Financial Statements September 30, 2011 and 2010

, Banco Votorantim S.A. Financial Statements September 30, 2011 and 2010 (A free translation of the original report in Portuguese containing financ...
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Banco Votorantim S.A.

Financial Statements September 30, 2011 and 2010 (A free translation of the original report in Portuguese containing financial statements prepared in accordance with accounting practices adopted in Brazil applicable to financial institutions authorized to operate by the Central Bank of Brazil)

Banco Votorantim S.A. Financial statements September 30, 2011 and 2010

Contents Independent auditors' report on the review of consolidated financial statements Consolidated balance sheets Consolidated statements of income Statements of changes in shareholders' equity Consolidated statements of cash flows Consolidated statements for added value Notes to the consolidated financial statements

Independent auditors' report on the review of quarterly consolidated financial statements To The Board of Directors and Shareholders of Banco Votorantim S.A. São Paulo - SP

Introduction We have reviewed the consolidated balance sheet of Banco Votorantim S.A. as of September 30, 2011 and the related consolidated statements of income, changes in shareholders’equity and cash flows for the nine months period then ended, as well as the summary of significant accounting policies and other explanatory notes, which are the responsibility of its Management. Our responsibility is to express a conclusion on these consolidated financial statements based on our review. The Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting practices adopted in Brazil, applicable to financial institutions authorized to operate by the Central Bank of Brazil. Our responsibility is to express a conclusion on this consolidated financial statements based on our review. Scope of review We conducted our review in accordance with the Brazilian and international review standards for interim information (NBC TR 2410 – Review of Interim Financial Information Performed by the Independent Auditor of the Entity and ISRE 2410 – Review of Interim Financial Information Performed by the Independent Auditor of the Entity, respectively). A review of interim information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believe that the accounting information contained in the consolidated financial statements referred above were not prepared, in all material aspects, in accordance with accounting practices adopted in Brazil, applicable to financial institutions authorized to operate by the Central Bank of Brazil. Other matters We also reviewed the consolidated statement of added value for the nine months period ended September 30, 2011, presented as supplemental information. The accounting information contained in this statement was submitted to the same review procedures described in paragraph

of review scope and, based on the adoption of these review procedures, we are not aware of any facts that would lead us to believe that the accounting information was not presented in conformity with the consolidated financial statements referred to in the introduction paragraph, taken as a whole. São Paulo, November 3, 2011 KPMG Auditores Independentes CRC 2SP014428/O-6 Original report in Portuguese signed by Alberto Spilborghs Neto Accountant CRC 1SP167455/O-0

Luciana Liberal Sâmia Accountant CRC 1SP198502/O-8

Banco Votorantim S.A. Consolidated balance sheets at September 30, 2011 and 2010 (In thousands of Reais) Assets Current assets Cash Interbank investments Money market repurchase agreements Interbank deposits Foreign currency investments

2011

2010

79,135,402

71,960,289

124,913

156,334

17,304,266

19,532,336

15,435,644 1,414,463 454,159

17,874,010 1,630,499 27,827

20,185,320

20,227,534

9,675,500 6,957,654 1,394,869 2,157,297

8,633,466 4,849,713 1,137,583 5,606,772

6,254,077

4,544,730

1,709 6,117,134 134,939 295

859 4,465,733 71,052 7,086

31

-

Liabilities Current liabilities Deposits Demand deposits Interbank deposits Time deposits Other deposits Money market repurchase agreements

Securities and derivative financial instruments Own portfolio Subject to repurchase agreements Derivative financial instruments Subject to guarantees provided Interbank investments Payments and receivables to be settled Brazilian Central Bank deposits Interbank repasses Correspondent Interbank investments Third-party funds in transit Loan operations

31

-

24,992,477

18,858,695

26,539 26,376,058

82,959 19,655,613

(1,410,120)

(879,877)

3,112,419

1,273,758

4,489,553 (1,288,588)

2,186,906 (870,697)

(88,546)

(42,451)

6,855,138

7,269,847

2,336,270 140,252 2,215,889 2,210,143

5,314,301 15,974 173,910 1,796,677

Own portfolio Third-party portfolio Free portfolio Acceptances and endorsements Funds from housing bonds, mortgage notes, letters of credit and alike Debenture funds Securities issued abroad Interbank investments Unsettled payables and receivables

Lease operations Lease receivable - Private sector Unearned income from leasing Allowance for losses on lease operations Other receivables Foreign exchange portfolio Income receivable Securities Clearing Accounts Other Allowance for other doubtful accounts Other assets

(47,416)

(31,015)

306,761

97,055

89,883 216,878

80,322 16,733

Long-term assets

44,960,919

39,977,054

Interbank investments

338,257

888,819

Securities and derivative financial instruments

338,257

5,848,315

2,664,016 2,662,961 847,514 1,045,762

2,092,653 2,366,302 783,986 605,374

Loan operations

32,079,771

27,550,361

Public sector Private sector Allowance for loan losses

25,645 33,057,815

50,974 28,028,744

(1,003,689)

(529,357)

397,099

3,067,837

2,211,104 (1,707,805)

5,287,310 (2,160,471)

Lease operations Lease receivable - Private sector Unearned income from leasing Allowance for losses on lease operations

4,645,185

4,281,762

Derivative financial instruments

4,645,185

4,281,762

6,438,502

10,038,632

32,069 2,095,934 203,389 2,374,383 263,208 34,436 1,435,083

29,323 5,221,740 232,270 1,464,314 312,348 1,413,094 1,365,543

33,658,743

29,421,309

4,715,984

5,351,760

22,498 4,693,486

50,970 5,300,790

3,807,920

1,113,995

3,779,888 28,032

1,108,561 5,434

11,099,924

8,415,600

4,958,536 400 6,140,988

3,572,754 3,061,465 1,781,381

Liabilities from borrowings and repass

5,644,855

5,489,537

Foreign borrowings Local onlendings - Official institutions National Treasury BNDES FINAME

1,855,769 3,789,086 21,000 1,830,322 1,937,764

965,178 4,524,359 14,999 2,931,333 1,578,027

Derivative financial instruments

679,668

2,356,001

Derivative financial instruments

679,668

2,356,001

7,710,392

6,694,416

954,319 6,677,859 78,214

1,512,572 936 5,142,827 38,081

32,309

37,549

Other liabilities Collection and levy of taxes and alike Foreign exchange portfolio Social and statutory Tax and social security Securities Clearing Accounts Subordinated debts Other

Deposits Interbank deposits Time deposits

Own portfolio Third-party portfolio Free portfolio Acceptances and endorsements Funds from housing bonds, mortgage notes, letters of credit and alike Debenture funds Securities issued abroad

287,960 287,960

Deferred income

Permanent assets

242,785

193,204

Interest of non-controlling shareholders

Investments

65,354

58,494

340 65,014

58,494

Intangible assets Accumulated amortization Deferred assets Organizational and expansion expenses Accumulated amortization Total assets See the accompanying notes to the financial statements.

9,778

Derivative financial instruments

5,108 1,297,841

Intangible assets

10,381

21,472 3,878,257 1,909,004 30,393 1,041,062 837,549

1,302,949

Other property for use Accumulated depreciation

619,157 634,824

5,808,733

8,262 2,325,500

Fixed assets for use

1,253,981

3,210,659 3,348,592 233,479

3,515,783 3,489,804 122,337 2,042,710 1,324,757

2,333,762

Ownership interest in Brazilian subsidiaries Other investments

6,792,730

7,005,587

Borrowings in local currency - Other institutions Foreign borrowings Onlending in the country - Official institutions National Treasury BNDES FINAME

3,622,590

Other assets Prepaid expenses

24,243,161 8,218,870 1,617,200

40,745 -

3,622,590

Other assets

34,079,231

26,158,549 8,696,773 1,860,160

72,432 1

Third-party funds in transit Internal funds transfer

(59,002)

Securities Clearing Accounts Other

36,715,482

9,778

(106,200)

Other receivables

376,890 720,436 17,786,474 240

888,819

7,220,253

Own portfolio Subject to repurchase agreements Derivative financial instruments Subject to guarantees provided

18,884,040

379,299 2,170,436 17,699,762 103

40,745

Money market repurchase agreements Interbank deposits

20,249,600

72,433

Interbank investments

Long-term liabilities Other assets Prepaid expenses

2010 74,396,902

10,381

Liabilities from borrowings and repass Public sector Private sector Allowance for doubtful accounts

2011 81,929,900

109,756

71,764

191,064 (81,308)

133,744 (61,980)

35,688

17,614

41,832 (6,144)

19,990 (2,376)

31,987

45,332

43,507 (11,520)

82,541 (37,209)

124,339,106

112,130,547

Other liabilities Tax and social security Securities Clearing Accounts Subordinated debts Other

Quotaholders' equity Subscribed Domestic Capital reserves Profit reserves Equity evaluation adjustments Retained Earnings

Total liabilities

59

59

8,718,095

8,274,728

4,026,841 585,104 3,861,317 (55,020) 299,853

3,994,896 617,049 3,086,397 (27,806) 604,192

124,339,106

112,130,547

Banco Votorantim S.A. Consolidated statements of income Period from January 1st to September 30th, 2011 and 2010 (In thousands of Reais, except net income for the period per thousand shares)

Financial operations income Loan operations Lease operations Securities income Derivative financial instruments Foreign exchange income Compulsory investments Financial intermediation expenses Money market repurchase agreements Loans, assignments and repasses Lease operations Allowance for doubtful accounts Gross income from financial intermediation Other operating income/ (expenses) Service fee income Income from bank fees Personnel expenses Other Administrative Expenses Tax expenses Equity in income of associated companies and subsidiaries Other operating income Other operating expenses Operating income Non-operating income Income before taxes on taxable income and profit sharing Income and social contribution taxes Provision for income tax Provision for social contribution payable Deferred tax assets Statutory profit sharing Net income before minority interest Interest of non-controlling shareholders Net income (loss) for the period Net income (loss) per thousand shares - R$ See the accompanying notes to the financial statements.

2011

2010

14,150,629

9,929,438

8,194,307 1,628,601 4,090,880 (363,318) 95,464 504,695

6,073,126 2,008,376 3,109,107 (1,498,628) 37,516 199,941

(12,191,492)

(7,367,529)

(7,910,932) (784,416) (1,250,105) (2,246,039)

(4,516,520) (134,627) (1,522,705) (1,193,677)

1,959,137

2,561,909

(1,321,139)

(1,081,802)

318,364 640,242 (649,541) (1,134,731) (473,272) (262) 215,875 (237,814)

407,373 567,215 (550,817) (1,009,622) (411,290) 47,529 (132,190)

637,998 9,718 647,716

1,480,107 (27,126) 1,452,981

78,135

(402,132)

(201,376) (254,109) 533,620

(663,677) (225,309) 486,854

(270,578)

(307,604)

455,273

743,245

(2)

5

455,271

743,250

5.58

9.12

Banco Votorantim S.A. Statements of changes in shareholders' equity Period from January 1st to September 30, 2011 and 2010 (In thousands of Reais)

Capital Realized capital Balances at December 31, 2009 Paid-up capital

Profit reserves Capital increase

Capital reserves

Legal

Expansion

Tax incentives

Equitv evaluation adjustment (76,664)

3,544,896

-

617,049

343,821

2,716,341

-

Retained earnings

Total

-

7,145,443 450,000

450,000

-

-

-

-

-

-

-

Equity evaluation adjustments

-

-

-

-

-

-

48,858

-

48,858

Net income

-

-

-

-

-

-

-

743,250

743,250

Distribution of net income: Legal reserve Fiscal incentive reserve Dividends and interest on own capital

-

-

-

23,875 -

-

2,360 -

-

(23,875) (2,360) (112,823)

(112,823)

Balances at September 30, 2010

3,994,896

-

617,049

367,696

2,716,341

2,360

(27,806)

604,192

8,274,728

Balances at December 31, 2010

3,994,896

31,945

585,104

394,583

3,439,705

-

(57,356)

-

8,388,877

31,945

(31,945)

-

-

-

-

-

-

-

Capital increase Equity evaluation adjustments

-

-

-

-

-

-

2,336

-

2,336

Net income

-

-

-

-

-

-

-

455,271

455,271

Distribution of net income: Legal reserve Dividends and interest on own capital

-

-

-

27,029 -

-

-

-

(27,029) (128,389)

