Banco do Brasil's leadership positions - Página Inicial · Annual Report 2004 Banco do Brasil Banco do Brasil's leadership positions: ... 1945 SUMOC founded ... and prepare the organisation

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Banco do Brasil's leadership positions:

R$ 239.1 billion in Total Assets;

R$ 115.5 billion in Funding;

Loan Portfolio of R$ 88.6 billion, with 18.3% of the market;

US$ 25.9 billion in Export Exchange, with 27.2% of the market;

R$ 124.0 billion in Asset Management, with 19.7% of the market;

22.2 million current account holders;

6.9 million customers registered on the Internet;

14,450 customer service outlets in Brazil;

39,015 automated teller machines;

R$ 24.3 billion in sales from credit and debit cards, with 19.7% of the market.

Global Rating

FitchRatings Rating

Individual C/D

Local Currency - Short-term B

Local Currency - Long-term BB

Foreign Currency - Short-term B

Foreign Currency - Long-term BB-

Standard & Poor's Rating

Local Currency - Long-term BB

Foreign Currency - Long-term BB-

Moody's Rating

Financial Strength E+

Local Currency - Short-term P-2

Local Currency - Long-term Deposits A3

Foreign Currency - Short-term NP

Foreign Currency - Long-term Deposits B2

Foreign Currency - Long-term Debt Ba2

Domestic Rating

FitchRatings Rating

Short-term F1+(bra)

Long-term AA(bra)

Moody's Rating

Short-term BR-1

Long-term Aaa.br

Ratings

Meaningful Information

Banco do Brasil discloses all meaningfulinformation related to its business to the market.

Information can be found at:

• www.cvm.gov.br (link Participantes do Mercado,Companhias Abertas);

• bb.com.br (link Relações com Investidores orEnglish)

The newspapers in which financial statements,material facts and events, and notices toshareholders are published are:• Diário Oficial da União (DF);• Correio Braziliense (DF);• Gazeta Mercantil (SP); and• Jornal of Commercio (RJ);

Conferences Call on PerformanceBB discloses the results of its operations on aquarterly basis and holds conferences call inPortuguese and English to provide detailedinformation on financial figures.Access is available to any interested stakeholdersand information can be obtained via Internet atbb.com.br (link Relações com Investidores orEnglish).

Corporate Information

Banco do BrasilSBS Qd. 1 Bl. C Ed. Sede III 24º andarSetor Bancário Sul, 70073-901 – Brasília, DF bb.com.br portal

Presidency:Phone: 55 (61) 310-2400 Fax: 55 (61) 310-2563

Vice-Presidency for Finance, Capital Markets andInvestor Relations Phone: 55 (61) 310-3406 Fax: 55 (61) 310-2561

Directorate for Employee Relations andSocial-environmental ResponsibilityPhone: 55 (61) 310-4722 Fax: 55 (61) 310-7010

Directorate for Marketing and CommunicationPhone: 55 (61) 310-3502 Fax: 55 (61) 310-2470

Investor Relations DepartmentSBS Qd. 1 Bl. C Ed. Sede III 17º andarSetor Bancário Sul, 70073-901 – Brasília, DFPhone: 55 (61) 310-5920 Fax: 55 (61) 310-3735e-mail: [email protected]

Independent AuditorsPrice WaterhouseCoopers Auditores Independentes

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Strategic Objectives

Creating value for the shareholders: Banco do Brasil's net income of R$3 billion in 2004 resulted in a return on share-holders' equity of 23% and earnings per share of R$ 3.87. In the period, the sum of R$ 954.3 million was distributed toshareholders, in the form of interest-on-equity.

Expanding the customer base and strengthening customer relationships: Banco do Brasil's customer base hadreached a new record of 22.2 million customers by the end of 2004.

Dividends/Interest-on-equity (R$ million)

2000

258

2001

265

2002

579

2003

746

2004

954

3,000

2,000

1,000

Net Income and ROE

2000

974

2001

1,082

2002

2,028

2003

2,381

2004

3,024

1,000

800

600

400

200

12.8 12.9

22.6 22.3 23.0

Net Income (R$ million)

ROE (%)

Composition of the Loan Portfolio (%)

Businesses

Agribusiness

Individuals

Abroad

Dec/03 Total: R$ 77.6 billion Dec/04 Total: R$ 88.6 billion

34.6

17.0

36.212.2

18.1

37.7

33.9

10.2

800

700

600

500

400

300

200

100

Equalization Revenues (R$ million)

2004

403

2003

637

2002

508

2001

412

2000

338

3.4

10

8

6

4

2

Export Support Program (Proex) Leverage (US$ billion)

2004

3.2

2003

4.4

2002

5.5

2001

8.7

2000

8.2

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4

3

2

1

Working Capital to Micro and Small Businesses (BB Giro Rápido)(R$ billion)

1.51.3

0.8

2.7

1808

Prince Regent, D. João, decrees

the founding of Banco do Brasil,

on 12 October 1808.

1819

The Bank finances the

construction of Brazil's first stock

exchange in Rio de Janeiro.

1821

D. João VI and his Court return to

Portugal, withdrawing funds

deposited with the Bank.

1833

End of statutory duration period;

first phase of the Bank is wound up.

1838

Banco Comercial do Rio de

Janeiro is founded under the

leadership of Inácio Ratton.

1853

Mauá's Banco do Brasil merges

with Comercial do Rio de Janeiro,

under the leadership of Viscount

of Itaboraí.

1854

Banco do Brasil holds public

competition for posts in the Bank.

1863

The Bank becomes sole issuer of

currency in Brazil.

1864

Bankruptcy of Casa Bancária A.J.

Alves Souto provokes the largest

financial crisis in Brazil under the

Monarchy.

1941

First branch opened abroad:

in Assumption, Paraguay.

1944

The Bank accompanies

Brazilian troops in Italy, opening

offices in Rome, Naples and

Pistoia.

1945

SUMOC founded – Brazilian

monetary and credit authority, to

exercise control on the currency

and prepare the organisation of

a central bank.

1964

Bank Reform Law phases out

Sumoc and creates Brazilian

Central Bank and the National

Monetary Council.

1960

On the day of the inauguration of

the new capital, 21 April 1960,

the headquarters of the Bank is

transferred to Brasilia.

1866

The Bank stops issuing currency and

becomes an institution for deposits,

discounts and mortgage loans.

1888

Abolition of slavery in Brazil. Bank

introduces the first credit lines for

agriculture.

1893

Merger approved between Banco do

Brasil and Banco da República dos

Estados Unidos do Brasil, forming

Banco da República do Brasil.

1905

The word República is removed from

the name, the Bank once more

becomes known as Banco do Brasil.

Federal Union assumes shareholder

control and the administration of the

Institution.

1851

Irineu Evangelista de Souza,

Baron of Mauá, founds new

institution naming it Banco do

Brasil.

1969

Cheque Ouro launched, the

oldest overdraft facility in the

domestic market.

1967

Bank starts to dedicate energy to

the international market.

1976

The Bank inaugurates its 1000th

branch in the town of Barra do

Bugres in Mato Grosso.

1986

The Bank starts to operate in all

segments of the financial market.

1985

Banco do Brasil Foundation

is created.

1987

Ourocard launched, the first

multiple-use card in the Brazilian

market.

1989

First Banco do Brasil Cultural

Centre inaugurated in Rio de

Janeiro.

1994

Under the Real Plan, the Bank

carries out the largest exchange of

currency that the world has ever

seen.

1995

Management of the Bank is

restructured to deal with the drop in

inflation as a result of the Real Plan.

Voluntary Redundancy Scheme

launched (PDV).

1996

The Bank carries out capital increase

of R$8 billion and issues subscription

bonds.

1998

The Bank receives first ISO 9002

certificate for credit analysis and

opens its Technology Centre, one of

the most modern and well-equipped

in the world.

2000

Expansion on the Internet, with the

launching of portal - bb.com.br

2001

Multiple Bank concept introduced,

aimed at reducing costs, rationalising

processes and optimising tax and

financial management.

2004

Private placing of shares carried out

through a public offering, for the

purchase and cancellation of

subscription bonds still in circulation.

2003

Grouping of shares and subscription

bonds approved. Banco Popular do

Brasil created, with the aim of including

the lower-income population into the

Brazilian banking system.

2002

Adaptation of the Bank's Bylaws to the

Corporate Governance practices

required by the Bovespa's Novo

Mercado, conversion of preferred shares

into ordinary shares.

1937

Industrial and Agricultural Credit

Division raises money through the

placing of bonds and mortgage

bonds in the capital markets and with

the Public Pension Funds.

1936

Creation of the Industrial and

Agricultural Credit Division: destined

to become an important tool in the

Bank's activities.

1926

The headquarters of the Bank is

transferred to the old stock exchange

building in Rio de Janeiro, currently

the Banco do Brasil Cultural Centre,

on Rua Primeiro de Março.

1999

Rio de Janeiro Stock Exchange

awards the Bank with the Mauá Prize,

as best listed company in 1998.

Expanding the market share of loans and financing: Brazil's largest bank in terms of financing for individuals and busi-nesses, agribusiness and Brazilian exports, Banco do Brasil ended 2004 with a balance of R$ 88.6 billion in its loanportfolio. This result consolidated BB's leadership in the granting of credit in Brazil, with a market share of 18.3%.

Acting as an instrument for Public Policy, with prior allocation of funds and adequate remuneration: As an agent of theFederal Government, the Bank receives the difference between the rate charged to the borrower of the loan and the funding,administrative and tax costs and remuneration of capital in order to achieve equalization, when financing agriculture at lowinterest rates. BB also supports Brazilian exports and micro and small businesses, with special credit lines.

Providing high technology services and complementary channels: To maximize ease of use, speed and security, theBank has expanded its network of automated teller machines (ATM), to over 39,000 machines – the largest network inLatin America – and has strengthened various other high technology channels. On the Internet, BB has also assuredanother leadership position, with some 7 million customers registered online.

Strengthening its profile as a socially responsible company: At Banco do Brasil, the personnel management processseeks to attract and retain talent. In 2004, R$ 30.2 million was invested in training and qualification, with 3,311 scholarshipsgranted for university graduate courses, and 3,547 grants for development and postgraduate courses, and 467 grants forforeign language studies. In 2004, BB places special emphasis on its Sustainable Development Strategy program whichhas helped over 16,000 entrepreneurs, aiming to generate employment and income in a sustainable manner.

Credit and Debit Cards Quantity of customers (million)

20.0

15.0

10.0

5.0

2000

12.7

11.8

0.9

2001

13. 8

12.9

0.9

2002

15.4

14.4

1.0

2003

18.8

17.5

1.2

2004

22.2

20.8

1.4

Individuals Sales (R$ billion)

Quantity of credit and debit cards (million)

Businesses

2000

6.7

2001

10.0

2002

13.5

2003

18.1

2004

24.3

3.3 3.84.7 5.3

6.9

20

15

10

5

Transactions per Channel (%)

ATM

Internet transactions by individuals

Internet transactions by businesses

Bank Cashiers

POS

Coban and Others

Dec/03 Dec/04

10.7

51.5

2.3

13.6

5.6

16.3

11.9

50.7

2.26.9

11.6

16.7

Transactions using alternative channels (million)

2000 2001 2002 2003 2004

2.6

4.0

4.8

6.0

6.9

400

300

200

100

Employee Profit sharing (R$ million)

2004

373

2003

273

2002

145

2001

66

2000

60

100

80

60

40

20

Average hours of training per employee

2004

99.4

2003

85.4

2002

80.4

2001

80.0

2000

92.0

Always by your side

Balance Sheet (R$ million) 2000 2001 2002 2003 2004

Total Assets 138,363 165,120 204,595 230,144 239,014

Total Deposits 69,070 73,436 97,253 110,014 115,532

Loan Transactions 35,917 40,225 51,470 65,591 74,823

Shareholders’ Equity 7,965 8,747 9,197 12,172 14,106

Asset Management 47,967 61,438 66,153 102,658 124,021

Income (R$ million)

Gross Income from Financial

Intermediation 4,681 4,869 8,071 10,006 10,463

Service Fees 3,189 3,760 4,454 5,491 6,607

Personnel Expenses (5,623) (5,575) (5,548) (6,812) (7,096)

Net Income 974 1,082 2,028 2,381 3,024

Ratios 2000 2001 2002 2003 2004

Profitability and Productivity

ROE1 –

(Net Income/Shareholders’ Equity) (%) 12.8 12.9 22.6 22.3 23.0

Efficiency – (Administrative

Expenses/Operating Revenues) (%) 80.9 69.2 59.0 56.3 58.2

Coverage – (Service Fees/

Personnel Expenses) (%) 56.7 67.4 80.3 82.5 96.9

Capital Structure

Leverage (x) 17.4 18.9 22.2 18.9 16.9

Basle Ratio (%) 8.8 12.7 12.2 13.7 15.2

Capital Market 2000 2001 2002 2003 2004

Market Capitalization (R$ million) 3,985 7,206 6,696 17,568 25,979

Price / Book Value (x) 0.6 1.0 0.8 1.4 1.8

Dividends / Inter.-on-eqty. paymts (R$ million) 258 265 579 746 954

Book Value per Share (R$) 11.19 12.29 12.40 16.63 17.65

Income per Share (R$) 1.37 1.52 2.77 3.25 3.78

Structural Data 2000 2001 2002 2003 2004

Points of Service (thousand) 7.5 11.0 12.3 13.2 14.5

Automated Teller Machines (thousand) 30.1 32.3 33.6 37.0 39.0

Customers (million) 12.7 13.8 15.4 18.8 22.2

Individuals 11.8 12.9 14.4 17.5 20.8

Businesses 0.9 0.9 1.0 1.2 1.4

Customers registered to carry

Internet transactions 2.6 4.0 4.8 6.0 6.9

Employees and staff (thousand)

Employees 78.2 78.1 78.6 80.6 82.7

Interns 12.3 11.9 9.5 10.2 10.3

Adolescents in training – – 2.8 3.8 4.7

1 Return on shareholders’ equity. Expresses percentage gain earned by the owners of the business.

Banco do Brasil Highlights

Annual ReportBanco do Brasil 2004

Banco do Brasil and the Capital Markets

Banco do Brasil and the Brazilian capital markets are twin brothers. Both were bornin 1808, as a result of a national desire for economic prosperity after three centuriesof colonial lethargy. Since then their paths have been converging and interactive.The Annual Report 2004, inspired by this partnership, gives an account in variousepisodes of the history of Banco do Brasil's contribution to the development of theBrazilian capital markets.

For more than 150 years, Rio de Janeiro was the Country's financial centre. In 1960,the Brazilian capital was transferred to Brasilia and with it, the headquarters ofBanco do Brasil. And from the 80’s, the centre of Brazil's capital markets wastransferred to São Paulo.

Banco do Brasil closely monitored all these changes and maintained itself at theforefront of the Brazilian capital markets, through periods of prosperity, economiccrises and political upheavals. This saga which still remains to be told in its entirety,but one fact seems incontestable: these twin brothers maintain, from 1808 untiltoday, the same philosophy and the same principles which guided their creation– to finance solid national development.

Also in this edition prominence has been given to the progress made on socio-environmental responsibility, which today is present throughout the Company'sbusiness chain. With information, charts, photos and tables, the Report thus providesa better understanding of Banco do Brasil and its achievements – a completebreakdown of the Bank's result during the period, combining accounting andmanagement data in a view of the quarter, is provided in the "Performance Analysis",a document which accompanies and complements this Report.

Theme

10 Dialogues

16 Profile

36 Governance

58 Guidelines

68 Markets

74 Performance

96 Channels

104 Sustainability

140 Values

148 Recognition

Annex Performance Analysis and

Financial Statements

Summary

Pioneering Initiatives

Banco do Brasil was founded on 12 October 1808, and with it, Brazil's capital

markets. By decree of the king, D. João VI, the capital of the institution would

be comprised of 1,200 shares of 1 conto de réis each. The public offering

was aimed at substantial businessmen and wealthy individuals. In the

incipient economy of the time, such an operation encountered serious

difficulties. D. João VI himself made efforts to raise the money.

In January 1809, he sent letters to the governors of the Capitanias,

instructing them to find shareholders for the Bank. Despite all these efforts,

three years later towards the end of 1812, only 126 shares had been

subscribed for. From then onwards, the Crown excelled itself in the

exploitation of vanity and the coveting of interests. With the shares, and

according to the amount purchased, various honours were offered, such

as knighthoods and medals of the Order of Christ. Those in the army who

bought shares, were granted promotion or exemption from service at the

front line.

Finally, in 1817, nine years after its stablishment, the public offering of Banco

do Brasil`s shares was completed with the capital of 1,200 contos de réis.

The public offering of the shares of Banco do Brasil was the first and

certainly the longest of this type of operation in Brazil's capital markets.

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10 Banco do Brasil – Annual Report 2004

Message to Shareholders

Dear Shareholders,

In a scenario where a resumption in economic activity has been accompanied withrelative stability, we have maintained our commitment to make Banco do Brasil evenmore competitive and committed to Brazilian society.

We ended 2004 with a net income of R$3 billion, which has proved Banco doBrasil’s capacity to efficiently perform its role as an agent for public policy, as wellas building value for its shareholders. This result reaffirms Banco do Brasil’sleadership in the competitive Brazilian financial market, while also demonstratingthe success of the Bank’s initiatives, which are contributing towards the sustainabledevelopment of the Country.

We have explicitly incorporated a socio-environmental theme into our general andspecific policies. Throughout last year, we supported the supply of credit in aresponsible way, responding to the challenges of the Federal Government in financingthe Country’s economic and social development, and above all, the programssupporting micro and small businesses, foreign trade and agribusiness in Brazil.

In 2004, more than 660,000 micro and small businesses benefited from lines ofcredit for investment and working capital, while US$3.2 billion in exports wereassisted by the Export Support Program (Proex).

Also, with the use of a type of technology that has no precedent in the globalbanking system and with the support of the Federal Government, Banco do Brasilhas increased the degree of the automation by which loan proposals for familyfarmers are approved and distributed. In the year, we released R$3.7 billion in fundsfor the financing of family farming, making BB the largest onlending agent of fundsto this segment in Brazil.

We have also responded to another challenge of the Federal Government, byfostering the inclusion of Brazil’s informal and lower income population into the

Dialogues

11Banco do Brasil – Annual Report 2004

banking system. To do so, we have invested in our subsidiaries – Banco Popular doBrasil, which has expanded the Bank’s work in the field of microfinance, and BBAdministradora de Consórcios, which has offered yet another option for acquiringconsumer durables and services for our current and potential customers.

We have perfected our business model through the development of new products,and the segmentation through the improvement of our relationship model. And wehave also pursued standards of excellence in staff training and performance.

In our capacity as agent for public government policy, with the knowledge of thecharacteristics of each region of the Country, a wide reach at grass root level anda capacity for flexible action, we have drawn up a business model to generateemployment and income in a sustainable, inclusive and participative manner – theSustainable Regional Development (DRS) strategy.

In short, the results and the initiatives of the Bank shown in 2004, demonstrate itscommitment to its shareholders, customers, employees, as well as to society.Banco do Brasil reaffirms this commitment by guaranteeing efficiency in themanagement of its business, aware of its responsibility as an instrument for theCountry’s social and economic development.

We recognize that these results were built on the trust of our shareholders, ourcustomers and the market, as well as Brazilian society and on the efforts of ouremployees. Accordingly, we thank the whole Banco do Brasil team for its dedicationand zeal over the last year and reaffirm our commitment to making the Bank moreand more efficient.

The Board of Directors


Message from the President

In this edition of the Annual Report, I would like to comment on the significant rolethat Banco do Brasil's plays in the Brazilian economy. We are an efficient marketcompany, and at the same time, an important agent for the Country's development.

We are part of Brazilian history and have always helped in its economic and socialexpansion. That is what makes us stand apart from the rest of the sector: a commitmentto the Country and a pioneering and leadership stance in the banking business.

The market is a great believer in our potential and concrete proof of this can beseen in the fact that the shares of Banco do Brasil (BBAS3) appreciated by 35.4%in the year, outperforming the market as a whole which appreciated by 17.8% in tesame period. The Bank's market capitalization amounted to R$26 billion at the endof 2004, an increase of 47.9% during the year. This performance reflects the Bank'ssolid fundamentals, but we still have room to grow still further.

We have made efforts to promote the inclusion of the lower-income population intothe nation's banking system, making access to credit more widely available. Wehave carried out this using micro-credit, with specific credit lines, and BancoPopular, which today has more than 1 million customers.

We have a strong presence in the lending market, where we are the absoluteleaders, with an emphasis on micro and small companies, the sector of the Brazilianeconomy that generates the most jobs. In financing the agricultural industry, thesector most responsible for economic growth in Brazil, we have contributed to achange in reality in the interior regions of the Country. The financing by Banco doBrasil for Foreign Trade has been fundamental in providing extra impetus forBrazilian exports.

We place strong emphasis on social initiatives, participating in programs such asZero Hunger (Fome Zero) and are implementing a strategy for Sustainable RegionalDevelopment (DRS). We also rely on the work of Fundação Banco do Brasil (Bancodo Brasil Foundation), which every day reaches out to more children, adolescentsand adults with its policies for education, generating jobs and income.


In 2004, our concern about the development of the Country was incorporated intoour Mission Statement: “To be the solution in terms of services and intermediaryfinancing; to meet the expectations of customers and shareholders; to strengthenthe commitment between the employees and the Bank; and to contribute to thedevelopment of the Country”.

With more than 22 million account holders, we are Brazil’s largest bank and one ofits top companies. We have almost two centuries of history and good serviceprovided to the Country. In 2005, we will continue to surprise the market with ourcapacity to renew ourselves day-by-day, building a Banco do Brasil with anincreasingly active presence in our society, offering quality services and products,and contributing increasingly to the development of the Country.

We thank our shareholders and customers for their confidence, as well as ourworkforce of over 82,000 employees, for the results obtained in 2004.

Rossano Maranhão PintoPresident


Prospects

Within the strategic guidelines defined by the Board, in 2005 the Bank will continueworking to:

Guarantee profitability compatible with market standards;Ensure a satisfactory ratio between revenue generation and cost structure;Maintain Governance standards that are a benchmark for the market;Act as a benchmark reference in customer relationships; andExpand the business

We shall continue our strategy of maintaining Banco do Brasil as the Country's mainbank for foreign trade, leading the foreign exchange market for exports. We alsointend to position the Banco do Brasil as one of the main banks operating inBrazilian capital markets and as the main onlender of funds from the BNDES.

We also expect to expand our customer base, as well as increasing the quantity ofproducts per customer. And Banco Popular do Brasil intends to reach the numberof two million current account holders in the period.

Internally, we intend to be the best bank to work for in the Country, with an overallleveI of employee satisfaction of 80% or more. We will be investing in the developmentand training of our employees, seeking to provide 90% of our workforce with at least30 hours of training in the year.

With regard to the Zero Hunger campaign, we shall maintain our focus on socialinclusion, on the strengthening of citizenship values, and on the SustainableRegional Development campaign, so as to foster initiatives that generate employmentand income, as well as supporting voluntary initiatives by our employees in variousongoing projects in the communities we serve.

By working in a socially and environmentally responsible manner, efficiently andprofitably, we believe that we will be contributing towards the integration of all thelinks in our business chain and will be helping Banco do Brasil to fulfill its mission.

We are estimating investment of R$ 1.6 billion in technology, infrastructure andlogistics in 2005. This figure, added to the investments of the last few years, willconfirm Banco do Brasil as one of the most technologically advanced banks in LatinAmerica, with a level of technology in the area of self-service and asset managementthat will be the envy of many countries.


The investments for 2005 provide for an improvement in services and a reduction incosts; greater security in Banco do Brasil’s internal systems; greater speed in datatransmission; and the use of solutions that provide our customers with a differentiatedservice. The main investment projects to be developed in 2005 are:

Full activation of the three Banco do Brasil Call Centers (São Paulo, Curitibaand Salvador);Maintenance of processing, storage and contingency capacity, in order tosupport expansion in the customer base;Full implementation of the new data transmission network – the Multi-ServicesNetwork, which will result in a significant increase in transaction traffic bands,optimizing all the Bank’s levels of communication;Development, improvement and internalization of new service technologiesas mobile banking; andA Datacenter for monitoring business transactions, to bring Banco do Brasilinto line with the New Basle Agreement.

With these undertakings, we hope to consolidate Banco do Brasil as Brazil’s largestbank, ensuring sustainable and growing results, as well as continuing to supportBrazil's social and economic development.

Brazil's First Stock Exchange

In 1819, João VI, decreed the construction of a building to house the Rio de

Janeiro Stock Exchange. Following Iberian tradition, it would be called Praça

do Comércio. The architect Grandjean of Montigny was placed in charge of

the project, being a member of the French artistic mission which had arrived

in the city in 1816.

The site chosen for the new building was in the middle of the financial

district, close to Rua Direita, the economic heart of Rio de Janeiro, in front

of Rua do Sabão, later called the General Chamber, demolished in the

twentieth century to make way for the construction of Avenida Presidente

Vargas. The building, still in existence, is nowadays known as Casa França

– Brasil, near the Banco do Brasil Cultural Centre. Montigny was an expert

in the subject. Some years earlier he had taken part in an architectural

competition in Rome on the theme "A Stock Exchange for a Coastal City".

Translated from the French, the inscription on his drawing leaves no doubt

about the purpose of the building: Stock Exchange Façade, beside Rua de

Sabão. This represented one of Banco do Brasil’s most solid links with the

Nation's then incipient capital markets.

The Bank provided the entire finance for the building of Brazil's first Stock

Exchange. In the balance sheet of 1821, there is an entry referring to the

cost of Praça do Comércio, for 168,356$433, in other words: one hundred

and sixty-eight million, three hundred and fifty six thousand, four hundred

and thirty-three réis.

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A Portrait of Banco do Brasil

Banco do Brasil is the largest bank in Brazil today and was the first to operate in theCountry. Over the 196 years of its existence, Banco do Brasil has ensured itsposition in the financial market, maintained its commitment to fostering nationaldevelopment, adopting standards of corporate governance that are a benchmarkfor the market. It has also built up the identity, knowledge and specialization whichdifferentiate the Bank in its capacity to cater to all segments of Brazil’s financial market.

Banco do Brasil was the fourth bank in the world to issue currency. Its history canbe split into three separate phases: the first began with its creation, in 1808,by D. João VI; the second, in 1851, with its relaunch by Baron Mauá, on whichoccasion the first trade was recorded in Banco do Brasil’s shares, on the Rio deJaneiro Stock Exchange. The third phase of the Bank began in 1892, after its mergerwith Banco da República dos Estados Unidos do Brasil. The shares that originatedfrom this merger started trading on the Rio de Janeiro Stock Exchange in 1906.

The Bank nowadays participates in all the segments of the financial and capitalmarkets. The investments in technology, the training of its staff of over 82,000, andits strategy of market segmentation strategy, have all been fundamental in reaffirmingBanco do Brasil as a flexible, modern and competitive company that aligns its businesswith a commitment to contribute towards the development of the Country.

Aware of its social role of fostering programs, projects and initiatives, Banco do Brasilreaffirms its commitment to the most authentic values of Brazilian society. Thiscommitment is supported by the work of the Banco do Brasil Foundation, createdin 1988, and re-inforced by the upgrading of the Bank’s socio-environmentalresponsibility area to Directorate category in 2004.

Profile


Today, Banco do Brasil has the largest owned branch network in the Country, withover 14,500 branches and customer service outlets, spread over 2,984 towns andcities. Banco do Brasil has a presence in 21 countries and has the largest foreignbranch network of any of Brazil’s banks.

Distribution Network

11.5%

24.8%

19.4%

37.1%

7.1%

Midwest: 1,661 Branches 374 Others 1,287

North: 1,030 Branches 220 Others 810

Northeast: 3,584 Branches 937 Others 2,647

Southeast: 5,366 Branches 1,422 Others 3,944

South: 2,809 Branches 769 Others 2,040

Banco do Brasil has the largest customer service network in

the Country, with more than 14,500 branches and service

outlets in 2,984 towns and cities.


