conference call 4q12 earnings - bbconference call 4q12 earnings . banco do brasil s.a. ......
TRANSCRIPT
1
1
Conference Call
4Q12
Earnings
2 Banco do Brasil S.A. – Fourth Quarter 2012 Earnings 2
Disclaimer
This presentation may include references and statements, planned synergies,
estimates, projections of results, and future strategy for Banco do Brasil, it’s
Associated and Affiliated Companies, and Subsidiaries. Although these references
and statements reflect the management’s belief, they also involve imprecision and
highly difficult risks to be foreseen. Consequently, they may conduct to a different
result than those anticipated and discussed here. These expectations are highly
dependent on market conditions, on Brazil’s economic and banking system
performances, as well as on international market conditions. Banco do Brasil is not
responsible for bringing up to date any estimate in this presentation.
3 3
Highlights
Adjusted Net Income reaches R$ 11.5 billion in 2012
NPL 90 ratio (2.05%) remains in decline and lower than Banking Industry
(3.64%)
Loan Portfolio¹ grows 24.9% in 12 months
Banco do Brasil S.A. – Fourth Quarter 2012 Earnings
(1) It includes private securities and guarantees provided
Diversified funding sources ensure businesses expansion: highlight to
Agribusiness Letters of Credit (LCA) and foreign borrowing
4 4
Earnings Highlights
R$ million
(1) It includes Other Operating Revenues net of Other Operating Expenses, Equity in Earnings of Subsidiaries and Affiliates and Insurance, Pension Plans and Premium Bonds Earnings
On 4Q11 On 3Q12 On 2011
Operating Revenues 15,924 16,366 17,556 60,649 66,611 10.2 7.3 9.8
Net Interest Income 10,817 11,251 12,033 40,830 45,729 11.2 6.9 12.0
Fee Income 5,027 5,280 5,484 18,242 21,071 9.1 3.9 15.5
Previ 531 287 287 2,981 1,355 (45.9) (0.0) (54.5)
Other Items¹ (451) (453) (248) (1,404) (1,545) (44.9) (45.1) 10.1
Operating Expenses (10,993) (12,462) (12,510) (41,736) (48,834) 13.8 0.4 17.0
Administrative Expense (6,966) (7,123) (7,499) (24,752) (28,194) 7.6 5.3 13.9
Legal Risk (4) (463) (219) (860) (1,539) 5,928.6 (52.7) 79.0
Tax Expenses (1,132) (1,113) (1,156) (4,297) (4,451) 2.2 3.9 3.6
Allowance for Loan Losses (2,892) (3,764) (3,636) (11,827) (14,651) 25.7 (3.4) 23.9
Non Operating Result 9 60 (4) 56 107 (147.6) (107.0) 89.4
Income Taxes and Statutory Profit Sharing (1,914) (1,307) (1,861) (7,219) (6,356) (2.8) 42.4 (12.0)
Adjusted Net Income 3,025 2,657 3,180 11,751 11,528 5.1 19.7 (1.9)
Chg. %4Q11 3Q12 4Q12 2011 2012
Banco do Brasil S.A. – Fourth Quarter 2012 Earnings
5 5
Sources and Uses
(1) It includes Mortgage Bonds, Financial Letters and Debentures (EN 29)
(2) It includes Foreign Lending/Onlending, securities abroad, Subordinated Debt Issued Abroad and Hybrid Capital Instruments issued Abroad
Banco do Brasil S.A. – Fourth Quarter 2012 Earnings
Dec/11 Sep/12 Dec/12 Chg. %
R$ billion Balance Share % Balance Share % Balance Share % On Dec/11 On Sep/12
Sources 576.3 100.0 664.2 100.0 690.4 100.0 19.8 4.0
Commercial Funding¹ 450.5 78.2 507.4 76.4 515.7 74.7 14.5 1.6
Total Deposits 442.4 76.8 476.1 71.7 472.1 68.4 6.7 (0.8)
Agrib. LC + Real Estate LC 7.4 1.3 22.9 3.4 34.1 4.9 358.6 48.9
Repos w/ Corporate Bonds 0.7 0.1 8.4 1.3 9.6 1.4 1,339.1 13.1
Domestic Onlending 51.0 8.8 52.8 7.9 63.5 9.2 24.6 20.4
Financial and Development Funds 4.0 0.7 4.7 0.7 5.1 0.7 27.1 9.0
Subordinated Debt 25.1 4.4 32.4 4.9 32.7 4.7 30.1 0.7
Others Commercial Papers¹ 8.7 1.5 9.5 1.4 9.9 1.4 13.1 4.0
Domestic Hybrid Debt Capital Instr. - - 8.1 1.2 8.2 1.2 - 1.4
Foreign Borrowing² 37.1 6.4 49.3 7.4 55.4 8.0 49.4 12.3
Uses 576.3 100.0 664.2 100.0 690.4 100.0 19.8 4.0
Available Funds 52.5 9.1 87.8 13.2 70.8 10.3 35.0 (19.4)
Compulsory Deposits 93.7 16.3 85.5 12.9 80.1 11.6 (14.5) (6.3)
Net Loan Portfolio (a) + (b) + (c) 430.2 74.6 490.8 73.9 539.5 78.1 25.4 9.9
Loan Portfolio (a) 423.0 73.4 480.7 72.4 525.7 76.1 24.3 9.3
