development. It also develops solutions to meet specific needs in the public sector and its entire network.

BB has the largest electronic bidding system used by the public sector for public tenders. In

1H10, more than 22.8 thousand electronic bids were accepted;

Over R$ 6.5 million contracted through electronic bids;

Banco do Brasil is a processor of 7.1 thousand payroll accounts, which represents an important

instrument for gaining the loyalty of customers in the individuals segment;

Drawing on the Constitutional Fund to Develop the Midwest (FCO), BB made available R$ 1.7

billion during the first half of the year.

Revenuesup to R$ 500 thousand/year

Revenues

MediumLarge

Corporate

Industry: Commerce: From R$ 500 thousand to R$ 15 millionService: up to R$ 15 millionCooperatives and Associations: up to R$ 10 million

From R$ 500 thousand to R$ 10 million

Medium and Large-sized Companies

Small

Enterprises

Corporate

MicroEnterprises

Industry: Commerce: From R$ 15 to R$ 45 millionService: From R$ 15 to R$ 25 million

From R$ 10 to R$ 20 millionIndustry: From R$ 20 to R$ 90 millionCommerce: From R$ 45 to R$ 150 millionService: From R$ 25 to R$ 150 million

Industry: over to R$ 90 millionCommerce: over to R$ 150 millionService: over to R$ 150 million

Who

lesa

le

Ret

ail

Individuals

Revenues


50

10.2 Distribution Channels in Brazil and abroad

At the end of the first half 2010, Banco do Brasil's own service network in Brazil comprised 18.3 thousand service points. This network is segmented in accordance with the markets defined by the Bank (Retail, Wholesale, Government and Private Banking) and covers the entire country through 3.6 thousand municipalities. The number of bank branches reached 5.0 thousand in the period.

North

5.2%

21,4%

8.4%

43,9%

21,1%

Retail 249Wholesale 2Government 7

South

Southeast

Northeast

Private 2

Retail 1,004Wholesale 23Government 3

Private 10


Private 73


Private 12

Midwest

Retail 402

WholesaleGovernment 5

RetailWholesale 5Government

Private 10

(1) Others include the following Points of Service:

PAA – Advanced Service Post: points of service located in cities without bank branches, with small staffs and ATMs;PAB – Banking Service Post: unit located on the premises of companies or government offices, which requires one employee and ATMs;PAE – Electronic Service Post: structure exclusively involves automated services;SAA – Self-Service Area: ATMs installed in the main areas of the branches;PAP – Payment and Collection Post: located primarily in municipal government offices for making receipts and payments, with services provided by employees and ATMs;QSQ – Kiosk: located in commercial establishments, providing automated services.

*Since 1H09, BNC points of services were included.

Points of Service 2004 2005 2006 2007 2008 2009*

Others ¹ 10,728 10,910 11,144 11,289 11,622 13,032

Total 14,804 15,113 15,297 15,964 17,929

1H09 1H10

12,282 13,302

Branches 3,722 3,894 3,969 4,008 4,342 4,897 4,928 4,984

17,210 18,28614,450


51

When delivering services to individuals, emphasis is placed on the bank agent network that serves BB's customers as a complementary distribution channel. This type of partnership does not use the bank's physical infrastructure and provides additional points of service that enable the bank to reach additional customer segments, expand its presence and generate cost savings.

Number of bank agents (thousand)

2004 2005 2006 2007 2008 2009

2,260

1,6941,862

3,067

5,7025,335

Jun-09 Jun-10

5,480

6,463

BB Foreign Presence


52

BB uses its IT infrastructure to increase convenience and security for customers when accessing their account, offering complementary channels such as Internet Banking, Financial Manager (an Internet banking tool for businesses), POS equipment, services via telephone and fax, and mobile banking (WAP). BB also has the largest ATM network in Latin America, with 43.9 thousand machines (own network), which handle 38.9% of all transactions carried out by Banco do Brasil customers.

