consolidated financial statements - prudential conglomerate · prudential conglomerate – 1st half...

Consolidated Financial Statements

Prudential Conglomerate – 1st

half 2015

0

1st

half 2015

Financial

Statements

Prudential Conglomerate



half 2015

1

INDEX

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

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

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

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

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

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

Notes to the Consolidated Financial Statements .................................................................................. 10

1 - THE BANK AND ITS OPERATIONS ................................................................................................ 10

2 - COMPANY RESTRUCTURING........................................................................................................ 10

3 - PRESENTATION OF FINANCIAL STATEMENTS ........................................................................... 11

4 - DESCRIPTION OF SIGNIFICANT ACCOUNTING POLICIES ........................................................ 16

5 - CASH AND CASH EQUIVALENTS .................................................................................................. 22

6 - SHORT-TERM INTERBANK INVESTMENTS .................................................................................. 22

7 - SECURITIES AND DERIVATIVE FINANCIAL INSTRUMENTS ...................................................... 23

8 - INTERBANK ACCOUNTS ................................................................................................................ 30

9 - LOAN OPERATIONS ........................................................................................................................ 32

10 - OTHER RECEIVABLES ................................................................................................................. 38

11 - FOREIGN EXCHANGE PORTFOLIO ............................................................................................ 39

12 - OTHER ASSETS ............................................................................................................................ 40

13 - INVESTMENTS............................................................................................................................... 41

14 - PROPERTY .................................................................................................................................... 44

15 - INTANGIBLE ASSETS ................................................................................................................... 45

16 - DEPOSITS AND SECURITIES SOLD UNDER REPURCHASE AGREEMENTS ......................... 46

17 - BORROWINGS AND ONLENDINGS ............................................................................................. 49

18 - FUNDS FROM ACCEPTANCE AND ISSUANCE OF SECURITIES ............................................. 51

19 - OTHER LIABILITIES ....................................................................................................................... 52

20 - OTHER OPERATING INCOME/EXPENSES ................................................................................. 56

21 - NON-OPERATING INCOME .......................................................................................................... 58

22 - SHAREHOLDERS' EQUITY ........................................................................................................... 59

Index



half 2015

2

23 - TAXES ............................................................................................................................................ 66

24 - RELATED PARTY TRANSACTIONS ............................................................................................. 68

25 - EMPLOYEE BENEFITS .................................................................................................................. 72

26 - PROVISIONS, CONTINGENT ASSETS AND LIABILITIES, LEGAL LIABILITIES - TAXES AND

SOCIAL SECURITY ............................................................................................................................... 82

27 - RISK AND CAPITAL MANAGEMENT ............................................................................................ 85



half 2015

In thousands of Reais, unless otherwise stated

3

BALANCE SHEET

ASSETS Jun 30, 2015 Jun 30, 2014

Restated

CURRENT ASSETS 741,448,370 708,296,628

Cash and Cash Equivalents (Note 5) 16,723,436 11,441,665

Short-term Interbank Investments (Note 6.a) 350,102,410 294,094,641

Open market investments 312,366,641 255,067,819

Interbank deposits 37,735,769 39,026,822

Securities and Derivative Financial Instruments (Note 7) 28,015,592 35,682,278

Own portfolio 23,825,592 21,857,268

Subject to repurchase agreements 2,317,403 10,690,645

Deposits with Banco Central do Brasil -- 16

Pledged in guarantee 913,895 2,712,075

Derivative financial instruments 958,702 422,274

Interbank Accounts 65,264,683 96,856,326

Payments and receipts pending settlement (Note 8.a) 4,443,349 7,014,546

Restricted deposits (Note 8.b) 59,642,166 88,852,611

Deposits with Banco Central do Brasil 57,167,615 86,567,016

National Treasury - rural credits resources 67,446 61,964

National Housing Finance System 2,407,105 2,223,631

Interbank onlendings 1,094 874

Correspondent banks 1,178,074 988,295

Interdepartmental Accounts 204,771 227,880

Internal transfers of funds 204,771 227,880

Loan Operations (Note 9) 142,472,368 142,586,270

Public sector 3,005,596 4,986,012

Private sector 148,348,643 145,173,898

Loan operations linked to assignment 229 456

(Allowance for loan losses) (8,882,100) (7,574,096)

Leasing transactions 69,905 61,405

Private sector (Note 9.h) 88,825 82,562

(Allowance for leasing transactions losses) (18,920) (21,157)

Other Receivables 138,170,114 126,912,718

Receivables from guarantees honored 184,087 144,266

Foreign exchange portfolio (Note 11.a) 19,200,619 15,444,236

Accrued income 2,883,670 2,464,072

Securities trading 344,084 182,719

Sundry (Note 10.b) 116,919,138 109,829,268

(Allowance for other losses) (1,361,484) (1,151,843)

Other Assets (Note 12) 425,091 433,445

Assets not for own use and materials in stock 289,818 294,000

(Allowance for impairment) (125,569) (138,985)

Prepaid expenses 260,842 278,430

See the accompanying notes to the financial statements.




half 2015


4

ASSETS Jun 30, 2015 Jun 30, 2014

Restated

NON-CURRENT ASSETS 631,412,775 560,766,641

LONG-TERM RECEIVABLES 602,674,415 532,133,729

Short-term Interbank Investments (Note 6.a) 1,026,706 2,232,164

Open market investments 215,948 109,226

Interbank deposits 810,758 2,122,938

Securities and Derivative Financial Instruments (Note 7) 83,587,985 70,184,778

Own portfolio 64,658,748 24,452,263

Subject to repurchase agreements 12,869,155 41,295,381

Pledged in guarantee 5,195,590 4,086,687

Derivative financial instruments 864,492 350,447

Interbank Accounts 299,573 235,646

Restricted deposits (Note 8.b) 9,746 7,315

National Treasury - rural credits resources 9,746 7,315

Interbank onlendings 289,827 228,331

Loan Operations (Note 9) 465,232,888 419,485,558

Public sector 67,068,437 44,801,175

Private sector 415,717,578 388,909,632

Loan operations linked to assignment 293,719 188,520

(Allowance for loan losses) (17,846,846) (14,413,769)


Private sector (Note 9.h) 361,225 177,554

(Allowance for leasing transactions losses) (9,934) (4,680)

Other Receivables 52,126,258 39,571,966

Foreign exchange portfolio (Note 11.a) 165,797 --

Accrued income 34,343 32,360

Securities trading 989,063 1,095,297

Specific credits (Note 10.a) 1,633,805 1,469,391

Sundry (Note 10.b) 49,817,065 37,291,952

(Allowance for other losses) (513,815) (317,034)

Other Assets (Note 12) 49,714 250,743

Prepaid expenses 49,714 250,743

PERMANENT ASSETS 28,738,360 28,632,912

Investments 10,908,991 10,283,071

Investments in subsidiaries and associates (Note 13.a) 10,674,502 10,009,102

Domestic 10,328,807 9,620,302

Abroad 345,695 388,800

Other investments (Note 13.b) 288,816 326,386

(Accumulated impairment) (54,327) (52,417)

Property and Equipment (Note 14) 7,183,329 6,697,263

Land and buildings 6,490,812 5,828,339

Other property and equipment 9,346,789 8,648,136

(Accumulated depreciation) (8,654,272) (7,779,212)

Property and equipment by leases (Note 14) 813,772 940,555

Leased assets 901,957 1,083,875

(Accumulated depreciation) (88,185) (143,320)

Intangible (Note 15) 9,810,538 10,675,960

Intangible assets 17,258,015 16,952,195

(Accumulated amortization) (7,447,477) (6,276,235)

Deferred 21,730 36,063

Organization and expansion costs 1,601,011 1,661,367

(Accumulated amortization) (1,579,281) (1,625,304)

TOTAL ASSETS 1,372,861,145 1,269,063,269




half 2015


5

LIABILITIES/SHAREHOLDERS’ EQUITY Jun 30, 2015 Jun 30, 2014

Restated

CURRENT LIABILITIES 920,450,970 841,817,568

Deposits (Note 16.a) 392,210,043 383,043,651

Demand deposits 64,729,068 69,314,044

Savings deposits 147,306,118 146,460,984


Time deposits 152,576,652 142,380,357

Securities Sold Under Repurchase Agreements (Note 16.c) 328,509,821 268,200,641

Own portfolio 49,863,724 48,429,441

Third-party portfolio 278,646,097 219,771,200

Funds from Acceptance and Issuance of Securities (Note 18) 39,994,812 38,814,837

Bonds backed by real estate, mortgage and other credits 20,313,145 27,860,044

Foreign securities 19,655,211 10,951,858

Certificates of structured operations 26,456 2,935

Interbank Accounts 3,342,610 5,182,304

Receipts and payments pending settlement (Note 8.a) 3,322,748 5,159,692

Correspondent banks 19,862 22,612

Interdepartmental Accounts 3,248,560 3,907,174

Third-party funds in transit 3,244,729 3,904,757

Internal transfers of funds 3,831 2,417

Borrowings (Note 17.a) 17,434,326 13,690,973

Domestic loans - official institutions -- 12,418

Foreign borrowing 17,434,326 13,678,555

Domestic Onlending - Official Institutions (Note 17.b) 36,454,684 35,757,923

BNDES 13,865,298 12,805,664

Caixa Econômica Federal 16,324,322 8,046,383

Finame 5,789,597 5,112,178

Other institutions 475,467 9,793,698

Foreign Onlending (Note 17.b) 95 95

Derivative Financial Instruments (Note 7.d) 1,691,959 2,565,569

Other Liabilities 97,564,060 90,654,401

Billing and collection of taxes and contributions 4,703,408 5,901,984


Shareholders and statutory distributions 1,706,758 995,747

Taxes and social security (Note 19.a) 22,267,087 17,777,147

Securities trading 669,183 374,171

Financial and development funds (Note 19.b) 7,682,327 5,357,804

Subordinated debts (Note 19.c) 3,474,834 4,541,156

Equity and debt hybrid securities (Note 19.d) 420,979 295,356

Other liabilities (Note 19.e) 43,564,022 42,628,104




half 2015


6

LIABILITIES/SHAREHOLDERS’ EQUITY Jun 30, 2015 Jun 30, 2014

Restated

NON-CURRENT LIABILITIES 371,775,702 357,594,503

LONG-TERM LIABILITIES 371,361,312 357,190,897

Deposits (Note 16.a) 51,737,259 94,311,431


Time deposits 45,998,116 91,370,148

Securities Sold Under Repurchase Agreements (Note 16.c) 15,442,335 11,799,804

Own portfolio 3,803,173 2,013,664

Third-party portfolio 11,639,162 9,786,140

Funds from Acceptance and Issuance of Securities (Note 18) 147,073,818 98,812,736

Bonds backed by real estate, mortgage and other credits 133,290,489 81,152,235

Debentures 475,422 --

Foreign securities 13,304,952 17,660,501

Certificates of structured operations 2,955 --

Borrowings (Note 17.a) 7,963,694 3,875,541

Domestic loans - other institutions 943,784 --

Foreign borrowing 7,019,910 3,875,541

Domestic Onlending - Official Institutions (Note 17.b) 53,577,116 55,233,530

National Treasury 288,105 395,420

BNDES 26,914,991 29,879,882

Finame 26,374,020 24,958,228

Foreign Onlending (Note 17.b) 382 382

Derivative Financial Instruments (Note 7.d) 1,122,008 606,669

Other Liabilities 94,444,700 92,550,804


Taxes and social security (Note 19.a) 475,579 2,197,043

Securities trading 331,314 1,291,069

Financial and development funds (Note 19.b) 4,721,403 3,047,263

Special operations 2,169 2,141

Subordinated debts (Note 19.c) 47,288,902 43,864,664

Equity and debt hybrid securities (Note 19.d) 5,238,526 11,928,227

Debt instruments eligible as capital (Notes 19.c and 19.d) 24,340,503 16,270,037

Other liabilities (Note 19.e) 10,626,647 8,374,564

DEFERRED INCOME 414,390 403,606

SHAREHOLDERS' EQUITY (Note 22) 80,634,473 69,651,198

Capital 60,000,000 54,000,000

Local residents 47,063,549 43,136,853

Domiciled abroad 12,936,451 10,863,147

Instruments Qualifying to Common Equity Tier 1 Capital (Note 22.c) 8,100,000 --

Capital Reserves 14,326 10,768

Revaluation Reserves 2,764 4,524

Profit Reserves 25,767,559 23,260,140

Accumulated Other Comprehensive Income (12,567,032) (6,667,188)

(Treasury Shares) (1,629,478) (1,558,272)

Noncontrolling Interests 946,334 601,226

TOTAL LIABILITIES 1,372,861,145 1,269,063,269




half 2015


7

STATEMENT OF INCOME

1st half/2015 1st half/2014

Restated

INCOME FROM FINANCIAL INTERMEDIATION 82,569,981 60,174,862

Loan operations (Note 9.b) 49,676,407 38,104,307

Leasing transactions (Note 9.i) 207,729 276,505

Securities (Note 7.b) 28,420,111 17,699,702

Derivative financial instruments (Note 7.e) 259,766 (552,916)

Foreign exchange results (Note 11.b) 668,576 866,782

Compulsory investments (Note 8.c) 2,385,406 2,886,872

Operations of sale and transfer of financial assets 951,986 893,610

EXPENSES FROM FINANCIAL INTERMEDIATION (71,171,497) (46,135,212)

Deposits and securities sold under repurchase agreements (Note 16.d) (46,063,611) (35,673,945)

Borrowings and onlendings (Note 17.c) (14,085,756) (1,862,714)

Leasing transactions (Note 9.i) (126,452) (210,458)

Operations of sale and transfer of financial assets (15,311) (7,048)

Allowance for loan losses (Notes 9.f and 9.g) (10,880,367) (8,381,047)

INCOME FROM FINANCIAL INTERMEDIATION 11,398,484 14,039,650

OTHER OPERATING INCOME/EXPENSES (6,088,740) (5,983,581)

Service fee income (Note 20.a) 8,251,981 7,632,717

Bank fee income (Note 20.b) 3,320,090 3,034,725

Personnel expenses (Note 20.c) (9,904,674) (8,579,323)

Other administrative expenses (Note 20.d) (7,855,290) (8,133,829)

Tax expenses (Note 23.c) (2,818,878) (1,904,792)

Equity in associates and subsidiaries (Note 13) 3,101,486 513,962

Other operating income (Note 20.e) 5,291,285 6,818,113

Other operating expenses (Note 20.f) (5,474,740) (5,365,154)

OPERATING INCOME 5,309,744 8,056,069

NON-OPERATING INCOME (Note 21) 5,765,812 54,890

Incomes 5,859,821 106,909

Expenses (94,009) (52,019)

PROFIT BEFORE TAXATION AND PROFIT SHARING 11,075,556 8,110,959

INCOME TAX AND SOCIAL CONTRIBUTION (Note 23.a) (991,524) (1,744,038)

EMPLOYEE AND DIRECTORS PROFIT SHARING (1,105,639) (719,896)

NON-CONTROLLING INTERESTS (152,485) (140,851)

NET INCOME 8,825,908 5,506,174

EARNINGS PER SHARE (Note 22.f)

Weighted average number of shares - basic and diluted 2,796,131,188 2,803,466,870

Basic and diluted earnings per share (R$) 3.08 1.99




half 2015


8

STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

E V E N T S

Capital Instruments elegible to

common equity

Capital Reserves

Revaluation reserves

Profit reserves Acumulated other

comprehensive income Treasury shares

Retained earnings

(losses) in

the parent company

Noncontrolling interest

Total Legal

reserve

Statutory reserves

Banco do Brasil

Associate and subsidiary companies

Balances at 12.31.2013 54,000,000 -- 6,023 4,564 4,902,575 15,069,591 (2,965,189) (166,860) (1,324,407) -- 677,482 70,203,779

Accumulated other comprehensive income of securities and derivative

financial instruments, net of taxes -- -- -- -- -- -- (54,504) 89,201 -- -- -- 34,697

Accumulated other comprehensive income - benefit plans, net of taxes

-- -- -- -- -- -- (3,569,836) -- -- -- -- (3,569,836)

Share-based payment transactions -- -- 4,745 -- -- -- -- -- 3,035 -- -- 7,780

Repurchase of shares program -- -- -- -- -- -- -- -- (236,900) -- -- (236,900)

Expired dividends/interest on own capital -- -- -- -- -- -- -- -- -- 7,836 -- 7,836

Realization of revaluation reserve in subsidiary/associated companies (Note 22.d) -- -- -- (40) -- -- -- -- -- 40 -- --

Change in noncontrolling interest -- -- -- -- -- -- -- -- -- -- (76,256) (76,256)

Net income for the period -- -- -- -- -- -- -- -- -- 5,506,174 -- 5,506,174

Unrealized results (Note 22.h) -- -- -- -- -- (59,016) -- -- -- 59,016 -- --

Allocation - Reserves (Note 22.g) -- -- -- 278,259 3,296,342 -- -- -- (3,574,601) -- --

- Dividends (Note 22.g) -- -- -- -- -- (227,611) -- -- -- (216,417) -- (444,028)

- Interest on own capital (Note 22.g) -- -- -- -- -- -- -- -- -- (1,782,048) -- (1,782,048)

Balances at 06.30.2014 54,000,000 -- 10,768 4,524 5,180,834 18,079,306 (6,589,529) (77,659) (1,558,272) -- 601,226 69,651,198

Changes in the period -- -- 4,745 (40) 278,259 3,009,715 (3,624,340) 89,201 (233,865) -- (76,256) (552,581)

Balances at 12.31.2014 54,000,000 8,100,000 10,773 2,805 5,468,217 21,157,294 (9,437,805) (160,035) (1,621,507) -- 855,252 78,374,994

Capital increase – capitalization of reserves 6,000,000 -- -- -- -- (6,000,000) -- -- -- -- -- --

Accumulated other comprehensive income of securities and derivative

financial instruments, net of taxes -- -- -- -- -- -- (519,995) 15,543 -- -- -- (504,452)

Accumulated other comprehensive income - benefit plans, net of taxes

-- -- -- -- -- -- (2,464,740) -- -- -- -- (2,464,740)

Share-based payment transactions -- -- 7,968 -- -- -- -- -- 4,741 -- -- 12,709

Repurchase of shares program -- -- (4,415) -- -- -- -- -- (12,712) -- -- (17,127)

Expired dividends/interest on own capital -- -- -- -- -- -- -- -- -- 3,658 -- 3,658

Realization of revaluation reserve in subsidiary/associated companies (Note 22.d) -- -- -- (41) -- -- -- -- -- 41 -- --

Change in noncontrolling interest -- -- -- -- -- -- -- -- -- -- 91,082 91,082

Net income for the period -- -- -- -- -- -- -- -- -- 8,825,908 -- 8,825,908

Interest on instruments elegible to common equity (Note 22.c) -- -- -- -- -- -- -- -- -- (174,982) -- (174,982)

Unrealized results (Note 22.h) -- -- -- -- -- 44,465 -- -- -- (44,465) -- --

Allocation - Reserves (Note 22.g) -- -- -- -- 430,323 5,928,721 -- -- -- (6,359,044) -- --

- Dividends (Note 22.g) -- -- -- -- -- (1,261,461) -- -- -- (39,046) -- (1,300,507)

- Interest on own capital (Note 22.g) -- -- -- -- -- -- -- -- -- (2,212,070) -- (2,212,070)

Balances at 06.30.2015 60,000,000 8,100,000 14,326 2,764 5,898,540 19,869,019 (12,422,540) (144,492) (1,629,478) -- 946,334 80,634,473

Changes in the period 6,000,000 -- 3,553 (41) 430,323 (1,288,275) (2,984,735) 15,543 (7,971) -- 91,082 2,259,479




half 2015


9

STATEMENT OF CASH FLOWS


Restated

Cash flows from operating activities

Income before taxation and profit sharing 11,075,556 8,110,959

Adjustments to income before taxation and profit sharing (404,578) 11,781,320

Provision for credits, leasing and other credits (Note 9.f and 9.g) 10,880,365 8,381,047

Depreciation and amortization (Note 20.d) 2,023,575 2,337,512

Expenses from impairment (Note 14 and 15) 822 167

Equity in subsidiaries and associates (Note 13.a) (3,101,486) (513,962)

Gain on the disposal of assets (Note 21) (10,904) (20,037)

Gain on the disposal of investments (Note 21) (2,545) (2,114)

Capital (gain) loss (Note 21) (5,731,567) 4,401

Foreign currency exchange results (Note 13.a) 1,462,104 (678,268)

Reversal for devaluation of other assets (Note 21) (311) (7,877)

Amortization of goodwill (Note 13.c and 20.d) 96,038 95,621

Expenses with civil, labor and tax provisions (Note 26.a) 1,468,928 821,023

Adjustment of actuarial assets/liabilities and surplus allocation funds (Note 25) (898,268) (1,153,648)

Effect of changes in foreign exchange rates in cash and cash equivalents (6,267,413) 2,653,560

Non-controlling interests (152,485) (140,851)

Other adjustments (171,431) 4,746

Income adjusted before taxation and profit sharing 10,670,978 19,892,279

Equity variations (5,491,743) (14,011,210)

Increase in short-term interbank investments (40,368,295) (65,159,719)

Decrease in trading securities and derivative financial instruments 3,079,339 7,093,106

Increase in interbank and interdepartmental accounts (2,734,408) (2,376,577)

Decrease in compulsory deposits with Banco Central do Brasil 6,056,622 4,115,193

Increase in loan operations (23,547,055) (34,329,539)

(Increase) Decrease in leasing transactions (140,980) 69,670

(Increase) Decrease in other receivables net of deferred taxes (9,399,059) 5,575,926

Decrease in other assets 58,292 650,676

Income tax and social contribution paid (3,902,565) (1,982,481)

Decrease in deposits (23,139,501) (9,932,304)

Increase in securities sold under repurchase agreements 48,005,494 54,766,444

Increase in funds from acceptance and issuance of securities 40,444,334 27,072,663

Increase in borrowings and onlendings 3,365,598 7,458,874

Decrease in other liabilities (3,258,579) (7,017,437)

Decrease in deferred income (10,980) (15,705)

CASH PROVIDED BY OPERATING ACTIVITIES 5,179,235 5,881,069

Cash flows from investing activities

Increase in securities available for sale (5,330,016) (2,803,861)

Decrease in securities held to maturity 943,835 19,877

Dividends received from associated and subsidiaries companies 1,160,292 800,161

Acquisition of property, plant and equipment in use (443,053) (509,565)

(Acquisition) Disposal of investments 20,257 (89,261)

Acquisition of intangible assets/ deferred assets (394,162) (954,753)

Funds from partnership in the card segment 2,314,674 --

CASH USED IN INVESTING ACTIVITIES (1,728,173) (3,537,402)

Cash flows from financing activities

Change in non-controlling interests 91,082 (76,256)

Increase in subordinated debts 1,729,225 3,930,106

Increase in equity and debt hybrid securities 3,505,038 4,725,802

Acquisition of treasury shares (7,971) (233,865)

Dividends paid (1,512,721) (592,793)

Interest on own capital paid (1,864,728) (1,782,048)

CASH PROVIDED BY FINANCING ACTIVITIES 1,939,925 5,970,946

Net variation of cash and cash equivalents 5,390,987 8,314,613

At the beginning of the period 61,846,481 69,063,244

Effect of changes in foreign exchange rates in cash and cash equivalents 6,267,413 (2,653,560)

At the end of the period 73,504,881 74,724,297

Increase in cash and cash equivalents 5,390,987 8,314,613


Notes to the Consolidated Financial Statements


half 2015


10

1- THE BANK AND ITS OPERATIONS

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

with both public and private shareholders, and is subject to the requirements of Brazilian corporate legislation. It is

headquartered in Setor de Autarquias Norte, Quadra 5, Lote B, Torre I, Edifício Banco do Brasil, Brasília, Distrito

Federal, Brazil. Its purpose is to carry out all asset, liability and accessory banking operations, to provide banking

services, to promote financial intermediation and to originate financial transactions in various forms, including foreign

exchange transactions and supplementary activities, with an emphasis on insurance, private pension, capitalization,

securities brokerage, administration of consortiums, credit/debit cards, investment funds and management portfolios,

and to practice any of the activities permitted for institutions that are part of the National Financial System. It is also

the main financial agent of the Brazilian Federal Government and is therefore required to carry out the functions

attributed to it by law, specifically those of article 19 of Law 4,595/1964.

2- COMPANY RESTRUCTURING

a) Partnership in the card segment

Stelo

On April 16, 2014, the Bank and Bradesco, through its subsidiary Alelo announced the launch of Stelo S.A., a

company in the electronic means of payment business to manage, operate and explore the payment facilitators

segments, focused on electronic commerce (e-commerce) and the digital wallet business.

The services provided by Stelo aim to bring convenience and security to consumers and business establishments,

primarily in the use of payments in e-commerce.

On April 15, 2014, in order to operationalise this project, Alelo signed a Memorandum of Understanding with Cielo in

relation to its future holding in the capital of Stelo.

On June 12, 2015, Aliança Pagamentos e Participações Ltda. (Aliança) acquired 30% of the capital share of Stelo

S.A. (Stelo) through a capital increase and issue of new shares by Stelo. The new structure consolidates the

provisions in the Memorandum of Understanding dated April 15, 2014 between Companhia Brasileira de Soluções e

Serviços (Alelo) and Cielo S.A., controller of Aliança, which main objective is to invest in other companies as a

partner or shareholder.

Taking into account the indirect holding of the Bank in Cielo and in Alelo, through BB Banco de Investimento S.A. and

BB Cartões Participações S.A., respectively, the indirect holding of the Bank in Stelo is 43.62%.

Stelo began its operations in 2015, with the authorization of the authorities and regulators.

BB Elo Cartões and Cielo

On November 19, 2014, the Bank announced to the market that BB Elo Cartões Participações S.A., its wholly-owned

subsidiary, and Cielo S.A. signed on this date the Association Agreement to form a new strategic partnership in the

electronic payment industry.

The equity interest of BB Elo Cartões and Cielo in the Company was authorized by Bacen on December 30, 2014.

The creation of the Company, arising from the Partnership, was regarded as permitted under the Conselho

Administrativo de Defesa Econômica (CADE), after expiry of the period laid down in article 65 of Law 12,529/2011,

went on without any appeals or avocation of the case by the Administrative Court.

On February 27, 2015, after approval by the relevant regulators, supervisors and inspection, and subject to the

fulfillment of all contractual conditions precedent to the closing of the transaction, BB Elo Cartões and Cielo

completed the formation of the strategic partnership, forming a new company called Cateno Gestão de Contas de

Pagamento S.A. (Cateno).




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Under the terms of the Agreement, the new company has the right, transferred by BB Elo Cartões, to exploit the

activities of management of post-paid accounts transactions and management of the functionality of purchasing via

debit of its payment arrangements. In addition, the new deal aims, among its objectives, to perform associations with

other partners in order to leverage opportunities related to the electronic payment niche market, seeking to obtain

synergy gains and optimizing the structuring of new businesses in the segment.

The injection of this intangible asset to Cateno’s shareholders’ equity represented R$ 11,572,000 thousand,

according to the technical report of appraisal performed by an independent company. In return, and for equalization

of the intended equity interests, Cateno gave to BB Elo Cartões R$ 4,640,951 thousand in cash, related to the

payment of taxes on the operation, and R$ 3,459,449 thousand in debentures from Cielo. The amount of 3,471,600

thousand was kept to compose the equity interest of BB Elo Cartões in Cateno.

The total capital was divided in the proportion of 30.00% for BB Elo Cartões and 70.00% for Cielo. However, taking

into account the indirect holding of the Bank in Cielo, through BB Banco de Investimento S.A., the total indirect

holding of the Bank in Cateno was distributed as follows:

Holding of the Bank - % Common shares (ON) Preferred shares (PN) Total

Total Capital 42.27 100.00 50.13

Due to the conclusion of the transaction, the amount of R$ 3,211,700 thousand impacted the Bank's results in the

first half 2015, as shown in the table below:

1) BB Elo Cartões’ capital gain 11,572,000

2) Taxes (4,640,951)

3) Effect in BB Elo Cartões’ income, net of tax effects (1+2) 6,931,049

4) Unrealized result (50.13% of item 3) (3,474,189)

5) Effect in the Consolidated income (3+4) 3,456,860

6) Profit sharing, net of tax effects (245,160)

7) Effect in the Consolidated net income (5+6) 3,211,700

3 - PRESENTATION OF FINANCIAL STATEMENTS

The consolidated financial statements of the Prudential Conglomerate have been prepared with the specific purpose

of meeting the requirements of the Conselho Monetário Nacional (CMN) and the Banco Central do Brasil (Bacen) by

CMN Resolution 4,280 dated October 31, 2013 and Bacen Circular 3,701 dated March 13, 2014, which determine the

scope of consolidation, restricted to financial institutions and similar companies. These should not be confused with

other consolidated financial statements of the Bank, which are subject to other regulations of the CMN, Bacen, as

well as the Brazilian Corporate Law and the Comissão de Valores Mobiliários (CVM).

