banco do brasil - financial statements - 3rd quarter 2017 · equity and debt hybrid securities 20.d...

Consolidated Financial Statements

3rd quarter 2017

0

3rd quarter 2017

Financial

Statements


3rd quarter 2017

1

INDEX

Index .............................................................................................................................................................1

Financial Statements ...................................................................................................................................3

BALANCE SHEET.....................................................................................................................................3

STATEMENT OF INCOME .......................................................................................................................7

STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY .................................................................8

STATEMENT OF CASH FLOWS ..............................................................................................................9

STATEMENT OF ADDED VALUE ......................................................................................................... 10

Notes to the Consolidated Financial Statements .................................................................................. 11

1 - THE BANK AND ITS OPERATIONS ................................................................................................ 11

2 - COMPANY RESTRUCTURING........................................................................................................ 11

3 - PRESENTATION OF FINANCIAL STATEMENTS ........................................................................... 12

4 - DESCRIPTION OF SIGNIFICANT ACCOUNTING POLICIES ........................................................ 15

5 - INFORMATION BY SEGMENT ........................................................................................................ 21

6 - CASH AND DUE FROM BANKS ...................................................................................................... 25

7 - INTERBANK INVESTMENTS ........................................................................................................... 25

8 - SECURITIES AND DERIVATIVE FINANCIAL INSTRUMENTS ...................................................... 26

9 - INTERBANK ACCOUNTS ................................................................................................................ 33

10 - LOANS ............................................................................................................................................ 35

11 - FOREIGN EXCHANGE PORTFOLIO ............................................................................................ 41

12 - OTHER RECEIVABLES ................................................................................................................. 42

13 - OTHER ASSETS ............................................................................................................................ 43

14 - INVESTMENTS............................................................................................................................... 44

15 - PROPERTY AND EQUIPMENT ..................................................................................................... 50

16 - INTANGIBLE ASSETS ................................................................................................................... 51

17 - DEPOSITS AND SECURITIES SOLD UNDER REPURCHASE AGREEMENTS ......................... 52

18 – FUNDS FROM ISSUANCE OF SECURITIES ............................................................................... 56

19 - BORROWINGS AND ONLENDINGS ............................................................................................. 57


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20 - OTHER LIABILITIES ....................................................................................................................... 58

21 - OTHER OPERATING INCOME/EXPENSES ................................................................................. 63

22 - NON-OPERATING INCOME .......................................................................................................... 65

23 - SHAREHOLDERS' EQUITY ........................................................................................................... 65

24 - TAXES ............................................................................................................................................ 71

25 - RELATED PARTY TRANSACTIONS ............................................................................................. 73

26 - EMPLOYEE BENEFITS .................................................................................................................. 77

27 - PROVISIONS, CONTINGENT ASSETS AND LIABILITIES, LEGAL LIABILITIES – TAXES AND

SOCIAL SECURITY ............................................................................................................................... 87

28 - RISK AND CAPITAL MANAGEMENT ............................................................................................ 90

29 - STATEMENT OF COMPREHENSIVE INCOME .......................................................................... 100

30 - OTHER INFORMATION ............................................................................................................... 101

Independent Auditor’s Report ............................................................................................................... 119

Declaration of the Executive Board Members about the Financial Statements............................... 129

Declaration of the Executive Board Members about the Report of Independent Auditors ............ 130

Members of Management....................................................................................................................... 131


3rd quarter 2017

In thousands of Reais, unless otherwise stated

3

BALANCE SHEET

ASSETS Note Sep 30, 2017 Dec 31, 2016 Sep 30, 2016

CURRENT ASSETS 812,860,626 804,240,873 833,279,533

Cash and due from banks 6 14,267,230 12,805,771 12,928,959

Interbank investments 7.a 409,728,859 404,769,645 426,798,907

Securities purchased under resale agreement 384,528,833 371,537,393 392,773,794

Interbank deposits 25,200,026 33,232,252 34,025,113

Securities and derivative financial instruments 8 17,431,031 16,959,199 20,497,283

Own portfolio 13,394,070 13,937,394 16,789,817

Subject to repurchase agreements 2,475,932 1,499,048 1,174,435

Pledged in guarantee 285,457 309,539 314,133

Derivative financial instruments 1,275,572 1,213,218 2,218,898

Interbank accounts 77,454,999 68,026,103 71,796,733

Payments and receipts pending settlement 9.a 3,161,384 3,513 3,759,990

Reserve requirement 9.b 72,209,073 66,063,844 66,355,457

Deposits with Banco Central do Brasil 69,441,849 63,451,094 63,636,925

National Treasury - rural credits resources 52,597 54,959 51,624

National Housing Finance System 2,714,627 2,557,791 2,666,908

Interbank onlendings -- -- 1,951

Correspondent banks 2,084,542 1,958,746 1,679,335

Interdepartmental accounts 129,464 376,530 210,944

Internal transfers of funds 129,464 376,530 210,944

Loans 10 174,806,739 174,149,338 177,910,778

Public sector 719,107 649,803 1,209,068

Private sector 188,233,478 186,111,325 190,040,551

Loans sold under assignment 229 374 48

(Allowance for loan losses) (14,146,075) (12,612,164) (13,338,889)

Leasing transactions 10 175,274 237,447 263,149

Private sector 196,566 269,250 309,938

(Allowance for leasing transactions losses) (21,292) (31,803) (46,789)

Other receivables 118,362,059 126,462,278 122,397,357

Receivables from guarantees honored 604,775 494,543 500,904

Foreign exchange portfolio 11.a 16,567,668 17,188,751 18,683,617

Accrued income 2,890,341 2,644,778 2,822,309

Securities trading 461,870 218,932 336,238

Specific credits 12.a 536 541 --

Sundry 12.b 99,816,340 107,887,734 101,777,596

(Allowance for other losses) (1,979,471) (1,973,001) (1,723,307)

Other assets 13 504,971 454,562 475,423

Assets not for own use and materials in stock 366,357 339,302 329,374

(Allowance for impairment) (159,858) (137,564) (127,318)

Prepaid expenses 298,472 252,824 273,367

See the accompanying notes to the financial statements.


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ASSETS Note Sep 30, 2017 Dec 31, 2016 Sep 30, 2016

NON-CURRENT ASSETS 587,030,129 597,136,101 614,932,362

LONG-TERM RECEIVABLES 556,136,703 564,008,357 583,276,586

Interbank investments 7.a 1,615,397 942,027 1,004,308

Securities purchased under resale agreement 495,410 145,292 150,870

Interbank deposits 1,119,987 796,735 853,438

Securities and derivative financial instruments 8 120,059,738 104,309,483 105,173,675

Own portfolio 88,134,141 65,273,440 79,721,478

Subject to repurchase agreements 29,649,699 35,791,728 21,972,564

Pledged in guarantee 2,100,590 2,844,970 2,713,261

Derivative financial instruments 175,308 399,345 766,372

Interbank accounts 646,242 497,227 462,808

Reserve requirement 9.b 225 1,909 9

National Treasury - rural credits resources 225 1,909 9

Interbank onlendings 646,014 495,306 462,799

Correspondent banks 3 12 --

Loans 10 366,651,020 390,774,002 404,539,479

Public sector 72,105,086 73,401,682 73,482,277

Private sector 316,477,014 338,986,894 353,650,089

Loans sold under assignment 521,295 611,713 639,693


Leasing transactions 10 248,780 325,376 334,667

Private sector 253,935 334,946 360,340

(Allowance for leasing transactions losses) (5,155) (9,570) (25,673)

Other receivables 66,897,913 67,143,433 71,744,945

Foreign exchange portfolio 11.a -- 282,794 296,426

Accrued income 47,683 31,350 60,106


Specific credits 12.a 408,177 377,698 366,862

Sundry 12.b 66,757,629 66,337,503 71,024,944

(Allowance for other losses) (799,117) (773,780) (616,858)

Other assets 13 17,613 16,809 16,704


PERMANENT ASSETS 30,893,426 33,127,744 31,655,776

Investments 16,853,215 16,855,006 16,481,958

Associates and joint ventures 14.a 16,704,248 16,703,729 16,303,620

Domestic 16,651,975 16,631,072 16,189,792

Abroad 52,273 72,657 113,828

Other investments 14.c 168,099 170,398 232,591

(Provision for losses) (19,132) (19,121) (54,253)

Property and equipment 15 7,213,478 7,557,478 7,198,918

Land and buildings 7,531,520 7,722,456 6,774,064

Other property and equipment 10,076,499 9,953,340 9,402,872

(Accumulated depreciation) (10,394,541) (10,118,318) (8,978,018)

Intangible 16 6,826,733 8,715,260 7,963,884

Intangible assets 20,037,113 19,602,197 17,589,115

(Accumulated amortization) (13,210,380) (10,886,937) (9,625,231)

Deferred -- -- 11,016

Organization and expansion costs 2,098 2,098 1,579,972

(Accumulated amortization) (2,098) (2,098) (1,568,956)

TOTAL ASSETS 1,399,890,755 1,401,376,974 1,448,211,895



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LIABILITIES/SHAREHOLDERS’ EQUITY Note Sep 30, 2017 Dec 31, 2016 Sep 30, 2016

CURRENT LIABILITIES 1,063,390,677 1,004,424,338 1,024,746,296

Deposits 17.a 389,195,573 394,668,312 382,117,728

Demand deposits 61,793,371 69,349,186 61,622,917

Savings deposits 154,516,749 151,763,344 148,681,412


Time deposits 155,987,466 155,675,658 151,597,326

Other deposits 123,691 53,111 31,908

Securities sold under repurchase agreements 17.c 404,980,454 358,409,319 379,184,277

Own portfolio 28,561,564 42,983,151 22,353,562

Third-party portfolio 376,418,890 315,426,168 356,830,715

Funds from issuance of securities 18 87,988,766 68,052,214 71,941,873

Bonds backed by real estate, mortgage and other credits 79,279,585 62,623,394 67,334,503

Foreign securities 8,608,077 5,428,820 4,607,370

Certificates of structured operations 101,104 -- --

Interbank accounts 2,524,476 1,075 3,254,585

Receipts and payments pending settlement 9.a 2,524,476 1,075 3,238,815

Correspondent banks -- -- 15,770

Interdepartmental accounts 2,388,368 2,450,012 2,468,333

Third-party funds in transit 2,387,169 2,446,807 2,466,197

Internal transfers of funds 1,199 3,205 2,136

Borrowings 19.a 15,752,760 17,997,094 19,641,127

Foreign borrowing 15,752,760 17,997,094 19,641,127

Domestic onlending - official institutions 19.b 44,686,732 39,463,427 39,695,325

National Treasury -- -- 132

BNDES 6,911,213 8,227,439 9,128,563

Caixa Econômica Federal 25,858,655 23,758,043 22,917,625

Finame 4,644,776 5,155,259 5,257,193

Other institutions 7,272,088 2,322,686 2,391,812

Foreign onlending 19.b 95 95 95

Derivative financial instruments 8.d 1,483,927 1,089,344 1,744,897

Other liabilities 114,389,526 122,293,446 124,698,056

Billing and collection of taxes and contributions 4,902,252 427,463 4,088,460


Shareholders and statutory distributions 1,079,717 1,125,248 1,281,487

Taxes and social security 20.a 12,214,853 15,293,551 16,797,035


Financial and development funds 20.b 8,907,025 9,055,620 8,750,670

Subordinated debts 20.c 10,228,204 4,158,742 2,647,425

Equity and debt hybrid securities 20.d 727,108 279,308 193,367

Other liabilities 20.e 67,857,536 73,694,320 72,847,681



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LIABILITIES/SHAREHOLDERS’ EQUITY Note Sep 30, 2017 Dec 31, 2016 Sep 30, 2016

NON-CURRENT LIABILITIES 242,935,881 309,758,884 337,741,460

LONG-TERM LIABILITIES 242,520,220 309,312,622 337,305,221

Deposits 17.a 47,927,416 51,312,376 55,584,795


Time deposits 45,052,799 48,474,588 51,850,356

Securities sold under repurchase agreements 17.c 12,889,830 16,224,713 31,285,762

Own portfolio 12,889,812 16,224,699 31,285,762

Third-party portfolio 18 14 --

Funds from issuance of securities 18 49,143,458 97,114,139 101,624,966

Bonds backed by real estate, mortgage and other credits 37,444,068 82,047,387 85,831,208

Foreign securities 11,671,852 14,964,440 15,666,524

Certificates of structured operations 27,538 102,312 127,234

Borrowings 19.a 2,615,598 2,412,254 3,170,978

Foreign borrowing 2,615,598 2,412,254 3,170,978

Domestic onlending - official institutions 19.b 37,986,931 43,619,266 45,382,677

National Treasury 158,557 149,248 167,864

BNDES 21,092,151 23,859,417 24,452,529

Finame 16,486,379 19,610,601 20,762,284

Other institutions 249,844 -- --

Foreign onlending 19.b 382 382 382

Derivative financial instruments 8.d 235,699 781,047 555,098

Other liabilities 91,720,906 97,848,445 99,700,563


Shareholders and statutory distributions 454 986 --

Taxes and social security 20.a 496,494 732,496 766,295


Financial and development funds 20.b 5,934,842 5,734,905 5,869,076

Special operations 2,216 2,203 2,192

Subordinated debts 20.c 45,211,963 50,942,804 50,745,908

Equity and debt hybrid securities 20.d 5,080,977 5,246,031 5,762,377

Debt instruments eligible as capital 20.c and 20.d 24,848,035 24,714,492 24,402,877

Other liabilities 20.e 5,431,810 5,127,838 5,984,412

DEFERRED INCOME 415,661 446,262 436,239

SHAREHOLDERS' EQUITY 23 93,564,197 87,193,752 85,724,139

Capital 67,000,000 67,000,000 67,000,000

Local residents 52,261,049 53,209,529 53,342,172

Domiciled abroad 14,738,951 13,790,471 13,657,828

Instruments qualifying as common equity tier 1 capital 23.c 8,100,000 8,100,000 8,100,000

Capital reserves 12,436 15,509 15,509

Revaluation reserves 2,389 2,660 2,678

Profit reserves 31,124,786 27,646,569 25,409,076

Accumulated other comprehensive income (16,481,629) (16,929,205) (17,873,976)

Retained earnings/accumulated losses 1,977,009 -- 1,566,220

(Treasury shares) (1,850,043) (1,854,749) (1,854,749)

Non-controlling interests 3,679,249 3,212,968 3,359,381

TOTAL LIABILITIES 1,399,890,755 1,401,376,974 1,448,211,895



3rd quarter 2017


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STATEMENT OF INCOME

Note 3rd quarter/2017 3rd quarter/2016 Jan 1 to Sep 30, 2017 Jan 1 to Sep 30, 2016

INCOME FROM FINANCIAL INTERMEDIATION 32,145,400 46,705,020 107,965,381 119,092,842

Loans 10.b 18,953,291 26,989,034 61,624,738 71,435,453

Leasing transactions 10.i 61,990 83,601 199,701 261,526

Securities 8.b 12,312,201 17,245,102 41,851,581 41,063,317

Derivative financial instruments 8.e (659,509) (134,397) (854,783) (1,747,644)

Foreign exchange results 11.b 138,544 416,132 588,569 1,963,034

Reserve requirement 9.c 958,804 1,534,718 3,283,310 4,372,367

Operations of sale and transfer of financial assets 380,079 570,830 1,272,265 1,744,789

EXPENSES FROM FINANCIAL INTERMEDIATION (24,043,745) (38,375,052) (84,705,294) (94,514,482)

Deposits and securities sold under repurchase agreements

17.d (18,604,042) (29,386,182) (61,516,862) (82,541,397)

Borrowings and onlendings 19.c 955,921 (2,371,314) (3,303,689) 8,962,907

Leasing transactions 10.i (36,698) (46,681) (114,703) (149,636)

Operations of sale and transfer of financial assets (44,706) (30,419) (74,257) (58,463)

Allowance for loan losses 10.f and

10.g (6,314,220) (6,540,456) (19,695,783) (20,727,893)

INCOME FROM FINANCIAL INTERMEDIATION 8,101,655 8,329,968 23,260,087 24,578,360

OTHER OPERATING INCOME/EXPENSES (3,784,440) (4,526,871) (10,570,593) (12,101,083)

Service fee income and bank fee income 21.a 6,562,093 5,972,149 19,206,871 17,475,885

Service fee income 4,116,058 3,808,780 12,187,042 11,297,732

Bank fee income 2,446,035 2,163,369 7,019,829 6,178,153

Personnel expenses 21.b (5,137,760) (5,560,152) (15,422,344) (16,072,382)

Other administrative expenses 21.c (4,002,427) (3,898,886) (11,695,050) (11,499,670)

Tax expenses 24.c (1,402,514) (1,390,036) (4,125,561) (4,212,559)

Equity in earnings (losses) in associates and joint ventures

14 1,004,652 1,064,456 3,019,446 3,179,664

Other operating income 21.d 1,884,534 2,375,941 6,004,435 7,043,546

Other operating expenses 21.e (2,693,018) (3,090,343) (7,558,390) (8,015,567)

OPERATING INCOME 4,317,215 3,803,097 12,689,494 12,477,277

NON-OPERATING INCOME 22 389,876 55,070 494,466 163,350

Incomes 527,808 70,812 678,691 223,622

Expenses (137,932) (15,742) (184,225) (60,272)

PROFIT BEFORE TAXATION AND PROFIT SHARING

4,707,091 3,858,167 13,183,960 12,640,627

INCOME TAX AND SOCIAL CONTRIBUTION 24.a (1,036,591) (912,022) (3,011,775) (3,416,528)

Income tax and social contribution current (838,035) (1,950,831) (2,829,487) (7,269,290)

Income tax and social contribution deferred (198,556) 1,038,809 (182,288) 3,852,762

EMPLOYEE AND DIRECTORS PROFIT SHARING (368,108) (292,716) (1,018,469) (919,485)

NON-CONTROLLING INTERESTS (461,508) (407,252) (1,251,129) (1,234,338)

NET INCOME 2,840,884 2,246,177 7,902,587 7,070,276

EARNINGS PER SHARE 23.f

Weighted average number of shares - basic and diluted

2,784,953,544 2,784,757,945 2,784,888,989 2,788,498,467

Basic and diluted earnings per share (R$) 1.01 0.80 2.81 2.50



3rd quarter 2017


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STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

Note Capital Instruments qualifying as common equity tier

1 Capital

Capital reserves

Revaluation reserves

Profit reserves Accumulated other

comprehensive income Treasury shares

Retained earnings/ accumulated

losses

Non-controlling

interest Total

Legal reserve

Statutory reserves

Banco do Brasil

Associates and

subsidiaries

Balances at Dec 31, 2015 60,000,000 8,100,000 14,326 2,730 6,173,642 22,857,448 (16,678,569) (364,102) (1,697,380) -- 3,128,078 81,536,173

Capital increase - capitalization of reserves 7,000,000 -- -- -- -- (7,000,000) -- -- -- -- -- --

Accumulated other comprehensive income of securities and derivative financial instruments, net of taxes

-- -- -- -- -- -- 1,723,036 359,654 -- -- -- 2,082,690

Accumulated other comprehensive income - benefit plans, net of taxes

-- -- -- -- -- -- (2,913,995) -- -- -- -- (2,913,995)

Share-based payment transactions -- -- 1,183 -- -- -- -- -- 6,157 -- -- 7,340

Operation due to performance secured by the FGCN - Fundo Garantidor da Construção Naval

-- -- -- -- -- -- -- -- (163,526) -- -- (163,526)

Expired dividend/interest on own capital -- -- -- -- -- -- -- -- -- 10,173 -- 10,173

Realization of revaluation reserve in associates and subsidiaries

23.d -- -- -- (52) -- -- -- -- -- 52 -- --

Change in noncontrolling interest -- -- -- -- -- -- -- -- -- -- 231,303 231,303

Net income 23.h -- -- -- -- -- -- -- -- -- 7,070,276 -- 7,070,276

Interest on instruments elegible to common equity -- -- -- -- -- -- -- -- -- (66,420) -- (66,420)

Unrealized gains -- -- -- -- -- 32,700 -- -- -- (32,700) -- --

Allocation - Reserves 23.g -- -- -- -- 237,595 3,107,691 -- -- -- (3,345,286) -- --

- Interest on own capital 23.g -- -- -- -- -- -- -- -- -- (2,069,875) -- (2,069,875)

Balances at Sep 30, 2016 67,000,000 8,100,000 15,509 2,678 6,411,237 18,997,839 (17,869,528) (4,448) (1,854,749) 1,566,220 3,359,381 85,724,139

Changes in the period 7,000,000 -- 1,183 (52) 237,595 (3,859,609) (1,190,959) 359,654 (157,369) 1,566,220 231,303 4,187,966

Balances at Dec 31, 2016 67,000,000 8,100,000 15,509 2,660 6,570,147 21,076,422 (16,944,830) 15,625 (1,854,749) -- 3,212,968 87,193,752

Accumulated other comprehensive income of securities and derivative financial instruments, net of taxes

-- -- -- -- -- -- 1,035,864 43,942 -- -- -- 1,079,806

Accumulated other comprehensive income - benefit plans, net of taxes

-- -- -- -- -- -- (487,658) -- -- -- -- (487,658)

Foreign exchange variation and hedge of investments abroad 23.i -- -- -- -- -- -- -- (144,572) -- -- -- (144,572)

Share-based payment transactions -- -- (3,073) -- -- -- -- -- 4,706 -- -- 1,633

Expired dividend/interest on own capital -- -- -- -- -- -- -- -- -- 4,100 -- 4,100

Realization of revaluation reserve in associates and subsidiaries

23.d -- -- -- (271) -- -- -- -- -- 271 -- --

Change in noncontrolling interest -- -- -- -- -- -- -- -- -- -- 466,281 466,281

Initial adoption of the CMN Resolution No. 4,512/2016 in Banco Votorantim S.A.

14.a -- -- -- -- -- -- -- -- -- (58,275) -- (58,275)

Net income 23.h -- -- -- -- -- -- -- -- -- 7,902,587 -- 7,902,587

Interest on instruments elegible to common equity -- -- -- -- -- -- -- -- -- (70,200) -- (70,200)

Unrealized gains -- -- -- -- -- 3,514 -- -- -- (3,514) -- --

Allocation - Reserves 23.g -- -- -- -- 248,190 3,226,513 -- -- -- (3,474,703) -- --

- Interest on own capital 23.g -- -- -- -- -- -- -- -- -- (2,323,257) -- (2,323,257)

Balances at Sep 30, 2017 67,000,000 8,100,000 12,436 2,389 6,818,337 24,306,449 (16,396,624) (85,005) (1,850,043) 1,977,009 3,679,249 93,564,197

Changes in the period -- -- (3,073) (271) 248,190 3,230,027 548,206 (100,630) 4,706 1,977,009 466,281 6,370,445


BBPLI13


3rd quarter 2017


9

STATEMENT OF CASH FLOWS

Note Jan 1 to Sep 30, 2017 Jan 1 to Sep 30, 2016

Cash flows from operating activities

Income before taxation and profit sharing 13,183,960 12,640,627

Adjustments to income before taxation and profit sharing 20,774,512 32,889,314

Provision for credits, leasing and other credits 10.f and 10.g 19,695,783 20,727,893

Depreciation and amortization 21.c 3,224,856 3,191,771

Exchange fluctuation in changes of intangible assets 16 4,230 34,551

Equity in earning in associates and joint ventures 14.a (3,019,446) (3,179,664)

Gain on the disposal of assets 22 (6,771) (15,958)

Gain on the disposal of investments 22 (311) --

Capital gain 22 (485,076) (113,982)

Impairment of other assets 22 23,129 8,367

Amortization of goodwill 14.d 158,033 154,603

Expenses with civil, labor and tax provisions 27 1,993,764 2,162,047

Adjustment of actuarial assets/liabilities and surplus allocation funds 26 76,034 (177,174)

Commissions income deferred (518,655) (523,980)

Effect of changes in foreign exchange rates in cash and cash equivalents 1,161,198 9,023,303

Non-controlling interests (1,251,129) (1,234,338)

Other adjustments (281,127) 2,831,875

Income adjusted before taxation and profit sharing 33,958,472 45,529,941

Changes in assets and liabilities (77,007,232) (42,161,369)

Increase in short-term interbank investments (63,504,384) (90,312,238)

(Increase) decrease in trading securities and derivative financial instruments

(750,630) 527,015

Increase in interbank and interdepartmental accounts (878,333) (3,384,876)

Increase in compulsory deposits with Banco Central do Brasil (5,990,755) (2,826,007)

Decrease in loan operations 4,039,500 25,075,674

Decrease in leasing transactions 126,507 172,466

(Increase) decrease in other receivables net of deferred taxes 7,435,491 (4,351,084)

(Increase) decrease in other assets (67,571) 12,091

Income tax and social contribution paid (2,776,094) (5,694,157)

Decrease in deposits (8,857,699) (26,717,195)

Increase in securities sold under repurchase agreements 43,236,252 76,948,391

Decrease in funds from issuance of securities (28,034,129) (14,994,653)

Decrease in borrowings and onlendings (2,450,020) (11,840,482)

(Decrease) increase in other liabilities (18,504,766) 15,246,655

Decrease in deferred income (30,601) (22,969)

CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (43,048,760) 3,368,572

Cash flows from investing activities

Acquisition of securities available for sale (58,177,357) (25,059,570)

Proceeds from sale of securities available for sale 43,349,363 16,353,510

Acquisition of securities held to maturity (958,496) --

Proceeds from sale of securities held to maturity 1,249,080 898,980

Dividends received from associates and joint ventures 2,810,777 2,141,929

Acquisition of property, plant and equipment in use (524.143) (759,235)

Disposal of property, plant and equipment in use 5.099 36,182

Disposal of investments 1,068,961 55,480

Acquisition of intangible assets (478,675) (1,512,690)

Disposal of intangible assets/deferred assets 1,161 486,082

CASH USED IN INVESTING ACTIVITIES (11,654,230) (7,359,332)

Cash flows from financing activities

Change in non-controlling interests 466,281 231,303

Increase in subordinated debts 967,651 90,986

Decrease in equity and debt hybrid securities (212,741) (5,516,598)

(Acquisition) disposal of treasury shares 4,706 (157,369)

Interest on own capital paid (1,772,050) (2,010,532)

CASH USED IN FINANCING ACTIVITIES (546,153) (7,362,210)

Net variation of cash and cash equivalents (55,249,143) (11,352,970)

At the beginning of the period 103,123,670 102,707,171

Effect of changes in foreign exchange rates in cash and cash equivalents (1,161,198) (9,023,303)

At the end of the period 46,713,329 82,330,898

Decrease in cash and cash equivalents (55,249,143) (11,352,970)



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STATEMENT OF ADDED VALUE

Note Jan 1 to Sep 30, 2017 Jan 1 to Sep 30, 2016

Income 105,903,717 114,570,946

Income from financial intermediation 107,965,381 119,092,842

Income from service and bank fees 19,206,871 17,142,925

Allowance for loan losses (19,695,783) (20,727,893)

Capital gains 22 618,006 157,398

Other income/(expenses) (2,190,758) (1,094,326)

Expenses from financial intermediation (65,009,511) (73,786,589)

Inputs purchased from third parties (6,605,080) (6,635,856)

Materials, water, electric power and gas 21.c (451,425) (501,983)

Expenses with outsourced services 21.c (1,100,812) (1,101,213)

Communications 21.c (839,178) (847,011)

Data processing 21.c (608,857) (507,791)

Transportation 21.c (806,814) (856,467)

Security services 21.c (913,051) (879,994)

Financial system services 21.c (551,804) (591,768)

Advertising and marketing 21.c (232,186) (207,896)

Other (1,100,953) (1,141,733)

Gross added value 34,289,126 34,148,501

Depreciation and amortization 21.c (3,382,889) (3,346,374)

Value added produced by entity 30,906,237 30,802,127

Value added received through transfer 3,019,446 3,179,664

Equity in associates and joint ventures 3,019,446 3,179,664

Added value to distribute 33,925,683 100.00% 33,981,791 100.00%

Value added distributed 33,925,683 100.00% 33,981,791 100.00%

Personnel 14,603,878 43.05% 15,165,237 44.63%

Salaries and fees 9,485,786 10,132,729

Employee and directors profit sharing 1,018,468 919,485

Benefits and staff training 2,356,888 2,121,466

FGTS (Government severance indemnity fund for employees) 555,956 556,217

Other charges 1,186,780 1,435,340

Taxes, rates and contributions 8,974,272 26.45% 9,455,718 27.83%

Federal 7,815,842 8,408,913

State 1,261 780

Municipal 1,157,169 1,046,025

Interest on third parties' capital 1,193,817 3.52% 1,056,222 3.11%

Rent 21.c 1,193,817 1,056,222

Interest on own capital 23.g 9,153,716 26.98% 8,304,614 24.43%

Federal government's interest on own capital 1,253,331 1,125,813

Other shareholders’ interest on own capital 1,069,926 944,063

Interest on the instrument eligible to the federal government's common equity tier 1 capital

70,200 66,420

Retained earnings 5,509,130 4,933,980

Non-controlling interest in retained earnings 1,251,129 1,234,338



3rd quarter 2017


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1 - THE BANK AND ITS OPERATIONS

Banco do Brasil S.A. (Banco do Brasil or the Bank) is a publicly-traded company established under private law, with both

public and private shareholders, subject to the rules of Brazilian Corporate Law. Its headquarters are located at Setor de

Autarquias Norte, Quadra 5, Lote B, Edifício Banco do Brasil, Brasília, Distrito Federal, Brazil. The Bank's business

activities include the following:

all active, passive and ancillary banking operations;

banking and financial services, including foreign exchange transactions and other services such as insurance, pension plans, capitalization bonds, securities brokerage, credit/debit card management, consortium management, investment funds and managed portfolios; and

all other types of transactions available to banks within Brazil´s National Financial System.

As an agent for execution of the Brazilian Federal Government's credit and financial policies, Brazilian Law requires the

Bank to perform functions specifically those under article 19 of Law 4,595/1964.

2 - COMPANY RESTRUCTURING

Corporate reorganization in the area of insurance

Incorporation of BB Cor Participações S.A. by BB Corretora de Seguros e Administradora de Bens S.A.

On December 27, 2016, the BB Cor Participações S.A. (BB Cor) was merged into BB Corretora de seguros e Administradora de Bens S.A. (BB Corretora) in accordance with the terms of Protocol and Justification of Incorporation.

The incorporated net assets were evaluated at book value of R$ 26,976 thousand on the base date of the transaction, December 27, 2016.

The incorporation is justified by the unnecessary maintenance of BB Cor verified in the process of reviewing the business model in the segment of distribution of security products, as well as due to the lack of prospects that the company would develop operational activities.

Thereby a natural consequence, BB Corretora became the successor of BB Cor in a universal representation regarding of all its assets, rights and obligations, entirely taking over its assets.

Considering that BB Seguridade, subsidiary of the Bank, is the single shareholder of the merged entity on the date of the incorporation, there was no exchange between the shares of non-controlling shareholders of the merged company for shares of the absorbing company, therefore, there was no change in the share capital of BB Seguridade.


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3 - PRESENTATION OF FINANCIAL STATEMENTS

The consolidated financial statements have been prepared in accordance with the accounting guidelines derived from

Brazilian corporation law, the rules and instructions issued by the National Monetary Council (Conselho Monetário

Nacional - CMN), the Central Bank of Brazil (Banco Central do Brasil - Bacen) and the Securities and Exchange

Commission of Brazil (Comissão de Valores Mobiliários - CVM), as applicable. In the consolidated financial statements,

there was a reclassification of the Instrument qualifying as CET1 - hybrid capital and debt instrument to Shareholder's

equity. This adjustment is also performed in the prudential financial statements and to IFRS to improve the quality and

transparency of these consolidated financial statements.

The preparation of financial statements in accordance with accounting practices adopted in Brazil, applicable to financial

institutions, requires that Management uses judgment 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

fixed assets, the allowance for loan losses, deferred tax assets, provision for labor, civil and tax demands, valuation of

financial instruments, assets and liabilities relating to post-employment benefits and other provisions. The final amounts

of transactions involving these estimates are only known upon their settlement.

The consolidated financial statements include the operations of the Bank performed by their domestic agencies and

abroad and also include the operations of the Bank’s controlled entities, as well as of the special purpose entities (Dollar

Diversified Payment Rights Finance Company and Loans Finance Company Limited) and of the investment financial

funds (Fênix Fundo de Investimento em Direitos Creditórios do Varejo, Fundo de Investimento em Direitos Creditórios da

Companhia Pernambucana de Saneamento – Compesa, BB Fund Class A and BB Fund Class D) of which the

companies of Banco do Brasil’s Conglomerate are the main beneficiaries or detain the main obligations. The

consolidated financial statements reflect the assets, liabilities, income and expenses of Banco do Brasil and its controlled

entities, in accordance with CPC 36 (R3) – Consolidated financial statements.

In the preparation of the consolidated financial statements, amounts resulting from transactions between consolidated

companies, including the equity interest held by one in another, balances of balance sheet accounts, revenues,

expenses and unrealized profits, net of tax effects, were eliminated. Non-controlling interest in net equity and in income

of the controlled entities were separately disclosed in the financial statements. Leasing transactions were considered

based on the financial method, and the amounts were reclassified from the Leased assets line to the Leasing

transactions line, after deduction of residual amounts received in advance. The profit and loss with foreign exchange

from branches operations are presented in the groupings of income in which the charges and income on these

transactions are recognized. The foreign exchange profit and loss on overseas investments are presented in the

grouping of Borrowings and onlendings, in order to eliminate the effect of protection for the exchange rate fluctuations of

these investments.

The Brazilian Accounting Pronouncements Committee (Comitê de Pronunciamentos Contábeis - CPC) is responsible for

issuing accounting pronouncements and interpretations, based on international accounting standards, approved by the

CVM. Bacen adopted the following pronouncements of the CPC, applied by the Bank, as applicable: CPC 00 (R1) -

Conceptual framework, CPC 01 - Decrease in recoverable amount of assets, CPC 03 - Statement of cash flows (DFC),

CPC 05 - Related party disclosures, CPC 10 (R1) - Share-based payment, CPC 23 - Accounting policies, changes in

accounting estimates and errors, CPC 24 - Events after the reporting period, CPC 25 - Provisions, contingent liabilities

and contingent assets and CPC 33 (R1) - Employee benefits.

Additionally, Bacen issued CMN Resolution No. 3,533/2008, which became effective in January 2012 and established

procedures for classification, accounting and disclosure of sale and transfer transactions related to financial assets. This

Resolution establishes the criteria for the derecognition of financial assets as specified in the CPC 38 – Financial

instruments: recognition and measurement.

The Bank has also applied the following pronouncements which do not conflict with the Bacen rules, as established by

article 22, paragraph 2 of Law 6,385/1976: CPC 09 - Value added statement, CPC 12 - Adjustment at present value,

CPC 22 - Information by segment, CPC 36 (R3) - Consolidated financial statements and CPC 41 - Earnings per share.

The application of other standards, which depend on Bacen’s regulations, results primarily in immaterial adjustments or

in changes in disclosure, except the following pronouncements, that may result in significant impacts on the financial

statements:


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CPC 04 (R1) - Intangible assets and CPC 15 (R1) - Business combinations - a) reclassification of intangible assets

identified in the acquisition of the equity interest in Banco Votorantim, in 2009, as well as in acquisition of controlling

interest of Banco Patagonia, in 2011, and of BB Americas, in 2012, from the investment account to the account of

Intangible assets, in the group of Non-current assets - permanent; b) derecognition of goodwill amortization expenses

from acquisitions; and c) recognition of amortization expenses of intangible assets with definite useful lives, identified in

the acquisitions.

CPC 18 (R2) - Investments in associates and joint ventures - a) recording at fair value of the equity interests received in

the partnership of the formation of the joint ventures BB Mapfre SH1 and SH2, on June 30, 2011; b) write-off of the book

value of the assets contributed by the Bank including any goodwill; and, c) recognition of the result of the transaction in

the new constituted companies by the proportion of the equity interest.

CPC 38 - Financial instruments: recognition and measurement - adjustment in the allowance for loan losses, due to the

adoption of the incurred loss criteria instead of the expected loss criteria.

These financial statements were approved by the Executive Board of Directors on November 07, 2017.

a) Equity interest included in the consolidated financial statements, segregated by business segments:

Activity Functional currency

Sep 30, 2017

Dec 31, 2016

Sep 30, 2016

% of Total Share

Banking segment

Banco do Brasil AG Banking Real 100.00% 100.00% 100.00%

BB Leasing Company Ltd. (1) Leasing Real -- -- 100.00%

BB Leasing S.A. - Arrendamento Mercantil Leasing Real 100.00% 100.00% 100.00%

BB Securities Asia Pte. Ltd. Broker Real 100.00% 100.00% 100.00%

Banco do Brasil Securities LLC. Broker Real 100.00% 100.00% 100.00%

BB Securities Ltd. Broker Real 100.00% 100.00% 100.00%

BB USA Holding Company, Inc. Holding Real 100.00% 100.00% 100.00%

Brasilian American Merchant Bank Banking Real 100.00% 100.00% 100.00%

Banco do Brasil Americas Banking American Dollar 100.00% 100.00% 100.00%

Banco Patagonia S.A. Banking Argentinian

Peso 58.97% 58.97% 58.97%

Investment segment

BB Banco de Investimento S.A. Investment bank Real 100.00% 100.00% 100.00%

Segment of fund management

BB Gestão de Recursos - Distribuidora de Títulos e Valores Mobiliários S.A.

