4Q14 Earnings Release - BB · Banco do Brasil S.A. – Fourth Quarter 2014 Earnings 3 NPL 90 Ratio...

1

1

4Q14 Earnings

Release

2 Banco do Brasil S.A. – Fourth Quarter 2014 Earnings 2

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.


NPL 90 Ratio (2.03%) remains below the Banking Industry (2.90%)

Adjusted Net Income reached R$ 3.0 billion in 4Q14

NII grew by 8.8% compared to 2013

Administrative Expenses grew by 7.1% in 2014

Highlights


Earnings Highlights

R$ million

(1) It includes Other Operating Revenues net of Other Operating Expenses, Equity Earnings of Subsidiaries and Affiliates and Insurance, Pension Plans and Premium Bonds.

On 4Q13 On 3Q14 On 2013

Operating Revenues 18,116 18,944 20,416 68,714 76,285 12.7 7.8 11.0

Net Interest Income 11,843 12,530 13,385 46,052 50,098 13.0 6.8 8.8

Fee Income 6,177 6,363 6,797 23,301 25,070 10.0 6.8 7.6

Previ 112 228 228 598 1,348 103.6 0.0 125.3

Other Items¹ (16) (177) 5 (1,237) (230) - - (81.4)

Operating Expenses (14,048) (14,473) (15,595) (52,170) (57,903) 11.0 7.7 11.0

Administrative Expenses (8,399) (8,048) (8,694) (30,149) (32,290) 3.5 8.0 7.1

Allowance for Loan Losses (4,183) (4,571) (5,203) (15,584) (18,531) 24.4 13.8 18.9

Tax Expenses (1,273) (1,326) (1,416) (4,830) (5,305) 11.3 6.9 9.8

Legal Risk (193) (529) (281) (1,607) (1,777) 45.1 (47.0) 10.6

Non Operating Result 37 40 27 167 201 (25.6) (31.2) 19.8

Income Taxes, Statutory Profit Sharing and (1,681) (1,626) (1,829) (6,359) (7,240) 8.8 12.5 13.9

Adjusted Net Income 2,424 2,885 3,020 10,353 11,343 24.6 4.7 9.6

Adjusted ROE (%) 14.2 16.1 16.6 15.0 15.1 - - -

Net Income 3,025 2,780 2,959 15,758 11,246 (2.2) 6.4 (28.6)

ROE (%) 18.0 15.5 16.2 22.9 15.0 - - -

Chg. %4Q13 3Q14 4Q14 2013 2014


Dec/13 Sep/14 Dec/14 Chg. %

R$ billion Balance Share % Balance Share % Balance Share % On Dec/13 On Sep/14

Sources 740.6 100.0 788.1 100.0 823.2 100.0 11.1 4.4

Commercial Funding 607.2 82.0 623.5 79.1 634.6 77.1 4.5 1.8

Total Deposits 491.0 66.3 468.8 59.5 468.4 56.9 (4.6) (0.1)

Agrib. LC + Real Estate LC 82.6 11.2 113.5 14.4 118.1 14.3 42.9 4.0

Repos w/ Corporate Bonds¹ 33.6 4.5 41.2 5.2 48.2 5.8 43.5 16.9

Domestic Onlending 87.1 11.8 88.0 11.2 91.1 11.1 4.5 3.4

Foreign Borrowing² 61.1 8.3 65.6 8.3 68.5 8.3 12.1 4.4

Debt Instruments eligible for capital² 8.5 1.1 28.0 3.6 29.6 3.6 248.3 5.6

Subordinated Debt 41.9 5.7 42.4 5.4 42.8 5.2 2.0 0.8

Others Commercial Papers³ 9.5 1.3 9.6 1.2 9.1 1.1 (5.0) (6.1)

Domestic Hybrid Debt Capital Instr. 8.3 1.1 0.1 0.0 - - - -

Financial and Development Funds 7.7 1.0 9.6 1.2 10.8 1.3 41.5 13.3

Compulsory Deposits (90.7) (12.3) (78.7) (10.0) (63.3) (7.7) (30.3) (19.7)

Uses 740.6 100.0 788.1 100.0 823.2 100.0 11.1 4.4

Net Loan Portfolio (a) = (b) + (c) + (d) 645.0 87.1 684.0 86.8 707.1 85.9 9.6 3.4

Loan Portfolio (b) 623.6 84.2 662.7 84.1 687.9 83.6 10.3 3.8

Private Securities (c) 45.0 6.1 47.1 6.0 46.5 5.7 3.3 (1.2)

Allowance for Loan Losses (d) (23.7) (3.2) (25.8) (3.3) (27.3) (3.3) 15.4 6.0

Available Funds 95.6 12.9 104.2 13.2 116.1 14.1 21.4 11.4

Adjusted Net Loan Portfolio (a) - (e) 523.4 70.7 566.3 71.9 584.8 71.0 11.7 3.3

Onlending in the Country (e) 121.6 16.4 117.7 14.9 122.4 14.9 0.6 4.0

Ratio - %

Net Loan Portfolio / Total Deposits 131.4 145.9 151.0

Net Loan Portfolio / Commercial Funding 106.2 109.7 111.4

Adj. Net Loan Portfolio / Comm. Funding 86.2 90.8 92.1

Net Loan Portfolio / Sources 87.1 86.8 85.9

Sources and Uses

(1) It includes part of the balances of the Private Securities (Note 17c). (2) It Includes Foreign Borrowings, Foreign Securities, Foreign Onlendings, Subordinated debt abroad and Hybrid

Capital Instruments Abroad. (3) Apart from Subordinated Debt, from 4Q13 on, according Circular-letter 3,624/2013. (4) From 3Q14 on, includes Capital Eligible Debt reallocated to Core

Capital, as authorized by the Central Bank by Ofício 15006/2014-BCB/DEORF/DIFIN. (5) It includes Letters of Credit and Debentures.