Transactions via Automated Channels (%)

Breakdown of Transactions (%)

10.3 Technology Structure

ATM Internet Banking - Individuals

Internet Banking - Businesses Cashier

POS Others

38.7

38.9

19.1 20.1

18.6 17.1

8.9 8.1

8.8 10.0

5.9 5.8June 30, 2009

June 30, 2010

2004 2005 2006 2007 2008 2009

88.4

89.2

90.0

91.391.1

92.0

1H09 1H10

91.1

91.9


53

In addition to its own distribution network, BB has partnerships for sharing ATMs and for the use of bank correspondents in lottery stores. Besides reducing costs with new investments and maintenance of terminals, these partnerships consolidate the powdered and national network of Banco do Brasil. Including the shared distribution network, BB has 17,937 additional points of service.

Number of ATMs

Internet Registered Clients (million)

2004 2005 2006 2007 2008 2009

39,015

40,191

39,66439,279

39,714

45,442

1H09 1H10

43,976 43,942

2004 2005 2006 2007 2008 2009

6.9

7.98.2

8.5 8.6

9.3

1H09 1H10

9.1

10.2

At the end of the first half of the year, BB had more than 693.7 thousand customers registered to use mobile banking services, with 791.8 thousand transactions in the period. Moreover, 10.2 million customers registered to use the internet banking channel. Around 37.2% of all self-service transactions in the period were carried out over the Internet.

The bank, in partnership with Visa, offers Visa Mobile Pay technology in Latin America, which allows BB customers to pay for purchases using their mobile phones. This technology, combined with the mobile banking services already offered, confirms the Bank's strategy to maintain its leadership in banking technologies.


54

Global RatingsFitch Ratings

Individual

Short-Term - Local Currency

Long-Term - Local Currency

Short-Term - Foreign Currency

Long Term - Foreign Currency

Long Term - Local Currency

Long Term - Foreign Currency

Financial Strength

Short-Term - Local Currency

Short-Term - Foreign Currency

Long-Term Debt - Foreign Currency

Long-Term Deposits - Local Currency

Long-Term Deposits - Foreign Currency

Short-Term

Long-Term

Short-Term

Long-Term

Standart & Poor´s

Moody´s

National Ratings

Fitch Atlantic Ratings

Moody´s

Classification

Classification

Classification

Classification

Classification

C/D

F3

BBB-

F3

BBB-

BBB-

BBB-

C+

P-1

P-3

Baa2

A2

Baa3

F1+(bra)

AA+(bra)

BR-1

Aaa.br

11. Market Opinion


55

Market analysts are independent professionals without ties to Banco do Brasil.

The main institutions that express opinions about Banco do Brasil are:

Main Analysts

In Brazil

BES Securities

Banif Securities

Bradesco Corretora

Itaú Securities

Credit Suisse

Goldman Sachs

BTG Pactual

Barclays Capital

BOFA Merrill Lynch

UBS

Abroad

CitigroupDeutsche BankHSBC Global

JP MorganMorgan Stanley

Santander

Institution

Institution

Espírito Santo Research Brazil

· GRI Readers' Choice Awards winner in three categories: Engage Award, Investor Award and GRI Readers' Choice Award - Best Overall

· Deutsche Bank's Straight Through Processing (STP) Excellence Award

· 35 cases awarded in 12 categories of the E-finance Award: Storage, Corporative Architecture, Technical Architecture, ATMs, Collaboration, Asset Management, Professional Inclusion, Telecommunications Infrastructure, Technology Integration, New Technologies, Image Processing and Virtualization.

· In March 2010, Banco do Brasil's portal licitações-e was selected the best electronic bidding system and the best public bidding portal in Brazil and the program with the most bid processes concluded in 2009.

