3q04 earnings

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3Q04 Earnings3Q04 Earnings

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highlightshighlights

Total Assets - Largest Bank in Brazil

Leadership in Assets Under Management

Leadership in loan Portfolio

Leadership in Total Funding

Customer Base

Customers in BB’s Internet

Largest ATM network in Latin America

Largest network service in the country

2nd in ANBID Rank

3

Spread ReductionSpread Reduction

Increase in Service FeesIncrease in Service Fees

Commercial Income Recovery Commercial Income Recovery

Productivity Ratios maintenanceProductivity Ratios maintenance

Growth of the Retail Credit PortfolioGrowth of the Retail Credit Portfolio

Increase of Income Tax and Social Contribution ExpensesIncrease of Income Tax and Social Contribution Expenses

result buildingresult building

4

Income Statement - with reallocations

solid resultssolid results

3Q03 2Q04 3Q04 /3Q03 /2Q04

Gross Financial Margin 3,888 3,925 3,919 0.8 (0.2)Provision for NPL (747) (903) (856) 14.6 (5.3)

Net Financial Margin 3,141 3,022 3,063 (2.5) 1.4Service Fees 1,412 1,643 1,717 21.5 4.5Turnover Tax Expenses (242) (323) (345) 42.6 6.7

Contribution Margin 4,312 4,341 4,435 2.9 2.2Administrative Expenses (2,931) (3,093) (3,129) 6.7 1.1

Commercial Income 1,381 1,248 1,307 (5.4) 4.7Operating Income 1,213 1,003 1,256 3.5 25.1Income before Profit Sh. Taxes Ext. Items 1,231 1,043 1,336 8.5 28.1

Income Tax and Social Contribution (516) (200) (545) 5.7 173.1Profit sharing (50) (140) (67) 34.4 (52.1)

Recurrent Result 665 703 724 8.8 2.9Extraordinary items - 102 109 6.7Net Income 665 805 833 25.2 3.4

EPS - R$ 0.91 1.10 1.14 25.2 3.4ROE - % (Annualized) 25.7 27.7 27.5ROA - % (Annualized) 1.3 1.4 1.4

Quarterly Flow Change %

-

R$ million

5

3Q03 3Q04 Abs. Chg.

Volume: Assets – Permanent ¹ 209,072 227,099 18,027Gross Financial Margin 3,888 3,919 31Spread - % ² 1.8597 1.7257 (0.1341)

Change G.F.M. (Distribution) 31Gain with Volume 4,223 335Loss with Spread 3,608 (280)Loss with Volume and Spread (24)

Quarterly Flow

new environment, new challengenew environment, new challenge

Gain with Volume

Loss with Spread

Loss with Volume and Spread

335

(280) (24)

3,888

3Q03 - 1.8597

3Q04 - 1.7257

3Q04 - 227,099

3Q03 - 209,072

Volume - R$ million

Spread - %

Analysis of volume and spread

R$ million

¹ Average Balance

² Gross Financial Margin / (Assets - Permanent)

6

3Q03 2Q04 3Q04 3Q03 2Q04 3Q04

Rate 1.86 1.79 1.73 1.86 1.79 1.73Credit Operations 3.12 3.06 3.02 0.94 1.04 1.00

Individual 9.30 9.27 8.70 0.51 0.58 0.55Corporate 2.02 1.99 1.96 0.27 0.30 0.30Agribusiness 1.62 1.24 1.37 0.17 0.14 0.14Other Operations (0.53) 0.99 0.58 (0.01) 0.01 0.01

Funding 1.44 1.00 0.91 0.58 0.42 0.38Other 1.15 1.38 1.38 0.34 0.34 0.34

Nominal Spread Weighted Spread

Spread analysis - %

new environment, new challengenew environment, new challenge

2Q04 3Q043Q03

Credit Operation Mix - %

18.2

43.9

34.3

3.6

Individual Corporate Agribusiness Other Operations

18.5

44.8

33.1

3.519.2

45.6

31.7

3.5

7

margin growth guaranteed by business diversification

margin growth guaranteed by business diversification

R$ million 3Q03 2Q04 3Q04 /3Q03 /2Q04

Gross Financial Margin 3,888 3,925 3,919 0.8 (0.2)Provision for NPL (747) (903) (856) 14.6 (5.3)

