3q14 earnings release - bb · net loan portfolio / total deposits 129.0 139.7 145.8 net loan...

1

1

3Q14 Earnings

Release

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

Disclaimer

This presentation may include references and statements, planned synergies,

estimates, projections of results, and future strategy for Banco do Brasil, its

Associated and Affiliated Companies, and Subsidiaries. Although these references

and statements reflect the management’s belief, they also involve estimates and

unforeseen risks. Consequently, results may differ from those anticipated and

discussed here. These expectations are highly dependent on market conditions, on

Brazil’s economic and banking system performances, as well as on international

market conditions. Banco do Brasil is not responsible for updating any estimate in

this presentation.


Highlights

(1) It includes private securities and guarantees.

Loan Portfolio – Broad Concept¹ grew 12.3% in twelve months

NPL 90 Ratio (2.09%) remains below the Banking Industry (3.00%)

Adjusted Net Income reached R$ 2.9 billion in 3Q14

NII grew by 7.3% compared to the 9M13

BIS reaches 16.04% in September of 2014.


Earnings Highlights

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

R$ million

On 3Q13 On 2Q14 On 9M13

Operating Revenues 17,148 19,065 18,944 50,598 55,870 10.5 (0.6) 10.4

Net Interest Income 11,648 12,353 12,530 34,210 36,713 7.6 1.4 7.3

Fee Income 5,819 6,169 6,363 17,124 18,273 9.4 3.2 6.7

Previ 112 446 228 486 1,120 103.6 (48.8) 130.3

Other Items¹ (431) 98 (177) (1,221) (236) (58.9) - (80.7)

Operating Expenses (12,989) (14,105) (14,473) (38,122) (42,308) 11.4 2.6 11.0

Administrative Expenses (7,389) (7,819) (8,048) (21,750) (23,596) 8.9 2.9 8.5

Allowance for Loan Losses (3,911) (4,570) (4,571) (11,402) (13,328) 16.9 0.0 16.9

Tax Expenses (1,216) (1,314) (1,326) (3,557) (3,888) 9.0 0.9 9.3

Legal Risk (473) (401) (529) (1,413) (1,497) 12.0 31.9 5.9

Non Operating Result 45 36 40 131 173 (11.2) 10.2 32.6

Income Taxes, Statutory Profit Sharing and

Minority Shareholders(1,595) (1,995) (1,626) (4,678) (5,412) 2.0 (18.5) 15.7

Adjusted Net Income 2,610 3,002 2,885 7,929 8,323 10.5 (3.9) 5.0

Adjusted ROE (%) 15.7 17.1 16.1 15.8 15.2 - - -

Net Income 2,704 2,829 2,780 12,733 8,287 2.8 (1.7) (34.9)

ROE (%) 16.3 16.1 15.5 25.6 15.1 - - -

Chg. %3Q13 2Q14 3Q14 9M13 9M14


Sources and Uses

Sep/13 Jun/14 Sep/14 Chg. %

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

Sources 691.5 100.0 774.4 100.0 788.1 100.0 14.0 1.8

Commercial Funding 566.7 81.9 618.9 79.9 623.5 79.1 10.0 0.7

Total Deposits 470.9 68.1 479.9 62.0 468.8 59.5 (0.4) (2.3)

Agrib. LC + Real Estate LC 70.1 10.1 108.1 14.0 113.5 14.4 61.9 5.0

Repos w/ Corporate Bonds¹ 25.6 3.7 30.9 4.0 41.2 5.2 60.6 33.2

Domestic Onlending 82.0 11.9 93.0 12.0 88.0 11.2 7.4 (5.4)

Foreign Borrowing² 67.1 9.7 62.9 8.1 65.6 8.3 (2.2) 4.3

Debt Instruments eligible for capital² - - 16.3 2.1 28.0 3.6 - 71.4

Subordinated Debt 40.9 5.9 43.5 5.6 42.4 5.4 3.8 (2.5)

Others Commercial Papers³ 9.2 1.3 9.6 1.2 9.6 1.2 5.0 0.7

Domestic Hybrid Debt Capital Instr. 8.2 1.2 8.3 1.1 0.1 0.0 (98.9) (98.9)

Financial and Development Funds 6.0 0.9 8.4 1.1 9.6 1.2 59.5 13.8

Compulsory Deposits (88.5) (12.8) (86.6) (11.2) (78.7) (10.0) (11.0) (9.1)

Uses 691.5 100.0 774.4 100.0 788.1 100.0 14.0 1.8

Net Loan Portfolio (a) = (b) + (c) + (d) 607.3 87.8 670.6 86.6 683.7 86.7 12.6 2.0

Loan Portfolio (b) 585.0 84.6 649.6 83.9 662.4 84.0 13.2 2.0

Private Securities (c) 44.4 6.4 45.8 5.9 47.1 6.0 6.1 2.8

Allowance for Loan Losses (d) (22.1) (3.2) (24.8) (3.2) (25.8) (3.3) 16.6 3.9

Available Funds 84.2 12.2 103.9 13.4 104.4 13.3 24.0 0.6

Adjusted Net Loan Portfolio (a) - (e) 493.0 71.3 541.2 69.9 557.9 70.8 13.2 3.1

Onlending in the Country (e) 114.3 16.5 129.4 16.7 125.8 16.0 10.1 (2.8)

Ratio - %

Net Loan Portfolio / Total Deposits 129.0 139.7 145.8

Net Loan Portfolio / Commercial Funding 107.2 108.3 109.7

Adj. Net Loan Portfolio / Comm. Funding 87.0 87.4 89.5

Net Loan Portfolio / Sources 87.8 86.6 86.7

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

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

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

6

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

6

Net Interest Income and Net Interest Margin

(1) Annualized data.

