Mission

To be the solution in services and fi nancial intermediation, to meet the expectations of customers and shareholders, to strengthen the commitment between employees and the , and to contribute towards the development of the Country.

Leadership Positions

− Total Assets: R$273.8 billion − Account Holders: 23.7 million − Loan Portfolio: R$113.1 billion − Distribution Network in 14,956 points of service − Total Funding: R$191.4 billion − ATM network in Latin America: 41,712 machines − Asset Management: R$171.2 billion, 19.7% market share − Internet: 8.1 million registered customers − Export Exchange: 26.9% market share

Profi le

Today BB is the Brazilian largest bank, being the fi rst to operate in the Country. During its 197 years of existence, the institution has consolidated its position in the fi nancial market and strengthened its commitment to the promotion of nationwide development and good Corporate Governance practices. Along the way, Banco do Brasil has accumulated the knowledge and specialization which sets it apart – especially in its ability to meet the requirements of all segments in Brazil’s fi nancial market.

Banco do Brasil was the fourth bank in the world to issue currency. Its history can be separated into three phases. The fi rst began with its foundation, in 1808, by D. João VI. The second phase, in 1851, marked its relaunch by Barão de Mauá – an occasion on which saw the fi rst share transaction in Banco do Brasil’s shares on the Stock Exchange. The third phase, in 1892, began after the merger with Banco da República dos Estados Unidos do Brasil. The shares culminating from this merger started trading on the Rio de Janeiro Stock Exchange in 1906, being the oldest shares in circulation in the Brazilian equity market.

Currently, the Bank participates in all segments of the fi nancial and capital markets. Investments in technology, the training of its more than 83,700 employees and the strategy of market segmentation, have been fundamental in reaffi rming BB as a fl exible, modern and competitive institution, which aligns its businesses with its commitment to contribute to the development of communities and the Country.

Banco do Brasil has the largest wholly-owned bank branch network in the Country. It has more than 14,800 outlets, distributed over 3,052 municipalities. This increases its business generation potential and helps to determine the success of its various strategies. Among Brazil’s , Banco do Brasil also has the largest branch network outside Brazil, with a presence in 21 countries. During this year in which we celebrated our exchange listing 100th anniversary, we achieved the Bovespa’s Novo Mercado. In this segment, the Bank became the company with the largest market value, with R$ 41.2 billion on June 30, 2006.

The entrance to the “Novo Mercado” represents the commitment of the controlling shareholder and of the entire management of Banco do Brasil to continue to manage the Company in a transparent, effi cient and profi table manner, as it performs a signifi cant role in the economic and social development of the Country. Figures at a Glance

2001 2002 2003 2004 2005 1H05 1H06 Income Statement (R$ million) Gross Income from Financial Intermediation 4,869 8,071 10,006 10,463 10,809 5,455 4,986 Service Revenues 3,76 4,454 5,491 6,607 7,648 3,696 4,349 Personnel Expenses (5,575) (5,548) (6,812) (7,096) (7,473) (3,526) (3,877) Other Administrative Expenses (3,586) (4,097) (4,514) (5,466) (5,670) (2,773) (2,812) Other Operating Income Items 1,902 309 401 99 1,716 391 423 Operating Income 1,370 3,190 4,573 4,607 7,030 3,243 3,069 Non-Operating Income 79 171 149 130 210 119 51 Income Before Taxes 1,449 3,361 4,721 4,738 7,241 3,361 3,120 Income and Social Contribution Taxes (301) (1,188) (2,067) (1,340) (2,554) (1,129) 1,265 Statutory Profi t Sharing (66) (145) (273) (373) (533) (254) (496) Net Income 1,082 2,028 2,381 3,024 4,154 1,979 3,888 Balance Sheet (R$ million) Total Assets 165,120 204,595 230,144 239,014 252,977 233,793 273,836 Shareholders’ Equity 8,747 9,197 12,172 14,106 16,850 15,393 19,178 Loan Portfolio a 49,894 62,900 77,636 88,554 101,789 96,129 113,103 Deposits 73,436 97,253 110,014 115,532 137,658 117,952 139,939 Asset Management 61,438 66,153 102,658 124,021 153,507 144,802 171,154 Shares Dividends / Interest on Own Capital (R$ million) 265 579 746 954 1,498 628 1,555 Book Value per Share (R$) b 11.95 12.56 16.63 17.65 21.08 19.26 23.24 EPS (R$) b 1.52 2.77 3.25 3.78 5.20 2.48 4.71 Profi tability and Productivity (%) Return on Shareholders’ Equity 12.9 22.6 22.3 23.0 26.8 28.6 47.8 Effi ciency Ratio c 71.8 57.9 55.8 54.2 48.1 49.0 45.5 Coverage Ratio d 67.4 80.3 80.6 93.1 102.3 104.8 112.2 Other Indicators (In thousands) Account Holders 13,844 15,391 18,751 21,089 22,907 21,910 23,710 Service Network 11.0 12.3 13.2 14.4 14.8 14.6 15.0 (ATM) 32.3 33.6 37.0 39.0 40.2 39.3 41.7 Credit Cards 3,829 4,731 5,335 6,918 9,281 7,528 9,812 Number of Employees 78.1 78.6 78.0 79.7 83.6 83.0 82.9 a) Includes leasing. b) BB shares were traded per lot of a thousand shares until January 2004. c) Administrative Expenses over Operating Income. d) Revenue from Service Fees over Personnel Expenses. Ratings

Global Ratings Fitch Ratings Classifi cation Individual C/D Short-Term – Local Currency B Long-Term – Local Currency BB+ Short-Term – Foreign Currency B Long-Term – Foreign Currency BB+ Support 4

Standard & Poor’s Classifi cation Long-Term – Local Currency BB Long-Term – Foreign Currency BB Short-Term – Foreign Currency B

Moody’s Classifi cation Financial Strength D Short-Term – Local Currency P-2 Short-Term – Foreign Currency NP Long-Term Debt – Foreign Currency Ba1 Long-Term Deposits – Local Currency A3 Long-Term Deposits – Foreign Currency B1

Domestic Ratings FitchAtlanticRatings Classifi cation Short-Term F1+(bra) Long-Term AA(bra)

Moody’s Classifi cation Short-Term BR-1 Long-Term Aaa.Br Table of Contents

01. Economic Environment 04 02. Industry Outlook 07 03. Organizational Structure 09 04. Group Structure 11 05. Shareholders 12 06. Distribution Network 14 07. Complementary Channels 17 08. Technology Structure 19 09. Human Resources 20 10. Corporate Governance 21 11. Risk Management 22 12. Customers 23 13. Credit 24 14. Retail 26 15. Wholesale 28 16. Agribusiness 29 17. Trade Finance 30 18. Public Sector 30 19. Funding 31 20. Capital markets 32 21. Asset Management 33 22. Securities 34 23. , Pension Plans and Capitalization 35 24. Financial Performance 38 25. Social Responsibility 39 26. Banco do Brasil Figures 40 Distribution Network Abroad 43 Contact List 46 1. Economic Environment Trade Balance (FOB) (US$ million)

In the fi rst half of the year, the international environment featured the continued growth of major economies and of global trade, bringing about levels of liquidity favorable to the capital fl ow. However, the volatility resulting from uncertainty regarding the behavior of the United States monetary policy temporarily affected the exchange rate, the risk premium and the Stock Exchanges of emerging countries.

The expansion of world trade favored Brazilian exports, with amounts accumulated in 12 months that have been successively breaking records, despite the nominal exchange rate appreciation. There was also growth of imports, consistent with the pace of the domestic economic activity resumption, without hampering the generation of commercial balances and surpluses in current transactions. As a result, the international reserves level was seen to rise, with the prepayments of part of the foreign debt.

Consumer infl ation indicators continued to mark convergence to the trajectory of goals, spawning a panorama that favors the continuity of the gradual relaxation of the basic interest rate (Selic), induce of credit volume Exchange Rate * (R$/US$) expansion and of the economy investments level. The acceleration of the GDP growth was anchored to domestic demand, especially to the good performance of investments and consumption.

