INDEX FINANCIAL STATEMENTS EXPLANATORY NOTES NOTE 3 ... · NOTE 21 – Shareholders' Equity 44 NOTE 22 – Income Tax and Social Contribution on Net I ncome 47 NOTE 23 – Tax Credits

INDEX

FINANCIAL STATEMENTS

Balance Sheet 01

Income Statement 05

Statement of Changes in Stockholders’ Equity 06

Statement of Changes in Financial Position 07

EXPLANATORY NOTES

NOTE 1 – The Bank and its Operations 02

NOTE 2 – Presentation of the Financial Statements 03

NOTE 3 – Results of the Merger 06

NOTE 4 – Accounting Practices 08

NOTE 5 – Available Funds 13

NOTE 6 – Interbank Investments 14

NOTE 7 – Securities and Derivatives Financial Instru ments 15

NOTE 8 – Loan and Lease Operations 22

NOTE 9 – Other Receivables 27

NOTE 10 – Foreign Exchange Portfolio 28

NOTE 11 – Other Assets 29

NOTE 12 – Property and Equipment and Leased Assets 30

NOTE 13 – Deposits 31

NOTE 14 – Money Market Borrowing 32

NOTE 15 – Borrowings - Foreign Borrowings 33

NOTE 16 – Domestic Onlending – Official Institutions 34

NOTE 17 – Funds Obtained in Foreign Capital Markets (in R$/US$ million) 35

NOTE 18 – Other liabilities 37

NOTE 19 – Insurance, Pension Plans and Capitalization 39

NOTE 20 – Analysis of Income Statement Items 41

NOTE 21 – Shareholders' Equity 44

NOTE 22 – Income Tax and Social Contribution on Net I ncome 47

NOTE 23 – Tax Credits 49

NOTE 24 – Equity in the Earnings (Loss) of Subsidiary a nd Associated Companies 52

NOTE 25 – Related-Party Transactions 54

NOTE 26 – Basel Accord 55

NOTE 27 – Retirement and Pension and Health Plans - Pos t-Employment Benefits 56

NOTE 28 – Compensation Paid to Employees and Manageme nt 62

NOTE 29 – Assignment of Employees to External Organiza tions 63

NOTE 30 – Commitments, Responsibilities and Continge ncies 64

NOTE 31 – Financial Instruments 66

NOTE 32 – Statement of Cash Flow 68

NOTE 33 – Statement of Added Value 69

NOTE 34 – Other Information 70

INDEPENDENT AUDITORS REPORT

EXECUTIVE BOARD

Todoseu

FINANCIALSTATEMENTS

RESULTS

September/2008

Financial StatementsIn thousands of reais

B A L A N C E S H E E T

A S S E T S 09.30.2008 09.30.2007 09.30.2008 09.30.2007

CURRENT ASSETS 255.278.104 207.234.308 255.076.968 198.919.117

Available Funds (Note 5) 6.704.671 4.358.299 6.846.649 4.365.753

Short-term interbank investments (Note 6) 65.261.324 60.919.024 54.096.491 51.127.598Money market 52.765.926 42.727.867 52.787.640 42.661.691Interbank deposits 12.495.398 18.191.157 1.308.851 8.465.907

Securities and derivative financial instrumentsDerivatives (Note 7) 37.034.165 26.652.798 45.920.053 27.474.349Own portfolio 23.583.204 17.249.231 31.679.610 18.071.093Subject to repurchase agreements 10.971.968 5.661.388 10.976.320 5.661.388Deposits with the Brazilian Central Bank 1.119.367 1.199.752 1.119.367 1.199.752Pledged in guarantee 312.066 322.117 1.098.166 322.117Securities subject to repurchase agreements (with free movement) -- 963.742 -- 963.742Derivative financial instruments 1.047.560 1.256.568 1.046.590 1.256.257

Interbank accounts 38.162.755 31.445.909 38.238.283 31.484.467Payments and receipts pending settlement 2.466.851 2.116.318 2.467.017 2.116.446Restricted deposits Brazilian Central Bank deposits 35.510.779 29.175.231 35.563.660 29.198.697 National Treasury - rural credits receivable 13.025 21.122 13.025 21.122 National Housing Financing System (SFH) 60.033 1.861 60.033 1.861Interbank onlendings -- 46 -- 46Correspondent banks 112.067 131.331 134.548 146.295

Interdepartmental accounts 137.788 73.306 137.788 73.306Internal transfers of funds 137.788 73.306 137.788 73.306

Loan operations (Note 8) 74.382.466 59.546.284 74.623.325 59.919.584Loan operations Public sector 1.140.654 1.042.203 1.183.930 1.047.232 Private sector 78.035.452 62.825.805 78.252.105 63.324.540(Allowance for loan losses) (Note 8e) (4.793.640) -4.321.724 (4.812.710) -4.452.188

Lease operations (Note 8) 918 -14 -3.126 -1.002Lease and sublease receivables Public sector 35.167 53.757 35.167 53.757 Private sector -- 576 567.931 438.519(Unearned income from lease operation) (34.249) -54.332 (585.752) -478.179(Allowance for lease losses) -- -15 (20.472) -15.099

Other receivables 32.560.809 22.746.594 34.117.867 22.980.493Receivables on guarantees honored 4.749 47.225 4.749 47.225Foreign exchange portfolio (Note 10a) 17.052.672 11.537.655 17.052.672 11.537.655Income receivable 239.216 239.602 366.328 279.929Negotiation and intermediation of securities 15.728 1.387 286.674 190.645Specific operations (Note 9a) 1.840 0 2.177 0Special operations 28 575 28 575Insurance, pension plan and capitalization -- -- 395.885 --Sundry (Note 9b) 15.867.900 11.442.860 16.643.946 11.451.335(Provision for other losses) (Notes 8f and 8g) (621.324) -522.710 (634.592) -526.871

Other assets 1.033.208 1.492.108 1.099.638 1.494.569Investments 3 3 3 3Other assets (Note 11a) 261.021 252.442 304.476 253.505(Provision for devaluations) (Note 11a) (149.424) -151.182 (164.882) -151.895Prepaid expenses (Note 11b) 921.608 1.390.845 960.041 1.392.956

Banco do Brasil S.A.

Quarter ended in 09.30.2008

BB-ConsolidadoBB-Domestic and Foreign

Branches

1

LONG-TERM RECEIVABLES 187.993.279 148.585.820 195.578.756 146.965.290

Interbank Investments (Note 6) 16.475.503 3.708.274 16.995.190 291.480Money market 8.849.661 276.518 8.849.661 276.518 Interbank deposits 7.625.842 3.431.756 8.145.529 14.962

Securities and derivative financial instruments Derivatives (Note 7) 34.942.455 45.644.609 40.033.469 46.651.301Own portfolio 6.253.659 16.274.444 9.255.227 17.188.201Subject to repurchase agreements 18.470.637 24.673.327 18.493.848 24.767.578Deposits with the Brazilian Central Bank 9.209.715 3.242.799 9.209.715 3.242.799Pledged in guarantee 796.897 337.860 2.863.168 337.860Securities subject to repurchase agreements (with free movement) -- 786.484 -- 786.484Derivative financial instruments 211.547 329.695 211.511 328.379

Interbank accounts -- 18.449 -- 18.449 National Treasury - rural credits receivable -- 18.449 -- 18.449

Loan operations (Note 8) 100.235.638 68.997.733 100.975.790 69.566.931Loan operations Public sector 1.886.339 3.575.858 1.853.646 3.595.527 Private sector 104.220.689 70.310.152 105.092.920 70.859.789(Allowance for loan losses) (Note 8e) (5.871.390) -4.888.277 (5.970.776) -4.888.385

Lease operations (Note 8) 340 -10 16.624 27.099Lease and sublease receivables Public sector 13.007 38.927 13.007 38.927 Private sector -- 421 958.722 563.970(Unearned income from lease operation) (12.667) -39.347 (932.031) -568.365(Allowance for lease losses) -- -11 (23.074) -7.433

Other receivables 33.151.677 30.216.765 34.257.012 30.410.030Receivables on guarantees honored 45.884 -- 45.884 --Income receivable 36.741 37.192 35.724 37.192Specific credits (Note 9a) 819.297 737.942 819.297 737.942Insurance, pension plan and capitalization -- -- 12 --Sundry (Note 9b) 32.722.212 29.764.314 33.842.394 29.964.113(Provision for other losses) (Notes 8g and 8h) (472.457) -322.683 (486.299) -329.217

Other assets 3.187.666 -- 3.300.671 --Prepaid expenses (Note 11b) 3.187.666 -- 3.300.671 --

PERMANENT ASSETS 7.006.170 6.654.078 8.217.395 5.912.086

Investments 3.458.357 3.359.711 1.589.484 1.276.046Investments in subsidiary and associated companies (Note 24) Domestic 2.601.912 2.568.194 762.732 1.232.647 Foreign 821.202 750.939 -- -- Other investments 87.901 91.286 892.883 107.900(Provision for losses) (52.658) -50.708 (66.131) -64.501

Land and buildings in use (Note 12) 2.910.590 2.657.089 3.037.094 2.656.908Land and buildings in use 2.490.048 2.337.145 2.510.499 2.337.145Other property and equipment in use 4.940.467 4.300.503 5.277.958 4.305.201(Accumulated depreciation) (4.519.925) -3.980.559 (4.751.363) -3.985.438

Applications in fixed assets for leasing (Note 12) 46.236 93.386 2.939.100 1.429.510Leased assets 114.693 158.009 3.402.470 1.844.758(Accumulated depreciation) (68.457) -64.623 (463.370) -415.248

Deferred charges 590.987 543.892 651.717 549.622Organization and expansion costs 1.674.929 1.384.081 1.834.754 1.402.058(Accumulated amortization) (1.083.942) -840.189 (1.183.037) -852.436

Total 450.277.553 362.474.206 458.873.119 351.796.493

2

L I A B I L I T I E S / S T O C K H O L D E R S' E Q U I T Y

CURRENT LIABILITIES 342.677.590 287.175.299 340.910.755 279.482.739

Deposits (Note 13) 196.400.115 159.770.842 191.053.100 155.733.185Demand deposits 42.899.539 38.675.807 42.955.207 38.711.780 Savings deposits 52.692.961 43.830.975 52.692.961 43.830.975 Interbank deposits 5.852.910 9.745.638 598.903 5.598.454 Time deposits 94.684.803 67.250.606 94.536.127 67.324.160 Sundry 269.902 267.816 269.902 267.816

Deposits received under security repurchase agreeme nts (Note 14) 76.964.304 66.761.214 76.199.932 66.358.951 Own portfolio 26.064.977 26.451.003 25.761.188 26.445.441

Third-party portfolio 50.899.327 36.305.211 50.438.744 35.908.510 Unrestricted Portfolio -- 4.005.000 -- 4.005.000

Funds from acceptance and issue of securities 392.442 194.633 745.494 679.663Mortgage Notes -- -- 178.073 --Foreign securities 392.442 194.633 567.421 679.663

Interbank accounts 2.404.426 1.904.175 2.437.594 1.929.095Receipts and payments pending settlement 2.390.196 1.900.830 2.423.364 1.925.750 Correspondent banks 14.230 3.345 14.230 3.345

Interdepartmental accounts 1.314.607 1.497.225 1.314.607 1.497.225Third-party funds in transit 1.268.207 1.469.835 1.268.207 1.469.835 Internal transfers of funds 46.400 27.390 46.400 27.390

Borrowings 4.401.293 4.366.417 3.398.480 1.292.946Domestic borrowings - other institutions -- -- 112.797 --Foreign borrowings (Note 15) 4.401.293 4.366.417 3.285.683 1.292.946

Local onlendings - official institutions (Note 16) 12.005.672 12.411.098 12.015.663 12.419.982National Treasury 3.276.304 3.131.559 3.276.304 3.131.559 National Bank for Economic and Social Development (BNDES) 5.346.671 2.150.741 5.346.671 2.150.741 National Industrial Financing Authority (FINAME) 2.484.696 6.369.612 2.494.501 6.378.328 Other institutions 898.001 759.186 898.187 759.354

Foreign onlendings 255.332 1.071.430 95 95Foreign onlendings 255.332 1.071.430 95 95

Derivative financial instruments (Note 7b) 1.123.395 2.206.025 1.183.979 2.203.106Derivative financial instruments 1.123.395 2.206.025 1.183.979 2.203.106

Other liabilities 47.416.004 36.992.240 52.561.811 37.368.491Collection and payment of taxes and social contributions 2.749.261 1.916.332 2.769.671 1.916.581Foreign exchange portfolio (Note 10a) 15.691.347 11.600.359 15.760.968 11.600.359 Social and statutory 1.521.192 1.053.624 1.546.477 1.055.609 Taxes and social security contributions 12.853.270 11.729.946 13.725.723 12.116.180 Negotiation and intermediation of securities 386.583 516.429 382.031 192.049 Technical provisions - insurance, pension plan and capitalization (Note 19a) -- -- 3.143.543 --Financial and development funds (Note 18a) 343.518 60.078 343.518 60.078 Hybrid capital and debt instruments 14.494 -- 13.732 -- Sundry (Note 18c) 13.856.339 10.115.472 14.876.148 10.427.635

3

LONG-TERM LIABILITIES 79.568.511 52.126.984 89.908.025 49.141.831

Deposits (Note 13) 34.404.389 16.737.754 38.756.875 16.446.568Interbank deposits 1.358.048 295.718 5.710.534 4.532Time deposits 33.046.341 16.316.005 33.046.341 16.316.005 Others deposits -- 126.031 -- 126.031

Deposits received under security repurchase agreeme nts (Note 14) 9.139.307 8.486.497 9.139.307 8.486.497Own portfolio 2.870.586 3.091.187 2.870.586 3.091.187Third-party portfolio 6.268.721 4.950.310 6.268.721 4.950.310Unrestricted Portfolio -- 445.000 -- 445.000

Funds from acceptance and issue of securities 287.910 329.359 1.918.570 936.830

Debentures -- -- 20.532 --Foreign Securities 287.910 329.359 1.898.038 936.830

Borrowings 4.228.372 2.502.154 1.609.877 1.687.661

Domestic Borrowings - Official Institutions -- -- 30.125 --Foreign borrowings (Note 15) 4.228.372 2.502.154 1.579.752 1.687.661

(Note 16) 7.608.992 4.094.120 7.624.204 4.107.9444.033.454 2.970.071 4.033.454 2.970.0713.575.538 1.124.049 3.590.750 1.137.873

Foreign onlendings 2.285.620 2.242.996 382 381Foreign onlendings 2.285.620 2.242.996 382 381

Derivative financial instruments (Note 7b) 247.084 270.256 182.578 271.575Derivative financial instruments 247.084 270.256 182.578 271.575

Other liabilities 21.366.837 17.463.848 30.676.232 17.204.375Social and statutory -- -- 2.314 --Taxes and social security contributions -- -- 814.573 109.612 Negotiation and intermediation of securities 1.493.967 610.876 -- 3.406 Technical provisions - insurance, pension plan and capitalization (Note 19a) -- -- 8.931.597 --Financial and development funds (Note 18a) 1.933.619 1.787.252 1.933.619 1.787.252 Special operations 2.337 2.355 2.337 2.355 Subordinated debt (Note 18d) 11.231.550 9.834.011 11.231.550 9.828.522 Hybrid capital and debt instruments 957.046 933.257 957.046 932.366 Sundry (Note 18c) 5.748.318 4.296.097 6.803.196 4.540.862

DEFERRED INCOME 142.602 106.629 165.489 106.629Deferred income 142.602 106.629 165.489 106.629

STOCKHOLDERS' EQUITY (Note 21) 27.888.850 23.065.294 27.888.850 23.065.294

Capital 13.699.012 12.710.693 13.699.012 12.710.693Local residents 12.377.848 12.664.846 12.377.848 12.664.846 Foreign residents 1.321.164 45.847 1.321.164 45.847

Capital reserves 5.189 38 5.189 38

Revaluation reserves 7.370 6.314 7.370 6.314

Revenue reserves 12.749.556 8.932.907 12.749.556 8.932.907

Adjustment to market value - securities and derivat ive financial instruments -33.366 383.815 -33.366 383.815

Lucros ou Prejuízos Acumulados 1.461.089 1.031.527 1.461.089 1.031.527

Total 450.277.553 362.474.206 458.873.119 351.796.493

The accompanying notes are na integral part of these financial statements

National Bank for Economic and Social Development (BNDES) National Industrial Financing Authority (FINAME)

Local onlendings - official institutions

4

Financial StatementsIn thousands of reais

STATEMENT OF INCOME

3Q08 3Q07 3Q08 3Q07

INCOME FROM FINANCIAL INTERMEDIATION 15.045.280 10.333.230 15.475.867 10.460.419Loans 8.660.227 6.462.388 8.697.344 6.517.434 Leases 13.219 17.349 219.483 176.439 Securities 5.867.092 3.443.420 5.771.267 3.355.156 Derivative financial instruments -84.879 -149.212 -84.759 (149.248) Foreign exchange, net (Note 10b) -- 153.808 -- 155.161 Compulsory deposits 589.621 405.477 589.621 405.477 Insurance, pension plans and capitalization (Note 19e) -- -- 282.911

EXPENSES FROM FINANCIAL INTERMEDIATION -11.512.212 -6.525.277 -11.808.714 -6.610.092Deposits and funds obtained in the money market -7.075.407 (4.766.262) -7.068.325 (4.753.176) Borrowings and onlendings -3.014.898 (520.971) -2.973.479 (497.751) Leases -11.230 (13.120) -161.054 (127.032) Exchange Operations (Note 10b) -45.890 -- -49.864 --Insurance, pension plans and capitalization (Note 19e) -- -- -189.094 --Allowance for loan losses (Notes 8f and 8g) -1.364.787 (1.224.924) -1.366.898 (1.232.133)

GROSS FINANCIAL INTERMEDIATION INCOME 3.533.068 3.807.953 3.667.153 3.850.327

OTHER OPERATING INCOME/EXPENSES -1.444.454 -2.081.395 -1.448.569 -2.061.591Banking service fees (Note 20a) 1.722.105 2.266.405 2.259.370 2.498.268 Banking Fees (Note 20b) 673.392 -- 673.470 --Personnel expenses (Note 20c) -2.303.412 (2.431.092) -2.376.539 (2.448.948) Other administrative expenses (Note 20d) -1.952.349 (1.717.990) -2.068.763 (1.736.184) Tax Expenses -479.502 (489.094) -576.743 (512.884) Equity in the (earnings)/loss of subsidiary and associated companies (Note 24) 880.808 218.356 495.790 50.162 Insurance, pension plan and capitalization (Note 19e) -- -- 218.196 --Other operating income (Note 20e) 1.226.773 1.351.537 1.322.460 1.362.477 Other operating expenses (Note 20f) -1.212.269 (1.279.517) -1.395.810 (1.274.482)

OPERATING INCOME 2.088.614 1.726.558 2.218.584 1.788.736

NON-OPERATING INCOME (Note 20g) 15.897 34.492 104.979 42.677Income 37.554 48.516 168.939 56.907 Expenses -21.657 (14.024) -63.960 (14.230)

PROFIT BEFORE TAXATION AND PROFIT SHARING 2.104.511 1.761.050 2.323.563 1.831.413

INCOME TAX AND SOCIAL CONTRIBUTION ON NET INCOME (Note 22) 1.009 -222.891 -215.890 -292.592Income tax -479.092 (411.058) -643.668 (464.582) Social contribution on net income -324.984 (148.335) -400.582 (167.048) Deferred tax credits 805.085 336.502 828.360 339.038

PROFIT SHARING -238.563 -174.122 -240.716 -174.784

NET INCOME 1.866.957 1.364.037 1.866.957 1.364.037

Number of shares 2.565.255.836 2.475.949.269 2.565.255.836 2.475.949.269

Net income per share 0,73 0,55 0,73 0,55

The accompanying notes are an integral part of these financial statements



BB-ConsolidatedBB-Domestic and Foreign

Branches

5

Banco do Brasil S.A.Financial StatementsIn thousands of Reais

Capital Donations Legal Statutory Expansion RetainedRealized Incentivos Reserves Reserves Reserves Earnings Total

Fiscais

Balances at 06.30.2007 ............................ ..................................................................................................12.710.693 -- -- -- 6.390 1.219.724 3.156.720 4.768.706 176.366 266.820 -- -- 22.305.419Ajustments to market value - Securities and derivative financial instruments .............................................................................(Note 21h) -- -- -- -- -- -- -- -- -128.924 21.265 -- -- -107.659Tax effect on adjusments - Securities and derivative financial instruments......................................................................................(Note 21h) -- -- -- -- -- -- -- -- 47.763 525 -- -- 48.288Prescribed dividends....................................................................................................................................-- -- -- -- -- -- -- -- -- -- 782 -- 782Other eventsDonations................................................................................................................................................-- 38 -- -- -- -- -- -- -- -- -- -- 38Revaluations in subsidiary and associated companies..............................................................................................................................-- -- -- -- 4 -- -- -- -- -- -- -- 4Realization of revaluation reserves in subsidiary and associated companies ……………………………………………………………………..(Note 21d) -- -- -- -- -80 -- -- -- -- -- 80 -- --Net income for the period.......................... ...................................... -- -- -- -- -- -- -- -- -- -- 1.364.037 -- 1.364.037Apropriations Reserves.........................................................................................................................................................-- -- -- -- -- -- -- -- -- -- -- -- --Dividends ......................................................................................................................(Note 21f) -- -- -- -- -- -- -212.243 -- -- -- -- -- -212.243Interest on own capital …………………………………………………………………………………………………………………………………………………………………(Note 21f) -- -- -- -- -- -- -- -- -- -- -333.372 -- -333.372Balance at 09.30.2007 ............................. ..................................................................................................12.710.693 38 -- -- 6.314 1.219.724 2.944.477 4.768.706 95.205 288.610 1.031.527 -- 23.065.294Changes in the period -- 38 -- -- -76 -- -212.243 -- -81.161 21.790 1.031.527 -- 759.875Balance at 06.30.2008 ............................. .................................................................................................13.211.644 5.189 -- -- 5.760 1.548.351 6.773.352 4.768.706 -80.984 138.975 -- -- 26.370.993Increase on capital......................................................................................................................487.368 -- -- -- -- -- -- -- -- -- -- -- 487.368Adjustment to market value - Securities and derivative financial instruments………………………………………………………………………..(Note 21h) -- -- -- -- -- -- -- -- -21.072 -77.974 -- -- -99.046Tax effect on adjusments - Securities and derivative financial instruments......................................................................................(Note 21h) -- -- -- -- -- -- -- -- 7.028 661 -- -- 7.689Prescribed dividens…………………………………………………………. .......................................................-- -- -- -- -- -- -- -- -- -- 4 -- 4Other eventsReavaliations in subsidiaries and associated companies……………………………………………....................................................................-- -- -- -- 1.668 -- -- -- -- -- -- -- 1.668Realization of revaluation reseves in subsidiaries and associated companies………………………………………………………………...(Note 21d) -- -- -- -- -58 -- -- -- -- -- 58 -- --Net income for the period ......................... ................................................................................... -- -- -- -- -- -- -- -- -- -- 1.866.957 -- 1.866.957Apropriantions: Reserves……………………………………………………………………………………………………………………………………………………………………………………………….-- -- -- -- -- -- -- -- -- -- -- -- --Dividends…………………………………………………………………………………………………………………………………………………………………………………………..(Note 21f) -- -- -- -- -- -- -340.853 -- -- -- -- -- -340.853Interest on own capital …………………………………………………………………………………………………………………………………………………………………(Note 21f) -- -- -- -- -- -- -- -- -- -- -405.930 -- -405.930Balance at 09.30.2008 ............................. ...................................................................................................13.699.012 5.189 -- -- 7.370 1.548.351 6.432.499 4.768.706 -95.028 61.662 1.461.089 -- 27.888.850Changes in the period 487.368 -- -- -- 1.610 -- -340.853 -- -14.044 -77.313 1.461.089 -- 1.517.857

The accompanying notes are an integral part of these financial statements

Treasury sharesDerivatives

Subsidiary and associated companies

Capital Reserves

Earnings on treasury

shares sale

Goodwill or shares

subscription


E V E N T S

Revenue Reserves

Statement of Changes in Stockholders' Equity

Revaluation Reserves in

Subsidiary and Associated Companies

Bank

Ajustments to Market ValueMarketable Securities and

6

Banco do Brasil S.A.Financial StatementsIn thousands of Reais

STATEMENT OF CHANGES IN FINANCIAL POSITION

3Q08 3Q07 3Q08 3Q07

FINANCIAL RESOURCES WERE PROVIDED BY 50.193.614 15.130.638 52.908.473 11.466.946

Net Income 1.866.957 1.364.037 1.866.957 1.364.037

Adjustments to net income -502.266 -122.663 375.242 102.721Depreciation and amortization 206.289 191.326 347.761 295.516 Equity in the earnings (loss) of subsidiary and associated companies (880.808) (218.356) (495.790) (50.162) (Profit)/loss on the disposal of property (16.659) (14.009) (16.659) (14.009) (Profit)/loss on the disposal of investements - - 310 - (Profit)/loss on the sale of assets (2.090) (21.782) (53.123) (21.952) Capital (gain)/loss 1.731 (2.929) 1.815 4.090 Provision/(reversal) for devaluation of other assets 1.868 4.202 1.831 4.203 Changes in provision for Insurance, Pension Plans and Capitalization - - 527.851 - Other adjustments 187.403 (61.115) 61.246 (114.965)

Changes in the deferred income 12.977 6.672 1.841 6.672

Marked to Market - Securities and derivative financial instruments -91.357 -59.371 -91.357 -59.371

Own funds

Increase of capital with stocks 487.368 0 487.368 0

Third party funds

Increase in liabilities 48.408.198 13.150.990 50.237.631 9.634.756Deposits 33.801.900 8.736.766 34.594.152 7.634.734 Repurchase agreements - 88.974 - 126.583 Funds from acceptance and issue securities 108.253 335.772 638.762 129.636 Interbank and interdepartmental accounts - 401.739 - 410.848 Borrowing and onlendings 2.810.274 3.165.094 2.148.623 910.404 Derivative financial instruments 11.687.771 - 12.856.094 - Other Liabilities - 422.645 - 422.551

Decrease in current assets and long-term receivables 975 75 0 194.905Short-term iterbank investiments - - - 194.905 Lease operations 975 75 - -

Disposal of assets and investments 10.167 790.898 30.196 70.088Non-operating assets 5.206 26.198 5.258 39.300Property and equipament in use and lease assets 4.958 11.887 24.625 30.788Investments 3 752.813 313 0

Dividends and interest on own capital receivable from subsidiary/ associated co 594 0 594 153.138

FINANCIAL RESOURCES WERE USED FOR 49.113.877 15.489.849 51.815.792 11.825.228

Dividends and Bonuses Proposed 340.853 212.243 340.853 212.243

Interest on own capital proposed 405.930 333.372 405.930 333.372

Reversals in assets and investiments 192.410 854.070 1.559.601 295.799Non operating assets 12.183 5.680 12.183 5.702 Property and equipament in use and lease assets 180.227 89.126 876.293 277.883 Investments - 759.264 671.125 12.293 Adjustment to market value of subsidiaries - - - (79)

Deferred charges 21.015 38.622 21.015 38.615

Increase in current assets and long-term receivables 38.813.305 13.166.814 40.110.689 9.974.421Short-term interbank investments 18.398.815 3.805.892 16.808.297 - Securities 2.608.048 2.072.361 3.652.238 2.055.088 Interbank and interdepartamental accounts - 777.968 - 785.117 Loan operations 9.740.852 4.014.384 10.041.428 3.984.793 Lease operations - - 739 3.845 Other receivables 7.929.700 2.067.522 9.456.865 2.729.537 Other assets 135.890 428.687 151.122 416.041

Decrease in Liabilities 9.340.364 884.728 9.377.704 970.778 Repurchase agreements 7.759.420 - 7.757.439 - Interbank and interdepartmental accounts 995.352 - 1.033.685 - Other liabilities - 884.728 - 970.778 Derivative financial instruments 585.592 - 586.580 -

Decrease in cash and cash equivalents 1.079.736 -359.211 1.092.680 -358.282Change in cash and cash equivalentsAt the beginning of the period - June 312008 5.624.935 4.717.510 5.753.969 4.724.035 At the end of the period - September 30 2008 6.704.671 4.358.299 6.846.649 4.365.753 Increase in cash and cash equivalents 1.079.736 -359.211 1.092.680 -358.282

BB- Domestic and Foreign branches BB-Consolidated

7

Todoseu

EXPLANATORY NOTES

RESULTS

September/2008

NOTES DO THE FINANCIAL STATEMENTS Note 1 – The Bank and its Operations

Note 2 – Presentation of the Financial Statements

Note 3 – Amounts Incorporated

Note 4 – Main Accounting Practices

Note 5 – Cash and cash equivalents

Note 6 – Interbank Investments

Note 7 – Securities and Derivative Financial Instru ments

Note 8 – Loan Operations

Note 9 – Other Receivables

Note 10 – Foreign Exchange Portfolio

Note 11 – Other Assets

Note 12 – Property and Equipment and Leased Assets

Note 13 – Deposits

Note 14 – Money Market Borrowing

Note 15 – Borrowings - Foreign Borrowings

Note 16 – Domestic Onlending – Official Institution s

Note 17 – Funds Obtained in Foreign Capital Markets

Note 18 – Other liabilities

Note 19 – Operations related to the activities of i nsurance, pension and capitalization

Note 20 – Analysis of Income Statement Items

Note 21 – Stockholders' Equity

Note 22 – Income Tax and Social Contribution on Net Income

Note 23 – Tax Credits

Note 24 – Equity in the Earnings (Loss) of Subsidia ry and Associated Companies

Note 25 – Related-party Transactions

Note 26 –Basel Accord

Note 27– Retirement and Pension and Health Plans

Note 28 – Compensation Paid to Employees and Manage ment

Note 29 – Assignment of Employees to External Organ izations

Note 30 – Commitments, Responsibilities and Conting encies

Note 31 – Financial Instruments

Note 32 – Cash Flow Statement

Note 33 – Statement of Added Value

Note 34 – Other Information

Notes to the Financial Statements

2

1 – The Bank and its Operations Banco do Brasil S.A. is a publicly listed company established under private law, with both public and private stockholders, and subject to the requirements of Brazilian corporate legislation. Its purpose is to carry out all the asset, liability and accessory banking operations, to provide banking services, intermediate and originate financial transactions in various forms, including in foreign exchange transactions and in supplementary activities, with an emphasis on insurance, private pension, capitalization, securities brokerage, administration of credit/debit cards, consortiums, investment funds and management portfolios, and the practice of any activities permitted to the institutions that are part of the National Finance System. It is also the main financial agent of the Brazilian Federal Government and is therefore required to carry out the functions attributed to it by law, specifically those of Art. 19 of Law 4595/1964.


