4Q14 / FY 2014 Earnings Release São Paulo, March 12, 2015. Banco Industrial e Comercial S.A. (BICBANCO) (BM&FBOVESPA: BICB3 and BICB4), today announced its results for the fourth quarter (4Q14) and for the fiscal year of 2014 (FY 2014). All operational and financial information contained in this Report, except where otherwise indicated, is presented in Brazilian currency (Reais - R$), on a consolidated basis, and comprises the Bank's subsidiaries and the Receivables Investment Funds (FIDCs). The financial statements herein posted comply with the rules set out by the Brazilian Central Bank (BACEN), the Brazilian Corporate Law, the technical opinions of the Accounting Pronouncement Committee (CPC), and are ruled by the Brazilian Securities and Exchange Commission (CVM). Highlights Extended Loan Portfolio R$ 12.2 bi Total Funding R$ 11.7 bi ISE 2015 Adjusted Net Result R$ -219.2 mi Acquisition of 72% of BICBANCO’s capital stock by China Construction Bank - CCB At the close of 4Q14, loan operations including guarantees and sureties came to R$ 12,247.1 million, down 0.8% from 3Q14, and down 3.8% year-over-year. Guarantees and sureties totaled R$ 2,472.2 million at the close of 4Q14, representing increases of 4.6% quarter-overquarter and of 15.2% year-over-year. The share of large corporate clients in the overall loan operations resulted in 50.8%. Total funding amounted to R$ 11,733.2 million in 4Q14, down 5.7% quarter-over-quarter and down 6.6% year-over-year. Domestic funding came to R$ 8,257.3 million, with particular emphasis on time deposits, which totaled R$ 6,038.2 million. International funding amounted to R$ 3,475.9 million, accounting for 29.6% of overall funding. For the fifth year running, BICBANCO was selected to be part of BM&FBOVESPA’s Corporate Sustainability Index (ISE), which will run until the end of 2015. BICBANCO is the only mediumsized bank that integrates this index, since its inception in 2005. In the fourth quarter of 2014, the net financial loss rose to R$ 219.2 million and to R$ 719.2 million in FY 2014. This performance has been mainly impacted by the expenses of PLLs totaling R$ 345.5 million in 4Q14 and R$ 1,274.7 million in FY 2014. On August 29, CCB Brazil Financial Holding – Investimentos e Participações Ltda. (“CCB Holding“) acquired the Bank’s shareholding control, as per the Share Purchase and Sale Agreement executed on October 31, 2013, between China Construction Bank Corporation (“CCB“) and the former controlling shareholders. Throughout 2014, many different steps and relevant events were related to the operation. Further details on the events following the completion of the purchase and sale process are shown on page 03, whereas those concerning the preceding events are shown on page 15. 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 4Q14 / FY 2014 Earnings Release Main indicators Balance sheet (R$ million) 4Q14 3Q14 4Q/3Q (%) 4Q13 Loan operations 9,774.9 Marketable securities and derivatives 4,282.9 4Q/4Q (%) 9,985.4 (2.1) 10,590.6 (7.7) 1,864.1 129.8 2,049.3 109.0 15,551.4 14,939.5 4.1 15,506.2 0.3 Time deposits 6,038.2 6,583.7 (8.3) 6,264.7 (3.6) Total deposits 6,675.7 7,222.3 (7.6) 7,048.5 (5.3) Shareholders’ equity 1,219.4 1,448.7 (15.8) 1,952.2 (37.5) 62.9% 66.8% -3.9 p.p. 68.3% -5.4 p.p. Total assets Loan operations / total assets Results (R$ million) 4Q14 3Q14 4Q/3Q (%) 4Q13 4Q/4Q (%) 2014 2013 (191.5) (452.5) (57.7) 200.9 n.a. (582.0) 659.8 n.a. 22.4 23.6 (5.2) 25.8 (13.3) 95.8 97.1 (1.3) Personnel expenses (58.5) (56.3) 3.9 (49.8) 17.3 (225.3) (206.0) 9.4 Administrative expenses (48.8) (52.5) (7.1) (51.5) (5.3) (197.5) (184.7) 6.9 (219.2) (353.0) (37.9) 44.0 n.a. (719.2) 146.6 n.a. 4Q14 3Q14 4Q/3Q (%) 4Q13 4Q/4Q (%) 2014 2013 2014/2013 (%) Adjusted financial operations result Income from services Adjusted net result Indicators (%) 2014/2013 (%) 13.6% 14.4% -0.8 p.p. 19.1% -5.5 p.p. 13.6% 19.1% -5.5 p.p. Adjusted net interest margin 4.6% 5.1% -0.5 p.p. 8.0% -3.4 p.p. 5.2% 6.3% -1.1 p.p. Shareholder Remuneration (R$ million) 4Q14 3Q14 4Q/3Q (%) 4Q13 4Q/4Q (%) 2014 2013 2014/2013 (%) - - n.a. n.a. - 52.0 n.a. 4Q14 3Q14 4Q/3Q (%) 4Q13 4Q/4Q (%) 2014 2013 2014/2013 (%) (0.8894) (1.4320) (37.9) 0.1787 (597.6) (2.9177) 0.5954 (590.0) Basel Index Interest on equity Stock Performance Earnings per outstanding share (R$) Book value per outstanding share (R$) Market price - BICB4 (R$) (*) Market cap (R$ million) (*) - 4.9469 5.8768 (15.8) 7.9293 (37.6) 4.9469 7.9293 (37.6) 5.70 7.30 (21.9) 7.40 (23.0) 5.70 7.40 (23.0) 1,417.5 1,846.2 (23.2) 2,232.0 (36.5) 1,417.5 2,232.0 (36.5) (*) 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 19. 