relatório de administração · 1h12 period was marked by the instability in the global financial...

Contents

Management Report

Independent Auditors' Report on Financial Statements

Individual and Consolidated Balance Sheets

Individual and Consolidated Statements of Income

Statements of Changes in Shareholders' Equity

Individual and Consolidated Statements of Cash Flows

Individual and Consolidated Statements for Added Value

Notes to the Financial Statements

Management Report

Dear Shareholders,

In compliance with legal and statutory provisions, we are submitting Banco Votorantim S.A.'s

("Banco Votorantim") individual and consolidated financial statements for your appreciation

concerning the six month period ended June 30, 2012 (1H12) and 2011 (1H11), accompanied by

the corresponding notes and independent auditors' report.

1. Economic Environment and Banking Sector

1H12 period was marked by the instability in the global financial market, derived from the

European sovereign and banking crisis. Brazil continues to be highly assessed by the rest of the

world, as attested by the positive foreign exchange flow of the period, of US$ 22.9 billion, which

helped international reserves to set a new record high of US$ 373.9 billion. However, the country

did not escape unscathed from this turbulence and some of its indicators became weaker. The

second wave of the global crisis of 2008/09 affected the Brazilian economy through two main

channels: (i) that of international trade, with the reduction of 45.4% in the trade surplus over the

same period last year; and (ii) that of confidence of local entrepreneurs, so that investments in

expansion of productive capacity were significantly reduced.

Even with the several stimulant measures to reanimate the economy, unemployment at historical

minimum levels and expanding income, the increase in family indebtedness and the consequent

impairment of income with these debts prevented a more pronounced reaction from consumers.

At the same time, and still reflecting the changes in the economic and regulatory context as of

2010/11, which has been affecting Brazilian economic activity since then, the delinquency of

individuals continued to expand and reached 7.8% in Jun.12 (7.4% in Dec.11). This growth was

boosted by the market delinquency of the auto finance segment, niche in which Banco

Votorantim operates, which reached 6.0% in Jun.12 (5.0% in Dec.11) and rose at a faster pace

than the other categories of loans for individuals.

The volume of credit concession for auto finance operations by individuals reached the monthly

average of R$ 7.5 billion in 1H12, down 11.7% from the monthly average of 2011 (R$ 8.5

billion), when the macroprudential credit restriction measures were still in force.

It is estimated that economic activity will accelerate in 2H12, reflecting the significant reduction

of the basic interest rate of the economy promoted in recent months and the tax reliefs already

introduced by the government, besides the impetus that should be given in public investment, in

order to create conditions for the gradual reduction of delinquency levels.

2. Key Information – Consolidated Position

RESULTS (R$ Million)

Gross financial margin¹ (a) 3,016 2,325 -22.9%

Allowance for loan losses - ALL (b) (1,268) (3,025) 138.5%

Net income from financial intermediation (a - b) 1,748 (700) -140.0%

Fee income/Banking fees income 627 492 -21.5%

Administrative and personnel expenses 2 (1,112) (1,213) 9.1%

Operating income 825 (1,808) -319.2%

Net income (loss) 541 (1,132) -309.4%

MANAGEMENT INDICATORS (%)

Retorn on Average Equity 3

(ROAE) 13.0 (25.4) -38.4 p.p.

Retorn on Average Assets 4 (ROAA) 1.0 (2.0) -2.9 p.p.

Efficiency Ratio (ER) - accumulated basis of 12 months5 36.2 48.1 11.9 p.p.

Basel Index 13.9 15.5 1.6 p.p.

BALANCE SHEET (R$ Million)

Total assets 119,190 113,610 -4.7%

Loan portfolio 61,213 58,809 -3.9%

Wholesale segment 20,443 20,484 0.2%

Consumer Finance segment 40,769 38,325 -6.0%

Guarantees provided 10,598 12,634 19.2%

Credit assignments with recourse 12,943 12,031 -7.0%

FIDCs6 2,926 3,345 14.3%

Funding sources 81,145 80,985 -0.2%

Shareholders' equity 8,706 9,304 6.9%

Capital (Basel Index) 12,592 13,624 8.2%

OTHER INFORMATION

Assets under Management - AuM (R$ Million) 37,839 43,203 14.2%

1. Net income from financial intermediation before allowance for loan losses;

3. Ratio between net income and average equity o f the period. This ratio is annualized;

4. Ratio between net income and average assets of the period. This ratio is annualized;

Variation

5. ER = administrative and personnel expenses / (gross financial margin + fee income/banking fees income + other operational

income and expenses + fiscal hedge adjustment);

6. Investments funds in credit rights in which Banco Votorantim holds 100% of subordinated quotas.

1H11 1H12

2. Considers non-recurring expenses associated to reestructuring under process and to the increase of co llection charges in the

Consumer Finnace segment;

3. Business Performance

Transactions of Banco Votorantim are conducted in the context of a set of subsidiaries that

operate in an integrated manner in the financial market, including in relation to risk management.

These subsidiary companies include BV Financeira, BV Leasing, Votorantim Asset Management

and Votorantim Corretora de Títulos e Valores Mobiliários.

Banco Votorantim has a robust and committed shareholder base (Votorantim Group and Banco

do Brasil – ―BB‖) and a diversified wholesale bank, consumer finance and wealth management

business portfolio. These factors, combined with BB’s strategic partnership, place Banco

Votorantim in a privileged position to occupy the space created by banking consolidation and to

seize business opportunities associated with the expansion of the middle class, increase of

investments in infrastructure and the development of the local capital markets.

In 2011, economic-regulatory shifts and the worsening of the international crisis have changed

the Brazilian banking scenario. At the same time, a systemic increase of delinquency concerning

Individuals was recorded, imposing challenges mainly to financial institutions more focused on

consumer finance, such as Banco Votorantim.

In the auto finance market, in which Banco Votorantim has a strong presence, delinquency

doubled last year (2.5% in Dec.10; 5.0% in Dec.11) and has continued to rise now in 1H12,

reaching 6.0% in Jun.12.

In addition, Bacen Resolution 3,533 came into effect on Jan.12, changing the accounting method

of credit assignments with recourse. This new regulatory change impacted the securitization

market and the income of banks operating in it.

In this wise, Banco Votorantim continued its prudential adjustment process, from the 4Q11,

advancing in the initiatives from its Change Agenda. After a period of strong growth, with

important economies of scale, the current focus is on increasing profitability in all the business

lines in the medium term.

Banco Votorantim’s consolidated result in 1H12 totaled R$ -1,132million (R$ 541 million in

1H11). The variation of the net income of 1H12 in relation to that recorded in the same prior-year

period is explained by three main factors – all related to Consumer Finance: (i) increase in

expenses with credit provisions, mainly due to delinquency above the historical average of the

auto finance portfolios originated by BV Financeira between Jul.10 and Sept.11; (ii) non-

realization of credit assignments with recourse in 1H12; and (iii) reduction of origination

volumes. An increase in personnel and administrative expenses was also recorded in 1H12,

justified by timely expenses associated with the restructuring in progress and with the increase in

credit collection expenses in Consumer Finance.

Wholesale, composed of the Corporate & Investment Banking (CIB), BV Empresas, Asset

Management, Private Bank and Treasury segments, maintained its track record of good

performance, with consistent generation of revenues and delinquency under control.

CIB ended Jun.12 with an expanded loan portfolio (with guarantees provided) of R$ 32.7 billion,

having strengthened its capital discipline and boosted its importance to clients by means of the

offer of integrated financial credit solutions, structured products and investment bank services. At

BV Empresas, the expanded loan portfolio reached R$ 9.6 billion, growth of 30% in 12 months,

with efficiency gains and delinquency under control – 2.3% in Jun.12. The third-party wealth

management segment, through Asset Management, reached R$ 43.2 billion of funds under

management in Jun.12, growth of around 14% in 12 months, deepening its partnership with BB

and consolidating its position as 8th largest asset management company in the market by the

Anbima managers ranking. Private Bank, in turn, maintained its focus on the estate planning of

its client base, which at the end of 1H12 presented expansion of 17% in relation to Jun.11. In the

same period, the volume of assets under management grew 12%.

Consumer Finance totaled a managed portfolio of R$ 53.7 billion in Jun.12, including assets

assigned with recourse to other financial institutions and the assets assigned to FIDCs – Credit

Receivables Investment Funds. As mentioned, Consumer Finance had its results compressed

mainly by the systemic increase of delinquency in auto finance operations, a segment that

corresponds to 80% of its managed loan portfolio.

In this context of results, Banco Votorantim has significantly strengthened the quality of its credit

risk profile. The Basel index closed Jun.12 at 15.5%, 250 base points over Mar.12, benefiting

from the capital investment of R$ 2 billion made in Jun.12. With this measure, BB and

Votorantim Finanças maintain the capitalization of Banco Votorantim at appropriate levels, as

provided in the Shareholders’ Agreement.

To resume growth with profitability, Banco Votorantim continued progressing in 1H12 in the

implementation of a series of strategic initiatives in its Change Agenda, with special emphasis on:

Auto finance operating model: intensification of the focus of activity on multi-brand

dealers (used vehicles) for origination targeting the own loan portfolio, besides the

adaptation of incentives for distribution channels (multi-brand dealers and new car

dealers);

Credit: improvements of Consumer Finance policies, processes and models. After the

significant improvement in the credit risk levels of 4Q11 origination, 1H12 productions

maintained the track record of good quality levels evidenced by the behavior of the

leading indicator ―delay of the 1st installment‖ of auto finance production;

Credit Collection: review of Consumer Finance processes, targeting delinquency

reduction and the recovery and/or minimization of losses;

Efficiency: adaptation of the organizational structures to the new production threshold of

Consumer Finance; and

Operations: continuity of the work of the Operational Review Committee (CRO),

formed by representatives of the shareholders, which has worked with teams from BV

Financeira in the implementation of operational improvements and refinement of internal

controls.

The progress in the Change Agenda creates the conditions for Banco Votorantim to resume

growth with profitability over the medium term. However, the short-term results will continue

impacted by the same three factors (related to Consumer Finance) mentioned previously.

The strategies and initiatives adopted, whose effects are evident both in maintaining the good

performance of Wholesale, and in the generation of good, new businesses with profitability in

Consumer Finance, will allow Banco Votorantim to resume its path of sustainable growth with

profitability in the medium term.

This process of prudential adjustment, from 4Q11, relies on full support of shareholders, who are

committed to maintaining the capital structure at appropriate levels, as provided in the

Shareholders’ Agreement. The shareholders' commitment extends to the preparation of Banco

Votorantim to the new regulatory context of Basel III.

For further information on the consolidated economic and financial performance of Banco

Votorantim, see the ―2Q12 Earnings Release‖ on the Investor Relations website

(www.bancovotorantim.com.br/ir).

4. Advances in Strategic Partnership with Banco do Brasil

Banco Votorantim and Banco do Brasil (BB) have explored joint business opportunities in

several segments, with tangible progress achieved, such as:

Development of new credit assignment model without recourse: in view of the new

economic and regulatory context, BV Financeira has prioritized the production at multi-

brand dealers (used vehicles) for the own loan portfolio, in which it has recognized

expertise, and in 2012 has made progress in the structuring of a new credit assignment

model without recourse to BB (―BV Financeira Originadora‖), focused on the channel of

new car dealers. In 2Q12, a pilot operation was executed to test and refine the systemic

developments of this new model, to be consolidated in 2H12.

Offer of investment products: BB DTVM and Votorantim Wealth Management &

Services (VWM&S), the consolidating structure of Banco Votorantim’s third-party asset

management, have made a joint effort in the development and distribution of innovative

and customized Credit Receivables Investment Funds (FIDCs), Real Estate Investment

Funds (FIIs), Equity Investment Funds (FIPs) and Private Credit. In 1H12, VWM&S

continued with the business expansion in partnership with BB, with the development of

exclusively structured products tailored for the needs of the shareholder partner in a total

volume that reached about R$ 2.2 billion in Jun.12. Other projects are approaching

completion and should be concluded over the course of 2H12.

Expansion of the business of CIB: deepening of the partnership with BB in the

Corporate & Investment Banking businesses, focusing on credit origination, structured

products, derivatives (hedging), mandates for issues of shares and bonds in the

international market. In 1H12, it is worth emphasizing the joint performance of Banco

Votorantim and BB in the IPO of Locamérica.

Expansion of the business of Votorantim Corretora: BB is making more extensive use

of Banco Votorantim’s brokerage firm to trade propriety positions, investment funds and

its consumer finance segment (via BB’s home broker).

5. Rating agencies

Banco Votorantim holds investment grade rating from the three leading international rating

agencies, in recognition of its credit quality.

Foreign Currency IDR (LT/ST) - BBB-/F3

Local Currency IDR (LT/ST) - BBB-/F3

National Scale (LT/ST) AA+(bra)/F1+(bra) -

Foreign Currency Senior Unsecured MTN (LT/ST) - Baa2/P-2

Foreign Currency Deposits (LT/ST) - Baa2/P-2

Local Currency Deposits (LT/ST) Aaa.br/BR-1 Baa2/P-2

Foreign Currency (LT/ST) - BBB-/A-3

Local Currency (LT/ST) - BBB-/A-3

National Scale (LT/ST) brAAA/brA-1 -

Note: LT = Long-Term; ST= Short-Term

Standard & Poor´s

Moody´s

Fitch Ratings

RATING AGENCIES National International

6. Awards and Acknowledgements

We present below the main awards and acknowledgements received by Banco Votorantim and its

subsidiaries in 1H12:

“Top 10 Assets”, classification of Votorantim Asset Management among the top 10

managers for institutional investors, edition of March 2012, of Investidor Institucional

magazine;

“Fundos Excelentes”, or Excellent Funds of the ranking ―Os Melhores Fundos para

Institucionais‖ (Best Funds for Institutional Investors), awarded to eight funds of

Votorantim Asset Management by Valor Investe magazine, in partnership with Luz

Engenharia Financeira, for excellency and consistency in performance;

“20 Empresas Mais Admiradas pelos RHs” (20 Companies Most Admired by HR),

“RHs Mais Admirados do Brasil” (Most Admired HRs in Brazil) and “10 Melhores

Empresas em IDHO - Indicador de Desenvolvimento Humano Organizacional” (10

Best Companies in OHDI – Organizational Human Development Indicator), awards

granted to Banco Votorantim by Gestão & RH Editora;

“10 Melhores Empresas em Cidadania Corporativa 2012” (10 Best Companies in

Corporate Citizenship 2012), award granted to BV Financeira by Gestão & RH Editora.

7. Corporate Governance

Banco Votorantim’s governance is divided between the two shareholders, with a model under

continuous improvement to achieve more robustness and transparency, ensuring agility in

decision-making processes — a strong characteristic of Banco Votorantim.

Governance is organized in two complementary levels of authority: the first is composed of the

Board of Directors and its Advisory Committees (Finance, Products and Marketing, and

Compensation and Human Resources), and involves the shareholders; the second is composed of

the Executive Committee and its Operational Committees involving the executive leaders of Banco

Votorantim.

In addition, Banco Votorantim has a Fiscal Council, which is an independent body created to

supervise the administrative management acts of Banco Votorantim, and an Audit Committee,

which provides advice to the Board of Directors.

As part of its Change Agenda, as of Sept.11, Banco Votorantim has been promoting the integration

of corporate areas, such as Credit, Finance and Legal, and has also created two committees that

have contributed towards an efficiency increase and improvement of the institution’s governance:

Cost Analysis and Approval of Expenses Committee (Comitê de Análise e Aprovação

de Despesas - CAAD): formed by corporate executives, CAAD’s duties include helping

management in the implementation of initiatives targeting greater efficiency in the

management of costs and expenses; and

Operational Review Committee (Comitê de Revisão Operacional - CRO): composed

of representatives of the shareholders, the CRO is a temporary committee that has worked

together with the teams of BV Financeira in the identification and implementation of

operational and internal control improvements.

In 1H12 Banco Votorantim continued with the process of improving its governance within the

establishment of the ―Compensation and Human Resources‖ committee to provide advice to the

Board of Directors. This new committee contains representatives of both the shareholders, besides

the CEO of Banco Votorantim and an independent member, who meet on a quarterly basis to keep

track of and decide on matters related to the Director´s Compensation Policy and HR practices

within the jurisdiction of the Board of Directors. Also in 1H12, Banco Votorantim hired several

professionals with market experience in areas such as Credit and Collection of Consumer Finance,

Wholesale bank, BV Empresas (segment of mid-sized companies), and others to join its staff of

executives.

8. People Management

With the objective of supporting the strategy, as all of the actions that will steer the organization

towards sustainable growth, Banco Votorantim maintains three important fronts in the sphere of

Human Resources:

Workforce Planning and Development: map actions to equip, adapt, train and qualify

the employees for the organization’s strategic guidelines;

Talent Management: monitor the individual performance of employees, identify talents,

create retention mechanisms, and solidify them by means of the succession program;

Culture and Climate: ensure that the work environment is consistent with the

organization’s culture, values and strategic guidelines.

These fronts enabled the structuring of actions and products aligned to the company's needs.

Initiatives were defined for this purpose that will support the institution’s guidelines, such as:

Attraction and retention: strengthen the Banco Votorantim brand, bringing

professionals with competitive differentials and providing opportunities for professional

growth;

Development: fulfill the organization’s need and at the same time train the employees in

the execution of their work, favoring personal and professional growth, by means of the

Business Schools, of the Leadership School and executive coaching programs;

Culture and Climate: ensure that the work environment is consistent with the

organization’s culture, values and strategic guidelines, one of the top priority conditions

for the company’s constant presence. The organizational climate is monitored

continuously by means of the ―Falando Francamente‖ (Speaking Frankly) program.

Hence, it is possible to objectively evaluate the employees’ perception of the policies and

practices, spawning proactive performance for the improvement of the organizational

climate, besides favoring the engagement and satisfaction of all the employees.

Banco Votorantim’s current strategy aims to consolidate its position as one of the three main

national private banks recognized for guidance in serving its clients and partners in a sustainable

manner and with long-term relationships, leveraging synergies with Banco do Brasil. In order to

enable all the employees to work in synergy with the organization’s new guidelines, it is crucial

for each one to know their role in the organization. The new Performance and Compensation

Management models were disclosed in 1H12 to all the organization with the above objective in

mind.

The new Performance Management model involves: annual cycle, quantitative appraisal with

contracting of targets and qualitative appraisal that translate the desirable behaviors and attitudes

for all the employees, since the manner in which results are obtained is just as important as their

obtainment.

Banco Votorantim believes that the success and constant presence of an organization are only

possible when there is a work team prepared for future challenges and that acts in harmony with

the company’s objectives. All these initiatives, together with the new Performance and

Compensation models, are aimed at maintaining people management that is coherent with the

company’s values, vision and mission.

9. Sustainablility

The Sustainability concept is intrinsically linked to the institution’s business practices and to the

daily routine of its operations. Banco Votorantim aims to establish ethical, transparent and lasting

relations across all areas of activity, respecting the economic, social, environmental and human

aspects in its processes.

The Sustainability Committee, formed in 2011, defined the guidelines for the insertion of

Sustainability across the organization, according to the Corporate Sustainability Policy in force.

For Banco Votorantim to achieve these goals, the performance of the Sustainability area is based

on three main pillars: Business Sustainability, Conscious Consumption and Social Investment.

Business Sustainability

Sustainability and its incorporation into the business strategy is a global movement that is

becoming increasingly important in the Brazilian market. As regards the inclusion of Business

Sustainability, the structuring of a tool for socio-environmental risk analysis was prioritized as

the source of information to justify the granting of corporate loans.

Votorantim Asset Management (VAM), a subsidiary of Banco Votorantim, became a signatory of

PRI (Principles of Responsible Investment) in May 2012. This fact serves to reinforce its

commitment of incorporating corporate governance, social and environmental criteria in the asset

analysis and management processes.

Conscious Consumption

Internal campaigns were held in 1H12 to disseminate concepts relating to sustainability and

conscious consumption, making use of several media. The employees’ awareness of the

Conscious Consumption concepts is directly related to the principles established by the Green

Protocol (―Protocolo Verde‖), of which Banco Votorantim has been a signatory since 2009.

