Influencia extranjera

Banco do Nordeste do Brasil S.A. is a multi-service special purpose development bank with operations primarily focused on the Northeast region of Brazil. We provide a comprehensive portfolio of products and services to individuals, companies and the federal, state and municipal governments in Brazil. We are controlled by the Brazilian Government and we act as an agent for implementation of the Brazilian Government's development policies and programs for the Northeast region. As part of the Brazilian Government's plans to facilitate development in this region, we provide competitive financing to small and micro agricultural businesses and infrastructure projects at lower costs than those available from private sector banks and lenders due to our significant funding from the Brazilian Government. Our operations are focused on financing the productive sectors in the Northeast region (including the rural, industrial and commercial sectors), mainly through long- and short-term loans and capital markets transactions. As of December 31, 2011 and 2010, we had total assets of R$26.4 billion and R$23.8 billion and shareholders' equity of R$2.3 billion and R$2.2 billion, respectively. For the years ended December 31, 2011 and 2010, our net income was R$314.8 million and R$313.6 million, respectively.

In addition to our own lending operations, we manage certain of the Brazilian Government's funds and programs, including the FNE (Constitutional Fund for the Financing of the Northeast) and the FINOR (Northeast Investment Fund) and we also act as lending agent for PRONAF (National Program to Strengthen Family Agent Cultures) and as loan analyst and administrator for the FDNE (Northeast Development Fund). All of these funds and programs are designed to foster economic and social development in Brazil and particularly the Northeast region for various sectors, activities and clients, ranging from small family farms to large infrastructure projects.

We are the exclusive manager of the FNE, the most significant Brazilian Government fund involved in our operations, whose net worth (which is equivalent to its assets) totaled R$37.7 billion as of December 31, 2011. In exchange for being a disbursing agent responsible for approving and allocating the FNE's funds to low-cost loans for economic and social development in the Northeast region, we earn (i) annual management fees of 3.0% of FNE's total net worth (which were R$993.5 million for the year ended December 31, 2011 and R$816.8 million for the year ended December 31, 2010), limited to a maximum of 20% of proceeds annually transferred to FNE by the Brazilian Government based on collection of income and IPI taxes; and (ii) a "del credere" fee for bearing the credit risk associated with certain of these transactions. Although the assets of the FNE (including loans we make using its funds) are not part of the credit underlying the Notes and the FNE is not a guarantor of the Notes, these fees payable to us constitute stable and significant sources of income for us, as our exclusive management relationship with the FNE cannot be changed except by legislative action by the Brazilian Congress. The fees we earned for our roles as manager for FINOR, lending agent for PRONAF and loan analyst and administrator for FDNE totaled R$112.6 million for the year ended December 31, 2011 and R$106.3 million for the year ended December 31, 2010 and, consequently, are much less significant to our operations than that derived from our relationship with FNE. We believe that our management of FNE and other Brazilian Government funds and programs provides us with unique opportunities to gain know-how and cross-sell our products to a large base of potential corporate and individual clients in the Northeast region.

We are one of the largest and most active banks in the Northeast region of Brazil in terms of market share, according to Central Bank information as of December 31, 2011, with a R$11.8 billion loan portfolio as of that date.

According to the Central Bank, we are the primary domestic source of long-term financing in the Northeast region, with a loan portfolio representing a market share of approximately 19.2% of the total long-term financing portfolio in the entire Northeast region as of December 31, 2011 or 67.4% when considering our and the loan portfolio of the FNE together. Moreover, the entire Northeast region's GDP CAGR between December 31, 2005 and December 31, 2010 was 4.0%, 9.6% higher than the CAGR of Brazil (including the Northeast). We also expect that the increasing number of large corporate projects in the region will continue to require even more long-term financing, which we believe will provide us with the opportunity to further expand our leading position in the Northeast region.