Net Financial Margin 3,141 3,022 3,063 (2.5) 1.4Service Fees 1,412 1,643 1,717 21.5 4.5Turnover Tax Expenses (242) (323) (345) 42.6 6.7

Contribution Margin 4,312 4,341 4,435 2.9 2.2

Quarterly Flow Change %

3Q03 2Q04 3Q04 /3Q03 /2Q04

Service revenues 1,412 1,643 1,717 21.5 4.5Customer Relationship Fees 407 510 514 26.3 0.8Asset Management Fees 214 242 270 26.2 11.6Credit Operations 142 161 161 13.1 (0.6)Collection 130 157 158 21.7 0.8Services to Related Companies 34 39 46 34.0 19.0Third Party Revenue and Payments 104 104 112 8.1 8.1Credit Cards 109 141 137 26.4 (2.9)Others 273 289 318 16.8 10.3

Quarterly Flow Change %R$ million

8

Asset Management - R$ billion

customers’ loyalty and asset management leadership

customers’ loyalty and asset management leadership

Customer Base - in million

Service Fees + GFM / Customer - R$ ¹

¹ Customer base average of the last 4 quarters

Market Share - %

17.018.8 19.3 20.1 20.7

326 321300 296 286

3Q03 4Q03 1Q04 2Q04 3Q04

91.8102.7

116.0 116.9 122.5

18.9 19.0 20.2 19.9 20.0

3Q03 4Q03 1Q04 2Q04 3Q04

9

Human Resources - in thousands

Deposits + Assets under Manag. / Employee - R$ million

2.4 2.6 2.8 2.8 2.9

Total Employees Interns

90.5 90.8 92.3 92.6 93.1

79.7 80.6 81.8 81.9 82.6

10.8 10.2 10.6 10.7 10.5

3Q03 4Q03 1Q04 2Q04 3Q04

Coverage Ratio % - YTDService Income / Personnel Expenses

85.1 82.8

98.6 98.3 98.4

3Q03 4Q03 1Q04 2Q04 3Q04

cost structure suitable with business generation


3Q03 2Q04 3Q04 /3Q03 /2Q04Personnel Expenses (1,681) (1,675) (1,744) 3.7 4.1

Salaries (688) (831) (712) 3.5 (14.3)Benefits (163) (191) (182) 11.7 (4.7)Social Charges (278) (312) (300) 8.1 (3.7)Training (10) (11) (10) (2.5) (9.5)Honorary of Directors and Councilmen (1) (2) (3) 128.6 26.5Provisions for Employees Expenses (417) (206) (396) (5.1) 92.3Labor Suits (125) (122) (141) 13.3 15.5


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Work Force per Branch ¹

Assets per Work Force - R$ thousand

Customers per Work Force



Productivity Ratios

¹ Branch, Advanced Service Post and Banking Service Post

2,376

3Q03

2,534

4Q03

2,503

1Q04

2,455

2Q04

2,531

3Q04

17.3

3Q03

17.3

4Q03

17.5

1Q04

17.4

2Q04

17.4

3Q043Q03

188

4Q03

206

1Q04

209

2Q04

217

3Q04

222

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Points of Service - in thousands



12.9 13.2 13.5 13.9 14.2

4.75.0 5.0 5.0 4.9

3Q03 4Q03 1Q04 2Q04 3Q04

Credit Operations / Points of Service - R$ million

Customers per Point of Service

3Q03 2Q04 3Q04 /3Q03 /2Q04

Other Administrative Expenses (1,221) (1,381) (1,344) 10.1 (2.7)Telecommunications and Data Processing (292) (316) (315) 8.0 (0.2)Amortization and Depreciation (122) (138) (131) 7.6 (4.9)Security, Guard and Transport Services (164) (171) (173) 5.2 1.5Expenses with Premises and Equipment (137) (154) (145) 5.8 (5.8)Marketing and Public Relations (102) (104) (132) 29.1 26.4Expenses with Outsource Services (96) (121) (127) 32.7 4.9Other Administrative Expenses (308) (377) (320) 4.2 (15.0)


