This will - Banco do Brasil

Transcription

Performance Analysis 1Q09
This report contains expectations, planned synergies, growth estimates, results forecasts and future
strategies references and statements related to Banco do Brasil, its subsidiaries, associated
companies and affiliates. Although these references and statements reflect management believes
they involve imprecision and hard risks to predict, leaving room for results or consequences
different from those anticipated and discussed here. These expectations highly depend on market
conditions, on Brazil’s economic performance, and on banking and international markets
deevelopments. Banco do Brasil will not be held responsible for updating any estimate contained in
this report.
This report tables and charts present rounded off financial figures in R$ million. The rounding used
complies with Regulation 886/66 of Fundação IBGE: if the last digit is equal to or higher than 5, the
last remained digit is increased by one unit; if the last digit is lower than 5, it is discarded and the
digit before it is maintained. Variations, both nominal and in percentage, were calculated using
numbers in units.
Summary
Index of Tables ..........................................................................................................................................6
Index of Figures.........................................................................................................................................9
Presentation .............................................................................................................................................11
Summary of Results................................................................................................................................12
1 – Economic Environment ....................................................................................................................25
2 – BB Securities .....................................................................................................................................27
2.1 Shares .........................................................................................................................................27
2.2 Warrants .....................................................................................................................................30
2.3 Performance of the Shares .......................................................................................................31
3 – Corporate Governance......................................................................................................................35
4 – Other Information ..............................................................................................................................37
5 – Summarized Financial Statements ..................................................................................................39
5.1 Summarized Balance Sheet......................................................................................................39
5.2 Summarized Corporate Law Income Statement .....................................................................41
5.3 Income Statement with Reallocations .....................................................................................42
5.3.1 Details of the Reallocations...................................................................................................43
6 - Balance Sheet Analysis .....................................................................................................................47
6.1 Breakdown .................................................................................................................................47
6.2 Analysis of Assets.....................................................................................................................48
6.3 Liquidity Analysis ......................................................................................................................49
6.4 Securities Portfolio....................................................................................................................50
6.5 Loan Portfolio ............................................................................................................................51
6.5.1 Individual Loan Portfolio ..................................................................................................54
6.5.2 Business Loan Portfolio ...................................................................................................56
6.5.3 Agribusiness Loan Portfolio ............................................................................................59
6.6 Tax Credits .................................................................................................................................68
6.7 Analysis of Liabilities ................................................................................................................69
6.8 Deposits and Money Market Funding......................................................................................71
6.8.1 Foreign Borrowing ............................................................................................................73
7 – Analysis of Results ...........................................................................................................................74
7.1 Net Interest Income ...................................................................................................................74
7.2 Analysis of Investments............................................................................................................77
7.3 Analysis of Funding ..................................................................................................................80
7.4 Analysis of Volume and Spread ...............................................................................................81
7.5 Provision for Credit Risk...........................................................................................................82
7.5.1 Retail Loan Portfolio .........................................................................................................87
7.5.2 Commercial Portfolio ........................................................................................................91
7.5.3 Agribusiness Portfolio ......................................................................................................92
7.5.4 Foreign Trade Loan Portfolio ...........................................................................................96
7.5.5 Foreign Loan Portfolio and Others ..................................................................................97
7.6 Fee Income .................................................................................................................................98
7.6.1 Revenues from Account Fees ..........................................................................................99
7.6.2 Asset Management ..........................................................................................................100
7.6.3 Cards.................................................................................................................................102
7.6.4 Collections .......................................................................................................................104
7.7 Administrative Expenses ........................................................................................................105
7.7.1 Personnel Expenses .......................................................................................................106
7.7.2 Other Administrative Expenses .....................................................................................108
7.7.3 Distribution Network .......................................................................................................109
7.7.4 Automated Channels.......................................................................................................111
7.7.5 Productivity – Coverage Ratios .....................................................................................113
7.8 Operating Income ....................................................................................................................115
7.9 Net Value Added ......................................................................................................................116
8 – Risk Management ............................................................................................................................117
8.1 Risk Management ....................................................................................................................117
8.1.1 Market Risks.....................................................................................................................117
8.1.2 Liquidity Risk ...................................................................................................................125
8.1.3 Credit Risk........................................................................................................................127
8.1.4 Operating Risk .................................................................................................................131
8.2 Capital Structure......................................................................................................................133
8.2.1 Shareholders’ Equity.......................................................................................................133
8.2.2 Regulatory Capital ...........................................................................................................134
8.2.3 Economic Capital.............................................................................................................140
9 – Social and Environmental Performance .......................................................................................142
9.1 Employee Relations.................................................................................................................143
9.1.1 Characteristics of Workforce .........................................................................................143
9.1.2 Education and Professional Development ...................................................................145
9.1.3 Value Added to Employess ............................................................................................147
9.1.4 Rotation of Staff Members..............................................................................................148
9.2 Eco-efficiency ..........................................................................................................................149
9.2.1 Annual Use of Water in the Main Buildings ..................................................................149
9.2.2 White Paper – Annual Use ..............................................................................................150
9.2.3 Automated Transactions without Use of Paper ...........................................................151
9.2.4 Use of Toner.....................................................................................................................152
9.3 Social Environmental focused Business ..............................................................................153
9.3.1 Sustainable Regional Development – DRS...................................................................153
9.3.2 Microcredit .......................................................................................................................154
9.3.3 Family-run Agriculture – PRONAF.................................................................................155
9.3.4 Credit with RSA – Other Programs ................................................................................156
9.3.5 Other Business with Social Environmental Attributes ................................................157
9.3.6 Long-term Relationship – Quality in Customer Assistence........................................158
9.4 Investor Market Recognition ..................................................................................................159
10 – Strategic Investments ...................................................................................................................160
10.1 Information .............................................................................................................................160
10.2 Insurance, Pension Plans and Capitalization .....................................................................161
10.2.1 Income Statement by Line of Business ......................................................................162
10.2.2 Combined Ratio .............................................................................................................163
10.2.3 Brasilveículos ................................................................................................................164
10.2.4 Brasilsaúde ....................................................................................................................165
10.2.5 Aliança do Brasil............................................................................................................166
10.2.6 Brasilcap.........................................................................................................................167
10.2.7 Brasilprev .......................................................................................................................168
10.3 Acquisition, Incorporations and Strategic Partnership .....................................................169
10.3.1 Transactions in the Period ...........................................................................................169
10.3.2 Negotiations in Progress ..............................................................................................173
11 – Financial Statements.....................................................................................................................176
11.1 Summarized Balance Sheet..................................................................................................176
11.2 Summarized Corporate Law Income Statement .................................................................178
11.3 Income Statement with Reallocations .................................................................................179
Index of Tables
Table 1. Main Balance Sheet Itens ...........................................................................................................13
Table 2. Credit Portfolio.............................................................................................................................14
Table 3. Credit Portfolio – Organic Growth ...............................................................................................15
Table 4. Income Statement with Reallocations (R$ million)......................................................................17
Table 5. Main Results Indicators ...............................................................................................................17
Table 6. NII by business line .....................................................................................................................18
Table 7. Annualized NIM ...........................................................................................................................19
Table 8. Deliquency Ratios........................................................................................................................20
Table 9. Allowance for Loan Losses over Loan Portfolio ..........................................................................20
Table 10. Cost / Income Ratio ...................................................................................................................21
Table 11. Recurring Items .........................................................................................................................22
Table 12. Strategic Investments (combined information)..........................................................................23
Table 13. Observed 1T09 and Guidance 2009 .........................................................................................24
Table 14. Main Macroeconomic Indicators................................................................................................26
Table 15. Shareholding Breakdown ..........................................................................................................27
Table 16. Distribution of Dividends/Interest on Own Capital.....................................................................27
Table 17. Shareholders by Range of Shares Owned................................................................................28
Table 18. Free Float by Range of Shares Owned.....................................................................................28
Table 19. Breakdown of the Series “C” Warrant Holders..........................................................................30
Table 20. Series “C” Warrants...................................................................................................................30
Table 21. Expected Dilution of Capital ......................................................................................................30
Table 22. Other Information.......................................................................................................................37
Table 23. Summarized Balance Sheet – Assets .......................................................................................39
Table 24. Summarized Balance Sheet - Liabilities....................................................................................40
Table 25. Summarized Corporate Law Income Statement .......................................................................41
Table 26. Income Statement with Reallocations (R$ million)....................................................................42
Table 27. Reallocations – Other Operating Income / Expenses ...............................................................44
Table 28. Fiscal Effects and Statutory Profit Sharing on Extraordinary Items .........................................46
Table 29. Breakdown of Assets.................................................................................................................48
Table 30. Liquidity Balance .......................................................................................................................49
Table 31. Securities Portfolio by Category ................................................................................................50
Table 32. Securities Portfolio by Maturity - Market Value .........................................................................50
Table 33. Acquired Portfolios and Interbank Deposits with Credit Guarantee..........................................52
Table 34. Loan Portfolio ............................................................................................................................52
Table 35. Credit Portfolio – Organic Growth .............................................................................................53
Table 36. Individual Loan Portfolio ............................................................................................................55
Table 37. Business Loan Portfolio.............................................................................................................56
Table 38. ACC/ACE Average Volume per Contract..................................................................................57
Table 39. SME Credit Products .................................................................................................................57
Table 40. Exports ......................................................................................................................................60
Table 41. Brazil’s participation on Global Agribusiness ............................................................................60
Table 42. Agribusiness Loan Portfolio by Region .....................................................................................61
Table 43. Agribusiness Loan Portfolio by Purpose ...................................................................................61
Table 44. Agribusiness Loan Portfolio by Product ....................................................................................62
Table 45. Agribusiness Loan Portfolio by Financed Items ........................................................................62
Table 46. Funds Released for the 08/09 Crop by Customer Size.............................................................62
Table 47. Equalizationable Resources from the Loan Portfolio ................................................................64
Table 48. 2008/2009 Crop Plan ................................................................................................................66
Table 49. Costs – Transaction Profile .......................................................................................................66
Table 50. Breakdown of Tax Credit...........................................................................................................68
Table 51. Liabilities....................................................................................................................................69
Table 52. Sourcers and Uses ....................................................................................................................69
6 - Banco do Brasil – MDA 1Q09
Table 53. Foreign Borrowing .....................................................................................................................73
Table 54. Foreign Issues ...........................................................................................................................73
Table 55. Net Interest Income ...................................................................................................................74
Table 56. Revenues from Loans Net of Exchange Impact (Res. 2,770)...................................................74
Table 57. Analysis of Volume (Earning Assets) and Quarterly Spread – 4Q08 and 1Q09.......................75
Table 58. Margin, Net of Interest and Profit Margin ..................................................................................75
Table 59. Revenues from Loans Net of Exchange Impact (Res. 2,770)...................................................77
Table 60. Securities Income......................................................................................................................78
Table 61. Avg Balance of the BS accounts and info. on interest rates - Earning assets (quarterly) ........79
Table 62. Avg Balances of the BS accounts and info. on int rates – Int.Bearing Liabilities (quarterly) ....80
Table 63. Int. increase and decrease (Inc. and Exp.) due to changes in Volume and Rates (quarterly) .81
Table 64. Net Financial Margin .................................................................................................................82
Table 65. Allowance for Loan Losses Expenses over Portfolio ................................................................82
Table 66. Loan Portfolio by Level of Risk..................................................................................................83
Table 67. Deliquency Ratio - %.................................................................................................................85
Table 68. Average Portfolio Risk...............................................................................................................86
Table 69. Retail Loan Portfolio by Level Risk ...........................................................................................87
Table 70. Changes in the Allowance - Retail ............................................................................................88
Table 71. Commercial Loan Portfolio by Level Risk .................................................................................91
Table 72. Changes in the Allowance - Commercial ..................................................................................91
Table 73. Agribusiness Loan Portfolio by Level Risk ................................................................................92
Table 74. Changes in the Allowance - Agribusiness.................................................................................92
Table 75. Portfolio With and Without Roll Over – Agribusiness ................................................................93
Table 76. Rates of the Agribusiness Portfolio ...........................................................................................94
Table 77. Foreign Trade Loan Porfolio by Level Risk ...............................................................................96
Table 78. Changes in Allowance – Foreign Trade ....................................................................................96
Table 79. Foreign Loan Portfolio by Level Risk ........................................................................................97
Table 80. Other Transactions Portfolio......................................................................................................97
Table 81. Fee Income................................................................................................................................98
Table 82. Investment Funds and Managed Portfolios by Customer .......................................................101
Table 83. Investment Funds and Managed Portfolios by Type...............................................................101
Table 84. Fee Income from Cards...........................................................................................................103
Table 85. Commercial Income ................................................................................................................105
Table 86. Personnel Expenses ...............................................................................................................106
Table 87. Other Administrative Expenses ...............................................................................................108
Table 88. Distribution Network ................................................................................................................109
Table 89. Wholesale Pillar Branches ......................................................................................................110
Table 90. Distribution Network Abroad....................................................................................................110
Table 91. Coverage Ratios......................................................................................................................113
Table 92. Operating Income....................................................................................................................115
Table 93. Net Value Added .....................................................................................................................116
Table 94. Balance in Foreign Currency...................................................................................................118
Table 95. Consolidated BB VaR..............................................................................................................121
Table 96. Foreign Network's VaR............................................................................................................121
Table 97. International Trading Porfolio’s VaR........................................................................................122
Table 98. VaR for the International Trading ............................................................................................123
Table 99. Sensitivity to Interest Rate.......................................................................................................124
Table 100. Concentration of the Loan Portfolio on the 100 Largest Borrowers ......................................129
th
Table 101. Concentration of the Loan Portfolio of the 100 Largest Borrowers in relation to RE ..........129
Table 102. Concentration of the Loan Portfolio by Macro-sector............................................................130
Table 103. Monitoring of Operational Loss .............................................................................................131
Table 104. Shareholders’ Equity .............................................................................................................133
Table 105. BIS Ratio – Financial Conglomerate .....................................................................................136
Table 106. Main accounts of the PEPR quota (Economic Financial Conglomerate)..............................136
Table 107. Allocated capital for operational risk by line of business.......................................................137
Table 108. PRE for Market Risk by Risk Factor......................................................................................137
Table 109. Changes in Composition of BIS Ratio...................................................................................138
Table 110. Fixed Asset Ratio ..................................................................................................................139
Table 111. Economic Capital...................................................................................................................140
Table 112. Distribution of Economic Capital in the Loan Portfolio ..........................................................140
Table 113. Distribution of Economic Capital in the Loan Portfolio ..........................................................141
Table 114. VaR by Risk Factor ...............................................................................................................141
Table 115. Growth in the number of scholarships granted .....................................................................145
Table 116. Employee Training – Annual Flow.........................................................................................146
Table 117. Quarterly Average Expense per Employee (Statement with Reallocations).........................147
Table 118. Expenses with Statutory Porfit Sharing.................................................................................147
Table 119. Employee Rotation ................................................................................................................148
Table 120. Use of Water .........................................................................................................................149
Table 121. Use of Paper..........................................................................................................................150
Table 122. Sustainable Regional Development (DRS) ...........................................................................153
Table 123. Microcredit operations ...........................................................................................................154
Table 124. Credit with RSA - Other Programs .......................................................................................156
Table 125. Investment funds with SER criteria .......................................................................................157
Table 126. Complaints registered in the Central Bank............................................................................158
Table 127. Interest in the capital of companies.......................................................................................160
Table 128. Insurance, Pension Plans and Capitalization........................................................................161
Table 129. Income Statement by Line of Business.................................................................................162
Table 130. Brasilveículos Data................................................................................................................164
Table 131. Brasilsaúde Data ...................................................................................................................165
Table 132. Aliança do Brasil Data ...........................................................................................................166
Table 133. Brasilcap Data .......................................................................................................................167
Table 134. Brasilprev Data ......................................................................................................................168
Table 135. BNC Equity Highlights ...........................................................................................................169
Table 136. BNC – Highlights of the Statement of Income.......................................................................170
Table 137. BNC Loan Portfolio................................................................................................................171
Table 138. BNC Loan Portfolio by Level of Risk .....................................................................................171
Table 139. BNC Deliquency Ratios.........................................................................................................172
Table 140. BNC Operating and Structural Highlights..............................................................................172
Table 141. BNC Result Index Highlights .................................................................................................172
Table 142. Banco Votorantim – Performance Highlights ........................................................................173
Table 143. Patrimonial Highlights............................................................................................................174
Table 144. Loan Portfolio by Level of Risk..............................................................................................174
Table 145. Loan Portfolio – Deliquency ..................................................................................................175
Table 146. Vehicle Portfolio.....................................................................................................................175
Table 147. Operational and Structure Highlights ....................................................................................175
Table 148. Balance Sheet – Assets (R$ million) .....................................................................................176
Table 149. Balance Sheet – Liabilities (R$ million) .................................................................................177
Table 150. Summarized Corporate Law Income Statement (R$ million)................................................178
Table 151. Income Statement with Reallocations (R$ million)................................................................179
Index of Figures
Figure 1. Earnings per Share (R$) ............................................................................................................12
Figure 2. ROE and Recurring ROE ...........................................................................................................12
Figure 3. Dividends and Interest on Own Capital (R$ million) ..................................................................13
Figure 4. BIS Ratio ....................................................................................................................................16
Figure 5. Total Distribution of the Free Float.............................................................................................28
Figure 6. Equity Held by Foreign Investors ...............................................................................................29
Figure 7. BB Shares vs. Ibovespa.............................................................................................................31
Figure 8. BBAS3 in Ibovespa ....................................................................................................................32
Figure 9. Average amount traded – BBAS3 ..............................................................................................32
Figure 10. Average financial volume – BBAS3 .........................................................................................33
Figure 11. Market Ratios ...........................................................................................................................34
Figure 12. Committee organogram ...........................................................................................................36
Figure 13. Earning Assets vs. Interest Bearing Liabilities .........................................................................47
Figure 14. Breakdown of Assets ...............................................................................................................48
Figure 15. Liquidity Balance ......................................................................................................................49
Figure 16. BB Domestic Portfolio Growth Rate vs. SFN ...........................................................................51
Figure 17. Agribusiness Participation in GDP and in Labor Market..........................................................59
Figure 18. Trade Balance (FOB) ...............................................................................................................59
Figure 19. Production vs. Planted Area.....................................................................................................60
Figure 20. Agribusiness Loan Portfolio by Customer................................................................................63
Figure 21. Agribusiness Loan Portfolio by Funding Sources ....................................................................63
Figure 22. Equalization Revenues and Weighting Factors .......................................................................64
Figure 23. Agricultural Insurance and Proagro..........................................................................................65
Figure 24. Evolution of contracted operations with mitigation...................................................................65
Figure 25. Price/cost relation between soybean and corn ........................................................................67
Figure 26. Deposits and Market Funding ..................................................................................................71
Figure 27. Market Share of BB Funding....................................................................................................72
Figure 28. NIM Analysis ............................................................................................................................75
Figure 29. NIM by Loan Portfolio...............................................................................................................77
Figure 30. Securities Portfolio by Index (Multiple Bank) ...........................................................................78
Figure 31. Allowance for Loan Losses Expenses over Portfolio ...............................................................82
Figure 32. Allowances Breakdown ............................................................................................................83
Figure 33. CLP/CT BB vs. BI.....................................................................................................................84
Figure 34. Allowance/Past Due Loans +90 days – BB x SFN ..................................................................85
Figure 35. Quarterly Vintage .....................................................................................................................89
Figure 36. Annual Vintage .........................................................................................................................89
Figure 37. Annual vintage - Vehicle Financing Portfolio - Arena I.............................................................90
Figure 38. Annual vintage - Vehicle Financing Portfolio - Arena II............................................................90
Figure 39. Stratified Agribusiness Portfolio ...............................................................................................95
Figure 40. Customer Base.........................................................................................................................99
Figure 41. Asset Management ................................................................................................................100
Figure 42. Credit and Debit Cards...........................................................................................................102
Figure 43. Card Revenues ......................................................................................................................103
Figure 44. BB Billings Volume.................................................................................................................104
Figure 45. Changes in Commercial Income ............................................................................................105
Figure 46. Changes in Workforce............................................................................................................106
Figure 47. Productivity Ratios .................................................................................................................107
Figure 48. Total Distribution Network ......................................................................................................109
Figure 49. Automated Teller Machines ...................................................................................................111
Figure 50. Costumer Access Options......................................................................................................112
Figure 51. Coverage Ratios.....................................................................................................................113
Figure 52. Productivity Ratios .................................................................................................................114
Figure 53. Business vs. Expenses ..........................................................................................................114
Figure 54. Changes in Foreign Exchange Exposure ..............................................................................119
Figure 55. Composition of Banco do Brasil's assets and liabilities in the country ..................................119
Figure 56. Net Position ............................................................................................................................120
Figure 57. Financial Consolidated BB VaR .............................................................................................120
Figure 58. Consolidated Abroad Network's VaR.....................................................................................121
Figure 59. Fixed Interest Rate Portfolio's VaR ........................................................................................122
Figure 60. VaR for the International Trading portfolio .............................................................................123
Figure 61. Liquidity Reserve - Domestic Treasury ..................................................................................125
Figure 62. DRL Indicator .........................................................................................................................126
Figure 63. Liquidity Reserve - International Treasury .............................................................................126
Figure 64. Measuring and management instruments..............................................................................127
Figure 65. BIS Ratio – Economic Financial Conglomerate .....................................................................137
Figure 66. Employees Age ......................................................................................................................143
Figure 67. Aged Bracked.........................................................................................................................144
Figure 68. Level of Education..................................................................................................................146
Figure 69. Transactions without use of paper .........................................................................................151
Figure 70. Toner consumption – in units .................................................................................................152
Figure 71. PRONAF Portfolio / Proger Rural...........................................................................................155
Figure 72. BBAS3 participation in ISE, ITAG and IGC............................................................................159
Figure 73. Combined Ratio......................................................................................................................163
Presentation
The Management Discussion and Analysis (MD&A) presents Banco do Brasil (BB) economic/financial
situation. Geared toward market analysts, stockholders and investors, with quarterly periodicity, this report
addresses topics such as the economic environment, BB’s shares performance, corporate governance
practices, and risk management. There are separate analyses of the capital structure and the results.
Moreover, in conformity with the Triple Bottom Line concept, we present the highlights of our SocialEnvironmental Performance - RSA, with the purpose of allowing the monitoring of our activities on a
quarterly basis, evidencing the generation of value of these initiatives to our shareholders and other
stakeholders.
The reader will also find eight period historical series tables of the Summarized Balance Sheet, the
Summarized Corporate Law Income Statement, the Income Statement with Reallocations, the Analytic
Spread, and other information about profitability, productivity, loan quality portfolio, capital structure,
capital market, and structural data.
Considering the strategic transactions relevance announced in 2008 second half (acquisitions, mergers
and partnerships), we maintain main information details related to the companies associated with
business in course and to transactions already executed, evidencing the transactions impact on BB's
results and producing a (pro forma) simulation of how the Bank's main indicators would be like if all the
companies were consolidated.
From this report on, all the financial statements and management analyses developed using this
information will be based on the "Economic Financial Consolidation" view, which establishes the
consolidation of all the companies belonging to the economic group, regardless the controlling interest, in
proportion to interest in the total capital. Heretofore the Management Discussion and Analysis contained
the financial companies consolidation only. For comparability, we inform that 2008 results also respect
the same vision.
At the end of the report we present the Financial Statements and Explanatory Notes for the quarter under
analysis.
ON-LINE ACCESS
The Management Discussion and Analysis can also be read through Banco do Brasil’s Investor Relations
website. Further information about the Bank is also available there, such as: Corporate Governance,
news, frequently asked questions, a download center which contains versions of this report for the
Adobe® Reader® software. Also general information, balance sheet analysis, and complete financial
statements; an Excel historical series; presentations to the market; Social-Environmental Responsibility
Report; Social Balance Sheet; Results Conference Calls, and others are available there.
LINKS OF INTEREST
Banco do Brasil S.A.
Investor Relations
bb.com.br
bb.com.br/ri
Summary of Results1
BB earns R$ 1.7 billion in the quarter
Banco do Brasil recorded net income of R$ 1.665 billion in the first quarter, a drop of 29.1% in relation to
the same period of the previous year. The result corresponds to Return on Equity (ROE) of 23.8%, and
earning per share equal to R$ 0.65. Not taking into account the extraordinary effects, recurring income
amounted to R$ 1,357 million, 12.9% below the amount recorded in the first quarter of 2008 and 16.5%
below the amount recorded in the previous quarter.
Net income per share was R$ 0.65 for the quarter
BB recorded net income per share of R$ 0.65 in the quarter, a sum 43.4% lower than that recorded in the
previous quarter.
1.15
0.92
0.43
0.55
0.49
2Q07
3Q07
4Q07
1Q08
0.65
0.73
2Q08
3Q08
0.65
4Q08
1Q09
Figure 1. Earnings per Share (R$)
Recurring Return on Equity in line with the Guidance
The result for the quarter corresponded to an annualized Return on Equity (ROE) of 23.8%, as compared
to 47.4% in the previous quarter and 43.5% in 1Q08.
Recurring Return on Equity, that does not consider extraordinary items in its calculation methodology, was
19.1% at the end of the quarter, in line with the estimates disclosed to the market for 2009, sinalizing that
this indicator should end the year between 19% and 22%.
47.4
43.5
29.8
32.3
23.6
27.6
27.9
33.6
24.5
23.8
30.5
20.9
2Q07
26.3
22.2
3Q07
4Q07
24.6
1Q08
2Q08
Recurring ROE - %
19.1
3Q08
4Q08
1Q09
ROE - %
Figure 2. ROE and Recurring ROE
1
The information in these executive summary and in the management discussion and analysis report are presented in the economic
perspective which have, besides the financial companies of the Conglomerate, the proportional shares in non-financial affiliated
companies. For comparability reasons, the 2008 numbers are shown in the same perspective.
Bank maintained distribution of 40% of net income to shareholders
The amount earmarked for shareholders came to R$ 666 million in the quarter, equivalent to 40% of the
net income (payout). Of this total, R$ 448 million were distributed as interest on own capital (JCP) and R$
218 million as dividends.
1.178
939
427
2Q07
546
487
3Q07
4Q07
1Q08
658
747
2Q08
3Q08
666
4Q08
1Q09
Figure 3. Dividends and Interest on Own Capital (R$ million)
Consolidation of Nossa Caixa contributes toward vigorous expansion of Total Assets
Total assets ended the quarter at R$ 591.9 billion, recording growth of 13.6% in the quarter and 42.9% in
12 months. The consolidation of Banco Nossa Caixa, which shares control acquisition was effected in
1Q09, helped to add R$ 54.3 billion in assets to BB, being R$ 22.6 billion in Securities, R$ 12.6 billion in
credit operations and R$ 19.1 billion in other assets.
In the quarter, Securities Portfolio presented the higher growth among total assets, 27.3% in the period.
The loan portfolio, in amplified concept that includes guarantees provided and private securities held in
the portfolio and the consolidation of Banco Nossa Caixa, attained R$ 254.5 billion, growth of 7.3% in the
quarter and 41.3% in the year.
Even if the effects of the consolidation of Nossa Caixa are segregated, total assets would have exhibited
growth of 3.1% in the quarter and 29.8% in the year.
Table 1. Main Balance Sheet Itens
Var. %
R$ million
Mar/08
Dec/08
Mar/09
On Mar/08
On Dez/08
Total Assets
404,872
521,273
591,925
42.9
Credit Portfolio
172,760
224,808
241,926
40.0
7.6
81,490
86,909
110,594
35.7
27.3
10.4
Securities
Short-term Interbank Investments
13.6
72,689
119,408
131,796
81.3
189,751
270,841
305,002
60.7
12.6
Demand Deposits
44,142
51,949
47,276
7.1
(9.0)
Saving Deposits
48,112
54,965
70,567
46.7
28.4
6,247
14,065
8,406
34.6
(40.2)
Deposits
Interbank Deposits
90,939
149,618
178,487
96.3
19.3
Money Market Borrowing
Time Deposits
99,716
91,130
106,452
6.8
16.8
Shareholder’s Equity
25,407
29,937
30,859
21.5
3.1
Loan Portfolio reaches R$ 242 billion and grows more than the industry's
The loan portfolio ended the quarter at R$ 241.9 billion, growth of 40.0% in 12 months and 7.6% in the
quarter. The domestic loan portfolio grew 40.0% in the year and 8.3% in the quarter, surpassing the
industry's growth of 25.0% in 12 months and 1.1% in the quarter. This great growth in the quarter is due,
at most, to the consolidation of Banco Nossa Caixa effects, which added R$ 13.8 billion to BB credit
portfolio.
The individuals loan portfolio grew expressive 67.0% in 12 months, and 25.3% in the quarterly
comparison, attaining R$ 61.1 billion. The main highlights in the quarter were Payroll Loans (CDC
Consignment) and Vehicle Financing, with growth in the year of 44.1% and 97.7%, respectively. Payroll
loan represents 30.1% of personal loans in the Bank.
The businesses total loans (segments of Micro and Small Businesses - MPE and Medium and Large
Companies) attained R$ 101.8 billion, expansion of 47.2% in relation to 1Q08 and of 4.7% in relation to
4Q08. We emphasize the lines of working capital, which sustained this performance with growth in twelve
months of 54.7%.
The agribusiness portfolio ended the year in R$ 64.3 million, registering a small decrease of 0.3% in the
quarter and a growth of 13.7% in the year.
Table 2. Credit Portfolio
Chg. %
R$ million
Loan Portfolio
Brazil
Individuals
Payroll Loan
Vehicles Loan
Consumer Finance backed by Direct Deposit
Mar/08
Dec/08
Mar/09
s/Mar/08
s/Dec/08
172,760
224,808
241,926
40.0
7.6
162,261
209,693
227,201
40.0
8.3
25.3
36,620
48,811
61,138
67.0
12,772
17,626
18,411
44.1
4.4
3,544
6,694
7,005
97.7
4.7
3,205
3,906
4,309
34.5
10.3
SMEs
25,675
34,900
37,403
45.7
7.2
Business (Medium and Large Enterprises)
43,443
62,292
64,373
48.2
3.3
Agribusiness
56,524
63,690
64,287
13.7
0.9
Individuals
40,684
45,202
46,252
13.7
2.3
Companies
15,839
18,487
18,035
13.9
(2.4)
10,499
15,115
14,726
40.3
(2.6)
Abroad
Besides the effects due to the consolidation of Nossa Caixa, the takeovers of BESC System and of Banco
do Estado do Piauí, besides the acquisition of loan portfolios from other financial institutions, also
contributed toward the growth of the loan portfolio. In order to permit better comparability, we segregated
these effects and evidenced the organic growth of the portfolio. After these adjustments, the total portfolio
grew 1.6% in the quarter and 29.8% in 12 months. The individual portfolio grew 5.6% in the quarter and
29.7% in 12 months. Business portfolio presented organic growth of 1.6% in the quarterly comparison and
42.6% in the annual comparison. Only the agribusiness portfolio and the foreign portfolio kept the
peformance previously informed.
Table 3. Credit Portfolio – Organic Growth
R$ billion
Chg. %
Mar/08
Dec/08
Mar/09
172,265
220,199
223,621
29.8
1.6
. Individuals
36,125
44,366
46,864
29.7
5.6
. Businesses
69,118
97,028
98,540
42.6
1.6
. Agribusiness
56,524
63,690
63,492
12.3
(0.3)
. Foreign
(2.6)
Banco do Brasil
On Mar/08 On Dec/08
10,499
15,115
14,726
40.3
Nossa Caixa
9,700
12,896
13,825
42.5
7.2
. Individuals
6,715
9,126
9,964
48.4
9.2
. Businesses
2,411
2,978
3,065
27.1
2.9
574
792
795
38.6
0.5
. Agribusiness
BESC
744
754
807
8.5
7.0
Portfolio Acquisition
495
3,854
3,673
642.2
(4.7)
. Car Loan
. Payroll Loan
Total
-
744
737
-
(0.9)
495
3,110
2,935
493.2
(5.6)
172,760
224,808
241,926
40.0
7.6
BIS Ratio Shows a Comfortable Capital Margin
Bank's capital ratio (K) ended the quarter at 15.0% against 15.2% in the previous quarter and 14.7% in
1Q08.
Among the factors that contributed toward the behavior of the ratio in the quarter, we emphasize the
consolidation of Banco Nossa Caixa (with an impact in the Referential Equity of R$ 1,664 million), the
changes in the operating risk, the growth of the credit operations without retail characteristics, the
incorporation of profits (deduce the amount of dividends / interest on own capital paid) in the amount of
R$ 999 million and the subordinated indebtedness in the amount of R$ 2,613 million. The presented BIS
ratio equals to a Referential Equity of R$ 12.8 billion.
15.9
15.7
15.6
5.3
5.2
4.9
10.6
10.5
10.7
Jun/07
Sep/07 Dec/07
14.7
13.0
4.1
4.2
8.8
4.5
10.2
8.4
Mar/08
Jun/08
Tier I
Figure 4. BIS Ratio
12.5
Tier II
15.2
15.0
4.3
4.6
10.9
10.4
Sep/08 Dec/08
Mar/09
Analysis of Results
The table below, extracted from the statement of income with reallocations, presents the main highlights
of income/expenses. The breakdown of reallocations is in Chapter 5.3. of the Performance Analysis
report.
Table 4. Income Statement with Reallocations (R$ million)
R$ million
Income Statement with Reallocations
Financial Intermediation Income
Quarterly Flow
1Q08
4Q08
Chg. %
1Q09
On 1Q08
On 4Q08
11,046
20,412
15,260
38.2
(25.2)
Loan and Lease
7,257
11,253
9,089
25.2
(19.2)
Securities
3,571
8,097
5,730
60.5
(29.2)
(5,477)
(13,335)
(8,275)
51.1
(37.9)
5,568
7,077
6,985
25.4
(1.3)
Financial Intermediation Expenses
Net Interest Income
Allowance for Loan Losses
(1,534)
(2,240)
(2,491)
62.4
11.2
Net Financial Margin
4,034
4,837
4,494
11.4
(7.1)
Fee Income
2,915
3,058
2,943
1.0
(3.7)
Contribution Margin
6,415
7,305
6,819
6.3
(6.7)
(3,561)
(4,515)
(3,973)
11.6
(12.0)
Administrative Expenses
Personnel Expenses
(1,801)
(2,301)
(2,129)
18.2
(7.5)
Other Administrative Expenses
(1,734)
(2,043)
(1,801)
3.9
(11.8)
2,854
2,791
2,846
(0.3)
2.0
Commercial Income
Legal Claims
6
(97)
(95)
-
(1.8)
Labor Lawsuits
(132)
(129)
(102)
(22.7)
(21.1)
Other Revenues and Expenses
(734)
(774)
(1,152)
56.8
48.9
Income Before Taxes
2,529
2,380
2,115
(16.4)
(11.1)
Income and Social Contribution Taxes
(669)
(557)
(577)
(13.8)
3.7
Statutory Profit Sharing
(301)
(198)
(181)
(39.8)
(8.3)
Recurring Income
1,559
1,626
1,357
(12.9)
(16.5)
789
1,318
309
(60.9)
(76.6)
2,347
2,944
1,665
(29.1)
(43.4)
Extraordinary Items
Net Income
Table 5. Main Results Indicators
Ratios - %
1Q08
4Q08
1Q09
NIM
7.2
7.2
6.6
Allowance / Loan Portfolio
3.6
3.6
3.8
Cost / Income Ratio (1)
44.7
45.7
43.3
Recurring ROE
27.6
24.5
19.1
Tax Rate
30.0
25.5
29.8
(1)
The segregated effects in the period are considered
Net Interest Income - Business expansion offsets reduction in spreads
The Net Interest Income (NII) exhibited a downslide of 1.3% in the quarter, but with robust expansion of
25.4% in the annual comparison. The slight downslide in the quarter is due basically to the lower quantity
of business days in the period, to the cut in the benchmark annual overnight Selic rate organized by the
Central Bank, to the seasonal reduction in funds from demand deposits and to a slight deterioration in the
spreads. On the other hand, these factors were lessened by the growth in average earning assets, which
recorded expansion of 8.1% in the period, already disregarding the effects of the consolidation of Banco
Nossa Caixa.
The table below presents Net Interest Income, emphasizing the contribution of the loan portfolio in its
main business lines, computing the revenues and the costs associated with these operations (also
discounting the fundraising cost). In addition there is separation of the amounts corresponding to revenue
with recovery of receivables written of as loss, originally accounted for as revenue from loans, and the
amounts of revenues relating to compulsory deposits with remuneration. The other revenues comprised
mainly of income from treasury, resulting from transactions with securities, derivatives and foreign
exchange complete the formation of the Net Interest Income.
Table 6. NII by business line
Quarterly Flow
R$ million
1Q08
4Q08
Chg. %
1Q09
on 1Q08
on 4Q08
Net Interest Income
5,568
7,077
6,985
25.4
Loans
3,647
4,725
4,919
34.9
4.1
Individuals
1,907
2,273
2,316
21.4
1.9
Businesses
1,081
1,598
1,686
56.0
5.5
659
854
917
39.1
7.3
1,921
2,352
2,066
7.6
(12.2)
Agribusinesses
Others
(1.3)
Remunerated Compulsory
428
424
176
(59.0)
(58.6)
Written-offs Recovery
422
467
357
(15.6)
(23.6)
1,070
1,462
1,534
43.3
4.9
Others
The growth of the average loan portfolio permitted an increase in revenue from loans. These revenues
amounted to R$ 4,919 million, recording growth of 4.1% in the quarter and of 34.9% over the same prioryear period. Income from operations Businesses and Agribusiness, which grew 5.5% and 7.3%
respectively, merits special emphasis.
Among the other sources of income, we emphasize a substantial reduction on the Remunerated
Compulsory Deposit line, due to the steps taken by the Central Bank over the course of 4Q08, to the
effect of reducing the percentages that determine the sum to be paid on the deposit base of SFN.
Aforesaid steps were taken to provide liquidity to the system and to maintain the offer of credit to the
economy. These measures implied a reduction in the remuneration from compulsory deposits, with
counter entry in greater availability of funds, mainly targeting loans, but also acquisitions of loan portfolios
of other institutions, performance of interbank investments guaranteed by loan portfolios, as well as
treasury operations. This movement explains the growth of Other income, which includes interbank
investments and transactions with securities.
Table 7. Annualized NIM
Annualized NIM - %
1Q08
4Q08
1Q09
9.8
9.8
9.7
Individuals
24.1
21.6
20.5
Companies
6.9
7.3
7.2
Agribusinesses
5.0
5.6
5.9
Others
7.1
9.7
6.8
Global NIM
7.2
7.2
6.6
Loan Operations
The table above details the spread of Loan Operations by portfolio. The total spread of these operations
ended the quarter at 9.7%, which is equivalent to a decrease of 10 base points in relation to the previous
quarter and in relation to the same period of 2009.
The spread of business with Individuals has been exhibiting the greatest downslide in relation to the total
portfolio. This behavior is basically due to three factors:
–
–
–
Alteration in the mix of the portfolio, with an increase of the share of operations of lower risk and,
therefore, lower spread. This is the case of business with Payroll Loans and Vehicle Financing;
Effect of the acquisitions of loan portfolios of other institutions. These operations have a smaller
spread as they feature the co-obligation of the assigning financial institutions;
Realignment of rates to customers, keeping track of the cuts organized in the benchmark annual
overnight Selic rate by the Central Bank;
The spread of the corporate client portfolio presented a minor downslide in the quarter, but remains at a
higher level than that presented in the same period of 2008. The Agribusiness portfolio in turn maintained
the spread recovery trend, started in the previous quarter, coherent to the reduction in the agribusiness
credit operations, which presented lower spreads.
In addition to the abovementioned factors, the reduction of the Bank's global spread is explained by the
alteration of the mix of assets and liabilities in the quarter. Average interest-bearing liabilities grew 9.2%,
against growth of 8.1% of average earning assets. Furthermore, there was also a change in the
composition of average assets. Loan and Leasing Operations, an item that provides the best return
among these assets, grew at a slower pace, and reduced their share in relation to the total Earning
Assets, from 49.7% in 4Q08 to 47.4% in 1Q09.
Quality of the portfolio - Default behavior is better than that of the market
The deterioration in the economic scenario served to worsen the default of the loan portfolio. The
percentage of operations past due for more than 90 days attained 2.7% at the end of 1Q09, higher than the
percentage of 2.4% observed both in 1Q08 and in 4Q08. The average risk, measured by the ratio between
the provisions required and the portfolio balance, also exhibited growth, and ended 1Q09 at 5.7% and 5.4%
in the previous quarter.
In spite of the deterioration exhibited in these indicators, the quality of BB's loan portfolio continues to enjoy
a prominent position in relation to the National Financial System (SFN). The default measured by the
percentage of operations past due for more than 90 days reached 3.6% in SFN, against 3.2% in the
previous quarter. The average risk of the system reached 6.7%, a balance 1.4 percentage points in relation
to the rate of 5.3% presented in 4Q08.
Table 8. Deliquency Ratios
Ratios - %
Mar/08
Dec/08
Mar/09
Past Due Loans / Loan Portfolio
4.4
4.0
4.7
Allowance / Loan Portfolio
6.2
6.1
6.4
Past Due Loans + 60 days / Loan Portfolio
2.8
2.8
3.3
Past Due Loans + 90 days / Loan Portfolio
2.4
2.4
2.7
Allowance / Past Due Loans + 60 days
217.9
218.2
197.0
Allowance / Past Due Loans + 90 days
256.8
257.7
236.8
Average Risk – BB
5.6
5.4
5.7
Average Risk – SFN
5.4
5.3
6.7
Past Due Loans + 90 days / Loan Portfolio – SFN
3.0
3.2
3.6
As a result of the behavior of rates that measure default, and also due to the fact that Banco do Brasil
adjusted its methodologies in the direction of a more conservative approach as of 4Q08, Credit Risk
Provision (PCLD) expenses exhibited growth of 11.2% in the quarter, and added up to R$ 2,491 million.
The Expenses/Portfolio index, which measures the ratio between the Allowance for Loan Losses (PCLD)
expenses accumulated in the last 12 months and the average of the Loan Portfolio of the same period,
ended the quarter at 3.81%, exhibiting growth in relation to the 3.60% recorded in previous quarter and
3.58% in the same period of 2008.
Finally, it is worth emphasizing the Bank's conservative attitude in relation to the definition of risk rating
methodologies and of the provisions for credit risk. The ratio between the allowances required and the
balance of past due loans over 90 days reached 210.3% at the end of 1Q09, against 186.8% presented
by the Banking Industry.
Table 9. Allowance for Loan Losses over Loan Portfolio
R$ million
(A) Allowance for Loan Losses - Quarterly
(B) Allowance for Loan Losses - 12 Months
(C) Loan Portfolio
(E) Average Portfolio – 3 Months
Expenses over Portfolio (A/D) Expenses over Portfolio (B/E) -
1Q08
4Q08
1Q09
(1,534)
(5,483)
172,760
166,928
153,211
(2,240)
(6,800)
224,808
218,626
189,144
(2,491)
(7,757)
228,101
225,528
203,591
0.9
3.6
1.0
3.6
1.1
3.8
Improves recurring cost/income ratio
The rate of efficiency, which indicates how much operating revenue is being consumed by Administrative
expenses, ended 1Q09 at 43.3%. This level is 240 base points below that of the previous quarter and 140
base points below that of the same period of 2008. The indicator is calculated with a basis on the
Corporate Statement of Income, purging extraordinary items of the period.
Table 10. Cost / Income Ratio
R$ million
A) Administrative Expenses
Personnel Expenses
B) Operating Income
Net Interest Income
Fee income
Equity Interest in Results of Subs. and Affil.
Res. from Ins, Pension Plan and Capit.
Operations
Other operating income
Other operating expenses
Cost / Income Ratio – (A/B) %
1Q08
3,660
1,933
1,728
8,184
3,476
1,603
2,915
(32)
4Q08
4,571
2,430
2,140
10,003
1,932
3,892
3,058
707
1Q09
4,128
2,231
1,897
9,540
3,294
2,654
2,943
(90)
101
353
303
1,394
(1,272)
1,764
(1,702)
2,061
(1,625)
44.7
45.7
43.3
The improvement in the rate of efficiency was due to the fact that during the quarter, operating revenues
decreased at a slower pace than that of Administrative expenses. These revenues advanced 16.6% in
relation to 1Q08, and exhibited a downslide of 4.6% in comparison with the previous quarter.
Administrative expenses, excluding Other Tax Expenses, exhibited a downslide of 9.5% in the quarter and
growth of 11.2% over 1Q08. In the annual comparison, the performance is determined mainly by the
behavior of personnel expenses, which rose 18.2%, mainly on account of the salary increase granted to
the employees in September 2009 and the upsizing due to the takeovers performed. In the quarterly
comparison, the decrease of Administrative expenses is explained by the lower quantity of business days
and by the consumption of provisions formed to cover personnel expenses of the period.
Like Administrative expenses, fee income suffered the effect of seasonality (lower quantity of business
days) and recorded a decrease of 3.7% in the quarter. In the annual comparison, these revenues were
influenced by the regulations of the Central Bank, which governed the collection as of 2Q08; consequently
there was expansion of only 1.0% in this basis of comparison.
Extraordinary Events
During the quarter extraordinary effects added R$ 309 million to net income. Among these effects, we
emphasize those listed in the Public Announcement divulged to the market on April 29, 2009:
•
•
Reevaluation of the prospect of success of the Direct Unconstitutionality Action (ADIN), number
4101/DF, against the raise of the rate of CSLL of the financial sector - The recognition of the rise of
the rate from 9% to 15% had the activation of tax credits in the amount of R$ 1,213 million as an
effect;
Provision for contingent liabilities - The supplementation of provision for payment of labor, civil and
fiscal claims implied additional expenses of R$ 1,367 million in the quarter;
The amount R$ 95 million was also recorded as extraordinary, as a result of provisions for Economic
Plans.
Furthermore, the extraordinary effects of the period contributed towards a reduction of R$ 557 million in
the amounts payable of "Income and Social Contribution Taxes" and "Statutory Profit Sharing", a sum
also segregated as extraordinary.
The table below details the extraordinary effects of the quarter:
Table 11. Recurring Items
1Q09
Recurring Net Income
(+) Extraordinary Effects of the Period
(+) Tax credits - differential of CSLL rate
(+) Tax Impacts and PLR on Extraordinary Items
(-) Economic Plans
(-) Provision for labor, civil, and tax claims
(=) Net income
1,357
309
1,213
557
95
1,367
1,665
Strategic Investments (Pro forma)
As of this quarter, the financial statements of Banco do Brasil will consolidate the balance sheet items of
Banco Nossa Caixa (BNC). The acquisition of the controlling interest of BNC is added to the two
takeovers (BESC and BEP) executed by BB in 2008. In addition, Banco do Brasil has already advised the
market of the formation of a strategic partnership with Banco Votorantim, only pending authorization from
the Central Bank.
The business carried through to completion and the transaction in course will allow Banco do Brasil to
advance consistently over the market of São Paulo, to obtain access to low cost and stable funding from
Nossa Caixa, to expand activities in the Corporate and consumption financing markets and to broaden the
scope of activity in the capital market, among other synergies of costs and revenues.
To improve the understanding of strategic investments and of how they complete the business of BB, we
present the indicative simulation below, which presents Nossa Caixa still in a separate manner (for
understanding only), and also contains the higher figures of Banco Votorantim.
Table 12. Strategic Investments (combined information)
BB (1)
Nossa Caixa (1)
Banco
Votorantim (1)
BB+NC+BV (2)
Equity Indicators - millions of R$
Assets(1)
537,663
54,262
83,606
633,728
Loan Operations
228,101
13,825
38,973
261,413
Deposits
268,347
36,665
22,988
316,496
Third party funds:
259,324
27,931
15,172
294,840
Employees
89,534
14,375
6,565
110,474
Checking Accounts (thousand)
48,121
5,769
2,773
56,663
Branches
16,207
563
117
16,887
15.0
14.9
13.2
14.1
Administrative Indicators
Basel (3)
(1) Information with position on 3/31/2009.
(2) Consolidated equity data in proportion to the interest of Banco do Brasil (50%).
(3) Basel of BB with position on 3/31/2009. Hence it already includes the impact of the consolidation of Banco Nossa Caixa.
Guidance: Estimates x Realized
Part of the indicators that form an integral part of the Guidance were affected by the seasonality that
characterized 1Q09 (lower quantity of business days) and also by the effects of the international crisis. In
the view of Banco do Brasil, the difficulties created by the adverse economic environment in the first
quarter will not persist throughout the year 2009. For this reason, all the estimates disclosed to the market
upon the announcement of the result of 4Q08 were reaffirmed, except the tax rate, which is in revision.
The table below presents the comparison between the estimates and the amounts realized in 1Q09.
Table 13. Observed 1T09 and Guidance 2009
Indicators
Observed 1T09 (1)
2009 Estimate
11.2%
9% - 12%
Recurring ROE
19.1%
19% - 22%
NIM
6.6%
6.8% - 7.2%
Fee Income
1.0%
5% - 8%
Loan Portfolio – Brazil
32.0%
13% - 17%
39.7%
23% - 25%
Businesses
42.8%
16% - 19%
Agribusinesses
12.3%
2% - 5%
Individuals
Total Deposits
Tax Rate
(1)
(2)
41.4%
10% - 14%
29.8%(2)
26% - 29%
3.8%
3.8% - 4.2%
The data of Nossa Caixa was segregated due to the consolidation process
In revision
1 – Economic Environment
In the first quarter of this year, the contusive manifestation of financial crisis effects continued
characterizing the global economic panorama. In this environment, the global economic growth prospects
deteriorated.
In line to the dynamism loss of the main consumer markets, the domestic trade surplus and current trade
recorded important reductions, with a downslide both in exports and in imports. Nevertheless, although
reflecting the global adverse conditions, the main external indicators of the Brazilian economy continued
robust, with the deficit in current transactions totally financed by the voluntary admission of funds,
especially in form of direct foreign investments.
In spite of the relative greater resilience, the domestic economic activity was affected by developments in
the global crisis. There was a strong impact on indicators that measure the industry activity level, besides
deterioration signs in the employment level. The loan market significantly slowed the pace of growth
presented in the previous quarters.
In response, the Government, supplementing the prompt reaction of the monetary policy, implemented
additional anti-cyclic fiscal measures, mainly in the form of tax relief and to specific sectors incentives
(such as civil construction and automotive sector).
In this context, although the economic panorama of the first three months of the year was characterized
by substantial uncertainty, by caution among economic agents and by the increase in the idleness of
funds, there are indicators, even though preliminary, that the productive threshold of the Brazilian
economy might be getting over its worst moment.
Table 14. Main Macroeconomic Indicators
1Q08
4Q08
1Q09
Economic Activity
GDP (% YTD in 12 months)
5.8
5.1
-
Family Consumption
6.7
5.4
-
Government Consumption
3.6
5.6
-
14.9
13.8
-
Exports
4.6
(0.6)
-
Imports
20.4
18.5
-
82.0
81.5
-
2.1
2.2
-
Gross Formation of Fixed Capital
Use of Installed Capacity (%)
Agent Population (% YTD in 12 months)
Unemployment Rate (% YTD in 12 months)
9.1
7.9
-
37.5
(10.2)
-
(0.7)
(16.8)
-
1.7
1.3
-
International Reserves (US$ billion – year accumulated)
195.2
206.8
202.4
Country Risk (base points – EOP)
279.0
416.0
425.0
Formal employment – net creation (% YTD in 12 months)
Industrial Production (% YTD in 12 months)
External Sector
Current Transactions (% YTD in 12 months)
Direct Foreign Investment
Trade Balance (US$ billion – year accumulated)
2.8
24.7
3.0
Exports (US$ billion – year accumulated)
38.7
197.9
31.2
Imports (US$ billion – year accumulated)
35.9
173.2
28.2
1.7
2.3
2.3
(14.7)
31.9
32.4
IGP-DI FGV (% YTD in 12 months)
9.2
9.1
5.9
IGP-M FGV (% YTD in 12 months)
9.1
9.8
6.3
IPCA – IBGE (% YTD in 12 months)
4.7
5.9
5.6
11.25
13.75
11.25
11.4
12.5
12.8
1.2
1.8
1.9
6.25
6.25
6.25
4.7025
3.8825
1.4350
PSGD (% GDP)
57.1
58.6
-
PSND (% GDP)
40.8
36.0
-
35.5
41.3
42.5
3.0
3.2
3.6
Individuals
6.9
8.0
8.3
Businesses
1.8
1.8
2.6
37.6
43.3
39.2
Individuals
12.2
57.9
50.1
Businesses
26.5
30.7
28.9
25.4
30.7
28.5
Individuals
35.3
45.0
39.7
Businesses
14.7
18.4
18.0
Individuals
15.0
16.3
16.3
Businesses
10.1
10.1
9.6
Ptax Dollar Sale (EOP)
Ptax Dollar Sale (% YTD in 12 months)
Monetary Indicators
Selic (EOP %)
Accumulated Selic (% YTD in 12 months)
Accumulated TR (exBTN) (% YTD in 12 months)
TJLP - IBGE (EOP %)
Libor (EOP %)
Public Finance
Primary Surplus (12 months accumulated GDP)
Credit Indicators
Credit/GDP (% YTD in 12 months)
Total Default (% past due loans over 90 days)
Total Investment Rate (%)
Total Spread (%)
Average Term (%)
2 – BB Securities
2.1 Shares
At the end of the first quarter of 2009, Banco do Brasil’s capital stock was R$ 13,779,904,588.80, made
up of 2,568,186,485 common shares, represented in dematerialized form and with no par value. The
largest shareholder is the National Treasury, with 65.6% of the capital, followed by Caixa de Previdência
dos Funcionários do Banco do Brasil (Previ) with 10.2%, and BNDESPar – the National Bank for
Economic and Social Development equity investment company – which has 2.5% of the capital. The other
shares, totaling 21.7%, are spread out in the market (free float).
The total of 2,568,186,485 existing shares at the end of 1Q09 already takes into account the 23,074,306
shares issued in September 30,2008, as a result of the merger with Banco do Estado de Santa CatarinaBesc and Besc S.A. Crédito Imobiliário-Bescri, in addition to the 2,930,649 shares arising from the merger
with Banco do Estado do Piauí S.A. (BEP) on November 30, 2008. Of the total of new shares, 95.6%
belong to the National Treasury, which increased its interest in Banco do Brasil's shareholders' equity.
The shares originated by the dissident minority holdings, a total of 1,155,056, were repurchased and
recorded as treasury shares.
Table 15. Shareholding Breakdown
%
Shareholders
1Q08
4Q08
1Q09
National Treasury
65.3
65.6
65.6
Previ
10.5
10.4
10.2
2.5
2.5
2.5
BNDESPar
-
0.0
0.0
21.7
21.5
21.7
Individuals
5.9
5.8
5.8
Companies
4.7
4.5
5.4
11.1
11.3
10.6
100.0
100.0
100.0
Treasury shares
Free Float
Foreign Capital
Total
The policy of compensation for the shareholders of Banco do Brasil for 2009 considers a payout rate of
40% of the net income, defined at a meeting of the Board of Directors held on 2.18.2009 and the
periodicity is quarterly for the payment of dividends and/or interest on own capital, pursuant to Art. 43 of
the Bank's By-laws. It is emphasized that among the top Brazilian banks, this policy provides the highest
return to the shareholders among the other main financial institutions in the brazilian market, around 30%.
Hence, as for 1Q09, the Bank disbursed the amount of R$ 666.2 million to its shareholders, being R$
447.7 million as interest on own capital (R$ 0.17441027345 per share in the period) and R$ 218.5 million
as dividends (R$ 0.08510772799 per share).
Table 16. Distribution of Dividends/Interest on Own Capital
4Q07
3Q08
R$ million
4Q08
National Treasury
PREVI
BNDES
Individuals
Companies
Foreign Capital
613.3
98.3
23.8
55.1
43.9
104.7
773.0
122.2
29.4
68.0
52.6
132.7
437.2
67.7
16.6
38.5
35.7
70.4
Total
939.0
1.177.7
666.2
BB’s shareholder base is characterized by the great number of shareholders with a small share in the
capital. As it can be seen from the table below, 338,361 shareholders (93.8%) account for 1.5% of the
capital, while 22,453 shareholders (6.2%) hold 98.5% of the total of the shares.
Table 17. Shareholders by Range of Shares Owned
Range of shares owned
N. Shareholders
% Shareholders
Qty. Shares
% Qty. Shares
1 to 10 shares
11 to 50 shares
51 to 100 shares
101 to 1,000 shares
Over 1,000 shares
109,084
91,538
39,620
98,119
22,453
30.23
25.37
10.98
27.19
6.22
578,535
2,350,692
2,943,552
33,662,836
2,528,650,870
0.02
0.09
0.11
1.31
98.46
Total
360,814
100.00
2,568,186,485
100.00
Table 18. Free Float by Range of Shares Owned
Range of shares owned
N. Shareholders
% Shareholders
Qty. Shares
% Qty. Shares
1 to 10 shares
11 to 50 shares
51 to 100 shares
101 to 1,000 shares
Over 1,000 shares
109,084
91,538
39,620
98,119
22,450
30.23
25.37
10.98
27.19
6.22
578,535
2,350,692
2,943,552
33,662,836
517,901,856
0.10
0.42
0.53
6.04
92.91
Total
360,811
100.00
557,437,471
100.00
With regard to the total of the Bank’s shares that are spread out in the market (21.7%), in other wrods, the
free float, the predominance of foreign capital can be seen (48.7%), followed by Individuals (26.6%) and
Businesses (24.7%).
Mar/08
Dec/08
Mar/09
26.8%
27.0%
26.6%
48.7%
52.4%
51.4%
20.8%
21.6%
Individuals
Figure 5. Total Distribution of the Free Float
Businesses
Foreign Capital
24.7%
Equity Held by Foreign Investors
From 2002 onwards, a noteworthy increase has been noted in the foreigners stake in the Bank's capital.
With the Bank's Public Stock Offerings held in 2006 and 2007 and the "B" and "C" Warrant Subscription,
the stake held by foreign parties significantly increased, from 3.4% in 2005 to 11.3% at the end of last
year. This stake is 10.6% in this quarter.
9.9
11.3
10.6
2008
1Q09
7.2
2.8
0.9
2002
1.6
2003
2004
Figure 6. Equity Held by Foreign Investors
3.4
2005
2006
2007
2.2 Warrants
In 1996, on the occasion of BB's capital increase, three series of warrants were issued: A, B, and C,
maturing in 2001, 2006, and 2011, respectively. The exercise price for these warrants was established at
R$ 8.50, with readjustment by the IGP-DI “pro rata temporis”.
The distribution and some characteristics of the "C" Warrants, in March 2009, are represented according
to the following tables:
Table 19. Breakdown of the Series “C” Warrant Holders
%
Mar/08
Mar/09
81.2
17.0
1.8
100.0
74.7
24.8
0.4
100.0
Individuals
Companies
Foreign Capital
Total
"C" Warrants showed the following characteristics on March 31, 2009:
Table 20. Series “C” Warrants
Warrant
Code
Exercise Date
Number
Exercise Price R$
Quotation in R$
Series “C”
BBAS 13
31.03 to 30.06.2011
5.880.483
26.30
19.50
In a simulation, considering the total of 2,568.2 million shares, the potential dilution in the Bank's capital is
0.7%, going from the assumption that until 2011 there will be no additional capital increases and that all
the C warrants will be exercised by or before maturity (03.31 to 06.30.2011).
Conversion:
1 Warrant = 3.131799 shares
Total of Shares= 2,568,186,485
Table 21. Expected Dilution of Capital
Warrants
Qty. Warrants
Qty. Shares
Dilution of Capital - %
Series “C”
5,880,483
18,416,491
0.7
2.3 Performance of the Shares
Market
The financial market instability still continued in the first quarter of 2009, pressurized by uncertainty
regarding the economic recession in the main world nations and the behavior of the Brazilian economy
itself. In 1Q09, the activity indicators, i.e., the actual economy, start to be affected by the financial crisis;
problems with economic slowdown, unemployment, financial institutions default rate, mainly banks,
mortages and in the other forms of families indebtedness, especially in the United States (USA),
intensified. During this period, the main economies central banks started to use the monetary policy
intensively, bringing the interest rate down to the lowest levels in history.
Hence, IBOVESPA closed 1Q09 with a 31.9% downslide in twelve months, but with valuation of 9.0%
YTD. The total volume traded was R$ 212.2 billion, corresponding to the daily average of R$ 3.5 billion
with the volume of trade attaining 280.3 thousand.
BB shares
As a consequence of the world crisis and greater aversion to risk, the prices of the main shares on the
Brazilian financial market suffered devaluation in 2008, but recovered at the beginning of this year. In
1Q09 the BBAS3 shares closed quoted at R$ 16.87, loss of 21.0% in twelve months, but up 18.8% in the
year, until the end of march 2009.
(21 .0) %
(32 .9) %
mar/08 apr/08 may/08 jun/08
jul/08 aug/08
sep/08 oct/08
BB
Source: Economática
Figure 7. BB Shares vs. Ibovespa
nov/08
Ibovespa
dec/08 jan/09
feb/09 mar/09
Share in Ibovespa
The Bovespa Index (Ibovespa) is an index that represents the Brazilian stock market, made up of papers
that were traded in at least 80% of the trading sessions carried out. From this, the Tradability Index is
worked out, made up by the financial volume and by the quantity traded of each paper transacted, which
determines the ranking of the paper’s share in the market. Out of the total of shares, the 80% with the
highest Tradability index are determined, to represent the Ibovespa index.
The Bank's share growth in the theoretical portfolio of Ibovespa can be verified in the following chart. In
the theoretical portfolio of Ibovespa for the next four months (May/09 – Aug/09), Banco do Brasil occupies
the 12th place. The Public Offering carried out in 2006 and 2007 and the split of shares, in the proportion
of 1:3, favored the increase of BB’s liquidity in the market, permitting access by small investors to the
Bank's shares.
12.162
11.381
1.590
Jan/07 Apr/07
10.969
10.779
11.307
11.613
2.443
2.379
1.675
1.713
May/07 Aug/07
Sep/07 Dec/07
11.992
12.644
2.379
2.404
1.893
Jan/08 Apr/08
BBAS3
May/08 Aug/08
Sep/08 Dec/08
Jan/09 Apr/09
May/09 Aug/09
Banking Industry
Source: Bovespa
Figure 8. BBAS3 in Ibovespa
Trade involving Banco do Brasil shares were also influenced by the greater aversion to risk among
investors, an effect of the global economic crisis. The average quantity traded in 1Q09, compared to the
same period of 2008, obtained valuation of 35.3%, and reduction of 12.3% compared to 4Q08. The
growth verified, even with the crisis, resulted essentially from the shares split and the Free Float increase
after the BB Shares Public Offering occured at the end of 4Q07. The lower price and the rise of liquidity
paved the way for the increase of trade by small investors.
The average financial volume went from R$ 114 million in 1Q08 to R$ 56 million in this quarter, a
decrease of 50.8% in this indicator, in the quarterly comparison. The performance was negative by 19.2%.
6,150
5,150
Units
4,150
3,150
2,150
1,150
150
mar/07
jun/07
sep/07
dec/07
Figure 9. Average amount traded – BBAS3
mar/08
jun/08
sep/08
dec/08
mar/09
R$
142,000,000
122,000,000
102,000,000
82,000,000
62,000,000
42,000,000
22,000,000
2,000,000
mar/07
jun/07
sep/07
dec/07
mar/08
jun/08
sep/08
dec/08
mar/09
Figure 10. Average financial volume – BBAS3
Market Ratios
The P/E ratio, which indicates a time estimate, in years, for investors to recover the capital invested in the
shares purchase assuming the full distribution of company profits; attained 5.34x last March, compared to
9.80x in the same period of 2008.
The EPS reached R$ 0.65 in 1Q09, compared to R$ 0.92 in 1Q08. The P/B ratio of 1.40 in March 2009
denotes that the Bank's shares are traded more than once the book value, i.e., the Bank current market
price is 140% its Shareholders' Equity.
Market capitalization reached R$ 43,325 million at the end of March 2009, compared to R$ 58,750 million
in the same period of the previous year, a decrease of 26.3%. The free float capitalization recorded R$
9,404 million, lower than the R$ 12,742 million in March 2008.
In 1Q09, the Bank disbursed R$ 666.2 million to its shareholders, being R$ 447.7 million as interest on
own capital (R$ 0.17441027345 per share in the period) and R$ 218.5 million as dividends (R$
0,08510772799 per share in the period). The 1Q09 Dividend Yield calculated as a result of the Bank’s
1Q09 dividend/interest on own capital divided by its market cap, attained 1.5%.
The following chart shows the behavior of Banco do Brasil’s main multiples over the last quarters.
Price / Earnings 12 months **
15.03
Earnings per Share - R$ **
14.88
10.11
9.80
8.25
4.28
Sep/07
Dec/07
Mar/08
Jun/08
Sep/08
Dec/08
0.92
5.34
0.55
0.49
Mar/09
3Q07
4Q07
1Q08
3.10
2.31
0.73
2Q08
3Q08
0.65
4Q08
1Q09
Book Value per Share - R$ **
Price / Book Value **
3.32
1.15
0.65
2.52
9.32
9.80
9.99
10.37
10.87
Sep/07
Dec/07
Mar/08
Jun/08
Sep/08
11.66
12.02
Dec/08
Mar/09
2.09
Sep/07
Dec/07
Mar/08
Jun/08
Sep/08
1.26
1.40
Dec/08
Mar/09
Free Float Capit alization - R$ million
Market Capitalization - R$ million
14,753
14,416
12,742
12,550
11,354
76,482
75,269
58,750
Sep/07
Dec/07
Mar/08
66,478
Jun/08
8,103
9,404
58,360
Sep/08
37,701
43,325
Dec/08
Mar/09
Sep/07
Dec/07
Mar/08
Jun/08
Sep/08
Dec/08
Mar/09
Dividends and Interest on Own Equity - R$ million
Net Income - R$ million
2,944
2,347
1,364
3Q07
1,217
4Q07
1Q08
1,644
1,867
2Q08
3Q08
4Q08
1,665
939
1Q09
1Q08
1,178
658
747
2Q08
3Q08
666
4Q08
1Q09
Payout - %
Dividend Yield - %
4.6
3.1
1.6
1Q08
1.0
1.3
2Q08
3Q08
40.0
40.0
40.0
40.0
1Q08
2Q08
3Q08
4Q08
1Q09
1.5
4Q08
1Q09
** Adjusted series considering the stock split (1:3) occurred in the 2Q07.
Figure 11. Market Ratios
40.0
3 – Corporate Governance
Banco do Brasil has achieved a prominent position due to practices that guarantee the balance of rights
and the rendering of accounts to the company’s shareholders and to society, the business sustainability
and ethical relations with its stakeholders. Proof of this is BB's membership in Bovespa’s Novo Mercado,
which is a special listing segment that assembles the institutions with the most stringent Corporate
Governance practices, and its shares listing in the ITAG and IGC indexes, which respectively group
companies with differentiated tag along, and those with the best corporate governance practices.
We have based our performance not only complying with the applicable regulations, but also on disclosing
to the market as many details as possible concerning our activities, in a timely manner and without losing
sight of the quality of information provided. Besides the extensive range of reports and of information
made available at our website, the APIMEC meetings and other events with shareholders, we have
distinguished ourselves by summoning the market to conferences whenever we consider it necessary to
elucidate specific topics involving our company.
In 1Q09 we announced the strategic partnership established with Banco Votorantim to the market. The
conference call disclosed the business details and the strategic rationale for Banco do Brasil. In addition,
we opened a question and answer section to enable the analysts to clear up issues with Banco do Brasil
and Banco Votorantim Board of Directors. The slides, the sound and the transcription of the call
conferences are available at our website.
Management
BB's management bodies are the Board of Directors, advised by the Audit Committee, and the Executive
Board, made up of the Executive Board of Officers (president and nine vice-presidents) and by 27
statutory directors. The Bank also has a permanent Board of Auditors.
Decisions are taken collectively at all levels of the Bank. With the purpose of involving all the executives in
the definition of strategies and approval of proposals for BB’s different businesses, the Management uses
committees, subcommittees and commissions at a strategic level, which guarantee agility and security for
the decision taking.
The sophisticated governance structure developed by the Bank is reflected in the daily business
management, the assumptions of which include a rigid structure of levels of decision-making authority and
the segregation of duties. Loans, for example, are analyzed independently by the business areas, which
evaluate the characteristics and the attractiveness of each operation, and by the Loan Directorate, which
defines the maximum exposure by client, and sets individualized limits by business category. In this
regard, the development of new products is submitted to all the intervening Senior Managements and
Units, which analyze in a separate manner all the aspects involved in the deal, like its structure, pricing
and risks involved.
Boa rd of
Aud itor s
Glo bal Risk
Manag ement Bo ard
COMITÊ DE
PREVENÇÃO A
ILÍCITOS
FINANC./CAMBIAIS
COMITÊ DE
NEGÓ CIOS
Information
Technology
Solu tion for
administrative
Inquest
Communicatio n
Business
Market a nd
Liqu idity Risk
Boa rd of Directo rs
Credit Risk
Op erational Risk
Pre ven tion of
Financial and
Exchange Fraud
Credit
Limit
Op erations
Resources
Op erations
Committee
Sub committe e
Economic
and Financial
Scenar ios
Op erational
Administrative an d
Cost Ratio nalizatio n
Debure aucratization
and Cost
rationa lization
Information
Security
Intranet
Employee
Assignment
INTERNET
Work
Agr eement
Commission
Figure 12. Committee organogram
Highlights of the period
• Mergers and Acquisitions - Business in the Period
The Brazilian Central Bank approved the takeover of the BESC System and the acquisition of the
controlling interest of Banco Nossa Caixa in the first quarter of 2009.
• Study for acquisition of equity control of BANESTES
Banco do Brasil offered, and the Governo do Estado do Espírito Santo agreed, to start negotiations,
without binding effect, aiming at the acquisition of equity control of BANESTES S.A.
• New Market - Term for adaptation of the free float
Bovespa granted a request for Banco do Brasil to have up to June, 28 2011 to reach the minimum
percentage of 25% of free float shares provided for in the Listing Regulation of the New Market.
4 – Other Information
Table 22. Other Information
2Q07
3Q07
4Q07
1Q08
Profitability
Net Income per Share - R$ **
0.43
0.55
0.49
0.92
ROE - Annual Basis %
20.9
26.3
22.2
43.5
Recurring ROE - Annual Basis %
29.8
32.3
23.6
27.6
ROE - Accumulated on Annual Basis %
24.3
24.0
22.5
25.5
ROA - Annual Basis %
1.3
1.6
1.4
2.5
NII / Earning Assets - Annual Basis
8.0
7.7
7.8
7.2
Productivity
Efficiency - %
54.0
54.2
53.2
42.5
Fee Income / Personnel Expenses - %
97.0
102.0
110.5
150.8
Fee Income / Adm. Expenses - %
58.6
59.7
61.2
77.9
Personnel Expenses per Collaborator - R$
28,204 27,358 25,758 20,825
Collaborators / (Branches + PAA + PAB)
16.6
16.6
16.7
17.0
Checking Accounts per Collaborator
295
298
301
300
Assets per Collaborator – R$ thousand
3,737
3,825
3,932
4,463
Loan Portfolio / Points of Service – R$ million
9.6
9.9
10.5
11.3
Loan Portfolio Quality
Allowance / Loan Portfolio - %
6.5
6.4
6.4
6.2
Allowance / (E + F + G + H) - %
114.0
112.2
111.4
108.0
Portfolio Net of Allowance / Total Portfolio - %
93.5
93.6
93.6
93.8
Capital Structure
Leverage (times)
14.9
14.8
14.7
16.3
BIS Ratio - %
15.9
15.7
15.6
14.7
Total Quantity of Shares - thousand
2,475.9 2,475.9 2,475.9 2,542.2
Capital Market
Price / Earnings 12 months **
14.91
15.03
14.88
9.80
Price / Book Value **
3.10
3.32
3.10
2.31
Market Capitalization - R$ million
69,054 76,482 75,269 58,750
Book Value per Share - R$ **
9.01
9.32
9.80
9.99
Price of Share - R$ **
27.89
30.89
30.40
23.11
Structural Information
Total of Service Points
15,161 15,212 15,297 15,324
Branches
3,977
3,984
4,008
4,024
PAA
188
185
186
187
PAB
1,209
1,208
1,247
1,251
PAE
5,906
5,949
5,948
5,935
SAA
3,879
3,884
3,906
3,925
PAP
2
2
2
2
Total of Customers - thousand
26,295 26,636 27,414 27,855
Individuals - thousand
24,676 24,999 25,746 26,157
Businesses - thousand
1,618
1,636
1,667
1,698
Total of Savings Accounts - thousand
16,266 16,425 16,651 17,091
Individuals - thousand
16,144 16,300 16,526 16,961
Businesses - thousand
123
125
124
130
Collaborators
89,108 89,514 90,974 92,801
Employees *
79,310 80,048 81,855 83,417
Interns
9,798
9,466
9,119
9,384
* Adjusted Concept: See Chapter 7.6.1.
** Adjusted series considering the stock split (1:3) occurred in the second quarter of 2007.
2Q08
3Q08
4Q08
1Q09
0.65
27.9
24.6
25.4
1.6
7.1
0.73
30.5
33.6
26.1
1.7
7.0
1.15
47.4
24.5
30.4
2.4
7.2
0.65
23.8
19.1
28.9
1.2
6.6
46.6
136.4
72.9
22,730
17.1
308
4,444
12.4
51.6
123.4
66.0
25,033
17.3
317
4,834
13.1
33.6
125.8
66.3
25,071
16.4
313
5,377
14.1
59.3
93.4
50.4
31,900
16.8
309
5,990
14.1
5.9
105.3
94.1
5.5
105.4
94.5
6.1
107.5
93.9
6.4
106.0
93.6
15.8
12.5
2,542.2
16.5
13.0
2,565.3
17.4
15.2
2,568.2
19.2
15.0
2,568.2
10.11
2.52
66,478
10.37
26.15
8.25
2.09
58,360
10.87
22.75
4.28
1.26
37,701
11.66
14.68
5.34
1.40
43,325
12.02
16.87
15,353
4,052
188
1,249
5,911
3,951
2
28,830
27,055
1,775
17,710
17,409
301
93,733
84,258
9,475
15,438
4,077
184
1,225
5,969
3,980
3
30,117
28,173
1,944
18,002
17,717
285
94,935
85,392
9,543
15,964
4,342
187
1,389
6,055
3,987
4
30,378
28,494
1,884
18,459
18,169
290
96,938
88,972
7,966
16,207
4,354
182
1,360
6,061
4,248
2
30,574
28,701
1,874
19,432
19,112
320
98,825
89,534
9,291
2Q07
3Q07
4Q07
1Q08
2Q08
3Q08
3Q08
4Q08
1Q09
Global Ratings
Fitch Ratings
Individual
C/D
C/D
C/D
C/D
C/D
C/D
C/D
C/D
C/D
Short-Term - Local Currency
F3
F3
F3
F3
F3
F3
F3
F3
F3
Long-Term - Local Currency
BBBBBBBBBBBBBBBBBBBBBBBBBBBShort-Term - Foreign Currency
F3
F3
F3
F3
F3
F3
F3
F3
F3
Long-Term - Foreign Currency
BBBBBBBBBBBBBBBBBBBBBBBBBBBMoody's
Financial Strength
C
C
C
C
C
C
C
C
C
Short-Term - Local Currency
P-1
P-1
P-1
P-1
P-1
P-1
P-1
P-1
P-1
Short-Term - Foreign Currency
NP
NP
NP
NP
NP
NP
NP
NP
NP
Long-Term Debt- Foreign Currency
Baa3
Baa3
Baa3
Baa3
Baa3
Baa3
Baa3
Baa3
Baa3
Long-Term Deposits - Local Currency
A1
A1
A1
A1
A1
A1
A1
A1
A1
Long-Term Deposits - Foreign Currency
Ba3
Ba3
Ba2
Ba2
Ba2
Ba2
Ba2
Ba3
Ba2
Standard & Poor's
Long-Term - Local Currency
BB+
BB+
BB+
BBBBBBBBBBBBBBBBBBLong-Term - Foreign Currency
BB+
BB+
BB+
BBBBBBBBBBBBBBBBBBNational Ratings
Fitch Ratings
Short-Term
F1+(bra) F1+(bra) F1+(bra) F1+(bra) F1+(bra) F1+(bra) F1+(bra) F1+(bra) F1+(bra)
Long-Term
AA+(bra) AA+(bra) AA+(bra) AA+(bra) AA+(bra) AA+(bra) AA+(bra) AA+(bra) AA+(bra)
Moody's
Short-Term
BR-1
BR-1
BR-1
BR-1
BR-1
BR-1
BR-1
BR-1
BR-1
Long-Term
Aaa.br
Aaa.br
Aaa.br
Aaa.br
Aaa.br
Aaa.br
Aaa.br
Aaa.br
Aaa.br
Compulsory/Reserve Requirements
Demand Deposits
Rate (1) (5)
45%
45%
45%
45%
45%
45%
45%
42%
42%
Additional (2) (6) (9)
8%
8%
8%
8%
8%
8%
8%
5%
5%
Reserve Requirements*
25%
25%
25%
25%
25%
25%
25%
30%
30%
Reserve Requirements (micro finance)
2%
2%
2%
2%
2%
2%
2%
2%
2%
Free
20%
20%
20%
20%
20%
20%
20%
21%
21%
Savings Deposits
Rate (3) (8)
20%
20%
20%
20%
20%
20%
20%
15%
15%
Additional (2) (9)
10%
10%
10%
10%
10%
10%
10%
10%
10%
Reserve Requirements* (7)
60%
65%
65%
65%
65%
65%
65%
70%
70%
Free
10%
5%
5%
5%
5%
5%
5%
5%
5%
Time Deposits
Rate (4)
15%
15%
15%
15%
15%
15%
15%
15%
15%
Additional (2) (6)
8%
8%
8%
8%
8%
8%
8%
5%
5%
Free
77%
77%
77%
77%
77%
77%
77%
80%
80%
Judicial Deposits
Rate
0%
0%
0%
0%
0%
0%
0%
0%
0%
Free
100%
100%
100%
100%
100%
100%
100%
100%
100%
* Reserve Requirements at BB are directed to Rural Credit.
(1) Collected in cash without remuneration.
(2) Collected in cash at Selic rate.
(3) Collected in cash at TR + interest of 6.17% p.a.
(4) Linked to securities. From the calculus base period of 11.03 to 11.07.08, with compliance since 11.14.08, 60% of the reserve requirements started
to be collected in cash without remuneration, and 40% in federal bonds linked in Selic.
(5) From the calculation base period of 10.27 to 11.07.08, with compliance since 11.05.08.
(6) From the calculation base period of 09.29 to 10.03.08, with compliance since 10.13.08.
(7) For the calculation base periods between 10.27.08 and 06.26.09, with compliance from 11.10.08 to 07.10.09.
(8) Exclusively to rural savings, for the calculation base periods between 10.27.08 and 06.26.09, with compliance from 11.10.08 to 07.10.09. To
housing savings, the rate remains in 20%.
(9) From the calculation base period of 11.17 to 11.21.08, with compliance since 12.01.08, the additional reserve requirements started to be paid in
federal bonds linked in Selic.
5 – Summarized Financial Statements
5.1 Summarized Balance Sheet
Table 23. Summarized Balance Sheet – Assets
R$ million
Chg. %
Balance
ASSETS
Current and Long-term Assets
Available Funds
Short-term Interbank Investments
Securities
Securities Available for Trading
Securities Available for Sale
Securities Held to Maturity
Financial Derivatives
Interbank Accounts
Deposits with the Central Bank
Compulsory Deposits on Demand Deposits and Float
Compulsory Deposits on Savings Deposits
Other
Intrabank Accounts
Loans
Public Sector
Private Sector
( Allowance for Loan Losses)
Leasing
Leasing and Subleasing Receivables
(Unearned Lease Income)
(Allowance for Lease Losses)
Other Receivables
Receivable on Guarantees Honored
Foreign Exchange Portfolio
Income Receivable
Trading and Brokerage of Securities
Specific Credits
Specific Operations
Credits from Insurance, Pension and Capitalization Op.
