1. Book Net Income⁽¹⁾ in the year was R$10.022 billion (an increase of 25.1% compared to the R$8.012 billion in the same period of 2009), corresponding to earnings per share of R$2.66, and Return on Average Shareholders' Equity⁽²⁾ of 22.7%.

2. Book Net Income was composed of R$7.104 billion from financial activities, which represented 70.9% of the total, and R$2.918 billion from insurance, private pension and savings bond operations, which accounted for
29.1% of the total.

3. On December 31, 2010, Bradesco's market capitalization stood at R$109.759 billion⁽³⁾, while the value of preferred shares rose by 12.1%⁽⁴⁾ in 2010, against the 1.0% appreciation in the Ibovespa index.

4. Total Assets stood at R$637.485 billion in December 2010, an increase of 25.9% from the balance in the same period in 2009. Return on Average Assets was 1.7%.

5. The Expanded Loan Portfolio⁽⁵⁾ stood at R$293.555 billion in December 2010, up 23.0% from the same period in 2009. Operations with individuals totaled R$98.122 billion (up 19.5%), while operations with companies totaled R$195.433 billion (up 24.9%).

6. Total Assets under Management stood at R$872.514 billion, an increase of 24.3% from December 2009.

7. Shareholders' Equity was R$48.043 billion in December 2010, increasing by 15.1% from the balance in the same period a year earlier. The Capital Adequacy Ratio (Basel II) stood at 14.7% in December 2010, 13.1% of which under Tier I Capital.

8. In 2010, Interest on Shareholders' Equity and Dividends were paid and provisioned to shareholders, of which R$3.369 billion were related to income generated in 2010, of which R$1.095 billion as interim and monthly dividends paid and R$2.274 billion provisioned.

9. The Financial Margin reached R$33,056 million, up 11.1% on 2009.

10. The delinquency ratio over 90 days stood at 3.6%, down for the fifth consecutive quarter.

11. The Efficiency Ratio⁽⁶⁾ stood at 42.7% in December 2010 (40.5% in December 2009) and the "adjusted-to-risk" ratio stood at 52.4% in December 2010 (55.9% in December 2009).

12. Insurance Written Premium, Pension Plan Contributions and Savings Bonds Income totaled R$31.078 billion⁽⁷⁾ in 2010, up by 18.0% over 2009. Technical provisions stood at R$87.177 billion, equal to 30.6% of the Brazilian insurance market (base date: November/10).

13. Investments in infrastructure, information technology and telecommunication amounted to R$3.920 billion in 2010, growth of 13.4% compared to the previous year.

14. Taxes and contributions, including social security, paid or provisioned, amounted to R$15.782 billion, of which R$6.793 billion corresponded to taxes withheld and collected from third parties and R$8.989 billion corresponded to taxes levied on the activities of Bradesco Organization, equal to 89.7% of Book Net Income.

15.  Banco Bradesco has an extensive distribution network in Brazil, with 6,551 Service Points (3,628 Branches, 1,263 PABs and 1,660 PAAs). Customers can also use 1,557 PAEs, 26,104 Bradesco Expresso service points, 6,203 Banco Postal (Postal Bank) branches, 32,015 own ATMs in the Bradesco Dia&Noite network and 11,057 ATMs shared with other banks⁽⁸⁾.

16. The employees' payroll plus charges and benefits totaled R$7.844 billion. Social benefits provided to the 95,248 employees of Bradesco Organization and their dependents amounted to R$1.856 billion, while investments in training and development programs totaled R$107.105 million.

17.  As resolved at the December 17, 2010 Extraordinary Shareholders' Meeting, Bradesco is increasing its capital stock by R$1.5 billion, from R$28.5 billion to R$30.0 billion.

18. In November 2010, Bradesco became the first national sponsor of the Rio 2016 Olympic Games, as the exclusive financial service ad insurance provider.

19.  Main Awards and Recognitions in the fourth quarter of 2010:

• Elected the Bank of the Year 2010 in the Relatório Bancário (Bank Report) Award, which recognized the Institution's contribution to develop society through its products and services, supported by an innovative and cutting-edge technological platform (Relatório Bancário Magazine); 
   
• Best Bank in Personnel Management, placing second among companies with more than 10,000 employees, in 2010 (Valor Carreira magazine / Valor Econômico newspaper);
   
• Bradesco was considered the most valuable brand in the financial segment (Superbrands);
   
• For the third consecutive year, it received the Prêmio Intangíveis Brasil 2010 (2010 Brazil Intangible Award), in the category "Information Technology and Internet" (Consumidor Moderno magazine);
   
• It was one of the 20 model companies in corporate social responsibility in Brazil according to Guia Exame de Sustentabilidade 2010 (2010 Exame Sustainability Guide)/Exame Magazine;

Short-Term
P-3 

To provide better understanding, comparison and analysis of Bradesco's results, we use the Adjusted Statement of Income for the analyses and comments contained in this Report on Economic and Financial Analysis, which is obtained from adjustments made to the Book 

Statement of Income, detailed at the end of this Press Release, which includes adjustments to non-recurring events shown in the previous page. Note that the Adjusted Statement of Income is the basis adopted for the analyses and comments made in chapters 1 and 2 of this report. 

