1
1
3Q14 Earnings
Release
2 Banco do Brasil S.A. – Third Quarter 2014 Earnings 2
Disclaimer
This presentation may include references and statements, planned synergies,
estimates, projections of results, and future strategy for Banco do Brasil, its
Associated and Affiliated Companies, and Subsidiaries. Although these references
and statements reflect the management’s belief, they also involve estimates and
unforeseen risks. Consequently, results may differ from those anticipated and
discussed here. These expectations are highly dependent on market conditions, on
Brazil’s economic and banking system performances, as well as on international
market conditions. Banco do Brasil is not responsible for updating any estimate in
this presentation.
3 Banco do Brasil S.A. – Third Quarter 2014 Earnings 3
Highlights
(1) It includes private securities and guarantees.
Loan Portfolio – Broad Concept¹ grew 12.3% in twelve months
NPL 90 Ratio (2.09%) remains below the Banking Industry (3.00%)
Adjusted Net Income reached R$ 2.9 billion in 3Q14
NII grew by 7.3% compared to the 9M13
BIS reaches 16.04% in September of 2014.
4 Banco do Brasil S.A. – Third Quarter 2014 Earnings 4
Earnings Highlights
(1) It includes Other Operating Revenues net of Other Operating Expenses, Equity Earnings of Subsidiaries and Affiliates and Insurance, Pension Plans and Premium Bonds
R$ million
On 3Q13 On 2Q14 On 9M13
Operating Revenues 17,148 19,065 18,944 50,598 55,870 10.5 (0.6) 10.4
Net Interest Income 11,648 12,353 12,530 34,210 36,713 7.6 1.4 7.3
Fee Income 5,819 6,169 6,363 17,124 18,273 9.4 3.2 6.7
Previ 112 446 228 486 1,120 103.6 (48.8) 130.3
Other Items¹ (431) 98 (177) (1,221) (236) (58.9) - (80.7)
Operating Expenses (12,989) (14,105) (14,473) (38,122) (42,308) 11.4 2.6 11.0
Administrative Expenses (7,389) (7,819) (8,048) (21,750) (23,596) 8.9 2.9 8.5
Allowance for Loan Losses (3,911) (4,570) (4,571) (11,402) (13,328) 16.9 0.0 16.9
Tax Expenses (1,216) (1,314) (1,326) (3,557) (3,888) 9.0 0.9 9.3
Legal Risk (473) (401) (529) (1,413) (1,497) 12.0 31.9 5.9
Non Operating Result 45 36 40 131 173 (11.2) 10.2 32.6
Income Taxes, Statutory Profit Sharing and
Minority Shareholders(1,595) (1,995) (1,626) (4,678) (5,412) 2.0 (18.5) 15.7
Adjusted Net Income 2,610 3,002 2,885 7,929 8,323 10.5 (3.9) 5.0
Adjusted ROE (%) 15.7 17.1 16.1 15.8 15.2 - - -
Net Income 2,704 2,829 2,780 12,733 8,287 2.8 (1.7) (34.9)
ROE (%) 16.3 16.1 15.5 25.6 15.1 - - -
Chg. %3Q13 2Q14 3Q14 9M13 9M14
5 Banco do Brasil S.A. – Third Quarter 2014 Earnings 5
Sources and Uses
Sep/13 Jun/14 Sep/14 Chg. %
R$ billion Balance Share % Balance Share % Balance Share % On Sep/13 On Jun/14
Sources 691.5 100.0 774.4 100.0 788.1 100.0 14.0 1.8
Commercial Funding 566.7 81.9 618.9 79.9 623.5 79.1 10.0 0.7
Total Deposits 470.9 68.1 479.9 62.0 468.8 59.5 (0.4) (2.3)
Agrib. LC + Real Estate LC 70.1 10.1 108.1 14.0 113.5 14.4 61.9 5.0
Repos w/ Corporate Bonds¹ 25.6 3.7 30.9 4.0 41.2 5.2 60.6 33.2
Domestic Onlending 82.0 11.9 93.0 12.0 88.0 11.2 7.4 (5.4)
Foreign Borrowing² 67.1 9.7 62.9 8.1 65.6 8.3 (2.2) 4.3
Debt Instruments eligible for capital² - - 16.3 2.1 28.0 3.6 - 71.4
Subordinated Debt 40.9 5.9 43.5 5.6 42.4 5.4 3.8 (2.5)
Others Commercial Papers³ 9.2 1.3 9.6 1.2 9.6 1.2 5.0 0.7
Domestic Hybrid Debt Capital Instr. 8.2 1.2 8.3 1.1 0.1 0.0 (98.9) (98.9)
Financial and Development Funds 6.0 0.9 8.4 1.1 9.6 1.2 59.5 13.8
Compulsory Deposits (88.5) (12.8) (86.6) (11.2) (78.7) (10.0) (11.0) (9.1)
Uses 691.5 100.0 774.4 100.0 788.1 100.0 14.0 1.8
Net Loan Portfolio (a) = (b) + (c) + (d) 607.3 87.8 670.6 86.6 683.7 86.7 12.6 2.0
Loan Portfolio (b) 585.0 84.6 649.6 83.9 662.4 84.0 13.2 2.0
Private Securities (c) 44.4 6.4 45.8 5.9 47.1 6.0 6.1 2.8
Allowance for Loan Losses (d) (22.1) (3.2) (24.8) (3.2) (25.8) (3.3) 16.6 3.9
Available Funds 84.2 12.2 103.9 13.4 104.4 13.3 24.0 0.6
Adjusted Net Loan Portfolio (a) - (e) 493.0 71.3 541.2 69.9 557.9 70.8 13.2 3.1
Onlending in the Country (e) 114.3 16.5 129.4 16.7 125.8 16.0 10.1 (2.8)
Ratio - %
Net Loan Portfolio / Total Deposits 129.0 139.7 145.8
Net Loan Portfolio / Commercial Funding 107.2 108.3 109.7
Adj. Net Loan Portfolio / Comm. Funding 87.0 87.4 89.5
Net Loan Portfolio / Sources 87.8 86.6 86.7
(1) It is included part of the balances of the Private Securities (Note 17c). (2) It Includes Foreign Borrowings, Foreign Securities, Foreign Onlendings, Subordinated debt abroad and
Hybrid Capital Instruments Abroad. (3) Apart from Subordinated Debt, from 4Q13 on, according Circular-letter 3,624/2013. (4) From 3Q14 on, includes Capital Eligible Debt reallocated
to Core Capital, as authorized by the Central Bank by Ofício 15006/2014-BCB/DEORF/DIFIN. (5) It includes Letters of Credit and Debentures.