1,3191,418 1,423 1,442 1,453

3Q03 4Q03 1Q04 2Q04 3Q04

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productivity equation completed by technology

productivity equation completed by technology

Automatization

Efficiency Ratio % - YTDAdministrative Expenses / Operational Income

Electronic Transactions / Total Transactions - %

3Q04 - %3Q03 - %

ATM Internet Financial Manager. Cashier POS and Others

85.286.4 86.3 86.9

89.6

3Q03 4Q03 1Q04 2Q04 3Q04

56.5 56.2 55.6 56.8 56.4

3Q03 4Q03 1Q04 2Q04 3Q04

51.2

11.6

16.0

14.8

6.4

50.6

15.0

16.8

10.4

7.2

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Business vs. Expenses - (%)

productivity consistent improvement

productivity consistent improvement

Service Revenues Gross Financial Margin Total

36.6 37.5 41.046.2 48.5

54.8

87.794.6

110.3

140.7135.2 130.3

124.3132.1

151.4

186.9 183.7 185.2

1999 2000 2001 2002 2003 Jan/Sep

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the bank that invests the most in Brazilthe bank that invests the most in Brazil

Asset Composition - %

3Q03

19.2

4.6

28.1

34.4

13.6

4Q03

18.0

4.1

28.5

30.2

19.2

1Q04

19.1

3.9

28.8

29.4

18.9

2Q04

21.6

3.6

29.7

30.2

15.0

3Q04

Other Assets Tax CreditCredit Operations and Leasing Securities PortfolioLiquid Assets except Securities

Market Funding - R$ billion

Interbank Deposits

Time Deposits

Money Market Borrowing

TotalSaving deposits

Demand Deposits

3Q03 2Q04 3Q04

20.5

26.6

6.4

29.4

28.9

7.7

30.2

29.9

5.5 49

.6

46.5

149.

5

49.7

37.1

152.

9

49.4

42.0

157.

1

R$ million 3Q03 2Q04 3Q04 /3Q03 /2Q04Total Assets 215,134 227,374 235,599 9.5 3.6

Liquid Assets except Securities 29,340 30,316 35,228 20.1 16.2Securities Portfolio 74,055 69,855 71,120 (4.0) 1.8Credit Operations and Leasing 60,442 69,247 69,961 15.7 1.0Tax Credit 9,897 8,971 8,505 (14.1) (5.2)Other Assets 41,400 48,986 50,785 22.7 3.7

Total Liabilities 215,134 227,374 235,599 9.5 3.6Deposits 103,071 115,795 115,079 11.6 (0.6)Other Liabilities 100,376 98,715 106,749 6.3 8.1

Shareholders’ Equity 11,687 12,864 13,771 17.8 7.1

Change %

21.5

3.9

30.5

30.7

13.3

15

Securities Portfolio

liquidity preservedliquidity preserved

Securities Portfolio Maturity - %

R$ million

Up to 1 year 1 to 5 years 5 to 10 years Over 10 years

60.4%

39.6%

73.0%

27.0%

1 to 3 years 3 to 5 years

3Q03 3Q04

18.9

70.5

8.71.8

3Q03

16.7

72.0

9.32.1

4Q03

19.5

69.3

10.6

0.7

1Q04

21.4

67.3

10.7

0.6

2Q04

22.8

65.9

10.7

0.6

3Q04

3Q03 2Q04 3Q04 /3Q03 /2Q04Securities Portfolio 74,055 69,855 71,120 (4.0) 1.8

Available for trading 5,393 11,998 12,690 135.3 5.8Available for sale 43,158 31,008 31,997 (25.9) 3.2Held to maturity 25,109 25,146 25,945 3.3 3.2Derivatives 396 1,702 488 23.5 (71.3)