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 4Q14 3Q14 4Q13 2014 2013 (223.2) (368.6) 38.5 (735.2) 61.3 6.6 26.0 9.7 26.6 142.8 (2.6) (10.4) (4.2) (10.6) (57.5) 4.0 15.6 5.5 16.0 85.3 (219.2) (353.0) 44.0 (719.2) 146.6 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|19 4Q14 / FY 2014 Earnings Release Economic Environment In 2014, the official inflation rate as measured by IPCA (Broad Consumer Price Index) stood at 6.41%, slightly below the 6.5% target ceiling, set by the monetary authorities. However, it was half a point above inflation rate recorded in 2013, 5.91%. The benchmark interest rate (SELIC) stood at 11.75% at the close of 2014. At a meeting held on January 21, 2015, BACEN’s Monetary Policy Committee (COPOM) raised it to 12.25%. After fluctuating considerably during the year, the exchange rate stood at R$2.66/US$ at the close of December 2014, up from R$2.34/US$ at the close of December 2013. In the year ended December 2014, Brazilian exports totaled US$225.1 billion, down 7.0% year-over-year. In turn, imports fell by 4.4%, totaling US$229.0 billion. Since the drop in imports did not offset the fall in exports, there was a trade deficit of US$3.9 billion, the largest since 1998. This deficit was mainly caused by the lower prices of commodities accounting for much of Brazil’s exports due to the slow recovery of the world economy, which led to a lower demand for these products. Another reason was the trade deficit in petroleum and petroleum products. Lending in the financial system totaled R$3.0 trillion in December 2014, up 11.3% year-over-year according to BACEN’s latest data. Lending accounted for 58.9% of the Brazilian GDP. Volume of loan operations in the Financial System (R$ billion) Sep/14 Oct/14 (*) Nov/14 (*) Dec/14 (*) Dec/Sep (%) .Individuals 766.8 772.7 773.9 785.9 2.5% .Corporations 767.5 765.9 778.3 792.9 3.3% .Directed funds 1,367.7 1,386.1 1,409.2 1,443.0 5.5% Total Credit 2,902.0 2,924.7 2,961.4 3,021.8 4.1% 57.4% 57.5% 58.0% 58.9% Total Credit / GDP (*) Preliminary data Source: Bacen Acquisition of 72% of BICBANCO’s capital stock by China Construction Bank - CCB Following the completion of the sale of the shareholding control on August 29, 2014, further stages came to reflect the actual change in the shareholding control: . New classification of the Bank's capital stock within the Brazilian Financial System. On September 18, 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, in view of the process of going private. In this application, it was requested the CVM’s authorization, aiming to integrate such tender offer, with a view for the: (i) cancellation of registration of the Company as a issuer of securities; and (ii) the voluntary tender offer for leaving the Level 1 of Corporate Governance Practices of BM&FBOVESPA ("Delisting Tender Offer", hereafter jointly referred to as "TENDER OFFER"). 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 Tender Offer. All documentation concerning the request of registration of the Tender Offer filed with CVM, which contains the information required to carry out the operation, is currently subject to examination. A comprehensive information contained in the set of Material Facts related to the operation and the Tender Offer, as well as the Valuation 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. p. 3|19 4Q14 / FY 2014 Earnings Release . 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. On November 14, 2014, the Sellers contested that Price Adjustment, by means of a notification to the Buyer. The two parties have still been discussing, aiming at a fair solution to the Price Adjustment. As at the completion of this Report, both parties had not yet reached an agreement with the Price Adjustment, neither as to a determination regarding the pending issues under discussion. Both CCB Holding and the Buyer shall inform the Bank, as soon as any material fact concerning this Operation has been brought forth. BICBANCO, in turn, shall disclose to its shareholders and the investor community on any material fact related to this tender offer, in accordance with the applicable legislation. Adjustments in 2H14 Since September 2014, the Bank has been taking a series of measures to adapt its criteria and procedures to Headquarters’ paradigms. This process involves the entire operational area, but mainly credit rating, with tighter credit standards for individual cases and industries, and a more conservative approach to the economic situation as a whole. As a result, there was a substantial rise in Provisions and coverage. The 4Q14 numbers were mainly affected by the conclusion of this process; however, they also reflect greater caution in response to a few recent developments in the industry that may have a negative impact on credit risks and the economy as a whole. The next step, the implementation of the Business Plan, will require utmost caution in view of Brazil’s economic environment. However, by being as selective as the situation requires, the Bank will be able to seize all suitable opportunities and achieve sustainable growth. p. 4|19 4Q14 / FY 2014 Earnings Release Financial operations result In 4Q14, financial operations result amounted to R$ 467,8 million, up 1.3% from 3Q14. The amount of financial operations income fell by 5.3% in 4Q14 with comparison to the previous quarter. Considering the FY 2014, the financial operations result dropped by 8.6% year-over-year. Financial operation expenses came to R$ 313.8 million in 4Q14, up 7.0% from 3Q14. PLL expenses stood at R$ 345.5 million in 4Q14, versus R$ 621.2 million