Tax Credits
Actuarial Assets
Warrants Deposits Receivable
Other Credits
(Provision or Doubtful Receivables)
(With Loan Characteristics)
(Without Loan Characteristics)
Other Assets
Interest in Companies
Other Assets
(Provision for Possible Losses)
Prepaid Expenses
Permanent Assets
Investments
Property and Equipment
Leasing Assets
Intangible
Deferred Charges
Mar/08
Dec/08
Mar/09
s/Mar/08
s/Dec/08
414,193
406,228
4,790
72,689
81,490
24,717
35,388
20,485
899
36,340
31,102
11,127
19,975
5,238
118
149,507
6,286
153,543
(10,322)
1,355
1,380
(25)
59,211
55
12,608
433
338
776
1
269
14,051
2,180
16,394
13,120
(1,014)
(347)
(667)
729
0
300
(164)
593
7,964
1,055
2,966
7
3,294
642
521,273
511,761
5,545
119,408
86,909
26,136
38,374
20,123
2,276
21,287
20,882
12,439
8,443
405
228
190,882
12,471
191,589
(13,179)
2,968
4,880
(1,842)
(71)
83,279
71
20,914
413
347
846
0
441
16,499
7,794
18,007
19,325
(1,377)
(579)
(798)
1,256
0
308
(170)
1,118
9,512
966
3,339
4
4,598
604
591,925
577,351
7,516
131,796
110,594
32,475
45,269
31,433
1,417
30,925
25,543
12,381
13,162
5,382
99
205,376
3,767
216,684
(15,075)
3,246
3,352
(106)
86,156
81
19,041
513
150
868
0
586
20,413
7,794
20,024
18,363
(1,676)
(649)
(1,027)
1,642
0
356
(183)
1,469
14,574
961
3,588
3
9,391
632
42.9
42.1
56.9
81.3
35.7
31.4
27.9
53.4
57.5
(14.9)
(17.9)
11.3
(34.1)
2.7
(15.6)
37.4
(40.1)
41.1
46.0
139.5
142.9
326.8
45.5
46.6
51.0
18.4
(55.5)
11.8
(95.2)
117.7
45.3
257.5
22.1
40.0
65.2
86.9
54.0
125.4
(0.8)
18.5
11.4
147.9
83.0
(8.9)
21.0
(52.9)
185.1
(1.6)
13.6
12.8
35.5
10.4
27.3
24.3
18.0
56.2
(37.8)
45.3
22.3
(0.5)
55.9
1.228.5
(56.4)
7.6
(69.8)
13.1
14.4
9.4
(31.3)
48.4
3.5
13.8
(9.0)
24.2
(56.7)
2.6
0.1
32.9
23.7
11.2
(5.0)
21.7
12.1
28.7
30.7
9.1
15.4
7.4
31.4
53.2
(0.5)
7.4
(16.2)
104.2
4.5
Table 24. Summarized Balance Sheet - Liabilities
R$ million
Chg. %
Balance
LIABILITIES AND SHAREHOLDER’S EQUITY
Current and Long-term Liabilities
Deposits
Demand Deposits
Savings Deposits
Interbank Deposits
Time Deposits
Investment Deposits
Funds from Acceptances and Securities Placed
Foreign Securities
Interbank Accounts
Intrabank Accounts
Borrowing
Foreign Borrowing
Domestic Onlending – Official Institutions
National Treasury
BNDES
CEF
Finame
Other Institutions
Foreign Onlending
Other Accounts Payable
Collection of Taxes and Contributions
Shareholder and Statutory Distributions
Taxes and Social Security
Trading and Brokerage of Securities
Technical Prov. Insurance, Pension and Capitalization Op.
Financial and Development Funds
Perpetual Securities
Special Operations
Obligations for Lotto Operations
FCO (Subordinated Debt)
Actuarial Liabilities
Other Liabilities
Unearned Income
Corporate Profit Sharing
Shareholders’ Equity
Capital
(Unpaid Capital)
Capital Reserves
Revaluation Reserves
Revenue Reserves
Mark-to-Market – Securities and Derivatives
Retained Earnings (Accumulated losses)
(Treasury Shares)
Income Accounts
Mar/08
Dec/08
Mar/09
On Mar/08
On Dec/08
414,193
388,786
189,751
44,142
48,112
6,247
90,939
310
99,716
1,260
1,169
3,049
1,369
3,251
3,251
18,250
3,184
9,198
5,194
673
0
1,876
70,264
2,443
10,939
1,342
12,244
590
10,575
2,125
887
2
10,405
4,111
14,600
25,407
13,212
0
6
10,125
85
1
1,978
521,273
491,336
270,841
51,949
54,965
14,065
149,618
243
91,130
3,479
3,210
21
2,496
7,627
7,627
22,436
3,485
11,168
6,585
1,199
98
3,895
89,312
252
15,964
1,838
17,570
401
12,675
2,458
1,185
2
11,772
5,662
19,531
(0)
29,937
13,780
5
7
15,977
199
(31)
-
591,925
560,232
305,002
47,276
70,567
8,406
178,487
266
106,452
3,074
2,762
1,940
1,862
9,991
9,991
22,220
3,532
10,753
165
6,826
945
104
3,164
106,422
3,156
15,380
985
17,686
145
13,771
3,741
1,174
2,136
9
14,371
5,738
28,130
834
30,859
13,780
5
7
15,759
124
(31)
1,215
42.9
44.1
60.7
7.1
46.7
34.6
96.3
(14.4)
6.8
144.1
136.3
(36.4)
36.0
207.3
207.3
21.8
10.9
16.9
31.4
40.3
21,730.6
68.7
51.5
29.2
40.6
(26.6)
44.4
(75.5)
30.2
76.0
32.4
91,542.8
38.1
39.6
92.7
21.5
4.3
15,276.1
22.7
55.6
45.2
(38.6)
13.6
14.0
12.6
(9.0)
28.4
(40.2)
19.3
9.2
16.8
(11.6)
(13.9)
9.068.7
(25.4)
31.0
31.0
(1.0)
1.3
(3.7)
3.7
(21.2)
6.2
(18.8)
19.2
1.150.4
(3.7)
(46.4)
0.7
(63.9)
8.6
52.2
(0.9)
91,413.4
22.1
1.4
44.0
3.1
(0.0)
(1.8)
(1.4)
(37.6)
-
5.2 Summarized Corporate Law Income Statement
Table 25. Summarized Corporate Law Income Statement
R$ million
Chg. %
Quarterly Flow
1Q08
4Q08
1Q09
On 1T08
On 4T08
10,971
18,824
14,489
32.1
(23.0)
Loans
Leasing
Securities
Compulsory Investments
Financial Inc. from Insur., Pension & Capit. Op.
Money Market Funds
Borrowing, Assignments and Onlending
Gross Income from Financial Intermediation
Other Operating Income (Expenses)
Fee Income
Banking Fees Income
Personnel Expenses
Taxes
Equity Int, in the Results of Subs, and Affil,
Income f/ Insurance, Pension & Capitalization Op.
Other Operating Revenues
Other Operating Expenses
Operating Income
Non-operating Income
Income Before Taxes
Net Income
7,001
49
3,767
(448)
122
428
53
(7,232)
(4,909)
(720)
(1,603)
3,739
(853)
2,915
(1,933)
(1,809)
(566)
318
101
1,394
(1,272)
2,887
224
3,111
(462)
(301)
2,347
10,613
147
8,097
(1,053)
503
424
93
(17,226)
(8,432)
(4,903)
(3,892)
1,597
2,744
2,338
720
(2,430)
(2,185)
(887)
707
353
7,090
(2,962)
4,342
5
4,347
(1,022)
(380)
2,944
8,502
138
5,730
(62)
(116)
176
121
(11,131)
(7,761)
(716)
(2,654)
3,359
(2,664)
2,255
688
(3,152)
(2,691)
(667)
(90)
303
2,061
(1,371)
694
16
711
1,182
(227)
0
1,665
21.4
182.0
52.1
(86.3)
(59.0)
130.4
53.9
58.1
(0.5)
65.5
(10.2)
212.5
(22.7)
63.1
48.7
18.0
201.1
47.9
7.7
(75.9)
(92.6)
(77.1)
(24.5)
(29.1)
(19.9)
(6.0)
(29.2)
(94.2)
(58.6)
29.7
(35.4)
(8.0)
(85.4)
(31.8)
110.3
(3.6)
(4.3)
29.7
23.2
(24.8)
(14.2)
(70.9)
(53.7)
(84.0)
236.9
(83.6)
(40.3)
(43.4)
5.3 Income Statement with Reallocations
Loan operations (4) (16)
Lease operations
Securities (14)
Financial Income from Insurance, Pension and Capitalization Op.
FX Gain (Loss) on Foreign Investments (1)
Other Op. Inc. of a Fin. Intermed. Nature (2)
Tax Hedge (5)
Money Market Funds (3)
Net Interest Income
Allowance for Loan Losses (6) (11)
Fee Income
Services Income
Banking Fee Income
Taxes on Revenues (5) (7)
Contribution Margin
Personnel Expenses (8)
Other Administrative Expenses (8) (9)
Other Tax Expenses (7)
Commercial Income
Legal Risk
Legal Claims (8) (10) (17)
Labor Lawsuits (8) (17)
Eq Int. in Results of Subs. and Affil. (1) (14) (15)
Res. from Insurance, Pension Plan and Capitalization Operations
FX Other Operating Income/Expenses
Other operating income (2) (3) (4) (12)
Other operating expenses (2) (6) (9) (13)
Operating Income
Non-Operating Income
Income Before Taxes
Income and Social Contrib Taxes (5) (18) (19) (20)
Interest on Own Capital Tax Benefit
Recurring Income
Extraordinary Items
Sale of share in VISA Internacional (14)
Revaluation of Consolidated Shares (15)
Economic Plans (10)
Credit Assignment (16)
Tax Efficiency (19)
PREVI – Non-recognized Actuarial Gains (12)
CASSI – Non-recognized Actuarial Losses (13)
Additional Provision for Loan Losses (11)
Provision for labor, civil, and tax claims (17)
Tax credits - differential of CSLL rate (18)
Tax FX and Statutory Profits over Extraord. Items (20)
Net Income
1Q08
11,046
7,208
49
3,571
(448)
122
428
53
27
35
(5,477)
(4,757)
(720)
5,568
(1,534)
4,034
2,915
2,915
(534)
6,415
(3,561)
(1,801)
(1,734)
(26)
2,854
(125)
6
(132)
(424)
(115)
101
(410)
879
(1,290)
2,305
224
2,529
(669)
125
(301)
1,559
789
361
241
(82)
67
302
(101)
2,347
Quarterly Flow
4Q08
20,412
11,106
147
8,097
(1,053)
503
424
93
711
50
334
(13,335)
(8,432)
(4,903)
7,077
(2,240)
4,837
3,058
2,338
720
(589)
7,305
(4,515)
(2,301)
(2,043)
(170)
2,791
(226)
(97)
(129)
(189)
(3)
353
(539)
1,230
(1,769)
2,375
5
2,380
(557)
140
(198)
1,626
1,318
(44)
5,326
(1,259)
(1,594)
(1,110)
2,944
1Q09
15,260
8,951
138
5,730
(62)
(116)
176
121
(85)
471
(64)
(8,275)
(7,558)
(716)
6,985
(2,491)
4,494
2,943
2,255
688
(618)
6,819
(3,973)
(2,129)
(1,801)
(43)
2,846
(197)
(95)
(102)
(550)
(5)
303
(849)
795
(1,643)
2,099
16
2,115
(577)
179
(181)
0
1,357
309
(95)
(1,367)
1,213
557
1,665
Chg. %
On 1Q08
On 4Q08
38.2
(25.2)
24.2
(19.4)
182.0
(6.0)
60.5
(29.2)
(86.3)
(94.2)
(59.0)
(58.6)
130.4
29.7
1.232.4
849.2
51.1
(37.9)
58.9
(10.4)
(0.5)
(85.4)
25.4
(1.3)
62.4
11.2
11.4
(7.1)
1.0
(3.7)
(22.7)
(3.6)
(4.3)
15.6
4.8
6.3
(6.7)
11.6
(12.0)
18.2
(7.5)
3.9
(11.8)
66.8
(75.0)
(0.3)
2.0
57.5
(12.8)
(1.8)
(22.7)
(21.1)
29.7
191.0
(95.7)
48.9
201.1
(14.2)
106.9
57.5
(9.6)
(35.4)
27.4
(7.1)
(8.9)
(11.6)
(92.6)
236.9
(16.4)
(11.1)
(13.8)
3.7
42.7
28.4
(39.8)
(8.3)
(12.9)
(16.5)
(61)
(77)
15.7
113.6
(29.1)
(43.4)
5.3.1 Details of the Reallocations
In this chapter the adjustments made in the statement of income to get the Reallocated Statement of
Income are detailed below. Such adjustments aim to:
a) Separate the extraordinary items and show the recurring income for the period;
b) Change the manner that income and expenses are shown, in order to provide a better understanding
of the business and the company's performance;
c) allow the financial margin recorded in the period to reflect, effectively, the gain from all the earning
assets, seeking to inform the market what was the spread achieved from the division of this margin by
the assets, except the permanent assets. For this, it was necessary to:
•
•
•
Include in the financial margin the income recorded in Other Operating Income that had financial
intermediation characteristics and which was derived from earning assets recorded in the Balance
Sheet Under Other Receivables;
Identify the foreign exchange gain/(loss) on financial assets and liabilities abroad in the period in a
specific financial margin item (financial equity);
To keep in financial margin, amounts related to negative foreign exchange adjustments that were
recorded in Other Operating Income and Expenses to avoid inverting the balance of accounts of a
financial intermediation nature.
d) Detect and cancel the effects of Tax Hedge transactions entered into as of 4Q08, on the Effective Tax
Rate and Financial Margin. In connection with these transactions, it should be reported that:
•
•
•
•
Exchange variation on overseas investments reflects on Banco do Brasil's income by means of the
equity income account. In order to minimize the effects of exchange fluctuations on the income, the
Bank seeks to level its foreign exchange positions with transactions in the financial market or through
commercial positions assumed with customers;
Pursuant to tax legislation in force, the equity income on overseas investments does not affect the tax
calculation bases (IRPJ, CSLL, PIS/PASEP, and COFINS), as opposed to the profits arising from
foreign exchange hedge transactions which produced R$ 183 million in gains during the 3rd quarter of
2008, and may create losses in the subsequent periods if the Brazilian real begins to appreciate
consistently again;
In order to reduce fluctuations in its profit figures, the Bank decided to assume a foreign currency
short position, considering the sum required for effective protection, including tax effects pursuant to
article 4 in Circular 3389 dated June 25, 2008.
This short position is assumed by entering into a hedge transaction in excess of the assets being
protected, by means of a transaction known as a Tax Hedge, or overhedge. The Tax Hedge's value is
specified in such a way that the outcome of the hedge transactions, net of their effects on taxes, will
be equal to the impact of the exchange fluctuation on the income, which enhances protection and
reduces the income's volatility;
Reallocations in the Net Interest Income
(1) The foreign exchange gain (loss) on foreign financial equity is reallocated from equity in the
(earnings)/loss of subsidiary and associated companies for inclusion in the financial margin. This
adjustment is required to maintain the equilibrium and coherence of the analysis of the spread, since
assets and liabilities previously included in permanent assets are included in other balance sheet
items after consolidation. Without the relocation, spread would be calculated incorrectly. In 4Q08, this
reallocation was of R$ 711 million and in 1Q09 (R$ 85 million).
(2) The reallocations of Other Operating Income/Expenses to Other Operating Income of a financial
intermediation nature are detailed below:
Table 27. Reallocations – Other Operating Income / Expenses
R$ million
Var. %
Quarterly Flow
1Q08
Income from Special Operations
Income from specific credits
FX Readjustment
FX Readjustment Income
FX Readjustment Expense
Total
4Q08
1Q09
On 1Q08
On 4Q08
12
19
4
56
(52)
15
25
9
9
13
22
436
580
(144)
11.5
13.6
10,005.2
939.0
180.0
(13.4)
(12.8)
4,563.6
-
35
50
471
1.232.4
849.2
(3) Reallocation of Other Operating Income to Funding Operations in the Market. Refers to the reversal of
charges with the restatement of savings deposits recorded upon the closing of the semesters. In the
months after the closing of the Balance Sheets, this reallocation is necessary in order to correctly
evidence the Net Interest Income. This reallocation is only performed in the first and third quarters of
the year. In 1Q08 the charges were R$ 152 million, and R$ 202 million in 1Q09.
(4) Reallocation of Other Operating Income to Loan Operations corresponding to the equalization
revenues of charges on loan operations. As of January/2008 these revenues began to be accounted
for in Other Operating Income, and had to be reallocated to the group of Loan Operations for
purposes of comparability. Equalization revenues amounted to R$ 494 million in 4Q08 and R$ 449
million in 1Q09.
(5) Reallocations were performed in order to cancel the Tax Hedge's effects. Owing to the Brazilian real's
depreciation vis-à-vis the US dollar in the 4th quarter of 2008, the Tax Hedge created additional
expenses that affected the Net Interest Income in R$ 334 million, the counterpart being a reduction in
taxes. To allow a better understanding of the margin, and to confer greater stability to the effective tax
rate, the positive impact on Taxes on Revenues (of R$ 36.3 million) and on Income Tax and Social
Contribution (in the amount of R$ 298.1 million) were reallocated to the "Tax Hedge", line included
among Financial Intermediation Income, in the Net Interest Income. In the first quarter of 2009 the
effect was the opposite, given the appreciation of the Brazilian Real, which implied an increase of R$
64 million in the net interest income, an amount that we reallocated to make up for the negative
impact on Taxes on Revenues (of R$ 7 million) and on IR and CSLL (R$ 57 million).
Reallocations in the Net Interest Margin
(6) The expense with the Allowance for Loan Losses includes credits without characteristics of financial
intermediation, so this part of the allowance is reallocated to Other Operating Expenses. In 4Q08, this
reallocation was of R$ 57 million and in 1Q09, R$ 162 million.
Reallocations in the Contribution Margin
(7) Considering the model used for the income statement, tax expenses on revenues are reallocated and
included in the contribution margin. In 4Q08, this reallocation was of R$ 589 million and in 1Q09, R$
618 million.
Reallocations in the Operational Result
(8) The expenses with Legal Claims and Labor Lawsuits were separated in the Income Statement with
Reallocations, into a group called Legal Risk. It aims to provide a better analysis of the administrative
expenses and giving more transparency to this kind of risk. Amounts reallocated in 4Q08 and 1Q09
were, respectively:
- Labor claims: (R$ 129 million) and (R$ 102 million);
- Civil claims: (R$ 97 million) and (R$ 95 million).
(9) As of 1Q09, in compliance with the resolution of the Central Bank, part of the premiums paid to
customers began to be recorded in "Other Administrative Expenses". Aiming to maintain the
comparability and considering the nature of the amounts disbursed, we reallocated the entire sum to
"Other Operating Expenses", as was recorded up to December 2008. In the 1Q09, the reallocated
value was R$ 254 million.
Extraordinary Items
(10) Civil claims of Economic Plans on savings deposits, generating extraordinary expenses in 1Q09 in
the amount of R$ 95 million. These claims had an impact on the result of 4Q08 of R$ 44 million and
on that of 1Q08 of R$ 82 million.
(11) Extraordinary Expense incurred in 4Q08, corresponding to Additional Allowance for Loan Losses in
the amount of R$ 1,594 million. The reinforcement of provision results from adjustments in the Bank's
statistical models, in simulations of stress scenarios, if the volatility of the default rates of the loan
portfolio increases due to the effects of a possible deterioration of the global economic crisis. As of
the disclosure of CMN Resolution no. 3674/08, surplus provisions were included in the Level I
Referential Shareholders’ Equity, for the purpose of calculating the capital ratio.
(12) Extraordinary income of R$ 5,326 million regarding the partial accounting of non-recognized actuarial
gains by Plano de Aposentadoria e Pensão dos Funcionários do Banco do Brasil - PREVI, by virtue
of a review of actuarial assets and liabilities performed in accordance with Resolution 26 issued by
Conselho de Gestão da Previdência Complementar (CGPC) on September 29, 2008.
(13) Expense of R$ 1,259 million in as a result of non-recognized actuarial losses by Plano de Assistência
à Saúde - CASSI. These expenses were being calculated on a monthly basis and totaled R$ 440
million before taxes in 2008, which sums will no longer be stated from 1Q09 on.
(14) Partial sale of investments, corresponding to 56.1% of the shares of the BB group (Multiple Bank,
Visanet and VisaVale) in the company Visa Inc., generating positive extraordinary result of R$ 361
million in 1Q08. The subject was included in a notice to the market on March 31, 2008.
(15) As of the first quarter of 2008 the Bank started to proportionately consolidate its holdings in several
companies. Extraordinary revenues of R$ 241 million were determined in 1Q08 due to the valuation
by the Equity Method of Accounting of interests in companies that were not valued in this manner.
The consolidation of the holdings was the subject matter of a Significant Event divulged on April 29,
2008.
(16) Assignment of credits written off to Ativos S.A., generating extraordinary revenues in 1Q08 in the
amount of R$ 67 million.
(17) As a result of the process of periodic reevaluations of the equity impacts originating from the lawsuits
in which Banco do Brasil figures as complainant, plaintiff or stakeholder, an expense of R$ 1,367
million, before taxes was realized that refers to the supplementation of provision to cover labor, civil
and fiscal claims.
(18) Also on account of the reevaluation of the expected impacts of lawsuits, income of R$ 1,213 million
was realized relating to the recognition of tax credits originating from the alteration of the rate of
Social Contribution on Net Income - CSLL from 9% to 15%. The recognition of this tax credit results
from the reevaluation of the prospect of success of the Direct Unconstitutionality Action (ADIN),
number 4101/DF, against the raise of the rate of CSLL of the financial sector.
(19) Tax efficienty generated by the Bank in periodic revision for the deductibility treatment of the tax
expenses used so far. Because of this revision it was possible to have a tax efficiency in the 1Q08 for
about R$ 302 million.
(20) As of 4Q08 the DRE (Statement of Income) with Reallocations started to segregate the effects of
extraordinary items of the period on the payment of Profit Sharing (PLR), and to unify the effects of
these items on taxes (IR and CSLL). The table below shows separately the effect of each
extraordinary item on taxes and on PLR.
Table 28. Fiscal Effects and Statutory Profit Sharing on Extraordinary Items
Quarterly Flow
1Q08
4Q08
Chg. %
1Q09
On 1Q08 On 4Q08
Sale of shares in VISA International
Economic Plans
Previ – Actuarial Recognition Gain
Cassi – Actuarial Recognition Loss
Additional Provision for Loan Losses
Extra Statutory Profit Sharing
(129)
28
-
17
(2,255)
498
630
-
36
521
28.6
-
111.8
-
Total
(101)
(1,110)
557
-
-
6 - Balance Sheet Analysis
6.1 Breakdown
Banco do Brasil attained R$ 591.9 billion in total assets at the end of the first quarter of 2009, recording
expansion of 46.2% in 12 months and of 13.6% in relation to 4Q08. It is worth emphasizing that the
acquisition of the controlling interest of Banco Nossa Caixa (BNC) was consolidated at the end of the
period, which brought about the expansion of R$ 54.3 billion in assets. Disregarding the consolidation of
Nossa Caixa, assets would have grown 3.1% in the quarter and 32.8% in the annual comparison.
As the acquisition was executed at the end of the quarter, the equity itens of Nossa Caixa were
consolidated with those of BB. As the analyses of this chapter represent a photograph of the equity at the
end of the period in question, they contemplated the accounting information of BNC. The same treatment
was not provided to the analyses of income and expenses, in which we segregated the effect of the
acquisition for determination of average balances, as the statement of income accounts of that institution
did not sensitize the DRE (statement of income) of Banco do Brasil in the first quarter of 2009.
In relation to the previous quarter, the mix of assets (Earning/Others) remained practically stable. Earning
assets increased their share in relation to total assets by 20 base points. The mix of liabilities experienced
a more relevant change, and interest-bearing liabilities increased their relative share from 68.7% in 4Q08
to 70.5% in 1Q09.
Earning Assets2 vs. Interest Bearing Liabilities3 - %
17.0
17.2
83.0
17.5
29.6
29.7
82.8
70.3
Jun/07
70.4
Sep/07
17.4
82.5
19.8
30.6
32.1
82.6
67.9
Dec/07
69.4
Mar/08
19.6
31.8
32.3
80.2
80.4
67.7
Jun/08
19.4
19.6
80.4
68.2
Sep/08
Earning Assets
Other Assets
Interest Bearing Liabilities
Other Liabilities
29.5
31.3
68.7
Dec/08
80.6
70.5
Mar/09
Figure 13. Earning Assets vs. Interest Bearing Liabilities
1 Cash and cash equivalents in foreign currency, marketable securities, financial investments, loan operations, Leasing, Earning Compulsory Deposit
and other Earning Assets vs. Interest-bearing Liabilities
3
Savings Accounts, Interbank Deposits, Time Deposits, Money Market Borrowings, Foreign Borrowings, Onlendings, Financial and Development
Funds, Subordinated Debts, Hybrid Capital and Debt Instruments, and Foreign Securities Issued Abroad.
6.2 Analysis of Assets
The growth of Assets in the quarter resulted mainly from the performance of "Securities", which climbed
27.3% in the period and increased their relative share in Total Assets from 16.7% to 18.7%.
The acquisition of the controlling interest of Nossa Caixa was decisive in the alteration of the mix of assets
and liabilities in the quarter. This is because that institution had an ample base of deposits in March, but
not such an expressive loan portfolio, which caused more investments to be made in the securities
portfolio. The consolidation of numbers of Nossa Caixa added R$ 54.3 billion to the Total Assets of BB,
with R$ 13.8 billion in loans and R$ 22.6 billion in Securities. The deposit base was also expanded by R$
36.6 billion.
The result of consolidation was the growth of the share of Securities among the total assets of Banco do
Brasil. In spite of its decisive contribution toward the growth of 7.6% in loan and leasing operations, the
acquisition of controlling interest directly influenced the reduction of the relative share of these operations
in total assets, from 37.2% in December 2008 to 35.2% at the end of 1Q09.
16.4
21.1
15.9
21.1
15.1
20.5
18.7
19.7
14.4
19.8
17.0
18.7
24.0
16.7
36.7
4.0
21.8
36.8
3.9
22.3
37.8
3.8
22.8
36.4
3.4
21.8
39.8
3.4
22.6
38.3
3.3
22.7
37.2
3.2
19.0
Jun/07
Sep/07
Dec/07
Mar/08
Jun/08
Sep/08
Dec/08
Other Assets
Loans and Leasings
Liquidity Assets except Securities
23.5
18.7
35.2
3.4
19.1
Mar/09
Tax Credit
Securities
Figure 14. Breakdown of Assets
Table 29. Breakdown of Assets
Jun/07
Total Assets
Sep/07
Dec/07
Mar/08*
Jun/08
Sep/08
Dec/08
R$ million
Mar/09
342,049
351,651
367,210
414,193
416,503
458,873
521,273
Liquidity Assets except Securities
56,051
55,785
55,476
77,478
60,037
77,938
124,953
139,312
Securities
72,071
74,126
75,201
81,490
82,301
85,954
86,909
110,594
Loans and Leasing
591,925
125,524
129,513
138,849
150,863
165,570
175,613
193,849
208,622
Tax Credits
13,746
13,881
13,826
14,051
14,337
14,994
16,499
20,413
Other Assets
74,658
78,347
83,859
90,310
94,256
104,375
99,062
112,984
*From Mar/08 the series considers the Economic Consolidated information
6.3 Liquidity Analysis
The liquidity of Banco do Brasil, determined by the difference between Liquidity Assets and Liabilities,
attained R$ 119,662 million in March 2009. This sum represents growth of 29.1% in the quarter and of
148.7% in relation to the same prior-year period.
R$ million
119,662
92,660
61,914
44,107
45,019
Jun/07
Sep/07
48,312
48,117
37,336
Dec/07
Mar/08
Jun/08
Sep/08
Dec/08
Mar/09
Figure 15. Liquidity Balance
The consolidation of numbers of Nossa Caixa also had impacts on the Liquidity Balance. The low
leverage of that institution, and the greater allocation of investments to securities, contributed to cause the
expansion of 18.5% in BB's Liquidity Assets in the quarter. Among these assets, those that merit special
emphasis are investments in securities (excepting BACEN restricted), which exhibited expansion of
24.3% in the quarter. In the same period, Liquidity Liabilities grew only 9.2%, influenced mainly by the
downslide in fundings by Interbank Deposits, of 40.2%.
Table 30. Liquidity Balance
Jun/07
Liquidity Assets (A)
Available Funds
Interbank Investments
Securities (except linked to Bacen)
Liquidity Liabilities (B)
Interbank Deposits
Liquidity Balance (A - B)
Sep/07
Dec/07
Jun/08
Sep/08
Dec/08
R$ million
Mar/09
123,972
4,437
51,614
67,921
79,865
5,146
74,719
125,468
4,366
51,419
69,683
80,448
5,603
74,845
125,726
4,352
51,124
70,250
77,415
5,144
72,270
154,080
4,790
72,689
76,602
105,963
6,247
99,716
136,011
5,181
54,283
76,546
98,675
5,578
93,097
153,563
6,847
71,092
75,624
91,649
6,309
85,339
197,855
5,545
119,408
72,902
105,195
14,065
91,130
234,520
7,516
131,796
95,208
114,858
8,406
106,452
44,107
45,019
48,312
48,117
37,336
61,914
92,660
119,662
Mar/08*
6.4 Securities Portfolio
The securities portfolio showed an expressive growth of 27.3% over the previous quarter and of 35.7% in
relation to March 2008. The consolidation of Nossa Caixa added R$ 22.6 billion to the securities portfolio
of Banco do Brasil. Disregarding the effect of Nossa Caixa, the growth of the securities portfolio would
have been 1.3% in the quarter. The table below presents the securities portfolio by category.
Table 31. Securities Portfolio by Category
R$ million
Share %
Balance
Jun/07 Sep/07 Dec/07 Mar/08* Jun/08 Sep/08 Dec/08 Mar/09 Mar/08 Mar/09
Securities
Available for Trading
Available for Sale
Held to Maturity
72,071
10,856
39,379
20,589
1,247
74,126
14,046
38,466
20,029
1,585
75,201
19,112
38,109
16,830
1,150
81,490
24,717
35,388
20,485
899
82,301
26,009
35,480
19,597
1,216
85,954
26,475
37,777
20,443
1,258
86,909
26,136
38,374
20,123
2,276
110,594
32,475
45,269
31,433
1,417
100.0
30.3
43.4
25.1
1.1
100.0
29.4
40.9
28.4
1.3
In the quarter it can be observed that there was a reduction of the time profile of the securities portfolio,
with reduction of the relative share of securities maturing from 5 to 10 years and those maturing in over 10
years.
Table 32. Securities Portfolio by Maturity - Market Value
R$ million
Jun/07
Sep/07
Dec/07
Mar/08
Jun/08
Set/08
Dec/08
Mar/09
Up to 1 year
Balance
Share %
26,707
37.7
27,694
38.2
30,945
41.8
29,059
36.0
26,613
32.8
27,206
32.1
27,232
32.2
35,555
32.5
1 to 5 years
Balance
Share %
37,351
52.8
37,919
52.3
38,197
51.6
37,700
46.8
37,085
45.7
40,609
47.9
39,465
46.6
55,949
51.1
5 to 10 years
Balance
Share %
5,217
7.4
5,473
7.5
3,518
4.7
9,603
11.9
13,077
16.1
11,594
13.7
12,543
14.8
12,295
11.2
Over 10 years
Balance
Share %
1,527
2.2
1,456
2.0
1,413
1.9
4,257
5.3
4,326
5.3
5,286
6.2
5,373
6.3
5,631
5.1
Total
70,801
72,542
74,073
80,619
81,101
84,695
84,612
109,430
6.5 Loan Portfolio
The loan portfolio of the National Financial System ended the first quarter of this year with a balance of R$
1,241.1 billion, considering free and direct resources, growth of 25.0% in twelve months, and 1.1% in
relation to December 2008. The Credit/GDP ratio reached 42.5% in this quarter, amount higher than the
one recorded in the same period of 2008 (35.5%) and in 4Q08 (41.3%). The contracted loans
accumulated in the quarter have not yet returned to the same level as 1Q08, but it shows signs of
recovery in relation to 4Q08.
As for BB's domestic loan portfolio, excluding the amounts of Banco Nossa Caixa - BNC (R$ 13.8 billion),
1Q09 performance was slightly higher than that of the Banking Industry, a 31.5% expansion in twelve
months and 1.8% over the last quarter. Foreign Portfolio (R$ 14.7 billion in 1Q09) grew 40.3% over 1Q08
and fell 2.6% in relation to 4T08, due to the appreciation of the currency in the period. Accordingly, the
Bank's total loan portfolio reached R$ 241.9 billion.
It is emphasized that as of the second half of 2008, the acquisition process of loan portfolios of other
financial institutions, particularly the Payroll Loans and the Car Loan Portfolios, as well as
mergers/acquisitions of other banks, intensified at BB. Considering only the organic growth of BB, the loan
portfolio would total R$ 223.6 billion, an increase of 29.8% over the same quarter of 2008 and of 1.6%
over 4Q08. The most expressive sum of operations carried out in the last three months was the
acquisition of the controlling interest of Nossa Caixa that entailed an increase of R$ 13.8 billion in the loan
portfolio – for further details about this portfolio, refer to the Nossa Caixa 1Q09 Report, available at the
Investor Relations website of BB.
The chart below compares the growth rates of BB's domestic portfolio, with and without the acquisitions,
and the banking industry.
66.9
47.2
40.0
29.1
42.6
29.7
25.0
13.9 12.3
0.0
TOTAL
SFN
Individuals
BB Country
0.0
Businesses
0.0
Agribusiness
BB Country w/o Acquisitions*
* E xcluded BESC/BEP ba lance a nd portfo lios acquire d from other banks
Figure 16. BB Domestic Portfolio Growth Rate vs. SFN
In SFN, loans granted with free resources, corresponding to 70.5% of the total, amounted to R$ 874.4
billion in March, an increase of 23.9% in twelve months. The business loan portfolio performance of
26.7% surpassed the performance of individuals (20.9%) and the respective balances were R$ 465.7
billion and R$ 408.7 billion.
Only in Banco do Brasil, the total loans to individuals reached R$ 61,138 million, but, if we not consider
the portfolios from BEP, BESC, BNC and portfolios purchased in the market (R$ 2,935 million in payroll
loan and R$ 737 million in car loans), this total drops to R$ 46,864 million, which corresponds to an
increase of 29.7% compared to the 1Q08 and 5.9% compared to 4Q08, doing the same adjustments in
the previous periods.
At the end of the 1Q09, business involving the acquisition of portfolios and inter-bank transactions
secured by portfolios, undertaken by BB totaled R$ 9.6 billion. Portfolio acquisitions - payroll and car loans
- totaling R$ 3.7 billion have been stated in BB's loan portfolio. In addition, R$ 6.0 billion in interbank
deposits secured by the loan portfolios of other institutions were posted in Inter-bank Investments, as
seen in the table that follows.
Table 33. Acquired Portfolios and Interbank Deposits with Credit Guarantee
R$ million
Mar/09
Payroll Loan
Vehicle Loan
Interbank with Credit Guarantee
2,935
737
5,972
Total
9,644
Corporate loans grew 47.2% in twelve months and 4.7% over December 2008, reaching to R$ 101,776
million, and if we disregard BEP, BNC, and BESC portfolios, variations will be 42.6% and 1.6%,
respectively.
The agribusiness portfolio remained practically stable in the quarterly comparison (0.9%), but with
appreciation of 13.7% in twelve months, with the total portfolio attaining R$ 64.360 million in Mar/09.
Table 34. Loan Portfolio
R$ million
Change (%)
Balance
Brazil
. Individuals
. Businesses
- MSE
- Other
Jun/07
Sep/07
Dec/07
Mar/08
Jun/08
Sep/08
Dec/08
Mar/09
On Mar/08 On Dec/08
133,019
137,626
149,366
162,261
180,365
189,301
209,693
227,201
40.0
8.3
27,904
29,486
31,998
36,620
40,503
43,435
48,811
61,138
67.0
25.3
56,345
59,693
65,485
69,118
78,252
85,343
97,192
101,776
47.2
4.7
21,390
22,340
24,622
25,675
29,234
32,027
34,900
37,403
45.7
7.2
34,955
37,353
40,863
43,443
49,018
53,315
62,292
64,373
48.2
3.3
48,769
48,447
51,883
56,524
61,611
60,524
63,690
64,287
13.7
0.9
- Individual
38,577
38,070
40,162
40,684
43,168
42,630
45,202
46,252
13.7
2.3
- Companies
10,192
10,377
11,721
15,839
18,442
17,894
18,487
18,035
13.9
(2.4)
. Agribusiness
Foreign
Total
12,214
12,558
11,373
10,499
9,717
12,900
15,115
14,726
40.3
(2.6)
145,233
150,184
160,739
172,760
190,082
202,201
224,808
241,926
40.0
7.6
Table 35. Credit Portfolio – Organic Growth
R$ billion
Chg. %
Mar/08
Dec/08
Mar/09
172,265
220,199
223,621
29.8
1.6
. Individuals
36,125
44,366
46,864
29.7
5.6
. Businesses
69,118
97,028
98,540
42.6
1.6
. Agribusiness
56,524
63,690
63,492
12.3
(0.3)
. Foreign
(2.6)
Banco do Brasil
On Mar/08 On Dec/08
10,499
15,115
14,726
40.3
Nossa Caixa
9,700
12,896
13,825
42.5
7.2
. Individuals
6,715
9,126
9,964
48.4
9.2
. Businesses
2,411
2,978
3,065
27.1
2.9
. Agribusiness
574
792
795
38.6
0.5
BESC
744
754
807
8.5
7.0
Portfolio Acquisition
495
3,854
3,673
642.2
(4.7)
-
744
737
-
(0.9)
. Car Loan
. Payroll Loan
Total
495
3,110
2,935
493.2
(5.6)
172,760
224,808
241,926
40.0
7.6
6.5.1 Individual Loan Portfolio
At the end of the 1Q09, credit to individuals represented 26.9% of the Domestic Portfolio, adding up to R$
61,138 million, a 67.0% increase in twelve months and of 25.3% over the preceding quarter, considering
the individuals portfolios of BESC, BEP and BNC. It is important to emphasize that the amount of the
individual loan portfolio of BNC (R$ 9,964 million) and BESC (R$ 637 million) are not added in the product
analysis and are separated in specific lines.
In relation to BNC, holder of the employees of the State of São Paulo payroll, the Payroll Loan is the most
relevant line in the individual portfolio, with the sum of R$ 6.4 billion, followed by the personal loan (R$ 1.8
billion). For further information about the loan portfolio of BNC, refer to the Nossa Caixa 1Q09 report
available at the Investor Relations website of BB.
Payroll loans have the largest share in the BB individual loan portfolio (36.0%), followed by credit cards
(14.6%), and car loans (13.7%). Of these three, both payroll loans and vehicle financing gained
significance in the portfolio; in 1Q08 they had a share of 34.9% and 9.7% of the total, respectively.
As for payroll loans, BB has maintained its leadership, accounting for 22.9% of the total of R$ 81,900 in
the entire Brazilian Banking Industry as of Mar/09. These transactions increased at greater rates in BB,
44.1% over Mar/2008 and 4.4% in relation to the prior quarter, as against 19.3% and 3.8% respectively of
the SFN, but they include R$ 2,935 million in acquired portfolios. In a simulation without the acquisitions,
growth was of 26.0% in twelve months and of 6.6% over December 2008, still greater than for the banking
industry.
652.3 thousand payroll loan transactions were recorded in 1Q09, at an average 39-month term and 2.36%
interest rate; the same quarter of 2008 witnessed 698.4 thousand transactions of an average 33.6-month
term and 2.44% interest rate.
In general, in the first quarter of the year, expenditures with taxes and education overburden families,
which generates an increase in the demand for credit lines of overdraft account that recorded a growth of
14.3% over 4Q08, as well as Consumer Finance Backed by Direct Deposits (10.3%) and Consumer
Finance (9.3%).
With a large base of account holders and partnerships, the Credit Card portfolio is the second most
relevant line of credit in the portfolio of BB. A minor downslide of 1.2% was verified in 1Q09 in relation to
Dec/08, reflecting seasonality of the year-end period in which the demand is very heated due to holidays.
However, in comparison with the same period of 2008, the performance is positive by 27.3%. Banco do
Brasil expanded its credit card base by 14.4% in the last 12 months, growing from 22.4 million in
March/08 to 25.7 million in this quarter.
As a result of BB's strategy to increase its share in car loans, this portfolio's balance keeps growing: 4.7%
over 4Q08 and 97.7% in 12 months. Accordingly, the total sum reached R$ 7,005 million. Not considering
the sum of R$ 737 million related to acquisition of portfolios, the balance would be R$ 6.268 billion and
the growth rates would be of 76.8% over March 2008 and of 5.3% in the quarterly comparison.
In Mar/08, vehicle financing operations presented an average term of 45.03 months, average value per
contract of R$ 20,100 and average interest rate of 1.62%. With regard to leasing transactions, in the same
period, the average term was of roughly 50.07 months and an average ticket of R$ 29,859 and a 1.59%
average interest rate. Around 15% of BB's operations are leasings.
Table 36. Individual Loan Portfolio
R$ million
Change on (%)
Balance
Dec/07
Direct Consumer Credit (CDC)
Payroll Loan
Consumer Finance
Consumer Loan Backed by
Direct Deposits
Mortgage
Vehicles Loan¹
Credit Card
Overdraft Accounts
Microcredits
Besc
BNC
Others
Mar/08
Jun/08
Sep/08
Dec/08
Mar/09
s/Mar/07
s/Dec/08
18,521
11,878
3,884
19,869
12,772
3,892
21,722
14,020
4,079
23,041
14,539
4,515
26,491
17,626
4,958
28,138
18,411
5,418
41.6
44.1
39.2
6.2
4.4
9.3
2,759
3,205
3,623
3,986
3,906
4,309
34.5
10.3
3,033
3,801
2,298
558
3,786
3,544
5,885
2,704
552
4,067
7
4,702
6,463
2,697
558
4,354
30
5,607
6,564
2,717
535
554
4,387
80
6,694*
7,586
2,468
511
591
4,390
167
7,005
7,493
2,822
548
637
9,964
4,363
97.7
27.3
4.4
(0.7)
7.3
108.5
4.7
(1.2)
14.3
7.2
7.8
(0.6)
43,435
48,811
61,138
67.0
25.3
Total
31,998
36,620
40,503
¹ Contains balance of Finame Pro-Caminhoneiro PF for R$ 118.0 million.
Loans for the lower income population – Aiming to expand the strategic focus on the Microcredit
segment, as well as greater synergy in the implementation of the strategies defined for Lower Income, in
May/08, Banco do Brasil S.A. approved the creation of Lower Income Directorship - Diren, which
assembled, as of June, in a single structure, attention to clients who have an income of up to 1 Minimum
Salary. The new Directorship added Banco Popular do Brasil-BPB, the Sustainable Regional
Development Management-DRS, the management of the network of BB/BPB agents and the loan
portfolios of clients from this segment.
By the end of the first quarter of 2009, the microcredit portfolio had a balance of R$ 548 million. In 1Q09,
358.6 thousand operations were contracted with an average amount of R$ 483.10.
6.5.2 Business Loan Portfolio
In the business segment, BB closed Mar/09 with a balance of R$ 101,776 million, an increase of 47.2% in
twelve months and 4.7% in relation to the prior quarter. This amount represent 44.8% of the Domestic
Portfolio and it considers BESC, BEP and BNC acquired portfolios. It is important to show that the
amounts referred to BESC (R$ 171 millions) and BNC (R$ 3,065 millions) are separeted and therefore
they are not added in the detailed portfolio, shown in the table below.
In relation to Nossa Caixa portfolio (R$ 3.1 billion), the main product is the Pre-Approved Credit which
represents 38.1% of the total. For further information about BNC loan portfolio, refer to the Nossa Caixa
1Q09 Report, available in BB Investor Relations website.
Table 37. Business Loan Portfolio
R$ million
Change (%)
Balance
Dec/07
Mar/08
Jun/08
Sep/08
Dec/08
Mar/09
On Mar/08 On Dec/08
Working Capital
Investment
Receivables
Pre-Approved Credit
ACC/ACE
BNDES Exim
Credit Cards
Overdraft Accounts
Besc
BNC
Other
26,052
13,379
11,224
1,680
7,561
3,299
495
106
1,690
30,137
14,286
10,713
1,836
6,512
3,379
540
136
1,580
37,393
15,520
11,098
2,205
6,356
3,342
605
146
1,588
40,737
17,237
11,467
2,394
7,912
3,054
764
184
177
1,416
45,199
19,183
11,887
2,548
11,101
4,417
871
130
164
0,05
1,691
46,630
19,415
11,282
2,565
11,807
4,105
902
155
171
3,065
1,679
54.7
35.9
5.3
39.7
81.3
21.5
66.9
14.1
6.3
3.2
1.2
(5.1)
0.7
6.4
(7.0)
3.5
18.6
4.2
(0.7)
Total
65,485
69,118
78,252
85,343
97,192
101,776
47.2
4.7
Working Capital operations are the most significant and participate with 47.3% of the total. The demand
for working capital increased with the deterioration of the global economic crisis, to the detriment, above
all, of the lines of receivables. An increase of 3.2% was observed in the quarterly comparison and of
54.7% against 1Q08.
The impact of the crisis has not yet strongly influenced the lines of investments and the growth rate was
1.2% over 4Q08 and 35.9% in twelve months. This credit facility accounted for 19.7% of the total business
loan portfolio.
Foreign Trade Loans - The Advance on Export Contracts (ACC/ACE) end the quarter at R$ 11,807
million, growth of 81.3% in the annual comparison and of 6.4% in the quarterly comparison. These
measures are sensitized by the exchange behavior which depreciated 32.4% in 1Q09 (commercial dollar /
st
st
rate on march 31 2009 R$ 2.3144) over 1Q08 (commercial dollar / rate on march 31 2009 R$ 1.7483).
In 1Q09, Banco do Brasil maintained its leadership in the export and import exchange market, with
volumes of US$ 10.6 billion and US$ 6.7 billion, respectively. In the comparison with 1Q08, BB increased
its market shares from 26% to 31.1% (exports) and from 24.5% to 25.4% (imports).
With the cool-down of the global economy, which decreased the demand for Brazilian products, a
downslide was verified in the volume of ACC/ACE contracted against 4Q08 of 32.8%, but against the
same quarter of 2008 there was growth of 4.7%. It is emphasized that signs of recovery already appeared
in the first quarter: in Jan/09 the financed volume was US$ 621 million rising to US$ 1,033 million in
March.
The table below provides details of foreign trade loan transactions.
Table 38. ACC/ACE Average Volume per Contract
Change (%)
ACC/ACE
4Q07
Volume Contracted (US$ million)
Quantity of Contracts
Average Volume per Contract (US$ thousand)
1Q08
3,800
6,279
605
2Q08
2,219
5,373
413
3Q08
3,400
5,322
639
4Q08
3,907
5,760
678
1Q09
3,457
4,097
844
On 1Q08 On 4Q08
2,325
3,768
617
4.8
(29.9)
49.4
(32.8)
(8.0)
(26.9)
Loans to SMEs - In the delivery of services to SMEs, Banco do Brasil continued to act as principal
partner of the segment. At the end of the first quarter of 2009, BB served 1.82 million micro and small
business clients. Around 585 thousand received differentiated service rendered by specialized
relationship managers.
BB has also been consolidating its share of the cooperativist credit segment, delivering products and
services tailored to the requirements of this market. The products include the Compe/SPB Integration
Service, whereby credit cooperatives and its cooperative members have access to the System for the
Clearing of Checks and Other Instruments and to the Payment Settlement and Transfer System (SPB).
This service allowed bank products to be made available to around 307.4 thousand cooperative members,
associated with 325 credit cooperatives.
In March 2009, BB supported 181 Local Productive Arrangements (APL), delivering services to 15.1
thousand ventures. A sum of R$ 1.23 billion was made available and contributed toward the sustainable
growth of the locations where the APLs are included, with R$ 749.8 million in loans for working capital and
R$ 204.3 million to finance investments. The amount of R$ 152.5 million was set aside for foreign trade
and R$ 126.2 million earmarked for agribusiness.
The balance of transactions in favor of SMEs, in March 2009, was of R$ 35.9 billion, a 40% increase as
compared to March 2008.
In all, working capital and investment loans rose to R$ 34.8 billion by year-end, of which R$ 7.9 billion
were allocated to manufacturing industries (22.8%), R$ 17.9 billion to trade (51.4%), and R$ 9 billion to
service provision (25.8%).
Table 39. SME Credit Products
R$ million
Change (%)
Balance
Dec/07
Mar/08
Jun/08
Sep/08
Dec/08
Mar/09
On Mar/08 On Dec/08
Working Capital
Investment
Foreign Trade
BNC
16,932
6,387
1,303
-
17,752
6,709
1,213
-
20,069
7,476
1,689
-
21,645
8,438
1,944
-
23,616
9,314
1,970
-
25,159
9,652
1,143
1,450
41.7
43.9
(5.8)
-
6.5
3.6
(42.0)
-
Total
24,622
25,675
29,234
32,027
34,900
37,403
45.7
7.2
It is worth emphasizing the allocation, at the end of March 2009, of R$ 25.1 billion for working capital,
which represented growth of 41.7% in relation to the same period of 2008. Among the credit facilities, the
following should be highlighted:
a) BB Giro Rápido aims to satisfy the need for working capital of the segment of micro and small
businesses, without requiring tangible collateral. In 1Q09, this line of credit reached a balance of R$
6.3 million, representing 25% of the working capital block and annual growth of 21.5%;
b) the "BB Giro Empresa Flex", which purpose is supplying working capital and financing the acquisition
of goods and services. In this credit line, the customer can determine the form of loan repayment in
accordance with the company's cash flow. This credit line has reached the balance of R$6.1 billion,
which represents growth of 165.8% in relation to 1Q08.
Financing investments reached R$ 9.7 billion in the 1Q09, an increase of 43.9% in relation to the same
period of 2008. These also deserve highlighting:
a) the Proger Urbano Empresarial program, the key credit facility for investments by SMEs, which
showed a record balance of R$ 5.4 billion, a 27.1% rise as compared to 1Q08.
b) the BNDES Card, a product in which BB is leader in the amounts disbursed in 1Q09, with R$ 162.4
million, and in the issuance of cards, with 63% of the market;
c) Finame Empresarial, which presented a balance of R$ 919.3 million, an increase of 76.5% in relation
to 1Q08.
6.5.3 Agribusiness Loan Portfolio
Agribusiness is one of the main sectors of the Brazilian economy, of fundamental importance to the
growth of the Country. In its role as an agent of public policies, Banco do Brasil represents a link between
the government and the rural producer, acting as the largest financier of Brazilian agribusiness in all its
segments and in all stages of the productive chain, from the small farmer to the large agroindustrial
companies.
The figure below shows not only the importance of agribusiness participation in the Brazil’s total GDP but
also the total number of labors created in brazilian market because of the agribusiness.
28.9%
76.5%
37.0%
23.5%
71.1%
63.0%
Cattle
Agriculture
% GDP - Other Activities
Other Jobs
Agriculture Jobs
% GDP - Agribusiness
Source: IPEA – Instituto de Pesquisa Econômica Aplicada (Economic Applied Research Institute)
Figure 17. Agribusiness Participation in GDP and in Labor Market
In the first quarter of 2009, the Brazilian Trade Balance decreased 41.0%, reflecting the lower worldwide
demand caused by the global economic crisis. The balance attained US$ 3.0 billion as opposed to US$
5.1 billion in 1Q08. In agribusiness there was growth of 9.5% attaining the amount of US$ 3.0 billion,
minimizing losses of the Brazilian Trade Balance.
US$ billion
60.0
44.8
34.1
33.7
38.4
42.7
46.1
49.7
40.0
24.7
10.2
2004
2005
2006
Agribusiness
2007
2008
3.0
1Q09
Brazil
Source: MAPA – Ministério da Agricultura, Pecuária e Abastecimento (Ministry of Agriculture, Cattle and Supply)
Figure 18. Trade Balance (FOB)
The tables below reflect the flow of exports broken down by key products and Brazil's share in
international agribusiness.
Table 40. Exports
Soybeans and Related Products
2005
2006
2007
2008
US$ million
1Q09
9,477
9,308
11,381
17,980
2,506
2,479
Meat
8,066
8,641
11,295
14,545
Leather, Hides and Shoes
3,069
3,471
3,554
3,140
501
Sugar
4,684
7,772
6,578
7,873
1,631
Forest Products
7,197
7,881
8,819
9,326
1,681
Coffee, Mate and Spices
2,669
3,535
4,093
4,971
1,042
Fruit Juice
1,245
1,570
2,374
2,152
464
Tobacco
1,707
1,752
2,262
2,752
411
Other Products
Total
5,487
5,495
8,059
9,066
1,880
43,601
49,424
58,416
71,806
12,595
Source: MAPA – Ministério da Agricultura, Pecuária e Abastecimento (Ministry of Agriculture, Cattle and Supply)
Table 41. Brazil’s participation on Global Agribusiness
Production
st
Export
st
% Global Market
Coffee
1
1
32%
Orange Juice
1st
1st
85%
Cattle
2nd
1st
26%
Sugar Cane
1st
1st
42%
Soybeans
2nd
2nd
36%
Poultry
3rd
1st
44%
th
nd
Corn
4
2
13%
Cotton
5th
4th
8%
Source: USDA – PSD Online
The sector’s performance in the last few years is due to the permanent quest for new technologies and for
valuing the services provided by the professionals from this area, always aiming at improving profitability
and continuity in the enterprises. In the following chart, the increased productivity per planted area, as a
result of gains in productivity, can be visualized.
180
350
300
140
250
120
100
200
80
150
60
100
40
50
20
0
0
94/95 95/96 96/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09
Production (million ton.)
Figure 19. Production vs. Planted Area
Area (million ha)
Productivity (ton./ha) - %
Productivity (ton/ha)-%
Production (million ton)
160
Agribusiness at BB
Regarding the distribution of agribusiness transactions by region of the country, continuity was verified in
the distribution among Brazilian regions, with the Southern and Southeastern regions appearing as most
relevant.
Table 42. Agribusiness Loan Portfolio by Region
Region
Share - %
North
Northeast
Midwest
Southeast
South
2.8
5.9
22.9
34.0
34.3
Rural credit finances the costs of producing and marketing of agricultural products, stimulates rural
investments, including warehousing, processing and the industrial transformation of agricultural products.
Furthermore, it encourages the introduction of rational methods in the productive system.
The rural portfolio of Brazilian Banking Industry attained R$ 106,915 billion in Mar/09, an increase of
15.9% in twelve months and of 0.5% in relation to Dec/08. At BB, the balance of the agribusiness portfolio
attained R$ 63,492 million, expansion of 12.3% in the year, and on the quarterly basis, practically stable,
small loss of 0.3%. In Mar/09, the rural portfolio represented 28.3% of BB's domestic portfolio as opposed
to 34.8% in Mar/08.
The analysis of the agribusiness portfolio contained in the following tables does not consider the amount
of R$ 795 million of the agribusiness portfolio of BNC. For further information about the loan portfolio of
BNC, verify Nossa Caixa - Net Income 1Q09 report, available on the Investor Relations website of BB.
Loans for financing costs and marketing, intended to finance the goods and services needed for the
production of crops and livestock production, account for 67.6% of the Agribusiness Portfolio. The loans
for investments, intended for the modernization of the productive activity, accounted for 32.4% of this
portfolio.
Table 43. Agribusiness Loan Portfolio by Purpose
R$ million
Change (%)
Dec/07
Mar/08
Jun/08
Sep/08
Dec/08
Mar/09
On Mar/08 On Dec/08
Costs
Investment
Marketing
Other
19,918
20,111
10,884
971
19,999
20,656
14,915
955
21,396
22,140
17,094
980
21,751
21,419
16,248
1,106
24,257
20,135
17,474
1,824
24,389
20,587
16,629
1,887
22.0
(0.3)
11.5
97.6
0.5
2.2
(4.8)
3.4
Total
51,883
56,524
61,611
60,524
63,690
63,492
12.3
(0.3)
Proger Rural is a product that offers fixed loans for agricultural and cattle breeding funding, besides
financial support for fixed and semi-fixed investments; and the National Family Agriculture Empowerment
Program - Pronaf is aimed at the financing of agricultural activity funding. These two products added up to
R$ 15,545 million in March 2009, growing 16.5% related to the same period of the previous year, and
showing a decrease of 3.0% related to the previous quarter.
FCO Rural offers a financial supplement for working capital and costs for the rural producer of the Middlewest region of Brazil. Transactions in the product grew 35.7% in the past twelve months, totaling R$ 5,810
million in March 2009.
The BNDES/Finame Rural products have the objective of financing investments in the modernization of
machines and equipment intended for rural production. Transactions with these products totaled R$
4,441.
Table 44. Agribusiness Loan Portfolio by Product
R$ million
Change (%)
Dec/07
Mar/08
Jun/08
Sep/08
Dec/08
Mar/09
On Mar/08 On Dec/08
Agricultural and Livestock Costs
Loans to Companies
Pronaf / Proger Rural
FCO Rural
BNDES / Finame Rural
Others
15,336
8,283
12,890
4,142
4,850
6,382
15,384
12,814
13,348
4,283
4,888
5,807
16,695
15,372
14,233
4,439
5,107
5,765
16,288
14,668
13,955
4,773
4,850
5,990
17,813
14,862
15,088
5,634
4,561
5,730
17,898
14,112
15,545
5,810
4,441
5,685
16.3
10.1
16.5
35.7
(9.1)
(2.1)
0.5
(5.1)
3.0
3.1
(2.6)
(0.8)
Total
51,883
56,524
61,611
60,524
63,690
63,492
12.3
(0.3)
The following table shows the balance of the loan transactions intended for agribusiness by financed item.
Table 45. Agribusiness Loan Portfolio by Financed Items
R$ million
Chg. %
Items Financed
Mar/08
Part.%
Dec/08
Part.%
Mar/09
Part.%
On Mar/08 On Dec/08
Livestock
Soybeans
Corn
Sugar Cane
Machinery and Equipment
Coffee
Rice
Poultry
Fertilizers
Cotton
Manioc
Pork
Others
6,602
4,033
2,818
3,227
1,199
1,220
983
1,018
511
506
536
493
33,378
11.7
7.1
5.0
5.7
2.1
2.2
1.7
1.8
0.9
0.9
0.9
0.9
59.1
8,043
5,281
3,624
3,596
1,378
1,879
1,234
1,552
425
624
548
518
34,988
12.6
8.3
5.7
5.6
2.2
3.0
1.9
2.4
0.7
1.0
0.9
0.8
54.9
8,021
5,100
3,520
3,527
1,317
2,034
1,284
1,606
322
585
529
590
35,057
12.6
8.0
5.5
5.6
2.1
3.2
2.0
2.5
0.5
0.9
0.8
0.9
55.2
21.5
26.4
24.9
9.3
9.8
66.8
30.6
57.7
(37.0)
15.7
(1.3)
19.6
5.0
(0.3)
(3.4)
(2.9)
(1.9)
(4.4)
8.3
4.1
3.5
(24.3)
(6.2)
(3.6)
13.7
0.2
Total
56,524
100.0
63,690
100.0
63,492
100.0
12.3
(0.3)
In its work of financing Brazilian agribusiness, Banco do Brasil reaches all the segments, from the small
producer to the large agro-industrial companies. The table below reveals this work, showing that while
financing mini and small producers accounts for 87.8% of the total of contracts (32.7% of the amount
contracted), the transactions with the other agents show a 67.3% share of the amount contracted.
Table 46. Funds Released for the 08/09 Crop by Customer Size
R$ million
Amount Contracted Amount Contracted - %
Qty. Contracts
Qty. Contracts - %
Mini
Small
Medium and Large Sized
Cooperatives
365,919
429,708
109,677
552
40.4
47.4
12.1
0.1
2,075
5,365
13,743
1,580
9.1
23.6
60.4
6.9
Total
905,856
100.0
22,762
100.0
In the figure below we present the distribution of the balance of the Agribusiness Loan Portfolio by type of
client.
R$ billion
2004
18.0
40.2
45.2
45.5
2007
2008
1Q09
11.7
30.5
36.6
2005
2006
5.3
4.2
25.9
18.5
8.5
Individuals
Businesses
Figure 20. Agribusiness Loan Portfolio by Customer
Next, the Agribusiness Loan Portfolio by Funding Sources is shown.
Demand Deposits
FAT
Mar/08
Jun/08
FCO
Sep/08
Dec/08
BNDES/Finame
4,849
5,202
4,857
5,553
4,885
3,792
4,058
3,857
4,467
4,338
7,548
6,329
7,258
5,623
5,876
7,230
7,492
8,550
Saving Deposits
8,955
7,836
31,862
25,375
27,388
31,787
8,356
7,949
10,028
9,015
11,385
24,141
R$ million
Others
Mar/09
Figure 21. Agribusiness Loan Portfolio by Funding Sources
The main funding source for the agribusiness portfolio continued to be savings, which in 1Q09 attained
the amount of R$ 31.9 billion, compared to R$ 24.1 in the same period of 2008. It is emphasized that
these resources account for 50.2% of the total, against 42.7% in 1Q08, growth of 32.0% in the sum. The
funds from FCO also experienced growth (34.2%) YoY starting to represent 11.9% of the total, against
9.9% in 1Q08.
The Bank uses funding from Poupança Ouro (savings) and Demand Deposits, Fund for Worker
Assistance - FAT, the Federal Treasury, Fund for Worker Assistance - Funcafé, and Constitutional Fund
for the Financing of the Center-West - FCO, for low-rate agricultural loans. In order to make this
intermediation feasible, the Federal Treasury or Fundo Constitucional pays the Bank an equalization fee
which is the difference between the sum charged to the borrower and the funding costs, credit risk and
administrative costs and taxes.
Moreover, weighting factors are set for financing obtained with funds from demand and savings deposits.
The weighting factor is a multiplier that helps to fulfill liabilities and raise revenues upon the release of
funds in the Bank's cash for investments. The following figure shows a history of the revenues received by
way of interest rate equalization and weighting factor.
R$ million
494
449
441
378
301
296
287
275
89
74
78
85
2Q07
3Q07
4Q07
1Q08
Equalization Revenues
104
2Q08
60
38
32
3Q08
4Q08
1Q09
Weighting Factors
Figure 22. Equalization Revenues and Weighting Factors
In this quarter the balance of equalization revenues, including weighting factor, was down 9.1% in
comparison with the preceding quarter, basically due to the lower number of business days in 1Q09.
However, in the YoY comparison growth of 63.3% was observed in these revenues, reflecting the
increase of 41.1% in the balance of equalizable funds in the same period.
Table 47. Equalizationable Resources from the Loan Portfolio
R$ million
Change %
Dec/07
Mar/08
Jun/08
Sep/08
Dec/08
Mar/09
On Mar/08 On Dec/08
Equalizationable Resources
Costs
Investments
Marketing
Non-Equalizationable Resources
15,008
9,980
4,877
151
36,876
15,744
10,291
5,124
330
40,780
15,789
9,775
5,658
357
45,822
16,620
10,545
5,679
396
43,904
21,204
13,858
6,217
1,129
42,486
22,209
14,493
6,596
1,120
41,283
41.1
40.8
28.7
239.8
1.2
4.7
4.6
6.1
(0.8)
(2.8)
Total Loan Portfolio
51,883
56,524
61,611
60,524
63,690
63,492
12.3
(0.3)
The Bank has risk mitigation mechanisms to the agricultural cost portfolio. In the 2008/2009 crop, up to
March/2009, 65.0% of the loan transactions were hired with Agriculture Insurance or Proagro, in the
amount of R$ 12,792 billion. Of this amount, R$ 4,430 million were guaranteed by Agricultural insurance
from Proagro and R$ 3,866 million by Aliança do Brasil and by the reinsurance companies indicated
below.
The following chart shows the increase in percentage in the use of Agriculture Insurance and Proagro.
Contracts Crop 08/09
Crop 08/09
Reinsurance
4%
11%
IRB
SCOR
SWISS RE
PARTNE R RE
MUNICH RE
CATLIN
MAPFRE RE
HANNO VER
TOTAL
35%
14%
56%
65%
15%
%
25
15
15
15
10
4
3
3
90
Agricultural Costs with mitigation
Agricultural Costs witho ut mitigation
Agricultural Costs
Wo rking Capital
Investment
Agroindustrial Credit
Marketing
Figure 23. Agricultural Insurance and Proagro
The following figure shows the evolution of the operations contracted with mitigation since the crop
2006/2007.
Crop 2006/2007
Crop 2007/2008
50%
42%
58%
50%
Agricultural Costs with Mitigation
35%
65%
69%
Agricultural Costs without Mitigation
Figure 24. Evolution of contracted operations with mitigation
Crop 2008/2009
The amount predicted to 2009/09 crop, of R$ 30,861 million, is 24.6% higher than the volume lended in
the crop of 2007/08 (R$24,772 million). Of that total, 25.4% refer to family agriculture and 74.6% are set
aside for entrepreneurs. At the end of 1Q09, BB loaned 83.2% of the total estimated for the current crop.
It is also emphasized that the new contracts are concentrated in sources of equalizable funds, as
presented previously.
The following table displays the 2008/2009 Crop Plan, at estimated and realized values.
Table 48. 2008/2009 Crop Plan
R$ million
2008/2009 Crop
Foreseen
Purpose
Business
Familiar
Realized
% Realized
Total
(jul to dec/08)
18,900
81.6
3,477
69.1
3,294
123.7
Total
Costs
Investment
Marketing
18,037
2,320
2,663
5,131
2,710
0
23,168
5,030
2,663
Total
23,021
7,840
30,861
25,671
83.2
The four main agriculture cultures cost is detailed below, with the percentage share crop cost for
2008/2009 and the concentration per state of these crops.
Table 49. Costs – Transaction Profile
Soybeans
Corn
Rice
24.01%
17.36%
5.65%
PR
RS
GO
MS
36.46%
20.65%
11.90%
10.54%
PR
RS
SC
MG
25.52%
20.31%
17.29%
16.96%
RS
SC
MS
PR
74.64%
14.53%
1.97%
1.78%
Cotton
1.34%
MT
SP
BA
GO
34.74%
16.94%
12.98%
12.65%
Below, we present the price and costs from corn and soybean crop to the 2008/2009 crops. The relation is
represented by the percentage of revenues net of the costs involved in each crop.
Margin - Soybean
Rel ation Price Cost - Soybean
0.73
80
70
0.68
69.4
62.3
0.62
62.8
60
54.1
55.1
0.51
44.3
R$/ kg
%
50
40
0.42
0.44
0.40
0.35
30
0.26
0.28
0.38
0.27
20
10
0
2004/2005
2005/2006
2006/2007
2007/2008
2008/2009
2004/2005 2005/2006 2006/2007 2007/2008 2008/2009 2009/2010
Crops
2009/2010
Crops
Price
Margin - Corn
Rel ation Price Cost - Corn
90
80
69.1
64.7
62.8
0.22
0.22
R$/kg
50
40
30
0.17
0.29
0.31
0.24
0.25
55.2
60
%
0.31
76.3
73.2
70
Cost
0.19
0.17
0.16
0.15
20
10
0
2004/2005
2005/2006
2006/2007
2007/2008
2008/2009
2009/2010
Crops
Figure 25. Price/cost relation between soybean and corn
2004/2005 2005/2006 2006/2007 2007/2008 2008/2009 2009/2010
Crops
Price
Cost
6.6 Tax Credits
In 1998, BB went to court with an application for the full carryforward of accumulated tax loss of IT and of
negative bases of CS. Since then, the Bank has offset these tax losses in full against income tax and
social contribution taxable income and has made judicial deposits of the taxes otherwise due (on 70% of
the amount offset).
In May 2007, the tax credits that had been written off since the beginning of the lawsuit were reactivated,
in the sum of R$ 4,913.2 million, in contra account to the re-formation of provision relating to the portion of
70% of Income Tax and Social Contribution, for which judicial deposits were formed.
The Tax Credit balance, including consolidated figures of BNC, reached R$ 20.4 billion in March 2008,
23.7% higher than that recorded in Dec/08. In the annual comparison the growth of the stock of tax credits
was 45.3%. It is important to emphasize that, according to the material fact published in 04/29/2009,
Banco do Brasil activated in this quarter tax credits in the total amount of R$ 1,213 million. The
recognition is due to the succeeded perspective of the Direct Action of Inconstitucionality (ADIN), number
4101/DF, against the raise of the CSLL rate of the finance sector, from 9% to 15%.
Tax credits originating from temporary differences represent 74.4% of the stock. Temporary differences
result from the fact that the tax legislation does not allow the inclusion of certain expenses in the
calculation basis of taxes at the time they occur (accrual basis), but rather at the time they are financially
settled (cash basis). The takeover of Besc alone originated the recording of R$ 194.2 million in tax credit
of this nature.
Table 50. Breakdown of Tax Credit
Temporary differences
Social contribution to offset
Income and social contribution taxes – Lawsuit
Other*
Total Tax Credit
Income Tax / Lair - %
Jun/08
Sep/08
Dec/08
R$ million
Mar/09
8,395
565
4,846
245
8,872
274
4,895
297
9,560
129
4,959
345
11,018
135
4,932
415
15,188
70
4,691
464
13,826
14,051
14,337
14,994
16,499
20,413
28.8
30.0
28.8
22.7
25.5
29.8
Jun/07
Sep/07
Dec/07 Mar/08**
7,707
1,011
4,913
115
7,959
873
4,893
153
7,995
733
4,868
229
13,746
13,877
33.4
28.3
* Includes Tax Losses and Negative Bases and Mark-to-Market, Tax Credits Abroad and Pasep and Cofins
** From Mar/08 the series considers the Economic Consolidated information
The table above shows the opening of the stock of tax credits by type. The IR/Lair ratio ended March at
29.8%, as opposed to 25.5% in 4Q08 and 30.0% in 1Q08.
Also in relation to the tax aspects, it is important to emphasize the contracting of a Tax Hedge operation
as from 4Q08. Banco do Brasil contracted hedge operations in a higher sum than that of investments
maintained abroad (over hedge), with the objective of annulling the effect of exchange variance on the
result, considering the fiscal impacts of these operations. Further details about the Tax Hedge and about
the motives that led Banco do Brasil to contract it can be consulted in chapter 5.3.1 (Details of the
Reallocations).
In the first three months of 2009 it was observed the reduction of the deferred tax credits in the amount of
R$ 440 million. For 2009 the tax credit realization estimate, in par values, is R$ 3,578 million.
6.7 Analysis of Liabilities
The volume of deposits taken by Banco do Brasil maintained the course of growth observed in recent
quarters and ended 1Q09 at R$ 305 billion, which represents an increase of 12.6% in the quarter and
60.7% in the annual comparison. The acquisition of the controlling interest of Banco Nossa Caixa added
R$ 36.6 billion in deposits to the Bank's base, with an emphasis on R$ 21.2 billion in Time Deposits, R$
11.5 billion in Saving Deposits and R$ 3.9 billion in Demand Deposits.
Disregarding the consolidation of Nossa Caixa, the deposit base of Banco do Brasil would have exhibited
a slight downslide in the quarter, of 0.90%. This behavior is seasonal: normally the deposit base exhibits
strong growth in the last quarter of each year, and stability in the first quarter of the subsequent year. In
annual terms, even if we deduct the deposits of Nossa Caixa, the total base would have exhibited growth
of 41.4%, with an emphasis on 22.7% of growth in funding by savings and of 72.9% in time deposits.
Table 51. Liabilities
Jun/07
Sep/07
Dec/07
Mar/08*
Jun/08
Sep/08
Dec/08
R$ million
Mar/09
Deposits
Demand Deposits
Savings Deposits
Interbank Deposits
Time Deposits
Investment Deposits
Money Market Funding
Foreign Borrowing
Domestic Onlending
Other Liabilities
164,545
36,841
40,831
5,146
81,427
300
74,719
4,841
15,240
60,399
22,305
172,180
38,712
43,831
5,603
83,640
394
74,845
4,597
16,528
60,436
23,065
188,282
51,311
45,839
5,144
85,520
468
72,270
4,131
17,487
60,778
24,262
189,751
44,142
48,112
6,247
90,939
310
99,716
4,510
18,250
76,558
25,407
195,216
43,603
49,096
5,578
96,495
443
93,097
5,270
19,255
77,295
26,371
229,810
42,955
52,693
6,309
127,582
270
85,339
7,672
19,640
88,523
27,889
270,841
51,949
54,965
14,065
149,618
243
91,130
11,106
22,436
95,822
29,937
305,002
47,276
70,567
8,406
178,487
266
106,452
13,065
22,220
114,327
30,859
Total Liabilities
342,049
351,651
367,210
414,193
416,503
458,873
521,273
591,925
The table below shows how the growth of deposits has influenced the funding availability of Banco do
Brasil. The indicators detail how the loan portfolio is backed both by deposits, and by other forms of
funding, such as onlending from BNDES, resources from financial and development funds, foreign
borrowings, and others.
Table 52. Sourcers and Uses
R$ million
Change %
Balance
Mar/08
Funding Total
Total Funding
Domestic Onlending
FCO (Subordinated Debt)
Foreign Borrowing1
Compulsory Deposits
Net Loan Portfolio
Loan Portfolio
Disponibilidades
Index - %
Net Loan Portfolio / Total Deposits
Net Loan Portfolio / Total Funding
Available Funds / Total Funding
1
Dez/08
Mar/09
194,737
189,751
18,250
2,125
10,405
5,307
(31,102)
161,399
172,760
(11,361)
33,338
298,745
270,841
22,436
2,458
11,772
12,120
(20,882)
210,181
224,808
(14,627)
88,565
333,823
305,002
22,220
3,741
14,371
14,032
(25,543)
225,070
241,926
(16,856)
108,753
85.1
82.9
17.1
77.6
70.4
29.6
73.8
67.4
32.6
s/Mar/08
71.4
60.7
21.8
76.0
38.1
164.4
(17.9)
39.4
40.0
48.4
226.2
s/Dez/08
11.7
12.6
(1.0)
52.2
22.1
15.8
22.3
7.1
7.6
15.2
22.8
Includes Foreign Borrowings, Obligations for Securities Abroad, Obligations for Foreign Onlendings and Hybrid Capital and Debt Instruments
The Net Loan Portfolio / Total Funding index ended 1Q09 at 67.4%, as opposed to 70.4% in the previous
quarter and 82.9% in comparison with the same prior-year period. Cash and cash equivalents, measured
by the difference between the total funding and the net loan portfolio, reached R$ 108.7 billion, as
opposed to R$ 88.6 billion in the prior quarter and R$ 33.3 billion in 1Q08. At the end of the quarter, cash
and cash equivalents represented 32.6% of the Bank's total funding.
The reduction of the ratio of Loans / Deposits was influenced mainly by the growth of Deposits at a faster
pace than that of the loan portfolio, mainly due to the consolidation of Nossa Caixa, besides the measures
adopted by the Central Bank, which were reflected in the release of compulsory deposits. The behavior of
the indicators above indicates that Banco do Brasil has increased the availability of funds that can be
used to guarantee the growth of the loan portfolio.
6.8 Deposits and Money Market Funding
Banco do Brasil's market market borrowing reached R$ 411.5 billion in March 2009, a robust growth of
13.7% in the quarter and of 42.1% in relation to March 2008. Time deposits and saving deposits are
among the main funding sources of Banco do Brasil, and among those that recorded the highest
expansion rates, both on a quarterly and on an annual basis. The expansion of business by means of
these funding instruments results both from strategic orientation and from the migration of deposits from
other financial institutions, due to the deterioration of the international crisis in the second half of 2008 and
the image of solidity of Banco do Brasil.
In addition, the funding base was increased by the consolidation of Nossa Caixa. The impact on the main
lines is detailed below:
- Total Borrowings: R$ 44,848 million
- Demand deposits: R$ 3,891 million
- Savings deposits: R$ 11,515 million
- Interbank deposits: R$ 3 million
- Time deposits and investments: R$ 21,236 million
- Money Market Borrowing: R$ 8,202 million
Disregarding the abovementioned impacts, the total fundings would have advanced 1.3% in the quarter.
The figure below shows the growth of fundings:
R$ billion
411 .5
362 .0
289 .5
149 .9
44.1 51.9 47.3
70.6
48.1 55.0
Demand Deposits
Saving
Deposits
6.2
14.1
Interbanking
Deposits
Mar/08
Figure 26. Deposits and Market Funding
91.2
8.4
178 .8
99.7 91.1
106 .5
Time and Investment Money Market
Deposits
Borrowing
Dec/08
Mar/09
Total
We present below the market shares of Banco do Brasil in the deposits and money market funding of the
National Financial System *
R$ million
Market S hare - %
Figure 27. Market Share of BB Funding
20.3
Jun/08
54,965
49,096
70,567
20.4
52,693
48,112
Mar/08
Sep /08 Dec/08
Mar/09
Jun/07
Sep /07
Dec/07
288 ,31 3
Mar/09
Mar/08
Jun/08
Money Market Bor rowing
19.8
Sep /08
21.7
Dec/08
Market S hare - %
411 ,45 5
19.3
361 ,97 1
21.1
178 ,48 7
19.8
Market S hare - %
289 ,46 7
Sep /08 Dec/08
20.2
260 ,55 3
Jun/08
Dec/07
247 ,02 5
Mar/08
149 ,61 8
96,495
Dec/07
127 ,58 2
90,939
15.6
Sep /07
Time Depo sits
20.2
18.0
85,520
Jun/07
16.9
Sep /07
Saving Deposits
Market S hare - %
83,640
81,427
16.5
17.2
19.8
Mar/09
19.6
16.6
19.9
315 ,14 9
Dec/08
239 ,26 4
Demand Deposits
Sep /08
19.6
45,839
Jun/07
Dec/07
20.1
43,831
40,831
47,276
Jun/08
51,949
Mar/08
20.0
32.8
30.8
42,955
43,603
Sep /07
29.0
30.9
44,142
38,712
Jun/07
31.1
51,311
36,841
29.4
29.7
Mar/09
6.8.1 Foreign Borrowing
Some signs of recovery from the international financial crisis appeared in 1Q09. Funding at foreign
financial institutions, particularly interbank funding, which was strongly affected by the crisis, recovered.
Growth was observed in these operations both on a quarterly basis (41.8%), and in twelve months
(41.7%), indicating an improvement of the liquidity of foreign banks. Repo lines, deposits received under
security repurchase agreements, have not yet returned to the old levels: slide of 7.9% in twelve months
and 17.7% over the prior quarter.
Even with the international crisis, BB continued to record growth of its total funding, which went from US$
16.8 billion in 4Q08 to US$ 17.2 billion in this quarter. The line that made the greatest contribution to this
item was the line of funding with legal entities that rose 20.2% on the quarterly basis and 95.9% in twelve
months.
Table 53. Foreign Borrowing
Produtos
Dec/07
Interbanking
Repo
Businesses
Special
Individuals
Issues
TOTAL
Mar/08
Jun/08
Sep/08
US$ million
Mar/09
Dec/08
2,329
2,554
3,285
561
1,986
1,678
2,709
3,074
3,255
590
2,099
2,002
2,951
3,101
3,546
787
2,097
1,923
3,019
2,855
3,967
835
2,052
2,056
2,707
3,441
5,304
1,018
2,032
2,305
3,838
2,832
6,376
0
2,021
2,112
12,393
13,729
14,406
14,784
16,809
17,179
With regard to Overseas Issues, none were recorded in 1Q09.