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

financial institutions, requires that Management use judgment in the determination and recording of accounting

estimates, when applicable. Significant assets and liabilities subject to these estimates and assumptions include: the

residual value of property and equipment, the allowance for loan losses, deferred tax assets, provision for labor, civil

and tax demands, appreciation of financial instruments, assets and liabilities relating to post-employment benefits

and other provisions. The final amounts of transactions involving these estimates are only known upon their

settlement.

The consolidated financial statements of the Prudential Conglomerate include the operations of the Bank performed

by their branches, domestic and abroad, of controlled financial institutions and similar companies, domestic and

abroad, including joint ventures (except Banco Votorantim), which the Bank controls directly or indirectly.

In relation to requirements of CMN Resolution 4,280 dated October 31, 2013 and Bacen Circular 3,701 dated March

13,2014, the following entities are considered similar to financial institutions: the consortium managers, payment

institutions, companies responsible for acquisition of loans operations, including real estate, or credit rights, for



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12

example the factoring companies, securitization companies and corporation of exclusive object, and other legal

entities headquartered in the country whose exclusive purpose is the equity interest in the entities mentioned above.

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

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

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

shareholders’ equity and income were separately disclosed in the financial statements. The balances of balance

sheet and income accounts of ownership interest whose control is shared with other shareholders were consolidated

proportionally to the ownership held in the capital of the investee.

The Comitê de Pronunciamentos Contábeis (CPC) is responsible for issuing accounting standards and

interpretations, based on international accounting standards. Bacen adopted the following pronouncements of the

CPC, applied by the Bank, as applicable: CPC 00 – Framework, CPC 01 – Impairment of Assets, CPC 03 –

Statement of Cash Flows, CPC 05 – Related Party Disclosures, CPC 10 – Share-Based Payment, CPC 23 –

Accounting Policies, Changes in Accounting Estimates and Errors, CPC 24 – Events After the Reporting Period and

CPC 25 – Provisions, Contingent Liabilities and Contingent Assets and CPC 33 – Employee Benefits.

Additionally, Bacen issued CMN Resolution 3,533/2008 dated January 31, 2008, which became effective in January,

2012, and established procedures for classification, accounting and disclosure of sale and transfer transactions

related to financial assets. This Resolution establishes the criteria for the write-off of financial assets as specified in

the CPC 38 – Financial Instruments: Recognition and Measurement.

These financial statements were approved by the Executive Board of Directors on August 25, 2015.



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Equity interests included in the Prudential Conglomerate consolidated financial statements, in accordance with CMN Resolution 4,280, dated October 31, 2013:

Activity Jun 30, 2015 Jun 30, 2014

% of Total Share

Financial Institutions

Banco do Brasil - AG (1) Banking 100.00% 100.00%

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

BB Leasing S.A. - Arrendamento Mercantil (1) Leasing 100.00% 100.00%

BB Securities Asia Pte. Ltd. (1) Broker 100.00% 100.00%

Banco do Brasil Securities LLC. (1) Broker 100.00% 100.00%

BB Securities Ltd. (1) Broker 100.00% 100.00%

BB USA Holding Company, Inc. (1) Holding 100.00% 100.00%

Brasilian American Merchant Bank (1) Banking 100.00% 100.00%

Banco do Brasil Americas (1) Banking 100.00% 100.00%

Besc Distribuidora de Títulos e Valores Mobiliários S.A. (1) Asset management 99.62% 99.62%

Banco Patagonia S.A. (1) Banking 58.96% 58.96%

BB Banco de Investimento S.A. (1) Investment Bank 100.00% 100.00%

BB Gestão de Recursos-Distribuidora de Títulos e Valores Mobiliários S.A. (1) Asset management 100.00% 100.00%

Consortium Manager

BB Administradora de Consórcios S.A. (1) Consortium 100.00% 100.00%

Payment Institutions

BB Administradora de Cartões de Crédito S.A. (1) Rendering Service 100.00% 100.00%

Cateno Gestão de Contas de Pagamento S.A. (2) (3) Rendering Service 50.13% --

Companhia Brasileira de Soluções e Serviços CBSS - Alelo (2) Rendering Service 49.99% 49.99%

Stelo S.A. (2) (4) Rendering Service 43.62% --

Cielo S.A. (2) Rendering Service 28.76% 28.76%

Braspag Tecnologia em Pagamento Ltda. (2) (4) Rendering Service 28.76% --

Merchant e-Solutions (2) (4) Rendering Service 28.76% --

Paggo Soluções e Meios de Pagamento S.A . (2) (4) Rendering Service 14.38% --

Securitization Companies

Ativos S.A. Securitizadora de Créditos Financeiros (1) Credits acquisition 100.00% 100.00%

Companhia Brasileira de Securitização - Cibrasec (5) Credits acquisition -- 12.12%

Other

Aliança Pagamentos e Participações Ltda. (2) (4) Holding 28.76% --

BB Elo Cartões Participações S.A. (1) (4) Holding 100.00% --

Elo Holding Financeira (2) (4) Holding 49.99% --

Farly Participações Ltda. (2) (4) Holding 49.99% --

(1) Subsidiaries.

(2) Joint ventures proportionately included in consolidation.

(3) The Bank holds the joint control on Cielo, which in turn controls the Cateno. The percentage of participation of the Bank in Cateno takes into account its direct interest in the BB Elo, as well as indirect interest in Cielo through BB Banco de Investimento, as shown in Note 2.a.

(4) Consolidated companies since June/2015.

(5) Associated company excluded from the Prudential Conglomerate, since June 30, 2015, as Bacen’s determination.

Information for comparability purposes

On June 30, 2014, Banco Votorantim was proportionally consolidated in the Prudential Conglomerate of the Bank.

Since June 30, 2015, this investment has been accounted for by the equity method, and it was excluded from the

Prudential Conglomerate Financial Statements, as determined by Bacen, under the terms of article 8 of Resolution

CMN 4,280/2013.

Thus, amounts related to the half ended June 30, 2014 are restated retrospectively as CPC 23 - Accounting Policies,

Changes in Accounting Estimates and Errors. Restated balances are shown below:



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Balance Sheet

Jun 06, 2014 Original report Adjustments Restated balances

Current Assets and e Non-Current Assets 1,280,017,959 (39,587,602) 1,240,430,357

Cash and Cash Equivalents 11,500,115 (58,450) 11,441,665

Short-term Interbank Investments 297,420,099 (1,093,294) 296,326,805

Securities and Derivative Financial Instruments 120,790,145 (14,923,089) 105,867,056

Interbank Accounts and Interdepartmental Accounts 97,374,831 (54,979) 97,319,852

Loan Operations and Leasing transactions 586,064,503 (23,758,396) 562,306,107

Other Receivables 165,665,993 818,691 166,484,684

Other Assets 1,202,273 (518,085) 684,188

Permanent Assets 25,942,845 2,690,067 28,632,912

Investments 6,919,913 3,363,158 10,283,071

Property and Equipment 6,741,962 (44,699) 6,697,263

Property and equipment by leases 1,757,487 (816,932) 940,555

Intangible 10,475,752 200,208 10,675,960

Deferred 47,731 (11,668) 36,063

TOTAL ASSETS 1,305,960,804 (36,897,535) 1,269,063,269

Current Liabilities and Long-Term Liabilities 1,235,893,454 (36,884,989) 1,199,008,465

Deposits 479,999,603 (2,644,521) 477,355,082

Securities Sold Under Repurchase Agreements 291,004,630 (11,004,185) 280,000,445

Funds from Acceptance and Issuance of Securities 149,362,282 (11,734,709) 137,627,573

Interbank Accounts 5,183,513 (1,209) 5,182,304

Interdepartmental Accounts 3,928,855 (21,681) 3,907,174

Borrowings 18,368,524 (802,010) 17,566,514

Domestic Onlending - Official Institutions 93,019,520 (2,028,067) 90,991,453

Foreign Onlending 477 -- 477

Derivative Financial Instruments 3,770,728 (598,490) 3,172,238

Other Liabilities 191,255,322 (8,050,117) 183,205,205

DEFERRED INCOME 416,152 (12,546) 403,606

SHAREHOLDERS' EQUITY 69,651,198 -- 69,651,198

TOTAL LIABILITIES 1,305,960,804 (36,897,535) 1,269,063,269



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Statement of Income

1st half/2014 Original Report Adjustments Restated balances

INCOME FROM FINANCIAL INTERMEDIATION 63,836,160 (3,661,298) 60,174,862

Loan operations 41,122,950 (3,018,643) 38,104,307

Leasing transactions 679,693 (403,188) 276,505

Securities 18,662,546 (962,844) 17,699,702

Derivative financial instruments (724,596) 171,680 (552,916)

Foreign exchange results 862,635 4,147 866,782

Compulsory investments 2,887,011 (139) 2,886,872

Operations of sale and transfer of financial assets 345,921 547,689 893,610

EXPENSES FROM FINANCIAL INTERMEDIATION (48,886,781) 2,751,569 (46,135,212)

Deposits and securities sold under repurchase agreements (37,188,788) 1,514,843 (35,673,945)

Borrowings and onlendings (1,919,119) 56,405 (1,862,714)

Leasing transactions (606,041) 395,583 (210,458)

Operations of sale and transfer of financial assets (5,967) (1,081) (7,048)

Allowance for loan losses (9,166,866) 785,819 (8,381,047)

--

INCOME FROM FINANCIAL INTERMEDIATION 14,949,379 (909,729) 14,039,650

--

OTHER OPERATING INCOME/EXPENSES (6,878,602) 895,021 (5,983,581)

Service fee income 7,735,861 (103,144) 7,632,717

Bank fee income 3,167,505 (132,780) 3,034,725

Personnel expenses (8,960,282) 380,959 (8,579,323)

Other administrative expenses (8,420,439) 286,610 (8,133,829)

Tax expenses (2,002,344) 97,552 (1,904,792)

Equity in associates and subsidiaries 355,273 158,689 513,962

Other operating income 7,179,546 (361,433) 6,818,113

Other operating expenses (5,933,722) 568,568 (5,365,154)

OPERATING INCOME 8,070,777 (14,708) 8,056,069

NON-OPERATING INCOME 125,768 (70,878) 54,890

Incomes 190,725 (83,816) 106,909

Expenses (64,957) 12,938 (52,019)

PROFIT BEFORE TAXATION AND PROFIT SHARING 8,196,545 (85,586) 8,110,959

INCOME TAX AND SOCIAL CONTRIBUTION (1,775,284) 31,246 (1,744,038)

EMPLOYEE AND DIRECTORS PROFIT SHARING (774,236) 54,340 (719,896)

NON-CONTROLLING INTERESTS (140,851) -- (140,851)

NET INCOME 5,506,174 -- 5,506,174

Statement of Cash Flows

1st half/2014 Original Report Adjustments Restated balances

Cash provided by operating activities 1,936,222 3,944,847 5,881,069

Cash used in investing activities (1,495,602) (2,041,800) (3,537,402)

Cash provided by financing activities 6,129,975 (159,029) 5,970,946

Net variation of cash and cash equivalents 6,570,595 1,744,018 8,314,613



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4 - DESCRIPTION OF SIGNIFICANT ACCOUNTING POLICIES

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

financial statements and applied to all the consolidated companies.

a) Statement of income

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

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

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

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

converted at the reporting date using current rates.

b) Present value measurement

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

recognition of their interest income and expenses.

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

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

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

c) Cash and cash equivalents

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

investments in repurchase agreements – own resources, interbank deposits and investments in foreign currencies,

with high liquidity and insignificant risk of change in fair value, with maturity at time of acquisition not exceeding 90

days.

d) Short-term interbank investments

Short-term interbank investments are recorded at their investment or acquisition amount, plus income accrued up to

the balance sheet date and adjustments for allowance for losses.

e) Securities

The securities purchased for the Bank's portfolio are recorded at the actual amount paid, including brokerage charges

and fees, and are classified based on management’s intention, in one of three categories, according to Bacen

Circular 3,068/2001:

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

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

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

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

recorded, net of tax effects, in Accumulated Other Comprehensive Income in Shareholders' Equity;

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

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

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

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

consider the average price of trading on the day of calculation or, if not available, the daily adjustment of future

market transactions reported by Anbima, BM&FBovespa or the net expected realizable value obtained through

pricing models, using future interest rate curves, foreign exchange rates, and price and currency indices, all

consistent with prices adopted during the year.



half 2015


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

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

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

period.

Impairment of securities classified as available for sale and held to maturity, if considered not to be temporary, are

recorded directly in expense for the period and a new cost basis for the asset is determined.

Upon sale, the difference between the sale amount and the cost of purchase plus accrued income is considered as a

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

f) Derivative financial instruments

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

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

The mark-to-market methodology used for derivative financial instruments was established following consistent and

verifiable criteria, which consider the average price of trading on the date of calculation or, if not available, pricing

models that estimate the expected net realizable value, or the price of a similar financial instrument, considering at

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

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

financial asset or liability market values are considered hedge instruments and are classified according to their

nature:

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

recorded in income/expense accounts for the period;

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

classified in this category are recorded, net of tax effects, in Accumulated Other Comprehensive Income in

Shareholders' Equity. The effective amount is that in which the variation of the hedged item, directly related to the

corresponding risk, is offset by the variation in the financial instrument used for the hedge, considering the

accumulated effect of the transaction. Other variations in these instruments are recorded directly in the statement of

income for the period.

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

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

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

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

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

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

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

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

2,682/1999.

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

when effectively received.

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

allowance.

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

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

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

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

level, according to CMN Resolution 2,682/1999.



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

the aforementioned CMN Resolution 2,682/1999 (Note 9.e).

h) Taxes

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

Taxes Rate

Income Tax (15% + additional 10%) 25%

Social Contribution on Net Income (CSLL) (1)

15%

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

0.65%

Contribution to Social Security Financing - (Cofins) (2)

4%

Tax on services of any kind - (ISSQN) Up to 5%

(1) Rate applied to financial companies. For similar to financial institutions the CSLL rate is 9%.

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

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

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

established criteria by CMN Resolution 3,059/2002, amended by CMN Resolutions 3,355/2006 and 4,192/2013, and

they are supported by a study of their realizability.

i) Prepaid expenses

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

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

j) Permanent assets

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

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

control are accounted for by the equity method based on the shareholders’ equity of the subsidiary or associates.

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

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

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

The statements of the branches and subsidiaries abroad are adapted to the prevailing accounting criteria in Brazil

and translated into Brazilian Reais using current exchange rates, in conformity with Bacen Circulars 2,397/1993 and

2,571/1995, and their impacts are recorded in the statement of income for the period.

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

Property and equipment: property and equipment are stated at cost less depreciation, calculated using the straight-

line method at the following annual rates: buildings and improvements - 4%; vehicles - 20%; data processing systems

- 20% and others - 10% (Note 14).

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

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

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

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

values in deferred assets are not recorded, according with Resolution CMN 3,617/2008.

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

acquired goodwill.



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

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

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

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

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

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

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

financial study; software, amortized on a straight-line basis at a rate of 10% per year from the date it is available for

use. Intangible assets are adjusted by allowance for impairment losses, if applicable (Note 15). The amortization of

intangible assets is recorded in the Other Administrative Expenses account.

k) Impairment of non-financial assets

At the end of each reporting period, the Bank assesses whether there is any indication that a non-financial asset may

be impaired based on internal and external sources of information. If there is an indication that an asset may be

impaired, the Bank estimates the recoverable amount of the asset. The recoverable amount of the asset is the higher

of: i) its fair value less costs to sell it; and ii) its value in use.

The Bank tests, at least annually, the recoverable amount of intangible assets not yet available for use and goodwill

on acquisition of investments, regardless whether there is an indication of impairment or not. This test can be applied

any time during the year, provided it is performed at the same period every year.

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

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

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

Property and Equipment in Use

Land and buildings - in determining the recoverable amount of land and buildings, technical assessments are carried

out in accordance with the rules of the Brazilian Association of Technical Standards - ABNT.

Data processing systems - in determining the recoverability, the market value is considered, if it is available, or the

recoverable value for use in the operations of the Bank. Otherwise the calculation considers the projection of cash

flows arising from the use of each asset during its useful life, discounted to present value based on the rate of the

Interbank Deposit Certificate - CDI.

Other assets - although they are subject to impairment testing, other assets have little value individually and, given

the cost-effectiveness, the Bank does not assess the recoverable value of these items individually. However, the

Bank conducts inventory each year, and lost or damaged goods are properly derecognized.

Investments and Goodwill on acquisition of investments

The methodology for calculating the recoverable amount of goodwill and investments for future profitability consists of

measuring the expected result of the investment using discounted cash flow (DCF). To measure this result, the

assumptions made are based on (i) operational projections, results and investment plans, (ii) macroeconomic

scenarios developed by the Bank, and (iii) internal methodology for calculating the cost of capital based on the

Capital Asset Pricing Model - CAPM.

Intangible

Rights to Managing Payrolls - The model for assessing the recoverable amount of the rights to managing payroll

involves monitoring contracts performance, that are calculated from the contribution margins of customer relationship

related to each contract in order to check if the projections that justified the acquisition of assets match the observed

performance. For the contracts that do not achieve the expected performance levels, a provision for impairment loss

is recognized.



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Software - Software, substantially developed by the Bank in accordance with its needs, constantly receives

investments for modernization and adaptation to new technologies and business requirements. Considering that

there are no similar products on the market and considering the high cost to deploy metrics that allow calculation of

its value in use, the impairment test for software evaluates its usefulness to the company so that when software is

retired, its value is derecognized.

Goodwill on acquisition of merged company - The methodology for calculating the recoverable amount of goodwill on

the acquisition of Banco Nossa Caixa, merged into Banco do Brasil in November 2009, is to compare the value of the

goodwill paid, less the accumulated amortization, with the present value of the results of the Bank estimated for the

state of São Paulo, discounting the assets with finite useful lives. The projections are derived from the observed

results and assumptions of profitability growth for the Bank and are discounted at the rate of cost of capital calculated

using an internal methodology, based on Capital Asset Pricing Model – CAPM.

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

the respective notes.

l) Employee benefits

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

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

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

Employee benefits, approved by CVM Resolution 695/2012 (Note 25) and by the Resolution CMN 4,424/2015. The

evaluations are performed semiannually.

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

Accordingly, cost accounting is based on each period's contribution amount representing the Bank's obligation.

Consequently, no actuarial calculation is required when measuring the obligation or expense, and there are neither

actuarial gains nor losses.

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

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

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

obligation exceeds the value of plan assets, or an asset when the amount of assets exceeds the value of plan

obligations. In the latter instance, the asset should be recorded only when there is evidence that it can effectively

reduce the contributions from the sponsor or will be refundable in the future.

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

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

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

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

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

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

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

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

The actuarial asset recognized in the balance sheet (Note 25) refers to the actuarial gains and it will be settled by the

end of the plan. Along the life of the plan there may be partial realization of the actuarial assets, if the requirements of

the Supplementary Law 109/2001 and Resolution CGPC 26/2008 are met.

m) Deposits and Securities Sold Under Repurchase Agreements

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

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



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n) Provisions, Contingent assets and liabilities and legal obligations

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

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

approved by CMN Resolution 3,823/2009 (Note 26).

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

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

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

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

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

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

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

Aggregated Method - cases that are similar and recurring in nature and whose values are not considered relevant.

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

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

to R$ 1 million.

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

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

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

classification and the risk of loss of legal actions.

Contingent liabilities, individually measured, considered as possible losses are not recognized in the financial

statements, they are disclosed in notes, while those classified as remote do not require provisioning or disclosure.

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

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

statements.

o) Debt Instrument Issue Expense

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

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

p) Other Assets and Liabilities

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

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

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

variations on a pro rata die basis.

q) Earnings per share

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

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

to shareholders by the weighted average number of total common shares, excluding treasury shares (Note 24.f). The

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

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



half 2015


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5 - CASH AND CASH EQUIVALENTS

Jun 30, 2015 Jun 30, 2014

Cash and Cash Equivalents 16,723,436 11,441,665

Local currency 9,984,210 9,406,688

Foreign currency 6,719,260 2,017,394

Investments in gold 19,966 17,583

Interbank Investments (1)

56,781,445 63,282,632

Open market investments - sales pending settlement - held position 20,782,856 25,543,665


Foreign currency 76 --

Total 73,504,881 74,724,297

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

6 - SHORT-TERM INTERBANK INVESTMENTS

a) Breakdown

Jun 30, 2015 Jun 30, 2014

Open Market Investments 312,582,589 255,177,045

Reverse repos - Own Resources 20,981,565 26,884,241

Treasury Financial Bills 725,303 23,150,935

National Treasury Bills 19,297,793 1,934,706

National Treasury Notes -- 1,650,259

Other Securities 958,469 148,341

Reverse repos - Financed Position 291,601,024 228,292,804

Treasury Financial Bills 37,581,264 70,683,386


National Treasury Notes 118,867,312 61,723,693

Other Securities 157,418 109,226

Interbank Deposits 38,546,527 41,149,760

Total 351,129,116 296,326,805

Current assets 350,102,410 294,094,641

Non-current assets 1,026,706 2,232,164

b) Income from Short-term Interbank Investments


Income from Open Market Investment 18,274,186 12,508,508

Own resources 1,330,620 1,093,926

Financed position 16,943,566 11,414,582

Income from Investiments in Interbank Deposits 156,585 200,948

Total 18,430,771 12,709,456



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7- SECURITIES AND DERIVATIVE FINANCIAL INSTRUMENTS

a) Securities

a.1) Breakdown of the portfolio by category, type of bonds and maturity

Maturity in Days

Jun 30, 2015 Jun 30, 2014

Market Value Total Total

Without maturity 0 to 30 31 to 180 181 to 360 More than 360 Cost value Market value Mark to Market Cost value Market value Mark to Market

1 - Trading securities 406,234 640,554 3,145,303 1,102,532 3,142,257 8,365,881 8,436,880 70,999 11,919,979 11,948,421 28,442

Federal Government Bonds 113,606 639,985 3,110,856 1,092,031 3,021,951 7,909,277 7,978,429 69,152 10,823,348 10,834,642 11,294

Treasury Financial Bills -- -- 394,432 -- 759,757 1,154,655 1,154,189 (466) 2,337,647 2,337,567 (80)

National Treasury Bills -- 51,574 14,972 430,491 1,108,549 1,649,605 1,605,586 (44,019) 6,671,967 6,608,447 (63,520)

National Treasury Notes -- -- -- -- 244,576 246,999 244,576 (2,423) 51,046 49,126 (1,920)

Brazilian foreign debt securities -- -- -- -- 67,584 70,101 67,584 (2,517) 49,747 49,055 (692)

Foreign Government bonds 113,606 588,411 2,691,792 661,479 789,976 4,726,280 4,845,264 118,984 1,666,153 1,743,940 77,787

Other -- -- 9,660 61 51,509 61,637 61,230 (407) 46,788 46,507 (281)

Corporate Bonds 292,628 569 34,447 10,501 120,306 456,604 458,451 1,847 1,096,631 1,113,779 17,148

Debentures -- -- -- -- 51,283 52,807 51,283 (1,524) 54,931 53,611 (1,320)

Shares in Investment funds 276,376 -- -- -- -- 265,633 276,376 10,743 879,969 870,355 (9,614)

Shares 51 -- -- -- -- 29 51 22 2,702 19,569 16,867

Certificate of deposit -- -- 1,623 -- -- 1,623 1,623 -- 48,004 48,045 41

Eurobonds -- -- 32,295 10,501 51,864 104,243 94,660 (9,583) 99,192 98,890 (302)

Financial bills -- -- -- -- -- -- -- -- 9,116 10,463 1,347

Other 16,201 569 529 -- 17,159 32,269 34,458 2,189 2,717 12,846 10,129

2 - Available for sale securities 1,479,049 1,717,689 3,025,789 9,163,262 83,113,934 100,442,287 98,499,723 (1,942,564) 93,409,862 92,637,761 (772,101)

Federal Government Bonds 70,333 649,840 1,542,211 4,966,221 45,885,168 53,714,240 53,113,773 (600,467) 44,958,914 44,733,627 (225,287)

Treasury Financial Bills -- -- 884,523 -- 32,713,962 33,603,060 33,598,485 (4,575) 23,104,121 23,105,010 889

National Treasury Bills -- 649,669 289,829 893,491 3,297,871 5,244,006 5,130,860 (113,146) 6,469,431 6,376,371 (93,060)

National Treasury Notes -- -- -- -- 3,621,641 4,001,669 3,621,641 (380,028) 3,729,334 3,380,035 (349,299)

Agricultural debt securities -- 171 1,139 494 4,044 6,112 5,848 (264) 7,763 7,457 (306)

Brazilian foreign debt securities -- -- -- -- 3,009,328 3,105,863 3,009,328 (96,535) 3,630,970 3,763,264 132,294

Foreign Government bonds -- -- 366,720 4,072,236 2,554,747 7,005,132 6,993,703 (11,429) 7,637,454 7,686,530 49,076

Other 70,333 -- -- -- 683,575 748,398 753,908 5,510 379,841 414,960 35,119

Corporate Bonds 1,408,716 1,067,849 1,483,578 4,197,041 37,228,766 46,728,047 45,385,950 (1,342,097) 48,450,948 47,904,134 (546,814)

Debentures -- 100,004 486,543 2,942,567 31,375,091 35,330,363 34,904,205 (426,158) 36,120,147 36,013,930 (106,217)

Promissory notes -- 92,773 145,766 667,988 -- 900,365 906,527 6,162 1,478,312 1,473,770 (4,542)

Credit Notes -- -- -- -- 49,889 52,045 49,889 (2,156) 54,026 48,875 (5,151)

Shares in Investment funds 1,408,011 775,843 99,914 154,221 2,778,794 5,864,499 5,216,783 (647,716) 4,260,122 3,828,653 (431,469)

Shares 705 -- -- -- -- 810 705 (105) 810 631 (179)

Rural Product Bills - Commodities -- 98,861 583,156 344,103 5,057 1,034,285 1,031,177 (3,108) 1,566,776 1,563,294 (3,482)

Certificate of deposit -- -- -- -- 15,051 15,058 15,051 (7) 6,822 7,572 750

Certificates of Agribusiness Credit Rights -- -- 7,277 -- -- 7,218 7,277 59 21,597 22,022 425

Financial bills -- -- 66,768 -- 18,981 86,099 85,749 (350) 1,720,086 1,696,379 (23,707)

Real Estate Receivables Certificates -- -- -- -- 479,316 487,306 479,316 (7,990) -- -- --

Other -- 368 94,154 88,162 2,506,587 2,949,999 2,689,271 (260,728) 3,222,250 3,249,008 26,758



half 2015


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Maturity in Days

Jun 30, 2015 Jun 30, 2014



3 - Held to maturity securities -- 1,798 898 227 2,681,567 2,843,780 2,684,490 (159,290) 508,153 344,069 (164,084)

Federal Government Bonds -- -- -- -- -- -- -- -- 152,907 152,903 (4)

Treasury Financial Bills -- -- -- -- -- -- -- -- 88,215 88,031 (184)

Brazilian foreign debt securities -- -- -- -- -- -- -- -- 64,692 64,872 180

Corporate Bonds -- 1,798 898 227 2,681,567 2,843,780 2,684,490 (159,290) 355,246 191,166 (164,080)

Debentures -- -- -- -- 2,483,577 2,483,577 2,483,577 -- -- -- --

Certificate of deposit -- -- -- -- 18,465 18,465 18,465 -- 36,036 36,036 --

Real Estate Receivables Certificates -- -- 898 -- 172,666 332,854 173,564 (159,290) 312,919 148,839 (164,080)

Other -- 1,798 -- 227 6,859 8,884 8,884 -- 6,291 6,291 --

Total 1,885,283 2,360,041 6,171,990 10,266,021 88,937,758 111,651,948 109,621,093 (2,030,855) 105,837,994 104,930,251 (907,743)

a.2) Breakdown of the portfolio by financial statement classification and maturity date

Maturity in Days

Jun 30, 2015 Jun 30, 2014



Total by portfolio 1,885,283 2,360,041 6,171,990 10,266,021 88,937,758 111,651,948 109,621,093 (2,030,855) 105,837,994 104,930,251 (907,743)

Own portfolio 1,867,706 1,436,307 5,094,052 9,742,059 70,100,478 86,052,835 88,240,602 2,187,767 44,325,511 50,115,827 5,790,316

Subject to repurchase agreements 17,577 147,872 954,667 523,958 13,626,932 19,486,731 15,271,006 (4,215,725) 54,704,969 48,015,723 (6,689,246)

Deposits with Banco Central do Brasil -- -- -- -- -- -- -- -- 29 16 (13)

Pledged in guarantee -- 775,862 123,271 4 5,210,348 6,112,382 6,109,485 (2,897) 6,807,485 6,798,685 (8,800)

a.3) Breakdown of the portfolio by category and maturity in years

Maturity in years

Jun 30, 2015 Jun 30, 2014


Without maturity Due in up to one year Due from 1 to 5 years Due from 5 to 10

years Due after 10 years Cost value Market value Cost value Market value

Total by category 1,885,283 18,798,052 49,426,790 36,311,451 3,199,517 111,651,948 109,621,093 105,837,994 104,930,251

1 - Trading securities 406,234 4,888,389 2,638,604 382,273 121,380 8,365,881 8,436,880 11,919,979 11,948,421

2 - Available for sale securities 1,479,049 13,906,740 46,788,186 33,426,710 2,899,038 100,442,287 98,499,723 93,409,862 92,637,761

3 - Held to maturity securities -- 2,923 -- 2,502,468 179,099 2,843,780 2,684,490 508,153 344,069



half 2015


25

a.4) Summary of the portfolio by financial statement classification

Jun 30, 2015 Jun 30, 2014

Book value Book value

Current Non-current Total Current Non-current Total

Total by portfolio 27,056,890 82,723,493 109,780,383 35,260,004 69,834,331 105,094,335

Own portfolio 23,825,592 64,658,748 88,484,340 21,857,268 24,452,263 46,309,531

Subject to repurchase agreements 2,317,403 12,869,155 15,186,558 10,690,645 41,295,381 51,986,026

Deposits with Banco Central do Brasil -- -- -- 16 -- 16

Pledged in guarantee 913,895 5,195,590 6,109,485 2,712,075 4,086,687 6,798,762

a.5) Summary of the portfolio by category

Jun 30, 2015 Jun 30, 2014

1 - Trading securities 8,436,880 8% 11,948,421 11%

2 - Available for sale securities 98,499,723 90% 92,637,761 88%

3 - Held to maturity securities 2,843,780 2% 508,153 1%

Portfolio book value 109,780,383 100% 105,094,335 100%

Mark to market - held to maturity (159,290) -- (164,084) --

Portfolio market value 109,621,093 -- 104,930,251 --

b) Income from operations with securities


Short-term Interbank Investments (Note 6.b) 18,430,771 12,709,456

Fixed-income securities 6,568,286 4,957,232

Variable-income securities 3,421,054 33,014

Total 28,420,111 17,699,702

c) Reclassification of securities

There was no reclassification of securities in the halfs ended June 30, 2015 and June 30, 2014.

d) Derivative financial instruments

The Bank uses derivative financial instruments to manage, at the consolidated level, its positions and to meet clients'

needs, classifying its own positions as hedge (market risk and cash flow risk) and trading, both within limits approved

by committees of the Bank. The hedge strategy of the equity positions is in line with macroeconomic analyses and is

approved by the Executive Board of Directors.

