6-K 1 ubbift2q04_6k.htm IFT - QUARTERLY FINANCIAL INFORMATION Provided By MZ Data Products
 
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
FORM 6-K
 
Report of Foreign Issuer
 
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
 
Commission File Number 1-14640

For the month of August, 2004
 
 

UNIBANCO - UNIÃO DE BANCOS BRASILEIROS S.A.
(Exact name of registrant as specified in its charter)
 

Unibanco - Union of Brazilian Banks S.A.
(Translation of Registrant's name into English)
 

Av. Eusébio Matoso, 891
05423-901 São Paulo - SP, Brazil
(Address of principal executive offices)
 

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F ___X___ Form 40-F _______

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under Securities Exchange Act of 1934.

Yes _______ No ___X____

 

 

Unibanco - União de Bancos Brasileiros S.A.
and Unibanco - União de Bancos Brasileiros S.A.
and Subsidiary Companies


Quarterly Financial Information
for the Quarter Ended June 30, 2004









(Convenience translation into English from the original previously issued in Portuguese)

UNIBANCO - UNIÃO DE BANCOS BRASILEIROS S.A.
AND UNIBANCO - UNIÃO DE BANCOS BRASILEIROS S.A. AND SUBSIDIARY COMPANIES
IFT - QUARTERLY FINANCIAL INFORMATION – JUNE 30, 2004

INDEX

Financial Statements

        7001 Management Report
        7002 Balance Sheet
        7003 Statement of Income
        7004 Statement of Changes in Stockholders' Equity
        7005 Statement of Changes in Financial Position
        7006 Consolidated Balance Sheet
        7007 Consolidated Statement of Income
        7008 Consolidated Statement of Changes in Stockholders' Equity
        7009 Consolidated Statement of Changes in Financial Position
        7010 Financial Group Balance Sheet
        7011 Financial Group Statement of Income
        7012 Financial Group Statement of Changes in Financial Position
        7013 Financial Economic Group – CONEF

Notes to the Financial Statements and Other Information

        7014 Notes to the Quarterly Financial Information

Investments in Subsidiaries and Associated Companies

        7015 Investments in Subsidiaries and Associated Companies

Funding and Investment Policies

        7016 Marketable Securities by Type and Maturity
        7017 Marketable Securities by Balance Sheet Account and Maturity
        7018 Concentration of Marketable Securities, Lending Operations Portfolio and Deposits
        7019 Maturity of Lending Operations Portfolio
        7020 Flow of Lending Operations Portfolio
        7021 Geographical Distribution of Lending Operations Portfolio and Deposits
        7022 Risk Level of Lending Operations Portfolio
        7023 Lending Operations Portfolio by Index
        7024 Credit Assignment
        7025 Lending Operations Portfolio by Amount and Risk Level
        7026 Fixed Assets
        7027 Funding by Maturity

Risk Management

        7028 Operational Limits

Complemental Statistical Information

        7029 Branches Financial Information
        7030 Taxes and Charges
        7031 Correspondent Banks Transactions
        7032 Changes on client demand accounts by check and electronic transactions

Independent Accountants' Limited Review Report

        7033 Independent Accountants' Limited Review Report

Other Information needed to Supervision of Activities

        7034 Provisions
        7035 Capital
        7036 Cash Dividends Paid
        7037 Changes on Capital in the Reference Period
        7038 Commitments and Guarantees
        7039 Assets and Liabilities Denominated in Foreign Currency
        7040 Comments on Performance and Prospects

7001 — MANAGEMENT REPORT

Retail

During the 1H04, 342 thousand new checking accounts were opened. Checking-account holders plus investors in savings accounts, and retirees reached, at the end of the semester, 6.2 million clients under the Unibanco brand. The average number of products per checking account holder stood at 6.3.

Unibanco and its associated companies, Fininvest, LuizaCred, PontoCred, and Tecban (Banco 24 Horas), reached 14,069 points of service at the end of June 2004, distributed as follows: 867 branches and in-store branches (inside supermarkets and stores); 398 corporate-site branches; 164 Fininvest stores, including the 49 Creditec points-of-sale converted into Fininvest Stores; 10,055 Fininvest points-of-sale (retailers); 182 LuizaCred stores; 333 PontoCred stores; and 2,070 Banco 24 Horas sites (ATMs).