Subsidiaries

BB DTVMBB interest – 100%Manages third party funds through the management of the assets that make up the investment funds and portfolios of Banco do Brasil’s business components.

Cobra TecnologiaBB interest – 99.35%Develops, manufactures, markets, leases, imports and exports digital electronic equipment and systems and associated products.

BB InvestimentosBB interest – 100%Investment bank, which engages in the intermediation and distribution of debts and shares in the market.

BB Corretora de SegurosBB interest – 100%Responsible for marketing insurance products in the ambit of the BB Conglomerate.

Banco Popular do BrasilBB interest – 100%Subsidiary responsible for catering to the lower income population and the informal sector.

BB LeasingBB interest – 100%Commercial leasing transactions for real estate and goods.

BB VienaBB interest – 100%Promotes Brazilian foreign trade in the Central and Eastern European countries.

BB CartõesBB interest – 100%Administration and issue of travelers’ checks and related activities. Activities related to credit cards have been absorbed into BB.

BB ConsórciosBB interest – 100%Administrator of consortium groups of individuals and/or companies for goods purchasing.

Ativos S.A.Interests:BB Investimentos – 74.50% / BAMB – 25.50%Responsible for acquiring and/or managing loans arising from transactions carried out by banks, financing associations and other entities.

BAMB – Brasilian American Merchant BankBB interest – 100%Commercial and investment bank.

BB Leasing CompanyBB interest – 100%International leasing transactions.

BB TurismoBAMB Interest – 99.9%Seeks business opportunities with the objective of stepping up tourism in Brazil.

BB SecuritiesBAMB interest – 100%Responsible for transactions in international capital markets, located in London.

BB Securities LLCBB interest – 100%Responsible for the placing of securities with American institutional investors, the brokerage of fixed income securities and equities, as well as hedging operations.

Brasil Aconselhamento Financeiro e Distribuidora de Títulos e Valores Mobiliários / BAFBB Investimentos interest – 100%Personalized financial consultancy.

Related Companies

In addition to the multiple bank, the Banco do Brasil Group comprises 16subsidiary companies and one under direct management. These companiessupplement the Banco do Brasil’s portfolio of products and services. Through BBInvestimentos, the Bank has strategic partnerships with associated companies,with an equity stake of at least 10% in each one. In addition, it also sponsors threeother entities.


Affiliates

Cia. Brasileira de Meios de Pagamento / VisanetBB Investimentos interest – 31.99%Administrator of the network of establishments affiliated to Visa in Brazil.

Companhia Brasileira de Securitização CibrasecBB Investimentos interest – 10%Offers export credit insurance.

Seguradora Brasileira de Crédito à Exportação / SBCE BB Investimentos interest – 12.088%Securitizes real estate loans, with the aim of implementing and developing the secondary market for real estate receivables.

Brasilcap BB Investimentos interest – 49.99%Works in the capitalization business.

BrasilprevBB Investimentos interest – 49.99%Operates in the open-ended Private pension plan business.

Cia Brasileira de Soluções e Serviços / Visa ValeBB Investimentos interest – 35%Provision of services focused on the area of benefit voucher management in Brazil.

Brasilsaúde BB Investimentos interest – 49.92%Operates in the area of health insurance, its products are marketed through Banco do Brasil.

Aliança do BrasilBB Investimentos interest – 70%Operates in the area of life insurance and other basic insurance lines.

BrasilsegBB Investimentos interest – 70% Invests in the capital of companies whose commercial purpose is directly or indirectly linked to the insurance market.

Brasilseg – Brasil VeículosBrasilseg interest – 100 %Offers automobile insurance.

Under Sponsorship

Under Management

BB Previdência Closed Private Pension Fund Entity.

Caixa de Previdência dos Funcionários do Banco do Brasil / Previ(Banco do Brasil's Employees Pension Fund)

Caixa de Assistência dos Funcionários do Banco do Brasil / Cassi (Banco do Brasil's Employees Health Plan)

Fundação Banco do Brasil (Banco do Brasil Foundation)


Organizational Structure

As part of its ongoing efforts to perfect its system of Corporate Governance, Bancodo Brasil’s organizational structure underwent adjustment in 2004.

In April, new divisional directorship posts were instated for the areas of: Internal Control,Operational Asset Restructuring, and Employee Relations and SocioenvironmentalResponsibility. To this end, the Bank’s focus has increasingly been on improving thetransparency, quality and flexibility of its decision-taking process.

In May, in order to enable the Bank to be more effective in fulfilling its mission ofgenerating results for customers and shareholders, as well as contributing to thedevelopment of the Country, separate divisions were created for the areas of: Microand Small Businesses and Foreign Trade.

In addition, in order to manage the areas covering: the security of property andinformation, the combating money laundering, and the management of unforeseenevents impacting business continuity, in March Banco do Brasil set up its SecurityManagement Unit. In addition to creating new solutions in this area, this movestrengthens the security required in customer dealings with the Bank, through anyone of the available banking channels.


Organizational Structure

Presidency

Vice-presidency of Retail Services and Distribution

Vice-presidency of International Businesses and Wholesale

Vice-presidency of Technology and Logistics

Vice-presidency of Rural and Agro-industrial Businesses and Government Affairs

Vice-presidency of Credit and Risk Management

Vice-presidency of Finance, Capital Markets, and Investor Relations

Vice-presidency of Human Resources and Socioenvironmental Responsibility

Marketing and Communication Directorate

Legal Directorate

Internal Controls Directorate

Executive Secretariat

Strategy and Organization Unit

Accounting Unit

Risk Management Unit

Investor Relations Department

Security Management Unit

Information Technology Unit

Software Development Unit

Distribution and Retail Channels Directorate

Micro and Small Businesses Directorate

Foreign Trade Directorate

Commercial Directorate

International Directorate

Logistics Directorate

Technology Directorate

Government Affairs Directorate

Rural and Agro-industrial Businesses Directorate

Operational Assets Restructuring Directorate

Credit Directorate

Controlling Directorate

Finance Directorate

Capital Markets and Investments Directorate

Employee Relations and Socioenvironmental Responsibility Directorate

Human Resources Directorate

Retail Services Directorate

Supervisory Council

Audit Committee

Internal Audit

General Shareholders Meeting

Board of Directors

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Our Shares and Warrants as an Investment

Shares

In December 2004, Banco do Brasil’s capital amounted to R$9.9 billion, consistingof 810,617,415 ordinary shares, with no nominal value. The largest shareholder isthe National Treasury, with 72.1% of the capital, followed by Previ – Banco doBrasil’s Employees Pension Fund, with 13.9%, and BNDESPar – the corporateinvestment company of Banco Nacional de Desenvolvimento Econômico e Social –which holds 5.8% of the capital. Disregarding the shares that are held in treasury,the other shares – 6.8% – are well spread out in the market.

On January 26, 2004, the grouping of Banco do Brasil’s shares and subscriptionwarrants was carried out, in the proportion of 1000 to 1, in accordance with a Boardof Directors proposal approved at an Extraordinary General Meeting of Shareholders,held on November 12, 2003.

On July 8, 2004, the Bank’s Board of Directors approved the carrying out of a PublicOffer to acquire “B” and “C” Subscription Warrants and a simultaneous PrivateShare Issue, with the objective of acquiring, the warrants still in existence for thepurposes of cancellation.

The result of these operations was the subject of a Notice to Shareholders onNovember 12, 2004. In the Private Share Subscription, a total 66,913,789 ordinaryshares were subscribed for, amounting to R$1.5 billion. 428,120 ordinary shareswere also subscribed for, through the exercising of 410,691 "B" warrants, representingR$8.5 million. The two operations added 67,341,909 shares to the Bank’s capital,representing a dilution of 8.4% on the previous shareholder base, without countingthose shares held in treasury.

The Shareholders’ Extraordinary General Meeting held on December 22, 2004,ratified the increase in the Bank’s capital of R$1,497,964,668. 44, resulting from thecompletion of the operations described above. On December 27, 2004, CentralBank confirmed this ratification.

Capital of R$9.9 billion, 810 million ordinary shares and

273,000 shareholders.


Shareholder Breakdown

The make-up of BB’s capital is characterized by a large quantity of shareholdersthat hold a very small equity stake. Of the shareholder base, 269,445 shareholders(98.7%) account for 1% of the capital, while 3,554 shareholders (1.3%) hold 99% ofthe total shares.

Shareholders by Numbers of Shares Owned

Free Float by Range of Shares Owned

With regard to the tax domicile of investors, the quantity of shareholders resident inBrazil is 272,814 (99.93%), who hold 97.2% of the total shares, while the quantity offoreign shareholders is 185 (0.07%), who hold 2.8% of the shares.

Shareholder % Before* % After*

National Treasury 71.8 72.1

Previ 13.8 13.9

BNDESPar 5.8 5.8

Free Float 7.2 6.8

Private Individuals 3.2 2.9

Corporate Investors 1.3 1.1

Foreign Capital 2.7 2.8

Subtotal 98.5 98.6

Shares in held Treasury 1.5 1.4

Total 100.0 100.0* Breakdown before and after the capital increase.

Range of shares owned Nº % Qty. % Qty.

Shareholders Shareholders Shares Shares

1 to 10 shares 181,604 66.5 651,893 0.1

11 to 50 shares 60,487 22.2 1,369,475 0.2

51 to 100 shares 11,657 4.3 832,543 0.1

101 to 1000 shares 15,697 5.7 4,605,136 0.6

Over 1000 shares 3,554 1.3 803,158,368 99.0

Total 272,999 100.0 810,617,415 100.0

Range of shares owned Nº % Qty. % Qty.


1 to 10 shares 181,604 66.5 651,893 1.2

11 to 50 shares 60,487 22.2 1,369,475 2.5

51 to 100 shares 11,657 4.3 832,543 1.5

101 to 1000 shares 15,697 5.7 4,605,136 8.3

Over 1000 shares 3,551 1.3 47,743,293 86.5

Total 272,996 100.0 55,202,340 100.0


Investors’ Tax Residence

Taking the shares that are spread out in the market (6.8%), that is, the free-float, apredominance of private Individuals can be seen; they hold 42.8% (23.6 million shares)of the total.

The major part of the free float, 68.1% (37.6 million shares), is in the custody of theBrazilian Clearing and Depositary Corporation (CBLC). Of the total of the sharesavailable for trading at CBLC, 60.0% are held by foreign investors.

Equity held by foreign investors

In the last few years, an increase has been seen in the equity interest held by foreigninvestors in the Bank. In 2001, this interest amounted to 1.0%, subsequently falling to0.9% in 2002. Then in 2003, the portion held by these investors increased to 1.6%,with a similar movement taking place in 2004, when the percentage rose to 2.8%.

Nº % Qty. % Qty.


Brazil 272,814 99.93 788,052,164 97.2

Abroad 185 0.07 22,565,251 2.8

Total 272,999 100.0 810,617,415 100.0

Distribution of the free float (%)

Private Individuals

Corporate Investors

Foreign Capital

42.8

16.3

40.9

Private Individuals21.1

Corporate Investors18.9

Foreign Capital60.0

Distribution of the free float at CBLC (%)


It is, though, worth pointing out that the equity held by foreign investors in Banco doBrasil capital is limited to 5.6% at the most. This limitation is because of a legal directive,expressed in Article 52 of the Transitory Constitutional Provisions Act, covering theFederal Constitution of the Federal Republic of Brazil, and represents the participatinginterest of these investors at the time of the drawing-up and publication of theConstitution, in 1988.

According to the provisions of the article in the Constitution referred to, an increasein the percentage of equity interests of private individuals or companies, resident ordomiciled abroad, in financial institutions whose registered office is in Brazil, isforbidden. Accordingly, any alteration will depend on the publication of an instruction,on the initiative of the President of the Federal Republic of Brazil.

Warrants

In 1996, on the occasion of Banco do Brasil’s capital increase, three series of warrantswere issued: A, B, and C, maturing in 2001, 2006, and 2011, respectively. The exerciseprice for these warrants was established at R$8.50, with readjustment according to theIGP-DI. On 31 December 2004, the updated price amounted to R$21,29.

After the Public Offer for the Acquisition of Warrants, which resulted in the acquisitionof 197,187,709 “B” warrants and 328,957,694 “C” warrants, amounting to totaldisbursement of R$1,450,208,125.93c, the subsequent warrant holders’ breakdownbecame as follows:

Breakdown of the Warrant Holders

The warrants in circulation, “B” and “C”, exhibit the following characteristics:

Series “B” and “C” Warrants

In a simulation, after the Public Offer for the Acquisition of Warrants, based on thepremise that there will be no additional capital increases before 2011 and that thetotal amount of “B” and “C” warrants will be exercised on maturity, the expected

% “B” Warrants Quantity % “C” Warrants Quantity

Private Individuals 37.5 5,997,428 40.0 10,811,498

Corporate Investors 37.2 5,949,449 37.9 10,243,895

Foreign Capital 25.3 4,026,265 22.1 5,973,353

Total 100.0 15,993,142 100.0 27,028,746

Exercise Exercise Quotation

Series Code Period Quantity Price R$ in R$

“B” Warrants BBAS 12 03.31 to 06.30.2006 15,993,142 21.09 6.99

“C” Warrants BBAS 13 03.31 to 06.30.2011 27,028,746 21.09 6.70


dilution of BB’s capital, as per the table below, is 5.4%, of which 2.0% arises fromthe exercise of “B” warrants and 3.4% from the exercising of the “C” warrants.

Expected Dilution of the Capital

Conversion: 1 Warrant = 1.043933 shares

Total Capital = 810,617,415

The bases of the Series “B” and “C” Subscription Warrants of BB are characterizedby a large concentration of warrant holders with a small percentage of the total. Forthe “B” warrants: 165,440 warrant holders (99.7%) own 14.2% of the warrants, and517 (0.3%) warrant holders own 85.8% of the total. For the “C” warrants, 215,663warrant holders (99.6%) own 13.1% of the warrants, and 851 warrant holders(0.4%) hold 86.9% of the total.

Warrant Holders by Range of Series “B” Warrants

Warrant Holders by Range of Series “C” Warrants

Nº Warrant % Warrant Qty. “B” % Qty. “B”

Range of “B” Warrants Owned Holders Holders Warrants Warrants

1 to 10 warrants 133,374 80.4 417,502 2.6

11 to 50 warrants 24,139 14.5 522,844 3.3

51 to 100 warrants 3,979 2.4 278,755 1.7

101 to 1000 warrants 3,948 2.4 1,051,709 6.6

Over 1000 warrants 517 0.3 13,722,332 85.8

Total 165,957 100.0 15,993,142 100.0

Nº Warrant % Warrant Qty. “C” % Qty. “C”

Range of “C” Warrants owned Holders Holders Warrants Warrants

1 to 10 warrants 165,620 76.5 532,392 2.0

11 to 50 warrants 37,285 17.2 818,707 3.0

51 to 100 warrants 6,261 2.9 445,728 1.6

101 to 1000 warrants 6,497 3.0 1,753,808 6.5

Over 1000 warrants 851 0.4 23,478,111 86.9

Total 216,514 100.0 27,028,746 100.0

Warrants Qty of Warrants Qty of Shares Dilution of the Capital - %

Series “B” 15,993,142 16,695,750 2.0

Series “C” 27,028,746 28,216,200 3.4

Total 43,021,870 44,911,950 5.4


Performance of the Shares and Warrants

Market

At the beginning of 2004, the climate of pessimism in the world markets led to volatilityin domestic and foreign markets. On the domestic front, the criticisms of economicpolicy had a negative influence on local equity markets. While in international markets,the possibility of an increase in American interest rates and climbing oil prices, pointedto a possible lengthening in the time that emerging market economies would take torecover, causing a degree of market nervousness.

From the end of May onwards, though, a succession of favorable news about thegood performance of the domestic economy changed the market’s mood. The GDPgrowth of 5.3% in the first nine months of the year, the continuation of austerediscipline on fiscal policy, the surplus in the current account of US$ 10.4 billion byNovember and Brazil’s burgeoning trade surplus, combined to make economicagents optimistic.

The stock market ended 2004 as being the financial investment that brought thebest returns for investors in Brazil. Its main indicator, the Bovespa Index (Ibovespa),had reached 26,196 points by the end of the year, representing nominal appreciation of17.8%. The Ibovespa rose almost continuously in the last seven months of the year,a period that was characterized by good performance in the Brazilian economy.

Shares – BBAS3

Comparing the appreciation in the year of BB shares with the Bovespa Index, it canbe seen that the Bank’s shares appreciated 35.4%, while the Bovespa Indexappreciated 17.8%. It is worth pointing out that the Bank’s shares enoyed thesecond highest appreciation in the financial sector and were amongst the 15 bestperformers on the stock market during the year.

Banco do Brasil’s share appreciated by 35.4% while the

Bovespa Index rose by 17.8% being among the top

15 performing shares in the market.


Share of Bovespa Index

In 2004, a gradual reduction was seen in the proportion of shares from the bankingsector in the composition of Ibovespa’s theoretical portfolio. In the case of Bancodo Brasil, its share in the Bovespa Index has seen a drop in the last two years.However, in the first four months of 2005, a slight increase has been seen in theBank’s share of the Index.

The trading volume and number of transactions in the Bank's shares increased bymore than that for the Bovespa Index in 2004, which explains the fact that the Bank'sparticipation in the Bovespa Index remained the same in the four-month period fromJan/05 to Apr/05. The positive results shown over the course of the year and thePublic Offer to acquire the series “B” and “C” Warrants, as well as the simultaneousPrivate Share Issue, have contributed to improving the attractiveness of the Bank’sshares in the stock market.

300

250

200

150

100

50

Banco do Brasil Share vs. Ibovespa Index (%)

Dec/03 Jan/04 Feb/04 Mar/04 Apr/04 May/04 Jun/04 Jul/04 Aug/04 Sep/04 Oct/04 Nov/04 Dec/04

BBAS3 Daily Volume (R$ millions) BBAS3 Ibovespa * Source: Economática

35.4

17.8

2.0

1.5

1.0

0.5

BBAS3 Share in Bovespa Index (%)

1.957

1.672

1.111

11.573 11.66610.460

8.773

Jan/03Apr/03

May/03Aug/03

Sep/03Dec/03

Jan/04Apr/04

May/04Aug/04

Sep/04Dec/04

Jan/05Apr/05

Setor bancário

7.7736.639 6.382

1.353

0.9670.8320.826

BBAS3 * Source: Ibovespa


BB’s market capitalization amounted to R$26 billion at the end of December 2004,compared with R$17.6 billion at the end of the previous year, an increase of 47.9%.The price/book value ratio amounted to 1.84x, compared to 1.44x, while net incomeper share amounted to R$3.78 in the year.

Variation in Number of Trades (%)

26.2

-2.1

Dec/03 Feb/04 Apr/04 Jun/04 Aug/04 Oct/04 Dec/04

50

100

150

200

Ibovespa

BB

Variation in Trade Volume (%)

Dec/03 Feb/04 Apr/04 Jun/04 Aug/04 Oct/04 Dec/04

3.4

-12.2

50

100

150

200

Ibovespa

BB

* Source: Economática


Market Indices

10

8

6

4

2

Price/Earnings 12 months

Mar/03

3.57

Jun/03

4.20

Sep/03

5.00

Dec/03

7.38

Mar/04

6.77

Jun/04

6.05

Sep/04

6.38

Dec/04

8.59

1.2

1.0

0.8

0.6

0.4

0.2

Earnings Per Share (R$)

4Q 04

0.96

3Q 04

1.14

2Q 04

1.10

1Q 04

0.84

4Q 03

0.87

3Q 03

0.91

2Q 03

0.82

1Q 03

0.65

2.0

1.5

1.0

0.5

Price/Book Value

Dec/04

1.84

Sep/04

1.34

Jun/04

1.28

Mar/04

1.34

Dec/03

1.44

Sep/03

1.00

Jun/03

0.88

Mar/03

0.76


20.0

15.0

10.0

5.0

Book Value Per Share (R$)

Dec/04

17.65

Sep/04

18.81

Jun/04

17.57

Mar/04

17.33

Dec/03

16.63

Sep/03

15.97

Jun/03

14.85

Mar/03

13.88

30,000

25,000

20,000

15,000

10,000

5,000

Market Capitalization (R$ millon)

Dec/04

25,979

Sep/04

18,447

Jun/04

16,470

Mar/04

17,041

Dec/03

17,568

Sep/03

11,712

Jun/03

9,582

Mar/03

7,708

2,000

1,500

1,000

500

Free Float Market Value (R$ millon)

Dec/04

1,794

Sep/04

1,339

Jun/04

1,192

Mar/04

1,234

Dec/03

1,272

Sep/03

848

Jun/03

694

Mar/03

558


Warrants – BBAS12 and BBAS13

The operation to purchase the series “B” and “C” warrants affected the performanceof this paper, which ended the year up 134.6% for the “B” Warrants and up 157.7%for the “C” Warrants.

600

500

400

300

200

100

Shareholder Remunerations in Dividendsor Interest-on-Equity (R$ millon)

2H041H04

504

2H03

450

1H03

424

322

2H02

272

2.0

1.5

1.0

0.5

Net Earnings (R$ millon)

2H041H04

1,604

2H03

1,421

1H03

1,302

1,079

2H02

1,205

35

30

25

20

15

10

5

Payout Ratio (%)

2H041H04

31.4

2H03

31.7

1H03

32.529.8

2H02

22.6

8

7

6

5

4

3

2

1

Dividend Yield * (%)

2H041H04

3.7

2H03

4.6

1H03

3.5

6.2

2H02

7.0

* Dividends/Interest-on-equity payments in the last 2 half-years

300

250

200

150

100

“B” and “C” Warrants (%)

Dec/03 Jan/04 Feb/04 Mar/04 Apr/04 May/04 Jun/04 Jul/04 Aug/04 Sep/04 Oct/04 Nov/04 Dec/04

"B" warrants volume (R$ millon)

"C" warrants volume (R$ millon)

Warrants "B"

Warrants "C"

* Source: Economática

157.7

134.6


Shareholders’ Remuneration

Shareholders are guaranteed the half-yearly receipt of a minimum mandatorydividend equivalent to 25% (twenty five per cent) of adjusted net income, as definedby law (Corporation Law art. 202; Decree nº 2673/98) and in Banco do Brasil’s bylaws.Under the legislation, the Bank may authorize the payment of interest-on-equity toshareholders, as well as allocating this amount to the minimum mandatory dividend(Law 9249, art. 9; Decree nº 2673/98)

The remuneration of Banco do Brasil’s shareholders has grown significantly in thelast few years, as can be seen in the chart below.


2001

265

2002

579

2003

746

2004

954

2000

258

1,000

800

600

400

200

A New Phase

Banco do Brasil, founded in 1808, was severely depleted by the large

amounts of cash withdrawn by the Portuguese Court on its way back to

Lisbon, as well as administrative irregularities and financial disorder during

the First Reign. At the end of its duration term, which had been fixed at 20

years, the Bank was finally liquidated in 1833, in the face of heavy political

opposition. 18 years later, in 1851, the business tycoon Irineu Evangelista

de Souza, Baron and Viscount of Mauá, founded a new financial institution

which was duly named Banco do Brasil. As before, the Bank was founded

on the basis of a public share offering.

And in that revival, there were a number of symbolic events which reflected

Banco do Brasil's permanent links with the capital markets. The preparatory

meetings and the special shareholders meeting held for the incorporation of

the Bank, both took place in the conference room of Rio de Janeiro Stock

Exchange, located in the second Praça do Comércio, in the old Rua Direita,

nowadays Primeiro de Março. In 1853, Mauá’s Banco do Brasil would merge

with the Commercial Bank of Rio de Janeiro, as a result of a legislative

decision headed by the Viscount of Itaboraí, considered to be the founding

father of today's Bank.

That merger resulted in an increase in the Bank's capital to 30 thousand réis.

The shareholders in the merging banks received 53% of the capital, while the

remaining 47% was sold to the public in the capital, Rio de Janeiro, and

the provinces. The public share offering was a great success. In Rio de

Janeiro alone, 719 shareholders subscribed for the issue.

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Corporate Governance

Governance

As part of its corporate strategy, Banco do Brasil has as a target of adoptingthe standards of Corporate Governance that are a benchmark for the market. ItsBylaws include practices that guarantee equality of rights among shareholders,as well as transparency and accountability of the business.

Among the commitments taken on and incorporated into its Bylaws, it is part ofthe Bank's routine procedures to hold at least one presentation a year for marketanalysts; to release information on the Internet; to publish financial statementsin English; and to adopt a unified mandate of one year for members of the Boardof Directors and the Supervisory Council.

BB's management bodies are: the Board of Directors, advised by the Audit Committee,and the Executive Board, made up of the Board of Officers (President and Vice-Presidents) and the other Executive Directors. The Bank also maintains a SupervisoryCouncil on a full-time basis.

All decisions, at any and every level of the Bank, are taken collectively, withoutany individual levels of authority. With the aim of involving all the executives inthe drawing up of strategies and in the approval of proposals for the differentbusinesses of the Bank, the Board of Directors has created Committees,Subcommittees and Commissions at strategic levels, which guarantee flexibility,quality and safety in the taking of decisions at Banco do Brasil.


Management

The Board of Directors is responsible for overall guidance of the business ofBanco do Brasil. As set out in the Bylaws, the Board of Directors has sevenmembers, with a unified mandate of one year, with re-election permitted. Of theseven members, three are appointed by the minority shareholders, and the othersby the majority shareholder.

Of the seats nominated by minority shareholders, one is reserved for a representativeof the employees, appointed by Investment Clubs that hold at least 3% of the votingcapital. Previ is the largest minority shareholder, and answers for the appointment of theboard members who occupy the seats of the minority shareholders. In 2004, the Boardmet 15 times: at 12 ordinary meetings and 3 extraordinary meetings.

None of the members of the Board has a significant shareholding in the Bank, andonly the Vice-President of the Board of Directors has a parallel executive function,as President of the Board of Officers. Decisions on policies, corporate strategies,

Committees and Commissions

Credit Risk

Credit Limit Operations Operation Management and Cost Rationalization

Communication

Economic and Financial Scenario

Assisgment of Employees to External Entities

ResourcesAdministrativeInquirySolution

Global Risk

Prevention of Ilegal Financial Foreign Exchange Acts

Assets and Liabilities Management

Operational Risk

Committees

Subcommittees

Commissions

Supervisory Council Audit Committee

Operations Intranet Internet

Businesses

Information Security

Rationalization of Processes and Costs

Board of Directors

Board of Officers

General ShareholdresMeeting


general business plans, master plans and the overall budget must always besupported by the favourable vote of at least five members of the Board, whichmeans that at least one representative of the minority shareholders has to bein agreement.

The members of the Board of Directors for the 2004/2005 mandate were electedat an Ordinary General Meeting (OGM) held on April 27, 2004. On the same date, atan Extraordinary General Meeting (EGM), the shareholders elected the members ofthe Audit Committee, created by the EGM of November 12, 2003, to advise theBoard of Directors on its auditing and supervisory functions.

Until November 16, 2004, the Vice-President of the Board of Directors was CássioCasseb Lima, appointed by the Ministry of Finance, who at the same time occupiedthe position of President of Banco do Brasil. Subsequently Rossano Maranhão Pintowas appointed to temporarily take up both positions; he is a career employee of Bancodo Brasil, and is also Vice-President for International Businesses and Wholesale.

Directors

Board of Directors

Bernard Appy President of the Board of Directors, a representative of the Union,appointed by the Minister of State for Finance, he is the Executive Secretary of theMinistry of Finance. An economist and a professor from the Economics Departmentof the Faculty of Economics, Administration and Accountancy and Actuarial Studiesat PUC-SP, he was previously a consultant in economics and has held severalteaching posts, including that of university professor and researcher.