In the options market, active or long positions have the Bank as holder, while passive or short positions have the

Bank as writer.

The models used to manage risks with derivatives are reviewed periodically and the decisions made follow the best

risk/return relationship, estimating possible losses based on the analysis of macroeconomic scenarios.

The Bank uses tools and systems to manage the derivatives. Trading in new derivatives, standardized or not, is

subject to a prior risk analysis.

Risk analysis of the subsidiaries is undertaken on an individual basis and its risk management is done on a

consolidated basis.

The Bank uses statistical methods and simulations to measure the risks of its positions, including derivatives, using

models of values at risk sensibility and stress analysis.



half 2015


26

Risks

The main risks inherent to derivative financial instruments, resulting from the business dealings of the bank and its

subsidiaries are credit, market, liquidity and operational risks.

Credit risk is the exposure to loss in the event of default by a counterparty to a transaction. The credit exposure in

futures contracts is minimized due to daily settlement in cash. The swap contracts, recorded in Cetip are subject to

credit risk if the counterparty is not able or willing to perform its contractual obligations, while the swap contracts

registered in the BM&FBovespa are not subject to the same risk, given that the Bank operations have the stock

exchange as guarantor.

Total credit exposure from swaps is R$ 601,082 thousand on June 30, 2015 (R$ 508,717 thousand on December 31,

2014 and R$ 588,132 thousand on June 30, 2014).

Market risk is the possibility of losses caused by changes in interest rates, exchange rates, stock prices and

commodity prices.

Market liquidity risk is the possibility of loss resulting from the inability to perform a transaction within a reasonable

time and without significant loss of value due to the size of the transaction compared to the volume usually traded.

Operational risk denotes the probability of financial losses resulting from failures or inadequacy of people, processes

and systems, or factors such as catastrophes or criminal activities.



half 2015


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d.1) Breakdown of the Portfolio of Derivatives for Trading by Index

By Index Jun 30, 2015 Jun 30, 2014

Notional value Cost value Market value Notional value Cost value Market value

Future Contracts

Purchase commitments 6,303,347 -- -- 4,810,099 -- --

Interbank Deposits 2,875,966 -- -- 272,633 -- --

Currencies 3,426,611 -- -- 4,510,679 -- --

On-shore USD rates -- -- -- 22,016 -- --

Commodities 770 -- -- 4,771 -- --

Sales commitments 1,773,464 -- -- 4,749,731 -- --

Interbank Deposits 1,054,228 -- -- 4,217,364 -- --

Currencies 437,293 -- -- -- -- --

T-Note 242,795 -- -- -- -- --

Bovespa Index 1,883 -- -- -- -- --

On-shore USD rates -- -- -- 266,792 -- --

Libor -- -- -- 145,309 -- --

Commodities 37,265 -- -- 64,660 -- --

SCC (1) -- -- -- 55,606 -- --

Forward operations

Asset position 7,928,254 638,251 750,729 6,456,495 376,762 255,528

Term securities 92,500 92,500 92,500 -- -- --

Term currencies 7,808,145 538,619 648,460 6,392,446 367,999 224,591

Term commodities 27,609 7,132 9,769 64,049 8,763 30,937

Liability position 6,337,137 (599,618) (308,904) 4,032,567 (395,365) (184,224)

Term securities 92,500 (92,500) (92,500) -- -- --

Term currencies 6,208,087 (497,768) (207,566) 4,020,190 (393,908) (183,437)

Term commodities 36,550 (9,350) (8,838) 12,377 (1,457) (787)

Option Market

Purchase Commitments - Long Position 6,323 64 58 165,356 2,671 9

Foreign Currency 6,323 64 58 165,356 2,671 9

Purchase Commitments - Short Position 877,576 (30,813) (167,376) 2,435,209 (116,242) (163,660)

Foreign Currency 19,559 (1,270) (1,279) 39,365 (197) (39)

Pre-fixed 848,187 (28,180) (163,208) 2,394,520 (116,021) (163,552)

Interbank deposit 8,605 (1,358) (2,889) -- -- --

Shares 1,225 (5) -- -- -- --

Commodities -- -- -- 1,324 (24) (69)

Sale Commitments - Short Position 951,634 (672,169) (578,705) 2,583,102 (2,311,711) (2,416,873)

Foreign Currency 6,323 (59) (2) 165,356 (2,671) (3,512)

Pre-fixed 848,186 (669,368) (573,378) 2,394,520 (2,306,142) (2,412,127)

Flexible Currency Options 4,304 (301) (1,119) -- -- --

Commodities 92,821 (2,441) (4,206) 23,226 (2,898) (1,234)

Swaps Contracts

Asset position 8,792,736 909,820 1,017,661 10,330,566 409,378 490,249

Interbank Deposits 1,148,160 15,558 23,118 2,971,542 162,124 138,004

Foreign Currency 6,264,887 857,323 957,396 5,888,934 187,638 279,037

Pre-fixed 1,378,043 36,891 37,128 1,445,104 57,370 71,787

IPCA 1,646 48 19 24,986 2,246 1,421

Liability position 12,897,073 (1,375,416) (1,584,997) 9,533,975 (346,573) (372,655)

Interbank Deposits 1,169,705 (12,166) (23,326) 6,047,558 (200,199) (129,513)

Foreign Currency 11,686,561 (1,363,250) (1,561,555) 2,439,527 (81,697) (172,225)

Pre-fixed 40,807 -- (116) 516,154 (59,945) (64,974)

TMS -- -- -- 530,736 (4,732) (5,943)

Other derivatives (2)

Asset position 1,800,286 61,620 54,746 738,822 36,061 26,935

Foreign Currency 1,800,286 61,620 54,746 738,822 36,061 26,935

Liability position 2,137,265 (181,144) (173,985) 2,611,071 (33,762) (34,826)

Foreign Currency 2,137,265 (181,144) (173,985) 2,611,071 (33,762) (34,826)

(1) Foreign exchange swap with periodic adjustments.

(2) Related, essentially, to Non Deliverable Forwards (NDF) which are traded in the over-the-counter (OTC) market and have as their object an exchange rate of a specific currency.



half 2015


28

d.2) Breakdown of the derivatives portfolio by maturity (notional value)

Maturity in Days 0 to 30 31 to 180 181 to 360 More than 360 Jun 30, 2015 Jun 30, 2014

Futures 1,433,678 4,288,862 807,564 1,546,707 8,076,811 9,559,830

Forwards 2,171,549 5,461,509 4,917,327 1,715,006 14,265,391 10,489,062

Options 240,069 1,017,408 568,810 9,246 1,835,533 5,183,667

Swaps 1,540,634 7,120,319 4,105,949 8,922,907 21,689,809 19,864,541

Other 1,277,949 2,249,821 182,614 227,167 3,937,551 3,349,893

d.3) Breakdown of the derivative portfolio by trading market and counterparty (notional value on 06.30.2015)

Futures Forwards Option market Swaps Other derivatives

BM&FBovespa 8,076,811 -- 2,849 -- --

Over-the-counter

Financial Institutions -- 185,000 1,764,570 14,059,572 3,937,551

Client -- 14,080,391 68,114 7,630,238 --

d.4) Breakdown of margin given as guarantee for transactions with derivative financial instruments

Jun 30, 2015 Jun 30, 2014

Treasury Financial Bills 968,445 1,956,255

Total 968,445 1,956,255

d.5) Portfolio of derivatives designated as hedge accounting

Jun 30, 2015 Jun 30, 2014

Market Risk Hedge

Hedging instruments

Assets 526,482 351,261

Swaps 526,482 351,261

Liabilities 419,354 297,677

Borrowing - Bonds (Principal) 419,354 297,677

Hedged items

Assets 278,363 197,595

Foreign Investments 278,363 197,595

Liabilities 526,904 350,582

Other liabilities 526,904 350,582

In order to hedge against possible fluctuations in the interest and exchange rates on its securities and foreign

investments, the Conglomerate contracted derivative operations to offset the exposure to the market value changes.

The hedges were assessed as effective, in accordance with the Circular No. 3,082/2002 from the Banco Central do

Brasil, which requires evidence of hedge effectiveness between 80% and 125%.

d.6) Income gains and losses with hedging instruments and hedged items


Hedged items losses (59,936) (8,416)

Hedging instruments gains 58,894 6,820

Net effect (1,042) (1,596)



half 2015


29

d.7) Derivative financial instruments segregated by current and non-current

Jun 30, 2015 Jun 30, 2014

Current Non-current Current Non-current

Assets

Forwards 649,776 100,953 209,728 45,800

Options 58 -- 9 --

Swaps 263,546 754,115 189,399 300,850

Other derivatives 45,322 9,424 23,138 3,797

Total 958,702 864,492 422,274 350,447

Liabilities

Forwards (275,146) (33,758) (148,151) (36,073)

Options (742,989) (3,092) (2,177,133) (403,400)

Swaps (507,727) (1,077,270) (209,062) (163,593)

Other derivatives (166,097) (7,888) (31,223) (3,603)

Total (1,691,959) (1,122,008) (2,565,569) (606,669)

e) Income from derivative financial instruments


Swaps (81,186) (205,357)

Forwards 7,572 263,403

Options (70,637) (118,288)

Futures 154,506 (530,288)

Other derivatives 249,511 37,614

Total 259,766 (552,916)



half 2015


30

8 - INTERBANK ACCOUNTS

a) Payments and receipts pending settlement

Jun 30, 2015 Jun 30, 2014

Assets

Rights against other participants of settlement systems

Bank checks and other instruments 2,419,934 3,143,223

Documents sent by other participants 2,023,415 3,871,323

Total 4,443,349 7,014,546

Current assets 4,443,349 7,014,546

Liabilities

Obligations to other participants of settlement systems

Remitted receipts 2,182,036 3,629,273

Bank checks and other instruments 1,132,455 1,524,630

Other receipts 8,257 5,789

Total 3,322,748 5,159,692

Current liabilities 3,322,748 5,159,692

b) Restricted deposits

Jun 30, 2015 Jun 30, 2014

Compulsory Deposits with Banco Central do Brasil 57,167,615 86,567,016

Additional reserve requirements on deposits 14,000,813 25,564,419

Savings deposit requirements 23,707,229 26,622,660

Demand deposit requirements 10,688,085 11,276,960

Time deposit requirements 8,615,480 13,781,849

Resources for microfinance 151,622 252,615

Resources for rural credit (1)

-- 9,058,876

Other 4,386 9,637

Housing Finance System 2,407,105 2,223,631

Compensation of wage changes fund 2,570,989 2,402,703

Provision for losses (171,745) (193,572)

Other 7,861 14,500

National Treasury - Rural Credit 77,192 69,279

Rural credit - Proagro 220,428 189,093

Provision for losses (143,236) (119,814)

Total 59,651,912 88,859,926

Current assets 59,642,166 88,852,611

Non-current assets 9,746 7,315

(1) Refers to funds deposited with the Banco Central do Brasil, because they were not lent on to rural credits, according to Resolution CMN No. 3,745/2009. The special supply funds were provided by Banco Central do Brasil and recorded in borrowings and onlendings (Note 17.b).



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c) Compulsory investments


Deposits linked to the Banco Central do Brasil 2,276,339 2,812,519

Additional reserve requirements on deposits 1,218,399 1,271,149

Savings deposit requirements 750,562 869,738

Time deposit requirements 307,378 641,525

Resources for rural credit -- 30,107

Income Credit Linked to Real State 80,786 69,410

Income Credit Linked to National Treasury - Rural Credit 19,588 14,572

Losses on restricted deposits devaluation 8,693 (9,629)

Total 2,385,406 2,886,872



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9 - LOAN OPERATIONS

a) Portfolio by modality

Jun 30, 2015 Jun 30, 2014

Loan operations 634,434,202 584,059,693

Loans and discounted securities 243,901,063 229,868,153

Financing 173,580,880 157,541,115

Rural and agribusiness financing 172,303,045 164,485,206

Real estate financing 44,299,084 31,975,690

Financing of Infrastructure and development 56,182 553

Loan operations sold under assignment (1)

293,948 188,976

Other receivables with loan characteristics 50,817,481 43,567,597

Credit card operations 18,969,303 16,865,076

Advances on exchange contracts (2)

14,973,915 12,185,858

Other receivables purchase under assignment (3)

16,323,462 14,088,490

Guarantees honored 184,087 144,266

Other 366,714 283,907


Total Loan Portfolio 686,212,430 628,434,668

(Allowance)/Reversal for loan losses (27,575,266) (22,702,599)

(Allowance for loan losses - loan operations) (26,728,946) (21,987,865)

(Allowance for other losses - other receivables) (4)

(817,466) (688,897)

(Allowance for lease losses - leasing transactions) (28,854) (25,837)

Total Loan Portfolio Net of Provisions 658,637,164 605,732,069

(1) Loan operations assigned with retention of the risks and benefits of the financial assets.

(2) Advances on exchange contracts are classified as a deduction to other liabilities

(3) Loan operations acquired with retention of the risks and benefits by the assignor of the financial assets.

(4) Includes the amount of R$ 6,345 thousand as of June 30, 2015 (4,795 thousand as of June 30, 2014) related to Allowance for interbank onlendings losses.

b) Loan operations and leasing transactions income

Jun 30, 2015 Jun 30, 2014

Loan operations income 49,676,407 38,104,307


Financing 10,223,721 4,329,443

Rural and agribusiness financing 5,574,178 4,878,844

Equalization of rates - Agricultural crop- Law 8,427/1992 3,602,411 2,483,250

Real estate financing 1,901,322 1,219,659

Recovery of loans previously written-off as loss (1)

1,750,915 1,613,615

Income from foreign currency financing 578,491 269,289

Export financing 154,631 121,564

Guarantees honored 14,572 9,170

Other 32,535 25,344

Leasing transactions income (Note 9.i) 207,729 276,505

Total 49,884,136 38,380,812

(1) The amount of R$ 55,958 thousand in the 1st half/2015 (with impact on the income of R$ 32,014 thousand) and R$ 27,481 thousand 1st half/2014 (with na impact on the income of R$ 15,722 thousand) was received from assignments without recourse of written-off credits to entities outside the financial system, in accordance with CMN Resolution 2,836/2001. The book value of these transactions were R$ 85,065 thousand and R$ 13,774 thousand, respectively.



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c) Breakdown of the loan portfolio by sector

In these financial statements, we present the loan portfolio by sectors of economic activity in a broadly manner,

according to the main economic activity of the credit borrower, considering the adherence to the economic sector of

the controlling group, when applicable, and in compliance with the best market practices.

Jun 30, 2015 % Jun 30, 2014 %

Public sector (1)

70,074,033 10.2 49,787,187 7.9

Public administration 32,249,095 4.7 21,413,862 3.4

Oil sector 24,480,626 3.6 18,833,037 3.0

Electricity 11,886,840 1.6 7,634,351 1.2

Services 353,818 0.1 354,562 0.1

Other activities 1,103,654 0.2 1,551,375 0.2

Private sector (2)

616,138,397 89.8 578,647,481 92.1

Individuals 298,077,828 43.4 270,276,110 43.0

Companies 318,060,569 46.4 308,371,371 49.1

Mining and metallurgy 36,928,113 5.4 36,425,348 5.8

Agribusiness of plant origin 33,807,333 4.9 33,795,759 5.4

Automotive sector 23,659,568 3.4 22,502,928 3.6

Services 22,643,732 3.3 22,545,910 3.6

Transportation 21,452,732 3.1 18,077,074 2.9

Fuel 19,877,271 2.9 19,476,785 3.1

Real estate agents 18,574,212 2.7 16,448,143 2.6

Electricity 17,895,572 2.6 13,353,268 2.1

Retail commerce 17,269,916 2.6 16,827,185 2.7

Agribusiness of animal origin 13,920,551 2.1 13,481,611 2.1

Specific activities of construction 12,389,669 1.8 12,776,615 2.0

Textile and clothing 10,635,617 1.5 11,393,733 1.8

Agricultural inputs 9,300,030 1.4 8,848,111 1.4

Pulp and paper 9,187,172 1.3 9,294,417 1.5

Electronics 8,255,875 1.2 9,798,309 1.6

Chemical 7,750,117 1.1 8,214,866 1.3

Woodworking and furniture market 6,577,328 1.0 6,580,598 1.0

Wholesale and various industries 6,395,354 0.9 7,047,285 1.1

Heavy construction 5,659,269 0.8 5,505,585 0.9

Telecommunications 4,776,181 0.7 5,372,799 0.9

Financial services 4,707,982 0.7 4,536,132 0.7

Other activities 6,396,975 1.0 6,068,910 1.0

Total 686,212,430 100.0 628,434,668 100.0

(1) The amounts of R$ 31,382,314 thousand, presented in the financial statements of June 30, 2014, was related only to transactions with the direct public administration and included the balances of Banco Votorantim proportional to the Bank’s equity interest (Note 3). The values of these financial statements are related to transactions with the direct public administration and agencies of the indirect public administration, and also with the industrial, commercial and service companies and financial institutions that belong to or that are controlled by the Government, as well as their respective associates and subsidiaries.

(2) The amounts disclosed under "Individuals" include loans to the sectors of agribusiness, housing and other sectors of economic activity carried out with individuals. To the highlighted economic sectors, operations are exclusive to companies.



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d) Loan portfolio by risk level and maturity

AA A B C D E F G H Jun 30,

2015 Jun 30,

2014

Current operations

Installments falling due

01 to 30 23,267,881 8,909,824 16,418,023 2,320,522 257,286 393,084 57,889 59,247 289,064 51,972,820 45,696,624

31 to 60 15,401,620 5,466,621 6,108,415 1,184,135 134,202 253,981 82,136 45,973 140,728 28,817,811 28,570,329

61 to 90 15,175,759 4,007,702 5,000,931 891,020 241,542 262,676 86,110 28,377 99,500 25,793,617 26,133,318

91 to 180 34,892,199 10,111,958 11,807,061 2,355,351 230,376 648,711 112,200 103,010 439,754 60,700,620 60,875,773

181 to 360 49,766,055 15,121,170 17,176,280 3,447,207 317,099 877,073 164,727 179,622 1,023,371 88,072,604 89,285,987

More than 360 249,112,309 67,488,428 62,989,534 11,396,389 2,357,051 5,029,709 1,149,235 1,107,139 3,984,406 404,614,200 359,234,886

Installments overdue

Up to 14 days 233,538 153,089 337,787 104,509 29,938 62,888 14,270 11,063 49,030 996,112 952,022

Other (1)

365,420 -- -- -- -- -- -- -- -- 365,420 449,125

Subtotal 388,214,781 111,258,792 119,838,031 21,699,133 3,567,494 7,528,122 1,666,567 1,534,431 6,025,853 661,333,204 611,198,064

Operations past due

Installments falling due

01 to 30 -- -- 113,256 148,562 81,099 113,716 75,769 98,463 407,741 1,038,606 953,303

31 to 60 -- -- 45,437 79,649 46,045 66,706 47,475 59,027 198,598 542,937 524,366

61 to 90 -- -- 41,754 72,811 41,480 62,448 43,817 53,929 186,627 502,866 473,422

91 to 180 -- -- 102,351 190,032 111,768 174,043 120,168 165,826 524,190 1,388,378 1,341,156

181 to 360 -- -- 172,496 294,254 177,711 303,224 210,186 250,124 949,361 2,357,356 2,160,885

More than 360 -- -- 478,115 710,560 680,582 1,167,569 836,441 792,835 3,038,521 7,704,623 5,740,824

Installments overdue

01 to 14 -- -- 11,641 31,830 29,297 35,016 19,487 26,885 80,742 234,898 204,100

15 to 30 -- -- 210,027 123,907 54,217 76,068 41,430 60,301 147,227 713,177 590,447

31 to 60 -- -- 9,598 312,557 103,067 148,523 77,711 111,810 301,665 1,064,931 855,951

61 to 90 -- -- 14 547,155 200,946 146,615 81,334 110,817 321,627 1,408,508 715,825

91 to 180 -- -- 14 3,412,621 8,300 212,810 324,126 419,788 1,067,325 5,444,984 1,229,013

181 to 360 -- -- 1 3 1 20,989 11,327 14,679 2,122,112 2,169,112 1,340,701

More than 360 -- -- -- -- -- -- -- -- 308,850 308,850 1,106,611

Subtotal -- -- 1,184,704 5,923,941 1,534,513 2,527,727 1,889,271 2,164,484 9,654,586 24,879,226 17,236,604

Total 388,214,781 111,258,792 121,022,735 27,623,074 5,102,007 10,055,849 3,555,838 3,698,915 15,680,439 686,212,430 628,434,668

(1) Operations with third party risk linked to government funds and programs, primarily Pronaf, Procera, FAT, BNDES and FCO. They include R$ 28,697 thousand of overdue installments, which comply with rules defined in each program for reimbursement by the program managers and, therefore, do not represent a credit risk for the Bank.

e) Allowance for loan losses by risk level

Level of risk

% Provision

Jun 30, 2015 Jun 30, 2014

Value of loans

Minimum required

allowance

Additional allowance

(1)

Existent Allowance

Value of loans

Minimum required

allowance

Additional allowance

(1)

Existent Allowance

AA 0 388,214,781 -- -- -- 364,387,302 -- -- --

A 0.5 111,258,792 556,294 73,063 629,357 97,230,360 486,152 307,814 793,966

B 1 121,022,735 1,210,227 -- 1,210,227 114,600,843 1,146,008 7,976 1,153,984

C 3 27,623,074 828,692 77,889 906,581 22,247,577 667,427 66,705 734,132

D 10 5,102,007 510,201 60,861 571,062 3,378,721 337,872 70,204 408,076

E 30 10,055,849 3,016,755 689,577 3,706,332 8,155,939 2,446,782 603,456 3,050,238

F 50 3,555,838 1,777,919 319,311 2,097,230 3,232,548 1,616,274 327,712 1,943,986

G 70 3,698,915 2,589,241 184,797 2,774,038 2,430,830 1,701,581 146,088 1,847,669

H 100 15,680,439 15,680,439 -- 15,680,439 12,770,548 12,770,548 -- 12,770,548

Total 686,212,430 26,169,768 1,405,498 27,575,266 628,434,668 21,172,644 1,529,955 22,702,599

(1) Refers to the additional provision over and above the minimum required by CMN Resolution 2,682/1999. This provision is established based on the experience of Management, by making projections for the loan portfolio, based on the history of default of operations and in accordance with good banking practice.



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f) Changes in allowance for loan losses

Includes loans, leases and other receivables with characteristics of credit.


Opening balance 25,294,947 21,523,120

Provision/(reversal) 10,844,952 8,303,749

Minimum required allowance 10,844,952 8,216,856

Additional allowance -- 86,893

Exchange fluctuation - foreign allowances 43,822 (91,562)

Write-off (8,608,455) (7,032,708)

Closing balance 27,575,266 22,702,599

g) Changes in allowance for other loan losses

Includes provisions for other receivables without characteristics of credit.


Opening balance 1,026,977 709,111

Provision/(reversal) 35,413 77,298

Exchange fluctuation - foreign allowances 1,897 (6,430)

Write-off (109) --

Closing balance 1,064,178 779,979

h) Leasing portfolio by maturity

Jun 30, 2015 Jun 30, 2014

Up to 1 year (1)

339,067 356,790

More than 1 year and up to 5 years 613,717 447,307

Over 5 years 7,963 3,281

Total Present Value 960,747 807,378

(1) Includes amounts related to overdue installments.

In accordance with Bacen rules, finance leases and other receivables with loan characteristics are presented on

several accounts, as follows:

Jun 30, 2015 Jun 30, 2014

Leasing 450,050 260,116

Property and equipment by leases 813,772 940,555

Creditors for residual value in advance (303,075) (393,293)

Present value of leasing and other credit operations 960,747 807,378

i) Income from leasing transactions


Lease revenue 207,729 276,505

Leasing 207,729 276,505

Lease expenses (126,452) (210,458)

Leasing (126,344) (210,210)

Operating leases -- (59)

Loss on disposal of leased assets (108) (189)

Total 81,277 66,047



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j) Concentration of loans

Jun 30, 2015 % of credit portfolio Jun 30, 2014 % of credit portfolio

Largest debtor 25,100,781 3.7 20,114,030 3.2

10 largest debtors 82,162,771 12.0 62,676,786 10.0

20 largest debtors 112,630,340 16.4 90,285,843 14.4

50 largest debtors 153,352,012 22.3 127,578,842 20.3

100 largest debtors 181,753,314 26.5 150,471,086 23.9

k) Renegotiated credits


Credits renegotiated during the period (1)

21,936,404 20,652,370

Renegotiated when past due (2)

5,328,070 1,730,540

Renovated (3)

16,608,334 18,921,830

Changes on credits renegotiated when past due

Opening balance 9,030,112 7,093,500

Contracts (2)

5,328,070 1,730,540

Interest (received) and appropriated (496,087) (318,168)

Write-off (1,160,752) (941,709)

Closing balance (4)

12,701,343 7,564,163

Allowance for loan losses of the portfolio renegotiated when past due 6,615,903 5,093,873

(%) Allowance for loan losses on the portfolio 52.1% 67.3%

90 days default of the portfolio renegotiated when past due 1,728,559 1,346,260

(%) Portfolio default 13.6% 17.8%

(1) Represents the balance of all installments (past due and future) of loans renegotiated during the period using the internet, automated teller machines (ATM) or branch network.

