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Banco Bradesco 3Q07 Earnings Results

This presentation provides an overview of Banco Bradesco's 3Q07 earnings results, including highlights, net income, total assets, efficiency ratio, and more.

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Banco Bradesco 3Q07 Earnings Results

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  1. 3Q07 Earnings Results

  2. This presentation may contain forward-looking statements. Such statements are not statements of historical facts and reflect the beliefs and expectations of the Company's management. The words "anticipates”, "believes”, "estimates”, "expects”, "forecasts”, "plans”, "predicts”, "projects”, "targets" and similar words are intended to identify these statements, which necessarily involve known and unknown risks and uncertainties. Known risks and uncertainties include but are not limited to the impact of competitive services and pricing market acceptance of services, service transactions by the Company and its competitors, regulatory approval, currency fluctuations, changes in service mix offered, and other risks described in the Company's registration statement and other Securities and Exchange Commission filings. Forward-looking statements speak only as of the date they are made and Banco Bradesco does not undertake any obligation to update them in light of new information or future developments. 2

  3. Highlights • Net Income: R$ 5.8 billion, of which R$ 1.8 billion in Insurance, Private Pension Plans and Savings Bonds (15th quarter of consecutive growth) • ROAE*: 30.7% in 3Q07 or 32.6% in 9M07 • Total Assets: R$ 317.6 billion (+9.3% x 2Q07 and +30,6% x 3Q06) • Stockholders’ Equity: R$ 29.2 billion (+6.2% x 2Q07 and +34.2% x 3Q06) • Loan Portfolio, Sureties, Guarantees and Credit Cards totaling R$ 140.1 billion (+7.1% x 2Q07 and +27.0% x 3Q06) • Efficiency Ratio: 41.8% (10th consecutive quarter lower than 50%) • Interest on Own Capital paid and provisioned in 9M07: R$ 2.1 bilhões • Taxes and Contributions: R$ 5.1 billion (88% of Net Income) • BMC Consolidation in Sep/07 * Excludes Mark-to-Market effect of Available for Sale Securities recorded directly in the Stockholders’ Equity. 3

  4. Net Income R$ Million 3Q07 2Q07 9 M07 9 M06 Reported Net Income 1,810 2,302 5,817 3,351 Goodwill Amortization * 631 182 813 2,109 Fiscal Credit (376) (41) (417) (204) Civil Provision 126 74 200 - Bovespa Holding Disinvestment (75) - (75) - PIS Credit Recovery (51) - (51) - Serasa Disinvestment - (599) (599) - Arcelor Disinvestment - (354) (354) - Labor Provision - - - 309 Fiscal Credit (215) 237 22 (822) Subtotal of Extraordinary Events 40 (501) (461) 1,392 Adjusted Net Income 1,850 1,801 5,356 4,743 * In 2Q07 basically refers to Credifar (association with Lojas Colombo) and in 3Q07 to BMC. 5

  5. EPS, Efficiency and Net Income 5,356 4,743 1,850 1,801 1,705 1,602 1,611 1,620 1,530 1Q06 2Q 3Q 4Q 1Q07 2Q 3Q 9M06 9M07 Efficiency Ratio Net Income Earnings Per Share (R$) 3.45 3.45 3.37 3.27 3.18 3.17 3.17 3.08 2.98 44.1% 43.2% 42.4% 42.4% 42.1% 42.1% 42.0% 41.8% 41.8% R$ Million Accumulated over 12 months * In order to compare the earnings per share, stocks were adjusted accordingly to bonus and splitting. ** Reported Net Income of R$ 5,817 million in 9M07 and R$ 1,810 million in 3Q07. 4

  6. Total Assets and Stockholders’ Equity Total Assets ROAA ROAA (Adjusted Income) R$ Million Stockholders’ Equity Total Assets 36.3% 2.8% 2.9% 2.7% 32.5% 32.6% 2.5% 2.5% 30.0% 317,648 31.5% 2.0% 290,568 22.7% 29,214 243,192 27,515 21,773 Sep06 Jun07 Sep07 Sep06 Jun07 Sep07 Stockholders’ Equity ROAE* ROAE* (Adjusted Income) BIS Ratio 16.9% 16.2% 16.5% 15.7% 16.1% 14.2% 4.4% 4.9% 4.5% 4.3% 5.2% 3.8% 11.0% 12.5% 11.6% 11.6% 11.4% 11.0% 10.4% Sep06 Dec Mar07 Jun Sep07 ** Sep Tier I Tier II *Excludes MTM effect of Available for Sale Securities recorded directly in the Stockholders’ Equity ** Simulation based on Brazilian Central Bank Circular # 3,367, effective since September 12, 2007 6

