4Q15 Earnings Release - BB · 2016-03-07 · Highlights (2015/2014) NII Grew by 13.3% Banco do...

4Q15

Earnings

Release

2

Disclaimer

This presentation may include references and statements, planned synergies,

estimates, projections of results, and future strategy for Banco do Brasil, its

Associated and Affiliated Companies, and Subsidiaries. Although these references

and statements reflect the management’s belief, they also involve estimates and

unforeseen risks. Consequently, results may differ from those anticipated and

discussed here. These expectations are highly dependent on market conditions, on

Brazil’s economic and banking system performances, as well as on international

market conditions. Banco do Brasil is not responsible for updating any estimate in

this presentation.

Banco do Brasil S.A. – Fourth Quarter 2015 Earnings

Highlights (2015/2014)

NII Grew by 13.3%

3 Banco do Brasil S.A. – Fourth Quarter 2015 Earnings

Pre-Tax and Pre-

Provision

Earnings Increased by 17.2%

Administrative

Expenses

Fee Income

Cost to Income

Ratio

Increased by 9.2%

Under control (6.9% growth)

Improved to 40.8%

*BB Conglomerate.

(6,735)(2,218)

11,594

14,400

11,343

6,7042,279 222

2,805

2014 Adj. NetIncome

NII ALL Fee Income AdministrativeExpenses

Other 2015 Adj. NetIncome

One-Off Items 2015 Net Income

Net Income

R$ million

-8.1%

Quarter

Annual


ROE 13.3%

ROE 12.0%

ROE 11.4%

ROE 14.3%

ROE 13.0%

ROE 16.1%

+2.2%

*BB Conglomerate.

(924) (740)

2,648 2,512 2,881 816 343 271

(136)

3Q15 Adj. NetIncome

NII ALL Fee Income AdministrativeExpenses

Other 4Q15 Adj. NetIncome

One-Off Items 4Q15 NetIncome

Pre-Tax and Pre-Provision Earnings


+17.2%

2014 2013

+14.9%

2015

37,114

43,505

32,296

R$ million

Market Ratios

(1) Dividends and Interest on Own Shareholder Equity 12 months / Market

Capitalization. Source: Economatica

4Q15

0.92 0.89

3Q15

1.01 1.08

2Q15

1.06 1.05

1Q15

1.06

2.07

4Q14

1.05 1.08

Adjusted Earnings per Share Earnings per Share

Dec/15

2.86

Sep/15

2.86

Jun/15

4.66

Mar/15

4.45

Dec/14

5.91

Dec/15

0.50

Sep/15

0.51

Jun/15

0.82

Mar/15

0.77

Dec/14

0.82

4Q15

13.96

3Q15

13.98

2Q15

8.56

1Q15

8.95

4Q14

6.81

Source: Economatica. Source: Economatica.

Dividend Yield¹ (%) Earnings per Share (R$)

Price/Book Value Price/Earnings 12 months


Funding

R$ billion

31.0% on/ Dec/14


1.4% on/ Sep/15

*BB Conglomerate. (1) Includes part of the balances of the Private Securities (Note 17c). (2) Includes the balance of CRI (Certificates of Real Estate Receivables).

Dec/15

672.2

154.7

151.8

204.6

66.5

52.1

42.4

Sep/15

663.1

154.6

149.8

205.6

66.0

44.7

42.4

Jun/15

642.2

152.6

147.3

199.3

64.8

44.0

34.2

Mar/15

644.8

139.0

144.1

212.7

73.7

37.8

37.6

Dec/14

634.6

118.1

148.7

214.5

74.2

48.2

31.0

Agribusiness Let. of Credit + Mortgage Bonds

Savings Deposits

Time Deposits

Demand Deposits

Rep. Agreement with Private Securities¹

Interbank Deposits

92.1 91.8 92.5 91.9 92.1

Adj. Net Loan Portfolio / Comm. Funding (%)

Other Sources

R$ billion

Assets under Management – BB DTVM Brasilprev²

1st 21.5 % Market Share¹

(1) Source: Anbima – December/2015.


1st 49.5 % Market Share

(2) Source: Quantum Axis – December/2015.

Dec/15

22.8

Dec/14

20.5

13.8

Dec/12

13.1

Dec/13

Net Inflow

Dec/14 Dec/15

603.2

554.7

Dec/13

493.7

Dec/12

444.0

Loan Portfolio – Broad Concept¹

R$ billion

6.9 9.9

8.1 11.1 9.9

12 month Growth (%)

(1) It includes private securities and guarantees provided.


347.1

762.0

168.1

164.9

61.8 20.0

163.4

20.0

72.1

Dec/14

18.1

814.8

183.3 179.7

Sep/15

806.5

168.3 171.8 174.9

68.5 18.2

364.6

176.8

355.2

Jun/15

778.2

346.4

81.7

18.1

Dec/15

73.8

Mar/15

778.3

351.8

171.0

Agribusiness

Individuals Abroad

Companies Jointly Controlled Companies

8.1%

21.6%

22.1%

45.6%

9.1%

21.5%

22.5%

44.8%

2.6%

2.2%

Concentration in lower risk lines¹

R$ billion

(1) BB Classified Concept. (2) BB Organic Portfolio.

Auto Loans

Payroll²

+6.2%

Dec/15

62.5

7.5% 3.5%

89.0%

Sep/15

61.8

7.5% 3.6%

88.9%

Dec/14

58.8

7.3% 3.9%

88.8%

23.5%

Market

Share¹

Salary Loans

Mortgages

+26.6%

Dec/15

49.1

37.2

11.9

Sep/15

46.9

35.2

11.7

Dec/14

38.8

28.5

10.3

Companies Individuals

Dec/15

18.6

Sep/15

19.4

Dec/14

16.8

INSS Retirees and Pensioners

Private Sector Employees

Civil Servants

-5.6%

Dec/15

22.3

Sep/15

23.1

Dec/14

23.6

1.26 1.31 1.50

Payroll NPL +90 days (%)¹

2.49 2.28 3.18

Salary Loans NPL +90 days (%)

0.90 0.82 0.87

Auto Loans NPL +90 days (%)

1.17 1.16 0.61


15.9% on/ Dec/14

30.5% on/ Dec/14

Individuals Mortgage NPL +90 days (%)

(1) BB Classified Loan Portfolio. (2) BB organic Portfolio.