Products and Services

Our principal products and services consist of the following:

• Loan operations, consisting of loans to micro, small, medium and large customers principally in the Northeast region of Brazil (we also have certain loans outstanding with customers in states

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outside of the Northeast region which do not, individually or in the aggregate, significantly contribute to our business), including:

• Industrial loans for purchases of machinery, equipment and raw materials and for plant modernizations, among others;

• Rural and agribusiness loans;

• Infrastructure loans to the federal, state and municipal governments;

• Commercial loans to businesses in the retail, wholesale and service sectors;

• Individual and consumer loans;

• Loan portfolios acquired from other financial institutions (particularly during the recent global financial crisis when certain institutions were facing liquidity constraints); and

• Other loan operations, including working capital products, foreign trade loans, urban microcredit loans for the services segment, guarantee accounts, bank credit notes (CCB – Cédulas de Crédito Bancário), home mortgage loans and loans to non-Bank employees under Group CDCs, among others.

• Management, lending agency and administration of, and loan analysis for, government funds and programs, most significantly the FNE, designed to provide low-cost loans to stimulate the economic and social development of the Northeast region. Depending on the fund or program, we are responsible for processing, disbursing, monitoring and collecting on loans made using Brazilian Government funds or through government programs, in exchange for management fees and, depending on the fund or program, additional del credere fees, which are based on the amount of our credit risk associated with certain loans.

• Banking services and capital markets activities, consisting of checking and savings accounts, time deposits, foreign exchange, wire transfers, collection services, online banking and, through third parties, the sale of private pension plans and savings bonds, in addition to structuring and distributing local debenture issuances and other short- and long-term bonds in the Brazilian capital markets.

• Asset management, consisting of management of third-party assets for small, medium and large investors (including governmental entities). We invest these assets in our private investment funds, usually consisting of debt or equity securities issued by publicly held Brazilian companies or Brazilian Government debt securities.

As of December 31, 2011, we offered services to our customers through our network, which consisted of 187 full service branches, and more than 20,000 automated teller machines ("ATMs") located in our branches or operated by our ATM service partners, Banco do Brasil, Caixa Econômica Federal and Banco 24 Horas. As of that date, our network served 1,990 cities in the Northeast region and we had 6,077 employees and 1,672,149 active lending, deposit and other customers (an increase from 1,174,415 as of December 31, 2010).

We believe that our large number of branches has enabled us to build a substantial client base to which we can offer our portfolio of products and services. In addition, we use our geographically broad branch network to conduct studies on the specific characteristics of the different cities and customers in the Northeast region. These studies allow us to target, plan and implement operations tailored to the specific needs of different areas, supporting what we believe can be sustainable economic growth and social development of local communities. We are also focused on strengthening our brand recognition by sponsoring local cultural events across the Northeast region, both directly and through programs like the BNB Culture Program (Programa BNB de Cultura), which has provided financing to 162 cultural projects in 7 cities between January 1, 2006 and December 31, 2011.

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Set forth below is a map showing our area of operations and branches:

  ^{State Branches}

The table below shows some of our financial and operational highlights as of and for the years ended December 31, 2011, 2010 and 2009: Shareholders' equity ... 2,329 2,177 2,073 Net income ... 315 314 459 Capital ratio (%)⁽³⁾... 16.6 13.6 13.0 Return on average equity (ROAE)⁽⁴⁾(%) ... 13.6 14.9 23.8 Return on average assets (ROAA)⁽⁵⁾(%) ... 1.3 1.5 2.7 (1) Includes short- and long-term, individual, consumer, rural and agribusiness, industrial, commercial and government loans.

(2) A loan is considered past due when it is overdue from 15 days to the date the loan is written off in full. In accordance with Central Bank Resolution 2,682, loans that will mature within 36 months and loans that mature after 36 months are written off in full when they become overdue by 360 days and 540 days, respectively. See "Other Statistical and Financial Information—Lending Operations—Past Due Loans."

(3) Capital ratio required by Central Bank corresponding to a minimum capital adequacy ratio of 11% of total risk-adjusted assets. See

"Other Statistical and Financial Information—Return on Equity and Assets—Capital Adequacy and Minimum Capital Requirements."

(4) Return on average equity is calculated as net income earned during the accounting period divided by our average equity.

(5) Return on average assets is calculated as net income earned during the accounting period divided by our average assets.