Table 54. Foreign Issues
Issue
Date
Volume in
US$ million
Term in
years
Cupom (%)
Interest
Interval
Issue
price
Return for the
Investor (%)
Premium
Rating
over
Treasury
*266
AAA/Aaa
489
BBB/Baa1
450
BBB/Baa1
350 BBB+/Baa1
350 BBB+/Baa1
292
BBB/Baa1
07.03.02
09.11.02
03.17.03
07.10.03
07.10.03
12.19.03
300
40
120
178
45
250
7
7
7
8
8
10
L3M+0.60
7.89
7.26
5.911
4.777
6.55
Quarterly
Quarterly
Quarterly
Quarterly
Quarterly
Quarterly
100.00
100.00
100.00
100.00
95.00
100.00
5.013
7.890
7.260
5.955
5.955
6.550
09.20.04
300
10
8.5
Half-Yearly
99.17
8.625
01.23.06
500
Perpetual
7.95
Quarterly
100.00
7.950
Ba1
07.18.07
03.06.08
04.29.08
09.05.08
187
250
150
200
10
6
10
7
9.75
L3M+0,55
5,25
L3M+1,20
Half-Yearly
Quarterly
Quarterly
Quarterly
100.00
100.00
100.00
100,00
9.750
L3M+0,55
5.250
L3M+1,20
Baa3
AAA/Aaa
A-/A1
A-/A1
447
A2
Program
MT100
MT100
MT100
Visanet
Visanet
MT100
Subord.
Debt.
Perpetual
Securities
GMTN
MT 100
MT 100
MT 100
7 – Analysis of Results
7.1 Net Interest Income
Table 55. Net Interest Income
R$ million
Chg. %
Quarterly Flow
1Q08
Loans
Leasing
Securities
Resultado Fin. com Op. de Seg., Prev. e Capitalização
FX Gain (Loss) on Foreign Investments
Other Op, Inc, of a Fin, Intermed, Nature
Over Hedge
Money Market Funds
Net Interest Income
4Q08
11,046
7,208
49
3,571
(448)
122
428
53
27
35
(5,477)
(4,757)
(720)
5,568
1Q09
20,412
11,106
147
8,097
(1,053)
503
424
93
711
50
334
(13,335)
(8,432)
(4,903)
7,077
On 1Q08
15,260
8,951
138
5,730
(62)
(116)
176
121
(85)
471
(64)
(8,275)
(7,558)
(716)
6,985
On 4Q08
38.2
24.2
182.0
60.5
(86.3)
(59.0)
130.4
1.232.4
51.1
58.9
(0.5)
25.4
(25.2)
(19.4)
(6.0)
(29.2)
(94.2)
(58.6)
29.7
849.2
(37.9)
(10.4)
(85.4)
(1.3)
It is important to emphasize that the amounts due to the BNC acquisition are not included.
The Net Interest Income (NII) represents the result from financial intermediation business before
provisions for credit risks. NII was R$ 6,985 million in 1Q09, growth of 25.4% in comparison with the same
period of 2008, and reduction of 1.3% in relation to the prior quarter. The downslide observed in the
quarter results basically from the lower quantity of business days in 1Q09, from the cut in the benchmark
annual overnight Selic rate organized by the Central Bank, from a seasonal reduction in funds Demand
Deposits, and from a slight deterioration in spreads, which had grown substantially in 4Q08.
The items that exhibited the greatest decrease of revenues in the quarter were "Loans" and "Securities".
As shown in detail further on, most of the negative variation in revenue from Loans is explained by the
foreign exchange variation. Operations with securities suffer the effect of the reduction in interest rates
organized by the Central Bank, but also from the lower level of foreign exchange volatility. In recent
quarters the depreciation of the Real implied income from securities tied to exchange variation, with
contra entry in expenses with exchange hedge operations. In other words, exchange variation contributed
toward the increase both of revenues and of financial expenses, but with zero effect on Net Income. This
scenario was not repeated in 1Q09, as there was greater stability in quotations of the US dollar, which
exhibited a minor downslide in the quarter.
Table 56. Revenues from Loans Net of Exchange Impact (Res. 2,770)
R$ million
Chg. %
Quarterly Flow
1Q08
Loans and Leasing Revenues*
FX Impact in Loan Portfolio (Res. 2,770)
Loans and Leasing Revenues before FX Impact (Res. 2,770)
* It considers recovery of write-offs.
7,257
316
6,941
4Q08
11,254
1,245
10,010
1Q09
9,089
(408)
9,497
On 1Q08
25.2
(228.9)
36.8
On 4Q08
(19.2)
(132.8)
(5.1)
The chart above evidences the behavior of revenues from Loans, after the segregation of effects of
exchange variation on operations contracted under Resolution 2770 (Working Capital with Funds
Borrowed Abroad). As can be observed, once this adjustment is made, the decrease in revenues would
have been only 5.1% in the quarter, and they would record expansion of 36.8% in the year.
Financial Intermediation Expenses exhibited a trend similar to that of Income. There was growth of 51.1%
in comparison with the same prior-year period, but reduction of 37.9% in relation to 4Q08. The lines that
comprise these expenses also suffer the effect of the lower quantity of business days and of the greater
stability of foreign exchange in the quarter.
It is important to emphasize that sudden oscillations in the exchange rate inflate both Financial
Intermediation Income and Expenses, since all the Dollar denominated assets and liabilities have a
counter entry in hedge mechanisms, which rule out the effect on the result. Hence revenues on assets
abroad have a counter entry in expenses with hedge operations and vice versa, whereby the effect on Net
Interest Income is null.
The tables below demonstrate the formation of the Gross Financial Margin from the changes in the spread
and from the growth in the volume of investments.
Table 57. Analysis of Volume (Earning Assets) and Quarterly Spread – 4Q08 and 1Q09
4Q08
Volume: Assets – Earning Assets *
R$ million
Abs. Chg.
1Q09
401,191
433,581
7,077
6,985
(92)
1.7641
1.6110
(0.1531)
Gain/(loss) with volume
7,649
571
Gain/(loss) with spread
6,463
(614)
Net Interest Income
Spread - % **
Gain/(loss) with volume and spread
32,390
(50)
* Average Balances
** Net Interest Income / (Earning Assets)
Spread
In annualized rates, the global spread (Net Interest Income on average Earning Assets) exhibited a
downslide from 7.2% in 1Q08 and 4Q08 to 6.6% in 1Q09. Besides the factors already mentioned, which
explain the behavior of financial intermediation income and expenses, the growth in the mix of Earning
Assets and Interest-bearing Liabilities contributed decisively toward the reduction of the global spread in
the quarter.
In mean terms, Interest-bearing Liabilities grew 9.2%, against growth of 8.1% in Earning Assets.
Furthermore, there was also a change in the composition of Earning Assets. Loan and Leasing
Operations, an item that provides the best return among these assets, grew at a slower pace, and
reduced their share in relation to the total Earning Assets, from 49.7% in 4Q08 to 47.4% in 1Q09.
8.0
7.5
7.8
7.2
7.1
7.0
7.2
6.6
2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09
NII / (Earning Assets) - Annualized
Figure 28. NIM Analysis
Table 58. Margin, Net of Interest and Profit Margin
1T08
Average Earning Assets (AEA)
Average Interest Bearing Liabilities (AIBL)
Net Interest Gain (1)
Interest Income
Interest Expense
Net Interest Income Other Items (2)
NII
AIBL / AEA – %
Interest Rate on AEA (3) (7)- %
Interest Rate on AIBL (4) (7)- %
Net Interest Rate (5) - %
Adjusted NIM (6) (7) - %
NIM (7) – %
317,880
271,500
5,409
10,837
(5,428)
159
5,568
85.4
14.3
8.2
6.1
7.0
7.2
4T08
401,191
343,133
6,132
19,366
(13,234)
946
7,077
85.5
20.8
16.3
4.4
6.3
7.2
R$ million
1T09
433,581
374,842
6,456
14,656
(8,200)
529
6,985
86.5
14.2
9.0
5.2
6.1
6.6
(1) Defined as interest income less interest expenses.
(2) Contains derivatives, debt assumption contracts, foreign exchange portfolio, recovery of write-offs, gold loans, credit guarantor fund, foreign
exchange gain/loss abroad and other income of a financial intermediation nature
(3) Total interest income divided by the average balance of assets generating income.
(4) Total interest expenses divided by the average balance of liabilities generating expenses.
(5) Difference between interest rate on AEA and interest rate on AIBL.
(6) Net interst gain divided by the average earning assets.
(7) Taxes are annualized.
7.2 Analysis of Investments
Loan and Lease Operation Revenues, disregarding recovery of write-offs, reached R$ 8,732 in 1Q09, a
reduction of 19.1% over the previous quarter and increase of 27.8% over the 1Q08. Disregarding the
effects of exchange variation, these revenues would have amounted to R$ 9,140 million, which represents
an annualized return on loans of 19.0%, against 20.6% in the previous quarter and 17.9% in the same
period of 2009.
Table 59. Revenues from Loans Net of Exchange Impact (Res. 2,770)
R$ million
Chg. %
Quarterly Flow
1Q08
Loans and Leasing Revenues – Average Balance *
Loans and Leasing Revenues
FX Impact in Loan Portfolio (Res. 2,770)
Loans and Leasing Revenues before FX Impact (Res. 2,770)
Annualized Interest Rate
* Recovery of write-offs are not considered
4Q08
155,418
6,835
316
6,519
17.9
1Q09
199,332
10,788
1,245
9,543
20.6
205,319
8,732
(408)
9,140
19.0
s/1Q08
32.1
27.8
(228.9)
40.2
6.5
s/4Q08
3.0
(19.1)
(132.8)
(4.2)
(7.5)
Spread by Portfolio
The figure below evidences the growth of the spread of loans, broken down by portfolio. It can be
observed in graph that the spreads of the individual and business portfolios presented a course in 1Q09.
The drop in the spread of these portfolios is due above all to the resumption of the movement of reduction
in the benchmark annual overnight Selic rate practiced in the country. In addition, an important alteration
has been occurring over the course of time in the mix of products from the individual portfolio, with an
increase of the relative share of payroll loans, which provide lower margins to the Bank, but at the same
time have a lower associated risk, contributing toward the quality of the portfolio.
Special emphasis is placed in the quarter on the maintenance of the recovery trend of the Agribusiness
portfolio spread, which attained 5.9%, against 5.6% in the previous quarter and 5.02% in 1Q08.
24.1%
23.4%
6.9%
6.5%
4.9%
5.0%
1Q08
2Q08
Individuals
Figure 29. NIM by Loan Portfolio
22.0%
21.6%
20.5%
6.6%
7.3%
7.2%
5.2%
5.6%
5.9%
3Q08
4Q08
1Q09
Businesses
Agribusiness
Income and expenses with securities
Securities income in 1Q09 totaled R$ 5,730 million, an amount 60.5% higher than that recorded in the
same period of 2009 and 29.2% lower than the last quarter. As explained previously, the slide in income
in the quarter is due to the greater stability in foreign exchange, the lower quantity of business days and
the cut organized in the benchmark annual overnight Selic rate by the Central Bank (which affects the
revaluation of securities in the portfolio by the future interest curve and at the market price).
Table 60. Securities Income
R$ million
Chg. %
Quarterly Flow
1Q08
Securities Income
Fixed Income Securities
Revaluation – Curve
Income/Loss from Negotiation
Mark to Market
Interbank Accounts
Foreign Income
Others
3,571
3,363
1,876
(207)
(11)
1,480
225
207
4Q08
8,097
8,074
2,755
21
356
2,808
2,134
23
1Q09
5,730
5,724
2,058
23
262
3,381
6
On 1Q08 On 4Q08
60.5
70.2
9.7
128.5
(97.1)
(29.2)
(29.1)
(25.3)
10.1
(26.5)
20.4
(73.6)
The figure below shows the main indices in BB’s securities portfolio.
0.4% 4.8%
0.0%
23.8%
71.0%
Floating
Fixed
TR and Others
Figure 30. Securities Portfolio by Index (Multiple Bank)
Dolar
IGP-M
IPCA
Table 61. Avg Balance of the BS accounts and info. on interest rates - Earning assets (quarterly)
R$ million
4Q08
Average
Balance
1Q09
Annualized
Rate (%)
Interest
Average
Balance
Annualized
Rate (%)
Interest
Earning Assets
Available Funds in Foreign Currency
1,772
59
13.9
535
18
14.4
Securities + Interbank Investments on
Hedge
183,495
8,097
18.9
217,642
5,730
11.0
Loans + Leasing
199,332
10,787
23.5
205,319
8,732
18.1
16,592
424
10.6
10,086
176
7.1
401,191
19,366
20.8
433,581
14,656
14.2
Remunerated Compulsory Deposits
Total
Non Earning Assets
Tax Credits
15,695
17,469
Other Assets
72,511
70,661
Permanent Assets
10,571
15,084
Total
98,777
103,214
499,968
536,795
TOTAL ASSETS
7.3 Analysis of Funding
The average balance of the Interest Bearing Liabilities rose R$ 374,842 million in the 1Q09, growing of
9.0% in the quarter and 38.1% compared to the same period of previous year. The annualized cost of
funding, measured by the ratio between interest paid and the average balance of these liabilities, closed
the quarter at 9.0%, against 16.3% in the previous quarter.
Generally speaking, given the lower quantity of business days and the reduction in the benchmark annual
overnight Selic rate, there was a generalized decrease in the cost of all the main funding instruments.
Furthermore, the basis of comparison of the previous quarter was impaired, at least with respect to the
lines of "Foreign Borrowing", "Foreign Securities" and "Total", which suffered the greatest impact of the
strong exchange depreciation that occurred in 4Q08.
Table 62. Avg Balances of the BS accounts and info. on int rates – Int.Bearing Liabilities (quarterly)
R$ million
4Q08
Average
Balance
1Q09
Interest
Annualized
Rate (%)
Average
Balance
Interest
Annualized
Rate (%)
Saving Deposits
53,899
(1,185)
9.1
57,975
(1,025)
7.3
9,682
(137)
5.8
11,066
(257)
9.6
144,272
(4,180)
12.1
156,316
(3,406)
9.0
90,840
(2,731)
12.6
98,927
(2,760)
11.6
4,695
(4,353)
1.279.8
5,292
(52)
4.0
Onlending
22,159
(434)
8.1
26,655
(505)
7.8
Financial and Development Funds +
Subordinated Debt
13,951
(116)
3.4
15,249
(159)
4.2
3,635
(98)
11.2
3,362
(36)
4.3
343,133
(13,234)
16.3
374,842
(8,200)
9.0
Interbank Deposits
Time Deposits
Foreign Borrowing
Foreign Securities Borrowing
Total
Other Liabilities
Demand Deposits
46,283
43,596
Other Liabilities
81,668
88,600
28,884
29,757
Total
156,836
161,953
TOTAL LIABILITIES
499,968
536,795
7.4 Analysis of Volume and Spread
The table below shows the appropriation of changes in interest income and expenses due to the change
in the average volume of earning assets and interest bearing liabilities and the change in the average
interest rate on such assets and liabilities, in the quarters under analysis.
The changes in volume and interest rate were calculated based on changes in average balances in the
period and the changes in the average interest rates on assets generating income and liabilities
generating expenses. The Average Rate variation was calculated by the variation in the interest rate in the
period multiplied by the average quantity of assets generating income or by the average quantity of
liabilities generating expenses in the first period. The Net Variation is the difference between the interest
income of the present period and that of the previous period. The variation by Average Volume is the
difference between the Net Variation and that resulting from the Average Rate.
Among the Earning Assets we observed that both in the quarterly and in the annual comparison, the
Average Rate has a negative effect on the growth of interest income. However, the rate effect is being
offset by the consistent growth in the Average Volume, which partially offset the downslide in the rate in
the quarterly comparison and permitted gains in the annual comparison.
From the point of view of Interest-bearing Liabilities, the Average Rate effect culminated in reduction of R$
5,728 million in interest expenses in the quarter. The increase in the volume of these liabilities was
reflected in the growth of R$ 694 million in expenses in the same period. In the annual comparison, as a
result of the expressive growth of the Time Deposits base, which has a higher funding cost than that of
other instruments used by the Bank (like Demand and Saving Deposits), there was growth in the
expenses originating both from the Average Rate effect and from the Average Volume.
Once again it is important to emphasize the impact of exchange variation, which distorts the quarterly
basis of comparison, due to the strong depreciation of the Real in 4Q08.
Table 63. Int. increase and decrease (Inc. and Exp.) due to changes in Volume and Rates (quarterly)
R$ million
1st Quarter 2009/4th Quarter 2008
1st Quarter 2009/2008
Average
Volume (1)
Earning Assets
Available Funds in Foreign Currency
Securities + Interbank Investments on Hedge
Loans + Leasing
Remunerated Compulsory Deposits
Saving Deposits
Interbank Deposits
Time Deposits
Foreign Borrowing
Onlending
Financial and Development Funds + Subord. Debt
Foreign Securities Borrowing
(1)
(2)
(3)
Average
Rate (2)
Net Change Average
(3)
Volume (1)
Net Change
(3)
3,911
(17)
2,002
2,122
(169)
(92)
32
158
(225)
(84)
3,819
15
2,159
1,898
(253)
1,095
(42)
899
255
(113)
(5,805)
2
(3,266)
(2,309)
(135)
(4,710)
(40)
(2,367)
(2,054)
(248)
(2,261)
(181)
(126)
(1,454)
(164)
(17)
(165)
(30)
(18)
(511)
(57)
(48)
(276)
(460)
296
(72)
(8)
9
(2,772)
(238)
(174)
(1,730)
(624)
279
(237)
(38)
(9)
(694)
(72)
(32)
(262)
(226)
(6)
(85)
(14)
3
5,728
232
(88)
1,036
197
4,307
14
(30)
59
5,034
160
(120)
773
(29)
4,301
(71)
(43)
62
Net Change - Average Rate
((Interest Current Period / Balance Current Period) x Balance Previous Period) - (Interest Previous Period)
Current Interest - Interest for Previous Period
Average
Rate (2)
7.5 Provision for Credit Risk
The analysis of credit risk provision contained in this chapter is restricted to the numbers of Banco do
Brasil. Information about the Banco Nossa Caixa institution is available in chapter 10 of this report and in
the report entitled "Nossa Caixa - Net Income 1Q09", available on the Investor Relations website of Banco
do Brasil.
Table 64. Net Financial Margin
R$ million
Chg. %
Quarterly Flow
Net Interest Income
1Q08
4Q08
1Q09
On 1Q08 On 4Q08
5,568
(1,534)
4,034
7,077
(2,240)
4,837
6,985
(2,491)
4,494
25.4
62.4
11.4
(1.3)
11.2
(7.1)
In the quarterly flow, Allowance for Loan Losses (PCLD) recorded an increase of 62.4% in relation to the
same period of last year and 11.2% in relation to the previous quarter. This behavior of expenses with
PCLD results from the growth of the loan portfolio, from improvements of risk analysis methodologies to a
more conservative approach and from an increase in the deliquency rates due to conjunctural issues of
the world economy.
The ratio between provision expenses and the average total portfolio - both accumulated in 12 months went from 3.6% in 1Q08 to 3.8% in 1Q09. In 1Q08, the ratio between the quarterly provision expenses
and the average of the loan portfolio in the period was 1.1% higher in relation to the same period of
previous year.
Table 65. Allowance for Loan Losses Expenses over Portfolio
(B) Allowance for Loan Losses - 12 Months
(C) Loan Portfolio
(D) Average Portfolio – 3 Months
2Q07
3Q07
4Q07
1Q08
2Q08
3Q08
4Q08
R$ million
1Q09*
(1,236)
(5,309)
145,233
144,565
130,358
(1,216)
(5,139)
150,184
148,408
138,136
(1,497)
(5,380)
160,739
157,216
145,861
(1,534)
(5,483)
172,760
166,928
153,211
(1,687)
(5,934)
190,082
185,059
162,928
(1,338)
(6,056)
202,201
195,431
174,161
(2,240)
(6,800)
224,808
218,626
189,144
(2,491)
(7,757)
228,101
225,528
203,591
0.9
4.1
0.8
3.7
1.0
3.7
0.9
3.6
0.9
3.6
0.7
3.5
1.0
3.6
1.1
3.8
Expenses over Portfolio (A/D) - %
Expenses over Portfolio (B/E) - %
*All Credit Portfolio values do not include BNC.
0.9
0.8
1.0
0.9
0.9
0.7
1.0
1.1
2,491
3.8
2,240
3.6
1,338
3.5
1,687
3.6
1,534
3.6
1,497
3.7
1,216
3.7
1,236
4.1
2Q07
3Q07
4Q07
1Q08
2Q08
3Q08
4Q08
1Q09
Expenses Over Portfolio (B/E) - %
Expenses Over Portfolio (A/D) - %
Figure 31. Allowance for Loan Losses Expenses over Portfolio
The figure below details the allowance for loan losses, segregating the minimum provisions required by
CMN Resolution 2,682 from the total booked. An increase of volume can be observed in required
provisions, which climbed from R$ 12,079 million in December 2008 to R$ 13,034 million in March 2009, a
7.9% increase.
The Total Provision (Required + Additional) presented a 7.3% growth in the last quarter, higher than the
growth of 1.5% of the credit portfolio. This growth is explained by the rise in the deliquency ratio, reflected
in the balance of the required provision.
R$ million
13,673
14,674
10,313
10,694
1,580
1,586
1,090
857
7,786 8,084
8,727
9,604
10,308
10,468 12,079 13,034
Dec/07
Mar/08
Jun/08
Sep/08
9,441
1,655
Jun/07
9,663
Sep/07
Required Provision
11,165
11,187
719
Additional Provision
1,594
Dec/08
1,640
Mar/09
Total Provision
Figure 32. Allowances Breakdown
The operations classified at AA-C risk levels decreased from 90.7%, in December 2008, to 90.3%, in
March 2009.
Table 66. Loan Portfolio by Level of Risk
R$ million
Mar/08
Balance Allowance
AA
A
B
C
D
E
F
G
H
Dec/08
Share
Balance
Allowance
Mar/09
Share
Balance
Allowance
Share
BI*
47,364
34,422
52,673
21,578
6,843
2,091
933
1,249
5,605
172
527
647
684
627
466
874
5,605
27.4
19.9
30.5
12.5
4.0
1.2
0.5
0.7
3.2
63,828
42,669
73,028
24,404
8,157
2,985
1,237
1,421
7,079
213
730
732
816
896
619
995
7,079
28.4
19.0
32.5
10.9
3.6
1.3
0.6
0.6
3.1
63,177
61,634
57,849
23,350
8,251
2,921
1,393
1,589
7,937
308
578
700
825
876
697
1,112
7,937
27.7
27.0
25.4
10.2
3.6
1.3
0.6
0.7
3.5
24.1
40.1
19.0
9.0
2.5
1.0
0.7
0.6
2.9
Total
172,760
9,604
100.0
224,808
12,079
100.0
228,101
13,034
100.0
100.0
AA-C
D-H
156,037
16,721
1,346
8,258
90.3
9.7
203,928
20,879
1,676
10,403
90.7
9.3
206,010
22,091
1,587
11,447
90.3
9.7
92.2
7.8
* Previous data of December/2008
The ratio of Portfolio Net of Allowances (CLP) over the Total Portfolio (CT) expresses the overall
evaluation of the weighted portfolio, in accordance with CMN Resolution 2.682/99. The figure below
reveals that Banco do Brasil was 100 base points better than the National Financial System in 1Q09.
94.6 94.0 94.6 94.2 94.6 94.5 94.4 94.6 94.6 94.8 94.8 94.9 94.6 94.7 94.3
93.3
Jun/07
Sep/07
Dec/07
Mar/08
BB
Jun/08
Sep/08
Dec/08
Mar/09
SFN
Figure 33. CLP/CT BB vs. BI
The table below shows the increase of 30 base points in the ratio of past-due loans in the Loan Portfolio
when compared to March 2008. The volume overdue for 15 days of the portfolio amounted R$ 10,692
million, reaching of 4.7% in 1Q09. The index overdue above 60 days reached 3.3%, above the one
observed in March 2008. The volume overdue above 90 days reached 2.7%, higher than the 2.4%
recorded in March 2008, however, lower than the 3.6% presented by the Brazilian Banking Industry (SFN)
in 1Q09.
The credit portfolio average risk in March 2009 was 5.7%, 30 base points above that observed in
December 2008.
Table 67. Deliquency Ratio - %
2Q07
Loan Portfolio
3Q07
4Q07
1Q08
2Q08
3Q08
4Q08
R$ million
1Q09
145,233 150,184 160,739 172,760 190,082 202,201 224,808 228,101
Loans overdue
6,915
7,525
7,248
7,574
7,089
7,414
9,019
10,819
4.8
5.0
4.5
4.4
3.7
3.7
4.0
4.7
5,930
7,125
7,222
7,521
6,899
7,376
8,951
10,692
4.1
4.7
4.5
4.4
3.6
3.6
4.0
4.7
4,111
5,157
5,259
4,907
5,323
5,234
6,267
7,450
2.8
3.4
3.3
2.8
2.8
2.6
2.8
3.3
3,508
3,986
4,268
4,164
4,689
4,471
5,305
6,197
2.4
2.7
2.7
2.4
2.5
2.2
2.4
2.7
1,596
Past Due Loans/Loan Portfolio
Past Due Loans + 15 days
Past Due Loans + 15 days/Loan Portfolio
Write-off
918
988
841
1,164
1,316
1,342
1,229
(386)
(302)
(414)
(422)
(425)
(400)
(467)
(354)
Net Loss
532
686
427
742
891
941
763
1,242
Net Loss/Loan Portfolio - % annualized
1.5
1.8
1.1
1.7
1.9
1.9
1.4
2.2
9,441
9,663
10,313
10,694
11,165
11,187
13,673
14,674
6.5
6.4
6.4
6.2
5.9
5.5
6.1
6.4
Allowance/Past Due Loans + 15 days - %
159.2
135.6
142.8
142.2
161.8
151.7
152.8
137.2
229.7
187.4
196.1
217.9
209.8
213.8
218.2
197.0
269.1
242.4
241.7
256.8
238.1
250.2
257.7
236.8
Recovery of Write-offs
Provision
Allowance/Loan Portfolio
The graph below shows the ratio between the required provision and the provision for transactions
overdue for more than 90 days of the Bank and of SFN (National Financial System). In comparison with
SFN, it can be observed that the Bank has a level of required provision that is more than enough to cover
transactions overdue for more than 90 days.
234.1
230.6
221.9
227.7
219.8
166.2
Jun/07
210.3
204.5
202.8
167.7
Sep/07
169.2
Dec/07
177.2
Mar/08
90 Days BB
171.4
Jun/08
Sep/08
90 Days SFN
Figure 34. Allowance/Past Due Loans +90 days – BB x SFN
169.9
175.7
Dec/08
186.8
Mar/09
Although the average risk (Provision required / Portfolio) of the National Financial System rose 140 base
points in relation to December/2008, the average risk of the portfolio, in relation to December/2008,
presented a 30 base points increase, as presented in the following table:
Table 68. Average Portfolio Risk
Dec/07
Mar/08
Jun/08
Sep/08
Dec/08
Mar/09
Average Risk BB
5.4
5. 6
5.4
5.2
5.4
5.7
Average Risk BI
5.5
5.4
5.2
5.1
5.3
6.7
7.5.1 Retail Loan Portfolio
The Retail Loan Portfolio grew 39.0% in relation to the same prior-year period and 5.0% in relation to
December 2008. Part of this growth is explained by the 41.6% increase in the CDC product portfolios and
a 97.7% growth in Vehicle Financing, both in the Individual client segment, in annual basis. In the Micro
and Small Businesses segment, the growth is explained by the performance of the Working Capital and
the Investment portfolios, which grew 41.7% and 43.9% respectively.
The portfolio acquisitions were another factor that contributed towards the growth of the portfolio in the
individual client segment. Removing the balance of acquired portfolios (R$ 2,935 million of payroll loans
and R$ 737 million of vehicle financing), the growth of the Retail portfolio would be 32.7% in Mar/08.
Table 69. Retail Loan Portfolio by Level Risk
R$ million
Mar/08
Balance
Dec/08
Provision
Share
Balance
Mar/09
Provision
Share
Balance
Provision
Share
AA
4,692
-
8.3
5,160
-
6.6
5,111
-
6.3
A
8,882
44
15.6
12,468
62
16.1
29,826
149
36.6
B
27,965
280
46.5
37,904
379
48.8
24,708
247
30.3
C
11,823
355
20.3
13,482
404
17.4
12,615
378
15.5
D
1,873
187
3.3
3,416
342
4.4
3,379
338
4.1
E
678
203
1.2
999
300
1.3
1,091
327
1.3
F
381
191
0.7
620
310
0.8
702
351
0.9
G
365
256
0.6
567
397
0.7
613
429
0.8
H
1,995
1,995
3.5
3,023
3,023
3.9
3,457
3,457
4.2
Total
58,654
3,511
100.0
77,639
5,217
100.0
81,501
5,677
100.0
AA-C
53,361
679
90.7
69,014
846
88.9
72,260
775
88.7
5,293
2,832
9.3
8,625
4,371
11.1
9,242
4,902
11.3
D-H
The retail portfolio average risk presented a risk deterioration of 100 base points in relation to that
recorded in March 2008. The movement of PCLD (Allowance for Loan Losses) of the retail portfolio is
detailed in the table below:
Table 70. Changes in the Allowance - Retail
Retail Loan Portfolio
Initial Allowance
1 - Risk Migration
4Q07
1Q08
2Q08
3Q08
4Q08
R$ million
1Q09
53,407
58,654
64,978
68,968
77,639
81,501
3,016
3,305
3,511
3,951
4,348
5,217
611
575
629
579
956
1,117
a) Risk Deterioration
1,083
1,039
1,255
1,393
1,820
1,919
b) Risk Improvement
(471)
(464)
(626)
(814)
(864)
(802)
325
367
607
509
425
699
(599)
(671)
(760)
(779)
(772)
(1,018)
Total (1 + 2 + 3):
337
271
476
308
610
798
Other Impacts*
(48)
(65)
(36)
89
(259)
(338)
2 – New Transactions
3 – Write-offs
Final Allowance**
3,305
3,511
3,951
4,348
5,217
5,677
Allowance Required by CMN Resolution 2,682
3,305
3,511
3,951
4,348
5,217
5,677
888
877
1,200
1,176
1,641
1,478
Provision Flow - R$ million
a) Added Provision***
0
0
139
0
203
888
888
1,061
1,176
1,438
1,478
Provision / Portfolio - %
6.2
6.0
6.1
6.3
6.7
7.0
Provision Flow / Portfolio - %
1.7
1.5
1.6
1.7
1.9
1.8
b) Provision Expenses
* Amortization, settlement, release of installments and debit from charges
**Purchases in installments payable by credit card included in 1Q08: R$ 32 million
*** Additional provision used in 2Q08
Vintage
We present the monitoring of the loan portfolio of individual clients by Harvests in the graphs below. This
methodology, known abroad as Vintage, affords greater detailing and closer to the portfolio than
traditional indicators.
The Vintage makes it possible to monitor how the deliquency of the set of operations contracted in a
particular period behaves over time. In the first graph, for example, the monitoring is performed in the
quarterly view. The lines show how the default of operations contracted in each quarter behaved in the
subsequent periods. The longer lines, therefore, refer to the oldest monitoring period.
In the case of the graphs below, we consider operations overdue for more than 90 days at default, and for
determination of the Retail portfolio for individual clients, the Overdraft Protection Agreement, Credit Card
operations and Vehicle financing do not appear in these graphs.
The monitoring shows how the operations contracted most recently present a more favorable default
curve than those contracted at the beginning of the monitoring. This result shows the constant
optimization in the credit analysis, concession and monitoring templates.
Delinquency 90 days
Crop
Months
Figure 35. Quarterly Vintage
Delinquency 90 days
The second graph contains the vintage in annual periodicity, facilitating the data viewing and
interpretation.
Months
Crop
Figure 36. Annual Vintage
In the next graph, we presente the detailing of the vehicle financing portfolio, segmented by the operation
contracting origin: Arena I - operations contracted in Bank's branches; Arena II - operations contracted in
the sphere of associated vehicle dealerships.
Delinquency 90 days
In the graph below we emphasize the vehicle financing portfolio contracted in Bank's branches:
Months
Crop
Figure 37. Annual vintage - Vehicle Financing Portfolio - Arena I
Delinquency 90 days
In this graph we emphasize the vehicle financing portfolio contracted in automobile dealing companies:
Months
Crop
Figure 38. Annual vintage - Vehicle Financing Portfolio - Arena II
7.5.2 Commercial Portfolio
The corporate portfolio recorded a 11 base points decrease, over the last three months. This performance
is explained by the cool-down in the demand for loans by large companies. Nevertheless, the quality of
the portfolio was only slightly affected when compared to 1Q08 and 4Q08. At the end of March 2009, the
operations classified at risk levels AA to C exhibited a downslide of 30 base points comparing to Dec/08,
representing 97.6% of the total Portfolio.
Table 71. Commercial Loan Portfolio by Level Risk
R$ million
Mar/08
Balance
AA
Dec/08
Provision
Share
Balance
Mar/09
Provision
Share
Balance
Provision
Share
18,007
-
53.8
25,677
-
53.0
26,437
-
54.7
A
7,336
37
21.9
9,871
49
20.4
8,723
44
18.0
B
6,895
69
20.6
10,897
109
22.5
10,970
110
22.7
C
539
16
1.6
977
29
2.0
1,073
32
2.2
D
432
43
1.3
637
64
1.3
625
63
1.3
E
67
20
0.2
112
34
0.2
183
55
0.4
F
62
31
0.2
38
19
0.1
51
26
0.1
G
23
16
0.1
48
34
0.1
114
80
0.2
H
112
112
0.3
166
166
0.3
191
191
0.4
Total
33,473
344
100.0
48,422
503
100.0
48,367
599
100
AA-C
32,777
122
97.9
47,422
188
97.9
47,203
186
97.6
696
222
2.1
1,001
316
2.1
1,164
414
2.4
D-H
Table 72. Changes in the Allowance - Commercial
4Q07
Commercial Loan Portfolio
1Q08
29,613
2Q08
3Q08
R$ million
1Q09
4Q08
33,473
40,456
44,336
48,422
48,367
Initial Allowance
341
338
344
391
421
492
1 - Risk Migration
30
(38)
(2)
13
46
27
145
88
99
107
164
225
b) Risk Improvement
(115)
(127)
(101)
(93)
(118)
(198)
46
87
83
85
249
86
(23)
(29)
(30)
(54)
(63)
(60)
53
19
51
44
232
52
Other Impacts*
(56)
(13)
(5)
(14)
(141)
54
Final Allowance
338
344
391
421
492
599
338
344
391
421
492
599
21
36
76
84
135
167
3 – Write-offs
Total (1 + 2 + 3):
Changes in the Provision - in R$ million
a) Additional Provision**
0
0
139
0
17
21
36
(63)
84
118
1.1
1.0
1.0
0.9
1.0
1.2
Changes in the Provision - % of Portfolio
0.1
0.1
0.2
0.2
0.3
0.3
b) Provision Expense
* Amortization, settlement, release of installments and debit from charges.
** Additional Provision allocated to the Commercial Credit Portfolio.
167
7.5.3 Agribusiness Portfolio
The agribusiness portfolio increased 12.3% (Mar/08-Mar/09) and remained almost in line in relation to the
previous quarter. In March 2009 the loans ranked at risk levels AA-C accounted for 85.4% of the portfolio,
100 base points higher than the number presented in March 2008.
The relationship between the provisions required (CMN Resolution 2,682) and the balance of operations
went from 7.5% to 8.0% in 1Q09, 50 base points above to the observed in 1Q08.
Table 73. Agribusiness Loan Portfolio by Level Risk
R$ million
Mar/08
Balance
Dec/08
Provision
Share
Balance
Mar/09
Provision
Share
Balance
Provision
Share
AA
11,909
-
21.1
13,835
-
21.7
13,052
-
20.6
A
13,710
69
24.3
13,807
69
21.7
17,371
87
27.4
B
13,927
139
24.6
19,323
193
30.3
16,303
163
25.7
C
8,133
244
14.4
7,779
233
12.2
7,485
225
11.8
D
4,108
411
7.3
3,661
366
5.7
3,685
369
5.8
E
1,090
327
1.9
1,384
415
2.2
1,346
404
2.1
F
335
167
0.6
385
192
0.6
390
195
0.6
G
759
532
1.3
673
471
1.1
714
500
1.1
H
2,552
2,552
4.5
2,844
2,844
4.5
3,146
3,146
5.0
Total
56,524
4,440
100.0
63,690
4,784
100.0
63,492
5,087
100
AA-C
47,679
452
84.4
54,744
496
86.0
54,211
474
85.4
8,844
3,989
15.6
8,946
4,289
14.0
9,280
4,613
14.6
D-H
The following table details the changes in Allowance for Loan Losses for the Portfolio Agribusiness.
Table 74. Changes in the Allowance - Agribusiness
4Q07
1Q08
2Q08
3Q08
R$ million
1Q09
4Q08
51,883
56,524
61,611
60,524
63,690
63,492
Initial Allowance
3,286
3,659
4,440
4,665
4,329
4,784
1 - Risk Migration
(62)
288
472
134
580
647
669
1,012
549
521
889
873
b) Risk Improvement
(731)
(723)
(78)
(387)
(309)
(226)
Agribusiness Loan Portfolio
551
631
1,078
874
1,837
974
3 – Write-offs
(92)
(140)
(235)
(395)
(217)
(357)
Total (1 + 2 + 3):
397
779
1,315
613
2,200
1,264
Other Impacts*
(24)
(3)
(1,090)
(949)
(1,745)
(961)
Final Allowance
3,659
4,440
4,665
4,329
4,784
5,087
3,659
4,440
4,665
4,329
4,784
5,087
465
922
459
58
673
660
0
482
82
99
282
465
440
377
(41)
391
660
7.1
7.9
7.6
7.2
7.5
8.0
0.9
1.6
0.6
(0.1)
0.6
1.0
* Amortization, settlement, release of installments and debit from charges.
** Additional Provision allocated to the agribusiness loan portfolio
The average risk of the portfolio is strongly influenced by the operations of the harvests of 2005 to 2007
extended with total balance of R$ 14,684 million. In the following table, the Agribusiness Loan Portfolio is
divided in extended and unextended operations.
Table 75. Portfolio With and Without Roll Over – Agribusiness
Portfolio Without Roll Over
Allowance for
Loan Losses
Past
Due_90
Portfolio with Roll Over
Past Due 90/
Past
Due_90
Risk
Balance
AA
10,723
-
257¹
2,329
-
21¹
A
16,315
82
0
1,056
5
0
B
13,062
131
-
3,240
32
-
C
4,647
139
6
2,838
85
4
D
1,687
169
13
1,998
200
16
E
460
138
97
886
266
49
F
166
83
59
224
112
22
Ballance2
Balance
Allowance for
Loan Losses
G
508
356
66
206
144
25
H
1,239
1,239
555
1,907
1,907
261
Total
48,807
2,336
797
14,684
2,751
377
1.6%
Past Due 90/
Ballance2
2.6%
(1) Overdue operations at level AA refer to credit with third party risk
(2) The delay resulting from overdue operations with third party risk was not included in the calculation of the rate
According to the table above, transactions overdue for more than 90 days represent 1.6% of the total
unextended portfolio. If we compare this indicator to the extended operations, there is a gap of 100 base
points.
In the table below we present balances, rate of more than 90 days past due loans and average risk of the
agribusiness portfolio segmented in total portfolio, extended and not extended.
Table 76. Rates of the Agribusiness Portfolio
Loan Portfolio
1Q08
2Q08
3Q08
4Q08
1Q09
63,492
56,524
61,611
60,524
63,691
Provision
4,436
4,665
4,329
4,785
5,087
1,033
1,180
810
877
1,174
Past Due Loans + 90 days/Loan Portfolio - %
1.8
1.9
1.3
1.4
1.8
Allowance/Loan Portfolio - %
7.8
7.6
7.2
7.5
8.0
16,399
16,492
14,170
14,445
14,684
2,529
2,627
2,195
2,598
2,755
410
457
237
259
377
Transactions overdue + 90 days/Total Portfolio (%)
2.5
2.8
1.7
1.8
2.6
15.4
15.9
15.5
18.0
18.8
40,124
45,119
46,354
49,246
48,807
1,907
2,038
2,110
2,186
2,336
Past Due Loans + 90 days -%
623
723
573
619
797
Transactions overdue + 90 days/Unextended operations - %
1.6
1.6
1.2
1.3
1.6
Provision/Unextended Operations - %
4.8
4.5
4.6
4.4
4.8
15,100
15,178
12,756
13,102
13,366
2,529
2,627
2,195
2,598
2,755
16.7
17.3
17.2
19.8
20.6
37,396
42,329
43,515
46,471
46,021
1,907
2,038
2,110
2,186
2,336
5.1
4.8
4.8
4.7
5.1
40,124
45,119
46,326
49,246
48,807
1,067
2,038
1,272
995
1,093
2.7
4.5
2.7
2.0
2.2
37,396
42,329
43,515
46,471
46,021
1,067
2,038
1,272
995
1,093
2.9
4.8
2.9
2.1
2.4
Extended Operations
Provision
Provision/Extended Operations - %
Unextended operations
Provision
Extended Operations Without Third-Party Risk
Provision
Provision/Extended Operations Without Third-Party Risk - %
Unextended Operations Without Third-Party Risk
Provision
Provision/Unextended Operations Without Third-Party Risk - %
Simulation Operations not Extended without drag effect of Extended Operations
a- With Third-Party Risk
b- Provision
Average Risk (b/a)
c- Without Third-Party Risk
d- Provision
Average Risk (d/c)
The increase of the average risk of the agribusiness portfolio resulted from a regulatory issue as CMN
Resolution 2,682 establishes the maintenance of the risk of the renegotiated operation at the level of risk
observed at the time of the renegotiation.
Simulation carried out by removing the drag effect of the extended operations over the other unextended
operations of the client presents a reduction of the average risk from 4.8% to 2.2% in 1Q09.
Part of the operations that comprise the agribusiness portfolio has third-party risk, representing a total of
R$ 4.1 billion. Disregarding these operations the average risk of the portfolio would rise from 4.8% to
5.1% in 1Q09 (non-rescheduled portfolio) and from 2.2% to 2.4%(non-rescheduled portfolio without drag
effect) respectively.
In the figure below the agribusiness portfolio is segregated in rescheduled and non-rescheduled
operations, by appropriation and respective shares.
1Q09*
22.5%
77.5%
Costs
55.2%
Investiment
29.8%
Refinancing
15.0%
Average Risk: 20.6%
Costs
64.5%
Investiment
29.5%
Without Roll Over
R$ 46.0 billion
Marketing
Portfolio With
Roll Over
Portfolio Without
Roll Over
* Agribusiness Portfolio without third party risk
Figure 39. Stratified Agribusiness Portfolio
6.0%
With Roll Over:
R$ 13.4 billion
Average Risk - 5.2%
• W/O Roll Over Effect: 2.4%
7.5.4 Foreign Trade Loan Portfolio
The foreign trade finance portfolio recorded an increase of 57.8% base points (Mar/08 – Mar/09). Loans
rated at levels of risk AA to C went up from 97.2% in December 2008 to 97.8% in March 2009 and those
rated as D-H came down 2.8% to 2.2% in the same period.
Table 77. Foreign Trade Loan Porfolio by Level Risk
R$ million
Mar/08
Balance
Dec/08
Provision
Share
Balance
Mar/09
Provision
Share
Balance
Provision
Share
AA
5,616
-
51.0
9,255
-
53.7
9,018
-
51.9
A
2,182
11
19.8
3,686
18
21.4
3,115
16
17.9
B
2,406
24
21.8
2,987
30
17.3
4,076
41
23.4
C
638
19
5.8
812
24
4.7
791
24
4.6
D
64
6
0.6
104
10
0.6
102
10
0.6
E
6
2
0.1
232
70
1.3
27
8
0.2
F
10
5
0.1
40
20
0.2
91
45
0.5
G
9
6
0.1
44
31
0.3
43
30
0.2
H
88
88
0.8
66
66
0.4
120
120
0.7
Total
11,019
161
100.0
17,225
269
100.0
17,384
294
100.0
AA-C
10,842
54
98.4
16,739
73
97.2
17,000
80
97.8
177
107
1.6
485
197
2.8
384
214
2.2
D-H
The table below shows the effects of the global risk of the Foreign Trade Loan Portfolio on provisions, the
provision vs. portfolio ratio of which pushed 20 base points from 1.5% in 1Q08 to 1.7% in 1Q09 and 90
base points in relation to the last quarter.
Table 78. Changes in Allowance – Foreign Trade
4Q07
1Q08
2Q08
3Q08
R$ million
1Q09
4Q08
11,911
11,019
10,826
12,424
17,225
17,384
Initial Allowance
177
178
161
134
132
153
1 - Risk Migration
15
Foreign Trade Loan Portfolio
(22)
(28)
(21)
(6)
115
32
16
24
37
132
87
b) Risk Improvement
(54)
(45)
(45)
(42)
(17)
(72)
49
40
35
47
95
88
(14)
(23)
(48)
(30)
(16)
(2)
12
(11)
(34)
12
194
101
Other Impacts*
(11)
(6)
7
(172)
(62)
40
Final Allowance
178
161
134
132
153
294
178
161
134
132
153
294
16
6
20
28
37
143
-
-
-
38
16
3 – Write-offs
Total (1 + 2 + 3):
-
-
-
(10)
21
143
1.5
1.5
1.2
1.1
0.9
1.7
0.1
0.1
0.2
0.2
0.2
0.8
* Amortization, settlement, release of installments and debit from charges
** Additional Provision allocated to the foreign trade loan portfolio
7.5.5 Foreign Loan Portfolio and Others
The table below shows the risk profile of BB’s foreign loan portfolio. In March 2009 the loans ranked at
risk levels AA-C accounted for 98.2% of the total portfolio, 90 base points lower than que previous
quarter, and 70 base points lower than the same period of 2008.
Table 79. Foreign Loan Portfolio by Level Risk
R$ million
Mar/08
Balance
Dec/08
Provision
Share
Balance
Mar/09
Provision
Share
Balance
Provision
Share
AA
6,916
-
65.9
9,487
-
62.8
9,317
-
63.3
A
2,213
11
21.1
2,725
14
18.0
2,449
12
16.6
B
1,127
11
10.7
1,672
17
11.1
1,572
16
10.7
C
126
4
1.2
1,092
33
7.2
1,117
34
7.6
D
13
1
0.1
5
0
0.0
114
11
0.8
E
1
0
0.0
0
0
0.0
8
2
0.1
F
-
-
-
-
-
-
0
0
0.0
G
0
0
0.0
9
7
0.1
14
10
0.1
H
102
102
1.0
124
124
0.8
135
135
0.9
Total
10,499
130
100.0
15,115
194
100.0
14,726
220
100.0
AA-C
10,383
26,1
98.9
14,977
63,1
99.1
14,455
61,5
98.2
116
103,5
1.1
138
131,2
0.9
271
158,3
1.8
D-H
The table below exhibits the rating by risk of the other loans not classified in the Retail, Commercial,
Agribusiness, Foreign Trade and Abroad portfolios. The balance refers largely to the portfolio of write-offs
recovery.
Table 80. Other Transactions Portfolio
R$ million
Mar/08
Balance
Dec/08
Provision
Share
Balance
Mar/09
Provision
Share
Balance
Provision
Share
AA
354
-
13.7
414
-
15.2
243
-
7.5
A
101
1
3.9
113
1
4.1
149
1
5.8
B
281
3
10.8
245
2
9.0
221
2
8.5
C
293
9
11.3
262
8
9.6
268
8
10.4
D
333
33
12.8
335
33
12.3
345
35
13.4
E
245
74
9.5
259
78
9.6
266
80
10.3
F
143
71
5.5
155
78
5.7
159
80
6.2
G
91
64
3.5
80
56
2.9
91
64
3.5
H
749
749
28.9
855
855
31.5
889
889
34.4
Total
2,591
1,004
100.0
2,717
1,111
100.0
2,631
1,157
100.0
AA-C
1,030
12
39.7
1,033
11
38.0
881
11
33,5
D-H
1,562
992
60.3
1,684
1,100
62.0
1,750
1,146
66,5
7.6 Fee Income
Table 81. Fee Income
R$ million
Chg. %
Quarterly Flow
1Q08
Fee Income
4Q08
1Q09
On 1Q08 On 4Q08
2,915
3,058
2,943
1.0
(3.7)
Account Fees
731
836
799
9.2
(4.4)
Loan Fees
264
161
157
(40.5)
(2.3)
Credit Card Fees
256
330
321
25.5
(2.6)
Investiment Fund Management Fees
477
465
445
(6.6)
(4.3)
Billings
249
272
257
3.2
(5.5)
Interbank
177
124
117
(33.7)
(5.2)
Collection
109
119
110
0.5
(7.2)
350.4
Services Rendered to Affiliated
69
4
20
(71.3)
Official Services Fees
14
14
15
4.9
3.5
569
734
702
23.4
(4.3)
Others
Fee income totaled R$ 2,943 billion in the quarter. This value corresponds to growth of 1.0% in
comparison with the same prior-year period and reduction of 3.7% in relation to 4Q08.
In spite of the growth of business and of the customer base, the growth percentage of these revenues in
comparison with 1Q08 is below the range of estimates (between 5 and 8%) disclosed by the Bank in
February 2009. This behavior was strongly influenced by the regulations of the collection of tariffs by the
Central Bank (circular 3,371), which took effect as of 2Q08, distorting the basis of comparison. As regards
the quarterly comparison, it is important to stress that the downslide is basically due to the lower quantity
of business days in each period: 4Q08 had 64 business days, while 1Q09 had only 61.
The change in the regulations regarding collection of bank fees by the Central Bank, in December 2007,
determined the creation of specific accounting subheadings to account for the Bank fee income, detailed
in Circular Letter 3,371, segregating it from the other fee income.
Banking Fee Income, characterized as the fees indicated by the Central Bank in Circular Letter 3,371,
added up to R$ 688 million in 1Q09, an amount 4.3% higher than the preceding quarter. However, for
purposes of comparability, and aiming to facilitate the reading and understanding of the figures, the
segregation determined bye the Central Bank was not adopted in the above table, that mantained the
overview of the main products and services that comprise the Bank Fee Income.
7.6.1 Revenues from Account Fees
The new regulation of the Central Bank that governs the collection of individual tariffs came into force in
the second quarter of last year. Provisions of the Central Bank directly affected the tariff income with Loan
Operations and Checking Accounts.
In relation to Loan Operations, the prohibition of the collection of the Credit Opening Tariff (TAC), main
tariff of this item, culminated in the reduction of 40.5% in 1Q09, in relation to 1Q08.
Regarding checking account tariffs, among other effects, the regulation abolished inactive checking
account maintenance tariffs and tariffs for processing checks. However, the impact of the regulations was
minimized by the growth of the customer base, by business expansion and by alterations in the amounts
of the actual fees of BB, which were adjusted as of last December. Therefore, this item ended 1Q09 with
a balance of R$ 799 million, recording growth of 9.2% in relation to 1Q08 and slide of 4.4% in relation to
the last quarter.
Including the account base of Nossa Caixa, whose controlling interest was acquired by BB in the quarter,
Banco do Brasil closed the quarter with 34,056 thousand checking accounts. The own base, considering
only the recently incorporated BEP and BESC, contains 30,574 thousand accounts, which represents
growth of 0.6% over the previous quarter and of 9.8% over 1Q08.
In a broader concept, which considers not only account holders, but all the customers with some active
business with the Banco do Brasil group, such as INSS beneficiaries, saving account holders and
customers of other products (including those sold by means of partnerships), the total base amounts to
48,121 thousand customers. Considering Nossa Caixa, the number reaches 53,889 thousand customers.
It is worth emphasizing that all the numbers involving Nossa Caixa are indicative simulations (pro forma),
as this institution has not yet been taken over, and that the amounts do not consider the overlapping of
part of the base of checking accounts and of customers.
in thousand
25,746
26,157
27,055
28,173
28,701
24,999
28,494
24,676
1,618
1,636
1,667
1,698
1,775
1,944
1,884
1,874
Jun/07
Sep/07
Dec/07
Mar/08
Jun/08
Sep/08
Dec/08
Mar/09
Individuals
Figure 40. Customer Base
Businesses
7.6.2 Asset Management
In the first quarter of 2009, Banco do Brasil accumulated R$ 445 million in Investment Fund Management
Fees, a decline of 4.3% in relation to the 4Q08, and of 6.6% in relation to the same quarter in the previous
year.
The drop in revenues in the annual comparison, in spite of the growth of the volume of managed funds, is
due mainly to changes in the mix, with reduction on the relative share of investment funds which generally
provide higher management fees, usually network funds (fees captured in branches from retail network).
BB Administração de Ativos - Distribuidora de Títulos e Valores Mobiliários (BB DTVM), a wholly-owned
subsidiary of Banco do Brasil, increased its market share this quarter, according to the Anbid ranking,
rising from 19.3% in Mar/2008, coming from 20.9% in the last quarter and ending the 1Q09 in 20.9%. The
balance of managed funds (Funds and Managed Portfolios) attained R$ 259.3 billion, growth of 5.3% in
the quarter and of 7.5% in the annual comparison.
It is worth informing that the numbers above do not include the funds managed by Banco Nossa Caixa
(BNC), whose controlling interest acquisition was announced recently by BB. At the end of 1Q09, the sum
of funds managed by BNC was R$ 27.9 billion. Further information can be consulted in the report entitled
- "Nossa Caixa - Net Income 1Q09", available at the website of the institution and in www.bb.com.br/ri.
R$ billion
19.1
18.1
18.3
19.3
19.4
19.8
20.7
20.9
241.3
245.9
241.5
246.3
259.3
Mar/08
Jun/08
Sep/08 Dec/08
220.1
208.9
206.9
Jun/07
Sep/07 Dec/07
Asset Management
Mar/09
Market Share - %
Figure 41. Asset Management
The table below evidences the Investment Funds and Managed Portfolios segmented per clients.
The sum of funds originating from individual investors exhibited a downslide both in the annual
comparison and in relation to the prior quarter. This downslide is due to a large extent to the financial
crisis, which contributed toward the reduction of the shareholders' equity of variable income funds, and
oscillation in the profitability of the fixed income funds, which leads more conservative investors to target
their investments at other financial instruments, such as CDB and Savings.
Institutional customers represent the main part of the sum managed. As mentioned previously, the funds
originating from these customers, besides government and foreign investors, have been increasing their
share in the total portfolio. This relative share was 63.2% in 1Q08 and reached 67.6% in 1Q09.
Table 82. Investment Funds and Managed Portfolios by Customer
R$ million
Chg. %
Mar/08
Institutional Investors
Individuals
Government
Businesses
Foreign Investors
Total
Part.%
Dec/08
Part.%
Mar/09
Part.%
On Mar/08
On Dec/08
99,273
63,022
44,223
25,820
8,965
41.1
26.1
18.3
10.7
3.7
102,526
58,477
49,201
23,721
12,408
41.6
23.7
20.0
9.6
5.0
105,244
59,922
56,894
24,189
13,074
40.6
23.1
21.9
9.3
5.0
6.0
(4.9)
28.7
(6.3)
45.8
2.7
2.5
15.6
2.0
5.4
241,301
100.0
246,334
100.0
259,324
100.0
7.5
5.3
In relation to the distribution by type of fund and portfolios, variable income funds exhibited recovery in
relation to the previous quarter, but are still at a lower level than that observed in 1Q08. Fixed income
funds continue the most significant in relation to the total under management. The table below presents
the concentration of resources by type of fund and portfolio.
Table 83. Investment Funds and Managed Portfolios by Type
R$ million
Chg. %
Mar/08
Part.%
Dec/08
Part.%
Mar/09
Part.%
On Mar/08 On Dez/08
Investment Fund
Fixed
Variable
Multimarket
Others
Managed Portfolios
Fixed
Variable
231,151
130,062
44,593
32,980
23,516
10,151
5,257
4,894
95.8
53.9
18.5
13.7
9.7
4.2
2.2
2.0
235,277
120,541
38,215
44,820
31,701
11,057
7,677
3,380
95.5
48.9
15.5
18.2
12.9
4.5
3.1
1.4
247,759
127,886
43,027
43,122
33,724
11,565
7,877
3,688
95.5
49.3
16.6
16.6
13.0
4.5
3.0
1.5
6.4
(1.7)
(3.5)
30.8
34.0
13.9
49.8
(24.6)
4.8
6.1
12.6
(3.8)
3.0
4.6
2.6
9.1
TOTAL
241,301
100.0
246,334
100.0
259,324
100.0
7.5
5.3
7.6.3 Cards
Fee Income associated with card transactions continue to grow at a strong pace. These income ended the
quarter at R$ 321 million in 1Q09, reflecting a 25.5% growth as compared to the same period in the
previous year.
As a consequence of the effort of the network of branches, and of the establishment of partnerships with
retail networks diversify the channels of supply, Banco do Brasil has managed not only to increase the
base of credit cards issued, but also to significantly increase the quantity of transactions and the total
sales. The quantity of transactions exhibited a downslide of 4.5% in relation to the previous quarter, but
expansion of 19.3% over 1Q08. The total sales presented a downslide of 7.1% in the quarter and growth
of 24.1% in the year. The slight drop in these indicators in relation to the previous quarter is motivated, in
addition to the lower quantity of business days, by the fact that the basis of comparison is inflated, as in
4Q08 there is more robust growth due to the holidays and Christmas shopping.
The total card base, which includes credit and debit cards besides cards of partnerships and intended for
non-checking account holders, attained 76.8 million, a quantity 11.3% higher than in 1Q08 and 0.3% over
the prior quarter. Of the total cards, 67.3% are exclusively debit. The composition of transactions is
slightly different: 50.8% of the transactions for credit cards and 49.2% for debit cards.
If the numbers of BNC were considered, the card base would be increased by 11.7 million cards in 1Q09,
with 1.8 million credit cards and 9.9 million debit cards. Further information can be consulted in the "Nossa Caixa - Net Income 1Q09" report, available on the website of the institution and in
www.bb.com.br/ri.
Debit Card s (in million )
Credit Car ds (in million)
25.2
21.3
16.7
Jun/07
25.3
25.7
51.2
25.7
22.4
43.4
44.7
47.2
52.0
52.7
52.9
48.2
18.8
Sep /07 Dec/07 Mar/08 Jun/08
Sep /08 Dec/08 Mar/09
Jun/07
Sep /08 Dec/08
Mar/09
Figure 42. Credit and Debit Cards
Consequence of the satisfactory performance evidenced above, BB has been gaining market share in the
indicators monitored by ABECS (Brazilian Association of Credit Card and Service Companies). In total
sales the market share climbed steeply from 17.7% in 1Q08 to 18.7% in 1Q09. The total sales with debit
cards attained 27.5% in 1Q09, as opposed to 26.2% in 1Q08. The total sales with credit cards went from
14.3% in 1Q08 to 15.1% in 1Q09.
R$ billion
6.2
6.4
7.3
8.9
7.8
5.0
5.3
6.5
6.9
7.3
8.2
8.3
8.9
9.7
10.4
10.2
2Q07
3Q07
4Q07
1Q08
2Q08
3Q08
4Q08
1Q09
Credit Cards
Debit Cards
Figure 43. Card Revenues
The total revenues obtained with cards, which besides Fee Income (RPS) includes Financing Revenue,
Inflation Accounting Revenue and Other Revenues and Other Services, reached R$ 1,047 million, growth
of 42.1% in relation to the same prior-year period.
Table 84. Fee Income from Cards
R$ million
Chg. %
Quarterly Flow
1Q08
4Q08
1Q09
On 1Q08 On 4Q08
Fee Income - Cards
Financing Income
Equity Income - Visanet
Other Income and Other Services
256
274
119
88
330
496
66
136
321
512
107
107
25.5
86.8
(10.3)
22.1
(2.6)
3.3
62.6
(21.6)
Total Revenues
737
1,027
1,047
42.1
1.9
7.6.4 Collections
Revenues from collections reached R$ 257 million in 1Q09, an increase of 3.2% in 12 months and a
decrease of 5.5% in relation to 4Q08. The reduced quantity of business days influenced not only the total
income earned, but also contributed toward the reduction of 10.4% in the volume collected in the quarter,
which ended 1Q09 at R$ 125.6 billion reais, referring to 121.1 million payment slips issued.
Figure 44. BB Billings Volume
4Q07
1Q08
3Q08
140,065
134,621
125,183
2Q08
4Q08
125,562
3Q07
119,190
100,522
2Q07
110,546
98,111
R$ million
1Q09
7.7 Administrative Expenses
Table 85. Commercial Income
R$ million
Chg. %
Quarterly Flow
Contribution Margin
Personnel Expenses
Other Tax Expenses
Commercial Income
1Q08
4Q08
1Q09
6,415
(3,561)
(1,801)
(1,734)
(26)
2,854
7,305
(4,515)
(2,301)
(2,043)
(170)
2,791
6,819
(3,973)
(2,129)
(1,801)
(43)
2,846
On 1Q08 On 4Q08
6.3
11.6
18.2
3.9
66.8
(0.3)
(6.7)
(12.0)
(7.5)
(11.8)
(75.0)
2.0
Commercial income represents the Bank’s business earnings after the deduction of the expenses
necessary for carrying on the business. An improvement of 2.0% was observed in commercial income in
1Q09 in relation to the preceding quarter, and in the YoY comparison, practical stability, negative variation
of 0.3%.
It is emphasized that as of the fourth quarter of 2008, with the acquisitions of BESC and BEP, there was
an impact on Administrative expenses of R$ 74 million in 1Q09 (R$ 80 million in 4Q08), expenditures that
did not constitute 1Q08.
The graph below shows the development of commercial income based on 2Q07.
Basis 2Q07
15.2%
13.2%
7.3%
2Q07
3Q07
4Q07
Net Financial Income
Figure 45. Changes in Commercial Income
1Q08
2Q08
Contribution Margin
3Q08
4Q08
1Q09
Commercial Income
7.7.1 Personnel Expenses
Personnel Expenses reached R$ 2,129 million in 1Q09, an increase of 18.2% in the year, but with a
decrease of 7.5% in relation to the previous quarter. It is emphasized that as of 4Q08 they began to count
personnel expenses referring to the takeovers of BESC and BEP, which in this quarter added up to R$
74.3 million, a sum that did not exist in 1Q08.
Table 86. Personnel Expenses
R$ million
Chg. %
Quarterly Flow
Personnel Expenses
Salaries
Benefits
Social Charges
Training
Pension Fund
Remuneration for Counselors and Directors
Administrative Personnel Provisions
1Q08
4Q08
1Q09
(1,801)
(846)
(261)
(306)
(10)
(22)
(5)
(350)
(2,301)
(1,298)
(315)
(456)
(31)
(9)
(193)
(2,129)
(1,033)
(308)
(356)
(9)
(29)
(9)
(385)
On 1Q08 On 4Q08
18.2
22.1
17.9
16.7
(8.8)
31.9
72.9
9.8
(7.5)
(20.4)
(2.2)
(21.9)
(69.3)
2.8
99.2
The increase observed in personnel expenses in 1Q09, in twelve months, is due mainly to two motives.
The base date for the collective bargaining of the banking class ends in September, hence from this date
on, the line of expenses reflects expenditures with salary adjustment. The average adjustment in the
employee payroll referring to the salary agreement of 2008 was 8.9%.
In addition, there was re-composition of the staff that left the Advance Resignation Plan at the end of 2007
and incorporation of the headcount of BEP and BESC. In this quarter, the average headcount is higher
than that observed in the same quarter of last year by 6,361 employees.
Jun/07
Sep/07
Dec/07
Employees
Jun/08
Interns
Sep/08
Dec/08
89,534
9,291
98,825
7,966
88,972
96,938
9,543
85,392
94,935
9,475
84,258
93,733
9,384
Mar/08
Total
Figure 46. Changes in Workforce
83,417
92,801
9,119
81,855
90,974
9,466
80,048
89,514
9,798
79,310
89,108
The figure below portrays the growth of the total staff at BB. At the end of 1Q09, Banco do Brasil had
98,825 collaborators, a headcount 6.5% higher than that of March 2008 and 1.9% higher than that of
December 2008. It is emphasized that this increase is influenced by the takeover of the banks BESC and
BEP, which added 3,310 employees to the base of BB. Regarding the BNC employees, there was 14,375
employees and 456 interns in the 1Q09.
Mar/09
Some BB productivity ratios are shown below.
Assets per Employees - R$ thousand
Customers per Employees
317
6,001
5,377
3,932
3,737
3,825
Jun/07
Sep /07 Dec/07
4,363
4,444
308
4,834
301
Mar/08 Jun/08
Jun/07
Sep /07 Dec/07
Mar/08 Jun/08
Employees / (Branch + PAA + PAB)
16.6
Jun/07
Figure 47. Productivity Ratios
16.6
16.7
17.0
17.1
17.3
16.4
Sep /07 Dec/07 Mar/08 Jun/08 Sep /08 Dec/08
310
300
298
295
313
16.8
Mar/09
7.7.2 Other Administrative Expenses
Other Administrative Expenses attained R$ 1,801 million in the first quarter of this year, positive variation
of 3.9% in twelve months and a downslide of 11.8% in comparison with the preceding quarter. It is
emphasized that as of 4Q08, expenditures relating to BESC and BEP started to appear in the Bank's
expenses, items that did not appear in 1Q08.
Table 87. Other Administrative Expenses
R$ million
Chg. %
Quarterly Flow
Telecommunications and Data Processing
Amortization and Depreciation
Security. Guard and Transport Services
Expenses with Premises and Equipment
Marketing and Public Relations
Expenses with Outsourced Services
1Q08
4Q08
1Q09
(1,734)
(442)
(194)
(253)
(217)
(78)
(232)
(318)
(2,043)
(427)
(215)
(284)
(255)
(183)
(348)
(330)
(1,801)
(433)
(218)
(282)
(248)
(114)
(267)
(240)
On 1Q08 On 4Q08
3.9
(1.9)
11.9
11.4
13.9
46.5
15.1
(24.5)
(11.8)
1.5
1.3
(0.7)
(2.7)
(37.9)
(23.5)
(27.4)
Some lines of expenses have seasonal behavior, such as Marketing and Public Relations, with expressive
growth in the last quarter with the year-end campaigns. In this quarter, advertising expenses were down
R$ 31.4 million, main variation on this line. It is emphasized that in the year 2008, marketing expenses
were concentrated in the second semester, as a result, the comparison with 1Q08 was impaired.
As refers to Outsourced Services, a reduction of R$ 24.7 million can be verified in relation to specialized
technical services, basically in external consulting services used in expansion projects of BB.
And on the line of Other Administrative Expenses, we emphasize a reduction of R$ 14.5 million in 1Q09
referring to transfers not performed to Fundação Banco do Brasil.
7.7.3 Distribution Network
With national coverage and presence in 3,429 municipalities in the country, which corresponds to 62% of
the Brazilian municipalities, besides branches located in 23 countries, Banco do Brasil has the largest
branch network in Brazil. At the end of 1Q09, Banco do Brasil’s own service network in Brazil comprised
16,207 points (growth of 883 points in relation to 1Q08) and is classified in the chart below. Please note
that 682 points of service originated from the BESC network, of which 252 branches, 158 PAB, 21 PAE,
and 250 SAA. The takeover procedures of the 250 self-service rooms were only concluded in 1Q09,
which is the reason why these points were not listed in the Performance Analysis report of 4T08.
Regarding the distribution network of Nossa Caixa, there were 563 branches, 369 PAB, 1 PAP and 1
PAA. Those numbers are not included in the table below.
Table 88. Distribution Network
Jun/07
Branches
PAA
PAB
PAE
SAA
PAP
Total
Set/07
Dez/07
Mar/08
Jun/08
Sep/08
Dec/08
Mar/09
3,977
188
1,209
5,906
3,879
2
3,984
185
1,208
5,949
3,884
2
4,008
186
1,247
5,948
3,906
2
4,024
187
1,251
5,935
3,925
2
4,052
188
1,249
5,911
3,951
2
4,077
184
1,225
5,969
3,980
3
4,342
187
1,389
6,055
3,987
4
4,354
182
1,360
6,061
4,248
2
15,161
15,212
15,297
15,324
15,353
15,438
15,964
16,207
The Bank’s distribution network is divided into 5 types of points of service, besides the branches:
PAA – Advanced Service Post: these are points of service intended for towns lacking banking services.
They have a small staff and electronic services;
PAB – Banking Service Post: this type of unit is located inside the premises of companies or government
offices. This service structure requires one employee and electronic services;
PAE – Electronic Service Post: the structure of services is exclusively electronic;
SAA – Self-Service Room: exclusively electronic structure of services, installed in the main areas of the
branches; and
PAP – Payment and collection post: located mainly in government offices (town halls) for carrying out
receipts and payments. Employees and automated teller machines provide the service:
North
Retail
239
Wholesale
2
Govern
7
High Income 2
5.7%
23.9%
Midwest
Retail
391
Wholesale
5
Govern
5
High Income 10
South
Retail
1.057
Wholesale 22
Govern
3
High Income 9
Figure 48. Total Distribution Network
Northeast
Retail
995
Wholesale
7
Govern
9
High Income 10
9.4%
35.6%
25.4%
Southeast
Retail
1.483
Wholesale 46
Govern
5
High Income 47
To render an excellent service and improve the level of satisfaction of clients, Banco do Brasil segments
its customer base according to each profile and relationship, developing strategies for the specific
segments.
The Retail distribution network, which is almost totally responsible for the relationship with Individual
clients and Micro and Small Businesses (MSEs), ended the quarter with 4,165 branches. Moreover, in the
delivery of services to individuals, emphasis is placed on the bank correspondents that serve the clients of
Banco do Brasil without using the Bank's infrastructure, generating cost savings. In 1Q09 Banco do Brasil
had a total group of 8,888 banking correspondents, with 5,601 from its own network and 3,287 operating
points of Banco Popular do Brasil. The total group of banking correspondents exhibited growth of 43.1%
in relation to 1Q08. The banking correspondents network alone was accountable for 14.7 million
transactions all over Brazil.
In relation to the Wholesale market, the service network is comprised by 81 branches, of which 15 are
Corporate and 66 Business branches, serving 39.3 thousand customers. Most of the network is located in
the Southeast (57%) and South (27%) regions of Brazil, regions with the largest concentration of large
companies. The services are segmented considering the annual sales volumes in accordance with the
following table:
Table 89. Wholesale Pillar Branches
Corporate
Business
Industry
Commerce
Services
Over R$ 90 million
From R$ 10 to R$ 90 million
Over R$ 150 million
Over R$ 150 million
On the other hand, the Government, comprised by direct administration, federal entities, foundations and
public companies, was comprised by 29 agencies, whose business focus is the relationship with the
Federal Government and the State and Municipal spheres, encompassing the Executive, Legislative, and
Judicial Authorities. The strategy of working in this market has ensured appropriate solutions for the
specific aspects of each one of the niches of its segment, acting to generate value through solutions with
new products and freeing processes from red tape, with the exclusive electronic bidding service.
The Banco do Brasil overseas network numbers 43 points of service (13 branches, 11 sub-branches, 11
representation offices and 6 subsidiaries, 1 shared service unit and 1 business unit), in 23 countries.
Complementing this structure, BB keeps a relationship with other financial institutions abroad to service its
customers, and, at the end of December, had 1,277 banking correspondents active in 142 countries.
Table 90. Distribution Network Abroad
Branches
Sub-branches
Representative
Offices
Subsidiaries
Assunção
Cascais
Caracas
Banco do Brasil AG
Buenos Aires
Cidade do Leste
Cidade do México Banco do Brasil Securities LLC
Frankfurt
Gifu
Dubai
BB Leasing Company Ltd.
Grand Cayman Gunma
Hong Kong
La Paz
Hamamatsu
Lima
Londres
Madri
Miami
Milão
Nova Iorque
Paris
Santiago
Tóquio
Ibaraki
Nagano
Nagóia
Parque das Nações
Porto
Santa Cruz de La Sierra
Montevidéu (*)
Luanda
Panamá
Seul
Washington
Xangai
BB Securities Ltd.
BAMB Brazilian American
Merchant Bank
BB Securities Ltd. Londres
(*) Unit in process of installation
Shared Services
Business
Units
Units
BB USA Servicing
Roma
Center
7.7.4 Automated Channels
39,952
39,417
39,279
38,692
38,766
39,918
39,714
40,543
Banco do Brasil’s self-service network represents a strategic differential, offering an extensive range of
services to BB client, besides supporting the cost control strategy of the institution. In March 2009, BB had
a network of 40,543 automated teller machines (ATMs) in Brazil and abroad. The expressive growth, of
1,851 ATM's in relation to March 2008, results, in addition to the investments made, from the takeover of
the BESC system. It is important to emphasize that these numbers do not add the 3,711 BNC ATM
network.
Jun/07
Sep/07
Dec/07
Mar/08
Jun/08
Sep/08
Dec/08
Mar/09
Figure 49. Automated Teller Machines
The ATM's are responsible for the processing of an expressive portion of the total banking operations
performed by Banco do Brasil. In March 2009, 95.4 % of the cash withdrawals, 82.4 % of the checkbooks
delivered, 73.5 % of the deposits and 65.5% of the receipts of bills and contractual payments passed
through the ATM network.
Besides the cashiers at the branches and the ATMs, Banco do Brasil offers several other options for
access to banking services, such as: the Internet, Financial Manager (and Internet banking tool for
businesses), POS equipment (credit and debit card machines at the commercial establishments),
telephone, fax, and mobile banking (WAP). At the end of the period, BB had 0.7 million clients capable of
using the mobile banking service, and8.7 million clients using the internet channel, keeping its leadership
in internet banking.
Banco do Brasil, in partnership with Visa, is the only bank to operate with Visa Mobile Pay technology in
Latin America, which allows the clients of BB to pay for purchases using their mobile phones. This
technology, combined with the mobile banking services already offered, confirms the Bank's vanguard
position in banking technologies.
The figure below presents the percentage of transactions processed by each one of the main customer
service channels made available by Banco do Brasil. At the end of the quarter, the automated channels
were accountable for 91.3 % of the total transactions.
90.5
90.1
91.1
91.3
5.6
5.9
5.8
6.1
6.3
9.9
8.7
9.2
9.5
8.5
9.5
8.7
9.9
10.9
8.9
9.5
8.7
18.0
18.1
19.3
19.0
20.2
19.3
18.4
13.8
14.1
13.3
16.0
14.4
14.9
14.3
16.3
45.9
46.4
45.6
40.50
42.7
40.6
40.6
40.7
2Q07
3Q07
4Q07
1Q08
2Q08
3Q08
4Q08
1Q09
90.7
91.3
90.5
2.3
4.1
4.4
7.8
10.1
8.1
9.3
18.3
89.9
TAA
Cash
Automated Transactions
Figure 50. Costumer Access Options
Internet Individuals
POS
Internet Businesses
COBAN e Otherss
7.7.5 Productivity – Coverage Ratios
The coverage ratios show the capacity for covering fixed costs using only fee income.
The coverage ratio of personnel expenses attained 131.9% in 1Q09, compared to 125.8% in 4Q08 and
150.8% in 1Q08. The deterioration in the indicator in the yearly comparison is a result of the rise in
personnel espenses, affected by salary readjustments and by the raise of average quantity of employees
due to the incorporation processes. Besides, the legislation of the Bacen that regularizes the customers
fee collection begun in April, 2008, not changing the fee income of 1Q08.
The coverage ratio for administrative expenses moved from 79.3% in 1Q08 to 71.3% in 1Q09.
Service Revenues / Personnel Expenses
150.8
127.4
131.2
2Q07
3Q07
120.2
4Q07
1Q08
136.4
134.6
125.8
131.9
2Q08
3Q08
4Q08
1Q09
Service Revenues / Administrative Expenses
79.6
68.9
70.4
65.2
2Q07
3Q07
4Q07
1Q08
74.9
73.8
2Q08
3Q08
71.3
66.9
4Q08
1Q09
Figure 51. Coverage Ratios
Table 91. Coverage Ratios
2Q07***
Fee Income
Personnel Expenses
Fee Income / Personnel Exp.*
Fee Income / Administ. Exp.**
2,437
3,535
1,914
127.4
68.9
3Q07
2,498
3,550
1,905
131.2
70.4
4Q07
2,590
3,972
2,155
120.2
65.2
1Q08
2,915
3,660
1,933
150.8
79.6
2Q08
2,905
3,877
2,131
136.4
74.9
3Q08
2,933
3,972
2,178
134.6
73.8
4Q08
3,058
4,571
2,430
125.8
66.9
R$ million
1Q09
2,943
4,128
2,231
131.9
71.3
* In the calculation of this ratio Labor Lawsuits are included,
** In the calculation of this ratio Legal Risk is included (Legal Claims and Labor Lawsuts),
*** The amounts referring to the Suspension of Previ Contributions - Plan I and PAA were included in the calculation of Personnel Expenses of 2Q07.
Despite the expansion of the service network, necessary to meet the constant increase in the customer
base, BB has kept its cost structur;e compatible with its generation of business, as seen in the graphs
below:
Loa n Port folio / P oints of Service
Service Revenue s / Points of S erv ice
11.3
12.4
13.1
14.1
9.9
10.5
14.1
9.6
15.2
15.2
15.3
15.3
15.4
15.4
16.0
16.2
Mar/08
Jun/08
Sep /08
Dec/08
Mar/09
Jun/07
Sep /07 Dec/07
160 .7
164 .2
169 .3
15.2
15.2
15.3
Jun/07
Poin ts of Ser vice
Credit Portfo lio / Points of Service - R$ million
22.0
Jun/07
23.7
21.6
Poin ts of Ser vice
Sep /07 Dec/07
Mar/08 Jun/08
4,893
23.8
Sep /08 Dec/08
190 .0
15.3
15.4
15.4
Mar/09
4,954
5,038
5,100 5,252
5,490
20,807
18,107
8,888
13,448
9,902
14,756
10,538
6,985
2,943
2005
2006
Service Revenues
* Annualized
Figure 53. Business vs. Expenses
16.2
Mar/09
5,133
5,186
Jun/07 Sep /07 Dec/07 Mar/08 Jun/08 Sep /08 Dec/08 Mar/09
24,108
7,648
16.0
Ser vice Re ven ues / Points of Service - R$ tho usa nd
R$ million
13,020
181 .6
Sep /08 Dec/08
Figure 52. Productivity Ratios
16,709
12,398
191 .5
Cus tom ers / (Branch + PAA + PAB)
25.1
23.0
22.5
189 .2
Personnel Expenses pe r Employ ee - R$ thousand
21.6
190 .2
2007
Net Interest Margin
2008
3,973
1Q09
7.8 Operating Income
Table 92. Operating Income
R$ million
Chg. %
Quarterly Flow
1Q08
Commercial Income
Legal Risk
Legal Claims
Labor Lawsuits
Other Operating Income
Eq Int. in Results of Subs. and Affil.
Res. from Insur., Pesion Plan and Capitalization Op.
Other Operating Income / Expenses
Operating Income
2,854
(125)
6
(132)
(424)
(115)
101
(410)
879
(1,290)
2,305
4Q08
2,791
(226)
(97)
(129)
(189)
(3)
353
(539)
1,230
(1,769)
2,375
1Q09
2,846
(197)
(95)
(102)
(550)
(5)
303
(849)
795
(1,643)
2,099
On 1Q08
(0.3)
57.5
(22.7)
29.7
(95.7)
201.1
106.9
(9.6)
27.4
(8.9)
On 4Q08
2.0
(12.8)
(1.8)
(21.1)
191.0
48.9
(14.2)
57.5
(35.4)
(7.1)
(11.6)
The Operating Income ended the quarter at R$ 2,099 million, which represents a decrease of 11.6% in
comparison with 4Q08 and of 8.9% in comparison with 1Q08. The operating income is determined with a
basis on the Commercial Income, plus the results of two major lines: "Legal Risk" and "Other Operating
Income / Expenses".
