3Q14 / 9M14 Earnings Release São Paulo, November 14, 2014. Banco Industrial e Comercial S.A. (BICBANCO) (BM&FBOVESPA: BICB3 and BICB4), today announced its results for the third quarter (3Q14) and the first nine months of 2014 (9M14). All operational and financial information contained in this Report, except where otherwise indicated, is presented in Brazilian currency (Reais - R$), on a consolidated basis, and comprises the Bank's subsidiaries and the Receivables Investment Funds (FIDCs). The financial statements herein posted comply with the rules set out by the Brazilian Central Bank (BACEN), the Brazilian Corporate Law, the technical opinions of the Accounting Pronouncement Committee (CPC), and are ruled by the Brazilian Securities and Exchange Commission (CVM). Highlights Extended Loan Portfolio R$12.3 bi Total Funding R$12.4 bi Liquid Assets R$2.7 bi Adjusted Net Result R$ -353.0 mi Completion of the acquisition of BICBANCO by CCB At the close of 3Q14, loan operations including guarantees and sureties came to R$ 12,349.5 million, down 4.8% from 2Q14, and down 4.2% year-over-year. Guarantees and sureties totaled R$ 2,364.1 million at the close of 3Q14, representing a decrease of 2.8% quarterover-quarter and an increase of 21.4% year-over-year. The share of large corporate clients in the overall loan operations resulted in 46.2%. Total funding amounted to R$ 12,440.4 million in 3Q14, representing an increase of 2.5% quarter-over-quarter and a decrease of 1.2% year-over-year. Domestic funding came to R$ 8,549.9 million, with particular emphasis on time deposits, which totaled R$ 6,583.7 million, down 3.5% from 2Q14 and up 5.9% year-over-year. International funding amounted to R$ 3,890.5 million, accounting for 31.3% of the overall funding. At the end of 3Q14, highly liquid assets totaled R$ 2,707.4 million, representing increases of 19.3% quarter-over-quarter and 38.0% in relation to the same period of 2013. The Bank’s Management deems the amount for liquid assets to be quite favorable, based on the flow of maturities for both assets and liabilities operations. In the third quarter of 2014, the net financial loss rose to R$ 353.0 million and to R$ 500.0 million in 9M14. This performance has been mainly impacted by the expenses of LLPs totaling R$ 621.2 million in 3Q14 and R$ 929.2 million in 9M14. The unfolding of the share purchase and sale agreement of 72% of BICBANCO's capital stock executed with China Construction Bank (CCB) on October 31, 2013, taking into account that the applicable precepts and regulations concerning this operation have been fulfilled, CCB Brazil Financial Holding – Investimentos e Participações Ltda (CCB Holding), acquired BICBANCO's shareholding control on August 29. Further details on the final stage of the purchase and sale process are shown on page 14. Milto Bardini Investor Relations Executive Vice President of Operations and IR Officer Phone [55 11] 2173-9190 Maria Ines Martins Ramos www.bicbanco.com.br/ir IR Superintendent [email protected] Claudine Nahas IR Analyst 3Q14 / 9M14 Earnings Release Main indicators Balance sheet (R$ million) 3Q14 2Q14 3Q/2Q (%) 3Q13 3Q/3Q (%) Loan operations 9,985.4 10,535.8 (5.2) 10,940.3 (8.7) Marketable securities and derivatives 1,864.1 1,855.1 0.5 2,008.3 (7.2) 14,939.5 15,021.5 (0.5) 15,457.5 (3.4) Time deposits 6,583.7 6,823.0 (3.5) 6,215.4 5.9 Total deposits 7,222.3 7,360.4 (1.9) 7,070.5 2.1 Shareholders’ equity 1,448.7 1,815.3 (20.2) 1,923.1 (24.7) 66.8% 70.1% -3.3 p.p. 70.8% -4.0 p.p. Total assets Loan operations / total assets Results (R$ million) 3Q13 3Q/3Q (%) 9M14 (452.5) (65.5) n.a. 176.1 n.a. (390.5) 458.7 n.a. 23.6 23.0 2.6 27.7 (14.9) 73.4 71.3 3.0 Personnel expenses (56.3) (56.1) 0.3 (47.4) 18.7 (166.8) (156.1) 6.9 Administrative expenses (52.5) (46.3) 13.3 (47.4) 10.8 (148.7) (133.2) 11.7 (353.0) (150.8) n.a. 35.4 n.a. (500.0) 102.6 n.a. 3Q13 3Q/3Q (%) 9M14 Adjusted financial operations result Income from services Adjusted net result Indicators (%) 3Q14 3Q14 2Q14 3Q/2Q (%) 2Q14 3Q/2Q (%) 9M13 9M/9M (%) 9M13 9M/9M (%) 14.4% 16.7% -2.4 p.p. 18.9% -4.5 p.p. 14.4% 18.9% -4.5 p.p. Adjusted net interest margin 5.1% 5.5% -0.4 p.p. 7.2% -2.1 p.p. 5.4% 5.9% -0.5 p.p. Shareholder Remuneration (R$ million) 3Q14 2Q14 3Q/2Q (%) 3Q13 3Q/3Q (%) 9M14 9M13 9M/9M (%) n.a. - 3Q13 3Q/3Q (%) 9M14 Basel Index Interest on equity Stock Performance 3Q14 - n.a. 2Q14 3Q/2Q (%) - 52.0 n.a. 9M13 9M/9M (%) Earnings per outstanding share (R$) (1.4320) (0.6118) n.a. 0.1438 n.a. (2.0283) 0.4167 n.a. Book value per outstanding share (R$) 5.8768 7.3641 (20.2) 7.8110 (24.8) 5.8768 7.8110 (24.8) 7.30 7.55 (3.3) 4.50 62.2 7.30 4.50 62.2 1,846.2 1,927.0 (4.2) 1,146.1 61.1 1,846.2 1,146.1 61.1 Market price - BICB4 (R$) (*) Market cap (R$ million) (*) (*) last working day of the respective periods n.a. - not applicable The adjusted net result is the accounting net result, after deduction of the adjustments resulting from the mark-to-market valuation of the derivative positions, in connection with the funding operations involving bonds issued abroad, net of taxes. The Bank adopts the adjusted net result concept in its Earnings Release, for the purpose of providing a better understanding, a more adequate comparative analysis, as well as a more accurate assessment of BICBANCO’s performance, with special emphasis on operational aspects. An overview of the accounting result can be found on page 18. The conciliation between the adjusted and the accounting net result is broken down as follows. Reconciliation of net result (R$ million) Net result (accounting) Effect of the mark-to-market accounted in result with derivative financial instruments Deferred tax over the mark-to-market Net effect of the mark-to-market on the result Adjusted net result 3Q14 2Q14 3Q13 9M14 (368.6) 26.0 9M13 (143.9) 5.2 (512.0) 22.8 (11.5) 50.0 20.0 133.1 (10.4) 4.6 (19.8) (8.0) (53.3) 15.6 (6.9) 30.2 12.0 79.8 (353.0) (150.8) 35.4 (500.0) 102.6 Profile BICBANCO is a foreign capital bank, which specializes in granting corporate credit to the Middle Market segment, which comprises the group of companies with yearly revenues between R$ 50 million and R$ 500 million. It caters for a wide range of products and services to its diversified client base spread throughout the