The maintenance of a declining trajectory of the interest rate and the primary surpluses above the target (4.25% of the GDP), combined with the greater growth of the economy, permitted a slight reduction of the net debt of the public sector in proportion to the GDP. The management of the fi scal policy also remained coherent with the improvement objectives of the public indebtedness profi le.

In general, the process of the economy infl ation control, the public debt profi le improvement and the growth of foreign indebtedness indicators, which corroborated towards the enhancement in the rating of the country by rating agencies, has been providing the Brazilian economy with greater resistance to external crisis. GDP (R$ billion)

4 Banco do Brasil - The Company Banco do Brasil - The Company 5 IPCA (Ample Consumer Price Index) (%) 2. Industry Outlook

The Brazilian Banking Industry ended June 2006 with 162 banks. This concentration refl ects not only an increase in the competitiveness of the Brazilian Banking Industry, but also the need of the banks for larger scales to face lower infl ation levels and interest rates.

Banks in Brazil*

Nominal Interest Rate (Selic) (%)

BB maintained its leadership in several segments of the Brazilian Banking Industry, such as Assets, Funding, Demand Deposits and Quantity of Branches.

Total Assets (US$ billion)

Soverign Risk

6 Banco do Brasil - The Company Banco do Brasil - The Company 7 Funding (R$ billion) 3. Organizational Structure

BB’s management bodies are the Board of Directors, advised by the Audit Committee, and the Executive Board, made up of the Directive Council (president and seven vice-presidents) and by 22 statutory directors. The Bank also has a permanent Board of Auditors.

The Board of Directors has seven members, elected on 4.28.2006 with a mandate of one year, and reelection allowed. The Extraordinary Shareholders Meeting of 5.22.2006 changed the duration of Board of Directors offi ce term, which will be two years as of the next management. Of the seven members, three are indicated by the minority shareholders and the others by the majority shareholder. In the composition of the Board of Directors, a minimum of two directors should be independent directors, as defi ned in the Regulation of the Bovespa’s Novo Mercado.

Demand Deposits (R$ billion) The Board of Auditors is made up of fi ve members, including two indicated by the minority shareholders and the others by the controlling shareholder.

Board of Directors Board of Auditors Bernard Appy Rodrigo Pirajá Wienskoski Chairman – Federal Government President Rossano Maranhão Pinto Vice-Chairman – Federal Government Otávio Ladeira de Medeiros José Carlos Rocha Miranda Member Member – Federal Government Tarcísio José Massote de Godoy Artemio Bertholini Member – Federal Government Member Carlos Augusto Vidotto Member – Minority Shareholders Vicente de Paulo Barros Pegoraro Francisco Augusto da Costa e Silva Member Branches Member – Minority Shareholders João Carlos Ferraz Alon Feuerwerker Member – Minority Shareholders Substitute

8 Banco do Brasil - The Company Banco do Brasil - The Company 9 Organizational Structure of the Commercial Bank Its Main Managers. 4. Group Structure

General Shareholders Meeting As a multiple bank, Banco do Brasil is specialized in market segments. The companies that form BB’s Board of Auditors Conglomerate supplement the Bank’s products and services portfolio and allow it to provide adequate banking Board of Directors and fi nancing solutions to its customers. BB’s investment bank – BB BI – also has strategic partnerships with

Audit Committee affi liated companies.

Internal Audit

Multiple Bank Marketing and Communication Directorship Wholy Owned Subsidiries Executive Internal Controls Directorship Secretary Unit BB Corretora Banco Popular do Cobra BB Leasing de Seguros Brasil BB DTVM BB VIENA BB-99.36% ON BB-100% ON BB-100% ON BB-100% ON Chairman Legal Directorship Security BB-100% ON BB-100% ON Management Unit Strategy and Organization Directorship Management of Distribution and Retail Channels Directorship Regional Sustainable BB Leasing BB Cartões BB Consórcios BB Securities LLC BAMB Development BB-100% ON BB-100% ON BB-100% ON BB-100% ON BB-100% ON Vice-president of 100% total Micro and Small Retail Service and Businesses Directorship Distribution Retail Services Directorship High Income Unit BB Previdência BB BI Ativos S.A. BB Securities BB Turismo BB BI - 49% ON Private Pension Fund Mana- BB-100% ON BAMB - 100% ON BAMB - 99.996% ON Foreign Trade Directorship BAMB - 51% ON gement Vice-president of International Businesses Commercial Directorship and Wholesale International Directorship Affi liated Companies

Logistics Directorship Brasilcap Brasilprev Aliança do Brasil Brasilseg Visa Vale Visanet BB-BI Classe A 35% BB-BI 49.99% ON BB-BI 49.99% ON BB-BI 40% ON BB-BI 40% ON BB-BI 35% ON Vice-president of Classe B 28,76% Technology and total 31.99% Technological Technology Directorship Logistics Infrastructure Solutions Unit Clearings Brasilsaúde SBCE Brasil Veículos Government Affairs BB-BI 49.92% ON BB-BI 12.088% ON Brasilseg 100% ON CIP 9.8% BMF Foreign Exchange Vice-president of Rural and Directorship Software BMF Asset CBLC 1.59% BMF Derivates Executive Board Executive

Directive Council Directive Agro-Industrial Businesses Management Unit Rural and Agro-industrial and Government Affairs Businesses Directorship

Restructuring of Operational Assets Directorship

Vice-president of Credit Directorship Credit Controlling and Accounting Unit Controlling Directorshipe Risk Management Risk Management Directorship

Vice-president of Finance Directorship Investor Finance, Capital Markers, Relations Capital Markets and and Investor Relations Investments Directorship

Employee Relations and Vice-president of Human Social-Environmental Responsibility Directorship Resources and Social- Environmental Responsibility Human Resources Directorship

10 Banco do Brasil - The Company Banco do Brasil - The Company 11 5. Shareholders Performance Ratios 2001 2002 2003 2004 2005 1H05 1H06 ROE (%) 12.9 22.6 22.3 23.0 26.8 28.6 47.8 In June of this year, the Bank, BNDESPar and Previ offered 45,441,459 shares by means of the secondary EPS (R$)* 1.52 2.77 3.25 3.78 5.20 2.48 4.71 public distribution. This offering was conducted in a non-organized over-the-counter market in Brazil, pursuant Book Value per Share (R$)* 12.29 12.40 16.63 17.65 21.08 19.26 23.24 to the procedures provided in CVM Instruction 400. As a result, the total volume acquired in the offering was Price/Book Value 1.01 0.73 1.44 1.84 2.00 1.64 2.15 52,257,678 shares, with R$ 2,273 million. * BB shares were traded per lot of a thousand shares until January 2004.

Besides the Offering, Banco do Brasil also fi nalized the process of subscription of the “B” Warrants. Of 15.9 The Bovespa Index raised 169.8%, from December 2001 to June 2006, while BB’s shares, (ticker symbol million, just over 14.6 million were exercised (91.9% of the total). As a result of the Subscription, the BB’s BBAS3), increased 513.8% in the same period. quantity of shares will be 825,313,502 after the performance of the Extraordinary Shareholders Meeting, in BBAS3 X Ibovespa August 2006, and after the ratifi cation of capital by the Brazilian Central Bank.

The table below evidences the ownership structure before and after the Public Offering of Shares and the Warrants Subscription. It can be observed that the quantity of free-fl oat went from 6.9% in December 2005 to 14.8% in June 2006.

Shareholders Before - % After - % National Treasury 72.1 70.9 Previ 13.9 11.4 BNDESPar 5.7 2.9 Treasury Stocks 1.4 0.0 Foreign Capital 3.3 6.7 Others 3.6 8.2 Warrants Total Shareholders 100.0 100.0 Free Float 6.9 14.8 In 1996, on the occasion of BB’s capital increase, three series of warrants were issued: A, B, and C, maturing in 2001, 2006, and 2011, respectively. The exercise price for these warrants was established at R$ 8.50, with Total Free Float Distribution (%) readjustment by the IGP-DI “pro rata temporis”.