3Q14

5.0

5.6

7.5

13.7

2Q14

4.8

5.4

7.5

13.8

1Q14

4.7

5.2

7.2

13.2

4Q13

4.6

4.8

7.0

13.2

3Q13

4.6

4.8

7.1

13.2

Agribusiness NIM Companies NIM Loan Operations NIM Individuals NIM

On 3Q13 On 2Q14 On 9M13

Net Interest Income 11,648 12,353 12,530 34,210 36,713 7.6 1.4 7.3

Loan Operations Income 17,882 20,227 21,461 51,302 60,897 20.0 6.1 18.7

Funding Expenses (8,477) (10,526) (11,365) (23,076) (31,865) 34.1 8.0 38.1

Institutional Funding Expenses¹ (1,521) (1,604) (1,876) (4,365) (5,085) 23.4 16.9 16.5

Treasury Income² 2,843 3,181 3,236 7,280 9,655 13.8 1.7 32.6

Recovery of Write-offs Loans³ 836 871 903 2,711 2,583 7.9 3.6 (4.7)

Other 85 204 171 358 528 102.2 (16.3) 47.6

3Q13R$ million

Chg. %9M13 9M143Q142Q14

3Q14 2Q14

2.6

1Q14

4.2

2.6

4.1

2.6

4.1

4Q13

2.8

4.4

3Q13

2.9

4.4

Risk Adjusted NIM NIM

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

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

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

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


Loan Portfolio – Broad Concept¹

R$ billion

Sep/14

732.7

342.0

175.1

158.4

57.2

Jun/14

718.8

335.3

173.0

157.2

53.2

Mar/14

699.3

323.5

169.7

150.0

56.2

Dec/13

692.8

322.3

167.9

144.8

57.8

Sep/13

652.2

303.3

163.8

130.1

55.0

Companies Individuals Agribusiness Offshore

46.7%

23.9%

21.6%

7.8%

46.5%

25.1%

19.9%

8.4%

12.3 12.5 18.0 19.3

22.5

12 months Growth (%)

(1) It includes private securities and guarantees provided

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

Classified Loan Portfolio¹ - by contracted period

Jun/14

3Q14

2Q14

44.6 1Q14

2013

35.0

17.1

30.8

Up to 2011

2012

Sep/14

41.5

35.6

7.4

12.0

Sep/13 Mar/14

23.6

Dec/13

11.8 8.6

18.6

8.4

23.9 21.2

28.7

29.0

31.5 36.0

25.6

9.1

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

%

2014

28.5%

9

On Sep/13 On Jun/14

Payroll 51.4 39.6 55.6 39.1 56.7 38.9 10.2 1.9

Salary Loans 18.3 14.1 18.1 12.7 17.9 12.3 (2.3) (1.1)

Mortgage 15.8 12.1 23.5 16.5 25.7 17.7 63.2 9.3

Auto Loans 12.0 9.2 10.9 7.7 10.5 7.2 (12.0) (3.7)

Credit Cards 17.8 13.7 19.3 13.6 19.9 13.7 11.7 3.2

Consumer Finance 6.0 4.6 6.3 4.4 5.9 4.1 (0.9) (5.9)

Overdraft 2.9 2.2 2.8 2.0 2.7 1.9 (6.0) (1.8)

Microcredit 0.8 0.6 1.0 0.7 1.4 1.0 79.4 42.0

Other 5.0 3.9 4.8 3.4 4.9 3.3 (3.8) 0.6

Individuals Loan Portfolio 130.0 100.0 142.3 100.0 145.6 100.0 12.0 2.3

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

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

Organic Individuals Loan Portfolio¹ ²

R$ billion

(1) Classified Concept.

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

75.0% 76.1%


Growth in lower risk lines

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

Payroll (R$ billion)

25.8% Market Share

in 12 months

+63.2%

+108%

Sep/14

10.5

17.1% 17.7%

65.2%

Jun/14

10.9

17.8%

17.6%

64.6%

Sep/13

12.0

18.8%

19.3%

61.9%

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

Organic Portfolio • 88.2% Civil Servants

• 7.8% INSS’s Retirees and Pensioners

• 4.0% Private Sector Employees

+73.1%

Sep/14

35.0

25.7

9.3

Jun/14

32.0

23.5

8.4

Sep/13

20.2

15.8

4.5

Individuals Companies

+2.3%

Sep/14

63.1

Jun/14

63.4

Sep/13

61.6


Loans to Companies – Broad Concept¹

R$ billion

(1) It includes private securities and guarantees provided.