Cássio Casseb Lima Was Vice-President of the Board of Directors and President ofBanco do Brasil until November 2004, representing the Union, appointed by theMinister of States for Finance. He has worked at several financial institutions,including Banco de Boston, Banco Francês & Brasileiro (Credit Lyonnais) andCitibank. He was president of Credicard S.A. Graduated in Production Engineering.

Rossano Maranhão Pinto Interim Vice-President of the Board of Directors and interimPresident of Banco do Brasil since November 2004, a representative of the Union,appointed by the Minister of State for Finance. A BB employee since 1976, he is alsoVice-President for International Businesses and Wholesale. He was also formerlyDirector of the International and Commercial Areas, among other posts held at theBank. An economist, he has a master's degree in Economic Sciences from theUniversity of Illinois (USA), a master's degree in Political Economics from the Universityof Brasilia, and a postgraduate degree in Financial Management.


Carlos Augusto Vidotto A member appointed by the minority shareholders, he is aprofessor from the Economics Department of the Fluminense Federal University (UFF).As well as being a university professor, he was formerly an employee of UNCTAD/UNand a Consultant to the Public Sector Economics Institute (IESP/FUNDAP), in the SãoPaulo State Government. He holds a master's degree and a doctorate in economics.

Francisco Augusto da Costa e Silva A member appointed by the minority shareholders,he is an attorney and a partner in a law firm. A BNDES career employee, he hasoccupied, amongst others, the positions of Legal Advisor to Embramec and the LegalSuperintendent of BNDESPAR. Besides being a university professor and lecturer, hehas presided over the Council of Securities Regulators (COSRA) and was a member ofthe Executive Committee of the International Organization of Securities Commissions(IOSCO). He was formerly a Director and President of the Brazilian SecuritiesCommission (CVM). He holds an Executive MBA from COPPEAD (UFRJ).

João Carlos Ferraz A member appointed by the minority shareholders, he is the Directorof the Business and Productive Development Division of the Economic Commission forLatin America and the Caribbean – Cepal/UN, Santiago Chile. He was formerly aresearcher and a university professor. An economist and a journalist, he specialized inEconomics and Political Sciences and in Social Studies for the Ibero-American Region.He has a doctorate in Scientific and Technological Policy, as well as Economics.

José Carlos Rocha Miranda A member appointed by the Minister of Planning, Budgetand Management. He was formerly a professor at the Economics Institute of the FederalUniversity of Rio de Janeiro (UFRJ) and of the State University of Campinas(UNICAMP), and a researcher with the Economic Commission for Latin America and theCaribbean (Cepal/UN, Santiago, Chile). He has a masters degree and a doctorate inEconomics.

Tarcísio José Massote de Godoy A member appointed by the Minister of Finance, heis the General Coordinator for the Assumption and Restructuring of the Liabilities ofthe National Treasury Secretariat. He has graduate and postgraduate qualifications inCivil Engineering, with a specialization in Geotechny.

Supervision and Control

The Supervisory Council, a body that controls and supervises managementactions, is made up of five members, three of whom are elected by minorityshareholders. The Council meets, ordinarily, once a month, and, extraordinarily,whenever summoned by any one of its members or by the Bank's Board of Directors.


Supervisory Council Members

Alon Feuerwerker A representative of the Union, he is second in command ofParliamentary Affairs of the Secretariat for Political Coordination and InstitutionalAffairs of the Presidency of the Republic. He has worked in the areas of journalismand communication, and has been an editor for Politics, Economics, Opinion andSports of specialized magazines and of the newspaper Folha de São Paulo.

Artemio Bertholini A member appointed by the minority shareholders, he has beena partner-director of an Audit, Consultancy, Assessments, and Business Trainingcompany since 1978. He has worked as a clerk in BB, and was formerly an AuditManager with Arthur Andersen & C°. He has a master's degree in AccountingSciences and Finances.

Marcus Pereira Aucélio A representative of the Union, appointed by the Minister ofState for Finance, he is the Secretary-General of Public Debt Administration of theNational Treasury Secretariat, where he occupied several positions. He was President ofthe Supervisory Council at Banespa, and he has worked as an engineer with severalcompanies in the sector. A graduate in Forestry Engineering, he has postgraduatequalifications in Public Sector Economics and an Executive MBA in Finance.

Rodrigo Pirajá Wienskosk A representative of the Union, appointed by the Minister ofState for Finance, he is the Deputy Attorney-General of the National Treasury, where hehas occupied various positions. A Bachelor of Law, he has an MBA in Economic Lawand Company Law.

Vicente de Paulo Barros Pegoraro Appointed by the minority shareholders, he iscurrently a representative of Previ on Boards of Directors and Supervisory Councils.He is a retired employee of BB, where he occupied several positions. Graduated inLaw, Business Management, Economics, Accountancy and Literature, he has aspecialization in Systems Analysis, Information Technology and Accountancy, andpostgraduate qualifications for the College of Magistrature and the Federal DistrictAttorney-General's Office College.

The Bank's audit and supervisory system, in addition to the Supervisory Council,is made up of the Audit Committee, and independent audit and internal audit, astatutory body that reports directly to the Board of Directors. BB is also subject tothe supervision of the Brazilian Central Bank and the Federal Audit Court.


Business Management

Business management is handled by the Executive Board, made up of the Board ofOfficers – comprising its President and seven Vice-Presidents, and by 20 statutorydirectors, BB career employees. The management system can, also count on theadvice of internal audit.

The Executive Board is responsible for complying with the Bank's Bylaws and withthe deliberations of the Shareholders' General Meeting and of the Board of Directors;And, among other assignments: executing the policies, the corporate strategies, thegeneral business plan, the master plan and the overall budget of the Bank, alwaysobserving the principles of good banking technique and the procedures of goodCorporate Governance.

Executive Board

Board of Officers

Cássio Casseb Lima Was Vice-President of the Board of Directors and President ofBanco do Brasil until November 2004, representing the Union, appointed by theMinister of States for Finance. He has worked in several financial institutions, includingBanco de Boston, Banco Francês & Brasileiro (Credit Lyonnais) and Citibank. He waspresident of Credicard S.A. Graduated in Production Engineering.

Rossano Maranhão Pinto Interim Vice-President of the Board of Directors andinterim President of Banco do Brasil since November 2004, a representative of theUnion, appointed by the Minister of State for Finance. A BB employee since 1976,he is also Vice-President for International Businesses and Wholesale. He was alsoformerly Director of the International and Commercial Areas, among other postsheld at the Bank. An economist, he has a master's degree in Economic Sciencesfrom the University of Illinois (USA), a master's degree in Political Economics fromthe University of Brasilia, and a postgraduate degree in Financial Management.

Adézio de Almeida Lima Vice-President for Credit, Controlling and Risk Management. AtBB, besides managing branches, he was Deputy Superintendent of the MG Super Stateand Regional Superintendent in Curitiba. He was formerly a member of the Board ofDirectors of La Fonte Telecom S.A. A graduate in Economic Sciences and Mathematics,he has an MBA in Financial Management, General Management and in Marketing.

Antônio Francisco de Lima Neto Interim Vice-President for International Businessand Wholesale Banking. He also occupies the positions of Managing Director of BBLeasing S.A., Counselor of BB Securities Ltd. and Regional Director of the BrazilianAssociation of Leasing Companies. He was State Superintendent in Tocantins (TO),


Regional Superintendent in Belo Horizonte, and a Member of the SEBRAE Councilat national level. A graduate in Economic Sciences, he has an MBA in GeneralManagement and Marketing.

Edson Machado Monteiro Vice-President for Retail and Distribution of BB, where hehas occupied several positions. He has previously been Interim President, ExecutiveDirector, Non-executive Director and Member of the Supervisory Council at Previ;Director of Audit with Telemar and a member of the Board of Directors of BrasilSaúde;besides representing BB on several Boards of Directors. He is a graduate in Economicsand Economic Engineering, and has an International Businesses Executive MBA.

José Luiz de Cerqueira César Vice-President for Technology and Logistics. He wasformerly Director of Technology and Systems of Unibanco and the BM&F; Directorof Business and Technology of Open Commerce; Superintendent of InformationTechnology at Tecnologia Bancária. He has also worked with Banco do Nordeste,Itaú and Itautec. He is graduated in Electronic Engineering.

Luiz Eduardo Franco de Abreu Vice-President for Finance, Capital Markets andInvestor Relations. He was a member of the Supervisory Council of Itaúsa –Investimentos Itaú, Director-President and President of the Board of Directors ofBanco de Brasília (BRB), and Director of Operations of Pacific do Brasil ComércioExterior Ltda. He has a master's degree in Business Management, from DukeUniversity, (USA), and has a specialization in Finance.

Luiz Oswaldo Sant’Iago Moreira de Souza Vice-President for Personnel Managementand Socio-environmental Responsibility. He was a member of the Board of Directorsand Supervisory Council of the Academy of Literature and of BB; a member ofPrevi's Supervisory Council; a professor of the FECLESC/UECE Faculty; and amember of the Board of Directors of the electric power company of the Rio Grandedo Norte State (COSERN). A graduate in Pedagogy and Philosophy, he has amaster's degree in Education.

Ricardo Alves da Conceição Vice-President for Agribusiness and Government. In BB,amongst other positions that he has occupied, he was formerly the Director of RuralBusiness, Agro-industries and also with the Government. He occupied several positionsat the Ministry of Finance, he was executive secretary of the Ministry of Agriculture,Interim Minister of Agriculture, and Head of the Minimum Prices Division, in theTechnical-Rural Norms and Affairs. He graduated in Economic Sciences and Literature.

Aldo Luiz Mendes Managing Director for Capital Markets and Investment. In BB,amongst other positions that he has occupied, he was Executive Manager, advisorto the Presidency and Assistant, Supervisor and Advisor of the Financial Analysisand Costs Department. He holds a master's and doctor's degree in Economics.


Augusto Braúna Pinheiro Managing Director for International Businesses. He wasGeneral Manager and Deputy Manager of BB abroad, as well as a member of theSupervisory Council of BB Vienna. Graduated in Civil Engineering, he has an MBAin General Management for Senior Executives.

Derci Alcântara Managing Director for Agribusiness. Besides being Manager of BBbranches, he was formerly State and Regional Superintendent. He has also been aboard member for companies like RGE, Valepar and Telemar. With a graduate andmaster's degree in Business Management, he has an MBA in Finance and CapitalMarkets, and Executive MBA in Management, and an APG-Amana InternationalMBA, with a specialization in International Relations.

Henrique Pizzolato Managing Director for Marketing and Communication. Amongstother positions, he was formerly a member of the Board of Directors of BB and ofother companies; Director of External and Parliamentary Relations of ANABB(National Association of BB Employees); Director of Insurance of Previ, andAdministrative Director of the BB Employees' Investment Club. A bachelor inArchitecture and Urbanism.

Izabela Campos Alcântara Lemos Managing Director for Employee Relations andSocio-environmental Responsibility. In BB, amongst other posts that she has occupied,she was formerly Advisor to the Vice-Presidency for Personnel Management and Socio-environmental Responsibility. Graduated in Administration, she has an MBA inMarketing and Organizational Communication Management.

João Carlos de Mattos Managing Director for Government Affairs, he has over 20years of administrative experience in BB, including being a State and CommercialSuperintendent. With a Full Baccalaureate in Mathematics, he has an MBA in BasicGeneral Management for Senior Executives and an APG – Amana International MBAand Corporate Governance MBA from São Paulo University (USP).

José Carlos Soares Managing Director for Micro and Small Businesses. Amongstother positions he has occupied in BB, he was formerly a Manager of branchesand a State Superintendent. Graduated in Accounting Sciences, he has post-graduate qualifications in Accounting Theory, an Executive Management MBA,and an International Executive APG-Amana MBA.

José Gilberto Jaloretto Controlling Managing Director. He was Deputy Manager ofBB's Branch in Paris (France), Executive Manager and Divisional Manager in theInternational Area. He was also Advisor to the Presidency and Internal Auditor.A member of Boards of Directors in Brazil and in France, he was a professor at theGetúlio Vargas Foundation (FGV) and University of Brasília (UnB). He holds adoctorate and a master's degree in Accountancy.


José Maria Rabelo Managing Director for Foreign Trade. A member of the Board ofDirectors of La Fonte Telecom and of Ativos S/A. He was Executive Superintendent ofthe Credit Unit and of the Business Unit in São Paulo, besides acting as a member ofBoards of Directors and Fiscal Councils, including the Deliberative Council of SEBRAEand FEBRABAN's Risk Commission. A bachelor in Law, he has an MBA in Basic GeneralManagement for Senior Executives and an APG – Amana International MBA.

Juraci Masiero Managing Director for Human Resources. He was formerly on theCouncils of Previ and Cassi, and was a Director of the Banco do Estado do RioGrande do Sul (BANRISUL), besides being a Supervisory Council Member of FRAS-LE. Graduated in Legal and Social Sciences.

Luiz Carlos Silva de Azevedo Interim Commercial Managing Director. Participates,as a BB representative, in FEBRABAN and on the Supervisory Council of VISANETand, as a representative of Previ, in Eluma. Besides being a Manager of BBbranches, he was Regional Superintendent and Executive Manager of theCommercial Directorate. An economist, has an MBA in General Management forSenior Executives.

Luiz Gustavo Braz Lage Managing Director for Credit. Amongst other positions thathe has occupied in BB, he was formerly Divisional Manager and Executive Managerin the Credit and Commercial Directorates. A bachelor in Accounting Sciences andin Business Management, he has an Executive Finances MBA and an MBA inInternational Business.

Manoel Gimenes Ruy Managing Director for Technology. He is a member of theBoard of Directors of La Fonte Telecom. Amongst other posts that he has occupiedin BB, he has been Advisor to the Presidency, Head of Department and in theCabinet. He has worked in other companies of the Conglomerate and in otherfinancial institutions. With graduate and postgraduate qualifications in the Vernacularand in French, he has postgraduate qualifications in Organization, Systems andMethods, and a specialization in Literary Theory.

Miguel Oscar Viana Peixoto Managing Legal Director. He was BB's CorporateEducator and a Member of the Tribunal of Ethics and Discipline, of the Brazilian BarAssociation/CE, as well as a professor and lecturer. Graduated in Law, he has anMBA in Administration.

Murilo Castellano Managing Director for Internal Controls. In BB, he has worked inComptrollership, Credit, and Audit. He is a professor at the Getúlio Vargas Foundation.Graduated in Civil Engineering, he has a master's degree in System Engineering andComputing and has an MBA in Risks, with a specialization in Finance.


Paulo César Simplício da Silva Managing Director for Distribution and Retail Channels.He is currently a member of the Supervisory Council of INEPAR, and has sat on theSupervisory Council of various other companies. He was State Superintendent inSão Paulo and Rio Grande do Norte, as well as being a manager of BB branches.He graduated in Business Management and has an MBA in Finance and GeneralManagement for Senior Executives, and an MBA in Marketing.

Paulo Euclides Bonzanini Managing Director for Retail. He was Commercial, Stateand Regional Superintendent, as well as being a manager of BB branches in thestate of São Paulo. He graduated in Business Management and AccountingSciences, and has an MBA in General Management for Senior Executives.

Paulo Rogério Caffarelli Managing Director for Logistics. He was formerly anExecutive Manager in the Directorate of Distribution, amongst other positions thathe occupied in BB and in Previ, besides participating as a member of Boards ofDirectors and Supervisory Councils. He graduated in Law and has a master's degreein Economic Business Management, and postgraduate qualifications in ForeignTrade, Law in International Trade, and an MBA in Corporate Law and Finance.

Ricardo José da Costa Flores Managing Director for Operational Asset Restructuring.Amongst the various roles that he has carried out in BB, he has occupied the posts ofManager and Executive Superintendent in the areas of Credit and Operational AssetRestructuring. He has also acted as a representative of BB and Previ on SupervisoryCouncils and with FEBRABAN. He graduated in Economics, has an MBA inComptrollership, and a specialization in Analysis and Drawing Up of Projects.

William Bezerra Cavalcante Filho Finance Managing Director. Besides other posts hehas held at BB, he was formerly BBDTVM's Asset Management Manager and FinancialOperations Manager in the Finance Directorate. He has also been a representative ofthe Bank on several Boards of Directors. He graduated in Economic Sciences, has anExecutive MBA in Finance and General Management for Senior Executives (FGV).

Policies for Disclosure and Trading

Since 2002, BB has a Policy for Disclosure of Material Facts or Acts that governs thetreatment of privileged information for the entire Group. For BB, implementation of thispolicy is more than just meeting a requirement of the Brazilian Securities Comission (CVM);it demonstrates the Bank's respect for investors, as well as its commitment to transparency.BB has also adopted a policy for trading in its securities by people who the Bank considerssubject to self-regulation, even though the CVM only suggests this practice.

Both policies are available to the market on the CVM's website www.cvm.gov.br andBB's website bb.com.br, through the link to Investor Relations.


In addition to these policies, the Bank has also had a broad and effective self-regulation system since the introduction of CVM Instruction 31/84, throughwhich it regulates and controls the disclosure of price-sensitive information andtrading of the Bank's securities by employees and management. All rules andprocedures are included in the Instruction Code Book (LIC) to which all employeesof the Bank have access. According to these instructions, all employees andservice providers that have access to price-sensitive information, regardless of theirposition, are required to follow self-regulation guidelines. At the end of 2004, the listof self-regulated individuals at BB's headquarters included over six thousandemployees and managers.

As recommended by the CVM and required by internal guidelines for self governance,members of the Board of Directors, of the Supervisory Council, and of theExecutive Board immediately inform the appropriate department of the quantity andcharacteristics of securities issued by the Bank when these come into their possession,as well as their plans for the trading of these, as shown in the table below. Tradesactually made involving BB securities are communicated to the Bank and the CVMon a monthly basis.

The members of the Board of Directors, Supervisory Council and Executive Boardand their corresponding equity stake are shown below.

Board of Directors Ordinary Shares “B” Warrants “ C” Warrants

12.31.04 12.31.03 12.31.04 12.31.03 12.31.04 12.31.03

Bernard Appy 01 1,000 – – – –

Rossano Maranhão Pinto 01 – – – – –

Carlos Augusto Vidotto 02 1,001 – – – –

Francisco Augusto da Costa e Silva 02 1,002 – – – –

João Carlos Ferraz 02 1,001 – – – –

José Carlos Rocha Miranda 01 1,000 – – – –

Tarcísio José Massote de Godoy 01 1,000 – – – –

Supervisory Council Ordinary Shares “B” Warrants “C” Warrants

12.31.04 12.31.03 12.31.04 12.31.03 12.31.04 12.31.03

Marcus Pereira Aucélio – – – – – –

Alon Feuerwerker – – – – – –

Rodrigo Pirajá Wienskoski – – – – – –

Artemio Bertholini – – – – – –

Vicente de Paulo Barros Pegoraro 1 1,232 – 336 – 560


Board of Officers Ordinary Shares “B” Warrants “C” Warrants

12.31.04 12.31.03 12.31.04 12.31.03 12.31.04 12.31.03

Rossano Maranhão Pinto 1 – – – – –

Adézio de Almeida Lima 2 2,464 – 769 1 1,233

Antônio Francisco de Lima Neto – – – – – –

Edson Machado Monteiro 57 57,876 17 17,362 28 28,939

José Luiz de Cerqueira César – – – – – –

Luiz Eduardo Franco de Abreu 1 1,000 – – – –

Luiz Oswaldo Sant’Iago

Moreira de Souza 2 2,544 – 748 1 1,249

Ricardo Alves da Conceição 371 371,463 111 111,253 185 185,424

Statutory Directors Ordinary Shares “B” Warrants “C” Warrants

12.31.04 12.31.03 12.31.04 12.31.03 12.31.04 12.31.03

Aldo Luiz Mendes – – – – – –

Augusto Braúna Pinheiro – – – – – –

Derci Alcântara 33 33,676 9 9,806 16 16,345

Henrique Pizzolato 26 26,537 7 7,714 12 12,858

Izabela Campos Alcântara Lemos – – – – – –

João Carlos de Mattos – – – – – –

José Carlos Soares 219 218,080 6 5,425 10 9,044

José Gilberto Jaloretto – – – – – –

José Maria Rabelo 20 20,000 6 6,000 10 10,000

Juraci Masiero – – – – – –

Luiz Carlos Silva de Azevedo – – – – – –

Luiz Gustavo Braz Lage – – – – – –

Manoel Gimenes Ruy 14 14,267 4 4,192 6 6,988

Miguel Oscar Viana Peixoto – – – – – –

Murilo Castellano 3 3,177 – 921 1 1,537

Paulo César Simplício da Silva 29 29,044 8 8,568 14 14,281

Paulo Euclides Bonzanini – – – – – –

Paulo Rogério Caffarelli – 898 – 245 – 409

Ricardo José da Costa Flores 19 19,564 5 5,673 9 9,457

William Bezerra Cavalcanti Filho – – – – – –

Statutory Body – Audit

José Luis Salinas – – – – – –

Corporate Events – 2004


Event Subject Date

OGM/EGMAlterations to the Bylaws;

election of members of the

Board of Directors, of the

Supervisory Council, and

of the Audit Committee;

capital increase

04/27; and 12/22

Release of the results –

press conference

Presentation of the quarterly

results and performance

analysis

02/17;05/17;

08/17; and 11/25

Meeting with Analysts and

Investors – Abamec,

Animec and Apimec



analysis. The highlight was

National Encounter

with Investors I, held

in São Paulo

03/29; 03/31; 06/01; 06/07;

10/18; 10/21; 10/25; 10/27;

10/28; and 12/06

Reverse stock split –

Notice to Shareholders

Reverse stock split of

ordinary shares (BBAS3)

and subscription warrants

(BBAS12 and BBAS13), in

the proportion of 1000:1

01/26

Public Offer for Acquiring

warrants and share

subscription –

Notice to Shareholders

Public offer for acquiring

series “B” (BBAS12) and

“C” (BBAS13) warrants,

share subscriptions, and

exercise of “B” warrants

07/08; and 11/12

Payment of Dividends /

Interest-on-equity

payments

2nd half/03 – R$423,794,000;

1st half/04 – R$449,958,000;

2nd half/04 – R$504,308,000

03/01

08/30

12/30/04 and 02/28/05


Publication of the

Financial Statements

Disclosure of the financial

statements in large

circulation newspapers:

Diário Oficial da União,

Correio Braziliense, Jornal

do Commercio and Gazeta

Mercantil

02/18 and 08/18

Meetings of the Board of

Directors

Ratification of the decisions

of the Board of Officers

and approval of the matters

of its competence, as set

out in Brazilian Corporate

Law and in BB's Bylaws

01/12; 02/17; 03/08; 04/05;

05/03; 06/07;

07/06; 08/16;

09/03; 10/11;

11/18 and 12/13

Meetings of the

Executive Board

Analysis and decision on

matters of its competence,

as provided for in the Bylaws

01/08; 02/11;

05/11 and 09/22

The documents pertaining to each event are available on the BB portal, following the link to Investor Relations: Material Events, Notices

to Shareholders, Minutes and Summaries.

Event Subject Date

Results Conference Call –

Portuguese and English



analysis

02/18; 05/18; 08/18;

11/26 and 11/29


Investor Relations

Banco do Brasil lays down and disseminates good practices of CorporateGovernance, preserving its commitment to shareholders and investors, promotingtransparency and equal rights. Winning the Mauá Award, granted to BB in October2004 as the Country's best listed company in 2003, shows its strength in the defenceof investors' interests in Brazil's capital markets.

BB's relationship with its shareholders and investors is handled by the InvestorRelations Management Department (IR). In 2004, the Bank perfected and intensifiedthis relationship.

In the period, the Bank held nine meetings with capital markets analysts – six at theregional centers of the Capital Markets Analysts' and Investment Professionals'Association (APIMEC), two at the Brazilian Capital Markets Analysts' Association(ABAMEC), as well as the National Meeting with Investors and Analysts, an event thatbrought together some 400 people and at which BB's President and Vice-Presidenttook part.

Another 27 meetings also took place with capital markets investors and analysts; sixroadshows in the USA and Europe; two meetings in partnership with the National CapitalMarkets Investors' Association (ANIMEC); one conference call to provide clarificationon the Public Offer for Acquiring the Subscription Warrants and Private ShareSubscription; besides seven conference calls with analysts' and eight conference callson results (four in Portuguese and four in English).

At the address www.bb.com.br, following the Investor Relations link, the Bankpublishes its quarterly results, annual results, material events, institutional presentationsand other relevant information, in Portuguese and English versions.

The service to BB shareholders is available at the Bank'sbranches all over the Country, numbering more thanthree thousand. In addition, the Bank has created aninnovative virtual channel, the Shareholder's Room, onthe bb.com.br/ri portal, where, after typing a password,investors can consult shareholding positions, earningshistory, the purchase and sale of shares, amongstother information related to the capital markets and tothe Bank itself.


Risk Management and Conformity

Banco do Brasil’s risk management model extends beyond mere compliance to allthe legal and regulatory provisions required by the market’s regulatory bodies. In itsrisk matrix, Banco do Brasil also includes categories that are not required, andimplements levels of segregation that are higher than those recommended by thecurrent regulations.

Each one of the risks managed by Banco do Brasil shows an emphasis onmanagement that complements the other categories, so guaranteeing the globalmanagement of the risks to which the Bank is exposed.


Category Emphasis

Business Environment By constructing environmental scenarios, while systematically

repositioning its business strategy in a timely manner, the

Bank guarantees its competitiveness consistently, over time.

Credit Risk Focuses on guaranteeing the return on capital lent, aligned

to a permanent policy of expanding business at competitive

rates and prices.

Market Risk Ensures that the funds needed for lending operations

and the funds borrowed from customers, are managed in

such a way as to achieve profitability, availability and

solidity for the Bank.

Liquidity Risk Guarantees the supply of capital funds needed to support the

Bank’s transactions, with an emphasis on the rates of return on

the capital invested.

Operational Risk Ensures that the Organization’s processes conform to the

rules and regulations in force, that the Bank’s transactions

are carried out with maximum security, as well as preventing

the occurrence of operational failures that could cause

losses to the Bank, its employees and its customers.

Legal Risk Guarantees that the Bank’s processes and the operation

of its business conform to the current legislation.

Image Risk The Bank’s image of always acting ethically and

responsibly, and of adding value for society, should be

always be preserved from the standpoint of its customers,

the market in general, its shareholders and employees.

The management of credit, market, liquidity and operational risks is segregated from thebusiness units. The Bank takes a consolidated view of these categories, and, in managingthem, takes the inter-dependence between them into account, in an integrated manner.


To assess these four categories of risk – credit, market, liquidity and operational –and to define strategies for its businesses, Banco do Brasil has set up a Global RiskCommittee (GRC) which is responsible for deciding issues related to the riskmanagement of the Bank and of its wholly-owned subsidiaries. Its structure is madeup of the Board of Officers and directors and executives from various areas. In2004, the GRC held 28 meetings.

The integrated management process for these risks was concluded in July 2004. Itis a model that aligns Banco do Brasil with the best practices adopted in the globalbanking market and is adapted to the guidelines set out by Brazilian Central Bankand to the recommendations arising from the New Basle Accord, or Basle II.