The Consumer Companies

Unibanco’s Consumer Companies focus on the credit card and consumer finance segments. They are composed of Unicard, Fininvest, PontoCred (a partnership established with Globex, owner of Ponto Frio stores), LuizaCred (a partnership with Magazine Luiza, a department store chain) and, more recently, by Tricard, Creditec, and HiperCard.

The Credit Card Companies

Unicard credit card business, which derived from Cartão Unibanco operation, generated a result of R$63 million in 1H04. The annualized ROAE was 57.9% in the period. In June, the number of cards issued stood at 5.2 million.

The Credicard Group – formed by Credicard, Redecard, and Orbitall contributed with R$101 million to Unibanco’s 1H04 results. The volume of transactions of Credicard totaled 117 million in the period.

The Consumer Companies

Fininvest’s net equity income was of R$91 million in 1H04. Annualized ROAE was 46.1% in the semester. The company, excluding LuizaCred, ended 1H04 with R$1,220 million in loans. In June 2004, Fininvest had 4.3 million active customers, 164 stores (including 49 Creditec points-of-sale converted into Fininvest stores) and 10,055 points-of-sale.

LuizaCred, a Fininvest subsidiary, posted earnings of R$11 million. The volume of financed sales reached R$316 million in the semester. The company ended the semester with 1.2 million active customers and R$332 million in loan portfolio.

PontoCred posted net income of R$23 million in 1H04 with annualized ROAE at 31% in the period. At the end of June, the loan portfolio totaled R$759 million. The total number of active customers reached 3.2 million.

Other companies

Banco Dibens, a partnership with Grupo Verdi, specialized in cars, trucks and buses financing, posted net income of R$3.8 million in 1H04. The bank ended the period with an R$1,668 million loan portfolio.

The annuity business of Unibanco Capitalização ended 1H04 posting gross sales of R$154 million. The managerial result in 1H04 reached R$34 million.

Unibanco Investshop Corretora, Investshop Corretora new denomination, wholly-owned by Banco1.net, reached R$4.2 billion in trading volume in 1H04. On March 1st 2004, Unibanco Corretora started using the operational platform of Unibanco Investshop Corretora in the São Paulo Stock Exchange (Bovespa), aiming at rationalize, increase synergies and modernize the operational processes of both brokerage houses.

BWU Com. e Entretenimento Ltda., Blockbuster Video’s master franchisee in Brazil, ended the semester with 119 stores, of which 111 are wholly-owned and 8 are sub-franchisees. The company posted gross revenues of R$72.6 million and equity income of R$1.9 million to Unibanco, which owns 60% of the company.

Wholesale

Mergers and Acquisitions

During the first semester, Unibanco kept its leadership in mergers and acquisitions, as the most active Brazilian bank in this segment in the domestic market, according to Thomson ranking. During this period, Unibanco acted as financial advisor in six mergers and acquisitions transactions, totaling a volume of more than R$1,255 million.

Syndicated Loans

Unibanco was the co-lead manager, together with Caixa Banco de Investimento, of a US$100 million IDB 8-year loan to Bandeirante Energia. Unibanco was the lead manager of a R$200 million 4-year syndicated loan to Celpe. In the 2Q04, Unibanco led syndicated loan transactions in Reais to Coelce, Global Telecom and Sanasa.

Correspondent Banking

Unibanco ended 1H04 with more than US$1.6 billion of funds borrowed from correspondent banks. It is also worth mentioning the expressive figure of US$1.3 billion in import credit lines funding provided by 26 trade credit exports agencies and multilateral organizations. The main highlights of the period are the contracts signed with the Japan Bank for International Cooperation (JBIC) for a ¥ 2 billion credit line and another US$20 million credit line, and the with the Export Import Bank of India (India Eximbank) for the credit line of US$10 million. These transactions boost the import financing of Asian products and consolidate Unibanco’s leadership in the local market in the multilateral institutions and governmental international trade agencies on-lending.

Foreign Exchange and Trade

Unibanco stepped up its short-term export financing activities (ACC and ACE), having closed contracts in 1H04 of a total of US$932 million.

