OREANDA-NEWS. February 16, 2011. Banco Industrial e Comercial S.A. (BICBANCO) (BOVESPA: BICB3 and BICB4), the leader of the medium-sized bank market with a focus on the Middle Market, and one of the oldest private banks in Brazil, announced its results for the 4th quarter of 2010 (4Q10). All operating and financial information contained in this Report, except where otherwise indicated, is presented on a consolidated basis and includes the Bank's controlled companies and Receivables Investment Funds (FIDC), and is presented in Brazilian currency (Reais - RUSD ). The financial statements herein posted comply with the rules of the Central Bank of Brazil (BACEN) and the Brazilian Securities and Exchange Commission (CVM).

Comments by Milto Bardini, BICBANCO's Executive Vice President of Operations and IR Officer:

A point outside the curve, 4Q10 was a determining reason to hold back the results for FY 2010, which eventually fell below expectations. Its breakdown, nonetheless, as well as that of the whole fiscal year, contains elements whose resilience is worth examining. We believe that the increase both in the loan portfolio and in the client base, and the improved coverage of Provisions for NPLs and Overdue Installments are lasting trends. We believe that the continued high LLP expenses are a temporary event, just like the gap between the investments made in the expansion in both the service outlet network and in headcount (by 25% and 22% in 2010 respectively), and the results expected from such investments. Incurring expenses with the a view to guarantee a successful future while the costs from the past are still imposing a burden is like daring the passage between Scylla and Charybdis. Overcoming it - as we apparently did - can be translated into a glimpse of the open sea and the prospects of a better performance.

Likewise, the hectic reaction of some financial agents triggered by a groundless reveal of an unorthodox behavior of a financial institution that led to a liquidity crunch - eased just in early 2011 - can also be considered a circumstantial event. Nevertheless, in spite of the peculiarities of the case, the Bank's average liquid assets remained above RUSD  2.5 billion throughout the quarter. It is needless to highlight the ensuing costs.

Afterwards, keeping a strong correlation with the aforementioned event, the Regulatory Body took "macroprudential" measures curbing mismatches, restricting portfolio assignments and increasing reserve requirement rates. None of those measures concerns our Bank: we do not assign portfolios, keep an adequate match between assets and liabilities and fall far short of the need to increase our reserve requirement rates. Even so, we are still slightly affected due to higher funding costs in the domestic Market. C'est la vie.

Conditions in 2011 allow us to expect our portfolio to increase considerably above the market average, now largely based on costs that have already been accounted for. The currently stable NIM levels and Provision expenses (in annual terms) will pave the way for a rise of about two percentage points in both our ROAE and efficiency ratio.