Social Investment

According to its Social Investment Policy, Banco Votorantim provides funding incentives for

cultural, sports and social projects developed by widely recognized third-sector institutions,

prioritizing projects designed for the democratization of access to culture and sports and the

fulfillment of demands of children and adolescents.

In the cultural area, funds were earmarked for projects developed by MAM, OSESP, Mozarteum

and Instituto Inhotim. These projects contemplate cultural diffusion, valuing popular

demonstrations and the extent of the project’s social impact.

In the social area, funds were set aside for Municipal Funds for Children and Adolescents, in

Itabuna, Maceió, Ouro Preto, Rio Branco and São José do Rio Preto, which present demands in

the area of childhood and adolescence aligned to the guidelines of ECA – Child and Adolescent

Statute, and that rely on branches of Banco Votorantim and/or of its subsidiaries.

In the area of sports, funding incentives were provided for the Instituto Reação project, which

offers sports and educational activities to children and adolescents in a situation of social

vulnerability, in the city of Rio de Janeiro.

10. Acknowledgement

Banco Votorantim management is grateful to its clients and shareholders for their trust and to the

employees for their continuous effort and dedication.

São Paulo, August 02, 2012

Management

Independent auditors' report on financial statements

To

The Board of Directors and Shareholders of

Banco Votorantim S.A.

São Paulo - SP

We have examined the individual and consolidated financial statements of Banco Votorantim

S.A. ("Institution") referred as ―Bank‖ and ―Consolidated‖, respectively, which comprise the

balance sheet as of June 30, 2012 and the respective statements of income, changes in

shareholders’ equity and cash flows for the semester then ended and a summary of significant

accounting practices and other accompanying notes to the financial statements.

Responsibility of management for the financial statements

The Bank's management is responsible for the preparation and adequate presentation of the

individual and consolidated financial statements in accordance with the accounting practices

adopted in Brazil, applicable to institutions authorized to operate by the Central Bank of Brazil,

and the internal controls it deemed necessary to enable the preparation of these financial

statements free of significant distortions, regardless of whether the latter were caused by fraud or

error.

Responsibility of the Independent auditors

Our responsibility is to express an opinion on these financial statements based on our auditing,

carried out in accordance with the Brazilian auditing and international accounting standards.

These standards require the fulfillment of ethical requirements by the auditors and that the audit

be planned and performed for the purpose of obtaining reasonable assurance that the financial

statements are free of significant distortions.

An audit involves the carrying out of procedures selected to obtain evidence related to the

amounts and disclosures presented in the financial statements. The procedures selected depend on

the auditor's judgment, including an assessment of the risks of significant distortion in the

financial statements, regardless of whether the latter are caused by fraud or error. In this risk

assessment, the auditor considers relevant internal controls for the preparation and adequate

presentation of the financial statements of the Bank, to plan the audit procedures that are

appropriate in the circumstances, but not for purposes of expressing an opinion on the efficacy of

these internal controls of the Bank. An audit also includes the evaluation of the adequacy of

adopted accounting practices and reasonability of accounting estimates made by Management, as

well as an assessment of the presentation of financial statements taken as a whole.

We believe that the audit evidence obtained is sufficient and appropriate to support our

opinion.

An opinion on the individual and consolidated financial statements

In our opinion, the individual and consolidated aforementioned financial statements present

fairly, in all material respects, the financial position of Banco Votorantim S.A. at June 30, 2012,

the performance of its operations and its cash flows, for the semester then ended, in accordance

with the accounting practices adopted in Brazil, applicable to institutions authorized to operate by

the Central Bank of Brazil.

Other issues - Statements of added value

We have also reviewed the individual and consolidated statement of added value (DVA),

prepared directly under the responsibility of the Institution for the semester ended June 30, 2012,

whose presentation has been carried out in a spontaneous manner by the Institution. These

statements were submitted to the same audit procedures previously described and, in our opinion,

these supplementary statements are adequately presented, in all material respects, in relation to

the basic financial statements taken as a whole.

São Paulo, August 2, 2012

KPMG Auditores Independentes

CRC 2SP014428/O-6

Original report in Portuguese signed by

Alberto Spilborghs Neto

Accountant CRC 1SP167455/O-0


Balance sheetsJune 30, 2012 and 2011

(In thousands of Reais)

Bank Consolidated Bank Consolidated

Assets 2012 2011 2012 2011 Liabilities 2012 2011 2012 2011

Current assets 89,046,668 88,282,753 59,115,305 73,825,287 Current liabilities 87,344,537 71,712,951 71,875,504 74,979,474

Cash and cash equivalents 90,451 62,452 162,873 151,625 Deposits 18,566,196 19,337,722 18,334,321 19,134,161

Interbank funds applied 42,925,411 35,158,994 14,157,961 16,680,548 Demand deposits 475,046 353,229 479,795 374,282

Interbank deposits 2,468,676 1,333,190 2,243,302 1,130,510

Money market repurchase commitments 16,972,110 14,856,571 12,369,519 14,856,571 Time deposits 15,622,474 17,651,196 15,611,224 17,629,262

Interbank deposits 25,757,552 20,177,468 1,580,257 1,699,022 Other deposits - 107 - 107

Foreign currency investments 195,749 124,955 208,185 124,955

Money market borrowings 34,309,910 37,124,674 28,660,349 35,612,070

Securities andSecurities and

derivative financial instruments 31,890,577 35,728,429 10,744,443 19,586,785 Own portfolio 20,486,944 26,096,351 20,489,520 24,994,865

Third-party portfolio 13,278,747 9,276,880 7,626,610 8,865,762

Own portfolio 9,377,389 5,613,731 3,903,404 8,361,183 Free portfolio 544,219 1,751,443 544,219 1,751,443

Subject to repurchase agreements 19,714,107 26,236,672 4,417,299 7,372,660

Derivative financial instruments 1,754,565 815,904 1,332,424 751,409 Acceptances and endorsements 8,425,579 901,640 11,258,791 2,148,045

Subject to guarantees provided 1,044,516 3,062,122 1,091,316 3,101,533

Funds from housing bonds, mortgage notes, letters of credit and alike 6,972,101 473,952 6,972,101 473,952

Interbank accounts/relations 3,013,454 6,113,585 3,013,454 6,113,585 Debenture funds - - 2,833,212 1,478,978

Securities issued abroad 1,453,478 427,688 1,453,478 195,115

Payments and receivables to be settled 544 1,494 544 1,494

Brazilian Central Bank deposits 2,835,795 6,048,845 2,835,795 6,048,845 Interbank accounts/relations 5,532 11,518 5,532 11,518

Interbank onlendings 176,199 61,119 176,199 61,119

Correspondent 916 2,127 916 2,127 Payments and receivables to be settled 5,532 11,518 5,532 11,518

Loans 9,270,887 8,679,297 24,013,217 23,482,252 Interbranch accounts 124,564 113,618 124,588 113,621

Public sector 27,590 11,009 27,590 11,009 Third-party funds in transit 124,564 113,618 124,564 113,618

Private sector 9,567,933 8,778,872 26,411,236 24,429,429 Internal funds transfer - - 24 3

Loan operations subject to assignment - - 41,311 -

Borrowings and onlendings 6,167,786 6,976,970 6,169,341 6,977,821

Allowance for loan losses (324,636) (110,584) (2,466,920) (958,186)

Borrowings in local currency - Other institutions 3,885 10,076 3,885 10,076

Leases - - 2,008,437 3,208,584 Foreigns loans 3,574,832 3,823,217 3,574,832 3,823,217

Local onlendings - Official institutions 2,589,069 3,143,677 2,590,624 3,144,528

Lease receivable - Private sector - - 3,196,343 4,542,013 National Treasury 107,032 60,926 107,032 60,926

Unearned income from leasing - - (1,083,625) (1,251,178) BNDES 1,676,895 1,680,911 1,676,895 1,680,911

FINAME 805,142 1,401,840 806,697 1,402,691

Allowance for loan losses - - (104,281) (82,251)

Derivative financial instruments 17,700,374 4,426,575 2,110,731 5,260,500

Other receivables 1,791,072 2,478,276 4,743,308 3,796,856

Derivative financial instruments 17,700,374 4,426,575 2,110,731 5,260,500

Foreign exchange portfolio 1,284,999 1,739,919 1,284,999 1,739,919

Income receivable 43,704 112,710 65,711 131,034 Other liabilities 2,044,596 2,820,234 5,211,851 5,721,738

Securities Clearing Accounts 129,812 98,988 302,274 213,203

Other 383,850 573,388 3,141,617 1,759,429 Collection and levy of taxes and alike 6,324 11,404 12,864 34,278

Foreign exchange portfolio 286,352 1,599,349 286,352 1,599,349

Allowance for loan losses (51,293) (46,729) (51,293) (46,729) Social and statutory 60,192 207,689 114,489 323,994

Tax and social security 120,872 806,593 1,525,891 2,265,513

Other assets 64,816 61,720 271,612 805,052 Securities Clearing Accounts 19,925 88,592 211,885 180,189

Subordinated debts 1,396,182 - 1,396,182 -

Other assets 327 - 133,935 90,271 Other 154,749 106,607 1,664,188 1,318,415

Prepaid expenses 64,489 61,720 137,677 714,781

Long-term liabilities 33,736,491 51,812,583 32,405,394 35,465,642

Long-term assets 36,967,336 40,767,541 54,106,564 45,124,379

Deposits 4,727,582 4,565,084 4,634,226 4,498,250

Interbank funds applied 13,809,216 19,085,059 526,750 382,820

Interbank deposits 1,344,143 97,270 1,261,559 30,436

Interbank deposits 13,809,216 19,085,059 526,750 382,820 Time deposits 3,383,439 4,467,814 3,372,667 4,467,814

Securities and Money market borrowings 3,623,787 4,319,205 3,629,051 4,319,289

derivative financial instruments 12,620,447 10,305,895 20,260,001 10,190,727

Own portfolio 3,584,184 4,271,409 3,589,448 4,271,493

Own portfolio 5,261,891 4,132,537 7,897,734 4,132,537 Free portfolio 39,603 47,796 39,603 47,796

Subject to repurchase agreements 4,112,057 3,411,415 8,289,660 3,411,415

Derivative financial instruments 1,177,658 1,009,986 828,802 894,818 Acceptances and endorsements 10,167,685 11,765,324 10,168,115 13,527,134

Subject to guarantees provided 2,068,841 1,751,957 3,243,805 1,751,957

Funds from housing bonds, mortgage notes, letters of credit and alike 5,253,647 6,816,633 5,253,647 6,816,633

Loans 9,334,170 10,525,505 27,049,188 31,361,530 Debenture funds - - 430 1,529,237

Securities issued abroad 4,914,038 4,948,691 4,914,038 5,181,264

Public sector 25,329 50,658 25,329 50,658

Private sector 9,747,250 10,722,286 28,706,550 32,081,952 Borrowings and onlendings 4,829,613 5,698,632 4,847,204 5,721,618

Loan operations subject to assignment - - 55,460 -

Borrowings in local currency - Other institutions 9,451 - 9,451 -

Allowance for loan losses (438,409) (247,439) (1,738,151) (771,080) Foreigns loans 1,804,048 1,727,895 1,804,048 1,727,895

Local onlendings - Official institutions 3,016,114 3,970,737 3,033,705 3,993,723

Lease operations - - 228,319 213,357 National Treasury 20,781 7,500 20,781 7,500

BNDES 1,328,919 2,165,275 1,328,919 2,165,275

Lease receivable - Private sector - - 1,408,119 2,073,795 FINAME 1,666,414 1,797,962 1,684,005 1,820,948

Unearned income from leasing - - (1,080,754) (1,758,683)

Allowance for lease losses - - (99,046) (101,755) Derivative financial instruments 3,174,590 19,765,160 736,048 1,075,943

Derivative financial instruments 3,174,590 19,765,160 736,048 1,075,943

Other receivables 1,030,838 596,802 4,785,719 2,395,212

Other liabilities 7,213,234 5,699,178 8,390,750 6,323,408

Credits for sureties and guarantees paid - 672 - 672

Securities Clearing Accounts 8,253 - 8,253 - Tax and social security 783,399 18,950 1,801,849 531,431

Other 1,022,585 596,130 4,777,466 2,394,540 Subordinated debts 6,429,835 5,680,228 6,429,835 5,680,228

Other - - 159,066 111,749

Other assets 172,665 254,280 1,256,587 580,733

Deferred income 25,759 38,872 25,759 38,872

Other assets 4,402 3,125 4,402 3,125

Prepaid expenses 168,263 251,155 1,252,185 577,608 Interest of non-controlling shareholders - - - 59

Fixed assets 4,396,594 3,219,659 388,599 239,928 Shareholders' equity 9,303,811 8,705,547 9,303,811 8,705,547

Investments 4,309,532 3,134,547 209,002 65,446 Capital

Domestic 7,026,841 4,026,841 7,026,841 4,026,841

Ownership interest in Brazilian subsidiaries and abroad 4,283,254 3,109,160 140,030 432 Capital reserves 585,104 585,104 585,104 585,104

Other investments 37,312 35,685 111,413 105,071 Profit reserves 2,504,820 3,861,317 2,504,820 3,861,317

Provision for losses (11,034) (10,298) (42,441) (40,057) Equity evaluation adjustments 319,208 (152,882) 319,208 (152,882)

Retained earnings (losses) (1,132,162) 385,167 (1,132,162) 385,167

Fixed assets for use 33,290 39,377 103,565 109,339

Other property for use 80,473 79,219 200,606 185,385

Accumulated depreciation (47,183) (39,842) (97,041) (76,046)

Intangible 25,423 14,803 47,359 32,338

Intangible assets 25,496 14,803 57,056 37,263

Accumulated amortization (73) - (9,697) (4,925)

Deferred assets 28,349 30,932 28,673 32,805

Organizational and expansion expenses 35,140 35,126 43,168 43,192

Accumulated amortization (6,791) (4,194) (14,495) (10,387)

Total assets 130,410,598 132,269,953 113,610,468 119,189,594 Total liabilities 130,410,598 132,269,953 113,610,468 119,189,594

See the accompanying notes to the financial statements.


Statements of incomeSemesters ended June 30, 2012 and 2011(In thousands of Reais, except net income / (loss) for the period per thousand shares)

2012 2011 2012 2011

Income from financial intermediation 5,744,269 4,780,477 7,331,755 6,797,009

Loans 1,286,601 1,030,210 4,819,928 4,959,533

Leases - - 211,518 280,680

Securities 5,046,342 5,242,787 2,467,012 2,308,984

Derivative financial instruments (860,693) (1,834,781) (439,773) (1,094,427)

Foreign exchange operations 87,025 15,344 87,008 15,322

Compulsory deposits 184,994 326,917 184,994 326,917

Sale or transfer operation from financial assets - - 1,068 -

Expenses from financial intermediation (5,276,680) (3,878,202) (8,031,398) (5,049,292)

Money market borrowings (4,537,925) (3,751,221) (4,517,077) (3,794,258)

Borrowings and onlendings (488,527) 14,145 (489,276) 13,399

Allowance for loan losses (250,228) (141,126) (3,025,045) (1,268,433)

Net income from financial operations 467,589 902,275 (699,643) 1,747,717

Other operating income (expenses) (1,546,758) (210,508) (1,107,885) (923,178)

Fee income 139,326 112,557 244,363 225,555

Banking fees 1,476 4,778 247,889 401,876

Personnel expenses (181,815) (160,731) (478,822) (414,900)

Other administrative expenses (120,954) (143,520) (734,052) (696,994)

Tax expenses (58,411) (100,807) (222,006) (330,282)

Equity in income of subsidiaries (1,373,980) 109,013 30,145 (170)

Other operational income 58,473 16,723 97,521 45,611

Other operational expenses (10,873) (48,521) (292,923) (153,874)

Operating income (1,079,169) 691,767 (1,807,528) 824,539

Non-operating income (loss) 1,531 1,983 (72,378) 17,002

Income (loss) before taxation and profit sharing (1,077,638) 693,750 (1,879,906) 841,541

Income and social contribution taxes 20,121 (68,171) 954,724 (110,574)

Provision for income tax (2,572) (3,540) (242,530) 43,694

Provision for social contribution payable 37 (6,004) (145,085) (105,230)

Deferred tax assets 22,656 (58,627) 1,342,339 (49,038)

Profit sharing (74,645) (84,994) (206,980) (190,381)

Net income (loss) before interest of

non-controlling shareholders (1,132,162) 540,585 (1,132,162) 540,586

Interest of non-controlling shareholders - - - (1)

Net income (loss) for the period (1,132,162) 540,585 (1,132,162) 540,585

Net income / (loss) per thousand shares - R$ (10.89) 6.63


Bank Consolidated


Statements of changes in shareholders' equitySemesters ended June 30, 2012 and 2011


Realized Capital Capital Equity evaluation

capital increase reserves Legal Expansion adjustments earnings (loss) Total

Balances at December 31, 2010 3,994,896 31,945 585,104 394,583 3,439,705 (57,356) - 8,388,877

Capital increase 31,945 (31,945) - - - - - -

Equity evaluation adjustments - - - - - (95,526) - (95,526)

Net income for the period - - - - - - 540,585 540,585

Distribution of net income

Legal reserve - - - 27,029 - - (27,029) -

Dividends - - - - - - (128,389) (128,389)

Balances at June 30, 2011 4,026,841 - 585,104 421,612 3,439,705 (152,882) 385,167 8,705,547

Balances at December 31, 2011 4,026,841 1,000,000 585,104 421,612 2,083,208 (75,346) - 8,041,419

Capital increase 3,000,000 (1,000,000) - - - - - 2,000,000

Equity evaluation adjustments - - - - - 394,554 - 394,554

Loss for the period - - - - - - (1,132,162) (1,132,162)

Balances at June 30, 2012 7,026,841 - 585,104 421,612 2,083,208 319,208 (1,132,162) 9,303,811


Capital

Retained

Profit reserves


Statements of cash flows

Semesters ended June 30, 2012 and 2011


Consolidated

2012 2011 2012 2011

Cash flows originating from operations

Net income (loss) (1,132,162) 540,585 (1,132,162) 540,585

Adjustments to net income (loss): 1,654,072 76,984 3,221,960 1,379,490

Depreciation and amortization 5,538 5,232 15,424 22,179

Equity income (loss) 1,373,980 (109,013) (30,145) 170

Allowance for doubtful accounts 250,228 141,126 3,025,045 1,268,433

Provision for contingent liabilities/legal obligations 26,021 41,757 218,825 117,343

Non-operating income (loss) (1,695) (2,118) (7,189) (28,635)

Equity variations

Interbank investments (4,249,692) (4,756,654) (1,988,524) (340,944)

Trading securities and derivative financial instruments (6,432,189) 814,605 (1,843,496) 1,620,433

Interbank accounts and investments 3,026,822 289,934 3,026,628 289,934

Loans/leases 547,753 (516,249) (1,477,389) (4,361,817)

Other receivables (464,403) (809,162) (2,948,780) (1,083,816)

Other assets 32,434 (292,877) (20,325) (744,360)

Deposits (2,594,764) 43,747 (2,656,096) 33,955

Money market repurchase commitments 4,408,146 5,768,322 (1,245,595) 5,551,439

Acceptances and endorsements 3,857,768 5,382,400 3,560,262 5,377,048

Liabilities from borrowings and repass (456,872) 1,449,586 (461,817) 1,444,959

Other liabilities 290,665 (92,474) 623,366 (251,176)

Deferred income (16,107) (2,888) (16,107) (2,888)

Cash generated (consumed) by operations (1,528,529) 7,895,859 (3,358,075) 9,452,842

Cash flows from financing activities

Capital increase 2,000,000 - 2,000,000 -

Dividends paid - (128,301) - (128,301)

Interest of non-controlling shareholders - - (10) -

Subordinated debts 428,707 227,041 428,707 (1,224,034)

Net cash generated (consumed) in financing activities 2,428,707 98,740 2,428,697 (1,352,335)

Cash flows from investment activities

Securities available for sale (1,229,382) (6,437,713) (2,590,388) (6,415,016)