(128,389)

4,026,841

-

585,104

421,612

3,439,705

-

299,853

8,718,095

Balances at September 30, 2011

(55,020)

Banco Votorantim S.A. Consolidated statements of cash flows Period from January 1st to September 30, 2011 and 2010 (In thousands of Reais) Cash flows originating from operations Net income Adjustments to net income Depreciation and amortization Allowance for doubtful accounts Provision for loss in investments Provision for contingent liabilities/legal obligations Non-operating income Minority interest Equity variations Interbank investments Securities and derivative financial instruments Interbank accounts and investments Loans and lease operations Other receivables Other assets Other liabilities Deferred income Equity evaluation adjustment - securities available for sale Cash generated (consumed) by operations Cash flows from financing activities Deposits Money market repurchase agreements Acceptances and endorsements Liabilities from borrowings and repass Capital increase Dividends and bonuses paid Interest of non-controlling shareholders Subordinated debts Net cash generated in financing activities

2011

2010

455,271

743,250

2,428,463

1,495,901

29,497 2,246,039 162,645 (9,718) -

20,805 1,193,677 12,901 295,649 (27,126) (5)

(497,459) (3,338,708) 107,086 (8,000,225) (4,931,002) (989,733) 775,191 (9,451) 2,336

(2,736,207) (7,842,932) (4,438,395) (11,236,529) (6,020,598) 48,128 6,162,796 2,630 48,858

(13,998,231)

(23,773,098)

1,367,128 6,143,482 7,594,523 1,395,962 (128,301) (191,967)

(241,621) 10,425,758 3,399,088 3,995,515 450,000 (190,421) 36 2,189,100

16,180,827

20,027,455

Cash flows from investment activities Sales of investments Sale of fixed assets for use and lease property Disposal of deferred assets Disposal of intangible assets Acquistion of fixed assets for use and leases Investment acquisition Deferred charges Investments in intangible assets Investment subsidy Dividends and bonuses received

2,813 273 813 (39,734) (340) (18,722) (10,253) -

(12,251) 810 229 428 (25,216) (10,351) (14,288) (17,813) -

Net cash generated (consumed) in investment activities

(65,150)

(78,452)

2,117,446

(3,824,095)

1,496,890 3,614,336

9,119,278 5,295,183

2,117,446

(3,824,095)

Net variation of cash and cash equivalents Cash and cash equivalents at the beginning of the period Cash and cash equivalents at the end of the períod Increase (decrease) in cash and cash equivalents

See the accompanying notes to the financial statements.

Banco Votorantim S.A. Consolidated statements for added value Period from January 1st to September 30, 2011 and 2010 (In thousands of Reais) 2011

2,010

Revenues Income from financial intermediation Revenue from services rendered and bank fees Allowance for doubtful accounts Other income (expenses) Non-operating income

12,850,975 14,150,629 958,606 (2,246,039) (21,939) 9,718

9,598,562 9,929,438 974,588 (1,193,677) (84,661) (27,126)

Financial operations expenses

(9,945,453)

(6,173,852)

Inputs acquired from third parties Materials, energy, and other Outsourced services Other Communications Maintenance and preservation of assets Data processing Promotions and public relations Publications Advertising and publicity Services of the financial system Specialized technical services Transportation Other

(1,005,304) (8,037) (13,049) (984,218) (74,347) (13,623) (112,108) (13,729) (940) (7,456) (144,151) (341,324) (17,933) (258,607)

(912,865) (7,202) (14,520) (891,143) (72,572) (10,070) (79,636) (15,774) (1,776) (29,774) (135,969) (309,064) (15,416) (221,092)

Gross added value Amortization/depreciation expenses Net added value produced by the Entity Added value received as transfer Equity in income of associated companies and subsidiaries

1,900,218

2,511,845

(29,497)

(20,805)

1,870,721

2,491,040

(262)

-

(262)

-

Added value payable

1,870,459

2,491,040

Total added value paid

1,870,459

2,491,040

Personnel Salaries and fees Profit sharing Benefits and training programs FGTS Other

818,528 409,016 270,578 101,872 36,863 199

772,000 349,189 307,604 87,100 27,837 270

Taxes, duties and contributions INSS on salaries Tax expenses (excepting income and social contribution taxes) Income tax / Social contribution

496,728 101,591 473,272 (78,135)

899,843 86,421 411,290 402,132

99,930 99,930

75,952 75,952

455,273 128,389 326,882 2

743,245 112,823 630,417 5

Third-party capital remuneration Rents Remuneration of own capital Dividends/ Interest on own capital Retained earnings Minority interests in retained earnings See the accompanying notes to the financial statements.

Banco Votorantim S.A. Notes to the financial statements Period from January 1st to September 30th, 2011 and 2010 (In thousands of Reais)

1

Operations Banco Votorantim S.A. is a closed corporation that, operating in the form of a Multiple Bank, develops banking activities in authorized categories, by means of its commercial, financing and foreign exchange operation portfolios. Through its subsidiaries, the Company also operates in various other categories, with an emphasis on the activities of consumer credit, leasing, administration of investment funds and credit cards. Transactions are conducted in the context of a set of institutions that operate in an integrated manner in the financial market, including in relation to risk management, and certain transactions have the joint participation or the intermediation of member institutions, which form an integral part of the financial system. The benefits of the services provided between these institutions and the costs of the operational and administrative structure, are absorbed based on the practicality and reasonableness of the allocation of benefits and costs, jointly or individually.

2

Presentation of consolidated financial statements The financial statements were prepared on a basis of the accounting guidelines derived from Corporation Law and rules and instructions of the National Monetary Council (CMN). Law 11638/07 was enacted on December 28, 2007, amended by Law 11941/09, which amended Corporate Law regarding accounting practices adopted in Brazil. Although said Law is already effective, some changes it introduced depend on normatization by the National Monetary Council. The amendments approved by CMN were: 1) accounting treatment of intangible assets; 2) procedures to measure the recoverable value of assets; 3) elaboration of the statement of cash flows in place of the statement of changes in financial position; 4) the disclosure of related party information in notes to the financial statements; 5) procedures for the recognition, measurement and disclosure of provisions, contingent assets and liabilities; 6) share based payment; and 7) subsequent events.

Banco Votorantim S.A. Notes to the financial statements (In thousands of Reais)

The consolidated financial statements include Banco Votorantim and the direct subsidiaries in the country and overseas, listed below: Ownership interest 09/30/2011

09/30/2010

99.98% 99.99% 100% 99.99% 100% 100%

99.98% 99.99% 100% 99.99% 100% -

100% 100%

100% 100%

Direct subsidiaries in Brazil Votorantim Corretora de Títulos e Valores Mob. Ltda. Votorantim Asset Management Distrib. de TVM Ltda. BV Financeira S.A. Crédito, Financiamento e Investimento BV Leasing Arrendamento Mercantil S.A. BVIP - BV Investimentos e Participações S.A. BVIA - BV Inv. Alternativos e Gestão de Recursos S.A. Direct subsidiaries overseas Votorantim Bank Limited Banco Votorantim Securities Inc.

The consolidated financial statements were prepared in conformity with the consolidation rules and instructions of National Monetary Council (CMN). The main procedures in the consolidation process of the financial statements are: a. Elimination of the balances of accounts of assets, liabilities, income and expenses between parent company and subsidiary companies; b. Elimination of investments in the subsidiaries’ capital, reserves and retained earnings; c. Presentation of lease operations under the financial method, reclassifying "Lease property" to "Lease operations", net of the residual value received in advance;

Banco Votorantim S.A. Notes to the financial statements (In thousands of Reais)

d. The book balances of the overseas direct subsidiaries, which are prepared according to international accounting standards, were translated into reais, using the US dollar quotation on the closing date of the period, and were adjusted to accounting practices described in Note 4; e. The exchange variation of the operations of the branch and of the subsidiary companies overseas was distributed on the lines of the statement of income, according to the respective assets and liabilities that originated them; f.

The consolidation process does not include the consolidation of the exclusive investment funds and of the credit receivable investment funds in conformity with the consolidation rules established by the National Monetary Council (CMN), and

g.

Income statement balances as of September 30, 2010 were reclassified to permit comparability of financial statements, as a result of the change in internal aggregation policies of revenue and expense accounts, in order to provide users with a better understanding of the Company's results. In the Consolidated, the main reclassifications were: i)

Balances previously presented in the item "Other operational income", in the amount of R$1,343,215 and "Other operational expenses" in the amount of R$1,980,375, for the items "Income from loan operations" in the amount of R$890,652 and "Income from derivative financial instruments" in the amount of R$187,872 on September 30, 2010.

Banco Votorantim S.A. Notes to the quartely consolidated financial statements (In thousands of Reais)

Consolidated 2010

Previous disclosure

Balance reclassified

Loan operations

6,963,778

(890,652)

6,073,126

Lease transactions

2,038,941

(30,565)

2,008,376

Securities income

3,126,714

(17,607)

3,109,107

(1,686,500)

187,872

(1,498,628)

82,317

(44,801)

37,516

(4,548,433)

31,913

(4,516,520)

(163,101)

28,474

(134,627)

(1,455,044)

(67,661)

(1,522,705)

300,131

107,242

407,373

(1,096,164)

86,542

(1,009,622)

Income from derivative financial instruments Foreign exchange income Money market repurchase agreements Loans, assignments and onlendings Lease expenses Service fee income Other administrative expenses Tax expenses

(344,721)

(66,569)

(411,290)

Other operational income

1,390,744

(1,343,215)

47,529

(2,112,565)

1,980,375

(132,190)

(65,778)

38,652

(27,126)

Other operational expenses Non-operating results

3

Reclassification

Risk management Risk management policies comply with market best practices and are in line with the guidelines defined by the CMN. They encompass Bank Institutions that comprise Votorantim Financial Conglomerate (“Conglomerate”). The Company implemented policies and procedures and management system capable of managing, evaluating and mitigating the risks inherent to its business, providing the Management with a view of all risks.

Banco Votorantim S.A. Notes to the financial statements (In thousands of Reais)

Market risk Market risk is defined as the possibility of financial losses arising from the variation in the market value of positions held. Management is executed in a centralized manner, by an area that maintains independence in relation to the front office. The basic procedures adopted for risk management are: (a) integrity of the pricing of assets and derivatives; (b) assessment of the risk using the Value at Risk methodology and from simulating scenarios; and (c) accompanying the daily results using the back-test methodology. The Conglomerate undertakes operations that involve derivative financial instruments, operating in organized and over the counter markets, in order to ensure the management of market risk appropriate to its policy. These instruments are used for hedging positions to meet the demand of counterparties and as a means of reversing the positions at times of significant oscillations. Operational risk Operating risk is defined as the possibility of losses resulting fromfault, deficiency or inadequacy of internal processes, people and systems or external events. It also includes the legal risk associated to the inadequacy or deficiency in contracts signed by the institution, and to fines due to failure to abide by legal provisions and indemnities for damages to third parties arising from activities performed. The operating risk management process starts with the application of an appropriate methodology for mapping the risks. Management risks are: risk identification, assessment, monitoring, control and mitigation, plus the communication and the action plan. The combination of risk mapping and monitoring actions with the information obtained from the records of incurred losses allows a continuous improvement in the adopted policies and procedures, as well as the reduction of existing risks.

Banco Votorantim S.A. Notes to the financial statements (In thousands of Reais)

Credit risk Credit risk consists of the possibility of occurring losses associated to a borrower or a counterpart's failure to fulfill their respective financial obligations under the agreed-upon conditions, and losses associated to devaluation of a loan agreement due to deterioration of the borrower's risk classification, reduction in gains or compensations, advantages granted in renegotiations and loan recovery costs. As part of the credit risk management process, monitoring are conducted for policies, rules, processes, established limits, in addition to risk analysis and submission to appropriate levels and approving committees. The credit policy is formulated upon the analysis of internal indicators in the portfolio, company pricing and assessment processes, and of external factors related to the financial situation of the companies and the economic situation of the country and foreign countries. Conglomerate carries out credit risk assessments of their operations, determined by means of judgment and statistical models. It is worth emphasizing that in the identification of the deterioration of the loan portfolio quality, risk mitigation measures are taken, such as reassessment of customer risk profile and industry analysis that influence threshold management and management and control of guarantees.