The period for exercising the “B” Warrants ended in 6.30.2006. The exercising gave the right to take up 1.043933 ON share, a number resulting from the application of the same rules for conversion of preference shares into ordinary shares, authorized in the minutes of the Extraordinary Shareholders Meeting of 6.7.2002.

The remaining warrants “C” present the following characteristics:

Series Code Exercise Date Quantity Exercise Price* R$ Warrants C BBAS 13 03.31 to 06.30.2011 27,028,746 21.76

* Updated up to June 2006 by the Price Index (IGPDI)

12 Banco do Brasil - The Company Banco do Brasil - The Company 13 In a simulation, based on the premises that before 2011 there will be no additional capital increase and that the Points of Service total amount of warrants “C” will be exercised on maturity, the expected dilution of BB’s capital is 3.4%.

Conversion: 1 Warrant = 1.043933 shares Total of the Capital = 810,617,415

Warrants Qty of Warrants Qty of Shares Dilution of the Capital - % Series C 27,028,746 28,216,200 3.4 ¹ Others include the following Points of Service:

PAA – Advanced Service Post: these are points of service intended for towns without a bank. They have a small staff and automated teller machines;

PAB – Banking Service Post: this type of unit is located inside the premises of companies or government offi ces. This service 6. Distribution Network requires one employee and automated teller machines;

PAE – Electronic Service Post: the structure of services is exclusively automatic; In June 2006, Banco do Brasil’s own service network in Brazil comprised 14,956 points, 2.5% growth in relation SAA – Self-Service Room: exclusively electronic installed in the main areas of the branches and to the same period of 2005. Segmented in accordance with the markets defi ned by the Bank - Retail, Wholesale PAP – Payment and collection post: located mainly in government offi ces (town halls) for carrying out receipts and payments. and Government -, this network was distributed over 3,104 municipalities, covering the entire national territory. Employees and automated teller machines provide the service.

In the segmentation of the Retail market, which involves 22.2 million individual customers and 1.4 million SMEs, Abroad, BB’s work is aimed at raising funds and at promoting and making viable business with Brazil, by the points of service totaled 3,823 branches. supporting Brazilian companies in carrying out their foreign trade transactions and in conquering new markets.

Distribution Network The Bank ended the period with the most diversifi ed service network abroad of all Brazilian banks. Present in 23 countries, this network is responsible for business all over the world, with its 17 branches, 8 sub- branches, 8 business units and representative offi ces and fi ve subsidiaries.

Furthermore, BB closed the period with a network of correspondent banks made up of 1,441 fi nancial institutions in 149 countries. This network of correspondent banks complements the performance of the bank-owned external network.

14 Banco do Brasil - The Company Banco do Brasil - The Company 15 Distribution Network Abroad 7. Complementary Channels

Branches Sub-Branches Business Units Subsidiaries To increase the customer’s convenience and security in accessing his/her account, Banco do Brasil offers Amsterdam Cascais Banco do Brasil AG various complementary channels: ATM, Internet, POS, call center and mobile banking, besides a network of Assunción Gifu Banco do Brasil Securities LLC Gunma* BB Leasing Company Ltd, banking correspondents. The transactions carried out using these channels added up to R$ 3.7 billion, which Ciudad del Este Hamamatsu* BB Securities Ltd, means 89% of the total of the transactions carried out by BB customers. Frankfurt Ibaraki BAMB Brasilian American Merchant Bank Grand Cayman Nagano Roma Transactions in Automated Channels (%) Nagoia* Shangai Santa Cruz de La Sierra Washington Seul** Dubai** Milan New York BB has the largest own ATM network in Latin America with 41,712 machines. This network accounted for 2.1 billion transactions, which represents 47.3% of the total of the transactions carried out by means of the complementary channels. * Sub-Branche being transformed in Branch, ** Unit in process of instalation The sharing of the external networks of ATMs and of lottery houses between Banco do Brasil and Caixa For more information on BB’s Distribution Network Abroad, refer to the last pages of this report. Econômica Federal (Federal Savings and Loans Bank) is present in 21 states and in the Federal District, spanning 2,087 municipalities. This initiative promotes greater convenience for the customers of the Banks through 7,844 shared points of service, where over 6.3 million transactions were carried out and over R$ 272 million turned over in the fi rst half 2006.

Automated Teller Machines

16 Banco do Brasil - The Company Banco do Brasil - The Company 17 Breakdown of Transactions (%) 8. Technology Structure

Banco do Brasil’s technology processing capacity increased, since 2001, 623%, reaching 76,276 million information per second (MIPS). At the end of the period, the storage capacity totaled 399 Terabytes.

Processing Capacity in MIPS*

Banco do Brasil continues to be the leader on the Internet. At the end of June 2006, the number of customers enabled to carried out transactions through the bb.com.br portal reached 8.1 million. Individual customers carried out over 308.8 million transactions by means of Internet, 19.3% more than in previous period.

Internet Registered Customers (in millions)

Storage Capacity in Terabytes

18 Banco do Brasil - The Company Banco do Brasil - The Company 19 9. Human Resources Age Bracket (%)

In BB’s relationship with its employees, the fi rst half has observed a signifi cant advance in various aspects. Banco do Brasil’s commitment to the workforce as demonstrated by means of various benefi ts and actions.

At the end of the fi rst half, Banco do Brasil had 82,879 employees, 64.3% were male and 35.7% female. Recognizing the importance of the individual education for its insertion in the society and capacitating its employees, BB instituted individual goals of training per employee, which impacts directly the score that defi nes the profi t sharing of the Bank. At the end of the fi rst half, the goal was fulfi lled by 93.1% of the employees.

Workforce 10. Corporate Governance

On May 31, 2006, the Bank signed the contract for participation in the Novo Mercado, the most stringent listing segment of Bovespa, fortifying its commitment with best practices of corporate governance. To attain this goal, among other actions, the Bank reckoned with a more solid and diversifi ed investor base, due to the success of the secondary offering of shares, which ended on 08/02/2006, and was the largest variable income security offering operation of the last four years in the country.

Level of Education (%) As a result, various projects have been developed within the Bank, concentrating on analysis of the following points: shareholder composition structure; rights of shareholders and relationships with stakeholders; transparency and auditing; administrative structure and effectiveness.

At any level of the Bank, the decisions are taken collectively. With the purpose of involving all the executives in the defi nition of strategies and approval of proposals for BB’s different businesses, the Management uses committees, subcommittees and commissions at a strategic level, which guarantee agility, quality and security for the decision taking.

The Bank’s system for supervision and audit is made up of the Board of Auditors, by the independent auditors, Tenure (%) by Internal Audit and by the Audit Committee. BB is also subject to the supervision of the Brazilian Central Bank, the Federal Audit Court and the Federal Internal Control Secretariat.

Internal Audit carries out independent and objective evaluations of the organizational processes, with a focus on the risks liable to jeopardize the objectives of the institution. Following these evaluations, information is generated to advise the Bank’s senior management and to contribute towards the improvement of the effectiveness of the conglomerate’s processes for risk management, control and corporate governance.

20 Banco do Brasil - The Company Banco do Brasil - The Company 21 A statutory body constituted in compliance with CMN Resolution 3198 of 5.27.2004, the Audit Committee also Global Risk Pyramid has prerogatives of supervision and control, advising the Board of Directors in the exercise of its duties. It is formed by three members not belonging to the Company staff, with terms of offi ce of three alternate years, elected by the Board of Directors . At least one of the incumbent members is chosen among the people appointed by the board members elected by the minority shareholders .

Regarding the relationship with its shareholders and with the market, BB carried out seven meetings with capital markets analysts in the period - six in the regional Capital Markets Analysts and Investment Professionals Association - APIMES and another one in Brazilian Association of Capital Markets Analysts - ABAMEC. Another 20 meetings were held with investors and analysts from the capital market; two road-shows (USA and Europe) and one event in Mexico.

