Financial and Institutional Aspects

March, 2011

 Institutional Aspects Operations and Policies Capital Market Disbursements Funding Financial Position Ratio and Results Adoption of International Accounting Standards - IFRS

 Institutional Aspects Operations and Policies Capital Market Disbursements Funding Financial Position Ratio and Results Adoption of International Accounting Standards - IFRS

BNDES Highlights
Founded on June 20th, 1952 100% state-owned company under private law Key instrument for implementation of Federal Governments industrial and infrastructure policies Support to micro, small and medium-sized companies Main provider of long-term financing in Brazil Emphasis on financing investment projects Excellent funding Suitable profitability

BNDES Highlights

Brazilian Export Bank Equity investor through BNDESPAR Excellent asset quality indicators 2,619 active employees (August 2010) Headquartered in Rio de Janeiro Offices in So Paulo, Braslia and Recife New office in Montevideo, Uruguay, since Aug 2009 New subsidiary in London, England, since Nov 2009

Time Line
1950 1960

Infrastructure (Energy and Transport) Steel Heavy Industry - Consumer Goods Small and Medium-Sized Enterprises Technologic Development Imports Substitution Basic Inputs - Capital Goods Energy Agribusiness - Competitive Integration Private Infrastructure and Exports Privatization: Management of Privatization Program Urban and Social Development Infrastructure Productive Structure Exports Social Inclusion Innovation - Sustainability

1970

1980 1990

2000

Today

Areas of Activity

Exports - To promote external sales and reduce imports. Technological investments to increase content value of consumer goods. Preferential trade relations with Mercosur and other South-American neighbours. Social Inclusion - Conditions and stimulus to intensify social benefits are established for the concession of BNDES credit. Innovation - To support investments promoting technological innovation and competitiveness. Infrastructure - Access to electric energy, telecommunications, urban transport, water supply and sanitation, increasing the offer of services ahead of demand to avoid harm to economic growth. Productive Structure - To increase industry production capacity. To make industry and service sectors more effective. Priority to small and medium-sized companies. Support to international businesses of Brazilian companies.

Clients

BNDESs clients are: Private individuals, domiciled and residing in Brazil; Legal entities under Brazilian Law (national or foreign control), established with head office and administration in Brazil; Direct and Indirect Public Administration in the Federal, State, Municipal and Federal District areas.

The financial support lines and programs offered by the BNDES serve the investment needs of companies of any size and sector that have been set up in the country. Partnerships with financial institutions that have agencies established around the country facilitate the dissemination of credit, enabling micro, small, medium-sized enterprises access to the BNDESs resources.

Brazilian Financial System

National Monetary National Monetary Council (CMN) Council (CMN) Central Bank Central Bank of Brazil of Brazil Securities and Securities and Exchange Commission Exchange Commission Private Insurance Private Insurance Superintendency Superintendency

BCB
Commercial Banks Investment Banks Savings Banks Development Banks Leasing Companies

CVM
Stock Exchange Future Exchange Security Brokers Investment Banks Investment Clubs Foreign Investors

SUSEP

SPC

Private Open / Closed Pension Funds Insurance Companies Capitalization Companies Health Insurance Cos.

Relationship with other Governmental Entities

Ministry of Development Industry and Foreign Trade (MDIC) National Monetary Council BNDES BNDES Central Bank of Brazil Securities Exchange Commission Internal Revenue Secretary National Treasury

Ministry Ministry of Finance of Finance

TCU Federal Auditing Office

Group Structure
As of Jun 30, 2010 Consolidated Assets

BNDES

R$ 549.0 billion (US$ 329.5 billion)

Finances long-term investments

BNDESPAR

FINAME
Finances capital goods production and purchases

BNDES Limited Internationalization of Brazilian companies

Equity Participation

Exchange rate: R$ 1.6662/US$

Organizational Chart
Advisory Board Executive Secretary President Luciano Coutinho Legal Presidents Office Marcos Verissimo International Vice-President Armando Mariante Industrial Auditing

Foreign Trade

Director 1 Joo Carlos Ferraz

Director 2 Wagner B. Oliveira

Director 3 Maurcio B. Lemos

Director 4 Eduardo Rath Fingerl

Director 5 Elvio Gaspar

Director 6 Luiz Linck Dorneles

Planning

Infrastructure

Financial

Capital Markets Venture Capital Environmental

Social Inclusion

Information Technology Human Resources

Risk Management Economic Research

Basic Inputs Project Development

Indirect Operations Administration Agriculture Portfolio Management

Credit

AGIR Project

 Institutional Aspects Operations and Policies Capital Market Disbursements Funding Financial Position Ratio and Results Adoption of International Accounting Standards - IFRS