Banco Votorantim S.A. Notes to the quartely consolidated financial statements (In thousands of Reais)

Asset and liability management The Assets & Liabilities Operating Committee ("ALM") is in charge of managing the structural risks of interest rate, liquidity and exchange rate, as well as the capital management, aiming to optimize the risk/return ratio and seeking greater efficiency when composing the factors that impact the Solvability Index (Basel).

Basel Index

09/30/2011

09/30/2010

Capital (PR)

13,057,070

11,944,734

8,741,394 4,315,676

8,261,072 3,683,662

Capital Requirement (PRE)

11,294,555

9,716,492

Pepr Pjur Pcom Pacs Popr

10,717,695 275,464 6,668 25,815 268,913

8,431,542 832,503 1,531 33,983 416,933

1,762,515

2,228,242

12.7%

13.5%

Level I Level II

Excess of Capital Basel Index (PR x 100/(PRE/0.11)

4

Significant accounting policies a. Statement of income The Income and expenses are recorded according to the accrual basis and are recorded by the pro rata criterion and calculated with a basis on the exponential method, excepting those related to transactions with foreign countries, which are calculated by the straight-line method.

Banco Votorantim S.A. Notes to the financial statements (In thousands of Reais)

b. Cash and cash equivalents Cash and cash equivalents are represented by available funds, interbank deposits, investments in foreign currency and money market repurchase agreements – own portfolio, maturity up to 90 days.

c. Interbank investments Interbank investments are recorded at investment value, plus income accrued up to the balance sheet date, calculated pro rata with a basis on the variation of the index and on the agreed interest rate.

d. Securities Securities are recorded by the amount effectively paid and classified in keeping with Management's intention in three different categories: i. Securities for trading - Acquired for the purpose of being actively and frequently traded. Adjusted to its market value with the corresponding entry to the results for the period; ii. Securities available for sale - Securities that are not for trading or held to maturity. Adjusted to its market value with the corresponding entry to a separate account in shareholders' equity, reduced for any tax effects; and iii. Securities held to maturity - Securities acquired with the intention and financial capacity to hold them in the portfolio to maturity. Recorded at cost of acquisition, plus income accrued in contra account to results for the period. In this category, the securities are not adjusted to market value. The market valuation methodology was established in compliance with consistent and verifiable criteria, which take into consideration the average price of trading on the date of calculation, or, in the absence thereof, the daily adjustment value of future market transactions disclosed byexternal sources, or the probable net realizable value obtained using interest rate future value curves, exchange rates, price and currency indexes, besides any adjustments in the prices of securities of low liquidity.

Banco Votorantim S.A. Notes to the quartely consolidated financial statements (In thousands of Reais)

Income accrued with securities, regardless of the category in which it is classified, is calculated pro rata with a basis on the variation of the index and on the agreed interest rate, by the exponential or straight-line method, up to the date of maturity or of the final sale of the security, and is recognized directly in income for the period.

e. Derivative financial instruments Derivative financial instruments are stated at its market value, with consistent and verifiable criteria, considering the average price of trading on the date of calculation, or, in the absence thereof, conventional and proven methodologies. The derivative financial instruments are classified according to the intention of Management, taking into account its purpose. Financial instruments used to offset, in whole or in part, the risks arising from exposure to variations in asset or liability market values are considered hedge instruments and are classified according to their nature as: i.

Market risk hedge - adjustments to market value of the derivative financial instruments classified in this category, as well as of the item hedged , are recorded in counter entry to income (loss) for the period; and

ii. Cash flow hedge - Derivative financial instruments classified in this category have their adjustments to market value recorded in the account in shareholders' equity, reduced for any tax effects. Derivative financial instruments that do not fulfill the hedge criteria have their adjustments to market value recorded directly in income for the period. For derivative financial instruments traded in association with funding operations, both the derivative and the funding are accounted for by the intrinsic conditions contracted, and are not adjusted by the market value.

f. Hedge accounting The Conglomerate uses financial hedge derivatives to hedge its exposures to foreign currency and interest rate changes.

Banco Votorantim S.A. Notes to the quartely consolidated financial statements (In thousands of Reais)

Upon initial designation of the hedge, the Conglomerate formally documents the relationship between the hedge instruments and the hedgeable instruments, including the risk management goals and the strategy in the execution of the hedge transaction, together with the methods that will be used to assess the effectiveness of the hedge relationship, considering the conventional and well-established calculation methods. The Conglomerate makes an assessment, both in the beginning of this relationship, and continuously, to check if it is expected that these instruments are highly effective in the compensation of changes in fair value of respective items object of hedge during the period for which is designed, and if actual results are within the range of 80-125 per cent.

g. Loan and lease operations, advances on foreign exchange contracts, other receivables with loan characteristics and allowance for possible loan losses Loan and lease operations, advances on foreign exchange contracts and other receivables with loan characteristics are classified according to Management's discernment with respect to the level of risk, taking into consideration the economic panorama, past experience and specific risks in relation to the operation, to obligators and guarantors, periods of delinquency, and economic group, observing the parameters established by CMN, which requires the analysis of the portfolio and its rating at nine levels, ranging from AA (minimum risk) to H (maximum risk). In relation to the period of delinquency verified in retail operations with a term of over thirty-six (36) months, a double count is permitted over intervals of delinquency defined for the nine levels. Income from loans overdue for more than 60 days, regardless of their level of risk, are only recognized as income when effectively received. Operations rated at level H continue in this status for 180 days, when they are written off against the existing provision and controlled in memorandum accounts. Renegotiated operations are maintained, at a minimum, at the same level at which they were rated, in conformity with CMN Resolution nº 2682. Renegotiations of loans that had already been written off against provision that were in memorandum accounts are rated as H and any gains from renegotiation are recognized as income when effectively received. Loan and lease operations that are subjects of hedges of derivative financial instruments are stated at market value using consistent and verifiable criterion. The adjustments of valuation at market value of these operations are recorded, when positive, in Other Receivables Sundry, and, when negative, in Other Liabilities - Sundry, in counter entry to income from loans and income from leases.

Banco Votorantim S.A. Notes to the quartely consolidated financial statements (In thousands of Reais)

Loan assignment calculated recognizing income at the time of assignment, irrespectively of retention or not of risk. For the portfolio of loan operations granted with recourse, Management established a provision for losses, recorded under "Other liabilities - Sundry".

h. Prepaid expenses Funds applied in prepayments, where the benefits or rendering of services are to occur in future periods, are recorded.

i. Accounting estimates Preparation of the financial statements requires that Management use its judgment in determining and recording accounting estimates. The settlement of transactions involving these estimates may result in significantly different amounts due to the lack of precision inherent to the process of their determination. Significant items subject to theses estimates and assumptions include assessment of financial assets and liabilities and derivative financial instruments at their fair value, analysis of credit risk to determine allowance for doubtful accounts, as well as analysis on contingent liabilities. The The Management reviews the estimates and assumptions on a regular basis. The main amounts recognized in the Financial Statements through estimates are included in the following notes: nº 8 – Securities; nº 9 – Derivative Financial Instruments; nº 12 – Loans Credit; and nº 50 – Contingent assets and liabilities and Legal obligations.

j. Permanent assets i.

Investments in equity interest are valued using the equity method. Other permanent investments are valued at cost of acquisition less allowance for losses, when applicable;

Banco Votorantim S.A. Notes to the quartely consolidated financial statements (In thousands of Reais)

ii. Property, plant and equipment stated at acquisition cost, less accumulated depreciation. Depreciation of fixed assets is calculated using the straight line method, based on the following annual rates according to the useful economic lives of the assets, as follows: Facilities, furniture and equipment in use - 10%; Communication, security, and transportation system - 10%; and 20 years. iii. Deferred assets are stated at acquisition or formation cost, deduced from respective composed amortization, basically, for expenses on third-party properties. Amortization is calculated by the straight-line method, based on the period over which the benefit is generated. During the period, there were no acquisitions as a result of regulation in force; and iv. Intangible assets include rights relating to intangibles that are intended for the maintenance of the company or exercised for this purpose. Amortization is calculated by the straight-line method, based on the period over which the benefit is generated. Non-financial assets are subject to evaluation of the recoverable value yearly.

Banco Votorantim S.A. Notes to the financial statements (In thousands of Reais)

k. Income and social contribution taxes Income tax was determined with a basis on the rate of 15%, plus a surcharge of 10%, and social contribution was determined with a basis on the rate of 15%, both applicable to the taxable income. Deferred income tax is recognized at the subsidiary BV Leasing, calculated at the rate of 25%, on the adjustment of supervenience of depreciation of the lease portfolio. Income tax and social contribution tax credits are formed in accordance with a study of future realization prepared by Management.

l. Contingent assets and liabilities and legal obligations The recognition, measuring and disclosure of contingent assets, contingent liabilities and legal obligations are carried out according to the following criteria: i.

Contingent assets- These are not recorded except when Management has full control over the situation or when there are secured guarantees or favorable sentences to which no further appeals are applicable, characterizing a favorable judgment as practically certain;

ii. Contingent liabilities - These are recognized in the financial statements when, based on the opinion of the legal counsel and of Management, the risk of loss of a lawsuit or administrative proceeding is considered probable, with a probable outflow of financial resources for the settlement of obligations and when the sums involved are measurable with sufficient assurance. Contingent liabilities classified as possible losses are not accounted for, and should only be disclosed in the notes to the financial statements, whereas those classified as remote do not require provision and disclosure. e iii. Legal obligations - Fiscal and social security - Are lawsuits related to tax obligations, where the subject being contested is their legality or constitutionality which, regardless of the probability of success of the lawsuits in progress, have their amounts recognized in full in the financial statements.

Banco Votorantim S.A. Notes to the financial statements (In thousands of Reais)

m. Other assets and liabilities Assets are stated at realizable values, including, when applicable, monetary and exchange variations earned (on a pro rata daily basis) and a provision for losses, when considered necessary. Liabilities are stated at known or calculated amounts, plus charges and monetary variations and exchange variations incurred (on a pro rata daily basis).

5

Breakdown of cash and cash equivalents 09/30/2011

6

09/30/2010

Cash Interbank funds applied Purchase and sale commitments - own portfolio Interbank deposits Investments in foreign currency

124,913 3,489,423 2,369,527 665,737 454,159

156,334 5,138,849 4,187,737 923,285 27,827

Total

3,614,336

5,295,183

Cash 09/30/2011 Cash Bank deposits Cash and cash equivalents in foreign currency Total

09/30/2010

332 59,559 65,022

407 49,358 106,569

124,913

156,334

Banco Votorantim S.A. Notes to the financial statements (In thousands of Reais)

7

Interbank funds applied 09/30/2011

09/30/2010

Purchase and sale commitments - own portfolio

4,993,348

6,161,069

Financial treasury bills National treasury bills National treasury notes Other

648,679 3,393,872 897,313 53,484

253,126 633,485 5,074,990 199,468

Purchase and sale commitments - Financed operations

8,657,522

10,096,105

Financial treasury bills National treasury bills National treasury notes

2,004,529 3,596,506 3,056,487

1,194,867 7,351,494 1,549,744

Purchase and sale commitments - Short position

1,784,774

1,616,836

National treasury bills National treasury notes

130,693 1,654,081

1,616,836

Interbank deposits

1,752,720

2,519,318

454,159

27,827

17,642,523

20,421,155

Foreign currency investments Total

Banco Votorantim S.A. Notes to the quartely consolidated financial statements (In thousands of Reais)

8

Securities Composition by category, in the Country and Overseas 09/30/2011 Trading securities

09/30/2010

Accrual value

Market value (book)

11,352,021

11,586,741

234,720

12,524,645

12,607,576

82,931

Financial treasury bills National treasury bills National Treasury notes Debentures Agricultural debt securities Rural Product Bills Promissory notes Shares in investment funds Quotas of FIDC Shares of listed companies Certificate of real estate receivables

1,115,926 2,484,953 5,805,482 313,547 34,890 338,442 159,948 711,834 341,988 38,094

1,115,878 2,510,518 5,953,300 364,533 36,584 349,239 159,948 711,834 341,988 36,002

(48) 25,565 147,818 50,986 1,694 10,797 (2,092)

66,502 3,491,070 5,695,313 385,830 63,147 389,587 249,681 1,470,839 519,592 193,084

66,503 3,485,537 5,732,507 432,280 65,014 390,297 249,637 1,470,839 519,592 195,370

