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Banco ABC - IR Presentation - 3rd Quarter 2008

Banco ABC Brasil is a mid-sized Brazilian bank that focuses on corporate lending. It has experienced strong growth in its credit portfolio despite economic downturns. The bank has a proven track record of low loan losses. Key strengths include its controlling shareholder, experienced management team, expertise in credit analysis, and wide range of products. Opportunities for further growth exist in expanding its middle market business and product offerings, though heavy reliance on wholesale funding and lack of distribution channels pose weaknesses.

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3rd Quarter 2008
Participants Tito Enrique da Silva CEO and Member of the Board 17 years at ABC Brasil, 39 years in banking of Directors Anis Chacur 17 years at ABC Brasil, 25 years in banking Deputy CEO Sérgio Lulia Jacob 17 years at ABC Brasil, 20 years in banking Executive VP & IR Officer Alexandre Sinzato 7 years at ABC Brasil IR Manager 2
. Who we are . Business Segments . Competition . Financial Highlights . Conclusion . Appendix 3
History in Brazil Arab Bank Corporation and Roberto Marinho Group jointly initiate Banco ABC Roma SA, The bank acting in the segments of structures its corporate lending, trade Middle Market finance and treasury operations Arab Banking Corporation and local management acquire Roberto Marinho IPO Group´s shares 1989 1991 1997 2005 2006 2007 2008 Current The bank´s name management starts changes to running the bank Banco ABC Brasil S.A. 4
Focus in Corporate Credit Credit Portfolio1 6,879 3.2% Payroll Deductible CAGR = 38.8% 4,992 14.2% Middle Market 1.9% 11,8% Wholesale & Large Middle 2,911 2,605 2,011 0.5% 82.6% 6% 11% 86.3% 94% 88.5% 71.5% 37.8% 100% R$ million. 1. Including guarantees. 2004 2005 2006 2007 9M08 •Strong focus on providing loans and structured products to mid-sized and large companies. •Expertise in corporate credit risk analysis with remarkably low historical losses. Sector Annual revenues •Wide range of credit products. Large Middle > R$250 Mi + Wholesale Middle Market R$30 – 250 Mi •Winning combination of a strong controlling shareholder and an independent local Management team. 5
International bank headquartered in Bahrain Listed in the Bahrain stock exchange Total Assets: US$ 30,433 Mi Present in 21 countries Controlling Shareholders´ Equity: US$ 2,111 Mi Ratings: Main shareholders Shareholder • Abu Dhabi Investment Authority – 27.6% • Kuwait Investment Authority – 29.7% BBB+ BBB+ A3 • Central Bank of Libia – 29.5% Sep 2008 Independent management • Agile decision making process Ratings High Successful track record • Outstanding performance (*) Local Global Aaa.Br Baa2 Rating in corporate credit Strong controlling shareholder AA- BB+ • Access to attractive funding * Local Currency Deposits 6
Ownership Structure Total Capital Free Float 32.7% ABC (BSC) Shareholders´ Equity (R$ Mi) and Basel Index (%) 56.4% 26.70% Associates 19.20% 1.4% 1,159 Local 1,132 Management 13.60% 16.70% 9.5% 1,083 Voting Capital Local Management 483 14.4% 2Q07 3Q07 2Q08 3Q08 ABC (BSC) 85.6% 7
. Who we are . Business Segments . Competition . Financial Highlights . Conclusion . Appendix 8
Wholesale & Large Middle 5,678 Guarantees Wholesale CAGR = 31.89 % 4,309 Companies with annual revenues 1,513 over R$ 2 billion 1,093 2,458 2,587 2,011 Large Middle Loans 585 567 4,166 428 Companies with annual revenues 3,216 31.8% 2,020 66.5% ranging from R$ 250 million 1,590 1,873 to R$ 2 billion 2004 2005 2006 2007 3T08 R$ million 529 10.1 9.2 466 Minas Gerais +  7.3 387 South Northeast 341 352 2.6% 317 12.9% São Paulo ‐ Rio de Janeiro Capital 12.6% 38.7% Duration Average Ticket Clients (days) (R$ Mi) 2006 2007 3Q08 São Paulo ‐ Countryside 33.3% 9
Wholesale & Large Middle Strengths Weaknesses Strong relationship with clients. Retail funding. Expertise in credit analysis. Capital base. Focused and agile operation. Wide range of products. Access to competitive funding. Opportunities Threats Increase of margins as a consequence of Increase of delinquency ratios as consequence global liquidity constraints. of global economic crisis. Expansion in investments in infraestructure in Increase of bank regulation, restricting products Brazil. and increasing capital requirements. Banks´ M&A. 10
