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2008 Annual Report


Index Introduction Profile History Message from the President 01. Corporate Governance 02. Risk Management 03. Economic Scenario and Performance 04. Relationship with Clients 05. Intangible Assets 06. Sustainability 07. Social and Cultural Actions 08. Recognitions 09. Exhibits 10. Limited Assurance Report of the Independent Auditors 11. Institutional Information 12. Credits

03 04 05 06 09 29 39 53 57 67 73 79 82 88 90 91


BICBANCO 2008 Annual Report Page 3

Introduction BICBANCO hereby publishes for its clients, shareholders, staff and society in general its 2008 Annual Report. Continuing a new cycle of issuing annual reports, which began with the 2006 report, the bank has been expanding the narrative of the impact of its actions and its economic, social and environmental results. This is our commitment to excellence in our economic and operating performance. This report presents the results for the year ended December 31, 2008, and follows the directives proposed by the Global Reporting Initiative (GRI). The aim of the GRI is to raise the narrative of sustainability reporting practices to a level of quality and transparency on a par with that of financial reporting and to present initiatives that are aligned with the principles of the Global Pact and the balance sheet proposed by the Brazilian Institute for Social and Economic Analyses (IBASE). The information in this report, which complies with the IBASE model, is accompanied by the financial statements audited by KPMG Auditores Independentes. The methods of measurement and the nature of the business comparable with the 2007 report have been maintained. As a result of improvement, the report now incorporates audited GRI indicators covering the operations of BICBANCO S.A. (in Brazil and the Cayman Branch) and of its subsidiaries: Bic Leasing, Bic Cartþes, Bic Informåtica and Bic Distribuidora de Valores. In preparing this report, 12 people representing the internal public effectively participated in the evaluation process in regard to the relevance of the topics to be included in the document. Those chosen elected the topics of interest to each stakeholder, which were given preferential treatment. Based on this survey, the text was adapted to the principles of the GRI. The topics covered were based on the 2007 report, which were added to those listed by the group of stakeholders chosen and approved by the senior management of the bank, namely: clients, suppliers, shareholders, government, society, market analysts, the media and the press, the internal public, the community, unions, the market, regulatory activities and the environment. There were no significant changes during the period covered in this report in regard to the bank’s size, structure or shareholder participation. With this publication, BICBANCO reiterates its commitment to the principles of transparency and equity.


Page 4 BICBANCO 2008 Annual Report

Profile The Bank has prospered over the years by remaining focused and investing strongly in its vocation of supporting manufacturing activities

In 2008, BICBANCO reached the mark of 70 years in the business. The institution, which initiated its operation in 1938, in Juazeiro do Norte, in the State of Ceará (CE), is today one of the major players on the Brazilian financial scenario. A multiple service bank with 39 service points, it is present in Brazil’s 28 major cities in 17 states and the Federal District, and since 2002 it has enjoyed a strong international presence through the branch in Grand Cayman. In 2007, the bank went public through an Initial Public Offering of Shares (IPO) at Corporate Governance Level 1 on the São Paulo Stock Exchange – BOVESPA. The Bank has prospered over the years by remaining focused and investing strongly in its vocation of supporting production activities. As of December 31, 2008, corporate credit represented 94.4% of the portfolio, the highlight being working capital transactions guaranteed by receivables. In the Brazilian financial market, BICBANCO is ranked 5th among Brazilian-owned banks, is the 8th largest private bank (Brazilian and foreign-owned) and the 12th largest bank by (private and public) loan portfolio, according to the ranking of the Central Bank of Brazil as of December 31, 2008.

Mission To develop financial activities which, at the same time and in an integrated manner, maximize shareholder return, ensure BICBANCO's consistent and sound growth while valuing the community of which it is a part.

Vision As a corollary to fulfilling its mission, BICBANCO's ambition is for its staff to be recognized by the clients and the market as the best team of professionals in financial products and services intended for the Middle Market.

Values The success in undertaking the mission depends on a set of factors and behavior that comprise BICBANCO’s beliefs, among which the following stand out: • Respect for our Staff • Acceptance of internal rules • Performance Recognition • Encouraging teamwork

• Fostering transparency • Emphasis on the Integrity of our actions • Social Responsibility to the Community


BICBANCO 2008 Annual Report Page 5

History 1938 - 1947

1968 - 1977

1998 - 2007

The founding of the Joazeiro Credit Cooperative in 1938 by José Bezerra de Menezes and a group of eminent personalities from the local economy led to the first business in the producer segment in the southern region of Ceará. In 1944, it became Banco do Juazeiro, creating opportunities for its cooperative producers.

With Ivan Bezerra de Menezes as president, in 1972 Banco do Juazeiro merged with Banco do Cariri, and the name was changed to Banco Industrial do Cariri. Two years later, it incorporated Banco dos Proprietários, diversifying and expanding its range of products and services, while moving its corporate headquarters to the capital of the State of Ceará. Once again, the name was changed to Banco Industrial do Ceará.

1948 - 1957

1978 - 1987

The business of the Bezerra de Menezes group expanded within the new Brazilian production model, with the growth of cotton exports. The Bezerra de Menezes family became the major shareholder of Banco do Juazeiro, with Maria Amélia Bezerra de Menezes as president, the first woman to occupy this position in a Brazilian bank.

Under the presidency of Humberto Bezerra, the Bank opened its first branch in São Paulo. Given the nationwide extent of its business, the bank’s name was changed to Banco Industrial e Comercial S.A. Significant expansion of the branch network led to the bank being elected by “Exame” magazine the best performing commercial bank in the national financial system for two consecutive years.

1958 - 1967

1988 - 1997

Expanding its operations also as a development agent for trade and industry in the Cariri region, Banco do Juazeiro strengthened its regional presence on account of the extensive political and administrative involvement of the brothers Humberto and Adauto Bezerra, in line with the advances arising from Brazilian bank reform.

In 1989, it became one of Brazil's first multiple banks, and in 1992 it created its own brand: BICBANCO. During this decade, the bank stepped into the breach left by other banks, increasing its client base and expanding its middle market focus. Following the transfer of its head office to São Paulo in 1995, it set up the international area, with José Bezerra de Menezes, the 3rd generation of the controlling group, taking over the presidency.

It inaugurated its head office on Avenida Paulista and internationalized by opening its first overseas branch in Grand Cayman, in 2002. In order to improve the institution’s corporate governance, in 2003 the financial holding company, Gemini Holding S.A., was created for the purpose of centralizing in a single legal entity the shares representing the shareholder control of the company. Simultaneously, Primus Holding S.A. was founded for the same purpose of bringing together in a single legal entity the shares representing the shareholder control of Bic Corretora de Câmbio e Valores S.A., with the former becoming an indirect shareholder of the bank. In 2004, the bank’s net income exceeded R$ 100 million, and it was elected Brazil’s best middle market bank by the Getulio Vargas Foundation (FGV). It was Brazil’s first mid-cap bank to undertake a subordinated debt transaction, and in 2007 its shares began trading on the Bovespa, at Corporate Governance Level 1.


Page 6 BICBANCO 2008 Annual Report

Message from the President The year 2008 was an exceptional one, in the widest sense of the term, characterized on the one hand by extraordinary economic and financial growth, and on the other by depressed commodity prices and world recession. At the height of growth in production, on account of sharp rises in raw material prices in the first semester, the fear arose of a significant increase in inflation, bringing with it greater risk for price stability during this period. The expectation that the increasing risk to price stability would prevail led the Monetary Council to continually raise basic interest rates. Beginning in mid-September, financial tension rose considerably, reverberating on an increasing scale throughout the real global economy. In the wake of sharp declines in commodity prices, which led to a reduction in inflationary pressure, there was considerable increase in uncertainty, which affected liquidity, asset prices and the results of companies in all sectors of industry. This implied risk to growth, and led to coordinated action by the central banks to reduce the interest rates under their influence, a fact which in Brazil began to occur in 2009. On the other hand, with the reduction in inflationary pressure, monetary authorities were able to significantly expand liquidity to banks. In Brazil, decisions were taken to expand liquidity in the financial system in response to a monetary analysis, particularly in the second half of 2008. Growth in loans to the private sector moderated during the year, in line with restricted financing conditions and weak economic activity. Although Brazil’s annual economic growth showed itself to be relatively resistant, it deteriorated rapidly at the end of the year, in the light of the restrictions imposed by banks on taking risk, in addition to the sharp recession in world economic activity. In regard to the results of our institution, the achievement was a relatively positive one, since it tested our management and business models. We continue to be a bank whose assets are predominantly of a short-term nature, and whose funding structure is coherent with the terms and the indexation parameters we employ. In addition, there is no concentration of revenue, as this comes from diversified products and clients. The same applies to funding. Net consolidated earnings in the twelve-month period of 2008 stood at R$ 320,5 million, representing growth of 76.2% when compared to 2007, notwithstanding the significant increase in special provisions, over and above the minimum requirements, to cover credit risk. As the financial crisis unfolded and with the rapid deterioration in the macroeconomic outlook, a considerable increase in free cash to cover greater liquidity risk was inevitable.


BICBANCO 2008 Annual Report Page 7

This occurred at the cost of a reduction in the tenors and volumes of loans, with a consequent impact on earnings in the last quarter of 2008. The increase in our production and financial indicators represents considerable challenges for the earnings policy we have projected. Nevertheless, our principles take precedence over our budget. We are primarily committed to society and concerned about the environment. We have adopted integrity and respect for our neighbors and for internationally accepted standards into our business, and we have extended an assessment of the impacts we may indirectly cause to the environment. We believe that strategy and growth must be sustained through strong governance, so that initiatives can be pursued in an ethical and effective manner. This is what we have sought and adopted in our actions. The current economic scenario has shown that the model of autonomous management of the funds we raise is increasingly restricted. Preparations are therefore under way, so that the results we have estimated for 2009 include funding instruments which enjoy freedom of allocation, such as those from investment funds and multilateral agency funds. If, on the one hand, the reduction in the basic interest rate and margins imposes challenges on us, on the other, it will lead us to increase our marketshare by virtue of the higher demand for credit. At any rate we expect to see a new level of earnings per share in the financial system. Reflecting the world order, and given the need to strengthen the solidity of the financial system, the Central Bank of Brazil has adopted risk policies which are at the same time evolutive and remedial. At government level, it is essential to pursue liquidity mechanisms, while protection against the risks to production and employment for companies will also be particularly important for those industry sectors which suffered most from the negative demand shock, so as to have a positive impact on the financial system. On behalf of the executive board of BICBANCO, I would like to thank our staff, shareholders and suppliers who have contributed to our results and achievements amidst adverse conditions. It gives me even greater satisfaction that we are working efficiently in an agreeable and open environment, according to the employees themselves in 2008, when as a result of the survey carried out by the University of SĂŁo Paulo and the Exame magazine Guide, they elected the institution as one of the best companies to work for. With confidence in our sustainable business strategies and team integration, I once again affirm our objective of continuous growth. JosĂŠ Bezerra de Menezes (Binho) President


Page 8 BICBANCO 2008 Annual Report


01. Corporate Governance

BICBANCO 2008 Annual Report Page 9

01. Corporate Governance The business management model in force at BICBANCO is in line with the best standards of corporate excellence. The aim is to create value for our shareholders, based on sustainable development, transparency and financial discipline with strong operational risk control and internal controls. In this manner we are creating a fertile environment for the sustainability of the business, performance analysis, preservation of our reputation, estimates of investment and opening of new markets. BICBANCO promotes sustainable development by supporting clients, shareholders, employees and society in generating and distributing wealth; creating jobs; granting loans committed to social and environmental aspects; and by taking actions that are programmed for identifying the socio-environmental risk involved in these financings. We have adopted sound corporate governance practices which have been consolidated in recent years. The Bank is currently among the public companies listed on Corporate Governance Level 1 of the S達o Paulo Stock Exchange - BOVESPA.

BICBANCO promotes sustainable development by supporting clients, shareholders, employees and society in creating and distributing wealth


Page 10 BICBANCO 2008 Annual Report

The institution's objective is to create value for the shareholders based on sustainable development

01. Corporate Governance

Principles of Corporate Governance The Principles of Corporate Governance adopted by BICBANCO are: • Equity – Involves fair and egalitarian treatment for all minority groups, whether shareholders or other interested parties (stakeholders). • Accountability – Management is committed to its accountability to those who elected it and to taking responsibility for its acts. • Corporate responsibility – The adoption of practices intended to ensure the perennial nature of the bank and of its business environment. • Transparency – Sincerity of purpose and clarity of process are priorities in our relationship with shareholders, clients, staff and the market.

Commitment to best Corporate Governance practice The bank’s business management model is in line with the best standards of corporate excellence. The institution’s main objective is to create value for the shareholders, based on sustainable development The emphasis is on transparency, financial discipline, control of operational risk and internal controls. The bank maintains a profit-sharing program intended for our employees and which strengthens our commitment to best corporate governance practices, so as to assure all our shareholders appropriate treatment. This is evidenced by its adherence to Level 1 of the BOVESPA. BICBANCO is systematically dedicating itself to a social responsibility project conducted by its own teams. It analyses the possible socio-environment risk involved in financing transactions, takes measures that are programmed to more accurately identify such risks and prepares employees for this identification process.


01. Corporate Governance

BOVESPA Level 1 Since going public on October 15, 2007, BICBANCO’s shares have traded at Corporate Governance Level 1 on the BOVESPA. This commitment assures the shareholders that we always follow sound practices. Among the commitments assumed, worthy of note are: • Improved information concerning each business year; • Holding public meetings with analysts and investors, at least once a year; • Presentation of an annual calendar containing the schedule of corporate events, such as: shareholder meetings, disclosure of results, etc; • Disclosure of the terms of agreements entered into between the bank and related parties; • Disclosure, on a monthly basis, of negotiations involving securities and derivatives issued by the company on the part of the controlling shareholders; • Maintenance in free float of a minimum portion of shares, representing 25% of the company’s capital stock; • When undertaking public placement of shares, the adoption of mechanisms that favor capital dispersion. More information of the site of the BM&FBOVESPA: www.bmfbovespa.com.br

BICBANCO 2008 Annual Report Page 11


Page 12 BICBANCO 2008 Annual Report

01. Corporate Governance

Stakeholder Engagement In order to define the identification and selection of stakeholders, meetings were held involving all managers of the bank on the theme: "What is the social role of a financial institution?". The conclusions of these meetings led to establishing the role of the bank as the orderly distribution of funds in society, balancing this by means of good corporate governance. This implies looking after its interest groups, treating them with reciprocity, providing data, motivation and fundamental resources for them to grow, by creating the capital, intellectual, environmental and financial equity required for their sustainability. Within this scope, in this report BICBANCO has elaborated on themes it considers of public interest, principally to those it considers its major stakeholders: • Market; • Clients; • Regulatory Authorities; • Internal Public; • Shareholders; • Unions;

• Community; • the Environment; • the Media and Press; • Market analysts; • Government and Society • Suppliers.


01. Corporate Governance

Board of Directors (CA) The Board of Directors is responsible for overall guidance of the bank’s business, which includes deciding on economic, financial and administrative policies, in addition to verifying compliance with its resolutions. Among other attributions, the Board of Directors is competent to elect and remove from office members of the executive board and to supervise the execution of their functions. The members of the Board of Directors are elected at the general meeting for a unified two-year term of office, with reelection permitted. They are necessarily private individuals who hold at least one issued share, regardless of whether or not they are domiciled in Brazil. When the bank entered into the Level 1 Adhesion Agreement, taking office as member of the Board of Directors then became conditional on signing the Administrators Instrument of Consent, whereby new members of the Board of Directors are personally liable for submitting to and acting in conformity with this agreement and with Level 1 Regulations. Furthermore, pursuant to the By-laws, members of the Board of Directors will prioritize the use of arbitration for settling conflicts.

The members of the Board of Directors Pursuant to Company Law, the minority shareholders of public companies who hold shares representing at least 15% of the total voting stock, or holders of preferred shares with no voting rights, or with restricted voting rights representing at least 10% of the capital stock, or furthermore, holders of common shares and preferred shares, which together represent at least 10% of the capital stock, are entitled to elect, on a separate ballot, one member of the Board of Directors. It is important to emphasize that the president of BICBANCO, although also a director, does not accumulate the function of Chairman of the Board of Directors, just like the other executive officers.