6
Spread by Segment (%)¹ Global Spread (%)¹
6
Net Interest Income and Net Interest Margin
(1) Annualized data.
3Q14
5.0
5.6
7.5
13.7
2Q14
4.8
5.4
7.5
13.8
1Q14
4.7
5.2
7.2
13.2
4Q13
4.6
4.8
7.0
13.2
3Q13
4.6
4.8
7.1
13.2
Agribusiness NIM Companies NIM Loan Operations NIM Individuals NIM
On 3Q13 On 2Q14 On 9M13
Net Interest Income 11,648 12,353 12,530 34,210 36,713 7.6 1.4 7.3
Loan Operations Income 17,882 20,227 21,461 51,302 60,897 20.0 6.1 18.7
Funding Expenses (8,477) (10,526) (11,365) (23,076) (31,865) 34.1 8.0 38.1
Institutional Funding Expenses¹ (1,521) (1,604) (1,876) (4,365) (5,085) 23.4 16.9 16.5
Treasury Income² 2,843 3,181 3,236 7,280 9,655 13.8 1.7 32.6
Recovery of Write-offs Loans³ 836 871 903 2,711 2,583 7.9 3.6 (4.7)
Other 85 204 171 358 528 102.2 (16.3) 47.6
3Q13R$ million
Chg. %9M13 9M143Q142Q14
3Q14 2Q14
2.6
1Q14
4.2
2.6
4.1
2.6
4.1
4Q13
2.8
4.4
3Q13
2.9
4.4
Risk Adjusted NIM NIM
(1) Included senior debt, subordinated debt and hybrid capital instrument and abroad (IHCD). (2) Reallocations: (I) in 1Q14, regarding the recovery of operation that was write off on the
same month; (II) in the 2Q14, adjustment of recovery from operations with credit characteristics. (3) Included interest income, profitable compulsory deposits income, tax hedge,
derivatives and other financial instruments that compensate the exchange variation in result.
Banco do Brasil S.A. – Third Quarter 2014 Earnings
7 Banco do Brasil S.A. – Third Quarter 2014 Earnings 7
Loan Portfolio – Broad Concept¹
R$ billion
Sep/14
732.7
342.0
175.1
158.4
57.2
Jun/14
718.8
335.3
173.0
157.2
53.2
Mar/14
699.3
323.5
169.7
150.0
56.2
Dec/13
692.8
322.3
167.9
144.8
57.8
Sep/13
652.2
303.3
163.8
130.1
55.0
Companies Individuals Agribusiness Offshore
46.7%
23.9%
21.6%
7.8%
46.5%
25.1%
19.9%
8.4%
12.3 12.5 18.0 19.3
22.5
12 months Growth (%)
(1) It includes private securities and guarantees provided
8 Banco do Brasil S.A. – Third Quarter 2014 Earnings
Classified Loan Portfolio¹ - by contracted period
Jun/14
3Q14
2Q14
44.6 1Q14
2013
35.0
17.1
30.8
Up to 2011
2012
Sep/14
41.5
35.6
7.4
12.0
Sep/13 Mar/14
23.6
Dec/13
11.8 8.6
18.6
8.4
23.9 21.2
28.7
29.0
31.5 36.0
25.6
9.1
(1) Classified Concept. It does not include BV operations.
%
2014
28.5%
9
On Sep/13 On Jun/14
Payroll 51.4 39.6 55.6 39.1 56.7 38.9 10.2 1.9
Salary Loans 18.3 14.1 18.1 12.7 17.9 12.3 (2.3) (1.1)
Mortgage 15.8 12.1 23.5 16.5 25.7 17.7 63.2 9.3
Auto Loans 12.0 9.2 10.9 7.7 10.5 7.2 (12.0) (3.7)
Credit Cards 17.8 13.7 19.3 13.6 19.9 13.7 11.7 3.2
Consumer Finance 6.0 4.6 6.3 4.4 5.9 4.1 (0.9) (5.9)
Overdraft 2.9 2.2 2.8 2.0 2.7 1.9 (6.0) (1.8)
Microcredit 0.8 0.6 1.0 0.7 1.4 1.0 79.4 42.0
Other 5.0 3.9 4.8 3.4 4.9 3.3 (3.8) 0.6
Individuals Loan Portfolio 130.0 100.0 142.3 100.0 145.6 100.0 12.0 2.3
Chg. %Sep/13 Jun/14 Sep/14Share % Share % Share %
Banco do Brasil S.A. – Third Quarter 2014 Earnings 9
Organic Individuals Loan Portfolio¹ ²
R$ billion
(1) Classified Concept.
(2) It does not include BV operations and acquired portfolios.
75.0% 76.1%
10 Banco do Brasil S.A. – Third Quarter 2014 Earnings
Growth in lower risk lines
Mortgages (R$ billion) Auto Loans – Organic Portfolio (R$ billion)
Payroll (R$ billion)
25.8% Market Share
in 12 months
+63.2%
+108%
Sep/14
10.5
17.1% 17.7%
65.2%
Jun/14
10.9
17.8%
17.6%
64.6%
Sep/13
12.0
18.8%
19.3%
61.9%
Up to 5 years From 5 to 10 years Account Time - Over 10 years
Organic Portfolio • 88.2% Civil Servants
• 7.8% INSS’s Retirees and Pensioners
• 4.0% Private Sector Employees
+73.1%
Sep/14
35.0
25.7
9.3
Jun/14
32.0
23.5
8.4
Sep/13
20.2
15.8
4.5
Individuals Companies
+2.3%
Sep/14
63.1
Jun/14
63.4
Sep/13
61.6
11 Banco do Brasil S.A. – Third Quarter 2014 Earnings 11
Loans to Companies – Broad Concept¹
R$ billion
(1) It includes private securities and guarantees provided.