Sale of fixed assets for use 2,564 23 2,787 2,748

Disposal of deferred assets - 3 - 586

Disposal of intangible assets 1,453 604 2,812 804

Investment acquisition (3,260,016) 69,707 (109,605) (518)

Acquisition of fixed assets for use (2,060) (1,394) (7,005) (34,111)

Investments in intangible assets (6,899) (8,372) (12,357) (14,317)

Dividends received 8,079 80,835 8,079 80,835

Net cash generated (consumed) in investment activities (4,486,261) (6,296,307) (2,705,677) (6,378,989)

Net variation of cash and cash equivalents (3,586,083) 1,698,292 (3,635,055) 1,721,518

Cash and cash equivalents at the beginning of the period 5,444,251 816,961 5,594,048 906,219

Cash and cash equivalents at the end of the period 1,858,168 2,515,253 1,958,993 2,627,737

Increase (decrease) in cash and cash equivalents (3,586,083) 1,698,292 (3,635,055) 1,721,518


Bank


Statements of added value

Semesters ended June 30, 2012 and 2011


2012 2011 2012 2011

Revenues 5,683,974 4,726,871 4,531,182 6,064,746

Income from financial intermediation 5,744,269 4,780,477 7,331,755 6,797,009

Revenue from services rendered and bank fees 140,802 117,335 492,252 627,431

Allowance for doubtful accounts (250,228) (141,126) (3,025,045) (1,268,433)

Other income / (expenses) 47,600 (31,798) (195,402) (108,263)

Non-operating income (loss) 1,531 1,983 (72,378) 17,002

Financial intermediation expenses (5,026,452) (3,737,076) (5,006,353) (3,780,859)

Inputs acquired from third parties (94,241) (117,868) (652,887) (609,013)

Materials, energy and other (1,440) (1,605) (3,822) (5,505)

Outsourced services (1,989) (1,869) (6,170) (8,583)

Others (90,812) (114,394) (642,895) (594,925)

Communications (4,824) (6,021) (38,541) (47,370)

Maintenance and preservation of assets (2,361) (2,318) (7,253) (9,268)

Data processing (24,497) (32,840) (80,112) (72,767)

Promotions and public relations (1,706) (7,051) (2,861) (10,322)

Publications (431) (632) (868) (737)

Advertising and publicity (263) (1,140) (1,993) (4,227)

Services of the financial system (18,348) (16,781) (87,893) (75,222)

Specialized technical services (25,402) (32,904) (220,037) (202,361)

Transportation (2,336) (2,367) (9,251) (11,683)

Others (10,644) (12,340) (194,086) (160,968)

Gross added value 563,281 871,927 (1,128,058) 1,674,874

Amortization/depreciation expenses (5,538) (5,232) (15,424) (22,179)

Net added value produced by the Entity 557,743 866,695 (1,143,482) 1,652,695

Added value received as transfer (1,373,980) 109,013 30,145 (170)

Equity in income of associated companies and subsidiaries (1,373,980) 109,013 30,145 (170)

Added value payable (816,237) 975,708 (1,113,337) 1,652,525

Total added value paid (816,237) 975,708 (1,113,337) 1,652,525

Personnel 228,387 219,235 622,506 539,652

Salaries and fees 113,761 106,648 298,729 263,962

Profit sharing 74,645 84,994 206,980 190,381

Benefits and training programs 30,254 18,359 88,960 61,394

FGTS 9,717 9,165 27,679 23,799

Others 10 69 158 116

Taxes, rates and contributions 66,363 195,468 (669,422) 506,485

INSS on salaries 28,073 26,490 63,296 65,629

Tax expenses (excepting income and social contribution taxes) 58,411 100,807 222,006 330,282

Income tax / social contribution (20,121) 68,171 (954,724) 110,574

Third-party capital remuneration 21,175 20,420 65,741 65,802

Rentals 21,175 20,420 65,741 65,802

Remuneration of own capital (1,132,162) 540,585 (1,132,162) 540,586

Dividends - 128,389 - 128,389

Retained earnings (loss) (1,132,162) 412,196 (1,132,162) 412,196

Minority interests in retained earnings - - - 1


Bank Consolidated


Notes to the financial statements

June 30, 2012 and 2011


1 Operations

Banco Votorantim S.A. is a closed corporation that, operating in the form of a Multiple

Bank, develops banking activities in authorized categories, by means of its commercial,

financing and foreign exchange operation portfolios.

Through its subsidiaries, the Company also operates in various other categories, with an

emphasis on the activities of consumer credit, leasing, administration of investment funds

and credit cards.

Transactions are conducted in the context of a set of institutions that operate in an integrated

manner in the financial market, including in relation to risk management, and certain transactions

have the joint participation or the intermediation of member institutions, which form an integral

part of the financial system. The benefits of the services provided between these institutions and

the costs of the operational and administrative structure, are absorbed based on the practicality

and reasonableness of the allocation of benefits and costs, jointly or individually.

2 Presentation of financial statements

The financial statements were prepared on a basis of the accounting guidelines derived

from Corporation Law and rules and instructions of the National Monetary Council

(CMN).

Law 11638/07 was enacted on December 28, 2007, amended by Law 11941/09, which

amended Corporate Law regarding accounting practices adopted in Brazil. Although said

Law is already effective, some changes it introduced depend on normatization by the

National Monetary Council. The amendments approved by CMN were:

Procedures to measure the recoverable value of assets; Elaboration of the statement of cash flows in place of the statement of changes in financial

position;

The disclosure of related party information in notes to the financial statements;

Share based payment;

Definition of criteria for selecting, changing, and disclosing accounting policies, for changes in accounting estimates and for correcting errors;

Subsequent events; and

Procedures for the recognition, measurement and disclosure of provisions, contingent assets

and liabilities;

The following statement was also applied, which is not in conflict with the rules of the Central

Bank of Brazil, as provided for in the prevailing regulations:

Statement of added value.

The consolidated financial statements include Banco Votorantim and the direct subsidiaries in the

country and abroad, listed below:

Ownership interest

06/30/2012 06/30/201

1

Direct subsidiaries in Brazil

Votorantim Corretora de Títulos e Valores Mob. Ltda. 99.99% 99.98%

Votorantim Asset Management Distrib. de TVM Ltda. 99.99% 99.99%

BV Financeira S.A. Crédito, Financiamento e

Investimento

100% 100%

BV Leasing Arrendamento Mercantil S.A. 100% 99.99%

Direct subsidiaries overseas

Votorantim Bank Limited 100% 100%

Banco Votorantim Securities Inc. 100% 100%

Banco Votorantim Securities (UK) Limited 100% -

Interest in Corporations reflected in the above table consists in common shares only.

The consolidated financial statements include Banco Votorantim and the direct

subsidiaries in the country and abroad, listed below:

The main procedures adopted in the consolidation process of the financial statements

from the Financial conglomerate are:

a. Elimination of the balances of accounts of assets, liabilities, income and expenses

between parent company and subsidiary companies;

b. Elimination of investments in the subsidiaries’ capital, reserves and retained earnings;

c. Presentation of lease operations under the financial method, reclassifying "Lease

property" to "Lease operations", net of the residual value received in advance;

d. The book balances of the overseas direct subsidiaries, which are prepared according

to international accounting standards, were translated into reais, using the US dollar

quotation on the closing date of the period, and were adjusted to accounting practices

described in Note 4;

e. The exchange variation of the operations of the branch and of the subsidiary

companies abroad was distributed on the lines of the statement of income, according

to the respective assets and liabilities that originated them, and

f. The consolidation process does not include the consolidation of the exclusive

investment funds and of the credit receivable investment funds in conformity with the

consolidation rules established by the National Monetary Council (CMN).

Income statement balances as of June 30, 2011 were reclassified to permit comparability

of financial statements, as a result of the change in internal aggregation policies of

revenue and expense accounts, in order to provide users with a better understanding of

the Company's results. The key reclassifications were:

a. Balances previously presented under caption "Income from interest in associates and

subsidiaries", in the amount of R$43,512, that were substantially reclassified to

caption "Other operational expenses".

Bank

Previous

disclosure

Reclassification

Balance

reclassified

Securities 5,245,316 (2,529) 5,242,787

Derivative financial instruments (1,822,454) (12,327) (1,834,781)

Other administrative expenses (158,376) 14,856 (143,520)

Equity in income of associated companies and subsidiaries 65,501 43,512 109,013

Other operational expenses (5,009) (43,512) (48,521)

b. Balances previously presented under caption "Other administrative expenses", in the

amount of R$15,011, that were substantially reclassified to captions "Income from

securities transactions" in the amount of R$2,684 and "Derivative financial

instruments" in the amount of R$12,327.

Consolidated

Previous

disclosure

Reclassification

Balance

reclassified

Loans 4,960,874 (1,341) 4,959,533

Securities 2,311,668 (2,684) 2.308.984

Derivative financial instruments (1,082,100) (12,327) (1,094,427)

Income from lease operations 279,339 1,341 280,680

Personnel expenses (414,909) 9 (414,900)

Other administrative expenses (712,005) 15,011 (696,994)

Nonoperational income (loss) 17,011 (9) 17,002

c. Balances previously presented under caption "Expenses from financial intermediation

expenses - Lease transactions" were reclassified to "Income from financial

intermediation - Leases".

The issuance of financial statements was given by Company's directors on August 02,

2012.

3 Risk management

Risk management policies comply with market best practices and are in line with the

guidelines defined by the CMN. They encompass Bank Institutions that comprise

Votorantim Financial Conglomerate (―Conglomerate‖).

The Company implemented policies and procedures and management system capable of

managing, evaluating and mitigating the risks inherent to its business, providing the

Management with a view of all risks.

Market risk

Market risk is defined as the possibility of losses arising from the variation in the market

value of positions held. Management is executed in a centralized manner, by an area that

maintains independence in relation to the front office.

The basic procedures adopted for risk management are: (a) integrity of the pricing of

assets and derivatives; (b) evaluation of the risk using the Value at Risk methodology and

from simulating scenarios; and (c) accompanying the daily results using the back-test

methodology.

The Conglomerate undertakes operations that involve derivative financial instruments,

operating in organized and over the counter markets, in order to ensure the management

of market risk appropriate to its policy. These instruments are used for hedging positions

to meet the demand of counterparties and as a means of reversing the positions at times

of significant oscillations.

Operational risk

Operational risk is defined as loss risk, resulting from failure, weakness or inadequacy of

internal processes, people and systems or external events.

The basic principles considered by the Institution in operational risk management and

control comply with the current regulations of the Central Bank of Brazil and with best

market practices:

Involvement by Senior Management in global supervision and risk assumption by

means of established committees and commissions;

Mapping operating and systemic procedures, plotting existing controls and analysis

of inherent and residual risks;

Assessment of the potential financial impact and the likely occurrence of identified

risks;

Based on this assessment, operational risk exposure is defined according to entire

institution's standard risk matrix;

Recording of operating losses and maintenance of a structured database with

information related to the events;

Analysis, communication, and deployment of action plans to improve processes and

controls for mitigation of the risks incurred; and

Calculating Capital allocated to operational risk based on structured methods, based

on best market practices that are appropriate with regulatory requirements.

Credit risk

Credit risk consists of the possibility of occurring losses associated to a loan taker or a

counterpart's failure to fulfill their respective financial obligations under the agreed-upon

conditions, and losses associated to devaluation of a loan agreement due to deterioration

of the loan taker's risk classification, reduction in gains or compensations, advantages

granted in renegotiations and loan recovery costs.

As part of the credit risk management process, monitoring are conducted for policies,

rules, processes, established limits, in addition to risk analysis and submission to

appropriate levels and approving committees. The credit policy is formulated upon the

analysis of internal indicators in the portfolio, company pricing and evaluation processes,

and of external factors related to the financial situation of the companies and the

economic situation of the country and foreign countries.

Conglomerate carries out credit risk assessments of their operations, determined by

means of judgment and statistical models. It is worth emphasizing that in the

identification of the deterioration of the loan portfolio quality, risk mitigation measures

are taken, such as reassessment of customer risk profile and industry analysis that

influence threshold management and management and control of guarantees.

Asset and liability management

The ALM Operating Committee, Risks and Capital is in charge of managing the

structural risks of interest rate, liquidity and exchange rate, as well as the capital

management, aiming to optimize the risk/return ratio and seeking greater efficiency when

composing the factors that impact the Solvability Index (Basel).

Basel Index 06/30/2012 06/30/2011

Capital (PR) 13,624,297 12,592,040

Level I 8,948,314 8,825,463

Shareholders' equity 9,303,811 8,705,547

Deferred Fixed Assets (36,289) (32,966)

Adjustment to market value (319,208) 152,882

Level II 4,675,983 3,766,577

Adjustment to market value 319,208 (152,882)

Subordinated debt elegible to capital 4,356,775 3,919,459

Capital requirement (PRE) 9,669,244 9,999,931

Credit risk 9,109,878 9,106,298

Market risk 239,420 530,641

Operational risk 319,946 362,992

Excess of capital 3,955,053 2,592,109

Basel Index (PR x 100 / (PRE / 0.11) 15.5% 13.9%

Fixed assets limit 06/30/2012 06/30/2011

Fixed assets limit 6,812,147 12,592,040

Value of fixed assets limit position 352,307 6,296,020

Value of margin or insufficiency 6,459,840 6,077,203

In compliance with the Brazilian Central Bank (BACEN) Circular no. 3477/09, Banco

Votorantim maintains additional information on its risk management process available in the

website: www.bancovotorantim.com.br/ir.

4 Significant accounting policies

http://www.bancovotorantim.com.br/ir

a. Statement of income

The Income and expenses are recorded according to the accrual basis and are

recorded by the pro rata criterion and calculated with a basis on the exponential

method, excepting those related to transactions with foreign countries, which are

calculated by the straight-line method.

b. Cash and cash equivalents

Cash and cash equivalents are represented by available funds, deposits, investments

in foreign currency with high liquidity and insignificant risk of changes in value and

money market borrowings – own portfolio, whose maturity of the operations on the

date of the investment is up to 90 days.

c. Interbank funds applied

Interbank funds applied are recorded at investment value, plus income accrued up to

the balance sheet date, calculated pro rata with a basis on the variation of the index

and on the agreed interest rates.

d. Securities

Securities are recorded by the amount effectively paid and classified in keeping with

Management's intention in three different categories:

i. Securities for trading - Acquired for the purpose of being actively and

frequently negotiated. Adjusted to its market value with the corresponding entry

to the results for the period;

ii. Securities available for sale - Securities that are not for trading or held to

maturity. Adjusted to its market value with the corresponding entry to a separate

account in shareholders' equity, reduced for any tax effects; and

iii. Securities held to maturity - Securities acquired with the intention and financial

capacity to hold them in the portfolio to maturity. Recorded at cost of acquisition,

plus income accrued in contra account to income (loss) for the period. In this

category, the securities are not adjusted to market value.

The market valuation methodology was established in compliance with consistent

and verifiable criteria, which take into consideration the average price of trading on

the date of calculation, or, in the absence thereof, the daily adjustment value of future

market transactions disclosed by Andima, BM&FBovespa and BACEN, or the

probable net realizable value obtained using interest rate future value curves,

exchange rates, price and currency indexes, besides any adjustments in the prices of

securities of low liquidity.

Income accrued with securities, regardless of the category in which it is classified, is

calculated pro rata with a basis on the variation of the index and on the agreed interest

rates, by the exponential or straight-line method, up to the date of maturity or of the

final sale of the security, and is recognized directly in income for the period.

e. Derivative financial instruments

Derivative financial instruments are stated at its market value, with consistent and

verifiable criteria, considering the average price of trading on the date of calculation,

or, in the absence thereof, conventional and proven methodologies.

The derivative financial instruments are classified according to the intention of

Management, taking into account its purpose. Financial instruments used to offset, in

whole or in part, the risks arising from exposure to variations in asset or liability

market values are considered hedge instruments and are classified according to their

nature as:

i. Market risk hedge - adjustments to market value of the derivative financial

instruments classified in this category, as well as of the item hedged , are recorded

in counter entry to income (loss) for the period; and

ii. Cash flow hedge - Derivative financial instruments classified in this category

have their adjustments to market value recorded in the account in shareholders'

equity, reduced for any tax effects.

Derivative financial instruments that do not fulfill the hedge criteria have their

adjustments to market value recorded directly in income for the period.

For derivative financial instruments traded in association with funding operations,

both the derivative and the funding are accounted for by the intrinsic conditions

contracted, and are not adjusted by the market value.

f. Hedge accounting

The Conglomerate uses financial hedge derivatives to hedge its exposures to foreign

currency and interest rate changes.

Upon initial designation of the hedge, the Management formally documents the

relationship between the hedge instruments and the hedgeable instruments, including

the risk management goals and the strategy in the execution of the hedge transaction,

together with the methods that will be used to assess the effectiveness of the hedge

relationship, considering the conventional and well-established calculation methods.

The Management makes an assessment, both in the beginning of this relationship, and

continuously, to check if it is expected that these instruments are highly effective in

the compensation of changes in fair value of respective items object of hedge during

the period for which is designed, and if real results are within the range of 80-125 per

cent, as provided in the regulation in force.

g. Loans and leases, advances on foreign exchange contracts, other receivables with loan

characteristics and allowance for possible loan losses

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

characteristics are classified according to Management's discernment with respect to the level

of risk, taking into consideration the economic panorama, past experience and specific risks

in relation to the operation, to obligators and guarantors, periods of delinquency, and

economic group, observing the parameters established by CMN, which requires the analysis

of the portfolio and its rating at nine levels, ranging from AA (minimum risk) to H

(maximum risk). In relation to the period of delinquency verified in retail operations with a

term of over thirty-six (36) months, a double count is permitted over intervals of delinquency

defined for the nine levels. Income from loans overdue for more than sixty (60) days,

regardless of their level of risk, are only recognized as income when effectively received.

Operations rated at level H continue in this status for 180 days, when they are written off

against the existing provision and controlled in memorandum accounts. Renegotiated

operations are maintained, at a minimum, at the same level at which they were rated, in

conformity with CMN Resolution no. 2682. Renegotiations of loans that had already been

written off against provision that were in memorandum accounts are rated as H and any gains

from renegotiation are recognized as income when effectively received.

Loans and leases that are subjects of hedges of derivative financial instruments are

stated at market value using consistent and verifiable criterion. The adjustments of

valuation at market value of these operations are recorded, when positive, in Other

Receivables - Sundry, and, when negative, in Other Liabilities - Sundry, in counter

entry to Income from derivative financial instruments and income from leases.

Loan assignment calculated recognizing income at the time of assignment carried out

up to December 31, 2011, irrespectively of retention or not of risk.

Beginning as of January 1, 2012, granted financial assets consider the transfer level

of risks and benefits of assets transferred to another entity:

when financial assets are transferred to another entity but risks and benefits

related to transferred assets are not substantially transferred, assets remain

recognized in the Company's balance sheet; and

when all risks and benefits related to the assets transferred to an entity are

substantially transferred, assets are written-off from the Company's balance

sheet.

For the portfolio of loan assignments with recourse, Management established a provision for

losses, recorded under "Other liabilities - Sundry".

h. Prepaid expenses

Funds applied in prepayments, where the benefits or rendering of services are to occur

in future periods, are recorded. Prepaid expenses are recorded at cost and amortized

upon their realization.

i. Accounting estimates

Preparation of the financial statements requires that Management use its judgment in

determining and recording accounting estimates. The settlement of transactions

involving these estimates may result in significantly different amounts due to the lack

of precision inherent to the process of their determination. Material items subject to

these estimates and assumptions include the assessment of financial assets, liabilities

and derivative financial instruments at fair value, credit risk analysis to find the

allowance for loan losses, as well as to analyze contingent liabilities. The

Management reviews the estimates and assumptions on a regular basis.