- Interest 

- Non-Interest 

In the fourth quarter of 2010, Bradesco's adjusted net income stood at R$2,684 million, an increase of 6.6% or R$166 million from the previous quarter, which was primarily impacted by: (i) the growth in financial margin, due to the increased volume of operations; (ii) higher fee and commission income; offset by: (iii) the increase in
allowance for loan losses; and (iv) increased personnel and administrative expenses.

Accumulated over 2010, adjusted net income totaled R$9,804 million, an increase of 29.2% from the R$2,218 million in 2009.

The main reasons for this result are described below in the analysis of the main income statement items, with the consolidation of the income accounts of Banco Ibi as of November 2009.

Shareholders' Equity was R$48,043 million in December 2010, increasing 15.1% from 2009. The Capital Adequacy Ratio stood at 14.7%, of which 13.1% was under Tier I Capital.

Total assets stood at R$637,485 million in December 2010, up 25.9% over 2009, driven by the expansion of business volume. Return on average assets (ROAA) remained stable, hovering near 1.7%.

The ER calculated on an adjusted-to-risk basis to reflect the impact of risk in loan operations⁽²⁾ dropped for the fourth consecutive quarter, reaching 52.4% in the fourth quarter of 2010, up 0.9 p.p. compared to the previous quarter and 3.5 p.p. in the year. This behavior is in line with the results of previous quarters, mainly due to decreased delinquency.

As for the ER accumulated over 12 months⁽¹⁾, increases seen in the last few quarters are mainly due to exceptional treasury gains and a decline in advertising and publicity expenses in 2009 which led to an increase in the periods indicators, in addition to higher expenses in 2010 resulting from the expansion of service points (from 44,577 in December 2009 to 54,884 in December 2010).

The quarterly ER increased from 43.0% in the third quarter of 2010 to 44.0% in the fourth quarter of 2010, mainly due to: (i) increased personnel expenses due to higher salary levels and growth in total staff resulting from investments in the expansion of Service Points and improvements in business segmentation; and (ii) higher administrative expenses, mainly due to the seasonal effect of this quarter and organic growth in the period.

The R$716 million increase between the fourth quarter of 2010 and the third quarter of 2010 was due to:

In 2010 financial margin stood at R$33,056 million, a R$3,302 million improvement over 2009, or 11.1%, mainly driven by:

and offset by:

In December 2010, Bradesco's loan operations (considering sureties, guarantees, advances of credit card receivables and assignment of receivables-backed investment funds and mortgage-backed receivables) totaled R$274.2 billion. The expansion of 7.3% in the quarter was due to: (i) growth of 9.0% in the SME portfolio; (ii) 7.5% in the Large Corporate portfolio; and (iii) 5.6% in the Individuals portfolio.

Compared to the last 12 months, the portfolio expanded by 20.2%, the result of growth of: (i) 29.2% in the SME portfolio, (ii) 19.5% in the Individuals portfolio and (iii) 13.7% in the Large Corporate portfolio.

In the Individuals segment, the products registering the strongest growth in the last twelve months were: (i) payroll-deductible loans; (ii) BNDES/Finame onlending operations; and (iii) real estate financing. In the Corporate segment, growth was led by: (i) BNDES/Finame onlending operations; (ii) credit card; and (iii) real estate financing - corporate plan.

Including other loan risk operations from the commercial portfolio⁽¹⁾ (expanded criteria), that mainly impacted the operations of Large Corporations (debentures and promissory notes), totaling R$19.3 billion in December 2010 (R$10.5 billion in December 2009), operations with credit risk would amount to R$293.6 billion in December 2010 (R$238.6 billion in December 2009), up 8.4% in the quarter and 23.0% in the last twelve months.

(1) For more information, see page 38 of Chapter 2 of this Report.

In 2010, PLL expenses totaled R$8,703 million, down by 24.2% against 2009, a result of a decline in delinquency, and an increase in loan recovery of 57.9% in the period, totaling R$2,677 million. Loan operations grew by 23.0% in the same period, demonstrating growth accompanied by quality in Bradesco's loan portfolio. 

Delinquency Ratio > 90 days

The delinquency ratio for credits overdue more than 90 days decreased for the fifth consecutive quarter and reached 3.6% in December 2010.