Main Credit Lines

Financing of Complete business projects Machinery and equipment Export of goods and services

Equity Investment Stocks and debentures Venture Capital Seed Capital Funds Private Equity Funds

Access to Credit

Under R$ 10 million (close to US$ 5 million) BNDES Automatic indirect financing through a network of accredited financial institutions (onlending). Over R$ 10 million FINEM - Direct financing; FINEM - Indirect financing. Unlimited FINAME Machinery and equipment

Who is eligible for funding?

Agricultural companies, industry, trade or services Companies (Legal Cooperatives or Associations Entities) NGOs, OSCIPs (Civil Society Organization for Public Interests) or Foundations

Rural producers Individuals Independent cargo transporters School bus drivers Micro-entrepreneurs

Municipal Public Administration State Federal

Classification per size

GROSS OPERATING REVENUE GROSS OPERATING REVENUE Annual Annual

Up to R$ 2.4 million Up to R$ 16 million Up to R$ 90 million Up to R$ 300 million

Above R$ 300 million

MICRO SMALL MEDIUM MEDIUM - LARGE LARGE

M P M E

Borrowers Requirements

Capacity to make repayment. Be commercially registered. Tax and social securities obligations paid up and in order. Not to be undergoing a credit-recovery process (bankruptcy and composition of creditors). Have collateral to cover the operational risk. Comply with environmental legislation.

Types of Operations
Direct Operations Companies financed directly by the BNDES Indirect Operations Companies financed through an accredited financial institution

ENTERPRISE

Information and Relationship Accredited Financial Institution

ENTERPRISE

Direct Operations

Direct Operations

ENTERPRISE

Direct Operations Lines of Financing

BNDES FINEM - investment projects

(minimum value of R$ 10 million ~= US$ 5 million)

Credit Limit - revolving credit for the BNDES clients 5 years or more with good record and credit risk ranking Subscription of Securities - underwriting of securities in publiclylisted companies Internationalization of Enterprises - support to investments or projects to be performed abroad Project Finance - credit to a Specific Purpose Company created to segregate project cash flow, equity and risk

BNDES Interest Rate Direct Operations

Financial Cost

Basic Spread

Credit Risk Rate

Financial Cost = TJLP or TJLP-462 or Currency Basket or LIBOR

(Funding cost)

BNDESBasic Spread = from 0% to 2.5% per year (*)

(Margin to cover operational and administrative expenses)

Credit Risk Rate = from 0% to 3.57% per year

(Margin to cover non-performing loans).

(*) Up to 1.8% p.y. for machinery and equipment acquisition and for infrastructure, agribusiness, industry, trade and service investment projects. In some especial lines of financial, like machinery leasing or import, export of goods and working capital, the basic spread may reach 2.5% p.y.

Project Evaluation Flow

ENTERPRISE 60 days
Consultation Letter Project Completion

ENTERPRISE

Project

Follow up

Development

Eligibility

Project Analysis

Approval

Contracting

Disbursement

30 days

60 days

30 days

30 days

Average Time 180 days

Performance 2010
Consultations
100% US$ 145.2 billion Operational policies eligibility and credit risk analysis

Eligible
91% US$ 131.9 billion Formulation of Analysis Report and Board of Directors approval

Approved
79% US$ 114.4 billion Submission of collateral and environmental permits, contract signing and financial schedule

Disbursements
US$ 96.3 billion 66%

Indirect Operations

Indirect Operations
Companies financed through a network of financial institutions, accredited by the BNDES, which are responsible for the analysis and credit approval.