Board of Directors as of December 31, 2008 Name

Position on the Board of Directors

Data Elected

Term of Office Ends

José Adauto Bezerra

Chairman

April 18, 2007

April 18, 2009

Francisco Humberto Bezerra

Director

April 18, 2007

April 18, 2009

José Bezerra de Menezes

Director

April 18, 2007

April 18, 2009

BICBANCO 2008 Annual Report Page 13


Page 14 BICBANCO 2008 Annual Report

01. Corporate Governance

Support of the Committees With sound corporate governance practices in mind, in February of 2008, BICBANCO created its money laundering prevention committee – Cayman Branch, thus completing a total of 13 special committees and their respective terms of reference that govern how they actually operate.

Executive Management Committee - CDE Defines the institution’s strategies. Is composed of the President and all statutory officers.

Operations Committee Deals with matters involving infrastructure, exposure and operating limits, evaluates estimated results, with the emphasis on monitoring financial margins, their deviations and maintenance.

Executive Credit Committee Carries out a daily evaluation of the portfolios of commercial, rural credit and consumer lending transactions proposed by the commercial departments, where the aim is the profitability and security of the deals.

Executive Treasury Committee Seeks weekly consensus on macroeconomic and political scenarios, in addition to their effects on market risk variables (interest rates, spreads, exchange rates and variable income), defines exposure to these, and monitors the financial schedule, setting the periods for “mismatches” between tenors and currencies, minimum reserves and policies on raising and investing funds.

Informatics Management Committee Approves and monitors projects and investments in technology, setting goals and establishing implementation strategies.

Internal Controls Committee Meets to define policy directives and maintenance of internals controls adopted by the institution.


01. Corporate Governance

Risk Committee Monitors Treasury’s market exposure limits; establishes the methodology for measuring client and counterparty operating limits, in addition to analyzing legal and image risks.

Money Laundering Prevention Committee Examines and identifies suspicions of atypical activities; decides on violations; establishes penalties and informs the competent authorities, while coordinating and proposing mechanisms of cooperation.

Money Laundering Prevention Committee - Cayman Branch Defines the policy and maintenance directives on the prevention of money laundering, analyzes suspicious events or indications that the bank is being used for money laundering, under the guidance of Circular 2.852/1998 of the Central Bank and the rules of the CIMA (Cayman Islands Monetary Authority), in addition to deciding on notification to the Central Bank and the CIMA regarding the fate of the accounts.

Information Security Committee Analyzes the results of the security measures implemented, proposes corporate security and contingency actions, and approves the rules that comprise the Information Security Policy and rules on matters presented.

Ethics Committee Determines the actions required for disclosing and disseminating ethical conduct standards; monitors compliance and implementation of the provisions of the Code of Ethics, in addition to analyzing, ascertaining and forwarding violations. It meets once a month.

Sustainability Committee - "BLUE" Committee Indicates strategies for policies, standards, investments, training and socioenvironmental programs, so as to add value to all parties involved.

Credit Process Evaluation Committee Defines the credit policy directives, evaluates their maintenance ands establishes new operating standards and solutions which might improve the credit process at its different stages.

BICBANCO 2008 Annual Report Page 15


Page 16 BICBANCO 2008 Annual Report

01. Corporate Governance

Organizational Structure The organizational structure adopted by the institution is based on departmentalization by area, products and region, so as to optimize and to further administrative and operational development at all levels of the organization.

Presidency Responsible for the overall administration of the Bank, operating so as to fulfill the approved strategic plan and seeing to it that investments made generate the returns established within defined standards. Represents the Bank before the Brazilian and international monetary authorities, regulatory bodies and the market in general.

General Vice Presidency Develops and plans the policies for managing the administration and investment of third-party funds.

International Vice Presidency Establishes the operational policies and strategies involving foreign currency-denominated asset and liability transactions, in addition to Cayman Branch.

Operations Vice Presidency Discloses the principles and sees to it that the operations of the different units comply with them, in accordance with the vision, mission and culture defined by the presidency and the deliberative committees.

Statutory Controllership Management Draws up accounting policies and procedures, in addition to management, fiscal and tax controls and information. Is responsible for managing the processing of the Treasury, formalization and foreign exchange transactions undertaken by the Bank.

Statutory Infrastructure and HR Management Develops Human Resources policies and procedures, administrative and customer services, marketing and communication. Provides the Bank with the technology infrastructure required for managing the company and processing the products. Is responsible for managing the processing of transactions in the branches.


01. Corporate Governance

BICBANCO 2008 Annual Report Page 17

President and Chief Executive Officer

Committees Executive Management

Internal Audit

Treasury Executive

Legal Department

Credit Executive

Credit Recovery

Vice-Presidencies

Committees

General

Third-Party Funds Management

Operational

International

Correspondent Banks

Internal Controls

Operational

Foreign Exchange and Foreign

Prevention of Money laundering Ethics Risk

Executive Boards

Informatics Officer

Controllership

Information Security

Administrative and Human Resources

Credit Process Evaluation Sustainability Blue Movement

Information Technology

Accounting

Regional Commercial

Branch Coordination

Tax and Fiscal Control

Treasury/Funding

Branch Administration

Formalization of Transactions

Special Transactions

Human Resources

Cards Administration

Credit

Marketing and Communication

Operational Support

Services and Products

Accounts Payable and Expenses Control

Corporate Control

Planning

Infrastructure

Studies, Accounting Rules and Procedures

Financings and Leasing

Projects and Processes

Ombudsman’s Department

Corporate Governance Investor Relations Business Support


Page 18 BICBANCO 2008 Annual Report

01. Corporate Governance

Shareholder Composition The BICBANCO economic conglomerate is structured as follows: Bezerra de Menezes Group 100%

Related Parties

Treasury Shares

Shares in Free Float

Gemini Holding

Primus Holding

Common

34.70%

46.48%

17.06%

0.34%

-

1.42%

Preferred

18.75%

2.14%

1.13%

0.18%

2.55%

75.25%

28.26%

100%

28.55%

BIC Corretora

10.62%

0.27%

1.03%

31.27%

100% BIC Leasing

BIC Cartões

BIC Informática

BIC Distribuidora Base: 12/31/2008

Companies Controlled by BICBANCO Gemini Holding S.A., Bic Corretora de Câmbio e Valores S.A. and Primus Holding S.A. With the aim of enhancing corporate governance practices, in 2003, Gemini Holding and Primus Holding were founded for the purpose of consolidating the equity participations of the Bezerra de Menezes Family. BIC Corretora, founded in1985, has no operational activities, its presence only being related to its participation in the Bank. As of December 31, 2008, Gemini Holding and BIC Corretora held 39.2% of the Bank’s capital stock.


01. Corporate Governance

Shareholder Composition of Gemini Holding as of December 31, 2008 Shareholder

Common

%

José Bezerra de Menezes

6,281,443

Francisco Humberto Bezerra

%

Total

%

5.49

18,612,107 40.58

24,893,550

15.54

59,877,840

52.38

17,067,754 37.23

76,945,594

48.04

José Adauto Bezerra

17,304,343

15.14

3,012,210

6.57

20,316,553

12.68

José Adauto Bezerra Júnior

16,853,304

14.74

4,936,530 10.76

21,789,834

13.60

Moema Bezerra de Menezes Mota

3,449,540

3.02

504,949

1.10

3,954,489

2.47

Ângela Bezerra de M. Machado

3,449,540

3.02

504,949

1.10

3,954,489

2.47

Mônica Bezerra Araripe

3,449,540

3.02

504,949

1.10

3,954,489

2.47

Regina de Fátima Almeida Bezerra

3,449,540

3.02

504,949

1.10

3,954,489

2.47

202,195

0.18

212,618

0.46

414,813

0.26

114,317,285

100

45,861,015

100 160,178,300

100

Sérgio da S. Bezerra de Menezes Total

Preferred

Shareholder Composition of Bic Corretora as of December 31, 2008 Shareholder

Common

%

Preferred

Primus Holding S.A.

93,198,833

100

Total

93,198,833

100

%

Total

%

0

0 93,198,833

100

0

0 93,198,833

100

Shareholder Composition of Primus Holding as of December 31, 2008 Shareholder

Common

%

Preferred

José Bezerra de Menezes

15,500,100

37.81

113

37.67 15,500,213

%

Total

37.81

%

Francisco Humberto Bezerra

11,033,433

26.91

81

27.00 11,033,514

26.91

José Adauto Bezerra

14,466,767

35.28

106

35.33 14,466,873

35.28

Total

41,000,300

100

300

100 41,000,600

100

BICBANCO 2008 Annual Report Page 19


Page 20 BICBANCO 2008 Annual Report

01. Corporate Governance

Companies Controlled by BICBANCO Bic Arrendamento Mercantil S.A. (BIC leasing) Founded in 1992, this is publicly quoted company whose purpose is to undertake transactions involving leasing of goods and fixed assets, principally vehicles, machines and equipment manufactured in Brazil. It was authorized to operate as a leasing company on March 10, 1993, effectively coming into operation as from the second semester of that same year.

Shareholder Composition of Bic leasing as of December 31, 2008 Shareholder

Common

%

Preferred

Total

%

47,999,976

100

0

0 47,999,976

100

Francisco Humberto Bezerra

4

0

0

0

4

0

José Adauto Bezerra

4

0

0

0

4

0

José Bezerra de Menezes

4

0

0

0

4

0

José Adauto Bezerra Júnior

4

0

0

0

4

0

José Newton Lopes de Freitas

4

0

0

0

4

0

Sérgio da S. Bezerra de Menezes

4

0

0

0

4

0

48,000,000

100

0

0 48,000,000

100

Banco Industrial e Comercial S.A.

Total

%

BIC Administradora de Cartões de Crédito S/C Ltda. (BIC Cartões) Founded on September 30, 1997, the company remained operational until 2004, issuing and administrating clients' credit cards, an activity it has since ceased operating. It currently issues pre-paid cards, leasing the bin it holds with Visa.

Shareholder Composition of Bic Cartões as of December 31, 2008 Shareholder Banco Industrial e Comercial S.A. José Adauto Bezerra Júnior Total

Common

%

Preferred

%

Total

%

869,999

100

0

0

869,999

100

1

0

0

0

1

0

870,000

100

0

0

870,000

100


01. Corporate Governance

Bic Informática S.A. (Bic Informática) Founded on March 3, 1994, it is a 100% subsidiary of the Bank, providing the latter with data processing and services and technical support for its activities.

Shareholder Composition of Bic Informática as of December 31, 2008 Shareholder

Common

%

Preferred

%

Total

%

Banco Industrial e Comercial S.A.

50,000

100

0

0

50,000

100

Total

50,000

100

0

0

50,000

100

Bic Distribuidora de Títulos e Valores Mobiliários (Bic Distribuidora) Founded in November of 1992 and authorized to function by the Central Bank in March 1993, BIC Distribuidora undertakes a limited number of securities trades for account and by order of the Bank.

Shareholder Composition of Bic Distribuidora as of December 31, 2008 Shareholder

Common

%

Preferred

%

Total

%

Banco Industrial e Comercial S.A.

7,500,000

100

0

0

7,500,000

100

Total

7,500,000

100

0

0

7,500,000

100

BICBANCO 2008 Annual Report Page 21


Page 22 BICBANCO 2008 Annual Report

01. Corporate Governance

Remuneration to shareholders The Board of Directors approves the distribution of dividends and/or equity interest, based on the annual or half-year financial statements

In the 2008 financial year, R$ 126.4 million were distributed to shareholders, of which the gross amount of R$ 95.4 million by way of equity interest and R$ 31 million as dividends. In 2008, the Bank began remunerating its shareholders on a quarterly basis. BICBANCO has no formal dividends policy. Its shareholder remuneration practice is based on Brazilian Company Law and on the Bank’s by-laws, which stipulate a minimum dividend in an amount equal to or a percentage exceeding 25% of the adjusted annual net earnings. The Board of Directors approves the distribution of dividends and/or equity interest, based on the annual or half-year financial statements. The amount of any distributions will depend on several factors, such as: The operating result, financial position, the requirement for funds and the outlook and other factors which the Board of Directors and the shareholders deem to be relevant. The table below shows the history of the distribution of dividends and equity interest for the periods indicated: Amount per Share (R$)

Period

Type of Income

Type of Event and Date

Shareholder Position

Payment Date

Total Amount (R$ thou)

Common /Preferred

1Q08

Equity Interest

MBD 05/07/08

05/08/08

05/19/08

23,860

0,085770330

2Q08

Equity Interest

MBD 06/30/08

06/30/08

07/10/08

23,860

0,085770330

3Q08

Equity Interest

MBD 09/11/08

09/30/08

10/10/08

23,860

0,087763157

4Q08

Equity Interest

MBD 12/29/08

12/30/08

02/10/09

23,860

0,089637995

2008

Interim dividends

MBD 09/11/08

09/30/08

10/10/08

31,000

0,114025895

2008

Dividends

GSM 03/23/09

03/23/09

04/08/09

40,000

0,155155927

166,440

0,618123634

2008 Total


01. Corporate Governance

BICBANCO 2008 Annual Report Page 23

Treasury shares As determined at the Special General Meeting held on November 10, 2008, the Management of BICBANCO was authorized to cancel nine million, two hundred and twenty-seven thousand, seven hundred (9,227,700) preferred shares which had been previously repurchased based on Board of Directors’ resolution dated June 30, 2008, and held in Treasury, without reducing the capital stock. The cancellation was registered as a reduction in profit reserves. On December 9, 2008, at a Meeting of the Board of Directors, the Management of BICBANCO was authorized to repurchase the Bank’s own shares for subsequent cancellation, without reducing capital stock, up to the limit of 10.0% of the nominative preferred shares in free float, namely 8,491,018 shares. The authorization granted at the Meeting of the Board of Directors aims to apply the available funds, arising from the capital reserve; BICBANCO acquired in the period from December 9, 2008 to December 12, 2008 a total of 2,775,300 nominative preferred shares, at the average weighted cost of R$ 2,32286 per share, representing R$ 6,5 million; maximum cost was R$ 2,98, and the minimum, R$ 2,02; market value of the shares as of December 31, R$ 4,02.

BICBANCO acquired in the period from December 9, 2008 to December 31, 2009, a total of 2,775,300 nominative preferred shares


Page 24 BICBANCO 2008 Annual Report

01. Corporate Governance

Remuneration In accordance with the by-laws, the shareholders of BICBANCO must fix, at the general meeting, the global remuneration of the Board of Directors and the Executive Board. It is incumbent on the Board of Directors to stipulate the individual amounts payable to its members and the members of the Executive Board. Global remuneration for the 2008 business year was set at R$ 7,6 million. In the 2007 business year, the remuneration of Executive Board members totaled R$ 5,6 million. Furthermore, in business years when shareholders received mandatory minimum dividends, the members of the Board of Directors and the Executive Board were entitled to a share in the Bank’s profits, after deducting accumulated losses and the provision for Income Tax and Social Contribution on net earnings, with due regard for the fact that the total of this share may not exceed management’s annual remuneration or one tenth of the Bank’s profits, whichever is lower, pursuant to the provisions of article 152 of Brazilian Company Law.


01. Corporate Governance

Statutory Audit Board In accordance with Brazilian Company Law, the Statutory Audit Board is a corporate body independent of the management and the independent auditors, which can function both on a permanent or non permanent basis, in which case it will only function during business years when it is requested to do so by shareholders at the general meeting. The Bank’s bylaws contemplate a non permanent Statutory Audit Board. When elected, it will comprise at least three and at the most, four full members, with an equal number of substitutes, in accordance with the provisions of the aforementioned law. Also pursuant to the by-laws, the members of this Board are subject to Arbitration Regulations. The Statutory Audit Board has not been installed, for which reason no members have been appointed. Brazilian Company Law requires that members of the Statutory Audit Board receive remuneration of at least 10.0% of the annual average amount paid to the company’s officers. They cannot be members of the Board of Directors; members of the Executive Board, its employees; employees of companies controlled by the Bank or by a group company; spouses or up to third degree relatives of any member of the Board of Directors or the Administrative Board.

General Meetings The General Meeting is normally held within the four months following the end of each business year and, on special occasions, whenever business interests so demand. All shareholders of BICBANCO common or preferred shares can take part in the General Meeting. Section 6 of the By-laws of BICBANCO stipulates that preferred shares shall not be entitled to vote at the General Meeting, while shareholders of this class of shares are entitled to the advantages contemplated in the by-laws (Section 6, letters "a", "b" and "c"), and under Brazilian Company Law. All documents for analysis or discussion at the General Meeting, whether ordinary or special, are always made available to the shareholders at the BMF&BOVESPA (www.bovespa.com.br), in addition to being held on file at the corporate headquarters of BICBANCO for consultation, as from publication date of the first notice of meeting.