Change %

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well balanced credit portfoliowell balanced credit portfolio

3Q04 - Balance R$ 84.1 billion

Credit Portfolio



Retail Commercial Agribusiness Foreign Trade Abroad Others

20.6%

20.4%

34.1%

10.4%

12.3%2.1%

23.0%

20.4%

30.8%

10.6%

13.3%1.9%

24.0%

21.4%

30.5%

10.1%

11.9%2.0%

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Credit Portfolio by Risk Level

Shares % - 3Q04

increase with responsibilityincrease with responsibility

AA-C D-H

BB SFN ¹

¹ Source: Brazilian Central Bank

Retail

6.5

93.5

Commercial

15.1

84.9

Agribusiness

4.1

95.9

Foreign Trade

2.1

97.9

8.2

91.8

10.6

89.4

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Retail

Credit Portfolio

Agribusiness

Commercial and Foreign Trade

increase with responsibilityincrease with responsibility

Credit Portfolio by Risk Level - %

3Q043Q03 3Q043Q03

3Q043Q03 3Q043Q03

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

AA A B C D E F G H

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

AA A B C D E F G H

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

AA A B C D E F G H

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

AA A B C D E F G H

19

3Q03 4Q03 1Q04 2Q04 3Q04

(A) Allowance for Loan Losses - Quarterly (747) (827) (901) (903) (856)(B) Allowance for Loan Losses - 12 Months (3,101) (3,072) (3,337) (3,378) (3,487)(C) Allowance for Loan Losses - 12 Months ¹ (3,101) (3,072) (3,600) (3,786) (3,975)(D) Loan Portfolio 72,601 77,636 79,647 83,131 84,148(E) Average Portfolio - 3 Months 70,484 76,550 78,823 82,283 82,942(F) Average Portfolio - 12 Months 66,163 69,702 73,245 77,035 80,149

Expenses / Portfolio (A/E) - % 1.1 1.1 1.1 1.1 1.0Expenses / Portfolio (B/F) - % 4.7 4.4 4.6 4.4 4.4Expenses / Portfolio (C/F) - % 4.7 4.4 4.9 4.9 5.0

delinquency under controldelinquency under control

¹ Expenses and average portfolio of the last 12 months

² Expenses and average portfolio of the quarter

³ Effective losses and average portfolio of the last 12 months

Expenses / Portfolio - % annualized ¹

Expenses / Portfolio (A/E) - % ²

Expenses / Portfolio (C/F) - % ³

3Q03 4Q03 1Q04 2Q04 3Q04

Overdue Loans / Credit Portfolio - %

Overdue Loans + 15 days / Credit Portfolio

Overdue Loans + 60 days / Credit Portfolio

2.0 1.8 1.71.1 1.1 1.1 1.1

4.7 4.4 4.6 4.4

3Q03 4Q03 1Q04 2Q04

1.8

R$ million

1.81.0

4.4

3Q04

5.04.7

5.2 5.1

5.6

4.84.6

5.1 5.05.4

3.23.0

3.2 3.2 3.2

¹ With Extraordinary Items

20

3,549 3,637 3,915 4,128 4,375

495 558 778973

9994,044 4,195 4,6935,102 5,374

3Q03 4Q03 4Q04 2Q04 3Q04

Allowance Required Additional Allowance Total Allowance

increase of provisions for credit riskincrease of provisions for credit risk

Breakdown of AllowanceBalance - R$ million

21

15.7

3Q03 2Q04 3Q04 /3Q03 /2Q04Risk weighted Assets 109,121 119,966 121,391 11.2 1.2 Required Shareholders’ Equity 12,705 13,929 14,201 11.8 2.0

Required on weighted assets 12,003 13,196 13,353 11.2 1.2 Required on swap 173 152 223 29.0 47.3 Required on exchange exp. - - - - - Required on Interest on Equity 529 581 625 18.1 7.6

Referential Shareholders’ Equity 16,520 18,299 20,272 22.7 10.8 Tier I 11,663 12,702 13,609 16.7 7.1 Tier II 4,858 5,597 6,663 37.2 19.0