The excellent performance of this indicator reflects the country's favorable economic scenario, as well as the quality of policy and processes of loan assignment. 

The graph below presents the evolution of the coverage ratio of the Allowance for Loan Losses for loans overdue more than 60 and 90 days. In December 2010 these ratios reached 163.3% and 197.6%, respectively, the highest ever in the historical series.

The balance of Allowance for Loan Losses of R$16.3 billion, in December 2010, was made up of: (i) R$13.3 billion in provisions required by the Brazilian Central Bank; and (ii) R$3.0 billion in additional provisions.

It is important to point out that the greatest evolution occurred in the balance of the generic provision, which has a more preventive characteristic due to customers ratings and is not pegged to possible delays. Therefore, the provision tends to be in line with growth in the loan portfolio.

Adjusted Net Income in the fourth quarter of 2010 came to R$779 million (R$721 million in the third quarter of 2010), posting a 31.0% Return on Average Shareholders' Equity. 

Adjusted Net Income for 2010 was R$2.904 billion, up 16.3% from the same period in 2009, with an annual return on Shareholders' Equity of 26.0%. 

In the fourth quarter of 2010, the Group's total revenue (insurance premiums written, private pension contributions and income from savings bonds) increased by 17.2% compared to the 

previous quarter and presented important improvements in the Life and Private Pension segment, fueled by the increased concentration of private pension contributions in the period. 

Accumulated up to December 2010, production grew by 18.0% from the same period in 2009. This increase was fueled by the high performance of Savings Bonds, Auto, Health and Life products, which increased by 24.8%, 20.0%, 22.6% and 17.7%, respectively.

The 8.0% increase in net income in the fourth quarter of 2010, compared to the previous quarter, was mainly as a result of: (i) a 17.2% increase in revenue; (ii) an improvement in claims of 1.3 p.p.; (iii) improvement in the administrative efficiency index of 0.5 p.p.; and (iv) greater financial result and equity income.

Comparing the adjusted net income for 2010 with the same period in 2009, the Insurance Group grew by 16.3%, mainly due to: (i) the 18.0% increase in revenues; (ii) greater financial result; and (iii) a drop in claims of 2.6 p.p. 

The Insurance Group's technical provisions represented 30.6% of the insurance industry in November 2010, according to Susep and the National Supplementary Health Agency (ANS).

In terms of solvency, Grupo Bradesco de Seguros e Previdência complies with the Susep rules that took effect on January 1, 2008, and international standards (Solvency II). The financial leverage ratio stood at 2.6 times Shareholders' Equity. 

In the fourth quarter of 2010, fee and commission income totaled R$3,568 million, up 4.1% from the previous quarter. Income growth in the quarter was the result of: (i) increased revenue from credit cards, due to the seasonal effect of the quarter, in addition to the larger card/customer base; (ii) the net increase in new checking accounts; (iii) increased revenue from loan operations; and partially offset by: (iv) the non-proportional consolidation of CPM Braxis as of this quarter, due to the partial divestment in September 2010.

In the comparison between the years, the 15.1% increase was mainly due to: (i) the excellent performance of the credit card segment, due to the larger card/customer base, including revenue from Banco Ibi and the effects of changes in interest held in Visavale and Cielo; (ii) the increase in income from checking accounts, which was driven by growth in business volume and a larger checking account client base, which had a net growth of some 2.2 million accounts in the period; (iii) the greater income from loan operations; (iv) the increase in fund management; (v) increased income from collections and payments; and (vi) higher revenue from consortium management. 

In the fourth quarter of 2010, the R$122 million increase from the previous quarter was composed of changes in the following portions:

The R$1,335 million growth in the year is mainly due to:

(iii) growth in business and service volume; (iv) the increase in variable expenses tied to revenue (i.e. Bradesco Expresso and Banco Postal); (v) increased expenses with legal advisory services, related to the 60% growth in recoveries in 2010; and (vi) the expansion of the Customer Service Network by 10,307 new units: 174 branches, 368 PAB/PAE/PAA, 5,904 Bradesco Expresso branches and 3,861 other service points, amounting to 54,884 on December 31, 2010.

In the fourth quarter of 2010, the 12.7% increase in administrative expenses in relation to the third quarter of 2010 was mainly due to: (i) outsourced services, related to: (a) partial outsourcing of credit card processing (Fidelity); (b) upgrading and expansion of customer service structure (i.e. Call Center); and c) variable expenses related to revenue (i.e. Bradesco Expresso and Banco Postal); (ii) advertising and publicity; (iii) data processing; and (iv) communication. The seasonality of the quarter also had an important impact in administrative expenses, due to the higher business and service volume, in addition to the organic growth of service points by 2,869 new units: 130 branches, 45 PAB/PAE/PAA stations, 1,217 Bradesco Expresso branches and 1,477 other service points.

