1 – Risks Relating to the Bank

An increase in the delinquency rates of the borrowers of Banco ABC Brasil could have an adverse effect on its income.

The Bank’s risk management and control system may be insufficient to prevent losses.

Banco ABC Brasil has high exposure to the credit risk of Brazil’s federal government. Any lack of timeliness in the federal government’s payments of its obligations could have an adverse effect on its financial situation.

The Bank’s operations involving securities and derivatives could result in substantial losses.

Any imbalances between the credit portfolio of Banco ABC Brasil and its funding sources could adversely affect its operating income and its capacity to expand its credit operations.

Any problems with the Bank’s fund raising operations could adversely affect its operating income.

The Bank is subject to operating errors or problems that could adversely affect its business, financial conditions and operating income.

The departure of any member of the board or senior management team of Banco ABC Brasil, or the inability to recruit and retain qualified personnel to work in these areas, could have a significant adverse impact on the Bank.

The departure or lack of support of the controlling shareholder in Banco ABC Brasil in an economic scenario marked by low liquidity could have an adverse impact on its business.

Any downgrade in the credit ratings of the Bank could increase its funding costs, which could affect it adversely.

Any deterioration in the credit quality of the drawees of the receivables guarantee portfolio could adversely affect the credit operations extended to companies of Banco ABC Brasil.

The Bank’s capacity to collect the payments originating from the payroll-backed personal credit operations is dependent on the effectiveness and validity of the agreements signed with employers and government agencies