Middle Market Credit Portfolio Companies with annual revenues 979.9 Geographical ranging from R$ 30 million Distribution 5.8% 4.3% to R$ 250 million Rio CAGR = 99.63 % South 9.2% Minas Gerais 11% SP Countryside São Paulo 587.2 2.4 4.1% 409 8,8% 193 1.9 181 1.4 311 71.7% 118 241 309.2 87.7% 146.4 100% 66.9% Duration Average Ticket Clients 89.9% 100% (days) (R$ Mi) 2006 2007 3Q08 2005 2006 2007 3T08 R$ million 11
Middle Market Strengths Weaknesses Focused and agile operation. Distribution channel. Experienced work force with strong ties to key clients. Access to competitive funding. Opportunities Threats Banks´ M&A. Increase of delinquency ratio as consequence of global economic crisis. Operation not yet fully deployed leaving room for further growth in untapped clients. Expansion to other developed SME regional markets. 12
Other Activities Credit portfolio in September 2008: R$220 mi Payroll Deductible Agreements: INSS 20.6% / others 79.4% Pricing & Asset Liability Management Proprietary Trading Corporate and Sovereign Bonds Treasury Interest Rates FX Hedge & Derivatives Average V@R 3Q08 : R$4.3 Million Investment Banking M&A 13
Other Activities Capital Local Market FIDC Markets Debentures Promissory Notes Offshore Structured Trade Finance MMX Mineração e Metálicos S.A. US$ 70.000.000 7 Years Syndicated Pre-Export Facility Arrangers & Lenders Lender 14
. Who we are . Business Segments . Competition . Financial Highlights . Conclusion . Appendix 15
Credit Sector in Brazil Banks participation in Credit Sector (total) IPOed mid-sized ABC Brasil banks Ranking Bank % 0,5 % 3,1 % 1 Itaú + Unibanco 22,9% Other 8,7 % 2 BB + Nossa Caixa 18,5% 3 ABN + Santander 17,6% 4 Bradesco 13,9% 5 Caixa Econômica 5,6% 6 HSBC 3,3% 7 Votorantim 2,9% 8 Safra 2,8% * Fonte: BACEN Set/08 8 biggest banks 87,7 % Credit Operations evolution (non-earmarked) Credit as % GPD - (total) Corporate – R$ Mi 444,849 39.1% CAGR = 27.2% 343,250 34.7% 260,363 30.7% 212,976 28.1% 179,355 26.9% 2004 2005 2006 2007 Sep/08 2004 2005 2006 2007 Sep/08 * Source: Central Bank of Brazil 16
How We See Competition Our sophisticated and diversified product portfolio allows us to benefit from an untapped demand in our market niche Product Sophistication Clients Industry How We See Competition? Client Size1 Products Needs Supply Onshore / Offshore loans Corporate Guarantees Large Debt capital markets FIDC / securitization 2,000+ Structured trade finance Structured project finance Hedge and derivatives Onshore / Offshore loans Large-Middle Guarantees 250- Debt capital markets FIDC / securitization 2,000 Structured trade finance Structured project finance Hedge and derivatives Untapped Demand Loans (working capital, revolving credit) Middle Advances on receivables 30-250 Trade finance Guarantees Consumer Individuals Payroll deductible loans # de clientes potenciais LEGEND: High Mid-High Medium Low 17
. Who we are . Business Segments . Competition . Financial Highlights . Conclusion . Appendix 18
High Quality of Credit Portfolio D - H 0.6% PDD – % loan portfolio (Sep 08) R$ 34.6 Mi 2.2% 1.9% 1.1% 0.7% Wholesale + Middle Payroll TOTAL Large Middle Market Deductible AA - C 99.4% R$ 5,294.7 Mi 2001 2002 2003 2004 2005 2006 2007 Sep 08 Losses / Portfolio % 0.1% 0.7% 1.2% 0.0% 0.0% 0.2% 0.1% Provision / Portfolio % 1.8% 2.7% 1.6% 1.2% 1.4% 1.0% 1.1% 19
Financial Highlights Funding 5,459.3 4,819.4 4,354.3 40.6% 3,841.3 36.3% 3,164.6 43.0% 44.0% 7.4% Individuals International 35.4% 10.3% 2.7% 9.2% BNDES 2.5% 1.8% 2.4% 10.5% 13.4% 11.3% 22.4% 19.5% Institutional 19.0% 20.2% Local 24.4% 25.0% 28.3% 23.3% Corporate 25.0% 22.1% Sep 2007 Dec 2007 Mar 2008 Jun 2008 Sep 2008 R$ million 20
Financial Highlights NIM – % Efficiency Ratio – % 6.7% 39.2 38.8 6.4% 6.6% 6.4% 37.4 35.8 5.5% 35.1 3Q07 4Q07 1Q08 2Q08 3Q08 3Q07 4Q07 1Q08 2Q08 3Q08 Net Income (R$ Mi) ROAE (%) CAGR = 107.7% 48.4 16.9% 43.4 15.5% 10.1% 23.3 3Q07 2Q08 3Q08 3Q07 2Q08 3Q08 21
. Who we are . Business Segments . Competition . Financial Highlights . Conclusion . Appendix 22
Proven Track Record 6,879 Growth despite avderse economic conditions 4,992 September 11th Banco Santos Argentinean Bankruptcy Crisis “Apagão” 2,911 Devaluation Presidential 2,605 of R$ 2,452 Elections of Lula 2,061 2,011 Russian Crisis 1,749 1,619 Asian Crisis 1,095 Mexican Crisis 727 640 371 1.09% 0.67% 1.2% 0.39% 0.7% 0.33% 0.10% 0.06% 0.02% 0.39% 0.02% 0.06% 0.00% 0.02% 0.06% 0.00% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Sep08 Credit Portfolio Loses / Credit Portfolio (R$ million) 23