The chief values recognized in the financial statements by means of estimates are

included in the following explanatory notes:

no. 8 – Securities;

no. 9 – Derivative financial instruments;

no. 12 – Loans; and

no. 49 – Contingent assets, liabilities and legal obligations.

j. Fixed assets

i. Investments in equity interest are valued using the equity method. Other

permanent investments are valued at cost of acquisition less allowance for losses,

when applicable;

ii. Property, plant and equipment stated at acquisition cost, less accumulated

depreciation. Depreciation of fixed assets is calculated using the straight line

method, based on the following annual rates according to the useful economic

lives of the assets, as follows:

Facilities, furniture and equipment in use - 10%;

Communication, security, and transportation system - 10% and

Data processing and similar systems - 20%.

iii. Deferred assets are stated at acquisition or formation cost less the respective

amortization, comprised basically of expenses on third-party property up to

September 30, 2008. Amortization is calculated by the straight-line method, based

on the period over which the benefit is generated. There were no acquisitions

during the period owing to the regulations in force. Losses on leases are

amortized over the remaining useful life of the leased items and in compliance

with current regulation; and

iv. Intangible include rights relating to intangible assets that are intended for the

maintenance of the company or exercised for this purpose. Amortization is

calculated by the straight-line method, based on the period over which the benefit

is generated.

Non-financial assets are subject to evaluation of the recoverable value annually.

k. Taxes

Income tax was determined with a basis on the rate of 15%, plus a surcharge of 10%, and

social contribution was determined with a basis on the rate of 15%, both applicable to the

taxable income.

Deferred income tax is recognized at the subsidiary BV Leasing, calculated at the rate of

25%, on the adjustment of supervenience of depreciation of the lease portfolio.

The formation of tax credit of income and social contribution taxes is based on a technical

study evidencing the capacity of realization, prepared by Management.

PIS (Social Integration Program) was calculated based on the rate of 0.65% and COFINS

(Contribution for Social Security Funding) was calculated based on the rate of 4%, both

applicable on the Company's income accrued less exclusions and deductions provided for

under legislation in force.

ISS (service tax) was calculated considering a rate of 2% to 5% rate (rate varies for each

municipality) in service revenues earned by the Company.

l. Contingent assets, liabilities and legal obligations

The recognition, measuring and disclosure of contingent assets, liabilities and legal

obligations are carried out according to the following criteria:

i. Contingent assets- These are not recorded except when Management has full

control over the situation or when there are secured guarantees or favorable

sentences to which no further appeals are applicable, characterizing a favorable

judgment as practically certain;

ii. Contingent liabilities - These are recognized in the financial statements when,

based on the opinion of the legal counsel and of Management, the risk of loss of a

lawsuit or administrative proceeding is considered probable, with a probable

outflow of financial resources for the settlement of obligations and when the sums

involved are measurable with sufficient assurance. Contingent liabilities

classified as possible losses are not accounted for, and should only be disclosed in

the notes to the financial statements, whereas those classified as remote do not

require provision and disclosure; and

iii. Legal obligations - Are lawsuits related to tax obligations, where the subject

being contested is their legality or constitutionality which, regardless of the

probability of success of the lawsuits in progress, have their amounts recognized

in full in the financial statements.

m. Other assets and liabilities

Assets are stated at realizable values, including, when applicable, monetary and exchange

variations earned (on a pro rata daily basis) and a provision for losses, when considered

necessary. Liabilities are stated at known or calculated amounts, plus charges and monetary

variations and exchange variations incurred (on a pro rata daily basis).

5 Breakdown of cash and cash equivalents

Bank Consolidated

06/30/2012 06/30/2011 06/30/2012 06/30/2011

Cash and cash equivalents 90,451 62,452 162,873 151,625

Interbank funds applied

Purchase and sale commitments - Own

portfolio

1,177,416 1,636,099 1,177,416 1,636,099

Interbank deposits 394,552 691,747 410,519 715,058

Investments in foreign currency 195,749 124,955 208,185 124,955

Total 1,858,168 2,515,253 1,958,993 2,627,737

6 Cash and cash equivalents

Bank Consolidated

06/30/2012 06/30/2011 06/30/2012 06/30/2011

Cash 327 242 359 288

Bank deposits 91 34 58,505 78,219

Free reserves 54,841 15,768 54,841 15,768

Cash and cash equivalents in foreign

currency

35,192 46,408 49,168 57,350

Total 90,451 62,452 162,873 151,625

7 Interbank funds applied

Bank Consolidated

06/30/2012 06/30/2011 06/30/2012 06/30/2011

Purchase and sale

commitments - Own portfolio

3,241,444 3,833,461 2,473,518 3,833,461

Financing bills - 332,800 - 332,800

National treasury bills 827,897 746,276 59,971 746,276

National Treasury notes 2,397,460 2,635,917 2,397,460 2,635,917

Other 16,087 118,468 16,087 118,468

Purchase and sale

commitments - Financed

Operations

13,220,953 9,289,985 9,386,288 9,289,985

Financing bills - 2,148,390 - 2,148,390

National treasury bills 13,162,948 7,005,469 9,328,283 7,005,469

National Treasury notes 58,005 136,126 58,005 136,126

Purchase and sale

commitments - Short position

509,713 1,733,125 509,713 1,733,125


National Treasury notes 297,819 1,536,849 297,819 1,536,849


Foreign currency investments 195,749 124,955 208,185 124,955

Total

56,734,627 54,244,053 14,684,711 17,063,368

Accounting hedge strategies Bank and

Consolidated

06/30/2012 06/30/2011

Cost Market

value

Unrealized

gain/(loss)

Cost Market

value

Unrealized

gain/(loss)

Purchase and sale

commitments

4,066,854 4,072,502 5,648 - - -

Total 4,066,854 4,072,502 5,648 - - -

In order to hedge the Prefixed rate risks of part of the purchase and sale commitments, the

Conglomerate entered into contracts on the Interbank Deposit (DI) futures market with

BM&FBOVESPA, in accordance with the maturity of the purchase and sale commitments. The

market value of these derivatives amounts to R$ 3,610,941.

The effectiveness verified in the hedge portfolio complies with the provisions of regulation in

force.

8 Securities

Breakdown by category, in the Country and Abroad

Bank 06/30/2012 06/30/2011

Trading securities

Cost

Market value

(book value)

Unrealized gain

(loss) Cost

Market value

(book value)

Unrealized gain

(loss)

Domestic 25,879,265 25,924,895 45,630 28,124,856 28,093,209 (31,647)

Financing bills 1,223,884 1,227,974 4,090 1,188,623 1,188,598 (25)

National treasury bills 461,581 462,904 1,323 2,297,521 2,288,140 (9,381)

National Treasury notes 2,398,617 2,409,507 10,890 4,366,115 4,301,683 (64,432)

Debentures 21,239,040 21,239,049 9 19,458,122 19,490,683 32,561

Agricultural debt securities - - - 35,328 36,408 1,080

Rural Product Bills 534,988 564,239 29,251 561,661 569,414 7,753

Promissory notes - - - 169,510 169,354 (156)

Shares of listed companies 21,155 21,222 67 47,976 48,929 953

Abroad 354,497 355,797 1,300 1,151,286 1,101,320 (49,966)

Brazilian foreign debt - - - 74,755 77,817 3,062

Foreign governments - - - 562,038 561,234 (804)

National Treasury 165,046 165,043 (3) 120,192 112,812 (7,380)

Other securities 189,451 190,754 1,303 394,301 349,457 (44,844)

Total 26,233,762 26,280,692 46,930 29,276,142 29,194,529 (81,613)

Bank 06/30/2012 06/30/2011

Securities available for sale

Cost

Market

value (book

value)

Unrealized gain

(loss) Cost

Market value

(book value)

Unrealized gain

(loss)

Domestic 12,734,055 13,071,558 337,503 11,902,003 11,686,041 (215,962)

National treasury bills 1,211,137 1,219,686 8,549 1,171,539 1,168,574 (2,965)


Real estate receivables

certificates

44,267 45,559 1,292 13,277 14,709 1,432

Debentures 2,394,272 2,403,700 9,428 1,533,743 1,549,646 15,903

Agricultural debt securities 30,996 33,203 2,207 - - -

Promissory notes 437,315 432,661 (4,654) 150,773 150,773 -

Shares in invest. funds 890,980 890,980 - - - -

FIDC quotas 341,922 341,922 - 457,486 457,479 (7)

FIP shares - - - 675,205 675,205 -

Shares of listed companies 69,521 50,666 (18,855) 314,562 288,839 (25,723)

Shares of private companies 1,606,543 1,666,195 59,652 1,724,080 1,647,304 (76,776)

Other securities 50,977 50,977 - - - -

Abroad 2,241,010 2,226,551 (14,459) 3,334,934 3,327,864 (7,070)

Foreign governments 1,350,819 1,365,487 14,668 2,299,282 2,304,036 4,754

Other securities 890,191 861,064 (29,127) 1,035,652 1,023,828 (11,824)

Total 14,975,065 15,298,109 323,044 15,236,937 15,013,905 (223,032)

Consolidated 06/30/2012 06/30/2011

Trading securities

Cost

Market value

(book value)

Unrealized gain

(loss) Cost

Market value

(book value)

Unrealized gain

(loss)

Domestic 4,967,520 5,018,755 51,235 11,511,828 11,487,699 (24,129)

Financing bills 1,492,894 1,497,537 4,643 1,253,713 1,253,687 (26)

National treasury bills 461,581 462,904 1,323 2,297,521 2,288,140 (9,381)


Debentures 6,104 6,112 8 264,812 297,373 32,561

Agricultural debt securities - - - 35,328 36,408 1,080

Rural Product Bills 534,988 564,239 29,251 561,661 569,414 7,753

Promissory notes - - - 169,510 169,354 (156)

Shares in invest. funds 6,798 6,798 - 1,591,368 1,591,368 -

FIDC quotas - - - 872,259 872,259 -

Shares of listed companies 21,155 21,222 67 47,976 48,929 953

Abroad 374,709 376,009 1,300 1,173,140 1,122,938 (50,202)

Brazilian foreign debt - - - 74,755 77,817 3,062

Foreign governments 20,213 20,212 (1) 576,244 575,440 (804)

National Treasury 165,046 165,043 (3) 120,192 112,812 (7,380)

Other securities 189,450 190,754 1,304 401,949 356,869 (45,080)

Total 5,342,229 5,394,764 52,535 12,684,968 12,610,637 (74,331)

Consolidated 06/30/2012 06/30/2011

Securities available for sale

Cost

Market value

(book value)

Unrealized gain

(loss) Cost

Market value

(book value)

Unrealized gain

(loss)

Domestic 20,636,668 21,221,902 585,234 12,408,745 12,192,784 (215,961)

National treasury bills 7,028,545 7,254,198 225,653 1,171,539 1,168,574 (2,965)


Real estate receivables

certificates

44,267 45,559 1,292 13,277 14,709 1,432

Debentures 2,035,471 2,044,901 9,430 1,533,743 1,549,646 15,903

Agricultural debt securities 30,996 33,203 2,207 - - -

Promissory notes 437,315 432,661 (4,654) 150,773 150,773 -

Shares in invest. funds 2,794,830 2,794,830 - 4,572 4,572 -

FIDC quotas 375,186 375,185 (1) 959,656 959,650 (6)

FIP shares - - - 675,205 675,205 -

Shares of listed companies 69,521 50,666 (18,855) 314,562 288,839 (25,723)

Shares of private companies 1,606,543 1,666,195 59,652 1,724,080 1,647,304 (76,776)

Other securities 50,977 50,977 - - - -

Abroad

2,241,010 2,226,551 (14,459) 3,334,934

3,327,864 (7,070)

Foreign governments 1,350,819 1,365,487 14,668 2,299,282 2,304,036 4,754

Other securities 890,191 861,064 (29,127) 1,035,652 1,023,828 (11,824)

Total 22,877,678 23,448,453 570,775 15,743,679 15,520,648 (223,031)

On June 30, 2012 there are not securities classified as "held to maturity".

On June 30, 2012, the Agricultural debt securities was reclassified from category "Trading" to

category "Available for sale", as Management reviewed its intention on respective securities.

Reclassification of these securities does not impact results and shareholders' equity in the

respective base date.

Cost Market value Unrealized

gain/loss

Agricultural debt securities 19,077 20,403 1,326

Accounting hedge strategies Bank and

Consolidated

06/30/2012 06/30/2011

Cost Market

value

Unrealized

gain (loss)

Cost Market

value

Unrealized

gain (loss)

Debentures - with

exchange variation

282,233 305,300 23,067 - - -

Total 282,233 305,300 23,067 - - -

To hedge against exchange risks of the debentures, Conglomerate negotiated contracts in the DDI

futures market with BM&FBOVESPA, in accordance with maturity of the debentures. The

market value of these derivatives amounts to R$ 336,122.


force.

9 Derivative financial instruments

a. Composition in assets and liabilities

Bank Consolidated

Assets 06/30/2012 06/30/2011 06/30/2012 06/30/2011

Differential of swap receivable 2,107,905 1,177,850 1,336,908 998,187

Term currency contracts 784 1,482 784 1,482

Purchase of call options - shares 176 1,551 176 1,551

Purchase of put options - shares 4,005 5,352 4,005 5,352

Purchase of call options - financial assets/ merc.

520,960 130,408 520,960 130,408

Purchase of put options - financial assets/goods

29,296 76,503 29,296 76,503

Credit derivatives 24,050 320,904 24,050 320,904

Non deliverable forward – NDF 245,047 111,836 245,047 111,836

Others - 4 - 4

Total 2,932,223 1,825,890 2,161,226 1,646,227

Liabilities

Differential of swap payable 1,335,583 1,700,557 1,208,767 2,543,655

Term currency contracts 758 866 758 866

Sale of call options - Shares 236 4,051 236 4,051

Sale of put options - Shares 4,128 10,305 4,128 10,305

Sale of call options - financial assets/goods. 474,195 146,702 474,195 146,702

Sale of put options - financial assets/goods 47,530 109,033 47,530 109,033

Option box - Fixed income strategy 18,923,872 21,912,399 1,022,503 3,214,009


Non deliverable forward – NDF 65,670 136,091 65,670 136,091

Total 20,874,964 24,191,735 2,846,779 6,336,443

b. Composition of the swap contracts by index

Bank 06/30/2012 06/30/2011

Original

value Cost

Market

value

Original

value Cost Market value

Asset position 48,381,597 55,699,897 57,784,531 54,516,358 59,374,609 59,244,865

DI 13,422,274 14,545,859 15,716,679 13,206,992 15,116,857 15,120,817

Dollar 4,643,783 5,614,951 5,740,111 6,669,055 6,178,266 6,192,310

Euro 461,391 518,395 522,059 475,781 467,136 453,884

IGPM 1,070,857 1,435,979 1,525,866 1,095,141 1,403,290 1,406,216

IPCA 5,045,032 5,638,048 5,783,089 2,764,920 3,056,577 3,024,569

Pre-fixed 21,603,653 25,640,786 26,208,037 28,129,432 30,997,713 30,896,971

Libor 1,388,557 1,458,217 1,436,958 1,471,148 1,412,756 1,414,511

Yen - - - 23,982 23,463 23,380

Commodities 1,808 1,808 1,569 2,976 2,953 3,144

Swiss Franc 441,047 542,659 553,396 441,047 479,715 474,889

Others 303,195 303,195 296,767 235,884 235,883 234,174

Asset position 48,381,597 54,928,633 57,012,209 54,516,358 59,816,307 59,767,572

DI 27,738,461 32,268,483 32,291,714 31,387,401 34,525,843 34,515,750

Dollar 2,531,409 2,930,266 2,955,211 2,802,071 2,621,853 2,615,861

Euro 31,781 32,157 32,098 10,732 10,953 10,874

IGPM 613,570 900,680 969,679 917,270 1,257,463 1,264,985

IPCA 6,146,638 7,853,642 8,227,103 5,427,149 6,647,838 6,575,026

Pre-fixed 10,764,893 10,374,445 11,992,030 13,223,779 14,005,687 14,037,505

Libor 282,195 276,293 250,692 653,975 641,501 642,058

Yen - - - 39,736 39,449 39,309

Long Term

Interest Rate

(TJLP)

257,890 270,282 270,439 37,790 44,069 44,171

Commodities 2,855 2,824 2,423 2,882 2,723 2,573

Others 11,905 19,561 20,820 13,573 18,928 19,460

Net differential - 771,264 772,322 - (441,698) (522,707)

Consolidated 06/30/2012 06/30/2011

Original

value Cost

Market

value

Original


Asset position 27,025,478 30,191,189 31,766,188 29,912,820 32,320,810 32,302,272

DI 11,499,002 12,290,654 13,461,474 10,907,168 12,454,866 12,458,826

Dollar 4,588,397 5,545,987 5,671,178 7,711,086 7,540,171 7,556,348

Euro 461,391 518,395 522,059 475,781 467,136 453,884

IGPM 1,070,857 1,435,979 1,525,866 1,095,141 1,403,290 1,406,216

IPCA 5,045,032 5,638,048 5,783,089 2,764,920 3,056,577 3,024,569

Pre-fixed 2,226,192 2,456,247 2,513,832 4,783,687 5,244,000 5,252,331

Libor 1,388,557 1,458,217 1,436,958 1,471,148 1,412,756 1,414,511

Yen - - - 23,982 23,463 23,380

Commodities 1,808 1,808 1,569 2,976 2,953 3,144

Swiss Franc 441,047 542,659 553,396 441,047 479,715 474,889

Others 303,195 303,195 296,767 235,884 235,883 234,174

Asset position 27,025,478 29,629,840 31,638,047 29,912,820 33,878,731 33,847,740

DI 8,305,614 9,276,194 9,299,425 9,083,687 11,283,590 11,273,470

Dollar 2,516,109 2,911,790 2,936,757 2,689,780 2,515,783 2,511,212

Euro 31,781 32,157 32,098 10,732 10,953 10,874

IGPM 613,570 900,680 969,679 917,270 1,257,463 1,264,985

IPCA 6,146,638 7,853,642 8,227,103 5,427,149 6,647,838 6,575,026

Pre-fixed 8,856,921 8,086,417 9,628,611 11,036,246 11,416,434 11,464,602

Libor 282,195 276,293 250,692 653,975 641,501 642,058

Yen - - - 39,736 39,449 39,309

Long Term

Interest Rate

(TJLP)

257,890 270,282 270,439 37,790 44,069 44,171

Commodities 2,855 2,824 2,423 2,882 2,723 2,573

Others 11,905 19,561 20,820 13,573 18,928 19,460

Net differential - 561,349 128,141 - (1,557,921) (1,545,468)

c. Composition of the forward contracts by index

Bank and

Consolidated

06/30/2012 06/30/2011

Original


Original


Asset position

Forward currency 30,493 986 784 59,324 1,482 1,482

Total 30,493 986 784 59,324 1,482 1,482

Asset position

Forward currency 30,493 5,092 758 59,324 866 866

Total 30,493 5,092 758 59,324 866 866

d. Composition of the options contracts by index

Bank and

Consolidated 06/30/2012 06/30/2011

Long position

Amount

contracted

Market value

(book value)

Amount

contracted

Market value

(book value)

Dollar 5,536,488 465,032 7,451,886 81,310

Table of contents 11,708,281 8,655 549,853,347 842

DI - - 26 106,681

Shares 454,151 4,181 434,241 6,903

Commodities 2,922 563 8,955 7,131

Flexible 1,407,175 76,006 598,046 10,947

Total 19,109,017 554,437 558,346,501 213,814

Short position

Dollar 8,207,531 480,642 8,788,017 86,874

Table of contents 11,476,436 6,211 591,110,985 100,901

DI - - 57 641

Shares 459,800 4,364 569,027 14,356

Commodities 42,679 2,688 34,537 1,874

Flexible 1,168,629 32,184 2,588,641 65,445

Total 21,355,075 526,089 603,091,264 270,091

e. Composition of the futures contracts by index

Bank Consolidated

06/30/2012 06/30/2011 06/30/2012 06/30/2011

Commitment of

purchase

48,202,252 41,058,362 48,202,252 41,058,362

DDI 13,139,042 12,578,598 13,139,042 12,578,598

Dollar 1,880,268 1,507,327 1,880,268 1,869,015

DI 32,895,058 25,902,914 32,895,058 25,902,914

Exchange Coupon 7,533 361,688 7,533 -

Commodities 1,603 3,975 1,603 3,975

Table of contents 22,371 228,459 22,371 228,459

SCC 256,377 475,401 256,377 475,401

Sale commitment 32,895,665 58,710,024 75,825,605 98,403,187

DDI 14,886,597 11,749,711 14,886,597 11,791,842

Dollar 409,384 16,793 409,384 16,793

DI 17,246,117 434,090 60,176,057 434,090

Exchange Coupon 412 45,966,556 412 85,578,763

Commodities 30,033 28,200 30,033 67,025

T-Note - 38,193 - 38,193

Table of contents 71,203 632 71,203 632

Euro 502 - 502 -

BGI 3,901 4,475 3,901 4,475

SCC 247,516 471,374 247,516 471,374

Total 15,306,587 (17,651,662) (27,623,353) (57,344,825)

f. Composition of the NDF contracts by index

Bank and

Consolidated

06/30/2012 06/30/2011

Amount

contracted

Market value (book

value)