country. With over 75 years’ experience in this activity, it stands out as one of Brazil's most traditional banks, by supporting the sustainability and longevity of its businesses through initiatives related to good corporate governance practices, corporate ethics and risk management. Since August 29, 2014, the Bank has integrated the China Construction Bank Group (CCB). CCB is the second largest commercial bank in China, with nearly 60 years of operational track record, besides being the 5th largest publicly-held bank in the world. CCB's shares are listed in the stock exchanges of Hong Kong and Shanghai. p. 2|18 3Q14 / 9M14 Earnings Release Economic environment As at September, 2014, the official inflation rate, as measured by the Broad Consumer Price Index (IPCA) reached 6.75% p.a., above the 6.5% p.a. reported for the same period ended June 2014, above the upper target that had been fixed. The Brazilian Central Bank’s Monetary Policy Committee (COPOM), at the Meeting held on October 29, has resumed the upward cycle for the basic interest rates (Selic), and raised it to 11.25% p.a., which had prevailed at 11.0% p.a. since April 2014. Following a period of volatility shown during the first nine months of 2014, the exchange rate closed at R$ 2.45/US$ in September, nearly flat versus the rate of R$ 2.40/US$ recorded at the beginning of the period. During the 12-month period ended in September, Brazilian exports totaled US$ 238.2 billion, down 0.6% year-over-year. Considering the same basis of comparison, imports fell by 1.2%, to US$ 234.7 billion. As a result, the Brazilian trade balance came to a US$ 3.5 billion surplus. Overall loans and financing carried out by the financial system amounted to R$ 2.9 trillion at the close of 9M14, up 11.7% yearover-year. Real estate financing was the category of credit that showed the largest expansion, with a 27.4% growth over the 12-month period. Credit supply as a proportion of GDP reached 57.2% in September 2014. Volume of loan operations in the Financial System (R$ billion) Jun/14 Jul/14 (*) Aug/14 (*) Sep/14 (*) Sep/Jun (%) .Individuals 765.7 756.9 759.9 766.5 0.1% .Corporations 758.9 760.1 763.4 767.8 1.2% .Directed funds 1,306.4 1,319.9 1,339.7 1,366.4 4.6% Total Credit 2,831.0 2,836.9 2,863.0 2,900.7 2.5% 56.8% 56.5% 56.7% 57.2% Total Credit / GDP (*) Preliminary data Source: Bacen Transition Phase 2 Since the completion of the acquisition of the Bank's shareholding control on August 29, 2014, China Construction Bank has laid down a set of directives aimed at aligning the new Subsidiary to the framework adopted by the Group. This adjustment process, which is expected to be completed by the end of this year, comprises policies, practices and procedures involving all operational areas, so as to pave the way to assure that the business plan be performed in a smoothly and integrated manner. The 3Q14 results reflect a major impact from such measures, within the scope of assessment of credit risks, by boldly getting ahead of the signs shown by the present scenario, regardless of both individual or industry situations, which led to a considerable rise in provision and coverage expenses. The permanent value deriving from the application of such cautionary procedures takes precedence over the burden - transitory, notwithstanding significant - on the quarterly performance. p. 3|18 3Q14 / 9M14 Earnings Release Financial operations result In 3Q14, the financial operations result amounted to R$ 461.9 million, down 4.3% from 2Q14. The amount of financial operations income fell by 2.7% in 3Q14 with comparison to the previous quarter. Considering the first nine months of 2014, the financial operations result dropped by 0.8% year-over-year. Financial operation expenses came to R$ 293.2 million in 3Q14, down 3.4% from 2Q14. PLL expenses stood at R$ 621.2 million in 3Q14, versus R$ 244.9 million in 2Q14, and R$ 77.0 million in 3Q13. The participation of clients from the large-corporate segment accounted for 46.2% in 3Q14, higher than the 45.1% share recorded in 2Q14 and the 39.6% in 3Q13. In 3Q14 and 2Q14, the recovery of written-off loans totaled R$ 4.2 million, versus R$ 12.6 million in 3Q13. Financial operations result (exchange variance*) (R$ million) Financial operations income Loan operations 3Q14 2Q14 3Q/2Q (%) 3Q13 3Q/3Q (%) 9M14 9M13 9M/9M (%) 461.9 482.8 (4.3) 513.9 (10.1) 1,413.7 1,424.6 (0.8) 375.2 385.5 (2.7) 401.4 (6.5) 1,131.1 1,218.8 (7.2) 3.8 9.7 (61.1) 17.4 (78.3) 25.1 43.9 (42.8) Marketable securities result 59.3 65.6 (9.7) 69.5 (14.7) 193.2 87.7 120.4 Foreign exchange result Leasing operations 21.9 15.1 45.7 21.5 2.3 52.5 69.8 (24.9) Exchange variance 1.5 6.3 (75.7) 3.7 (58.4) 10.4 3.0 n.a. Result from compulsory applications 0.1 0.1 - - n.a. 0.3 0.1 n.a. 0.1 0.5 (85.7) 0.4 (82.6) 1.1 1.3 (10.1) (293.2) (303.4) (3.4) (260.8) 12.4 (875.0) (764.9) 14.4 (267.8) (255.6) 4.8 (225.5) 18.7 (769.4) (651.4) 18.1 (17.1) (12.7) 33.6 (21.6) (21.3) (45.6) (70.6) (35.3) (7.8) (35.1) (77.7) (0.3) n.a. (59.3) (29.5) 100.8 Financial assets sales or transfer operations Financial operations expenses Money market Borrowings and onlending Adjusted result from derivative instruments (0.5) - n.a. (13.4) (96.4) (0.7) (13.4) (95.1) 168.7 179.4 (6.0) 253.1 (33.3) 538.7 659.7 (18.4) (621.2) (244.9) n.a. (77.0) n.a. (929.2) (201.0) n.a. (452.5) (65.5) n.a. 176.1 n.a. (390.5) 458.7 n.a. Sales operations or financial assets transfers Financial operations result before PLL Provision for loan losses Financial operations result n.a. - not applicable * For the purpose of analysis, the currency variation of assets (loan operations, marketable securities and derivatives portfolio and foreign exchange portfolio) and liabilities (funding from market and foreign exchange portfolio) have been grouped into one single account under the caption of “currency variation”. In the Financial Statements, the balances of the currency variations were booked under their corresponding income and expenses, as shown in Explanatory Note No. 30 (L). Net interest margin (NIM) In 3Q14, net interest margin (NIM) stood at 5.1%, down 0.4 p.p. quarter-over-quarter. In 9M14, NIM was 5.4%, down 0.5 p.p. in relation to the same period of 2013. The net interest margin has been impacted by the drop in the