Accredited Financial Institution

ENTERPRISE

Indirect Operation Lines of Financing BNDES Automatic

(investment projects under R$ 10 million)

BNDES Finame
(capital goods production and trade)

BNDES Agricultural Finame

(agricultural machinery and equipment production and trade)

BNDES Leasing Finame

(leasing of capital goods)

BNDES Export
(production of goods and services made in Brazil to be exported)

BNDES Card
(revolving, pre-approved credit for the acquisition of products accredited by BNDES)

Export Support - Purposes

Competitive export to improve competitiveness of Brazilian products Credit facilities various types of financing to facilitate exports Support for small and medium-sized export companies growth of Brazilian exporters Emphasis on products with higher-aggregated value Operating in partnership with a network of accredited financial institutions in Brazil and over 100 foreign banks Supporting integration within South America

Export Support Credit Lines

Pre-Shipment: financing for the production of goods earmarked for export, linked to specific shipments, or to the increase of the companys total exports

Post-Shipment (buyer or supplier credit): financing for the commercialization of goods and services in foreign countries

BNDES Interest Rate Indirect Operations

Financial Cost Financial Intermediation Rate Financial Institution Spread

Basic Spread

Financial Cost = TJLP or TJLP-462 or Currency Basket or LIBOR

(funding cost)

BNDESBasic Spread = from 0% to 1.8% per year (0.9% p.y. for SMEs)
(margim to cover operationa expenses)

Financial Intermediation Tax = up to 0.5% per year (exempted for micro, small and medium sized companies)
(to cover the sistemic risk of the financial institutions)

Financial Institution Spread = determined by the accredited financial institution

 Institutional Aspects Operations and Policies Capital Market Disbursements Funding Financial Position Ratio and Results Adoption of International Accounting Standards - IFRS

Capital Market

The BNDES plays a key role owing to: Its commitment to long-term projects. The size and quality of its portfolio. Its performance in moments of higher volatility in the market. Its capacity to attract other investors. Its focus on corporate governance. Its capacity to invest in all segments of the market.

Capital Market
The BNDES focuses on: Stimulating tender offer spreading. Consolidating national and international companies. Developing new products (PIBB, CRIATEC etc). Supporting the development of the funds industry. Fostering corporate governance practices. Stimulating fixed-income on the secondary market (issuing debentures). Supporting innovative Micro, Small and Medium-Sized companies. Supporting IBOVESPA (the Sao Paulo Stock Exchange Index).

BNDESPAR - Equity Investment Portfolio

R$ millions

Equity Investments at Fair Value Listed Companies Petrobras VALE Eletrobras CPFL Energia ALL Gerdau Braskem CSN CEG Light Marfrig Others Not Listed Companies Total

12/31/2010 Value 77,872 87.3% 41,866 46.9% 15,434 17.3% 4,743 5.3% 1,686 1.9% 1,270 1.4% 924 1.0% 904 1.0% 849 1.0% 790 0.9% 780 0.9% 739 0.8% 7,887 8.8% 11,377 12.7% 89,249 100.0%

09/30/2010 Value 77,259 88.0% 42,234 48.1% 14,556 16.6% 4,580 5.2% 1,574 1.8% 1,473 1.7% 942 1.1% 754 0.9% 932 1.1% 790 0.9% 879 1.0% 828 0.9% 7,717 8.8% 10,519 12.0% 87,778 100.0%

12/31/2009 Value 65,207 86.8% 25,091 33.4% 13,680 18.2% 7,525 10.0% 1,430 1.9% 1,949 2.6% 1,206 1.6% 391 0.5% 1,070 1.4% 718 1.0% 1,341 1.8% 911 1.2% 9,895 13.2% 9,914 13.2% 75,121 113.2%

Investments in Associated Companies Total

12/31/2010 Value 13.641 100,0%

09/30/2010 Value 13.827 100,0%

12/31/2009 Value 14.231 100,0%

BNDESPAR - Equity Investment by sector

Fair Value December 31, 2010
Private Equity Fund - PIQ 1% Transportation 2% Metallurgy 2% Siderurgy 2% Telecom 3% Pulp and Paper 4% Food and beverage 9%

Others 7%

Oil and Gas 36%

Electricity 12%

Mining 22%

 Institutional Aspects Operations and Policies Capital Market Disbursements Funding Financial Position Ratio and Results Adoption of International Accounting Standards - IFRS

Annual Disbursements
(Includes secondary market investments)

168.4

R$ Billion US$ Billion

137.4

92.2 71.6 64.9 47.1 35.1 40.0 24.1 19.6 11.7 13.8 52.3 34.0 49.8

96.3

2003

2004

2005

2006

2007

2008

2009

2010

Disbursements by Type of Operation (%)

(Do not include secondary market investments)

54

54

42

54

55 53

57

59 53 43

56

46

46

58 46 45

57 47 43 41 47 44

2000

2001 2002 2003

2004 2005

2006 2007

2008 2009

2010

Direct Operation

Indirect Operation

Disbursements by Business Sector (%)

