1/18

1Q10 Earnings Release

Gradual recovery from default and in profitability

São Paulo, May 11, 2010 – Banco Indusval S.A., financial institution with activities focused on

middle market enterprises lending, operating in the Brazilian market for over 40 years, listed at the

Stock, Commodities and Futures Exchange - BM&FBOVESPA under tickers IDVL3 and IDVL4,

announces its financial results for the first quarter 2010 (1Q10).

Highlights

� Loan Portfolio slightly above R$ 1.7 billion, with

recovery in loan origination, partially offset by write-

offs.

� Volume of operations overdue more than 60 days fell

from 5.9% in 4Q09 to 3.5%, continuing to ease the

pressure of allowance for loan losses on results.

� Total funding came to R$ 1.9 billion, with longer

average maturities.

� Net income was R$ 7.3 million in the quarter, up

66% on 4Q09.

IDVL4: R$ 8.18 per share Closing: 05/11/2010

Total Shares: 42,475,101 Market Cap: R$ 347.4 MM

Conference Call: 05/12/2010

In English

At: 11 am (US EST)/ 12 am (Brasilia) Phone: (1 973) 935-8893

Code: 71227373

In Portuguese At: 10 am (US EST)/ 11 am (Brasília)

Phone: (55 11) 2188-0155 Code: Banco Indusval

Website:

www.indusval.com.br/ir

Investor Relations Contacts:

Ziro Murata Junior – IR Officer

Maria Angela R. Valente – IR Head Phone: 55 11 3315-6821

E-mail: mvalente@indusval.com.br

2/18

The financial and operating information presented in this report are based on consolidated financials prepared in local currency

(Real), according to Brazilian GAAP.

Income from Financial Intermediation 35.2 27.4 28.4 28.5% 23.9%

Operating Results 10.8 4.2 5.4 157.1% 100.0%

Net Profit 7.3 4.4 8.0 65.9% -8.8%

Loan Portfolio 1,655.6 1,635.9 1,668.7 1.2% -0.8%

Loan Portfolio + Guarantees and L/Cs 1,719.1 1,698.7 1,735.6 1.2% -1.0%

Cash & Short Term Investments 377.3 357.2 424.0 5.6% -11.0%

Securities 979.4 725.0 167.2 35.1% 485.8%

Total Assets 3,048.6 2,730.2 2,337.1 11.7% 30.4%

Total Deposits 1,363.6 1,273.2 801.1 7.1% 70.2%

Foreign Borrowings 408.4 377.4 440.9 8.2% -7.4%

Domestic Borrowings 0.0 0.0 118.4 n.m. -100.0%

Domestic On-lending 108.7 142.6 195.4 -23.8% -44.4%

Shareholders’ Equity 430.7 432.7 451.9 -0.5% -4.7%

Free Cash 1 707.1 695.9 436.0 1.6% 62.2%

ROAE 2 7.0% 4.1% 7.3% 2.8 p.p. -0.3 p.p.

NIM3 7.0% 6.7% 10.6% 0.4 p.p. -3.5 p.p.

NPL / Loan portfolio 4 3.5% 5.9% 4.2% -2.4 p.p. -0.7 p.p.

Basel Index 21.1% 22.5% 25.7% -1.5 p.p. -4.6 p.p.

Efficiency Ratio 5 61.0% 63.2% 44.5% -2.2 p.p. 16.5 p.p.

Number of Clients - Corporate Borrowers 680 660 675

Number of Employees 350 333 327

Banco Indusval Multistock (BIM) is a commercial bank with 42 years of experience in the financial markets, focusing on local and foreign currency loan products for midsized companies. Operating with agility and quality in its services, BIM has a credit portfolio of 680 companies and a wide range of products designed to meet the specific needs of this market niche. To guarantee such a level of service, the Bank relies on a network of 11 branches strategically located in regions with the maximum concentration of midsized companies in Brazil, in addition to an overseas branch and its subsidiary Indusval Corretora de Valores, the brokerage arm that operates at the São Paulo Stock, Commodities and Futures Exchange - BM&FBOVESPA. The Bank is a publicly-held financial institution listed at Level 1 Corporate Governance of the BM&FBOVESPA since July 2007 and voluntarily adopts additional practices specific to companies listed in the Novo Mercado special trading segment.

1 Short term Investments + Securities (-) Open Market (-) Derivatives 2 Annualized Return on Average Equity 3 Net Interest Margin= Gross Result from Financial Intermediation (except from Allowance for Loan Losses)/ Average Interest Earning Assets

4 NPL (Non-Performing Loans) - Total outstanding of contracts with one of the installments overdue for more than 60 days 5 Ratio between Operating Expenses and Operating Income. A fall in this index shows improved performance

Balance Sheet Resultados Trimestrais

1Q10 4Q09 1Q09 1Q10/4Q09 1Q10/1Q09

Key Indicators – R$ MM

Results 1Q10 4Q09 1Q09 1Q10/4Q09 1Q10/1Q09

Performance 1Q10 4Q09 1Q09 1Q10/4Q09 1Q10/1Q09

Other Information 1Q10 4Q09 1Q09

3/18

The improvement in the economic fundamentals in the first quarter of 2010 confirms the

consistency in Brazil’s economic recovery and some improvement in the international scenario,

despite concerns about a few European countries such as Portugal, Ireland, Greece and Spain,

which bring volatility to the markets and uncertainty to the moderate growth projections for the

world economy. Brazil recorded significant Gross Domestic Product growth in the last two quarters,

while the rise in job levels, the real wage bill, workers’ income levels and credit in recent years

increased the purchasing power, thus driving the economy.