Private Securities (b) 26.2 4.6 31.4 4.7 35.0 5.1 33.5 11.6
Allowance for Loan Losses (c) (19.0) (3.3) (21.3) (3.2) (21.2) (3.1) 11.5 (0.3)
Indicators - %
Net Loan Portfolio / Total Deposits 97.2 103.1 114.3
Net Loan Portfolio / Funding 95.5 96.7 104.6
Net Loan Portfolio / Total Deposits 74.6 73.9 78.1
6
NIM per Segment (%)¹ Net Interest Margin (%)¹
6
Net Interest Income
(1) Annualized Figures
(2) Historical data has been reviewed due to changes in the measurement methodology
4Q12
5.8
4.8
8.1
14.8
3Q12
5.8
5.5
8.6
15.2
2Q12
5.8
6.2
9.2
16.5
1Q12
5.5
6.2
8.9
15.3
4Q11
6.1
6.1
9.0
15.5
Agribusiness NIM
Companies NIM
Loan Operations NIM
Individuals NIM
4Q12 1Q12
3.5
5.1
3Q12
3.3
5.0
2Q12
3.7
5.4
3.5
5.3
4Q11
4.0
5.5
Risk Adjusted NIM NIM
Banco do Brasil S.A. – Fourth Quarter 2012 Earnings
On 4Q11 On 3Q12
Net Interest Income² 10,817 11,251 12,033 11.2 6.9
Loan Operations Income 15,971 16,071 16,323 2.2 1.6
Funding Expenses (7,200) (6,678) (6,241) (13.3) (6.5)
Institutional Funding Expenses (584) (742) (919) 57.2 23.8
Recovery of Write-offs Loans 851 813 1,076 26.4 32.3
Treasury Income 2,779 2,639 2,235 (19.6) (15.3)
Other (1,000) (852) (441) (55.9) (48.3)
Chg. %4Q123Q124Q11
R$ million
7 7
Loan Portfolio – Broad Concept¹
R$ billion
(1) It includes private securities and guarantees provided
Dec/12
580.8
273.8
152.6
108.0
46.4
Sep/12
532.3
247.1
143.8
98.4
43.0
Jun/12
508.2
234.0
139.3
95.7
39.2
Mar/12
472.9
211.4
132.7
92.4
36.3
Dec/11
465.1
210.2
130.6
89.4
35.0
Companies
Individuals
Agribusiness
Offshore
47.1%
26.3%
18.6%
8.0%
45.2%
28.1%
19.2%
7.5%
Banco do Brasil S.A. – Fourth Quarter 2012 Earnings
8 8
Organic Individuals Loan Portfolio¹ ²
R$ billion
(1) Classified Concept
(2) Does not include BV operations and acquired portfolios
Banco do Brasil S.A. – Fourth Quarter 2012 Earnings
On Dec/11 On Sep/12
Payroll 39.3 42.8 45.5 42.1 47.3 40.9 20.4 4.0
Salary Loans 15.3 16.7 17.3 16.0 17.1 14.8 11.7 (1.0)
Auto Loans 4.7 5.1 9.2 8.5 11.0 9.5 134.9 20.3
Mortgage 6.0 6.6 8.5 7.9 10.2 8.8 69.0 19.8
Credit Cards 13.1 14.3 13.5 12.5 15.8 13.6 20.4 16.6
Consumer Finance 5.7 6.2 5.9 5.5 5.9 5.1 3.9 (0.3)
Overdraft 2.6 2.8 2.8 2.6 2.5 2.1 (3.7) (12.3)
Other 5.2 5.6 5.3 4.9 5.8 5.0 12.6 10.2
Individuals Loan Portfolio 91.8 100.0 108.0 100.0 115.6 100.0 25.9 7.1
Chg. %Dec/11 Sep/12 Dec/12Share % Share % Share %
9 9
Loans to Companies – Broad Concept¹
R$ billion
(1) It includes private securities and guarantees provided
On Dec/11On Sep/12
Working Capital 113.1 53.8 132.4 53.6 153.3 56.0 35.6 15.8
Investment 37.9 18.0 39.8 16.1 44.7 16.3 17.9 12.3
Trade Finance 14.6 6.9 18.5 7.5 15.4 5.6 5.6 (16.7)
Corporate Bonds & Notes 25.0 11.9 31.2 12.6 34.5 12.6 37.6 10.4
Guarantees 13.8 6.6 17.8 7.2 17.6 6.4 27.1 (1.3)
Other 5.8 2.7 7.4 3.0 8.4 3.1 46.4 13.9
Companies Loan Portoflio 210.2 100.0 247.1 100.0 273.8 100.0 30.3 10.8
Chg. %Dec/11 Share % Sep/12 Share % Dec/12 Share %
Banco do Brasil S.A. – Fourth Quarter 2012 Earnings
10
NPL 90 (%) Agribusiness Loan Portfolio1 (R$ billion)
10
Agribusiness
(1) It includes private securities and guarantees provided
63.8
64.3
31.3
Mar/12
92.4
62.7
66.5
31.8
Jun/12
95.7
Dec/12
108.0
62.5
74.7
33.3
Sep/12
98.4
63.6
60.3
32.2
Dec/11
89.4
62.8
57.9
31.5
Market Share - % Individuals Companies
0.63
Dec/12 Sep/12
0.48
Jun/12
0.51
Mar/12
0.62
Dec/11
0.72
Banco do Brasil S.A. – Fourth Quarter 2012 Earnings
11
Provisions / Non-performing Loans +90 days NPL 90
11
Delinquency and Coverage Ratios
%
Dec/12
1.77
2.05
3.64
Sep/12
1.81
2.19
3.77
Jun/12
1.77
2.19
3.78
Mar/12
1.78
2.22
3.74
Dec/11
1.81
2.16
3.60
BB ex Banco Votorantim
BB Consolidated
Banking Industry
Sep/12 Dec/12
151.9
196.5
217.3
152.6
202.5
232.2
Jun/12
151.1
202.1
238.1
Mar/12
152.4
204.4
245.0
Dec/11
157.3
207.6
244.3
BB Consolidated
Banking Industry BB ex Banco Votorantim
Banco do Brasil S.A. – Fourth Quarter 2012 Earnings
12
Delinquency per Segment¹
Ind
ivid
ual
s C
om
pan
ies
Agr
ibu
sin
ess
