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					FINANCIAL STATEMENTS
 DECEMBER 31, 2008




   Um retrato de
     sustentabilidade
Message from the CEO



The solidity of a bank’s reputation is built upon       42.7% over the previous year. The 3.2%
economic fundamentals sustained by strategic            delinquency ratio reflects the Bank’s responsible
management and the credibility it has earned            credit policy and confirms the quality of its
from its clients.                                       operations. This extremely positive performance
The strength of the Banrisul brand reflects the         in a time of financial instability guaranteed the
vitality of an institution with an 80-year tradition.   consolidation of its leadership strategy.
The financial crisis affecting the international        For 2009, the bank is projecting consistent
markets has not shaken Banrisul’s confidence            growth in credit operations, at levels higher than
or self-esteem, much less its solid business            those estimated for the market in general, a
model. Our management model supported by
                                                        strategy that will be aided by its comfortable
opportune measures and well-chosen technical
                                                        liquidity position and by the portfolio’s leverage
foundations guaranteed the safety of our
                                                        margin. Keeping its leading position in the area
account holders and was reflected in the
                                                        of IT is another important tool for business
market’s confidence in our operations.
                                                        growth and improving the services provided by
Consolidated Net Income came to R$590.9
                                                        Banrisul. The Bank’s projected growth also
million in 2008, with profitability of 20.1% on
                                                        involves the expansion of both its branch
Average Shareholders’ Equity. At the end of
December 2008, Net Equity stood at R$3.1                network and of Banricompras affiliated outlets
billion. Excluding non-recurring events, growth         and other measures aimed at increasing its client
in Net Income in the year was 30.1% when                base and its market share.
compared to December 2007.                              Capitalized and strong, recognized by the
In 2008, Total Assets stood at R$25.2 billlion,         market in the areas of technology, social and
more than 50% of which are resources in                 environmental responsibility and managerial
treasury. Funds raised and under management             and operational controls, Banrisul is moving
were up 11.1% to R$19.1 billion year-on-year.           ahead to consolidate its position as one of
The credit portfolio totaled R$11.5 billion, up         Brazil’s best commercial banks.




                                         Fernando Guerreiro de Lemos
                                                 Presidente




                                                                                                             2
                                    BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
                                                             Index
Message from the CEO. ................................................................................................                 2
MANAGEMENT REPORT .........................................................................................................            5
  Economic Scenario ....................................................................................................               6
  Prospects and Strategies ..........................................................................................                  7
  Material Events ........................................................................................................             8
  Consolidated Performance .......................................................................................                     9
     Net Income ................................................................................................................       9
     Shareholders’ Equity .................................................................................................            9
     Total Assets ..............................................................................................................      10
     Taxes and Contributions ...........................................................................................              10
  Operating Performance ............................................................................................                  10
     Funds Raised and Under Management ....................................................................                           10
     Breakdown of Funds Raised and Under Management .............................................                                     11
      Securities ..................................................................................................................   11
  Credit Operations ....................................................................................................              12
     Credit Policy ..............................................................................................................     12
     Credit Performance ...................................................................................................           12
     Commercial Credit – Individuals ...............................................................................                  13
     Commercial Credit – Companies ..............................................................................                     13
     Microcredit ................................................................................................................     14
     Agribusiness ..............................................................................................................      14
     Foreign Exchange .....................................................................................................           14
     Real Estate Loans .....................................................................................................          14
     Development and Infrastructure Credit ....................................................................                       15
  Products, Services and Channels ...............................................................................                     16
     Banricompras ............................................................................................................        16
     Banricompras Celular ................................................................................................            17
     Banrisul’s Correspondent Bank .................................................................................                  17
     Virtual Branch – Home and Office Banking ...............................................................                         17
     Call Center ................................................................................................................     18
     Electronic Trading Floor ............................................................................................            18
     Smart Card ................................................................................................................      19
     Credit Cards .............................................................................................................       19
     Insurance, Private Pension and Capitalization ..........................................................                         19
  Banrisul’s Customer Service Network ........................................................................                        20
  Subisidiaries .............................................................................................................         20
      Banrisul S.A. Administradora de Consórcios ...........................................................                          20
      Banrisul S.A. Corretora de Valores Mobiliários e Câmbio .......................................                                 20
      Banrisul Armazéns Gerais S.A.. ................................................................................                 21
      Banrisul Serviços Ltda ..............................................................................................           21
 Corporate Governance ..............................................................................................                  22
      Investor Relations .....................................................................................................        23
     Interest on Own Capital/Dividends ..........................................................................                     23
 Internal Controls and Compliance ..............................................................................                      24
     Risk Management .....................................................................................................            24
     Credit Risk ................................................................................................................     24
     Market Risk ...............................................................................................................      25
     Liquidity Risk .............................................................................................................     26
     Operational Risk .......................................................................................................         26
     Basel Index ................................................................................................................     27


                                                                                                                                           3
                                              BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
   Technology Modernization ........................................................................................               28
   Public Sector Activities .............................................................................................          29
      Municipal Government .............................................................................................           29
       State Government ....................................................................................................       29
       Federal Government ................................................................................................         30
      Judiciary and Public Ministry ....................................................................................           30
    Marketing .................................................................................................................    31
    Human Resources .....................................................................................................          32
    Corporate Responsibility ..........................................................................................            32
    Awards .....................................................................................................................   34
   Acknowledgements ..................................................................................................             37
FINANCIAL STATEMENTS .........................................................................................................     38
   Balance Sheets .........................................................................................................        39
   Statement of Income ................................................................................................            43
    Cash Flow ................................................................................................................     44
   Statement of Changes in Financial Position ...............................................................                      46
   Statement of Value Added .......................................................................................                47
   Notes of the Management to the Financial Statements .............................................                               48
       Note 01 – Operations ...............................................................................................        49
       Note 02 – Presentation of the Financial Statements ................................................                         49
       Note 03 – Significant Accounting Practices ..............................................................                   51
       Note 04 – Interbank Investments ..............................................................................              54
       Note 05 – Securities and Derivatives ........................................................................               55
       Note 06 – Restricted Deposits .................................................................................             58
       Note 07 – Lending Operations, Leasing Operations and Other Receivables ..........                                           58
       Note 08 – Other Receivables ....................................................................................            61
       Note 09 – Prepaid Expenses ....................................................................................             62
       Note 10 – Deposits and Money Market Funding .....................................................                           63
       Note 11 – Foreign Borrowings .................................................................................              64
       Note 12 – Onlendings ...............................................................................................        64
       Note 13 – Other Payables ........................................................................................           65
       Note 14 – Reserve for Tax, Labor and Civil Contingencies ......................................                             66
       Note 15 – Income from Services Rendered. .............................................................                      66
       Note 16 – Income from Bank Fees ............................................................................                67
       Note 17 – Other Administrative Expenses ...............................................................                     67
       Note 18 – Other Operating Income .........................................................................                  67
       Note 19 – Other Operating Expenses ......................................................................                   68
       Note 20 – Shareholders’ Equity – Banrisul ................................................................                  68
       Note 21 – Commitments, Guarantees and Other ....................................................                            70
       Note 22 – Income and Social Contribution Taxes .....................................................                        71
       Note 23 – Fundação Banrisul de Seguridade Social e Cabergs – Caixa de Assistência
                   dos Empregados do Banco do Estado do Rio Grande do Sul ................                                         73
       Note 24 – Financial Instruments ................................................................................            74
       Note 25 – Balance and Transactions with Related Parties .......................................                             75
    Reports ....................................................................................................................   76




                                                                                                                                        4
                                              BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
Management Report

WE PRESENT THE MANAGEMENT REPORT AND FINANCIAL
STATEMENTS OF BANCO DO ESTADO DO RIO GRANDE DO SUL
S.A. FOR THE 2008 FISCAL YEAR, PREPARED IN ACCORDANCE
WITH THE RULES OF THE BRAZILIAN SECURITIES AND
EXCHANGE COMMISSION (COMISSÃO DE VALORES
MOBILIÁRIOS – CVM) AND OF THE BRAZILIAN CENTRAL BANK.
                           Economic Scenario

During 2008, the Brazilian economy continued to grow, while the economies of many developed
countries fell into recession and many emerging economies began to decelerate due to the negative
effects of the international financial crisis. Nevertheless, the CMN (National Monetary Council)
raised the Selic (Basic Interest Rate) rate by 250 base points, from 11.25% in January to 13.75%
p.a. in December. The decision to increase interest rates was a response to deteriorating inflationary
expectations. For most of the year, inflation was projected above 4.5%.

The National Consumer Price Index, IPCA, the official inflation index and the basis for the projection
system, closed 2008 at 5.9%. Analysis showed that the period from January to July registered
higher inflationary pressures, after which, as the foriegn crisis worsened, the speculative element
of prices was dilluted and there was less inflationary pressure. On the exchange market, the Real
suffered a steep devaluation in August due to external liquidity restrictions brought on by the
global financial crisis, after following in the first half of 2008 the tendency seen over the previous
two years of maintaining its value against the dollar. In December 2008, the exchange rate closed
at R$2.34 per USD, an annual devaluation in the Brazilian currency of 31.9% against the Dollar.

Despite relatively strong performance on the national level, Rio Grande do Sul’s economic
performance was less favorable. This deceleration in 2008 can be partially explained by the lower
volume of the 2007/08 grain harvest even at above 20 million tonnes and a stronger-that-usual
basis of comparison, since in 2007 the state’s economy grew at a rate substantially higher than
the national average. In terms of individual segments, the industrial segment stood out with
third-quarter results showing strong and even record growth in several sectors, as well as the
services sector, in which the credit and financial intermediation areas stand out.

Overall, Rio Grande do Sul’s GDP will show a positive result in the year despite posting a growth
rate lower than the national average. Both the state’s economic and national growth for 2008 are
estimated to be lower than those of 2007, given that the official figures, not released yet, indicate
a strong deceleration in all sectors of the state and national economies in the last quarter of 2008.




                                                                                                         6
                                  BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
                     Prospects and Strategies
The current international financial instability requires attention to risks and opportunities, the key
challenge to maintaining Banrisul as one of the best financial institutions in Brazil. Banrisul’s efforts
are focused on modernizing its operational and managerial procedures, its distribution mechanisms,
relationship strategies and the constant search for technological innovations that continually change
the ways in which the Bank interacts with and relates to clients, investors, government and the
community at large.

Intensified competition requires changes in assumptions and approaches that translate into new
ways of thinking, acting and establishing and strengthening relationships, as well as making
decisions. In 2009, Banrisul is preparing itself to consolidate processes implemented since 2006 in
ways that will allow it to increase its revenues and maintain its position as one of Brazil’s best
commercial banks.

In terms of financial management, the liquidity that dominated the international scene until the
second half of 2008 allowed Banrisul to strengthen its capital structure through its 2007 public
offering and to prepare itself to face the vulnerability felt by many companies, principally during
the fourth quarter, as a result of the financial crisis. In 2009, the Bank will continue its strategy of
maintaining comfortable liquidity levels, which should favor the Bank as many companies turn to
domestic funding strategies because of the scarcity of foreign credit lines.

On the credit market, the growth prospects for the regional and national economies seem relatively
favorable, despite expectations of a global economic slowdown. Banrisul expects its credit portfolio
to increase by some R$3 billion, expanding by approximately 25% in the 2009 fiscal year, beating
anticipated market growth.

Consistent growth in loan operations, improved quality of service provided at our network of
branches and the rigorous management of administrative costs are all strategies that will favor
revenue generation in 2009.

Focusing on segmenting clients and earning their loyalty, strengthening investor relations, improving
distribution channels, increasing the Bank’s penetration in southern Brazil and expanding the
Banricompras and Correspondent Bank Commercial Networks, Banrisul’s client capture and
relationship policies will also contribute to revenue generation and maintaining comfortable liquidity
levels.

IT investments in 2009 should absorb R$230 million. The Bank will also modify some internal
processes in 2009, either at the behest of the regulatory agency, Banco Central do Brasil (Brazilian
Central Bank), or out of the need to provide mechanisms that improve decision-making and internal
and external communications, among which projects relating to IT security, risk management and
updating accounting statements to comply with International Financial Reporting Standards stand
out.




                                                                                                            7
                                  BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
                                Material Events

      March 2008 – Banrisul opens a regional sales branch and expands its presence in Santa
Catarina State. Headquartered in the city of Blumenau, the Superintendence of Santa Catarina
was opened on March 17, 2008. The opening of a regional sales branch and three branches in the
regions of Vale do Itajaí, Greater Florianópolis and the southern coast of the state are part of the
first phase of Banrisul’s Santa Catarina expansion project. The project aims to improve the
relationship with local clients, favoring partnerships that strengthen development in Santa Catarina
and broaden Banrisul’s scale of operation.

     March 2008 – Payment of Additional Dividends. Banrisul’s Board of Directors submitted a
proposal to establish additional dividends of 10%, effective as of the fiscal years 2007 and 2008.
This proposal was approved at the Annual and Extraordinary General Meeting held on March 25,
2008, bringing about the payment of total dividends of 35% on the adjusted net income.

       September/2008 – Banrisul turns 80. From the initiative of a few rural producers to nearly
three million clients. From 50,000 contos de réis (the Brazilian currency at the time) to shareholders’
equity higher than R$3 billion. From a mortgage to multiple bank. These statements summarize
the 80 years of the Banco do Estado do Rio Grande do Sul S.A., a public bank that promotes
commercial and social development, a bank that that was born public and, after eight decades,
still belongs to all citizens of Rio Grande do Sul.

      October/2008 – Banrisul International IT Forum. As part of its 80 th anniversary
commemoration, Banrisul hosted the International IT Forum in October of 2008, an event designed
to share some of what the Bank has been doing in terms of IT development and implementation
with the public. Banrisul’s partnership with major domestic and foreign companies allowed experts
from some of these companies to discuss the current IT climate and prospects for the area, in
addition to presenting the projects in development at Banrisul.TECHNOLOGY MODERNIZATION




                                                                                                          8
                                  BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
                 Consolidated Performance

  Net Income for the Year                           Net Income for the Year
Banrisul posted Net Income of R$590.9 million
in 2008, including effects of tax credits in the               Excluding Tax Credit Effects
                                                                          (R$ Million)
amount of R$86.2 million. In 2007, the Net
Income of R$916.4 million was higher than the
2008 total due to the activation of the tax
credits and debts deferred from Income Tax
and Social Contribution regarding timing
differences in prior periods in the amount of
R$528.5 million.
Excluding non-recurring effects, year-to-date
Net Income amounts to R$504.7, 30.1% up                    Including Tax Credit Effects
the amount recorded in the previous year,                             (R$ Million)

which was R$387.9.
The 2008 performance reflects higher credit
and commercial leasing revenues due to the
increase in the volume of operations, which
expanded by 42.7% in the twelve-month
period, as well as to the expansion of
revenues from treasury operations.




  Shareholders’ Equity                                        Shareholders’ Equity Growth
Banrisul’s Shareholders’ Equity, which totaled                             (R$ Million)

R$3,079.1 million at the end of 2008, increased
by 10.3% in twelve months. Annualized return
on Average Shareholders’ Equity reached 20.1%
in the period.
Shareholders’ Equity has grown 200.1% over the
past four four years as a result of the
incorporation of increasing results recorded in
the periods and the capital injection from the
July 2007 public offering that raised R$800.0
million.




                                                                                              9
                                BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
  Total Assets
                                                             Graph 3: Total Assets Growth
Total Assets amounted to R$25,205.4 million at                              (R$ Million)
the end of 2008, an increase of 23.2% over the
R$20,456.9 million in December 2007. Among
the items that contributed to this growth,
deposits and the Judicial Deposit Reserve Fund
stand out, with a R$3,863.1 million increase in
twelve months.
In the Asset structure, the expansion of credit
and treasury operations, which totaled
R$3,429.5 million and R$1,945.7 million in the
previous twelve-month period, stands out. Over
four years, Total Assets rose 107.9%.



  Taxes and Contributions
In 2008 Banrisul collected and provisioned            directly on financial intermediation and other
R$435.8 million in taxes and contributions.           payments amounted to R$452.8 million.
Taxes retained and passed through levied




                      Operating Performance
  Funds Raised and Under Management
                                                            Growth of Funds raised and under
Funds raised and under management amounted                            management
                                                                          (R$ Million)
to R$19,058.2 million in December 2008, up
11.1%, or R$1,908.3 million, over December
2007. Over four years, total growth was 77.1%.
The funding strategy which aims at maintaining
the credit increase and the generation of service
revenues, promoted in the period the increase
of funds from deposits and investment funds.
The balance of Time Deposits amounted to
R$7,557.8 million, an increase of 28.5% or
R$1,676.7 million compared to December 2007.
Savings Deposits rose 3.7% or R$172.1 million,        Asset Management totalled R$4,802.1 million
totaling R$4,805.9 million. Demand Deposits           at the end of 2008, growing 0.4% or R$18.1
increased 2.0% or R$36.3 million in twelve            million in relation to December 2007. Over the
months and reached R$1,864.0 million.                 four previous years, the increment was 53.1%.




                                                                                                       10
                                  BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
  Breakdown of Funds Raised and Under Management
At the end of 2008, Raised and Managed Funds        Management at R$4,802.1 million or 25.2% of
consisted of Time Deposits, the key funding         the total, Savings Deposits at R$4,805.9 million
instrument for credit operations, at R$7,557.8      or 25.2% of the total, and Demand Deposits at
million or 39.7% of the total, and Asset            R$1,864.0 million or 9.8% of the total.




                             Breakdown of Funds Raised and Under
                                    Management (R$ Million)




  Securities
Investments in Securities amounted to
                                                                 Growth of Securities
R$8,563.6 million in December 2008,                                     (R$ Million)
accounting for an increase of R$1,939.6 million
when compared with the same month of 2007.
This balance includes Interbank Investments net
of Liabilities from Resale and Repurchase
Agreements.
The growth in the securities portfolio over the
past twelve months mirrors the accelerated
credit asset growth policy adopted by the
Institution. Credit assets increased R$3,429.5
million in the period, chiefly due to deposit
funding, which increased R$1,890.1 million.         securities classified at “held-to-maturity”
Banrisul has financial capacity, as confirmed by    pursuant to Article 8 of Circular Letter 3,068 of
internally developed technical studies, and         November 08, 2001 of the Brazilian Central
intends to maintain it until the maturity of        Bank.




                                                                                                        11
                                BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
                             Credit Operations
  Credit Policy
In the beginning of 2008, the domestic credit          to C, amounted to R$9,825.5, representing
market was characterized by stable interest            85.8% of the total portfolio, up 3.7 p.p. over
rates, longer terms, falling delinquency ratios        the proportion recorded at the end of 2007. Risk
and expanding operations, particularly in the          1 operations, including levels D to G, totaled
business segment — positive trends deriving            R$1,292.7 million, accounting for 11.3% of the
from the year’s good prospects for economic            portfolio. Risk 2, which consists exclusively of
growth. However, during the second half of             level H operations, requires a 100% provision
2008, the intensification of the global financial      and totaled R$335.4 million, or 2.9% of total
crisis affected expectations of sustaining the         credit operations. The growth in the credit
growth rate of credit operations.                      portfolio comes jointly with an improved rating
Banrisul’s credit policy during 2008 reflected the     composition, resulting in a lower Delinquency
following scenario: credit portfolio expansion         Index, decreasing from 3.7% in December 2007
outpaced growth registered by financial                to 3.3% in December 2008.
institutions as a whole; the business segment          The continuous improvement of Banrisul’s credit
was a key growth factor in the portfolio; risk         portfolio is a result of the pre-approved credit
mitigation through product diversification and         system based on the Credit and Behaviour Score
client spread resulted in low delinquency rates;       systems that allow measurement, limitation and
the pace of loan operations cooled in the year’s       minimization of the Bank’s default risk exposure.
final quarter.                                         Furthermore, the determination of provision
Despite the restrictive macroeconomic scenario         levels for potential losses is adequate to the risk
in the final quarter of 2008 and the decisive          exposure of each operation. Analyses take into
CMN actions to ensure domestic liquidity, the          account the client’s credit risk determinators in
quality of Banrisul’s loan portfolio was able to       order to protect the Instituion against losses on
avoid serious shocks.                                  the credit portfolio. Credit operations are
The classification of the portfolio by risk follows    evaluated based on the credit risk of the client
the procedures provided for in Resolution              or economic group, collateral and nature and
2,682/99 of the Brazilian Central Bank. In 2008,       type of operation, as well as the possibility of
Normal Risk operations, comprised of levels AA         late payments.


  Credit Performance                                       Growth of Credit Operations
                                                                       (R$ Million)
At the end of 2008, Banrisul’s balance of credit
operations totaled R$11,453.6 million, growing
42.7% over the R$8,024.1 million posted in
December 2007. Accounting for 79.1% of this
growth, the commercial portfolio increased from
R$5,526.8 million to R$8,237.9 million, a
R$2,711.1 million or 49.1% year-on-year
increase. The volume of operations targeted at
Individuals totaled R$3,880.8 million, increasing
by 43.0%. As for Companies, the operations




                                                                                                             12
                                   BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
balance reached R$4,357.0 million, increasing        R$174.4 million or 35.4% increase, reaching
by 54.9% in twelve months chiefly from working       R$666.4 million; Real Estate Loans increased by
capital operations.                                  R$151.3 million or 18.7%, with a balance of
In the previous twelve months, the other             R$961.3 million; ACC and ACE contracts (pre-
portfolios performed as follows: Rural Credit        and post-shipment export financing contracts)
posted an increase of R$238.3 million, or 38.8%,     increased by R$109.0 million or 32.2%, totaling
and reached a balance of R$853.1 million;            R$447.1 million, and Leasing grew by R$54.0
Development and Infrastructure recorded a            million or 125.0%, totaling R$97.1 million.


   Commercial Credit - Individuals
In 2008, Commercial Credit operations targeted       Payroll-deductible loans reached R$2,799.2
at Individuals totaled R$3,880.8 million,            million in December 2008, growing 45.0% over
accounting for 47.1% of the Commercial               the same month of the previous year. The 329.9
Portfolio and for 33.9% of all credit operations.    thousand payroll-deductible loans granted
The increase of R$1,167.7 million in twelve          totaled R$1,784.3 million in the twelve-month
months was mainly driven by payroll-deductible       period.
operations.



   Commercial Credit - Companies
Commercial Credit operations for Companies           R$3,364.7 million in December 2008, grew
grew by 54.9% and reached a balance of               60.0% in comparison with the same month of
R$4,357.0 million in December 2008,                  the previous year.
accounting for 52.9% of the Commercial               Funds providing working capital to hospitals,
Portfolio and 38.0% of all credit operations.        clinics and laboratories totaled R$80.8 million
The business segment posted an increase of           in 2008. In the same period R$268.5 million
R$1,543.4 million in the Company’s balance,          was allocated to the education sector,
vis-à-vis the same month of the previous year.       comprised of universities and educational
Banrisul’s working capital, which totaled            institutions.



                 Commercial Credit Growth – Individuals and Companies
                                              (R$ Million)




                                                                                                       13
                                 BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
  Microcredit
Banrisul offers micro-companies and SMBs               million, up 46.5% from the R$781.8 million
microcredit for short-term operations, aiming          granted in the same period of 2007. The most
to facilitate this segment’s access to working         popular lines were Promicro, granting R$522.6
capital with no specific destination. Among the        million in 34.4 thousand operations, Corporate
products offered by the Bank are Promicro,             Account (Conta Empresarial), granting R$329.2
Corporate Account (Conta Empresarial), Giro            million in 94.5 thousand operations, and
Fácil, and Banricompras Receivables.                   Banricompras Receivables, granting R$260.3
In 2008, Microcredit granted totaled R$1,145.6         million in 1,459.3 thousand operations.


  Agribusiness
A longtime partner of agribusiness, Banrisul           Rural Credit operations totalled R$853.1 million
offers specific credit products to rural producers.    in December 2008, 38.8% higher than in the
With special fees and terms, these lines range         same month of the previous year. That growth
from credit for acquiring livestock to harvest         was driven by funding operations, which grew
costing and sales. During the 2008 fiscal year,        by 60.7% in the 12M08 to reach R$ 572.6 million.
26.2 thousand operations were contracted for a         Investment lines grew by 8.5% in the same
total of R$591.2 million, an increase of 109.0%        period, totaling R$280.5 million.
over the amount granted in 2007 and with 69.3%
renewal of the portfolio.


  Foreign Exchange
The the balance of ACC and ACE operations              Export operations totaled US$725.8 million,
increased 32.2% in twelve months, from                 chiefly composed of ACC in the amount of
R$338.2 million in December 2007 to R$447.1            US$400.3 million and Spot Operations in the
million in the same month in 2008. 31.0                amount of US$286.3 million. Import operations
thousand operations were contracted in this            moved US$527.3 million, representing a 67.5%
period, moving US$1.5 billion — a volume               year-on-year increase.
24.0% higher than in the previous year.


  Real Estate Loans
Real Estate Loans cover purchases and                  allocations of R$183.1 million to purchase 2,590
construction of commercial and residential             previously used buildings, R$41.2 million to
buildings, enlargement and remodeling of               purchase 429 new buildings and R$6.4 million
residential buildings, suburban land purchases         to purchase 122 commercial real estate. As part
and financing of construction companies. The           of the Plano Empresário (Business Plan), R$241.5
Bank’s contribution to the civil construction sector   million was invested in 3,183 units and, in
in Rio Grande do Sul won it the Prêmio Sinduscon       Construção Individual da Casa Própria
2008 honor of Financial Institution of the Year.       (Individual Home Construction), R$32.0 million
Banrisul financed 7.1 thousand operations in the       was invested in 482 homes. The Real Estate
previous 12 months, granting a total of R$526.6        Loan portfolio closed 2008 with a balance of
million that represents an increase of 136.4% in       R$961.3 million, up 18.7% over the previous
volume over 2007. This amount included                 twelve-month period.