6

Spread by Segment (%)¹ Global Spread (%)¹

6

4Q14

5.1

5.7

7.4

13.5

3Q14

5.0

5.6

7.5

13.7

2Q14

4.8

5.4

7.5

13.8

1Q14

4.7

5.2

7.2

13.2

4Q13

4.6

4.8

7.0

13.2

Agribusiness NIM Companies NIM Loan Operations NIM Individuals NIM

On 4Q13 On 3Q14 On 2013

Net Interest Income 11,843 12,530 13,385 46,052 50,098 13.0 6.8 8.8

Loan Operations Income 18,709 21,461 22,216 70,011 83,113 18.7 3.5 18.7

Funding Expenses (9,442) (11,365) (11,326) (32,518) (43,191) 20.0 (0.3) 32.8

Institutional Funding Expenses¹ (1,694) (1,897) (2,040) (6,058) (7,146) 20.5 7.6 18.0

Treasury Income³ 3,498 3,236 3,336 10,778 12,991 (4.6) 3.1 20.5

Recovery of Write-offs Loans² 719 903 1,065 3,430 3,648 48.1 17.9 6.4

Other 52 192 134 410 683 157.2 (30.0) 66.6

4Q13R$ million

Chg. %2013 20144Q143Q14

4Q14

2.6

4.3

3Q14

2.6

4.2

2Q14

2.6

4.1

1Q14

2.6

4.1

4Q13

2.8

4.3

Risk Adjusted NIM NIM

Banco do Brasil S.A. – Fourth Quarter 2014 Earnings

(1) Annualized data.

Net Interest Income and Net Interest Margin

(1) Included senior debt, subordinated debt and hybrid capital instrument and abroad (IHCD). (2) Reallocations: (I) in 1Q14, regarding the recovery of operation that was write off on the

same month; (II) in the 2Q14, adjustment of recovery from operations with credit characteristics. (3) Included interest income, profitable compulsory deposits income, tax hedge,

derivatives and other financial instruments that compensate the exchange variation in result.


Dec/14

760.9

354.1

179.7

164.9

62.1

Sep/14

733.0

342.0

175.4

158.4

57.2

Jun/14

719.0

335.3

173.3

157.2

53.2

Mar/14

699.5

323.5

169.9

150.0

56.2

Dec/13

693.1

322.3

168.2

144.8

57.8

Companies Individuals Agribusiness Offshore

46.5%

23.6%

21.7%

8.2%

46.5%

24.3%

20.9%

8.3%

12.6 12.3 9.8

18.0 19.3

12 months Growth (%)

Loan Portfolio – Broad Concept¹

R$ billion

(1) It includes private securities and guarantees provided.

8 Banco do Brasil S.A. – Fourth Quarter 2014 Earnings

Up to 2011

1Q14

2012

2013

2Q14

3Q14

Dec/14 Sep/14

23.6

17.1

30.8

7.4

12.0

9.1

Jun/14

25.6

18.6

35.6

8.4

11.8

Mar/14

28.7

21.2

41.5

8.6

Dec/13

31.5

23.9

44.6

15.2

21.5

26.3

6.4

10.5

9.4

4Q14 10.8

%

2014

37.1%

Classified Loan Portfolio¹ - by contracted period

(1) Classified Concept. It does not include BV operations.

9

On Dec/13 On Sep/14

Payroll 52.3 39.0 56.7 38.9 58.8 38.9 12.4 3.9

Salary Loans 17.7 13.1 17.9 12.3 16.8 11.1 (4.7) (6.0)

Mortgage 18.5 13.7 25.7 17.7 28.5 18.9 54.3 10.8

Auto Loans 11.9 8.8 10.5 7.2 10.6 7.0 (10.8) 0.3

Credit Cards 19.7 14.6 19.9 13.7 22.1 14.7 12.6 11.2

Consumer Finance 5.9 4.4 5.9 4.1 5.8 3.8 (1.0) (1.8)

Overdraft 2.5 1.8 2.7 1.9 2.3 1.5 (6.2) (16.0)

Microcredit 1.0 0.8 1.4 1.0 1.3 0.9 30.0 (3.3)

Other 5.0 3.7 4.9 3.3 4.8 3.2 (4.8) (1.9)

Individuals Loan Portfolio 134.3 100.0 145.6 100.0 151.1 100.0 12.5 3.8

Chg. %Dec/13 Sep/14 Dec/14Share % Share % Share %

Banco do Brasil S.A. – Fourth Quarter 2014 Earnings 9

74.6% 75.9%

R$ billion

Organic Individuals Loan Portfolio¹ ²

(1) Classified Concept.

(2) It does not include BV operations and acquired portfolios.