1 (5,533) 37,194 46,450 1,867 710 (44) 2,286

6,917

6,917

-

-

-

-

Overseas

1,157,431

1,150,338

(7,093)

4,357,587

4,122,094

(235,493)

696,537 153,250 307,644

695,662 153,588 301,088

(875) 338 (6,556)

95,135 2,656,783 120,097 1,485,572

104,072 2,668,508 118,047 1,231,467

8,937 11,725 (2,050) (254,105)

12,509,452

12,737,079

227,627

16,882,232

16,729,670

(152,562)

Domestic

Brazilian foreign debt Foreign governments National Treasury Other securities Total

Unrealized gain/ (Loss)

Accrual value

Market value (book)

Unrealized gain/ (Loss)

Banco Votorantim S.A. Notes to the quartely consolidated financial statements (In thousands of Reais)

09/30/2011 Securities available for sale

Accrual value

Market value (book)

Domestic

9,899,065

9,887,950

National Treasury notes Real estate receivables certificates Debentures Promissory notes Shares in investment funds Quotas of FIDC FIP shares Shares of listed companies Shares of non-listed companies

3,080,409

09/30/2010 Accrual value

Market value (book)

Unrealized gain/ (Loss)

(11,115)

6,578,978

6,507,591

(71,387)

3,088,467

8,058

3,235,821

3,217,244

(18,577)

15,518 1,901,901 151,016 1,812,945 959,945 255,251

17,211 1,941,247 151,016 1,812,945 959,945 193,034

1,693 39,346 (62,217)

37,776 1,089,386 541,351 34,462 60,614 -

39,976 1,060,684 541,351 35,421 60,614 -

2,200 (28,702) 959 -

1,722,080

1,724,085

2,005

1,579,568

1,552,301

(27,267)

Overseas

2,548,368

2,538,161

(10,207)

873,123

917,019

43,896

Foreign governments Other securities

1,457,952 1,090,416

1,504,825 1,033,336

46,873 (57,080)

873,123

917,019

43,896

12,447,433

12,426,111

(21,322)

7,452,101

7,424,610

(27,491)

Total

Unrealized gain/ (Loss)

Banco Votorantim S.A. Notes to the quartely consolidated financial statements (In thousands of Reais)

9

Derivative financial instruments a. Composition in assets and liabilities 09/30/2011

09/30/2010

Assets Differential receivable from swap Term currency contracts Purchase of call options - shares Purchase of put options - shares Purchase of call options - financial assets/goods Purchase of put options - financial assets/goods Credit derivatives Non Deliverable Forward Other

1,025,088 2,771 1,766 38,862 684,760 207,134 59,322 222,658 22

884,021 434 10,060 469 203,084 334,551 328,307 107,125 53,518

Total

2,242,383

1,921,569

Differential payable from swap Term currency contracts Sale of call options - Shares Sale of put options - Shares Sale of call options - financial assets/goods Sale of put options - financial assets/goods Option box - Fixed income strategy Credit derivatives Non Deliverable Forward

1,875,538 605 1,274 49,931 530,596 302,604 2,390,395 62,387 111,523

1,915,698 298 7,465 112 261,772 186,451 4,002,488 159,159 104,320

Total

5,324,853

6,637,763

Liabilities

Banco Votorantim S.A. Notes to the quartely consolidated financial statements (In thousands of Reais)

b. Composition of the swap contracts by index 09/30/2011

09/30/2010

Original value

Accrual value

Market value

Original value

Accrual value

Market value

Asset position

27,737,437

29,927,567

31,983,726

24,896,836

26,865,339

27,076,543

DI Dollar Euro IGPM IPCA Pre-fixed Libor Commodities Swiss Franc Other

10,958,286 6,278,796 461,685 1,221,209 3,033,534 3,340,422 1,982,773 19,685 441,047 -

11,069,030 7,337,234 497,799 1,544,628 3,400,030 3,577,831 1,956,670 19,565 524,780 -

12,720,073 7,578,204 503,462 1,594,213 3,457,541 3,619,266 1,952,289 18,680 539,998 -

8,667,254 8,312,076 37,130 790,162 847,800 4,834,502 1,383,372 1,732 22,808

9,838,987 8,457,748 33,099 1,001,664 1,098,197 5,034,151 1,383,976 1,732 15,785

9,852,560 8,538,785 33,099 1,044,987 1,118,821 5,086,024 1,381,112 1,878 19,277

Asset position

27,737,437

30,616,976

32,834,176

24,896,836

27,866,098

28,108,220

DI Dollar Euro IGPM IPCA Pre-fixed Libor Yen Long Term Interest Rate (TJLP) Commodities Other

8,693,684 1,677,421 10,972 847,270 5,793,896 10,446,629 193,433 -

10,995,483 1,848,237 11,532 1,192,859 7,183,274 9,119,814 178,153 -

10,990,364 1,903,626 11,647 1,235,110 7,409,777 11,013,916 178,640 -

8,329,269 4,786,306 282,613 900,000 3,879,974 5,743,246 863,917 43,418

10,008,424 4,759,930 288,896 1,153,619 4,572,529 6,106,376 864,582 42,912

10,019,477 4,834,289 286,425 1,194,476 4,642,695 6,153,455 864,311 42,706

37,399 24,491 12,242

44,587 24,843 18,194

49,213 22,711 19,172

40,579 6,513 21,001

44,745 6,377 17,708

44,745 6,588 19,053

Net differential

-

(689,409)

(850,450)

-

(1,000,759)

(1,031,677)

Banco Votorantim S.A. Notes to the quartely consolidated financial statements (In thousands of Reais)

c. Composition of the forward contracts by index 09/30/2011

09/30/2010

Original value

Accrual value

Market value

Original value

Accrual value

Market value

Forward currency

48,207

13,641

2,771

19,337

434

434

Total

48,207

13,641

2,771

19,337

434

434

Forward currency

48,207

605

605

19,337

298

298

Total

48,207

605

605

19,337

298

298

Asset position

Liability position

Banco Votorantim S.A. Notes to the financial statements (In thousands of Reais)

d. Composition of the options contracts by index 09/30/2011

09/30/2010

Long position

Amount contracted

Market (book) value

Amount contracted

Market (book) value

Dollar Index DI Shares Commodities Flexible

5,826,638 472,663,230 26 1,058,828 10,065 1,232,784

570,536 205,700 1,069 40,628 147 114,442

11,841,888 561,670,409 150 365,700 217,222 6,353,365

202,634 826 258,505 10,529 5,230 70,440

Total

480,791,571

932,522

580,448,734

548,164

09/30/2011

Short position

09/30/2010

Amount contracted

Market (book) value

Amount contracted

Market (book) value

Dollar Index DI Shares Commodities Flexible

8,431,275 502,773,421 677 955,575 32,649 2,136,170

496,398 219,889 50,856 51,205 2,211 63,846

17,303,575 631,301,112 566,840 234,148 7,158,279

146,533 152,967 7,577 15 148,708

Total

514,329,767

884,405

656,563,954

455,800

Banco Votorantim S.A. Notes to the quartely consolidated financial statements (In thousands of Reais)

e. Composition of the futures contracts by index 09/30/2011

09/30/2010

Commitment of purchase

65,647,480

25,852,186

DDI Dollar DI Exchange Coupon Commodities T-Note Index SCC

13,987,401 118,164 49,946,610 433,195 7,564 569,725 20,477 564,344

8,001,533 2,663,131 13,182,528 112,625 263,409 1,628,960

Commitment of sale

77,948,933

71,631,437

DDI Euro Dollar Exchange Coupon DI Commodities T-Note Index BGI SCC

13,144,677 27,516 2,836,479 489,903 60,262,001 25,491 526,207 53,044 9,556 574,059

8,685,955 392,315 1,248,602 59,318,991 12,817 340,450 3,529 153 1,628,625

(12,301,453)

(45,779,251)

Net differential

Banco Votorantim S.A. Notes to the quartely consolidated financial statements (In thousands of Reais)

f. Composition of the NDF contracts by index 09/30/2011

09/30/2010

Amount contracted

Market (book) value

Amount contracted

Market (book) value

Assets Dollar Euro Other

1,836,337 6,791 271,216

148,523 476 73,659

1,465,007 -

107,125 -

Total

2,114,344

222,658

1,465,007

107,125

748,968 10,609 567,775

80,559 365 30,599

958,335 3,573 -

104,243 77 -

1,327,352

111,523

961,908

104,320

786,992

111,135

503,099

2,805

Liabilities Dollar Euro Other Total

Net differential

Banco Votorantim S.A. Notes to the financial statements (In thousands of Reais)

g. Credit derivatives 09/30/2011

09/30/2010

Reference value

Market (book) value

Reference value

Market (book) value

Risk taken Credit swaps Credit Linked Notes Total

3,560,448 3,560,448

(47,331) (47,331)

3,862,776 310,039 4,172,815

14,018 315,559 329,577

Risk transferred Credit swaps Credit linked notes Equity linked notes Total

1,511,336 1,511,336

44,266 44,266

418,467 143,397 4,574 566,438

8,630 144,692 4,567 157,889

h. Credit derivatives by index 09/30/2011

09/30/2010

Original value

Accrual value

Market (book) value

Original value

Accrual value

Market (book) value

Asset position Pre fixed

2,707,424

41,541

59,322

4,172,815

318,098

328,307

Total

2,707,424

41,541

59,322

4,172,815

318,098

328,307

Liability position Pre fixed Total

2,364,360 2,364,360

552 552

62,387 62,387

566,438 566,438

150,120 150,120

159,159 159,159

343,064

40,989

(3,065)

3,606,377

167,978

169,148

Net differential

Banco Votorantim S.A. Notes to the quartely consolidated financial statements (In thousands of Reais)

i. Composition of the Option box contracts - fixed income strategy 09/30/2011

09/30/2010

Amount contracted

Market (book) value / Risk exposure

Amount contracted

Market (book) value / Risk exposure

805,459 1,421,382

868,257 1,522,138

1,355,943 2,484,598

1,137,381 2,865,107

2,226,841

2,390,395

3,840,541

4,002,488

-

2,255,372

-

3,324,954

-

2,255,372

-

3,324,954

-

2,255,372

-

3,324,954

Subtotal

-

2,255,372

-

3,324,954

Total

-

-

-

-

Prefixed Risk Liability position Sale of Call with high limit Sale of Put with low limit Total Dollar risk Asset position Sale of Put with low limit Subtotal Liability position Sale of Call with high limit

Banco Votorantim S.A. Notes to the quartely consolidated financial statements (In thousands of Reais)

j. Securities given in guarantee 09/30/2011 Stock Exchange transactions National Treasury notes Financial treasury bills National treasury bills Clearing National Treasury notes National treasury bills Other Financial treasury bills Other (a) Total

09/30/2010

1,124,160

2,113,853

310,440 24,448 789,272

466,434 17,980 1,629,439

87,454

164,551

15,800 71,654

49,463 115,088

1,991,445

3,933,742

19,808 1,971,637

12,660 3,921,082

3,203,059

6,212,146

(a) In 2010, basically refer to securities of foreign governments, in the amount of R$2,454,680, and other securities overseas, in the amount of R$ 1,466,402; and in 2011, basically refer to securities of foreign governments, in the amount of R$1,472,187, in the amount of R$499,450.