                                                                                                          14
                                   BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
  Development and Infrastructure Credit
Banrisul operates as a BNDES onlending agent          in funds for the public and private sectors. Out
of funds in the Finame, Automático, Finem,            of this amount, R$65.7 million went to the
Exim and Progeren lines, which are invested in        industrial sector in 214 operations; R$17.3
social-economic development projects in the           million to the public sector in 72 operations,
communities in which the Bank operates. The           and R$29.7 million for businesses and services
Development and Infrastructure Credit Portfolio       in 65 new operations.
ended 2008 with a balance of R$666.4 million,         Standing out among the largest undertakings
which represents an increase of 35.4% in              in the private sector is the R$38.9 million
relation to the total of R$492.0 million recorded     infrastructure investment in two Small
at the end of 2007.                                   Hydroelectric Plants that contribute to energy
In the 2008 fiscal year, 351 operations were          engeration in Rio Grande do Sul State, PCH
approved in the Development and                       Criúva and PCH Serrana.
Infrastructure Portfolio, totaling R$112.7 million




                                                                                                         15
                                  BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
           Products, Services and Channels
As a multiple service bank, Banrisul always seeks to increase profitability and adopt the most up-
to-date practices in the financial market. Launching new products and services, as well as improving
existing ones, is supported by constant technological innovations that create value for the Bank’s
clients, suppliers, shareholders, the government and the community.
The benefits technology brings to this process can be seen particularly in terms to facilitating
access to financial services. In December 2008, Banrisul electronic transactions accounted for
83.9% of all operations, which shows the extent to which clients depend on the Bank’s self- and
tele-service channels. Alternative service channels, such as home, office and mobile banking, as
well as transactions carried out via the Banrifone, Banricompras and Correspondent Bank services
make electronic transactions more secure and convenient and free up Bank employees to provide
financial advising services that further strengthen Banrisul’s relationship with its clients.


  Banricompras
Banrisul provides its clients with Banricompras,      Affiliated Stores
                                                      (Thousand)
a electronic payment method allowing clients
to use their bank cards as debit or credit cards.
In addition to its strategic place in the Bank’s
growth strategy and its efforts to build client
loyalty, the product brings several benefits to
customers, replacing checks and cash and
simplifying account monitoring with the bank
statement, all without the burden of annual fees
or usage charges.
For Rio Grande do Sul businesses, not having          Financial Transactions
                                                      (R$ Million)
access to the Banricompras network could
negatively affect sales, as many Banrisul clients
opt to use their bank cards exclusively at the
expense of other credit cards. This and other
advantages for storeowners, such as reduced
default rates through our payment guarantee,
increased transaction security and the possibility
of receiving advanced payment for installment
purchases, earned Banrisul the 2008 Mérito            Transactions
Lojista (Storeowner Merit) Award for Best Debit       (Million)
Card from the Federação das Câmaras de
Dirigentes Lojistas do Rio Grande do Sul (Rio
Grande do Sul State Federation of Chambers
of Store Managers).
Currently, the network boasts 73.1 thousand
establishments to serve the almost 3.0 million




                                                                                                       16
                                  BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
Banrisul clients, which has helped make the card      The Banricompras Premiável publicity
service more popular and increase its                 campaign, designed to encourage service
performance. In 2008, 54.4 million card               usage and strengthen the Bank’s ties with its
transactions were registered, moving                  member establishments, included a random
approximately R$3.2 billion. Compared to 2007,        drawing of individual clients for cash prizes as
these figures represent increases of 15.9% and        well as reward programs for member
25.3%, respectively. These numbers show               establishments, their employees and the Bank’s
Banricompras’ undeniable growth, but the              own salespeople. The program awarded more
service still has plenty of growth potential, both    than R$ 1.8 million in prize money to 1,801
in terms of the user base and in the number of        randomly selected clients in 2008.
member establishments.


  Banricompras Celular
Still in its testing phase, Banricompras Celular      that functions as a card reader and printer. The
is a solution for mobile phone vendors and other      technology used in these transactions is
service providers such as taxi drivers, delivery      completely secure, since data transmitted over
personnel and street vendors. It allows the           the cellular network is encrypted and can only
processing of conventional Banricompras               be decrypted through official Banrisul
payments using a cellular phone and a device          operational systems.


  Banrisul´s Correspondent Banks
Banrisul clients have access to the                   avoiding trips to Banrisul branches and
Correspondentes        Banrisul     (Banrisul         increasing business hours.
Correspondents) program, a flexible customer          At the end of 2008, the Bank had nearly 2.5
service alternative. The program involves a           thousand bank correspondents, moving R$8.5
network of authorized commercial                      billion in 49.1 million operations in the year. The
establishments that provide banking services          financial transactions increased 30.1% and the
such as withdrawals, transfers, payments and          number of operations grew 12.2% year-on-year.
prepaid celular phone airtime, among others,


  Virtual Branch – Home and Office Banking

The Agência Virtual Banrisul (Banrisul’s virtual      celular phone airtime and paying various kinds
branch) is an online service center through which     of bills.
clients can perform various banking activities        In 2008, 68.8 million operations were made via
without leaving their homes or offices. Included      Internet, moving R$71.9 billion, for increases
among these home and office options are               of 19.4% and 14.7%, respectively, when
consultation of account balance information,          compared to 2007’s 57.6 million operations and
applying for loans or making investments,             total volume of R$62.7 billion.
viewing issued or deposited checks, purchasing




                                                                                                            17
                                  BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
  Call Center
In order to improve the speed and flexibility of      by the branches. The financial turnover was
our customer service and to free up employees         more than R$1.7 million.
to focus on the Bank’s business, Banrisul offers      By the close of 2008, all of the Data Center
two options for telephone customer service:           (equipment room) equipment had been
Banrifone and the branches’ Call Center. In           installed as part of the branches’ Call Center
2008, Banrifone processed 4.9 million electronic      expansion project, and 60 agencies had the
customer service operations and carried out an        required telephone infrastructure in place.
additional 486.6 thousand personalized                System integration and operational tests have
assistance operations, moving a total of R$178.2      been concluded, and the expansion will reach
million.                                              an additional 3 branches in January 2009. In
The branches’ Call Center received 105.8              order to maintain the quality and efficiency of
thousand personalized service calls at the 11         our customer service, the assistance provided
branches which have already implemented the           by our representatives is evaluated through
program. Of that total, 55.7% were answered           customer satisfaction surveys, constant
and resolved by the Call Center rather than the       monitoring and periodic recycling procedures.



  Eletronic Trading Floor
Pregão On Line (Online Bidding) is a tool that       authorized to sell to the public sector. In June,
promotes increased competition and reduction         the intermediate bid option became available,
in the prices of products and services contracted    giving suppliers the ability to compete
by government agencies. Its purpose is to            placement other than at the one at the top of
increase the level of competition in public          the board. In addition to these innovations,
purchases and to offer a series of advantages        purchasers were allowed to register more than
for the bidder as well as for the supplier. In
                                                     one authorized buyer, quickening transactions.
addition to these savings, makes public
                                                     In 2008, Banrisul’s portal hosted 10.4 thousand
purchasing procedures more transparent and
                                                     bidding procedures, 42% more than in 2007,
allows suppliers from other locations to
                                                     totalling more than R$87.7 million in
participate in the bidding, significantly
increasing competition.                              transactions, 110% higher year-on-year, and
In 2008, implementation of the CELIC simplified      saving purchasers R$19.0 million, up 143% over
registration system shortened the accreditation      2007. Bidding at Rio Grande do Sul State’s debt
procedure and made it easier for suppliers to        auctions resulted in savings of approximately
participate, expanding the base of businesses        R$2 million in the state budget.




                                                                                                         18
                                  BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
  Smart Card
Banrisul is implementing an additional security     from any computer with total security, since
guarantee for home and office banking. Older,       access can only be granted to customers with
magnetic strip cards are being replaced by          the cards in their possession, featuring a chip
multifunctional smart cards, a technology that      bearing their private digital signature.
allows the customer to access his or her account




  Credit Cards
In 2008 Banrisul issued 301.0 thousand cards        awarded salespersons with prizes. During this
under the Visa and MasterCard labels,               period, 20,238 cards were issued, surpassing the
representing a 5.9% increase over 2007. In          established goal by 34.9%.
addition to this growth in the credit card user     Banrisul’s Visanet operations performed
base, the average purchase price increased by       especially well, placing second in credit
6.9%, and withdrawals were up 20.2%.                authorization performance and third in fraud
Growth in the MasterCard client base was            prevention among all Visa-issuing banks in
helped by the Tri-Legal internal sales campaign     Brazil.
implemented from August to December that



  Insurance, Private Pension and Capitalization

Through a commercial partnership with Icatu         2008 and offering rates and services specifically
Hartford and SulAmérica Seguros, Banrisul           designed for the needs of women drivers.
offers insurance, pension and capitalization        During 2008, capitalization product sales
products through its network of branches. Using     reached R$4.7 million, and property and
its broad portfolio, the Bank seeks to satisfy      personal insurance sales totaled more than
clients’ needs offering specialized products for    R$5.0 million. In the same period more than
specific market segments, such as Seguro Auto       R$12.0 million in claims was disbursed to clients
Mulher, Women’s Auto Insurance, launched in         with life insurance and capitalization policies.




                                                                                                        19
                                BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
     Banrisul´s Customer Service Network
At the close of 2008 the Bank had 427 branches, 395 of which are located in Rio Grande do Sul
State, 16 Santa Catarina State and 14 in other states, in addition to offices in New York and Grand
Cayman. The Bank’s nearly 3.0 million clients have access to 435 electronic service stations, 169
banking service stations, 109 advanced service stations and 2 collection and payment stations. In
Rio Grande do Sul State, the Bank’s network is accessible to 97.78% of the population with providing
services in 406 cities.
In 2008, eleven service stations and nine new branches were opened, three of which, as well as a
new regional sales center, are located in Santa Catarina State. The network expansion strategy
aims to maintain the Bank’s market share in Rio Grande do Sul State and to increase its share in
other markets with the potential to generate revenues. Plans for 2009 include opening seven
additional branches in Santa Catarina State, three in Rio Grande do Sul State and one in São
Paulo State, in addition to adding electronic service stations in high-traffic areas like gas stations,
supermarkets and shopping malls.




                                      Subsidiaries
                                      Banco do Estado do Rio
                                        Grande do Sul S.A.

                 Banrisul S.A.        Banrisul S.A.
               Administradora de                                Banrisul            Banrisul
                                   Corretora de Valores    Armazéns Gerais S.A.   Serviços Ltda.
                  Consórcios       Mobiliários e Câmbio
                   99.6%                 98.7%                   99.5%               99.8%



  Banrisul S.A. Administradora de Consórcios
Banrisul Consórcios seeks to help families from           sold in 2008 totalled 10.4 thousand for a credit
Rio Grand do Sul State and the rest of Brazil by          volume of R$226.5 million. The company
providing a transparent and simple means for              granted 2.9 thousand loans, for 2.2 thousand
acquiring automobiles, real estate or                     real estate purchaes and R$42.8 million in
motorcycles.                                              disbursements for purchases of consumer
The company closed 2008 with 20,569 quotas,               goods. Net Income came to R$10.8 million in
of which 18,863 remained active, with total               2008, an increase of 20.0% over 2007.
letters of credit valued at R$428 million. Quotas

   Banrisul S.A. Corretora de Valores
Mobiliários e Câmbio
Acting in the capital markets as an intermediary          of its services, the Corretora was listed among
in the sale and purchase of spot trades, options,         the 20 most efficient brokers in a study released
and futures as well as in the management of               in Balanço Financeiro 2008 magazine published
third-party resources, Banrisul Corretora’s               by the São Paulo newspaper Gazeta Mercantil.
professionals are highly qualified in advising and        The global economic downturn did not affect
assisting investors. In recognition of the quality        the Brokerage’s performance in 2008, posting




                                                                                                              20
                                   BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
Net Income of R$8.0 million. Total trade volume       283.4% increase in the twelve-month period and
was up 27.9% over 2007, totaling R$845.6              giving it a 61.7% share in the Company’s total
million. Home Broker transactions totaled             trades.
R$521.9 million, representing an impressive



  Banrisul Armazéns Gerais S.A.
Headquartered in Canoas, Rio Grande do Sul            thousand involved imports and 22.3 thousand
State, Banrisul Armazéns Gerais is bonded by          involved exports.
the Internal Revenue Service to provide public        Improved internal processes, controlled costs,
warehousing and logistics services such as dry        and increased customs operations with
port general warehousing. The Company has             adjustments in service fees contributed to the
nine warehouses with a total constructed area         Company’s positive result in 2008. Net Income
of 33 thousand m2. In 2008, it oversaw 29.0           for 2008 reached R$2.1 million, 173.2% higher
thousand customs operations, of which 6.7             than in the previous year.



  Banrisul Serviços Ltda.
Serving southern Brazil, Banrisul Serviços            over 2007. Net Income totaled R$9.7 million,
manages the Refeisul brand of Grocery and             declining 24.1% year-on-year due to the
Meal cards and vouchers, in addition to Private       Bank’s incorporation of the credit card
Label, Fuel and Gift cards. On a daily basis, more    portfolio that generated an extraordinary
than 200.0 thousand users prove the efficiency        profit of R$12.8 million. In 2009, the
of Refeisul services, which operate on a network      Company plans to launch the Benefit and Fleet
of close to 39.0 thousand accredited providers.       Maintenance cards, increasing the range of
In 2008 Banrisul Serviços sales came to               products in a portfolio serving 3.4 thousand
R$360.0 million, an increase in volume of 12.9%       member businesses.




                                                                                                       21
                                  BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
                     Corporate Governance
To assure its owning partners of the Company’s strategic management and the effective monitoring
the Executive Board, Banrisul adhered to the Level 1 of Corporate Governance in 2007 by making
a public tender offering, including a capital increase of approximately R$800.0 million. Owners
and the management are related by the Board of Directors, the independent auditors and the
Fiscal Council, enabling all stakeholders transparency, equity and adequate disclosure of data
and information.
The Bank’s listing at Level 1 requires compliance with the rules applicable to companies with
shares listed on Novo Mercado (Bovespa’s New Market), which are included in Banrisul’s Bylaws
and are displayed below:
•    of the members of the Board of Directors, at least 20% shall be independent members;
•    public offerings must be held in certain circumstances;
•    all shareholders shall be entitled to the same conditions held by the controlling shareholders
     at the sale of the Bank’s control; and
•    Banrisul, its controlling shareholders, managers and members of the Fiscal Council are subject
     to the Chamber of Arbitration Regulation of Bovespa’s Market for resolving the conflicts
     arising from, related to or derived from the application, validity, effectiveness, interpretation,
     violation and its effects, of the provisions included in the Brazilian Corporation Law, Banrisul’s
     Bylaws, rules issued by the Brazilian Monetary Council, the Brazilian Central Bank and the
     Brazilian Securities and Exchange Commission, in addition to those provided for in the
     Regulation of Level 1 Governance, the Arbitration Regulation and the Agreement of Adoption
     of Corporate Governance Practices Level 1.
In order to fulfill our commitment of responsibility on shares, the institution adopted Banrisul’s
Code of Ethics, an instrument guiding the ethical and moral behavior applied to employee routines,
which establishes behavioral standards for relationships with the public of interest, whether they
are shareholders, employees, suppliers, clients, competitors, entities, the community or the
government. In line with rules of the Brazilian Securities and Exchange Commission, Banrisul
informs that Deloitte Touche Tohmatsu Auditores Independentes rendered services to the Bank
exclusively related to auditing in 2008.




                                                                                                          22
                                  BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
  Investor Relations
Banrisul has confirmed its ongoing commitment           Trade and financial volumes showed significant
to a transparent relationship with the market           variations in 2008. In December 2008, the
through its programs designed to disclose and           BRSR6 shares posted an average of 329 daily
facilitate the spread of data and information           trades, 161% higher than the volume in
about itself, providing analysts with greater           December 2007 (average of 126 trades).
insight into the business. To this end, Banrisul        Financial volume grew by R$1.2 million
held approximately 280 meetings with market             compared to 2007, and the average daily
analysts and shareholders in Brazil and abroad          balance in December 2008, R$7 million, is 20%
during 2008.                                            higher than the year-end total in 2007.
Among the most important events in which the            Other decisions made during 2008 included (i)
Bank participated were the public APIMEC                the proposal to distribute additional dividends
(Association of Capital Market Analysts and             for the 2007 and 2008 periods from reserves
Investment Professionals) presentations held in         required by Company Bylaws at a rate
Porto Alegre and São Paulo, Brazil Day 2008 in          equivalent to 10% (10 percent) of adjusted net
New York City and the 10th Annual Latibex               income, bringing total dividends to 35% (thirty-
Forum in Madrid, as well as other events                five percent), (ii) the sale at public auction of
sponsored by investment banks in Brazil and             fractions remaining from the processes of bonus
other countries. Bank representatives also met          and reverse stock split programs, as decided
with domestic investors in São Paulo and Rio            by the General and Extraordinary Shareholders’
de Janeiro, and with foreign investors in Europe        Meetings held in 2007, and (iii) the adoption of
and the United States. The most visible result          the policy to pay interest on capital prior to the
of these efforts was an increase in trading of          close of each quarter.
the Bank’s PNB (preferred class B) shares (code         Wishing to increase the liquidity of its shares,
BRSR6) during the course of the year and                two institutions initiated coverage of Banrisul
especially in the last quarter, as well as the Bank’s   in 2008: Banif, in July, and Banco do Brasil, in
inclusion in January 2009 in the IBrX-100 - Índice      December. Together with Credit Suisse and UBS
Brasil, a grouping of companies whose stocks            Pactual, they bring the total number of
are among the 100 most-traded on the Bovespa            companies currently involved in that process to
during the previous twelve-month period.                four, which should increase in 2009.



   Interest on Own Capital/Dividends

The Bank’s Board of Directors proposed and the          connection with dividends provisioned by the
Annual and Extraordinary General Meeting held           performance recorded in the first half of 2008,
on March 25, 2008 approved the 10% addition             with R$10.6 million in Income Tax withheld and
for the fiscal years of 2007 and 2008, totaling         R$157.9 million credited. Moreover, R$38.5
35% of the Adjusted Net Income. In 2008,                million from the 2008 fiscal year were
R$132.5 million was paid as dividends on the            provisioned and should be paid at a date to be
2007 result and R$168.5 million as Interest on          defined by the Annual and Extraordinary
Own Capital, in addition to R$18.4 million in           General Meeting.




                                                                                                             23
                                   BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
          Internal Controls and Compliance
Banrisul is constantly improving business practices monitoring, mitigating risks, promoting a culture
of control and opportunities for improvement, and complying with market regulations with respect
to ethical standards of controls and the information transparency.
The System of Internal Controls is a series of actions adopted by the Management to guarantee
that the goals and objectives established by the Institution are met. These actions are aimed at
protecting the Bank’s resources and ensuring that its records are accurate trustworthy as well as
compliance with relevant laws, company policies and sector regulations.
Control policies are established by the Internal Controls Management Committee and ratified by
the Banking Management Committee, which is charged with consolidating the Bank’s global
strategic vision by monitoring the actions that are proposed and carried out, internal controls and
compliance of guidelines established by the Board of Directors.


  Risk Management
Risk management is a fundamental and                    the continuous and systematic improvements.
strategic tool for any financial institution. The       The development of policies, internal control
risks inherent in the operations such companies         systems and security norms, integrated with the
range from easily identifiable financial risks, such    Bank’s strategic and marketing goals, is aimed
as market, liquidity and credit risks, to factors       at bringing the Company in line with the
that are less easily identifiable as risks, such as     standards recommended by the New Basel
operational risk or risk to the company’s image,        Capital Accords – Basel II, adopting the best
among others.                                           market practices through the best possible
Banrisul’s risk management practices and                combination of increases in assets and the use
policies seek to identify and integrate risk            of required capital.
mitigation processes inherent to banking with



  Credit Risk
Banrisul’s risk assessment structure is grounded        The continual and increasing use of statistical
on the principle of joint technical decisions, with     methods to evaluate risk for individuals and
the definition of credit granting scopes                corporate clients with the application of
corresponding to the decision level, from the           parameters established in policies and business
                                                        ruless has had a positive impact on the Bank’s
extensive network of branches with their
                                                        assets. The Bank’s adoption of the credit and
various categories, to the administration and
                                                        behavior score analyses has made it possible to
its risk and credit committees in the General
                                                        pre-approve clients based risk classifications
Management. This process aims to accelerate             projected by statistical models that are
credit granting based on technically pre-defined        conceptually more attractive for managing mass
limits that determine the maximum risk the              credit. These proprietary models comply with
Institution is willing to incur with each client,       Central Bank Resolution 2,682 of December 22,
meeting the risk/return ratio.                          1999.




                                                                                                          24
                                    BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
As for companies, the bank adopts technical           with the principles of the Basel II Accord. This
studies that assess companies using financial,        allows the Bank to advance from the standard
managerial, market and productive indicators,         approach to the intermediate level, maximizing
with periodic reviews that also take into             its capital structure with even more precise
consideration the companies’ position in              gauging of the risks involved with credit
current and future macroeconomic and                  operations. Banrisul’s timeline of actions
competitive scenarios.                                regarding this is in line with monetary authority
Credit Risk Management is based on the                requirements set forth in Central Bank
Institution’s selective and conservative policy,      resolutions and circular letters that address
following strategies defined by upper-level           exposure weighted by risk. The complexity of
Management and technical areas of the                 this process requires improved risk
Corporation. This principal guideline enabled         management, including more training and
the Bank’s credit performance to surpass              continuing education for professionals in the
that of the past two years, with an                   area, policies which, along with investments in
improvement in the quality of the portfolio           internal systems and processes, are a constant
reflected in the increase of the percentage           in Banrisul’s actions and directives.
of level AA to C rated operations in the total        Banrisul’s effective credit risk management
credit volume.                                        allows its credit portfolio to grow safely, even
The consolidation of these models has                 in the face of an anticipated climate of
brought a qualitative increase in credit              increasing default because of the international
granting with significant advances in risk            financial crisis, given the effectiveness of the
mitigation, and created a foundation for              tools and methods used by the Bank to measure
modernizing these processes that is consistent        the credit risk inherent to each individual client.


  Market Risk
Market risk refers to the potential of the            risk requirement and mapping processes
Instuition to incur losses because of changes in      necessary to analyzing positions relative to risk
the balance between the market values of asset        exposure across different indexers.
and liability contracts that may result from          The methods adopted by Banrisul to evaluate
fluctuations in interest rates, exchange rates or     market risk, include value at risk (VaR), sensitivity
price indexes, etc.                                   analyses and stress testing.
In 2008, Banrisul implemented measures to             VaR is a model used to quantify in monetary
improve information pertinent to market risk          terms the maximum expected risk of an
through improved management procedures                investment portfolio within a specific timeframe
including optimization of the risk to return ratio,   and degree of confidence.
risk diversification and identification of minimum    Sensitivity analysis is extremely important to
and maximum exposure limits, as well as               evaluating new scenarios. Once the basic
through compliance with specific requirements         scenario has been identified, several
mandated by the Central Bank since June 1,            parameters are altered for purposes of analysis
2008.                                                 and evaluation of the data produced by the
Among these measures, making systematic               model. In this way the sensitivity of the Bank’s
changes in the implementation of internal             capital to market variations can be measured
models used to calculate the per-capita market        by simulating stress scenarios. The stress




                                                                                                              25
                                  BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
scenarios are produced by altering specific            derivatives operations has been reduced.
market variables based on historic performance         It should be noted that the positions of
or projected macroeconomic situations. The             Banrisul’s assets and liabilities is monitored on
goal of these studies is to prevent risk and loss      a daily basis by following market conditions and
of the Institution’s resources in the event of a       the daily registry of its portfolios. Banrisul’s
future position change or from instability in the      Economic and Banking management
financial markets.                                     committees define policies for adjusting
These analyses have been particularly relevant         positions such that operational limits are
since the second half of 2008 that saw upheaval        maintained and the solidity of the Bank and the
in the financial markets, although the Bank’s          Conglomerate are preserved.
exposure to risk through exchange, swap or

  Liquidity Risk
Liquidity risk refers to the possibility that a        instruments and methods as the evaluation of
financial institution may have difficulty              growth in mismatches resulting from changes
liquidating its positions because of interruptions     in the prices of assets and liabilities, in particular
or imbalances in the flow of assets and liabilities    those deriving from changes in the
stemming from term mismatches or alterations           macroeconomic environment.
in the price curve.                                    In terms of assets positions, the cash flow
At Banrisul, follow-up of liquidation of assets        projections take into account the different
and liabilities positions and decision-making on       growth levels of the credit portfolio and
potential adjustments are in line with market          financial instruments, as well as distinct
risk management procedures.                            possibilities of alterations in delinquency
The Banking and Economic management                    indicators.
committees work at the management level to             Risks affecting liabilities include the possibility
define contingency policies and set comfortable        of early redemption of remunerated securities,
levels of liquidity. At the technical level, daily     as well as the potential for funding growth at
treasury control protocols use the same                levels lower than projected.