As can be observed in the table above, the expenses with provisions for legal risk showed growth of
57.5% in the annual comparison, but a decrease of 12.8% in comparison with 4Q08. The performance in
the quarter is basically due to the decrease of 21.1% in the expenses with provisions for labor claims.
The account “Other Operating Income” is compound by the items “Equity Interest in Results of
Subsidiaries and Affiliated”, “Results from Insurance, Pension and Capitalization Operations” and “Other
Operating Income / Expenses”.
The Equity Interest in Results of Subsidiaries and Affiliated presented a improve comparing to the
previous year, decreasing the deficit in this line from R$ 115 million to R$ 5 million. In the quarter
comparison there was stability in this line.
The Results from Insurance, Pension and Capitalization Operations registered growth of 201.1%
comparing to the last year, and a decrease of 14.2% comparing to the last quarter.
The Other Operating Income / Expenses recorded a 57.5% drop over the last quarter and a 106.9% drop
in twelve months. This line performance was impacted by “Other Operating Expenses” that fell 7.1% in the
quarter and rose 27.4% in twelve months. We present below the main items that influenced the
performance of this line, in relation to the previous year:
R$ 74 million - reclassification of provisions from ‘with loan characteristics’ to ‘without loan
characteristics’;
R$ 90 million - increase in expenses with premiums paid to customers;
R$ 70 million - increase in expenses with card relationship programs. The growth on this line results
from the natural increase of credit and debit card base, and from the revenues provided by this
business;
R$ 30 million - expenses with interest, due to the restatement of the installments related to the of the
acquisition of the controlling of Banco Nossa Caixa.
7.9 Net Value Added
The table Net Value Added shows how Banco do Brasil’s income is made up of the generation of value
from each of the Bank’s businesses, and then shows a breakdown of the distribution of these proceeds.
The point of view used is the net interest income, which includes financial intermediation income and
expenses, without allowances for loan losses.
Table 93. Net Value Added
Net interest income
Income from Non-Financial Products
Account Fees
Investment Fund Management Fees
Loans
Billings
Collections
Credit Cards Fees
Insurance
Others
Insurance – Brokerage
Insurance – Results
Others Fee Income
Equity Interest in Results of Subs.and Affil.
Res. from Insurance, Pension Plan and Capitalization Operations
Other Operational Revenues
Non Operation Income
Value Added
Distribution of Value Added
Operational Revenues
Provision for Credit Risk
Other Operational Income
Personnel Expenses
Personnel Expenses
Statutory Profits Sharing
Tax Expenses
Taxes on Sale
Other Tax Expenses
Extraordinary Items
Value Added to Shareholders
R$ million
Quarterly Flow
Chg. %
1Q08
4Q08
1Q09
On 1Q08
On 4Q08
5,568
7,077
6,985
25.4
(1.3)
2,116
2,212
2,130
0.6
(3.7)
731
836
799
9.2
(4.4)
477
465
445
(6.6)
(4.3)
264
161
157
(40.5)
(2.3)
249
272
257
3.2
(5.5)
109
119
110
0.5
(7.2)
256
330
321
25.5
(2.6)
30
30
40
35.5
35.6
1,889
2,431
1,923
1.8
(20.9)
111
185
127
15.2
(31.0)
133
150
157
17.3
4.2
689
662
686
(0.3)
3.8
(248)
(154)
(162)
(34.9)
5.2
101
353
303
201.1
(14.2)
879
1,230
795
(9.6)
(35.4)
224
5
16
(92.6)
236.9
9,573
11,720
11,038
15.3
(5.8)
(7,225)
(8,775)
(9,372)
29.7
6.8
(2,824)
(4,009)
(4,134)
46.4
3.1
(1,534)
(2,240)
(2,491)
62.4
11.2
(1,290)
(1,769)
(1,643)
27.4
(7.1)
(2,233)
(2,628)
(2,413)
8.0
(8.2)
(1,933)
(2,430)
(2,231)
15.5
(8.2)
(301)
(198)
(181)
(39.8)
(8.3)
(1,728)
(2,140)
(1,897)
9.8
(11.4)
(1,229)
(1,316)
(1,237)
0.7
(6.0)
(534)
(589)
(618)
15.6
4.8
(26)
(170)
(43)
66.8
(75.0)
(669)
(557)
(577)
(13.8)
3.7
789
1,318
309
(60.9)
(76.6)
2,347
2,944
1,665
(29.1)
(43.4)
8 – Risk Management
8.1 Risk Management
In this quarter, some tables and figures in this chapter were changed by the consolidation of Nossa Caixa
(BNC) data. To make the reading and understanding easier, we identified in the text the referred tables
that consider BNC numbers.
8.1.1 Market Risks
Introduction
BB uses statistical and simulation methodologies to measure the market and liquidity risks of its positions.
Among them, it is worth highlighting:
• Value at Risk (VaR);
• Sensitivity (parallel shift and curvature of risk factors);
• Stress test.
The Value at Risk (VaR) is a measure of the maximum loss expected in monetary values, under routine
market conditions, in a given timeframe, given a confidence interval. At BB, the VaR is measured by the
historical simulation methodology, with a confidence interval of 99%, for the investment timeframe of 1
(one) day.
The Historical Simulation methodology employs interest rate changes, market ratios, foreign exchange
rates, shares, and commodities. This methodology undergoes a process of backtesting, which consists of
comparing the distribution of the values calculated with the financial results actually occurred.
With a view to determining the sensitivity of the Bank’s capital to the impacts of extreme market
movements, stress scenario tests are carried out. These scenarios are constructed from shocks in the
market, and are based on significant historical moments or forecast economic-financial scenarios.
Policies
The Policy on Market and Liquidity Risk and the Policy on the Use of Derivative Financial Instruments
approved by the Board of Directors, are part of the strategic documentation regarding the BB's market
and liquidity risk management.
These documents are intended to establish guidelines to be complied with in the Company's business
decisions involving market and liquidity risk, dealing with quantitative aspects as well as the metrics used
and the interest rate risk reference parameter, and also qualitative aspects such as the hedging policy,
scope of management, and segregation of functions.
Structure
In accordance with CMN Resolution 3,464, of 6.26.2007, financial institutions should implement a
structure for the management of market risk segregated from the business units and from the unit
executing the internal audit activity, and compatible with the nature of transactions, the complexity of
products and the dimension of exposure to market risk of the institution.
The Bank has a market risk management structure represented by the Risk Management Directorate
(Diris), compatible with the Bank's nature of transactions, and totally segregated from the business units
and the Internal Audit unit.
One of the main responsibilities of Diris in market and liquidity risk management is the proposition of
policies, guidelines, methodologies and limits of market risk, as well as the identification, assessment,
monitoring and control of the market and liquidity risk of the Financial Group, the identification and
monitoring of the market and liquidity risk of the other companies that form the Economic/Financial
Consolidate.
Foreign Exchange Exposure
Banco do Brasil adopts the policy of foreign currency exposure so as not to generate capital requirement
for its coverage. Below, we present the management statement of foreign currency assets and liabilities
referenced to the American dollar, position at 03/31/2009:
Table 94. Balance in Foreign Currency
R$ thousand
ASSETS
Current and Long-Term Assets
Available Funds
Short-Term Interbank Investments
Securities
Interbank Accounts
Intrabank Accounts
Loans / Leasing
Other Assets
Permanent
Investiments
Property and Equipaments
Leasing Assets
Deferred
61,368,903
61,294,445
881,452
20,502,545
4,730,553
18,666,735
16,513,160
74,459
23,639
34,034
16,786
R$ thousand
LIABILITIES
Current and Long-Term Liabilities
Deposits
Demand Deposits
Saving Deposits
Interbank Deposits
Time Deposits
Funds from Acceptance and Securities Placed
Interbank Accounts
Intrabank Accounts
Borrowing / Onlending
Other Accounts Payable
Unearned Income
64,891,390
64,882,074
27,292,740
2,331,755
2,616,591
6,627,370
15,717,024
6,553,704
842,989
1,372,792
9,933,146
1,612,152
17,274,550
9,316
-
OTHER ASSETS AND LIABILITIES
Off Balance
TOTAL ASSETS
130,259
61,499,163
Off Balance
TOTAL LIABILITIES
NET
64,891,390
3,392,227
Brasil’s foreign exchange exposure calculated according to Bacen Circular 3,389, of 06.25.08 was R$
1,182 million, at March 31, 2009, also considering Banco Nossa Caixa.
The chart that follows shows the quarterly behavior of Banco do Brasil’s foreign exchange exposure in
relation to the Referential Equity Amount (RE) since March/2007:
Foreign Exposure Exchange - % of RE
5.00%
4.00%
0.22%
0.33%
3.00%
2.37%
Exposure % Current Basket
2.83%
0.34%
0.28%
0.18%
0.20%
Jun/08
Sep/08
Exposure % Other Currencies
Mar/09
1.21%
2.40%
Dec/08
1.23%
Dec/07
1.26%
Mar/08
2.00%
Sep/07
0.00%
1.77%
2.01%
1.04%
3.41%
Jun/07
1.00%
0.08%
0.19%
Mar/07
2.00%
3.30%
0.26%
“ G “ Portion
Figure 54. Changes in Foreign Exchange Exposure
Balance Sheet by Index
Banco do Brasil manages its expositions in a consolidated manner, analysing the impacts of several
scenarios and stress tests. We present below the composition of assets and liabilities of Banco do Brasil
in the country, detailed by index:
R$ billion
Assets
Liabilities
119.1
221.1
Fixed
CDI/TMS/FACP
IRP/TBF/TR
Price Index
TJLP
US$/Gold
W/O Index
Assets: Tax Credit; Permanent
Liabilities: Equity; Adm. Pro.; Float
131.3
121.2
95.4
47.6
15.3
27.6
44.8
5.9
27.4
48.3
32.1
21.7
39.2
78.8
Total R$ 538.7 bi
Figure 55. Composition of Banco do Brasil's assets and liabilities in the country
The chart below shows Banco do Brasil’s net mismatches, by index in Brazil.
R$ billion – 12.31.08
18.93%
101.9
1.75%
9.4
0.05%
0.3
-3.5
-0.65%
Fixed
Price
Index
TJLP
-10.3
-10.4
-1.91%
-1.94%
-39.6
-47.8
-7.35%
-8.88%
US$/Others CDI/TMS/FACP W/O Index PL/Others IRP/TBF/TR
Figure 56. Net Position
Portfolios
BB Consolidated
The consolidated portfolio of Banco do Brasil is formed by asset and liability positions, comprised of
commercial and treasury operations, including derivative financial instruments, recorded in the
consolidated balance sheet of the BB Conglomerate, considering all the market risks.
The figure below shows a Box-Plot analysis of the Consolidated BB Value at Risk (VaR) since the second
quarter of 2007.
1,400,000
1,200,000
1,000,000
800,000
600,000
400,000
200,000
0
2Q 2007
3Q 2007
4Q 2007
Figure 57. Financial Consolidated BB VaR
1Q 2008
2Q 2008
3Q 2008
4Q 2008
1Q 2009
st
The increase observed in the VaR in the 1 quarter 2009, was caused mainly by changes in
methodologies with increase of confidence interval from 95% to 99% and of historical window from 150 to
252 weekdays, implemented from march 2009 on.
The following table describe the BB Consolidated minimum, average, and maximum VaR observed on the
following periods:
Table 95. Consolidated BB VaR
R$ thousand
Minimum Average Maximum
Period
Jan to Dec/2007
Jan to Dec/2008
Jan to Mar/2009
89,850
89,426
389,597
135,094
167,455
212,117
652,740
698,069 1,301,299
BB Foreign Network
The consolidated portfolio of the Abroad Network is made up of the positions of assets and liabilities,
comprising commercial, financial, derivative and securities transactions, recorded in the balance sheets of
Banco do Brasil’s units located abroad.
The figure below shows a Box-Plot analysis of the Consolidated Abroad Network's VaR since the second
quarter of 2007.
70,000
60,000
US$ thousand
50,000
40,000
30,000
20,000
10,000
0
2Q 2007
3Q 2007
4Q 2007
1Q 2008
2Q 2008
3Q 2008
4Q 2008
1Q 2009
Figure 58. Consolidated Abroad Network's VaR
The following table describe the Abroad Network's minimum, average, and maximum observed on the
following periods:
Table 96. Foreign Network's VaR
Period
Jan to Dec/2007
Jan to Dec/2008
Jan to Mar/2009
US$ thousand
6,695
14,349
9,056
19,657
21,842
35,088
41,515
41,887
59,930
BB Trading portfolio
For management purposes, Banco do Brasil separates trading operations from the others, establishing its
own strategies and limits. The portfolios shown below,
International and Domestic Trading, are
subdivisions of the Trading Portfolio (Bacen Circular 3,354), presenting greater appetite for risk and
return.
The illustration below shows a Box-Plot analysis of the International Trading portfolio's VaR since the
second quarter of 2007.
1,200
1,000
US$ thousand
800
600
400
200
0
2Q 2007
3Q 2007
4Q 2007
1Q 2008
2Q 2008
3Q 2008
4Q 2008
1Q 2009
Figure 59. Fixed Interest Rate Portfolio's VaR
The table below sets out the average, minimum and maximum V@R of the international trading portfolio
observed in the periods shown:
Table 97. International Trading Porfolio’s VaR
Period
Jan to Dec/2007
Jan to Dec/2008
Jan to Mar/2009
US$ thousand
102
218
220
655
600
228
1,114
952
239
The illustration below shows a Box-Plot analysis of the Domestic Trading portfolio's VaR since the second
quarter of 2007.
4,000
3,500
R$ thousand
3,000
2,500
2,000
1,500
1,000
500
0
2Q 2007
3Q 2007
4Q 2007
1Q 2008
2Q 2008
3Q 2008
4Q 2008
1Q 2009
Figure 60. VaR for the International Trading portfolio
The increase of VaR observed since the last quarter of 2008, was caused mainly by the improvement of
the construction methodologies of the Bank's corporate curves, implemented as of November/2008, used
for market risk management purposes.
The following table describes the Domestic Trading portfolio's minimum, average, and maximum VaR for
the following periods:
Table 98. VaR for the International Trading
Period
Jan to Dec/2007
Jan to Dec/2008
Jan to Mar/2009
R$ thousand
0
0
0
382
657
1,601
1,584
3,792
2,582
Sensitivity to Interest Rate
We present below a table containing the inventory of operations sensitive to the variations in the interest
rates, allocated by risk factor and by interest rate repricing period, of the Banco do Brasil group:
Table 99. Sensitivity to Interest Rate
R$ million
< 1 Mo
1 > 3 Mo
3 > 6 Mo
6 > 12 Mo
1 > 3 Yrs > 3 Yrs
Tot al
Assets
Fix ed
102 ,84 7
CDI/TMS
119 ,50 4
0
0
0
0
0
119 ,50 4
Inf lat ion
0
15,276
0
0
0
0
15,276
TR/IRP
0
47,557
0
0
0
0
47,557
812
26,828
0
0
0
0
27,640
8,791
4,821
7,679
8,081
5,013
6,151
40,535
231 ,95 4
107 ,16 7
29,398
33,633
37,491
20,124 459 ,76 6
(60 ,27 8)
(10 ,35 9)
(5,890 )
(8,771 )
(12 ,82 0)
(9,149 ) (10 7,2 67)
(12 9,8 11)
0
0
0
0
0 (12 9,8 11)
TJLP
US$/ME
Tot al - Earning Asset s
Fix ed
Lia bilities
CDI/TMS
12,685
21,719
25,551
32,479
13,973 209 ,25 5
Inf lat ion
0
(5,860 )
0
0
0
0
TR/IRP
0
(95 ,39 1)
0
0
0
0 (95 ,39 1)
TJLP
US$/ME
Tot al - Inte res t Bearing Liabilities
(5,860 )
(69 1)
(26 ,66 8)
0
0
0
0 (27 ,36 0)
(11 ,60 7)
(5,248 )
(6,907 )
(10 ,09 9)
(8,679 )
(1,498 ) (44 ,03 8)
(20 2,3 88)
(14 3,5 26)
(12 ,79 7)
(18 ,87 1)
(21 ,49 8) (10 ,64 7) (40 9,7 26)
Int ere st Sensit ivity GAP
29,566
(36 ,35 9)
16,600
14,762
15,993
9,477
50,040
Accumula ted G AP
Accum. G AP as % Asset s ( tha t e arn interest )
29,566
8.6%
(6,793 )
(2.0% )
9,808
2.9%
24,570
7.2%
40,563
11.8%
50,040
14.6%
10.9%
8.1.2 Liquidity Risk
Banco do Brasil maintains levels of liquidity that are adequate for the institution's commitments assumed
in Brazil and abroad, resulting from its broad and diversified depositor base and the quality of its assets,
the capillarity of its network of overseas branches and of access to the international capital market.
Stringent control over liquidity risk is in accordance with the Market and Liquidity Risk Policy established
for the Conglomerate, fulfilling the requirements of national banking supervision and of the other countries
where the Bank operates.
Management instruments adopted in the Conglomerate are:
•
•
•
Short, Medium and Long Term Liquidity Forecasts.
Risk Limits.
Liquidity Contingency Plan.
Short, Medium and Long-term Liquidity Forecasts permit the evaluation of the effect of mismatching
between funding and investments, with the objective of identifying situations that could compromise the
institution's liquidity. Take into consideration the budget planning of the institution, as well as market
conditions.
The Liquidity Reserve, monitored daily, is the limit of risk utilized in short term liquidity management of the
domestic and international areas. It is the minimum level of assets of high liquidity to be maintained by the
Bank, compatible with the exposure to risk resulting from the characteristic of its operations and from the
market conditions. This Reserve is utilized as a parameter for the identification of a possible liquidity crisis
and potential engagement of the Liquidity Contingency Plan.
apr/08
may/08
jun/08
jul/08
aug/08
sep/08
Average Liquidity
oct/08
nov/08
dec/08
jan/09
feb/09
mar/09
Liquidity Reserve
Figure 61. Liquidity Reserve - Domestic Treasury
A minimum limit for the Indicator of Availability of Free Funds (DRL) is defined annually by the Global Risk
Committee (CGR) for management of the liquidity structure from the domestic area. This indicator, utilized
in the planning and in the execution of the institution's budget, aims to guarantee a balance between
funding and application of resources from the commercial portfolio and to ensure the financing of liquidity
with structural resources. The DRL limit, monitored monthly, guides budget preparation according to
funding and commercial investment goals and the liquidity management established by the Board of
Directors.
apr/08
may/08
jun/08
jul/08
aug/08
sep/08
oct/08
nov/08
dec/08
Monthly DRL
jan/09
feb/09
mar/09
Annual Limit
Figure 62. DRL Indicator
After the implementation of the liquidity re-composition plan started in June 2008, resulting in the
adaptation of the DRL limit to that year, CRG established a new limit for 2009, with a view to the business
strategy and the market conditions.
apr/08
may/08
jun/08
jul/08
aug/08
sep/08
Average Liquidity
oct/08
nov/08
dec/08
jan/09
feb/09
mar/09
Limit
Figure 63. Liquidity Reserve - International Treasury
The actions and steps to be taken in a liquidity crisis are defined in the Liquidity Contingency Plan. This
Plan will be activated when the sum shown or the Liquidity projection points to levels below the Liquidity
Reserve's pre-defined limit .
8.1.3 Credit Risk
Credit Risk Management
With the intention of fulfilling the demands of Basel II and aligned with best risk management practices,
the BB developed its own methodology for the determination of risk components: Expected Default
Frequency (FEI), Loss Given Default (LGD), exposure to credit risk, which are inputs for the measurement
of the Economic Capital (EC) and of the Expected Loss (EL).
The internal model for measuring the VaR of credit has its theoretical grounds based on the actuarial
approach, which is widely divulged nowadays in the banking industry.
The VaR of the loan portfolio is associated with a distribution of added loss for a given level of confidence.
The mean value of this distribution is the Expected Loss, which represents how much the Bank expects to
lose on average in a given period of time, the protection of which is performed by means of provision.
Now the Economic Capital, which is associated with Unexpected Loss, is determined by the difference
between VaR and EL. For this portion the Bank protects itself by allocating capital for risk coverage.
Frequency %
Reliance
Level (%)
EL
Economic Capital
VaR
Losses - $
Figure 64. Measuring and management instruments
The distribution of aggregate loss is generated utilizing the following risk components as data input: EDF,
LGD and exposure subject to credit risk. In relation to these risk components, the Bank has been working
on the optimization of its modeling.
The measurement of the VaR of Credit provides subsidies for the appraisal of risk and return of the
Bank's loan portfolio, and for the process of establishment of limits for the loan portfolio.
Its evaluation has helped in the decision-making process of the Bank, bringing historical information and
permitting an analysis of the risk behavior trend. Furthermore, its use has proved extremely valuable in
the dissemination of the credit risk management culture at the Bank.
As regards the evaluation of the return, the values of EL and EC serve as inputs for the calculation of the
Risk-Adjusted Return on Capital (RAROC). The use of RAROC is intended to subsidize important
decision-making processes at the Bank. Its tracking in the historical perspective for the portfolios analyzed
has allowed the assessment of risk and return to be present in the decisions of the Institution.
The Bank developed a credit risk concentration control method, analyzing the interrelation among the
various economic sectors that comprise the business loan portfolio. This model evaluates the
concentration with a basis on the credit risk of the borrowers -Herfindhal Index.
Besides the use of techniques for identification and quantification of concentration, BB monitors and
controls the concentration of credit risk in terms of risk/exposure as an important tool to subsidize
decisions regarding the definition of risk exposure limits.
BB has management tools of credit risk appraisal, with an emphasis on:
•
•
•
•
•
VaR and RAROC - utilized in the evaluation of the Business segment, in the view of sectors of the
economy, as a subsidy to the decision of definition of macrosectoral limits.
QIP - Quality Index of the Portfolio - qualitative and quantitative indicator of the portfolio. The default
concept follows the precepts defined by CMN Resolution 2,682/99.
Deliquency Rates of 15 and 90 days - correspond to the division of the balance overdue for more than
15 and 90 days, respectively, by the balance of the portfolio.
Budget of credit risk - corresponds to the projection of PCLD to form the annual budget of BB.
Credit risk management reports - systematic monitoring and projections for the loan portfolio from
different views.
Concentration
BB's amplified Loan Portfolio, formed by the portfolio of loans in the country and abroad, guarantees
granted and Private Securities, totaled R$ 240,607 million in March 2009. In this amount there are not
considered R$ 13,825 million of BNC, which if considered would result in a Credit Portfolio of R$ 254.432
million.
About BB amplified credit portfolio, 24.2% of the operations are concentrated in the 100 largest borrowers
against 23.9% in december 2008, according to the table below:
Table 100. Concentration of the Loan Portfolio on the 100 Largest Borrowers
Period
1st Customer
Jun/07
Set/07
Dez/07
Mar/08
Jun/08
Set/08
Dez/08
Mar/09
Period
Jun/07
Set/07
Dez/07
Mar/08
Jun/08
Set/08
Dez/08
Mar/09
1.4
1.5
1.5
2.3
2.3
2.3
2.4
2.6
Portfolio
2nd to 20th
Balance
2,099
2,257
2,467
4,185
4,658
4,811
5,576
6,203
Colateral
145,233
150,184
160,739
172,760
190,082
202,201
224,808
228,046
Balance
7.7
9.7
9.8
8.6
10.6
10.5
11.2
10.9
Securities
3,441
4,034
4,689
5,864
6,582
7,132
8,220
7,899
21st to 100th
11,531
15,103
16,299
15,539
21,222
22,505
26,644
26,184
100th largest
Balance
10.6
10.8
10.1
10.2
10.4
9.9
10.3
10.7
15,783
16,801
16,911
18,394
20,965
21,113
24,454
25,794
19.7
22.0
21.3
21.2
23.3
22.7
23.9
24.2
R$ million
Balance
29,413
34,161
35,677
38,118
46,844
48,429
56,675
58,180
Total
752
1,071
1,679
1,431
3,965
4,284
4,175
4,662
149,426
155,289
167,107
180,055
200,629
213,617
237,203
240,607
The ratio between the exposure of the largest borrower and the Referential Equity Amount ended
September 2008 in 13.0%, as per the table below:
th
Table 101. Concentration of the Loan Portfolio of the 100 Largest Borrowers in relation to RE
Period
Jun/07
Set/07
Dez/07
Mar/08
Jun/08
Set/08
Dez/08
Mar/09
1º Customer
Balance
6.7
7.0
7.1
11.5
13.8
13.4
12.6
13.0
2,099
2,257
2,467
4,185
4,658
4,811
5,576
6,203
2º to 20º
36.6
46.5
46.7
42.7
62.7
62.5
60.4
55.0
Balance
11,531
15,103
16,299
15,539
21,222
22,505
26,644
26,184
21º to 100º
50.1
51.7
48.5
50.6
61.9
58.7
55.4
54.1
Balance
15,783
16,801
16,911
18,394
20,965
21,113
24,454
25,794
100 largest
93.3
105.2
102.2
104.8
138.4
134.6
128.5
122.1
R$ million
Balance
29,413
34,161
35,677
38,118
46,844
48,429
56,675
58,180
The amplified business loan portfolio totaled R$ 144,086 million in March/2008. The greatest
concentration is in transactions contracted with companies from the Oil macro sector that corresponds to
10.3% of the amplified business portfolio, growth of 55.7% in the last 12 months. The distribution of the
Loan Portfolio Economic Macro Sectors is shown in the table below:
Table 102. Concentration of the Loan Portfolio by Macro-sector
R$ million
Change %
Macro-sector
Mar/08
Foodstuffs of Animal Origin
Foodstuffs of Vegetable Origin
Automotive
Beverages
Wholesale Trrade and Sundry Ind.
Retail Trade
Building
Leather and Shoes
Other Activities
Electrical and Eletronic Goods
Electricity
Agricultural Consumables
Timber and Furniture
Metalworking and Steel
Paper and Pulp
Oil
Chemicals
Services
Telecommunications
Textiles and Garments
Transport
Total
9,515
11,517
11,019
8,058
5,131
6,429
2,059
6,108
4,610
4,581
4,195
4,319
4,042
4,420
3,608
3,169
2,593
1,728
1,907
2,385
1,526
102,918
Internal Loan Portfolio
Abroad Loan Portfolio
Garantees
Securities
Total
85,123
10,499
5,864
1,431
102,918
Part.%
9.2
11.2
10.7
7.8
5.0
6.2
2.0
5.9
4.5
4.5
4.1
4.2
3.9
4.3
3.5
3.1
2.5
1.7
1.9
2.3
1.5
100.0
Dec/08
14,131
14,224
13,838
9,044
8,287
8,790
7,268
7,405
7,015
6,213
5,621
5,493
5,378
5,457
4,804
4,132
3,644
2,433
3,009
2,751
1,751
140,686
115,191
15,106
8,220
4,175
142,693
Part.%
10.0
10.1
9.8
6.4
5.9
6.2
5.2
5.3
5.0
4.4
4.0
3.9
3.8
3.9
3.4
2.9
2.6
1.7
2.1
2.0
1.2
100.0
Mar/09
14,815
14,045
13,691
11,372
8,695
8,396
7,578
7,382
7,344
6,613
5,647
5,450
5,408
5,315
4,646
4,052
3,401
3,018
2,790
2,763
1,663
144,086
116,719
14,806
7,899
4,662
144,086
Part.%
10.3
9.7
9.5
7.9
6.0
5.8
5.3
5.1
5.1
4.6
3.9
3.8
3.8
3.7
3.2
2.8
2.4
2.1
1.9
1.9
1.2
100.0
On
On
Mar/08 Dec/08
55.7
4.8
21.9
(1.3)
24.2
(1.1)
41.1
25.7
69.5
4.9
30.6
(4.5)
268.1
4.3
20.9
(0.3)
59.3
4.7
44.4
6.4
34.6
0.4
26.2
(0.8)
33.8
0.6
20.3
(2.6)
28.7
(3.3)
27.9
(2.0)
31.2
(6.7)
74.7
24.1
46.4
(7.3)
15.9
0.5
9.0
(5.0)
40.0
2.4
8.1.4 Operating Risk
Introduction
With the purpose of regulating Basel II in Brazil, the Brazilian Central Bank has been issuing several
regulations. We emphasize CMN Resolution 3,380, which alludes to the implementation of a structure for
operational risk management. The operational risk management structure at the Bank is comprised of the
Risk Management and Internal Control Directorates and by the Security Management Unit.
It also established a schedule for implementation of Basel II, pursuant to Release 16,137, which provides
for the use of advanced models as of 2013. The Bank has been developing actions aiming at the adoption
of internal models for operational risk that allows more in-depth management and satisfies the
requirements established by the Regulator.
In the first quarter of 2009, the Board of Directors approved the review of policies associated with
operational risk and the Annual Operational Risk Management Report, prepared according to
requirements contained in CMN Resolution 3,380.
Information about the Management Structure and Operating Risk Management Process can be found in
more detail on BB's Internet page.
Key Risk Indicators (KRI's)
KRI’s is a tool that supports operational risk management. It is comprised of one or more combined and
interrelated variables that are (is) an integral part of an operating process, with behavior expected
according to predefined rules, and whose variation indicates greater or lesser exposure to the operational
risk.
At BB they are used with the objective of identifying weak points associated with the critical operating
processes; adjustment of capital allocated to operational risk; and to assist in the proposition of operating
loss mitigation actions.
Operating Loss Exposure Limits
In order to ensure an effective management of operating risks, Banco do Brasil employs operating loss
exposure limits, which are intended to establish the limits acceptable to the Bank for operating losses,
which are remitted for examination every month by the Operating Risk Sub-Committee and Global Risk
Committee (GRC).
In this respect, the BB created the Operating Loss Global Limit in order to allow operating loss
management based on statistically pre-established tolerance levels, and to allow the detection of
weaknesses associated with processes likely to cause significant losses.
The following table present the progress of BB's operating losses, according to loss event classes and in
percentages.
Table 103. Monitoring of Operational Loss
Loss Event Category
Labor Issues
External Fraud and Theft
Process Failures
Business Failures
Physical Assets Damage
Internal Frauds
System Failures
1Q08
41.9%
17.3%
14.1%
21.4%
5.2%
0.1%
0.1%
2Q08
44.4%
16.5%
18.4%
15.6%
5.0%
0.1%
0.0%
3Q08
46.2%
11.7%
11.6%
24.3%
3.5%
2.6%
0.1%
4Q08
40.4%
11.0%
11.6%
32.2%
3.4%
1.4%
0.0%
1Q09
41.9%
18.2%
19.8%
14.5%
4.6%
0.9%
0.0%
The Bank also defines specific limits in order to reduce the level of exposure and to guarantee the
adoption of mitigation actions at a lower level of granularity.
We emphasize the limit for external premises and the limit for the self-service channels. The latter,
besides prioritizing loss reduction actions, allows us to evaluate the effectiveness of the technical security
tools implemented. The following channels have limits which are regularly defined and reviewed: TAA,
POS, Internet for Individuals, Withdrawals Abroad, CABB, Cellular, Lottery Ticket Sales Outlets, 24hr
4
Bank, TAA (CEF) and Financial Manager .
4
TAA: Automated Teller Machines; POS: Storeowner debit terminal; CABB: Call Center Banco do Brasil; Lottery Ticket Sales
Outlets: withdrawals performed at lottery ticket sales outlets; TAA (CEF): Terminals of CEF shared with BB.
8.2 Capital Structure
8.2.1 Shareholders’ Equity
Banco do Brasil ended the first quarter with R$ 30,859 million in shareholders’ equity, an amount 21.5%
higher than in the same period of the previous year and 3.1% higher in relation to December 2008. The
growth of shareholders' equity in the last 12 months was due to the incorporation of the Results.
Table 104. Shareholders’ Equity
Jun/07
Capital
Reserves
MTM – Securities and Derivatives
(Shares in Treasury)
Retained earnings (accumulated losses)
P&L Accounts
22,305
12,711
9,152
443
-
Sep/07
23,065
12,711
8,939
384
1,031
Dec/07
24,262
13,212
10,701
350
-
Mar/08
25,407
13,212
10,131
85
1
1,978
Jun/08
26,371
13,212
13,101
58
-
Sep/08
27,889
13,699
12,762
(33)
0
1,461
Dec/08
29,937
13,780
15,990
199
(31)
-
R$ million
Mar/09
30,859
13,780
15,771
124
(31)
1,215
8.2.2 Regulatory Capital
The implementation of the rules of Basel II in Brazil, especially related to the capital requirement,
produced several modifications in the method of measuring capital to bear the risks inherent to banking
activities.
The implementation schedule of Basel II in Brazil was officialized by the Brazilian Central Bank - BACEN by
means of Communication 12,746, of 12.9.2004, subsequently adjusted by Communication 16,137, of
9.27.2007. This agenda was built in phases, initially establishing, as regards capital requirement, the use
of a standardized approach (defined by Bacen), and at the end, the use of advanced models.
To regulate the transition from Basel I to Basel II (standardized approach), BACEN published several rules
about capital requirement (Pillar I), process of supervision and transparency of information (Pillars II and
III).
Referential Equity Amount (RE)
On 2.28.07, CMN approved alterations in the rules for definition of the RE (Referential Equity Amount) of
financial institutions by means of Resolution 3,444, revoking CMN Resolution 2,837, of 5.30.2001. On the
same date, BACEN published Circular 3,343/2007, which refers to the procedures to be adopted in the
request for categorization of borrowing instruments at Tier I and Tier II of RE.
5
6
The RE is formed by the sum of the Tier I and Tier II portions, being deducted the asset balances
represented by the following funding instruments issued by the financial institution: stock, hybrid capital
and debt instruments, subordinated debt instruments and other financial instruments described in Bacen
Resolution no. 3.444/07, art. 12 and art. 13, § 3.
According to CMN Resolution no. 3.444/07, for purposes of PR composition, the value of preferred shares
issued with a redemption clause having an original term of less than tem years, increased by the value of
subordinated debt instruments (DS), is limited to 50% of PR Tier I (art. 14, clause III). On the other hand,
the amount of hybrid capital and debt instruments (IHCD) is limited to the PR Tier I value, being deducted
the existing DS amount and its remaining issue margin (art. 14, clause I). In Mar/09, the IHCD margin
available to compose PR was of R$ 15.2 billion, whereas for issue of DS the same was of R$ 2.1 billion.
Required Referential Equity Amount (RRE)
CMN Resolution 3,490, of 8.29.2007, established the Required Referential Equity Amount (RRE) concept
to substitute the Required Shareholders' Equity (RSE) concept, revoking exhibit IV of CMN Resolution
2,099/1994, and other rules concerning the topic. The RRE was henceforth comprised of the following six
portions:
RRE = PEPR + PCAM + PJUR + PCOM + PACS + POPR
Where:
PEPR - portion referring to the exposures weighted by the FPR assigned thereto;
PCAM - portion referring to the risk of exposures in gold, in foreign currency and in operations subject to
exchange variance;
PJUR - portion referring to the risk of operations subject to the variation of interest rates and classified in
the trading book, as provided for by Resolution 3,464, of 6.27.2007, where n = number of the different
portions relating to the risk of operations subject to the variation of interest rates and classified in the
trading book;
PCOM - portion referring to the risk of operations subject to the variation of the price of commodities;
5
Tier I = it is determined by the sum of the values corresponding to the net equity, to the credit income accounts balances and to a blocked account
deposit to cure capital deficiency, excluded the items mentioned in Bacen Resolution 3.444/07, art. 1, § 1, clause I to VI.
Tier II = it comprises the sum of the values corresponding to revaluation reserves, contingency reserves and special profit reserves related to nondistributed statutory dividends, increased by values corresponding to hybrid capital and debt instruments, subordinated debt instruments and other
items described in Bacen Resolution 3.444/07, art. 1, § 2, clauses I and II.
6
PACS - portion referring to the risk of operations subject to the variation of the price of shares and
classified in the trading book, as provided for in Resolution 3,464, of 6.27.2007;
POPR - portion referring to the operational risk.
The reviews in the Referential Equity Amount (RE) were incorporated by BB last July. As regards the
Required Referential Shareholders' Equity (RRE), the rule started to be required as of 7.1.2008. The
following information are according the actual legislation.
Performance
Banco do Brasil ended the first quarter of 2008 with a Referential Equity Amount 32.6% higher than that
observed in March 2008 and 9.8% higher than December 2008, reaching R$ 47,644 million.
Table 105. BIS Ratio – Financial Conglomerate
Referential Equity Amount – RE
Level I
Capital
Capital Increase
Capital reserves
Revenue reserves
Reavaluation reserves
Mark-to-Market – Securit. And Derivatives
Treasury stock
Accumulated Earnings or Losses
Income accounts
Tax Credit excl. RE's Tier I – Res.3059
Deferred Assets
Mark-to-market
Additional Provision
Tier II
Subordinated debt
Hybrid Capital and Debt Instruments
Inst of Cap. Issued by IF with FPR of 100%
Revaluation reserves
Mark-to-market
Financial Instruments Excluded from RE
RSE/RRE
Credit Risk (1)
APR Requirement
Swap Requirement
Market risk (2)
FX Exposure Requirement
Interest Rate Exposure Requirement
Operating Risk (3)
J) Surplus/(insufficiency) of RE
R$ million
Jun/07 Sep/07 Dec/07 Mar/08(4) Jun/08 Sep/08 Dec/08 Mar/09
31,534
32,469
34,900
35,934
33,230
35,271
43,391
47,644
21,007
21,732
23,951
25,022
22,454
23,954
31,201
32,915
12,711
12,711
12,711
13,212
13,212
13,699
13,780
13,780
501
1
1
0
0
0
0
9,145
8,933
10,695
10,131
13,101
12,762
15,990
15,771
(6)
(6)
(7)
(7)
(15)
443
384
350
85
58
(33)
199
124
(31)
(31)
(0)
834
1,031
1,978
1,461
1,215
(1,199) (1,199)
(18)
(22) (3,743) (3,702)
(22)
(22)
(70)
(113)
(200)
(253)
(303)
(352)
(513)
(562)
(23)
(14)
(88)
(104)
134
126
(29)
(97)
1,835
1,918
10,527
10,737
10,949
10,913
10,776
11,317
12,190
14,729
9,540
9,813
9,986
10,385
10,745
11,209
11,729
14,342
958
915
881
870
780
938
1,145
1,134
(11)
(11)
6
6
6
6
6
7
7
15
23
14
88
104
(134)
(126)
29
97
(452)
(620)
(711)
(720)
(859)
21,858
22,698
24,605
26,925
29,235
29,813
31,500
34,879
21,323
21,851
23,821
26,178
28,346
29,310
30,980
33,554
20,997
21,494
23,457
326
357
365
535
847
783
747
889
102
119
170
535
847
783
401
401
1,155
9,676
9,771
10,295
9,738
4,753
5,458
11,891
12,765
K Coefficient %
15.9
15.7
15.6
14.7
12.5
13.0
15.2
15.0
(1) Referring to the PEPR portion pursuant to circular 3,360 of 9/12/2007. Until June/08 this item was comprised of the portions of APR Requirement
and Swap Requirement.
(2) Referring to the PCAM, PJUR, PCOM and PACS portions, Circulars 3,361 to 3,364/2007, 3,366/2007, 3,368/2007 and 3,389/2008. Until June/08 this
item was formed by the Exchange Exposure Requirement and Interest Rate Exposure Requirement portions.
(3) Referring to the POPR portion, pursuant to circular 3,383, of 4/30/2008.
(4) From Mar/08 the series considers the Economic Consolidated information.
BB's RRE reached the sum of R$ 34.9 billion in March, up 10.7% over December 2008. The main part of
the requirement was caused by the credit risk portion, which reflects the growth of loans. The following
table shows the main accounts that formed the Referential Equity Amount in the third and forth quarters of
2008, considering the economic financial conglomerate.
Table 106. Main accounts of the PEPR quota (Economic Financial Conglomerate)
Loan Operations
Other rights (gold, FGPC advances, other advances
Tax Credits
Short-term interbank deposits
Advances granted by the institution
Other
TOTAL
R$ million
Dec/08 Mar/09 Chg. %
17,529
18,151
3.5
4,993
4,780
6.4
2,957
3,342
13.0
1,575
1,876
19.1
1,207
1,286
6.5
3,219
4,119
28.0
30,980
33,554
8.3
For the operational risk, BB has opted for the utilization of the Alternate Standardized Approach, which
requires 50% of the value determined, R$ 1,155 million (basis December/08), according to Circular no.
3.383. Such percentage will rise to 80% in July/2009 and will reach 100% as of Jan/2010. The allocated
capital percentage, by line of business, corresponds to:
Table 107. Allocated capital for operational risk by line of business
Business Line
Asset Management
Commercial
Retail
Corporative Finance
Trading and Sales
Payments and Settlements
Financial Agent Services
Retail Brokerage
TOTAL
Amount (R$ million)
40
338
150
158
262
177
28
2
1,155
With respect to market risk, we present in the following table the Required Reference Equity in March
2009, by risk factor.
Table 108. PRE for Market Risk by Risk Factor
R$ million
Mar/09
128.9
20.9
20.2
170.0
Risk Factors
PRE Exchange
PRE Interest Rate
PRE Commodities
PRE Shares
PRE Market Risk
The K Coefficient exhibited stability related to the 4Q08, going to 15.0% in 1Q09. This ratio is higher than
the 11% required by the Central Bank and allows BB leverage of up to R$ 116,047 million in loan assets,
considering the 100% weighting. The figure below shows the ratio evolution since June/07.
15.9
15.7
15.6
14.7
12.5
13.0
4.1
4.2
8.8
5.3
5.2
4.9
4.5
10.6
10.5
10.7
10.2
8.4
Mar/08
Jun/08
Jun/07
Sep/07 Dec/07
Tier I
15.2
15.0
4.3
4.6
10.9
10.4
Sep/08 Dec/08
Mar/09
Tier II
Figure 65. BIS Ratio – Economic Financial Conglomerate
CMN Resolution 3,059/02 determined, as from 01.01.2004, an additional allocation of capital for the stock
of tax credits that exceed a 5 year comsumption period from the date of the balance sheet. According to
the instruction, 40% of the remaining balance will be deducted from Tier I capital in 2005, 60% in 2006,
and so on, until arrives at 100% in 2008.
In the last quarter of 2008, two groups of rules generated significant impacts in the Brazilian banking
industry. The first group is comprised by rules which have generated liquidity elevation in the system
whether in local currency or foreign currency. Circulars 3426 and 3427 are part of this group and deal with
the compulsory deposit reduction, as well as Resolutions 3622, 3624 and 3633, the object of which was to
generate more liquidity in U.S. dollars. The second group assembles rules allowing more leverage to the
banks for elevation of the Reference Equity (RE). Resolution 3655 and Circular 3425 are also part of the
group, and they have changed tax credit RE measurement and deduction criteria, as well as Resolution
3674, which have allowed exceeding credit provisions to be summed up to the RE.
Table 109. Changes in Composition of BIS Ratio
R$ million
Referential
Equity
Required
Referential
Equity
Effect in Basel
Ratio
Effect in
Leaverage
Net Income deducted of Interest on Own Capital
Increase of Subordinated Debt
Other Changes in Referential Shareholders’ Equity
Tax Credit excluding RE's Tier I – Res.3059
Increase of Market Risk Requirement
Increase of Credit Risk Requirement
Increase of Operational Risk Requirement
999
2,613
651
(11)
51
2,574
754
0.3
0.8
0.2
(0.0)
(0.0)
(1.1)
(0.3)
9,084
23,759
5,916
(97)
(462)
(23,397)
(6,854)
Changes in the quarter
4,253
3,378
(0.1)
7,949
43,379
47,631
31,500
34,879
15.1
15.0
107,986
115,935
4,253
3,378
(0.1)
7,949
Balance at Dec/08
Balance at Mar/09
Quarterly net variation
The main modifications in the required capital in 1Q09 decurred from the change of the Z multiplicator in
the operational risk, that resulted in a growth of 188.1% in the requirement capital of this risk, the growth
of credit operations without retail characteristics and the foreign exchange advances. Besides, the capital
allocation margin was impacted by the 100% weight over intangible assets, decurred from the payroll
loans acquisitions (about R$ 600.0 million in march,2009) and also by the consolidation of Banco Nossa
Caixa S.A. assets.
Future impacts in the BIS Ratio
The acquisition of interests in Banco Votorantim S.A. (BV) will have an impact on the Bank's Basil BIS
nd
Ratio from the 2 semester/09. The isolated effect of the acquisition of 50.0% in BV is estimated in -0.9
p.p.
Fixed Asset Ratio
In the last quarter, the Fixed Asset Ratio grew from 11.7% to 16.2%. With the current fixed asset level, BB
was able to increase its fixed assets by R$ 16.1 billion, without leading to be out of the maximum 50%
limit of the Referential Equity Amount.
Table 110. Fixed Asset Ratio
Jun/07
Shareholders' equity
Subordinated debts eligible as Capital
Other
Adjusted Referential Equity Amount (A)
Permanent Assets
Variable Income Securities
Stock Exchange and Cetip Clearing
Leased assets
Losses with Leasing to be Amortized
Deferred Assets (Resolution CMN 3,444)
Vested Rights Payroll up to 06/30/09 (Res.
3642 Bacen)
Total Fixed Assets (B)
Fixed Asset Ratio (B/A) - %
Margin (Surplus) - %
Sep/07
Dec/07
Mar/08
Jun/08
Sep/08
Dec/08
R$ million
Mar/09
22,305
23,065
24,262
25,407
26,371
27,889
29,937
30,859
9,540
9,813
9,986
10,385
10,745
11,209
11,729
14,342
958
915
881
870
780
938
1,145
1,134
(1,272)
(1,325)
(230)
(727)
(4,666)
(4,765)
580
1,308
31,531
32,467
34,899
35,934
33,230
35,270
43,391
47,643
5,903
5,912
6,304
6,284
7,042
8,217
13,606
19,421
-
-
-
-
39
38
28
26
(2)
(2)
(0)
(0)
(0)
(1)
(0)
(0)
(1,320)
(1,385)
(1,455)
(1,614)
(2,271)
(2,877)
(4,078)
(4,836)
(41)
(45)
(52)
(55)
(58)
(62)
(55)
(48)
(70)
(113)
(200)
(253)
(303)
(352)
(513)
(562)
-
-
-
-
-
-
(3,921)
(6,284)
4,468
4,367
4,597
4,362
4,449
4,964
5,067
7,716
14,2
13,4
13,2
12,1
13,4
14,1
11,7
16,2
11,298
11,867
12,853
13,605
12,166
12,671
16,628
16,105
8.2.3 Economic Capital
Banco do Brasil utilizes the concept of economic capital in its internal processes of risk management. The
tables below present the total capital requirement and the requirement by sector of the economy.
Table 111. Economic Capital
Economic Capital
Credit Risk Requirement
Internal Model
1Q08
4,080
Market Risk Requirement (1)
2Q08
3Q08
4Q08
1Q09
4,434
4,443
4,809
752
185
414
5,150
338
Operating Risk Requirement (2)
1,137
1,147
1,224
1,335
1,513
TOTAL
6,674
6,333
5,852
6,558
7,001
(1)Trading Book. As of 4Q08 contemplates Trading Book, foreign exchange and commodities.
(2)Calculated by means of parametric and non-parametric methodology (bookstrap).
We present below the economic capital requirement over the Credit Risk detailed by macro-sectors and
individuals/businesses.
Table 112. Distribution of Economic Capital in the Loan Portfolio
Mar/08
Part. %
Mar/09
R$ million
Part. %
INDIVIDUALS
2,758.58
67.6%
3,375.75
65.6%
COMPANIES
1,321.65
32.4%
1,774.10
34.4%
Agribusiness of Animal Origin
90.08
6.8%
138.47
7.8%
186.78
14.1%
203.03
11.4%
Automotive
73.75
5.6%
192.10
10.8%
Beverages
13.02
1.0%
12.26
0.7%
Wholesale Trade and Sundry Ind.
27.36
2.1%
57.29
3.2%
Retail Trade
70.37
5.3%
93.05
5.2%
Agribusiness of Vegetable Origin
Building
90.47
6.8%
97.87
5.5%
Leather and Shoes
23.71
1.8%
31.74
1.8%
Electrical and Eletronic Goods
47.55
3.6%
78.13
4.4%
Electricity
55.90
4.2%
30.69
1.7%
Agricultural Consumables
49.53
3.7%
40.61
2.3%
Timber and Furniture
41.80
3.2%
50.02
2.8%
Metalworking and Steel
59.01
4.5%
80.81
4.6%
Pulp and Paper
33.44
2.5%
69.34
3.9%
Oil
60.24
4.6%
71.15
4.0%
Chemicals
Services
41.21
3.1%
52.80
3.0%
178.01
13.5%
231.29
13.0%
Telecomunications
10.00
0.8%
13.29
0.7%
Textiles and Garments
70.71
5.4%
96.97
5.5%
Transport
48.56
3.7%
121.75
6.9%
Other Activities
50.15
3.8%
11.43
0.6%
TOTAL
4.080
100%
5.150
100%
Next, we present the economic capital requirement for operating risk, by operating loss event category:
Table 113. Distribution of Economic Capital in the Loan Portfolio
Loss Event Categories
Faults in Businesses
Damage to the Physical Property
Faults in Systems
Faults in Processes
External Fraud and Theft
Internal Fraud
Labor Issues
TOTAL
R$ million
649
54
2
116
30
49
613
1,513
Finally, we present the economic capital requirement for the market risk, by risk factor, considering, for
this quarter, BNC positions:
Table 114. VaR by Risk Factor
Risk Factors
Pre-Fixed Interest Rate
Foreign Currency Coupom
Price Index Coupon
Exchange Variation
Commodities
PRE Market Risk*
*Trading Book + Exchange Variation + Commodities
R$ million
Dec/08
100.8
8.3
1.7
225.8
1.4
338.0
9 – Social and Environmental Performance
Presentation
Continuing with the pioneer initiative of our earnings release of 4Q08, when we were the first Bank to
disclose on a quarterly basis highlights of our Socioenvironmental Performance - RSA, we maintained in
this quarter the historic series and the analyses that enable readers to understand how sustainability
permeates the strategy and the business management of Banco do Brasil.
The choice of the disclosure of this information with quarterly periodicity is based on the company's
commitment to the generation of social and environmental values and on the understanding that this data
is just as important to the company's performance as the economic/financial information, meriting
treatment similar to that already provided thereto. In addition, it seeks to respond to an ever growing mass
of shareholders who take into account social and socioenvironmental, and corporate governance aspects
in their investment decisions.
RSA practices selected to form a part of the Performance Analysis Report were picked out based on their
relevance to the Company's business, on the tangible return to shareholders, and on market research
with pension funds and specialists on the subject. The selection of which data justifies the quarterly
monitoring of its development (the other indicators are traditionally reported in the Annual Report) was
also used as a criterion in the structuring of this report. Like the rest of the report, this set of information is
constantly reviewed and monitored with a view to better adapting its reporting to the needs of analysts
and shareholders, target audience of this publication.
This chapter is divided into four major blocks, grouping the new RSA indicators and information that the
Bank had already been disclosing, per related topics: Relationships with Staff, Ecoefficiency, Business
with Socioenvironmental Emphasis and Recognition of the Investor Market.
9.1 Employee Relations
This block contains the main actions regarding business sustainability, in connection with investments in
people by Banco do Brasil. The information and indicators disclosed show not only training and the
respective investments, but also the creation of employee value.
9.1.1 Characteristics of Workforce
Banco do Brasil's relationship with its employees has a direct influence on the indicators of this block, as
well as on the turnover rate which will be presented further ahead. The company invests in the creation of
a bond with its collaborators, so that its professionals feel encouraged to build a career at the institution.
People that join the staff tend to spend most of their professional lives at the Bank, which contributes to
the low turnover and causes the stratification of the staff by age and length of service to evolve in a
relatively linear manner, without abrupt oscillations.
Like in the previous quarters, there were no major oscillations in the classification of the staff by age. The
bracket that includes employees over 45 years of age continues to exhibit growth: at the end of the
quarter, 26.9% of the employees were classified in this age bracket, as opposed to 26.4% in the previous
quarter and 25.0% in the same period of 2008. On the other hand, the relative participation of employees
up to 25 years of age has been exhibiting a reduction, dropping from 9.4% in 1Q08 to 8.9% in 4Q08 and
ending 1Q09 at 8.5% of the total headcount.
1Q08
4Q08
9.4%
1Q09
8.9%
25.0%
8.5%
26.4%
34.3%
33.7%
31.9%
26.9%
30.1%
30.4%
Up to 25 years
Figure 66. Employees Age
26 to 35 years
34.5%
36 to 45 years
Over 45 years
Stratification by length of service at the Bank also remained relatively stable in the period. Employees with
up to 5 years of work at the institution continue to represent 41% of the total, and the bracket including
employees with over 25 years of service maintains the pace of growth, having increased its relative
participation from 11% in 1Q08 to 14% in 4Q08 and 16% at the end of the last quarter. At the same time,
the participation of employees with length of service at the bank between 16 and 20 years presents a
significant reduction. This bracket ended the quarter at 2%, which represents a reduction of 3.0
percentage points in relation to the previous quarter and of 8.0 points in comparison with the previous
year.
1Q08
4Q08
1Q09
16%
14%
11%
41%
42%
13%
41%
15%
15%
5%
10%
2%
4%
4%
5%
19%
Up to 5 years
16 to 20 years
Figure 67. Aged Bracked
21%
6 to 10 years
21 to 25 years
22%
11 to 15 years
Over 25 years
9.1.2 Education and Professional Development
Banco do Brasil develops countless professional education and development actions. These actions
include onsite courses, the establishment of partnerships to provide distance learning solutions and the
concession of scholarships (academic and of languages), besides the incentive to studies by means of
the internal career planning system.
The academic scholarships (Graduation, Post graduation, MBA, Master's and Doctorate) and language
scholarships are among the main people development actions adopted by Banco do Brasil. Table below
displays the growth in the number of scholarships granted and their relation with the number of staff
members over the same period.
As of this quarter, we disclose the quantity of scholarships granted in the distance learning language
program. Started in 4Q08, the program currently benefits 3,957 employees, and contributes so that the
expressive percentage of 4.8% (involving distance learning and onsite scholarships) of the staff is
involved in the learning of other languages.
The decrease presented in the total quantity of graduation, post graduation, MBA, Master's and Doctorate
scholarships granted, in comparison with the same prior-year period, is explained because the first
classes of the distance learning MBA course made available by the Bank were formed between 2006 and
2007, with ample adhesion of the employees, which significantly increased the basis of comparison. In
addition, the Bank is already organizing the opening of new MBA classes in this category.
Table 115. Growth in the number of scholarships granted
1Q08
4Q08
1Q09
Undergraduate Scholarships
5,695
7,042
6,696
MBAs, Masters' and Doctors' Scholarships
2,179
2,535
624
Language Scholarships
Total Scholarships Granted
Number of employees in the period
258
289
225
8,132
9,866
7,545
86,386
83,417
86,059
Undergraduate Scholarships per Employee
6.8
8.2
7.5
MBAs, Masters' and Doctors' Scholarships per Employee
2.6
2.9
0.7
Language Scholarships per Employee
0.3
0.3
0.3
Total Scholarships per Employee
9.7
11.5
8.4
As a result of the investments and encouragement for obtaining degrees, the number of employees in
undergraduate, specialized, masters', or doctors' courses tends to increase at the rate of the previous
quarters. At the same time, the percentage of employees with high school education only is gradually
reduced.
4Q08
1Q08
0.6%
1Q09
0.5%
18.9%
0.5%
20.6%
22.1%
45.9%
32.1%
33.0%
34.6%
45.9%
45.3%
Elementary School
High School
Holders of Bacjelor’s Degree
Specialization, Master’s or Doctor’s Degree
Figure 68. Level of Education
In addition to the actions encouraging academic performance, Banco do Brasil has sought to provide
other training courses for employees. It is mainly more targeted internal and external training programs
that are made available, focused on the characteristics that each professional needs to perform his or her
duties at the Bank.
Table below displays the investments made and the number of training hours. As Banco do Brasil
generally targets a greater strategic focus at training programs in the second and fourth quarters, to
minimize the effect of seasonality, we present the quantity of hours accumulated in 12 months. The total
quantity of hours of training exhibited growth of 20.4 % in relation to 4Q08 and of 117.1 % in relation to
the same quarter of the previous year.
Table 116. Employee Training – Annual Flow
1Q08
4Q08
1Q09
4,071,303
7,343,603
8,840,320
81,158
84,782
86,311
50,17
86,62
102,42
Employees with Anbid Certification – CPA 10
30,231
30,910
30,785
Employees with Anbid Certification – CPA 20
5,274
7,050
7,170
35,505
37,960
37,955
42.6
44.1
42.4
Hours of Training
Total employees
Hours of training by employees
Total
Employees with certification / Total (%)
* Number of employees does not add BESC and BEP interns and recent contracted employees.
** Index calculated with 12 months accumulated information
We also emphasize the obtainment of Legal Certification in Financial Investments. Banco do Brasil is the
institution with the highest quantity of employees certified by Anbid/Andima. At present the percentage of
42.4% of the staff is already certified by one of these associations.
9.1.3 Value Added to Employess
Personnel Expenses in their diverse aspects comprise an important index of value added by the Bank to
staff members. The table below shows the progress of these expenses in absolute terms and in average
sums per employee.
Personnel expenses exhibited a reduction in relation to 4Q08, both in absolute terms, and in weighing
with the quantity of employees. This reduction is seasonal and is explained because in 1Q09 part of the
expenditures are already provisioned, which influences the reduction of the expense. In relation to 1Q08,
the growth of the expense is justified by the average salary raise of 8.9% granted as of the second half of
2008, besides growth in the average headcount. Finally, it is worth informing that the incorporation of the
BESC system and of BEP contributed toward the headcount increase of 3,148 employees.
Table 117. Quarterly Average Expense per Employee (Statement with Reallocations)
Personnel expenses (reallocated) – R$
1Q08
4Q08
1Q09
1,800,960,830.42
2,301,368,747.81
2,129,461,511.72
83,417
86,059
89,534
21,589.85
26,741.76
23,783.83
Quarterly Average Expense per Employee – R$
* Headcount does not include trainees. The employees of BESC and BEP were only included in the table as of 1Q09.
As a manner of providing improved financial returns to staff members and at the same time confirming the
commitment by everybody in the organization with the generation of consistent profits, Banco do Brasil
has made efforts to constantly enhance its Profit Sharing program - PLR. During 1Q09 the average sum
provisioned for paying out to each employee exhibited a reduction of 42.6% as compared to the same
period in the preceding year. This behavior is explained by the reduction of recurring income (better
detailed in the "Analysis of Results" chapter) and, partly, because in 1Q08 the net income was increased
R$ 789 million by extraordinary items, while in 1Q09 these items contributed positively with only R$ 309
million to net income. The increase of employees that formed the staff of the incorporated banks also
influenced the oscillation.
Table 118. Expenses with Statutory Porfit Sharing
PLR provisioned in the quarter – R$
1Q08
4Q08
1Q09
300,919,431,02
380,482,163,79
227,092,900,87
83,417
86,059
89,534
Average PLR per Employee – R$
3,607,41
4,421,18
2,536,39
9.1.4 Rotation of Staff Members
As evidenced in the table below, the turnover rates of the staff of Banco do Brasil presents oscillations
throughout the year, but remain below one percent of the total staff, and at a level close to that verified in
the same prior-year quarter.
Table 119. Employee Rotation
Rate of Employee Rotation ¹
1Q08
4Q08
1Q09
0.84
0.77
0.84
Nr. Employees in Previous Quarter
81,855
85,392
86,059
Nr. Employees in the Quarter ³
83,417
86,059
89,534
698
658
736
Releases in the Period ²
¹ Proportion of releases as compared to the average number of employees in the period
² The concept of releases includes firing, retirement, early retirement, perishing and self-request release.
³ Number of employees does not include BESC and BEP interns and early contracted employees.
9.2 Eco-efficiency
The disclosure of information on Eco-efficiency demonstrates the efforts by the Company in the efficient
use of resources, with reflexes not only in reducing the impact on the environment, but also on the control
of administrative expenses and on mitigating risks.
To structure the indicators, we sought to relate the items that are being evidenced, such as: the use of
water and paper with denominators that explain the fluctuation. For example, the use of water in Banco do
Brasil's main buildings is intended chiefly to meet the needs of its staff members, and hence we relate its
use to the average amount of employees per period. Under the same reasoning, the use of paper relates
to the banking account basis.
9.2.1 Annual Use of Water in the Main Buildings
It should be explained first that the ratio below refers to the use of water in Banco do Brasil's main
buildings. We will then also disclose its use in the other facilities. Main buildings I, II, and III located in
Brasilia concentrate a major part of Banco do Brasil's executive officers, in addition to support bodies. In
late 1Q09, there were 5,492 employees allocated in these buildings. The increase in the quantity of
employees that work in the main office buildings results from the fact that a renovation is in the final
stages in Edifício Sede II, which will gradually re-house teams of Executive Committees and Strategic
Units, heretofore reallocated to other sites.
The table below provides a breakdown of the use of water in absolute terms and the average use for the
number of employees working in those buildings. In the last two years there were no heavy investments in
renovations of relevant hydraulic systems or replacement of faucets, and the more rational consumption
of water was achieved by means of closer management with the administration of the buildings to avoid
waste. The consumption per employee exhibited slight growth in comparison with the previous quarter,
3
but expressive reduction, of 2.5 m per employee, in comparison with the same prior-year period.
Table 120. Use of Water
Use of Water in the Main Building (m³)
Employees in Main Buildings I, II, and III (average)
3
Use of Water (m ) / Employees*
* Indicator calculated based on data accrued over 12 months
1Q08
4Q08
1Q09
124,056
119,290
127,268
4,692
5,149
5,321
26.4
23.2
23.9
9.2.2 White Paper – Annual Use
Banco do Brasil has also put in place a number of steps to reduce the use of paper. Corporate systems
were adapted to print preferably on both sides, there were employee awareness campaigns, and
customers are encouraged more and more to employ automated channels not involving the use o paper.
Consumption, in absolute terms, exhibited reduction of 2.0% in relation to 1Q08 and of 0.1% in relation to
the previous quarter. As this decline in use took place in a scenario of an increasing number of banking
accounts, use per customer dropped by 10.9% in relation to 1Q08. It is worth informing that to avoid the
influence of seasonality the indicator is accumulated in 12 months.
Table 121. Use of Paper
1Q08
Use of Paper (tons)
Customers (average)
Use per customer (gr)*
* Indicator calculated based on data accrued over 12 months
4Q08
1Q09
3,477
3,412
3,409
27,049,728
28,941,053
29,468,916
128.5
117.9
115.7
9.2.3 Automated Transactions without Use of Paper
As informed in the preceding item, Banco do Brasil has invested in new channels for processing
transactions and for doing business with its customers. There is growing trend to employ channels that do
not involve printing and, therefore, do not consume paper. Among such channels, we may point out the
Internet, Customer Assistance, and Mobile Banking.
As we can observe in the graph below, the participation of these channels in the total quantity of
transactions processed by the Bank reached the highest level in its history. These transactions
represented 40% of the total in the quarter, higher than the 38.6% in the 4Q08 and 37.8% in the 1Q08.
39.8%
35.2%
2Q07
35.3%
35.0%
3Q07
4Q07
37.8%
38.3%
1Q08
2Q08
Figure 69. Transactions without use of paper
40.0%
38.6%
3Q08
4Q08
1Q09
9.2.4 Use of Toner
The use of toner is another potential creator of residues related to printing documents. Even when using
100% of reconditioned cartridges, Banco do Brasil has concentrated efforts to reduce the use of this kind
of material.
As can be observed by analyzing the figure below, even considering the expansion of the Bank's
customer base and of its business, the consumption of toner units ended 1Q09 at the lowest level since
2Q07, with a reduction of 3.4% in comparison with the previous quarter.
24,052
22,423
22,496
20,141
23,096
22,822
21,653
22,398
2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09
Figure 70. Toner consumption – in units
9.3 Social Environmental focused Business
The performance of deals that support the sustainable development of the country, whether through
business approaches or the development of products and services with RSA characteristics, occupies a
prominent position among the various fronts adopted by Banco do Brasil to make its business more
sustainable, in order to generate increasingly consistent returns to the shareholders, without losing sight
of the interest of the other stakeholders, contributing to improve the quality of life of society and toward
environmental preservation.
9.3.1 Sustainable Regional Development – DRS
DRS, or Sustainable Regional Development, is a Business Strategy by Banco do Brasil that seeks to drive
sustainable development of Brazil's regions where the Bank is present, by mobilizing the agents of
economic, social, and political activities in order to support productive activities that are economically
feasible, socially fair, and environmentally correct.
In order to implement DRS, Banco do Brasil's traditional credit facilities are extended, such as microcredit
loans, onlending (such as Proger), or other facilities with unrestricted funds intended for individuals. DRS
generates results for the Bank both from the social and from the economic point of view: it provides the
opening of new checking accounts and the expansion of the loan portfolio, besides permitting the loyalty
enhancement of a customer base that tends to have growing business potential, as the benefited
communities develop.
The volumes of deals performed and of scheduled loans presented substantial growth in relation to the
same prior-year period, respectively of 258.1% and 63.4%. The fall in some indicators in the quarterly
comparison is due to a revision carried out in the base, to guarantee that the focus of the Bank should
remain in business with elevated potential of effectiveness, so that the DRS negotial strategy brings the
expected results not only for the Bank, but also for all his intervenient, in special the wrapped
communities.
Table 122. Sustainable Regional Development (DRS)
1Q08
4Q08
1Q09
DRS - Transaction concluded (R$ millions)
1,300
4,676
4,655
DRS - Programmed loans (R$ millions)
3,328
5,466
5,439
Business Plans under implementation
DRS - Families Assisted
Banking accounts opened in DRS assisted communities (*)
(*) Accrued Position Monitoring begun as of 2008.
3,117
4,679
4,668
751,033
1,211,368
1,209,608
0
114,760
126,991
9.3.2 Microcredit
Microcredit consists in low volume loan transactions, normally aimed at low-income groups that do not
have access to conventional credit facilities. Law 10,735/03 regulates the concession of loans to the low
income population and refers to the allocation of funds corresponding to 2% of the demand deposits
obtained by the financial institutions for microcredit operations, at a rate of up to 2% per month.
Banco do Brasil is one of the country's key market agents in micro-finance. Admission in this segment
initially occurred by means of a wholly-owned subsidiary, Banco Popular do Brasil (BPB). However, the
Low Income Directorate was created in 2008 to perfect the business model. The distribution channels of
the lines of credit are the chain of branches of Banco do Brasil and the network of banking
correspondents (of BB itself and those previously related to Banco Popular do Brasil).
The portfolio of microcredit operations ended 1Q09 with R$ 548 million, a 7.2% development over the
preceding quarter, and a reduction of 0.7% as compared to the same period in 2008. The minor downslide
in the annual comparison, and the recovery in the quarter are explained because the model of activity in
this market is being reformulated, to optimize the methodologies of concession and management of loans
and to permit greater growth of the portfolio.
Table 123. Microcredit operations
Microcredit - Portfolio (R$ thousands)
Specific Productive Microcredit - Portfolio (R$ thousands)
Loans in the Period - (R$ thousands)
Number of Agreements in Portfolio
1Q08
4Q08
1Q09
551,716
511,022
548,062
437
924
1,328
161,146
141,944
173,241
1,428,929
1,237,159
1,210,861
Among microcredit transactions, Banco do Brasil is directing its efforts to Specific Productive Microcredit.
Under this program, customers are assisted by means of partnerships with Micro-finance Institutions
(IMF) with expertise in credit analysis for micro-entrepreneurs, and that have the support of credit agents
to analyze, apply, monitor, and provide guidance to small businesses. Although the portfolio balance is
not yet significant, it recorded growth of 203.9% in relation to the balance of 1Q08.
9.3.3 Family-run Agriculture – PRONAF
Banco do Brasil is the country's largest lender to Family-run Agriculture. Besides performing the social
role of supporting small producers and the generation of income in the rural zone, PRONAF enables the
Bank to prospect new clients, generate new income and seek new business based on the increase in the
loyalty of these clients.
The PRONAF portfolio ended 1Q09 at R$ 15,545 million, reflecting a 16.5% growth as compared to the
same period in the previous year. A comparison with the previous quarter, despite the 3.0% increase, is
adversely affected by the seasonal effects inherent to the extension of loans to agribusiness.
R$ million
12,036
11,903
2Q07
3Q07
12,890
13,348
4Q07
1Q08
Figure 71. PRONAF Portfolio / Proger Rural
14,233
13,955
2Q08
3Q08
15,088
15,545
4Q08
1Q09
9.3.4 Credit with RSA – Other Programs
In addition to the programs already described, Banco do Brasil supports the organic foodstuffs activity (BB
Produção Orgânica) and forest production (BB Florestal). The table below shows the progress of the
balances regarding these programs. Both BB Florestal and BB Produção Orgânica experienced growth in
the annual and quarterly comparisons. The BB Florestal portfolio was outstanding with its total of R$ 430
million in 1Q09, a 61% increase in 12 months and 6.1% in the quarter.
Table 124. Credit with RSA - Other Programs
BB Florestal
BB Produção Orgânica
TOTAL
1Q08
267.3
5.3
272.6
4Q08
405.3
8.0
413.3
R$ million
1Q09
430.2
13.2
443.4
In the concession of loans to companies there is compliance with the criteria and rules defined by the
Bank and by the financial authorities, as well as the fulfillment of social and environmental requirements
such as those contained in the Equator Principles and in the Global Pact, rules to which the Bank
voluntarily adhered. BB also verifies whether the loan proponents are included in the list of the
Department of Labor and Employment which identifies companies that submit their employees to
degrading forms of labor or slave labor.
To this effect, in 2008, BB analyzed 05 projects in light of the Equator Principles (projects above US$ 10
million), in the sum of R$ 429.3 million. In 2009, until the end of the quarter, BB analysed a project, for an
amount of R$ 1,780 million. Financed projects, which are of the infrastructure and electric energy sectors,
take into account the risk of socioenvironmental impact (high, medium or low).
9.3.5 Other Business with Social Environmental Attributes
Banco do Brasil offers its customers two alternatives of investment funds that adopt RSA criteria. The
portfolio of BB Ações ISE is comprised of companies that form the theoretical portfolio of the Business
Sustainability Index - ISE. On the other hand, BB DI Social 200 donates 50% of its management fee to the
Fome Zero program.
These alternatives are intended to satisfy an increasing number of investors that employ social and
environmental criteria to define their investment portfolio. The table below provides a breakdown of the
progress of the assets under management in these two mutual funds.
The drop in the portfolio of BB Ações ISE, in comparison with 1Q08, is mainly due to the depreciation of
approximately 40% in the period, on account of the effect of the international financial crisis on the
quotation of assets.
Table 125. Investment funds with SER criteria
1Q08
4Q08
1Q09
BB Ações ISE – R$ million
30.6
17.6
15.9
BB DI Social 200 – R$ million
41.6
34.9
34.8
9.3.6 Long-term Relationship – Quality in Customer Assistence
Quality in customer assistance is directly related to the company's abilities in customer retention, fidelity,
and profitability. The table below shows the share of complaints made by Banco do Brasil customers at
the Central Bank, as compared to total complaints in the Financial System. These data refer to banks with
over one million customers in their portfolios.
In March 2009, 8 institutions took part in this evaluation, whereas BB did not appear in the ranking of
Bacen formed by the 5 banks with the highest quantity of claims. BB's share in total complaints, and the
index that weighs the total quantity of complaints in relation to the customer base, have continued to
exhibit a significant reduction over the last few quarters.
Table 126. Complaints registered in the Central Bank
4Q07
1Q08
2Q08
3Q08
4Q08
1Q09
Complaints of BB registered at Bacen
1,092
1,026
1,321
1,239
724
498
Total complaints registered at Bacen
9,975
5,974
8,383
9,529
8,173
7,829
42,776,012
44,553,360
46,196,744
46,459,826
46,989,475
47,159,103
2.6
2.3
2.9
2.7
1.5
1.1
10.95%
17.17%
15.76%
13.00%
8.86%
6.36%
Customer Base *
Complaints / Customer Base **
Complaints BB / Total Bacen
* Total customer base less BESC
** ((Number of complaints) / (number of customers)) x 100,000
9.4 Investor Market Recognition
Besides having a representative share in the Ibovespa, BB participates in the following indices in the São
Paulo Stock Exchange: Differentiated Tag Along Share Index - ITAG; Differentiated Corporate
Governance Share Index - IGC; and Corporate Sustainability Index - ISE.
The objective of ITAG is to measure the performance of instruments of companies that offer better terms
to minority shareholders, in the event of sale of control. The portfolio is composed of shares that grant tag
along rights in excess of 80% to minority common shareholders. The Bank, as a participant of the New
Market (NM) of BOVESPA, highest degree of Corporate Governance level of the exchange, grants 100%
of tag along to minority shareholders.
IGC's purpose is to measure the behavior of shares of companies with good levels of corporate
governance and those listed in the Novo Mercado or in corporate governance levels 1 and 2 in
BM&FBOVESPA.
And the ISE reflects the performance of the shares of companies with recognized commitment to social
responsibility and to corporate sustainability. It is emphasized that BB has been part of this important
indicator since its creation, in 2005.
The graph below illustrates BB's percentage share in these indicators.
3.7
3.2
3.8
3.5
3.1
3.1
3.4 3.3
3.2 3.1
2.2
1.3
1
2
ISE
3
ITAG
IGC
To ITAG/IGC: 1 – Jan to Apr/08; 2 – May to Aug/08; 3 – Sep to Dec/08; 4 – Jan to Apr/09
To ISE: 1 – Dec05 to Nov06; 2 – Dec06 to Nov07; 3 – Dec07 to Nov08; 4 – Dec08 to Nov09
Source: Bovespa
Figure 72. BBAS3 participation in ISE, ITAG and IGC
4
10 – Strategic Investments
10.1 Information
Since 1Q08, the non-financial companies of the insurance, pension plan and capitalization segment and
other activities start to comprise the consolidated statements of Banco do Brasil.
Table 127. Interest in the capital of companies
R$ thousand
Financial Activity - Country
BB Gestão de Recursos - Distrib de Tít. e Val. Mobiliários S.A.
Share
Book Value
Book Value
Equivalence
Results
Activity
09.31.08
03.31.2009
03.31.2008
03.31.2009
Asset Management
100%
211,409
228,779
84,823
BB Banco de Investimento S.A.
Investiment Bank
100%
2,091,235
2,383,575
266,684
BB Banco Popular do Brasil S.A.
Banking
100%
23,892
19,490
1,055
BB Leasing S.A. - Arrendamento Mercantil
Leasing
100%
40,552
73,754
(2,737)
BESC Distribuidora de Títulos e Valores Mobiliários S.A.
Asset Management
99,62%
7,948
-
45
BESC Financeira S.A. - Crédito, Financiamento e Investimentos
Credit and Financing
99,58%
18,758
-
43
Leasing
99%
19,493
-
150
Multiple Bank
71,25%
2,056,704
-
-
Banco do Brasil – Ag. Viena
Banking
100%
262,906
94,771
(4,458)
Leasing
100%
97,766
70,996
(237)
BB Securities LLc.
Asset Management
100%
2,196
4,097
(894)
BB Securities Ltd.
Asset Management
100%
49,714
35,775
1,597
Brasilian American Merchant Bank – BAMB
Banking
100%
789,063
575,672
4,158
BB USA Holding Company, Inc
Holding
100%
2,834
2,116
(3)
Brasilveículos Companhia de Seguros
Insurance Company
70,00%
389,283
217,341
6,654
Cia. de Seguros Aliança do Brasil
Insurance Company
100%
201,999
220,160
58,906
BESC Leasing S.A. – Arrendamento Mercantil
Banco Nossa Caixa S.A.
Ramo Financeiro – Exterior
Ramo Segurador, de Previdência e de Capitalização
Brasilcap Capitalizações S.A.
Brasilprev Seguros e Previdência S.A.
Brasilsaúde Companhia de Seguros
Seguradora Brasileira de Crédito à Exportação – SBCE
Nossa Caixa Capitalização S.A.
Capitalization
49,99%
81,429
81,068
19,667
Insur. Company / Pension
49,99%
200,030
175,604
24,489
Insur. Company / Health
49,92%
25,083
24,832
(181)
Insurance Company
12,09%
2,256
2,151
5
Capitalization
71,25%
3,834
-
-
7,229
Outras Atividades
Ativos S.A.
Credit Acquisition
100%
54,249
31,947
Nossa Caixa S.A. - Administradora de Cartões de Crédito
Service Rendering
71,25%
7,438
-
-
BB Administradora de Cartões de Crédito S.A.
Service Rendering
100%
23,752
26,577
2,345
Consortiums
100%
26,745
25,907
9,825
Broker
100%
56,032
51,088
22,499
Tourism
100%
738
-
244
IT
99,39%
-
-
(3,420)
Cia. Brasileira de Soluções e Serviços CBSS – Visavale
Service Rendering
40,35%
48,197
39,072
1,293
Cia. Brasileira de Meios de Pagamento CBMP – Visanet
Service Rendering
31,63%
155,696
403,035
105,387
Kepler Weber S.A.
Industry
17,67%
28,880
30,549
-99
Neoenergia S.A.
Energy
11,99%
994,422
889,121
24,813
Companhia Brasileira de Securitização – Cibrasec
Credit Acquisition
9,09%
7,004
6,594
558
Tecnologia Bancária S.A. – Tecban
Service Rendering
8,96%
13,974
13,395
95
BB Money Transfers, Inc
Service Rendering
100%
2,836
2,116
(1)
BB Administradora de Consórcios S.A.
BB Corretora de Seguros e Administradora de Bens S.A.
BB Tur Viagens e Turismo Ltda.
Cobra Tecnologia S.A.
10.2 Insurance, Pension Plans and Capitalization
Banco do Brasil, through BB Banco de Investimentos, a wholly-owned subsidiary, maintains interest in
companies in the areas of insurance, pension plans and capitalization, which enables it to offer its clients
a broad range of non-banking products. The table below details the holdings and the line of business of
each one of these companies.
Table 128. Insurance, Pension Plans and Capitalization
Company
Share %
Business
Partnership
Cia. De Seguros Aliança do Brasil S.A.
BrasilVeículos Cia de Seguros
Brasilprev
Brasilcap
Brasilsaúde
100.00
70.00
49.99
49.99
49.92
Health and Other Activities
Vehicle
Pension
Capitalization
Health
Sul América Seguros
Principal Financial Group e Sebrae
Icatu Hartford, Sul América e Aliança da Bahia
Sul América Seguros
Companies Results
To make the understanding easier and to enhance the disclosure of the insurance, pension and
capitalization businesses, we present in this chapter a Income Statement for each operating activity.
In reference to 1Q08, the period considered is from december 2007 to february 2008, in reference to
4Q08 the period considered is from september to november 2008 and in reference to 1Q09 the period
considered is from december 2008 to february 2009, since the insurance, pension and capitalization
companies consolidation period always considers one month gap.