In the first quarter of 2010, Banco Indusval Multistock recorded a recovery in its profitability,

posting net income of R$ 7.3 million, up 66% on 4Q09. This is due to the gradual recovery in

revenues, the decline in default rates and the reduction in administrative expenses. The quality of

the loan portfolio still reflects the impacts of the crisis, with an increase in higher-risk operations,

the D-H range – which comprises operations overdue for more than 60 days and those with regular

payments but which, after being renegotiated, were not moved to lower risk ranges as their

fundamentals did not warrant such reclassification. BIM’s strategy is to expand its loan portfolio

gradually as the recovery trend consolidates. In the first quarter, the Bank posted growth in loan

origination, which was partially offset by the write-offs of operations settled in the period or those

that were fully provisioned and written off as bad debts. Funding operations have grown steadily

and our cash position remains solid to meet the expected growth or the obligations maturing

during the year, should there be fresh turbulence.

We reaffirm our confidence that 2010 will be a more positive year, with the recovery and growth in

midsized companies and the hiring of new relationship managers to diversify and expand our client

base. We have sufficient resources and capital to accelerate the pace of business in the coming

months.

Generally speaking, despite the uncertainties abroad, the economic recovery in Brazil, which began

in the last quarter of 2009, should further consolidate in 2010. In the quarter ended March 31,

2010, Gross Domestic Product and employment levels grew, while interest rate was maintained.

The concern in the domestic front is due to the increase in inflation caused by the growth in the

monetary circulation and rising commodity prices, which led the government to raise the benchmark

interest rate, the key instrument of its monetary policy, by 0.75 p.p. to reach 9.5% p.a. on April 28.

This increase had already been priced by the market and hence should not significantly affect

corporate loans. However, it should lead to a control in consumption, especially by individuals of

credit-elastic products.

1Q10 4Q09 1Q09 1Q10/ 4Q09 1Q10/ 1Q09

GDP Variation (IBGE- Q on previous Q) *2.5% 2.04% -0.91% 0.46 p.p. 2.95 p.p.

Inflation Rate (IPCA – IBGE) 2.06% 1.06% 1.23% 1.00 p.p. 0.17 p.p.

FX Rate Variation (US$/ R$) 2.29% -2.10% -0.93% 4.39 p.p. -1.17 p.p.

Interest Base Rate Variation (Selic) 2.06% 2.09% 2.95% 0.03 p.p. -0.86 p.p.

Individuals Default Rate (BACEN) *7.0% 7.8% 8.4% -0.8 p.p. 0.6 p.p.

Corporates Default Rate (BACEN) *3.6% 3.8% 2.6% -0.2 p.p. 1.2 p.p.

(*) estimate or preliminary figures from the Central Bank of Brazil (BACEN)

Macroeconomic Environment

Management Comments

4/18

Credit in Brazil

Credit Operations in the Financial System

Individuals Corporates

Resources Resources Period Non

earmarked Earmarked

Total Non earmarked

Earmarked Total

Total R$ million

Credit/ GDP %

2008 Dec 394 287 138 019 532 306 476 890 218 098 694 988 1 227 294 40.8

Mar 410 968 142 109 553 077 465 180 224 634 689 814 1 242 891 41.0 2009

Dec 469 899 166 131 636 030 484 661 293 704 778 366 1 414 396 45.0

2010 Mar* 487 491 176 586 664 077 486 736 300 965 787 701 1 451 778 45.0

Variation % In the month 2.0 2.8 2.2 0.2 0.2 0.2 1.1 -

-- In the quarter 3.7 6.3 4.4 0.4 2.5 1.2 2.6 - - In the year 3.7 6.3 4.4 0.4 2.5 1.2 2.6 - - In 12 months 18.6 24.3 20.1 4.6 34.0 14.2 16.8 4.0 p.p.

* estimate Source: BACEN Fonte:BACEN

Preliminary data from the Brazilian Central Bank for the quarter ended March 31, 2010, put the

total loan operations in the country’s financial system at R$ 1.45 trillion, which indicates faster

growth in recent months and a credit/GDP ratio stable at 45% since November 2009, due to the

GDP growth since the last quarter of 2009.

Operations contracted with non-earmarked resources (free credit) accounted for 67% of the total

credit in the system, compared to 33% in earmarked credit, which mainly consisted of housing

loans for individuals and BNDES loans for companies. Operations with free credit, which amounted

to R$ 974 billion, increased by 2.1% in the quarter and 11.2% in 12 months, while operations with

earmarked credit, which amounted to R$ 478 billion, grew 3.9% in the quarter and 30.2% in the

year, showing that earmarked credit still accounts for the bulk of the total credit growth. In March,

both with free and earmarked credit operations rose by 1.1%, indicating a potential recovery in the

pre-crisis share between these two credit categories and increased participation of private

institutions in credit volumes.

Free-credit loans continued to be driven by increased consumption by families, which was reflected

in individual loans. In the case of companies, local currency loans grew while those denominated in

foreign currency declined, especially in March. Individual loan operations increased by 4.4% in the

quarter (and 20.1% in 12 months) to R$ 664 billion, led by housing loans, vehicle financing and

payroll-lending, while corporate loans totaled R$ 788 billion, up by 1.2% in the quarter and by

14.2% in 12 months.

BIM focuses on free-credit loans to midsized companies, mainly loan and financing agreements in

the R$ 10,000 to R$ 100 million range which, according to the Central Bank of Brazil, grew 1.2% in

the first two months of the year and 11.6% in the 12 months ended February 2010.

Default

The Central Bank figures for March 2010

show a drop in default rates, mainly in the

individuals segment, which returned to the

December 2007 level of 7.0%. Corporate

defaults stabilized in October and have

been declining gradually since November.