· BB won the Impar Award 2010 (Preferred Brands and Regional Affinity) from Ibope and RIC Recorde (Santa Catarina)

12. Awards


56

13. Banco do Brasil Figures

Balance Sheet Items (R$ million)

2004 2005 2006 2007

Assets 239,014

252,977

296,356

367,210

Available funds

15,494

5,828

4,749

4,352

Short-term interbank investments

16,453

28,996

29,088

51,124

Securities

73,485

66,470

73,108

75,201

Securities available for trade 13,163 3,077 7,494 19,112

Securities available for sale

32,790 37,832 40,641 38,109

Securities held to maturity

26,951

25,275

24,409

16,830

Financial derivatives

581

287

564

1,150

Interbank accounts

22,106

24,404

28,180

33,445

Intrabank accounts 147 121 136 188

Loans and Leasing 74,823

85,942

113,858

138,817

Public sector

4,161

3,730

4,384

2,472

Private sector

75,773

88,551

117,840

146,324

(Allowance for loan losses)

(5,110)

(6,339)

(8,366)

(9,980)

Leasing

20

20

11

32

Other receivables

31,198

35,108

40,482

45,423

Tax Credit 8,396 6,687 8,604 13,826

Other assets

228 509 951 2,865

239,014 252,977 296,356 367,210

Deposits 115,532 137,658 158,841 188,282

Demand deposits 28,991 35,802 40,059 51,311

Savings deposits

31,069

32,844

36,714

45,839

Interbank deposits

5,768

5,383

4,878

5,144

Time deposits

49,665

63,495

76,900

85,520

Investment deposits

38

134

289

468

Money market borrowing

44,527

30,508

49,283

72,270

Funds from acceptances and securities placed 776

3,166

2,304

1,297

Interbank accounts

6

980

1,166

12

Intrabank accounts

1,725

1,973

2,397

2,428

Borrowing

16,565

4,858

3,737

2,833

Foreign borrowing

16,565

4,858

3,737

2,833

10,611

13,370

14,335

17,487

Foreign onlending

2

-

-

-

Financial derivatives

523

571

3,511

1,947

Other accounts payable

34,508

42,918

39,895

46,808

FCO (Subordinated Debt)

6,833

7,840

8,995

10,012

Unearned income

134

125

129

123

Shareholders’ Equity

14,106

16,850

20,758

24,262

Liabilities and Shareholders' Equity

Domestic onlending – official institutions

Permanent assets 5,059

5,580

5,794

6,304

-

2008 2009

521,273 708,549

7,843

168,398

124,337

38,274

62,161

22,439

1,463

26,592

295

261,783

5,667

273,801

(17,685)

4,701

95,233

21,910

2,358

17,010

708,549

337,584

56,459

75,742

11,619

193,518

229

160,821

7,362

21

3,229

6,370

6,370

31,390

99

4,724

120,848

18,553

-

36,119

5,545

119,408

86,909

26,136

38,374

20,123

2,276

21,287

228

190,882

12,471

191,589

(13,179)

2,968

83,279

16,499

1,256

9,512

521,273

270,841

51,949

54,965

14,065

149,618

243

91,130

3,479

21

2,496

7,627

7,627

22,436

98

3,895

89,312

11,772

-

29,937

1H09 1H10

598,839 755,706

9,535

132,543

132,249

44,830

67,153

19,049

1,217

64,857

110

289,075

6,145

300,028

(17,097)

4,394

101,887

22,431

2,501

18,555

755,706

343,961

59,025

81,541

10,436

192,715

243

166,603

12,232

3,034

1,783

12,016

12,016

36,308

104

3,238

137,096

21,340

-

39,332

6,212

132,438

109,564

31,661

46,645

30,477

781

29,127

102

214,906

2,816

228,995

(16,904)

3,253

87,034

21,053

1,652

14,551

598,839

310,846

49,075

69,011

7,459

185,072

228

101,508

2,673

2,677

2,045

8,536

8,536

22,626

107

2,580

112,094

14,689

-

32,360


57

Income Statement (R$ million) 2004 2005 2006 2007

Financial Intermediation Income 30,572 33,065 36,787 40,274

Loans 17,086 19,200 21,613 25,261

Leasing 89 131 173 193

Securities 11,308 12,419 13,484 12,632

Financial Derivatives (318) (385) (635) 175

Foreign Exchange Portfolio 1,095 11 539 396

Compulsory Investments

Financial Income from Insur., Pension & Sav. Bonds

Financial Income from Insur., Pension & Sav. Bonds Op.