On Sep/13 On Jun/14
Working Capital 164.4 54.2 181.2 54.0 182.6 53.4 11.1 0.8
Investiments 51.6 17.0 60.2 17.9 63.8 18.7 23.6 6.1
Corporate Bonds & Notes 40.7 13.4 41.5 12.4 42.6 12.4 4.5 2.4
Guarantees 19.2 6.3 19.5 5.8 19.2 5.6 (0.2) (1.5)
Trade Finance 15.5 5.1 16.1 4.8 15.9 4.6 2.7 (1.2)
Mortgage 4.5 1.5 8.4 2.5 9.3 2.7 108.0 9.9
Other 7.4 2.4 8.4 2.5 8.7 2.5 17.3 3.1
Companies Loan Portfolio 303.3 100.0 335.3 100.0 342.0 100.0 12.8 2.0
Chg. %Sep/13 Share % Jun/14 Share % Sep/14 Share %
12
Corporate Portfolio by Size SME – FGO and FAMPE³
Banco do Brasil S.A. – Third Quarter 2014 Earnings 12
Loans to Companies – Broad Concept¹ R$ billion
(1) It includes private securities and guarantees provided. (2) Companies with annual revenues up to R$ 25 million (3) Guarantee Fund Operations and a SME Guarantee Fund.
+15.2%
Sep/14
23.5 3.6
19.9
Jun/14
23.3 3.6
19.7
Sep/13
20.4 3.6
16.8
+12.8%
Sep/14
342.0
240.5
101.5
Jun/14
335.3
234.2
101.1
Sep/13
303.3
208.9
94.4
Medium and Large Companies SME²
SME – Time of Relationship (% of credit concession)
Sep/14
101.5
39.6%
30.5%
23.8% 6.2%
Jun/14
101.1
38.9%
30.8%
24.2% 6.1%
Sep/13
94.4
37.0%
31.2%
24.5% 7.3%
More than 10 years
From 5 to 10 years
From 2 to 5 years
Up to 2 years
Fampe FGO
+15.2%
+7.5%
in 12 months
13
Agribusiness Loan Portfolio¹ (R$ billion)
Banco do Brasil S.A. – Third Quarter 2014 Earnings 13
Agribusiness
(1) It includes Rural Product Bills and guarantees provided.
Mitigators Use (Working Capital for Input Purchase)
R$ billion
34.8%
65.2% Not Insured
Insured
Vintage 14/15 (Sep/14)
Vintage 13/14 (Sep/13)
36.0%
64.0%
Not Insured
Insured
+21.8%
Sep/14
158.4
110.7
47.7
Jun/14
157.2
109.7
47.5
Sep/13
130.1
87.6
42.5
Companies Individuals
+12.3%
+26.4%
14
Coverage Ratio +90 days (%)
14 (1) Required Provision / Classified Loan Portfolio.
Banco do Brasil S.A. – Thrid Quarter 2014 Earnings
Asset Quality
Average Risk¹ (%)
Sep/11 Sep/14 Sep/12 Sep/10 Sep/13
3.57 3.66
5.83
4.10 4.16 4.82
5.73 5.66 5.08 4.83
Sep/14
185.9
161.0
Sep/13
191.9
154.0
Sep/12
218.4
150.9
Sep/11
211.2
161.3
Sep/10
201.0
171.2
Banco do Brasil Banking Industry
Banco do Brasil Banking Industry
15
NPL Ratio +90 days (%)
Delinquency and Coverage Ratios
NPL 15 Days (%) NPL 90 Days (%)
Banco do Brasil S.A. – Third Quarter 2014 Earnings
Sep/14
2.09
3.00
Jun/14
1.99
3.00
Mar/14
1.97
3.00
Dec/13
1.98
3.00
Sep/13
1.97
3.30
Banking Industry Banco do Brasil
Sep/14
1.1
4.1
4.3
Jun/14
0.9
3.8
4.3
Mar/14
1.1
3.8
4.6
Dec/13
1.2
3.3
4.1
Sep/13
1.1
3.6
4.4
Agribusiness Companies Individuals
0.6
Sep/14
2.7
2.4
Jun/14
0.6
2.4
2.3
Mar/14
0.7
2.2
2.4
Dec/13
0.8
2.3
2.6
Sep/13
0.7
2.2
2.5
Companies Individuals Agribusiness
16
New NPL¹ ², Write Off and NPL Formation Rate
NPL Formation
(1) Quarterly change in the balance of past-due for over 90 days operations + current quarter write-off.
(2) Sep/12 and Dec/12 were revised.
(3) It considers the classified loan portfolio of the previous quarter.
Banco do Brasil S.A. – Third Quarter 2014 Earnings
3Q14
3.63 4.59
2Q14
4.16 4.62
1Q14
3.70 3.80
4Q13
3.06 3.89
3Q13
3.45 4.23
2Q13
3.97 3.99
1Q13
3.06 2.98
4Q12
3.23
4.28
3Q12
2.82 2.50
Write Off (R$ billion) New NPL (R$ billion)
0.71 0.73 0.61 0.66 0.74 0.74
0.57
0.89
0.54
New NPL / Loan Portfolio³ (%)
17
Allowance for Loan Losses (ALL) and Loan Portfolio
Allowance for Loan Losses (12 months) / Loan Portfolio
Classified Loan Portfolio – Growth by Risk Level
(0.2)
72.3 1.6 1.1 0.7 1.8
585.0
662.4
Sep/13 Sep/14 AA-C D E F G H
2.79 2.76 2.81 2.77 2.79
ALL / Loan Portfolio (%) ²
(1) Average classified loan portfolio (2) ALL accumulated in 12 months / 12 months Average Loan Portfolio (3) 3 months Average Loan Portfolio.
(4) Quarterly ALL / 3 months Average Loan Portfolio.