Mortgages (R$ billion) Auto Loans – Organic Portfolio (R$ billion)

Payroll (R$ billion)

25.5% Market Share

+54.3%

+74.0% 65.2%

Dec/13

11.9

18.7%

17.9%

63.4%

Dec/14

10.6

14.2% 20.2%

65.6%

Sep/14

10.5

17.1%

17.7%

Up to 5 years From 5 to 10 years Account Time - Over 10 years

+59.1%

Dec/14

38.8

28.5

10.3

Sep/14

35.0

25.7

9.3

Dec/13

24.4

18.5

5.9

Individuals Companies

+3.7%

Sep/14 Dec/14 Dec/13

62.0 63.1 64.2

Organic Portfolio • 88.4% Civil Servants

• 7.7% INSS’s Retirees and Pensioners

• 3.9% Private Sector Employees

Growth in lower risk lines

in 12 months


On Dec/13 On Sep/14

Working Capital 175.0 54.3 182.6 53.4 186.7 52.7 6.7 2.2

Investiments 56.4 17.5 63.8 18.7 66.9 18.9 18.6 4.8

Corporate Bonds & Notes 41.5 12.9 42.6 12.4 41.5 11.7 (0.1) (2.4)

Guarantees 20.1 6.2 19.2 5.6 21.7 6.1 7.8 13.2

Trade Finance 15.5 4.8 15.9 4.6 16.8 4.8 8.9 6.1

Mortgage 5.9 1.8 9.3 2.7 10.3 2.9 74.0 10.8

Other 7.9 2.4 8.7 2.5 10.2 2.9 29.5 17.0

Companies Loan Portfolio 322.3 100.0 342.0 100.0 354.1 100.0 9.9 3.5

Chg. %Dec/13 Share % Sep/14 Share % Dec/14 Share %

Loans to Companies – Broad Concept¹

R$ billion


12

Corporate Portfolio by Size SME – FGO and FAMPE³


+14.9%

Dec/14

25.2 3.8

21.4

Sep/14

23.5 3.6

19.9

Dec/13

22.0 3.7

18.3

+9.9%

Dec/14

354.1

251.9

102.2

Sep/14

342.0

240.5

101.5

Dec/13

322.3

222.4

99.9

Medium and Large Companies and Government SME²

SME – Time of Relationship (% of credit concession)

Dec/14

102.2

39.0%

32.7%

21.8% 6.4%

Sep/14

101.5

39.6%

30.5%

23.8% 6.1%

Dec/13

99.9

38.6%

29.2%

25.2% 6.9%

More than 10 years

From 5 to 10 years

From 2 to 5 years

Up to 2 years

Fampe FGO

+13.3%

+2.4%

in 12 months

Loans to Companies – Broad Concept¹

(1) It includes private securities and guarantees provided. (2) Companies with annual revenues up to R$ 25 million (3) Guarantee Fund Operations and a SME Guarantee Fund.

R$ billion

13

Agribusiness Loan Portfolio¹ (R$ billion)


Agribusiness

(1) It includes Rural Product Bills and guarantees provided.

.

Mitigators Use (Working Capital for Input Purchase)

R$ billion

Vintage 14/15 (Dec/14)

41.6%

58.4% Not Insured

Insured

-2.6%

+22.2%

+13.9%

Dec/14

164.9

117.7

47.2

Sep/14

158.4

110.7

47.7

Dec/13

144.8

96.3

48.5

Individuals Companies

in 12 months

14

Coverage Ratio +90 days (%)


Asset Quality

Average Risk¹ (%)

Dec/14

4.74

3.75

Dec/13

4.97

3.56

Dec/12

5.50

3.81

Dec/11

5.66

4.08

Dec/10

5.55

4.34

Banking Industry Banco do Brasil

196.46

Dec/13

191.65

165.58

Dec/12

148.74

Dec/14

195.37

163.48

Dec/11

207.64

157.25

Dec/10

212.09

174.39

Banco do Brasil Banking Industry

(1) Required Provision / Classified Loan Portfolio.

15

NPL Ratio +90 days (%)

Delinquency and Coverage Ratios

NPL 15 Days (%) NPL 90 Days (%)


Banco do Brasil Banking Industry

Dec/14

2.03

2.90

Sep/14

2.09

3.00

Jun/14

1.99

3.00

Mar/14

1.97

3.00

Dec/13

1.98

3.00

Dec/14

1.2

3.9

4.3

Sep/14

1.1

4.1

4.3

Jun/14

0.9

3.8

4.3

Mar/14

1.1

3.8

4.6

Dec/13

1.2

3.3

4.1

Agribusiness Companies Individuals

Dec/14

0.7

2.6

2.3

Sep/14

0.6

2.7

2.4

Jun/14

0.6

2.4

2.3

Mar/14

0.7

2.2

2.4

Dec/13

0.8

2.3

2.6

Individuals Agribusiness Companies

16

New NPL¹, Write Off and NPL Formation Rate

NPL Formation

(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.


Dec/14

3.81

Sep/14

3.69 3.63

4.59

Jun/14

4.16 4.62

Mar/14

3.70 3.80

Dec/13

3.06

3.89

Sep/13

3.45

4.23

Jun/13

3.97 3.99

Mar/13

3.06 2.98

Dec/12

3.23

4.28

New NPL (R$ billion) Write Off (R$ billion)

0.61

0.89 0.74

0.66 0.57 0.58

0.73 0.74 0.71

New NPL / Loan Portfolio² (%)

17

Allowance for Loan Losses (ALL) and Loan Portfolio

Allowance for Loan Losses (12 months) / Loan Portfolio

Classified Loan Portfolio – Growth by Risk Level

2.1 0.5 0.8 2.2

(0.1)

58.9

623.6

687.9

Dec/13 Dec/14 AA-C D E F G H

2.86 2.79 2.76 2.81 2.76

ALL / Loan Portfolio (%)²

(1) Average classified loan portfolio (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 (Quarterly) / Loan Portfolio

4Q14

5.2

673.3

3Q14

4.6

653.4

2Q14

4.6

640.2

1Q14

4.2

626.0

4Q13

4.2

599.8

Allowance for Loan Losses

Loan Portfolio³

R$ billion

4Q14

18.5

648.3

3Q14

17.5

628.7

2Q14

16.9

610.6

1Q14

16.5

587.5

4Q13

15.6

564.0

Allowance for Loan Losses

Loan Portfolio¹

+10.3% in 12

months

0.77 0.70 0.71 0.67 0.70

ALL / Loan Portfolio (%)⁴


18

BV – Light Vehicles1: Production per Business Channel and Delinquency

BV – Net Income

Banco Votorantim

R$ million


(1) Comprised of CDC Veículos (Autos Consumer Credit) and vans.