(1) Does not include Banco Votorantim operations
%
5.21
3.10 2.95
4.90
2.60
4.20
2.76
4.74
2.76
4.90
3.56
2.12
3.21
1.98
3.44
1.89
2.99
2.18
3.16
2.26
Dec/12
0.63
0.96
Sep/12
0.48
0.95
Jun/12
0.51 0.72
Mar/12
0.62 0.87
Dec/11
0.72
1.14
91.5 91.7 92.2
91.1 91.1
94.8 95.1 95.2 95.2 95.3
95.2 94.6 94.5 93.9 94.3
AA – C Risk NPL15 NPL90
Banco do Brasil S.A. – Fourth Quarter 2012 Earnings
13 13
BV – Lightweight Vehicles1 : Production per Business Channel and Delinquency
(1) Comprised of CDC veículos (Autos Consumer Credit) and vans
Banco do Brasil S.A. – Fourth Quarter 2012 Earnings
Ap
r/1
1
5.2
0.6
1.0
Mar
/11
4.7
0.5
0.9
Feb
/11
4.2
0.5
0.9
Jan
/11
3.7
0.4
0.8 0.7
Jun
/12
11.0
0.2
0.6
May
/12
11.0
0.2
0.7
Ap
r/1
2
10.9
0.1
0.6
Mar
/12
10.8
0.2
Dec
/12
8.4
0.2
0.8
No
v/1
2
9.0
0.2
0.8
Oct
/12
9.7
0.2
0.7
Sep
/12
10.2
0.1
0.6
Au
g/1
2
10.2
0.2
0.7
Jul/
12
10.8
0.2 1.1
10.3
9.0
0.6 0.5
0.3 0.3 Ja
n/1
2
Dec
/11
9.5
Feb
/12
0.2
No
v/1
1
0.7 0.6
7.9
0.3
0.6
Oct
/11
7.5
0.5
0.8
Sep
/11
6.9
0.6
1.0
Au
g/1
1
6.5
0.8
1.1
Jul/
11
6.4
0.7
1.0
Jun
/11
6.0
0.6
1.0
May
/11
5.7
0.7
NPL 90 (%) Car dealers (R$ billion) Multi-brand car dealers (R$ billion)
14
Allowance for Loans Losses Expenses (consolidated– R$ million) NPL + 90 days (%)
Auto Loans Portfolio Vintage
14
Banco Votorantim – Asset Quality
Banco do Brasil S.A. – Fourth Quarter 2012 Earnings
Allowance for Loans Losses Expenses (Autos – R$ million)
59% 57%52%
47%
Dec/12
15%
38%
Sep/12
19%
29%
Jun/12
22%
21%
Mar/12
26%
15%
up to Jun/10 from Jul/10 to Sep/11 after Sep/11
722
1Q12
1,216 1,082
-33.3% -40.6%
1,210
-40.3%
3Q12 4Q12 2Q12
-32.8% -25.9% -20.0%
4Q12
1,066
3Q12
1,332
2Q12
1,438
1Q12
1,587
8.4
Jun/12
8.0
Sep/12 Mar/12
8.2 7.0
Dec/12
15 15
Administrative Expenses
R$ million
Chg. %
On 4Q11 On 3Q12 On 2011
Personnel Expenses (3,954) (4,001) (4,211) (13,943) (15,777) 6.5 5.2 13.1
Other Administrative Expenses (3,012) (3,122) (3,288) (10,809) (12,417) 9.2 5.3 14.9
Telecommunications and Data Processing (556) (543) (574) (2,022) (2,224) 3.2 5.6 10.0
Amortization and Depreciation (331) (340) (232) (1,293) (1,271) (30.1) (31.9) (1.7)
Security, Guard, and Transport Services (450) (532) (536) (1,622) (2,056) 19.1 0.9 26.8
Expenses with Premises and Equipment (448) (471) (517) (1,625) (1,896) 15.4 9.9 16.7
Marketing and Public Relations (263) (170) (239) (683) (724) (9.2) 40.8 5.9
Expenses with Outsourced Services (525) (617) (671) (1,974) (2,436) 27.9 8.7 23.4
Other Administrative Expenses (439) (449) (520) (1,590) (1,811) 18.4 15.6 13.9
Administrative Expenses (6,966) (7,123) (7,499) (24,752) (28,194) 7.6 5.3 13.9
4Q11 3Q12 4Q12 2011 2012
Banco do Brasil S.A. – Fourth Quarter 2012 Earnings
16 16
Adjusted Administrative Expenses
R$ million
(1) Managerial measurement
Banco do Brasil S.A. – Fourth Quarter 2012 Earnings
Chg. %
On 2011
Administrative Expenses (24,752) (28,194) 13.9
Banco Patagonia 377 658 -
Mapfre 358 563 -
Banco Postal - 524 -
Adjusted Administrative Expenses¹ (24,017) (26,449) 10.1
2011 2012
17
12-months Ratio Quarterly Ratio
17
Cost to Income Ratio¹
(1) Administrative Expenses / Operating Revenues –Information reviewed due to methodology changes. Data from the Income Statement with Reallocations
%
45.3
4Q12
43.4
3Q12
44.3
2Q12
42.3
1Q12
42.8
4Q11 Dec/12
43.2
Sep/12
43.6
Jun/12
43.4
Mar/12
43.2
Dec/11
42.9
Banco do Brasil S.A. – Fourth Quarter 2012 Earnings
18 18
BIS Ratio¹
%
(1) In January/13 Banco do Brasil issued subordinated financial letters in the country (R$ 5.2 billion) and as hybrid instrument of capital abroad (US$ 2.0 billion). Estimates indicates an impact in the BIS Ratio of 128 bps
Banco do Brasil S.A. – Fourth Quarter 2012 Earnings
10.5
3.5 4.3
10.7 10.6
Sep/12 Jun/12
10.6
14.2
Mar/12
4.1 3.6
14.8 14.3
14.8
Dec/12
10.9
3.3
Dec/11
14.0
Tier II
Tier I
19 19
2012 Guidance
(1) It considers credit acquired with recourse according to CMN 3.533/2008 Resolution
(2) 12-month Expenses with Provision for Loan Losses / Average classified Loan Portfolio in the same period