Banco Votorantim S.A. Notes to the quartely consolidated financial statements (In thousands of Reais)

k. Financial derivative instruments segregated by trading location Asset position Stock exchange transactions Over-the-Counter Financial institutions Trade accounts receivable Total Liability position Stock exchange transactions Over-the-Counter Financial institutions Trade accounts receivable Total

10

09/30/2011 932,522 1,309,861 928,766 381,095 2,242,383 09/30/2011 884,405 4,440,448 4,297,796 142,652 5,324,853

09/30/2010 548,164 1,373,405 900,619 472,786 1,921,569 09/30/2010 455,800 6,181,963 6,048,819 133,144 6,637,763

Interbank accounts Assets 09/30/2011

Payments and receivables to be settled Mandatory reserves - BACEN Interbank onlendings Correspondent relations Total

09/30/2010

1,709 6,117,134 134,939 295

859 4,465,733 71,052 7,086

6,254,077

4,544,730

Banco Votorantim S.A. Notes to the quartely consolidated financial statements (In thousands of Reais)

Liabilities 09/30/2011

11

09/30/2010

Payments and receivables to be settled

10,381

9,778

Total

10,381

9,778

Interbank relations Assets

09/30/2011

09/30/2010

Local transfer of funds

31

-

Total

31

-

Liabilities

09/30/2011

09/30/2010

Funds in transit - Associated companies Funds in transit - Third parties Payment orders in foreign currency Local transfer of funds

7,464 64,968 1

12,102 104 28,539 -

Total

72,433

40,745

Banco Votorantim S.A. Notes to the quartely consolidated financial statements (In thousands of Reais)

12

Loan and lease operations, advances on foreign exchange contracts, other receivables with loan characteristics and allowance for loan losses a. Composition of operations by category and past due and falling due installments 09/30/2011

09/30/2010

Advances to depositors Loans Discounted securities Loans and financing Export financing Financing in foreign currency Rural financing agreements Real estate financing agreements

1,325 15,689,503 58,657 38,615,595 3,217,292 524,968 1,155,654 223,063

559 12,943,263 22,690 30,571,408 2,967,359 207,618 1,105,393 -

Subtotal

59,486,057

47,818,290

787,807 3,704,264

491,337 4,443,048

63,978,128

52,752,675

1,538,938

812,096

Payments falling due

62,439,190

51,940,579

Total installments

63,978,128

52,752,675

Advances on exchange contracts Lease operations Total lending operations Installments past due (from 15 days)

Banco Votorantim S.A. Notes to the quartely consolidated financial statements (In thousands of Reais)

b. Concentration of operations 09/30/2011

09/30/2010

Ten largest debtors Fifty following largest debtors Hundred following largest debtors Other debtors

3,051,965 4,477,052 3,664,402 52,784,709

3,653,048 4,618,003 3,534,369 40,947,255

Total

63,978,128

52,752,675

c. Composition of operations by sector of economic activity 09/30/2011

09/30/2010

Corporate entities Public sector Services

22,684,194

18,763,701

52,185

133,933

Private sector Industry Commerce Rural Services Financial institutions

22,632,009 10,982,893 3,995,607 1,145,372 6,508,137 -

18,629,768 9,416,456 2,934,172 1,105,394 5,148,053 25,693

Individuals

41,293,934

33,988,974

Total

63,978,128

52,752,675

Banco Votorantim S.A. Notes to the quartely consolidated financial statements (In thousands of Reais)

d. Composition of the operations at the corresponding levels of risk 09/30/2011 Risk level

Loans to fall due

09/30/2010

Loans overdue

Total

Loans to fall due

operations AA

11,672,812

A B

Loans overdue operations

Total Operations

-

12,099,459

-

11,672,812

12,099,459

40,877,491

-

40,877,491

34,250,485

-

34,250,485

2,708,346

1,928,846

4,637,192

2,006,655

1,198,495

3,205,150

C

575,293

1,739,755

2,315,048

143,492

819,025

962,517

D

235,087

929,318

1,164,405

68,501

429,151

497,652

E

336,492

644,019

980,511

119,323

279,675

398,998

F

27,906

489,945

517,851

5,653

212,075

217,728

G

127,721

360,870

488,591

111,369

191,939

303,308

H

59,289

1,264,938

1,324,227

51,065

766,313

817,378

56,620,437

7,357,691

63,978,128

48,856,002

3,896,673

52,752,675

Total

Banco Votorantim S.A. Notes to the quartely consolidated financial statements (In thousands of Reais)

e. Formation of allowance for loan losses by level of risk 09/30/2011 Levels of risk A B C D E F G H

09/30/2010

% Provision 0.5

204,387

172,752

1

46,372

32,050

3

69,451

28,876

10

116,441

49,765

30

294,153

119,700

50

258,926

108,863

70

342,014

212,316

100

1,324,227

817,380

2,655,971

1,541,702

4.2%

2.9%

Total Percentage of the portfolio

f. Movement of allowance for loan losses in the period 09/30/2011

09/30/2010

Opening balance

1,153,336

1,361,982

Formations/(reversals) Write-offs to loss

2,246,039 (743,404)

1,193,677 (1,013,957)

Closing balance

2,655,971

1,541,702

Banco Votorantim S.A. Notes to the quartely consolidated financial statements (In thousands of Reais)

g. Information on credit assignments Assignments with recourse carried out by the subsidiary BV Financeira 09/30/2011

09/30/2010

11,000,009 (9,582,651)

10,228,020 (8,909,302)

Gross income from assignments

1,417,358

1,318,718

Expenses with assigned contracts' early settlement Provision for losses on assigned contracts

(457,254) (113,095)

(331,573) (25,111)

847,009

962,034

(344,542)

(300,616)

502,467

661,418

(189,742)

(301,359)

312,725

360,059

Transfer amount of assets assigned in the period Book value of assets assigned in the period

Income from assignments before costs and taxes Acceleration of the recognition in profit or loss of the costs associated with the asset assigned Income from assignments before taxes Tax effects Net Income (loss) from assignments

09/30/2011

09/30/2010

Balance of credit assignments with recourse Financial institutions – Related parties Other financial institutions

14,286,439 1,094,774

7,908,563 2,052,039

Total

15,381,213

9,960,602

Banco Votorantim S.A. Notes to the quartely consolidated financial statements (In thousands of Reais)

Banco Votorantim and its subsidiary BV Financeira hold 100% of subordinated quotas of investment funds in credit right described as follows: 09/30/2011

09/30/2010

BV Financeira FIDC I BV Financeira FIDC II BV Financeira FIDC III BV Financeira FIDC IV BV Financeira FIDC V BV Financeira FIDC VI

50,342 90,781 470,666 200,865

247,364 142,280 127,833 -

Total investments in shares

812,654

517,477

h. Accounting hedge strategies Credit portfolio market value was determined as defined in BACEN Resolution 3,082/02. This determination considered the respective derivative hedge that reflects the effects of interest rate change in credit portfolio, in accordance with installment maturities flow, to offset adjustments carried out in derivatives market. 09/30/2011

09/30/2010

Accrual value

Market (book) value

Unrealized gain/ (Loss)

Loan and Lease Operations

45,510,219

46,913,040

1,402,821

Total

45,510,219

46,913,040

1,402,821

Accrual value

Market (book) value

Unrealized gain/ (Loss)

37,974,587

38,694,408

719,821

37,974,587

38,694,408

719,821

On September 30, 2011, the evaluation of such assets generated an unrealized positive adjustment of R$1,402,821 (R$719,821 in 2010), recorded under Other Credits - Sundry. In order to hedge the risks of the pre-fixed interest rate of loans, financing and lease operations, the Conglomerate entered into contracts on the Interbank Deposit (DI) futures market with BM&FBOVESPA, in accordance with the maturity schedule of the installments. The market value of these derivatives amounts totalized R$ 47.461.025.

Banco Votorantim S.A. Notes to the quartely consolidated financial statements (In thousands of Reais)

i. Supplementary information 09/30/2011 Amount of credit renegotiated in the period Amount part of credits recovered, written-off as loss

13

7,870,535 131,925

09/30/2010 6,142,752 40,627

Foreign exchange portfolio Other receivables 09/30/2011

09/30/2010

Purchased foreign exchange to be settled Receivables from foreign exchange sales Advances in national currency received Advances in foreign currency received Earnings receivable from granted advances Income receivable on financed imports

2,118,567 847,072 (3,093) (648,807) 22,531 -

3,533,855 2,108,024 (7,244) (338,680) 18,304 42

Total

2,336,270

5,314,301

Other liabilities 09/30/2011

09/30/2010

Sold foreign exchange to be settled Financed imports - Foreign exchange contracted Liabilities for foreign exchange purchases Advances against exchange Amount in foreign currency - payable

857,785 2,003,424 (765,275) -

2,089,516 (2,172) 3,605,203 (470,819) 12

Total

2,095,934

5,221,740

Banco Votorantim S.A. Notes to the quartely consolidated financial statements (In thousands of Reais)

14

Securities clearing accounts Other receivables 09/30/2011

09/30/2010

Cash pending settlement Debtors accounting settlement pending Oper. with unsettled financial assets and commodities Other receivables

114 1,913,559 51,084 251,132

26,185 25,703 57,725 72,559

Total

2,215,889

182,172

Other liabilities 09/30/2011

09/30/2010

Cash pending settlement Commissions and brokerage fees payable Creditors - unsettled accounts Stock loan creditors Operations with unsettled financial assets and commodities

56,007 1,137 113,234 20,620 72,210

53,051 1,661 53,559 35,392 169,621

Total

263,208

313,284

Banco Votorantim S.A. Notes to the quartely consolidated financial statements (In thousands of Reais)

15

Other receivables - Sundry 09/30/2011

16

09/30/2010

Advanced and prepaid salaries Advances to suppliers Tax credit of taxes and contributions Deposits in guarantee Taxes and contributions recoverable Recoverable taxes and contributions Credit card transactions Market adjustment s for loans and lease Settlement of securities overseas Other

11,769 3,609 2,653,724 468,177 454,989 3 232,596 1,402,821 298,351 306,694

9,480 151,731 2,189,324 114,580 403,804 2 152,589 719,821 171,522 209,324

Total

5,832,733

4,122,177

Other assets 09/30/2011 Insurance costs Data processing expenses Commission for intermediation of operations Expenses with issue of securities Financial system service expenses Specialized technical service expenses Non operating assets Provision to devaluation of other assets Usufruct right on securities Other Total

09/30/2010

6,375 5,192 1,135,980 2,506 59,014 35,934 102,334 (7,753) 254,843 15,285

1,164 5,810 254,843 2,970 14,984 22,653 78,484 4,107

1,609,710

385,015

Banco Votorantim S.A. Notes to the quartely consolidated financial statements (In thousands of Reais)

17

Investments a. Other investments

Investments via tax incentives Provision for loss in investments due to tax incentives Membership certificates Shares and quotas Other Total

09/30/2011

09/30/2010

104,760

94,506

(40,057) 176 6 129 65,014

(36,323) 176 6 129 58,494

Banco Votorantim S.A. Notes to the financial statements (In thousands of Reais)

18

Fixed assets for use 09/30/2011

09/30/2010

Depreciation

Net

Net

Cost Constructions in progress Facilities Furniture and equipment in use Communication system System data processing Security system Transportation system Total

111 46,076 54,634 11,897 74,399 2,264 1,683

(4,673) (17,693) (6,820) (50,029) (668) (1,425)

111 41,403 36,941 5,077 24,370 1,596 258

111 1,930 33,056 5,904 28,608 1,651 504

191,064

(81,308)

109,756

71,764

09/30/2011

09/30/2010

87,786

58,131

Acquisitions Disposals Depreciation

39,734 (2,813) (14,951)

25,216 (810) (10,773)

Closing balance

109,756

71,764

Opening balance

On September 30, 2011, there were no relevant assets indicating impairment loss.

Banco Votorantim S.A. Notes to the quartely consolidated financial statements (In thousands of Reais)

19

Intangible 09/30/2011 Cost

09/30/2010

Amortization

Net

Net

SISBEX BMF&Bovespa Software Licenses Trading right agreement Corporate projects

200 1,675 16,737 5,001 18,219

(659) (4,507) (978) -

200 1,016 12,230 4,023 18,219

200 1,095 8,040 4,835 3,444

Total

41,832

(6,144)

35,688

17,614

09/30/2011

09/30/2010

Opening balance

20,691

5,121

Acquisitions Write-offs Amortization

18,722 (813) (2,912)

14,288 (428) (1,367)

Closing balance

35,688

17,614

Banco Votorantim S.A. Notes to the quartely consolidated financial statements (In thousands of Reais)

Amortization estimates for software, licenses and trading right agreement 09/30/2011 2nd semester of 2011

1,106

In 2012

4,423

In 2013

4,423

In 2014

4,280

In 2015

2,164

Above 5 years Total

On September 30, 2011, there were no relevant assets indicating impairment loss.

873 17,269

Banco Votorantim S.A. Notes to the quartely consolidated financial statements (In thousands of Reais)

20

Deferred charges 09/30/2011 Depreciation

09/30/2010 Net

Net

Cost Expenses on third-party properties Expenses on software acquisition and development

41,898 1,609

(10,216) (1,304)

31,682 305

44,612 720

Total

43,507

(11,520)

31,987

45,332

09/30/2011 Opening balance Acquisitions Write-offs Amortization Closing balance

09/30/2010

43,894

43,875

(273) (11,634)

10,351 (229) (8,665)

31,987

45,332

On September 30, 2011, there were no relevant assets indicating impairment loss.