  7. Unrealized Gains* R$ Million + 129% 4,492 4,175 3,877 3,214 2,627 1,822 1,782 Mar06 Jun Sep Dec Mar07 Jun Sep * The participation remained of Bovespa Holding, in the amount of R$ 722 million is not included (of which R$ 178 million occurred in oct/07). 7

  8. Net Income Breakdown 9M07 9M06 3Q07 2Q07 - Fees 30% 28% 29% 26% - Credit 25% 24% 25% 22% - Securities 9% 11% 9% 11% - Funding 6% 6% 6% 8% Banking 70% 69% 69% 67% Insurance 30% 31% 31% 33% 8

  9. Income Statement Summary R$ Million Variation % 3Q07 2Q07 9M07 9M06 Q–o-Q Y-o-Y Net Interest Income 5,580 5,704 16,303 14,793 (2.2) 10.2 Allowance for Loan losses (1,438) (1,344) (3,942) (3,223) 7.0 22.3 Gross intermediation Income 4,142 4,360 12,361 11,570 (5.0) 6.8 Insurance, Pension Plans, Saving Bonds 208 116 565 681 79.3 (17.0) Fee Income 2,742 2,609 7,910 6,474 5.1 22.2 Personnel and Administrative Expenses (3,395) (3,293) (9,688) (8,671) 3.1 11.7 Tax Expenses (599) (582) (1,766) (1,573) 2.9 12.3 Other Operating Income/Expenses (639) (799) (2,231) (1,994) (20.0) 11.9 Operating Income 2,459 2,411 7,151 6,487 2.0 10.2 Non-Operating Income 1 5 3 20 (80.0) (85.0) IT & SC and Minority Interest (610) (615) (1,798) (1,764) (0.8) 1.9 Adjusted Net Income 1,850 1,801 5,356 4,743 2.7 12.9 Extraordinary Events (40) 501 461 (1,392) Reported Net Income 1,810 2,302 5,817 3,351 (21.4) 73.6 9

  10. NIM & NII 15.6% 12.1% 8.9% 11.9% 7.5% 11.5% R$ Million 8.2% 16,303 7.5% 14,793 1,905 1,629 • volume= 2,983 14,398 13,164 5,704 5,580 • spread=(1,749) 874 622 • volume= 311 4,958 4,830 • spread= (183) 9M06 9M07 2Q07 3Q07 Non Interest Average Selic Interest NIM 10

  11. 10.0% 9.7% 9.6% 9.4% 9.4% 9.1% 8.9% 8.6% 8.6% 8.5% 8.3% Adjusted NII & NIM 8.6% 8.3% 8.3% 8.0% 7.8% 7.8% 7.5% 7.3% 7.0% 6.9% 6.7% 4,958 R$ Million 4,830 4,608 4,502 4,549 4,340 4,275 4,230 3,993 3,660 3,247 1Q05 2Q 3Q 4Q 1Q06 2Q 3Q 4Q 1Q07 2Q 3Q NII - Interest NIM – Interest / Average Total Assets NIM – Interest / Average Total Assets – Repos – Fixed Asset 11

  12. Adjusted Net Interest Income R$ Million Variation % Q-o-Q Y-o-Y 3Q07 2Q07 9M07 9M06 - Credit 3,384 3,183 9,592 7,866 6.3 21.9 - Funding 556 556 1,659 1,988 0.0 (16.5) - Insurance 486 621 1,649 1,867 (21.7) (11.7) - Securities 183 179 594 285 2.2 108.4 - Others 349 291 904 1,158 19.9 (21.9) Net Interest Income 4,958 4,830 14,398 13,164 2.7 9.4 12