  Operational Risk
According to Brazilian Central Bank Resolution         makes decisions regarding matters of its
3,380 of June 29, 2006, Banrisul created an            responsibility; the Controllership, as the
institutional policy and the processes,                administrative unit that manages operational
procedures and systems necessary to                    risk; Compliance, Superintendents of the
implement its operational risk management              General Management Units; branch managers,
structure. The Bank’s Operational Risk                 responsible for compliance with internal controls
Management Policy was published as Internal            in their branches; and the Controller, the officer
Resolution 4,354 of June 20, 2008, and
                                                       responsible for the Bank’s Compliance division.
consolidated through a normative regulation.
                                                       The main responsibilities of this apparatus is to
The executive responsible for Banrisul’s
operational risk is the CEO. Other components          identify, evaluate, monitor, control and mitigate
in the operational risk management structure           Banrisul’s operational risks, including those
include the Internal Controls Committee, which         stemming from third-party services.




                                                                                                                26
                                   BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
All Banrisul employees and interns, as well as                          Boa rd of Dire cto rs
                                                                       and Executive Officers
third-party service providers, are responsible for
                                                                        Res pon sib le Dir ect or
adopting and observing behavioral measures
                                                                          Inter nal Cont rols
that avoid risk exposure as applicable to their                        Mana geme nt Com mitte e
duties.                                                                         Controller
In order to support these measures, Operational
Risk Management uses an automated                                     Manage rs of Head Office’s Units
                                                                               and Branch es
information management system that allows the
Institution to identify, create, represent and
                                                                           Inte rnal Con trol s Age nts
distribute information in ways that promote
usage, awareness and learning. Through analysis
of the information collected, the Banrisul’s         on     the    Bank’s      website,     http://
Operational Risk Matrix is created. Using Action     www.banrisul.com.br, accessible by following
Plans that are evaluated and prioritized by the      the path: Investor Relations/Corporate
Bank’s decision-making processes, the Matrix         Governance/Operational Risk.
allows for greater levels of confidence in all       Banrisul adopted the Basic Indicator Approach
aspects of its business, avoiding losses and         methodology to assess the portion of capital
lowering its risk exposure.                          needed to cover the Operational Risk, as
As of the first quarter of 2009, a detailed          provided for in Circular Letter 3,383 of April
description of the Operational Risk                  30, 2008, and Notice 16,913 of May 20, 2008,
Management Model/Structure will be available         issued by the Brazilian Central Bank.


  Basel Index
As of July 2008, the Basel Index was calculated
according to the premises of the New Basel                          Basel Index Growth
                                                                                (%)
Capital Accord – Basel II, as per rules
established by the Brazilian Central Bank
addressing the implementation of operational
and market risk management structures, the
rules for Reference Equity ascertainment by
means of Resolutions 3,444, 3,464 and 3,490
and Circular Letters 3,360, 3,361, 3,362, 3,363,
3,364, 3,365, 3,366, 3,368, 3,383 and 3,389. The
Brazilian Central Bank requires that the
minimum standard index be maintained at
11.0%.
The Basel Index represents the ratio between         weighted risk factor applicable to tax credits
the reference equity and the assets weighted         due to timing differences from 300% to 100%,
by risk, which shows the company’s solvability.      as well as the increase in Reference Equity due
At Banrisul, this index reached 20.1% in             to the new treatment of the additional provision
December 2008, 9.1 p. p. above the Brazilian         for credit operations, positively influenced the
Central Bank requirements. The reduction of the      composition of the Index.




                                                                                                          27
                                 BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
                  Technology Modernization
Banrisul has been frequently been recognized in the IT area as an institution that employs
technology solutions capable of making a difference in business processes and customer service,
even before such innovations become commonplace in the market.
Several initiatives serve to illustrate Banrisul’s technological trailblazing. During the 1990s, Banrisul
was one of the first institutions to offer Internet banking as an alternative means to carry out
financial transactions; it was a leader in the use of open-source software in self-service stations
and, more recently, in 2007, led through its development of mobile banking, which allows banking
operations to be carried out directly from a cell phone.
The big news during the 2008 fiscal year was the launch of the multi-use card, an internally
developed mechanism supporting conventional operations as well as digital certification. The
certification technology incorporated into the card provides greater security since it allows clients
to merge their passwords and use a single encrypted key for all channels. The project is still in its
testing phase within the Bank and at a few public agencies. Its use will be extended to account
holders in the first quarter of 2009, and the Bank’s goal is for all of its clients to be using the chip-
bearing cards within a maximum of two years.
These IT investments are closely aligned with Banrisul’s business strategy. As part of the Bank’s
80th anniversary celebration, it hosted the Banrisul International IT Forum on October 28, with
more than a thousand participants among banking sector representatives and important names
in IT from Brazil and abroad, including IBM, ITI, Gartner, Bull, Gemalto, Verifone and Smart Card
Alliance, among others. The forum allowed extensive debate about the current scenario and new
prospects in IT. The event was a convenient way for Banrisul to publicize the projects it has been
developing to protect its clients’ data.
Banrisul’s good IT practices have earned it a reputation as an innovator in the sector. Some of the
awards and acknoledgements it received for these efforts in 2008 include: World’s Best Integrated
Card Model, for its worldwide project involving the integration of banking operations and the
electronic government (Certifying Authority of Rio Grande do Sul), and the trophy for Outstanding
Smart Card Achievement Latin America, for its Cartão Múltiplo Banrisul com Chip (Banrisul multi-
use card with integrated chip), recognized as the most ambitious and advanced project of its kind
in Latin America.
The impact of the Bank’s IT efforts can also be seen in its participation, as both lecturer and
exhibiter, in national and international conferences and conventions. In 2008, Banrisul executives
participated in the CTST2008 and in Mobile
Commerce, both held in Florida, the
CARTES2008 in France and the CLAB2008
in Guatemala in addition to events in Brazil
sponsored by FEBRABAN (Brazilian
Federation of Banks) – CNAB/SP and
Workshop FEBRABAN/SP, among others.
Investments in technology totaled R$151.9
million in 2008. Approximately R$230.0
million in IT investments is planned for 2009.



                                                                                                            28
                                   BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
                       Public Sector Activities
Banrisul has been innovative with its relationship with the public sector by highlighting its integration
in onlending of State and Federal funds earmarked for sustainable development projects in the
communities in which it operates. By adopting strategies for advising these communities with its
professional expertise and through partnerships, the Bank effectively contributes to the
modernization of public administration.
In 2008, Banrisul built partnerships with the State of Rio Grande do Sul, FAMURS (Rio Grande do
Sul State Federation of Municipalities) and the Public Ministry to provide training for public
employees. Moreover, it sponsored several regional events, including fairs, festivals, and rodeos
that help to publicize its local services.


  Municipal Governments
In 2008, Banrisul consolidated its position as a      with special interest rates, terms and financial
leader in the municipal public sector. The            percentages, which helped increase the Bank’s
commercial projects developed by the Bank             volume of operation in this segment.
increased revenues from the agreement                 Registration for Contas a Pagar Eletônico
between Banrisul, FAMURS and Municipalities.          (online accounts payable), which automatically
This year, 64% of all state municipalities paid
                                                      transfers payroll credits, reached 91% of
their employees exclusively through the Bank.
                                                      municipalities with agreements with Banrisul. Its
Approximately 300 new Real Estate Loan
agreements were entered into by Banrisul and          share in tax collection also increased, totalling
municipalities, allowing more than 130 thousand       3.2 million collection documents from 261
public employees to purchase their own homes          municipalities with agreements in 2008.



  State Government
As the financial agent of the State of Rio Grande     government offices and public companies
do Sul Treasury, Banrisul broadened and               reached a volume of R$5.6 billion.
improved its operations within the public sector      Approximately 350 thousand individuals
over the course of 2008. In the last quarter, for     received their salaries and pension benefits
example, it implemented a system that makes           through Banrisul’s payroll services. The
updated tax collection data available every 15        Habitacional Cheque Casa (Housing Check—
minutes. This gives managers knowledge of the         Home) program that subsidizes home
revenues that will comprise cash flow in advance,     construction and remodeling projects, giving
optimizing tax collection processes and               low-income urban and rural individuals homes
increasing the security and control of taxpayer       with a minimum of comfort and quality, served
remittances. With more than 22.2 collection           numerous people in the cities of São João do
documents, total state revenues from                  Polêsine and Nova Hartz.




                                                                                                            29
                                  BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
 Federal Government
In the federal public sector, Banrisul’s strategy    The Bank also plays an important tax
is to broaden its service structure in order to      collection agent. In 2008, it received more
increase its business with government entities       than 5.5 million collection documents (GPS,
and civil servants. Thus, 2008 was a year
                                                     DARF, DAS), representing an amount in
marked by new contracts with these clients, such
                                                     excess of R$8.1 billion. Additionally, as a
as the payroll-deductible loan contract between
                                                     payer of INSS (Social Security) benefits,
the Bank and the federal administration and the
real estate loan covenant with the Companhia         Banrisul made close to 500 thousand monthly
de Geração Térmica de Energia Elétrica, CGTEE.       payments totaling more than R$3.5 billion.



  Judiciary and Public Ministry
The partnership between Banrisul and the State       electronic service stations located in Justice
Justice Tribunal allows for improvements to its      and Public Ministry facilities to better serve
collection services, providing better security in    the people of Rio Grande do Sul State. To
and control of fee, cost and legal deposit           strengthen its partnership with this public
collection. In 2008, bar codes were added to         s e c t o r, t h e B a n k s p o n s o r s p u b l i c i t y
all judicial collection documents, facilitating      campaigns to support professional
payment through self-service channels. The           associations such as RS-AJURIS—
Bank has exclusive rights to all judicial            Association of Rio Grande do Sul Judges,
collections and recorded a volume of 1.5 million     AMP/RS—Public Ministry Association of Rio
collection documents in 2008, 25% higher than        Grande do Sul, ASJ—Justice Employees
the previous year.                                   Association, CEJUS—Justice Tribunal
Banrisul has 55 service stations, including          Employees Organization and APROJUS—
branches, banking service stations and               Association of Public Ministry Employees.




                                                                                                                    30
                                 BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
                                       Marketing
Banrisul’s sales strategy prioritizes lines of communication including institutional, product and
service publicity through virtual, cultural, sporting and social channels. All of these media
guarantee accessibility to Banrisul products and services, reinforce its image, strengthen its
tradition and add value to the Banrisul brand.
September 2008 marked the Bank’s 80th anniversary. Since its founding, Banrisul has been graced
with innumerable distinctions and honors, acknowledgements that drive the launches of
institutional campaigns that, in 2008, focused on increasing market share, making its businesses
more competitive and strengthening its image and tradition.
In 2008, Banrisul successfully implemented product and service publicity. The Bank’s wide
penetration, not just in large cities, but also in smaller communities, allowed it to offer a portfolio
of products and services that can be modified to meet the specific demands of each region.
Some of Banrisul’s successful marketing initiatives from 2008 included campaigns such as
Banricompras Premiável, a Bank exclusive, the re-launch of the investment product POP Invest
Premiável, which got a new logo and brochure, installation of front lights at branches in 13 cities
in Santa Catarina State improving their visibility, as well as school promotions like Banrisul no Colégio
(Banrisul in School), aimed at stimulating financial responsibility in students, a strategy that earned
the Bank the Top de Marketing distinction for its “Na Onda Jovem” (Youth Vibe) case.
The distribution of online services was another area of focus in 2008. To make its internet portal
more attractive and faster, the Bank created a new visual identity, in which the institutional
campaign “Quem tem Banrisul tem tudo” (Whoever has Banrisul has it all) stands out, and
themed areas on its webpage to make it easier for clients to access the services they most use.
Culture has also received special attention from Banrisul: the Bank if a partner in innumerous
cultural projects and enterprises. Mixing music and education, the Bank sponsored the 9th
annual Concertos Banrisul para Juventude (Banrisul Concert for Youth), opening the musical
world of the São Pedro Theater Chamber Orchestra to children and adolescents in public and
private schools. Banrisul also supported other cultural projects and events, including Multipalco,
the Grape Festival, Expodireto and Expobento, the Mario Quintana Cultural House, Rio Grande
do Sul Art Museum, Rio Grande do Sul State Memorial, Hipólito José da Costa Museum of
Communication, Julio de Castilhos Museum, 36th Gramado Film Festival, Expointer, 54th Porto
Alegre Book Fair, Reading is Everything literacy program and Christmas Light, as well as many
other fairs, festivals, Rio Grande do Sul film productions, and rural events.
Banrisul also sponsors major soccer clubs around Rio Grande do Sul State, including the duo
Gre-Nal, as well as athletes participating in numerous other sports like judo, swimming, and skating.
Athletic sponsorships represent an important promotional opportunity for the Bank, and, above all,
a chance to integrate with and further the development of Rio Grande do Sul State.




                                                                                                            31
                                  BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
                            Human Resources
Banrisul’s people management model prioritizes holistic development of its employees,
understanding that they are ultimately responsible for the Bank’s reaching its goals. Several
kinds of training and educational programs in various areas are available to employees at all
levels through partnerships with schools, universities and consulting firms. These programs are
made available in-company and at Banrisul Training Centers, as well as at schools and universities,
providing diversity of interaction and learning.
With this vision, in 2008 Banrisul offered 1,749 courses with 9,348 participants, equivalent to
approximately 181.7 thousand hours of training and a total investment of R$6.0 million. Of this,
R$469.5 thousand was invested in graduate programs, R$840.9 thousand invested in postgraduate
programs and R$262.3 thousand in foreign language education. These efforts produced 50 new
business management graduates and 112 supervisors, with 259 employees enrolled in MBA
programs.
In addition to professional education programs and those aimed at improving the quality of life
of employees and their families, the Bank offers various other benefits, such as childcare stipends,
a residence program for managers, health, dental, and prescription drug coverage, group life
insurance and a supplemental pension program, among others.
At the close of 2008, Banrisul had 9,207 employees and 1,937 interns. These numbers reflect
734 new hires resulting from the latest public service examination and the loss of 347 employees
who retired, were dismissed or died. The increase of 387 employees is needed to attend to the
Bank’s network expansion and new projects in development. Personnel expenses, including
payroll, deductions and benefits came to R$835.4 million in 2008.


                   Corporate Responsability
In the past few years, Banrisul has established itself as a
leading presence in the adoption of sustainable practices
grounded in the concepts of social responsibility and
corporate citizenship. In this context, the Bank invested
R$30.3 million in 2008 in community projects, its workforce and the environment. Taken together,
these three areas form the basis of the Bank’s corporate responsibility management, which also
includes education, culture, sports, health and the environment.
The quality of Banrisul’s products and services also depends on those who produce and deliver
them to the public. For this reason, care for their health and quality of life is fundamental. Thus,
the Bank offers its employees several preventive medicine and treatment programs for integral
and occupational health through its Controle Médico de Saúde Ocupacional (Occupational Health
Medical Control) program.




                                                                                                       32
                                 BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
As a socially responsible company, Banrisul is an active participant in education as well as cultural
and sporting social inclusion programs. Among several iniciatives, the Bank’s supports Junior
Achievement, the RS Children’s Network program, Karate Beyond Sports and the “Projeto Pescar
(Fishing Project) Banrisul”, that for more than five years has promoted social inclusion of at-risk
youths. In partnership with the Foundation Fishing Project, five classes with a total of 100 youths
aged 16 and 19 have participated. Of these, 76% have already been placed in the job market.
The Bank’s social management policies are designed to make efficient use of energy and to
combat waste. Banrisul’s Eficientização Energética (Energy Efficiency) Program, PROGEB, is
concerned with raising intelligent energy use awareness through lectures and workshops, changing
habits. In practice, efficient use of energy means substituting old equipment for modern, certified
models.
In 2008, Banrisul launched a credit line for implementing energy efficiency projects, providing the
financial resources necessary for investments in efficient electricity use through effective socio-
environmental actions.
The Reciclar Banrisul (Recycle Banrisul) Program puts the Bank’s social and ecological vision into
daily practice. The program aims to reduce residual waste generation by companies and to raise
awareness of proper disposal of such materials. The initiative, working closely with employees,
has also been broadening its partnerships with schools, associations, NGOs, state secretariats
and municipal governments. In 2008, several programs including workshops, storytelling,
benchmarks and expositions with more than 30 thousand participants were held in various cities
throughout Rio Grande do Sul State.
The proper disposal of residual waste creates both jobs and income. In 2008, The Recycle Banrisul
Program sent 44,807 kg of dry waste products from administrative agencies and 397,000 kg of
paper to triage facilities for recycling. In terms of the savings generated, 2008 saw a 33.7% reduction
in paper purchased in comparison to 2007. From 2001 to 2008, Recycle Banrisul has promoted
the recycling of 3,414 tons of paper, saving 48 thousand threes.
With the same focus, the year Banrisul turned 80 it launched Projeto Sementes (Project Seeds),
which donates seeds from native trees adapted to each region on the state, benefitting close to
16 thousand farmers.
Adopting management standards based on the ethics of transparency, throughout 2008 the Bank
entered into several partnerships to solidify and increase these initiatives. Among these, the “As
Vantagens de Permanecer na Escola (Advantages to Staying in School)” program, in partnership
with Junior Achievement, trains students for business. Another key partnership with the NGO
Parceiros Voluntários (Volunteer Partners) is designed to strengthen the volunteerism in the
Institution and to spread individual social responsibility among its employees.
These kinds of investments are a priority for a bank that is committed to the community in which
it operates. For Banrisul, acts of social and corporate responsibility are ways of giving back to
society for the prestige and confidence it has deposited in the Institution.




                                                                                                          33
                                 BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
                                       Awards
   January/2008. Banrisul features the best return on shareholders’ equity of
Brazilian banks.
Banrisul is first among the country’s banking institutions in return on shareholders’
equity. The annual profitability reached 45.2% over the result accumulated up
to September 2007. The study was prepared by Economática Consulting and
published by IstoÉ Dinheiro magazine.

  February/2008. Banrisul is one of the best investment options for 2008.
Banrisul is one of the best investment options for 2008, according to Exame
magazine.
The magazine states the Bank has the third highest potential for a rise among
banking institutions, with a rate of 50%.

    March/2008. Banrisul is awarded for developing the integrated card.
The international acknowledgement in the category of best integrated card
project – electronic government (Certifying Authority of Rio Grande do Sul) and
banking system was granted at the 10-year anniversary celebration of the
MULTOS System, in London, England. The award demonstrates the international
recognition of the state-of-the-art technology implemented by the bank. MULTOS
is the operating system of Banrisul’s chip card, whose competitive edge lies in
the ability to support several applications. MULTOS allows a card to be used
for debit transactions, within the international standard EVM, and for safe Internet
Banking operations and the digital certification of the State Certifying Authority.

  March/2008. Banrisul receivesCorporate Reputation Award.
Banrisul was granted the Corporate Reputation award, as one of the most
respected corporate brands in Rio Grande do Sul, according to an unprecedented
survey conducted in the country by Revista Amanhã magazine, and Troiano
Consultoria de Marca, a brand consulting firm based in São Paulo.

   April/2008. Banrisul joins the list of the largest companies of the world.
For the first time ever, Banrisul is now listed among the 2,000 largest companies
in the world, according to Forbes magazine, which specializes in economy,
finance and businesses. Forbes’s rating takes into account annual sales in dollars,
results, assets and market value.

    May/2008. Banrisul receives the trophy “Outstanding Smart Card
Achievement – Latin America.”
Banrisul was awarded by Smart Card Alliance Latin America (SCALA) in May,
receiving the “Outstanding Smart Card Achievement – Latin America” (OSCA-
LA) trophy in the “Runner Up” category for the Cartão Internet Banrisul com
Chip (Banrisul’s Internet Chip Card), deemed by the entity to be the most
audacious and emerging project in Latin America. The award was granted during
the CardTechSecurTech 2008, held in Orlando, USA.




                                                                                        34
                                   BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
     June/2008. Banrisul is acknowledged as Brazil’s Best Public Financial
Conglomerate.
In 2007, Banrisul was named the Best Brazilian Financial Conglomerate by
Conjuntura Econômica magazine, which is edited by the Brazilian Institute of
Economics at the Getulio Vargas Foundation (FGV). The acknowledgement is
based on domestic market growth indicators, financial-economic performance
and structure (shareholders’ equity/profitability). The performance accomplished
is related to restructuring efforts carried out by the Institution, the implementation
of a new management model, the participation of the employees in the results
and the listing on the capital market.

   June/2008. Banrisul receives award in national IT event.
Banrisul received the e-finance 2008 award, which is granted by Executivos
Financeiros magazine, in the Electronic Data Transfer category. The award is given
to innovative projects in Information Technology and Telecommunications
infrastructure and applications, contemplating projects aimed at improving the
quality of services rendered by the Country’s financial institutions.

   June/2008. Banrisul is considered one of the best Brazilian retail banks.
Banrisul was considered one of the five Best Retail Banks in Brazil by Balanço
Financeiro 2008 magazine. The ranking was prepared by Austin Rating and
published in Gazeta Mercantil newspaper of São Paulo. The survey ranks the best
institutions in each category of banks, leasing, brokers, distributors, financial
institution, insurance, pension plans and capitalization. The publication shows a
detailed description of the sector, featuring indicators from 432 institutions.

    August/2008 – Banrisul ranks 15th in Grandes e Líderes 2008 ranking – 500
Largest Companies in the South.
Banrisul was 15th in the Grandes e Líderes 2008 ranking – 500 Largest Companies
in the South, compiled by Revista Amanhã magazine and PricewaterhouseCoopers
consultants. In Rio Grande do Sul State, the Bank is the fourth largest company
among the biggest 100, and has the largest working capital. Also in the state,
Banrisul is second in terms of shareholders’ equity.

    August/2008 - Banrisul featured in Febraban’s Social Report
Banrisul was the highlight in environmental management in the 2007 Social Report
issued by the Brazilian Bank Federation – FEBRABAN, which reports on the
participation and involvement of the banking sector in meeting society’s demands.
The programs developed by Banrisul, PROGEB and Recycle Banrisul, were featured
in the report as initiatives that mitigate the environmental impacts of the Company’s
activities and raise the awareness of employees, clients and suppliers about the
need to preserve natural resources. The Social Report also emphasized the Bank’s
participation in social activities, through the Projeto Pescar, cultural initiatives,
such as Concertos Banrisul para a Juventude and sports activities, with programs
such as Criança no Esporte (Children in Sports) and Social Karate Além do Esporte.




                                                                                         35
                                  BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
  September/2008 – Banrisul named one of the most valuable brands in Latin
America.
Banrisul was named one of the 50 most valuable brands in Latin America
according to the Interbrand Ranking of the Most Valuable Latin American
brands, compiled by American company Interbrand, a global leader in brand
consulting. The value of the Banrisul brand in 2008 was evaluated at US$179
million, or R$317 million. In the Brazilian financial sector, Banrisul figures among
the five most valuable bank brands and, in Rio Grande do Sul State, it is the
second most valuable brand. Banrisul’s analysis suggests that the 2007 financial
result, combined with the image of a trustworthy institution that knows how
to modernize in order to offer the best market practices, have jointly
contributed to the great brand value.

   September/2008 – Banrisul receives Respect for Individual Investors award
Banrisul was featured at the opening ceremony of the 6th Expo Money in
São Paulo.
The institution received the award for Respect for Individual Investors for its
participation in earlier editions of Expo Money, the largest financial education
and investments event in Latin America. Expo Money is a circuit of events
consisting of lectures and free expositions, targeted at those who are interested
in learning about personal financial strategies and investment options.

  October/2008 – Banrisul wins citizenship award.
Banrisul was recognized with the Prêmio Top Cidadania 2008 (Top Citizenship
Award) in the business category by ABRH, the Brazilian Association of Human
Resources of Rio Grande do Sul State, for its case “Consciência que gera
sustentabilidade” (Awareness that creates sustainability) that documents the
activities of the Recycle Banrisul Program.

  October/2008 – Banrisul wins social environmental responsibility award.
Rio de Janeiro’s Instituto Ambiental Biosfera awarded Banrisul the Prêmio
Nacional de Responsabilidade Socioambiental Empresarial (National Business
Social Environmental Responsibility Award) in recognition of the bank’s social
environmental development efforts throughout Brazil.

  November/2008 – Sinduscon names Banrisul Financial Institution of the
Year.
SINDUSCON-RS, the Civil Construction Industries Union of Rio Grande do
Sul, recognized Banrisul as the Financial Institution of the Year. This award
recognizes the performance of companies, builders and developers that
contribute to growth in the civil construction sector.




                                                                                       36
                                   BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
   November/2008 – Banrisul receives prestigious marketing honor.
Banrisul received the honor Top de Marketing from the ADVB-RS, Association
of Marketing and Sales Directors of Rio Grande do Sul State. The recognition is
extremely prestigious in the Rio Grande do Sul marketing industry and confers
a competitive advantage on its winner. The distinction was awarded in
recognition of the case “Na Onda Jovem.”

   November/2008 – Banrisul recognized as 50th largest economic group in
Brazil.
According to the São Paulo publication Balanço Anual 2008, Banrisul is the 50th
largest economic group in Brazil. Between 2006 and 2007, Banrisul moved up
22 spots from its previous ranking in the list of Brazil’s 300 largest groups. It has
been ranked 72nd.

   December/2008 – Banrisul recognized by store managers’ group.
Banrisul received the 2008 Mérito Lojista (Storeowner Merit) Award for Best
Debit Card from FCDL-RS, the Rio Grande do Sul State Federation of Chambers
of Store Managers. The Bank was recognized in the Best Capital Financial
Institution and Best Debit Card (Banricompras) categories.




