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Banco do Brasil 2Q07 Results

Banco do Brasil 2Q07 Results. Recurring Net Income grows. 47.8. 29.0. 36.3. 29.4. 18.4. 29.4. 26.7. 19.8. 24.3. 3,889. 20.9. 18.0. 14.2. 2,923. 1,546. 1,464. 1,409. 1,248. 2,477. 907. 1,068. 1,586. 832. 647. Δ Recurring Net Income - 126.2%.

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Banco do Brasil 2Q07 Results

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  1. Banco do Brasil 2Q07 Results

  2. Recurring Net Income grows... 47.8 29.0 36.3 29.4 18.4 29.4 26.7 19.8 24.3 3,889 20.9 18.0 14.2 2,923 1,546 1,464 1,409 1,248 2,477 907 1,068 1,586 832 647 Δ Recurring Net Income - 126.2% Δ Recurring Net Income - 84.4% 2Q06 3Q06 4Q06 1Q07 2Q07 1H06 1H07 ROE (Annualized) - % Net Income – R$ million Recurring ROE (Annualized) - % Recurring Net Income – R$ million ...and ROE goes into a positive trend.

  3. Net Interest Income and less provisions... R$ million Net Income 1Q07 1,409 Higher Interest Income 355 Less Credit Risk Expenses 195 Other Administrative Expenses Growth 119 Provisions for Legal Risk Strengthening 152 Higher Taxes Expenses 195 Other Effects 29 ( ) Recurring Net Income 2Q07 1,464 ( ) Early Retirement Plan and Previ Effects 396 Net Income 2Q07 1,068 ...compensated higher expenses, taxes and legal risk.

  4. 1.3 0.9 6.2 6.8 0.8 0.5 0.4 0.6 0.3 9.6 9.4 3.0 3.3 3.2 3.4 3.3 12.2 4.9 4.8 4.8 4.7 4.6 10.4 6.1 6.1 5.8 5.4 5.3 Net Interest Income grows... R$ billion 10.1 8.7 5.2 4.8 4.8 4.4 4.3 1H06 1H07 2Q06 3Q06 4Q06 1Q07 2Q07 Net Interest Income Loan Revenues Interest Expense Security Revenues Other Interest Revenues ... on the back of loan revenues.

  5. 15.7 14.6 13.6 12.9 12.3 8.4 8.1 7.9 7.9 7.9 NIM kept stable... 2Q06 3Q06 4Q06 1Q07 2Q07 Annualized NIM by Loan Portfolio - % Average Selic Annualized - % NIM Annualized¹ - % 33.0 31.8 31.4 28.8 28.9 8.9 8.5 8.0 7.3 7.0 6.4 7.0 6.6 5.7 5.2 2Q06 3Q06 4Q06 1Q07 2Q07 (1) Net Interest Income over Earning Assets Individuals Businesses Agribusinesses ... despite the Selic easing cycle.

  6. 128.1 127.2 124.8 117.8 112.6 62.7 62.1 62.0 61.5 58.1 46.4 36.1 29.9 27.7 23.8 22.9 21.9 19.0 18.2 12.7 2Q06 3Q06 4Q06 1Q07 2Q07 Domestic Long Net Exposure - R$ billion Floating Rate Fixed Rate Growth in the long fixed rate exposure... Related to Selic - % Investment Interest Rate Funding Interest Rate ...helps to protect the NIM.

  7. 145.2 140.4 133.2 12.2 12.3 118.3 12.2 113.1 27.9 26.1 10.4 24.0 9.9 23.2 21.6 48.8 46.8 45.1 40.3 39.9 56.3 55.2 51.9 44.4 41.7 2Q06 3Q06 4Q06 1Q07 2Q07 Strong growth in the Loan Portfolio... R$ billion Δ % over 2Q06 1Q07 28.4 3.5 23.5 (0.8) 29.0 6.8 22.2 4.3 35.3 2.1 Businesses Individuals Agribusinesses Abroad ...explains the Net Interest Income performance.