Integrated Risk Management

Improvement of the decision process:Strategic Plan x Capital Plan, Agility in decisions

Analysis and proposal of risk measures, adopting risk models and metrics: Global risk feedback to the Board, efficient capital allocation according to risks

Integrated risk management: Expertise exchange, superposed risk identification, capital allocation and matching, dissemination of risk culture

Models and metrics: Correlation between the risk factors associated with the market, loans and operations; impact of operational failures on the level of past-due loans; impact of exchange-rate variation the level of past-due loans; loan spread x market price

Corporate databases: Market and liquidity, credit, operations

Committees

Management Por t fo l io

Conjulgate Simula t ions

Classi f ica t ion and Qual i f ica t ion

Aggregated and Integra ted Database Vis ion

GRC

Market and Liquidi ty Credi t Opera t ional Risks


Global Risk Committee

Assets and Liabilities Commission

Credit Risk Commission Operational RiskSubcommittee

Analyses and proposes measures about:• Assets and liabilities management and models• Liquidity and market risk level of exposure• Liquidity and market risk management and models• Appropriats liquidity levels and contingency plans

Analyses and proposes measures about:• Credit risk management• Credit risk level of exposure• Credit risk models • Contingency plans

Analyses and proposes measures about:• Operational, business envinonment, legal and image risks management• Operational risk level exposure• Operational risk models • Contigency plans

Global Risk CommitteeGRC

Operational Risk

For operational risk management, which, following the New Basle Accord, will startentering into the calculation of regulatory capital required, Banco do Brasil hasdeveloped an advanced measurement model of its own, which has the objective ofidentifying risk exposure situations, classifying and measuring operational risks, mitigatingrisks and encouraging discussion about operational risk throughout the institution.

The current stage of the measurement process allows the Bank to fully meet thestandardized guidelines proposed by the New Basle Accord. When comparing theeffects of capital allocation of the basic operational risk approach, it can be seen thatthe current stage allows a reduction of up to 70% of the total of capital allocated,according to the directives set out in Basle II.

Banco do Brasi’s target is to be able to measure the operational risk of the Groupaccording to these advanced guidelines. As a result, capital savings are expectedof the order of 80% in relation to the basic operational approach, without impairingthe Bank’s capacity for granting credit.

The areas responsible for carrying out operational risk management focus as a priorityon assessment of conformity and security.

Operational risk management identifies and assesses risks, their consequences andtheir causes, under four risk factors: processes, people, systems and external events.


Credit Risk

Banco do Brasil invests in the ongoing refinement of its credit risk control andmanagement practices, in line with international banking benchmarks and theNew Basle Accord.

All the decisions related to credit risk are taken collectively and in accordance withthe guidelines and rules of the Institution, which aim at ensuring the taking on ofrisks at suitable levels.

BB uses in house models for identifying the risks associated with its loan portfolio,such as an analysis of the portfolio from various viewpoints and accompanyingthe qualitative and quantitative changes in the portfolio, and levels of concentration,amongst others.

Orientated towards the adoption of guidelines based on in-house classifications, BBhas developed proprietary models that are currently being implemented. Thesemodels will qualify BB under the requirements set out by the New Basle Accord.

Market and Liquidity Risk

To minimize the risks to which it is exposed as a result of volatile of interest andexchange rates, significant variations in the price of assets, and of swings in thestock and commodities markets, Banco do Brasil pays close attention to market andliquidity risks.

To manage market risk better, BB segregates its commercial and treasury transactionsfrom its trading operations, both of which have their own limits and strategies. Thissegregation aims to reinforce the Bank’s conservative stance in the management ofthis risk category.

As for liquidity risk, BB maintains reserves in the form of Federal GovernmentSecurities which are easily transformed into cash. These reserves are taken intoconsideration in drawing up the budgetary process and so meet the day to dayneeds of the Institution’s cash flow. BB also has a contingency plan to deal withcrises in the domestic and international financial markets.

For further information on risk management, please see the Performance Analysis booklet, page 47.

The Souto Crisis of 1864

On September 10, 1864 began the greatest market panic in the seven

decades of Brazil's Monarchy. On that morning, the banking house of A. J.

Souto & Company, the most popular bank in Rio de Janeiro, with around

10,000 clients, closed its doors and declared itself bankrupt. There was

immediate and widespread commotion throughout the city. In the afternoon,

a large crowd occupied the central financial district in a banking run the likes

of which had never been seen before in Brazil. Banco do Brasil was right at

the epicentre of this economic cataclysm. It had already advanced funds to

Souto, exceeding the technically possible assistance limits.

On the same morning, Alves Souto had asked for a meeting with a director

of Banco do Brasil, with the aim of obtaining another 900 million réis in

financing. The response was unequivocal; such a loan was not feasible and

that it would be better for Souto to close its doors. The news spread like

wildfire and Banco do Brasil was seen by despairing banking customers as

responsible for the catastrophe. A troop of military police cavalry from the

Imperial Court was sent to protect the offices of Banco do Brasil and other

premises in the financial district. The disorder and panic lasted for a week.

On September 17, the Imperial Government issued a decree suspending the

terms and due-dates of all bonds, for 60 days, postponing them for an equal

period. In addition, it forced to circulate currency notes issued by Banco do

Brasil, avoiding other bankruptcies in the wake of the disaster, calming the

financial markets and paving the way for a later recovery in the economy.Alle

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Strategy

In 2004, several adjustments were made to Banco do Brasil’s Corporate Strategy –BB’s General Business Guidelines, that resulted in some refinements to the Bank’smission, which now recognizes its commitment to the development of the Country.

To meet these aims, Banco do Brasil has established principles that express valuesthat are understood, accepted and applied within the Bank and in the professionallife of its employees and staff. These are:

Commitment to the development in the community and the Country;An ethical and transparent approach;Socio-environmental responsibility and respect for diversity;Innovation and continuous improvement of products, services and processes;Pro-activity and prudence in the management of risk, profitability, liquidityand security;Excellence and specialization in customer relationships;Encouragement for cooperatives and associations;Tradition of the Banco do Brasil brand as to lend competitive edge;Participative management, collective decisions, and teamwork;Valuing efficient and innovative work, encouraging the self-development ofemployees, and career progression based on merit.

Guidelines

To be the preferred solution in the area of services and financial

intermediation, to meet the expectations of customers and

shareholders, to strengthen the commitment between our

employees and the Bank, and to contribute towards the

development of the Country.


Strategic direction has also been reformulated, indicating that the Bank wishes:

To be a competitive bank and to play a leading role in the Retail, Wholesaleand Government markets;To be the leading bank in the credit market, in foreign trade finance, inagribusiness, and in Brazil’s capital market;To ensure the Bank’s shares enjoy a prominent position on the stock markets;To be the best bank to work for in the Country;To act as the main:• Bank for Brazilian companies in Brazil and abroad;• Agent for investment loans;• Official bank for lending from the Federal Government, as well as

agent for borrowing and onlending funds from the Federal, State andMunicipal Governments.

To be the benchmark Bank in:• Socio-environmental responsibility;• Financing the Country’s sustainable development;• Management and integration of risks;• Control and compliance;• Technology, logistics and bank security;• Credit analysis, handling and collection process;• Customer service;• Management of the sales force.

To this end, the Bank needs to have:

A degree of profitability compatible with market standards and self-sustainableperformance;The capability for developing financial instruments that are innovative andsuitable for the stage of the Country’s development;The capacity for anticipating or responding rapidly to the challengesimposed by the competition;Business remunerated in the light of the risks involved;Products and services with attributes that are valued by our customers;Integrated solutions, with availability, convenience and security in itscommunication and client interaction channels;Lasting relationships with our customers;Rationalized and automated processes;Organizational capabilities that differentiate the Bank from the competitionand that are recognized by the customers as generating unique benefits;Standards of Corporate Governance that are a benchmark for the market;Employees who are specialized, qualified and motivated.


From all this, the positions and attributes that BB hopes to attain can be envisaged:

Vision of the future

We concentrate on creating lasting relationships. Our products and servicesare developed with attributes valued by our customers to whom we offerintegrated solutions through secure interactive communication channels thatare available and convenient. We stand out for our excellence in the managementof the sales force and in customer service.

Because we are competitive, we perform a leadership role in the Retail,Wholesale and Government markets. Brazilian companies regard us as theirmain bank in Brazil and abroad.

We are the leading bank for granting credit, and the largest borrowing andonlending agent of funds from all the spheres of government. We lead thecredit market, foreign trade finance, agribusiness, and the Brazilian capitalmarket: We are a benchmark in financing the Country’s sustainable development.

Our systems for credit – analysis, handling and collection – are a benchmarkin the financial industry, as are our methodologies for control, compliance,management and integration of risks. We carry out business that is satisfactorilyremunerated, according to the degree of risk involved.

We have rationalized and automated processes, supported by all that is mostadvanced in terms of technology, logistics and banking technology.

We have the capability for developing financial instruments that are innovativeand suitable for the Country’s stage of development. We anticipate andrespond rapidly to the challenges imposed by the competition.

These characteristics lead us to self-sustainable development. Levels ofprofitability and shareholder returns which are compatible with the marketstandards, leading us to re-emphasize our commitment to transparency, bypracticing Corporate Governance standards that act as a benchmark for themarket. As a consequence, our shares play a prominent role in the stock market.

We are the best bank to work for in Brazil, a benchmark for socio-environmentalresponsibility, with specialized, qualified and motivated employees. We investin the development of our employees, as we believe that the way we treat ourstaff is reflected in the way that our customers are treated.

For all this, our organizational capabilities differentiate us from the competitionand are recognized by our customers as providing unique benefits.

Our strategy is to create value for customers, shareholders, employeesand society.


Furthermore, for the first time in the history of the Bank, our corporate strategy reviewhas included an intended institutional positioning aimed at its internal public, whichenvisages the fostering of a commitment to ethics, two-way dialogue, and the trainingand valuing of our employees. The positioning of the brand, which should evoke anidentity with the customer, and of the Bank, which should project the image of acomplete bank, specialized in market segments, have both been maintained.

Intended Institutional Positioning

Brand BankIdentity with the customer A complete bank, specialized in

market segments

Internal PublicCommitment to ethics, dialog, and the training and valuing of the employees

Another noteworthy point in the review was the drawing-up of a document thatsummarizes the decisions on the Bank’s operations up to 2007. The strategicobjectives of this long-term plan were grouped together from five standpoints –Financial, Customers, Society, Internal Processes, and Organizational Behavior – forwhich corporate drivers were defined.

On the basis of the strategy defined, the actions taken and results achieved by theBank in 2004 can be seen in the following tables:

Financial Standpoint

Drivers Actions Developed / Results Achieved

Strengthening the capital structure by

the generation of sustainable results.

Net income of R$3 billion, with a 23%

return on shareholders’ equity.

Implementing strategic, business,

operational and corporate partnerships for

boosting business and optimizing results.

“BB and Caixa Synergy” project, established

between BB and the Caixa Econômica

Federal in order to share solutions,

generate business, optimize structures,

and reduce costs.


Strengthening the Bank's share

of international business,

including foreign trade.

1st place in Foreign Exchange

for Export, with a 27.2%

market share;

1st place in ACC/ACE, with a transaction

volume of US$9 billion, 33.5%

of the market.

Increase the amount of products and

services offered through alternative

banking channels, seeking

low-cost solutions.

Transactions carried out, using

technological services and additional

banking channels, amounted

to 88.4% of the transaction total;

Automation of the granting and

distribution of loans to family farmers.

Focusing on those businesses

that generates synergy with

the Bank, divesting of the others.

In the benefit-vouchers segment, through

BB Investimentos, Banco do Brasil has an

association with Bradesco, ABN Amro and

Visa in CBSS (Companhia Brasileira de

Soluções e Serviços).

Expanding presence in the lower income

segment – at a low cost, on a mass basis

and free of red tape – and in Sustainable

Regional Development, observing aspects

of risk and return.

Through Banco Popular do Brasil, 1.1 million

customers have been encouraged to join

the banking system for the first time;

16,000 entrepreneurs have benefited from

structured business plans, according to the

Sustainable Regional Development strategy.

Financial Standpoint


Customer Standpoint


Expanding the customer base, making

it profitable, encouraging client loyalty,

while ensuring quality of service.

22.2 million current account holders;

An average of 4.6 products per customer

with a current account for more than one year.

Perfecting and developing a business

model by economic sector and

respective productive chain, that

adds value for the customers.

Retail: segmentation of individuals in

relationship bands, using monthly income

and investments;

Wholesale: combined segmentation of the

variables of the economy – Industry,

Commerce and Service – and gross

annual sales;

Government: developing specific solutions

for the whole Executive, Legislative and

Judiciary segment, in their respective

spheres – Federal, State and Municipal;

Agri-business segment: served with a

complete vision of the customer and a

focus on his specific needs, following a

systematic view of the production chain.

Strengthening communication with the

external and internal audiences, to

promote the perception of identity

between the Bank and the customer.

Top of Mind 2004 Award – Folha de São

Paulo, category: Bank – Most remembered

brand, for the 14th year running;

Banco do Brasil is pointed out, in a survey

by Interbrand, as the holder of the fourth

most valuable brand in Brazil, valued at

US$520 million.


Society Standpoint

Drivers Actions Carried Out / Results Achieved

To act as a catalyst for development

on a sustainable basis.

To implement a strategy of work called

Sustainable Regional Development (DRS),

Which aims at generating employment and

income in a sustainable, inclusive and

participative way, following an economic

logic that takes into consideration the

potential and local characteristics

of the communities.

To stimulate the inclusion of the

lower-income population into

the banking system.

1.1 million account holders have joined

Banco Popular do Brasil, through a network

of more than 5,500 service outlets, spread

over 1,540 municipalities.

Organizational BehaviorStandpoint

Drivers Actions Carried Out / Results Achieved

To act ethically and establish excellent

standards of professional competence

and employee performance.

Investment of R$32.2 billion in the

development and training of employees:

an average of 99.35 hours of course

training per employee.

To implement personnel management

practices that ensure quality of

life at work and the satisfaction

of the Bank’s employees.

Of 45,000 employees interviewed,

98% responded that they were

satisfied in their work.


Internal Process Standpoint


To identify critical internal processes,

to establish minimum performance

standards, and to review

them periodically.

Identification and assessment of operational

risks, with a focus on the financial

consequences and the causes, modeled

on four risk factors: processes, people,

systems and external events;

Identification and assessment of operational

risk by the definition of Key Indicators of

Risk, which are measurements that signpost

deviation expected process behavior.

To perfect security and control

mechanisms, transforming reliability

into a competitive marketing edge.

To manage the processes of physical

security, security of property and

information, combating money laundering

and unexpected events that impact the

business continuity, in March BB created

the Security Management Unit.

To refine support systems for

management decisions, particularly

those relating to costs, pricing, credit,

risks, market and competition.

The integrated management process for

these risks was concluded in July 2004.

This model aligns Banco do Brasil with the

best practices adopted in the global

banking market and is adapted to the

guidelines set out by Brazilian Central Bank

and the recommendations arising from the

New Basle Accord, or Basle II.

A Mega Banking Merger

In 1893, Banco do Brasil took part in what was then the largest merger ever

seen in Brazil's capital markets. At that time, the issue of currency was

restricted to those banks duly authorised by the Federal Government. In the

region of Rio de Janeiro there were two issuing institutions: Banco do

Brasil and Banco da República dos Estados Unidos do Brasil. This latter

had been founded in the largest ever public share offering, up to then,

during the speculative bubble known as the “Encilhamento”, in 1890,

raising a total of 200,000 réis, fully subscribed for in just one day, and twice

the size of Banco do Brasil's share capital at that time.

The financial and political chaos in the only years of the Republic, led both

banks to the brink of insolvency. That was the picture in December 1892,

when the Government decreed their merger, with a view to wiping the slate

clean. They were both large publicly-listed companies, both with shares

quoted on the Rio de Janeiro Stock Exchange. Finally, the following

February, shareholders meetings of both banks approved the merger

creating Banco da República do Brasil, which then became the sole issuer

of currency in the Nation's Capital Region.

This privilege ended four years later, when the issue of currency became

the exclusive responsibility of the National Treasury. The word Republic

remained as part of the Bank's name until 1906, when it reverted back to

its former name: Banco do Brasil.

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Market Segmentation

Banco do Brasil's activities in the market are guided by a strategic focus on thecustomer. The interests and the demands of the markets in which BB works – Retail,Wholesale and Government – are aligned with relationship strategies, the development ofproducts, and the creation of service channels and making them available to customers.

In 2004, the Bank's relationship models with the different public audiences wererefined, so as to win over and earn the loyalty of customers with different profiles,to encourage the consumption of products and services, to provide support forthe network in carrying out new business, and to contribute towards the inclusionof an increasing amount of the Brazilian population into the banking system whileproviding them with access to credit.

At the end of the period, Banco do Brasil's customer base totalled 22.2 millioncurrent account holding customers, consisting of 20.8 million individuals and1.4 million businesses, a total increase of 18.1% in relation to that reported in 2003.In addition to the current account holding customers, BB had 5.3 million savers,2.4 million National Institute of Social Security (INSS) beneficiaries without a currentaccount, and 1.1 million customers of Banco Popular do Brasil.

The synergy between the Retail, Wholesale and Government markets can be verifiedthrough payroll agreements. In December, 7.4 million customers received their paythrough the Bank. Efforts to include the low-income population into the bankingsystem have also helped to add 2 million new customers – pensioners, savers andfrom the informal sector – to the BB Conglomerate.

Retail Market

In Retail, Banco do Brasil caters to individuals and micro and small businesses.

The Retail market segmentation model – segments of individuals – consists of sixrelationship bands: Preferencial A and B, Exclusivo, Banco do Brasil Estilo, Bancodo Brasil Private, and Banco Popular do Brasil.

Markets


To better serve the customers of Banco do Brasil Private, who have large amountsof funds invested, in June BB inaugurated its first Private Banking Office, locatedin the city of São Paulo. Currently, customers are served from Porto Alegre - RS,Rio de Janeiro - RJ and Belo Horizonte - MG, all locations that will see the openingof Private Banking offices in the first half of 2005.

In the second half of the year, Banco do Brasil Style's relationship model saw the start ofexpansion. Besides the presence in Campinas - SP, another two branches were opened,one in the city of São Paulo and the other in the city of Rio de Janeiro. The expansionalso included the creation of another 52 Banco do Brasil Style dedicated areas withinexisting retail branches distributed over seven states - RJ, DF, BA, PR, RS, SC and SP.

Relationships with individual customers from the Preferential A and B and Exclusivesegments are handled by relationship managers and service staff in the network ofRetail branches. In 2004, in addition to the refinement of products, services andservice channels for this target public audience, the Bank launched the BBRelationship Program, which offers advantages to customers as a result of theirrelationship with the Bank, the intention being to earn the loyalty of this client base.

The Retail market also includes catering to agribusiness clients. This relationship isbased on an integral view of this type of client, focusing on their specific needs,based on a systematic view of the production chain. These guidelines are based onthe characteristics of the Rural Producer from a "corporate" perspective because theincome obtained through farming activities is in the form of gross sales. This sets this

Retail Segmentation

Banco do Brasil Private:Investments > R$1,000,000

Banco do Brasil Estilo:Income > R$10,000 ouInvestments > R$50,000

Exclusivo: R$2,000 < Income < R$10,000 R$5,000 < Investments < R$50,000

Preferencial A:R$750 < Income < R$2,000 R$1,000 < Investments < R$5,000

Preferencial B: Income < R$750 Investments < R$1,000

Banco Popular do Brasil: Income < R$720 Investments < R$1,000


type of client apart from the rest of the retail banking market, and so his/her needsare thus defined, along with consumption capacity, business opportunities with inputsuppliers and buyers of agricultural produce.

Banco Popular do Brasil, a wholly-owned subsidiary whosework complements that of BB in its efforts to foster theinclusion of the low-income population into the Brazilianbanking system, is responsible for the segment of lower

income customers, who have no proof of earnings, and for the informal sector of theeconomy, served though a network of banking representatives.

The Retail market also includes Micro and Small Businesses (MSB), regarded ascorporate entities, credit cooperatives and associations with gross annual sales of upto R$10 million. At the end of 2004, BB boasted 1.3 million MSB customers, of whichover 752,000 firms had the advantage of being provided a specialized service.

Wholesale Market

The relationship with businesses with gross annual sales in excess of R$10 millionis handled by the Wholesale market. In the first half of 2004, the segmentation of thismarket, carried out previously on a pure sales figure basis, was refined: combininga series of variables in each economic segment – Industry, Commerce and Services– and gross annual sales.

This market boasts an exclusive service network present in all the regions of theCountry. At the end of 2004, the more than 24,400 customers from this segmentcould count on the use of 85 branches, of which 17 had a Corporate service profile.

Government Market

In the Government market, Banco do Brasil's target public comprises the Executive,Legislative and Judiciary Authorities, in the respective Federal, State and Municipalspheres. For this market, BB has developed specific solutions that seek to cater tothe entire chain of the segment, assisting not only the day-to-day of the publicadministrator, but also that of the civil servants and suppliers.

These solutions facilitate the management of resources, in a secure and transparentway, and the handling of various administrative processes carried out by public bodies.

Abroad

Banco do Brasil's work abroad is aimed at the raising of funds and promoting andfacilitating businesses with Brazil, by supporting Brazilian companies in carryingout their foreign trade transactions and in winning new markets. Furthermore, BBprovides services for Brazilians resident in other countries.


BB's service model abroad is based on its own branch network and on acomplementary network of representative banks, which make it possible to carryout transactions and business – both its own and that of its customers.

Banco do Brasil has a presence in the main financial centres in Europe. In Portugal,for example, BB's operations are focused on the retail segment, with over 41,000clients. In 2004, a sub-agency was opened in Cascais, linked to the Lisbon branch,and in 2005 another two outlets will be opened, one in Parque das Nações inLisbon, and the other in Porto.

In Africa, Banco do Brasil has opened an office in the Luanda, Angola, with the aimof providing support to Brazilian businesses on that continent and opening up newmarkets for Brazilian exports.

In Asia, Banco do Brasil has concentrated its efforts in Japan and China. In Japan,the Bank's operations are focused on the retail segment, with the aim of providingsupport and increasing business with the Brazilian community in that Country andalso increasing its client base.

In China, BB has a presence in Hong Kong and Shanghai. The Bank's operations inHong Kong are focused on relationships with financial institutions and institutionalrepresentation. In Shanghai, efforts are directed at providing support for Braziliancompanies in their import and export trade operations.

Banco do Brasil's office in Mexico saw a large amount of business 2004, providingsupport for Brazilian and Mexican companies in facilitating their foreign tradebusinesses. In the United States, the initial steps were taken for the setting up of abrokerage house and Banco do Brasil Securities LLC, in New York, which are inaddition to the efforts of BB Securities Ltd in London, England, in positioning Bancodo Brasil in international capital markets.

In South America and Panama, operations are focused on the business segment,aimed at providing support for foreign trade and Brazilian investment abroad.

A Temple for Capital Markets

On May 7, 1880, with Emperor Pedro II and his wife, Teresa Christina, in

attendance, the keystone of the new headquarters for the Rio de Janeiro

Stock Exchange was laid. It was the third Praça do Comércio, at Rua Primeiro

de Março, 66, and, as in the case of the first one, also financed by Banco

do Brasil. The construction of the building took 26 years, until its inauguration,

in November 1906, by President Rodrigues Alves. But the stock exchange

used it, even in an unfinished state, from the late 1880s. The trading floor,

where brokers met daily to trade in stocks, bonds and government

securities, was under its magnificent dome.

This was the centre of Brazil's capital markets for more than forty years.

In 1922, the building's owner, the Rio de Janeiro Trade Association, assigned

it to Banco do Brasil in settlement of the debts incurred in its construction.

Substantial renovations were then undertaken, which significantly altered

the building's façade and its interior.

From 1926, until 1960, when Brazil's capital was transferred to Brasilia,

Banco do Brasil's headquarters were the old Exchange building. Nowadays

it is known as the Banco do Brasil Cultural Centre. An historic city landmark,

the hub of Brazil's capital markets for four decades and the decision-making

centre of the largest financial institution in Brazil for an equal period, today

it is one of Rio de Janeiro's most sophisticated centres for the propagation

of culture.

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Economic-Financial Performance

Banco do Brasil’s economic-financial performance in the financial year 2004 isanalyzed in detail in the Performance Analysis booklet that accompanies thisReport. The main results are shown below.

The net income of R$3 billion exceeded that reported in 2003 (R$2.4 billion) by27%. This result corresponds to an average return on shareholders’ equity of 23%,with earnings per share of R$3.78.

Net Income

2004

3,024

2003

2,381

2002

2,028

2001

1,082

2000

974

12.8 12.9

22.6 22.3 23.0

Net Income (R$ million)

ROE (%)

3,000

2,000

1,000

Based on this net income, remuneration of R$954.3 million was set aside fordistribution to shareholders, in the form of interest-on-equity – 28% higher thanthe amount paid out in 2003.

Performance


Total assets amounted to R$239 billion, 3.9% higher than the total at the end of 2003.This increase is due, above all, to the 14.1% growth in BB’s loan portfolio, which, atthe end of the period, had grown to R$88.6 billion.

The expanding profits and the consequent increase in shareholders’ equity, whichtotalled R$14.1 billion, made it possible to improve the Bank’s capital adequacy ratio.In December 2004, the Banco do Brasil’s Basle ratio amounted to 15.2%.

Surplus capital amounted R$5.5 billion, 63.3% higher than the figure for the sameperiod in 2003, which makes it possible to leverage R$50.3 billion in assets riskweighted at 100%.

Shareholders’ Equity (R$ million)

2001

8.7

2002

9.2

2003

12.2

2004

14.1

2000

8.0

15

12

9

6

3

Basle (%)

2001

12.7

2002

12.2

2003

13.7

2004

15.2

2000

8.8

15

12

9

6

3


2001

265

2002

579

2003

746

2004

954

2000

258

1,000

800

600

400

200

In 2004, the Bank manteined its leadership position in

the granting of credit in Brazil, with 18.3% of the

financial system.


The Bank maintained its leadership in the granting of credit in Brazil, with an 18.3%share of the financial system. Loans granted to individuals accounted for 18.1% ofthe portfolio. Loans to businesses, not including Agribusiness and the Abroad LoanPortfolios, which are treated separately, accounted for 37.7% of the total portfolio.

The growth in the Loan Portfolio was accompanied by an improvement in riskmanagement. At the end of the period, transactions ranked at risk levels AA, A, Band C accounted for 92.1% of BB’s portfolio, compared to 89.6% for the NationalFinancial System.

Revenues from service fees grew 20.3%, to a total of R$6.6 billion. This increasereflected the growth in the customer base and the asset management business.

Administrative expenses totaled R$14 billion, growing 12.7%. In this item, personnelexpenses showed an increase of 4.2%, rising to R$7.1 billion. Other administrativeexpenses showed an increase of 21.1%, totalling R$5.5 billion in 2004.

Loan Portfolio

R$ million

Dec/03 Dec/04

Loan Portfolio 77,636 88,554

Individuals 13,173 16,025

CDC (Consumer Credit) 7,810 9,769

Overdrafts 2,214 2,237

Credit Cards 1,571 1,890

Other 1,579 2,130

Businesses 28,103 33,417

Working Capital 15,682 18,940

Investment 3,661 4,796

Foreign Trade 7,381 7,834

Other 1,379 1,847

Agribusiness 26,864 30,036

Abroad 9,481 9,017

Others 15 58


Efficiency Ratio (%)

(Administrative Expenses / Operating Revenues)

2000

80.9

2001

69.2

2002

59.0

2003

56.3

2004

58.2

100

80

60

40

20

Coverage Ratio (%)

(Service Fees / Personnel Expenses)

2000

56.7

2001

67.4

2002

80.3

2003

82.5

2004

96.9100

80

60

40

20


Business Performance

Credit for Individuals

Loans to clients in the “individual customer” category amounted to R$16 billion bythe end of the year, an increase of 21.7% in relation to 2003. The balance of DirectConsumer Credit transactions, the main credit line intended for the segment, endedthe period at R$9.8 billion, corresponding to 7.8 million transactions.

BB Crédito Consignação, a consignment credit line, served over 713,000 salaryearners in 2004, with a total of R$1.8 billion. The great driver for this line of creditcame from an agreement entered into with the Federal Union, which enables BBto offer it to 1.3 million active and retired civil servants and beneficiaries from theMinistry of Planning, Budget and Management.

With alterations made to interest rates, terms and limits, BB Crédito Benefício, acredit line even more comprehensive, to cater to INSS pensioners andbeneficiaries, expanding the number of customers served to almost 500,000.