On Sep/13 On Jun/14

Working Capital 164.4 54.2 181.2 54.0 182.6 53.4 11.1 0.8

Investiments 51.6 17.0 60.2 17.9 63.8 18.7 23.6 6.1

Corporate Bonds & Notes 40.7 13.4 41.5 12.4 42.6 12.4 4.5 2.4

Guarantees 19.2 6.3 19.5 5.8 19.2 5.6 (0.2) (1.5)

Trade Finance 15.5 5.1 16.1 4.8 15.9 4.6 2.7 (1.2)

Mortgage 4.5 1.5 8.4 2.5 9.3 2.7 108.0 9.9

Other 7.4 2.4 8.4 2.5 8.7 2.5 17.3 3.1

Companies Loan Portfolio 303.3 100.0 335.3 100.0 342.0 100.0 12.8 2.0

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

12

Corporate Portfolio by Size SME – FGO and FAMPE³


Loans to Companies – Broad Concept¹ R$ billion

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

+15.2%

Sep/14

23.5 3.6

19.9

Jun/14

23.3 3.6

19.7

Sep/13

20.4 3.6

16.8

+12.8%

Sep/14

342.0

240.5

101.5

Jun/14

335.3

234.2

101.1

Sep/13

303.3

208.9

94.4

Medium and Large Companies SME²

SME – Time of Relationship (% of credit concession)

Sep/14

101.5

39.6%

30.5%

23.8% 6.2%

Jun/14

101.1

38.9%

30.8%

24.2% 6.1%

Sep/13

94.4

37.0%

31.2%

24.5% 7.3%

More than 10 years

From 5 to 10 years

From 2 to 5 years

Up to 2 years

Fampe FGO

+15.2%

+7.5%

in 12 months

13

Agribusiness Loan Portfolio¹ (R$ billion)


Agribusiness

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

Mitigators Use (Working Capital for Input Purchase)

R$ billion

34.8%

65.2% Not Insured

Insured

Vintage 14/15 (Sep/14)

Vintage 13/14 (Sep/13)

36.0%

64.0%

Not Insured

Insured

+21.8%

Sep/14

158.4

110.7

47.7

Jun/14

157.2

109.7

47.5

Sep/13

130.1

87.6

42.5

Companies Individuals

+12.3%

+26.4%

14

Coverage Ratio +90 days (%)

14 (1) Required Provision / Classified Loan Portfolio.

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

Asset Quality

Average Risk¹ (%)

Sep/11 Sep/14 Sep/12 Sep/10 Sep/13

3.57 3.66

5.83

4.10 4.16 4.82

5.73 5.66 5.08 4.83

Sep/14

185.9

161.0

Sep/13

191.9

154.0

Sep/12

218.4

150.9

Sep/11

211.2

161.3

Sep/10

201.0

171.2

Banco do Brasil Banking Industry

Banco do Brasil Banking Industry

15

NPL Ratio +90 days (%)

Delinquency and Coverage Ratios

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


Sep/14

2.09

3.00

Jun/14

1.99

3.00

Mar/14

1.97

3.00

Dec/13

1.98

3.00

Sep/13

1.97

3.30

Banking Industry Banco do Brasil

Sep/14

1.1

4.1

4.3

Jun/14

0.9

3.8

4.3

Mar/14

1.1

3.8

4.6

Dec/13

1.2

3.3

4.1

Sep/13

1.1

3.6

4.4

Agribusiness Companies Individuals

0.6

Sep/14

2.7

2.4

Jun/14

0.6

2.4

2.3

Mar/14

0.7

2.2

2.4

Dec/13

0.8

2.3

2.6

Sep/13

0.7

2.2

2.5

Companies Individuals Agribusiness

16

New NPL¹ ², Write Off and NPL Formation Rate

NPL Formation

(1) Quarterly change in the balance of past-due for over 90 days operations + current quarter write-off.

(2) Sep/12 and Dec/12 were revised.

(3) It considers the classified loan portfolio of the previous quarter.


3Q14

3.63 4.59

2Q14

4.16 4.62

1Q14

3.70 3.80

4Q13

3.06 3.89

3Q13

3.45 4.23

2Q13

3.97 3.99

1Q13

3.06 2.98

4Q12

3.23

4.28

3Q12

2.82 2.50

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

0.71 0.73 0.61 0.66 0.74 0.74

0.57

0.89

0.54

New NPL / Loan Portfolio³ (%)

17

Allowance for Loan Losses (ALL) and Loan Portfolio

Allowance for Loan Losses (12 months) / Loan Portfolio

Classified Loan Portfolio – Growth by Risk Level

(0.2)

72.3 1.6 1.1 0.7 1.8

585.0

662.4

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

2.79 2.76 2.81 2.77 2.79

ALL / Loan Portfolio (%) ²

(1) Average classified loan portfolio (2) ALL accumulated in 12 months / 12 months Average Loan Portfolio (3) 3 months Average Loan Portfolio.

(4) Quarterly ALL / 3 months Average Loan Portfolio.

