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Financial Statements 4Q07

NOTE 29 – Other Information

29.a) New Market

At 5.31.2006, Banco do Brasil signed a contract with the São Paulo Stock Exchange for adhesion to the New Market segment of Bovespa, which assembles a group of companies with the best corporate governance practices in Brazil.

Moreover, Banco do Brasil, the Controlling Shareholder, the Officers, and the members of the Audit Committee undertake to resolve all and any dispute or controversy related with the New Market Listing Regulation by means of the Arbitration Chamber of the Bovespa Market, in conformity with a commitment clause contained in the By-laws of Banco do Brasil.

29.b) Distribution of Dividends and/or Interest on Own Capital

During a meeting held on 3.19.2007, the Board of Directors approved the setting, for the year 2007, of the payout rate equivalent to the minimum percentage of 40% of net income, fulfilling the policy for payment of dividends and/or interest on own capital on a quarterly basis, pursuant to art. 43 of the Bank's By-Laws.

29.c) Split of BB Shares

On April 25, 2007, a General Meeting of Shareholders of the Bank decided to split the shares (BBAS3) representing the capital stock of this company, in the proportion of 1:3, i.e. two new shares for each existing share. Said split was performed on the stock exchange on June 4, 2007. There was no split of the series C subscription bonuses (BBAS13). The valid proportion was altered in the case of potential exercising of this security for 3.131799 common shares for each subscription bonus.

29.d) Public Offering of Shares

The Public Secondary Offering of Common Shares issued by Banco do Brasil was settled on December 19, 2007. According to procedures provided for in CVM Instruction 400, of December 29, 2003, as amended, the Offering was conducted in an unorganized over-the-counter market, in Brazil, under the joint coordination of BB Banco de Investimento S.A., Banco UBS Pactual S.A. and Deutsche Bank S.A.

The Offering initially comprised of 104,660,869 ordinary, registered, represented in dematerialized form with no par value, issued by Banco do Brasil S.A, of which 89,617,391 shares were held by BNDES Participações S.A. – BNDESPAR, already included the 17,443,478 additional shares and the 15,043,478 shares held by Caixa de Previdência dos Funcionários do Banco do Brasil –Previ, at the price of R$ 29.25 per share. Furthermore, on January 19, 2008, UBS Pactual fully exercised an overallotment option of 13,082,608 ordinary shares, of which 10,826,086 supplementary shares were held by BNDESPAR and 2,256,522 were held by Previ. Taking into account the shares and the supplementary shares, the total number of distributed shares was 117,743,477 and the total value of the Offering was R$3,443,996,702.25.

Final information related to the Public Secondary Offering of Common shares issued by Banco do Brasil:

29.e) Study of Merger of Besc

On April 19, 2007, after discussions held with the Treasury Department of the State Government of Santa Catarina, the National Treasury Secretariat informed a decision relating to the development of studies geared toward the merger of Banco do Estado de Santa Catarina S.A (BESC) and of Besc S.A - Crédito Imobiliário (BESCRI) by Banco do Brasil S.A.

On 10.5.2007, the Bank communicated the signing by the National Treasury Secretariat, State Government of Santa Catarina and Banco do Brasil S.A., of a Rider to the Contract of the Program for Incentive of Reduction of the State Public Sector in the Banking Activity - PROES, relating to Banco do Estado de Santa Catarina S.A. - Besc e Besc S.A. Crédito Imobiliário - Bescri. The measure forwards the removal of Besc and of Bescri from the National Privatization Program - PND and its effectiveness is contingent upon the issuance of a specific Resolution of the Federal Senate as well as a Presidential Decree, which will permit the start of the merger process of Conglomerado Besc by Banco do Brasil S.A. The deadline established to finalize the merger process will be 12 months as of the date the last appraising company is contracted.

29.f) Studies for acquisition of BRB

On September 04, 2007, the Government of Distrito Federal expressed itself in favor of the start of studies relating to the acquisition of the controlling interest of Banco de Brasília S.A - BRB by Banco do Brasil S.A, in compliance with the applicable legal norms and other conditions inherent to transactions of this nature.

29.g) Studies for merger of BEP

On September 06, 2007, after discussions held with the Treasury Department of the State of Piauí, the National Treasury decided to develop studies geared toward the merger of Banco do Estado do Piauí (BEP) by Banco do Brasil S.A.

29 h) Prepayment of "C" Bonds.