Allowance for Loan Losses (Quarterly) / Loan Portfolio
4.2
604.7
3Q14 1Q14
4.6
654.3
2Q14
4.6
642.7
4.2
626.5
4Q13 3Q13
3.9
579.4
Allowance for Loan Losses
Loan Portfolio³
R$ billion
16.5
1Q14
587.4 628.4
17.5
3Q14 2Q14
16.9
610.4
4Q13
15.6
563.9
3Q13
15.0
538.3
Allowance for Loan Losses
Loan Portfolio¹
+13.2% in 12
months
0.71 0.70 0.68 0.67 0.69
ALL / Loan Portfolio (%) ⁴
Banco do Brasil S.A. – Third Quarter 2014 Earnings
18
BV – Light Vehicles1: Production per Business Channel and Delinquency
BV – Net Income
Banco Votorantim
R$ million 135 140 152 121
(159)
3Q14 2Q14 1Q14 4Q13 3Q13
Banco do Brasil S.A. – Third Quarter 2014 Earnings
(1) Comprised of CDC Veículos (Autos Consumer Credit) and vans..
Vintage of the Managerial Auto Loan Portfolio
33%27% 23% 19% 15%
59%67% 72% 77% 83% 89%
2%
8%
Dec/14
10%
Sep/14 Jun/14
4%
Mar/14
4%
Dec/13
6%
Sep/13
up to Jun/10 from Jul/10 to Sep/11 after Sep/11
Estimate
1% 3Q14
3.4
0.6
2.8
3Q13
3.3
0.7
2.6
3Q12
2.5
0.5
2.0
5.9 6.5 9.1
NPL 90 - Managerial Loan Portfolio (%) Car dealers (R$ billion)
Multibrand car dealers (R$ billion)
19 Banco do Brasil S.A. – Third Quarter 2014 Earnings 19
Fee Income
R$ million
Chg. %
On 3Q13 On 2Q14 On 9M13
Fee Income 5,819 6,169 6,363 17,124 18,273 100.0 9.4 3.2 6.7
Credit / Debit Cards 1,448 1,567 1,585 4,108 4,654 25.5 9.5 1.1 13.3
Account Fees 1,024 980 1,056 3,089 2,994 16.4 3.1 7.8 (3.1)
Asset Management Fees 960 969 1,116 2,776 3,023 16.5 16.3 15.1 8.9
Loan Fees 601 601 577 1,785 1,738 9.5 (3.9) (4.0) (2.6)
Collections 362 363 376 1,053 1,090 6.0 3.8 3.4 3.5
Insurance, Pension and Premium Bonds 267 394 333 880 1,018 5.6 24.9 (15.4) 15.7
Billings 219 229 235 652 691 3.8 7.1 2.7 6.0
Interbank 184 185 188 538 552 3.0 2.4 2.0 2.6
Capital Market 107 131 125 405 352 1.9 16.0 (5.2) (13.0)
Fiduciary Services 97 106 119 282 329 1.8 22.4 12.5 16.9
Other 550 644 654 1,556 1,832 10.0 18.9 1.6 17.7
3Q13 2Q14 3Q14 9M13 9M14 Share %
20 Banco do Brasil S.A. – Third Quarter 2014 Earnings
BB Seguridade
Adjusted Net Income (R$ million) Insurance’s Premiums and Collection
822845
548
+50.1%
+49.1%
9M14
2,316
9M13
1,553
3Q14 2Q14 3Q13 (1) It does not consider DPVAT (2) It considers PGBL + Traditional + VGBL
Insurance´s PremiumsMarket
Share %Ranking
Vehicle¹ 15.2 2º
Life 19.2 1º
Mortgage 6.6 3º
Rural 67.0 1º
CollectionMarket
Share %Ranking
Pension Plan² 38.0 1º
Premium Bond 25.9 1º
21 Banco do Brasil S.A. – Third Quarter 2014 Earnings
Cards – Organization Chart
22 Banco do Brasil S.A. – Third Quarter 2014 Earnings
Total Turnover Net Income
512497342
+38.5%
+49.7%
9M14
1,489
9M13
1,075
3Q14 2Q14 3Q13
+12.7%
3Q14
59.0
23.5
35.6
2Q14
59.2
25.5
33.8
3Q13
52.4
21.5
30.9
Debit Cards Credit Cards
Cards
R$ billion R$ million
Elo Cards Brand: Turnover and Cards Base
+10.1%
3T14
4.2
2T14
6.1
3T13
3.9
Turnover
7.2 7.2 6.2
Cards Base – R$ million
R$ billion
Alelo Cards: Turnover
+37.3%
3Q14
2.6
2Q14
2.5
3Q13
1.9
R$ billion
23 Banco do Brasil S.A. – Third Quarter 2014 Earnings 23
Administrative Expenses
R$ million
Chg. %
On 3Q13 On 2Q14 On 9M13
Personnel Expenses (4,156) (4,465) (4,630) (12,410) (13,571) 11.4 3.7 9.3
Other Administrative Expenses (3,233) (3,354) (3,417) (9,339) (10,025) 5.7 1.9 7.3
Expenses with Outsourced Services (689) (640) (646) (1,994) (1,948) (6.2) 0.9 (2.3)
Telecommunications and Data Processing (574) (613) (590) (1,692) (1,792) 2.8 (3.8) 5.9
Expenses with Premises and Equipment (541) (588) (618) (1,604) (1,782) 14.1 5.0 11.1
Security, Guard, and Transport Services (500) (539) (588) (1,422) (1,673) 17.7 9.2 17.7
Amortization and Depreciation (274) (316) (339) (794) (953) 23.8 7.2 20.0
Marketing and Public Relations (196) (210) (178) (485) (550) (8.9) (15.0) 13.4
Other Administrative Expenses (460) (449) (459) (1,349) (1,327) (0.2) 2.3 (1.6)
Administrative Expenses (7,389) (7,819) (8,048) (21,750) (23,596) 8.9 2.9 8.5
3Q13 2Q14 3Q14 9M13 9M14
24 24
Cost to Income Ratio (12 months)¹
(1) Administrative Expenses / Operating Revenues. Data from the Income Statement with Reallocations.
Banco do Brasil S.A. – Third Quarter 2014 Earnings
%
Sep/14
44.0
Jun/14
44.1
Mar/14
44.3
Dec/13
44.3
Sep/13
43.4
25 25
BIS Ratio¹ ²
%
(1) Financial Consolidated.
(2) Methodology used since Oct. 01st., 2013, according to CMN Resolution 4.192/2013.