SWOT Analysis - Banco ABC Brasil Strengths Weaknesses • Controlling Shareholder´s support brings liquidity • Distribution channel. comfort. • Management commitment strengthened by a 9.5% • Wholesale funding concentration. stake in the bank. • Expertise in credit analysis. • Competitive Efficiency Ratio. • Wide range of products. Opportunities Threats • Increase of middle market participation in the • Global crisis consequences in Brazilian economy. portfolio. • Banks´ M&A. • Increase of bank regulation, restricting products and increasing capital requirements. • Increase of margins as a consequence of global liquidity constraints. 24
Contacts Investor Relations Sergio Lulia Jacob – Executive VP & IR Officer Alexandre Sinzato – IR Manager Eduardo Randich – IR Analyst Henrique Mendonca – IR Analyst Web Site: www.abcbrasil.com.br/ri Email: ri@abcbrasil.com.br Phone: +55 (11) 3170 2186 25
. Who we are . Business Segments . Competition . Financial Highlights . Conclusion . Appendix 26
Corporate Structure Credit Group BOARD Auditing Bahrein Committee Internal Auditing CEO Tito Enrique da Silva Neto Deputy CEO Anis Chacur Neto Credit Large Legal Risk Credit Middle Management Commercial Commercial Middle Treasury and IR VP CFO/COO Corporate VP Sergio Lulia Jacob Market VP Sergio Borejo Jose Eduardo C. Laloni Gustavo A. Lanhoso 27
3Q08 Net Income Breakdown Other Operating  Income Tax and  Net Interest  Loan  88.8 Expenses Operations Social  Income Contribution (27.8) NET  (22.2) Profit Sharing INCOME Treasury 4.5 (13.9) Impact of IOE 7.0 Services 12.1 48.4 (15.2) 105.4 ResultS (R$ mi) 3Q08 2Q08 Chg.(%) 3Q07 Chg.(%) 9M08 9M07 Chg.(%) Credit*              100.1                 86.4              15.8             57.8               73.1              259.4           141.3              83.6 PDD               (11.3)                  (6.5)              73.8             (4.8)            135.3               (25.7)           (10.0)           157.0 Services                12.1                 10.8               12.0               9.3               30.1                32.0              29.9                7.0 Treasury **                   4.5                   9.8             (54.5)             (0.8)           (656.9)                28.3              23.2              21.8 Operational Revenues              105.3               100.5                 4.8              61.5               71.3               293.9           184.4             59.4  Other Income / Expenses               (27.8)               (27.8)               (0.1)            (21.4)              29.8               (79.1)            (80.6)              (1.9) Profit Sharing               (14.0)               (11.9)              17.3             (4.5)            210.3               (40.8)            (11.5)           254.8 Taxes ***               (15.2)               (17.4)             (12.6)           (12.3)              23.6               (44.3)           (24.6)             80.0 Net Income                48.4                 43.4               11.5              23.3             107.7               129.8              67.7             91.7  *Including the Opportunity Cost (CDI x Average Equity) in 3Q08: R$ 32.2 mi; 2Q08: R$ 30.3 mi; in 3Q07: R$ 24.0 mi. ** Treasury Results already adjusted with the effect of foreign exchange variation on Offshore Investments. *** Taxes already adjusted with the impact generated by the foreign exchange variation on Offshore Investments. 28
9M08 Net Income Breakdown Other Operating  233.7 Expenses Income Tax and  Net Interest  Loan  Operations Social  Income (79.1) Contribution NET  Profit Sharing INCOME (63.4) Treasury 28.3 (40.8) Impact of IOE 19.1 Services 32.0 129.8 (44.3) 293.9 29