(2) Renegotiated credit under debt composition as a result of payment delay by the clients.

(3) Renegotiated current credits (i.e. not past due) in the form of the extension or renewal of the credit or the granting of new loans for partial or full

settlement of previous contracts or any other type of agreement that changes the maturity or the payment terms, originally agreed.

(4) Includes the amount of R$ 130,797 thousand (R$ 181,355 thousand as of June 30, 2014) related to renegotiated rural credits. The amount of R$ 5,208,149 thousand (R$ 5,337,249 thousand as of June 30, 2014), related to deferred credits from rural portfolio governed by specific legislation, is not included.

l) Supplementary information

Jun 30, 2015 Jun 30, 2014

Undrawn credit lines 152,052,055 154,756,265

Guarantees provided (1)

9,050,549 9,357,914

Confirmed export credit 2,711,282 2,034,232

Contracted credit opened for import 1,044,972 410,463

Linked resources 1,472,590 1,079,194

Guaranteed values for linked deposits 1,464,779 840,735

(1) For these operations, the Bank maintains an allowance recorded in Other Liabilities - Sundry, (Note 19.e) totaling R$ 362,654 thousand R$ 146,575 thousand as of June, 30, 2014) calculated in accordance with Resolution CMN 2,682/1999.



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m) Loan Operations by line of credit from Fundo de Amparo ao Trabalhador (Fund for Workers’ Assistance) - FAT

Lines of credit from FAT TADE(1)

Jun 30, 2015 Jun 30, 2014


Proger Urbano Investimento 18/2005 2,877,707 3,367,335

Proger Urbano Capital de Giro 15/2005 6 14

Proger Urbano Empreendedor Popular 01/2006 18 34

Financing 608,521 710,843

Proger Exportação 27/2005 15,705 5,043

FAT Giro Setorial Micro e Peq. Empresas 08/2006 -- 15

FAT Taxista 02/2009 283,933 226,394

FAT Turismo - Investimento 01/2012 153,942 130,235

FAT Turismo - Capital de Giro 02/2012 154,941 349,156

Rural and agribusiness financing 197,849 471,283

Proger Rural Custeio 02/2006 1,269 2,324

Proger Rural Investimento 13/2005 18,490 34,465

Pronaf Custeio 04/2005 3,168 4,264

Pronaf Investimento 05/2005 167,029 412,696

Giro Rural - Aquisição de Títulos 03/2005 7,893 17,529

Giro Rural - Fornecedores 14/2006 -- 5

Total 3,684,101 4,549,509

(1) TADE - Allocation Term of Special Deposits.



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10 - OTHER RECEIVABLES

a) Specific credits

Jun 30, 2015 Jun 30, 2014

Extension of rural credits - National Treasury 1,632,924 1,468,760

Other 881 631

Total 1,633,805 1,469,391

b) Sundry

Jun 30, 2015 Jun 30, 2014

Deferred tax asset - tax credit (Note 23.e) 32,090,465 24,010,234

Sundry debtors from escrow deposits - contingencies (Note 26.c) 24,328,436 18,551,550

Credit card operations (Note 9.a) 18,969,303 16,865,076

Credit linked to acquired operations (Note 9.a) (1)

16,323,462 14,088,490

Sundry debtors from escrow deposits - lawsuit (Note 26.d) 15,873,150 14,990,610

National Treasury - interest rate equalization - agricultural crop - Law 8,427/1992 13,459,428 7,943,736

Income tax and social contribution to offset 11,779,733 9,205,365

Fund of allocation of surplus - Previ (Note 25.f) 8,780,131 8,162,474

Receivables acquisition 3,331,166 4,507,170

Actuarial assets (Note 25.e) 3,157,539 9,826,753

Receivables - non-financial companies 3,148,927 2,926,208

Receivables - other 2,786,148 2,035,937

Sundry debtors - domestic 2,577,446 4,768,610

Advances to cards transactions processing’s companies 2,280,770 2,062,827

Receivables - National Treasury (2)

2,132,220 1,796,224

Premiums on credits linked to operations acquired in assignment 2,113,037 2,236,066

Receivables – ECT – Banco Postal (3)

1,401,972 1,879,856

Rights for acquisition of royalties and government credits 1,030,875 61,223

Salary advances and other advances 209,242 195,004

Sundry debtors - foreign 190,133 419,502

Sundry debtors from escrow deposits - other 56,569 72

Sundry debtors for purchasing assets 44,769 49,284

Other 671,282 538,949

Total 166,736,203 147,121,220

Current assets 116,919,138 109,829,268

Non-current assets 49,817,065 37,291,952

(1) Refers to the portfolios of payroll loans and vehicle financing granted to individuals, acquired by the Bank through assignments with full recourse to the transferor, accounted for in accordance with CMN Resolution 3,533/2008.

(2) It refers mainly to values resulting from operations with MCR 6-2 and MCR 6-4 resources (Rural Credit Manual) and the program of recovery of the “lavoura cacaueira baiana” (CMN Resolution 2,960/2002).

(3) Receivables from the partnership between Banco do Brasil and the Empresa Brasileira de Correios e Telégrafos – ECT, for the use of the Banco Postal network.



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11 - FOREIGN EXCHANGE PORTFOLIO

a) Breakdown

Jun 30, 2015 Jun 30, 2014

Other Receivables

Exchange purchases pending settlement 17,618,779 13,555,743

Bills of exchange and time drafts in foreign currency 38,298 27,186

Receivables from sales of foreign exchange 9,203,859 14,619,244

(Advances received in National/foreign currency) (7,653,199) (12,893,067)

Foreign currency receivables 5,724 5,007

Income receivable on advances granted and on financed imports 152,955 130,123

Total 19,366,416 15,444,236

Current assets 19,200,619 15,444,236

Non-current assets 165,797 --

Other Liabilities

Exchange sales pending settlement 12,815,286 16,242,315

(Financed imports) (24,646) (8,750)

Exchange purchase liabilities 16,132,632 13,853,183

(Advances on exchange contracts) (14,498,113) (11,781,706)

Foreign currency payables 64,819 50,347

Unearned income on advances granted 5,141 3,339

Total 14,495,119 18,358,728


Non-current liabilities 1,419,657 5,575,796

Net Foreign Exchange Portfolio 4,871,297 (2,914,492)

Memorandum Accounts

Credit opened for imports 1,155,917 534,149

Confirmed export credit 2,711,282 2,034,232

b) Foreign exchange results


Exchange income 9,104,783 4,628,892

Exchange expenses (8,436,207) (3,762,110)

Foreign exchange result 668,576 866,782



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12 - OTHER ASSETS

Jun 30, 2015 Jun 30, 2014

Assets not for own use 258,258 266,098

Assets in special regime 160,373 155,422

Real estate 60,972 94,031

Residential properties 10,012 5,332

Machinery and equipment 3,821 4,532

Vehicles 482 507

Other 22,598 6,274

Materials in stock 31,560 27,902

Subtotal 289,818 294,000

(Impairment) (1)

(125,569) (138,985)

Prepaid Expenses 310,556 529,173

Personnel expenses - meal program 121,499 112,036

Entities abroad 72,465 59,319

Premiums for purchased payroll credits (2)

43,302 277,663

Tax expenses 27,385 22,731

Promotion and public relations 13,667 18,257

Rent 5,856 5,947

Commissions paid to car dealers - financing of vehicles 54 278

Expenses with loyalty program -- 2,038

Other 26,328 30,904

Total 474,805 684,188

Current assets 425,091 433,445

Non-current assets 49,714 250,743

(1) The Bank recognized, in the 1st half/2015, allowance expenses for impairment losses of assets not in use in the amount of R$ 311 thousand (reversal in the amount of R$ 7,877 thousand in the June 30, 2014).

(2) The amounts are amortized over the maturity of the installments of loans acquired from other financial institutions.



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13- INVESTMENTS

a) Changes in Subsidiaries and Associates

Book value Changes - 1st half/2015 Book value Equity income

Dec 31, 2014 Dividends Other Events Equity income Jun 30, 2015 Jun 30, 2014 1st half/2014

Domestic 9,838,976 (1,175,127) 17,221 1,647,737 10,328,807 9,620,302 1,205,771

Banco Votorantim S.A. (1)

3,714,071 -- 27,160 158,773 3,900,004 3,706,985 196,289

BB Seguridade Participações S.A. (2)

3,662,042 (1,147,078) (5,659) 1,433,438 3,942,743 3,407,623 995,409

Neoenergia S.A. 1,144,516 (21,629) -- 45,799 1,168,686 1,094,114 (26,286)

BB Tecnologia e Serviços S.A. (1)

207,606 -- 1,611 18,523 227,740 188,282 26,553

Kepler Weber S.A. 86,639 (6,253) -- 2,008 82,394 70,604 8,280

Elo Participações S.A. 73,069 -- (6) (2,259) 70,804 75,187 (80)

Tecnologia Bancária S.A. - Tecban 47,668 -- -- 87 47,755 42,254 6,220

Cadam S.A. 25,201 -- -- (7,739) 17,462 26,925 996

BB Tur Viagens e Turismo Ltda. 14,535 -- (398) (78) 14,059 13,333 745

Companhia Brasileira de Securitização - Cibrasec (3)

-- (167) 9.100 127 9,060 -- --

Estruturadora Brasileira de Projetos - EBP 8,221 -- -- (1,655) 6,566 8,372 (297)

Seguradora Brasileira de Crédito à Exportação - SBCE 2,353 -- -- 374 2,727 3,185 109

Cia. Hidromineral Piratuba 2,525 -- 36 105 2,666 2,520 12

Cia. Catarinense de Assessoria e Serviços - CCA (4)

228 -- -- -- 228 228 --

Ativos S.A. Gestão de Cobrança e Recuperação de Crédito 5 -- -- -- 5 5 --

Other investments 27,328 -- 61,892 234 89,454 80,518 (2,179)

Goodwill/Bargain purchase on acquisition of investments 822,969 -- (76,515) -- 746,454 900,167 --

Overseas 436,187 -- (1,544,241) 1,453,749 345,695 388,800 (691,809)

Cielo Usa Inc. 230,250 -- (74,447) (18,996) 136,807 193,987 (10,366)

Goodwill on acquisition of investments 205,937 -- 2,951 -- 208,888 194,813 --

Profit/(loss) with foreign exchange in the branches -- -- (917,319) 917,319 -- -- (262,860)

Profit/(loss) with foreign exchange in the subsidiaries and affiliates and associates

-- -- (544,785) 544,785 -- -- (415,408)

Increase/decrease in equity resulting from other changes -- -- (10,641) 10,641 -- -- (3,175)

Total investments in subsidiaries and associates 10,275,163 (1,175,127) (1,527,020) 3,101,486 10,674,502 10,009,102 513,962

Accumulated Impairment (9,018) -- -- -- (9,018) (6,998) --

(1) Excluded unrealized result arising from transactions with the Banco do Brasil.

(2) On June 30, 2015, the price of BB Seguridade share was R$ 34.10.

(3) The information refers to the period from December/2014 to May/2015. Since June 30, 2015, Cibrasec has been consolidated by the equity method. (On June 30, 2014, the company was proportionally consolidated in the Prudential Conglomerate - Note 3).

(4) Company in liquidation process, not valued by the equity method.

Balances at Jun 30, 2015 Capital stock Adjusted

Shareholders’ Equity

Net income/ (loss) 1st half/2015

Number of shares (in thousands)

Ownership interest in the total capital % Common Preferred

Domestic

Banco Votorantim S.A. 7,483,756 7,847,066 267,776 43,114,693 9,581,043 50.00%

BB Seguridade Participações S.A. 5,646,767 5,951,310 2,163,680 1,325,000 -- 66.25%

Neonergia S.A. 4,739,028 9,877,777 312,319 701,327 -- 11.99%

BB Tecnologia e Serviços S.A. 146,391 228,625 24,927 248,458 248,586 99.97%

Kepler Weber S.A. 234,225 472,002 (13,915) 4,593 -- 17.46%

Elo Participações S.A. 800,226 1,408,488 239,822 372 -- 49.99%

Tecnologia Bancária S.A. - Tecban (1)

374,521 381,462 (5,304) 470,159 -- 12.52%

Cadam S.A. 183,904 80,687 19,150 -- 4,762 21.64%

BB Tur Viagens e Turismo Ltda. (2)

9,633 14,058 (80) 96 -- 100.00%

Companhia Brasileira de Securitização - Cibrasec (3)

68,482 74,744 1,526 8 -- 12.12%

Estruturadora Brasileira de Projetos - EBP 75,819 59,096 (1,026) 5,076 1,736 11.11%

Seguradora Brasileira de Crédito à Exportação - SBCE 14,998 22,849 372 1,100 -- 12.09%

Cia. Hidromineral Piratuba 4,100 17,269 679 633 -- 15.44%

Cia. Catarinense de Assessoria e Serviços - CCA 780 474 -- 260 520 48.13%

Ativos S.A. Gestão de Cobrança e Recuperação de Crédito 5 5 -- 5 -- 100.00%

Overseas

Cielo Usa Inc. 630,450 921,624 (19,133) -- -- 28.76%

(1) Banco do Brasil’s direct interest is 4.51%.





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42

b) Other Investments

Jun 30, 2015 Jun 30, 2014

Tax incentive investments 33,596 33,142

Equity securities 58 58

Stocks and shares 82,639 69,083

Other Investments (1)

98,569 171,607

Other equity abroad 73,954 52,496

Total 288,816 326,386

(Accumulated impairment) (45,309) (45,419)

c) Goodwill arising on acquisition of investments

Changes of goodwill 1st half/2015 1st half/2014


Additions (1)

-- 16,337

Amortizations (2)

(96,038) (95,621)

Foreign exchange fluctuation (3)

22,474 (59,566)

Closing balance 955,342 1,094,980

(1) Adjustments arising from the alignment of the accounting practices of the investee to the practices of the investor.

(2) Recorded in Other Administrative Expenses.

(3) Levied on the goodwill from BB Americas and Banco Patagonia.

d) Expected Goodwill Amortization

2015 2016 2017 2018 2019 After 2019 Total

Banco do Brasil 48,248 98,809 98,389 38,400 39,158 36,471 359,475

Banco Votorantim 28,988 60,466 61,133 -- -- -- 150,587

Banco Patagonia 17,726 33,625 30,615 31,207 31,828 26,976 171,977

Banco do Brasil Americas 1,534 4,718 6,641 7,193 7,330 9,495 36,911

Tax effects (1)

-19,299 -39,524 -39,356 -15,360 -15,663 -14,588 -143,790

Net total 28,949 59,285 59,033 23,040 23,495 21,883 215,685

BB-BI 46,928 107,670 123,517 141,696 162,550 -- 582,361

Cielo 46,928 107,670 123,517 141,696 162,550 -- 582,361

Cielo S.A. 605 1,381 1,600 1,598 1,698 6,624 13,506

Braspag Tecnologia em Pagamento Ltda.

369 854 1,031 984 1,042 3,734 8,014

Multidisplay Comércio e Serviços Tecnológicos S.A.

111 256 283 311 336 1,638 2,935

Companhia Brasileira de Gestão de Serviços (Orizon)

125 271 286 303 320 1,252 2,557

BB Consolidated 95,781 207,860 223,506 181,694 203,406 43,095 955,342

Tax effects (1)

(38,276) (83,062) (89,307) (72,582) (81,260) (16,840) (381,327)

Net total 57,505 124,798 134,199 109,112 122,146 26,255 574,015

(1) 25% of income tax and 15% of social contribution for financial companies and 25% of income tax and 9% of social contribution for other non-financial companies.

The expected amortization of goodwill arising on the acquisition of investments is based on the projections of results

made at the time of the purchase, prepared by specialized firms or technical departments within the Bank, and

considers the timing of the estimates and discount rates used in calculating the net present value of expected cash

flows.

e) Goodwill impairment test

The recoverable amount of goodwill arising on acquisition of investments is determined by the value in use, which is

the discounted value of the cash flow projections of the invested entity (cash-generating unit).



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43

Assumptions used to project these cash flows are based on public information, budgets and / or business plans of the

purchased entities. These assumptions consider current and past performance, as well as expected market and

macroeconomic growth.

The cash flow of the entities below were actively projected for ten years and considered perpetual from the eleventh

year with fixed growth rates. For the periods that exceed the terms of the budget or business plan, the growth

estimates are in line with those adopted by the entities. The nominal discount rate is determined annually based on

the CAPM (Capital Asset Pricing Model) adapted for the Brazilian market and referenced in Reais (R$).

Entity (cash-generating unit) Growth rate p.a. (1)

Discount rate p.a. (2)

Banco Votorantim 3.60% 12.22%

BB Americas 2.00% 9.44%

(1) Nominal growth in perpetuity.

(2) Geometric average of ten years of projections, except BB Americas, that considered a geometric average of seven years of projections.

According to the sensitivity analysis performed, there is no indication that changes in the assumptions would cause

the book value of the cash-generating units to exceed the recoverable amount.

The recoverable amount of the goodwill arising on the acquisition of Cielo and Banco Patagonia are determined by

the net realizable value through sale, based on the share price of the companies on BM&FBovespa exchange and on

Merval (stock market of Buenos Aires), respectively.

Entity (cash-generating unit) Share price (1)

Banco Patagonia R$ 5.04 (2)

Cielo (CIEL3) R$ 40.00

(1) Closing price of the shares on September 30, 2014. (2) Value equivalent to ARS 17.45, as ARS/BRL quoted on September 30, 2014

In the first half 2015 and in the first half 2014, there was no impairment loss on goodwill arising on the acquisition of

investments.



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14- PROPERTY

a) Property and equipment

Dec 31, 2014 1st half/2015 Jun 30, 2015 Jun 30, 2014

Book value Changes Depreciation Provision for Impairment

Cost Value Accumulated Depreciation

Accumulated Impairment


Buildings 3,695,015 213,301 (169,322) -- 6,302,888 (2,555,203) (8,691) 3,738,994 3,408,460

Furniture and equipment in use

1,597,379 121,154 (123,206) (3,200) 3,714,306 (2,117,910) (4,269) 1,592,127 1,342,181

Data processing systems

1,161,989 162,120 (213,670) -- 3,931,808 (2,821,369) -- 1,110,439 1,144,080

Facilities 204,864 16,214 (17,628) -- 973,397 (769,947) -- 203,450 199,600

Land 192,905 3,712 -- -- 196,617 -- -- 196,617 194,115

Security systems 165,633 7,002 (13,144) -- 385,539 (226,048) -- 159,491 169,536

Communication systems

88,653 8,669 (7,501) -- 245,096 (155,275) -- 89,821 84,262

Constructions in progress

134,340 (51,766) -- -- 82,574 -- -- 82,574 146,840

Transport systems 7,190 1,409 (534) -- 16,585 (8,520) -- 8,065 6,409

Furniture and equipment in stock

1,771 (20) -- -- 1,751 -- -- 1,751 1,780

Total 7,249,739 481,795 (545,005) (3,200) 15,850,561 (8,654,272) (12,960) 7,183,329 6,697,263

b) Property and equipment by leases

Jun 30, 2015 Jun 30, 2014

Leased assets 901,957 1,083,875

Vehicles and similar 419,959 476,312

Machinery and equipment 370,673 470,595

Airplanes 28,372 33,554

Furniture 14,742 17,222

Facilities 8,700 14,500

Boats 8,879 6,712

Real estate 7,862 7,862

Other 41,862 54,012

Losses of leases to be amortized 5,375 25,350

Accumulated amortization (4,467) (22,244)

Accumulated Depreciation (88,185) (143,320)

Excess depreciation 312,416 384,518

Accumulated Depreciation (400,601) (527,838)

Total 813,772 940,555



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45

15 - INTANGIBLE ASSETS

a) Changes and breakdown


Book value Acquisitions Write-offs Amortization Reversion for Impairment

Cost value Accumulated amortization

Accumulated Impairment


Rights to manage

payroll (1)

6,510,812 310,147 (138,237) (945,018) -- 9,523,350 (3,735,906) (49,740) 5,737,704 6,149,641

Goodwill on acquisition of absorbed

company (2)

2,715,371 -- -- (403,879) -- 4,961,027 (2,649,535) -- 2,311,492 3,070,067

Softwares 1,395,961 224,685 -- (84,969) 2,378 2,561,184 (1,023,129) -- 1,538,055 1,235,705

Other intangible assets 262,193 -- (51) (38,855) -- 262,194 (38,907) -- 223,287 220,547

Total 10,884,337 534,832 (138,288) (1,472,721) 2,378 17,307,755 (7,447,477) (49,740) 9,810,538 10,675,960

(1) The values of acquisitions and write-offs include contracts renegotiated in the period, in which the new contract value is recorded and the past contract value is written-off without impact on Statement of Income.

(2) Refers to the goodwill from the merger of Banco Nossa Caixa in November/2009.

b) Estimate for Amortization

2nd half/2015 2016 2017 2018 2019 After 2019 Total

Amounts to be amortized 1,455,347 2,928,338 2,532,965 1,320,498 680,937 892,453 9,810,538

c) Impairment Test

The impairment test of goodwill on the acquisition of Banco Nossa Caixa, which was merged into Banco do Brasil,

considers the value in use of Banco do Brasil´s operations in the state of São Paulo (cash-generating unit). Cash

flows are based on cash-generating unit results in 2014, the 2015 budget and internal projections of results from

2016, for five years.

The assumptions adopted for the calculation are based on Banco do Brasil's Corporate Strategy and macroeconomic

scenario. They consider the current and past performance and expected growth in the market segment.

Cash flows were discounted by the Bank’s cost of own capital. The nominal discount rate is measured annually

based on the CAPM (Capital Asset Pricing Model) adapted for the Brazilian market and referenced in Reais (R$).

Entity (Cash-generating unit) Growth rate p.a Discount rate p.a.

Banco do Brasil - state of São Paulo - Goodwill Banco Nossa Caixa (1)

9.5% 12.3%

(1) Geometric average of five years of projections.

According to the sensitivity analysis performed, there is no indication that changes in the assumptions would cause

the book value of the cash-generating unit to exceed its recoverable amount.

In the 1st half/2015 and in the 1st half/2014, there was no impairment loss on goodwill on merged company.



half 2015


46

16 - DEPOSITS AND SECURITIES SOLD UNDER REPURCHASE AGREEMENTS

a) Deposits

Jun 30, 2015 Jun 30, 2014

Demand Deposits 64,729,068 69,314,044

Individuals 28,768,045 29,215,813

Companies 22,058,048 22,683,526

Restricted 9,394,082 10,967,420

Government 1,543,079 2,339,636

Foreign currency 892,615 1,464,698

Financial system institutions 809,028 650,098

Related companies 798,808 712,555

Special from Federal Treasury 312,575 535,381

Domiciled abroad 38,333 382,030

Other 114,455 362,887

Saving Deposits 147,306,118 146,460,984

Individuals 136,944,516 137,162,122

Companies 10,036,705 8,928,085

Related companies 311,232 358,258

Financial system institutions 13,665 12,519

Interbank Deposits 33,337,348 27,829,549

Time Deposits 198,574,768 233,750,505

Judicial 116,804,927 107,242,764

National currency 52,949,283 99,968,205

Foreign currency 23,395,054 20,798,823

Fundo de Amparo ao Trabalhador - FAT (Note 16.e) 4,164,447 4,730,197

Funproger (Note 16.f) 253,232 220,896

Other 1,007,825 789,620

Total 443,947,302 477,355,082



b) Segregation of deposits by repayment date

Without maturity

Up to 3 months

3 to 12 months

1 to 3 years 3 to 5 years More than 5

years Jun 30, 2015 Jun 30, 2014

Time deposits (1)

121,754,152 19,315,087 11,507,413 19,416,627 26,581,489 -- 198,574,768 233,750,505

Saving deposits 147,306,118 -- -- -- -- -- 147,306,118 146,460,984

Demand deposits 64,729,068 -- -- -- -- -- 64,729,068 69,314,044

Interbank deposits 2,353,366 10,208,033 15,036,806 4,159,180 1,569,468 10,495 33,337,348 27,829,549

Total 336,142,704 29,523,120 26,544,219 23,575,807 28,150,957 10,495 443,947,302 477,355,082

(1) Includes the amount R$ 52,367,617 thousand (R$ 98,773,145 thousand as of June 30, 2014), relating to time deposits with early repurchase clause (liquidity commitment), classified based on the contractual maturity dates.



half 2015


47

c) Securities sold under repurchase agreements

Jun 30, 2015 Jun 30, 2014

Own Portfolio 53,666,897 50,443,105

Corporate bonds 44,072,861 30,913,867


Securities abroad 2,614,535 2,128,930

National Treasury Bills -- 2,659,752

Third-Party Portfolio 290,285,259 229,557,340


National Treasury Notes 117,997,572 61,728,624


Securities abroad -- 1,186,409

Total 343,952,156 280,000,445



d) Expenses with deposits and with securities sold under repurchase agreements


Deposits (15,826,321) (15,325,507)

Judicial deposits (5,612,461) (4,562,894)

Saving deposits (5,299,389) (4,764,319)

Time deposits (4,537,463) (5,635,533)

Interbank deposits (377,008) (362,761)

Securities sold under repurchase agreements (19,397,658) (13,407,458)

Third-party portfolio (16,831,739) (11,342,662)

Own portfolio (2,565,919) (2,064,796)

Funds from acceptance and issuance of securities (1)

(9,212,728) (5,673,102)

Agribusiness letters of credit (6,137,518) (3,838,308)

Securities issues abroad (492,415) (481,166)

Financial bills (1,755,317) (1,078,171)

Letters of credit – Real estate (827,478) (275,457)

Subordinated debt abroad (2)

(265,144) (216,322)

Equity and debt hybrid securities (3)

(998,492) (699,898)

Other (363,268) (351,658)

Total (46,063,611) (35,673,945)

(1) Funds from acceptance and issuance of securities are disclosed in Note 18.

(2) Subordinated debt abroad are disclosed in Note 19.c.

(3) Equity and debt hybrid securities are disclosed in Note 19.d.



half 2015


48

e) Fundo de Amparo ao Trabalhador (Fund for worker's assistance) – FAT

Program Resolution/

TADE (1)

Repayment of FAT Funds Jun 30, 2015 Jun 30, 2014

Type(2) Initial date Final date Available

TMS(3) Applied TJLP(4)

Total Available

TMS(3) Applied TJLP(4)

Total

Proger Rural and Pronaf 65,901 189,660 255,561 155,080 480,286 635,366

Pronaf Custeio 04/2005 RA 11/2005 -- 87 2,198 2,285 31 3,063 3,094

Pronaf Investimento 05/2005 RA 11/2005 -- 62,641 174,070 236,711 145,673 442,056 587,729

Giro Rural - Aquisição de Títulos

03/2005 SD 01/2008 01/2015 -- -- -- 325 10,343 10,668

Rural Custeio 02/2006 RA 11/2005 -- 256 783 1,039 261 1,570 1,831

Rural Investimento 13/2005 RA 11/2005 -- 2,917 12,609 15,526 8,790 23,254 32,044

Proger Urbano 475,319 2,720,669 3,195,988 90,293 3,190,275 3,280,568

Urbano Investimento 18/2005 RA 11/2005 -- 475,319 2,720,669 3,195,988 90,289 3,190,265 3,280,554

Urbano Capital de Giro 15/2005 RA 11/2005 -- -- -- -- 4 10 14

Other 113,393 599,505 712,898 108,084 706,179 814,263

Exports 27/2005 RA 11/2005 -- 865 15,190 16,055 4,705 4,888 9,593

FAT Fomentar Médias e Grandes Empresas

12/2006 RA 07/2006 -- -- -- -- 4 -- 4

FAT Taxista 02/2009 RA 09/2009 -- 46,565 282,797 329,362 55,878 225,626 281,504

FAT Turismo Investimento

01/2012 RA 08/2012 -- 3,181 152,722 155,903 17,196 129,891 147,087

FAT Turismo Capital de Giro

02/2012 RA 08/2012 -- 62,782 148,796 211,578 30,301 345,774 376,075

Total 654,613 3,509,834 4,164,447 353,457 4,376,740 4,730,197

(1) TADE - Allocation Term of Special Deposits.