%

Individuals Portfolio¹

Dec/15

67.3

20.4

8.1 4.2

Sep/15

66.8

21.0

7.9 4.3

Dec/14

66.2

21.0

7.8 5.0

More than 10 years

From 5 to 10 years

From 2 to 5 years

Up to 2 years

11

Relationship


Dec/15

7.2

13.2

79.6

Sep/15

7.3

13.4

79.4

Dec/14

7.1

14.2

78.6

INSS Retirees and Pensioners

Private Sector Employees

Civil Servants

Individuals Portfolio Profile (Direct Consumer Credit and Auto Loans)²

Loans to Companies – Broad Concept¹

R$ billion

(1) It includes private securities and guarantees provided. (2) It includes Working Capital, Receivables, Credit Card and Overdraft Account. (3) It Includes FCE/ACE and BNDES Exim.

(4) Companies with annual revenues up to R$ 25 million.

+5.0%

Dec/15

364.6

109.0

183.5

23.4 19.6

29.1

Sep/15

355.2

104.7

180.5

26.1 18.1

25.8

Dec/14

347.1

106.6

183.0

21.7 16.5

19.4

Investments + Private Securities

Working Capital²

Guarantees

Trade Finance³

Other

Corporate Portfolio by Size

+5.0%

Dec/15

364.6

271.0

93.6

Sep/15

355.2

260.0

95.2

Dec/14

347.1

244.9

102.2

Middle Market, Corporates and Government Very Small and Small Companies4


8.4% on/ Dec/14

10.7% on/ Dec/14

Very Small and Small Companies Portfolio¹

(1) BB Classified Loan Portfolio - Companies with annual revenues up to R$ 25 million .

Relationship (%)

Dec/15

42.5

33.3

20.7

3.5

Sep/15

41.6

33.3

21.1

4.1

Dec/14

39.0

32.7

21.8

6.4

More than 10 years

From 5 to 10 years

From 2 to 5 years

Up to 2 years

More than 20 years

23.3

From 10 to 20 years

33.8

From 5 to 10 years

29.1

From 2 to 5 years

12.8

Up to 2 years

1.0

Dec/15 Total Amount: R$ 93.6 bn

Amount Distribution by Time of Company Foundation – Very Small and Small Companies Portfolio


Agribusiness

(1) It includes Rural Product Bills and guarantees provided. (2) Source: Banco Central do Brasil – December/2015.

R$ billion

15/16 Harvest (Dec/15)

+6.1%

Dec/15

174.9

123.3

51.6

Sep/15

171.8

120.6

51.2

Dec/14

164.9

117.7

47.2

Individuals Companies

Total disbursement in 15/16 Haverst: R$ 43.6 billion

Agribusiness Loan Portfolio by Costumer Type¹ Mitigators Use (Working Capital for Input Purchase)


9.4% on/ Dec/14

4.8% on/ Dec/14

33.0%

67.0%

Insured

Not Insured

1o 60.9 % Market Share²

Renegotiated Overdue Loan Portfolio¹

R$ million

(1) Table according Individuals Explanatory Notes 10.k Renegotiated Loan Portfolio


Renegotiated Loan Portfolio Contracts (%) – 4Q15²

14.4%

85.6%

Without Guarantees

With Guarantees

4Q14 3Q15 4Q15

Credits Renegotiated when Past Due - Changes

Initial Balance 7,876 12,701 15,520

Contracts 1,929 3,783 6,015

Amortization and capitalized interest (260) (461) (1,037)

Write-Off (515) (503) (845)

Past due Renegotiated Loan Portfolio (A) 9,030 15,520 19,653

ALL Balance (B) 5,742 7,464 8,585

NPL + 90 days (C) 1,424 2,469 3,171

Indicators - %

ALL / Loan Portfolio (A/B) 63.6 48.1 43.7

NPL + 90 days / Loan Portfolio (C/A) 15.8 15.9 16.1

ALL Balance/NPL + 90 days (B/C) 403.1 302.2 270.7

Credits Renegotiated/Classified Portfolio 1.3 2.2 2.7

(1) Collaterals and Personal Guarantees.

Delinquency Ratios¹

(1) BB Classified Loan Portfolio.

Dec/15

2.24

3.40

Sep/15

2.06

3.10

Jun/15

1.89

2.90

Mar/15

1.84

2.80

Dec/14

1.86

2.70

Sep/14

1.91

2.90

Jun/14

1.77

2.90

Mar/14

1.76

2.90

Banco do Brasil Banking Industry

NPL +15 Days (%) NPL +90 Days (%)

NPL Ratio +90 days(%)


Dec/15

0.97

3.42

2.17

Sep/15

0.84

3.10

2.17

Jun/15

0.73

2.72

2.16

Mar/15

0.82

2.52

2.20

Dec/14

0.69

2.59

2.30

Sep/14

0.59

2.67

2.39

Jun/14

0.56

2.43

2.32

Mar/14

0.74

2.24

2.44

Agribusiness Companies Individuals

1.66

5.56

4.52

Sep/15

1.69

5.62

4.79

Jun/15

1.29

4.50

4.47

Mar/15

1.29

4.69

4.60

Dec/15 Dec/14

1.19

3.90

4.26

Sep/14

1.08

4.07

4.32

Jun/14

0.91

3.80

4.27

Mar/14

1.10

3.84

4.58

Agribusiness Companies Individuals

Vintages

Annual Vintage – Individuals Loan Portfolio


0 10 20 30 60 70 80

5.00%

4.00%

3.00%

2.00%

1.00%

0.00%

Delin

quency

90 d

ays

Annual Vintage – Very Small and Small Companies Loan Portfolio

Vintage 2010A 2011A 2012A 2013A 2014A 2015A

Months

0

0%

Delin

quency

90 d

ays

Vintage 2010A 2011A 2012A 2013A 2014A 2015A

Months

5%

10%

15%

20%

40 50 10 20 30 60 70 80 40 50

NPL Formation and Average Risk

(3) Required Provision / BB Classified Loan Portfolio.