3

2 – Presentation of the Financial Statements The Financial Statements have been prepared in accordance with the accounting guidelines derived from Brazilian corporation law (see Note 34.n), and observing the rules and instructions issued by the Brazilian Central Bank (BACEN), Brazilian Securities Commission (CVM), National Council of Private Insurance (CNSP), Superintendency of Private Insurance (Susep), and National Health Care Agency (ANS). They include operations of Banco do Brasil S.A. in Brazil and abroad (BB-Domestic and Foreign Branches), and the consolidated position of branches and financial and non-financial subsidiaries in Brazil and abroad, the foreign special purpose entities, as well as investments in subsidiary and associated companies, in accordance with Bacen recommendation (BB-Consolidated). Their values are expressed in thousands of Brazilian Reais, unless as indicated otherwise. For comparative purposes of the financial statements, reclassifications of 3Q07, which are related to the full offsetting of accumulated tax loss carry forwards of Income Tax and Social Contribution negative basis (Note 22c), were carried out in order to adjust to the accounting procedures/classifications adopted in 1Q08, which resulted from the application of Resolution CMN 3535 of January 31, 2008. The procedure results in a balance increase in Debtors for Escrows (Note 9.b) and in Other Tax and Social Security Liabilities (Note 30c) in the amount of R$ 9,398,397 thousand. The preparation of financial statements in accordance with accounting practices adopted in Brazil requires that Management use discernment in the determination and recording of accounting estimates, when applicable. Significant assets and liabilities subject to these estimates and assumptions include the residual value of property, plant and equipment, allowance for loan losses and deferred income tax recorded in assets, provision for contingencies, appreciation of derivative financial instruments, and assets and liabilities relating to benefits for employees. The final amounts of transactions involving these estimates are only known upon their settlement. The balances of foreign branches and subsidiaries included in the financial statements of BB are as follows: Foreign branches Foreign Branches and Subsidiaries

09.30.2008 09.30.2007 09.30.2008 09.30.2007Current assets 23,571,865 28,423,540 23,702,375 27,312,263

Long-term receivables 14,382,559 11,417,646 14,856,257 12,135,930

Permanent assets 76,207 95,007 93,447 98,660Total assets 38,030,631 39,936,193 38,652,079 39,546,853

Current liabilities 25,940,930 30,944,225 25,590,718 29,688,547

Long-term liabilities 9,317,945 6,413,648 9,470,186 6,529,048

Deferred income 5,528 4,641 5,528 4,641

Stockholders' equity 2,766,228 2,573,679 3,585,647 3,324,617Total liabilities 38,030,631 39,936,193 38,652,079 39,546,853

Net income for the Quarter 29,026 90,923 38,427 106,795

The asset and liability and the income and expense accounts recording transactions between the foreign branches, consolidated companies and Banco do Brasil S.A. were eliminated on consolidation. The consolidated financial statements include the branches and subsidiaries in the country and abroad, and the direct and indirect subsidiaries and affiliates listed below:

Total Share

09.30.2008 09.30.2007


4

Financial Activity – Domestic Activity BB Gestão de Recursos - Distribuidora de Títulos e Valores Mobiliários S.A. (8) Asset Management 100% 100%

BB Banco de Investimento S.A. (8) Investment Bank 100% 100%

BB Banco Popular do Brasil S.A. (8) Banking 100% 100%

BB Leasing S.A. - Arrendamento Mercantil (7) Leasing 100% 100%

BESC Distribuidora de Títulos e Valores Mobiliários S.A. (1) (8) Asset Management 99.62% --

BESC Financeira S.A. - Crédito, Financiamento e Investimentos (1) (8) Crédit and Financing 99.58% --

BESC Leasing S.A. - Arrendamento Mercantil (1) (8) Leasing 99% --

Financial Activity – Abroad Banco do Brasil – AG. Viena (8) Banking 100% 100%

BB Leasing Company Ltd. (8) Leasing 100% 100%

BB Securities LLc. (8) Broker 100% 100%

BB Securities Ltd. (8) Broker 100% 100%

Brasilian American Merchant Bank – BAMB (8) Banking 100% 100%

Insurance, Pension Plan and Capitalization Cia. de Seguros Aliança do Brasil (2) (7) Insurance company 100% 70.00%

Brasilveículos Companhia de Seguros (2) (7) Insurance company 70.00% 70.00%

Brasilcap Capitalizações S.A. (2) (7) Capitalization 49.99% 49.99%

Brasilprev Seguros e Previdência S.A. (2) (7) Insurance

Company/Pension 49.99% 49.99%

Brasilsaúde Companhia de Seguros (2) (7) Insurance Company/Health

49.92% 49.92%

Seguradora Brasileira de Crédito à Exportação – SBCE (2) (7) Insurance company 12.09% 12.09%

Other activities Ativos S.A. (3) (7) Credit Acquisition 100% 100%

BB Administradora de Cartões de Crédito S.A. (3) (7) Service Rendering 100% 100%

BB Administradora de Consórcios S.A. (3) (7) Consortiums 100% 100%

BB Corretora de Seguros e Administradora de Bens S.A. (3) (7) Broker 100% 100%

BB Tur Viagens e Turismo Ltda. (3) (6) Tourism 100% 100%

BB Money Transfers, Inc (4) (8) Service Rendering 100% --

BB USA Holding Company, Inc (4) (8) Holding 100%

--

Cobra Tecnologia S.A. (3) (6) IT 99.39% 99.39%

Cia. Brasileira de Soluções e Serviços CBSS – Visavale (2) (7) Service Rendering 40.35% 40.35%

Cia. Brasileira de Meios de Pagamento CBMP – Visanet (2) (8) Service Rendering 31.63% 32.03%

Kepler Weber S.A. (2) (7) Industry 17.67% 24.40%

Neoenergia S.A. (2) (7) Energy 11.99% 11.99%

Companhia Brasileira de Securitização – Cibrasec (2) (7) Credit Acquisition 9.09% 9.09%

Tecnologia Bancária S.A. – Tecban (2) (7) Service Rendering 8.96% 8.96%

Dollar Diversified Payment Rights Finance Company (5) (8) Credit Acquistion -- -- (1) Companies controled by Besc S.A. - incorporated by Banco do Brasil as of 09.30.2008 (Note 3). (2) Affiliated companies, included on pro rata basis in consolidation, as recommended by Bacen, according to the provisions of paragraph 2, Article 22 of Law 6385/1976, amended by Law Lei 9,447/1997, with working of Decree 3995/2001. (3) Fully-owned subsidiaries of Banco do Brasil S.A. included in consolidation from the first quarter of 2008. The non consolidation was supported by an authorization granted by the Brazilian Securities and Commission Exchange (CVM). (4) Companies authorized to operate by Bacen in November 2007 and with operating movement from March/2008. (5) Special Purpose Entity. (6) Data for consolidation related to July/2008. (7) Data for consolidation related to August/ 2008. (8) Data for consolidation related to September/2008.

The company Brasil Aconselhamento Financeiro S.A. - BAF was not included in consolidation, according to the provisions of Article 23 of CVM Instruction 247, of March 27, 1996, because it is under winding up process. We present below, for comparative purposes, the consolidated balances encompassing the Financial Conglomerate (branches and financial subsidiaries in the country and abroad) and the Non-Financial Subsidiaries/Associated Companies presented in the financial statements of the Bank.


5

Balance Sheet

Financial Non-Financial Consolidated

09.30.2008 09.30.2007 09.30.2008 09.30.2007 09.30.2008 09.30.2007

Current Assets and Long-Term Receivables 435,318,844 345,884,407 16,192,593 12,516,705 450,655,724 357,855,960

Cash and cash equivalents 6,711,629 4,365,753 160,210 164,572 6,846,649 4,484,135

Short-term interbank deposits 71,068,604 51,419,078 284,917 210,886 71,091,681 51,420,855

Securities 72,944,259 74,125,650 13,063,933 10,167,656 85,953,522 84,129,762

Other receivables 284,594,352 215,973,926 2,683,533 1,973,591 286,763,872 217,821,208

Permanent Assets 9,383,214 5,912,086 1,013,138 1,143,143 8,217,395 5,182,696

Investments 2,934,607 1,276,046 833,835 953,611 1,589,484 357,124

Property and equipment 5,849,358 4,086,418 126,835 127,842 5,976,194 4,214,260

Deferred charges 599,249 549,622 52,468 61,690 651,717 611,312

Total Assets 444,702,058 351,796,493 17,205,731 13,659,848 458,873,119 363,038,656

Current and Long-Term Liabilities 416,670,606 328,624,570 14,898,133 11,755,595 430,818,780 339,835,013

Borrowings and onlendings 24,505,779 19,509,009 203,870 305,171 24,648,701 19,810,182

Other liabilities 392,164,827 309,115,561 14,694,263 11,450,424 406,170,079 320,024,831

Deferred income 142,602 106,629 22,888 31,720 165,489 138,349

Stockholders' equity 27,888,850 23,065,294 2,284,710 1,872,533 27,888,850 23,065,294

Total Liabilities 444,702,058 351,796,493 17,205,731 13,659,848 458,873,119 363,038,656

Income Statement

Financial Non-Financial Consolidated

3Q/08 3Q/07 3Q/08 3Q/07 3Q/08 3Q/07

Income from Financial Intermediation 15,176,687 10,460,419 304,066 221,329 15,475,867 10,670,398

Expenses from Financial Intermediation (11,597,237) (6,610,092) (188,510) (140,558) (11,808,714) (6,745,342)

Gross Financial Intermediation Income 3,579,450 3,850,327 115,556 80,771 3,667,153 3,925,056

Other Operating Income / Expenses (1,405,931) (2,061,591) 193,981 115,001 (1,448,569) (2,110,949)

Non-operating income 2,173,519 1,788,736 309,537 195,772 2,218,584 1,814,107

Non-operating income, net 15,705 42,677 89,274 51,791 104,979 94,468

Income before taxes 2,189,224 1,831,413 398,811 247,563 2,323,563 1,908,575

Interest on Own Capital Tax Benefit (82,879) (292,592) (133,011) (76,450) (215,890) (369,042)

Profit Sharing (239,388) (174,784) (1,327) (712) (240,716) (175,496)

Net Income 1,866,957 1,364,037 264,473 170,401 1,866,957 1,364,037


6

3 – Amounts Incorporated The amounts of Besc S.A (Consolidated) and of Bescri S.A. - Crédito Imobiliário (Bescri), incorporated by Banco do Brasil as of 9.30.2008, are shown below: Besc Bescri ASSETS Current Assets

3,638,920 1,706,171 Available Funds

74,526 1,040,202 Short-term interbank investments 85,607 -- Securities and derivative financial instruments 1,406,123 154,997 Interbank accounts 1,511,913 486,887 Interdepartmental accounts 205 -- Loan operations 388,922 12,702 Other receivables 164,650 8,770 Other assets 6,974 2,613 Long-Term Receivables 261,115 921,519 Securities and derivative financial instruments -- 863,593 Interbank accounts -- 10,469 Loan operations 246,902 47,180 Other receivables 14,213 277 Permanent Assets 96,176 252 Investments 53,604 3 Land and buildings in use 23,565 249 Deferred 19,007 -- Total 3,996,211 2,627,942 Liabilities Current Liabilities 3,021,000 2,365,286 Deposits 2,012,220 2,347,379 Interbank accounts 55,217 -- Interdepartmental accounts 2,472 -- Local onlendings - official institutions 38,699 -- Other liabilities 912,392 17,907 Long-Term Liabilities 744,658 1,261 Deposits 642,081 -- Local onlendings - official institutions 720 -- Other liabilities 101,857 1,261 Stockholders’ Equity (1) 230,553 261,395 Capital 1,319,051 367,380 Capital reserves 197 -- Revaluation reserves 1,669 -- Adjustment to market value 517 -- Accumulated losses

(1,090,881) (105,985) Total 3,996,211 2,627,942

Total - Besc’s Stockholders’ Equity Incorporated (1) 487.368

(1) The following figures were not considered during the merger: a) In BESC S.A.: the revaluation reserve of the associated company Cia. Hidromineral Piratuba – R$ 1,669 thousand, and the adjustment to the fair market price of securities - R$ 517 thousand and; b) in Bescri S.A. – Crédito Imobiliário: the portion of Shareholders’ Equity – R$ 2,394 thousand regarding the equity interest by Besc S.A. The shareholding positions of Besc S.A. are as follows: Besc Financeira S.A. – Crédito, Financiamento e Investimentos – Bescredi Subsidiary 99,58% Besc S.A. Arrendamento Mercantil – Besc Leasing Subsidiary 99,00% Besc Distribuidora de Títulos e Valores Mobiliários S.A. - Bescval Subsidiary 99,62% Besc S.A. Crédito Imobiliário – Bescri Affiliated Co 0,92% Cia. Hidromineral Piratuba Associated Co 16,19% Santa Catarina Seguros e Previdência S.A. Associated Co 32,81% Cia. Catarinense de Assessoria e Serviços - CCA Associated Co 48,13%


7

On September 30, 2007 the Besc consolidated figures comprised R$ 5,139,288 thousand in Assets and R$ 201,772 thousand in Shareholders’ Equity. Net profit for 3rd quarter 2007 was R$ 8,724 thousand. The capital increase in Banco do Brasil in the amount of R$ 487,368 thousand was approved in the Extraordinary Meeting held on 09.30.08. The capital will climb from R$ 13,211,644 thousand to R$ 13,699,012 thousand, after ratification by the Central Bank. The increase results from the conversion of the shareholders' equity of Besc and of Bescri to Banco do Brasil. Said assets were valued at the book value. The capital increase resulted in the issue of 23,074,306 common shares with no par value, by Banco do Brasil, with the rights and advantages contained in its By-laws. Due to the merger, Banco do Brasil is the successor of Besc and of Bescri, as regards all their assets, rights and obligations. As a natural outcome, Besc and Bescri had their separate legal entities discontinued pleno jure. In compliance with art. 264 of Law 6,404/1976, Banco do Brasil was also valued by the economic/financial value, determined by the discounted cash flow method, on the basis of art. 224 of Law 6,404/1976. The valuation concluded that, at the economic value, the shareholders of Bescri will receive 1 share for every 2,403.275850 shares, while the shareholders of Besc, of the three classes of shares, will receive 1 share for every 18.31304592 shares. For the purpose of transfer of assets, art. 224, III, of Law 6,404/1976, of Besc and of Bescri to Banco do Brasil and calculation of the equity value of the stock, art. 264, §3 and art. 45, §2, of the same Law, of Besc and of Bescri, as an alterative amount of reimbursement to their minority shareholders, 6.30.2008 was defined as the base date. The right to withdrawal of the shareholders of Besc and of Bescri does not apply to shares acquired after September 11, 2008, as provided for by art. 137, § 1 of Law 6,404/1976. To the dissident shareholders, the reimbursement alternative is that determined by the economic values of R$ 2.44675527 per share of Besc and R$ 0.01864436 per share of Bescri, as the equity value per share of these companies recorded R$ 1.26778943 and R$ 0.01528994, respectively, on June 30, 2008.


8

4 – Main Accounting Practices a) Determination of Results Income and expenses are recognized on an accrual basis. Transactions with post-fixed financial charges are recorded at the restated value, calculated pro-rata-die based on the variations in the agreed contractual indices, and the transactions with fixed financial charges are recorded at future value, adjusted to reflect unearned income or unexpired expenses. Transactions pegged to foreign currencies are restated up to the balance sheet date using current exchange rates. b) Short-term interbank investments Short-term interbank investments are recorded at investment value or purchase price, plus income accrued up to the balance sheet date. c) Securities The securities purchased for the Bank's portfolio are recorded at the actual amount paid, including brokerage charges and fees, and are classified based on the intention of management, in three different categories: Trading Securities: these are securities purchased to be actively and frequently traded. They are adjusted monthly to market value. Their increases and decreases in value are recorded in income and expense accounts for the period; Securities available for sale: these are securities purchased to be traded, which can be traded at any time. They are adjusted monthly to market value. The increases and decreases in value are recorded, net of tax effects, in a separate stockholders' equity account; Securities held to maturity these are securities that the Bank intends and has the financial capacity to hold to maturity. The financial capacity is supported by a cash flow projection that does not consider the possibility of sale of these securities. These securities are not adjusted to market value but are held at cost plus accumulated interest. The mark-to-market methodology used for securities was established following consistent and verifiable criteria, which consider the average price of trading on the day of calculation or, if not available, the daily adjustment of future market transactions reported by Andima, BM&F, Bovespa or Bacen or the net expected realizable value obtained through the use of curves of future interest rates, foreign exchange rates, price and currency indices. Income accrued on the securities, irrespective of the category in which they are classified, is appropriated on a pro-rata-die basis on the accrual basis of accounting up to the date of maturity or of final sale, on an exponential or straight-line method, based on the contractual remuneration and purchase price, and recorded directly in income for the period. Losses with securities classified as available for sale and held to maturity, if judged not to be temporary, are recorded directly in expense for the period and a new cost basis for the asset is determined. Upon sale, the difference between the sale amount and the cost of purchase plus accrued income is is recorded on the date of the transaction as a gain or loss on securities. d) Derivative Financial Instruments Derivative financial instruments are recorded at market value at each monthly trial balance and balance sheet date. Increases or decreases in value are recorded in income or expense accounts of the respective financial instruments. The mark-to-market methodology used for derivative financial instruments was established following consistent and verifiable criteria, which consider the average price of trading on the date of calculation or, if not available, pricing models that estimate the expected net realizable value, according to the characteristics of the derivative.


9

Derivative financial instruments used to offset, in whole or in part, the risks arising from exposure to variations in financial asset or liability market values or future cash flows are considered hedge instruments and are classified according to their nature: Market Risk Hedge – the increases or decreases in the value of the derivative financial instruments, as well as of the item hedged, are recorded in income accounts for the period; Cash Flow Hedge - the effective amount of the increases or decreases in the value of the derivative financial instruments classified in this category are recorded, net of tax effects, in a separate Stockholders' Equity account. The effective amount is that in which the variation of the item hedged, directly related to the corresponding risk, is offset by the variation in the derivative financial instrument used as the hedge, considering the accumulated effect of the transaction. Other variations in these instruments are recorded directly in income for the period. e) Loan and lease operations, advances on foreign e xchange contracts, Other receivables with loan characteristics and allowance for possible loan los ses Loan operations, advances on foreign exchange contracts, other receivables with loan characteristics and allowance for possible loan losses are classified according to Management's judgment with respect to the level of risk, taking into consideration the economic panorama, past experience and specific risks in relation to the operation, to obligators and guarantors, observing the parameters established by CMN Resolution n.º 2682/1999, which requires the periodic analysis of the portfolio and its rating using nine levels, ranging from AA (minimum risk) to H (maximum risk), as well as the rating of operations more than 15 days overdue as ‘abnormal operations’. Income from loans overdue for more than 60 days, regardless of their level of risk, will only be recognized as income when effectively received. Operations rated at level H continue in this status for 180 days, at which point they are written off against the existing provision and monitored, for five years, in off-balance sheet accounts. Renegotiated operations are maintained, at a minimum, at the same level at which they were rated. The renegotiations of loans that had already been written off against provision that that were in memorandum accounts are rated as H and any gains from the renegotiation are only recognized as income when effectively received. Allowance for possible loan losses is considered sufficient by management to cover future losses from the current portfolio and satisfies the minimum requirement established by the aforementioned CMN Resolution nº 2682/1999, as shown in Note 8.e. f) Prepaid Expenses Refer to the application of funds in prepayments, which will give rise to benefits or the rendering of services in subsequent periods. g) Permanent assets Significant investments in Brazil and abroad are recognized using the equity method of accounting, in conformity with BACEN and CVM rules and instructions, and are classified in the investment account in permanent assets. The statements of the overseas branches and subsidiaries are adapted to accounting criteria in force in Brazil and translated into Brazilian Reais using current exchange rates, in conformity with Bacen Circulars n.º 2937, of 12.29.1993 and 2,571, of 05.17.1995, and their impacts are recorded in income for the period. Other permanent investments are stated at cost, restated for inflation up to December 31, 1995, and, if necessary, are adjusted to market value through the formation of provision, according to the current rules.


10

Property and equipment is stated at cost less depreciation calculated using the straight-line method at the following annual rates: buildings and improvements - 4%; vehicles - 20%; others - 10% (see Note 12); Deferred assets are recorded at acquisition cost, net of accrued amortizations. It is composed mainly of expenditures in third-party property as a result of opening facilities, which are amortized according to rates based on rental terms, and expenditures on the acquisition and development of information systems, which are amortized at a 20% annual rate. h) Benefits for employees Short-term benefits for existing employees are recognized on the accrual basis as the services are provided. Post-employment benefits, comprising supplementary retirement benefits, medical assistance and other benefits for which the Bank is responsible, were calculated at December 31, 2007 in accordance with criteria established by CVM Deliberation 371 of 12.13.2000 (Note 27.b). i) Income and Social Contribution Taxes Corporate income tax is calculated at the basic rate of 15% plus a surcharge of 10%. As of May 1, 2008, Social Contribution is being calculated using the rate of 15% for financial companies and companies from the insurance business and 9% for other companies (up to April 30, 2008 at the rate of 9% for all of the companies). Tax credits are created by applying the current tax rates to the difference between their respective fiscal and accounting bases. The Bank follows the criteria for creating, maintaining, and writing off these tax credits as specified by CMN Resolution no. 3,059 dated December 20, 2002, and amended by CMN Resolution no. 3,355 dated March, 31, 2006, and tax credits recognized are supported by a realization study. The tax credits resulting from the increase of the rate of Social Contribution from 9% to 15% are being recognized in a only to the extent that the amounts are sufficient to counter the effect of the result arising from the increase of the rate (6%) on CSLL tax liabilities (current and deferred) see note 23.a and 23.b. The Bank records IRPJ, CSLL, Pasep and Cofins tax credits on the negative mark-to-market adjustments of securities and derivative financial instruments recorded in the income and in a separate account in Stockholders' equity. IRPJ, CSLL, Pasep and Cofins deferred tax liabilities have been recorded on the positive mark-to-market adjustments of securities and derivative financial instruments recorded in income and in a separate account in Stockholders' Equity. j) Operations related to the activities of insuranc e, pension and capitalization Determination of Results Insurance premiums and selling expenses are recorded upon the issuance of policies or billings and are recognized in results, according to the elapsed coverage period. Insurance revenue and the corresponding selling expenses, related to current risks without the issuing of respective policies are recognized in results at the beginning of the coverage, on estimated basis. Income from insurance premiums covering future risks is deferred over the period of validity of the insurance policies, by means of the formation of provision for unearned premiums, based on the net retention of earned premiums issued. Operations of accepted coinsurance, retrocession and DPVAT are recorded based on information received from similar companies, IRB Brasil Resseguros S.A. and the lead insurer, respectively. The revenue from pension plans, life insurance with living benefits and capitalization plans are recognized in results when effectively received, as a contra-entry to the recognition of technical provisions. The selling costs are deferred upon the issuance of the contract or policy and allocated to results on a straight-line basis, over the average estimated period for recovery. Other income and expenses are determined using the accrual basis of accounting.


11

Technical Provisions

Rules and procedures for the formation of technical provisions are regulated by Resolutions 36/2000, 162/2006, and 181/2007 of the National Council of Private Insurance - CNSP and Resolution 75/2004 of National Health Care Agency (ANS), and calculated in accordance with the specific actuarial technical notes approved by the Superintendency of Private Insurance - Susep and National Health Care Agency - ANS. Insurance Provision for Unearned Premiums (PPNG) represents the portions of premiums that will be allocated to income over the course of the insurance contracting periods, as calculated by the pro rata method. Provision for Unearned Premiums of Risks Effective Yet Not Issued (PPNG-RVNE) represents the adjustment of PPNG given the existence of risks assumed by the insurance company the policy covering which has not yet been formally issued. Provision for Premium Insufficiency (PIP) represents the need for adaptation of premiums to be allocated due to the expectation of claims with provision for probable payments. Provision for Unsettled Claims (PSL) represents the forecast of probable indemnifications, whether judicial or not, net of recoveries, determined based on notices received up to the balance sheet date, adjusted by the estimate of claims Incurred But Not Reported (IBNR). Provision for Claims Incurred but Not Reported (IBNR) represents the expected claims, referring to the accounting period under analysis, which will be received by the insurance company. The objective of the Supplementary Provision for Premiums (PCP) is to adjust the technical provisions of PPNG premium and PPNG-RVNE, to give the Bank an additional margin of protection, at the time of calculation, with a sum higher than or equal to the average amount determined daily. It is classified under "Other Provisions". The abovementioned provisions, with the exception of Provision for Unearned Premiums (PPNG) and Provision for Insufficiency of Premiums (PIP), are estimated according to methodologies described in specific Actuarial Technical Notes, submitted to the approval of ANS and Susep. Pension The mathematical reserves related to pension plans represent the current amount of the liabilities in the form of survivorship income, pension and annuity, determined through calculation and actuarial assumptions in the financial regimes of capitalization, allocation of hedge capital and simple allocation, respectively. Particularly for the pension and insurance plans from the categories of PGBL and VGBL, the mathematical provision for future benefit payments represents the sum of premiums and contributions transferred by the participants, net of the loading rate, plus the financial income earned from the investments of resources. The provisions for shortfall of contributions and of premiums are formed to account for the impacts resulting from the tendency for a higher survival rate of participants and their calculation is performed using the "AT 2000 Male/Female Suavizada" mortality table and related assumptions, considering all the plans sold. The provision for financial fluctuation is formed to account for the potential impacts of unfavorable variations in the future re-investment rates of funds earmarked for the payment of benefits and redemptions to participants, considering the minimum remuneration guaranteed in a contract. Capitalization The mathematical reserve for redemption is calculated on the nominal value of the securities, restated based on actuarial technical notes approved by Susep. Provisions for redemption of overdue and prepaid securities are formed by securities with finalized and rescinded capitalization periods, restated in the period between the date of the right to redemption and effective settlement.


12

The amounts earmarked for the formation of the provision for unrealized prize draws are calculated on the nominal value of the securities, based on actuarial technical notes approved by SUSEP, and the write-off of the provision for unrealized prize draws recorded by the amount equivalent to the lapsed risk, i.e., the balance of provision for unrealized prize draws represents the defrayed amounts of prize draws not yet executed. Provision for prize draws payable is formed by the amounts of securities payable from prize draws, restated for the period between the date of the draw and the effective settlement. k) Contingent Assets and Liabilities and Legal Obli gations The recognition and disclosure of contingent assets, liability contingencies and legal obligations are in accordance with the criteria defined in CVM Resolution n.º 3,535, of 01.31.2008. Note 30.a). Contingent assets are only recognized in the financial statements upon the existence of evidence guaranteeing their realization. Contingent liabilities are recognized in the financial statements when, based on the opinion of the legal counsel and of Management, the risk of loss of a lawsuit or administrative proceeding is considered probable, with a probable outflow of financial resources for the settlement of obligations and when the sums involved are measurable with sufficient assurance. The provisions for labor claims are recorded considering, also, the jurisprudence applicable to each claim. Contingent liabilities considered as possible losses are not recognized in the balance sheet, but must be disclosed only in the explanatory notes, while those stated as remote do not require provisioning or disclosure. Legal obligations (fiscal and social security) are derived from tax obligations arising from legislation, and, regardless of the probability of success of lawsuits in progress, have their amounts recognized in full in the financial statements. l) Deferred income Refers to revenues already received that should effectively be recognized in results in future years, less the corresponding costs or expenses, which will not be returned by the company under any circumstance.


13

5 – Cash and cash equivalents BB - Domestic and

Foreign branches BB-Consolidated

09.30.2008 09.30.2007 09.30.2008 09.30.2007

Local currency 4,848,675 3,797,523 4,984,380 3,798,366

Foreign currency 1,855,996 560,775 1,854,125 561,752

Gold -- 1 8,144 5,635

Total 6,704,671 4,358,299 6,846,649 4,365,753


14

6 – Interbank Investments a) Breakdown

BB - Domestic and Foreign branches BB-Consolidated

09.30.2008 09.30.2007 09.30.2008 09.30.2007

Repurchase agreements 61,615,587 43,004,385 61,637,301 42,938,209

Sales pending settlement – own operations 9,043,500 2,282,326 9,065,214 2,290,130 , Financial Treasury Bills 5,361,190 -- 5,378,382 --

Federal Treasury Bills 1,299,999 1,045,898 1,299,999 1,045,898

Federal Treasury Notes 2,188,473 13,226 2,188,473 13,226

Others -- -- 4,330 --

Others - Abroad 193,838 1,223,202 194,030 1,231,006

Sales pending settlement - financed operations 52,572,087 38,022,059 52,572,087 37,948,079

Financial Treasury Bills 39,173,563 1,197,543 39,173,563 1,197,543

Federal Treasury Bills 2,027,485 33,114,265 2,027,485 33,114,265

Federal Treasury Notes 11,365,949 3,607,103 11,365,949 3,607,103

Others 5,090 103,148 5,090 29,168

Resales pending settlement – clearing and settlement house -- 2,700,000 -- 2,700,000

Interbank deposits Investments 20,121,240 21,622,913 9,454,380 8,480,869

Investments in national currency 17,486,566 18,864,250 6,819,705 8,480,869

Investments in foreign currency 2,634,674 2,758,663 2,634,675 --

Total 81,736,827 64,627,298 71,091,681 51,419,078

b) Income from short-term interbank deposits


09.30.2008 09.30.2007 09.30.2008 09.30.2007

Income from repurchase agreements 1,769,210 1,331,395 1,768,599 1,330,464

Own operations 79,130 238,984 79,130 238,984

Financed operations 1,690,080 1,092,411 1,689,469 1,091,480

Income from interbank deposits 242,007 240,453 105,598 131,779

Total 2,011,217 1,571,848 1,874,197 1,462,243


15

7 – Securities and Derivative Financial Instruments a) Securities

BB – Domestic and Foreign branches 09.30.2008 09.30.2007

Market Value Total Total

Maturity in days With no maturity

0-30

31-180

181-360

over 360

Cost

Market Value

Unrealized gain (loss)

Cost

Market Value


1 - Trading securities 2,000 2,654,036 1,026,119 1,921,553 12,599,211 18,326,267 18,202,919 -- 13,658,299 13,662,204 -- Domestic 2,000 2,654,036 1,026,119 1,921,553 12,599,211 18,326,267 18,202,919 -- 13,658,299 13,662,204 -- Financial Treasury Bills -- 6,040 384,286 2,532 2,976,428 3,369,380 3,369,286 -- 2,476,213 2,476,780 -- Federal Treasury Bills -- 2,647,996 641,833 1,918,404 3,498,367 8,755,139 8,706,600 -- 9,479,505 9,481,676 -- Federal Treasury Notes -- -- -- -- 6,076,348 6,150,759 6,076,348 -- 1,695,676 1,696,825 -- Debentures -- -- -- 617 48,068 48,905 48,685 -- 4,691 4,688 -- Shares in listed companies 2,000 -- -- -- -- 2,084 2,000 -- 2,214 2,235 -- 2 - Securities available for sale 24,321 2,039,174 6,080,098 7,551,761 20,530,990 36,324,364 36,226,344 (98,020) 36,715,301 37,023,184 307,883 Domestic 24,321 676,400 5,450,272 7,362,485 18,759,795 32,425,315 32,273,273 (152,042) 35,157,497 35,309,048 151,551 Financial Treasury Bills -- 1,619 3,259,458 2,972,485 14,504,438 20,712,931 20,738,000 25,069 21,138,530 21,194,297 55,767 Federal Treasury Bills -- 496,378 1,115,496 1,733,981 207,521 3,603,178 3,553,376 (49,802) 5,483,751 5,504,232 20,481 Federal Treasury Notes -- -- -- 648,414 3,406,111 4,180,426 4,054,525 (125,901) 6,107,456 6,169,391 61,935 Federal Government securities – other -- -- -- -- -- -- -- -- 1,415,678 1,418,790 3,112 Debentures -- -- -- -- 557,840 579,293 557,840 (21,453) 167,767 166,387 (1,380) Agricultural debt securities -- 162 717 391 9,184 12,585 10,454 (2,131) 9,474 8,262 (1,212) Shares in investment funds 413 -- -- -- -- 413 413 -- 4,149 4,149 -- Shares in social development funds 494 -- -- -- -- 2,078 494 (1,584) 1,545 867 (678) Shares in listed companies 23,414 -- -- -- -- 7,364 23,414 16,050 7,364 18,650 11,286 Rural Product Bills (Commodities) -- 72,234 295,515 100,764 1,959 470,963 470,472 (491) 551,437 553,426 1,989 Others -- 106,007 779,086 1,906,450 72,742 2,856,084 2,864,285 8,201 270,346 270,597 251 Abroad -- 1,362,774 629,826 189,276 1,771,195 3,899,049 3,953,071 54,023 1,557,804 1,714,136 156,332 Brazilian foreign debt securities -- -- -- -- 1,770,648 1,719,449 1,770,648 51,199 1,515,145 1,671,321 156,176 Foreign government securities -- 1,151,783 629,826 189,276 547 1,968,610 1,971,432 2,822 42,659 42,814 155 Shares in investment funds -- 1 -- -- -- -- 1 1 -- 1 1 Others -- 210,990 -- -- -- 210,990 210,990 -- -- -- --

