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Annual Report 2015

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Message from
the Management GRI G4-1

In 2015, the global economy growth pace was less intense than what was anticipated by the beginning of the year, with major differences among the main regions. In the United States, the Federal Reserve (Central Bank) raised, in December, the interests basic rate for the 0.25-0.50% p.a. interval, which had been stable in the 0-0.25% p.a. interval since December, 2008. In Europe, the economic activity has been rendering positive answers to the monetary leverages fostered by the European Central Bank. In the emerging markets, mainly in Latin America, uncertainties towards the pace of the Chinese economy’s slowing down had direct impact on the economic activity, which exports are commodities-centered.

In the Brazilian economy, year 2015 was characterized by adjustments, especially in the fiscal and monetary plans with adverse effects on the economic activity. The cooling of the labor market, the decrease in the level of confidence of the agents, the high level of inventories and the credit market slowing down were elements that composed the more challenging economic scenario. Even facing the recessive environment, the inflation to the consumer continued to be pressured, mainly due to readjustment of administered prices and also by devaluation of the Brazilian Real. In addition, the inflation expectations continued to be free from the target center. Thus, the Central Bank (Bacen) proceeded with the cycle of adjustments of the Interests Basic Rate (Selic) along the year, stabilizing it at 14.25% p.a.

Although facing more challenging economic context, we have accomplished positive results. The net profit reached R$14.4 billion, incorporating 28% increment compared to 2014. The adjusted net profit, which excludes the effects of extraordinary items, summed up R$11.6 billion, which result is 2.2% higher than in 2014. The return on the equity was 13% p.a. The shareholders’ remuneration reached up R$5.7 billion, with net profit per share of R$5.05 p.a. Our total assets reached up R$1.6 trillion in December, 2015, with 10.2% increase, compared to 2014. The delinquency ratios stayed below the average of the Brazilian Banking Industry (SFN), and the loan portfolio – broad concept, increased 6.9%, totaling R$814.8 billion.

We play a major role in the credit to the Brazilian agribusiness, with 60.9% market share. This portfolio has grown by 6.1% in the year, summing up R$174.9 billion, which represents 21.5% of our total portfolio during the period. In the third-parties’ resources management, BB DTVM is leader in theInvestment funds national industry since 1994 and summed up R$603.2 billion in managed third-parties’ resources by the end of 2015, which amount corresponds to 21.5% of the market.

The consistency and solidity that have made us one of the most respected institutions of the market are combined with innovation to sustain the excellence in customers’ services and in the relationships with our partners. Along the year, several initiatives aimed at enhancing the customer’s experience and the effectiveness of the operations. In March, we launched an application that enables making purchases using the mobile, replacing the card as a payment mean. We were accountable for a first of the kind technological innovation in Brazil: we are the only Bank that provides contracting of vehicles financing using the mobile channel.

Our frequent efforts towards improvement of the operational efficiency allowed us to reach important accomplishments, such as the 86% reduction in the number of frauds with cards, by replacement of the plastics and sending of SMS to the customers at the instance of the purchase. In December, we also reached the milestone of seven months in a row out of the list of the five banks with the largest number of complaints in Bacen’s ranking, a proof that the efforts to improve the services have generated positive results.

In terms of customers’ services management, twopromising novelties to enhance our operations are BB’s new Retail Strategy, which, among several services solutions, has provided the Estilo customers with the Estilo Digital relationship model, covering approximately 360 thousand who can now use one of the 104 Estilo Digital units launched during the year, and the Estratégia Elos Produtivos, aimed at intensifying credit operations from leading companies in value chains and related companies.

Concerning the institutional safety processes, it is worth highlighting the training of 768 administrators and representatives of regional instrumentalities that were given guidance on the processes related to the subject matter. The meetings, held in 12 states, addressed the subjects of Money Laundry and Terrorism Financing Prevention and Fighting; Information Security; Business Continuity Management and Prevention of Robberies and Abductions.

As the outcome of our actions towards socioenvironmental responsibility (RSA) streamlined with the market best practices, we highlight our inclusion, for the fourth consecutive year, into the Dow Jones Sustainability Index (DJSI) and the permanence in the BM&FBOVESPA Corporate Sustainability Index (ISE) for the eleventh time.

We have also been recognized as one of the eight more sustainable banks in the world in the book The Sustainability Yearbook, by RobecoSAM, and reached the best corporate socioenvironmental performance of the financial system in Latin America in the Green Ranking 2015, published by the US magazine Newsweek.

Concerning the social business, 129,670 contracts of the Student Financing Fund (FIES) were formalized, in the amount of R$6.5 billion, and contracting of 12,644 operations in BB Crédito Acessibilidade (Accessibility Credit), which, since its launching in 2012, has already served more than 29 thousand persons.

Another highlight is our employees’ activities in social projects, reaching the milestone of 26 thousand employees registered in BB’s Volunteering project selected 167 projects from social entities in the total amount of R$6.9 million, for financial support in initiatives aimed at employment and income generation and environmental care, which count on the work of our volunteers.

We concluded the first phase of the Brazil Water Program (2010-2015), an activity developed in partnership with the Brazilian Waters Agency (ANA), the WWF-Brazil Organization and the Banco do Brasil Foundation (FBB). Along the first five years of the partnership, we invested, together with FBB, over R$54 million in projects focused on improvement of water quality and offering, expansion of the natural plant coverage in seven waterway micro-basins – with more than one million seedlings planted – stimulation of responsible consumption and proper treatment of solid waste in five Brazilian municipalities.

Our mission of being a “Market Bank with Public Spirit” guides also our several actions involving all the sustainability aspects. Tuned with the Agenda Global 21, BB’s Agenda 21, our sustainability plan, guarantees adoption of socioenvironmental criteria in processes, practices and business. In 2016, for the sixth time, we will be updating our Agenda 21, which will be referred to as BB’s Agenda 30, streamlined with the new global agenda for the sustainable development, promoted by the United Nations (UN). Therefore, broad discussions will be held, engaging stakeholders and interested parties, to define, based on several meetings, the priorities for the 2017-2019 period on this subject matter, aligned to the Sustainable Development Goals, defined in the document named as Transforming our world: the 2030 Agenda for Sustainable Development, of the UN.

We further emphasize our entire engagement in several adopted volunteer commitments, such as the 10 Principles of the Global Pact, Principles of Equator, Principles for the Responsible Investment and the Guidelines of the Organization for Economic Cooperation and Development (OECD) for the multinational companies.

The global megatrends that bring emerging risks and opportunities and affect the lives of people and business are also considered in our strategy, our review of objectives, our targets and our vision of the future. Faced with this scenario, we maintained the partnerships and renewed the Brazil Water program for the next five years, focused on innovative initiatives in water resources management and on the development of business models directed for green economy fomentation. In 2016, we will continue to work towards preservation of the healthy balance between the economically viable company and attractive for the shareholders and committed with the development of Brazil, leveraging the economic segments that are crucial for the nation. The effective accomplishment of such strategic goals is only enabled by the commitment and leadership of our stakeholders who identify themselves with the essence of our organization and turn challenges into opportunities for improvement and innovation.

We extend our appreciation to the more than 109 thousand employees for their dedication and for the over 61 million customers for the confidence, essential features for the good results accomplished. We are committed to generating value for those stakeholders and also for investors, suppliers and the society, creating a virtuous cycle that allows us to contribute for the development of the Country and of its people as well.


Alexandre Corrêa Abreu
CEO of Banco do Brasil

Manoel Carlos de Castro Pires
Chairman of the Board of Directors

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