Asset management Real 100.00% 100.00% 100.00%

Besc Distribuidora de Títulos e Valores Mobiliários S.A. Asset management Real 99.62% 99.62% 99.62%

Segment of insurance private pension fund and capitalization

BB Seguridade Participações S.A. (2) Holding Real 66.36% 66.36% 66.36%

BB Cor Participações S.A. (2) (3) Holding Real -- -- 66.36%

BB Corretora de Seguros e Administradora de Bens S.A. (2) Broker Real 66.36% 66.36% 66.36%

BB Seguros Participações S.A. (2) Holding Real 66.36% 66.36% 66.36%

Segment of payment methods

BB Administradora de Cartões de Crédito S.A. Service rendering Real 100.00% 100.00% 100.00%

BB Elo Cartões Participações S.A. Holding Real 100.00% 100.00% 100.00%

Other segments

Ativos S.A. Securitizadora de Créditos Financeiros Credits acquisition Real 100.00% 100.00% 100.00%

Ativos S.A. Gestão de Cobrança e Recuperação de Crédito Credits acquisition Real 100.00% 100.00% 100.00%

BB Administradora de Consórcios S.A. Consortium Real 100.00% 100.00% 100.00%

BB Tur Viagens e Turismo Ltda. (4) Tourism Real 100.00% 100.00% 100.00%

BB Asset Management Ireland Limited Credits acquisition Real 100.00% 100.00% 100.00%

BB Tecnologia e Serviços (2) IT Real 99.99% 99.99% 99.99%

(1) The last General Assembly of the company was on January 28, 2016, when the balances of all balance sheet accounts were zero. The company was formally discontinued on April 29, 2016.

(2) Refers to the percentage of the equity interest, considering the acquisition of shares by the invested entity held in treasury.

(3) On December 27, 2016, the company was merged into BB Corretora de Seguros e Administradora de Bens S.A. (Note 2).

(4) The financial statements refers to August/2017.


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b) Information for comparability purposes

For comparability purposes in order to better show the nature of operations the following reclassifications were made:

Restated statement of income

Reimbursement of borrowings and onlendings expenses, of the grouping Other operating income to Borrowings and

onlendings.

Reimbursement of Interbank operating costs of the grouping Service fee income to Recovery of charges and expenses

of the grouping Other operating income.

Income from services payments from the grouping Other Operating Income to Service fee income.

3rd quarter/2016 Original report Adjustments Restated balances

EXPENSES FROM FINANCIAL INTERMEDIATION (38,688,920) 313,868 (38,375,052)

Borrowings and onlendings (2,685,182) 313,868 (2,371,314)

INCOME FROM FINANCIAL INTERMEDIATION 8,016,100 313,868 8,329,968

OTHER OPERATING INCOME/EXPENSES (4,213,003) (313,868) (4,526,871)

Service fee income 3,858,813 (50,033 3,808,780

Other operating income 2,639,776 (263,835) 2,375,941

Jan 1 to Sep 30, 2016 Original report Adjustments Restated balances

EXPENSES FROM FINANCIAL INTERMEDIATION (95,564,880) 1,050,398 (94,514,482)

Borrowings and onlendings 7,912,509 1,050,398 8,962,907

INCOME FROM FINANCIAL INTERMEDIATION 23,527,962 1,050,398 24,578,360

OTHER OPERATING INCOME/EXPENSES (11,050,685) (1,050,398) (12,101,083)

Service fee income 11,464,790 (167,058) 11,297,732

Other operating income 7,926,886 (883,340) 7,043,546


3rd quarter 2017


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4 - DESCRIPTION OF SIGNIFICANT ACCOUNTING POLICIES

The accounting policies adopted by Banco do Brasil are applied consistently in all periods presented in these financial

statements and applied to all the entities of the Conglomerate.

a) Statement of income

In accrual basis accounting, revenues and expenses are reported in the closing process of the period in which they are

incurred, regardless of receipt or payment. The operations with floating rates are adjusted pro rata die, based on the

variation of the indexes agreed, and operations with fixed rates are recorded at future redemption value, adjusted for the

unearned income or prepaid expenses for future periods. The operations indexed to foreign currencies are converted at

the reporting date using current rates.

b) Present value measurement

Financial assets and liabilities are presented at present value due to the application of the accrual basis in the

recognition of their interest income and expenses.

Non-contractual liabilities are primarily represented by provisions for lawsuit and legal obligations, for which the

disbursement date is uncertain and is not under the Bank's control. They are measured at present value because they

are initially recognized at estimated disbursement value on the valuation date and are updated monthly.

c) Cash and cash equivalents

Cash and cash equivalents comprise available funds in local currency, foreign currency, investments in gold, securities

purchased under resale agreements – guaranteed by securities not repledged/re-sold, interbank deposits and

investments in foreign currencies, with high liquidity and insignificant risk of change in fair value, with maturity at time of

acquisition not exceeding 90 days.

d) Interbank investments

Interbank investments are recorded at their investment or acquisition amount, plus income accrued up to the balance

sheet date and adjustments for allowance for losses.

e) 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 management’s intention, in one of three categories, according to Bacen Circular

3,068/2001:

Trading Securities: these are securities purchased to be actively and frequently traded. They are adjusted monthly to

market value. The increases and decreases in value are recorded in income and expense accounts for the period;

Securities available for sale: these are securities that may be traded at any time, but are not acquired to be actively and

frequently traded. They are adjusted monthly to market value and their increases and decreases in value are recorded,

net of tax effects, in Accumulated other comprehensive income in Shareholders' equity; and

Securities held to maturity: these are securities that the Bank owns and has the financial capacity and intent to hold to

maturity. These securities are not adjusted to market value. The Bank's financial capacity to hold to maturity is supported

by a cash flow projection that does not consider the possibility of sale of these securities.

The mark-to-market methodology used for securities was established following consistent, verifiable criteria, which

consider the average price of trading on the day of calculation or, if not available, the indicative price reported by Anbima,

or relationship between the unit price and the latest business value in the last 30 day, or the net expected realizable

value obtained through pricing models, using credit risk curves, future values of interest rates, foreign exchange rates,

price and currency indices, and similar financial instruments.


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Income accrued on the securities, irrespective of the category in which they are classified, is appropriated on a pro rata

die basis on an accrual basis until the date of maturity or final sale, using the cumulative or straight-line method, based

on the contractual remuneration and purchase price, and recorded directly in the statement of income for the period.

Impairment of securities classified as available for sale and held to maturity, if considered 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 considered as a

result of the transaction and is recorded on the date of the transaction as a gain or loss on securities.

f) Derivative financial instruments

Derivative financial instruments are adjusted to market value at each monthly trial balance and balance sheet date.

Increases or decreases in value are recorded in the appropriate income or expense accounts.

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, or the price of a similar financial instrument, considering at least, the

payment or maturity date, the credit risk and currency or index.

Derivative financial instruments used to offset, in whole or in part, the risks arising from exposure to variations in the

market value or asset cash flow or financial liabilities, commitment or future transaction, are considered hedge

instruments and are classified according to their nature:

Market Risk Hedge: increases or decreases in value of the financial instruments, as well as of the hedged item, are

recorded in income/expense accounts for the period; and

Cash Flow Hedge: the effective portion of the increases or decreases in value of the derivative financial instruments

classified in this category are recorded, net of tax effects, in Accumulated other comprehensive income in Shareholders'

equity. The effective amount is that in which the variation of the hedged item, directly related to the corresponding risk, is

offset by the variation in the financial instrument used for the hedge, considering the accumulated effect of the

transaction. Other variations in these instruments are recorded directly in the statement of income for the period.

g) Loan and leasing transactions, advances on foreign exchange contracts, other receivables with loan characteristics and allowance for loan losses

Loans, leases, advances on foreign exchange contracts and other receivables with loan characteristics are classified

according to Management's judgment with respect to the level of risk, taking into consideration market conditions, past

experience and specific risks in relation to the transaction, to borrowers and guarantors, observing the parameters

established by CMN Resolution 2,682/1999, which requires periodic analyses of the portfolio and its classification into

nine levels, ranging from AA (minimum risk) to H (maximum risk), as well as the classification of transactions more than

15 days overdue as non-performing. For atypical transactions with a term of more than 36 months, there is a double

counting on the days-past-due intervals defined for the nine levels of risk, as permitted by CMN Resolution 2,682/1999.

Income from loans overdue for more than 60 days, regardless of their risk level, will only be recognized as income when

effectively received.

Operations classified at level H, which remain in this classification for 180 days, are written off against the existing

allowance.

Renegotiated transactions are maintained, at a minimum, at the same level at which they were rated on the date of

renegotiation. The renegotiations of loans already written off against the allowance are rated as H level and any gains

from renegotiation are recognized as income when effectively received. Reclassification to a lower risk category is

allowed when there is significant amortization of the transaction or when new material facts justify a change in risk level,

according to CMN Resolution 2,682/1999.


3rd quarter 2017


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Allowance for loan losses, considered sufficient by management, satisfies the minimum requirement established by the

aforementioned CMN Resolution 2,682/1999 (Note 10.e).

h) Taxes

Taxes are calculated based on the rates shown in the table below:

Tributos Alíquota

Income tax (15.00% + additional 10.00%) 25.00%

Social Contribution on Net Income - CSLL (1) 20.00%

Social Integration Program/Public servant fund program(PIS/Pasep) (2) 0.65%

Contribution to Social Security Financing – (Cofins) (2) 4.00%

Tax on services of any kind – (ISSQN) Up to 5.00%

(1) Rate applied to financial companies and to non-financial companies in the areas of private insurance and capitalization, since September 01,2015 (the rate was 15% until August 31, 2015). In January 2019, the rate will return to 15%. For others non-financial companies, the CSLL rate is 9%.

(2) For non-financial companies that have opted for the non-cumulative regime of calculation, the PIS/PASEP rate is 1.65% and the Cofins rate is 7.6%.

Deferred tax assets (DTA) and deferred tax liabilities are recorded by applying the current rates of taxes on their

respective bases. For the recording, maintaining and writing-off of deferred tax assets, the Bank follows the established

criteria by CMN Resolution 3,059/2002, amended by Resolutions CMN No. 3,355/2006, CMN 4,192/2013 and CMN

4,441/2015 and they are supported by a study of their realizability. DTA resulting from the increase of the social

contribution rate from 15% to 20% are being recognized in an amount sufficient for consumption by the end of the term of

the new rate (December 31, 2018), according to Law 13,169/2015.

i) Prepaid expenses

These expenses refer to the application of payments made in advance, for which the benefits or the services will occur in

subsequent periods. Prepaid expenses are recorded at cost and amortized as incurred.

j) Permanent assets

Investments: investments in associates and joint ventures in which the Bank has significant influence or an ownership

interest of 20% or more of the voting shares, and in other companies which are part of a group or are under common

control are accounted for by the equity method based on the Shareholders’ equity of the associates and joint ventures.

In the consolidated financial statements, the subsidiaries are fully consolidated and the associates and joint ventures are

presented under the equity method.

Goodwill, the premium paid over the book value of the investment acquired due to expectations of future profitability, is

based on a financial-economic assessment which substantiate the purchase price of the business and is amortized

based on annual income projections as per the assessment. Goodwill is tested for impairment annually.

Other permanent investments are valued at acquisition cost, less allowance for impairment losses, as applicable.

Property and equipment: property and equipment are stated at acquisition cost less the impairment losses and

depreciation, calculated using the straight-line method by the useful life of the asset (Note 15).

Deferred: deferred assets are recorded at cost of acquisition or formation, net of accrued amortization. They are

composed mainly of restructuring costs, and the expenditures, up to September 30, 2008, with: third party properties, as

a result of opening branches, which are amortized according to rates based on rental terms, limited to 10 years; and with

the acquisition and development of information systems, which are amortized at 10% per annum (p.a.). New values are

not recorded in deferred assets, in accordance with Resolution CMN 4,534/2016.

In 2016, the balances recorded in excluded accounting securities were reclassified to the appropriate asset accounts,

according to the nature of the transaction, in conformity with Bacen Circular 3,791/2016.


3rd quarter 2017


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Intangible: intangible assets consist of rights over intangible assets used in the running of the Bank, including acquired

goodwill.

An asset meets the criteria for identification as an intangible asset, when it is separable, i.e, it can be separated from the

entity and sold, transferred or licensed, rented or exchanged, individually or jointly with a contract, related assets or

liabilities, regardless of the intention for use by the entity; or results from contractual rights or other legal rights,

regardless of whether these rights are transferable or separable from the entity or other rights and obligations.

Intangible assets with finite useful lives compromise: disbursements for the acquisition of rights to provide banking

services (rights to managing payrolls), amortized over the terms of contracts; goodwill paid on the acquisition of merged

company (Banco Nossa Caixa), amortized based on projections of annual results set in the economic-financial study;

software, amortized on a straight-line basis at a rate of 10% per year from the date it is available for use. Intangible

assets are adjusted by allowance for impairment losses, if applicable (Note 16). The amortization of intangible assets is

recorded in the Other administrative expenses account.

k) Impairment of non-financial assets

At each reporting date, the Bank determines if there is any indication that a non-financial asset may be impaired. This

evaluation is based on internal and external sources of information. If there are indications of impairment, the Bank

estimates the asset’s recoverable amount, which is the higher of its fair value less selling costs or its value in use.

Regardless of whether there are indications of impairment, the Bank performs an annual impairment test for intangible

assets with indefinite useful lives (including goodwill acquired in business combinations and intangible assets not yet

available for use). The Bank performs these tests at the same time every year.

If the recoverable amount of the asset is less than its carrying amount, the asset's carrying amount is reduced to its

recoverable amount through a provision for impairment, which is recognized in the Income statement.

Methodologies in assessing the recoverable amount of the main non-financial assets:

Property and equipment in use

Land and buildings – the Bank relies on technical evaluations prepared in accordance with the standards of the Brazilian

Association of Technical Standards - ABNT to determine the recoverable amount of land and buildings. The ABNT

establishes general concepts, methods and procedures for the valuation of urban properties.

Data processing equipment – when available, the Bank uses market values to determine the recoverable amount of data

processing equipment. When market values are not readily available, the Bank considers the amount recoverable by

using the asset in its operations. Recoverable amount is calculated based on cash flow projections for the asset over its

useful life, discounted to present value using the interbank deposit certificate - CDI rate.

Other items of property and equipment – these items are individually insignificant. Although subject to evaluation of

impairment indicators, the Bank does not determine their recoverable amount on an individual basis due to cost benefit

considerations. The Bank conducts annual inventory counts and writes off assets that are lost or showing signs of

deterioration.

Investments and goodwill on acquisition of investments

The recoverable amount of goodwill arising from business combinations is calculated using a discounted cash flow

model based on the investments’ expected results. Assumptions used in estimating the results consist of:

the company’s operating projections, results and investment plans;

macroeconomic scenarios developed by the Bank; and

internal methodologies to determine cost of capital under CAPM.


3rd quarter 2017


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Intangible

Rights due to the acquisition of payrolls – the recoverability of acquired payroll contracts is determined based on the

contribution margin of the client relationships generated under each contract. The objective is to determine if the

projections that justified the initial acquisition correspond to actual performance. An impairment loss is recognized on

underperforming contracts.

Software – the Bank continuously invests in the modernization and adequacy of its internally developed software to

accompany new technologies and meet the demands of the business. Since there is no similar software in the market,

and because of the significant cost associated with developing models to calculate value in use, the Bank evaluates the

ongoing utility of its software to test for impairment. Any software not being used is written off.

Goodwill on acquisition of merged company - the recoverable amount of goodwill arising from business combinations is

calculated using a discounted cash flow model based on the investments’ expected results. Assumptions used in

estimating the results consist of:

the company’s operating projections, results and investment plans;

macroeconomic scenarios developed by the Bank; and

internal methodologies to determine cost of capital under CAPM.

This methodology, particularly with respect to goodwill on the Bank’s acquisition of Banco Nossa Caixa in November

2009, involves comparing the portion of the purchase price attributable to goodwill to the Bank’s projected results in the

state of São Paulo, less net assets with finite useful lives. These projections are based on Banco do Brasil’s historic

results adjusted for current assumptions about earnings growth. The discount rate reflects the Bank’s cost of capital.

The losses recorded in the Statement of Income to adjust the recoverable value of these assets, if any, are stated in the

respective notes.

l) Employee benefits

Employee benefits related to short-term benefits for current employees are recognized on the accrual basis as the

services are provided. Post-employment benefits, comprising supplementary retirement benefits and medical assistance

for which the Bank is responsible, are assessed in accordance with criteria established by CPC 33 (R1) -Employee

benefits, approved by CVM Resolution 695/2012 (Note 26) and by the Resolution CMN 4,424/2015. The evaluations are

performed semiannually.

In defined-contribution plans, the actuarial risk and the investment risk are borne by the plan participants. Accordingly,

cost accounting is based on each period's contribution amount representing the Bank's obligation. Consequently, no

actuarial calculation is required when measuring the obligation or expense, and there are neither actuarial gains nor

losses.

In defined benefit plans, the actuarial risk and the investment risk value of plan assets fall either partially or fully on the

sponsoring entity. Accordingly, cost accounting requires the measurement of plan obligations and expenses, with a

possibility of actuarial gains and losses, leading to the register of a liability when the amount of the actuarial obligation

exceeds the value of plan assets, or an asset when the amount of assets exceeds the value of plan obligations. In the

latter instance, the asset should be recorded only when there is evidence that it can effectively reduce the contributions

from the sponsor or will be refundable in the future.

The Bank recognizes the components of defined benefit cost in the period in which the actuarial valuation was

performed, in accordance with criteria established by CPC 33 (R1) - Employee benefits, as follows:

the current service cost and the net interest on the net defined benefit liability (asset) are recognized in profit or loss; and

the remeasurements of the net defined benefit liability (asset) are recognized in other comprehensive income, in the Bank’s equity, net of tax effects.


3rd quarter 2017


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Contributions to be paid by the Bank to medical assistance plans in some cases will continue after the employee’s

retirement. Therefore, the Banks obligations are evaluated by the present actuarial value of the contributions to be paid

over the expected period in which the plan participants and beneficiaries will be covered by the plan. Such obligations

are evaluated and recognized under the same criteria used for defined benefit plans.

m) Deposits and Securities sold under repurchase agreements

Deposits and Securities sold under repurchase agreements are recorded at the amount of the liabilities and include,

when applicable, related charges up to the balance sheet date, on a daily pro rata die basis.

n) Provisions, contingent assets and liabilities and legal obligations

The recognition, measurement and disclosure of provisions, contingent assets and liabilities and legal obligations are

made in accordance with the criteria defined by CPC 25 – Provisions, Contingent Assets and Contingent Liabilities,

approved by CMN Resolution 3,823/2009 (Note 27).

Contingent assets are not recognized in the financial statements however when there is evidence assuring their

realization, usually represented by the final judgment of the lawsuit and by the confirmation of the capacity for its

recovery by receipt or offsetting by another receivable, are recognized as assets.

Contingent liabilities are recognized in the financial statements when, based on the opinion of legal advisor and

Management, the risk of loss of legal or administrative proceedings is considered probable, with a probable outflow of

financial resource for the settlement of the obligation and when the amounts involved are measurable with sufficient

assurance, being quantified when judicial noticed and revised monthly as follows:

Aggregated Method: cases that are similar and recurring in nature and whose values are not considered individually

significant. Provisions are based on statistical data. It covers civil, tax or labor judicial proceedings (except labor claims

filed by trade unions and all proceedings classified as strategic) with probable value of award, estimated by legal

advisors, up to R$ 1 million.

Individual Method: cases considered unusual or whose value is considered relevant by our legal counsel. Provisions are

based on: the amount claimed; probability of an unfavorable decision; evidence presented; evaluation of legal

precedents; other facts raised during the process; judicial decisions made during the course of the case; and the

classification and the risk of loss of legal actions.

Contingent liabilities considered as possible losses are not recognized in the financial statements, they are disclosed in

notes, while those classified as remote do not require provisioning or disclosure.

Legal obligations (fiscal and social security) are derived from tax obligations provided in the legislation, regardless of the

probability of success of lawsuits in progress, and have their amounts recognized in full in the financial statements.

o) Debt instrument issue expense

Expenses related to transactions involving the issue of debt instruments are capitalized and presented as a reduction of

the corresponding liability. The expenses are recognized in the income statement over the term of the transaction.

p) Other assets and liabilities

Other assets are stated at their realizable amounts, including, when applicable, related income and monetary and

exchange variations on a pro rata die basis, and allowance for losses, when deemed appropriate. Other liabilities are

stated at their known and measurable amounts, plus, when applicable, related charges and monetary and exchange

variations on a pro rata die basis.


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q) Earnings per share

Earnings per share is disclosed in accordance with CPC 41 – Earnings per Share, approved by Resolution

CVM 636/2010. The Bank's basic and diluted earnings per share were calculated by dividing the net profit attributable to

shareholders by the weighted average number of total common shares, excluding treasury shares (Note 23.f). The Bank

has no outstanding options, bonus of subscription nor its equivalents which provide their holders the right to acquire

shares. Thus, the basic and diluted earnings per share are equal.

r) Functional and presentation currency

These consolidated financial statements are presented in Brazilian Reais, which is the Bank's functional and

presentation currency. The functional currency is the currency of the main economic environment in which an entity

operates. For most of the Conglomerate entities, the functional currency is the Real.

The financial statements of branches and subsidiaries abroad follow the accounting criteria in force in Brazil and are

converted into the Real currency by the current rate criterion, as provided for in Bacen Circular No. 2,397 / 1993 and

CMN Resolution No. 4,524 / 2016. Their effects are recognized in the income statement, under the equity method for

those who record the functional currency equal to the national currency, and in Shareholders' Equity, for those who

record the functional currency different from the national currency.

5 - INFORMATION BY SEGMENT

The segment information was prepared based on internal reports used by the Bank’s Chief Operating Decision Maker to

assess performance, and make decision about the allocation of fund for investment and other purposes. The framework

also takes into account the regulatory environment and the similarities between goods and services. The information was

prepared based on internal management reports (Management Information), reviewed regularly by Management.

The accounting policies adopted in the Management Information are different from those presented in the description of

significant accounting policies of BB Consolidated (Note 4.j), because of proportionally consolidating the investments in

joint ventures.

The Bank's operations were mainly in Brazil, divided into five segments: banking, investments, fund management,

insurance (insurance, pension and capitalization) and payment methods. The Bank also engages in other activities,

including consortium business and other services aggregated in "Other Segments".

The measurement of managerial income and of managerial assets and liabilities by segment takes into account all

income and expenses as well as all assets and liabilities recorded by the controlled companies (Note 3) and joint

ventures (Note 14). There were no common income or expenses nor common assets or liabilities allocated between the

segments, for any distribution criteria.

Transactions between segments were eliminated in the column “Intersegment transactions”. They were conducted at the

same terms and conditions as those practiced with unrelated parties for similar transactions. These transactions do not

involve any unusual payment risks.

None of the Bank’s customers individually account for more than 10% of the Bank’s income.

a) Banking segment

The results were mainly from operations in Brazil. It includes a wide array of products and services, including deposits,

loans and services provided to customers through different distribution channels, located in the country and abroad.

The operations of the banking segment include business with the retail, wholesale and public sector, which were carried

out by the Bank’s network and customer service teams. It also engages in business with micro-entrepreneurs and low-

income population, undertaken through banking correspondents.


3rd quarter 2017


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b) Investments segment

This segment was responsible for operations in the domestic capital markets, being active in the intermediation and

distribution of debts in the primary and secondary markets, as well as being responsible for equity investments and the

rendering of some financial services.

The income from financial intermediation of this segment were the accrued interest on investments in securities less the

interest expenses from third party funding costs. The principal equity investments were those in the associates and

subsidiary companies. Financial service fee income were from economic/financial advisory services and the underwriting

of fixed and variable income.

c) Fund management segment

The segment was involved in the purchase, sale and custody of securities, portfolio management, and management of

investment funds and clubs. Income consists mainly of commissions and management fees for services charged to

investors.

d) Insurance, pension, and capitalization segment

In this segment, the products and services offered relate to life, property and automobile insurance, private pension and

capitalization plans.

Income were mainly from revenues from insurance premiums issued, contributions to private pension plans,

capitalization bonds and investments in securities. The amounts offset by selling cost, technical insurance provision and

expenses related to benefits and redemptions.

e) Payment methods segment

This segment was responsible for the funding, transmission, processing and settlement of operations via electronic

means.

Revenues were mainly from commissions and management fees charged to businesses and financial institutions for the

services rendered, as well as income from rent, installation and maintenance of electronic terminals.

f) Other segments

Other segments comprise the consortium management and other services segments, which have been aggregated as

they were not individually significant.

Their revenues were originated mainly from rendering services not covered in previous segments, such as: credit

recovery; consortium management; development, manufacturing, sale, lease and integration of digital electronic systems

and equipment, peripherals, programs, inputs and computing supplies; and intermediation of air tickets, lodging and

organization of events.


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g) Breakdown of managerial information by segment and accounting reconciliation

Jan 1 to Sep 30, 2017

Managerial Information by Segment Managerial to Accouting Reconciliation

Banking Investments Fund

Management

Insurance, pension and capitalization

Payment methods

Other segments

Intersegment transactions

Management information

Consolidation Adjustments

BB Consolidated

Income from financial intermediation 112,481,430 121,071 56,400 3,793,027 388,176 160,983 (358,236) 116,642,851 (8,677,470) 107,965,381

Income from loans and leases 65,901,576 -- -- -- -- 81,424 (55,037) 65,927,963 (4,103,524) 61,824,439

Securities 42,992,441 113,913 56,400 86,467 390,131 80,127 (363,701) 43,355,778 (1,504,197) 41,851,581

Derivative financial instruments (1,046,311) 7,158 -- -- (1,955) -- -- (1,041,108) 186,325 (854,783)

Income from exchange operations and compulsory deposits 3,902,250 -- -- -- -- (568) 654 3,902,336 (30,457) 3,871,879

Operations of sale and transfer of financial assets 731,474 -- -- -- -- -- -- 731,474 540,791 1,272,265

Financial results from insurance, pension and capitalization operations -- -- -- 3,706,560 -- -- 59,848 3,766,408 (3,766,408) --

Expenses from financial intermediation (88,530,679) (275,843) -- (2,714,452) (13,909) (97,465) 607,793 (91,024,555) 6,319,261 (84,705,294)

Deposits and securities sold under repurchase agreements (64,317,358) (275,843) -- -- -- (97,465) 555,751 (64,134,915) 2,618,053 (61,516,862)

Borrowings, assignments, onlending and leases (3,626,746) -- -- -- (13,909) -- 52,042 (3,588,613) 170,221 (3,418,392)

Allowance/reversal for loan losses (20,491,456) -- -- -- -- -- -- (20,491,456) 795,673 (19,695,783)

Operations of sale and transfer of financial assets (95,119) -- -- -- -- -- -- (95,119) 20,862 (74,257)

Financial expenses from technical provisions of insurance, pension plans and capitalization -- -- -- (2,714,452) -- -- -- (2,714,452) 2,714,452 --

Other income 21,269,057 898,548 1,590,980 5,856,218 4,285,429 1,885,212 (1,608,940) 34,176,504 (5,267,061) 28,909,443

Income from service and banking fees 15,038,049 608,848 1,577,457 1,979,793 3,676,627 1,304,808 (1,113,929) 23,071,653 (3,864,782) 19,206,871

Equity in associates and joint ventures 112,666 (50,832) -- 16,356 (48,385) -- -- 29,805 2,989,641 3,019,446

Results from insurance, pension plan and capitalization operations -- -- -- 3,286,935 -- -- 148,158 3,435,093 (3,435,093) --

Other 6,118,342 340,532 13,523 573,134 657,187 580,404 (643,169) 7,639,953 (956,827) 6,683,126

Other expenses (39,705,160) (281,268) (252,547) (2,085,475) (2,624,996) (1,131,691) 1,359,383 (44,721,754) 5,736,184 (38,985,570)

Personnel expenses (15,406,289) (43,666) (66,004) (403,228) (163,869) (280,952) 6,774 (16,357,234) 934,890 (15,422,344)

Other administrative expenses (9,145,089) (49,058) (45,539) (538,773) (376,607) (272,125) 1,105,853 (9,321,338) 1,009,177 (8,312,161)

Amortization (2,426,767) (92,638) -- (88,973) (57,426) (2,754) -- (2,668,558) 148,713 (2,519,845)

Depreciation (862,724) -- -- (12,783) (61,846) (10,812) -- (948,165) 85,121 (863,044)

Tax expenses (3,625,805) (54,495) (108,358) (562,189) (405,344) (192,502) -- (4,948,693) 823,132 (4,125,561)

Other (8,238,486) (41,411) (32,646) (479,529) (1,559,904) (372,546) 246,756 (10,477,766) 2,735,151 (7,742,615)

Profit before taxation and profit sharing 5,514,648 462,508 1,394,833 4,849,318 2,034,700 817,039 -- 15,073,046 (1,889,086) 13,183,960

Income tax and social contribution (1,363,325) (156,804) (628,382) (1,757,238) (689,296) (194,633) -- (4,789,678) 1,777,903 (3,011,775)

Employee and directors profit sharing (1,087,097) -- (1,090) (31,480) (7,592) (2,393) -- (1,129,652) 111,183 (1,018,469)

Non-controlling interests (195,680) -- -- (1,055,446) -- (3) -- (1,251,129) -- (1,251,129)

Net income 2,868,546 305,704 765,361 2,005,154 1,337,812 620,010 -- 7,902,587 -- 7,902,587

Balance sheet

Interbank investments 423,492,899 6,783 852,834 2,495,865 996,649 426,672 (8,390,395) 419,881,307 (8,537,051) 411,344,256

Securities and derivative financial instruments 145,466,759 1,035,973 20,422 185,681,918 6,755,868 1,107,194 (1,384,914) 338,683,220 (201,192,451) 137,490,769

Loan and leasing, net of allowance for losses 562,432,301 -- -- -- -- 2,637,804 (2,724,985) 562,345,120 (20,463,307) 541,881,813

Investments 14,566,727 5,297,936 26,967 423,063 462,185 27 (17,334,510) 3,442,395 13,410,820 16,853,215

Other assets 289,032,885 999,100 440,674 12,899,976 20,956,065 2,231,316 (1,156,952) 325,403,064 (33,082,362) 292,320,702

TOTAL ASSETS 1,434,991,571 7,339,792 1,340,897 201,500,822 29,170,767 6,403,013 (30,991,756) 1,649,755,106 (249,864,351) 1,399,890,755

Liabilities 1,345,592,263 4,096,839 939,624 192,826,101 20,871,646 3,570,181 (11,705,745) 1,556,190,909 (249,864,351) 1,306,326,558

Deposits 442,161,600 3,716,832 -- -- -- -- (3,884,868) 441,993,564 (4,870,575) 437,122,989

Securities sold under repurchase agreements 437,489,708 -- -- -- -- -- (7,236,479) 430,253,229 (12,382,945) 417,870,284

Funds from acceptance and issuance of securities 146,857,123 -- -- -- -- 2,694,961 -- 149,552,084 (12,419,860) 137,132,224

Onlendings 84,215,773 -- -- -- -- -- -- 84,215,773 (1,541,633) 82,674,140

Technical provisions for insurance, pension plans and capitalization -- -- -- 185,977,982 -- -- (12,808) 185,965,174 (185,965,174) --

Other liabilities 234,868,059 380,007 939,624 6,848,119 20,871,646 875,220 (571,590) 264,211,085 (32,684,164) 231,526,921

Shareholders' equity 89,399,308 3,242,953 401,273 8,674,721 8,299,121 2,832,832 (19,286,011) 93,564,197 -- 93,564,197

TOTAL LIABILITIES AND EQUITY 1,434,991,571 7,339,792 1,340,897 201,500,822 29,170,767 6,403,013 (30,991,756) 1,649,755,106 (249,864,351) 1,399,890,755


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Jan 1 to Sep 30, 2016

Managerial Information by Segment Managerial to Accouting Reconciliation

Banking Investments Fund

Management

Insurance, pension and capitalization

Payment methods

Other segments

Intersegment transactions

Management information

Consolidation Adjustments

BB Consolidated

Income from financial intermediation 124,389,036 (32,899) 67,596 4,727,680 269,435 87,811 (530,550) 128,978,109 (9,885,267) 119,092,842

Income from loans and leases 76,474,961 -- -- -- -- -- (158,203) 76,316,758 (4,619,779) 71,696,979

Securities 42,508,446 32,932 67,596 107,577 269,435 87,522 (437,348) 42,636,160 (1,572,843) 41,063,317

Derivative financial instruments (1,711,728) (65,831) -- -- -- -- -- (1,777,559) 29,915 (1,747,644)

Income from exchange operations and compulsory deposits 6,263,586 -- -- -- -- 289 8 6,263,883 71,518 6,335,401

Operations of sale and transfer of financial assets 853,771 -- -- -- -- -- -- 853,771 891,018 1,744,789

Financial results from insurance, pension and capitalization operations -- -- -- 4,620,103 -- -- 64,993 4,685,096 (4,685,096) --

Expenses from financial intermediation (98,838,204) (340,657) (9) (3,216,009) (195) (88,818) 658,103 (101,825,789) 7,311,307 (94,514,482)

Deposits and securities sold under repurchase agreements (85,827,437) (330,653) -- -- -- (89,221) 587,537 (85,659,774) 3,118,377 (82,541,397)

Borrowings, assignments, onlending and leases 8,572,720 -- -- -- -- -- 70,566 8,643,286 169,985 8,813,271

Allowance/reversal for loan losses (21,525,024) (10,004) (9) -- (195) 403 -- (21,534,829) 806,936 (20,727,893)

Operations of sale and transfer of financial assets (58,463) -- -- -- -- -- -- (58,463) -- (58,463)

Financial expenses from technical provisions of insurance, pension plans and capitalization -- -- -- (3,216,009) -- -- -- (3,216,009) 3,216,009 --

Other income 21,479,523 869,930 1,246,081 5,627,125 4,747,879 1,873,862 (1,687,156) 34,157,244 (6,234,527) 27,922,717

Income from service and banking fees 13,796,045 547,686 1,235,377 1,749,843 3,945,229 1,146,095 (1,177,257) 21,243,018 (3,767,133) 17,475,885

Equity in associates and joint ventures 13,812 (8,504) -- 388 (54,480) 340 -- (48,444) 3,228,108 3,179,664

Results from insurance, pension plan and capitalization operations -- -- -- 3,512,647 -- -- 192,781 3,705,428 (3,705,428) --

Other 7,669,666 330,748 10,704 364,247 857,130 727,427 (702,680) 9,257,242 (1,990,074) 7,267,168

Other expenses (41,147,797) (409,461) (230,036) (2,063,790) (2,943,494) (1,301,648) 1,559,603 (46,536,623) 6,676,173 (39,860,450)

Personnel expenses (16,172,505) (55,814) (64,509) (414,978) (234,713) (269,499) 6,392 (17,205,626) 1,133,244 (16,072,382)

Other administrative expenses (9,057,135) (51,206) (39,872) (533,248) (493,145) (232,222) 1,128,052 (9,278,776) 1,125,480 (8,153,296)

Amortization (2,422,441) (81,972) -- (81,187) (115,340) (1,953) -- (2,702,893) 203,688 (2,499,205)

Depreciation (852,191) (2,369) -- (13,994) (89,618) (7,828) -- (966,000) 118,831 (847,169)

Tax expenses (3,788,384) (42,284) (86,027) (580,555) (446,344) (174,419) 3,999 (5,114,014) 901,455 (4,212,559)

Other (8,855,141) (175,816) (39,628) (439,828) (1,564,334) (615,727) 421,160 (11,269,314) 3,193,475 (8,075,839)

Profit before taxation and profit sharing 5,882,558 86,913 1,083,632 5,075,006 2,073,625 571,207 -- 14,772,941 (2,132,314) 12,640,627

Income tax and social contribution (2,161,825) (29,649) (486,503) (1,952,619) (711,613) (117,312) -- (5,459,521) 2,042,993 (3,416,528)

Employee and directors profit sharing (977,510) -- (836) (28,234) (418) (1,808) -- (1,008,806) 89,321 (919,485)

Non-controlling interests (215,233) -- -- (1,019,103) -- (2) -- (1,234,338) -- (1,234,338)

Net income 2,527,990 57,264 596,293 2,075,050 1,361,594 452,085 -- 7,070,276 -- 7,070,276

Balance sheet

Interbank investments 436,236,912 8,027 717,024 1,467,446 1,245,575 338,120 (7,075,172) 432,937,932 (5,134,717) 427,803,215

Securities and derivative financial instruments 136,807,417 1,389,763 8,340 154,879,397 4,064,938 742,014 (2,068,859) 295,823,010 (170,152,052) 125,670,958

Loan and leasing, net of allowance for losses 603,930,235 -- -- -- -- 2,697,182 (2,799,717) 603,827,700 (20,779,627) 583,048,073

Investments 15,026,688 5,169,625 23,681 141,376 608,865 322,191 (17,928,159) 3,364,267 13,117,691 16,481,958

Other assets 290,257,395 900,669 290,146 14,890,816 7,500,087 3,025,057 (1,166,516) 315,697,654 (20,489,963) 295,207,691

TOTAL ASSETS 1,482,258,647 7,468,084 1,039,191 171,379,035 13,419,465 7,124,564 (31,038,423) 1,651,650,563 (203,438,668) 1,448,211,895

Liabilities 1,398,736,826 4,224,146 698,371 163,599,124 5,956,133 3,452,604 (10,740,780) 1,565,926,424 (203,438,668) 1,362,487,756

Deposits 439,785,728 3,670,027 -- 410 -- -- (3,955,903) 439,500,262 (1,797,739) 437,702,523

Securities sold under repurchase agreements 431,237,784 -- -- -- -- -- (5,384,807) 425,852,977 (15,382,938) 410,470,039

Funds from acceptance and issuance of securities 180,063,836 -- -- -- 938,319 2,833,815 (9,795) 183,826,175 (10,259,336) 173,566,839

Onlendings 86,833,684 -- -- -- -- -- -- 86,833,684 (1,755,205) 85,078,479

Technical provisions for insurance, pension plans and capitalization -- -- -- 156,129,474 -- -- (11,122) 156,118,352 (156,118,352) --

Other liabilities 260,815,794 554,119 698,371 7,469,240 5,017,814 618,789 (1,379,153) 273,794,974 (18,125,098) 255,669,876

Shareholders' equity 83,521,821 3,243,938 340,820 7,779,911 7,463,332 3,671,960 (20,297,643) 85,724,139 -- 85,724,139

TOTAL LIABILITIES AND EQUITY 1,482,258,647 7,468,084 1,039,191 171,379,035 13,419,465 7,124,564 (31,038,423) 1,651,650,563 (203,438,668) 1,448,211,895


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6 - CASH AND DUE FROM BANKS

Sep 30, 2017 Dec 31, 2016 Sep 30, 2016

Cash and due from banks 14,267,230 12,805,771 12,928,959

Local currency 9,942,527 7,824,081 8,548,689

Foreign currency 4,315,101 4,974,123 4,371,676

Investments in gold 9,602 7,567 8,594

Interbank investments (1) 32,446,099 90,317,899 69,401,939

Securities purchased under resale agreements – guaranteed by securities not repledged / re-sold

8,153,268 58,269,836 36,220,843


Foreign currency -- 10,890 295,058

Total 46,713,329 103,123,670 82,330,898

(1) Investments whose original maturity is less than or equal to 90 days and with insignificant risk of change in fair value.

