APIMECBANCO DO BRASIL 2017
BERNARDO ROTHE / CFO
SOCIAL-ENVIRONMENTAL AND FINANCIAL PERFORMANCE PANEL
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.
Disclaimer
Index
More than 200 years of history 4
Sustainability Approach 5
Fundação Banco do Brasil 6
Culture Support 7
Sponsored Sports 8
Ownership Structure 9
Share Performance 10
Market Indicators 11
Adjusted Net Income 12
Loan Portfolio 13
Loans to Individuals 14
Loans to Companies 15
Disbursements to Plano Safra 16
Disbursements 17
Quality of the loan portfolio 18
ALL Balance and Coverage Ratio 19
Delinquency control 20
Net Interest Income and Spread 21
Risk-adjusted pricing 22
Fee Income 23
Administrative expenses 24
Cost to Income Ratio 25
Common Equity Tier I 26
Guidance 2017 27
Founded in 1808
1st company listed on the stock exchange in Brazil
Diversified and stable funding
International Franchise
Diversified Businesses
More than 200 years of history
4
Sustainability Approach
5
Economic Dimension
Social Dimension
Environment Dimension
Socially Responsible
Businesses and Private Social
Investment
CSER* Governance and
socio-environmental
risk management
Environmentally responsible
businesses and conscious use
of natural resources
Most prominent global agreements
UN defined 17 sustainable development objectives
and 169 goals
Change in consumer behavior
Increasing demand for non-financial information
Stock Exchanges are demanding for more disclosure of non-
financial, risk and performance information
Growing and stricter regulation
Need to better manage risks
Market Regulators Demands Sustainability Plan – Agenda 30 BB
* Corporate Social and Environmental Responsibility
80% of the investors consider non-financial performance supervision
by senior management as "essential" or "important”1
(1) EY, Tomorrow’s Investment Rules 2.0, 2015
R$ 2.6 billion disbursed since 2007 in actions to generate jobs and income, community
development and the environment, along with education projects.
3.8 million participants
2,048 municipalities served
6,543 projects
Fundação Banco do Brasil
Education
Vetores de Atuação
Agroindustry
Water
Agroecology
Solid Waste
6
Culture Support
(1) According to The Art Newspaper article – 1st Triunfo da Cor; 2nd ComCiência and 3rd Castelo Ra-Tim-Bum.
4 Cultural Centers in the country
More than 7 million de visitors from Jan/2016 to Jun/2017
The 3 most seen exhibitions in the World in 2016¹
Rio de Janeiro Brasília São Paulo Belo Horizonte
7
Beach Volleyball
25 years partnership
13 Olympic medals
25 years partnership
9 Olympic medals
Indoor Volleyball
4 years partnership
1 world championship
Handball Running
1st edition
8 stages
24 thousand registered
Sponsored Sports
8
Social Inclusion Projects: Beach volley schools, Vivavôlei
and social activities with sports ambassadors
Social Inclusion ProjectsMinihand
R$ 2.3 billion distributed through Dividends and Interest on
Own Capital in the 9M17.
Dividend yield of 2.68% in the 3Q17 .
Free Float:
45.6%
9
Sep/17
Federal Government:
National Treasury 52.2%
Sovereign Fund 2.2%22.63
54.36
23.00
Local CapitalForeign CapitalFederal Government
(1) Does not consider the shares owned by the Company
Ownership Structure¹ and Value Generation
jan.0
2
jan.0
3
jan.0
4
jan.0
5
jan.0
6
jan.0
7
jan.0
8
jan.0
9
jan.1
0
jan.1
1
jan.1
2
jan.1
3
jan.1
4
jan.1
5
jan.1
6
jan.1
7
BBAS3 Ibovespa
BBAS3 – Closing price adjusted by proceeds between Jan 02, 2002 and Dec 05, 2017. Source: Economática.