Amount

contracted

Market value (book

value)

Assets

Dollar 3,582,699 149,959 1,200,784 29,677

Euro 9,063 193 970 680

Others 1,272,203 94,895 149,479 81,479

Subtotal 4,863,965 245,047 1,351,233 111,836

Liabilities

Dollar 587,483 33,149 470,704 118,945

Euro - 4 13,194 13

Others 1,123,754 32,517 239,125 17,133

Subtotal 1,711,237 65,670 723,023 136,091

Total 3,152,728 179,377 628,210 (24,255)

Credit derivatives

Bank and Consolidated 06/30/2012 06/30/2011

Reference

value

Market

value

Reference

value

Market

value

Risk taken

Credit swaps 3,264,400 (8,866) 3,293,921 43,322

Credit linked notes - - 285,681 302,703

Total 3,264,400 (8,866) 3,579,602 346,025

Risk transferred

Credit swaps 811,612 9,924 1,311,324 6,091

Credit linked notes - - 107,732 113,262

Equity linked notes - - 27,319 27,257

Total 811,612 9,924 1,446,375 146,610

g. Credit derivatives by index

Bank and

Consolidated

06/30/2012 06/30/2011

Original

value Cost

Market

value

Original

value Cost

Market

value

Asset position

Pre-fixed 3,335,145 16,716 24,050 1,987,280 295,882 320,904

Total 3,335,145 16,716 24,050 1,987,280 295,882 320,904

Asset position

Pre-fixed 740,867 5,370 22,992 3,038,697 138,650 171,731

Total 740,867 5,370 22,992 3,038,697 138,650 171,731

h. Composition of the Option box contracts - fixed income strategy

Bank 06/30/2012 06/30/2011

Amount

contracted

Market value /

Risk exposure Amount

contracted

Market

value / Risk

exposure

Prefixed Risk

Asset position

Sale of Call with high limit 5,456,850 6,872,299 7,102,043 5,047,879

Sale of Put with low limit 10,340,657 12,051,573 13,211,823 16,864,520

Total 15,797,507 18,923,872 20,313,866 21,912,399

Dollar risk

Asset position

Sale of Put with low limit - 16,465,615 - 16,674,292

Subtotal - 16,465,615 - 16,674,292

Asset position

Sale of Call with high limit - 16,465,615 - 16,674,292

Subtotal - 16,465,615 - 16,674,292

Total - - - -

Consolidated 06/30/2012 06/30/2011

Amount

contracted

Market value /

Risk exposure

Amount

contracted

Market

value / Risk

exposure

Prefixed Risk

Asset position

Sale of Call with high limit 303,772 354,235 1,003,414 662,359

Sale of Put with low limit 667,765 668,268 1,962,337 2,551,650

Total 971,537 1,022,503 2,965,751 3,214,009

Dollar risk

Asset position

Sale of Put with low limit - 841,437 - 2,518,724

Subtotal - 841,437 - 2,518,724

Asset position

Sale of Call with high limit - 841,437 - 2,518,724

Subtotal - 841,437 - 2,518,724

Total - - - -

i. Securities given in guarantee

Bank Consolidated

06/30/2012 06/30/2011 06/30/2012 06/30/2011

Stock Exchange transactions 763,715 1,087,786 1,960,374 1,111,302


Financing bills - 23,733 - 23,733

National treasury bills - 158,702 1,174,964 158,702

Clearing House operations 101,876 117,489 101,876 117,489


National treasury bills - 67,787 - 67,787

Others 2,247,766 3,608,804 2,272,871 3,624,699


Financing bills 16,027 1,340 41,132 17,235

Others (a) 1,727,879 2,795,162 1,727,879 2,795,162

Total 3,113,357 4,814,079 4,335,121 4,853,490

(a) In 2012, basically refer to securities of foreign governments, in the amount of

R$1,365,487 (R$ 1,879,453 in 2011), and other securities abroad, in the amount of R$

355,146 (R$ 915,709 in 2011).

j. Financial derivative instruments segregated by trading location and counter-party

Bank Consolidated

Asset position 06/30/2012 06/30/2011 06/30/2012 06/30/2011

Stock Exchange transactions 554,437 213,814 554,437 213,814

Over-the-Counter 2,377,786 1,612,076 1,606,789 1,432,413

Financial institutions 2,043,925 1,388,851 1,272,928 1,175,501

Trade accounts receivable 333,861 223,225 333,861 256,912

Total 2,932,223 1,825,890 2,161,226 1,646,227

Bank Consolidated

Asset position 06/30/2012 06/30/2011 06/30/2012 06/30/2011

Stock Exchange transactions 526,089 270,091 526,089 270,091

Over-the-Counter 20,348,875 23,921,644 2,320,690 6,066,352

Financial institutions 20,250,246 23,854,316 2,222,061 5,879,831

Trade accounts receivable 98,629 67,328 98,629 186,521

Total 20,874,964 24,191,735 2,846,779 6,336,443

k. Breakdown of derivative financial instruments used in hedge strategies

Bank Consolidated

Hedge instruments 06/30/2012 06/30/2011 06/30/2012 06/30/2011

Market risk hedge

Assets 23,980,773 24,302,715 20,221,475 26,498,278

Futures 18,903,915 14,087,540 18,903,915 14,087,540

Swap 3,759,298 4,686,024 - 6,881,587

Options 1,317,560 5,529,151 1,317,560 5,529,151

Liabilities 21,297,783 21,811,773 59,880,934 83,997,298

Futures 16,248,003 12,773,072 57,774,391 50,206,471

Swap 2,943,237 2,545,089 - 27,297,215

Options 2,106,543 6,493,612 2,106,543 6,493,612

Cash flow risk hedge

Assets 883,305 - 883,305 -

Swap 883,305 - 883,305 -

Items to be hedged

Assets 4,748,508 4,442,066 50,453,233 65,231,402

Loans 2,304,280 1,726,405 45,207,907 39,715,670

Securities 380,362 757,765 430,798 19,515,248

Leases - - 2,750,662 4,042,588

Foreign investments 731,065 656,192 731,065 656,192

Other assets 1,332,801 1,301,704 1,332,801 1,301,704

Liabilities 7,828,056 6,960,057 7,828,056 6,960,057

Other liabilities 7,828,056 6,960,057 7,828,056 6,960,057

10 Interbank accounts/relations Assets

Bank and Consolidated

06/30/2012 06/30/2011

Payments and receivables to be settled 544 1,494

Mandatory reserves - BACEN 2,835,795 6,048,845

Compulsory deposits on demand deposits 116,105 116,374

Compulsory deposits on time deposits 1,548,222 3,393,397

Compulsory deposits on additional liabilities 1,165,625 2,533,857

Compulsory deposits on microfinance operations 5,843 5,217

Interbank onlendings 176,199 61,119

Correspondent relations 916 2,127

Total 3,013,454 6,113,585

Liabilities


06/30/2012 06/30/2011

Payments and receivables to be settled 5,532 11,518

Total

5,532 11,518

11 Interbranch accounts Bank

Liabilities 06/30/2012 06/30/2011

Funds in transit - Associated companies 4,749 12,576

Receipts in transit - Third parties 513 10

Payment orders in foreign currency 119,302 101,032

Total 124,564 113,618

Consolidated

Liabilities 06/30/2012 06/30/2011

Funds in transit - Associated companies 4,749 12,576

Receipts in transit - Third parties 513 10

Payment orders in foreign currency 119,302 101,032

Local transfer of funds 24 3

Total 124,588 113,621

12 Loans and leases, advances on foreign exchange contracts, other receivables

with loan characteristics and allowance for possible loan losses

a. Composition of operations by category and past due and falling due installments

Bank Consolidated

06/30/2012 06/30/2011 06/30/2012 06/30/2011

Advances to depositors 641 982 641 982

Loans 9,447,695 9,054,059 16,706,306 15,066,711

Discounted securities 65,302 41,465 65,302 41,465

Loans and financing 4,693,012 5,880,854 33,237,004 36,878,425

Export financing 3,559,919 2,813,195 3,559,919 2,813,195

Financing in foreign currency 631,911 300,643 631,911 300,643

Rural financing agreements 556,426 1,291,456 556,426 1,291,456

Real estate financing agreements 413,196 180,171 413,196 180,171

Loans subject to assignments - - 96,771 -

Subtotal 19,368,102 19,562,825 55,267,476 56,573,048

Advances on exchange contracts 915,352 733,248 915,352 733,248

Leases - - 2,440,083 3,605,947

Credits for sureties and guarantees paid - 672 - 672

Securities and credits receivable - - 186,199 299,867

Total lending operations 20,283,454 20,296,745 58,809,110 61,212,782

Bank Consolidated

06/30/2012 06/30/2011 06/30/2012 06/30/2011

Payments falling due 20,057,220 20,213,512 56,589,444 60,018,124

Total installments 20,283,454 20,296,745 58,809,110 61,212,782

b. Concentration of operations

Bank Consolidated

06/30/2012 06/30/2011 06/30/2012 06/30/2011

Ten main debtors 2,957,037 2,880,019 3,046,802 2,938,187

50 following greatest debtors 4,095,018 4,181,908 4,187,632 4,261,170

Next one hundred main debtors 3,106,930 3,333,792 3,167,985 3,394,856

Other clients 10,124,469 9,901,026 48,406,691 50,618,569

Total 20,283,454 20,296,745 58,809,110 61,212,782

c. Composition of operations by sector of economic activity

Bank Consolidated

06/30/2012 06/30/2011 06/30/2012 06/30/2011

Legal entities 19,901,313 19,519,672 21,719,119 21,314,407

State public sector

Services 52,919 61,667 52,919 61,667

Private sector

Industry 10,410,037 10,116,783 10,573,947 10,263,942

Commerce 3,138,904 2,919,925 3,866,042 3,756,348

Rural 556,426 1,291,456 556,426 1,291,456

Services 5,743,027 5,129,841 6,669,785 5,940,994

Individuals 382,141 777,073 37,089,991 39,898,375

Total 20,283,454 20,296,745 58,809,110 61,212,782

d. Composition of the operations at the corresponding levels of risk

Bank 06/30/2012 06/30/2011

Risk level Ordinary

course

Overdue

operations

Total

operations

Ordinary

course

Overdue

operations

Total

operations

AA 9,249,735 - 9,249,735 11,100,121 - 11,100,121

A 4,832,204 - 4,832,204 5,459,891 - 5,459,891

B 3,459,253 25,714 3,484,967 2,230,716 13,828 2,244,544

C 1,074,135 45,620 1,119,755 519,446 24,921 544,367

D 504,653 77,318 581,971 553,725 25,683 579,408

E 449,986 35,276 485,262 10,784 4,888 15,672

F 15,788 33,689 49,477 105,655 31,117 136,772

G 16,162 48,190 64,352 19,642 8,093 27,735

H 104,739 310,992 415,731 7,039 181,196 188,235

Total 19,706,655 576,799 20,283,454 20,007,019 289,726 20,296,745

Consolidated 06/30/2012 06/30/2011

Risk level Ordinary

course

Overdue

operations

Total

operations

Ordinary

course

Overdue

operations

Total

operations

AA 9,598,830 - 9,598,830 11,399,387 - 11,399,387

A 33,441,152 - 33,441,152 39,958,354 - 39,958,354

B 4,209,718 1,699,678 5,909,396 2,375,168 1,853,158 4,228,326

C 1,376,160 1,619,195 2,995,355 593,147 1,434,494 2,027,641

D 556,817 1,015,072 1,571,889 585,170 807,319 1,392,489

E 458,861 678,690 1,137,551 28,270 491,680 519,950

F 23,409 625,193 648,602 116,512 370,328 486,840

G 76,427 650,251 726,678 28,029 243,143 271,172

H 191,065 2,588,592 2,779,657 57,465 871,158 928,623

Total 49,932,439 8,876,671 58,809,110 55,141,502 6,071,280 61,212,782

e. Formation of allowance for loan losses by level of risk and type of portfolios

Bank

Consolidated

Risk level

%

Provision

06/30/2012 06/30/2011

06/30/2012 06/30/2011

A 0.5 24,160 27,300 167,206 199,792

B 1 34,849 22,445 59,094 42,283

C 3 33,592 16,331 89,861 60,829

D 10 58,197 57,940 157,189 139,249

E 30 178,024 4,701 373,709 155,985

F 50 24,739 68,386 324,301 243,421

G 70 45,046 19,414 508,674 189,819

H 100 415,731 188,235 2,779,657 928,623

Total 814,338 404,752 4,459,691 1,960,001

Percentage of the

portfolio 4.01%

1.99% 7.58% 3.20%

Bank Consolidated

06/30/2012 06/30/2011 06/30/2012 06/30/2011

Provision for loans and discounted

securities 495,682 184,200 1,079,472 484,527

Provision for financing 258,547 167,016 3,116,298 1,237,932

Rural and agroindustrial financing 5,759 6,509 5,759 6,509

Provision for real estate financing 3,057 297 3,057 297

Provision for loss with financial leases - - 187,282 184,006

Provision for loans - - 484 -

Provision for other credits 51,293 46,730 67,339 46,730

Total 814,338 404,752 4,459,691 1,960,001

f. Movement of allowance for loan losses in the period

Bank

Consolidated

01/01 to

06/30/2012

01/01 to

06/30/2011

01/01 to

06/30/2012

01/01 to

06/30/2011

Opening balance 652,592 285,684 3,206,327 1,153,336

Recorded / (Reversals) 250,228 141,126 3,025,045 1,268,433

Write-offs to loss (88,482) (22,058) (1,771,681) (461,768)

Closing balance 814,338 404,752 4,459,691 1,960,001

g. Information on credit assignments at June 30, 2011

06/30/2011

Transfer amount of assets assigned in the period 7,045,324

Book value of assets assigned in the period (6,243,399)

Gross income from assignments 801,925

Expenses with assigned contracts' early settlement (288,398)

Provision for losses on assigned contracts (90,792)

Income from assignments before costs and taxes 422,735

Acceleration of the recognition in profit or loss of the costs associated with the

asset assigned (180,951)

Income from assignments before taxes 241,784

Tax effects (108,907)

Net Income (loss) from assignments 132,877

At June 30, 2012, the Bank calculated the expenses with early settlement fully recognized in

statement of income accounts in the amount of R$ 131,874 and provision for losses in the

amount of R$ 23,198 for the assignments carried out up to December 31, 2011.

06/30/2012 06/30/2011

Balance of co-obligations with credit assignments

Financial institutions – Related parties 13,205,999 13,496,615

Other financial institutions 534,354 1,343,840

Total 13,740,353 14,840,455

Banco Votorantim and its subsidiary BV Financeira hold 100% of the subordinated quotas of

credit receivables investment funds as follows:

06/30/2012 06/30/2011

BV Financeira FIDC I 278.066 262,888

BV Financeira FIDC II 128,467 164,803

BV Financeira FIDC III 179,711 160,123

BV Financeira FIDC IV 423,176 284,445

BV Financeira FIDC V 820,995 441,843

Total investments in shares 1,830,415 1,314,102

h. Information on credit assignments carried out as from January 1, 2012:

In the first semester of 2012, transfers of financial assets were undertaken (consumer loans -

CDC), with a substantial retaining of the risks and benefits, to credit receivable investment

funds, of which BV Financeira holds 100% of the subordinated quotas, as demonstrated

below:

Financial assets

subject to sale

Liability related to

obligation assumed

BV Financeira FIDC III 80,465 85,698

BV Financeira FIDC IV 4,582 4,824

BV Financeira FIDC VI 11,724 12,662

Total 96,711 103,184

Revenues from sold or transferred assets totaled R$8,006 and expenses with obligations from

financial asset sale or transfer totaled R$7,622.

Also in 2012, the Bank did not adopt the option provided for in Resolution no. 4,036/11 on

the treatment of anticipated settlement losses.

i. Accounting hedge strategies

Credit portfolio market value was determined as defined in BACEN Resolution 3082/02.

This determination considered the respective derivative hedge that reflects the effects of

interest rate change in credit portfolio, in accordance with installment maturities flow, to

offset adjustments carried out in derivatives market.

Bank

06/30/2012 06/30/2011

Cost

Market

value

Unrealized

gain (loss) Cost

Market

value

Unrealized

gain (loss)

Loans 5,576,176 5,812,595 236,419 2,243,403 2,319,724 76,321

Total 5,576,176 5,812,595 236,419 2,243,403 2,319,724 76,321

On June 30, 2012, the evaluation of such assets generated an unrealized positive adjustment

of R$236,419 (R$76,321 in 2011), recorded under Other receivables - Sundry.

In order to hedge the risks of the pre-fixed interest rates of loans and assignments, the Bank

entered into contracts on the Interbank Deposit (DI) futures market with BM&FBOVESPA,

in accordance with the maturity schedule of the installments. The market value of these

derivatives amounts totalized R$ 2,931,649 at June 30, 2012.

To hedge against variable interest rate risks (US dollar) of export financing, Bank negotiated

contracts in the DDI futures market with BM&FBOVESPA, in accordance with installment

maturities flow. The market value of these derivatives amounts totalized R$ 2,746,871 at

June 30, 2012..

Consolidated

06/30/2012 06/30/2011

Cost

Market

value

Unrealized

gain (loss) Cost

Market

value

Unrealized

gain (loss)

Loan and

leases

44,005,061 45,973,350 1,968,289 46,618,312 46,758,257 139,945

Total 44,005,061 45,973,350 1,968,289 46,618,312 46,758,257 139,945

On June 30, 2012, the evaluation of such assets generated an unrealized positive adjustment

of R$1,968,289 (R$139,945 in 2011), recorded under Other receivables - Sundry.

To hedge loans, financing and lease transactions (does not include asset sales or transfer

transactions with substantial retention of risks and benefits) against fixed interest rate risk,

the Conglomerated group negotiated contracts in the futures DI market at BM&FBOVESPA,

in accordance with installment maturities flow. The market value of these derivatives

amounts totalized R$ 47,231,101.