Dec/15

5.70

4.23

Sep/15

5.50

3.97

Jun/15

5.00

3.81

Mar/15

4.90

3.74

Dec/14

4.90

3.57

Sep/14

4.80

3.47

Jun/14

4.80

3.36

Mar/14

4.90

3.36

Banking Industry Banco do Brasil

(1) Quarterly change in the balance of past-due for over 90 days operations + current quarter write-off. (2) It considers the classified loan portfolio of the previous quarter.

New NPL¹, Write Off and NPL Formation Rate

Average Risk³ (%)


Dec/15

4.81 6.22

Sep/15

3.97

5.59

Jun/15

4.45 4.91

Mar/15

4.16 4.28

Dec/14

3.69 3.86

Sep/14

3.63 4.76

Jun/14

4.16 4.54

Write Off (R$ billion) New NPL (R$ billion)

0.88 0.81 0.72 0.64 0.60 0.76 0.74

New NPL / Loan Portfolio² (%)

99.85 83.57 112.32 103.08 105.64 131.99 126.76

Quarterly ALL/New NPL (%)

Asset Quality¹

Dec/15

209.19

167.65

Sep/15

218.07

177.42

Jun/15

211.79

172.41

Mar/15

213.99

175.00

Dec/14

203.48

181.48

Sep/14

193.64

165.52

Jun/14

203.77

165.52

Mar/14

203.97

168.97

Banco do Brasil Banking Industry

712902

557536

954

680

Dec/15

6,991

1,326

4,319

391

Sep/15

5,765

1,221

3,832

176

Jun/15

5,191

3,810

144

Mar/15

5,654

1,405

3,142

206

Dec/14

4,890

1,291

2,832

56

Sep/14

4,301 431

1,382

2,543

-56

Jun/14

4,174 400

1,197

2,600

-23

Mar/14

3,806 509

1,238

1,929

130

Agribusiness Individuals Companies Abroad

(1) BB Classified Portfolio. (2) Quarterly ALL. It does not consider additional provision.

Coverage Ratio +90 days (%) and ALL Balance

ALL by Segment²


33,577 3,228

30,349

31,926 3,705

28,220

27,575 1,405

26,170

26,862 1,380

25,482

25,295 1,405

23,889

23,757 1,414

22,342

22,703 1,530

21,173

21,936 1,419

20,517

Additional Allowance - R$ million Required Allowance - R$ million

R$ million

Allowance for Loan Losses: IFRS x BRGAAP


2015¹

33,577

26,002

2014

25,295

18,951

2013

21,565

15,653

2012

19,133

13,577

2011

17,411

10,579

BRGAAP ALL Balance² IFRS ALL Balance

R$ million

(1) IFRS ALL Balance: numbers not audited. (2) BB Conglomerate from 2011 to 2013 and it does not consider BV. In 2014 and 2015, BB Multiple Bank.

Chg. %

On 4Q14 On 3Q15 On 2014

Net Interest Income 13,483 14,364 15,180 12.6 5.7 50,346 57,050 13.3

Loan Operations Income 22,291 25,599 26,393 18.4 3.1 84,494 98,519 16.6

Funding Expenses (9,184) (11,700) (11,381) 23.9 (2.7) (34,524) (42,841) 24.1

Institutional Funding Expenses¹ (3,296) (4,130) (4,159) 26.2 0.7 (12,984) (15,579) 20.0

Recovery of Write-offs Loans 1,065 804 1,346 26.4 67.4 3,648 4,059 11.3

Treasury Income² 2,607 3,792 2,981 14.3 (21.4) 9,712 12,892 32.7

4Q14 2014 20154Q153Q15Chg. %

Net Interest Income and Net Interest Margin

*BB Conglomerate. (1) It Includes senior debt, subordinated debt and hybrid capital instrument and abroad (HCDI). (2) It included interest income, profitable compulsory deposits income, tax

hedge, derivatives and other financial instruments that compensate the exchange rate variation in result.

21

4Q15

2.3

4.5

3Q15

2.4

4.3

2Q15

2.5

4.2

1Q15

2.4

4.3

4Q14

2.7

4.4

Risk Adjusted NIM NIM

Global Spread (%) Spread by Segment (%)

*BB Conglomerate. (1) Annualized data. (2) Series revised from 1Q15 due to methodology adjustments. (3) It does not include loans with government sector.

R$ million


7.1

14.9

2Q15

4.8

4Q15

4.8

5.8

7.4

15.5

3Q15

4.5

5.7 5.6

4Q14

14.0

5.7

6.9

4.9 5.1

5.5

1Q15

7.0 7.0

13.5 13.8

Agribusiness NIM Loan Operations NIM Companies NIM² Individuals NIM

22

NII¹

Revenue from Loans


4Q15

26.4

3Q15

25.6

2Q15

23.7

1Q15

22.8

4Q14

22.3

3Q14

21.5

2Q14

20.9

1Q14

19.8

Revenue from Loans

13.3 12.6 11.9 11.3 10.9 10.4 9.8 9.0

Accumulated Selic (%YTD in 12 months)

4Q15

4.2

11.4

3Q15

4.1

11.7

2Q15

3.7

10.4

1Q15

3.6

9.4

4Q14

3.3

9.2

3Q14

3.2

9.0

2Q14

3.3

8.4

1Q14

3.2

7.9

Institutional Funding

Funding Expenses

75.7

13.3

76.6

12.6

77.5

11.9

76.8

11.3

77.3

10.9

77.2

10.4

78.4

9.8

77.7

9.0

Funding Expenses - % Selic

Accumulated Selic (%YTD in 12 months)

(1) BB Conglomerate.

Funding Expenses

Fee Income¹

R$ million


(1) BB Conglomerate.