-- 3 - Securities held to maturity -- 16,179 2,035,378 35,679 14,217,237 16,288,250 16,304,473 -- 20,025,756 20,027,133 -- Domestic -- 1,578 2,022,398 35,679 14,061,378 16,120,390 16,121,033 -- 19,628,952 19,608,640 -- Financial Treasury Bills -- 1,578 1,916,114 9,472 14,045,677 15,967,172 15,972,841 -- 16,852,726 16,853,600 -- Federal Treasury Notes -- -- -- 26,207 15,701 46,368 41,908 -- 2,775,828 2,754,643 -- Federal Government securities – other -- -- 106,284 -- -- 106,850 106,284 -- -- -- -- Commodities -- -- -- -- -- -- -- -- 398 397 -- Abroad -- 14,601 12,980 -- 155,859 167,860 183,440 -- 396,804 418,493 -- Eurobonds -- -- -- -- -- -- -- -- 13,219 13,217 -- Brazilian foreign debt securities -- -- -- -- 155,859 140,279 155,859 -- 365,577 387,268 -- Foreign government securities -- 14,601 12,980 -- -- 27,581 27,581 -- 18,008 18,008 -- Total 26,321 4,709,389 9,141,595 9,508,993 47,347,438 70,938,881 70,733,736 (98,020) 70,399,356 70,712,521 307,883

09.30.2008 09.30.2007

Market Valu e Total Total


0-30

31-180

181-360

over 360

Cost

Market Value


Cost

Market Value


Total by portfolio 26,321 4,709,389 9,141,595 9,508,993 47,347,438 70,938,881 70,733,736 (98,019) 70,399,356 70,712,521 307,883 Own portfolio 26,321 4,708,102 3,104,736 3,915,610 18,077,489 30,088,876 29,832,258 (131,386) 33,404,184 33,512,926 115,931 Subject to repurchase agreements -- 1,287 5,861,855 4,337,535 19,263,671 29,421,897 29,464,348 23,428 31,895,842 32,097,066 188,755 Deposits with the Brazilian Central Bank -- -- 131,542 987,244 9,209,363 10,319,955 10,328,149 9,128 4,441,965 4,442,550 586 Pledged in guarantee -- -- 43,462 268,604 796,915 1,108,153 1,108,981 811 657,365 659,979 2,611

09.30.2008 09.30.2007


Maturity in years With no maturity

Due in up to one year

Due from 1 to 5 years


Due after 10 years

Cost

Market Value

Cost

Market Value

Total by category 26,321 23,359,977 35,322,496 10,669,341 1,355,601 70,938,881 70,733,736 70,399,356 70,712,521

1 - Trading securities 2,000 5,601,708 10,545,941 2,053,270 -- 18,326,267 18,202,919 13,658,299 13,662,204 2 - Securities available for sale 24,321 15,671,033 13,317,216 5,858,173 1,355,601 36,324,364 36,226,344 36,715,301 37,023,184 3 - Securities held to maturity -- 2,087,236 11,459,339 2,757,898 -- 16,288,250 16,304,473 20,025,756 20,027,133

09.30.2008 09.30.2007

Book Value Book Value

Maturity in Days Current Long Term Total Current Long Term Total

Total by portfolio 35,986,605 34,730,908 70,717,513 25,396,230 45,314,914 70,711,144

Own portfolio 23,583,204 6,253,659 29,832,257 17,249,231 16,274,444 33,523,675 Subject to repurchase agreements 10,971,968 18,470,637 29,448,126 5,661,388 24,673,327 30,334,715 Deposits with the Brazilian Central Bank 1,119,367 9,209,715 10,328,149 1,199,752 3,242,799 4,442,551 Pledged in guarantee 312,066 796,897 1,108,981 322,117 337,860 659,977 Securities subject to repurchase agreements (with free movement) -- -- -- 963,742 786,484 1,750,226


16

09.30.2008 09.30.2007 Total by category Trading Securities 18,202,919 26% 13,662,204 19% Securities available for sale 36,226,344 51% 37,023,184 53% Securities held to maturity 16,288,250 23% 20,025,756 28% Portfolio book value 70,717,513 100% 70,711,144 100% Mark-to-market - Category 3 16,223 1,377 Portfolio market value 70,733,735 70,712,521

BB-Consolidated

09.30. 2008 09.30.2007 Market Value Total Total


0-30

31-180

181-360

over 360

With no maturity

Market Value Unrealized Gain/loss

With no maturity

Market Value Unrealized Gain/loss

1 - Trading securities 703,250 3,656,425 1,733,120 2,716,181 17,666,295 26,199,255 26,475,271 -- 14,044,146 14,045,771 --

Domestic 703,250 3,643,424 1,727,938 2,639,356 17,666,295 26,099,871 26,380,263 -- 13,933,611 13,937,190 -- Financial Treasury Bills -- 105,060 458,217 20,367 4,764,521 5,363,673 5,348,165 -- 2,476,213 2,476,780 -- Federal Treasury Bills -- 2,651,276 1,132,546 2,380,017 3,498,367 9,726,284 9,662,206 -- 9,479,505 9,481,676 -- Federal Treasury Notes -- -- -- 54,209 7,860,771 8,040,303 7,914,980 -- 1,695,676 1,696,825 -- Debentures 118,037 8,269 26,344 7,652 703,105 749,864 863,407 -- 56,145 55,852 -- Promissory Notes -- -- 50,753 -- -- 50,753 50,753 -- 220,784 220,784 -- Shares in listed companies 311,360 -- -- -- -- 313,206 311,360 -- 3,458 3,443 -- Shares in investment funds 3,315 9,276 754 37,721 36,253 86,379 87,319 -- 1,830 1,830 -- Federal Government securities -- 824,897 -- -- 91,068 904,248 915,965 -- -- -- -- Banking Deposit receipt 270,525 44,646 59,324 139,390 712,210 865,131 1,226,095 -- -- -- -- Others 13 -- -- -- -- 30 13 -- -- -- -- Abroad -- 13,001 5,182 76,825 -- 99,384 95,008 -- 110,535 108,581 -- Eurobonds -- 1,274 3,184 42,836 -- 49,396 47,294 -- 64,167 62,866 -- Brazilian foreign debt securities ,, 1,978 -- 33,989 -- 38,247 35,967 -- 42,813 42,156 -- Deposit receipt ,, 9,548 -- -- -- 9,540 9,548 -- -- -- -- Foreign government securities -- 201 1,998 -- -- 2,201 2,199 -- 3,555 3,559 --

2 - Securities available for sale 42,761 2,112,251 6,301,968 7,631,454 21,688,813 37,880,882 37,777,247 (103,635) 37,967,728 38,466,177 498,449 Domestic 34,050 713,119 5,508,708 7,442,178 19,821,667 33,701,255 33,519,722 (181,533) 36,165,428 36,463,848 298,420 Financial Treasury Bills -- 1,780 3,275,496 2,994,083 14,771,169 21,017,442 21,042,528 25,086 21,177,206 21,232,968 55,762 Federal Treasury Bills -- 496,378 1,115,496 1,747,357 207,521 3,616,592 3,566,752 (49,840) 5,483,751 5,504,232 20,481 Federal Treasury Notes -- -- -- 653,439 3,459,724 4,238,852 4,113,163 (125,689) 6,107,456 6,169,391 61,935 Federal Government securities – other -- -- -- -- -- -- -- -- 1,415,678 1,418,790 3,112 Debentures -- -- 20,528 9,145 1,154,511 1,215,976 1,184,184 (31,792) 436,450 435,780 (670) Agricultural debt securities -- 162 717 391 9,184 12,585 10,454 (2,131) 9,474 8,262 (1,212) Quotas of FIDCs -- -- -- -- 3,621 3,614 3,621 7 5,040 5,203 163 Quotas of Private Equity Funds -- -- -- -- 84,036 81,335 84,036 2,701 32,807 32,384 (423) Quotas of Fund in Emerging Companies -- -- -- -- 1,814 2,900 1,814 (1,086) -- -- -- Quotes of fund investments - others 5,894 -- -- -- -- 10,356 5,894 (4,462) 4,149 4,149 -- Shares in social development funds 494 -- -- -- -- 10,854 494 (10,360) 10,321 867 (9,454) Shares in listed companies 25,446 -- -- -- -- 10,678 25,446 14,768 451,969 592,686 140,717 Shares in privately-held companies 325 -- -- -- -- 7 325 318 7 264 257 Shares in equity funds 1,891 -- -- -- -- 8,508 1,891 (6,617) 186,209 216,194 29,985 Rural Product Bills - Commodities -- 72,234 295,515 100,764 1,959 470,963 470,472 (491) 551,437 553,426 1,989 Securities in special status company -- -- -- -- -- -- -- -- 808 -- (808) Dpvat- Financial Treasury Bills -- 2,504 7,698 1,337 34,478 46,017 46,017 -- -- -- -- Banking deposit receipt -- 34,054 14,172 29,212 20,908 98,391 98,346 (45) -- -- -- Others -- 106,007 779,086 1,906,450 72,742 2,856,185 2,864,285 8,100 292,666 289,252 (3,414) Abroad 8,711 1,399,132 793,260 189,276 1,867,146 4,179,627 4,257,525 77,898 1,802,300 2,002,329 200,029 Brazilian foreign debt securities -- -- -- -- 1,866,599 1,790,900 1,866,599 75,699 1,579,460 1,765,572 186,112 Foreign government securities -- 1,151,784 793,260 189,276 547 2,132,044 2,134,867 2,823 200,389 200,544 155 Shares in investment funds -- 33,205 -- -- -- 22,591 33,205 10,614 21,700 32,689 10,989 Shares in listed companies -- 3,153 -- -- -- 782 3,153 2,371 751 3,524 2,773 Others 8,711 210,990 -- -- -- 233,310 219,701 (13,609) -- -- --

3 - Securities held to maturity -- 42,928 2,106,725 159,009 18,133,926 20,442,903 20,442,588 -- 20,029,066 20,030,443 -- Domestic -- 28,327 2,093,745 159,009 17,978,067 20,275,043 20,259,148 -- 19,628,952 19,608,640 -- Financial Treasury Bills -- 28,322 1,987,444 30,306 14,107,536 16,147,624 16,153,608 -- 16,852,726 16,853,600 -- Federal Treasury Notes -- -- -- 49,589 3,751,958 3,821,676 3,801,547 -- 2,775,828 2,754,643 -- Federal Treasury Bills -- -- -- 78,949 118,548 198,682 197,497 -- -- -- -- Federal Government securities – other -- 5 106,301 165 25 107,061 106,496 -- -- -- -- Commodities -- -- -- -- -- -- -- -- 398 397 -- Abroad -- 14,601 12,980 -- 155,859 167,860 183,440 -- 400,114 421,803 -- Eurobonds -- -- -- -- -- -- -- -- 13,219 13,217 -- Brazilian foreign debt securities -- -- -- -- 155,859 140,279 155,859 -- 368,887 390,578 -- Foreign government securities -- 14,601 12,980 -- -- 27,581 27,581 -- 18,008 18,008 --

Total 746,011 5,811,604 10,141,813 10,506,644 57,489,034 84,523,040 84,695,106 (103,635) 72,040,940 72,542,391 498,449

09.30.2008 09.30. 2007



0-30

31-180

181-360

over 360

Cost

Market Value


Cost

Market Value


Total by portfolio 746,011 5,811,604 10,141,813 10,506,644 57,489,034 84,523,040 84,695,106 (103,635) 72,040,940 72,542,391 498,449

Own portfolio 741,651 5,657,744 3,854,053 4,530,642 26,146,141 40,753,673 40,930,231 (136,556) 34,981,453 35,248,546 276,562 Subject to repurchase agreements 4,351 1,287 5,861,855 4,337,536 19,270,344 29,428,568 29,475,373 23,430 31,960,157 32,191,315 218,690 Deposits with the Brazilian Central Bank -- -- 131,542 987,244 9,209,363 10,319,954 10,328,149 9,128 4,441,965 4,442,551 586 Pledged in guarantee 9 152,573 294,363 651,222 2,863,186 4,020,845 3,961,353 363 657,365 659,979 2,611


17

09.30.2008 09.30.2007


Maturity in years With no maturity

Due in up to one year



Due after 10 years

Cost

Market Value

Cost

Market Value

Total by category 746,011 26,460,061 40,609,116 11,594,310 5,285,608 84,523,040 84,695,106 72,040,940 72,542,391 1 - Trading securities 713,250 8,105,726 14,740,734 2,666,586 258,975 26,199,255 26,475,271 14,044,146 14,045,771 2 - Securities available for sale 42,761 16,045,673 13,623,977 5,966,067 2,098,769 37,880,882 37,777,247 37,967,728 38,466,177 3 - Securities held to maturity -- 2,308,662 12,244,405 2,961,657 2,927,864 20,442,903 20,442,588 20,029,066 20,030,443

09.30.2008 09.30. 2007

Account value Account Value

Manurity in days Current Long Term Total Current Long Term Total

By Portfolio 44,873,463 39,821,958 84,695,421 26,218,092 46,322,922 72,541,014

Own portfolio 31,679,610 9,255,227 40,930,230 18,071,093 17,188,201 35,259,294 Subject to repurchase agreements 10,976,320 18,493,848 29,475,689 5,661,388 24,767,578 30,428,966 Deposits with the Brazilian Central Bank 1,119,367 9,209,715 10,328,149 1,199,752 3,242,799 4,442,551 Pledged in guarantee 1.098,166 2,863,168 3,961,353 322,117 337,860 659,977 Securities subject to repurchase agreements (with free movement) -- -- -- 963,742 786,484 1,750,226

09.30.2008 09.30.2007

Total by category Trading Securities 26,475,271 31% 14,045,771 19% Securities available for sale 37,777,247 45% 38,466,177 53% Securities held to maturity 20,442,903 24% 20,029,066 28% Portfolio book value 84,695,421 100% 72,541,014 100% Mark-to-market - Category 3 (315) 1,377 Portfolio market value 84,695,106 72,542,391

b) Derivative financial instruments The Bank uses derivative financial instruments to manage, at the consolidated level, its positions and to meet clients' needs, classifying its own positions as either Hedging (market risk) or Trading, both with limits of approval. This information is made available to the areas of pricing, trading, controls and calculation of results, which are segregated within the Bank. The Bank uses statistical methods and simulations to measure the risks of its positions, including derivatives, using models of values at risk sensibility and stress analysis.The models used to manage risks with derivatives are reviewed periodically and decisions are made in accordance with the best risk/return relationships, estimating possible losses based on the analysis of macroeconomic scenarios. Risk analysis of the subsidiaries is undertaken on an individual basis and its management is undertaken at the consolidated level. The Bank uses appropriate tools and systems to manage the derivatives. Trading in new derivatives, standardized or not, is subject to a formal risk analysis prior to any transaction. The hedge strategy of the equity positions is in line with the macroeconomic analyses and is approved by the Executive Board of Directors. Risks The main risks inherent in the derivative financial instruments entered into as part of the Group’s business are credit, market and operating risks, all similar to those related to other types of financial instruments. Credit risk is the exposure to loss in the event of default by the counterparty to a transaction. The credit exposure in futures contracts is minimized due to daily settlement in cash. Swap contracts registered at CETIP and at BM&F are subject to credit risk if the counterparty is unable or unwilling to comply with his contractual liabilities. Total credit exposure in swaps at September 30, 2008 is R$ 1,668,650 thousand (R$ 1,784,418 thousand on September 30, 2007). The credit risk associated with options contracts is limited to the premiums paid on purchased options.


18

Market risk is the exposure created by a potential fluctuation in interest rates, exchange rates, quotations of goods, prices quoted on stock markets and other values, and is a function of the type of product, the volume of operations, the term and conditions of the contract and the underlying volatility. Operating risk indicates the probability of financial losses resulting from failures or inadequacy of people, processes and / or systems, or factors such as catastrophes or criminal activities. The tables below show the notional amounts, as cost or market value, and the respective net exposures in the balance sheet at September 30, 2008 for the derivative financial instruments classified in conformity with their classification as “Trading“ or “Hedge“ instruments. Details of the Portfolio of Derivatives Designated for Trade by Index

BB- Domestic and Foreign branches BB-Consolidated By index 09.30.2008 09.30.2007 09.30.2008 09.30.2007

Counter- Party

Notional amount

Cost

Market Value Notional

amount Cost


amount Cost


amount Cost

Market Value

Exchange trading Futures contracts Sales commitments 2,236,173 14,562 15,620 5,164,611 58,344 58,711 2,236,173 14,562 15,620 5,164,611 58,344 58,711 DI B 511,563 (4,974) (4,974) 4,183,390 (4,649) (4,649) 511,563 (4,974) (4,974) 4,183,390 (4,649) (4,649) Currencies B 1,420,979 48,222 48,222 94,758 70,495 70,495 1,420,979 48,222 48,222 94,758 70,495 70,495 Index B -- (12) (12) -- (20) (20) -- (12) (12) -- (20) (20) Foreign exchange coupon B 64,657 8,764 8,764 140,733 (8,717) (8,717) 64,657 8,764 8,764 140,733 (8,717) (8,717) Libor IF 238,974 -- 1,058 727,349 -- 367 238,974 -- 1,058 727,349 -- 367 Commodities B -- (15) (15) -- 116 116 -- (15) (15) -- 116 116

SCC (1 )

B -- (37,423) (37,423) 18,381 1,119 1,119 -- (37,423) (37,423) 18,381 1,119 1,119

Sales commitments 9.220.503 (25,365) (26,461) (765,562) (22,149) (23,387) 9,220,503 (25,365) (26,461) (765,562) (22,149) (23,387) DI B 8,769,336 (51,201) (51,201) 436,846 (4,443) (4,443) 8,769,336 (51,201) (51,201) 436,846 (4,443) (4,443) Currencies B 148,716 25,607 25,607 27,684 (23,049) (23,049) 148,716 25,607 25,607 27,684 (23,049) (23,049) Index B -- (20) (20) -- (26) (26) -- (20) (20) -- (26) (26) Foreign exchange coupon B -- -- -- 87,667 5,432 5,432 -- -- -- 87,667 5,432 5,432 Libor IF 300,707 -- (1,096) (1,317,914) -- (1,238) 300,707 -- (1,096) (1,317,914) -- (1,238) Commodities B 1,744 249 249 155 (63) (63) 1,744 249 249 155 (63) (63) Fixed-term options Asset position 820,842 242,405 258,121 1,016,850 330,420 328,641 820,842 242,405 258,121 1,016,850 330,420 328,641 Security maturity B -- -- -- 268,695 268,695 268,695 -- -- -- 268,695 268,695 268,695 Currencies B 820,842 242,405 258,121 748,155 61,725 59,946 820,842 242,405 258,121 748,155 61,725 59,946 Liability position 4,198,980 (174,494) (114,980) 3,516,768 (769,348) (643,385) 4,198,980 (174,494) (114,980) 3,516,768 (769,348) (643,385) Security maturity B -- -- -- (268,695) (268,695) (268,695) -- -- -- (268,695) (268,695) (268,695) Currencies B 4,198,980 (174,494) (114,980) 3,785,463 (500,653) (374,690) 4,198,980 (174,494) (114,980) 3,785,463 (500,653) (374,690) Options market Purchase options 18,290 548 1,787 1,887 38 19 17,983 725 1,989 8,131 610 342 Flexible Currency Options B 16,376 514 1,753 1,887 38 19 16,376 514 1,753 1,887 38 19 Financial assets & derivatives C

1,914

34

34 --

--

--

1,607

211

236 6,244

572

323

Sales options (172,711) (105,381) (109,013) (892,639) (1,244,496) (1,256,987) (173,018) (105,547) (109,215) (886,395) (1,245,068) (1,257,310) Flexible Currency Options B (174,625) (105,336) (108,967) (892,639) (1,244,496) (1,256,987) (174,625) (105,336) (108,967) (892,639) (1,244,496) (1,256,987) Financial assets & derivatives

IF

1,914

(45)

(46)

--

--

-- 1,607

(211)

(248)

6,244

(572)

(323) Over-the-counter trading Swap contracts Asset position 6,985,451 943,503 825,036 8,846,431 1,100,475 1,138,264 6,980,685 942,114 824,904 8,775,591 1,100,412 1,136,941 DI C 1,763,076 190,576 200,812 3,911,577 613,791 614,667 1,763,076 189,527 200,812 3,911,577 613,791 614,667 IF 1,139,148 79,120 103,182 4,107,185 436,036 423,506 1,139,148 79,120 103,182 4,107,185 436,036 423,506 Foreign currency C 826,043 91,236 57,983 24,955 277 331 826,043 91,049 57,983 24,955 277 331 IF 3,180,435 578,338 459,023 210,071 36,136 82,830 3,180,436 578,338 459,024 210,071 36,136 82,830 Prefixed C 71,982 4,080 3,903 573,791 14,179 15,751 71,982 4,080 3,903 521,803 14,172 15,607 IPCA C 4,767 153 133 18,852 56 1,179 -- -- -- -- -- -- Liability position 25,544,226 (880,849) (768,057) 24,141,013 (487,349) (497,027) 25,492,953 (873,505) (760,261) 24,141,013 (487,349) (497,027) DI C 7,240,709 (182,301) (181,618) 11,386,402 (183,075) (183,360) 7,189,436 (182,301) (181,166) 11,386,402 (183,075) (183,360) IF 647,371 (83,839) (97,927) 1,334,212 (175,063) (179,455) 647,371 (83,839) (97,927) 1,334,212 (175,063) (179,455) Foreign currency C 1,904,382 (161,636) (139,945) 613,624 (10,735) (11,777) 1,904,382 (161,636) (139,945) 613,624 (10,735) (11,777) IF 2,495,459 (334,853) (230,347) 198,901 (629) (13,551) 2,495,459 (334,853) (230,347) 198,901 (629) (13,551) Prefixed C -- -- -- 532,558 (52,029) (43,155) -- 3,672 3,672 532,558 (52,029) (43,155) IF -- -- -- -- -- -- -- -- -- -- -- -- TMS C 12,795,241 (110,120) (110,120) 9,679,300 (55,738) (55,738) 12,795,241 (110,120) (110,120) 9,679,300 (55,738) (55,738) TR C 461,064 (8,100) (8,100) 396,016 (10,080) (9,991) 461,064 (4,428) (4,428) 396,016 (10,080) (9,991) Forward contracts

Asset position 3,632,402 159,891 174,159 678,513 101,798 119,339 3,608,895 158,646 173,083 678,303 101,134 118,712 Foreign currency IF 2,843,656 157,929 172,197 144,379 101,513 119,054 2,820,149 156,684 171,121 144,169 100,849 118,427 Others - 788,746 1,962 1,962 534,134 285 285 788,746 1,962 1,962 534,134 285 285 Liability position 4,515,107 (274,332) (314,261) 1,576,956 (43,488) (55,577) 4,509,371 (274,065) (314,261) 1,575,554 (41,839) (53,654) Foreign currency IF 4,515,107 (274,332) (314,261) 860,402 (42,511) (54,600) 4,509,371 (274,065) (314,261) 859,000 (40,862) (52,677) Others - -- -- -- 716,554 (977) (977) -- -- -- 716,554 (977) (977)

Counterpart: (B) Stock Exchange, (IF) Financial Institution, (C) Client. (1) Foreign exchange swap with regular adjustments.


19

Breakdown of the Credit derivatives portfolio

BB- Domestic and Foreign branches BB-Consolidated 09.30.2008 09.30.2007 09.30.2008 09.30.2007

Notional amount

Market Value

Notional amount


amount Notional amount

Notional amount

Market Value

Asset position – Transferred risk Credit swaps – Derivatives with Banks 24,588 4 -- -- 24,588 4 -- -- Liability position – Received risk Credit swaps – Derivatives with Banks 9,567 (9) -- -- 9,567 (9) -- --

Breakdown of the Credit derivatives portfolio by ma turity

BB- Domestic and Foreign branches BB-Consolidated By maturity 09.30.2008 09.30.2007 09.30.2008 09.30.2007

Notional amount

Cost


amount Cost


amount Cost


amount Cost

Market Value

Forwards contracts Sales commitments 2,236,173 -- -- 5,164,611 -- -- 2,236,173 -- -- 5,164,611 -- -- Up to 30 days 339,786 -- -- 874,581 -- -- 339,786 -- -- 874,581 -- -- 31 to 60 days 1,375,635 -- -- 24,380 -- -- 1,375,635 -- -- 24,380 -- -- 61 to 90 days 47,959 -- -- 65,492 -- -- 47,959 -- -- 65,492 -- -- 91 to 180 days 140,133 -- -- 578,310 -- -- 140,133 -- -- 578,310 -- -- 181 to 360 days 218,084 -- -- 1,893,093 -- -- 218,084 -- -- 1,893,093 -- -- 1 to 5 years 114,576 -- -- 1,728,755 -- -- 114,576 -- -- 1,728,755 -- -- Sales commitments 9,220,503 -- -- (765,562) -- -- 9,220,503 -- -- (765,562) -- -- Up to 30 days 144,530 -- -- -- -- -- 144,530 -- -- -- -- -- 31 to 60 days 106 -- -- 7,823 -- -- 106 -- -- 7,823 -- -- 61 to 90 days 12,276 -- -- (187,486) -- -- 12,276 -- -- (187,486) -- -- 91 to 180 days 1,128,832 -- -- (169,606) -- -- 1,128,832 -- -- (169,606) -- -- 181 to 360 days 36,340 -- -- (141,796) -- -- 36,340 -- -- (141,796) -- -- 1 to 5 years 7,862,970 -- -- (327,423) -- -- 7,862,970 -- -- (327,423) -- -- Over 5 years 35,449 -- -- 52,926 -- -- 35,449 -- -- 52,926 -- -- Fixed-term options Security maturity Asset position -- -- -- 268,695 268,695 268,695 -- -- -- 268,695 268,695 268,695 Up to 30 days -- -- -- 268,695 268,695 268,695 -- -- -- 268,695 268,695 268,695 Liability position -- -- -- (268,695) (268,695) (268,695) -- -- -- (268,695) (268,695) (268,695) Up to 30 days -- -- -- (268,695) (268,695) (268,695) -- -- -- (268,695) (268,695) (268,695) Currency maturity Asset position 820,842 242,405 258,121 748,155 61,725 59,946 820,842 242,405 258,121 748,155 61,725 59,946 Up to 30 days 341,102 46,526 36,659 263,359 19,802 20,344 341,102 46,526 36,659 263,359 19,802 20,344 31 to 60 days 281,700 37,898 32,949 67,650 1,894 1,813 281,700 37,898 32,949 67,650 1,894 1,813 61 to 90 days 36,441 34,841 29,201 171,526 30,547 29,237 36,441 34,841 29,201 171,526 30,547 29,237 91 to 180 days 89,081 63,305 59,779 200,124 8,659 6,764 89,081 63,305 59,779 200,124 8,659 6,764 181 to 360 days 69,941 51,972 61,958 25,054 2,005 1,335 69,941 51,972 61,958 25,054 2,005 1,335 1 to 5 years 2,577 7,863 37,575 20,442 (1,182) 453 2,577 7,863 37,575 20,442 (1,182) 453 Liability position 4,198,980 (174,494) (114,980) 3,785,463 (500,653) (374,690) 4,198,980 (174,494) (114,980) 3,785,463 (500,653) (374,690) Up to 30 days 457,588 (34,244) (26,927) 332,209 (37,527) (38,022) 457,588 (34,244) (26,927) 332,209 (37,527) (38,022) 31 to 60 days 554,585 (19,818) (20,597) 213,006 (25,985) (25,487) 554,585 (19,818) (20,597) 213,006 (25,985) (25,487) 61 to 90 days 391,975 (11,040) (10,391) 258,044 (32,273) (30,603) 391,975 (11,040) (10,391) 258,044 (32,273) (30,603) 91 to 180 days 817,901 (21,868) (19,665) 793,402 (103,151) (91,387) 817,901 (21,868) (19,665) 793,402 (103,151) (91,387) 181 to 360 days 1,050,637 (40,856) (30,901) 1,287,856 (148,853) (106,688) 1,050,637 (40,856) (30,901) 1,287,856 (148,853) (106,688) 1 to 5 years 926,294 (46,668) (6,499) 900,946 (152,864) (82,503) 926,294 (46,668) (6,499) 900,946 (152,864) (82,503) Options market Purchase options Shares 18,290 548 1,787 1,887 38 19 17,983 725 1,989 8,131 610 342 Up to 30 days 5,644 71 568 -- -- -- 5,337 248 770 151 12 -- 31 to 60 days 3,816 145 268 -- -- -- 3,816 145 268 -- -- -- 61 to 90 days 5,495 226 450 1,887 38 19 5,495 226 450 1,887 38 19 91 to 180 days -- -- -- -- -- -- -- -- -- 80 3 --

181 to 360 days 1,634 47 256 -- -- -- 1,634 47 256 6,013 557 323

1 to 5 years 1,701 59 245 -- -- -- 1,701 59 245 -- -- -- Sales options Shares (172,711) (105,381) (109,013) (892,639) (1,244,496) (1,256,987) (173,018) (105,547) (109,215) (886,395) (1,245,068) (1,257,310) Up to 30 days (86,838) (82,150) (82,424) (367,702) (655,718) (658,837) (87,145) (82,316) (82,626) (367,551) (655,730) (658,837) 31 to 60 days (25,375) (582) (1,787) (288,482) (538,985) (542,518) (25,375) (582) (1,787) (288,482) (538,985) (542,518) 61 to 90 days (22,418) (710) (1,154) (1,886) (38) (96) (22,418) (710) (1,154) (1,886) (38) (96) 91 to 180 days (13,602) (321) (866) (212,094) (3,163) (2,349) (13,602) (321) (866) (212,014) (3,166) (2,349) 181 to 360 days (2,128) (59) (42) (22,475) (46,592) (53,187) (2,128) (59) (42) (16,462) (47,149) (53,510) 1 to 5 years (22,350) (21,559) (22,740) -- -- -- (22,350) (21,559) (22,740) -- -- -- Swap contracts Asset 6,985,451 943,503 825,036 8,846,431 1,100,475 1,138,264 6,980,685 942,114 824,904 8,775,591 1,100,412 1,136,941 Up to 30 days 240,140 33,820 33,536 552,500 64,310 67,662 240,140 33,820 33,536 506,700 64,307 67,655 31 to 60 days 410,958 78,703 74,410 617,947 69,094 69,597 410,958 78,703 74,410 617,947 69,094 69,597 61 to 90 days 842,106 91,184 75,422 914,051 180,288 225,491 842,106 91,074 75,422 914,051 180,288 225,491 91 to 180 days 1,495,027 246,057 214,962 1,585,853 188,433 190,677 1,493,943 246,013 214,920 1,585,853 188,434 190,677 181 to 360 days 2,145,532 319,034 257,984 2,239,520 256,557 255,597 2,144,214 318,836 257,930 2,239,520 256,557 255,597 1 to 5 years 1,660,338 174,722 163,323 2,919,850 339,825 326,760 1,657,974 173,685 163,287 2,901,520 339,775 325,967 5 to 10 years 191,350 (17) 5,399 16,710 1,968 2,480 191,350 (17) 5,399 10,000 1,957 1,957


20

Liabilities 25,544,226 (880,849) (768,057) 24,141,013 (487,349) (497,027) 25,492,953 (877,177) (763,933) 24,141,013 (487,349) (497,027) Up to 30 days 2,821,124 (82,033) (68,488) 541,996 (25,109) (26,855) 2,821,124 (78,361) (64,750) 541,996 (25,109) (26,855) 31 to 60 days 8,125,408 (110,756) (99,748) 8,654,833 (47,106) (47,283) 8,125,408 (110,756) (99,748) 8,654,833 (47,106) (47,283) 61 to 90 days 861,026 (80,394) (65,018) 1,032,360 (31,448) (32,027) 861,026 (80,394) (65,018) 1,032,360 (31,448) (32,027) 91 to 180 days 2,379,306 (239,862) (202,148) 1,708,856 (85,840) (85,994) 2,379,306 (239,862) (202,148) 1,708,856 (85,840) (85,994) 181 to 360 days 5,214,315 (198,926) (181,450) 3,770,115 (100,454) (98,889) 5,183,315 (198,926) (181,411) 3,770,115 (100,454) (98,889) 1 to 5 years 6,143,047 (168,878) (151,205) 8,432,853 (197,392) (205,979) 6,122,774 (168,878) (150,858) 8,432,853 (197,392) (205,979) Forward contracts Assets 3,632,402 159,891 174,159 678,513 101,798 119,339 3,608,895 158,646 173,083 678,303 101,134 118,712 Up to 30 days 1,368,378 53,420 58,952 195,378 46,977 55,301 1,364,645 52,862 58,664 195,326 46,695 55,012 31 to 60 days 183,625 16,655 17,528 3,084 6,250 7,001 163,851 15,968 16,740 3,074 6,230 6,981 61 to 90 days 174,823 4,186 4,212 231,902 4,705 4,944 174,823 4,186 4,212 231,754 4,343 4,626 91 to 180 days 1,041,853 25,829 28,091 226,717 41,278 45,490 1,041,853 25,829 28,091 226,717 41,278 45,490 181 to 360 days 809,077 55,102 60,371 21,431 2,562 6,601 809,077 55,102 60,371 21,431 2,562 6,601 1 to 5 years 54,646 4,699 5,005 1 26 2 54,646 4,699 5,005 1 26 2 Liabilities 4,515,107 (274,332) (314,261) 1,576,956 (43,488) (55,577) 4,509,371 (274,065) (314,261) 1,575,554 (41,839) (53,654) Up to 30 days 660,537 (24,214) (35,083) 560,877 (16,272) (24,333) 654,860 (23,949) (35,084) 559,758 (15,089) (22,996) 31 to 60 days 364,359 (34,656) (36,688) 363,720 (3,173) (3,729) 364,359 (34,656) (36,688) 363,640 (2,989) (3,400) 61 to 90 days 1,106,321 (25,310) (30,204) 308,557 (6,416) (7,723) 1,106,321 (25,310) (30,204) 308,355 (6,136) (7,468) 91 to 180 days 1,092,901 (90,686) (103,583) 149,892 (16,122) (17,320) 1,092,901 (90,686) (103,583) 149,892 (16,122) (17,320) 181 to 360 days 1,212,662 (96,985) (106,222) 193,909 (1,503) (2,470) 1,212,603 (96,983) (106,221) 193,909 (1,503) (2,470) 1 to 5 years 76,363 (2,469) (2,469) 1 (2) (2) 76,363 (2,469) (2,469) -- -- -- 5 to 10 years 1,964 (12) (12) -- -- -- 1,964 (12) (12) -- -- --

Breakdown of margin given as guarantee for transact ions with derivative financial instruments Federal Government securities 09.30.2008 09.30.2007

Financial Treasury Bills (LFT) 648,460 302,287

Portfolio of derivatives designated as hedge of mar ket risk The Bank, seeking protection against possible oscillations in interest and exchange rates on securities issued in the international capitals market, totalling R$ 350 million, contracted derivative operations in the forma of currency and interest rate swaps (Cross Currency Interest Rate Swap), with the same volume, term and rates. The hedge was assessed as effective at September 30, 2008, in accordance with the provisions of Central Bank Circular no 3,082 dated January 30, 2002, which require evidence of hedge effectiveness between 80% and 125%. The breakdown of the portfolio is as follows: By index


By index 09.30.2008 09.30.2007 09.30.2008 09.30.2007

Counterparty Notional

amount Cost


amount Cost


amount Cost


amount Cost

Market Value

Over-the-counter trading

Swap contracts

Liability position 350,000 (8,794) (64,159) 320,000 8,335 (22,746) 350,000 (8,794) (64,159) 320,000 8,335 (22,746)

Foreign currency and interest IF 350,000 (8,794) (64,159) 320,000 8,335 (22,746) 350,000 (8,794) (64,159) 320,000 8,335 (22,746)

Counterpart: (IF) Financial Institution.