Allowance for Loan Losses (Quarterly) / Loan Portfolio

4.2

604.7

3Q14 1Q14

4.6

654.3

2Q14

4.6

642.7

4.2

626.5

4Q13 3Q13

3.9

579.4

Allowance for Loan Losses

Loan Portfolio³

R$ billion

16.5

1Q14

587.4 628.4

17.5

3Q14 2Q14

16.9

610.4

4Q13

15.6

563.9

3Q13

15.0

538.3

Allowance for Loan Losses

Loan Portfolio¹

+13.2% in 12

months

0.71 0.70 0.68 0.67 0.69

ALL / Loan Portfolio (%) ⁴


18

BV – Light Vehicles1: Production per Business Channel and Delinquency

BV – Net Income

Banco Votorantim

R$ million 135 140 152 121

(159)

3Q14 2Q14 1Q14 4Q13 3Q13


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

Vintage of the Managerial Auto Loan Portfolio

33%27% 23% 19% 15%

59%67% 72% 77% 83% 89%

2%

8%

Dec/14

10%

Sep/14 Jun/14

4%

Mar/14

4%

Dec/13

6%

Sep/13

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

Estimate

1% 3Q14

3.4

0.6

2.8

3Q13

3.3

0.7

2.6

3Q12

2.5

0.5

2.0

5.9 6.5 9.1

NPL 90 - Managerial Loan Portfolio (%) Car dealers (R$ billion)

Multibrand car dealers (R$ billion)


Fee Income

R$ million

Chg. %

On 3Q13 On 2Q14 On 9M13

Fee Income 5,819 6,169 6,363 17,124 18,273 100.0 9.4 3.2 6.7

Credit / Debit Cards 1,448 1,567 1,585 4,108 4,654 25.5 9.5 1.1 13.3

Account Fees 1,024 980 1,056 3,089 2,994 16.4 3.1 7.8 (3.1)

Asset Management Fees 960 969 1,116 2,776 3,023 16.5 16.3 15.1 8.9

Loan Fees 601 601 577 1,785 1,738 9.5 (3.9) (4.0) (2.6)

Collections 362 363 376 1,053 1,090 6.0 3.8 3.4 3.5

Insurance, Pension and Premium Bonds 267 394 333 880 1,018 5.6 24.9 (15.4) 15.7

Billings 219 229 235 652 691 3.8 7.1 2.7 6.0

Interbank 184 185 188 538 552 3.0 2.4 2.0 2.6

Capital Market 107 131 125 405 352 1.9 16.0 (5.2) (13.0)

Fiduciary Services 97 106 119 282 329 1.8 22.4 12.5 16.9

Other 550 644 654 1,556 1,832 10.0 18.9 1.6 17.7

3Q13 2Q14 3Q14 9M13 9M14 Share %


BB Seguridade

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

822845

548

+50.1%

+49.1%

9M14

2,316

9M13

1,553

3Q14 2Q14 3Q13 (1) It does not consider DPVAT (2) It considers PGBL + Traditional + VGBL

Insurance´s PremiumsMarket

Share %Ranking

Vehicle¹ 15.2 2º

Life 19.2 1º

Mortgage 6.6 3º

Rural 67.0 1º

CollectionMarket

Share %Ranking

Pension Plan² 38.0 1º

Premium Bond 25.9 1º


Cards – Organization Chart


Total Turnover Net Income

512497342

+38.5%

+49.7%

9M14

1,489

9M13

1,075

3Q14 2Q14 3Q13

+12.7%

3Q14

59.0

23.5

35.6

2Q14

59.2

25.5

33.8

3Q13

52.4

21.5

30.9

Debit Cards Credit Cards

Cards

R$ billion R$ million

Elo Cards Brand: Turnover and Cards Base

+10.1%

3T14

4.2

2T14

6.1

3T13

3.9

Turnover

7.2 7.2 6.2

Cards Base – R$ million

R$ billion

Alelo Cards: Turnover

+37.3%

3Q14

2.6

2Q14

2.5

3Q13

1.9

R$ billion


Administrative Expenses

R$ million

Chg. %

On 3Q13 On 2Q14 On 9M13

Personnel Expenses (4,156) (4,465) (4,630) (12,410) (13,571) 11.4 3.7 9.3

Other Administrative Expenses (3,233) (3,354) (3,417) (9,339) (10,025) 5.7 1.9 7.3

Expenses with Outsourced Services (689) (640) (646) (1,994) (1,948) (6.2) 0.9 (2.3)

Telecommunications and Data Processing (574) (613) (590) (1,692) (1,792) 2.8 (3.8) 5.9

Expenses with Premises and Equipment (541) (588) (618) (1,604) (1,782) 14.1 5.0 11.1

Security, Guard, and Transport Services (500) (539) (588) (1,422) (1,673) 17.7 9.2 17.7

Amortization and Depreciation (274) (316) (339) (794) (953) 23.8 7.2 20.0

Marketing and Public Relations (196) (210) (178) (485) (550) (8.9) (15.0) 13.4

Other Administrative Expenses (460) (449) (459) (1,349) (1,327) (0.2) 2.3 (1.6)

Administrative Expenses (7,389) (7,819) (8,048) (21,750) (23,596) 8.9 2.9 8.5

3Q13 2Q14 3Q14 9M13 9M14

24 24

Cost to Income Ratio (12 months)¹

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


%

Sep/14

44.0

Jun/14

44.1

Mar/14

44.3

Dec/13

44.3

Sep/13

43.4

25 25

BIS Ratio¹ ²

%

(1) Financial Consolidated.