1,0

2,0

3,0

4,0

5,0

6,0

7,0

8,0

9,0

10,0

Dec Dec Dec Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar

2006 2007 2008 2009 2010

%

Corporates Individuals Total

Fonte: BACEN

5/18

1Q10 4Q09 1Q09 1Q10/ 4Q09 1Q10/ 1Q09

Income from Financial Intermediation 114.4 93.3 117.7 22.7% -2.8%

Loan Operations 61.2 60.7 73.6 0.7% -16.9%

� Loans & Discounted Receivables 52.1 51.0 64.5 2.1% -19.3%

� Financing 6.5 6.0 8.8 8.5% -25.6%

� Other 2.6 3.7 0.3 -30.6% n.m.

Securities 24.3 24.9 23.5 -2.6% 3.1%

Derivative Financial Instruments 1.6 0.0 0.0 - -

Foreign Exchange Operations Result 27.3 7.6 20.5 258.3% 33.1%

Financial Intermediation Expenses 79.2 65.9 89.3 20.2% -11.3%

Money Market Funding 38.8 37.8 31.9 2.6% 21.6%

� Time Deposits 29.5 27.3 18.8 7.7% 56.9%

� Repurchase Transactions 8.3 9.2 8.1 -9.8% 2.5%

� Interbank Deposits 1.0 1.3 5.0 -23.1% -80.0%

Loans, Assignments & Onlendings 28.9 6.4 18.7 351.6% 54.5%

� Foreign Borrowings 26.3 2.2 15.0 n.m. 75.3%

� Domestic Borrowings & Onlendings 2.7 4.2 3.7 -37.3% -27.1%

Derivative Financial Instruments 0.0 5.3 7.0 -100.0% -100.0%

Allowance for Loan Losses 11.5 16.4 31.7 -29.9% -63.7%

Result from Financial Intermediation 35.2 27.4 28.4 28.5% 23.9%

Income from Financial Intermediation detailed in note 15(a) to the financial statements and

summarized above, fell 2.8% in relation to 1Q09, while increasing by 22.7% over 4Q09. This

growth was due to the slight increase in the income from loans and financing, the higher income

from foreign exchange operations, especially in Trade Finance, and the exchange variation on these

operations. As announced at the end of 2009, export financing operations

were the first to post growth in our portfolio.

Income from Securities Operations in 1Q10 fell slightly by 2.6% from

4Q09, as a result of the oscillation in pre-fixed rates, considering that the

average balance remained practically unchanged between the periods. On

the other hand, Income from Derivative Financial Instruments grew, since Banco Indusval’s

treasury department maintains all its positions pegged to the Interbank Deposit rate. In relation to

1Q09, this income grew by 3%, due to the growth in the volume of average investments, which was

offset by the reduction in the SELIC rate in the periods.

Expenses from Financial Intermediation, detailed in note 15(b) to the financial statements,

corresponded to 69% of the income from financial intermediation in 1Q10 (71% in 4Q09 and 76%

in 1Q09), but were 20% higher than in the previous quarter.

The main reasons for the increase were: (a) the increase of around 8% in expenses with time

deposits (CDBs and DPGEs), which accompanies the increase in funding volumes; and (b) foreign

exchange variation on the foreign loans taken to sustain the expansion of the trade finance portfolio

and those taken from the IFC (A/B Loan).

Note that the foreign exchange variations on Expenses from Financial Intermediation are offset by

Income from Financial Intermediation, both in the Income from Foreign Exchange Transactions

Results from Financial Intermediation – R$ MM

Operating Performance

Profitability

Gradual recovery in revenues

6/18

Lower impact of expenses with allowance for loan losses

(Trade Finance) and the Income from Derivative Financial Instruments (hedge operations for the

A/B Loan).

On the other hand, the 30% reduction in the Allowance for Loan Losses

Expenses as a result of the gradual improvement in default rates,

contributed to the lower ratio of Expenses from Financial

Intermediation to Income. In the first quarter, expenses with Allowance

for Loan Losses represented 10% of Income from Intermediation,

versus 18% in 4Q09 and 27% in 1Q09. Mandatory and complementary

provisions totaled R$ 110.7 million, equivalent to 6.7% of the Loan

Portfolio as on March 31, 2010, compared with R$ 133.4 million, or

8.2% of the portfolio on December 31, 2009, and R$ 97.8 million, or

5.9% of the portfolio on March 31, 2009.

Net Interest Margin (NIM)

Income from and Expenses with Financial

Intermediation, detailed above, resulted in a net

Income from Financial Intermediation of R$ 35.2

million, 28.5% and 23.9% higher than in 4Q09 and

1Q09, respectively.

The net interest margin (allowance for loan loss

expenses deducted), though short of our goal,

confirms the recovery trend that began in the last

quarter of 2009. This margin still reflects the impact

of defaults on the income from loan operations and

the maintenance of higher liquidity in view of the

obligations maturing during the year.

Given the need for lower allowance for loan losses, gross financial margin (GFM) improved

significantly over the previous quarters.

Efficiency Ratio

1Q10 4Q09 1Q09 1Q10/ 4Q09 1Q10/ 1Q09

Personnel Expenses 12.4 13.8 12.1 -9.7% 2.8%

Contributions and Profit-sharing 2.5 1.8 1.5 35.7% 71.2%

Administrative Expenses 9.3 9.4 11.7 -0.4% -20.0%

Taxes 3.2 2.4 3.3 32.3% -4.0%

Other Operating Expenses 3.5 4.9 0.1 -28.2% n.m.

A- Operating Expenses Total 30.9 32.2 28.6 -4.1% 8.0%

Gross Income Fin. Intermediation (w/o ALL) 46.7 43.8 60.1 6.6% -22.4%

Income from Services Rendered 2.8 2.8 2.7 0.7% 3.2%

Income from Banking Tariffs 0.2 0.2 0.2 -9.7% 20.4%

Other Operating Income 1.0 4.2 1.3 -76.6% -21.9%

B- Operating Income Total 50.7 51.0 64.3 -0.7% -21.2%

Efficiency Ratio (A/B) 61.0% 63.2% 44.5% -2.2 p.p. 16.5 p.p.