Adjusted Return on Equity 17% - 20% 18.7%
Net Interest Income 10% - 14% 12.0%
Total Deposits 14% - 18% 6.7%
Domestic Loan Portfolio¹ 17% - 21% 23.1%
Individuals¹ 19% - 23% 16.3%
Companies 18% - 22% 29.5%
Agribusiness 13% - 16% 20.7%
Allowance for Loan Losses / Loan Portfolio² 3.1% - 3.5% 3.2%
Fee Income 13% - 18% 15.5%
Administrative Expenses 8% - 12% 13.9%
Tax Rate 31% - 34% 27.6%
2012 Performance2012 Guidance
Banco do Brasil S.A. – Fourth Quarter 2012 Earnings
4Q12 Guidance 4Q12 Performance
Allowance for Loan Losses R$ 3.5 - 3.7 billion R$ 3.636 billion
20 20
2013 Guidance
(1) Adjusted ROE estimated for 2013 considers estimated shareholders’ equity, according to current legislation on December 31, 2012
(2) Includes total deposits, Agribusiness Letters of Credit - LCA, Mortgage Bonds - LCI and Repurchase Agreements Operations with Private Securities
(3) Domestic Loan Portfolio, in Broad Concept, includes private securities and guarantees
(4) Expenses with allowance for loan losses (PCLD) of the last twelve months/average portfolio of the same period
Banco do Brasil S.A. – Fourth Quarter 2012 Earnings
Adjusted Return on Equity¹ 14% - 17%
Net Interest Income 7% - 10%
Commercial Funding² 15% - 19%
Domestic Loan Portfolio³ - Broad Concept 16% - 20%
Individuals 18% - 22%
Companies 16% - 20%
Agribusiness 13% - 17%
Allowance for Loan Losses⁴ 3.0% - 3.4%
Fee Income 10% - 14%
Administrative Expenses 7% - 10%
2013 Guidance
21
Investor Relations Unit
SBS - Quadra 1 - Bloco C - Ed. Sede III – 7th floor
70073-901 - Brasília (DF)
Telephone: +55 (61) 3102 1124
Fax: +55 (61) 3102 1435
bb.com.br/ir
21
Contacts
Banco do Brasil S.A. – Fourth Quarter 2012 Earnings
22 22
Appendix
23. One-Off Items
24. Foreign Borrowing
25. Loans to Individuals – Broad Concept
26. Individuals Loan Portfolio
27. Individuals Loan Portfolio – Average Rates/Tenor
28. Expenses with Provision for Loan Losses
29. Individuals Auto Loan Portfolio - (BB Production)
30. Banco Votorantim – Auto Loans Portfolio
31. Loans to Companies – Broad Concept
32. Loans to Companies - SME
33. Agribusiness Portfolio by Purpose
34. Agribusiness Portfolio by Credit Line
35. Agribusiness
36. Credit Risk
37. Loans to Individuals – Risk Level
38 Loans to Companies – Risk Level
39. Renegotiated Loan Portfolio
40. Agribusiness – Risk Level
41. Agribusiness Operations with/without rollover
42. Agribusiness – Regular and Restructured Transactions
43. Funding
44. Fee Income
45. Actuarial Assets
46. Actuarial Assets
47. Distribution Network
48. Alternative Channels: MaisBB Network
Banco do Brasil S.A. – Fourth Quarter 2012 Earnings
23 23
One-Off Items
R$ million
Banco do Brasil S.A. – Fourth Quarter 2012 Earnings
Adjusted Net Income 3,025 2,657 3,180 11,751 11,528
(+) One-Off Items (53) 70 787 375 678
Sale of Investments - - - 169 -
Economic Plans (95) (255) (167) (103) (968)
Tax Efficiency - 244 - 386 244
Reversal of Additional Allowance for Loan Losses - - 476 - 699
Sale of Real Estate - - 1,103 - 1,103
Tax Eff. and Stat. Profit Sharing on One-Off Items 42 81 (625) (78) (401)
Net Income 2,972 2,728 3,967 12,126 12,205
Adjusted ROAE (%) 22.9 18.1 21.2 21.7 18.7
ROAE (%) 22.5 18.6 27.0 22.4 19.8
4Q11 3Q12 4Q12 2011 2012
24 24
Foreign Borrowing
US$ billion +30.1%
Dec/12
45.0
10.9
17.5
11.6
3.2 1.7
Sep/12
42.3
10.5
15.4
11.3
3.1 2.0
Dec/11
34.6
10.0
11.0
7.3
3.1
3.2
Interbanking
Bond Issues
Companies
Individuals
Repos
Banco do Brasil S.A. – Fourth Quarter 2012 Earnings
25 25
Loans to Individuals – Broad Concept¹
R$ billion
(1) It includes guarantees provided
On Dec/11 On Sep/12
Payroll 51.2 39.2 57.1 39.7 58.6 38.4 14.3 2.7
Salary Loans 15.3 11.7 17.3 12.0 17.1 11.2 11.7 (1.0)
Vehicle Finance 31.3 24.0 33.0 23.0 35.9 23.5 14.5 8.6
Mortgage 6.0 4.6 8.5 5.9 10.2 6.7 69.0 19.8
Credit Cards 13.2 10.1 13.6 9.5 15.9 10.4 20.4 16.5
Consumer Finance 5.7 4.4 5.9 4.1 5.9 3.9 3.4 (0.3)