10.2.1 Income Statement by Line of Business
Table 129. Income Statement by Line of Business
R$ thousand
1Q09
Auto
Rev. from Insurance Pension Plans and Capitalization
Retained Insurance Premiums
Revenues from Pension Plans
Revenues from Capitalization
Changes in Technical Provisions
Insurance
Pension Plans
Capitalization
Benefits and Redemption Expenses
Earned Premiums
Retained Claims
Marketing Expenses
Insurances
Pension Plans
Capitalization
Activity Result
Tax Expenses
Financial Income
Financial Revenues
Financial Expenses
Operating Income
Equity Account Adjust
Income before Taxes
Profit Sharing
Net Income (Loss)
278,490
278,490
(14,765)
(14,765)
263,725
(175,816)
(30,494)
(30,494)
(22,631)
34,784
(30,197)
(7,422)
23,959
26,759
(2,799)
21,125
123
619
21,866
(7,297)
(4,601)
9,968
1T09
Fee Income – Commission
Fee Income – BB Fees
Fee Income – Assets Management
Insurance Value Added
Total
Life and
Other
Health
6,654
-
32,895
-
Pension
Plans
716,325
1,224,470
716,325
1,224,470
(10,829) (1,171,446)
(10,829)
- (1,171,446)
(46,380)
705,496
(337,941)
(156,462)
(18,088)
(156,462)
(18,088)
(62,359)
74,570
148,734
63,127
(67,735)
(44,680)
(24,966)
56,070
64,588
89,367
554,825
(33,297)
(490,237)
112,102
83,036
111
696
23
112,909
83,059
(37,408)
(32,148)
(7,186)
(1,922)
68,315
48,989
Insurance
Auto
Equity Income Result
Insurance
Life and
Health
Other
49,238
388,597
49,238
388,597
(515)
4,450
(515)
4,450
48,724
393,048
(40,295) (121,830)
(2,630) (123,338)
(2,630) (123,338)
(2,888)
(36,840)
2,911
111,039
(4,328)
(33,210)
(150)
(17,394)
2,262
30,045
2,357
60,251
(94)
(30,206)
498
90,480
(12)
78
498
90,545
138
(30,250)
(1,196)
(1,389)
(362)
58,906
Total
58,906
65,560
1,138
93,227
127,260
-
40,451
40,451
1,458
152
2,893
4,503
41,007
1,290
195,477
237,774
Pension
Plans
Capitalization Consolidated
509,315
509,315
(449,340)
(449,340)
(35,858)
(35,858)
(7,248)
16,868
(15,837)
(3,050)
69,530
137,803
(68,272)
67,512
(946)
66,566
(25,629)
(1,596)
39,342
2,450,110
716,325
1,224,470
509,315
(1,631,615)
(10,829)
(1,171,446)
(449,340)
(46,380)
705,496
(337,941)
(210,408)
(156,462)
(18,088)
(35,858)
4,963
228,729
(128,252)
(28,016)
190,386
781,995
(591,609)
262,650
111
(227)
262,533
(95,184)
(10,704)
156,843
Capitalization Consolidated
20,755
110,804
6,057
8,623
141,940
18,341
27,825
86,617
18,708
8,055
31,266
67,595
65,258
370,627
24,489
10.2.2 Combined Ratio
The combined ratio shows the percentage of earned premiums used up by operating expenses in the
insurance business (retained claims, expenses with marketing and administrative expenses). The
consolidated combined ratio showed improvement and closed the quarter at 79.7%, against 78.7% in
1Q08.
Consolidated
82.2
7.1
82.0
24.7
24.2
50.4
2Q 07
Aut o
78.7
80.7
7.7
9.2
8.3
8.1
8.6
24.3
23.4
23.0
23.2
22.7
22.2
50.0
44.9
46.1
49.4
48.3
46.0
47.9
3Q 07
4Q 07
1Q 08
2Q 08
3Q 08
4Q 08
1Q 09
7.8
79.5
79.7
76.9
77.3
9.6
87.1
88.5
85.0
5.6
87.0
10.4
5.7
91.4
12.5
5.8
86.9
10.1
5.8
93.2
92.2
11.8
5.9
10.4
5.3
97.9
12.5
5.2
2Q 07
71.0
3Q 07
73.0
4Q 07
71.1
1Q 08
75.5
2Q 08
78.9
3Q 08
84.0
4Q 08
13.4
11.6
12.3
64.6
66.4
62.2
65.1
67.7
64.5
67.3
66.7
2Q 07
3Q 07
4Q 07
1Q 08
2Q 08
3Q 08
4Q 08
1Q 09
Lif e a nd Others
77.6
5.5
77.2
6.0
34.2
72.4
71.1
5.4
5.9
34.2
32.4
32.6
33.1
1Q 09
70.8
65.1
6.0
8.4
5.4
31.6
31.4
38.0
37.0
30.3
31.1
34.2
33.3
28.0
31.0
2Q 07
3Q 07
4Q 07
1Q 08
2Q 08
3Q 08
4Q 08
1Q 09
Expenses for Marketing / Ea rned Premius - %
Raited Claims - Earned Pre miu s - %
72.8
5.5
69.9
82.7
Administrative Expen ses / Ear ned Premius - %
Figure 73. Combined Ratio
11.5
11.6
10.4
12.5
34.1
80.5
13.2
12.1
87.5
10.1
12.0
9.0
97.0
10.1
5.4
89.7
11.2
11.8
90.5
11.3
11.6
Health
96.2
10.2
92.6
89.0
10.2.3 Brasilveículos
The market share of Brasilveículos in January 2009 was 7.3%, against 6% in January 2008, gaining 6th
place in the SUSEP ranking.
This performance was reflected in the growth of turnover, which surpassed R$ 267 million in retained
premiums in the quarter, 20.5% higher than the same prior-year period.
As regards the new rules of Minimum Capital Required, effective as from January 1, 2008, the company is
in compliance and presents a rate of sufficiency that is 1.12 times the Shareholders' Equity.
Table 130. Brasilveículos Data
R$ thousand
Chg. %
1Q08
Earned Premiums
Retained Claims
Net Income
ROE - %
219,038
(139,780)
19,4067
6.2
4Q08
271,156
(161,502)
9,340
3.3
1Q09
278,490
(175,816)
9,968
3.4
On 1Q08
On 4Q08
27.1
25.8
(48.6)
2.7
8.9
6.7
R$ thousand
Chg. %
Mar/08
Fleet – thousand
Volume of the Managed Portfolio
Rate of Portfolio Retention
750
447,139
81.84
Dec/08
807
593,663
79.46
Mar/09
821
599,573
79.53
On Mar/08
9.5
34.1
(2.8)
On Dec/09
1.7
1.0
0.1
Awards and Highlights
The renewal solution of BB Seguro Auto via mobile phone was deployed in the wap environment of
bbseguro and in the wap portal of Banco do Brasil in March 2009. The company is the pioneer in the
automotive insurance renewal service via mobile phone, where the client can also enjoy various services
available, such as maps, routes and addresses for the performance of prior survey.
Brasilveículos achieved a prominent position in the first quarter of 2009 when it received from Revista
Segurador Brasil the "Segurador Brasil 2009" award, in the category of "best global performance in
vehicle insurance".
10.2.4 Brasilsaúde
Brasilsaúde sells Health Insurance and Dental Insurance in the Collective Business and Collective by
Adhesion categories, with the business segment as its target audience.
In the first quarter of 2009, the company attained R$ 49.8 million in retained premiums, an increase of
42% in relation to 2008.
Table 131. Brasilsaúde Data
R$ thousand
Chg. %.
1Q08
Earned Premiums
Retained Claims
Net Income
ROE - %
34,495
(24,180)
1,768
3.5
4Q08
48,494
(40,274)
125
0.2
1Q09
49,238
(40,295)
(362)
(0.7)
On 1Q08
On 4Q08
42.7
66.6
1.5
0.1
-
-
R$ thousand
Chg. %.
Mar/08
Lives Insured
88
54,594
Dec/08
127
62,488
Mar/09
127
61,487
On Mar/08
44.3
12.6
On Dec/09
0.0
(1.6)
Brasilsaúde achieved a prominent position in the first quarter of 2009 when it received from Revista
Segurador Brasil the "Segurador Brasil 2009" award in the category of "best global performance in health
insurance".
10.2.5 Aliança do Brasil
With a market share of 42.3% in rural insurance, Aliança do Brasil keeps its leadership in the ranking of
this segment. The sales of BB Seguro Agrícola attained R$ 26.1 million in net premiums issued, up to
March 2009.
In life insurance, the company attained R$ 281.3 million in net premiums issued, 23.8% higher than in the
first quarter of 2008.
In the YTD up to March 2009, the company determined R$ 376.1 million in retained premiums and net
income of R$ 60.6 million, up 17% over the same quarter of 2008.
The accumulated loss ratio of the period attained 34.3% against 32%, in the first quarter of 2008.
As regards the new rules of Minimum Capital Required, effective as from January 1, 2008, the company is
in compliance and presents a rate of sufficiency that is 1.16 times the Shareholders' Equity.
Table 132. Aliança do Brasil Data
R$ thousand
Chg. %
1Q08
Earned Premiums
Retained Claims
Net Income
ROE - %
312,508
(102,475)
48,915
12.8
4Q08
452,537
(107,130)
62,809
16.6
1Q09
388,597
(121,830)
58,906
14.6
On 1Q08
On 4Q08
24.3
18.9
20.4
(14.1)
13.7
(6.2)
R$ thousand
Chg. %
Mar/08
Life Insurance Policies - thousand
2,502
878,007
Dec/08
2,105
1,139,407
Mar/09
2,302
1,183,399
On Mar/08
(8.0)
34.8
On Dec/09
9.4
3.9
Aliança do Brasil achieved a prominent position in the first quarter of 2009 when it received from Revista
Segurador Brasil the "Segurador Brasil 2009" award, in the categories of "best global performance", "best
performance in rural risks" and "highlight of sales in rural risks".
10.2.6 Brasilcap
Brasilcap maintained its leadership in the capitalization market, with market share of 22.8% in collection
and in reserves, accumulated up to January 2009.
Maintaining the level of the quarterly collections of 2008, the company attained R$ 506.8 million in
revenues in the first quarter of 2009.
Table 133. Brasilcap Data
R$ thousand
Chg. %
1Q08
Revenues
Net Income
ROE - %
4Q08
477,880
22,258
12.5
1Q09
510,151
20,279
12.6
On 1Q08
509,315
39,342
22.9
On 4Q08
6.6
76.7
(0.2)
94
R$ thousand
Chg. %
Mar/08
Quantity of Bonds – thousand
Quantity of Prize-winning Bonds – thousand
Sum of Prizes Distributed
Technical Reserves
Dec/08
Mar/09
On Mar/08
6.5
On Dec/09
3,771
4,004
4,016
0.3
2,778,734
3,267,407
3,309,462
19.1
1.3
11
9,1
8,2
(25.4)
(9.9)
15,290
23,755
19,391
26.8
(18.4)
2,178,514
3,059,774
3,149,407
44.6
2.9
Brasilcap achieved a prominent position in the first quarter of 2009 when it received from Revista
Segurador Brasil the "Segurador Brasil 2009" award, in the categories of "best performance" and
"highlight of sales".
10.2.7 Brasilprev
The Brasilprev manteined the leadership in net funding (total volume of contributions minus redemptions)
with 30.2% - position of March, Fenaprevi - and obtained the best client retention rate of the open private
pension market.
In January the company attained the leadership in collections in PGBL, with 24.6% of market share.
In the first quarter of 2009, the company collected R$ 1.14 billion. This performance guaranteed 3rd place
in the open private pension market, with a share of 12.9% in collection and 14.2% in reserves, according
to the ranking of SUSEP (January/2009).
Table 134. Brasilprev Data
R$ thousand
Var. %
1Q08
Revenues
Net Income
4Q08
1Q09
On 1Q08
On 4Q08
861,748
985,777
1,224,470
40.9
13.9
41,150
56,124
48,988
19
(12.7)
11.1
13.2
11.4
ROE - %
R$ thousand
Chg. %
Mar/08
Rate of Redemptions
Dec/08
Mar/09
On Mar/08
On Dec/09
10,1
8,53
12,1
19.8
41.9
2,135
2,598
2,740
28.3
5.5
17,011,015
20,402,125
21,555,917
26.7
5.5
Technical Reserves
16,654,561
19,968,810
21,183,745
27.2
6.1
Active participants – thousand
* These percentages, published by Fenaprevi, refer to january.
Brasilprev achieved a prominent position in the first quarter of 2009 when it received from Revista
Segurador Brasil the "Segurador Brasil 2009" award, in the categories of "market highlight".
Also in 2009, the company received from Jornal do Comércio do Rio Grande do Sul, the "Marcas de
Quem Decide" award, in the category of "most memorable and preferred brand in private pension from
Rio Grande do Sul".
10.3 Acquisition, Incorporations and Strategic Partnership
This chapter gathers the main distinctions of the transactions effected by Banco do Brasil in 1Q09, as well
as those that are in progress, according to the material facts published to the market.
10.3.1 Transactions in the Period
Banco Nossa Caixa
On 12/23/2009, the General Meeting of Shareholders of BB approved the acquisition of controlling
interest of Banco Nossa Caixa. The contract of Sale of Shares was executed with the State Government
of São Paulo on 12/19/2008. A request for registration of a Public Offering of Acquisition of Shares of
Banco Nossa Caixa was filed at the Securities Commission - CVM on 1/19/2009. The price defined for
the acquisition is R$ 70.63 per share.
On 3/11/2009, as disclosed through a Release to the Market, Bacen approved the transfer of controlling
interest do BNC to BB, an operation that was executed with the payment of the first installment (total of
18), in the amount of R$ 310.9 million on 3/16/2009. With these acts, the shares belonging to the State
Government of São Paulo were transferred to BB, which became the controlling shareholder of BNC.
The acquisition operation will allow BB the potential obtainment of synergies, with special emphasis on:
Expansion of the Loan Portfolio and reduction of default, by means of the offer of a more complete
range of products and services, besides an improvement in the credit scoring process;
Expansion of services with better production of return for the customer base of Nossa Caixa with the
business model and product portfolio of BB;
Improvement of the efficiency of revenues, costs and gains in scale, as of the deployment of the
operating model of BB;
Reduction of the payment of taxes given the amortization of goodwill after takeover.
The following tables evidence the main numbers of Banco Nossa Caixa.
Table 135. BNC Equity Highlights
Chg. %
Mar/08
Assets
Dec/08
Mar/09
On Mar/08 On Dec/08
51,439
54,273
54,262
5.5
(0.0)
30,000
26,892
22,592
(24.7)
(16.0)
Loan Operations
4,882
5,870
6,132
25.6
4.5
Permanent Assets
2,226
1,902
1,805
(18.9)
(5.1)
31,908
37,213
36,655
14.9
(1.5)
(5.5)
Securities and Derivative financial instruments:
Total Deposits
Demand
3,128
4,122
3,895
24.5
Savings
10,425
11,393
11,515
10.5
1.1
Time
18,350
21,694
21,239
15.7
(2.1)
Money Market Funding
11,747
8,385
8,202
(30.2)
(2.2)
2,867
3,181
2,861
(0.2)
(10.1)
Table 136. BNC – Highlights of the Statement of Income
Chg. %
Statement of Income for the Year
Intermediation Income
1Q08
4Q08
1,672
1Q09
2,203
On 1Q08
1,954
On 4Q08
16.9
(11.3)
Loan operations
796
939
993
24.7
5.7
Securities Income
782
1,131
878
12.3
(22.4)
Income from Financial Derivatives
Income from Financial Intermediation
Market Borrowing
Borrowings and onlendings
Financial Margin
Allowance for Loan Losses (1)
Net income from financial intermediation
Other operating income (expenses)
Fee income
Administrative expenses
Tax Expenses
Equity in the (earnings)/loss of subsidiary and associated
companies
(1)
0
-
-
-
2
42
13
429.2
(68.6)
92
91
71
(23.5)
(22.3)
(739)
(1,179)
(908)
22.9
(22.9)
(715)
(1,099)
(869)
21.6
(20.9)
(51.5)
(24)
(80)
(39)
63.9
933
1,024
1,046
12.1
2.1
(185)
(203)
(296)
59.8
45.9
(8.7)
748
822
750
0.3
(563)
(602)
(597)
6.1
(0.8)
251
309
308
22.6
(0.4)
(717)
(765)
(763)
6.5
(0.1)
(73)
(80)
(82)
12.2
1.6
-
-
12
-
(4.6)
67
66
63
(6.4)
(92)
(132)
(135)
47.1
2.2
185
220
153
(17.2)
(30.3)
Non-operating income
(10)
(28)
(20)
101.2
(26.9)
Profit before taxation and profit sharing
175
192
133
(24.0)
(30.8)
6
(54)
(82)
-
51.5
(15)
(24)
-
Other operating expenses (2) (3)
Income and Social Contribution Taxes (1) (2) (3)
Interest
Recurring Income
166
114
51
(69.2)
(55.4)
Extraordinary Items:
(51)
(63)
(400)
687.7
530.9
Allowance for loan losses (1)
-
-
(172)
-
-
Sundry Provisions - Other Operating Expenses (2)
-
-
(565)
-
-
Tax impact on PCLD and Sundry Provisions (1) (2)
-
-
424
-
-
(85)
(106)
(145)
71.7
37.5
34
42
58
71.7
37.5
115
51
(349)
-
-
a) Corrections Due Diligence
b) Other
Civil Contingencies - Economic Plans (3)
Tax Impact on Civil Contingencies - Economic Plans (3)
NET INCOME/LOSS FOR THE PERIOD
The adjustments identified in the Due Diligence performed in 2008, as part of the acquisition process of
the controlling interest of Nossa Caixa, and the amounts referring to provisions for civil contingencies economic plans, were treated as extraordinary items in the quarter:
(1) Expenses with Allowance for Loan Losses with an impact of R$ 171.8 million, resulting from:
Formation of additional allowance for loan losses in the amount of R$ 174.7 million with adoption of
the criterion of Banco do Brasil in the classification of loans
Reversal of the amount of R$ 2.9 million of Allowance for Loan Losses referring to payments to be
reimbursed of expenses with payments of retired employees and pensioners from groups A and B
(hired up to May 1974)
(2) Other Operating Expenses with an impact of R$ 565.4 million resulting from:
Provision of R$ 69.3 million, based on actuarial calculations for reimbursement of the social security
contribution of 11% and amounts paid above the ceiling to the group of employees and pensioners
and those hired up to January 1974 (group A);
Provisioning of R$ 95.2 million for expenses with retirements and pensions of employees hired
between January and May 1974;
Provisioning of R$ 197.8 million for expenses with medical care of the employees hired in group A
and B, whose contribution has been insufficient, pursuant to actuarial calculation;
Formation of supplements of provisions for civil contingencies in the amount of R$ 10.5 million, for
labor contingencies of R$ 37.0 million and for fiscal contingencies in the amount of R$ 19.7 million,
resulting from adjustments in the criteria of estimates.
The sum of these adjustments resulted in reduction of R$ 399,966 thousand in the income/expenses of
1Q09. Disregarding the effects of these adjustments, BNC would have recorded income of R$ 50,949
thousand.
In relation to the Loan Portfolio, we can observe concentration in loans to individuals, with greater
relevance to Payroll Loans, which represent 40.3% of this portfolio with a sum of R$ 6,433 million in
1Q09. Loans to companies amounted to R$ 3,065 million in 1Q09, with an emphasis on the lines of
Working Capital and Revolving Credit for Companies' Working Capital, which participate with 45.1% and
44.4% of the total, respectively. For further information about the Loan Portfolio of BNC, see the Nossa
Caixa - Net Income 1Q09 report available on the Investor Relations website of BB.
Table 137. BNC Loan Portfolio
Chg. %
Mar/08
Individuals
Dec/08
Mar/09
On Mar/08 On Dec/08
7,289
9,917
10,760
47.6
8.5
Payroll loans
3,805
5,804
6,433
69.1
10.8
Personal Loan
1,654
1,740
1,835
11.0
5.5
Housing Loan
510
738
779
52.7
5.7
1,319
1,636
1,712
29.8
4.7
Other
Businesses
2,411
2,978
3,065
27.1
2.9
Overdraft Accounts
807
1,067
1,167
44.6
9.3
Working Capital
659
798
828
25.6
3.7
Other
Total
945
1,113
1,070
13.2
(3.8)
9,700
12,896
13,825
42.5
7.2
Table 138. BNC Loan Portfolio by Level of Risk
Mar/08
Balance
AA
Dec/08
Provision Comp. %
Balance
Mar/09
Provision
Comp. %
Balance
Provision Comp. %
956
-
9.9
1,562
-
12.1
1,616
-
11.7
A
1,565
8
16.1
3,520
18
27.3
3,828
20
27.7
B
4,527
76
46.7
5,068
95
39.3
5,388
103
39.0
C
1,339
63
13.8
1,270
53
9.8
1,352
59
9.8
D
573
62
5.9
741
105
5.7
750
109
5.4
E
158
48
1.6
151
45
1.2
185
55
1.3
F
111
57
1.1
131
67
1.0
153
77
1.1
G
103
72
1.1
99
69
0.8
110
77
0.8
H
368
368
3.8
355
355
2.7
442
442
3.2
9,700
754
100.0
12,896
806
100.0
13,825
943
100.0
-
174
-
1,118
Total
Suppl. Prov.
-
Prov. Total
-
-
-
AA-C
8,387
147
86.5
11,419
166
88.6
12,185
182
88.1
D-H
1,313
607
13.5
1,476
641
11.4
1,640
761
11.9
Table 139. BNC Deliquency Ratios
Mar/08
Loan Portfolio
12,896
558
592
715
5.8%
4.6%
5.2%
32.2
38.3
32.1
8.6
18.5
9.2
54.0
52.4
51.4
1.118
Write-off
Net Loss
Provision
13,825
754
806
7.8%
6.3%
8.1%
135.17
136.17
156.21
1.9
1.6
3.4
Allowance/Past Due Loans + 60 days
Mar/09
9,700
Past Due Operations + 60 days
Past Due Operations + 60 days / Loan Portfolio
Dec/08
PCLD Expenses / Average Loan Portfolio (12 months)
BNC serves 5,769 thousand customers with a network of 563 branches and 1,268 ATMs.
Table 140. BNC Operating and Structural Highlights
Chg. %
Mar/08
Assets Under Management –R$ million
Dec/08
Mar/09
On Mar/08 On Dec/08
22,184
24,697
27,931
25.9
Quantity of Cards – thousands
1,626
1,772
1,808
11.2
2.0
Customers – in thousands
5,731
5,673
5,769
0.7
1.7
3,453
3,223
3,275
(5.2)
1.6
559
562
563
0.7
0.2
1,276
1,287
1,268
(0.6)
(1.5)
Collaborators
16,237
14,817
14,831
(8.7)
0.1
Employees
15,032
14,446
14,375
(4.4)
(0.5)
1,205
371
456
(62.2)
22.9
Individual Customers Checking Accounts
Network of Branches
ATM
Interns
Table 141. BNC Result Index Highlights
Indicators - %
1Q08
4Q08
1Q09
Recurring Efficiency Index
51.8
51.2
50.2
Recurring ROE
26.2
17.6
6.5
Recurring ROAE
25.3
15.0
6.8
13.1
10.3.2 Negotiations in Progress
Banco Votorantim
The strategic partnership reported between Banco Votorantim (BV) and BB was signed in 01/09/2009,
according to the material fact published in the same date. The deal includes the acquisition, by BB, of R$
33,356,791,198 BV ordinary shares for the price of R$ 3 billion, besides the subscription, also by BB, of
new preferred shares issued by Banco Votorantim for the amount of R$ 1,2 billion.
Banco do Brasil will start to have 50% of the stake and almost 50% of Banco Votorantim voting capital.
The business model and the partners will be sustained, both the Shareholders will have equal
representation in the board of directors, each indicating 3 members, and the president of the board of
directors will be alternated between both the Shareholders.
The partnership shows high strategic reasons, since it will allow Banco do Brasil to:
Grow faster under and intense consolidation process of the Brazilian Banking Sector and leverage
asset generation of low cost, stable and secure funding sources;
Access to alternative well developed distribution channels – car dealers, partners and BV Financeira
stores;
Success model in sales promotion with national vehicle loan participation;
Strengthen of BB acting in the capital market (Votorantim Corretora) and in the Corporate Segment.
The following tables show the highlights the main points of Banco Votorantim deal:
Table 142. Banco Votorantim – Performance Highlights
R$ milion
Chg.%
Quarterly Flow
1Q08
Loan Revenues
Lease Revenues
Securities
Money Market Funds
Fee Income
Personnel Expenses
Net Income
2,180
1,332
11
403
(1,492)
(1,189)
(8)
(196)
(414)
190
(100)
(174)
188
4Q08
3,708
3,633
297
1,373
(3,281)
(2,402)
(157)
(185)
(339)
137
(114)
(235)
128
1Q09
2,653
2,176
369
870
(1,955)
(1,482)
(233)
(317)
(481)
155
(134)
(225)
170
On 1Q08
21.7
63.4
3.237.7
115.6
31.0
24.6
2.900.3
61.7
16.2
(18.2)
34.0
29.9
(9.1)
On 4Q08
(28.4)
(40.1)
24.5
(36.6)
(40.4)
(38.3)
48.2
71.1
42.0
13.4
18.2
(3.9)
32.8
Table 143. Patrimonial Highlights
R$ million
Change %
Mar/08
Dec/08
Mar/09
On Mar/08
On Dec/08
Assets
70,513
72,310
83,606
18.6
15.6
Securities
20,121
21,585
22,874
13.7
6.0
Loan Portfolio
30,606
38,184
38,973
27.3
2.1
Individuals
16,947
19,251
20,930
23.5
8.7
1,739
1,237
1,783
2.6
44.1
14,510
15,759
16,348
12.7
3.7
35.2
Payroll Loan
Vehicles Loan
Leasing and Subleasing Receivables
102
1,472
1,990
1,850.0
2,336
2,020
2,592
11.0
28.3
Businesses
13,659
18,933
18,043
32.1
(4.7)
Deposits
17,187
18,932
22,988
33.7
21.4
Other
Demand Deposits
118
109
81
(31.2)
(25.7)
Time Deposits
15,705
14,636
18,727
19.2
27.9
23,878
16,625
26,121
9.4
57.1
6,202
6,362
6,514
5.0
2.4
Table 144. Loan Portfolio by Level of Risk
R$ million
Mar/08
Balance
AA
Dec/08
Allowance Comp. %
Balance
Mar/09
Allowance Comp. %
Balance
Allowance
Comp. %
8,153
-
26.6
11,655
-
30.5
11,268
-
28.9
A
16,666
83
54.5
20,054
100
52.5
20,872
104
53.6
B
4,032
40
13.2
4,194
42
11.0
4,173
42
10.7
C
914
27
3.0
1,182
35
3.1
1,275
38
3.3
D
247
25
0.8
362
36
0.9
486
49
1.2
E
125
37
0.4
142
42
0.4
199
60
0.5
F
82
41
0.3
122
61
0.3
149
75
0.4
G
74
52
0.2
83
58
0.2
108
76
0.3
H
313
313
1.0
390
390
1.0
443
443
1.1
30,606
619
100.0
38,184
765
100.0
38,973
886
100.0
Total
Add. Prov.
Total Prov.
AA-C
D-H
7
9
9
626
774
895
29,765
151
97.3
37,085
178
97.1
37,588
184
96.4
841
468
2.7
1,099
588
2.9
1,385
702
3.6
Table 145. Loan Portfolio – Deliquency
Mar/08
Dec/08
R$ thousand
Mar/09
Loan Portfolio
30,606.1
38,183.9
38,973.2
Loans overdue
1,819.8
2,351.9
3,138.2
5.9
6.2
8.1
546.7
684.4
838.8
1.8
1.8
2.2
(135.1)
(172.7)
(196.0)
14.9
21.4
21.9
(120.2)
(151.2)
(174.1)
1.6
1.6
1.8
(626.4)
(774.1)
(894.8)
2.0
2.0
2.3
114.6
113.1
106.7
2.5
2.5
2.7
Past Due Loans/Loan Portfolio
Write-off
Net Loss
Net Loss/Loan Portfolio - % annualized
Provision
Allowance Expenses / Loan Portfolio (12 months average)
Table 146. Vehicle Portfolio
Average rate per crop (p.m.)
Average term per crop
Duration
Average Portfolio Term (p.y.)
Used Vehicles / Vehicles Portfolio - %
Average Vehicle Age (years)
Financed Value / Good Value – average %
Mar/08
1.7
43
18.4
22.9
86.9
6.9
63.2
Dec/08
2.2
43
18.4
26.6
85.7
6.5
66.6
Table 147. Operational and Structure Highlights
Customers
Managed Resources
Partners*
Number of Branch Offices
*Includes employees, statutories and interns.
Dec/08
2,727
15,679
6,605
117
Mar/09
2,782
15,172
6,698
117
Mar/09
2.0
43.0
18.1
26.4
86.4
6.4
67.2
11 – Financial Statements
11.1 Summarized Balance Sheet
Table 148. Balance Sheet – Assets (R$ million)
Jun/07
Sep/07
Dec/07
Mar/08
Jun/08
Sep/08
Dec/08
ASSETS
342,049 351,651 367,210 414,193 416,503 458,873 521,273
Current and long-term assets
336,146 345,739 360,906 406,228 409,461 450,656 511,761
Available funds
4,724
4,366
4,352
4,790
5,754
6,847
5,545
Short-term interbank investments
51,614
51,419
51,124
72,689
54,283
71,092 119,408
Open market investments
39,961
42,938
43,391
57,963
44,064
61,637
95,160
Interbank deposits
11,653
8,481
7,733
14,725
10,219
9,454
24,249
Marketable securities
72,071
74,126
75,201
81,490
82,301
85,954
86,909
Securities for trading
10,856
14,046
19,112
24,717
26,009
26,475
26,136
Securities available for sale
39,379
38,466
38,109
35,388
35,480
37,777
38,374
Securities held to maturity
20,589
20,029
16,830
20,485
19,597
20,443
20,123
Financial derivatives
1,247
1,585
1,150
899
1,216
1,258
2,276
Interbank accounts
30,759
31,503
33,445
36,340
38,260
38,238
21,287
Central Bank deposits
28,711
29,199
32,278
31,102
33,666
35,564
20,882
Compuls. dep, on demand, Dep & float
11,714
10,768
10,768
11,127
12,952
12,220
12,439
Compulsory dep, on savings dep,
16,996
18,430
21,510
19,975
20,714
23,344
8,443
Others
2,048
2,304
1,167
5,238
4,594
2,675
405
Interdepartmental accounts
32
73
188
118
126
138
228
Loans
125,502 129,487 138,817 149,507 165,558 175,599 190,882
Public sector
4,631
4,643
2,472
6,286
14,670
3,038
12,471
Private sector
129,975 134,184 146,324 153,543 161,661 183,345 191,589
(Allowance for loan losses)
(9,104)
(9,341)
(9,980) (10,322) (10,773) (10,783) (13,179)
Leasing
22
26
32
1,355
13
13
2,968
Leasing and sub-leasing receivables
1,068
1,095
1,109
1,380
1,369
1,575
4,880
Public sector
100
93
80
69
58
48
55
Private sector
968
1,002
1,028
1,311
1,311
1,527
4,825
(Unearned lease income)
(1,024)
(1,047)
(1,054)
(1,320)
(1,518)
(1,842)
(Allowance for lease losses)
(22)
(23)
(23)
(25)
(36)
(44)
(71)
Other receivables
50,344
53,245
54,883
59,211
58,917
68,375
83,279
Receivable on guarantees honored
49
47
49
55
49
51
71
Foreign exchange portfolio
9,892
11,538
9,023
12,608
10,060
17,053
20,914
Income receivable
298
317
372
433
435
402
413
Trading and brokerage of securities
159
191
259
338
183
287
347
Specific credits
719
738
757
776
797
821
846
Special operations
1
1
1
1
0
0
0
Credits from Insurance, Pension and Capitalization Op.
269
304
396
441
Tax credits
13,746
13,881
13,826
14,051
14,337
14,994
16,499
Atuarial Assets
2,460
2,364
2,268
2,180
2,092
2,003
7,794
Warrants Deposits Receivable
14,710
15,110
15,409
16,394
16,671
17,481
18,007
Other credits
9,166
9,915
13,816
13,120
15,074
16,008
19,325
(Provision or doubtful receivables)
(856)
(856)
(896)
(1,014)
(1,082)
(1,121)
(1,377)
(With loan characteristics)
(315)
(300)
(311)
(347)
(357)
(360)
(579)
(Without loan characteristics)
(541)
(556)
(585)
(667)
(726)
(760)
(798)
Other assets
1,079
1,495
2,865
729
4,249
4,400
1,256
Statutory profit sharing
0
0
0
0
0
0
0
Others
271
254
262
300
297
304
308
(Provision for possible losses)
(148)
(152)
(152)
(164)
(162)
(165)
(170)
Prepaid expenses
955
1,393
2,755
593
4,114
4,261
1,118
Permanent assets
5,903
5,912
6,304
7,964
7,042
8,217
9,512
Investments
1,262
1,276
1,368
1,055
1,190
1,589
966
Investm, in assoc. and subsidiary co,
1,207
1,233
1,316
131
360
763
163
Other investments
127
108
115
990
893
893
871
(Provision for losses)
(71)
(65)
(64)
(66)
(62)
(66)
(68)
Property and equipment
2,715
2,657
2,844
2,966
2,900
3,037
3,339
Land and buildings in use
2,328
2,337
2,349
2,585
2,429
2,510
2,668
Land and buildings in use reavaliation
Other property and equipment in use
4,257
4,305
4,594
4,975
5,007
5,278
5,610
(Accumulated depreciation)
(3,870)
(3,985)
(4,100)
(4,594)
(4,536)
(4,751)
(4,940)
Leased assets
1,362
1,430
1,507
7
2,330
2,939
4
Leases assets
1,748
1,845
1,937
464
2,796
3,402
8
(387)
(415)
(430)
(457)
(466)
(463)
(4)
Intangible
3,294
4,598
Intangible Assets
3,294
4,600
(Accumulated amortization)
(2)
Deferred charges
563
550
586
642
622
652
604
Organization and expansion costs
1,365
1,402
1,490
1,703
1,731
1,835
1,846
(802)
(852)
(904)
(1,060)
(1,109)
(1,183)
(1,241)
*Adjusted series since June 2007, concerning the CMN Resolution # 3,535, of 08.31.2008. For futher information see Presentation.
Mar/09
591,925
577,351
7,516
131,796
103,356
28,440
110,594
32,475
45,269
31,433
1,417
30,925
25,543
12,381
13,162
5,382
99
205,376
3,767
216,684
(15,075)
3,246
3,352
53
3,299
(106)
86,156
81
19,041
513
150
868
0
586
20,413
7,794
20,024
18,363
(1,676)
(649)
(1,027)
1,642
0
356
(183)
1,469
14,574
961
188
869
(96)
3,588
2,825
152
6,018
(5,407)
3
429
(426)
9,391
10,544
(1,154)
632
2,226
(1,594)
Table 149. Balance Sheet – Liabilities (R$ million)
Jun/07
LIABILITIES AND SHAREHOLDERS' EQUITY
Current and long-term assets
Deposits
Demand deposits
Savings deposits
Interbank deposits
Time deposits
Investment deposits
Money market borrowing
Own portfolio
Third-party portfolio
Others
Funds from acceptances and securities placed
Foreign securities
Interbank accounts
Receipts and payments pending settlement
Correspondent banks
Third-party funds in transit
Internal transfers of funds
Borrowing
Foreign borrowing
Domestic onlending – official institutions
Federal Treasury
National Development Bank (BNDES)
Caixa Econômica Federal (CEF)
Fed. Prog. for Cap. Equip. Finan. (FINAME)
Other institutions
Foreign onlending
Financial derivatives
Other accounts payable
Collection of taxes and contributions
Stockholders and statutory distributions
Taxes and social security
Trading and brokerage of securities
Technical Prov. Insurance, Pension & Capitalization. Op.
Perpetual Securities
Special operations
Obligations for Lotto Operations
Subordinated Debt (FCO)
Actuarial liabilities
Other liabilities
Deferred income
Shareholders’ equity
Capital
(Unpaid Capital)
Capital reserves
Revenue reserves
Mark-to-market – securities and derivatives
(Treasury shares)
Income accounts
Sep/07
Dec/07
342.049
319.644
164.545
36.841
40.831
5.146
81.427
300
74.719
41.880
32.539
300
1.487
1.487
1.697
1.695
2
1.318
1.293
25
3.354
3.354
15.240
3.141
4.843
351.651
328.479
172.180
38.712
43.831
5.603
83.640
394
74.845
29.537
40.859
4.450
1.616
1.616
1.929
1.926
3
1.497
1.470
27
2.981
2.981
16.528
3.132
5.121
367.210
342.825
188.282
51.311
45.839
5.144
85.520
468
72.270
28.126
44.144
1.297
1.297
12
2
9
2.428
2.311
117
2.833
2.833
17.487
3.185
8.713
6.759
498
4
2.052
55.227
1.851
14.166
763
11.509
168
7.516
759
0
2.475
54.428
1.917
11.600
1.056
12.081
195
4.866
723
0
1.947
56.268
233
6.609
850
12.725
243
2.006
978
2
1.847
932
2
2.117
894
2
9.574
3.562
10.648
100
9.829
3.932
11.037
107
10.012
4.051
18.533
123
22.305
12.711
6
9.145
443
-
23.065
12.711
0
6
8.933
384
1
1.031
24.262
13.212
0
6
10.695
350
-
Mar/08
Jun/08
414.193
388.786
189.751
44.142
48.112
6.247
90.939
310
99.716
37.545
61.771
400
1.260
1.169
3.049
3.036
13
1.369
1.273
96
3.251
3.251
18.250
3.184
9.198
5.194
673
0
1.876
70.264
2.443
10.939
1.342
12.244
590
10.575
2.125
887
2
10.405
4.111
14.600
25.407
13.212
0
6
10.125
85
1
1.978
416.503
389.968
195.216
43.603
49.096
5.578
96.495
443
93.097
45.999
46.418
680
2.025
1.857
3.611
3.598
13
1.185
1.160
25
3.244
3.244
19.255
3.246
9.555
5.802
652
0
1.953
70.382
2.505
7.949
1.235
13.370
155
11.183
2.251
807
2
10.774
4.166
15.985
164
26.371
13.212
5
6
13.090
58
-
Sep/08
458.873
430.819
229.810
42.955
52.693
6.309
127.582
270
85.339
28.632
56.707
2.664
2.465
2.438
2.423
14
1.315
1.268
46
5.008
5.008
19.640
3.276
9.380
6.085
898
0
1.367
83.238
2.770
15.761
1.549
14.540
382
12.075
2.277
971
2
11.232
4.285
17.394
165
27.889
13.699
5
7
12.750
(33)
0
1.461
*Adjusted series since June 2007, concerning the CMN Resolution # 3,535, of 08.31.2008. For futher information see Presentation.
Dec/08
521.273
491.336
270.841
51.949
54.965
14.065
149.618
243
91.130
21.927
69.203
3.479
3.210
21
1
20
2.496
2.495
0
7.627
7.627
22.436
3.485
11.168
6.585
1.199
98
3.895
89.312
252
15.964
1.838
17.570
401
12.675
2.458
1.185
2
11.772
5.662
19.531
(0)
29.937
13.780
5
7
15.977
199
(31)
-
Mar/09
591.925
560.232
305.002
47.276
70.567
8.406
178.487
266
106.452
31.133
75.319
3.074
2.762
1.940
1.924
16
1.862
1.808
53
9.991
9.991
22.220
3.532
10.753
165
6.826
945
104
3.164
106.422
3.156
15.380
985
17.686
145
13.771
3.741
1.174
2.136
9
14.371
5.738
28.130
834
30.859
13.780
5
7
15.759
124
(31)
1.215
11.2 Summarized Corporate Law Income Statement
Table 150. Summarized Corporate Law Income Statement (R$ million)
Loans
Leasing
Securities
Financial Inc. from Insur., Pension & Capit. Op.
Money Market Funds
Borrowing. Assignments and Onlending
Gross Income from Financial Intermediation
Fee Income
Banking Fees Revenues
Personnel Expenses
Taxes
Equity Int. in the Results of Subs. and Affil.
Income f/ Insur., Pension & Capitalization Op.
Other Operating Revenues
Operating Income
Income Before Taxes
Net Income
2Q07
3Q07
4Q07
1Q08
10,125
6,069
45
3,167
318
125
401
10,333
6,517
49
3,355
(149)
155
405
10,172
6,610
48
3,088
(10)
26
411
(6,105)
(4,416)
(393)
(1,296)
4,020
(2,297)
2,437
(2,513)
(1,647)
(525)
(63)
(6,483)
(4,753)
(498)
(1,232)
3,850
(2,062)
2,498
(2,449)
(1,736)
(513)
50
(6,160)
(4,281)
(351)
(1,528)
4,012
(2,350)
2,590
(2,343)
(1,888)
(537)
109
1,575
(1,561)
1,724
12
1,736
(530)
(137)
1,068
1,363
(1,274)
1,789
43
1,831
(293)
(175)
1,364
981
(1,261)
1,663
196
1,859
(485)
(157)
1,217
10,971
7,001
49
3,767
(448)
122
428
53
(7,232)
(4,909)
(720)
(1,603)
3,739
(853)
2,915
(1,933)
(1,809)
(566)
318
101
1,394
(1,272)
2,887
224
3,111
(462)
(301)
2,347
2Q08
3Q08
4Q08
1Q09
10,770 15,076 18,824 14,489
6,910
8,697 10,613
8,502
59
58
147
138
3,057
5,771
8,097
5,730
302
(85) (1,053)
(62)
(112)
(50)
503
(116)
468
590
424
176
85
94
93
121
(6,954) (11,409) (17,226) (11,131)
(5,122) (7,068) (8,432) (7,761)
(88) (2,973) (4,903)
(716)
(1,744) (1,367) (3,892) (2,654)
3,816
3,667
1,597
3,359
(1,593) (1,449)
2,744 (2,664)
2,259
2,259
2,338
2,255
646
673
720
688
(2,131) (2,377) (2,430) (3,152)
(1,855) (2,069) (2,185) (2,691)
(605)
(577)
(887)
(667)
(129)
496
707
(90)
220
218
353
303
1,976
1,322
7,090
2,061
(1,975) (1,396) (2,962) (1,371)
2,223
2,219
4,342
694
79
105
5
16
2,301
2,324
4,347
711
(445)
(216) (1,022)
1,182
(212)
(241)
(380)
(227)
0
1,644
1,867
2,944
1,665
11.3 Income Statement with Reallocations
2Q07
Loans
Leasing
Securities
Financial Income from Insur., Pension & Capitalization Op.
FX Gain(Loss)on Foreign Investments
Other Op. Inc. of a Fin. Intermed. Nature
Tax Hedge
Money Market Funds
Borrowing .Assignments and Onlending
Net Interest Income
Fee Income
Fee Income
Banking Fee Income
Taxes on Revenues
Contribution Margin
Personnel Expenses
Other Tax Expenses
Commercial Income
Legal Risk
Legal Claims
Labor Lawsuits
Eq.Interest in Resul. Subs. and Affil.
Res. From Insurance, Pension Plan and Capitalization Op.
Other Operating Income/Expenses
Other Operating Income
Operating Income
Non-Operating Income
Income Before Taxes
Recurring Income
Non-Recurring Items
Previ – Suspension of contributions - Plan I
Cassi – Assistance Plan
PAA – Prov, for Retirement Incentive Plan
Permanent Exclusions Tax Benefit
Disposal of investments (Bov. Hold. & BM&F)
Sale of Interest in VISA Internacional
Disposal of investments (Telemar)
Revaluation of Consolidated Interest
Economic Plans
Credit assignment
Tax Efficiency
Cards Replacement
Contingent Liabilities (BESC)
Tax Credit (BESC)
Previ – Non-recognized Actuarial Gains
Cassi – Non-recognized Actuarial Losses
Additional Provision for Loan Losses
Provision for labor, civil and tax claims
Tax credits – diffirential of CSLL rate
Tax FX and Statutory Profit Sharing over Extraord.
Items
Net Income
3Q07
4Q07
10,016
6,069
45
3,167
318
125
401
(223)
114
(4,809)
(4,416)
(393)
5,208
(1,236)
3,971
2,437
2,437
(489)
5,919
(3,268)
(1,713)
(1,519)
(36)
2,652
(303)
(102)
(201)
0
160
(160)
727
(887)
2,349
12
2,362
(743)
112
(137)
10,267
6,517
49
3,355
(149)
155
405
(100)
34
(5,111)
(4,613)
(498)
5,156
(1,216)
3,940
2,498
2,498
(476)
5,963
(3,368)
(1,759)
(1,572)
(37)
2,595
(219)
(73)
(146)
48
148
(100)
705
(805)
2,424
43
2,467
(650)
113
(175)
10,110
6,610
48
3,088
(10)
26
411
(94)
31
(4,632)
(4,281)
(351)
5,478
(1,497)
3,981
2,590
2,590
(495)
6,076
(3,708)
(1,936)
(1,729)
(42)
2,368
(306)
(87)
(219)
(140)
204
(344)
711
(1,054)
1,922
47
1,969
(522)
120
(157)
1,481
(413)
76
(676)
(26)
-
1,642
(278)
(403)
(141)
141
(91)
-
1,290
(73)
(90)
(98)
149
(71)
-
1Q08
11,046
7,208
49
3,571
(448)
122
428
53
27
35
(5,477)
(4,757)
(720)
5,568
(1,534)
4,034
2,915
2,915
(534)
6,415
(3,561)
(1,801)
(1,734)
(26)
2,854
(125)
6
(132)
(424)
(115)
101
(410)
879
(1,290)
2,305
224
2,529
(669)
125
(301)
1,559
789
305
241
(82)
67
302
-
2Q08
11,043
7,197
59
3,057
302
(112)
468
85
(294)
280
(5,210)
(5,122)
(88)
5,833
(1,687)
4,146
2,905
2,259
646
(571)
6,480
(3,696)
(1,989)
(1,672)
(34)
2,784
(215)
(74)
(141)
(380)
23
220
(624)
701
(1,324)
2,189
79
2,267
(592)
123
(212)
1,463
181
142
(54)
110
(54)
-
3Q08
4Q08
15,894
8,993
58
5,771
(85)
(50)
590
94
496
27
(9,862)
(6,889)
(2,973)
6,032
(1,338)
4,694
2,933
2,259
673
(489)
7,138
(3,905)
(2,020)
(1,797)
(88)
3,233
(155)
4
(159)
(307)
0
218
(526)
889
(1,415)
2,771
105
2,876
(598)
138
(241)
2,037
(170)
(192)
(360)
194
-
20,412
11,106
147
8,097
(1,053)
503
424
93
711
50
334
(13,335)
(8,432)
(4,903)
7,077
(2,240)
4,837
3,058
2,338
720
(589)
7,305
(4,515)
(2,301)
(2,043)
(170)
2,791
(226)
(97)
(129)
(189)
(3)
353
(539)
1,230
(1,769)
2,375
5
2,380
(557)
140
(198)
1,626
1,318
(44)
5,326
(1,259)
(1,594)
-
1Q09
15,260
8,951
138
5,730
(62)
(116)
176
121
(85)
471
(64)
(8,275)
(7,558)
(716)
6,985
(2,491)
4,494
2,943
2,255
688
(618)
6,819
(3,973)
(2,129)
(1,801)
(43)
2,846
(197)
(95)
(102)
(550)
(5)
303
(849)
795
(1,643)
2,099
16
2,115
(577)
179
(181)
0
1,357
309
(95)
(1,367)
1,213
213
216
37
(45)
37
188
(1,110)
557
1,068
1,364
1,217
2,347
1,644
1,867
2,944
1,665
Vice-Presidency of Finance, Capital Markets and Investor Relations
Vice-President
Aldo Luiz Mendes
Investor Relations Manager
Marco Geovanne Tobias da Silva
Executive Manager
Gilberto Lourenço da Aparecida
Divisional Managers
Eduardo Amaral Pilenghi
Gisele Campana Rodrigues
Analysts
Bruno Santos Garcia
Carla Sarkis Teixeira
Daniel Henrique Sousa Diniz
Domingos Pereira dos Santos Neto
Glauco Ribeiro Barbirato Tavares
Joabel Martins de Oliveira
Joaquim Camilo de Castro
Karen de Rezende Machado
Kimie Fueta Pellizzaro
Leonardo Resende Nader
Marcelo de Campos e Silva
Marcone Edson de Vasconcelos Formiga Filho
Mariana Reschke da Cunha
FINANCIAL
STATEMENTS
1Q09 RESULTS
Todo
seu
ÍNDEX
FINANCIAL STATEMENTS
Balance Sheet
Income Statement
Statement of Changes in Stockholder’s Equity
Cash Flow Statement
Added Value Statement
EXPLANATORY NOTES
NOTE 1 – The Bank and its Operations
NOTE 2 – Presentation of the Financial Statements
NOTE 3 – Main Accounting Practices
NOTE 4 – Consolidated Financial Statements
NOTE 5 – Acquisition of Banco Nossa Caixa
NOTE 6 – Cash and Cash Equivalents
NOTE 7 – Interbank Investments
NOTE 8 – Securities and Derivatives Financial Instruments
NOTE 9 – Loan Operations
NOTE 10 – Other Receivables
NOTE 11 – Foreign Exchange Portfolio
NOTE 12 – Other Assets
NOTE 13 – Property and Equipment and Leased Assets
NOTE 14 – Intangible Assets
NOTE 15 – Money Market Borrowing
NOTE 16 - Borrowings
NOTE 17 – Funds Obtained in Foreign Capital Markets
NOTE 18 – Other Liabilities
NOTE 19 – Operation Insurance Pension
NOTE 20 – Analysis of Income Statement Items
NOTE 21 – Stockholders' Equity
NOTE 22 – Income Tax and Social Contribution on Net Income
NOTE 23 – Tax Credits
NOTE 24 – Equity in the Earnings
NOTE 25 – Related-party Transactions
NOTE 26 – Retirement and Pension and Health Plans
NOTE 27 – Compensation Paid to Employees and Management
NOTE 28 – Assignment of Employees to External Organizations
NOTE 29 – Commitments, Responsibilities and Contingencies
NOTE 30 – Risk Management and Regulatory Capital
NOTE 31 – Other Information
INDEPENDENT AUDITORS REPORT
SUMMARY OF THE AUDIT COMMITTEE REPORT
DECLARATION OF THE BOARD OF DIRECTORS
FISCAL COUNCIL REPORT
EXECUTIVE BOARD
Financial Statements
In thousands of reais
BALANCE
Quarter ended 03.31.2009
SHEET
BB-Domestic and Foreign
Branches
03.31.2009
03.31.2008
Assets
Current Assets
BB - Consolidated
03.31.2009
03.31.2008
326.176.583
235.343.843
344.950.965
237.374.943
Available Funds
(Note 6)
6.961.113
4.641.262
7.515.942
4.789.550
Money market
Interbank deposits
(Note 7a)
136.818.450
98.620.483
38.197.967
75.297.475
56.981.121
18.316.354
123.016.163
103.355.937
19.660.226
71.672.378
56.946.960
14.725.418
(Note 8)
37.436.302
25.038.544
8.050.123
3.033.850
120.295
-1.193.490
25.631.589
8.329.575
14.618.293
977.938
537.701
398.531
769.551
53.756.339
37.294.769
12.115.278
3.033.850
120.295
-1.192.147
29.075.321
11.768.289
14.623.591
977.938
537.701
398.531
769.271
24.540.980
3.415.892
36.279.457
5.086.660
29.424.041
3.537.325
36.340.273
5.086.843
20.936.071
15.899
61.200
562
111.356
31.062.279
28.179
1.769
-100.570
25.543.110
15.899
72.113
562
255.032
31.102.117
28.179
1.769
-121.365
97.758
0
97.758
112.172
0
112.172
99.352
119
99.233
117.771
0
117.771
82.373.077
67.655.749
88.898.134
67.831.429
1.617.528
86.942.517
(6.186.968)
840.570
71.570.350
(4.755.171)
1.911.091
93.595.933
(6.608.890)
1.693.577
70.919.526
(4.781.674)
Securities and derivative financial instruments
Derivatives
Own portfolio
Subject to repurchase agreements
Deposits with the Brazilian Central Bank
Pledged in guarantee
Subject to repurchase agreements within free movement
Derivative financial instruments
Interbank Accounts
Payments and receipts pending settlement
Restricted deposits
Brazilian Central Bank deposits
National Treasury - rural credits receivable
National Housing Financing System (SFH)
Interbank onlendings
Correspondent banks
Loan operations
Loan operations
Public sector
Private sector
(Note 9)
Lease operations
Lease and sublease receivables
Public sector
Private sector
(Unearned income from lease operation)
(Note 9)
Other receivables
Receivables on guarantees honored
Income receivable
Negotiation and intermediation of securities
Specific operations
Special operations
Insurance, pension plan and capitalization
Sundry
(Provision for other losses)
Other assets
Investments
Other assets
(Provision for devaluations)
Prepaid expenses
(Note 11a)
(Note 10a)
(Note 10b)
(Note 12)
(Note 12)
5.840
1.451
1.354.719
665.970
21.165
-(15.325)
--
44.881
3
(43.433)
--
21.165
1.380.850
-(47.296)
44.882
635.860
0
(14.772)
37.195.223
33.315
18.912.278
254.782
37.469
1.714
28
-18.762.689
(807.052)
25.237.966
55.249
12.608.056
207.996
201.117
-575
-12.805.809
(640.836)
39.843.587
33.315
19.040.607
475.745
150.155
1.714
28
565.184
20.425.309
(848.470)
26.269.461
55.249
12.608.056
397.488
337.558
-575
268.904
13.256.375
(654.744)
747.840
3
271.819
(149.319)
625.337
486.722
3
252.851
(148.873)
382.741
1.042.688
3
346.638
(178.069)
874.116
612.790
3
300.274
(164.279)
476.792
1
Branches
03.31.2009
03.31.2008
ASSETS
BB - Consolidated
03.31.2009
03.31.2008
NON CURRENT ASSETS
211.663.031
173.376.532
246.974.268
176.817.575
LONG-TERM RECEIVABLES
194.734.400
163.005.883
232.400.169
168.853.550
(Note 7a)
8.173.676
-8.173.676
6.539.306
1.016.423
5.522.883
8.780.036
248
8.779.788
1.016.425
1.016.424
1
(Note 8)
35.089.558
5.930.875
15.664.002
11.846.544
1.421.814
-226.323
43.351.936
14.285.482
24.665.502
3.909.537
360.246
1.382
129.787
56.837.242
22.979.956
19.834.160
12.351.600
1.446.993
-224.533
52.414.276
23.254.871
24.751.996
3.909.537
366.543
1.382
129.947
2.201
-2.201
----
1.501.258
1.499.057
2.201
----
109.224.838
81.147.368
116.477.779
81.675.977
2.065.583
114.827.344
(7.668.089)
1.755.924
84.839.956
(5.448.512)
1.855.523
123.088.165
(8.465.909)
4.592.578
82.623.871
(5.540.472)
Interbank Investments
Money market
Interbank deposits
Derivatives
Own portfolio
Subject to repurchase agreements within free movement
Interbank accounts
Housing Financing System (SFH)
Interbank transfers
Loan operations
Loan operations
Public sector
Private sector
(Note 9)
Lease operations
Lease and sublease receivables
Public sector
Private sector
(Unearned income from lease operation)
(Note 9)
Other receivables
Receivables on guarantees honored
Income receivable
Specific credits
Sundry
(Note 10a)
(Note 10b)
Other assets
Other assets
Prepaid expenses
PERMANENT ASSETS
Investments
Investments in subsidiary and associated companies
Domestic
Foreign
Other investments
(Provision for losses)
8.760
781
1.891.712
689.419
31.747
-(22.987)
--
24.167
1
(23.387)
--
31.747
1.918.214
-(58.249)
24.167
675.208
0
(9.956)
41.952.005
47.680
37.129
865.965
-41.741.811
(740.580)
31.966.492
-36.004
776.236
-31.504.642
(350.390)
46.312.641
47.680
37.125
865.965
20.334
46.168.783
(827.246)
32.941.601
-35.807
776.236
82
32.488.867
(359.391)
283.362
--283.362
-----
599.501
9.294
(4.896)
595.103
115.852
--115.852
16.928.631
10.370.649
14.574.099
7.964.025
5.815.433
3.651.727
960.949
1.055.324
4.633.107
1.151.931
84.283
(53.888)
2.872.009
745.536
87.494
(53.312)
187.620
-868.952
(95.623)
131.373
-990.260
(66.309)
(Note 24)
Fixed assets revaluation originated from subsidiaries
Other property and equipment in use
(Note 13)
3.167.795
2.569.040
-5.280.877
(4.682.122)
2.792.367
2.375.524
-4.622.722
(4.205.879)
3.587.578
2.824.576
151.532
6.018.452
(5.406.982)
2.966.070
2.585.016
-4.975.165
(4.594.111)
Applications in fixed assets for leasing
Leased assets
(Note 13)
37.906
88.124
(50.218)
65.471
123.171
(57.700)
3.240
428.784
(425.544)
6.880
463.814
(456.934)
Intangible
Intangible Assets
(Note 14)
7.427.941
7.689.492
(261.551)
3.293.560
3.293.560
--
9.390.541
10.544.180
(1.153.639)
3.293.560
3.293.560
--
479.556
1.670.212
(1.190.656)
567.524
1.513.637
(946.113)
631.791
2.226.241
(1.594.450)
642.191
1.702.509
(1.060.318)
Deferred charges
Organization and expansion costs
Total
537.839.614
408.720.375
591.925.233
414.192.518
2
Branches
03.31.2009
03.31.2008
L I A B I L I T I E S / S T O C K H O L D E R S' E Q U I T Y
CURRENT LIABILITIES
BB - Consolidated
03.31.2009
03.31.2008
406.214.250
319.233.534
441.266.317
320.433.778
Deposits
Demand deposits
Savings deposits
Interbank deposits
Time deposits
Sundry
(Note 15a)
222.605.644
43.177.478
59.012.517
13.685.324
106.466.759
263.566
170.055.591
44.136.876
48.112.255
5.260.261
72.235.740
310.459
246.704.136
47.276.397
70.566.833
876.399
127.718.846
265.661
168.752.208
44.142.145
48.112.255
4.195.285
71.992.064
310.459
Deposits received under security repurchase agreements
Own portfolio
Unrestricted Portfolio
(Note 16d)
93.849.248
22.452.784
71.396.464
--
91.036.526
34.928.776
55.739.750
368.000
101.500.968
30.104.504
71.396.464
--
90.479.743
34.406.834
55.704.909
368.000
492.989
-492.989
39.192
-39.192
889.847
290.769
599.078
540.886
70.543
470.343
Interbank accounts
Receipts and payments pending settlement
Correspondent banks
1.700.878
1.687.788
13.090
2.994.124
2.981.178
12.946
1.940.195
1.924.039
16.156
3.048.724
3.035.778
12.946
1.588.210
1.535.507
52.703
1.369.073
1.273.412
95.661
1.861.871
1.808.439
53.432
1.369.073
1.273.412
95.661
11.178.456
4.607.460
-6.570.996
1.842.742
--1.842.742
8.251.424
4.607.460
141.509
3.502.455
1.627.651
-118.399
1.509.252
13.556.920
3.531.533
6.110.286
2.970.404
944.697
10.331.448
3.184.305
4.507.179
1.966.645
673.319
13.600.579
3.531.533
6.119.368
3.004.981
944.697
10.339.640
3.184.305
4.507.179
1.974.661
673.495
136.203
136.203
785.990
785.990
2.674.445
2.674.445
1.580.813
1.580.813
2.672.427
2.672.427
1.580.057
1.580.057
58.431.257
2.972.192
15.260.866
911.818
13.151.963
206.868
-419.782
2.134.114
-2.242.848
18.399
21.112.407
39.198.035
2.428.822
10.860.025
1.261.071
11.074.142
432.632
-218.303
----12.923.040
63.843.711
3.155.727
15.380.206
984.316
14.053.745
144.777
3.387.832
419.782
2.134.114
9.109
2.242.848
17.242
21.914.013
42.695.796
2.443.054
10.938.868
1.337.908
11.532.185
158.955
2.656.879
218.303
----13.409.644
Funds from acceptance and issue of securities
Mortgage Notes
Foreign securities
Borrowings
Domestic borrowings - Oficial institutions
Domestic borrowings - other institutions
Foreign borrowings
Local onlendings - official institutions
National Treasury
National Bank for Economic and Social Development (BNDES)
National Industrial Financing Authority (FINAME)
Other institutions
(Note 16b)
(Note 16c)
Foreign onlendings
Foreign onlendings
Other liabilities
Collection and payment of taxes and social contributions
Social and statutory
Taxes and social security contributions
Technical provisions - insurance, pension plan and capitalization
Financial and development funds
Special operations
Other borrowings
Subordinated debt
Hybrid capital and debt instruments
Sundry
(Note 8b)
(Note 11a)
(Note 18c)
(Note 19a)
(Note 18a)
(Note 18e)
1.159 -1.159
0
3
Branches
03.31.2009
03.31.2008
L I A B I L I T I E S / S T O C K H O L D E R S' E Q U I T Y
BB - Consolidated
03.31.2009
03.31.2008
NON CURRENT LIABILITIES
100.766.511
64.079.999
119.635.269
68.351.898
LONG-TERM LIABILITIES
100.548.409
63.950.803
118.800.943
68.351.898
Deposits
Interbank deposits
Time deposits
(Note 15a)
51.799.093
1.030.497
50.768.596
21.340.882
2.394.015
18.946.867
58.298.235
7.529.639
50.768.596
20.998.713
2.051.847
18.946.866
Deposits received under security repurchase agreements
Own portfolio
Unrestricted Portfolio
(Note 15d)
4.953.563
1.030.852
3.922.711
--
9.236.519
3.138.334
6.066.185
32.000
4.951.224
1.028.513
3.922.711
--
9.236.519
3.138.334
6.066.185
32.000
350.000
--350.000
301.389
--301.389
2.184.574
206
21.028
2.163.340
718.678
19.850
19.850
698.828
5.464.424
0
5.464.424
3.597.534
-3.597.534
1.739.326
-1.739.326
1.622.972
74.511
1.548.461
8.390.028
4.609.514
3.780.514
--
7.899.881
4.691.145
3.208.736
--
8.454.588
4.633.155
3.821.236
197
7.910.662
4.691.145
3.219.517
--
2.615.615
2.615.615
2.892.471
2.892.471
103.006
103.006
477
477
491.259
491.259
295.233
295.233
491.259
491.259
295.677
295.677
26.484.427
-2.315.952
1.731.014
-2.114.795
2.326
12.127.754
1.157.200
7.035.386
18.386.894
--835.707
-1.907.086
2.331
10.405.244
887.663
4.348.863
42.578.731
332
3.632.723
0
10.382.942
3.321.559
2.326
12.127.754
1.157.200
11.953.895
27.568.200
4.344
711.864
431.151
7.918.216
1.907.086
2.331
10.405.176
886.744
5.301.288
218.102
129.196
--
--
--
834.326
--
30.858.853
25.406.842
30.858.853
25.406.842
13.779.905
12.458.740
1.321.165
13.211.644
11.890.480
1.321.164
13.779.905
12.458.740
1.321.165
13.211.644
11.890.480
1.321.164
Capital reserves
5.188
34
5.188
34
7.153
5.830
7.153
5.830
15.758.859
10.124.708
15.758.859
10.124.708
123.973
85.359
123.973
85.359
1.214.966
1.979.267
1.214.966
1.979.267
Funds from acceptance and issue of securities
Recursos de letras imobiliárias, hipotecárias, de crédito e similares
Debentures
Foreign Securities
Borrowings
Domestic borrowings - Oficial institutions
Foreign borrowings
Local onlendings - official institutions
National Bank for Economic and Social Development (BNDES)
National Industrial Financing Authority (FINAME)
Other institutions
(Note 16b)
(Note 16c)
Foreign onlendings
Foreign onlendings
Other liabilities
Social and statutory
Taxes and social security contributions
Technical provisions - insurance, pension plan and capitalization
Financial and development funds
Special operations
Subordinated debt
Hybrid capital and debt instruments
Sundry
(Note 8b)
(Note 18c)
(Note 19a)
(Note 18a)
(Note 18d)
(Note 18e)
DEFERRED INCOME
MINORITY INTEREST IN SUBSIDIARIES
STOCKHOLDERS' EQUITY
(Note 21)
Capital
Domestic
Foreign
Revenue reserves
Assets Valuation Adjustments
Retained earnings
Treasury Shares
Total
(31.191)
537.839.614
-408.720.375
(31.191)
591.760.439
--
-414.192.518
The accompanying notes are na integral part of these financial statements
4
In thousands of reais
Quarter ended 03.31.2009
STATEMENT OF INCOME
Branches
1Q2009
1Q2008
INCOME FROM FINANCIAL INTERMEDIATION
Loans
Leases
Securities
Foreign exchange, net
Compulsory deposits
Insurance, pension plans and capitalization
EXPENSES FROM FINANCIAL INTERMEDIATION
Deposits and funds obtained in the money market
Leases
Foreign exchange, net
Insurance, pension plans and capitalization
Allowance for loan losses
(Nota 9b)
(Nota 9b)
(Nota 8c)
(Nota 11b)
(Nota 19e)
(Notas 15c e 15d)
(Nota 11b)
(Nota 19e)
(Notas 9f e 9g)
GROSS FINANCIAL INTERMEDIATION INCOME
OTHER OPERATING INCOME/EXPENSES
Banking service fees
Banking Fees
Personnel expenses
Other administrative expenses
Tax Expenses
Equity in the (earnings)/loss of subsidiary and associated companies
(Nota 20a)
(Nota 20b)
(Nota 20c)
(Nota 20d)
(Nota 20e)
(Nota 24)
(Nota 19e)
(Nota 20f)
(Nota 20g)
OPERATING INCOME
NON-OPERATING INCOME
Income
Expenses
PROFIT BEFORE TAXATION AND PROFIT SHARING
INCOME TAX AND SOCIAL CONTRIBUTION ON NET INCOME
Income tax
Social contribution on net income
Deferred tax credits
PROFIT SHARING
MINORITY HOLDINGS IN SUBSIDIARIES
1Q2009
1Q2008
14.411.368
8.384.529
13.958
5.897.299
(59.953)
-175.535
--
10.954.426
6.973.722
15.444
3.864.849
(448.994)
121.138
428.267
--
15.144.407
8.501.855
478.386
5.729.918
(61.526)
-175.535
320.239
11.243.645
7.000.550
194.420
3.766.846
(448.158)
122.348
428.267
179.372
(11.230.183)
(7.762.381)
(715.672)
(12.576)
(118.286)
-(2.621.268)
(7.321.594)
(4.927.614)
(783.016)
(13.268)
--(1.597.696)
(11.785.638)
(7.760.896)
(716.240)
(340.198)
(115.801)
(198.981)
(2.653.522)
(7.504.510)
(4.909.190)
(719.971)
(145.418)
-(126.750)
(1.603.181)
3.181.185
3.632.832
3.358.769
3.739.135
(2.713.013)
1.708.821
688.408
(3.070.563)
(2.543.139)
(555.475)
313.974
-1.912.985
(1.168.024)
(775.869)
1.687.515
643.027
(1.881.645)
(1.645.093)
(487.606)
786.437
-1.252.017
(1.130.521)
(2.664.359)
2.254.707
688.486
(3.152.482)
(2.691.145)
(667.401)
(85.190)
303.156
2.056.386
(1.370.876)
(852.585)
2.272.164
643.027
(1.932.579)
(1.809.375)
(565.772)
317.793
100.693
1.393.759
(1.272.295)
468.172
(Nota 20h)
16.019
29.502
(13.483)
484.191
(Nota 22)
BB-Consolidated
2.856.963
29.964
45.309
(15.345)
2.886.927
694.410
16.487
33.332
(16.845)
710.897
2.886.550
224.141
245.737
(21.596)
3.110.691
1.393.948
(777.398)
(467.128)
2.638.474
(240.385)
(394.639)
(141.728)
295.982
1.181.654
(982.710)
(543.333)
2.707.697
(462.306)
(558.473)
(198.692)
294.859
(212.662)
(299.076)
(227.093)
(300.919)
--
--
19
--
NET INCOME
1.665.477
2.347.466
1.665.477
2.347.466
Number of shares
2.568.186.485
2.542.181.530
2.568.186.485
2.542.181.530
(Treasury Shares)
Total shares used in calculation of earnings per share
Net income per share
(1.155.094)
--
(1.155.094)
--
2.567.031.391
2.542.181.530
2.567.031.391
2.542.181.530
0,65
0,92
0,65
0,92
The accompanying notes are an integral part of these financial statements
5
In thousands of Reais
Quarter ended in 03.31.2009
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Capital Reserves
EVENTS
Balances at 12.31.2007
Increase on capital with reserves
Increase on capital
Ajustments to market value - Securities and Derivatives
Tax effect on adjusments - Securities and Derivatives
Prescribed interest on own capital
Other events
Donations
Revaluations in subsidiary and associated companies
Realization of revaluation reserves in subsidiary and associated companies
Net income for the period
Apropriantions
Reserves
Dividends
Interest on own capital
Changes in the period
Increase on capital
Treasury Shares
Ajustments to market value - Securities and Derivatives
Tax effect on adjusments - Securities and Derivatives
Prescribed dividens
Other events:
Revaluations in subsidiary and associated companies
Realization of revaluation reserves in subsidiary and associated companies
Net income for the period
Apropriantions
Reserves
Dividends
Interest on own capital
34
---
----
----
--
--
--
--
---
---
---
---
-----
-----
-----
(Nota 21d)
(Nota 21f)
(Nota 21f)
--
--
--
--
(Nota 8e)
(Nota 8e)
(Nota 21d)
(Nota 21f)
(Nota 21f)
Changes in the period
Earnings on
treasury
shares sale
Donations
13.211.644
---
(Nota 8e)
(Nota 8e)
Revenue Reserves
Revaluation
Reserves in
Subsidiary and
Associated
Companies
5.909
---
Capital
Realized
-13.211.644
-13.779.905
-------------13.779.905
--
-34
-5.188
-------------5.188
--
Goodwill or
shares
subscription
Legal
Reserves
Statutory
Reserves
Assets Valuation
Adjustments
Expansion
Reserves
1.348.772
---
4.577.229
---
--
--
--
--
(111.180)
(274.590)
---
---
---
---
41.170
--
80.157
--
-----
-(5)
(74)
--
-----
-----
-----
-----
-----
--
--
--
--
--
--
--
--
--
--
-------------------
-------------------
-5.830
(79)
7.286
-------(133)
-----7.153
-1.348.772
-1.788.916
-------------1.788.916
-4.007.230
(569.999)
9.419.711
-----------(218.474)
-9.201.237
--
--
(133)
--
(218.474)
---
(569.999)
4.768.706
---
Bank
-4.768.706
-4.768.706
-------------4.768.706
--
24.366
---
Subsidiary
and
associated
companies
325.436
---
Retained
Earnings
Treasury
shares
----
Total
----
24.262.096
---
--
--
(385.770)
-714
---
121.327
714
--74
2.347.466
-----
-(5)
-2.347.466
--
--
--
--
--
--
-(45.644)
(70.010)
(31.422)
--99.581
(42.036)
---------26.123
-131.003
(194.433)
230.151
--(132.185)
(116)
---------97.850
(368.987)
1.979.267
1.979.267
-----(2.927)
--133
1.665.477
---(447.717)
1.214.966
57.545
(132.301)
1.214.966
---(31.191)
-------------(31.191)
--
-(569.999)
(368.987)
25.406.842
1.144.746
29.937.250
--(32.604)
(42.152)
(2.927)
---1.665.477
--(218.474)
(447.717)
30.858.853
921.603
In thousands of Reais
Quarter ended on 03.31.2009
STATEMENT OF CASH FLOW
BB- Domestic and Foreign branches
1Q2009
1Q2008
BB - Consolidado
1Q2009
1Q2008
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income
Adjustments to Net Income
Depreciation and amortization
Lease depreciation
Equity in the earnings (loss)
(Profit)/loss on the disposal of property and equipment
(Profit)/loss on the disposal of investements
(Profit)/ loss on the sale of assets
(Gain)/Loss on Capital
Provision/(reversal) for devaluation of other assets
(Excess)/ Insuficiency of depreciation
Changes in foreign exchange
Expenses with civil, labor and tax provisions
Impairment on fixed assets
Changes in provision for Insurance, Pension Plans and Capitalization
Other adjustments
Changes
Interbank and interdepartmental accounts
Loan operations
Lease operations
Other receivables
Other assets
Other liabilities
Change deferred income
Revaluation reserve on investments
Adjustment to market value
Deposits
Money Market
Repurchase agreements
1.665.477
1.620.781
464.731
4.626
(313.974)
(6.851)
3.419
2.433
(3.376)
1.612.410
-(142.636)
2.347.466
(711.728)
197.060
(786.437)
(17.016)
13.795
(2.989)
1.711
1.324
(40.426)
(78.750)
1.665.477
2.786.182
471.944
317.354
85.190
(6.851)
2.733
2.428
(3.376)
--1.667.716
-303.156
(54.112)
2.347.466
(72.774)
323.098
(317.793)
(17.016)
(13.816)
(6.030)
(1.681)
(33.000)
(26.935)
20.399
(3.037.872)
(315.374)
(2.433.771)
(1.905.740)
(6.098)
1.854.793
22.929
10.501.114
(3.420)
(74.756)
(2.037.663)
6.723.156
(357.538)
(19.391.885)
4.021.555
(881.339)
(10.810.979)
1.581
(2.025.552)
(929.652)
1.145.779
6.447
(264.443)
(341.382)
27.520.135
(19.882)
(1.140.941)
(23.685.007)
(8.224.237)
(14.494.350)
(278.860)
(2.790.195)
(386.024)
17.110.521
-
(21.564.897)
(6.288.996)
(846.665)
(10.690.580)
1.814
(4.179.035)
(1.149.857)
13.905.837
106.394
(264.443)
1.468.434
27.446.149
(37.594)
CASH PROVIDED/(USED IN) OPERATIONS
12.216.018
(333.878)
(74.756)
34.161.275
15.321.828
(404.479)
19.566.434
181.255
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowing and onlendings
Securities and Derivatives
Capital increase - Share's incorporation
Tresury Shares
Change in minority interest
Repatriation of funds
Dividends and bonuses proposed
Interest on own capital proposed
976.305
(733.356)
--(218.474)
(447.717)
1.033.951
(70.506)
(368.987)
2.153.560
(731.374)
--834.430
-
1.180.329
(70.968)
(368.274)
CASH PROVIDED/(USED IN) FINANCING ACTIVITIES
(423.242)
594.458
2.256.616
741.088
CASH FLOWS INVESTING ACTIVITIES
Dividends and interest on own capital receivable from subsidiary/associated companies
Disposal in assets not for own use
Disposal of property of equipment in use and leased assets
Disposal of Investments
Applications in assets not for own use
Applications of property of equipment in use and leased assets
Applications in investments
Adjustment Market Value
Expenditures in deferred charges
Expenditures in intangible
(53.893)
(3.387.296)
11.643
69.315
(41.570)
-
CASH PROVIDED/(USED IN) INVESTING ACTIVITIES
(1.449.526)
39.388
Net Cash Variation
At the beginning of the period
At the end of the period
Increase (decrease) in cash and cash equivalents
4.018
1.989
4.740.567
4.454
(20.161)
(152.236)
(2.586.967)
10.343.250
106.392.119
116.735.369
10.343.250
299.968
4.341.294
4.641.262
299.968
87.235
12.668 -40.006
41.979
(31.185)
(1.617.386)
(36.691)
67
(27.449)
(4.792.293)
(7.372)
(365.277)
(112.252)
-
(6.323.115)
(484.833)
15.499.935
106.561.701
122.061.636
15.499.935
437.510
4.352.040
4.789.550
437.510
Financial Statement
In Thousand of Reais
Quarter ended on 03.31.2009
STATEMENT OF ADDED VALUE
BB - Domestic and foreign branches
Description
BB Consolidated
1Q2009
Balance
%
1Q2008
Balance
%
1Q2009
Balance
Gross Financial Intermediation Income
3.181.185
3.632.832
3.358.769
Banking service fees
2.397.229
2.330.542
2.943.193
2.915.191
(1.333.447)
(1.332.957)
(1.230.535)
(1.392.774)
%
1Q2008
Balance
%
ADDED VALUE CALCULATION
Other operating income/expenses
Non-Operating Income, net
Added Value
Equity in the earnings of associated companies / subsidiaries
Gross Added Value
Amortization/Depreciation
Added Value to distribute
3.739.136
16.019
29.964
16.487
224.141
4.260.985
4.660.381
5.087.914
5.485.695
313.974
786.437
4.574.960
5.446.818
(464.730)
(85.191)
317.793
5.002.723
(190.640)
5.803.488
(471.944)
(194.446)
4.110.230
100,00
5.256.178
100,00
4.530.779
100,00
5.609.042
100,00
Labor Remuneration
3.011.208
73,26
1.939.183
36,89
3.096.987
68,35
Salaries and fees
1.975.330
1.188.380
2.028.515
1.220.967
1.984.939
35,39
Benefits, social security and training
823.216
451.727
841.379
463.053
Profit sharing
212.662
299.076
227.093
300.919
DISTRIBUTION OF ADDED VALUE
Remuneration of Governments
(566.456)
(13,78)
969.529
18,45
(231.666)
(5,11)
1.276.637
22,76
Domestic
(583.030)
(14,18)
958.459
18,23
(250.191)
(5,52)
1.264.765
22,55
Social Security Contribution (INSS) on salaries
272.017
241.538
Tax Expense (except income tax and social contribution on net income)
554.465
486.350
Income Tax and Social Contribution
230.571
Abroad
(1.409.512)
16.574
0,40
11.070
282.587
248.559
666.233
564.449
(1.199.011)
0,21
18.525
451.757
0,41
11.872
Tax Expense (except income tax and social contribution on net income)1.010
1.256
1.169
1.323
9.814
17.356
10.549
Remuneration of Shareholders
15.564
1.665.477
Interest on capital of the Union
437.021
Interest on equity to other stock
Retained earnings
Minority interests in retained profits
Distributed Value
40,52
2.347.466
44,66
1.665.458
36,76
2.347.466
250.173
437.021
229.170
118.813
229.170
118.813
999.286
1.978.479
999.286
1.978.479
-4.110.230
-100,00
5.256.178
4.530.779
41,85
250.173
(19)
100,00
0,21
-100,00
5.609.042
100,00
The accompanying notes are an integral part of the financial statements.
8
1 - The Bank and its Operations
Banco do Brasil S.A. is a publicly listed company established under private law, with both public
and private stockholders, and subject to the requirements of Brazilian corporate legislation. Its
purpose is to carry out all the asset, liability and accessory banking operations, to provide banking
services, intermediate and originate financial transactions in various forms, including in foreign
exchange transactions and in supplementary activities, with an emphasis on insurance, private
pension, capitalization, securities brokerage, administration of credit/debit cards, consortiums,
investment funds and management portfolios, and the practice of any activities permitted to the
institutions that are part of the National Finance System. It is also the main financial agent of the
Brazilian Federal Government and is therefore required to carry out the functions attributed to it by
law, specifically those of Art. 19 of Law 4595/1964.
2 - Presentation of the Financial Statements
The Financial Statements have been prepared in accordance with the accounting guidelines derived from
Brazilian corporation law, and observing the rules and instructions issued by the Brazilian Central Bank
(BACEN), Brazilian Securities Commission (CVM), National Council of Private Insurance (CNSP),
Superintendency of Private Insurance (Susep), and National Health Care Agency (ANS).
The preparation of financial statements in accordance with accounting practices adopted in Brazil
requires that Management use discernment in the determination and recording of accounting estimates,
when applicable. Significant assets and liabilities subject to these estimates and assumptions include the
residual value of property, plant and equipment, allowance for loan losses and deferred income tax
recorded in assets, provision for contingencies, appreciation of derivative financial instruments, and
assets and liabilities relating to benefits for employees. The final amounts of transactions involving these
estimates are only known upon their settlement.