BICBANCO 2008 Annual Report Page 25


Page 26 BICBANCO 2008 Annual Report

At general meetings that are regularly called and installed, shareholders are authorized to decide on matters concerning the business purpose and to determine what they consider to be convenient to the interests of the Bank

01. Corporate Governance

At general meetings that are regularly called and installed, shareholders are authorized to decide on matters concerning the business purpose and to determine what they consider to be convenient to the interests of the Bank. At the Annual General Meeting it is exclusively incumbent on the shareholders to approve the financial statements, decide the fate of the net earnings and the payment of dividends referring to the immediately preceding business year and elect the directors, notwithstanding the fact that under Brazilian Company Law they can be elected at special general meetings. Of the elected directors, the by-laws state that at least 20% of them must be independent directors. The members of the Statutory Audit Board, in the event this has been installed following a request by a sufficient number of shareholders, can be elected at any general meeting, which in turn is competent for removing any member of the Board of Directors from office at any time. As a rule, Brazilian Company Law states that the general meeting will be installed, at the first call, in the presence of shareholders who hold at least 25.0% of the voting stock and at the second call, with any number of shareholders present. Where the shareholders have been called to resolve on changes to the by-laws, the quorum for installation at the first call will be at least two-thirds of voting shares and, at the second call, any number of shareholders. In general, approval of subjects discussed at general meetings takes place by the affirmative vote of the majority of holders of common shares who are present or who are represented by attorneys-in-fact, while abstentions are not taken into account for the purposes of this calculation.


01. Corporate Governance

The Brazilian Securities Exchange Commission – CVM can authorize a reduction in the abovementioned quorum in the case of publicly quoted companies with shares dispersed in the market and whose last three general meetings were held in the presence of shareholders representing less than half of the voting shares. As a rule, the approval by shareholders who are present in person or through an attorney-in-fact at the general meeting and who represent at least the majority of voting shares, is required for approving any subject matter, while abstentions are not taken into account for the purpose of this calculation. All general meetings are called by at least three publications in the Official Gazette of the State of São Paulo, in addition to any other widely circulating newspaper. The first notice of meeting shall be given at least 15 days prior to holding the general meeting, and the second notice of meeting, eight days in advance. The CVM may, however, at the request of any shareholder after hearing BICBANCO and in certain circumstances, postpone the date of the general meeting, so that it is held within 30 days following the date of notice of meeting. General meetings are held at the Bank's head office, on the 15th floor of Avenida Paulista, 1.048, in the capital city of São Paulo. Brazilian Company Law permits general meetings to be held outside the Bank's corporate headquarters provided that, in the city of São Paulo, the respective notification of meeting expressly and unequivocally indicates the location where the general meeting is to be held.

BICBANCO 2008 Annual Report Page 27


Page 28 BICBANCO 2008 Annual Report


02. Risk Management

BICBANCO 2008 Annual Report Page 29

02. Risk Management Risk Management aims to ensure the continuity of the business, while at the same time guaranteeing returns to shareholders. BICBANCO prioritizes responsible and sustainable management of its portfolios, and in the search for excellence it adopts stricter standards than those required by the regulatory bodies. Risk management is paramount in the decision-making process and is a differentiating competitive factor that makes evaluating the risk-return ratio possible. The risk management culture at BICBANCO is an important component in identifying risk exposure and in determining the level at which this will be tolerated when doing business. This choice varies with time, reflecting the business environment, the attitude of the competition, client needs and the expectations about results. In anticipation of regulations, BICBANCO created the Risk Management area in 2003. The main purpose was to construct a methodology for managing risk and internal controls for all the Bank’s processes, adapting solutions to the existing standard of business based on best international practices. It maintains a Risk Committee which evaluates and monitors the information received by the control and risk areas, in addition to an Internal Controls Committee which looks after the controls associated with each of the risks involved. Specifically in the case of market risk management, it also has a Treasury Committee. The Risk Management areas report directly to the Corporate Governance Officer.

Risk management is paramount in the decision-making process and is a differentiating competitive factor that makes evaluating the risk-return ratio possible


Page 30 BICBANCO 2008 Annual Report

02. Risk Management

Market Risk In order to manage exposure and analyze the possible impacts in different scenarios, the bank monitors the detailed breakdown of assets and liabilities per index

Limits and exposure to market risk ended the year relatively low when compared to the institution's shareholders' equity. As of December 31, 2008, the value at risk – VaR – in the case of the portfolio classified as the Trading Book, in accordance with transaction classification criteria based on the portfolio concepts defined in the Basle Agreement, considered to be the exposures affecting the institution's current results, stood at R$ 4,95 million, while value at risk of the institution's portfolios as a whole – global VaR – was R$ 29,5 million. The structure of the asset and liability terms enables safe cash flow administration, since no unfavorable gaps exist. Liquidity is monitored and analyzed using statistical and economic and financial models of the variables in assets and liabilities affecting the cash flow and level of domestic and foreign currency reserves. The institution's policy is to avoid creating relevant foreign currency exposure requiring capital cover. In order to manage exposure and analyze the possible impacts in different scenarios, the bank monitors the detailed breakdown of assets and liabilities per index. At close of the business year on December 31, 2008, foreign exchange exposure for capital requirement purposes, in compliance with Central Bank Circular 2008, dated June 25, 2008, totaled R$ 51,3 million against R$ 8,4 million in 2007. Global mismatch, which offsets opposing (overbought and oversold) exposures in Brazil and abroad totaled R$ 5,1 million, representing a slight increase when compared to the position of R$ 3,6 million in December of 2007. The Brazilian scenario had been freely expanding up to September of 2008. However, the last quarter was marked by the onset of the international crisis. One of the first spin-offs was the liquidity crisis in the Brazilian financial system caused by the suspension of international credit facilities, partly mitigated by the Central Bank's release of part of the mandatory deposits. With most of its assets and liabilities subject to market risk, the Bank felt the effects of the crisis. However, the analysis system which the Bank had installed enabled the construction of portfolios that contemplated alternative scenarios, analyzing the impacts on the value of the positions in the different scenarios tested, so as to ensure continuity of the business.


02. Risk Management

The Bank undertakes traditional derivative transactions so as to meet the requirements of its clients, in addition to executing its risk management policy as a means of minimizing the risks arising from its commercial and financial transactions. The derivatives in which it trades are acquired for two basic purposes: • Hedge – for hedging the structural portfolio; • Trading – as an instrument for taking own positions and for managing the risks of the derivatives negotiated with clients seeking to manage market risk, resulting basically from fluctuations in interest rates, foreign exchange rates and asset prices. Most of the derivative contracts negotiated with clients in Brazil involve swaps and futures transactions, all of which are registered with the BM&FBOVESPA S.A. – BOLSA DE VALORES, MERCADORIAS E DE FUTUROS (BM&FBOVESPA), or with Central de Custódia e de Liquidação Financeira de Títulos, or CETIP, the custody and financial settlement clearing house. The DI and dollar futures contracts on the BM&FBOVESPA are mainly used as instruments for locking in the rates on financings offered to clients, with tenors and currencies mismatched with those of the funds raised for financing them. Abroad, NDF (Non Deliverable Forward) contract transactions are undertaken for the purpose of hedging the funds raised overseas. The institution uses financial instruments for consolidated management of its positions and to meet the requirements of its clients, classifying its own positions as "Intended for Hedge" (market risk) and "Trading", both with limits and responsibilities. The strategy of hedging equity positions is in line with macroeconomic analyses, and is approved by the Treasury Committee. The models used in managing derivativebased risk are periodically reviewed, while decision-making takes into account the best risk/return ratio, by estimating possible losses based on the analysis of macroeconomic scenarios. At the end of the 2008 business year there were no relevant positions with clients that might lead to margin calls or mismatches. The principal factors of the derivatives risk assumed as of December 31, 2008 involved foreign exchange rates, interest rates, dollar coupons and variable income, where the aim is maximize risk-return ratios, even in highly volatile situations. Control of portfolio risk management uses systems such as: VaR, Profitability and liquidity risk.

BICBANCO 2008 Annual Report Page 31

The Bank undertakes traditional derivative transactions so as to meet the requirements of its clients, in addition to executing its risk management policy as a means of minimizing the risks arising from its commercial and financial transactions


Page 32 BICBANCO 2008 Annual Report

02. Risk Management

Exchange-quoted prices usually provide the best estimate of the fair value of the financial instruments. However, not all instruments enjoy liquidity or quotations, and it is necessary to adopt estimates of present value and other pricing techniques. The following criteria are adopted for obtaining these market values; • Futures and Forwards: are quoted on the exchanges. • Swaps: the cash flow is estimated for each party and discounted to present value, in accordance with the corresponding interest curves obtained based on BM&FBOVESPA and/or market prices of government securities for transactions in Brazil, and on international exchange-quoted prices for overseas transactions; • Options: statistical models incorporating the price volatility behavior of the underlying asset, the interest rates, strike price and spot price of the merchandise. The balances arising from these transactions are booked in memorandum and equity accounts, in accordance with specific Central Bank rules. From an accounting standpoint, derivative instruments are classified on the date on which they are acquired, according to management’s


02. Risk Management

BICBANCO 2008 Annual Report Page 33

intention to use them as protection (hedge) instruments or not, pursuant to Central Bank Circulars 3.082/02 and 3.150/02. Transactions involving financial instruments undertaken at the request of clients, or which do not meet the hedge criteria, in most cases derivatives used for managing global risk exposure, are booked at market value, with realized and unrealized earnings and losses recognized directly in the statement of results.

The centralized decisionmaking process optimizes business opportunities, while also ensuring that the approval process is necessarily timely and flexible

Swap transactions are registered with the BM&FBOVESPA and the custody and financial settlement clearing house (CETIP), while adjustments referring to differences receivable or payable are booked in the respective asset or liability account, in consideration of revenue or expense. Futures market transactions are registered with the BM&FBOVESPA, while the daily adjustments appropriated/paid are booked as revenue or expense.

Credit risk Once the liquidity crisis which assailed financial institutions beginning September of 2008 was over, BICBANCO expected the fallout from this wave to affect companies which had granted loans. The Bank remained alert to the capacity of borrowers to honor their obligations, in addition to establishing a credit policy based on internal and external factors involving the economic scenario in Brazil and abroad, which is also supported by analysis procedures developed through its own experience. A factor which enabled the bank to adapt rapidly to the economic environment was that of credit approval using management tools that automatically provide information to the appropriate levels of responsibility, in line with the workflow established by the credit and formalization policy. This centralized decision-making process optimizes business opportunities, while also ensuring that the approval process is necessarily timely and flexible. The institution possesses a portfolio evaluation instrument which makes it possible to measure the profitability of transactions as a function of the economic capital they consume, and the amount of the expected loss to the credit portfolio, in addition to enabling transactions to be priced as a function of the risk involved. Stress testing is used for measuring possible losses in scenarios where the risk area considers such losses likely, for a reliability interval of up to 99.99%.


Page 34 BICBANCO 2008 Annual Report

02. Risk Management

Operating Risk An effective internal control system reduces the probability of human error and irregularities in processes, products and systems

BICBANCO adopts the Simplified Alternative Standardized Approach while complementing the view of operating risk by means of a management model for economic evaluation based on business lines, quantifying the operating risks using statistical models that enable it to calculate expected losses and to allocate capital for unexpected losses (VaR with a reliability interval of 99.9%). Exposure to operating risk is reviewed at least every six months, including evaluating and adjusting the controls according to the strategies adopted by the Bank. An effective internal control system reduces the probability of human error and irregularities in processes, products and systems. The Risk and Internal Controls Committees establish the acceptable level of tolerance to risk. With the aim of evaluating its management structure, BICBANCO hired the consulting company PricewaterhouseCoopers who, after a wide-ranging study based on tests, verified that the Bank’s operating risk management structure is adequate, granting the Bank assurance for the operational risk management process in January of 2008. The analysis was carried out in accordance with NPO 1 (Assurance Rules and Procedures), established by the Institute of Independent Accountants of Brazil (IBRACON). Operating risk management is periodically evaluated by internal audit, with due regard for the independent nature inherent to audit work, in regard to verification of the operating risk management structure and its extent within the institution, the verification of the level of conformity with evaluation methodologies and procedures and the measurement of operating risk. Every six months, studies are undertaken of the institution's entire processes, so as to identify each risk associated with these processes. Also associated with these risks, an evaluation of the controls is carried out, awarding points that are reevaluated at least every six months by means of CSA – Control Self-Assessment. Currently, operating risks on all critical processes are identified, evaluated, monitored and controlled.


02. Risk Management

BICBANCO 2008 Annual Report Page 35

Business continuity plan The Business Continuity Plan is also included within the scope of the operating risk management area and comprises a series of prevention and recovery measures in the event of a disaster or some other drastic interruption to business occurring, and ensures the capacity to operate and to minimize losses. The measures contemplated in this plan extend far beyond the simple adoption of an insurance plan, ensuring that the institution is capable of operating on a continuous basis. The Plan was drawn up for every process or critical activity, understood as being those with a high impact, given the possibility of adverse external factors, such as: natural catastrophes, epidemics or even terrorism (beyond internal controls) which may cause drastic interruptions to the processes. The business continuity plan is divided into three modules: • PAC – Crisis Management Plan This represents the most effective guarantee in terms of management in adverse situations, describes how the teams function before, during and after the occurrence of the event and defines the procedures to be carried out in the period of return to normality. • PCO – Operational Continuity Plan This defines the procedures for the contingency process involving the assets that support each business process, with the aim of reducing down time and consequently, the potential direct or indirect impacts on the business. • PRD – Disaster Recovery Plan This defines a plan for recovering and restoring the functionalities of the affected assets that support the business processes, in order to reestablish the original operating environment and conditions while providing guidance on the activities involving the alternative site, so that the Bank continues to do business. It describes the measures for activating manual processes or the resources hired, while ensuring continuity of the business processes in the event of failure in the information system.

The Plan was drawn up for every process or critical activity, understood as being those with a high impact, given the possibility of adverse external factors


Page 36 BICBANCO 2008 Annual Report

02. Risk Management

Socio-environmental Risk BICBANCO, convinced of the importance of sustainable growth, operates in line with best global practices where sustainability and corporate governance prevail

BICBANCO and its clients work together to collaborate towards effective change in the relation between manufacturing and commercial activities, the environment and society, including actions and procedures involving the corporate credit approval process and the maintenance of clients’ current and investment accounts, with the aim of integrating socio-environmental matters into the business. These actions include training the institution's professionals and transforming these values into the institution's culture. On the other hand, it encourages socio-environmental practices in its clients' businesses. The Bank has developed a methodology for evaluating socio-environmental risks based on risk category. In order to fulfill this directive, it entered into an agreement with the Getulio Vargas Foundation for developing an evaluation system. This project created a series of questionnaires directed at those sectors and activities most likely to have an impact on the environment and which most affect people’s well-being, so that its managers apply them to clients, suppliers and commercial partners. At the same time, a socio-environmental risk management system was developed under an agreement with the SERASA, so as to allocate clients a socio-environmental rating. These reports are intended for some clients who operate with higher volumes. BICBANCO, convinced of the importance of sustainable growth, operates in line with best global practices where sustainability and corporate governance prevail. It maintains good sustainability practices within the business strategy, in credit and purchases, while promoting transparency, ethics and respect for the environment as the beacons of its administrative and business practices. It has defined commercial restrictions on those companies and/or persons who have used child or slave labor, adopting effective mechanisms for monitoring clients and suppliers. Lastly, for the purposes of on-lending funds from international financial bodies, it takes into account the socio-environmental evaluation.


02. Risk Management

The institution has a Sustainability Committee, known as the Blue Committee, which is the internal body designated to analyze matters involving sustainability which affect the entire Bank, and whose responsibility is to encourage and monitor the policies, client behavior, the adoption of measures and the development of the internal rules required for the theme of sustainability, including awareness and engagement of all members of staff. With the aim of turning the opportunities arising in the environmental sphere into sources of revenue, the Bank makes use of products intended for those publics who need to make improvements to their industrial plants, so as to render them less harmful to the environment. To do so, the institution has credit facilities with multilateral agencies intended for the specifically defined public. There is no specific and quantitative calculation of the costs and carbon credits for these transactions.

