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Banco do Brasil's standards of Corporate Governance are among the highest in the world, meeting the increasingly demanding requirements of the market. The bank has joined the BM&FBovespa Novo Mercado, which combines institutions with the most rigorous Corporate Governance practices, such as equality of rights between shareholders, the transparent presentation of accounts to investors and society, as well as the sustainability of their businesses, and an ethical approach in relation to their public audiences.

In 2010, Banco do Brasil once again delivered consistent and growing results reporting net earnings of R$11.7 billion. With an earnings payout policy of 40%, BB distributed R$4.7 billion in dividends and interest-on-equity, guaranteeing positive returns to its shareholders.

Public Offering of Shares


In June 2010, Banco do Brasil carried out its most successful public offering of shares ever, with 396 million shares being traded, 286 million consisting of the primary offer and the remaining 110 million being a secondary offer, totalling R$9.8 billion in all.

The raising of funds to the distribution of shares through the Primary Offer had the following purpose: (i) 85% of the funds will be used to expand the Bank's capital base, and thus enabling it to increase the size of its loan portfolio, with it being estimated that most of this expansion is likely to be through lending operations for private individuals, and companies; and (ii) the remaining 15% of the funds will be used also to strengthen the Bank's capital base, with the aim of supporting inorganic growth through possible acquisitions of other institutions in the future.

The offering has strengthened the Bank's capital structure to make its expansion strategy possible and raise its free-float to 30.4%, fulfilling its commitment assumed with the BM&FBovespa for listing on the Novo Mercado.

Institutional investors ended up with 48.3% of the total shares offered, while retail investors ended up with 21.4%. The remainder (30.3%) was taken up by existing shareholders exercizing their preferential take-up rights.

With the offer, 78,000 new shareholders became part of Banco do Brasil's shareholder base and with this the Bank ended the year with 389,700 shareholders. The largest shareholder of BB is the Federal Union, which after the offer had reduced its shareholding from 65.3% to 59.2% of the total capital. The second largest shareholder is held by Caixa de Previdência dos Funcionários do Banco do Brasil (PREVI), which maintained its shareholding of 10.4%.

The Bank's free-float is distributed between foreign investors, with 57.6%, companies, with 24.3%, and private individuals with 18.1%. The participation by foreign investors in the Bank's capital has increased from 0.9% in 2002, to 17.5% in the end of 2010.

The public share offering led BB's shares (BBAS3) to an appreciation of 12.7% over 12 months, ending 2010 at
R$ 31.42 (adjusted for dividends), in other words double the average performance of the market. You can find additional information about the performance of BB' stocks in the chapter ''Our Businesses''.



Total Distribution of Free-float

 

Shareholder Breakdown

     
 

Free Float

(%)


















Ownership Structure

(%)

Shareholders Dec/09 Sep/10 Dec/10
Federal Union 65.3 59.2 59.2
Ministry of Finance 53.7 51.9 51.9
Fundo de Garantia a Exportação 8.9 4.9 4.9
Fundo Garantidor PPP 2.3 - -
Fundo de Inv. Caixa FGHAB 0.1 - -
Fundo de Garantia para Construção Naval - - -
Fundo Garantidor para Investimentos 0.3 0.3 0.3
Fundo Fiscal de Inv e Estabilização - 2.2 2.2
Fundo de Garantia de Operações - - -
Caixa FI Garantia Construção Naval - - -
Previ 10.4 10.4 10.4
BNDESPar 2.4 0.0 0.0
Shares in Treasury 0.1 0.0 0.0
Free Float 21.8 30.4 30.4
Individuals
5.4 5.9 5.5
Companies
4.7 7.5 7.4
Foreign investors
11.8 17.0 17.5
Incorporation of BNC
- - -
Total 100.0 100.0 100.0


Relationship


    Communication with the Market
Banco do Brasil adopts a policy of total transparency with respect to its stakeholders. Communication with the market is characterised not only by compliance with the applicable legislation, but also the disclosure of information with the greatest detail possible, in a reliable and timely manner, without losing sight of its quality.

The Bank provides a wide range of reports and information about the Company through its various channels, particularly its Investor Relations site.

With the aim of maintaining communication with its shareholders, investors and market analysts, in 2010 BB participated in 76 meetings with investors and analysts in the country, 13 conferences, and held 8 results conference calls for analysts, as well as receiving more than 600 telephone calls. As a consequence of the public share offering, as well as the issue of debt in international markets, roadshows were carried out in Asia, Europe and South and North America. We held 164 meetings with 249 investors outside Brazil.

To learn more about Banco do Brasil's Investor Relations site, please access the website link www.bb.com.br/ri


It is worth pointing out that the use of conference calls also demonstrates BB's commitment to the environment, seeing that it contributes to the reduction in gas emissions in that it prioritize his virtual meetings, thus avoiding the necessity for physical travel by the various participants.

This year Banco do Brasil held APIMEC meetings in 6 Brazilian capitals, presenting the highlights of the institution, and promoting debate with its stakeholders.

BB's Investor Relations unit is always available to shareholders and the market. To this end, the Bank makes channels available such as "Speak to IR", space on the site where shareholders and analysts can pose their questions and have their queries answered, with a response guaranteed within 48 hours. The IR site is also a source of material for consultation, with information such as Material Facts, and Market Information to the Market and Reports covering business performance, historic series, among others. While the branches are responsible for catering to shareholders on operational issues.


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