Unibanco sought product diversification, focusing on the structuring of differentiated transactions, among which a contract for a pioneering Export Credit Note stands out. This contract, totaling US$100 million for a three-year term, was one of the first of its kind in the market.

In terms of foreign exchange import contracts, Unibanco closed transactions in the amount of US$2.3 billion, from a total market volume of US$25.2 billion, thus increasing its participation to 9.3% (Source: Central Bank).

Project Finance

In the 1H04, four financial advisory mandates were completed in the sanitation and electric power sectors, totaling R$1 billion in investments in infrastructure. In the sanitation sector, the highlight was a R$300 million issue of private debentures of the Companhia de Saneamento Básico do Estado de Minas Gerais S.A. – COPASA (the State of Minas Gerais Sanitation Company), for a 10-year term. The funds will be used in investments in the water supply and sanitary sewage systems, as part of a R$469 million investment program. In the electric energy sector, the highlight is the completion of financing transactions totaling R$132 million for the hydroelectric power stations of Itiquira (in the state of Mato Grosso do Sul) and Picada (in the state of Minas Gerais). These power stations account jointly for investments in excess of R$ 500 million.

Equities

In 1H04, Unibanco took part in all the Brazilian market’s main stock offerings. One of the highlights was the R$878 million global offering of preferred stock of Gol – Linhas Aéreas Inteligentes (Gol Intelligent Airlines) for which Unibanco acted as the Lead Coordinator of the Brazilian Offering. Unibanco was also one of the coordinators in the common stock offering of the CCR – Companhia de Concessões Rodoviárias, totaling R$375 million, and in the Natura Cosméticos cosmetic company offering, which amounted to R$768 million, and in the preferred stock offering of América Latina Logística – ALL (América Latina Logistics), which amounted to R$588 million. In the secondary market, Unibanco traded approximately R$6.2 billion at Bovespa.

Fixed Income

In 1H04, Unibanco coordinated two transactions in the domestic fixed-income market. In the domestic market, the highlight was a R$1.2 billion issue of Braskem S.A. debentures. In the international market, Unibanco acted as a coordinator of a US$150 million issue maturing in 2009 for Odebrecht Overseas Ltd., guaranteed by its controlling company CNO — Construtora Norberto Odebrecht S.A.

In the secondary market, Unibanco traded some R$200 million in corporate securities in Brazil and US$8.5 billion in sovereign debt and corporate securities abroad.

Insurance, Extended Warranty and Private Pension Plans

The insurance, extended warranty and private pension fund businesses posted net income of R$148 million in 1H04. The annualized ROAE was 21.5% in the period.

1H04‘s consolidated revenues for insurance, extended warranty, and private pension plans amounted to R$2,191 million.

Unibanco’s insurance and pension fund companies ranked fourth in consolidated terms, according to Superintendência de Seguros Privados – SUSEP (Private Insurance Regulatory Body) and ANAPP — Associação Nacional de Previdência Privada (National Association of Private Pension Funds), with a 8.5% market share (May 2004 figures, does not include extended warranty, ANS figures as of April 2004).

Consolidated insurance, extended warranty and private pension plans technical reserves amounted to R$4,847 million at the end of the semester.

Insurance

Insurance and extended warranty net premiums written totaled R$1,378 million in 1H04.

The combined ratio, that measures the efficiency of the insurance companies, was 99.3% in 1H04. The extended combined ratio, which includes financial revenues, reached 87.2%.

Personnel and administrative expenses (including DPVAT – Mandatory Auto Insurance) amounted to R$115 million in 2H04. The permanent attention to processes and costs contributed to reduce the ratio of administrative expenses over retained premiums. In the semester, this ratio was 11.5%.

Extended Warranty

The extended warranty business, formed by UAW and Garantech, the latter a joint venture with Multibrás, posted a net income of R$ 3 million in 1S04. Garantech’s revenues in the period totaled R$131 million.

Private Pension Plans

Unibanco AIG Previdência posted net income of R$27 million in 1H04. Revenues for the period reached R$812 million.
Unibanco AIG Previdência ranked fourth in pension plan sales up to May 2004, with 9.9% market share, according to the ANAPP official data. Revenue growth is related to a good performance on the PGBL and VGBL products sales program in Unibanco’s branches, and to new corporate accounts.