Overdraft 2.6 2.0 2.8 1.9 2.5 1.6 (3.7) (12.3)
Other 5.2 4.0 5.5 3.8 6.5 4.3 25.5 17.7
Individuals Loan Portfolio 130.6 100.0 143.8 100.0 152.6 100.0 16.8 6.1
Chg. %Dec/11 Share % Sep/12 Share % Dec/12 Share %
Banco do Brasil S.A. – Fourth Quarter 2012 Earnings
26 26
Individuals Loan Portfolio
R$ billion
Loan Portfolio Acquisition
Market Share
Payroll Loan (Organic Credit Portfolio)
Banco do Brasil S.A. – Fourth Quarter 2012 Earnings
On Dec/11 On Sep/12
Civil Servants 33,525 85.3 39,152 86.1 40,859 86.4 21.9 4.4
INSS's Retirees and Pensioners 3,596 9.2 4,032 8.9 4,140 8.8 15.1 2.7
Private Sector Employees 2,170 5.5 2,294 5.0 2,319 4.9 6.8 1.1
Chg. %Dec/11 Share % Sep/12 Share % Dec/12 Share %
On Dec/11On Sep/12
Payroll loans 8.9 44.9 8.0 48.3 7.7 44.1 (13.2) (4.0)
Auto financing 10.9 55.1 8.6 51.7 9.8 55.9 (10.2) 13.8
Total 19.7 100.0 16.6 100.0 17.4 100.0 (11.6) 5.2
Chg. %Dec/11 Share % Sep/12 Share % Dec/12 Share %
Dec/11 Sep/12 Dec/12
BB Industry Share % BB Industry Share % BB Industry Share %
Payroll Loan 51.2 159.1 32.2 57.1 181.5 31.4 58.6 187.9 31.2
Mortgage 6.0 200.5 3.0 8.5 256.4 3.3 10.2 277.0 3.7
Auto financing 31.3 201.0 15.6 33.0 203.7 16.2 35.9 201.6 17.8
27 27
Individuals Loan Portfolio– Average Rates/Tenor
Banco do Brasil S.A. – Fourth Quarter 2012 Earnings
Dec/11 Sep/12 Dec/12
Banco do Brasil
Auto financing
Average rate - % p.m 1.58 1.29 1.26
Average term - months 29 36 36
Mortgage
Average contracted amount - R$ thousand 163.3 155.2 163.9
Average term - months 260 278 281
Payroll Loans
Average rate - % p.m 2.06 1.95 1.90
Average term - months 51 52 52
BV - Auto Loans
Average rate - % p.m 1.97 1.81 1.78
Average term - months 46 44 45
28 28
Expenses with Provision for Loan Losses
R$ million
Guidance
2Q12: R$ 3.6 to 3.8 billion
3Q12: R$ 3.5 to 3.7 billion
4Q12: R$ 3.5 to 3.7 billion
Performed
R$ 3.677 billion
R$ 3.764 billion
R$ 3.636 billion
On 4Q11 On 3Q12
Banco do Brasil ex- BV (2,343) (3,098) (3,103) 32.4 0.2
Banco Votorantim (548) (666) (533) (2.8) (20.0)
Banco do Brasil Consolidated (2,892) (3,764) (3,636) 25.7 (3.4)
4Q11 3Q12 4Q12Chg. %
Banco do Brasil S.A. – Fourth Quarter 2012 Earnings
29
NPL 90 (%)
29
Individuals Auto Loan Portfolio (BB Production)
Portfolio per Risk Level (%)
Dec/12
94.4
5.6
Sep/12
94.2
5.8
Dec/11
90.0
10.0
AA-C D-H
Dec/12
5.3
0.9
Sep/12
6.0
0.9
Jun/12
6.0
1.4
Mar/12
5.7
2.1
Dec/11
5.0
2.2
Banking Industry BB
79.7% of the customers are checking account holders for more than five years
47.1% of the customers receive their salaries or pension through Banco do Brasil
Banco do Brasil S.A. – Fourth Quarter 2012 Earnings
Average Term (months) 40.1 41.2
Average Down-Payment (%) 39.0 30.2
Disbursement Profile 3Q12 4Q12
30
Coverage Ratio¹ 90 days NPL 90 after 4 months of granting (%)
Average Tenor and Average Down Payment Production Profile
Banco do Brasil S.A. – Fourth Quarter 2012 Earnings 30
Banco Votorantim – Auto Loan Portfolio
44464647
4Q12
42%
3Q12
44
44%
2Q12
41%
1Q12
41%
4Q11
38%
Average tenor (months) Average down payment
16%
4Q12
100%
3Q12
100%
2Q12
100%
1Q12
100%
4Q11
84%
Other plans 60-month tenor with no down payment
0.7
Mar/12
Month of Granting
Aug/12
0.3
Jun/12
0.4
Dec/11
0.6
Sep/11
1.7
Jun/11
2.2
Mar/11
2.7
Dec/10
1.8
Sep/10
1.2
Jun/10
0.8
Mar/10
0.5
(1) Classified concept
97.7
90.8
Dec/11
84.6
Mar/12
78.9
Jun/12 Dec/12 Sep/12
104.4
31
12 M
Fundo Garantidor de Operações (FGO)³
31
Loans to Companies – Broad Concept¹
Loans to Companies Breakdown ¹
30.7%
30.1%
12 M
R$ billion
(1) It includes private securities and guarantees provided
(2) Companies with annual income of up to R$ 25 million
(3) Operations Guarantee Fund
Dec/12
273.8
184.9
88.9
Sep/12
247.1
167.1
80.0
Dec/11
210.2
142.1
68.1
Medium and Large Companies Micro and Small Enterprises²
+42.1%
Dec/12
13.9
Sep/12
12.3
Dec/11
9.8
Banco do Brasil S.A. – Fourth Quarter 2012 Earnings
32 32
Loans to Companies – SME
R$ billion
Loans per Segment
Products
On Dec/11 On Sep/12