11. Risk Management BB has been preparing itself to use advanced in-house models for the allocation of capital as a function of the risks, as provided for in the New Basel Accord and in Bacen Communication 12746, of 12.09.2004. With the integration of the structure for managing the conglomerate’s market, liquidity, operational and credit risks, the Risk Management Directorate became responsible for the global management of risks. This integration 12. Customers is bringing about, amongst other aspects, greater precision in the measurement of risks and a better allocation of capital, observing the New Basel Accord, by generating an increase in the synergy of processes and of the Banco do Brasil has maintained its leadership in the Brazilian Banking Industry in customer base and ended degree of specialization. the 1st half with 23.7 million customers - 22.2 million individuals (increase of 750 thousand YTD account holders) and 1.5 million businesses. Furthermore, the Bank attends over 8.5 million non-account holders - 6 Global Risk Committee - GRC million savings customers and 2.5 million Social Security benefi ciaries.

Account Holders - Individuals (in thousands)

Assets and Liabilities Credit Risk Committee Committee Credit Risk Committee

Analyswes and porposes Analyswes and porposes measures Analyswes and porposes measures measures about: about: about:

• assets and liabilities • credit risk management • operational business enviroment management and models • credit risk level exposure legal and image risks • liquidity and market risk level • credit risk models and management exposure contingency plans • operational level exposure • liquidity and market risk • operational models and management and models contingency plans • appropriate liquidity levels and contingency plans

Account Holders - Businesses (in thousands)

The Global Risk Committee (CGR) is responsible for the integrated management of the Bank’s risk, defi ning exposure limits, contingency plans and risk measurement models. Liquidity and market risks in Banco do Brasil is oriented by scenario analysis, considering stress situations.

22 Banco do Brasil - The Company Banco do Brasil - The Company 23 13. Credit Retail Loan Portfolio (R$ billion)

BB has maintained its leadership in lending in Brazil, with a 16.3% market share, an increase of 80 basis points in relation to the previous position. The credit evolution in the Brazilian Banking Industry was 21.7% (Jun/05 – Jun/06), representing 32.4% of GDP. The Bank raised 17.7% in the same period.

Agribusiness transactions were 23.4% higher than in June 2005, due to the release of funds for the 2005/2006 crop. Besides that, there was a contribution to the increase in loans from the roll-over debt arising from the problems brought by the drought in the Center-South, the loss of income due to the fall in commodity prices in the international market, and the appreciation of the Real against the Dollar.

Commercial Loan Portfolio (R$ billion) BB’s Loan Portfolio Composition (%)

The transactions rated at risk levels AA, A, B and C accounted for 88.4% of BB’s portfolio, compared to 91.5% Agribusiness Loan Portfolio (R$ billion) in June of the previous year. In the Brazilian banking industry, this level was 89.5%.

Loan Portfolio by Level of Risk R$ million June/05 June/06 *BI % Balance Allowance Comp. % Balance Allowance Comp. % AA 17,357 - 18.1 17,104 - 15.1 24.4 A 28,410 142 29.6 30,796 154 27.2 37.4 B 30,901 309 32.1 34,499 345 30.5 17.4 C 11,241 337 11.7 17,624 529 15.6 10.4 Foreign Trade Loan Portfolio (R$ billion) D 3,414 341 3.6 5,286 529 4.7 3.4 E 857 257 0.9 1,481 444 1.3 1.5 F 549 274 0.6 785 393 0.7 1.0 G 412 288 0.4 894 626 0.8 1.0 H 2,987 2,987 3.1 4,643 4,643 4.1 3.5 Total 96,129 4,937 100.0 113,112 7,662 100.0 100.0 AA-C 87,910 788 91.5 100,022 1,028 88.4 89.5 D-H 8,219 4,148 8.5 13,090 6,634 11.1 10.5

* Banking Industry - Preliminary data for december 2005

24 Banco do Brasil - The Company Banco do Brasil - The Company 25 14. Retail In the fi rst half of 2006, BB obtained a turnover of R$ 18.1 billion with cards. This fi gure, represents a 25.1% expansion in relation to the previous half year, and in terms of billing, with 19.4% market share.

The Retail Pillar is responsible for serving individuals and micro and small-sized companies, which have an annual turnover up to R$10 million. In June 2006, the retail Loan operations reached R$ 34,855 million which Also to be highlighted is the 23.9% growth in the quantity of credit cards issued. The base went up from 7.8 represented an increase of 16% in relation to the same period of the previous year. million in June 2005 to 9.9 million at the end of June 2006.

Credit Cards (in millions) Individuals

BB acted on six relationship levels with its individual customers in 2005: Banco Popular do Brasil, Preferencial A and B, Exclusive, Banco do Brasil Estilo and Banco do Brasil Private.

Retail Segmentation

Relationship Level (NR)

Banco Popular do Brasil

Banco Popular do Brasil has deepened its work on banking inclusion for the lower income segment of Brazilian society. Only in 1H06, Banco Popular opened 157 thousand simplifi ed checking accounts.

Banco Popular attained the total volume of R$ 81.3 million of credit conceded in the fi rst half of 2006, having extended over 603 thousand loans in the half and ended the period with a portfolio balance of R$ 82.9 million.

The presence of Banco Popular points of service paved the way for the performance of around 12.1 million bill receiving transactions and plans, operating over R$ 1.4 billion through the fi rst half. Likewise, the Banco Popular

Direct Consumer Credit - CDC, the main product intended for individual customers, reached 10.3 million chain was an important channel for the payment of Social Security benefi ciaries. contracts, with special mention of the BB Payroll Loans line, which reached 2.4 million contracts at the end of the 1st half - growth of 128.4% in relation to the same period of 2005. BB Consórcio - Consortiums

CDC (Direct Consumer Credit) (R$ billion) In the fi rst half of 2006, BB Consórcios attained a share of 6.3% in the market of active participants, with over 217 thousand active quotas, exceeding R$ 1.6 billion in assets traded. Of the total quotas, 47 thousand are from the automobile segment, 138 thousand from electronics and the others from the motorcycle and tractor/truck segments.

In approximately two years of operation, BB Consórcios already fi gures among the leaders in the Brazilian Central Bank ranking in all the segments in which it operates and has already considered over 100 thousand purchasing pool members in the period.

BB Consórcios obtained net income of R$ 10.8 million in the fi rst half of 2006, 419% higher than the fi rst half of 2005.

26 Banco do Brasil - The Company Banco do Brasil - The Company 27 Small and Micro Enterprises (SME) 16. Agribusiness

The credit volume approved and available for use by SMEs was R$ 22.6 billion at the end of the 1st half - an As the largest fi nancier of Brazilian agribusiness, Banco do Brasil reaches all the segments, from the small amount 16.7% YTD. The balance reached R$ 16.6 billion, growth of 15.3% in relation to June 2005. Among the farmer to the major industrial enterprises. The growth of BB’s Agribusiness loan portfolio was 11.8% in the working capital lines earmarked for SMEs, also to be highlighted BB Giro Rápido. The volume available in this fi rst half, closing the period with a balance of R$ 39.9 billion. The table below shows the evolution of the funds credit line reached R$ 10.3 billion, an increase of 16.6% in relation to June 2005, and BB Giro Rápido balance granted to the agribusiness sector. surpassed R$ 4.3 billion EOP. The BB Capital de Giro Mix Pasep line (Working Capital), which exhibited growth of R$ 385 million in the 1st half, attaining the balance of R$ 420 million in June 2006. Cost, Marketing and Investment Cards (R$ million)

BB Giro Rápido (R$ billion)

15. Wholesale

Family Farming Program In the Wholesale market, BB is structured to serve the medium and large enterprises and the Corporate segment. The loan for this segment reached R$ 29.8 billion. In relation to June 2005, the growth was 14.2%. Family farming, which includes small and medium-sized producers, represent the majority of farmers in Brazil. The loans balance booked abroad totaled to R$ 6.6 billion. The balance of the transactions in working capital These farmers are more focused on producing primary goods for the domestic market. The Federal Government lines, including transactions based on receivables, reached R$ 11.2 billion, and the balance of the lines for created specifi c programs to support family farming, such as the Family Farming National Program (Pronaf), fi nancing investments totaled to R$ 5.5 billion. The Bank closed the period with 84 points of service – 68 aimed at making credit available to this segment. Business Branches and 16 Corporate Branches –, serving all the regions of the country.