As for the sale of corporate pension plans, according to ANAPP’s data for May 2004, Unibanco AIG Previdência ranked first in terms of accumulated sales for the year, with a volume of R$468 million. The company services approximately 1,200 corporate clients and 689 thousand individual customers.

Technical reserves stood at R$3,370 million at the end of 1H04.

Wealth Management

Unibanco Asset Management (UAM) ended 2Q04 with R$30.5 billion in assets under management and custody. The semester accounted for positive fund raising of R$1.8 billion, mainly from the retail and institutional segments. In June 2004, UAM was ranked 5th in ANBID’s Global Ranking of Third Parties’ Assets under Management, going up three positions, with a market share of 4.9%.

The Private Banking business ended the 1H04 with assets under management of R$11.7 billion. R$4.2 billion of the total Private Bank assets under management came from investment in funds and managed portfolios, representing a market share of 9%, holding the 2nd position in the segment’s global ranking published by ANBID in June 2004.

Human Resources: Unibanco People

In 1H04, some R$9 million were invested on several initiatives ranging from specific training programs to MBAs in Brazil, and abroad and the People Management Program. Since the inception of the latter, in October 2003, 73% of Unibanco’s managers were trained, including 1,757 managers in 1H04.The objective of the program is to ensure excellence in teams leadership. In June 2004, Unibanco’s staff totaled 29,319 professionals.

During the period, 103 university students joined the Internship Program. The Trainee Program, which gives trainees the opportunity to work with teams from many different areas, and which involves the execution of actions aligned with corporate strategy, estimated the hiring of 30 participants during the year. The Future Bank, a pioneering initiative, developed in association with the University of Campinas – Unicamp; and the Brazilian Capital Markets Institute – Ibmec, designed to bridge the gap between the academic world and the market, helped to attract talented young people. In 1H04, the project involved 22 university students.

In 1H04, Unibanco hired 6 professionals from the best American and European universities for the Summer Internship Program which was implemented two years ago. The program offers these MBA students up to three-month long internships during their summer vacations.

The new Private Retirement Plan for employees, called Futuro Inteligente (Intelligent Future) was launched this semester. It offers a number of improved features, such as the opportunity to contribute with higher percentages than those allowed in the former plan, based on the participant’s age range; the possibility of retiring as from the age of 50; and four alternatives for enjoying the benefits of the plan in the event that the employee leaves the company prior to retiring. The program is offered to all employees and allows for rising company contributions, depending on the returns on equity.

Unibanco’s Stock Option Plan recognizes people with outstanding performance and commitment to long term results. As of June 2004, the stock options that were not yet exercised totaled 1,094,812 Units.

As part of the major changes in the organizational structure announced in April 2004, Unibanco offered a group of executives a one-time program with unique benefits for anticipating retirement.

The Healthcare Plan was restructured as of March 1st, ensuring our professionals and their aggregates a 405% expansion of the entire accredited healthcare services network, besides discounts on medication and information on treatments, as well as research reports on medicine and quality of life, published in our Corporate Portal.

Social Responsability

Equator Principles

Since June 2004, Unibanco started adopting the Equator Principles, a set of social and environmental criteria used to evaluate and approve credits for infrastructure projects. So far, 24 banks worldwide have adopted these policies, which were championed in 2002 by the International Finance Corporation, a World Bank subsidiary that finances private sector projects. Unibanco is the only Brazilian – and emerging market – bank in this group.

For financing to be approved, a project needs to be classified according to the degree of social and environmental risk it presents: A (high risk), B (medium risk) or C (low risk). Projects classified as “A” need to present an action plan for mitigating such risks. Since 2002, Unibanco has been complying with these criteria for approving disbursements under IFC credit line. Now, the policies are being extended to include all infrastructure projects involving more than US$50 million, regardless of the credit fund involved.