By maturity


By maturity 09.30.2008 09.30.2007 09.30.2008 09.30.2007

Notional amount

Cost


amount Cost


amount Cost


amount Cost

Market Value

Swap contracts

Liabilities 350,000 (8,794) (64,159) 320,000 8,335 (22,746) 350,000 (8,794) (64,159) 320,000 8,335 (22,746)

5 to 10 years 350,000 (8,794) (64,159) 320,000 8,335 (22,746) 350,000 (8,794) (64,159) 320,000 8,335 (22,746)


21

Derivative financial instruments divided into curre nt and long-term BB-Domestic and foreign branches BB-Consolidated

09.30.2008 09.30.2007 09.30.2008 09.30.2007 Current Long-Term Current Long-Term Current Long-Term Current Long-Term

ASSETS Fixed-term options 220,546 37,575 328,188 453 220,546 37,575 328,188 453 Options market 1,542 245 19 -- 1,744 245 342 -- Swap contracts 656,314 168,722 809,024 329,240 656,218 168,686 809,017 327,924 Forward contracts 169,154 5,005 119,337 2 168,078 5,005 118,710 2 Credit swaps 4 -- -- -- 4 -- -- -- Total 1,047,560 211,547 1,256,568 329,695 1,046,590 211,511 1,256,257 328,379

LIABILITIES Fixed-term options (108,481) (6,499) (560,882) (82,503) (108,481) (6,499) (560,882) (82,503) Options market (86,273) (22,740) (1,256,987) -- (86,475) (22,740) (1,257,310) -- Swap contracts (616,852) (151,205) (291,048) (205,979) (613,075) (150,858) (291,048) (205,979) Forward contracts (311,780) (2,481) (55,575) (2) (311,780) (2,481) (53,654) -- Credit swaps (9) -- -- -- (9) -- -- -- Hedge Derivatives -- (64,159) -- -- (64,159) -- -- -- Total (1,123,395) (247,084) (2,164,492) (288,484) (1,183,979) (182,578) (2,162,894) (288,482)

c) Result of the Mark-to-Market of Securities and D erivatives recorded directly in statement of income accounts BB-Domestic and foreign branches BB-Consolidate d

3 Quarter/2008 3 Quarter/2007 3 Quarter/2008 3 Quarter/2007 Securities 64,386 (43,455) 50,305 (39,536) Derivatives 4,839 13,332 4,755 14,600 Total 69,225 (30,123) 55,060 (24,936)

d) Reclassifying of Securities During the 3rd Quarter, no reclass form securities were performed.


22

8 – Loan operations a) Details of the Loan Portfolio and Loan Operation s Classified as "Other Receivables"


09.30.2008 09.30.2007 09.30.2008 09.30.2007 Loan operations 174,618,104

128,544,017 175,599,115 129,486,515

Loans and bills discounted 76,567,621 53,180,874 76,858,519 53,442,511 Financing 48,163,356 38,879,877 48,972,469 39,691,749 Rural and agribusiness financing 60,457,081 45,692,828 60,457,081 45,692,828 Real estate financing 94,532 -- 94,532 -- Financing of securities 544 439 -- -- (Allowance for loan losses) (10,665,030) (9,210,001) (10,783,486) (9,340,573) Other receivables with loan characteristics 13,181,826 9,933,623 13,181,829 11,008,284 Guarantees honored 50,633 47,225 50,633 47,225 Advances on foreign exchange contracts 7,978,294 7,680,815 7,978,294 7,680,815 Credit card operations 5,078,212 1,966,846 5,078,212 1,966,846 Sundry 435,053 538,850 435,115 1,613,551 (Provision for other losses) (360,366) (300,113) (360,425) (300,153) Lease operations 46,521 91,387 2,604,133 1,192,166

Lease operations (1)

46,521 91,413 2,307,679 1,214,698 (Allowance for lease losses) --

(26) (43,546) (22,532)

Total 187,846,451 138,569,027 191,045,077 141,686,965

(1) Lease Operations are stated at present value. The amounts of 2007 were reclassified for purposes of comparability.

b) Loan and lease operations income


09.30. 2008 09.30.2007 09.30.2008 09.30.2007 Loans and bills discounted 5,133,963 3,533,747 5,160,112 3,565,800 Financing 1,380,698 1,086,587 1,377,940 1,092,288 Rural and agribusiness financing 1,261,286 1,328,113 1,261,286 1,328,113 Lease income 13,219 17,349 219,483 176,439 Advances on foreign exchange contracts 81,979 148,763 81,979 160,791

Guarantees honored 3,807 987 3,807 987 Other 798,494 364,191 812,220 369,455 Total 8,673,446 6,479,737 8,916,827 6,693,873

c) Details of the Loan Portfolio by Sector, Includi ng Operations with Loan Characteristics Classified

as "Other Receivables" BB- Domestic and Foreign branches BB-Consolidated

09.30.2008 % 09.30.2007 % 09.30.2008 % 09.30.2007 %

PUBLIC SECTOR 3,140,856 1.6 2,722,903 1.7 3,151,440 1.6 2,747,602 1.8

Domestic 779,560 0.4 647,067 0.3 779,560 0.4 647,067 0.4

Government 527,261 0.3 401,408 0.3 527,261 0.3 401,408 0.3

Direct administration 459,083 0.3 317,385 0.2 459,083 0.3 317,385 0.2

Indirect administration 68,178 -- 84,023 0.1 68,178 -- 84,023 0.1

Business entities 252,299 0.1 245,659 0.2 252,299 0.1 245,659 0.2

Industry 117,167 0.1 161,316 0.1 117,167 0.1 161,316 0.1

Commerce 66,459 -- 130 -- 66,459 -- 130 --

Financial services 62,195 -- 66,855 0.1 62,195 -- 66,855 --

Other services 6,478 -- 17,358 -- 6,478 -- 17,358 --


23

Abroad 2,361,296 1.2 2,075,836 1.4 2,371,880 1.2 2,100,535 1.4

Government 1,769,668 0.9 1,950,479 1.3 1,777,736 0.9 1,960,585 1.3

Direct administration 1,769,668 0.9 1,950,479 1.3 1,777,736 0.9 1,960,585 1.3

Business entities 591,628 0.3 125,357 0.1 594,144 0.3 139,950 0.1

BB Group 7,186 -- -- -- -- -- -- --

Industry 406,308 0.2 37,469 -- 414,502 0.2 37,469 --

Commerce 1,737 -- -- -- 1,737 -- -- --

Financial services 176,397 0.1 87,888 0.1 177,905 0.1 102,481 0.1

PRIVATE SECTOR 195,730,991 98.4 145,356,264 98.3 199,081,094 98.4 148,602,621 98.2

Domestic 186,363,966 93.7 136,023,596 91.9 188,548,856 93.2 138,145,468 91.2

Rural 47,654,065 24.0 39,551,359 26.7 47,654,065 23.6 39,551,359 26.3

Industry 54,982,115 27.7 38,339,355 25.9 55,505,086 27.4 38,770,871 25.8

Commerce 21,597,491 10.8 15,386,665 10.4 22,128,963 10.9 15,641,805 10.4

Financial services 120 -- 160 -- 120 -- 160 --

Private Individuals 36,533,336 18.3 27,090,157 18.2 37,316,928 18.5 28,217,339 18.0

Other services 25,596,839 12.9 15,655,900 10.6 25,943,694 12.8 15,963,934 10.6

Abroad 9,367,025 4.7 9,332,668 6.4 10,532,238 5.2 10,457,153 7.0

Grupo BB -- -- 8,931 -- -- -- -- --

Industry 7,552,009 3.8 7,365,866 5.0 8,318,386 4.1 8,105,081 5.4

Commerce 615,128 0.3 691,179 0.5 810,113 0.4 387,368 0.3

Financial services 574,626 0.3 1,045,085 0.7 589,113 0.3 1,055,361 0.7

Other companies 355,933 0.2 87,902 0.1 401,532 0.2 627,052 0.4

Private Individuals 7,338 -- 6,404 -- 7,409 -- 6,480 --

Other services 261,991 0.1 127,301 0.1 405,685 0.2 275,811 0.2

Total 198,871,847 100.0 148,079,167 100.0 202,232,534 100.0 151,350,223 100.0

d) Loan portfolio by risk level and maturity, inclu ding operations with loan characteristics classifie d as "Other receivables"

BB- Domestic and Foreign branches Abnormal operations

09.30.2008 09.30.2007

AA (1)

A B C D E F G H Total portfolio

Total portfolio

Installments falling due

01 to 30 -- -- 108,308 174,474 194,231 110,063 81,747 91,503 484,538 1,244,864 824,701

31 to 60 -- -- 23,342 39,460 33,935 22,836 16,352 18,325 95,615 249,865 182,873

61 to 90 -- -- 15,660 27,187 23,936 17,171 11,778 12,309 65,060 173,101 171,387

91 to 180 -- 2 40,303 80,827 74,412 53,571 42,996 43,437 206,731 542,279 453,899

181 to 360 -- 3 66,944 149,063 145,531 101,666 68,207 70,506 367,442 969,362 1,100,382

Over 360 -- 17 161,684 274,834 334,512 198,641 131,013 225,069 808,826 2,134,596 2,567,247

Installments overdue

01 to 14 -- -- 10,481 17,283 16,221 7,767 4,984 5,047 26,372 88,155 65,571

15 to 30 -- -- 118,666 46,422 38,233 17,301 9,259 9,542 57,056 296,479 320,659

31 to 60 -- -- 1,385 82,572 65,022 34,717 29,600 21,514 115,209 350,019 298,848

61 to 90 -- -- 12 1,509 56,769 31,534 20,838 19,903 105,530 236,095 361,664

91 to 180 -- -- 17 937 3,734 64,249 60,034 76,201 350,413 555,585 608,467

181 to 360 -- -- 7 793 70 5,330 3,198 6,318 560,877 576,593 494,139

Over 360 -- -- 41 15 26 4 4 2,381 37,859 40,330 33,951

-

Subtotal -- 22 546,850 895,376 986,632 664,850 480,010 602,055 3,281,528 7,457,323 7,483,788


24

Normal operations

09.30.2008 09.30.2007

AA (1)

A B C D E F G H Total portfolio

Total portfolio

Installments falling due

01 to 30 5,144,490 4,789,693 6,548,426 1,825,136 596,466 60,570 15,069 31,418 75,423 19,086,691 15,901,190

31 to 60 4,407,002 3,532,586 3,246,995 1,016,662 206,206 41,383 12,163 7,109 61,138 12,531,244 9,662,130

61 to 90 3,267,758 2,563,586 2,986,086 782,337 187,637 31,856 15,880 7,312 37,426 9,879,878 9,172,215

91 to 180 5,399,520 4,152,697 7,448,582 2,248,379 461,059 79,241 22,018 16,573 106,710 19,934,779 17,858,522

181 to 360 9,141,577 7,894,840 13,786,671 4,135,926 856,710 161,038 36,884 29,579 201,488 36,244,713 26,630,607

Over 360 26,249,933 17,351,068 25,972,564 10,965,233 4,231,723 1,199,641 326,192 528,588 2,332,777 89,157,719 56,591,634


Up to 14 days 78,312 75,490 92,886 58,352 27,262 8,286 1,761 1,499 10,776 354,624 667,509

Others (1)

4,224,876 -- -- -- -- -- -- -- -- 4,224,876 4,111,572

Subtotal 57,913,468 40,359,960 60,082,210 21,032,025 6,567,063 1,582,015 429,967 622,078 2,825,738 191,414,524 140,595,379

Total 57,913,468 40,359,982 60,629,060 21,927,401 7,553,695 2,246,865 909,977 1,224,133 6,107,266 198,871,847 148,079,167

BB-Consolidated Abnormal operations

09.30.2008 09.30.2007

AA

(1) A B C D E F G H Total

portfolio Total

portfolio Installments falling due

01 to 30 -- -- 108,739 174,947 194,813 110,253 81,875 91,602 484,930 1,247,159 827,459

31 to 60 -- -- 23,758 39,897 34,434 22,975 16,447 18,397 95,946 251,854 185,062

61 to 90 -- -- 16,067 27,569 24,405 17,299 11,860 12,375 65,364 174,939 173,366

91 to 180 -- 2 41,478 81,678 75,593 53,846 43,187 43,589 207,503 546,876 460,052

181 to 360 -- 3 69,061 150,185 147,475 102,038 68,454 70,689 368,675 976,580 1,105,730

Over 360 -- 17 171,067 278,488 342,321 199,591 131,562 225,581 810,921 2,159,548 2,572,352


01 to 14 -- -- 10,558 17,354 16,371 7,842 5,039 5,080 26,510 88,754 66,236

15 to 30 -- -- 118,925 46,836 38,634 17,409 9,342 9,616 57,342 298,104 322,827

31 to 60 -- -- 1,473 82,711 65,402 34,912 29,754 21,649 115,679 351,580 301,042

61 to 90 -- -- 12 1,553 56,855 31,722 20,998 20,047 106,087 237,274 363,565

91 to 180 -- -- 17 945 3,765 64,291 60,248 76,520 352,616 558,402 614,186

181 to 360 -- -- 7 793 70 5,334 3,200 6,323 563,602 579,329 499,538

Over 360 -- -- 41 15 26 4 4 2,381 37,907 40,378 34,009

Subtotal -- 22 561,203 902,971 1,000,164 667,516 481,970 603,849 3,293,082 7,510,777 7,525,424


25

Normal operations

09.30.2008 09.30.2007

AA

(1) A B C D E F G H Total

portfolio Total

portfolio Installments falling due

01 to 30 5,180,826 4,818,486 6,591,994 1,836,799 600,552 60,769 15,174 31,433 75,728 19,211,761 16,075,947

31 to 60 4,418,350 3,557,503 3,290,018 1,022,821 210,344 41,575 12,266 7,124 61,273 12,621,274 9,718,248

61 to 90 3,285,872 2,594,144 3,028,245 788,393 191,642 32,043 15,981 7,327 37,553 9,981,200 9,229,321

91 to 180 5,443,131 4,245,929 7,565,979 2,263,468 472,849 79,765 22,309 16,610 107,050 20,217,090 18,034,699

181 to 360 9,232,316 8,001,296 14,010,823 4,158,307 876,520 161,904 37,029 29,634 201,972 36,709,801 26,857,622

Over 360 26,701,176 17,883,471 26,985,785 11,044,328 4,295,713 1,201,806 326,559 528,692 2,432,334 91,399,864 59,128,455


Up to 14 days 78,319 75,522 93,556 58,707 27,393 8,305 1,766 1,504 10,819 355,891 668,935

Other (¹) 4,224,876 - - - - - - - - 4,224,876 4,111,572

Subtotal 58,564,866 41,176,351 61,566,400 21,172,823 6,675,013 1,586,167 431,084 622,324 2,926,729 194,721,757 143,824,799

Total 58,564,866 41,176,373 62,127,603 22,075,794 7,675,177 2,253,683 913,054 1,226,173 6,219,811 202,232,534 151,350,223 (1) Operations with third party risk tied to Government Funds and Programs, mainly Pronaf, Procera, FAT, BNDES and FCO. Including the amount of overdue installments in the total amount of R$ 609 million, which comply with rules defined in each program for reimbursement with the managers, not implying credit risk for the Bank.

e) Allowance for loan losses by risk level, includi ng operations with loan characteristics classified as "Other receivables" BB-Domestic and foreign branches BB-Consoli dated

09.30.2008 09.30.2007 09.30.2008 09.30.2007 Risk % Value of Value of Value of Value of Value of Value of Value of Value of

Risk Provision Operations Provision Operations Provision Operations Provision Operations Provision

AA 0 57,913,543 -- 39,041,241 -- 58,547,549 -- 40,584,198 -- A 0.5 40,359,984 201,800 30,132,456 150,662 41,193,056 205,965 30,890,376 154,452 B 1 60,629,052 606,291 48,123,704 481,237 62,127,895 621,279 48,816,866 488,169 C 3 21,927,399 657,822 17,017,723 510,532 22,076,018 662,281 17,121,993 513,660 D 10 7,553,695 755,370 5,307,246 530,725 7,675,285 767,528 5,344,167 534,417 E 30 2,246,863 674,059 2,127,937 638,381 2,253,697 676,109 2,137,248 641,174 F 50 909,974 454,986 753,932 376,966 913,108 456,554 756,109 378,054 G 70 1,224,133 856,893 1,082,681 757,877 1,226,181 858,327 1,085,569 759,898 H 100 6,107,204 6,107,204 4,492,247 4,492,247 6,220,045 6,220,045 4,613,697 4,613,697

Subtotal 198,871,847 10,314,425 148,079,167 7,938,627 202,232,534 10,468,088 151,350,223 8,083,521

Additional allowance foreign (1)

-- 26,022 -- 12,573 -- 34,413 -- 20,580

Additional allowance domestic (2)

-- 684,949 -- 1,558,940 -- 684,956 -- 1,559,157 Total 198,871,847 11,025,396 148,079,167 9,510,140 202,232,534 11,187,457 151,350,223 9,663,258 (1) Additional allowance required by local legislation.

(2) Includes the installment of R$ 613 million (R$ 1,400 million on September 30, 2007) with the purpose of prudently reflecting the risks that exist in the portfolio, and also the installment of R$ 67 million (R$ 55 million on September 30, 2007) of charges on operations classified at Proagro, pending recovery by Central Bank.

f) Transactions with the allowance for loan losses, leasing and other doubtful credits, with the natur e of credits granted BB-Domestic and foreign branches BB-Consolidated

3Q/2008 3Q/2007 3Q/2008 3Q/2007

Opening balance 11,020,686 9,281,199 11,164,932 9,440,915

Provision/(reversal) 1,335,658 1,208,565 1,337,700 1,216,118 Exchange variation on allowances - foreign 7,278 (1,150) 26,547 (6,082) Loans written off (1,338,226) (978,474) (1,341,722) (987,693) Closing balance 11,025,396 9,510,140 11,187,457 9,663,258


26

g) Transactions with the provision for other doubtf ul credits, without the nature of credits granted BB-Domes tic and foreign branches BB-Consolidated

3Q/2008 3Q/2007 3Q/2008 3Q/2007

Opening balance 700,616 529,511 725,807 540,511

Provision/(reversal) 29,129 16,359 29,198 16,015 Exchange variation on allowances - foreign 323 (3) 323 (3) Loans written off 3,347 (587) 5,138 (588) Closing balance 733,415 545,280 760,466 555,935

h) Supplementary information BB-Domestic and foreign branches BB-Consolidated

3Q/2008 3Q/2007 3Q/2008 3Q/2007

Renegotiated loans 2,577,856 2,523,799 2,578,055 2,524,634

Recoveries of loans written off (1)

398,144 299,519 400,459 301,725

(1) Recorded in income in Revenue from Loans, pursuant to CMN Resolution 2,836, of May 30, 2001. Of this total, in the third quarter of 2008, R$ 4,762 thousand (book value - R$ 1,860 thousand) refer to loans to individuals and corporate entities. In the third quarter/2007, these amounts reached R$ 8,132 thousand (book value - R$ R$ 18,433 thousand).


27

9 - Other Receivables a) Specific credits These are credits from the Federal Treasury of R$ 821,474 thousand (R$ 737,942 thousand on September 30, 2007) for the – extension of terms of rural financing – as determined by Law 9138/1995. b) Sundry

BB - Domestic and Foreign branches

BB-Consolidated

09.30.2008 09.30.2007 09.30.2008 09.30.2007 Receivables from guarantee deposits 16,521,535 15,178,908 17,480,767 15,255,751 Tax credits 14,651,471 13,747,076 14,993,909 13,880,644

Sundry debtors – domestic (1) 5,918,007 5,537,506 5,719,258 5,538,766 Accounts receivable - credit card operations (2) 5,253,269 3,683,245 5,253,269 3,683,245 Income tax and social contribution on net income to offset 3,312,243 2,631,189 3,746,857 2,745,354 Accounts receivable – other 1,647,864 844,814 2,142,966 882,551 Accounts receivable - Federal Treasury 357,731 284,674 357,731 284,674 Sundry debtors from sale of assets and rights 314,475 365,127 314,478 365,128 Salary and other advances 143,094 122,149 147,630 122,180 Sundry debtors – foreign 30,158 23,331 28,140 24,185 Other 440,265 413,028 301,335 256,843 Total 48,590,112 42,831,047 50,486,340 43,039,321 (1) Includes the sum of R$ 2,003,185 thousand with regard to "CVM Actuarial Assets no. 371" (R$ 2,364,158 thousand at September 30, 2007), as shown in Note 27 f. (2) Includes the yet to mature credit card installments payable to storekeepers, in the amount of R$ 2,249,136 thousand (R$ 1,623,873 thousand at September 30, 2007).


28

10 – Foreign exchange portfolio a) Breakdown

BB- Domestic and Foreign branches

BB-Consolidated

09.30.2008 09.30.2007 09.30.2008 09.30.2007 Assets Other Receivables 17,052,672 11,537,655 17,052,672 11,537,655 Forward foreign exchange purchases pending settlement 13,270,196 9,367,211 13,270,196 9,367,211 Bills of exchange and time drafts in foreign currency 86,217 83,667 86,217 83,667 Receivables from sales of foreign exchange 10,211,145 9,617,576 10,211,145 9,617,576 (Advances in national currency) (6,661,174) (7,659,362) (6,661,174) (7,659,362) Foreign currency receivables 5,993 5,814 5,993 5,814 Income receivable on advances granted 140,151 122,634 140,151 122,634 Income receivable on financed imports 144 115 144 115 Liabilities Other liabilities 15,691,347 11,600,359 15,760,968 11,600,359 Forward foreign exchange sales pending settlement 11,391,159 9,221,521 11,391,159 9,221,521 (Financed import - contracted exchange) (37,769) (24,288) (37,769) (24,288) Foreign exchange purchase liabilities 12,070,558 9,919,236 12,070,558 9,919,236 (Advances on foreign exchange contracts) (7,748,430) (7,530,332) (7,748,430) (7,530,332) Foreign currency payables 11,731 11,305 81,352 11,305 Unearned income on advances granted 4,065 2,875 4,065 2,875 Charges payable on advances received 33 42 33 42 Foreign exchange portfolio, net 1,361,325 (62,704) 1,291,704 (62,704) Memorandum accounts Credits limit for import 645,931 597,768 646,472 597,952 Confirmed export credit 303,250 405,632 307,461 407,243

b) Foreign exchange income


09.30.2008 09.30.2007 09.30.2008 09.30.2007 Foreign exchange income 2,790,074 2,285,270 2,795,050 2,303,422

Foreign exchange expenses (2,835,964) (2,131,462) (2,844,914) (2,148,261) Foreign Exchange result (45,890) 153,808 (49,864) 155,161


29

11 – Other Assets a) Non-operating assets/Others


09.30.2008 09.30.2007 09.30.2008 09.30.2007 Assets in special regime 169,719 158,579 170,000 158,675 Property 55,553 64,261 52,211 64,387 Supply materials 19,482 15,541 45,935 15,541 Vehicles 745 430 19,926 576 Machinery and Equipment 11,672 11,266 12,442 11,961 Buildings 599 -- 599 -- Others 3,251 2,365 3,362 2,365 (Provision for devaluations) (149,424) (151,182) (164,882) (151,895) Total 111,597 101,260 139,593 101,610 b) Prepaid expenses


BB-Consolidated

09.30.2008 09.30.2007 09.30.2008 09.30.2007 Banking service agreement (1) 3,846,890 1,222,788 3,846,890 1,222,788 Insurance sale expenses (2) -- -- 132,170 -- Commissions on intermediation of loans (3) 32,675 19,598 32,675 19,598 Personnel Expenses (4) 4,730 48,656 4,730 48,656 Others 224,979 99,803 244,247 101,914 Total 4,109,274 1,390,845 4,260,712 1,392,956 (1) Refers basically to contracts of the business relationship program (negotiation of the payroll of management bodies and indirect and judicial deposits). (2) Refers basically to deferred insurance commissions. (3) Refers basically to commissions paid to storeowners - financing of vehicles. (4) Refers basically to benefits of the Food Program - employees.


30

12 –Property and equipment and leased assets BB- Domestic and Foreign branches

09.30.2008

Annual depreciation rate

(by group)

Residual Cost 06.30.2008

Movements Depreciation Final Bal ance

Property and equipment 2,768,241 345,190 (202,841) 2,910,590 Buildings 4% 996,684 84,022 (36,376) 1,044,330 Data processing systems 20 a 50% 749,974 232,840 (115,905) 866,909 Furniture and equipment in use 10% 350,727 37,911 (30,459) 358,179 Facilities 10% 167,894 22,055 (11,330) 178,619 Land -- 163,912 3,347 -- 167,259 Constructions in progress -- 117,122 (26,257) -- 90,865 Security systems 10% 87,215 7,642 (5,993) 88,864 Communication systems 10% 86,140 4,676 (2,567) 88,249 Furniture and equipment in stock -- 48,378 (21,353) -- 27,025 Vehicles 20% 195 307 (211) 291 Leased assets 54,660 (3,800) (4,624) 46,236 Total 2,822,901 341,390 (207,465) 2,956,826

BB-Consolidated 09.30.2008

Annual depreciation rate

(by group)

Residual Cost 06.30.2008

Movements Depreciation Final Bal ance

Property and equipment 2,899,545 353,083 (215,534) 3,037,094 Buildings 4% 1,008,789 79,625 (33,625) 1,054,789 Data processing systems 20 a 50% 780,619 236,040 (114,744) 901,915 Furniture and equipment in use 10% 415,617 57,326 (47,523) 425,420 Facilities 10% 172,811 22,155 (11,490) 183,476 Land -- 168,924 2,211 -- 171,135 Constructions in progress -- 127,264 (34,989) -- 92,275 Communication systems 10% 87,301 4,108 (1,803) 89,606 Security systems 10% 87,216 7,655 (6,007) 88,864 Furniture and equipment in stock -- 48,378 (21,353) -- 27,025 Vehicles 20% 2,626 305 (342) 2,589 Leased assets 2,329,542 606,956 2,602 2,939,100 Total 5,229,087 960,039 (212,932) 5,976,194

The ratio of formation of fixed assets in relation to the equity of reference is 17.08% (13.45% at September 30, 2007) for the Financial Consolidation, and 14.07% for the Economic and Financial Consolidation, in conformity with CMN Resolution 2,669, of November 25, 1999. The difference between the Fixed Asset Ratio of the Financial Group and of the Economic/Financial Group results from the inclusion of non-financial subsidiaries/associated companies that have high liquidity and low fixed asset level, with consequent reduction of the fixed asset ratio of the Economic/Financial Group.