In the annual comparison, the 21.5% increase is essentially due to: (i) the impact of Banco Ibi merger, in November 2009 (if the merger were excluded, administrative expenses would have increased by 15.6%); (ii) greater expenses with advertising and marketing in 2010, given that these expenses presented a significant drop in 2009;

Other operating expenses, net of other operating income, totaled R$646 million in the fourth quarter of 2010, up 8.0% or R$48 million over previous quarter.

In the annual comparison, the R$433 million increase in other operating expenses net of other operating income basically reflects higher expenses with: (i) the recording of operating provisions, especially for civil contingencies; (ii) goodwill amortization; and (iii) the operating expenses resulting from Banco Ibi merger in November 2009. 

In the fourth quarter of 2010, expenses with income tax and social contribution remained practically steady in comparison with the previous quarter.

In the annual comparison, the increase of 69.6%, or R$1,787 million, was due to greater taxable income in the year.

Tax credits from previous periods due to the increase of Social Contribution rates to 15% are recorded in the financial statements, up to the limit of corresponding consolidated tax requirements. The unused balance currently stands at R$227 million. More details are available in note 34 of the Financial Statements. 

Unrealized gains totaled R$10,556 million in the fourth quarter of 2010, a R$612 million decrease from the previous quarter. This was mainly due to: (i) the decrease in unrealized gains of loan and leasing, resulting from an increase in interest rates; and (ii) the drop seen in the stock market (Ibovespa), which affected some of our equity investments, especially those in Cielo stock; (iii) the increase in unrealized losses in subordinated debts, due to the drop in foreign market's interest rates; and partially offset by: (iv) appreciation of the mark to market of securities, particularly fixed-Income bonds pegged to the IPCA. 

The recovery of the major developed economies continues to be marked by a number of risk factors, particularly a depressed labor market, the financial deleverage of households and high levels of government indebtedness. Nonetheless, the developing countries are continuing to record strong growth and are gaining recognition in global decision-making forums. China in particular continues to exercise its role as the driver of global growth, even though inflationary pressure and excesses in the real estate market have forced local authorities to adopt measures to contain excessive growth, indicating a moderate slowdown in 2011. China continues to stand out because of its demand for commodities, in addition to becoming Brazil's main trading partner in 2010. Commodity prices, especially in the agricultural area, were up at the close of the year due to heated Chinese demand, as well as adverse weather situations.

On the domestic front, if expected GDP growth of 7.8% is confirmed, 2010 will record the highest growth for the last 25 years. The expected deceleration to 4.3% in 2011 should not be seen in a negative light, as it is important that Brazil's economy better reflects its growth potential. Despite the country's undoubted export strength, its main performance driver has been - and continues to be - domestic demand. The sustainable recovery of investments resulted from improved business confidence, the opportunities related to the sporting events in 2014 and 2016 and the exploration of the pre-salt layer. Household consumption continues to grow at a robust pace, supported by the buoyant job market, income gains and the generation of formal jobs.

The country's strong economic expansion was characterized by differences in performance between the different quarters, highlighting several bottlenecks. The increasing gap between supply and demand led the Brazilian Central Bank to normalize

monetary policy, the easing of which during the global crisis brought the Selic to its lowest ever level. Despite the expected slowdown in 2011, latent inflation pressure will remain a cause for concern, not only because of the recent commodity price hikes, but also because of the healthy job market and its impact on prices in the service sector. Thus, we should expect another cycle of monetary tightening, though to a lesser degree than we have seen in the recent past, due to greater expected coordination with fiscal policy.

Credit, employment and income will continue to grow robustly in 2011, albeit at a more moderate pace than in the previous year. With no signs of excessive commitment of income on the part of borrowers and with continuing social mobility, the outlook for the Brazilian banking system remains favorable. The recently adopted cautionary measures to avoid the excessive expansion of credit should be effective in achieving their proposed objectives, although they will not prevent bank loan balances from recording double-digit growth, probably around 15% for the year.

On the political front, the recent presidential elections went off without any major problems that could have affected economic agents investment and consumption decisions, proving that the economic achievements of the last few years will be preserved, along with relevant gains on the social front, despite government cycles. Bradesco continues to believe that the prospects for the Brazilian economy in the coming years are favorable, and growth may even take root more rapidly than expected through increased investments in education and infrastructure.

Individuals 

Corporate 

SMEs 

Large Corporate 

Vehicles 

Cartões ⁽¹⁾ 

Real Estate Financing (origination) 

Payroll Deductible Loans