Chg. %

On 4Q14 On 3Q15 On 2014

Fee Income 6,671 6,907 7,250 8.7 5.0 24,647 26,925 100.0 9.2

Credit / Debit Cards 1,806 1,635 1,753 (3.0) 7.2 6,461 6,504 24.2 0.7

Account Fees 1,212 1,374 1,458 20.4 6.2 4,610 5,227 19.4 13.4

Asset Management Fees 1,110 1,254 1,220 9.9 (2.7) 4,133 4,726 17.6 14.4

Loan Fees 470 503 631 34.1 25.3 1,804 1,993 7.4 10.5

Collections 397 435 419 5.6 (3.7) 1,487 1,700 6.3 14.3

Insurance, Pension and Premium Bonds 282 231 254 (10.2) 9.8 1,003 1,012 3.8 0.9

Billings 253 250 262 3.4 4.8 944 1,045 3.9 10.7

Interbank 197 196 200 1.7 2.2 749 775 2.9 3.5

Capital Market 129 90 154 19.3 70.3 481 522 1.9 8.4

Fiduciary Services 116 130 123 6.4 (5.3) 445 490 1.8 10.1

Consortium 94 109 113 20.1 4.3 336 427 1.6 26.9

Other 603 700 663 9.8 (5.3) 2,193 2,504 9.3 14.2

4Q14 3Q15 4Q15 2014 2015 Share %Chg. %

BB Seguridade

(1) Source: Susep, Dec/15.

Adjusted Net Income (R$ million) Insurance’s Premiums and Collection¹


+22.4%

2015

3,945

2014

3,223

Insurance´s PremiumsMarket

Share %Ranking

Vehicle 14.3 2nd

Life 20.8 1st

Rural 78.5 1st

CollectionMarket

Share %Ranking

Pension Plan 36.0 1st

Premium Bond 30.1 1st


Specialized Offices

Automated Service Channels- Transactions BB Digital – Mobile (million transactions)

+ 157.6% 4Q14

836

2,155

4Q15

Our more than 62 million clients count on more than 67 thousand points of service, present in 99.7% of the Brazilian municipalities and an increasingly digital Bank.

16 Very Small and Small Companies offices in Brazil.

Expansion project all over the country.

2016: Prevision of opening 30 new Offices.

Service Network Channels

Dec/2015

27.9 % Internet 31.9 % Mobile 20.7 % ATM¹ 3.9 % In Branches 15.6 % Other

(1) Owned by BB.

104 BB Estilo Digital branches. More than 400 thousand

benefited clients. More than 200 branches by the

end of 2016. More than 1 million benefited

clients in 2016.

Administrative Expenses and Cost to Income Ratio

R$ billion

40.4 39.9

43.5

2015

14.2

20.3

2014

13.8

18.4

40.8

43.6

4Q15

4.0

5.3

3Q15

3.5

5.0

4Q14

3.8

4.9


Other Expenses Personnel Expenses Cost to Income Ratio (%) Cost to Income Ratio (%) - 12 months

*BB Conglomerate.

BIS Ratio¹

%

(1) The consolidation scope used as a base for checking the operating limits was also changed, so that it took into account only the Financial Conglomerate, from October 1, 2013,

through December 31, 2014, and the Prudential Conglomerate, as defined in CMN resolution 4,280/2013, from January 1, 2015.


3Q15 4Q15 1Q15

16.02 16.13 16.18

2Q15 4Q14

16.20 16.11

8.68 9.04 8.17 8.71 8.07

BIS Ratio Tier I Core Capital

11.39 11.36 11.36 11.61 11.39

Full application of Basel III rules

%

Tier 1

BIS Ratio


16.1 15.1 14.7

0.9 15.6

(1.1) (0.4)

BIS Ratio DeductionsSchedule

Anticipation

BIS Ratio with fulldeductions

RWA RulesAnticipation

BIS Ratio with FullyLoaded Basel III

Rules

Use of Tax Credits Simulated BISRatio under

complete Basel IIIRules

10.2 10.0 10.9

11.4

(1.2) (0.2)

0.9

Tier 1 DeductionsSchedule

Anticipation

Tier 1 with fulldeductions

RWA RulesAnticipation

Tier 1 with FullyLoaded Basel III

Rules

Use of Tax Credits Simulated Tier 1under completeBasel III Rules

%

(1) Adjusted ROE estimated for 2015 uses estimated adjusted shareholders’ equity, free from the effects of: (i) the restatement of actuarial assets and liabilities

arising from the Deliberation CVM/695; and (ii) minority interests in controlled companies.

(2) Commercial Funding includes Total Deposits, Agribusiness Letters of Credit, Real Estate Letters of Credit and Repos with Corporate Bonds.


(4) Allowance for Loan Losses expenses of the last twelve months / Average Classified loan portfolio for the same period.

29

Guidance


Adjusted Return on Equity¹ 13 - 16 13.0

Net Interest Income 11 - 15 13.3

Commercial Funding² 5 - 9 5.9

Domestic Loan Portfolio³ - Broad Concept 7 - 11 5.9

Individuals 6 - 10 7.5

Companies 5 - 9 5.0

Agribusiness 10 - 14 6.1

Allowance for Loan Losses⁴ 3.1 - 3.5 3.6

Fee Income 7 - 10 9.2

Administrative Expenses 5 - 8 6.9

2015 Guidance 2015 Performance

*BB Conglomerate.

%

30

Guidance 2016


Adjusted Return on Equity¹ 11 - 14

Net Interest Income 7 - 11

Domestic Loan Portfolio² - Broad Concept 3 - 6

Individuals 5 - 8

Companies 1 - 4

Agribusiness 6 - 9

Allowance for Loan Losses³ 3.7 - 4.1

Fee Income 7 - 11

Administrative Expenses 5 - 8

2016 Guidance

(1) Adjusted ROE estimated for 2015 uses estimated adjusted shareholders’ equity, free from the effects of: (i) the restatement of actuarial assets and liabilities

arising from the Deliberation CVM/695; and (ii) minority interests in controlled companies.


(3) Allowance for Loan Losses expenses of the last twelve months / Average Classified loan portfolio for the same period.

*These estimates consider BB Multiple Bank.

Investor Relations Unit

Av. Paulista, 2,163 – 2nd Floor

01311-933 - São Paulo (SP)

Telephone: +55 (11) 3066 9110

bb.com.br/ir

[email protected]

31

Contacts


33. BIS III - Capital Requirements

34. One-Off Items

35. Income Statement – Main Lines

36. Net Interest Income

37. Net Interest Income

38. Total Loan Portfolio - Risk Level

39. Allowance for Loan Losses Balance – Current and Past Due Operations

40. Write-off

41. Renegotiated Loan Portfolio

42. Allowance for Loan Losses (ALL) and Loan Portfolio

43. Sources and Uses

44. Foreign Borrowing

45. Classified Loan Portfolio - by contracted period

46. Individuals Loan Portfolio – Average Rates/Tenor

47. Banco Votorantim

48. Actuarial Assets (Previ) - CVM 695/12

49. Actuarial Liabilities (Cassi) - CVM 695/12

50. Amounts recognized in equity because of the adoption of CVM 695/12

51. Corporate Governance

52. Means of Payment - Organization Chart

53. Global Presence

54. Human Resources

32

Appendix


Implementation Schedule %

BIS III – Capital Requirements


(1) The Additional CET1 Countercyclical Buffer was not activated by the Central Bank in 2016, according to CMN Resolution 4,443/2015.