financial operations result, without considering the provision for loan losses. Moreover, the mix of profitable assets overburdened the highly-liquid assets, which deliver lower yields, in detriment of declining loan operations. Net interest margin (R$ million) Financial operations result before PLL 3Q14 2Q14 3Q/2Q (%) 3Q13 3Q/3Q (%) 9M14 9M13 9M/9M (%) 168.7 179.4 253.1 538.7 (6.0) Average profitable assets (*) 13,581.3 13,341.2 1.8 14,418.7 - Loan operations 10,212.2 10,593.1 (3.6) 11,279.2 (33.3) 659.7 (18.3) (5.8) 13,419.8 14,972.8 (10.4) (9.5) 10,351.0 11,832.8 (12.5) - Securities and derivatives 1,827.5 1,844.2 (0.9) 2,143.6 (14.7) 1,885.4 2,135.4 (11.7) - Interbank investments 1,541.6 903.9 70.6 995.9 54.8 1,183.4 1,004.6 17.8 5.1% 5.5% -0.4 p.p. 7.2% -2.1 p.p. 5.4% 5.9% -0.5 p.p. Net interest margin (*) Average figures taking into account the monthly balance for each period. p. 4|18 3Q14 / 9M14 Earnings Release Total assets As at September 30, 2014, the Bank’s total assets amounted to R$ 14,939.5 million, representing decreases of 0.5% quarterover-quarter and of 3.4% year-over-year. This performance reflects the reduction in loan operations. Total Assets (R$ million) R$ 14.9 billion in assets, 66.8% of which refers to loan operations. -3.4% Loan operations -0.5% 15,457.5 15,506.2 15,262.3 15,021.5 3,121.9 3,021.1 2,212.7 1,962.5 14,939.5 2,886.0 2,259.8 2,831.0 3,388.9 2,269.6 2,707.4 The extended loan portfolio, which comprises loan operations (as set out by Resolution 2682/99), plus guarantees and sureties, amounted to R$ 12,349.5 million, representing decreases of 4.8% quarter-over-quarter and of 4.2% over 3Q13. Extended Loan Portfolio (R$ million) -4.2% 10,473.9 3Q13 10,116.5 10,171.6 4Q13 1Q14 9,920.9 2Q14 -4.8% 8,843.2 12,888.3 3Q14 Other assets Liquid Assets (highly liquid assets) Loan Operations, net of provision for loan losses 12,736.0 12,792.2 12,966.8 12,349.5 1,948.0 2,145.4 2,242.5 2,431.0 2,364.1 10,940.3 10,590.6 10,549.7 10,535.8 9,985.4 Liquid assets At the end of 3Q14, highly liquid assets totaled R$ 2,707.4 million, representing increases of 19.3% quarter-over-quarter and of 38.0% year-over-year. Liquid assets (R$ million) Cash & cash equivalents Open Market investments (except FIDCs and Repurchase Agreements) 3Q14 2Q14 3Q/2Q (%) 3Q13 3Q/3Q (%) 90.0 303.1 (70.3) 324.8 (72.3) 1,672.1 799.4 109.2 520.3 n.a. 4Q13 1Q14 2Q14 3Q14 Guarantees and sureties Loan operations The portfolio dispersion covers all geographic regions, with no concentration in any industry, economic activity or risk per client. The risk dispersion indicators, one of the Bank’s pivotal values, fell within a satisfactory range of dispersion in 3Q14. In 3Q14, the Bank did not carry out any sale or assignment of credit to other financial institutions, neither did it discontinue any businesses or products. Investments in Interbank deposits (except for deposits for coverage of swap operations) 101.8 2.9 n.a. 115.6 (11.9) Own portfolio negotiation (except FIDCs and private securities) 843.5 1,164.2 (27.5) 1,001.7 (15.8) 2,707.4 2.269,6 19.3 1,962.5 38.0 Total 3Q13 The volume of corporate loans accounted for 88.2% of the Bank's overall loan operations in 3Q14, whereas payrolldeductible loan operations represented 8.0% of the total and personal loans, 3.8%. Retail operations are primarily conducted by the Bank's subsidiary Sul Financeira. p. 5|18 3Q14 / 9M14 Earnings Release In 3Q14, the breakdown of loan operations by economic segments was as follows: industry 41.6%, services 26.1%, commerce 13.9%, individuals 12.2%, agriculture 3.0%, public sector 2.4% and financial intermediaries 0.8%. In each economic segment, the policy of risk dispersal is also evidenced by the granting of loans to clients that operate in a variety of its business activities, as demonstrated in the table below. By segment The policy of loan portfolio dispersal implies keeping the main risks at appropriate levels, both in the case of a single client and for the groups of largest borrowers. In 3Q14, the largest borrower accounted for 1.8% of the total portfolio, and the 100 largest ones jointly accounted for 37.3%. Risk exposure levels 3Q14 2Q14 3Q13 1.82 1.86 1.17 10 largest risks 11.17 10.35 7.25 20 largest risks 16.22 15.23 11.46 Largest risk By activity % Individuals - Individuals 12.2% Industry - Construction - Contractors 7.3% Industry - Sugar and ethanol mills 7.2% 50 largest risks 26.60 24.85 20.53 Services - Holding companies in general 5.2% 100 largest risks 37.30 35.83 31.38 Industry - Real Estate Developer 4.7% Services - Cargo and passengers transportation 3.6% Commerce - Supermarkets and wholesalers 3.2% Agriculture - Agriculture 3.0% Services - Technical and professional services 2.9% Industry - Production of pulp and paper 2.5% Public Sector - State Government 2.4% Industry - Metallurgical and mechanical production 2.3% Commerce - Commerce of Electronics 2.3% Services - Medical and dental services 2.3% Industry - Chemical and petrochemical industry 2.1% Commerce - Vehicle dealerships and sale yards 1.8% Services - Rental services in general 1.8% Industry - Production of flour, pasta, cakes and cookies 1.5% Industry - Production of pipes and iron-based items 1.3% Industry - Production of vehicles, body and others 1.3% Serviços - Energy distribution 1.3% Industry - Beverage industry 1.2% Industry - Construction materials industry 1.1% Industry - Animal slaughter and meat packing 1.1% Services - Utilities Others - Other economic segments 30.7% of the loans mature in less than 90 days. The Bank’s portfolio has a short-term maturity profile, with 68,6% of the loans maturing within a year. In 3Q14, R$ 3,068.5 million of the loan operations, or 30.7% of the portfolio, had maturities of up to 90 days. The loan portfolio duration stood at 393 days (378 days in 2Q14). Breakdown by maturity (%) 1.9% 1.6% 2.2% 1.8% 3.4% 24.1% 26.0% 24.1% 27.7% 28.0% 37.3% 35.3% 38.2% 37.3% 37.9% 36.7% 37.1% 35.5% 33.2% 30.7% 1.0% 23.3% TOTAL 100.0% Regional dispersion (%) Cayman – 3.8% 3Q13 4Q13 1Q14 2Q14 3Q14 Up to 3 months From 3 to 12 months Above 1 year Installments overdue over 14 days 0.6% 20.4% 11.9% 47.6% 15.7% At the close of 3Q14, installments over 14 days past due totaled R$ 335.7 million, up 75.3% from the balance of R$ 191.5 million