(Do not include secondary market investments)

7% 11%

7% 12%

8% 14%

5% 17%

5% 9%

7% 7%

12% 8%

12% 6%

14% 5%

16% 6%

30%

35%

36% 30% 38%

33% 40% 39% 35% 31%

52%

46%

48%

50% 40%

53% 40% 43%

46%

47%

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Industry

Infrastructure

Farming and Cattle Raising

Trade and Services

2010 Operations
Obs. Last 12 months up to December 2010 Obs.

Number of Operations 609,894

46,857 8% 104,053 17% 41,836 7%

Disbursements US$ 96.3 billions

70.3 73%

417,148 68%
individuals micro and small

4.8 5%

7.7 8%

13.5 14%
other

medium

large

Exchanged to US dollar on disbursement date

 Institutional Aspects Operations and Policies Capital Market Disbursements Funding Financial Position Ratio and Results Adoption of International Accounting Standards - IFRS

BNDES Funding
Domestic Funds
FAT (Workers Assistance Fund) PIS-PASEP Fund National Treasury FI-FGTS FGTS Market Funding BNDESPAR Debentures

Foreign Funds
Government Agencies and Multilateral Institutions (IDB, JBIC, World Bank, KfW, NIB, China DB, etc) Market Funding Bonds, Loans and Structured Notes (ABS)

FAT Workers Assistance Fund

Government-established fund: contribution on net operating revenues Permanent financing or quasi-equity Independent of Federal Budget Remunerated at TJLP (Long Term Interest Rate), currently 6.00% p.a., or US$ libor At least 40% of annual revenues are transferred to the BNDES (Constitutional FAT)

Constitutional FAT

Main Features Stable Source of funds to BNDES (article 239 of Federal Constitution).

Origin 40% of PIS-PASEP tax collections (1.65% of corporate revenues on a non cumulative basis; 1% of the payroll of non profit oriented institutions and 1% of net revenues of public administration entities). Use of Funds Programs promoting economic development through BNDES Amortization Schedule No predefined amortization schedule quasi capital

Constitutional FAT

Cost of Funds: TJLP, in case of BRL credits, or US$ Libor, in case of US$ related financing (Law n 9.635/1996). Payments to the FAT: semiannual Interest payments, limited to 6% p.a for the TJLP liabilities. The excess yield is capitalized and added to the outstanding balance of FAT funds. BNDESs US$ related liabilities pay US$ LIBOR flat.

Perfect currency and interest rate match for BNDES balance sheets

Financing of production or commercialization of goods in external markets

FAT CAMBIAL

US$ based financings: cost of funds = Libor flat Res. Codefat n320: up to 50% of FAT Constitucional

FAT Special Deposits

Origin Unused resources of FAT, contracted with the Labor Ministry and CODEFAT. Use of Resources Specific programs and economic sectors Amortization Schedule There is repayment of principal to the FAT Cost of Funds TJLP Payments to FAT BNDES is required to make monthly payments equivalent to 1% or 2%, depending on the program, of the outstanding balance.

National Treasury

Resources from BNDES single shareholder. Each transaction has its specific conditions, like cost and amortization schedule. 2009 and 2010: In 2009 R$105 billion were received from Brazilian Union, while the amount in 2010 were R$ 107 billion. These resources aim to support investments of PAC (Growth Acceleration Program) and PSI (Investment Maintenance Program).
R$ million

2010
National Treasury Others Borrowings/Onlendings % 253,058 196,033 129.1

2009
144,213 180,624 79.8

2008
43,207 178,992 24.1

2007
13,896 154,327 9.0

Funding Dec, 31 2010 Capital Structure

Foreign Funding 3.6%

FAT 24.1% FGTS 1.0%

National Treasury 46.1%

PIS/PASEP 5.6% FI-FGTS 1.2%

Others 6.4%

Shareholders Equity 12.0%

Changes in Source of Funds

R$ million

FAT December 31, 2009 Inflows Amortizations Exchange Variation Accrued Interest and Monetary Adjustment Payment of Interest December 31, 2010 122.497 12.230 (2.232) (480) 7.139 (6.891) 132.263