BICBANCO 2008 Annual Report Page 37


Page 38 BICBANCO 2008 Annual Report


03. Economic Scenario and Performance

BICBANCO 2008 Annual Report Page 39

03. Economic Scenario and Performance The year 2008 began with forecasts of an inflationary scenario and the possible onset off a recession in the USA. Only in December did it become clear that the country had been in recession since the end of 2007, when the National Bureau for Economic Research (NBER) disclosed its report. However, the rest of the world appeared to be sufficiently protected in order to support the crisis beginning to take shape. In the first phase, the emerging countries benefited from the resources of US investors, resulting in the devaluation of the dollar and gains in prices of farm and mineral commodities. This led to concerns about global hunger and world leaders came together to discuss alternatives or measures for preventing this. At the same time, oil prices reached record highs, setting of a new round of studies into finding substitutes for its fuel sub-products, while discussions became more intense regarding how to avoid the transfer of farmland to energy products. In September, the entire world economic scenario changed when global investors began to lose trust in the wake of the problems faced by Lehman Brothers, exploding the assumption that the crisis would not lead to the downfall of a traditional US financial institution, and setting off a chain of events that shook stock exchanges worldwide. US government intervention became inevitable; even with the injection of US$ 700 billion to bail out the markets, these did not react and stock exchanges continued to fall. The drop in financial system liquidity pointed to a significant contraction in credit, reversing the expectations for world growth and sending conservative investors running for shelter or to protect their wealth in US government securities. The direct result was the global appreciation of the dollar and the resulting decline in commodities. With the impact of the depreciation of commodities and higher credit risk, there was large-scale enforceability of derivatives contracts, whose liquidation in dollars further strengthened the price of the currency.

The direct result was the global appreciation of the dollar and, with it, the decline in commodities


Page 40 BICBANCO 2008 Annual Report

In Brazil, throughout most of 2008, the Brazilian economy remained fired up, showing strong across-the-board-growth in different sectors of the economy

03. Economic Scenario and Performance

In Brazil, throughout most of 2008, the Brazilian economy remained fired up, showing strong across-the-board-growth in different sectors of the economy. GDP growth had been projected at 6.0% p.a., driven by the expansion in credit, investments, consumption, employment and incomes. Beginning in September 2008, the deepening international crisis began to affect economies which up until then had shown themselves to be unaffected, like Brazil. As a result of the entire scenario described, in the fourth quarter of 2008 Brazil’s economic growth experienced inflexion. Expansionist forecasts gave way to a slowdown scenario. Movement of international funds restricted liquidity in Brazil, which led to higher funding costs for banks and restrictions on loans in a flight-to-quality movement which later was to bring about a scenario of increased default. The scarcity of credit worsened during the last quarter of the year, leading to a sharp contraction in manufacturing activity. The year 2008 was characterized by oscillations in the main economic indicators. During several months of the year, inflation stood above the level established under the target system. In this context, the Central Bank raised the SELIC rate until it reached the level of 13.75% (against 11.25% in 2007). In September, the upward cycle ended, and the rate remained stable until the end of the year. Inflation as measured by the IPCA closed the year at 5.9% - below the 6.5% annual ceiling stipulated for the year. This notwithstanding, inflation in 2008 was the highest recorded since 2004, at 1.44 percentage points above the rate in 2007. The foreign exchange market showed greater volatility, with the Real ending the year quoted at R$2,3370/US$, variation of 31.9% in relation to the close of 2007 (R$1,7713/US$), after having attained during the year one of the lowest levels for a decade. Beginning in September of 2008, the Brazilian authorities took several initiatives to mitigate the fallout from the retraction that had been set off, such as changes to mandatory deposit rules, foreign currency auctions, reduction in IPI tax on new cars and lower income tax in the case of individuals, among others. These measures did not have sufficient time to take full effect. At the end of the financial year, market uncertainties surrounding the economy in 2009 predominated, although with an apparent solution to the liquidity problem.


03. Economic Scenario and Performance

BICBANCO 2008 Annual Report Page 41

In the case of BICBANCO, the liquidity crisis arising from the systemic aversion to risk led to changes in the results outlook. In this context of uncertainties, the Bank adopted a position of caution in relation to risk. As in other circumstances with similar characteristics requiring larger reserves, the Bank increased its immediate liquidity by not renewing part of its loans while making efforts to retain funding from clients. As a result, total cash and cash equivalents which stood at R$ 945 million in June 2008, rose to R$ 1.165 million in September, and to R$ 1.964 million in December/08. Total of funds raised reached R$ 8,8 billion, an increase of 27.3% in twelve months. Loans, which are the bank's main asset, reached R$ 8,1 billion, an increase of 5.9% for the year.

BICBANCO's net earnings ascertained in financial year 2008 totaled R$ 320,5 million, with growth of 76.2% over 2007

Economic Results

In order to face the challenge brought on by the crisis, including lower quality credit risk on account of joint action by financial institutions to restrict credit and the resulting reduced ability to bank their clients, the Bank cautiously increased provisions from R$ 101,6 million (gross before taxes) in the fourth quarter of 2008, which adversely affected the result. In the case of all credits in categories C to G, the percentage of provisions was extrapolated to practically the level required for the higher risk capacity. This measure led to total provisions which ensure more appropriate coverage ratios for the business outlook for the year 2009. Even with this measure, BICBANCO’s net earnings ascertained for the 2008 business year totaled R$ 320,5 million, with growth of 76.2% over 2007. The efficiency ratio advanced to 38.6%, showing an improvement of 5.6% p.p. in comparison with 2007.


Page 42 BICBANCO 2008 Annual Report

03. Economic Scenario and Performance

Assets Total Assets

Total assets

(R$ Millions)

9.2% 10.992,1

6.759,0

12.007,3

Loans In 2008, loans totaled R$ 8.066,4 million, 5.9% higher than in December of 2007. Worthy of note is the fact that the portfolio of all original loans was maintained, in other words, no transactions were assigned or sold, in spite of the scenario experienced at the end of the year.

7.320,0

2005

2006

Total assets rose to R$ 12.007,3 million at the end of 2008, up by 9.2% in twelve months.

2007

2008

Loans

(R$ Millions) 5.9% 7.617,9

8.066,4

4.433,7 2.775,6

The loan portfolio accounted for 67.2% of the Bank's assets at the end of the financial year. Corporate lending to mid-size and large companies was equivalent to 94.3%, with payroll-deductible loans representing 4.7% and personal loans, 1.0% of loans. The Bank's policy on granting credit prioritizes risk dilution, in addition to collateralizing transactions by means of guarantees. The emphasis on diversification and dilution of transactions aims to distribute credit across different geographic regions, economic segments and products, in addition to avoiding any kind of individual concentration. Guarantees of receivables and financial investments, structures considered satisfactory and highly liquid, covered the equivalent of 66.6% of corporate credit in Reais. Doubtful loan provisions totaled R$ 310,9 million at the close of the financial year, a balance 133.3% higher than that of December of 2007. Provisions maintain a comfortable coverage ratio of 246.6% of loans past due by 15 days or more, which totaled R$ 126,1 million. Loans by Type (R$ millions)

2005

2006

2007

2008

2008

2007

% Diff.

Working capital

4.395,7

4.038,6

8.8

Trade finance

1.933,2

1.590,1

21.6

Overdraft accounts

873,7

1.007,9

(13.3)

Payroll-deductible loans

378,9

477,4

(20.6)

Leasing

115,8

19,2

504.3

Personal loans

82,2

156,9

(47.6)

Other credits

286,9

327,8

(12.5)

8.066,4

7.617,9

5.9

Total


03. Economic Scenario and Performance

Loans – GDP x BICBANCO (%)

BICBANCO 2008 Annual Report Page 43

Distribution of the loan portfolio per Transaction Type

Cayman 4%

Temp

Temp

0-5 20 - 13

13 - 9

BICBANCO Loans (%)

46 - 57

17 - 16

Regional GDP(%)

Working capital The Bank's major product, it serves to meet companies' cash requirements, with terms of usually less than one year At the end of 2008, it represented 54.5% of the total loan portfolio, standing at R$ 4.395,7 million, an increase of 8.8% in relation to 2007, but down by 18.0% in relation to the R$ 5.359,6 million attained in 3Q08.

54.5% Working capital 24.0% Trade finance 10.8% Overdraft accounts 4.7% Payroll-deductible loans 1.4% Leasing 1.0% Personal loans 3.6% Other credits

Loans by Maturity Date

Overdraft accounts Involve credit linked to companies' call accounts, where the aim is to meet their credit requirements with the speed of response that these clients demand. At the end of 2008, this type of transaction accounted for 10.8% of the total loan portfolio, standing at R$ 873,7 million, a reduction of 13.3% for the year.

Trade finance/Export financing Comprising advances against foreign exchange contracts – ACC and import and export financings, foreign trade financing transactions are strategically important for the Bank. These transactions expand the offer of products, retaining the loyalty of clients operating in foreign trade, while diluting the risks to the Bank's loan portfolio. At the end of the year 2008, these transactions stood at R$ 1.933,2 million, representing 24.0% of the total loan portfolio. The appreciation and subsequent devaluation of the Real against the dollar throughout 2008 makes it impossible to analyze the production of the portfolio in Reais. The portfolio balances in dollars improve the comparison between the periods: 4Q08 – US$ 748,4 million; 3Q08 - US$ 915,9 million and 4Q07 - US$ 911,7 million.

45.7% Up to 3 months 33.1% From 3 months to 1 year 19.6% Over 1 year 1.6% Past due from 15 days onward

51,3 1 22,8 2 25,9 3

51,3 22,8 25,9 94,68

176,4 351,72


Page 44 BICBANCO 2008 Annual Report

03. Economic Scenario and Performance

Payroll-deductible loans At the end of 2008, payroll-deductible loans accounted for 4.7% of the total loan portfolio, standing at R$ 378,9 million, including loans assigned to the FIDC. This type of transaction declined by 0.6% in relation to the balance obtained in 2007. When the amounts assigned to the FIDC are stripped out, the payroll-deductible loan portfolio stood at R$ 149,3 million.

Leasing The performance of leasing transactions is worthy of note. This portfolio stood at R$ 115,8 million, up by 30.7% in the last quarter of the year, and by 504.3% in the last 12 months. BICBANCO reactivated this product during last year, and at the end of the year it already accounted for 1.4% of the total credit portfolio.

Other credits Basically comprised of transactions such as Compror, Resolution 63, onlending from the BNDES, company and farming overdrafts, these credits totaled R$ 286,9 million, equivalent to 3.6% of transactions, a decline of 12.5% in relation to 2007.

Sureties (avais) and letters of guarantee This type of transaction is not included in the credit portfolio. In 2008, liabilities for sureties and guarantees granted totaled R$ 487,1 million, representing growth of 52.0% in relation to 2007.

Securities At the end of 2008, the securities portfolio stood at R$ 369.1 million, comprising 88.0% federal government securities, representing a decrease of 82.5% in the twelve month period. This decrease is associated with the reduction in mandatory deposits and repo transactions, in addition to migration of part of the own securities portfolio to interbank liquidity investments.

Free cash Cash and highly liquid assets comprising the Bank's free cash totaled R$ 1,964.3 million at the end of 2008, against R$ 591.2 million at the end of 2007. This liquidity cushion was built as a prudential measure against strong market volatility.


03. Economic Scenario and Performance

Free cash (R$ millions)

2008

2007

Cash and cash equivalents

200,2

139,9

43.1

Open market investments

1.507,4

9,0

16.645,2

43,6

9,1

378.5

213,1

413,4

(48.4)

Interbank deposit investments, except deposits for swap transaction cover Own portfolio – trading Own portfolio – available for sale Total

% Diff.

19,8

1.964,3

591,2

232.2

Default and provision for losses Default and provision for losses At the close of 2008, provisions to cover doubtful loans stood at R$ 310,9 million, a 68.8% higher balance than that of the third quarter of 2008 and 133.1% higher than that of 2007. In the light of the prospects of a more adverse scenario in 2009, with the possible resurgence of risk and increases in future losses, the Bank opted to considerably increase existing credit provisions well beyond the minimum levels required. The provision made maintains a comfortable coverage ratio of 246.6% of credits past due by 15 days or more, and 82.0% of the D-H portfolio. Loans in arrears as from 15 days totaled R$ 126,1 million, equivalent to 1.6% of the credit portfolio. The D-H portfolio represented 4.7% of total loan transactions. During the fourth quarter of 2008, loan written off totaled R$ 34,9 million, reflecting growth of 44.5% and a drop of 6.4% in relation to 3Q08 and 4Q07, respectively. During the fourth quarter of 2008, R$ 3,4 million in loan were recovered. In the financial year 2008, R$ 99,7 million (2007: R$ 97,1 million) were written off, and R$ 25,9 million (2007: R$ 21,5 million) recovered. Loan Portfolio (R$ millions)

% of Minimun Provisions Required

% of Provisions Actually Constituted

Provisions Actually Constituted (R$ millions)

AA

1.035,9

0.0%

0.0%

A

3.457,5

0.5%

0.5%

17.3

B

2.543,1

1.0%

1.0%

25.4

C

650,6

3.0%

9.0%

58.6

D

159,4

10.0%

29.0%

46.2

E

38,5

30.0%

49.0%

18.9

F

118,8

50.0%

69.0%

82.0

G

8,3

70.0%

99.0%

8.2

H

54,3

100.0%

100.0%

54.3

Risk level

Total Diferença entre (C) e (D)

8.066,4

310.9 101,6

BICBANCO 2008 Annual Report Page 45


Page 46 BICBANCO 2008 Annual Report

196,2 282,6 321,48 338,4 343,44 347,04 360

Total Funding

Funding

(R$ Millions)

27.3%

8.829,3

6.936,3

4.595,9

The Bank prioritizes diversified funding adapting funding it to the profile of the credit portfolio so as to minimize mismatches of terms, currencies and interest rates, in addition to ensuring liquidity. The adaptation of this funding strategy, which the Bank has systematically adopted, has proven to be appropriate for ensuring the liquidity and security of the business as was experienced in the periods of high volatility like the fourth quarter of 2008. The volume of funds raised, which peaked at R$ 10.063,7 million in the third quarter, ended 2008 at R$ 8.829,3 million, a reduction of 12.3% in the last quarter and an increase of 27.3% for the year.

2.924,5

2005

03. Economic Scenario and Performance

2006

2007

2008

Local currency funding Term deposits

164,52 283,68 354,24 360

Term deposits totaled R$ 3.816,3 million at the end of the year, a decrease of 32% in relation to third quarter of 2008 and stable when compared year-on-year. The reduction in term deposits experienced in the fourth quarter of 2008 is directly associated with the systemic lack of liquidity, the immediate consequence of the global financial crisis; more volatile behavior on the part of institutional investors given the adverse scenario; and the fact that a significant portion of term deposit investments 51,3 184,68 underlying credit transactions as guarantees was redeemed when these 22,8 266,76 transactions were liquidated. 360

Origens of Funding (R$ Millions)

25,9

51.3% Funding on the domestic market 22.8% Funding on the international market 25.9% Funding for trade finance

Around R$ 861,9 million, equivalent to 22.6% of total term deposits carry some liquidity clause, usually on the investment anniversary date. The commitments entered into between the Bank and clients were registered with the Custody and Financial Settlement Clearing House (CETIP).

Other deposits

Savings account and interbank deposits totaled R$ 627,8 million in 2008, growth of 37.0% in relation to the volume on the previous quarter, and 8.3%94,68when compared with 2007. 176,4 351,72

Debentures and FIDCs These two transaction types complement and diversify the mix of funds raised on the local market. Debentures totaled R$ 112,1 million, maturing in July of 2010. Funding by means of subscribing senior units of two FIDCs (payroll-deductible loans and Guaranteed Health) totaled R$ 201,1 million. There were no new issuances of these types of transactions in the final quarter of the year.

244,8 312,8 356,72


03. Economic Scenario and Performance

External funding Funding for trade finance transactions totaled R$ 2.283,5 million, an increase of 47.3%. The impact of the Real’s devaluation against the dollar was 31.9% in 2008.

BICBANCO 2008 Annual Report Page 47

Term Deposits by Maturity Date (%)

244,8 312,8 356,72

Fluctuations in the US currency do not create relevant risk for the institution, since the funds raised for trade finance transactions carry a “natural” hedge with the asset transactions. In the case of funds raised abroad by issuing securities, on-lending and subordinated debt, and which serve as funding for longer-maturity credit transactions, the Bank enters into hedge transactions as a means of mitigating currency mismatch risk. Maturity Profile of External Funding

Maturity Date

Amount (US$ MM)

Trade Finance Syndication – tranche A

March 2009

A Loan IIC (IADB)

April 2009

5

B Loan IIC (IADB)

April 2009

18,5

EMTN Program – US$ 1 billion

September 2009

150

Trade Finance Syndication – tranche B

March 2010

EMTN Program – US$ 1 billion

April 2010

B Loan (IADB)

August 2010

80

B2 Loan (IADB)

August 2011

90

IFC Note

July 2012

40

A Loan (IADB)

August 2012

20

65

45 180

Subordinated debt (possible exercise of the call in March 2011) March 2016

Total funding (R$ millions) Local currency funding

4Q08

120

4Q07 % DIFF.