Acknowledments
In 2008, Banrisul achieved the result anticipated for the period and it intends to continue to move
forward, fulfilling the expectations of its clients and shareholders in close collaboration with the
State of Rio Grande do Sul. The Bank’s dedicated team of employees worked extremely hard to
counter the turbulent economic conditions that characterized the second half of the year, and
once again their efforts proved the resilience and efficiency of the Bank’s services. We would like
to thank all of you for the support and confidence you have given Banrisul and for helping us to
improve our services and increase our success.


                                                                          Board of Executive Officers




                                                                                                        37
                                  BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
Financial Statements
                                                                Balance Sheets
                                                                            December 31, 2008
                                                                          (In Thousands of Reais)




                                                                                                                                   Banrisul          Banrisul Consolidated
ASSETS                                                                                                                    2008        2007               2008         2007
                                                                                                                                    (reclassified)                  (reclassified)

CURRENT ......................................................................................................       16,298,255    12,286,589        16,354,440    12,339,948
 CASH ..........................................................................................................        373,239       347,304           373,278       347,353
 INTERBANK INVESTMENTS (Notes 03 (b) and 04) ................................                                         4,668,686     3,682,417         4,687,078     3,698,062
   Money Market Investments ......................................................................                    4,430,537     3,601,587         4,448,929     3,617,232
   Interbank Deposits ....................................................................................              238,149        80,830           238,149        80,830
 SECURITIES AND DERIVATIVES (Notes 03 (c) and 05) ........................                                            3,004,516     1,002,425         3,010,816     1,005,946
   Own Portfolio ............................................................................................         2,472,028       422,222         2,478,323       425,738
   Linked to Repurchase Commitments .........................................................                           327,052       452,497           327,052       452,497
   Derivatives ...............................................................................................            7,411         7,802             7,411         7,802
   Linked to Central Bank of Brazil ................................................................                    159,468        52,668           159,468        52,668
   Linked to Guarantees ................................................................................                 38,557        67,236            38,557        67,236
   Privatization Certificates ............................................................................                    -             -                 5             5
 INTERBANK ACCOUNTS ........................................................................                          1,341,804     2,333,859         1,341,804     2,333,859
   Payments and Receipts Pending Settlement .............................................                                 3,377         2,106             3,377         2,106
   Restricted Deposits (Note 06)
      - Central Bank of Brazil .........................................................................              1,318,412     2,313,984         1,318,412     2,313,984
      - Correspondents ...................................................................................               20,015        17,769            20,015        17,769
 INTERBRANCH ACCOUNTS ..................................................................                                 43,936        50,390            43,936        50,390
   Third-party Funds in transit ........................................................................                  1,368           999             1,368           999
   Internal Transfers of Funds ........................................................................                  42,568        49,391            42,568        49,391
  LENDING OPERATIONS (Notes 03 (d) and 07) ......................................                                     5,770,975     4,000,069         5,770,975     4,000,069
   Lending Operations
      - Public Sector .......................................................................................            79,942        94,215            79,942        94,215
      - Private Sector .....................................................................................          5,960,215     4,189,538         5,960,215     4,189,538
   Allowance for Loan Losses (Note 03) .......................................................                        (269,182)     (283,684)         (269,182)     (283,684)
 LEASING OPERATIONS (Notes 03 (d) and 07) ........................................                                       45,001        23,335            45,001       23,335)
   Lease Receivables
      - Public Sector .......................................................................................                634        1,249                634        1,249
      - Private Sector .....................................................................................              46,553       23,789             46,553       23,789
   Allowance for Doubtful Lease Receivables ...............................................                              (2,186)      (1,703)            (2,186)      (1,703)
 OTHER RECEIVABLES (Note 08) .............................................................                            1,044,054      827,629          1,075,286      861,689
   Foreign Exchange Portfolio .......................................................................                   625,761      327,682            625,761      327,682
   Income Receivable ...................................................................................                  44,173       37,600             39,228       31,596
   Trading Accounts .......................................................................................                    -            -              1,858        3,078
   Other .........................................................................................................      391,516      473,463            426,816      511,076
    Allowance for Losses on Other Receivables (Note 07) ............................                                    (17,396)     (11,116)           (18,377)     (11,743)
 OTHER ASSETS ........................................................................................                     6,044       19,161              6,266       19,245
   Temporary Investiments ............................................................................                     3,070        3,441              3,070        3,441
   Allowance for Losses ...............................................................................                  (1,448)      (1,225)            (1,448)      (1,225)
   Other Assets .............................................................................................              7,827       14,847              7,927       14,863
   Allowance for Valuation .............................................................................                 (7,826)      (2,360)            (7,826)      (2,360)
   Prepaid Expenses ....................................................................................                   4,421        4,458              4,543        4,526




                                                                                                                                                                                     39
                                                                 BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
                                                                                                                                   Banrisul          Banrisul Consolidated
ASSETS (cont.)                                                                                                           2008         2007               2008         2007
                                                                                                                                    (reclassified)                  (reclassified)

LONG-TERM ASSETS ..................................................................................                   8,464,826     7,764,664         8,486,872     7,782,327
 SECURITIES AND DERIVATIVES (Notes 03 (c) and 05) .........................                                           3,097,472     4,145,912         3,099,975     4,148,139
   Linked to Repurchase Commitments .........................................................                         2,125,424     2,241,885         2,125,424     2,241,885
   Derivatives ...............................................................................................          491,999       989,334           491,999       989,334
   Linked to Central Bank of Brazil ................................................................                    102,492       112,096           102,492       112,096
   Linked to Guarantees ................................................................................                192,684       696,744           192,684       696,744
   Privatization Certificates ............................................................................              184,873       105,853           187,376       108,080
 INTERBANK ACCOUNTS ........................................................................                            382,057       324,633           382,057       324,633
   Restricted Deposits (Note 06)
      - National Housing System ...................................................................                     382,057       324,633           382,057       324,633
 LENDING OPERATIONS (Notes 03 (d) and 07) .......................................                                     4,185,375     2,768,000         4,185,375     2,768,000
   Lending Operations
      - Public Sector .......................................................................................           109,619       102,095           109,619       102,095
      - Private Sector .....................................................................................          4,748,716     3,254,456         4,748,716     3,254,456
   Allowance for Loan Losses (Note 03) .......................................................                        (672,960)     (588,551)         (672,960)     (588,551)
 LEASING OPERATIONS (Notes 03(d) and 07) .........................................                                       57,194        18,852            57,194        18,852
   Lease Receivables
      - Public Sector .......................................................................................                425         1,664               425         1,664
      - Private Sector, ....................................................................................              60,328        18,891            60,328        18,891
   Allowance for Doubtful Lease Receivables ...............................................                              (3,559)       (1,703)           (3,559)       (1,703)
 OTHER RECEIVABLES (Note 08) .............................................................                              725,285       500,655           744,828       516,091
   Foreing Exchange Portfolio .......................................................................                      5,408         5,233             5,408         5,233
   Other .........................................................................................................      725,285       500,655           744,828       516,091
   Allowance for Losses on Other Receivables (Note 07) .............................                                     (5,408)       (5,233)           (5,408)       (5,233)
 OTHER ASSETS ........................................................................................                    17,443         6,612            17,443         6,612
   Other Assets .............................................................................................             18,446        15,787            18,446        15,787
   Allowance for Valuation, ............................................................................                 (1,003)       (9,175)           (1,003)       (9,175)
PERMANENT ASSETS .................................................................................                      629,603       576,348           364,063       334,613
    INVESTIMENTS .....................................................................................                  278,688       256,671              8,241         8,073
   Investments in Domestic Subsidiaries (Note 02 (c)) .................................                                 271,765       249,758                  -             -
   Other Investiments ...................................................................................                 11,920        11,910            13,711        13,543
   Allowance for Losses ...............................................................................                  (4,997)       (4,997)           (5,470)       (5,470)
 PROPERTY AND EQUIPMENT IN USE (Note 09 (a)) ............................                                               146,676       120,400           151,351       127,076
   Real Estate ...............................................................................................          120,056       120,193           127,086       131,758
   Other .........................................................................................................      405,585       357,389           410,432       362,786
   Accumulated Depreciation .........................................................................                 (378,965)     (357,182)         (386,167)     (367,468)
 INTANGIBLE (Note 09 (b)) .........................................................................                     204,239       199,277           204,471       199,464
   Intangible Assets .......................................................................................            280,218       222,274           280,450       222,461
   Accumulated Amortization .........................................................................                  (75,979)      (22,997)          (75,979)      (22,997)

TOTAL ASSETS ...........................................................................................             25,392,684    20,627,601        25,205,375    20,456,888




                                                                                                                                                                                     40
                                                                  BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
                                                                                                                                   Banrisul          Banrisul Consolidated
LIABILITIES AND SHAREHOLDERS´EQUITY                                                                                       2008        2007               2008         2007
                                                                                                                                    (reclassified)                 (reclassified)
CURRENT ......................................................................................................        18,177,692   14,703,066        18,021,578   14,530,335
 DEPOSITS (Note 10) ..................................................................................                11,289,466   10,296,039        11,120,370   10,141,348
   Demand Deposits ......................................................................................              1,869,619    1,829,413         1,864,035    1,827,727
   Saving Deposits .......................................................................................             4,805,853    4,633,790         4,805,853    4,633,790
   Interbank Deposits ....................................................................................                11,981        3,507            11,981        3,507
   Time Deposits ...........................................................................................           4,585,598    3,809,524         4,422,086    3,656,519
   Other Deposits ..........................................................................................              16,415       19,805            16,415       19,805
  MONEY MARKET FUNDING (Note 10) ..................................................                                    2,290,220    2,289,189         2,234,251    2,228,119
   Own Portfolio ............................................................................................            819,131    1,442,010           763,162    1,380,940
   Third Parties ..............................................................................................        1,471,089      847,179         1,471,089      847,179
 INTERBANK ACCOUNTS ........................................................................                              11,779        9,475            11,779        9,475
   Receipt and Payment Pending Settlement ................................................                                11,773        9,473            11,773        9,473
   Correspondents .........................................................................................                    6            2                 6            2
 INTERBRANCH ACCOUNT .....................................................................                               113,070       98,001           113,070       98,001
   Third-party Funds in Transit .......................................................................                  112,908       95,095           112,908       95,095
   Internal Transfers of Funds ........................................................................                      162        2,906               162        2,906
 BORROWINGS ..........................................................................................                   622,473      307,184           622,473      307,275
   Domestic Borrowings - Other Institutions ..................................................                                 -            -                 -           91
   Foreign Borrowings (Note 11) ...................................................................                      622,473      307,184           622,473      307,184
 DOMESTIC ONLENDINGS -
   OFFICIAL INSTITUTIONS (Note 12) .....................................................                                329,949      268,655           329,949      268,655
   Nacional Treasury ....................................................................................                42,290       36,036            42,290       36,036
   National Economic and Social Development Bank (BNDES) ..................                                             204,358      172,019           204,358      172,019
   Federal Savings and Loan Bank (CEF) ....................................................                               1,432        1,334             1,432        1,334
   National Equipment Financing Authority (FINAME) ..................................                                    81,869       59,266            81,869       59,266
 FOREING ONLENDINGS ........................................................................                              31,792        6,783            31,792        6,783
    Foreign Onlendings (Note 11) ...................................................................                      31,792        6,783            31,792        6,783
   DERIVATIVES (Note 05 (d)) ......................................................................                        8,348        2,984             8,348        2,984
    Derivatives ...............................................................................................            8,348        2,984             8,348        2,984
   OTHER PAYABLES (Note 13) ....................................................................                       3,480,595    1,424,756         3,549,546    1,467,695
    Collected Taxes and Other ........................................................................                    80,948       27,258            80,948       27,258
    Foreign Exchanges Portfolio .....................................................................                     91,215       22,478            91,215       22,478
    Social and Statutory ..................................................................................               39,229       51,472            39,295       51,579
    Tax and Social Security ............................................................................                  78,551       69,247            81,551       80,363
    Trading Account ........................................................................................                   -          533             1,554        3,278
    Financial and Development Funds (Note 21 (a)) .......................................                              2,672,001      696,401         2,672,001      696,401
    Other .........................................................................................................      518,651      557,367           582,982      586,338




                                                                                                                                                                                    41
                                                                 BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
                                                                                                                                   Banrisul          Banrisul Consolidated
LIABILITIES AND SHAREHOLDERS´EQUITY (cont.)                                                                               2008        2007               2008         2007
                                                                                                                                    (reclassified)                  (reclassified)

LONG-TERM LIABILITIES ............................................................................                    4,135,853     3,132,522         4,101,355     3,133,139
 DEPOSITS (Note 10) ...................................................................................               3,136,312     2,225,817         3,135,713     2,224,610
   Time Deposits ............................................................................................         3,136,312     2,225,817         3,135,713     2,224,610
  DOMESTIC ONLENDINGS -
   OFFICIAL INSTITUTIONS (Note 12) ......................................................                               385,771       359,619           385,771       359,619
   Nacional Treasury .....................................................................................                13,092       15,224             13,092       15,224
   National Economic and Social Development Bank (BNDES) ....................                                           278,316       262,161           278,316       262,161
   Federal Savings and Loan Bank (CEF) .....................................................                               8,339        6,139              8,339        6,139
   National Equipment Financing Authority (FINAME) ...................................                                    86,024       76,095             86,024       76,095
 DERIVATIVES (Note 05 (d)) ......................................................................                         27,538       18,917             27,538       18,917
   Derivatives ................................................................................................           27,538       18,917             27,538       18,917
 OTHER PAYABLES (Note 13) ....................................................................                          586,232       528,169           552,333       529,993
   Tax and Social Security ............................................................................                 367,419       345,731           367,419       347,183
   Other .........................................................................................................      218,813       182,438           184,914       182,810
MINORITY INTEREST ..................................................................................                           -            -              3,303        1,401
SHAREHOLDERS' EQUITY (Note 20) ...........................................................                            3,079,139     2,792,013         3,079,139     2,792,013
   Capital ......................................................................................................     2,300,000     2,034,000         2,300,000     2,034,000
   Capital Reserves ......................................................................................                 6,164        6,275              6,164        6,275
   Profit Reserves .........................................................................................            782,482       751,691           782,482       751,691
   Assets Valuation Adjustment (Note 05 (b)) .................................................                           (9,507)           47            (9,507)           47


TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY .............................                                             25,392,684    20,627,601        25,205,375    20,456,888




                                                                                                                                                                                     42
                                                                  BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
                                           Statement of Income
                                                                        December 31, 2008



                                                                                                                                              In Thousands of Reais
                                                                                                                         BANRISULBANRISUL CONSOLIDATED
                                                                                           2nd Sem/2008          2008            2007             2008          2007
                                                                                                                           (reclassified)                 (reclassified)

FINANCIAL INCOME ............................................................                 2,297,611     3,870,493     2,848,268          3,879,663    2,875,824
   Lending Operations ..............................................................          1,342,186     2,336,380     1,679,934          2,336,380    1,679,934
   Leasing Operations ..............................................................              9,780        16,192           9,730           16,192         9,730
   Securities Transactions ........................................................             581,969       989,818       812,843            998,988     840,399
   Derivatives .........................................................................               -             -        10,056                  -      10,056
   Foreign Exchange Operations .............................................                    208,370       217,719         50,607           217,719       50,607
   Compulsory Investments ....................................................                  155,306       310,384       285,098            310,384     285,098
FINANCIAL EXPENSES .......................................................                    1,385,276     2,176,116     1,481,061          2,157,313    1,451,141
   Funding Operations .............................................................             810,638     1,420,123     1,104,621          1,401,077    1,089,320
   Borrowings, Assignments and Onlendings ..........................                            398,286       482,146       138,412            482,146     138,412
   Derivatives .........................................................................         22,922        17,548                  -        17,548                -
   Allowance for Loan Losses (Note 07 (d)) .............................                        153,430       256,299       238,028            256,542     223,409
GROSS PROFIT FROM FINANCIAL OPERATIONS .........                                                912,335     1,694,377     1,367,207          1,722,350    1,424,683
OTHER OPERATING INCOME (EXPENSES) .....................                                        (529,083)   (1,006,865)     (756,612)        (1,018,111)   (791,581)
   Income from Services Rendered (Note 15) ..........................                            48,337        95,917         94,286           135,319     168,726
   Bank Fees Income (Note 16) ..............................................                    198,244       403,374       380,268            403,372     380,268
   Equity in Subsidiaries (Note 02 (c)) .....................................                    17,810        30,152         43,938                  -               -
   Personnel Expenses ...........................................................              (426,111)    (830,099)      (734,383)         (835,369)    (739,692)
   Other Administratives Expenses (Note 17) ..........................                         (296,465)    (567,549)      (508,159)         (575,239)    (527,615)
   Tax Expenses ....................................................................            (76,610)    (147,433)      (141,762)         (152,586)    (153,381)
   Other Operating Income (Note 18) .......................................                     114,977       194,983       264,266            193,218     249,850
   Other Operating Expenses (Note 19) ...................................                      (109,265)    (186,210)      (155,066)         (186,826)    (169,737)
INCOME FROM OPERATIONS ...........................................                              383,252       687,512       610,595            704,239     633,102
INCOME BEFORE TAXES ON INCOME AND EMPLOYEE
   PROFIT SHARING ...........................................................                   383,252       687,512       610,595            704,239     633,102
INCOME AND SOCIAL CONTRIBUTION TAXES
   (Notes 03 (l) and 22 (a)) .....................................................              (83,914)     (66,659)       368,000           (83,192)     345,838
EMPLOYEE PROFIT SHARING ...........................................                             (16,692)     (29,980)       (62,214)          (29,990)     (62,214)
MINORITY INTEREST .........................................................                            -             -                 -          (184)         (345)
NET INCOME ........................................................................             282,646       590,873       916,381            590,873     916,381
Number of Outstanding Shares (Thousands) ............................                           408,974       408,974        408,974                  -               -
Earning per Thousand Shares (R$) ..........................................                      691,11      1,444,77      2,240,68                   -               -




                                                                                                                                                                           43
                                                               BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
                                                                     Cash Flow
                                               For the 2nd Semester ended December 31, 2008



                                                                                                                                           In Thousands of Reais
                                                                                                                       BANRISULBANRISUL CONSOLIDATED
                                                                                                                   December, 31          December, 31
                                                                                         2nd Sem/2008            2008      2007       2008      2007
Adjusted Net Income ............................................................               475,263        860,441       619,018        893,101       657,234
  Net Income .........................................................................         282,646        590,873       916,381        590,873       916,381
Adjustment to Net Income:
  Depreciation and Amortization ..............................................                   49,940        91,386        31,709         92,447        32,484
  Equity Subsidiaries .............................................................             (17,810)     (30,152)      (43,938)               -             -
  Dividends Receivable from Subsidiaries ..............................                                -        1,319         3,207               -             -
  Provision for Loan Losses ...................................................                 153,430       256,299       238,028        256,543       223,409
  Reserve for Co-obligations ..................................................                  (3,348)       (2,221)         (377)        (2,221)         (377)
  Reserve for Contingencies ..................................................                   26,361        45,762      (24,175)         47,123        (6,073)
  Deferred Income and Social Contribution Taxes ...................                             (15,956)     (92,825)     (501,817)       (91,664)     (508,590)
Changes in Assets and Liabilities .......................................                     (135,986)       519,399       172,535        486,940       134,647
  Assets Valuation Adjustment ................................................                   (5,283)       (9,554)            33        (9,554)            33
  (Increase) Decrease in Securities ........................................                (1,599,509)     (963,646)     (601,310)      (966,701)     (605,391)
  (Increase) Decrease in Derivatives .....................................                       30,347        23,980        (4,175)        23,980        (4,175)
  (Increase) Decrease in Interbank
     and Interbranch Accounts ................................................                  937,113        958,459     (600,361)        958,458     (600,361)
  (Increase) Decrease in Loan Operations ..............................                     (1,519,832)    (3,434,235)   (1,779,129)    (3,434,236)   (1,779,134)
  (Increase) Decrease in Leasing Operations ..........................                          (32,271)      (62,419)        (6,240)      (62,419)        (6,240)
  (Increase) Decrease in Other Receivables ..........................                         (228,528)      (349,441)     (238,046)      (358,847)     (155,908)
  (Increase) Decrease in Other Assets ...................................                          6,621         2,286        (4,815)         2,149        (4,805)
  Increase (Decrease) in Deposits ..........................................                  1,256,378     1,903,922     2,039,005      1,890,125     2,013,020
  Increase (Decrease) in Money Market Funding ...................                             (309,363)          1,030       505,186          6,132       474,927
  Increase (Decrease) in Borrowing .......................................                      260,004        427,744       295,857        427,653       295,595
  Increase (Decrease) in Other Liabilities ................................                   1,068,337     2,021,273        566,530     2,010,200        507,086
NET INCOME FROM OPERATING ACTIVITIES ................                                           339,277     1,379,840        791,553     1,380,041        791,881
CASH FLOW FROM INVESTIMENT ACTIVITIES
  Updating of Stock Exchange Membership ...........................                                    3         (111)          612           (111)          612
  Disposal of Investiments ......................................................                     62          138             1               -       1,570
  Disposal of Property and Equipment in Use .........................                               176           475           827            477           999
  Acquisition of Investiments ..................................................                    (19)          (42)      (1,624)          (168)       (1,560)
  Acquisition of property and equipment in use ........................                        (42,804)      (62,524)      (26,652)       (61,308)      (27,495)
  Acquisition of Intangible .......................................................             (11,119)     (60,579)     (200,713)       (60,899)     (200,993)
NET CASH USED IN INVESTMENT ACTIVITIES ..............                                          (53,701)     (122,643)     (227,549)      (122,009)     (226,867)




                                                                                                                                                                     44
                                                               BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
                                                                        Cash Flow
                                                                                            (CONT.)