They include operations of Banco do Brasil S.A. in Brazil and abroad (BB-Domestic and Foreign Branches),
and the consolidated position of branches and financial and non-financial subsidiaries in Brazil and abroad,
the foreign special purpose entities, as well as investments in subsidiary and associated companies, in
accordance with BACEN recommendation (BB-Consolidated).
For financial statements comparative purposes, the following reclassifications were made on March 31,
2009 figures:
a) Full offsetting of accumulated tax loss carry forwards of Income Tax and Social Contribution negative
basis (Note 22.c), were carried out in order to adjust to the accounting procedures/classifications adopted in
the 2008 second semester, which resulted from the application of Resolution CMN 3535/2008. The
procedure results in a balance increase in Debtors for Escrows (Note 10.b) and in Other Tax and Social
Security Liabilities (Note 29.e) in the amount of R$ 9,608,927 thousand;
b) Service fees (Note 20), aiming at compliance to Bacen Circular no. 3.288/2007. The procedure implies
reclassification from Fee Income to Bank Fee Income in the amount of R$ 643,027 thousand;
c) Amounts referring to the Amounts for Business Relationship, mainly those resulting from payroll
acquisitions in compliance to Bacen Circular no. 3.357/2008. The procedure implies the increase of
Noncurrent Assets - Intangible Assets in the amount of R$ 3,293,560 thousand and reduction of Current
Assets - Other Assets - Prepaid Expenses in the amount of R$ 460,680 thousand and in Noncurrent Assets Other Assets - Prepaid Expenses in the amount of R$ 2,832,880 thousand.
d) To the amounts referring to the financial lease operations, with the Bank in the capacity of lessor and
lessee entity, in conformity with CVM resolution n.º 554, of 11.12.2008, which approved Technical
Pronouncement CPC 06. The procedure implies, in the BB-Consolidated portfolio, an increase of Current
Assets - Lease Operations - Private Sector in the amount of R$ 1,371,281 thousand, of Noncurrent Assets Lease Operations - Private Sector in the amount of R$ 1,900,809 thousand, of Noncurrent Assets Permanent Assets- Fixed Assets for Use in the amount of R$ 150,009 thousand and respective accumulated
depreciation in the amount of R$ 116,600 thousand, and reduction of Noncurrent Assets - Permanent Assets
- Leased Assets in the amount of R$ 4,880,262 thousand and of Current Liabilities - Other Liabilities - Sundry
in the amount of R$ 1,574,763 thousand.
e) The "Deferred Income" Group was discontinued by Provisional Measure n.º 449/08, which ruled that the
balance existing should be reclassified to noncurrent liabilities in an account representing deferred income in
the consolidated accounting information. As Bacen has not yet regulated the alteration, the Bank maintained
the balance of R$ 129,196 thousand, on 03.31.2009 in the accounting information of Branches in the Country
and Abroad, yet reclassified the amounts in the consolidated accounting information to Other Liabilities - –
Sundry, being R$ 218,497 thousand on 03.31.2009 and R$ 229,143 thousand on 03.31.2008.
No adjustments or reclassifications in the statement of income were considered necessary as of March
31, 2008 based on the implementation of Law no. 11638/2007 and the Provisional Measure no. 449/08.
The authorization for conclusion of such financial statements was given by the Executive Board of
Directors, on 05.12.2009.
The balances of foreign branches and subsidiaries included in the financial statements of BB are as follows:
Foreign Branches
03.31.2009
Foreign Branches and
Subsidiaries
03.31.2008
03.31.2009
03.31.2008
Current assets
Non Current assets
Long-term receivables
Permanent assets
Total assets
39,704,163
20,443,230
34,795,407
19,814,811
17,224,400
12,888,281
18,030,160
13,432,600
17,185,096
12,808,963
17,955,601
13,343,085
39,304
79,318
74,559
89,515
56,928,563
33,331,511
52,825,567
33,247,411
Current liabilities
Non Current liabilities
Long-term liabilities
Deferred income
Stockholders' equity
Total liabilities
42,708,064
21,938,270
37,390,900
20,959,868
11,049,175
8,741,636
11,113,608
8,894,500
11,039,859
8,736,639
11,104,292
8,889,503
9,316
4,997
9,316
4,997
3,171,324
2,651,605
4,321,059
3,393,043
56,928,563
33,331,511
52,825,567
33,247,411
(9,076)
92,082
11,620
105,572
Net income
3 - Main Accounting Practices
The practices are related to follow those used by the Banco do Brasil (Domestic and Foreign
branches):
a) Determination of Results
Income and expenses are recognized on an accrual basis. Transactions with post-fixed financial
charges are recorded at the restated value, calculated pro-rata-die based on the variations in the
agreed contractual indices, and the transactions with fixed financial charges are recorded at future
value, adjusted to reflect unearned income or unexpired expenses. Transactions pegged to foreign
currencies are restated up to the balance sheet date using current exchange rates.
b) Cash and cash equivalents
Cash and cash equivalents are represented by assets in domestic currency, foreign currency,
gold in applications, applications with high short-term liquidity, with insignificant risk of change in
value and limits, with a maturity of more than 90 days (Note 6).
c) Short-term interbank investments
Short-term interbank investments are recorded at investment value or purchase price, plus income
accrued up to the balance sheet date.
d) Securities
The securities purchased for the Bank's portfolio are recorded at the actual amount paid, including
brokerage charges and fees, and are classified based on the intention of management, in three
different categories:
Trading Securities: these are securities purchased to be actively and frequently traded. They are
adjusted monthly to market value. Their increases and decreases in value are recorded in income
and expense accounts for the period;
Securities available for sale: these are securities purchased to be traded, which can be traded at any
time. They are adjusted monthly to market value. The increases and decreases in value are
recorded, net of tax effects, in a separate stockholders' equity account;
Securities held to maturity: these are securities that the Bank intends and has the financial capacity
to hold to maturity. The financial capacity is supported by a cash flow projection that does not
consider the possibility of sale of these securities. These securities are not adjusted to market value
but are held at cost plus accumulated interest.
The mark-to-market methodology used for securities was established following consistent and
verifiable criteria, which consider the average price of trading on the day of calculation or, if not
available, the daily adjustment of future market transactions reported by Andima, BM&F, Bovespa or
BACEN or the net expected realizable value obtained through the use of curves of future interest
rates, foreign exchange rates, price and currency indices.
Income accrued on the securities, irrespective of the category in which they are classified, is
appropriated on a pro-rata-die basis on the accrual basis of accounting up to the date of maturity or
of final sale, on an exponential or straight-line method, based on the contractual remuneration and
purchase price, and recorded directly in income for the period.
Losses with securities classified as available for sale and held to maturity, if judged not to be
temporary, are recorded directly in expense for the period and a new cost basis for the asset is
determined.
Upon sale, the difference between the sale amount and the cost of purchase plus accrued income is
recorded on the date of the transaction as a gain or loss on securities.
e) Derivative Financial Instruments
Derivative financial instruments are recorded at market value at each monthly trial balance and
balance sheet date. Increases or decreases in value are recorded in income or expense accounts of
the respective financial instruments.
The mark-to-market methodology used for derivative financial instruments was established following
consistent and verifiable criteria, which consider the average price of trading on the date of
calculation or, if not available, pricing models that estimate the expected net realizable value,
according to the characteristics of the derivative.
Derivative financial instruments used to offset, in whole or in part, the risks arising from exposure to
variations in financial asset or liability market values or future cash flows are considered hedge
instruments and are classified according to their nature:
Market Risk Hedge - the increases or decreases in the value of the derivative financial instruments,
as well as of the item hedged, are recorded in income accounts for the period;
Cash Flow Hedge - the effective amount of the increases or decreases in the value of the derivative
financial instruments classified in this category are recorded, net of tax effects, in a separate
Stockholders' Equity account. The effective amount is that in which the variation of the item hedged,
directly related to the corresponding risk, is offset by the variation in the derivative financial
instrument used as the hedge, considering the accumulated effect of the transaction. Other
variations in these instruments are recorded directly in income for the period.
f) Loan and lease operations, advances on foreign exchange contracts, Other receivables with
loan characteristics and allowance for possible loan losses
Loan operations, advances on foreign exchange contracts, other receivables with loan characteristics
and allowance for possible loan losses are classified according to Management's judgment with
respect to the level of risk, taking into consideration the economic panorama, past experience and
specific risks in relation to the operation, to obligators and guarantors, observing the parameters
established by CMN Resolution 2682/1999, which requires the periodic analysis of the portfolio and its
rating using nine levels, ranging from AA (minimum risk) to H (maximum risk), as well as the rating of
operations more than 15 days overdue as ‘abnormal operations’.
Income from loans overdue for more than 60 days, regardless of their level of risk, will only be
recognized as income when effectively received.
Operations rated at level H continue in this status for 180 days, at which point they are written off
against the existing provision and monitored, for five years, in off-balance sheet accounts.
Renegotiated operations are maintained, at a minimum, at the same level at which they were rated.
The renegotiations of loans that had already been written off against provision that that were in
memorandum accounts are rated as H and any gains from the renegotiation are only recognized as
income when effectively received.
Allowance for possible loan losses is considered sufficient by management to cover future losses
from the current portfolio and satisfies the minimum requirement established by the aforementioned
CMN Resolution 2682/1999, as shown in Note 9.e.
g) Income and Social Contribution Taxes
Corporate income tax is calculated at the basic rate of 15% plus a surcharge of 10%. As of May 1,
2008, Social Contribution is being calculated using the rate of 15% for financial companies and
companies from the insurance business and 9% for other companies (up to April 30, 2008 at the rate
of 9% for all of the companies).
Tax credits are created by applying the current tax rates to the difference between their respective
fiscal and accounting bases. The Bank follows the criteria for creating, maintaining, and writing off
these tax credits as specified by CMN Resolution 3059/2002, and amended by CMN Resolution
3355/2006, and tax credits recognized are supported by a realization study.
The Bank records IRPJ, CSLL, Pasep and Cofins tax credits on the negative mark-to-market
adjustments of securities and derivative financial instruments recorded in the income and in a separate
account in Stockholders' equity.
IRPJ, CSLL, Pasep and Cofins deferred tax liabilities have been recorded on the positive mark-tomarket adjustments of securities and derivative financial instruments recorded in income and in a
separate account in Stockholders' Equity.
h) Prepaid Expenses
Refer to the application of funds in prepayments, which will give rise to benefits or the rendering of
services in subsequent periods.
i) Permanent assets
Significant investments in Brazil and abroad are recognized using the equity method of accounting, in
conformity with BACEN and CVM rules and instructions, and are classified in the investment account in
permanent assets.
The statements of the overseas branches and subsidiaries are adapted to accounting criteria in force
in Brazil and translated into Brazilian Reais using current exchange rates, in conformity with BACEN
Circulars 2397, of 12.29.1993 and 2571, of 5.17.1995, and their impacts are recorded in income for
the period. Other permanent investments are stated at cost, restated for inflation up to December 31,
1995, and, if necessary, are adjusted to market value through the formation of provision, according
to the current rules.
Property and equipment is stated at cost less depreciation calculated using the straight-line method
at the following annual rates: buildings and improvements - 4%; vehicles - 20%; others - 10% (see
Note 13).
Deferred assets are recorded at acquisition cost, net of accrued amortizations. It is composed mainly
of expenditures in third-party property as a result of opening facilities, which are amortized according
to rates based on rental terms, and expenditures on the acquisition and development of information
systems, which are amortized at a 20% annual rate.
The Intangible Assets are rights which are intangible assets subject to the maintenance of the
company or held for that purpose, including the goodwill acquired. An asset meets the criteria for
identification of an intangible asset, as CVM Deliberation No. 553/2008, where: is inseparable, or can
be separated from the entity and sold, transferred or licensed, rented or exchanged individually or
with a contract, asset or liability relates, regardless of the intention to use the body, or the result of
contractual rights or other legal rights, regardless of whether such rights are transferable or
separable from the entity or other rights and obligations.
The assets of the property, the intangible and deferred recoverable values are tested at least
annually, if there are indicators of loss of value.
j) Reduction of the recoverable amount of non-financial assets – impairment
It recognized an impairment loss if the accounting value of an asset or its cash-generating unit
exceeds its recoverable amount. A cash-generating unit is the smallest identifiable group of assets
that generates cash contributions, which are largely independent of the input of cash forested from
other assets or groups of assets. Impairment losses are recognized in income in the period.
From 2008, the values of non-financial assets, excluding tax credits and other securities and assets,
are reviewed at least annually to determine whether there is any indication of impairment loss.
k) Benefits for employees
Short-term benefits for existing employees are recognized on the accrual basis as the services are
provided. Post-employment benefits, comprising supplementary retirement benefits, medical
assistance and other benefits for which the Bank is responsible, were calculated at December 31,
2008 in accordance with criteria established by CVM Deliberation 371/2000 (Note 26.b).
l) Operations related to the activities of insurance, pension and capitalization
Determination of Results
Insurance premiums and selling expenses are recorded upon the issuance of policies or billings and
are recognized in results, according to the elapsed coverage period. Insurance revenue and the
corresponding selling expenses, related to current risks without the issuing of respective policies are
recognized in results at the beginning of the coverage, on estimated basis.
Income from insurance premiums covering future risks is deferred over the period of validity of the
insurance policies, by means of the formation of provision for unearned premiums, based on the net
retention of earned premiums issued.
Operations of accepted coinsurance, retrocession and DPVAT are recorded based on information
received from similar companies, IRB Brasil Resseguros S.A. and the lead insurer, respectively.
The revenue from pension plans, life insurance with living benefits and capitalization plans are
recognized in results when effectively received, as a contra-entry to the recognition of technical
provisions. The selling costs are deferred upon the issuance of the contract or policy and allocated to
results on a straight-line basis, over the average estimated period for recovery.
Other income and expenses are determined using the accrual basis of accounting.
Technical Provisions
Rules and procedures for the formation of technical provisions are regulated by Resolutions 36/2000,
162/2006, and 181/2007 of the National Council of Private Insurance - CNSP and Resolution
75/2004 of National Health Care Agency (ANS), and calculated in accordance with the specific
actuarial technical notes approved by the Superintendency of Private Insurance - Susep and
National Health Care Agency - ANS.
Insurance
Provision for Unearned Premiums (PPNG) represents the portions of premiums that will be allocated
to income over the course of the insurance contracting periods, as calculated by the pro rata method.
Provision for Unearned Premiums of Risks Effective Yet Not Issued (PPNG-RVNE) represents the
adjustment of PPNG given the existence of risks assumed by the insurance company the policy
covering which has not yet been formally issued.
Provision for Premium Insufficiency (PIP) represents the need for adaptation of premiums to be
allocated due to the expectation of claims with provision for probable payments.
Provision for Unsettled Claims (PSL) represents the forecast of probable indemnifications, whether
judicial or not, net of recoveries, determined based on notices received up to the balance sheet date,
adjusted by the estimate of claims Incurred But Not Reported (IBNR).
Provision for Claims Incurred but Not Reported (IBNR) represents the expected claims, referring to
the accounting period under analysis, which will be received by the insurance company.
The objective of the Supplementary Provision for Premiums (PCP) is to adjust the technical
provisions of PPNG premium and PPNG-RVNE, to give the Bank an additional margin of protection,
at the time of calculation, with a sum higher than or equal to the average amount determined daily. It
is classified under "Other Provisions".
The abovementioned provisions, with the exception of Provision for Unearned Premiums (PPNG)
and Provision for Insufficiency of Premiums (PIP), are estimated according to methodologies
described in specific Actuarial Technical Notes, submitted to the approval of ANS and Susep.
Pension
The mathematical reserves related to pension plans represent the current amount of the liabilities in
the form of survivorship income, pension and annuity, determined through calculation and actuarial
assumptions in the financial regimes of capitalization, allocation of hedge capital and simple
allocation, respectively.
Particularly for the pension and insurance plans from the categories of PGBL and VGBL, the
mathematical provision for future benefit payments represents the sum of premiums and
contributions transferred by the participants, net of the loading rate, plus the financial income earned
from the investments of resources.
The provisions for shortfall of contributions and of premiums are formed to account for the impacts
resulting from the tendency for a higher survival rate of participants and their calculation is performed
using the "AT 2000 Male/Female Suavizada" mortality table and related assumptions, considering all
the plans sold.
The provision for financial fluctuation is formed to account for the potential impacts of unfavorable
variations in the future re-investment rates of funds earmarked for the payment of benefits and
redemptions to participants, considering the minimum remuneration guaranteed in a contract.
Capitalization
The mathematical reserve for redemption is calculated on the nominal value of the securities,
restated based on actuarial technical notes approved by Susep.
Provisions for redemption of overdue and prepaid securities are formed by securities with finalized
and rescinded capitalization periods, restated in the period between the date of the right to
redemption and effective settlement.
The amounts earmarked for the formation of the provision for unrealized prize draws are calculated
on the nominal value of the securities, based on actuarial technical notes approved by Susep, and
the write-off of the provision for unrealized prize draws recorded by the amount equivalent to the
lapsed risk, i.e., the balance of provision for unrealized prize draws represents the defrayed amounts
of prize draws not yet executed.
Provision for prize draws payable is formed by the amounts of securities payable from prize draws,
restated for the period between the date of the draw and the effective settlement.
m) Contingent Assets and Liabilities and Legal Obligations
The recognition and disclosure of contingent assets, liability contingencies and legal obligations are
in accordance with the criteria defined in CVM Resolution 3535/2008 (Note 29).
Contingent assets are only recognized in the financial statements upon the existence of evidence
guaranteeing their realization.
Contingent liabilities are recognized in the financial statements when, based on the opinion of the
legal counsel and of Management, the risk of loss of a lawsuit or administrative proceeding is
considered probable, with a probable outflow of financial resources for the settlement of obligations
and when the sums involved are measurable with sufficient assurance.
Provisions are made taking into consideration the possibility of successful applications of the author
who moves lawsuit against the Bank and its wholly owned subsidiaries.
The provisions for labor claims are recorded considering, also, the jurisprudence applicable to each
claim.
Contingent liabilities considered as possible losses are not recognized in the balance sheet, but must
be disclosed only in the explanatory notes, while those stated as remote do not require provisioning
or disclosure.
Legal obligations (fiscal and social security) are derived from tax obligations arising from legislation,
and, regardless of the probability of success of lawsuits in progress, have their amounts recognized
in full in the financial statements.
4 - Consolidated Financial Statements
The consolidated financial statements include the branches and subsidiaries in the country and abroad,
and the direct and indirect subsidiaries and affiliates listed below:
Total Share
03.31.2009
Financial Activity - Domestic
03.31.2008
Activity
BB Gestão de Recursos–Distribuidora de Títulos e Valores Mobiliários S.A.
(1) (10)
(1) (10)
Asset Management
Investment Bank
100%
100%
100%
100%
BB Leasing S.A. – Arrendamento Mercantil
(1)
(1)
(10)
(10)
Banking
Leasing
100%
100%
100%
100%
BESC Financeira S.A. – Crédito, Financiamento e Investimentos
(4)
(4)
(10)
(10)
Asset Management
Loans and Financing
99.62%
99.58%
---
BESC Leasing S.A. – Arrendamento Mercantil
Banco Nossa Caixa S.A.
(4) (10)
(1) (10)
Leasing
Banco Múltiplo
99%
71.25%
---
Financial Activity - Abroad
Banco do Brasil – AG. Viena
(1)
(1)
(10)
(10)
Banking
Leasing
100%
100%
100%
100%
BB Securities LLc.
BB Securities Ltd.
(1)
(1)
(10)
(10)
Broker
Broker
100%
100%
100%
100%
Brasilian American Merchant Bank – BAMB
BB USA Holding Company, Inc
(1)
(1)
(10)
(10)
Banking
Holding
100%
100%
100%
100%
Cia. de Seguros Aliança do Brasil
(5)
(6)
(9)
(10)
Insurance company
Capitalization
100%
71.25%
70%
--
Brasilveículos Companhia de Seguros
Brasilcap Capitalizações S.A.
(3)
(3)
(9)
(9)
Insurance company
Capitalization
70%
49.99%
70%
49.99%
Brasilprev Seguros e Previdência S.A.
(3)
(9)
Insurance Company/Pension 49.99%
49.99%
Brasilsaúde Companhia de Seguros
(3)
(9)
Insurance Company/Health 49.92%
Seguradora Brasileira de Crédito à Exportação – SBCE
(3)
(9)
Ativos S.A.
(5)
(10)
(5)
(5)
(10)
(10)
BB Tur Viagens e Turismo Ltda.
(5)
(5)
(10)
(8)
Broker
Tourism
BB Money Transfers, Inc
Cobra Tecnologia S.A.
(5)
(5)
(10)
(9)
Nossa Caixa S.A. – Administradora de Cartões de Crédito
(6)
Cia. Brasileira de Soluções e Serviços CBSS – Visavale
Cia. Brasileira de Meios de Pagamento CBMP – Visanet
(3)
(3)
Kepler Weber S.A.
Neoenergia S.A.
Companhia Brasileira de Securitização – Cibrasec
Tecnologia Bancária S.A. – Tecban
Insurance, Pension Plan and Capitalization
Insurance company
49.92%
12.09%
12.09%
Credit Acquisition
100%
100%
Service Rendering
Consortiums
100%
100%
100%
100%
100%
100%
100%
100%
Service Rendering
IT
100%
99.39%
100%
99.39%
(10)
Service Rendering
71.25%
--
(9)
(10)
Service Rendering
Service Rendering
40.35%
31.63%
40.35%
31.67%
(2)
(2)
(9)
(10)
Industry
Energy
17.67%
11.99%
17.71%
11.99%
(3)
(3)
(9)
(9)
Credit Acquisition
Service Rendering
9.09%
8.96%
9.09%
8.96%
Other activities
Dollar Diversified Payment Rights Finance Company
(7) (10)
Credit Acquistion
--(1) Companies financial control.
(2) non-financial corporations, together with control, including proportional consolidation as recommended by the Central Bank, based on
contained in paragraph 2 of Article 22 of Law No 6385/1976, complemented by Law No 9447/1997, with the wording amended by Decree No.
3995/2001.
(3) Non financial companies included in consolidation proportion as recommended by the Central Bank, based on contained in paragraph 2 of
Article 22 of Law No 6385/1976, increased by Law No. 9447/1997, as amended by Editor Decree No. 3995/2001.
(4) Financial Companies controlled by Besc SA which was incorporated by the Bank of Brazil on 09.30.2008 (Note 6).
(5) Companies financial control – BB Banco de Investimento acquired the total shares of Aliança do Brasil as of 08.29.2008.
(6) Non financial companies controlled by Bank of Nossa Caixa wich was acquired by the Bank of Brazil on 03.12.2009.
(7) Special Purpose Entity.
(8) Data for consolidation related to January/2009.
(9) Data for consolidation related to February/2009.
(10) Data for consolidation related to March/2009.
The company Brasil Aconselhamento Financeiro S.A. - BAF was not included in consolidation,
according to the provisions of Article 23 of CVM Instruction 247/1996, because it is under winding up
process.
We present below, for comparative purposes, the consolidated balances encompassing the Financial
Conglomerate (branches and financial subsidiaries in the country and abroad) and the Non-Financial
Subsidiaries/Associated Companies presented in the financial statements of the Bank.
Balance Sheet
Financial
Current and Long-Term Assets
Cash and cash equivalents
Securities
Non-Financial
03.31.2009
03.31.2008
556,344,693
385,121,742
7,364,593
4,668,295
131,709,813
03.31.2009
Consolidated
03.31.2008
03.31.2009
03.31.2008
18,415,812
14,219,002
577,351,134
406,228,493
206,623
151,565
7,515,942
4,789,550
72,650,835
248,438
67,084
131,796,199
72,688,803
96,071,455
70,090,713
14,551,938
11,901,058
110,593,581
81,489,597
Loans and leasing operations
205,350,254
149,537,305
--
--
208,622,344
150,862,795
Other receivables
115,848,578
88,174,594
3,408,813
2,099,295
118,823,068
96,397,748
Permanent Assets
20,848,249
7,463,992
962,538
1,126,389
14,574,099
7,964,025
Investments
2,562,814
2,427,182
787,970
1,024,147
960,949
1,055,324
8,306,849
4,461,420
130,822
125,282
3,590,818
2,972,950
Intangible
9,377,151
--
13,390
--
9,390,541
3,293,560
Deferred charges
601,435
575,390
30,356
(23,040)
631,791
642,191
Total Assets
577,192,942
392,585,734
19,378,350
15,345,391
591,925,233
414,192,518
545,285,427
367,049,696
17,056,866
13,039,227
560,232,054
388,785,676
Deposits
305,178,371
190,103,347
--
--
305,002,371
189,750,921
32,173,368
21,308,492
226,283
243,159
32,314,876
21,501,402
207,933,688
155,637,857
16,830,583
12,796,068
222,914,807
177,533,353
Deferred income
218,457
129,196
--
--
--
--
Minority Interest in Subsidiaries
830,205
--
--
--
834,326
--
30,858,853
25,406,842
2,321,484
2,306,164
30,858,853
25,406,842
577,192,942
392,585,734
19,378,350
15,345,391
591,925,233
414,192,518
Other liabilities
Stockholders' equity
Total Liabilities
Income Statement
Financial
1Q2009
Income from Financial Intermediation
Expenses from Financial Intermediation
Gross Financial Intermediation Income
Other Operating Income / Expenses
Operating Net income
Non-operating Net income
Non-Financial
1Q2008
1Q2009
Consolidated
1Q2008
1Q2009
1Q2008
14,797,578
11,045,999
359,123
207,826
15,144,407
11,243,645
(11,571,834)
(7,382,648)
(198,707)
(126,771)
(11,785,638)
(7,504,510)
3,739,135
3,225,744
3,663,351
160,416
81,055
3,358,769
(2,684,114)
(739,492)
281,933
206,302
(2,664,359)
(852,585)
541,630
2,923,859
442,349
287,357
694,410
2,886,550
16,015
32,536
472
192,190
16,487
224,141
557,645
2,956,395
442,821
479,547
710,897
3,110,691
1,323,402
(308,884)
(141,747)
(153,422)
1,181,654
(462,306)
Profit Sharing
(215,568)
(300,045)
(11,525)
(874)
(227,093)
(300,919)
(2)
--
--
--
19
--
1,665,477
2,347,466
289,549
325,251
1,665,477
2,347,466
Income before taxes
Minority Interest Sharing
Net Income
Balances have been eliminated accounting assets and liabilities and income and expenditure relating
to transactions between outside agencies, businesses and consolidated Bank of Brazil SA.
5 – Acquisition of Banco Nossa Caixa. S.A.
On 12.19.2008, Banco do Brasil and the State Government of São Paulo entered into a contract of sale of
shares for acquisition of the controlling interest of Banco Nossa Caixa S.A., by means of the sale of
76,262,912 common shares, belonging to the State, equivalent to 71.2499527144% of the total capital stock
and of the voting capital in the same proportion, to Banco do Brasil. The transaction was authorized by the
São Paulo State Legislature, under the terms of State Law n.º 13,286 of 12.18.2008, and approved by the
Extraordinary General Meeting of Shareholders of Banco do Brasil on 12.23.2008.
The price stipulated for sale was R$ 5,386,496 thousand (R$ 70.63 per share), payable in 18 monthly
installments of R$ 299,250 thousand, calculated with a basis on an economic/financial evaluation,
considering the prospects of future profitability and the discounted cash flow of Banco Nossa Caixa, in
conformity with article 224 of Law n.º 6,404/1976.
In compliance with article 254-A of Law n.º 6,404/1976 and with the Regulation of the New Market of
Bovespa, there will be a Public Offering of Acquisition of Shares, ensuring that the minority shareholders of
Nossa Caixa are entitled to sell their shares, at least, under the same terms offered to the State Government
of São Paulo. On 01/19/2009, Banco do Brasil S.A. filed with the Securities Commission - CVM a request of
registration of a Public Offering for Acquisition of Shares of Banco Nossa Caixa.
On 3.10.2009, the Central Bank of Brazil sent correspondence to Banco do Brasil communicating the
approval of the transfer of controlling interest from Nossa Caixa to Banco do Brasil.
On 3.16.2009, after the fulfillment of all the precedent conditions for the closing of the operation of
acquisition of the controlling interest of Banco Nossa Caixa, there was the payment to the Statement
Government of São Paulo of the first installment, in the amount of R$ 310,931 thousand (corrected by the
Selic rate since 11.20.2008, pursuant to the contract of sale of shares and other agreements) and the
transfer of shares belonging to the State Government of São Paulo to Banco do Brasil, which became their
controlling shareholder.
The initial record of the transaction involved the accounting, at Banco do Brasil, of the amount of the
investment and of the goodwill paid to the State Government of São Paulo, and at Nossa Caixa, of the
amount of the adjustments resulting from the adaptation of accounting criteria and estimates to those
adopted by the new controlling shareholder, in conformity with CVM Resolution n.º 506/2006. The amounts
of the investment and of the goodwill were determined with a basis on the adjusted balance sheet of Nossa
Caixa on December 31, 2008, restated up to March 31, 2009, by the existing differences of criteria.
In view of the complexity of the subject and the time required to identify and measure all the differences of
criteria that exist, it was defined that the initial recording would be performed with a basis on the "best
estimate" possible under the circumstances, and that the final recording of all the differences would be
performed over time, preferably by June 30, 2009 and necessarily by the date of takeover of Nossa Caixa by
Banco do Brasil, having as a contra entry the adjustment of the initial goodwill of the transaction.
In this manner, the total amount of goodwill paid, shown in the chart below, as a result of the expectation of
future profitability (goodwill), could not be allocated to the cash generation units, due to the non-conclusion,
to date, of the study by a specialized company. The aforesaid allocations will be performed on a timely basis,
as permitted by CVM Resolution n.º 527/2007.
We present below the calculation of the investment and of the goodwill amounts, after the adjustments
made at Banco Nossa Caixa, for equalization of accounting criteria:
Shareholders' Equity of Banco Nossa Caixa on 12.31.2008
Increase of Shareholders' Equity in the 1st quarter/2009 (prior-year adjustment and mark to market of
securities)
Result of the 1st quarter/2009, before the adjustments for equalization of accounting practices
(1)
Adjustments made at Nossa Caixa for equalization of accounting practices with Banco do Brasil
Adjusted Shareholders' Equity of Nossa Caixa on 3.31.2009
Amount of the Investment in Banco do Brasil (71.2499527144%)
Price for the acquisition of shares, restated on 3.16.2009
- Price for the acquisition of shares, pursuant to the contract signed on 11.20.2008
- Restatement of the price for the acquisition of shares, on 3.16.2009 (Selic rate)
Amount of goodwill for the acquisition
R$ thous
3,180,682
29,184
(35,127)
(288,135)
2,886,604
2,056,704
5,596,755
5,386,496
210,259
3,540,051
(1) Adjustments made in the financial statements of Nossa Caixa, resulting from standardization of accounting criteria and estimates to those
adopted by the new controlling shareholder, Banco do Brasil, in conformity with CVM Resolution 506/2006, which approves the Pronouncement of
Ibracon about accounting practices, changes in the accounting estimates and correction of errors. The responsibility for the obligations resulting
from these adjustments was under discussion with the former controlling shareholder of Nossa Caixa. With the change of controlling interest, on
03.16.2009, this responsibility was formally assigned to Banco do Brasil. Adjustments included: reinforcement of provision for loan losses, civel,
labour and tax contingencies; and the liabilities with health and pension plans. In addition, were recorded tax credits on temporary differences originated
on the adjustments performed as well as on tax credit not recorded in prior years.
The equity interests of Banco Nossa Caixa S.A. are as follows:
Nossa Caixa S.A. – Administradora de Cartões de Crédito
Mapfre Nossa Caixa Vida e Previdência S.A.
Subsidiary
Subsidiary
Associated company
100%
100%
49%
We present below, for comparative purposes, the consolidated balances involving the Economic/Financial
Group, with the position prior to and subsequent to the acquisition of Bank Nossa Caixa:
Balance Sheet
R$ thous
Current Assets and Long-Term Receivables
Cash and cash equivalents
Securities and Derivatives
Loan and lease operations
Other receivables
Permanent Assets
Investments
Property, plant and equipment
BB-Consolidated
without Nossa
Caixa
Nossa Caixa
BB-Consolidated
including Nossa
Caixa
03.31.2009
524,915,055
7,122,853
125,229,233
88,007,462
195,994,607
108,560,900
9,213,034
890,039
3,339,065
03.31.2009
52,436,079
393,089
6,566,966
22,586,119
12,627,737
10,262,168
1,821,015
70,910
251,753
03.31.2009
577,351,134
7,515,942
131,796,199
110,593,581
208,622,344
118,823,068
14,574,099
960,949
3,590,818
Intangible assets
Deferred
Total Assets
4,458,884
525,046
534,128,089
1,391,607
106,745
54,257,094
9,390,541
631,791
591,925,233
Deposits
Other liabilities
Deferred income
Minority Interest in subsidiaries
Total Liabilities
503,269,339
268,337,392
32,013,923
202,918,024
-(103)
30,858,853
534,128,089
51,370,136
36,664,979
300,953
14,404,204
354
-2,886,604
54,257,094
560,232,054
305,002,371
32,314,876
222,914,807
-834,326
30,858,853
591,925,233
The balance of goodwill recorded in Intangible Assets (R$ 3,540,051 thousand) and the balance of the
amounts payable to the State Government of São Paulo for the acquisition of Nossa Caixa, recorded in
Other Liabilities (R$ 5,596,755 thousand) were excluded from "BB-Consolidated without Nossa Caixa".
On 3.31.2008, Banco Nossa Caixa had R$ 51,439,003 thousand of Assets and R$ 2,867,284 thousand of
Shareholders' Equity. The Net Earnings of the 1st quarter/2008 were R$ 114,851 thousand.
6 - Cash and cash equivalents
BB - Domestic and
Foreign branches
Total Cash
Local currency
Foreign currency
Investments in Gold
Interbank Aplications (1)
Total cash and cash equivalents
BB-Consolidated
03.31.2009
03.31.2008
03.31.2009
03.31.2008
6,961,113
6,107,142
853,971
-109,774,256
116,735,369
4,641,262
4,282,096
359,166
-50,771,916
55,413,178
7,515,942
6,644,059
861,379
10,504
114,545,694
122,061,636
4,789,550
4,403,988
378,247
7,315
50,771,916
55,561,466
(1) Refer to operations whose maturity of application is less than or equal to 90 days.
7 - Interbank Investments
a) Breakdown
BB - Domestic and
Foreign branches
BB-Consolidated
03.31.2009
03.31.2008
03.31.2009
03.31.2008
Repurchase agreements
98,620,483
57,997,544
103,356,185
57,963,384
Sales pending settlement - own operations
Financial Treasury Bills
Federal Treasury Bills
Federal Treasury Notes
Others - Domestic
Others - Abroad
Sales pending settlement - financed operations
28,409,241
23,197,773
199,999
4,548,587
-462,882
70,211,242
60,635,787
-9,575,455
-46,371,643
42,429,136
3,942,507
914,980
5,366
909,614
---57,082,564
14,610,838
38,958,352
3,441,246
72,128
23,839,237
16,822,659
7,016,578
33,144,943
25,567,750
2,213,515
4,900,796
-462,882
70,211,242
60,635,787
-9,575,455
-28,440,014
24,487,552
3,952,462
952,948
5,366
909,614
-37,968
-57,010,436
14,610,838
38,958,352
3,441,246
-14,725,420
7,708,841
7,016,578
Total
144,992,126
81,836,781
131,796,199
72,688,803
Current Assets
136,818,450
75,297,475
123,016,163
71,672,378
8,173,676
6,539,306
8,780,036
1,016,425
Others
Interbank deposits Investments
Investments in national currency
Investments in foreign currency
Non Current Assets
b) Income from short-term interbank deposits
BB - Domestic and
Foreign branches
Income from repurchase agreements
Own operations
Financed operations
Income from interbank deposits(1)
Total
BB-Consolidated
1Q2009
1Q2008
1Q2009
1Q2008
3,159,715
1,383,162
3,159,715
1,381,805
997,785
57,770
2,161,930
1,325,392
2,161,930
1,324,516
446,365
219,111
221,071
97,892
3,606,080
1,602,273
3,380,786
1,479,697
997,785
57,289
(1) Refer to income on the applications in Interbank deposits in national currency. The rents on applications in Interbank foreign currency
deposits totaled R$25,161 thousand at 03.31.2009 (R$123,016 thousand at 03.31.2008), which are recorded under Other Operational
Income.
8 - Securities and Derivative Financial Instruments
a) Securities
BB - Domestic and Foreign branches
03.31.2009
03.31.2008
Total
Market Value
Maturity in days
With
no maturity
1 – Trading securities
Domestic
Debentures
Shares in listed companies
2 - Securities available for
sale
Domestic
Debentures
Agricultural debt securities
Shares in investment funds
Quota of Funds for Social
Development
Shares in closed companies
Rural Product Bills
(Commodities)
Others
Cost
0-30
31-180
181-360
Total
Market
Value
over 360
Unrealized
gain (loss)
Cost
Market
Value
2,000
2,000
----2,000
135,678
135,678
-135,678
----
1,188,633
1,188,633
3,410
1,184,607
-616
--
4,620,346
4,620,346
411,675
4,199,465
9,206
---
12,557,221
12,557,221
4,897,528
817,275
6,795,703
46,715
--
18,013,832
18,013,832
5,314,175
6,233,438
6,415,421
48,798
2,000
18,503,878
18,503,878
5,312,613
6,337,025
6,804,909
47,331
2,000
--------
17,724,873 17,592,117
17,724,873 17,592,117
3,251,470 3,254,387
11,798,920 11,739,287
2,629,327 2,553,264
44,241
44,225
915
954
Unrealized
gain (loss)
--------
13,023
1,899,084
8,131,055
4,070,777
23,270,491
37,255,709
37,384,430
128,721
34,084,473 34,120,898
36,424
13,022
-----413
1,771,594
353
---5
--
7,899,690
3,097,474
2,207,761
675,766
-434
--
4,013,481
2,736,844
182,138
969,688
5,277
1,014
--
20,771,292
17,862,608
76,579
2,020,495
733,096
9,460
--
34,420,270
23,695,514
2,457,302
3,623,707
736,696
12,152
413
34,469,079
23,697,279
2,466,478
3,665,949
738,373
10,913
413
48,809
1,765
9,176
42,242
1,677
(1,239)
--
32,712,275 32,640,194
20,575,897 20,624,929
4,109,035 4,067,493
6,736,038 6,661,575
353,667
353,687
11,533
9,668
1,483
1,483
(72,082)
49,031
(41,542)
(74,463)
20
(1,865)
--
552
--
--
--
--
2,078
552
(1,526)
1,545
383
(1,162)
10,689
1,368
---
---
---
---
7,364
1,368
10,689
1,368
3,325
--
7,364
17,713
10,349
--
84,653
347,570
118,520
11
546,573
550,754
4,181
519,616
518,637
(979)
--
1,686,583
1,570,685
--
69,043
3,337,103
3,326,311
(10,792)
396,097
384,626
(11,471)
Abroad
Brazilian foreign debt
securities
Foreign government securities
1
127,490
231,365
57,296
2,499,199
2,835,439
2,915,351
79,912
1,372,198
1,480,704
108,506
--
--
--
57,296
2,452,350
2,430,863
2,509,646
78,783
1,363,184
1,471,597
108,413
-1
127,490
--
231,365
--
---
46,849
--
404,576
--
405,704
1
1,128
1
9,014
9,106
92
3 - Securities held to maturity
Domestic
-----
13,572
1,743
1,743
--
36,029
36,029
8,716
27,313
3,575,871
3,574,222
3,574,222
--
11,609,988
11,424,464
11,406,268
18,196
15,217,739
15,037,742
14,989,492
48,250
15,235,460
15,036,458
14,990,949
45,509
-----
16,371,173 16,399,409
15,991,691 16,002,727
15,972,198 15,987,643
19,493
15,084
-----
Abroad
Eurobonds
Brazilian foreign debt
securities
---
11,829
--
---
1,649
--
185,524
--
179,997
--
199,002
--
---
379,482
13,912
396,682
13,912
--
--
--
1,649
185,524
168,168
187,173
--
348,549
365,749
--
--
11,829
--
--
--
11,829
11,829
--
17,021
17,021
--
15,023
2,048,334
9,355,717
12,266,994
47,437,700
70,487,280
71,123,768
128,721
68,180,519 68,112,424
36,424
Total
03.31.2009
03.31.2008
Market Value
Maturity in days
---
Total
0-30
Total by portfolio
15,023
2,048,334
9,355,717 12,266,994 47,437,700
70,487,280
71,123,768
128,721
68,180,519
68,112,424
36,424
Own portfolio
15,023
----
361,751
1,686,583
---
7,291,057
1,849,567
175,409
39,684
30,371,485
23,689,920
14,883,522
1,542,353
30,977,790
23,722,874
14,880,993
1,542,111
106,344
25,572
(3,172)
(23)
22,756,265
39,648,207
4,880,217
895,830
22,621,570
39,705,396
4,887,475
897,983
(68,295)
95,593
7,010
2,116
Cost
Total
With
no maturity
31-180
181-360
Market
Value
over 360
5,980,698 17,329,261
3,896,760 16,289,964
2,348,008 12,357,576
41,528 1,460,899
Unrealized
gain (loss)
Cost
Market
Value
03.31.2009
03.31.2008
Market Value
Maturity in years
With
no maturity
Total by category
1 - Trading securities
2 - Securities available for sale
Due in up
to one year
Due from
1 to 5 years
Unrealized
gain (loss)
Total
Due from
5 to 10 years
Due after
10 years
Cost
Total
Market
Value
Cost
Market
Value
15,023
2,000
23,671,045
5,944,657
36,573,218
10,457,199
9,002,172
2,100,022
1,862,310
--
70,487,280
18,013,832
71,123,768
18,503,878
68,180,519
17,724,873
68,112,424
17,592,117
13,023
--
14,100,916
3,625,472
14,688,845
11,427,174
6,719,336
182,814
1,862,310
--
37,255,709
15,217,739
37,384,430
15,235,460
34,084,473
16,371,173
34,120,898
16,399,409
03.31.2009
03.31.2008
Book Value
Non Current
Book Value
Total
Current
Total by portfolio
36,242,812
25,038,544
8,050,123
34,863,235
5,930,875
15,664,002
71,106,047
30,969,419
23,714,125
24,862,038
8,329,575
14,618,293
43,222,150
14,285,482
24,665,503
68,084,188
22,615,057
39,283,796
3,033,850
120,295
11,846,544
1,421,814
14,880,394
1,542,109
977,938
537,701
3,909,537
360,246
4,887,475
897,947
--
--
--
398,531
1,382
399,913
Own portfolio
Subject to repurchase agreements –
within free movement
Current
Non Current
Total
Maturity in Days
03.31.2009
Total by category
Trading Securities
Portfolio book value
Mark-to-market - Category 3
Portfolio market value
03.31.2008
18,503,878
37,384,430
15,217,739
71,106,047
17,721
71,123,768
26%
53%
21%
100%
17,592,117
34,120,898
16,371,173
68,084,188
28,236
68,112,424
26%
50%
24%
100%
BB-Consolidated
03.31. 2009
03.31.2008
Market Value
Maturity in days
Domestic
Debentures
Promissory Notes
Shares in closed companies
Federal Government securities
Banking Deposit receipt
Others
Abroad
Eurobonds
Brazilian foreign debt securities
Banking Deposit receipt
Quotas of mutual funds to fixed
income
Domestic
Federal Government securities other
Debentures
Agricultural debt securities
Quotas of FIDCs
Quotas of Private Equity Funds
Quotas of Fund in Emerging
Companies
Quotes of fund investments - others
Funds for Social Development
Shares in privately-held companies
Shares in equity funds
Rural Product Bills - Commodities
Securities company under special
Dpvat- Financial Treasury Bills
Banking deposit receipt
Others
Abroad
Others
With
no maturity
31-180
181-360
over 360
With
no maturity
Total
Market Value
Unrealized
Gain/loss
With
no maturity
1,958,068
1,920,856
6,083
1,681,076
57,153
616
15,236
--30,234
-130,458
-37,212
482
1,664
35,066
--
7,299,843
7,298,197
2,374,206
4,289,491
570,247
7,552
---8,357
-48,344
-1,646
-1,646
---
20,943,546
20,918,808
8,964,329
1,496,936
8,818,263
769,615
---59,213
89,107
721,345
-24,738
14,714
10,024
---
31,922,455
31,855,816
11,414,706
7,481,053
8,987,254
799,725
15,236
288,775
-372,825
1,221,600
1,274,612
30
66,639
15,235
14,490
35,051
1,863
32,474,992
32,409,415
11,411,608
7,603,181
9,445,717
783,386
15,236
286,675
-372,825
1,229,283
1,261,497
7
65,577
15,314
13,334
35,066
1,863
-------------------
24,850,989
24,757,382
4,875,901
13,410,111
4,081,131
912,854
-225,420
24,717,330
24,626,515
4,879,590
13,383,081
4,004,757
909,649
-221,024
---------
109,901
459,727
692,429
(10,092)
93,607
38,417
51,744
-3,446
109,901
476,419
652,219
(10,125)
90,815
37,615
49,752
-3,448
----------
--
--
--
--
--
--
--
--
--
--
--
69,667
21,922
----
1,934,440
1,806,950
19,238
---
8,270,477
7,944,932
3,111,235
2,207,762
676,985
4,138,229
4,077,203
2,762,849
182,138
970,060
30,856,146
28,246,433
23,480,466
76,579
3,083,118
45,099,257
42,030,506
29,371,735
2,457,302
4,647,369
45,268,959
42,097,440
29,373,788
2,466,479
4,730,163
169,702
66,934
2,053
9,177
82,794
35,348,848
33,737,125
20,800,007
4,139,175
6,780,871
--
--
--
--
--
--
--
--
--
--
--
-----
-5
---
9,504
434
---
8,256
1,014
---
1,315,204
9,460
2,165
112,987
1,339,961
12,152
2,168
109,780
1,332,964
10,913
2,165
112,987
(6,997)
(1,239)
(3)
3,207
668,513
11,533
4,332
63,667
668,925
9,668
4,348
64,110
413
(1,865)
16
443
Own portfolio
Deposits with the Brazilian Central
Bank
35,388,108
39,260
33,629,406 (107,719)
20,849,153
49,145
4,097,600 (41,575)
6,707,673 (73,197)
--
--
--
--
1,772
3,400
1,772
(1,628)
1,400
866
(534)
4,860
552
12,274
2,852
1,384
-----47,745
--40,546
2,893
4,306
-----84,653
-3,810
12,661
1,686,583
127,490
-127,490
----
-----347,570
-1,124
19,633
1,570,685
325,545
-325,545
----
-----118,520
-8,621
25,745
-61,026
61,026
-----
-----11
-37,178
22,009
105,484
2,609,713
2,561,862
47,851
----
10,213
2,078
10,682
2,534
8,509
546,573
-50,718
80,393
3,374,939
3,068,751
2,518,400
499,744
27,324
963
22,320
4,860
552
12,274
2,852
1,384
550,754
-50,733
80,048
3,362,752
3,171,519
2,622,888
500,886
40,546
2,893
4,306
(5,353)
(1,526)
1,592
318
(7,125)
4,181
-15
(345)
(12,187)
102,768
104,488
1,142
13,222
1,930
(18,014)
220,916
10,321
10,678
7
3,213
519,616
-18,520
65,938
418,417
1,611,723
1,424,418
165,951
20,640
714
--
203,710
383
20,799
264
1,716
518,637
-18,520
65,938
397,095
1,758,702
1,558,091
166,043
31,745
2,823
--
(17,206)
(9,938)
10,122
257
(1,497)
(979)
---(21,322)
146,979
133,673
92
11,105
2,109
--
------
32,559
20,730
20,730
---
389,170
389,170
10,634
52,063
324,383
9,188,779
9,187,130
3,612,200
905,394
4,669,529
22,075,271
21,889,747
12,859,850
5,562,849
2,578,868
31,432,950
31,252,953
16,501,836
6,462,619
7,400,338
31,685,779
31,486,777
16,503,414
6,520,306
7,572,780
------
20,484,941
20,098,795
16,171,098
462,433
--
20,513,616
20,109,830
16,186,542
458,023
--
------
--
--
2,090
7
888,180
888,160
890,277
--
3,129,780
3,129,780
--
--------
---11,829
--11,829
--------
---1,649
-1,649
--
---185,524
-185,524
--
---179,997
-168,168
11,829
---199,002
-187,173
11,829
--------
-5,107
330,377
386,147
13,912
355,214
17,021
-5,107
330,377
403,786
13,912
372,853
17,021
--------
563,475
3,746,726
10,617,715
20,626,851
73,874,963
108,454,662
109,429,730
169,702
80,684,778
80,619,054
39,260
03.31.2009
Total by portfolio
Unrealized
Gain/loss
1,779,727
1,777,746
66,990
135,678
54
----76,548
1,140,176
358,300
-1,981
118
--1,863
03.31. 2008
Market Value
Maturity in days
Market Value
493,808
493,808
---5,603
-286,675
-198,473
-3,050
7
------
Domestic
Federal Government securities other
Commodities
Debentures
Banking deposit receipt
Abroad
Eurobonds
Total
0-30
Total
With
no maturity
563,475
557,872
5,603
Total
Cost
0-30
31-180
3,746,726 10,617,715
2,060,143 8,349,781
1,686,583 1,855,727
Market
Value
Total
Unrealized
gain (loss)
Cost
Market
Value
Unrealized
gain (loss)
181-360
over 360
20,626,851
11,979,118
5,993,519
73,874,963
35,992,328
22,416,756
108,454,662
58,044,913
31,892,835
109,429,730
58,939,242
31,958,188
169,702
126,182
46,705
80,684,778
35,161,389
39,741,050
80,619,054
35,004,730
39,822,568
39,260
(90,726)
120,854
--
--
175,409
2,348,007
12,862,632
15,388,567
15,386,048
(3,162)
4,886,508
4,893,772
7,016
--
--
236,798
306,207
2,603,247
3,128,347
3,146,252
(23)
895,830
897,984
2,116
03.31.2009
03.31.2008
Market Value
Maturity in years
Total by category
With
no maturity
Due in up
to one year
Due from
1 to 5 years
Total
Due from
5 to 10 years
Due after
10 years
Cost
Total
Market
Value
Cost
Market
Value
563,475
493,808
34,991,292
11,037,638
55,949,391
17,840,708
12,294,508
2,821,378
5,631,064
281,460
108,454,662
31,922,455
109,429,730
32,474,992
80,684,778
24,850,989
80,619,054
24,717,330
69,667
--
14,343,146
9,610,508
20,866,104
17,242,579
7,828,334
1,644,796
2,161,708
3,187,896
45,099,257
31,432,950
45,268,959
31,685,779
35,348,848
20,484,941
35,388,108
20,513,616
03.31.2009
03.31.2008
Account value
Current
By Portfolio
Own portfolio
Subject to repurchase agreements – within free
movement
Non Current
Account Value
Total
Current
Non Current
52,564,192
37,294,769
56,612,709
109,176,901
28,306,050
52,284,329
80,590,379
22,979,956
60,274,725
11,768,289
23,254,871
35,023,160
12,115,278
3,033,850
19,834,160
12,351,600
31,949,438
15,385,450
14,623,591
977,938
24,751,996
3,909,537
39,375,587
4,887,475
120,295
1,446,993
1,567,288
537,701
366,543
904,244
--
--
--
398,531
1,382
399,913
03.31.2009
Total by category
Trading Securities
Portfolio book value
Mark-to-market - Category 3
Portfolio market value
32,474,992
45,268,959
31,432,950
109,176,901
252,829
109,429,730
Total
03.31.2008
30%
41%
29%
100%
24,717,330
35,388,108
20,484,941
80,590,379
28,675
80,619,054
31%
44%
25%
100%
b) Derivative financial instruments
The Bank uses derivative financial instruments to manage, at the consolidated level, its positions and
to meet clients' needs, classifying its own positions as either Hedging (market risk) or Trading, both
with limits of approval. This information is made available to the areas of pricing, trading, controls
and calculation of results, which are segregated within the Bank.
In the options market, active or long positions have the Bank as holder, while passive or short
positions have the Bank as writer.
The models used to manage risks with derivatives are reviewed periodically and decisions are made
in accordance with the best risk/return relationships, estimating possible losses based on the
analysis of macroeconomic scenarios.
The Bank uses appropriate tools and systems to manage the derivatives. Trading in new derivatives,
standardized or not, is subject to a formal risk analysis prior to any transaction. Risk analysis of the
subsidiaries is undertaken on an individual basis and its management is undertaken at the
consolidated level.
The hedge strategy of the equity positions is in line with the macroeconomic analyses and is
approved by the Executive Board of Directors.The Bank uses statistical methods and simulations to
measure the risks of its positions, including derivatives, using models of values at risk sensibility and
stress analysis.
Risks
The main risks inherent in the derivative financial instruments entered into as part of the Group’s
business are credit, market and operating risks, all similar to those related to other types of financial
instruments.
Credit risk is the exposure to loss in the event of default by the counterparty to a transaction. The
credit exposure in futures contracts is minimized due to daily settlement in cash. Swap contracts
registered at CETIP and at BM&F are subject to credit risk if the counterparty is unable or unwilling
to comply with his contractual liabilities. Total credit exposure in swaps at March 31, 2009 is R$
1,243,764 thousand (R$ 2,096,551 thousand on March 31, 2008). The credit risk associated with
options contracts is limited to the premiums paid on purchased options.
Market risk is the exposure created by a potential fluctuation in interest rates, exchange rates,
quotations of goods, prices quoted on stock markets and other values, and is a function of the type
of product, the volume of operations, the term and conditions of the contract and the underlying
volatility.
Operating risk indicates the probability of financial losses resulting from failures or inadequacy of
people, processes and / or systems, or factors such as catastrophes or criminal activities.
Details of the Portfolio of Derivatives Designated for Trade by Index
03.31.2009
03.31.2008
By index
Exchange trading
Futures contracts
Sales commitments
DI
Currencies
Index
Foreign exchange coupon
Libor
Commodities
SCC (1 )
Sales commitments
DI
Currencies
Index
Foreign exchange coupon
Libor
Commodities
(1)
SCC
Fixed-term options
Asset position
Security maturity
Currencies
BB-Consolidated
03.31.2009
03.31.2008
Contraparte
Notional
amount
B
B
B
B
IF
B
B
2,199,896
1,331,030
402,311
--466,555
---
124,031
107,677
7,434
(66)
-7,522
(125)
1,589
124,031
107,677
7,434
(66)
-7,522
(125)
1,589
2,498,625
1,628,999
72,737
-130,481
666,374
34
--
(2,333)
5,225
3,346
129
(3,364)
-(30)
(7,639)
933
5,225
3,346
129
(3,364)
3,266
(30)
(7,639)
2,199,896
1,331,030
402,311
--466,555
---
124,031
107,677
7,434
(66)
-7,522
(125)
1,589
124,031
107,677
7,434
(66)
-7,522
(125)
1,589
2,498,625
1,628,999
72,737
-130,481
666,374
34
--
(2,333)
5,225
3,346
129
(3,364)
-(30)
(7,639)
933
5,225
3,346
129
(3,364)
3,266
(30)
(7,639)
9,931,215
8,047,304
109,219
-748,189
1,023,558
2,945
--
(430,475)
(335,132)
(56,820)
11
8,507
(17,613)
(60)
(29,368)
(430,475)
(335,132)
(56,820)
11
8,507
(17,613)
(60)
(29,368)
5,950,104
3,393,439
312,759
608
86,805
2,153,903
2,590
--
62
154
(2,205)
50
2,191
--(128)
(5,492)
154
(2,205)
50
2,191
(5,554)
-(128)
9,931,215
8,047,304
109,219
-748,189
1,023,558
2,945
--
(430,475)
(335,132)
(56,820)
11
8,507
(17,613)
(60)
(29,368)
(430,475)
(335,132)
(56,820)
11
8,507
(17,613)
(60)
(29,368)
5,950,104
3,393,439
312,759
608
86,805
2,153,903
2,590
--
62
154
(2,205)
50
2,191
--(128)
(5,492)
154
(2,205)
50
2,191
(5,554)
-(128)
1,515,788
-1,515,788
349,514
-349,514
430,391
-430,391
1,115,226
15,921
1,099,305
(11,097)
15,921
(27,018)
43,308
15,921
27,387
1,515,788
-1,515,788
349,514
-349,514
430,391
-430,391
1,115,226
15,921
1,099,305
(11,097)
15,921
(27,018)
43,308
15,921
27,387
(89,494)
(50,669)
B
B
B
B
IF
B
B
B
Liability position
Cost
Market Value
Cost
Market
Value
Notional
amount
Market Value
Notional
amount
(89,494)
3,358,971
(452,302)
(327,257)
-3,616,488
-(89,494)
-(50,669)
(15,921)
3,374,892
(15,921)
(436,381)
(15,921)
(311,336)
-3,616,488
-(89,494)
-(50,669)
Options market
Purchase options
Flexible Currency Options
Financial assets & derivatives
B
C
4,659
4,659
--
106
106
--
1,006
1,006
--
9,311
9,311
--
371
371
--
621
621
--
6,603
4,659
1,944
361
106
255
1,524
1,006
518
17,175
9,311
7,864
1,064
371
693
933
621
312
Sales options
Flexible Currency Options
Financial assets & derivatives
B
IF
(1,574,261)
(1,574,261)
--
(1,540,060)
(1,540,060)
--
(1,553,868)
(1,553,868)
--
(807,730)
(807,730)
--
(765,679)
(765,679)
--
(778,103)
(778,103)
--
(1,572,317)
(1,574,261)
1,944
(1,540,315)
(1,540,060)
(255)
(1,554,387)
(1,553,868)
(519)
(799,866)
(807,730)
7,864
(766,372)
(765,679)
(693)
(778,415)
(778,103)
(312)
Over-the-counter trading
Swap contracts
Asset position
DI
DI
Foreign currency
Foreign currency
Prefixado
IPCA
C
IF
C
IF
C
C
4,694,633
1,371,298
920,808
598,798
1,562,414
223,548
17,767
765,044
34,790
49,104
140,263
539,925
342
620
744,961
39,117
19,250
148,220
531,908
4,897
1,569
8,178,597
2,094,883
3,878,278
550,751
887,353
748,480
18,852
765,168
255,975
468,524
14,927
21,801
3,633
308
719,737
248,534
408,539
23,085
35,467
3,638
474
4,637,934
1,371,298
920,808
598,798
1,562,414
184,616
--
764,146
34,791
49,104
140,263
539,925
63
--
742,412
39,117
19,250
148,220
531,908
3,917
--
8,159,745
2,094,883
3,878,278
550,751
887,353
748,480
--
764,860
255,975
468,524
14,927
21,801
3,633
--
719,262
248,534
408,539
23,085
35,467
3,637
--
Liability position
DI
DI
Foreign currency
Foreign currency
Prefixed
TMS
TR
C
IF
C
IF
C
C
C
14,384,691
4,020,396
1,291,867
1,970,257
1,751,290
13,700
4,652,129
685,052
(1,185,123)
(178,151)
(28,856)
(538,825)
(332,979)
(23)
(92,161)
(14,128)
(1,200,639)
(182,051)
(35,788)
(538,861)
(337,468)
(182)
(92,161)
(14,128)
28,614,940
10,791,530
997,461
2,202,017
2,150,090
538,017
11,485,405
450,420
(664,283)
(170,080)
(169,806)
(116,766)
(48,946)
(64,324)
(85,162)
(9,199)
(637,292)
(166,681)
(154,161)
(118,899)
(49,224)
(54,258)
(85,162)
(8,907)
14,384,691
4,020,396
1,291,867
1,970,257
1,751,290
13,700
4,652,129
685,052
(1,182,804)
(178,151)
(28,856)
(538,825)
(332,979)
(22)
(92,161)
(11,810)
(1,198,321)
(182,051)
(35,788)
(538,861)
(337,468)
(182)
(92,161)
(11,810)
28,567,753
10,744,343
997,461
2,202,017
2,150,090
538,017
11,485,405
450,420
(664,317)
(170,114)
(169,806)
(116,766)
(48,946)
(64,324)
(85,162)
(9,199)
(637,117)
(166,506)
(154,161)
(118,899)
(49,224)
(54,258)
(85,162)
(8,907)
IF
5,901,591
5,901,591
--
233,337
233,337
--
243,455
243,455
--
5,303,365
4,922,619
380,746
223,227
222,186
1,041
135,653
134,612
1,041
5,815,006
5,815,006
--
232,500
232,500
--
242,353
242,353
--
5,303,365
4,922,619
380,746
223,270
222,229
1,041
135,696
134,655
1,041
IF
3,204,057
3,018,905
185,152
(263,121)
(262,409)
(712)
(268,364)
(267,652)
(712)
5,208,535
4,622,649
585,886
(113,474)
(109,739)
(3,735)
(89,325)
(85,590)
(3,735)
3,188,071
3,002,919
185,152
(262,884)
(262,172)
(712)
(268,145)
(267,433)
(712)
5,148,340
4,562,454
585,886
(112,681)
(108,946)
(3,735)
(88,877)
(85,142)
(3,735)
(15,921)
3,374,892
(452,302)
Market Value
3,616,488
Counterpart: (B) Stock Exchange, (IF) Financial Institution, (C) Client.
(1) Foreign exchange swap with regular adjustments.
3,358,971
Cost
B
B
Liability position
Foreign currency
Others
3,616,488
Cost
Security maturity
Currencies
Forward contracts
Asset position
Foreign currency
Others
(50,669)
Notional
amount
(15,921)
(436,381)
(327,257)
(15,921)
(311,336)
Breakdown of the Credit derivatives portfolio
03.31.2009
03.31.2008
Notional
amount
Market
Value
Notional
amount
BB-Consolidated
03.31.2009
03.31.2008
Market
Value
Notional
amount
Notional
amount
Notional
amount
Market
Value
Asset position - Transferred risk
Credit swaps - Derivatives with Banks
---
---
22,466
22,466
19
19
---
---
22,466
22,466
19
19
Liability position - Received risk
Credit swaps - Derivatives with Banks
---
---
8,741
8,741
(38)
(38)
---
---
8,741
8,741
(38)
(38)
Breakdown of the Credit derivatives portfolio by maturity
03.31.2009
03.31.2008
By Maturity
Notional
amount
Cost
Market
Value
Notional
amount
Cost
BB-Consolidated
03.31.2009
Market
Value
Notional
amount
Cost
Forwards contracts
Sales commitments
Up to 30 days
31 to 60 days
61 a 90 dias
91 to 180 days
181 to 360 days
1 to 5 years
Over 5 years
2,199,896
993,390
297,528
22,176
260,007
5,491
521,206
100,098
---------
---------
2,498,625
609,841
44,453
109,404
723,739
460,174
551,014
--
---------
---------
2,199,896
993,390
297,528
22,176
260,007
5,491
521,206
100,098
Sales commitments
Upto 30 days
31 to 60 days
61 to 90 days
91 to 180 days
181 to 360 days
1 to 5 years
Over 5 years
9,931,215
139,098
16,912
59,475
205,395
3,510,522
5,999,813
--
---------
---------
5,950,104
224,930
185,214
519
406,170
1,835,626
3,172,924
124,721
---------
---------
9,931,215
139,098
16,912
59,475
205,395
3,510,522
5,999,813
--
Fixed-term options
Security maturity
Asset position
Up to 30 days
---
---
---
15,921
15,921
15,921
15,921
15,921
15,921
Liability position
Up to 30 days
---
---
---
(15,921)
(15,921)
(15,921)
(15,921)
Currency maturity
Asset position
Up to 30 days
31 to 60 days
61 to 90 days
91 to 180 days
181 to 360 days
1 to 5 years
1,515,788
407,471
525,803
167,909
250,201
162,848
1,556
349,514
52,869
38,743
20,162
103,720
95,596
38,424
430,391
53,245
39,413
21,581
107,694
112,017
96,441
1,099,305
140,687
101,691
32,549
294,097
376,433
153,848
Liability position
Up to 30 days
31 to 60 days
61 to 90 days
91 to 180 days
181 to 360 days
1 to 5 years
3,616,488
540,078
423,729
385,114
707,919
780,928
778,720
(89,494)
(12,859)
(11,162)
(7,535)
(13,580)
(9,897)
(34,461)
(50,669)
(13,485)
(11,156)
(6,904)
(12,296)
(4,853)
(1,975)
4,659
--2,330
2,329
106
--48
58
Options market
Purchase options
Shares
Up to 30 days
31 to 60 days
91 to 180 days
181 to 360 days
Purchase options
Shares
Up to 30 days
31 to 60 days
61 to 90 days
91 to 180 days
181 to 360 days
1 to 5 years
03.31.2008
Market
Value
Notional
amount
--------
Cost
Market
Value
--------
2,498,625
609,841
44,453
109,404
723,739
460,174
551,014
-
--------
--------
---------
---------
5,950,104
224,930
185,214
519
406,170
1,835,626
3,172,924
124,721
---------
---------
---
---
---
15,921
15,921
15,921
15,921
15,921
15,921
(15,921)
(15,921)
---
---
---
(15,921)
(15,921)
(15,921)
(15,921)
(15,921)
(15,921)
(27,018)
1,846
1,560
265
(1,302)
(11,680)
(17,707)
27,387
4,563
3,105
1,044
6,449
8,272
3,954
1,515,788
407,471
525,803
167,909
250,201
162,848
1,556
349,514
52,869
38,743
20,162
103,720
95,596
38,424
430,391
53,245
39,413
21,581
107,694
112,017
96,441
1,099,305
140,687
101,691
32,549
294,097
376,433
153,848
(27,018)
1,846
1,560
265
(1,302)
(11,680)
(17,707)
27,387
4,563
3,105
1,044
6,449
8,272
3,954
3,374,892
624,248
474,566
233,076
853,042
673,808
516,152
(436,381)
(50,555)
(40,913)
(24,096)
(108,661)
(106,497)
(105,659)
(311,336)
(49,340)
(36,848)
(22,624)
(89,535)
(69,937)
(43,052)
3,616,488
540,078
423,729
385,114
707,919
780,928
778,720
(89,494)
(12,859)
(11,162)
(7,535)
(13,580)
(9,897)
(34,461)
(50,669)
(13,485)
(11,156)
(6,904)
(12,296)
(4,853)
(1,975)
3,374,892
624,248
474,566
233,076
853,042
673,808
516,152
(436,381)
(50,555)
(40,913)
(24,096)
(108,661)
(106,497)
(105,659)
(311,336)
(49,340)
(36,848)
(22,624)
(89,535)
(69,937)
(43,052)
1,006
--546
460
9,311
---9,311
371
---371
621
---621
6,603
--4,274
2,329
361
--303
58
1,524
--1,064
460
17,175
1,920
1,086
4,858
9,311
1,064
142
70
481
371
933
11
25
276
621
(1,574,261) (1,540,060) (1,553,868)
(603,063)
(595,073)
(598,461)
(621,103)
(615,572)
(617,793)
(79,969)
(76,917)
(77,021)
(240,291)
(230,939)
(235,260)
(20,511)
(14,559)
(17,053)
(9,324)
(7,000)
(8,280)
(807,730)
(620,025)
(35,095)
(4,275)
(124,524)
(9,311)
(14,500)
(765,679)
(596,458)
(28,287)
(4,015)
(122,048)
(371)
(14,500)
(778,103)
(598,669)
(28,741)
(5,123)
(130,771)
(136)
(14,663)
(1,572,317)
(603,063)
(621,103)
(79,969)
(238,347)
(20,511)
(9,324)
(1,540,315)
(595,073)
(615,572)
(76,917)
(231,194)
(14,559)
(7,000)
(1,554,387)
(598,461)
(617,793)
(77,021)
(235,779)
(17,053)
(8,280)
(799,866)
(620,025)
(33,175)
(3,189)
(119,666)
(9,311)
(14,500)
(766,372)
(596,458)
(28,429)
(4,085)
(122,529)
(371)
(14,500)
(778,415)
(598,669)
(28,752)
(5,148)
(131,047)
(136)
(14,663)
--
--
Swap contracts
Assets
Up to 30 days
31 to 60 days
61 to 90 days
91 to 180 days
181 to 360 days
1 to 5 years
5 to 10 years
4,694,633
538,888
649,750
239,216
1,097,236
1,259,956
909,587
--
765,044
77,670
85,882
71,403
328,606
99,953
101,530
--
744,961
76,573
87,370
66,077
325,416
77,513
112,012
--
8,178,597
1,607,635
734,100
402,586
1,356,840
1,505,457
2,539,273
32,706
762,168
106,671
59,674
36,834
179,791
186,697
191,581
920
719,737
106,593
55,366
35,058
169,072
166,985
184,885
1,778
4,637,934
536,261
649,750
239,216
1,064,919
1,259,489
888,299
--
764,146
77,670
85,882
71,403
328,302
99,933
100,956
--
742,412
76,573
87,370
66,077
324,669
77,501
110,222
--
8,159,745
1,607,635
734,100
402,586
1,356,840
1,504,372
2,528,216
25,996
764,860
106,671
59,674
36,834
179,791
189,675
191,383
832
719,262
106,593
55,366
35,058
169,072
166,955
184,636
1,582
Liabilities
Up to 30 days
31 to 60 days
61 to 90 days
91 to 180 days
181 to 360 days
1 to 5 years
5 to 10 years
14,384,691
1,528,298
1,171,398
781,274
3,214,401
4,703,014
2,754,866
231,440
(1,185,123)
(133,685)
(87,386)
(133,790)
(213,876)
(253,357)
352,609
(10,420)
(1,200,639)
(132,923)
(88,161)
(134,497)
(220,277)
(258,353)
(356,008)
(10,420)
28,614,940
3,669,917
8,121,692
1,052,639
2,425,860
4,205,031
9,139,801
--
(664,283)
(89,332)
(75,997)
(19,025)
(86,490)
(225,999)
(167,440)
--
(637,292)
(85,837)
(75,370)
(18,162)
(81,905)
(209,680)
(166,338)
--
14,384,691
847,593
1,174,164
791,098
3,227,225
4,801,066
3,312,105
231,440
(1,182,804)
(131,367)
(87,386)
(133,790)
(213,876)
(253,357)
(352,608)
(10,420)
(1,198,321)
(130,605)
(88,161)
(134,497)
(220,277)
(258,353)
(356,008)
(10,420)
28,567,753
3,628,917
8,121,692
1,052,639
2,425,860
4,205,031
9,133,614
--
(664,317)
(89,332)
(75,997)
(19,025)
(86,490)
(225,999)
(167,474)
--
(637,117)
(85,823)
(75,370)
(18,162)
(81,905)
(209,680)
(166,177)
--
5,901,591
2,544,533
1,314,181
1,281,358
420,442
153,542
181,199
6,336
233,337
116,051
53,193
14,449
24,786
6,988
17,240
630
243,455
122,813
54,830
17,060
24,223
6,659
17,240
630
5,303,365
3,199,018
338,942
324,609
752,815
297,654
390,327
--
223,227
118,678
26,305
8,333
52,706
16,013
1,192
--
135,653
55,365
25,526
7,279
34,731
10,978
1,774
--
5,815,006
2,481,256
1,311,343
1,263,518
420,442
150,912
181,199
6,336
232,500
115,760
52,669
14,480
24,786
6,935
17,240
630
242,353
122,335
54,293
17,031
24,165
6,659
17,240
630
5,303,365
3,199,018
338,942
324,609
752,815
297,654
390,327
--
223,270
118,721
26,305
8,333
52,706
16,013
1,192
--
135,696
55,408
25,526
7,279
34,731
10,978
1,774
--
Forward contracts
Assets
Up to 30 days
31 to 60 days
61 a 90 dias
91 a 180 dias
181 to 360 days
1 to 5 years
5 to 10 years
Liabilities
Up to 30 days
31 to 60 days
61 to 90 days
91 to 180 days
181 to 360 days
1 to 5 years
5 to 10 years
3,204,057
1,680,932
430,802
327,308
476,624
204,476
83,915
--
(263,121)
(140,799)
(44,752)
(25,775)
(23,223)
(6,160)
(22,412)
--
(268,364)
(144,015)
(46,012)
(26,390)
(23,118)
(6,417)
(22,412)
--
5,208,535
2,021,909
523,951
120,420
503,056
602,041
1,363,730
73,428
(114,374)
(54,457)
(1,823)
273
(24,976)
(31,976)
(1,361)
(54)
(90,325)
(52,644)
(4,432)
(708)
(6,698)
(24,430)
(1,359)
(54)
3,188,071
1,676,629
430,802
327,308
476,624
192,793
83,915
--
(262,884)
(140,781)
(44,752)
(25,775)
(23,223)
(5,941)
(22,412)
--
(268,145)
(143,991)
(46,012)
(26,390)
(23,118)
(6,222)
(22,412)
--
5,148,340
1,961,773
523,951
120,420
503,056
602,041
1,363,671
73,428
(112,681)
(53,673)
(1,823)
273
(24,976)
(31,076)
(1,352)
(54)
(88,877)
(52,203)
(4,432)
(708)
(6,698)
(23,430)
(1,352)
(54)
Breakdown of margin given as guarantee for transactions with derivative financial
instruments
03.31.2009
03.31.2008
850,860
-850,860
897,331
653
897,984
Financial Treasury Bills (LFT)
TDA Securities
Total
Portfolio of derivatives designated as hedge of market risk
The Bank, seeking protection against possible oscillations in interest and exchange rates on
securities issued in the international capitals market, totaling R$ 350 million, contracted derivative
operations in the forma of currency and interest rate swaps (Cross Currency Interest Rate Swap),
with the same volume, term and rates. The hedge was assessed as effective at March 31, 2009, in
accordance with the provisions of Central Bank Circular 3082 dated January 30, 2002, which require
evidence of hedge effectiveness between 80% and 125%. The breakdown of the portfolio is as
follows:
By index
By index
03.31.2009
Counterparty
Notional
amount
BB-Consolidated
03.31.2008
Notional
amount
Cost
03.31.2009
Market
Value
Notional
amount
Cost
03.31.2008
Cost
Market
Value
Market
Value
Notional
amount
Cost
Market
Value
350,000
(84,838)
(92,164)
350,000
35,365
(43,360)
350,000
(84,838)
(92,164)
350,000
35,365
(43,360)
350,000
(84,838)
(92,164)
350,000
35,365
(43,360)
350,000
(84,838)
(92,164)
350,000
35,365
(43,360)
Over-the-counter
trading
Swap contracts
Liability position
Foreign currency and
interest
IF
Counterpart: (IF) Financial Institution.
By maturity
By maturity
03.31.2009
Notional
amount
Cost
BB-Consolidated
03.31.2008
Market
Value
Notional
amount
03.31.2009
Cost
Market
Value
Notional
amount
03.31.2008
Cost
Market
Value
Notional
amount
Cost
Market
Value
Swap contracts
Liabilities
5 to 10 years
350,000
(84,838)
(92,164)
350,000
35,365
(43,360)
350,000
(84,838)
(92,164)
350,000
35,365
(43,360)
350,000
(84,838)
(92,164)
350,000
35,365
(43,360)
350,000
(84,838)
(92,164)
350,000
35,365
(43,360)
Derivative financial instruments divided into current and long-term
BB-Domestic and foreign branches
03.31.2009
BB-Consolidated
03.31.2008
Current
03.31.2009
Current
Non Current
Non Current
Current Non Current
ASSETS
Fixed-term options
Options market
Swap contracts
Forward contracts
Credit swaps
Total
333,950
1,006
632,949
225,585
-1,193,490
96,441
-112,012
17,870
-226,323
39,354
621
533,074
133,879
19
706,947
3,954
-186,663
1,774
-192,391
333,950
1,524
632,190
224,483
-1,192,147
LIABILITIES
Fixed-term options
Options market
Swap contracts
Forward contracts
Credit swaps
Hedge Derivatives
Others
Total
(48,694)
(1,545,588)
(834,211)
(245,952)
---(2,674,445)
(1,975)
(8,280)
(366,428)
(22,412)
-(92,164)
-(491,259)
(284,205)
(763,440)
(470,954)
(87,912)
(38)
--(1,606,549)
(43,052)
(14,663)
(166,338)
(1,413)
-(43,360)
(671)
(269,497)
(48,694)
(1,546,107)
(831,893)
(245,733)
---(2,672,427)
96,441
-110,222
17,870
-224,533
03.31.2008
Current
Non Current
39,354
933
533,044
133,922
19
707,272
3,954
-186,218
1,774
-191,946
(1,975)
(284,205)
(8,280)
(763,752)
(366,428)
(470,940)
(22,412)
(87,471)
-(38)
(92,164)
---(491,259) (1,606,406)
(43,052)
(14,663)
(166,176)
(1,406)
-(43,360)
(671)
(269,328)
c) Result of the Derivatives
1Q2009
379,958
(901)
(399,265)
(37,683)
-(2,062)
(59,953)
Swap
Term
Future
Options
Derivatives
Others
Total
BB-Consolidated
1Q2008
(323,354)
(16)
46,153
(22,963)
8
(148,822)
(448,994)
1Q2009
379,646
(901)
(399,265)
(37,683)
-(3,323)
(61,526)
1Q2008
(322,734)
(16)
46,153
(22,963)
8
(148,606)
(448,158)
d) Result of the Mark-to-Market of Securities and recorded directly in statement of income
accounts
1Q2009
162,467
(30,661)
1,966
(32,627)
131,806
Securities
Derivatives
Negotiation
Hedge – Market risk
Total
BB-Consolidated
1Q2008
(1,098)
8,941
(870)
9,811
7,843
1Q2009
209,808
(31,065)
1,562
(32,627)
178,743
1Q2008
4,594
9,476
(335)
9,811
14,070
e) Assets Valuation Adjustment – Securities and Derivatives recognized in the Stockholders’
equity
2009
2008
12.31.2008 Net Movement 03.31.2009
Balance
in period
Balance
12.31.2007 Net Movement 03.31.2008
Balance
in period
Balance
Bank
Affiliates and subsidiaries
Tax effects
Total
(49,855)
217,465
31,119
198,729
99,581
(132,185)
(42,153)
(74,756)
49,726
85,280
(11,034)
123,973
f) Reclassifying of Securities
In the first quarter of 2009 no reclassifications of securities were performed.