1,313

- - - - 324.5

- - - - 892.4

- - - - 0.04 (0.59)

493.8

1,574.1

1,689 1,612 1,616

Financial Intermediation Expenses (20,364) (22,255) (25,978) (25,119)

Money Market Funds (12,978) (15,246) (16,989) (17,797)

Borrowing, Assignments and Onlending (2,865) (1,602) (1,850) (1,645)

Allowance for Loan Losses (4,521) (5,407) (7,140) (5,677)

Gross Income from Financial Intermediation 10,208 10,809 10,808 15,155

Other Operating Income (Expenses) (5,601) (3,779) (4,612) (7,881)

Service Revenues 6,607 7,648 8.887 9,902

Personnel Expenses (7,096) (7,473) (7,871) (9,161)

Other Administrative Expenses (5,466) (5,670) (5,873) (6,735)

Other Tax Expenses (1,469) (1,721) (1,825) (2,064)

Equity Int. in the results of Subs, and Affil 46 (67) 288 154

Other Operating Revenues 5,824 7,623 5,138 5,024

Other Operating Expenses (4,048) (4,120) (3,356) (5,000)

Operating Income 4,607 7,030 6,197 7,273

Non - Operating Income 130 210 120 281

Income before Taxes 4,738 7,241 6,316 7,554

Income and Social Contribution Taxes (1,340) (2,554) (504) (1,847)

Statutory Profit Sharing (373) (533) (777) (649)

Net Income

Corporate Profit Sharing

3,024 4,154 6,044 5,058

2008 2009

55,641

33,221

314

20,692

(1,283)

464

1,910

(42,822)

(25,532)

(8,685)

(8,606)

12,819

(1,150)

9,771

(8,870)

(7,917)

(2,635)

2,285

11,782

(7,605)

11,669

413

12,082

(2,145)

(1,134)

8,803

63,285

40,515

647

21,350

(1,223)

686

816

(45,052)

(30,146)

(2,510)

(12,396)

18,233

(4,641)

10,172

(11,838)

(11,212)

(3,333)

1,574

16,974

(9,327)

13,592

1,844

15,435

(3,903)

(1,385)

10,148

267.2

775

(0.61) -

244.9

909

1H09 1H10

29,854

18,465

286

10,945

(512)

15

389

(22,546)

(14,828)

(1,199)

(6,519)

7,308

(3,832)

4,811

(5,659)

(5,562)

(1,528)

(666.3)

7,018

(4,588)

3,477

1,442

4,919

(378)

(527)

4,014

36,829

24,317

445

10,839

(262)

53

1.192

(24,932)

(17,548)

(1,900)

(5,484)

11,896

(3,684)

5,600

(6,125)

(6,315)

(1,808)

78.7

6,130

(4,142)

8,212

346

8,558

(2,715)

(767)

5,076


58 Banco do Brasil - The Company 1 Half 2010st

Indicators (Income Statement with Reallocations) 2004 2005 2006 2007

Profitability

Earnings per Share (R$)¹ 1.24 1.71 2.44 2.04

Recuring ROE 22.8 22.2 19.5 26.1

ROA 1.2 1.4 1.3 1.7

NIM (%) 8.4 8.6 8.1 7.6

Productivity²

Efficiency (%) 54.2 48.1 47.5 46.2

Service Fees / Personnel Expenses (%)

93.1 102.3

112.9

127.7

Service Fees / Administrative Expenses (%) 53.1 58.0 64.3 69.3

Personnel Expenses per Employee (R$) 69,563 72,616

78,154

101,396

(Employees + Interns) per (Branches + PAA + PAB) 16.8 17.5

17.2

16.7

2008 2009

3.44

24.7

2.0

7.0

45.6

136.2

73.5

93,660

16.4

Loan Portfolio Quality

Allowance / Loan Portfolio (%) 6.1 6.6 6.5 6.4

Allowance / Ratings E + F + G + H (%)