Pronaf Distribution Network - Wholesale

28 Banco do Brasil - The Company Banco do Brasil - The Company 29 17. Trade Finance development. In addition, it has developed solutions that seek to satisfy specifi c needs in the public sector and all its network, helping not only the daily routine of the public administrator, but also his or her workers, suppliers

In the fi rst half of 2006, Brazil showed consecutive record in trade balance and ended with US$118.3 billion in and other citizens. exports carried out. In the same period, BB also surpassed its historical marks and kept itself in the leadership as fi nancier and supporter of foreign trade. An example of the strength of this relationship is BB’s leading position in the collection of taxes, achieved by the development of systems that facilitate payment on the part of contributors. During the half, authorized

The main products of the foreign trade loan portfolio are Advances on Exchange Contracts – ACC and Advances public offi cials, which number approximately 20.6 thousand, brought in around R$ 17.3 million by means of the on Export Contracts – ACE, which reached a contracted volume of US$5.7 billion in fi rst half of 2006. Federal Government Payment Card. With the corporate cards of states and municipalities, in the same period R$ 14.2 million was turned by about 9.6 thousand authorized public servants.

ACC/ACE (US$ billion) Contracted Volume In addition, in acting as an agent of public policy Banco do Brasil has its profi tability ensured through the prior allocation of the funds and proper remuneration. In Government programs, the Brazilian Treasury pays the Bank, in the form of equalization, the difference between the rate charged to the taker of the credit and the costs of the funds, administration and tax costs and capital remuneration, in accordance with article 5 of the company’s Bylaws.

19. Funding

The credibility of Banco do Brasil allied with its broadly distributed network allowed BB to maintain its leadership in funding, ending June 2006 with a balance of R$191.4 billion, growth of 24.2 in relation to the period of 2005.

In the Foreign Exchange Market, BB contracted US$18.7 billion in Export Exchange transactions. This Funding (R$ million) 2001 2002 2003 2004 2005 June/05 June/06 performance kept BB’s leadership position in this market, with a 26.9% share. Demand Deposits 18,831 18,319 20,498 28,991 35,802 27,923 31,363 Foreign Exchange (US$ billion) Savings Deposits 21,242 22,639 26,578 31,069 32,844 31,607 33,215 Time Deposits 29,142 33,588 49,558 49,665 63,495 52,520 69,377 Interbank Deposits 4,220 3,876 7,275 5,768 5,383 5,837 5,855 Investment Deposits - - - 38 134 66 129 Money Market Borrowing 43,753 37,508 46,478 44,527 30,508 36,168 51,496 Total 117,188 115,930 150,387 160,059 168,166 154,121 191,435

Funding Composition (%)

18. Public Sector

In the relationship with the Federal, State and Municipal Governments, Banco do Brasil appears as one of the main partners in the implementation of policies, programs and projects focusing on regional and national

30 Banco do Brasil - The Company Banco do Brasil - The Company 31 20. Capital Markets Foreign Borrowing Return Volume Premium Issue Term in Cupom Interest Issue for the in US$ over Rating Program Date years (%) Interval price Investor In the domestic capital market, Banco do Brasil, through BB Banco de Investimentos S.A., has the strategy million Treasury (%) of offering complete solutions to Brazilian companies, integrating their commercial performance with capital 06.09.97 200 10 9.375 Half-yearly 99.2190 9.500 287 Ba3 GMTN market products and services, based on its knowledge of the needs of these clients. 08.10.01 300 5 7.875 Quarterly 99.6850 7.990 375 BBB Dekasseguis 12.27.01 450 7 7.890 Quarterly 100.0000 7.890 325 BBB/Baa1 MT 100 In the fi rst half of 2006, BB Investimentos successfully coordinated the largest public offering of shares in the 07.03.02 300 7 L3M+0.60 Quarterly 100.0000 5.013 266 AAA/Aaa MT 100 last four years of the Brazilian capital market. A total of 45.4 million ordinary shares belonging to BB, BNDES and 09.11.02 40 7 7.890 Quarterly 100.0000 7.890 489 BBB/Baa1 MT 100 PREVI were sold. These were priced at R$ 43.50 and came to around R$ 2.3 billion. Of this total, R$ 523.1 million 03.17.03 120 7 7.260 Quarterly 100.0000 7.260 450 BBB/Baa1 MT 100 were sold by Banco do Brasil in the retail market, by means of its branch netword and the Internet Channel. 07.10.03 178 8 5.911 Quarterly 100.0000 5.955 350 BBB+/Baa1 Visanet 07.10.03 45 8 4.777 Quarterly 95.0000 5.955 350 BBB+/Baa1 Visanet In the fi xed income segment, BB maintained its prominent position, by coordinating six major security issuings 12.19.03 250 10 6.550 Quarterly 100.0000 6.550 292 BBB/Baa1 MT 100 in the 1st half, totaling R$ 6.6 billion: Siderúrgica Nacional - CSN, Fábrica de Produtos Alimentícios Vigor, BV 09.20.04 300 10 8.500 Half-yearly 99.1740 8.625 447 Baa1 Subor. Debt Leasing, CPFL Piratininga, Petrofl ex and Telemar Norte Leste, the issue of which set an all-time record for non- 12.17.04 73 3 zero-cupom - 62.0385 17.250 180 - GMTN Perpetual fi nancial companies in the country. 01.23.06 500 Perpetual 7.950 Quarterly 100.0000 7.950 Ba1 Securities

In equity, BB Investimentos also operated with the public offerings of shares of the companies and TAM and continues to coordinate the offering of Additional Construction Potential Certifi cates - Cepac - to the 21. Asset Management City Council of São Paulo, having held the 4th auction in May.

At the end of June 2006, assets managed by BB’s wholly owned subsidiary BB Administração de Ativos Another prominent aspect is the strong growth of securitization instruments, such as Credit Receivables Funds, – Distribuidora de Títulos e Valores Mobiliários (BB DTVM) totaled R$171.2 billion, growth of 18.2% in relation known by the acronym FIDC. During the fi rst half BB coordinated two FIDC transactions - and Grupo to June 2005. This amount represented a market share of 19.7% and also allowed BB DTVM to continue as the Brasil - which were completely successful, consolidating its position as a major competitor in this segment too. largest asset manager in Latin America. BB DTVM has maintained its leadership position since 1995.

During the fi rst half the shares of several companies in which mangement and custody are performed by Banco do Brasil, attained around three million investors. BB closed the half in 4th place for the total of assets Asset Management (R$ billion) in custody, with a volume of R$ 203 billion; amongst its customers are pension funds, insurance companies, asset managers and corporate customers.

In January 2006, Banco do Brasil issued perpetual bonuses to obtain funds in the international capital market. The transaction was announced in the amount of US$ 300 million. Nevertheless, given the strong demand observed for the instrument - around US$ 4.2 billion in orders - the Bank decided to raise the amount of the borrowing to US$ 500 million. The remuneration of the instruments, of 7.95% per year, is the lowest cost among all Brazilian issues with the use of perpetual bonuses until today.

In June 2006, BB obtained authorization from the Central Bank for the sum of the issue to be incorporated to its capital base. BB Securities acted as Joint-Lead Manager in the distribution of the instruments.

32 Banco do Brasil - The Company Banco do Brasil - The Company 33 Investment Funds (R$ billion) Securities Portfolio by Maturity (%)

23. Insurance, Pension Plans, and Capitalization 1

Managed Portfolios (R$ billion) Through its participating interests in associated insurance, pension plan and capitalization companies, and with the intermediation of BB Corretora de Seguros e Administradora de Bens S.A., Banco do Brasil has maintained its strategy of developing and expanding the consumption of products and services from these segments with its customers.