Environmental Education on Wheels

As part of the celebration of Unibanco’s 80th anniversary, the Educação Ambiental Sobre Rodas (Environmental Education on Wheels) program was launched in early August. Three pairs of trucks will drive through a number of the country’s cities, covering three different routes (South, inner-state São Paulo/Southeast and North/Northeast/Midwest), aiming at encouraging environmental education among students and teachers of the 1st to 4th grades of elementary school in the municipal school systems. Each pair of trucks will consist of one truck equipped with a “cinema”, showing a movie on Environmental Education, and another truck with an interactive exhibition area, showing pictures and videos, divided into areas that deal with the themes of Biodiversity, Water, Air, Garbage, Energy and Sustainable Consumption. The trucks will be parked in highly visible areas and will be visited by schools, by prior appointment, with the support of each town’s education bureau.

Unibanco Institute

The Unibanco Institute – responsible for the execution of the Social Responsibility activities of Unibanco – focuses on education, preferably on actions that support the social inclusion of underprivileged teenagers and young adults, as well as environmental education activities. Throughout the 1H04, the Institute signed new partnerships and has been actively participating in the development of important social projects that will benefit hundreds of youngsters, people with disabilities and the environment, such as: Projeto Educacional São Paulo 450 anos (partnership with Instituto Votorantim), Projeto Ver in ten municipalities of the states of Paraíba, Bahia and Pernambuco (partnership with Associação de Apoio à Alfabetização Solidária); Projeto Rocinha do Saber at Rio de Janeiro (partnership with Fundação Roberto Marinho and Viva Rio); Direitos Humanos nas Escolas, in São Paulo (partnership with O Centro de Direitos Humanos –CDH); Fazendinha at Niterói-RJ (partnership with Associação Pestalozzi from Niterói); IT and citizenship schools model expansion in Paraná (partnership with CDI- Comitê para Democratização da Informática); Estúdio Aprendiz in Salvador – BA (partnership Cipó- Comunicação Interativa); Natureza Jovem – Protetores da Serra, in Ceará (partnership with Associação Caatinga); Convívio Verde em Niterói-RJ, (partnership with Centro de Assessoria ao Movimento Popular-CAMPO), Centro de Educação Ambiental Juiz de Fora in Minas Gerais (association with Meio Ambiente de Juiz de Fora – AMAJF) and support to the Center for Brazilian Studies of Columbia University.

Moreira Salles Institute — IMS

The Moreira Salles Institute, Unibanco’s cultural arm, develops an important work of Brazilian culture preservation. During the last semester, the Moreira Salles Institute has stood out in its effort to broaden the reach of the public to its collections. First, with the exhibition “São Paulo, 450 anos: a imagem e a memória da cidade” of the Instituto Moreira Salles collection, in partnership with the Sesi Art Gallery, showing hundreds of images from its photographic archives. The exhibitions and guides tours have attracted more than 90 thousand people. Parallel to that, the Institute has published a special edition of the Cadernos de Fotografia Brasileira, which has become a reference about the city in the year that it celebrates its 450th anniversary. Thanks to the importance of the material, the Moreira Salles Institute was invited, last May, by the mayor of Paris, to exhibit a selection of photographs at the archeological crypt of the Cathedral of Notre Dame.

It is also worth mentioning that part of the musical archive of the Institute – precisely 13 thousand recorded songs from Humberto Franceschi collection – can already be listened at the IMS website free from charge.

Corporate Governance

The best possible corporate governance practices have long been routine at Unibanco and Unibanco Holdings day-to-day business. In 2001, the bank upgraded its listing at Bovespa to Level 1, complying with to basic requirements of transparency and market credibility. Backed by a professional management team, the Bank adopted clear procedures to safeguard impartial decision-making, timely implementation of initiatives and strategies, and capacity to act whenever required by scenario changes.

Organizational Structure Changes

During 2Q04, the changes in the highest level of the organization were finalized: The following executives now report directly to Mr. Pedro Moreira Salles, CEO of the bank:

  • Márcio Schettini: Retail
  • João Dionísio Amoêdo: Wholesale
  • José Rudge: Insurance
  • Demósthenes Pinho Neto: Wealth Management
  • Geraldo Travaglia: Planning, Control and Operations
  • Daniel Gleizer: Risk and Macro Research
  • Lucas Melo: Legal, Compliance, Auditing and Governmental Relations
  • Marcos Caetano: Corporate Communication
  • Marcelo Orticelli: Unibanco People (Human Resources)

The Board of Directors is formed by the following members:

  • Chairman: Pedro Sampaio Malano
  • Vice-Chairman: Pedro Moreira Salles

Directors:

  • Armínio Fraga
  • Gabriel Jorge Ferreira
  • Israel Vainboim
  • Joaquim Francisco de Castro Neto
  • Pedro Bodin

The members of the board and top management executives elections are pending Brazil Central Bank homologation.

