70% of the share capital of BBM is held by the Mariani Group, which is owned by the Mariani Family. The Mariani Group is comprised of three main holding companies targeting different economic sectors:

- financial services,
- agribusiness,
- general manufacturing,
- petrochemicals, and
- technology-related businesses.

Financial markets activities have historically accounted for 80% of the financial results for the Mariani Group as a whole.

The remaining 30% of the share capital of BBM is held by senior management of the Bank.

The proposed IFC investment involves the subscription of a cross-border, local currency-indexed note to be issued by BBM for an amount up to $50 million-equivalent. IFC will hedge the local currency exposure resulting from this investment in the offshore, foreign exchange markets.

50.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	50.0
Equity

* These investment figures are indicative

BBM is headquartered in Rio de Janeiro and has five branches throughout Brazil. Overseas, the Bank has an agency and one subsidiary – BBM Bank Ltd. – in Nassau, and a minority participation in Putnam Investment Services.

BBM has a widely acknowledged expertise in credit operations, particularly involving mid-sized corporate borrowers. Furthermore, the Bank has targeted growth in credit operations as a strategic priority for the next several years. Thus, given the success of BBM’s credit expansion in the recent past, BBM II will play an important role in further broadening BBM’s credit activities involving clients who may not currently have access to adequate funding from large banks or the capital markets.

This project aims to:

- Continue supporting BBM’s credit expansion activities involving mid-sized corporates. As discussed above, BBM’s credit portfolio grew from approximately BRL1 billion in June 2005 to nearly BRL2 billion in June 2006.
- Require BBM to book longer tenor loans to its mid-sized corporate clients. Therefore, as part of the project, BBM will have to on-lend a pre-determined percentage of project proceeds as longer tenor credit.
-Stimulate BBM to provide more credit to smaller corporates than it does at present. The project will attain this objective by requiring that a predetermined percentage of Note proceeds be on-lent to smaller corporates, with no on-lending being allowed for clients having sales greater than a predetermined threshold (as was the case with the Original Credit).

This project has been classified as a Category FI project according to IFC’s Environmental and Social Review Procedure.

During appraisal, IFC will analyze the Bank’s expected portfolio as well as sectors of investment, and determine the Applicable Requirements if any, that would include a combination of:

- The IFC FI Exclusion List;
- The applicable National Environmental and Social Laws and regulations;
- The IFC Performance Standards.

IFC will also review, if required, the capacity of the Bank to manage environmental as well as social risks, and to establish and maintain the SEMS. IFC will suggest Supplemental Actions to address any gaps that are identified.

The Bank will be required to:

- Develop an, or upgrade, if necessary, any existing Social & Environmental Management System (SEMS), prior to disbursement to the satisfaction of IFC;
- Identify responsible, qualified persons to manage and implement the SEMS;
- Commit to implement the SEMS to ensure that its investments/activities are in compliance with the Applicable Requirements;
- To take action to remedy any gaps in SEMS implementation on an ongoing basis;
- Submit a periodic report to IFC as per a format to be provided by IFC.