Share Performance
10
2,280.5%
423.0%
Change BBAS3
Last 12 months 20.3%
In 2017 13.8%
5 Years 96.9%
10 Years 102.5%
15 Years 2,427.3%
Market IndicatorsEarnings per Share
Price/Book ValuePrice/Earnings 12 months
3Q17
0.971.01
2Q17
0.950.94
1Q17
0.900.86
4Q16
0.630.34
3Q16
0.840.80
9.74
3Q16
6.63
2018E¹
7.09
2017E¹
8.24
3Q17
10.96
2Q17
9.02
1Q17
11.59
4Q16
Adjusted Earnings per Share - R$Earnings per Share - R$
2018E¹
0.89
2017E¹
0.98
3Q17
1.04
2Q17
0.82
1Q17
1.05
4Q16
0.90
3Q16
0.74
3.95
2016
2.572.84
2015
4.125.05
2018E¹
4.454.58
2017E¹
3.83
11(1) Bloomberg estimative in December 04, 2017 based on analysts’ projections average. Banco do Brasil is not responsible for this information.
3.1
5.4
2.3
9M16
2.7
7.9
+45.1%
9M17
5.2
Adjusted Net Income 1HAdjusted Net Income 3Q
ROE¹
9.1% 12.3%
9M16 9M17
(1) ROE Market: reflects the metrics that leading market analysts use in their estimates.
Adjusted Net Income
12
2.751.89
Adjusted Earnings per Share - R$
R$ billion
Loan Portfolio - Expanded View¹R$ billion
1) It includes private securities and guarantees provided.
677.0
Sep/17
267.7
187.5
180.7
41.2
Jun/17
696.1
277.2
185.9
188.2
44.9
Mar/17
688.7
280.8
185.1
180.1
42.7
Dec/16
708.1
294.7
187.8
179.8
45.7
Sep/16
735.4
316.8
187.6
179.6
51.5
CompaniesIndividualsAgribusinessForeign Branches and Subsidiaries
-7.9-7.6
-11.4-11.3
-6.9
Perfomance in 12 months (%)
13
43.1
24.4
7.0
25.5
6.1
26.7
27.7
39.5
%%
Share Share
14
5.1
40.4
174.7
Sep/17
19.9
+1.2%
43.7
65.6
6.8
41.2
62.8
43.0
64.2
41.4
20.3
174.0
41.5
5.4
172.6
Sep/16
19.8
Jun/17
Mortgage Auto LoanPayroll Loan OtherSalary Loan
(1) It considers the organic Loan Portfolio.
76.9%Less risky
lines
Loans to Individuals¹R$ billion
15
-3.4%-15.5%
Sep/17
267.7
215.9
51.7
Jun/17
277.2
219.8
57.4
Sep/16
316.8
241.9
74.9
Middle Market, Corporates and Government
Very Small and Small Companies²
(1) It includes private securities and guarantees provided. (2) Companies with annual revenues up to R$ 25 million.
-9.9%
-1.8%
Chg. (%)
on Jun/17
Loans to Companies¹
Very Small and Small
Companies Disbursements
Increase in the participation of
receivables lines from 55.8% in 9M16
to 62.6% in 9M17
Capital Markets
Revenues of R$ 548 million in
9M17, growth of 13% compared to
the same period of the previous year
R$ billion
(1) It includes Rural Product Bills and guarantees provided. (2) Source: Brazilian Central Bank – Sep/2017.
60.1 % Market Share²158.2
30.0
Sep/16
179.6
149.1
30.5
-4.0%+0.6%
Sep/17
180.7
156.5
24.2
Jun/17
188.2
RuralAgroindustrial
16
+5.0%
-20.7%
Chg. (%) on Sep/16
-19.2%
-1.1%
Chg. (%) on Jun/17
Disbursements in the 3rd Quarter
Plano Safra
Crop 17/18Crop 16/17
+24.1%
19.3
64.9%
15.5%
19.6%
15.6
54.3%
18.8%
26.9%
Medium Size Producers - Pronamp
Small Producers - Pronaf
Companies
Agribusiness loan potfolio¹
Disbursements to Plano Safra reached R$ 19.3 billion
R$ billion
(1) Does not include revolving lines of credit and overdraft.