Launched in December 2004, BB Crediário, an instalment credit line, consolidated thenew concept of Consumer Credit in the market, making access to credit availabledirectly at sales outlets. The product allows customers with a pre-approved credit limitand a Visa Ourocard or Visa Electron card to pay for their purchases – new goods orservices – in instalments, at the 580,000 establishments affiliated to Visanet, viapoint of sale terminals or electronic funds transfer terminals.

Direct Consumer Credit (R$ million)

2000

4.7

2001

6.4

2002

6.7

2003

7.8

2004

9.810

8

6

4

2


The lines of finance showed a balance of R$1.3 billion, of particular note beingBB Crédito Material de Construção, a building material credit line, financing thatis supplied from the Worker's Support Fund (FAT) with 404,000 loans contractedin 2004 – a total of R$926 million.

Continuing with the adoption of strategies for making credit more widely availablewithin the population, in June BB launched BB Crédito Pronto, a micro-credit linetargeted at the lower income segment, with 488,000 loans granted: a total ofR$241 million.

To promote its lines of credit, BB implemented an initiative that is without precedentin the banking market: an active offer of products via automated teller machines(ATM), which is proving to be an efficient means of boosting business andmaximizing the Bank's results, allowing interaction with the customer.

Another innovative venture in 2004 was the automation of the process ofrescheduling debts, with a pro-active approach, through its ATM network andthe bb.com.br portal. Through these channels, BB interacts with its customers,with automatic reminders of the debt's due date, requests for updating payments,and various options for automatic debt rescheduling.

The objective of this innovation was to facilitate the charging process, increase thenumber of customers served, easing the burden on the branches and reducingcosts. From the beginning of August, when this system started, and the end ofDecember, over 194,000 loans were rescheduled, amounting to R$377.3 million.

Banco Popular do Brasil

In the second half of 2004, Banco Popular do Brasil started its operations at anational level, after concluding the pre-operational stage, which, amongst otheraspects, made it possible to optimize human resources and develop and train staffin the technology that make up its service network. In September, a partnershipproject was started for companies related to the same target public audience.

By December, Banco Popular do Brasil had gained 1.1 million new current accountholders at over 5,500 service points, spread over 1,540 municipalities. The figuresrepresent a daily average of seven thousand simplified accounts, surpassing thetarget set for 2004, of 1 million customers and 4,500 service outlets.

The volume of loan transactions carried out in the period amounted to R$21.3 million,in credit granted to 197,000 customers. About 2 million receipt and paymenttransactions were carried out, involving funds of around R$200 million.


Credit for Micro and Small Businesses

The total volume of credit contracted by micro and small businesses (MSB) amountedto R$17.2 billion, 30.4% higher than that seen in 2003.

Among the credit lines intended to provide working capital for MSB, of special noteis BB Giro Rápido, a working capital line, which, on an automated basis, servescompanies with annual sales of up to R$5 million. The product has completed fiveyears in the market and had exceeded the milestone of 660,000 companies servedby the end of the financial year, with total loans contracted of R$8.1 billion, 32.5%higher than in the previous period.

Launched in March, BB Giro Automático, an automatic working capital line,introduced an innovation in a new form credit offered to companies with sales ofup to R$500,000/year. Following the use of pre-approved credit through OurocardBusiness cards, the company has up to 65 days to pay the first 1st instalment ofthe loan. At the end of December, this product saw some 85,000 transactions,with a contracted loan volume of roughly R$240 million.

Receivables transactions for the MSB segment – cheques discounted, trade billsdiscounted, and advance credit for stores – amounted to R$4.6 billion, in 2004, anincrease of 22.6% in relation to 2003.

The balance contracted by this segment for financing investment projects throughProger Urbano Empresarial, an investment line for micro and small business, wasR$1.6 billion representing an increase of 90.4% in relation to the previous year.

The volume of foreign trade transactions contracted by the micro and smallbusinesses totalled R$591 million, up 92.3% compared to 2003, with over 4,000transactions recorded.

BB Giro Rápido (R$ billion)

2000

0.8

2001

1.3

2002

1.5

2003

2.7

2004

3.44.0

3.0

2.0

1.0


In the International Business Generation Program for Micro and Small Businesses(PGNI-MPE), BB served 797 companies, providing step-by-step support for the firstexport, and also giving guidance to businessmen on ways of winning over newmarkets, of preparing products, and of maintaining importing customers. This numberof companies catered to represented an increase of 67% in relation to 2003.

Wholesale Credit

The balance of Wholesale transactions totalled R$21.8 billion at the end of 2004,increasing by 7.2% in the year. In addition, loan transactions for this segmentbooked abroad came to R$4.9 billion, bringing the total of transactions carried outby these customers to R$26.7 billion.

At the end of the period, the Wholesale portfolio of receivables exceeded R$5 billion,with particular focus on BB Vendor and Desconto de Títulos (trade bills discounted).

The Bank operates in the various segments of the economy, advising Brazil's mainbusiness groups and major foreign investors. In 2004, BB took part in investmentprojects in the agribusiness, steel, transport, energy and communications segments.For credit directed at investment, with a balance of R$2.9 billion in December2004, the lines from BNDES, Finame and FCO Business stand out for their 41%increase in the Wholesale market, in relation to 2003.


Agribusiness Agreement

R$ 200,000,000.00

Agribusiness Finance

R$ 23,000,000.00

Co-operative

Agribusiness

Pre-Export FinanceUS$ 60,135,521.00





Foreign ExchangeExport Flows

US$ 463,209,215.12


Pre-Export financeUS$ 64,386,670.35

Working Capital with External Funds

R$ 24,812,437.18

Agribusiness Agreement

R$ 143,863,047.50




Public Share OfferingR$ 616,900,000.00

Vendor ofLoans Granted

R$ 12,311,000,000.00

Desconto de ChequesLoans Granted

R$ 22,276,000,000.00

Desconto de Títulos Loans Granted

R$ 26,655,000,000.00


Pre-Export Finance US$ 141,598,311.46

Foreign Trade

Shoe Manufacturer Banco do Brasil

DebenturesR$ 500,000,000.00

Working Capital with External FundsR$ 450,823,005.38


Telecoms

Sale of AgribusinessProducts

R$ 51,000,000.00

Working CapitalR$ 350,000,000.00

Working Capital with External Funds R$ 226,000,000.00

Retail Trade

Electricity

Project Finance - Deal Structuring Agent

R$ 14,932,000.00

Project Finance - Leader/Structurer -

BNDESR$ 647,000,000.00


BNDESR$ 450,751,000.00


BNDESR$ 1,316,471,400.00


R$ 97,400,000.00 Public Share OfferingR$ 820,962,174.06



R$ 32,618,000.00

DebênturesR$ 230,420,000.00







Paper and Pulp

ProexUS$ 74,798,721.60

Import FinanceUS$ 20,000,000.00


Secondary Share Offering

R$ 600,000,002.14


Electrical Appliances and Electronic Goods Ceramic CoveringsHeavy Construction ShareholdingMedia



Pre-export FinanceUS$ 21,836,195.00

ComprorR$ 50,000,000.00

Food and Beverages

Machinery and Equipments

ACEUS$ 66,658,616.73












Mining and Steel


Chemicals

AgribusinessAgreement

R$ 240,000,000.00

Investiment ProjectR$ 28,664,250.00


R$ 100,000,000.00

Acquisition of Receivable

R$ 114,700,000.00


R$ 60,000,000.00



Paying AgencyUS$ 1,000,000,000.00


ComprorR$ 20,000,000.00




R$ 45,800,000.00


Working Capital withExternal Funds

R$ 42,000,000.00

Sanitation

Oil and Petrochemicals

TransportTextiles

Automotive Sector


Trade Finance Pre-Export FinanceUS$ 42,606,653.39

Working Capital e BNDES Exim

Trade Finance




Pre-Export Finance e BNDES Exim

Working CapitalR$ 500,000,000.00

Logistics


BNDES FinemR$ 28,176,000.00


R$ 179,000,000.00



Public Share OfferingR$ 319,384,800.00

Capital Goods




Agribusiness Credit

The Banco do Brasil's agribusiness performance is the result of its experience in thesegment and of its work throughout the value chain. The balance of R$30 billion atthe end of the period represents growth of 12.2% in relation to 2003.

The volume of funds released by BB in rural and agro-industrial credit, in the courseof the year, is shown below.

In funds released, from the beginning of January to the end of December, BBcontinued to rank in first place in the BNDES/Finame Rural system, with 41,000 loantransactions – R$1.6 billion in the agricultural programs (Moderfrota, Moderinfra,Moderagro, Prodeagro, Prodefruta, Propflora and Special Finame Line).

The main items financed were machines and equipment, fertilizers and agrochemicals,improvements in the productive agricultural/livestock infrastructure in silos, irrigation andwarehouses, perennial crops, and the farming of poultry, fish and shrimps.

The volume of Rural Product Schedules (CPR) negotiated by Banco do Brasil in2004 amounted to R$4.5 billion, up 192% in relation to the total negotiated in 2003(R$1.5 billion). In the ranking of states, Goiás appears in first place, with R$998 millionin business, followed by Mato Grosso, R$713 million, Paraná, R$609 million, andMinas Gerais, R$601 million.

Of the volume of CPRs negotiated at the Bank, R$2.3 billion was transacted withcollateral from BB, and R$2.1 billion was acquired by the Bank, availing itself of so-called “free funds” and the rural savings requirement.

R$ million

%

Beneficiary 2003 2004 Change

Farming businesses 18,956 20,951 10.5

Family farming 3,100 3,731 20.3

Total 22,056 24,682 11.9

R$ million

%

Purpose 2003 2004 Change

Costs/Sales 18,716 20,943 11.9

Investment 3,340 3,739 12.0

Total 22,056 24,682 11.9


A total of R$3.8 billion was lent out in support for family farming and small ruralproducers.

Foreign Trade

Reflecting Brazil's good Foreign Trade performance in 2004, BB achieved remarkablegrowth in Brazilian export finance, compared to 2003,

Banco do Brasil's main products for financing exports are: Advances againstExchange Contracts (ACC) and Advances against Export Contracts (ACE), whichamounted to a total contracted volume of US$9 billion in 2004, up 18% comparedwith the previous year.

Another prominent product in 2004 is the Prepayment of Exports, which saw an increaseof 13% in relation to 2003 – the balance of the portfolio expanding to US$768 million.

Funds for Family Farming (R$ billion)

Amount Contracted

2000

1.9

2001

2.2

2002

2.7

2004

3.8

2003

3.54

3

2

1

ACC/ACE (US$ billion)

10

8

6

4

2

2000

5.1

2001

5.3

2002

5.5

2004

9.0

2003

7.6


In the Foreign Exchange Market, in 2004, BB contracted US$25.9 billion in ExportExchange transactions, compared to US$21.6 billion in 2003. This performance keptBB in its leadership position in this segment, with a 27.2% market share.

For the import segment in 2004, the total volume of foreign exchange transacted byBB amounted to US$13.5 billion, up 16% in relation to the previous year. In thissegment, BB also maintained its position of leadership, with a 23.8% market share.

Import Exchange (US$ billion)

20042003200220012000

21.118.6

22.726.0

23.8

9.78.8 9.0

11.6

13.5

Volume Contracted

Market Share (%)

14

10.5

7

3.5

Export Exchange (US$ billion)

20042003200220012000

20.6 20.023.1

28.927.2

10.811.8 14.1

21.6

25.9

Volume Contracted

Market Share (%)

26

13


Deposits and Money Market Borrowing

At the end of 2004, Banco do Brasil maintained its leadership position in depositsand money market borrowing, with a total of R$160.1 billion, an increase of 6.7%compared to that in 2003.

In 2004, the Bank recorded an increase of R$3.6 billion in funding from savings,ending the period with a balance of R$31.1 billion. In the course of the year, thenumber of BB's savings accounts went up from 11.4 million to 12.9 million, anincrease of 1.5 million.

These results afforded the Bank a 19.5% market share. The “Thousand PrizesPromotion”, a campaign for prize-giving for savings in force from September 2004to March 2005, contributed towards the expansion in the amount borrowed and thenumber of accounts opened. Since the beginning of the campaign to December2004, R$1.4 billion was borrowed and 603,000 accounts opened.

Deposits and Money Market Borrowing (%)

Dec/03

18.1

32.1

18.3

4.8

26.7

Demand Deposits

Time Deposits

Savings Deposits

Interbank Deposits

Money Market Deposits

Dec/04

18.1

31.0

19.4

3.6

27.8

Demand Deposits

Time Deposits

Savings Deposits

Interbank Deposits

Money Market Deposits


Asset Management

At the end of 2004, Banco do Brasil, through its wholly-owned subsidiary BB Administração de Ativos –Distribuidora de Títulos e Valores Mobiliários (BB DTVM)had R$124 billion in assets under management, spreadamong 349 investment funds and 252 managedportfolios.

This total reaffirmed BB's leadership as Brazil's largest manager of third-partyfunds, with a 19.7% market share, according to ranking by Anbid. Compared toDecember 2003, there was an increase of 0.67% in market share.

Assets under management grew by 21% in relation to December 2003, while thetotal assets in the market grew 17%. The unit-holder base totalled 1.2 million, withan increase of 14% in relation to the previous year.

BB's strong presence in this market led BB DTVM to open an office on November 25, 2004in the city of São Paulo, to which it transferring its consultancy and fund managementservice operations, aimed at the Wholesale, Offshore and Private segments.

Capital Markets

In 2004, Banco do Brasil maintained its strong share of the domestic capitalmarkets. In the period, it carried out 13 Fixed-income origination and distributionoperations, totalling more than R$1 billion; it featured amongst the top three in theAnbid ranking for 2004, both in terms of total volume and number of operations.

In the Equity Market, BB played an active role in major operations, particularly publicshare offers. Thanks to its extensive customer portfolio and the coverage of its service

Asset Management (R$ billion)

20042003200220012000

13.2 16.2 17.4 19.0 19.7

48.061.4 66.2

102.6

124.0

Funds under Management

Market Share (%)

125.0

100.0

75.0

50.0

25.0


network, BB is a regarded as a benchmark for its retail distribution capability. Therevenues from equity transactions were up by over 500%, compared to 2003.

Other highlights in the period were: the launch of the PIBB (Brazil Bovespa IndexPaper) Fund, created by BNDES, which attracted 6,400 investors with a total ofR$55.9 million, and the innovative operations of distributing Cepac (PotentialAdditional Construction Certificates) securities issued by the City Hall of São Pauloto facilitate the financing of urban infrastructure projects.

Another major conquest in the period was the winning of a contract to manage theshareholder base of Petrobras, with over 136,000 investors. While the performancefrom the Purchase and Sale of Shares amounted to an outstanding R$1.5 billionin 2004, up 182% in relation to 2003. Sales via the Internet accounted for 40% ofthese transactions.

Also of major importance was the launch of BB's first Progressive Real EstateInvestment Fund as a new type of investment made available to the Bank'scustomers. The Fund's portfolio is made up of real estate enterprises thatgenerate earnings for the unit holders, from the rental of commercial, industrialand service properties.

In the area of research, BB has produced reports assessing companies, sectors,fixed income and market, intended for the portfolio of customers made up ofinstitutional investors. BB Investimentos currently covers 30 companies from theelectricity, pulp and paper, oil and gas, petrochemicals, steel and mining, smallcaps, and telecommunications sectors.

In the international capital markets, BB played an important role, among Brazilianbanks, in structuring issues for customers. Besides these operations, in 2004Banco do Brasil carried out two fund raising operations of its own, totallingUS$372.7 million.

Of particular note was the first fund-raising carried out by BB, in Brazilian reais(the local currency), in the international capital market. R$200 million was raisedthrough the Global Medium Term Note Program – GMTN, with a zero coupon anda 3-year term.

Another operation was the raising of US$300 million, through the issue ofsubordinated debt, with a 10-year term (maturing in 2014). The structure includedan Insurance mechanism, a determinant factor for achieving the “Baa1” ratingattributed by Moody's, in the investment grade category.


Pension Plans, Insurance and Capitalization

In 2004, through its equity stakes in Pension Plan, Insurance and Capitalizationcompanies, Banco do Brasil maintained its strategy of developing and expandingits insurance products and services with its customers.

In January, Banco do Brasil launched a new family of open pension fund products,developed from the BB customer segmentation model, to meet the specific needsof each segment.

The number of participants in Brasilprev's openpension plans grew by 16% in the period, amountingto 1.4 million customers, spreaded between theTraditional, PGBL and VGBL plans. Assets totalledR$7.8 billion, 39.3% higher than for the same periodof last year.

In the closed pension fund segment, BB Previdência– Fundo de Pensão do Banco do Brasil, whichcompleted ten years in 2004, expanding the fundsunder management by 38%, totalling R$607 million,spread among 33 benefit plans that cater to 39,000participants.

In 2004, Banco do Brasil launched the BB Segurosbrand, to represent the following insurance companiesin all aspects of their communications: Aliança doBrasil, Brasilveículos and Brasilsaúde. This strategyreinforced the perception that the insurance offered bythe companies of the Conglomerate are products ofthe Bank, which thereby boosts the attributes ofsecurity, reliability and tradition of the BB brand.

Brasilveículos' automobile insurance portfolio totalledR$536 million in premiums, up 22.6% in relation to2003. The fleet insured grew 15%, totalling578,000 vehicles.

Cia. de Seguros Aliança do Brasil achieved a total ofR$1.1 billion in premiums issued – growth of 28.5%in relation to the previous year – of which R$686.5million in the Life portfolio (growth of 17.7%) and


R$404.1 million in the Property/Casualty lines (growth of 50.9%). With over 2.5 millionlives insured, it ended 2004 in second place in the ranking of the Superintendencyof Private Insurances (Susep). In agricultural insurance, Aliança do Brasil is thelargest insurance company in the Country, with roughly 69% of this market.

In the health insurance line, the number of policies grewby 33% in 2004, totalling premiums of R$130.8 million,up 42% in relation to 2003.

The leader in the capitalization plans segment, with 24%of the market, Brasilcap sold R$1.6 billion, surpassingthe sales of the previous year by 15.8%. Brasilcap'sreserves exceeded R$2 billion in 2004, alsoconsolidating its leadership in volume of reserves.

Also worth highlighting is the creation and reformulation of products and servicesaimed at the lower income public. For this segment, the BB Life Insurance and theOurocap Pop capitalization bond were created in July, and the BB Family FarmingLife Insurance in October, with the following sales performance: 49,400 policies,130,000 bonds and 51,000 policies, respectively.

Direct Debit Cards and Credit Cards

In 2004, BB achieved sales of R$24.3 billion from debitcards and credit cards. This figure, which representsan increase of 34.1% in relation to 2003, maintainedBanco do Brasil as leader of the card market, with a19.7% share. Of this total, annual sales from directdebit cards were particularly outstanding, rising fromR$6.8 billion to R$10.7 billion, an increase of 56.8% inrelation to the same period in 2003.

In the same period, another highlight was the increase seen in credit cards of1.6 million, ending the year with total of 6.9 million cards held.

The year marked BB's pioneering activity as the sole issuer in the Country to offerthe “post-dated Visa Electron" as an attribute of all the Ourocards with the Visabrand, which allows the customer to post-date the payment of purchases. With aview to increasing the number of electronic transactions and to boost sales usingthe debit function, an intensive campaign will be run in 2005 to publicize this aspect.


In the micro and small business segment, subscriber base of business cards,which can be used in the more than 39,000 automated teller machines for variousfunctions, has surpassed the milestone of 446,000 cards issued.

At the end of 2004, the pre-paid card was launched, a means of payment that whoseuse is based on the previous release of funds/charge (deposit), for corporate entities.In 2005, the product will be expanded to private individuals.

In the corporate card segment, which includes companies from the Wholesale marketand government entities, the increase in sales was 64%, up from R$165 million, in2003 to R$271 million in 2004.

For 2005, BB is taking a view on the future of the market by developing tools thatwill make it possible for company managers and government bodies to customiseimplementation and control on limits and restrictions on card use at various levels.

Amongst the various solutions developed in this area, BB's pioneering strategy formaking available lines of credit through Ourocard Visa and BB Visa Electroncards, is of particular note. In 2004, R$1.4 billion was released in credit for thecontracting of finance, directly at sales establishments, in a rapid manner andin accordance with the needs of the customer. Examples of this for the segmentof private individuals are the BB Material de Construção and BB Crediário lines.For the micro-businesses sector, BB Giro Automático and the BNDES Card areparticularly noteworthy.

In the area of benefit vouchers, Banco do Brasiloperates through its participating interest inCompanhia Brasileira de Soluções e Serviços(CBSS), making BB Visa Food and Meal VoucherCards available. In 2004, the milestone of 485,000active cards was reached, with annual sales ofR$770 million.


Consortium Plans

BB Consórcios, a wholly-owned subsidiary that hasthe object of facilitating customer access to durableand consumer goods, started its activities in April,with a pilot project intended exclusively for employeesof Banco do Brasil all over the Country. After the testscarried out, operations were expanded in the secondhalf of the year, to the entire potential public in Brazil.

Groups were opened up for the purchase of cars, motorcycles, trucks, tractors andelectrical and electronic goods, and by December BB had sold over 8,500 quotas,with a volume of business – goods contracted – of about R$100 million.

Tourism

Always seeking to offer its customers differentiated and complete solutions, Banco doBrasil uses BBTUR Viagens e Turismo Ltda, a company that specializes in corporatetourism, business travel and events.

BB Turismo's sales in 2004 came to approximatelyR$500 million, up 13% in relation to 2003. These figuresrank the company as one of the largest agenciesspecialising in Business Travel in the Country.

Business with the Public Sector

Among other major conquest by BB in this market in 2004, there was the achievementof winning the contract to manage 51% of the payroll of municipal civil servants andof 75.5% of the Federal Executive Branch. As for the collection of state and municipaltaxes, the average increase in BB's share was 32.5%, in comparison with 2003.

The segment of separate social security systems, consisting of over 2,100 state andmunicipal systems, holds about R$18 billion and has over 2 million civil servants,working and retired.

In the federal sphere, the Bank received 6.4 million Social Security Payment Slips(GPS), for the total amount of R$27.8 billion – a 29.5% market share; and 19.5 millionFederal Revenue Payment Documents (DARFs), which totalled R$94.2 billion – a 31.6%market share in this segment.

Sowing a New Idea

November 1936 saw the creation of one of Banco do Brasil's most important

financial tools: The Industrial and Agricultural Loan Division. The following

year, a Federal Decree authorized the Division to raise money through the

placing of notes in the capital markets, and also with the recently formed

Public Pension Funds. These bonds were listed on the Rio de Janeiro Stock

Exchange. They provided the financing for the crops through the purchase of

machinery, seeds, fertilizer, as well as cattle breeding, raw materials and

industrial modernization.

In 1938 and 1939, the Industrial and Agricultural Loan Portfolio returned to

the capital markets, launching a new type of note – Mortgage Bonds. Their

purpose was to relieve the grave level of indebtedness in Brazil's farming

industry, reducing the interest rates on farm mortgages. The farmers’ debts

were renegotiated and payment was made to the former creditors in these

bonds, transferring the mortgages to Banco do Brasil.

Later on, in the 1950s, it was the Colonial Division that used the issuing of

Mortgage Bonds to raise money for its projects. Thus, on many occasions,

Banco do Brasil has been able to use its solid connections with the capital

markets to finance the everyday needs of the Brazilian national economy.

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Distribution Network, Technology and Logistics

Service Network

At the end of 2004, the Bank’s service network consisted of 14,450 branches orservice outlets (an increase of 9.3% in relation to 2003), distributed over 2,984municipalities all over Brazil. The Bank’s distribution network is divided into 5 kindsof service outlets, besides the branches, classified as follows:

The branch network is segmented in accordance with the markets defined by theBank; there are 3,599 branches linked to the Retail market, 38 to the Governmentmarket, and 85 to the Wholesale market.

Besides its own network, BB maintains a network of banking representative offices –“BB is Here” (Aqui tem BB) – which at the end of 2004 included 2,260 service outletsand 15,066 cashiers for receiving payment books, taxes and bank bills. This networkwas responsible for over 67 million transactions, totalling R$28 billion in the year.

Channels

Distribution Network in Brazil Dec/04

Branches 3,722

Advanced Service Post (PAA) 188

Banking Service Post (PAB) 1,455

Electronic Service Post (PAE) 5,614

Self-Service Room (SAA) 3,455

Payment and collection post (PAP) 16

Total 14,450

Note: Additional information on this subject can be found in the Performance Analysis Report, on pages 77 to 81.


Alternative Banking Channels

The Bank offers its customers a series of alternative channels – automated tellermachines, Internet, telephone, fax, Financial Manager, POS, representative offices, callcenters and mobile banking, with the aim of expanding ways in which BB customerscan access their accounts, with maximum convenience and security.

At the end of 2004, transactions through the automated channels accounted for 88.4%of total of transaction carried out by BB customers, compared with 86.4% in 2003.

Banco do Brasil’s self-service network gives the Bank a competitive edge. BB’scustomers have the largest network of Automated Teller Machines (ATM) in LatinAmerica at their disposal. At the end of 2004, BB customers had access to39,015 ATM.

Another important channel, the bb.com.br portal, passed the 6.9 million customermark in 2004, enabling clients to carry out transactions on the Internet. In 2004,

Transactions using alternative channels (%)

20042003200220012000

71.4

78.6

84.1

86.4

88.490

95

90

85

80

75

Automated Teller Machine Terminals

2000

30,149

2001

32,287

2002

33,645

2003

37,018

2004

39,01540,000

30,000

20,000

10,000


28.6% of transactions by individual customers were carried out on the Internet,which represents 500 million transactions.

The Financial Manager, an internet banking tool for businesses, ended the year with768,000 companies enrolled, responsible for 600 million transactions, an increaseof 17% and 22% respectively. Of the total of those enrolled, 328,000 users aremicro and small businesses, which carried out over 50.5 million transactions.Through Government Self-Service, the Internet banking tool for this market, 26.3 milliontransactions were carried out.

The Banco do Brasil Call Center (CABB) is a relationship channel that, on average,answered 580,000 calls a day in 2004. Through this channel, with a single phonecall, customers can get information about products and services, register criticismsand suggestions, and carry out transactions such as payments, transfers,investments, withdrawals, loans, and obtain balances and statements. The BB CallCenter also works in the active telemarketing market, offering and publicizingproducts and services for customers and potential customers.

Besides these channels, BB has several websites or specialized pages:

The Agronegócios-e website (www.agronegocios-e.com.br), aimed

at the main agribusiness segments, showed a volume of business of

R$2.2 billion in 2004.

The Licitações-e website (www.licitacoes-e.com.br), a solution for

purchasing and contracting services that BB makes available on the

Internet for Government, which ended the year as the main system for

electronic purchases carried out by government bodies from all over

the Country, with 10,000 tender processes that totalling R$1.7 billion.

Internet Customers (in milllons)

7.0

6.0

5.0

4.0

3.0

2.0

1.0

2.6

2000

4.0

2001

4.8

2002

6.0

2003

6.9

2004


The Virtual International Business Meeting Room (www.bb.com.br/ Sala

Virtual de Negócios Internacionais) which makes it possible to carry out

export finance transactions in Automatic mode (ACC/ACE) and on-line on

the Exchange Spot Market. The number of transactions using this method

increased from US$994.8 million in 2003 to US$1.7 billion in 2004, up

79.6%. The Bank is the pioneer and market leader in offering this service.

Foreign Trade Counter (trade.bb.com.br) is an electronic environment that

offers exporters who are BB customers the possibility of monitoring the

entire sales process abroad, up to the limit US$10,000 per transaction.

The Purchase and Sale of Shares website (www.bb.com.br/ Compra

e Venda de Ações) which allows BB customers immediate access to

trading on Bovespa. At the end of the period, the turnover through this

channel amounted to R$597 million.

The Investor Relations website (www.bb.com.br/ri), reformulated in 2004,

which, besides offering up-to-date reports and institutional information

disclosed to the market, also has an unprecedented innovation

Shareholder’s Room, a space created to provide BB shareholders,

including those without a current account, with information such as

statements and the balance of their shareholding position.