2015 2016 2017 2018 2019

Common Equity Tier I (CET1) 4.500 4.500 4.500 4.500 4.500

Tier I 6.000 6.000 6.000 6.000 6.000

Brazilian BIS Ratio 11.000 9.875 9.250 8.625 8.000

Capital Conservation Buffer 0.000 0.625 1.250 1.875 2.500

Additional CET1 Countercyclical Buffer

(superior limit)0.000 0.625¹ 1.250 1.875 2.500

Additional CET1 Systemic (D-SIB)

Buffer0.000 0.000 0.250 0.500 1.000

CET1 + Buffers 4.500 5.750 7.250 8.750 10.500

Tier I + Buffers 6.000 7.250 9.000 10.250 12.000

Brazilian BIS Ratio + Buffers 11.000 11.125 12.000 12.875 14.000

One-Off Items

R$ million


Adjusted Net Income 3,020 2,881 2,648 11,343 11,594

(+) One-Off Items (61) 181 (136) (97) 2,805

Economic Plans (387) (247) (0) (1,307) (403)

Tax Efficiency - - - 260 -

Provision Legal Lawsuits - Adjust. Parameters and Policies Agreements - - - 385 -

Deferred Tax - - - - 2,326

BrasilPrev: Susep Circular 457/12 and 462/13 325 - - 325 385

BrasilPrev Effect on Minority Shareholders (65) - - (65) (74)

Extraordinary Provision for Lawsuits 46 (1,429) 503 404 (2,057)

Cateno - Gestão de Contas de Pagamentos S/A - - - - 11,572

Cateno - Unrealized Income - - - - (5,800)

Social Integration Program/Public Servant Fund Program (PIS/PASEP) - Cateno - - - - (1,070)

Funds and Programs Adjustment - - - - (127)

Additional ALLL - (2,370) 495 (143) (1,876)

Employees Retirement Plan (PAI) - (372) - - (372)

Provision for commitment to buy loyalty program points from partners - (765) - - (765)

Deferred Tax on CSLL - 3,405 - - 3,405

Exchange Rate Effect on Banco Patagonia - - (541) - (541)

Investment Revaluation in Stocks and Shares - - (321) - (321)

Tax Eff. and Stat. Profit Sharing on One-Off Items 20 2,325 (271) 43 (1,476)

Net Income 2,959 3,062 2,512 11,246 14,400

4Q14 3Q15 4Q15 2014 2015

R$ million

Chg. %

On 4Q14 On 3Q15 On 2014

Financial Intermediation Income 41,320 67,643 41,752 1.0 (38.3) 145,234 199,241 37.2

Financial Intermediation Expenses (27,837) (53,279) (26,572) (4.5) (50.1) (94,888) (142,191) 49.9

Net Interest Income 13,483 14,364 15,180 12.6 5.7 50,346 57,050 13.3

Allowance for Loan Losses (5,203) (6,407) (7,331) 40.9 14.4 (18,531) (25,266) 36.3

Net Financial Margin 8,280 7,957 7,850 (5.2) (1.4) 31,815 31,784 (0.1)

Fee income 6,671 6,907 7,250 8.7 5.0 24,647 26,925 9.2

Income f/ Insur., Pension P. and Premium Bonds 1,273 1,285 1,241 (2.5) (3.4) 4,630 4,941 6.7

Contribution Margin 14,946 14,835 14,891 (0.4) 0.4 56,205 58,278 3.7

Administrative Expenses (8,694) (8,551) (9,291) 6.9 8.7 (32,290) (34,508) 6.9

Commercial Income 6,113 6,123 5,445 (10.9) (11.1) 23,497 23,217 (1.2)

Previ 228 40 40 (82.5) 0.0 1,348 358 (73.4)

Income Before Taxes 4,849 4,534 4,170 (14.0) (8.0) 18,583 18,239 (1.9)

Income and Social Contribution Taxes (987) (651) (674) (31.7) 3.5 (4,187) (2,980) (28.8)

Corporate Profit Sharing (458) (553) (383) (16.2) (30.7) (1,644) (1,943) 18.2

Adjusted Net Income 3,020 2,881 2,648 (12.3) (8.1) 11,343 11,594 2.2

Adjusted ROE (%) 14.9 13.3 12.0 - - 14.3 13.0 (9.3)

Net Income 2,959 3,062 2,512 (15.1) (18.0) 11,246 14,400 28.0

ROE (%) 14.6 14.1 11.4 - - 14.2 16.1 13.6

4Q14 3Q15 4Q15 2014 2015Chg. %


Income Statement – Main Lines

R$ million

(1) It contains items not showed in the Treasury breakdown, including Exchange variation.


Net Interest Income

Chg. %

On 4Q14 On 3Q15 On 2014

Revenue from Loans 22,291 25,599 26,393 18.4 3.1 84,494 98,519 16.6

Individuals 8,229 9,347 9,909 20.4 6.0 31,894 36,489 14.4

Companies 8,894 9,824 10,114 13.7 3.0 32,841 38,143 16.1

Agribusiness 4,121 5,052 5,315 29.0 5.2 15,080 19,303 28.0

Equalization 1,565 2,004 1,963 25.4 (2.1) 5,454 7,569 38.8

Abroad 855 1,120 679 (20.5) (39.4) 3,832 3,551 (7.3)

Sale or Transference of Financial Assets 110 123 253 129.5 106.6 578 592 2.4

Other 45 84 75 - (9.9) 125 263 110.3

Leasing 37 49 48 31.9 (2.0) 145 179 24.0

4Q14 3Q15 4Q15 2014 2015Chg. %

Chg. %

On 4Q14 On 3Q15 On 2014

Treasury 2,607 3,792 2,981 14.3 (21.4) 9,712 12,892 32.7

Securities 11,210 14,791 13,733 22.5 (7.1) 40,615 54,381 33.9

Open Market (8,987) (12,043) (11,802) 31.3 (2.0) (31,848) (44,411) 39.4

Financ. Inc. Insur., Pension & S.Bonds Op. 389 392 525 35.0 34.1 1,325 1,820 37.3

Financial Derivatives (70) 404 505 - - (858) 811 -

Other Treasury Components¹ 65 248 19 (71.4) (92.5) 479 291 (39.2)

4Q14 3Q15 4Q15 2014 2015Chg. %

Chg. %

On 4Q14 On 3Q15 On 2014

Credit Recovery 1,065 804 1,346 26.4 67.4 3,648 4,059 11.3

2014 20154Q14 3Q15 4Q15Chg. %

*BB Conglomerate.