in 3Q14, and R$ 58.6 million in 4Q13. The oscillations in the PLL balances during the quarterly periods in question are directly related to a number of measures taken by the new controlling shareholder as of September 2014, aimed at aligning both the Bank’s client classification policy and the applicable rating, with the Parent Company’s practices. Further information on the policy for the record of PLL may be found on the page 4 of this Report. The participation of clients from the large-corporate segment accounted for 50.8% in 4Q14, higher than the 46.2% share recorded in 3Q14 and the 40.1% in 4Q13. In 4Q14 and 3Q14, the recovery of written-off loans totaled R$ 4.2 million, and R$ 3.8 million in 4Q13. In FY 2014, the recovery of written-off loans totaled R$ 16.4 million versus R$ 94.5 million in FY 2013. Financial operations result (exchange variance*) (R$ million) Financial operations income 4Q14 3Q14 4Q/3Q (%) 4Q13 4Q/4Q (%) 467.8 461.9 1.3 488.3 (4.2) 1,881.4 1,913.0 355.3 375.2 (5.3) 406.9 (12.7) 1,486.4 1,625.7 (8.6) 4.4 3.8 15.6 13.9 (68.4) 29.5 57.8 (49.0) Marketable securities result 84.1 59.3 41.8 54.5 54.1 277.3 142.2 95.0 Foreign exchange result Loan operations Leasing operations 2014 2013 2014/2013 (%) (1.7) 20.8 21.9 (4.8) 18.2 14.5 73.3 88.1 (16.8) Exchange variance 3.1 1.5 105.3 (5.9) n.a. 13.5 (2.9) n.a. Result from compulsory applications 0.1 0.1 (1.5) - n.a. 0.3 0.1 148.1 - 0.1 n.a. 0.7 n.a. 1.1 2.0 (42.1) (313.8) (293.2) 7.0 (228.8) 37.1 (1,188.7) (993.5) 19.6 21.2 (1,046.1) (879.7) 18.9 (91.1) (31.5) Financial assets sales or transfer operations Financial operations expenses (276.7) (267.8) 3.3 (228.4) Borrowings and onlending (16.9) (17.1) (1.3) (20.6) (18.8) (62.5) Adjusted result from derivative instruments (20.2) (7.8) n.a. 20.9 n.a. (79.4) (8.6) n.a. - (0.5) n.a. (0.7) n.a. (0.7) (14.1) (95.4) 154.0 168.7 (8.7) 259.5 (40.7) 692.7 919.5 (24.7) (345.5) (621.2) (44.4) (58.6) n.a. (1,274.7) (259.7) n.a. (191.5) (452.5) (57.7) 200.9 n.a. 659.8 n.a. Money market Sales operations or financial assets transfers Financial operations result before PLL Provision for loan losses Financial operations result (582.0) 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 4Q14, net interest margin (NIM) stood at 4.6%, down 0.5 p.p. quarter-over-quarter. In FY 2014, NIM was 5.2%, down 1.1 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) 4Q14 3Q14 4Q/3Q (%) 4Q13 4Q/4Q (%) 2014 2013 2014/2013 (%) Financial operations result before PLL 154.0 168.7 259.5 692.7 919.5 Average profitable assets (*) (8.7) (40.6) (24.7) 13,489.3 13,581.3 (0.7) 13,342.5 1.1 13,417.1 14,574.5 (7.9) - Loan operations 9,731.7 10,212.2 (4.7) 10,541.8 (7.7) 10,188.6 11,504.3 (11.4) - Securities and derivatives 2,554.9 1,827.5 39.8 2,022.1 26.3 2,093.2 2,110.3 - Interbank investments 1,202.7 1,541.6 (22.0) 778.6 54.5 1,135.3 959.9 18.3 4.6% 5.1% -0.5 p.p. 8.0% -3.4 p.p. 5.2% 6.3% -1.1 p.p. Net interest margin (0.8) (*) Average figures taking into account the monthly balance for each period. p. 5|19 4Q14 / FY 2014 Earnings Release Total assets As at December 31, 2014, the Bank’s total assets amounted to R$ 15,551.4 million, representing a 4,1% increase quarter-overquarter and practically flat in comparison of R$ 15,506.2 million recorded at the end of FY 2013. Total Assets (R$ million) R$ 15.6 billion in assets, 62.9% of which refers to loan operations. 0.3% 4.1% 15,506.2 15,262.3 15,021.5 14,939.5 3,121.9 2,886.0 2,831.0 2,212.7 2,259.8 2,269.6 Loan operations The extended loan portfolio, which comprises loan operations (as set out by Resolution 2682/99), plus guarantees and sureties, amounted to R$ 12,247.1 million, down 0.8% quarter-overquarter and 3.8% year-over-year. 15,551.4 3,388.9 5,106.2 2,707.4 Extended Loan Portfolio (R$ million) 1,855.2 -3,8% 10,116.5 10,171.6 4Q13 1Q14 9,920.9 2Q14 8,843.2 3Q14 -0.8% 8,590.2 4Q14 12,736.0 12,792.2 2,145.4 Other assets Liquid Assets (highly liquid assets) Loan Operations, net of provision for loan losses 12,966.8 12,349.5 2,242.5 2,431.0 12,247.1 2,364.1 2,472.2 Liquid assets At the end of 4Q14, highly liquid assets totaled R$ 1,855.2 million, representing decreases of 31.5% quarter-over-quarter and of 16.2% year-over-year. The Bank’s Management deems the R$ 1.5-2.5 billion range for liquid assets to be satisfactory, based on the flow of maturities for both assets and liabilities operations. Liquid assets (R$ million) 4Q14 Cash & cash equivalents 175.1 Open Market investments (except FIDCs and Repurchase Agreements) 3Q14 4Q/3Q (%) 90.0 94.6 4Q13 4Q/4Q (%) 308.5 (43.2) 8.3 1,672.1 (99.5) 800.0 (99.0) 118.5 101.8 16.4 138.6 (14.5) Own portfolio negotiation (except FIDCs 1,553.3 and private securities) 843.6 84.1 965.5 60.9 2,707.4 (31.5) 2,212.7 (16.2) Investments in Interbank deposits (except for deposits for coverage of swap operations) Total 1,855.2 10,590.6 4Q13 10,549.7 1Q14 10,535.8 2Q14 9,985.4 3Q14 9,774.9 4Q14 Guarantees and sureties Loan operations The portfolio dispersion covers all geographic regions, with no concentration in any industry, economic activity and risk per client. The risk dispersion indicators, one of the Bank’s pivotal values, fell within a satisfactory range of dispersion in 4Q14. In 4Q14, the Bank did not carry out any sale or assignment of credit to other financial institutions, neither did it discontinue any businesses or products. The volume of corporate loans accounted for 87.9% of the Bank's overall loan operations in 4Q14, whereas payroll-deductible loan operations represented 8.2% of the total and personal loans, 3.9%. Retail operations are primarily conducted by the Bank's subsidiary Sul Financeira. In 4Q14, the breakdown of loan operations by economic segments was as follows: industry 40.7%, services 26.9%, commerce 14.3%, individuals 12.8%, agriculture 2.8%, financial intermediaries 0.7% , and public sector 1.8%. 