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

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

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

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


Sep/14

16.04

9.28

11.51

4.53

Jun/14

14.19

7.46

10.13

4.06

Dec/13

14.53

8.24

10.51

4.02

2012

14.83

10.55

4.28

2011

13.98

10.53

3.45

2010

14.08

11.02

3.06

Core Capital

Tier I

Tier II

BIS III Basel I and II

Considering the full implementation of the adjustments for Basel III, measured over June/2014³, the estimated BIS Ratio would reach 14.69% and the Tier I, 10.06%.

26 Banco do Brasil S.A. – Resultado do 3º Trimestre de 2014

BIS Comparative – Jun/14 versus Sep/14

%

Core Capital BIS Ratio

Jun/14 Sep/14

7.46

7.46

0.55

0.98

0.29

9.28

Jun/14 Sep/14

14.19

14.19

1.06

0.59

16.04

Macroprudential Measures Domestic Hybrid Debt Capital Instrument Reclassification Other Variations

0.20

27 27

Guidance

(1) Adjusted ROE estimated for 2014 uses estimated adjusted shareholders’ equity, free from the effects of: (i) the restatement of assets and actuarial, liabilities arising from the

Deliberation CVM/695; (ii) Corporate Profit Sharing; and (iii) as of Sep/14, was also excluded the amount of R$ 8.1 billion related to the reclassification of the debt instruments eligible as

core capital for shareholders’ equity of the Bank.

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

(3) It includes private securities and guarantees provided.

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


Adjusted Return on Equity¹ 14 - 17 15.2 Unchanged

Net Interest Income 5 - 9 7.3 Unchanged

Commercial Funding² 14 - 18 10.0 12 - 16

Domestic Loan Portfolio³ - Broad Concept 14 - 18 13.1 12 - 16

Individuals 12 - 16 6.9 8 - 12

Companies 14 - 18 12.8 12 - 16

Agribusiness 18 - 22 21.8 16 - 20

Allowance for Loan Losses⁴ 2.7 - 3.1 2.8 Unchanged

Fee Income 6 - 9 6.7 Unchanged

Administrative Expenses 5 - 8 8.5 Unchanged

2014 Performance2014 Guidance 2014 Revised guidance

%

28 Banco do Brasil S.A. – Resultado do 3º Trimestre de 2014 28

Contacts

Investor Relations Unit

Av. Paulista, 2.163 – 2nd Floor

01311-933 - São Paulo (SP)

Telephone: +55 (11) 3066 9110

bb.com.br/ir

[email protected]


Appendix

30. One-Off Items

31. BIS III – Capital Requirements

32. Funding

33. Foreign Borrowing

34. Loans to Individuals – Broad Concept

35. Individuals Loan Portfolio

36. Individuals Loan Portfolio – Average Rates/Tenor

37. Banco Votorantim – Asset Quality

38. Banco Votorantim - Auto Loans Portfolio

39. Loans to Companies - SME

40. Agribusiness Portfolio by Purpose

41. Agribusiness

42. Total Loan Portfolio - Risk Level

43. Renegotiated Loan Portfolio

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

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

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

47. Distribution Network

48. Clients and Service Network Channels

49. Human Resources


One-Off Items

R$ million

Adjusted Net Income 2,610 3,002 2,885 7,929 8,323

(+) One-Off Items 94 (173) (104) 4,803 (36)

Economic Plans (295) (328) (248) (627) (920)

Tax Efficiency - - - 142 260

Additional Allowance for Loan Losses - Semi-annual revision - (143) - 38 (143)

Provision for Agreement Committee - - - (186) -

Lawsuits Reconciliation - - - 303 -

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

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

Extraordinary Provision for Lawsuits 462 163 63 (805) 359

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

Tax Eff. and Stat. Profit Sharing on One-Off Items (73) 135 81 (3,710) 23

Net Income 2,704 2,829 2,780 12,733 8,287

3Q13 2Q14 3Q14 9M13 9M14


Implementation Schedule

%

BIS III – Capital Requirements

2013 2014 2015 2016 2017 2018 2019

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

Tier I 5.50 5.50 6.00 6.00 6.00 6.00 6.00

Brazilian BIS Ratio 11.00 11.00 11.00 9.88 9.25 8.63 8.00

Additional CET1 (Buffers)0.625 a

1.25

1.25 a

2.50

1.875 a

3.752.5 a 5.0

CET1 + Buffers 4.50 4.50 4.505.125 a

5.75

5.75 a

7.00

6.375 a

8.287.0 a 9.5

Tier I + Buffers 5.50 5.50 5.506.625 a

7.257.25 a 8.5

7.875 a

9.75

8.5 a

11.00

Brazilian BIS Ratio + Buffers 11.00 11.00 11.0010.5 a

11.125

10.5 a

11.75

10.5 a

12.375

10.5 a

13.0


R$ billion

Funding

On Sep/13 On Jun/14

Time Deposits 246.5 43.5 235.2 38.0 221.8 35.6 (10.0) (5.7)