4.533,6

4.301,1

5.4

Deposits

4.211,0

4.255,4

-1.0

- Term deposits

3.610,4

3.676,6

-1.8

600,6

578,8

3.8

- Other deposits (interbank, savings, call and others) Credit Rights Investments Funds – FIDCs

201,1

-

-

Debentures funds

112,1

-

-

9,4

45,7

-79.5

Funding for trade finance

2.283,5

1.549,8

47.3

Funding in foreign currency

2.012,2

1.085,4

85.4

1.010,3

499,2

102.4

Obligations for on-lending from abroad

483,1

214,5

124.9

Subordinated debt

285,7

214,5

33.2

Deposits (term and call)

233,1

156,9

48.6

8.829,3

6.936,3

27.3

Obligations for on-lending from BNDES

Obligations for securities abroad

Total

94,68 176,4 351,72

68.0% Companies 18.9% Individuals 12.2% Institutional Investors 0.9% Financial Institutions


Page 48 BICBANCO 2008 Annual Report

03. Economic Scenario and Performance

The Bank's funding structure carries longer tenors than those of the loan portfolio. Loans when compared with funding, both maturing within 90 days, showed the following composition: Loans – R$ 3.687,5 million / Total funding - R$ 2.535,0 million.

Treasury policy The high volatility of the foreign exchange market has had no significant impact on the institution. All funds raised in foreign currency are hedged, using cash flows that are appropriate for the Reais-denominated asset transactions. As of December 31, 2008, the Bank had no currency mismatches which might have a relevant impact on its results. The term structure of assets and liabilities meant that even with tighter liquidity as from September, cash flow remained balanced, since existing gaps enabled assets to be received before the liabilities were due. Therefore growth in available cash was constant, notwithstanding the higher cost of maintaining it. Forward-looking cash analyses, even in stress scenarios, indicate that liquidity risk will reduce with time. Attention should also be drawn to the conservative policy involving derivatives contracted with clients. These dollar option transactions, which at September 30, 2008 totaled around R$ 460 million (notional amount), were totally hedged. Their short-term nature, plus the quality of the clients who undertook them, enabled us to receive them in full by balance sheet closing date. There were no difficulties in receiving the margin calls on these transactions.

Result of financial intermediation The result of financial intermediation in 2008, taking into account loss provisions, was R$ 762,5 million, up by 36.9% in relation to the R$ 552,4 million recorded in the same period of 2007. This performance arose from a higher average balance in the credit portfolio, in spite of the higher cost of funding and increased expenses for provisions observed in the fourth quarter of the year.


03. Economic Scenario and Performance

(R$ millions) Revenue from financial intermediation Loans Leasing transactions

2008

2007

% DIFF.

2.003,6

1.393,7

43.8

1.691,1

1.054,2

60.4

12,8

2,8

359.5

186,0

249,5

(25.5)

Revenue from foreign exchange

76,3

67,1

13.8

Exchange variation

10,6

3,6

197.6

Revenue from mandatory investments

26,8

16,5

62.1

(1.247,3)

(841,2)

48.3

(746,3)

(576,1)

29.5

(86,5)

(88,4)

(2.1)

Revenue from securities

Expenses with financial intermediation Funding in the market Loans, assignments and on-lending Revenue from Derivative Financial Instruments

(137,2)

(38,0)

261.5

Provision for losses on credits

(277,3)

(138,7)

100.0

756,3

(552,5)

36.9

Result of financial intermediation

BICBANCO 2008 Annual Report Page 49

Net Earnings (R$ Millions)

320,5

Performance

76.2%

In 2008, net income totaled R$ 320,5 million, representing growth of 76.2% in relation to 2007. ROAE for 2008 was 19.7%, 1,0 p.p. above the previous year's return. Net income for the third quarter of the year stood at R$ 20,3 million. During this period, the Bank opted to considerably expand credit loss provisions by allocating an additional R$ 101,6 million (gross) to these provisions. This prudential measure deprived the year 2008 of an important part of its results, while also squeezing performance indicators as a whole. However, it afforded a global volume of provisions which ensured more appropriate coverage ratios for the current scenario, as already mentioned. Thus the institution maintained a sound performance (growth of 76.2% in net income compared to 2007), laying the path to the future with reserves in keeping with its possible requirements.

Shareholder's equity At the close of the financial year, Shareholders' Equity stood at R$1,685.8 million, growth of 7.8% in the year.

Basle Ratio The rules of the Central Bank of Brazil require banks to maintain reference equity equal to or exceeding 11.0% of risk-weighted assets.

181,9

82,1

2005

104,1

2006

2007

2008


Page 50 BICBANCO 2008 Annual Report

Shareholders' equity (R$ Millions)

7.8% 1.563,4

505,4

2005

1.685,1

2007

As from the third quarter of 2008, the calculation of the Basle Ratio began to take into account the Basle II concept, which incorporates new risk factors for the purposes of minimum capital requirements. The Basle Ratio at the end of the year was 19.34%, 3.14 p.p. above that registered in the third quarter. Bearing in mind the risks, the improved index is justified by the reduction in the volume of risk-weighted assets arising from the reduction in the credit portfolio; and by the 1.06 p.p. increase in margins, on account of the reduction in the tax credit weighting factors – from 300% to 100% (Circular n° 3.425/08).

527,3

2006

03. Economic Scenario and Performance

2008

Bearing in mind the reference equity, there was also a positive impact under Tier I, an additional 0.59 p.p. on the margin following removal of the effect of the expanded PDD. The impact of this removal on amounts net of taxes was R$ 60.969 thousand, as established by Central Bank Resolution No 3.674/08 and, under Tier II, exchange variation on subordinated debt expanded the index by 0.52 p.p. The Bank qualifies within the limits established in CMN Resolution No. 2.099/94, as amended by Resolutions Nos 3.444/07 and 3.490/07 and Circular No 3.360/07.

BICBANCO Multiple Bank and Consolidated - 2008 Description Portion of credit risk – (Pepr)

Amount allocated

Risk

1,075,663

-

Portion of exchange risk – (Pcam)

51,343

-

Portion of interest rate risk – (Pjur)

2,206

-

Portion of commodities risk – (Pcom)

-

-

1,321

-

10,714

-

Reference Equity Required (PRE)

1,141,247

-

Reference Equity – Level I and II

2,006,152

-

Risk – 11% under (PR)

-

220,677

Basle Ratio - (% Risk factor/PRE)

-

19.34%

Portion of risk from shares and transactions classified as trading – (Pcas) Portion of operating risk – (Popr)

Basle Movement (%) Initial Basle Ratio Variation in risk-weighted assets Variation in operating risk

4Q08

4Q07

16.2

16.4

2.9

(3.0)

-

-

(0.7)

-

-

0.2

0.4

5.8

Variation in exposure to market risk: - Foreign exchange rate - Interest rate Variation in reference equity: - Tier I - Tier II Final Basle Ratio

0.5

-

19.3

19.4


03. Economic Scenario and Performance

Banco Industrial E Comercial S.A. - Consolidated VALUE ADDED STATEMENT

2ND SEM/08

2008

2007

1. Revenue

1,745,481

2,232,867

822,253

1.1 Financial intermediation

1,952,499

2.523,354

968,575

25,872

53,805

42,869

(202,701)

(277,265)

(138,667)

(30,189)

(67,027)

(50,524)

1,382,047

1,489,804

277,359

1.2 Providing services 1.3 Provision for doubtful debtors - Reversal (constitution) 1.4 Others 2. Expenses with Financial Intermediation 3. Inputs acquired from third parties

52,495

90,639

98,292

3.1 Materials, energy and others

15,088

30,178

27,188

3.2 Third-party services

31,052

55,986

65,728

3.3 Loss/Recovery of assets 4. Gross Value Added (1-2-3) 5. Depreciation, Amortization and Depletion 6. Net Value Added (4-5) produced by the entity 7. Value added received via transfer 7.1 Equity pick-up result 7.2 Others

6,355

4,475

5,376

310,939

652,424

446,602

10,083

18,150

8,398

300,856

634,274

438,204

17

191

70

-

-

-

17

191

70

8. Value added to be distributed (6+7)

300,873

634,465

438,274

9. Distribution of value added

300,873

634,465

438,274

9.1 Personnel

70,480

145,654

115,411

9.1.1 Direct remuneration

59,487

125,185

99,889

9.1.2 Benefits

6,766

12,876

9,777

9.1.3 (Employee Dismissal Fund) F.G.T.S.

4,227

7,593

5,745

9.2 Taxes, fees and contributions 9.2.1 Federal 9.2.2 State

102,440

160,660

135,218

97,729

152,084

130,208

135

429

417

9.2.3 Municipal

4,576

8,147

4,593

9.3 Remuneration of third-party capital

4,031

7,620

5,704

9.3.1 Rent payments

4,031

7,620

5,704

123,922

320,531

181,941

9.4.1 Equity interest

9.4 Remuneration of own capital

47,720

95,440

53,800

9.4.2 Dividends

31,000

31,000

-

9.4.3 Retained earnings

45,202

194,091

128,141

BICBANCO 2008 Annual Report Page 51


Page 52 BICBANCO 2008 Annual Report


04. Client Relations

BICBANCO 2008 Annual Report Page 53

04. Client Relations Management of client relations at all service points is marked by transparency in business, an ethical approach and concern and respect for the client. The Bank offers a wide range of financial products, while providing a range of products and services suitable for the profile of each client in search of quick solutions and qualified financial advice. The Bank is oriented towards creating value for its clients while recognizing the individual role of each one. In this sense, planning, business processes, communication, technology and people are all aligned.

Management of client relations at all service points is marked by transparency in business, an ethical approach and concern and respect for the client

BICBANCO's professional teams are trained and specialized in tailor-made services for the individual requirements of each client in all segments. Professionals who deal with investor clients and qualified investors are certified by the National Association of Investment Banks (ANBID) and by the National Association of Financial Market Institutions (ANDIMA), pursuant to the requirements of the CVM, the rules of Central Bank Resolution 3.158, and the ANBID self-regulatory code. The Bank also operates a policy for disclosing information to the market, as defined by the Securities Exchange Commission – CVM. Compliance with this policy is assured by information security rules and internal controls. The behavior and attitude of its employees are guided by the principles of ethics enshrined in the Code of Ethics. The aim of client service policy is a relationship that fulfills their expectations with a high degree of satisfaction in regard to conduct and efficacy in providing services.

The aim of client service policy is a relationship that fulfills their expectations with a high degree of satisfaction in regard to conduct and efficacy in providing services


Page 54 BICBANCO 2008 Annual Report

04. Client Relations

Communication with the Client In order to ensure constant access to information and the features involving products and services, several communication channels are available to clients

The Bank also enjoys good relations with the press, providing information of public interest regarding the institution and its performance on the economic scenario, in addition to the commitment to transparency, both in its activities and in its relations with clients and other stakeholders. In 2008, relationship marketing actions were the drivers behind events in the hospital, agribusiness, industry, trade and services sectors, contributing to developing new business and regional development by creating income and jobs. The Bank effectively participates in class entities and institutes that promote other sectors, like the Brazilian Institute of Finance Executives – IBEF. In its advertising campaign, the Bank published and celebrated its 70 years of business in the financial market, reiterating its concepts of tradition and modernity. The advertisements were carried in the national press and intended for the institution’s target public. Just like its marketing actions, the Bank's advertisements adhere to the rules established by the National Council for Advertising Self-Regulation. Given the legislation involving service to the public where communication procedures are concerned, BICBANCO adheres to the rules and regulations established by the regulatory bodies, principally in complying with the requirements of the Central Bank of Brazil, Febraban, (the Brazilian Bank Federation), PROCON (the consumer protection agency) and others. Thus it provides its clients with prompt service while analyzing conformity with the rules when developing and updating its communication material.

Branch Network BICBANCO is present in 28 important Brazilian cities in 17 states and the Federal District, through its 38 service outlets. This way, it is able to cover a large part of Brazilian territory, mainly the largest manufacturing and economic centers.


04. Client Relations

Website The website provides complete information on the institutional profile, a description of products and services and the branch network, and permits access to the financial statements on a quarterly basis. In the specific area dealing with Investor Relations, visitors can also enjoy web casts, results releases and technical evaluations and material about the institution's performance.

CSU The Customer Service Unit – CSU is the communication channel to where contacts with the institution are directed by telephone and e-mail, regarding clarification of doubts, or for sending suggestions or registering criticisms and complaints. In 2008, there were 2,686 enquiries, of which 1,893 by telephone and 793 by e-mail. In addition to the Institutional CSU, a payroll-deductible loan CSU was created, an exclusive service intended for clients who utilize payroll-deductible loans, in operation since December of 2007, with the aim of making client service more effective. During 2008 there were 61,321 enquiries, of which 55,649 by telephone, 4,879 personal appearances and 793 e-mail enquiries. Telephone

E-mail

Personal

Total

SAC

1,893

793

0

2,686

SAC CDC

53,756

0

4,879

58,635

Total

55,649

793

4,879

61,321

Ombudsman's Department The Bank also places at its clients' disposal an Ombudsman's Department, which deals independently with matters which clients or interested parties believe have not been satisfactorily resolved. Although the Bank has no specific study into the degree of its clients' satisfaction, all complaints received were monitored and satisfactorily resolved in 2008. In the same period, the Ombudsman's Department detected no complaints regarding loss or violation of client data.

BICBANCO 2008 Annual Report Page 55


Page 56 BICBANCO 2008 Annual Report


05. Intangible Assets

BICBANCO 2008 Annual Report Page 57

05. Intangible Assets BICBANCO recognizes the value of its intangible assets, by investing in staff development and advanced technology. The aim is to maintain the quality of the work environment, constantly improving methods and processes, expanding and retaining knowledge and strengthening its option for a management model based on preserving the institutional image as the basis for business sustainability. The priorities within the institution's strategic planning are: developing the knowledge of its teams of executives and employees, whether through training or updating; investment in infrastructure, processes and technology; and the directives for maintaining its image and reputation based on corporate ethics. The value of the BICBANCO brand and the trust inspired by its image of tradition, modernism and dynamism demands unequalled treatment based on criteria and care, by applying good corporate governance at all levels of the organization. In this organization we look on building intangible equity as a perennial activity. The efforts to maintain management strategy focused on promoting intellectual capital and learning within the organization has proven to be fundamental for facing up to the institution's own challenges and those deriving from the financial system and from the Brazilian and global economy.

BICBANCO recognizes the value of its intangible assets, by investing in staff development and advanced technology


Page 58 BICBANCO 2008 Annual Report

05. Intangible Assets

Human Resources Our human resources management policy aims to retain talent while maintaining a healthy work environment, with total respect for our professionals, fairness in decisions and in matters of remuneration and in how we value diversity. The organization's headcount closed the year 2008 at 814 employees hired under the Brazilian labor law system (CLT), all of them under contracts of indeterminate duration. This is practically the same level as 2007, although the figure fluctuated somewhat in the interim period, on account of adverse market conditions. The 311 women represented 38.2% of the Bank's headcount at the end of 2008, an increase of 5.8% in relation to 2007, although the headcount as a whole has remained virtually unchanged. There was also a 27.0% increase in the number of women in leadership and senior management positions. In relation to colored people, the total number of employees at the end of 2008 was 76 or 9.3% of headcount and 5.5% of these in leadership positions. Professionals of all races – whites, Afro-Brazilian, mulattos and Asians – are present at all hierarchical levels. The Bank puts priority on respect for differences and requires the same from its employees in regard to the internal and external public, whatever the nature of that difference might be.


05. Intangible Assets

Training and Development In order to improve and raise the value of its staff, the Bank's training programs enhance the abilities of its employees to carry out their functions in the productive and efficacious manner the institution demands. BICBANCO encourages and supports staff development, since it believes that educational qualification leads to professional improvement. A similar action in the same vein involves scholarships that vary from 50% to 100% of the value of the course. The purpose is to increase the number of employees with higher education and, thereafter, to ensure that these professionals become specialists through postgraduate, MBA and Masters Degree courses, including English language studies. Currently 61% of employees have a higher education, of whom 106 at postgraduate, masters or doctorate level. In 2008, the bank provided scholarships, investing in employee education, totaling R$ 432,456.52. The Bank holds courses, workshops and lectures on much wider-ranging themes involving the different departments and which affect the entire organization, like information security, prevention of money laundering, information technology and ethics, among others. It also offers courses that provide certification for its professionals in specific areas, whether mandatory or not. 100% of the professionals who deal with investor clients have financial market certification from ANBID.