Insurance

The automobile insurance portfolio of Brasilveículos Cia. de Seguros reached R$ 419.8 million in retained premiums, showing growth of 16.9% in relation to the same period of the 2005. The fl eet insured grew 5% and surpassed 630 thousand vehicles, keeping Brasilveículos in 7th place in the ranking of the Superintendence of Private Insurance - Susep.

22. Securities BB Seguro Auto Econômico, aimed at protecting Brazilian passenger cars manufactured between 10 and 20 years ago, recorded over 11 thousand insured vehicles insured, at the end of the period. BB’s securities portfolio totaled R$70.7 billion in June 2006, an increase of 2.5% in relation to the previous period. Automobile Insurance

Securities Portfolio

Balance (R$ million) 2002 2003 2004 2005 June/05 June/06 Available for trading 3,585 16,095 13,163 3,077 6,087 5,568 Available for sale 41,303 28,307 32,790 37,832 35,265 39,781 Held to maturity 25,763 24,821 26,951 25,275 26,266 24,865 Derivatives 292 368 581 287 1,355 463 Total 70,943 69,590 73,485 66,470 68,973 70,677

1 Annuity Plans

34 Banco do Brasil - The Company Banco do Brasil - The Company 35 Cia. de Seguros Aliança do Brasil has a diversifi ed portfolio of products, made up of 20 types of insurance Capitalization (Annuity Plans) from the life and basic lines, and offers solutions that meet the needs of individuals and businesses. Leader in the capitalization market for the 9th year running in contributions, and for the 3rd year customers The life insurance portfolio achieved R$ 598.3 million in retained premiums - growth of 18.9% in relation to June reserve, Brasilcap ended the fi rst half with a turnover of R$ 864 million, surpassing by 3.6% the amount 2005. With over 2.6 million lives insured, it took 3rd place in Susep’s ranking. In rural insurance, Aliança do observed in the same period of 2005. This performance resulted in 25.9% market share. Brasil is the largest insurer in the country, with a 45.8% market share.

Life Insurance At the end of May, BB and Brasilcap launched Ourocap Empresa, a premium bond designed for SMEs, which offers exclusive advantages, with no similar product in the market, such as payments fl exibility, prizes in double and prize drawings up to R$ 2.8 million. The bank has already sold 8.8 bonds, totaling R$ 2.1 million.

Capitalization

Pension Fund

Brasilprev is a supplementary pension plan company of Banco do Brasil, in association with the Principal Financial Group and Sebrae. Founded in 1993, it actually started marketing its products in 1995. These include the traditional, PGBL and VGBL plans, and the company is currently ranked third in the pension plan market.

The number of active participants plans grew 4.1% in the fi rst half, surpassing the mark of 1.6 million participants. Sales from January to June 2006 corresponded to R$ 1.1 billion, an increase of 7.1% in relation to the previous year. The total of the investment portfolio reached R$ 10.7 billion, surpassing by 24.1% the amount shown in the same period of 2005.

Open-ended Pension Fund

36 Banco do Brasil - The Company Banco do Brasil - The Company 37 24. Financial Performance 25. Social Responsibility

Banco do Brasil showed net income of R$ 3.9 billion in the fi rst half of 2006 and a return on equity of 47.8%, In its strategic positioning, Banco do Brasil integrates the aspects of sustainability - economic, social and which corresponds to R$ 4.71 earnings per share. R$ 1.6 billion set aside for dividends and interest on own environmental - in such a way to guarantee the long-term creation of value. capital, which will permit remuneration of R$ 1.91 per share. The Bank’s engagement with the principles of social and environment responsibility has been part of its Net Income (R$ million) history. From this perspective, the Bank’s relationship with its stakeholders - staff, collaborators, suppliers, partners, customers, creditors, shareholders, competitors, community, government and environment - is a constant topic in BB’s strategic and operational decisions.

Listed below are a few of the public commitments that BB has made in relation to sustainability:

Corporate Agenda 21 – this is a worldwide commitment on behalf of social justice, environmental stability, and economic effi ciency and is a constant challenge that Banco do Brasil has decided to shoulder. The BB 2006-2007 Agenda 21 is structured on three levels. Development of products and services from a social/ environmental standpoint is the most relevant aspect from among the so-called “business focused on Dividends/Interest on Shareholders Equity (R$ million) sustainable development” level.

On the “RSA Administrative and business practices” level, the “Ecological Effi ciency Program” is the most outstanding project, which entails a review of the current processes to reduce consumption and waste of inputs (paper, water, power, toner, etc.) and to appropriately dispose of solid and liquid waste and airborne emissions as well as toxic waste generated at BB, including recycling programs.

United Nations Global Pact – the purpose of this initiative is to mobilize the international business community to promote fundamental values in the human rights, labor and environmental areas.

Ecuador Principles – this set of policies and guidelines is to be followed when reviewing fi nance projects Shareholders Equity (R$ million) investment plans equal to or greater than US$ 50 million. The safeguards include environmental assessments as well as evaluations concerning natural habitat protection, pest control, river barrier/dam security, indigenous population, involuntary relocation of populations, cultural landmarks, child, forced and slave labor, international waters and workplace health and safety projects. Banco do Brasil was the fi rst government bank on a world scale to joint those fi nancial institutions that agreed to comply with the Ecuador Principles.

Agreement to Combat Slave Labor – In May 2005, the Banco do Brasil, signed the Slave Labor Combat Agreement proposed by the Instituto Ethos. In fulfi llment of this agreement, the signatories have agreed to step up efforts toward increasing dignity in the workplace and modernizing labor relations in the productive chain, on the part of complying sectors with “MTE Ordinance 540/2004 Employee Registration,” which have maintained workers in conditions similar to the state of slavery.

38 Banco do Brasil - The Company Banco do Brasil - The Company 39 Green Protocol – this is a letter of principles in support of sustainable development signed by government R$ million Balance Sheet Items 2001 2002 2003 2004 2005 June/05 June/06 banks in 1995, whereby they have proposed to implement policies and practices which are in alignment with Assets 165,120 204,595 230,144 239,014 252,977 233,793 273.836 the purpose of promoting development which does not jeopardize the needs of future generations. Available funds 5,667 11,582 10,789 15,494 5,828 3,464 5.068 Short-term interbank investments 12,614 17,764 33,407 16,453 28,996 17,379 29.758 The most important policies included are aimed at the prohibition of transactions to fi nance operations that Marketable securities 62,464 70,943 69,59 73,485 66,470 68,973 70.677 could have an environmental impact, those that have no formal authorization from the appropriate agency Securities available for trading - 3,585 16,095 13,163 3,077 6,087 5.568 Securities available for sale - 41,303 28,307 32,790 37,832 35,265 39.781 and the requirement to fi le documentation from the appropriate environmental agency to fi nance enterprises Securities held to maturity - 25,763 24,821 26,951 25,275 26,266 24.865 that have a high social-environmental impact or which involve the sale of naturally occurring plants or fi sh, Financial derivatives - 292 368 581 287 1,355 463 investment operations in activities that require a Prior Environmental Impact Study (EIA) and Environmental Interbank accounts 8,610 18,178 18,666 22,106 24,404 22,166 26.28 Impact Report (RIMA), investment operations in activities which rely on water resources, including agricultural Intrabank accounts 34 270 34 147 121 487 22 irrigation and water rights, etc. Loans and leasing 40,225 51,407 65,591 74,823 85,942 80,725 94.893 Public sector 3,978 5,617 4,364 4,161 3,730 3,717 3.193 26. Banco do Brasil Figures Private sector 38,432 48,993 65,207 75,773 88,551 82,598 99.688