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. p. 6|19 4Q14 / FY 2014 Earnings Release By segment By activity % Individuals - Individuals 12.8% Industry - Construction - Contractors 7.9% Industry - Sugar and ethanol mills 6.4% Services - Holding companies in general 5.2% Industry - Real Estate Developer 4.6% Services - Cargo and passengers transportation 3.7% Commerce - Supermarkets and wholesalers 3.5% Services - Technical and professional services 3.0% Agriculture - Agriculture 2.8% Industry - Production of pulp and paper 2.4% Industry - Metallurgical and mechanical production 2.1% Industry - Chemical and petrochemical industry 2.1% Services - Medical and dental services 1.9% Commerce - Vehicle dealerships and sale yards 1.8% Public Sector - State Government 1.8% Industry - Production of flour, pasta, cakes and cookies 1.6% Commerce - Commerce of Electronics 1.6% Industry - Fertilizers and pesticides 1.4% Services - Rental services in general 1.4% Services - Utilities 1.4% Industry - Animal slaughter and meat packing 1.3% Industry - Beverage industry 1.3% Industry - Production of pipes and iron-based items 1.2% Services - Energy distribution 1.2% Commerce - Commerce of machines and equipment 1.1% Outros Segmentos Econômicos - Other economic segments TOTAL 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. At the end of FY 2014, the largest borrower accounted for 2.3% of the total portfolio, and the 100 largest ones jointly accounted for 39.2%. Risk exposure levels 4Q14 3Q14 4Q13 Largest risk 10 largest risks 20 largest risks 50 largest risks 100 largest risks 2.27 11.67 16.73 27.65 39.25 1.82 11.17 16.22 26.60 37.30 1.44 9.78 14.60 24.33 35.24 31.1% of the loans mature in less than 90 days. The Bank’s portfolio has a short-term maturity profile, with 67.2% of the loans maturing within a year. In 4Q14, R$ 3,036.7 million of the loan operations, or 31.1% of the portfolio, had maturities of up to 90 days. The loan portfolio duration stood at 450 days (393 days in 3Q14). Breakdown by maturity (%) 1.6% 2.2% 1.8% 3.4% 4.7% 26.0% 24.1% 27.7% 28.0% 28.1% 100.0% 35.3% 38.2% 37.3% 37.9% 36.1% Cayman – 5% 37.1% 35.5% 33.2% 30.7% 31.1% 24.5% Regional dispersion (%) 4Q13 1Q14 2Q14 3Q14 4Q14 Up to 3 months From 3 to 12 months Above 1 year Installments overdue over 14 days 1% 17% 12% 49% 16% At the close of 4Q14, installments over 14 days past due totaled R$ 455.7 million, up 35.8% from the R$ 335.7 million recorded in 3Q14, and up 173.2% from the balance of R$ 166.8 million registered at the end of 2013. The ratio of installments over 14 days past due to loan operations stood at 4.7% in 4Q14 (3.4% in 3Q14 and 1.6% in 4Q13). The coverage rate of installments over 14 days past due stood at 260.0% at the close of 4Q14 (340.2% in 3Q14 and 251.2% in 4Q13). p. 7|19 4Q14 / FY 2014 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 Other credits Total loan operations Guarantees and sureties Extended loan portfolio Breakdown of loan portfolio by operational class (%) 46.9% 22.8% 12.1% 4.3% 2.6% 0.8% 10.5% Working capital Trade finance Payroll deductible loans / Personal loan Guaranteed accounts Leasing operations Machinery and heavy vehicles financing Other credits 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 4Q14, the balance of this portfolio amounted to R$ 4,588.3 million, or 46.9% of the total loan portfolio. The volume of this type of operations declined by 2.4% and 20.2% quarter-over-quarter and year-over-year respectively. 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 4Q14, trade finance operations totaled R$ 2,223.3 million, or 22.8% of the total loan portfolio. During the quarter, trade finance operations rose by 0.5% quarter-over-quarter and by 14.8% year-over-year. 4Q14 3Q14 4Q/3Q (%) 4Q13 4Q/4Q (%) 4,588.3 2,223.3 803.8 422.2 383.8 250.1 79.1 1,024.3 9,774.9 2,472.2 12,247.1 4,702.4 2,211.3 804.7 631.0 378.5 288.4 94.5 874.6 9,985.4 2,364.1 12,349.5 (2.4) 0.5 (0.1) (33.1) 1.4 (13.3) (16.3) 17.1 (2.1) 4.6 (0.8) 5,752.5 1,937.3 713.2 776.8 261.0 336.9 137.0 675.9 10,590.6 2,145.4 12,736.0 (20.2) 14.8 12.7 (45.6) 47.0 (25.8) (42.3) 51.5 (7.7) 15.2 (3.8) 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 4Q14, this type of credit accounted for 4.3% of the total loan portfolio and amounted to R$ 422.2 million, representing decreases of 33.1% and 45.6% quarter-over-quarter and year-over-year respectively. Lease operations Leasing operations, whose portfolio at present value came to R$ 250.1 million in 4Q14, dropped by 13.3% quarterover-quarter and by 25.8% year-over-year. The portfolio breakdown by type of segment was as follows: machinery & equipment: 42.1%; heavy-duty vehicles: 24.1%; aircraft: 18.9%; real estate: 14.5%; and others: 0.4%. 