Banco Votorantim S.A. Notes to the quartely consolidated financial statements (In thousands of Reais)

21

Deposits 09/30/2011

09/30/2010

Demand deposits Interbank deposits Time deposits Other deposits

379,299 2,192,934 22,393,248 103

376,890 771,406 23,087,264 240

Total

24,965,584

24,235,800

Banco Votorantim S.A. Notes to the quartely consolidated financial statements (In thousands of Reais)

22

Money market repurchase commitments 09/30/2011

09/30/2010

Own portfolio Financial treasury bills National treasury bills National treasury notes Other

29,938,437 96,173 437,585 7,099,611 22,305,068

24,243,161 1,150,427 4,418,573 18,674,161

Third-party portfolio Financial treasury bills National treasury bills National treasury notes

8,696,773 2,004,531 3,601,219 3,091,023

9,327,431 1,194,867 6,582,888 1,549,676

Free portfolio National treasury bills National treasury notes Other

1,888,192 132,384 1,727,776 28,032

1,622,634 1,617,150 5,484

40,523,402

35,193,226

Total

Banco Votorantim S.A. Notes to the quartely consolidated financial statements (In thousands of Reais)

23

Acceptances and endorsements 09/30/2011

09/30/2010

Debentures With exchange variation Post-fixed

(a) (b)

1,772,315 1,576,677

1,652,358 1,409,107

Real estate credit note funds Post-fixed

(c)

2,975

18,249

Agribusiness credit bill funds Post-fixed Pre-fixed

(d) (e)

1,547,909 16,076

1,664,018 -

Financing bills Pre-fixed Post-fixed

(f) (g)

53,970 6,548,265

13,240 2,496,404

Foreign securities Pre-fixed With exchange variation

(h)

6,374,467

443,025 1,973,180

17,892,654

9,669,581

Total

(a) Rate of restatement in 2011: PTAX + 12.04% p.a. (b) Rate of restatement in 2011: DI + 0.35% p.a. / 100% of DI (c) Rate of restatement in 2011: 93.50% of DI (d) Rate of restatement in 2011: from 30% to 96.50% of DI (e) Rate of restatement in 2011: from 11.86% p.a. to 12.35% p.a. (f) Rate of restatement in 2011: from 11.60% p.a. to 14% p.a. (g) Rate of restatement in 2011: from 100% to 112% of DI / 108% of Selic / from 5.48% p.a. to 7.81% p.a. + IPCA / from 4.95% p.a. to 5.99% p.a. + IGPM (h) Rate of restatement in 2011: from 2.28% p.a. to 14.30% p.a. + foreign exchange variation

Banco Votorantim S.A. Notes to the quartely consolidated financial statements (In thousands of Reais)

Accounting hedge strategies 09/30/2011

09/30/2010

Accrual value

Market value

Unrealized gain/ (Loss)

Accrual value

Market value

Unrealized gain/ (Loss)

Foreign securities

2,716,980

2,827,829

110,849

-

-

-

Total

2,716,980

2,827,829

110,849

-

-

-

To hedge against variable foreign exchange risks (US dollar) of securities overseas, Conglomerate traded contracts in the DDI futures market with BM&FBOVESPA, in accordance with installment maturities flow. The market value of these derivatives amounts totalized R$ 3,067,521.

Banco Votorantim S.A. Notes to the quartely consolidated financial statements (In thousands of Reais)

24

Liabilities from borrowings and onlendings 09/30/2011 Local Loans With exchange variation

09/30/2010

-

21,472

Foreign borrowings With exchange variation

(a)

5,371,552

4,843,435

Local Onlendings – National Treasury Pre-fixed

(b)

143,337

45,392

Local Onlendings - BNDES Pre-fixed Post-fixed With exchange variation

(c) (d) (e)

1,518,779 2,276,500 77,753

1,318,793 2,587,069 66,533

Local Onlendings - FINAME Pre-fixed Post-fixed

(f) (g)

2,661,957 600,564

1,777,591 637,985

12,650,442

11,298,270

Total

(a) Rate of restatement in 2011: from 0.90% p.a. to 4.10% p.a. + foreign exchange variation (b) Rate of restatement in 2011: 6.75% p.a. (c) Rate of restatement in 2011: from 1.50% p.a. to 8.00% p.a. (d) Rate of restatement in 2011: from 6.90% p.a. to 10.50% p.a. + Long Term Interest Rate (TJLP) (e) Rate of restatement in 2011: from 0.90% p.a. to 2.50% p.a. + foreign exchange variation (f) Rate of restatement in 2011: from 0.30% p.a. to 9.80% p.a. (g) Rate of restatement in 2011: from 3.30% p.a. to 11.50% p.a. + Long Term Interest Rate (TJLP)

Banco Votorantim S.A. Notes to the quartely consolidated financial statements (In thousands of Reais)

25

Other liabilities - Social and statutory 09/30/2011

26

09/30/2010

Dividends and bonuses payable Provision for profit sharing Bonuses and profit sharing payable

128,389 75,000 -

112,821 119,374 75

Total

203,389

232,270

Other liabilities - Taxes and social security contributions payable 09/30/2011

09/30/2010

Taxes and contributions on income payable Taxes and contributions on outsourced services Taxes and contribution on the salary Taxes and contributions on interest earning bank deposits PIS COFINS ISS Provision for tax risks Provision for deferred taxes and contributions Other taxes and contributions

406,100 8,675 68,830 37,091 9,580 27,039 6,360 1,494,524 1,270,503 -

498,625 10,056 11,535 13,490 12,923 5,175 4,999 1,313,902 1,106,145 36

Total

3,328,702

2,976,886

Banco Votorantim S.A. Notes to the quartely consolidated financial statements (In thousands of Reais)

27

Other liabilities - Subordinated debts 09/30/2011

09/30/2010

Subordinated financing bills Post-fixed

(a)

1,526,171

-

Bank deposit certificates Post-fixed

(b)

2,997,373

3,167,315

-

1,413,094

2,188,751

1,975,512

6,712,295

6,555,921

Debentures Post-fixed Subordinated bill With exchange variation

(c)

Total

(a) Rate of restatement in 2011: from 1.30% p.a. to 1.94% p.a.+ 100% CDI / from 115% to 117% p.a. of DI / from 7.00% p.a. to 8.02% p.a. + IPCA / from 6.74% p.a. to 7.70% p.a. + IGPM (b) Rate of restatement in 2011: from 0.49% p.a. to 1.67% p.a. + CDI / from 7.22% p.a. + IGPM / from 7.85% p.a. to 8.00% p.a. + IPCA (c) Rate of restatement in 2011: 7.38% p.a. + PTAX

Banco Votorantim S.A. Notes to the quartely consolidated financial statements (In thousands of Reais)

Accounting hedge strategies 09/30/2011

09/30/2010

Accrual value

Market (book) value

Unrealized gain/ (Loss)

Subordinated bill

2,166,076

2,188,751

22,675

Total

2,166,076

2,188,751

22,675

Accrual value

Market (book)value

Unrealized gain/ (Loss)

1,975,512

1,975,512

-

1,975,512

1,975,512

-

To hedge against risks (US dollar) of subordinated debts, Conglomerate traded contracts in the DDI futures market with BM&FBOVESPA, in accordance with installment maturities flow. The market value of these derivatives amounts totalizes R$ 2.836.577.

Banco Votorantim S.A. Notes to the quartely consolidated financial statements (In thousands of Reais)

28

Other liabilities - Sundry 09/30/2011 Provision for personnel expenses Provision for Administrative Expenses Provision for contingent liabilities Commission for intermediation of operations Amounts subject to onlendings to assignees Provision for assigned credit losses Credit card transactions Settlement of securities overseas Loan operations and leases to be released Other (a) Total

09/30/2010

123,164 75,117 182,159 62,701 271,861 193,185 230,331 16,410 50,158 308,211

85,048 58,585 144,915 76,240 375,903 49,803 151,621 125,773 111,905 223,831

1,513,297

1,403,624

(a) In the Consolidated, it basically refers to unprocessed amounts arising from the operating cash flow from the loan operation portfolio and lease.

29

Shareholders' equity a. Capital Capital is represented by 81,538,822,950 nominative shares, 66,713,582,406 of which are common shares with no par value and 14,825,240,544 nominative preferred shares with no par value. In accordance with the Extraordinary Shareholders' Meeting held on December 22, 2010, the shareholders approved the allocation of the balances of capital reserves comprised of tax incentives and updating of membership participates to increase capital by R$ 31,945 thousand. The capital increase was approved by the Brazilian Central Bank (BACEN) on June 24, 2011.

Banco Votorantim S.A. Notes to the quartely consolidated financial statements (In thousands of Reais)

b. Profit reserve Legal reserve Formed compulsorily on the basis of 5% of net income for the period, until it reaches 20% of the capital stock. Legal reserve may not be formed when the result of its addition to capital reserves is greater than 30% of capital stock. The legal reserve can only be used for capital increase or to offset loss.

Expansion reserve To fulfill the requirements established in the corporate legislation and rules of the Central Bank of Brazil, Management proposes that the portion of retained profits not distributed is destined for “Expansion reserve”. The balance in reserves will remain at the shareholders' disposal for a subsequent resolution by the General Shareholders' Meeting.

c. Adjustments to equity value recognized in shareholders' equity in the period 09/30/2011

09/30/2010

Opening balance

(57,356)

(76,664)

Securities available for sale Banco Votorantim Subsidiaries

38,736 91,001 (52,265)

89,798 102,351 (12,553)

Tax effects Closing balance

(36,400) (55,020)

(40,940) (27,806)

Banco Votorantim S.A. Notes to the quartely consolidated financial statements (In thousands of Reais)

30

Balance sheet by maturity brackets The "balance sheet by maturity brackets" statement of September 30, 2011 was prepared considering the maturity term of the assets and liabilities, regardless of the category in which they are classified. Regarding assets and liabilities of indefinite term, operations with assets are classified in noncurrent assets and operations with liabilities in current liabilities. Permanent assets and shareholders' equity are being presented as "over 5 years". In the "Balance Sheet" statement, securities classified in the "Trading securities" category are presented as Current Assets, regardless of the maturity terms. Lease operations are presented at the financial method, which consists in reclassifying leased property, plant and equipment to the caption lease transactions, less residual value received in advance.

Banco Votorantim S.A. Notes to the quartely consolidated financial statements (In thousands of Reais)

a. Assets Up to 90 days

From 91 to 360 days

From 1 to 3 years

From 3 to 5 years

Over 5 years

Total

124,913

-

-

-

-

124,913

11,991,540

5,312,726

338,257

-

-

17,642,523

3,437,916

1,555,432

-

-

-

4,993,348

6,557,033

2,100,488

-

-

-

8,657,521

750,160

1,034,615

-

-

-

1,784,775

792,272 454,159

622,191 -

338,257 -

-

-

1,752,720 454,159

6,519,914 1,363,769 5,156,145

2,212,306 1,315,078 897,228

6,849,864 5,502,329 1,347,535

2,845,938 1,999,590 846,348

6,735,168 2,556,312 4,178,856

25,163,190 12,737,078 12,426,112

310,864 55,252 1,969 40,628

1,084,005 228,184 780 -

479,237 375,465 22 -

294,969 292,879 -

73,308 73,308 -

2,242,383 1,025,088 2,771 40,628

113,977

736,838

41,023

56

-

891,894

57,068 41,970 -

2,254 115,949 -

62,705 22

2,034 -

-

59,322 222,658 22

Interbank accounts/Relations

6,254,108

-

-

-

-

6,254,108

Loans

9,796,147

16,606,450

24,361,252

6,643,488

2,078,720

59,486,057

Lease Operations

2,930,672

270,293

439,445

63,854

-

3,704,264

Allowance for loan losses

(969,858)

(528,808)

(754,306)

(248,994)

(106,589)

(2,608,555)

Other receivables Foreign exchange portfolio Income receivable NIV Other Allowance for loan losses

5,747,526 2,336,270 140,252 2,215,889 1,093,558 (38,443)

1,107,612 1,116,585 (8,973)

2,865,212 2,865,212 -

616,945 616,945 -

140,433 140,433 -

10,477,728 2,336,270 140,252 2,215,889 5,832,733 (47,416)

255,369

51,392

985,182

300,892

16,875

1,609,710

-

-

-

-

242,785

242,785

42,961,195

26,115,976

35,564,143

10,517,092

9,180,700

124,339,106

Cash Interbank funds applied Purchase and sale commitments – own portfolio Purchase and sale commitments Financed operations Purchase and sale commitments - free movement Interbank deposits Foreign currency investments Securities Trading securities Securities available for sale Derivative financial instruments Differential from swap Term currency contracts Purchase of options - shares Purchase of options – financial assets/goods Credit derivatives NDF Other

Other assets Permanent assets Total

Banco Votorantim S.A. Notes to the quartely consolidated financial statements (In thousands of Reais)

b. Liabilities Up to 90 days

From 91 to 360 days

From 1 to 3 years

From 3 to 5 years

Over 5 years

Total

5,319,739 379,299 1,000,953 3,939,384 103

14,929,861 1,169,483 13,760,378 -

4,590,890 18,598 4,572,292 -

111,549 3,575 107,974 -

13,545 325 13,220 -

24,965,584 379,299 2,192,934 22,393,248 103

18,185,743

18,529,739

3,413,108

179,969

214,843

40,523,402

9,848,629 7,551,837 785,277

16,309,920 1,144,936 1,074,883

3,412,785 323

179,969 -

187,134 27,709

29,938,437 8,696,773 1,888,192

Acceptances and endorsements

2,008,959

4,783,771

6,921,399

4,095,426

83,099

17,892,654

Interbank accounts/Relations .