AUDIT COMMITTEE

The establishment of an Audit Committee, as per Brazilian Law, was approved. The Audit Committee has the power to, among other responsibilities, indicate, ad referendum of the Board of Directors, the External Independent Auditor; review the half-yearly financial statements; evaluate the External Auditors as well as Internal Audit; establish, divulge, monitor, and oversee procedures regarding compliance with legal requirements and recommendations on the correction, and improvement of internal policies and strategies.

The Audit Committee has the following structure:

  • Gabriel Jorge Ferreira
  • Eduardo Augusto Guimarães
  • Guy Almeida Andrade

REVERSE STOCK SPLIT

Unibanco and Unibanco Holdings initiated the necessary procedures for the implementation of the reverse stock split of their shares (common, preferred and Units). The reverse stock split will be done at the ratio of 100 shares for every 1 share and will be effective as of August 30th 2004. The shares will be quoted on a per share basis and will be negotiated in lots of 100 shares. In the same date, the Global Depositary Receipts (GDRs) traded abroad will each represent 5 Units, instead of 500 Units. There will be no change in the number of GDRs issued or in the value of their pricing.

The reverse stock split will provide more efficiency in controlling and in the relationship with the shareholders and operational costs reduction, as well as being one more step in the quest for increasing liquidity for the shares in the local market.

Market Maker for Units

Unibanco hired LatinFinance Advisory & Research S.A. and Agora Senior Corretora de Titulos e Valores Mobiliarios S.A., a securities brokerage company, to be, respectively, advisor and Market Maker for UNITs (UBBR11) in the BOVESPA, the Sao Paulo Stock Exchange.

Stocks Trading

At Bovespa, the average daily volume of Units (Bovespa: UBBR11) traded in 1H04 was R$ 3.9 million, up 104% Y-o-Y. The average daily volume of GDSs traded in the New York Stock Exchange (NYSE) was higher than US$15 million in the same period.

Independent Auditors

To ensure the independence of its external auditors, Unibanco has a policy of limiting the services, other than the auditing services rendered by the external auditor, to an amount of remuneration which is less than 5% of the amount paid for the independent auditing services. Additionally, for the period ended June 30, 2004, the external auditors of Unibanco were hired only to render independent auditing services.

(Convenience translation into English from the original previously issued in Portuguese)

UNIBANCO - UNIÃO DE BANCOS BRASILEIROS S.A.
AND UNIBANCO - UNIÃO DE BANCOS BRASILEIROS S.A. AND SUBSIDIARY COMPANIES
IFT - QUARTERLY FINANCIAL INFORMATION – JUNE 30, 2004
Amounts expressed in thousands of Reais