(2) RA - Automatic Return (monthly, 2% of the balance) and SD - Available Balance.

(3) Funds remunerated by the Taxa Média Selic (average Selic Rate - TMS).

(4) Funds remunerated by Taxa de Juros de Longo Prazo (long-term interest rate - TJLP).

FAT is a special accounting and financial fund, established by Law 7,998/1990, associated with the Ministério do

Trabalho e Emprego (Ministry of Labor and Employment) and managed by the Executive Council of the Fundo de

Amparo ao Trabalhador (Fund for Workers’ Assistance) - Codefat. Codefat is a collective, tripartite, equal level

organization, composed of representatives of workers, employers and government.

The main actions to promote employment using FAT funds are structured around the Programs for the Generating

Employment and Earnings (Proger), resources for which are allocated through special deposits, established by Law

8,352/1991, in official federal financial institutions. These programs include, among others, the urban Proger program

(Investment and Working Capital) and the rural Proger program and the National Program for Strengthening Family

Farming - Pronaf, in addition to the special lines such as FAT Integrar – Rural e Urbano, FAT Giro Setorial – Micro e

Pequenas Empresas (micro and small-sized companies), FAT Giro Setorial – Médias e Grandes Empresas (medium

and large-sized companies), FAT Giro Setorial Veículos – Micro e Pequenas Empresas (micro and small-sized

companies), FAT Giro Setorial Veículos – Médias e Grandes Empresas (medium and large-sized companies), FAT

Fomentar – Micro e Pequenas Empresas (micro and small-sized companies), FAT Fomentar – Médias e Grandes

Empresas (medium and large-sized companies), FAT Giro Agropecuário, FAT Inclusão Digital (digital inclusion), FAT

Taxista (taxi), FAT Turismo Investimento and FAT Turismo Capital de Giro.

The FAT special deposits allocated to Banco do Brasil incur interest on a daily pro rata die basis using the Average

Selic Rate (TMS) when not lent out. As they are disbursed as loans, the interest rate is swapped to the Long-term

Interest Rate (TJLP) until the maturity of the loans. The earnings on the Bank’s funds are paid to FAT on a monthly

basis, as established in Codefat Resolutions 439/2005 and 489/2006.

f) Guarantee Fund for Generation of Employment and Earnings (Funproger)

The Guarantee Fund for Generation of Employment and Earnings (Funproger) is a special accounting fund

established on November 23, 1999 by Law 9,872/1999, amended by Law 10,360/2001 and by Law 11,110/2005 and

regulated by Codefat Resolution 409/2004, and its amendments. It is managed by Banco do Brasil under the

supervision of Codefat/MTE and the balance at June 30, 2015 is R$ 253,232 thousand (R$ 220,896 thousand as of

June 30, 2014).



half 2015


49

The objective of Funproger is to provide guarantees to entrepreneurs who would otherwise not have the necessary

guarantees to contract financing by Proger Urbano and Programa Nacional de Microcrédito Produtivo Orientado,

through the payment of a commission. The net assets of Funproger are accumulated through funds arising from the

difference between the Average Selic Rate (TMS) and the Long-Term Interest Rate (TJLP) in respect of the

remuneration of the special deposit balances available in FAT. Other sources of funds are the earnings from its

operations and the income on its excess cash resources paid by Banco do Brasil, the fund manager.

17 - BORROWINGS AND ONLENDINGS

a) Borrowings

up to 90 days from 91 to 360

days from 1 to 3

year from 3 to 5

years Jun 30, 2015 Jun 30, 2014

Domestic -- -- 943,784 -- 943,784 12,418

Borrowing from non-financial companies -- -- 943,784 -- 943,784 12,418

Overseas 5,551,939 11,882,387 5,659,152 1,360,758 24,454,236 17,554,096

Borrowings from bankers abroad 5,478,291 11,793,709 5,653,046 1,360,196 24,285,242 17,187,562

Linked to public sector borrowings (1)

-- -- -- -- -- 268,610

Imports 73,648 88,678 6,106 562 168,994 97,924

Total 5,551,939 11,882,387 6,602,936 1,360,758 25,398,020 17,566,514



(1) Maturity date of April 2015 at a rate of 6.92% p.a.

b) Onlendings

Domestic - Official institutions

Programs Finance charges Jun 30, 2015 Jun 30, 2014

National Treasury – Rural Credit 288,105 395,420

Pronaf TMS (if available)

Fixed 0.50% p.a. to 4.00% p.a. (if applicable) 166,212 262,075

Cacau (cocoa) IGP-M + 8.00% p.a.

TJLP + 0.60% p.a. ou 6.35% p.a. 89,850 86,439

Recoop Fixed 5.75% p.a. to 8.25% p.a

IGP-DI + 1.00% p.a. IGP-DI + 2.00% p.a.

30,688 45,551

Other 1,355 1,355

BNDES 40,780,289 42,685,546

Banco do Brasil

Fixed 0.00% p.a. 7.30% p.a. TJLP + 0.00% p.a. a 5.40% p.a IPCA + 7.02% p.a. a 9.41% p.a. Selic + 0.40% p.a. a 2.50% p.a.

FX Variation + 0.90% a.a. a 6.89% a.a.

40,780,289 42,685,546

Caixa Econômica Federal Fixed 4.97% p.a. (average) 16,324,322 8,046,383

Finame 32,163,617 30,070,406

Banco do Brasil Fixed 0.00% p.a. to 8.50% p.a.

TJLP + 0.50% p.a. to 5.50% p.a. FX Variation + 0.90% p.a. to 3.00% a.a.

32,163,617 30,070,406

Other official institutions 475,467 9,793,698

Special supply - Rural savings (Note 8.b) TR -- 8,726,841

Special supply - Deposits (Note 8.b) -- -- 332,035

Funcafé TMS (if available) Fixed 5.50% p.a. to 7.50% p.a.

(if applied) 475,439 734,794

Other 28 28

Total 90,031,800 90,991,453





half 2015


50

Overseas

Jun 30, 2015 Jun 30, 2014

Special fund for support to small and medium manufacturing companies 477 477

Total 477 477

Current liabilities 95 95

Non-current liabilities 382 382

c) Expense on borrowings and onlendings


Borrowings expenses (4,972,812) (120,487)

Onlendings expenses (5,754,462) (1,705,667)

Foreign (1)

(3,371,285) --

BNDES (1,522,999) (1,264,959)

Finame (326,791) (282,091)

Caixa Econômica Federal (453,637) (48,567)

National Treasury (43,739) (38,368)

Other (36,011) (71,682)

Expenses for obligations with bankers abroad (1)

(2,316,407) --

Expenses for financial and development funds liabilities (1,042,075) (36,560)

Total (14,085,756) (1,862,714)

(1) In the 1st half/2014, the credit balances of these expenses were reclassified to the grouping "Other Operating Income - Negative foreign exchange readjustment/Reclassification of liability balances" (Note 20.e), due to the record of the exchange variation on liability operations with exchange adjustment clause.



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51

18 - FUNDS FROM ACCEPTANCE AND ISSUANCE OF SECURITIES

Funding Currency Issued Value Remuneration p.a. Issue Year Maturity Year Jun 30, 2015 Jun 30, 2014

Banco do Brasil 186,472,111 137,308,911

Global Medium - Term Notes Program

9,698,689 10,479,050

R$ 350,000 9.75% 2007 2017 344,290 350,582

USD 100,000 Libor 6m + 2.55% 2009 2014 -- 223,361

USD 950,000 4.50% 2010 2015 -- 2,133,128

USD 500,000 6.00% 2010 2020 1,584,528 1,126,274

EUR 750,000 4.50% 2011 2016 3,585,741 2,300,707

JPY 24,700,000 1.80% 2012 2015 630,510 539,185

EUR 1,000,000 3.75% 2013/2014 2018 2,643,380 3,125,459

CHF 275,000 2.50% 2013 2019 910,240 680,354

"Senior Notes" 7,522,987 5,346,358

USD 500,000 3.88% 2011 2017 1,573,629 1,115,374

USD 1,925,000 3.88% 2012 2022 5,949,358 4,230,984

Structured Notes USD 58,520 0.90% to 3.55% 2021 181,845 267,264

-- --

Certificates of Deposits (1)

15,435,545 12,203,002

Short term 0,04% to 4,05% 15,228,332 8,185,695

Long term 1.76% to 4.05% 2020 207,213 4,017,307

Certificates of structured operations

29,411 2,935

Short term 2015 26,456 2,935

Long term 2018 2,955 --

Letters of credit - Real estate 2017 18,526,015 8,204,373

Letters of credit agribusiness 132,372,288 98,399,486

Short term (2)

17,650,853 19,653,694

Long term (3)

2020 114,721,435 78,745,792

Financial Letters 2,705,331 2,406,443

Short term (2)

104.00% to

105.00% 2,661,792 --

Long term 106.50% 2017 43,539 2,406,443

Banco Patagonia (4)

210,627 409,674

Short term ARS 210,627 374,083

Long term ARS 2016 -- 35,591

Non-Financial Corporations 1,478,129 1,977

Cibrasec (5)

Real Estate Receivables Certificates R$ 10.30% p.a. 1,977

Cielo S.A.

Debentures R$ 2015 2023 1,478,129 --

Kepler Weber S.A.

Debentures R$ TJLP + 3.80% 2007 2020 -- --

Eliminated Amount on Consolidation

(6)

(1,092,238) (92,989)

Total 187,068,630 137,627,573



(1) Securities issued abroad in SGD, AUD, CHF, EUR, GBP, RMB and USD.

(2) Securities issued in foreign and national currency with maturities up to 360 days.

(3) Operations with maturity between 361 and 1,983 days.

(4) Securities issued with rates from 21.00 p.a. to 24.75% p.a. and from Badlar+297 pts. To Badlar+450 pts.

(5) Associated company excluded from the Prudential Conglomerate, since June 30, 2015 (Note 3).

(6) Refers to securities issued by BB-Consolidated, which are in possession of overseas subsidiaries.



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52

19 - OTHER LIABILITIES

a) Taxes and social security

Jun 30, 2015 Jun 30, 2014

Legal liabilities (Note 26.d) 13,574,449 12,732,946

Provision for taxes and contributions on net income 5,329,656 2,098,176

Deferred tax liabilities (Note 23.d) 1,490,369 3,020,828

Taxes and contributions payable 1,461,380 1,290,615

Provision for tax litigation (Note 26.a) 553,113 506,544

Taxes and contributions on net income payable 34,859 26,298

Other 298,840 298,783

Total 22,742,666 19,974,190


Non-current liabilities 475,579 2,197,043

b) Financial and Development Funds

Jun 30, 2015 Jun 30, 2014

Marinha Mercante 6,862,696 4,554,449

Pasep (1)

2,434,106 2,195,098

Fundo de Desenvolvimento do Nordeste - FDNE 1,856,651 572,727

Funds from Governo do Estado de São Paulo 713,418 710,920

Fundo de Desenvolvimento do Centro Oeste - FDCO 249,259 195,092

Fundo Nacional de Aviação Civil – FNAC 65,737 47,545

Other 221,863 129,236

Total 12,403,730 8,405,067



(1) The Bank is administrator of the Public Servant Heritage Formation Program (Pasep), guaranteeing a minimum return equal to the Long-Term Interest Rate - TJLP.



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c) Subordinated debts

Funding Issued Value Remuneration p.a. Issue Date Maturity Jun 30, 2015 Jun 30, 2014

Banco do Brasil

FCO – Resources from Fundo Constitucional do Centro-Oeste

21,627,115 19,614,708

Funds applied (1)

21,269,823 18,836,754

Resources available (2)

351,999 767,736

Charges to capitalize 5,293 10,218

Subordinated CDB Issued in the Country

1,752,102 5,423,223

900,000 113.80% of CDI 2009 2014 -- 1,552,219

1,335,000 115.00% of CDI 2009 2015 -- 2,312,614

1,000,000 105.00% of CDI 2009 2015 1,752,102 1,558,390

Subordinated Debt Abroad 9,185,934 7,191,169

USD 300,000 8.50% 2004 2014 -- 676,323

USD 660,000 5.38% 2010 2021 2,089,201 1,481,905

USD 1,500,000 5.88% 2011 2022 4,726,767 3,352,295

USD 750,000 5.88% 2012 2023 2,369,966 1,680,646

Subordinated Letters of Credit 23,699,194 19,081,652

1,000,000 108.50% of CDI 2010 2016 1,722,733 1,526,296

2,055,100 111.00% of CDI 2011 2017 3,145,610 2,779,171

4,844,900

111.50% of CDI

1.06% to 1.11% + CDI

5.24% to 5.56% + IPCA

Fixed 10.51%

2012 2018 6,761,662 5,924,989

215,000 112.00% of CDI 2012 2019 294,315 259,738

4,947,300 111.00% of CDI 2013 2019 6,069,646 5,514,072

150,500 112.50% of CDI

5.45% + IPCA 2012 2020 208,769 183,878

377,100 112.00% to 114.00% of CDI 2014 2020 420,271 --

163,523 112.00% to 114.00% of CDI 2014 2020 187,809 165,559

1,594,580 113.00% to 115.00% of CDI 2014 2021 1,758,982 --

2,273,806 113.00% to 115.00% of CDI 2014 2021 2,638,237 2,321,977

400,000 8.08% + IPCA 2014 2022 491,160 405,972

Total Subordinated Debt from Banco do Brasil

56,264,345 51,310,752

Eliminated amount on consolidation (4,149) (11,437)

Total Subordinated Debt

Consolidated (3)(4)

56,260,196 51,299,315



(1) Remunerated at the rates on the loans funded with these amounts less the del credere of the financial institution, according to article 9 of Law No. 7,827/1989.

(2) Remunerated based on extra-market rate announced by the Banco Central do Brasil (Bacen), according to article 9 of Law No. 7,827/1989.

(3) R$ 38,144,335 thousand (R$ 33,772,649 thousand in June 30, 2014) of the total balance is considered tier II of the Referential Equity (RE).

(4) Includes the amount of R$ 5,496,460 thousand, relating to subordinated debt recorded in the line Debt Instruments Eligible as Capital.



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d) Equity and debt hybrid securities

Funding Issued Value Remuneration

p.a. Issue Date Jun 30, 2015 Jun 30, 2014

Perpetual Bonds

USD 1,500,000 8.50% 10/2009 4,717,759 3,347,176

USD 1,750,000 9.25% 01 and 03/2012 5,510,658 4,015,485

USD 2,000,000 6.25% 01/2013 6,387,329 4,439,216

R$ 8,100,000 5.50% 09/2012 8,274,981 8,317,938

USD 2,500,000 9.00% 06/2014 7,716,115 5,494,118

Total Banco do Brasil 32,606,842 25,613,933

Eliminated amount on consolidation (3,295) (13,808)

Total reclassified to shareholders' equity (Note 22.c) (8,100,000) --

Total BB-Consolidated 24,503,547 25,600,125

Current liabilities 420,979 295,356


R$ 20,917,586 thousand of the Perpetual Bonds is included in the Referential Equity (R$ 22,226,306 thousand as of

June 30, 2014). Of this amount, R$ 18,844,042 thousand are recorded in debt instruments eligible as capital (Note

27.b).

The bonds of USD 1,500,000 thousand, issued in October 2009, have the option of redemption at the discretion of

the Bank from 2020 or on each subsequent, semi-annual interest payment date, as long as it has been previously

authorized by Banco Central do Brasil (Bacen). In case the Bank does not exercise the option to redeem on October

2020, the interest on the bonds will be adjusted on this date to 7.782% plus the traded rate on 10 year North

American Treasury bonds. Thereafter, every 10 years, the interest on the bonds will be adjusted by taking into

account the traded rate of the 10 year North American Treasury bonds.

The bonds issued in January 2012 and March 2012 (reopening), of USD 1,000,000 thousand and USD 750,000

thousand respectively, and the bonds issued in January 2013 of USD 2,000,000 thousand, had their terms and

conditions modified on September 27, 2013, in order to adjust them to the rules of Bacen through Resolution No.

4,192 of March 1, 2013, which regulates the implementation of Basel III in Brazil. The changes were effective from

October 1, 2013, when the instruments were submitted to Bacen to obtain authorization to be included in the

Supplementary Capital (Tier I) of the Bank. The authorization was granted on October 30, 2013.

The bonds issued in June 2014 of USD 2,500,000 thousand, have the option of redemption at the discretion of the

Bank from June 18, 2024 or on each subsequent, semi-annual interest payment date, as long as it has been

previously authorized by the Central Bank of Brazil. If the Bank did not exercise the option to redeem in June 2024,

the interest on the bonds will be adjusted to 6.362% plus the traded rate on 10 year North American Treasury bonds.

If the Bank does not exercise the redemption option in April 2023 for the bonds issued in 2012, in April 2024 for the

bonds issued in 2013, and in June 2024 for the bonds issued in 2014, the rate of bond interest is adjusted on that

date and every 10 years according to the 10 year North American Treasury bondsat the time plus the initial credit

spread. The bonds have the following options of redemption, subject to prior authorization of Bacen:

(i) the Bank may, at its option, redeem the bonds in whole but not in part in April 2023 for the bonds issued in 2012, in April 2024 for the bonds issued in 2013, and in June 2024 for the bonds issued in 2014, and on each subsequent, semi-annual interest payment date, at the base redemption price; (ii) the Bank may, at its option, redeem the bonds in whole, but not in part, after five years from the date of issue, as long as it is before April 2023, for the bonds issued in 2012, before April 2024 for the bonds issued in 2013, and before April 2024 for the bonds issued in 2014, as a result of a tax event, at the base redemption price; (iii) the Bank may, at its option, redeem the bonds in whole but not in part, after five years from the date of issue, as long as it is before April 2023, for the bonds issued in 2012, and in April 2024 for the bonds issued in 2013, on the occurrence of a regulatory event, at the higher value between the base redemption price and the Make-whole amount. (iv) the Bank may, at its option, redeem the bonds in whole but not in part, after five years from the date of issue as long as it is before June 2024 for the bonds issued in 2014, on the occurrence of a regulatory event at the base redemption price.



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The bonds issued in October 2009 determine that the Bank suspends the semi-annual payments of interest and / or

accessories on those securities issued (which will not be due or accrued) if:

(i) (i) the Bank does not comply or the payment of such charges does not allow the bank to comply with the levels of capital adequacy, operating limits, or its financial indicators are under the minimum level required by Brazilian regulations applicable to banks; (i) Bacen or the regulatory authorities determine the suspension of payment of such charges; (ii) any event of insolvency or bankruptcy occurs; (iii) a default occurs; or (iv) the Bank has not distributed dividends or interest on equity to common shareholders for the period of calculation of such interest and / or accessories.

The bonds issued in January and March 2012, in January 2013 and in June 2014 determine that the Bank suspend

the semi-annual payments of interest and/or accessories on those securities issued (which will not be due or

accrued) if:

(i) distributable income for the period are not sufficient for making the payment (discretionary condition of the Bank); (ii) the Bank does not comply or the payment of such charges does not allow the Bank to comply with the levels of capital adequacy, operating limits, or its financial indicators are under the minimum level required by Brazilian regulations applicable to banks; (iii) Bacen or the regulatory authorities determine the suspension of payment of such charges; (iv) any event of insolvency or bankruptcy occurs; or (v) a default occurs.

According to Basel III rules, the bonds issued in January 2012, March 2012, in January 2013 and in June 2014 have

mechanisms of loss absorption. Moreover, if the item (i) occurs, the payment of dividends by Bank to its shareholders

will be limited to the minimum required determined by applicable law until the semi-annual interest payments and / or

accessories on those titles have been resumed in full. Finally, these bonds will expire permanently and at the

minimum value corresponding to the balance recorded in the Tier I capital of the Bank if:

(i) the main capital of the Bank is less than 5.125% of the amount of risk-weighted assets (RWA); (ii) the decision to make a capital injection from the public sector or an equivalent capital contribution to the Bank is taken, in order to maintain the bank’s viability; (iii) the Bank, on a discretionary assessment regulated by the CMN, sets out, in writing, the expiration of the bonds to enable the continuity of the Bank.

e) Sundry

Jun 30, 2015 Jun 30, 2014

Credit/debit card operations 18,061,779 16,442,338

Actuarial liabilities (Note 25.e) 8,187,620 7,733,781

Sundry creditors - domestic 6,863,771 6,663,861

Provisions for civil claims (Note 26.a) 5,994,830 5,125,428

Provisions for pending payments 4,527,548 4,144,011

Provision for labor claims (Note 26.a) 1,921,056 2,447,853

Liabilities for rendering payment services 1,786,403 1,372,492

Funds linked to loan operations 1,472,590 1,079,194

Sundry creditors - abroad 1,161,832 966,973

Liabilities for official agreements 1,035,605 396,897

Creditors of resources to be disbursed 858,386 1,197,668

Liabilities for premiums granted under customer loyalty schemes 601,577 1,681,562

Provisions for guarantees provided 362,654 146,575

Liabilities for assets acquisition 349,899 707,850

Creditors for residual value in advance 303,076 393,283

Liabilities for operations linked to assignments 293,950 188,243

Provision for losses with the Fundo de Compensação de Variação Salarial - FCVS 277,032 238,246

Guarantees on credits assigment 1,120 1,172

Other 129,941 75,241

Total 54,190,669 51,002,668





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56

20 - OTHER OPERATING INCOME/EXPENSES

a) Service fee income


Card income 2,516,364 2,532,706

Fund Management 1,526,719 1,355,609

Billing 844,373 712,901

Collection 532,619 456,146

Loans and guarantees provided 395,180 429,025

Interbank 379,072 363,805

Capital market income 262,353 219,059

Insurance, pension and capitalization 231,748 198,735

Fiduciary services 209,823 188,003

Consortium management fees 205,355 145,214

National Treasury and official funds management 202,425 164,969

Account fee 166,373 151,313

Provided to related companies 106,897 85,630

From non-financial associated/subsidiaries companies 106 10

Other services 672,574 629,592

Total 8,251,981 7,632,717

b) Bank fee income


Service packages 1,682,748 1,552,000

Loans and customer registration 607,933 582,113

Card income 481,504 443,898

Investment funds management 166,971 126,240

Funds transfer 155,826 135,510

Deposit account 110,515 98,910

Fiduciary services 27,112 22,103

Other 87,481 73,951

Total 3,320,090 3,034,725

c) Personnel expenses


Salaries (4,639,890) (4,125,615)

Social charges (1,595,912) (1,455,912)

Personnel administrative provisions (1,577,516) (1,303,574)

Benefits (1,204,581) (1,118,189)

Labor lawsuits (616,209) (337,568)

Pension plans (217,837) (190,665)

Training (29,673) (24,965)

Directors' and advisors' fees (23,056) (22,835)

Total (9,904,674) (8,579,323)



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d) Other administrative expenses


Amortization (1,574,608) (1,949,200)

Expenses with outsourced services (810,741) (946,563)

Data processing (693,456) (633,676)

Communications (655,095) (727,845)

Rent (625,257) (559,814)

Transport (551,364) (607,582)

Depreciation (545,005) (483,933)

Security services (522,713) (445,691)

Maintenance and upkeep (365,280) (308,552)

Financial system services (357,635) (343,617)

Water, electricity and gas (252,974) (181,133)

Specialized technical services (208,420) (184,020)

Advertising and marketing (122,938) (223,472)

Promotion and public relations (103,679) (112,098)

Domestic travel (62,524) (68,164)

Materials (60,290) (60,988)

Other (343,311) (297,481)

Total (7,855,290) (8,133,829)

e) Other operating income

1st half/2015 2nd quarter/2014

Update of deposits in guarantee 1,174,452 922,104

Cards transactions 893,091 645,615

Surplus allocation update - Previ Plan 1 (Note 25.f) 770,682 497,839

Recovery of charges and expenses 644,605 499,354

Income on receivables 414,943 299,398

Previ - Defined benefit plan income (Note 25.d) 277,859 891,400

Reversal of provisions - labor 256,608 538,981

Income from specific credits ans special operations - National Treasury 111,277 100,206

Subsidy of the National Treasury - MPO 102,707 74,501

Reversal of provisions - administrative and personnel expenses 95,559 54,245

Royalties and special participation 89,734 121,131

Adjustment of tax recoverable 56,123 64,719

From non-financial associates/subsidiaries 34,789 18,519

Dividends received 21,345 12,767

Reversal of provisions - civil and tax lawsuits 11,350 20,015

Negative foreign exchange readjustment/Reclassification of liability balances -- 1,700,328

Other 336,161 356,991

Total 5,291,285 6,818,113



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58

f) Other operating expenses


Credit/debit card transactions (1,770,239) (1,263,771)

Civil and tax claims (967,732) (953,020)

Compensation for transactions of Banco Postal (571,186) (94,551)

Actuarial liabilities update (492,046) (544,433)

Update of deposits in guarantee (1)

(433,049) (130,382)

Discounts granted on renegotiations (272,204) (295,695)

Provision for rendering of guarantees (175,751) (26,227)

Business partners (2)

(144,682) (11,004)

Failures/frauds and other losses (129,417) (75,745)

ATM Network (107,630) (133,289)

Life insurance premium - consumer credit (91,626) (64,682)

From non-financial associates/subsidiaries (50,500) (2,042)

Business relationship bonus (40,715) (108,394)

Other expenses of provisions from non-financial subsidiaries/associates (26,221) (4,598)

INSS - Social Security (20,918) (15,227)

Proagro Expenses (13,911) (12,549)

Fees for the use of Sisbacen - Banco Central do Brasil System (11,088) (13,100)

Previ - actuarial adjustment (5,090) (4,944)

Update of interest on own capital/dividends (4,429) (5,414)

Negative foreign exchange readjustment/ Reclassification of assets balances -- (1,301,518)

Other (146,306) (304,569)

Total (5,474,740) (5,365,154)

(1) Refers to the adjustment of the provision for deposit in court regarding the lawsuit (Income Tax and Social Contribution Tax on Net Income) asNote 26.d.

(2) Refers mainly to commission for loans originated by partners and commercial agreements with retailers.

21 - NON-OPERATING INCOME


Non-operating income 5,859,821 106,909

Capital gains (1)

5,781,441 10,817

Profit on disposal of assets 15,258 24,650

Rental income 5,285 9,038

Reversal of provision for devaluation of other assets 7,669 17,505

Profit on disposal of investiments / equity interest 2,545 2,114

Interest and inflation adjustement of debtors from disposal of property 2,899 3,606

Other non-operating income 44,724 39,179

Non-operating expenses (94,009) (52,019)

Devaluation of other assets (7,358) (9,628)

Loss on disposal of assets (4,354) (4,613)

Capital losses (49,874) (15,218)

Other non-operating expenses (32,423) (22,560)

Total 5,765,812 54,890

(1) Includes, in the 1st half/2015, the charges from the strategic partnership between BB Elo and Cielo in the electronic means of payment business(Note 2.a).



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22- SHAREHOLDERS' EQUITY

a) Book value and market value per common share

Jun 30, 2015 Jun 30, 2014

Shareholders' equity - Banco do Brasil 71,944,144 69,442,420

Book value per share (R$) (1)

25.73 24.81

Market value per share (R$) 24.28 24.85

Shareholders' equity - Consolidated (2)

80,634,473 69,651,198

(1) Calculated based on the equity of Baco do Brasil.

(2) Conciled with the equity of Banco do Brasil (Note 22.h).

b) Capital

The capital, entirely subscribed and paid-in, in the amount of R$ 60,000,000 thousand (R$ 54,000,000 thousand as

of December 31, 2014 and June 30, 2014) of Banco do Brasil is divided into 2,865,417,020 book-entry common

shares without par value. The Federal Government is the largest shareholder, holding control of the majority of our

voting shares.

The increase of the capital for the period as of June 30, 2014 and June 30, 2015, in the amount of R$ 6,000,000

thousand, resulted from the use of Statutory Reserve to Operating Margin, approved by the Special Meeting of

Shareholders held on April 28, 2015, and Banco Central do Brasil authorization in July 20, 2015.

The Bank may, even without amending its by-laws, if approved by the Meeting of Shareholders, and in the conditions

established therein, increase its capital up to the limit of R$ 120,000,000 thousand by issuing common shares, for

which shareholders should be granted preference in the subscription in proportion to the number of shares held.

c) Instruments Qualifying to Common Equity Tier 1 Capital

On September 26, 2012, the Bank signed a Loan Agreement with the Federal Government, as hybrid capital and

debt instrument valued at up to R$ 8,100,000 thousand, without maturity date, with fixed remuneration, semiannual

interest payments, whose funds were allocated to finance agribusiness.