To hedge against variable interest rate risks (US dollar) of export financing, Conglomerate

negotiated contracts in the DDI futures market with BM&FBOVESPA, in accordance with

installment maturities flow. The market value of these derivatives amounts totalized R$

2,746,871.


force

j. Supplementary information

Bank Consolidated

06/30/2012 06/30/2011 06/30/2012 06/30/2011

Amount of credit renegotiated in the period 3,333,014 5,891,661 3,500,320 6,036,033

Amount part of credits recovered, written-off

as loss

7,939 2,323 95,511 95,948

13 Foreign exchange portfolio


Other receivables 06/30/2012 06/30/2011

Purchased foreign exchange to be settled 1,091,537 1,719,932

Receivables from foreign exchange sales 168,887 555,086

Advances in national currency received (1,513) (5,137)

Advances in foreign currency received (141) (546,105)

Earnings receivable from granted advances 26,229 16,143

Total 1,284,999 1,739,919

Other liabilities

Sold foreign exchange to be settled 164,374 554,099

Liabilities for foreign exchange purchases 1,011,093 1,762,353

Advances against exchange (889,123) (717,105)

Amount in foreign currency - payable 8 2

Total 286,352 1,599,349

Net foreign exchange position 998,647 140,570

14 Securities clearing accounts

Bank

Consolidated

Other receivables 06/30/2012 06/30/2011 06/30/2012 06/30/2011

Cash pending settlement 129 1,842 5,994 1,842

Debtors accounting settlement pending 16,695 - 145,326 81,280

Oper. with unsettled financial assets and

commodities

21,789 29,307 59,226 61,842

Other receivables 99,452 67,839 99,981 68,239

Total 138,065 98,988 310,527 213,203

Bank

Consolidated

Other liabilities 06/30/2012 06/30/2011 06/30/2012 06/30/2011

Cash pending settlement 420 9,933 475 32,433

Commissions and brokerage fees payable 500 1,085 1,025 2,955

Creditors - unsettled accounts 129 223 191,509 67,450

Stock loan creditors 18,863 47,366 18,863 47,366

Operations with unsettled financial assets and

commodities

13 29,985 13 29,985

Total 19,925 88,592 211,885 180,189

15 Other receivables - Sundry

Bank

Consolidated

06/30/2012 06/30/2011 06/30/2012 06/30/2011

Advanced and prepaid salaries 5,445 5,060 12,386 13,129

Advances to suppliers 1,954 2,015 2,174 2,521

Tax credit of taxes and contributions 693,103 520,995 4,223,358 2,141,648

Deposits in guarantee 166,510 146,927 519,008 438,647

Taxes and contributions recoverable 107,600 128,240 299,637 385,875

Credit card transactions - - 297,547 209,017

Market adjustments for loans and lease 236,419 76,321 1,968,289 139,945

Credits receivable from leases - - 186,199 299,867

Settlement of securities abroad 158,158 253,525 158,158 253,525

Others 37,246 36,435 252,327 269,795

Total 1,406,435 1,169,518 7,919,083 4,153,969

16 Other assets

Bank

Consolidated

06/30/2012 06/30/2011 06/30/2012 06/30/2011

Insurance costs 227 566 5,809 5,155

Data processing expenses 4,558 2,945 5,183 3,435

Commission for intermediation of operations (a) - - 1,086,925 915,564

Expenses with issue of securities - 1,294 - 2,855

Financial system service expenses 6,788 8,096 61,133 45,181

Specialized technical service expenses 4,895 30,814 12,214 38,400

Assets not of own use for lease 4,041 2,769 4,041 2,769

Non-operational assets - Vehicles and the like 327 70 142,826 98,542

Provision to devaluation of other assets - - (9,473) (8,201)

Usufruct right on shares 213,637 268,678 213,637 268,678

Others 3,008 768 5,904 13,407

Total 237,481 316,000 1,528,199 1,385,785

(a) Refer to the deferral of costs associated to loan transactions granted by BV Financeira, such

as costs with commissions and commercial agreements.

17 Investments

a. Equity in the income of subsidiaries and associated companies in the country and

abroad

Balance

at

12/31/11

Dividends

received

Capital

increase /

Invest.

acquisition

Equity in net

income

Equity

evaluation

adjustment

Balance at

06/30/12

Domestic

2,337,943 (8,079) 3,109,604

(1,379,300) 158,490 4,218,658

Votorantim CTVM Ltda. 257.116 (1,807) - 4,534 - 259,843

Votorantim Asset DTVM Ltda 83,869 (6,272) - 10,230 - 87,827

BV Financeira S.A. 700,830 - 3,000,000 (1,443,095) 158,490 2,416,225

BV Leasing Arrend. Merc. S.A. 1,295,847 - - 18,886 - 1,314,733

BVIP – BV Inv. e Partic. S.A. 109 - - (59) - 50

BVIA – BV Inv. Alt. Gestão S.A. 172 - - (52) - 120

Votorantim Corretora de Seguros S.A. (a) - - 109,604 30,256 - 139,860

Abroad 59,276 - - 5,320 - 64,596

Votorantim Bank Limited 36,590 - - 2,346 - 38,936

Banco Votorantim Securities 11,019 - - 2,256 - 13,275

Votorantim Securities (UK) Limited 11,667 - - 718 - 12,385

Total 2,397,219 (8,079) 3,109,604 (1,373,980) 158,490 4,283,254

(a) During the first semester of 2012, Banco Votorantim acquired from BV Participações

S.A. the entire 200,000 common shares in Votorantim Corretora de Seguros S.A. for R$

109,604. This interest is stated in Investments in domestic subsidiaries and was appraised

under the equity accounting method.

06/30/2012

Capital

Shareholders'

equity Net income

No. of common

shares/quotas held

by the Bank in units

Domestic

Votorantim CTVM Ltda. 169,280 259,841 4,534 16,928,021,130

Votorantim Asset DTVM Ltda. 46,536 87,826 10,230 4,653,477,324

BV Financeira S.A. 3,845,719 2,416,225 (1,443,095) 1,641,109

BV Leasing Arrend. Merc. S.A. 998,800 1,314,733 18,878 510,404

BVIP – BV Inv. e Partic. S.A. 301 50 (59) 301,000

BVIA – BV Inv. Alt. Gestão S.A. 301 120 (52) 301,000

Votorantim Corretora de Seguros S.A. 54,802 139,860 30,255 200,000

Abroad

Votorantim Bank Limited 83,461 38,936 (492) 6,002,120

Banco Votorantim Securities 24,256 13,275 1,401 4,000,000

Votorantim Securities (UK) 12,682 12,385 (306) 4.000.000

b. Other investments

Bank Consolidated

06/30/2012 06/30/2011 06/30/2012 06/30/2011

Investments via tax incentives 37,031 35,405 111,102 104,760

Membership certificates 175 175 176 176

Shares and quotas 6 6 6 6

Others 100 99 129 129

37,312 35,685 111,413 105,071

Allowance for losses in investments due to

fiscal incentives (11,034) (10,298) (42,441) (40,057)

Total 26,278 25,387 68,972 65,014

18 Fixed assets for use

Bank 06/30/2012 06/30/2011

Cost Accumulated

depreciation

Net

balance

Net

balance

Constructions in progress - - - 111

Furniture and equipment in use 33,163 (12,368) 20,795 22,104

Communication system 7,319 (4,858) 2,461 2,994

System data processing 37,101 (28,556) 8,545 12,554

Security system 2,289 (800) 1,489 1,596

Transportation system 601 (601) - 18

Total 80,473 (47,183) 33,290 39,377

Consolidated 06/30/2012 06/30/2011

Cost Accumulated

depreciation

Net

balance

Net

balance

Constructions in progress - - - 111

Facilities 53,629 (8,849) 44,780 38,531

Furniture and equipment in use 55,826 (21,326) 34,500 37,349

Communication system 11,979 (7,573) 4,406 5,247

System data processing 75,722 (57,494) 18,228 26,174

Security system 2,337 (814) 1,523 1,629

Transportation system 1,113 (985) 128 298

Total 200,606 (97,041) 103,565 109,339

Bank

Consolidated

01/01 to

06/30/2012

01/01 to

06/30/2011

01/01 to

06/30/2012

01/01 to

06/30/2011

Opening balance 37,947 41,979 110,436 87,786

Acquisitions 2,060 1,394 7,005 34,111

Disposals (2,564) (23) (2,787) (2,748)

Depreciation (4,153) (3,973) (11,089) (9,810)

Closing balance 33,290 39,377 103,565 109,339

On June 30, 2012, there were no relevant assets indicating impairment loss.

19 Intangible

Bank 06/30/2012 06/30/2011

Cost

Accumulated

amortization

Net

balance

Net

balance

Software 829 (73) 756 -

Corporate projects 24,667 - 24,667 14,803

Total 26,496 (73) 25,423 14,803

Consolidated 06/30/2012 06/30/2011

Cost

Accumulated

amortization

Net

balance

Net

balance

SISBEX BMF&Bovespa - - - 200

Software 2,584 (867) 1,717 894

Licenses 21,280 (7,290) 13,990 12,231

Sales rights agreements 5,000 (1,540) 3,460 4,210

Corporate projects 28,192 - 28,192 14,803

Total 57,056 (9,697) 47,359 32,338

Bank

Consolidated

01/01 to

06/30/2012

01/01 to

06/30/2011

01/01 to

06/30/2012

01/01 to

06/30/2011

Opening balance 20,050 7,035 40,250 20,691

Acquisitions 6,899 8,372 12,357 14,317

Write-offs (1,453) (604) (2,812) (804)

Amortization (73) - (2,436) (1,866)

Closing balance 25,423 14,803 47,359 32,338

Amortization estimates for software, licenses and trading right agreements

06/30/2012

Bank Consolidated

In 2012 76 2,757

In 2013 151 5,513

In 2014 151 5,542

In 2015 151 4,260

In 2016 151 892

Above 5 years 24,743 28,395

Total 25,423 47,359


20 Deferred assets

Bank 06/30/2012 06/30/2011

Cost

Accumulated

amortization

Net balance

Net balance

Expenses on third-party properties 35,140 (6,791) 28,349 30,932

Total 35,140 (6,791) 28,349 30,932

Consolidated 06/30/2012 06/30/2011

Cost

Accumulated

amortization

Net balance

Net balance

Expenses on third-party properties 41,559 (13,016) 28,543 32,425

Expenses on software acquisition and

development 1,609 (1,479) 130 380

Total 43,168 (14,495) 28,673 32,805

Bank

Consolidated

01/01 to

06/30/2012

01/01 to

06/30/2011

01/01 to

06/30/2012

01/01 to

06/30/2011

Opening balance 29,661 32,194 30,572 43,894

Write-offs - (3) -

(586)

Amortization (1,312) (1,259) (1,899) (10,503)

Closing balance 28,349 30,932 28,673 32,805


21 Deposits Bank Consolidated

06/30/2012 06/30/2011 06/30/2012 06/30/2011

Demand deposits 475,046 353,229 479,795 374,282

Individuals 17,351 18,113 17,970 18,916

Legal entities 457,623 323,258 461,753 343,509

Financial institutions 44 11,858 44 11,857

Others 28 - 28 -


Time deposits 19,005,913 22,119,010 18,983,891 22,097,076

Individuals 789,871 835,412 789,871 835,412

Legal entities 18,216,042 21,278,020 18,194,020 21,256,086

Others - 5,578 - 5,578

Other deposits - 107 - 107

Total 23,293,778 23,902,806 22,968,547 23,632,411

22 Money market borrowings Bank Consolidated

06/30/2012 06/30/2011 06/30/2012 06/30/2011

Own portfolio 24,071,128 30,367,760 24,078,968 29,266,358

Financing bills 1,177,510 821,310 1,177,510 821,310


National Treasury notes 4,228,429 5,403,794 4,228,429 4,301,403

Others 17,068,634 20,964,026 17,076,474 20,965,015

Third-party portfolio 13,278,747 9,276,880 7,626,610 8,865,762

Financing bills - 2,148,390 - 2,148,390



Free portfolio 583,822 1,799,239 583,822 1,799,239


National Treasury notes 322,123 1,554,814 322,123 1,554,814

Others 41,787 47,795 41,787 47,795

Total 37,933,697 41,443,879 32,289,400 39,931,359

23 Acceptances and endorsements

Bank Consolidated

06/30/2012 06/30/2011 06/30/2012 06/30/2011

Debentures

With exchange variation - - - 1,478,978

Post-fixed (a) - - 2,833,642 1,529,237

Real estate credit note funds

Post-fixed (b) 88,494 2,894 88,494 2,894

Agribusiness credit bill funds

Post-fixed (c) 2,006,103 1,582,641 2,006,103 1,582,641

Pre-fixed (d) 14,466

- 14,466 -

Financing bills

Pre-fixed (e) 122,309 46,590 122,309 46,590

Post-fixed (f) 9,994,376 5,658,460 9,994,376 5,658,460

Foreign securities abroad

Pre-fixed (g) 1,494,968 1,477,786 1,494,968 1,477,786

With exchange variation (h) 4,872,548 3,898,593 4,872,548 3,898,593

Total 18,593,264 12,666,964 21,426,906 15,675,179

(a) Rate of restatement in 2012: from 100% to 111% p.a. of the DI / DI + 0.35% p.a.

(b) Rate of restatement in 2012: from 90.00% to 97.33% of the DI.

(c) Rate of restatement in 2012: from 60.00% to 97.00% of the DI.

(d) Rate of restatement in 2012: from 8.48% to 12.35% p.a.

(e) Rate of restatement in 2012: from 9.37% to 14.00% p.a.

(f) Rate of restatement in 2012: from 100% to 112,02% of the DI / from 108% to 109.3% of the Selic / from 3.75% to

7.81% p.a. + IPCA / from 4.95% to 5,99% p.a. + IGPM.

(g) Rate of restatement in 2012: from 6.25% to 14.19% p.a.

(h) Rate of restatement in 2012: from 2.75% to 8.90% p.a. + foreign exchange variation

Accounting hedge strategies

Bank and

Consolidated

06/30/2012 06/30/2011

Cost Market

value

Unrealized

gain (loss)

Cost Market

value

Unrealized

gain (loss)

Foreign securities

abroad

3,125,217 3,194,482 69,265 452,907 450,474 (2,433)

Total 3,125,217 3,194,482 69,265 452,907 450,474 (2,433)

To hedge against variable interest rate risks (US dollar) of securities abroad,

Conglomerate negotiated contracts in the DDI future market and Swap CHF x DOL with

BM&FBOVESPA, in accordance with installment maturities flow. The market value of

these derivatives totaled

R$ 3,351,579.


force.

24 Borrowings and onlendings

Bank Consolidated

06/30/2012 06/30/2011 06/30/2012 06/30/2011

Domestic loans

With exchange variation (a) 13,336 10,076 13,336 10,076

Foreign loans

With exchange variation (b) 5,378,880 5,551,112 5,378,880 5,551,112

Local onlendings – National Treasury

Pre-fixed (c) 65,386 68,426 65,386 68,426

Post-fixed (d) 62,427 - 62,427 -

Local onlendings - BNDES

Pre-fixed (e) 993,992 1,478,229 993,992 1,478,229

Post-fixed (f) 1,906,059 2,304,825 1,906,059 2,304,825

With exchange variation (g) 105,763 63,132 105,763 63,132

Onlendings in the Country -

FINAME

Pre-fixed (h) 1,979,252 2,619,824 1,998,398 2,643,661

Post-fixed (i) 492,304 579,978 492,304 579,978

Total 10,997,399 12,675,602 11,016,545 12,699,439

(a) Rate of restatement in 2012: CDI + 0.40% p.a. + foreign exchange variation

(b) Rate of restatement in 2012: from 0.64% p.a. to 8.45% p.a. + foreign exchange / from 0.25% p.a. to 3.60% p.a. +

Libor.

(c) Rate of restatement in 2012: 6.75% p.a.

(d) Rate of restatement in 2012: Selic.

(e) Rate of restatement in 2012: from 1.50% p.a. to 8.00% p.a.

(f) Rate of restatement in 2012: from 9.08% p.a. to 9.91% p.a. + IPCA / from 6.50% p.a. to 10.50% p.a. + TJLP.

(g) Rate of restatement in 2012: from 0.90% p.a. to 6.27% p.a. + foreign exchange variation.

(h) Rate of restatement in 2012: from 0.30% p.a. to 9.80% p.a.

(i) Rate of restatement in 2012: from 6.50% p.a. to 11.50% p.a. + TJLP.

Cash flow hedge strategies

Bank and Consolidated 06/30/2012 06/30/2011

Cost

Market

value

Unrealized

gain (loss) Cost

Market

value

Unrealized

gain (loss)

Foreign

borrowings

863,657 883,125 19,468 - - -

Total 863,657 883,125 19,468 - - -

In order to hedge the cash flow of Foreign borrowings against exchange variation (Euro), the

Conglomerate negotiated a swap agreement with BM&BOVESPA, maturing in 2013, making the

cash flow prefixed in Reais. The market value of this derivative totalized R$ 883,305.


force.

25 Other liabilities - Social and statutory

Bank Consolidated

06/30/2012 06/30/2011 06/30/2012 06/30/2011

Dividends and bonuses payable - 128,389 - 128,389

Provision for profit sharing 60,192 79,300 114,489 195,605

Total 60,192 207,689 114,489 323,994

26 Other liabilities - Taxes and social security contributions payable Bank Consolidated

06/30/2012 06/30/2011 06/30/2012 06/30/2011

Taxes and contributions on income payable 34,687 167,046 77,648 429,273

Taxes and contributions on outsourced services 585 854 3,836 10,182

Taxes and contribution on the salary 2,307 2,107 3,751 4,629

Taxes and contributions on interest earning bank

deposits

56,068 26,653 57,491 26,691

PIS 2,498 4,959 6,458 10,319

COFINS 1,873 4,494 20,999 27,368

ISS 976 1,234 3,793 6,700

Provision for tax risks 626,480 585,210 1,576,805 1,458,421

Provision for deferred taxes and contributions 178,797 32,959 1,576,958 823,331

Other taxes and contributions - 27 1 30

Total 904,271 825,543 3,327,740 2,796,944

27 Other liabilities - Subordinated debts


06/30/2012 06/30/2011

Bank deposit certificate

Post-fixed (a) 3,255,599 2,902,704

Subordinated financing bill

With exchange variation (b) 2,481,287 1,708,479

Subordinated financing bills

Post-fixed (c) 2,089,131 1,069,045

Total 7,826,017 5,680,228

(a) Rate of restatement in 2012: from 0.49% p.a. to 1.67% p.a. + CDI / 7.22% p.a. + IGPM / from 7.86% p.a. to

8.00% p.a. + IPCA.

(b) Rate of restatement in 2012: 7.38% p.a. + PTAX.

(c) Rate of restatement in 2012: from 1.30% p.a. to 1.94% p.a. + CDI / from 115% to 119% for CDI / fom 6.71% p.a.

to 7.70% p.a. + IGPM / from 7.00% p.a. to 8.02% p.a. + IPCA.

Accounting hedge strategies Consolidated 06/30/2012 06/30/2011

Cost

Market

value

(book

value)

Unrealized

gain (loss) Cost

Market

value (book

value)

Unrealized

gain (loss)

Subordinated bill 3,066,296 3,137,272 70,976 1,861,142 1,708,479 (152,663)

Total 3,066,296 3,137,272 70,976 1,861,142 1,708,479 (152,663)

To hedge against exchange risks (US dollar) of a portion of subordinated debts, Conglomerate

negotiated contracts in the DDI futures market with BM&FBOVESPA, in accordance with

installment maturities flow. The market value of these derivatives amounts totalizes R$

3,109,559.


force.

28 Other liabilities - Sundry

Bank Consolidated

06/30/2012 06/30/2011 06/30/2012 06/30/2011

Provision for personnel expenses 41,282 29,316 124,316 93,109

Provision for administrative expenses 6,002 6,860 70,076 58,785

Provision for contingent liabilities 20,002 30,932 499,040 172,961

Commission for intermediation of operations - - 21,063 65,783

Amounts subject to onlending to assignees - - 199,547 295,650

Provision for assigned credit losses 35,033 - 277,943 170,881

Credit card transactions - 596 297,957 208,612

Settlement of securities abroad 36,136 13,837 36,650 14,439

Loans and leases to be released 15 9,834 19,459 87,669

Liabilities regarding transactions related to

assignments (a)

- - 103,184 -

Others (b) 16,279 15,232 174,019 262,275

Total 154,749 106,607 1,823,254 1,430,164

(a) Refers to the obligations related to sales or transfer of financial assets with substantial

retention of risks and benefits.

(b) In the Consolidated, it basically refers to unprocessed amounts arising from the operational

cash flow from the loan operation portfolio and lease.

29 Shareholders' equity

a. Capital

Capital is represented by 103,949,376,612 nominative shares, 85,049,489,946 of which are

common shares with no par value and 18,899,886,666 nominative preferred shares with no

par value.

According to the Special Shareholders' Meeting held on December 30, 2011, was resolved

and approved, for a R$ 1,000,000 Capital Increase with the use of the "Expansion Reserve"

and without issuing new shares. The capital increase was approved by the Brazilian Central

Bank on March 15, 2012.

According to the Special Shareholders' Meeting held on June 27, 2012, was resolved

and approved the capital increase in the amount of R$ 2,000,000, issuing

22,410,553,662 new shares, fully subscribed and paid-in. The capital increase was

approved by the Brazilian Central Bank (BACEN) on June 29, 2012.

b. Profit reserve

Legal reserve

Formed compulsorily on the basis of 5% of net income for the period, until it reaches 20% of

the capital. Legal reserve may not be formed when the result of its addition to capital

reserves is greater than 30% of capital. The legal reserve can only be used for capital

increase or to offset loss.