3Q08 Expenses Breakdown Expenses (R$ mi) 3Q08 2Q08 Chg.(%) 3Q07 Chg.(%) 9M08 9M07 Chg.(%) Personnel           (17.6)           (16.0)            10.0           (12.5)            41.0           (47.4)           (32.4)            46.2 Other administrative expenses             (9.4)             (8.3)            14.1             (7.3)            29.3           (25.3)           (35.2)           (28.1) Comissions ‐ Payroll deductible             (2.9)             (2.6)            10.6             (0.8)          259.5             (7.6)             (1.6)          373.5 Profit Sharing           (14.0)           (11.9)            17.3             (4.5)          210.3           (40.8)           (11.5)          254.8 Taxes             (0.8)             (0.7)            13.3             (1.0)           (20.0)             (2.3)             (3.0)           (23.1) Total          (44.7)          (39.5)            13.1           (26.1)            71.3         (123.4)          (83.7)           47.4  3Q08 2Q08 Chg.(%) 3Q07 Chg.(%) 9M08 9M07 Chg.(%) Associates              514              483                31              380              134              514              380              134 Front‐Office              195              178                17             118                 77              195             118                 77 Back‐Office              319              305                14             262                 57              319             262                 57 30
Credit Portfolio Data 3Q08 Write off Credit Portfolio* 2.8 1.4 1.1 R$ Mi 0.1% 0.1% 0.1% 0.3 5,329.3 0.0% 4,165.8 R$ Mi % Portfolio 942.7 220.8 Past Due (> 91 days) 18.3 13.1 1.4% 0.4% *Excluding Guarantees. 4.3 0.1% 0.3% 0.9 R$ Mi % Portfolio Wholesale + Large Middle Middle Market Payroll Deductible Total 31
Disclaimer The material that follows is a presentation of general background information about Banco ABC Brasil S.A. ( “Banco ABC” or the “Bank”) as of the date of the presentation. It is information in summary form and does not purport to be complete. No representation or warranty, express or implied, is made concerning, and no reliance should be placed on, the accuracy, fairness, or completeness of this information. This presentation may contain certain forward-looking statements and information relating to Banco ABC that reflect the current views and/or expectations of the Bank and its management with respect to its performance, business and future events. Forward looking statements include, without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and may contain words like “believe,” “anticipate,” “expect,” “envisages,” “will likely result,” or any other words or phrases of similar meaning. Such statements are subject to a number of risks, uncertainties and assumptions. We caution you that a number of important factors could cause actual results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in this presentation. In no event, neither the Bank nor any of its affiliates, directors, officers, agents or employees shall be liable before any third party (including investors) for any investment or business decision made or action taken in reliance on the information and statements contained in this presentation or for any consequential, special or similar damages. Securities may not be offered or sold in the United States unless they are registered or exempt from registration under the United States Securities Act of 1933. Any offering of securities to be made in the United States will be made solely by means of an offering circular that may be obtained from the placement agents or the underwriters. Such offering circular will contain, or incorporate by reference, detailed information about Banco ABC and its business and financial results, as well as its financial statements. This presentation does not constitute an offer, or invitation, or solicitation of an offer, to subscribe for or purchase any securities. Neither this presentation nor anything contained herein shall form the basis of any contract or commitment whatsoever. The market and competitive position data, including market forecasts, used throughout this presentation was obtained from internal surveys, market research, publicly available information and industry publications. Although we have no reason to believe that any of this information or these reports are inaccurate in any material respect, we have not independently verified the competitive position, market share, market size, market growth or other data provided by third parties or by industry or other publications. Banco ABC, the selling shareholders, the placement agents and the underwriters do not make any representation as to the accuracy of such information. This presentation and its contents are proprietary information and may not be reproduced or otherwise disseminated in whole or in part without Banco ABC’s prior written consent. 32

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Banco ABC - IR Presentation - 3rd Quarter 2008

  • 1.