Efficiency Ratio – R$ MM

12.5%

10.6%9.8%

6.1%6.7%

7.0%

0.9%

5.1%4.9%

8.5%

5.3%

4.1%

4Q08 1Q09 2Q09 3Q09 4Q09 1Q10

NIM GFM

7/18

Reduction in operating expenses contributes to Efficiency

Operating expenses declined 4%, leading to a 2 p.p. improvement in the

efficiency ratio in the quarter. Given that this ratio represents expenses

over income, the lower the percentage of expenses over operating

income, the higher the efficiency of a financial institution’s operations.

In relation to the previous quarter, the control over operating expenses

was not sufficient to compensate the 21.2% decline in operating income,

especially income from financial intermediation, resulting in a ratio of

61.0% in 1Q10.

Net Profit

Banco Indusval Multistock recorded net income of R$ 7.3 million in 1Q10,

66% higher than in 4Q09, thanks to the increase in Income from Financial

Intermediation and the 30% reduction in allowance for loan losses. In

relation to 1Q09, net income fell by 8.8%. Note that the non-operating

income from the sale of 928,000 shares of BVM&FBOVESPA held by

Indusval Corretora added a non-recurring post-tax income of R$ 3.2 million

to the Company’s profit in 1Q09.

Fresh loan originations in the quarter were partially offset by the write-offs of operations amounting

to R$ 34.1 million to bad debts, maintaining the Total Loan Portfolio at R$ 1.7 billion at the close of

1Q10, as detailed below:

1Q10 4Q09 1Q09 1Q10/ 4Q09 1Q10/ 1Q09

Loan Operations 1,348.3 1,365.6 1,413.9 -1.3% -4.6%

Loans & Discounted Receivables 1,158.9 1,141.3 986.0 1.5% 17.5%

BNDES/ Finame 85.0 116.2 196.0 -26.8% -56.6%

Direct Consumer Credit – used vehicles 12.7 16.2 51.5 -21.6% -75.3%

Financing in Foreign Currency 32.4 23.1 15.5 40.3% 109.0%

Other Financing 22.8 25.5 0.2 -10.6% n.m.

Assignment with Co-obligation 36.5 43.4 61.7 -15.9% -40.8%

FIDC 0.0 0.0 102.9 n.m. -100.0%

Advances on Foreign Exchange Contracts 300.3 270.2 254.6 11.1% 17.9%

Other Loans 7.1 0.0 0.2 n.m. n.m.

DISBURSED CREDIT OPERATIONS 1,655.6 1,635.9 1,668.7 1.2% -0.8%

Guarantees Issued (Guarantees, L/Gs and L/Cs) 63.4 62.9 66.9 0.8% -5.2%

TOTAL 1,719.1 1,698.8 1,735.6 1.2% -0.9%

Allowance for Loan Losses (110.7) (133.4) (97.8) -17.0% 13.2%

Loan operations in reais represented 80% of the loan portfolio in the quarter, compared to 20% of

foreign currency loans (trade finance), back to the traditional portfolio mix with the recovery in

export financing operations.

Loan Portfolio

Loan Portfolio by Product – R$ MM

66% increase in Net Profit from 4Q09

8/18

1Q10 4Q09 1Q09 1Q10/ 4Q09 1Q10/ 1Q09

Local Currency - Real 1,322.9 1,342.6 1,398.6 -1.5% -5.4%

Foreign Currency 332.7 293.3 270.1 13.4% 23.1%

TOTAL 1,655.6 1,635.9 1,668.7 1.2% -0.8%

Foreign currency loans comprise trade finance operations, which are booked in reais and reflect the

growth in operations and the foreign exchange variation in the period. The portfolio balance in US

dollars increased from US$ 173.7 million in 4Q09 and US$ 116.7 million in 1Q09 to US$ 186.9

million in 1Q10, up 7.6% and 60.2%, respectively.

1Q10 4Q09 1Q09 1Q10/ 4Q09 1Q10/ 1Q09

Middle Market 1,557.5 1,529.7 1,595.6 1.8% -2.4%

Retail 28.2 33.8 51.5 -16.6% -45.3%

Other 69.9 72.4 21.6 -3.4% 223.6%

TOTAL 1,655.6 1,635.9 1,668.7

1.2% -0.8%

Banco Indusval Multistock focuses on midsized and upper-middle companies, which represent 94%

of its Loan Portfolio. Retail operations account for around 2% and Other Credits, relating to the

acquisition of individual loan portfolio with risk covered by the assigning bank, accounted for 4% of

the portfolio. Note that the Retail portfolio represents the remaining balance of the ‘Direct

Consumer Credit – Used Vehicles’ account, which was discontinued in October 2008 and includes

loans assigned with substantial risk retention.