BICBANCO 2008 Annual Report Page 59


Page 60 BICBANCO 2008 Annual Report

05. Intangible Assets

Diversity Number of Employees By Geographic Region North:

By Race

By Age Group (years)

By Time of Service (years)

1

Asians:

16

16 to 24:

56

Up to 5:

Northeast:

159

Whites:

Mid-West:

51

Southeast:

531

South:

480

722

25 to 35:

236

6 to 10:

70

Afro-Brazilians: 11

36 to 45:

306

11 to 20:

207

Mulattos:

46 to 55:

190

Over 20:

54

Over 56:

26

65

72

Our 814 employees contribute a variety of personal and professional experiences. The indicators reflect a company in the process of renewal, but at the same time one which recognizes the value of its employees’ experience.

Freedom of union association In order to ensure union freedom within the organization, the Bank endorses the provisions of the Collective Bargaining Agreement contemplated in the following clauses: (32) Union leaders are guaranteed remuneration and are free to attend; (33) Free access to the Bank's premises for union representatives, including notification of matters of interest to employees; and (34) availability for unionization campaigns. Currently 100% of the employees are covered by collective bargaining agreements.

Benefits As a means of motivating and retaining employees, BICBANCO offers the following benefits, both for those employees in full-time and parttime employment: Optional Health Plan; Meals Allowance; Food Basket Allowance; optional Dental Plan; Daycare/Babysitter Allowance; Allowance for Disabled/Invalid Children; Funeral Allowance; Nighttime Travelling Allowance; Transport Allowance; Supplementary Social Security Illness Allowance and Illness Allowance; Group Life Insurance; Life and Invalidity Insurance for Cashiers; Executive Life Insurance; Education Insurance; Nighttime Working Supplement; Clearing House Operator Bonus; Maternity Leave; and Legal Absences. In the case of employees who leave, the Bank takes into account, for compensation purposes, the time of service and also assists them with money intended as "Professional Re-training Allowance".


05. Intangible Assets

Inclusion of Persons with Disabilities For more than three years, 28 people have been part of the Program for Inclusion of Persons with Disabilities, representing 3.4% of the total employees. This program aims to provide all employees with equal opportunities and a healthy learning experience.

Young Apprentice Program The aim of this program is the inclusion of adolescents and young adults between the ages of 14 and 24 in the job market. The program, which benefits 17 apprentices, is being developed in partnership with the ESPRO – the Society for Professionalization through Social Learning – with a weekly workload of 6 hours of theoretical study and 24 hours onthe-job learning, and has a duration of two years.

Internship Program The Internship Program consists of a set of activities involving social, professional and cultural study, through which the student participates in real life and work situations, under the responsibility and coordination of the teaching institution. The program is dedicated to the integration of students at higher education level, preparing these young people for their first job by supplementing what they have learned through practical experience. At the end of 2008, the program had 23 interns.

BICBANCO 2008 Annual Report Page 61


Page 62 BICBANCO 2008 Annual Report

05. Intangible Assets

Corporate Ethics BICBANCO reiterates its intention to conduct its business in a manner that respects the highest standards of integrity and the principles of ethics. These principles have been redefined in the 2nd Edition of its Code of Ethics, published in 2007, following reformulation by a group of employee representatives. The ethics references described in the new code are benchmarks for the behavior of all BICBANCO employees in regard to the most diverse interested publics, society and the environment.

The ethics principles of the new Code: · Consideration for others – which means integrity in personal behavior, non discrimination against people, mutual respect and proper treatment between employees and other interested publics; · Commitment to transparency – enhances the visibility of the criteria underlying decisions and actions, so that agreements are entered into in good faith and their terms are complied with; · Respect for laws and regulations – maintaining proper alignment with Brazilian legislation and internal rules, so as to preserve the appropriateness of the transactions and accountability; · Corporate Social Responsibility – underlines strategies and policies by strengthening the entities comprising the financial industry and by adding value for the interested publics.

Communication with the Committee Besides the institutional means of communication, BICBANCO uses another important channel by which everyone can give their opinion, relate facts or forward pertinent demands to the Ethics Committee. The address for communication of this nature is: comite.etica@bicbanco.com.br.


05. Intangible Assets

Brand and Image Throughout its 70 years, BICBANCO has strengthened its image of tradition and modernity with the aim of consolidating its position of credibility in line with the market and current times. In this context, it draws up policies and directives in which prevalence is given to the organization’s image, supported by the commitment to transparency with all publics. The brand consolidation plan comprises: development of advertising campaigns, internal communication, investment in media, press relations and, above all, direct involvement in the market and with clients.

BICBANCO 2008 Annual Report Page 63


Page 64 BICBANCO 2008 Annual Report

05. Intangible Assets

Institutional Participations BICBANCO participates in several entities, committees and discussions, disseminating its values and influencing decisions. Within Febraban, it sits on the committees and sub-committees, being represented by specialists in human resources, diversity, credit, risk and sustainability, among others. Its representatives are also active as officers of the IBEF (the Brazilian Institute of Finance Executives) in Campinas and BrasĂ­lia. The Vice President for Operations at BICBANCO, Milto Bardini, is part of the Executive Board and the Consulting Board of the ABBC - the Brazilian Association of Commercial Banks for the 2008/2010 term of office, contributing to the adoption of strategies and the sustainability of small and mid-size banks.

Information Technology Technological upgrading is part of full-time strategic and tactical planning at BICBANCO, in addition to the hiring and training people to operate computerized systems and information technology. The Bank intends to avail itself of leading-edge technology in its activities within the banking industry, in line with the quality of automated systems which the national financial system demands. Investments in technology are directly related to security, quality and business results. This concept is reflected in a modern communications network, including transmission of data, voice and video by means of network convergence. This system connects the branches to the main data processing site located at the Bank's head office and to the IBM data processing contingency site which functions as a backup site.

Contingency Plans The Bank's contingency plans are constantly perfected and are an integral part of the Business Continuity Plan. Replicating on-line data ensures the integrity of the information and the systems. In support of the plans, each critical tool is periodically tested and audited, and where risks of interruption are examined, new contingency plans are drawn up.


05. Intangible Assets

Mobility Project The solution for optimizing the time of the professionals on our commercial team, in order to improve their efficiency ratios, lies in mobility. This solution enables commercial area executives to operate securely and in real time, without necessarily having to be in the work environment. The use of mobile systems has a direct impact on how business is done, because decisions are taken quickly. In Latin America, the Bank is a pioneer in the use of mobile phones for taking decisions and closing deals. The mobile system is recognized by the technology industry as a sustainability policy because it is ecologically efficient, in addition to being the benchmark in technology applied to business management for a variety of sectors of the economy.

Governance in IT The importance of innovation in information technology development has made it necessary to align IT management with governance practices. The work methodology prioritizes transparency and the creation of value, which harmonize technology processes with closing business. This leads to investments in technology infrastructure and the development of the appropriate tools for controlling the operations and for security and compliance with regulations, in addition to supporting the institutional image in the eyes of our most diverse interested publics.

BICBANCO 2008 Annual Report Page 65


Page 66 BICBANCO 2008 Annual Report


06. Sustainability

BICBANCO 2008 Annual Report Page 67

As governance practices have evolved, so the Bank has advanced in its business sustainability process, in line with growing concern on the part of the international financial community regarding the environment. Aware of its role in building a more harmonious world for present and future generations, BICBANCO seeks to operate through alliances and to foster sustainable development for society, while at the same time maximizing shareholder return, ensuring consistent and sustainable growth and adding value to the community and the environment in which the Bank finds itself.

BICBANCO seeks to maximize shareholder return, while at the same time ensuring consistent and sustainable growth and adding value to the community and the environment in which the Bank finds itself

06. Sustainability

Spanish consulting company, Management & Excellence recognized BICBANCO in its study as the most sustainable (mid-cap) bank in Latin America. The results of the study were published in the April 2008 edition of Latin Finance magazine. In order to benchmark all its sustainability initiatives, in 2008 the Bank created the "Blue Movement" trademark. Water symbolizes life on the planet and is associated with environmental conservation. For BICBANCO, adopting corporate governance practices enables us to enhance our relationship with our strategic publics, while consolidating its perennial nature and creating value. Furthermore, it enables shareholders to control the institution and effectively monitor what the executive management is doing.


Page 68 BICBANCO 2008 Annual Report

06. Sustainability

Corporate Governance Rating Besides recognizing BICBANCO as the most sustainable mid-size bank in Latin America, in July 2008, the consulting company Management & Excellence S.A. awarded the Bank an overall AAA rating in its evaluation of Corporate Governance, covering the following points: Ethics, corporate social responsibility, sustainability, governance and transparency.

Internal Public The Bank recognizes the social and cultural diversity of its employees, and provides a work environment which affords professional opportunities while fostering the institution’s own success through the successful activities of its internal audience. Relations with employees are based on the tripod of training, profile and quality of life, while respecting the directives of our updated institutional code of ethics.

Quality of life in the work place In addition to the benefits granted, BICBANCO has established internal policies involving respect for staff, the functional ability of each employee, prohibition of excessive working hours and proper respect for vacation entitlement. The Bank also maintains enhancement programs, in addition to a salary policy compatible with the market, while fostering healthy practices through permanent campaigns for quality of life and the prevention of illness, for example: vaccination campaigns, care for pregnant mothers, actions for preventing repetitive strain injuries – RSI, work-related musculoskeletal disorders and workplace exercises as a means of avoiding work-related illnesses. The Internal Accident Prevention Committee (CIPA) does campaigns on World AIDS Day in addition to lectures on stress, diabetes, heart disease and others.

Assistance Programs Beneficiaries of the Programs Assistance Programs

Employees

Family and Members of Relatives the Community

Education/Training Program

Yes

-

-

Counseling

Yes

-

-

Risk Control/Prevention

Yes

-

-

Treatment

Yes

Yes

-


06. Sustainability

Profit sharing The Bank has a profit-sharing program intended for its employees and which exceeds its union obligations by recognizing the participation of its employees in the positive results of the institution.

Prevention of illegal acts In line with global actions against money laundering and with current regulations, a manual was prepared entitled "O meu Banco Pratica Atitudes e Procedimentos na Prevenção à Lavagem de Dinheiro" (My Bank Adopts Attitudes and Procedures for Preventing Money Laundering), which presents information for a better understanding of the subject, in addition to a practical guide to attitudes, and is available to all employees via the Intranet. BICBANCO prevents and combats illegal acts, such as: money laundering, illegal currency transfers and suspicions of corruption as part of its commitment and institutional responsibility to society. To this end, it provided training for 100% of new employees in 2008. It is worth pointing out that 100% of the other employees were trained over recent years and they are regularly updated by means of internal campaigns. The Bank has registered no incidents where employees have been dismissed or agreements with partners canceled on account of corruption, and there were no legal actions against the organization for corrupt behavior in 2009.

BICBANCO 2008 Annual Report Page 69


Page 70 BICBANCO 2008 Annual Report

06. Sustainability

The Environment Concerned with the environmental question, BICBANCO has been improving its controls, year after year, thereby consequently increasing its share of the contribution to environmental conservation. Stock replacement control is based on a system that manages the use of material by means of consumption track record. Orders are placed via monthly requisitions which are validated and fulfilled. The system later issues reports that enable consumption management, thus encouraging rationalization by means of reduction targets and monitoring any wastage. In line with best market practices, the Bank has incorporated the use of recycled paper, with measurement controls on the volume used. In 2008, 40,100 kilos were used, of which 39,000 kilos originated from recycling, representing 97% of the organization’s total consumption. BICBANCO does not provide products or services that consume energy. Under an agreement with the Mayor's Office of the city of Uberlândia, State of Minas Gerais, under the "Adote uma Praça ou Canteiro Central" (Adopt a Square or Central Reservation) project, the Bank was responsible for maintenance and conservation of Jair Moreira Rodrigues Square, which intersects with Av. Rondon Pacheco in the Lidice district of Uberlandia. BICBANCO had the opportunity to invest in infrastructure for the benefit of the community of the square, intended for leisure and for watching nature. In 2008, a total of R$ 3.000,00 was invested over six different months.


06. Sustainability

BICBANCO 2008 Annual Report Page 71

International commitments At the end of 2008, financings and credit facilities with socio-environmental caveats and monitoring totaled approximately R$ 547,2 million, contracted with the Interamerican Development Bank (IDB), the International Finance Corporation (IFC) and the Inter-American Investments Corporation (IIC), serving over one hundred clients selected under the strict socioenvironmental criteria of these multilateral financing agencies. These facilities are applied in a balanced manner in different segments of the economy, benefiting mid-size and large companies.

Responsible credit BICBANCO has created strategic partnerships in formulating tools used in evaluating the social and environmental variables within the process of granting credit. To that end, one of the most important actions was the partnership created at the end of 2006 with the Interamerican Development Bank (IBD), ensuring technical advisory on implementing credit analysis criteria which take into account social and environmental variables. Development of the Environmental Management System (SGA), which will enhance the Bank's credit risk management and reputation, is another action in this virtuous circle. This system will enable us to get to know our clients better, their actions and attitudes in relation to the environment and society, in order to meet their expectations for financing and investment.

BICBANCO has created strategic partnerships in formulating tools used in evaluation the social and environmental variables within the process of granting credit


Page 72 BICBANCO 2008 Annual Report


07. Social and Cultural Actions

07. Social and Cultural Actions BICBANCO invests in social and cultural development with the aim of contributing to transforming the surrounding communities, improving people's quality of life and access to culture and education, in favor of a fairer and more participative society. The evaluation of social and cultural action projects seeks to understand the requirements of each community while verifying whether they adhere to the areas to which the Bank has given priority. At the end of 2008, R$ 3,9 million had been invested in 18 projects, of which R$ 2,8 million in projects supported by the Rouanet (Cultural Incentive) Law; R$ 580,000 to funds controlled by municipal, state and national Councils for the Rights of Children and Adolescents; R$ 300,000 in projects under the Sports Incentive Law; and R$ 220,000 in other fiscal incentives projects. An additional R$ 1,3 million was invested in non incentive law-supported projects, with the aim of social and economic development and other initiatives intended for cultural exchange and promotion of the arts.

BICBANCO 2008 Annual Report Page 73


Page 74 BICBANCO 2008 Annual Report

07. Social and Cultural Actions

Rehearsing for a better nation Since 2006, the Bank has provided support for cultural actions to create a theater-going public using funds under the Rouanet Law in partnership with the Municipal Department of Education, artists and educators. This is offered voluntarily to children and young people registered in public schools on the periphery of São Paulo. The action had already involved approximately 6,000 children and150 educators by the end of 2008. Concepts that focus on discipline are taught in the workshops, so that the children can develop individually and collectively as citizens better prepared to carry out their role in a democratic society.

Centenary of the Japanese immigration in Brazil To celebrate the centenary of the Japanese immigration in Brazil, BICBANCO sponsored the Expo IMIN 100 exhibition in Londrina. The homage paid to the Japanese community resulted in an intense cultural program of shows intended for valuing the tradition, customs, legacy and contribution of the Japanese people to Brazil. Involving more than 100 cultural entities and associations from the local Japanese community, the event encouraged the exchange of experiences, knowledge and ethnic groups.

Solidarity as the conductor of peace Organized by the non governmental organization, Estação da Luz (the Station of Light), the VI Exhibition of Transcendental Theater chose peace as the conductor, while valuing culture for social purposes. In the capital of the State of Ceará, the public were treated to theatrical shows and open presentations in neighborhoods and municipalities in the interior of the state, in addition to art exhibitions, musical shows and theater workshops. The financial revenue, also transformed into non perishable foodstuffs, was handed over to the following charity institutions in Ceará: Agência da Boa Notícia, Movimento Internacional pela Vida e Não-Violência (Movida) and the Aracê Institute, Associação de Caridade Samaritanos de Jesus (the Samaritan Charity Association of Jesus), the Lino Allegri Community School and the Socrelp, a local garbage recycling community group.

Photography transforming daily life in art BICBANCO sponsored the launch of the book "Possível Paisagem" by photographer Salete Goldfinger. The book contains urban landscapes from the different continents of Latin America, Europe, the Middle and the Far East, against the backdrop of the large metropolises and homogenous scenarios fragmented by day-to-day scenes in movement.


07. Social and Cultural Actions

BICBANCO 2008 Annual Report Page 75

Democratizing culture through the Brazil-Cuba exchange

A rare meeting of culture in popular music Sponsorship of the nationwide tour by singers Maria Beth창nia and Omara Portuondo led to the presentation of 22 shows across Brazil. The artistes came together to produce an original interpretation of a musical, with individual solos in Portuguese and Spanish, recognizing the value and democratic nature of popular culture by means of exchanges between Brazil and Cuba.