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 4Q14, this portfolio amounted to R$ 79.1 million, down 16.3% and 42.3% from 3Q14 and 4Q13 respectively. The portfolio breakdown by type of segment was as follows: machinery and equipment: 53.1%; heavy-duty vehicles: 40.9%; and others: 6.0%. In 4Q14, this type of credit comprised 0.8% of the overall loan portfolio. Other credits Other credits mainly comprise the modalities of Corporate Overdraft, Agribusiness Financing, Resolution 2770, Compror & Vendor, and debtors for the purchase of assets and goods. In 4Q14, this type of credit amounted to R$ 1,024.3 million, and showed rises of 17.1% and 51,5% over 3Q14 and 4Q13 respectively. At the close of 4Q14, the caption "other credits" accounted for 10.5% of BICBANCO's overall loan operations. Retail 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 4Q14, this segment accounted for 12,1% of the overall loan portfolio, totaling R$ 1,187.6 million. Operations related to this type of credit rose by 0.4% over 3Q14 and by 21.9% over 4Q13. p. 8|19 4Q14 / FY 2014 Earnings Release 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 4Q14, guarantees and sureties granted totaled R$ 2,472.2 million, up 4.6% and 15.2% quarter-over-quarter and year-over-year respectively. Loan default and provision for loan losses As previously explained, provisions for loans falling due have been significantly increased since September 2014 due to the introduction of assessment and rating metrics compatible with those adopted by the China Construction Bank Group. It is worth noting the ratio between 90-day NPLs and LLPs and the ratio between NPLs and the Total Loan Portfolio, as well as the coverage rate of NPLs over the four quarters of the year, as shown below. NPLs & LLPs (R$ million) 360.7% % in loan portfolio 342.0% 186.5% 12.1% 11.4% 121.1% 1,184.9 1,142.2 5.8% 4.1% 357.6 433.2 614.9 329.6 1Q14 NPLs 90 days 346.5 316.7 2Q14 3Q14 LLPs 4Q14 LLPs/NPLs 90 days (%) 3.4% 3.1% 3.2% 3.5% 1Q14 2Q14 3Q14 4Q14 NPLs 90 days LLPs It is clear that the adoption of a more conservative approach to the Portfolio’s risks, combined with tighter standards in the selection and assessment of new risks, will progressively help the Bank have a better-rating 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 4Q14 3Q14 2Q14 1Q14 4Q13 9,774.9 1,184.9 2,231.2 1,685.2 430.3 346.5 455.7 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 12.1% 22.8% 17.2% 4.4% 3.5% 4.7% 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% 53.1% 70.3% 275.4% 342.0% 260.0% 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% p. 9|19 4Q14 / FY 2014 Earnings Release Funding Time deposits maturity profile at the end of 4Q14 was as follows: The total volume of funds raised in 4Q14 came to R$ 11,733.2 million, showing declines of 5.7% and 6.6% in comparison with 3Q14 and 4Q13 respectively. The Bank has maintained its strategy to extend the maturity terms of its funding operations. At the close of 4Q14, the total funding featuring below 3-month maturities accounted for 20.7% of the overall funding, whereas 33.0% held over one year maturities. In 4Q14, the duration of total funding stood at 626 days, higher than the 450-day duration of loan operations. BICBANCO's healthy structure as concerns the maturity of boths 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 (%) 24.0% 40.1% 35.9% Up to 3 months From 3 to 12 months From 1 to 3 years The Bank consistently seeks to capture new depositors, aiming at increasing this type of funding, as well as diversifying its investor base, thus diluting the risk exposure. -6.6% -5.7% 12,562.9 12,284.7 3,727.4 4,069.2 1Q14 11,733.2 3,597.4 8,557.3 8,493.7 4Q13 12,135.0 12,440.4 3,890.5 8,537.6 2Q14 3,475.9 8,549.9 3Q14 8,257.3 % of time deposits 4Q14 3Q14 4Q13 Largest depositor 10 largest depositors 20 largest depositors 50 largest depositors 100 largest depositors 4.2 19.0 25.2 35.5 49.3 4.7 18.5 25.4 35.1 47.6 3.8 15.2 22.2 32.2 44.9 From the total volume of time deposits, the amount of R$ 613.8 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). 4Q14 Foreign currency funding Local currency funding Domestic Funding Time deposits In 4Q14, time deposits amounted to R$ 6,038.2 million, down 8.3% from 3Q14 and down 3.6% from 4Q13. During the quarter, the duration of time deposits stood at 467 days (514 days in 3Q14). From the total volume of time deposits, in the amount of R$ 6,038.2 million, R$ 3,057.4 million consisted of deposits with special guarantee from the Credit Guarantee Fund (DPGE). 