7 - INTERBANK INVESTMENTS

a) Breakdown

Sep 30, 2017 Dec 31, 2016 Sep 30, 2016

Securities purchased under resale agreement 385,024,243 371,682,685 392,924,664

Reverse repos - own resources 8,198,523 58,281,504 36,231,081

Treasury financial bills 5,891,252 58,180,683 4,100,825

National Treasury bills 2,076,183 -- 622,970

National Treasury notes -- -- 31,243,191

Other securities 231,088 100,821 264,095

Reverse repos - financed position 376,825,720 313,401,181 356,693,583


National Treasury bills 11,994,696 45,437,404 93,322,772

National Treasury notes 10,371,875 48,526,197 69,798,666

Other securities 457,931 145,291 150,870


Total 411,344,256 405,711,672 427,803,215

Current assets 409,728,859 404,769,645 426,798,907

Non-current assets 1,615,397 942,027 1,004,308

b) Income from interbank investments

3rd quarter/2017 3rd quarter/2016 Jan 1 to Sep 30, 2017 Jan 1 to Sep 30, 2016

Income from securities purchased under resale agreement

9,635,178 12,701,295 31,890,232 33,361,751

Own resources 391,802 738,954 1,882,359 2,190,040

Financed position 9,243,376 11,962,341 30,007,873 31,171,711

Income from investments in interbank deposits 114,340 91,102 311,973 311,381

Total 9,749,518 12,792,397 32,202,205 33,673,132


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8 - SECURITIES AND DERIVATIVE FINANCIAL INSTRUMENTS

a) Securities

a.1) Breakdown of the consolidated portfolio by category, type of bonds and maturity

Maturity in days

Sep 30, 2017 Dec 31, 2016 Sep 30, 2016

Market value Total Total Total

Without maturity

0 to 30 31 to 180 181 to 360 More than 360 Cost value Market value Mark to market Cost value Market value Mark to market Cost value Market value Mark to market

1 - Trading securities 1,456,288 449,288 1,204,545 1,567,864 2,157,783 6,544,463 6,835,768 291,305 5,520,274 6,074,220 553,946 6,371,369 6,720,911 349,542

Federal government bonds

10 440,783 1,196,776 1,567,864 2,082,200 5,112,054 5,287,633 175,579 4,417,848 4,918,333 500,485 5,263,799 5,572,375 308,576

Treasury financial bills -- -- 88,956 -- 222,349 309,880 311,305 1,425 362,858 364,506 1,648 331,395 332,445 1,050

National Treasury bills -- 67,399 6,866 101,761 1,277,342 1,440,225 1,453,368 13,143 898,123 905,413 7,290 1,861,257 1,867,079 5,822

National Treasury notes -- -- -- -- 280,092 277,072 280,092 3,020 545,506 548,810 3,304 445,569 448,381 2,812

Brazilian foreign debt securities

-- -- 964 -- 25,069 26,437 26,033 (404) 57,873 55,805 (2,068) 37,100 35,491 (1,609)

Foreign Government bonds

10 373,384 1,011,840 1,466,103 222,162 2,914,904 3,073,499 158,595 2,445,109 2,926,174 481,065 2,539,001 2,839,428 300,427

Other -- -- 88,150 -- 55,186 143,536 143,336 (200) 108,379 117,625 9,246 49,477 49,551 74

Corporate bonds 1,456,278 8,505 7,769 -- 75,583 1,432,409 1,548,135 115,726 1,102,426 1,155,887 53,461 1,107,570 1,148,536 40,966

Debentures -- -- -- -- 36,541 35,336 36,541 1,205 37,100 36,999 (101) 36,016 35,983 (33)

Shares in investment funds

1,441,224 -- -- -- -- 1,325,968 1,441,224 115,256 1,006,172 1,075,290 69,118 953,026 1,004,226 51,200

Shares 11,659 -- -- -- -- 917 11,659 10,742 16 28 12 17 65 48

Certificate of Deposit -- -- 3 -- -- 3 3 -- 2 2 -- 20,431 20,296 (135)

Eurobonds -- -- -- -- -- -- -- -- 44,308 33,785 (10,523) 30,052 19,625 (10,427)

Other 3,395 8,505 7,766 -- 39,042 70,185 58,708 (11,477) 14,828 9,783 (5,045) 68,028 68,341 313


3rd quarter 2017


27

Maturity in days

Sep 30, 2017 Dec 31, 2016 Sep 30, 2016


Without maturity

0 to 30 31 to 180 181 to 360 More than 360 Cost value Market value Mark to market

Cost value Market value Mark to market


2 - Available for sale securities 1,274,960 801,871 4,606,222 2,052,962 115,163,079 124,200,801 123,899,094 (301,707) 109,958,998 107,986,288 (1,972,710) 114,304,140 112,999,191 (1,304,949)

Federal government bonds 1,557 177,232 2,704,164 1,174,520 94,078,119 96,412,411 98,135,592 1,723,181 72,588,429 72,890,192 301,763 69,542,569 70,051,245 508,676

Treasury financial bills -- -- 2,520,527 -- 60,688,238 63,159,978 63,208,765 48,787 49,913,679 49,847,895 (65,784) 47,064,906 47,015,636 (49,270)

National Treasury bills -- -- -- -- 8,143,842 7,663,543 8,143,842 480,299 8,201,990 8,505,440 303,450 7,436,997 7,689,784 252,787

National Treasury notes -- -- -- 796,678 17,978,208 17,667,707 18,774,886 1,107,179 7,591,708 7,837,479 245,771 8,848,395 9,072,232 223,837

Agricultural debt securities -- -- 433 635 2,306 3,308 3,374 66 4,031 4,003 (28) 4,364 4,303 (61)

Brazilian foreign

debt securities -- -- -- -- 2,664,053 2,534,985 2,664,053 129,068 2,747,485 2,679,586 (67,899) 2,630,000 2,728,438 98,438

Foreign Government bonds -- 177,232 168,661 377,207 3,705,954 4,487,921 4,429,054 (58,867) 3,229,155 3,141,857 (87,298) 2,636,649 2,647,071 10,422

Other 1,557 -- 14,543 -- 895,518 894,969 911,618 16,649 900,381 873,932 (26,449) 921,258 893,781 (27,477)

Corporate bonds 1,273,403 624,639 1,902,058 878,442 21,084,960 27,788,390 25,763,502 (2,024,888) 37,370,569 35,096,096 (2,274,473) 44,761,571 42,947,946 (1,813,625)

Debentures -- 457,469 1,034,153 652,964 18,710,638 22,350,223 20,855,224 (1,494,999) 30,902,601 29,512,403 (1,390,198) 37,542,466 36,879,142 (663,324)

Promissory notes -- 59,159 126,142 -- -- 186,932 185,301 (1,631) 189,478 190,093 615 777,809 781,428 3,619

Credit notes -- -- -- -- 40,232 37,120 40,232 3,112 47,794 44,990 (2,804) 48,584 49,283 699

Shares in investment funds 18,576 45,955 356,865 106,286 223,786 683,214 751,468 68,254 840,127 967,785 127,658 940,794 1,009,237 68,443

Shares 224,173 -- -- -- -- 103,281 224,173 120,892 103,273 198,167 94,894 103,273 181,346 78,073

Rural product bills - commodities

-- 62,056 177,907 117,533 7,104 361,225 364,600 3,375 685,081 686,952 1,871 719,972 726,490 6,518

Certificate of Deposit -- -- -- -- -- -- -- -- 309,653 309,520 (133) 308,580 308,556 (24)

Real estate receivables certificates

-- -- 5,255 -- 195,955 340,179 201,210 (138,969) 413,561 345,056 (68,505) 412,857 342,675 (70,182)

Other 1,030,654 -- 201,736 1,659 1,907,245 3,726,216 3,141,294 (584,922) 3,879,001 2,841,130 (1,037,871) 3,907,236 2,669,789 (1,237,447)


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28

Maturity in days

Sep 30, 2017 Dec 31, 2016 Sep 30, 2016


Without maturity

0 to 30 31 to 180 181 to 360 More than 360 Cost value Market value Mark to market Cost value Market value Mark to market Cost value Market value Mark to market

3 - Held to maturity securities

465,863 -- 117,813 -- 3,825,244 5,305,027 4,408,920 (896,107) 5,595,611 4,944,850 (650,761) 2,965,586 2,618,724 (346,862)

Federal government bonds

-- -- -- -- 148,419 148,419 148,419 -- -- -- -- -- -- --

Foreign Government bonds

-- -- -- -- 148,419 148,419 148,419 -- -- -- -- -- -- --

Corporate bonds 465,863 -- 117,813 -- 3,676,825 5,156,608 4,260,501 (896,107) 5,595,611 4,944,850 (650,761) 2,965,586 2,618,724 (346,862)

Debentures -- -- 117,813 -- 3,519,877 4,273,959 3,637,690 (636,269) 4,760,259 4,360,652 (399,607) 2,251,025 2,153,433 (97,592)

Real estate receivables certificates

-- -- -- -- 156,948 416,786 156,948 (259,838) 398,687 147,533 (251,154) 391,237 138,640 (252,597)

Financial letters 465,863 -- -- -- -- 465,863 465,863 -- 430,008 430,008 -- 315,000 318,327 3,327

Other -- -- -- -- -- -- -- -- 6,657 6,657 -- 8,324 8,324 --

Total 3,197,111 1,251,159 5,928,580 3,620,826 121,146,106 136,050,291 135,143,782 (906,509) 121,074,883 119,005,358 (2,069,525) 123,641,095 122,338,826 (1,302,269)

a.2) Breakdown of the consolidated portfolio by financial statement classification and maturity date

Maturity in days

Sep 30, 2017 Dec 31, 2016 Sep 30, 2016


Without maturity

0 to 30 31 to 180 181 to 360 More than

360 Cost value Market value

Mark to market



Total by portfolio 3,197,111 1,251,159 5,928,580 3,620,826 121,146,106 136,050,291 135,143,782 (906,509) 121,074,883 119,005,358 (2,069,525) 123,641,095 122,338,826 (1,302,269)

Own portfolio 3,197,111 1,251,159 3,959,173 2,827,914 89,379,818 101,309,341 100,615,174 (694,166) 80,504,897 78,440,696 (2,064,201) 93,264,385 95,856,734 2,592,349

Subject to repurchase agreements

-- -- 1,693,866 783,021 29,665,698 32,350,677 32,142,586 (208,092) 37,412,855 37,410,153 (2,702) 27,347,362 23,454,698 (3,892,664)

Pledged in guarantee -- -- 275,541 9,891 2,100,590 2,390,273 2,386,022 (4,251) 3,157,131 3,154,509 (2,622) 3,029,348 3,027,394 (1,954)

a.3) Breakdown of the consolidated portfolio by category and maturity in years

Maturity in years

Sep 30, 2017 Dec 31, 2016 Sep 30, 2016


Without maturity

Due in up to one year

Due from 1 to 5 years

Due from 5 to 10 years

Due after 10 years

Cost value Market value Cost value Market value Cost value Market value

Total by category 3,197,111 10,800,565 83,461,285 33,518,769 4,166,052 136,050,291 135,143,782 121,074,883 119,005,358 123,641,095 122,338,826

1 - Trading securities 1,456,288 3,221,697 1,623,937 490,254 43,592 6,544,463 6,835,768 5,520,274 6,074,220 6,371,369 6,720,911

2 - Available for sale securities 1,274,960 7,461,055 79,896,448 31,840,484 3,426,147 124,200,801 123,899,094 109,958,998 107,986,288 114,304,140 112,999,191

3 - Held to maturity securities 465,863 117,813 1,940,900 1,188,031 696,313 5,305,027 4,408,920 5,595,611 4,944,850 2,965,586 2,618,724


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29

a.4) Summary of the consolidated portfolio by financial statement classification

Sep 30, 2017 Dec 31, 2016 Sep 30, 2016

Book value Book value Book value

Current Non-current Total Current Non-current Total Current Non-current Total

Total by portfolio 16,155,459 119,884,430 136,039,889 15,745,981 103,910,138 119,656,119 18,278,385 104,407,303 122,685,688

Own portfolio 13,394,070 88,134,141 101,528,211 13,937,394 65,273,440 79,210,834 16,789,817 79,721,478 96,511,295

Subject to repurchase agreements 2,475,932 29,649,699 32,125,631 1,499,048 35,791,728 37,290,776 1,174,435 21,972,564 23,146,999

Pledged in guarantee 285,457 2,100,590 2,386,047 309,539 2,844,970 3,154,509 314,133 2,713,261 3,027,394

a.5) Summary of the consolidated portfolio by category

Sep 30, 2017 Dec 31, 2016 Sep 30, 2016

Total by category

1 - Trading securities 6,835,768 5% 6,074,220 5% 6,720,911 6%

2 - Available for sale securities 123,899,094 91% 107,986,288 90% 112,999,191 92%

3 - Held to maturity securities 5,305,027 4% 5,595,611 5% 2,965,586 2%

Portfolio book value 136,039,889 100% 119,656,119 100% 122,685,688 100%

Mark to market - held to maturity (896,107) -- (650,761) -- (346,862) --

Portfolio market value 135,143,782 -- 119,005,358 -- 122,338,826 --


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30

b) Income from operations with securities

3rd quarter/2017 3rd quarter/2016 Jan 1 to Sep 30, 2016

Short-term interbank investments (Note 7.b) 9,749,518 12,792,397 32,202,205 33,673,132

Fixed-income securities 3,243,777 4,131,958 10,125,876 12,007,924

Variable-income securities (681,094) 320,747 (476,500) (4,617,739)

Total 12,312,201 17,245,102 41,851,581 41,063,317

c) Reclassification of securities

There was no reclassification of securities in the period from January to September 30, 2017.

There was the following reclassification in the period from January 1 to December 31, 2016:

On April 27, 2016, Cielo's Board of Directors approved the partial repurchase of debentures issued by Cielo up to

R$ 2.000.000 thousand, causing early maturity of the debentures, although the BB Conglomerate had the intention and

financial capacity to hold Cielo's debentures to maturity (December 2023).

Due to this fact, on June 30, 2016, BB Conglomerate reclassified all the securities in the category "held to maturity" to

the category "available for sale", resulting in a negative mark to market impact in Shareholders' Equity in the amount of

R$ 39,326 thousand, net of tax effects.

Impact

Market value 3,446,831

Book value before reclassification 3,506,416

Mark to market (59,585)

Tax effects 20,259

Shareholders’ Equity impact (39,326)

d) 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 hedge (market risk and cash flow risk) and trading, both within limits approved by

committees of the Bank. The hedge strategy of the equity positions is in line with macroeconomic analyses and is

approved by the Executive Board of Directors.

In the options market, active or long positions have the Bank as holder, while passive or short positions have the Bank as

writer.

The main risks inherent to derivative financial instruments resulting from the business of the Bank and its subsidiaries are

credit, market, liquidity and operational, and the management process presented in note 28.

The models used to manage risks with derivatives are reviewed periodically and the decisions made follow the best

risk/return relationship, estimating possible losses based on the analysis of macroeconomic scenarios.

The Bank uses tools and systems to manage the derivatives. Trading in new derivatives, standardized or not, is subject

to a prior risk analysis.

Risk analysis of the subsidiaries is undertaken on an individual basis and its risk management is done on a consolidated

basis.

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.


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31

Total credit exposure from swaps is R$ 160,415 thousand on Sep 30, 2017 (R$ 221,735 thousand on Dec 31, 2016 and

R$ 260,750 thousand on Sep 30, 2016).

d.1) Breakdown of the portfolio of derivatives for trading by index

By Index Sep 30, 2017 Dec 31, 2016 Sep 30, 2016

Notional value Cost value Market value Notional value Cost value Market value Notional value Cost value Market value

Future contracts

Purchase commitments 8,964,688 -- -- 12,675,733 -- -- 11,966,935 -- --

Interbank deposits 4,247,833 -- -- 3,767,529 -- -- 3,749,672 -- --

Currencies 4,690,681 -- -- 8,899,499 -- -- 8,204,113 -- --

Commodities 26,174 -- -- 8,705 -- -- 13,150 -- --

Sales commitments 2,599,155 -- -- 2,109,516 -- -- 2,800,612 -- --

Interbank deposits 1,716,766 -- -- 1,103,821 -- -- 1,609,902 -- --

Currencies 639,336 -- -- 872,351 -- -- 999,036 -- --

Libor 228,081 -- -- 111,061 -- -- 165,922 -- --

Commodities 14,972 -- -- 22,283 -- -- 25,752 -- --

Forward operations

Asset position 3,726,715 762,051 757,353 4,472,363 300,860 253,699 7,223,694 851,036 777,142

Term securities 666,922 666,922 666,922 -- -- -- 456,952 456,952 456,952

Term currencies 3,028,468 90,918 84,465 4,436,664 297,777 242,787 6,738,047 391,746 308,753

Term commodities 31,325 4,211 5,966 35,699 3,083 10,912 28,695 2,338 11,437

Liability position 9,403,499 (1,229,462) (1,111,458) 10,058,932 (968,637) (582,138) 8,631,111 (1,640,290) (1,214,322)

Term securities 666,922 (666,922) (666,922) -- -- -- 456,952 (456,952) (456,952)

Term currencies 8,713,824 (560,821) (442,958) 10,053,226 (967,623) (581,870) 8,162,469 (1,182,276) (752,966)

Term commodities 22,753 (1,719) (1,578) 5,706 (1,014) (268) 11,690 (1,062) (4,404)

Option market

Purchase commitments -

long position 3,187 50 8 244 15 -- 1,499 70 52

Foreign currency 3,187 50 8 -- -- -- -- -- --

Shares -- -- -- -- -- -- 467 38 38

Commodities -- -- -- 244 15 -- 1,032 32 14

Sale commitments - long

position 202,044 319,543 199,350 194,039 285,472 193,414 290,521 362,739 289,240

Foreign currency 2,213 63 150 573 25 67 1,138 13 86

Shares 199,831 319,480 199,200 193,333 285,437 193,333 289,148 362,715 289,148

Commodities -- -- -- 133 10 14 235 11 6

Purchase commitments -

short position 243,151 (19,945) (23,043) 228,388 (19,787) (30,500) 264,003 (21,211) (32,907)

Foreign currency 28,365 (1,340) (599) 67,646 (2,518) (134) 103,997 (3,933) (599)

Bovespa index 23,410 (900) (1,330) -- -- -- -- -- --

Interbank deposit 2,024 (9) -- 160,486 (17,244) (30,366) 151,550 (16,827) (31,965)

IPCA 167,204 (16,979) (18,719) -- -- -- -- -- --

Shares 21,620 (697) (2,380) -- -- -- 5,862 (334) (245)

Commodities 528 (20) (15) 256 (25) -- 2,594 (117) (98)

Sale commitments - short

position 225,351 (1,519) (2,454) 16,979 (306) (156) 20,360 (425) (170)

Foreign currency -- -- -- 7,285 (161) (42) 8,398 (186) (92)

Bovespa index 1,752 (57) -- -- -- -- -- -- --

Interbank deposit 217,617 (1,367) (2,314) -- -- -- -- -- --

Shares 580 (14) -- -- -- -- 5,718 (119) (2)

Commodities 5,402 (81) (140) 9,694 (145) (114) 6,244 (120) (76)

Swaps contracts

Asset position 8,613,315 493,116 471,241 8,501,031 1,131,352 1,128,122 12,178,274 1,906,700 1,896,906

Interbank deposits 2,420,879 262,968 249,841 4,328,151 841,661 837,366 5,517,426 1,012,936 957,662

Foreign currency 5,569,296 72,105 62,135 3,933,371 283,274 282,439 6,322,593 846,579 893,845

Pre-fixed 373,140 22,181 31,395 239,509 6,417 8,317 304,952 46,250 44,756

IPCA 250,000 135,862 127,870 -- -- -- 33,303 935 643

Liability position 6,360,625 (543,860) (535,992) 10,748,833 (1,078,089) (1,190,214) 10,356,812 (1,052,947) (1,033,071)

Interbank deposits 2,056,864 (209,575) (198,893) 2,565,720 (157,851) (152,659) 3,132,914 (233,903) (203,701)

Foreign currency 3,615,216 (333,327) (311,484) 7,831,015 (915,496) (1,026,088) 6,974,222 (814,628) (819,817)

Pre-fixed 489,654 (1,858) (15,837) 352,098 (4,742) (11,467) 50,785 (1,628) (1,332)

IPCA 198,891 900 (9,778) -- -- -- 198,891 (2,788) (8,221)

Other Derivatives (1)

Asset position

Foreign currency 1,946,854 31,062 22,928 3,258,027 42,868 37,328 1,958,724 24,722 21,930

Liability position

Foreign currency 2,372,866 (50,557) (46,679) 2,735,958 (83,191) (67,383) 3,242,821 (30,636) (19,525)

(1) Related to transactions carried out in the Forex market abroad, recorded as currency contracts without physical delivery, only financial settlement to Non Deliverable Forwards (NDF) which object is an exchange rate of a specific currency and is traded in the over-the-counter (OTC) market.


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32

d.2) Breakdown of the derivatives portfolio by maturity (notional value)

Maturity in days

0 to 30 31 to 180 181 to 360 More than 360 Sep 30, 2017 Dec 31, 2016 Sep 30, 2016

Futures 841,748 6,129,823 1,662,659 2,929,613 11,563,843 14,785,249 14,767,547

Forwards 4,107,560 6,086,185 1,966,479 969,990 13,130,214 14,531,295 15,854,805

Options 37,931 257,272 137,933 240,597 673,733 439,650 576,383

Swaps 790,447 5,733,425 5,085,279 3,364,789 14,973,940 19,249,864 22,535,086

Other 592,957 3,510,067 168,819 47,877 4,319,720 5,993,985 5,201,545

d.3) Breakdown of the derivative portfolio by trading market and counterparty (notional value on September 30, 2017)

Futures Forwards Option market Swaps Other

Stock Exchange

B3 11,335,762 -- 227,961 -- --

Abroad 228,081 -- -- -- --

Over-the-counter

Financial institutions -- 2,249,046 -- 13,169,874 4,319,720

Clients -- 10,881,168 445,772 1,804,066 --

d.4) Breakdown of margin given as guarantee for transactions with derivative financial instruments

Sep 30, 2017 Dec 31, 2016 Sep 30, 2016


Total 1,601,997 1,587,775 1,321,682

d.5) Portfolio of derivatives designated as hedge accounting

Sep 30, 2017 Dec 31, 2016 Sep 30, 2016

Market risk hedge

Hedging instruments

Assets 199,201 555,105 639,508

Swaps -- 361,772 350,360

Options 199,201 193,333 289,148

Hedged items

Assets 223,421 197,585 180,721

Securities 223,421 197,585 180,721

Liabilities -- (361,623) (350,429)

Other liabilities -- (361,623) (350,429)

In order to hedge against possible fluctuations in the interest and exchange rates on its securities and foreign

investments, the Bank used a swap until July/2017 (cross currency interest rate swaps) to hedge a foreign funding and

use option contracts to offset the risks arising from market variations some actions. Cited hedges were assessed as

effective , in accordance with the provisions of Central Bank Circular No. 3,082 / 2002 , which require evidence of hedge

effectiveness is the range of 80 % to 125 %:

d.6) Income gains and losses with hedging instruments and hedged items


Hedged items losses (48,866) -- (48,866) 77,179

Hedging instruments gains 52,829 -- 52,829 (77,001)

Net effect 3,963 -- 3,963 178

Hedge items gains -- 61,144 59,150 86,980

Hedging instruments losses -- (56,461) (65,582) (82,297)

Net effect -- 4,683 (6,432) 4,683


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33

d.7) Derivative financial instruments segregated by current and non-current

Sep 30, 2017 Dec 31, 2016 Sep 30, 2016

Current Non-current Current Non-current Current Non-current

Assets

Forwards 755,713 1,640 232,887 20,812 759,748 17,394

Options 199,358 -- 193,414 -- 144 289,148

Swaps 302,392 168,849 753,996 374,126 1,439,868 457,038

Other Derivatives 18,109 4,819 32,921 4,407 19,138 2,792

Total 1,275,572 175,308 1,213,218 399,345 2,218,898 766,372

Liabilities

Forwards (1,011,775) (99,683) (482,991) (99,147) (1,213,659) (663)

Options (18,234) (7,263) (1,498) (29,158) (2,827) (30,250)

Swaps (410,991) (125,001) (540,564) (649,650) (510,316) (522,755)

Other Derivatives (42,927) (3,752) (64,291) (3,092) (18,095) (1,430)

Total (1,483,927) (235,699) (1,089,344) (781,047) (1,744,897) (555,098)

e) Income from derivative financial instruments


Swaps 14,009 129,556 156,286 1,205,558

Forwards (374,298) (25,771) (531,222) (1,709,405)

Options 49,866 (53,014) 18,609 (70,665)

Futures (368,775) (207,219) (455,087) (1,113,379)

Other Derivatives 19,689 22.051 (43,369) (59,753)

Total (659,509) (134.397) (854,783) (1,747,644)

9 - INTERBANK ACCOUNTS

a) Payments and receipts pending settlement

Sep 30, 2017 Dec 31, 2016 Sep 30, 2016

Assets

Rights against other participants of settlement systems (1)

Bank checks and other instruments 1,509,864 3,513 1,719,980

Documents sent by other participants 1,651,520 -- 2,040,010

Total 3,161,384 3,513 3,759,990

Current assets 3,161,384 3,513 3,759,990

Liabilities

Obligations to other participants of settlement systems (1)

Remitted receipts 1,922,710 -- 2,119,185

Bank checks and other instruments 593,266 -- 1,112,433

Other receipts 8,500 1,075 7,197

Total 2,524,476 1,075 3,238,815

Current liabilities 2,524,476 1,075 3,238,815

(1) There was no operation of the service of clearing checks and other securities on December 31, 2016.


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34

b) Restricted deposits

Sep 30, 2017 Dec 31, 2016 Sep 30, 2016

Compulsory deposits with Banco Central do Brasil 69,441,849 63,451,094 63,636,925

Additional reserve requirements on deposits -- 13,958,774 14,463,498

Savings deposit requirements 33,066,867 23,919,390 23,780,035

Demand deposit requirements 12,315,410 11,443,864 9,996,903

Time deposit requirements 16,327,109 11,974,996 13,339,088

Resources for microfinance 265,831 261,744 174,531

Resources for rural credit (1) 7,408,359 1,874,492 1,874,492

Other 58,273 17,834 8,378

Housing Finance System 2,714,627 2,557,791 2,666,908

Compensation of wage changes fund 3,086,903 2,925,091 2,872,468

Provision for losses (382,578) (380,953) (215,977)

Other 10,302 13,653 10,417

National Treasury - rural credit 52,822 56,868 51,633

Rural credit - Proagro 260,709 247,558 232,935

Provision for losses (207,888) (190,690) (181,302)

Total 72,209,298 66,065,753 66,355,466

Current assets 72,209,073 66,063,844 66,355,457

Non-current assets 225 1,909 9

(1) Refers to funds deposited with the Banco Central do Brasil, because they were not lent on to rural credits, according to Resolution CMN No. 3,745/2009. The special supply funds were provided by Banco Central do Brasil and recorded in borrowings and onlendings (Note 19.b).

c) Reserve Requirements

3rd quarter/2017 3rd quarter/2016 Jan 1 to Sep 30,

2017 Jan 1 to Sep 30,

2016

Deposits linked to the Banco Central do Brasil 889,317 1,455,126 3,116,275 4,196,348

Additional reserve requirements on deposits 15,968 497,531 687,920 1,439,581

Savings deposit requirements 495,611 494,589 1,317,056 1,462,055

Time deposit requirements 374,096 463,006 1,107,657 1,294,712

Resources for rural credit 3,642 -- 3,642 --

Deposits linked to real estate 55,547 114,303 148,927 208,996

Deposits linked to National Treasury - rural credit 13,159 12,715 37,042 35,035

Losses on restricted deposits 781 (47,426) (18,934) (68,012)

Total 958,804 1,534,718 3,283,310 4,372,367


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10 - LOANS

a) Portfolio by modality

Sep 30, 2017 Dec 31, 2016 Sep 30, 2016

Loans 578,056,209 599,761,791 619,021,726

Loans and discounted credit rights 200,554,135 214,073,031 227,931,417

Financing 162,686,818 177,662,144 185,839,997

Rural financing 160,024,620 153,176,643 151,220,303

Real estate financing 54,268,971 54,237,642 53,389,991

Financing of infrastructure and development 141 244 277

Loans sold under assignment (1) 521,524 612,087 639,741

Other receivables with loan characteristics 50,865,104 53,225,445 52,945,885

Credit card operations 22,921,274 23,510,421 21,448,278

Advances on exchange contracts (2) 14,255,731 13,714,072 16,117,300

Other receivables purchase under assignment (3) 12,419,074 14,983,588 14,371,916

Guarantees honored 604,775 494,543 500,904

Other 664,250 522,821 507,487

Leasing transactions 450,501 604,196 670,278

Total loan portfolio 629,371,814 653,591,432 672,637,889


(Allowance for loan losses - loans) (36,598,450) (34,838,451) (36,571,469)

(Allowance for other losses - other receivables) (4) (1,180,837) (1,190,296) (869,624)

(Allowance for lease losses - leasing transactions) (26,447) (41,373) (72,462)

Total loan portfolio net of provisions 591,566,080 617,521,312 635,124,334

(1) Loans assigned with retention of the risks and benefits of the financial assets.

(2) Advances on exchange contracts are classified as a deduction to other liabilities.

(3) Loans acquired with retention of the risks and benefits by the assignor of the financial assets. On September 30, 2016, the premiuns on Credits linked to transactions acquired in assignment were reclassified in the group Other receivables with loan characteristics, in the amount of R$ 1,413,254 thousand.

(4) Includes the amount of R$ 12,105 thousand as of September 30, 2017 (R$ 10,153 thousand as of December 31, 2016 and R$ 9,629 thousand as of September 30, 2016) related to allowance for interbank onlendings losses.

b) Loans and leasing transactions income


Loans income 18,953,291 26,989,034 61,624,738 71,435,453

Loans and discounted credit rights 10,030,208 14,784,019 31,195,319 43,780,712

Rural financing 2,686,718 2,464,509 7,632,200 6,905,015

Real estate financing 2,079,686 1,658,699 5,444,628 4,135,075

Equalization of rates - agricultural crop- Law 8,427/1992

1,184,238 1,706,458 3,984,785 4,505,531

Financing 1,130,694 3,903,963 7,346,313 4,436,363

Recovery of loans previously written-off as loss (1)

1,093,612 967,719 3,443,883 3,212,373

Export financing 757,139 1,148,656 2,461,156 3,471,431

Guarantees honored 6,602 10,045 68,718 85,653

Income from foreign currency financing (2)

(34,919) 327,388 (13,974) 832,587

Other 19,313 17,578 61,710 70,713

Leasing transactions income (Note 10.i)

61,990 83,601 199,701 261,526

Total 19,015,281 27,072,635 61,824,439 71,696,979

(1) The amount of R$ 14,396 thousand in the 3rd quarter/2017 (with impact on the income of R$ 7,550 thousand), R$ 61,018 thousand in the 3rd quarter/2016 (with impact on the income of R$ 31,999 thousand), R$ 65,749 thousand in the period from Jan 01,2017 to Sep 30,2017 (with impact on the income of R$ 34,481 thousand) and R$ 139,860 thousand in the period from Jan 01,2016 to Sep 30,2016 (with impact on the income of R$ 73,346 thousand) was received from assignments without recourse of written off credits to entities outside the financial system, in accordance with CMN Resolution 2,836/2001. The book value of these transactions were R$ 1,868 thousand, R$ 37,359 thousand, R$ 97,099 thousand and R$ 108,434 thousand, respectively.

(2) The debit balances presented arise from the negative exchange variation of the period (the appreciation of the Real against the Dollar).


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c) Breakdown of the loan portfolio by sector

Sep 30, 2017 % Dec 31, 2016 % Sep 30, 2016 %

Public sector 73,150,070 11.6 74,322,898 11.4 74,974,981 11.1

Public administration 37,432,046 5.9 38,405,221 5.9 38,226,148 5.7

Oil sector 24,919,581 4.0 24,103,485 3.7 24,823,617 3.7

Electricity 8,660,569 1.4 9,621,700 1.5 10,541,709 1.6

Services 975,731 0.2 1,018,844 0.2 274,633 --

Other activities 1,162,143 0.1 1,173,648 0.1 1,108,874 0.1

Private sector (1) 556,221,744 88.4 579,268,534 88.6 597,662,908 88.9

Individuals 328,278,451 52.2 322,781,095 49.4 319,848,558 47.6

Companies 227,943,293 36.2 256,487,439 39.2 277,814,350 41.3

Agribusiness of plant origin 29,561,844 4.7 28,655,250 4.4 29,916,657 4.4

Mining and metallurgy 27,348,742 4.3 31,000,025 4.7 33,527,066 5.0

Transportation 17,846,329 2.9 19,229,779 2.9 19,432,601 2.9

Services 17,534,594 2.8 16,610,111 2.5 17,773,921 2.6

Real estate agents 15,125,227 2.4 18,187,443 2.8 18,895,995 2.8

Agribusiness of animal origin 14,638,424 2.3 15,365,491 2.4 15,294,882 2.3

Automotive sector 14,465,777 2.3 16,596,819 2.5 19,081,311 2.8

Fuel 11,039,090 1.8 12,514,748 1.9 16,262,112 2.4

Electricity 10,877,273 1.7 15,781,797 2.4 16,519,167 2.5

Retail commerce 9,633,470 1.5 12,853,623 2.0 14,709,433 2.2

Specific activities of construction 7,673,062 1.2 9,178,884 1.4 10,077,606 1.5

Agricultural inputs 6,868,617 1.1 7,499,071 1.1 8,051,446 1.2

Textile and clothing 6,310,129 1.0 7,699,639 1.2 8,695,547 1.3

Electronics 5,919,880 0.9 6,587,528 1.0 6,570,063 1.0

Wholesale and various industries 5,328,788 0.8 5,899,556 0.9 6,584,470 1.0

Chemical 5,272,578 0.8 5,805,797 0.9 5,990,560 0.9

Financial services 4,345,614 0.7 4,690,779 0.7 5,271,265 0.8

Woodworking and furniture market 4,270,695 0.7 5,134,764 0.8 5,765,181 0.9

Pulp and paper 4,080,184 0.6 5,674,382 0.9 6,727,020 1.0

Telecommunications 3,607,063 0.6 3,878,719 0.6 3,856,340 0.6

Heavy construction 3,300,767 0.5 4,158,241 0.6 5,013,228 0.7

Other activities 2,895,146 0.6 3,484,993 0.6 3,798,479 0.5

Total 629,371,814 100.0 653,591,432 100.0 672,637,889 100.0

(1) The amounts disclosed under individuals include loans to the sectors of agribusiness, housing and other sectors of economic activity carried out with individuals. To the highlighted economic sectors, operations are exclusive to companies.