Vintage of the Managerial Auto Loan Portfolio

75

135 140 152

121

4Q14 3Q14 2Q14 1Q14 4Q13

27% 23% 19% 15% 11%

67% 72% 77% 83% 88%

1%2%

Mar/14

4%

Dec/13

6%

Dec/14 Sep/14 Jun/14

4%

after Sep/11 up to Jun/10 from Jul/10 to Sep/11

4Q14

3.7

0.6

3.1

4Q13

3.4

0.6

2.8

4Q12

2.9

0.6

2.3

Car dealers (R$ billion)

Multibrand car dealers (R$ billion)

6.2 7.7

5.2

NPL 90 - Managerial Loan Portfolio (%)


Fee Income

R$ million

Chg. %

On 4Q13 On 3Q14 On 2013

Fee Income 6,177 6,363 6,797 23,301 25,070 100.0 10.0 6.8 7.6

Credit / Debit Cards 1,580 1,585 1,806 5,689 6,461 25.8 14.3 14.0 13.6

Account Fees 1,030 1,056 1,051 4,120 4,045 16.1 2.0 (0.4) (1.8)

Asset Management Fees 938 1,116 1,110 3,713 4,133 16.5 18.4 (0.5) 11.3

Loan Fees 673 577 631 2,458 2,369 9.4 (6.2) 9.3 (3.6)

Collections 358 376 397 1,411 1,487 5.9 10.9 5.7 5.4

Insurance, Pension and Premium Bonds 319 333 409 1,199 1,427 5.7 28.2 22.7 19.0

Billings 239 235 253 891 944 3.8 5.9 8.0 6.0

Interbank 188 188 197 726 749 3.0 4.6 4.7 3.2

Capital Market 119 125 129 524 481 1.9 8.3 3.5 (8.1)

Fiduciary Services 101 119 116 383 445 1.8 14.6 (3.0) 16.3

Other 631 654 697 2,187 2,529 10.1 10.5 6.6 15.6

4Q13 3Q14 4Q14 2013 2014 Share %


BB Seguridade

Adjusted Net Income (R$ million) Insurance’s Premiums and Collection¹

906822

707

+28.1%

+42.6%

2014

3,223

2013

2,260

4Q14 3Q14 4Q13 (1) Source: Susep in November/14.

Insurance´s PremiumsMarket

Share %Ranking

Vehicle 15.0 2º

Life 20.6 1º

Mortgage 6.8 3º

Rural 76.1 1º

CollectionMarket

Share %Ranking

Pension Plan 38.4 1º

Premium Bond 29.0 1º


Total Turnover Net Income

542512498

+29.1%

+8.8%

Dec/14

2,031

Dec/13

1,573

4Q14 3Q14 4Q13 4Q13

59.7 25.1 34.6

+15.7%

+10.3%

2014

238.3

98.3

140.0

2013

205.9

84.2

121.7

4Q14

65.8

27.5 38.3

3Q14

59.0 23.5 35.6

Debit Cards Credit Cards

Cards

R$ billion R$ million

2014 Innovation

NEWCO

1st

Payment

Institution

in Brazil*

Digital Wallet

Fidelity Program

* January 2015: JV Authorized by CADE and Central Bank


Administrative Expenses

R$ million

Chg. %

On 4Q13 On 3Q14 On 2013

Personnel Expenses (4,641) (4,630) (4,874) (17,051) (18,445) 5.0 5.3 8.2

Other Administrative Expenses (3,758) (3,417) (3,820) (13,098) (13,845) 1.6 11.8 5.7

Expenses with Outsourced Services (750) (646) (696) (2,744) (2,644) (7.2) 7.7 (3.6)

Telecommunications and Data Processing (609) (590) (632) (2,301) (2,424) 3.8 7.2 5.4

Expenses with Premises and Equipment (576) (618) (650) (2,181) (2,433) 12.9 5.3 11.6

Security, Guard, and Transport Services (622) (588) (636) (2,043) (2,309) 2.3 8.1 13.0

Amortization and Depreciation (291) (339) (339) (1,085) (1,291) 16.2 (0.0) 19.0

Marketing and Public Relations (269) (178) (263) (754) (813) (2.4) 47.4 7.8

Other Administrative Expenses (641) (459) (604) (1,990) (1,931) (5.8) 31.7 (3.0)

Administrative Expenses (8,399) (8,048) (8,694) (30,149) (32,290) 3.5 8.0 7.1

4Q13 3Q14 4Q14 2013 2014

23 23

Cost to Income Ratio (12 months)¹

(1) Administrative Expenses / Operating Revenues. Data from the Income Statement with Reallocations.


%

44.3

Mar/14

44.3 43.1

Dec/14

44.0

Jun/14 Dec/13 Sep/14

44.1

24 24

BIS Ratio¹ ²

%

Considering the full implementation of the adjustments for Basel III, measured over December/2014³, the estimated BIS Ratio would reach 15.07% and the Tier I, 10.27%.

(1) Financial Consolidated.

(2) Methodology used since Oct. 01st., 2013, according to CMN Resolution 4.192/2013.

(3) These numbers are based on information available at the time of the simulations, which involve limitations and risks hard to foresee and hence may present different results

from those reported. Banco do Brasil’s future performance is subject to external factors, including interest rates, exchange rates and its securities portfolio market value, as well as

the performance of the domestic and foreign economic and the domestic and international’s financial systems.