61.3% of time deposits come from the Bank's client base corporations and individuals. Time deposit by type of depositor (%) 57.6% 38.2% 3.7% 0.5% Corporations Institutional investors Individuals Financial Institutions p. 10|19 4Q14 / FY 2014 Earnings Release Other deposits Demand, savings and inter-financial deposits totaled R$ 634.4 million at the close of 4Q14, down 0.6% quarter-over-quarter and down 19.1% 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 bills and bonds, such as the Agriculture Credit Bills (LCAs), Financial Bills (LFs) and Mortgage Bills (LCIs). Total proceeds from such issues amounted to R$ 746.3 million as at December 31, 2014, representing decreases of 6.8% quarter-over-quarter and of 13.4% over 4Q13. 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$ 74.6 million, representing declines of 8.9% quarter-overquarter and of 62.6% 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 4Q14, the volume of subordinated debt issued by BICBANCO, by means of domestic and international funding, totaled R$ 1,078.9 million, accounting for 9.2% of the overall funding. With respect to the calculation of the Tier III 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 4Q14, total international funding accounted for 29.6% of overall funding, amounting to R$ 3,475.9 million, representing an 10.7% decrease over 3Q14 and a 14.6% fall over 4Q13. Three types of issue carry a subordinated feature: (i) the funding geared to trading finance operations that provide 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$ 750.1 million and € 3.0 million as at December 31, 2014. Maturity 2015 2016 2017 2018 2019 2020 2021 Total Amount (million) $390.4 $20.7 $45.2 $5.7 $5.7 $276.6 $5.7 $894.1 and and and € 1.2 € 1.2 € 0.6 € 3.6 p. 11|19 4Q14 / FY 2014 Earnings Release The tables below show the Bank’s total funding by currency & products and by maturity & class. Total funding by currency and products (R$ million) 4Q14 3Q14 4Q/3Q (%) 4Q13 4Q/4Q (%) 8,257.3 8,549.9 (3.4) 8,493.7 (2.8) Deposits 6,672.6 7,221.6 (7.6) 7,048.5 (5.3) - Time deposits 6,038.2 6,583.7 (8.3) 6,264.7 (3.6) - Other deposits 634.4 637.9 (0.6) 783.8 (19.1) Resources from Issued Bills 746.3 800.7 (6.8) 861.9 (13.4) - Agriculture Credit Bills (LCA) 295.2 407.7 (27.6) 401.0 (26.4) - Financial Bills (LF) 169.1 164.8 2.6 271.2 (37.6) - Mortgage Bills (LCI) 282.0 228.3 23.5 189.7 48.6 Subordinated Debt 674.2 314.7 114.3 291.7 131.2 Receivables Securitization Funds - FIDCs 74.6 82.0 (8.9) 199.7 (62.6) Onlendings - Official Institutions 89.4 128.3 (30.3) 89.3 0.2 - 2.3 n.a. 2.1 n.a. Proceeds from Forex notes 0.2 0.2 3.0 0.5 (55.9) Foreign currency funding Local currency funding Debentures proceeds 3,475.9 3,890.5 (10.7) 4,069.2 (14.6) International loans obligations 1,774.3 1,615.9 9.8 1,689.6 5.0 International securities obligations 1,030.1 976.9 5.4 984.3 4.7 International onlending obligations 263.6 587.3 (55.1) 741.1 (64.4) Subordinated debt 404.7 709.8 (43.0) 654.2 (38.1) 3.2 0.6 n.a. - n.a. 11,733.2 12,440.4 (5.7) 12,562.9 (6.6) 29.6% 31.3% -1.7 p.p. 32.4% -2.8 p.p. 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 FIDCs (Credit Receivables Investment Funds) Credit Bills (LCA, LF, LCI and others) Total Funding Subordinated debt 232.4 3.5% - - - - - - - - - - - - 232.4 2.0% Up to 3 months 1,520.4 22.8% 14.1 1.4% 417.9 20.5% - - 239.6 32.1% - - - - 2,192.0 18.7% From 3 to 12 months 2,585.8 38.7% 939.6 91.2% 1,464.8 71.9% 86.3 96.5% 350.3 46.9% 64.0 85.7% 11.9 1.1% 5,502.7 46.9% From 1 year to 3 years 2,196.7 32.9% 76.4 7.4% 94.6 4.6% 3.1 3.5% 156.6 21.0% 10.6 14.3% - - 2,538.0 21.6% 2.3 0.0% - - 30.3 1.5% - - - - - - - - 32.6 0.3% Above 5 years 138.1 2.1% - - 30.4 1.5% - - - - - - 1,067.0 98.9% 1,235.5 10.5% Total funding 6,675.7 100.0% 1,030.1 100.0% 2,038.0 100.0% 89.4 100.0% 746.5 100.0% 74.6 100.0% 1,078.9 100.0% 11,733.2 100.0% From 3 to 5 years (*) Represented as demand and savings deposits. p. 12|19 4Q14 / FY 2014 Earnings Release Basel index At the close of 4Q14, BICBANCO’s Basel Index stood at 13.63%, showing a 0.72 p.p. decrease quarter-over-quarter, and a 5.44 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. 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% 17.54% 16.72% 14.35% 5.81% 4.92% 13.63% 4.89% 11% 5.07% 13.26% 4Q13 12.62% 1Q14 11.83% 2Q14 5.41% 9.28% 3Q14 8.22% 4Q14 TIER II TIER I Remuneration to shareholders There was no distribution of dividends related the FY 2014. Human resources At the close of FY 2014, the Bank’s number of employees totaled 771, representing a 2,2% decrease in relation to 3Q14 and up 2.1% from 4Q13. Headcount Sales Administrative Total BICBANCO Sul Financeira Consolidated Total 4Q14 3Q14 4Q/3Q (%) 4Q13 4Q/4Q (%) 202 569 771 117 888 219 569 788 119 907 (7.8) (2.2) (1.7) (2.1) 224 531 755 119 874 (9.8) 7.2 2.1 (1.7) 1.6 p. 13|19 4Q14 / FY 2014 Earnings Release Service outlets At the close of FY 2014, the Bank had 37 service outlets, and maintained both its footprint and the regional franchise dispersion throughout the main capitals and cities in Brazil. UF City Service outlets 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 Election of the Board of Directors and the Board of Executive Officers Board of Directors Function Date of Election End of Mandate Mr. Wensheng Yang (*) Chairman 09/01/2014 AUG 2015 Mr. Tiejun Chen (*) Member 09/01/2014 AUG 2015 Mrs. Hong Yang (*) Member 09/01/2014 AUG 2015 Mr. José Bezerra de Menezes Member 04/15/2013 AUG 2015 Mr. Heraldo Gilberto de Oliveira Independent Member 04/15/2013 AUG 2015 Mr. Daniel Joseph McQuoid Independent Member 04/15/2013 AUG 2015 (*) Under process of approval by the Brazilian Central Bank p. 14|19 4Q14 / FY 2014 Earnings Release Executive Board Function Date of Election End of Mandate Mr. Tiejun Chen (*) President 09/01/2014 1st BDM after the AGM 2016 Mr. Milto Bardini Executive Vice-President and IR Officer 05/05/2014 1st BDM after the AGM 2016 Mrs. Xiaowei Dong (*) Executive Vice-President 09/01/2014 1st BDM after the AGM 2016 Mr. Jin Li (*) Executive Vice-President 09/01/2014 1st BDM after the AGM 2016 Mr. Paulo Celso Del Ciampo Executive Vice-President and International Division Officer 05/05/2014 1st BDM after the AGM 2016 Mr. Yongdong Jiang (*) Executive Vice-President 12/11/2014 1st BDM after the AGM 2016 Mr. Zhongzu Wang (*) Executive Director 09/01/2014 1st BDM after the AGM 2016 Mrs. Hong Yang (*) Executive Director 09/01/2014 1st BDM after the AGM 2016 Mr. Francisco Edênio Barbosa Nobre Executive Director 05/05/2014 1st BDM after the AGM 2016 Mr. Carlos José Roque Executive Director 05/05/2014 1st BDM after the AGM 2016 (*) Under process of approval by the Brazilian Central Bank Summary of events preceding the sale of BICBANCO's shareholding control . Pending Approvals. On July 21, 2014, the Presidential Decree was passed, which the approved Operation, as per the terms set out in article IV of teh Constitution of the Brazilian Federal Constitution, and on July 22, 2014, the Brazilian Central Bank also approved the Operation (“Brazilian Approval”). The Chinese regulatory bodies, along with the Cayman Islands’ banking authoriries, have also approved the Operation on April 2, 2014 and on June 24, 2014, respectively (“Foreign Approvals”, which together with the “Brazilian Approval”, make up the “Required Approval”). The Brazilian Administrative Council for Economic Defense (CADE) also approved the Operation on January 9, 2014. . Shareholding restructuring. This event involved the Bank, as well as its former shareholders Gemini Holding S.A. BIC Corretora de Câmbio e Valores S.A., and Primus Holding S.A. On an economic viewpoint, a neutral treatment was taken for all the parties involved, leading to a shareholding benefit deriving from the operation, as well as streamlining of the merging those companies into a single structure. The shareholding restructuring, an essential pre-condition for this Operation, was completed on August 7, 2014, and filed with the relevant commercial bodies, containing all required shareholding acts. . Consent Solicitation. For the holders of senior notes and creditors of some international loans in which contracts a Change of Control clause is included, BICBANCO made and concluded a Consent Request. . Business plan delivered to BACEN. In January 2014, CCB submitted to the regulatory bodies, mainly BACEN, all the information (Business Plan) required to obtain approval for the Transaction. p. 15|19 4Q14 / FY 2014 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. Moody`s and S&P attributed investment grade rating to the Bank. Fitch Ratings upgraded the Bank's ratings on a Domestic Scale. Agencies/ consulting Rating/index Scope of activities - classification Baa3 P-3 Global activities - Foreign currency deposits: . Long term . Short term Baa3 P-3 - Local currency deposits: . Long term . Short term Aa1,br BR-1 Domestic activities - Deposits: . Long term . Short term D Financial strength Baa3 Ba1 Foreign currency debt . Bonds . Subordinated debt Stable 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 12/01/2014 10/01/2014 Domestic activities brAAA Stable . Long term Outlook Domestic activities Fitch Ratings AAA (bra) . Long term F1+ (bra) . Short term 02/12/2015 Stable Outlook brAA- Domestic activities . Long term domestic activities Positive Watch Outlook LF Rating AANeutral . Local currency Outlook 12/19/2014 Management & Excellence AA . Sustainability July/2014 Austin Rating 04/11/2014 p. 16|19 4Q14 / FY 2014 Earnings Release Annex I CONSOLIDATED BALANCE SHEET (R$ million) 4Q14 3Q14 4Q/3Q (%) 4Q13 4Q/4Q (%) ASSETS Cash and cash equivalents Interbank investments Securities and derivative financial instruments Interbank accounts Loan, leasing, forex-finance and other receivables Provision for loan losses 175.1 90.0 94.6 308.5 (43.2) 180.5 1,882.8 (90.4) 1,023.6 (82.4) 4,282.9 1,864.1 129.8 2,049.3 109.0 98.2 100.1 (1.9) 113.5 (13.5) 9,774.9 9,985.4 (2.1) 10,590.6 (7.7) (1,184.9) (1,142.2) 3.7 (419.0) n.a. 184.9 181.5 1.9 198.5 (6.8) Other assets 2,039.8 1,977.8 3.1 1,641.2 24.3 Total assets 15,551.4 14,939.5 4.1 15,506.2 0.3 6,675.7 7,222.3 (7.6) 7,048.5 (5.3) 6,038.2 6,583.7 (8.3) 6,264.7 (3.6) 637.5 638.6 (0.2) 783.8 (18.7) Permanent assets LIABILITIES Deposits Time deposits Other deposits Money market 1,614.6 23.0 n.a. 41.1 n.a. Funds from acceptance and issue of securities 1,776.6 1,780.2 (0.2) 1,848.8 (3.9) Foreign currency borrowings 1,774.3 1,615.9 9.8 1,689.6 