(1) Repurchase Agreements with Private Securities not included.

(2) Series revised from 1Q15 on for composition adjustments.

R$ million

(1) Series revised from 1Q15 on for composition adjustments.


Net Interest Income

Chg. %

On 4Q14 On 3Q15 On 2014

Funding Expenses¹ ² (9,184) (11,700) (11,381) 23.9 (2.7) (34,524) (42,841) 24.1

Commercial Funding (7,473) (8,272) (8,079) 8.1 (2.3) (29,888) (31,113) 4.1

Time Deposits (2,304) (2,135) (2,185) (5.2) 2.4 (10,417) (8,330) (20.0)

Savings Deposits (2,530) (2,944) (2,896) 14.5 (1.6) (9,748) (10,979) 12.6

Judicial Deposits (2,639) (3,193) (2,999) 13.6 (6.1) (9,723) (11,804) 21.4

Bonds (2,826) (4,582) (4,522) 60.0 (1.3) (9,668) (16,158) 67.1

Agribusiness Letters of Credit (2,579) (4,075) (4,031) 56.3 (1.1) (8,963) (14,322) 59.8

Mortgage Bonds (247) (507) (491) 99.0 (3.2) (705) (1,837) 160.5

Compulsory Deposits 1,279 1,322 1,390 8.7 5.2 5,669 5,097 (10.1)

FGC (163) (168) (169) 3.9 0.8 (637) (667) 4.7

4Q14 3Q15 4Q15 2014 2015Chg. %

Chg. %

On 4Q14 On 3Q15 On 2014

Institutional Funding¹ (3,296) (4,130) (4,159) 26.2 0.7 (12,984) (15,579) 20.0

Subordinated Debt Abroad (124) (170) (164) 32.8 (3.4) (459) (599) 30.6

Hybrid Capital Instruments (461) (640) (607) 31.7 (5.1) (1,629) (2,245) 37.9

Subordinated CDB (122) (63) (23) (81.1) (63.3) (573) (257) (55.2)

Securities Issued Abroad (295) (311) (281) (4.5) (9.6) (1,041) (1,109) 6.5

Financial Letters (960) (1,137) (1,210) 26.1 6.4 (3,296) (4,628) 40.4

Borrowing, Assignments and Onlending (1,335) (1,810) (1,873) 40.3 3.5 (5,986) (6,740) 12.6

20154Q14 3Q15 4Q15Chg. %

2014

*BB Conglomerate.

R$ million


Total Loan Portfolio - Risk Level

Balance Provision Share% Balance Provision Share% Balance Provision Share%

AA 395,243 - 59.1 397,204 - 55.9 373,298 - 52.0

A 95,017 475 14.2 117,209 586 16.5 144,778 724 20.2

B 122,589 1,226 18.3 126,287 1,263 17.8 124,925 1,249 17.4

C 22,588 678 3.4 29,421 883 4.1 25,526 766 3.6

D 3,287 329 0.5 5,491 549 0.8 11,033 1,103 1.5

E 9,366 2,810 1.4 10,255 3,076 1.4 11,797 3,539 1.6

F 3,520 1,760 0.5 3,758 1,879 0.5 4,768 2,384 0.7

G 2,663 1,864 0.4 3,340 2,338 0.5 3,806 2,664 0.5

H 14,748 14,748 2.2 17,646 17,646 2.5 17,919 17,919 2.5

Total 669,020 23,889 100.0 710,612 28,220 100.0 717,849 30,349 100.0

AA-C 635,436 2,379 95.0 670,122 2,732 94.3 668,526 2,739 93.1

D-H 33,584 21,511 5.0 40,490 25,489 5.7 49,323 27,610 6.9

Dec/14 Sep/15 Dec/15

*BB Multiple Bank.

4Q15

3.4

15.4

16.8

35.7

3Q15

3.9

13.6

16.5

34.0

2Q15

1.5

13.6

14.4

29.5

1Q15

1.5

13.0

14.4

28.9

4Q14

1.5

11.9

13.9

27.3

Additional (Complementary) Current (Generic) Past Due (Specific) Total

R$ billion


Allowance for Loan Losses Balance – Current and Past Due Operations

*BB Conglomerate.

Dec/15

4.23

2.49

Sep/15

4.03

2.37

Jun/15

4.05

2.38

Mar/15

4.21

2.38

Dec/14

4.44

2.38

%

Peers Avarage² Banco do Brasil

*BB Multiple Bank. (1) Write-offs accumulated in 12 months / average balance of the classified credit portfolio in 12 months. (2) It corresponds to the three largest Brazilian private banks.


Write-off – Percentage on the Classified Loan Portfolio¹

Peers Average¹

13,832

BB

19,653

Renegotiated Loan Portfolio

3.3 2.7

Dec/15

8,585

7,404

Sep/15

7,464

6,735

Jun/15

6,616

6,431

Mar/15

6,111

6,511

Dec/14

5,742

6,374

BB - ALL Balance Peers Average - ALL Balance

16.1

20.3

15.9

21.9

13.6

23.9

15.6

25.0

15.8

25.9

R$ million

BB - Renegotiated Portfolio NPL +90 days (%) Peers Average - Renegotiated Portfolio NPL +90 days (%)

Renegotiated Loan Portfolio/Classified Loan Portfolio (%)

*BB Multiple Bank. (1) It corresponds to two large Brazilian private banks.