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d) Loan portfolio by risk level and maturity

AA A B C D E F G H Sep 30, 2017 Dec 31, 2016 Sep 30, 2016

Loans not past due

Installments falling due

01 to 30 12,816,475 6,420,738 12,922,474 7,218,411 354,384 371,286 54,035 87,408 301,089 40,546,300 40,579,377 44,826,259

31 to 60 11,260,455 3,675,599 4,731,203 2,155,786 180,490 274,511 25,394 21,249 94,691 22,419,378 21,437,583 28,474,298

61 to 90 13,047,395 3,703,043 4,567,377 1,937,725 203,252 333,138 27,207 38,344 381,003 24,238,484 17,217,798 25,834,117

91 to 180 21,256,620 8,258,880 9,608,127 5,746,605 526,696 467,912 54,765 329,341 176,649 46,425,595 52,889,238 50,559,056

181 to 360 43,075,167 8,218,734 22,563,851 7,493,979 1,021,129 1,388,781 181,545 98,680 546,112 84,587,978 89,815,855 89,303,615

More than 360 209,604,626 34,695,457 75,371,267 35,324,486 5,941,935 7,271,467 2,120,402 1,673,091 4,951,846 376,954,577 397,073,805 397,070,750

Installments overdue

Up to 14 days 110,367 887,436 308,432 180,270 49,626 27,767 6,224 7,546 57,293 1,634,961 2,954,178 1,418,641

Other (1) 396,869 -- -- -- -- -- -- -- -- 396,869 400,601 394,754

Subtotal 311,567,974 65,859,887 130,072,731 60,057,262 8,277,512 10,134,862 2,469,572 2,255,659 6,508,683 597,204,142 622,368,435 637,881,490

Loans past due

Installments falling due

01 to 30 -- -- 38,597 219,895 101,804 101,725 71,522 108,123 514,635 1,156,301 1,234,254 1,380,957

31 to 60 -- -- 27,212 85,321 65,164 633,959 35,951 46,219 226,326 1,120,152 683,730 756,196

61 to 90 -- -- 25,245 77,619 63,589 55,162 38,594 36,701 220,282 517,192 528,503 676,748

91 to 180 -- -- 56,064 182,564 170,099 141,276 99,846 98,157 573,561 1,321,567 1,603,229 1,886,027

181 to 360 -- -- 110,931 382,763 345,356 325,379 173,636 181,371 1,039,867 2,559,303 2,980,962 3,184,698

More than 360 -- -- 1,191,249 2,215,390 1,759,023 2,042,899 1,470,107 1,239,403 6,846,602 16,764,673 13,592,170 13,646,556

Installments overdue

01 to 14 -- -- 5,935 39,217 46,989 32,907 22,552 18,057 100,675 266,332 300,298 342,636

15 to 30 -- -- 155,749 145,327 84,062 41,958 33,841 26,635 133,449 621,021 1,016,432 983,530

31 to 60 -- -- 26,527 421,126 289,012 94,520 50,787 52,275 276,919 1,211,166 1,439,130 1,536,369

61 to 90 -- -- 11 29,265 304,232 90,286 83,590 67,769 269,478 844,631 1,352,492 1,149,495

91 to 180 -- -- 14 20,086 55,218 241,622 301,946 441,128 1,027,635 2,087,649 2,909,284 2,820,661

181 to 360 -- -- 29 35 150 64,154 100,810 190,690 2,461,124 2,816,992 3,158,831 3,189,964

More than 360 -- -- 23 104 68 20,070 135,456 172,328 552,644 880,693 423,682 3,202,562

Subtotal -- -- 1,637,586 3,818,712 3,284,766 3,885,917 2,618,638 2,678,856 14,243,197 32,167,672 31,222,997 34,756,399

Total 311,567,974 65,859,887 131,710,317 63,875,974 11,562,278 14,020,779 5,088,210 4,934,515 20,751,880 629,371,814 653,591,432 672,637,889

(1) Transactions with third party risk linked to government funds and programs, primarily Pronaf, Procera, FAT, BNDES and FCO. They include 14,015 thousand of overdue installments, which comply with rules defined in each program for reimbursement by the program managers and, therefore, do not represent a credit risk for the Bank.


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e) Allowance for loan losses by risk level

Level of risk

% Minimum provision

Sep 30, 2017 Dec 31, 2016 Sep 30, 2016

Value of loans Minimum required

allowance Supplementary

allowance (1) Total Value of loans

Minimum required allowance

Supplementary allowance (1)

Total Value of loans Minimum required

allowance Total

AA 311,567,974 -- -- -- 302,706,394 -- -- -- 329,985,222 -- --

A 0.5 65,859,887 329,299 39,715 369,014 104,838,051 524,190 25,164 549,354 129,040,116 645,201 645,201

B 1 131,710,317 1,317,103 487,491 1,804,594 118,671,959 1,186,720 256,585 1,443,305 116,194,247 1,161,942 1,161,942

C 3 63,875,974 1,916,279 1,106,091 3,022,370 67,284,778 2,018,543 1,039,438 3,057,981 38,677,689 1,160,331 1,160,331

D 10 11,562,278 1,156,228 131,518 1,287,746 14,981,314 1,498,131 213,709 1,711,840 9,311,001 931,100 931,100

E 30 14,020,779 4,206,234 299,817 4,506,051 16,064,403 4,819,321 146 4,819,467 16,845,088 5,053,526 5,053,526

F 50 5,088,210 2,544,105 64,998 2,609,103 5,822,600 2,911,300 -- 2,911,300 5,534,643 2,767,322 2,767,322

G 70 4,934,515 3,454,161 815 3,454,976 5,483,533 3,838,473 -- 3,838,473 4,185,834 2,930,084 2,930,084

H 100 20,751,880 20,751,880 -- 20,751,880 17,738,400 17,738,400 -- 17,738,400 22,864,049 22,864,049 22,864,049

Total 629,371,814 35,675,289 2,130,445 37,805,734 653,591,432 34,535,078 1,535,042 36,070,120 672,637,889 37,513,555 37,513,555

(1) Refers to the supplementary allowance over and above the minimum required by CMN Resolution 2,682/1999. This provision is established based on the internal scale of risk level.


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f) Changes in allowance for loan losses

Includes loans, leases and other receivables with characteristics of credit.


Opening balance 37,881,410 36,967,684 36,070,120 33,577,000

Addition/(reversal) 6,257,185 6,643,672 19,628,388 20,835,339

Minimum required allowance 5,977,664 6,643,672 19,032,985 24,063,837

Additional allowance (1) -- -- -- (3,228,498)

Supplementary allowance (2) 279,521 -- 595,403 --

Exchange fluctuation - foreign allowances (41,170) 45,609 56,864 (145,949)

Write off (6,291,691) (6,143,410) (17,949,638) (16,752,835)

Closing balance 37,805,734 37,513,555 37,805,734 37,513,555

(1) Refers to the additional allowance over and above the minimum required by CMN Resolution 2,682/1999. This provision is established based on the experience of Management, by making projections for the loan portfolio, based on the history of default of operations.

(2) Refers to the supplementary allowance over and above the minimum required by CMN Resolution 2,682/1999. This provision is established based on the internal scale of risk level.

g) Changes in allowance for other loan losses

Includes provisions for other receivables without characteristics of credit.


Opening balance 1,555,497 1,593,627 1,566,638 1,287,621

Addition/(reversal) 57,035 (103,216) 67,395 (107,446)

Exchange fluctuation - foreign allowances 141 156 (1,972) (1,603)

Write-off/other adjustments (1) (2,817) (10,397) (22,205) 301,598

Closing balance 1,609,856 1,480,170 1,609,856 1,480,170

(1) Includes in the period from Jan 01,2016 to Sep 30,2016 the amount of R$ 239,998 thousand, which refers to the allowance for losses on not registered securities at CETIP, reclassified to the Other receivables grouping, according to Resolution CMN 1,779/1990.

h) Leasing portfolio by maturity

Sep 30, 2017 Dec 31, 2016 Sep 30, 2016

Up to 1 year (1) 196,566 269,250 309,938

More than 1 year and up to 5 years 253,336 334,612 357,179

Over 5 years 599 334 3,161

Total present value 450,501 604,196 670,278

(1) Includes amounts related to overdue installments.

i) Income from leasing transactions


Lease revenue 61,990 83,601 199,701 261,526

Leasing 61,990 83,601 199,701 261,526

Lease expenses (36,698) (46,681) (114,703) (149,636)

Leasing (36,664) (46,631) (114,606) (149,461)

Loss on disposal of leased assets (34) (50) (97) (175)

Total 25,292 36,920 84,998 111,890


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j) Concentration of loans

Sep 30, 2017 % of credit portfolio

Dec 31, 2016 % of credit portfolio

Sep 30, 2016 % of credit portfolio

Largest debtor 25,615,736 4.1 24,759,930 3.8 25,389,541 3.8

10 largest debtors 78,232,777 12.4 82,224,321 12.6 85,273,243 12.7

20 largest debtors 103,945,219 16.5 109,099,432 16.7 114,039,002 17.0

50 largest debtors 139,157,908 22.1 146,075,455 22.3 155,684,383 23.1

100 largest debtors 162,422,725 25.8 170,529,116 26.1 181,700,994 27.0

k) Renegotiated credits


Credits renegotiated during the period (1)

12,103,551 9,191,167 35,590,507 30,927,109

Renegotiated when past due (2) 1,869,962 2,757,887 7,823,512 11,395,499

Renovated (3) 10,233,589 6,433,280 27,766,995 19,531,610

Changes on credits renegotiated when past due

Opening balance 27,042,478 25,049,740 27,086,224 19,652,990

Contracts (2) 1,869,962 2,757,887 7,823,512 11,395,499

Interest (received) and appropriated (772,943) (743,642) (2,845,476) (2,170,856)

Write off (2,272,620) (1,369,975) (6,197,383) (3,183,623)

Closing balance (4) 25,866,877 25,694,010 25,866,877 25,694,010

Allowance for loan losses of the portfolio renegotiated when past due

12,415,292 10,784,367

(%) Allowance for loan losses on the portfolio

48.0% 42.0%

90 days default of the portfolio renegotiated when past due

6,360,211 6,369,622

(%) Portfolio default 24.6% 24.8%

(1) Represents the balance of all installments (past due and future) of loans renegotiated during the period using the internet, automated teller machines (ATM) or branch network.

(2) Renegotiated credit under debt composition as a result of payment delay by the clients.

(3) Renegotiated current credits (i.e. not past due) in the form of the extension or renewal of the credit or the granting of new loans for partial or full settlement of previous contracts or any other type of agreement that changes the maturity or the payment terms, originally agreed.

(4) Includes the amount of R$ 77,868 thousand (R$ 98,638 thousand as of September 30, 2016) related to renegotiated rural credits. The amount of R$ 8,095,172 thousand (R$ 5,825,206 thousand as of September 30, 2016), related to deferred credits from rural portfolio governed by specific legislation, is not included.

l) Supplementary information

Sep 30, 2017 Dec 31, 2016 Sep 30, 2016

Undrawn credit lines 119,708,579 118,745,942 129,272,012

Guarantees provided (1) 4,430,273 6,445,216 6,286,743

Confirmed export credit 213,670 218,348 215,312

Contracted credit opened for import 206,891 229,143 325,931

Linked resources 2,794,439 4,523,775 4,516,880

(1) For these operations, the Bank maintains an allowance recorded in Other liabilities - sundry, (Note 20.e) totaling R$ 332,350 thousand (R$ 442,300 thousand as of December 31, 2016 and R$ 582,377 thousand as of September 30, 2016) calculated in accordance with Resolution CMN 2,682/1999.


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m) Loans by line of credit from Fund for Workers’ Assistance (Fundo de Amparo ao Trabalhador – FAT)

Lines of FAT TADE (1) Sep 30, 2017 Dec 31, 2016 Sep 30, 2016

Loans and discounted securities 1,114,505 770,150 782,601

Proger Urbano Capital de Giro 15/2005 and 01/2016 1,106,791 762,601 772,595

FAT Turismo - Capital de Giro 02/2012 7,714 7,549 10,006

Financing 2,384,877 2,800,917 2,925,744

Proger Urbano Investimento 18/2005 1,972,628 2,302,862 2,409,466

FAT Taxista 02/2009 318,183 352,767 361,474

FAT Turismo - Investimento 01/2012 73,684 100,930 109,424

Proger Exportação 27/2005 20,382 44,292 45,380

Proger Urbano Empreendedor Popular 01/2006 -- 66 --

Rural financing 45,668 66,570 75,531

Pronaf Investimento 05/2005 37,961 55,267 62,627

Proger Rural Investimento 13/2005 5,714 8,490 9,808

Pronaf Custeio 04/2005 1,730 2,298 2,421

Proger Rural Custeio 02/2006 263 454 535

Giro Rural - Aquisição de Títulos 03/2005 -- 61 140

Total 3,545,050 3,637,637 3,783,876

(1) TADE - Allocation Term of Special Deposits.

11 - FOREIGN EXCHANGE PORTFOLIO

a) Breakdown

Sep 30, 2017 Dec 31, 2016 Sep 30, 2016

Other receivables

Exchange purchases pending settlement 15,244,200 16,896,594 17,855,703

Bills of exchange and time drafts in foreign currency 39,107 40,232 40,553

Receivables from sales of foreign exchange 10,711,076 20,428,130 21,270,266

(Advances received in national/foreign currency) (9,694,507) (20,178,005) (20,485,536)

Foreign currency receivables 499 887 890

Income receivable on advances granted and on financed imports 267,293 283,707 298,167

Total 16,567,668 17,471,545 18,980,043

Current assets 16,567,668 17,188,751 18,683,617

Non-current assets -- 282,794 296,426

Other liabilities

Exchange sales pending settlement 10,338,242 18,739,249 19,720,852

(Financed imports) (488) (4,561) (10,089)

Exchange purchase liabilities 15,451,003 17,513,179 19,063,462

(Advances on exchange contracts) (13,745,932) (13,115,132) (15,389,346)

Foreign currency payables 49,874 54,017 54,832

Unearned income on advances granted 11,401 14,537 10,250

Total 12,104,100 23,201,289 23,449,961

Current liabilities 7,740,131 17,879,212 17,423,634

Non-current liabilities 4,363,969 5,322,077 6,026,327

Net foreign exchange portfolio 4,463,568 (5,729,744) (4,469,918)

Off balance accounts

Credit opened for imports 234,647 270,106 748,955

Confirmed export credit 213,670 218,348 215,312


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b) Foreign exchange results


Exchange income 1,618,464 2,182,349 5,340,566 12,381,146

Exchange expenses (1,479,920) (1,766,217) (4,751,997) (10,418,112)

Foreign exchange result 138,544 416,132 588,569 1,963,034

12 - OTHER RECEIVABLES

a) Specific credits

Sep 30, 2017 Dec 31, 2016 Sep 30, 2016

Extension of rural credits - National Treasury 408,177 377,698 366,319

Other 536 541 543

Total 408,713 378,239 366,862

b) Sundry

Sep 30, 2017 Dec 31, 2016 Sep 30, 2016

Deferred tax asset (Note 24.e) 42,152,837 42,883,504 44,656,538

Sundry debtors from escrow deposits - contingencies (Note 27.g.1) 36,447,321 33,121,209 32,272,779

Credit card operations (Note 10.a) 22,921,274 23,510,421 21,448,278

Sundry debtors from escrow deposits - lawsuit (Note 27.h.1) 18,043,846 17,431,080 17,180,154

Credit linked to acquired operations (Note 10.a) (1) 12,419,074 14,983,588 14,371,916

Fund of allocation of surplus - Previ (Note 26.f) 9,613,185 9,562,010 9,585,995

Income tax and social contribution to offset 10,257,258 12,813,584 12,647,491

Receivables - other 6,683,703 6,268,085 6,172,763

Sundry debtors - domestic 2,128,726 2,779,446 3,623,499

National Treasury - interest rate equalization - agricultural crop - Law 8,427/1992

1,183,582 3,418,200 1,700,357

Receivables - non-financial companies 984,219 1,482,045 1,502,723

Sundry debtors - foreign 204,884 238,213 335,233

Receivables - National Treasury (2) 1,085,868 940,330 965,645

Receivables – ECT – Banco Postal 692,557 854,546 827,645

Rights for acquisition of royalties and government credits 538,035 661,559 1,076,261

Advances to cards transactions processing’s companies -- 22,583 341,844

Receivables acquisition 409,830 958,678 2,895,409

Salary advances and other advances 215,506 1,732,680 216,348

Actuarial assets (Note 26.e) 162,754 151,828 190,806

Sundry debtors from escrow deposits - other 68,837 74,103 97,374

Sundry debtors for purchasing assets 5,391 12,674 22,814

Other 355,282 324,871 670,668

Total 166,573,969 174,225,237 172,802,540

Current assets 99,816,340 107,887,734 101,777,596

Non-current assets 66,757,629 66,337,503 71,024,944

(1) Refers to the portfolios of payroll loans and vehicle financing granted to individuals, acquired by the Bank through assignments with full recourse to the transferor, accounted for in accordance with CMN Resolution 3,533/2008.

(2) Refers mainly to amounts from subsidies in operations with MCR 6-2 resources, MCR 6-4 (Rural credit manual) and they are supported by specific legislation, like the CMN resolutions, the Program of Bahia's Cocoa Farming Recovery (CMN Resolution No. 2,960/2002) and the regional funds (FDNE, FDA and FDCO).


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13 - OTHER ASSETS

Sep 30, 2017 Dec 31, 2016 Sep 30, 2016

Assets not for own use 300,548 277,417 271,542

Assets in special regime 175,730 172,116 170,516

Real estate 52,047 41,849 45,939

Residential properties 59,688 40,125 26,862

Machinery and equipment 2,771 3,138 3,130

Vehicles 434 508 498

Other 9,878 19,681 24,597

Materials in stock 65,809 61,885 57,832

Subtotal 366,357 339,302 329,374

(Impairment) (1) (159,858) (137,564) (127,318)


Personnel expenses and other administrative expenses 167,258 171,218 156,279

Entities abroad 85,913 74,787 77,856

Tax expenses 19,944 31 16,540

Unearned insurance premiums 11,934 14,323 16,697

Rent 5,708 5,718 5,741

Promotion and public relations -- -- 11,486

Premiums for purchased payroll credits (2) 418 355 1,181

Other 24,910 3,201 4,291

Total 522,584 471,371 492,127

Current assets 504,971 454,562 475,423

Non-current assets 17,613 16,809 16,704

(1) The Bank recognized, in the 3rd quarter/2017, allowance expenses for impairment losses of assets not in use in the amount of R$ (11,313) thousand (allowance expenses in the amount of R$ (2,276) thousand in the 3rd quarter/2016).

(2) The amounts are amortized over the maturity of the installments of loans acquired from other financial institutions.


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44

14 - INVESTMENTS

a) Changes in associates and joint ventures

Share capital

Adjusted shareholders’

equity

Net income/(loss) - Jan 1 to Sep 30,

2017

Number of shares (in thousands) Ownership

interest in share capital %

Book value Changes - Jan 1 to Sep 30, 2017 Book value Equity income

Common Preferred Dec 31, 2016 Dividends Other events (1) Equity income Sep 30, 2017 Sep 30, 2016 Jan 1 to Sep

30, 2016

Domestic 16,631,072 (2,648,275) (350,510) 3,019,688 16,651,975 16,189,792 3,179,664

Banco Votorantim S.A. (2) 8,130,372 8,777,097 425,876 43,114,693 9,581,043 50.00% 4,212,970 -- (37,337) 212,758 4,388,391 4,207,493 161,320

Cateno Gestão de Contas de Pagamento S.A. (3)

414,000 12,158,008 472,108 2,397,200 1,198,600 30.00% 3,654,804 (149,034) -- 141,632 3,647,402 3,628,724 118,369

Cielo S.A. (4) 4,700,000 9,378,738 2,977,586 648,600 -- 28.68% 2,604,974 (287,260) (146,913) 844,377 3,015,178 2,463,410 842,135

Brasilprev Seguros e Previdência S.A. (4)(5)

1,193,539 2,605,941 760,923 572 1,145 75.00% 1,775,368 (417,555) (36,249) 610,803 1,932,367 1,901,699 556,715

Mapfre BB SH2 Participações S.A. (4)(5) 1,968,380 3,431,865 86,606 369,163 384,231 50.00% 1,786,095 (94,435) (109,003) (43,278) 1,539,379 1,764,322 99,101

BB Mapfre SH1 Participações S.A. (4)(5) 2,050,198 2,175,620 1,147,510 1,039,908 2,079,400 74.99% 2,138,636 (1,380,939) 5,015 868,917 1,631,629 1,798,416 937,122

Brasilcap Capitalização S.A. (4)(5) 231,264 357,379 220,606 107,989 107,989 66.66% 300,698 (209,525) -- 147,056 238,229 254,138 225,926

Other investments 2,887,992 (109,527) 32,247 237,423 3,048,135 2,886,817 238,976

Goodwill/(bargain) purchase on acquisition of investments

530,222 -- (144,930) -- 385,292 574,544 --

Unrealized results (6) (3,260,687) -- 86,660 -- (3,174,027) (3,289,771) --

Overseas 72,657 -- (20,142) (242) 52,273 113,828 --

Other equity abroad -- -- 242 (242) -- -- --

Goodwill on acquisition of investments abroad

72,657 -- (20,384) -- 52,273 113,828 --

Total investments in subsidiaries and associates

16,703,729 (2,648,275) (370,652) 3,019,446 16,704,248 16,303,620 3,179,664

(Provision for losses) (11,213) -- -- -- (11,213) (9,018) --

(1) These basically refer to the and prior fiscal year adjustments and equity valuation adjustments of available-for-sale securities and the foreign exchange variation on investments abroad. Includes the initial adoption of Resolution CMN 4.512/16, in the amount of R$ 58,275 thousand, in the Banco Votorantim S.A.

(2) Excluded unrealized result arising from transactions with the Banco do Brasil.

(3) Indirect interest of the Bank in Cateno, through its subsidiary BB Elo Cartões Participações S.A. The total share of the Bank is 50.07% (Cielo S.A, holds 70% of direct interest in Cateno).

(4) Refers to the percentage of the equity interest, considering the acquisition of shares by the invested entity held in treasury.

(5) Equity interest held by BB Seguros Participações S.A. It includes harmonization adjustments in accounting practices.

(6) Unrealized profit arising from a new strategic partnership between BB Elo Cartões Participações S.A. and Cielo S.A., forming Cateno Gestão de Contas de Pagamento S.A.


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b) Summarized financial information of associates and joint ventures. not adjusted for the equity interest percentage held by the Bank

Balance sheet

Sep 30, 2017

Brasilprev Seguros e

Previdência S.A.

Banco Votorantim S.A.

Cateno Gestão de Contas de

Pagamento S.A.

BB Mapfre SH1 Participações S.A.

Mapfre BB SH2 Participações S.A.

Cielo S.A. Other Total

Total assets 230,063,926 99,478,864 12,681,423 13,251,976 13,423,711 77,174,274 46,206,382 492,280,556

Cash and cash equivalents 3,716 101,921 2 7,037 85,672 10,091 280,075 488,514

Short-term interbank investments -- 17,903,245 668,374 -- -- 9,691 6,162,758 24,744,068

Securities and derivative financial instruments 227,787,302 26,100,870 765,233 6,437,363 4,652,367 9,659,993 10,402,213 285,805,341

Loan operations -- 41,411,739 -- -- -- -- 37,870 41,449,609

Other credits and other assets 2,052,633 12,832,499 671,231 6,400,596 8,332,968 57,954,340 10,647,381 98,891,648

Permanent assets 220,275 1,128,590 10,576,583 406,980 352,704 9,540,159 18,676,085 40,901,376

Total liabilities 227,457,985 90,701,770 523,416 11,076,355 9,991,843 67,795,536 25,768,386 433,315,291

Deposits. securities. loans. derivative financial intruments and outhers onlendings -- 68,474,595 -- -- -- 63,632,257 1,487,867 133,594,719

Other liabilities 227,457,985 22,227,175 523,416 11,076,355 9,991,843 4,163,279 24,280,519 299,720,572

Technical provisions for insurance. pension plans and capitalization 225,947,587 -- -- 8,249,245 7,566,393 -- 17,999,925 259,763,150

Subordinated debts and equity and debt hybrid securities -- 3,673,691 -- -- -- -- -- 3,673,691

Other 1,510,398 18,553,484 523,416 2,827,110 2,425,450 4,163,279 6,280,594 36,283,731

Shareholders' equity 2,605,941 8,777,094 12,158,007 2,175,621 3,431,868 9,378,738 20,437,996 58,965,265

% of Total Share 75.00% 50.00% 30.00% 74.99% 50.00% 28.68% -- --

Shareholders' equity (proportional to the equity interest) 1,954,325 4,388,547 3,647,402 1,631,498 1,715,934 2,691,895 3,801,013 19,830,614

Goodwill/(bargain) purchase on acquisition of investments (1,561) 15,283 -- -- -- 335,125 36,445 385,292

Other amounts (1) (21,958) (156) -- 131 (176,555) 323,283 (3,636,403) (3,511,658)

Balance of the investment 1,930,806 4,403,674 3,647,402 1,631,629 1,539,379 3,350,303 201,055 16,704,248

(1) It refers, mainly, to unrealized results. harmonization in accounting practices and prior fiscal year adjustments of non-financial companies to Chart of Accounts for Financial Institutions - Cosif.


3rd quarter 2017


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Statements of income

Jan 1 to Sep 30, 2017

Brasilprev Seguros e Previdência S.A.



Pagamento S.A.



Cielo S.A. Other Total

Income from financial intermediation 352,076 2,424,665 -- 412,754 331,316 490,569 3,031,530 7,042,910

Service fee income 1,768,703 383,403 2,091,182 -- 5,693 5,649,425 649,276 10,547,682

Other administrative expenses (182,557) (872,815) (685,474) (186,062) (383,565) (652,038) (877,916) (3,840,427)

Other operating income/expenses (497,429) (1,021,522) (690,597) 1,584,308 174,884 (1,364,883) 348,214 (1,467,025)

Non-operating income (2,223) 7,562 -- 299 (643) (10,285) 57,647 52,357

Result before tax 1,438,570 921,293 715,111 1,811,299 127,685 4,112,788 3,208,751 12,335,497

Tax about profit and profit sharing (626,219) (495,418) (243,075) (648,189) (41,079) (1,135,202) (686,513) (3,875,695)

Net income 812,351 425,875 472,036 1,163,110 86,606 2,977,586 2,522,238 8,459,802

% of Total Share 75.00% 50.00% 30.00% 74.99% 50.00% 28.68% -- --

Net income (proportional to the equity interest) 609,222 212,937 141,610 872,216 43,304 854,195 691,400 3,424,884

Other amounts (1) 1,581 (179) 22 (3,299) (86,582) (9,818) (307,163) (405,438)

Result in the equity method investments 610,803 212,758 141,632 868,917 (43,278) 844,377 384,237 3,019,446



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47

Balance sheet

Sep 30. 2016


Previdência S.A.



Pagamento S.A.



Neoenergia S.A. Cielo S.A. Other Total

Total assets 186,523,817 103,828,590 12,548,603 13,583,960 13,861,310 11,663,798 22,498,746 31,198,487 395,707,311

Cash and cash equivalents 5,697 175,785 4 98,256 119,493 228 13,883 236,757 650,103

Interbank investments -- 17,093,468 1,008,785 -- -- -- 634,463 608,794 19,345,510

Securities and derivative financial instruments 184,605,609 31,622,972 -- 5,985,849 4,686,801 71,820 1,861,066 17,548,204 246,382,321

Loan operations -- 41,524,188 -- -- -- -- -- -- 41,524,188

Other credits and other assets 1,712,467 12,682,324 577,623 7,105,729 8,643,028 491,523 9,622,368 10,181,334 51,016,396

Permanent assets 200,044 729,853 10,962,191 394,126 411,988 11,100,227 10,366,966 2,623,398 36,788,793

Total liabilities 183,955,140 95,412,212 452,857 11,185,929 10,331,760 1,753,431 13,914,121 24,449,520 341,454,970

Deposits. securities. loans. derivative financial intruments and outhers onlendings

-- 43,374,653 -- -- -- -- -- -- 43,374,653

Other liabilities 183,955,140 52,037,559 452,857 11,185,929 10,331,760 1,753,431 13,914,121 24,449,520 298,080,317

Technical provisions for insurance. pension plans and capitalization

182,723,662 -- -- 8,099,038 7,767,769 -- -- 19,768,009 218,358,478

Subordinated debts and equity and debt hybrid securities -- 5,192,799 -- -- -- -- -- -- 5,192,799

Other 1,231,478 46,844,760 452,857 3,086,891 2,563,991 1,753,431 13,914,121 4,681,511 74,529,040

Shareholders' equity 2,568,677 8,416,378 12,095,746 2,398,031 3,529,550 9,910,367 8,584,625 6,748,967 54,252,341

% of Total Share 75.00% 50.00% 30.00% 74.99% 50.00% 11.99% 28.70% -- --

Shareholders' equity (proportional to the equity interest) 1,926,379 4,208,189 3,628,724 1,798,283 1,764,775 1,187,966 2,464,122 2,030,456 19,008,894

Goodwill/(bargain) purchase on acquisition of investments (1,561) 76,247 -- -- -- -- 454,680 159,006 688,372

Other amounts (1) (24,679) (696) -- 133 (453) (15,373) (712) (3,351,866) (3,393,646)

Balance of the investment 1,900,139 4,283,740 3,628,724 1,798,416 1,764,322 1,172,593 2,918,090 (1,162,404) 16,303,620



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Statements of income

Jan 1 to Sep 30, 2016


Previdência S.A.



Pagamento S.A.



Neoenergia S.A. Cielo S.A. Other Total

Income from financial intermediation 396,835 2,191,318 -- 562,234 503,895 -- -- 1,146,051 4,800,333

Service fee income 1,428,572 351,288 2,034,837 -- 6,303 -- 6,081,014 106,567 10,008,581

Other administrative expenses (156,547) (884,811) (775,580) (173,384) (362,256) (12,132) (660,283) (249,572) (3,274,565)

Other operating income/expenses (378,961) (747,901) (661,463) 1,640,515 222,029 293,815 (1,229,907) 656,708 (205,165)

Non-operating income 85 8,583 -- 4,093 6,985 2,999 (22,551) 17,081 17,275

Result before tax 1,289,984 918,477 597,794 2,033,458 376,956 284,682 4,168,273 1,676,835 11,346,459

Tax about profit and profit sharing (547,648) (612,009) (203,232) (783,795) (178,754) 164 (1,263,251) (523,648) (4,112,173)

Net income 742,336 306,468 394,562 1,249,663 198,202 284,846 2,905,022 1,153,187 7,234,286

% of Total Share 75.00% 50.00% 30.00% 74.99% 50.00% 11.99% 28.70% -- --

Net income (proportional to the equity interest) 556,715 153,234 118,369 937,122 99,101 34,145 833,855 476,854 3,209,395

Other amounts (1) -- 8,086 -- -- -- (7,249) 8,280 (38,848) (29,731)

Result in the equity method investments 556,715 161,320 118,369 937,122 99,101 26,896 842,135 438,006 3,179,664



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c) Other investments

Sep 30, 2017 Dec 31, 2016 Sep 30, 2016

Tax incentive investments 38,462 38,462 35,189

Equity securities 57 57 57

Stocks and shares 49,365 48,930 88,637

Other investments 4,007 4,038 4,050

Other equity abroad 76,208 78,911 104,658

Total (1) 168,099 170,398 232,591

(Provision for losses) (7,919) (7,908) (45,235)

(1) Includes the amount of R$ 4.797 thousand of September 30, 2017 and R$ 9.090 thousand as of September 30, 2016 related of accumulated impairment.

d) Goodwill arising on acquisition of investments

Changes of goodwill 3rd quarter/2017 3rd quarter/2016 Jan 1 to Sep 30, 2017 Jan 1 to Sep 30, 2016

Opening balance 496,718 741,072 604,440 889,903

Amortizations (1) (52,358) (50,855) (158,033) (154,603)

Foreign exchange fluctuation (2) (5,237) (284) (7,284) (45,367)

Closing balance 439,123 689,933 439,123 689,933

(1) Recorded in other administrative expenses.

(2) Levied on the goodwill from Banco do Brasil Americas e do Banco Patagonia.

e) Expected goodwill amortization

4th quarter/2017 2018 2019 After 2019 Total

Banco do Brasil 19,383 16,701 17,034 14,437 67,555

Banco Votorantim 15,283 -- -- -- 15,283

Banco Patagonia 4,100 16,701 17,034 14,437 52,272

Tax effects (1) (8,722) (7,515) (7,665) (6,497) (30,399)

Net total 10,661 9,186 9,369 7,940 37,156

Other investments

BB-BI 30,879 141,696 162,550 -- 335,125

Cielo 30,879 141,696 162,550 -- 335,125

BB Seguros 10,119 11,040 10,028 5,256 36,443

Brasilcap 2,148 8,780 7,659 -- 18,587

IRB-Brasil Resseguros S.A. 7,971 2,260 2,369 5,256 17,856

BB Consolidated 60,381 169,437 189,612 19,693 439,123

Tax effects (1) (26,057) (75,032) (84,222) (8,284) (193,595)

Net total 34,324 94,405 105,390 11,409 245,528

(1) 25% of income tax and 20% of social contribution for financial companies and for non-financial companies of insurance, private pension plan and capitalization, and 25% of income tax and 9% of social contribution for other non-financial companies.

The expected amortization of goodwill arising on the acquisition of investments is based on the projections of results

made at the time of the purchase, prepared by specialized firms or technical departments within the Bank, and considers

the timing of the estimates and discount rates used in calculating the net present value of expected cash flows.


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f) Goodwill impairment test

The recoverable amount of goodwill arising on acquisition of investments is determined by the value in use, which is the

discounted value of the cash flow projections of the invested entity (cash-generating unit). For the evaluation of the

banks, the free cash flow for shareholders discounted by the cost of equity capital calculated for each institution was

used.

Assumptions used to project these cash flows are based on public information, budgets and / or business plans of the

purchased entities. These assumptions consider current and past performance, as well as expected market and

macroeconomic growth.

The cash flow of the entities below were actively projected for ten years and considered perpetual from the eleventh year

with fixed growth rates. For the periods that exceed the terms of the budget or business plan, the growth estimates are in

line with those adopted by the entities. The nominal discount rate is determined annually based on the CAPM (Capital

Asset Pricing Model) adjusted for the market and the currency of each country.

Entity (cash-generating unit) Growth rate p.a. (1) Discount rate p.a. (2)

Banco Votorantim 4.2% 14.2%

Banco do Brasil Americas 2.0% 8.6%

Banco Patagonia 19.0% 27.7%

(1) Nominal growth in perpetuity.

(2) Geometric average used in economic evaluations.

According to the sensitivity analysis performed, there is no indication that changes in the assumptions would cause the

book value of the cash-generating units to exceed the recoverable amount, except for Banco do Brasil Americas.

The recoverable amount of the goodwill arising on the acquisition of Cielo, as well as of the goodwill recognized in the

BB Seguros/BB Seguridade, is determined by the net realizable value through sale, based on the share price of the

companies on BM&FBovespa.

Entity (cash-generating unit) Share price (1)

BB Seguridade (BBSE3) R$ 29.88

Cielo (CIEL3) R$ 32.51

(1) Share price quoted at September 30, 2016.

In the period from January 1, 2017 to September 30, 2017 and from January 1, 2016 to September 30, 2016, there was

no impairment loss on goodwill arising on the acquisition of investments.

15- PROPERTY AND EQUIPMENT

Dec 31, 2016 Jan 1 to Sep 30, 2017 Sep 30, 2017 Sep 30, 2016

Book value Changes Depreciation Cost value Accumulated Depreciation

Accumulated impairment

Book value Book value

Buildings 3,511,189 (33,800) (265,794) 7,352,625 (4,123,696) (17,335) 3,211,595 3,593,581

Furniture and equipment in use 1,635,334 95,671 (213,832) 3,568,735 (2,051,436) (125) 1,517,173 1,468,945

Data processing systems 1,108,424 212,235 (319,074) 3,933,337 (2,931,752) -- 1,001,585 1,030,653

Constructions in progress 641,145 222,385 -- 863,530 -- -- 863,530 432,915

Land 198,906 (2,676) -- 196,230 -- -- 196,230 199,462

Facilities 174,558 2,179 (24,191) 986,965 (834,419) -- 152,546 183,339

Security systems 165,617 2,033 (22,465) 404,976 (259,791) -- 145,185 166,820

Communication systems 113,195 20,621 (16,372) 303,103 (185,659) -- 117,444 113,647

Transport systems 7,392 449 (1,316) 14,313 (7,788) -- 6,525 7,838

Furniture and equipment in stock 1,718 (53) -- 1,665 -- -- 1,665 1,718

Total 7,557,478 519,044 (863,044) 17,625,479 (10,394,541) (17,460) 7,213,478 7,198,918


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16 - INTANGIBLE ASSETS

a) Changes and breakdown


Book value Acquisitions Exchange fluctuation

Write offs Amortization Cost value Accumulated amortization

Accumulated impairment

Book value

Book value

Rights to manage payroll (1) 5,596,439 54,740 -- (39) (1,320,435) 10,623,711 (6,243,266) (49,740) 4,330,705 4,629,986

Softwares 1,839,214 417,206 (4,230) (1,122) (197,967) 3,942,071 (1,888,970) -- 2,053,101 1,802,222

Goodwill on acquisition of absorbed company (2)

1,007,459 -- -- -- (755,594) 4,961,028 (4,709,163) -- 251,865 1,232,498

Other intangible assets 272,148 -- -- -- (81,086) 560,043 (368,981) -- 191,062 299,178

Total 8,715,260 471,946 (4,230) (1,161) (2,355,082) 20,086,853 (13,210,380) (49,740) 6,826,733 7,963,884

(1) The values of acquisitions and write-offs include contracts renegotiated in the period, in which the new contract value is recorded and the past contract value is written-off without impact on Statement of Income.