Judicial Deposits 97.4 17.2 107.2 17.3 110.1 17.7 13.1 2.7

Saving Deposits 134.2 23.7 146.5 23.7 149.0 23.9 11.0 1.7

Agribusiness Letters of Credits 67.2 11.9 99.6 16.1 105.5 16.9 57.1 5.9

Demand Deposits 69.2 12.2 69.4 11.2 69.5 11.1 0.5 0.2

Repurchase Agreement with Private Securities¹ 25.6 4.5 30.9 5.0 41.2 6.6 60.6 33.2

Interbank Deposits 21.0 3.7 28.8 4.7 28.5 4.6 35.8 (1.1)

Mortgage Bonds² 2.9 0.5 8.5 1.4 8.0 1.3 171.3 (5.7)

TOTAL 566.7 100.0 618.9 100.0 623.5 100.0 10.0 0.7

Share %Chg. %

Sep/13 Share % Jun/14 Share % Sep/14

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

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


Foreign Borrowing

US$ billion

Sep/14

51.4 0.8

3.2

8.4

16.7

22.4

Jun/14

56.0 2.0

3.1

9.3

17.5

24.0

Sep/13

49.4 2.1

3.2

10.5

12.9

20.7

Repo + Other

Companies

Individuals

Interbanking

Fixed Income and Deposit Certificates

Issue Date Volume (US$ million) CurrencyTerm in

YearsStructure

Rating ¹

(S&P /

Moody´s)

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

03/05/2012 750 USD - Perpetual BB

06/19/2012 750 USD 10.6 Tier II Subordinated BB+/Baa1

09/24/2012 317 JPY 3 Senior BBB / Baa1

10/10/2012 1,925 USD 10 Senior BBB / Baa1

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

07/25/2013 918 EUR 5 Senior BBB / Baa1

12/20/2013 303 CHF 5.6 Senior BBB

03/26/2014 413 EUR 5 Senior BBB / Baa1

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

International bonds issued in 2012/2013/2014

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

34

On Sep/13 On Jun/14

Payroll 61.6 37.6 63.4 36.6 63.1 36.0 2.3 (0.5)

Auto Loans 35.2 21.5 33.2 19.2 33.0 18.8 (6.3) (0.8)

Salary Loans 18.3 11.2 18.1 10.5 17.9 10.2 (2.3) (1.1)

Mortgage 15.8 9.6 23.5 13.6 25.7 14.7 63.2 9.3

Credit Cards 18.0 11.0 19.5 11.3 20.1 11.5 11.9 3.2

Consumer Finance 6.0 3.6 6.3 3.6 5.9 3.4 (0.6) (5.8)

Overdraft 2.9 1.8 2.8 1.6 2.7 1.6 (6.0) (1.8)

Other 6.1 3.7 6.2 3.6 6.7 3.8 10.0 7.9

Individuals Loan Portfolio 163.8 100.0 173.0 100.0 175.1 100.0 6.9 1.2



Loans to Individuals – Broad Concept¹

R$ billion

(1) It includes guarantees provided.

79.9% 79.7%


Individuals Loan Portfolio

R$ billion

Acquired Portfolios

Market Share

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

(2) Free Resources

On Sep/13 On Jun/14

Auto loans 10.8 57.1 11.6 65.9 13.0 73.4 20.2 11.8

Payroll loans 8.1 42.9 6.0 34.1 4.7 26.6 (42.1) (21.7)

Total 18.9 100.0 17.6 100.0 17.7 100.0 (6.5) 0.4


Sep/13 Jun/14 Sep/14

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

Payroll Loans 61.6 216.8 28.4 63.4 238.1 26.6 63.1 244.6 25.8

Auto loans² 34.5 202.7 17.0 32.4 191.4 16.9 32.1 187.8 17.1

Mortgage 15.8 319.4 4.9 23.5 384.5 6.1 25.7 407.0 6.3


Individuals Loan Portfolio – Average Rates/Tenor

Sep/13 Jun/14 Sep/14

Banco do Brasil

Auto loans

Average rate - % p.m 1.26 1.35 1.38

Average term - months 34 32 32

Mortgage

Average contracted amount - R$ thousand 127.7 115.4 105.6

Average Rate - % p.y. 8.2 7.6 7.5

Average term - months 318.0 334.0 340.0

Payroll loans

Average rate - % p.m 1.82 1.76 1.76


BV - Auto Loans

Average rate - % p.m 1.87 1.97 1.96


37

Banco Votorantim – Asset Quality – Managerial Portfolio

Delinquency and Risk(%)

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

3Q14

0.77

0.38

2Q14

0.86 0.96

1Q14

0.83

1.31

4Q13

0.87 0.58

3Q13

0.90 0.66

2Q13

1.34

0.90

1Q13

1.14

0.68

Write-off New NPL¹

3Q14

10.9

89.1

2Q14

11.5

88.5

1Q14

11.6

88.4

4Q13

11.1

88.9

3Q13

9.9

90.1

2Q13

10.0

90.0

1Q13

10.3

89.7

D-H Levels AA-C Levels

5.9 6.5 6.2 5.1 5.5 5.7 6.2

NPL + 90 days

(1) Quarterly change in the balance of past-due for over 90 days operations + current quarter write-off.