7002 - BALANCE SHEET

CODE DESCRIPTION June 30, 2004 
10.0.0.00.00.00 TOTAL ASSETS 66,520,999.55
10.1.0.00.00.00 CURRENT ASSETS 45,208,183.16
10.1.1.00.00.00 CASH AND DUE FROM BANKS 814,854.33
10.1.2.00.00.00 SHORT-TERM INTERBANK INVESTMENTS 16,274,345.54
10.1.2.21.00.00     Securities Purchased Under Resale Agreements 10,373,678.39
10.1.2.22.00.00     Interbank Deposits 5,900,667.15
10.1.3.00.00.00 MARKETABLE SECURITIES 6,920,918.94
10.1.3.10.00.00     Own Portfolio 3,490,908.89
10.1.3.20.00.00     Subject to Repurchase Commitments 233,801.81
10.1.3.70.00.00     Pledged with Brazilian Central Bank 2,475,736.98
10.1.3.40.00.00     Pledged under Guarantees Rendered 393,953.82
10.1.3.85.00.00     Derivative Financial Instruments 326,517.44
10.1.4.00.00.00 INTERBANK ACCOUNTS 4,548,619.69
10.1.4.10.00.00     Payments and Receipts Pending Settlement 640,503.44
10.1.4.20.00.00     Compulsory Deposits 3,905,953.97
10.1.4.20.10.00         Brazilian Central Bank 3,904,332.81
10.1.4.20.40.00         National Housing System - SFH 1,621.16
10.1.4.80.00.00     Correspondent Banks 2,162.28
10.1.5.00.00.00 INTERDEPARTMENTAL ACCOUNTS 97,306.88
10.1.5.10.00.00     Third-party Funds in Transit 144.57
10.1.5.20.00.00     Internal Transfers of Funds 97,162.31
10.1.6.00.00.00 LENDING OPERATIONS 11,914,140.75
10.1.6.10.00.00     Lending Operations 12,512,621.53
10.1.6.10.10.00         Public Sector 295,698.26
10.1.6.10.20.00         Private Sector 12,216,923.27
10.1.6.90.00.00     Allowance for Lending Losses (598,480.78)
10.1.8.00.00.00 OTHER CREDITS 4,424,604.92
10.1.8.20.00.00     Foreign Exchange Portfolio 2,983,179.00
10.1.8.30.00.00     Income Receivable 297,694.04
10.1.8.40.00.00     Negotiation and Intermediation of Securities 221,086.72
10.1.8.70.00.00     Sundry 946,082.09
10.1.8.90.00.00     Allowance for Other Credits Losses (23,436.93)
10.1.9.00.00.00 OTHER ASSETS 213,392.11
10.1.9.40.00.00     Other Assets 68,438.92
10.1.9.70.00.00     Allowance for Other Assets Losses (20,515.89)
10.1.9.90.00.00     Prepaid Expenses 165,469.08
10.2.0.00.00.00 LONG-TERM ASSETS 14,654,558.76
10.2.2.00.00.00 INTERBANK INVESTMENTS 91,974.88
10.2.2.22.00.00     Interbank Deposits 91,974.88
10.2.3.00.00.00 MARKETABLE SECURITIES 4,947,922.33
10.2.3.10.00.00     Own Portfolio 2,851,998.19
10.2.3.20.00.00     Subject to Repurchase Commitments 1,355,124.83
10.2.3.70.00.00     Pledged with Brazilian Central Bank 312,924.48
10.2.3.40.00.00     Pledged under Guarantees Rendered 372,424.04
10.2.3.85.00.00     Derivative Financial Instruments 55,450.79
10.2.4.00.00.00 INTERBANK ACCOUNTS 44,438.36
10.2.4.20.00.00     Compulsory Deposits 44,438.36
10.2.4.20.40.00         National Housing System - SFH 44,438.36
10.2.6.00.00.00 LENDING OPERATIONS 6,804,433.58
10.2.6.10.00.00     Lending Operations 7,073,548.99
10.2.6.10.10.00         Public Sector 332,711.88
10.2.6.10.20.00         Private Sector 6,740,837.11
10.2.6.90.00.00     Allowance for Lending Losses (269,115.41)
10.2.8.00.00.00 OTHER CREDITS 2,725,631.63
10.2.8.10.00.00     Receivables on Guarantees Honored 1,197.06
10.2.8.20.00.00     Foreign Exchange Portfolio 462.80
10.2.8.30.00.00     Income Receivable 2,827.35
10.2.8.70.00.00     Sundry 2,722,776.67
10.2.8.90.00.00     Allowance for Other Credits Losses (1,632.25)
10.2.9.00.00.00 OTHER ASSETS 40,157.98
10.2.9.90.00.00     Prepaid Expenses 40,157.98
10.3.0.00.00.00 PERMANENT ASSETS 6,658,257.63