Christmas Solidarity In 2008, the staff of the Central Administration and the branches in S찾o Paulo donated 184 toys, which were delivered to the following charity institutions: Wantuil de Freitas de Deus Cristo e Caridade Spiritual Center; Jesus Amor e Caridade Home- Larzinho and the Maria Flos Carmelli Association. The staff of BICBANCO has repeated this voluntary gesture of solidarity for the last 10 years.


Page 76 BICBANCO 2008 Annual Report

07. Social and Cultural Actions

Building the Future by Training Young Sporting Talent BICBANCO supports the Sports Association for the Disabled – ADD in training the first Brazilian juvenile wheelchair basketball team. This type of sport adapted from the base provides athletes and their family members with access to programs of continuous evaluation, psychological, dietary, social and educational monitoring, in addition to guidance and assistance in professional training. Sponsored since 2006, the team of children and adolescents has already shown its technical and tactical abilities to compete in the third division of the São Paulo Championship.

In the cinema, the example of life dedicated to humanitarian causes With the support of BICBANCO, the major feature film "Bezerra de Menezes - O Diário de um Espírito" (Bezerra de Menezes – The Diary of a Spirit) was shown at over 65 movie theaters in different Brazilian cities. Based on actual facts, the film tells the story of a doctor who dedicated his life to serving his fellowmen and the nation as a devotee of humanitarian causes.


07. Social and Cultural Actions

A partnership for education Under the partnership entered into in 2007 between the Ayrton Senna Institute and BICBANCO, programs for encouraging education in the State of Mato Grosso, like "Acelera Brasil" (Step on the Gas, Brazil) and "Se Liga" (Pay Attention), addressed the lag in elementary education within the public school network in the state by encouraging learning and eradicating repetition and drop-out and ensuring that students are successful in their school career. Students taking part in the Acelera Brasil program read an average of 40 books a year. The average approval rate in those states where the program has been adopted stood at 99.5%. These educational programs are helping to change the reality of education in Brazil, giving thousands of students the opportunity to experience what is theirs by right: to study and move to the next grade.

Projects 18 “Nordeste, Cangaço e Cinema” Festival Cine Ceará th

The book “Ciclos Econômicos do Ceará” Maria Betânia and Omara Portouondo Show The movie “Bezerra de Menezes – O Diário de um Espírito IMIN 100 – The Centenary of Japanese Immigration Exhibition

Amount in Reais 150,000.00 20,000.00 1,158,000.00 60,000.00 100,000.00

Book “Possível Passagem” - Complement

40,000.00

“Meninos do Morumbi” Association

50,000.00

“Ensaiando um País Melhor” Cultural Action “Na Casa da Ruth” Cultural Action The play “Dá Pra Baixar o Som por Favor?” State of Ceará Audiovisual Cultural Production “Brasilidade” (Brazilianess)

200,000.00 50,000.00 800,000.00 78,175.85 50,000.00

Círculo de Esporte e Cidadania (Sport and Citizenship Circle)

300,000.00

Donation to COMDICA Fortaleza

180,000.00

Donation to Bento Quirino Daycare Center

80,000.00

Non directed donation – São Paulo City Hall

400,000.00

Donation to “Casa Hope”

100,000.00

Donation to the Ingo Hoffman Institute TOTAL

40,000.00 3,856,175.85

BICBANCO 2008 Annual Report Page 77


Page 78 BICBANCO 2008 Annual Report


08. Awards

08. Awards The awards obtained by BICBANCO in 2008 came from respectable institutions in the Brazilian and international markets that recognized the excellence in the Bank's policies on sustainability, Human Resources, the quality of the work environment and the projects it supported.

Sustainability The Spanish consulting company, Management & Excellence rated BICBANCO the Most Sustainable Mid-Cap Bank in Latin America in 2008. The consulting company’s annual ranking evaluated 330 corporate practices in the fields of sustainability, corporate governance, ethics, corporate social responsibility and transparency internationally accepted by major entities of the financial market and stock exchanges. In 2007, the Bank had already been considered the Most Sustainable Mid-Size Bank in Brazil and the second in Latin America in its segment. Management & Excellence, headquartered in Madrid, is a company that specializes in producing studies and ratings on sustainability. The results of the study were published in the April Edition of Latin Finance magazine, specializing in capital markets and banks in Latin America.

Among the 150 Best Companies to Work For in Brazil For the second year running, BICBANCO featured among the best companies to work for in Brazil. Recognition was awarded by the Você S/A – Exame Guide following disclosure of the results of the analysis undertaken by the USP-FIA. This publication, produced in Brazil since 1996, is considered the country's largest organizational climate study, and is a highlight in the corporate world for bringing employee recognition. The score of 81,5 in the work environment quality index (IQAT) was ascertained by the employees themselves in the items: "they identify with the company; they are satisfied and motivated; they believe they can progress and they approve of their bosses". The final score for the Happiness at Work Index (IFT) was 76,4. The Guide indicated the Bank as a place where people can learn and progress in their career with quality of life.

BICBANCO 2008 Annual Report Page 79


Page 80 BICBANCO 2008 Annual Report

08. Awards

The best middle market segment bank The "Gazeta Mercantil" newspaper presented the Bank with the award for the best middle market segment bank, for its performance and focus on granting credit. The ranking of the 15 most notable institutions in the financial industry in 2008, the basis for choosing the winners, was drawn up in partnership with risk rating agency Austin Rating.

The most active Bank in Latin America in the GTFP foreign trade program The "Recognition Award" as the Most Active Bank in Latin America within the Global Trade Finance Program (GTFP) was granted by the IFC – International Finance Corporation, a member of the World Bank. BICBANCO was the first Brazilian bank to sign up for and avail itself of the IFC Trade Finance program in 2006. Since then, it has already financed USD 400 million in foreign trade, availing itself of IFC guarantees. The real benefit of the program is the stable support these facilities provide, even in times of crisis, for the foreign trade of different countries.


08. Awards

2008 ADVB Top Social Award For the second year running, BICBANCO was presented with the Top Social award granted by the Association of Sales and Marketing Managers in Brazil – ADVB, for the project entitled "Ensaiando um País Melhor" (Rehearsing for a Better Nation) – unique work being undertaken on the periphery of São Paulo over the last two years with the Bank's support through the Rouanet cultural incentive law. The previous year, the award had been granted for the project entitled in Portuguese "Só existe um bem se esse puder ser chamado de bem comum" (Only one good exists, if it can be called the common good).

Ratings The corporate ratings indicate independent opinions in accordance with transparent and objective criteria on the ability of companies to pay their entire debt within the stipulated terms. These evaluations are free of current or potential conflicts of interest between the rating agency and the institutions evaluated. Agencies

Rating/ Index

Scope/Classification

Data de Date of Balance sheet Publicação Analisado do Rating

Global Scale - Foreign currency deposits - Local currency deposits National Scale - Long-term deposits - Short-term deposits Outlook

06/30/2008 08/22/2008

Standard & Poor's

BBB brAStable

Global scale in Foreign Currency - Long-term - Short-term National Scale Outlook

12/31/2007 04/22/2008

Fitch Ratings

A- (bra) F2 (bra) Stable

National Scale - Long-term - Short-term Outlook

06/30/2008 10/28/2008

Austin Rating A+

Long-Term National Scale

06/30/2008 08/27/2008

LF Rating

A+

Local Currency

09/30/2008 12/03/2008

RISK-bank

10,20

Low medium-term risk (-)

09/30/2008

Ba2 Ba1 Moody's

Aa2.br BR-1 Stable

Jan/2009

BICBANCO 2008 Annual Report Page 81


09. Exhibits

Annual Social Balance Sheet / 2008 1 - Calculation Base

2008 Amount (Reais 000) 2007 Amount (Reais 000)

Net revenue (RL)

756,285

552,549

Operating result (RO)

396,863

273,101

Gross payroll (FPB)

137,688

110,680

2 - Internal Social Indicators Food vouchers Mandatory social charges Private pension scheme Health Health and safety at work Education Culture Professional training and development Daycare centers of daycare allowance Profit sharing Others Total - Internal social indicators 3 - External Social Indicators Education Culture Health and sanitation Sport Hunger and food security campaign Others

Amount (thousands)

% on FPB

% on RL

Amount (thousands)

% on FPB

% on RL

6,762

4.91%

0.89%

5,286

4.78%

0.96%

29,063

21.11%

3.84%

22,312

20.16%

0.04%

0

0.00%

0.00%

0

0.00%

0.00%

4,190

3.04%

0.55%

2,828

2.56%

0.51%

0

0.00%

0.00%

0

0.00%

0.00%

432

0.31%

0.06%

348

0.31%

0.06%

0

0.00%

0.00%

0

0.00%

0.00%

503

0.37%

0.07%

462

0.42%

0.08%

277

0.20%

0.04%

224

0.20%

0.04%

20,979

15.24%

2.77%

21,550

19.47%

3.90%

712

0.52%

0.09%

857

0.77%

0.16%

62,918

45.70%

8.32%

53,867

48.67%

9.75%

Amount (thousands)

% on RO

% on RL

Amount (thousands)

% on RO

% on RL

300

0.08%

0.04%

0

0.00%

0.00%

2,901

0.73%

0.38%

1,441

0.53%

0.26%

0

0.00%

0.00%

0

0.00%

0.00%

1,017

0.26%

0.13%

671

0.25%

0.12%

0

0.00%

0.00%

0

0.00%

0.00%

920

0.23%

0.12%

410

0.15%

0.07%

Total contributions to society

5,138

1.29%

0.68%

2,522

0.92%

0.46%

Taxes (excluding social charges)

139,189

35.07%

18.40%

117,704

42.44%

20.98%

149,465

37.66%

19.76%

120,226

44.29%

21.89%

Amount (thousands)

% on RO

% on RL

Amount (thousands)

% on RO

% on RL

Company operations/production-related investments

0

0.00%

0.00%

0

0.00%

0.00%

Investments in external programs and/or projects

0

0.00%

0.00%

0

0.00%

0.00%

Total investments in the environment

0

0.00%

0.00%

0

0.00%

0.00%

Total - External social indicators 4 - Environmental Indicators

Regarding establishment of "annual targets" for minimizing waste, general consumption in production/operating and for increasing efficiency in the use of natural resources, the company.

(x) has no targets ( ) fulfills 0 to 50% ( ) fulfills 50 to 75% ( ) fulfills 75 to 100%

(x) has no targets ( ) fulfills 0 to 50% ( ) fulfills 50 to 75% ( ) fulfills 75 to 100%


5 - Staff Complement Indicators

2008

2007

Nr of employees at the end of the period

814

823

Nr of admissions during the period

195

248

Nr of outsourced employees

136

143

23

21

216

210

Nr of interns Nr of employees over 45 years of age Nr of women working at the company % of departmental head positions occupied by women Nr of Afro-Brazilians working at the company % of departmental head positions occupied by Afro-Brazilians Nr of persons with disabilities or special requirements

311

294

27.04%

22.93%

76

83

5.54%

8.29%

28

27

6 - Relevant information regarding the exercice

2008

2009 Targets

Ratio of the highest to the lowest remuneration at the company

28,59

0

1

0

Total number of work accidents The social and environmental programs developed by the company were defined by:

( ) senior management

(x) senior management and line managers

( ) all employees

( ) senior management

(x) senior management and line managers

( ) all employees

The standards of safety and salubriousness in the work environment were defined by:

(x) senior management and line managers

( ) all employees

(x) all of these + Accident Prevention Committee

(x) senior management and line managers

( ) all employees

(x) all of these + Accident Prevention Committee

Regarding freedom of union association, right to collective negotiation and internal worker representation, the company:

( ) does not get involved

(x) follows ILO rules

( ) encourages and follows the ILO

( ) does not get involved

(x) will follow ILO rules

( ) will encourage and follow the ILO

The private pension plan includes:

( ) senior management

( ) senior management and line managers

( ) all employees

( ) senior management

(x) senior management and line managers

( ) all employees

Profit sharing includes:

( ) senior management

( ) senior management and line managers

(x) all employees

( ) senior management

( ) senior management and line managers

(x) all employees

When choosing supplies, the same standards of ethics and of social and environmental responsibility adopted by the company:

(x) are not taken into account

( ) are suggested

( ) are required

( ) will not be considered

(x) will be suggested

( ) will be required

Regarding employee participation in volunteer work programs, the company:

( ) does not get involved

(x) supports

( ) organizes and encourages

( ) will not get involved

(x) will support

( ) will organize and encourage

Total number of complaints and criticisms by consumers:

at the company 849

with Consumers Assoc. 130

“In court 500”

at the company ____________

with the Consumers Assoc. __________

in court ____________

with the Consumers Assoc. 100%

“in court 17%”

at the company ____________%

with the Consumers Assoc. ________%

in court ____________%

% of complaints and criticisms heard at the company or resolved: 100% Total value added to be distributed (in thousands of R$):

In 2008: 634,465

In 2007: 438,274

Distribution of value added (DVA):

25.32% 22.96% 19.93% 1.20% 30.59%

30.85% Government 26.33% Employees 12.27% Shareholders 1.30% Third parties 29.23% Retained

Government Employees Shareholders Third parties Retained


Page 84 BICBANCO 2008 Annual Report

Profile indicators Ind.

Group/Description

*

Page

1. Strategy and Analysis 1.1

Statement by position holder with highest power of decision in the organization regarding the relevance of sustainability for the organization and its strategy.

06 and 07

2. Organizational Profile 2.1

Organization Name.

03

2.2

Principal brands, products and/or services.

42, 43 e 44

2.3

Operational structure of the organization, including the main divisions, operating units, subsidiaries and joint ventures.

03 and 54

2.4

Location of organization's principal place of business

26 and 27

2.5

Number of countries in which the organization operates and the name of the countries in which its main operations are located or which are especially relevant for sustainability topics covered by the report.

04

2.6

Type and legal nature of the property.

04

2.7

Markets served (including geographical breakdown, industries served and types of clients/beneficiaries).

04

2.8

Size of the organization.

46, 49 and 82

2.9

Major changes during the period covered by the report involving size, structure or shareholder participation.

03

2.10

Awards received in the period covered by the report.

67, 79 to 81

3. Parameters for the Report 3.1

Period covered by the report (like accounting/civil year) for the information presented.

03

3.2

Date of the most recent previous report (if applicable).

03

3.3

Report issuance cycle (annual, every two years, etc).

03

3.4

Data for contact in case of questions regarding the report or its contents.

90

3.5

Process for defining the content of the report, including: a) determining relevance; b) prioritizing topics within the report; c) identifying those stakeholders the organization expects to make use of the report.

03

3.6

Limit of the report (like countries, divisions, subsidiaries, leased premises, joint ventures, suppliers).

03

3.7

Declaration about any specific limitations regarding the scope or limit of the report.

03

3.8

Basis for preparing the report in regard to joint ventures, subsidiaries, leased premises, outsourced transactions and other organizations which might have a significant effect on the comparison between periods and/or between organizations.

03

3.10

Explanation of the consequences of any reformulations of the information provided in previous reports and the reasons for these reformulations (like mergers and acquisitions, changes in the period or base year, in the nature of the business and methods of measurement).

03

3.11

Significant changes in comparison with previous years in regard to the scope, limit or measurement methods applied in the report.

03

3.12

Table identifying the location of the information in the report.

84 to 87


BICBANCO 2008 Annual Report Page 85

Ind.

Group/Description

*

Page

4. Governance, Commitment and Engagement 4.1

Governance structure of the organization, including committees under the highest governance body responsible for specific tasks, such as establishing strategy or supervising the organization.

12 to 15

4.2

Indication where the president of the highest governing body is also an executive officer (and, as the case may be, his functions within the management of the organization and the reasons for this composition.)

13 and 14

4.3

In the case of organizations with a unitary administrative structure, a declaration of the number of independent members or non executives on the highest governance body.

13 and 14

4.4

Mechanisms by which shareholders and employees make recommendations or provide guidance to the highest governance body.

11, 25 to 27

4.14

List of the stakeholder groups engaged by the organization.

12 and 13

4.15

Basis for identifying and selecting stakeholders with whom it engages.

12

* Level of Adherence Fully met Partially met


Page 86 BICBANCO 2008 Annual Report

Economic Performance Indicators Ind.

Topic

*

Page

Aspect: Economic performance EC1

Direct economic value created and distributed, including revenues, operating costs, employee remuneration, donations and other investments in the community, accumulated profits and payments to providers of capital and governments.