RS million (Allowance for loan losses) (2,185) (3,202) (3,980) (5,110) (6,339) (5,590) (7.988) Income Statement 2001 2002 2003 2004 2005 1H05 1H06 Leasing 72 62 13 20 20 9 14 Other receivables 30,786 29,784 27,309 31,198 35,108 35,399 40.862 Financial Intermediation Income 19,417 36,727 33,625 30,572 33,065 15,982 18,426 Tax Credit 12,206 11,847 9,406 8,396 6,687 7,523 9.223 Loans 10,625 13,828 16,167 17,086 19,200 9,252 10,434 Other assets 273 254 233 228 509 175 688 Leasing 109 106 83 89 131 60 78 Permanent assets 4,374 4,350 4,513 5,059 5,580 5,016 5.646 Securities 5,558 13,94 15,801 11,306 12,419 6,015 6,804 Liabilities and Shareholders’ Equity 165,120 204,595 230,144 239,014 252,977 233,793 273.836 Financial Derivatives - (1,664) (547) (318) (385) (69) (320) Deposits 73,436 97,253 110,014 115,532 137,658 117,952 139.939 Foreign Exchange Portfolio 2,021 8,282 439 1,095 11 (85) 610 Demand deposits 18,831 24,342 27,140 28,991 35,802 27,923 31.363 Compulsory Investments 1,103 2,234 1,682 1,313 1,689 809 819 Savings deposits 21,242 26,918 27,425 31,069 32,844 31,607 33.215 Financial Intermediation Expenses (14,548) (28,655) (23,618) (20,364) (22,255) (10,527) (13,440) Interbank deposits 4,220 3,876 7,275 5,768 5,383 66 129 Time deposits 29,142 42,117 48,173 49,665 63,495 5,837 5.855 Money Market Funds (9,547) (13,617) (17,497) (12,978) (15,246) (7,335) (8,349) Investment deposits - - - 38 134 52,520 69.377 Borrowing, Assignments and Onlending (3,462) (12,030) (2,856) (2,865) (1,602) (709) (1.035) Money market borrowing 43,753 48,327 40,063 44,527 30,508 36,168 51.496 Allowance for Loan Losses (1,539) (3,009) (3,265) (4,521) (5,407) (2,483) (4.056,1) Funds from acceptances and securities 1,161 1,053 1,637 776 3,166 569 2.603 Gross Income from Financial Intermediation 4,869 8,071 10,006 10,208 10,809 5,455 4.986 Interbank accounts 28 74 17 6 980 1,902 2.037 Other Operating Income (Expenses) (3,499) (4,881) (5,433) (5,601) (3,779) (2,212) (1.917) Intrabank accounts 880 1,366 1,834 1,725 1,973 1,404 1.388 Service Revenues 3,76 4,454 5,491 6,607 7,648 3,696 4.349 Borrowing 9,033 13,432 9,982 16,565 4,858 5,076 3.930 Personnel Expenses (5,575) (5,548) (6,812) (7,096) (7,473) (3,526) (3.877) Foreign borrowing 9,033 13,432 9,982 16,565 4,858 5,076 3.930 Other Administrative Expenses (3,586) (4,097) (4,514) (5,466) (5,670) (2,773) (2.812) Domestic onlending – offi cial institutions 4,663 5,921 7,458 10,611 13,370 11,823 12.431 Foreign onlending 2 2 2 2 - 1 0 Taxes (686) (820) (1,128) (1,469) (1,721) (835) (891) Financial derivatives - 743 533 523 571 1,473 1.156 Equity Int, in the Results of Subs, and Affi l, 1,601 2,304 (642) 46 (67) (328) 12 Other accounts payable 23,328 27,123 46,306 34,508 42,918 41,915 39.548 Other Operating Revenues 4,307 1,679 6,553 5,824 7,623 4,737 3.188 FCO (Subordinated Debt) 3,315 4,180 4,991 6,833 7,840 7,301 8.409 Other Operating Expenses (3,320) (2,854) (4,382) (4,048) (4,120) (3,183) (1.887) Unearned income 90 102 126 134 125 118 128 Operating Income 1,37 3,19 4,573 4,607 7,030 3,323 3.069 Shareholders’ equity 8,747 9,197 12,172 14,106 16,850 15,393 19.178 Non-operating Income 79 171 149 130 210 119 51 Income Before Taxes 1,449 3,361 4,721 4,738 7,241 3,361 3.120 Income and Social Contribution Taxes (301) (1,188) (2,067) (1,340) (2,554) (1,129) 1,265 Statutory Profi t Sharing (66) (145) (273) (373) (533) (254) (496) Net Income 1,082 2,028 2,381 3,024 4,154 1,979 3.888

40 Banco do Brasil - The Company Banco do Brasil - The Company 41 China – Ratios Distribution Network Abroad 2001 2002 2003 2004 2005 June/05 June/06 (Income Statement with Reallocations) Business Unit Address: Unit 1305. 13th Floor. Shanghai Kerry Centre Profi tability Branches. Sub-Branches and Business Units 1515 Nanjing Road West Net Income per share (R$)* 1.5 2.8 3.3 3.8 5.2 2.5 4.7 Shanghai 200040 - P.R. of China Angola - Luanda ROE 12.9 22.6 22.3 23.0 26.8 28.6 47.8 Phone: 86 + 21 + 62890707 / 62894503 Business Unit ROA 0.7 1.1 1.1 1.3 1.7 1.7 3.0 Address: Rua Engrácia Fragoso. 61 France - Paris Gross Financial Margin / Assets (-) Permanent (%) 7.0 7.5 7.4 6.9 7.0 7.2 6.8 Edifício Kalunga Atrium Branch Gross Financial Margin / Profi table Assets (%) 8.9 9.4 9.1 8.5 8.6 9.1 8.2 1º ANDAR – C Address: 4. Avenue de La Grande Armeé Phone: 244 + 91 + 340351 75017 – Paris - France Productivity Phone: 33 + 1 + 40535500 Argentina - Buenos Aires e-mail: [email protected] Cost / Income Ratio (%) 71.2 57.9 55.8 54.2 48.1 49.0 45.5 Branch Service Fees / Personnel Expenses (%) 67.4 80.3 80.6 91.3 102.3 104.8 112.2 Address: Calle Sarmiento. 487 esquina San Martin Germany - Frankfurt Service Fees / Administrative Expenses (%) 40.6 45.6 48.6 53.1 58.0 59.0 64.3 C1041AAI - Federal Capital - Argentina Branch Phone: 54 + 11 + 40002727 Personnel Expenses per Collaborator (R$) 61,939 62,927 73,329 69,897 72,616 37,843 38,785 Address: Eschersheimer Landstrasse 55 e-mail: [email protected] Employees + Interns per Branches + PAA + PAB 17 17 17 17 17 18 17 60322 - AM – Frankfurt - Germany Phone: 49 + 69 + 299090 Bolivia - La Paz e-mail: [email protected] Loan Portfolio Quality Branch Allowance / Loan Portfolio (%) 5.3 5.9 5.4 6.1 6.6 6.1 7.4 Address: Avenida 16 de julio. 1642 . Prado Hong Kong - China Central - La Paz - Bolivia Allowance / Ratings E + F + G + H (%) 93.5 107.4 118.4 88.2 96.7 154.8 107.8 Business Unit Phone: 591 + 2 + 2310909 Address: Unit 3601. 36/F.. Tower 2. Lippo Centre. e-mail: [email protected] Capital Structure 89 Queensway. Admiralty Hong Kong – (SAR) China Leverage (x ) 18.9 22.2 18.9 16.9 15.0 15.2 14.3 Bolivia – Santa Cruz de la Sierra Phone: 852 + 25216411 Business Unit BIS Ratio (%) 12.7 12.2 13.7 15.2 17.1 15.9 17.3 e-mail: [email protected] Address: Avenida San Martin nr. 1700 Edifício Centro Empresarial Equipetrol Piso 4 Italy - Milan Capital Market Santa Cruz de La Sierra - Bolivia Branch Price / Earnings (12 months) 8.2 3.3 7.4 8.6 8.1 7.1 6.8 Phone: 591 + 3 + 3453171 Address: Piazza Castello. 1 . 3º Piano Price / Book Value 1.01 0.73 1.44 1.84 2.00 1.64 2.15 e-mail: [email protected] CAP: 20121 - Centro Market Capitalization (R$ million) 8,103 6,696 17,568 25,979 33,733 25,300 41,249 20123 - Milan - MI - Italy Cayman Islands - Grand Cayman Book Value per share (R$)* 12.29 12.56 16.63 17.65 21.08 19.26 23.24 Phone: 39 + 02 + 8825201 Branch e-mail: [email protected] * BB shares were traded per lot of a thousand shares until January 2004. Address: Elizabethan Square. Phase III Building-4th fl oor. Sheden Road George Town -Grand Cayman Islands Italy - Cayman Islands Capital Adequancy BIS Ratio (%) Business Unit Phone: 1 + 345 + 9495907 Address: Via Barberini. 29 . 4° Piano e-mail: [email protected] 00187 - RM - Italy Phone: 39 + 06 + 4880707 Chile - Santiago e-mail: [email protected] Branch Address: Avenida Apoquindo. 3001. Piso 1 Las Condes - 6760342 – Santiago -Chile Phone: 56 + 2 + 3363001 e-mail: [email protected]