Loan Portfolio by Industry

Food, Beverage and Tobacco 21.7%

Agribusiness 13.1%

Civil Construction 10.3%

Automotive 5.3%

Transportation & Logistics 4.8%

Metal Industry 4.3%

Education 4.1%

Financial Institutions 3.8%

Chemical & Pharmaceutical 3.8%

Textile, Apparel and Leather 3.8%

Individuals 3.6%

Financial Services 2.9%

Oil and Biofuel 2.7%

Paper and Pulp 1.4%

Other sectors * 14.3%

TOTAL 100.0%

(*) Individual participation of less than 1.4%

Loan Portfolio by Currency – R$ MM

Loan Portfolio by Client Segment – R$ MM

9/18

Industrial

54%

Commerce

12%

Services

25%

Individuals

9%

Middle

Market

94%

Retail

2%

Other

4%

10 largest

18%

11 - 60

31%61 - 160

24%

Other

27%

Loans &

Discounts

67%

BNDES

Onlending

5%

Trade

Finance

19%

Guarantees

issued

4%

Other

5%

Up to 90

days

37%

91 to 180

20%

181 to 360

14%

+360 days

29%

Aval on PN

19%

Pledge /

Lien

6%

Receivables

50%

Securities

3%

Monitored

Pledge

10%

Real State

10%

Vehicles

2%

By Economic Activity By Segment

By Product By Client Concentration

By Tenor By Guarantee

1Q10 4Q09 1Q09

Rating %

Required Provision

Loan Portfolio

Allowance for Loan Losses

Loan Portfolio

Allowance for Loan Losses

Loan Portfolio

Allowance for Loan Losses

AA 0.0% - - - - 42.3

A 0.5% 515.2 2.6 488.8 2.4 472.9 2.4

B 1.0% 465.9 4.7 471.2 4.7 521.6 5.2

C 3.0% 449.7 13.5 494.3 14.8 497.8 14.9

D 10.0% 101.4 10.1 63.6 6.4 32.6 3.3

E 30.0% 53.6 16.1 26.2 7.9 51.1 15.3

F 50.0% 30.4 15.2 20.2 10.1 15.1 7.6

G 70.0% 7.0 4.9 6.2 4.3 8.2 5.7

H 100.0% 32.4 32.4 65.4 65.4 27.2 27.2

Compl. Allowance - - 11.2 - 17.3 16.2

Total - 1,655.6 110.7 1,635.9 133.4 1,668.7

97.8

Quality of Loan Portfolio – R$ MM

Loan Portfolio Distribution

10/18

Allowance for loan losses totaled R$ 110.7 million and consists of: (a) provisions regulated by

Resolution 2682 of the Central Bank of Brazil, in the amount of R$ 99.5 million in the quarter

(against R$ 116.1 million in 4Q09 and R$ 81.6 million in 1Q09); and (b) complementary provisions

of 0.7% of the loan portfolio (around 1% in 4Q09 and 1Q09) in the amount of R$ 11.2 million.

Complementary provisions are maintained for potential difficulties in the payment of renegotiated

loans and in the aging of loans overdue more than 60 days classified between D and H.

Although permitted by law, BIM adopts the practice of not revising upwards the reclassification of

renegotiated overdue loans until the credit analysis of the economic and financial fundamentals of

the debtor or the strengthening of collaterals on the operations justify such reclassification.

Therefore, despite the reduction in the volume of overdue loans, the loans classified between D and

H increased in the quarter. However, R$ 166.4 million out of the R$ 224.8 million classified in this

range is in the regular payment schedule, and only R$ 58.4 million is overdue more than 60 days

and makes up the default ratio. This ratio is calculated by summing the total of loans overdue more

than 60 or 90 days, as applicable (NPL 60 days or NPL 90 days) and dividing it by the loan portfolio

volume.

The above table shows that allowance for loan losses on March 31, 2009 corresponded to 6.7% of

the loan portfolio. Loans overdue more than 60 days represent 3.5% (5.9% in 4Q09), while those

overdue more than 90 days correspond to 2.8% (5.4% in 4Q09), showing a recovery in the

scenario despite the write-off of R$ 34.1 million (around 2% of the loan portfolio on December 31,

2009) as bad debts. These refer to loans classified as H and hence are fully provisioned, for over

180 days. These write-offs reflect the period between the worsening of the global financial crisis and

the closing date of the calculation period.

As mentioned in the section on Macroeconomic Environment, data from the Central Bank of Brazil

shows that in general, corporate defaults fell gradually during the quarter and, if the

macroeconomic expectations continue, should drop further in the coming months.

In R$ million Overdue Contracts Outstanding (NPL)

Outstanding

> 60 days % > 90 days %

Middle Market 1,557.5 49.1 3.2% 39.6 2.5%

Retail 28.2 9.2 32.8% 7.4 26.1%

Financial Institutions – Acquired Loans 69.9 - 0.0% - 0.0%

TOTAL 1,655.6 58.4 3.5% 47.0 2.8%

Allowance for Loan Losses 110.7 - - - -

Allowance for Loan Losses / NPL - 189.7% - 235.5% -

Allowance for Loan Losses / Loan Portfolio 6.7% - - - -

Default by Segment – R$ MM

11/18

Institutional

Investors

56%

Corporates

24%

Individuals

12%

Banks

3%

Brokerage

firms

2%

Demand

Deposits

3%

<90 days

34%

91 - 180

13%

181 - 360

7%

> 360 days

46%

1Q10 4Q09 1Q09 1Q10/ 4Q09 1Q10/ 1Q09

Total Deposits 1,363.6 1,273.2 801.1 7.1% 70.2%

Time Deposits 698.5 666.0 603.4 4.9% 15.8%

Time Deposits bearing FGC* Guarantee (DPGE) 572.0 505.8 0.0 13.1% n.m.