recorded in 2Q14, and up 57.7% from the balance of R$ 212.9 million registered in 3Q13. The ratio of installments over 14 days past due to loan operations stood at 3.4% in 3Q14 (1.8% in 2Q14 and 1.9% in 3Q13). The coverage rate of installments over 14 days past due stood at 340.2% in 3Q14 (321.1% in 2Q14 and 219.0% in 3Q13). At the close of 3Q14, PLL came to R$ 1,142.2 million, representing rises of 85.8% quarter-over-quarter and of 144.9% year-over-year. p. 6|18 3Q14 / 9M14 Earnings Release Extended loan portfolio (R$ million) Working capital Trade finance Payroll deductible loans Guaranteed accounts Personal loan Leasing operations Machinery and heavy vehicles financing Corporate Overdraft Other credits Total loan operations Guarantees and sureties Extended loan portfolio Breakdown of loan portfolio by operational class (%) 47.1% 22.1% 11.8% 6.3% 2.9% 1.0% 0.4% 8.4% 3Q14 2Q14 3Q/2Q (%) 3Q13 3Q/3Q (%) 4,702.4 2,211.3 804.7 631.0 378.5 288.4 94.5 40.0 834.6 9,985.4 2,364.1 12,349.5 5,188.5 2,168.6 800.5 758.9 341.2 321.9 106.8 56.9 792.5 10,535.8 2,431.0 12,966.8 (9.4) 2.0 0.5 (16.9) 10.9 (10.4) (11.5) (29.7) 5.3 (5.2) (2.8) (4.8) 5,869.2 2,108.2 671.0 861.6 225.0 361.1 152.3 74.0 617.9 10,940.3 1,948.0 12,888.3 (19.9) 4.9 19.9 (26.8) 68.2 (20.1) (38.0) (46.0) 35.1 (8.7) 21.4 (4.2) Trade finance This type of credit comprises advances on foreign exchange contracts (ACC/ACE), and import/export financing, as well as notes receivables denominated in foreign-currencies. Foreign trade finance operations are strategically important for the Bank, since they expand product supply, ensure loyalty from clients in foreign trading and disperse loan portfolio risks. At the close of 3Q14, trade finance operations totaled R$ 2,211.3 million, or 22.1% of the total loan portfolio. During the quarter, trade finance operations rose by 2.0% quarter-over-quarter and by 4.9% year-over-year. Working capital Trade finance Payroll deductible loans / Personal loan Guaranteed accounts Leasing operations Machinery and heavy vehicles financing Corporate Overdraft Other credits Retail Working Capital This is the Bank’s main product. It aims at meeting the cash flow requirements of companies, generally with maturities not longer than one year. At the close of 3Q14, the balance of this portfolio amounted to R$ 4,702.4 million, or 47.1%of the total loan portfolio. The volume of this type of operations declined by 9.4% and 19.9% quarter-over-quarter and year-over-year respectively. Sul Financeira, a wholly-owned subsidiary of BICBANCO, concentrates the operations geared to the retail segment, which basically comprises payroll-deductible loan operations, as well as personal loans, car financing and credit cards. In 3Q14, this segment accounted for 11.8% of the overall loan portfolio, totaling R$ 1,183.2 million. Operations related to this type of credit rose by 3.6% over 2Q14 and by 32.1% over 3Q13. Guaranteed accounts This product consists of credit lines linked to corporate bank accounts, aimed at promptly meeting the clients’ working capital needs. At the close of 3Q14, this type of credit accounted for 6.3% of the total loan portfolio and amounted to R$ 631.0 million, representing decreases of 16.9% and 26.8% quarter-over-quarter and year-over-year respectively. Working Capital (R$ million) -19.9% -9.4% 5,869.2 5,752.5 Guaranteed accounts (R$ million) 5,406.3 -26.8% 5,188.5 4,702.4 -16.9% 861.6 776.8 775.3 758.9 631.0 3Q13 4Q13 1Q14 2Q14 3Q14 3Q13 4Q13 1Q14 2Q14 3Q14 p. 7|18 3Q14 / 9M14 Earnings Release Lease operations Corporate overdraft Leasing operations, whose portfolio at present value came to R$ 288.4 million in 3Q14, dropped by 10.4% quarterover-quarter and by 20.1% year-over-year. The portfolio breakdown by type of segment was as follows: machinery & equipment: 41.5%; heavy-duty vehicles: 23.4%; aircraft: 21.7%; real estate: 13.0%; and others: 0.4%. This product consists in a revolving line of credit facility aimed at meeting corporate clients' working capital needs. This preapproved credit limit enjoys pre-fixed interests and regulated fees, providing agility and flexibility to minor financial operations. This type of credit amounted to R$ 40.0 million in 3Q14, or 0.4% of the total loan portfolio, representing decreases of 29.7% and 46.0% over 2Q14 and 3Q13 respectively. Financing of machinery and heavy-duty vehicles This is one more credit alternative for the Bank’s clients to develop their projects by acquiring durable goods intended to foster their businesses. In 3Q14, this portfolio amounted to R$ 94.5 million, down 11.5% and 38.0% from 2Q14 and 3Q13 respectively. The portfolio breakdown by type of segment was as follows: machinery and equipment: 51.6%; heavy-duty vehicles: 42.4%; and others: 6.0%. In 3Q14, this type of credit comprised 0.9% of the overall loan portfolio. Other credits Other credits mainly comprise the modalities of Agribusiness Financing, Resolution 2770, Compror & Vendor, and debtors for the purchase of assets and goods. In 3Q14, This type of credit amounted to R$ 834.6 million, and showed rises of 5.3% and 35.1% over 2Q14 and 3Q13 respectively. At the close of 3Q14, the caption "other credits" accounted for 8.4% of the overall loan portfolio. Guarantees and sureties This type of operation is not included in the loan portfolio, in accordance with Resolution 2682, notwithstanding it is taken into account in the calculation of the Basel index. Its consistent development quarter after quarter led the Bank to start including information on the extended loan portfolio in its Earning Releases, which includes guarantees and sureties. In 3Q14, guarantees and sureties granted totaled R$ 2,364.1 million, down 2.8% quarter-over-quarter and up 21.4% year-over-year. Loan default and provision for loan losses In 3Q14, NPL figures (absolute and relative) remained stable, both in terms of loan installments overdue over 60 and 90 days, notwithstanding the lingering deterioration of the economic situation, alongside with the corporate credit risks. Nevertheless, as of September, the amount of expenses related to the provisions for overdue credits have been considerably increased, due to the application of assessment and rating metrics in line with the practices adopted by the China Construction