Working Capital 47.9 70.3 54.6 68.3 61.0 68.6 27.5 11.7
Investment 18.4 27.0 23.4 29.2 25.9 29.1 40.9 10.7
Foreign Trade 1.8 2.7 2.0 2.5 2.0 2.3 10.0 1.6
Total 68.1 100.0 80.0 100.0 88.9 100.0 30.7 11.2
Chg. %Dec/11 Share % Sep/12 Share % Dec/12 Share %
Banco do Brasil S.A. – Fourth Quarter 2012 Earnings
On Dec/11 On Sep/12
Manufacturing Industries 23.2 34.1 28.7 35.8 32.2 36.2 39.0 12.4
Commerce 29.2 42.9 33.1 41.4 35.9 40.3 22.8 8.4
Services Segment 15.7 23.0 18.2 22.8 20.8 23.4 33.1 14.3
Total 68.1 100.0 80.0 100.0 88.9 100.0 30.7 11.2
Dec/11Chg. %
Share % Sep/12 Share % Dec/12 Share %
33 33
Agribusiness Portfolio by Purpose
R$ billion
Banco do Brasil S.A. – Fourth Quarter 2012 Earnings
On Dec/11 On Sep/12
Work. Cap. for Input Purchase 28.4 31.8 32.1 32.6 35.8 33.1 26.1 11.6
Investment 32.1 36.0 38.3 38.9 42.8 39.7 33.3 12.0
Crop Trading 4.5 5.1 4.2 4.3 5.0 4.6 10.6 19.0
Agroindustry 20.9 23.3 21.1 21.5 21.5 19.9 3.2 1.8
Other 2.8 3.1 2.0 2.0 1.8 1.7 (33.1) (6.5)
Classified Loan Portfolio 88.7 99.2 97.7 99.3 107.0 99.1 20.7 9.6
Rural Product Bills and Guarantees 0.7 0.8 0.7 0.7 1.0 0.9 40.5 38.5
Loan Portfolio - Broad Concept 89.4 100.0 98.4 100.0 108.0 100.0 20.8 9.8
Chg. %Dec/11 Share % Sep/12 Share % Dec/12 Share %
34 34
Agribusiness Portfolio by Credit Line
R$ billion
Banco do Brasil S.A. – Fourth Quarter 2012 Earnings
On Dec/11 On Sep/12
Working Capital for Input Purchase 18.54 20.7 20.44 20.8 22.30 20.7 15.4 (1.0)
Trading and Industrialization of Products 21.46 24.0 21.49 21.8 21.77 20.2 7.5 0.8
Pronaf 20.07 22.5 22.35 22.7 24.23 22.4 17.4 3.0
Pronamp 7.13 8.0 9.64 9.8 11.85 11.0 61.5 12.5
FCO Rural 6.70 7.5 7.63 7.8 7.91 7.3 19.7 2.7
BNDES / Finame Rural 5.32 6.0 5.13 5.2 5.80 5.4 (12.3) 6.2
Other 9.44 10.6 10.97 11.2 13.13 12.2 34.7 6.1
Classified Loan Portfolio 88.66 99.2 97.66 99.3 106.98 99.1 17.6 3.0
Rural Product Bills and Guarantees 0.70 0.8 0.71 0.7 0.99 0.9 40.5 38.5
Loan Portfolio - Broad Concept 89.36 100.0 98.37 100.0 107.97 100.0 17.4 2.8
Chg. %Dec/11 Share % Sep/12 Share % Dec/12 Share %
35 35
Agribusiness1
R$ billion Loan Portfolio per Customer Size
Insurance for Working Capital for Input Purchase
(1) Classified Concept
Banco do Brasil S.A. – Fourth Quarter 2012 Earnings
Operation Contracted
Crop 11/12 Share % Crop 12/13 Share %
Working Capital for Input Purchase 10.1 100.0 12.7 100.0
Total Insured 5.8 56.8 6.8 53.0
With Proagro 3.1 30.7 3.9 30.2
With Insurance 2.1 20.4 2.7 20.8
Hedge Price 0.6 5.7 0.2 1.9
Without Insurance 4.4 43.2 6.0 47.0
Segment Dec/11 Share % Sep/12 Share % Dec/12 Share %
Mini 5.2 5.9 5.3 5.4 5.7 5.3
Small 18.3 20.7 20.4 20.9 22.2 20.8
Medium and Large Sized 33.6 37.9 40.1 41.1 46.1 43.1
Cooperatives 5.5 6.2 6.2 6.3 6.3 5.9
Businesses 26.0 29.3 25.6 26.3 26.6 24.9
Total 88.7 100.0 97.7 100.0 107.0 100.0
36
Brazilian Banking Industry Banco do Brasil
36
Credit Risk
94.5%
5.5%
AA-C D-H
92.4%
7.6%
AA-C D-H
Banco do Brasil S.A. – Fourth Quarter 2012 Earnings
37 37
Loans to Individuals1 – Risk Level
R$ million
(1) Classified loan portfolio and does not consider Banco Votorantim operations.
Balance Provision Share Balance Provision Share Balance Provision Share
AA 648 - 0.6 10,442 - 8.4 25,274 - 19.0
A 26,264 131 23.5 38,740 194 31.1 26,807 134 20.1
B 55,907 559 50.1 43,262 433 34.7 48,190 482 36.2
C 18,842 565 16.9 21,755 653 17.5 22,373 671 16.8
D 2,618 262 2.3 2,913 291 2.3 2,796 280 2.1
E 999 300 0.9 934 280 0.7 1,155 346 0.9
F 600 300 0.5 550 275 0.4 545 272 0.4
G 591 414 0.5 651 456 0.5 628 439 0.5
H 5,098 5,098 4.6 5,318 5,318 4.3 5,288 5,288 4.0
Total 111,569 7,629 100.0 124,564 7,899 100.0 133,056 7,913 100.0
AA-C 101,662 1,256 91.1 114,198 1,279 91.7 122,645 1,287 92.2
D-H 9,907 6,374 8.9 10,365 6,620 8.3 10,412 6,626 7.8
Dec/11 Sep/12 Dec/12
Banco do Brasil S.A. – Fourth Quarter 2012 Earnings
38 38
Loans to Companies1 – Risk Level
R$ million
(1) Classified loan portfolio and does not consider Banco Votorantim operations.