Agribusiness Letters of Credit (LCA) 8.7 10.6 17.7 -17.9% -51.0%

Interbank Deposits 42.5 51.1 129.2 -16.8% -67.1%

Demand Deposits and Other 42.0 39.7 50.8 5.8% -17.3%

Domestic Onlending 108.7 142.6 195.4 -23.8% -44.4%

Domestic Borrowings 0.0 0.0 118.4 n.m. -100.0%

Foreign Borrowings 408.4 377.4 440.9 8.2% -7.4%

Trade Finance 296.8 267.9 305.5 10.8% -2.8%

IFC A/B Loan 111.6 109.5 135.4 1.9% -17.5%

TOTAL 1,880.7 1,793.2 1,555.8 4.9% 20.9%

Funding volume has increased moderately, especially Deposits which represented 72% of total

funding. Time Deposits with Special Guarantee (DPGE) increased by 13.1% in the quarter, thanks

to longer terms, established maturity dates and lower costs than in foreign funding. At the close of

the quarter, the average term of this type of funding was 692 days, with average term of 937 days

from the issue date. Funding via the issue of CDBs grew 4.9%, with average term of 363 days

(average issue term of 581 days) as of March 31, 2010, at costs lower than for DPGEs, since they

are not guaranteed by the Credit Guarantee Fund and their maturities are slightly shorter. The

average term for funding (CDB+DPGE+LCA+CDI) was 497 days on March 31, 2010, versus 485

days on December 31, 2009.

Deposits

By Investor By Tenor

Funding in reais represented 78% of total funding, while foreign resources corresponded to 22%.

Foreign loans grew 8% from 4Q09, due to the renewed growth in export financing, which increased

the trade finance portfolio and, consequently, funding volumes.

Funding

Total Funding – R$ MM

12/18

Free Cash Assets and Liabilities Management (GAPS)

R$ Million

436

696 708

1Q09 4Q09 1Q10

332

245

516

733

375

127

659674

9 0 d ays 18 0 days 3 6 0 d ays Ab o ve 36 0 days

As s e ts Li abilit ies

On March 31, 2010, Cash totaled R$ 1.3 billion and, excluding Money Market Funding (R$ 605.6

million) and Derivatives (R$ 43.9 million), resulted in free cash of R$ 707.1 million, equivalent to

52% of total deposits and 164% of shareholders’ equity. The maintenance of this liquidity provides

the security for future business development, since the Bank is prepared for growth if the current

prospects for domestic economic and lower default in 2010 are maintained. However, if this

scenario does not materialize, the Bank is yet prepared to meet its obligations maturing during the

year.

The Basel Accord requires banks to maintain at least 8.0% of the capital weighted by the risk in their

operations. However, the Central Bank of Brazil has stipulated that banks operating in the country

should maintain a minimum percentage of 11.0%, calculated according to the Basel Accord

regulations, which provides greater security to Brazil’s financial system against oscillations in

economic conditions.

The following table shows Banco Indusval Multistock’s position in relation to the minimum capital

requirements of the Central Bank:

1Q10 4Q09 1Q09 1Q10/ 4Q09 1Q10/ 1Q09

Total Capital 443.1 451.0 471.6 -1.7% -6.0

Required Capital 231.4 220.2 202.0 5.1% 14.6%

Margin over Required Capital 211.7 230.8 269.6 -8.3% -21.5%

Basel Index 21.1% 22.5% 25.7% -1.4 p.p. -4.6 p.p.

Agency Classification Observation Last Report

B+ / Positive / B

B+ / Positive / B

brBBB+/ Positive /brA-3

Foreign Currency

Local Currency

Local Scale – Brazil

October/2009

BBB+/ Stable/ F2 Local Scale – Brazil November/2009

10.71

Ranking: 29

RiskBank Index

December 2009 Aprill/2010

Capital Adequacy

Liquidity

Risk Ratings

Capital Adequacy – R$ MM

13/18

Indusval S.A. Corretora de Títulos e Valores Mobiliários is undergoing an accelerated process of

modernization and business restructuring, after the strategic alliance between Banco Indusval and

Luis Fernando Monteiro de Gouvêa and Alexandre Atherino in June 2009. This process included

shifting its office to a new address at the Vila Olímpia district, which is closer to its target market.

More important, however, was the hiring of teams with market expertise to expand the product

range and the implementation of specialized tools for business management, operational platforms

for stock and derivatives trading, targeted at institutional clients and qualified individuals, and the

operations via DMA (Direct Market Access). A new homebroker system, accessible through the

Broker’s new website, is in construction.

The strengthening of the technological structure for contracting, executing and

controlling the businesses resulted in the obtaining, in February 2010, of the Execution

Broker seal from the BM&FBOVESPA, which attests to the qualification of its

professionals and of its processes and systems to trade large volumes on the BM&F

market with agility and operational efficiency.

This step was essential for repositioning Indusval Multistock Corretora de Valores in the market, and

the new structure and strategy have already brought the initial results – at the end of 2008, the

Broker was ranked 52nd on BM&F market’s general ranking, improving to 44th in the end of 2009

and 17th in March 2010.

The new strategic management seeks to expand the institutional and qualified individuals client

base and extend its services to the retail segment. Based on the tradition and strength of the

Indusval brand, the Broker plans to become a liquidity center for institutional clients. In 2009, it

even launched fixed-income products by way government bonds, targeted at the Treasury

departments of financial institutions.

Total Shares

On March 31, 2010, Banco Indusval S/A had a total of 42,475,101 shares, of which 27,000,000

were common shares (IDVL3) and 15,475,101 were preferred shares (IDVL4).

Share Buyback Program and Treasury Shares

As approved by the Board of Directors’ Meeting held on September 17, 2009, the 3rd Share

Buyback Program for the acquisition of up to 1,458,925 preferred shares issued by the company is

effective till September 16, 2010. Indusval S.A. CTVM is the intermediary for this program. As of

March 31, 2010, a total of 829,279 preferred shares had been acquired under of this program and

are held in treasury, thus reducing the number of outstanding shares to 41,645,822.

Free Float

Excluding from the outstanding shares, the 18,154,220 shares owned by the controlling group and

the 2,733,939 shares owned by the management, Banco Indusval has a free float of 20,757,663,

representing 48.87% of its capital stock. Of the free float, 7,309,458 common shares are owned by

the Ribeiro and Ciampolini families, who are not controlling shareholders. Deducting these from the

free float brings the preferred shares to 13,448,205, or 31.66% of the total capital, traded on the

BM&FBOVESPA.