82,814

-

-

-

-

82,814

2,868,154

4,137,433

4,169,009

787,618

688,228

12,650,442

Derivative financial instruments Differential from swap Term currency contracts Purchase of options - shares Purchase of options – financial assets/goods Option box Credit derivatives NDF

2,127,350 1,082,929 19 50,630

2,517,835 176,129 586 575

384,138 320,980 -

178,448 178,418 -

117,082 117,082 -

5,324,853 1,875,538 605 51,205

93,574

724,487

15,109

30

-

833,200

791,788 23,906 84,504

1,559,288 38,481 18,289

39,319 8,730

-

-

2,390,395 62,387 111,523

Other liabilities Collection and levy of taxes and alike Foreign exchange portfolio Social and statutory Tax and social security NIV Subordinated debts Other

5,109,022 32,069 1,611,332 203,389 1,758,173 261,330 1,242,729

1,329,480 484,602 616,210 1,878 34,436 192,354

2,985,722 861,757 2,045,751 78,214

1,158,122 63,252 1,094,870 -

3,566,548 29,310 3,537,238 -

14,148,894 32,069 2,095,934 203,389 3,328,702 263,208 6,712,295 1,513,297

32,309

-

-

-

-

32,309

-

-

-

-

8,718,154

8,718,154

35,734,090

46,228,119

22,464,266

6,511,132

13,401,499

124,339,106

Deposits Demand deposits Interbank deposits Time deposits Other deposits Money market repurchase commitments Own portfolio Third-party portfolio Free portfolio

Liabilities from borrowings and onlendings

Deferred income Shareholders' equity Total

Banco Votorantim S.A. Notes to the quartely consolidated financial statements (In thousands of Reais)

31

Loan operations income 09/30/2011 Advances to depositors Loans Discounted securities Loans and financing Export financing Financing operations in foreign currency Rural financing agreements Income from credit assignments Recovery of loans written off Income from real estate project financing Income from rights arising from share loans Other (a) Total

158 2,251,185 6,792 5,270,491 431,999 25,746 93,764 847,009 131,925 14,043 5,847 (884,652) 8,194,307

09/30/2010 62 1,696,221 3,446 3,752,615 244,899 4,490 46,387 962,034 107,914 8,064 (753,006) 6,073,126

(a) Refer basically to revenue and costs related to the production of credit transactions.

32

Lease operations income 09/30/2011 Income from consideration Profit on sale of leased assets Income with excess depreciation Other Total

678,390 540,399 441,650 (31,838) 1,628,601

09/30/2010 513,325 210,119 1,253,893 31,039 2,008,376

Banco Votorantim S.A. Notes to the quartely consolidated financial statements (In thousands of Reais)

33

Securities income 09/30/2011 Money market repurchase agreements Interbank deposits Fixed income securities Securities overseas Variable income securities Investments in investment funds Adjustment to market value Other Total

34

1,297,673 87,545 1,620,102 320,900 398,737 301,099 81,853 (17,029) 4,090,880

09/30/2010 942,847 81,728 1,538,469 263,471 26,703 206,802 41,380 7,707 3,109,107

Income from derivative financial instruments 09/30/2011 Swap contracts Forward contracts Futures contracts Agreements of share options Option agreement – financial assets/goods Credit derivatives “Box” of options NDF- Non Deliverable Forward Adjustment to market (book) value Other Total

4,630 4,068 (1,328,128) (10,977) 123,528 11,656 (276,454) 33,702 1,077,013 (2,356) (363,318)

09/30/2010 (512,101) (9,052) (857,848) (21,377) 27,551 30,941 (330,393) (2,453) 187,871 (11,767) (1,498,628)

Banco Votorantim S.A. Notes to the quartely consolidated financial statements (In thousands of Reais)

35

Foreign exchange income 09/30/2011 Income from exports Income from imports Financial income (loss) Variations and differences in rates Cash and cash equivalents in foreign currencies Other Total

36

31,432 7,489 (200) 10,220 46,319 204 95,464

09/30/2010 18,011 4,820 (542) (17,764) 34,951 (1,960) 37,516

Expenses on funding from the market 09/30/2011 Securities transactions overseas Interbank deposits Time deposits Purchase and sale commitments Agribusiness credit bills (LCA) Real estate credit note Financing bills Debentures Adjustment to market value Other Total

(1,417,070) (107,892) (2,164,860) (3,309,882) (125,301) (266) (506,511) (474,361) 219,520 (24,309) (7,910,932)

09/30/2010 13,737 (56,228) (1,767,764) (2,214,996) (107,732) (3,228) (40,853) (316,032) (23,424) (4,516,520)

Banco Votorantim S.A. Notes to the quartely consolidated financial statements (In thousands of Reais)

37

Expenses with loans, assignments and onlendings 09/30/2011 Domestic loans Foreign borrowings National Treasury Onlendings BNDES Onlendings Onlending - FINAME Obligations to foreign bankers Adjustment to market value Foreign exchange Total

38

(754) (563,603) (3,506) (195,995) (115,863) (108,678) (24,156) 228,139 (784,416)

09/30/2010 (3,725) (73,642) (492) (190,176) (79,762) (33,256) (2,573) 248,999 (134,627)

Lease expenses 09/30/2011 Depreciation of leased assets Amortization of leased assets Income (loss) on sale of leased properties Other Total

(1,206,962) (1,922) (600) (40,621) (1,250,105)

09/30/2010 (1,426,524) (1,201) (82) (94,898) (1,522,705)

Banco Votorantim S.A. Notes to the quartely consolidated financial statements (In thousands of Reais)

39

Income from rendered services 09/30/2011 Management of investment funds Collection income Commissions on placing of securities Brokerage of Stock Exchange transactions Income from custody services Income from guarantees granted Credit card transactions Commissions receivable Financial advisory Income from banking services Other Total

40

70,599 7,826 48,958 19,427 401 104,495 13,773 1,729 7,559 13,629 29,968 318,364

09/30/2010 77,951 3,968 40,167 22,555 256 112,665 9,088 2,920 7,895 107,320 22,588 407,373

Income from banking fees 09/30/2011

09/30/2010

Individual Master file registration Transfers Contract amendments Appraisal of assets Credit cards Other

618,466 402,040 1 7,519 170,035 16,561 22,310

556,800 428,937 1 9,611 108,192 10,059 -

Legal entity Master file registration Transfers Appraisal of assets Other Total

21,776 9,929 8,716 2,501 630 640,242

10,415 8,358 600 1,238 219 567,215

Banco Votorantim S.A. Notes to the financial statements (In thousands of Reais)

41

Personnel expenses 09/30/2011 Fees Benefits Social charges Dividends Training Total

42

(20,286) (99,107) (138,653) (388,730) (2,765) (649,541)

09/30/2010 (19,718) (82,560) (114,528) (329,471) (4,540) (550,817)

Other administrative expenses 09/30/2011 Water, energy and gas Rents Communications Maintenance and preservation of assets Material Data processing Promotions and public relations Advertising and publicity Publications Insurance Services of the financial system Outsourced services Surveillance and security Specialized technical services Transportation Traveling Judicial/notary public fees Amortization Depreciation Other Total

(3,910) (99,930) (74,347) (13,623) (4,127) (112,108) (13,729) (7,456) (940) (8,695) (144,151) (13,049) (4,593) (341,324) (17,933) (26,708) (139,393) (14,546) (14,951) (79,218) (1,134,731)

09/30/2010 (3,749) (75,952) (72,572) (10,070) (3,453) (79,636) (15,774) (29,774) (1,776) (19,199) (135,969) (14,520) (2,893) (309,064) (15,416) (27,512) (96,321) (10,032) (10,773) (75,167) (1,009,622)

Banco Votorantim S.A. Notes to the financial statements (In thousands of Reais)

43

Tax expenses 09/30/2011 ISS PIS COFINS Federal taxes State taxes Local taxes Foreign taxes Price-level restatement of liabilities Other Total

44

(50,735) (42,427) (261,075) (4,563) (60) (3,593) (163) (90,763) (19,893) (473,272)

09/30/2010 (42,615) (41,060) (253,476) (3,688) (26) (3,581) (277) (59,202) (7,365) (411,290)

Other operational income 09/30/2011 Recovery of charges and expenses Foreign exchange variation of foreign investment Reversal of provision for contingent liabilities Monetary variation assets Reimbursement of costs associated Other income Total

282 126,253 5,542 48,949 31,661 3,188 215,875

09/30/2010 567 24,167 3,704 3,224 8,384 7,483 47,529

Banco Votorantim S.A. Notes to the quartely consolidated financial statements (In thousands of Reais)

45

Other operational expenses 09/30/2011 Costs associated with production Provision for contingent liabilities Foreign exchange variation of foreign investment Civil reparations Other

Total

46

(1,671) (77,516) (46,462) (54,167) (57,998) (237,814)

09/30/2010 (3,252) (36,658) (43,517) (24,256) (24,507) (132,190)

Non-operating results 09/30/2011 Disposal of assets Sales of investments Investment in tax incentive Other

Total

(21,982) 84 10,253 21,363 9,718

09/30/2010 (52,170) 116 12,135 12,793 (27,126)

Banco Votorantim S.A. Notes to the quartely consolidated financial statements (In thousands of Reais)

47

Income and social contribution taxes a. Charges due on operations 09/30/2011 Income before income tax, social contribution and interest

09/30/2010

647,716

1,452,981

Charges at the current nominal rate

(259,086)

(581,192)

Exclusions / (Additions)

(127,001)

281,634

(57,343) 9,201 (95,794)

(271,473) 10,540 20,283

Derivatives - Adjustment to market value Market adjustments for loans analysis Market adjustments for lease Profit sharing Allowance for doubtful accounts Provision for assigned credit losses Provision for contingencies Derivatives – Cash basis Excess (insufficient) depreciation Income from foreign branches Other

(318,540) 368,405 48,712 108,231 (429,254) (45,239) (30,509) (7,528) 110,412 (12,522) 224,767

(27,962) 17,308 57,841 123,042 (197,384) (9,929) (13,581) (18,759) 313,473 29,955 248,280

Current income and social contribution taxes

(386,087)

(299,558)

Deferred income and social contribution taxes

(69,398)

(397,361)

Total income and social contribution taxes

(455,485)

(696,919)

Tax losses for income tax Negative basis for social contribution Market adjustments of securities

Banco Votorantim S.A. Notes to the quartely consolidated financial statements (In thousands of Reais)

b. Deferred income and social contribution taxes with an impact on result in the period 09/30/2011

09/30/2010

Tax credit Additions / (Exclusions) Tax losses for income tax Negative basis for social contribution Market adjustments of securities Derivatives - Adjustment to market value Profit sharing Allowance for doubtful accounts Provision for assigned credit losses Provision for contingencies Derivatives – Cash basis Compensation excess (insufficient) depreciation offsetting Income from foreign branches Other Total