  8. 27.9 26.1 24.0 23.2 21.6 9.9 9.6 9.5 10.1 9.9 10.2 9.3 8.3 7.4 6.0 2.6 2.7 2.2 2.3 2.6 3.4 3.2 3.1 2.8 2.7 0.4 0.6 0.9 1.3 1.7 Focus on Individuals Portfolio... R$ billion Δ % over 2Q06 1Q07 29.0 6.8 (0.3) 2.8 68.4 8.9 8.2 (0.5) 28.9 7.9 320.4 33.7 2Q06 3Q06 4Q06 1Q07 2Q07 Cars Loan Overdraft Account Credit Card Payroll Loan Others ... highlighting cars and payroll loans.

  9. 222.7 221.9 213.9 214.0 211.1 179.6 175.1 173.1 170.1 166.2 Stable Credit Risk... Average Risk - % 6.9 6.8 6.2 6.2 6.0 6.8 6.7 BB Banking Industry 5.4 5.4 5.4 Required Provision / Past Due Loan + 90 days - % BB Banking Industry 2Q06 3Q06 4Q06 1Q07 2Q07 ... better than the industry...

  10. 1,757 1,431 1,385 1,257 1,236 2Q06 3Q06 4Q06 1Q07 2Q07 ...allows provisions to recede... 5.5 5.6 5.0 4.8 4.1 7.4 7.4 6.5 6.5 6.5 5.2 5.0 Provision Expenses - R$ million 4.2 4.1 4.1 Provision Expenses / Loan Portfolio¹ - % 3.8 3.6 2.9 2.8 2.8 2Q06 3Q06 4Q06 1Q07 2Q07 Provision / Loan Portfolio - % Past Over Due Loans + 15 days / Loan Portfolio - % (1) Average Portfolio and Expenses of the past 12 months Past Over Due Loans + 60 days / Loan Portfolio - % ...with delinquency under control.

  11. Provisions... R$ million 9,441 9,133 8,414 8,757 8,635 548 1,655 1,582 752 1,397 8,209 7,786 7,662 7,551 7,238 Jun/06 Sep/06 Dec/06 Mar/07 Jun/07 Total Provision Required Provision Additional Provision ... denoting conservative approach.

  12. Funding still growing.... R$ billion Δ % over 2Q06 1Q07 17.6 2.4 164.5 160.7 158.8 (9.0) 3.3 5.4 5.3 144.9 5.2 139.9 5.7 6.0 17.4 0.7 81.4 76.9 80.9 72.3 69.4 36.8 40.1 35.6 17.5 3.5 32.4 31.4 22.9 4.9 40.8 38.9 36.7 34.4 33.2 Jun/06 Sep/06 Dec/06 Mar/07 Jun/07 Saving Deposits Demand Deposits Time Deposits Others ... highlighting saving and demand deposits.

  13. 2,437 2,377 2,252 2,287 2,246 285 316 349 322 320 772 742 713 722 715 1,381 1,217 1,216 1,319 1,211 2Q06 3Q06 4Q06 1Q07 2Q07 Fees from products and customers... R$ million Δ % over 2Q06 1Q07 8.5 2.5 (10.9) (9.8) 8.0 4.0 14.0 4.6 Products Customers Others ... still growing.

  14. 24.9 24.6 24.4 24.1 23.7 1.6 1.6 1.6 1.5 1.5 23.3 23.0 22.8 22.6 22.2 2Q06 3Q06 4Q06 1Q07 2Q07 Assets under Management surpass R$ 200 billion... 19.1 19.1 19.7 19.7 19.1 208.9 193.1 182.7 180.6 171.2 Δ= 8.2% Δ= 22.0% Customers - million 2Q06 3Q06 4Q06 1Q07 2Q07 Market Share - % Assets under Management - R$ billion Individuals Companies ...and the customer basis reach 25 million.