31

13 – Deposits a) Deposits breakdown


09.30.2008 09.30.2007 09.30.2008 09.30.2007 Demand deposits 42,899,539 38,675,807 42,955,207 38,711,780 Corporate entities 16,361,522 14,218,212 16,414,848 14,263,125 Individual 15,848,367 14,649,790 15,854,860 14,657,359 Restricted 4,907,147 3,711,164 4,907,614 3,712,635 Government 2,150,174 2,335,429 2,150,174 2,335,429 In foreign currencies 1,860,187 1,955,942 1,860,187 1,955,942 Related companies 703,464 1,164,391 703,464 1,164,391 Special from Federal Treasury 447,366 306,508 447,366 306,508 Financial institutions 423,835 257,780 419,405 253,064 Domiciled abroad 36,034 30,729 35,846 17,465 Others 161,443 45,862 161,443 45,862 Savings deposits 52,692,961 43,830,975 52,692,961 43,830,975 Individual 48,825,279 41,201,674 48,825,279 41,201,674 Corporate entities 3,489,451 2,260,882 3,489,451 2,260,882 Related companies 373,124 363,853 373,124 363,853 Financial institutions 5,107 4,566 5,107 4,566 Interbank deposits 7,210,958 10,041,356 6,309,437 5,602,986 Time deposits 127,731,144 83,566,611 127,582,468 83,640,165 Time deposits in local currency (1)

77,990,629 37,748,861 77,841,953 37,822,415 Remunerated judicial deposits 32,712,303 27,529,716 32,712,303 27,529,716 Special deposits relating to funds Funds and programs (2)

16,312,985 18,286,895 16,312,985 18,286,895

Time deposits in foreign currency 715,227 1,139 715,227 1,139 Deposits for investments 269,902 393,847 269,902 393,847 Total 230,804,504 176,508,596 229,809,975 172,179,753

(1) Include time deposits time with automatic renewal in the amount of R$ 117,139 thousand (R$ 148,541 thousand at September 30, 2007). (2) Includes, at September 30, 2008, Funds and Programs in the amount of R$ 15,576,997 thousand, as shown in Note 18.b. b) Expenses Related to Deposits


BB-Consolidated

09.30.2008 09.30.2007 09.30.2008 09.30.2007

Savings deposits (2,157,185) (805,704) (2,152,109) (806,771) Time deposits (1,238,485) (922,840) (1,238,485) (922,840) Judicial deposits (647,730) (484,059)

(647,730) (484,059)

((( Interbank deposits (107,377) (238,654) (95,736) (217,077) Others (386,917) (353,816) (414,328) (374,692) Total (4,537,694) (2,805,073) (4,548,388) (2,805,439)


32

14 – Money Market a) Breakdown of Money Market


09.30.2008 09.30.2007 09.30.2008 09.30.2007 Own portfolio 28,935,563 29,542,190

28,631,774 29,536,628

Financial Treasury Bills 23,350,308 28,204,142 -----------------

23,046,519 28,204,142 Other securities abroad 1,487,566 1,336,190 1,487,566 1,330,628 Federal Treasury Bills 1,022,947 -- 1,022,947 -- Debentures 405,837 -- 405,837 -- Federal Treasury Notes -- 1,858 -- 1,858 Other 2,668,905 -- 2,668,905 -- Third-party portfolio 57,168,048 41,255,521 56,707,465 40,858,820 Financial Treasury Bills 39,174,121 1,197,608 38,718,687 1,197,608 Federal Treasury Notes 11,420,627 3,654,420 11,420,392 3,654,420 Federal Treasury Bills 2,027,485 33,148,710 2,027,485 32,752,009 Other securities abroad 4,545,815 3,254,783 4,540,900 3,254,783 Unrestricted Portfolio -- 4,450,000 -- 4,450,000 Total 86,103,611 75,247,711 85,339,239 74,845,448 b) Expenses with Money Market

BB- Domestic and Foreign branches

BB-Consolidated

09.30.2008 09.30.2007 09.30.2008 09.30.2007 Third-party portfolio (1,746,698) (1,180,301)

((9(((((( (1,746,698) (1,180,301)

Own portfolio (786,209) (675,631) (768,433) (662,179) Unrestricted Portfolio (4,806) (105,257) (4,806) (105,257) Total (2,537,713) (1,961,189) (2,519,937) (1,947,737)

((


33

15 – Borrowings - Foreign Borrowings BB- Domestic and Foreign branches

up to 90 days

from 91 to360 days

from 1 to3 years

from 3 to5 years

from 5 to 15 years

Total 09.30.2008

Total 09.30.2007

Borrowings from BB Group companies

overseas 72,353 879,533 2,506,645 -- -- 3,458,531 3,375,557

Onlend to the public sector 176,707 123,743 477,557 460,139 460,139 1,698,285 1,876,519 Bankers 1,349,732 -- -- -- -- 1,349,732 320,904 Borrowings by BB Group companies overseas

263,044 1,066,674 -- 11,336 -- 1,341,054 560,738

Imports 81,748 268,517 229,707 82,849 -- 662,821 431,216 Exports 73,926 45,316 -- -- -- 119,242 303,637 Total 2,017,510 2,383,783 3,213,909 554,324 460,139 8,629,665 6,868,571

BB-Consolidated

up to 90 days

from 91 to360 days

from 1 to3 years

from 3 to5 years

from 5 to 15 years

Total 09.30.2008

Total 09.30.2007

Onlend to the public sector 176,707 123,744 477,557 460,139 460,139 1,698,286 1,876,519

Bankers 1,349,732 -- -- -- -- 1,349,732 320,904

Borrowings by BB Group companies overseas

263,587 1,075,711 -- 2,299 -- 1,341,597 549,043

Imports 30,351 220,240 141,548 38,070 -- 430,209 234,141 Exports 45,611 -- -- -- -- 45,611 -- Total 1,865,988 1,419,695 619,105 500,508 460,139 4,865,435 2,980,607


34

16 –Local Onlendings - Official Institutions

PROGRAMS FINANCIAL CHARGES BB - Domestic and Foreign branches BB-Consolidated

09.30.2008 09.30.2007 09.30.2008 09.30.2007 National Treasury - Rural credit 3.276.304 3.131.559 3.276.304 3.131.559

Farming/livestock breeding TR ou 9% a.a. 40.369 39.845 40.369 39.845

Cocoa TJLP + 0,6% a.a. ou 6,35% a.a. 65.090 44.863 65.090 44.863

Pronaf TMS (Available) ou 0,5% a.a. a 5,5% a.a. (Allocated) 2.986.035 2.839.622 2.986.035 2.839.622

Recoop 5,75% a.a. a 7,25% a.a. 183.455 206.984 183.455 206.984 Recoop -- 1.355 245 1.355 245

BNDES 3,75% a.a. a 11% a. a. ou TJLP / var. camb. + 0,5% a.a. a 9,69% a.a. 9.380.125 5.120.812 9.380.125 5.120.812

Finame 3,75% a.a. a 11% a. a. ou TJLP / var. camb. + 0,5% a.a. a 4,5% a.a. 6.060.234 7.493.661 6.085.251 7.516.201

Other Official Institutions 898.001 759.186 898.187 759.354

Funcafé TR ou TMS (Available) ou TJLP - 0,5 a.a. ou 3% a.a. ou 5% a.a. (Allocated) 897.474 749.202 897.474 749.202

Other -- 527 9.984 713 10.152 Total 19.614.664 16.505.218 19.639.867 16.527.926


35

17 – Funds Obtained in Foreign Capital Markets (in R$/US$ million) Balance at

09.30.2008 Balance at 09.30. 2007

OPERATIONS Issued

value

Coupon Date of funding

Maturity

Issue currency

Reais Issue currency

Reais

DIRECT FUND RAISING

Global Medium - Term Notes Program (1)

R$ 200 Zero – cupom dez/04 dez/07 - - R$ 195 195

Global Medium - Term Notes Program (1)

R$ 350 9,75% a.a. jul/07 jul/17 R$ 288 288 R$ 329 329

Subordinated debt (2) (3)

US$ 300 8,5% a.a. set/04 set/14 US$ 299 573 US$ 299 550

Perpetual Bonuses (2) (3) (4)

US$ 500 7,95% a.a. jan/06 - US$ 507 971 US$ 508 933

Certificates of deposit – in reais (8)

R$ 8 - - - R$ 8 8 - -

Certificates of deposit – in US$ (8)

US$ 198 - - - US$ 200 383 - -

Total 2.223 2.007

FUND RAISING THROUGH SPECIAL-PURPOSE COMPANIES – SP C

Securitization of the future flow of payment orders overseas (1) (5) (7)

US$ 450 7,890% a.a. dez/01 dez/08 US$ 42 80 US$ 201 370


US$ 300 Libor 3m+0,60 a.a. jul/02 jun/09 US$ 43 82 US$ 100 184


US$ 40 7,890% a.a. set/02 set/09 US$ 8 15 US$ 15 28


US$ 120 7,26% a.a. mar/03 mar/10 US$ 41 78 US$ 66 121


US$ 250 6,55% a.a. dez/03 dez/13 US$ 198 379 US$ 229 421


US$ 250 Libor 3m+0,55% a.a. mar/08 mar/14 US$ 249 477 - -


US$ 200 Libor 3m+1,2% a.a. set/08 set/15 US$ 200 383 - -


US$ 150 5,25% a.a. abr/08 jun/18 US$ 151 290 - -

Securitization of the future flow of credit card invoice receivables (2) (6) (7)

US$ 178 5,911% a.a. jul/03 jun/11 US$ 89 170 US$ 118 217

Securitization of the future flow of credit card invoice receivables (2) (6) (7)

US$ 45 4,777% a.a. jul/03 jun/11 US$ 22 42 US$ 29 54

Total 1.996 1.395

TOTAL FUNDING 4.219 3.402 * Taxa de conversão: US$ 1,00 x R$ 1,8381 (30/09/2007) ** Taxa de conversão: US$ 1,00 x R$ 1,9135 (30/09/2008)

(1) Recorded under Foreign marketable securities. (2) Funding recorded in Other Liabilities, with subordinated debt recorded in Liabilities from the Issue of Subordinated Debt; Perpetual Bonuses in Obligations due to Issuance of Hybrid Capital and Debt Instruments and the securitization of the future flow of receivables from credit cards in Contracts of Assumption of Liabilities. (3) The amount of US$ 288 million (R$ 550 million) of the subordinated debt and the sum of US$ 490 million (R$ 938 million) of the perpetual bonuses are included in the Referential Shareholders' Equity (PR), level II, in conformity with CMN Resolution 3,444, of February 28, 2007. (4) The operation can be redeemed at the Bank’s option from 2011 or at each subsequent quarterly payment of interest, providing it is authorized beforehand by BACEN . The terms of these Perpetual Bonuses allow the Bank to suspend quarterly payments of interest and/or accessory payments on the aforesaid securities issued (which will neither be due or accumulated) if: (i) the Bank determines that it is incapable or the payment of these charges does not allow the Bank to be in conformity with the capital adequacy levels required by BACENor its financial indicators are below the minimum level required by the regulations applicable to Brazilian banks; (ii) BACEN or the Regulatory Authorities request the suspension of payments of the charges; (iii) an insolvency or bankruptcy event occurs; (iv) a default event occurs; or (v) the Bank decides to suspend these payments for any other reason. If the Bank decides to suspend the payment of interest and accessories due on the Perpetual Bonuses on account of item (v) above, the terms of the Perpetual Bonuses provide that, until such payments have been resumed for a period equivalent to 12 months, the Bank (a) cannot recommend to its stockholders and, as permitted by the applicable legislation, will act in order to avoid the statement, payment or distribution of dividends or interest on own capital on its common stock and (b) will suffer restrictions on its capacity to redeem or otherwise acquire its common stock.


36

(5) The Special Purpose Company - SPC “Dollar Diversified Payment Rights Finance Company” was created with the following purposes: (a) issue and sell securities in the international market; (b) use funds raised with the issue of securities to pay for the purchase from BB of BB's rights on payment orders issued by correspondent banks in the USA and by BB's New York branch, in US dollars, to any BB branch in Brazil (Remittance Rights); and (c) to make payments of principal and interest with regard to securities and other payments provided in the agreements covering the issue of such securities. (6) The Special Purpose Company - “Brazilian Merchant Voucher Receivables” was created with the following purposes: (a) issue and sell securities in the international market; (b) to use funds raised with the issue of securities to pay for the purchase of current and future rights of Companhia Brasileira de Meios de Pagamento ("Visanet") against Visa International Service Association over the Receivables arising from: (i) credit or charge purchases made in Brazilian territory, in any currency processed by Visanet, with Visa cards issued by financial institutions located outside of Brazil, or (ii) credit or charge purchases processed by Visanet in foreign currency and made with Visa cards issued by financial institutions located in Brazil; and (c) to make payments of principal and interest with regard to securities and other payments provided in the agreements covering the issue of such securities. BB is the beneficiary of 44.618488% of the funds, calculated based on the equity interest held in Visanet, and the remaining funds made available to the other Brazilian financial institution which holds an interest in Visanet. (7) The Special Purpose Entities were organized under the laws of the Cayman Islands and declare that they have no relevant asset or liability other than the rights and duties originating from the contracts for issue of securities. BB does not have control, is not a shareholder, the owner, or is a beneficiary of any of the results of operations of the SPCs . The liabilities arising from the securities issued are paid by the SPCs using the funds accumulated in its account. (8)Securities with a term below 360 days, whereas the interest rates of the certificates are issued in Brazilian Reais between 11.41% and 13.84% per annum and the rate of those issued in dollar is between 2.5632% and 4.23883% per annum.


37

18 – Other liabilities a) Financial and development funds

BB - Domestic and

Foreign branches BB-Consolidated

09.30. 2008 09.30.2007 09.30.2008 09.30.2007 PIS/Pasep 1,639,708 1,473,318 1,639,708 1,473,318 Special Lending Program for Agrarian Reform – Procera 334,874 314,739 334,874 314,739 Merchant Navy 201,784 31,600 201,784 31,600 Fight against Poverty/Our First Land (CPR/NPT) 33,545 2,326 33,545 2,326 Consolidation of Family Farming (CAF) 13,661 286 13,661 286 Land and Agrarian Reform - BB Banco da Terra 1,607 1,274 1,607 1,274 Other 51,958 23,787 51,958 23,787 Total 2,277,137 1,847,330 2,277,137 1,847,330

b) Fund for Worker Assistance (FAT) and Fund to Gua rantee the Increase in Employment and Earnings (FUNPROGER) FAT is a special accounting and financial fund, established by Law 7998/1990, attached to the Ministry of Labor and Employment (MTE) and managed by the Executive Council of the Worker Assistance Fund – Codefat. CODEFAT is a collective, tripartite and equal level organization, composed of representatives of workers, employers and government, which acts as the manager of FAT. The main actions to promote employment using FAT funds are centralized in the Programs for the Increase in Earnings (PROGER), whose resources are allocated by special deposits, established by Law 8352/1991, in official federal financial institutions (including, among others, PROGER in the Urban – Investment and Working Capital – and Rural, the National Program for Strengthening of Family Farming – Pronaf, the program that allocates resources for the purchase of construction materials – FAT Housing, in addition to the special lines such as FAT Rural and Urban Integration, FAT Giro Setorial – Micro and Small-Sized Companies, FAT Giro Setorial – Medium and Large-Sized Companies, FAT Fomentar - Micro and Small-Sized Companies, FAT Fomentar – Medium and Large-Sized Companies, FAT Giro Agropecuário, FAT Turismo Senior and FAT Digital Inclusion). The FAT special deposits, allocated with Banco do Brasil, while available, incur interest on a daily “pro rata” basis using the TMS (Average Selic Rate). As they are applied in loans, the interest rate is changed to the TJLP (Long-term Interest Rate) during the effective period of the loans. The income on the Bank’s funds is paid to FAT on a monthly basis, as established in CODEFAT Resolution No. 439, of June 2, 2005 and No. 489, of April 28, 2006. The Guarantee Fund for Generation of Employment and Earnings (Funproger) is a special accounting fund established on November 23, 1999 by Law 9872, amended by Law 10,360/2001, and by Law 11,110/2005 and regulated by Codefat Resolution 409/04, and is managed by Banco do Brasil under the supervision of Codefat/MTE, whose balance at September 30, 2008 is R$ 320,618 thousand (R$ 306,547 thousand at September 30, 2007). The objective of FUNPROGER is provide guarantees to entrepreneurs who do not have the necessary guarantees of their own to contract PROGER Urbano and PNMPO financing, through the payment of a commission. The net assets of FUNPROGER are accumulated through funds arising from the difference between the average SELIC Rate and the Long-Term Interest Rate (TJLP) in respect of the remuneration of the special deposit balances available in the FAT. Other sources of funds are the earnings from its operations and the income on its cash resources paid to Banco do Brasil, the Fund manager.


38

Return of FAT funds

Programs

Resolution/

TADE

Available

(1)

Invested

(2)

Total Type (3)

Initial Date

Final Date

PROGER (Rural) and PRONAF 122,968 7,329,628 7,452,596 Pronaf Custeio 04.2005 109,538 305,198 414,736 RA 11.2005 --

Pronaf Investimento 05.2005 - 4,026,614 4,026,614 RA 11.2005 --

Giro Rural – Aquisição de Títulos 03.2005 - 1,717,514 1,717,514 SD 01.2008 01.2014

Giro Rural Fornecedores 14.2006 13,377 685,656 699,033 RA 08.2006 --

Rural Custeio 02.2006 53 8,058 8,111 RA 11.2005 --

Rural Investimento 13.2005 - 586,588 586,588 RA 11.2005 --

Proger Urbano 67,637 6,385,560 6,453,197

Urbano Investimento 18.2005 - 4,502,471 4,502,471 RA 11.2005 --

Urbano Capital de Giro 15.2005 55,779 1,781,728 1,837,507 RA 11.2005 --

Empreendedor Popular 01.2006 11,858 101,361 113,219 RA 11.2005 --

Others 330,484 1,340,720 1,671,204

Exports 27.2005 2,257 4,531 6,788 RA 11.2005 --

Rural Area Integration 26.2005 - 310,021 310,021 RA 11.2005 --

Urban Area Integration 25.2005 3,862 64,158 68,020 RA 11.2005 --

Digital Inclusion 09.2005 421 945 1,366 RA 11.2005 --

FAT Giro Setorial Micro e Pequenas Empresas 08.2006 66,645 246,301 312,946 RA 09.2007 --

FAT Giro Setorial - Medium and Large-Sized Comp.

09.2006 254,734 548,778 803,512 RA 09.2007 --

FAT Giro Cooperativo Agropecuário 10.2006 1,815 2,217 4,032 RA 07.2006 --

FAT Fomentar Micro and Small Comp. 11.2006 750 21,637 22,387 RA 08.2006 --

FAT Fomentar - Medium and Large-Sized Comp.

12.2006 - 142,132 142,132 RA 07.2006 --

Total 521,089 15,055,908 15,576,997 (1) Funds remunerated by the Average Selic Rate (TMS): (2) Funds remunerated by the TJLP. (3) (RA) Automatic Monthly Return of 2% on the total balance and the (SD) Available Balance.

c) Sundry


BB-Consolidated

09.30. 2008 09.30.2007 09.30.2008 09.30.2007 Provisions for payments (1) 7,523,053 6,853,349 7,714,614 6,858,422 Credit card operations (2) 4,686,155 3,454,487 4,686,155 3,454,487 Provisions for contingent liabilities (3) 4,354,464 3,557,471 4,410,905 3,562,399 Sundry creditors – domestic 1,168,492 996,241 1,910,229 1,002,953 Liabilities for official agreements 751,480 94,857 751,480 94,857 Creditors by residual value advances -- 1,766 685,827 253,691 Recursos vinculados a operações de crédito 111,910 82,655 610,018 499,833 Accounts payable for payment services provided 455,887 475,903 455,887 475,903 Contracts of assumption of liabilities 360,424 406,789 215,229 271,070

Liabilities for purchase of goods and rights 138,904 57,998 138,904 57,998 Sundry creditors – overseas 46,069 47,924 49,170 54,775 Other 7,819 6,002 50,926 5,982 Total 19,604,657 16,035,442 21,679,344 16,592,370 (1) Includes R$ 4,284,947 thousand (R$ 3,931,659 thousand at September 30, 2007) relating to "Actuarial Liability of the Informal Plan" (exclusive responsibility of the Bank) and the "CassiI Actuarial Liability" (Note 27.f). (2) Includes the yet to mature credit card installments payable to storekeepers, in the amount of R$ 2,249,136 thousand (R$ 1,623,873 at September 30, 2007). (3) Includes R$ 35,526 thousand (R$ 23,908 thousand at September 30, 2007) relating to provisions for guarantees provided.

d) Subordinated debt BB - Domestic and

Foreign branches

BB-Consolidated

09.30.2008 09.30.2007 09.30.2008 09.30.2007 Subordinated debts eligible as capital (1)

11,208,759 9,812,791 11,208,759 9,812,791

Other subordinated debt 22,791 21,220 22,791 15,731 Total 11,231,550 9,834,011 11,231,550 9,828,522 (1) Includes R$ 10,658,585 thousand (R$ 9,284,297 thousand at September 30, 2007) relating to funds from the Central-Western Constitutional Fund (FCO) as subordinated debt and as Level II Referential Shareholders’ Equity, because of their low level of obligation and length of term in the Bank. (CMN Vote n.° 067, of June 28, 2001, and Bacen-Direct. Official Letter 1.602, of June 29, 2001).


39

19 – Operations related to the activities of insura nce, pension and capitalization a) Technical Provisions

09.30. 2008 Insurance Pension Capitalization Total

Insurance Pension Capitalization Total Insurance Pension Capitalization Total Mathematical provision for future benefits 329 8,336,706 -- 8,337,035 Mathematical provision for vested benefits 260 312,810 -- 313,070 Mathematical provision for redemptions -- 909 1,378,515 1,379,424 Mathematical provision for unearned premiums 563,190 -- -- 563,190 Provision for unsettled claims 659,323 -- -- 659,323 Provision for financial surplus -- 296,368 -- 296,368 Provision for insufficiency of contribution -- 139,473 -- 139,473 Provision for financial fluctuation -- 124,626 -- 124,626 Provision for IBNR 118,615 2,660 -- 121,275 Provision for insufficiency of premiums 26,044 15,186 -- 41,230 Provision for prize draws and redemptions -- -- 53,382 53,382

Other provisions (1)

24,470 16,417 5,857 46,744 Total 1,392,231 9,245,155 1,437,754 12,075,140 Short-Term 1,378,709 327,080 1,437,754 3,143,543 Long-Term 13,522 8,918,075 -- 8,931,597 (1) Basically refers to additional provision for premiums, administrative expenses and risk fluctuation.

b) Technical Provisions by product 09.30.2008 Insurance Pension Capitalization Total

Automotive 465,769 -- -- 465,769 Life 622,648 -- -- 622,648 Property/casualty 243,389 -- -- 243,389 DPVAT 45,527 -- -- 45,527 Health 14,898 -- -- 14,898 Capitalization -- -- 1,437,754 1,437,754 Free benefit generating plan – PGBL -- 3,367,265 -- 3,367,265 Free benefit generating life insurance plan – VGBL -- 2,671,843 -- 2,671,843 Traditional plans -- 3,206,047 -- 3,206,047 Total 1,392,231 9,245,155 1,437,754 12,075,140

c) Guarantee linked to Technical Provisions 09.30.2008 Insurance Pension Capitalization Total Shares in Investment Funds (VGBL and PGBL) -- 5,950,909 -- 5,950,909 Shares in Investment Funds (except VGBL and PGBL) 730,420 2,356,350 977,669 4,064,439 Federal Government securities 410,432 1,107,928 310,503 1,828,863 Private securities 234,774 1,761 224,468 461,003 Credit Receivables 233,506 -- -- 233,506 Land and buildings in use 3,304 -- -- 3,304 Deposits held at IRB and judicial deposits 599 -- -- 599 Total 1,613,035 9,416,948 1,512,640 12,542,623 d) Retained insurance premiums, pension plan contri butions and capitalization certificates 09.30. 2008 Insurance Pension Capitalization Total

Premiums issued (VGBL retirement) 566,870 290,749 -- 857,619 Supplementary pension contributions (includes VGBL part risk) -- 203,346 -- 203,346 Revenues from Capitalization -- -- 236,537 236,537 Coinsurance premiums ceded (3,239) -- -- (3,239) Reimbursed premiums (return of VGBL contribution) (3,759) (1,769) -- (5,528) Premiums issued net (premium issued - premium reimb ursed) 559,872 492,326 236,537 1,288,735 Reinsurance premiums ceded, consortiums and funds (52,269) -- -- (52,269) Retained insurance premiums, pension plans and capi talization 507,603 492,326 236,537 1,236,466


40

e) Results from Insurance, Pension Plan and Capital ization Operations 3 Quarter/2008

Insurance Pension Capitalization Total Financial Income 44,722 189,915 48,274 282,911 Financial Revenues 55,624 209,796 48,289 313,709 Financial Expenses (10,902) (19,881) (15) (30,798) Restatement and interest of technical reserves (12,950) (148,690) (27,454) (189,094) Income from operations 215,043 (9,054) 12,207 218,196 Retained premiums and contributions 507,603 492,326 236,537 1,236,466 Changes in Technical Provisions (41,326) (484,397) (2,128) (527,851) Retained Claims (215,675) -- -- (215,675) Marketing Expenses (35,559) (3,298) (15,596) (54,453) Expenses with prize draws and redemptions of financial bonds -- -- (206,606) (206,606) Expenses with benefits and redemptions of pension plans -- (13,685) -- (13,685) Total 246,815 32,171 33,027 312,013


41

20 – Analysis of Income Statement Items a) Banking service fees

BB-Domestic a nd foreign branches BB-Consol idated 3Q/2008 3Q/2007 3Q/2008 3Q/2007

Fund Management 322,881 276,084 516,312 442,532 Income from cards (1) 305,210 208,312 483,801 208,312 Collections 265,774 242,274 265,981 242,592 Account fees 187,864 727,139 187,961 727,225 Interbank 119,699 180,049 119,699 180,049 Funding 111,923 105,853 111,923 105,853 Loan operations 94,803 239,871 94,802 239,871 Services rendered to related companies 57,108 53,525 31,183 71,578 Official services 16,393 34,505 16,393 34,505 Other services (2) 240,450 198,793 431,315 245,751 Total 1,722,105 2,266,405 2,259,370 2,498,268 (1) Includes, in BB-Consolidated of the third quarter/2008, the amount of R$ 178,590 thousand, referring to result (proportionate to the interest of BB BI) of the operations of Cia. Brasileira de Meios de Pagamentos - Visanet. (2) Includes, in BB-Consolidated of the third quarter/2008, the amount of R$ 139,506 thousand, referring to the services rendered by non-financial associated companies.

b) Bank fee income

As of April/2008, the Income from Bank Fees account records income from tariffs charged referring to top-priority services, related to deposit accounts, transfers of resources, loan and registration operations and differentiated services for individuals and businesses, as established by Bacen Circular n.º 3,288 of 11.14.2007. The results relating to the year 2007 were not reclassified from the income from services rendered account for comparative purposes, as permitted by the regulations in force.

c) Personnel expenses BB- Domestic and Foreign branches

BB-Consolidated

3Q/2008 3Q/2007 3Q/2008 3Q/2007 Salaries (893,949) (815,072) (936,340) (827,190) Personnel provisions (411,863) (372,706) (411,863) (372,706) Social charges (352,223) (306,410) (369,078) (310,260) Provision for labor claims (356,765) (286,613) (356,765) (286,613) Benefits (1) (264,477) (629,682) (273,416) (630,968) Training (19,826) (17,618) (21,430) (17,799) Directors’ fees (4,309) (2,991) (7,647) (3,412) Total (2,303,412) (2,431,092) (2,376,539) (2,448,948) (1) Includes, at third quarter/2008, the amount of R$ 12,137 thousand (R$ 337,082 thousand, third quarter/2007), referring to the agreement signed for restructuring of Cassi.


42

d) Other Administrative Expenses


3Q/2008 3Q/2007 3Q/2008 3Q/2007 Expenses with tax and civil lawsuits (271,915) (164,421) (271,915) (164,421) Communications (235,422) (225,193) (244,809) (228,359) Third party services (168,494) (141,644) (194,998) (149,823) Data processing (187,822) (168,296) (190,541) (170,613) Transport (144,059) (120,682) (150,279) (120,961) Security services (146,655) (117,835) (146,804) (117,871) Depreciation (142,813) (131,079) (146,503) (131,168) Financial system services (109,956) (99,667) (105,900) (96,560) Rent (80,148) (71,455) (88,017) (72,487) Maintenance and upkeep (66,012) (55,078) (67,984) (55,354) Advertising and publicity (52,079) (71,148) (66,062) (71,193) Water, electricity and gas (62,768) (61,486) (63,485) (61,543) Amortization (57,640) (52,240) (60,119) (52,474) Specialized technical services (33,985) (22,826) (59,158) (23,771) Promotion and public relations (35,905) (31,355) (36,447) (31,384) Domestic travel (29,845) (26,007) (31,943) (26,257) Materials (25,714) (28,264) (27,930) (28,371) Other Administrative Expenses (101,117) (129,314) (115,869) (133,574) Total (1,952,349) (1,717,990) (2,068,763) (1,736,184)

e) Other Operating Income BB-Domestic and foreign branches BB- Consolidated

3Q/2008 3Q/2007 3Q/2008 3Q/2007 Income from guarantee deposits 327,564 268,218 327,564 268,218 Recovery of charges and expenses 340,725 276,185 311,366 277,297 Equalization of rates – Law 8427 295,909 5,232 295,909 5,232 Credit card transactions 74,195 34,081 74,195 34,081 Previ – Contributions parity agreement 61,843 54,959 61,843 54,959 Administrative expenses – Reversal of provisions

28,866 25,392 28,866 25,392 Dividends received 27,991 13,677 27,991 13,677 Income from Specific Credits 23,142 18,577 23,142 18,577 Income from Special Operations 13,158 13,033 13,158 13,033 Personnel expenses – Reversal of provisions

8,811 33,149 8,811 33,149 Foreign exchange gains

-- 488,217 -- 488,217 Others 24,569 120,817 149,615 130,645 Total 1,226,773 1,351,537 1,322,460 1,362,477

f) Tax Expenses BB-Domestic and foreign branches BB- Consolidated

3Q/2008 3Q/2007 3Q/2008 3Q/2007 ISSQN (99,117) (100,080) (118,371) (107,522) COFINS (314,774) (305,283) (362,630) (316,911) PIS/PASEP (51,151) (49,609) (60,226) (51,498) Others (14,460) (34,122) (35,516) (36,953) Total (479,502) (489,094) (576,743) (512,884)


43

g) Other operating expenses


3Q/2008 3Q/2007 3Q/2008 3Q/2007 Securitization SWIFT MT100 – liabilities with the SPC (1) (22,533) (21,759) -- -- Premium paid to clients - Loyalty Program (309,343) (106,097) (309,343) (106,097) Restatement of guarantee deposits (180,081) (69,576) (180,081) (69,576) CASSI – Expense with provision (CVM Resolution 371) (142,847) (114,161) (142,847) (114,161) Credit card transactions (124,725) (95,399) (124,725) (95,399) Updating of the pension liability (106,999) (51,527) (106,999) (51,527) Previ– Actuarial Asset Amortization – CVM Resolution n.º 371 (88,376) (95,844) (88,376) (95,844) Errors and fraud (35,335) (24,244) (35,335) (24,244) Expenses from discounts granted on renegotiations – other credits (18,660) (19,540) (21,029) (19,540) Hybrid Capital and Debt Instruments (19,398) (18,634) (19,398) (18,634) Expenses of BB – ATM (18,031) (27,304) (18,031) (27,304)

Law 9138/95 - Restatement of funds to be returned to the Federal Treasury (13,520) (10,418) (13,520) (10,418)

Expenses with restatement – Interest on own capital/Dividends (12,808) (7,884) (12,808) (7,884) Foreign exchange adjustments (9,343) (485,669) (9,343) (485,669) Interest on funds allocated for payment of benefits (5,976) (50,589) (5,976) (50,589) Fees for the use of Sisbacen (3,977) (3,278) (3,977) (3,278) Others (2) (100,317) (77,594) (304,022) (94,318) Total (1,212,269) (1,279,517) (1,395,810) (1,274,482) (1) In BB-Consolidated, these obligations are classified as “Foreign marketable securities” because of the consolidation of the foreign Special Purpose Entities (SPE). (2) Includes the amount of R$ 203,958 thousand, referring to Other Operating Expenses of non-financial Subsidiaries/Associated Companies included in the consolidation.

h ) Non-operating income


3Q/2008 3Q/2007 3Q/2008 3Q/2007 Non-operating income 37,554 48,516 168,939 56,907 Profit on the sale of assets (1) 2,422 21,940 90,973 22,110 Capital gains 2,452 938 2,457 7,957 Rental income 3,170 3,322 4,206 3,430 Provision/(reversal) for devaluation of other assets 11,327 5,426 11,364 5,428 Provision/(reversal) for loss with shares and quotas -- 1,065 -- 1,607 Profit on the sale of other assets 16,659 14,009 16,659 14,009 Other non-operating income (2) 1,524 1,816 43,280 2,366 Non-operating expenses (21,657) (14,024) (63,960) (14,230) Loss in Membership Certificates -- -- (310) -- Loss on sale of assets (3) (332) (158) (37,850) (158) Capital losses (4,183) (3,867) (4,272) (3,867) devaluation of other assets (13,195) (9,628) (13,195) (9,631) Losses with shares and quotas (3,485) -- (3,485) (186) Other non-operating expenses (462) (371) (4,848) (388) Total 15,897 34,492 104,979 42,677 (1) Includes the gain with the sale of other assets of the Seguros Aliança do Brasil Inc., in the third quarter/2008-consolidated, in the amount of R$ 87,783 thousand. (2) Includes the gain with non-operating income of the non-financial subsidiaries, in the third quarter/2008-consolidated, in the amount of R$ 41,687 thousand. (3) Includes the loss with the sale of other assets of the Seguros Aliança do Brasil Inc., in the third quarter/2008-consolidated, in the amount of R$ 37,518 thousand


44

21 – Stockholders' Equity a) Book Value and Market Value of the Share Stockholders' equity of R$ 27,888,850 thousand (R$ 23,065,294 thousand at September 30, 2007) corresponds to a net book value of R$ 10.87 per share (R$ 9.32 at September 30, 2007). The market value of the common share at September 30, 2008 was R$ 22.75 (R$ 30.89 at September 30, 2007). b) “C” subscription bonuses Of the subscription bonuses issued by the Bank, the remaining balance of 5,880,483 “C” Bonus, that can be exercised up to the original terms – 03.31.2011 to 06.30.2011. c) Capital Capital is R$ 13,699,012 thousand (R$ 12,710,693 thousand in 09.30.2007), totally paid-up, comprising 2,565,255,836 common shares with no par value. The Federal Treasury is the controlling stockholder. The capital increase in the amount of R$ 487,368 thousand, resulted from the takeover of Besc/Bescri, which had been submitted for the Central Bank of Brazil’s approval. d) Revaluation reserves These refer to a revaluation of assets carried out by the companies Kepler Weber, Pronor, and Cobra Tecnologia S.A. The realizations of the reserves in the period, totaling R$ 58 thousand (R$ 80 thousand at September 30, 2007), were transferred to the "Retained earnings (accumulated losses)" account. As regards the remaining balance, it will be held up to the date of its effective realization, in conformity with CMN Resolution n.º 3,565, of 5.29.2008. e) Capital and profit reserves

09.30.2008 09.30.2007 Capital reserves 5,189 38

Revenue reserves 12,749,556 8,932,907

Legal Reserve 1,548,351 1,219,725

Statutory Reserves (1)

6,432,499 2,944,476

Expansion Reserve (2)

4,768,706 4,768,706 (1) Includes the Reserve for Operating Margin and the Reserve for Equalization of Dividends. - The purpose of the first is to guarantee an operating margin compatible with the development of the company's transactions, comprised of the portion of up to 100% of the balance of net income, up to the limit of 80% of the capital. - The second guarantees financial resources for the payment of dividends, comprised of the portion of up to 50% of the balance of net income, up to the limit of 20% of the capital. (2) Its objective is to provide support to the expansion and technological modernization policy of the company.

f) Interest on own capital / Dividends

3Q/2008 3Q/2007

1 – Net income for the period 1,866,957 1,364,037

2 - Interest on own capital allocated to the stockholders 405,930 333,372

3 - Dividends allocated to the stockholders 340,853 212,243

Total allocated to the stockholders (Item 2 + Item 3) 746,783 545,615 According to Laws n.o 9,249/1995 and 9,430/1996 and the Bank's Bylaws, Management decided on the payment of Interest on Own Capital to its stockholders, imputed to the dividends value, plus additional dividends, equivalent, in the 1semester/2008, to 40% of net income.