  • 2.
    Participants Tito Enrique da Silva CEO and Member of the Board 17 years at ABC Brasil, 39 years in banking of Directors Anis Chacur 17 years at ABC Brasil, 25 years in banking Deputy CEO Sérgio Lulia Jacob 17 years at ABC Brasil, 20 years in banking Executive VP & IR Officer Alexandre Sinzato 7 years at ABC Brasil IR Manager 2
  • 3.
    . Who we are . Business Segments . Competition . Financial Highlights . Conclusion . Appendix 3
  • 4.
    History in Brazil Arab Bank Corporation and Roberto Marinho Group jointly initiate Banco ABC Roma SA, The bank acting in the segments of structures its corporate lending, trade Middle Market finance and treasury operations Arab Banking Corporation and local management acquire Roberto Marinho IPO Group´s shares 1989 1991 1997 2005 2006 2007 2008 Current The bank´s name management starts changes to running the bank Banco ABC Brasil S.A. 4
  • 5.
    Focus in CorporateCredit Credit Portfolio1 6,879 3.2% Payroll Deductible CAGR = 38.8% 4,992 14.2% Middle Market 1.9% 11,8% Wholesale & Large Middle 2,911 2,605 2,011 0.5% 82.6% 6% 11% 86.3% 94% 88.5% 71.5% 37.8% 100% R$ million. 1. Including guarantees. 2004 2005 2006 2007 9M08 •Strong focus on providing loans and structured products to mid-sized and large companies. •Expertise in corporate credit risk analysis with remarkably low historical losses. Sector Annual revenues •Wide range of credit products. Large Middle > R$250 Mi + Wholesale Middle Market R$30 – 250 Mi •Winning combination of a strong controlling shareholder and an independent local Management team. 5
  • 6.
    International bank headquarteredin Bahrain Listed in the Bahrain stock exchange Total Assets: US$ 30,433 Mi Present in 21 countries Controlling Shareholders´ Equity: US$ 2,111 Mi Ratings: Main shareholders Shareholder • Abu Dhabi Investment Authority – 27.6% • Kuwait Investment Authority – 29.7% BBB+ BBB+ A3 • Central Bank of Libia – 29.5% Sep 2008 Independent management • Agile decision making process Ratings High Successful track record • Outstanding performance (*) Local Global Aaa.Br Baa2 Rating in corporate credit Strong controlling shareholder AA- BB+ • Access to attractive funding * Local Currency Deposits 6
  • 7.
    Ownership Structure Total Capital Free Float 32.7% ABC (BSC) Shareholders´ Equity (R$ Mi) and Basel Index (%) 56.4% 26.70% Associates 19.20% 1.4% 1,159 Local 1,132 Management 13.60% 16.70% 9.5% 1,083 Voting Capital Local Management 483 14.4% 2Q07 3Q07 2Q08 3Q08 ABC (BSC) 85.6% 7
  • 8.
    . Who we are . Business Segments . Competition . Financial Highlights . Conclusion . Appendix 8
  • 9.
    Wholesale & LargeMiddle 5,678 Guarantees Wholesale CAGR = 31.89 % 4,309 Companies with annual revenues 1,513 over R$ 2 billion 1,093 2,458 2,587 2,011 Large Middle Loans 585 567 4,166 428 Companies with annual revenues 3,216 31.8% 2,020 66.5% ranging from R$ 250 million 1,590 1,873 to R$ 2 billion 2004 2005 2006 2007 3T08 R$ million 529 10.1 9.2 466 Minas Gerais +  7.3 387 South Northeast 341 352 2.6% 317 12.9% São Paulo ‐ Rio de Janeiro Capital 12.6% 38.7% Duration Average Ticket Clients (days) (R$ Mi) 2006 2007 3Q08 São Paulo ‐ Countryside 33.3% 9
  • 10.
    Wholesale & LargeMiddle Strengths Weaknesses Strong relationship with clients. Retail funding. Expertise in credit analysis. Capital base. Focused and agile operation. Wide range of products. Access to competitive funding. Opportunities Threats Increase of margins as a consequence of Increase of delinquency ratios as consequence global liquidity constraints. of global economic crisis. Expansion in investments in infraestructure in Increase of bank regulation, restricting products Brazil. and increasing capital requirements. Banks´ M&A. 10
  • 11.