Until August 27, 2014, this instrument was authorized by Bacen to be included in the Tier I of the referential equity

(Additional Tier I Capital) and it was subject to the limitation set out in article 28 of the Resolution CMN 4,192 dated

March 1, 2013 (Note 27.b).

On August 28, 2014, in the terms of Law 12,793, dated April 2, 2013, an amendment to the contract was signed

aiming to make the instrument eligible as Common Equity Tier I Capital, in accordance with article 16 of Resolution

CMN 4,192/2013.

After the amendment in the contract, compensation became fully variable and the interest will be due on periods

matching with the fiscal year of the Bank, starting in January 1 and ending in December 31 of each year.

Remuneration for each fiscal year will be paid in a single annual installment adjusted by the Selic rate until the date of

effective payment, within 30 calendar days after making the payment of dividends for the result recorded in the fiscal

year.

The payment of compensation will be made exclusively with funds from profits and profit reserves that may be

distributed as at the year-end prior to the calculation date. Payment is ultimately at management`s discretion and

there will not be cumulative unpaid interest. If payment or dividend credit are not made (including in the form of

interest on own capital) before December 31 of the following fiscal year, the accrued amounts will no longer be due.

If the balance of retained earnings, of profit reserves, including legal reserve, and of the Bank’s capital reserve are

insufficient to absorb losses calculated in the closing balance of the fiscal year, this instrument will not be

remunerated and the Bank will use the accrued interest and the principal balance, in this order, up to the amount

necessary to offset the remaining losses, effectively constituting a pay down of the instrument.



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The instrument does not have maturity date and it can be payable only in situations of the dissolution of the issuing

institution or by repurchase operations authorized by Bacen. In case of dissolution of the Bank, the payment of the

principal and the debt charges will be subordinated to the payment of other liabilities.

There will not be, under any circumstances, preferred compensation of the instrument, including relating to other

equity elements classified in the Reference Equity.

On September 22, 2014, Bacen considered the instrument qualifying to the Common Equity Tier I Capital in the form

of CMN Resolution 4,192/2013 from August 28, 2014. So the instrument mentioned was reclassified to the

Shareholders` Equity, for purposes of disclosure in the consolidated financial statements.

d) Revaluation reserves

The revaluation reserves, totaling R$ 2,764 thousand (R$ 2,805 thousand as of December 31, 2014 and R$ 4,524

thousand as of June 30, 2014), refer to revaluations of assets made by the associates/subsidiaries.

In the first half of 2015, there was a reserve realization of R$ 41 thousand (R$ 40 thousand in the first half 2014), due

to depreciation, transferred to Retained Earnings (Accumulated Losses), net of taxes. In accordance with CMN

Resolution 3,565/2008, the remaining amount will be maintained until the date of its effective realization.

e) Capital and profit reserves

Jun 30, 2015 Jun 30, 2014

Capital Reserves 14,326 10,768

Profit Reserves 25,767,559 23,260,140

Legal reserve 5,898,540 5,180,834

Statutory reserves 19,869,019 18,079,306

Operating margin 16,690,614 13,874,993

Equalization of dividends 3,178,405 4,204,313

The legal reserve is intended to ensure the integrity of the capital and can only be used to offset losses or increase

capital. The Legal reserve is increased by 5% of the net profit for the period, before any other allocation, as long as it

does not exceed 20% of capital.

The Statutory reserve for operating margin aims to guarantee an operating margin consistent with the development of

the Bank’s operations. It consists of up to 100% of net income, after the legal allocations, including dividends, and is

limited to 80% of the capital.

Statutory reserve for dividend equalization provides funds for the payment of dividends, consisting of up to 50% of

the net income, after legal allocations, including dividends, limited to 20% of the capital.

f) Earnings per share


Net income attributable to shareholders (R$ thousand) 8,606,461 5,565,190

Weighted average number of shares (basic and diluted) 2,796,131,188 2,803,466,870

Earnings per share (basic and diluted) (R$) 3.08 1.99



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g) Interest on own capital/Dividends and destination of the income

The calculation base of dividends are shown bellow, as well as destination of the income of the period:


1) Net income – Banco do Brasil 8,606,461 5,565,190

2) Interest on instrument elegible to common equity tier 1 174,982 --

3) Calculation base of dividends (item 1 + item 2) 8,781,443 5,565,190

Dividends - Payout (40% of item 3) 3,512,578 2,226,076

Minimum required dividend (1)

2,320,955 1,503,427

Additional dividend 1,191,623 722,649

4) Allocation:

Net income 8,606,461 5,565,190

Retained earnings 3,700 7,876

Distributed income 8,610,161 5,573,066

Legal reserve (5% of item 1) (Note 22.e) 430,323 278,259

Dividends and interest on own capital 3,512,578 2,226,076

Statutory reserve (Note 22.e) 5,928,721 3,296,342

Statutory reserves used for equalization of dividends

(1,261,461) (227,611)

(1) Determined according to law 6,404/1976 and Resolution CCE No. 10/1995 of the Conselho de Coordenação e Controle das Empresas Estatais, current DEST (Departamento de Coordenação e Governança das Empresas Estatais do Ministério do Planejamento, Orçamento e Gestão).

Introducing payment schedule of interest on own capital and dividends:

Amount Amount per share (R$) Base date of payment Payment date

1st quarter/2015

Interest on own capital paid (1)

1,054,134 0.377 Mar 23, 2015 Mar 31, 2015

Dividends paid 1,261,461 0.451 May 21, 2015 May 29, 2015

2nd quarter/2015


810,594 0.291 Jun 11, 2015 Jun 30, 2015

Complementary interest on own capital payable (1)

347,343 0.124 Aug 21, 2015 Sep 1, 2015

Dividends payable 39,046 0.014 Aug 21, 2015 Sep 1, 2015

Total destined to shareholders 3,512,578 1.257

Interest on own capital (1)

2,212,071 0.792

Dividends 1,300,507 0.465

(1) Amounts subject to the rate of 15% Withholding Tax.

Amount Amount per share (R$) Base date of payment Payment date

1st quarter/2014


882,332 0.315 Mar 11, 2014 Mar 31, 2014

Dividends paid 227,611 0.081 May 19, 2014 May 30, 2014

2nd quarter/2014


899,716 0.321 Jun 11, 2014 Jun 30, 2014

Dividends paid 216,417 0.077 Aug 19, 2014 Aug 29, 2014

Total destined to shareholders 2,226,076 0.794

Interest on own capital (1)

1,782,048 0.636

Dividends 444,028 0.158

(1) Amounts subject to the rate of 15% Withholding Tax.

In accordance with Laws 9,249/1995 and 9,430/1996 and the Bank's Bylaws, Management decided on the payment

of Interest on own capital to its shareholders plus additional dividends, equivalent to 40% of the net income.

The interest on own capital is calculated based on adjusted net equity value and is limited on a pro rata die basis to

the variation of long-term interest rate, as long as there is profit (before the deduction of interest on own capital) or

reserves for retained earnings and profit reserves of at least twice its value.



half 2015


62

To comply with the Income Tax legislation, the amount of interest on own capital was recorded as "Financial

expenses" and, for purposes of disclosure in these financial statements, reclassified to "Retained earnings". The total

interest on own capital in the first half of 2015, provided an expense reduction on tax charges totaling R$ 884,828

thousand (R$ 712,819 thousand in the first half of 2014).

h) Reconciliation of Net Income and Shareholders' Equity

Net Income Shareholders’ Equity

1st half/2015 1st half/2014 Jun 30, 2015 Jun 30, 2014

Banco do Brasil 8,606,461 5,565,190 71,944,144 69,442,420

Instruments qualifying to common equity tier 1 capital (1)

174,982 -- 8,100,000 --

8,781,443 5,565,190 80,044,144 69,442,420

Unrealized gains (2)

44,465 (59,016) (356,005) (392,448)

Non-controlling Interests -- -- 946,334 601,226

BB-Consolidated 8,825,908 5,506,174 80,634,473 69,651,198

(1) The Instrument Qualifying as CET1 was registered in the liabilities in the Individual Financial Statements and its interest recognized as expenses with securities sold under repurchase agreements, meanwhile, this Instrument was reclassified to Shareholder’s Equity in the prudential consolidated financial statements, aiming to improve the quality and transparency of these consolidated financial statements (Note 22.c).

(2) In the first half of 2015, there was the realization of unrealized results arising from the assignment of credits from the Bank to Ativos S.A., in the other periods the unrealized results were eliminated in the consolidation process.

i) Accumulated Other Comprehensive Income


Opening balance

Net change Tax effects Closing balance Opening balance

Net change Tax effects Closing balance

Securities available for sale

Banco do Brasil (757,714) (682,346) 162,351 (1,277,709) (294,593) (256,018) 201,514 (349,097)

Subsidiary abroad 30,118 (4,633) 398 25,883 24,654 5,298 1,066 31,018

Associates and subsidiaries (191,869) 35,856 (14,361) (170,374) (193,076) 137,983 (55,174) (110,267)

Cash Flow Hedge

Associates and subsidiaries 1,716 (2,600) 884 -- 1,562 48 (20) 1,590

Actuarial Gains/(Losses) on Pension Plans

(8,680,091) (3,884,109) 1,419,368 (11,144,832) (2,670,596) (6,271,308) 2,701,472 (6,240,432)

Total (9,597,840) (4,537,832) 1,568,640 (12,567,032) (3,132,049) (6,383,997) 2,848,858 (6,667,188)

j) Noncontrolling Interests

Shareholders’ Equity

Jun 30, 2015 Jun 30, 2014

Banco Patagonia S.A. 946,307 601,199

Besc Distribuidora de Títulos e Valores Mobiliários S.A. 27 27

Non-controlling Interests 946,334 601,226



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63

k) Shareholdings (Number of shares)

Number of shares issued by the Bank to shareholders which, directly or indirectly, hold more than 5% of the shares:

Sharedholders Jun 30, 2015 Jun 30, 2014

Shares % Total Shares % Total

Federal Government 1,659,005,282 57.9 1,667,882,382 58.2

Ministério da Fazenda 1,453,487,115 50.7 1,453,487,115 50.7

Fundo Fiscal de Investimento e Estabilização 110,650,000 3.9 110,650,000 3.9

Caixa F1 Garantia Construção Naval 87,368,167 3.0 96,245,267 3.3

Fundo Garantidor para Investimentos 7,500,000 0.3 7,500,000 0.3

Caixa de Previdência dos Funcionários do Banco do Brasil - Previ 297,337,914 10.4 298,345,514 10.4

BNDES Participações S.A. - BNDESPar (1)

-- -- 5,522,648 0.2

Treasury shares (2)

69,240,496 2.4 66,535,220 2.3

Other Shareholders 839,833,328 29.3 827,131,256 28.9

Total 2,865,417,020 100.0 2,865,417,020 100.0

Resident Shareholders 2,247,611,570 78.4 2,288,982,808 79.9

Non Resident Shareholders 617,805,450 21.6 576,434,212 20.1

(1) Related to the Controller, but not part of the control block.

(2) On June 30, 2015 includes 42,709 shares of the Bank held by BB DTVM (29,138 shares in June 30, 2014).

Number of shares issued by the Bank, held by the Board of Directors, the Executive Board and the Audit Committee:

Commom shares (ON)

(1)

Jun 30, 2015 Jun 30, 2014

Board of Directors (except for Bank’s CEO, listed in the Bank’s Executive Committee) 1 8,007

Executive Committee 166,123 154,233

Fiscal Council 1,176 --

Audit Committee 10,075 75

(1) The shareholding interest of the Board of Directors, Executive Committee, Fiscal Council and Audit Committee represents approximately 0.006%

of the Bank's capital stock.

l) Movement of shares outstanding/Free Float

Jun 30, 2015 Jun 30, 2014

Total % Total %

Free float at the period date 840,019,565 29.3 833,621,216 29.1

Disposal of shares by Caixa F1 Garantia Construção Naval -- 1,900,000

Acquisition of shares by BNDESPar -- --

Disposal of shares by FGO - Shares Investments -- 896,508

Disposal / (Acquisition) of shares by Previ 49,800 446,500

Acquisition of shares - repurchase program (560,000) (9,964,900)

Other Changes (1)

157,830 69,683

Free Float at the period end date (2)

839,667,195 29.3 826,969,007 28.9

Outstanding shares 2,865,417,020 100.0 2,865,417,020 100.0

(1) Refers mainly to changes coming from Technical and Advisory Bodies.

(2) According to the Law 6,404/1976 and the regulation of BM&FBovespa's New Market. The shares held by the Board of Directors and Executive committee are not included.

m) Treasury shares

On July 13, 2012, the Board of Directors approved the repurchase program of up to 50 million shares within 180 days

from that date, with the objective of acquiring shares to be held in treasury for subsequent sale or withdrawal without

further capital reduction, aiming to generate value for shareholders. This program was in effect until January 8, 2013,

and 20,200,000 shares were acquired for an amount of R$ 461,247 thousand. Minimum, average and maximum cost

per share are R$ 18.28, R$ 22.83 e R$ 26.78 respectively.



half 2015


64

On June 13, 2013, the Board of Directors approved the repurchase program of up to 50 million shares, under the

same conditions as the previous program, however, valid for up to 365 days from that date. This program finished on

June 6, 2014, and 43,126,700 shares were acquired for R$ 1,014,504 thousand. The minimum, average and

maximum cost per share were R$ 18.84, R$ 23.52 and R$ 28.67 respectively. From the acquisitions relating to this

program, 353,756 shares were used for variable compensation programs.

On June 06, 2014, the Board of Directors approved the repurchase program of up to 50 million shares, under the

same conditions as the previous program. This program finished on May 18, 2015, and 6,021,900 shares were

acquired for R$ 155,481 thousand. The minimum, average and maximum cost per share were R$ 22.66, R$ 25.82

and R$ 29.27 respectively. From the acquisitions relating to this program, 318,633 shares were used for variable

compensation programs.

On May 18, 2015, the Board of Directors approved the repurchase program of up to 50 million shares, under the

same conditions as the previous program. Until June 30, 2015, no shares were acquired this repurchase program.

On June 30, 2015, the Bank had 69,240,496 treasury shares, amounting to R$ 1,629,478 thousand, of which

68,624,558 shares result from repurchase programs, 615,908 shares result from acquisition for share-based payment

and 30 were shares left over from mergers.

n) Share-Based Payment

2011 Program

In February 2012, 132,501 shares were purchased at an average cost per share of R$ 27.61 and placed in treasury.

On March 8, 2012, 130,131 shares were transferred to the members of the Executive Commitee and blocked for

trading. The annual installments were released for trading on March 08, 2013, March 10, 2014 and March 09, 2015,

respectively.

2012 Program

The 2012 Program was developed under the CMN Resolution 3,921 as of November 25, 2010, which describes the

remuneration policy for executives of financial institutions and establishes that at least 50% of variable remuneration

shall be paid in shares or share-based instruments, of which at least 40% should be deferred for future payment, over

a minimum period of three years, defined according to the risks and activities overseen by the executive.

The Bank purchased 212,301 shares for payment of variable remuneration, at an average cost of R$ 26.78 per

share. Of these, 53,108 shares were transferred on March 10, 2014 and 53,063 shares on March 09, 2015, the other

shares were deferred for future transfer, if all transfer requirements are met, as scheduled below.

Share-based Payment - Estimated schedule for transfer Number of shares Scheduled Date

Second installment 53,063 Mar 08, 2016

Third installment 53,063 Mar 08, 2017

Total 106,126

The BB DTVM purchased 19,792 shares of Banco do Brasil (BBAS3) at an average cost of R$ 26.78 per share, in

compliance with the variable remuneration policy defined for the Executive Board, of which 13,452 shares have been

transferred to the members of Executive Committee (3,170 shares in 1st quarter/2015). The other 6,340 shares are

deferred for future payment, as scheduled below, if all transfer requirements are met.



Fourth installment 3,170 Mar 08, 2017

Total 6,340



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65

2013 Program

The Bank allocated 353,800 treasury shares with an average cost of R$ 20.36 per share to the variable remuneration

program, of which 70,856 shares have already been transferred on March 11, 2014 and 70,736 shares on March 2,

2015. The others installments were deferred for future transfer as appropriate considering the risks and the activities

managed by the executives. The schedule below summarizes the future transfers to beneficiaries if all transfer

requirements are met.


Second installment 70,736 Mar 02, 2016


Fourth installment 70,736 Mar 02, 2018

Total 212,208

In compliance with the variable remuneration policy defined for the Executive Board of BB DTVM, 24,546 shares

were acquired by BB DTVM at an average cost of R$ 23.83. Of these, 4,918 shares were transferred on 2014 year

and the remaining shares were deferred for future transfer, in four annual installments, as scheduled below, if all

transfer requirements are met.


First installment 4,907 Apr 16, 2015

Second installment 4,907 Apr 18, 2016

Third installment 4,907 Apr 17, 2017

Fourth installment 4,907 Apr 16, 2018

Total 19,628

2014 Program

The Bank allocated 316,683 treasury shares with an average cost of R$ 24.08 per share to the variable remuneration

program, of which 63,399 shares have already been transferred on February 27, 2015 and the others were deferred

for future transfer as appropriate considering the risks and the activities managed by the executives. The schedule

below summarizes the future transfers to beneficiaries if all transfer requirements are met.


First installment 63,321 Feb 27, 2016

Second installment 63,321 Feb 27, 2017

Third installment 63,321 Feb 27, 2018

Fourth installment 63,321 Feb 27, 2019

Total 253,284

The BB DTVM purchased 27,063 shares of Banco do Brasil (BBAS3) at an average cost of R$ 22.98 per share, in

compliance with the variable remuneration policy defined for the Executive Board, of which 5,415 shares have been

transferred to the members of Executive Committee in 1st half /2015. The other shares are deferred for future

payment, as scheduled below, if all transfer requirements are met.


First installment 5,412 Apr 01, 2016

Second installment 5,412 Apr 03, 2017

Third installment 5,412 Apr 02, 2018

Fourth installment 5,412 Apr 01, 2019

Total 21,648



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66

23 - TAXES

a) Breakdown of income tax (IR) and social contribution expenses (CSLL)


Current values (5,564,996) (2,424,270)

Domestic income tax and social contribution (5,295,704) (2,172,470)

Foreign income tax (269,292) (251,800)

Deferred values 4,573,472 680,232

Deferred tax liabilities (477,146) (655,915)

Leasing transactions - portfolio adjustment and accelerated depreciation 42,057 42,043

Mark to Market (MTM) (258,804) 39,425

Actuarial gains (97,375) (444,004)

Interest and inflation adjustment of fiscal judicial deposits (173,220) (146,685)

Foreign profits (39,767) (153,336)

Transactions carried out on the futures market 49,059 55,170

Recovered term credits 904 (48,528)

Deferred Tax Assets 5,050,618 1,336,147

Temporary differences 4,934,600 1,408,576

Tax losses/CSLL negative bases (42,141) (680)

Mark to Market (MTM) 158,159 (71,749)

Total (991,524) (1,744,038)

b) Reconciliation of income tax and social contribution charges


Profit before taxation and profit sharing 11,075,556 8,110,959

Total charges of IR (25%) and CSLL (15%) (4,430,222) (3,244,384)

Charges upon Interest on own capital 884,828 712,819

Equity in subsidiaries and associates 1,240,594 205,585

Employee profit sharing 437,063 283,139

Other amounts 876,213 298,803

Income Tax and Social Contribution (991,524) (1,744,038)

c) Tax expenses


Cofins (1,882,071) (1,209,028)

ISSQN (393,668) (340,417)

PIS/Pasep (338,391) (202,078)

Other (204,748) (153,269)

Total (2,818,878) (1,904,792)



half 2015


67

d) Deferred tax liabilities

Jun 30, 2015 Jun 30, 2014

Arising from positive adjustments of benefits plans (1)

49,588 1,935,548

Arising from interest and inflation adjustment of fiscal judicial deposits 473,949 432,911

Arising from mark-to-market 577,695 224,949

Arising from recovered term credits 182,906 155,280

Related to foreign profit 39,767 153,336

Overseas entities 82,764 11,898

Arising from leasing portfolio adjustment 78,092 96,117

Arising from futures market transactions 3,576 8,754

Other 2,032 2,035

Total deferred tax liabilities 1,490,369 3,020,828

Income tax 644,370 1,692,859

Social contribution 393,521 991,352

Cofins 389,146 289,563

PIS/Pasep 63,332 47,054

(1) The realization of deferred tax liabilities on actuarial gains is dependent on the realization of the values of actuarial asset (Note 25).

e) Deferred tax assets (Tax Credit)


Balance Addition Write-off Balance Balance

Temporary differences 23,761,588 11,712,671 (4,714,854) 30,759,405 22,513,503

Allowance for loan losses 15,241,678 5,567,561 (3,505,505) 17,303,734 13,982,243

Provisions 6,821,391 1,402,294 (591,193) 7,632,492 6,976,517

Negative adjustments of benefits plans 165,954 107,607 -- 273,561 193,124

Mark to Market (MTM) 808,156 922,177 (596,335) 1,133,998 702,212

Other provisions (1)

724,409 3,713,032 (21,821) 4,415,620 659,407

CSLL written to 18% (MP 2,158/2001) 1,276,570 -- (117,387) 1,159,183 1,288,045

Tax losses/ negative bases 19 2 -- 21 8

Excess depreciation 189,611 -- (17,755) 171,856 208,678

Total deferred tax assets 25,227,788 11,712,673 (4,849,996) 32,090,465 24,010,234

Income tax 15,197,847 7,550,483 (2,925,144) 19,823,186 14,393,081

Social contribution 9,942,356 4,062,479 (1,860,049) 12,144,786 9,541,262

Cofins 75,342 85,774 (55,745) 105,371 65,283

PIS/Pasep 12,243 13,937 (9,058) 17,122 10,608

(1) Includes , in the 1st half/2015, the amount relating to the tax charges from the unrealized result derived from the strategic partnership between BB Elo and Cielo in the electronic means of payment business (Note 2.a).

f) Deferred tax assets (Tax Credit - Not Recorded)

Jun 30, 2015 Jun 30, 2014

Overseas tax credits 950,305 639,103

Temporary differences -- 82,812

Total tax credits 950,305 721,915

Income tax 593,941 451,191

Social contribution 356,364 270,724



half 2015


68

Realization expectative

The expectation of realization of the deferred tax assets (tax credits) is based on a technical study, prepared in

June 30, 2015, and the present value is determined based on the average rate of funding of Banco do Brasil.

Future value Present value

In 2015 5,158,497 4,541,455

In 2016 8,234,286 7,088,294

In 2017 8,219,293 6,868,898

In 2018 7,982,944 6,483,482

In 2019 2,065,401 1,627,642

In 2020 98,017 52,789

In 2021 98,155 48,834

In 2022 73,277 34,071

In 2023 87,259 38,023

In 2024 73,058 29,901

IN 2025 278 104

Total tax credits June 30, 2015 32,090,465 26,813,493

In the first half 2015, it was possible to observe the realization of tax credits at Banco do Brasil, in the amount of

R$ 4.670.892 thousand corresponding to 69.24% of the projection of use for the period of 2015 contained in the

technical study prepared on December 31, 2014.

The realization of the nominal value of tax credits registered, considering the recovery of those written-off during the

lawsuits (Note 26.d), based on a technical study conducted by Banco do Brasil on June 30, 2015, proportioned as

shown below:

Tax losses/CSLL

recoverable (1)

Diferences

intertemporary (2)

In 2015 15% 15%

In 2016 32% 25%

In 2017 30% 25%

In 2018 13% 25%

In 2019 1% 7%

From 2020 9% 3%

(1) Projected consumption linked to the capacity to generate IR and CSLL taxable amounts in subsequent periods.

(2) The consumption capacity results from the movements of provisions (expectation of reversals, write-offs and uses).

24 - RELATED PARTY TRANSACTIONS

The costs of salaries and other benefits granted to key management personnel of the Banco do Brasil Group

(Executive Board, Audit Committee, Board of Directors and Fiscal Council):


Short-term benefits 28,241 26,027

Fees and social charges 20,153 20,158

Executive Board 18,656 18,590

Audit Committee 1,066 1,216

Board of Directors 235 185

Fiscal Council 196 167

Variable remuneration of management - cash 6,669 4,883

Other 1,419 986

Share-based payment benefits 5,889 3,369

Total 34,130 29,396

In accordance with the Bank’s policy of variable remuneration, established in compliance with CMN Resolution

3,921/2010, the variable remuneration of Executive Directors is paid in shares (Note 22.n).



half 2015


69

The Bank does not offer post-employment benefits to its key management personnel, except for those who are part

of the staff of the Bank.

The Bank does not grant loans to the key management personnel, pursuant to the prohibition to all financial

institutions established by Banco Central do Brasil.

The transactions between the consolidated companies are eliminated in the consolidated financial statements. In

relation to transactions with entities controlled by the Tesouro Nacional (National Treasury) by joint control or

significant influence, the Bank discloses only the most significant transactions.

The Bank disclosure the transactions with National Treasury. Among the transactions, the operations of extension of

rural credit are highlighted, which are rights with the National Treasury, derived from cession of operations of rural

credit extensioned under the Resolution CMN 2,238/1996. The amounts receivable of National Treasury regarding

the interest rates equalization of programs encouraged by the Federal Government, under the Law 8,427/1992 are

highlighted too. The equalization of rates, a type of economical subsidy, represents a differential rate between the

funding cost, plus the administrative and tax costs, and the charges for the borrower of the rural credit. The amount of

equalization is adjusted by Selic Rate since its calculation to the payment from National Treasury, that is performed

according to budget programming of that Body, as established by legislation, preserving the remuneration of the

Bank.

The Bank has banking transactions with these related parties, such as interest bearing and non-interest bearing

deposits, loans (except for key management personnel), sale and repurchase transactions and acquisition of loan

portfolios. There are also services rendered and guarantee agreed.

These transactions are conducted under terms and rates consistent with those practiced with third parties when

applicable. These transactions do not involve payment risks.

The resources applied in federal government securities and in funds and programs from onlendings of the Official

Institutions are listed in Notes 7 and 17, respectively.

The Bank has instituted the Fundação Banco do Brasil (FBB), which aims to promote, support, encourage and

sponsor actions in the fields of education, culture, health, social welfare, recreation and sports, science and

technology and assistance to urban-rural communities. In the 1st half/2015, the Bank made contributions to FBB in

the amount of R$ 23,502 thousand (R$ 23,061 thousand in the 1st half/2014).

The Bank granted to BB Elo Cartões Participações S.A., its wholly owned subsidiary, irrevocably and irreversibly, and

without accounting effect, the contractual rights on the receipt of interchange fees inherent to the activities of

management of post-paid bill payment transactions and management of purchasing functionality via debit in payment

arrangements, due to the formation of strategic partnership with Cielo (Note 2).

The information related to Bank's contributions and other transactions with other sponsored entities are disclosed in

Note 25.



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70

Acquisition of Portfolio of Loans Transferred by Banco Votorantim


Assignment with substantial retention of risks and rewards (with co-obligation) 6,632,066 3,877,834

Unrealized result, net of tax effects (balance) 23,530 86,303

Summary of related party transactions

Jun 30, 2015

Controller (1)

Subsidiaries (2)

Jointly

controlled (3)

Associates

(4)

Key Management personnel

(5)

Other related parties

(6)

Total

Assets

Interbank deposits -- 69,709,961 1,396,494 -- -- -- 71,106,455

Securities -- 47,991,956 13,375 -- -- -- 48,005,331

Loan operations -- 277,032 17,522,602 63,566 -- 31,422,915 49,286,115

Receivables from related companies -- 63,459 19,026 -- -- 168 82,653

Other assets (7)

17,843,615 309,608 2,212,905 43 -- 233,448 20,599,619

Liabilities

Demand deposits 316,922 43,363 160,995 112 1,109 1,805,116 2,327,617

Saving deposits -- -- -- -- 3,360 277,781 281,141

Remunerated time deposits -- 5,519,465 789,012 -- 495 17,111,734 23,420,706

Securities sold under repurchase agreements -- 7,294,252 4,650,374 -- -- 3,118,722 15,063,348

Borrowings and onlendings 763,572 58,205,088 -- -- -- 89,270,486 148,239,146

Other liabilities 415,755 49,366,292 458,647 14,026 -- 285,583 50,540,303

Guarantees and Other Coobligations (8)

-- 3,398,904 6,800,000 -- -- -- 10,198,904

1st half/2015

Income from interest and rendering of services

3,869,752 5,321,129 1,883,560 760 -- 1,600,151 12,675,352

Expenses from raising funds (43,739) (5,649,241) (37,222) (13,737) (203) (3,196,739) (8,940,881)

(1) National Treasury and agencies under the direct administration of the Federal Government.