BB is the leader in the use of mobile banking solutions in Latin America, confirmingits leading position in the use of innovative and secure technologies for carrying outbanking transactions. The Bank’s current account holders can make payments ofbank, payment slips and utility bills, carry out transfers between accounts andbetween banks, consult balances and statements, reload prepaid cell phones withcredit and make donations to the Zero Hunger Program.

At the end of 2004, BB and Caixa Econômica Federal started tests on the projectfor sharing the external networks of automated teller machines and lottery houses.As a result of this partnership, the customers of the two institutions will enjoy moreconvenience, speed and security in their banking transactions. In the course of2005, the project will be launched onto the market in Brasilia (DF), Curitiba (PR) andRecife (PE), to extend gradually to the rest of Brazil.


Abroad

Abroad, the Bank has the largest service network of all Brazil's banks. Present in21 countries, the Bank’s foreign network is responsible for business all over theworld. The network of BB’s representative banks ended 2004 with 1,728 financialinstitutions, present in 152 countries.

In addition, BB makes various websites available, in the appropriate language,and with products and services that are compatible with the needs of the differentmarket niches. Prominent amongst these are Nippon-Brazilian and Banco doBrasil Express, aimed at serving customers resident abroad.

In addition, in 2004, Banco do Brasil signed an agreement for the retail segment withthe Sumitomo Mitsui Banking Corporation, Japan's largest bank, so that BB customersin that Country could gain access to 6,500 Automated Teller Machines, which addedto the 25,000 self-service terminals in the Japanese post office network, amounts to atotal of 31,500 terminals available to Banco do Brasil customers in that Country.

Distribution Network Abroad

USA

Mexico

Panama

Cayman Islands

Venezuela

Peru

Chile

Angola

Portugal

France

United Kingdom

Spain

NetherlandsGermany

Italy

China

Hong Kong

Japan

Austria

Argentina

Paraguay

Bolivia


Technological Infrastructure

In 2004, Banco do Brasil’s technological processing capacity grew by 35.7%,expanding to 72,796 million transactions per second (MIPS). The storagecapacity of the Tape Library totaled 7.1 million terabytes, and on hard disksamounted to 274,700 TB.

In 2004, the availability of the central systems and also of the Internet self-servicefacility, was 99.9%.

Processing Capacity (Mips*)

20,000

40,000

60,000

80,000

11,930

2000

11,930

2001

35,357

2002

53,661

2003

72,796

2004

* Millon of Information per Second

Storage Capacity (Terabytes)

50

100

150

200

250

300

67.47

2000

88.65

2001

179.33

2002

282.83

2003

282.83

2004

Essay for Monetary Policy

SUMOC – the Credit and Currency Agency, created in 1945, was the first

attempt to set up a monetary authority in Brazil. Until then, this role had been

performed by Banco do Brasil, alongside its commercial activities and the

stimulation of industry and agriculture through the granting credit – a role that

it is still performing to this day for the benefit of the Country's development.

On December 30, 1959, at the zenith of Kubitschek's years in power, SUMOC

Instruction 192 introduced a reform to the Country's foreign exchange

regulations, which opened up the exchange rate for exports. Thus exports

started to be paid for partly in cash and partly in Export Bills, issued by Banco

do Brasil. These securities could be endorsed, had a six-month term and paid

interest at 6% per annum – being widely traded outside the stock exchange, on

the over-the-counter market. This was the first experiment in the use of short-

term securities to carry out monetary and foreign exchange policies.

In March 1961, during Jânio Quadros government, Import Bills were created,

circulating in the same way and to the same degree. In 1964, the military

government issued securities which were to dominate the capital markets in

the second half of the twentieth century. They were called ORTNs, or

National Treasury Adjustable Bonds, and they introduced the hedge against

inflation as a feature of Brazil's economic culture. Banco do Brasil was the

issuing agent and main dealer in these bonds, publicizing them and making

them popular with the general public.

Wat

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illy.

Ban

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1961

.

Relationship with Stakeholders

Banco do Brasil's relationship with its shareholders, employees, outsourced staff,suppliers, partners, customers, market, creditors, competitors, communities, governmentsand the environment is founded on the Charter of Principles of Socio-environmentalResponsibility and on BB's ethical principles and norms of professional conduct.

Charter of Principles of Socio-environmental Responsibility

1. To act in harmony with Universal Values, such as: Human Rights,Fundamental Labor Principles and Rights, Principles for Environmentand Development.

2. To recognize that all beings are interlinked and all form of life is important.

3. To repudiate prejudice and discrimination on gender, sexual orientation,ethnic factors, race, creed or of any kind.

4. To strengthen the vision of Socio-environmental Responsibility as apermanent investment, necessary for the future of humanity.

5. To perceive and take advantage of BB corporation's strategic position,in relations with the Government, the Market and Civil Society, in order toadopt its own model of Socio-environmental Responsibility management,in keeping with the level of the corporation and the challenges ofcontemporary Brazil.

6. To hold transparency, ethics and respect for the environment as fundamentalto the Bank's management and business practices.

7. To foster relationships with third parties following criteria that observe theprinciples of socio-environmental responsibility and foster economic andsocial development.


Sustainability

8. To stimulate, disseminate and implement practices of sustainabledevelopment.

9. To look on customers and potential customers, first of all, as citizens.

10. To establish and to disseminate good practices of corporate governance,preserving the commitments to shareholders and investors.

11. To contribute towards the intellectual, professional, artistic, ethical andspiritual potential of its employees and other staff, putting this to thegood use of society.

12. To found relationships with employees and other staff based on anethical approach and on respect.

13. To contribute towards the universalization of social rights and of citizenship.

14. To contribute towards the inclusion of people with special need.


Employee Profile

Diversity (%)

Dec/04

65

35

Men

Women

Distribution by Age Group (%)

Dec/04

13

25

35

27

Up to 25 years old

From 26 to 35 years old

From 36 to 45 years old

Over de 45 years old

Relations with Employees and Other Staff

The actions carried out by Banco do Brasil in its relationship with its employees andother staff, aim to stimulate the intellectual, professional, artistic, ethical and spiritualpotential of this target audience, for these to be replicated widely in society.

In the review of its policies, the Bank's concern about the relationship with itsemployees is strongly evident. For the first time, a review was included from thestandpoint of internal organizational behavior.


Race %

2001 2002 2003 2004

Race/Color Men Women Men Women Men Women Men Women

Not Informed 5.15 3.48 4.30 2.86 3.49 2.23 2.82 1.85

Yellow 1.59 1.43 1.55 1.40 1.57 1.36 1.49 1.31

White 47.25 25.60 47.85 26.31 48.18 26.92 48.42 27.20

Indigenous 0.39 0.18 0.38 0.16 0.35 0.14 0.31 0.12

Black 1.20 0.42 1.19 0.44 1.21 0.49 1.27 0.53

Mixed 9.40 3.91 9.54 4.02 9.84 4.22 10.21 4.45

100

80

60

40

20

Distribution by Gender and Management Positions (%)

2004

73.0

2003

74.0

2002

81.0

2001

78.0

2000

78.0

27.026.019.022.022.0

Women

Men

Distribution by Education (%)

10.5

45.1

43.1

1.2

Specialization, Master Degree

or Doctorate

Higher

Secondary

Elementary


BB's commitment to the quality of life of its employees and other staff can be notedfrom the benefits and actions that, in some form, have reached the 82,671 employees,10,339 interns, 8,270 temporarily contracted staff and 4,699 adolescents in trainingthat the Bank had in its workforce at the end of 2004.

Health and Quality of Life: Attentive to promoting health and quality of life in theworkplace, in 2004, Banco do Brasil contributed, in the form of an employer'scontribution, R$358.3 million to Cassi – Caixa de Assistência dos Funcionários– which celebrated its 60 years of existence in the period.Besides attending to BB's employees, pensioners and retired staff and theirdependents – 392,849, Cassi makes its Associates Plan available to 272,846relatives up to third-generation of these beneficiaries.In 2004, Cassi held 750 events, such as talks about smoking, osteomusculardisturbances related to work, physical activity, ergonomy, postural correctionand labor gymnastics for 10,653 employees.With a focus on prevention, the Bank runs, in partnership with Cassi, the MedicalControl of Occupational Health Program for its employees, which, in the year,carried out 78,000 examinations, corresponding to roughly 95% of the totalBB’s employees.Another initiative of a preventive nature was the launch of the Quality of Life atWork pilot project, in 48 locations in various parts of the Country, which offersemployees anti-stress practices – such as labor gymnastics and walks – andinformation on the importance of nutrition and healthy habits.The food grant is another benefit offered to employees and other staff – includinginterns, contract staff and adolescents in training – so as to ensure their qualityof life. In 2004, R$509.1 million was set aside for this benefit.

Supplementary Pension Plan: The Bank also contributes to Previ – Caixa dePrevidência dos Funcionários – the largest pension fund in Latin America,with 130,277 associates (75,102 working and 55,175 retired) and 247,918dependents. In 2004, the employer's contribution was R$499.9 million. Previworks to guarantee its participants pension benefits that are supplementary tothose of the Official Social Security.

Education: With its commitment to fostering the development of its employees,BB offers opportunities for classroom and distance-learning training, as well asCorporate Programs such as graduation, post-graduation and BBMBA, besidesthe Banco do Brasil Corporate University – UniBB.Available on the website uni.bb.com.br, UniBB seeks to make access toknowledge more widely available for employees and society at large, offeringcourses and expanding the quality of the services provided to society.


In 2004, R$30.2 million was invested in training andqualification, and 3,311 undergraduate scholarships,3,547 scholarships for development and postgraduation,and 467 for foreign language studies were granted.The average training time per employee amounted to99.35 hours, which was attained through 11,131opportunities for training in the classroom and 64,189for distance-learning training, as well as Corporate

Programs like graduation, postgraduation and BBMBA. At the end of theperiod, 37,312 employees had higher education qualifications, and 8,719 helda specialization, a master's degree or a doctorate.From 2005 onwards, the quantity of hours of training per employee will startbeing part of the Labor Agreement at the units – an instrument for measuringresults and one more initiative contributing to the constant professional trainingof Banco do Brasil's employees.

One important aspect in the period was the broadening of the access toprofessional training for clerks, executive cashiers and ancillary services careerstaff, who up till that time had not taken part in certain programs.In addition, the Banco do Brasil Library offers employees the use of a collectionof over 25,000 items, including books, videotapes, films on DVD, leaflets,periodicals, cassette tapes, CDs and diskettes, with a focus on the areas ofEducation, Administration, Economics, Information Technology, Law andAccountancy, amongst others. The collection also houses a bank of Theses,Dissertations and Monographs with over 2,000 works, which can be requisitionedvia a corporate system by any employee, regardless of location.In 2004, the Library lent out about 3,500 works a month and made use of aninvestment of R$60,000 for acquiring books, videos and periodicals.

Labor Relations: Fulfilling its commitment to maintaining a dialogue of apermanent nature with its employees, which it began in 2003, the Bank and the

Average of Hours of Training per Employee

100

80

60

40

20

2000

92.0

2001

80.0

2002

80.4

2003

85.4

2004

99.4


trade union movement, in the context of year 2004, held rounds of negotiation witha view to entering into a collective wage agreement.BB's overall proposal incorporated some advances in relation to NationalFederation of Banks (FENABAN) proposal. In spite of this, there was no consensuswith the trade union movement for the agreement to be formalized, which resultedin the suspension of work by employees of all Brazilian banking system.In the judgement on the collective salary agreement taken to court by the NationalFederation of Workers in Credit Companies (CONTEC), the High Labor Court(TST) granted an 8.5% increase, applicable to salaries and other items of aremunerative and beneficial nature, in addition to an amount of R$30 for thosewho earn up to R$1,500.00.Even after the TST's decision, the Bank continued the process of negotiationwith the trade union movement, seeking to enter into a collective agreement;this occurred on 24 November 2004 and encompassed the decision of the TSTand other clauses of a labor, social and union nature.Also to be emphasized was the negotiated solution to 269 lawsuits in the courtsagainst the Bank. Of these, six were collective lawsuits that had been runningtheir course in the Labor Courts for over 15 years, involving 2,505 employeesand former employees.One of the Bank's priorities is to humanize the relationship with its workforce ofmore than 90,000 individuals, through various channels that are permanentlyopen and available. Examples are the portals on the Internet and Intranet, theNews Agency (a real time news channel), the bb.com.você magazine, TVBB(corporate TV) and Banco do Brasil's Professionalization and InternalOmbudsmanship Notebook, which accepts denouncements, grievances,suggestions and praise from its employees.

Profit Sharing: As part of its employee profit-sharing scheme in 2004 the Bankdistributed R$373.3 million to its staff. For the second year running, the negotiationroute replaced the systematic distribution of profit-sharing in a unilateral manner.

Employee Profit Sharing (R$ million)

400

300

200

100

2000

60

2001

66

2002

145

2003

273

2004

373


Employee Satisfaction: To assess the satisfaction of its employees with theBank, BB uses the Organizational Climate and Commitment Survey. The surveyhas been applied on a half-yearly basis since 2001, and, at the end of 2004, it hadbeen answered by 56.9% of the Bank's employees, with 98.1% of respondentsgiving answers ranging from satisfactory to desirable. Answered electronically,the Survey preserves the principles of anonymity and confidentiality.

Community Relations

Present in 2,984 municipalities, the Bank orders its community relations by theuniversalization of social rights and citizenship and by the strengthening of its workas a socially responsible company.

Culture

Banco do Brasil contributes to culture through financial support for various artisticforms in the three Banco do Brasil Cultural Centers – Brasilia, Rio de Janeiro andSão Paulo.

In 2004, over 3.7 million people visited the Banco do Brasil Cultural Centers.234 events were held (exhibitions, educational programs, creation workshops,amongst others), some free of charge and others at popular prices, in the areas ofmusic, dance, theater and cinema, with a donation of 20% of the box office takingsto the Federal Government's Zero Hunger Program.

The intensification of activities of an educational bent was decisive for theincrease in public seen in 2004. About 395,000 students took part in theEducational Program.

Sport

In 2004, BB continued to invest in sport. For the 3rd year running, it supported theBrazilian men's and women's volleyball teams, organized the Banco do Brasil BeachVolleyball Circuit, and developed the Brazil Tennis Project. This ongoing investmenthas brought exceptional results for Brazil, such as the gold medals of the men'steam and of the beach volleyball pair Ricardo and Emanuel; and the silver medal ofthe Adriana Behar and Shelda pair at the Athens Olympics.

Another sportsman sponsored by BB who merits a strong mention is yachtsmanRobert Scheidt, seven-time world champion and Athens Olympics gold medallist.


At the Beach Volleyball Circuit and Tennis events, schools are set up that cater toyoungsters between 11 and 16 years old, stimulating interest in sport. In 2004, 5,260youngsters took part in the venture.

The sportsmen sponsored by BB and Olympic Ambassadors like Carlão, Pampaand Giovane also perform social actions, with visits to such entities as hospitals andday nurseries.

Promoting Wider Access to Credit

Driven by new market opportunities and also by the desire of the FederalGovernment to encourage the banking inclusion of the population from the informalsector and of lower income, the Bank created Banco Popular do Brasil.

Besides being included in the financial system, the customers of Banco Popular doBrasil have been able to enjoy a better quality of life, through the access to credit withan interest rate of 2% a month. There are now 1.1 million current account holders and5,530 points of service in 1,540 municipalities, including all the state capitals. In 2004,the volume of loan transactions was R$21.3 million, granted to 197,000 customers.Some 2 million payment and receipt transactions were carried out.

Furthermore, amongst the measures for democratizing access to credit, Banco doBrasil opened, in 2004, about one million simplified current accounts, exempt fromfees and CPMF, for pensioners and beneficiaries of the National Institute of SocialSecurity (INSS) who receive up to two minimum salaries.

In June/2004, the Bank launched BB Crédito Pronto, a microcredit line intended forlower income individuals. It brings together conditions suited to the credit needs ofthe target public, such as accessible financial charges – interest rates of 2% permonth, a term of between 4 and 24 months, and a low fee. In 2004, 488,000 loanswere contracted, with the funds invested totaling R$241 million.

Also in its support for Micro and Small Businesses, BB stood out: funds in the orderof R$17.2 billion were made available for working capital and investment financetransactions in 2004. The importance of this segment for the Brazilian economy canbe expressed in other figures: there are 5.5 million small enterprises, which isequivalent to 99.4% of the total of formal companies; they employ 41.4% of the 27.2million workers with a signed labor contract. To dimension Banco do Brasil's workwith micro and small businesses, suffice it to note the quantity of accounts that BBhad in its portfolio of corporate bodies at the end of 2004: over 1.3 million MSBcustomers, confirming it as the partner bank for this segment that is capable ofgenerating employment and income in a short period of time.


As the main financing agent of Brazilian agribusiness, Banco do Brasil offers severallines of credit for financing cooperatives and their members. In its support forcooperative and associative movements, Banco do Brasil has been structuring exclusiveproducts and services for cooperatives, which are of equal benefit to their members.Partnerships are being established with credit cooperatives, for these to act asbanking representatives, expanding the provision of banking services for those whoare cooperative members and those who are not, including for communities lackingthe traditional bank network and without access to these facilitators.

Zero Hunger Program (Fome Zero)

Since 2003, BB has been taking an active part in the Federal Government ZeroHunger Program, acting essentially in the pillar at the structural policy level, aimedat fighting the more deep-rooted causes of hunger and of poverty. Over 1.5 millionindividuals have been benefited by the set of actions carried out by the BBConglomerate in some 1,935 municipalities.

In parallel, BB drew up a specific action plan, observing the guidelines of the ZeroHunger Program. The following actions, detailed in the Social Action Panel, areexamples: Adolescents Training Program, Digital Inclusion Program, BB Volunteers,BB Educate, Bread and Beauty Workshop, and the gathering of foodstuffs at thesporting and cultural events sponsored by the Bank, amongst others.

Besides the programs mentioned, BB stands out for its strategy of SustainableRegional Development (DRS), which aims at generating employment and income ina sustainable, inclusive and participative manner, following an economic logic andtaking into consideration local potential and characteristics of the communities.

In the first stage of implementing the strategy, priority was given to productiveactivities from a value chain perspective, in localities with the lowest HDI (HumanDevelopment Index) of the Country, in the Northern and Northeastern regions, in themunicipalities of the Itabapoana basin in Rio de Janeiro, and in the municipalities ofthe Mucuri, Espírito Santo and Jequitinhonha valleys, in Minas Gerais, and of theRibeira valley, São Paulo.

In 2004, over 16,000 entrepreneurs were benefited and 120 DRS business plansapproved, with funds in excess of R$47 million.

Banco do Brasil Foundation

The Banco do Brasil Foundation, the main social link of Banco do Brasil, is presentin 800 municipalities and aims at overcoming the conditions of poverty of significant


20032000 2001 2002 2004

Individuals Benefited (million)

1.4

2.1

3.23.6

3.8

4

3

2

1

The Banco do Brasil Foundation, the Bank’s main social

arm, is present in more than 800 municipalities, aimed at

overcoming conditions of poverty in a significant proportion

of the population.

portions of the Brazilian population. It fosters actions in social investment, throughpartnerships, and seeks sustainable solutions that contribute towards the socialtransformation of communities.

With its proposition of mobilizing, coordinating and managing actions of socialtransformation, the work of the Foundation is focused on the areas of Education andCulture – through the AABB Community, BB Educate, Champion School, Memory,Bioconsciousness, and Digital Station programs – and of the generation ofemployment and income – through the Work and Citizenship, Berimbau, Tecbor,Cashew Nut Minifactories, Recycling, and Mandaracu Fishing programs – withinvestments in processes that come to become self-sustainable.

With the target of acting in the structural policies of the Federal Government's ZeroHunger Program, the Banco do Brasil Foundation gives priority to its social intervention,observing the human, economic and environmental dimensions, and so contributingtowards the promotion of citizenship, with quality of life for all Brazilians.

In 2004, Banco do Brasil passed on R$59.6 million to the Foundation. The programsare detailed in the Social Actions Panel and on the website www.cidadania-e.com.br.

Social Initiatives Panel

Banco do Brasil publishes a Social Actions Panel to provide an overview of theactions of a social nature carried out and supported by BB and by the Banco doBrasil Foundation, including the initiatives included in Banco do Brasil's Action Plan,under the Federal Government's Zero Hunger Program.

Education, culture and citizenship


AABB Community

Banco do Brasil ItinerantCultural Project

Citizen Education

Olympic Ambassadors

Champion School

Beach Volleyball andTennis Schools

To offer supplementary education, an introductionto sports, cultural and leisure activities forelementary school level children and young peoplewho belong to low income families, stimulatingpersonal development and self-esteem.

Itinerant Project takes cultural activities to citiesconsidering regional differences. Art presentedin various cities around Brazil. Supports artisticpresentations, in the areas of music, theatre,graphic arts, photography, and dance.

Develop/coordinate actions for forming leaders and community agents by diagnosinglocal needs, using instruments for social action,principles for ethical action in community work,and communication channels for divulging work carried out.

To stimulate national pride and to foster a senseof well-being, fraternity and valuing peoplethrough talks and encounters with Braziliansportsmen, Olympic champions, in homes,day nurseries, hospitals and other entities.

To improve the quality of teaching, by optimizingpublic and school management, improvingefficiency in relation to the use of funds setaside for education, as well as reducing the levelof truancy and relegation in classes at municipalelementary schools.

At the events of the Beach Volleyball and TennisCircuits, schools are set up that cater toyoungsters of between 11 and 16 years old,stimulating their interest in sport.

Banco do Brasil Foundationand National Federation ofAthletic Associations of Bancodo Brasil (FENABB)

Secretariats for Culture Private Companies

–

–

Ayrton Senna InstituteMunicipalities Departments ofEducation

–

Initiative Objective Partners


To attend to 53,000 children and adolescentsfrom 7 to 17 years old.

More than 100,000 visitors.

800 social educators trained

No targets were set.

Caters to 47 municipalities and 2,869 school units.


The program attended to 50,819 children and adolescents in379 municipalities, besides qualifying 3,532 educators.

150,000 visitors.

1,313 social educators trained(668 employees of BB and 645 community leaders).

Sportsmen made visits to over 50 entities.

735,000 pupils were catered to in 47 municipalities from 24 states.

5,260 youngsters took part.

Target for 2004 Results Achieved


Digital Station

Citizenship Comitteeson BB

BB Educatiln Program

Tennis on WheelchairProgram

Digital InclusionProgram

Memory Project

To foster digital inclusion in communities notserved by information technology resources.

Implement actions in all states to stimulateformation of volunteer committees by employeesof Banco do Brasil to take part in the ZeroHunger Program.

To teach young people and adults to read andwrite and to qualify volunteer teachers.

Promote the sport, social inclusion of disabledor mentally handicapped athletes.

To foster digital inclusion by setting upcommunity telecenters, facilitating the use ofnew technologies by the communities served,stimulating their introduction and organization.

To spread culture more widely in society usinggreat personalities or events in Brazilian history.

Banco do Brasil Foundationand local bodies

Committee of Public Entities toCombat Hunger and DefendLife (COEP)BB’s Employees

Brasilcap, Ministry ofEducation and Municipalities

–

Federal Government andpublic and private institutions.

Petrobras


Education, culture and citizenship | Cont.

Child and Life Project Reduce infant mortality from cancer in Brazilthrough full care of these young patients,focusing on two distinct points: early diagnosisand adequate treatment of the disease. Eightcenters of reference for diagnostic laboratoriesalready implemented.

Ministry of Health


Life Support


Implantation of 50 Digital Stations in 50 municipalities.


To teach 80,000 young people and adults toread and write.

43 athletes participating.

Implantation of 1,000 telecenters.

To produce 42 kits for Traveling Exhibitions,18,000 pedagogical kits, 6,000photobiographical books and 6,000 documentaryvideos, to benefit 4,600 public libraries and16,000 public schools, in 600 municipalities.

72 stations were set up in 63 municipalities, involving 10,800pupils in professional training courses and 65,200 servedthrough digital services.

827 committees registered

There are 145,992 persons undergoing the learning process,and 47,443 pupils that have completed the course.

112 athletes participating.

851 digital inclusion outlets were set up, of which 511 weretelecenters and 340 information technology rooms.

Homage to the physician, nutritionist, geographer andprofessor from Pernambuco, Josué de Castro, with thetheme “Josué de Castro, for a world without hunger.20,000 teaching kits were distributed to 18,000 publicschools, and 6,000 copies of the photobiographical bookwere given to 4,600 public libraries.The 60 display kits produced have traveled over some 800municipalities all over Brazil.


Invest in qualification of health professionals,enter agreements for restructuring andmodernization of five more pediatric oncologyservices.

Implementation of three agreements for restructuring ofpediatric oncology services and technical meetings witheight Centers for standardizing procedures.



Support for productiveactivities in goat farmingand bee keeping

Collecting foodstuffs atthe sports and culturalmarketing circuits andother events and actionsof BB volunteers

Bank of SocialTechnologies

BB Organic Farming

Bioconscience

Productive Chain of theCashew Nut

To support family farmers involved in the activitiesof goat farming and bee keeping in 13 states ofthe Northern, Northeastern and Central-Westernregions, through a technical partnership.

To foster the collection of foodstuffs at thesporting and cultural events and in the actions of the volunteers.

To identify and disseminate creative low cost social technologies, capable of solvingproblems in the areas of water, nutrition,health, electricity, education, the environment,income and housing.

To cater to rural agricultural producers who use the organic system for production, by meansof rural credit funds and modern marketingmechanisms, respecting the peculiarities of thesector, based on the certification of the product'sorganic quality, supplied by suitable certifiers.

Disseminate environmental practices for rationaluse and reutilization of natural resources basedon two pillars: solid and hydro resources.

To encourage cooperativism, to take advantageof regional potentialities, and to invest in theexpansion of productive chains with self-sustainable potential. The project aims atforming a new culture amongst the smallproducers of cashew nuts, who are giventraining to improve the quality of the product,and increase their income.

SEBRAE, EMBRAPA,Unitrabalho, BB/DRS, ADSand Icco

Brasilveículos, companies andsociety

Unesco

–

Corporate Commitment toRecycling (CEMPRE);Association of Paper,Cardboard, and RecyclableMaterial Collectors, SocialEnvironment Institute

EMBRAPA AgroindústriaTropical, Telemar, MTC;State Governments


Creation of Opportunities


Catering to 2,500 families.

To collect 1.2 tons of foodstuffs.

Dissemination of social technologies identified.

Provision for making available funds ofapproximately R$8 million.To form closer relationships and carry outstudent exchange schemes with the maincertifiers of the organics market, includinginternational ones, with a view to creating acertification system accredited by the Bank,in order to qualify our products for theinternational market.

Reaplication of 23 social technologies.

To re-published 11 mini-factories; to set up 4 mini-factories and 7 classification,implantation and processing units.To support the organization and qualification of 15 associations and cooperatives, generating600 jobs and benefiting 3,000 people.

5,385 farmers were catered to in 16 municipalities.

1.572 tons of foodstuffs were collected.

1st Conference and Display of Social Technologies held in São Paulo, bringing together 500 participants and 10,000 visitors

R$6.8 million made available. An significant result, given the deficiencies of the organics sector, such as: technicalcapacity restricted to a few producers, lack of integration in the production chain, low dissemination of marketinformation about the potential and the marketing ofthe products, and low domestic demand.

21 social technologies reapplied;46 municipalities served;143 technical staff trained;1,226 people trained to carry out social technologies.

3 mini-factories were re-published, 5 mini-factories were setup, and two classification, implantation and processing unitssupported. The organization and training of 4 cooperativeswas supported, with 758 jobs being generated and 2,307people benefiting.