(3) These numbers are based on information available at the time of the simulations, which involve limitations and risks hard to foresee and hence may present different results
from those reported. Banco do Brasil’s future performance is subject to external factors, including interest rates, exchange rates and its securities portfolio market value, as well as
the performance of the domestic and foreign economic and the domestic and international’s financial systems.
Banco do Brasil S.A. – Third Quarter 2014 Earnings
Sep/14
16.04
9.28
11.51
4.53
Jun/14
14.19
7.46
10.13
4.06
Dec/13
14.53
8.24
10.51
4.02
2012
14.83
10.55
4.28
2011
13.98
10.53
3.45
2010
14.08
11.02
3.06
Core Capital
Tier I
Tier II
BIS III Basel I and II
Considering the full implementation of the adjustments for Basel III, measured over June/2014³, the estimated BIS Ratio would reach 14.69% and the Tier I, 10.06%.
26 Banco do Brasil S.A. – Resultado do 3º Trimestre de 2014
BIS Comparative – Jun/14 versus Sep/14
%
Core Capital BIS Ratio
Jun/14 Sep/14
7.46
7.46
0.55
0.98
0.29
9.28
Jun/14 Sep/14
14.19
14.19
1.06
0.59
16.04
Macroprudential Measures Domestic Hybrid Debt Capital Instrument Reclassification Other Variations
0.20
27 27
Guidance
(1) Adjusted ROE estimated for 2014 uses estimated adjusted shareholders’ equity, free from the effects of: (i) the restatement of assets and actuarial, liabilities arising from the
Deliberation CVM/695; (ii) Corporate Profit Sharing; and (iii) as of Sep/14, was also excluded the amount of R$ 8.1 billion related to the reclassification of the debt instruments eligible as
core capital for shareholders’ equity of the Bank.
(2) Commercial Funding includes Total Deposits, Agribusiness Letter of Credit, Real Estate Letters of Credit and Repos with Corporate Bonds.
(3) It includes private securities and guarantees provided.
(4) Allowance for Loan Losses expenses of the last twelve months / Average Classified loan portfolio for the same period.
Banco do Brasil S.A. – Third Quarter 2014 Earnings
Adjusted Return on Equity¹ 14 - 17 15.2 Unchanged
Net Interest Income 5 - 9 7.3 Unchanged
Commercial Funding² 14 - 18 10.0 12 - 16
Domestic Loan Portfolio³ - Broad Concept 14 - 18 13.1 12 - 16
Individuals 12 - 16 6.9 8 - 12
Companies 14 - 18 12.8 12 - 16
Agribusiness 18 - 22 21.8 16 - 20
Allowance for Loan Losses⁴ 2.7 - 3.1 2.8 Unchanged
Fee Income 6 - 9 6.7 Unchanged
Administrative Expenses 5 - 8 8.5 Unchanged
2014 Performance2014 Guidance 2014 Revised guidance
%
28 Banco do Brasil S.A. – Resultado do 3º Trimestre de 2014 28
Contacts
Investor Relations Unit
Av. Paulista, 2.163 – 2nd Floor
01311-933 - São Paulo (SP)
Telephone: +55 (11) 3066 9110
bb.com.br/ir
29 Banco do Brasil S.A. – Third Quarter 2014 Earnings 29
Appendix
30. One-Off Items
31. BIS III – Capital Requirements
32. Funding
33. Foreign Borrowing
34. Loans to Individuals – Broad Concept
35. Individuals Loan Portfolio
36. Individuals Loan Portfolio – Average Rates/Tenor
37. Banco Votorantim – Asset Quality
38. Banco Votorantim - Auto Loans Portfolio
39. Loans to Companies - SME
40. Agribusiness Portfolio by Purpose
41. Agribusiness
42. Total Loan Portfolio - Risk Level
43. Renegotiated Loan Portfolio
44. Actuarial Assets (Previ) - CVM 695/12
45. Actuarial Liabilities (Cassi) - CVM 695/12
46. Amounts recognized in equity because of the adoption of CVM 695/12
47. Distribution Network
48. Clients and Service Network Channels
49. Human Resources
30 Banco do Brasil S.A. – Third Quarter 2014 Earnings 30
One-Off Items
R$ million
Adjusted Net Income 2,610 3,002 2,885 7,929 8,323
(+) One-Off Items 94 (173) (104) 4,803 (36)
Economic Plans (295) (328) (248) (627) (920)
Tax Efficiency - - - 142 260
Additional Allowance for Loan Losses - Semi-annual revision - (143) - 38 (143)
Provision for Agreement Committee - - - (186) -
Lawsuits Reconciliation - - - 303 -
BB Seguridade Shares Disposal (IPO) - - - 9,820 -
Expenses of BB Seguridade Shares Disposal (IPO) - - - (172) -
Extraordinary Provision for Lawsuits 462 163 63 (805) 359
Provision Legal Lawsuits - Adjust. Parameters and Policies Agreements - - - - 385
Tax Eff. and Stat. Profit Sharing on One-Off Items (73) 135 81 (3,710) 23
Net Income 2,704 2,829 2,780 12,733 8,287
3Q13 2Q14 3Q14 9M13 9M14
31 Banco do Brasil S.A. – Third Quarter 2014 Earnings
Implementation Schedule
%
BIS III – Capital Requirements
2013 2014 2015 2016 2017 2018 2019
Common Equity Tier I (CET1) 4.50 4.50 4.50 4.50 4.50 4.50 4.50
Tier I 5.50 5.50 6.00 6.00 6.00 6.00 6.00
Brazilian BIS Ratio 11.00 11.00 11.00 9.88 9.25 8.63 8.00
Additional CET1 (Buffers)0.625 a
1.25
1.25 a
2.50
1.875 a
3.752.5 a 5.0
CET1 + Buffers 4.50 4.50 4.505.125 a
5.75
5.75 a
7.00
6.375 a
8.287.0 a 9.5
Tier I + Buffers 5.50 5.50 5.506.625 a
7.257.25 a 8.5
7.875 a
9.75
8.5 a
11.00
Brazilian BIS Ratio + Buffers 11.00 11.00 11.0010.5 a
11.125
10.5 a
11.75
10.5 a
12.375
10.5 a
13.0
32 Banco do Brasil S.A. – Third Quarter 2014 Earnings
R$ billion
Funding
On Sep/13 On Jun/14
Time Deposits 246.5 43.5 235.2 38.0 221.8 35.6 (10.0) (5.7)
Judicial Deposits 97.4 17.2 107.2 17.3 110.1 17.7 13.1 2.7
Saving Deposits 134.2 23.7 146.5 23.7 149.0 23.9 11.0 1.7
Agribusiness Letters of Credits 67.2 11.9 99.6 16.1 105.5 16.9 57.1 5.9
Demand Deposits 69.2 12.2 69.4 11.2 69.5 11.1 0.5 0.2
Repurchase Agreement with Private Securities¹ 25.6 4.5 30.9 5.0 41.2 6.6 60.6 33.2
Interbank Deposits 21.0 3.7 28.8 4.7 28.5 4.6 35.8 (1.1)
Mortgage Bonds² 2.9 0.5 8.5 1.4 8.0 1.3 171.3 (5.7)
TOTAL 566.7 100.0 618.9 100.0 623.5 100.0 10.0 0.7
Share %Chg. %
Sep/13 Share % Jun/14 Share % Sep/14
(1) The line Repurchase Agreement with Private Securities covers part of the balances of the Private Securities Note 17c.