99.5 109.2

110.5

111.7

Capital Structure

Leverage (x )

16.9 15.0

14.3

14.7

BIS Ratio (%) 15.2 17.1 17.3 15.6

Capital Market

Price / Earnings (12 months) 8.59 8.03 8.74 14.88

Price / Book Value 1.84 2.00 2.50 3.10

Market Capitalization (R$ million) 25,979 33,733 52,820 75,269

Book Value per Share (R$)¹ 5.80 6.93 8.38 9.80

6.1

107.5

17.4

15.2

4.28

1.26

37,701

11.66

3.95

25.8

1.6

6.7

40.7

128.2

68.6

108,140

16.8

6.2

114.5

19.6

13.7

7.52

2.11

76,291

14.06

(1) BB shares were traded per lot of one thousand shares until January 2004.(2) Does not consider one-off items

1H09 1H10

1.56

22.0

1.1

6.9

42.1

134.7

70.4

54,141

14.7

7.0

114.2

18.5

15.3

6.16

1.68

54,394

12.60

1.98

26.5

1.5

6.4

43.5

121.0

66.2

53,191

17.9

5.5

114

19.2

12.8

5.65

1.61

63,319

15.31

59

Argentina - Buenos Aires Calle San Martin 323, Piso 2 Caixa de Correio 2684 – MicrocentroC10004 AAG - Buenos Aires – ArgentinaPhone: 54 + 11 + [email protected]

Cayman Islands - Grand Cayman Elizabethan Square, Phase III Building 4th floor, Sheden Road George Town PO Box 1360GT Grand Cayman – Cayman IslandsPhone: 1 + 345 + [email protected]

England - London 34, King Street EC2V 8ESLondon – EnglandPhone: 44 + 207 + [email protected]

Germany - Frankfurt Eschersheimer Landstrasse, 5560322 - Frankfurt – GermanyPhone: 49 + 69 + [email protected]

Japan - Tokyo New Kokusai Building 3-4-1 Marunouchi - Chiyoda ku100-0005 – Tokyo - JapanPhone: 81 + 3 + [email protected]

Spain - Madrid Calle Jose Ortega y Gasset, 29 - 1º piso, Edifício Beatriz28006 - Madrid – SpainPhone: 34 + 91 + [email protected]

Bolivia - La Paz Avenida 16 de Julio, 1642 Caixa de Correio 1650 - El Prado - Central La Paz – BoliviaPhone: 59 + 12 + [email protected]

Chile - Santiago Avenida Apoquindo, 3001, 1º andar Las Condes06760-342 Santiago – ChilePhone: 56 + 2 + [email protected]

France - Paris 29, Avenue Kleber, 16 Arrondisement 75116 - Paris – FrancePhone: 33 + 1 + [email protected]

Italy - Milan Piazza Castello, 1, 3º andar - Centro20121 - Milan – ItalyPhone: 39 + 02 + [email protected]

Paraguay - Asuncion Calle Oliva y Nuestra Señora de La Assunción Centro Cassilla de correo 667 Paraguay - Asuncion Phone: 595 + [email protected]

USA - New York 600 Fifth Avenue, Third floor 10020 – New York (NY) – USAPhone: 1 + 212 + [email protected]

USA - Miami 2, South Biscayne Boulevard - One Biscayne Tower, Suite 3870 – Downtown 33131 - Miami (FL) – USAPhone: 1 + 786 + [email protected]

Distribution Network Abroad

Branches

105/108 Old Broad Street 4th Floor - Pinners HallEC2N 1EREngland-LondonPhone: [email protected]

701 Brickell Avenue - Suite 2610 33131 - Miami - United StatesPhone: 1 + 407 + [email protected]


60

Subsidiaries

Bolivia - Santa Cruz de La SierraAvenida San Martin, 1700 Centro Empresarial Equipetrol - Piso 4 Santa Cruz de La Sierra – BoliviaPhone: 59 + 13 + [email protected]