51

EC4

Significant financial help received from the government.

73 to 78

Aspect: Indirect economic impacts EC8

Development and impact of investments in infrastructure and services offered, principally for the benefit of the public, by means of business engagement in kind or pro-bonus activities.

71

Environmental Performance Indicators Ind.

Topic

*

Page

Aspect: Materials EN1

Materials used by weight or volume.

70

EN2

Percentage of materials used originating from recycling.

70

Aspect: Energy EN6

Initiatives to provide products and services with low energy consumption, or which use energy generated from renewable resources, and the reduction in energy requirements resulting from these initiatives.

70

Aspect: Product and Services EN26 Initiatives for mitigating the environmental impacts of products and services and the extension of the reduction in these impacts.

64

Performance Indicators Regarding Labor Law and Decent Work Practices Ind.

Topic

*

Pages

Aspect: Employment LA1

Total work force per type of employment, work contract and region.

58 and 59

LA3

Benefits offered to full-time employees and which are not offered to part-time employees, with a breakdown of the principal operations.

58 and 59

Aspect: Relations between te Work Force and Governance LA4

Percentage of employees covered by collective bargaining agreements.

59 to 61

Aspect: Occupational Health and Safety LA8

Education programs, training, prevention and control of risk to employees, their families or members of the community, in regard to serious illness.

68

Aspect: Training and Education LA11

Programs for managing abilities and continuous learning which support the on-going employability of the employees, and for managing the end of their careers.

60 and 61

Aspect: Diversity and Equal Opportunities LA13

Composition of the groups responsible for corporate governance and breakdown of employees per category, according to gender, age group, minorities and other diversity indicators.

58 and 59


BICBANCO 2008 Annual Report Page 87

Human Rights-Related Peformance Indicators Ind.

Topic

*

Page

Aspect: Freedom of Association and Collective Bargaining HR5

Operations identified in which the right to exercise freedom of asociation and collective bargaining may be at significant risk and the measures taken in support of this right.

59

Society-Related Social Performance Indicators Ind.

Topic

*

Page

Aspect: Corruption SO3

Percentage of employees trained in the organization's anti-corruption policies and procedures.

68 and 69

SO4

Measures taken in response to cases of corruption.

69

Aspect: Public Policies SO5

Positions regarding public policies and participation in drawing up public policies and lobbies.

54 and 63

Product Responsability-Related Performance Indicators Ind.

Topic

*

Page

Aspect: Labeling of Products and Services PR5

Practices involving client satisfaction, including the result of studies that measure this satisfaction.

55

Aspect: Marketing Communications PR6

Programs for adhering to laws, rules and voluntary codes involving marketing communications, including advertising, promotion and sponsorship.

54

Aspect: Conformity PR8

Total number of proven complaints involving violation of privacy and loss of client data.

55

Financial Services-Related Performance Indicators Ind.

Topic

*

Page

Aspect: Produce Portfolio FS1

Policies containing specif environmental and social components applied to the lines of business.

36

FS2

Procedures for evaluating and classifying environmental and social risks in the lines of business.

36

FS3

Processes for monitoring the implementation of client compliance with the environmental and social requirements included in contracts or transactions.

36

* Level of Adherence Fully met Partially met


Page 88 BICBANCO 2008 Annual Report

10. Limite Assurance Report of the Independent Auditors To The Board of Directors and shareholders of Banco Industrial e Comercial S.A. S達o Paulo - SP

Introduction We were hired for the purpose of applying limited assurance procedures to the information on sustainability disclosed in the Annual Report of Banco Industrial e Comercial S.A. (BICBANCO) and its subsidiaries, regarding the year ended December 31, 2008 and prepared under the responsibility of BICBANCO. Our responsibility is to issue a Limited Assurance Report on the information concerning sustainability.

Procedures applied The limited assurance procedures were undertaken pursuant to Rule NPO 1 issued by the Institute of Independent Accountants in Brazil - IBRACON and ISAE 3000 - International Standard on Assurance Engagements issued by the International Auditing and Assurance Standards Board, both of them for assurance work not involving auditing or review of historical financial information. The procedures included: (a) work planning, taking into account the relevance, coherence, volume of quantitative and qualitative information and the operating and internal control systems that served as the basis for preparing the sustainability information contained in the Annual Report of BICBanco; (b) understanding the methodology for calculating and consolidating the indicators by means of interviews with the managers responsible for preparing the information; (c) checking, based on sampling, the quantitative and qualitative information with the indicators disclosed in the Annual Report of BICBanco; and (d) checking the indicators of a financial nature with the financial statements and/or accounting records.

Critria for preparing the information The sustainability information disclosed in the 2008 Annual Report of BICBanco was prepared in accordance with the directives for sustainability reporting of the Global Reporting Initiative (GRI G3) and with the iBase social balance sheet model.


BICBANCO 2008 Annual Report Page 89

Scope and limitations The purpose of our work was to apply limited assurance procedures regarding the information to the sustainability management and performance indicators of BICBanco, excluding the evaluation of the appropriateness of its sustainability policies, practices and performance. The procedures applied do not represent an examination, in accordance with the rules of financial statement audits. Furthermore, our report does not afford limited assurance on the extent of future information (like for example: targets, expectations and ambitions) and descriptive information subject to subjective evaluation.

GRI - G3 Application Level In line with the guidelines of the GRI-G3 directives, BICBanco has declared an Application Level C in its Annual Report for the year ended December 31, 2008. The Report provides responses to the GRI items involving its structure and performance indicators which meet the criteria established by the Global Reporting Initiative - GRI for classification as Application Level C. Therefore, the procedures applied were considered sufficient for us to certify that the application level declared by BICBanco conforms to the guidelines of the GRI-G3 directives.

Conclusion Based on our review, we are not aware of any relevant modification that should be made to the sustainability information disclosed in the Annual Report of BICBanco for the year ended December 31, 2008, in order for it to be prepared in accordance with the GRI-G3 directives, the iBase social balance sheet model and with the records and files that served as the basis for preparing it.

July 24, 2009

KPMG Auditores Independentes Regional Accounting Council - CRC 2SP014428/O-6

Alberto Spilborghs Neto CRC 1SP167455/O-0

Alexandre Heinermann CRC SP228175/O–0


Page 90 BICBANCO 2008 Annual Report

11. Institutional Information Main Office

Av. Paulista, 1.048 - 11th floor - Bela Vista São Paulo - SP Postal Code 01310-100

Investor Relations

Tel.: (11) 2173-9190 E-mail: relacoes.investidores@bicbanco.com.br

Branch Network ARACAJU - SE Av. Francisco Porto, 544 - 13 de Julho District Aracaju-SE Postal Code 49020-120 PABX: (79) 3045 2300 - FAX: (79) 3246 4262 E-mail: ag.aracaju@bicbanco.com.br BELO HORIZONTE - MG Belo Horizonte Rua Paraíba, 1.000 - 11th floor - Funcionários District Belo Horizonte-MG Postal Code 30130-141 PABX: (31) 2108 3700 - FAX: (31) 3261 7575 E-mail: ag.belohorizonte@bicbanco.com.br Minas Gerais Rua Paraíba, 1.000 - 11th floor - Funcionários District Belo Horizonte-MG Postal Code 30130-141 PABX: (31) 2108 3700 - FAX: (31) 3261 7575 E-mail: ag.minasgerais@bicbanco.com.br BLUMENAU - SC Rua Sete de Setembro, 707 - Downtown Blumenau-SC Postal Code 89010-201 PABX: (47) 2102 9000 - FAX: (47) 3322 3246 E-mail: ag.blumenau@bicbanco.com.br BRASÍLIA - DF SCS - Square 03 - Bl. A Unit 214/218 - S. Comercial Sul District Brasília-DF Postal Code 70300-500 PABX: (61) 2107 3100 - FAX: (61) 3321 5531 E-mail: ag.brasilia@bicbanco.com.br CAMPINAS - SP Rua Odila Maria Rocha Brito, 527 - 4th floor - suites 44 and 45 Nova Campinas-SP Postal Code 13092-110 PABX: (19) 2116 9400 - FAX: (19) 3255 7915 E-mail: ag.campinas@bicbanco.com.br CAXIAS DO SUL - RS Rua Borges de Medeiros, 677 - Downtown Caxias do Sul-RS Postal Code 95020-310 PABX: (54) 4009 3000 - FAX: (54) 3223 1560 E-mail: ag.caxiasdosul@bicbanco.com.br CUIABÁ - MT Rua Barão de Melgaço, 3814 - North Downtown Cuiabá-MT Postal Code 78005-500 PABX: (65) 2123 5100 - FAX: (65) 3624 5788 E-mail: ag.cuiaba@bicbanco.com.br CURITIBA - PR Al. Dr. Carlos de Carvalho, 963 - Downtown Curitiba-PR Postal Code 80430-180 PABX: (41) 2107 9550 - FAX: (41) 3224 5046 E-mail: ag.curitiba@bicbanco.com.br FORTALEZA - CE Aldeota Av. Desembargador Moreira, 1.080 - Aldeota District Fortaleza-CE Postal Code 60170-001 PABX: (85) 3304 8400 - FAX: (85) 3261 7723 E-mail: ag.aldeota@bicbanco.com.br Bezerra de Menezes Av. Bezerra de Menezes, 25 - Farias Brito District Fortaleza-CE Postal Code 60325-003 PABX: (85) 3304 8300 - FAX: (85) 3283 1992 E-mail: ag.bezerrademenezes@bicbanco.com.br

Downtown Rua Barão de Rio Branco, 905 - Downtown Fortaleza-CE Postal Code 60025-060 PABX: (85) 3304 8200 - FAX: (85) 3304 8204 E-mail: ag.centro@bicbanco.com.br GOIÂNIA - GO Av. República do Líbano, 1.600, Block E1, Unit 11 Western Sector Goiânia-GO Postal Code 74125-125 PABX: (62) 2765 7700 - FAX: (62) 3224 3157 E-mail: ag.goiania@bicbanco.com.br GUARULHOS - SP Rua Luiz Gama, 82 - Downtown Guarulhos-SP Postal Code 07010-050 PABX: (11) 2179 9500 - FAX: (11) 6409 8547 E-mail: ag.guarulhos@bicbanco.com.br JOÃO PESSOA - PB Av. Presidente Epitácio Pessoa, 2.200 - Tambauzinho District João Pessoa-PB Postal Code 58030-002 PABX: (83) 3515 5200 - FAX: (83) 3515 5208 E-mail: ag.joaopessoa@bicbanco.com.br JUAZEIRO DO NORTE - CE Rua Santa Luzia, 391 - Downtown Juazeiro do Norte-CE Postal Code 63010-230 PABX: (88) 2101 8000 - FAX: (88) 3512 2585 E-mail: ag.juazeirodonorte@bicbanco.com.br LONDRINA - PR Av. Higienópolis, 488 - Downtown Londrina-PR Postal Code 86020-080 PABX: (43) 2101 7800 - FAX: (43) 3321 1546 Email: ag.londrina@bicbanco.com.br MACEIÓ - AL Av. Gov. Osman Loureiro, 49 rooms 406 to 409 - Mangabeiras Maceió-AL Postal Code 57032-000 PABX: (82) 2123 8450 - FAX: (82) 3235 5015 E-mail: ag.maceio@bicbanco.com.br NATAL - RN Av. Hermes da Fonseca, 612 e 614, Petrópolis District Natal-RN Postal Code 59014-002 PABX: (84) 4009 6868 - FAX: (84) 4009 6860 E-mail: ag.natal@bicbanco.com.br PORTO ALEGRE - RS Carlos Gomes Av. Carlos Gomes, 300 - 11th floor - suites 1.101 and 1.102 Auxiliadora District Porto Alegre-RS Postal Code 90480-000 PABX: (51) 2129 3199 - FAX: (51) 3333 9081 E-mail: ag.carlosgomes@bicbanco.com.br Porto Alegre Av. Carlos Gomes, 300 - 11th floor - suites 1.101 and 1.102 Auxiliadora District Porto Alegre-RS Postal Code 90480-000 PABX: (51) 2129 3199 - FAX: (51) 3333 9081 E-mail: ag.portoalegre@bicbanco.com.br RIO DE JANEIRO - RJ Assembléia Praia do Botafogo, 228 - suite 1201 B Ed. Argentina - Botafogo District Rio de Janeiro - RJ Postal Code 22250-040 PABX: (21) 2157 0600 FAX: (21) 2157 0626 E-mail: ag.assembleia@bicbanco.com.br Rio de Janeiro Praia do Botafogo, 228 - suite 1201 B Ed. Argentina - Botafogo District Rio de Janeiro - RJ Postal Code 22250-040 PABX: (21) 2157 0600 FAX: (21) 2553 3397 E-mail: ag.riodejaneiro@bicbanco.com.br

RIBEIRÃO PRETO - SP Av. Braz Olaia Acosta, 727 suites 2.202 to 2.204 - Jd. Califórnia District Ribeirão Preto-SP Postal Code 14026-040 PABX: (16) 2111 0100 - FAX: (16) 3911 7471 E-mail: ag.ribeiraopreto@bicbanco.com.br RECIFE - PE Av. Engenheiro Antônio Góes, 60 suites 402 to 404 - Pina District Recife-PE Postal Code 51010-000 PABX: (81) 2119 3050 - FAX (81) 2119 3070 E-mail: ag.recife@bicbanco.com.br SALVADOR - BA Av. Tancredo Neves, 450 - 17th floor suite 1.701 - Itaigara District Salvador-BA Postal Code 41820-020 PABX: (71) 2101 0199 - FAX: (71) 3341 4636 E-mail: ag.salvador@bicbanco.com.br SANTO ANDRÉ - SP ABC Rua Cel Alfredo Flaquer, 516 - Downtown Santo André-SP Postal Code 09020-041 PABX: (11) 2168 0700 - FAX: (11) 4436 4434 E-mail: ag.abc@bicbanco.com.br SANTOS - SP Av. Marechal Deodoro. 43 - Gonzaga District Santos-SP Postal Code 11060-401 PABX: (13) 4009 0166 - FAX: (13) 3284 2539 E-mail: ag.santos@bicbanco.com.br SÃO LUÍS - MA Av. Collares Moreira, 02 block 01, room 808, Planta Building Renascença II Tower São Luís-MA Postal Code 65075-440 PABX: (98) 3334 6100 - FAX: (98) 3268 7395 E-mail: ag.saoluis@bicbanco.com.br SÃO PAULO - SP Augusta Av. Paulista, 1.713 - Cerqueira César Distric São Paulo-SP Postal Code 01311-200 PABX: (11) 2169 0949 - FAX: (11) 3253 5521 E-mail: ag.augusta@bicbanco.com.br Berrini Av. Eng. Luís Carlos Berrini, 1.681 suite 81 - Jd. Edith District São Paulo-SP Postal Code 04571-011 PABX: (11) 2167 0999 - FAX: (11) 5102 2308 E-mail: ag.berrini@bicbanco.com.br Masp Av. Paulista, 1.713 - Cerqueira César District São Paulo-SP Postal Code 01311-200 PABX: (11) 2169 0955 - FAX: (11) 3283 4029 E-mail: ag.masp@bicbanco.com.br Paulista Av. Paulista, 1.713 - Cerqueira César District São Paulo-SP Postal Code 01311-200 PABX: (11) 2169 0900 - FAX: (11) 3283 1521 E-mail: ag.paulista@bicbanco.com.br TERESINA - PI Rua 24 de Janeiro, 258 - Downtown Teresina-PI Postal Code 64000-230 PABX: (86) 2107 2355 - FAX: (86) 2107 2360 E-mail: ag.teresina@bicbanco.com.br UBERLÂNDIA - MG Av. Rondom Pacheco, 2.111 - Lídice District Uberlândia-MG Postal Code 38400-050 PABX: (34) 3303 5000 - FAX: (34) 3303 5001 E-mail: ag.uberlandia@bicbanco.com.br


BICBANCO 2008 Annual Report Page 91

12. Credits Design, Creation, DTP and Production Communication and Marketing - BICBANCO Coordination and Editing Communication and Marketing - BICBANCO Corporate Governance - BICBANCO Collaboration and Content Corporate Governance - BICBANCO Administration and Human Resources - BICBANCO Investor Relations - BICBANCO Translation LAG Traduções Photos BICBANCO Collection Fernando Favoretto Márcio Távora External Verification of the Sustainability Information, IBase Audit and Financial Statements KPMG Auditores Independentes Address of the Electronic Version www.bicbanco.com.br

Out of respect for the environment, this report has been published electronically.

This report was developed by the professionals of BICBANCO.


Bic Banco - Annual Report 2008