3 – Risks Relating to Brazil

The federal government has exercised and continues to exercise considerable influence on the Brazilian economy. This influence, as well as the country’s political and economic conditions, may adversely affect the activities of Banco ABC Brasil and the market value of its shares.

Events and the perception of risk in other countries, especially in emerging-market countries, could have a negative effect on the market value of Brazilian assets, including the Bank’s shares.

Inflation and measures taken by the federal government to control inflation could contribute significantly to economic uncertainty in Brazil and adversely affect the operating income of Banco ABC Brasil and the market price of its shares.

Instability in foreign-currency exchange rates could adversely affect the Bank’s operating income as well as the market value of its shares.

The application of a limit on the interest rates charged on bank loans could have an adverse affect on Banco ABC Brasil.