Surplus shareholders’ equity 3,815 4,371 6,070 59.1 38.9 Margin to leverage 34,680 39,733 55,185 59.1 38.9

BIS Ratio - % 14.3 14.5 15.7 Tier I 10.1 10.1 10.5 Tier II 4.2 4.4 5.2

Change %

ability to increase businesses with customers


Capital Adequacy - %

14.3 13.7 14.3 14.5

Tier I

Tier II

11.0

R$ million

4.2 4.0 4.4 4.4 5.2

3Q03 4Q03 1Q04 2Q04 3Q04

10.1 9.7 9.9 10.1 10.5

22

14.5



R$ million

Referential Shareholders’ Equity

Required Shareholders' Equity

Net Income 833 - 0.7 7,569Change of Adj. to market value - securities and derivatives 34 - 0.0 307Increase of Subordinated Debt 1,066 - 0.8 9,689Other Changes in Referential Shareholders' Equity 40 - 0.0 365Increase of Shareholders' Equity Requirement on Risk Weight Assets - 157 (0.2) (1,425)Increase of Referential Shareholders' Equity Requirement on Swap - 72 (0.1) (653)Increase of Ref. Shareholders' Equity Req. on Interest Rate Exposure - 44 0.0 (400)Quarterly Changes 1,972 273 1.3 15,452Balance - Jun/04 18,299 13,929 39,733Balance - Sep/04 20,272 14,201 15.7 55,185

Net Quarterly Changes 1,972 273 1.3 15,452

Efect in Basel Ratio

Efect in Leverage

23

Solution in insurance and pension plan

Solution in insurance and pension plan

Administrative Expenses / Earned Premiums - %

Expenses with Market / Earned Premiums - %

Retained claims / Earned Premiums - %

Combined Ratio Evolution

2Q04

12.3

83.4

17.4

53.8

1Q04

12.7

87.1

17.7

56.6

4Q03

12.2

85.8

18.0

55.7

3Q03

12.0

89.1

19.0

58.1

11.5

77.9

18.4

48.1

3Q04

3Q03 2Q04 3Q04 /3Q03 /2Q04Equity Income 57,436 61,604 64,144 11.7 4.1Service Fees - Commission 80,898 83,696 83,504 3.2 (0.2)Service Fees – Asset Management 6,747 14,580 15,221 125.6 4.4

Insurance Added Value 145,082 159,880 162,868 12.3 1.9

Quarterly Flow Change %R$ thousand

24

5.00

7.386.77

6.05 6.38

1.00 1.44 1.34 1.28 1.34

3Q03 4Q03 1Q04 2Q04 3Q04

Price / Income 12 months Price / Book Value

3Q03 4Q03 1Q04 2Q04 3Q04Market Capitalization - R$ million 11,712 17,568 17,041 16,470 18,447Free Float Capitalization - R$ million 848 1,272 1,234 1,192 1,339Book Value per Share - R$ 15.97 16.63 17.33 17.57 18.81Net Income per Share - R$ 0.91 0.87 0.84 1.10 1.14

Capitalization and Income

Market recognitionMarket recognition

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Investor Relations DivisionSBS - Quadra 1 - Bloco C - Ed. Sede III - 17° floor

70073-901 - Brasília (DF)Phone: 55 (61) 310.5920

Fax: 55 (61) 310.3735

[email protected]

DisclaimerDisclaimer - This presentation contains references and statements, planned synergies, increasing estimates, projections of results and future strategy for Banco do Brasil, it’s Associated and Affiliated Companies and Subsidiaries. Although these references and statements reflect the management’s belief, it also involves imprecision and high difficult risks to be foreseen, consequently, it may conduct to a different result than the one anticipated here. These expectations are highly depended on market conditions, on the Brazilian economic performance, on the sector and the international market. Banco do Brasil is not responsible for bringing up to date any estimate in this presentation.

For further information access www.bb.com.br/ri

3q04 earnings

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