(2) Refers to the goodwill from the merger of Banco Nossa Caixa on November 2009.

b) Estimate for amortization

4th quarter/2017 2018 2019 2020 2021 After 2021 Total

Amounts to be amortized 758,155 1,900,834 1,371,784 925,425 660,366 1,210,169 6,826,733

c) Impairment test

The impairment test of goodwill on the acquisition of Banco Nossa Caixa, which was merged into Banco do Brasil,

considers the value in use of Banco do Brasil´s operations in the state of São Paulo (cash-generating unit). Cash flows

are based on cash-generating unit results in 2016, and in the 2017 budgets and internal projections of results from 2018

to 2021.

The assumptions adopted for the calculation are based on Banco do Brasil's Corporate Strategy and macroeconomic

scenario. They consider the current and past performance and expected growth in the market segment.

Cash flows were discounted by the Bank’s cost of own capital. The nominal discount rate is measured annually based on

the Capital Asset Pricing Model – CAPM adapted for the Brazilian market and referenced in Reais (R$).

Entity (cash-generating unit) Growth rate p.a Discount rate p.a.

Banco do Brasil - state of São Paulo - goodwill Banco Nossa Caixa (1)(2) 2.7% 14.6%

(1) Nominal growth in perpetuity.

(2) Geometric average of five years of projections.

According to the sensitivity analysis performed, there is no indication that changes in the assumptions would cause the

book value of the cash-generating unit to exceed its recoverable amount.

In the period from January 1, 2017 to September 30, 2017 and from January 1, 2016 to September 30, 2016, there was

no impairment loss on goodwill on merged company.


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17 - DEPOSITS AND SECURITIES SOLD UNDER REPURCHASE AGREEMENTS

a) Deposits

Sep 30, 2017 Dec 31, 2016 Sep 30, 2016

Demand deposits 61,793,371 69,349,186 61,622,917

Individuals 32,267,557 33,991,206 30,437,667

Corporations 17,800,032 22,205,568 19,081,303

Restricted 7,658,358 7,546,026 7,739,761

Government 1,467,101 2,622,497 1,377,142

Financial system institutions 863,120 568,135 567,732

Foreign currency 490,943 691,111 883,375

Related companies 462,523 875,450 722,671

National Treasury Special 334,517 349,606 319,625

Domiciled abroad 329,246 70,856 341,104

Other 119,974 428,731 152,537

Saving deposits 154,516,749 151,763,344 148,681,412

Individuals 146,609,805 143,469,320 140,010,357

Corporations 7,530,540 7,964,554 8,297,546

Related companies 363,817 313,852 356,638

Financial system institutions 12,587 15,618 16,871


Time deposits 201,040,265 204,150,246 203,447,682

Judicial 124,781,833 121,969,028 119,280,773

National currency 48,705,490 52,691,661 57,081,337

Foreign currency 21,519,617 22,475,927 21,042,962

Fundo de Amparo ao Trabalhador - FAT (Note 17.e) 3,850,438 5,187,817 4,302,126

Funproger (Note 17.f) 361,657 324,120 314,402

Other 1,821,230 1,501,693 1,426,082

Other deposits 123,691 53,111 31,908

Total 437,122,989 445,980,688 437,702,523



b) Deposits by liability date

Without maturity

Up to 3 months 3 to 12 months 1 to 3 years 3 to 5 years Sep 30, 2017 Dec 31, 2016 Sep 30, 2016

Time deposits (1) 130,919,016 17,810,213 7,258,237 19,407,018 25,645,781 201,040,265 204,150,246 203,447,682

Saving deposits 154,516,749 -- -- -- -- 154,516,749 151,763,344 148,681,412

Demand deposits 61,793,371 -- -- -- -- 61,793,371 69,349,186 61,622,917

Interbank deposits -- 7,846,987 8,927,309 674,613 2,200,004 19,648,913 20,664,801 23,918,604

Other deposits 123,691 -- -- -- -- 123,691 53,111 31,908

Total 347,352,827 25,657,200 16,185,546 20,081,631 27,845,785 437,122,989 445,980,688 437,702,523

(1) Includes the amount of R$ 46,780 thousand (R$ 51,068 thousand as of Dec 31, 2016 and R$ 55,414 thousand as of Sep 30, 2016), of time deposits with early repurchase clause (liquidity commitment), classified based on the contractual maturity dates.


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c) Securities sold under repurchase agreements

Sep 30, 2017 Dec 31, 2016 Sep 30, 2016

Own portfolio 41,451,376 59,207,850 53,639,324

Private securities 22,015,701 25,591,345 31,621,304


Securities abroad 1,031,184 897,522 1,308,513

Third-party portfolio 376,418,908 315,426,182 356,830,715

National Treasury bills 12,119,073 45,709,377 93,572,452


National Treasury notes 10,259,484 50,163,996 69,810,461

Securities abroad 18 15 1

Total 417,870,284 374,634,032 410,470,039



d) Deposits and securities sold under repurchase agreements expenses


2017 Jan 1 to Sep 30,

2016

Deposits (4,430,698) (9,205,412) (14,186,653) (27,148,181)

Saving deposits (2,470,250) (3,077,098) (7,781,591) (9,077,526)

Judicial deposits (2,802,212) (3,149,086) (8,632,566) (9,035,416)

Time deposits (1,349,085) (2,251,945) (4,627,171) (6,483,693)

Interbank deposits 2,190,849 (727,283) 6,854,675 (2,551,546)

Securities sold under repurchase agreements (10,186,346) (13,560,199) (33,175,514) (35,824,416)

Third-party portfolio (9,107,945) (11,809,876) (29,486,295) (30,733,568)

Own portfolio (1,078,401) (1,750,323) (3,689,219) (5,090,848)

Funds from issuance of securities (1) (3,233,113) (5,822,861) (11,873,521) (17,146,315)

Agribusiness letters of credit (1,911,509) (4,037,357) (7,370,686) (11,851,627)

Financial bills (706,684) (1,009,140) (2,409,636) (2,981,885)

Securities issued abroad (281,931) (302,868) (930,497) (887,985)

Letters of credit – real estate (332,989) (473,496) (1,162,702) (1,424,818)

Subordinated debt abroad (2) (135,269) (138,758) (407,149) (413,103)

Equity and debt hybrid securities (3) (458,324) (470,146) (1,376,973) (1,443,451)

Other (160,292) (188,806) (497,052) (565,931)

Total (18,604,042) (29,386,182) (61,516,862) (82,541,397)

(1) Funds from acceptance and issuance of securities are disclosed in Note 18.

(2) Subordinated debt abroad are disclosed in Note 20.c.

(3) Equity and debt hybrid securities are disclosed in Note 20.d.


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54

e) Fund for worker's assistance (Fundo de Amparo ao Trabalhador – FAT)

Program Resolution/

TADE (1)

Repayment of FAT Funds Sep 30, 2017 Dec 31, 2016 Sep 30, 2016

Type(2) Initial date Final date Available

TMS(3) Invested TJLP(4)

Total Available


Total Available


Total

Proger Rural and Pronaf 10,569 39,782 50,351 13,409 57,761 71,170 15,852 67,011 82,863

Pronaf Custeio 04/2005 RA 11/2005 -- 352 889 1,241 127 1,440 1,567 246 1,474 1,720

Pronaf Investimento 05/2005 RA 11/2005 -- 9,022 35,488 44,510 12,187 51,238 63,425 14,047 59,710 73,757

Rural Custeio 02/2006 RA 11/2005 -- 101 107 208 57 246 303 105 286 391

Rural Investimento 13/2005 RA 11/2005 -- 1,094 3,298 4,392 1,038 4,837 5,875 1,454 5,541 6,995

Proger Urbano 405,701 2,929,406 3,335,107 1,531,783 2,914,158 4,445,941 576,672 3,028,352 3,605,024

Urbano Investimento 18/2005 RA 11/2005 -- 264,933 1,835,979 2,100,912 481,056 2,150,447 2,631,503 287,723 2,254,163 2,541,886

Urbano Capital de Giro 01/2016 RA 06/2016 -- 140,768 1,093,427 1,234,195 1,050,727 763,711 1,814,438 288,949 774,189 1,063,138

Other 67,059 397,921 464,980 182,140 488,566 670,706 104,681 509,558 614,239

Exports 27/2005 RA 11/2005 -- 10,215 16,655 26,870 15,768 41,379 57,147 13,871 42,676 56,547

FAT Taxista 02/2009 RA 09/2009 -- 42,004 310,559 352,563 149,178 348,576 497,754 62,949 357,788 420,737

FAT Turismo Investimento

01/2012 RA 08/2012 -- 14,840 70,707 85,547 15,777 97,990 113,767 17,646 107,218 124,864

FAT Turismo Capital de Giro

02/2012 RA 08/2012 -- -- -- -- 1,417 621 2,038 10,215 1,876 12,091

Total 483,329 3,367,109 3,850,438 1,727,332 3,460,485 5,187,817 697,205 3,604,921 4,302,126

(1) TADE - Allocation Term of Special Deposits.

(2) RA - Automatic Return (monthly, 2% of the total balance).

(3) Funds remunerated by the Taxa Média Selic (average selic rate - TMS).

(4) Funds remunerated by Taxa de Juros de Longo Prazo (long-term interest rate - TJLP).


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FAT is a special accounting and financial fund, established by Law 7,998/1990, associated with the Ministério do

Trabalho e Emprego (Ministry of Labor and Employment) and managed by the Executive Council of the Fundo de

Amparo ao Trabalhador (Fund for Workers’ Assistance) - Codefat. Codefat is a collective, tripartite, equal level

organization, composed of representatives of workers, employers and government.

The main actions to promote employment using FAT funds are structured around the Employment and Earnings

Generating Program (Proger), which resources are invested through special deposits, established by Law 8,352/1991, in

official federal financial institutions. These programs include, among others, the urban Proger program (Investment and

Working Capital) and the rural Proger program and the National Program for Strengthening Family Farming - Pronaf, in

addition to the special lines such as FAT Integrar – Rural e Urbano, FAT Giro Setorial – Micro e Pequenas Empresas

(micro and small-sized companies), FAT Giro Setorial – Médias e Grandes Empresas (medium and large-sized

companies), FAT Giro Setorial Veículos – Micro e Pequenas Empresas (micro and small-sized companies), FAT Giro

Setorial Veículos – Médias e Grandes Empresas (medium and large-sized companies), FAT Fomentar – Micro e

Pequenas Empresas (micro and small-sized companies), FAT Fomentar – Médias e Grandes Empresas (medium and

large-sized companies), FAT Giro Agropecuário, FAT Inclusão Digital (digital inclusion), FAT Taxista (taxi), FAT Turismo

Investimento and FAT Turismo Capital de Giro.

The FAT special deposits invested in Banco do Brasil are daily accrued the Average Selic Rate (TMS), when not lent out.

When disbursed as loans, the interest rate is swapped to the Long-term Interest Rate (TJLP) until maturity. The accruals

are paid to FAT on a monthly basis, as established in Codefat Resolutions 439/2005 and 489/2006.

f) Endorsement fund for the generation of employment and income (Funproger)

The Endorsement fund for the generation of employment and income (Funproger) is a special accounting fund

established on November 23, 1999 by Law 9,872/1999, amended by Law 10,360/2001 and by Law 11,110/2005 and

regulated by Codefat Resolution 409/2004, and its amendments. It is managed by Banco do Brasil under the supervision

of Codefat/MTE and the balance at September 30, 2017 is R$ 361,657 thousand (R$ 324,120 thousand as of December

31, 2016 and R$ 314,402 thousand as of September 30, 2016).

The objective of Funproger is to provide endorsement to entrepreneurs who do not have the necessary guarantees to

contract financing by Proger Urbano and Programa Nacional de Microcrédito Produtivo Orientado, through the payment

of a commission. The Funproger equity where incorporated from the spread between TMS and TJLP accrued over FAT

special deposits. Other sources of funds are the operations accruals and the income paid by Banco do Brasil, the fund

manager.


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18 – FUNDS FROM ISSUANCE OF SECURITIES

Funding Currency Issued value Remuneration p.a. Issue date Maturity Sep 30, 2017 Dec 31, 2016 Sep 30, 2016

Banco do Brasil 134,150,233 162,208,660 170,583,110

Global Medium - Term Notes Program 6,273,570 6,421,430 6,586,806

R$ 350,000 9.75% 2007 2017 -- 364,455 347,322

USD 500,000 6.00% 2010 2020 1,599,916 1,669,293 1,638,085

EUR 1,000,000 3.75% 2013/2014 2018 3,769,389 3,496,582 3,676,197

CHF 275,000 2.50% 2013 2019 904,265 891,100 925,202

"Senior Notes" 5,802,014 7,561,835 7,570,574

USD 500,000 3.88% 2011 2017 -- 1,656,809 1,633,907

USD 1,809,700(1) 3.88% 2012 2022 5,802,014 5,905,026 5,936,667

Structured notes 69,151 63,632 67,350

EUR 18,400 2.18% to 3.55% 2021 69,151 63,632 67,350

Certificates of deposits (2) 5,153,203 3,388,669 3,065,435

Short term 0.90% to 4.60% 4,597,145 3,169,956 2,388,342

Long term 2.32% to 4.60% 2020 556,058 218,713 677,093

Certificates of structured operations 128,642 102,312 127,234

Short term 7.69% to 15.07% 101,104 -- --

Long term 7.93% to 10.94% 2020 27,538 102,312 127,234

Letters of credit - real estate 70.00% to 81.00% DI 18,479,825 17,073,622 17,521,397

Short term 113,146 39,344 9,549,740

Long term 2026 18,366,679 17,034,278 7,971,657

Letters of credit agribusiness 70.00% to 98.00% DI 94,472,979 124,965,334 133,098,401

Short term 79,166,439 62,584,051 57,784,764

Long term 2020 15,306,540 62,381,283 75,313,637

Financial letters 3,770,849 2,631,826 2,545,913

Long term

102.00% to 104.00% DI

IPCA + 5.30%

Fixed 9.54% to 14.00%

2020 3,770,849 2,631,826 2,545,913

Banco Patagonia

22.50% to 26.00%

Badlar + 299 pts. to Badlar + 425 pts

346,368 325,553 326,130

Short term ARS 184,803 247,691 227,524

Long term ARS 2020 161,565 77,862 98,606

Special Purpose Entities − SPE abroad (3) 2,694,961 2,801,840 2,833,815

Securitization of future flow of payment orders from abroad (3)

USD 18,000(1) 5.25% 2008 2018 57,157 117,580 136,633

Structured notes (3) USD 500,000 Libor 6m+2.50% 2014/2015 2034 1,610,114 1,639,455 1,645,821

USD 320,000 Libor 6m+3.25% 2015 2030 1,027,690 1,044,805 1,051,361

Eliminated amount on consolidation (4) (59,338) (169,700) (176,216)

Total 137,132,224 165,166,353 173,566,839



(1) Refers to the outstanding value since partial repurchases occurred.

(2) Securities issued abroad in USD and EUR.

(3) The Special Purpose Entities (SPE) "Dollar Diversified Payment Rights Finance Company" and "Loans Finance Company Limited" were organized under the laws of the Cayman Islands. The liabilities arising from securities issued by these entities are paid using the funds accumulated in their accounts. The SPE declare that have no relevant asset or liability other than the rights and duties originating from the contracts for issue of securities. The Bank is not a shareholder, the owner, or a beneficiary of any of the results of operations of the SPE.

The Dollar Diversified Payment Rights Finance Company was organized for the following purposes: a) fund raising by issuance of securities in the international market; (b) use of resources obtained by issuing securities to pay for the purchase, with the Bank, of the rights to payment orders issued by banking correspondents located in the U.S. and by the agency of BB New York, in U.S. dollars, for any agency in Brazil (Rights on Consignment); and (c) making payments of principal and interest on securities issued and other payments defined in the contract of issuance of these securities.

The Loans Finance Company Limited was organized for the following purposes: a) fund raising by issuance of securities in the international market; (b) closing and booking repurchase agreements with the Bank; (c) purchasing of protection against credit risk of the Bank through a credit derivative, which is actionable only in case of Bank's default in any of the obligations assumed in repurchase agreements; and (d) making payments of principal and interest on securities issued and other payments defined in the contract of issuance of these securities.

(4) Refers to securities issued by Banco do Brasil Conglomerate, which are in possession of overseas subsidiaries/entities.


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19 - BORROWINGS AND ONLENDINGS

a) Borrowings

up to 90 days from 91 to 360 days

from 1 to 3 years

from 3 to 5 years

Sep 30, 2017 Dec 31, 2016 Sep 30, 2016

Overseas 6,108,490 9,644,270 2,341,307 274,291 18,368,358 20,409,348 22,812,105

Borrowings from bankers abroad 6,083,371 9,581,910 2,312,669 271,516 18,249,466 20,345,736 22,669,736

Imports 21,960 42,881 28,637 2,775 96,253 63,612 142,369

Exports 3,159 19,479 1 -- 22,639 -- --

Total 6,108,490 9,644,270 2,341,307 274,291 18,368,358 20,409,348 22,812,105

Current liabilities -- -- -- -- 15,752,760 17,997,094 19,641,127

Non-current liabilities -- -- -- -- 2,615,598 2,412,254 3,170,978

b) Onlendings

Domestic - official institutions

Programs Finance charges Sep 30, 2017 Dec 31, 2016 Sep 30, 2016

National Treasury - rural credit 158,557 149,248 167,996

Pronaf TMS (if available)

Fixed 0.50% p.a. to 5.50% p.a. (if applied)

42,641 30,766 48,552

Cacau (cocoa) IGP-M + 8.00% p.a. or

TJLP + 0.60% p.a. or 6.35% p.a. 99,300 98,243 97,263

Recoop

Fixed 5.75% p.a. to 8.25% p.a. or

IGP-DI + 1.00% p.a. or

IGP-DI + 2.00% p.a.

12,060 16,096 17,283

Other 4,556 4,143 4,898

BNDES

Fixed 0.00% p.a. to 9.50% p.a.

TJLP + 0.00% p.a. to 4.00% p.a.

IPCA + 3.72% p.a. to 9.41% p.a.

Selic + 0.50% p.a. to 2.50% p.a.

FX Variation + 0.90% p.a. to 3.00% p.a.

28,003,364 32,086,856 33,581,092

Caixa Econômica Federal Fixed 5.25% p.a. (average) 25,858,654 23,758,043 22,917,625

Finame

Fixed 0.00% p.a. to 11.00% p.a.

TJLP + 0.50% p.a. to 5.50% p.a.

FX Variation + 0.90% p.a. to 3.00% p.a.

Selic + 2.08% p.a. to 2.33% p.a.

21,131,156 24,765,860 26,019,477

Other official institutions 7,521,932 2,322,686 2,391,812

Special supply - rural savings (Note 9.b) TR 7,158,514 -- --

Special supply - deposits (Note 9.b) 249,844 1,874,492 1,874,492

Funcafé

TMS (if available)

Fixed 8.75% p.a. to 11.25% p.a. (if applied)

113,546 448,167 517,292

Other 28 27 28

Total 82,673,663 83,082,693 85,078,002




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Overseas

Sep 30, 2017 Dec 31, 2016 Sep 30, 2016

Special Fund for Support to Small and Medium Manufacturing Companies 477 477 477

Total 477 477 477

Current liabilities 95 95 95

Non-current liabilities 382 382 382

c) Expense on borrowings and onlendings


Borrowings expenses (1) 945,743 (570,993) (206,121) 6,033,990

Onlendings expenses (1) (119,079) (1,608,402) (2,871,139) 1,364,045

Foreign (1) 1,136,900 (355,629) 567,207 5,039,498

BNDES (522,910) (644,737) (1,643,070) (1,943,079)

Caixa Econômica Federal (578,557) (410,256) (1,311,551) (1,136,279)

Finame (111,705) (139,174) (351,459) (430,731)

National Treasury (18,055) (27,519) (55,562) (77,241)

Other (24,752) (31,087) (76,704) (88,123)

Expenses for obligations with bankers abroad (1) 537,268 (89,405) 490,783 3,401,252

Expenses for financial and development funds liabilities (1) (56,100) (213,279) (641,004) 593,084

Foreign exchange profit/(loss) on overseas investments (351,911) 110,765 (76,208) (2,429,464)

Total 955,921 (2,371,314) (3,303,689) 8,962,907

(1) The credit balances presented arise from the negative exchange variation of the period (the appreciation of the Real against the Dollar).

20 - OTHER LIABILITIES

a) Taxes and social security

Sep 30, 2017 Dec 31, 2016 Sep 30, 2016

Legal liabilities (Note 27.h1) (1) 6,571,673 6,571,673 6,571,673

Deferred tax liabilities (Note 24.d) 2,132,729 2,088,502 2,522,271

Provision for taxes and contributions on net income 2,185,908 481,286 6,654,475

Taxes and contributions payable 1,207,303 1,412,098 1,191,694

Taxes and contributions on net income payable 613,734 5,472,488 623,217

Total 12,711,347 16,026,047 17,563,330


Non-current liabilities 496,494 732,496 766,295

(1) The provision for restatement of judicial deposit classified under "Other liabilities - Taxes and social security - Legal liabilities" was reclassified to "Other liabilities - Sundry - Legal liabilities – Provision for tax risks ", according to Bacen Circular Letter No. 3.782/2016.

b) Financial and development funds

Sep 30, 2017 Dec 31, 2016 Sep 30, 2016

Marinha Mercante 7,945,644 8,190,785 7,790,714

Pasep (1) 2,725,426 2,632,348 2,719,733

Fundo de Desenvolvimento do Nordeste - FDNE 2,088,231 2,070,560 2,198,943

Fundo de Desenvolvimento do Centro Oeste - FDCO 1,091,291 893,803 908,761

Funds from Governo do Estado de São Paulo 772,042 761,340 747,342

Fundo Nacional de Aviação Civil - FNAC 63,078 64,926 75,873

Other 156,155 176,763 178,380

Total 14,841,867 14,790,525 14,619,746



(1) The Bank is administrator of the Public Servant Heritage Formation Program (Pasep), guaranteeing a minimum return equal to the Long-Term Interest Rate - TJLP.


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c) Subordinated debts

Funding Issued value

Remuneration p.a.

Issue date Maturity Sep 30, 2017 Dec 31, 2016 Sep 30, 2016

Banco do Brasil

FCO – Resources from Fundo Constitucional do Centro-Oeste

27,149,284 25,237,153 24,331,884

Funds invested (1) 24,464,874 22,219,924 21,678,360

Resources available (2) 2,684,410 3,017,229 2,653,524

Subordinated debt abroad 9,274,736 9,668,175 9,491,142

USD 660,000 5.38% 2010 2021 2,109,275 2,197,183 2,159,283

USD 1,500,000 5.88% 2011 2022 4,774,417 4,977,616 4,884,733

USD 750,000 5.88% 2012 2023 2,391,044 2,493,376 2,447,126

Subordinated letters of credit 26,549,987 27,100,626 26,221,519

700,000 111.00% of CDI 2011 2017 1,393,059 3,918,702 3,781,633

4,844,900

111.50% of CDI

1.06% to 1.11% + CDI

5.24% to 5.56% + IPCA

Fixed 10.51%

2012 2018 8,733,417 8,120,026 7,904,695

215,000 112.00% of CDI 2012 2019 400,610 367,374 354,410

4,680,900 111.00% of CDI 2013 2019 8,239,084 7,561,372 7,296,890

150,500 112.50% of CDI

5.45% + IPCA 2012 2020 280,580 258,947 250,674

377,100 112.00% to

114.00% of CDI 2014 2020 575,085 526,593 507,698

163,523 112.00% to

114.00% of CDI 2014 2020 256,344 234,894 226,533

1,594,580 113.00% to

115.00% of CDI 2014 2021 2,413,768 2,208,470 2,128,526

2,273,804 113.00% to

115.00% of CDI 2014 2021 3,615,324 3,309,117 3,189,845

400,000 8.08% + IPCA 2014 2022 642,716 595,131 580,615

Total subordinated debt from Banco do Brasil

62,974,007 62,005,954 60,044,545

Eliminated amount on consolidation (30,605) (30,203) (17,995)

Total subordinated debt consolidated

(3)(4) 62,943,402 61,975,751 60,026,550



(1) Remunerated at the rates on the loans funded with these amounts less the del credere of the financial institution, according to article 9 of Law 7,827/1989.

(2) Remunerated based on extra-market rate announced by the Banco Central do Brasil (Bacen), according to article 9 of Law 7,827/1989.

(3) R$ 39,523,718 thousand (R$ 40,181,808 thousand as of Dec 31, 2016 and R$ 39,096,379 thousand as of Sep 30, 2016) of the total balance is considered tier II of the Referential Equity (RE).

(4) Includes the amount of R$ 7,503,235 thousand, relating to subordinated debt recorded in the line Debt Instruments eligible as capital.


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d) Equity and debt hybrid securities

Funding Issued value(1) Remuneration

p.a. Issue date Sep 30, 2017 Dec 31, 2016 Sep 30, 2016

Perpetual bonds

USD 1,498,500 8.50% 10/2009 4,920,030 4,954,884 5,037,970

USD 1,398,727 9.25% 01 and 03/2012 4,700,791 4,731,512 4,818,376

USD 1,988,000 6.25% 01/2013 6,458,481 6,539,293 6,613,392

R$ 8,100,000 5.50%(2) 09/2012 8,170,200 8,175,552 8,166,419

USD 2,169,700 9.00% 06/2014 7,026,715 7,065,637 7,195,191

Total Banco do Brasil 31,276,217 31,466,878 31,831,348

Eliminated amount on consolidation (23,332) (1,252) (5,944)

Total reclassified to shareholders' equity (Note 23.c)

(8,100,000) (8,100,000) (8,100,000)

Total BB Consolidated 23,152,885 23,365,626 23,725,404

Current liabilities 727,108 279,308 193,367


(1) Refers, in dollar capitalizations, to the outstanding value, since there were partial repurchases of these instruments.

(2) Since August.28, 2014, the remuneration is fully variable (Note 23.c).

R$ 21,938,400 thousand of the Perpetual Bonds is included in the Referential Equity (R$ 22,565,112 thousand as of

December 31, 2016, and R$ 22,475,780 thousand as of September 30, 2016). Of this amount, R$ 17,344,800 thousand

are recorded in debt instruments eligible as capital (Note 28.b).

The bonds of USD 1,500,000 thousand (outstanding value USD 1,498,500 thousand), issued in October 2009, have the

option of redemption at the discretion of the Bank from 2020 or on each subsequent, semi-annual interest payment date,

as long as it has been previously authorized by Banco Central do Brasil (Bacen). In case the Bank does not exercise the

option to redeem on October 2020, the interest on the bonds will be adjusted on this date to 7.782% plus the traded rate

on 10 year North American Treasury bonds. Thereafter, every 10 years, the interest on the bonds will be adjusted by

taking into account the traded rate of the 10 year North American Treasury bonds.

The bonds issued in January 2012 and March 2012 (reopening), of USD 1,000,000 thousand (outstanding value USD

650,000 thousand) and USD 750,000 thousand (outstanding value USD 748,727 thousand) respectively, and the bonds

issued in January 2013 of USD 2,000,000 thousand (outstanding value USD 1,988,000 thousand), had their terms and

conditions modified on September 27, 2013, in order to adjust them to the rules of Bacen through Resolution No. 4,192

of March 1, 2013, which regulates the implementation of Basel III in Brazil. The changes were effective from October 1,

2013, when the instruments were submitted to Bacen to obtain authorization to be included in the Supplementary Capital

(Tier I) of the Bank. The authorization was granted on October 30, 2013.

The bonds issued in June 2014 of USD 2,500,000 thousand (outstanding value USD 2,169,700 thousand), have the

option of redemption at the discretion of the Bank from June 18, 2024 or on each subsequent, semi-annual interest

payment date, as long as it has been previously authorized by the Central Bank of Brazil. If the Bank did not exercise the

option to redeem in June 2024, the interest on the bonds will be adjusted to 6.362% plus the traded rate on 10 year

North American Treasury bonds.

If the Bank does not exercise the redemption option in April 2023 for the bonds issued in 2012, in April 2024 for the

bonds issued in 2013, and in June 2024 for the bonds issued in 2014, the rate of bond interest is adjusted on that date

and every 10 years according to the 10 year North American Treasury bondsat the time plus the initial credit spread. The

bonds have the following options of redemption, subject to prior authorization of Bacen:

(i) the Bank may, at its option, redeem the bonds in whole but not in part in April 2023 for the bonds issued in 2012, in April 2024 for the bonds issued in 2013, and in June 2024 for the bonds issued in 2014, and on each subsequent, semi-annual interest payment date, at the base redemption price;

(ii) the Bank may, at its option, redeem the bonds in whole, but not in part, after five years from the date of issue, as long as it is before April 2023, for the bonds issued in 2012, before April 2024 for the bonds issued in 2013, and before April 2024 for the bonds issued in 2014, as a result of a tax event, at the base redemption price;


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(iii) the Bank may, at its option, redeem the bonds in whole but not in part, after five years from the date of issue, as long as it is before April 2023, for the bonds issued in 2012, and in April 2024 for the bonds issued in 2013, on the occurrence of a regulatory event, at the higher value between the base redemption price and the Make-whole amount;

(iv) the Bank may, at its option, redeem the bonds in whole but not in part, after five years from the date of issue as long as it is before June 2024 for the bonds issued in 2014, on the occurrence of a regulatory event at the base redemption price.

The bonds issued in October 2009 determine that the Bank suspends the semi-annual payments of interest and / or

accessories on those securities issued (which will not be due or accrued) if:

(i) the Bank does not comply or the payment of such charges does not allow the bank to comply with the levels of capital adequacy, operating limits, or its financial indicators are under the minimum level required by Brazilian regulations applicable to banks; (ii) Bacen or the regulatory authorities determine the suspension of payment of such charges; (iii) any event of insolvency or bankruptcy occurs; (iv) a default occurs; or (v) the Bank has not distributed dividends or interest on equity to common shareholders for the period of

calculation of such interest and / or accessories.

The bonds issued in January and March 2012, in January 2013 and in June 2014 determine that the Bank suspend the

semi-annual payments of interest and/or accessories on those securities issued (which will not be due or accrued) if:

(i) distributable income for the period are not sufficient for making the payment (discretionary condition of the Bank); (ii) the Bank does not comply or the payment of such charges does not allow the Bank to comply with the levels

of capital adequacy, operating limits, or its financial indicators are under the minimum level required by Brazilian regulations applicable to banks;

(iii) Bacen or the regulatory authorities determine the suspension of payment of such charges; (iv) any event of insolvency or bankruptcy occurs; or (v) a default occurs.

According to Basel III rules, the bonds issued in January 2012, March 2012, in January 2013 and in June 2014 have

mechanisms of loss absorption. Moreover, if the item (i) occurs, the payment of dividends by Bank to its shareholders will

be limited to the minimum required determined by applicable law until the semi-annual interest payments and / or

accessories on those titles have been resumed in full. Finally, these bonds will expire permanently and at the minimum

value corresponding to the balance recorded in the Tier I capital of the Bank if:

(i) the main capital of the Bank is less than 5.125% of the amount of risk-weighted assets (RWA); (ii) the decision to make a capital injection from the public sector or an equivalent capital contribution to the Bank

is taken, in order to maintain the bank’s viability; (iii) the Bank, on a discretionary assessment regulated by the CMN, sets out, in writing, the expiration of the

bonds to enable the continuity of the Bank.


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e) Sundry

Sep 30, 2017 Dec 31, 2016 Sep 30, 2016

Credit/debit card operations 19,760,309 21,471,614 19,805,476

Actuarial liabilities (Note 26.e) 13,475,608 12,527,486 14,717,210

Legal liabilities – Provision for tax risks (Note 27.h1) (1) 9,688,183 8,869,908 8,474,660

Provisions for civil claims (Note 27.e1) 6,774,615 6,897,180 6,949,355

Sundry creditors - domestic 5,352,959 8,196,248 6,690,935

Provisions for pending payments 4,800,148 6,181,130 6,304,613

Funds linked to loans 2,794,439 4,523,775 4,516,880

Provision for labor claims (Note 27.e1) 2,663,998 2,508,268 2,602,343

Third party payment obligations 2,260,682 1,815,374 2,049,769

Liabilities for official agreements 1,358,560 1,217,719 1,530,955

Sundry creditors - abroad 972,962 864,820 1,145,895

Liabilities for premiums granted under customer loyalty schemes 519,902 637,623 695,093

Liabilities for operations linked to assignments 521,865 612,132 639,776

Liabilities for assets acquisition 188,777 470,607 299,554

Creditors of resources to be disbursed 641,864 434,927 563,898

Provisions for guarantees provided (Note 20.f) 332,350 442,300 582,377

Provision for tax litigation (Note 27.e1) (2) 248,782 276,015 269,701

Provision for losses with the Fundo de Compensação de Variação Salarial - FCVS 160,089 159,601 306,087

Liabilities for shares in investment funds 108,712 97,049 98,040

Guarantees on loans sold under assignment 723 729 814

Other 663,819 617,653 588,662

Total 73,289,346 78,822,158 78,832,093



(1) Refers to the provision for restatement of judicial deposit, according to Bacen Circular Letter No. 3.782/2016.

(2) According to Bacen Circular Letter No. 3,782/2016, “Provision for tax litigation” were reclassified from “Other liabilities - Taxes and social security” to “Other liabilities - Sundry".

f) Financial Guarantees

Sep 30, 2017

Guaranteed values Allowance(1)

Guarantees related to bidding, auctions, service rendering or

execution of works 1,258,290 56,690

Sureties or guarantees in lawsuits and in tax-based administrative proceedings 1,008,590 52,848

Linked to the distribution of securities by public offering 90,786 454

Guarantees related to the supply of goods 16,326 --

Other financial guarantees provided (2) 1,311,541 218,522

Other bank guarantees 743,431 3,835

Guarantees related to international trade of goods -- --

Other guarantees 1,310 --

Total 4,430,274 332,349

(1) Calculated in accordance with Resolution CMN 2,682/1999.

(2) Refers mainly to guarantees provided in foreign currency.


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21 - OTHER OPERATING INCOME/EXPENSES

a) Service fee income and bank fee income


2017 Jan 1 to Sep 30,

2016

Account fee 1,777,315 1,599,869 5,086,517 4,568,969

Fund management 1,419,070 1,118,621 4,050,569 3,198,254

Commissions on Insurance, pension plans and capitalization 808,659 750,591 2,237,403 2,282,866

Card income 486,932 459,883 1,460,498 1,342,185

Loans and guarantees provided 402,560 374,429 1,365,092 1,178,696

Billing 354,386 423,608 1,109,328 1,263,808

Collection 270,067 253,721 813,023 771,101

Capital market income 198,208 165,009 547,759 484,915

Consortium management fees 191,094 156,204 526,730 394,206

National Treasury and official funds management 177,375 150,678 515,378 432,485

Interbank 36,446 44,778 117,099 133,928

Other 439,981 474,758 1,377,475 1,424,472

Total 6,562,093 5,972,149 19,206,871 17,475,885

b) Personnel expenses


Wages and salaries (2,195,887) (2,349,886) (6,985,944) (7,287,615)

Social charges (762,949) (781,558) (2,314,393) (2,379,607)

Benefits (735,228) (661,057) (2,262,285) (1,992,700)

Personnel administrative provisions (755,517) (1,265,398) (1,930,281) (2,702,933)

Labor lawsuits (458,656) (277,525) (1,248,986) (1,044,604)

Pension plans (201,676) (198,397) (607,903) (585,881)

Training (17,010) (14,712) (39,397) (43,057)

Director's and officer's remuneration (10,837) (11,619) (33,155) (35,985)

Total (5,137,760) (5,560,152) (15,422,344) (16,072,382)

c) Other administrative expenses


Amortization (838,858) (822,459) (2,519,845) (2,499,205)

Rent (390,346) (375,991) (1,193,817) (1,056,222)

Expenses with outsourced services (393,747) (350,368) (1,100,812) (1,101,213)

Security services (302,712) (317,832) (913,051) (879,994)

Depreciation (287,972) (285,176) (863,044) (847,169)

Communications (262,333) (267,594) (839,178) (847,011)

Transport (304,721) (308,967) (806,814) (856,467)

Data processing (201,009) (211,753) (608,857) (605,805)

Financial system services (192,773) (198,119) (551,804) (591,768)

Maintenance and upkeep (172,876) (167,460) (525,028) (495,867)

Specialized technical services (120,656) (116,209) (386,172) (311,726)

Water, electricity and gas (110,274) (116,387) (366,581) (412,044)

Advertising and marketing (109,187) (81,923) (232,186) (207,896)

Promotion and public relations (56,291) (58,475) (113,180) (179,067)

Materials (25,987) (30,941) (84,845) (89,939)

Domestic travel (27,894) (16,871) (76,571) (57,059)

Other (204,791) (172,361) (513,265) (461,218)

Total (4,002,427) (3,898,886) (11,695,050) (11,499,670)


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d) Other operating income


Update of deposits in guarantee 646,500 840,825 2,112,683 2,278,113

Recovery of charges and expenses 514,123 534,316 1,527,175 1,550,487

Income on receivables 166,756 235,650 581,326 685,118

Surplus allocation update - Previ Plan 1 (Note 26.f) 128,970 214,867 451,439 904,369

Cards transactions 75,005 53,289 284,593 264,011

From non-financial subsidiaries 71,915 70,215 236,166 227,728

Reversal of provisions - administrative and personnel expenses

74,646 139,228 177,861 218,270

Adjustment of tax recoverable 59,328 24,942 147,125 93,403

Income from specific credits ans special operations - National Treasury

9,848 12,011 31,690 58,110

Dividends received 1,226 1,634 11,112 18,909

Subsidy of the National Treasury - MPO 1,680 3,335 4,820 6,568

Royalties and special participation -- 5,076 -- 44,178

Other 134,537 240,553 438,445 694,282

Total 1,884,534 2,375,941 6,004,435 7,043,546

e) Other operating expenses


Discounts granted on renegotiations (330,783) (261,176) (1,066,143) (902,393)

Cards transactions (404,037) (311,008) (1,061,969) (1,043,795)

Actuarial liabilities update (353,786) (425,189) (1,055,863) (1,155,845)

Civil and tax claims (490,245) (396,947) (894,899) (576,337)

Adjustment of the provision for deposit in court (Note 27.h)

(244,960) (412,391) (818,275) (970,262)

Business relationship bonus (263,784) (214,129) (719,095) (474,582)

From non-financial subsidiaries (106,828) (114,938) (314,818) (322,190)

ATM Network (73,690) (92,036) (255,825) (270,316)

Failures/frauds and other losses (57,567) (86,461) (255,325) (250,511)

Compensation for transactions of Banco Postal (52,500) (331,815) (166,736) (939,274)

Compliance bonus (47,651) (73,800) (158,034) (223,587)

INSS - Social Security (42,538) (31,145) (120,809) (80,823)

Life insurance premium - consumer credit (32,961) (33,815) (99,484) (111,576)

Proagro Expenses (11,926) (10,809) (33,598) (28,914)

Other expenses – operating provisions (10,628) (9,026) (18,524) (18,601)

Fees for the use of Sisbacen - Banco Central do Brasil System

(4,997) (5,634) (15,118) (16,789)

Update of interest on own capital/dividends (9,015) (8,901) (10,662) (15,195)

Other (155,122) (271,123) (493,213) (614,577)

Total (2,693,018) (3,090,343) (7,558,390) (8,015,567)


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22 - NON-OPERATING INCOME


Non-operating income 527,808 70,812 678,691 223,622

Capital gains 505,429 51,155 618,006 157,398

Profit on disposal of assets 2,682 5,966 18,423 19,274

Reversal of provision for devaluation of other assets 9,669 1,462 15,038 3,872

Rental income 2,308 3,968 7,267 8,251

Interest and inflation adjustment of debtors from disposal of property

1,213 1,427 1,844 2,926

Profit on disposal of investments/equity interest -- -- 311 --

Other non-operating income 6,507 6,834 17,802 31,901

Non-operating expenses (137,932) (15,742) (184,225) (60,272)

Capital losses (112,539) (8,983) (132,929) (43,416)

Devaluation of other assets (20,982) (3,738) (38,168) (12,239)

Loss on disposal of assets (4,175) (2,496) (11,651) (3,316)

Other non-operating expenses (236) (525) (1,477) (1,301)

Total 389,876 55,070 494,466 163,350

23- SHAREHOLDERS' EQUITY

a) Book value and market value per common share

Sep 30, 2017 Dec 31, 2016 Sep 30, 2016

Shareholders' equity - Banco do Brasil 82,118,819 76,218,169 74,597,333

Book value per share (R$) (1) 29.49 27.37 26.79

Market value per share (R$) 34.90 28.09 22.80

Shareholders' equity - consolidated 93,564,197 87,193,752 85,724,139

(1) Calculated based on the equity of Banco do Brasil.

b) Capital

Banco do Brasil’s share capital of R$ 67,000,000 thousand (R$ 67,000,000 thousand on December 31, 2016 and on

September 30, 2016) is fully subscribed and paid-in and consists of 2,865,417,020 book-entry common shares with no

par value. The Federal Government is the largest shareholder and holds a majority of the Bank’s voting shares.