Bankruptcy, Liquidation or Dissolution

Law No. 6,024 of March 13, 1974, as amended, and Decree-Law No. 2,321 of February 25, 1987, as amended, empower the Central Bank to extra judicially intervene in the operations or to liquidate financial institutions owned by the private sector or Brazilian state governments (but not of the Brazilian Government). We, as a financial institution majority owned by the Brazilian Government, are not subject to intervention or to liquidation by the Central Bank. Furthermore, according to Law No. 11,101 of February 9, 2005, mixed-capital companies (sociedades de economia mista) and financial institutions such as ourselves are not subject to judicial and extrajudicial reorganization and bankruptcy proceedings. As a result, our creditors, including holders of Notes, cannot take advantage of the remedies contemplated by Law No. 11,101 against us, including petitioning for our winding-up, liquidation or dissolution.

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If a creditor obtains a final judgment against us, it may procure the attachment of our assets since they are subject to seizure and attachment. Further, if our debt remains unpaid, a creditor may attempt to procure payment from the Brazilian Government, as our controlling shareholder, for any unpaid amount. However, because there is no legal provision setting forth such liability on the Brazilian Government (the subsidiary liability of controlling shareholders of financial institutions is not applicable to those controlled by the Brazilian Government pursuant to Decree-Law No. 2,321 and Law No. 9,447 of March 14, 1997), there can be no assurance that, first, the proceedings for obtaining a final judgment against us or the Brazilian Government will be conducted in a timely manner, and, second, whether a Brazilian judicial authority would hold the Brazilian Government liable for our indebtedness.

Under Brazilian Law, mixed capital companies (sociedades de economia mista) such as us, which suffer losses, become dormant, develop activities that are either already fulfilled satisfactorily by the private sector or are not contemplated by their corporate purposes, may be dissolved or merged with another entity by the Brazilian Government (Article 178 of Decree-Law No. 200 of February 25, 1967).

Our Strengths

We believe our principal strengths are:

Leadership position. Among other market positions, we are:

• the largest and most active development bank in the Northeast in terms of loans provided (long term and short term), according to the Central Bank, as of December 31, 2011;

• the second largest bank in Brazil in terms of rural loans, according to the Central Bank, as of December 31, 2011;

• the 13^th largest bank in terms of total assets; the seventh largest bank in terms of total deposits growth; the 12^th largest bank in terms of total credit operations; the 13^th largest bank in terms of total deposits, in each case according to the Valor 1000 magazine, 2011 edition on the Brazilian banking industry; and

• the ninth largest bank in terms of number of branches; the tenthlargest bank in terms of loans for large companies; and the 13^th largest bank in terms of loans for medium-sized companies, in each case according to the Exame Melhores e Maiores magazine, 2011 edition; and

• with respect to our Crediamigo program:

• the best and second largest (in terms of the number of outstanding loans) microcredit program in Latin America and Caribbean, according to Microfinanzas magazine, in 2010;

and

• the largest microcredit program in South America, in terms of productive microcredit accounts (which excludes microcredit operations for consumers and home mortgage loans); third among the top microfinance institutions in the Forbes list of the Top 50 Microfinance Institutions in the world in 2007.

We believe that the market leadership and the resulting know-how from our broad network and focus on the Northeast region provides us with a strong brand recognition, significant market presence and the ability to sell a range of financing solutions to a broad client base.

Strong presence and growth in a growing geographic area. Through our presence in the Northeast region, we have experienced strong growth, with our loan portfolio almost tripling between December 31, 2006 and December 31, 2011. We believe we are well positioned to continue increasing our loan portfolio, given our experience in long-term lending, deep knowledge of the regional characteristics and needs of borrowers located in the Northeast region and widely recognized brand where we operate. The BrandFinance® Banking 500 included us among the 500 most valuable brands in the worldwide banking industry, a global ranking prepared by Brand Finance based on the branding value of publicly traded banks worldwide. Our position increased by 25 positions

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from 2010 to 2011 (from 349^th to 324^th) and we were ranked ninth among Brazilian banks. Moreover, the CAGR of the Northeast region's GDP has outpaced that of Brazil and has attracted large amounts of private investments through significant infrastructure and logistics projects, which have also benefited us by increasing demand for the financings we offer. We believe the increasing number of large corporate projects in the Northeast resulting from Brazilian Government programs such as PAC and the infrastructure needed for the pending 2014 World Cup in Brazil will continue to require additional long-term financing, providing us an opportunity to reinforce our leadership in the region and sustain our growth for coming years.