Indusval Multistock Corretora de Valores

Capital Market

14/18

Stock Option Plan

Since the launch of the Plan on March 26, 2008, the Executive Board has been granted options to

acquire 390,963 shares relating to the results of 2008. No option or profit-sharing has been granted

relating to the results of the first half of 2009, and 525,585 options were granted to the Executive

Board and Administrative Superintendents in February 2010 for the fiscal year 2009, bringing the

total options distributed to 916,521. No option has been canceled or exercised so far. It is worth

mentioning that the Executive Board has not received any cash bonus for 2009.

Shareholder Remuneration

On March 31, 2010, the Bank paid Interest on Equity in the amount of R$ 6.3 million related to

1Q10, as advance payment of the minimum mandatory dividend for 2010. This amount corresponds

to R$ 0.15015 per share or R$ 0.12763 net of withholding income tax.

6.039 6.817 6.257

6.5506.876

6.5126.622

6.3696.693

2005 2006 2007 2008 2009 2010

1Q 2Q 3Q 4Q

11,44610,167

15,858

25,47027,008

R$

Million

Shares Performance

The shares of Banco Indusval Multistock (IDVL4) closed 1Q10 at R$ 8.55, for market cap of R$

359.5 million and Shareholders’ Equity of R$ 430.7 million, resulting in a Market Value/Book Value

ratio of 0.83. The IDVL4 shares appreciated 3.1% in 1Q10 and 57.2% in twelve months. After

adjusting for earnings, the share appreciation was 73.3% in 12 months. The Ibovespa Index

appreciated 2.6% in the quarter and 71.9% in 12 months, while the IGC and ITAG indexes rose

78.9% and 79.9%, respectively in the year.

From 31.12.2008 From 31.12.2009

75

100

125

150

175

200

225

250

30/12

/08

13/02

/09

30/03

/09

14/05

/09

28/06

/09

12/08

/09

26/09

/09

10/11

/09

25/12

/09

08/02

/10

25/03

/10

09/05

/10

IBOVESPA IDVL4

80

90

100

110

120

130

30/12

/09

09/01

/10

19/01

/10

29/01

/10

08/02

/10

18/02

/10

28/02

/10

10/03

/10

20/03

/10

30/03

/10

09/04

/10

19/04

/10

29/04

/10

09/05

/10

IBOVESPA IDVL4

15/18

Liquidity and Trading Volume

The preferred shares of Banco Indusval Multistock (IDVL4) were traded in 100% of the sessions in

1Q10 and in the last 12 months. In 1Q10, a total of 2,330,300 shares were traded over 2,311

transactions on the spot market, for total volume of R$ 20,032,642.00. In 12 months, around

20,871,400 shares (20,151,700 in 2009) were traded in 16,933 transactions (15,189 in 2009) on

the spot market, for total volume of R$ 160,842,031.00 (R$ 149,614,050.00 in 2009),

demonstrating the improved liquidity of IDVL4 shares with the diversification of the shareholding

base.

Dispersed Shareholding Structure

Distribution of Preferred Shares by type of investor:

03/31/2010 12/30/2009

TYPE OF INVESTOR # Inv.

Preferred % Pref. % Total # Inv

Preferred % Pref. % Total

Controlling Shareholders 4 1,038,047 6.7% 42.7% 4 1,052,147 6.8% 42.8 %

Management 10 159,570 1.0% 6.4% 10 159,570 1.0% 6.4%

Family Members 12 747,131 4.8% 18.9% 12 747,131 4.8% 19.0%

Brazilian Inst. Inv. 101 6,300,018 40.7% 14.8% 56 5,985,639 38.7% 14.1%

Foreign Investors 11 4,390,625 28.4% 10.3% 14 4,550,725 29.4% 10.7%

Brazilian Corporates 14 143,600 0.9% 0.3% 16 115,509 0.7% 0.3%

Individuals 695 1,866,831 12.1% 4.4% 971 2,437,380 15.7% 5.7%

Treasury - 829,279 5.4% 1.9% - 427,000 2.8% 1.1%

TOTAL 901 15,475,101 100% 100% 1,083 15,475,101 100% 100%

16/18

R$ '000

Assets 03/31/2009 12/31/2009 03/31/2010

Current 1,928,879 2,243,031 2,516,462

Cash 34,173 4,051 2,949

Short-term interbank investments 389,870 353,143 374,362

Open market investments 342,296 292,897 311,163

Interbank deposits 47,574 60,246 63,199

163,732 724,906 975,295

Own portfolio 90,495 553,778 443,867 Subject to repurchase agreements 21,777 108,200 398,223

Linked to guarantees 36,761 42,478 93,303 Derivative financial instruments 14,699 20,450 39,902

Interbank accounts 11,526 1,818 4,235

Payment and receipts pending settlement 7,348 - 940 Restricted credits - Deposits with the Brazilian Central Bank 4,178 1,818 3,295

Loans 938,329 809,685 782,771

Loans - private sector 946,807 817,661 789,212 Loans - public sector 28,115 24,559 21,767 (-) Allowance for loan losses (36,593) (32,535) (28,208)

Other receivables 370,540 300,286 337,075 Foreign exchange portfolio 379,886 294,273 324,835 Income receivables 73 90 642

Negotiation and intermediation of securities 3,242 4,401 17,033 Sundry 6,276 14,741 3,708 (-) Allowance for loan losses (18,937) (13,219) (9,143)

Other assets 20,709 49,142 39,775

Other assets 19,976 49,318 40,499 (-) Provision for losses (708) (998) (1,420)