(2) Companies are listed in Note 3 identified by item (1).

(3) Companies are listed in Note 3 identified by item (2), as well as Banco Votorantim, Mapfre BB SH2, BB Mapfre SH1, Brasilprev and Brasilcap.

(4) Cibrasec, SBCE and Tecban.

(5) Board of Directors, Executive Board, Audit Committee and Fiscal Council.

(6) Includes the most significant transactions with state-owned companies and private companies controlled by the Federal Government, such as: Petrobras, CEF, BNDES, Eletrobras, Fundo de Amparo ao Trabalhador – FAT, Fundo de Aval para Geração de Emprego e Renda – Funproger. In addition, entities linked to employees and sponsored entities: Cassi, Previ and others.

(7) The transactions with the Controller refer to Extension of rural credits – National Treasury transactions (Note 10. a), interest rate equalization – agricultural crop and receivables – National Treasury (Note 10.b).

(8) Includes Contract of Opening of a Revolving Interbank Credit Line with Banco Votorantim.



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Summary of related party transactions

Jun 30, 2014

Controller (1)

Subsidiaries (2)

Jointly

controlled (3)

Associates

(4)

Key Management personnel

(5)

Other related parties

(6)

Total

Assets

Interbank deposits -- 48,120,498 841,380 -- -- 6,732 48,968,610

Securities -- 42,932,910 71,654 -- -- -- 43,004,564

Loan operations -- 84,411 12,805,122 84,509 -- 22,554,695 35,528,737

Receivables from related companies -- 43,751 15,081 -- -- -- 58,832

Other assets (7)

11,891,053 40,313 3,122,464 -- -- 100,307 15,154,137

Liabilities

Demand deposits 554,986 43,214 63,961 75 881 807,774 1,470,891

Saving deposits -- -- -- -- 1,776 325,926 327,702

Remunerated time deposits -- 8,318,950 241,634 -- 2,968 17,757,715 26,321,267

Securities sold under repurchase agreements -- 6,023,543 3,930,404 -- -- 2,686,308 12,640,255

Borrowings and onlendings 1,130,241 33,581,284 -- -- -- 89,862,924 124,574,449

Other liabilities (8)

8,459,971 43,711,017 202,331 11,937 -- 162,328 52,547,584

Guarantees and Other Coobligations (9)

-- 2,733,480 6,800,000 -- -- -- 9,533,480

1st half/2014

Income from interest and rendering of services

2,685,793 3,052,184 1,180,580 672 -- 976,003 7,895,232

Expenses from raising funds (38,368) (2,279,569) (49,674) (11,625) (248) (2,202,778) (4,582,262)

(1) National Treasury and agencies under the direct administration of the Federal Government.

(2) Companies are listed in Note 3 identified by item (1).

(3) Companies are listed in Note 3 identified by item (2), as well as Banco Votorantim, Mapfre BB SH2, BB Mapfre SH1, Brasilprev and Brasilcap.

(4) Cibrasec, SBCE and Tecban.

(5) Board of Directors, Executive Board, Audit Committee and Fiscal Council.

(6) Includes the most significant transactions with state-owned companies and private companies controlled by the Federal Government, such as: Petrobras, CEF, BNDES, Eletrobras, Fundo de Amparo ao Trabalhador – FAT, Fundo de Aval para Geração de Emprego e Renda – Funproger. In addition, entities linked to employees and sponsored entities: Cassi, Previ and others.

(7) The transactions with the Controller refer to Extension of rural credits – National Treasury transactions (Note 10.a), interest rate equalization – agricultural crop and receivables – National Treasury (Note 10.b).

(8) Includes the Contract Hybrid Capital and Debt Instruments – Perpetual Bonds with the Federal Government, reclassified on August 28, 2014 to Shareholders' Equity (Note 22.c).

(9) Includes Contract of Opening of a Revolving Interbank Credit Line with Banco Votorantim.



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25 - EMPLOYEE BENEFITS

Banco do Brasil sponsors the following private pension and complementary health plan entities that provide for

retirement and healthcare benefits for its employees:

Plans Benefits Classification

Previ - Caixa de Previdência dos Funcionários do Banco do Brasil

Previ Futuro Retirement and Pension Defined contribution

Plano de Benefícios 1 Retirement and Pension Defined benefit

Plano Informal Retirement and Pension Defined benefit

Cassi - Caixa de Assistência dos Funcionários do Banco do Brasil

Plano de Associados Health Care Defined benefit

Economus – Instituto de Seguridade Social

Prevmais Retirement and Pension Variable contribution

Regulamento Geral Retirement and Pension Defined benefit

Regulamento Complementar 1 Retirement and Pension Defined benefit

Grupo B’ Retirement and Pension Defined benefit

Plano Unificado de Saúde - PLUS Health Care Defined benefit

Plano Unificado de Saúde - PLUS II Health Care Defined benefit

Plano de Assistência Médica Complementar - PAMC

Health Care Defined benefit

Fusesc - Fundação Codesc de Seguridade Social Multifuturo I Retirement and Pension Variable contribution

Plano de Benefícios I Retirement and Pension Defined benefit

SIM - Caixa de Assistência dos Empregados dos Sistemas Besc e Codesc, do Badesc e da Fusesc

Plano de Saúde Health Care Defined contribution

Prevbep - Caixa de Previdência Social Plano BEP Retirement and Pension Defined benefit

Number of participants covered by benefit plans sponsored by the Bank

Jun 30, 2015 Jun 30, 2014

Number of participants Number of participants

Active Retired/Users Total Active Retired/Users Total

Retirement and Pension Plans

116,073 105,479 221,552 115,120 104,615 219,735

Plano de Benefícios 1 - Previ

23,167 88,589 111,756 24,858 87,730 112,588

Plano Previ Futuro 76,225 838 77,063 73,314 717 74,031

Plano Informal -- 3,593 3,593 -- 3,835 3,835

Other plans 16,681 12,459 29,140 16,948 12,333 29,281

Health Care Plans 117,152 96,286 213,438 116,199 95,598 211,797

Cassi 104,211 88,997 193,208 102,997 87,741 190,738

Other plans 12,941 7,289 20,230 13,202 7,857 21,059

Bank’s contributions to benefit plans


Retirement and Pension Plans 631,709 641,053

Plano de Benefícios 1 - Previ (1)

264,684 301,643

Plano Previ Futuro 217,526 189,874

Plano Informal 86,848 89,494

Other plans 62,651 60,042

Health Care Plans 499,932 469,070

Cassi 438,222 414,024

Other plans 61,710 55,046

Total 1,131,641 1,110,123

(1) Refers to the contributions relating to participants subject to Agreement 97 and Plan 1, whereby these contributions occur by the realization of Fundo Paridade and Fundo de Utilização respectively (Note 25.f). Agreement 97 aims to regulate the funding required to constitute a portion equivalent to 53.7% of guaranteed amount relating to the supplementary pension due to the participants who joined the Bank up to April 14, 1967 and who have retired or will retire after the aforementioned date, except for those participants who are part of the Plano Informal.



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The Bank's contributions to benefit plans, during the second half/2015, are estimated in R$ 689,378 thousand.

Values recognized in income


Retirement and Pension Plans (90,828) 558,126

Plano de Benefícios 1 – Previ (1)

277,859 891,400

Plano Previ Futuro (217,526) (189,874)

Plano Informal (1)

(70,235) (77,491)

Other plans (1)

(80,926) (65,909)

Health Care Plans (653,147) (715,349)

Cassi (1)

(592,218) (657,384)

Other plans (1)

(60,929) (57,965)

Total (743,975) (157,223)

(1) See details in the subtitle d.5.

a) Retirement and pension plans

Previ Futuro (Previ)

Participants in this plan are the Bank's employees hired from December 24, 1997. The active participants contribute

to Previ with an amount between 7% and 17% of their contribution salary, which varies based on the time of service

and the amount of the contribution salary. There is no contribution for retired participants. The sponsor contributes an

amount equal to the contributions of the participants, limited to 14% of the total contribution payroll of these

participants.

Plano de Benefícios 1 (Previ)

The participants of this plan are the Bank’s employees who were enrolled up to December 23, 1997. Participants of

the Plan 1, both the actives as retirees contribute a percentage between 1.8% and 7.8% of salary or supplements.

Due to the establishment of parity between the Bank's and participants' contributions, in December 2000, the Fundo

Paridade was set up, and its resources are being used for the purpose of offsetting any financial imbalance. (Note

25.f)

Plano Informal (Previ)

Banco do Brasil is exclusively and fully responsible for this plan whose contractual obligations include: (a) retirement

pensions to founder participants and pension payments to beneficiaries of participants deceased prior to April

14,1967; (b) payment of retirement supplements to the other participants employed by Banco do Brasil who retired

prior to April, 14,1967 or who, on that date, would have the right through length of service to retire and who had at

least 20 years of effective service with the Bank; and (c) increase in the amount of retirement benefits and of

pensions beyond those provided in the benefit plan of Previ, resulting from judicial decisions and from administrative

decisions due to restructuring of the career and salary plan and of incentives created by the Bank. On December 31,

2012, Banco do Brasil and Previ formalized an agreement whereby the Banco do Brasil paid, with Fundo Paridade

funds, 100% of the mathematical reserves relating to the Grupo Especial, that is Banco do Brasil’s exclusive liability,

upon which this group migrated from Plano Informal to Plano de Benefícios 1 of Previ. The Grupo Especial includes

participants from Plano de Benefícios 1 - Previ, listed in the first paragraph of the first clause of the contract of

December 24,1997, which received additional supplemental retirement arising from administrative decisions and/or

judicial decisions. (Note 25.f)

Prevmais (Economus)

The participants of this plan are the employees from Banco Nossa Caixa (merged into Banco do Brasil on November

30, 2009) enrolled after August 01, 2006, and the participants previously linked to the Regulamento Geral benefit

plan who opted for the distribution of their vested account balances. The funding for income benefits is equally

provided by employees and employer, not exceeding 8% of the participants' salary. The plan also provides risk

benefits, such as complementation of sickness aid, work - related accident, disability benefits and death pension.



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Regulamento Geral (Economus)

The participants of this plan are the employees from Banco Nossa Caixa enrolled up to July 31, 2006. This plan is

closed to new members. Employees and the sponsor contribute equally, on average, with 12.11% of participation

salary.

Regulamento Complementar 1 (Economus)

The participants of this plan are the employees from Banco Nossa Caixa. This plan offers the benefits of

supplemental sickness benefit and annuity for death and disability. The cost of the plan is the responsibility of the

sponsor, participants and retirees/users.

Grupo B' (Economus)

The participants of this plan are the employees from Banco Nossa Caixa admitted between January 22,1974 and

May 13,1974 and their beneficiaries. This plan is closed to new members. The level of benefit which will be granted

when all the conditions set out in regulation are met, is known only a priori.

Multifuturo I (Fusesc)

The participants of this plan are the employees from Banco do Estado de Santa Catarina - Besc (merged into Banco

do Brasil on September 30, 2008) enrolled after January 12, 2003 and the employees previously linked to Plano de

Benefícios I (Fusesc) who opted for this plan. Employees and sponsor equally contribute from 2.33% to 7% of

participation salary to that plan, as determined by each participant.

Plano de Benefícios I (Fusesc)

The participants of this plan are the employees from Besc enrolled until January 11, 2003. This plan is closed to new

members. Employees and the sponsor contribute equally, on average, with 9.89% of participation salary.

Plano BEP (Prevbep)

Participants of this plan are the employees from Banco do Estado do Piauí – BEP (merged in to Banco do Brasil on

November 30, 2008). Employees and the sponsor contribute equally, on average, with 3.58% of participation salary.

b) Health Care Plans

Plano de Associados (Cassi)

The Bank is the sponsor of a health plan managed by Cassi the main objective of which is to provide coverage for

expenses related to the promotion, protection, recovery and rehabilitation of a member's health and of his/her

enrolled beneficiaries. Each month, the Bank contributes with a sum equivalent to 4.5% of the total payroll or of the

total retirement or pension plan benefit. Monthly contributions from members and pension beneficiaries amount to 3%

of the payroll or the total retirement or pension plan benefits and co-participation in some hospital procedures.

Plano Unificado de Saúde - PLUS (Economus)

The participants of this plan are the employees from Banco Nossa Caixa. Participation in this plan takes place by

means of a 1.5% contribution of gross salary, without limit, covering the owner and his/her preferred dependants,

deducted from the owner's payroll and 10% as co-participation in the price of each medical visit / low-cost exam

made by the owner and his/her dependants (preferred and non-preferred).

Plano Unificado de Saúde - PLUS II (Economus)

For employees from Banco Nossa Caixa. Participation in this plan takes place by means of a 1.5% contribution of

gross salary, without limit, covering the owner and his/her preferred dependants, deducted from the owner's payroll

and 10% as co-participation in the price of each medical visit / low-cost exam made by the owner and his/her

preferred dependants and children of age. The plan does not provide for non-preferred dependents.



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Plano de Assistência Médica Complementar - PAMC (Economus)

The participants of this plan are the employees from Banco Nossa Caixa stationed in the State of São Paulo. The

plan owners are those employees retired due to disability in Groups "B" and "C", and their dependents, who

participate in costs in as much as they use it, and according to the progressive salary table.

Plano de Saúde (SIM)

The participants of this plan are the employees from Besc, in addition to the employees who are linked to other

sponsors (Badesc, Codesc, Bescor, Fusesc and SIM itself). Monthly contributions from active beneficiaries amount to

3.44% of the gross remuneration, including the 13th salary, monthly contributions from inactive beneficiaries amount

to 8.86%, and those from the sponsors amount to 5.42%. The beneficiaries also contribute 0.75% per dependent.

The plan also provides for joint participation in ambulatory care procedures.

c) Risk factors

The Bank may be required to make extraordinary contributions to Previ, Economus, Fusesc and Prevbep,

which might have a negative effect on operating income.

The criteria used to determine the Bank's obligation to the set of sponsored entities and plans (Previ, Economus,

Fusesc and Prevbep) include long-term actuarial and financial estimates and assumptions, as well as the application

and interpretation of regulatory standards in effect on this date. Accordingly, inaccuracies inherent in the use of

estimates and assumptions may result in divergences between the amount recorded and the amount actually

realized, resulting in negative impacts on the result of the Bank’s operations.



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d) Actuarial valuations

The actuarial valuations are prepared every six months and the information contained in the tables below refers to those carried out on the balance sheet dates of June 30, 2015

and June 30, 2014.

d.1) Changes in present value of defined benefit actuarial obligations

Plano 1 - Previ Plano Informal - Previ Plano de Associados - Cassi Other plans

1st half/2015 1st half/2014 1st half/2015 1st half/2014 1st half/2015 1st half/2014 1st half/2015 1st half/2014

Opening balance (122,884,677) (113,522,849) (920,380) (1,004,111) (5,830,331) (6,333,578) (6,428,867) (5,971,976)

Interest cost (7,468,633) (7,261,271) (55,620) (62,667) (356,192) (411,994) (391,616) (383,901)

Current service cost (212,439) (245,908) -- -- (46,337) (69,065) (18,284) (20,041)

Past service cost -- -- (14,614) (14,824) -- -- -- --

Benefits paid net of retirees contributions 4,496,005 4,197,920 86,848 89,275 248,533 237,699 226,981 205,858

Remeasurements of actuarial gain/ (losses) (3,972,084) (5,373,112) (58,871) (30,558) (334,409) 786,475 270,336 (74,060)

Closing balance (130,041,828) (122,205,220) (962,637) (1,022,885) (6,318,736) (5,790,463) (6,341,450) (6,244,120)

Present value of actuarial liabilities with surplus (130,041,828) (122,205,220) -- -- -- -- (5,306,059) (5,078,666)

Present value of actuarial liabilities without surplus -- -- (962,637) (1,022,885) (6,318,736) (5,790,463) (1,035,391) (1,165,454)

d.2) Changes in fair value of plan assets


(1)


Opening balance 135,145,646 144,420,740 -- -- -- -- 5,115,870 5,033,968

Interest income 8,236,790 9,289,978 -- -- -- -- 311,455 323,813

Contributions received 264,684 301,643 86,848 89,275 248,533 237,699 69,444 71,899

Benefits paid net of retirees contributions (4,496,005) (4,197,920) (86,848) (89,275) (248,533) (237,699) (226,981) (205,858)

Actuarial gain / (loss) on plan assets (3,045,960) (8,135,553) -- -- -- -- 36,271 (145,156)

Closing balance 136,105,155 141,678,888 -- -- -- -- 5,306,059 5,078,666

(1) Refers to the following plans: Regulamento Geral (Economus), Prevmais (Economus), Regulamento Complementar 1 (Economus), Multifuturo 1 (Fusesc), Plano I (Fusesc) and Plano BEP (Prevbep).



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d.3) Amounts recognized in the balance sheet


Jun 30, 2015 Jun 30, 2014 Jun 30, 2015 Jun 30, 2014 Jun 30, 2015 Jun 30, 2014 Jun 30, 2015 Jun 30, 2014

1) Fair value of the plan assets 136,105,155 141,678,888 -- -- -- -- 5,306,059 5,078,666

2) Present value of actuarial liabilities (130,041,828) (122,205,220) (962,637) (1,022,885) (6,318,736) (5,790,463) (6,341,450) (6,244,120)

3) Surplus/(deficit) (1+2) 6,063,327 19,473,668 (962,637) (1,022,885) (6,318,736) (5,790,463) (1,035,391) (1,165,454)

4) Net actuarial (liability)/asset (1)

3,031,664 9,736,834 (962,637) (1,022,885) (6,318,736) (5,790,463) (780,372) (830,514)

(1) Refers to the portion of the surplus/(deficit) due from the sponsor. The actuarial assets recorded in Other Receivables (Note 10.b) will be realized before the end of the plan where the end of the plan is understood as the date in which the last commitment will be paid.

d.4) Maturity profile of defined benefit actuarial obligations

Duration(1)

Expected benefit payments

(2)

Up to 1 year 1 to 2 years 2 to 5 years Over 5 years Total

Plano 1 (Previ) 9.96 4,608,122 9,885,549 30,180,904 223,387,620 268,062,195

Plano Informal (Previ) 5.67 100,257 151,122 373,263 918,138 1,542,780

Plano de Associados (Cassi) 11.95 254,818 499,722 1,443,435 15,716,334 17,914,309

Regulamento Geral (Economus) 10.31 236,403 435,903 1,309,107 10,563,360 12,544,773

Regulamento Complementar 1 (Economus) 15.68 963 1,057 3,818 110,908 116,746

Plus I e II (Economus) 6.47 24,124 44,734 114,887 354,790 538,535

Grupo B' (Economus) 8.69 8,138 14,880 43,182 242,746 308,946

Prevmais (Economus) 13.67 5,712 11,004 35,479 569,873 622,068

Multifuturo I (Fusesc) 11.24 2,694 5,067 15,559 153,937 177,257

Plano I (Fusesc) 11.20 18,393 35,723 117,431 1,239,857 1,411,404

Plano BEP (Prevbep) 10.45 1,336 2,581 8,638 76,028 88,583

(1) Weighted average duration, in years, of the defined benefit actuarial obligation.

(2) Amounts considered not discounted to present value.



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d.5) Breakdown of the amounts recognized in statement of income relating to defined benefit plans



Current service cost (106,219) (122,954) -- -- (46,337) (69,065) (9,159) (10,040)

Interest cost (3,734,317) (3,630,635) (55,621) (62,667) (356,192) (411,994) (211,416) (70,024)

Expected yield on plan assets 4,118,395 4,644,989 -- -- -- -- 155,420 24,928

Unrecognized past service cost -- -- (14,614) (14,824) -- -- -- --

Expense with active employees -- -- -- -- (189,689) (176,325) (74,676) (69,272)

Other adjustments/reversals -- -- -- -- -- -- (2,024) 534

(Expense)/income recognized in the Statement of Income 277,859 891,400 (70,235) (77,491) (592,218) (657,384) (141,855) (123,874)

d.6) Composition of the plan assets

Plano 1 - Previ Other plans

Jun 30, 2015 Jun 30, 2014 Jun 30, 2015 Jun 30, 2014

Fixed income 48,793,698 45,252,237 4,707,270 4,432,914

Floating income (1)

73,170,131 82,655,463 206,671 270,185

Real estate investments 8,288,804 7,962,354 167,583 152,275

Loans and financing 4,899,786 4,887,922 107,094 103,605

Other 952,736 920,912 117,441 119,687

Total 136,105,155 141,678,888 5,306,059 5,078,666

Amounts listed in fair value of plan assets

In the Bank’s own financial instruments 10,792,928 11,056,439 22,825 21,486

In properties or other assets used by the Bank 153,568 161,836 7,443 8,032

(1) Includes, in Plano de Benefícios 1 from Previ, the amount of R$ 25,534,844 thousand (R$ 28,835,180 thousand as of December 31, 2014 and R$ 35,517,370 thousand as of June 30, 2014), related to the assets that are not priced in active markets.



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d.7) Main actuarial assumptions adopted in each period


Jun 30, 2015 Jun 30, 2014 Jun 30, 2015 Jun 30, 2014 Jun 30, 2015 Jun 30, 2014 Jun 30, 2015 Jun 30, 2014

Inflation rate (p.a.) 5.95% 5.82% 5.93% 5.82% 5.97% 5.82% 5.96% 5.82%

Real discount rate (p.a.) 6.18% 6.10% 6.33% 5.94% 6.14% 6.14% 6.17% 6.12%

Nominal rate of return on investments (p.a.) 12.50% 12.28% -- -- -- -- 12.50% 12.30%

Real rate of expected salary growth (p.a.) 1.01% 0.25% -- -- -- -- 0.73% 0.65%

Actuarial life table AT-2000 AT-2000 AT-2000 AT-2000

Capitalization method Projected credit unit Projected credit unit Projected credit unit Projected credit unit

In order to determine the values for the defined benefit plans, the Bank uses methods and assumptions different from those submitted by the entities sponsored.

CPC 33 (R1) prescribes the accounting, as well as the effects that occurred or that will occur in the entities that sponsor employee benefits plans. However, the sponsored entities

themselves must comply with the rules issued by the Ministério da Previdência Social, through the Conselho Nacional de Previdência Complementar (CNPC) and the

Superintendência Nacional de Previdência Complementar (Previc). The most significant differences are in the definition of the assumptions used in Plano 1 – Previ.



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d.8) Differences in assumptions of the Plano 1 - Previ

Bank Previ

Real discount rate (p.a.) 6.18% 5.00%

Actuarial life table AT-2000 Soft AT-2000 (reduced by 10%)

Evaluation of assets - Exclusive funds Market value or discounted cash flow Discounted cash flow

Capitalization method Projected credit unit Aggregate Method

d.9) Reconciliation of amounts calculated in Plan 1 - Previ/Bank

Plan assets Actuarial liabilities Effect in surplus

Jun 30, 2015 Jun 30, 2014 Jun 30, 2015 Jun 30, 2014 Jun 30, 2015 Jun 30, 2014

Value determined - Previ 138,383,752 140,139,983 (130,269,710) (118,866,137) 8,114,042 21,273,846

Incorporation of values from agreement 97

14,164,540 13,795,151 (14,164,540) (13,795,151) -- --

Incorporation of values from Grupo Especial

1,117,743 1,072,293 (1,117,743) (1,072,293) -- --

Adjustment in the value of plan

assets (1)

(17,560,880) (13,328,539) -- -- (17,560,880) (13,328,539)

Adjustment in the liabilities - discount rate/ capitalization method

-- -- 15,510,165 11,528,361 15,510,165 11,528,361

Value determined - Bank 136,105,155 141,678,888 (130,041,828) (122,205,220) 6,063,327 19,473,668

(1) Refers mainly to adjustments made by the Bank in determining the fair value of the investments in Litel, Neoenergia and in securities held to maturity.

d.10) Sensitivity analysis

The sensitivity analyses are based on changes in an assumption, maintaining all the other assumptions constant. In

practice, this is unlikely to occur, and changes in some of the assumptions may be correlated.

The methods used for the elaboration of the sensitivity analysis did not change from the previous period, and updates

in the discount rate were made.

Jun 30, 2015 Life table Salary increase Interest rate

+1 age -1 age +0.25% -0.25% +0.25% -0.25%

Plano 1 (Previ) Present value of defined benefit

actuarial obligations 130,041,828 127,821,703 132,229,747 130,269,657 129,816,055 127,584,360 132,600,784

Surplus/(deficit) in the plan 6,063,327 8,283,452 3,875,408 5,835,498 6,289,100 8,520,795 3,504,371

Plano Informal (Previ) Present value of defined benefit

actuarial obligations 962,637 926,205 999,951 -- -- 951,488 974,080

Surplus/(deficit) in the plan (962,637) (926,205) (999,951) -- -- (951,488) (974,080)

Plano de Associados (Cassi)

Present value of defined benefit actuarial obligations

6,318,736 6,175,539 6,459,834 6,320,119 6,317,388 6,184,061 6,458,919

Surplus/(deficit) in the plan (6,318,736) (6,175,539) (6,459,834) (6,320,119) (6,317,388) (6,184,061) (6,458,919)

Regulamento Geral (Economus)


4,934,361 4,872,147 4,994,169 -- -- 4,834,410 5,052,068




36,268 37,633 34,935 -- -- 35,115 37,477


Plus I e II (Economus) Present value of defined benefit



Grupo B' (Economus) Present value of defined benefit


Surplus/(deficit) in the plan (136,158) (132,991) 139,246 -- -- (133,585) 138,822

Prevmais (Economus) Present value of defined benefit


Surplus/(deficit) in the plan 79,893 80,098 79,649 -- -- 85,921 73,541

Multifuturo I (Fusesc) Present value of defined benefit


Surplus/(deficit) in the plan 74,744 75,684 73,835 -- -- 76,363 73,053

Plano I (Fusesc) Present value of defined benefit

actuarial obligations 557,057 556,983 557,290 557,058 557,054 551,106 563,226

Surplus/(deficit) in the plan 54,493 54,566 54,260 54,492 54,496 60,444 48,324

Plano BEP (Prevbep) Present value of defined benefit

actuarial obligations 47,487 46,767 48,186 47,668 47,310 46,502 48,515

Surplus/(deficit) in the plan 42,621 43,340 41,922 42,440 42,798 43,606 41,593



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e) Overview of actuarial asset/(liability) recorded by the Bank

Actuarial assets Actuarial liabilities

Jun 30, 2015 Jun 30, 2014 Jun 30, 2015 Jun 30, 2014

Plano 1 (Previ) 3,031,664 9,736,834 -- --

Plano Informal (Previ) -- -- (962,637) (1,022,885)

Plano de Associados (Cassi) -- -- (6,318,736) (5,790,463)

Regulamento Geral (Economus) -- -- (421,377) (458,354)


-- -- (1,599) (1,351)

Plus I e II (Economus) -- -- (347,113) (330,653)

Grupo B' (Economus) -- -- (136,158) (130,075)

Prevmais (Economus) 39,947 30,184 -- --

Multifuturo I (Fusesc) 37,372 18,601 -- --

Plano I (Fusesc) 27,246 21,943 -- --

Plano BEP (Prevbep) 21,310 19,191 -- --

Total 3,157,539 9,826,753 (8,187,620) (7,733,781)

f) Allocations of the Surplus - Plano 1


Fundo Paridade

Opening balance 118,889 172,124

Restatement 10,763 9,546

Contributions to Plano 1 - Agreement 97 (11,829) (60,552)

Early contribution to amortize - Grupo Especial (1)

(4,603) (4,552)

Closing balance 113,220 116,566

Fundo de Utilização


Contributions to Plano 1 (248,252) (236,539)

Restatement 759,920 488,293

Closing balance 8,666,911 8,045,908

Total funds allocated surplus 8,780,131 8,162,474

(1) Refers to the payment of 100% of the mathematical reserves for guarantees of additional supplemental retirement for the Grupo Especial.

f.1) Fundo Paridade

The plan was funded, up to December 15, 2000, through a contribution of 2/3 (two thirds) from the Bank and another

1/3 (one third) from participants. As from December 16, 2000, in order to adjust to the requirements of Constitutional

Amendment N° 20, both the Bank and the participants started to make a contribution of 1/2 (one half), and an

agreement was signed by the parties involved and duly approved by the Supplementary Pension Plan Secretariat.