Bank Group. The additional burden stemming from this rise in PLLs has been fully taken into account in 3Q14, which should be regarded as a crucial effort within this context. Alongside, the adoption of more conservative criteria as concerns the identification and assessment of further risks should gradually contribute to a more solid qualification of the Loan Portfolio. Loan quality indicators (R$ million) Total loan operations PLL D-H portfolio (2682) E-H portfolio (2682) Borrowers with loan installments overdue over 60 days Borrowers with loan installments overdue over 90 days Installments overdue over 14 days Ratios over total loan operations (%) PLL D-H portfolio E-H portfolio Borrowers with loan installments overdue over 60 days Borrowers with loan installments overdue over 90 days Installments overdue over 14 days Provision indicators (%) D-H portfolio E-H portfolio Borrowers with loan installments overdue over 60 days Borrowers with loan installments overdue over 90 days Installments overdue over 14 days 3Q14 2Q14 1Q14 4Q13 3Q13 9,985.4 1,142.2 2,252.2 1,519.7 355.4 316.7 335.7 10,535.8 614.9 1,285.1 922.9 349.6 329.6 191.5 10,549.7 433.2 895.8 646.1 375.3 357.6 235.2 10,590.6 419.0 944.0 582.1 245.6 217.4 166.8 10,940.3 466.4 847.8 612.3 324.0 305.7 212.9 11.4% 22.6% 15.2% 3.6% 3.2% 3.4% 5.8% 12.2% 8.8% 3.3% 3.1% 1.8% 4.1% 8.5% 6.1% 3.6% 3.4% 2.2% 4.0% 8.9% 5.5% 2.3% 2.1% 1.6% 4.3% 7.7% 5.6% 3.0% 2.8% 1.9% 50.7% 75.2% 321.4% 360.7% 340.2% 47.8% 66.6% 175.9% 186.5% 321.1% 48.4% 67.1% 115.4% 121.1% 184.2% 44.4% 72.0% 170.6% 192.8% 251.2% 55.0% 76.2% 144.0% 152.6% 219.0% p. 8|18 3Q14 / 9M14 Earnings Release Funding Time deposits maturity profile at the end of 3Q14 was as follows: The total volume of funds raised in 3Q14 came to R$ 12,440.5 million, showing a 2.5% increase in comparison with 2Q14, and a 1.2% drop year-over-year. The Bank has maintained its strategy to extend the maturity terms of its funding operations. At the close of 3Q14, the total funding featuring below 3-month maturities accounted for 22.7% of the overall funding, whereas 43.8% held over oneyear maturities. In 3Q14, the duration of total funding stood at 641 days, higher than the 393-day duration of loan operations. BICBANCO's healthy structure as concerns the maturity of both assets and liabilities delivers an atmosphere of stability and comfort to the Institution, particularly during periods of greater market volatility. Sources of funding (R$ million) Time deposits by maturity (%) 16.1% 37.9% 44.2% 1.8% Up to 3 months From 3 to 12 months From 1 to 3 years Above 3 years The Bank maintains a suitable diversification of its investors' base, with a view to diluting the risk exposure. -1.2% +2.5% 12,586.9 12,562.9 4,138.6 1Q14 12,440.4 3,597.4 8,557.3 8,493.7 4Q13 12,135.0 3,727.4 4,069.2 8,448.3 3Q13 12,284.7 3,890.5 8,537.6 2Q14 8,549.9 % of time deposits 3Q14 2Q14 3Q13 Largest depositor 10 largest depositors 20 largest depositors 50 largest depositors 100 largest depositors 4.7 18.5 25.4 35.1 47.6 6.7 18.0 24.2 33.7 45.9 2.6 11.3 17.7 27.4 40.2 From the total volume of time deposits, the amount of R$ 737.2 million held some liquidity clause, in general, on the date of the investment anniversary. The commitment executed between the Bank and the client is registered with the Custody and Clearance Chamber (CETIP). 3Q14 Foreign currency funding Local currency funding Domestic Funding Time deposits In 3Q14, time deposits amounted to R$ 6,583.7 million, down 3.5% from 2Q14 and up 5.9% from 3Q13. During the quarter, the duration of time deposits stood at 514 days (494 days in 2Q14). From the total volume of time deposits, in the amount of R$ 6,583.7 million, R$ 3,169.7 million consisted of deposits with special guarantee from the Credit Guarantee Fund (DPGE). 60.9% of time deposits come from the Bank's client base corporations and individuals. Time deposit by type of depositor (%) 56.9% 38.7% 4.0% 0.4% Corporations Institutional investors Individuals Financial Institutions p. 9|18 3Q14 / 9M14 Earnings Release Other deposits Demand, savings and inter-financial deposits totaled R$ 637.9 million at the close of 3Q14, up 18.7% quarter-over-quarter and down 25.4% year-over-year. Agriculture (LCAs), Mortgage (LCI) Credit and Financial (LFs) Bills The Bank has been seeking to diversify its financial product mix, by means of resorting to the issuing of credit bills, such as the Agriculture Credit Bills (LCAs), Financial Bills (LFs) and Mortgage Bills (LCIs). Total proceeds from such issues amounted to R$ 800.7 million as at September 30, 2014, representing increases of 13.4% quarter-over-quarter and of 6.9% over 3Q13. The issue of bills during the period accounted to 6.4% of the total funding. FIDCs Funding raised by means of subscription of FIDC senior quotas amounted to R$ 82.0 million, representing declines of 32.8% quarter-overquarter and of 65.2% year-over-year, deriving from the amortization of quotas of closed-end funds, which was not offset by relevant inflow of investments. Subordinated debt At the close of 3Q14, the volume of subordinated debt issued by BICBANCO, by means of domestic and international funding, totaled R$ 1,024.5 million, accounting for 8.2% of the overall funding. With respect to the calculation of the Tier II Capital that integrates the Basel Index, 80% of this type of funding was accounted for as concerns that methodology. Three types of issue carry a subordinated feature: (i) subordinated CDB of R$ 200 million, issued in 2009, with maturity in 2019; (ii) subordinated Eurobonds in the amount of US$ 300 million, issued in 2010, maturing in 2020; and (iii) subordinated loan of US$ 32 million, issued in 2010, with maturity scheduled for 2017. International Funding In 3Q14, total international funding accounted for 31.3% of overall funding, amounting to R$ 3,890.5 million, representing an 8.1% increase over 2Q14 and a 6.0% fall over 3Q13. International funding comprises: (i) the funding geared to trade finance operations that provides resources for active foreign trade being raised from international banks; and (ii) funds raised by means of syndicated loans through multilateral bodies (BID, IFC, IIC, Proparco and DEG), issue of securities, transfers and subordinated debt, which provide funding for