(2) It includes the balance of CRI (Certificates of Real Estate Receivables
33 Banco do Brasil S.A. – Third Quarter 2014 Earnings 33
Foreign Borrowing
US$ billion
Sep/14
51.4 0.8
3.2
8.4
16.7
22.4
Jun/14
56.0 2.0
3.1
9.3
17.5
24.0
Sep/13
49.4 2.1
3.2
10.5
12.9
20.7
Repo + Other
Companies
Individuals
Interbanking
Fixed Income and Deposit Certificates
Issue Date Volume (US$ million) CurrencyTerm in
YearsStructure
Rating ¹
(S&P /
Moody´s)
01/20/2012 1,000 USD - Perpetual BB
03/05/2012 750 USD - Perpetual BB
06/19/2012 750 USD 10.6 Tier II Subordinated BB+/Baa1
09/24/2012 317 JPY 3 Senior BBB / Baa1
10/10/2012 1,925 USD 10 Senior BBB / Baa1
01/31/2013 2,000 USD - Perpetual BB
07/25/2013 918 EUR 5 Senior BBB / Baa1
12/20/2013 303 CHF 5.6 Senior BBB
03/26/2014 413 EUR 5 Senior BBB / Baa1
06/18/2014 2,500 USD - Perpetual Ba3/B+/SR
International bonds issued in 2012/2013/2014
1- Ratings were revised in October, 2013 by Moody’s.
34
On Sep/13 On Jun/14
Payroll 61.6 37.6 63.4 36.6 63.1 36.0 2.3 (0.5)
Auto Loans 35.2 21.5 33.2 19.2 33.0 18.8 (6.3) (0.8)
Salary Loans 18.3 11.2 18.1 10.5 17.9 10.2 (2.3) (1.1)
Mortgage 15.8 9.6 23.5 13.6 25.7 14.7 63.2 9.3
Credit Cards 18.0 11.0 19.5 11.3 20.1 11.5 11.9 3.2
Consumer Finance 6.0 3.6 6.3 3.6 5.9 3.4 (0.6) (5.8)
Overdraft 2.9 1.8 2.8 1.6 2.7 1.6 (6.0) (1.8)
Other 6.1 3.7 6.2 3.6 6.7 3.8 10.0 7.9
Individuals Loan Portfolio 163.8 100.0 173.0 100.0 175.1 100.0 6.9 1.2
Chg. %Sep/13 Share % Jun/14 Share % Sep/14 Share %
Banco do Brasil S.A. – Third Quarter 2014 Earnings 34
Loans to Individuals – Broad Concept¹
R$ billion
(1) It includes guarantees provided.
79.9% 79.7%
35 Banco do Brasil S.A. – Third Quarter 2014 Earnings 35
Individuals Loan Portfolio
R$ billion
Acquired Portfolios
Market Share
(1) It includes loans portfolio acquired with co-obligation in compliance with Resolution CMN 3.533/08.
(2) Free Resources
On Sep/13 On Jun/14
Auto loans 10.8 57.1 11.6 65.9 13.0 73.4 20.2 11.8
Payroll loans 8.1 42.9 6.0 34.1 4.7 26.6 (42.1) (21.7)
Total 18.9 100.0 17.6 100.0 17.7 100.0 (6.5) 0.4
Chg. %Sep/13 Share % Jun/14 Share % Sep/14 Share %
Sep/13 Jun/14 Sep/14
BB¹ Industry Share % BB¹ Industry Share % BB¹ Industry Share %
Payroll Loans 61.6 216.8 28.4 63.4 238.1 26.6 63.1 244.6 25.8
Auto loans² 34.5 202.7 17.0 32.4 191.4 16.9 32.1 187.8 17.1
Mortgage 15.8 319.4 4.9 23.5 384.5 6.1 25.7 407.0 6.3
36 Banco do Brasil S.A. – Third Quarter 2014 Earnings 36
Individuals Loan Portfolio – Average Rates/Tenor
Sep/13 Jun/14 Sep/14
Banco do Brasil
Auto loans
Average rate - % p.m 1.26 1.35 1.38
Average term - months 34 32 32
Mortgage
Average contracted amount - R$ thousand 127.7 115.4 105.6
Average Rate - % p.y. 8.2 7.6 7.5
Average term - months 318.0 334.0 340.0
Payroll loans
Average rate - % p.m 1.82 1.76 1.76
Average term - months 53 54 54
BV - Auto Loans
Average rate - % p.m 1.87 1.97 1.96
Average term - months 45 44 44
37
Banco Votorantim – Asset Quality – Managerial Portfolio
Delinquency and Risk(%)
New NPL¹, Write-off and NPL Formation (R$ billion)
3Q14
0.77
0.38
2Q14
0.86 0.96
1Q14
0.83
1.31
4Q13
0.87 0.58
3Q13
0.90 0.66
2Q13
1.34
0.90
1Q13
1.14
0.68
Write-off New NPL¹
3Q14
10.9
89.1
2Q14
11.5
88.5
1Q14
11.6
88.4
4Q13
11.1
88.9
3Q13
9.9
90.1
2Q13
10.0
90.0
1Q13
10.3
89.7
D-H Levels AA-C Levels
5.9 6.5 6.2 5.1 5.5 5.7 6.2
NPL + 90 days
(1) Quarterly change in the balance of past-due for over 90 days operations + current quarter write-off.