BIS III Basel I and II

Dec/14

16.11

9.04

11.39

4.72

Sep/14

16.04

9.28

11.51

4.53

Dec/13

14.76

8.24

10.51

4.02

2012

14.83

10.55

4.28

2011

13.98

10.53

3.45

2010

14.08

11.02

3.06

Core Capital

Tier I

Tier II

25 25

Guidance

(1) Adjusted ROE uses estimated shareholders’ equity which includes the amount of R$ 8.1 billion related to the Instrument eligible as core capital and free from the effects of: (i) the

restatement of assets and actuarial liabilities, arising from the resolution CVM/695; and (ii) the Corporate profit sharing

(2) Commercial Funding includes Total Deposits, Agribusiness Letter of Credit, Real Estate Letters of Credit and Repos with Corporate Bonds.


(4) Allowance for Loan Losses expenses of the last twelve months / Average Classified loan portfolio for the same period.


Adjusted Return on Equity¹ 14 - 17 15.1 14 - 17

Net Interest Income 5 - 9 8.8 9 - 13

Commercial Funding² 12 - 16 4.5 5 - 9

Domestic Loan Portfolio³ - Broad Concept 12 - 16 10.0 7 - 11

Individuals 8 - 12 6.8 6 - 10

Companies 12 - 16 9.9 7 - 11

Agribusiness 16 - 20 13.9 10 - 14

Allowance for Loan Losses⁴ 2.7 - 3.1 2.9 2.7 - 3.1

Fee Income 6 - 9 7.6 7 - 10

Administrative Expenses 5 - 8 7.1 5 - 8

2014 Performance2014 Guidance 2015 Guidance

%


Contacts

Investor Relations Unit

Av. Paulista, 2.163 – 2nd Floor

01311-933 - São Paulo (SP)

Telephone: +55 (11) 3066 9110

bb.com.br/ir

[email protected]


Appendix

28. One-Off Items

29. BIS III - Capital Requirements

30. Funding

31. Foreign Borrowing

32. Loans to Individuals - Broad Concept

33. Individuals Loan Portfolio

34. Individuals Loan Portfolio - Average Rates/Tenor

35. Banco Votorantim - Asset Quality

36. Banco Votorantim - Auto Loans Portfolio

37. Loans to Companies - SME

38. Agribusiness Portfolio by Purpose

39. Agribusiness

40. Total Loan Portfolio - Risk Level

41. Renegotiated Loan Portfolio

42. Actuarial Assets (Previ) - CVM 695/12

43. Actuarial Liabilities (Cassi) - CVM 695/12

44. Amounts recognized in equity because of the adoption of CVM 695/12

45. Cards – Organization Chart

46. Distribution Network

47. Clients and Service Network Channels

48. Human Resources


One-Off Items

R$ million

Adjusted Net Income 2,424 2,885 3,020 10,353 11,343

(+) One-Off Items 602 (104) (61) 5,405 (97)

Economic Plans (56) (248) (387) (683) (1,307)

Tax Efficiency - - - 142 260

Additional ALL (267) - - (229) (143)

Provision for Agreement Committee - - - (186) -

Lawsuits Reconciliation - - - 303 -

BB Seguridade Shares Disposal (IPO) - - - 9,820 -

Expenses of BB Seguridade Shares Disposal (IPO) - - - (172) -

Extraordinary Provision for Lawsuits 401 63 46 (404) 404

Sale of Itapebi 188 - - 188 -

Refis 2013 (Tax Recovery Program) 587 - - 587 -

BV Extraordinary Provision (166) - - (166) -

Provision Legal Lawsuits - Adjust. Parameters and Policies Agreements - - - - 385

BrasilPrev: Susep Circular 457/12 e 462/13 - - 325 - 325

BrasilPrev Effect on Minority Shareholders - - (65) - (65)

Tax Eff. and Stat. Profit Sharing on One-Off Items (86) 81 20 (3,796) 43

Net Income 3,025 2,780 2,959 15,758 11,246

4Q13 3Q14 4Q14 2013 2014


Implementation Schedule

%

BIS III – Capital Requirements

2013 2014 2015 2016 2017 2018 2019

Common Equity Tier I (CET1) 4.50 4.50 4.50 4.50 4.50 4.50 4.50

Tier I 5.50 5.50 6.00 6.00 6.00 6.00 6.00

Brazilian BIS Ratio 11.00 11.00 11.00 9.88 9.25 8.63 8.00

Additional CET1 (Buffers) 0.625 a

1.25

1.25 a

2.50

1.875 a

3.75 2.5 a 5.0

CET1 + Buffers 4.50 4.50 4.50 5.125 a

5.75

5.75 a

7.00

6.375 a

8.28 7.0 a 9.5

Tier I + Buffers 5.50 5.50 6.00 6.625 a

7.25 7.25 a 8.5

7.875 a

9.75

8.5 a

11.00

Brazilian BIS Ratio + Buffers 11.00 11.00 11.00 10.5 a

11.125

10.5 a

11.75

10.5 a

12.375

10.5 a

13.0


R$ billion

Funding

On Dec/13 On Sep/14

Time Deposits 145.5 24.0 111.7 17.9 99.5 15.7 (31.7) (10.9)

Judicial Deposits 101.8 16.8 110.1 17.7 115.0 18.1 13.0 4.5

Saving Deposits 140.7 23.2 149.0 23.9 148.7 23.4 5.7 (0.2)

Agribusiness Letters of Credits 79.2 13.0 105.5 16.9 103.8 16.3 31.1 (1.7)

Demand Deposits 75.8 12.5 69.5 11.1 74.2 11.7 (2.1) 6.7

Repurchase Agreement with Private Securities¹ 33.6 5.5 41.2 6.6 48.2 7.6 43.5 16.9

Interbank Deposits 27.2 4.5 28.5 4.6 31.0 4.9 14.0 8.5

Mortgage Bonds² 3.5 0.6 8.0 1.3 14.4 2.3 311.8 79.6

TOTAL 607.2 100.0 623.5 100.0 634.6 100.0 4.5 1.8

Share %Chg. %

Dec/13 Share % Sep/14 Share % Dec/14

(1) The line Repurchase Agreement with Private Securities covers part of the balances of the Private Securities Note 17c.