    Middle Market Credit Portfolio Companies with annual revenues 979.9 Geographical ranging from R$ 30 million Distribution 5.8% 4.3% to R$ 250 million Rio CAGR = 99.63 % South 9.2% Minas Gerais 11% SP Countryside São Paulo 587.2 2.4 4.1% 409 8,8% 193 1.9 181 1.4 311 71.7% 118 241 309.2 87.7% 146.4 100% 66.9% Duration Average Ticket Clients 89.9% 100% (days) (R$ Mi) 2006 2007 3Q08 2005 2006 2007 3T08 R$ million 11
  • 12.
    Middle Market Strengths Weaknesses Focused and agile operation. Distribution channel. Experienced work force with strong ties to key clients. Access to competitive funding. Opportunities Threats Banks´ M&A. Increase of delinquency ratio as consequence of global economic crisis. Operation not yet fully deployed leaving room for further growth in untapped clients. Expansion to other developed SME regional markets. 12
  • 13.
    Other Activities Credit portfolio in September 2008: R$220 mi Payroll Deductible Agreements: INSS 20.6% / others 79.4% Pricing & Asset Liability Management Proprietary Trading Corporate and Sovereign Bonds Treasury Interest Rates FX Hedge & Derivatives Average V@R 3Q08 : R$4.3 Million Investment Banking M&A 13
  • 14.
    Other Activities Capital Local Market FIDC Markets Debentures Promissory Notes Offshore Structured Trade Finance MMX Mineração e Metálicos S.A. US$ 70.000.000 7 Years Syndicated Pre-Export Facility Arrangers & Lenders Lender 14
  • 15.
    . Who we are . Business Segments . Competition . Financial Highlights . Conclusion . Appendix 15
  • 16.
    Credit Sector inBrazil Banks participation in Credit Sector (total) IPOed mid-sized ABC Brasil banks Ranking Bank % 0,5 % 3,1 % 1 Itaú + Unibanco 22,9% Other 8,7 % 2 BB + Nossa Caixa 18,5% 3 ABN + Santander 17,6% 4 Bradesco 13,9% 5 Caixa Econômica 5,6% 6 HSBC 3,3% 7 Votorantim 2,9% 8 Safra 2,8% * Fonte: BACEN Set/08 8 biggest banks 87,7 % Credit Operations evolution (non-earmarked) Credit as % GPD - (total) Corporate – R$ Mi 444,849 39.1% CAGR = 27.2% 343,250 34.7% 260,363 30.7% 212,976 28.1% 179,355 26.9% 2004 2005 2006 2007 Sep/08 2004 2005 2006 2007 Sep/08 * Source: Central Bank of Brazil 16
  • 17.
    How We SeeCompetition Our sophisticated and diversified product portfolio allows us to benefit from an untapped demand in our market niche Product Sophistication Clients Industry How We See Competition? Client Size1 Products Needs Supply Onshore / Offshore loans Corporate Guarantees Large Debt capital markets FIDC / securitization 2,000+ Structured trade finance Structured project finance Hedge and derivatives Onshore / Offshore loans Large-Middle Guarantees 250- Debt capital markets FIDC / securitization 2,000 Structured trade finance Structured project finance Hedge and derivatives Untapped Demand Loans (working capital, revolving credit) Middle Advances on receivables 30-250 Trade finance Guarantees Consumer Individuals Payroll deductible loans # de clientes potenciais LEGEND: High Mid-High Medium Low 17
  • 18.
    . Who we are . Business Segments . Competition . Financial Highlights . Conclusion . Appendix 18
  • 19.
    High Quality ofCredit Portfolio D - H 0.6% PDD – % loan portfolio (Sep 08) R$ 34.6 Mi 2.2% 1.9% 1.1% 0.7% Wholesale + Middle Payroll TOTAL Large Middle Market Deductible AA - C 99.4% R$ 5,294.7 Mi 2001 2002 2003 2004 2005 2006 2007 Sep 08 Losses / Portfolio % 0.1% 0.7% 1.2% 0.0% 0.0% 0.2% 0.1% Provision / Portfolio % 1.8% 2.7% 1.6% 1.2% 1.4% 1.0% 1.1% 19
  • 20.
    Financial Highlights Funding 5,459.3 4,819.4 4,354.3 40.6% 3,841.3 36.3% 3,164.6 43.0% 44.0% 7.4% Individuals International 35.4% 10.3% 2.7% 9.2% BNDES 2.5% 1.8% 2.4% 10.5% 13.4% 11.3% 22.4% 19.5% Institutional 19.0% 20.2% Local 24.4% 25.0% 28.3% 23.3% Corporate 25.0% 22.1% Sep 2007 Dec 2007 Mar 2008 Jun 2008 Sep 2008 R$ million 20
  • 21.