                                                                                                                                      In Thousands of Reais
                                                                                                                      BANRISULBANRISUL CONSOLIDATED
                                                                                                                  December, 31          December, 31
                                                                                        2nd Sem./2008           2008      2007       2008      2007

CASH FLOW FROM FINANCING ACTIVITIES ...................
  Capital Increase ..................................................................                  -            -     800,000             -     800,000
  Dividends Paid ...................................................................                   -     (87,056)     (71,519)     (87,056)     (71,519)
  Interest on Own Capital Paid ...............................................                  (84,395)   (157,937)    (100,700)    (157,937)    (100,700)
  Change in Minority Interest ..................................................                       -            -            -       1,902           296
NET CASH FROM (USED IN) FINANCING ACTIVITIES ....                                               (84,395)   (244,993)      627,781    (243,091)      628,077
NET CASH INCREASE AND CASH EQUIVALENTS ..........                                               201,181    1,012,204    1,191,785    1,014,941    1,193,091
  Cash ..................................................................................       251,135      347,304      261,756      347,353      261,801
  Interbank Investments .........................................................             4,589,609    3,682,417    2,576,180    3,698,062    2,590,523
CASH AND CASH EQUIVALENT AT THE
  BEGINNING OF THE PERIOD .........................................                           4,840,744    4,029,721    2,837,936    4,045,415    2,852,324
  Cash ..................................................................................       373,239      373,239      347,304      373,278      347,353
  Interbank Investments .........................................................             4,668,686    4,668,686    3,682,417    4,687,078    3,698,062
CASH AND CASH EQUIVALENT AT THE
  END OF THE PERIOD ......................................................                    5,041,925    5,041,925    4,029,721    5,060,356    4,045,415




                                                                                                                                                               45
                                                                BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
                                                                                    Statement of Changes in Shareholders´ Equity
                                                                                                                                                                December 31, 2008



                                                                                                                                                                                                                                                                In Thousands of Reais
                                                                                                                                                                                  Capital Reserves                              Profit Reserves
                                                                                                                                                                    Updating of                                                                       Assets
                                                                                                                                                      Capital   Stock Exchange          Investments                                        For      Valuation     Retained
                                                                                                                                                       Stock     Memberships                Grants       Legal      Statutory         Expansion   Adjustment      Earnings      TOTAL
                                               Balance as of January 01, 2007 ..........................................................            900.000             1.152               6.962       75.051      180.359           131.541             14          -,- 1.295.079
                                                  Capital Increase (Note 20 (a)) .........................................................        1.134.000                -,-                 -,-    (22.099)    (180.360)         (131.541)             -,-         -,-   800.000
                                                  Updating of Stock Exchange Memberships .....................................                           -,-              612                  -,-          -,-          -,-               -,-            -,-         -,-        612
                                                  Subventious for Investiments .........................................................                 -,-               -,-            (2.451)           -,-          -,-               -,-            -,-         -,-    (2.451)
                                                  Adjustments for Evaluation Sheet (Note 05(b)) ...............................                          -,-               -,-                 -,-          -,-          -,-               -,-            33          -,-         33
                                                  Net Income for the 2nd Semester ...................................................                    -,-               -,-                 -,-          -,-          -,-               -,-            -,-    916.381    916.381
                                                  Allocation of Net Income (Note 20 (b))
                                                  Recognition of Reserves .................................................................              -,-                -,-                -,-     45.818      229.096            423.826            -,-    (698.740)           -,-
                                                  Dividends Accrued ...........................................................................          -,-                -,-                -,-         -,-          -,-                -,-           -,-    (116.941) (116.941)
                                                  Interest on Own Capital ...................................................................            -,-                -,-                -,-         -,-          -,-                -,-           -,-    (100.700) (100.700)
                                               Balance as of December 31, 2007 ......................................................             2.034.000             1.764               4.511      98.770      229.095            423.826            47            -,- 2.792.013
                                                  Capital Increase (Note 20 (a)) .........................................................          266.000                 -,-                -,-         -,-          -,-         (266.000)            -,-           -,-          -,-
                                                  Updating of Stock Exchange Memberships .....................................                           -,-             (111)                 -,-         -,-          -,-                -,-           -,-           -,-       (111)
                                                  Adjustments for Evaluation Sheet (Note 05(b)) ...............................                          -,-                -,-                -,-         -,-          -,-                -,-      (9.554)            -,-    (9.554)
                                                  Net Income for the 2nd Semester ...................................................                    -,-                -,-                -,-         -,-          -,-                -,-           -,-      590.873    590.873
                                                  Allocation of Net Income (Note 20 (b))
                                                  Recognition of Reserves .................................................................              -,-               -,-                 -,-     29.544      147.718            206.585            -,-    (383.847)          -,-
                                                  Dividends Accrued ...........................................................................          -,-               -,-                 -,-         -,-     (87.056)                -,-           -,-     (38.528) (125.584)
                                                  Interest on Own Capital ...................................................................            -,-               -,-                 -,-         -,-           -,-               -,-           -,-    (168.498) (168.498)
                                               Balance as of December 31, 2008 ......................................................             2.300.000             1.653               4.511     128.314      289.757            364.411       (9.507)            -,- 3.079.139
                                               Balance as of July 31, 2008 ................................................................       2.300.000             1.650               4.511     114.181      219.096            271.099       (4.224)            -,- 2.906.313
                                                  Updating of Stock Exchange Memberships .....................................                           -,-                3                  -,-         -,-           -,-               -,-           -,-           -,-          3
                                                  Adjustments for Evaluation Sheet (Note 05(b)) ...............................                          -,-               -,-                 -,-         -,-           -,-               -,-      (5.283)            -,-    (5.283)




BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
                                                  Net Income for the 2nd Semester ...................................................                    -,-               -,-                 -,-         -,-           -,-               -,-           -,-      282.646    282.646
                                                  Allocation of Net Income (Note 20 (b))
                                                  Recognition of Reserves .................................................................              -,-               -,-                 -,-     14.133       70.661             93.312            -,-    (178.106)          -,-
                                                  Dividends Accrued ...........................................................................          -,-               -,-                 -,-         -,-          -,-                -,-           -,-     (20.146)    (84.394)
                                                  Interest on Own Capital ...................................................................            -,-               -,-                 -,-         -,-          -,-                -,-           -,-     (84.394)    (20.146)
                                               Balance as of December 31, 2008 ......................................................             2.300.000             1.653               4.511     128.314      289.757            364.411       (9.507)            -,- 3.079.139




                                     46
                                                                                                                         Statements of Value Added
                                                                                                                                              For the years´ ended December 31, 2008
                                                                                                                                                                                                                  In Thousands of Reais
                                                                                                                                                                                          Banrisul                Banrisul Consolidated
                                                                                                                                                     2nd Sem/2008             2008           2007          2008                    2007

                                               INCOME ..................................................................................              2.505.742         4.308.676      3.326.145     4.355.238             3.405.472
                                                 FINANCIAL INCOME .............................................................                       2.297.614         3.870.701      2.825.353     3.879.871             2.830.037
                                                 Services Rendered and Bank Fees Income .......................                                         246.581           499.291        474.554       538.691               548.994
                                                 Allowance for loan losses .................................................                          (153.430)         (256.299)      (238.028)     (256.542)             (223.409)
                                                 Other ...................................................................................              114.977           194.983        264.266       193.218               249.850
                                               FINANCIAL INTERMEDIATION EXPENSES ..........................                                           1.231.846         1.919.817      1.243.033     1.900.771             1.227.732
                                               INPUTS ACQUIRED FROM THIRD PARTIES .......................                                               337.350           627.096        576.478       635.619               587.718
                                                 Materials, Energy and other ...............................................                            283.648           529.689        512.115       535.858               541.107
                                                 Third-party Services ...........................................................                        53.699            97.199          87.278       99.553                 92.398
                                                 Assets Value Recovery (Loss) .........................................                                       3               208        (22.915)          208               (45.787)
                                               GROSS VALUE ADDED ..........................................................                             936.546         1.761.763      1.506.634     1.818.848             1.590.022
                                               DEPRECIATION AND AMORTIZATION .................................                                           49.941            91.387          31.709       92.447                 32.484
                                               NET VALUE ADDED GENERATED BY THE BANK .................                                                  886.605         1.670.376      1.474.925     1.726.401             1.557.538
                                               VALUE ADDED RECEIVED IN TRANSFER .............................                                            17.810            30.152          43.938           -,-                    -,-
                                                 Equity ...................................................................................              17.810            30.152          43.938           -,-                    -,-
                                               VALUE ADDED FOR DISTRIBUTION ....................................                                        904.415         1.700.528      1.518.863     1.726.401             1.557.538
                                               DISTRIBUTION OF VALUE ADDED .......................................                                      904.415         1.700.528      1.518.863     1.726.401             1.557.538
                                                 Personnel .........................................................................                    377.007           731.481        687.450       736.591               692.566
                                                    Salary ..............................................................................               290.318           564.791        537.344       568.994               541.833
                                                    Benefits ...........................................................................                 66.910           125.186        112.899       125.709                113.322
                                                    F.G.T.S .............................................................................                19.779            41.504          37.207       41.888                 37.411
                                                 Tax Fees and contributions ..........................................                                  226.320           342.690      (117.091)       364.546               (83.117)
                                                    Federals ..........................................................................                 212.774           314.304      (142.916)       334.443              (111.132)




BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
                                                    State ................................................................................                  205               532             465          558                    470
                                                    Municipality ......................................................................                  13.341            27.854          25.360       29.545                 27.545
                                                 Third-party capital compensation ...............................                                        18.442            35.484          32.123       34.207                 31.363
                                                    Rentals ............................................................................                 18.442            35.484          32.123       34.207                 31.363
                                                 Shareholders’ equity compensation ........................                                             282.646           590.873        916.381       591.057               916.726
                                                    Interest on Own Capital ..................................................                           84.395           168.499        100.700       168.499               100.700
                                                    Dividends ........................................................................                   20.145           125.583         116.940      125.583                116.940
                                                    Retained Earnings ...........................................................                       178.106           296.791        698.741       296.791               698.741
                                                    Minority interest ..............................................................                         -,-               -,-             -,-         184                    345




                                    47
Notes to Statements
                                         Notes to Statements

NOTE 01
Operations
Banco do Estado do Rio Grande do Sul S.A. (Banrisul) is a multiple-service bank, operating
commercial, lending, financing and investment, mortgage loan, development, leasing and
investment portfolios, including exchange, securities brokerage, and credit card and consortium
management. Transactions are conducted within the context of a group of financial institutions
that operate on an integrated basis in the financial market. Banrisul also operates as an instrument
for the execution of the economic and financial policy of the state of Rio Grande do Sul, in
conformity with the state government’s plans and programs.


NOTE 02
Presentation of the Financial Statements
(a) The individual and consolidated financial statements have been prepared in accordance with
Brazilian accounting practices and standards and instructions from the Central Bank of Brazil
and from the Brazilian Securities and Exchange Commission – CVM, which include accounting
practices and estimates concerning the recognition of allowances and determination of assets
that comprise its securities portfolio. Actual results could differ from those estimated.

(b) The Bank’s individual financial statements include operations conducted both in Brazil as well
as the incorporation of its foreign branches (New York and Grand Cayman). Assets, liabilities and
income from foreign branches, before consolidation eliminations, are summarized as follows:

                                                                                                                          In Thousands of Reais
                                                                                                                            2008          2007
ASSETS
Securities ............................................................................................................     9,509       17,581
Lending Operations .........................................................................................              195,585      144,258
   Operations in Brazil .......................................................................................            98,553       98,665
   Other Lending Operations .............................................................................                  97,032       45,593
Other Assets .....................................................................................................         45,713       14,472
Total Assets .......................................................................................................      250,807      176,311

LIABILITIES
Deposits ..............................................................................................................   101,632       65,924
   Operations in Brazil .......................................................................................            28,077        3,192
   Other Deposits ...............................................................................................          73,555       62,732
Other Deposits ......................................................................................................       (724)        1,659
Other Liabilities .................................................................................................       149,899      108,728
Shareholders’ Equity ........................................................................................             250,807      176,311

Statement of Income
    Financial Intermediation Income .....................................................................                  13,016        11,353
    Financial Intermediation Expenses ................................................................                    (3,652)       (3,702)
    Other Expenses, Net .....................................................................................             (2,892)       (1,575)
    Non-Operating Income ..................................................................................                   (26)         (18)

Net Income for the period ..............................................................................                    6,446         6,058




                                                                                                                                                  49
                                                         BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
The effects of the exchange variation over operations in foreign branches are included in the
statement of income according to the nature of the corresponding assets and liabilities.

(c) The consolidated financial statements include the accounts of the Bank, its foreign branches
and its subsidiaries which investments, as of December 31, 2008, amounted to R$271,765 thousand
(2007 – R$249,758 thousand) and generated equity gains in subsidiaries on the year of R$30,152
thousand (2007 – R$43,938 thousand), are presented as follows:

MAIN INFORMATION ON INVESTMENTS IN SUBSIDIARIES:


                                                                                                                            In Thousands of Reais

                                                                       Banrisul       Banrisul S.A.      Banrisul S.A.     Banrisul
                                                                      Armazéns     Corretora de Val.   Administradora      Serviços
                                                                     Gerais S.A.    Mob. e Câmbio       de Consórcios         Ltda.         Total

Thousands of Shares/Quotas
. Common Shares ..............................................              696          10,000            89,114              -               -
. Preferred Shares ............................................               -          19,608                 -              -               -
. Quotas .............................................................        -               -                 -          2,780               -
Adjusted Ownership Interest (%) ....................                     99,498          98,693            99,569         99,785               -
Capital Stock ......................................................     21,150          40,000            80,000         23,043               -
Adjusted Shareholders’ Equity ..........................                 23,076          55,176           113,966         81,050               -
Net Income for the Year ....................................              2,129           8,044            10,809          9,698               -
Net Amounts Eliminated on Consolidation (Note 26):
Assets (Liabilities)
   . As of December 31, 2008 ..........................                     334       (54,003)         (105,657)         (87,234)     (246,560)
   . As of December 31, 2007 ..........................                     136       (57,399)          (99,598)         (75,234)     (232,095)
Income (Expenses)
   . As of December 31, 2008 ..........................                  (1,200)        (4,465)          (10,794)            463       (15,996)
   . As of December 31, 2007 ..........................                    (680)        (2,287)           (9,895)              2       (12,860)
Valor Contábil do Investimento
   . As of December 31, 2008 ..........................                  22,961          54,455          113,474          80,875       271,765
   . As of December 31, 2007 ..........................                  21,345          51,574          105,268          71,571       249,758
Resultado de Participações em Controladas
   . As of December 31, 2008 ..........................                   2,118           7,967            10,763          9,304        30,152
   . As of December 31, 2007 ..........................                   1,172          20,617             9,021         13,128        43,938


The preparation of consolidated financial statements did not include interests among consolidated
companies, remaining balance or results of transactions. The portions of income for the year and
shareholders’ equity referring to minority shareholders’ interest have been highlighted.

(d) Financial Leasing Operations are stated at present value in the Balance Sheet, and related
income and expenses, which represent the financial result of said operations, are grouped in Leasing
Operations in the Statement of Income. In 2007, for comparison purposes, there was a
reclassification, from Leased Property in the amount of R$65,319 thousand, Deferred Charges in
the amount of R$3,459 thousand and Other Liabilities – Advances for Guaranteed Residual Value in
the amount of R$23,441 thousand to Leasing Operations, thus this item increased from R$130
thousand to R$45,593 thousand. In the result, Expenses on Leasing Operations in the amount of
R$20,691 thousand were reclassified to Income from Leasing Operations.




                                                                                                                                                    50
                                                      BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
(e) On December 28, 2007, Law 11,638/07 was enacted, and on December 3, 2008, the executive
act n°449 was issued, altering, revoking and adding new provisions to the Brazilian Corporate
Law, especially with respect to chapter XV.These statutes are effective for fiscal years beginning
and/or after January 1, 2008 was designed primarily to update the Brazilian corporate law so as
to enable the convergence of the accounting practices Brazilian with the international accounting
standards (IFRS) and allow the Securities and Exchange Commission of Brazil (CVM)to issue new
accounting standards and procedures in conformity with such international accounting standards.
A significant portion of the main change introduced by Law is being adopted by the bank and its
subsidiaries and has not impacted retained earnings and/or the bank’s net income.
The main changes can be summarized as follows:
- Presentation of the Statement of Cash Flow replacing the Statement of Changes in Financial
Position.
- Presentation of the Statement of Value-Added.
- Creation of the Intangible Assets Account Group and the exclusion of the Deferred Account in
   the Fixed Assets, exclusion of the Group of the Deferred Income in the Liabilities and
   theexclusion of Non-Operating Income in the Statement of Income for the Year.
   In order to allow the comparability between the fiscal years, the values were reclassified on
   December 31, 2007, as follows:
- R$15,664 thousand (Bank and Consolidated) related to Improvements in Third-Party Real
   Property from Deferred to Fixed Assets.
- R$2,710 thousand (Consolidated – R$2,897 thousand) related to Software Expenses from
   Deferred to Intangible Assets;
- R$4,267 thousand (Bank and Consolidated) from Deferred Income to Other Obligations;
- R$15,632 thousand (Consolidated – R$15,763 thousand) from Non-Operating Income to Other
   Operating Revenues; and
- R$8,448 thousand (Bank and Consolidated) from Non-Operating Income to Other Operating
   Expenses.
- R$196,567 thousand (Bank and Consolidated) from Prepaid Expenses to Intangible Assets.


NOTE 03
Significant Accounting Practices
(a) Results of operations
Income and expenses are recorded on the accrual basis.
(b) Interbank Investments
Represent funds invested in the interbank market, stated at present value, calculated on “pro
rata die” basis, according to the variation of both the agreed index and the interest rate.
(c) Securities and Derivatives
According to Brazilian Central Bank Circular 3,068 as of November 8, 2001 and supplementary
regulation, securities are classified and assessed into three specific categories, in conformity to
the following accounting criteria:
i) Trading Securities – securities acquired for the purposes of being actively and frequently
traded, adjusted to fair value, and realized and unrealized gains or losses recognized in the
statement of income in the year.




                                                                                                      51
                                BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
ii) Available-for-Sale Securities – Include securities used as part of the strategy to manage risk
of changes in interest rates and which may be traded as a result of these changes, changes in
payment conditions or other factors. These securities are adjusted to fair value, and income
earned is recorded in the statements of income, whereas unrealized gains and losses from changes
in fair value are recorded in a separate shareholders’ equity caption, net of taxes, where applicable,
denominated “Adjustment to fair value – securities and derivatives” until they are realized through
sale.
Gains and losses, when realized, are recorded in the statement of income on the trading date,
with a contra entry to a specific shareholders’ equity account, net of taxes, where applicable.
iii) Held-to-Maturity Securities – Include securities for which Management has the intent and
financial capacity to hold to maturity and are stated at cost plus income earned. Financial capacity
is defined in cash flow projections, disregarding any possible sale of these securities.
Derivatives – Derivatives contracted in conjunction with other operations for investments are
stated at the amounts of income earned and expenses incurred through the balance sheet date.
(d) Lending Operations, Leasing Operations and Other Receivables
All lending and leasing operations are classified based on Management’s risk assessment, taking
into account the economic scenario, past experience and specific risks related to operations,
debtors and guarantors, pursuant to National Monetary Council (CMN) Resolution 2,682/99,
which requires a periodic analysis of the portfolio and its classification into nine risk levels, from
AA to H. A summary of this classification is presented in Note 07.
Lending and leasing operations are recorded at present value, calculated on a daily pro-rata
basis, based on the agreed index and interest rate, and are adjusted up to the sixtieth day past-
due. Thereafter, income is recognized only when received.
The risk of renegotiated assets are classified in accordance with the criteria established by Resolution
2,682/99, i.e. the rating assigned before the renegotiation is maintained and renegotiated lending
transactions previously written-off against the allowance and controlled in memorandum accounts
are rated level H. Any gains on renegotiation are recognized as revenue only when actually
received.
(e) Other Receivables – Operations with Credit Cards
Unbilled amounts are represented by receivables from cardholders for transactions in Visa and
MasterCard merchants. These amounts are accounted for as Notes and Credits Receivable, and
do not have credit characteristic, transactions paid in installments when Banrisul is the issuer, and
the outstanding balance of transactions paid by the minimum amount of the bill (Revolving), are
reclassified as Lending Operations.
(f) Allowance for Loan Losses, for doubtful lease receivables and for losses on other receivables
Recorded in an amount considered sufficient to cover possible losses, based on the minimum
percentages required by Brazilian Central Bank (BACEN) Resolution 2,682/99 based on the
classification of risk level of the client, assigned based on periodic analysis of the client is credit
standing and not only when a default event occurs.
As of December 31, 2008, the total amount of the allowance for loan losses, for doubtful lease
receivables and losses and other receivables, as stated in Note 07, exceeds the minimum amount
that would be required if only the rating of transactions based on the number of days past dues
set forth by Brazilian Central Bank Resolution 2,682/99, was considered a procedure which has
been adopted by the Management since its publication to cover possible losses on operations.




                                                                                                           52
                                  BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
(g) Permanent Assets
Permanent assets are stated at acquisition cost, monetarily adjusted through December 31, 1995,
considering the following aspects:
•  investments in subsidiaries are accounted for under the equity method, based on financial
statements prepared following the same accounting practices. Other investments are adjusted
based on allowances for losses, where applicable;
• depreciation of property and equipment in use under the straight-line method in based on the
expected economic useful live life span of the assets, according to the rates stated in Note 09.
• Intangible Assets consist, basically, investment of funds whose benefits will be accrued in the
future. This group is represented by bank services contracts and software acquisition. The
amortization is calculated under the straight line method at the rates stated reported in Note 09.
The bank assesses intangible assets annually impairment possible losses. When identified, are
charged to income.

(h) Assets and Liabilities Denominated in Foreign Currency
The assets and liabilities of foreign branches, as well as other assets and liabilities in foreign
currency, were translated at the exchange rate prevailing at the balance sheet closing date.
(i) Deposits, Money Market Funding, Borrowings and Onlendings and Financial and Development
Fund
Stated at original amounts plus charges incurred through the balance sheet date, recognized on
a pro rata die basis.
Pursuant to Laws 12,069/04 and 12,585/06 of the Rio Grande do Sul State Government, up to
85% of the escrow deposits made by third parties in the Bank are made available to the state of
Rio Grande do Sul, and the remaining balance is retained at the Bank for allocation to a fund. The
escrow deposited transferred are controlled in a memorandum account and the retained portion
is classified as “Other Payables”, as mentioned in Note 21(a). The charges on the remaining
balance are recorded under the caption Expenses with Borrowings, Assignments and Onlendings.
(j) Reserves for Tax, Labor and Civil Risks
These reserves are recorded based on the legal counsel’s opinion, using models and criteria in
order to obtain the best estimate possible, despite the uncertainty about their period and the
amount upon the final outcome of the lawsuit. The criterion used according to the nature of the
contingency is as follows:
i) Labor Contingencies – Recognized upon court notification for judicial discussion involving
Banrisul, the risk of loss of which is deemed as probable. Amounts are determined according to
disbursement estimates by our Management, opportunely revised based on information received
from our legal counsels, adjusted based on the amount of the deposit related to the execution,
when required.
ii) Civil Contingencies – Recognized, upon court notice, and monthly adjusted based on the
intended amount of indemnities, the evidence presented, and the legal counsel’s evaluation –
which considers previous court decisions, factual support, evidence produced in the records and
legal decisions that might be rendered in the lawsuit.




                                                                                                     53
                                BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
iii) Tax and Social Security Contingencies – Refer basically to taxes whose lawfulness or
constitutionality is being challenged at administrative or judicial level and whose likelihood of loss
is – or has been in previous phases – deemed as probable and are recognized at the full amount
under dispute. For lawsuits with respective escrow deposits amounts are not updated except
when the Bank is authorized to withdraw the deposits on account of a favorable outcome of the
lawsuit.
(l) Income and Social Contribution Taxes
Calculated at the rate of 15% for social contribution tax (9% until to April 30, 2008) and 15% (plus
a 10% surtax pursuant to legislation) for income tax on taxable income in the year, adjusted by
permanent differences. Deferred income tax and social contribution were calculated based on
the rates in force on the financial statements date over the temporary additions and recorded
under the item Other Receivables, as contra entry of Income for the Period.
(m) Post-Employment benefits
The Bank sponsors a “defined benefit” plan to its employees and the actuarial assessment of
obligation provided based on specific legislation. According to CVM Resolution 371/00 and based
on the appraisal report issued by an independent actuary’s opinion, the Bank annually assesses
the actuarial situation of the plan, as mentioned in Note 23.


NOTE 04
Interbank Investments
                                                                                                                             In Thousands of Reais
                                                                                                                Banrisul       Banrisul Consolidated
                                                                                                       2008        2007         2008          2007
Money Market Investments ................................................                         4,430,537   3,601,587    4,448,929    3,617,232
 Resales Pending Settlement - Own Portfolio
   Treasury Bills - LFT .............................................................             1,564,122   2,320,252    1,564,122    2,320,252
   National Treasury Bills - LTN ...............................................                  1,258,535     365,225    1,258,535      365,225
   National Treasury Notes - NTN ...........................................                        139,032      69,999      139,032       69,999
   Other .....................................................................................            -           -       18,392       15,645
 Resales Pending Settlement - Third-Party Portfolio
   Treasury Bills - LFT .............................................................               148,473           -      148,473             -
   National Treasury Bills - LTN ..............................................                     251,433     846,111      251,433       846,111
   National Treasury Notes - NTN ...........................................                      1,068,942           -    1,068,942             -

Interbank Deposits .................................................................                238,149      80,830      238,149       80,830
  Interbank Deposits ...................................................................            238,149      80,830      238,149       80,830
Total .........................................................................................   4,668,686   3,682,417    4,687,078    3,698,062




                                                                                                                                                       54
                                                            BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
NOTE 05
Securities and Derivatives
Breakdown of the portfolio of Securities and Derivatives:
                                                                                                                                               In Thousands of Reais
                                                                                                                                  Banrisul        Banrisul Consolidated
                                                                                                                     2008            2007         2008           2007
Trading Securities .......................................................................                    959,170            166,666       959,170       166,666
Available-for-sale Securities .....................................................                           614,613            474,428       620,913       477,949
Held-to-Maturity Securities .........................................................                       4,418,302          4,387,345     4,420,805     4,389,572
Derivatives ..................................................................................                109,903            119,898       109,903       119,898
Total .........................................................................................             6,101,988          5,148,337     6,110,791     5,154,085

Current Assets .......................................................................                      3,004,516          1,002,425     3,010,816     1,005,946
Long-Term Assets .................................................................                          3,097,472          4,145,912     3,099,975     4,148,139


The fair value presented in the chart below were assessed as follows: Treasury Bills that hold
active negotiations is determined based on prices published by the ANDIMA; to shares of Publicly-
held Companies the average price of the last negotiation of the day is used; and for securities
that have no price published, the Bank adopts as basis for calculation of the fair value, the value
obtained by means of internal pricing technique.

(a) Trading Securities
Breakdown of Trading Securities Portfolio per category at fair value:
                                                                                                                                               In Thousands of Reais
                                                                                                                                     Banrisul e Banrisul Consolidated
                                                                                                                                           2008                 2007
Federal Government Securities
Treasury Bills – LFT ..............................................................................................                     959,170               99,430
CVS ........................................................................................................................                  -               67,236
Total ......................................................................................................................            959,170              166,666


Breakdown per maturity:
                                                                                                                                              In Thousands of Reais
                                                                                                                                    Banrisul e Banrisul Consolidated
                                                                                                                               Custo de Aquisição           Valor de
Maturity                                                                                                                               Atualizado           Mercado
From 3 to 12 months .............................................................................................                        74,535               74,535
From 1 to 3 years .................................................................................................                     406,215              406,221
From 3 to 5 years .................................................................................................                     307,456              307,447
From 5 to 15 years ...............................................................................................                      171,058              170,967
Total in 2008 ........................................................................................................                  959,264              959,170
Total in 2007 .........................................................................................................                 143,747              166,666


According to Central Bank of Brazil regulations, these securities are classified in current assets at
their fair value.
In 2008, due to the reassessment of the Management’s intention to maintain the CVS securities
from the portfolio acquired, the amount of R$67,236 thousand was reclassified from trading
securities to held-to-maturity securities. Adjustment to fair value determined on these securities
in the amount of R$22,894 thousand was incorporated to its cost value pursuant to Circular Letter
3,068/01 of the Central Bank of Brazil. On December 31, 2008, the book value of these securities
is R$73,697 thousand.