Productive Chain ofRecyclables

Construction of Cisternsin the Semi-arid region

Contracting oftemporary labor forsports and culturalmarketing events

Diversity

Sustainable RegionalDevelopment (DRS)

To foster the social inclusion of garbage pickers,by encouraging their organization incooperatives and associations, besides addingvalue to the recycled products throughinvestment in equipment and training.

To sponsor the construction of cisterns in thesemi-arid regions, mobilizing the families living inthe region in search of access to drinking waterfor their own consumption, as well as for thestorage and use of rainwater.

To generate temporary jobs at the sports andcultural marketing events sponsored by BB.

Contribute to inclusion of segments stigmatizedby society. With this objective in mind, Diversityinitiated activities focusing on the developmentof activities for handicapped individuals.Consolidate data, stimulate potential, promotediscussion of the theme, and reducing bias arethe goals of this initiative.

A business model that aims a generatingemployment and income in a sustainable,inclusive and participative manner, following an economic logic that takes into considerationthe potential and local characteristics ofthe communities.

Unitrabalho, ADS, OAF,Ceapor

FEBRABAN; Articulação noSemi-Árido Brasileiro (Supportfor Semi-arid Regions);Extraordinary Ministry for FoodSecurity

Brasilveículos and privatecompanies

Getúlio Vargas Foundation(FGV) – RJ; Escola de Gente;Children’s Rights Agency(ANDI); Center for the Defenseof Human Rights (CDDH/BetimMG); USP/Rede Saci; SpecialSecretariat for Human Rights(SEDH); National Coordinationfor Integration of HandicappedPersons (CORDE); NationalCouncil for Rights of theHandicapped (VONADE), andSENAC Third Sector/SP

Governments, privatecompanies, universities,cooperatives, NGOs, tradeunions and associations


Creation of Opportunities | Cont.


To benefit 50 cooperatives and associations,with the generation of 2,000 jobs.

To construct 10,000 cisterns.

To create 7,930 opportunities for temporaryemployment.

Carrying out 2 PPD meetings;Carrying out 1 teaching meeting;Serving 3 municipalities with meetings.


66 cooperatives were benefited, with 4,197 jobs generated in25 municipalities.

10,439 cisterns were constructed (from August/03 to May/04).

11,129 temporary jobs were created: 8,430 at the sportsmarketing events and 2,699 and the cultural marketingevents.

3 PPD meetings;1 teaching meeting;4 municipalities served.

Over 16,000 entrepreneurs were benefited and 120 DRS business plans approved, with funds in excess of R$47 million.



Support for marketingthe production arisingfrom family farming andagrarian reformsettlements

Generation of fundingfor social projects

Generating Employmentand Income throughExports (GERE)

Social Funds Manager(GRS)

Pronaf “B” line of credit

Pronaf “Semi-arid” lineof credit

To support the planning of the production andmarketing of products arising from this segment,using mechanisms of electronic marketing,sale in advance, strengthening of the culture ofconsuming products coming from family farmingand agrarian reform, and encouragingassociative movements.

Pass in of 50% of the management fee of FundoBB-DI Básico (an investment fund) and SeguroVida Mulher (a life insurance for women) toprovide increased investiments in needycommunities covered by Banco Brasil Foundation.

To support the inclusion in the foreign tradevalue chain of the products and servicesresulting from ventures carried out followingBanco do Brasil's work in Zero HungerCampaign, Sustainable Regional Development,Local Productive Arrangements and other BBsocial responsibility projects that have thestrategy of developing productive organizations.

To manage the social funds raised for ZeroHunger Campaign in BB. The system makes itpossible to provide visibility and transparency atall the stages of the process. Updating systemsto allow access to other companies, entities andgovernment bodies and the inclusion of the“services” module.

Has the objective of generating employment and income in agrarian areas, through makingavailable a line of credit intended for financingsmall investments, including those other than for livestock, carried out by farming families,including the remnants of quilombos andindigenous people.

To make available a line of credit intended forfinancing water supply infrastructure, includingfor desalinization projects, in the Brazilian semi-arid region, allowing better use of the land, andconstituting a tool for fixing man in theCountryside and avoiding the rural exodus.

Conab, with funds from theMinistry of Social Developmentand Fight against Hunger.

–

International Trade Center(ITC);Costa do Sauce Condominium

–

–

–




To benefit 30,000 families of family farmers andagrarian reform settlers.

Pass in of R$1.6 million.

To provide business support for the inclusion ofproducts and services produced from ventures inthe foreign trade chain.

To be accessible to companies, entities andgovernment bodies, including the “services”module.

To provide access to credit for 25,000 beneficiaries.

To train 500 individuals in the second half of 2004.

CONAB carried out advance purchases, by means of CPRFoodstuffs, in the amount of R$34.1 million, benefiting15,391 families.

Another 25,439 farmers were supported by an incentive formarketing the production.

Pass in of R$2.4 million.

The program has ceased to focus only on the pilot stage andhas started to encompass the inclusion in the internationalmarket of products arising from all the productiveassociations supported by BB in the context of its work inthe area of social responsibility.

The 1,740 BB citizenship committees registered with theGRS catered to over 1.4 million people.

6,077 transactions were formalized, in the total amount ofR$5.9 million, benefiting 24,308 people.

1,504 transactions were contracted, totaling R$7.8 million.



Food Security Workshop(Oficina de SegurançaAlimentar)

Bread and BeautyWorkshop(Oficina Pão e Beleza)

Adolescent TraineeProgram (Programa AdolescenteTrabalhador)

Professional TrainingProgram for Rural Transformation(Programa Agente daTransformação Rural – ATR)

National Program forCooperatives Incubator(Programa Nacional deIncubadora deCooperativasPopulares – Proninc)

Sustainable Costa doSauípe Program –Projeto Berimbau

Community VegetableGarden Project(Projeto HortasComunitárias)

To provide guidance to employees of the BBCommunity, retired staff and social educatorsabout food security principles.

To foster qualification of employees of the BBcommunity, retired staff, social educators andcommunity leaderships about the principles ofZero Hunger, social inclusion, mobilization,strengthening of citizenship and sustainableregional development.

To offer an opportunity of employment andapprenticeship to young people from all theregions of the Country, with an age of between 15 years and 17 years 10 months and with familyincome of up to half a minimum salary, who arestudying at least the 7th form of elementaryschooling or primary school evening classes andenrolled in a welfare program of associatedphilanthropic entities.

Select and implement the proposals contained indiagnostic reports carried out by ATR.

Consolidate the program, creating and developing popular co-operatives and jobs in needy communities

To support ventures for generating employmentand income, improving the socio-environmentalconditions of the inhabitants in the environs of theSauípe (BA) hotel complex.

The project aims at supplementing nutrition, withthe production of greens and vegetables at a lowcost, besides the possibility of generating incomefrom surplus produce.

–

–

–

–

Financing the Studies andProjects of the Ministry forScience and Technology –Finep; Committee of PublicEntities in the Combat ofHunger and for Life – Coep;Secretary of EconomicSolidarity – Ministry of Laborand Employment

Banco do Brasil Foundation;Previ; Costa do SauípeCondominium; Ministry Laborand Employment

–




To train 500 individuals in the second half of 2004.

To qualify 500 persons, giving priority toemployees who occupy management positionsin the support networks and branches.

To place 4,900 adolescents in the Bank's offices.

Make a database available to the Banco do BrasilFoundation, DRS and other partners of theAgribusiness Directorate.

Provide support for 12 incubators benefiting 120co-operatives with 4,800 associated workers.

To generate 400 jobs, benefiting 3,200 individuals.

To cater to 1,000 families.

Studies are being carried out for entering into partnershipswith SESI's “Brazil Kitchen” project, and “Education at theTable”, of the Roberto Marinho Foundation.

727 social educators were trained (179 employees and 548 members of the community).

By 31 December 2004, 4,699 adolescent workers had beenplaced in the Bank's offices.

During 2004, 5,738 adolescents took part in the program.

Database formulated with 118 diagnostic reports involvinghens, goats and bee keeping in 112 municipalities in 12states of North and Northeast region.

6 incubators benefiting 62 co-operatives with2,234 associated workers.

1,290 jobs were created and 2,870 individuals benefited.

5,073 families were catered to, in 38 municipalities.



Support networks forsocial inclusion

Passing on 20% of thebox office takings of theCCBBs to Zero Hungerand programs forcreating public libraries

Tecbor

Labor and Citizenship(Trabalho e Cidadania)

Volunteer Workers

Formation of partnerships with public andprivate entities to support digital inclusionprojects with a focus on employment andincome, sustainable regional development,and strengthening community networks.

To pass on 20% of the box office takings of theCCBBs to the "I Want to Read" Program of theFederal Government, which aims to bring to zerothe number of municipalities without a publiclibrary, and to other Federal Government programsfor creating public libraries, in partnership with theBB Project for Zero Hunger Program.

Involves qualifying/training of latex gatherers andsupply of equipment to use this new technique forprocessing latex.

Invest in actions that focus on generation ofjobs and income, such as professional training,business consulting, and management ofcooperatives.

To encourage the actions of volunteers on various projects, to train volunteers, to expand the voluntary social initiatives performed byemployees, and to train volunteers as informationtechnology instructors, amongst other ventures.

–

–

Universidade de Brasília,IBAMA, and the Ministry forSocial Development andCombating of Hunger

Ministry for Labor andEmployment, CentroCAPE,Cáritas (SP)

–




To formalize 15 partnerships with public andprivate entities.

To pass on R$95,000 to the programs provided for.

Studies of the productive chain to publicizethe process and implementation in otherstates of Brazil.

Expand actions related to generation of jobs and income; continue to render servicesprovided through Entrepreneur Rooms,support efforts related to professional

re-inclusion developed by Cáritas (SP),and hold workshops on entrepreneurship with descendents of Japanese immigrants.

To qualify 4,000 volunteers; to increase by 10% the numbers of employees and membersof their families enrolled. To train 4 groups (at different regional units) for providing accessto education and information technology forhandicapped persons.

15 partnerships were formalized: Ministry of Development,Industry and Foreign Trade; Special Secretariat for HumanRights of the Presidency of the Republic – Tutelary Councils;Anca – National Association of Agricultural Cooperatives/MST;Special Secretariat for Aquaculture and Fishing of thePresidency of the Republic; CDI – Committee forDemocratizing Information Technology; Cemina –Communication, Education and Information on Gender; APABB– Association of Parents and Friends of HandicappedEmployees of Banco do Brasil; Ministry of Communications;Ministry of Defense – Military Command of Amazonia;Government of Minas Gerais; Ministry of AgrarianDevelopment – National Family Farming Program – Pronaf;Special Advisers to the Presidency of the Republic – I Want toRead Program – Library for Everybody; Rural CommunityTelecenter Network – Gems of the Earth; Telemar; Senai

R$161,000 was passed on: R$52,000 to the Ministry ofSocial Development and Fight against Hunger; R$84,000 forthe I Want to Read Program, and R$25,000 for the Ark ofLiterature Program.

01 study carried out and 3 training sessions carried out inAmazonia training of 56 rubber-tappers in Manicoré-AM; 76rubber-tappers in Jamaraquá-PA; 32 rubber-tappers inAriquemes-RO and 42 rubber-tappers in Assis Brasil-AC

Among actions developed, we point out courses and lecturesof the Dekassegui Project, strengthening professionalism atcooperatives, entrepreneur rooms, re-inclusion of workers inthe job market.

There are 13,088 volunteers registered as BB Volunteers,an increase of 12%.Courses were launched to qualify BB Volunteers, and 876volunteers were qualified.



Customer Relations

Banco do Brasil sees its customers and potential customers, above all, as citizens.Based on its social and environmentally responsible stance, in search of identitywith the customer, Banco do Brasil goes beyond meeting the needs of the consumer,to fulfill the expectations of the citizen.

In developing and perfecting products and services, the Bank takes into considerationthe expectations of its more than 22 million customers. For example, BB's businessareas have been promoting encounters – the Customers and Managers Forum.At these forums, ways of perfecting the processes and the banking products andservices are discussed from the customer's point of view. This proposal is innovativein financial circles, and it will allow the Bank to better identify and understand thevalues and requirements to be developed.

The Bank's personal relationship with its customers takes place at its more than14,500 service outlets. For suitable access by people with special needs and by theelderly, the Bank offers 521 adapted branches and 156 automated teller machines.

BB places a series of additional communications channels at the disposal of itscustomers: the bb.com.br portal, on the Internet; over 39,000 ATM; 2,300 bankingrepresentative offices; telephone; fax; and POS; and it is getting ready to expandthe services of the BB Call Center and of mobile banking. Regardless of thecommunications channel used by customers to carry out their banking transactions,BB is always concerned with offering ease of use, speed and security.

In 2004, with the purpose of establishing an even closer relationship with itscustomers, Banco do Brasil developed and refined several of its services offered.BB's relationship with its customers through the Internet has been enhanced, withthe launch of two solutions, at the end of 2004: the Mailbox, private and secure, andthe Personal Financial Manager, developed especially for controlling householdbudgets. These innovations have sparked the interest of thousands of users and arelikely to undergo further refinements in 2005.

Another innovative proposal was the automation of the debt rescheduling processfor its private individual customers, with an active approach using the ATM networkand the bb.com.br portal. Through these channels, BB is now interacting with itscustomers, sending automatic debt maturity notices, requests for updating paymentsin arrears, and offering automatic rescheduling options. Besides expanding theuniverse of people catered to, the initiative has brought the benefit of cutting redtape from the process.


Relations with Government

In its relationship with the Federal, State and Municipal Governments, Banco doBrasil avails itself of its strategic position and adopts its own model of socio-environmental responsibility, in keeping with the challenges of contemporary Brazil,stimulating, disseminating and implementing practices of sustainable development.

In its capacity of agent of public policies, with its knowledge of the characteristicsof each region of the Country, with its far-reaching branch and its capacity for action,the Bank shows itself to be one of the main partners of the Federal Government in theimplementation of policies, programs and projects aimed at national development.

BB has relations with the public sector all over the Country, so as to strengthen theregional economies, by investing in productive activities. Accordingly, the BB's work withstates and municipalities has the purpose of contributing towards the development ofthe regional economies.

In its role as an agent of public policy, Banco do Brasil represents a link between theFederal Government and the rural producer, and knows better than anybody theneeds of those who dedicate themselves to the Countryside, at all the stages of theproductive chain. Agribusiness is one of the main sectors of the Brazilian economyand has fundamental importance for the growth of the Country.

For example, with the aim of facilitating the transport of agricultural produce to themarket, with the paving, construction and improvement of local roads in the state ofMato Grosso, an agreement was signed in 2004 between BB, the State Government,municipalities and associations of rural producers. Through this partnership, thepaving of about 800 km of roads was made possible, with BB's support in creditusing CPR.


Business with Cooperatives – financeintended for cooperatives

Surety for the Advance Purchase ofProduction (Rural Producer Schedule – CPR)

Family Farming – PronafGranting Credit to Family FarmersProgram

Long-Term Financing for ProductiveChains in Brazil

Granting Credit to Micro and Small UrbanEntrepreneurs – Proger Urbano Program

Financing for Micro and SmallBusinesses – BB Investimento

Financing for Micro and SmallBusinesses – BB Working Capital

Export Finance – ACC/ACE

Adaptation of specific lines of credit for servingthe cooperatives.

Granting surety and acquiring CPR from Augustonwards, making it possible to reduce thefinancial cost for rural producers and makingthe obtaining of business more flexible.

Creation of Pronaf's Simplifier Primer.

Financing investment projects, machines andequipment, with funds from the BNDES, FCOand FINAME

Simplification in the loan process for financing.

Simplification of the proposal and the formalcalculation of the payment capacity forfinancing; lengthening the term for payment of the installments of the BNDES Card.

Reduction in the interest rate of BB Giro Rápidoand launch of the BB Giro Automático creditlines.

Holding forums with the branch network in Brazil,with the objective of providing a clear picture ofcustomers' performance for account managers,making a comparison between what thecustomers are contracting in the market and what they are contracting with BB.

Initiative Actions performed


R$800,000 contracted

7,000 transactions contracted

R$1.6 billion contracted




R$971 million contracted







1 million transactions contracted



R$1,048,000 contracted










R$1.1 billion in amount contracted



1.1 million transactions contracted



Target for 2004 Results


Relations with Competitors

In its relationship with competitors, the Bank is ethical and civil, providing andexchange of information in a just and transparent manner.

Banco do Brasil takes an active part in the commissions of the Brazilian Federationof Banks – FEBRABAN. As examples of its participation, mention can be madeof its involvement in the Cisterns Project – which makes possible the construction ofcisterns in the Brazilian semi-arid region (10,439 cisterns built from August 2003 toMay 2004) – and its encouragement of the support of the other members ofFEBRABAN for donations in favor of the Childhood and Adolescence Funds.

In its relationship with competitors in 2004, the Bank strengthened partnerships,with a view to rationalizing procedures and reducing costs, through the sharing ofprocesses. Prominent amongst these partnerships is the “BB and Caixa SynergyProject”, established between BB and Caixa Econômica Federal in order to sharesolutions, generate business, optimize structures and reduce costs.

At the end of 2004, BB and Caixa started tests of the project for sharing thenetworks of the automated teller machines and of the lottery houses. With thispartnership, customers will be assured higher levels of comfort, ease of use andconvenience in their banking transactions.

In the handling of cash amounts, the Bank coordinates a pilot project for the sharing oflogistics of cash supplies for external ATM with other financial institutions. This initiativemakes possible a reduction in costs relating to stocking the terminals, as the routesare shared. The far-reaching nature of BB's logistical network is of great importanceto the success of this relationship.

In the benefit voucher segment, Banco do Brasil, through its investment bank, BBInvestimentos, formed an association with Bradesco, ABN AMRO Real and VisaInternational, for the creation of a company called Companhia Brasileira de Soluçõese Serviços – CBSS.

Registered under the Worker's Food Program of the Ministry of Labor and Employment,(PAT), CBSS offers electronic products for paying benefits, using the technologyand ready acceptance of the Visa brand, with the Visa Meal Voucher card and theVisa Food Voucher card.

The use of Visa Voucher cards in a wide-spread electronic network has created anew set of standards in this market, bringing significant gains for companies,commercial establishments, government, and workers in particular.


Relations with Suppliers and Partners

Banco do Brasil conducts its relationship with third parties using the principles of socio-environmental responsibility and criteria that foster economic and social development.

Besides criteria of an economic nature, quality specifications of the products andservices, reliability on delivery time limits, and observance of the legislation (Law onTenders), Banco do Brasil is developing, in its relationship with suppliers, initiativesaimed at durable and well-balanced relations, compatible with the principles ofsocio-environmental responsibility. An example of this is the requirement for meetingall the labor law and social security obligations, as well as the presentation of adeclaration from the suppliers about the non-employment of child and slave labor.

In 2004, observing the legal limitations, the Bank gave priority to the e-business routein order to carry out its process of purchasing goods and services. The contest overprices between the interested parties takes place on the www.licitações-e.com.brwebsite, developed by the Bank itself, and made available to other governmentbodies that wish to make use of the site to carry out their purchases. Electronicpurchasing makes the participation of buyers and suppliers even more widespreadin the tender processes, regardless of their location.

In 2004, R$1.7 billion was transacted, in over 9,000 tender processes. The Bank'spurchases carried out through the website involved funds of approximatelyR$189.7 million.

The priority given by BB to electronic bidding is due to the fact that this speedsup the process, reduces administrative costs, expanding the universe of suppliersand making it possible to obtain better prices.

Average Bidding Period for BB by Category (In days)

Competition

120

Taking ofPrices

80

Invitation

47

PhysicalBidding

20

ElectronicBidding

15

120

100

80

60

40

20


Relationship with the Environment

BB promotes respect for the environment as a guideline for its management andbusiness practices, and regards the preventive approach to environmentalmanagement as fundamental, centered on an assessment and prevention ofdamage caused to the environment.

To do so, it has been expending efforts on the integration of environmental issueswith the Conglomerate's management and business practices.

BB's participation in programs that, directly or indirectly, are in line with thesustainability of the environment is fundamental in making the allocation of fundspossible, in view of the far-reaching nature of its branch network and its identity withthe agribusiness public. An example of this is the Bank's work in the BB ForestryProgram and in BB Organic Agriculture.

With the objective of taking part in the global efforts to make companies responsiblefor the conservation and maintenance of the environment, the Bank has taken onimportant commitments, such as:

• Signing a Protocol for Disseminating Agenda 21;• Developing a Business Agenda 21;• Supporting the Brazilian Program for Producing and Using Biodiesel.

Internally, Banco of Brasil's commitment to the preservation of the environment istranslated into initiatives such as the collective waste collection system that operatesin several of its buildings, the management of water and electricity consumption,and the adoption of environmental criteria in the selection and management ofsuppliers, besides initiatives for recycling paper.

In 2004, BB's program for reusing and modernizing the lighting, air-conditioning andelevator systems, under development since 1990, was recognized by the NationalConservation and Rational Use of Energy Award, also known as the Program forCombating the Waste of Energy, in the Bodies and Companies under PublicManagement category (PROCEL).

BB has respect for the environment, acting as a benchmark

in its management and business practices, considering

preventive environmental management as fundamental.


Ethos Indicators of Social Responsibility

Since 2001, Banco do Brasil has been using the Ethos Indicators as an instrumentof organizational diagnosis for determining the extent of its socio-environmentalresponsibility emphasis. From 2003 onwards, this assessment has been carried outby an inter-disciplinary group, involving representatives of all the areas of the Bank.

The results of this self-assessment represent a valuable point of reference fordefining initiatives and projects aimed at perfecting the Bank's stance on socio-environmental responsibility.

It should be pointed out that Ethos Indicators do not carry any degree ofcertification. Their objective is to bring about reflection, a learning process, and animprovement in the practices of Business Social Responsibility.

Value Added

The statement of Value Added expresses the wealth generated by the Bank and the wayit has been distributed to society through its main agents.

Note: a breakdown of this table is available in the Performance Analysis Report in pages 184 and 185.

Ethos - BB's Performance*

Theme 2003

General Performance 6.86

Values and Transparency 6.92

Internal Public 5.77

Environment 4.07

Suppliers 2.88

Consumers and Customers 9

Community 9.57

Government and Society 9.78

* Up to the date of publication of this report, the Bank had not officially received the results of the 2004 version of the Ethos Indicators.

R$ '000 2002 2003 2004

Amount Distributed 9,796 12,420 13,302

Remuneration for Labor 5,026 6,332 6,674

Remuneration for Government 2,496 3,707 3,603

Remuneration for Shareholders 2,274 2,380 3,024


Company

1 - Calculation Basis Amount (R$ thousand) Amount (R$ thousand)

Net Income (NI) 50,623,360 53,164,848

Operating Income (OI) 3,024,006 2,380,982

Gross Payroll (GP) 6,619,677 6,288,405

Ibase

2 - Internal Social Indicators Amt. % over % over Amt. % over % over (R$ thous.) OI NI (R$ thous.) OI NI

Food and meals 509,067 8 1 477,621 8 1

Mandatory social charges 1,385,870 21 3 1,415,030 23 3

Pension Fund 499,850 8 1 401,647 6 1

Health 358,267 5 1 295,012 5 1

Work safety and hygiene 24,822 – – 7,650 – –

Education – – – – – –

Culture – – – – – –

Training and professional development 30,200 – – 40,862 1 –

Nurseries or nursery allowance 21,210 – – 27,692 – –

Profit sharing 371,428 6 1 273,401 4 1

Other – – – – – –

Total - Internal Social Indicators 3,200,714 48 6 2,938,915 47 6

3 - External Social Indicators Amt. % over % over Amt. % over % over (R$ thous.) OI NI (R$ thous.) OI NI

Education 16,460 1 – 17,644 1 –

Culture 35,000 1 – 36,660 2 –

Health and hygiene – – – 1,569 – –

Sports 47,000 2 – 43,113 2 –

Hunger combat and food safety 3,144 – – 7,044 – –

Other 25,387 1 – 12,717 1 –

Total Contribution to Society 126,991 4 – 118,747 5 –

Taxes (excluding social charges) 2,808,991 93 6 3,194,528 134 6

Total - External Social Indicators 2,935,982 97 6 3,313,275 139 6

4 - Environmental Indicators Amt. % over % over Amt. % over % over (R$ thous.) OI NI (R$ thous.) OI NI

Relating to the Organization's operations – – – 38,098 2 –

External programs and/or projects – – – – – –

Total Environmental Investments – – – 38,098 2 –

Related to "annual goals" in order to minimize does not have goals (x) does not have goals ( )

waste, the general production/operation accomplishes it from 0 to 50% ( ) accomplishes it from 0 to 50% ( )

consume and raise the natural sources accomplishes it from 51 to 75% ( ) accomplishes it from 51 to 75% ( )

efficiency, the company: accomplishes it from 76 to 100% ( ) accomplishes it from 76 to 100% (x)


5 - Staff Indicators 2004 2003

Nº of employees at yearend 82,671 80,640

Nº of admissions in the year 8,353 6,095

Nº of out-sourced employees 8,270 2,629

Nº of interns 10,339 10,181

Nº of employees over 45 22,622 23,592

Nº of women in the Organization 29,321 28,517

% of management positions held by women 27.00 26.00

Nº of negroes working in the Organization 13,957 12,671

% of management positions held by negroes 15.83 15.31

Nº of disable employees 1,486 1,200

6 - Relevant Information on Corporate Citizenship Activities 2004 Goals 2005

Ratio between the highest salary and the lowest salary 18.8x 18.8x

Total number of work-related accidents 626(1) 595

Social and environmental projects top management ( ) top management ( )

developed by the Organization top mgmt and managers ( x ) top mgmt and managers ( x )

were defined by: all employees ( ) all employees ( )

Standards for safety and top mgmt and managers ( x ) top mgmt and managers ( x )

hygiene in the work environment all employees ( ) all employees ( )

were defined by: all + Cipa ( x ) all + Cipa ( x )

Related to sindical freedom, collective doesn't get involved ( ) will not be involved ( )

negotiation right and workers intern follows OIT rules ( ) will follow OIT rules ( x )

representation, the company: incentives and follows OIT ( x ) will incentive and follow OIT ( )

Pension fund includes: top management ( ) top management ( )

top mgmt and managers ( ) top mgmt and managers ( )

all employees ( x ) all employees ( x )

Profit sharing comprises: top management ( ) top management ( )

top mgmt and managers ( ) top mgmt and managers ( )

all employees ( x ) all employees ( x )

Supplier selection requires conformity with the not considered ( ) will not be considered ( )

same ethical and social and environmental suggested ( x ) will be suggested ( x )

accountability adopted by the Organization: required ( ) will be required ( )

As regards the participation of its employees does not get involved ( ) will not be involved ( )

in voluntary work programs the Organization: suppor ts ( ) will suppor t ( )

organizes and encourages ( x ) will organize and encourage ( x )

Customers' complains in the Company: in Procon: in Justice: in the Company: in Procon in Justice:

and critics amount: 84.077(2) 90(3) 15.655(4) 77.000(5) 90(6) 15.655

% of customers' complains in the Company: in Procon: in Justice: in the Company: in Procon: in Justice:

and critics answered: 100 74%(7) 13% 100 74% 13%

Total Added Value (R$ thousand): 2004: 13,302,229 2003: 12,660,660

Added Value 27.09% government 50.18% workers 30.79% government 50.40% workers

Distribution: 7.1% shareholders 15.6% bounded 5.88% shareholders 12.91% bounded

7 - Other InformationBanco do Brasil does not employ child or slave labour. 1) Number of typical accidents and accidents or accidents during the course of work; 2) Refers to the

customer service group; 3) Number of complaints with Procon-DF(consumer protection body). Banco is making efforts to include in the balance sheet for 2005,

the total number of ongoing complaints, at a national level. On the other hand, we list the total number of ongoing complaints, at a national level, filed with Central

Bank: 6,790; 4) Complaints pending special civil judgement; 5) 350 complaints per 100,000 customers; 6) Targets established for Procon-DF. With regard to the

complaints filed with Central Bank, the target is not to feature in the top two in complaints ranking; 7) Complaints still unresolved fall into one of the following

categories: second instance, awaiting payment of fines, or examination by lawyers. In charge of filling in the entries in this section: Marco Geovanne Tobias da

Silva. Telephone: 55 (61) 310-5920 e-mail: [email protected].