(2) Considers the Classified loan portfolio of the previous quarter.

0.65 1.65

2.19

0.94 1.04 1.36 1.00

New NPL / Loan Portfolio² (%)


38

Average Tenor and Average Down-payment (origination)

Auto Loans Origination (R$ billion)

Banco Votorantim – Auto Loan Portfolio

4444444545

3Q14

40%

2Q14

39%

1Q14

39%

4Q13

38%

3Q13

37%

Average tenor (months) Average down payment

3Q14

3.6

0.7

2.9

2Q14

3.2

0.6

2.6

3Q13

3.5

1.0

2.6

Other Vehicles¹ Used Light Vehicles


Allowance for Loan Losses (managerial²) – R$ million

563417 557

408 378

199849

156

-13.7%

3Q14

451 74

2Q14

523 115

1Q14

714

4Q13

1,266

3Q13

761

Retail Wholesale

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

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


Loans to Companies - SME

R$ billion

Loans per Segment

Products

On Sep/13 On Jun/14

Commerce 39.2 41.5 42.3 41.8 41.9 41.3 7.1 (0.9)

Manufacturing Industries 29.5 31.3 29.5 29.1 29.6 29.2 0.2 0.4

Services Segment 25.7 27.3 29.4 29.0 30.0 29.5 16.4 2.0

Total 94.4 100.0 101.1 100.0 101.5 100.0 7.5 0.3

Sep/13Chg. %

Share % Jun/14 Share % Sep/14 Share %

On Sep/13 On Jun/14

Working Capital 60.4 64.0 65.5 64.7 65.1 64.1 7.7 (0.6)

Investment 31.8 33.6 33.2 32.8 34.3 33.8 8.1 3.4

Foreign Trade 2.3 2.4 2.5 2.4 2.1 2.0 (7.7) (15.7)

Total 94.4 100.0 101.1 100.0 101.5 100.0 7.5 0.3



Agribusiness Portfolio by Purpose

R$ billion

On Sep/13 On Jun/14

Investment 52.5 40.4 65.3 41.6 69.0 43.5 31.3 5.6

Work. Cap. for Input Purchase 40.0 30.8 50.6 32.2 47.8 30.2 19.5 (5.5)

Agroindustry 30.5 23.5 31.6 20.1 31.3 19.8 2.4 (1.1)

Crop Trading 4.5 3.5 5.8 3.7 6.4 4.1 43.2 10.6

Other 1.8 1.4 2.2 1.4 2.3 1.4 28.3 2.3

Classified Loan Portfolio 129.4 99.5 155.6 99.0 156.8 99.0 21.2 0.8

Rural Product Bills and Guarantees 0.7 0.5 1.6 1.0 1.6 1.0 123.7 0.4

Loan Portfolio - Broad Concept 130.1 100.0 157.2 100.0 158.4 100.0 21.8 0.8



Agribusiness

R$ billion Loan Portfolio per Customer Size¹

(1) Loan portfolio – broad concept.

Segment Sep/13 Share % Jun/14 Share % Sep/14 Share %

Medium and Large Sized 56.0 43.1 74.1 47.2 73.6 46.4

Businesses 36.1 27.8 40.0 25.4 39.7 25.0

Small 30.9 23.7 34.9 22.2 36.4 23.0

Cooperatives 6.4 4.9 6.6 4.2 7.2 4.6

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

Total 130.1 100.0 157.2 100.0 158.4 100.0


Total Loan Portfolio¹ - Risk Level

(1) Classified loan portfolio does not consider Banco Votorantim operations.

(2) Companies portfolio revised in Sep/13 according to Notes 10.

R$ million

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

AA 315,153 - 53.9 366,044 - 56.4 376,941 - 56.9 36.6

A 98,490 492 16.8 106,034 530 16.3 105,009 525 15.9 33.6

B 117,836 1,178 20.1 118,893 1,189 18.3 120,179 1,202 18.1 15.8

C 24,181 725 4.1 25,528 766 3.9 25,857 776 3.9 7.0

D 4,343 434 0.7 4,073 407 0.6 4,172 417 0.6 2.0

E 7,107 2,132 1.2 8,498 2,549 1.3 8,950 2,685 1.4 1.1

F 2,524 1,262 0.4 3,643 1,821 0.6 3,265 1,632 0.5 0.6

G 2,276 1,593 0.4 3,109 2,176 0.5 3,349 2,344 0.5 0.6

H 13,080 13,080 2.2 13,743 13,743 2.1 14,670 14,670 2.2 2.7

Total 584,989 20,897 100.0 649,564 23,182 100.0 662,392 24,251 100.0 100.0

AA-C 555,660 2,396 95.0 616,498 2,485 94.9 627,986 2,503 94.8 93.1

D-H 29,329 18,501 5.0 33,066 20,697 5.1 34,406 21,749 5.2 6.9

Sep/13 ² Jun/14 Sep/14


Renegotiated Loan Portfolio¹

R$ million

BB Consolidated

3Q13 2Q14 3Q14

Credits Renegotiated 9,834 12,063 9,254

Renegotiated overdue Loans 692 968 1,081

Renovated 9,142 11,095 8,173

Credits Renegotiated by Delay - Changes

Initial Balance 8,227 8,555 8,659

Contracts 692 968 1,081

Interest Received and Appopriated (125) (294) (414)