Japan - GunmaBandou Building, 1319-1, lida-cho Ota-shi 373-0851 - Gunma-ken – JapanPhone: 81 + 276 + [email protected]

Japan - IbarakiShirai Building 2909-1, Fuchigashira-machi Mitsukaido-shi, Joso-shi 303-0022 - Ibaraki-ken – JapanPhone: 81 + 297 + [email protected]

Japan - NagoiaKirix Marunouchi Building, 1-17-19 Marunouchi, Naka-ku - Nagoya-shi 460-0003 - Aichi-ken – JapanPhone: 81 + 52 + [email protected]

Banco do Brazil AG (Aktiengesellschaft) / Vienna – AustriaFranz Josefs-Kai 47 / 3OG1010 - Vienna – AustriaPhone: 43 + 1 + [email protected]

BB Leasing Company Ltd / Grand Cayman – Cayman IslandsAddress: C/O International Division Gered/Diope - SBS Qd. 01, Lote 32 Ed. Sede III do BB - 13º andarBrasília (DF) - Brazil CEP: 70073-901Phone: 61 + [email protected]

Japan - GifuAsahi Plaza Minokamo Station Core, Office 101-Minokamo-shi, Ota-cho 2591-1505-0041 - Gifu-Ken – JapanPhone: 81 + 574 + [email protected]

Japan - Hamamatsu111-2 Itaya-machi Hamamatsu Act Tower 1F, Shizuoka-ken 4307701 - Hamamatsu-ken – JapanPhone: 81 + 53 + [email protected]

Japan - NaganoAtago Mansion 101 - Chuo Higashi 1-5Ueda-shi 386-0013 Nagano-ken – JapanPhone: 81 + 268 + [email protected]

Paraguay - Ciudad del EsteCalle Nanawa, 107, Esquina Monsenhor Rodrigues – CentroCiudad del Leste – ParaguayPhone: 595 + [email protected]

Banco do Brazil Securities LLC / New York – United States600 Fifth Avenue, Third floor 10020 - New York (NY) – USAPhone: 1 + 212 + [email protected]

BB Money Transfers, Inc. / New York – United States600 Fifth Avenue, Third floor 10020 - New York (NY) – USAPhone: 1 + 212 + [email protected]

Sub-Branches


Representative Offices

BB Securities Ltd. / London – England7th Floor, 16 St. Martins Le Grand EC1A 4NA - London – EnglandPhone: 44 + 207 + [email protected]

Brazilian American Merchant Bank / Grand Cayman – Cayman IslandsAddress: C/O International Division - Gered/Diope - SBS Qd. 01, Lote 32 Ed. Sede III do BB - 13º andarBrasília (DF) - Brazil CEP: 70073-901Phone: 61 + [email protected]

Venezuela - Caracas Av. Francisco de Miranda Ed. Centro Lido - Torre A - Piso 9 Oficina 93A - El Rosal 1067-A Caracas – VenezuelaPhone: 58 + 212 + [email protected]

United Arab Emirates – DubaiLevel 42, Emirates Towers, Sheikh Zayed Road 31303 - Dubai - United Arab EmiratesPhone: 97 + 1 + [email protected]

Peru – LimaAvenida Camino Real 348 - Piso 9 Torre El Pilar - San IsidroLima – PeruPhone: 511 + [email protected]

Uruguay – MontevideuAv. Dr. Luis Alberto de Herrera, 1248 Complejo WTC - Torre II - Oficina 314 - Buceo 11300-000 - Montevideo – UruguayPhone: 598 + 2 + [email protected]

BB USA Holding Company, Inc. / New York - United States709 Westchester Avenue, 1 floor 10604 - White Plains (NY) – USAPhone: 1 + 212 + [email protected]

Mexico City – MexicoCalle Campos Elíseos, 345 - Piso 6 Edifício Omega Colônia Chapultepec - Polanco11560 - Mexico City (DF) – MéxicoPhone: 52 + 55 + [email protected]