    Financial Highlights NIM – % Efficiency Ratio – % 6.7% 39.2 38.8 6.4% 6.6% 6.4% 37.4 35.8 5.5% 35.1 3Q07 4Q07 1Q08 2Q08 3Q08 3Q07 4Q07 1Q08 2Q08 3Q08 Net Income (R$ Mi) ROAE (%) CAGR = 107.7% 48.4 16.9% 43.4 15.5% 10.1% 23.3 3Q07 2Q08 3Q08 3Q07 2Q08 3Q08 21
  • 22.
    . Who we are . Business Segments . Competition . Financial Highlights . Conclusion . Appendix 22
  • 23.
    Proven Track Record 6,879 Growth despite avderse economic conditions 4,992 September 11th Banco Santos Argentinean Bankruptcy Crisis “Apagão” 2,911 Devaluation Presidential 2,605 of R$ 2,452 Elections of Lula 2,061 2,011 Russian Crisis 1,749 1,619 Asian Crisis 1,095 Mexican Crisis 727 640 371 1.09% 0.67% 1.2% 0.39% 0.7% 0.33% 0.10% 0.06% 0.02% 0.39% 0.02% 0.06% 0.00% 0.02% 0.06% 0.00% 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Sep08 Credit Portfolio Loses / Credit Portfolio (R$ million) 23
  • 24.
    SWOT Analysis -Banco ABC Brasil Strengths Weaknesses • Controlling Shareholder´s support brings liquidity • Distribution channel. comfort. • Management commitment strengthened by a 9.5% • Wholesale funding concentration. stake in the bank. • Expertise in credit analysis. • Competitive Efficiency Ratio. • Wide range of products. Opportunities Threats • Increase of middle market participation in the • Global crisis consequences in Brazilian economy. portfolio. • Banks´ M&A. • Increase of bank regulation, restricting products and increasing capital requirements. • Increase of margins as a consequence of global liquidity constraints. 24
  • 25.
    Contacts Investor Relations Sergio Lulia Jacob – Executive VP & IR Officer Alexandre Sinzato – IR Manager Eduardo Randich – IR Analyst Henrique Mendonca – IR Analyst Web Site: www.abcbrasil.com.br/ri Email: ri@abcbrasil.com.br Phone: +55 (11) 3170 2186 25
  • 26.
    . Who we are . Business Segments . Competition . Financial Highlights . Conclusion . Appendix 26
  • 27.
    Corporate Structure Credit Group BOARD Auditing Bahrein Committee Internal Auditing CEO Tito Enrique da Silva Neto Deputy CEO Anis Chacur Neto Credit Large Legal Risk Credit Middle Management Commercial Commercial Middle Treasury and IR VP CFO/COO Corporate VP Sergio Lulia Jacob Market VP Sergio Borejo Jose Eduardo C. Laloni Gustavo A. Lanhoso 27
  • 28.
    3Q08 Net IncomeBreakdown Other Operating  Income Tax and  Net Interest  Loan  88.8 Expenses Operations Social  Income Contribution (27.8) NET  (22.2) Profit Sharing INCOME Treasury 4.5 (13.9) Impact of IOE 7.0 Services 12.1 48.4 (15.2) 105.4 ResultS (R$ mi) 3Q08 2Q08 Chg.(%) 3Q07 Chg.(%) 9M08 9M07 Chg.(%) Credit*              100.1                 86.4              15.8             57.8               73.1              259.4           141.3              83.6 PDD               (11.3)                  (6.5)              73.8             (4.8)            135.3               (25.7)           (10.0)           157.0 Services                12.1                 10.8               12.0               9.3               30.1                32.0              29.9                7.0 Treasury **                   4.5                   9.8             (54.5)             (0.8)           (656.9)                28.3              23.2              21.8 Operational Revenues              105.3               100.5                 4.8              61.5               71.3               293.9           184.4             59.4  Other Income / Expenses               (27.8)               (27.8)               (0.1)            (21.4)              29.8               (79.1)            (80.6)              (1.9) Profit Sharing               (14.0)               (11.9)              17.3             (4.5)            210.3               (40.8)            (11.5)           254.8 Taxes ***               (15.2)               (17.4)             (12.6)           (12.3)              23.6               (44.3)           (24.6)             80.0 Net Income                48.4                 43.4               11.5              23.3             107.7               129.8              67.7             91.7  *Including the Opportunity Cost (CDI x Average Equity) in 3Q08: R$ 32.2 mi; 2Q08: R$ 30.3 mi; in 3Q07: R$ 24.0 mi. ** Treasury Results already adjusted with the effect of foreign exchange variation on Offshore Investments. *** Taxes already adjusted with the impact generated by the foreign exchange variation on Offshore Investments. 28
  • 29.