(2) Considers the Classified loan portfolio of the previous quarter.
0.65 1.65
2.19
0.94 1.04 1.36 1.00
New NPL / Loan Portfolio² (%)
Banco do Brasil S.A. – Third Quarter 2014 Earnings
38
Average Tenor and Average Down-payment (origination)
Auto Loans Origination (R$ billion)
Banco Votorantim – Auto Loan Portfolio
4444444545
3Q14
40%
2Q14
39%
1Q14
39%
4Q13
38%
3Q13
37%
Average tenor (months) Average down payment
3Q14
3.6
0.7
2.9
2Q14
3.2
0.6
2.6
3Q13
3.5
1.0
2.6
Other Vehicles¹ Used Light Vehicles
Banco do Brasil S.A. – Third Quarter 2014 Earnings
Allowance for Loan Losses (managerial²) – R$ million
563417 557
408 378
199849
156
-13.7%
3Q14
451 74
2Q14
523 115
1Q14
714
4Q13
1,266
3Q13
761
Retail Wholesale
(1) Light (new), Heavy (new and used), Motorcycles (new and used) and Vans (new and used).
(2) Includes provision for credit assignment with substantial risk retention, net of credit recovery.
39 Banco do Brasil S.A. – Third Quarter 2014 Earnings 39
Loans to Companies - SME
R$ billion
Loans per Segment
Products
On Sep/13 On Jun/14
Commerce 39.2 41.5 42.3 41.8 41.9 41.3 7.1 (0.9)
Manufacturing Industries 29.5 31.3 29.5 29.1 29.6 29.2 0.2 0.4
Services Segment 25.7 27.3 29.4 29.0 30.0 29.5 16.4 2.0
Total 94.4 100.0 101.1 100.0 101.5 100.0 7.5 0.3
Sep/13Chg. %
Share % Jun/14 Share % Sep/14 Share %
On Sep/13 On Jun/14
Working Capital 60.4 64.0 65.5 64.7 65.1 64.1 7.7 (0.6)
Investment 31.8 33.6 33.2 32.8 34.3 33.8 8.1 3.4
Foreign Trade 2.3 2.4 2.5 2.4 2.1 2.0 (7.7) (15.7)
Total 94.4 100.0 101.1 100.0 101.5 100.0 7.5 0.3
Chg. %Sep/13 Share % Jun/14 Share % Sep/14 Share %
40 Banco do Brasil S.A. – Third Quarter 2014 Earnings 40
Agribusiness Portfolio by Purpose
R$ billion
On Sep/13 On Jun/14
Investment 52.5 40.4 65.3 41.6 69.0 43.5 31.3 5.6
Work. Cap. for Input Purchase 40.0 30.8 50.6 32.2 47.8 30.2 19.5 (5.5)
Agroindustry 30.5 23.5 31.6 20.1 31.3 19.8 2.4 (1.1)
Crop Trading 4.5 3.5 5.8 3.7 6.4 4.1 43.2 10.6
Other 1.8 1.4 2.2 1.4 2.3 1.4 28.3 2.3
Classified Loan Portfolio 129.4 99.5 155.6 99.0 156.8 99.0 21.2 0.8
Rural Product Bills and Guarantees 0.7 0.5 1.6 1.0 1.6 1.0 123.7 0.4
Loan Portfolio - Broad Concept 130.1 100.0 157.2 100.0 158.4 100.0 21.8 0.8
Chg. %Sep/13 Share % Jun/14 Share % Sep/14 Share %
41 Banco do Brasil S.A. – Third Quarter 2014 Earnings 41
Agribusiness
R$ billion Loan Portfolio per Customer Size¹
(1) Loan portfolio – broad concept.
Segment Sep/13 Share % Jun/14 Share % Sep/14 Share %
Medium and Large Sized 56.0 43.1 74.1 47.2 73.6 46.4
Businesses 36.1 27.8 40.0 25.4 39.7 25.0
Small 30.9 23.7 34.9 22.2 36.4 23.0
Cooperatives 6.4 4.9 6.6 4.2 7.2 4.6
Rural Prod. Bills and guarantees 0.7 0.5 1.6 1.0 1.6 1.0
Total 130.1 100.0 157.2 100.0 158.4 100.0
42 Banco do Brasil S.A. – Third Quarter 2014 Earnings
Total Loan Portfolio¹ - Risk Level
(1) Classified loan portfolio does not consider Banco Votorantim operations.
(2) Companies portfolio revised in Sep/13 according to Notes 10.