Disbursements – quarterly average¹ (1Q16 base 100)
17
136168
12312091
117100
4Q16 1Q17 2Q17 3Q173Q162Q161Q16
+49%
Brazil
195217
184
139
97106100
1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17
+100%
Individuals
123157
12111199107100
1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17
+25%
Companies
126
171
86
140
91
157
100
3Q171Q16 2Q16 3Q16 4Q16 1Q17 2Q17
39%
Agribusiness
Delinquency Ratio (+90 days)¹
18
3.70 3.70
3.90
3.70
3.60
Banking Industry
3.94
Jun/17 Sep/17
4.11
3.29
Sep/16
3.50
Mar/17
3.89
Dec/16
BB
3.49
6.70
1.61
Sep/17Jun/17
2.67
5.26
2.56
Sep/16
0.96
6.83
0.99
5.83
3.09
Dec/16
1.39
Mar/17
1.28
7.35
3.34
Delinquency Ratio¹ by Segment (+90 days)¹
AgribusinessCompaniesIndividuals
(1) BB Classified Loan Portfolio.
%
Quality of the loan portfolio
186.1186.5174.4178.4175.7
ALL Balance and Coverage Ratio
3Q17
6.3
2Q17
6.7
1Q17
6.7
4Q16
7.5
3Q16
6.6
Allowance for Loan Losses
Sep/17
37.82.1
35.7
Jun/17
37.91.9
36.0
Mar/17
36.41.7
34.7
Dec/16
36.11.5
34.5
Sep/16
37.5
Supplementary ProvisionMinimum ProvisionRequired Provision
167.7
146.5 143.3152.3
159.4
BI +90 days¹
R$ billion
(1) Banking Industry: Ratio created through Average Risk Index available at SGS (Time Series Management System) of the Brazilian Central Bank
Coverage
Ratio (%)
R$ billion
19
Index
20
4.68
3Q174Q16
6.846.977.12
3Q16
9.755.59 6.22
3Q15
7.39
4Q15
9.73
1Q16 2Q16 1Q17 2Q17
1.070.811.49
0.87 1.03 1.041.38
0.731.03
New NPL / Loan Portfolio (%)²New NPL (R$ billion)¹
(1) Quarterly change in the balance of over 90 days past due transactions + current quarter write-off.
(2) It considers the Classified Loan Portfolio of the previous quarter.
(3) Flow of the Renegotiated loan portfolio contracts of over 90 days past due transactions.
3Q173Q16 2Q17
4.184.33
1Q17
4.204.43 4.58
4Q16
Cost of credit³ (%)
Total NPL Formation
Delinquency control
4.63
2Q16 3Q164Q15
3.61
3Q15
4.15 4.71
1Q16
5.02 4.55
4Q16
4.11
1Q17
6.41
3Q172Q17
2.22
New NPL (R$ billion)¹
1.58 1.731.75 1.691.26 1.432.57
1.720.95
New NPL / Loan Portfolio (%)²
NPL Formation – Companies portfolio
21
Net Interest Margin (NIM) Risk Adjusted NIM
4.565.00
1Q17
2.54
4.70
2.54
4Q16
2.542.54
4.77
3Q17
2.69
2Q17
4.83
3Q16
Net Interest Margin¹ (%)
(1) Net interest income / average balance of earnings assets, annualized.
(1) It includes senior bonds, subordinated debt, and Hybrid Instruments in Brazil and abroad.
(2) It includes the result from interest, tax hedging, derivatives, and other financial instruments that offset the effects of the exchange rate variation on result.
(3) Series revised (Funding Expense for Institutional Funding to Treasury).