Prepaid expenses 1,441 822 696

Long term 394,523 473,952 518,989

3,465 69 4,083

Linked to guarantees 72 34 36 Derivative financial instruments 3,393 35 4,047

Interbank Accounts - 11,207 10,681

Pledged Deposits - Caixa Economica Federal - 11,207 10,681

Loans 335,111 396,617 427,513

Loans - private sector 356,357 472,449 497,331 Loans - public sector 20,925 7,538 3,479 (-) Allowance for loan losses (42,171) (83,370) (73,297)

Other receivables 53,736 64,437 75,332

Trading and Intermediation of Securities - 40 74 Sundry 53,849 68,667 75,323 (-) Allowance for loan losses (113) (4,270) (65)

Other rights 2,211 1,622 1,380

Prepaid Expenses 2,211 1,622 1,380

Permanent 13,697 13,219 13,104

Investments 1,908 1,686 1,686

Other investments 1,908 1,686 1,686

Property and equipment 11,789 11,533 11,418

Property and equipment in use 2,173 2,173 2,179 Revaluation of property in use 3,538 3,538 3,538 Other property and equipment 12,016 12,290 12,379 (-) Accumulated depreciation (5,938) (6,768) (6,970)

Leasehold Improvements - 300 292

TOTAL ASSETS 2,337,099 2,730,202 3,048,555

Securities and derivative financial instruments

Marketable securities and derivative financial inst ruments

BALANCE SHEET

17/18

R$ '000Liabilities 03/31/2009 12/31/2009 03/31/2010

Current 1,423,103 1,642,127 1,895,649

Deposits 545,876 709,240 725,274 Cash deposits 48,280 39,409 41,707 Interbank deposits 129,166 51,101 42,510 Time deposits 365,900 618,395 640,801 Other 2,530 335 256

Funds obtained in the open market 137,138 365,804 605,650 Own portfolio 21,753 107,885 395,980 Third party portfolio 115,385 257,919 209,670

Funds from securities issued or accepted 14,984 10,559 8,665 Agribusiness Letter of Credit 14,984 10,559 8,665

Interbank accounts 476 - 476 Receipts and payment pending settlement 476 - 476

Interdepartamental accounts 27,652 15,906 9,947 Third party funds in transit 27,652 15,906 9,947

Borrowings 425,836 356,879 389,450 Domestic Borrowings 118,412 - - Foreign borrowings 307,424 356,879 389,450

Onlendings 120,457 65,248 42,074 BNDES 94,328 43,127 19,569 FINAME 26,129 22,121 22,505 Federal Treasure - -

Other liabilities 150,684 118,491 114,113

Social and statutory liabilities 1,237 3,070 2,352 Collection and payment of taxes and similar charges 911 391 818 Foreign exchange portfolio 65,427 25,671 22,164 Taxes and social security contributions 15,982 19,174 2,932 Negotiation and intermediation securities 36,559 29,073 24,155 Derivative financial instruments 19,912 34,946 55,228 Sundry 10,656 6,166 6,464

Long Term 461,938 655,097 721,751

Deposits 237,490 553,392 629,625 - - - Time deposits 237,490 553,392 629,625

Funds from securities issued or accepted 2,703 - - Agribusiness Letter of Credit 2,703 - -

Loan obligations 133,445 20,546 18,984 Foreign loans 133,445 20,546 18,984

Onlending operations - Governmental Bureaus 74,905 77,328 66,663 Federal Treasure - - 19,299 BNDES 16,121 6,911 3,161 FINAME 58,784 44,101 39,621 Other Institutions - 26,316 4,582

Other liabilities 13,395 3,831 6,479 Taxes and social security contributions 12,177 2,904 5,815 Derivative financial instrument 1,213 745 482 Sundry 5 182 182

Future results 166 284 423

Shareholders' Equity 451,892 432,694 430,732 Capital 370,983 370,983 370,983 Capital Reserve 304 779 1,016 Revaluation reserve 2,046 1,995 1,978 Profit reserve 79,870 62,217 63,322 Asset valuation Adjustment 900 100 331 (-) Treasury stock (3,427) (3,380) (6,898)

TOTAL LIABILITIES 2,337,099 2,730,202 3,048,555

18/18

R$ '0001Q09 4Q09 1Q10

Income from Financial Intermediation 117,658 93,254 114,386 Loan operations 73,599 60,703 61,153 Income from securities 23,534 24,926 24,272 Income from derivative financial instruments - - 1,638 Income from foreign exchange transactions 20,525 7,625 27,323

Expenses from Financial Intermediaton 89,277 65,897 79,167 Money market funding 31,857 37,823 38,792 Loans, assignments and onlendings 18,708 6,414 28,923 Income from derivative financial instruments 6,975 5,251 -

Allowance for loan losses 31,737 16,409 11,452

Gross Profit from Financial Instruments 28,38 1 27,357 35,219

Other Operating Income (Expense) (23,014) ( 23,152) (24,429)Income from services rendered 2,744 2,811 2,831 Income from tariffs 162 216 195 Personnel expenses (12,079) (13,756) (12,422)

Other administrative expenses (11,666) (9,369) (9,331)Taxes (3,320) (2,409) (3,188)Other operating income 1,267 4,237 990 Other operating expense (122) (4,882) (3,504)

Operating Profit 5,367 4,205 10,790

Non-Operating Profit 5,303 168 (16)

Earnings before taxes ad profit-sharing 10,670 4,373 10,774

Income tax and social contribution (1,204) 1,901 (947)Income tax (7,675) 3,219 162

Social contribution (4,552) 1,763 97

Deferred fiscal assets 11,023 (3,081) (1,206)Contributions and Equity (1,450) (1,829) (2,482)

Net Profit for the Period 8,016 4,445 7,345

INCOME STATEMENT