Renegotiated Loan Portfolio

Renegotiated Loan Portfolio– 4Q15

BB x Peers¹

3.2 1.1 1.2 2.4 7.7 33.1

669.0

717.8

Dec/14 Dec/15 AA-C D E F G H

3.4 3.2 3.0 3.0 2.7

ALL / Loan Portfolio (%)²

*BB Multiple Bank. (1) Average classified loan portfolio 12 months; (2) ALL accumulated in 12 months / 12 months Average Loan Portfolio; (3) 3 months Average Loan Portfolio; (4) Quarterly

ALL / 3 months Average Loan Portfolio.

4Q15

7.0

711.5

3Q15

5.8

695.8

2Q15

5.2

683.5

1Q15

5.7

672.3

4Q14

4.9

654.0

Allowance for Loan Losses

Loan Portfolio³

R$ billion

4Q15

23.6

690.1

3Q15

21.5

675.7

2Q15

20.0

659.8

1Q15

19.0

644.3

4Q14

17.2

629.9

Allowance for Loan Losses

Loan Portfolio¹

1.0 0.8 0.8 0.8 0.7

ALL / Loan Portfolio (%)⁴


Allowance for Loan Losses (ALL) and Loan Portfolio

Allowance for Loan Losses (Quarterly) / Loan Portfolio Allowance for Loan Losses (12 months) / Loan Portfolio

Classified Loan Portfolio – Growth by Risk Level

7.3% In 12 months

*BB Conglomerate. (1) It includes part of the balances of Private Securities (Note 17c). (2) It includes Foreign Borrowings, Foreign Securities, Foreign Onlending, Subordinated Debt Abroad

and Hybrid Capital Instruments Abroad. (3) From 3Q14 on, it includes Capital Eligible Debt reallocated to Core Capital, as authorized by the Central Bank by Official Letter 15006/2014-

BCB/DEORF/DIFIN. (4) It includes Letters of Credit and Debentures.


Sources and Uses Dec/14 Sep/15 Dec/15 Chg. %

R$ billion Balance Share % Balance Share % Balance Share % On Dec/14 On Sep/15

Sources 823.2 100.0 903.4 100.0 898.9 100.0 9.2 (0.5)

Commercial Funding 634.6 77.1 663.1 73.4 672.2 74.8 5.9 1.4

Total Deposits 468.4 56.9 463.8 51.3 465.3 51.8 (0.6) 0.3

Agribusiness Let. of Credit + Mortgage Bonds 118.1 14.3 154.6 17.1 154.7 17.2 31.0 0.1

Repos w/ Corporate Bonds¹ 48.2 5.8 44.7 4.9 52.1 5.8 8.3 16.7

Domestic Onlending 91.1 11.1 92.3 10.2 91.9 10.2 0.9 (0.4)

Foreign Borrowing² 68.5 8.3 104.2 11.5 89.9 10.0 31.2 (13.7)

Subordinated Debt 42.8 5.2 43.9 4.9 45.5 5.1 6.3 3.7

Debt Instruments eligible for capital³ 29.6 3.6 38.4 4.2 35.8 4.0 21.2 (6.6)

Others Commercial Papers⁴ 9.1 1.1 7.3 0.8 9.4 1.0 3.7 28.8

Financial and Development Funds 10.8 1.3 14.7 1.6 15.0 1.7 38.4 2.2

Compulsory Deposits (63.3) (7.7) (60.4) (6.7) (60.8) (6.8) (3.8) 0.7

Uses 823.2 100.0 903.4 100.0 898.9 100.0 9.2 (0.5)

Net Loan Portfolio (a) = (b) + (c) + (d) 707.1 85.9 737.5 81.6 749.0 83.3 5.9 1.6

Loan Portfolio (b) 687.9 83.6 726.9 80.5 736.0 81.9 7.0 1.3

Private Securities (c) 46.5 5.7 44.7 4.9 48.6 5.4 4.6 8.8

Allowance for Loan Losses (d) (27.3) (3.3) (34.0) (3.8) (35.7) (4.0) 30.5 4.8

Onlending in the Country (e) 122.4 14.9 129.0 14.3 129.9 14.5 6.2 0.7

Adjusted Net Loan Portfolio (a) - (e) 584.8 71.0 608.5 67.4 619.1 68.9 5.9 1.7

Available Funds 116.1 14.1 165.9 18.4 149.9 16.7 29.2 (9.6)

Ratio - %

Net Loan Portfolio / Total Deposits 151.0 159.0 161.0

Net Loan Portfolio / Commercial Funding 111.4 111.2 111.4

Adj. Net Loan Portfolio / Comm. Funding 92.1 91.8 92.1

Net Loan Portfolio / Sources 85.9 81.6 83.3

US$ billion

Dec/15

46.3 1.2

3.4

6.8

16.6

18.3

Sep/15

50.0 0.7

3.5

7.2

17.0

21.5

Dec/14

51.1 0.6

3.4

8.9

17.0

21.1

Companies

Repo + Other

Fixed Income and Deposit Certificates

Interbanking

Individuals

1- Ratings were revised in 02/29/2016.


Foreign Borrowing

Issue Date Volume (US$ million) Currency Term in Years Structure Rating¹

01/20/2012 1,000 USD - Perpetual B-/NR/NR

03/05/2012 750 USD - Perpetual B-/NR/NR

06/19/2012 750 USD 10 Tier II Subordinated B/Ba3/NR

10/10/2012 1,925 USD 10 Senior BB/Ba2/BB+

01/31/2013 2,000 USD - Perpetual B-/NR/NR

07/25/2013 930 EUR 5 Senior BB/Ba2/BB+

12/20/2013 307 CHF 5.5 Senior BB/Ba2/BB+

03/26/2014 417 EUR 5 Senior BB/Ba2/BB+

06/18/2014 2,500 USD - Perpetual B-/B2/NR

International Bonds Issued 2012/2013/2014

Up to 2011

2012

2013

2Q15

3Q15

4Q15

Dec/15

15.3

11.0

19.4

20.7

8.2

9.8

10.2

Sep/15

16.4

12.1

21.2

24.7

9.5

9.9

Jun/15

18.0

13.0

22.5

29.5

10.1

Mar/15

20.0

14.3

24.5

33.9

Dec/14

21.5

15.2

26.3

37.0

2014

5.4

7.2

7.1

6.3

1Q15

(1) BB Classified Loan Portfolio.