57,343 (9,201) 236,043 429,254 45,239

271,473 (10,540) (898) 44,469 (114) 197,384 9,929

30,509 (1,600)

13,581 (8,395)

(270,712) 12,522 4,223

(29,955) (80)

533,620

486,854

Banco Votorantim S.A. Notes to the quartely consolidated financial statements (In thousands of Reais)

09/30/2011

09/30/2010

Deferred tax obligation Additions / (Exclusions) Market adjustments of securities Derivatives - Adjustment to market value Market adjustments for loans analysis Derivatives – Cash basis Excess (insufficient) depreciation Compensation excess (insufficient) depreciation offsetting Total

95,794 82,497 (417,117) 9,128 (110,412)

(19,386) (16,507) (75,149) 27,154 (313,473)

270,712

-

(69,398)

(397,361)

Banco Votorantim S.A. Notes to the quartely consolidated financial statements (In thousands of Reais)

c. Deferred income and social contribution taxes with effects on equity accounts in the period 09/30/2011

09/30/2010

Assets (Other credits - Sundry) Opening balance Tax losses for income tax Negative basis for social contribution Market adjustments of securities Derivatives - Adjustment to market value Profit sharing Allowance for doubtful accounts Provision for assigned credit losses Provision for contingencies Derivatives - Cash basis Income from foreign branches Compensation excess (insufficient) depreciation offsetting Other Closing balance

2,120,104

1,788,321

57,343 (9,201) 236,043 429,254 45,239 30,509 (1,600) 12,522

271,473 (10,540) (50,567) 8,287 (114) 197,384 9,929 13,581 (8,395) (29,955)

(270,712) 4,223 2,653,724

(80) 2,189,324

Banco Votorantim S.A. Notes to the financial statements (In thousands of Reais)

09/30/2011

09/30/2010

Liabilities (Other liabilities - Tax and social security) Opening balance Market adjustments of securities Derivatives - Adjustment to market value Market adjustments for loans analysis Derivatives – Cash basis Excess (insufficient) depreciation Compensation excess (insufficient) depreciation offsetting Closing balance

1,164,706

753,695

(59,395) (82,497) 417,117 (9,128) 110,412

10,657 (19,675) 75,149 (27,154) 313,473

(270,712) 1,270,503

1,106,145

Banco Votorantim S.A. Notes to the quartely consolidated financial statements (In thousands of Reais)

d. Composition of tax credit 09/30/2011 Tax losses for income tax Negative basis for social contribution Derivatives - Adjustment to market value Allowance for doubtful accounts Provision for assigned credit losses Provision for contingencies Derivatives – Cash basis Provision for legal obligation Income from foreign branches Compensation excess (insufficient) depreciation offsetting Other Total

891,171 47,587 238,763 1,255,912 77,274 73,984 223,003 107,010 (270,712) 9,732 2,653,724

09/30/2010 775,434 62,559 10,202 969,435 19,921 53,838 8,141 223,003 64,533 2,258 2,189,324

e. Tax credit collection expectation Nominal value

Present value

In 2011

196,981

191,865

In 2012

699,675

619,249

In 2013

654,597

520,257

In 2014

297,581

211,622

In 2015

238,829

152,237

As of 2016

566,061

262,798

2,653,724

1,958,028

Total

Banco Votorantim S.A. Notes to the quartely consolidated financial statements (In thousands of Reais)

f. Breakdown of deferred tax liabilities 09/30/2011

Market adjustments of securities Derivatives - Adjustment to market value Market adjustments for loans analysis Derivatives – Cash basis Compensation excess (insufficient) depreciation offsetting Excess (insufficient) depreciation Total

20,827 67,869 547,440 2,705 (270,712) 902,374 1,270,503

09/30/2010

21,893 59,575 287,928 15,768 720,981 1,106,145

Banco Votorantim S.A. Notes to the quartely consolidated financial statements (In thousands of Reais)

48

Related party transactions Related party transactions are carried out at usual market values, terms and average rates in effect at the respective dates and in commutative conditions. Income / (expenses)

Assets / (liabilities) 09/30/2011 Cash Banco do Brasil S.A. and subsidiaries Interbank investments Banco do Brasil S.A. and subsidiaries BV Financeira S.A. - Crédito, Financiamento e Investimento Securities and derivative financial instruments Votorantim Finanças S.A. and subsidiary companies BV Leasing Arrendamento Mercantil S.A. Banco Votorantim - Nassau Branch Deposits Banco do Brasil S.A. and subsidiary companies Votorantim Finanças S.A. and subsidiaries BV Financeira S.A. - Crédito, Financiamento e Investimento BV Leasing Arrendamento Mercantil S.A. Votorantim C.T.V.M. Ltda. Votorantim Asset Management D.T.V.M. Ltda. Banco Votorantim - Nassau Branch BV Participações S.A. and subsidiaries Obligations related to committed operations Banco do Brasil S.A. and subsidiaries Votorantim Finanças S.A. and subsidiaries BV Financeira S.A. - Crédito, Financiamento e Investimento

09/30/2010

09/30/2011

09/30/2010

330

4.829

-

-

5.136.969

250.000

55.288

15.445

40.428.987

29.293.686

-

826.625

-

915

(39)

32

-

16,461,737 275,360

-

418,833 (1,123)

(5,698,066)

(255,706)

(2,500)

(2,825)

(179,817)

(1,364,626)

(15,371)

(36,096)

(985)

(2,136)

-

-

(581) (214,713)

(90) (219,513)

-

(6,457)

(73,944) (7) (201,159)

(58,256)

(1,695)

(120,558)

(13,660)

(10,185,207)

(133,456)

(4,347)

(5,240)

(299,331)

(612,412)

(61,908)

(16,779)

(1,743,534)

(1,167,621)

-

(29,825)

(3,141)

Banco Votorantim S.A. Notes to the quartely consolidated financial statements (In thousands of Reais)

Assets / (liabilities)

Income / (expenses)

09/30/2011

09/30/2010

09/30/2011

09/30/2010

Foreign exchange acceptances, Real Estate and Mortgage Notes, Debentures and Other Banco do Brasil S.A. and subsidiaries Banco Votorantim - Nassau Branch

-

(270,770) (714,662)

-

(7,228) -

Liabilities from borrowings and onlendings Banco Votorantim - Nassau Branch

-

(115,935)

-

(892)

(479,162)

(35,681)

27,793

16,972

(1,572,086)

1,503,230

(5,004)

385,313

-

(16,677,460) 39,839 (191,856)

-

(668,890) 1,746 33,151

(13,143,494)

(322,840)

(168,877)

15,164

(1,521)

(288)

520

(51)

-

(55,154)

-

-

-

55,970

-

-

-

7,691 1,166

-

-

(10,370)

3,257 (3,356)

-

-

Service income BV Participações S.A. and subsidiaries

-

-

(54,927)

19,655

Revenues / (Expenses) Rent BV Participações S.A. and subsidiaries

-

-

468

(678)

-

-

1,298,664

1,425,397

Derivative financial instruments Banco do Brasil S.A. and subsidiaries Votorantim Finanças S.A. and subsidiaries BV Leasing Arrendamento Mercantil S.A. Votorantim C.T.V.M. Ltda. Banco Votorantim - Nassau Branch Foreign exchange portfolio - Liability position Banco do Brasil S.A. and subsidiaries Votorantim Finanças S.A. and subsidiaries Other values to receive (payable) from Associated Companies Banco do Brasil S.A. and subsidiaries BV Financeira S.A. - Crédito, Financiamento e Investimento BV Leasing Arrendamento Mercantil S.A. Votorantim C.T.V.M. Ltda. Votorantim Asset Management D.T.V.M. Ltda. BV Participações S.A. and subsidiaries

Loans (Gross income from assignment)

Banco do Brasil S.A. and subsidiaries

Banco Votorantim S.A. Notes to the financial statements (In thousands of Reais)

b. Remuneration of management key personnel On September 30, 2011, Banco Votorantim spent R$ 31,277 as remuneration of Management key personnel. 09/30/2011 Fees Bonuses Social charges

(6,705) (17,262) (7,310)

Total

(31,277)

c. Employee´s benefits There are no post-employment benefits, such as pensions, other retirement benefits, post employment life insurance and medical care, other long-term benefits to employees and managers, including long service leave and other leaves, jubilee or other benefits per years of service, share-based remuneration and rescission of contract benefits, except those provided for in collective bargaining of the category.

Banco Votorantim S.A. Notes to the quartely consolidated financial statements (In thousands of Reais)

49

Related credit transactions Bank operates with related credit transactions pursuant to CMN Resolution no. 2921/02 of CMN. On September 30, 2011 the balances of restricted operations on assets and of funds raised for investment, as well as respective results determined, were composed of the following amounts: 09/30/2011 Assets / Income / liabilities (expenses) Related credit transactions Loan operations

81,491

1,491

Liabilities from restricted operations on assets Time deposits

81,355

(1,354) 137

Net income (loss) of related transactions

On September 30, 2011, there were no delinquent restricted operations on assets, or challenge in court involving the asset operations or the funds raised for investment in these operations. There were no restricted operations on assets recorded on September 30, 2010.

50

Contingent assets and liabilities and legal obligations a. Breakdown of contingent liabilities classified in the probable risk category and presented in Other liabilities - Sundry. 09/30/2011

09/30/2010

Tax contingencies (a) Civil contingencies (b) Labor contingencies (c)

3,651 52,685 129,474

13,746 54,026 77,143

Closing balance

185,810

144,915

Banco Votorantim S.A. Notes to the quartely consolidated financial statements (In thousands of Reais)

(a) In the Consolidated, they refer to inspections of Tax Authorities in relation to taxes charged on their activities, such as: IRPJ (income tax), CSL (social contribution) and ISSQN (service tax of any nature). (b) The Consolidated refers to, basically, to collection actions. (c) In the Consolidated, they mostly refer to lawsuits filed by former employees involving indemnities, overtime, working time exemption, supplement per function and representation, among other matters.

b. Changes in contingent liabilities classified in the probable risk category in the period Tax claims

Opening balance Constitutions Reversals Restatements Closing balance

Civil claims

Labor claims

09/30/2011

09/30/2010

09/30/2011

09/30/2010

09/30/2011

09/30/2010

6,413

13,208

23,290

49,714

83,988

75,902

1,934 (4,841) 145

374 164

29,395 -

4,312 -

46,187 (701) -

1,241 -

3,651

13,746

52,685

54,026

129,474

77,143

Banco Votorantim S.A. Notes to the quartely consolidated financial statements (In thousands of Reais)

c. Breakdown of contingent liabilities classified in the possible risk category 09/30/2011

09/30/2010

Tax contingencies (a) Civil contingencies (b) Labor contingencies (c)

687,794 100,426 43,379

167,280 36,502 2,620

Closing balance

831,599

206,402

(a) In the Consolidated, basically refer to tax issues: IRPJ/CS on equity investments overseas in the amount of R$182,955 and IRPJ/CS on contingent COFINS and inflation adjustment amounting to R$372,141. (b) The Consolidated refers to, basically, to collection actions. (c) In the Consolidated, they mostly refer to lawsuits filed by former employees involving indemnities, overtime, working time exemption, supplement per function and representation, among other matters.

d. Breakdown of legal obligations presented in Other liabilities – Tax and social security 09/30/2011

09/30/2010

Fiscal issues (a)

1,490,873

1,313,902

Closing balance

1,490,873

1,313,902

(a) Refer, basically, to claims of non-payment of Cofins based on the revenues not derived from monthly invoicing (expansion of the calculation basis introduced by Law 9718/98).

Banco Votorantim S.A. Notes to the quartely consolidated financial statements (In thousands of Reais)

e. Judicial deposits presented in Other credits - Sundry 09/30/2011

09/30/2010

Tax contingencies Civil contingencies Labor contingencies Other

388,999 47,088 31,947 143

75,757 22,781 15,904 138

Total

468,177

114,580

f. Contingent assets There is no contingent asset recorded.

g. Other commitments The Bank filed at the Internal Revenue Service its adhesion to the Special Installment Payment Program - PAES, created by Law 10684/03, of the Federal Government. Adhesion to the program allowed the scheduling of PIS, relating to the period from January 2000 to January 2003. The amount included in the program is R$ 5,186.

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