Expansion reserve

To fulfill the requirements established in the corporate legislation and rules of the

Central Bank of Brazil, Management proposes that, at the end of the year, the portion

of retained profits not distributed, if it exists, is destinated for ―Expansion reserve‖.

The balance in reserves will remain at the shareholders' disposal for a subsequent

resolution by the General Shareholders' Meeting.

c. Adjustments to equity value recognized in shareholders' equity in the period

Consolidated

01/01 to

06/30/2012

01/01 to

06/30/2011

Opening balance (75,346) (57,356)

Securities available for sale 647,605 (159,757)

Banco Votorantim S.A. 383,456 (160,578)

Subsidiaies 264,149 821

Cash flow hedge (19,159) -

Banco Votorantim S.A. (19,159) -

Tax effects (233,892) 64,231

Closing balance 319,208 (152,882)

30 Balance sheet by maturity breakdown

The "balance sheet by maturity breakdown" statement of June 30, 2012 was prepared

considering the maturity term of the assets and liabilities, regardless of the category

in which they are classified.

Regarding assets and liabilities of indefinite term, operations with assets are

classified in long-term assets and operations with liabilities in current liabilities.

Fixed assets and shareholders' equity are being presented as "over 5 years".

In the "Balance Sheet" statement, securities classified in the "Trading securities"

category are presented as Current Assets, regardless of the maturity terms.

Lease transactions are presented at the financial method, which consists in

reclassifying leased property, plant and equipment to the caption lease transactions,

less residual value received in advance.

Bank

a. Assets

Up to 90

days

From 91 to

360 days

From 1 to

3 years

From 3 to

5 years

Above 5

years

Total

Cash and cash equivalents 90,451 - - - - 90,451

Interbank funds applied 22,055,753 20,869,658 13,790,515 18,701 - 56,734,627

Purchase and sale commitments – Own portfolio

3,071,514 169,930 - - - 3,241,444

Purchase and sale commitments. -

Financed operations

10,952,534 2,268,419 - - - 13,220,953 Purchase and sale commitments. - Free

movement

509,713 - - - - 509,713

Interbank deposits 7,326,243 18,431,309 13,790,515 18,701 - 39,566,768 Foreign currency investments 195,749 - - - - 195,749

Securities 3,091,039 2,149,229 4,372,548 6,403,712 25,562,273 41,578,801

Trading securities 144,202 1,240,746 1,360,169 2,110,409 21,425,166 26,280,692

Securities available for sale 2,946,837 908,483 3,012,379 4,293,303 4,137,107 15,298,109

Derivative financial instruments 933,890 820,675 614,070 383,692 179,896 2,932,223

Differential of swap 296,197 703,209 549,349 379,254 179,896 2,107,905

Term currency contracts 593 160 31 - - 784

Purchase of options - shares 2,521 1,660 - - - 4,181 Purchase of options – financial

assets/goods

513,070 31,550 5,636 - - 550,256

Credit derivatives 21,437 2,613 - - - 24,050 Non deliverable forward 100,072 81,483 59,054 4,438 - 245,047

Interbank

accounts/Interdepartmental

3,013,454 - - - - 3,013,454

Loans 3,970,050 5,625,473 9,772,579 - - 19,368,102

Allowance for loan losses (215,167) (109,469) (438,409) - - (763,045)

Other receivables 1,653,167 137,905 553,244 176,600 300,994 2,821,910

Foreign exchange portfolio 1,284,999 - - - - 1,284,999 Income receivable 42,688 1,016 - - - 43,704

Securities clearing accounts 123,333 6,479 7,920 333 - 138,065 Other 248,125 135,725 545,324 176,267 300,994 1,406,435

Allowance for loan losses (45,978) (5,315) - - - (51,293)

Other assets 21,866 42,950 113,736 51,091 7,838 237,481

Fixed assets - - - - 4,396,594 4,396,594

Total 34,614,503 29,536,421 28,778,283 7,033,796 30,447,595 130,410,598

b. Liabilities

Up to 90

days

From 91

to 360

days

From 1 to

3 years

From 3

to 5 years

Above 5

years

Total

Deposits 8,231,274 10,334,922 3,865,375 112,890 749,317 23,293,778

Demand deposits 475,046 - - - - 475,046

Interbank deposits 1,489,092 979,584 630,766 3,972 709,405 3,812,819 Time deposits 6,267,136 9,355,338 3,234,609 108,918 39,912 19,005,913

Money market borrowings 23,257,473 11,052,437 3,339,750 137,648 146,389 37,933,697

Own portfolio 9,436,690 11,050,254 3,339,750 137,432 107,002 24,071,128 Third-party portfolio 13,278,747 - - - - 13,278,747

Free portfolio 542,036 2,183 - 216 39,387 583,822

Acceptances and endorsements 3,288,559 5,137,020 5,850,431 4,263,650 53,604 18,593,264

Interbank accounts /

Interdepartmental

130,096 - - - - 130,096

Borrowings and onlendings 2,043,541 4,124,245 3,466,899 667,886 694,828 10,997,399

Derivative financial instruments 12,961,772 4,738,602 2,835,193 121,405 217,992 20,874,964


Term currency contracts 510 248 - - - 758

Purchase of options - shares 1,706 2,658 - - - 4,364 Purchase of options – Financial

assets/goods

495,691 16,884 9,150 - - 521,725

Option box 12,313,339 4,234,244 2,376,289 - - 18,923,872 Credit derivatives 19,039 3,953 - - - 22,992

Non deliverable forward 22,736 37,100 5,834 - - 65,670

Other liabilities 591,233 1,453,363 1,999,915 1,318,421 3,894,898 9,257,830

Collection and levy of taxes and alike

6,324 - - - - 6,324

Foreign exchange portfolio 265,024 21,328 - - - 286,352

Social and statutory 60,192 - - - - 60,192 Tax and social security 85,032 35,840 53,991 90,992 638,416 904,271

Securities clearing accounts 19,912 13 - - - 19,925

Subordinated debts - 1,396,182 1,945,924 1,227,429 3,256,482 7,826,017 Other 154,749 - - - - 154,749

Deferred income 25,636 27 35 61 - 25,759

Shareholders' equity - - - - 9,303,811 9,303,811

Total 50,529,584 36,840,616 21,357,598 6,621,961 15,060,839 130,410,598

Consolidated

a. Assets Up to 90

days

From 91 to

360 days

From 1 to

3 years

From 3 to

5 years

Above 5

years

Total

Cash and cash equivalents 162,873 - - - - 162,873

Interbank funds applied 12,756,940 1,401,021 522,959 3,791 - 14,684,711

Purchase and sale commitments – Own

portfolio

2,303,588 169,930 - - - 2,473,518 Purchase and sale commitments. -

Financed operations

8,884,278 502,010 - - - 9,386,288

Purchase and sale commitments. - Free movement

509,713 - - - - 509,713

Interbank deposits 851,176 729,081 522,959 3,791 - 2,107,007

Foreign currency investments 208,185 - - - - 208,185

Securities 2,765,211 2,746,720 8,966,438 6,537,774 7,827,075 28,843,218

Trading securities 171,930 1,322,745 1,488,006 620,723 1,791,359 5,394,763

Securities available for sale 2,593,281 1,423,975 7,478,432 5,917,051 6,035,716 23,448,455

Derivative financial instruments 805,136 527,288 280,051 369,270 179,481 2,161,226

Differential of swap 167,443 409,822 215,330 364,832 179,481 1,336,908 Term currency contracts 593 160 31 - - 784

Purchase of options - shares 2,521 1,660 - - - 4,181

Purchase of options – financial assets/goods

513,070 31,550 5,636 - - 550,256

Credit derivatives 21,437 2,613 - - - 24,050

Non deliverable forward 100,072 81,483 59,054 4,438 - 245,047

Interbank

accounts/Interdepartmental

3,013,454 - - - - 3,013,454

Loans 10,196,381 16,283,756 25,816,497 2,949,412 21,430 55,267,476

Leases 1,869,606 243,112 315,690 11,675 - 2,440,083

Allowance for loan losses (1,633,790) (937,411) (1,630,782) (204,950) (1,465) (4,408,398)

Other receivables 3,113,726 1,629,582 3,315,345 306,730 1,163,644 9,529,027

Foreign exchange portfolio 1,284,999 - - - - 1,284,999

Income receivable 64,684 1,027 - - - 65,711 Securities clearing accounts 295,795 6,479 7,920 333 - 310,527

Other 1,514,226 1,627,391 3,307,425 306,397 1,163,644 7,919,083

Allowance for loan losses (45,978) (5,315) - - - (51,293)

Other assets 171,930 99,682 907,911 340,838 7,838 1,528,199

Fixed assets

- - - -

388,599 388,599

Total 33,221,467 21,993,750 38,494,109 10,314,540 9,586,602 113,610,468

b. Liabilities

Up to 90

days

From 91

to 360

days

From 1 to

3 years

From 3

to 5 years

Above 5

years

Total

Deposits 8,202,914 10,131,407 3,772,019 112,890 749,317 22,968,547

Demand deposits 479,795 - - - - 479,795

Interbank deposits 1,455,983 787,319 548,182 3,972 709,405 3,504,861

Time deposits 6,267,136 9,344,088 3,223,837 108,918 39,912 18,983,891

Money market borrowings 17,605,351 11,054,998 3,345,014 137,648 146,389 32,289,400

Own portfolio 9,436,705 11,052,815 3,345,014 137,432 107,002 24,078,968

Third-party portfolio 7,626,610 - - - - 7,626,610

Free portfolio 542,036 2,183 - 216 39,387 583,822

Acceptances and endorsements 6,121,771 5,137,020 5,901,976 4,212,535 53,604 21,426,906

Interbank accounts /

Interdepartmental

130,120 - - - - 130,120

Borrowings and onlendings 2,044,001 4,125,340 3,479,340 673,036 694,828 11,016,545

Derivative financial instruments 1,001,139 1,109,592 400,573 117,482 217,993 2,846,779


Term currency contracts 510 248 - - - 758 Purchase of options - shares 1,706 2,658 - - - 4,364

Purchase of options – Financial

assets/goods

495,691 16,884 9,150 - - 521,725 Option box 353,927 643,731 24,845 - - 1,022,503

Credit derivatives 19,039 3,953 - - - 22,992

Non deliverable forward 22,736 37,100 5,834 - - 65,670

Other liabilities 3,214,654 1,997,197 3,091,179 1,384,815 3,914,756 13,602,601

Collection and levy of taxes and alike 12,864 - - - - 12,864

Foreign exchange portfolio 265,024 21,328 - - - 286,352

Social and statutory 114,489 - - - - 114,489

Tax and social security 1,185,395 340,496 986,233 157,342 658,274 3,327,740

Securities clearing accounts 211,872 13 - - - 211,885

Subordinated debts - 1,396,182 1,945,924 1,227,429 3,256,482 7,826,017

Other 1,425,010 239,178 159,022 44 - 1,823,254

Deferred income 25,636 27 35 61 - 25,759

Shareholders' equity - - - - 9,303,811 9,303,811

Total 38,345,586 33,555,581 19,990,136 6,638,467 15,080,698 113,610,468

31 Loans

Bank Consolidated

01/01 to

06/30/2012

01/01 to

06/30/2011

01/01 to

06/30/2012

01/01 to

06/30/2011

Advances to depositors 89 91 89 91

Loans 713,768 663,169 1,632,145 1,318,525

Discounted securities 5,984 3,885 5,984 3,885

Loans and financing 200,406 228,605 3,135,102 3,346,461

Income from housing loans and

developments

21,325 6,094 21,325 6,094

Export financing 292,802 64,238 292,802 64,238

Financing operations in foreign currency 16,393 (1,931) 16,393 (1,931)

Rural financing agreements 26,873 59,257 26,873 59,257

Income from credit assignments (a) - - (131,509) 422,735

Recovery of loans written off 7,842 2,120 89,785 91,982

Income from rights arising from share loans - 3,220 - 3,220

Others 1,119 1,462 (269,061) (355,024)

Total 1,286,601 1,030,210 4,819,928 4,959,533

(a) On June 30, 2012, this balance refers basically to income from anticipated settlement.

32 Leases

Consolidated

01/01 to 06/30/2012 01/01 to 06/30/2011

Lease transactions 890,024 1,142,342

Financial lease 432,692 824,830

Income from the sale of leased assets 451,703 313,748

Recovery of loans written off 5,629 3,764

Lease expenses (678,506) (861,662)

Financial lease (678,506) (861,662)

Total 211,518 280,680

33 Securities

Bank Consolidated

01/01 to

06/30/2012

01/01 to

06/30/2011

01/01 to

06/30/2012

01/01 to

06/30/2011

Money market borrowings 661,713 780,119 606,416 780,119

Interbank deposits 2,120,610 2,214,763 71,504 58,806

Fixed income securities 2,047,757 1,889,748 1,389,589 936,979

Securities abroad 124,604 152,880 124,608 152,891

Variable income securities 170,232 353,623 170,232 353,385

Investments in investment funds 52,834 25,627 238,165 204,966

Adjustment to market value (5,429) (161,255) (6,652) (165,287)

Others (125,979) (12,718) (126,850) (12,875)

Total 5,046,342 5,242,787 2,467,012 2,308,984

34 Derivative financial instruments

Bank Consolidated

01/01 to

06/30/2012

01/01 to

06/30/2011

01/01 to

06/30/2012

01/01 to

06/30/2011

Swap contracts 195,488 (292,220) (71,251) (483,777)

Forward contracts (519) 2,635 (519) 2,635

Futures contracts (126,117) (266,943) (1,414,201) (179,821)

Agreements of share options (9,268) (2,609) (9,268) (2,609)

Option agreement – Financial

assets/goods

82,945 9,110 82,945 9,110


―Box‖ of options (1,168,529) (1,187,579) (104,258) (177,537)

Non deliverable forward 61,929 (75,345) 61,929 (75,345)

Adjustment to market value 87,234 (20,610) 998,706 (185,863)

Others (7,264) (14,701) (7,264) (14,701)

Total (860,693) (1,834,781) (439,773) (1,094,427)

35 Foreign exchange operations

Bank Consolidated

01/01 to

06/30/2012

01/01 to

06/30/2011

01/01 to

06/30/2012

01/01 to

06/30/2011

Income from exports 24,589 17,200 24,589 17,200

Income from imports 822 6,375 822 6,375

Financial income (loss) (101) (150) (101) (150)

Variations and differences in rates 52,548 (14,988) 52,548 (14,988)

Cash and cash equivalents in foreign

currencies

9,070 6,705 9,053 6,683

Recovery of loans written off 97 202 97 202

Total 87,025 15,344 87,008 15,322

36 Money market expenses

Bank Consolidated

01/01 to

06/30/2012

01/01 to

06/30/2011

01/01 to

06/30/2012

01/01 to

06/30/2011

Securities transactions abroad (907,329) (30,057) (907,329) (30,057)

Interbank deposits (173,638) (72,589) (158,117) (57,892)

Time deposits (1,112,186) (1,455,580) (1,111,181) (1,455,580)

Purchase and sale commitments (1,711,969) (2,045,399) (1,565,166) (1,969,554)

Agribusiness credit bills (LCA) (78,963) (79,967) (78,963) (79,967)

Real estate credit note (983) (184) (983) (184)

Financing bills (537,951) (267,625) (537,951) (267,625)

Debentures - - (142,481) (133,579)

Adjustment to market value - 216,655 - 216,655

Others (14,906) (16,475) (14,906) (16,475)

Total (4,537,925) (3,751,221) (4,517,077) (3,794,258)

37 Expenses with borrowings and onlendings Bank Consolidated

01/01 to

06/30/2012

01/01 to

06/30/2011

01/01 to

06/30/2012

01/01 to

06/30/2011

Domestic loans (787) (289) (787) (289)

Foreign loans (470,272) (9,386) (470,272) (9,381)

National Treasury Onlendings (3,456) - (3,456) -

BNDES Onlendings (119,489) (123,535) (119,489) (124,756)

Onlending - FINAME (58,753) (75,307) (59,502) (76,058)

Obligations to foreign bankers (109,489) 29,495 (109,489) 29,495

Adjustment to market value (24,244) - (24,244) -

Foreign exchange 297,963 193,167 297,963 194,388

Total (488,527) 14,145 (489,276) 13,399

38 Fee income

Bank Consolidated

01/01 to

06/30/2012

01/01 to

06/30/2011

01/01 to

06/30/2012

01/01 to

06/30/2011

Management of investment funds - - 71,540 57,242

Collection income 6,761 4,577 6,761 4,577

Commissions on placing of securities 36,068 32,583 34,756 34,712

Brokerage of Stock Exchange transactions - - 12,293 12,104

Income from custody services 29 - 291 -

Income from guarantees granted 82,456 67,605 82,456 67,605

Credit card transactions - - 12,090 8,708

Insurance brokerage commission - - - 16,657

Financial advisory 9,863 4,108 10,432 4,108

Income from banking services - - 262 13,054

Others 4,119 3,684 13,482 6,788

Total 139,326 112,557 244,363 225,555

39 Banking fees Bank Consolidated

01/01 to

06/30/2012

01/01 to

06/30/2011

01/01 to

06/30/2012

01/01 to

06/30/2011

Individual 7 - 241,990 389,385

Master file registration - - 146,354 262,006

Transfers - - 1 1

Contract amendments - - 5,463 4,917

Appraisal of assets 7 - 69,009 108,292

Credit cards - - 16,772 9,878

Others - - 4,391 4,291

Legal entity 1,469 4,778 5,899 12,491

Master file registration - - 3,327 6,153

Transfers 733 4,403 741 4,408

Appraisal of assets - - 1,095 1,553

Others 736 375 736 377

Total 1,476 4,778 247,889 401,876

40 Personnel expenses Bank Consolidated

01/01 to

06/30/2012

01/01 to

06/30/2011

01/01 to

06/30/2012

01/01 to

06/30/2011

Fees (5,706) (7,113) (10,088) (13,581)

Benefits (26,886) (17,532) (85,038) (59,961)

Social charges (37,800) (35,724) (91,133) (89,544)

Dividends (108,055) (99,535) (288,641) (250,381)

Training (3,368) (827) (3,922) (1,433)

Total (181,815) (160,731) (478,822) (414,900)

41 Other administrative expenses

Bank Consolidated

01/01 to

06/30/2012

01/01 to

06/30/2011

01/01 to

06/30/2012

01/01 to

06/30/2011

Water, energy and gas (1,110) (878) (2,761) (2,636)

Rentals (21,175) (20,420) (65,741) (65,802)

Communications (4,824) (6,021) (38,541) (47,370)

Maintenance and preservation of

assets

(2,361) (2,318) (7,253) (9,268)

Material (330) (727) (1,061) (2,869)

Data processing (24,497) (32,840) (80,112) (72,767)

Promotions and public relations (1,706) (7,051) (2,861) (10,322)

Advertising and publicity (263) (1,140) (1,993) (4,227)

Publications (431) (632) (868) (737)

Insurance (685) (669) (5,736) (5,497)

Services of the financial system (18,348) (16,781) (87,893) (75,222)

Outsourced services (1,989) (1,869) (6,170) (8,583)

Surveillance and security (559) (670) (1,925) (3,384)

Specialized technical services (25,402) (32,904) (220,037) (202,361)

Transportation (2,336) (2,367) (9,251) (11,683)

Traveling (2,227) (3,171) (4,812) (18,068)

Judicial and notary public fees (4,895) (4,617) (125,389) (84,494)

Amortization (1,385) (1,259) (4,335) (12,369)

Depreciation (4,153) (3,973) (11,089) (9,810)

Others (2,278) (3,213) (56,224) (49,525)

Total (120,954) (143,520) (734,052) (696,994)

42 Tax expenses

Bank Consolidated

01/01 to

06/30/2012

01/01 to

06/30/2011

01/01 to

06/30/2012

01/01 to

06/30/2011

ISS (6,824) (5,648) (23,389) (32,078)

PIS (4,489) (8,313) (19,294) (30,123)

COFINS (27,626) (51,158) (118,730) (185,361)