A New Market, a New Bank,New Values

Banco do Brasil was the first company to have its shares listed on Brazil's

stock markets. 1851 saw the first share trade recorded on the Rio de Janeiro

Stock Exchange. Throughout most of the twentieth century, the main

trading centre for Banco do Brasil's shares was the stock exchange in Brazil's

former capital, Rio de Janeiro. From the late 1980's, the hub of Brazil's capital

market moved to São Paulo. Bovespa, the São Paulo Stock Exchange, has

become Brazil's most important stock market. Banco do Brasil's shares

have been traded in São Paulo since 1921. At that time, trades were

recorded with chalk on large blackboards on the trading floor.

Nowadays, a gigantic digital system handles the registration, disclosure

and clearing of each one of the thousands of trades that take place every day

on the floor of the building on Rua November XV, or through its extremely

modern electronic market. But another sign of the times we are living is

reflected in the increasing concerns and trends of companies and of the

market. In recent years an acute sense of corporate responsibility has been

growing throughout the business world.

Banco do Brasil and Bovespa can both be proud of their pioneering stance

in this regard. Both have developed programs and initiatives to improve

Brazil's corporate environment, adopting new rules and principles which

conform to the best corporate governance practices. A very important step

was taken in this direction by Bovespa, when it created the Novo Mercado.

In 2002, Banco do Brasil, aiming to adapt itself to these new trends,

amended its bylaws and set about encouraging the conversion of the old

non-voting preferred shares into ordinary shares, all with voting rights.

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The Value of the Brand

Nowadays, brands are as important as products and services, and the market iseager to know what each company stands for in terms of popular imagery. Brandswork like a compass for the customer to locate what he/she needs in the midst ofthe competition. It is a landmark for the consumer to identify himself and feel secureat the time of choosing a particular product. In this sense, the value of a brand isattributed to its capacity for directly influencing the financial result of the companyby attracting and retaining customers and generating more business.

Alert to all this, Banco do Brasil knows that its brand constitutes an important assetand that the two intertwined B's against a yellow background merit special attention,since they may represent several attributes. To a customer, a particular brand canmean security and tradition, and, at the same time, to his son, it may be synonymouswith youth and modernity, thanks to BB's constant presence in the various culturaland sporting sponsorships, besides the convenience and security offered by theautomated channels.

The value of the brand has a direct influence on financial results, by attracting andretaining customers and generating more business. In this regard, BB is well placed.In a survey published by Interbrand – an English consultancy known for its traditionallist of the 100 most valuable brands in the world – which assessed 80 Braziliancompanies listed on the São Paulo Stock Exchange (Bovespa) and selected the 12Brazilian brands of greatest value in the market, Banco do Brasil ranked as theholder of the fourth most valuable brand in Brazil, valued at US$520 million.

Also, for the 14th year running, BB leads the Top of Mind ranking of the mostremembered financial institutions, in the survey carried out by the DataFolha Institute.When asked about what was the first name of a bank to come to mind, an averageof 37% of those interviewed replied “Banco do Brasil”.

Values


From the 90s, the BB brand underwent a process of rejuvenation, when the Bankbegan to invest in Brazilian sport, linking its image with all the positive aspects thatsports marketing transmits.

BB's strategic decision to segment its customer base has exerted a strong influenceon its image. Catering to the Retail, Wholesale and Government markets meantestablishing relationships and developing and implementing differentiated brands,to signal identity with the customer.

Banco do Brasil has created the Corporate and Business branches, followed by theGovernment, Public Sector, Judiciary Branch branches, Private office and Banco doBrasil Estilo, offering differentiated services, products and relationships in environmentsthat are identified with the new relationship brands.

This strategy reinforces the positioning of the BB brand as “Identitying with thecustomer”, and the positioning of the Bank as a “Complete bank, specialized inmarket segments”, worked on in the institution campaigns since 2003. Theseinitiatives have influenced the perception of BB's customers, which came to seeBanco do Brasil as better prepared to serve each market.

Brands must remain up-to-date, or, by growing old, risk losing their value, withserious damage to the company's equity. The Banco do Brasil brand has beenmodernizing itself throughout the history of the Bank, until arriving at the pointwhere it only needs to use its logo as a heading for all its communications,maintaining the essence of its identity: a reliable, traditional and modern brand.

The development of the BB brand

1968 1978

1985 1986

1994 2002


The Value of the Human Capital

With almost two centuries of history and a remarkable share of the Brazilian market,Banco do Brasil has been built by a body of highly committed and qualifiedemployees. Nowadays, BB is one of the main employers in the Country, with 82,700employees, 10,400 interns and 8,300 staff under temporary contract, besides 4,700adolescents in training.

The average profile of BB staff, on the basis of statistical data, is that of a professionalof the male sex, between 32 and 47 years old, with a university degree. BB hasabout 37,000 graduate employees and eight thousand with postgraduatequalifications - development, specialization, a master's degree or a doctorate.

In Banco do Brasil's culture, a peculiarity is found that motivates professionals ofall ages: BB is a bank committed to the development of the Country and afinancial institution aimed at the market. With the new maxim “Your values are ourvalues”, the Bank once again reiterates this duality, which makes it and the peoplethat work for it unique.

The majority of BB employees feel pride for being part of Banco do Brasil, both forrealizing that their work makes cities grow, and for taking part, for example, invaccination campaigns run by the Bank at its branches. In the same way, theyregard the Bank as totally fitted into the market, and strive to maintain and to winnew business and leadership positions in new markets.

From this example that sums up the Bank's history, characteristics come to the fore,such as flexibility and a great capacity for adaptation, which give BB a competitiveedge in relation to the rest of the market, often putting it ahead of its peers in thedevelopment of products and services, technological innovations, businessmanagement and operational strategies.

Present-day examples are: the Ourocard Visa Electron post-dated card; thecontracting of lines of credit using Ourocard Visa cards (BB Crediário forIndividuals, and BB Giro Automático, for the microbusiness segment and theSustainable Regional Development strategy of work.

The Bank's Personnel Management policy places emphasis on the professionaldevelopment of its employees, trying to make individual skills and expectationscompatible with the needs and objectives of the Bank; it ensures pension, welfare,security and health conditions that favor an improvement in the quality of life and inprofessional performance; it values efficient and innovative work, and recognizes theefforts of the individual and of the team in the building of results.


The Value of Technology and Logistics

In 2004, Banco do Brasil invested over R$1 billion1 in systems of technology, logisticsand infrastructure. In its operational infrastructure, 1,281 new service outlets wereopened, another 2,680 installations modernized, and service channels, such as theBB Call Center, expanded.

The installation of more than 1,200 service outlets all over the Country and theexpansion of the service channels has increased the population access to the bankingproducts and services offered by the Bank. The investments in the expansion oftechnological capacity, in the modernization of operational and security equipmentand in the customer service environments provide Banco do Brasil's customers,employees and users greater flexibility, security and ease of use, as well as areduction in costs.

With regard to the actions in support infrastructure, BB has intensified its investmentsin technological resources, in the expansion of data processing capacity, in theupdating in security and data transmission programs and systems. It has alsomaintained investments in programs for rationalizing the use of energy and forexpanding the capacity of the automated channels for serving the public.

Carrying on with the modernization of its data communication network, which startedin 2003, when BB contracted two telecommunications service providers, through apublic tender process. 2004 was a year which involved preparations for implementingthe new transmission network. When the tests are concluded, gradual switching overtake place until April 2005. After this stage, about 1,200 switchovers a month areforeseen, until the switchover of the 12,000 in existence is completed.

The Bank has a permanent banking automation program, which encompassesprojects for renewing information technology equipment, modernizing BBapplications, and training and qualifying employees to provide support for thetechnological advances.

In 2004, the modernization of equipment included replacements with over 50,000new personal computers. Furthermore, the hundreds of applications developed andmaintained by BB were refined, and also over 39,000 new programs were created,to deal with more than 80 million transactions a month.

1 Of this total, R$846.3 million refers to the installation and modernization of branches; maintenance of service infrastructure,

installation and maintenance of real estate, maintenance and adaptation of furniture, vehicles, machines and equipment; and maintenance

and adaptation of information technology assets; information and teleprocessing and security. The other R$174.4 million was set aside

for leasing technological equipment.


The harmony between BB's various areas of development and infrastructure made itpossible, for example, to set up Banco Popular do Brasil in record time, which involvedthe creation and reformulation of hundreds of applications and corporate solutions.

Added to the investments of the last few years, the amount forecast for investment in2005 – R$1.6 billion – will confirm BB as one of the technologically most advancedbanks in Latin America, with self-service and management technology sought afterby various countries around the world.

The investments for 2005 provide for an improvement in the services and a reductionin costs; greater security in BB's internal systems; and an improvement inmanagement systems, amongst others. As a result of the change, it will, for example,be possible to install automated teller machines with more functions that the presentones, improving the service model in the way the customer enters into contact andinteracts with the Bank.


The Value of Availability

BB's far-reaching service network raises the potential for generating business anddetermines the success of several of Banco do Brasil's strategies.

Through its network, BB's products, services and its very brand are given greatexposure, which expands the reach of communication and provides customers,besides a feeling of trust, greater facility and ease of use.

The marketing edge achieved by the Bank through its distribution channels isstrengthened by the structuring of its branches by market – Wholesale, Retail andGovernment. Besides showing convergence with market practices, this structuringhas managed to provide an expanded and updated focus on banking serviceconcepts, thanks to the specialization and configuration of the channels.

In BB, the application of segmentation and of specialization in customer servicethrough differentiated channels, from a business logistics perspective, begins from thepremiss that the customer's satisfaction depends on the efficient management of thedistribution channels, on their availability, and on the quality of the customer service.

The Bank also has a complementary network of banking representative offices,with the aim of expanding its service outlets, the main characteristics of which aretheir great flexibility, versatility, and low cost of implantation and operation.

Besides its presence in Brazil, the Bank ensures its presence in the main financialcenters abroad with its own network of points of service, generating business in theretail area, in foreign trade and fund raising, among others, besides maintaining acomplementary network of correspondent banks.

The value of Banco do Brasil's availability grows even more when one considers thevarious automated channels that the Bank places at the disposal of its customers.Besides the business aspect, these channels disseminate the technological cultureto the customer base, as well as reducing operating costs for the Bank.

The slogan “Always with you”, adopted by BB in its corporate campaigns since2003, evokes its capacity for making itself available to the customer wherever hegoes, responding to his desires and requirements in an easy, quick and safe way,ensuring that Banco do Brasil remains the customer's preferred choice.

Um Jovem de Quase 200 Anos

O Banco do Brasil, nascido em outubro de 1808, tinha seu prazo estatutário

de duração fixado em 20 anos. Findo esse período e sob intenso debate

parlamentar promoveu-se a liquidação da primeira fase do Banco. Ela

durou cerca de 10 anos, tendo a última parcela do capital dos acionistas sido

reembolsada em dezembro de 1839. Precisamente um ano antes, no mesmo

mês de 1838 e sob a liderança de Inácio Ratton, fundava-se o Banco

Comercial do Rio de Janeiro, que viria a ser o traço de união entre as duas

fases da vida do Banco do Brasil e parte integrante da mesma.

Semente da renovação, essa casa foi parcela fundamental na história do

Banco do Brasil na primeira metade do século 19. Em 1853, por iniciativa do

Visconde de Itaboraí, seus ativos e passivos incorporaram-se ao novo

Banco do Brasil, nascido de uma fusão com a instituição de mesmo nome

criada em 1851 por Irineu Evangelista de Souza, depois Barão de Mauá.

Quarenta anos mais tarde, em 1893, e também por interesses governamen-

tais, ele iria se fusionar com o Banco da República dos Estados Unidos do

Brasil e, mediante simples mudança cosmética, passaria a denominar-se

Banco da República do Brasil. Mas era o Banco do Brasil de sempre e, em

1906, retomaria sua denominação tradicional. Mesmo que episodicamente

sob outros rótulos, desde 1808 o Banco do Brasil está presente na vida do

país, com os ideais, conceitos, princípios, espírito e atividade que o fizeram

o mais importante financiador do desenvolvimento nacional: um jovem de

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O Valor do Reconhecimento

150 Banco do Brasil – Relatório Anual 2004

Reconhecimento

Categoria: Mercado

Breve Resumo

Criado em 1976, o Prêmio é entregue àscompanhias que melhor se relacionaramcom analistas e com o mercado, por meio da transparência e da qualidade na divulgação de informações.A escolha se deu por meio de votação de 30 fundações de previdência fechada,40 administradores dos maiores fundos de investimento em ações, 30 SociedadesCorretoras de Valores Mobiliários,20 jornalistas atuantes nas seções de economia dos órgãos de imprensa e 60 analistas de mercado, indicados pela Abamec.

O BB foi escolhido pela Animec, pelasegunda vez consecutiva, por terapresentado evolução significativa emrelação às suas práticas de governançacorporativa, com destaque para atransformação das ações preferenciais emordinárias; operação de recompra dosbônus de subscrição e melhoria na políticade remuneração aos acionistas.Essa premiação referenda todas asiniciativas tomadas para melhorar atransparência e as práticasde governança do BB.

O BB passou a compor, com outras oitoempresas, o "I3 - Índice do InvestidorIndividual". Esse índice é composto apenas por empresas que estabelecerampolíticas especiais de relacionamento cominvestidores individuais e aplicadores emfundos de investimento.

Organização

Comissão Nacional de Bolsas(CNB), Jornal do Brasil,Associação Comercial do Riode Janeiro, AssociaçãoBrasileira das CompanhiasAbertas (Abamec RJ) eGazeta Mercantil

Associação Nacional deInvestidores do Mercado deCapitais (Animec)

Iniciativa da Tradenetwork

Reconhecimento

Prêmio Mauá

Selo Animec

I3 – Índice do InvestidorIndividual

151Relatório Anual 2004 – Banco do Brasil

Categoria: Mercado

Breve Resumo

A FitchRatings considerou que o aumentona participação de mercado, o controle decustos e a rentabilidade crescente obtidapelo BB, nos últimos três anos, justificamessa elevação.O BB foi a única instituição financeira noBrasil que teve seu rating individual alteradopositivamente por dois anos seguidos.

Dedicado às empresas que se destacaramem sua relação com os acionistas e o mercado, visualizada na transparência ena qualidade das informações contidas no Relatório Anual.O Banco do Brasil foi indicado como finalista do Prêmio Abrasca de MelhorRelatório Anual do ano de 2003 e foi agraciado com o quinto lugar, sendo oúnico banco entre ao primeiros colocados.

Organização

FitchRatings

Associação Brasileira dasCompanhias Abertas(Abrasca)

Reconhecimento

Elevação, pelo segundoano consecutivo, do rating individual globalatribuído ao BB, que era“D/E” em 2002 e evoluiupara “C/D” em 2004

Prêmio Abrasca deMelhor Relatório Anual –5º lugar (única InstituiçãoFinanceira premiada)

Categoria: Gestão

Breve Resumo

Parte do PQGF, o Prêmio se baseia naexcelência de práticas de gestão e padrõesde trabalho, que proporcionam produtos emetodologias de vanguarda, e o aumentoda satisfação de acionistas, clientes,funcionários e sociedade. Reconhecimento,pelo segundo ano consecutivo, pelaexcelência na Gestão de Crédito, recebendoo nível máximo de premiação em 2004.

Organização

Ministério do Planejamento,Orçamento e Gestão –Programa da Qualidade noServiço Público (PQGF)

Reconhecimento

Faixa Ouro – PrêmioNacional da GestãoPública

Categoria: Negócios

Breve Resumo

Concedido ao BB pela atuação em operações internacionais.

Estruturação da operaçãoCosipa/Usiminas.

Apoio à Exportação.

Organização

Trade Finance, revista editadapela Euromoney

Trade Finance, revista editadapela Euromoney

Secretaria de Comércio Exteriordo Ministério do Desenvolvimentoe Associação de ComércioExterior do Brasil (AEB)

Reconhecimento

Best Regional Bank forLatin America

Deal of the Year

Destaque de ComércioExterior


Categoria: Clientes

Breve Resumo

Resultado de pesquisa realizada peloInstituto Interscience. Foram 4,5 mil entrevistas espontâneas, realizadas entreagosto e setembro, nas ruas de Rio deJaneiro, São Paulo, Belo Horizonte, Fortaleza,Recife, Porto Alegre, Curitiba e Salvador.

Marca mais lembrada, categoria Banco,pelo 14° ano consecutivo.

Pesquisa realizada em quatro capitais com jovens entre 18 e 30 anos de idade,que elegeu a marca BB como uma das 16 marcas mais modernas do Brasil.

Organização

Revista Consumidor Moderno

Folha de S. Paulo

Instituto ResearchInternacional

Reconhecimento

Banco que mais respeita o Consumidor

Prêmio Folha Top of Mind 2004

Marca cool

Categoria: Tecnologia

Breve Resumo

Principal prêmio em tecnologia bancária do País. Cinco prêmios concedidos para os seguintes projetos:BB Consórcio; Central de Atendimento BB;BB/Cobra Hosting; Auto Atendimento SetorPúblico - Melhor Site B2G; SoluçõesCompartilhadas, incluindo os projetos:Processamento Compartilhado para oSistema Financeiro; Tesouro Direto;Projeto Billing; Clearing Internacional.

Prêmios nas categorias mundial e AméricaLatina para o site Agronegócios-e;World's Best Corporate – Institucional WebSite Design in Latin America Best TradeFinance Banks in Brazil;Best CLS – Linked Bank Offering in Latin America. O BB foi o primeiro banco da América Latina a operar noCLS Bank, recebendo este prêmio pelo2o ano consecutivo.

O BB foi eleito uma das três “EmpresasMais Ligadas em Tecnologia” do País.

Internet, com o site Agronegócios-e.

Organização

Revista Executivos Financeiros

Global Finance: revista internacional que premiaestratégias inovadoras naárea de Internet bankinge serviços online

Revista Info Exame

Associação Brasileira deComunicação Empresarial(Aberje)

Reconhecimento

Prêmio e-finance

Best Treasury and CashManagement Provider2004

Info Exame Ranking

Prêmio Aberje RegionalCentro-Oeste/Leste

153Relatório Anual 2004 – Banco do Brasil


Breve Resumo

"Empresa do Ano", pela qualidade de seu portifólio de produtos e serviços;"Responsabilidade Digital Corporativa –Setor Público", em função de seuPrograma de Inclusão Digital;Categoria "Agronegócio", por ser o primeirobanco a disponibilizar negociações completasonline neste segmento;Categoria "Bancos - Varejo", pelo sucessodo BB Consórcio e do uso de softwarelivre em seu sistema de Call Center.

Reconhecimento na categoria SoluçõesCompartilhadas-Conjunto, com o desenvolvimento da solução paraprocessamento dos DOC para a CIP –Câmara Interbancária de Pagamento.

Organização

Revista B2B Magazine

Revista Executivos Financeiros

Reconhecimento

Prêmio Padrão deQualidade em B2B

Prêmio e-finance

Categoria: Responsabilidade Socioambiental

Breve Resumo

Pela terceira vez consecutiva, o Banco doBrasil ficou em primeiro lugar na categoriaCentro-Oeste. O objetivo do Prêmio éestabelecer reconhecimento nacional paraos melhores balanços sociais.

Uma Empresa Amiga da Criança é aquelaque cumpre uma série de compromissoscom a infância e a adolescência, prevenindoe erradicando o trabalho infantil, garantindosaúde e educação aos filhos de funcionáriose também investindo em ações que melhorem a qualidade de vida de criançase adolescentes.

O BB foi reconhecido por suas inovações.Elas foram consideradas importantes e degrande impacto na melhoria das condiçõesde vida dos brasileiros.

Organização

Aberje, Apimec, Ethos, Fides,Ibase, Região Centro-Oeste/Leste

Fundação Abrinq

Programa das Nações Unidaspara o Desenvolvimento(PNUD)

Reconhecimento

Prêmio Balanço Social

Selo “Empresa amiga dacriança”

Esforços do BB comrelação ao créditoresponsável



Breve Resumo

O BB ficou em 3º lugar no ranking geral e em 1° entre as instituições financeiras.

Reconhecimento do programa do BB de reutilização e modernização de sistemas de iluminação, ar-condicionado e elevadores, desenvolvido desde 1990.

Organização

Revista Carta Capital

Ministério das Minas e Energia

Reconhecimento

Ranking das 80 empresaspercebidas como as maissocialmente responsáveisno País

Prêmio Procel deRacionalização do Usode Energia

Categoria: Marketing e Comunicação

Breve Resumo

Categoria Marketing Institucional:Campanha “Valores”.Categoria Terceiro Setor Empresa:“Cultura BB”.Marketing Promocional:“Grandes Premiações: Brasilcap”.

Empresa do ano em ComunicaçãoEmpresarial, Campanha de Comunicaçãoe Marketing, com o trabalho “O tempo todocom você”.

Projeto “Brilha Brasil”.Campanha “Valores”.

Organização

Associação Brasileira deMarketing & Negócios(ABMN)

Aberje

Editora Referência, FGV eMadia Mundomarketing

Reconhecimento

Destaque de Marketing2004

Prêmio Aberje RegionalCentro-Oeste/Leste

Prêmio Marketing Best2004


Banknote, 100,000 réis, National Treasury,8th edition, 1901.

Printed by Bradbury, Wilkinson & Company Limited,London. Obverse: arms of the Republic flanked byeffigies of the Republic. The National Arms consist ofthe constellation of the Southern Cross, surroundedby twenty stars, which at that time represented thenumber of states in the Federation; 198 x 99 mm.

Banknote, 5 cruzeiros, National Treasury,3rd edition, 1961.

Printed by Casa da Moeda do Brasil (Brazilian mint),Rio de Janeiro. Obverse, Water Lily. Known popularly as the indian note, because of its profile of a native

Brazilian indian on the obverse, this note was entirelydesigned and developed by the Casa da Moeda in

Rio de Janeiro; 155 x 67 mm.

Banknote, 50 cruzeiros, Banco Central do Brasil,edition A, 1970.

Printed by Casa da Moeda do Brasil (Brazilian mint),Rio de Janeiro. Obverse, left, “Embarque de Café”(loading up coffee shipments) (1936-1944), a mural by Portinari for the older Ministry of Education building,today Palácio Gustavo Capanema, in Rio de Janeiro;162 x 75 mm.

Photos and Drawings

Banknote, 30,000 réis, Banco do Brasil (Caixa Matriz), series C, 1857.

Printed by the American Bank Note Company, New York.Obverse, left, São Sebastião. Banco do Brasil, the resultof a merger in 1853, of the bank of the same namefounded by Viscount of Mauá with Banco Comercial doRio de Janeiro, was the only bank responsible for theissue of currency in Brasil up to 1857; 196 x 94 mm.

Banknote, 500 cruzeiros, National Treasury,1st edition, 1943.

Printed by the American Bank Note Company, New York.Obverse: “Abertura dos Portos” (opening of the ports),by Cadmo Fausto de Souza. In 1942, with the creation

of the cruzeiro, the banknotes were stamped, on thefront, a shadow in our history, and on the other, illustrated

with themes related to famous people; 157 x 67 mm.

The images reproduced in this Report are part of the numismatic collection belongingto the Banco do Brasil Cultural Centre – Rio de Janeiro, one of the largest in theCountry. Learn more about banknotes and share certificates.



Printed by the American Bank Note Company, New York.Obverse: right, allegory of Cattle Breeding; left, allegoryof Agriculture; centre, effigy of D. Pedro II, still today thepersonality most most present on Brazilian coins andbanknotes; 172 x 70 mm.

Banknote, 200,000 réis, Banco da República do Brasil, 1st edition, 1893.

Printed by Giesecke & Devrient, Leipzig, e Laemmert &Cia., Rio de Janeiro. Obverse: right, allegories of the

Republic (standing) and Agriculture (seated). Banco daRepública do Brasil arose from the merger, in 1892, of

Banco da República dos Estados Unidos do Brasil andBanco do Brasil; 211 x 104 mm.


Printed by the American Bank Note Company,New York. Obverse, right, Mercury, god of trade,wearing winged sandals and holding a sceptre athis feet – the emblem of peace, prosperity andtrade; 180 x 83 mm.

Banknote, 500 cruzeiros, Banco Central do Brasil, 1972.

Printed by Casa da Moeda do Brasil (Brazilianmint), Rio de Janeiro. Obverse, ethnic evolution of the Brazilian people. First commemorativeBrazilian banknote launched in 1972 to commemorate the 150th anniversary of BrazilianIndependence; 172 x 78 mm.

Banknote, 100 reais, Banco Central do Brasil, 1994.

Printed by Casa da Moeda do Brasil (Brazilian mint),Rio de Janeiro. Obverse, garoupa (type of local fish).

From the introduction of the real (local currency),examples of Brazilian fauna were adopted on all

denominations of banknotes;140 x 65 mm.


Printed by the American Bank Note Company,New York. Obverse, figure of a child between

allegories of Industry (left) and Trade (right). The use of allegories to present abstract concepts was muchused on Brazilian banknotes, not only as decoration,

but also strengthen ideals; 161 x 75 mm.

This report was printed on nationally produced paper, manufactured according to the most rigorous of global

environmental quality standards: completely free of chlorine, with a minimum of noise and solid residues,

treated liquid effluents, controlled standards of odour and without any impact on Brazil's native forests.

Shareholder Rights

Brazilian Financial and Capital Markets aregoverned by Laws 4,595, 6,385, 6,404(Corporation Law, amended by Law 10,303), aswell as a regulations and instructions introducedby regulatory bodies. The primary regulator andsupervisory body for Capital Markets is theBrazilian Securities Commission (CVM). Itsregulations are intended to protect investors.

Basic shareholders’ rights include the following,among others: the right to information (Law 6,404and CVM Instruction 202/93); the share in profits;the right to withdraw (Law 6,404/76, Article 137);preferential rights in relation to any capitalincrease (Law 6,404, Article171); a right to vote toelect a company's executives and deliberate onthe main measures approved at General (OGM)or Extraordinary (EGM) meetings; and the right tooversee company management.

Prodin

The CVM implemented the Program for Guidanceand Defense of Investors (PRODIN) and introducedthe Superintendence for Guidance of Investors inits organizational structure. The same is chargedwith developing programs for instructing andeducating investors, in addition to responding toconsultations and complaints.

Investor Services: 0800 24 1616

Shareholder Meetings

A general meeting (OGM) must be held annuallywithin four months after the end of a company'sfiscal year to deliberate on its accounts, thedestination of income, and to elect management.

An extraordinary shareholders' meeting (EGM)can be called at any time to deal with changesin the articles and or other matters foreseen inthe Corporation Law.

To participate in meetings, shareholders mustpresent a proxy or ownership statement preparedby the Companhia Brasileira de Liquidação eCustódia (CBLC) up to 24 hours before thescheduled meeting, if so required.

Trading of BB Shares

Securities issued by BB are listed on the SãoPaulo Stock Exchange (Bovespa).

Trading Symbols:Common shares BBAS3 Series “B” Warrants BBAS12Series “C” Warrants BBAS13

Quotation: unit

Minimum trading lot on the exchange: 100 shares

A reverse split of BB securities (in the proportion of1000 :1) was authorized by the shareholders in aGeneral Meeting held in January 2004.

Shareholders can trade shares over the Internetthrough the website bb.com.br, link Investimentos-eor at any domestic branch of the Bank.

Shareholders Service

Shareholders RoomInformation on the performance of BB's securities,ownership position, and share purchases and salescan be made through the Virtual Room forShareholders through the website bb.com.br, linkRelações com Investidores or English. Shareholderscan also use this page to clear up doubts or contactthe Office of the Manager for Investor Relations.

BB BranchesCustomer Service: 0800 78 5678

Shareholders Information