10. Operations with Participants

On December 31 2008 and 2007, the Operations with Participants portfolio is demonstrated as follows per Benefit Plan:

a) Simple Loans

The consolidated portfolio increased by R$306,257,000 compared to the previous year. The provision for non-performing debt for the Simple Loan portfolio accounts for 0.6% of the subgroup’s total.

The Net Fund rate for Plano 1 and PREVI Futuro participants is 0.1% per year. For PREVI Futuro Plan participants, the Liquidation per Death Fund (FQM) is 0.1% per year, while the FQM rate for Plano 1 is 1% per year.

b) Mortgages

In 2008, 1896 mortgages were granted, for a total amount of R$230,045,000. PREVI is licensed by the Caixa Econômica Federal (CEF) to allow participants to use the resources in their Government Severance Payment Fund (FGTS) to complement the property’s purchase amount when the mortgage is granted. Mortgages were also opened to PREVI Futuro participants in 2008.

Thirty mortgage contracts were renegotiated and 1,234 liquidations anticipated in the year. Of these liquidations, 68 participants used FGTS funds, for a total of R$3,858,000. Liquidations with the borrowers' own resources totaled R$54,291,000.

The provision for non-performing debt of the Mortgages Portfolio rose to R$1,161,614,000 (R$1,055,811,000 in 2007). This growth resulted, mainly, from the update made to the debt stock based on the respective contractual indices.

Most of the delinquency is related to the 1995 period (VDP – Voluntary Dismissal Program carried out by the Banco do Brasil Sponsor) and corresponds to approximately 95% of the amount of delinquent contracts. The Mortgage Portfolio’s delinquency rate, on 12/31/2008, excluding agreements made between 1989 and 1995 and those renegotiated between 1998 and 2001, is 0.82% in resource volume and 1.61% in amount of agreements.

PREVI has been adopting a series of measures aiming at recovering delinquent credits. Of the 29,601 active agreements, 5316 have installments that are more than 60 days late (position in December/2008). These measures involve administrative and judicial collections.

A taxa do Fundo de Liquidez, para os participantes do Plano 1 e PREVI Futuro, é de 0,1% ao ano. Para os participantes do Plano PREVI Futuro, a taxa do Fundo de Quitação por Morte (FQM) é de 0,1% ao ano, enquanto a taxa de FQM do Plano 1 é de 1% ao ano.