39,099
399,395
(88,692)
349,802
(111,180)
(274,590)
121,327
(264,443)
(72,081)
124,805
32,635
85,359
9 - Loan operations
a) Details of the Loan Portfolio and Loan Operations Classified as "Other Receivables"
BB - Domestic and
Foreign branches
Loan operations
Loans and bills discounted
Financing
Rural and agribusiness financing
Real estate financing
Financing of securities
Financing of Infrastructure and development
Other receivables with loan characteristics
Guarantees honored
Advances on foreign exchange contracts
Credit card operations
Sundry
Lease operations
Lease operations
Total
03.31.2009
191,597,915
87,447,524
54,249,844
63,499,543
256,061
--(13,855,057)
17,410,194
80,995
11,844,853
5,681,777
416,346
(613,777)
37,906
37,906
-209,046,015
03.31.2008
148,803,117
60,952,398
43,495,320
54,558,170
387
525
-(10,203,683)
11,205,294
55,249
6,609,471
4,389,006
498,609
(347,041)
65,410
65,410
-160,073,821
BB-Consolidated
03.31.2009
205,375,913
99,836,884
55,277,480
64,295,014
1,035,614
-5,720
(15,074,799)
17,489,304
80,995
11,939,271
5,681,777
436,006
(648,745)
3,231,829
3,337,374
(105,545)
226,097,046
03.31.2008
149,507,406
61,101,019
44,169,976
54,558,170
387
--(10,322,146)
11,205,309
55,249
6,609,471
4,389,006
498,653
(347,070)
1,353,163
1,377,891
(24,728)
162,065,878
b) Loan and lease operations income
BB - Domestic and
Foreign branches
Loan Operations Income
Loans and bills discounted
Financing
Rural and agribusiness financing
Advances on foreign exchange contracts
Guarantees honored
Other
Lease Operations Income
Total
1Q2009
8,384,529
5,047,874
1,585,806
1,110,474
91,840
3,257
545,278
13,958
8,398,487
1Q2008
6,973,722
4,124,801
1,209,591
1,006,618
127,139
4,509
501,064
15,444
6,989,166
BB-Consolidated
1Q2009
8,501,855
5,149,581
1,586,531
1,110,473
91,840
3,257
560,173
478,386
8,980,241
1Q2008
7,000,550
4,129,370
1,216,081
1,006,618
137,361
4,509
506,611
194,420
7,194,970
c) Details of the Loan Portfolio by Sector, Including Operations with Loan Characteristics
Classified as "Other Receivables"
PUBLIC SECTOR
Domestic
Government
Direct administration
Indirect
administration
Business entities
Industry
Commerce
Financial services
Other services
Abroad
Government
Direct administration
Business entities
BB Group
Industry
Commerce
Financial services
PRIVATE SECTOR
Domestic
Rural
Industry
Commerce
Financial services
Private Individuals
Housing
Other services
Abroad
Industry
Commerce
Financial services
Other companies
Private Individuals
Other services
Total
BB-Consolidated
03.31.2009
%
03.31.2008
%
03.31.2009
%
03.31.2008
%
3,721,848
952,108
757,928
698,248
1.7
0.4
0.3
0.3
2,662,461
733,467
526,173
450,014
1.6
0.4
0.3
0.3
3,805,734
959,519
765,338
704,809
1.6
0.5
0.4
0.4
2,674,137
733,466
526,173
450,014
1.6
0.4
0.3
0.3
59,680
--
76,159
0.1
60,529
--
76,159
--
194,180
128,965
406
60,219
4,590
2,769,740
1,981,959
1,981,959
787,781
9,518
635,914
8,317
134,032
219,793,001
209,203,558
51,707,466
61,761,067
24,304,081
2,228
42,728,236
62,034
0.1
0.1
---1.3
0.9
0.9
0.4
-0.3
-0.1
98.3
93.5
23.1
27.6
10.8
-19.1
--
207,294
133,492
-64,960
8,842
1,928,994
1,740,451
1,740,451
188,543
-108,621
3,319
76,603
167,962,084
160,303,779
43,041,602
48,502,852
17,721,457
148
31,513,837
--
0.1
0.1
---1.2
1.1
1.1
0.1
-0.1
--98.4
94.0
25.2
28.4
10.4
-18.5
--
194,181
128,965
406
60,219
4,591
2,846,215
1,992,753
1,992,753
853,462
-744,771
8,317
100,374
238,120,401
226,241,014
52,502,937
63,131,965
25,785,763
2,228
53,656,990
833,076
0.1
207,293
0.1
133,492
---64,960
-8,841
1.1
1,940,671
0.8
1,750,097
0.8
1,750,097
0.3
190,574
--0.3
110,652
-3,319
-76,603
98.4 170,085,685
93.5 161,527,851
21.7 43,041,602
26.1 48,957,908
10.6 17,798,034
-148
22.2 31,954,766
0.3
--
0.1
0.1
---1.1
1.0
1.0
0.1
----98.4
93.5
24.9
28.3
10.3
-18.5
--
28,638,446
10,589,443
12.9
4.8
19,523,883
7,658,305
11.4
4.5
30,328,055
11,879,387
12.6
4.9
19,775,393
8,557,834
11.5
4.9
8,249,869
672,901
3.7
0.3
633,350
6,437,930
0.4
3.8
9,043,468
882,917
3.7
0.4
663,462
7,140,340
0.4
4.1
729,850
367,058
0.3
0.2
332,100
88,108
0.2
0.1
744,861
587,336
0.3
0.2
341,647
106,774
0.2
0.1
5,097
564,668
-0.3
6,648
160,169
-0.1
6,558
614,247
-0.3
6,775
298,836
-0.2
223,514,849
100.0
170,624,545
100.0
241,926,135
100.0 172,759,822
100.0
d) Loan portfolio by risk level and maturity, including operations with loan characteristics
classified as "Other receivables"
Abnormal operations
AA
03.31.2009
03.31.2008
Total
portfolio
1,029,514
A
B
C
D
E
F
G
H
Total
portfolio
Installments falling due
01 to 30
--
--
230,648
160,602
141,069
76,757
59,218
55,108
219,308
942,710
31 to 60
--
--
32,941
40,454
31,639
21,476
16,237
18,034
65,780
226,561
212,908
61 to 90
--
--
20,095
25,781
23,203
20,567
11,712
12,523
60,546
174,427
183,308
592,330
91 to 180
--
--
46,703
77,364
79,916
62,483
41,271
44,170
206,928
558,835
181 to 360
--
--
76,914
137,533
142,647
108,240
70,836
87,157
287,179
910,506
942,448
Over 360
--
--
190,934
195,997
259,081
252,401
116,345
130,915
772,070
1,917,743
2,284,360
01 to 14
--
--
33,539
60,807
30,540
12,144
5,385
7,035
23,331
172,781
72,828
15 to 30
--
--
244,942
374,471
150,251
52,913
23,515
30,497
100,460
977,049
299,147
31 to 60
--
--
37,009
297,354
231,847
81,518
42,008
42,433
156,154
888,323
425,565
61 to 90
--
--
217
23,157
242,789
145,353
54,828
48,730
128,048
643,122
235,852
91 to 180
--
--
147
10,266
41,330
217,710
295,267
333,759
641,794
1,540,273
688,453
181 to 360
--
--
3
49
34
28,050
18,025
16,263 1,635,741
1,698,165
580,873
Over 360
--
--
--
--
--
4
4
231,622
231,632
31,257
Subtotal
--
--
914,092
1,403,835 1,374,346 1,079,616
754,651
826,626 4,528,961
10,882,127
7,578,843
03.31.2009
03.31.2008
Installments overdue
2
Normal operations
AA
A
B
C
Total
portfolio
Total
portfolio
D
E
F
G
H
01 to 30
6,557,494 11,507,092 14,236,802 11,091,220 1,960,438
320,921
125,549
80,485
451,286
46,331,287
18,527,183
31 to 60
3,866,908
5,516,075
2,686,933
694,203
208,590
35,862
16,565
7,048
31,742
13,063,926
10,478,668
61 to 90
3,634,438
4,347,757
2,313,390
739,445
219,805
61,112
12,848
9,730
49,138
11,387,663
8,260,828
91 to 180
7,254,758
8,077,157
8,016,876
2,356,164
614,575
140,773
85,004
24,021
115,646
26,684,974
22,613,975
181 to 360
11,346,180 12,934,691
9,786,069
1,945,987
581,749
117,185
33,868
29,069
132,847
36,907,645
29,670,003
Over 360
25,537,162 18,364,962 17,284,866
4,510,795 2,900,539 1,108,897
331,769
588,937 2,466,727
73,094,654
69,185,855
Up to 14
days
58,694
116,753
392,936
315,443
102,516
19,165
19,108
14,423
42,871
1,081,909
339,695
4,080,664
--
--
--
--
--
--
--
--
4,080,664
3,969,495
Subtotal
62,336,298 60,864,487 54,717,872 21,653,257 6,588,212 1,803,915
624,711
753,713 3,290,257
212,632,722
163,045,702
Total
62,336,298 60,864,487 55,631,964 23,057,092 7,962,558 2,883,531 1,379,362 1,580,339 7,819,218
223,514,849
170,624,545
Others
(1)
BB-Consolidated
Abnormal operations
03.31.2009
AA
A
B
C
D
E
F
G
H
03.31.2008
Total
portfolio
Total
portfolio
01 to 30
--
--
233,817
167,854
151,622
80,917
63,683
57,887
229,423
985,203
31 to 60
--
--
35,348
45,009
38,060
24,244
19,080
20,010
72,592
254,343
1,032,020
214,525
61 to 90
--
--
22,272
29,923
29,306
23,269
14,415
14,345
67,206
200,736
184,628
91 to 180
--
--
53,170
89,208
96,778
69,725
48,812
48,914
223,549
630,156
595,219
181 to 360
--
--
89,413
157,163
171,428
119,542
82,452
95,226
315,563
1,030,787
946,142
Over 360
--
--
251,877
247,390
335,421
281,401
143,372
148,914
829,203
2,237,578
2,290,720
01 to 14
--
--
33,675
61,093
31,441
12,463
5,541
7,195
23,788
175,196
73,530
15 to 30
--
26
330,097
407,690
167,919
58,247
26,679
33,295
105,730
1,129,683
300,851
31 to 60
--
--
37,713
354,366
251,911
88,899
48,361
47,193
166,237
994,680
427,496
61 to 90
--
--
217
23,814
279,433
156,357
65,329
53,561
142,646
721,357
237,421
91 to 180
--
--
147
10,577
42,954
258,532
338,947
374,981
704,610
1,730,748
691,748
17,379 1,825,621
181 to 360
--
--
4
50
35
28,804
19,129
Over 360
--
--
--
--
--
4
4
Subtotal
--
26
1,087,750 1,594,137
1,596,308
1,202,404
875,804
1,891,022
583,936
238,771
238,781
31,272
918,902 4,944,939
12,220,270
7,609,508
2
Normal operations
03.31.2009
AA
A
B
C
D
E
F
G
H
03.31.2008
Total
portfolio
Total
portfolio
01 to 30
6,811,868 11,316,238 15,199,113 11,315,068
2,063,294
332,394
131,127
87,344
472,313
47,728,759
18,595,285
31 to 60
4,011,291
5,525,103
3,026,114
780,022
268,158
45,808
20,106
10,077
33,000
13,719,679
10,538,757
61 to 90
3,792,904
4,594,529
2,595,098
810,466
262,890
64,840
16,233
11,739
50,552
12,199,251
8,317,267
91 to 180
7,712,336
8,777,994
8,805,920
2,554,648
717,518
149,876
90,548
27,602
129,947
28,966,389
22,786,212
181 to 360
11,643,896 13,222,079 10,938,906
2,202,069
711,921
128,710
41,719
31,762
138,850
39,059,912
29,941,462
Over 360
26,639,087 21,809,786 21,267,846
5,065,695
3,245,847 1,157,631
350,581
595,906 2,602,362
82,734,741
70,661,047
Up to 14 days
Other (¹)
64,716
152,026
443,901
335,453
114,426
22,249
21,147
17,076
45,476
1,216,470
340,789
4,080,664
--
--
--
--
--
--
--
--
4,080,664
3,969,495
671,461
Subtotal
64,756,762 65,397,755 62,276,898 23,063,421
7,384,054 1,901,508
781,506 3,472,500
229,705,865 165,150,314
Total
64,756,762 65,397,781 63,364,648 24,657,558
8,980,362 3,103,912 1,547,265 1,700,408 8,417,439
241,926,135 172,759,822
(1) Operations with third party risk tied to Government Funds and Programs, mainly Pronaf, Procera, FAT, BNDES and FCO. Including the amount
of overdue installments in the total amount of R$ 581 million, which comply with rules defined in each program for reimbursement with the
managers, not implying credit risk for the Bank.
e) Allowance for loan losses by risk level, including operations with loan characteristics
classified as "Other receivables"
03.31.2009
Level of
Risk
AA
A
B
C
D
E
F
G
H
Subtotal
%
Provision
0
0,5
1
3
10
30
50
70
100
Additional allowance foreign
Value of
Operations
62,336,298
60,864,487
55,631,964
23,057,092
7,962,558
2,883,531
1,379,362
1,580,339
7,819,218
223,514,849
(3)
Additional allowance domestic
03.31.2008
Additonal (2)
Provision
-279,680
726
64,862
211,206
591,573
281,014
210,968
-1,640,029
Total
Provision
-584,001
557,046
756,575
1,007,462
1,456,632
970,695
1,317,205
7,819,218
14,468,834
Value of
Operations
46,931,327
33,687,850
51,973,918
21,474,033
6,802,546
2,083,480
930,471
1,246,928
5,493,992
170,624,545
Value of
Provision
-168.439
519.739
644.222
680.255
625.044
465.235
872.850
5.493.992
9.469.776
--
--
--
--
--
17,014
--
--
--
--
--
1,063,934
223.514.849
12,828,805
1,640,029
14,468,834
170,624,545
10,550,724
Value of (1)
Provision
-326,988
633,645
739,727
898,036
931,174
773,633
1,190,286
8,417,439
13,910,928
Additonal (2)
Provision
-286,094
33,758
138,030
274,898
658,950
296,329
225,081
5,021
1,918,161
Total
Provision
-613,082
667,403
877,757
1,172,934
1,590,124
1,069,962
1,415,367
8,422,460
15,829,089
Value of
Operations
47,366,029
34,422,275
52,672,839
21,577,971
6,842,507
2,091,117
932,811
1,248,974
5,605,299
172,759,822
Value of
Provision
-172,111
526,728
647,339
684,251
627,335
466,406
874,282
5,605,299
9,603,751
--
--
--
--
26,259
(4)
Total
Value of (1)
Provision
-304,321
556,320
691,713
796,256
865,059
689,681
1,106,237
7,819,218
12,828,805
BB-Consolidate
03.31.2009
Level of
Risk
AA
A
B
C
D
E
F
G
H
Subtotal
%
Provision
0
0,5
1
3
10
30
50
70
100
Additional allowance foreign
Value of
Operations
64,756,762
65,397,781
63,364,648
24,657,558
8,980,362
3,103,912
1,547,265
1,700,408
8,417,439
241,926,135
--
03.31.2008
-----1,063,934
Total
241,926,135
13,910,928
1,918,161
15,829,089
172,759,822
10,693,944
(1) Refers to the additional provision to the minimum required by Resolution CMN no. 2682/99, made from the experience of the administration
and implementation of test stress and the credit portfolio to determinate the provision as necessary to cover the credit risks. During the 2009 first
quarter the amount of R$233,858 thousand from additional provision were utilized.
Additional allowance domestic
f) Transactions with the allowance for loan losses, leasing and other doubtful credits, with the
nature of credits granted
1Q2009
1Q2008
Opening balance
13,615,815 10,167,308
Provision/(reversal)
2,459,139 1,528,959
Exchange variation on allowances - foreign
(4,058)
(26)
Loans written off
(1,602,062) (1,145,517)
Added Values(1)
-Closing balance
14,468,834 10,550,724
(1) Amount referring to acquisition of Bank Nossa Caixa on 03.16.2009.
BB-Consolidated
1Q2009
1Q2008
13,829,059 10,313,368
2,491,318 1,534,450
(3,004)
(673)
(1,606,151) (1,153,200)
1,117,867
-15,829,089 10,693,945
g) Transactions with the provision for other doubtful credits, without the nature of credits
granted
1Q2009
Opening balance
Exchange variation on allowances - foreign
Reclassification
Added Values (1)
Closing balance
(1) Amount referring to acquisition of Bank Nossa Caixa on 03.16.2009.
769,197
162,129
(322)
2,850
933,854
1Q2008
574,172
68,735
288
990
-644,185
BB-Consolidated
1Q2009
1Q2008
797,869
162,204
(322)
4,389
62,831
1,026,971
585,295
67,704
289
13,775
-667,063
h) Leasing portfolio by maturity
BB-Consolidated
Up 1 year
1 to 5 Years
Over 5 years
Total Present Value
03.31.2009
03.31.2008
1,402,015
1,923,915
26,046
3,351,976
680,742
686,816
12,559
1,380,117
i) Supplementary information
1Q2009
Renegotiated loans
Recoveries of loans written off
(1)
4,342,997
354,154
1Q2008
3,483,475
419,632
BB-Consolidated
1Q2009
4,357,235
356,636
1Q2008
3,484,088
422,272
(1) Recorded in income in Revenue from Loans, pursuant to CMN Resolution 2836, of May/2001. Of this total, in the first quarter of 2009, R$
17,234 thousand (book value - R$ 5,854 thousand) refer to loans to individuals and corporate entities. In the first quarter 2008, these amounts
reached R$ 24,672 thousand (book value - R$ 13,951 thousand).
10 - Other Receivables
a) Specific credits
These are credits from the Federal Treasury of R$ 867,679 thousand (R$ 776,236 thousand on
March 31, 2008) for the - extension of terms of rural financing - as determined by Law 9138/1995.
b) Sundry
BB - Domestic and
Foreign branches
(5)
Advances to FGC
Salary and other advances
(2)
Tax credits
Sundry debtors from sale of assets and rights
(1)
Sundry debtors from security deposits
Income tax and social contribution on net income to offset
Sundry debtors - foreign
(3)
Sundry debtors - domestic
(4)
Accounts receivable - credit card operations
Accounts receivable - Federal Treasury
Accounts receivable - other
Other
Total
Current Assets
Non Current Assets
03.31.2009
1,008,982
175,839
18,239,535
276,678
17,459,222
2,935,339
39,325
11,572,941
5,900,399
402,119
2,113,767
BB-Consolidated
380,354
60,504,500
03.31.2008
-176,672
13,756,525
338,393
15,655,744
2,000,844
22,229
6,076,650
4,545,026
329,751
982,961
425,656
44,310,451
03.31.2009
1,138,698
189,157
20,413,120
285,078
20,024,132
3,208,165
43,354
11,593,127
5,900,399
402,119
3,008,334
388,409
66,594,092
03.31.2008
-178,878
14,051,438
338,393
16,393,562
2,208,249
20,151
6,032,033
4,545,026
329,750
1,325,986
321,776
45,745,242
18,762,689
41,741,811
12,805,809
31,504,642
20,425,309
46,168,783
13,256,375
32,488,867
(1) Include the amount of R$ 11,237,599 thousand (R$ 9,608,927 thousand on 03.31.2008) related to judicial deposits regarding the full offset of
prior year income tax and social contribution on net income losses against taxable income.
(2) Includes the total of tax credits from income tax and social contribution, Nota 23,a.
(3) Includes the sum of R$ 7,793,671 thousand with regard to "CVM Actuarial Assets no, 371" (R$ 2,179,937 thousand at March 31, 2008), as
shown in Note 26 f.
(4) Includes the yet to mature credit card installments payable to storekeepers, in the amount of R$ 2,413,139 thousand (R$ 1,921,113 thousand at
March 31, 2008).
(5) It corresponds to the anticipation granted to the Credit Guarantor Fund, according to Bacen Circular no, 3,416/2008.
11 - Foreign exchange portfolio
a) Breakdown
BB- Domestic and
Foreign branches
03.31.2009
BB-Consolidated
03.31.2008
03.31.2009
03.31.2008
Assets
Other Receivables
Forward foreign exchange purchases pending settlement
Bills of exchange and time drafts in foreign currency
Receivables from sales of foreign exchange
(Advances in national currency)
Foreign currency receivables
Income receivable on advances granted
Income receivable on financed imports
18,912,278
15,649,959
100,116
11,230,869
(8,371,055)
7,008
295,327
54
12,608,056
9,204,024
85,730
7,804,935
(4,618,130)
5,983
125,191
323
19,040,607
15,773,955
100,116
11,259,772
(8,399,762)
7,008
299,464
54
12,608,056
9,204,024
85,730
7,804,935
(4,618,130)
5,983
125,191
323
Current Assets
Non-current Assets
18,912,278
--
12,608,056
--
19,040,607
--
12,608,056
--
15,260,866
12,430,050
-(4,445)
14,250,464
(11,433,893)
14,176
4,487
-27
10,860,025
7,883,676
-(30,117)
9,347,542
(6,356,534)
11,707
3,714
-37
15,380,206
12,459,453
-(4,445)
14,345,548
(11,528,311)
103,443
4,487
4
27
10,938,868
7,883,676
-(30,117)
9,347,542
(6,356,534)
90,550
3,714
-37
15,260,866
10,860,025
15,380,206
10,938,868
--
--
--
--
3,651,413
1,748,031
3,660,400
1,669,188
757,286
160,291
505,667
244,452
786,248
161,693
506,650
248,511
Liabilities
Other liabilities
Forward foreign exchange sales pending settlement
Advances on foreing currency
Financed import - contracted exchange
Foreign exchange purchase liabilities
(Advances on foreign exchange contracts)
Foreign currency payables
Unearned income on advances granted
Obligations for sales - floating
Charges payable on advances received
Current Liabilities
Non-current Liabilities
Foreign exchange portfolio, net
Memorandum accounts
Credits limit for import
Confirmed export credit
b) Foreign exchange income
BB - Domestic and
Foreign branches
Foreign exchange income
Foreign exchange expenses
Foreign Exchange result
1Q2009
2,007,151
(2,125,437)
(118,286)
1Q2008
1,730,685
(1,609,547)
121,138
BB-Consolidated
1Q2009
2,011,347
(2,127,148)
(115,801)
1Q2008
1,740,410
(1,618,062)
122,348
12 - Other Assets
a) Non-operating assets/Others
BB - Domestic and
Foreign branches
Buildings
Vehicles
Machinery and Equipment
Assets in special regime
Supply materials
Property
Others
Total
Current Assets
Non Current Assets
BB-Consolidated
03.31.2009
03.31.2008
03.31.2009
03.31.2008
60,532
608
61,684
479
63,258
23,326
61,291
18,765
11,640
11,807
13,214
13,832
170,263
24,961
472
158,518
17,993
--
179,849
55,841
16,960
158,604
45,339
--
3,343
2,370
3,484
2,443
(149,319)
122,500
(148,873)
103,978
(182,965)
172,967
(164,279)
135,995
122,500
--
103,978
--
168,569
4,398
135,995
--
b) Prepaid Expense
BB - Domestic and
Foreign branches
Contracts in the provision of banking services
(2)
Personal Expense
(3)
Commissions for credit intermediation
(4)
Others
Total
Current Assets
Non Current Assets
(1)
BB-Consolidated
03.31.2009
03.31.2008
03.31.2009
03.31.2008
501,879
54,931
33,335
318,554
908,699
145,290
13,415
32,027
192,009
382,741
501,879
54,931
33,335
879,074
1,469,219
145,290
13,415
32,027
401,912
592,644
625,337
283,362
382,741
--
874,116
595,103
476,792
115,852
(1) The figures relating to the allocation of business relationships, from the year 2008, began to be recorded in intangible assets (Note 14). In
03.31.2009 represented R$ 3,293,560 thousand (note 2.c).
(2) Basically include the benefits of the Program on Food - officials.
(3) Commissions paid to retailers - financing of vehicles.
(4) Includes in the BB-Consolidated of 03.31.2009 the amount of R$235,474 thousand from the Banco Nossa Caixa S.A. and R$ 274,735 thousand
from the services provided by related non-financial companies.
13 -Property and equipment and leased assets
Annual
Residual
depreciation rate
Cost
(by group)
12.31.2008
Furniture and equipment in stock
Constructions in progress
Land
Buildings
Facilities
Furniture and equipment in use
Communication systems
Data processing systems
Security systems
Transportation systems
Leased assets
---4%
10%
10%
10%
20 a 50%
10%
20%
Total
Movements
03.31.2009
Depreciation
Balance
Final
3,178,471
52,053
151,169
167,284
1,051,725
171,745
393,630
90,354
1,007,486
92,752
273
45,603
98,402
(28,072)
(14,648)
(6,149)
86,835
3,146
10,772
3,038
43,165
401
(86)
(11,137)
(109,078)
---(18,302)
(7,825)
(11,918)
(1,785)
(65,153)
(4,147)
52
3,439
3,167,795
23,981
136,521
161,135
1,120,258
167,066
392,484
91,607
985,498
89,006
239
37,906
3,224,074
87,265
(105,639)
3,205,701
BB-Consolidated
Annual
Residual
depreciation rate
Cost
(by group)
12.31.2008
Furniture and equipment in stock
Constructions in progress
Land
Buildings
Facilities
Furniture and equipment in use
Communication systems
Data processing systems
Security systems
Transportation systems
Leased assets
Total
---4%
10%
10%
10%
20 a 50%
10%
20%
03.31.2009
Movements
Depreciation
Final Balance
3,338,941
52,053
152,786
171,172
1,095,371
176,664
459,494
91,507
1,045,740
92,751
1,403
3,869
715,923
(27,405)
(3,543)
69,479
238,346
14,008
65,622
12,603
325,080
20,565
1,168
420,569
(467,286)
---(136,425)
(13,028)
(39,721)
(7,506)
(256,676)
(12,940)
(990)
(421,198)
3,587,578
24,648
149,243
240,651
1,197,292
177,644
485,395
96,604
1,114,144
100,376
1,581
3,240
3,342,810
1,136,492
(888,484)
3,590,818
The ratio of formation of fixed assets in relation to the equity of reference is 18.85% (15.04% at March 31, 2008)
for the Financial Consolidation, and 16.20% for the Economic and Financial Consolidation, in conformity with
CMN Resolution 2669/1999. The difference between the Fixed Asset Ratio of the Financial Group and of the
Economic/Financial consolidate figures results from the inclusion of non-financial subsidiaries/associated
companies that have high liquidity and low fixed asset level, with consequent reduction of the fixed asset ratio of
the Economic/Financial consolidate figures.
14 – Intangible Assets
The book value of intangible assets with defined useful life subject to the amortization refers to amounts
disbursed for acquisition of rights for rendering of banking services (acquisition of payrolls), in the amount of
R$ 6,337,915 thousand and acquisition and development of software, in the amount of
R$ 162,368 thousand.
The book value of intangible assets with undefined useful life refers to goodwill in the acquisition of
Investments, in the amount of R$ 4,097,654 thousand. Said assets are not subject to amortization, as there
is no limit predictable for the period during which they should generate expectation of future profitability.
a) Movement of Intangible Assets by Class
R$ thousand
BB-Domestic and Foreign branches
Rights due to payroll acquisition
Rate of
(1)
Amortization
Balance at
12.31.2008
Contract
Amounts
Added
Acquisitions
Allocations of
the Period
Balance at
03.31.2009
3,815,668
3,972,399
--
97,338
(254,069)
20%
121,998
--
11,463
(5,280)
128,181
Accumulated amortization
--
(2,202)
--
--
(259,349)
(261,551)
Permanent loss
--
(51,550)
--
--
(2,207)
(53,757)
Goodwill in the acquisition of Investments (2)
--
--
--
3,540,051
--
3,540,051
4,040,645
--
3,648,852
(261,556)
7,427,941
Acquisition/development of software
Total
R$ thousand
BB-Consolidated
Rights due to payroll acquisition
Rate of
Amortization (1)
Balance at
12.31.2008
Amounts
Added
Acquisitions
Allocations of
the Period
Balance at
03.31.2009
Contract
6,083,846
3,972,399
2,268,178
97,338
(254,069)
20%
121,998
15,518
24,852
(5,280)
157,088
--
(2,202)
(892,088)
--
(259,349)
(1,153,639)
Permanent loss
--
(51,550)
--
--
(2,207)
(53,757)
Goodwill in the acquisition of Investments (2) (3)
--
557,603
--
3,540,051
--
4,097,654
4,598,248
1,391,608
3,662,241
(261,556)
9,390,541
Acquisition/development of software
Total
(1) The amortization of intangible assets is generally performed on a straight line basis over an estimated period of economic benefit and recorded as other
administrative expenses and other operating expenses.
(2) Refers to goodwill in the acquisition of 76,262,912 common shares of Banco Nossa Caixa, in the amount of R$ 3,540,051 thousand.
(3) Basically refers to goodwill in the acquisition of 219,257 common shares of Cia de Seguros Aliança do Brasil, in the amount of R$ 557,221 thousand.
b) Composition of the book value of intangible assets with defined useful life
R$ thousand
03.31.2009
(1)
Cost
Accumulated permanent loss
Book value
6,500,283
(1,153,639)
(53,757)
5,292,887
(1) In the 1st quarter/2008, the amount relating to the payroll acquisition was recorded in Other Assets - Prepaid Expenses, in the amount of R$ 3,293,560
thousand. In the 1st quarter/2009, it was recorded an impairment loss in Intangible Assets - Rights due to payroll acquisition, in the amount of R$ 2,207
thousand.
c) Estimate of Amortization of Intangible Assets with Defined Useful Life
R$ thousand
For the year ending:
Amounts to be
amortized
2009
2010
2011
2012
2013
2014
Total
1,402,730
1,492,756
1,279,814
962,539
153,340
1,708
5,292,887
15 – Deposits and Money Market Borrowing
a) Deposits breakdown
BB - Domestic and
Foreign branches
03.31.2009
BB-Consolidated
03.31.2008
03.31.2009
03.31.2008
Demand deposits
Corporate entities
Individual
Restricted
Government
In foreign currencies
Related companies
Special from Federal Treasury
Financial institutions
Domiciled abroad
Others
Savings deposits
Individual
Corporate entities
Related companies
Financial institutions
Interbank deposits
Time deposits
(1)
Time deposits in local currency
Remunerated judicial deposits
Special deposits relating to funds Funds and
(Note 20c)
programs
Time deposits in foreign currency
43,177,478
15,937,151
15,961,209
6,755,507
2,622,850
583,359
291,549
549,759
271,634
19,708
184,752
59,012,517
54,487,038
4,202,218
316,890
6,371
14,715,821
157,235,355
105,454,724
44,136,876
15,270,035
15,379,225
7,492,905
2,526,558
2,032,695
617,410
437,227
262,703
29,762
88,356
48,112,255
44,924,412
2,800,921
381,840
5,082
7,654,276
91,182,607
42,824,965
47,276,397
17,085,981
18,107,118
6,822,291
3,340,814
587,215
292,721
549,759
286,175
19,571
184,752
70,566,833
65,778,433
4,429,108
351,656
7,636
8,406,038
178,487,442
109,723,213
44,142,145
15,289,762
15,386,629
7,493,586
2,526,558
2,032,694
617,410
437,227
240,477
29,446
88,356
48,112,255
44,924,412
2,800,921
381,840
5,082
6,247,132
90,938,930
42,581,287
35,781,811
30,699,196
52,750,778
30,699,197
15,370,265
17,657,339
15,384,896
17,657,339
628,555
1,107
628,555
1,107
Deposits for investments
263,566
274,404,737
310,459
191,396,473
265,661
305,002,371
310,459
189,750,921
Total
Current Liabilities
Non Current Liabilities
222,605,644
170,055,591
246,704,136
168,752,208
51,799,093
21,340,882
58,298,235
20,998,713
(1) Includes time deposits time with automatic renewal in the amount of R$ 112,045 thousand (R$ 132,936 thousand at March
31, 2008) on BB-consolidated.
b) Deposits by chargeability
BB-Domestic and Foreign Branches
No
expiration
Deposits
Savings deposits
Interbank deposits
Time deposits
Investments deposits
Total
Up to 3
months
3 to 12
months
1 to 3
years
3 to 5
years
Over 5
years
03.31.2009 03.31.2008
43,177,479
--
--
--
--
--
43,177,479
44,136,876
59,012,517
--
--
--
--
--
59,012,517
48,112,255
8,026
14,715,820
7,654,276
956 157,235,355
91,182,607
--
9,508,293
3,851,900
805,502
542,099
51,338,744
11,941,583
23,284,648
18,135,407
52,534,017
263,566
--
--
--
--
153,792,306
21,449,876
27,136,548
18,940,909
53,076,116
--
263,566
310,459
8,982 274,404,737 191,396,473
Consolidated
No
expiration
Deposits
Savings deposits
Interbank deposits
Time deposits
Investments deposits
Total
Up to 3
months
3 to 12
months
1 to 3
years
3 to 5
years
Over 5
years
03.31.2009 03.31.2008
47,276,397
--
--
--
--
--
47,276,397
44,142,145
70,566,833
--
--
--
--
--
70,566,833
48,112,255
8,026
8,406,038
6,247,132
956 178,487,442
90,938,930
2,808
2,357,837
5,122,310
780,505
134,553
68,264,515
14,174,826
23,825,594
19,687,535
52,534,017
265,661
--
--
--
--
186,376,214
16,532,662
28,947,904
20,468,039
52,668,570
--
265,661
310,459
8,982 305,002,371 189,750,921
c) Expense with deposits
BB- Domestic and
Foreign branches
BB-Consolidated
1Q2009
1Q2008
1Q2009
1Q2008
(1,227,221)
(938,394)
(1,227,321)
(938,394)
(259,180)
(102,782)
(256,823)
(82,256)
(2,523,359)
(907,023)
(2,516,454)
Others (1)
(977,539)
(831,394)
(1,000,710)
Total
(4,987,299)
(2,779,593)
(5,001,308)
(1) Includes expenses of R$71,373 thousand of FGC and R$ 3,641 thousand of transactions abroad.
(904,520)
(848,226)
(2,773,396)
Savings deposits
Interbank deposits
Time deposits
d) Funding the Open Market
BB- Domestic and
Foreign branches
03.31.2009
BB-Consolidated
03.31.2008
03.31.2009
Own portfolio
Debentures
Securities abroad
Other
Securities abroad
Total
23,483,636
19,543,212
--404,018
1,514,196
2,022,210
75,319,175
60,636,837
-9,642,830
5,039,508
98,802,811
38,067,110
25,381,720
9,260,560
2,726,059
-698,771
-61,805,935
14,610,992
38,929,029
3,428,073
4,837,841
100,273,045
31,133,017
26,303,654
-888,940
404,018
1,514,196
2,022,210
75,319,175
60,636,837
-9,642,830
5,039,508
106,452,192
03.31.2008
37,545,168
25,183,970
8,936,367
2,726,059
-698,772
-61,771,094
14,610,992
38,894,189
3,428,073
4,837,840
99,716,262
Current Liabilities
93,849,248
4,953,563
91,036,526
9,236,519
101,500,968
4,951,224
90,479,743
9,236,519
e) Expense with money market
BB- Domestic and
Foreign branches
Own portfolio
Subject to repurchase agreements within free
movement
Total
BB-Consolidated
1Q2009
(532,508)
1Q2008
(755,385)
1Q2009
(517,014)
1Q/2008
(743,158)
(2,235,035)
(1,372,464)
(2,235,035)
(1,372,464)
(7,539)
(20,172)
(7,539)
(20,172)
(2,775,082)
(2,148,021)
(2,759,588)
(2,135,794)
16 – Borrowings
a) Domestic Borrowings
up to from 91 to
90 days
360 days
Exports
from 1 to from 3 to
3 years 5 years
-- 4,607,460
--
from 5 to
15 years
--
--
from 1 to from 3 to
3 years 5 years
from 5 to
15 years
Total
Total
12.31.2008 12.31.2007
4,607,460
--
b) Foreign Borrowings
up to from 91 to
90 days
360 days
Borrowings from BB Group companies
overseas
Borrowings by BB branches overseas
Onlend to the public sector
Imports
Bankers
Exports
Total
1,496,250 1,471,135 3,587,680
--
806,898 1,735,388
13,903
-358,177
567,077
101,858
175,134
155,597
381,464
--33,045
11,649
-2,819,515 3,751,483 4,324,257
-556,543
108,403
--664,946
--
Total
Total
12.31.2008 12.31.2007
6,555,065
2,148,283
-- 2,556,189
417,407 1,899,204
57,812
598,804
-381,464
-44,694
475,219 12,035,420
661,885
1,668,398
458,021
456,289
47,400
5,440,276
6,570,996
5,464,424
1,842,742
3,597,534
Current Liabilities
BB-Consolidated
Borrowings by BB Group companies
overseas
Onlend to the public sector
Imports
Bankers
Exports
Total
up to
90 days
from 91 to
360 days
807,291
1,735,388
-83,918
381,464
13,116
1,285,789
358,177
122,837
-7,143
2,223,545
from 1 to from 3 to from 5 to
Total
Total
3 years 5 years
15 years 12.31.2008 12.31.2007
13,903
--
--
2,556,582
662,078
567,077 556,543
79,773 61,822
----660,753 618,365
417,407
35,922
--453,329
1,899,204
384,272
381,464
20,259
5,241,781
1,668,398
270,946
456,291
-3,057,713
3,502,455
1,739,326
1,509,252
1,548,461
Current Liabilities
b) Official Institutions
PROGRAMS
FINANCIAL CHARGES
BB - Domestic and
Foreign branches
03.31.2009
National Treasury - Rural credit
Farming/livestock breeding
Cocoa
Pronaf
Recoop
Others
BNDES
Other
Total
Current Liabilities
03.31.2009
03.31.2008
3,531,534
3,184,306
TR or 9% p.a.
40,794
40,025
40,794
40,025
66,096
45,818
66,096
45,818
3,254,979 2,899,025
3,254,979
2,899,025
198,083
1,355
168,309
1,356
198,083
1,355
10,719,800 9,198,324
10,752,523
9,198,324
--
164,794
--
6,750,919 5,175,380
3.75% p.a. to 11% p.a. or TJLP / var.
camb. + 0.5% to p.a. to 9.69% p.a.
168,309
1,355
-3.75% p.a. to 11% p.a. or TJLP / var.
camb. + 0.5% p.a. to 4.5% p.a.
Other Official Institutions
Funcafé
03.31.2008
3,531,533 3,184,306
TJLP + 0.6% p.a. or 6.35% p.a.
TMS (Available) ou
0.5% p.a. a 5.5% p.a. (Allocated)
5.75% p.a. to 7.25% p.a.
--
Obligations by lending - CEF
Finame
BB-Consolidated
TR or TMS (Available) ou TJLP - 0,5
p.a. or 3% p.a. or 5% p.a. (Allocated)
--
6,826,217
5,194,177
944,696
673,319
944,893
673,495
944,308
663,920
944,308
663,920
388
9,399
21,946,948 18,231,32
9
13,556,920 10,331,44
8
8,390,028 7,899,881
585
9,575
22,219,961 18,250,302
13,765,373 10,339,640
8,454,588 7,910,662
17 - Funds Obtained in Foreign Capital Markets (in R$/US$ million)
Issued
value
OPERATIONS
Cupom
Date of
funding
Maturity
Balance at
03.31.2009
Balance at
03.31. 2008
Issue
Reais
currency (**)
Issue
Reais
currency
(*)
DIRECT FUND RAISING
Global Medium - Term Notes Program (1)
Subordinated debt
Perpetual Bonuses
(2) (3) (4)
Certificates of deposit (1)
9,75% p.a.
jul/07
jul/17
R$ 317
317
R$ 301
301
US$ 300
8,5% p.a.
sep/04
sep/14
US$ 300
694
US$ 299
523
US$ 500
7,95% p.a.
jan/06
--
US$ 507
1,174
US$ 508
888
--
--
--
--
525
US$ 23
R$ 350
(2) (3)
(8)
--
Total
2,710
39
1.751
FUND RAISING THROUGH SPECIAL-PURPOSE COMPANIES - SPC
Securitization of the future flow of payment orders overseas
(1) (5) (7)
US$ 450
7,890% p.a.
dec/01
dec/08
--
--
US$ 123
215
(1) (5) (7)
US$ 300
Libor 3m+0,60 p.a.
jul/02
jun/09
US$ 14
33
US$ 72
125
(1) (5) (7)
US$ 40
7,890% p.a.
sep/02
sep/09
US$ 4
9
US$ 11
20
(1) (5) (7)
US$ 120
7,26% p.a.
mar/03
mar/10
US$ 28
64
US$ 53
93
(1) (5) (7)
US$ 250
6,55% p.a.
dec/03
dec/13
US$ 182
422
US$ 214
374
(1) (5) (7)
US$ 250
Libor 3m+0,55% p.a.
mar/08
mar/14
US$ 250
579
US$ 251
438
(1) (5) (7)
US$ 200
Libor 3m+1,2% p.a.
sep/08
sep/15
US$ 199
462
--
--
(1) (5) (7)
US$ 150
5,25% p.a.
apr/08
jun/18
US$ 150
348
--
--
173
US$ 104
181
41
US$ 26
Securitization of the future flow of credit card invoice receivables
(2) (6) (7)
US$ 178
5,911% p.a.
jul/03
jun/11
US$ 75
Securitization of the future flow of credit card invoice receivables
(2) (6) (7)
US$ 45
4,777% p.a.
jul/03
jun/11
US$ 18
45
Total
2,131
1.491
TOTAL DAS CAPTAÇÕES
4,841
3.242
* Currency exchange rate: US$ 1.00 x R$ 1.7483 (03.31.2008)
** Currency exchange rate: US$ 1.00 x R$ 2.3144 (03.31.2009)
(1) Recorded under Foreign marketable securities.
(2) Funding recorded in Other Liabilities, with subordinated debt recorded in Liabilities from the Issue of Subordinated Debt;
Perpetual Bonuses in Obligations due to Issuance of Hybrid Capital and Debt Instruments and the securitization of the future
flow of receivables from credit cards in Contracts of Assumption of Liabilities.
(3) The amount of US$ 288 million (R$ 665 million) of the subordinated debt and the sum of US$ 490 million (R$ 1,134
million) of the perpetual bonuses are included in the Referential Equity Amount (RE), level II, in conformity with CMN
Resolution 3444/2007.
(4) The operation can be redeemed at the Bank’s option from 2011 or at each subsequent quarterly payment of interest,
providing it is authorized beforehand by BACEN. The terms of these Perpetual Bonuses allow the Bank to suspend quarterly
payments of interest and/or accessory payments on the aforesaid securities issued (which will neither be due or accumulated)
if: (i) the Bank determines that it is incapable or the payment of these charges does not allow the Bank to be in conformity with
the capital adequacy levels required by BACEN or its financial indicators are below the minimum level required by the
regulations applicable to Brazilian banks; (ii) BACEN or the Regulatory Authorities request the suspension of payments of the
charges; (iii) an insolvency or bankruptcy event occurs; (iv) a default event occurs; or (v) the Bank decides to suspend these
payments for any other reason. If the Bank decides to suspend the payment of interest and accessories due on the Perpetual
Bonuses on account of item (v) above, the terms of the Perpetual Bonuses provide that, until such payments have been
resumed for a period equivalent to 12 months, the Bank (a) cannot recommend to its stockholders and, as permitted by the
applicable legislation, will act in order to avoid the statement, payment or distribution of dividends or interest on own capital on
its common stock and (b) will suffer restrictions on its capacity to redeem or otherwise acquire its common stock.
(5) The Special Purpose Company - SPC “Dollar Diversified Payment Rights Finance Company” was created with the
following purposes:
(a) issue and sell securities in the international market; (b) use funds raised with the issue of securities to pay for the purchase
from BB of BB's rights on payment orders issued by correspondent banks in the USA and by BB's New York branch, in US
dollars, to any BB branch in Brazil (Remittance Rights); and (c) to make payments of principal and interest with regard to
securities and other payments provided in the agreements covering the issue of such securities.
(6) The Special Purpose Company - “Brazilian Merchant Voucher Receivables” was created with the following purposes: (a) issue
and sell securities in the international market; (b) to use funds raised with the issue of securities to pay for the purchase of current
and future rights of Companhia Brasileira de Meios de Pagamento ("Visanet") against Visa International Service Association over
the Receivables arising from: (i) credit or charge purchases made in Brazilian territory, in any currency processed by Visanet, with
Visa cards issued by financial institutions located outside of Brazil, or (ii) credit or charge purchases processed by Visanet in
foreign currency and made with Visa cards issued by financial institutions located in Brazil; and (c) to make payments of principal
and interest with regard to securities and other payments provided in the agreements covering the issue of such securities. BB is
the beneficiary of 44.618488% of the funds, calculated based on the equity interest held in Visanet, and the remaining funds
made available to the other Brazilian financial institution which holds an interest in Visanet.
(7) The Special Purpose Entities were organized under the laws of the Cayman Islands and declare that they have no relevant
asset or liability other than the rights and duties originating from the contracts for issue of securities. BB does not have control,
is not a shareholder, the owner, or is a beneficiary of any of the results of operations of the SPCs. The liabilities arising from
the securities issued are paid by the SPCs using the funds accumulated in its account.
(8) Securities with a term below 360 days, whereas the interest rate of the certificates are issued in Brazilian Reais (R$1
million) is 13.84 per annum and the rate of those issued in dollar (US$ 218 millions) is between 0.47% and 4.23% per annum.
and the rate of those issued in euro (EUR 4 millions) is between 1.32% and 1.66% per annum.
18 - Other liabilities
a) Financial and development funds
BB - Domestic and
Foreign branches
PIS/Pasep
Special Lending Program for Agrarian Reform - Procera
Merchant Navy
Consolidation of Family Farming (CAF)
Fight against Poverty/Our First Land (CPR/NPT)
Land and Agrarian Reform - BB Banco da Terra
Other
Total
Current Liabilities
BB-Consolidated
03.31.2009
03.31.2008
03.31.2009
03.31.2008
1,806,746
302,036
291,027
25,405
22,356
1,726
85,281
2,534,577
1,581,250
313,689
38,813
118,018
20,925
1,309
51,385
2,125,389
1,806,746
302,036
291,027
25,405
22,356
1,726
1,292,045
3,741,341
1,581,250
313,689
38,813
118,018
20,925
1,309
51,385
2,125,389
419,782
218,303
419,782
218,303
2,114,795
1,907,086
3,321,559
1,907,086
b) Fund for Worker Assistance (FAT) and Fund to Guarantee the Increase in Employment and
Earnings (FUNPROGER)
FAT is a special accounting and financial fund, established by Law 7998/1990, attached to the Ministry
of Labor and Employment (MTE) and managed by the Executive Council of the Worker Assistance
Fund - Codefat. CODEFAT is a collective, tripartite and equal level organization, composed of
representatives of workers, employers and government, which acts as the manager of FAT.
The main actions to promote employment using FAT funds are centralized in the Programs for the
Increase in Earnings (PROGER), whose resources are allocated by special deposits, established by
Law 8352/1991, in official federal financial institutions (including, among others, PROGER in the
Urban - Investment and Working Capital - and Rural, the National Program for Strengthening of
Family Farming - Pronaf, the program that allocates resources for the purchase of construction
materials - FAT Housing, in addition to the special lines such as FAT Rural and Urban Integration,
FAT Giro Setorial - Micro and Small-Sized Companies, FAT Giro Setorial - Medium and Large-Sized
Companies, FAT Fomentar - Micro and Small-Sized Companies, FAT Fomentar - Medium and
Large-Sized Companies, FAT Giro Agropecuário, FAT Turismo Senior and FAT Digital Inclusion).
The FAT special deposits, allocated with Banco do Brasil, while available, incur interest on a daily
“pro rata” basis using the TMS (Average Selic Rate). As they are applied in loans, the interest rate is
changed to the TJLP (Long-term Interest Rate) during the effective period of the loans. The income
on the Bank’s funds is paid to FAT on a monthly basis, as established in CODEFAT Resolution
439/2005 and 489/2006.
The Guarantee Fund for Generation of Employment and Earnings (Funproger) is a special
accounting fund established on November 23, 1999 by Law 9872/1999, amended by Law
10360/2001, and by Law 11110/2005 and regulated by Codefat Resolution 409/2004, and is
managed by Banco do Brasil under the supervision of Codefat/MTE, whose balance is R$ 334,268
thousand (R$ 337.744 thousand at March 31, 2008).
The objective of FUNPROGER is provide guarantees to entrepreneurs who do not have the
necessary guarantees of their own to contract PROGER Urbano and PNMPO financing, through the
payment of a commission. The net assets of FUNPROGER are accumulated through funds arising
from the difference between the average SELIC Rate and the Long-Term Interest Rate (TJLP) in
respect of the remuneration of the special deposit balances available in the FAT. Other sources of
funds are the earnings from its operations and the income on its cash resources paid to Banco do
Brasil, the Fund manager.
Return of FAT funds
Resolution/
TADE
Programs
PROGER (Rural) and PRONAF
Pronaf Investimento
Giro Rural - Aquisição de Títulos
Giro Rural Fornecedores
Pronaf Custeio
Rural Investimento
Rural Custeio
Proger Urbano
Urbano Investimento
Urbano Capital de Giro
Empreendedor Popular
Others
FAT Giro Setorial - Medium and Large-Sized
Comp.
FAT Giro Setorial Micro e Small Comp.
FAT Fomentar - Medium and Large-Sized
Comp.
FAT
Fomentar Micro and Small Comp.
Rural Area Integration
Urban Area Integration
Exports
FAT Giro Cooperativo Agropecuário
FAT Giro Setorial Vehicles MGE
FAT Giro Setorial Vehicles MPE
Digital Inclusion
Total
Available
Invested
(1)
Type
Total
(2)
(3)
Initial
Date
Final
Date
757.115
6.682.503
7.439.617
-
3.675.571
1.650.758
3.675.571
1.650.758
RA
SD
11/2005
-01/2008 01/2014
14/2006
-
637.885
637.885
RA
08/2006
04/2005
419.934
183.846
603.780
RA
11/2005
--
13/2005
13.557
521.330
534.886
RA
11/2005
--
02/2006
323.624
13.113
336.737
RA
11/2005
--
18/2005
86.863
76.310
6.241.796
5.434.479
6.328.660
5.510.790
RA
11/2005
--
15/2005
-
723.025
723.025
RA
11/2005
--
RA
11/2005
--
05/2005
03/2005
--
01/2006
10.553
84.292
94.845
09/2006
315.438
67.449
522.728
230.124
838.166
297.573
RA
09/2007
--
08/2006
12/2006
36.819
-
122.600
129.766
159.419
129.766
RA
RA
09/2007
07/2006
---
11/2006
709
19.697
20.405
RA
08/2006
--
26/2005
8.809
4.392
13.202
RA
11/2005
--
25/2005
27/2005
950
11.835
3.261
11.835
4.210
RA
RA
11/2005
11/2005
---
10/2006
544
747
1.291
RA
07/2006
--
08/2006
80.000
--
80.000
RA
02/2009
--
09/2006
09/2005
120.000
158
-306
120.000
465
RA
RA
02/2009
11/2005
--
1.159.416
13.447.027
14.606.443
(1) Funds remunerated by the Average Selic Rate (TMS).
(2) Funds remunerated by the TJLP.
(3) Form: PU (Portion only the deadline), PAS (and successive annual installments) and PSS (and subsequent yearly installments).
c) Taxes and social security
BB - Domestic and
Foreign branches
(1)
Taxes on profits and contributions to pay
(2)
Provision for correction of legal process
Provision for tax risks
(3)
Provision for taxes and contributions deferred
Tax to colect
Provision for taxes and contributions on profits
Total
Current Liabilities
03.31.2009 03.31.2008
BB-Consolidated
03.31.2009
03.31.2008
6,586,379
7,841,712
1,050,441
2,795,307
4,281,710
129,974
624,104
15,467,915
6,131,305
517,631
243,662
3,604,322
89,151
488,071
11,074,142
6,670,006
1,357,861
3,175,045
4,281,710
1,346,201
855,645
17,686,468
6,167,256
707,492
346,253
3,604,322
750,904
667,822
12,244,049
13,151,964
2,315,951
11,074,142
--
14,053,745
3,632,723
11,532,185
711,864
(1) R$ 6,571,673 thousand (R$ 6.118,745 thousand on 03.31.2008) relating to the proceeding of full carryfoward of the accumulated tax loss of
Income Tax and of the negative bases of Social Contribution Tax.
(2) Relating to restatement of the proceeding of full carryfoward of the accumulated tax loss of Income Tax and of the negative bases of Social
Contribution Tax.
(3) Includes the value of R$ 2,315,952 thousand, referring to the deferral of taxes on the gain of the actuarial pension plan for retirees and the Previ.
d) Subordinated debt
BB - Domestic and
Foreign branches
03.31.2009
Subordinated debts eligible as capital
Other subordinated debt
Total
Current liabilitites
Long Term Liabilities
(1)
03.31.2008
BB-Consolidated
03.31.2009
03.31.2008
14,342,422
28,180
14,370,602
10,384,885
20,359
10,405,244
14,342,422
28,180
14,370,602
10,384,885
20,291
10,405,176
2,242,848
12,127,754
-10,405,244
2,242,848
12,127,754
-10,405,176
(1) Includes R$ 11,434,133 thousand (R$ 9.882.210 thousand at March 31, 2008) relating to funds from the Central-Western Constitutional
Fund (FCO) as subordinated debt and as Level II Referential Shareholders’ Equity, because of their low level of obligation and length of term in
the Bank. (CMN Vote 067, of June 28, 2001, and BACEN-Direct. Official Letter 1.602, of June 29, 2001) and the value of R$ 2,242,848
thousand, referring to funds raised subject to CBD (Central Bank Letter - Deorf No 2106/2009 and No 2746/2009 respectively).
e) Sundry
BB - Domestic and
Foreign branches
(1)
Provisions for payments
Liabilities for purchase of goods and rights
(2)
Credit card operations
Provisions for labor demands
Provisions for civil claims
Sundry creditors - domestic
Creditors by residual value advances
Liabilities for official agreements
Funds restricted to credit operations
Accounts payable for payment services provided
Other provisions(3)
Contracts of assumption of liabilities
Sundry creditors - overseas
Provisions for guarantees provided
Other
Total
Current Liabilities
Long term Liabilities
BB-Consolidated
12.31.2008
8,929,112
5,485,376
5,058,181
3,338,919
2,318,820
1,282,286
-768,516
120,347
526,674
-213,537
48,331
47,546
10,148
28,147,793
12.31.2007
6,696,275
98,706
4,060,514
2,408,566
1,306,498
1,131,254
1
699,032
80,392
348,884
-358,565
43,192
32,908
7,116
17,271,903
12.31.2008
7,789,470
5,485,376
5,058,181
4,251,456
3,499,249
2,741,953
1,608,173
1,005,025
670,155
528,191
619,214
213,537
54,405
47,581
295,902
33,867,908
12.31.2007
6,558,543
98,706
4,060,514
2,423,350
1,324,868
1,807,800
339,806
699,032
481,077
348,884
-226,890
44,549
32,936
263,977
18,710,932
21,112,407
7,035,386
12,923,040
4,348,863
21,914,013
11,953,895
13,409,644
5,301,288
(1) Includes R$ 5,738,283 thousand (R$ 4,111,185 thousand at March 31, 2008) relating to "Actuarial Liability of the Informal Plan" (exclusive
responsibility of the Bank) and the "Cassi Actuarial Liability" (Note 26.f).
(2) Includes the yet to mature credit card installments payable to storekeepers, in the amount of R$ 2,413,139 thousand (R$ 1,921,113 at March 31,
2008).
(3) Provisions originated from Banco Nossa Caixa related related to FCVS, recorded base don historical estimatives, in the amount of R$260,746
and provisions related to health plan – based on actuarial evaluation, in the amount of R$197,786 thousand.
(3) Referem-se a provisões constituídas no Banco Nossa Caixa, para cobertura, principalmente, de perdas com o FCVS (créditos cedidos) constituída
com base em estimativas de perdas por negativa de cobertura total ou parcial sobre operações cedidas, R$ 260.746 mil e provisão para planos de
saúde – avaliação atuarial, R$ 197.786 mil.
19 - Operations related to the activities of insurance, pension and capitalization
a) Technical Provisions
03.31.2009
03.31.2008
BB–Consolidated
Insurance
Pension
Mathematical provision for future benefits
696
9,406,848
Mathematical provision for vested benefits
235
330,991
--
856
Mathematical provision for unearned premiums
767,909
--
Provision for unsettled claims
848,032
--
Provision for financial surplus
--
Provision for insufficiency of contribution
Provision for financial fluctuation
Mathematical provision for redemptions
Provision for IBNR
Provision for insufficiency of premiums
Capitalization
Total
Insurance
Pension
Capitalization
Total
9,407,544
111
7,342,450
--
7,342,561
--
331,226
300
277,565
--
277,865
1,510,482
1,511,338
--
--
1,300,538
1,300,538
--
767,909
455,049
--
--
455,049
--
848,032
469,224
--
--
469,224
283,541
--
283,541
--
306,526
--
306,526
--
146,245
--
146,245
--
128,892
--
128,892
--
136,188
--
136,188
--
113,380
--
113,380
--
159,621
2,727
--
162,348
81,907
1,608
--
83,515
48,036
16,784
--
64,820
3,984
12,194
--
16,178
47,459
--
--
56,432
56,432
--
--
47,459
33,299
19,982
1,870
55,151
13,789
17,032
3,087
33,908
Total
1,857,828
10,344,162
1,568,784
13,770,774
1,024,364
8,199,647
1,351,084
10,575,095
Short-Term
1,472,426
346,622
1,568,784
3,387,832
1,016,848
288,947
1,351,084
2,656,879
Long-Term
385,402
9,997,540
--
10,382,942
7,516
7,910,700
--
7,918,216
Total
Insurance
Pension
Capitalization
Total
Provision for prize draws and redemptions
Other provisions
b) Technical Provisions by product
03.31. 2009
03.31.2008
BB–Consolidated
Insurance
Pension Capitalization
Automotive
520.012
--
--
520.012
424.210
--
--
424.210
Life
643.218
--
--
643.218
397.264
--
--
397.264
Property/casualty
624.979
--
--
624.979
162.771
--
--
162.771
DPVAT
53.317
--
--
53.317
28.831
--
--
28.831
Health
16.302
--
--
16.302
11.288
--
--
11.288
Capitalization
--
--
1.568.784
1.568.784
--
--
1.351.084
1.351.084
Free benefit generating plan - PGBL
Free benefit generating life insurance plan VGBL
Traditional plans
--
4.011.068
--
4.011.068
--
2.773.579
--
2.773.579
--
3.212.577
--
3.212.577
--
2.170.223
--
2.170.223
--
3.120.517
--
3.120.517
--
3.255.845
--
3.255.845
1.857.828
10.344.162
1.568.784
13.770.774
1.024.364
8.199.647
1.351.084
10.575.095
Total
c) Guarantee linked to Technical Provisions
03.31. 2009
03.31.2008
BB–Consolidated
Insurance
Shares in Investment Funds (VGBL and
PGBL)
Shares in Investment Funds (except VGBL
and PGBL)
Total
Insurance
Total
--
7,119,600
--
7,119,600
--
4,869,164
--
4,869,164
1,083,836
4,174,629
556,255
2,485,867
1,019,497
4,061,619
758,586
2,332,207
554,201
1,125,291
322,562
2,002,054
284,757
1,048,974
258,823
1,592,554
Private securities
229,714
26
234,201
463,941
104,954
1,625
105,656
212,235
--
--
--
--
--
--
--
--
249,076
--
--
249,076
179,549
--
--
179,549
30,290
Shares
Credit Receivables
Deposits held at IRB and judicial deposits
Total
1,457
--
--
1,457
30,290
--
--
628
--
--
628
721
--
--
721
1,793,662
10,577,124
1,640,599
14,011,385
1,156,526
8,405,630
1,383,976
10,946,132
d) Retained insurance premiums, pension plan contributions and capitalization
certificates
BB Consolidate
Premiums issued (VGBL retirement)
Supplementary pension contributions (includes VGBL part risk)
Coinsurance premiums ceded
Reimbursed premiums (return of VGBL contribution)
Premiums issued net (premium issued - premium reimbursed)
Reinsurance premiums ceded, consortiums and funds
Retained insurance premiums, pension plans and capitalization
BB Consolidate
Premiums issued (VGBL retirement)
Supplementary pension contributions (includes VGBL part risk)
Coinsurance premiums ceded
Reimbursed premiums (return of VGBL contribution)
Premiums issued net (premium issued - premium reimbursed)
Premiums redeemed (redemption VGBL)
Reinsurance premiums ceded, consortiums and funds
Retained insurance premiums, pension plans and capitalization
Insurance
657,792
--(3,953)
(4,656)
649,183
(40,979)
608,204
Insurance
274,698
--(1,762)
(1,749)
271,187
-(16,762)
254,425
1Q2009
336,408
278,608
--(2,903)
333,505
-612,113
--254,942
--254,942
-254,942
1Q2009
138,318
125,913
--(299)
263,932
(43,435)
-220,497
--166,095
--166,095
--166,095
Total
994,200
278,608
254,942
(3,953)
(7,559)
1,237,630
(40,979)
1,475,259
Total
413,016
125,913
166,095
(1,762)
(2,048)
701,214
(43,435)
(16,762)
641,017
e) Results from Insurance, Pension Plan and Capitalization Operations
BB Consolidate
Financial Income
Financial Revenues
Financial Expenses
Restatement and interest of technical reserves
Income from operations
Retained premiums and contributions
Retained Claims
Marketing Expenses
Expenses with prize draws and redemptions of financial bonds
Expenses with benefits and redemptions of pension plans
Total
BB Consolidate
Financial Income
Financial Revenues
Financial Expenses
Restatement and interest of technical reserves
Income from operations
Retained premiums and contributions
Retained Claims
Marketing Expenses
Expenses with prize draws and redemptions of financial bonds
Expenses with benefits and redemptions of pension plans
Total
Insurance
63,965
80,657
(16,692)
(11,612)
300,183
608,204
(5,968)
(265,391)
(36,662)
--352,536
Insurance
21.797
27.785
(5.988)
(5.110)
94.876
254.425
7.978
(127.641)
(39.886)
--111.563
1Q2009
188,212
277,357
(89,145)
(155,924)
(3,676)
612,113
(606,587)
-(6,998)
-(2,204)
28,612
Total
68,062
68,872
(810)
(31,445)
6,649
254,942
(4,810)
-(25,122)
(218,361)
-43,266
320,239
426,886
(106,647)
(198,981)
303,156
1,475,259
(617,365)
(265,391)
(68,782)
(218,361)
(2,204)
424,414
1Q2009
Total
131.618
161.561
(29.943)
(107.555)
(1.927)
220.497
(204.587)
(2.106)
(3.514)
-(12.217)
22.136
25.957
29.185
(3.228)
(14.085)
7.744
166.095
(3.403)
-(7.710)
(147.238)
-19.616
179.372
218.531
(39.159)
(126.750)
100.693
641.017
(200.012)
(129.747)
(51.110)
(147.238)
(12.217)
153.315
20 - Analysis of Income Statement Items
a) Banking service fees
Income from cards (1)
Fund Management
Collections
Account fees
Loan operations
Interbank
Funding
Official services
Insurance, pension and capitalization
Brokerage and custody
Rates of administration of consortia
Services rendered to related companies
Other services (2)
Total
BB-Consolidated
1Q2009
1Q2008
1Q2009
1Q2008
376,757
274,358
256,532
184,866
147,536
119,257
110,779
77,857
30,843
70,774
298,075
299,158
248,589
157,769
214,011
176,640
101,964
53,850
27,737
50,470
568,648
445,499
256,816
185,340
147,547
119,257
110,779
77,857
69,814
19,813
461,602
476,876
248,765
157,855
214,018
176,640
101,964
53,850
42,989
69,034
-9,721
-8,201
18,562
17,321
17,574
18,405
49,541
1,708,821
51,051
1,687,515
217,454
2,254,707
232,592
2,272,164
(1) Includes, in BB-Consolidated of March, 31 2009, the amount of R$ 191,891 thousand (R$163,527 thousand on March, 31 2008), referring to
result (proportionate to the interest of BB BI) of the operations of Cia. Brasileira de Meios de Pagamentos - Visanet.
(2) Includes, in BB-Consolidated of March, 31 2009, the amount of R$ 128,752 thousand (R$150,887 thousand on March, 31 2008), referring to
the services rendered by non-financial associated companies.
b) Bank fee income
Package of services
Credit operations and cadastre
Account deposits
Transfer of resources
Total
BB-Consolidated
1Q2009
1Q2008
1Q2009
1Q2008
458,611
151,144
52,995
25,658
688,408
433,491
93,366
78,686
37,484
643,027
458,641
151,144
53,043
25,658
688,486
433,491
93,366
78,686
37,484
643,027
c) Personnel expenses
BB- Domestic and Foreign
branches
1Q2009
Salaries
Provision for labor claims (1)
Personnel provisions
Social charges
Benefits
Supplementary Welfare
Training
Directors’ fees
Total
1Q2008
(984,246)
(815,614)
(1,023,021)
(131,618)
(384,652)
(350,407)
(339,655)
(294,514)
(297,631)
(255,136)
(28,180)
(21,331)
(8,582)
(9,797)
(4,596)
(3,228)
(3,070,563) (1,881,645)
BB-Consolidated
1Q2009
1Q2008
(1,032,822)
(846,105)
(1,023,021)
(131,618)
(384,652)
(350,407)
(356,436)
(305,523)
(307,789)
(261,158)
(29,101)
(22,069)
(9,457)
(10,375)
(9,204)
(5,324)
(3,152,482) (1,932,579)
(1) Includes in the 1st quarter of 2009, the value of R$ 921,230 thousand relating to outcome of periodic reviews of the impacts caused property
trial, in which the Bank of Brazil is an accused, author, or the interested party.
d) Other Administrative Expenses
branches
Expenses with tax and civil lawsuits(1)
Amortization(2)
Communications
Third party services
Data processing
Depreciation
Transport
Security services
Financial system services
Rent
Advertising and publicity
Water, electricity and gas
Maintenance and upkeep
Specialized technical services
Promotion and public relations
Materials
Domestic travel
Total
BB-Consolidated
1Q2009
1Q2008
(635,778)
(87,482)
(314,663)
(54,605)
(244,932) (253,713)
(176,755) (181,619)
(172,943) (168,585)
(150,068) (136,035)
(142,166) (127,702)
(134,501) (122,202)
(105,853) (103,728)
(92,698)
(75,858)
(63,600)
(39,461)
(73,489)
(69,364)
(68,353)
(61,157)
(30,571)
(18,343)
(28,325)
(24,779)
(24,653)
(23,304)
(22,830)
(20,455)
(60,961)
(76,701)
(2,543,139) (1,645,093)
1Q2009
1Q2008
(635,778)
(87,482)
(317,113)
(56,112)
(255,257)
(259,933)
(206,309)
(198,047)
(178,071)
(181,953)
(154,831)
(138,334)
(147,193)
(130,694)
(134,723)
(122,306)
(109,801)
(105,563)
(101,038)
(82,772)
(85,476)
(45,106)
(74,407)
(69,809)
(70,503)
(62,324)
(60,246)
(33,633)
(28,485)
(32,666)
(26,035)
(25,067)
(24,425)
(21,666)
(81,454)
(155,908)
(2,691,145) (1,809,375)
(1) Includes in the 1st quarter of 2009, the value of R$ 445.802 thousand relating to the outcome of periodic reviews of the impacts caused
property trial, in which the Bank of Brazil is an accused, author, or the interested party.
(2) Includes in the 1st quarter of 2009, the value of R$ 254.292 thousand of expenses for allocation of business relationship, previously reported
in group of other operating expenses, which began to be recorded in this group, from January/2009, in accordance with Resolution BACEN
No 3357/2008.
e) Tax Expenses
Cofins
ISSQN
PIS/Pasep
Others
Total
BB-Consolidated
1Q2009
1Q2008
1Q2009
1Q2008
(379,241)
(100,040)
(61,627)
(14,567)
(555,475)
(320,617)
(100,687)
(52,100)
(14,202)
(487,606)
(431,315)
(121,576)
(71,632)
(42,878)
(667,401)
(362,486)
(117,298)
(60,232)
(25,756)
(565,772)
f) Other Operating Income
Foreign exchange gains
Equalization of rates - Law 8427
Recovery of charges and expenses
Income from guarantee deposits
Previ - Contributions parity agreement
Administrative expenses - Reversal of provisions
Credit card transactions
Income from Specific Credits
Dividends received
Income from Special Operations
Personnel expenses - Reversal of provisions
Others
Total
1Q2009 1Q2008
588,636
55,818
449,029 275,774
355,796 288,906
302,792 250,041
56,600
76,159
47,368
57,094
44,285
40,969
21,779
19,358
20,188
15,985
12,577
11,661
1,426
24,463
12,509 135,789
1,912,985 1,252,017
BB-Consolidated
1Q2009
588,636
449,029
310,859
302,792
56,600
47,368
44,285
21,779
20,188
12,577
1,426
200,847
2,056,386
1Q2008
55,818
275,774
289,196
250,041
76,159
57,094
40,969
19,358
15,985
11,661
24,463
277,241
1,393,759
g) Other operating expenses
branches
BB-Consolidated
Credit card transactions
1Q2009
(169,691)
1Q2008
(98,443)
1Q2009
(169,691)
1Q2008
(98,443)
Restatement of guarantee deposits
(160,788)
(137,364)
(160,788)
(137,364)
Foreign exchange adjustments
(144,215)
(51,506)
(144,215)
(51,506)
CASSI - Expense with provision (CVM Resolution 371)
(135,492)
(142,847)
(135,492)
(142,847)
(1)
(111,368)
(270,928)
(111,368)
(270,928)
Updating of the pension liability
(66,054)
(47,920)
(66,054)
(47,920)
Credit set acquired
(53,499)
(16,721)
(53,499)
(16,721)
(23,964)
(17,720)
(23,964)
(17,720)
(23,954)
(18,139)
(23,954)
(18,139)
Update Interest Own Capital / Dividends
(23,694)
(9,088)
(23,694)
(9,088)
Expenses from discounts granted on renegotiations
(20,169)
(18,181)
(20,169)
(18,181)
Expenses of BB – ATM
(17,850)
(28,221)
(17,850)
(28,221)
Law 9138/95 - Restatement of funds to be returned to the
Federal Treasury
(12,293)
(10,150)
(12,293)
(10,150)
Premium paid to clients - Loyalty Program
Securitization SWIFT MT100 - liabilities with the SPC
(2)
INSS
Fees for the use of Sisbacen
Previ- Actuarial Asset Amortization - CVM Resolution 371
Others
Total
(6,742)
(30,994)
(3,603)
(2,844)
(2,224)
(90,532)
(192,424)
(138,923)
(1,168,024) (1,130,521)
(6,742)
(30,994)
(3,603)
(2,844)
(2,224)
(90,532)
(395,276) (280,697)
(1,370,876) (1,272,295)
(1) The reduction in the 1st quarter of 2009, totaling R$ 254.292 thousand, relates to the reclassification of expenditure from the budget
negotiating relationship (Note 20.d). the reclassification is being performed since December 2008, in accordance with Carta-Circular Bacen
no. 3357/2008.
(2) In BB-Consolidated, these expense are classified as “Foreign marketable securities Expense”.
h ) Non-operating income
branches
Non-operating income
Provision/(reversal) for devaluation of other assets
Sale of assets
Profit on the sale of assets
(1)
Other non-operating income
Rental income
Provision/(reversal) for loss with shares and quotas
Capital gains
Non-operating expenses
Devaluation of other assets
Other non-operating expenses
Capital losses
Loss on sale of assets
Losses with shares and quotas
Total
1Q2009
29,502
11,360
6,851
4,565
1,013
3,617
1,111
985
(13,483)
(7,984)
(781)
(3,418)
(843)
(457)
16,019
1Q2008
45,309
7,147
17,139
14,819
789
3,360
335
1,720
(15,345)
(5,436)
(377)
(4,709)
(1,023)
(3,800)
29,964
BB-Consolidated
1Q2009
33,332
11,360
6,851
5,251
3,984
3,785
1,111
990
(16,845)
(7,984)
(3,515)
(3,418)
(1,471)
(457)
16,487
(1) Includes the gain with the sale of other assets of Visa Inc., in 03.21.20009-consolidated, in the amount of R$ 159,259 thousand.
1Q2008
245,737
7,147
17,139
14,839
194,318
4,052
6,490
1,752
(21,596)
(5,465)
(3,526)
(7,782)
(1,023)
(3,800)
224,141
21 - Stockholders' Equity
a) Book Value and Market Value of the Share
Stockholders' equity of R$ 30,858,853 thousand (R$ 25,406,842 thousand at March 31, 2008)
corresponds to a net book value of R$ 12.02 per share (R$ 9.99 at March 31, 2008). The market value
of the common share at March 31, 2009 was R$ 16.87 (R$ 23.11 at March 31, 2008).
b) “C” subscription bonuses
Of the subscription bonuses issued by the Bank, the remaining balance of 5,880,483 “C” Bonus, that
can be exercised up to the original terms - 3.31.2011 to 6.30.2011.
c) Capital
Capital is R$ 13,779,905 thousand (R$ 13,211,644 thousand in 03.31.2008), totally paid-up,
comprising 2,568,186,485 common shares with no par value. The Federal Treasury is the controlling
stockholder.
On 04/23/2009, the Board of Directors approved a capitalization proposal of R$ 4,768,706 thousand,
recorded in Expansion Reserves.
d) Revaluation reserves
These refer to a revaluation of assets carried out by the companies Kepler Weber, Pronor, and Cobra
Tecnologia S.A. The realizations of the reserves in the period, totaling R$ 133 thousand (R$ 74
thousand at March 31, 2008), were transferred to the "Retained earnings (accumulated losses)"
account. As regards the remaining balance, it will be held up to the date of its effective realization, in
conformity with CMN Resolution 3565, of 5.29.2008.
e) Capital and profit reserves
Capital reserves
Revenue reserves
Legal Reserve
(1)
Statutory Reserves
(2) (3)
Expansion Reserve
03.31.2009
03.31.2008
5,188
15,758,859
1,788,916
9,201,237
4,768,706
34
10,124,708
1,348,772
4,007,230
4,768,706
(1) Includes the Reserve for Operating Margin and the Reserve for Equalization of Dividends. - The purpose of the first is to guarantee an
operating margin compatible with the development of the company's transactions, comprised of the portion of up to 100% of the balance of net
income, up to the limit of 80% of the capital. - The second guarantees financial resources for the payment of dividends, comprised of the portion
of up to 50% of the balance of net income, up to the limit of 20% of the capital.
(2) Its objective is to provide support to the expansion and technological modernization policy of the company.
(3) On 04.23.2009, the Board of Directors approved.
f) Interest on own capital / Dividends
1 - Net income for the period
2 - Interest on own capital allocated to the stockholders
3 - Dividends allocated to the stockholders
Total allocated to the stockholders (Item 2 + Item 3)
1Q2009
1Q2008
1,665,477
2,347,466
447,717
218,474
666,191
368,987
569,999
938,986
According to Laws 9249/1995 and 9430/1996 and the Bank's Bylaws, Management decided on the
payment of Interest on Own Capital to its stockholders, imputed to the dividends value, plus
additional dividends, equivalent to 40% of net income.
The total amount of Interest on Own Capital in 03.31.2009 totaled R$ 447,717 thousand. The
amount of Interest on Own Capital provided a reduction in spending on tax charges in the amount of
st
The Interest on Own Capital and Dividends for the 1 quarter of 2009 will be based on the
shareholding position of 03.23.2009 and will be paid on 05.27.2009.
To meet the law of Income Tax, the amount of interest on capital was recorded in contrast to the
"financial expenses" and, for purposes of disclosure of financial statements reclassified to the
"retained earnings".
g) Payments/Accruals of Interest on Own Capital and Dividends
1Q2009
Per share
Interest on own capital/Dividends allocated
Interest on own capital paid
Dividends paid
Gross amount
Tax
666,191
447,717
218,474
(67,157)
(67,157)
--
0.260
0.174
0.085
1Q2008
Per share
Interest on own capital/Dividends allocated
Interest on own capital paid
Dividends Paid
Gross amount
Tax
938,986
368,987
569,999
(65,115)
(65,115)
--
0.369
0.145
0.224
Net amount
599,033
380,559
218,474
Net amount
873,871
303,872
569,999
h) Shareholdings (quantity of shares)
Shareholdings at March 31, 2009 of all those who hold, directly or indirectly, more than 5% of the
Bank capital:
Stockholders
Total shares
% Total
Federal Treasury
Banco do Brasil Employees Retirement Fund (PREVI)
BNDES Participações S.A. - BNDESPar (1)
Treasury Stock
Other shareholders
Total
1,684,809,058
260,779,183
64,005,679
1,155,094
557,437,471
2,568,186,485
65.60%
10.16%
2.49%
0.04%
21.71%
100.00%
(1) Audit Committee and Internal Audit and composition of the two shareholder groups.
Changes in ownership of the parties referred to in the previous paragraph of these securities during
the preceding twelve months and characteristics of the securities issued by the Bank and directly or
indirectly held by the controlling stockholder, management and members of the Fiscal Council, the
Internal Audit and by the Audit Committee.
Controlling Group
Federal Treasury
Previ
BNDESPar
Total
03.31.2009
03.31.2008
1,684,809,058
260,779,183
64,005,679
2,009,593,920
1,660,334,789
266,098,012
64,368,679
1,990,801,480
(1)
Common shares (ON)
03.31.2009
03.31.2008
Board of Directors
Board of Directors (2)
Executive Board of Directors
Fiscal Council
Audit Committee
Internal Audit
30
7,506
14,279
-1,729
57
24
6,945
14,232
-1,183
57
“C” Bonds
03.31.2009
03.31.2008
-21
28
--9
-12
22
--9
(1) The shareholding interest of the Board of Directors, Steering Committee, Executive Board, Fiscal Council, Audit Committee and Internal
Audit represents approximately 0.0009%, on 03.31.2009 (0.0009% on 03.31.2008), of the Bank's capital stock.
(2) Excepting for the shares of the President that are contemplated in the Board of Directors.
i) Quantity of Shares in the Market
BB Shares
In the market
Total issued
Quantity
(1)
557,415,656
2,568,186,485
Percentage
21.7%
100.0%
(1) As per Law 6404/1976.
j) Free Float
BB shares
Free Float em 03.31.2009
Quantity
(1)
Total issued
(1)
Pursuant to the regulation of the New Market of Bovespa.
557,415,656
2,568,186,485
%
21.7%
100.0%
22 - Income Tax and Social Contribution on Net Income
a) Details of income tax and social contribution expense
1Q2009
Income
Social
Tax
Contribution
1Q2008
Income
Social
Tax
Contribution
a) Present values
(677,106)
(409,039) (355,278)
(127,396)
Domestic income tax and social contribution
(671,156)
(409,039) (345,610)
(127,396)
Foreign income tax
b) Deferred tax liabilities
Provision)/reversal of deferred income tax on the adjustment of the portfolio and depreciation (leasing
operations)
(Provision)/reversal of provision for deferred taxes - positive MTM
Constitution / (reversal) of provision for deferred tax on actuarial gains not recognized
(Provision)/reversal of provision for deferred taxes - restatement of judicial deposits
(Provision)/reversal of provision for deferred taxes - Net income abroad
(Provision)/reversal of provision for deferred income tax on transactions carried out in the futures
market
c) Provision (a+b)
(5,950)
--
(9,668)
--
(100,292)
(58,089)
(39,361)
(14,332)
--
--
--
--
(57,082)
-(41,908)
(1,302)
(29,594)
-(25,145)
(3,268)
(1,452)
-(35,287)
(2,405)
666
-(12,703)
(2,217)
--
(82)
(217)
(78)
(467,128) (394,639)
(141,728)
(777,398)
d) Deferred tax credits
869,558
1,768,916
218,321
Recording/(reversal) of tax credits on temporary differences
608,568
2,423,823
230,417
83,152
--
--
(16,140)
(5,810)
319
(Recording)/reversal of tax credit on income tax and social contribution losses
(Recording)/reversal of tax credits - negative MTM
77,661
239,655
(660,140)
4,044
Recording/(Reversal) of Tax Credits on Transactions Carried out in the Futures Market
21,335
5,233
--
--
e) Total income tax and social contribution expense (c+d)
92,160
1,301,788 (176,318)
(64,067)
BB-Consolidate
1Q2009
Income
Social
Tax
Contribution
1Q2008
Income
Social
Tax
Contribution
a) Present values
(814,790)
(484,819) (510,418)
(184,349)
Domestic income tax and social contribution
(808,011)
(484,819) (500,050)
(184,349)
Foreign income tax
b) Deferred tax liabilities
Provision)/reversal of deferred income tax on the adjustment of the portfolio and depreciation (leasing
operations)
(Provision)/reversal of provision for deferred taxes - positive MTM
(Provision)/reversal of deferred income tax on the sale of investments in installments (BB-BI)
Constitution / (reversal) of provision for deferred tax on actuarial gains not recognized
(Provision)/reversal of provision for deferred taxes - restatement of judicial deposits
(Provision)/reversal of provision for deferred taxes - Net income abroad
(Provision)/reversal of provision for deferred income tax on transactions carried out in the futures
market
c) Provision (a+b)
(6,779)
--
(10,368)
--
(167,920)
(58,514)
(48,055)
(14,343)
(65,929)
--
(8,599)
--
(58,233)
--(41,908)
(1,302)
(29,642)
--(25,145)
(3,268)
(1,287)
(194)
-(35,287)
(2,405)
726
(70)
-(12,703)
(2,217)
(548)
(459)
(283)
(79)
(543,333) (558,473)
(198,692)
(982,710)
d) Deferred tax credits
938,906
1,768,791
220,732
Recording/(reversal) of tax credits on temporary differences
612,360
2,423,485
222,610
79,197
65,979
532
(7,912)
(6,122)
239,232
(660,459)
5,946
1,017
21,335
5,233
88
35
1,225,458 (337,741)
(124,565)
(Recording)/reversal of tax credit on income tax and social contribution losses
(Recording)/reversal of tax credits - negative MTM
Recording/(Reversal) of Tax Credits on Transactions Carried out in the Futures Market
e) Total income tax and social contribution expense (c+d)
(43,804)
74,127
b) Reconciliation of income tax and social contribution expense
1Q2009
Profit before taxation and profit sharing
BB – Consolidate
1Q2008
1Q2009
1Q2008
484.191
2.886.927
710.897
3.110.691
Total income tax charge (rate of 25%)
92.160
(121.048)
(176.318)
(721.732)
(43.804)
(177.724)
(337.741)
(777.673)
Charges upon Interest on Own Capital
Effects of non-taxable income
111.929
207.839
92.247
326.021
111.929
339.478
92.247
476.675
(1.202.885)
(15.564)
(551.915)
(9.814)
(1.215.350)
(17.356)
(594.229)
(10.549)
-(2.383)
-90
3
(3.797)
-(3.072)
1.106.538
7.734
681.427
7.358
910.599
8.414
470.722
8.138
1.301.788
(72.629)
(64.067)
(259.823)
1.225.458
(97.440)
(124.565)
(279.962)
67.157
124.568
33.209
117.337
67.157
166.147
33.209
168.342
(721.808)
--
(198.689)
--
(729.125)
--
(215.570)
--
-(1.430)
-34
1
(2.278)
-(1.042)
--
--
--
--
Others
1.905.930
243.865
1.820.996
(1) From 1.1.2003 to 4.30.2008, the rate of CSLL in force was 9%, pursuant to Law 10637, of 12.30.2002. As of May/2008, the rate of
CSLL was increased to 15%, pursuant to Law 11727/2008.