42 Banco do Brasil - The Company Banco do Brasil - The Company 43 Japan - Gifu Mexico - Mexico City Portugal - Cascais USA - Washington Sub-Branch Business Unit Sub-Branch Business Unit Address: Asahi Plaza Minokamo Station Core Offi ce 101. Address: Calle Campos Elíseos. 345. piso 6o.. Address: Passeio Carlos Andrade Teixeira. 7 e 8 Address: 1801. K Street - N.W.- Suite 710 Minokamo-shi. Ota-cho 2591-1 Gifu-Ken - Japan Colônia Chapultepec Polanco Edifício Baía Center 20006 - Washington - DC - USA Phone: 81 + 574 + 245568 11560 - Ciudad del Mexico - Mexico 2765-409 – Cascais - Portugal Phone: 1 + 202 + 8570320 e-mail: [email protected] Phone: 52 + 55 + 52817245 Phone: 351 + 21 + 4822405 e-mail: [email protected] e-mail: [email protected] Fax: 351 + 21 + 4822685 Japan - Gunma e-mail: [email protected] Venezuela - Caracas Sub-Branch Netherlands - Amsterdam Business Unit Address: Bandou BLDG . 1319-1. IIda-cho Branch Portugal - Lisbon Address: Av. Francisco de Miranda . Centro Lido - Piso 09. Ota-shi - Gunma-ken - Japan Address: Stadhouderskade 2 . 2o. fl oor Branch Ofi cina 93A - Torre A. El Rosal Phone: 81 + 276 + 466511 Downtown 1054 ES - Netherlands Address: Praça Marquês de Pombal. 16 1067-A - Caracas - Venezuela e-mail: [email protected] Phone: 31 + 20 + 5241111 1269-134 - Portugal Phone: 58 + 212 + 9522674 e-mail: [email protected] Phone: 351 + 21 + 3585000 e-mail: [email protected] Japan - Hamamatsu e-mail: [email protected] Sub-Branch Panama - Panama City 430-7701 Shizuoka-ken. Hamamatsu-shi. Itaya-machi 111-2 Branch Spain - Madrid Hamamatsu Act Tower 1F Address: Calle Elvira Mendez. Edifício Interseco Nr. 10. Branch Phone: 81 + 53 + 4526511 Planta Baja Address: Calle José Ortega y Gasset. 29 - 1ª Planta. e-mail: [email protected] Campo Alegre - Zona 7 - Panama Edifi cio Beatriz - Madrid Phone: 507 + 2636566 28006 - Spain Subsidiaries Japan - Ibaraki e-mail: [email protected] Phone: 34 + 91 + 4232500 Sub-Branch e-mail: [email protected] BAMB - Brazilian American Merchant Bank Address: 303-0022 Shirai BLDG 2909-1. Mitsukaido-shi. Paraguay - Asunción Address: C/O - International Division Fuchigashira-Machi Branch United Kingdom - London Gerin/DIOPB - SBS Qd.1 Bl.C Lote 32 Ed.Sede III - 13° andar Ibaraki-Ken - Japan Address: Calle Oliva Y Nuestra Senora de La Asunción – Casila Branch 70073-901 - DF - Brasilia - Brazil Phone: 81 + 297 + 306511 del Correo 667 - Centro Address: 34 King Street. London Phone: 1 + 61 + 33104504 e-mail: [email protected] Asunción - Paraguay EC2V 8ES - United Kingdom e-mail: [email protected] Phone: 595 + 21 + 490121 Phone: 44 + 20 + 76067101 Japan - Nagano e-mail: [email protected] e-mail: [email protected] BB - A.G. Viena Sub-Branch Address: Franz Josefs-Kai. 47 - 3. OG Address: Atago Mansion 101 . Ueda-shi. Chuo Higashi 1-5 Paraguay - Ciudad del Este USA – Miami 1010 – Viena - Austria Nagano-Ken - Japan Branch Branch Phone: 43 + 1 + 51266630 Phone: 81 + 268 + 286512 Address: Calle Nanawa. 107. Address: 2 S. Biscayne Boulevard . One Biscayne Tower Suite e-mail: [email protected] e-mail: [email protected] Esquina Monsenhor Rodrigues - Centro 3870 Ciudad del Este - Alto Paraná - Paraguay Downtown – Miami BB-Leasing Company Ltd. Phone: 595 + 61 + 500319 33131 - FL - USA Japan - Nagoia Address: C/O - International Division Sub-Branch e-mail: [email protected] Phone: 1 + 305 + 3583586 Gerin/DIOPB - SBS Qd.1 Bl.C Lote 32 Ed.Sede III - 12° andar Address: 460-0002 Aichi-Ken. Nagoya-Shi. Naka-Ku. e-mail: [email protected] 70073-901 - DF - Brasilia - Brazil Marunouchi 1-17-19. Kirix Marunouchi BLDG. - Japan Peru - Lima Phone: 1 + 61 + 33104504 Phone: 81 + 52 + 2024611 Business Unit USA - New York e-mail: [email protected] e-mail: [email protected] Address: Av. Camino Real 348 - Piso 9 . Torre El Pilar Branch San Isidro Address: 600 Fifth Avenue. Third Floor . Rockfeller Center BB-Securities 27 – Lima - Peru New York - 10020 - NY - USA Japan - Tokyo Address: 7th Floor. 16 St. Martins Le Grand London Branch Phone: 51 + 1 + 2124230 Phone: 1 + 212 + 6267000 EC1A 4NA - United Kingdom Address: New Kokusai Building 3-4-1 . Marunouchi e-mail: [email protected] e-mail: [email protected] Phone: 44 + 207 + 3675800 Chiyoda ku - 100-0005 - Japan - Tokyo Fax: 44 + 207 + 7960859 Phone: 81 + 3 + 32136511 e-mail: [email protected] e-mail: [email protected]

44 Banco do Brasil - The Company Banco do Brasil - The Company 45 Contact List

Banco do Brasil SBS – Ed.Sede III – 13º andar International Division 70073-901 – Brasília (DF) – Brazil www.bb.com.br

Presidency Phone: 55 (61) 3310.3400 Fax.: 55 (61) 3310.2563

Finance, Capital Markets and Investor Relations VP Phone: 55 (61) 3310.3406 Fax.: 55 (61) 3310.2561

International and Wholesale Business VP Phone: 55 (61) 3310.3406 Fax.: 55 (61) 3310.2561

International Division Phone: 55 (61) 3310.4500 Fax: 55 (61) 3310.2444

International Division - Financial Institutions Department Phone: 55 (11) 3066.9081 Fax: 55 (11) 3066.9089

Investor Relations Division Address: SBS – Ed. Sede III – 5th fl oor 70073-901 – Brasília (DF) – Brazil Phone: 55 (61) 3310.3980 Fax: 55 (61) 3310.3735 e-mail: [email protected]

46 Banco do Brasil - The Company