                                                                                                                                                                          55
                                                             BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
(b) Available-for-Sale Securities
Breakdown of the Available-for-Sale Securities Portfolio by type of securities per fair value:
                                                                                                                                   In Thousands of Reais
                                                                                                                     Banrisul        Banrisul Consolidated
                                                                                                           2008         2007          2008          2007
Treasury Bills - LFT ....................................................................              608,608      451,027       608,608       451,027
Shares of Publicly-Held Companies,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,                                6,005       23,401         6,084        23,667
Privatization Certificates ............................................................                      -            -             5             5
Fixed Income Fund Quotas ........................................................                            -            -         6,216         3,250
Total ............................................................................................     614,613      474,428       620,913       477,949


Breakdown per maturity:
                                                                                                                                   In Thousands of Reais
                                                                                                                     Banrisul        Banrisul Consolidated
                                                                                                       Restated                   Restated
                                                                                                     Acquisition        Fair    Acquisition          Fair
Maturity                                                                                                  Cost        Value          Cost         Value
No Maturity .................................................................................           21,867        6,005        28,157        12,305
Up to 3 months ...........................................................................             348,708      348,712       348,708       348,712
3 to 12 months ...........................................................................              38,382       38,383        38,382        38,383
1 to 3 years ................................................................................          221,510      221,513       221,510       221,513
Total in 2008 .............................................................................            630,467      614,613       636,757       620,913
Total in 2007 ..............................................................................           474,318      474,428       477,839       477,949


The adjustment to fair value as of December 31, 2008, in the amount of R$15,854 thousand (2007
- R$110 thousand), was recorded under a specific Shareholders’ Equity account, net of taxes of
R$6,342 thousand (2007 - R$37 thousand), recorded in “Other Credits”.

(c) Held-to-Maturity Securities
The Portfolio of Held-to-Maturity Securities, by category, stated at cost plus income earned is as
follows:
                                                                                                                                   In Thousands of Reais
                                                                                                                     Banrisul        Banrisul Consolidated
                                                                                                       Restated                   Restated
                                                                                                     Acquisition        Fair    Acquisition          Fair
                                                                                                          Cost        Value          Cost          Value
Federal Government Securities
  Treasury Bills - LFT ................................................................              4,135,897     4,139,619    4,138,400     4,142,122
  National Treasury Bills - NTN .................................................                       29,638        29,638       29,638        29,638
  Salary Variation Compensation Fund - CVS ...........................                                 190,123       147,217      190,123       147,217
  Brazilian Foreign Debt Securities ...........................................                          9,509         9,509        9,509         9,509
Fixed Income Fund Quotas ........................................................                       10,451        10,451       10,451        10,451
Other ............................................................................................           6             6            6             6
Mortgage-Backed Securities - LH ..............................................                          39,742        39,742       39,742        39,742
Certificate of Real Estate Receivables - CRI .............................                               2,936         2,936        2,936         2,936
Total in 2008 ...............................................................................        4,418,302     4,379,118    4,420,805     4,381,621
Total in 2007 ...............................................................................        4,387,345     4,353,240    4,389,572     4,355,467


The maturities of securities are as follows:
                                                                                                                                   In Thousands of Reais
                                                                                                                     Banrisul        Banrisul Consolidated
                                                                                                           2008         2007          2008          2007
Up to 3 months ............................................................................          1,212,146       508,451    1,212,146       508,451
3 to 12 months ............................................................................            432,689       270,972      432,689       270,972
1 to 3 years .................................................................................       2,218,672     2,493,738    2,221,175     2,495,965
3 to 5 years .................................................................................         321,995       668,906      321,995       668,906
5 to 15 years ...............................................................................           42,678       333,336       42,678       333,336
Over 15 years .............................................................................            190,122       111,942      190,122       111,942
Total ............................................................................................   4,418,302     4,387,345    4,420,805     4,389,572
Current Assets .......................................................................               1,644,835       779,423    1,644,835       779,423
Long-Term Assets .................................................................                   2,773,467     3,607,922    2,775,970     3,610,149




                                                                                                                                                             56
                                                             BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
(d) Derivatives
In order to meet its own needs to minimize the effect of changes in the fixed rate, exchange
variation and TR (a managed prime rate), the Bank has conducted swap transactions to exchange
these rates for SELIC (Central Bank overnight rate) variation. Other risks are stated in Note 24.

Banrisul and Banrisul Consolidated                                                                                                   In Thousands of Reais
                    National   Up to 3                      3 to 12           1 to 3           3 to 5          5 to 15       Over
                       Value   months                      months             years            years            years    15 years          2008       2007
Assets
SELIC                       10,397            -                -               -                -                -            -              -          -
SELIC + Fixed Rate-FCVS 95,645                -                -               -               88           14,240        6,643         20,971     18,470
SELIC + Fixed Rate     106,769            3,706            3,705          14,822           14,822           51,877            -         88,932    101,428
Passivo
Fixed Rate         (10,397)      (4)                        (15)          (4,080)           (508)               (4)            -        (4,611)    (2,301)
TR+Fixed Rate      (95,645) (3,407)                      (4,922)          (8,759)         (4,678)          (8,061)       (1,448)      (31,275)    (19,600)
USD+BID+Fixed Rate(106,769)        -                           -                -               -                 -            -              -          -
Net Adjustment                  295                      (1,232)            1,983           9,724           58,052         5,195        74,017      97,997



Swap transactions, “SELIC + Fixed-rate FCVS” and “SELIC + Fixed-rate” have as a counterpart
the Rio Grande do Sul state Government and were entered in connection to the assignment of
credits of the Salary Variation Compensation Fund (FCVS) and receivables from municipal public
entities, respectively, and will be settled on the same dates the main operations are received.
These swap transactions, together with transactions linked to them, have rates equivalent to the
market rates on the same date, because the operations mature simultaneously, and the Bank has
the intent to hold the original transactions and the swap agreements to maturity.

As of December 31, 2008, the amounts receivable and amounts payable are as follows:


Banrisul and Banrisul Consolidated                                                                                                   In Thousands of Reais
                                                                                                                                   2008              2007
Derivatives
Adjustments Payable - Short Term ......................................................................                       7,411                 7,802
Adjustments Receivable - Long Term ..................................................................                       102,492               112,096
Other
Adjustments Payable - Short Term ......................................................................                     (8,348)                (2,984)
Adjustments Payable - Long Term .......................................................................                    (27,538)               (18,917)
Net Adjustment .................................................................................................             74,017                 97,997


As of December 31, 2008, there were no futures or options contracts.




                                                                                                                                                             57
                                                       BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
NOTE 06
Restricted Deposits

                                                                                                                                            In Thousands of Reais
                                                                                                                                Banrisul and Banrisul Consolidated
Description                                                                 Interest Rate                                               2008                2007
Compulsory Deposits - Brazilian Central Bank ..................................................                                    1.318.412           2.313.984
  Demand deposits and other funds .........               None ..........................................                            217.045             326.614
  Additional obligation ................................  SELIC .........................................                                 -,-            918.805
  Saving deposits ......................................  Savings account .......................                                    925.677             862.314
   Other deposits ....................................... None ..........................................                             15.544               4.119
   Other deposits ....................................... TR ...............................................                         160.146             202.132

Credits with the National Housing System ......................................................                                      382.057             324.633
  Acquired portfolio - swap ........................                     17,5% to 26% p.a.(*) .................                      263.665             235.790
  Acquired portfolio ....................................                TR + Interest ..............................                103.776              74.872
  Own portfolio ...........................................              TR + Interest ..............................                 14.616              13.971
Correspondents ......................................                    None .........................................               20.015              17.769
Total .......................................................................................................................      1.720.484           2.656.386

Current Assets ......................................................................................................              1.338.427           2.331.753
Long Term Assets .................................................................................................                   382.057             324.633


(*) Linked to Swap transactions as detailed in Note 05 (d).

National Housing System - Third-party Portfolio Acquired -, From October 2002 to March
2005, the Bank acquired from the Rio Grande do Sul State Government receivables from the
Salary Variation Compensation Fund (FCVS). As of December 31, 2008, the credits are stated at
cost plus income earned through the financial statement date, at the amount of R$367,441 thousand
(2007 – R$310,662 thousand). Their face value is of R$717,828 thousand (2007 – R$679,957
thousand). These receivables will be converted into CVS securities, pursuant to ratification and
novation processes, and, in spite of no established maturity, their fair values, upon the issuance of
the securities, may differ significantly from the carrying amounts.

National Housing System - Own Portfolio – Refers to credits of the FCVS arising from Banrisul’s
own mortgage loans portfolio that have already been approved by the FCVS’s regulatory body.

NOTE 07
Lending Operations, Leasing Operations and Other
Receivables
The tables below show the balance of lending operations and balances of the leasing and foreign
exchange portfolio.




                                                                                                                                                                     58
                                                              BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
(a) Breakdown by Type of Operation and Risk Level:

 Banrisul and Banrisul Consolidated                                                                                                                                    In Thousands of Reais
                                                                                   AA            A           B         C         D         E         F           G         H       2008      2007
Loan and Discounted Receivables ......................                        1,927,519   3,137,177   1,461,060   623,830   177,481   140,773   566,776      20,583   220,853 8,276,052 5,595,258
Financing .................................................................      78,029     316,772     212,403    78,469     9,460    14,944     5,453       5,719    43,133 764,382 591,056
Rural and Agro-Industrial Financing .....................                       252,968     174,682     156,834    94,705    37,694    30,213    39,686      34,152    32,211 853,145 614,852
Real Estate Financing ............................................              336,684     191,149     151,414    71,991    40,957    57,670    79,968       1,268    30,192 961,293 809,960
Infrastructure and Development Financing ........                                   315      40,975           -       370         -         -         -           -     1,960     43,620    29,178
Total Lending Operations ...................................                  2,595,515   3,860,755   1,981,711   869,365   265,592   243,600   691,883      61,722   328,349 10,898,492 7,640,304
Leasing Operations ................................................              26,927      27,063      26,953    16,307     3,762     2,077     3,351         276     1,224 107,940       45,593
Advances on Foreign Exchange Contracts (1) ...                                   83,398     136,223     144,421    45,085    12,314     2,160     3,905         337     4,671 432,514 324,252
Other Receivables - Foreign Exchange (2) ..........                               3,049       3,121       3,397     2,194       423        84     1,175          22     1,171     14,636    13,932
Total in 2008 ..........................................................      2,708,889   4,027,162   2,156,482   932,951   282,091   247,921   700,314      62,357   335,415 11,453,582
Total in 2007 ..........................................................      1,266,587   2,947,487   1,491,708   884,105   245,777   236,382   566,676      62,488   322,871            8,024,081


(1) Advances on foreign exchange contracts are classified as a reduction of “Other payables -
Foreign exchange portfolio” (Note 13).
(2) Other Receivables - Foreign exchange include receivables from foreign exchange contracts
and receivables from export contracts.

(b) Client Breakdown per Maturity and Risk Levels:

 Banrisul and Banrisul Consolidated                                                                                                                                    In Thousands of Reais
                                                                                   AA            A           B         C         D         E         F           G         H       2008      2007
Falling due (*) ..................................................... 2,708,233 4,024,295 2,147,696               915,933   273,983   239,238   643,343      48,235 195,94511,196,901     7,828,872
   Up to 180 days ...................................... 1,056,185 1,366,588 1,145,855                            483,977   133,785   105,613   302,723      12,155  44,950 4,651,831     3,271,828
   181 to 360 days .....................................                414,010 612,900     325,749               137,658    40,183    28,322   107,294       8,356  40,612 1,715,084     1,186,644
   Over 360 days ........................................ 1,238,038 2,044,807               676,092               294,298   100,015   105,303   233,326      27,724 110,383 4,829,986     3,370,400

Past-due ...................................................                   656     2,867     8,786             17,018     8,108     8,683    56,971      14,122 139,470 256,681 195,209
   Up to 180 days .......................................                      656     2,867     8,786             17,018     8,108     8,266    51,592      13,304  51,414 162,011 115,557
   181 to 360 days ......................................                        -         -         -                  -         -       417     5,379         818  31,150    37,764    35,449
   Over 360 days ........................................                        -         -         -                  -         -         -         -           - 56,906     56,906    44,203
Total in 2008 .......................................................... 2,708,889 4,027,162 2,156,482            932,951   282,091   247,921   700,314      62,357 335,41511,453,582
Total in 2007 .......................................................... 1,266,587 2,947,487 1,491,708            884,105   245,777   236,382   566,676      62,488 322,871           8,024,081


(*) Amounts up to 14 days past-due are included in the current.


(c) Portfolio Breakdown by Business Sector:
                                                                                                                                                                      In Thousands of Reais
                                                                                                                                                    Banrisul             Banrisul Consolidated
                                                                                                                                       2008               2007            2008               2007
Municipal Public Sector
 Government - direct and indirect administration ...................                                                              155,713         174,422             155,713          174,422
 Corporate activity - Other services .......................................                                                       34,907          24,751              34,907           24,751
Total Public Sector ..................................................................                                            190,620         199,173             190,620          199,173
 Private sector
  Rural .........................................................................................                                853,145          614,852    853,145                  614,852
   Industry ....................................................................................                               2,892,648        1,778,107 2,892,648                 1,778,107
   Commerce ...............................................................................                                    1,589,811        1,107,248 1,589,811                 1,107,248
   Financial brokers .....................................................................                                           247               21        247                       21
   Services and other, ................................................................                                        1,084,998          801,640 1,084,998                   801,640
  Individuals .................................................................................                                3,880,820        2,713,080 3,880,820                 2,713,080
  Housing ....................................................................................                                   961,293          809,960    961,293                  809,960
Total Private Sector ................................................................                                         11,262,962        7,824,908 11,262,962                7,824,908
Total ............................................................................................                            11,453,582        8,024,081 11,453,582                8,024,081


As of December 31, 2008, lending operations with entities of the Municipal Public Sector include
R$87,820 thousand (2007 - R$108,620 thousand) relating to receivables acquired from the Rio
Grande do Sul State Government or from entities controlled thereby.




                                                                                                                                                                                                      59
                                                                                     BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
(d) Changes in allowances for loans losses, doubtful lease receivables and other receivables:
                                                                                                                        In Thousands of Reais
                                                                                                            Banrisul       Banrisul Consolidated
                                                                                                 2008         2007          2008            2007
Opening balance of allowance for loan losses ..............                                   891,990     844,328        891,990      860,655
 Allowance recorded in the year, ...........................................                  256,299     238,028        256,542      223,409
 Write-offs to memorandum accounts ....................................                     (177,598)   (190,366)      (176,860)    (192,074)

Allowance for loan losses per risk level .........................                           970,691       891,990      971,672       891,990

Allowance for lending operations
  Current Assets ........................................................................    269,182       283,684      269,182       283,684
  Long-Term Assets ..................................................................        672,960       588,551      672,960       588,551

Allowance for doubtful lease receivables
  Current Assets ........................................................................       2,186        1,703        2,186             1,703
  Long-Term Assets ..................................................................           3,559        1,703        3,559             1,703

Allowance for losses in other receivables
  Current Assets ........................................................................     17,396        11,116       18,377         11,116
  Long-Term Assets ..................................................................          5,408         5,233        5,408          5,233



(e) Breakdown of allowances for loans losses, doubtful lease receivables and other receivables
per risk level:

   Banrisul and Banrisul Consolidated                                                                                    In Thousands of Reais
                                                                                                                            Provisão existente
                                                    Minimum
                                               allowance required             Minimum
     Risk                   Loan                  by Resolution               allowance      Additional allowance
     Level                 Portfolio                 2,682/99                  required          (Note 03(f))                       Total
      AA                2,708,889                     0.0%                          -              5,224                             5,224
      A                 4,027,162                     0.5%                     20,136              8,054                            28,190
      B                 2,156,482                     1.0%                     21,565             10,782                            32,347
      C                   932,951                     3.0%                     27,988             18,659                            46,647
      D                   282,091                    10.0%                     28,209              5,642                            33,851
      E                   247,921                    30.0%                     74,376              4,959                            79,335
      F                   700,314                    50.0%                    350,157             14,006                           364,163
      G                    62,357                    70.0%                     43,650              1,870                            45,520
      H                   335,415                   100.0%                    335,414                  -                           335,414

Total in 2008          11,453,582                                             901,495             69,196                           970,691

Total in 2007           8,024,081                                             801,621             90,369                           891,990


Lending operations written off at loss in the year ended December 31, 2008 and controlled based
on the adjusted amount until the date of the respective write-off in a memorandum account
amounted to R$177,598 thousand individually (2007 – R$190,366 thousand) and R$176,860 thousand
consolidated (2007 - R$192,074 thousand).
Recoveries of lending operations previously written off as loss have been recognized as income
from lending operations and amounted to R$68,665 thousand (consolidated – R$68,665 thousand)
in the year ended December 31, 2008 (2007 - R$50,215 thousand – consolidated R$54,650
thousand), net of losses or gains generated from these recoveries.




                                                                                                                                                    60
                                                        BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
NOTE 08
Other Receivables
                                                                                                                                 In Thousands of Reais
                                                                                                                    Banrisul       Banrisul Consolidated
                                                                                                           2008        2007         2008          2007
Foreign Exchange Portfolio .....................................................                       631,169     332,915      631,169       332,915
  Exchange purchased pending settlement ................................                               545,719     327,238      545,719       327,238
  Term bills in foreign currency ....................................................                       149          61          149            61
  Rights to foreign exchange sold ...............................................                        81,416       3,719       81,416         3,719
  Advances in local currency ......................................................                     (9,120)     (3,582)      (9,120)       (3,582)
  Income receivable from advances ............................................                           13,005       5,479       13,005         5,479
Income receivable .....................................................................                  44,173      37,600       39,228        31,596
  Dividends and bonuses receivable ...........................................                            6,721       6,004        1,776             -
  Receivables from services rendered .......................................                             34,959      30,223       34,959        30,223
  Other ...........................................................................................       2,493       1,373        2,493         1,373
Negociation and intermediation of amounts ......................                                              -           -        1,858         3,078
  Negociation and intermediation of amounts ..............................                                    -           -        1,858         3,078
Sundry, ..........................................................................................    1,116,801     974,118    1,171,644    1,027,167
  Advances to Loan Guarantee Fund (1) ...................................                                96,715           -       96,715             -
  Advances to employees ............................................................                     11,017       7,926       11,058         7,952
  Advances for payment by our account ...................................                                   461         437        6,228         5,939
  Deferred income tax and social contribution (Note 22(b)) ......                                       594,642     501,817      600,254      508,590
  Receivables on sale of other assets .......................................                                 -           -        1,305         1,047
  Escrow deposits ........................................................................              136,902     140,493      151,499      155,604
  Recoverable taxes ....................................................................                 10,920      53,207       12,225        56,886
  Reimbursable payments ............................................................                     67,680      52,375       67,727        52,416
  Notes and credits receivable (2) ..............................................                       102,251     117,419      103,273       118,553
  Credit Cards ...............................................................................           61,686      54,844       61,686        54,844
  Amounts receivable from affiliated companies .......................                                      606           -          606             -
  Other debtors – Domestic .........................................................                     33,921      45,600       59,068        65,336
Allowance for losses on other receivables .......................                                      (22,804)    (16,349)     (23,785)      (16,976)
Total other receivables ............................................................                  1,769,339   1,328,284    1,820,114    1,377,780

Current assets ...........................................................................            1,044,054    827,629     1,075,286      861,689
Long-term assets .....................................................................                  725,285    500,655       744,828      516,091


(1) Pursuant to the Brazilian Central Bank Circular 3,416 and Circular Letter 3,347 in the second
half 2008, Banrisul advanced the amount corresponding to sixty contributions to the Loan Guarantee
Fund which will be offset against future payments. This advance meets the requirements for a
Compulsory Deposit within the Central Bank in cash and interest fee.

(2) In the first quarter of 2005, as part of receivables recovery policy, Banrisul received as payment
in kind bonds issued tu pay court ordered debts of the Federal Government from several companies
to settled past-due loans of such companies. As of December 31, 2008, these bonds amount to
R$ 76,121 thousand (2007 - R$ 86,273 thousand). These bonds are subject to the variation of the
price and interest index.




                                                                                                                                                           61
                                                           BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
NOTE 09
Permanent Assets
(a) Fixed Assets
Banrisul                                                                                                                   In Thousands of Reais
                                                                                       Original   Depreciation/   Net Balance          Net Balance
                                                                           Rate           Cost    Amortization        in 2008              in 2007
Property in Use
Land and Buildings in Use ................................                  4%       120,056        (97,068)         22,988              25,753
Other
 Furniture and Equipments in Invetory ...........                             -       10,380               -         10,380              22,672
 Property and Equipments in Progress ..........                               -        4,358               -          4,358               5,359
 Facilities ..........................................................     10%           838            (89)            749                 427
 Furniture and Equipment in Use .....................                      10%        67,052        (45,458)         21,594              15,181
 Leasehold Improvements ...............................                       -       82,481        (70,239)         12,242              15,664
 Other
   Communication System ...............................                    10%         4,568         (3,956)           612                 654
   Data Processing System .............................                    20%       223,702       (153,723)        69,979              30,838
   Security System ..........................................              10%         9,690         (6,586)         3,104               3,353
   Transportation System ................................                  20%         2,516          (1,846)          670                 499
Total ..................................................................             525,641       (378,965)       146,676             120,400


Banrisul Consolidated                                                                                                      In Thousands of Reais
                                                                                       Original   Depreciation/   Net Balance          Net Balance
                                                                           Rate           Cost    Amortization        in 2008              in 2007
Property in Use
Land and Buildings in Use ................................                  4%       127,086       (101,236)         25,850              30,356
Other
 Furniture and Equipments in Invetory ...........                             -       10,380               -         10,380              22,672
 Property and Equipments in Progress ..........                               -        5,159               -          5,159               6,152
 Facilities ..........................................................     10%         1,170           (339)            831                 537
 Furniture and Equipment in Use .....................                      10%        70,119        (47,744)         22,375              16,123
 Leasehold Improvements ...............................                       -       82,481        (70,239)         12,242              15,664
 Other
   Communication System ...............................                    10%         4,569         (3,956)           613                 656
   Data Processing System .............................                    20%       224,348       (154,221)        70,127              31,064
   Security System ..........................................              10%         9,690         (6,586)         3,104               3,353
   Transportation System ................................                  20%         2,516          (1,846)          670                 499
Total ..................................................................             537,518       (386,167)       151,351             127,076


(b) Intangible Assets
Banrisul                                                                                                                   In Thousands ofReais
                                                                                                                  Net Balance         Net Balance
Intangible Assets                                                                 Original Cost   Amortization         in 2008            in 2007

Right from Acquisition of Payroll Operations (*)
 - Municipal Public Sector ................................                          243,570        (52,338)       191,232             196,567
 - Private Sector ...............................................                      7,960           (803)         7,157                   -
Software Acquisition ........................................                         28,688        (22,838)         5,850               2,710
Total ..................................................................             280,218        (75,979)       204,239             199,277

Banrisul Consolidated                                                                                                       In Thousands ofReais
                                                                                                                  Net Balance         Net Balance
Intangible Assets                                                                 Original Cost   Amortization         in 2008            in 2007

Right from Acquisition of Payroll Operations (*)
 - Municipal Public Sector ................................                          243,570        (52,338)       191,232             196,567
 - Private Sector ...............................................                      7,960           (803)         7,157                   -
Software Acquisition ........................................                         28,920        (22,838)         6,082               2,897
Total ..................................................................             280,450        (75,979)       204,471             199,464
(*) It refers to agreements entered into with the municipal government and private sector entities to ensure the
exclusivity in banking services for processing of payroll credit and deductible payroll loans, bill collection portfolio,
supplier payment and other services as well as other bank services. Such agreements are effective for a five-year
periods and are amortized over the agreements periods. No indications that’s these assets are impaired were
identified.



                                                                                                                                                     62
                                                            BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
NOTE 10
Deposits and Money Market Funding
Banrisul                                                                                                  In Thousands of Reais
                                               Without          Up to         3 to          Over
                                               maturity      3 months   12 months      12 months            2008           2007
Deposits
  Demand deposits .................. 1,869,619                      -           -              -       1,869,619    1,829,413
  Savings deposits ................. 4,805,853                      -           -              -       4,805,853    4,633,790
  Interbank deposits ...............            11,981              -           -              -          11,981        3,507
  Time deposits (*) ..................           7,516      1,352,780   3,225,302      3,136,312       7,721,910    6,035,341
  Other deposits ......................         16,415              -           -              -          16,415       19,805
Total ...................................... 6,711,384      1,352,780   3,225,302      3,136,312      14,425,778   12,521,856
Current liabilities .................                                                                 11,289,466   10,296,039
Long-term liabilities ............                                                                     3,136,312    2,225,817
Money market funding
  Own Portfolio .......................               -       819,131            -                -      819,131     1,442,010
  Third-party Portfolio .............                 -     1,471,089            -                -    1,471,089       847,179
Total ......................................          -     2,290,220            -                -    2,290,220     2,289,189


Banrisul Consolidated                                                                                      In Thousands of Reais
                                               Without          Up to         3 to          Over
                                               maturity      3 months   12 months      12 months            2008           2007
Deposits
  Demand deposits .................. 1,864,035                 -                -              -       1,864,035    1,827,727
  Savings deposits ................. 4,805,853                 -                -              -       4,805,853    4,633,790
  Interbank deposits ...............            11,981         -                -              -          11,981        3,507
  Time deposits (*) ..................           7,516 1,352,780        3,061,790      3,135,713       7,557,799    5,881,129
  Other deposits ......................         16,415         -                -              -          16,415       19,805
Total ...................................... 6,705,800 1,352,780        3,061,790      3,135,713      14,256,083   12,365,958
Current liabilities .................                                                                 11,120,370   10,141,348
Long-term liabilities ............                                                     3,135,713       2,224,610
Money market funding
  Own Portfolio .......................                   -   763,162            -                -      763,162     1,380,940
  Third-party Portfolio .............                     - 1,471,089            -                -    1,471,089       847,179
Total ......................................              - 2,234,251            -                -    2,234,251     2,228,119


(*) Consider the maturities set for each investment.