  13. Credit NII** R$ Million 3,384 3,183 3,025 2,951 2,734 2,654 2,478 2,376 2,135 2,037 1,984 1,984 1,975 1,884 1,866 1,711 1,740 1,732 1,668 1,611 1,539 1,304 1,347 1,199 1,067 1,050 994 943 867 644 562 467 445 1Q05 2Q 3Q 4Q 1Q06 2Q 3Q 4Q 1Q07 2Q 3Q Risk Adjusted Margin Net Margin Net Allowances (*) * Allowances for Loan Losses (+) Recoveries (-) Discounts ** Credit Operation Fee not included 13

  14. Loan Portfolio (*) R$ Million Variation % Sep07 Jun07 Sep06 Q-o-Q Y-o-Y Individuals 54,383 49,832 42,305 9.1 28.5 Large Corporate 48,331 47,105 40,018 2.6 20.8 SMEs 37,379 33,882 27,974 10.3 33.6 Total 140,093 130,819 110,297 7.1 27.0 * Includes sureties and guarantees and credit cards receivables(payments in cash and installments). 14

  15. Credit Composition – Corporate Sep07 Jun07 Sep06 Q-o-Q Y-o-Y Working Capital 10,589 9,546 7,264 10.9 45.8 BNDES Onlendings 9,740 9,354 7,735 4.1 25.9 Operations Abroad 8,294 7,747 5,832 7.1 42.2 Overdraft Accounts 7,284 7,428 5,907 (1.9) 23.3 Export Financing 6,976 6,635 5,928 5.1 17.7 Credit Card 3,327 3,249 2,482 2.4 34.0 Leasing 4,098 3,433 2,732 19.4 50.0 Vehicles 3,171 3,031 2,882 4.6 10.0 Agriculture 3,168 2,692 2,540 17.7 24.7 Mortgage 1,362 1,193 728 14.2 87.1 Sureties and Guarantees 18,162 17,065 13,632 R$ Million Variation % 6.4 33.2 Others 9,539 9,614 10,330 (0.8) (7.7) TOTAL 85,710 80,987 67,992 5.8 26.1 15

  16. Credit Composition – Individuals R$ Million Variation % Sep07 Jun07 Sep06 Q-o-Q Y-o-Y Vehicles 19,556 18,192 15,762 7.5 24.1 Personal Loans 7,016 6,872 6,446 2.1 8.8 Credit Card 7,230 6,962 4,468 3.8 61.8 Payroll Loan 5,608 4,489 3,958 24.9 41.7 BNDES Onlendings 3,060 2,970 2,827 3.0 8.2 Agriculture 2,684 2,168 1,758 23.8 52.7 Overdraft Accounts 1,960 1,939 1,846 1.1 6.2 Mortgage 1,404 1,239 1,002 13.3 40.1 Sureties and Guarantees 308 260 188 18.5 63.8 Others 5,557 4,741 4,050 17.2 37.2 TOTAL 54,383 49,832 42,305 9.1 28.5 16

  17. Asset Quality % 7.9 7.9 7.7 7.6 7.5 7.2 6.9 7.0 6.8 6.7 6.6 6.6 6.5 6.5 6.4 6.4 6.3 6.3 6.2 6.2 6.2 R$ 1.1 bi 6.1 6.0 5.9 5.8 5.7 5.6 5.6 5.5 5.5 5.4 R$ 2.4 bi 5.4 5.1 5.1 5.1 5.0 4.9 4.9 4.6 4.6 4.5 4.4 4.4 4.3 4.3 4.2 4.1 4.3 4.3 3.8 3.8 3.9 4.1 4.3 3.6 3.5 4.0 3.4 3.9 3.8 3.3 3.3 3.7 3.2 3.7 3.2 3.3 3.3 2.9 3.0 2.7 2.7 1Q03 2Q 3Q 4Q 1Q04 2Q 3Q 4Q 1Q05 2Q 3Q 4Q 1Q06 2Q 3Q 4Q 1Q07 2Q 3Q Total Allowances / Loan Portfolio Required Allowances / Loan Portfolio E-H Past Dues / Loan Portfolio 12 Months Charge offs / Loan Portfolio 17

  18. Delinquency Ratio > 90 days % 6.3 6.2 6.2 6.1 5.8 5.4 4.8 4.4 4.1 3.6 3.6 3.6 3.5 3.4 3.4 3.1 2.7 3.4 2.6 3.4 3.3 3.2 3.1 3.1 2.9 2.6 2.5 0.5 0.5 0.5 0.5 0.2 0.2 0.1 0.1 0.1 Sep05 Dec Mar06 Jun Sep Dec Mar07 Jun Sep Individuals Total Large Corporate SMEs 18