Chg. (%) on
3Q16 2Q17 9M16
Net Interest Income 15,099 14,606 14,247 (5.6) (2.5) 44,008 43,330 (1.5)
Net Interest Income W/O Recovery 14,131 13,212 13,153 (6.9) (0.4) 40,796 39,886 (2.2)
Loan Operations 26,117 21,786 21,412 (18.0) (1.7) 76,506 66,809 (12.7)
Funding Expenses (11,366) (8,404) (7,814) (31.3) (7.0) (33,330) (25,972) (22.1)
Financial Expense for Institutional Funding¹ ³ (3,524) (3,040) (3,197) (9.3) 5.2 (10,358) (9,603) (7.3)
Treasury² ³ 2,904 2,870 2,753 (5.2) (4.1) 7,978 8,652 8.5
Recovery of Write-offs 968 1,394 1,094 13.0 (21.6) 3,212 3,444 7.2
9M16 9M173Q16 2Q17 3Q17Chg. (%) on
Net Interest Income and Spread
(R$ milhões)
3Q17
4.67
5.07
7.42
16.32
2Q17
4.72
5.01
7.34
16.12
1Q17
4.83
6.05
7.67
16.11
4Q16
5.00
6.34
7.98
16.60
3Q16
4.97
6.10
7.86
16.48
AgribusinessLoan Operations Companies¹Individuals
(1) Government loans not included.
Loans Spread (%)
Risk-adjusted pricing
22
23
11.5
6.0
12.6
17.5
6.6
9M16
19.2
+9.9%
9M17
Fee Income 1HFee Income 3Q
5.1
9M179M16
+11.3%
4.6
9M16
3.24.1
9M17
+26.6%
Checking Account FeesHighlights
Asset Management Fees
Fee Income increased by 9.9%R$ billion
Rigid control of administrative expenses
-2.7%
9M17
23.6
15.6
7.9
9M16
24.2
15.8
8.4
R$ billion
Administrative Expenses 1H
Administrative Expenses 3Q
Sep/16 Sep/17
Points of Service
Employees
Branches
109,159 99,305
5,430 4,871
1,736 2,062
Exclusivo Office
216 249
Estilo Office - 9
Customer Service Points 326 762
Estilo Branch
11 63
MPE¹ Office 11 39
Chg. (%)
-9.0
-10.3
18.8
15.3
-
133.7
472.7
254.5
5,192 4,511Traditional Branches -13.1
238 360Digital Service 51,3
24(1) Very Small and Small Companies.
With continuous improvement in Cost to Income Ratio¹
(1) Cost to Income Ratio: Administrative Expenses / Operating Revenues. Data from the Income Statement with Reallocations.
3Q17
38.5
2Q17
38.9
1Q17
39.3
4Q16
39.7
3Q16
39.7
25
17.5918.48 18.15 18.01
19.15
12.18 12.79 12.41 12.4213.29
9.07 9.59 9.20 9.18 10.04
Sep/16 Dec/16 Mar/17 Jun/17 Sep/17
Tier II Tier I Common Equity Tier I
%
9.5% of Common Equity Tier I in 2019
26
Organic income generation
Guidance 2017
Guidance
2017
9M17
Performance
Adjusted Net Income - R$ billion 9.5 to 12.5 7.9
NII (Net of Recovery of Write-offs) - % -4 to 0 -2.2
Organic Domestic Loan Portfolio - Expanded View - % -4 to -1 -6.9
Individuals - % 2 to 5 1.1
Companies - % -11 to -8 -16.0
Rural Loans - % 6 to 9 5.0
ALL Expenses net of Recovery of Write-offs - R$ billion -23.5 to -20.5 -16.2
Fee Income - % 6 to 9 9.9
Administrative Expenses - % -2.5 to 0.5 -2.7
27
[email protected] +55 (11) 4298-8000
Av. Paulista, 1230
18th. floor – Bela Vista
São Paulo/SP - Brasil - CEP 01310-100
www.bb.com.br/ir