Bonds 4.429 3.417 (360) (280) 406 (356) 7.256

Multilateral Institutions 12.035 1.896 (993) (407) 292 (300) 12.523

National Treasury 144.213 107.052 (1.271) (1.606) 13.621 (8.951) 253.058

Funding Dec, 31 2010 Cash Flow

FAT; 1,6%

Assets Monetization; 4,7%

Foreign Funding; 2,1%

Government Funding; 46,8%

Return on Operations; 44,8%

 Institutional Aspects Operations and Policies Capital Market Disbursements Funding Financial Position Ratio and Results Adoption of International Accounting Standards - IFRS

Balance Sheet BNDES System

R$ billion

2010

2009

2008

2007

Cash and Equivalents Marketable Securities Loans Investments Others

10,1 145,9 361,6 11,6 19,8 549,0 132,3 30,8 253,1 19,8 5,5 6,7 6,0 29,0 65,9 549,0

2,0 54,3 283,7 33,9 12,7 386,6 122,5 30,0 144,2 16,5 5,8 7,0 13,7 3,6 15,8 27,6 386,6

6,9 22,9 216,0 25,3 6,2 277,3 116,6 43,2 17,5 6,1 7,0 8,4 2,3 50,9 25,3 277,3

0,0 13,8 164,5 19,0 5,4 202,7 105,9 13,9 12,1 2,0 43,8 24,9 202,7

TOTAL ASSETS FAT PIS/PASEP National Treasury International Borrowings FGTS FI-FGTS Money Market Funding Debentures Others ShareholdersEquity

TOTAL LIABILITIES

LIABILITIES

ASSETS

Assets
R$ billions R$ billion
549

387

277

187 151 113 152 164 175

203

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Average increase between 2001 and 2010: 19,2% per year.

Assets - Breakdown

R$ billion

Assets

2010

2009

2008

2007

Cash and Equivalents Marketable Securities

Government Securities Debentures Shares Others

10.1 145.9
25.6 17.8 95.9 6.6

1.8 26.6
4.7 3.2 17.5 1.2

2.0 54.3
35.9 12.2 0.1 6.1

0.5 14.0
9.2 3.2 0.0 1.6

6.9 22.9
10.6 8.1 0.0 4.2

2.5 8.3
3.9 2.9 0.0 1.5

0.0 13.8
1.0 6.1 0.0 6.7

0.0 6.8
0.5 3.0 0.0 3.3

Loans
Interbank Onlendings Loans

361.6
180.2 181.4

65.9
32.8 33.0

283.7
121.6 162.1

73.4
31.5 41.9

216.0
99.4 116.6

77.9
35.8 42.0

164.5
80.5 84.0

81.2
39.8 41.4

Investments
Investments in Associates Investments in Other Companies Others Investments

11.6
11.3 0.2 0.1

2.1
2.1 0.0 0.0

33.9
12.0 21.9 0.0

8.8
3.1 5.7 0.0

25.3
7.6 17.6 0.1

9.1
2.7 6.3 0.0

19.0
11.0 7.9 0.1

9.4
5.4 3.9 0.0

Others Total Assets

19.8 549.0

3.6 100.0

12.7 386.6

3.3 100.0

6.2 277.3

2.2 100.0

5.4 202.7

2.6 100.0

Loans and Interbanking Onlendings by Sector

Gross Portfolio by Sector

As of Dec, 31

27%

25%

Public Sector Private Sector

73% 75%

2010

2009

Loans and Interbanking Onlendings per Maturity

Gross Portfolio per Maturity As of December 31,
R$ million R$ million

2010 Past-due Current 2011 2012 2013 2014 2015 After 2015 Total 551 Past-due Current 2009 2010 2011 2012 2013 After 2013 Total

2009 825

59.955 51.067 37.794 27.885 19.663 168.875 365.790

51.389 41.729 32.664 23.115 15.527 123.073 288.322

Loans and Interbanking Onlendings

Portfolio Concentration
R$ million

As of December 31, 2010 10 largest customers 50 next largest customers 100 next largest customers Other Total 141.617 112.979 55.848 55.346 365.790 % 38,7% 30,9% 15,3% 15,1% 100,0% 2009 100.251 96.223 47.301 44.547 288.322 % 34,8% 33,4% 16,4% 15,5% 100,0%

Foreign Debt Securities Outstanding International Bonds

Issue Year 1998 2001 2009 2010 2010

Market

Principal (currency million)

Coupon (%) 6,369% 9,625% 6,50% 5,50% 4,125%

Maturity 06.16.2018 (a) 12.12.2011 06.10.2019 12.07.2020 09.15.2017

Eurodollar/144-A US$ 1,000 Eurodollar Eurodollar Eurodollar Euro MTF US$ 300 US$ 1,000 US$ 1,000 EUR 750