The total amount of Interest on Own Capital of the 3 quarter/2008 comes to R$ 405,930 thousand, which brought about a reduction in tax charge expenses in the amount of R$ 162,372 thousand. Interest on Own Capital and Dividends referring to the 3 quarter/2008 will be based on the share position of 09.23.2008 and 11.13.2008, respectively, and will be paid on 11.25.2008.


45

g) Payments/Accruals of Interest on Own Capital and Dividends

3º quarter of 2008 Per share Gross amount IRRF Net amount Interest on own capital allocated 0.293 746,783 (12,347) 734,436

Interest on own capital 0.159 405,930 (12,347) 393,583 Paid -- -- -- -- Allocated 0.159 405,930 (12,347) 393,583 Dividends 0.134 340,853 -- 340,853 Paid -- -- -- -- Allocated 0.134 340,853 -- 340,853 3º quarter of 2007 Per share Gross am ount IRRF Net

Interest on own capital allocated 0.220 545,615 (8,491) 537,124 Interest on own capital paid 0.135 333,372 (8,491) 324,881 Dividends Paid 0.085 212,243 -- 212,243

h) Mark-to-Market - Securities and Derivatives

2008 2007

06.30.2008 Balance

Net changes for the quarter

09.30.2008

Balance

06.30.2007

Balance

Net changes for the quarter

09.30.2007

Balance

Securities available for sale Multiple Bank (128,143) (21,072) (149,215) 280,475 (128,924) 151,551 Subsidiaries and affiliates 130,714 (77,974) 52,740 322,933 21,265 344,198 Tax effects 55,420 7,689 63,109 (160,222) 48,288 (111,934) Total 57,991 (91,357) (33,366) 443,186 (59,371) 383,815 i) Shareholdings (quantity of shares) Shareholdings at September 30, 2008 of all those who hold, directly or indirectly, more than 5% of the Bank capital:

Stockholders Total shares % Total Federal Treasury 1,660,334,789 64.7%

Banco do Brasil Employees Retirement Fund (PREVI) 266,178,012 10.4% BNDES Participações S.A. – BNDESPar (1) 64,005,679 2.5% Besc e Bescri – Shares under approval (2) 23,074,306 0.9% Other shareholders (2) 551,663,050 21.5% Total 2,565,255,836 100.0%

(1) Linked to the controller. (2) Ações emitidas pelo Banco do Brasil e não vinculadas aos acionistas, aguardando homologação do processo de incorporação do Besc e Bescri pelo Banco ral do Brasil e o cumprimento do prazo de exercício do direito de recesso dos acionistas minoritários das instituições incorporadas. Do total das ações emitidas, aproximadamente 96% pertencem ao Tesouro Nacional e o restante à Companhia de Desenvolvimento do Estado de Santa Catarina-Codesc e demais acionistas minoritários. .

Changes in ownership of the parties referred to in the previous paragraph of these securities during the preceding twelve months and characteristics of the securities issued by the Bank and directly or indirectly held by the controlling stockholder, management and members of the Fiscal Council, the Internal Audit and by the Audit Committee.

Controlling Group 09.30.2008 09.30.2007 Federal Treasury 1,660,334,789 1,700,334,789 Previ 266,178,012 283,246,012 BNDESPar 64,005,679 124,812,156 Total 1,990,518,480 2,108,392,957


46

Common shares (ON) (1) C Bonds 09.30.2008 09.30.2007 09.30.2008 09.30.2007 Board of Directors 33 13 -- -- Executive Board of Directors (2) 7,017 6,481 21 21 Board of Directors 14,753 8,472 28 45 Fiscal Council -- -- -- -- Audit Committee 1,729 -- -- --

(1) The shareholding interest of the Board of Directors, Steering Committee, Executive Board, Fiscal Council, Audit Committee and Internal Audit represents approximately 0.0009%, on 9.30.2008 (0.0006% on 9.30.2007), of the Bank's capital stock. (2) Excepting for the shares of the President that are contemplated in the Board of Directors.

j) Quantity of Shares in the Market BB Shares Quantity Percentage

In the market (1) 551,641,247 21.50% Total issued 2,565,255,836 100.0%

(1) As per Law No 6,404/1976.

k) Free Float

BB shares Quantity % Free Float em 30.09.2008 (1) 551,641,247 21.50%

Total issued 2,565,255,836 100.00% (1) Pursuant to the regulation of the New Market of Bovespa.


47

22 – Income Tax and Social Contribution on Net Income a) Details of income tax and social contribution ex pense

BB-Consolidate 3º quarter/2008 3º quarter/2007

Income tax Social contribution

Income tax Social contribution

a) Present values (556,518) (349,163) (440,459) (156,784) Domestic income tax and social contribution (556,512) (349,163) (427,370) (156,784) Foreign income tax (6) -- (13,089) -- b) Deferred tax liabilities (87,150) (51,419) (24,123) (10,264) Provision)/reversal of deferred income tax on the adjustment of the portfolio and depreciation (leasing operations) (21,831) -- (2,723) --

(Provision)/reversal of provision for deferred taxes - positive MTM (14,501) (19,709) 1,910 1,188 (Provision)/reversal of deferred income tax on the sale of investments in installments (BB-BI) -- -- -- --

(Provision)/reversal of provision for deferred taxes - restatement of judicial deposits (45,348) (27,209) (36,876) (13,275)

(Provision)/reversal of provision for deferred taxes - Net income abroad (12,927) (9,164) (2,866) (3,200) (Provision)/reversal of provision for deferred income tax on transactions carried out in the futures market 7,457 4,663 16,432 5,023

c) Provision (a+b) (643,668) (400,582) (464,582) (167,048) d) Deferred tax credits 462,757 365,603 250,352 88,686 Recording/(reversal) of tax credits on temporary differences 428,887 555,454 222,273 79,806

(Recording)/reversal of tax credit on income tax and social contribution losses 19,372 59,452 32,209 10,341

(Recording)/reversal of tax credits - negative MTM 14,498 (249,303) (4,130) (1,461)

Recording/(Reversal) of Tax Credits on Transactions Carried out in the Futures Market -- -- -- --

e) Total income tax and social contribution expense (c+d) (180,911) (34,979) (214,230) (78,362)

b) Reconciliation of income tax and social contribu tion expense

BB – Consolidate

3º quarter/2008 3 º quarter/2007 Income tax

Profit before taxation and profit sharing 2,323,563 1,831,413

Total income tax charge (rate of 25%) (580,891) (457,853)

Charges upon Interest on Own Capital 101,482 83,344

Effects of non-taxable income 419,280 285,825

Effects of non-deductible expenses (618,714) (592,510)

Effects of foreign profits 74 (14,556)

Employee profit sharing -- --

Deferred charges on mark-to-market adjustments (1,548) 803

Others 483,300 472,573

Fiscal incentives (workers meal program, culture and others) 16,106 8,144

Income tax expense (180,911) (214,230)

Social contribution

Profit before taxation and profit sharing 2,323,563 1,831,413

Total social contribution charge (rate of 9%)(1) (209,121) (164,827)

Charges upon Interest on Own Capital 36,534 30,003

Effects of non-taxable income 143,300 102,784

Effects of non-deductible expenses (222,882) (213,249)

Employee profit sharing -- --

Deferred charges on mark-to-market adjustments (719) 289

Others 217,909 166,638

Social contribution expense (34,979) (78,362)

(1) From 1.1.2003 to 4.30.2008, the rate of CSLL in force was 9%, pursuant to Law 10,637, of 12.30.2002. As of May/2008, the rate of CSLL was increased to 15%, pursuant to Law n.º 11,727, of 6.23.2008.


48

c) Lawsuit: Interest on Own Capital Tax Benefit

c.1) In February 1998, the Bank filed a legal request for the full offset of prior year income tax and social contribution on net income losses against taxable income. Since then, the Bank has offset these tax losses in full against income tax and social contribution taxable income and has made judicial deposits of the taxes otherwise due (on 70% of the amount offset). These deposits prompted the Federal District 16th Court to issue a dispatch recognizing the suspension of payment of these taxes until final judgment of the Bank's request, based on article 151, II, of the Tax Code. Since 10.1.2002, the proceeding has been awaiting judgment of an extraordinary appeal by the Federal Supreme Court. c.2) The offsetting of amounts of fiscal loss and CSLL recoverable results in the write-off of deferred tax credits, observing the limitation of 30%. c.3) In compliance with the prohibition contained in CMN Resolution n.º 3,535/2008, judicial deposits of the amount of R$ 10,698,212 thousand (principal plus interest) were not deducted from the corresponding provisions in the manner provided for in item 53 of CVM Resolution n.º 489/2005, with a negative impact on the Basel Ratio. c.4) Deferred taxes (corporate income tax (IRPJ) and social contribution on net income (CSLL) on the restatement of judicial deposits are being offset with the tax credits resulting from the provision related to that judicial deposit, in conformity with § 3,059, item II, art. 2002 of Bacen/CMN Resolution 2,002/2002, with no impact on net income. c.5) If the Bank were successful in its lawsuit, we would verify that on September 2005 the Bank would have consumed the entire stock of Tax Loss. Therefore, since the period beginnig October 2005, the amount of Income Tax would be being paid in full. There would also be a remaining balance of recoverable tax credit of CSLL of R$ 129,276 thousand. Additionally, there would be a transfer of resources from the account used to record judicial deposits to that of cash and cash equivalents. The tax credits relating to judicial deposits (principal) would be written off against provision for IRPJ and CSLL and provision for tax risks relating to the restatement of deposits, of the amount of R$ 3,931,293 thousand, would be reverted against net income. The net positive impact of this provision on net income would support the calculation of the BIS ratio by 2.20% (from 13.57% to 15.77%). c.6) If the Bank were unsuccessful in its lawsuit the amounts deposited judicially would be converted into income in favor of the National Treasury. The portions of IRPJ tax credits on tax loss that could be utilized since the period beginning in October 2005, observing the limitation of 30%, would be reclassified to the account representing "IRPJ recoverable" assets. This IRPJ recoverable, which would result from the adjustments to the Statements of Economic-Fiscal Information of Individuals, corresponds to R$ 1,583,862 thousand as of September 2008 and its interest adjustment using the Selic Rate since January 2006 corresponds to R$ 172,968 thousand. This sum adjusts the provision for tax risks in connection with the updating of court deposits (please see item 22.c.5), so that its sum will be sufficient to fully cancel the risk of a likely loss. c.7) The amounts relating to this matter are as follows: 09.30.2008 09.30.2007

Judicial Deposits 10,698,212 9,398,397 Original amounts 6,470,246 5,910,981 Restatement 4,227,966 3,487,416 70% thereof 6,557,444 5,951,395 Income tax losses 3,002,033 3,002,033 CSLL / CSLL losses to offset 3,555,411 2,949,362


49

23 – Tax credits

a) Tax credits recorded as assets BB-Consolidate 09.30. 2008 09.30.2007

Income

tax Social

contribution Income

tax Social

contribution Nature and origin:

a) Income tax and social contribution losses 110,019 3,765 98,358 15,740 b) Timing differences 6,868,370 2,692,126 5,859,068 2,099,492

c) Negative mark-to-market adjustments 124,961 60,992 20,349 6,597 d) Social contribution to offset -- 129,276 -- 872,969 e) Negative adjustments of futures market transactions 1,422 740 -- --

f) Tax credits - writ of mandamus 1,418,171 3,540,882 1,983,627 2,908,948 g) Tax credits abroad 18,139 -- 11,641 -- h) Total income tax and social contribution credits recorded (a + b + c + d + e+ f + g) 8,541,082 6,427,781 7,973,043 5,903,746

Pasep Cofins Pasep Cofins i) Negative mark-to-market adjustments 3,467 21,338 539 3,316 j) Adjustments of futures market transactions 34 207 -- -- k) Total PASEP and COFINS credits recorded (i + j) 3,501 21,545 539 3,316 l) Total tax credits not recorded (h + k) 8,544,583 6,449,326 7,973,582 5,907,062

The tax credits recorded include Social Contribution to Offset relating to tax credits calculated at the rate of 18% on tax losses and temporary differences existing on December 31, 1998. Article 8 of Provisional Measure (MP) 2158-35/2001 reduced the rate of social contribution from 18% to 8% and authorized the maintenance of this credit classified in Other Receivables - Sundry. At September 30, 2008, the balance of this account amounted to R$ 129,276 thousand. From 1.1.2003 to 4.30.2008, the rate in force of CSLL was 9%, pursuant to Law 10,637, of 12.30.2002. As of May 1 2008, the rate of CSLL was increased to 15%, pursuant to Law n.º 11,727, of 6.23.2008. b) Tax credits not recorded

BB-Consolidate 09.30.2008 09.30.2007

Income Social Income Social tax contribution tax contribution Nature and origin: a) Income tax and social contribution losses 33,843 23,010 33,830 9,633

b) Timing differences 1,042 1,387,673 1,045 -- c) Negative mark-to-market adjustments -- 8,904 -- --

d) Accounting losses of foreign entities in countries with favorable taxation -- -- e) Tax credits abroad 40,706 -- 51,429 -- f) Total income tax and social contribution credits not Recorded (a + b + c + d + e)

75,591 1,419,587 86,304 9,633

Pasep Cofins Pasep Cofins g) Total PASEP and COFINS tax credits not recorded -- -- h) Total PASEP and COFINS tax credits not recorded (f + g) 75,591 1,419,587 86,304 9,633

Provisional Measure no. 413 dated January 3, 2008 raised the financial industry's Social Contribution rate from 9% to 15% as of May 1, 2008, giving rise to an increase in the Social Contribution expenses, as well as in tax credits. Considering that some financial institutions have been going to court with individual lawsuits challenging the increase of the rate of CSLL and that the National Confederation of the Financial System - filed a Direct Unconstitutionality Lawsuit - ADIN, the Multiple Bank has been recognizing tax credits in sufficient amount to annul, the impact on income resulting from the increase of the rate (6%) on the CSLL tax liabilities (current and deferred), a procedure that will be maintained until the pronouncements of ADIN allow the Bank to determine whether the remaining balance of unrecorded CSLL tax credits resulting from the increase of the rate (R$ 1.39 billion) should or should not be recorded.


50

c) Entries and write-offs of the period BB -Consolidate

09.30.2008 09.30.2007 Income Social Income Social

tax contribution tax contribution Entries of the period

a) On income tax and social contribution losses 37,258 9 41,995 11,278

b) On timing differences (1)

877,160 541,372 675,292 240,421

c) On negative mark-to-market adjustments 47,998 33,597 1,158 414

d) Tax credits abroad 9,011 -- 1,773 --

e) Relating to negative futures market adjustments 1,422 740 -- --

f) Tax credits - writ of mandamus (2)

-- 533,949 1,983,627 2,908,948

g) Total income tax and social contribution tax re corded (a + b + c + d + e + f) 972,849 1,109,667 2,703,845 3,161,061

Pasep Cofins Pasep Cofins

h) Relating to negative mark-to-market adjustments 1,352 8,323 31 193

i) Related to negative adjustment on future transactions 34 207 -- --

j) Total amount of Pasep and Cofins tax credits formed (h) 1,386 8,530 31 193

k) Total tax credits recorded (g + j) 974,235 1,118,197 2,703,876 3,161,254

(1) It includes R$ 180,337 thousand (Income Tax) and R$ 125,082 thousand (Social Contribution), related to the activation of tax credits on permanent differences, deriving from adjustments resulting from the merging process of Besc S.A. and Besc S.A. Crédito Imobiliário – Bescri. (2) The tax credits that had been written off since the beginning of the lawsuit, referring to the full carryforward of the accumulated tax loss of Income Tax and of the negative bases of Social Contribution Tax, were reactivated in contra account to the re-formation of provision relating to the portion of 70% of IRPJ and of CSLL, for which judicial deposits were formed in the amount of R$ 6,470,246 thousand (Note 22.c.7).

BB-Consolidate

09.30.2008 09.30.2007

Income Social Income Social

tax contribution tax contribution

Write-offs in the period

a) Relating to income tax & social contribution losses 16,166 6,846 -- 658

b) Relating to timing differences 6,135 319 5,163 1,649

c) Relating to social contribution to offset (PM No. 1858/1999) -- 603,717 -- 537,673

d) Relating to negative mark-to-market adjustments 1,000 -- 27,811 10,094

e) Tax credits abroad -- -- -- --

f) Arising from futures market transactions -- -- -- --

g) Tax Credits - writ of mandamus 443,332 -- -- --

h) Total IRPJ and CSLL tax credit write-offs ( a + b + c + d + e + f + g) 466,633 610,882 32,974 550,074

Pasep Cofins Pasep Cofins

i) Relating to negative mark-to-market adjustments -- -- 766 4,706

j) Relating to negative futures market adjustments -- -- -- --

k) Total PASEP and COFINS credits reversed (i + j) -- -- 766 4,706

l) Total tax credits reversed (h + k) 466,633 610,882 33,740 554,780


51

d) Deferred tax liabilities

BB-Consolidated

09.30.2008 09.30.2007

Income Social Income Social

tax contribution tax contribution

a) Arising from sale of investments -- --

b) Arising from mark-to-market adjustments 69,770 55,614 117,044 42,164

c) Arising from leasing portfolio adjustment 107,620 -- 59,998 --

d) Arising from tax incentive depreciation -- -- -- --

e) Entities abroad 2,851 -- 3,197 --

f) Arising from restatement of judicial deposits -- -- -- --

g) Arising from foreign profits 17,681 16,254 16,799 10,137

h) Arising from futures market transactions 229 129 15,493 5,587

i) Others 12,506 7,392 -- -- j) Total deferred income tax and social contributio n liabilities (a+b+c+ d + e + f + g + h+ i) 210,657 79,389 212,531 57,888

Pasep Cofins Pasep Cofins k) Arising from mark-to-market adjustments 1,902 11,708 3,204 19,719

l) Arising from restatement of judicial deposits 20,085 123,603 15,913 97,926

m) Arising from futures market transactions 1 6 423 2,604

n) Others 341 2,099 -- --

o) Total amount of deferred tax liabilities of Pas ep and Cofins ( k + l + m+n) 22,329 137,416 19,540 120,249

p) Total deferred tax liabilities (j + o) 232,986 216,805 232,071 178,137

e) Estimates of the realization of tax credits reco rded Multiple Bank

09.30.2008 Par Value Present Value

In 2008 1,598,000 1,513,000 In 2009 3,925,000 3,561,000 In 2010 3,240,000 2,796,000 In 2011 2,941,000 2,430,000 In 2012 2,213,000 1,758,000 In 2013 29,000 22,000 Total tax credits 13,946,000 12,080,000 The above estimates of realization of tax credits were based on a technical study carried out as of December 31, 2007. In 2008, it was observed the realization of tax credits in Banco do Brasil in the amount of R$ 2,220,720 thousand, corresponding to 73.53% of the consumption forecast of technical study carried out in 12.31.2007 (R$ 3,020,000 thousand). f) Realization of Nominal Amounts of Credits The realization of nominal amounts of activated tax credits, considering the re-composition of those written off over the course of the lawsuit (70%), based on a technical study carried out by the Multiple Bank (as of 12.31.2007), is projected for 6 years, in the following proportions: Tax loss /CSLL recoverable (1) Intertempo ral Differences (2)

In 2008 13% 11% In 2009 34% 25% In 2010 16% 27% In 2011 17% 23% In 2012 19% 14% In 2013 1% --

This study also shows the tax credits recorded as assets at present values based on the average funding rate of the Multiple Bank. (1) Projection of consumption associated with the capacity to generate taxable bases of IRPJ and CSLL in subsequent periods. (2) The consumption capacity results from the movements of provisions (expectation of reversals, write-offs and uses).


52

g) Other information Deferred fiscal liabilities or assets, respectively, are formed on positive or negative adjustments resulting from the transactions performed in future settlement markets in the period from 1.1.2005 to 02.28.2006 (validity period of taxation on the cash basis, pursuant to art. 32 of Law 11,051/2004 and art. 110 of Law 11,196/2005), and will be realized as the transactions are settled.


53

24 – Equity in the Earnings (Loss) of Subsidiary an d Associated Companies a) BB- Domestic and Foreign branches

Equity Income Result Book Value

DESCRIPTION Realized Capital

Adjusted Stockholders

’ Equity

Our Interest

(%)

Dividends -JCP

Operational

Exchange variation

09.30.2008 09.30.2007

30.09.2008 30.09.2007

SUBSIDIARIES

BAMB-Brasilian American Merchant Bank 461,198 641,413 100.00 -- 6,489 100,762 107,251 (12,671) 641,413 591,828

Banco do Brasil AG. Viena (Áustria) 50,647 97,028 100.00 -- 2,565 6,579 9,144 2,458 97,028 86,563

BB Leasing Company Ltd. -- 79,337 100.00 -- 831 13,227 14,058 (2,284) 79,337 72,548

BB Securities LLC 9,568 3,424 100.00 -- (483) -- (483) (364) 3,424 6,443

BB Administradora de Cartões de Crédito S.A. 9,300 24,413 100.00 -- 1,924 -- 1,924 (3,336) 24,413 25,999

BB Administradora de Consórcios S.A. 14,100 21,194 100.00 -- 4,274 -- 4,274 7,986 21,194 24,454

BB Corretora de Seguros e Administradora de Bens S.A. 26,918 78,268 100.00 -- 12,814 -- 12,814 15,776 80,165 87,023

BB Gestão de Recursos – Distribuidora de Títulos e Valores Mobiliários S.A. 103,142 225,171 100.00 -- 106,497 -- 106,497 100,637 225,171 221,944

BB Banco de Investimento S.A. 1,589,399 2,057,485 100.00 -- 254,826 -- 254,826 189,256 2,057,485 2,045,652

BB Leasing S.A. - Arrendamento Mercantil 61,860 63,845 100.00 -- (997) -- (997) 8,369 63,845 71,744

BB Banco Popular do Brasil S.A. 165,155 20,834 100.00 -- 2,222 -- 2,222 (3,995) 20,833 17,306

BESC Financeira S.A. – Bescredi (1) 15,473 18,744 99.58 -- -- -- -- -- 18,995 --

BESC Distribuidora de Títulos e Valores Mobiliários S.A. – Bescval (1) 5,857 7,922 99.62 -- -- -- -- -- 7,922 --

BESC S.A. Arrendamento Mercantil – BESC Leasing (1)

17,969 19,501 99.00 -- -- -- -- -- 19,501 --

Cobra Tecnologia S.A. 17,183 (64,811) 99.35 -- (4,308) -- (4,308) (4,291) -- --

Other participation by incorporation (1) -- -- -- -- -- -- -- -- 4,621 --

ASSOCIATED COMPANIES

Cadam S.A. 183,904 266,947 21.64 -- (1,375) -- (1,375) (4,056) 57,767 67,629

Subtotal -- -- -- -- 385,279 120,568 505,847 293,485 3,423,114 3,319,133

Abroad

Foreign exchange gain/losses in branches -- -- -- -- -- 372,980 372,980 (77,523) -- --

Increase/decrease in stockholders’ equity arising from other movements -- -- -- -- 1,981 -- 1,981 2,394 -- --

Total -- -- -- -- 387,260 493,548 880,808 218,356 3,423,114 3,319,133

(1) Participation acquired via Besc incorporation. b) BB-Consolidated

Equity Income Result Book Value DESCRIPTION

Realized Capital

Adjusted Stockholders’

Equity

Our Interest

(%)

Dividends- JCP

Operational

Exchange

variation

Provision 09.30.2008 09.30.2007 09.30.2008 09.30.2007

INTEREST - BB MULTIPLE BANK


participation by incorporation (1) -- -- -- -- -- -- -- -- -- 4,621 --

Associated companies

Cadam S.A. 183,904 266,947 21.64 -- (1,375) -- -- (1,375) (4,056) 57,767 67,629

Subtotal -- -- -- -- (1,375) -- -- (1,375) (4,056) 62,388 67,629

INTEREST - BB INVESTMENT BANK


Itapebi (2) 105,000 253,888 19.00 594 3,039 -- -- 3,039 5,712 48,239 53,438

Estruturadora Brasileira de Projetos – EBP (3)

8,001 7,926 11.11 -- (8) -- -- (8) -- 881 --

BAF S.A., “em liquidação” (4) 203,498 4,045 100.00 -- -- -- 89 89 (132) 4,369 4,369

Cia de Seguros Aliança do Brasil (5) -- -- -- -- -- -- -- -- -- 581,448 --

Other participation (6) -- -- -- -- 2,398 -- -- 2,398 -- 44,450 --

Subtotal -- -- -- 594 5,429 -- 89 5,518 5,580 679,387 57,807


54

INTEREST OF BB GESTÃO DE RECURSOS - DISTRIBUIDORA DE TÍTULOS E VALORES MOBILIÁRIOS S.A.


Pronor (7) 154,686 174,348 12.02 -- (20) -- -- (20) (892) 20,957 19,686

Subtotal -- -- -- -- (20) -- -- (20) (892) 20,957 19,686

ABROAD

Foreign exchange gain/losses in branches

-- -- -- -- -- 372,980 -- 372,980 (77,523) -- --

Foreign exchange gain/losses in subsidiaries

-- -- -- -- -- 120,568 -- 120,568 (28,368) -- --

Gain/(losses) exchange in other participations

-- -- -- -- -- (3,862) -- (3,862) -- -- --

Increase/decrease in stockholders’ equity arising from other movements -- -- -- -- 1,981 -- -- 1,981 2,394 -- --

Other participation

Non financial companies – subsidiarys and associated companies (8)

-- -- -- -- -- -- -- -- 153,027 -- 1,087,525

Total -- -- -- 594 6,015 489,686 89 495,790 50,162 762,732 1,232,647

(1) Companies controled by BESC S.A. – incorporated by Banco do Brasil at september 30, 2008. (2) Financial information refers to august 2008. Equity income as adjusted by fiscal incentives investments. (3) As at 07.28.2008, Banco do Brasil subscribed 88,945 on shares of EBT – Estruturadora Brasileira de Projetos in the amount of R$ 889 thousand. (4) In the Shareholders Meeting held as of April 30, 2005 it was decided to start the liquidation process for the Company. Due to this fact, the Bank started to use the equity

method during 2005 second semester. (5) Goodwill on shares acquisition of 219,257 ordinary shares of CIA de Seguros Aliança da Bahia, fundamented by future profitability. (6) Refers basically to the participations owned by the non financial associated companies: Kepler Weber (R$ 31,603 thousand) and CIA Brasileira de Soluçoes e Serviços

– Visa Vale (R$ 10,828 thousand). (7) Information refers to the period from June/2008 to August/2008. (8) Refers to subsidiaries and associated companies wich is consolidated starting on the first quarter 2008. See note 2.