loan operations and enjoy greater maturity terms. Fluctuations in the U.S. dollar do not constitute additional risks to the institution. Fund raising intended for trade finance operations are naturally hedged by the asset operations. For the set of funding operations listed in item (ii), the Bank carries out hedge operations aimed to mitigate the risk of currency mismatch. The table below sets out the maturity schedule for the securities issued abroad (item ii), which altogether totaled US$ 894.1 million and € 3.6 million as at September 30, 2014. Maturity 2014 2015 2016 2017 2018 2019 2020 2021 Total Amount (million) $144.1 $390.4 $20.7 $45.2 $5.7 $5.7 $276.6 $5.7 $894.1 and and and and € 0.6 € 1.2 € 1.2 € 0.6 € 3.6 p. 10|18 3Q14 / 9M14 Earnings Release The tables below show the Bank’s total funding by currency & products and by maturity & class. Total funding by currency and products (R$ million) 3Q14 2Q14 3Q/2Q (%) 3Q13 3Q/3Q (%) 8,549.9 8,537.6 0.1 8,448.3 1.2 Deposits 7,221.6 7,360.4 (1.9) 7,070.5 2.1 - Time deposits 6,583.7 6,823.0 (3.5) 6,215.4 5.9 - Other deposits 637.9 537.4 18.7 855.1 (25.4) Resources from Issued Bills 800.7 705.8 13.4 749.1 6.9 - Agriculture Credit Bills (LCA) 407.7 346.7 17.6 374.6 8.8 - Financial Bills (LF) 164.8 168.6 (2.3) 264.5 (37.7) - Mortgage Bills (LCI) 228.3 190.5 19.8 110.0 n.a. Subordinated Debt 314.7 306.3 2.7 285.0 10.4 82.0 121.9 (32.8) 235.5 (65.2) 128.3 40.7 n.a. 105.6 21.5 Debentures proceeds 2.3 2.3 1.0 2.1 9.7 Proceeds from Forex notes 0.2 0.2 3.0 0.5 (56.1) Foreign currency funding 3,890.5 3,597.4 8.1 4,138.6 (6.0) 1,615.9 1,568.3 3.0 1,714.8 (5.8) International securities obligations 976.9 886.2 10.2 964.8 1.3 International onlending obligations 587.3 530.9 10.6 820.2 (28.4) Subordinated debt 709.8 612.0 16.0 638.8 11.1 0.6 - n.a. - n.a. 12,440.4 12,135.0 2.5 12,586.9 (1.2) 31.3% 29.6% 1.7 p.p. 32.9% -1.6 p.p. Local currency funding Receivables Securitization Funds - FIDCs Onlendings - Official Institutions International loans obligations Foreign currency deposits Total funding Foreign funding's share on total funding n.a. - not applicable Total funding by maturity and class (R$ million) Without maturity (*) Domestic Onlending Official Institutions Borrowings and onlending abroad Securities issued abroad Deposits Credit Bills (LCA, LF and LCI) FIDCs (Credit Receivables Investment Funds) Forex Acceptances Subordinated debt Total Funding 230.9 3.2% - - - - - - - - - - - - - - 231.0 1.9% Up to 3 months 1,125.0 15.6% 24.2 2.5% 1,050.9 47.7% - - 388.1 48.5% - - - - - - 2,588.1 20.8% From 3 to 12 months 2,598.3 36.0% 36.5 3.7% 960.8 43.6% 98.5% 335.6 41.9% 2.5 100.0% 75.6 92.2% 28.9 2.8% 4,164.5 33.5% From 1 year to 3 years 3,053.7 42.3% 916.2 93.8% 128.5 5.8% 2.0 1.5% 77.0 9.6% - - 6.4 7.8% - - 4,183.8 33.6% 116.4 1.6% - - 28.0 1.3% - - - - - - - - - - 144.4 1.1% Above 5 years 98.0 1.3% - - 35.0 1.6% - - - - - - - - 995.6 97.2% 1,128.6 9.1% Total funding 7,222.3 100.0% 976.9 100.0% 2,203.2 100.0% 128.3 100.0% 800.7 100.0% 2.5 100.0% 82.0 100.0% 1,024.5 100.0% 12,440.4 100.0% From 3 to 5 years 126.3 (*) Represented as demand and savings deposits. The Bank’s funding structure enjoys longer maturities than its loan portfolio (see chart on page 6). Loan operations as compared to funding operations, both with up to 90-day maturities, were as follows: Loan operations: R$ 3,068.5 million / Total funding: R$ 2,819.1 million. p. 11|18 3Q14 / 9M14 Earnings Release Basel index At the close of 3Q14, BICBANCO’s Basel Index stood at 14.35%, showing a 2.37 p.p. decrease quarter-over-quarter, and a 4.52 p.p. decrease year-over-year. During the quarter, this index was impacted by the Bank's operating result. Furthermore, the comparison between 2014 and 2013 has been harmed by the introduction of changes during the period. In compliance with the Brazilian Central Bank (BACEN) Resolution No. 4192, the multiplying factor has changed to 80% as of 2014 from 90% applied in 2013 over the balance of the subordinated debt. In addition, the set of regulations that carries the recommendations laid down by the Basel Committee on Banking Supervision, with regards to the capital structure of financial institutions, known as Basel III, has also included the Brazilian institutions, and came into effect as of October 1, 2013. The new rules, announced by means of Resolutions and Circulars, have laid down a set of procedures related to the compilation of minimum level requirements involving the banks' Core Capital, Level I and the Reference Equity (RE). Three independent requirements have been established for each concept of Capital (Core Capital, Level I and RE), in addition to variable supplementary amounts. The minimum requirement for the Reference Equity was maintained at 11% in October, but this is expected to change as of January 2016. Basel index (%) 19.07% 18.87% 17.54% 16.72% 14.35% 6.15% 5.81% 4.92% 4.89% 11% 5.07% 12.72% 3Q13 13.26% 4Q13 12.62% 1Q14 11.83% 2Q14 9.28% 3Q14 TIER II TIER I Remuneration to shareholders There was no distribution of dividends related the first nine months of 2014. Human resources At the close of 9M14, the Bank’s number of employees totaled 788, flat in relation to 2Q14 and up 3.8% from 3Q13. Headcount Sales Administrative Total BICBANCO Sul Financeira Consolidated Total 3Q14 2Q14 3Q/2Q (%) 3Q13 3Q/3Q (%) 219 569 788 119 907 222 566 788 118 906 (1.4) 0.5 0.8 0.1 224 535 759 116 875 (2.2) 6.4 3.8 2.6 3.7 p. 12|18 3Q14 / 9M14 Earnings Release Service outlets At the close of 9M14, the Bank had 37 service outlets, and maintained both its footprint and the regional franchise dispersion throughout the main capitals and cities in Brazil. State City Service outlet AL Maceió Maceió BA Salvador Salvador CE Fortaleza Aldeota - Bezerra - Centro Juazeiro do Norte Juazeiro do Norte DF Brasília Brasília GO Goiânia Goiânia MA São Luis São Luis MG Belo Horizonte Belo Horizonte Uberlândia Uberlândia MT Cuiabá Cuiabá PA Belém Belém PB João Pessoa João Pessoa PE Recife Recife PI Teresina Teresina PR Curitiba Curitiba Londrina Londrina RJ Rio de Janeiro Rio de Janeiro RN Natal Natal RS Porto Alegre Porto Alegre Caxias do Sul Caxias do Sul Blumenau Blumenau Chapecó Chapecó Florianópolis Florianópolis SE Aracaju Aracaju SP Barueri Alphaville Bauru Bauru Campinas