Federal taxes (32) - (2,348) -

State taxes (26) - (27) -

Local taxes (1,114) (1,097) (2,936) (2,103)

Taxes abroad (23) - (283) -

Updating tax liabilities (18,195) (20,486) (52,063) (58,306)

Others (82) (14,105) (2,936) (22,311)

Total (58,411) (100,807) (222,006) (330,282)

43 Other operational income

Bank Consolidated

01/01 to

06/30/2012

01/01 to

06/30/2011

01/01 to

06/30/2012

01/01 to

06/30/2011

Foreign exchange variation of foreign

investments

51,828 - 56,552 -

Reversal of provision for contingent

liabilities

141 3,589 6,582 4,839

Monetary restatement - judicial deposit 5,465 6,867 16,073 18,873

Monetary variation assets 1,023 5,646 6,092 10,547

Reimbursement of costs associated - - 12,120 10,245

Others 16 621 102 1,107

Total 58,473 16,723 97,521 45,611

44 Other operational expenses Bank Consolidated

01/01 to

06/30/2012

01/01 to

06/30/2011

01/01 to

06/30/2012

01/01 to

06/30/2011

Costs associated with production (1,431) (852) (1,431) (852)

Provision for contingent liabilities (8,053) (2,085) (173,429) (41,252) Foreign exchange variation of foreign

investments

- (43,512) - (46,462)

Civil reparations - - (88,927) (37,463)

Judicial deposits (708) - (5,521) -

Others (681) (2,072) (23,615) (27,845)

Total (10,873) (48,521) (292,923) (153,874)

45 Non-operating income (loss) Bank Consolidated

01/01 to

06/30/2012

01/01 to

06/30/2011

01/01 to

06/30/2012

01/01 to

06/30/2011

Disposal of assets (165) (138) (79,569) (19,991)

Sales of investments - - - 84

Investments via tax incentives 1,626 2,118 6,342 10,253

Others 70 3 849 26,656

Total 1,531 1,983 (72,378) 17,002

46 Income and social contribution taxes

a. Charges due on operations

Bank Consolidated

01/01 to

06/30/2012

01/01 to

06/30/2011

01/01 to

06/30/2012

01/01 to

06/30/2011

Income / (Loss) before income tax, social

contribution and interest (1,077,638) 693,750 (1,879,906) 841,541

Charges at the current nominal rate 431,055 (277,500) 751,962 (336,616)

Exclusions / (Additions) (462,900) 113,642 (826,767) (72,645)

Tax losses for income tax 9,188 44,773 (38,341) (27,296)

Negative basis for social contribution 4,694 27,374 (32,036) 27,668

Market adjustments of securities (69,818) (63,106) (70,308) (64,717)

Derivatives - adjustment to market value 65,000 (58,328) (281,104) (17,037)

Market adjustments for loans analysis 24,967 (9,971) 371,064 (62,329)

Market adjustments for lease - - 18,492 (13,744)

Profit sharing 29,858 33,998 82,791 75,846

Allowance for loan losses (80,134) (20,829) (891,421) (172,786)

Provision for contingencies (3,187) (835) (66,761) (16,263)

Derivatives – Cash basis (1,817) (7,675) (1,817) (6,075)

Provision for losses on credits assigned - - 4,734 (36,317)

Excess (insufficient) depreciation - - (31,204) 101,318

Income from foreign branches - (7,091) - (7,091)

Additions and permanent exclusions and tax

incentives (440,792) 175,332 119,971 150,196

Others (859) - (10,827) (4,018)

Current income and social contribution

taxes (31,845) (163,858) (74,805) (409,261)

Deferred income and social contribution

taxes 29,310 154,314 (312,810) 347,725

Total income and social contribution taxes (2,535) (9,544) (387,615) (61,536)

b. Deferred income and social contribution taxes with an impact on result in the

period

Bank Consolidated

01/01 to

06/30/2012

01/01 to

06/30/2011

01/01 to

06/30/2012

01/01 to

06/30/2011

Tax credit

Additions / (Exclusions)

Tax losses for income tax (9,188) (44,774) 38,341 27,296

Negative basis for social contribution (4,694) (27,374) 32,036 (27,668)

Market adjustments of securities - (18,848) - (18,848)

Derivatives - adjustment to market

value (47,642) 3,614 298,326 3,291

Allowance for loan losses 80,134 20,829 891,421 172,786

Provision for contingencies 3,187 835 66,761 16,263

Derivatives – Cash basis - - - (1,600)

Provision for losses on assigned credits - - (4,734) 36,317

Excess (insufficient) depreciation - - 9,361 (267,984)

Income from foreign branches - 7,091 - 7,091

Others 859 - 10,827 4,018

Total 22,656 (58,627) 1,342,339 (49,038)

Bank Consolidated

01/01 to

06/30/2012

01/01 to

06/30/2011

01/01 to

06/30/2012

01/01 to

06/30/2011

Deferred tax liabilities

Additions / (Exclusions)

Market adjustments of securities 69,818 81,954 70,308 83,565

Derivatives - adjustment to market value (17,358) 54,714 (17,222) 13,746

Market adjustment s for loans and lease (24,967) 9,971 (389,556) 76,073

Derivatives – Cash basis 1,817 7,675 1,817 7,675

Excess (insufficient) depreciation - - 21,843 166,666

Total 29,310 154,314 (312,810) 347,725

c. Deferred income and social contribution taxes with effects on equity accounts in

the period

Bank Consolidated

01/01 to

06/30/2012

01/01 to

06/30/2011

01/01 to

06/30/2012

01/01 to

06/30/2011

Assets (Other credits - Sundry)

Opening balance 670,447 509,038 2,887,586 2,120,103

Tax losses for income tax (9,188) (44,773) 38,341 27,296

Negative basis for social contribution (4,694) (27,374) 32,036 (27,668)

Market adjustments of securities - 51,735 (6,567) 51,735

Derivatives - adjustment to market value (47,642) 3,614 298,326 3,291

Allowance for loan losses 80,134 20,829 891,421 172,786

Provision for contingencies 3,187 835 66,761 16,263

Derivatives – Cash basis - - - (1,600)

Provision for assigned credit losses - - (4,734) 36,317

Income from foreign branches - 7,091 - 7,091

Excess (insufficient) depreciation - - 9,361 (267,984)

Others 859 - 10,827 4,018

Closing balance 693,103 520,995 4,223,358 2,141,648

Bank Consolidated

01/01 to

06/30/2012

01/01 to

06/30/2011

01/01 to

06/30/2012

01/01 to

06/30/2011

Liabilities (Other liabilities - Taxes and social

security)

Opening balance 79,784 180,922 1,036,732 1,164,705

Market adjustments of securities 64,075 (75,603) 162,679 (77,213)

Derivatives - adjustment to market value 11,788 (54,714) 11,651 (13,746)

Market adjustments for loans analysis 24,967 (9,971) 389,556 (76,074)

Derivatives – Cash basis (1,817) (7,675) (1,817) (7,675)

Excess (insufficient) depreciation - - (21,843) (166,666)

Closing balance 178,797 32,959 1,576,958 823,331

d. Composition of tax credit

Bank Consolidated

06/30/2012 06/30/2011 06/30/2012 06/30/2011

Tax losses for income tax 66,591 59,727 894,849 861,124

Negative basis for social contribution 32,060 27,792 69,711 29,119

Market adjustments of securities - 51,735 - 51,735

Derivatives - adjustment to market value - 3,614 404,061 6,011

Allowance for loan losses 364,539 191,507 2,432,613 999,443

Provision for contingencies 8,568 3,163 201,279 59,736

Provision for assigned credit losses - - 97,165 68,352

Provision for legal obligation 81,877 81,877 223,003 223,002

Income from foreign branches 138,433 101,580 138,433 101,580

Excess (insufficient) depreciation

offsetting - - (258,889) (267,984)

Others 1,035 - 21,133 9,530

Total 693,103 520,995 4,223,358 2,141,648

e. Tax credit collection expectation

Bank

Consolidated

Nominal

value

Present

value

Nominal

value

Present

value

In 2012 35,677 34,389 491,320 473,581

In 2013 113,074 100,873 1,424,545 1,270,831

In 2014 55,904 45,573 781,840 637,356

In 2015 187,829 138,928 381,649 282,288

As of 2015 300,619 167,576 1,144,004 535,941

Total 693,103 487,339 4,223,358 3,199,997

In the six-month period ended June 30, 2012, tax credits in the amount of R$ 34,020,

corresponding to 117% of respective usage projection included in the technical study,

was verified.

There are no tax credits not recorded.

f. Breakdown of deferred tax liabilities

Bank Consolidated

06/30/2012 06/30/2011 06/30/2012 06/30/2011

Market adjustments of securities 79,517 - 180,851 3,008

Derivatives - adjustment to market value 11,789 - 11,792 136,619

Market adjustments for loans analysis 86,600 28,801 779,349 54,250

Derivatives – Cash basis 891 4,158 891 4,158

Excess (insufficient) depreciation - - 604,075 625,296

Total 178,797 32,959 1,576,958 823,331

47 Related party transactions

a. Summary of related party transactions

06/30/2012 06/30/2011

Assets / (Liabilities)

Cash and cash equivalents

Banco do Brasil S.A. and subsidiaries 323 21,406

Interbank funds applied

Banco do Brasil S.A. and subsidiaries - 1,899,996

BV Financeira S.A. - Crédito, Financiamento e Investimento 42,078,319 37,203,995

Relation with correspondents

Banco do Brasil S.A. and subsidiaries 51 -

Securities

Votorantim Finanças S.A. and subsidiaries - 844

BV Leasing Arrendamento Mercantil S.A. 21,591,737 164,551

Votorantim C.T.V.M. Ltda. - 15,112

Derivative financial instruments

Banco do Brasil S.A. and subsidiaries 66,869 205,476

Votorantim Finanças S.A. and subsidiaries 5,060 5,149

BV Leasing Arrendamento Mercantil S.A. 765,488 -

Votorantim C.T.V.M. Ltda. 5,510 -

Loans and financings

Banco do Brasil S.A. and subsidiaries 30,331 -

Foreign exchange - Active position

Banco do Brasil S.A. and subsidiaries 101,035 -

Prepaid expenses

Banco Votorantim Securities Inc. - 199

06/30/2012 06/30/2011


Deposits

Banco do Brasil S.A. and subsidiaries (24,689) (264,705)

Votorantim Finanças S.A. and subsidiaries (181,800) (179,817)

06/30/2012 06/30/2011

BV Financeira S.A. - Crédito, Financiamento e Investimento (2,030) (714)

BV Leasing Arrendamento Mercantil S.A. (216) (620)

Votorantim C.T.V.M. Ltda. (247,519) (217,523)

Votorantim Asset Management D.T.V.M Ltda. (82,796) (67,052)

BV Participações S.A. and subsidiaries (158,474) (172,005)

Votorantim Bank Limited (1) (7,505)

Money market borrowings

Votorantim Finanças S.A. and subsidiaries

-

(11,332)

Foreign exchange portfolio - Liability position


Obligations related to purchase and sale commitments

Banco do Brasil S.A. and subsidiaries (1,102,337) (480,920)


BV Financeira S.A. - Crédito, Financiamento e Investimento - (1,513,509)

BV Leasing Arrendamento Mercantil S.A. (5,652,137) -

Borrowings and onlendings

Banco do Brasil S.A. and subsidiaries (30,295) -


Banco do Brasil S.A. and subsidiaries (35,274) (1,014,814)

Votorantim Finanças S.A. and subsidiaries (857,222) (1,572,086)

BV Leasing Arrendamento Mercantil S.A. (18,028,064) (18,873,110)

Votorantim C.T.V.M. Ltda. (121) (18,071)

Votorantim Bank Limited

06/30/2012 06/30/2011


Other values to receive / (Pay)

Banco do Brasil S.A. and subsidiaries (136,755) -

BV Financeira S.A. - Crédito, Financiamento e Investimento 674 (27)

BV Leasing Arrendamento Mercantil S.A. (450) -

Votorantim C.T.V.M. Ltda. (129) (223)

Banco Votorantim Securities Inc. (519) -

Votorantim Bank Limited (177) (111)


Dividends

Votorantim Finanças S.A. and subsidiaries - (127,531)

01/01 to

06/30/2012

01/01 to

06/30/2011

Income / (Expense)

Loans

Banco do Brasil S.A. and subsidiaries (109,423) 8,651

Securities

Banco do Brasil S.A. and subsidiaries 3,289 56,415

BV Financeira S.A. – Crédito, Financiamento e Investimento 2,104,427 2,155,963

BV Leasing Arrendamento Mercantil S.A. 948,436 959,366

Votorantim Finanças S.A. and subsidiaries - (25)

01/01 to

06/30/2012

01/01 to

06/30/2011



Votorantim Finanças S.A. and subsidiaries 13,399 (2,940)

Votorantim C.T.V.M. Ltda. 1,697 (2,897)

BV Leasing Arrendamento Mercantil S.A. (799,228) (1,051,539)

Foreign exchange operations

Banco do Brasil S.A. and subsidiaries (13,293) 158,088

Votorantim Finanças S.A. and subsidiaries (212) 271

01/01 to

06/30/2012

01/01 to

06/30/2011

Income / (Expense)

Market funding operations



BV Financeira S.A. – Crédito, Financiamento e Investimento - 75,882

BV Leasing Arrendamento Mercantil S.A. (147,441) -

Votorantim C.T.V.M. Ltda. (12,098) 10,665

Votorantim Asset Management D.T.V.M. Ltda. (4,257) 4,030

Votorantim Bank Limited (1) 5


Borrowings and onlendings

Banco do Brasil S.A. and subsidiaries (524) -

Income / (Expenses) from rendering of services

BV Financeira S.A. - Crédito, Financiamento e Investimento 1,396 1,378

BV Leasing Arrendamento Mercantil S.A. 92 -

Banco Votorantim Securities Inc. (4,062) (929)

Other administrative expenses

BV Participações S.A and subsidiaries (102,282) (37,764)

Other income / (expenses)

Banco do Brasil S.A. and subsidiaries 63 -

b. Remuneration of management key personnel

On June 30, 2012, Banco Votorantim spent R$ 73,913 as remuneration of Management key

personnel.

Consolidated

Fees (10,088)

Bonuses (46,550)

Social charges (17,275)

Total (73,913)

c. Employee benefits

There are no post-employment benefits, such as pensions, other retirement benefits,

post-employment life insurance and medical care, other long-term benefits to

employees, including long service leave and other leaves, jubilee or other benefits per

years of service, share-based remuneration and rescission of contract benefits, except

those provided for in collective bargaining of the category.

48 Related credit transactions

The Bank operates with related credit transactions pursuant to CMN Resolution 2921/02.

On June 30, 2012 the balances of related credit transactions and of funds raised for

investments, as well as the respective income, were as follows:

01/01 to 06/30/2012

Assets /

(Liabilities)

Income /

(Expense)

Related credit transactions

Loans 88,144 4,255

Obligations related to credit

transactions

Time deposits (21,843) (961)

Financial bills (65,528) (2,882)

Net income (loss) of related

operations

412

On June 30, 2012 and 2011 there were no non-performing escrow credit transactions, or

court issues on credit transactions or on funding for such transactions.

49 Contingent assets, liabilities and legal obligations

a. Breakdown of contingent liabilities classified in the probable risk category

Bank Consolidated

06/30/2012 06/30/2011 06/30/2012 06/30/2011

Tax contingencies (a) 1,460 23,026 4,802 24,559

Civil contingencies (b) 218 4 231,506 33,302

Labor contingencies (c) 19,784 7,902 267,534 115,100

Legal obligation (d)

625,020 585,210 1,572,003

1,458,421

Total 646,482 616,142 2,075,845 1,631,382

(a) In the Consolidated, refers, basically, to tax issues involving ISS (service tax)

amounting to R$1,143, and CSSL (social contribution on net income) amounting to

R$1,459; and were presented under caption Other liabilities - Tax and social

security.

(b) In the Consolidated figures, they refer basically to legal claims of the following

nature: refusal of the total real cost of the agreements entered into; review of

contractual conditions and charges; and fees, being presented under caption Other

liabilities - Sundry.

(c) In the Consolidated, they mostly refer to lawsuits filed by former employees

involving indemnities, overtime, working time exemption, supplement per function

and representation, among other matters, and were presented under caption Other

liabilities - Sundry.

(d) In the consolidated, with reference, basically, to claims of non-payment of COFINS

based on the revenues not derived from monthly invoicing (expansion of the

calculation basis introduced by Law 9718/98).

b. Changes in contingent liabilities classified in the probable risk category

Tax claims

Civil claims

Labor claims

Legal obligation

Bank

01/01 to

06/30/2012

01/01 to

06/30/2011

01/01 to

06/30/2012

01/01 to

06/30/2011

01/01 to

06/30/2012

01/01 to

06/30/2011

01/01 to

06/30/2012

01/01 to

06/30/201

1

Opening

balance

1,680 3,741 157 4 11,879 5,816 606,745 564,825

Formations

87 22,774 61 - 7,905 2,086 - -

Reversals

(141) (3,489) - - - - - -

Restatements

40 - - - - - 18,275 20,385

Write-offs

(206) - - - - - - -

Closing

balance

1,460 23,026 218 4 19,784 7,902

625,020 585,210

Tax claims

Civil claims

Labor claims

Legal obligation

Consolidate

d

01/01 to

06/30/2012

01/01 to

06/30/2011

01/01 to

06/30/2012

01/01 to

06/30/2011

01/01 to

06/30/2012

01/01 to

06/30/2011

01/01 to

06/30/2012

01/01 to

06/30/201

1

Opening

balance

5,309 6,413 192,217 23,290 139,633 83,988 1,519,861 1,400,348

Formations

1,237 22,845 43,608 10,012 128,585 31,170 - -

Reversals

(1,579) (4,872) (4,319) - (684) (58) - -

Restatements

39 173 - - - - 52,142 58,073

Write-offs

(204) - - - - - - -

Closing

balance

4,802 24,559 231,506 33,302 267,534 115,100 1,572,003 1,458,421

c. Breakdown of contingent liabilities classified in the possible risk category

Bank Consolidated

06/30/2012 06/30/2011 06/30/2012 06/30/2011

Tax contingencies (a) 483,980 361,323 1,001,279 651,642

Civil contingencies (b) 3,169 4,100 19,600 90,157

Labor contingencies (c) 1,646 1,762 23,916 30,298

Total 488,795 367,185 1,044,795 772,097

(a) The Consolidated refers to, basically: a) IRPJ/CS on equity investments abroad in

the amount of R$185,536; b) IRPJ/CS on contingent COFINS and inflation

adjustment amounting to R$ 381,215; c) Income and social contribution tax unduly

offset and bonuses to senior managers totaling R$ 22,914; d) Corporate income tax

allocated to FINOR totaling R$ 33,192; e) INSS on profit sharing and overseas

profits totaling R% 41,693; f) ISS (Tax on Services) in the amount of R$ 50,754; g)

INSS in the amount of R$ 134,542; and h) PIS/Cofins on demutualization totaling

R$ 17,845.

(b) The Consolidated refers to, basically, to collection actions.

(c) In the Consolidated, they mostly refer to lawsuits filed by former employees

involving indemnities, overtime, working time exemption, supplement per function

and representation, among other matters.

d. Judicial deposits presented in Other credits – Sundry

Bank Consolidated

06/30/2012 06/30/2011

06/30/2012 06/30/2011

Tax contingencies 163,147 142,537 416,558 372,772

Civil contingencies - - 64,936 38,301

Labor contingencies 3,330 4,365 37,358 27,444

Others 33 25 156 130

Total 166,510 146,927 519,008 438,647

e. Public civil suits

The Institution has contingent losses involving public lawsuits which, based on legal

advisors opinion and Management judgment, has possible risk of loss. Due to their

current stage, the measurement of the amounts involved of these actions could not

be safely determined.

f. Contingent assets

There is no contingent asset recorded.

g. Other commitments

The Bank filed at the Internal Revenue Service its adhesion to the Special

Installment Payment Program - PAES, created by Law 10684/03, of the Federal

Government. Adhesion to the program allowed the scheduling of PIS, relating to the

period from January 2000 to January 2003. The amount included in the program is

R$ 3,046.

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