55

25 – Related-party Transactions Transactions with consolidated or non-consolidated entities. The account balances resulting from transactions among the Bank's consolidated entities are excluded from the Consolidated Financial Statements. Hence, transactions with related parties disclosed above include only the non-consolidated companies that are assessed by means of the Equity Accounting Method (MEP), in addition to Banco do Brasil's shareholders. In relation to the majority shareholder, "Tesouro Nacional", transactions with the Federal Government and with the entities associated therewith, such as public companies, private and public joint stock companies and other federal authorities that maintain banking operations with the Bank, are included. The Bank has only normal banking transactions with these related parties, such as interest bearing and non-interest bearing deposits, loans, and sale and repurchase transactions. There are also service provision and guarantee agreements. These transactions with related parties are conducted under normal market conditions, substantially under the terms and conditions for comparable transactions with unrelated parties, including interest rates and collateral. These transactions do not involve abnormal payment risks. Other transactions with related parties The Bank does not grant loans to its officers or members of its Board of Directors, Audit Committee and Fiscal Council, because this practice is prohibited in all the financial institutions regulated by Central Bank of Brazil. The Bank regularly contributes to Fundação Banco do Brasil - FBB, as provided in article 29, paragraph XII, of the Bank's By-laws. The contributions are intended to fund the Foundation's social purposes and are limited to 5% of the Bank's operating income. The amount contributed to Fundação Banco do Brasil until september of 2008, was R$ 13,250 thousand (R$ 20,000 thousand until september of 2007). The resources allocated to funds and programs originating from the onlending of Official Institutions are listed in note 16. Summary of transactions with related parties Banco do Brasil's balance of assets and liabilities with related parties are as follows: 09.30.2008 09.30.2007

Assets Securities 545 551

Loan operations 1,917,815 3,033,613

Receivables from related companies 87,952 57,888

Total 2,006,312 3,092,052

Liabilities

Demand deposits 1,126,015 1,768,147

Remunerated time deposits 4,495,366 2,238,447

Deposits received under security repurchase agreements 1,086,963 1,150,623

Total 6,708,344 5,157,217

Below follows the sum of the key expenses and revenues with related parties during the period: 3Q/2008 3Q/2007 Interest and service fee revenues 269,084 255,754

Expenses with funding (111,188) (105,390)

Net total 157,896 150,364


56

26 - Operational Limits – Basel Accord The BIS ratio of the 3rd quarter/2008 was determined according to the criteria established by CMN Resolutions 3,444/2007 and 3,490/2007, which address the calculation of Referential Equity Amount (RE) and of Required Referential Equity Amount (RRE), respectively. We present below the calculation of the BIS ratio, pursuant to regulations in force and applicability as of July/2008:

09.30.2008 Economic -

Financial Financial

RE - REFERENTIAL EQUITY AMOUNT 35,271,041 35,990,703 Nível I 23,953,979

23,970,844

Shareholders' equity 27,888,850 27,888,850 Revaluation reserves (7,370) (7,370)

Deferred Assets (351,762) (334,897) Mark-to-market 126,016 126,016 Tax credits excluded from Level I of RE (22,477) (22,477) Tax credits exceeding 40% RE level I (3,679,278) (3,679,278) Level II 11,317,062 12,019,859 Mark-to-market (126,016) (126,016) Financial instruments excluded from RE (710,666) (7,869) Subordinated Debt Qualifying as Capital 11,208,759 11,208,759 Funds obtained from the FCO 10,658,585 10,658,585 Funds obtained abroad 550,174 550,174 Hybrid Capital and Debt Instruments 937,615 937,615 Revaluation reserves 7,370 7,370 RRE – Required Referential Equity amount 29,813,415 29,164,574 Credit Risk 29,310,091 28,661,250 Market Risk 102,420 102,420 Operating Risk 400,904 400,904 Surplus/(Insufficiency) of stockholders' equity: RE -RRE 5,457,626 6,826,129 BIS Ratio: (RE x 100)/ (RRE / 0.11) 13,01 13,57

Follow the main indicators of the third quarter/2007, in conformity with CMN Resolution 2.099 of 1994:

09.30.2007

REFERENTIAL EQUITY AMOUNT

Required Referential Equity amount BIS Ratio

Surplus/(Insufficiency) of stockholders' equity: RE -

RRE

32,469,510 22,698,393 15.74% 9,771,117

On September 30, 2008, tax credits that surpassed the 40% limit of Level I RSE (R$ 3,679,278 thousand), as per the restriction determined by article 4 of CMN Resolution 3.059/2002, were excluded from Level I Referential Shareholders’ Equity and from Referential Shareholders’ Amount to Required to determine the BIS Ratio, resulting in its reduction by 0.79 base points. In connection with note 22.c.5, in the event of success in the lawsuit for full compensation of accumulated tax loss of Income Tax and of negative bases of Social Contribution, there would be a positive impact on the BIS ratio of the consolidated financial statement of 2.20% (from 13.57% to 15.77%).


57

27 – Retirement and Pension and Health Plans a) Caixa de Previdência dos Funcionários do Banco d o Brasil – Previ Banco do Brasil is the sponsor of Caixa de Previdência dos Funcionários do Banco do Brasil (PREVI) which provides participants and their dependents with benefits which are complementary or similar to those of the Basic Government Retirement Plan. The plans offered through PREVI include both defined contribution (Plano Previ Futuro) and defined benefit (Plan n.° 1) plans, the latter having adopt ed the capitalization method for actuarial calculations. On September 30, 2008 Previ had 146,447 participants, with 35,166 active participants of Benefit Plan n.º1, 47,299 active participants of Plano Previ Futuro and 63,982 retirees (on September 30,2007 there were 138,266 participants, of which: 36,831 were active participants of Benefit Plan n.º1, 37,996 were active participants of Plano Previ Futuro and 63,439 were retired employees). a.1) The funding of the vested and unvested benefits is summarized as follows: Participants employed before April 14, 1967, who were not retired and who were not in a position on that date to request their retirement, contemplated in the contract signed on December 24, 1997 between the Bank and PREVI (Plan n.° 1): the sponsor assumes the commitment for the payment of pensions for this group; mathematical reserves ensuring benefits corresponding to such group are fully paid-up at Previ. The retirement benefit of this group is characterized as a defined contribution. Participants employed between April 15, 1967 and December 23, 1997 (Plan n.° 1): Due to the accumulate d surplus, in June 2007, the contributions of participants, beneficiaries (retirees and pensioners) and of the sponsor (Banco do Brasil) were suspended, retroactive to January 2007. This measure will be evaluated every twelve months, with its maintenance depending on the existence of the Special Reserve of Benefit Plan n.° 1, resulting from t he superavit in the Plan. Participants employed from December 24, 1997 (Plano Previ Futuro): active participants contribute to PREVI an amount between 7% and 17% of their contribution salary, which varies based on length of service and the amount of the contribution salary. There is no contribution for retired participants. The sponsor contributes an amount equal to the contributions of the participants, limited to 14% of the total contribution payroll of these participants. The retirement benefit of this group is characterized as a defined contribution. a.2) Effects of Benefit Plan n.° 1, based on actuarial v aluations as of December 31, 2006 and 2007 carried out by an independent actuary, and of the Plano Previ Futuro as required by CVM Resolution 371 of December 13, 2000: Equity effect (reconciliation of assets and liabilities):

09.30.2008 09.30.2007 Specification

Plan 1 Plan 1 1) Present value of actuarial liabilities with coverage 70,572,791 65,870,816

2) Present value of actuarial liabilities not covered -- --

3) Present value of actuarial liabilities (1 + 2) 70,572,791 65,870,816

4) Fair value of the plan assets (134,802,296) (103,352,512) 5) Present value of liabilities in excess of (less than) the fair value of the assets (3 + 4) (64,229,505) (37,481,696)

6) Actuarial (gains) or losses not recognized (62,226,319) (35,117,539)

7) Net actuarial liability/(asset) recorded (5 - 6) (2,003,186) (2,364,157)

The Previ Futuro Plan, being a defined contribution plan, is not required to record actuarial assets or liabilities.


58

Amounts paid to Previ:

09.30. 2008 09.30.2007

Specification Plan 1 Plan Previ

Futuro Total Plan 1 Plan Previ Futuro Total

Sponsor contributions (39) 26,776 26,737 1,345 20,206 21,551 The sum of R$ 39 thousand refers to adjustments to the sponsor contribution for the periods prior to January/2007. Effects on the semester's Income Figures:

09.30.2008 09.30.2007

Specification Plan 1 Plan Previ

Futuro Total Plan 1 Plan Previ Futuro Total

1) Cost of current service (with interest) -- (52,239) (52,239) -- (39,423) (39,423)

2) Interest on actuarial liabilities -- -- -- -- -- --

3) Expected earnings on the plan assets -- -- -- -- -- --

4) Deferment of the net earnings from assets and liabilities (2 + 3) -- -- -- -- -- --

5) Total gross (expense)/income (1 - 2 - 3 + 4) -- (52,239) (52,239) -- (39,423) (39,423)

6) Expected contributions from participants -- 26,802 26,802 -- 20,227 20,227

7) Previ Liabilities/Assets (expense)/income (88,337) -- (88,337) (97,189) -- (97,189)

8) Exponsor contribution in excess to the cost relates to Plan 1 -- -- -- -- -- --

8) Subtotal net (expense) /income (5 + 6 + 7 + 8) (88,337) (25,437) (113,774) (97,189) (19,196) (116,385)

10) Previ management fee (5% of the employers’ union dues) -- (1,339) (1,339) -- (1,010) (1,010)

11) Effect of the net (expense)/income ( 9 + 10) (88,337) (26,776) (115,113) (97,189) (20,206) (117,395)

a.3) Main economic assumptions adopted for the actu arial calculations: Specification 09.30.2008 09.30.2007

Real interest rate used for discounting actuarial liabilities to present value 6.3% a.a. 6.3% a.a. Real expected yield on plan assets 6.3% a.a. 6.3% a.a. Estimated salary increases: Benefit Plan 1 0.8394% a.a. 0.9520% a.a. Plano Previ Futuro 3.3044% a.a. 3.6053% a.a.

A new mortality table, AT-83 plena, was deployed in July 2007 without causing any effects on the Bank's net income, as a result of the superavit inPREVI. a.4) The Supplementary Pension Steering Committee issued Resolution 26, of September 29, 2008, which addresses the conditions and the procedures to be observed by closed supplementary pension entities in the determination of net income, in the allocation and use of surplus and in the structuring of deficit of pension benefit plans that they manage, and lays down other provisions. Banco do Brasil is analyzing the impacts of this resolution on its assets. b) Benefits of sole responsibility of the Bank Banco do Brasil is responsible for: (a) retirement pensions to founder participants and pension payments to survivors of participants deceased up to April 14, 1967; (b) payment of retirement supplements to the other participants employed by Banco do Brasil who retired up to April 14, 1967 or who, on that date, would have the right through length of service to retire and who had at least 20 years of effective service with the Bank; and (c) increase in the amount of retirement benefits and of pensions in addition to that provided for in the Benefit Plan of Previ, resulting from judicial decisions and from administrative decisions on account of restructuring of the job and salary plan and of incentives created by the Bank. This plan is of the defined benefit type, and adopts the capitalization regime in actuarial valuations, and had 7,959 retirees and pensioners participating on September 30, 2008 (8,232 retirees and pensioners participating on September 30, 2007).


59

b.1) The cost of these benefits is totally funded by Banco do Brasil. b.2) Effects on the financial statements of Benefit Plan, based on actuarial valuations as of December 31, 2006 and 2007 carried out by an independent actuary, and of the Plano Previ Futuro as required by CVM Resolution 371 of December 13, 2000: Equity effect (reconciliation of assets and liabilities): Specification 09.30.2008 09.30.2007

1) Present value of actuarial liabilities with cove rage --

2) Present value of unsecured actuarial liabilities (Plans without financial assets) 1,666,065 1,633,840


4) Fair value of the plan assets -- --

5) Present value of liabilities in excess of the fair value of the assets (3 + 4) 1,666,065 1,633,840

6) Actuarial (gains) or losses not recognized 167,394 219,972

7) Net actuarial liability/(asset) to be recorded (5 - 6) 1,498,671 1,413,868

Amounts paid to Previ: Specification 09.30.2008 09.30. 2007

Total benefits paid to Previ 66,211 65,284

Effects on the semester's Income: Specification 09.30.2008 09.30.2007

1) Cost of current service -- --

2) Expected contributions from participants -- --

3) Interest on actuarial liabilities (41,994) (41,572)

4) Actuarial (gains) or losses (65,005) (9,955)

5) Expected earnings on assets -- --

6) Effect of the expense recorded (1 - 2 + 3 + 4 - 5) (106,999) (51,527) b.3) The economic assumptions adopted for the actuarial calculations are the same as those adopted for the PREVI Plan 3 (item a.3.), except regarding the adoption of mortality table AT -83., since a transitory table between GAM-71 modified and GAM-83 is used for the Informal Plan.

c) Fundação Codesc de Seguridade Social – Fusesc Following the merger of Besc S.A. and Besc S.A. – Crédito Imobiliário (Bescri) by Banco do Brasil on September 30,

2008, the Bank became a successor to the sponsorship obligations for the following Private Pension Plans: a) Multifuturo I, a Defined Contribution Plan (CD) and b) Defined Benefit Plan (BD).

The normal contribution by the sponsors as of December 2000 was defined as being the sum of the contributions owed

by active and assisted participants, in compliance with the contributing parity between sponsors’ normal contributions and participants, as provided for in article 5 of Constitutional Amendment no. 20/1998.

In addition to the funds transferred to Fusesc in order to settle Plano Multifuturo’s deficit, there is a provision of R$ 822 thousand on September 30, 2008 in connection with an actuarial deficit of active employees that remained in the Defined Benefit Plan. The provision’s value was defined in accordance with an agreement entered into with Fusesc on July 23, 2002, Clause 2”a”, item 2.2, as follows:


60

For those who did not migrate, only the complementary contribution of funds will be paid in, required to cover the actuarial deficit, in proportion to what they contributed (Sponsor and participants) until the effective date of Constitutional Amendment no. 20.

Multifuturo I, a Defined Contribution Plan (CD) – maintained by Fusesc, organized in June 2002 by means of the migration by participants from the Defined Benefit Plan. This plan covers 6,305 employees, of which 3,089 assisted (3,044 retired, 45 beneficiaries), and 3,216 active employees.

The Defined Benefit Plan (BD) – maintained by Fusesc since 1978, structured under a joint contribution plan with other

companies, intended for their employees and dependents. This plan covers 1,376 employees, of which 1,371 assisted (1,022 retired, 349 beneficiaries), and 5 active employees. On September 30, 2008 this plan had an actuarial surplus of R$ 70,199 thousand.

The AT-83 mortality table was used for the actuarial calculation of the Defined Benefit Plan (BD), with the September 30,

2008 base date.

The key assumptions employed in the actuarial appraisal are:

Specification: September 30, 2008

Real interest rate used to discount actuarial obligations to present value 6.0% p.a. Real rate of return expected from the retirement and pension plans’ assets 6.0% p.a. Future Nominal Growth of Salaries 2.83% p.a. Annual Inflation 7.04% p.a.

d) CASSI - Caixa de Assistência dos Funcionários do Banco do Brasil The Bank is the sponsor of a Health Plan managed by CASSI - Caixa de Assistência dos Funcionários do Banco do Brasil. The main objective is to provide coverage for expenses related to the promotion, protection, recovery and rehabilitation of a member's health and of his/her inscribed beneficiaries. At September 30, 2008 this plan had 170,033 participants, with 89,143 active and 80,090 retired participants and pensioners (at September 30, 2007 the plan had 166,331 participants, of which 86,241 were active and 80,090 retired participants and pensioners).

A contract was executed between the Bank and CASSI on 11.13.2007 aiming at reformulating the By-laws of Plano de Associados da Caixa de Assistência dos Funcionários do Banco do Brasil (Plan of Members of the Banco do Brasil Employee Welfare Fund).

In the 1st semester of 2007, the Bank contributed monthly a sum equivalent to 150% of the total contributions from members (active and retired) and pension beneficiaries of employees hired before December 23, 1997. For participants employed after that date the Bank contributed a sum equivalent to 100% of their total contributions. On account of the Agreement between the Bank and CASSI, all the employee groups contributed with 4.5% of the total payroll or of the total retirement or pension plan benefit from November 2007, with effect retroactive to January 2007. Monthly contributions from members and pension beneficiaries amount to 3% of the total payroll or the total retirement or pension plan benefits.


61

d.1) Effects of the CASSI Plan on the financial statements, based on actuarial appraisals as of December 31, 2005 and 2006 carried out by an independent actuary, as required by CVM Resolution 371/12.13.2000: Equity effect (reconciliation of assets and liabilities): Specification 09.30.2008 09.30.2007

1) Present value of actuarial liabilities with coverage -- --

2) Present value of unsecured actuarial liabilities (Plans without financial assets) 4,547,868 3,562,867


4) Fair value of the plan assets -- --

5) Present value of liabilities in excess of the fair value of the assets (3 + 4) 4,547,868 3,562,867

6) Actuarial (gains) or losses not recognized 1,636,782 1,045,076

7) Unrecognized past service cost- Indirect Dependents 32,484 --

8) Unrecognized past service cost - Alteration of Plan 92,326 --

9) Net actuarial liability/(asset) recorded (5 – 6 – 7 - 8) 2,786,276 2,517,791

Amounts paid to Cassi: Specification 09.30.2008 09.30.2007

Sponsor contributions 124,142 103,299

The R$ 124,142 thousand is comprised of employer contributions from active employees, retirees and pensioners, and extraordinary contribution/onlending referring to the indirect dependents, resulting from the BB and CASSI Agreement and CASSI Complementation, as follows: Active Employees: R$ 44,797 thousand, Retirees and Pensioners: R$ 74,625 thousand, Onlending: R$ 2,500 thousand and Complemento Cassi, due to Resignation Plans: R$ 2,200 thousand; The sum of R$ 103,299 thousand consists of the Employer Contributions for Active Employees: R$ 35,169 thousand and Retirees and Pensioners: R$ 68,130 thousand. Effects on the semester's Income: Specification 09.30.2008 09.30. 2007

1) Cost of current service (with interest) (9,417) (10,167)

2) Expected contributions from participants -- --

3) Interest on actuarial liabilities (120,565) (94,805)

4) Actuarial (gains) or losses (22,282) (19,356)

5) Unrecognized past service cost (2,720) --

6) Expenses with current employees (44,797) (35,169)

7) Expense with Extraordinary Contribution (13,193) --

8) Expected earnings on assets -- --

9) Effect of the expense recorded (1 - 2 + 3 + 4 + 5 + 6 + 7 - 8) (212,974) (159,497)

d.2) The economic assumptions adopted for the actuarial calculations are the same as those adopted for the PREVI Plan (item a.3.). e) Policy for the recognition of actuarial gains an d losses In accordance with CVM Deliberation 371, the actuarial gains or losses to be recognized as income or expense in a defined benefit plan are the amount of unrecognized gains and losses that exceed, in each period, the higher of the following limits: - 10% of the present value of the total actuarial liability of the defined benefit; or 10% of the fair value of plan assets.


62

e.1) Benefits of Sole Responsibility of the Bank: Actuarial losses relating to these benefits are being recorded in the same year the actuarial calculation is made because the persons involved are all former employees, and thus there is no remaining length of service to amortize. e.2) CASSI Actuarial Liability: the actuarial losses relating to this liability are recognized over the average remaining work period estimated for the employees participating in the plan (15.9 years as of 12.31.2007). f) Summary of Assets/Liabilities of Previ and Cassi

09.30.2008

Specification Actuarial liability/

(asset) on 01.07.2008

(Expense) income recorded in the

income statement considering

actuarial adjustments

Transfer between unamortized reserves and

advanced amortization

Amortization/ Use of the Actuarial Assets

and Parity Fund Assets

Sponsor contributions made

in the year

Actuarial liability/ (asset) on

30.09.2008

A B C D E F =

(A-B+C+D+E)

Actuarial asset CVM No. 371 (2,091,561) -- -- 88,376 -- (2,003,185)

Actuarial asset/liability in respect of the -- -- -- -- -- --

Advanced amortization (1997 Agreement) (12,147,267) 285,060 310,376 -- -- (12,121,951)

Unamortized reserves (1997 contract) 12,147,267 (285,060) (310,376) -- -- 12,121,951

Parity Fund Asset (2,617,056) 61,843 -- (39) -- (2,678,938)

Actuarial liability in respect of the Informal Plan (sole responsibility of the Bank)

1,457,683 (106,999) -- -- (66,011) 1,498,671

CASSI actuarial liability 2,708,417 (154,984) -- -- (77,125) 2,786,276

Liabilities Cassi-Agreement -- -- -- -- -- --

09.30. 2007

Specification Net Liabilities/ (Assets) as of

07.01.2007

(Expense) income recorded in the

income statement considering

actuarial adjustments

Transfer between unamortized reserves and

advanced amortization

Amortization/ Use of the Actuarial Assets

and Parity Fund Assets

Sponsor contribution verted/ compensated

in the quarter

Actuarial liability/ (asset) on

09.30.2007

A B C D E F =

(A-B+C+D+E)

Actuarial asset CVM No. 371 (2.460.002) -- -- 95.844 -- (2.364.158)

Actuarial asset/liability in respect of the 1997 contract

-- -- -- -- -- --

Advanced amortization (1997 Agreement)

(10.300.360) 285.341 (1.276.865) -- -- (11.862.566)

Unamortized reserves (1997 contract) 10.300.360 (285.341) 1.276.865 -- -- 11.862.566

Parity Fund Asset (2.312.969) 54.959 -- 1.345 -- (2.366.583)

Actuarial liability in respect of the Informal Plan (sole responsibility of the Bank)

1.427.625 (51.527) -- -- (65.284) 1.413.868

CASSI actuarial liability 2.134.679 (451.242) -- -- (68.130) 2.517.791

Liabilities - Cassi Agreement -- (82.500) -- -- -- 82.500


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28 – Compensation Paid to Employees and Management 3Q/2008 3Q/2007

Lowest salary 1,178,63 1,170,23 Highest salary 22,023,00 22,023,00 Average salary 3,568,26 3,588,83 Management (1) President 37,469,40 28,700,40 Vice-President 33,841,50 25,859,10 Director 28,943,40 22,023,00 (1) In April 2008 the remuneration model for the members of the Executive Board was simplified by including in their remuneration the value of benefits that were previously granted by the General Assembly of Shareholders. As a result of this change, the benefits are no longer being granted.


64

29 – Assignment of Employees to External Organizati ons Federal government assignments are regulated by article 93 of Law 8112/1990 (amended by Law 9257/1997), by Decree 925/1993, and by PGFN/CJN Note 088/1996 issued by the General Counsel of the Federal Treasury. Labor unions: assignments occur in cases prescribed in the Collective Labor Agreement or by commitments assumed as a result of salary negotiations: Other organizations/entities: assignments occur as a result of agreements of strategic business interest of the Bank.

3Q/2008 3Q/2007 Employees

assigned (1) Cost for the

period Employees assigned (2)

Cost for the period

With costs for the Bank Federal Government 11 591 18 720 Labor unions 142 3,293 129 2,524 Other organizations/entities: 3 318 3 263 Without cost to the Bank Federal, state and municipal governments 306 -- 290 -- External organizations (Cassi, FBB, Previ) 700 -- 671 -- Employee entities 49 -- 31 -- Subsidiary and associated companies 301 -- 328 -- Total 1,512 4,202 1,470 3,507 (1) Balance at 9.30.2008 (2) Balance at 9.30.2007


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30 – Commitments, Responsibilities and Contingencie s a) Contingent liabilities The Bank is a party to various lawsuits, which arise from the normal course of its business. For the formation of provision for contingent liabilities, the bank adopts the criterion of classification of contingencies as remote, possible and probable, in conformity with CVM Resolution 3,535, of December 31, 2008. The possibility of occurrence of loss is determined based on a legal appraisal that considers the progress of the suit, the jurisprudential status/development and other factors that imply alteration of the legal risk. A provision is formed for the amount relating to the loss contingencies classified as probable, and not for those contingencies classified as possible or remote. Labor Lawsuits The Bank is a party in labor lawsuits mainly filed by former employees or trade unions of the industry. Allowance for probable losses of the amount of R$ 2,665,227 thousand (R$ 2,402,458 thousand on 09.30.2007) are recognized in the consolidated financial statements and represent various claims, such as: Severance pay, overtime, Supplement per Job and Representation, Supplement per Individual BACEN 40% (matching the employees of BACEN) and others. Labor claims classified as possible losses amount to R$ 355,281 thousand (R$ 292,060 thousand, on 09.30.2007). Fiscal Lawsuits The Bank is subject to a number of challenges by the tax authorities in relation to taxes, which can give rise to assessments of the jurisdiction in which taxes are incurred or the sum of taxable income or deductible expense. Most of the lawsuits originating from tax assessment notices relate to ISSQN, CPMF, CSLL, IRPJ and IOF, and, some are guaranteed by cash or in properties. Losses on fiscal litigation considered probable amount to R$ 955,608 thousand (R$ 102,597 thousand on 9.30.2007) and possible to R$ 2,319,218 thousand (R$ 2,019,478 thousand on 09.30.2007). Civil Lawsuits The amount involved in these suits considered to represent probable losses is R$ 1,710,152 thousand (R$ 1,133,721 thousand at September 30, 2007). Those considered as likely losses correspond to R$ 2,068,745 thousand (R$ 1,841,158 thousand on 09.30.2007). As of 2007, the most signficiant lawsuits classified as probable losses are those aimed at the collection of the difference between the actual rates of inflation suffered and the rate utilized for inflation correction of financial investments during the period of the Economic Plans (Collor Plan, Bresser Plan and Summer Plan). The activities in provision for contingent liabilities were as follows:

BB- Domestic and Foreign branches BB-Consolidated 3Q/2008 3Q/2007 3Q/2008 3Q/2007

Labor claims Opening balance 2,395,924 2,369,183 2,415,113 2,369,183 Provision/(reversal) (1) 341,303 286,645 341,413 286,645 Provision used (143,121) (253,370) (143,157) (253,370) Added value - Besc/Bescri 51,858 -- 51,858 -- Closing balance 2,645,964 2,402,458 2,665,227 2,402,458 Tax claims Opening balance 94,900 77,151 769,091 117,900 Provision/(reversal) (1) 13,296 (3,926) 183,867 (3,399) Provision used (664) (11,904) (11,173) (11,904) Added value - Besc/Bescri 13,823 -- 13,823 -- Closing balance 121,355 61,321 955,608 102,597 Legal Claims Opening balance 1,403,890 992,781 1,434,538 997,339 Provision/(reversal) (1) 235,308 148,484 243,902 148,831 Provision used (21,077) (12,449) (23,170) (12,449) Added Value Besc/Bescri 54,882 -- 54,882 -- Closing balance 1,673,003 1,128,816 1,710,152 1,133,721


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(1) It includes the amount of R$ 276,579 thousand (grievances), of R$ 7,225 thousand (fiscal claims) and of R$ 76,159 thousand (civil claims), related to the supplement of provisions for claims arising from the merger of Besc as a result of the standardization of criteria. b) Contingent tax assets The Bank has filed lawsuits for reimbursement of taxes paid in error that will only be recognized in the financial statements if the Bank obtains a favorable outcome, in conformity with item 25 of Deliberation CVM n.º 489, of 10.03.2005. We emphasize the most important lawsuits not yet recorded: - Unconstitutionality of Income Tax on Net Income paid in 1989 and in the 1st six months of 1992, of the amount of R$ 12,553 thousand; - Tax on Financial Transactions (IOF) - Law 8,033/1990 (Price-level restatement), of the amount of R$ 195,128 thousand; c) Legal Obligations The Bank has a provision of the amount of R$ 10,698,212 thousand ( R$9,398,397 thousand on 09.30.2007) relating to the proceeding of full carry-forward of the accumulated tax loss of Income Tax and of the negative bases of Social Contribution Tax, the enforceability of which has been suspended due to the judicial deposits made since the beginning of the suit. This amount is recorded in “Other Liabilities - Taxes and Social Security Charges”. d) Other Commitments The Bank is the sponsor of Fundação Banco do Brasil whose purpose is the promotion, support, advancement and sponsorship of educational, cultural, social, philanthropic, and recreational/sporting activities, as well as the promotion of research activities of a technological and scientific nature, and rural and urban community assistance services. During the third quarter of 2008, the Bank contributed with R$ 13,250 thousand to the Fundação Banco do Brasil. Guarantees to third parties, for a fee and with counter-guarantees from the beneficiaries - guarantees, sureties and bonds - amounted to R$ 6,030,807 thousand (R$ 3,646,074 thousand at September 30, 2007). A provision of R$ 35,468 thousand, recorded in “Other Liabilities”, is considered sufficient to cover any potential loss arising on these guarantees. Available credit lines for loan and lease operations amount to R$ 37,774,271 thousand (R$ 34,326,205 thousand at September 30, 2007). The confirmed import and export letters of credit total R$ 630,603 thousand (R$ 713,397 thousand at September 30, 2007). The Bank is the operator of the Fund for Sectorial Investments (FISET), with net assets of R$ 2,197 thousand (R$ 2,236 thousand at September 30, 2007), and is the manager of the Public Service Employee Savings Program (PASEP), with net assets of R$ 1,639,708 thousand (R$ 1,473,318 thousand at September 30, 2007). The Bank guarantees the latter a minimum remuneration equivalent to the Long-Term Interest Rate (TJLP). Despite the reduced level of risk to which its assets are subject, the Bank contracts insurance cover for its assets in amounts considered sufficient to cover any losses.


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31 – Financial Instruments The market value of a financial instrument, according to Instruction CVM no. 235 dated of 03.23.1995, is the value for which the instrument could be exchanged in an ordinary operation in an active market among interested parties, and not corresponding to a compulsory transaction or derived from a liquidation proceeding. Determination of the Market Value The Bank has computerized systems that process the positions subject to determination of the market value. If there is an active market, the financial instrument will have its market value determined with a basis on the prices practiced. In the absence of an active market, which is the case of most financial assets and liabilities, the market value is estimated by the quotation of similar financial instruments, or by the net current value of future cash flows adjusted based on the interest rate effective in the market on the balance sheet date. The internal models utilized for calculation of the future cash flows consist of the construction of a mathematical algorithm that permits a description of the flow for each financial intermediation product. Backtesting is carried out periodically to verify the adherence of these methodologies. Market and Liquidity Risk Fluctuations in interest rates, price of security, price of good, exchange rate of the different currencies, indexes and settlement periods are considered in the determination of the market value of financial instruments. Credit Risk The uncertainty regarding the receipt of amounts agreed on with the counterparts is estimated in the determination of the market value of financial instruments by the amount of provisions formed, pursuant to the criteria of Resolution 2,682, of 12.21.1999. The table below presents financial instruments recorded in equity accounts, compared to market value:

BB-Co nsolidate

09.30.2008 09.30.2007 Unrealized gain/loss, net of tax effects

On Income On Stockholders´ Equity

Book value Market Value Book

value Market Value 09.30.2008 09.30.2007 09.30.2008 09.30.2007

ASSETS

Short-term interbank deposits 71,091,681 71,000,356

51,419,078

51,406,299

(91,325)

(12,779)

(91,325)

(12,779)

Securities 84,695,421

84,695,106

72,541,014

72,542,391

(103,950)

499,826

(315)

1,377

Adjustment of securities available for sale (Note 7.a) -- -- -- --

(103,635)

498,449 -- --

Adjustment of securities held to maturity (Note 7.a) -- -- -- --

(315)

1,377

(315)

1,377

Derivative financial instruments

1,258,101

1,258,101

1,584,636

1,584,636 -- -- -- --

Loan operations

175,599,115

175,182,028

129,486,515

129,846,297

(417,087)

359,782

(417,087)

359,782

LIABILITIES

Interbank deposits

6,309,437

6,356,487

5,602,986

5,608,051

(47,050)

(5,065)

(47,050)

(5,065)

Time deposits 127,582,468

127,568,879 83,640,165

83,590,696

13,589

49,469

13,589

49,469

Obligations related to Committed Operations

85,339,239

85,230,116

74,845,448

74,328,064

109,123

517,384

109,123

517,384

Borrowings and onlendings

24,648,701

24,654,801

19,509,010

19,504,611 (6,100)

4,399

(6,100)

4,399

Derivative financial instruments

1,366,557

1,366,557

2,474,681

2,474,681

-

-

-

--

Other liabilities

83,238,043

82,948,933

45,174,468

44,855,937

289,110

318,531

289,110

318,531

Unrealized gain/loss, net of tax effects

(253,690)

1,731,547

(150,055)

1,233,098


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Criteria utilized for market value determination of financial instruments are detailed below : Financial Instrument Assets Short-term interbank investments: The market value was obtained by future cash flows discount, adopting interest rates exercised by the market in similar operations in the balance sheet date. Securities: Securities and derivative financial instruments are accounted for by the market value, as provided for in BACEN Circular no. 3,068 of 11.08.2001, excluding from such criterion, securities held to maturity. Determination of securities' market value, including those held to maturity, is obtained according to rates collected at the market. Loan operations: - Operations remunerated at pre-fixed rates have been estimated through future cash flow discount, adopting for such, interest rates utilized by the Bank for contracting of similar operations in the balance sheet date. For operations of such group remunerated at post-fixed rates, it was considered as market value the book value itself due to equivalence among them. Financial Instrument Liabilities Interbank deposits: The market value has been calculated through discount of the difference between future cash flows and rates currently applicable in the pre-fixed operations market. In case of post-fixed operations which maturities did not exceed 30 days, the book value was deemed to be approximately equivalent to the market value. Time deposits: The same criteria adopted for interbank deposits are utilized in the determination of the market value. Deposits received under security repurchase agreements: For operations at pre-fixed rates, the market value was determined calculating the discount of the estimated cash flows adopting a discount rate equivalent to the rates applicable in contracting of similar operations in the last market day. For post-fixed operations, book values have been deemed approximately equivalent to market value. Borrowing and onlendings: Said operations are exclusive to the Bank, without similarity in the market. In face of their specific characteristics, exclusive rates for each fund entered, inexistence of an active market and similar instrument, the market values of such operations are equivalent to the book value. Other liabilities: Market values have been determined by means of the discounted cash flow, which takes into account interest rates offered in the market for obligations which maturities, risks and terms are similar. Other financial instruments: Included or not in the balance sheet, book values are approximately equivalent to their correspondent market value. Derivatives According to Bacen Circular 3,082, of 1.30.2002, derivatives are recorded at market value. Determination of derivatives' market value is estimated in accordance with an internal pricing model, with the use of the rates disclosed for transactions with similar terms and indices on the fiscal years' last business day.