Write-Off (405) (571) (374)

Overdue Renegotiated Loan Portfolio 8,389 8,659 8,952

Allowance for Loan Losses Balance 5,054 5,277 5,362

NPL + 90 days 1,430 1,364 1,629

Indicators - %

All. for Loan Losses / Loan Portfolio 60.2 60.9 59.9

NPL + 90 days / Loan Portfolio 17.0 15.7 18.2

All. for Loan Losses Balance/NPL + 90 days 353.4 387.0 329.1

(1) Table according Notes 10 (Credit)


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

R$ million

3Q13 2Q14 3Q14

(a) Fair Value of the Plan's Assets 134,982 141,679 141,679

(b) Present Value of Actuarial Liabilities (122,121) (122,205) (122,205)

(c) Surplus BB = [(a) + (b)] x 50% 6,430 9,737 9,737

(d) Actuarial Assets (Initial Period) 6,430 16,024 9,737

(e) Anticipated Financial Results - Monthly 112 446 228

(f) Contributions of Funds 113 172 117

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

(h) Half-year Adjustment on Shareholders Equity - (6,905) -

(i) Actuarial Assets (Period End) = (d) + (e) + (f) + (g) + (h) 6,655 9,737 10,083


Actuarial Liabilities (Cassi) - CVM 695/12

R$ million

3Q13 2Q14 3Q14

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

(b) Present Value of Actuarial Liabilities (7,255) (5,790) (5,790)

(c) Deficit BB = [(a) + (b)] (7,255) (5,790) (5,790)

(d) Acturial Liabilities (Initial Period) (7,255) (6,457) (5,790)

(e) Amounts recognized in statement of income (230) (241) (195)

(f) BB - Amount paid 125 121 113

(g) Amount Recognized in Half-Yearly Adjust-Shareholders' Eq. - 786 -

(h) Actuarial liabilities (Period End) = [(d) + (e) + (f) + (g)] (7,360) (5,790) (5,873)


Amounts recognized in equity – CVM 695/2012

R$ million

Jun/13 Previ Plano 1 Cassi Others Plans Total

Valuation Adjustments (6,238) 612 387 (5,239)

Tax Effects 2,669 (245) (156) 2,268

Effects on Shareholders Equity (3,569) 367 231 (2,970)

Dec/13 Previ Plano 1 Cassi Others Plans Total

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

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

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

Jun/14 Previ Plano 1 Cassi Others Plans Total

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

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

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


Global Presence

Northeast 32.5%

Midwest 26.7%

North 28.8%

South 24.9%

Southeast 20.0%

(1) Banking Agents and Postal Bank branches

Quantity of Bank Branches

(Regional Market Share)

Total = 23.9% Market Share in Brazil

Branches 12

Sub-branches 4

Representative Offices 10

Subsidiaries and affiliates 16

Shared Services Units 2

Business Units 1

Banco do Brasil in the World

Presence in 25 Countries

Brazil Total Service Network Sep/14

Own Service Network 18,924

Branches 5,493

MaisBB Network¹ 15,148

Banco Postal 6,189

Shared Service Network 34,964

Total 69,036


Clients and Service Network Channels

BB Digital – Transactions¹ in 9M14 Clients

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

61.8 million Clients

10.8 million Savers

2.4 million SMEs

2.3 million INSS’s Pensioners

R$ 754 bi (34.3%)

R$ 1,445 bi (65.7%)

Other Channels³

BB Digital²

3.3 billion (40.9%)

4.8 billion (59.1%)

Total Volume Total Transactions

489.4%

9M14

2,210.1

2013

1,319.1

2012

375.0

2011

107.4

16.1

44.0

Jun/14 Sep/14

65.5 5.3

64.6 5.4

15.3

44.0

Mar/14

64.0 5.3

14.6

44.1

Dec/13

63.1 5.0

14.0

44.1

Sep/13

60.4 2.7

13.4

44.3

ATM: BRB + CEF ATM ATM: Banco 24h

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

(2) ATM, mobile and internet

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


Human Resources

Profile of Staff Members

Changes of BB’s Staff (thousand)

Education’s Level

9.8

113.6

Sep/10

118.5 10.0

108.5

Sep/14

117.9 6.0

111.9

Sep/13

118.3 5.6

112.7

Sep/12

123.3 8.8

114.5

Sep/11

123.3

Interns Employees

58.5%

41.5%

Sep/13 Sep/14

Male Female

58.4%

41.6%

0.4%

29.6%

46.2%

23.9%

Others

Specialization, Master’s and Doctorate

College

High School

Sep/13 Sep/14

31.5%

0.3%

45.5%

22.7%

3q14 earnings release - bb · net loan portfolio / total deposits 129.0 139.7 145.8 net loan...

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