5.0 Onlending 353.0 715.6 (50.7) 830.4 (57.5) Other liabilities 984.3 1,027.3 (4.2) 950.0 3.6 74.6 82.0 (8.9) 199.7 (62.6) Subordinated debt 1,078.9 1,024.5 5.3 945.9 14.1 Total liabilities 14,332.0 13,490.8 6.2 13,554.0 5.7 1,219.4 1,448.7 (15.8) 1,952.2 (37.5) 15,551.4 14,939.5 4.1 15,506.2 0.3 Receivables Securitization Fund - FIDC Shareholders’ equity Total liabilities and shareholder’s equity n.a. - not applicable p. 17|19 4Q14 / FY 2014 Earnings Release Annex II - (Adjusted Results) CONSOLIDATED STATEMENT OF INCOME (R$ million) Financial operations Income Loans operations Leasing operations 4Q14 3Q14 4Q/3Q (%) 4Q13 4Q/4Q (%) 2014 2013 2014/2013 (%) 701.5 781.8 (10.3) 680.3 3.1 2,199.5 2,419.8 362.3 384.6 (5.8) 409.1 (11.5) 1,490.5 1,638.5 (9.0) 4.4 3.8 15.6 13.9 (68.4) 29.5 57.8 (49.0) (9.1) 83.5 58.6 42.5 54.2 54.1 276.3 135.2 104.3 Adjusted result from derivative instruments 130.7 187.5 (30.3) 133.3 (2.0) 159.6 309.0 (48.3) Foreign exchange result 120.5 147.1 (18.1) 69.1 74.4 242.2 277.2 (12.7) 0.1 0.1 (1.5) - n.a. 0.3 0.1 148.1 - 0.1 n.a. 0.7 n.a. 1.1 2.0 (42.1) Result from investments in marketable securities Result from compulsory applications Financial assets sales or transfer operations Financial operations expenses (893.0) (1,234.3) (27.7) (479.4) 86.2 (2,781.5) (1,760.0) 58.0 Money market (402.7) (420.3) (4.2) (297.4) 35.4 (1,238.6) (1,080.4) 14.6 Borrowings and onlending (144.8) (192.3) (24.7) (122.7) 18.0 (267.5) (405.8) (34.1) - (0.5) n.a. (0.7) n.a. (0.7) (14.1) (95.4) (345.5) (621.2) (44.4) (58.6) n.a. (1,274.7) (259.7) n.a. Financial operations result (191.5) (452.5) (57.7) 200.9 n.a. (582.0) 659.8 n.a. Other operating income (expenses) (166.9) (123.6) 34.9 (135.6) 22.9 (562.8) (469.8) 19.8 Financial assets sales or transfer operations Provision for loan losses 22.4 23.6 (5.2) 25.8 (13.3) 95.8 97.1 (1.3) Personnel expenses (58.5) (56.3) 3.9 (49.8) 17.3 (225.3) (206.0) 9.4 Tax expenses (48.8) (52.5) (7.1) (51.5) (5.3) (197.5) (184.7) 6.9 11.7 19.0 (20.1) 34.0 (55.3) 64.1 74.9 (9.8) (79.6) (44.3) 87.6 (75.2) 10.4 (243.3) (178.3) 38.4 (358.4) (576.1) (37.8) 65.3 n.a. (1,144.8) 190.0 n.a. Banking services fees Other administrative expenses Other operating expenses Operating result Non-operating result (10.9) (49.1) (77.8) (0.7) n.a. (80.1) (5.1) n.a. Income before taxes (369.3) (625.2) (40.9) 64.6 n.a. (1,224.9) 184.9 n.a. 4.9 4.3 13.4 4.7 3.0 (0.2) (21.7) (99.0) Income taxes Social contributions Adjusted Deferred tax credits Profit sharing Adjusted Net Result 2.0 2.0 (4.4) 1.2 58.3 (3.0) (15.5) (80.6) 143.2 265.9 (46.2) (26.5) n.a. 516.8 7.5 n.a. - - n.a. - n.a. (7.9) (8.6) (8.2) (219.2) (353.0) (37.9) 44.0 n.a. (719.2) 146.6 n.a. n.a. - not applicable p. 18|19 4Q14 / FY 2014 Earnings Release Annex III - (Accounting) CONSOLIDATED STATEMENT OF INCOME (R$ million) Financial operations income Loans operations Leasing operations 4Q14 3Q14 4Q/3Q (%) 4Q13 4Q/4Q (%) 2014 2013 2014/2013 (%) 694.9 755.8 (8.1) 670.7 3.6 2,173.0 2,276.9 362.3 384.6 (5.8) 409.2 (11.5) 1,490.5 1,638.5 (9.0) 4.4 3.8 15.6 13.9 (68.4) 29.5 57.8 (49.0) (4.6) 83.5 58.6 42.5 54.2 54.1 276.3 135.2 104.3 Result from derivative instruments 124.1 161.5 (23.2) 123.6 0.4 133.1 166.1 (19.9) Foreign exchange result 120.5 147.1 (18.1) 69.1 74.4 242.2 277.2 (12.7) 0.1 0.1 (1.5) - n.a. 0.3 0.1 (12.7) - 0.1 n.a. 0.7 n.a. 1.1 2.0 148.1 Result from investments in marketable securities Result from compulsory applications Financial assets sales or transfer operations Financial operations expenses 86.2 (2,781.5) (1,760.0) 58.0 Money Market (893.0) (1,234.3) (402.7) (420.3) (27.7) (479.4) (4.2) (297.4) 35.4 (1,238.6) (1,080.4) 14.6 Borrowings and onlending (144.8) (192.3) (24.7) (122.7) 18.0 (267.5) n.a. (405.8) (34.1) - (0.5) n.a. (0.7) (0.7) (14.1) (95.4) (345.5) (621.2) (44.4) (58.6) n.a. (1,274.7) (259.7) n.a. Financial operations results (198.1) (478.5) (58.6) 191.3 n.a. (608.5) 516.9 n.a. Other operating income (expenses) (166.9) (123.6) 34.9 (135.6) 22.9 (562.8) (469.7) 19.8 Financial assets sales or transfers operations Provision for loan losses 22.4 23.6 (5.2) 25.8 (13.3) 95.8 97.1 (1.3) Personnel expenses (58.5) (56.3) 3.9 (49.8) 17.3 (225.3) (206.0) 9.4 Tax expenses (14.1) (13.1) 7.2 (18.9) (25.5) (56.6) (72.8) (22.3) Other administrative expenses (48.8) (52.5) (7.1) (51.5) (5.3) (197.5) (184.7) 6.9 11.7 19.0 (20.1) 34.0 (55.3) 64.1 74.9 (9.8) (79.6) (44.3) 87.6 (75.2) 10.4 (243.3) (178.2) 38.4 Banking services fees Other operating income Other operating expenses Operating result (365.0) (602.1) (39.4) 55.7 n.a. (1,171.3) 47.2 n.a. Non-operating result (10.9) (49.1) (77.8) (0.7) n.a. (80.1) (5.1) n.a. Income before taxes (375.9) (651.2) (42.3) 55.0 n.a. (1,251.4) 42.1 n.a. Income taxes 4.9 4.3 13.4 4.7 3.0 (0.2) (21.7) (99.0) Social contributions 2.0 2.0 (4.4) 1.2 58.3 (3.0) (15.5) (80.6) Deferred tax credits 145.8 276.3 (47.2) (22.4) n.a. 527.3 65.0 n.a. - - n.a. - n.a. (7.9) (8.6) (8.2) (223.2) (368.6) (39.4) 38.5 n.a. (735.2) 61.3 n.a. Profit sharing Net result (accounting) n.a. - not applicable p. 19|19
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