The cost for the implementation of the equal contributions was covered by using the Plan's surplus at the time. As a

result of this agreement, the Bank was also entitled to recognize the historical amount of R$ 2,227,254 thousand,

which was recorded in Fundos de Destinação Superávit - Previ. This Asset is updated on a monthly basis based on

the actuarial goal (INPC + 5% per year) and, since January 2007, has been used to offset any financial imbalance in

the ratio between the Unamortized Reserve and Advanced Amortization arising from the agreement entered into with

Previ in 1997, which granted supplementary benefits to the participants of Plano 1 who joined the Plan up to

April 14,1967 and had not retired before that date.

f.2) Fundo de Utilização

The fund, composed of resources transferred from the Fundo de Destinação, can be used by the Bank for

reimbursement or as a reduction in future contributions, after fulfilling the requirements established by applicable law.

The Fundo de Utilização is updated by the actuarial goal (INPC + 5% p.a.).



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26 - PROVISIONS, CONTINGENT ASSETS AND LIABILITIES, LEGAL LIABILITIES - TAXES AND SOCIAL SECURITY

Contingent Assets

According to CPC 25 – Provisions, Contingent Liabilities and Contingent Assets, approved by CMN Resolution

3,823/09, contingent assets are not recognized in the financial statements.

Labor Lawsuits

The Bank is defendant to labor lawsuits mainly filed by former employees or trade unions of the banking industry. The

allowance for probable losses represents various claims, such as: compensation, overtime, distortion of the working

day, additional function and representation amongst others.

Tax Lawsuits

The Bank, in spite of its conservative profile, is subject to tax inquiries (inspections conducted by the tax authorities),

which may eventually lead to tax assessments, such as: the composition of the calculation of the taxable profit for

income tax/social contribution (deductibility) and discussion regarding the incidence of taxes, when certain taxable

event occur. Most assessments are related to ISSQN, income tax, social contribution, PIS/COFINS, IOF and

Employer Social Security Contributions. As a guarantee for some of them, the Bank has pledged cash, bonds, real

estate or made judicial deposits when necessary, preventing the Bank to be included in restrictive registration, as well

as not to obstruct the semiannual renewal of its tax regularity certificate.

Among the main tax lawsuits involving the companies of Banco do Brasil, whose amounts are calculated in

proportion to the shares held by the Bank are highlighted below:

Cielo discusses in court the suspension of the enforceability of Cofins according to Law 10,833/2003, which

introduced the system of calculation of the non-cumulative method of the 7.6% rate, depositing the amounts

calculated monthly in court. Since then, the difference between the tax payable calculated at the rate established by

the cumulative scheme and not cumulative is accrued, totaling R$ 338,873 thousand. The judicial process is

suspended in the Federal Regional Court of the 3rd Region/SP, in order to recognize the general repercussion of the

matter by the Supreme Court in case of extraordinary appeals, pending judgment.

Civil Lawsuits

Civil lawsuits consist mainly of: lawsuits of customers and users of our network asking for material and moral

damages indemnity related to banking products and services and Economic Plans.

The indemnities for material and moral damages are based on consumer protection laws and are generally settled in

Special Civil Courts-JEC, whose value is limited to forty times the minimum wage.

The Bank is a defendant in proceedings seeking the payment of the difference between the actual inflation rate and

the inflation rate used for the adjustment of financial investments when economic plans were implemented in the late

1980’s and early 1990’s, known as the Bresser Plan, the Verão Plan and the Collor Plans I and II (or Economic

Plans).Although the Bank complied with the laws and regulations in place at the time, these lawsuits have been

recorded in provisions, taking into consideration the claims where the Bank is the defendant and the outcome of loss

is judged to be probable, which is determined after the analysis of each demand, based on the current decision of the

Superior Court of Justice (STJ).

Regarding disputes relating to economic plans, the Federal Supreme Court (STF) suspended the prosecution of all

cases on appeal, until the Court issues a definitive pronouncement on the right under litigation.

a) Provisions for Labor, Tax and Civil Claims

In compliance with the CMN Resolution 3,823/2009, the Bank makes allowance for labor, civil and tax lawsuits that

have risk of probable losses.



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The estimates of outcome and financial effect are determined by the nature of the actions, the judgment of the

management of the entity through the opinion of legal counsel, complemented by complexity and similar transactions

expertise.

Changes in the provisions for civil, tax and labor claims classified as probable


Labor lawsuits


Addition 379,441 590,981

Reversal of the provision (135,945) (940,420)

Paid out (630,881) (356,929)

Inflation correction 132,386 159,726

Amounts merged/added 105 --


Tax lawsuits

Opening balance 537,105 502,858

Addition 66,938 108,062

Reversal of the provision (54,803) (103,781)

Paid out (4,522) (5,379)


Closing balance 553,113 506,544

Civil lawsuits


Addition 2,101,777 2,355,111

Reversal of the provision (1,296,854) (1,460,619)

Paid out (580,042) (448,446)



Total Labor, Tax and Civil 8,468,999 8,079,825

Expected outflows of economic benefits

Labor Tax Civil

Up to 5 years 1,871,932 459,398 4,872,852

More than 5 years and up to 10 years 49,052 72,084 1,094,840

Over 10 years 72 21,631 27,138

Total 1,921,056 553,113 5,994,830

The scenario of unpredictability of the duration of proceedings, and the possibility of changes in the case law of the

courts, make values and the expected outflows of economic benefits uncertain.

b) Contingent Liabilities – Possible loss

The lawsuits, tax and civil risks classified "possible loss" do not require provisions as per CPC 25 – Provisions,

Contingent Liabilities and Contingent Assets, approved by CMN Resolution 3,823/09. Lawsuits are labeled as

possible when the final outcome of the process is unclear but the probability of losing is judged to be less than more-

likely-than-not, but more than remote.

The amounts disclosed in the chart below represent the best estimated value that would be disbursed in the case of

an unfavorable judgment.



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The balances of contingent liabilities classified as possible loss

Jun 30, 2015 Jun 30, 2014

Labor lawsuits 194,672 155,713

Tax lawsuits (1)

12,654,428 9,972,160

Civil lawsuits 3,036,967 3,605,368

Total 15,886,067 13,733,241

(1) The main contingencies originate from (i) assessment for the payment of INSS contributions on: salary bonus paid under the collective agreements in the period from 1995 to 2006, in the amount of R$ 2,608,965 thousand; public transport benefits and the use of private car by employees of Banco do Brasil, in the amount of R$ 233,593 thousand; and employee profit share payments corresponding to the period from April 2001 to October 2003, in the amount of R$ 71,672 thousand and (ii) notices of tax assessment made by the Treasuries of the Municipalities, claiming ISSQN totaling R$ 1,449,064 thousand.

c) Deposits in Guarantee

Deposits given in guarantee of contingencies

Jun 30, 2015 Jun 30, 2014

Labor lawsuits 4,152,178 3,597,741

Tax lawsuits 6,715,788 5,978,726

Civil lawsuits 13,460,470 8,975,083

Total 24,328,436 18,551,550

d) Legal Obligations

The Bank has a record in Other Liabilities - Tax and Social Security the amount of R$ 13,574,449 thousand

(R$ 13,141,399 thousand on December 31,2014 and R$ 12,732,946 thousand on June 30, 2015) relating to the

following action:

On January 29, 1998, the Bank filed for a writ of mandamus, distributed to the 16th Federal Court of Federal District

claiming full compensation of accumulated losses for income tax purposes and negative basis for the calculation of

Social Contribution on Net Income (CSLL). Since then, the Bank has been fully offsetting the tax loss and the

negative basis of social contribution against income tax and social contribution, and has made judicial deposits for

the full amount due (70% of the amount offset). These deposits prompted the 16th Vara da Justiça Federal do Distrito

Federal (Federal Court of Distrito Federal) to issue an order recognizing the suspension of chargeability of these

taxes until final judgment of the Bank's claim, based on article 151, item II, of the Código Tributário Nacional (CTN).

The case was dismissed in the first instance and an appeal brought by the Bank was denied by the TRF of the 1st

Region. The decision was challenged by extraordinary appeal filed by the Bank on October 1, 2002. Today, the

appeal is pending in the Federal Court of the 1st Region awaiting the judgment by the Supreme Court of another

Extraordinary Feature (RE No. 591,340), which was recognized by the Supreme Court as setting a relevant judicial

precedent.

The offsetting of tax loss carry forward and recoverable CSLL has resulted in the write-off of deferred tax credits,

observing the limitation of 30%.

Deferred taxes including corporate income tax (IRPJ) and social contribution on net income (CSLL) on the interest /

inflation restatements of judicial deposits are being offset with the tax credits resulting from the provision related to

that judicial deposit, in conformity with paragraph 2, item II, article 1 of CMN Resolution 3,059/2002, with no impact

on income.

Based on the hypothesis of a successful outcome to this lawsuit, as of September 2005 and January 2009, the Bank

would have consumed the entire stock of tax loss carry forward and recoverable social contribution, respectively.

Therefore, since October 2005 and February 2009, the amounts of IRPJ and CSLL, respectively, are being paid in

full. Moreover, there would be a reclassification of resources from the account used to record judicial deposits to that

of cash and cash equivalents. Tax credits for the escrow deposits (principal) would be written off against the

allowance of IRPJ and CSLL and would be reversed against income, the provision for tax risks related to the

restatement of the deposits amounts to R$ 7,002,776 thousand.



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85

If the Bank were unsuccessful in its lawsuit (situation in which the amounts deposited judicially would be converted

into income in favor of the Fazenda Nacional (Federal Tax Authority)), the portions of IRPJ tax credits on tax losses

and CSLL to offset would be reclassified to the representative asset account "IRPJ recoverable" and "CSLL

recoverable", respectively, that could be used since the accrual period starting October 2005 and February 2009,

observing the limitation of 30%. The taxes recoverable, which would result from the adjustments to prior year

Statements of Economic-Fiscal Information of Businesses, corresponds to R$ 5,487,366 thousand as of June 30,

2015 and updating by the Selic Rate results in a further recoverable amount of R$ 1,957,192 thousand. This sum

adjusts the provision for tax risks with respect to the updating of court deposits so that it will be sufficient to fully

cancel the risk of a loss.

e) The amounts related to this matter

Jun 30, 2015 Dec 31, 2014 Jun 30, 2014

Judicial deposits 15,873,150 15,418,982 14,990,610

Amount realized (70%) 7,817,011 7,817,011 7,817,011

Inflation correction 8,056,139 7,601,971 7,173,599

Legal Obligations - provision for lawsuit 13,574,449 13,141,399 12,732,946

Tax losses of IRPJ 3,002,033 3,002,033 3,002,033

CSLL negative bases/ CSLL recoverable 3,569,640 3,569,640 3,569,640

Provision for restatement of judicial deposit 7,002,776 6,569,726 6,161,273

27 - RISK AND CAPITAL MANAGEMENT

a) Risk Management Process

Banco do Brasil considers risks and capital management as one of the main vectors for the decision-making process.

The Institution has a process of identification of risks that will be part of the Institution's risks inventory, performed by

analysing the business segments that are explored, direct and indirectly, considering the Entities Related to Banco do

Brasil. The risks below are part of Banco do Brasil's Financial Conglomerate Relevant Risks Corporate Range:

a) Credit Risk; b) Counterparty Credit Risk; c) Concentration Risk; d) Liquidity Risk; e) Operational Risk; f) Market Risk; g) Banking Book Interest Rate Risk; h) Strategic Risk; i) Reputational Risk; j) Enviromental Risk; k) Legal Risk; l) Participations Risk; m) Complementary Pension Fund Entities and Private Health Insurance Plan Operators for Employees Risk;

and n) Model Risk.

In the Bank, the collegiate risk management is performed completely segregated from the business units. Risk

management policies are approved by the Board of Directors. The Global Risk Superior Committee (CSRG), a forum

composed of the President and Vice-Presidents, is responsible for implementation and monitoring of these policies.

The guidelines issued by the CSRG are conducted by specific executive committees (credit, market, liquidity and

operational), which are groups formed by Directors.

To learn more about the risk and capital management process in Banco do Brasil, visit the information available in the

Risk Management Report at the website bb.com.br/ri.



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b) Capital Management

On June 30, 2011, aligned with Pillar II of Basel, the Brazilian regulator, Banco Central do Brasil (Bacen), issued the

Conselho Monetário Nacional (CMN) Resolution No. 3,988, which established the requirement for financial

institutions to implement a capital management framework. Applying CMN Resolution, Banco do Brasil defined as

part of its structure Accounting, Risk Management, Controlling and Finance Units. Furthermore, in line with the CMN

Resolution, the Board of Directors appointed the Controller as responsible for Capital Management within Banco

Central do Brasil.

Banco do Brasil has approaches that enable the identification and evaluation of significant risks incurred, including

those not covered by the Minimum Referential Equity Required (MRER) related to the Pillar I risks. Its policies and

strategies, as well as the capital plan, enable the maintenance of capital at a consistent level given the risks faced by

the institution. Stress tests are performed on a monthly basis and their impacts are assessed from a capital

perspective. Capital adequacy management reports are distributed to corporate units and to strategic committees,

which provide support to the decision making process of the Senior Management of the Bank.

The CMN Resolution No. 3,988/2011 also established the need for an Internal Capital Adequacy Assessment

Process (ICAAP), which was implemented by Banco do Brasil starting June 30, 2013. The responsibility for

coordinating ICAAP was assigned to the Bank’s Risk Management Unit. Meanwhile, the Internal Controls Unit, an

independent area segregated from the capital management structure, is responsible for the validation of ICAAP.

Finally, Internal Audit holds the institutional responsibility for annually evaluating the process of capital management.

To learn more about the capital management at Banco do Brasil, visit the website bb.com.br/ri.

Capital Adequacy Ratio

The Capital Adequacy Ratio was determined according to the criteria established by CMN Resolutions No.

4,192/2013 and No. 4,193/2013, which refer to the calculation of the Referential Equity (RE) and the Minimum

Referential Equity Required (MRER) in relation to Risk Weighted Assets (RWA), respectively, considering the

exposure to Banco Votorantim under the Equity Method (MEP) as determined by Bacen.

On October 1, 2013, Brazil adopted a set of legislation that implemented the recommendations of the Basel

Committee on Banking Supervision regarding the capital structure of financial institutions, known as Basel III. The

new rules adopted addressed the following issues:

I - new methodology for calculating regulatory capital, which continues to be divided into Tier I and II. The Tier I

consists of the Common Equity Tier I Capital – CET1 (net of Regulatory Adjustments) and Additional Tier I Capital

(AT1);

II - new methodology for calculating the capital required to be maintained, adopting minimum requirements for

Referential Equity, Tier I and Common Equity Tier I Capital (CET1), and the introduction of the Additional CET1.

The following regulatory adjustments started to be made as deductions from the Referential Equity from January

2014:

goodwill;

intangible assets constituted after October 1, 2013;

actuarial assets related to defined benefit pension funds net of deferred tax liabilities;

non-controlling interests;

investments, directly or indirectly, above than 10% of the capital of unconsolidated entities similar to financial institutions, and insurance companies, reinsurance companies, capitalization companies and open pension entities (significant investments);

tax credits resulting from temporary differences that rely on the generation of future taxable profits or revenues for their realization;

tax credits resulting from tax loss of excess depreciation;

tax credits resulting from tax losses and negative base for social contribution on net income.

According to CMN Resolution No. 4,192/2013, these deductions will be gradually implemented at 20% per year, from

2014 to 2018, with the exception of deferred assets and funding instruments issued by institutions authorized to

operate by Banco Central do Brasil (Bacen) which have been fully deducted since October 2013.



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On August 28, 2014, the Hybrid Instrument in the amount of R$ 8,100,000 thousand which composed the Additional

Tier 1 Capital was authorized by Banco Central do Brasil to compose the Common Equity Tier 1 Capital of the Bank

(Note 22.c).

According to Bacen Resolution No. 4,192/2013 and No. 4,193/2013, from January 2015, the calculation of the

Regulatory Equity (RE) and the amount of Risk-Weighted Assets (RWA) should be elaborated based on Prudential

Conglomerate.

Jun 30, 2015 Jun 30, 2014

Prudential Financial

RE - Referential equity 127,991,067 118,042,870

Tier I 89,853,356 84,276,305

Common Equity Tier 1 Capital (CET1) 68,935,770 62,049,999

Shareholders' Equity 72,534,473 70,043,646

Instrument Qualifying as CET1 (Note 22.c) 8,100,000 --

Regulatory adjustments (11,698,703) (7,993,647)

Additional Tier 1 Capital (AT1) 20,917,586 22,226,306

Hybrid instruments authorized in accordance with CMN Resolution No. 4,192/2013 18,844,042 13,376,542

Hybrid instruments authorized in accordance with regulations preceding the CMN Resolution No. 4,192/2013

(1)

2,073,544 8,849,764

Tier II 38,137,711 33,766,565

Subordinated Debt Qualifying as Capital 38,144,335 33,772,649

Subordinated Debt authorized in accordance with CMN Resolution No. 4,192/2013 - Financial Bills 5,458,898 1,716,498

Subordinated Debt authorized in accordance with regulations preceding the CMN Resolution No. 4,192/2013

32,685,437 32,056,151

Funds obtained from the FCO (2)

21,627,115 19,614,708

Funds raised in Financial Bills and CD (3)

11,058,322 12,441,443

Deduction from Tier II (6,624) (6,084)

Funding instruments issued by financial institution (6,624) (6,084)

Risk Weighted Assets (RWA) 791,056,934 831,585,917

Credit Risk (RWACPAD) 749,291,148 782,472,612

Market Risk (RWAMPAD) 11,648,889 12,534,491

Operational Risk (RWAOPAD) 30,116,897 36,578,814

Minimum Referential Equity Requirements (4)

87,016,263 91,474,451

Margin on the Minimum Referential Equity Required 40,974,804 26,568,419

Tier I Ratio (Tier I / RWA) 11.36% 10.13%

Common Equity Tier 1 Capital Ratio (CET1 / RWA) 8.71% 7.46%

Capital Adequacy Ratio (RE / RWA) 16.18% 14.19%

(1) The Instruments authorized by Bacen to compose the Referential Equity according to CMN Resolution No. 3,444/2007 and do not fulfill the requirements established by CMN Resolution No. 4,192/2013 are reduced by 10% per year from 2013 to 2022. This reduction is applied on the values that composed the RE on December 31, 2012.

(2) According to CMN Resolution No. 4,192/2013, balances of the FCO are eligible to compose the RE.

(3) On june 30, 2015, it was considered the balance of subordinated debt instruments that composed the RE in December 31, 2012, applying on it the decay of 30%, as determined by CMN Resolution No. 4,192/2013.

(4) According to CMN Resolution No. 4,193/2013, corresponds to the application of the "F" factor to the amount of RWA, where "F" equals: 11%, from

October 1, 2013 to December 31, 2015; 9.875% from January 1, 2016 to December 31, 2016; 9.25%, from January 1, 2017 to December 31, 2017; 8.625% from January 1, 2018 to December 31, 2018 and 8%, from January 1, 2019.



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Regulatory Adjustments deducted from CET1:

Jun 30, 2015 Jun 30, 2014

Prudential Financial

Funding instruments issued by financial institutions (1) (2)

(3,900,003) (3,706,985)

Intangible assets constituted after October 2013 (3)

(2,095,283) (734,037)

Tax credits resulting from temporary differences that rely on the generation of future taxable profits or revenues for its realization (amount above 10% threshold)

(3)

(1,990,274) (123,951)

Goodwill (3) (5)

(1,245,653) (800,288)

Actuarial assets related to defined benefit pension funds net of deferred tax liabilities (3) (4)

(1,243,180) (1,578,241)

Tax credits resulting from tax losses and negative base for social contribution on net income (3)

(463,682) (257,610)

Non-controlling interests (3)

(378,534) (120,245)

Significant investments and tax credits resulting from temporary differences that rely on the generation of future taxable profits or revenues for their realization (amount exceeding the 15% threshold)

(3)

(290,712) (591,384)

Tax credits resulting from tax loss of excess depreciation (3)

(68,743) (41,736)

Deferred assets (2)

(22,639) (39,170)

Total (11,698,703) (7,993,647)

(1) Refers to the investment in Banco Votorantim.

(2) Regulatory Adjustments that are being fully computed since October, 2013, in accordance with CMN Resolution No. 4,192/2013.

(3) Regulatory Adjustments subject to phase-in, according to the CMN Resolution No. 4,192/2013.

(4) See notes 25.e – Benefits for Employees and 23.d - Taxes.

(5) The base value for calculating the goodwill is composed of: R$ 802,640 thousand in the investment line and R$ 2,311,492 thousand in the intangible assets line, see Notes 13 - Investments and 15 - Intangible Assets. The value in Intangible assets refers to the goodwill paid for the acquisition of Banco Nossa Caixa, merged in November/2009.

c) Fixed asset ratio

From 2015, the Fixed Asset Ratio is required only for the Prudential Conglomerate, totaling 16.06% on June 30,

2015, and it was calculated in compliance with CMN Resolutions No. 4,192/2013 and No. 2,669/1999.

In 2014 the Fixed Asset Ratio was calculated based on the Financial Conglomerate, amounting 22.55% on June 30,

2014.

Banco do Brasil S.A.

Report of Independent Auditors for

Prudential Conglomerate Consolidated

Financial Statements

June 30, 2015 (a free translation of the original report in Portuguese containing

the Prudential Conglomerate Consolidated Financial Statements

prepared for Special Purpose in accordance with the Resolution

n.º 4,280/13, of Conselho Monetário Nacional, and supplementary

regulations of the Central Bank of Brazil)

2

KPMG Auditores Independentes

SBS - Qd. 02 - Bl. Q - Lote 03 - Salas 708 a 711

Edifício João Carlos Saad

70070-120 - Brasília, DF - Brasil

Caixa Postal 8587

70312-970 - Brasília, DF - Brasil

Central Tel 55 (61) 2104-2400

Fax 55 (61) 2104-2406

Internet www.kpmg.com.br

KPMG Auditores Independentes, uma sociedade simples brasileira e

firma-membro da rede KPMG de firmas-membro independentes e

afiliadas à KPMG International Cooperative (“KPMG International”),

uma entidade suíça.

KPMG Auditores Independentes, a Brazilian entity and a member

firm of the KPMG network of independent member firms affiliated with

KPMG International Cooperative (“KPMG International”), a Swiss

entity.

Report of Independent Auditors for Prudential Conglomerate


To

The Board of Directors and Management

Banco do Brasil S.A.

Brasília – DF

We have audited the accompanying Prudential Conglomerate consolidated financial statements

of Banco do Brasil S.A. (“Bank”), which comprise the consolidated balance sheet of the

Prudential Conglomerate as at June 30, 2015, and the income statement, statement of changes in

equity and cash flow statement for the semester then ended, as well as the summary of

significant accounting policies and other explanatory information. These special purpose

financial statements have been prepared by management as required by Resolution n.º 4,280,

dated October 31, 2013, of the Conselho Monetário Nacional (CMN) and supplementary

regulations of the Central Bank of Brazil (BACEN), described in note n.º 3.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these Prudential

Conglomerate consolidated financial statements in accordance with the Resolution n.º 4,280/13

of CMN, and supplementary regulations of BACEN, described in note n.º 3, as well as for such

internal control as management determines is necessary to enable the preparation of the

Prudential Conglomerate consolidated financial statements that are free from material

misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these Prudential Conglomerate consolidated

financial statements prepared by management in accordance with the Resolution n.º 4,280/13, of

CMN, and supplementary regulations of BACEN, based on our audit in accordance with

Brazilian and International Auditing Standards, taking into account the ISA 800 - “Special

Considerations - Audits of Financial Statements Prepared in Accordance with Special Purpose

Frameworks”. Those standards require that we comply with ethical requirements and plan and

perform the audit to obtain reasonable assurance about whether the financial statements are free

from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and

disclosures in the financial statements. The procedures selected depend on the auditor’s

judgment, including the assessment of the risks of material misstatement of the Prudential

Conglomerate consolidated financial statements, whether due to fraud or error. In making those

risk assessments, the auditor considers internal controls relevant to the preparation and fair

presentation of the consolidated financial statements in order to design audit procedures that are

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

effectiveness of the Bank’s internal control. An audit also includes evaluating the

appropriateness of accounting policies used and the reasonableness of accounting estimates

made by management, as well as evaluating the overall presentation of the financial statements.

3

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a

basis for our audit opinion.

Opinion

In our opinion, the Prudential Conglomerate consolidated financial statements referred to above

present fairly, in all material respects, the financial position of Banco do Brasil S.A. as at June

30, 2015, the financial performance of its operations and its cash flows for the semester then

ended in accordance with the provisions for preparation of the Prudential Conglomerate

consolidated financial statements pursuant to the Resolution n.º 4,280/13, of CMN, and

supplementary regulations of BACEN for the preparation of these consolidated financial

statements prepared for special purpose, as described in note n.º 3 to these statements.

Emphasis

Basis of preparation of the Prudential Conglomerate consolidated financial statements.

Without modifying our opinion, we draw attention to note nº 3 to the financial statements that

discloses that the Prudential Conglomerate consolidated financial statements of Bank were

prepared by Bank´s management to meet the requirements of Resolution no 4,280/13, of CMN,

and supplementary regulations of BACEN. Consequently, our report on these consolidated

financial statements has been prepared solely for meeting these specific requirements and thus

may not be appropriate for other purposes.

Restatement of corresponding values

As mentioned on Note nº 3, due to changes in accounting practices adopted by the Bank on June

30, 2015, the corresponding values related to June 30, 2014, presented for comparative

purposes, were adjusted and have been restated in accordance with the guidelines of CPC 23

(Accounting Policies, Changes in Accounting Estimates and Errors). Our opinion does not

contain modifications related to this matter.

Other Matter

The Bank has prepared a separate set of financial statements for general purposes for the

semester then ended June 30, 2015, in accordance with accounting practices adopted in Brazil

applicable to institutions authorized to operate by the Central Bank of Brazil, on which we

issued a unqualified auditor’s report on August 12, 2015.

Brasília, August 28, 2015.

KPMG Auditores Independentes

CRC SP-014428/O-6 F-DF

Original report in Portuguese signed by

Carlos Massao Takauthi Contador CRC 1SP206103/O-4

Financial Statements

Prudential Conglomerate - 1st

half 2015

MEMBERS OF MANAGEMENT

PRESIDENT Alexandre Corrêa Abreu

VICE-PRESIDENTS Antonio Mauricio Maurano Antônio Valmir Campelo Bezerra César Augusto Rabello Borges Geraldo Afonso Dezena da Silva José Mauricio Pereira Coelho Osmar Fernandes Dias Paulo Roberto Lopes Ricci Raul Francisco Moreira Walter Malieni Junior

DIRECTORS Admilson Monteiro Garcia Adriano Meira Ricci Antonio Pedro da Silva Machado Carlos Alberto Araujo Netto Carlos Eduardo Leal Neri Carlos Roberto Cafareli Clenio Severio Teribele Edmar José Casalatina Edson Rogério da Costa Eduardo Cesar Pasa Gustavo de Faria Barros Hamilton Rodrigues da Silva Ilton Luís Schwaab Ives Cézar Fülber Janio Carlos Endo Macedo José Carlos Reis da Silva Leonardo Silva de Loyola Reis Luís Aniceto Silva Cavicchioli Luiz Henrique Guimarães de Freitas Márcio Luiz Moral Marco Antonio Ascoli Mastroeni Nilson Martiniano Moreira Rogério Magno Panca Sandro Kohler Marcondes Simão Luiz Kovalski Tarcísio Hübner Wilsa Figueiredo

BOARD OF DIRECTORS Adriana Queiroz de Carvalho Alexandre Corrêa Abreu Beny Parnes Juliana Publio Donato de Oliveira Luiz Serafim Spinola Santos Manoel Carlos de Castro Pires Pablo Fonseca Pereira dos Santos Tarcísio José Massote de Godoy

FISCAL COUNCIL Aldo César Martins Braido Giorgio Bampi Marcos Machado Guimarães Mauricio Graccho de Severiano Cardoso Paulo José dos Reis Souza

AUDIT COMMITEE Antonio Carlos Correia Egidio Otmar Ames Elvio Lima Gaspar

ACCOUNTING DEPT. Eduardo Cesar Pasa General Accountant Accountant CRC-DF 017601/O-5 CPF 541.035.920-87

Daniel André Stieler Accountant CRC-DF 013931/O-2 CPF 391.145.110-53

Members of Management