The Bank may, even without amending its by-laws, if approved by the Meeting of Shareholders, and in the conditions

established therein, increase its capital up to the limit of R$ 120,000,000 thousand by issuing common shares, for which

shareholders should be granted preference in the subscription in proportion to the number of shares held.

c) Instruments Qualifying as Common Equity Tier 1 Capital

The Bank signed a loan agreement with the federal government on September 26, 2012, with R$ 8,100,000 thousand in

funds available. There is no maturity date, a fixed interest rate and semi-annual interest payments. The funding was used

to finance agribusiness.

Up to August 27, 2014, Bacen had authorized the instrument to be included in Tier I referential equity (additional Tier I

capital) subject to the limitations set forth in Article 28 of CMN Resolution 4,192 of March 01, 2013.

The Bank signed an amendment to the contract on August 28, 2014, under the terms of Law 12,793 of April 02, 2013.

The purpose of the amendment was to allow the instrument to qualify as common equity in Tier I capital, under Article 16

of CMN Resolution 4,192/2013.


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66

As a result of the amendment, the interest rate was changed to a variable rate, and the interest period was changed to

match the Bank’s fiscal year (January 1 to December 31). Each years’ interest is paid in a single annual installment,

adjusted by the Selic rate up to the effective payment date. Payment must be made within 30 calendar days after the

dividend payment for the fiscal year.

The interest payment must be made from profits or profit reserves available for distribution at the end of the fiscal year

preceding the calculation date. Payment is at Management’s discretion. Unpaid interest does not accumulate. If the

payment or dividend distribution is not made (including in the form of interest on own capital) prior to the end of the

subsequent fiscal year, the accrued interest is no longer owed.

If the Bank’s retained earnings, profit reserves (including the legal reserve) and capital reserve cannot fully absorb losses

calculated at the end of a fiscal year, no interest will be paid on the loan. The Bank will apply the accrued interest and

principal balance, in this order, to offset any remaining losses. This will be considered a pay-down of the instrument.

The instrument does not have a maturity date. It is only payable if the Bank is dissolved or Bacen authorizes the

repurchase of the instrument. If the Bank is dissolved, the payment of principal and interest is subordinated to payment

of the Bank’s other liabilities.

There will be no preferred interest on the loan under any circumstances, including in relation to other equity instruments

included in Reference Equity.

Bacen considered the instrument qualifying as Common Equity Tier I Capital in the form of CMN Resolution 4,192/2013

since August 28, 2014. So the instrument mentioned was reclassified to the Shareholders` Equity, for purposes of

disclosure.

d) Revaluation reserves

The revaluation reserves, totaling R$ 2,389 thousand (R$ 2,660 thousand as of December 31, 2016 and 2,678 thousand

as of September 30, 2016), refer to revaluations of assets made by the associates/subsidiaries.

In the period from January 1, 2017 to September 30, 2017, there was a reserve realization of R$ 271 thousand (R$ 52

thousand in the period from January 1, 2016 to September 30, 2016), due to depreciation, transferred to Retained

Earnings (Accumulated Losses), net of taxes. In accordance with CMN Resolution 3,565/2008, the remaining amount will

be maintained until the date of its effective realization.

e) Capital and profit reserves

Sep 30, 2017 Dec 31, 2016 Sep 30, 2016

Capital reserves 12,436 15,509 15,509

Profit reserves 31,124,786 27,646,569 25,409,076

Legal reserve 6,818,337 6,570,147 6,411,237

Statutory reserves 24,306,449 21,076,422 18,997,839

Operating margin 20,640,468 17,567,395 15,607,260

Equalization of dividends 3,665,981 3,509,027 3,390,579

The legal reserve ensures the adequacy of the Bank’s capital structure and can only be used to offset losses or increase

capital. Five percent of net income, before any other allocations, is transferred to the legal reserve. The amount of the

reserve cannot exceed 20% of the share capital.

The operating margin statutory reserve ensures the adequacy of the Bank’s operating margins in accordance with its

business activities. The reserve consists of up to 100% of net income after allocation to legal reserve (including

dividends) and is limited to 80% of the share capital.

The dividend equalization statutory reserve provides funds for the payment of dividends. The reserve consists of up to

50% of net income after allocation to legal reserve (including dividends) and is limited to 20% of the share capital.


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67

f) Earnings per share


2017 Jan 1 to Sep 30,

2016

Net income (R$ thousand) 2,811,164 2,219,241 7,828,873 6,971,156

Weighted average number of shares (basic and diluted) 2,784,953,544 2,784,757,945 2,784,888,989 2,788,498,467

Earnings per share (basic and diluted) (R$) 1.01 0.80 2.81 2.50

g) Interest on own capital/dividends and destination of the income

Introducing payment schedule of interest on own capital and dividends:

Amount Amount per share (R$) Base date of payment Payment date

1st quarter/2017

Interest on own capital paid (1) 200,824 0.072 Mar 13, 2017 Mar 31, 2017

Complementary Interest on own capital paid (1) 509,477 0.183 May 22, 2017 May 31, 2017

2nd quarter/2017

Interest on own capital paid (1) 218,823 0.079 Jun 12, 2017 Jun 30, 2017

Complementary Interest on own capital paid (1) 559,958 0.201 Ago 21, 2016 Ago 31, 2017

3rd quarter/2017

Interest on own capital paid (1) 212,471 0.076 Sep 11, 2017 Sep 29, 2017

Complementary Interest on own capital payable (1) 621,704 0.223 Nov 21, 2017 Nov 30, 2017

Total destined to shareholders 2,323,257 0.834

(1) Amounts subject to the rate of 15% Withholding Tax.

Amount Amount per share (R$) Base date of payment Payment date

1st quarter/2016

Interest on own capital paid (1) 274,466 0.098 Mar 11, 2016 Mar 31, 2016

Complementary Interest on own capital paid (1) 372,273 0.133 May 23, 2016 May 31, 2016

2nd quarter/2016

Interest on own capital paid (1) 383,614 0.138 Jun 13, 2016 Jun 30, 2016

Complementary Interest on own capital paid (1) 380,865 0.138 Ago 22, 2016 Ago 31, 2016

3rd quarter/2016

Interest on own capital paid (1) 352,694 0.126 Sep 12, 2016 Sep 30, 2016

Complementary Interest on own capital paid (1) 305,963 0.110 Nov 21, 2016 Nov 29, 2016

Total destined to shareholders 2,069,875 0.743

(1) Amounts subject to the rate of 15% Withholding Tax.

In accordance with Laws 9,249/1995 and 9,430/1996 and the Bank's Bylaws, Management decided on the payment of

Interest on own capital to its shareholders.

The interest on own capital is calculated based on adjusted net equity value and is limited on a pro rata die basis to the

variation of long-term interest rate, as long as there is profit (before the deduction of interest on own capital) or reserves

for retained earnings and profit reserves of at least twice its value.

To comply with the Income Tax legislation, the amount of interest on own capital was recorded as "Financial expenses"

and, for purposes of disclosure in these financial statements, reclassified to "Retained earnings". The total interest on

own capital in the period from January 1, 2017 to September 30, 2017, provided an expense reduction on tax charges

totaling R$ 1,045,466 thousand (R$ 931,444 thousand in the period from January 1, 2016 to September 30, 2016).


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h) Reconciliation of net income and shareholders' equity

Net income Shareholders’ equity


2017 Jan 1 to Sep 30,

2016 Sep 30, 2017 Dec 31, 2016 Sep 30, 2016

Banco do Brasil 2,811,164 2,219,241 7,828,873 6,971,156 82,118,819 76,218,169 74,597,333

Instruments qualifying as common equity tier 1 capital (1)

25,029 20,193 70,200 66,420 8,100,000 8,100,000 8,100,000

Unrealized gains (2) 4,691 6,743 3,514 32,700 (333,871) (337,385) (332,575)

Non-controlling interests -- -- -- -- 3,679,249 3,212,968 3,359,381

BB Consolidated 2,840,884 2,246,177 7,902,587 7,070,276 93,564,197 87,193,752 85,724,139

(1) The instrument qualifying as CET1 was registered in the liabilities in the Individual Financial Statements and its interest recognized as expenses with securities sold under repurchase agreements. This Instrument was reclassified to Shareholder’s Equity in the consolidated financial statements, aiming to improve the quality and transparency of these financial statements (Notes 3 and 23.c).

(2) Refers to the realization of unrealized results arising from the assignment of credits from the Bank to Ativos S.A.

i) Accumulated Other Comprehensive Income

Jan 1 to Sep 30, 2017 Jan 1 to Sep 30, 2016

Opening balance

Net change Tax effects Closing balance

Opening balance

Net change Tax effects Closing balance

Securities available for sale

Banco do Brasil (1,453,578) 1,654,562 (618,698) (417,714) (2,760,383) 2,301,493 (578,457) (1,037,347)

Subsidiary abroad 29,480 26,471 (1,682) 54,269 (12,780) 61,946 (798) 48,368

Associates and subsidiaries (5,555) 37,264 (11,658) 20,051 (351,322) 386,870 (81,532) (45,984)

Cash flow hedge

Associates and subsidiaries (8,300) (12,791) 6,338 (14,753) -- (18,249) 11,417 (6,832)

Investment Hedge Abroad

Associates and subsidiaries -- (7,415) 2,521 (4,894) -- -- -- --

Foreign Exchange Variation in Investments Abroad

Subsidiary abroad -- (139,678) -- (139,678) -- -- -- --

Actuarial gains/(losses) on pension plans

(15,491,252) (812,840) 325,182 (15,978,910) (13,918,186) (4,856,506) 1,942,511 (16,832,181)

Total (16,929,205) 745,573 (297,997) (16,481,629) (17,042,671) (2,124,446) 1,293,141 (17,873,976)

j) Noncontrolling interests

Shareholders’ equity

Sep 30, 2017 Dec 31, 2016 Sep 30, 2016

Banco Patagonia S.A. 790,319 822,165 774,703

Besc Distribuidora de Títulos e Valores Mobiliários S.A. 27 27 27

BB Tecnologia e Serviços 34 32 30

BB Seguridade S.A. 2,888,869 2,390,744 2,584,621

Non-controlling interest 3,679,249 3,212,968 3,359,381

k) Shareholdings (number of shares)

Number of shares issued by the Bank to shareholders which, directly or indirectly, hold more than 5% of the shares:

Shareholders Sep 30, 2017 Dec 31, 2016 Sep 30, 2016

Shares % Total Shares % Total Shares % Total

Federal government 1,513,959,715 52.8 1,558,511,715 54.4 1,558,511,715 54.4

Tesouro Nacional 1,453,487,115 50.7 1,453,487,115 50.7 1,453,487,115 50.7

Fundo Fiscal de Investimento e Estabilização 60,472,600 2.1 105,024,600 3.7 105,024,600 3.7

Caixa de Previdência dos Funcionários do Banco do Brasil - Previ

248,103,214 8.7 281,209,714 9.8 284,019,914 9.9

Treasury shares (1) 80,463,476 2.8 80,668,497 2.8 80,666,497 2.8

Other shareholders 1,022,890,615 35.7 945,029,094 33.0 942,218,894 32.9

Total 2,865,417,020 100.0 2,865,417,020 100.0 2,865,417,020 100.0

Resident shareholders 2,235,070,159 78.0 2,275,634,163 79.4 2,281,306,997 79.6

Non resident shareholders 630,346,861 22.0 589,782,857 20.6 584,110,023 20.4

(1) Includes, on September 30, 2017, 40,900 shares of the Bank held by BB DTVM (50,100 on December 31, 2016 and on September 30, 2016).


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69

Number of shares issued by the Bank, held by the Board of Directors, the Executive Board and the Audit Committee:

Common shares (ON) (1)

Sep 30, 2017 Dec 31, 2016 Sep 30, 2016

Board of Directors (except for Bank’s CEO, listed in the Bank’s Executive Committee)

144 144 144

Executive Committee 152,671 166,334 183,413

Audit Committee 10,075 10,075 10,075

(1) The shareholding interest of the Board of Directors, Executive Committee, Fiscal Council and Audit Committee represents approximately 0.006% of the Bank's capital stock.

l) Movement of shares outstanding/free float

Sep 30, 2017 Dec 31, 2016 Sep 30, 2016

Total % Total % Total %

Free float at the period date 1,226,072,321 42.8 1,139,037,581 39.8 1,139,037,581 39.8

Disposal of shares by Caixa F1 Garantia Construção Naval -- 87,368,167 87,368,167

Disposal of shares by FGO - shares investments -- 7,500,000 7,500,000

Disposal of shares by FFIE - Fundo Fiscal de Investimento e Estabilização

44,552,000 -- --

Shares received in order to comply with operations secured by the FGCN – Fundo Garantidor da Construção Naval

-- (8,075,350) (8,075,350)

Other changes (1) 216,684 241,923 224,844

Free float at the period end date (2) 1,270,841,005 44.4 1,226,072,321 42.8 1,226,055,242 42.8

Outstanding shares 2,865,417,020 100.0 2,865,417,020 100.0 2,865,417,020 100.0

(1) Refers mainly to changes coming from Technical and Advisory Bodies.

(2) According to the Law 6,404/1976 and the regulation of BM&FBovespa's New Market. The shares held by the Board of Directors and Executive Committee are not included. The shares held by the Caixa de Previdência dos Funcionários do Banco do Brasil - Previ compose the free float shares.

m) Treasury shares

The Board of Directors approved a repurchase program for up to 50 million shares on July 13, 2012, within 180 days

from that date, with the objective of acquiring shares to be held in treasury for subsequent sale or withdrawal without

further capital reduction, aiming to generate value for shareholders. This program was concluded on January 8, 2013,

with the acquisition of 20,200,000 shares in the amount of R$ 461,247 thousand. The minimum, average and maximum

price per share under the program was R$ 18.28, R$ 22.83 e R$ 26.78 respectively.

The Board of Directors approved a repurchase program for up to 50 million shares on June 13, 2013. The conditions

were the same as the previous program however, valid for up to 365 days from that date. The program concluded on

June 6, 2014, with the acquisition of 43,126,700 shares in the amount of R$ 1,014,504 thousand. The minimum, average

and maximum price per share under the program was R$ 18.84, R$ 23.52 and R$ 28.67 respectively.

The Board of Directors approved a repurchase program for up to 50 million shares on June 06, 2014. The conditions

were the same as the previous program related to 2013. The program concluded on May 18, 2015, with the acquisition of

6,021,900 shares in the amount of R$ 155,481 thousand. The minimum, average and maximum price per share under

the program was R$ 22.66, R$ 25.82 and R$ 29.27, respectively.

The Board of Directors approved a repurchase program of up to 50 million shares on May 18, 2015, under the same

conditions as the previous program.The Bank had acquired 3,623,700 shares in the amount of R$ 67,902 thousand. The

minimum, average and maximum price per share under the program was R$ 17.90, R$ 18.74 and R$ 21.10,

respectively.

The Bank had 80,463,476 shares in treasury on September 30, 2017, representing R$ 1,850,043 thousand of which

71,861,516 of the shares were acquired in repurchase programs, 8,075,350 shares received in order to comply with

operations secured by the FGCN - Fundo Garantidor da Construção Naval, 526,547 related to share-based payment and

63 shares were from mergers.


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70

n) Share-based payment

The program of variable remuneration was based on the CMN Resolution 3,921 of November 25, 2010, which governs

compensation policies for executives of financial institutions. The resolution establishes that at least 50% of variable

compensation should be paid in shares or share-based instruments, of which at least 40% should be deferred for future

payment over a period of at least three years, defined according to the risks and activities overseen by the executive. BB

DTVM, as a result of this resolution, also adopted variable remuneration policy for its directors, directly acquiring treasury

shares of the Banco do Brasil. All shares acquired are BBAS3 and its fair value is the quoted market price on the date of

grant.

We present the statement of acquired shares, its distribution and its transfer schedule:

Total Program

Shares Average Cost

Shares

Distributed (1) Shares to Distribute

Estimated

Schedule

Transfers

2013 Program

Banco do Brasil 353,800 20.36 259,674 71,488 Mar 2018

Total shares to be distributed 71,488

BB DTVM 24,546 23.83 19,639 4,907 Apr 2018


2014 Program

Banco do Brasil 318,633 24.08 166,755 64,030 Feb 2018

64,029 Feb 2019


BB DTVM 27,063 22.98 16,239 5,412 Apr 2018

5,412 Apr 2019


2015 Program


68,703 Mar 2019

68,703 Mar 2020


BB DTVM 26,109 19.92 10,449 5,220 Mar 2018

5,220 Mar 2019

5,220 Mar 2020


2016 Program


19,861 Mar 2019

19,861 Mar 2020

19,861 Mar 2021


BB DTVM 10,397 32.84 2,085 2,078 Mar 2018

2,078 Mar 2019

2,078 Mar 2020

2,078 Mar 2021


(1) Due to the negative variation in the profit of Banco do Brasil between 2012 and 2016, the totality of the shares related to these periods were not distributed to the Directors, of which 1,197 were related to BB DTVM and 91,333 shares referring to the Bank.


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71

24 - TAXES

a) Breakdown of income tax (IR) and social contribution expenses (CSLL)


Current values (838,035) (1,950,831) (2,829,487) (7,269,290)

Domestic income tax and social contribution (748,748) (1,837,646) (2,474,226) (6,930,031)

Foreign income tax (89,287) (113,185) (355,261) (339,259)

Deferred values (198,556) 1,038,809 (182,288) 3,852,762

Deferred tax liabilities 31,029 (184,864) 42,899 (122,440)

Leasing transactions - portfolio adjustment and accelerated depreciation

6,586 (177) 18,699 (4,013)

Mark to Market (MTM) 67,567 (182) 322,766 424,803

Actuarial gains -- -- -- 109,855

Interest and inflation adjustment of fiscal judicial deposits

(75,131) (115,380) (262,923) (335,072)

Foreign profits (18,859) (81,042) (69,572) (282,995)

Transactions carried out on the futures market (6,617) 1,240 (6,739) 39,221

Recovered term credits 57,483 10,677 40,668 (74,239)

Deferred tax assets (229,585) 1,223,673 (225,187) 3,975,202

Temporary differences (164,933) 1,186,896 206,251 3,224,381

Tax losses/CSLL negative bases -- -- (4,987) (121,588)

Mark to Market (MTM) (64,652) 33,554 (420,462) 869,186

Transactions carried out on the futures market -- 3,223 (5,989) 3,223

Total (1,036,591) (912,022) (3,011,775) (3,416,528)

b) Reconciliation of income tax and social contribution charges


Profit before taxation and profit sharing 4,707,091 3,858,167 13,183,960 12,640,627

Total charges of IR (25%) and CSLL (20%) (2,118,191) (1,736,175) (5,932,782) (5,688,282)

Charges upon interest on own capital 375,378 296,396 1,045,465 931,444

Equity in subsidiaries and joint ventures 452,093 479,005 1,358,751 1,430,849

Employee profit sharing 162,570 128,702 449,130 404,698

Other amounts 91,559 (79,950) 67,661 (495,237)

Income tax and social contribution (1,036,591) (912,022) (3,011,775) (3,416,528)

c) Tax expenses


Cofins (862,170) (874,412) (2,539,662) (2,712,050)

ISSQN (266,963) (247,856) (785,220) (718,115)

PIS/Pasep (145,227) (146,914) (427,231) (452,759)

Other (128,154) (120,854) (373,449) (329,635)

Total (1,402,514) (1,390,036) (4,125,562) (4,212,559)


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d) Deferred tax liabilities

Sep 30, 2017 Dec 31, 2016 Sep 30, 2016

Arising from mark-to-market 1,002,094 998,782 1,201,029

Arising from interest and inflation adjustment of fiscal judicial deposits 574,886 546,393 534,725

Arising from recovered term credits 310,170 350,838 282,633

Overseas entities 53,227 67,052 69,318

Arising from leasing portfolio adjustment 60,731 79,430 87,045

Related to foreign profit 69,572 -- 282,996

Arising from positive adjustments of benefits plans 41,434 42,146 62,493

Arising from futures market transactions 7,469 -- --

Other 13,146 3,861 2,032

Total deferred tax liabilities 2,132,729 2,088,502 2,522,271

Income tax 885,149 914,441 1,157,399

Social contribution 657,282 611,497 791,302

Cofins 507,783 483,926 493,394

PIS/Pasep 82,515 78,638 80,176

e) Deferred tax assets (Tax credit)


Balance Constitution Write off Balance Balance

Temporary differences 42,004,953 12,376,271 (13,762,811) 40,618,413 43,939,400

Allowance for loan losses 24,419,134 9,482,410 (9,061,936) 24,839,608 24,747,309

Provisions 9,650,754 2,110,615 (2,296,996) 9,464,373 10,004,300

Negative adjustments of benefits plans 3,721,796 324,470 (180,118) 3,866,148 4,790,895

Mark to Market (MTM) 1,643,604 290,254 (836,858) 1,097,000 1,556,770

Other provisions 2,569,665 168,522 (1,386,903) 1,351,284 2,840,126

CSLL written to 18% (MP 2,158/2001) 694,371 -- (67,693) 626,678 527,413

Tax losses/excess depreciation 127,317 -- (30,501) 96,816 127,536

Tax losses/negative bases 56,863 835,401 (81,334) 810,930 62,189

Total deferred tax assets 42,883,504 13,211,672 (13,942,339) 42,152,837 44,656,538

Income tax 24,529,862 7,417,800 (7,130,094) 24,817,568 25,481,240

Social contribution 18,202,275 5,764,826 (6,734,100) 17,233,001 19,033,717

Cofins 130,209 25,020 (67,256) 87,973 121,791

PIS/Pasep 21,158 4,026 (10,889) 14,295 19,790

f) Deferred tax assets (Tax credit - not recorded)

Sep 30, 2017 Dec 31, 2016 Sep 30, 2016

Overseas deferred tax assets 1,387,602 1,067,634 1,080,536

Portion of tax losses/negative bases 7,511 4,581 3,364

Temporary differences 100 160 123

Total deferred tax assets 1,395,213 1,072,375 1,084,023

Income tax 872,847 670,756 677,898

Social contribution 522,366 401,619 406,125


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Realization expectative

The expectation of realization of the deferred tax assets (tax credits) is based on a technical study, prepared in June 30,

2017, and the present value is determined based on the average rate of funding of Banco do Brasil.

Future value Present value

In 2017 4,935,938 4,606,743

In 2018 9,908,318 8,968,635

In 2019 9,808,087 8,611,318

In 2020 9,963,875 8,466,907

In 2021 7,647,701 6,289,639

In 2022 133,756 103,173

In 2023 118,262 89,533

In 2024 131,561 77,430

In 2025 91,932 46,926

In 2026 45,233 22,942

In 2027 51,229 34,881

Total deferred tax assets on Jun 30, 2017 42,835,892 37,318,127

In the period from January 01 to September 30, 2017 it was possible to observe the realization of tax credits at Banco do

Brasil, in the amount of R$ 13,654,885 thousand corresponding to 136.70% of the projection of use for the period of

2017 contained in the technical study prepared on December 31, 2016.

The realization of the nominal value of tax credits registered, considering the recovery of those written-off during the

lawsuits (Note 27.h), based on a technical study conducted by Banco do Brasil on June 30, 2017, is projected for 10

years in the following proportions:

Tax losses/CSLL

recoverable (1) Diferences

intertemporary (2)

In 2017 16% 11%

In 2018 33% 23%

In 2019 19% 23%

In 2020 20% 23%

In 2021 12% 18%

From 2022 -- 2%

(1) Projected consumption linked to the capacity to generate IR and CSLL taxable amounts in subsequent periods.

(2) The consumption capacity results from the movements of provisions (expectation of reversals, write offs and uses).

25 - RELATED PARTY TRANSACTIONS

a) Bank’s key management personnel

Salaries and other benefits paid the Bank’s key management personnel (Executive Board and Board of Directors) are as

follows:


Short-term benefits 14,949 8,495 39,774 34,690

Fees and social charges 8,348 7,611 24,835 24,897

Executive Board 8,243 7,479 24,516 24,506

Board of Directors 105 132 319 391

Variable remuneration (cash) and social charges 5,551 -- 12,590 7,444

Other (1) 1,050 884 2,349 2,349

Benefits motivated by cessation of tenure 117 291 526 781

Share-based payment benefits -- -- 8,459 7,260

Total 15,066 8,786 48,759 42,731

(1) Includes contributions to pension plan and complementary healthy plan, housing and relocation benefits, group insurance, among others.


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74

The Bank's variable compensation policy (developed in accordance with CMN Resolution 3,921/2010) requires variable

compensation for the Executive Directors to be paid partially in shares (Note 23.n).

The Bank does not offer post-employment benefits to its key management personnel, except for those who are part of

the staff of the Bank.

b) Details of related party transactions

The Bank has the policy of related party transactions approved by the Board of Directors and disclosure to the market.

The policy aims to establish rules to assure that all decisions, especially those involving related party and other situations

potentially conflicted, are made observing the interests of the Bank and its shareholders. It is applicable to all

stakeholders and directors of the company.

The policy forbids related party transactions under conditions other than those of the market or that may adversely affect

the Bank's interest. Therefore, the transactions are conducted under normal market conditions. The terms and conditions

reflect comparable transactions with unrelated parties (including interest rates and collateral requirements). These

transactions do not involve unusual payment risks.

According to current standards and the Bank’s Bylaws, the Bank does not grant loans and advance, neither does buy nor

sell any kind of assets to the members of the Executive Board and Committees linked to the Board, of the Board of

Directors and to the Fiscal Council.

Thus, the bank does not grant loans and advance, neither does buy nor sell any kind of assets to the Bank’s key

management personnel.

The transactions between the consolidated companies are eliminated in the consolidated financial statements.

Intercompany transactions with these related parties consist of interest bearing and non-interest bearing deposits loans,

sale and repurchase transactions, acquisitions of loan portfolios, provision of services and guarantees.

The most important transactions involving the National Treasury include rural loans granted by the Bank under CMN

Resolution 2,238/1996 and receivables from the National Treasury for interest rate equalization under Federal

Government programs (Law 8,427/1992). Interest rate equalization represents an economic subsidy for rural credit,

which provides borrowers with discounted interest rates compared to the Bank’s normal funding costs (including

administrative and tax expenses). The equalization payment is updated by the Selic rate in accordance with the National

Treasury’s budgeting process (as defined by law) and is designed to preserve the Bank’s earnings.

Some transactions are disclosure in other notes: the resources applied in federal government securities are listed in Note

8; and additional information about the Bank’s contributions and other transactions with sponsored entities are listed in

Note 26.

Fundação Banco do Brasil (FBB) promotes, encourages and sponsors actions in the areas of education, culture, health,

social welfare, recreation and sports, science, technology and community development. In the period from January 1 to

September 30, 2017, the Bank’s contributions to FBB totaled R$ 51,545 thousand (R$ 46,504 thousand in the period

from January 1 to September 30, 2016).

c) Acquisition of portfolio of loans transferred by Banco Votorantim

Jan 1 to Sep 30, 2017 Jan 1 to Sep 30, 2016

Assignment with substantial retention of risks and rewards (with co-obligation) 3,853,901 4,922,158

Unrealized result, net of tax effects (balance) 157 696


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d) Summary of related party transactions

Sep 30, 2017

Controller (1) Joint ventures and

associates (2) Key management

personnel (3) Other related

parties (4) Total

Assets

Interbank deposits -- 459,024 -- -- 459,024

Securities -- 3,383,440 -- 486,886 3,870,326

Loans (5) -- 15,040,887 -- 32,098,175 47,139,062

Receivables from related companies -- 154,304 -- 21,131 175,435

Other assets (6) 3,348,318 549,092 -- 412,165 4,309,575

Guarantees received (7) -- 2,353,579 -- 4,411,378 6,764,957

Liabilities

Demand deposits 341,089 213,282 968 678,462 1,233,801

Saving deposits -- -- 1,023 324,063 325,086

Remunerated time deposits -- 30,027 369 7,706,190 7,736,586

Securities sold under repurchase agreements -- 1,233,979 -- 3,382,608 4,616,587

Borrowings and onlendings 7,680,489 -- -- 74,992,618 82,673,107

Other liabilities 406,786 1,353,880 -- 750,027 2,510,693

Guarantees given and other coobligations (8) -- 6,804,131 -- 727,807 7,531,938

3rd quarter/2017

Income from interest, services and other income 1,228,813 1,589,932 -- 958,548 3,777,293

Funding and other expenses (18,055) (100,856) (25) (1,483,994) (1,602,930)

Jan 1 to Sep 30, 2017

Income from interest, services and other income 4,118,226 5,060,313 -- 3,179,287 12,357,826


(1) National Treasury.

(2) Mainly refer to Banco Votorantim, Cielo, BB Mapfre SH1, Mapfre BB SH2, Brasilprev, Brasilcap, Alelo, Cateno, Tecban and Neoenergia.

(3) Board of Directors and Executive Board.

(4) Includes the most significant transactions with state-owned companies and public companies controlled by the Federal Government, such as: Petrobras, CEF, BNDES, Eletrobras. Government funds such as: Fundo de Amparo ao Trabalhador – FAT, Fundo de Aval para Geração de Emprego e Renda – Funproger. In addition, entities linked to employees and sponsored entities: Cassi, Previ and others.

(5) Loans on transactions with other related parties do not present allowance for losses in September 30, 2017. The reversal of expense for allowance was R$ 74,775 thousand in the 3rd quarter/2017 (reversal of R$ 39,822 thousand in the period from Jan 1 to Sep 30, 2017).

(6) The transactions with the Controller refer mainly to Extension of rural credits – National Treasury transactions (Note 12.a), interest rate equalization – agricultural crop and receivables – National Treasury (Note 12.b).

(7) Mainly include National Treasury guarantees, credit rights resulting from contracts, oil ships, sureties or guarantees, among others.

(8) Includes Contract of Opening of a Revolving Interbank Credit Line with Banco Votorantim.


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Sep 30, 2016

Controller (1) Joint ventures and

associates (2) Key management

personnel (3) Other related

parties (4) Total

Assets

Interbank deposits -- 451,293 -- -- 451,293

Securities -- 3,417,514 -- 497,654 3,915,168

Loans -- 13,739,474 -- 32,276,589 46,016,063

Receivables from related companies -- 247,515 -- 14,191 261,706

Other assets (5) 3,505,301 719,850 -- 223,706 4,448,857

Liabilities

Demand deposits 327,843 208,560 779 1,603,865 2,141,047

Saving deposits -- -- 907 323,345 324,252

Remunerated time deposits -- 5,384 278 10,858,022 10,863,684

Securities sold under repurchase agreements -- 7,847,709 -- 3,028,863 10,876,572

Borrowings and onlendings 2,559,808 -- -- 82,518,066 85,077,874

Other liabilities 234,244 1,335,999 -- 704,443 2,274,686

Guarantees and other coobligations (6) -- 6,800,000 -- 664,963 7,464,963

3rd quarter/2016



Jan 1 to Sep 30, 2016



(1) National Treasury.

(2) Mainly refer to Banco Votorantim, Cielo, BB Mapfre SH1, Mapfre BB SH2, Brasilprev, Brasilcap, Alelo, Cateno and Tecban.

(3) Board of Directors and Executive Board.

(4) Includes the most significant transactions with state-owned companies and private companies controlled by the Federal Government, such as: Petrobras, CEF, BNDES, Eletrobras, Fundo de Amparo ao Trabalhador – FAT, Fundo de Aval para Geração de Emprego e Renda – Funproger. In addition, entities linked to employees and sponsored entities: Cassi, Previ and others.

(5) The transactions with the Controller refer mainly to Extension of rural credits – National Treasury transactions (Note 12.a), interest rate equalization – agricultural crop and receivables – National Treasury (Note 12.b).

(6) Includes Contract of Opening of a Revolving Interbank Credit Line with Banco Votorantim.


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26 - EMPLOYEE BENEFITS

Banco do Brasil sponsors the following pension and health insurance plans for its employees:

Plans Benefits Classification

Previ - Caixa de Previdência dos Funcionários do Banco do Brasil

Previ Futuro Retirement and Pension Defined contribution

Plano de Benefícios 1 Retirement and Pension Defined benefit

Plano Informal Retirement and Pension Defined benefit

Cassi - Caixa de Assistência dos Funcionários do Banco do Brasil

Plano de Associados Health Care Defined benefit

Economus – Instituto de Seguridade Social

Prevmais Retirement and Pension Variable contribution

Regulamento Geral Retirement and Pension Defined benefit

Regulamento Complementar 1 Retirement and Pension Defined benefit

Grupo B’ Retirement and Pension Defined benefit

Plano Unificado de Saúde - PLUS Health Care Defined benefit

Plano Unificado de Saúde - PLUS II Health Care Defined benefit

Plano de Assistência Médica Complementar - PAMC

Health Care Defined benefit

Fusesc - Fundação Codesc de Seguridade Social Multifuturo I Retirement and Pension Variable contribution

Plano de Benefícios I Retirement and Pension Defined benefit

SIM - Caixa de Assistência dos Empregados dos Sistemas Besc e Codesc, do Badesc e da Fusesc

Plano de Saúde Health Care Defined contribution

Prevbep - Caixa de Previdência Social Plano BEP Retirement and Pension Defined benefit

Number of participants covered by benefit plans sponsored by the Bank

Sep 30, 2017 Dec 31, 2016 Sep 30, 2016

Number of participants Number of participants Number of participants

Active Retired/users Total Active Retired/users Total Active Retired/users Total

Retirement and pension plans

102,204 118,703 220,907 106,110 116,432 222,542 113,156 109,842 222,998

Plano de Benefícios 1 - Previ

10,716 98,936 109,652 11,268 99,037 110,305 18,169 92,358 110,527

Plano Previ Futuro 77,968 1,480 79,448 78,886 1,084 79,970 79,020 1,056 80,076

Plano Informal -- 3,173 3,173 -- 3,267 3,267 -- 3,385 3,385

Other plans 13,520 15,114 28,634 15,956 13,044 29,000 15,967 13,043 29,010

Health care plans 103,364 105,913 209,277 105,364 106,429 211,793 113,913 99,555 213,468

Cassi 92,493 98,778 191,271 93,283 99,245 192,528 101,576 92,352 193,928

Other plans 10,871 7,135 18,006 12,081 7,184 19,265 12,337 7,203 19,540

Bank’s contributions to benefit plans


Retirement and pension plans 350,493 330,132 1,063,571 1,007,065

Plano de Benefícios 1 - Previ (1) 131,653 130,554 400,263 398,295

Plano Previ Futuro 142,795 127,682 428,171 384,577

Plano Informal 37,560 38,341 123,929 126,938

Other plans 38,485 33,555 111,208 97,255

Health care plans 340,306 288,072 948,272 880,538

Cassi 302,956 246,116 836,512 767,481

Other plans 37,350 41,956 111,760 113,057

Total 690,799 618,204 2,011,843 1,887,603

(1) Refers to the contributions relating to participants subject to Agreement 97 and Plan 1, whereby these contributions occur by the realization of Fundo Paridade and Fundo de Utilização (Note 26.f). Agreement 97 aims to regulate the funding required to constitute a portion equivalent to 53.7% of guaranteed amount relating to the supplementary pension due to the participants who joined the Bank up to April 14, 1967 and who have retired or will retire after the aforementioned date, except for those participants who are part of the Plano Informal.