Stable source of significant income and broad exposure to a wide customer pool. As the exclusive manager of the FNE, we have access to a stable and significant source of income from management fees calculated based on the FNE's total net worth. Our management of FNE has represented a steady source of income, accounting for more than 25% of our aggregate combined income from financial intermediation, income from services provided and income from bank fees since 2009. We also act as a manager of FINOR, lending agent for PRONAF and loan analyst and administrator for FDNE for the Brazilian Government, which generated aggregate fees of R$112.6 million and R$106.3 million for the years ended December 31, 2011 and 2010, respectively. We believe that the large volume of FNE loans we manage exclusively, at attractive costs, and our various roles for FINOR, PRONAF and FDNE gives us exposure to a broad customer pool, which creates an opportunity for us to increase our market share by further improving our know-how in the Northeast region and cross-selling our products.

Strategic relationship with federal, state and municipal governments. We are controlled by the Brazilian Government, with which we have a strategic relationship and through which we developed similar relationships with state and municipal governments. Our operations include Brazilian Government projects under PAC and state and municipal government projects under PPPs. Our constant dialogue with federal, state and municipal governments provides us with important know-how in the economic and social development sector, which enables us to tailor products and services for the region and our clients' needs. We are also an active governmental agent in the Northeast region for the implementation of public policies carried out through governmental programs and/or funds, which are directed, according to geographical or demographical criteria, at specific regions or groups generally not well served by the private sector, such as microcredit, tourism infrastructure and small cities and villages, which we believe gives us an advantage over our competitors. Moreover, the Brazilian Government has also supported our funding needs by directly lending us funds to increase our capital base. See "Funding" above.

Experienced approach to risk assessment and management. Since our establishment over a half century ago, we have relied on detailed financial analysis and a deep regional market knowledge to discern sustainable investment opportunities and the feasibility of long-term investments. Our risk management system for monitoring credit, market, liquidity and operational risks has therefore become centralized, integrated and unified across the institution. We have strived to maintain the quality of our loan portfolio through different measures. These measures include engaging in a specific financial evaluation for each client prior to setting credit limits, analyzing projects to ensure sufficient cash flows for repayment and analyzing industry concentration risk. Moreover, we have a centralized registry which contains project and client documents and can be accessed by our different areas (assuring the separation between the commercial and analysis areas) and a risk assessment unit, in addition to a loan recovery unit. We believe the benefit of this experienced approach has been demonstrated by the high proportion of our loans rated at low risk levels, with 92.9% and 92.6% of our loan portfolio rated between "AA" and "C", according to the Central Bank criteria, as of December 31, 2011 and 2010, respectively. See "Other Statistical and Financial Information—Lending Operations—Past Due Loans" and "Management's Discussion and Analysis of Financial Condition and Results of Operations—Lending—Loan Loss History" for a discussion of Central Bank criteria.

Highly dedicated employees and experienced management committed to best practices. We believe the high quality of our professionals and their commitment to our positive performance are key factors in ensuring success in implementing our strategies. We seek to retain professionals who are both highly experienced and qualified and who are committed to our goals and values, and offer constant training opportunities focused on professional development. We select our managers according to established criteria specific to their area of focus.

Our directors and executive officers are professionals with significant public and private sector experience, with a comprehensive knowledge of finance and the banking industry. In addition, our employees and management seek to comply with best corporate governance practices and transparency.

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Our Strategies

We intend to pursue the following targeted strategies to generate growth and enhance our profitability:

Expand through organic growth in core business areas. Given the growth we expect for Brazil and the Northeast region in particular, we intend to maintain our focus on growing our loan portfolio, while maintaining credit quality. We intend to continue focusing on our financing activities through loan operations and government fund and program management in order to benefit from the strong social and economic development of the Northeast region. We expect this growth to continue, presenting strategic opportunities that we intend to take advantage of by:

• capitalizing on opportunities to cross-sell and capture new customers mainly through FNE

• capitalizing on opportunities to cross-sell and capture new customers mainly through FNE