China - Hong KongUnit 1305, 13th Floor, Shanghai Kerry Centre, 1515 Nanjing Road West 200040 - Shanghai - China Phone: 85 + 2 + [email protected]

Angola – LuandaBela Business Park, Edifício Empresarial Malange, Sala 503-A, Bairro Talatona Luanda – AngolaPhone: 244 + 22 + [email protected]

Panama – Panama CityAv. Aquilino de la Guardia/Calle 47 Ocean Business Plaza, Oficina 1202 Marbella 0823-0118 - Panama – Panama CityPhone: 50 + 7 + [email protected]

st

London – England105/108 Old Broad Street - 4th Floor - Pinners HallEC2N 1ER - London - EnglandPhone: 44 + 207 + [email protected]

Rua Engrácia Fragoso, 61 - Primeiro andar C Edifício Kalunga AtriumLuanda - AngolaPhone: 244 + 22 + [email protected]

Unit 903, 9th Floor, Faimont House 8 Cotton Tree Drive - CentralHong Kong - (SAR) ChinaPhone: 85 + 2 + [email protected]

61

Mexico - Mexico City


62

Associated Subsidiaries

South Korea – SeoulSuite 400-3, Business Center 8th floor, Leema Building, 146-1 Soosong-dong, Chongro-gu - 110-140 - Seul - South Korea Phone: 82 + 2 + 398- [email protected]

Shanghai – ChinaUnit 1305, 13th Floor, Shanghai Kerry Centre, 1515 Nanjing Road West 200040 - Shanghai – ChinaPhone: 86 + 21 + [email protected]

Banco do Brazil AG – Portugal / Cascais Passeio Carlos Andrade Teixeira, 7 e 8Edifício Baía Center 2765-409 - Cascais – PortugalPhone: 351 + 21 + [email protected]

Banco do Brazil AG – Portugal / Parque das Nações Av. D. João II - Lote 1.13.01 E Edifício Horizonte Tejo 1990-078 - Lisboa – PortugalPhone: 351 + 21 + [email protected]

Shared Services UnitBanco do Brazil USA Servicing Center / United States - Orlando8325 South Park Circle, Suite 140 P.O. Box 32819 - Orlando (FL) – USAPhone: 1 + 407 + [email protected]

USA – Washington1801, K Street - N.W. - Suite 71020006-1301 - Washington (DC) – USAPhone: 1 + 202 + [email protected]

Banco do Brazil AG – Portugal / Marquês de Pombal Praça Marquês de Pombal, 16, Centro 1269-134 - Lisbon – PortugalPhone: 351 + 21 + [email protected]

Banco do Brazil AG – Portugal / Porto Av. de França, 256 - Lojas 34/354050-276 - Porto – PortugalPhone: 351 + 22 + [email protected]

Business UnitItaly - Rome (Milan Business Unit)Via Barberini 29, 4º Piano, Centro187 - Rome – ItalyPhone: 39 + 06 + [email protected]


Contact List

Banco do BrasilSBS – Ed.Sede III – 13º andarInternational Division70073-901 – Brasília (DF) – Brazilwww.bb.com.br

PresidencyPhone: 55 (61) 3310.3400Fax.: 55 (61) 3310.2502

VP of Finance, Capital Markets and Investor RelationsPhone: 55 (61) 3310.3406Fax.: 55 (61) 3310.2502

VP of International Business and WholesalePhone: 55 (61) 3310.3405Fax.: 55 (61) 3310.2502

International DirectorshipPhone: 55 (61) 3310.4500Fax: 55 (61) 3310.2444

International Division - Financial Institutions DepartmentPhone: 55 (11) 3066.9081Fax: 55 (11) 3066.9089

Investor RelationsAddress: SBS – Ed.Sede III – 5th floor70073-901 – Brasília (DF) – BrazilPhone: 55 (61) 3310.3990Fax: 55 (61) 3310.3735e-mail: [email protected]


64

Notes


65

Notes


Notes


The Company - 1 Half 2010 - Banco do Brasil

Documents

Transcript of The Company - 1 Half 2010 - Banco do Brasil