2 – Risks Relating to the Brazilian Banking Industry

Changes implemented by the Central Bank in the basic interest rate of the economy could adversely affect the operating income of Banco ABC Brasil.

The federal government regulates the operations of Brazilian banks and any amendments to existing laws and regulations or the imposition of new laws and regulations may adversely affect the Bank’s operations and revenue.

Changes in Brazil’s tax and pension laws and could adversely affect Banco ABC Brasil.

The Bank may, in the future and periodically, have insufficient capital to comply with the minimum capital requirements established by the National Monetary Council (CMN) and by the Central Bank.

Specific measures taken by the Central Bank regarding other financial institutions could adversely affect investor confidence and consequently have an adverse affect on Banco ABC Brasil.

Changes in reserve requirements could affect the Bank’s profitability.

The increasingly competitive environment in Brazil’s banking industry and the growing competition in the Middle-Market, Large-Middle and Wholesale segments could adversely affect the business outlook of Banco ABC Brasil.