Banco do Brasil S.A. – Fourth Quarter 2012 Earnings
Balance Provision Share Balance Provision Share Balance Provision Share
AA 72,425 - 45.0 81,098 - 43.1 93,414 - 44.0
A 35,697 178 22.2 45,110 226 24.0 49,541 248 23.4
B 40,698 407 25.3 48,173 482 25.6 55,466 555 26.1
C 4,329 130 2.7 3,803 114 2.0 3,602 108 1.7
D 2,074 207 1.3 2,685 268 1.4 2,574 257 1.2
E 1,607 482 1.0 1,472 441 0.8 1,528 458 0.7
F 649 324 0.4 890 445 0.5 748 374 0.4
G 622 435 0.4 1,025 717 0.5 1,000 700 0.5
H 2,817 2,817 1.8 3,765 3,765 2.0 4,237 4,237 2.0
Total 160,918 4,981 100.0 188,020 6,459 100.0 212,109 6,938 100.0
AA-C 153,149 715 95.2 178,184 822 94.8 202,022 911 95.2
D-H 7,769 4,266 4.8 9,836 5,637 5.2 10,087 6,027 4.8
Dec/11 Sep/12 Dec/12
39 39
Renegociated Loan Portfolio
R$ million
(1) It Includes the amount of R$ 24,6 million related to renegotiated rural credits as of Dec/2012 (R$22.5 million as of Dec/11)
Banco do Brasil S.A. – Fourth Quarter 2012 Earnings
BB Consolidated
4Q11 3Q12 4Q12
Credits Renegotiated 5,000 9,775 8,432
Renegotiated overdue Loans 746 602 733
Renovated 4,255 9,174 7,699
Credits Renegotiated by Delay - Changes
Initial Balance 5,948 6,473 6,862
Contracts 746 602 733
Interest Received and Appopriated (222) 86 66
Write-Off (432) (299) (395)
Overdue Renegotiated Loan Portfolio¹ 6,039 6,862 7,266
Allowance for Loan Losses Balance 3,925 4,449 4,553
NPL + 90 days 954 1,095 1,114
Indicators - %
All. for Loan Losses / Loan Portfolio 65.0 64.8 62.7
NPL + 90 days / Loan Portfolio 15.8 16.0 15.3
All. for Loan Losses Balance/NPL + 90 days 411.3 406.2 408.6
40 40
Agribusiness1 – Risk Level
R$ million
(1) Classified loan portfolio and does not consider Banco Votorantim operations
Balance Provision Share Balance Provision Share Balance Provision Share
AA 19,503 - 22.0 19,566 - 20.0 19,857 - 18.6
A 16,468 82 18.6 18,981 95 19.4 22,812 114 21.3
B 39,987 400 45.1 46,951 469 48.1 52,900 529 49.4
C 7,313 219 8.2 6,842 205 7.0 6,322 190 5.9
D 2,875 287 3.2 2,796 280 2.9 2,563 256 2.4
E 566 170 0.6 652 196 0.7 721 216 0.7
F 221 110 0.2 246 123 0.3 247 123 0.2
G 271 189 0.3 260 182 0.3 242 169 0.2
H 1,456 1,456 1.6 1,363 1,363 1.4 1,320 1,320 1.2
Total 88,658 2,914 100.0 97,656 2,913 100.0 106,984 2,918 100.0
AA-C 83,270 702 93.9 92,339 770 94.6 101,891 833 95.2
D-H 5,388 2,213 6.1 5,317 2,144 5.4 5,092 2,085 4.8
Dec/11 Sep/12 Dec/12
Banco do Brasil S.A. – Fourth Quarter 2012 Earnings
41 41
Agribusiness Operations with/without Rollover1
(1) Classified Loan Portfolio
(2) NPL at AA level refers to credit with third party risk. The NPL of operations with third party risks were not included in the indicator calculation
R$ million
Sep/12 Dec/12
Portfolio without Rollover Portfolio with Rollover Portfolio without Rollover Portfolio with Rollover
Risk Balance
All. for
Loan
Losses
NPL 90² Balance
All. for
Loan
Losses
NPL 90² Balance
All. for
Loan
Losses
NPL 90² Balance
All. for
Loan
Losses
NPL 90²
AA 19,473 - 55 92 - 7 19,743 - 57 115 - 8
A 18,690 93 0 291 1 (0) 22,439 112 0 373 2 (0)
B 45,349 453 - 1,601 16 0 51,003 510 - 1,898 19 -
C 5,780 173 4 1,061 32 0 5,365 161 4 956 29 1
D 1,849 185 13 947 95 2 1,722 172 17 841 84 4
E 339 102 32 313 94 6 401 120 40 320 96 24
F 124 62 31 123 61 10 131 65 41 116 58 28
G 114 80 36 146 102 7 108 76 44 134 94 34
H 812 812 210 552 552 58 825 825 253 495 495 116
Total 92,531 1,960 326 5,126 953 83 101,737 2,042 399 5,247 876 207
Banco do Brasil S.A. – Fourth Quarter 2012 Earnings
42 42
Agribusiness – Regular and Reestructured Operations¹
R$ billion
(1) It includes private securities and guarantees provided
Dec/12
108.0
5.2
102.7
Sep/12
98.4
5.1
93.2
Jun/12
95.7
5.3
90.4
Mar/12
92.4
5.5
86.9
Dec/11
89.4
5.7
83.7 Reestructured
Regular
Banco do Brasil S.A. – Fourth Quarter 2012 Earnings
43 43
Funding
R$ billion
On Dec/11On Sep/12
Demand Deposits 62.0 9.5 61.5 8.5 74.8 10.1 20.5 21.6
Saving Deposits 100.1 15.3 112.1 15.5 117.7 15.9 17.6 5.0
Interbank Deposits 14.5 2.2 15.7 2.2 16.6 2.2 14.7 5.3
Time Deposits 265.8 40.7 286.8 39.7 263.0 35.5 (1.1) (8.3)
Judicial Deposits 77.7 11.9 85.0 11.8 86.3 11.6 11.2 1.6