  15. 316 315 300 250 245 2Q06 3Q06 4Q06 2Q07 1Q07 Insurance reaches a new level of performance... Value Added¹ - R$ million Δ= 0.5% Δ= 28.9% (1) Includes equity income, fee income, brokage and asset management income

  16. 558 559 508 486 454 2Q06 3Q06 4Q06 1Q07 2Q07 ...so does credit card business. Value Added¹ - R$ million Δ= 10.1% Δ= 23.1% (1) Includes fee income, financing income, equity income and others

  17. Great expansion in the credit card basis... 15.7 14.4 14.1 11.4 9.9 11.5 10.9 11.2 9.4 8.9 Δ= 3.4% Δ= 29.9% 2Q06 3Q06 4Q06 1Q07 2Q07 Credit Cards - million (1) Includes Credit Cards and Debit Cards Revenue¹ - R$ billion ...6 million new cards in 12 months.

  18. Costs under control... R$ million Δ % over 2Q06 1Q07 0.5 2.6 3,396 3,268 3,253 3,216 3,186 9.9 8.5 1,516 1,383 1,378 1,519 1,401 1,839 1,846 1,804 (6.9) (2.0) 1,748 1,713 2Q06 3Q06 4Q06 1Q07 2Q07 Personnel Expenses¹ Other Administrative Expenses¹ ...in line with the business pace. (1) Legal risk and extraordinary items are not included.

  19. Early Retirement Plan and Previ... • Early Retirement Plan • Eligible Employees: those above 50 years old or able to receive INSS pension and over 15 year contribution to Previ • 6.9 thousand people joined • Impacts in the 2Q07: R$ 445.9 million, after taxes • Forecasted saving for 2008: R$ 158 million, after taxes • Suspension of the Contributions to Previ • Suspension of the contributions to the Benefit Plan #1 • Impacts in the 2Q07: R$ 50 million, after taxes • Forecasted saving for 2008: R$ 200 million, after taxes (subject of revaluation every 12 months) ...bring future cost savings and...

  20. 10.5 9.9 10.2 10.1 9.8 82.9 82.7 82.6 82.5 79.3 2Q06 3Q06 4Q06 1Q07 2Q07 ...reduction in the workforce. Workforce - thousand Points of Service - thousand 15.1 15.2 15.0 15.1 15.0 Employees Interns 3.9 4.0 4.0 4.0 4.0 11.1 11.2 11.2 11.0 11.1 2Q06 3Q06 4Q06 1Q07 2Q07 Branches Others

  21. 2.5 2.4 2.4 2.3 2.2 2.2 2.0 2.0 1.9 1.9 Fee Income... R$ billion 127.9 130.2 112.2 113.4 112.9 110.1 2Q06 3Q06 4Q06 1Q07 2Q07 Recurring Coverage Ratio¹ - % Fee Income Coverage Ratio¹ - % Personnel Expenses ...covers more than 130% of personnel expenses. (1) Year to Date

  22. Expenses control allows... R$ billion 49.1 47.5 46.5 45.5 44.1 44.7 8.0 7.7 7.5 7.1 7.1 4.2 3.6 3.4 3.4 3.3 2Q06 3Q06 4Q06 1Q07 2Q07 Recurring Efficiency Ratio¹ - % Administrative Expenses Efficiency Ratio¹ - % Operating Income ...to keep efficiency on the track. (1) Year to Date

  23. 17.7 17.3 17.3 17.2 15.9 5.8 5.7 5.6 5.5 5.3 11.9 11.6 11.6 11.6 10.6 Jun/06 Sep/06 Dec/06 Mar/07 Jun/07 BIS Ratio allows... % Tier I Tier II ...a R$ 88 billion leverage margin.

  24. For further information access www.bb.com.br/ri Investor Relations Unit SBS - Quadra 1 - Bloco C - Ed. Sede III - 5° floor 70073-901 - Brasília (DF) Phone: 55 (61) 3310.3980 Fax: 55 (61) 3310.3735 www.bb.com.br ri@bb.com.br Disclaimer- This presentation contains references and statements, planned synergies, increasing estimates, projections of results and future strategy for Banco do Brasil, it’s Associated and Affiliated Companies and Subsidiaries. Although these references and statements reflect the management’s belief, it also involves imprecision and high difficult risks to be foreseen, consequently, it may conduct to a different result than the one anticipated here. These expectations are highly depended on market conditions, on the Brazilian economic performance, on the sector and the international market. Banco do Brasil is not responsible for bringing up to date any estimate in this presentation.

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