%

2015 33.5%


Classified Loan Portfolio¹ - by contracted period


Individuals Loan Portfolio – Average Rates/Tenor

Dec/14 Sep/15 Dec/15

Banco do Brasil

Auto loans

Average Rate - % p.m 1.42 1.58 1.63

Average Term - months 32 30 30

Mortgage

Average contracted amount - R$ thousand 113.4 115.0 114.0

Average Rate - % p.y. 7.34 7.11 7.09


Payroll loans

Average Rate - % p.m 1.76 1.81 1.83


77

137 146 122

75

4Q15 3Q15 2Q15 1Q15 4Q14


Banco Votorantim

Net income

4Q15

11.2

88.8

3Q15

10.3

89.7

2Q15

10.2

89.8

1Q15

10.5

89.5

4Q14

10.4

89.6

D-H Levels AA-C Levels

5.7 5.3 5.2 6.5 5.7

NPL + 90 days

Delinquency and Risk (%)

R$ million

R$ million


Actuarial Assets (Previ Plano 1) – CVM 695/12

4Q14 3Q15 4Q15

(a) Fair Value of the Plan's Assets 135,146 136,105 118,379

(b) Present Value of Actuarial Liabilities (122,885) (130,042) (121,330)

(c) Surplus/(deficit) BB = [(a) + (b)] x 50% 6,130 3,032 (1,476)

(d) Actuarial Assets (Initial Period) 10,083 3,032 3,193

(e) Anticipated Financial Results - Monthly 228 40 40

(f) Contributions of Funds 163 122 163

(g) Amount Recognized in Semi-Annual Adjustment - Shareholders' Equity (4,343) - (4,872)

(i) Actuarial Assets/(Liabilities) (End Period) = (d) + (e) + (f) + (g) 6,130 3,193 (1,476)

R$ million


Actuarial Liabilities (Cassi) – CVM 695/12

4Q14 3Q15 4Q15

(a) Fair Value of the Plan's Assets - - -

(b) Present Value of Actuarial Liabilities (5,830) (6,319) (6,248)

(c) Deficit BB = [(a) + (b)] (5,830) (6,319) (6,248)

(d) Acturial Liabilities (Initial Period) (5,873) (6,319) (6,389)

(e) Amounts recognized in statement of income (195) (212) (212)

(f) BB - Amount paid 157 142 174

(g) Amount Recognized in Half-Yearly Adjust-Shareholders' Eq. 81 - 178

(h) Actuarial liabilities (Period End) = [(d) + (e) + (f) + (g)] (5,830) (6,389) (6,248)

R$ million


Amounts recognized in equity – CVM 695/2012

Dec/14 Previ Plano 1 Cassi Other Plans Total

Valuation Adjustments (4,343) 81 (6) (4,268)

Tax Effects 1,858 (33) 2 1,828

Effects on Shareholders Equity (2,485) 49 (4) (2,440)

Jun/15 Previ Plano 1 Cassi Other Plans Total

Valuation Adjustments (3,641) (334) 92 (3,884)

Tax Effects 1,558 134 (273) 1,419

Effects on Shareholders Equity (2,083) (201) (181) (2,465)

Dec/15 Previ Plano 1 Cassi Other Plans Total

Valuation Adjustments (4,872) 178 91 (4,602)

Tax Effects 2,317 (71) (417) 1,829

Effects on Shareholders Equity (2,555) 107 (325) (2,773)

Corporate Governance

The Only Brazilian Bank listed in Novo Mercado, since 2006 in BM&F Bovespa listing segments for companies that voluntarily adopt the best practices for corporate governance.

• Decisions at any level of the Company are made by Commitees. Such committees, as described below, promote the involvement of BB's executives in the definition of strategies and approval of transactions, bringing quality for the decision making process, in a timely basis.

• Objective: aggregate quality for the decision making process, mitigate risks and share experiences..


Global Risk Committee Asset and Liability Management and

Liquidity Committee

3 Executive Board Level Comittees

15 Executive Comittees with Managing Directors

Credit Transactions Committee Human Resources Committee

3 Comittees with Executive Managers

Information Technology Committee

Internal Controls and Operational Risk

Executive Commitee

Market and Liquidity Risk Executive Committee

Related Companies Governance

Executive Committee

Products and Services Executive Committee

Information Technology Executive Committee

Ethics Executive Committee

Credit Risk Executive Committee

Credit Limit Executive Committee

Credit Transactions Executive Committee

Capital Management Executive Committee

Prevention of Fraud in Financial and Foreign Exchange Transaction

and Information Security Executive Committee

Administrative and Operational Executive

Committee

Human Resources Executive Committee

Disciplinary Review Executive Committee

Investor Relations Executive Committee

Asset and Liability Management and Liquidity

Executive Committee


Means of Payment - Organization Chart

Northeast 31.3%

Midwest 26.3%

North 27.9%

South 24.7%

Southeast 20.3%

(1) Banking Agents and Postal Bank branches.

Quantity of branches

(Market Share)

Total = 23.7% Market Share in Brazil


Global Presence

Brazil Total Service Network Dec/15

Own Service Network 17,614

Branches 5,429

MaisBB Network¹ 14,361

Banco Postal 6,155

Shared Service Network 35,708

Total 67,683

Branches 11

Sub-branches 4

Representative Offices 7

Subsidiaries and affiliates 14

Shared Services Units 2

Banco do Brasil in the World

Presence in 24 Countries

Dez/14 Dez/15

32.7%

44.6%

22.4%

0.3% 0.3%

Others

Specialization, Master’s and Doctorate

College

High School

Dec/15

113.3 4.1

109.2

Sep/15

114.9 5.6

109.4

Jun/15

118.0 5.6

112.3

Mar/15

117.4 5.7

111.6

Dec/14

116.9 5.3

111.6

Interns Employees

58.5%

41.5%

58.4%

41.6%

Male Female

Dez/14 Dez/15

34.5%

43.7%

21.5%


Human Resources

Profile of Staff Members Education’s Level

Changes of BB’s Staff (thousand)

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