Time deposits are made by the Bank’s customers, with floating or fixed charges equivalent to
66% and 34% of the total portfolio, respectively. The average funding rate for floating-rate deposits
corresponds to 96.80% (2007 – 97.35%) of the CDI variation, and for fixed-rate deposits, to
10.43% (2007 – 9.09%) per year.
Funding through money market purchase and sale commitments operations – own portfolio –
conducted with financial institutions, has an average funding rate of 100% of the CDI variation.




                                                                                                                                   63
                                                   BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
NOTE 11
Foreign Borrowings
Foreign borrowings are represented by funds obtained from foreign banks to be used in foreign
exchange transactions subject to the variation of the corresponding currencies plus annual interest
rates of 2.00% to 11.89% (2007 – 5.08% to 8.50%) maturing in up to 360 days (2007 – 360 days).




NOTE 12
Onlendings
Internal funds for onlending refer basically to funds from Official Institutions (BNDES – National
Bank for Economic and Social Development, FINAME – National Equipment Financing Authority
and Caixa Econômica Federal – Federal Savings and Loan Bank). These liabilities mature on a
monthly basis through July 2023, and are subject to interest of 0.9% to 3.80% (2007 – 0.50% to
5.50%) per year, plus variation of the indexers (TJLP, U.S. dollar and Currency Basket) for floating-
rate operations and up to 7.25% (2007 – 9.40%) per year for
fixed-rate operations. Funds are transferred to customers on the same terms and with the same
funding rates, plus commission on financial intermediation. These funds are collateralized by the
same guarantees received for the related lending operations.

Banrisul and Banrisul Consolidated                                                                      In Thousands of Reais
                                                    Domestic Onlendings -
                                                      Official Institutions        Foreign Onlendings                   Total
                                                        2008         2007        2008           2007       2008         2007

Up to 90 days .............................          226,362      190,007       9,345          1,174    235,707      191,181
91 to 360 days ...........................           103,587       78,648      22,447          5,609    126,034       84,257
1 to 3 years ..................................      183,477      173,968           -              -    183,477      173,968
3 to 5 years ..................................      101,337       92,077           -              -    101,337       92,077
Over 5 years ................................        100,957       93,574           -              -    100,957       93,574

Total ...........................................    715,720      628,274      31,792          6,783    747,512      635,057
Current liabilities ...................              329,949      268,655      31,792          6,783    361,741      275,438
Long-term liabilities ..............                 385,771      359,619           -              -    385,771      359,619




                                                                                                                                64
                                                         BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
NOTE 13
Other Payables
                                                                                                                              In Thousands of Reais
                                                                                                                 Banrisul       Banrisul Consolidated
                                                                                                        2008        2007         2008          2007

Collected taxes and other ....................................................                        80,948      27,258       80,948       27,258
  Receipt of federal taxes .........................................................                  80,927      27,213       80,927       27,213
  Recebimento de Tributos Estaduais e Municipais ..................                                        -           1            -            1
  Other ........................................................................................          21          44           21           44
Foreign exchange portfolio ..................................................                         91,215      22,478       91,215       22,478
  Exchange sold pending settlement ........................................                           79,218       3,716       79,218        3,716
  Foreign exchange purchased ................................................                        444,509     343,013      444,509      343,013
  Advances on foreign exchange contracts (Nota 07 (a)) .....                                       (432,514)   (324,252)    (432,514)    (324,252)
  Other ........................................................................................           2           1            2            1
Social and statutory ................................................................                 39,229      51,472       39,295       51,579
  Dividends and bonuses payable (Nota 20 (b)) .....................                                   39,229      45,777       39,295       45,884
  Bonuses and profit sharing payable .....................................                                 -       5,695            -        5,695
Taxes and social security .....................................................                      445,970     414,978      448,970      427,546
  Taxes and contributions payable ...........................................                         43,716      34,432       44,609       35,176
  Reserve for taxes and social contribution over profit .........                                     30,147      24,528       30,876       33,505
  Reserve for deferred taxes and contributions (Nota 22 (b2))                                          4,688      10,286        4,692       11,805
  Reserve for tax contingencies (Nota 14 (a)) ........................                               367,419     345,732      368,793      347,060
Trading and intermediation of securities ........................                                          -         533        1,554        3,278
  Trading and intermediation of securities ...............................                                 -         533        1,554        3,278
Financial and development funds ......................................                             2,672,001     696,401    2,672,001      696,401
  Payables for financial and development funds (Nota 21 (a))                                       2,651,411     678,477    2,651,411      678,477
  Other ........................................................................................      20,590      17,924       20,590       17,924
Sundry .......................................................................................       737,464     739,805      767,896      769,148
  Cashier’s check ......................................................................               9,717       6,965        9,717        6,965
  Creditors for unreleased funds .............................................                        26,388      31,102       26,579       31,291
  Payables for acquisition of assets and rights ......................                                 3,137       1,896        3,224        1,961
  Liabilities under government agreements ..............................                              13,970      13,152       13,970       13,152
  Accrued vacation and related charges ................................                              156,696     119,279      130,936      116,353
  Actuarial deficit of Fundação Banrisul (Nota 23 (a)) ............                                   61,349      56,567       61,349       56,567
  Reserve for labor contingencies (Nota 14 (b)) .....................                                 96,176     144,524      111,313      163,115
  Brazilian Central Bank fines on foreign exchange
    transactions (Nota 14 (c)) .................................................                    106,493     101,112      106,493       101,112
  Reserve for social security contingencies ...........................                              18,783      18,783       18,783        18,783
  Reserve for securitization losses(*) .....................................                         12,107      14,239       12,107        14,239
  Reserve for other contingencies ...........................................                         6,386      10,812        6,386        10,812
  Reserve for debts assumed with Grupo de Empresas
    Seguradoras Brasileiras (GESB) arising from Companhia
    União de Seguros Gerais ...................................................                      10,017       7,670       10,017         7,670
  FGTS (Severance Pay Fund) for amortization .....................                                    2,583       2,372        2,583         2,372
  Sundry creditors – Domestic .................................................                      76,489      87,799      116,785       100,746
  Card transactions payable .....................................................                    50,967      46,969       50,967        46,969
  Other ........................................................................................     86,206      76,564       86,687        77,041
Total Other Payables ..............................................................                4,066,827   1,952,925    4,101,879    1,997,688
Current Liabilities ...................................................................            3,480,595   1,424,756    3,549,546    1,467,695
Long-Term Liabilities ............................................................                  586,232     528,169      552,333       529,993

(*) The management of the Bank maintains provision for co-obligation of securitized receivables with the National
Treasury, in the amount of R$43,404 thousand (2007 – R$45,470 thousand) controlled in a memorandum account, which
are owned by agricultural financing customers.




                                                                                                                                                        65
                                                           BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
NOTE 14
Reserves for Tax, Labor and Civil Contingencies
(a) The reserve for tax contingencies refers mainly to Income and Social Contribution taxes on
deduction of expense arising from the settlement of the actuarial deficit of Fundação Banrisul de
Seguridade Social (pension plan), challenged by the Federal Revenue Service for the period from
1998 to 2002, and amounts related to the same matter for 2003 to 2005, which have not yet been
challenged. Through its legal counsel, the Bank has been challenging the matter in court and, on
a conservative basis, has recorded a reserve for contingencies considering the probable loss
amount. As of December 31, 2007, the reserve value was R$345,732 thousand and in the year it
was supplemented by R$21,687 thousand, totaling R$367,419 thousand as of December 31, 2008.
(b) As of December 31, 2007, the Bank had a reserve for labor contingencies in the amount of
R$144,524 thousand that, after settlements in the amount of R$62,630 thousand and additions to
the reserve of R$1,361 thousand and a new reserve of R$15,643 thousand, totaled R$96,176
thousand in December 2008. Of the aforementioned reserve, the amount of R$72,230 thousand
has been deposited in escrow accounts and is recorded under the item “Other receivables –
Escrow Deposits (Note 8)”. In the consolidated balance as of December 31, 2007, the Bank had
a labor reserve of R$163,115 thousand that, after settlements in the year of R$66,336 thousand
and additions to the reserve of R$1,361 thousand and a new reserve of R$15,895 thousand,
amounted to R$111,313 thousand in December 2008. Of the aforementioned reserve, the amount
of R$87,066 thousand has been deposit in escrow.
There are other lawsuite for which a reserve for contingencies is not recognized regarding, as the
Bank considers, based on their nature, the likelihood of an unfavorable outcome possible, and
which amount of approximately R$40,000 thousand.
c) On September 29, 2000, Banrisul received an assessment notice from the Central Bank of
Brazil in connection with administrative proceedings related to supposed irregularities in foreign
exchange transactions between 1987 and 1989, In a decision on an appeal at the administration
level, Banrisul was required to pay a fine equivalent to 100% of the amount of the supposedly
irregular transactions. This decision is being challenged in court by Management, which on a
conservative basis and in compliance with BACEN requirements, recorded a reserve for this
contingency. The balance as of December 31, 2008 is R$106,493 thousand, with an increase in the
year of R$5,381 thousand, In the year ended December 31, 2007, the amount of R$50,864 thousand
was reversed due to the revision of the estimate of the amount to be disbursed recorded in
Other Operating Income.


NOTE 15
Income from Services Rendered
                                                                                                                          Em Milhares de Reais
                                                                                                              Banrisul     Banrisul Consolidado
                                                                                                       2008     2007        2008          2007
Income from Funds Management ...............................................                         53,984   49,537      61,175      54,719
Collection of Debt Instruments ...................................................                   40,893   44,607      40,896      44,607
Income from Credit Cards and Refeisul (*) ...............................                                 -        -      16,845      56,365
Income from Group Financing Management Fee ......................                                         -        -       7,632       4,639
Income from Brokerage of Operations ......................................                                -        -       3,680       3,234
Other Income ...............................................................................          1,040      142       5,091       5,162
Total ............................................................................................   95,917   94,286     135,319     168,726

(*) In 2007, Interest and Financial Charges from Credit Card operations belonged to subsidiary Banrisul Serviços
Ltda, In October 2007, the portfolio was transferred to the Bank and is accounted in Other Receivables.




                                                                                                                                                  66
                                                             BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
NOTE 16
Income from Bank Fees
Banrisul and Banrisul Consolidated                                                                                          In Thousands of Reais
                                                                                                        2008       2007         2008         2007
Banricompras ..............................................................................           54,925     34,720      54,925       34,720
 Check Returns ...........................................................................            24,555     43,888      24,555       43,888
Checking Account Debits ...........................................................                    9,039      8,570       9,039        8,570
Collection Services .....................................................................             51,424     42,770      51,424       42,770
Transactions with Checks, ........................................................                     7,263      4,686       7,263        4,686
Bank Fees from Checking Accounts .........................................                           204,884    199,482     204,884      199,482
Other Income from Fees .............................................................                  51,284     46,152      51,282       46,152
Total ............................................................................................   403,374    380,268     403,372      380,268

From the income amount of R$403,374 thousand for the year, R$213,874 thousand were originated
from operations with individuals and R$189,500 thousand from operations with companies.


NOTE 17
Other Administrative Expenses
                                                                                                                             In Thousands of Reais
                                                                                                                 Banrisul     Banrisul Consolidated
                                                                                                        2008       2007        2008          2007
Data Processing and Telecommunication ..................................                             131,870    138,558     134,460      141,148
Security and Money Transportation ..........................................                          77,689     61,246      77,993       61,526
Amortization and Depreciation ...................................................                     38,293     31,733      39,153       33,079
Rentals ........................................................................................      35,484     32,123      34,207       31,363
Supplies .......................................................................................      22,251     23,271      22,307       23,324
Outside Services* .......................................................................             97,200     87,278      99,553       92,502
Advertising, Promotions and Publicity .......................................                         91,507     63,915      92,197       64,475
Maintenance ................................................................................          18,331     17,481      18,679       17,590
Water, Electricity and Gas ..........................................................                 17,052     16,167      17,227       16,328
Other ............................................................................................    37,872     36,387      39,463       46,280
Total ............................................................................................   567,549    508,159     575,239      527,615

In 2007, induces R$ 13,349 thousand in expenses on the public offering of shares (Note 20(a)).


NOTE 18
Other Operating Income
                                                                                                                             In Thousands of Reais
                                                                                                                 Banrisul     Banrisul Consolidated
                                                                                                        2008       2007        2008          2007
Recovery of Charges and Expenses ........................................                             44,638     47,426      40,779        45,800
Reversal of Operating Reserves
- Losses on Equity Investments .................................................                         962        981         962          981
- Income and Social Contribution Taxes Labore .......................                                  1,361     15,429       1,361           -,-
- Brazilian Central Bank Exchange Fines (Note 14 (c)) ...........                                         -,-    50,180          -,-      50,180
- Other Assets (a) .......................................................................             8,992     58,842       8,992       58,842
- Reserve for Securitization Losses (Note 13) .........................                                6,347      4,276       6,347        4,276
- Other - Tax Lawsuits ...............................................................                    -,-    16,844          -,-      16,844
Other Taxes .................................................................................          1,744      3,445       1,744        3,445
Commission on Capitalization Cerficates ...................................                            4,468      3,907       4,468        3,907
Interbank Fees ............................................................................           21,865     18,738      21,865       18,738
Exchange Adjustments ...............................................................                  34,725         -,-     34,725           -,-
Credit Notes Receivable .............................................................                 10,099      7,978      10,099        7,978
Reserve Fund - Escrow Deposit - Law 12,069 .......................                                    15,402      7,955      15,402        7,955
Commission and management Fee of Putting Insurance ..........                                          1,110      1,874       1,110        1,874
Other Operating Income .............................................................                  43,270     26,391      45,364       29,030
Total ............................................................................................   194,983    264,266     193,218      249,850

(a) In the year ended on December 31, 2007, the bank recognized income of R$53,194 thousand
related to the final and unappealable of the tax rate (above 0.5%) of FINSOCIAL from January
1988 to July 1993. The credit amount was recorded as entry of other Assets (short term) and it is
being offset against Social Security Contribution – COFINS obligations.


                                                                                                                                                      67
                                                             BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
NOTE 19
Other Operating Expenses
                                                                                                                                                    In Thousands of Reais
                                                                                                                                     Banrisul         Banrisul Consolidated
                                                                                                                  2008                 2007             2008            2007
Discount Granted from Renegotiations .....................................                                    4,531                   6,257           4,531            6,257
Reserves for Labor Provisions (Note 14 (b)) ...........................                                      15,643                  25,728          15,895           28,401
Losses on Investment Losses ...................................................                               1,187                     201           1,187              201
Provision for Properties - Assets not in use .............................                                      415                   2,273             415            2,273
Provision for Securitization Losses ..........................................                                4,126                   3,899           4,126            3,899
Reserves for Civil Contingencies ..............................................                                 338                   3,009             338            3,009
Provision for Amortizations of Banking Service Exclusivity
  Agreements (Note 9 (b)) ........................................................                           50,507                   2,635          50,507            2,635
Collection of Federal Taxes ........................................................                          1,131                   1,106           1,131            1,106
Monetary Adjustment of Reserve for Tax Contingencies
(Social Contribution / Income Tax) - (Note 14 (a)) ....................                                      21,687                  21,425          21,687           21,425
Lawsuits Indemnifications .........................................................                           4,073                   4,172           4,073            4,172
Monetary Adjustment of Brazilian Central Bank fines on
  Foreign Exchange (Note 14 (c)) ............................................                                    5,381                3,944           5,381            3,944
Monetary Adjustment of Actuarial Deficit of Fundação
  Banrisul (Note 23) ...................................................................                         9,833                7,066           9,833            7,066
Overdraft Accounts and Banricompras Premiável ....................                                               4,522                6,240           4,522            6,240
Provision for Debts Assumed with GESB .................................                                          4,010                  775           4,010              775
Exchange Adjustment - Foreign Branches ...............................                                              -,-              21,255              -,-          21,255
Financial Expenses .....................................................................                            -,-                  -,-             -,-          11,847
Reversal of Income Receivable from the Rio Grande do
  Sul State (*) ...............................................................................                 -,-              16,662                  -,-          16,662
Lawsuits .....................................................................................              10,228                3,061              10,228            3,061
Cards ...........................................................................................            5,248                4,047               5,248            4,047
Other Operating Expenses ........................................................                           43,350               21,311              43,714           21,462
Total ............................................................................................         186,210              155,066             186,826          169,737

(*) Pursuant to the Term of Agreement, whereby the State of Rio Grande do Sul ensures Banrisul’s exclusivity in providing
banking service related to the payroll of active and inactive civil servants, life and special pensioners of the Executive
Branch, and pension fund beneficiaries. In the same Term of Agreement, Banrisul exempts State from any costs associated
with the provision of banking services related to the collection of state charges and taxes, debits from checking accounts,
Employment Security Fund (FGTS) statements and real estate receivable collection since 2002, and consequently the
balance receivable mentioned above.


NOTE 20
Shareholders’ - Banrisul
(a) Capital
Fully subscribed and paid-up capital as of December 31, 2008 is R$2,300,000 thousand and it is
represented by 408,974 thousand shares without par value as follows:
                                                                                    ON                  PNA                                 PNB                         Total

                                                                     Amount          %     Amount          %          Amount                    %      Amount              %

Rio Grande do Sul State ................................            204,199,859   99.60     2,721,484    70.5         26,086,957            13.04     233,008,300       56.97
Fundação Banrisul de Seguridade Social
      (pension plan) ........................................          449,054     0.22      158,983     4.09                    -          0.00          608,037        0.15
Social Security Institute of Rio Grande
      do Sul State ...........................................           44,934     0.02     168,612      4.34                   -           0.00         213,546         0.05
Other      ......................................................      324,014      0.16     835,817     21.52       173,984,763            86.96     175,144,594        42.83
Total      ......................................................   205,017,861   100.00    3,884,896   100.00        200,071,720          100.00      408,974,477      100.00


On March 25, 2008, an Annual and Extraordinary General meeting approved the capital increase
by incorporation of Profits Reserve in the amount of R$266,000 thousand, with no new shares
issued.




                                                                                                                                                                                 68
                                                                         BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
Preferred shares do not carry voting rights and are entitled to the following payments:
Class A Preferred Shares:
i) Priority to receive a non-cumulative, preferred fixed dividend of six percent (6%) per year,
calculated over the quotient resulting from the division of capital stock by the amount of shares
composing it;
ii) Right to take part, after the payment to Class B Common and Preferred Shares of a dividend
equal to that paid to those shares, in the distribution of any other dividends or bonuses in cash
distributed by the company, under equal conditions with Class B Common and Preferred Shares,
adding ten percent (10%) over the amount paid to those shares;
iii) Participation in capital increases deriving from the capitalization of reserves, under equal
conditions of Class B Common and Preferred Shares;
iv) Priority in capital reimbursement, without premium;
v) Interest on capital may be attributed to Mandatory Dividend, this composing Dividends Paid
by the Bank.

Class B Preferred Shares:
i) Participation in capital increases deriving from the capitalization of reserves, under equal
conditions of Class A Common and Preferred Shares;
ii) Priority in capital reimbursement, without premium;
iii) Interest on capital may be attributed to Mandatory Dividend, this composing Dividends Paid
by the Bank.

(b) Allocation of Income
Net Income for the year, adjusted in accordance with Law 6,404/76, will have the following
allocations: (i) 5% to the Legal Reserve, which will not exceed 20% of Capital Stock, (ii) 25% to the
Statutory Reserve, and (iii) mandatory minimum dividends up to the limit of 25% of adjusted net
income. The remaining net income will be allocated as decided in the Shareholders´ Meeting.
The Statutory Reserve is intended to ensure funds for investments in the information technology
area, and is limited to 70% of paid-up capital stock.
In March 2008, an Annual and Extraordinary General meeting approved the proposal of distribution
of additional dividends of the years 2007 and 2008, in the percentage equivalent to 10% of the
adjusted net profit, derived from the Statutory Reserve. In order to do so, the amount of R$87,056
thousand in complementary dividends from 2007 was paid in April 23, 2008.
Regarding the net income up to December 31, 2008, the Institution has already paid profits as per
the paragraph above in the amount of R$56,133 thousand.
The remaining net income will be allocated in order to meet business expansion projects according
to capital budget approved at the Annual and Extraordinary General Meeting held on March 25,
2008.
As permitted by Law no. 9,249/95, Banrisul’s management paid interest on own capital in the
amount of R$168,498 thousand (2007 – R$100,700 thousand).
The payment of this interest on own capital resulted in a tax benefit for the Bank in the amount of
R$63,982 thousand (2007 – R$28,049 thousand) (Note 22).




                                                                                                        69
                                 BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
The payment of interest on capital and dividends is represented as follows:
                                                                                                                              In Thousands of Reais
                                                                                                                            2008           2007(**)

Net Income ..........................................................................................................   590,873           916,381
Adjustment
- Legal Reserve ....................................................................................................    (29,544)          (45,818)
Calculation Basis of Dividends ......................................................................                    561,329           870,563
Minimum Mandatory Dividend 25% ......................................................................                    140,332           217,641
Complementary Dividend 10% (*) ........................................................................                   56,133            87,056
Total Dividends ...................................................................................................      196,465           304,697

A) Interest on Own Capital .............................................................................                157,937           100,700
Paid
- Common Shares (R$ 411,93022 per thousand shares) ..................................                                     84,455            49,715
- Preferred Shares Class A (R$ 419,51260 per thousand shares) ...................                                          1,636            50,985
- Preferred Shares Class B (R$ 411,93022 per thousand shares) ...................                                         82,407                 -
-Income tax withholding at source on Interest Own Capital ..............................                                (10,561)                 -
B) Dividends Paid ...............................................................................................              -          158,575
- Common Shares .................................................................................................              -           79,417
- Preferred Shares Class A ..................................................................................                  -            1,675
- Preferred Shares Class B ..................................................................................                  -           77,483

C) Dividends Provisioned ...............................................................................                 38,528             45,422
- Common Shares (R$ 94,20559 per thousand shares) ....................................                                   19,316                  -
- Preferred Shares Class A (R$ 94,20559 per thousand shares) .....................                                          364                  -
- Preferred Shares Class B (R$ 94,20559 per thousand shares) ....................                                        18,848                  -

Total Interest on Own Capital and Dividends (A+B+C) ............................                                        196,465           304,697

(*) Complementary Dividends paid exclusively in 2007 and 2008, as approved by to the Annual and Extraordinary
Meeting of March 25, 2008.
(**) Adjusted by the effects of the Annual and Extraordinary Meeting of March, 2008.



NOTE 21
Commitments, Guarantees and Other
(a) On April 22, 2004, State Law 12,069, amended by Law 12,585 as of August 29, 2006, was
approved, under which the Bank must make available to Rio Grande do Sul State up to 85% of the
escrow deposits made by third parties with the Bank (except for those in which the litigant is a
municipality). The remaining amount not available is recorded in a reserve fund to ensure the
refund of said escrow deposits. As of December 31, 2008, the amount of escrow deposits made
by third parties with the Bank, brought up to the date of the Statement of Account by the TR
(Reference Rate) variation plus interest of 6.17% p.a., totaled R$4,694,411 thousand (2007 –
R$2,721,477 thousand), of which R$2,043,000 thousand (2007 – R$2,043,000 thousand) was
transferred to the State and written off from the respective equity accounts, and the remaining
balance that makes up the aforementioned fund, managed by Banrisul, is recorded in Other
Payables - Financial and Development Funds (Note 13).
(b) Sureties and guarantees granted to customers amount to R$525,713 thousand (2007 –
R$269,753 thousand), and are subject to financial charges and backed by the beneficiaries’ sureties.
(c) The Bank is responsible for the custody of 311,254 thousand securities of customers (2007 –
246,458 thousand).
(d) The Bank has co-obligations in import credits in the amount of R$53,083 thousand (2007 –
R$34,995 thousand).




                                                                                                                                                      70
                                                            BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
(e) Management compensation paid by the Bank in 2008 amount to R$1,947 thousand (2007 –
R$1,549 thousand). Officers employed as bank employees were paid R$28 thousand (2007 – R$13
thousand) in the year related to the contributions made to Banrisul Foundation of Social Security.
Currently, there are no other benefits defined for management.
(f) The Bank manages various funds and portfolios, which have the following net assets:
                                                                                                                                In Thousands of Reais
                                                                                                                   Banrisul       Banrisul Consolidated
                                                                                                          2008        2007         2008          2007

Investment funds (*) ...................................................................             4,215,003   3,739,515    4,327,703    3,932,674
Investment funds in investment fund quotas ............................                                 56,831     443,701       56,831      443,701
Fund to Guarantee the Liquidity of Rio Grande do Sul
  State Debt Securities ..............................................................               1,470,342   1,097,094    1,470,342    1,097,094
Managed portfolio .......................................................................              353,391     314,168      353,391      314,168
Credit Rights Investment Fund ...................................................                       64,144      93,394       64,144       93,394
Total ............................................................................................   6,159,711   5,687,872    6,272,411    5,881,031

(*) The investments fund portfolios consist basically of fixed-rate and variable rate government bonds, and their
carrying amounts already reflect mark-to-market adjustements at the balance sheet date.

(g) The subsidiary Banrisul S.A. Administradora de Consórcios is responsible for the management
of 96 groups (66 in 2007) of consortia, distributed among real estate, motorcycles, vehicles, and
tractors, gathering 18,863 active consortium members (11,222 in 2007).