    9M08 Net IncomeBreakdown Other Operating  233.7 Expenses Income Tax and  Net Interest  Loan  Operations Social  Income (79.1) Contribution NET  Profit Sharing INCOME (63.4) Treasury 28.3 (40.8) Impact of IOE 19.1 Services 32.0 129.8 (44.3) 293.9 29
  • 30.
    3Q08 Expenses Breakdown Expenses (R$ mi) 3Q08 2Q08 Chg.(%) 3Q07 Chg.(%) 9M08 9M07 Chg.(%) Personnel           (17.6)           (16.0)            10.0           (12.5)            41.0           (47.4)           (32.4)            46.2 Other administrative expenses             (9.4)             (8.3)            14.1             (7.3)            29.3           (25.3)           (35.2)           (28.1) Comissions ‐ Payroll deductible             (2.9)             (2.6)            10.6             (0.8)          259.5             (7.6)             (1.6)          373.5 Profit Sharing           (14.0)           (11.9)            17.3             (4.5)          210.3           (40.8)           (11.5)          254.8 Taxes             (0.8)             (0.7)            13.3             (1.0)           (20.0)             (2.3)             (3.0)           (23.1) Total          (44.7)          (39.5)            13.1           (26.1)            71.3         (123.4)          (83.7)           47.4  3Q08 2Q08 Chg.(%) 3Q07 Chg.(%) 9M08 9M07 Chg.(%) Associates              514              483                31              380              134              514              380              134 Front‐Office              195              178                17             118                 77              195             118                 77 Back‐Office              319              305                14             262                 57              319             262                 57 30
  • 31.
    Credit Portfolio Data3Q08 Write off Credit Portfolio* 2.8 1.4 1.1 R$ Mi 0.1% 0.1% 0.1% 0.3 5,329.3 0.0% 4,165.8 R$ Mi % Portfolio 942.7 220.8 Past Due (> 91 days) 18.3 13.1 1.4% 0.4% *Excluding Guarantees. 4.3 0.1% 0.3% 0.9 R$ Mi % Portfolio Wholesale + Large Middle Middle Market Payroll Deductible Total 31
  • 32.
    Disclaimer The material that follows is a presentation of general background information about Banco ABC Brasil S.A. ( “Banco ABC” or the “Bank”) as of the date of the presentation. It is information in summary form and does not purport to be complete. No representation or warranty, express or implied, is made concerning, and no reliance should be placed on, the accuracy, fairness, or completeness of this information. This presentation may contain certain forward-looking statements and information relating to Banco ABC that reflect the current views and/or expectations of the Bank and its management with respect to its performance, business and future events. Forward looking statements include, without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and may contain words like “believe,” “anticipate,” “expect,” “envisages,” “will likely result,” or any other words or phrases of similar meaning. Such statements are subject to a number of risks, uncertainties and assumptions. We caution you that a number of important factors could cause actual results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in this presentation. In no event, neither the Bank nor any of its affiliates, directors, officers, agents or employees shall be liable before any third party (including investors) for any investment or business decision made or action taken in reliance on the information and statements contained in this presentation or for any consequential, special or similar damages. Securities may not be offered or sold in the United States unless they are registered or exempt from registration under the United States Securities Act of 1933. Any offering of securities to be made in the United States will be made solely by means of an offering circular that may be obtained from the placement agents or the underwriters. Such offering circular will contain, or incorporate by reference, detailed information about Banco ABC and its business and financial results, as well as its financial statements. This presentation does not constitute an offer, or invitation, or solicitation of an offer, to subscribe for or purchase any securities. Neither this presentation nor anything contained herein shall form the basis of any contract or commitment whatsoever. The market and competitive position data, including market forecasts, used throughout this presentation was obtained from internal surveys, market research, publicly available information and industry publications. Although we have no reason to believe that any of this information or these reports are inaccurate in any material respect, we have not independently verified the competitive position, market share, market size, market growth or other data provided by third parties or by industry or other publications. Banco ABC, the selling shareholders, the placement agents and the underwriters do not make any representation as to the accuracy of such information. This presentation and its contents are proprietary information and may not be reproduced or otherwise disseminated in whole or in part without Banco ABC’s prior written consent. 32