R$ million
Balance Provision Share% Balance Provision Share% Balance Provision Share% BI
AA 315,153 - 53.9 366,044 - 56.4 376,941 - 56.9 36.6
A 98,490 492 16.8 106,034 530 16.3 105,009 525 15.9 33.6
B 117,836 1,178 20.1 118,893 1,189 18.3 120,179 1,202 18.1 15.8
C 24,181 725 4.1 25,528 766 3.9 25,857 776 3.9 7.0
D 4,343 434 0.7 4,073 407 0.6 4,172 417 0.6 2.0
E 7,107 2,132 1.2 8,498 2,549 1.3 8,950 2,685 1.4 1.1
F 2,524 1,262 0.4 3,643 1,821 0.6 3,265 1,632 0.5 0.6
G 2,276 1,593 0.4 3,109 2,176 0.5 3,349 2,344 0.5 0.6
H 13,080 13,080 2.2 13,743 13,743 2.1 14,670 14,670 2.2 2.7
Total 584,989 20,897 100.0 649,564 23,182 100.0 662,392 24,251 100.0 100.0
AA-C 555,660 2,396 95.0 616,498 2,485 94.9 627,986 2,503 94.8 93.1
D-H 29,329 18,501 5.0 33,066 20,697 5.1 34,406 21,749 5.2 6.9
Sep/13 ² Jun/14 Sep/14
43 Banco do Brasil S.A. – Third Quarter 2014 Earnings 43
Renegotiated Loan Portfolio¹
R$ million
BB Consolidated
3Q13 2Q14 3Q14
Credits Renegotiated 9,834 12,063 9,254
Renegotiated overdue Loans 692 968 1,081
Renovated 9,142 11,095 8,173
Credits Renegotiated by Delay - Changes
Initial Balance 8,227 8,555 8,659
Contracts 692 968 1,081
Interest Received and Appopriated (125) (294) (414)
Write-Off (405) (571) (374)
Overdue Renegotiated Loan Portfolio 8,389 8,659 8,952
Allowance for Loan Losses Balance 5,054 5,277 5,362
NPL + 90 days 1,430 1,364 1,629
Indicators - %
All. for Loan Losses / Loan Portfolio 60.2 60.9 59.9
NPL + 90 days / Loan Portfolio 17.0 15.7 18.2
All. for Loan Losses Balance/NPL + 90 days 353.4 387.0 329.1
(1) Table according Notes 10 (Credit)
44 Banco do Brasil S.A. – Third Quarter 2014 Earnings 44
Actuarial Assets (Previ – Plano I) - CVM 695/12
R$ million
3Q13 2Q14 3Q14
(a) Fair Value of the Plan's Assets 134,982 141,679 141,679
(b) Present Value of Actuarial Liabilities (122,121) (122,205) (122,205)
(c) Surplus BB = [(a) + (b)] x 50% 6,430 9,737 9,737
(d) Actuarial Assets (Initial Period) 6,430 16,024 9,737
(e) Anticipated Financial Results - Monthly 112 446 228
(f) Contributions of Funds 113 172 117
(g) Reversal of Contribuição and Destinação Funds- - -
(h) Half-year Adjustment on Shareholders Equity - (6,905) -
(i) Actuarial Assets (Period End) = (d) + (e) + (f) + (g) + (h) 6,655 9,737 10,083
45 Banco do Brasil S.A. – Third Quarter 2014 Earnings 45
Actuarial Liabilities (Cassi) - CVM 695/12
R$ million
3Q13 2Q14 3Q14
(a) Fair Value of the Plan's Assets - - -
(b) Present Value of Actuarial Liabilities (7,255) (5,790) (5,790)
(c) Deficit BB = [(a) + (b)] (7,255) (5,790) (5,790)
(d) Acturial Liabilities (Initial Period) (7,255) (6,457) (5,790)
(e) Amounts recognized in statement of income (230) (241) (195)
(f) BB - Amount paid 125 121 113
(g) Amount Recognized in Half-Yearly Adjust-Shareholders' Eq. - 786 -
(h) Actuarial liabilities (Period End) = [(d) + (e) + (f) + (g)] (7,360) (5,790) (5,873)
46 Banco do Brasil S.A. – Third Quarter 2014 Earnings 46
Amounts recognized in equity – CVM 695/2012
R$ million
Jun/13 Previ Plano 1 Cassi Others Plans Total
Valuation Adjustments (6,238) 612 387 (5,239)
Tax Effects 2,669 (245) (156) 2,268
Effects on Shareholders Equity (3,569) 367 231 (2,970)
Dec/13 Previ Plano 1 Cassi Others Plans Total
Valuation Adjustments 7,100 1,090 259 8,449
Tax Effects (3,038) (436) (104) (3,578)
Effects on Shareholders Equity 4,062 654 155 4,870
Jun/14 Previ Plano 1 Cassi Others Plans Total
Valuation Adjustments (6,905) 786 (153) (6,271)
Tax Effects 2,955 (315) 61 2,701
Effects on Shareholders Equity (3,950) 472 (91) (3,570)
47 Banco do Brasil S.A. – Third Quarter 2014 Earnings 47
Global Presence
Northeast 32.5%
Midwest 26.7%
North 28.8%
South 24.9%
Southeast 20.0%
(1) Banking Agents and Postal Bank branches
Quantity of Bank Branches
(Regional Market Share)
Total = 23.9% Market Share in Brazil
Branches 12
Sub-branches 4
Representative Offices 10
Subsidiaries and affiliates 16
Shared Services Units 2
Business Units 1
Banco do Brasil in the World
Presence in 25 Countries
Brazil Total Service Network Sep/14
Own Service Network 18,924
Branches 5,493
MaisBB Network¹ 15,148
Banco Postal 6,189
Shared Service Network 34,964
Total 69,036
48 Banco do Brasil S.A. – Third Quarter 2014 Earnings
Clients and Service Network Channels
BB Digital – Transactions¹ in 9M14 Clients
Automated Teller Machines (thousand) BB Digital – Mobile (million transactions)
61.8 million Clients
10.8 million Savers
2.4 million SMEs
2.3 million INSS’s Pensioners
R$ 754 bi (34.3%)
R$ 1,445 bi (65.7%)
Other Channels³
BB Digital²
3.3 billion (40.9%)
4.8 billion (59.1%)
Total Volume Total Transactions
489.4%
9M14
2,210.1
2013
1,319.1
2012
375.0
2011
107.4
16.1
44.0
Jun/14 Sep/14
65.5 5.3
64.6 5.4
15.3
44.0
Mar/14
64.0 5.3
14.6
44.1
Dec/13
63.1 5.0
14.0
44.1
Sep/13
60.4 2.7
13.4
44.3
ATM: BRB + CEF ATM ATM: Banco 24h
(1) Salary loans transactions, Insurance, Payments, MoneyTransfers and account balance
(2) ATM, mobile and internet
(3) Branches, Agents in Country, Banco Postal and CABB
49 Banco do Brasil S.A. – Third Quarter 2014 Earnings
Human Resources
Profile of Staff Members
Changes of BB’s Staff (thousand)
Education’s Level
9.8
113.6
Sep/10
118.5 10.0
108.5
Sep/14
117.9 6.0
111.9
Sep/13
118.3 5.6
112.7
Sep/12
123.3 8.8
114.5
Sep/11
123.3
Interns Employees
58.5%
41.5%
Sep/13 Sep/14
Male Female
58.4%
41.6%
0.4%
29.6%
46.2%
23.9%
Others
Specialization, Master’s and Doctorate
College
High School
Sep/13 Sep/14
31.5%
0.3%
45.5%
22.7%