Campinas Guarulhos Guarulhos Santo André ABC Santos Santos São José do Rio Preto São José do Rio Preto São Paulo Berrini - Brasil - MASP Ribeirão Preto Ribeirão Preto SC Grand Cayman 37 Service outlets p. 13|18 3Q14 / 9M14 Earnings Release Completion of the operation The unfolding of the share purchase and sale agreement of 72% of BICBANCO's capital stock executed with China Construction Bank (CCB) on October 31, 2013, taking into account that the applicable precepts and regulations concerning this operation have been fulfilled, CCB Brazil Financial Holding – Investimentos e Participações Ltda (CCB Holding), acquired BICBANCO's shareholding control on August 29, 2014. New classification of the Bank's capital stock within the Brazilian Financial System On September 18, 2014, BACEN's Board of Organization of the Financial System approved the transfer of shareholding control held by BICBANCO, including its subsidiaries to CCB, headquartered in Beijing, China. Therefore, as of the date of approval, BICBANCO has turned into a foreign-capital bank, within the scope of the Brazilian Financial System. Tender Offer - Acquisition of all shares issued by the Company On September 29, 2014, CCB Holding submitted to CVM a request for the registration of a tender offer for the acquisition of the totality of outstanding shares held by the minority shareholders of the Company, as well as to discontinue the differentiated corporate governance practices provided in the special listing segment of BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros, denominated Level 1 of Corporate Governance, in view of the process of going private. This CVM’s authorization will be requested in order to integrate such tender offer with a cancellation of registration of the Company as a issuer of securities ("Going-Private Tender Offer"), as well as a voluntary tender offer for leaving the Level 1 of Corporate Governance Practices of BM&FBOVESPA ("Delisting Tender Offer", hereafter jointly referred to as "TO"). The brokerage house Morgan Stanley Corretora de Títulos e Valores Mobiliários S.A. was hired to perform as the intermediary institution to carry out the "TO". All documentation concerning the request of registration filed with CVM, which contains the information required to carry out the "TO" operation, is currently subject to examination. A comprehensive information contained in the set of Material Facts related to the operation and the "TO", as well as the Appraisal Report, have been disclosed on CVM's website: www.cvm.gov.br, as well on the Investor Relations section of BICBANCO's website: www.bicbanco.com.br/ir. Process of price adjustment between the sellers and buyers of BICBANCO's shareholding control On October 29, 2014, CCB Holding delivered a notification letter to the former controlling shareholders of the Bank, to inform, in accordance to the terms and conditions of the share purchase and sale agreement of 72% of BICBANCO's capital stock, that the closing price practiced on the date of the transaction, should be subject to a price reduction of approximately R$ 287.766 million, corresponding to an adjusted purchase price reduction of R$ 1.58 per share. Election of the Board of Directors and the Board of Executive Officers As per the General and Extraordinary Shareholders Meeting held on September 1, 2014, the current shareholding controller appointed three new members to make up the Board of Directors, namely: Mr. Wensheng Yang, to the position of Chairman; Mr. Tiejun Chen and Mrs. Hong Yang to the post of members of the Board. The investiture of these new Board members is conditioned to the previous approval by the Brazilian Central Bank (BACEN). BICBANCO's Board of Directors has come to be composed by six members, of which three members had already composed the Board: Mr. José Bezerra de Menezes as a member, and both Mr. Heraldo Gilberto de Oliveira and Mr. Daniel Joseph McQuoid as independent members, plus the three new members, previously mentioned, who represent the controlling group. At the Board of Directors' Meeting also held on September 1, 2014, five new members of the Board of Executive Officers were elected: Mr. Tiejun Chen to take the post of President; Mrs. Xiaowei Dong and Mr. Jin Li for the positions of Executive Vice-Presidents; Mr. Zhongzu Wang and Mrs. Hong Yang to the position of Executive Directors. These new Executives shall be invested in their respective positions upon the previous approval by the Brazilian Central Bank. Thus, the Bank's Board of Executive Officers will be composed by the five executives mentioned above, alongside with the four Executives who had already held their positions: Mr. Milto Bardini as Executive Vice-President and IR Officer, Mr. Paulo Celso del Ciampo as Executive Vice-President, and Mr. Francisco Edênio B. Nobre and Mr. Carlos José Roque as Executive Directors. p. 14|18 3Q14 / 9M14 Earnings Release Ratings Following the transfer of BICBANCO's shareholding control to China Construction Bank, both the rating agencies S&P and Fitch have decided to upgrade the Bank's ratings. S&P attributed investment grade rating to the Bank, on a Global Scale, to BBB-. This is the highest investment grade among all the banks that comprise the Brazilian Financial System. Fitch Ratings upgraded the Bank's ratings on a Domestic Scale. Agencies/ consulting Rating/index Scope of activities - classification Ba1 NP Global activities - Foreign currency deposits: . Long term . Short term Ba1 NP - Local currency deposits: . Long term . Short term Aa2.br BR-1 Domestic activities - Deposits: . Long term . Short term D+ Financial strength Ba1 Ba2 Foreign currency debt . Bonds . Subordinated debt Developing Outlook BBBA-3 Global activities - counterpart rating - Foreign currency deposits . Long term . Short term BBBA-3 - Local currency deposits . Long term . Short term Moody´s Standard & Poor´s Date of publication of Rating 11/06/2013 10/01/2014 Domestic activities brAAA Stable . Long term Outlook Domestic activities Fitch Ratings AAA (bra) . Long term F1+ (bra) . Short term 09/16/2014 Stable Outlook brAA- Domestic activities . Long term domestic activities Positive Watch Outlook LF Rating AAPositive . Local currency Outlook 04/07/2014 Management & Excellence AA . Sustainability