(2) It includes the balance of CRI (Certificates of Real Estate Receivables.


Foreign Borrowing

US$ billion

Dec/14

51.1 0.6

3.4

8.9

17.0

21.1

Sep/14

51.4 0.8

3.2

8.4

16.7

22.4

Dec/13

51.2

2.4 3.2

10.1

15.3

20.1

Repo + Other

Individuals

Companies

Interbanking

Fixed Income and Deposit Certificates

1- Ratings were revised in October, 2013 by Moody’s.

Issue Date Volume (US$ million) Currency Term in Years Structure Rating¹

20/01/2012 1,000 USD - Perpetual BB

05/03/2012 750 USD - Perpetual BB

19/06/2012 750 USD 10 Tier II Subordinated BB+/Baa3

24/09/2012 317 JPY 3 Senior BBB / Baa2

10/10/2012 1,925 USD 10 Senior BBB / Baa2

31/01/2013 2,000 USD - Perpetual BB

25/07/2013 930 EUR 5 Senior BBB / Baa2

20/12/2013 307 CHF 5.5 Senior BBB / Baa2

26/03/2014 417 EUR 5 Senior BBB / Baa2

18/06/2014 2,500 USD - Perpetual Ba3/B+

International Bonds Issued 2012/2013/2014

32

On Dec/13 On Sep/14

Payroll 62.0 36.8 63.1 36.0 64.2 35.7 3.7 1.9

Auto Loans 35.4 21.0 33.0 18.8 32.8 18.2 (7.4) (0.6)

Salary Loans 17.7 10.5 17.9 10.2 16.8 9.4 (4.7) (6.0)

Mortgage 18.5 11.0 25.7 14.7 28.5 15.9 54.3 10.8

Credit Cards² 20.1 11.9 20.4 11.6 22.7 12.6 12.9 11.2

Consumer Finance 5.9 3.5 5.9 3.4 5.8 3.2 (0.7) (1.7)

Overdraft 2.5 1.5 2.7 1.6 2.3 1.3 (6.2) (16.0)

Other 6.4 3.8 6.7 3.8 6.6 3.7 3.8 (1.3)

Individuals Loan Portfolio 168.2 100.0 175.4 100.0 179.7 100.0 6.8 2.5



Loans to Individuals – Broad Concept¹

R$ billion

(1) It includes guarantees provided.

(2) Included Banco Votorantim Credit Card portfolio in Sep/14 and Dec/13.

79.3% 79.2%


Individuals Loan Portfolio

R$ billion

Acquired Portfolios

Market Share

(1) It includes loans portfolio acquired with co-obligation in compliance with Resolution CMN 3.533/08.

(2) It includes lines of Free Resources only.

On Dec/13On Sep/14

Auto loans 12.3 61.7 13.0 73.4 13.0 78.7 5.7 0.1

Payroll loans 7.7 38.3 4.7 26.6 3.5 21.3 (54.1) (25.3)

Total 20.0 100.0 17.7 100.0 16.5 100.0 (17.2) (6.6)


Dec/13 Sep/14 Dec/14

BB¹ Industry Share % BB¹ Industry Share % BB¹ Industry Share %

Payroll Loans 62.0 221.9 27.9 63.1 244.6 25.8 64.2 252.0 25.5

Auto loans² 34.6 200.5 17.3 32.1 187.8 17.1 31.8 187.3 17.0

Mortgage 18.5 341.5 5.4 25.7 407.0 6.3 28.5 432.5 6.6


Individuals Loan Portfolio – Average Rates/Tenor


Banco do Brasil

Auto loans

Average rate - % p.m 1.28 1.38 1.42

Average term - months 33 32 32

Mortgage

Average contracted amount - R$ thousand 136.5 105.6 113.4

Average Rate - % p.y. 8.0 7.5 7.3

Average term - months 317.0 340.0 338.0

Payroll loans

Average rate - % p.m 1.79 1.76 1.76


BV - Auto Loans

Average rate - % p.m 1.90 1.96 1.97


35

Banco Votorantim – Asset Quality – Managerial Portfolio

Delinquency and Risk(%)

New NPL¹, Write-off and NPL Formation (R$ billion)

4Q14

0.67 0.55

3Q14

0.77

0.38

2Q14

0.86 0.96

1Q14

0.83

1.31

4Q13

0.87 0.58

3Q13

0.90 0.66

2Q13

1.34

0.90

Write-off New NPL¹

1Q14

11.5

88.5

4Q13

11.1

89.3

3Q13

9.9

90.1

2Q13

10.0

90.0

4Q14

10.4

89.6

3Q14

10.8

89.2

2Q14

11.3

88.7

D-H Levels AA-C Levels

5.5 5.7 5.7 5.9 6.4 6.1 5.1

NPL + 90 days

(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.