170.458
Income tax expense
Effects of non-deductible expenses
Effects of foreign profits
Employee profit sharing
Deferred charges on mark-to-market adjustments
Others
Fiscal incentives (workers meal program, culture and others)
Social contribution expense
Total social contribution charge (rate of 9% at 2008) and rate of 15% at 2009)
Charges upon Interest on Own Capital
Effects of non-taxable income
Effects of non-deductible expenses
Effects of foreign profits
Employee profit sharing
Deferred charges on mark-to-market adjustments
Values for the rate differential (Article 17 of Law No. 11727/08)
c) Lawsuit: Interest on Own Capital Tax Benefit
c.1) In February 1998, the Bank filed a legal request for the full offset of prior year income tax and
social contribution on net income losses against taxable income. Since then, the Bank has offset these
tax losses in full against income tax and social contribution taxable income and has made judicial
deposits of the taxes otherwise due (on 70% of the amount offset). These deposits prompted the
Federal District 16th Court to issue a dispatch recognizing the suspension of payment of these taxes
until final judgment of the Bank's request, based on article 151, II, of the Tax Code. Since 10.1.2002,
the proceeding has been awaiting judgment of an extraordinary appeal by the Federal Supreme Court.
c.2) The offsetting of amounts of fiscal loss and CSLL recoverable results in the write-off of deferred
tax credits, observing the limitation of 30%.
c.3) In compliance with the prohibition contained in CMN Resolution 3535/2008, judicial deposits of
the amount of R$ 11,237,599 thousand (principal plus interest) were not deducted from the
corresponding provisions in the manner provided for in item 53 of CVM Resolution 489/2005, with a
negative impact on the Basel Ratio.
c.4) Deferred taxes (corporate income tax (IRPJ) and social contribution on net income (CSLL) on
the restatement of judicial deposits are being offset with the tax credits resulting from the provision
related to that judicial deposit, in conformity with § 2°, item II, art. 1° of CMN Resolution 3059/200 2,
with no impact on net income.
c.5) If the Bank were successful in its lawsuit, we verified that in September 2005 and January 2009
the Bank would have consumed the entire stock of Tax Loss and Social Contribution recoverable.
Therefore, since the period beginnig October 2005 and February 2009, the amount of Income Tax
and Social Contribution would be being paid in full.
Additionally, there would be a transfer of resources from the account used to record judicial deposits
to that of cash and cash equivalents. The tax credits relating to judicial deposits (principal) would be
written off against provision for IRPJ and CSLL and provision for tax risks relating to the restatement
of deposits, of the amount of R$ 4,281,710 thousand, would be reverted against net income. The net
positive impact of this provision on net income would support the calculation of the BIS ratio by 1.92
p.p. (from 15.40% to 17.32%).
c.6) If the Bank were unsuccessful in its lawsuit the amounts deposited judicially would be converted
into income in favor of the National Treasury. The portions of IRPJ tax credits on tax loss that could
be utilized since the period beginning in October 2005 and February 2009, observing the limitation of
30%, would be reclassified to the account representing "IRPJ recoverable" and “CSLL recoverable”
assets. This IRPJ recoverable and CSLL recoverable, that would result from the adjustments to the
Statements of Economic-Fiscal Information of Individuals, corresponds to R$ 1,839,997 thousand as
of March 2009 and its interest adjustment using the Selic Rate corresponds to R$ 249,727 thousand.
This sum adjusts the provision for tax risks in connection with the updating of court deposits (please
see item 22c.5), so that its sum will be sufficient to fully cancel the risk of a likely loss.
c.7) The amounts relating to this matter are as follows:
Judicial Deposits
Original amounts
Restatement
70% thereof
Income tax losses
CSLL / CSLL losses to offset
03.31.2009
03.31.2008
11.237.599
6,556,456
4,680,143
6.585.045
3.002.033
3.583.012
9.839.850
6,004,605
3,835,245
6.162.193
3.002.033
3.160.160
23 - Tax credits
a) Tax credits recorded as assets
03.31. 2009
03.31.2008
Income
Social
Income
Social
tax
contribution
tax
contribution
Nature and origin:
Total income tax and social contribution credits recorded
Income tax and social contribution losses
Timing differences
Negative mark-to-market adjustments
Negative adjustments of futures market transactions
Tax credits abroad
Tax credits - writ of mandamus
Total PASEP and COFINS credits recorded
Adjustments of futures market transactions
9,655,005
-8,332,738
22,291
-109,522
9,264
1,181,190
Pasep
3,603
618
2,985
8,558,756
-4,996,107
13,593
-39,409
-3,509,647
Cofins
22,171
3,802
18,369
7,851,070
-6,034,523
83,733
--10,999
1,721,815
Pasep
2,291
2,291
--
5,889,066
-2,169,281
30,246
565,042
--3,124,497
Cofins
14,098
14,098
--
Total tax credits not recorded
9,658,608
8,580,927
7,853,361
5,903,164
BB-Consolidated
03.31. 2009
03.31.2008
Income
Social
Income
tax
contribution
tax
Nature and origin:
Total income tax and social contribution credits recorded
Timing differences
Tax credits abroad
Social
contribution
Total PASEP and COFINS credits recorded
Adjustments of futures market transactions
Others
11,080,808
220,644
9,527,651
31,862
-109,522
1,181,190
9,939
Pasep
3,910
925
2,985
--
9,304,340
3,501
5,660,365
21,058
70,360
39,409
3,509,647
-Cofins
24,062
5,693
18,369
--
8,104,374
80,958
6,197,421
91,629
--1,721,815
12,551
Pasep
2,794
2,516
-278
5,924,253
4,471
2,197,883
32,360
565,041
-3,124,498
-Cofins
20,017
15,486
-4,531
11,084,718
9,328,402
8,107,168
5,944,270
The tax credits recorded include Social Contribution to Offset relating to tax credits calculated at the
rate of 18% on tax losses and temporary differences existing on December 31, 1998. Article 8 of
Provisional Measure (MP) 2158-35/2001 reduced the rate of social contribution from 18% to 8% and
authorized the maintenance of this credit classified in Other Receivables - Sundry.
From 1.1.2003 to 4.30.2008, the rate in force of CSLL was 9%, pursuant to Law 10,637/2002. As of
May 1 2008, the rate of CSLL was increased to 15%, pursuant to the Provisional Measure no.
413/2008 which were converted in the Law 11,727/2008, accounting effects included an increase in
CSLL expenses as well as the respective tax credits.
Considering that some financial institutions have been going to court with individual lawsuits
challenging the increase of the rate of CSLL and that the National Confederation of the Financial
System - filed a Direct Unconstitutionality Lawsuit - ADIN, the Multiple Bank has been recognizing
tax credits in sufficient amount to annul, the impact on income resulting from the increase of the rate
(6%) on the CSLL tax liabilities (current and deferred).
The Legal Director of Bank of Brazil held assessment of the arguments used in ADIN, concluding the
st
remote possibility of success by CONSIF, why the Bank made in the 1 quarter 2009, registration of
additional tax credits for CSLL to achieve rate plus 15% on the amount R$1,213,177 thousand.
b) Tax credits not recorded
03.31.2009
03.31.2008
Income
tax
Social
contribution
Income
tax
Social
contribution
Nature and origin:
Total income tax and social contribution credits not Recorded
Timing differences
189,525
33,948
12,555
104
29,803
20,254
9,511
38
72,631
32,834
2,314
--
11,905
11,485
420
--
Tax credits abroad
142,918
--
37,483
--
Pasep
Cofins
Pasep
Cofins
3
3
17
17
---
---
189,528
29,820
72,631
11,905
Total PASEP and COFINS tax credits not recorded
Relating to negative mark-to-market adjustments
All existing tax credits not recorded as 12.31.2008, were recorded in the Bank (BB-Domestic and
Foreign branches) as of March 31, 2009.
BB-Consolidated
03.31.2009
Income
tax
03.31.2008
Social
contribution
Income
tax
Social
contribution
Nature and origin:
Total income tax and social contribution credits not Recorded
Timing differences
Tax credits abroad
Relating to adjustments of futures market transactions
844,210
-817,755
--26,455
-Pasep
725
-725
1,751,918
-1,742,665
--9,253
-Cofins
4,462
-4,462
247,774
-230,417
12,240
5,117
--Pasep
335
335
--
87,574
-83,152
4,422
---Cofins
2,061
2,061
--
844,935
1,756,380
248,109
89,635
Total PASEP and COFINS tax credits not recorded
c) Entries and write-offs of the period
03.31.2009
03.31.2008
Income
tax
Social
contribution
Income
tax
Social
contribution
Entries of the period
Total income tax and social contribution tax recorded
On income tax and social contribution losses
On timing differences
On negative mark-to-market adjustments
1,901,027
2,418,965
221,793
193,597
65,979
532
8,075
17
1,807,406
2,404,167
195,697
70,732
1,187
5,013
14,598
5,282
--
--
3,423
---
Tax credits abroad
26,455
9,253
--
Relating to social contribution to offset (PM No. 1858/1999)
--
--
--
--
--
--
--
117,566
Relating to negative futures market adjustments
Pasep
Total amount of Pasep and Cofins tax credits formed
Related to negative adjustment on future transactions
Total tax credits recorded
Cofins
Pasep
Cofins
759
4,672
402
2,471
34
210
402
2,471
725
4,462
--
--
1,901,786
2,423,637
222,195
196,068
BB-Consolidated
03.31.2009
Income
tax
03.31.2008
Social
contribution
Income
tax
Social
contribution
Entries of the period
Total income tax and social contribution tax recorded
236,957
189,965
192,752
186,464
On income tax and social contribution losses
--
--
16,140
5,810
On timing differences
--
--
35,287
12,703
--
134,805
--
167,951
31,333
17,501
--
--
1,955
--
1,637
--
203,669
37,659
139,688
--
On negative mark-to-market adjustments
Tax credits abroad
Pasep
Cofins
Pasep
Cofins
Total amount of Pasep and Cofins tax credits formed
853
5,253
--
--
853
5,253
--
--
237,810
195,218
192,752
186,464
Total tax credits recorded
03.31.2009
Write-offs in the period
Total IRPJ and CSLL tax credit write-offs
03.31.2008
Income
Social
Income
Social
tax
contribution
tax
contribution
239,713
193,905
163,419
176,798
9
18
16,187
6,211
107
158
6,612
2,321
--
134,805
--
167,951
34,555
21,265
933
315
1,373
--
--
--
203,669
37,659
139,687
--
Pasep
Cofins
Pasep
Cofins
Total PASEP and COFINS credits reversed
941
5,792
--
--
941
5,792
--
--
240,654
199,697
163,419
176,798
Relating to income tax & social contribution losses
Relating to timing differences
Tax credits abroad
Tax Credits - writ of mandamus
Total tax credits reversed
d) Deferred tax liabilities
03.31.2009
Total deferred income tax and social contribution liabilities
Arising from mark-to-market adjustments
Arising from foreign profits
Arising from futures market transactions
Arising from actuarial gains not recognized
Total amount of deferred tax liabilities of Pasep and Cofins
Arising from restatement of judicial deposits
Total deferred tax liabilities
03.31.2008
Income
Social
Income
Social
tax
contribution
tax
contribution
1,460,676
878,974
71,460
27,163
169,201
101,520
63,904
23,006
1,302
3,268
2,405
2,217
--
82
5,151
1,940
1,290,173
Pasep
62,332
774,104
Cofins
383,584
-Pasep
19,735
-Cofins
121,441
4,614
28,393
1,743
10,723
22,534
138,673
17,845
109,814
4
23
147
904
35,180
216,495
--
--
1,523,008
1,262,558
91,195
148,604
BB-Consolidated
03.31.2009
Total deferred income tax and social contribution liabilities
03.31.2008
Income
Social
Income
Social
tax
contribution
tax
contribution
1,795,928
930,681
157,572
--
--
324
117
170,222
102,133
72,415
26,069
Arising from leasing portfolio adjustment
236,370
--
72,474
10
11,331
--
3,862
0
1,302
3,268
2,405
2,217
1,648
Arising from sale investments
Entities abroad
Arising from foreign profits
32,176
676
397
5,638
1,290,173
774,104
--
--
Others
85,854
50,779
454
2,115
Pasep
Cofins
Pasep
Cofins
Total amount of deferred tax liabilities of Pasep and Cofins
Arising from restatement of judicial deposits
62,684
4,639
22,534
385,752
28,548
138,673
19,983
1,983
17,845
122,972
12,206
109,815
951
Others
Total amount of deferred tax liabilities
14
86
155
35,180
216,495
--
--
317
1,950
--
--
1,858,612
1,316,433
177,555
155,148
e) Estimates of the realization of tax credits recorded
Multiple Bank
12.31.2008
Par Value
Present Value
In 2009
3,578,000
3,423,000
In 2010
3,429,000
3,109,000
In 2011
3,287,000
2,834,000
In 2012
3,538,000
2,922,000
In 2013
3,481,000
2,764,000
Total tax credits
17,313,000
15,052,000
The above estimates of realization of tax credits were based on a technical study carried out as of 12.31.2008. In 2009, it was
observed the realization of tax credits in Banco do Brasil in the amount of R$ 930,352 thousand, corresponding to 26.00% of
the consumption forecast of technical study carried out in 12.31.2008 (R$ 3,578,000 thousand).
f) Realization of Nominal Amounts of Credits
The realization of nominal amounts of activated tax credits, considering the re-composition of those
written off over the course of the lawsuit (70%), based on a technical study carried out by the Multiple
Bank (as of 12.31.2008), is projected for 5 years, in the following proportions:
Tax loss /CSLL recoverable
In 2009
In 2010
In 2011
In 2012
In 2013
30%
22%
15%
16%
17%
(1)
Intertemporal Differences
(2)
17%
19%
20%
23%
21%
This study also shows the tax credits recorded as assets at present values based on the average funding rate of the Multiple Bank.
(1) Projection of consumption associated with the capacity to generate taxable bases of IRPJ and CSLL in subsequent periods.
(2) The consumption capacity results from the movements of provisions (expectation of reversals, write-offs and uses).
g) Other information
Deferred fiscal liabilities or assets, respectively, are formed on positive or negative adjustments
resulting from the transactions performed in future settlement markets in the period from 1.1.2005 to
02.28.2006 (validity period of taxation on the cash basis, pursuant to art. 32 of Law 11051/2004 and
art. 110 of Law 11196/2005), and will be realized as the transactions are settled.
24 - Equity in the Earnings (Loss) of Subsidiary and Associated Companies
a) BB- Domestic and Foreign branches
Realized
Capital
DESCRIPTION
Stockholders’
Equity
Shares
(in
thousand)
Our
Interest
(%)
Operational
Exchange
variation
03.31.2009
03.31.2008
Book Value
03.31.2009
03.31.2008
SUBSIDIARIES
BAMB-Brasilian American Merchant Bank
Banco do Brasil AG. Viena (Áustria)
(1)
BB Securities LLC
Banco Nossa Caixa S.A.(2)
557,824
789,063 241,023 ON
100.00
11,104
(6,946)
4,158
3,628
789,063
575,672
102,052
262,906
188 ON
100.00
8,870
(13,350)
(4,480)
7,318
262,906
94,771
--
97,766
1,000 ON
100.00
678
(915)
(237)
50
97,766
70,996
11,572
2,196
5,000 ON
100.00
(894)
--
(894)
(532)
2,196
4,097
2,436,603
2,886,603
76,263 ON
71.25
--
--
--
--
2,056,704
--
23,752 398,158 ON
100.00
2,345
--
2,345
2,166
23,752
26,577
25,907
9,300
14,100
26,745
14 ON
100.00
9,825
--
9,825
8,987
26,745
26,918
56,032
1,000 ON
100.00
22,499
--
22,499
16,198
56,032
51,088
103,142
211,409 100,000 ON
100.00
84,823
--
84,823
104,900
211,409
228,779
1,589,399
2,091,235 112,638 ON
BB Gestão de Recursos - Distribuidora de Títulos e
Valores Mobiliários
BB Leasing S.A. - Arrendamento Mercantil
BESC Financeira S.A.- Bescredi
(3)
100.00
266,684
--
266,684
614,685
2,091,235
2,383,575
61,860
40,552
3,000 ON
100.00
(2,737)
--
(2,737)
9,454
40,552
73,754
165,155
23,892
425 ON
100.00
1,055
--
1,055
(1,277)
23,892
19,490
18,837 296,797 ON
10,168,625
7,978
ON
19,690 16,318 ON
99.58
43
--
43
--
18,758
--
99.62
45
--
45
--
7,948
--
99.00
150
--
150
--
19,493
--
4,100 ON
99.39
(3,420)
--
(3,420)
(5,661)
--
--
15,473
(3)
– Bescaval
BESC S.A. Arrendamento Mercantil - BESC Leasing
(3)
Cobra Tecnologia S.A .
5,857
17,969
17,183
(70,058)
183,904
236,646
4,762 PN
21.64
(1,971)
--
(1,971)
(2,909)
51,210
62,839
2,045
12,662
63,931 ON
16.19
70
--
70
--
2,049
--
4,569
9,452
1,600 ON
32.81
377
--
377
--
3,100
--
780
474
260 ON
48.13
--
--
--
--
228
--
--
--
399,546
(21,211)
378,335
757,007
5,785,038
3,617,545
--
Associated Companies
Cadam S.A.
Cia. Hidromineral Piratuba
(3)
Santa Catarina Seguros e Previdência
(3)
Cia. Catarinense de Assessoria e Serviços – CCA
(3)
520 PN
Subtotal
--
Abroad
Foreign exchange gain/(losses) originated from branches
--
--
--
--
(64,622)
(64,622)
27,992
--
Increase/Decrease in participation due to other movements
--
--
--
--
261
--
261
1,438
--
--
Total
--
--
--
--
399,807
(85,833)
313,974
786,437
5,785,038
3,617,545
(1) On 01.01.2009, was done an investment of R$149.7 millions (EUR 46.3 millions) on Bank of Brazil AG. Vienna, due to absorption of the subsidiary
Lisbon.
(2) Participation acquired via Nossa Caixa incorporations of March, 16 2009.
(3) Incorporated values on September 2008.
b) BB-Consolidated
Realized
Capital
DESCRIPTION
Stockholders’
Equity
Our
Interest Operational
(%)
Shares
(in thousand)
Book Value
03.31.2009 03.31.2008
03.31.2009 03.31.2008
Exchange
variation Provision
INTEREST - BB MULTIPLE BANK
ASSOCIATED COMPANIES
Increase in participation due to other movements (1)
--
--
--
--
--
--
--
--
240,818
--
--
183,904
2,045
236,646
4,762 PN
21.64
(1,971)
--
--
(1,971)
(2,909)
51,210
62,839
12,662
63,931 ON
16.19
70
--
--
70
--
2,049
--
9,452
1,600 ON
377
--
--
377
--
3,100
--
474
260 ON
32.81
48.13
--
--
--
--
--
228
--
50,000
98,745
20,000 ON
49.00
--
--
--
--
--
48,385
--
--
--
--
--
(1,524)
--
--
(1,524)
237,909
104,972
62,839
105,000
243,751
19,950 ON
3,343
--
--
3,343
5,457
46,313
42,563
8,001
6,072
889 ON
(130)
--
--
(130)
--
675
--
203,498
3,899
--
--
110
110
(5,409)
4,369
4,369
--
--
--
--
1,153
--
--
1,153
52,753
13,577
--
--
--
--
--
4,366
--
110
4,476
52,801
64,934
46,932
5,542 ON
12.02
(2,310)
--
--
(2,310)
149
17,714
21,602
--
(2,310)
--
--
(2,310)
149
17,714
21,602
--
Associated companies
Cadam S.A
Cia. Hidromineral Piratuba (2)
Santa Catarina Seguros e Previdência (2)
Cia. Catarinense de Assessoria e Serviços - CCA (2)
Mapfre Nossa Caixa Vida e Previdência S.A. (3) (4)
Subtotal
4,569
780
INTEREST - BB INVESTMENT BANK
Itapebi (4)
Estruturadora Brasileira de Projetos - EBP
BAF S.A., in liquidation(5)
Others Participation
(6)
Subtotal
19.00
11.11
8,427,957 ON 100.00
INTEREST OF BB GESTÃO DE RECURSOS - DISTRIBUIDORA DE TÍTULOS E VALORES
MOBILIÁRIOS S.A.
Pronor (4)
154,686
147,375
Subtotal
--
--
ABROAD
Foreign exchange gain/losses in branches
--
--
--
--
--
(64,622)
--
Foreign exchange gain/losses in subsidiaries
--
--
--
--
--
(21,210)
--
Increase/Decrease in participation due to other
movements
--
--
--
--
--
--
--
Total
--
--
--
--
532
(85,832)
110
(64,622)
27,991
--
(2,495)
--
--
--
1,438
--
--
(85,190)
317,793
187,620
131,373
(21,210)
(1) They refer mainly to the equity held by non-financial companies and a set of criteria of the shares of BB Investment Company Neoenergia.
(2) Added Value on September/2008.
(3) Related company of Bank Nossa Caixa, acquired by Bank of Brazil on 03.16.2009.
(4) The data refer to the period of December/2008 to February/2009.
(5) The AGM decided on 04.30.2005 to the extrajudicial liquidation of the company. From the 2nd half/2005 we stopped its evaluation by equity
pickup.
(6) Refers to equity pick up originated from participation on non financial companies.
25 - Related-party Transactions
The costs of salaries and other benefits granted to key management personnel of the Bank Group of
Australia (Management Board, Supervisory Board, Audit Committee and Executive Directors) are
listed as follows:
Benefits of short-term
Benefits of termination of employment
Total
1Q2009
3,715
586
4,301
The Bank of Brazil has no post-employment benefits, variable remuneration based on shares and other
long-term benefits for your key personnel.
The account balances resulting from transactions among the Bank's consolidated entities are excluded
from the Consolidated Financial Statements. In relation to the majority shareholder, "Tesouro
Nacional", transactions with the Federal Government and with the entities associated therewith, such
as public companies, private and public joint stock companies and other federal authorities that
maintain banking operations with the Bank, are included.
The Bank has only normal banking transactions with these related parties, such as interest bearing and
non-interest bearing deposits, loans, and sale and repurchases transactions. There are also service
provision and guarantee agreements.
These transactions with related parties are conducted under normal market conditions, substantially
under the terms and conditions for comparable transactions with unrelated parties, including interest
rates and collateral. These transactions do not involve abnormal payment risks.
The Bank does not grant loans to its officers or members of its Board of Directors, Audit Committee
and Fiscal Council, because this practice is prohibited in all the financial institutions regulated by
Central Bank of Brazil.
The resources for federal government securities, the funds and transfers of programs from public
institutions are listed as Note 8 and 16 respectively.
The information relating to transfers and other transactions with entities linked to employees are
disclosed in Note 26.
Summary of transactions with related parties
Bank of Brazil's balance of assets and liabilities with related parties are as follows:
03.31.2009
Controlled ³
Joint 4
Control
Outher
Parts5
Related
Controller ¹
Affiliates ²
Total
--
28,447
102,912
--
--
131,359
1,974,759
--
9,576,947
--
139,796
11,691,502
Assets
Securities
Loan operations
Receivables from related companies
--
--
30,664
--
--
30,664
Others Assets
--
45,252
32,709,246
--
--
32,754,498
1,974,759
73,699
42,419,769
--
139,796
44,608,023
Total
Liabilities
Demand deposits
Remunerated time deposits
Deposits received under security repurchase
agreements
Othes Liabilities
51,054
7
5,710
--
744,456
801,227
364,553
1,430
26,907,916
--
5,189,883
32,463,782
--
--
--
--
3,160,536
3,160,536
--
9,606
275,294
16,070
--
300,970
415,607
11,043
27,188,920
16,070
9,094,875
36,726,515
Income from interest and service
39,588
7,953
665,443
--
184,753
897,737
Expenses capture
(9,860)
(5)
(268,775)
--
(167,609)
(446,249)
Administrative expenses
--
(1,659)
(121,074)
--
--
(122,733)
Other expenses
--
(530)
(9,359)
--
--
(9,889)
29,728
5,759
266,235
--
17,144
318,866
Total
STATEMENT OF INCOME
Total Net
(1) National Treasury and entities linked to it directly;
(2) These include companies related Note 5 as identified in item (3);
(3) understand the business as related items identified in Note 5 (1), (4), (5), (6), (7);
(4) These include companies related Note 5 as identified in item (2);
(5) Entities linked to the officials (Box Welfare of Staff of the Banco do Brasil - Previ, Fundação Codesc Social Security - Fusesc, Cash
Assistance of Staff of the Bank of Brazil).
26 - Retirement and Pension and Health Plans
a) Caixa de Previdência dos Funcionários do Banco do Brasil - Previ
Banco do Brasil is the sponsor of Caixa de Previdência dos Funcionários do Banco do Brasil
(PREVI) which provides participants and their dependents with benefits which are complementary or
similar to those of the Basic Government Retirement Plan. The plans offered through PREVI include
both defined contribution (Plano Previ Futuro) and defined benefit (Plan n.° 1) plans, the latter havi ng
adopted the capitalization method for actuarial calculations. On March 31, 2009 Previ had 147,669
participants, with 34,651 active participants of Benefit Plan n.º1, 49,042 active participants of Plano
Previ Futuro and 63,976 retirees (on March 31,2008 there were 143,767 participants, of which:
35,798 were active participants of Benefit Plan n.º1, 44,028 were active participants of Plano Previ
Futuro and 63,941 were retired employees).
a.1) The funding of the vested and unvested benefits is summarized as follows:
Participants employed before April 14, 1967, who were not retired and who were not in a position on
that date to request their retirement, contemplated in the contract signed on December 24, 1997
between the Bank and PREVI (Plan n.° 1): the sponso r assumes the commitment for the payment of
pensions for this group; mathematical reserves ensuring benefits corresponding to such group are fully
paid-up at Previ. The retirement benefit of this group is characterized as a defined contribution.
Participants employed between April 15, 1967 and December 23, 1997 (Plan n.°1): Due to the
accumulated surplus, in June 2007, the contributions of participants, beneficiaries (retirees and
pensioners) and of the sponsor (Banco do Brasil) were suspended, retroactive to January 2007. This
measure will be evaluated every twelve months, with its maintenance depending on the existence of
the Special Reserve of Benefit Plan n.° 1, resultin g from the superavit in the Plan. Maintained the
suspension until December 2009.
Participants employed from December 24, 1997 (Plano Previ Futuro): active participants contribute
to PREVI an amount between 7% and 17% of their contribution salary, which varies based on length
of service and the amount of the contribution salary. There is no contribution for retired participants.
The sponsor contributes an amount equal to the contributions of the participants, limited to 14% of
the total contribution payroll of these participants. The retirement benefit of this group is
characterized as a defined contribution.
a.2) Effects of Benefit Plan n.° 1, based on actuarial v aluations as of December 31, 2006 and 2007
carried out by an independent actuary, and of the Plano Previ Futuro as required by CVM Resolution
371 of December 13, 2000:
Equity effect (reconciliation of assets and liabilities):
Specification
03.31.2009
Plan 1
1) Present value of actuarial liabilities with coverage
2) Present value of actuarial liabilities not covered
76,109,636
--
3) Present value of actuarial liabilities (1 + 2)
4) Fair value of the plan assets
5) Present value of liabilities in excess of (less than) the fair value of the assets (3 + 4)
6) Actuarial (gains) or losses not recognized
7) Amount not recognized as (assets) / liabilities (1)
8) Net actuarial liability/(asset) recorded (5 – 6-7)
03.31.2008
Plan 1
70,572,791
--
76,109,636
70,572,791
(104,778,828)
(28,669,192)
(6,540,925)
(14,334,596)
(7,793,671)
(134,802,296)
(64,229,505)
(62,049,568)
-(2,179,937)
(1) Value calculated in accordance with paragraph 49.g of CVM Deliberation No 371/2000.
The Previ Futuro Plan, being a defined contribution plan, is not required to record actuarial assets
or liabilities.
1
Notes to the Financial Statements
Amounts paid to Previ:
03.31. 2009
Specification
Plan 1
Sponsor contributions
03.31.2008
Plan Previ
Futuro
(44)
Total
31,786
Plan Previ
Futuro
Plan 1
31,742
(368)
Total
25,240
24,872
The sum of R$ 44 thousand refers to adjustments to the sponsor contribution for the periods prior to January/2007.
Effects on the quarter's Income Figures:
03.31.2009
Specification
Plan 1
03.31.2008
Plan Previ
Futuro
Plan Previ
Futuro
Total
(62,023)
(164,359)
--
(49,253)
(49,253)
-- (2,019,018)
-2,820,262
---
---
---
Plan 1
Total
1) Cost of current service (with interest)
--
2) Interest on actuarial liabilities
3) Expected earnings on the plan assets
---
4) Deferment of the net earnings from assets and liabilities (2 + 3)
5) Total gross (expense)/income (1 - 2 - 3 + 4)
---
-(62,023)
(698,908)
(62,023)
---
-(49,253)
-(49,253)
6) Expected contributions from participants
7) Liabilities/Assets (expense)/income
---
31,826
--
31,826
--
-(88,008)
25,275
--
25,275
(88,008)
8) Subtotal net (expense) /income (5 + 6 + 7)
9) Previ management fee (5% of the employers’ union dues)
---
(30,197)
(1,589)
(30,197)
(1,589)
(88,008)
--
(23,978)
(1,262)
(111,986)
(1,262)
10) Effect of the net (expense)/income ( 8 + 9)
--
(31,786)
(31,786)
(88,008)
(25,240)
(113,248)
a.3) Main economic assumptions adopted for the actuarial calculations:
Specification
Real interest rate used for discounting actuarial liabilities to present value
Real expected yield on plan assets
Estimated salary increases:
Benefit Plan 1
Plano Previ Futuro
03.31.2009
03.31.2008
6.3%p.a.
6.3% p.a.
6.3% p.a.
6.3% p.a.
0.5881% p.a.
3.4337% p.a.
0.8394%p.a.
3.3044%p.a
A new mortality table, AT-83 plena, was deployed in July 2007 without causing any effects on the
Bank's net income, as a result of the superavit in PREVI.
b) Benefits of sole responsibility of the Bank
Banco do Brasil is responsible for: (a) retirement pensions to founder participants and pension
payments to survivors of participants deceased up to April 14, 1967; (b) payment of retirement
supplements to the other participants employed by Banco do Brasil who retired up to April 14, 1967
or who, on that date, would have the right through length of service to retire and who had at least 20
years of effective service with the Bank; and (c) increase in the amount of retirement benefits and of
pensions in addition to that provided for in the Benefit Plan of Previ, resulting from judicial decisions
and from administrative decisions on account of restructuring of the job and salary plan and of
incentives created by the Bank. This plan is of the defined benefit type, and adopts the capitalization
regime in actuarial valuations, and had 7,874 retirees and pensioners participating on March 31,
2009 (8,112 retirees and pensioners participating on March 31, 2008).
2
b.1) The cost of these benefits is totally funded by Banco do Brasil.
b.2) Effects on the financial statements of Benefit Plan, based on actuarial valuations as of
December 31, 2006 and 2007 carried out by an independent actuary, and of the Plano Previ Futuro
as required by CVM Resolution 371 of December 13, 2000:
Specification
03.31.2009
03.31.2008
--
--
2) Present value of unsecured actuarial liabilities (Plans without financial assets)
1,739,592
1,666,065
1,739,592
1,666,065
5) Present value of liabilities in excess of the fair value of the assets (3 + 4)
7) Net actuarial liability/(asset) to be recorded (5 - 6)
--
--
1,739,592
172,431
1,567,161
1,666,065
182,279
1,483,786
03.31.2009
03.31.2008
64,659
63,591
03.31.2009
03.31.2008
Amounts paid to Previ:
Specification
Total benefits paid to Previ
Effects on the semester's Income:
Specification
1) Cost of current service
4) Actuarial (gains) or losses
5) Expected earnings on assets
6) Effect of the expense recorded (1 - 2 + 3 + 4 - 5)
--
--
-(48,618)
(17,436)
-(66,054)
-(41,995)
(5,925)
-(47,920)
b.3) The economic assumptions adopted for the actuarial calculations are the same as those
adopted for the PREVI Plan 3 (item a.3.), except regarding the adoption of mortality table AT -83.,
since a transitory table between GAM-71 modified and GAM-83 is used for the Informal Plan.
c) Fundação Codesc de Seguridade Social - Fusesc
Following the merger of Besc S.A. and Besc S.A. - Crédito Imobiliário (Bescri) by Banco do Brasil on
March 31, 2009, the Bank became a successor to the sponsorship obligations for the following Private
Pension Plans: a) Multifuturo I, a Defined Contribution Plan (CD) and b) Defined Benefit Plan (BD).
The normal contribution by the sponsors as of December 2000 was defined as being the sum of the
contributions owed by active and assisted participants, in compliance with the contributing parity
between sponsors’ normal contributions and participants, as provided for in article 5 of Constitutional
Amendment no. 20/1998.
In addition to the funds transferred to Fusesc in order to settle Plano Multifuturo’s deficit, there is a
provision of R$ 866 thousand on March 31, 2009 in connection with an actuarial deficit of active
employees that remained in the Defined Benefit Plan. The provision’s value was defined in accordance
with an agreement entered into with Fusesc on July 23, 2002, Clause 2”a”, item 2.2, as follows:
For those who did not migrate, only the complementary contribution of funds will be paid in, required
to cover the actuarial deficit, in proportion to what they contributed (Sponsor and participants) until
the effective date of Constitutional Amendment no. 20.
3
Multifuturo I, a Defined Contribution Plan (CD) - maintained by Fusesc, organized in June 2002 by
means of the migration by participants from the Defined Benefit Plan. This plan covers 6,210
employees, of which 3,164 assisted (3,119 retired, 45 beneficiaries), and 3,046 active employees.
The Defined Benefit Plan (BD) - maintained by Fusesc since 1978, structured under a joint contribution
plan with other companies, intended for their employees and dependents. This plan covers 1,373
employees, of which 1,372 assisted (1,012 retired, 356 beneficiaries), and 04 active employees. On
December 31, 2008 this plan had an actuarial surplus of R$ 52,633thousand.
The AT-83 mortality table was used for the actuarial calculation of the Defined Benefit Plan (BD), with
the December 31, 2008 base date.
The key assumptions employed in the actuarial appraisal are:
Specification: March 31, 2009
Real interest rate used to discount actuarial obligations to present value
Real rate of return expected from the retirement and pension plans’ assets
Future Nominal Growth of Salaries
Annual Inflation
6.3% p.a.
6.3% p.a.
2.83% p.a.
6.48% p.a.
d) CASSI - Caixa de Assistência dos Funcionários do Banco do Brasil
The Bank is the sponsor of a Health Plan managed by CASSI - Caixa de Assistência dos
Funcionários do Banco do Brasil. The main objective is to provide coverage for expenses related to
the promotion, protection, recovery and rehabilitation of a member's health and of his/her inscribed
beneficiaries. At March 31, 2009 this plan had 172,640 participants, with 91,631 active and 81,009
retired participants and pensioners (at March 31, 2008 the plan had 166,823 participants, of which
86,105 were active and 80,718 retired participants and pensioners).
A contract was executed between the Bank and CASSI on 11.13.2007 aiming at reformulating the
By-laws of Plano de Associados da Caixa de Assistência dos Funcionários do Banco do Brasil (Plan
of Members of the Banco do Brasil Employee Welfare Fund).
On account of the Agreement between the Bank and CASSI at 11.13.1997, the Bank contributed
monthly a sum equivalent to 4.5p.p. of the total payroll or of the total retirement or pension plan
benefit. Monthly contributions from members and pension beneficiaries amount to 3% of the total
payroll or the total retirement or pension plan benefits.
d.1) Effects of the Plan Cassis in the financial statements, based on actuarial revaluations made in
12.31.2007 and 12.31.2008, for external actuary, according to CVM Deliberation No. 371,12.13.2000:
Specification
2) Present value of unsecured actuarial liabilities (Plans without financial assets)
5) Present value of liabilities in excess of the fair value of the assets (3 + 4)
7) Unrecognized past service cost- Indirect Dependents
8) Unrecognized past service cost - Alteration of Plan
9) Net actuarial liability/(asset) recorded (5 - 6 - 7 - 8)
03.31.2009
03.31.2008
-4,677,766
4,677,766
-4,677,766
402,629
22,656
81,359
4,171,122
-4,547,868
4,547,868
-4,547,868
1,795,659
32,484
92,326
2,627,399
Amounts paid to Cassi:
Specification
03.31.2009
Sponsor contributions
130,932
4
03.31.2008
125,466
The R$ 130,932 thousand is comprised of employer contributions from active employees, retirees
and pensioners, and extraordinary contribution/onlending referring to the indirect dependents,
resulting from the BB and CASSI Agreement and CASSI Complementation, as follows: Active
Employees: R$ 50,754 thousand, Retirees and Pensioners: R$ 74,918 thousand, Onlending:
R$ 3,358 thousand and Complemento Cassi, due to Resignation Plans: R$ 1,902 thousand;
The sum of R$ 125,466 thousand consists of the Employer Contributions for Active Employees: R$
45,213 thousand and Retirees and Pensioners: R$ 76,224 thousand, Onlending – R$ 2,520 thousand,
extraordinary contribution - R$1,509 thousand
Effects on the quarter's Income:
Specification
1) Cost of current service (with interest)
4) Actuarial (gains) or losses (1)
5) Unrecognized past service cost
6) Expense withi Active Eployees
7) Expenses with Extraordinary Contribution
8) Expected return on assets
9) Effect of the expense recorded (1 - 2 + 3 + 4 + 5 + 6 + 7 - 8)
03.31.2009
03.31.2008
(15,366)
-(135,492)
-(2,478)
(50,754)
(13,760)
-(217,850)
(9,417)
-(120,565)
(22,282)
(2,720)
(45,213)
(13,193)
-(213,390)
(1) There was no record in 1st quarter of 2009 due to the recognition as of 12.31.2008 in the amount of R$ 1259,381 million based in the
application of systematic method for recognition of actuarial loss faster (Note 29.e.3) as permitted by CVM Deliberation No. 371/00.
d.2) The economic assumptions adopted for the actuarial calculations are the same as those
adopted for the PREVI Plan (item a.3.).
e) Policy for the recognition of actuarial gains and losses
In accordance with CVM Deliberation 371, the actuarial gains or losses to be recognized as income
or expense in a defined benefit plan are the amount of unrecognized gains and losses that exceed,
in each period, the higher of the following limits:
- 10% of the present value of the total actuarial liability of the defined benefit; or 10% of the fair value
of plan assets.
e.1) Benefits of Sole Responsibility of the Bank: Actuarial losses relating to these benefits are being
recorded in the same year the actuarial calculation is made because the persons involved are all
former employees, and thus there is no remaining length of service to amortize.
e.2) CASSI Actuarial Liability: the actuarial losses relating to this liability are recognized over the
average remaining work period estimated for the employees participating in the plan (15.9 years as
of 12.31.2007 and 16,85 as of 12.31.2008).
e.3) As permitted in CVM Deliberation no. 371/2000, the Bank will verify, in recognizing actuarial
gains, if there is an amount of actuarial losses not recognized above corridor in other postemployment plans. Should this amount exist, the value to be amortized in the Bank's income will be
the greater between a) the amount of actuarial losses not recognized above the corridor up to the
value of the actuarial gain recognized in other plan, and b) the actuarial loss determined according to
description in previous items.
5
f) Summary of Assets/Liabilities of Previ and Cassi
03.31.2009
Specification
(Expense) income
Transfer between
recorded in the
Amortization/ Use
unamortized
Sponsor
of the Actuarial
income statement
contributions
reserves and
considering
Assets and Parity
advanced
made in the year
Fund Assets
actuarial
amortization
adjustments
Actuarial
liability/
(asset) on
01.01.2009
A
Actuarial asset CVM 371
B
C
(7,793,671)
--
D
Actuarial liability/
(asset) on
03.31.2009
F=
(A-B+C+D+E)
E
--
--
--
(7,793,671)
--
--
--
--
--
--
(12,103,281)
309,814
304,960
--
--
(12,108,135)
Unamortized reserves (1997 contract)
12,103,281
(309,814)
(304,960)
--
--
12,108,135
Parity Fund Asset
(2,195,802)
56,600
--
(44)
--
(2,252,446)
Actuarial liability in respect of the Informal
Plan (sole responsibility of the Bank)
1,565,632
(66,054)
--
--
(64,525)
1,567,161
CASSI actuarial liability
4,096,062
(153,336)
--
--
(78,276)
4,171,122
--
(13,760)
--
--
--
13,760
Actuarial asset/liability (1997 contract)
Advanced amortization (1997 contract)
Cassi Agreement
03.31. 2008
Specification
(Expense) income
Transfer between
Sponsor
Amortization/ Use
recorded in the
unamortized
contribution
income statement
of the Actuarial
reserves and
verted/
Assets and Parity
considering
advanced
compensated in
actuarial
Fund Assets
amortization
the quarter
adjustments
Net Liabilities/
(Assets) as of
01.01.2008
A
Actuarial asset CVM 371
Actuarial asset/liability (1997 contract)
B
C
(2,268,313)
--
D
--
F=
(A-B+C+D+E)
E
88,376
Actuarial liability/
(asset) on
03.31.2008
--
(2,179,937)
--
--
--
--
--
--
(11,912,949)
368,901
293,177
--
--
(11,988,673)
Unamortized reserves (1997 contract)
11,912,949
(368,901)
(293,177)
--
--
11,988,673
Parity Fund Asset
Actuarial liability in respect of the
Informal Plan (sole responsibility of the
Bank)
CASSI actuarial liability
(2,440,534)
76,159
--
(368)
--
(2,517,061)
1,499,458
(47,919)
--
--
(63,591)
1,483,786
2,551,159
(154,984)
--
--
(78,744)
2,627,399
--
(13,193)
--
--
--
13,193
Advanced amortization (1997 contract)
Cassi Agreement
g) Impacts on Net Income Resulting from the Review of the Calculations of Actuarial Assets and
Liabilities according to CVM Resolution 371/00
Banco do Brasil issued a public announcement on 1.23.2009 notifying the Market that it had reviewed
the calculations of its actuarial assets and liabilities according to CVM Resolution 371/00, of the
Securities Commission, and as a result of CGPC Resolution nº 26, of the Supplementary Pension
Steering Committee, of 9.29.2008.
This review resulted in the accounting of part of the unrecognized actuarial gains of the Retirement
and Pension Plan (Benefit Plan nº 1, of Previ), of unrecognized actuarial losses of the Health Care
Plan (Cassi) and the respective deferred tax effects in conformity with the publication of Provisional
Measure no. 453, of 1.23.2009.
Resolution CVM 371, in line with international accounting principles, determines the recording of a
liability when the sum of obligations exceeds the amount of assets from the benefit plan, and of an
asset, when the sum of assets exceeds the amount of obligations of the plan. In the latter
circumstance, the asset should only be recorded when there is evidence that it may effectively reduce
the sponsor's contributions or that it will be reimbursable in the future, as established in aforesaid
6
Resolution.
Resolution CGPC nº. 26 served to throw light on issues relating to the interpretation of the right of
sponsors and of participants to the surplus resources originating from the contributions (and from
their yields) of both parties. According to that Resolution, the surplus should be assigned to the
sponsors and participants in proportion to the contributions made.
Certain trade associations and other associations filed lawsuits challenging the legality of CGCP
Resolution nº. 26, whereas in some of them the request for a preliminary injunction to suspend the
effects of aforesaid resolution was refused, while in others the request was granted. Bank
management, based on the opinion of its legal advisors, understands that CGCP Resolution nº. 26 is
of a legitimate nature, and that the Judiciary will conciliate the understanding in relation to the right
and form of division of the surplus as defined in the abovementioned resolution.
In view of the various lawsuits filed in relation to CGPC Resolution nº. 26, Banco do Brasil
understands that although this norm has thrown light on some issues theretofore under discussion,
mainly as regards the amounts to be assigned to the sponsors and participants in the case of
existence of surplus at the supplementary pension entities, this Resolution does not alter the
definitions existing in the current regulations, therefore not producing effects on the need for records
of the actuarial assets and liabilities required by public institutions, regulated through CVM Resolution
371/00.
As regards the actuarial losses of the Health Care Plan, these are part of the sum that the Bank is
required to record in its liabilities, corresponding to the future contributions of all the employees
corresponding to their retirement phase. The accrual basis requires that these expenses be recorded
while the employees are still active, even if the payments are made monthly, in the future. The Bank
had already been appropriating these losses, also in the form of CVM Resolution 371, since 2001, as
contained in note nº 26-"d" to its balance sheet of 6.30.2008. Since the aforesaid Resolution allows
the quicker recognition of these losses, the Bank opted to do so in this manner.
Specification
2008
Retirement and Pension Plan - Accounting of part of the unrecognized actuarial gains
Health Care Plan - Accounting of unrecognized actuarial losses
Parity Fund Assets - Reversal of revenue
Tax effects
Impact on Net Income for the Year 2008
7
5,412,367
(1,259,381)
(86,356)
(1,546,163)
2,520,467
27 - Compensation Paid to Employees and Management
Lowest salary
Highest salary
Average salary
(1)
Management
President
Vice-President
Director
1Q 2008
1Q 2007
1,296.75
23,817.90
4,568.42
1,178.63
22,023.00
3,577.63
37,469.40
33,841.50
28,943.40
28,700.40
25,859.10
22,023.00
(1) In April 2008 the remuneration model for the members of the Executive Board was simplified by including in their
remuneration the value of benefits that were previously granted by the General Assembly of Shareholders. As a result of this
change, the benefits are no longer being granted.
28 - Assignment of Employees to External Organizations
Federal government assignments are regulated by article 93 of Law 8112/1990 (amended by Law
9257/1997), by Decree 925/1993, and by PGFN/CJN Note 088/1996 issued by the General Counsel of
the Federal Treasury.
Labor unions: assignments occur in cases prescribed in the Collective Labor Agreement or by
commitments assumed as a result of salary negotiations:
Other organizations/entities: assignments occur as a result of agreements of strategic business interest
of the Bank.
1Q2009
Employees
assigned (1)
1Q2008
Cost for the
period
Employees
assigned (2)
Cost for the
period
With costs for the Bank
Federal Government
Labor unions
Other organizations/entities:
12
160
3
608
3,632
296
13
131
3
650
2,937
245
Without cost to the Bank
Federal, state and municipal governments
External organizations (Cassi, FBB, Previ)
Employee entities
Subsidiary and associated companies
285
712
60
300
-----
286
683
45
321
-----
Total
(1) Balance at 03.31.2009
(2) Balance at 03.31.2008
1,532
4,536
1,482
3,832
29 - Commitments, Responsibilities and Contingencies
a) Contingent liabilities
Labor Lawsuits
The Bank is a party in labor lawsuits mainly filed by former employees or trade unions of the
industry. Allowance for probable losses represent various claims, such as: Severance pay, overtime,
Supplement per Job and Representation, Supplement per Individual BACEN 40% (matching the
employees of BACEN) and others.
Fiscal Lawsuits
The Bank is subject to a number of challenges by the tax authorities in relation to taxes, which can give
rise to assessments of the jurisdiction in which taxes are incurred or the sum of taxable income or
deductible expense. Most of the lawsuits originating from tax assessment notices relate to ISSQN,
CPMF, CSLL, IRPJ and IOF, and, some are guaranteed by cash or in properties.
Civil Lawsuits
The most signficiant lawsuits classified as probable losses are those aimed at the collection of the
difference between the actual rates of inflation suffered and the rate utilized for inflation correction of
financial investments during the period of the Economic Plans (Collor Plan, Bresser Plan and
Summer Plan).
The activities in provision for contingent liabilities were as follows:
Labor claims
Opening balance
Constitution (1)
Provision used
Added value (2)
Closing balance
Tax claims
Opening balance
Constitution (3)
Provision used
Added value (2)
Closing balance
Legal Claims
Opening balance
Constitution (1)
Provision used
Added value(2)
Closing balance
BB-Consolidated
1Q2009
1Q2008
1Q2009
1Q2008
2,456,461
1,034,276
(48,562)
(103,256)
-3,338,919
2,455,538
122,464
(55,277)
(114,159)
-2,408,566
2,475,231
1,035,770
(49,364)
(103,256)
856,175
4,214,556
2,455,538
137,248
(55,277)
(114,159)
-2,423,350
122,456
14,491
(6,863)
(110)
-129,974
88,638
29,210
(28,685)
(12)
-89,151
1,004,031
65,152
(7,372)
(110)
284,500
1,346,201
132,076
648,292
(29,452)
(12)
-750,904
1,719,947
626,130
(7,062)
(20,195)
-2,318,820
1,244,693
81,687
-(19,882)
-1,306,498
1,760,175
635,652
(12,122)
(20,528)
1,136,072
3,499,249
1,277,578
67,314
(16)
(20,008)
-1,324,868
(1) In March 2009, there was an increase of R$921,230 thousand in labor demands, and R$ 445,802 thousand in
civil claims, based on periodic reviews of the impacts generated by property proceedings in which the Bank of
Brazil appears as defendant, author or party.
(2) Demands labor, tax and civil Nossa Caixa Bank, acquired by Bank of Brazil on 03.16.2009.
st
(3) Included in the Consolidated BB 1 quarter of 2008, provisions of R$263,036 thousand (Alliance do Brasil),
R$ 135,888 thousand (Brasilveículos) and R$ 88,972 thousand (Brasilcap), included in consolidation from that
quarter . These provisions relate to, basically, the question as to the legal incidence of income tax of these
companies.
1
b) Contingent tax liabilities – Possible
Labor Lawsuits
The labor lawsuits are classified as exempt from possible formation of provision and represent
multiple applications claimed, as compensation, overtime, Additional Function and Representation,
and others.
Tax Lawsuits
The issues of tax disputes are considered as possible formation of an exempt account and claimed
several applications such as: ISSQN, recoveries and other tax obligations from the Federal Revenue
Secretariat and Institute of Social Security. The main constraints are caused by:
- Plowed case of violation by the Internal Revenue Service in the face of no withholding tax and noncollection of the IR on the salary allowances paid to employees.
- Plowed case of violation by the National Institute of Social Security, not for the collection of
contributions levied on wage allowance, conversions in cash and shares in profits and results of
staff.
- Case of violation by plowed Farms Estate Cities in Belo Horizonte (MG) and São Paulo (SP),
relating to charges of ISSQN.
Civel Lawsuits
In civil actions in nature there are actions that seek to recover the difference between the inflation
and the index used to fix the financial applications during the period of economic plans (Collor Plan,
Plan Bresser and Summer).
The provision for contingencies classified as possible were as follow:
Labor claims
Tax Claims
BB-Consolidado
03.31.2009
267,628
03.31.2008
394,902
03.31.2009
267,965
03.31.2008
394,902
2,313,533
1,980,079
2,394,407
2,055,755
3,469,766
1,883,533
3,498,125
1,902,617
Cível Claims(1)
(1) The increase in the balance due to the increase of actions aimed at recovery of the differences between inflation and the
index used to fix the financial applications over the economic plans (Collor Plan, Bresser and Summer Plan Plan).
c) Guarantee of Deposits in Resources
The balances of deposits made as security for contingencies probable, possible and / or remote are:
BB-Consolidado
03.31.2009
03.31.2008
03.31.2009
03.31.2008
Labor claims
1,695,715
1,648,779
2,175,877
1,666,297
Tax Claims
3,116,040
3,361,889
4,375,733
3,903,137
Cível Claims(1)
1,213,066
981,346
2,038,054
1,160,362
d) Contingent tax assets
The Bank has filed lawsuits for reimbursement of taxes paid in error that will only be recognized in
the financial statements if the Bank obtains a favorable outcome, in conformity with item 25 of
2
Deliberation CVM n.º 489, of 10.03.2005. We emphasize the most important lawsuits not yet
recorded:
- Unconstitutionality of Income Tax on Net Income paid in 1989 and in the 1st six months of 1992,
of the amount of R$ 12,816 thousand;
- Tax on Financial Transactions (IOF) - Law 8033/1990 (Price-level restatement), of the amount of
e) Legal Obligations
The Bank has a provision of the amount of R$ 10,853,384 thousand (R$ 9,608,927 thousand on
03.31.2008) relating to the proceeding of full carry-forward of the accumulated tax loss of Income
Tax and of the negative bases of Social Contribution Tax, the enforceability of which has been
suspended due to the judicial deposits made since the beginning of the suit. This amount is recorded
in “Other Liabilities - Taxes and Social Security Charges”.
f) Other Commitments
The Bank is the sponsor of Fundação Banco do Brasil whose purpose is the promotion, support,
advancement and sponsorship of educational, cultural, social, philanthropic, and
recreational/sporting activities, as well as the promotion of research activities of a technological and
scientific nature, and rural and urban community assistance services. During the first quarter of
2009, the Bank didn’t make any contribution to the Fundação Banco do Brasil.
Guarantees to third parties, for a fee and with counter-guarantees from the beneficiaries guarantees, sureties and bonds - amounted to R$ 6,503,670 thousand at March 2009 (R$ 4,733,920
thousand at March 31, 2008). A provision of R$ 47,581 thousand, recorded in “Other Liabilities”, is
considered sufficient to cover any potential loss arising on these guarantees.
Available credit lines for loan and lease operations amount to R$ 42,689,026 thousand
(R$ 35,898,385 thousand at March 31, 2008).
The confirmed import and export letters of credit total R$ 805,585 thousand (R$ 560,398 thousand at
March 31, 2008).
The Bank is the operator of the Fund for Sectorial Investments (FISET), with net assets of
R$ 2,186 thousand (R$ 2,212 thousand at March 31, 2008), and is the manager of the Public
Service Employee Savings Program (PASEP), with net assets of R$ 1,806,746 thousand
(R$ 1,581,250 thousand at March 31, 2008). The Bank guarantees the latter a minimum
remuneration equivalent to the Long-Term Interest Rate (TJLP).
Despite the reduced level of risk to which its assets are subject, the Bank contracts insurance cover
for its assets in amounts considered sufficient to cover any losses.
3
30 - Risk Management and Regulatory Capital
a) Risk Management Process
Banco do Brasil considers the management of risks and of capital the main vectors for the decision-making
process.
In the Banco do Brasil, collegiate risk management is performed completely apart from the business units.
Risk and concentration policies are specified by the Bank's Board of Directors and by the Global Risk
Committee (CRG), which is a discussion group composed by the President and by Vice-Presidents. Actions
for implementing and monitoring guidelines issued by the CRG are directed at specific sub-committees
(Credit, Market, and Operations), which are groups formed by Directors.
To find out more about the risk management process at Banco do Brasil, access the website bb.com.br/ri
b) Credit Risk
Credit Risk is associated with the possibility of loss resulting from uncertainty regarding the receipt of
amounts agreed on with borrowers, counterparts of contracts or issues of securities.
For alignment with the best practices of credit risk management and to increase efficiency in the management
of its economic capital, Banco do Brasil uses risk and return metrics as instruments for dissemination of the
culture at the Institution, present throughout its loan process.
c) Market Risk
Market Risk reflects the possibility of loss that can be caused by changes in the behavior of interest and
exchange rates and of prices of shares and commodities.
Financial Instruments – Market Value
The table below presents financial instruments recorded in equity accounts, compared to market value:
BB-Consolidated
03.31.2009
03.31.2008
Book
value
Market Value
131,796,199
Securities
109,176,901
Unrealized gain/loss, net of tax effects
On Income
On Stockholders´ Equity
Book
value
Market
Value
131,787,450
72,688,803
72,509,573
(8,749)
(179,230)
(8,749)
(179,230)
109,429,730
80,590,378
80,603,124
422,531
69,935
252,829
28,675
--
--
--
--
169,702
39,260
--
--
--
--
--
--
252,829
28,675
252,829
28,675
03.31.2009
03.31.2008
03.31.2009
03.31.2008
ASSETS
Adjustment of securities available for sale (Note 9.a)
Adjustment of securities held to maturity (Note 9.a)
Loan operations
1,416,680
1,416,680
899,219
899,219
--
--
--
--
205,375,913
205,265,474
149,507,406
148,979,730
(110,439)
(527,675)
(110,439)
(527,675)
(141,386)
LIABILITIES
Interbank deposits
8,406,038
8,370,578
6,247,132
6,388,518
35,460
(141,386)
35,460
Time deposits
178,487,442
178,524,046
73,281,591
73,201,443
(36,604)
80,148
(36,604)
80,148
Obligations related to Committed Operations
106,452,192
106,215,499
99,716,262
98,835,775
236,693
880,487
236,693
880,487
32,314,876
32,333,462
21,501,402
21,538,872
(18,586)
(37,470)
(18,586)
(37,470)
3,163,686
3,166,950
1,875,734
1,876,094
(3,264)
(360)
(3,264)
(360)
106,422,442
106,137,136
70,263,996
69,700,114
285,306
563,882
285,306
563,882
802,349
721,077
632,647
667,071
Other liabilities
Unrealized gain/loss, net of tax effects
Notas Explicativas às Demonstrações Contábeis
Financial Instruments
Short-term interbank investments: The market value was obtained by future cash flows discount, adopting
interest rates exercised by the market in similar operations in the balance sheet date.
Securities: Securities and derivative financial instruments are accounted for by the market value, as provided
for in BACEN Circular 3068 of 11.08.2001, excluding from such criterion, securities held to maturity.
Determination of securities' market value, including those held to maturity, is obtained according to rates
collected at the market.
Loan operations: Operations remunerated at pre-fixed rates have been estimated through future cash flow
discount, adopting for such, interest rates utilized by the Bank for contracting of similar operations in the
balance sheet date. For operations of such group remunerated at post-fixed rates, it was considered as market
value the book value itself due to equivalence among them.
Interbank deposits: The market value has been calculated through discount of the difference between future
cash flows and rates currently applicable in the pre-fixed operations market. In case of post-fixed operations
which maturities did not exceed 30 days, the book value was deemed to be approximately equivalent to the
market value.
Time deposits: The same criteria adopted for interbank deposits are utilized in the determination of the
market value.
Deposits received under security repurchase agreements: For operations at pre-fixed rates, the market value
was determined calculating the discount of the estimated cash flows adopting a discount rate equivalent to the
rates applicable in contracting of similar operations in the last market day. For post-fixed operations, book
values have been deemed approximately equivalent to market value.
Borrowing and onlendings: Said operations are exclusive to the Bank, without similarity in the market. In face of
their specific characteristics, exclusive rates for each fund entered, inexistence of an active market and similar
instrument, the market values of such operations are equivalent to the book value.
Other liabilities: Market values have been determined by means of the discounted cash flow, which takes
into account interest rates offered in the market for obligations which maturities, risks and terms are similar.
Other financial instruments: Included or not in the balance sheet, book values are approximately equivalent to
their correspondent market value.
Derivatives: According to BACEN Circular 3082, of 1.30.2002, derivatives are recorded at market value.
Determination of derivatives' market value is estimated in accordance with an internal pricing model, with the
use of the rates disclosed for transactions with similar terms and indices on the fiscal years' last business
day.
Sensitivity Analysis (CVM Instruction no. 475 dated December 17, 2008)
In line with best market practices, Banco do Brasil manages its risks in a dynamic manner, seeking to detect,
assess, monitor, and control market risk exposures in its own positions. To this end, the Bank takes into
account the risk limits defined by the Strategic Committees and likely scenarios, to act in a timely manner in
reversing any occasional adverse results.
In accordance with CMN Resolution no 3464/07 and with Bacen Circular no. 3354/07, and in an effort to
manage more efficiently its transactions exposed to market risks, Banco do Brasil separates its transactions
as follows:
2
1) Trading Book: consisting in all the transactions in its own position undertaken as business deals or
intended as a hedge for its trading portfolio, for which there is an intention of trading prior to their contractual
expiry, subject to normal market conditions and that do not have a non-trading clause.
2) Banking Book: consisting in transactions not classified in the Trading Book and the key feature of which is
the intention of keeping these transactions until expiry.
The sensitivity analysis for all the operations with assets and liabilities of the balance sheet, in compliance with
CVM Instruction n.º 475/2008, of 12.17.2008, does not adequately reflect the management of market risks
adopted by the Institution, and does not represent the Bank’s accounting practices.
In order to determine the sensitivity of the Bank's capital to the reflexes of market trends, simulations were
performed with three likely scenarios, two of which with an ensuing adverse outcome for the Bank. The
scenarios employed are seen as follows:
Scenario I: Likely situation. Considering macro-economic factors and market information (BM&F, Bovespa,
Andima, etc.). Assumptions employed Real /US dollar exchange rate of R$ 2.27 and a -1.0% parallel shock
in risk variables, based on market conditions seen on March 31, 2009.
Scenario II: Likely situation. Assumptions employed 25.0% parallel shock in risk variables, based on market
conditions seen on March 31, 2009, and in the chart below were presented the worst results by risk factor.
Scenario III: Likely situation. Assumptions employed a 50.0% parallel shock in risk variables, based on
market conditions seen on March 31, 2009, and in the chart below were presented the worst results by risk
factor.
In the table below may be seen a summary of the Trading Portfolio profit figures (Trading), which
included public and private securities, derivatives financial instrument and funding based on
transactions subject to repurchase agreements:
R$ thousand
Trading Portfolio
31.03.2009
Scenario I (Probable)
Risk Factor
* Concept
Prefixed rate
Risk of variation of prefixed interest rates
Rate
Variation
Income
Reduction
22,782
Increase
Risk of variation of exchange rates
Risk of variation of
TR (Referential Rate) and TBF (Basic
Financial Rate) coupon
Risk of variation of price index coupons
Foreign currency coupons
Risk of variation of foreign exchange coupon
Exchange variation
TR/TBF
Price Indexes
Scenario II
Rate
Variation
Scenario III
Income
Rate
Variation
Income
Increase
(102,832)
Increase
(197,283)
(172)
Increase
(143)
Increase
(286)
Reduction
(3,594)
Reduction
(44,927)
Reduction
(89,854)
Stable
--
Increase
(4,148)
Increase
(7,505)
Reduction
509
Increase
(17,527)
Increase
(34,329)
Trading Portfolio composed of public and private bonds, derivative instruments, and funds obtained by
means of repurchase agreements.
In the case of transactions classified in the Banking Book, appreciations or depreciations resulting from
changes in interest rates practiced in the market do not imply in a significant financial and bookkeeping impact
on the Bank's income. This is so because this portfolio is composed chiefly of loan operations (consumer credit,
agribusiness, working capital, etc.); retail funding (demand, time, and savings deposits), and securities, which
are recorded in the books according to the agreed on rates when contracting these operations. In addition, it
should be pointed out that these portfolios have as their key feature the intention of helding the respective
3
positions to maturity, and hence they are not subject to the effects of fluctuating interest rates, or the fact that
such transactions are naturally related to other transactions (natural hedge), hence minimizing the reflexes of a
stress scenario.
In the table below may be seen a summary of the Trading Portfolio (Trading) and Non-Trading Portfolio
(Banking) :
R$ thousand
Trading and Banking Portfolio
31.03.2009
Scenario I (Probable)
Risk Factor
* Concept
Prefixed rate
Risk of variation of prefixed
interest rates
Risk of variation
Foreign currency coupons
exchange coupon
Exchange variation(1)
TJLP
TR/TBF
Price Indexes
of
foreign
exchange rates
long-term interest rate (TJLP)
coupon
TR (Referential Rate) and TBF
(Basic Financial Rate) coupon
Risk of variation of price index
coupons
Scenario II
Scenario III
Rate
Variation
Income
Rate
Variation
Income
Rate
Variation
Income
Reduction
880,507
Increase
(2,054,673)
Increase
(3,997,351)
Increase
(62,364)
Increase
(132,840)
Increase
(255,038)
Reduction
690
Increase
(8,620)
Increase
(17,240)
Reduction
(129,500)
Reduction
(153,321)
Reduction
(316,672)
Reduction
(586,974)
Reduction
(1,562,737)
Reduction
(3,407,799)
Reduction
378,147
Increase
(591,344)
Increase
(1,117,943)
(1) Net tax purpose.
The scenarios used for preparing the framework of sensitivity analysis must necessarily use situations of
deterioration of at least 25% and 50% for variable risk for isolation, as determined by CVM Instruction No.
475/2008. Therefore, the analysis of the results is impaired. For example, simultaneous shocks of increase in
the rate of advance and reduction in interest coupon of TR are not consistent from a macroeconomic.
In particular with regard to derivative transactions found in the Banking Book, these do not represent a relevant
market risk to Banco do Brasil, as these positions originated mainly to fulfill the following situations:
- Change of the indexation of funding and lending transactions performed to meet customer needs;
- "Tax Hedge " consisting in eliminating the volatility risk to the Bank's profit figures owing to the fiscal effect on
foreign currency variations in connection with overseas investments (gains in exchange variations on overseas
investments are not taxed, and similarly losses do not create tax deductions). As a result, any exchange rate
variation will affect the account that records the derivative contrary to the effect recorded in the investment
account, i.e.: the exchange variation's effect will be zero;
- Market risk hedge with purpose and efficacy as described in Note no. 8b. Also in this transaction, the interest
and exchange rate variations have no effects on the Bank's income.
The Bank of Brazil did not enter into any transaction likely to be classified as an exotic derivative, as described
in CVM Instruction no. 475 - Attachment II.
d) Liquidity Risk - this type of risk takes two forms: market liquidity risk and cash flow liquidity risk (funding).
The first is the possibility of loss resulting from the incapacity to perform a transaction in a reasonable period of
time and without significant loss of value. The second is associated with the possibility of a shortage of funds to
honor commitments assumed on account of the mismatching between assets and liabilities.
e) Operating Risk reflects the possibility of loss resulting from faults, deficiencies, or the inadequacy of internal
processes, personnel and systems, or external events. This concept includes legal risks.
4
f) Other Risks
Legal Risk: can be defined as the possibility of loss resulting from fines, penalties or compensation, resulting
from lawsuits of supervision and control bodies, as well as loss resulting from an unfavorable decision in
lawsuits or administrative proceedings.
Panorama Risk: results from the possibility of loss arising from changes observed in the political, cultural,
social, economic or financial conditions of Brazil or of other countries.
−
Strategic Risk - risk of loss due to the failure of strategies adopted, taking into account the dynamics of
business and of competition, political alterations in the country and outside it and alterations in the
national and world economy.
−
Country Risk - risk of loss due to political, cultural, social, financial/capital flow/or economic alterations in
other countries with which there is some kind of economic relationship, particularly investments.
−
Systemic Risk - risk of loss due to financial difficulties of one or more institutions that provoke substantial
damage to others, or discontinuation of the normal running of operations of the Brazilian Banking
Industry - SFN.
Image Risk: possibility of loss resulting from the institution having its name sullied with the market or
authorities, due to negative publicity, whether true or not.
e) Regulatory Capital
The BIS ratio of 03.31.2009 was determined according to the criteria established by CMN Resolutions
3444/2007 and 3490/2007, which address the calculation of Referential Equity Amount (RE) and of
Required Referential Equity Amount (RRE), respectively. We present below the calculation of the BIS ratio,
pursuant to regulations in force and applicability as of July/2008:
03.31.2009
Economic Financial
Financial
RE - REFERENTIAL EQUITY AMOUNT
Nível I
Deferred Assets
Mark-to-market
Tax credits excluded from Level I of RE
Tax credits exceeding 40% RE level I
Level II
Mark-to-market
Financial instruments excluded from RE
Subordinated Debt Qualifying as Capital
Funds obtained from the FCO
Funds obtained abroad
Funds obtained from the CDB
RRE - Required Referential Equity Amount
Credit Risk
Market Risk
Operating Risk
Surplus/(Insufficiency) of stockholders' equity: RE - RRE
BIS Ratio: (RE x 100)/ (RRE / 0.11)
47,643,740
32,914,524
31,693,179
(14,509)
(562,372)
(97,458)
(22,477)
1,918,161
14,729,216
97,458
(859,229)
14,342,422
11,434,133
665,441
2,242,848
1,134,056
14,509
34,878,510
33,553,875
169,754
1,154,881
12,765,230
15.03
48,386,056
32,914,867
31,689,058
(14,492)
(557,925)
(97,458)
(22,477)
1,918,161
15,471,189
97,458
(117,239)
14,342,422
11,434,133
665,441
2,242,848
1,134,056
14,492
34,561,884
33,237,249
169,754
1,154,881
13,824,172
15.40
5
Follow the main indicators of 12.31.2007, in conformity with CMN Resolution 2099 of 1994:
03.31.2008
Econômico
Financeiro
Referential Equity Amount
Required Referential Equity Amount
BIS Ratio
Surplus/(Insufficiency) of stockholders' equity
35,934,495
26,924,788
14.68
9,009,707
Financeiro
36,386,855
26,196,115
15.28
10,190,740
As presented in connection with note 22.c.5, in the event of success in the lawsuit for full compensation of
accumulated tax loss of Income Tax and of negative bases of Social Contribution, there would be a positive
impact on the BIS Ratio of the consolidated financial statement of 1.92 p.p (from 15.40 % to 17.32%).
6
31 - Other Information
a) New Market
At 5.31.2006, Banco do Brasil signed a contract with the São Paulo Stock Exchange for adhesion to the
New Market segment of Bovespa, which assembles a group of companies with the best corporate
governance practices in Brazil.
Moreover, Banco do Brasil, its Shareholders, the Officers, and the members of the Audit Committee
undertake to resolve all and any dispute or controversy related with the New Market Listing Regulation
by means of the Arbitration Chamber of the Bovespa Market, in conformity with a commitment clause
contained in the By-laws of Banco do Brasil.
b) Distribution of Dividends and/or Interest on Own Capital
During a meeting held on 2.18.2008, the Board of Directors approved the setting, for the year 2009, of the
payout rate equivalent to the minimum percentage of 40% of net income, fulfilling the policy for payment of
dividends and/or interest on own capital on a quarterly basis, pursuant to art. 43 of the Bank's By-Laws.
c) New Market - Extension of Deadline (Free Float)
On 03.26. 2009, the BM & FBovespa granted the request for a new term framework for the minimum
percentage of shares outstanding of the Bank of Brazil, under the Listing Rules of the Novo Mercado (free
float = 25p.p.). With the new term, the Bank of Brazil will have to 06.28.2011 to reach the minimum
percentage of shares outstanding required by the regulation.
d) Partnership with Banco Votorantim
On 01.09.2009, the Bank of Brazil SA and Votorantim Finance established strategic partnership, signing
instrument of particular contract of sale and subscription of shares between them, through which the Bank
of Brazil will hold participation equivalent to 49.99 % of voting capital and 50.00% of the total capital of
Banco Votorantim SA The transaction will be done through: (i) acquisition by Bank of Brazil, of
33,356,791,198 common shares issued and Votorantim Bank's property Votorantim Finance for the price
of $ 3.0 billion, (ii) subscription by the Bank of Brazil, 7,412,620,277 new shares issued by Banco
Votorantim the value of $ 1.2 billion.
e) Studies of the Incorporation Banestes S.A.
On 02.05.2009, the Bank of Brazil SA and the proposed Government of the State of Espírito Santo
accepted starting dealings, without any binding effect, aiming to acquire the controlling shareholder of the
Bank SA Banestes the State of Espirito Santo for the first, with their subsequent incorporation corporate.
f) Besc – Approved by Bank of Brazil
The Central Bank of Brazil announced by Board House’s decision of 01.23.2009 approved the Bank of
Brazil merger of Besc and Besc SA Credit Property - Bescri through the release of all its assets and the
consequent extinction, and succeeded them the Bank of Brazil (embedded) in all rights and obligations.
g) Management of Investment Funds
At the end of March, 2009, BB Gestão de Recursos - Distribuidora de Títulos e Valores Mobiliários S.A. wholly-owned subsidiary of Banco do Brasil S.A., exhibited a portfolio of R$ 259.3 billion (R$ 241.3 billion
on 03.31.2008), distributed among 412 investment funds and 21 managed portfolios.
1
h) Resources Consortia
Prediction of resources to receive monthly consortium
Obligations of the group for contributions
Consortium - goods to contemplate
(In Units)
Number of groups administered
Number of active consortium
Quantity of goods delivered to the consortium
Quantity of goods in the period
03.31.2009
02.31.2008
39,487
1,683,782
1,536,466
43,786
1,577,802
1,472,486
337
125,885
20,761
331
155,683
27,554
7,801
12,541
i) Shares
BB shares
In the market on 03.31.2009
Total
Quantity
(1)
557,415,656
2,568,186,485
(1) Pursuant to the regulation of the New Market of Bovespa.
2
%
217
100.0
\
Independent Auditors’ report
on limited review
Quarter ended March 31, 2009
(A free translation of the original report in
Portuguese as published in Brazil containing
quarterly financial information
prepared in accordance with
accounting practices adopted in Brazil)
Independent Auditors’ report on limited review
To
The Board of Directors, Shareholders and Management
Brasília - DF
1. We have conducted a limited review of the balance sheets of Banco do Brasil S.A., individual
and consolidated, as of March 31, 2009 and 2008, and of the related statements of income,
changes in shareholders’ equity, statements of cash flows and of added value for the quarters
then ended, which are the responsibility of its management.
2. Our limited review was carried out in accordance with the specific rules established by the
Brazilian Institute of Independent Auditors (IBRACON), and consisted mainly of the
performance, involving the ones responsible for the accounting and financial areas, of
analytic review procedures of the financial data and of the verification of the criteria adopted
in the preparation of the aforementioned financial statements. Considering that our review
does not represent an examination in accordance with the accounting practices applicable in
Brazil, we are not expressing an opinion on the aforementioned financial statements.
3. Based on our limited reviews, we are not aware of any material changes that should be made
in the aforementioned financial statements for them to be in accordance with accounting
practices adopted in Brazil.
4. As per Note 2, some reclassifications of balances have been carried out in the financial
statements for the quarter ended March 31, 2008 due to the changes in the accounting
practices adopted in Brazil occurred in the year of 2008, and also for better comparability
with the financial statements as of March 31, 2009.
5. The Bank has recorded in its assets, as of March 31, 2009, the amount of R$7,793 million
(R$ 2,180 million as of March 31, 2008) corresponding to the surplus of PREVI – Retirement
and Pension Plan (Note 26), which was determined based on criteria established by the
Bank’s Management. These criteria incorporate long-term estimates and assumptions of
actuarial and financial nature. Therefore, the inaccuracies inherent to the process of using
estimates and assumptions may result in differences between the amount recorded and the
amount effectively realized. Additionally, the realization of the aforementioned assets is
conditioned to the fulfillment of the requirements established in the regulations in force
(Supplementary Laws 108/01 and 109/01 and the CGPC Resolution 26/08).
2
6. As per Note 23, the Bank has recorded in its individual and consolidated assets, as of March
31, 2009, the amounts of R$18,214 million and R$20,385 million, respectively (R$13,740
million in the individual and R$14,029 million in the consolidated, as of March 31, 2008)
corresponding to income and social contribution tax credits, realization and maintenance of
which are conditioned to the future generation of taxable income and to the adherence to the
rules established by Resolutions 3059/02 and 3355/06 of the National Monetary Council
(CMN).
7. As per Note 5, the Bank has recorded in its assets, as of March 31, 2009, the amount of
R$3,540 million corresponding to the goodwill deriving from the acquisition of the share
control of Banco Nossa Caixa S.A.. This amount was determined by the Management based
on information and best estimates available. The Bank’s Management is conducting a review
of the determination and of the definition of the nature of the aforementioned goodwill.
May 13, 2009
KPMG Auditores Independentes
CRC 2SP014428/O-6-F-DF
The original version in Portuguese was signed by
Francesco Luigi Celso
Accountant CRC 1SP175348/O-5-S-DF
3
José Claudio Costa
Accountant CRC 1SP167720/O-1-S-DF
EXECUTIVE BOARD
CEO
Aldemir Bendine
BOARD OF OFFICERS
Aldo Luiz Mendes
Alexandre Corrêa Abreu
Allan Simões Toledo
José Luis Prola Salinas
Luís Carlos Guedes Pinto
Paulo Rogério Caffarelli
Ricardo Antônio de Oliveira
Ricardo José da Costa Flores
Robson Rocha
MANAGING DIRECTORS
Amauri Sebastião Niehues
Ary Joel de Abreu Lanzarin
Carlos Eduardo Leal Neri
Clara da Cunha Lopes
Dan Antônio Marinho Conrado
Danilo Angst
Denilson Gonçalves Molina
Edson de Araújo Lôbo
Francisco Cláudio Duda
Geraldo Afonso Dezena da Silva
Ivan de Souza Monteiro
Izabela Campos Alcântara Lemos
Joaquim Portes de Cerqueira César
José Carlos Vaz
José Francisco Alvarez Raya
Luiz Carlos Silva de Azevedo
Marco Antonio Ascoli Mastroeni
Marco Antônio da Silva Barros
Nilo José Panazzolo
Nilson Martiniano Moreira
Paulo Roberto Evangelista de Lima
Renato Donatello Ribeiro
Renê Sanda
Sandro Kohler Marcondes
Sérgio Ricardo Miranda Nazaré
Walter Malieni Júnior
BOARD OF DIRECTORS
Bernard Appy (President)
Aldemir Bendine (Vice-President)
Bernardo Gouthier Macedo
Cleber Ubiratan de Oliveira
Henrique Jäger
Sérgio Eduardo Arbulu Mendonça
Tarcísio José Massote de Godoy
BOARD OF AUDITORS
Daniel Sigelmann
Ênio Alexandre Gomes Bezerra
Eustáquio Wagner Guimarães Gomes
Marcos Machado Guimarães
Pedro Carvalho de Mello
AUDIT COMMITTEE
José Danúbio Rozo (Coordenator)
Celene Carvalho de Jesus
José Gilberto Jaloretto
ACCOUNTING
Eduardo Cesar Pasa
General Accoutant
CRC-DF 017601/O-5
CPF 541.035.920-87
Daniel André Stieler
Accountant CRC-DF 013931/O-2
CPF 391.145.110-53
80

This will - Banco do Brasil

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