July/2014 Austin Rating 04/11/2014 Five brokers (Research) cover BICBANCO: BB Investimentos, Bofa Merrill Lynch, BTG Pactual, GBM Grupo Bursatil Mexicano and Itaú BBA. p. 15|18 3Q14 / 9M14 Earnings Release Annex I CONSOLIDATED BALANCE SHEET (R$ million) 3Q14 2Q14 3Q/2Q (%) 3Q13 3Q/3Q (%) ASSETS 90.0 303.1 (70.3) Interbank investments 1,882.8 1,064.1 76.9 680.8 n.a. Securities and derivative financial instruments 1,864.1 1,855.1 0.5 2,008.3 (7.2) 100.1 125.0 (19.9) 124.8 (19.8) 9,985.4 10,535.8 (5.2) 10,940.3 (8.7) (1,142.2) (614.9) 85.8 (466.4) 144.9 Cash and cash equivalents Interbank accounts Loan, leasing, forex-finance and other receivables Provision for loan losses 324.8 (72.3) 181.5 188.9 (3.9) 212.4 (14.5) Other assets 1,977.8 1,564.4 26.4 1,632.5 21.2 Total assets 14,939.5 15,021.5 (0.5) 15,457.5 (3.4) 7,222.3 7,360.4 (1.9) 7,070.5 2.1 6,583.7 6,823.0 (3.5) 6,215.4 5.9 638.6 537.4 18.8 855.1 (25.3) Permanent assets LIABILITIES Deposits Time deposits Other deposits 23.0 91.0 (74.7) 23.0 - Funds from acceptance and issue of securities 1,780.2 1,594.5 11.6 1,716.5 3.7 Foreign currency borrowings 1,615.9 1,568.3 3.0 1,714.8 (5.8) 715.6 571.6 25.2 925.8 (22.7) 1,027.3 980.2 4.8 924.5 11.1 82.0 121.9 (32.8) 235.5 (65.2) Subordinated debt 1,024.5 918.3 11.6 923.8 10.9 Total liabilities 13,490.8 13,206.2 2.2 13,534.4 (0.3) 1,448.7 1,815.3 (20.2) 1,923.1 (24.7) 14,939.5 15,021.5 (0.5) 15,457.5 (3.4) Money market Onlending Other liabilities Receivables Securitization Fund - FIDC Shareholders’ equity Total liabilities and shareholder’s equity n.a. - not applicable p. 16|18 3Q14 / 9M14 Earnings Release Annex II - (Adjusted Results) CONSOLIDATED STATEMENT OF INCOME (R$ million) Financial operations Income Loans operations Leasing operations 3Q14 2Q14 3Q/2Q (%) 3Q13 3Q/3Q (%) 781.8 365.1 n.a. 555.5 384.6 380.1 1.2 3.8 9.7 (61.1) 9M14 9M13 9M/9M (%) 40.7 1,498.1 1,739.2 (13.9) 403.7 (4.7) 1,128.2 1,229.3 (8.2) 17.4 (78.3) 25.1 43.9 (42.8) 58.6 65.9 (11.1) 69.3 (15.4) 192.8 81.0 n.a. Adjusted result from derivative instruments 187.5 (80.2) n.a. 24.3 n.a. 28.9 175.6 (83.5) Foreign exchange result Result from investments in marketable securities 147.1 (11.0) n.a. 40.4 n.a. 121.7 208.1 (41.5) Result from compulsory applications 0.1 0.1 - - n.a. 0.3 0.1 n.a. Financial assets sales or transfer operations 0.1 0.5 (85.7) 0.4 (82.6) 1.1 1.2 (10.1) Financial operations expenses (1,234.3) (430.6) n.a. (379.4) n.a. (1,888.6) (1,280.5) 47.5 Money market (420.3) (218.4) 92.4 (236.7) 77.6 (835.9) (783.0) 6.8 Borrowings and onlending (192.3) 32.7 n.a. (52.3) n.a. (122.8) (283.1) (56.6) (0.5) - n.a. (13.4) (96.4) (0.7) (13.4) (95.1) (621.2) (244.9) n.a. (77.0) n.a. (929.2) (201.0) n.a. Financial operations result (452.5) (65.5) n.a. 176.1 n.a. (390.5) 458.7 n.a. Other operating income (expenses) (123.6) (149.2) (17.2) (113.2) 9.3 (395.9) (334.0) 18.5 Financial assets sales or transfer operations Provision for loan losses 23.6 23.0 2.6 27.7 (14.9) 73.4 71.3 3.0 Personnel expenses (56.3) (56.1) 0.3 (47.4) 18.7 (166.8) (156.1) 6.9 Tax expenses (13.1) (14.3) (8.0) (17.8) (26.2) (42.5) (53.9) (21.2) Other administrative expenses (52.5) (46.3) 13.3 (47.4) 10.8 (148.7) (133.2) 11.7 19.0 16.1 17.8 7.8 n.a. 52.4 40.9 28.1 (44.3) (71.6) (38.2) (36.1) 22.8 (163.7) (103.0) 58.9 Banking services fees Other operating income Other operating expenses Operating result (576.1) (214.7) n.a. 62.9 n.a. (786.4) 124.7 n.a. Non-operating result (49.1) (20.7) n.a. 1.1 n.a. (69.2) (4.4) n.a. Income before taxes (625.2) (235.4) n.a. 64.0 n.a. (855.6) 120.3 n.a. Income taxes 4.3 (4.6) n.a. 4.1 6.1 (5.1) (26.4) (80.8) Social contributions 2.0 (3.3) n.a. 2.6 (21.1) (5.0) (16.7) (70.4) 265.9 100.4 n.a. (35.3) n.a. 373.6 34.0 n.a. - (7.9) n.a. - n.a. (7.9) (8.6) (8.2) (353.0) (150.8) n.a. 35.4 n.a. (500.0) 102.6 n.a. Adjusted Deferred tax credits Profit sharing Adjusted Net Result n.a. - not applicable p. 17|18 3Q14 / 9M14 Earnings Release Annex III - (Accounting) CONSOLIDATED STATEMENT OF INCOME (R$ million) Financial operations income Loans operations Leasing operations 3Q14 2Q14 3Q/2Q (%) 3Q13 3Q/3Q (%) 755.8 376.6 n.a. 505.4 384.6 380.1 1.2 3.8 9.7 (61.1) 9M14 9M13 9M/9M (%) 49.5 1,478.1 1,606.0 (8.0) 403.7 (4.7) 1,128.2 1,229.3 (8.2) 17.4 (78.3) 25.1 43.9 (42.8) 58.6 65.9 (11.1) 69.3 (15.4) 192.8 81.0 n.a. Result from derivative instruments 161.5 (68.7) n.a. (25.8) n.a. 8.9 42.4 (79.0) Foreign exchange result Result from investments in marketable securities 147.1 (11.0) n.a. 40.4 n.a. 121.7 208.1 (41.5) Result from compulsory applications 0.1 0.1 - - n.a. 0.3 0.1 (41.5) Financial assets sales or transfer operations 0.1 0.5 (85.7) 0.4 (82.6) 1.1 1.2 n.a. Financial operations expenses (1,234.3) (430.6) n.a. (379.4) n.a. (1,888.6) (1,280.5) 47.5 Money Market (420.3) (218.4) 92.4 (236.7) 77.6 (835.9) (783.0) 6.8 Borrowings and onlending (192.3) 32.7 n.a. (52.3) n.a. (122.8) (283.1) (56.6) (0.5) - n.a. (13.4) (96.4) (0.7) (13.4) (95.1) (621.2) (244.9) n.a. (77.0) n.a. (929.2) (201.0) n.a. Financial operations results (478.5) (54.0) n.a. 126.0 n.a. (410.5) 325.5 n.a. Other operating income (expenses) (123.6) (149.2) (17.2) (113.2) 9.3 (395.9) (334.0) 18.5 Financial assets sales or transfers operations Provision for loan losses 23.6 23.0 2.6 27.7 (14.9) 73.4 71.3 3.0 Personnel expenses (56.3) (56.1) 0.3 (47.4) 18.7 (166.8) (156.1) 6.9 Tax expenses (13.1) (14.3) (8.0) (17.8) (26.2) (42.5) (53.9) (21.2) Other administrative expenses (52.5) (46.3) 13.3 (47.4) 10.8 (148.7) (133.2) 11.7 19.0 16.1 17.8 7.8 n.a. 52.4 40.9 28.1 (44.3) (71.6) (38.2) (36.1) 22.8 (163.7) (103.0) 58.9 Banking services fees Other operating income Other operating expenses Operating result (602.1) (203.2) n.a. 12.8 n.a. (806.4) (8.5) n.a. Non-operating result (49.1) (20.7) n.a. 1.1 n.a. (69.2) (4.4) n.a. Income before taxes (651.2) (223.9) n.a. 13.9 n.a. (875.6) (12.9) n.a. Income taxes 4.3 (4.6) n.a. 4.1 6.1 (5.1) (26.4) (80.8) Social contributions 2.0 (3.3) n.a. 2.6 (21.1) (5.0) (16.7) (70.4) Deferred tax credits 276.3 95.8 n.a. (15.4) n.a. 381.6 87.4 n.a. - (7.9) n.a. - n.a. (7.9) (8.6) (8.2) (368.6) (143.9) n.a. 5.2 n.a. (512.0) 22.8 n.a. Profit sharing Net result (accounting) n.a. - not applicable p. 18|18
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