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BB's shares

In June 2010 Banco do Brasil performed its most successful public offering of shares, in which 396 million shares were traded, 286 million being through a primary offering with the remaining 110 million being in the form of a secondary offering, totalling R$9.8 billion in all.

The offer strengthened the Bank's capital structure in order to enable it to carry out its expansion strategy and raise the size of its free float to 30.4%, fulfilling the commitment implied by joining the BM&FBovespa Novo Mercado.

Institutional investors ended up with 48.3% of the total offered, with retail investors accounting for 21.4%. The remaining shares (30.3%) were described for by existing shareholders exercizing their preferential take-up rights.

As a result of the offer, 78,000 new shareholders joined BB shareholding base. Banco do Brasil's largest shareholder is the Federal Union, which after the offering saw its stake reduced from 65.3% to 59.2% of the total capital. The second largest shareholder is Caixa de Previdência dos Funcionários do Banco do Brasil.

At the end of 2010, Banco do Brasil's paid-up capital amounted to R$33,077,996,200.75 consisting of 2,860,729,247 ordinary shares, without nominal value. The largest shareholder is the Federal Union, with 59.2% of the total capital, followed by Caixa de Previdência dos Funcionários do Banco do Brasil (Previ) with 10.4%.

Ownership Structure

  2006 2007 2008 2009 2010
Federal Union 68.7 67.1 65.6 65.3 59.2
Previ 11.4 10.7 10.4 10.4 10.4
BNDESPar 5 2.6 2.5 2.4 0.01
Free Float 14.8 19.6 21.5 78.1 30.4
Shares in Treasury 0 0 0 0.1 0


Share Performance


The equity market reflected the institutional and economic movements in 2010. In the domestic market, the dynamism of the Brazilian economy favoured the appreciation in the shares of Banco do Brasil which ended 2010 at R$31.42, an appreciation of 12.71% (adjusted for dividends) over 12 months, compared to the appreciation of 1.00% in the Ibovespa over the same period.

Counting from the date of the share offering, on June 30, 2010, the shares of BB have appreciated by 30.8%, outperforming its peers.


Share Performance

(Δ%)




The table below shows the main market indicators for the shares of Banco do Brasil:

Shares 2006 2007 2008 2009 2010
Earnings per Share R$ (4) 2.44 2.04 3.43 3.95 4.32
Price/Earnings 12 Months (x) 8.6 14.9 4.3 7.5 7.3
Price/Book Value (x)(4) 2.5 3.1 1.3 2.1 1.8
Book Value (R$)(4) 8.4 9.8 11.7 14.1 17.7
Payout (%) 40.0 40.0 40.0 40.0 40.0
Dividend Yield (%) 4.6 2.7 9.3 5.3 5.2
Market Cap (R$ billion) 52.8 75.3 37.7 76.3 89.9
Price Share Annual Change (%) +65.8 +47.0 -49.1 +117.0 +12.7


In keeping with its dividend distribution policy, BB pays out 40% of earnings in the form of dividends and interest on equity to its shareholders. Below is shown the evolution in these figures since 2006:


Distribution of Dividends and Interest on Equity to Shareholders – R$ million 2006 2007 2008 2009 2010
TN 1,706 1,382 2,299 2,657 2,910
PREVI 299 228 364 418 488
BNDES 115 90 88 100 50
Individuals 87 88 200 221 253
Companies 61 78 163 196 277
Foreign Investors 135 157 400 466 726
Incorporation of BNC 0 0 0 1 0
TOTAL 2,405 2,023 3,521 4,059 4,706


Warrants

In 1996, on occasion of BB's capital increase, three series of warrants were issued: A, B and C, with due-dates in 2001, 2006 and 2011, respectively. The exercise price of these warrants was established at R$8.50, with adjustment by the IGP-DI index, pro rata temporis.

At the public offerinf of shares, there were 1,551,727 C Warrants exercized (BBAS13), with 4,328,704 remaining active. The distribution and some characteristics of the "C" warrants are shown in the tables below:

C Bond Series


Series  Ticker Code  Date of Exercising  Quantity Exercise Price R$ Quotation in R$
C Warrants   BBA S 13    03.31 to 06.30.2011   4,328,704   28.77  67.33


In a simulation, taking the total of 2,860.7 million shares, the dilution potential for the Bank's capital is 0.5%, based on the premise that up to the end of 2011 there will be no additional capital increases, and that the remaining quantity of C Bonds will be exercised on their due-date (31.03 to 30.06.2011).

Conversion:
1 warrants = 3,131799 shares
Total shares = 2,860,729,247


Expected capital dilution
 

Warrant  Quantity of Warrant Quantity of Shares Capital Dilution – %
C Warrants 4,328,704 13,556,631 0.5


ADR Performance

In order to reach international standards of shareholding structure and composition, in December 2009 Banco do Brasil took its first steps in launching an American Depositary Receipt Program – ADR, which placed in the market up to the end of 2010, more than 10 million active ADRs, a record volume for this category. The ADR listing provided more visibility for the Bank abroad, facilitating the conquest of new shareholders in the American market.

Banco do Brasil's ADRs obtained the highest organic growth in the last decade of all the Brazilian over-the-counter ADR programs, being the third most traded on the over-the-counter market, behind only OGX and Usiminas. In 2010, the average daily volume on the over-the-counter market in Banco do Brasil's ADRs was US$1.2 million, compared to the average volume for Brazilian listed companies, of US$230,000.

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