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32 – Cash Flow Statement

BB-Domestic and Foreign Branches

BB – Consolidated

3Q/2008 3Q/2007 3Q/2008 3Q/2007

CASH FLOWS FROM OPERATING ACTIVITIES Net Income 1,866,957 1,364,037 1,866,957 1,364,037

Adjustments to net income : (502,266) (122,663) 375,242 102,721

Depreciation and amortization 206,289 191,326 347,761 295,516

Equity in the earnings (loss) of subsidiary and associated companies (880,808) (218,356) (495,790) (50,162)

(Profit)/loss on the disposal of property and equipment (16,659) (14,009) (16,659) (14,009)

(Profit)/loss on the disposal of investements - - 310 -

(Profit)/ loss on the sale of assets (2,090) (21,782) (53,123) (21,952)

((Gain)/Loss on Capital 1,731 (2,929) 1,815 4,090

Provision/(reversal) for devaluation of other ass 1,868 4,202 1,831 4,203

Changes in provision for Insurance, Pension Plans and Capitalization - - 527,851 -

Other adjustments (187,403) (61,115) 61,246 (114,965)

Changes

Short-term interbank investments (18,398,815) (3,805,892) (16,808,297) 194,905

Securities and derivative financial instruments (2,608,048) (2,072,361) (3,652,238) (2,055,088)

Interbank and interdepartmental accounts (995,352) (376,229) (1,033,685) (374,269)

Loan operations (9,740,852) (4,014,384) (10,041,428) (3,984,793)

Lease operations 975 75 (739) (3,845)

Other receivables (7,929,700) (2,067,522) (9,456,865) (2,729,537)

Other assets (135,890) (428,687) (151,122) (416,041)

Other liabilities 11,687,771 (884,728) 12,856,094 (970,778)

Changes in deferred income 12,977 6,672 1,841 6,672

Adjustment to market value - securities & derivative financial instruments (91,357) (59,371) (91,357) (59,371)

CASH PROVIDED BY (USED IN) OPERATIONS (26,833,600) (12,461,053) (26,135,597) (8,925,387)

CASH FLOWS FROM FINANCING ACTIVITIES

Deposits 33,801,900 8,736,766 34,594,152 7,634,734

Repurchase agreements (7,759,420) 88,974 (7,757,439) 126,583

Funds from acceptance and issue securities 108,253 335,772 638,762 129,636

Borrowing and onlendings 2,810,274 3,165,094 2,148,623 910,404

Derivative financial instruments (585,592) 422,645 (586,580) 422,551

Capital increase base don share’s incorporation 487,368 - 487,368 -

Dividends and bonuses proposed (340,853) (212,243) (340,853) (212,243)

Interest on own capital proposed (405,930) (333,372) (405,930) (333,372)

TOTAL ADMISSION OF FUNDS 28,116,000 12,203,636 28,778,103 8,678,293

CASH FLOWS FROM INVESTING ACTIVITIES Dividends and Interest on Own Capital Receivable from Associated/Subsidiary Companies 594 - 594 153,138

Disposal of non-operating assets 5,206 26,198 5,258 39,300

Disposal of leased assets 4,958 11,887 24,625 30,788

Disposal of investments 3 752,813 313 -

Acquisition of non-operating assets (12,183) (5,680) (12,183) (5,702)

Acquisition of leased assets (180,227) (89,126) (876,293) (277,883)

Adjust Market Value - - - 79

Acquisition of Investments - (759,264) (671,125) (12,293) Expenditures in deferred charges (21,015) (38,622) (21,015) (38,615)

TOTAL FUNDS OBTAINED/INVESTMENTS (202,664) (101,794) (1,549,826) (111,188)

Net Cash Variation 1,079,736 (359,211) 1,092,680 (358,282)

At the beginning of the period 5,624,935 4,717,510 5,753,969 4,724,035

At the end of the period 6,704,671 4,358,299 6,846,649 4,365,753

Increase (decrease) in cash and cash equivalents 1,079,736 (359,211) 1,092,680 (358,282)


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33 – Statement of Added Value BB-Domestic and foreign branches BB-Consolidated

DESCRIPTION 3Q/2008 3Q/2007 3Q/2008 3Q/2007 Balance % Balance % Balance % Balance %

ADDED VALUE CALCULATION

Net income from financial intermediation 3,533,068 3,807,953 3,667,153 3,850,327

Banking service fees 2,395,497 2,266,405 2,932,840 2,498,268

Other Operating Income (Expenses) (1,737,392) (1,462,651) (1,717,295) (1,464,547)

Non-operating income, net 15,897 34,492 104,979 42,677

Added value 4,207,070 4,646,199 4,987,677 4,926,725

Equity in the earnings (loss) of subsidiary and associated companies 880,808 218,356 495,790 50,162

Gross added value 5,087,877 4,864,555 5,483,467 4,976,887

Depreciation and amortization (200,453) (183,319) (206,622) (183,642)

Added Value to be Distributed 4,887,424 100,00 4,681,236 100,00 5,276,845 100,00 4,793,245 100.00

Distribution of added value

Employees 2,276,310 46,57 2,349,117 50,18 2,341,273 44,37 2,365,670 49.35

Salaries and fees 1,416,451 1,331,683 1,462,182 1,344,223 Benefit, social and training 621,296 843,312 638,375 846,663

Profit Sharing 238,563 174,122 240,716 174,784

Governments 744,158 15,22 968,082 20,68 1,068,616 20,25 1,063,538 22.19

Domestic 742,593 15,18 952,897 20,36 1,068,445 20,25 1,047,787 21.86

Social security contributions (INSS) on salaries 265,665 256,097 275,983 258,062 Tax expenses (except income tax and social contribution on net income) 477,971 488,034 576,613 511,689

Income tax/social contribution on net income (1,043) 208,766 215,849 278,036

Abroad 1,565 0,04 15,185 0,32 171 0,00 15,751 0.33 Tax expenses (except income tax and social contribution on net income) 1,531 1,060 130 1,195

Income tax/social contribution on net income 34 14,125 41 14,556

Stockholders 1,866,956 38,21 1,364,037 29,14 1,866,956 35,38 1,364,037 28.46

Dividend / Interest on Own Capital of the Union 483,168 374,837 483,168 374,837

Dividends / Interest on Own Capital of Other Stockholders 263,614 170,778 263,614 170,778

Retained earnings 1,120,174 818,422 1,120,174 818,422

Added value distributed 4,887,424 100,00 4,681,236 100,00 5,276,845 100,00 4,793,245 100.00


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34 – Other Information a) New Market At 5.31.2006, Banco do Brasil signed a contract with the São Paulo Stock Exchange for adhesion to the New Market segment of Bovespa, which assembles a group of companies with the best corporate governance practices in Brazil. Moreover, Banco do Brasil, its Shareholders, the Officers, and the members of the Audit Committee undertake to resolve all and any dispute or controversy related with the New Market Listing Regulation by means of the Arbitration Chamber of the Bovespa Market, in conformity with a commitment clause contained in the By-laws of Banco do Brasil. b) Distribution of Dividends and/or Interest on Own Capital During a meeting held on 2.22.2008, the Board of Directors approved the setting, for the year 2008, of the payout rate equivalent to the minimum percentage of 40% of net income, fulfilling the policy for payment of dividends and/or interest on own capital on a quarterly basis, pursuant to art. 43 of the Bank's By-Laws. c) Public Offering of Shares The Secondary Public Offering of Shares in the possession of Previ and of BNDESPar, started in October 2007, was ended on 1.22.2008 in order to honor the commitment undertaken in the adhesion to the New Market of Bovespa of attaining a free float of 25% by 2009. The total quantity of 117.7 million shares was distributed with the supplementary batch, amounting to R$ 3.4 billion. The operation was the public offering with greater allocation of instruments to the retail market. The final data of the Offering is indicated in the table below: Type of Investors Number of Investors Quantity of Shares

Private Individuals 115,013 41,731,849Corporate entities

(1) 2,544 23,302,067

Foreign Investors 272 51,267,602Persons Related to BB and/or to the Offering 4,014 1,264,722Others 180 177,237Total offering 122,023 117,743,477 (1) Includes Investment Clubs and Funds, Private Pensions, Financial Institutions and other Legal Entities.

c) Prepayment of "C" Bonds On 2.13.2008, the Central Bank of Brazil approved the capital increase of R$ 500 million resulting from the advancement of the exercise of the "C" Subscription Bonuses, decided on by the General Meeting of Shareholders of 1.24.2008. As of 03.03.2008, the receipts resulting from the subscription of these bonuses (BBAS11) ceased to be traded and were automatically converted into common shares (BBAS3). d) Performance in the United States retail banking market On February 21, 2008, the Bank notified the market that it had obtained authorization from BACEN to establish a retail bank operation in the United States by means of two companies headquartered in that country: one of remittances (BB Money Transfers); and a retail bank. The new ventures, that are still awating the approval of North American regulatory agencies, will expand the supply of financial services to Brazilians residing in the USA and will require capitalization totaling US$ 44 million. e) Merger of Besc A Presidential Decree was signed on 2.20.2008, authorizing the removal of Besc and of Bescri from the National Privatization Program (PND). The measure permits the continuity of the takeover process of the institutions by Banco


72

do Brasil. The merger was approved by the shareholders of the Bank, Besc and Bescri at meetings held on 9.30.2008 and the capital increase is currently being ratified by the Central Bank. f) Studies for Takeover of Nossa Caixa On May 21, 2008, Banco do Brasil S.A. proposed, and the State Government of São Paulo accepted, the commencement of negotiations without any binding effect, deliberating the takeover of Banco Nossa Caixa S.A. Whatever the outcome of these negotiations, it is emphasized that the operation will adequately preserve the interests of the stakeholders of the companies involved, including employees, checking account holders, shareholders and other partners. Right now the process is in the phase of discussion of the terms of the negotiation between the parties. g) Housing Loans On March 27, 2008, the National Monetary Council (CMN) approved Resolution n.º 3,549 , which authorizes financial institutions that obtain rural savings deposits, including the Bank, to obtain funds from the Brazilian Savings and Loans System (SBPE), targeting housing loans limited to 10% of the total balance of savings deposits. On June 13, 2008, the Central Bank authorized the Bankl to operate in the National Housing Financing System utilizing savings deposits, which also permits the use of FGTS funds by the borrowers. As well as focusing on the segment of individual clients, the Bank will also offer real estate production financing lines. i) Management of Investment Funds At the end of September, 2008, BB Gestão de Recursos - Distribuidora de Títulos e Valores Mobiliários S.A. - wholly-owned subsidiary of Banco do Brasil S.A., exhibited a portfolio of R$ 242 billion (R$ 207 billion on 09.30.2007), distributed among 435 investment funds and 27 managed portfolios. j) Result IPO Visa Inc. On March 31, 2008, BB notified the market that Visa Inc. had granted shares to Banco do Brasil, Visanet and Visavale with the objective of adjusting the equity interest of the issuing institutions of the Visa flagship to the financial results generated by each one of the operational regions of the company. In the same month, in the public offering of shares of Visa Inc., the abovementioned companies offered up 56.1% of their shares for sale, and were prevented from selling the remaining 43.9% for three years (lock up). k) Shares

BB shares Quantity % In the market on 9.30.2008

(1) 551.641.247 21,50%

Total 2.565.255.836 100,00% (1) Pursuant to the regulation of the New Market of Bovespa.

l) Aliança do Brasil At the beginning of July 2008, BB-Banco de Investimento S.A., wholly-owned subsidiary of Banco do Brasil S.A., and Companhia de Participações Aliança da Bahia signed a proposal of purchase, by BB-Banco de Investimento S.A., of all the common shares held by Aliança da Bahia in Companhia de Seguros Aliança do Brasil, which corresponds to 30% of the total capital of the insurance company and 60% of the voting capital. The transaction was deferred by the regulatory agency, the Superintendency of Private Insurance - Susep. According to a public announcement published on 8.5.2008, the operation was carried out in the amount of R$ 670 million reais. A goodwill in the amount of R$581 million were recorded fundamented on the expected future profitability.


73

m) Agreement for Partnership in the Line of Vehicle s On July 28, 2008, the Bank disclosed in a public announcement the agreement with FirstRand Limited for the organization of a full-service bank with portfolios of loans, financing and investment; of leasing; and of investment, to operate in the Brazilian market of financing and leasing of vehicles. The interest of the Bank in the new company will be by means of its wholly-owned subsidiary BB-Banco de Investimento S.A., which will have 73.5% of the total shares, of which 100% are preferred and 47% common shares, while the partner FirstRand will participate by means of its wholly-owned subsidiary FirstRand Holdings Limited, which will have 26.5% of the total shares, with 53% of the common shares. n) Alterations in Corporation Law Law no. 11,638 published in the Federal Official Gazette dated December 28, 2007 changed, revoked, and introduced a number of provisions in the Corporate Law (law 6,404/1976), to become effective as of January 1, 2008. This new law made material changes to the rules for recognizing and measuring equity items, as well as to the presentation of financial statements. Some changes made by Law 11,638/2007 are already voluntarily adopted by the Bank and its controlled companies, such as for example the submission of Cash Flow Statements and of Value-Added Statements. Others, such as classification and mark-to-market of financial instruments, are already adopted by determination of the Brazilian Central Bank (Notes 3 and 5). The Brazilian Central Bank (Bacen), by means of Release nº 16,669 of 3.20.2008, CVM, by means of Instruction nº 469, of 5.2.2008, and Susep, by means of Circular Letter Susep/Decon/GAB nº 005/2008, dispensed the application of the provisions of Law nº 11,638/2007 in the preparation of the intermediate financial statements of the year 2008. Hence the information contained in the financial statements of the quarter ended September 30, 2008 did not contemplate the modifications in the accounting practices introduced by Law nº 11,638/2007. Various provisions of Law 11,638 are not self-applicable as they depend on specific regulations on the part of the regulatory agencies, notably the Brazilian Securities Commission (CVM) and the Brazilian Central Bank (Bacen). As required by Instruction nº 469/08, of 5.2.2008, the Bank evaluated the impacts of Law 11,638/2007, seeking to measure the effects of changes of account practices promoted by the new Law, which we demonstrate: Cash Flow Statement (DFC) and Statement of Added Value (DVA) As refers to the balance sheets, Law 11,638/07, in providing new wording to article 176 of Law 6,404/76, eliminated the Statement of Changes in Financial Position (DOAR) and created the Cash Flow Statement (DFC) and the Statement of Added Value (DVA). In relation to these alterations there are no impacts for Banco do Brasil, as the Bank had already been publishing the DFC and the DVA voluntarily. Bookkeeping In relation to the bookkeeping rules, article 177 of Law 6,404/76 started to permit two bookkeeping methods: (i) bookkeeping by corporation law with the performance of adjustments in the Taxable Income Control Register (LALUR) or (ii) bookkeeping by tax legislation with entries of adjustments in the Accounting Profit Control Register (LALUC). Considering that the Brazilian Internal Revenue (RFB) has not yet made a final pronouncement concerning the possible fiscal impacts of the alterations contained in Law 11,638/07, Banco do Brasil will continue utilizing the bookkeeping method currently adopted. The adaptations arising from Law 11,638/07, or from its subsequent regulations, will be entries of adjustments made exclusively for the harmonization of accounting standards and the statements and determinations prepared therewith cannot be a basis of incidence of taxes and contribution neither can they have any other tax effects. Therefore, if there


74

are tax law provisions that lead to the use of different accounting methods or criteria, Banco do Brasil will go through with the entries of adjustments in LALUC, thus not causing any tax impact, as proclaimed by article 177, paragraph 2, item II. Classification and Measuring of Financial Assets In relation to the asset valuation criteria, art. 183 of Law 6,404/76 started to provided for the classification of financial instrument, including derivatives, in categories that denote Management's intention in relation to these assets. According to the new wording of this article, trading assets and assets classified as available for sale should be valued at market price. The other financial assets should be valued at cost adjusted for price-level restatement according to the legal or contractual provisions, adjusted to the realizable amount, if lower. In this aspect, there is no equity effect for Banco do Brasil, which already applies Circular 3,068, of 11.8.2001, of the Central Bank of Brazil. Adjustment to Present Value of Assets and Liabilities Law 11,638/07 also created the adjustment to present value for long-term assets and for short-term assets with relevant effect. However, the application of this provision depends on regulations of the regulatory agencies. CVM, by means of CVM Instruction 469, determines that this provision should only be applied by publicly listed companies after the issuance of a specific rule. The Central Bank has not yet made a pronouncement in this regard. It is worth emphasizing that CVM Instruction 235, of 3.23.1995, only determines the disclosure of the market value of financial assets and liabilities, when techniques of discount at present value are used in their determination. Hence to analyze the possible impacts of the adjustment to present value, we will consider the Bank's assets divided into three groups: financial assets, tax credit and actuarial assets of the benefit plans. In relation to the tax credits (R$ 14,994 million), CVM Instruction CVM 469 acknowledges the impossibility of calculating the present value because the date of their realization is not known, and establishes that said amounts should not be adjusted to present value. The actuarial assets (R$ 2,003 million) are already calculated at present value in conformity with CVM Resolution 371. Now the financial assets are subject to disclosure of the market value according to CVM Instruction 235. In this respect, Banco do Brasil already discloses the consolidated position of the financial instruments (note 31). As refers to the criteria for valuation of liabilities, Law 11,638/07 created the adjustment to present value for long-term liabilities and for short-term liabilities with relevant effect. However, the application of this provision also depends on regulations of the regulatory agencies. In the sphere of Brazilian accounting regulations, CMN Resolution n.º 3,535, of 1.31.2008, provides for the adjustment to present value of provision for contingent liabilities, in the same manner as IAS 37 - Provisions, Contingent Liabilities and Contingent Assets. According to these rules, provisions for contingent liabilities should be adjusted to present value, at a rate applied before taxes that reflects the current market valuations of the time value of money and the specific risks for liabilities. We point out that provisions for contingent liabilities of the Bank are subject to monthly price-level restatement. To evaluate the possible impacts of the adjustment to present value of liabilities, we will consider liabilities divided into three relevant groups: financial liabilities, provision for contingent liabilities and legal obligations and actuarial liabilities of benefit plans. We understand that although CMN Resolution n.º 3,535, of 1.31.2008 determined the adjustment to present value for provisions for contingent liabilities and legal obligations, the calculation of the present value of these obligations (R$ 16,029 million) is not possible as it is not known on which date the disbursements will occur. The actuarial liabilities (R$ 4,285 million) are already calculated at present value in compliance with CVM Resolution 371. In relation to financial liabilities, for compliance with CVM Instruction 235, Banco do Brasil disclosed the amounts in note 31. Permanent assets Law 11,638/07 created the Intangible Assets subgroup, in the group of Permanent Assets, to record the rights relating to intangible assets that are intended for the maintenance of the company or exercised with this purpose, including the goodwill acquired. Although the Central Bank has not yet made a pronunciation about this provision, we understand that the following items of equity should be subject to reclassification to intangible assets: (i) software, which is currently part of deferred charges, and amount allocated for business relationship (VRN), which is currently accounted for as a prepaid expense. No equity increase or decrease is expected to result from this change.


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In altering article 179 of Law 6,404/76, Law 11,638/07 determines the classification in Property, Plant and Equipment of rights relating to intangible assets intended for the maintenance of company activities or exercised for this purpose, including those resulting from operations that transfer the benefits, risks and control of these assets to the company. However, Bacen, by means of Resolution 3,617, of 9.30.2008, excluded the applicability of this provision to assets subject of commercial lease operations, which should be recorded in property, plant and equipment of the tenant institutions. In addition, according to the new wording of article 179 of Law 6,404/76, other items to be recorded in Deferred Charges are pre-operating expenses and restructuring expenditures that will effectively contribute towards the increase of the result of more than one fiscal year and that do not configure only a reduction of costs or increase in the operating efficiency. Therefore the new text of the law represents a restriction on the use of this account. On 9.30.2008, Banco do Brasil had R$ 7,9 million in pre-operating expenses, net of amortization, which should be analyzed for purposes of maintenance or write-off as a result of the new text of the law. Bacen, by means of Resolution 3,617, of 9.30.2008, defined that balances formed before this resolution took effect should be held until their effective write-off. Recoverable amount of Assets (Impairment) Another innovation of Law 11,638/07 is the creation of the periodic analysis of the recovery of amounts recorded in property and equipment in use, in intangible assets and in deferred charges. This analysis should be carried out with the objective of recording loss of value when the amount recoverable is lower than the book value of the asset, and of reviewing and adjusting the depreciation and amortization criteria. This subject has already been regulated by CVM and by the Central Bank, by means of the approval of statement CPC 01 - Reduction to the recoverable value of assets. This provision is not expected to have a material effect on the financial position and on the results of the Bank, as historically, Banco do Brasil has made a profit in the sale of items from its fixed assets for use. Moreover, assets not for own use and interest in investments valued at cost are adjusted to the market value when this is lower than the cost value. Transformation, Takeover, Merger and Spin-off In transformation, takeover, merger and spin-off operations carried out between independent parties and associated with the effective transfer of control, the assets and liabilities of the company to be incorporated or resulting from a merger or spin-off will be recorded at their market value. On 9.30.2008, Bacen published Resolution 3,620, regulating this rule. The takeover process of Banco do Estado do Piauí (BEP) is currently in progress. Considering that this bank is federalized and that there will be no effective transfer of control, the Bank opted to account for the assets and liabilities acquired at their book value. Negotiations are also underway with the State Government of São Paulo and with the Government of Distrito Federal aiming at the acquisition of Banco Nossa Caixa (BNC) and of Banco de Brasília (BRB). In these operations, if consummated, the assets and liabilities should be recorded at the market value, as there will be effective transfer of ownership. However, at this time it is not possible to determine the effects of these transactions on the Bank's equity. Valuation of Investments Under the new law, the equity method of accounting will be used to value investments in associated companies over whose management the Bank has significant influence, or in which it participates with twenty percent (20%) or more of the voting capital, in subsidiaries and in other companies that are part of the group or are under common ownership. This subject was regulated by CVM Instruction 469, which altered CVM Instruction 247, of 3.27.1996. Consequently, some companies previously valued at cost could henceforth be valued by the equity method of accounting and vice-versa. The Central Bank, by means of Resolution 3,619, of 9.30.2008, adapted its rules relating to the valuation of investments to the text of Law 11,638/07. Within the sphere of Banco do Brasil, there will be no alteration of investments due to Law 11,638/07.


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Payment Based on Shares Under the new law, sharings of debentures, of employees and management, even in the form of financial instruments, and of assistance or pension institutions or funds of assistance of employees, that are not characterized as expense should pas through the company's net income. This provision does not affect Banco do Brasil, as there is no share-based payment program at the company. Revaluation Reserve Another alteration was the elimination of the revaluation reserve. Banco do Brasil has a balance of R$ 7,370 thousand, relating to reflective revaluations of its subsidiaries. As determined by the Central Bank, and as permitted by Law 11,638/07, this balance will be maintained until effective realization by means of depreciation or write-off. In this regard, Banco do Brasil recommended that its subsidiaries and suggested that its associated companies maintain the respective revaluation reserve balances. Due to the accounting treatment of the realization of the revaluation reserve, from the tax perspective there is no fiscal impact resulting from its maintenance or from its reversal. Donations and Subsidies The following capital reserve accounts were eliminated by Law 11,638/07 in shareholders' equity: (i) premium received in the issue of debentures and (ii) donations and investment subsidies. The Central Bank has not yet regulated this subject matter. According to CVM Instruction 469, of 5.2.2008, companies may maintain the existing balances up to their effective use as provided for in the law. On 9.30.2008, Banco do Brasil had a balance relating to donations and investment subsidies of R$ 5,189 thousand. According to the new text of the law, donations or government investment subsidies should now support the company's net income. The general meeting may, upon the proposal of the management bodies, allocate to the fiscal incentives reserve the portion of net income resulting from donations and government investment subsidies, which can be excluded from the calculation basis of the compulsory dividend. o) Merger of Banco do Estado do Piauí S.A. (BEP) On November 11, 2008 the call notices for the Extraordinary General Meeting (EGM) held on November 28, 2008 and the protocol of the merger of BEP by Banco do Brasil were filed at the Brazilian Securities and Exchange Commission (CVM). If the merger is approved at the EGM, Banco do Brasil will issue 2,930,649 nominative common shares, corresponding to BEP’s economic value of R$ 81.7 million.


Independent auditors’ report on the Special Review of the Quarterly

Financial information for the Quarter ended September 30, 2008

(A free translation of the original report in Portuguese as published in Brazil containing

Quarterly Financial Information prepared in accordance with the regulations issued by the Brazilian Securities and Exchange Commission (CVM) specifically applicable to the

preparation of the Quarterly Financial Information)

2

Independent auditors’ special review report To The Board of Directors and Shareholders Banco do Brasil S.A. Brasília - DF 1. We have conducted a special review of the Quarterly Financial Information for Banco do

Brasil S.A., individual and consolidated, for the quarter ended September 30, 2008, comprising the balance sheet, the statement of income, the performance analysis of results and relevant information, which are the responsibility of its management.

2. Our review was performed in accordance with auditing standards established by IBRACON –

(Brazilian Institute of Independent Auditors) and the Federal Council of Accountancy (CFC), which comprised mainly: (a) inquiries and discussion with management responsible for the accounting, financial and operational areas of the Bank and its subsidiaries, regarding the principal criteria adopted in the preparation of the Quarterly Financial Information and (b) a review of the information and subsequent events which may have a material effect on the Bank and its subsidiaries’ financial position and operations.

3. Based on our review we are not aware of any material changes that should be made to the

Quarterly Financial Information described above, for them to be in accordance with the regulations issued by the Brazilian Securities and Exchange Commission (CVM) and to comply with Comuniqué no. 16669 of the Brazilian Central Bank, which released the company from applying the accounting devices introduced by Law no. 11638/07 in the preparation of the interim accounting statements, during the year of 2008

4. As per note 34(n), on December 28, 2007, Law 11638 was enacted, with effectiveness as

from January 1, 2008. This law modified, revoked and introduced new devices in Law 6404/76 (Corporate Law) and caused changes in the accounting practices adopted in Brazil. Although this law has already entered into effect, some modifications introduced by it still pending regulation on the part of the Brazilian Monetary Council (CMN) and Brazilian Central Bank (Bacen) to be applied by the regulated financial institutions. Therefore, in this transition phase, the Brazilian Central Bank, through Communiqué 16669/08, released the companies from applying the provisions of Law 11638/07 in the preparation of the quarterly financial information. Therefore, the quarterly information aforementioned in paragraph one were prepared in accordance with specific instructions of the Brazilian Central Bank and do not comprise the modifications in the accounting practices introduced by Law 11638/07.

3

5. As described in Note 9 (b), the Bank recorded assets in the amount of R$ 14,651 million as of

September 30, 2008 (Consolidated - R$ 14,993 million), corresponding to income tax and social contribution tax credits, realization and maintenance of which are contingent on the future generation of taxable income and compliance with the rules established in Resolutions 3059/02 and 3355/06, issued by the Brazilian Monetary Council.

November 13, 2008 KPMG Auditores Independentes CRC 2SP014428/O-6-F-DF The original version in Portuguese was signed by Francesco Luigi Celso José Claudio Costa Contador CRC 1SP175348/O-5-S-DF Contador CRC 1SP167720/O-1-S-DF

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EXECUTIVE BOARD

CEOAntonio Francisco de Lima Neto

BOARD OF OFFICERSAdézio de Almeida LimaAldemir BendineAldo Luiz MendesJosé Luis Prola SalinasJosé Maria RabeloLuís Carlos Guedes PintoLuiz Oswaldo Sant’Iago Moreira de SouzaMilton Luciano dos SantosRicardo José da Costa Flores

MANAGING DIRECTORSAlexandre Corrêa AbreuAllan Simões ToledoAntonio Sérgio RiedeClara da Cunha LopesEdson de Araújo LôboFrancisco Claudio DudaGeraldo Afonso Dezena da SilvaGlauco Cavalcante LimaIzabela Campos Alcântara LemosJoaquim Portes de Cerqueira CésarJosé Carlos SoaresJosé Carlos VazJussara Silveira de Andrade GuedesLuiz Carlos Silva de AzevedoLuiz Gustavo Braz LageMaria da Glória Guimarães dos SantosNilo José PanazzoloNilson Martiniano MoreiraPaulo Euclides BonzaniniPaulo Roberto Evangelista de LimaPaulo Rogério CaffarelliRenê SandaRobson RochaSandro Kohler MarcondesSérgio Ricardo Miranda NazaréWilliam Bezerra Cavalcanti Filho

ACCOUNTINGPedro Carlos de MelloGeneral AccountantContador CRC-DF 5.773/O-7CPF 132.520.380-72

Eduardo Cesar PasaAccountant CRC-DF 017601/O-5CPF 541.035.920-87

BOARD OF DIRECTORSBernard Appy (Presidente)Antonio Francisco de Lima Neto (Vice-Presidente)Bernardo Gouthier MacedoCleber Ubiratan de OliveiraFrancisco Augusto da Costa e SilvaHenrique JägerTarcísio José Massote de Godoy

BOARD OF AUDITORSOtavio Ladeira de Medeiros (Presidente)Agostinho do Nascimento NettoEustáquio Wagner Guimarães GomesLuiz Guilherme Tinoco Aboim da CostaMarcos Machado Guimarães

AUDIT COMMITTEEJosé Danúbio Rozo (Coordenador)José Gilberto JalorettoCelene Carvalho de Jesus

Documents

INDEX FINANCIAL STATEMENTS EXPLANATORY NOTES NOTE 3 ... · NOTE 21 – Shareholders' Equity 44 NOTE 22 – Income Tax and Social Contribution on Net I ncome 47 NOTE 23 – Tax Credits