(a) As amended on June, 2008

Foreign Debt Securities - Ratings

Global Foreign Currency Issuer Rating Rating Moodys Baa2 Outlook Positive

Global Local Currency Issuer Rating Rating A3 Outlook Stable

S&P

BBB-

Stable

BBB+

Stable

 Institutional Aspects Operations and Policies Capital Market Disbursements Funding Financial Position Ratio and Results Adoption of International Accounting Standards - IFRS

Ratios
R$ billion, except percentages

Ratios

2010

2009

2008

2007

Total Assets Net Income Shareholders' Equity ROE (%)

1/

549,0 9,9 65,9 21,2 2,1 1,8

4/

386,6 6,7 27,6 25,5 2,0 2,2 17,58

277,3 3,1 25,3 21,2 2,2 2,0 17,67

202,7 0,7 24,9 33,2 3,8 3,0 26,73

ROA (%)2/ NIM (%)3/ BIS Ratio (%)

1/ 2/ 3/

18,64

Average Shareholders' Equity = (Ecurrent year + Eprevious year)/2

Average Asset = (Acurrent year + Aprevious year)/2 NIM is the net income interest (interest income minus interest expenses) divided by average interestearning assets.
4/

Central Bank of Brazil requires 11% as a minimum percentage.

BNDES vs. Multilateral Agencies

US$ million

BNDES 2010

IADB 2010

World Bank (Jun, 30.10)

2/

CHINA DB 2009

Total Assets 1/ Shareholders' Equity 1/ Net Income 1/ Disbursements 3/ Capitalization (%) 4/ ROA (%) 5/ ROE (%) 6/
1/ 2/ 3/ 4/ 5/ 6/

329,504 39,551 5,950 96,322 12.0 2.1 21.2

87,217 20,960 330 10,341 24.0 0.39 1.6

282,842 37,401 (870) 28,855 13.22 (0.31) (2.30)

665,168 55,471 4,673 92,998 8.34 0.76 8.76

BNDES - Exchange rate US$ 1,6662

Unlike other institutions 12 months fiscal year ends June 30th Based on the historical exchange rate - NET ShareholdersEquity/Total Assets Net Income/(Assets current year + Assets previous year)/2 Net Income/(Shareholders' Equity current year + ShareholdersEquity previous year)/2

Asset Quality (%)

As of Dec 31, 2010

BNDES System1/
AA - C D-G H

SFN2/ 92,6 4,4 3,0 100,0

Private Fin Institutions

Public Fin Institutions3/ 93,7 3,6 2,7 100,0

98,5 1,0 0,5 100,0

92,0 4,8 3,2 100,0

Total
Source:
1/ 2/ 3/

BNDES System = Consolidated SFN - National Financial System (all financial institutions that operate in Brazil) Includes BNDES

Resolution CMN 2,682/99

Risk Category AA A B C D E F G H

Past Due Period 30 days 60 days 90 days 120 days 150 days 180 days > 180 days

Provision Level (%) 0.0 0.5 1.0 3.0 10.0 30.0 50.0 70.0 100.0

Asset Quality (%)

2010

2009

2008

2007

Loans, net of allowance/Total Assets

65.86%

73.37%

77.89%

81.19%

Nonperforming loans/Total Loans

0.15%

0.20%

0.15%

0.11%

Allowance for losses/Total Loans

1.15%

1.61%

2.07%

2.51%

Allowance for losses/Nonperforming Loans

7.65

8.05

13.89

23.34

Asset Quality (%)

Brazilian Financial System Average NPL ratio (Dec/10) Non-performing loans/total loans
0,20%

3,23%

0,15% 0,11%

0,15%

2007

2008

2009

2010

Total allowance as a percentage of non-performing loans as of December 31, 2010

765%

Income Statement
R$ million

2010

2009

+ Net Income from Loans + Income from Marketable Securities (-) Interest Expenses (+/-) Net of Effect Exchange Variation

25,336 8,377 (26,051) (623)

18,600 5,209 (17,721) (267) 5,821 (6) 5,815 3,990 (1,740) 994 9,059 (2,238) (86) 6,735

(=) Net Interest Income, before allowance for loan losses 7,039 (+/-) Allowance for Loan Losses 2,852