0.98 0.67 1.64

2.17

0.94 1.04 1.36

New NPL / Loan Portfolio ² (%)


36

Average Tenor and Average Down-payment (origination)

Auto Loans Origination (R$ billion)

Banco Votorantim – Auto Loan Portfolio

4444444445

4Q14

40%

3Q14

40%

2Q14

39%

1Q14

39%

4Q13

38%

Average tenor (months) Average down payment

4Q14

3.9

0.7

3.2

3Q14

3.6

0.7

2.9

4Q13

3.7

0.9

2.8

Other Vehicles¹ Used Light Vehicles


Allowance for Loan Losses (managerial²) – R$ million

417557

408 378 293

849

156

212

-60.1%

4Q14

505

3Q14

451 74

2Q14

523 115

1Q14

714

4Q13

1,266

Retail Wholesale

(1) Light (new), Heavy (new and used), Motorcycles (new and used) and Vans (new and used).

(2) It includes provision for credit assignment with substantial risk retention, net of credit recovery.


Loans to Companies - SME

R$ billion

Loans per Segment

Products

On Dec/13 On Sep/14

Commerce 41.3 41.4 41.9 41.3 43.0 42.1 4.0 2.6

Manufacturing Industries 30.2 30.3 29.6 29.2 28.3 27.7 (6.4) (4.4)

Services Segment 28.3 28.3 30.0 29.5 30.9 30.2 9.3 3.2

Total 99.9 100.0 101.5 100.0 102.2 100.0 2.4 0.7

Dec/13Chg. %

Share % Sep/14 Share % Dec/14 Share %

On Dec/13 On Sep/14

Working Capital 65.3 65.4 65.1 64.1 64.6 63.2 (1.1) (0.7)

Investment 32.4 32.4 34.3 33.8 35.5 34.8 9.7 3.5

Foreign Trade 2.1 2.1 2.1 2.0 2.1 2.0 (2.7) (0.6)

Total 99.9 100.0 101.5 100.0 102.2 100.0 2.4 0.7



Agribusiness Portfolio by Purpose

R$ billion

On Dec/13 On Sep/14

Investment 57.9 40.0 69.0 43.5 74.8 45.3 29.1 8.4

Work. Cap. for Input Purchase 43.5 30.0 47.8 30.2 49.5 30.0 13.9 3.4

Agroindustry 34.6 23.9 31.3 19.8 30.3 18.4 (12.4) (3.1)

Crop Trading 6.0 4.2 6.4 4.1 6.5 3.9 7.6 0.9

Other 2.1 1.4 2.3 1.4 2.6 1.6 24.3 13.4

Classified Loan Portfolio 144.1 99.5 156.8 99.0 163.6 99.2 13.6 4.3

Rural Product Bills and Guarantees 0.7 0.5 1.6 1.0 1.3 0.8 78.2 (20.4)

Loan Portfolio - Broad Concept 144.8 100.0 158.4 100.0 164.9 100.0 13.9 4.1



Agribusiness

R$ billion Loan Portfolio per Customer Size¹

(1) Loan portfolio – broad concept.

Segment Dec/13 Share % Sep/14 Share % Dec/14 Share %

Medium and Large Sized 62.8 43.4 73.6 46.4 77.8 47.2

Businesses 41.7 28.8 39.7 25.0 39.2 23.8

Small 32.8 22.6 36.4 23.0 39.0 23.7

Cooperatives 6.7 4.7 7.2 4.6 7.6 4.6

Rural Prod. Bills and guarantees 0.7 0.5 1.6 1.0 1.3 0.8

Total 144.8 100.0 158.4 100.0 164.9 100.0


Total Loan Portfolio¹ - Risk Level

(1) Classified Loan Portfolio. Included Banco Votorantim Credit Card portfolio in Sep/14 and Dec/13.

R$ million

Balance Provision Share% Balance Provision Share% Balance Provision Share% BI

AA 346,908 - 55.6 377,220 - 56.9 395,935 - 57.6 37.5

A 102,077 510 16.4 105,009 525 15.8 104,323 522 15.2 32.8

B 118,150 1,181 18.9 120,179 1,202 18.1 125,117 1,251 18.2 16.1

C 25,538 766 4.1 25,857 776 3.9 26,149 784 3.8 6.8

D 4,006 401 0.6 4,172 417 0.6 3,860 386 0.6 2.0

E 7,541 2,262 1.2 8,950 2,685 1.4 9,729 2,919 1.4 1.1

F 2,899 1,450 0.5 3,265 1,632 0.5 3,716 1,858 0.5 0.6

G 2,873 2,011 0.5 3,349 2,344 0.5 3,332 2,332 0.5 0.5

H 13,614 13,614 2.2 14,670 14,670 2.2 15,752 15,752 2.3 2.6

Total 623,607 22,196 100.0 662,670 24,251 100.0 687,911 25,804 100.0 100.0

AA-C 592,673 2,458 95.0 628,265 2,503 94.8 651,523 2,557 94.7 93.1

D-H 30,934 19,738 5.0 34,406 21,749 5.2 36,388 23,246 5.3 6.9



Renegotiated Loan Portfolio¹

R$ million

BB Consolidated

4Q13 3Q14 4Q14

Credits Renegotiated 9,375 9,254 14,564

Renegotiated overdue Loans 683 1,081 2,052

Renovated 8,692 8,173 12,512

Credits Renegotiated by Delay - Changes

Initial Balance 8,389 8,659 8,952

Contracts 683 1,081 2,052

Interest Received and Appopriated (360) (414) (219)

Write-Off (520) (374) (554)

Overdue Renegotiated Loan Portfolio 8,192 8,952 10,232

Allowance for Loan Losses Balance 4,934 5,362 5,931

NPL + 90 days 1,408 1,629 1,446

Indicators - %

All. for Loan Losses / Loan Portfolio 60.2 59.9 58.0

NPL + 90 days / Loan Portfolio 17.2 18.2 14.1

All. for Loan Losses Balance/NPL + 90 days 350.3 329.1 410.1

(1) Table according Notes 10 (Credit).