  19. Payroll Deductible Loans R$ Million Variation % Sep07 Jun07 Sep06 Q-o-Q Y-o-Y 4,204 90.8 Own Origination (*) 3,160 2,203 33.0 1,404 (20.0) Acquired from Others 1,329 1,755 5.6 24.9 41.7 TOTAL 5,608 4,489 3,958 * Including BMC 19

  20. Monthly Production BMC 257.0 233.1 212.8 201.6 189.1 134.5 159.2 152.1 132.9 102.3 105.4 114.8 111.6 112.9 109.6 106.4 94.3 86.3 86.6 67.2 76.6 69.3 78.5 73.2 57.6 37.8 R$ Million 29.4 29.0 31.1 33.2 42.3 65.8 64.9 76.2 96.2 100.2 122.5 110.5 38.2 Sep06 Oct Nov Dec Jan07 Feb Mar Apr Mai Jun Jul Aug Sep Public Retirement Pension Plans (INSS) Other Agreements 20

  21. Mortgage R$ Million Origination (# of Homes) Origination 10,833 873 671 1,205 7,342 5,487 76.9% 77.7% 78.1% 23.1% 22.3% 21.9% 3Q06 2Q07 3Q07 3Q06 2Q07 3Q07 Individuals Builders Annual Origination Portfolio Mix 3,000 1,834 2,412 2,816 2,747 2,139 2,000 1,205 43.7% 49.4% 50.0% 3Q 2Q 873 56.3% 50.6% 50.0% 1Q 669 2006 2007 3Q06 2Q07 3Q07 Annual Goal Realized Individuals Builders 21

  22. Fee Income R$ Million Variation % 3Q07 2Q07 9M07 9M06 Q-o-Q Y-o-Y Checking Accounts 591 583 1,748 1,537 1.4 13.7 Cards 623 581 1,761 1,217 7.2 44.7 Credit Operations 504 468 1,413 1,132 7.7 24.8 Asset Management 376 345 1,055 936 9.0 12.7 Collection 280 277 831 740 1.1 12.3 Interbank Fees 81 79 236 213 2.5 10.8 Consortium 61 57 171 144 7.0 18.8 Custody 36 33 99 79 9.1 25.3 Brokerage 28 24 71 37 16.7 91.9 Others 162 162 525 439 - 19.6 TOTAL 2,742 2,609 7,910 6,474 5.1 22.2 22

  23. Operational Expenses R$ Million Variation % 3Q07 2Q07 9M07 9M06 Q-o-Q Y-o-Y 2.8 - Structural1 (1,407) (1,369) (4,041) (3,824) 5.7 - Non Structural (233) (280) (708) (648) (16.8) 9.3 Personnel (1,640) (1,649) (4,749) (4,472) (0.5) 6.2 Administrative (1,755) (1,644) (4,939) (4,199) 6.8 17.6 Total (3,395) (3,293) (9,688) (8,671) 3.1 11.7 Operational Expenses2/ Total Assets 4.0% 4.3% 4.0% 4.7% 1 Union Agreement: 9M07 R$ 60 million; 9M06 R$ 87 million 2 12 months Accumulated 23

  24. Coverage Ratio * R$ Million 12,819 12,515 12,066 11,802 11,471 11,135 10,776 10,454 10,226 10,334 9,935 9,417 8,898 8,484 8,059 7,728 7,349 7,014 80.6% 79.4% 78.0% 75.4% 74.0% 72.4% 71.7% 70.3% 68.6% 3Q05 4Q 1Q06 2Q 3Q 4Q 1Q07 2Q 3Q Personnel and Administrative Expenses (1) Fee Income (2) Coverage Ratio (2/1) *Accumulated over 12 months 24

  25. Funding R$ Million Variation % Sep07 Jun07 Sep06 Q-o-Q Y-o-Y Demand Deposits 22,825 21,604 17,889 5.7 27.6 Savings Deposits 30,231 28,406 25,415 6.4 18.9 Time Deposits + Debentures 63,231 56,893 55,123 11.1 14.7 Subordinated Debt 13,441 13,203 11,767 1.8 14.2 Total 129,728 120,106 110,194 8.0 17.7 Fixed Income 146,258 144,292 128,891 1.4 13.5 Equities 14,827 11,968 6,018 23.9 146.4 Third Party Funds 6,501 5,021 5,313 29.5 22.4 Asset Management 167,586 161,281 140,222 3.9 19.5 25