The Stockholders' Meeting of 10.23.2007 approved a proposal forwarded by the Board of Directors for bringing the exercise of "C" Bonuses forward, allowing the holders of these Bonuses, at their sole discretion, to exercise their right in the period between November 1 and 30, 2007, observing the conditions approved at the Extraordinary General Meeting of 6.17.1996. Said proposal did not abolish the exercise right in the period originally foreseen, from 03.31.2011 to 06.30.2011, for the remaining "C" Bonuses.

On December 6, 2007, Banco do Brasil disclosed the result of the "C" Bonus subscription for the year: "C" Bonds exercised (BBAS13): 21,148,315; Underwriting Receipt (BBAS11): 66,232,261; "C" Bonds not exercised: 5,880,431. The Stockholders' Meeting held on January 24, 2008 approved the capital increase for conversion of Subscription Receipts (BBAS11) into shares, to be submitted for the Central Bank of Brazil's approval.

29.i) Equity Interest

As prescribed in paragraphs IV, V, VI and VII of Article 40 of the Bank's by-laws, the shareholding positions are as follows:

Paragraph IV: Shareholdings at March 31, 2007 of all those who hold, directly or indirectly, more than 5% of capital:

Paragraph V: number and characteristics of the securities issued by the Bank and directly or indirectly held by the controlling stockholder, management and members of the Fiscal Council; and

Paragraph VI: changes in ownership of the parties referred to in the previous paragraph of these securities during the preceding twelve months:

29 j) Changes in the Corporate Law

Law no. 11,638 published in the Federal Official Gazette dated December 28, 2007 changed, revoked, and introduced a number of provisions in the Corporate Law (law 6404/76), to become effective as of January 1, 2008. This new law made material changes to the rules for recognizing and measuring equity items, as well as to the presentation of financial statements.

Several of these changes are already voluntarily adopted by the Bank and its controlled companies, such as for example the submission of Cash Flow Statements and of Value-Added Statements In addition, by order of the Central Bank, we have already performed the ratings and mark-to-market procedures on our financial instruments.

We list below the changes which in our opinion will bring changes to the criteria for calculating our equity and financial position, and to the presentation of our financial statements as of the December 31, 2008 fiscal year-end.

- The items in assets and liabilities arising from long-term transactions and short-term transactions with relevant effects will be adjusted to their present value;

- The recoverable value of assets and rights in fixed assets, intangibles, and deferred items should be assessed regularly in order to record potential losses or to review depreciation, amortization, and depletion criteria and rates;

- In Acquisition, Merger, and Spin-off transactions between independent parties, and with the actual transfer of control, the assets and liabilities of the acquired, merged, or spun-off entity will be stated at its fair market value;

- The assets arising from transactions which transfer to the company benefits, risks, and the control thereof, will also be stated in fixed assets. It is our understanding that the assets acquired through financial leasing agreements are covered by this definition;

- An intangible sub-group was created in fixed assets to record those intangible assets intended for the company's maintenance or employed with this purpose, including acquired goodwill;

- The "revaluation reserve" in shareholders' equity was eliminated, and an account named "adjustments to shareholders' equity valuation" was created, which will record the counterparts to the increases or decreases of the sum attributed to items in assets and liabilities, as a result of their assessment at fair market prices, while they are not included in the year's profit figures in compliance with the accrual system;

- Fiscal incentives will no longer be stated as capital reserves. Such incentives will be recognized in the fiscal year's profit figures, and pursuant to a proposal by management bodies the Shareholders' Meeting may allocate the portion of profits in connection with these incentives to the creation of a Fiscal Incentives Reserve, created as a part of profit reserves, and which may be left out of the calculation base for the mandatory dividends.

We are studying the changes made by Law 11,638/2007, in order to assess its effects. An initial assessment led us to estimate that such changes will not give rise to material effects on our December 31, 2008 financial statements.

It is our understanding that the application of several legal provisions will depend on their regulation by the regulatory bodies, specifically the Central Bank and the Securities Commission, and at this time it is not possible to determine the effects on the Bank's profit figures and stockholders' equity for fiscal year-end December 31, 2007.

29.i) On November 27, 2007 the Federal Official Gazette published the Central Bank's approval for the creation of three companies in the city of White Plains, in the state of New York, USA, as the Bank's indirect wholly-owned subsidiaries (with an interest held by Banco do Brasil's branch in Vienna, Austria) named BB USA Holding Company, Inc., BB Money Transfers, Inc., and Banco do Brasil Federal Savings Banks, and the creation of a shared service unit named BB USA Servicing Center, in the city of Orlando, in the state of Florida, USA. Up to December 31, 2007 the applications for the licenses from the Austrian and US authorities had not been concluded yet.

 
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