Actuarial Assets (Previ – Plano I) - CVM 695/12

R$ million

4Q13 3Q14 4Q14

(a) Fair Value of the Plan's Assets 144,421 141,679 135,146

(b) Present Value of Actuarial Liabilities (113,523) (122,205) (122,885)

(c) Surplus BB = [(a) + (b)] x 50% 15,449 9,737 6,130

(d) Actuarial Assets (Initial Period) 6,655 9,737 10,083

(e) Anticipated Financial Results - Monthly 112 228 228

(f) Contributions of Funds 762 117 163

(g) Reversal of Contribuição and Destinação Funds 819- -

(h) Half-year Adjustment on Shareholders Equity 7,100-

(4,343)

(i) Actuarial Assets (Period End) = (d) + (e) + (f) + (g) + (h) 15,449 10,083 6,130


Actuarial Liabilities (Cassi) - CVM 695/12

R$ million

4Q13 3Q14 4Q14

(a) Fair Value of the Plan's Assets - - -

(b) Present Value of Actuarial Liabilities (6,334) (5,790) (5,830)

(c) Deficit BB = [(a) + (b)] (6,334) (5,790) (5,830)

(d) Acturial Liabilities (Initial Period) (7,360) (5,790) (5,873)

(e) Amounts recognized in statement of income (230) (195) (195)

(f) BB - Amount paid 167 113 157

(g) Amount Recognized in Half-Yearly Adjust-Shareholders' Eq. 1,090 - 81

(h) Actuarial liabilities (Period End) = [(d) + (e) + (f) + (g)] (6,334) (5,873) (5,830)


Amounts recognized in equity – CVM 695/2012

R$ million

Dec/13 Previ Plano 1 Cassi Others Plans Total

Valuation Adjustments 7,100 1,090 259 8,449

Tax Effects (3,038) (436) (104) (3,578)

Effects on Shareholders Equity 4,062 654 155 4,870

Jun/14 Previ Plano 1 Cassi Others Plans Total

Valuation Adjustments (6,905) 786 (153) (6,271)

Tax Effects 2,955 (315) 61 2,701

Effects on Shareholders Equity (3,950) 472 (91) (3,570)

Dec/14 Previ Plano 1 Cassi Others Plans Total

Valuation Adjustments (4,343) 81 (6) (4,268)

Tax Effects 1,858 (33) 2 1,828

Effects on Shareholders Equity (2,485) 49 (4) (2,440)


Cards – Organization Chart

BB Adm.

Cartões

100,0 %

PARTICIPAÇÕES

SERVIÇOSCBSS

49,99%

66,64%

28,65%

100,0%

CARTÕES

100,0 %

BB

Banco do Brasil

BB Banco

de Investimentos

100,0 %

40,95%

50,1%

100%

100%100,0%

PROMOTORA

100,0% 100,0%100,0%


Global Presence

Nordeste 32.4%

Centro Oeste 26.7%

Norte 28.9%

Sul 24.8%

Sudeste

20.1%

(1) Banking Agents and Postal Bank branches

Quantity of Bank Branches

(Regional Market Share)

Total = 23.9% Market Share in Brazil

Brazil Total Service Network Dec/14

Own Service Network 18,956

Branches 5,524

MaisBB Network¹ 15,538

Banco Postal 6,191

Shared Service Network 34,641

Total 69,135

Branches 12

Sub-branches 4

Representative Offices 10

Subsidiaries and affiliates 16

Shared Services Units 2

Business Units 1

Banco do Brasil in the World

Presence in 25 Countries


Clients and Service Network Channels

BB Digital – Transactions¹ in 2014 Clients

Automated Teller Machines (thousand) BB Digital – Mobile¹ (million transactions)

61.6 million Clients

11.2 million Savers

2.2 million SMEs

2.3 million INSS’s Pensioners

R$ 1.1 tri (35.0%)

R$ 2.0 tri (65.0%)

Other Chennels³

BB Digital²

4.1 billion (40.4%)

6.1 billion (59.6%)

Total Volume Total Transactions

Dec/14

65.6

16.8

4.6

44.2

Sep/14

65.5

16.1

5.3

44.0

Jun/14

64.6

15.3

5.4

44.0

Mar/14

64.0

14.6

5.3

44.1

Dec/13

63.1

14.0

5.0

44.1

ATM: BRB + CEF ATM: Banco 24h ATM

(1) Salary loans transactions, Insurance, Payments, MoneyTransfers and account balance

(2) ATM, mobile and internet

(3) Branches, Agents in Country, Banco Postal and CABB

2014

3,145.2

2013

1,193.9

2012

338.5

2011

100.0

(1) Time Series = 2011


Human Resources

Profile of Staff Members

Changes of BB’s Staff (thousand)

Education’s Level

Dec/14

116.9 5.3

111.6

Dec/13

117.8 5.6

112.2

Dec/12

121.8 7.6

114.2

Dec/11

122.4 8.6

113.8

Dec/10

118.9 9.9

109.0

Interns Employees

58.5%

41.5%

Dec/13 Dec/14

Male Female

58.5%

41.5% 30.1%

46.0%

23.5%

Dec/13 Dec/14

32.7%

44.6%

22.4%

0.4% 0.3%

Specialization, Master’s and Doctorate

Others

High School

College

4Q14 Earnings Release - BB · Banco do Brasil S.A. – Fourth Quarter 2014 Earnings 3 NPL 90 Ratio...

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