The Bank estimates that contributions to benefit plans (post-employment) in the first half of 2017 will be approximately

R$ 788,943 thousand.


3rd quarter 2017


78

Values recognized in income


Retirement and pension plans (337,350) (401,401) (1,005,510) (1,032,933)

Plano de Benefícios 1 - Previ (117,691) (198,513) (347,911) (418,224)

Plano Previ Futuro (142,795) (127,682) (428,171) (384,577)

Plano Informal (30,090) (37,430) (96,115) (124,076)

Other plans (46,774) (37,776) (133,313) (106,056)

Health care plans (373,603) (383,514) (1,133,542) (1,183,570)

Cassi (341,030) (345,805) (1,035,375) (1,075,720)

Other plans (32,573) (37,709) (98,167) (107,850)

Total (710,953) (784,915) (2,139,052) (2,216,503)

a) Retirement and pension plans

Previ Futuro (Previ)

Participants in this plan include Bank employees hired after December 24, 1997. Depending on time of service and

salary, active participants may contribute between 7% and 17% of their salary (retired participants do not contribute). The

plan sponsor matches participants’ contributions up to 14% of their salaries.

Plano de Benefícios 1 (Previ)

Participants in this plan include Bank employees hired prior to December 23, 1997. Active and retired participants may

contribute between 1.8% and 7.8% of their salary or pension.

Prior to December 15, 2000, the Bank contributed 2/3 of the total amount to this plan. As from December 16, 2000,

considering the Federal Constitutional Amendment nº 20, the Bank and the participants started to make equal

contributions. As a result of this contributive parity, the Parity Fund was set-up in December 2000, and its funds are

being used to offset the Bank’s contributions (Note 26.f).

Plano Informal (Previ)

Banco do Brasil is fully responsible for this plan. The Bank’s contractual obligations include to:

(i) providing retirement benefits to the initial group of participants and pension payments to the beneficiaries of

participants who died prior to April 14, 1967;

(ii) paying additional retirement benefits to plan participants who retired prior to April 14, 1967, or had the right to retire

based on time of service and at least 20 years of service with the Bank; and

(iii) increasing retirement and pension benefits due to judicial and administrative decisions related to changes in the

Bank’s career, salary and incentive plans (in excess of the plan’s original benefits).

The Bank and Previ formalized an agreement on December 31, 2012. Under the agreement, Banco do Brasil paid 100%

of the mathematical reserves for the so-called Grupo Especial (for which it was fully liable) using funds from the Fundo

Paridade. As a result, this group migrated from the Plano Informal to Plano de Benefícios 1. The Grupo Especial

included participants from Plano de Benefícios 1 (Previ) listed in the paragraph of first clause of the contract signed on

December 24, 1997. These participants received additional retirement benefits due to administrative and/or judicial

decisions (Note 26.f).

Prevmais (Economus)

Participants in this plan include employees of Banco Nossa Caixa (a bank acquired by Banco do Brasil on November 30,

2009) who enrolled after August 01, 2006, or were part of the Regulamento Geral benefit plan and opted to receive their

vested account balances. The sponsor and participants make equal contributions, which may not exceed 8% of


3rd quarter 2017


79

participants’ salaries. The plan provides additional risk coverage, including supplemental health, work-related accident,

disability and death benefits.

Regulamento Geral (Economus)

Participants in this plan include employees of Banco Nossa Caixa who enrolled prior to July 31, 2006. This plan is closed

to new members. The sponsor and participants contribute equally.

Regulamento Complementar 1 (Economus)

Participants in this plan include employees of Banco Nossa Caixa. This plan offers supplemental health benefits and

annuities upon death or disability. The sponsor, participants and retired/other beneficiaries fund the plan.

Grupo B' (Economus)

Participants in this plan include employees of Banco Nossa Caixa admitted between January 22, 1974, and May 13,

1974, and their beneficiaries. This plan is closed to new members. Benefit levels are based on the fulfillment of certain

conditions outlined in the plan regulation.

Multifuturo I (Fusesc)

Participants in this plan include employees of the State Bank of Santa Catarina – Besc (acquired by Banco do Brasil on

September 30, 2008) who enrolled after January 12, 2003, or were part of the Plano de Benefícios I (Fusesc) and chose

to participate in this plan. Participants may contribute from 2.33% to 7% of their salaries. The plan sponsor matches

these contributions.

Plano de Benefícios I (Fusesc)

Participants in this plan include employees of Besc who enrolled prior to January 11, 2003. This plan is closed to new

members. The sponsor and participants contribute equally.

Plano BEP (Prevbep)

Participants in this plan include employees of the State Bank of Piauí – BEP (acquired by Banco do Brasil on November

30, 2008). The sponsor and participants contribute equally.


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80

b) Health Care Plans

Plano de Associados (Cassi)

The Bank sponsors a health care plan managed by Cassi. The plan covers health care services related to prevention,

protection, recovery and rehabilitation for participants and their beneficiaries. Each month, the Bank contributes 4.5% of

participants’ salaries or pension benefits. Monthly contributions by participants and pensioners total 3% of their salary or

pension, in addition to copayments for certain hospital procedures. Moreover, as a result of the amendment to the Cassi

Statute in November 2016, it was approved the extraordinary monthly contribution of 1% for the participants until

December 2019.

Plano Unificado de Saúde - PLUS (Economus)

Participants in this plan include employees from Banco Nossa Caixa. Participation in this plan requires a direct payroll

deduction of 1.5%, providing coverage for employees and certain preferred dependents. An additional 10% copayment is

required for each medical visit and low-cost exam performed by employees and their dependents (both preferred and

non-preferred).

Plano Unificado de Saúde - PLUS II (Economus)

Participants in this plan include employees from Banco Nossa Caixa. Participation in this plan requires a direct payroll

deduction of 1.5%, providing coverage for employees and certain preferred dependents. An additional 10% copayment is

required for each medical visit and low-cost exam performed by employees and their dependents and adult children. This

plan does not cover non-preferred dependents.

Plano de Assistência Médica Complementar - PAMC (Economus)

Participants in this plan include employees of Banco Nossa Caixa located in the state of São Paulo. The plan serves

disabled employees under the Complementar and Regulamento Geral and their dependents. Participant costs vary

based on usage and in accordance with a progressive salary table.

Plano de Saúde (SIM)

Participants in this plan include employees of Besc and other sponsors of the plan (including Badesc, Codesc, Bescor,

Fusesc and SIM). For active members, monthly contributions total 3.44% of salary, including their 13th salary. For

inactive members, monthly contributions total 8.86% of salary, while the plan sponsors contribute 5.42%. Beneficiaries

also contribute 0.75% per dependent. The plan requires a copayment for ambulatory care procedures.

c) Risk factors

The Bank may need to make unplanned contributions to Previ, Economus, Fusesc and Prevbep, which could

negatively affect operating income.

Determination of the Bank’s obligations to these entities is based on long-term actuarial and financial estimates and the

application and interpretation of current regulatory standards. Inaccuracies inherent to the estimation process could

result in differences between recorded amounts and the actual obligations in the future. This could have a negative

impact on the Bank’s operating results.


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d) Actuarial valuations

Actuarial evaluations are performed every six months. The information contained in the below tables refers to the calculations at June 30, 2017, December 31, 2016 and June 30,

2016.

d.1) Changes in present value of defined benefit actuarial obligations

Plano 1 - Previ Plano Informal - Previ Plano de Associados - Cassi Other plans

1st half/2017 2016 1st half/2016 1st half/2017 2016 1st half/2016 1st half/2017 2016 1st half/2016 1st half/2017 2016 1st half/2016

Opening balance (148,349,574) (121,329,915) (121,329,915) (965,470) (909,280) (909,280) (7,948,422) (6,248,098) (6,248,098) (7,609,949) (6,301,921) (6,301,921)

Interest cost (8,139,876) (17,069,298) (9,095,589) (50,994) (121,736) (66,578) (455,851) (941,398) (491,828) (415,213) (860,756) (470,692)

Current service cost (223,265) (455,492) (224,731) -- -- -- (50,215) (85,735) (39,524) (12,776) (26,616) (14,451)

Past service cost -- -- -- (15,031) (38,228) (20,068) -- -- -- -- -- --

Benefits paid net of retirees contributions 6,375,224 10,350,474 5,178,484 86,369 184,002 88,597 345,276 624,614 322,802 304,794 585,425 263,619

Remeasurements of actuarial gain/(losses) (1,451,633) (19,845,343) (14,235,442) 10,271 (80,228) (79,526) (175,279) (1,297,805) (1,062,240) (156,240) (1,006,081) (328,670)

Experience adjustment 778,709 (1,749,063) (1,566,291) 24,510 (8,380) (24,296) (61,041) (293,184) (379,749) (6,966) 259,022 506,886

Changes to biometric assumptions -- -- -- -- -- -- -- -- -- (31,019) (78,102) (64,339)

Changes to financial assumptions (2,230,342) (18,096,280) (12,669,151) (14,239) (71,848) (55,230) (114,238) (1,004,621) (682,491) (118,255) (1,187,001) (771,217)

Closing balance (151,789,124) (148,349,574) (139,707,193) (934,855) (965,470) (986,855) (8,284,491) (7,948,422) (7,518,888) (7,889,384) (7,609,949) (6,852,115)

Present value of actuarial liabilities with surplus (146,597,375) (143,946,397) (129,888,116) -- -- -- -- -- -- (5,720,000) (5,731,092) (5,595,762)

Present value of actuarial liabilities without surplus (5,191,749) (4,403,177) (9,819,077) (934,855) (965,470) (986,855) (8,284,491) (7,948,422) (7,518,888) (2,169,384) (1,878,857) (1,256,353)

d.2) Changes in fair value of plan assets

Plano 1 - Previ Plano Informal - Previ Plano de Associados - Cassi Other plans(1)

1st half/2017 2016 1st half/2016 1st half/2017 2016 1st half/2016 1st half/2017 2016 1st half/2016 1st half/2017 2016 1st half/2016

Opening balance 143,946,397 118,378,747 118,378,747 -- -- -- -- -- -- 5,731,092 5,394,014 5,394,014

Interest income 7,902,703 16,291,315 8,880,898 -- -- -- -- -- -- 313,740 725,014 405,153

Contributions received 268,610 575,569 267,742 86,369 184,002 88,597 345,276 624,614 322,802 102,113 177,830 79,768

Benefits paid net of retirees contributions (6,375,224) (10,350,474) (5,178,484) (86,369) (184,002) (88,597) (345,276) (624,614) (322,802) (304,794) (585,425) (263,619)

Actuarial gain/(loss) on plan assets 854,889 19,051,240 7,539,213 -- -- -- -- -- -- (122,151) 19,659 (19,554)

Closing balance 146,597,375 143,946,397 129,888,116 -- -- -- -- -- -- 5,720,000 5,731,092 5,595,762

(1) Refers to the following plans: Regulamento Geral (Economus), Prevmais (Economus), Regulamento Complementar 1 (Economus), Multifuturo I (Fusesc), Plano I (Fusesc) and Plano BEP (Prevbep).


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d.3) Amounts recognized in the balance sheet


Sep 30, 2017 Dec 31, 2016 Sep 30, 2016 Sep 30, 2017 Dec 31, 2016 Sep 30, 2016 Sep 30, 2017 Dec 31, 2016 Sep 30, 2016 Sep 30, 2017 Dec 31, 2016 Sep 30, 2016

1) Fair value of the plan assets 146,597,375 143,946,397 129,888,116 -- -- -- -- -- -- 5,720,000 5,731,092 5,595,762

2) Present value of actuarial liabilities (151,789,124) (148,349,574) (139,707,193) (934,855) (965,470) (986,855) (8,284,491) (7,948,422) (7,518,888) (7,889,384) (7,609,949) (6,852,115)

3) Surplus/(deficit) (1+2) (5,191,750) (4,403,177) (9,819,077) (934,855) (965,470) (986,855) (8,284,491) (7,948,422) (7,518,888) (2,169,384) (1,878,857) (1,256,353)

4) Surplus/(deficit) - plot sponsor (2,595,875) (2,201,588) (4,909,538) (934,855) (965,470) (986,855) (8,284,491) (7,948,422) (7,518,888) (1,477,476) (1,260,178) (944,412)

5) Amounts recognized in profit (1) (117,691) -- (198,513) (30,090) -- (37,430) (247,008) -- (247,890) (40,195) -- (29,543)

6) Amounts received from funds (Note 26.f) (1)

131,654 -- 130,554 -- -- -- -- -- -- -- -- --

7) Benefits paid (1) -- -- -- 37,560 -- 38,342 208,934 -- 148,201 36,679 -- 29,568

8) Net actuarial (liability)/asset

(4+5+6+7) (2) (2,581,912) (2,201,588) (4,977,497) (927,385) (965,470) (985,943) (8,322,565) (7,948,422) (7,618,577) (1,480,992) (1,260,178) (944,387)

(1) Changes occurred after the actuarial valuation from June.

(2) Refers to the portion of the surplus/(deficit) due from the sponsor.

d.4) Maturity profile of defined benefit actuarial obligations

Duration(1) Expected benefit payments(2)

Up to 1 year 1 to 2 years 2 to 3 years Over 3 years Total

Plano 1 (Previ) 9.26 13,344,410 13,219,075 13,061,423 246,144,573 285,769,481

Plano Informal (Previ) 5.53 152,052 139,861 124,753 928,435 1,345,101

Plano de Associados (Cassi) 9.85 751,895 741,758 727,067 15,356,803 17,577,523

Regulamento Geral (Economus) 10.16 449,826 450,453 450,497 10,574,767 11,925,543

Regulamento Complementar 1 (Economus) 11.98 2,457 2,575 2,742 106,446 114,220

Plus I e II (Economus) 6.53 72,764 68,701 63,599 629,584 834,648

Grupo B' (Economus) 8.72 16,208 16,122 15,987 281,046 329,363

Prevmais (Economus) 12.38 19,680 19,814 19,917 686,502 745,913

Multifuturo I (Fusesc) 10.27 6,132 6,095 6,043 139,836 158,106

Plano I (Fusesc) 9.08 42,141 41,949 41,646 782,060 907,796

Plano BEP (Prevbep) 11.62 3,863 4,181 4,393 137,228 149,665

(1) Weighted average duration, in years, of the defined benefit actuarial obligation.

(2) Amounts considered without discounting at present value.


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d.5) Breakdown of the amounts recognized in statement of income relating to defined benefit plans


3rd quarter/2017

Jan 1 to Sep 30, 2017

Jan 1 to Sep 30, 2016

3rd quarter/2017

Jan 1 to Sep 30, 2017

Jan 1 to Sep 30, 2016

3rd quarter/2017

Jan 1 to Sep 30, 2017

Jan 1 to Sep 30, 2016

3rd quarter/2017

Jan 1 to Sep 30, 2017

Jan 1 to Sep 30, 2016

Current service cost (51,569) (163,202) (170,055) -- -- -- (23,943) (74,158) (62,629) (2,761) (9,149) (10,283)

Interest cost (1,943,064) (6,013,002) (6,541,221) (22,899) (73,893) (94,157) (223,064) (678,914) (716,613) (110,886) (335,432) (360,242)

Expected yield on plan assets 1,876,942 5,828,293 6,293,052 -- -- -- -- -- -- 73,455 230,022 282,009

Unrecognized past service cost -- -- -- (7,191) (22,222) (29,919) -- -- -- -- -- --

Expense with active employees -- -- -- -- -- -- (94,023) (282,303) (296,478) (39,155) (120,159) (128,837)

Other adjustments/reversals -- -- -- -- -- -- -- -- -- -- 3,238 3,447

(Expense)/income recognized in the Statement of income

(117,691) (347,911) (418,224) (30,090) (96,115) (124,076) (341,030) (1,035,375) (1,075,720) (79,347) (231,480) (213,906)

d.6) Composition of the plan assets

Plano 1 - Previ Other plans

Jun 30, 2017 Dec 31, 2016 Jun 30, 2016 Jun 30, 2017 Dec 31, 2016 Jun 30, 2016

Fixed income 65,558,346 58,053,582 55,618,091 4,824,522 4,831,482 4,692,337

Equity securities and similar instruments (1) 64,854,679 70,648,892 59,683,589 266,256 294,651 294,664

Real estate investments 9,866,003 9,126,202 8,728,481 196,359 194,858 211,968

Loans and financing 5,468,082 5,254,043 5,117,592 113,047 100,183 97,135

Other 850,265 863,678 740,363 319,816 309,918 299,658

Total 146,597,375 143,946,397 129,888,116 5,720,000 5,731,092 5,595,762

Amounts listed in fair value of plan assets

In the entity’s own financial instruments 10,972,344 11,631,219 8,516,001 29,579 23,926 23,270

In properties or other assets used by the entity 156,184 156,758 150,823 7,746 7,848 8,996

(1) Includes, in Plano de Benefícios 1 from Previ, the amount of R$ 32,966,823 thousand (R$ 30,265,763 thousand on December 31, 2016 and R$ 23,151,174 thousand on June 30, 2016), related to the assets that are not quoted in active markets.


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d.7) Main actuarial assumptions adopted

Plano 1 - Previ Plano Informal - Previ Plano de Associados - Cassi Other plans(1)

Jun 30, 2017 Dec 31, 2016 Jun 30, 2016 Jun 30, 2017 Dec 31, 2016 Jun 30, 2016 Jun 30, 2017 Dec 31, 2016 Jun 30, 2016 Jun 30, 2017 Dec 31, 2016 Jun 30, 2016

Inflation rate (p.a.) 4.87% 5.41% 5.44% 4.74% 5.29% 5.54% 4.88% 5.43% 5.43% 4.87% 5.40% 5.44%

Real discount rate (p.a.) 5.60% 5.77% 6.20% 5.55% 5.84% 6.18% 5.61% 5.75% 6.20% 5.60% 5.77% 6.20%

Nominal rate of return on investments (p.a.) 10.74% 11.49% 11.98% -- -- -- -- -- -- 10.73% 11.48% 11.98%

Real rate of expected salary growth (p.a.) 1.04% 1.04% 1.01% -- -- -- -- -- -- 0.92% 0.92% 0.95%

Actuarial life table Soft AT-2000 (reduced by 10%) Soft AT-2000 (reduced by 10%) Soft AT-2000 (reduced by 10%) AT-2000 / AT-83 AT-2000

Capitalization method Projected credit unit Projected credit unit Projected credit unit Projected credit unitt

(1) As of June 2017, Regulamento Complementar 1 and Grupo B' started to use AT-83.

In order to determine the values for the defined benefit plans, the Bank uses methods and assumptions different from those submitted by the entities sponsored.

CPC 33 (R1) prescribes the accounting, as well as the effects that occurred or that will occur in the entities that sponsor employee benefits plans. However, the sponsored entities

themselves must comply with the rules issued by the Ministério da Previdência Social, through the Conselho Nacional de Previdência Complementar (CNPC) and the

Superintendência Nacional de Previdência Complementar (Previc). The most significant differences are in the definition of the assumptions used in Plano 1 – Previ.


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d.8) Differences in assumptions of the Plano 1 - Previ

Bank Previ

Real discount rate (p.a.) 5.60% 5.00%

Evaluation of assets - exclusive funds Market Value or Discounted Cash Flow Discounted Cash Flow

Capitalization method Projected credit unit Aggregate method

d.9) Reconciliation of amounts calculated in Plan 1 - Previ/Bank

Plan assets Actuarial liabilities Effect in surplus/(deficit)

Jun 30, 2017 Dec 31, 2016 Jun 30, 2016 Jun 30, 2017 Dec 31, 2016 Jun 30, 2016 Jun 30, 2017 Dec 31, 2016 Jun 30, 2016

Value determined - Previ 130,022,056 130,196,465 124,456,775 (145,664,160) (144,371,339) (142,474,276) (15,642,104) (14,174,874) (18,017,501)

Incorporation of values from agreement 97

13,877,279 14,251,784 14,531,967 (13,877,279) (14,251,784) (14,531,967) -- -- --

Incorporation of values from Grupo Especial

1,125,311 1,145,314 1,162,458 (1,125,311) (1,145,314) (1,162,458) -- -- --

Adjustment in the value of plan assets (1)

1,572,729 (1,647,166) (10,263,084) -- -- -- 1,572,729 (1,647,166) (10,263,084)

Adjustment in the liabilities - discount rate/capitalization method

-- -- -- 8,877,626 11,418,863 18,461,508 8,877,626 11,418,863 18,461,508

Value determined - Bank 146,597,375 143,946,397 129,888,116 (151,789,124) (148,349,574) (139,707,193) (5,191,749) (4,403,177) (9,819,077)

(1) Refers mainly to adjustments made by the Bank in determining the fair value of the investments in Litel, Neoenergia and in securities held to maturity.

d.10) Sensitivity analysis

The sensitivity analysis is performed for changes in a single assumption while maintaining all others constant. This is

unlikely in reality, since some of the assumptions are correlated.

The same methodology was used to perform the sensitivity analysis in each of the periods presented. However, the

discount rate was updated to reflect market conditions.

Jun 30, 2017 Life table Salary increase Interest rate

+1 age -1 age +0.25% -0.25% +0.25% -0.25%

Plano 1 (Previ) Present value of defined

benefit actuarial obligations 151,789,124 148,382,478 155,157,470 151,837,089 151,741,159 148,459,521 155,257,747

Surplus/(deficit) in the plan (5,191,749) (1,785,103) (8,560,095) (5,239,714) (5,143,784) (1,862,146) (8,660,372)

Plano Informal (Previ) Present value of defined

benefit actuarial obligations 934,855 900,820 969,648 -- -- 922,652 947,411

Surplus/(deficit) in the plan (934,855) (900,820) (969,648) -- -- (922,652) (947,411)

Plano de Associados (Cassi)

Present value of defined benefit actuarial obligations

8,284,491 8,096,030 8,470,384 8,287,060 8,281,922 8,091,049 8,486,742

Surplus/(deficit) in the plan (8,284,491) (8,096,030) (8,470,384) (8,287,060) (8,281,922) (8,091,049) (8,486,742)

Regulamento Geral (Economus)


6,112,260 6,002,660 6,218,635 -- -- 5,967,253 6,263,441

Surplus/(deficit) in the plan (1,808,750) (1,699,150) (1,915,125) -- -- (1,663,743) (1,959,931)



43,815 45,447 42,223 -- -- 42,291 45,418

Surplus/(deficit) in the plan (1,204) (2,836) 388 -- -- 320 (2,806)

Plus I e II (Economus)


473,326 455,341 491,505 -- -- 466,123 480,461


Grupo B' (Economus) Present value of defined



Prevmais (Economus)


301,880 300,896 302,916 304,402 299,401 293,242 310,984

Surplus/(deficit) in the plan 86,010 86,994 84,974 83,488 88,489 94,648 76,905

Multifuturo I (Fusesc) Present value of defined


Surplus/(deficit) in the plan 123,154 124,101 122,238 -- -- 125,045 121,177

Plano I (Fusesc) Present value of defined


Surplus/(deficit) in the plan 64,860 74,625 55,280 -- -- 75,382 53,926

Plano BEP (Prevbep) Present value of defined

benefit actuarial obligations 67,534 66,545 68,489 67,697 67,373 65,710 69,445

Surplus/(deficit) in the plan 45,548 46,537 44,593 45,385 45,709 47,372 43,637


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e) Overview of actuarial asset/(liability) recorded by the Bank

Actuarial assets Actuarial liabilities

Sep 30, 2017 Dec 31, 2016 Sep 30, 2016 Sep 30, 2017 Dec 31, 2016 Sep 30, 2016

Plano 1 (Previ) -- -- -- (2,581,912) (2,201,588) (4,977,497)

Plano Informal (Previ) -- -- -- (927,385) (965,470) (985,943)

Plano de Associados (Cassi) -- -- -- (8,322,565) (7,948,422) (7,618,577)

Regulamento Geral (Economus) -- -- -- (967,998) (829,730) (568,981)


-- -- -- (237) (2,659) (2,547)

Plus I e II (Economus) -- -- -- (468,551) (409,315) (395,184)

Grupo B' (Economus) -- -- -- (206,960) (170,302) (168,481)

Prevmais (Economus) 43,429 36,846 42,059 -- -- --

Multifuturo I (Fusesc) 62,796 57,514 54,162 -- -- --

Plano I (Fusesc) 33,277 33,586 70,963 -- -- --

Plano BEP (Prevbep) 23,252 23,882 23,622 -- -- --

Total 162,754 151,828 190,806 (13,475,608) (12,527,486) (14,717,210)

f) Allocations of the Surplus - Plano 1


Fundo Paridade

Opening balance 130,093 124,998 129,900 120,378

Restatement 1,754 2,841 6,419 12,004

Contributions to Plano 1 - Agreement 97 -- -- (4,472) (4,543)

Closing balance 131,847 127,839 131,847 127,839

Fundo de Utilização

Opening balance 9,485,776 9,376,684 9,432,110 8,959,543

Contributions to Plano 1 (131,654) (130,554) (395,792) (393,752)

Restatement 127,216 212,026 445,020 892,365

Closing balance 9,481,338 9,458,156 9,481,338 9,458,156

Total funds allocated surplus 9,613,185 9,585,995 9,613,185 9,585,995

f.1) Fundo Paridade

In 2000, the cost of switching to equal contributions was based on the Plano de Benefícios 1’s surplus at the time. The

agreement (between Banco do Brasil and participants) allowed the Bank to recognize an asset of

R$ 2,227,254 thousand in Allocation funds surplus. The asset is recalculated each month based on the actuarial goal:

INPC (the National Consumer Price Index published by the Brazilian Institute of Geography and Statistics – IBGE) + 5%

p.a..

Since January 2007, the asset has been used to offset financial liabilities related to the agreement signed with Previ in

1997. This agreement granted additional benefits to participants in Plano 1 (Previ) who joined the plan prior to April 14,

1967, and had not yet retired.

f.2) Fundo de Utilização

This fund contains resources transferred from the Allocation Fund (because of the plan’s surplus), which the Bank can

use for repayments or to reduce future contributions (after first meeting all applicable legal requirements). The Fundo de

Utilização is recalculated based on the actuarial target (INPC + 5% p.a.).


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27 - PROVISIONS, CONTINGENT ASSETS AND LIABILITIES, LEGAL LIABILITIES – TAXES AND SOCIAL SECURITY

a) Contingent assets

Contingent assets are not recognized in the financial statements according to CPC 25 – Provisions, Contingent Liabilities

and Contingent Assets.

b) Labor lawsuits

The Bank is a party to labor claims involving mainly former employees, banking industry unions or former employees of

companies that provide services (outsourced). These claims cover requests of compensation, overtime, incorrect

working hours, and additional functions bonus, among others.

c) Tax lawsuits

The Bank, in spite of its conservative profile, may receive tax inquiries during inspections by the tax authorities, which

could lead to the issuance of tax notices. These notices relate to the calculation base for income/social contribution taxes

(mainly regarding deductibility) and matters involving payment of other taxes (based upon the occurrence of certain

events). Most claims arising from the notices relate to service tax (ISSQN), income tax, social contribution (CSLL), the

Social Integration Program (PIS), Contribution to Social Security Financing (Cofins), Tax on Financial Transactions (IOF),

and Employer Social Security Contributions (INSS). As a guarantee in some of these cases, the Bank has pledged

collateral in the form of cash, bonds, real estate or judicial deposits when necessary, preventing the Bank to be included

in restrictive registration, as well as not to obstruct the semiannual renewal of its tax regularity certificate.

d) Civil lawsuits

Civil lawsuits relate mainly to claims from customers and users of the Bank’s network. In most cases, they are requesting

indemnification for material or moral damages arising from banking products or services and Economic Plans (Bresser

Plan, Verão Plans and Collor Plans I and II).

Indemnifications for material and moral damages are based on consumer protection laws and generally settled in specific

civil courts. The awards are limited to forty times the minimum wage.

The Bank is a defendant in claims seeking the payment and refunding the overpayment of the difference between the

actual inflation rate and the inflation rate used for the adjustment of financial investments and rural credit when Economic

Plans were implemented in the late 1980’s and early 1990’s.

Although it complied with prevailing laws and regulations at the time, the Bank set-up provisions for these lawsuits. The

provisions consider claims brought against the Bank in which the risk of loss is considered probable. Loss probabilities

are determined after an analysis of each claim considering the most recent decisions in the Superior Courts of Justice

(STJ).

With respect to cases involving the financial investments related to Economic Plans, the Federal Supreme Court (STF)

suspended prosecution of all cases after the discovery phase. This will be the case until the court issues a definitive

ruling.


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e) Provisions for labor, tax and civil claims – probable loss

The Bank recorded a provision for labor, tax and civil demands with risk of loss probable, quantified using individual or

aggregated methodology (includes processes with the author's probability of success equal to remote, possible or

probable), according to the nature and / or process value.

The estimates of outcome and financial effect are determined by the nature of the claims, the management's judgment,

by the opinion of legal counsel on the basis of process elements, complemented by the complexity and the experience of

similar demands.

The Management considers to be sufficient the provision for losses of labor, tax and civil claims.

e.1) Changes in the provisions for civil, tax and labor claims classified as probable


Labor lawsuits

Opening balance 2,559,471 2,598,301 2,508,268 2,169,106

Addition 358,494 854,728 946,002 1,699,518

Reversal of the provision (30,839) (722,329) (164,632) (746,032)

Write off (277,935) (294,115) (803,858) (809,265)

Inflation correction and exchange rate changes 54,807 165,758 178,218 289,016

Closing balance 2,663,998 2,602,343 2,663,998 2,602,343

Tax lawsuits

Opening balance 273,105 267,932 276,015 245,695

Addition 26,726 39,498 57,328 136,453

Reversal of the provision (45,073) (47,286) (72,628) (121,676)

Write off (10,248) (2,442) (28,761) (10,435)


Closing balance 248,782 269,701 248,782 269,701

Civil lawsuits

Opening balance 6,666,100 6,811,150 6,897,180 7,150,581

Addition 689,039 3,568,063 1,452,146 5,326,080

Reversal of the provision (171,129) (3,212,629) (603,857) (4,728,107)

Write off (447,641) (312,157) (1,155,213) (1,086,330)


Closing balance 6,774,615 6,949,355 6,774,615 6,949,355

Total labor, tax and civil 9,687,395 9,821,399 9,687,395 9,821,399

e.2) Expected outflows of economic benefits

Labor Tax Civil

Up to 5 years 2,595,955 131,003 5,522,808

From 5 to 10 years 67,951 91,166 1,222,615

Over 10 years 92 26,613 29,192

Total 2,663,998 248,782 6,774,615

The scenario of unpredictability of the duration of proceedings, and the possibility of changes in the case law of the

courts, make values and the expected outflows of economic benefits uncertain.


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f) Contingent liabilities – possible loss

The labor, tax and civil lawsuits for which the risk of loss is considered possible do not require provisions when the final

outcome of the process is unclear and when the probability of losing is less than more-likely-than-not and higher than the

remote.

f.1) The balances of contingent liabilities classified as possible loss

Sep 30, 2017 Dec 31, 2016 Sep 30, 2016

Labor lawsuits 195,990 171,422 197,694

Tax lawsuits (1) 12,046,708 10,702,278 10,244,339

Civil lawsuits 2,378,316 1,975,843 2,423,503

Total 14,621,014 12,849,543 12,865,536

(1) The main contingencies originate from (i) notices of labor infraction form the National Social Security Institute (INSS) aiming at the payment of contributions applicable on year-end bonuses paid under the collective agreements in the period from 1995 to 2006, in the amount of R$ 3,556,440 thousand, public transport pay and use of private car by employees of Banco do Brasil, in the amount of R$ 307,797 thousand and employee profit sharing corresponding to the period from April 2001 to October 2003, in the amount of R$ 933,071 thousand; and (ii) notices of tax assessment drawn by the Treasuries of the Municipalities, which amounts R$ 1,611,271 thousand.

g) Deposits in guarantee

g.1) Deposits given in guarantee of contingencies

Sep 30, 2017 Dec 31, 2016 Sep 30, 2016

Labor lawsuits 5,440,445 5,126,635 5,059,535

Tax lawsuits 8,102,725 7,720,456 7,460,891

Civil lawsuits 22,904,151 20,274,118 19,752,353

Total 36,447,321 33,121,209 32,272,779

h) Legal liabilities

The Bank has a record in Legal liabilities – taxes and social security and Other liabilities – sundry the amount of

R$ 16,259,855 thousand (R$ 15,441,581 thousand on December 31, 2016 and R$ 15,046,333 thousand on September

30, 2016) relating to the following action:

In 1998, the Bank requested full compensation of the accumulated tax losses of income tax and the negative calculation

bases of social contribution. Since then, the Bank has fully offset tax losses and negative bases with the due amount of

income tax and social contribution, making a full deposit of the amount due (70% of the amount offset), which led to the

court order, determining the Suspension of the enforceability of said taxes. Currently, the Bank is awaiting the judgment

of an extraordinary appeal (RE 591.340-SP) in which there was recognition of the general repercussion of the matter by

the STF. As a result, RE 354.322-DF, floated by the Bank, will be overwritten in the TRF 1ª Region, until judgment of the

general repercussion.

The offsetting of tax loss carry forward and recoverable social contribution has resulted in the write-off of deferred tax

assets, observing the limitation of 30%.

Deferred taxes including corporate income tax and social contribution on the interest / inflation restatements of judicial

deposits are being offset with the tax credits resulting from the provision related to that judicial deposit, in accordance

with article 1, item II, paragraph 2 of CMN Resolution 3,059/2002, with no impact on income.

Based on the hypothesis of a successful outcome to this lawsuit, in September 2005 and January 2009, the Bank would

have consumed the entire stock of tax loss carry forward and recoverable social contribution. Therefore, since October

2005 and February 2009, the amounts of income tax and social contribution are being paid in full. Moreover, there would

be a reclassification of resources from the account used to record judicial deposits to that of cash and cash equivalents.

Tax assets related to judicial deposits (main value) would be written-off against the liabilities of income tax and social

contribution and would be reversed against income, the provision for tax risks related to the restatement of the deposits

amounts to R$ 9,688,182 thousand.


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In the other hand, based on the hypethesis of an unsuccessful in its lawsuit (situation in which the amounts deposited

judicially would be converted into income in favor of the Fazenda Nacional (Federal Tax Authority)), the portions of

income tax, tax assests on tax losses and social contribution to offset would be reclassified to the representative asset

account income tax recoverable and social contribution recoverable, that could be used since the accrual period starting

October 2005 and February 2009, observing the limitation of 30%. The taxes recoverable, which would result from the

adjustments to prior year Statements of economic-fiscal information of businesses, corresponds to R$ 6,019,871

thousand as of September 30, 2017 and updating by the Selic rate results in a further recoverable amount of R$

4,030,372 thousand. This sum adjusts the provision for tax risks with respect to the updating of court deposits so that it

will be sufficient to fully cancel the risk of a loss.

h.1) The amounts related to this matter

Sep 30, 2017 Dec 31, 2016 Sep 30, 2016

Judicial deposits 18,043,846 17,431,080 17,180,154

Amount realized (70%) 7,817,011 7,817,011 7,817,011

Inflation corrections 10,226,835 9,614,069 9,363,143

Legal obligations – provision for lawsuit 16,259,855 15,441,581 15,046,333

Tax losses of income tax 3,002,033 3,002,033 3,002,033

Social contribution negative bases/social contribution recoverable 3,569,640 3,569,640 3,569,640

Provision for tax risks (restatement of deposit) 9,688,182 8,869,908 8,474,660

28 - RISK AND CAPITAL MANAGEMENT

a) Risk management process

For Banco do Brasil, risk management is one of the most important elements of the decision-making process.

The Institution has a process of identification of risks that will be part of the Institution's risks inventory, performed by

analysing the business segments that are explored, direct and indirectly, considering the Entities Related to Banco do

Brasil.

Once the risk inventory and its respective concepts are defined, the relevance of the risks is determined based on

quantitative and qualitative criteria specified in the Corporate Manual. The risks below are part of Banco do Brasil's

Financial Conglomerate Relevant Risks Corporate Range:

a) Credit Risk; b) Counterparty Credit Risk; c) Concentration Risk; d) Liquidity Risk; e) Operational Risk; f) Market Risk; g) Banking Book Interest Rate Risk; h) Strategic Risk; i) Reputational Risk; j) Environmental Risk; k) Legal Risk; l) Contagion Risk; m) Complementary Pension Fund Entities and Private Health Insurance Plan Operators for Employees Risk; n) Model Risk; and o) Compliance Risk.