NOTE 22
Income and Social Contribution Taxes
(a) Conciliation of Expenses/Income with Income and Social Contribution Taxes:
                                                                                                                                In Thousands of Reais
                                                                                                                   Banrisul       Banrisul Consolidated
                                                                                                          2008        2007         2008          2007

Income for the Period before Taxes .................................                                   687,512     610,595      704,239      633,102
Income Tax on Profit - Rate 25% ................................................                     (171,878)   (152,648)    (176,060)    (158,275)
Social Contribution Tax on Profit - Rate 9% ..............................                            (17,183)    (54,954)     (18,365)     (56,979)
Social Contribution Tax on Profit - Rate 15% (*) .......................                              (74,488)           -     (75,628)            -
Total Income and Social Contribution Taxes
     calculated at Effective Rate .............................................                      (263,549)   (207,602)    (270,053)    (215,254)
Effect of Increased Rate Social Contribution Tax on Net Income
   in Tax Credit (*) ........................................................................           86,285           -       86,276             -
Adjustment of Fine on Foreign Exchange Operations ..............                                       (2,057)      15,720      (2,057)        15,720
Profit Sharing ...............................................................................          11,990      21,153       11,990        21,153
Interest on Own Capital ..............................................................                  63,982      28,049       63,982        28,049
Equity in Subsidiaries ..................................................................               28,218       9,772            -             -
Other Additions, Net of Exclusions ............................................                          5,063       2,406       23,261       (3,003)
Tax Credit of Previous years .....................................................                       3,409    501,934         3,409      502,605
Portion of Unrecorded Tax Credit ..............................................                              -     (3,432)            -       (3,432)
Total Income and Social Contribution Taxes ...................                                        (66,659)    368,000      (83,192)      345,838
(*) Law 11,727 as of June 23, 2008, changed the Social Contribution on Net Income (CSLL) rate of the financial industry,
increasing it from 9% to 15% as of May 2008. This increase also impacted tax credits recorded on temporary differences
existing on the reference date.

(b) Deferred Income Tax and Social Contribution:
Since 1998, when the Bank was included in the Financial Institutions Restructuring Program –
PROES, Banrisul has reverted the loss history and has been presenting increasing taxable income
resulting from its business plans.




                                                                                                                                                          71
                                                            BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
CVM Instruction 371, as of June 27, 2002, and National Monetary Council Resolution 3,059, as of
December 20, 2002, amended by Resolution 3,355, as of March 31, 2006, and in view of the
technical study that presents provision for Banrisul’s growth and the ability to generate future
taxable income, continuously and in sufficient amounts, it is evident the probability of future
taxable obligations with taxes and contributions that allow the realization of tax credit in the
maximum term of ten years. Banrisul’s Management considers that the Bank’s capital increase,
which took place in 2007 with new fund raisings, was a solid step for the business plan
implementation for the next years, specially the growth of its credit portfolio and will materially
contribute for the growth of operations and the fortification of the financial situation of the
institution. Due to the factors abovementioned, in the year of 2007 it was registered Deferred
Income Tax and Social Contribution Tax Credits over Temporary Differences of previous years in
the amount of R$501,817 thousand. In December 2008 the Bank had Deferred Income Tax and
Social Contribution Tax Credits on temporary differences as per:

(b1) Tax credits
The balances of tax credits basis are as follows:
Banrisul                                                                                                                               In Thousands of Reais
                                                                                             Balance on                                          Balance on
                                                                                              12/31/2007 Constitution (*)       Realization       12/31/2008


Allowance for loan losses .........................................................          387,319         217,516             141,146            463,689
Reserve for labor contingencies ...............................................                49,138          17,780              28,448             38,470
Reserve for tax contingencies ..................................................               45,857          17,147                 380             62,624
Other temporary provisions .......................................................             22,935           6,947                   -             29,882
Total tax credits on temporary differences ....................                              505,249         259,390             169,974            594,665
Unrecorded credits .....................................................................      (3,432)           3,409                   -               (23)
Total tax credits recorded ....................................................              501,817         262,799             169,974            594,642
Deferred tax liabilities .................................................................   (10,286)         (2,802)             (8,400)            (4,688)
Tax credits, net of deferred liabilities ...............................                     491,531         259,997             161,574            589,954

(*) It includes effects of the increase in the Social Contribution rate, as described in item (a).

Banrisul Consolidated                                                                                                               In Thousands of Reais
                                                                                             Balance on                                       Balance on
                                                                                              12/31/2007 Constitution (*)       Realization    12/31/2008
Allowance for loan losses .........................................................          387,319         217,516             141,146            463,689
Reserve for labor contingencies ...............................................               55,459           18,548              30,392             43,615
Reserve for tax contingencies ..................................................              46,308           17,163                 380             63,091
Other temporary provisions .......................................................            22,936            6,947                   1             29,882
Total tax credits on temporary differences ....................                              512,022         260,174             171,919            600,277
Unrecorded credits .....................................................................      (3,432)           3,409                   -               (23)
Total tax credits recorded ....................................................              508,590         263,583             171,919            600,254
Deferred tax liabilities .................................................................   (11,737)         (2,802)             (9,847)            (4,692)
Tax credits, net of deferred liabilities ...............................                     496,853         260,781             162,072            595,562

(*) It includes effects of the increase in the Social Contribution rate, as described in item (a).


The expectations of realization of these receivables are as follows:
                                                                                                                                 In Thousands of Reais
                                                                                                                            Banrisul      Banrisul Consolidated
                                                 Temporary Differences
        Year                          Income Tax    Social Contribution                            Total       Totals Recorded              Totals Recorded
     2009                               53,976                      32,386                    86,362                  86,362                     86,875
     2010                               51,077                      30,646                    81,723                  81,723                     82,237
     2011                              102,949                      61,770                   164,719                 164,719                    165,233
     2012                               63,745                      38,247                   101,992                 101,992                    102,973
     2013                               38,263                      22,958                    61,221                  61,221                     61,735
 2014 to 2016                           48,816                      29,290                    78,106                  78,106                     79,650
 2017 to 2018                           12,825                       7,694                    20,519                  20,519                     21,551
  After 2018                                14                           9                        23                       -                          -
Total on 12/31/2008                    371,665                     223,000                   594,665                 594,642                    600,254
Total on 12/31/2007                    371,507                     133,742                   505,249                 501,817                    508,590



                                                                                                                                                                  72
                                                        BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
The total consolidated present value of tax credits is R$436,240 thousand, calculated based on
the expected realization of temporary differences at average funding rate, projected for the
corresponding periods.

(b2) Deferred Tax Liabilities

The balance of the Reserve for Deferred Taxes and Contributions is represented by:

                                                                                                                           In Thousands of Reais
                                                                                                                Banrisul     Banrisul Consolidated
                                                                                                       2008       2007        2008          2007
Excess Depreciation ...................................................................              (4,685)    (1,849)    (4,685)       (1,849)
Available for Sale Securities ......................................................                     (3)       (37)        (3)          (37)
Adjustment to Fair Value of Trading Securities ........................                                    -    (8,400)        (4)       (8,400)
Other ............................................................................................         -          -          -       (1,451)
Total ............................................................................................   (4,688)   (10,286)    (4,692)      (11,737)



NOTE 23
Fundação Banrisul de Seguridade Social e
Cabergs - Caixa de Assistência dos Empregados
do Banco do Estado do Rio Grande do Sul
(a) The Bank is the main sponsor of Fundação Banrisul de Seguridade Social (Banrisul Foundation
of Social Security - pension plan), whose main objectives are to supplement the retirement benefits
provided by the Government to the employees of the Bank, of the Banrisul Foundation and
CABERGS (Bank Employees Social Assistance Fund), as well as to provide assistance programs
offered by their sponsors.
In order to accomplish its objectives, Fundação Banrisul receives monthly contributions from
sponsors and participants, calculated based on employees’ monthly compensation. The Bank’s
contributions in the year amounted to R$9,775 thousand (2007 - R$9,520 thousand), equivalent,
as of December 31, 2008, to 3.45% (3.45% in 2007) of the monthly payroll of participating
employees, and were recorded as operating expenses.
Fundação Banrisul offers a defined benefit plan and its valuation, in accordance with specific
legislation, is carried out annually at the fiscal year’s closing date by an independent actuary.
In September 2008, Rio Grande do Sul State settled its debt with Fundação Banrisul de Seguridade
Social in the amount of R$946,492 thousand, contracted on March 31, 1998, whose original amount
was R$500,000 thousand.
Banrisul has a remaining portion of actuarial deficit in the amount of R$61,349 thousand as of
December 31, 2008 (2007 – R$56,567 thousand), recorded under the caption Other Obligations
(Note 13). This deficit is paid with interest of 6% p.a. and adjusted by the General Market Price
Index – Internal Availability - IGP-DI variation, through monthly adjustments with final term in
2028.
(b) Banrisul also offers health and dental care benefits, through CABERGS, to its employees, and
through Fundação Banrisul, to retired employees.




                                                                                                                                                     73
                                                            BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
(c) As of December 31, 2008, the actuarial valuation of post-employment benefits granted to
employees is as follows:

                                                                                                        In Thousands of Reais
                                                                         Pension          Health and
                                                                            Plan    dental care plans                   Total
Present value of actuarial obligations ..........................     (2,131,954)           (99,790)             (2,231,744)
Fair value of Fundação Banrisul’s assets ....................           1,910,718             89,712               2,000,430
Unrecognized gains/losses and costs of services .....                     549,074             19,295                 568,369
Actuarial assets (liabilities) ....................................       327,838              9,217                 337,055


The main actuarial assumptions used as of December 31, 2008 were:
- Discount rate: 11.55% p.a.
- Expected rate of return on assets of the pension plan: 12.43% p.a.
- Expected rate of return on assets of health care plan: 10.77% p.a.
- Future salary increases: 6.59% p.a.
- Increase in medical costs: 7.64% p.a.
- Inflation: 4.50% p.a.
- Mortality table: AT – 2000


NOTE 24
Financial Instruments
The main risks related to financial instruments are credit risks, market risks and liquidity risks, as
follows:
Credit risk: it is the possibility of in occurring in losses to the bank, related to the nonperformances
of a loan or financial transaction, by the counterparty.
The credit risk management in Banrisul is made through statistical models that allow continuous
improvement of credit extension to continue improving. Banrisul acts continuously on making the
adherence test for periods, supervising credit portfolio’s shifts, the concentration on clients or on
industries of economic activity and on the levels of defaults.
Market risk: it is directly related to the fluctuation of prices and rates, that is, to the fluctuation of
the stock exchange, of the interest rate market and foreign exchange inside and outside the
country that affects the prices of the assets and liabilities negotiated in the market.
Liquidity risk: it is related to a mismatch between the cash flows of assets and liabilities, affecting
the institution’s financial capacity in having the resources to honor its liability agreements.
The market risk politics and the liquidity has the purpose of softening possible losses resulting
from market price fluctuations, currencies and interest rates of assets and liabilities and of cash
flow mismatch being able to use, among other possibilities, financial instruments and derivatives.
Banrisul has not contracted operations known as “target forward swap” or any other derivative
on its behalf, since it is not established in its politics operations that do not have as an aim a
“hedge” of its assets and liabilities positions.
Except for the “swap” agreements referred to in Note 5 (d), Banrisul has deemed plausible its
exposures to the risks mentioned above and has not contracted new operations involving Derivative
Financial Instruments.
Sensitivity Analysis: Banrisul carries out derivatives transactions classified under “banking”
portfolio in order to meet its own transactions, and not available for sale.




                                                                                                                                74
                                                BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
NOTE 25
Balances and Transactions with Related Parties
Banrisul                                                                                                                                                           In
Thousands of Reais
                                                                                          Subsidiaries                                        Rio Grande do Sul State
                                                 Assets (Liabilities)                Income (Expenses)               Assets (Liabilities)         Income (Expenses)
                                                2008               2007              2008               2007        2008           2007            2008        2007

Derivatives ......................            -                    -                   -                    -      78,628     100,298   (17,548)             10,056
Collection Services .......                   -                    -                   -                    -       5,072       5,072          -                  -
Loans .............................           -                    -                   -                    9           -           -          -                  -
Other Receivables ........                5,204                6,285               4,250                3,118           -           -          -                  -
Demand Deposits ..........              (5,584)              (1,687)                   -                    - (238,799) (224,080)              -                  -
Time Deposits ................ (164,111)                   (154,212)            (12,546)             (11,543)           -           -          -                  -
Money Market Funding .. (55,969)                            (61,070)             (6,500)              (3,757) (1,470,342) (1,097,092) (212,421)            (73,889)
Outras Obrigações ......... (26,100)                        (21,411)             (1,200)                (687)           -           -          -                  -
Total ............................... (246,560)            (232,095)            (15,996)             (12,860) (1,625,441) (1,215,802) (229,969)            (63,833)



Banrisul Consolidated                                                                                                                         In Thousands of Reais
                                                                                                                                             Rio Grande do Sul State
                                                                                                                  Assets (Liabilities)             Income (Expenses)
                                                                                                                2008            2007              2008          2007


Disponibilidades - SIAC ...............................................................                       18,392      16,072                2,187        2,186
Instrumentos Financeiros Derivativos ........................................                                 78,628     100,298             (17,548)       10,056
Serviços de Arrecadação ...........................................................                            5,072       5,072                    -            -
Other Receivables ......................................................................                       5,905       4,903                  765          774
Demand Deposits ........................................................................                   (238,799) (224,080)                      -            -
Money Market Funding ................................................................                    (1,470,342) (1,097,092)            (212,421)     (73,889)
Total ............................................................................................       (1,601,144) (1,194,827)            (227,017)     (60,873)


Investments and loans with related parties were contracted at rates compatible with those for
unrelated parties, prevailing at the dates of the transactions.
On June 29, 2007, it was established the Agreement Term 1959/2007 between Banrisul and the
State of Rio Grande do Sul, in which the State ensures Banrisul the exclusivity in bank services
related to the personnel payment of active and inactive government employees, life and special
pensioners of the Executive Power and social security pensioners, for a 5-year term. In the same
Agreement Term, Banrisul exempts the State of Rio Grande do Sul from any cost related to bank
services of collection of revenues and state taxes, debt to checking accounts, Unemployment
Compensation Fund (FGTS) statements and real estate credit collection services.




                                                                                                                                                                        75
                                                             BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
Reports
                   Summary of the Audit Committee

I. Institutional and Statutory Provisions – The Audit Committee, as an statutory body of Banco do
Estado do Rio Grande do Sul S/A, created by the Extraordinary General Meeting held on April
29, 2004, is formed by Mr. João Verner Juenemann,Mr. João Zani and Mr. Manoel André da
Rocha, all members of the Board of Directors, being the first and the third independent members,
elected by the Board of Directors, on June 24, 2004 and reelected on April 03, 2008, with term of
office until the first meeting of the Board of Directors, to be held after the Annual General Meeting
of 2009. The Audit Committee’s Internal Regulations are available on: http://www.banrisul.com.br/
bob/data/RegimentoInterno.pdf.
II. Duties and Responsibilities – The Audit Committee has the responsibility of supervising the
compliance with regulatory and legal requirements, the integrity and quality of the financial
statements of the institution and its subsidiaries, the efficiency and effectiveness of the independent
audit and internal audit performance. It is also responsible for the permanent follow-up on the
quality of the internal controls and risk management.
Management is responsible for the elaboration of the financial statements of the companies that
make part of Grupo Banrisul (Banrisul Group), in compliance with the guidelines focused on ensuring
the quality of the processes related to the financial information, and to the control and risk
management activities.
It is incumbent upon Deloitte Touche Tohmatsu Auditores Independentes, the external audit
company responsible for the financial statements analysis, to issue an opinion on whether they
adequately represent the equity and financial situation of the group, pursuant to the fundamental
principles of accounting, the Brazilian corporate legislation and the rules of the Securities and Exchange
Commission of Brazil – CVM, the National Monetary Council and the Brazilian Central Bank.
III. Activities Schedule – During the 2nd half/2008, the Committee held 24 (twenty-four) meetings,
out of which 17 (fifteen) until 12-31-2008 and the remaining ones between the closing date of the
second semester and the date of issue of this summary, as an excerpt of the Audit Committee
Report, in which it discussed, in the scope of its authority, the most different subjects, as described
in the minutes of the meetings. In these meetings, the Committee was supported by the analysis
of the accounting data, managerial reports, supplementary information and meetings held with
the presidency and executive officers of the institution, with executives from different levels of
the organization, and with the executive officers from the subsidiaries. From the executive
superintendents of several units of the institution It has also obtained reports, documents and
information. It has, likewise, requested the attendance, when necessary, of the professionals of or
the responsible for the respective area of operation, as well as of the independent auditors.
During year 2008, the Audit Committee held 47 (forty-seven) meetings.
IV. Internal Audit - The Internal Audit, linked to the CEO, has, among its objectives, to safeguard
of the assets and to assure the compliance with the policies, plans, procedures and laws, being
responsible for assisting the Audit Committee and the independent auditors.
Taking into consideration the reports presented by the Internal Audit and the compliance with
the concerned matters by the respective areas, the Audit Committee believes to hold reasonable
knowledge about each of the questions discussed.
The Audit Committee approved the work programming presented by the Internal Audit for 2009
and recommended the improvement of the team qualification actions and of the analysis of
Banrisul’s adequacy to the international accounting rules
V. External Audit - The work planning for 2009 has been requested and opportunely examined
and deliberated approved by the Audit Committee
The report on the evaluation of the accounting and internal control systems, presented by the
external audit company, along with the recommendations made, has been discussed with the
Committee, which has followed with the Internal Audit the implementation of the actions suggested
for each unit, throughout the year. Due to the permanent supervision of this work, the Committee
believes that the work developed was adequate to Banrisul’s needs.



                                                                                                             77
                                  BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
At the discretion of that Committee, during year 2008, the independent auditors have performed
the tasks contractually attributed to them.
The independent auditors work has been supervised throughout the year, with the guarantee of
unrestricted access to the institution’s data, with a view to ensure total freedom in the performance
of the contract. There is no evidence of any fact or circumstance that might have impaired the
adoption of an independent posture, or the development of the auditors’ work.
VI. Risk Management – The Committee has followed the development of the Business Continuity
Plan. It has also supervised the implementation of an adequate dimensioning of the civil and labor
contingencies, with a view to establish the provisions necessary to their coverage in a correspondent
level. At the same time, the internal control processes have been analyzed regarding the aspects
related to the corresponding judicial deposits. As an addendum to this activity, the Audit Committee
has recommended the acceleration of the activities of the Civil and Labor Contingencies
Management Group and of the Labor Lawsuits Negotiation and Prevention Board.
During this half, the Audit Committee has also supervised the development of the IT activities.
This supervision includes the replacement of internal use equipment or of equipment made available
to clients or to other users in general. This process has been particularly focused on the development
of IT security programs with a view to prevent electronic fraud practices to the clients and to the
Bank itself, and to protect the confidentiality of the operations performed by the Institution.
In regards to Credit Risk, the Audit Committee has evaluated the quality and the adjustments to
the credit score system. As for Market Risk, this Committee has requested that the minimum
liquidity level necessary for the Bank to face financial stress situations be determined.
VII – Channel of Denunciations -The denunciations received by the Audit Committee did not
include the existence or the evidence of error or fraud, for the effects of article 8 of its Internal
Regulation. The other denunciations have been addressed to the competent areas for the necessary
measures, with no need for additional remarks, since they were punctual and did not have great
significance for the overall situation.
VIII. Self-evaluation - The Audit Committee carried out its self-evaluation, in observance of
modeling known and practiced in the market, having hired the services of a specialized consulting
firm, KPMG Risk Advisory Services Ltda., aimed at improving consistency and quality of self-
evaluations carried out by its members. Therefore, a document has been produced by KPMG Risk
Advisory Services Ltda., corroborating with the Committee’s conclusions, in its self-evaluation,
that its structure and activities performed by its members comply with an, in some items, exceed,
in general, the rules set forth by the Central Bank of Brazil and the best practices of corporate
governance.
The Audit Committee’s self-evaluation and the document made by KPMG Risk Advisory Services
Ltda. were reported to the Board of Administration on February 05, 2009.
IX. Continued Education – Just as in the previous years, the Audit Committee members have
been concerned about their technical development, with a view to better perform their functions.
In line with this vision, during the second half, they have participated in events about corporate
governance, risk management and better practices for audit committees.
For 2009, a proposition for expanding the continued education has been set, particularly in regards
to better comply with the international accounting standards. The main approach is to train and
qualify its members vis-à-vis the coming adoption of IFRS.
X. Conclusion – Considering the existing internal control systems, the scope, the thoroughness
and the quality of the work performed by the internal and external audits, as well as the issue of
the independent auditors’ opinion, without remarks, on 02-05-2009, along with the set of
recommendations of the Audit Committee, described in the respective minutes of the meetings,
we recommend, to the Board of Directors, the approval of the audited financial statements, related
to the period closed on December 31, 2008.
                                                                     Porto Alegre, February 05, 2009.

                                           João Verner Juenemann
                                                 João Zani
                                           Manoel André da Rocha


                                                                                                         78
                                  BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
                   Opinion of the Fiscal Council




As members of the Fiscal Council of Banco do Estado do Rio Grande do Sul S.A., and in the
exercise of the responsibilities conferred to us by Article 163, Items II and VII of Law 6,404 dated
December 15, 1976, and by the provisions of the company’s Bylaws, we have examined the
Management Report and the Financial Statements, which comprise the Balance Sheet, Statement
of Income, Statement of Changes in Shareholders’ Equity, Cash Flow, Statement of Added Value
and Notes to the Financial Statements for the fiscal year ended December 31, 2007. Based on
our examinations, on the Opinion of the Audit Committee and on the Opinion of the Independent
Auditors, it is our opinion that the statements cited above should be approved by shareholders.


                                                                   Porto Alegre, February 05, 2009.




                                     Claudio Morais Machado
                                            Chairman
                                       Ronei Xavier Janovik
                                         Vice-Chairman

                                      Americano Lopes Neto
                                        Irno Luiz Bassani
                                         Rubens Lahude
                                            Members




                                                                                                       79
                                BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
                    Independent Auditors´ Report

To the Management and Shareholders of
Banco do Estado do Rio Grande do Sul S.A.
Porto Alegre - RS


1.   We have audited the accompanying individual (Bank) and consolidated balance sheets of
     Banco do Estado do Rio Grande do Sul S.A. (“Bank”) and subsidiaries as of December 31,
     2008 and 2007, and the related statements of income, changes in shareholders’ equity (Bank),
     cash flows and value added for the years then ended and six-month period ended December
     31, 2008, all expressed in Brazilian reais and prepared under the responsibility of the Bank’s
     management. Our responsibility is to express an opinion on these financial statements.

2.   Our audits were conducted in accordance with auditing standards in Brazil and comprised:
     (a) planning of the work, taking into consideration the significance of the balances, volume of
     transactions, and the accounting and internal control systems of the Bank and its subsidiaries;
     (b) checking, on a test basis, the evidence and records that support the amounts and accounting
     information disclosed; and (c) evaluating the significant accounting practices and estimates
     adopted by the Management of the Bank and its subsidiaries, as well as the presentation of
     the financial statements taken as a whole.

3.   In our opinion, the financial statements referred to in paragraph 1 present fairly, in all material
     respects, the individual and consolidated financial positions of Banco do Estado do Rio
     Grande do Sul S.A. and subsidiaries as of December 31, 2008 and 2007, and the results of
     their operations, the changes in their shareholders’ equity (Bank), their cash flows, and the
     values added in operations for the years then ended and six-month period ended December
     31, 2008, in conformity with Brazilian accounting practices.

4.   The accompanying financial statements have been translated into English for the convenience
     of readers outside Brazil.

                                                                       Porto Alegre, February 5, 2009.



       Deloitte Touche Tohmatsu
       Independent Auditors
       CRC nº. 2 SP 11.609/O-8/F/RS
       Fernando Carrasco
       Engagement Partner
       CRC nº. 1 SP 157.760/T/RS




                                                                                                           80
                                  BANRISUL FINANCIAL STATEMENTS DECEMBER, 2008
           GOVERNMENT OF
                         STA
       RIO GRANDE DO SUL STATE
           Secretary of the Treasury
     Banco do Estado do Rio Grande do Sul



                    BOARD OF DIRECTORS


              AOD CUNHA DE MORAES JÚNIOR
                       Chairman

             FERNANDO GUERREIRO DE LEMOS
                    Vice Chairman

                   ARIO ZIMMERMANN
                    IVO DA SILVA LECH
                JOÃO VERNER JUENEMANN
                        JOÃO ZANI
                MANOEL ANDRÉ DA ROCHA
                MATEUS AFFONSO BANDEIRA
                RUBENS SALVADOR BORDINI
                      Board Members




              BOARD OF EXECUTIVE OFFICERS


             FERNANDO GUERREIRO DE LEMOS
                        CEO

                 RUBENS SALVADOR BORDINI
                      Vice-President

           CARLOS TADEU AGRIFOGLIO VIANNA
              LUIZ GONZAGA VERAS MOTA
                  LUIZ VALDIR ANDRES
             PAULO ROBERTO GARCIA FRANZ
               RICARDO RICHINITI HINGEL
                    URBANO SCHMIT
                        Officers




                     LUIZ CARLOS MORLIN
                   Accountant CRCRS 51.124




BANCO DO ESTADO DO RIO GRANDE DO SUL S.A. - FOUNDED IN SEPTEMBER 12, 1928
   MAIN ADDRESS: RUA CAPITÃO MONTANHA, 177 - PORTO ALEGRE - RS - BRASIL
                           www.banrisul.com.br

				
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