(=) Net Interest Income, after allowance for loan losses 9,891 + Income from Equity Investments (-) Administrative and Tax Expenses (+/-) Other Net Revenues/Expenses (=) Operating Income (-) Taxes (-) Employees Profit = Net Income 6,159 (1,877) 187 14,360 (4,287) (159) 9,914

 Institutional Aspects Operations and Policies Capital Market Disbursements Funding Financial Position Ratio and Results Adoption of International Accounting Standards - IFRS

Adoption of International Accounting Standards - IFRS

Communication N. 14,259/2006, Resolution N. 3,786/09 and Circular N. 3,472/09 Brazils Central Bank (Bacen). Year ended December 31, 2010, the BNDES will present Consolidated Financial Statements in BR GAAP and in IFRS. Statements in accordance with IFRSs are not used as a basis for paying dividends or collecting tax. They include additional information required by Brazils Central Bank.

Adoption of IFRS Comparison of the Main Indicators

R$ billion

Dec./10

Dec./09

BR GAAP

IFRS

BR GAAP

IFRS

Total Assets Net Earnings Net Equity

549.020 9.913 65.899

553.768 8.857 69.791

386.633 6.735 27.628

446.086 8.149 67.134

Adoption of IFRS Main Adjustments

Fair Value of Financial and Equity Instruments; Allowance for Loan Losses; Constitution of Deferred Tax Credits from adjustments; Associated Companies - Bargain Purchase (Negative Goodwill), Goodwill valuation, Adjustments on Convertible Securities and others;

Adoption of IFRS Main Adjustments Net Equity

R$ million

Fair Value of Financial BR GAAP 2008 25,267 Instruments 25,228

Allowance for Loan Losses 3,671

Deferred Tax on Adjust. (8,892)

Associated Companies 317 Others (319) IFRS 45,910

2009 2010

27,628 65,899

54,585 -

3,265 2,417

(18,967) (750)

708 2,316

85 (91)

67,134 69,791

Adoption of IFRS Main Adjustments - Earnings

R$ million

2009

2010 9,913
(848) 118 (224) (102)

BR GAAP
Fair Value of Financial Instruments Recognition of derivatives Allowance for Loan Losses Deferred Tax on Adjustments Associated Companies Others

6,735
527 (894) (406) (801) 2,953 35

IFRS

8,149

8,857

Board of Directors
Comprised of: I) eleven members appointed by the President of Brazil, with three-year terms, including the Chairman of the Board. Of this total, the Minister of Planning, Budget and Management, the Minister of Labor and Employment, the Minister of Treasury and the Minister of Foreign Affairs each appoint a member. The remaining members are appointed by the Minister of Development, Industry and Foreign Trade; and one vice-chairman of the Board of Directors, a position filled by the President of the BNDES.

II)

The current Members of the BNDES Board of Directors are the following:
Fernando Damata Pimentel (Chairman) Luciano Galvo Coutinho (Vice-Chairman) Alessandro Golombiewski Teixeira Carlos Roberto Lupi Eduardo Eugnio Gouva Vieira Artur Henrique da Silva Santos Roberto Atila Amaral Vieira Miriam Belchior Luiz Eduardo Melin de Carvalho e Silva Pedro Luiz Carneiro de Mendona

Board of Executive Officers

The BNDES Board of Executive Officers is comprised of eight members: the President, Vice-President and six Managing Directors, all appointed by President of Brazil. President Luciano Coutinho Vice-President Armando Mariante Carvalho Managing Directors i) Joo Carlos Ferraz ii) Luiz Eduardo Melin de Carvalho e Silva iii) Mauricio Borges Lemos iv) Eduardo Rath Fingerl v) Elvio Lima Gaspar vi) Luiz Fernando Linck Dorneles

Fiscal Council and Audit Committee

Fiscal Council:
Current Members Carlos Eduardo Esteves Lima Andr Luiz Barreto de Paiva Filho Reginaldo Braga Arcuri Substitute Members Clayton Campanhola Francisco Moreira da Cruz Filho Eduardo Coutinho Guerra

The Audit Committee is currently comprised of:

Joo Paulo dos Reis Velloso Attlio Guaspari Paulo Roberto Vales de Souza

Brazilian Development Bank Avenida Repblica do Chile n 100 21031-917 21031-917 Rio de Janeiro RJ - Brazil

borge@bndes.gov.br ri@bndes.gov.br

Presentation edited by:

Vania Maria da Costa Borgerth Accountant Chief and Investor Relations

www.bndes.gov.br