In the Bank, the collegiate risk management is performed segregated from the business units. Risk management policies

are approved by the Board of Directors. The Risk, Assets, Liabilities, Liquidity and Capital Management Superior

Committee (CSGRC), a forum composed of Vice-Presidents, is responsible for implementation and monitoring of these

policies. The guidelines issued by the CSGRC are conducted by specific executive committees (Asset, Liability, Liquidity

and Capital Management Executive Committee – CEGAPC and Risk Management and Internal Control Executive

Committee - CEGRC), which are groups composed by Directors.


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To learn more about the risk management process in Banco do Brasil, visit the information available in the Risk

Management Report at the website bb.com.br/ri.


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Financial instruments - fair value

Financial instruments recorded in balance sheet accounts, compared to fair value:

Sep 30, 2017 Dec 31, 2016 Sep 30, 2016 Unrealized gain/loss, net of tax effects

Book value Fair value Book value Fair value Book value Fair value On income On shareholders’ equity


Assets

Short-term interbank investments 411,344,256 410,568,796 405,711,672 405,651,496 427,803,215 427,887,809 (775,460) (60,176) 84,594 (775,460) (60,176) 84,594

Securities 136,039,889 135,143,782 119,656,119 119,005,358 122,685,688 122,338,826 (1,197,814) (2,623,471) (1,651,811) (896,107) (650,761) (346,862)

Adjustment of securities available for sale (Note 8.a) -- -- -- -- -- -- (301,707) (1,972,710) (1,304,949) -- -- --

Adjustment of securities held to maturity (Note 8.a) -- -- -- -- -- -- (896,107) (650,761) (346,862) (896,107) (650,761) (346,862)

Derivative financial instruments 1,450,880 1,450,880 1,612,563 1,612,563 2,985,270 2,985,270 -- -- -- -- -- --

Loan operations 541,457,759 535,822,214 564,923,340 550,716,970 582,450,257 569,863,378 (5,635,545) (14,206,370) (12,586,879) (5,635,545) (14,206,370) (12,586,879)

Liabilities

Interbank deposits 19,648,913 19,841,286 20,664,801 21,238,847 23,918,604 24,595,501 (192,373) (574,046) (676,897) (192,373) (574,046) (676,897)

Time deposits 201,040,265 200,990,174 204,150,246 204,053,427 203,447,682 203,410,796 50,091 96,819 36,886 50,091 96,819 36,886

Liabilities related to repurchase agreement 417,870,284 416,497,428 374,634,032 373,070,084 410,470,039 409,196,875 1,372,856 1,563,948 1,273,164 1,372,856 1,563,948 1,273,164

Borrowings and onlendings 101,042,498 101,286,666 103,492,518 103,735,064 107,890,584 108,180,467 (244,168) (242,546) (289,883) (244,168) (242,546) (289,883)

Derivative financial instruments 1,719,626 1,719,626 1,870,391 1,870,391 2,299,995 2,299,995 -- -- -- -- -- --

Other liabilities 206,110,432 206,110,432 220,141,891 220,036,070 224,398,619 224,153,582 -- 105,821 245,037 -- 105,821 245,037

Unrealized gain/(loss), net of tax effects (6,622,413) (15,940,021) (13,565,789) (6,320,706) (13,967,311) (12,260,840)


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Determination of fair value of financial instruments

Short-term interbank investments: The fair value was obtained by discounting future cash flows, using interest rates

traded by the market in similar operations on the balance sheet date.

Securities: Securities are accounted for by market value, as allowed for in Bacen Circular No. 3,068/2001, except for

securities held to maturity. The fair value of the securities, including those held to maturity, is obtained from rates

practised in the market.

Loan operations: The fair value of fixed rate operations has been estimated through the future cash flow discount

method, considering the interest rates utilized by the Bank when originating similar operations at the balance sheet date.

For operations that are remunerated by floating rates, the fair value was equivalent to the book value itself.

Interbank deposits: The fair value has been calculated by the discount of the future cash flows using rates currently

applicable in the market for fixed rate deposits. In case of floating operations the maturities of which are less than 30

days, the book value was deemed approximately equivalent to the fair value.

Time deposits: The same criteria adopted for interbank deposits are utilized in the determination of the fair value.

Liabilities related to repurchase agreement: For operations at fixed rates, the fair value was determined calculating the

discount of the estimated cash flows adopting a discount rate equivalent to the rates applied in contracting similar

operations on the last trading day. For floating operations, book values have been deemed approximately equivalent to

market value.

Borrowing and onlendings: Such operations are exclusive to the Bank with no similar operations in the market. Given

their specific characteristics, the exclusive rates for each fund, the inexistence of an active market or similar traded

instruments, the fair values of such operations are considered equivalent to the book value.

Other liabilities: Fair values have been determined by the discounted cash flow method, which takes into account interest

rates offered in the market for obligations with similar maturities, risks and terms.

Derivatives financial instruments: According to Bacen Circular No. 3,082/2002, derivatives are recorded at market value.

The market value of derivatives was estimated in accordance with internal pricing models, with the use of the rates

disclosed for transactions with similar terms and indices on the last business day of the period.

Other financial instruments: Included or not in the balance sheet, fair value is approximately equivalent to the

corresponding book value.

Source of information regarding assets and liabilities measured at fair value in the balance sheet

The Bank’s fair value measurements consider the following input levels:

Level 1 – Price quotations are derived from active markets for identical financial instruments. Financial instruments are

considered to be quoted in an active market if prices are readily available and are based on regularly occurring arm’s

length transactions.

Level 2 – Requires the use of information obtained from the market that is not Level 1. This includes prices quoted in

non-active markets for similar assets and liabilities and information that can be corroborated in the market.

Level 3 – Requires the use of information not obtained from the market to measure fair value. When there is not an

active market for an instrument, the Bank uses valuation techniques that incorporate internal data. The Bank’s

methodologies are consistent with commonly used techniques for pricing financial instruments.


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Assets and liabilities measured at fair value in the balance sheet

Balance at Sep 30,

2017 Level 1 Level 2 Level 3

Assets 132,185,742 98,933,946 33,251,796 --

Trading securities, measured by market value 6,835,768 5,171,440 1,664,328 --

Derivative financial instruments 1,450,880 -- 1,450,880 --

Available-for-sale securities, measured by market value 123,899,094 93,762,506 30,136,588 --

Liabilities (1,719,626) -- (1,719,626) --

Hedge funding -- -- -- --

Derivative financial instruments (1,719,626) -- (1,719,626) --

Balance at Dec 31,


Assets 115,673,071 77,497,818 38,175,253 --




Liabilities (2,232,014) -- (2,232,014) --

Hedge funding (361,623) -- (361,623) --


Balance at Sep 30,


Assets 122,705,372 75,603,477 47,101,895 --




Liabilities (2,650,424) -- (2,650,424) --

Hedge funding (350,429) -- (350,429) --


Sensitivity analysis (CVM Instruction No. 475/2008)

Banco do Brasil manages its risks in a dynamic process, identifying, measuring, assessing, monitoring, reporting,

controlling, and mitigating market risk exposure arising on its positions. In this context, the Bank takes into account the

risk limits defined by the Strategic Committees and possible scenarios, to act in a timely manner to reverse any adverse

results.

In accordance with CMN Resolution No. 4,557/2017 and with Bacen Circular No. 3,354/2007, to manage more efficiently

its transactions exposed to market risks, Banco do Brasil separates its transactions, including derivative financial

instruments, as follows:

1) Trading Book: consisting of own positions held for trading or 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 of transactions not classified in the Trading Book whose feature is held to maturity.

The sensitivity analysis for all the operations with assets and liabilities of the Balance Sheet, in compliance with CVM

Instruction No. 475/2008 does not adequately reflect the market risk management process or the accounting practices

adopted by the Bank.

In order to determine the sensitivity of the Bank's capital to the impacts of market volatility, simulations were performed

with three likely scenarios, two of which assume adverse movements for the Bank. The scenarios used are set out

below:


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Scenario I: Likely situation, which reflects the perception of the Bank’s senior management, the scenario most likely to

occur for a 3-month horizon, considering macroeconomic factors and market information (B3, Anbima, etc.).

Assumptions: exchange rate real/dollar of R$ 3,20 and reduction the Selic rate to 6.90% per annum based on market

conditions observed on September 30, 2017.

Scenario II: Possible situation. Assumptions adopted: parallel shock of 25.00% in the risk variables, based on market

conditions observed on September 30, 2017 considering the worst losses by risk factor and, therefore, ignoring the

dynamics of correlation between macroeconomic factors.

Scenario III: Possible situation. Assumptions adopted: parallel shock of 50.00% in the risk variables, based on market

conditions observed on September 30, 2017 considering the worst losses by risk factor and thus ignoring the dynamics

of correlation between macroeconomic factors.

The tables below summarize the results for the Trading Portfolio (Trading), composed of public and private securities,

derivative financial instruments and funds obtained through repurchase agreements:

Risk factor Concept

Scenario I

Sep 30, 2017 Dec 31, 2016 Sep 30, 2016

Variation of rates

Income/ (expense)

Variation of rates

Income/ (expense)

Variation of rates

Income/ (expense)

Prefixed rate

Risk of variation of

prefixed interest rates

Increase 62,166 Decrease (18,120) Decrease (859)

TMS and CDI indices

Risk of variation of interest rate

indices

-- -- Increase 1 Increase 36

IPCA index Risk of

variation of inflation indices

Increase 8,195 Decrease 11,344 Decrease 263

Exchange rates variation


foreign exchange rates

Increase 4,717 Increase 5,883 Increase 5,743

Risk factor Concept

Scenario II

Sep 30, 2017 Dec 31, 2016 Sep 30, 2016

Variation of rates

Income/ (expense)

Variation of rates

Income/ (expense)

Variation of rates

Income/ (expense)

Prefixed rate



Decrease (100,138) Decrease (36,332) Decrease (6,183)

TMS and CDI indices


indices

-- -- Decrease -- Increase (11)

IPCA index Risk of


Decrease (6,696) Increase (8,876) Increase (755)






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Risk factor Concept

Scenario III

Sep 30, 2017 Dec 31, 2016 Sep 30, 2016

Variation of rates

Income/ (expense)

Variation of rates

Income/ (expense)

Variation of rates

Income/ (expense)

Prefixed rate




TMS and CDI indices


indices

-- -- Decrease -- Increase (22)

IPCA index Risk of


Decrease (12,940) Increase (16,402) Increase (1,486)





For 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 or accounting impact on the Bank's income as a result of the

portfolio composition which is principally: loan operations (consumer credit, agribusiness, working capital, etc.); retail

funding (demand, time, and savings deposits), and securities, which are recorded in the books using the contracted

interest rates. In addition, it should be pointed out that these portfolios, except the securities available for sale, have as

their principal characteristic the intention to hold the respective operations 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 instruments (natural

hedge), hence minimizing the impacts of a stress scenario.

The tables below show a summary of the Trading Portfolio (Trading) and of the Banking Book for the financial and non-

financial entities controlled by the bank:

Risk factor Concept

Scenario I

Sep 30, 2017 Dec 31, 2016 Sep 30, 2016

Variation of rates

Income/ (expense)

Variation of rates

Income/ (expense)

Variation of rates

Income/ (expense)

Prefixed rate Risk of variation

of prefixed interest rates

Decrease 6,088,549 Decrease 6,022,914 Decrease 1,962,865

TR


indices

Decrease (3,371,930) Decrease (4,647,926) Decrease (1,740,111)

TBF Decrease (4,872) Decrease (13,544) Increase 1,160

TJLP Decrease 47,895 Decrease 28,296 Decrease 10,292

TMS and CDI Increase 4,498,277 Increase 68,490 Increase 18,460

IGP-M

Risk of variation of inflation

indices


IGP-DI -- -- Decrease 203 Decrease 72

INPC Decrease 190,339 Decrease 207,437 Decrease 67,953

IPCA Decrease 1,551,381 Decrease 1,199,604 Decrease 415,655

Foreign currency rates

Risk of variation of foreign currency indices

Increase 738,687 Increase 886,493 Increase 1,149,547

Exchange rate Risk of variation

of foreign exchange rates

Increase 23,486 Increase 42,445 Increase 33,880


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Risk factor Concept

Scenario II

Sep 30, 2017 Dec 31, 2016 Sep 30, 2016

Variation of rates

Income/ (expense)

Variation of rates

Income/ (expense)

Variation of rates

Income/ (expense)



Increase (9,756,813) Increase (10,146,913) Increase (10,377,302)

TR


indices


TBF Decrease (2,011) Decrease (2,522) Decrease (2,676)

TJLP Increase (7,792) Increase (43,223) Increase (14,054)

TMS and CDI Increase (18,528) Decrease (5,060) Decrease (17,171)

IGP-M


indices

Increase (441,444) Decrease (147,832) Decrease (42,183)

IGP-DI -- -- Increase (231) Increase (207)

INPC Increase (148,024) Increase (210,708) Increase (190,055)

IPCA index Increase (1,311,578) Increase (1,024,907) Increase (1,111,046)



Decrease (463,987) Decrease (1,070,351) Decrease (1,232,252)




Risk factor Concept

Scenario III

Sep 30, 2017 Dec 31, 2016 Sep 30, 2016

Variation of rates

Income/ (expense)

Variation of rates

Income/ (expense)

Variation of rates

Income/ (expense)



Increase (18,705,510) Increase (19,332,178) Increase (19,730,658)

TR


indices


TBF Decrease (4,037) Decrease (5,066) Decrease (5,377)

TJLP Increase (17,574) Increase (87,006) Increase (28,213)

TMS and CDI Increase (37,056) Decrease (10,119) Decrease (34,344)

IGP-M


indices

Increase (955,012) Decrease (364,349) Decrease (120,930)

IGP-DI -- -- Increase (461) Increase (414)

INPC Increase (291,919) Increase (412,498) Increase (372,800)

IPCA index Increase (2,482,791) Increase (1,926,332) Increase (2,089,888)



Decrease (951,056) Decrease (2,210,173) Decrease (2,533,954)




The scenarios used for preparing the framework for sensitivity analysis must use situations of deterioration of at least

25% and 50% of the variable risks, on an individualized basis, as determined by CVM Instruction No. 475/2008. Thus,

the combined analysis of the results does not reflect real expectations, for example, simultaneous shocks of increase in

the prefixed interest rate and reduction of the TR rate are not consistent from the macroeconomic perspective.

The derivative transactions classified in the Banking Book, do not represent a relevant market risk to Banco do Brasil, as

these positions are usually originated with the following objectives:

Swapping the index of funding and lending transactions performed to meet customer needs;

Hedging market risk, the purpose and effectiveness of which are described in Note 8.d. Also in this transaction, the interest and exchange rate variations have no effects on the Bank's income.

On September 30, 2017, the Banco do Brasil did not enter into any transaction classified as an exotic derivative, as

described in CVM Instruction No. 475/2008 - Attachment II.


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b) Capital management

On February 23, 2017, Bacen issued CMN Resolution No. 4,557, which defines the scope and requirements of the risk

management structure and the capital management structure for financial institutions.

In compliance with the Resolution, the Board of Directors of Banco do Brasil named the Vice President of Internal

Controls and Risk Management as the Chief Risk Officer (CRO), responsible for risk management, and the Director of

Controllership as responsible for the capital management.

The Bank’s organizational structure allows it to identify and evaluate significant risks incurred, including risks not covered

by the Minimum Required Reference Equity (MRER). The Bank’s policies and management strategies, as well as capital

planning, enable the proactive vision and maintenance of capital at levels compatible with the risks incurred by the

Institution. Periodically, the Bank performs stress tests and their impacts are evaluated by the capital approach.

The corporate units and strategic committees receive capital adequacy management reports. These reports support the

decision-making process of the Bank’s senior management team.

The Internal Capital Adequacy Assessment Process (ICAAP), implemented in the Bank on June 30, 2013, follows the

disposed on CMN Resolution No. 4,557/2017. At the Bank, the responsibility for coordinating ICAAP was assigned to the

Risk Management Directorship. In turn, the Internal Controls Directorship, an independent and segregated area of the

capital management structure, is the responsible for validating the ICAAP. Finally, Internal Audit is responsible for

performing an annual evaluation of the overall capital management process.

To learn more about the risk and capital management at Banco do Brasil, visit the website bb.com.br/ir.

Capital adequacy ratio

The Bank calculated the Capital Adequacy Ratio in accordance with criteria established by Bacen. This criteria requires

the calculation of Referential Equity (RE) and MRER as a percentage of Risk Weighted Assets (RWA).

Basel III became effective on October 01, 2013 in Brazil. Recommend by the Basel Committee on Banking Supervision,

Basel III represents a new set of regulations governing the capital structure of financial institutions. The new rules

establish the following:

a new methodology for calculating regulatory capital, which continues to be divided into Tier I and Tier II. Tier I consists of Common Equity Tier I Capital – CET1 (net of regulatory adjustments) and Additional Tier I Capital;

a new methodology for calculating capital requirements, establishing minimum requirements for Referential Equity, Tier I and CET1, and introducing the Additional CET1.

From January 1, 2017, the percentage of deduction of prudential adjustments listed below increased to 80%:

goodwill;

intangible assets recognized after October 01, 2013;

actuarial assets related to defined benefit pension plans, net of deferred tax liabilities;

non-controlling interests;

direct or indirect investments of greater than 10% in non-consolidated entities similar to financial institutions, insurance companies, reinsurance companies, capitalization companies and open-ended pension funds;

deferred tax assets on temporary differences that rely on the generation of future taxable profits or income to be realized;

deferred tax assets resulting from tax losses on excess depreciation; and

deferred tax assets resulting from tax losses and negative social contribution base on net income.

In accordance with CMN Resolution No. 4,192/2013, these deductions will be implemented gradually between 2014 and

2018 at the rate of 20% per year. However, deferred tax assets on debt issued by financial institutions are an exception,

since they have been fully deducted since October 2013.

On August 28, 2014, Bacen authorized the R$ 8,100,000 thousand perpetual bond included in Additional Tier I Capital to

be considered Common Equity Tier I Capital.


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According to Bacen Resolution No. 4,192/2013 and No. 4,193/2013, from January 2015, the calculation of the

Regulatory Equity (RE) and the amount of Risk-Weighted Assets (RWA) should be elaborated based on Prudential

Conglomerate.

Sep 30, 2017 Dec 31, 2016 Sep 30, 2016

RE - Referential equity 129,152,387 130,453,208 127,060,689

Tier I 89,648,072 90,283,551 87,975,915

Common Equity Tier 1 Capital (CET1) 67,709,672 67,718,439 65,500,135

Shareholders' equity 82,575,294 76,702,977 75,039,488

Instrument qualifying as CET1 8,100,000 8,100,000 8,100,000

Regulatory adjustments (22,965,622) (17,084,538) (17,639,353)

Additional Tier 1 Capital (AT1) 21,938,400 22,565,112 22,475,780

Hybrid instruments authorized in accordance with CMN Resolution No. 4,192/2013

17,344,800 17,840,287 17,769,660

Hybrid instruments authorized in accordance with regulations preceding the CMN Resolution No. 4,192/2013 (1)

4,593,600 4,724,825 4,706,120

Tier II 39,504,315 40,169,657 39,084,774

Subordinated debt qualifying as capital 39,523,718 40,181,808 39,096,379

Subordinated debt authorized in accordance with CMN Resolution No. 4,192/2013 - Financial bills

4,475,632 5,466,093 5,285,933

Subordinated Debt authorized in accordance with regulations preceding the CMN Resolution No. 4,192/2013

35,048,086 34,715,715 33,810,446

Funds obtained from the FCO (2) 27,149,284 25,237,153 24,331,884

Funds raised in financial bills and CD (3) 7,898,802 9,478,562 9,478,562

Deduction from tier II (19,403) (12,151) (11,605)

Funding instruments issued by financial institution (19,403) (12,151) (11,605)

Risk Weighted Assets (RWA) 674,468,258 705,851,280 722,441,901

Credit risk (RWACPAD) 602,898,952 643,214,021 668,871,950

Market risk (RWAMPAD) 15,831,399 18,844,349 16,417,959

Operational risk (RWAOPAD) 55,737,907 43,792,910 37,151,992

Minimum referential equity requirements (4) 62,388,314 69,702,814 71,341,138

Margin on the minimum referential equity required 66,764,073 60,750,394 55,719,551

Tier I Ratio (Tier I/RWA) 13.29% 12.79% 12.18%

Common Equity Tier 1 Capital Ratio (CET1/RWA) 10.04% 9.59% 9.07%

Capital Adequacy Ratio (RE/RWA) 19.15% 18.48% 17.59%

(1) On September 30, 2017, based on Bacen's guidance, the balance of the hybrid capital and the debt instrument authorized by Bacen to compose Tier 1 Capital of Reference Equity was considered in accordance with CMN Resolution 3,444/2007 and does not meet the relevant entry criteria, also related to the orientation established in article 28, sections I to X of CMN Resolution 4,192/2013.

(2) According to CMN Resolution No. 4,192/2013, balances of the FCO are eligible to compose the RE.

(3) On September 30, 2017, it was considered the balance of subordinated debt instruments that composed the RE in December 31, 2012, applying on it the limit of 50%, as determined by CMN Resolution No. 4,192/2013.

(4) According to CMN Resolution No. 4,193/2013, corresponds to the application of the "F" factor to the amount of RWA, where "F" equals: 11%, from October 1, 2013 to December 31, 2015; 9.875% from January 1, 2016 to December 31, 2016; 9.25%, from January 1, 2017 to December 31, 2017; 8.625% from January 1, 2018 to December 31, 2018 and 8%, from January 1, 2019.


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Regulatory adjustments deducted from CET1:

Sep 30, 2017 Dec 31, 2016 Sep 30, 2016

Significant investments and tax credits resulting from temporary differences that rely on the generation of future taxable profits or revenues for their realization (amount exceeding the 15% threshold) (1) (2)

(9,376,228) (4,636,849) (5,049,484)

Intangible assets constituted after October 2013 (1) (4,831,321) (4,258,360) (3,514,052)

Tax credits resulting from temporary differences that rely on the generation of future taxable profits or revenues for its realization (amount above 10% threshold) (1)

(4,105,578) (6,099,094) (6,877,262)

Superior investments (excess of 10%) (1) (2,229,443) -- --

Tax credits resulting from tax losses and negative base for social contribution on net income (1)

(1,129,204) (500,439) (336,467)

Non-controlling interests (1) (632,276) (493,315) (464,838)

Goodwill (1) (3) (487,064) (954,281) (1,232,724)

Actuarial assets related to defined benefit pension funds net of deferred tax liabilities (1)

(97,055) (65,809) (76,988)

Tax credits resulting from tax loss of excess depreciation (1) (77,453) (76,391) (76,522)

Deferred assets -- -- (11,016)

Total (22,965,622) (17,084,538) (17,639,353)

(1) Regulatory Adjustments subject to phase-in, according to the CMN Resolution No. 4,192/2013.

(2) On September 30, 2017, related to the investment Financial Institutions (Banco Votorantim and CBSS Bank), R$ 2,400,256 thousand were integrally deducted from the Referential Equity and R$ 2,192,230 thousand were risk-weighted at 250%.

(3) The base value for calculating the goodwill is composed of: R$ 356,965 thousand in the investment line and R$ 251,865 thousand in the intangible assets line. The value in Intangible assets refers to the goodwill paid for the acquisition of Banco Nossa Caixa, merged in November/2009.

c) Fixed asset ratio

On September 30, 2017, the Fixed Asset Ratio for the Prudential Conglomerate, was 16.50% (15.52% on December 31,

2016 and 15.64% on September 30, 2016), and it was calculated in compliance with CMN Resolutions No. 4,192/2013

and No. 2,669/1999.

29 - STATEMENT OF COMPREHENSIVE INCOME


Net income presented in the statement of income 2,840,884 2,246,177 7,902,587 7,070,276

Other comprehensive income

Accumulated other comprehensive income (Note 23.i)

712,004 611,154 745,573 (2,124,446)

Banco do Brasil 741,340 604,979 841,722 (2,555,013)

Subsidiaries abroad (96,029) 9,925 (113,207) 61,946

Associates and subsidiaries 66,693 (3,750) 17,058 368,621

Income and social contribution taxes related to unrealized (gains)/losses (Note 23.i)

(311,967) (166,445) (297,997) 1,293,141

Other comprehensive income, net of income and social contribution taxes

400,037 444,709 447,576 (831,305)

Comprehensive income 3,240,921 2,690,886 8,350,163 6,238,971

Comprehensive income - non-controlling interests 461,508 407,252 1,251,129 1,234,338


3rd quarter 2017


101

30 - OTHER INFORMATION

a) Distribution of dividends and interest on own capital

During a meeting held on November 28, 2016, the Board of Directors approved the maintenance of the payout rate

equivalent to the minimum of 25% of net income for the year 2017, fulfilling the policy for payment of dividends yield

and/or interest on own capital on a quarterly basis, pursuant to article 45 of the Bank's By-Laws.

b) Investiment funds management

Funds managed by BB Gestão de Recursos - Distribuidora de Títulos e Valores Mobiliários S.A.:

Numbers of funds/portfolios (in Units) Balance


Managed funds 724 655 643 852,281,183 730,923,136 674,663,233

Investment funds 713 644 632 835,112,064 715,704,598 660,053,068

Managed portfolios 11 11 11 17,169,119 15,218,538 14,610,165

c) Details in relation to overseas branches, subsidiaries and associates

BB Consolidated

Sep 30, 2017 Dec 31, 2016 Sep 30, 2016

Assets

BB Group 72,256,556 72,334,393 74,150,725

Third parties 77,783,789 89,816,739 91,453,892

TOTAL ASSETS 150,040,345 162,151,132 165,604,617

Liabilities

BB Group 13,544,955 18,929,408 19,321,128

Third parties 124,562,424 131,980,721 136,067,629

Shareholders' equity 11,932,966 11,241,003 10,215,860

Attributable to parent company 11,142,648 10,418,838 9,441,158

Non-controlling interests 790,318 822,165 774,702

TOTAL LIABILITIES 150,040,345 162,151,132 165,604,617


Net income 323,559 348,102 614,305 (236,927)

Attributable to parent company 262,632 272,836 481,064 (452,160)

Non-controlling interest 60,927 75,266 133,241 215,233

d) Consortium funds

Sep 30, 2017 Dec 31, 2016 Sep 30, 2016

Monthly forecast of Purchase Pool Members receivable funds 255,065 227,953 239,603

Obligations of the groups due to contributions 12,695,637 10,633,440 11,312,923

Purchase pool members - assets to be delivered 11,570,795 9,601,023 10,267,587

(In units)

Quantity of groups managed 326 469 509

Quantity of active purchase pool members 649,449 665,495 695,721

Quantity of assets deliverable to members (drawn or winning offer) 54,314 60,858 62,916


2017 Jan 1 to Sep 30,

2016

Quantity of assets (in units) delivered in the

period 29,163 28,814 86,798 81,688


3rd quarter 2017


102

e) Assignment of employees to outside agencies

Federal government assignments are regulated by Law 10,470/2002 and Decree No. 4,050/2001.


Quantiy of employees

Ceded(1)

Cost in the period


Ceded (1)

Cost in the period


Ceded(1)

Cost in the period


Ceded (1)

Cost in the period

With costs for the Bank

Labor unions 212 9,570 219 9,417 212 27,862 219 28,046

Other organizations/entities 2 165 2 203 2 631 2 616

Subsidiaries and associates 3 461 2 338 3 1,177 2 998

Without cost to the Bank

Federal, state and municipal governments 222 -- 266 -- 222 -- 266 --

External organizations (Cassi, Previ, Economus, Fusesc and PrevBep)

535 -- 585 -- 535 -- 585 --

Employee entities 72 -- 83 -- 72 -- 83 --

Subsidiaries and associates 571 -- 574 -- 571 -- 574 --

Total 1,617 10,196 1,731 9,958 1,617 29,670 1,731 29,660

(1) Balance on the last day of the period.

f) Remuneration of employees and managers

Monthly wages paid to employees and Directors of the Banco do Brasil (in Reais):

Sep 30, 2017 Dec 31, 2016 Sep 30, 2016

Lowest salary 2,718.73 2,645.97 2,645.97

Highest salary 45,489.12 44,271.65 44,271.65

Average salary 7,288.29 7,056.03 6,955.65

Management

President 68,781.86 68,781.86 68,781.86

Vice-president 61,564.83 61,564.83 61,564.83

Director 52,177.45 52,177.45 52,177.45

Council members

Fiscal council 5,490.96 5,948.54 5,948.54

Board of Directors 5,490.96 5,948.54 5,948.54

Audit Committee - member 46,959.71 46,959.71 46,959.71

g) Insurance policy of assets

Despite the reduced level of risk to which its assets are subject, the Bank contracts insurance cover for its assets in

amounts considered to be sufficient to cover any losses.

Insurance contracted by the Bank in force on September 30, 2017

Covered risks Amounts covered Value of the premium

Property insurance for the relevant fixed assets 1,154,938 6,198

Life insurance and collective personal accident insurance for the Executive Board (1) 15,080 77

Other 2,700 4,212

Total 1,172,718 10,487

(1) Refers to individual coverage for members of the Executive Board.


3rd quarter 2017


103

h) Extraordinary Retirement Incentive Plan – PEAI

In accordance with the 4th paragraph of article 157 from Law 6,404/1976, the Extraordinary Retirement Incentive Plan -

PEAI was released in November 2016 for employees with the necessary conditions to retire. The plan was closed on

December 09, 2016 and it had 9,409 members. Expenses with incentive payments totaled R$ 1,400,800 thousand in

2016.

i) Senior Debt Through

In October 19,2017, the Bank has issued senior debt through Euro Medium Term Note Program in the amount of US$ 1

billion. The bond has a term of 7 years and yield of 4.7% per year.

KPMG Auditores Independentes

Banco do Brasil S.A.

Report on the review of interim

consolidated financial information

Quarter ended as at September 30, 2017

(a free translation of the original report in Portuguese containing the

Interim Financial Statements prepared by management in accordance

with the accounting practices adopted in Brazil applicable to institutions

authorized to operate by the Central Bank of Brazil)

2


SBS - Qd. 02 - Bl. Q - Lote 03 - Salas 708 a 711

Edifício João Carlos Saad

70070-120 - Brasília, DF - Brasil

Caixa Postal 8587

70312-970 - Brasília, DF - Brasil

Central Tel 55 (61) 2104-2400

Fax 55 (61) 2104-2406

Internet www.kpmg.com.br

KPMG Auditores Independentes, uma sociedade simples brasileira e

firma-membro da rede KPMG de firmas-membro independentes e

afiliadas à KPMG International Cooperative (“KPMG International”),

uma entidade suíça.

KPMG Auditores Independentes, a Brazilian entity and a member

firm of the KPMG network of independent member firms affiliated with

KPMG International Cooperative (“KPMG International”), a Swiss

entity.

Report on the reviews interim consolidated financial

information

To

The Board of Directors, Shareholders and Management of

Banco do Brasil S.A.

Brasília - DF

Introduction

We have reviewed the interim consolidated balance sheet of Banco do Brasil S.A. (The “Bank")

as at September 30, 2017 and the related statements of income, comprehensive income for three

and nine-month periods then ended, changes in shareholders' equity and cash flows for nine-

month period then ended, including the summary of significant accounting policies and

explanatory notes. .

Management is responsible for the preparation and presentation of this consolidated interim

financial information in accordance with the accounting practices adopted in Brazil applicable to

institutions authorized to operate by the Central Bank of Brazil. Our responsibility is to express a

conclusion on this interim consolidated financial information based on our review.

Scope of review

We conducted our review in accordance with Brazilian and International Standards on Review

(NBC TR 2410 – Revisão de Informações Intermediárias Executada pelo Auditor da Entidade

and ISRE 2410 – Review of Interim Financial Information Performed by the Independent Auditor

of the Entity, respectively). A review of interim financial information consists of making inquiries,

primarily of persons responsible for financial and accounting matters, and applying analytical and

other review procedures. A review is substantially less in scope than an audit conducted in

accordance with International Standards on Auditing and consequently does not enable us to

obtain assurance that we would become aware of all significant matters that might be identified

in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the interim

consolidated financial information mentioned above were not prepared, in all material respects,

in accordance with the accounting practices adopted in Brazil applicable to institutions authorized

to operate by the Central Bank of Brazil.

Other matter

Statement of added value

We also reviewed the consolidated statement of value added (DVA) for nine-month period ended

as at September 30, 2017, which was prepared under Banks’ Management responsability, and

which presentation is required under the rules issued by Brazilian Securities and Exchange

Commission (CVM), and is considered a supplementary information in accordance with the

3

accounting practices adopted in Brazil applicable to institutions authorized to operate by the

Central Bank of Brazil that do not require the disclosure of DVA. This statement was subject to

the same review procedures described above and based on our review, we are not aware of any

facts that would lead us to believe it was not prepared, in all material respects, consistently with

the interim consolidated financial information.

Brasília, November 8, 2017


CRC SP-014428/O-6 F-DF

Original report in Portuguese signed by

Marcelo Faria Pereira

Accountant

CRC RJ-077911/O-2


3rd quarter 2017

DECLARATION OF THE EXECUTIVE BOARD MEMBERS ABOUT THE FINANCIAL STATEMENTS

According to the article 25, item VI, of CVM Instruction No. 480 of December 07, 2009, we declare that the Financial

Statements of the Banco do Brasil S.A. related to the period ended September 30, 2017 were reviewed and, based on

subsequent discussions, we agree that such statement fairly reflects, in all material facts, the financial position for the

periods presented.

Brasília (DF), November 07, 2017.

Paulo Rogério Caffarelli

President

Alberto Monteiro de Queiroz Netto

Antonio Mauricio Maurano

Vice-president of Financial Management and Investors Relations

Vice-president of Whosale

Carlos Hamilton Vasconcelos Araújo

Antônio Gustavo Matos do Vale

Vice-president of Services, Infrastructure and Operations

Vice-president of Technology

José Eduardo Pereira Filho

Marcelo Augusto Dutra Labuto

Vice-president of Government Affairs Vice-president of Retail Services

Marcio Hamilton Ferreira

Tarcisio Hübner

Vice-president of Internal Controls and Risk Vice-president of Agribusiness

Walter Malieni Junior

Vice-president of Retail, Distribution and Human Resources


3rd quarter 2017

DECLARATION OF THE EXECUTIVE BOARD MEMBERS ABOUT THE REPORT OF INDEPENDENT AUDITORS

According to article 25, item V, of CVM Instruction No. 480 of December 07, 2009, we affirm based on our knowledge, on

auditor’s plan and on discussions about the audit results, that we agree, with no dissent, to the opinions expressed in the

Report of Independent Auditors for Financial Statements of November 08, 2017.

Brasília (DF), November 08, 2017.

Paulo Rogério Caffarelli

President

Alberto Monteiro de Queiroz Netto

Antonio Mauricio Maurano

Vice-president of Financial Management and Investors Relations

Vice-president of Whosale

Carlos Hamilton Vasconcelos Araújo

Antônio Gustavo Matos do Vale

Vice-president of Services, Infrastructure and Operations

Vice-president of Technology

José Eduardo Pereira Filho

Marcelo Augusto Dutra Labuto

Vice-president of Government Affairs Vice-president of Retail Services

Marcio Hamilton Ferreira

Tarcísio Hübner

Vice-president of Internal Controls and Risk Vice-president of Agribusiness

Walter Malieni Junior

Vice-president of Retail, Distribution and Human Resources


3rd quarter 2017

MEMBERS OF MANAGEMENT

PRESIDENT Paulo Rogério Caffarelli VICE-PRESIDENTS Alberto Monteiro de Queiroz Netto Antônio Gustavo Matos do Vale Antonio Mauricio Maurano Carlos Hamilton Vasconcelos Araújo José Eduardo Pereira Filho Marcelo Augusto Dutra Labuto Marcio Hamilton Ferreira Tarcisio Hübner Walter Malieni Junior DIRECTORS Adriano Meira Ricci Alexandre Alves de Souza Carlos Alberto Araujo Netto Carlos Renato Bonetti Cicero Przendsiuk Edmar José Casalatina Edson Rogério da Costa Eduardo Cesar Pasa Fabiano Macanhan Fontes Fernando Florencio Campos Gustavo de Souza Fosse João Pinto Rabelo Júnior José Caetano de Andrade Minchillo José Eduardo Moreira Bergo Leonardo Silva de Loyola Reis Lucinéia Possar Marcio Luiz Moral Marco Antonio Ascoli Mastroeni Marco Túlio de Oliveira Mendonça Marco Túlio Moraes da Costa Marcos Renato Coltri Marvio Melo Freitas Nilson Martiniano Moreira Reinaldo Kazufumi Yokoyama Rogério Magno Panca Simão Luiz Kovalski

BOARD OF DIRECTORS Beny Parnes Daniel Sigelmann Fabiano Felix do Nascimento Fabrício da Soller Julio Cesar Costa Pinto Luiz Serafim Spinola Santos Paulo Rogério Caffarelli FISCAL COUNCIL Aldo César Martins Braido Christianne Dias Ferreira Felipe Palmeira Bardella Giorgio Bampi Mauricio Graccho de Severiano Cardoso AUDIT COMMITTEE Antônio Carlos Correia Luiz Serafim Spinola Santos Marcos Tadeu de Siqueira ACCOUNTING DEPT. Eduardo Cesar Pasa General Accountant Accountant CRC-DF 017601/O-5 CPF 541.035.920-87 Daniel André Stieler Accountant CRC-DF 013931/O-2 CPF 391.145.110-53