Money Market Borrowing 195.2 29.9 214.4 29.7 225.8 30.4 15.7 5.3
Agribusiness Letters of Credit 7.4 1.1 22.8 3.2 34.0 4.6 358.2 49.1
Other Comercial Papers 8.7 1.3 9.6 1.3 9.9 1.3 13.8 3.9
Total 653.7 100.0 722.9 100.0 741.8 100.0 13.5 2.6
Chg. %Dec/11 Share % Sep/12 Share % Dec/12 Share %
Banco do Brasil S.A. – Fourth Quarter 2012 Earnings
44 44
Fee Income
R$ million
Banco do Brasil S.A. – Fourth Quarter 2012 Earnings
Chg. %
On 4Q11 On 3Q12 On 2011
Fee Income 5,027 5,280 5,484 18,242 21,071 9.1 3.9 15.5
Credit / Debit Cards 1,084 1,189 1,279 3,926 4,739 18.1 7.6 20.7
Account Fees 1,136 1,081 1,073 4,077 4,356 (5.6) (0.7) 6.9
Asset Management Fees 829 918 883 3,197 3,582 6.6 (3.8) 12.0
Loan Fees 496 517 614 1,822 2,141 23.9 18.8 17.5
Collections 321 326 336 1,241 1,316 4.7 3.1 6.1
Billings 195 210 215 725 832 10.3 2.4 14.7
Interbank 168 174 180 640 697 7.2 3.9 9.0
Insurance, Pension and Savings Bonds 122 130 171 499 616 39.9 31.6 23.5
Capital Market Fees 96 108 112 350 454 17.3 4.3 29.9
Other 580 628 619 1,764 2,338 6.8 (1.4) 32.5
4Q11 3Q12 4Q12 2011 2012
45 45
Actuarial Assets
R$ million
Banco do Brasil S.A. – Fourth Quarter 2012 Earnings
4Q11 1Q12 2Q12 3Q12 4Q12
(a) Fair Value of the Plan's Assets 133,079 133,079 133,468 133,468 152,029
(b) Present Value of Actuarial Liabilities (98,850) (98,850) (105,772) (105,772) (128,413)
(c) Surplus BB = [(a) + (b)] x 50% 17,115 17,115 13,848 13,848 11,808
(d) Amount Recognized before the Half-Yearly Accouting 13,372 13,870 14,386 14,783 16,249
Actuarial Assets (Initial Period) 12,688 13,372 13,870 14,386 14,783
Antecipated Montly Recognition 531 390 390 287 287
Contract 97 Contributions ¹ 153 108 125 110 1,178
(e) Unrecognized Amount = (c) - (d) 3,743 3,245 (537) (935) (4,441)
(f) Corridor Method - BB ² 6,654 6,654 6,673 6,673 7,601
(g) Excess = (e) - (f) - - - - -
(h) Average Remaining Work Period (half-yearly) 5 5 4 4 4
(i) Amount Recognized in Half-Yearly Adjustment= (g)/(h) - - - - -
(j) Actuarial Assets (Period End) = (f) + (i) 13,372 13,870 14,386 14,783 16,249
(1) Values do not impact the period income and refer to payments assumed by BB in the Contract 97. So, the balances of the Fundo Paridade and of the Fundo Contribuição were
consumed, as shown in Note 27.e.
(2) 50% of max value of 10% of Assets or Liabilities (the highest)
46 46
Actuarial Asset
R$ million
Banco do Brasil S.A. – Fourth Quarter 2012 Earnings
Fundo Destinação ("Destination Fund") 4Q11 1Q12 2Q12 3Q12 4Q12
Initial Balance 4,111 3,684 3,503 3,192 2,853
Update 100 83 87 79 82
Transfers to Fundo de Contrib. e Fundo de Utiliz. (527) (264) (398) (418) (562)
Closing Balance 3,684 3,503 3,192 2,853 2,374
Fundo de Contribuição ("Contribution Fund") 4Q11 1Q12 2Q12 3Q12 4Q12
Initial Balance 1,199 1,096 1,013 935 849
Update 31 25 26 24 25
Contributions to the Plano 1 (133) (108) (105) (110) (148)
Closing Balance 1,096 1,013 935 849 727
Fundo de Utilização ("Utilization Fund") 4Q11 1Q12 2Q12 3Q12 4Q12
Initial Balance 2,644 3,249 3,592 4,095 4,634
Constitution 527 264 398 418 562
Update 79 79 105 122 162
Closing Balance 3,249 3,592 4,095 4,634 5,358
Fundo Paridade ("Parity Fund") 4Q11 1Q12 2Q12 3Q12 4Q12
Initial Balance 1,587 1,608 1,646 1,669 1,715
Contributions to the Plano 1 – Contract 97 (20) 0 (21) 0 (17)
Update 42 37 44 46 56
Advanced Amortizing Contribution- Special Group - - - - (1,014)
Closing Balance 1,608 1,646 1,669 1,715 741
47 47
Distribution Network
(1) Caixa Econômica Federal – Lottery Stores, Banco 24h, ATMSs from Banco Regional de Brasília and Caixa Econômica Federal
Total Distribution Network
Branches 5,362
SAA 4,945
Points of Service 8,837
Banking Agents 11,719
Banco Postal 6,195
Shared Distribution Channels¹ 27,134
Total 64,192
Banco do Brasil S.A. – Fourth Quarter 2012 Earnings
48 Banco do Brasil S.A. – Resultado do 4º Trimestre de 2012 48
Alternative Channels: MaisBB Network
Service Points
Checking Accounts Opened
Credit Operations (quantity)
Transactioned Volume
Transactions¹
17,914
2,284 thousand
1,481 thousand
R$ 7,447 million
330.5 million
(1) Deposits, withdraws, bank statements and account payments
+