  26. Insurance and Pension Plans R$ Million Income Statement Summary Variation % Q-o-Q Y-o-Y 3Q07 2Q07 9M07 9M06 Insurance Written Premiums, Pension Plan Contribution and Saving Bonds Income 5,448 5,055 15,304 13,360 7.8 14.6 Insurance Realized Premiums, Pension Plan Contribution and Saving Bonds Income 2,825 2,745 8,513 8,607 2.9 (1.1) Financial Net Income 681 906 2,223 2,043 (24.8) 8.8 Other Operating Income 200 181 649 396 10.5 63.9 Retained Claims (1,488) (1,503) (4,419) (4,475) (1.0) (1.3) - - Raffle/Benefits and Redemptions (854) (865) (2,733) (2,698) (1.3) 1.3 (262) (796) (763) 4.6 4.3 Commercial Expenses (274) General and Administrative Expenses (301) (276) (817) (748) 9.1 9.2 Other Operating Expenses 42 10 (65) (140) 320.0 (53.6) Tax Expenses (51) (44) (155) (135) 15.9 14.8 Special Health Provision ( * ) (386) 780 892 2,014 2,087 (12.6) (3.5) Operating Income - Equity Result 51 69 192 126 (26.1) 52.4 Non-Operating Income (2) (6) 391 101 (66.7) 287.1 (281) (259) (824) (723) 8.5 14.0 IT/SC and Minority Interest 548 696 1,773 1,591 (21.3) 11.4 NET INCOME (*) Will be considered as Operating Income only after the approval of ANS (Brazilian National Health Agency) 26

  27. Written Premiums, Contributions and Saving Bonds Income R$ Million Variation % Q-o-Q Y-o-Y 3Q07 2Q07 9M07 9M06 2,966 2,764 8,421 6,892 7.3 22.2 Life and Pension Plans 1,066 1,061 3,135 2,885 0.5 8.7 Health (Group and Individual) 1,022 828 2,609 2,565 23.4 1.7 Auto and P&C 394 402 1,139 1,018 (2.0) 11.9 Saving Bonds Total (*) 5,448 5,055 15,304 13,360 7.8 14.6 5.1 31.6 8,885 8,450 8,885 6,752 Stockholders’ Equity ROAE 33 % 44 % 33% 35% * Includes effective and not written premiums 27

  28. 55,319 52,900 45,719 Sep06 Jun07 Sep07 21,091 18,489 7,133 7,387 9M06 9M07 2Q07 3Q07 Insurance, Pension Plans and Saving Bonds R$ Million Financing Assets Technical Provisions 64,618 61,943 52,445 Sep06 Jun07 Sep07 Insurance, Pension Plans and Saving Bonds Revenues 28

  29. Technical Provisions Health 3,007 2,744 1,798 Sep06 Jun07 Sep07 Auto / P&C 2,379 2,277 2,270 Sep06 Jun07 Sep07 R$ Million Life and Pension Plan / VGBL 47,515 45,523 39,363 Sep06 Jun07 Sep07 Saving Bonds 2,418 2,363 2,281 Sep06 Jun07 Sep07 29

  30. Insurance Group Efficiency Ratio* 5.6 5.5 5.5 5.3 9M06 9M07 2Q07 3Q07 % * Operating Expenses / Revenues (%) 30

  31. Combined Ratio* % 92.2 87.7 85.8 84.4 9M06 9M07 2Q07 3Q07 ( * ) Excluding Additional Provisions. 31

  32. Macroeconomic Outlook 2007 2008 GDP 4.9 % 4.4 % Interest Rate (Year-End Selic) 11.25 % 10.25 % Inflation (CPI) 3.70 % 3.80 % FX Rate (R$/US$) 1.75 1.75 32

  33. Bradesco Guidance 2007 Loan Portfolio 21-27% Individuals 25-30% Corporate 19-24% Fee Income 18-23% Net Interest income 4-10% Operational Expenses 12-16% Insurance Premiums 12-14% 33

  34. 3Q07 Earnings Results

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