10.3.1.00.00.00 INVESTMENTS 5,908,525.81
10.3.1.20.00.00     Investments in Subsidiary and Associated Companies 5,874,907.68
10.3.1.20.10.00         Local 4,787,666.00
10.3.1.20.20.00         Foreign 1,087,241.68
10.3.1.50.00.00     Other Investments 64,402.02
10.3.1.90.00.00     Allowance for Losses (30,783.89)
10.3.2.00.00.00 FIXED ASSETS 348,288.99
10.3.2.30.00.00     Land and buildings in use 166,138.59
10.3.2.40.00.00     Other Fixed Assets 737,452.12
10.3.2.90.00.00     Accumulated Depreciation (555,301.72)
10.3.4.00.00.00 DEFERRED CHARGES 401,442.83
10.3.4.10.00.00     Organization and Expansion Costs 762,544.32
10.3.4.90.00.00     Accumulated Amortization (361,101.49)
40.0.0.00.00.00 TOTAL LIABILITIES 66,520,999.55
40.1.0.00.00.00 CURRENT LIABILITIES 41,067,250.68
40.1.1.00.00.00 DEPOSITS 19,656,851.17
40.1.1.10.00.00     Demand Deposits 2,919,375.31
40.1.1.20.00.00     Savings Deposits 5,359,591.26
40.1.1.30.00.00     Interbank Deposits 534,638.30
40.1.1.40.00.00     Time Deposits 10,843,246.30
40.1.2.00.00.00 SECURITIES SOLD UNDER REPURCHASE AGREEMENTS 10,555,995.15
40.1.2.10.00.00     Own Portfolio 1,556,192.02
40.1.2.20.00.00     Third Parties Portfolio 5,799,551.15
40.1.2.30.00.00     Unrestricted Portfolio 3,200,251.98
40.1.3.00.00.00 RESOURCES FROM SECURITIES ISSUED 1,617,818.29
40.1.3.30.00.00     Mortgage Notes 617,976.00
40.1.3.50.00.00     Securities Abroad 999,842.29
40.1.4.00.00.00 INTERBANK ACCOUNTS 567,672.74
40.1.4.10.00.00     Receipts and Payments Pending Settlement 541,239.29
40.1.4.40.00.00     Correspondent Banks 26,433.45
40.1.5.00.00.00 INTERDEPARTMENTAL ACCOUNTS 506,322.56
40.1.5.10.00.00     Third-Party Funds in Transit 506,310.99
40.1.5.20.00.00     Internal Transfer of Funds 11.57
40.1.6.00.00.00 BORROWINGS 3,487,438.27
40.1.6.10.00.00     Borrowings in Brazil – Governmental Agencies 349.02
40.1.6.30.00.00     Foreign Borrowings 3,487,089.25
40.1.7.00.00.00 ONLENDING IN BRAZIL - GOVERNMENTAL AGENCIES 1,401,632.67
40.1.7.10.00.00     National Treasury 4,070.84
40.1.7.30.00.00     BNDES ( National Economic Development Bank) 651,442.16
40.1.7.50.00.00     FINAME (National Industrial Financing Authority) 729,270.76
40.1.7.90.00.00     Other Institutions 16,848.91
40.1.8.00.00.00 FOREIGN ONLENDINGS 72,920.56
40.1.8.10.00.02     Foreign Onlendings 72,920.56
40.1.9.00.00.00 OTHER LIABILITIES 3,200,599.27
40.1.9.10.00.00     Collection of Taxes and Social Contributions 267,893.91
40.1.9.20.00.00     Foreign Exchange Portfolio 1,153,850.47
40.1.9.30.00.00     Social and Statutory 259,177.84
40.1.9.40.00.00     Taxes and Social Security 135,051.20
40.1.9.50.00.00     Negotiation and Intermediation of Securities 33,580.14
40.1.9.85.00.00     Subordinated Debit 11,837.28
40.1.9.87.00.00     Derivative Financial Instruments 217,748.57
40.1.9.90.00.00     Sundry 1,121,459.86
40.2.0.00.00.00 LONG-TERM LIABILITIES 17,723,013.91
40.2.1.00.00.00 DEPOSITS 8,004,754.21
40.2.1.30.00.00     Interbank Deposits 45,011.61
40.2.1.40.00.00     Time Deposits 7,959,742.60
40.2.3.00.00.00 RESOURCES FROM SECURITIES ISSUED 448,082.60
40.2.3.50.00.00     Securities Abroad 448,082.60
40.2.6.00.00.00 BORROWINGS 542,742.27
40.2.6.10.00.00     Borrowings in Brazil - Governmental Agencies 780.49
40.2.6.30.00.00     Foreign Borrowings 541,961.78
40.2.7.00.00.00 ONLENDING IN BRAZIL - GOVERNMENTAL AGENCIES 2,922,080.41
40.2.7.20.00.00     National Treasury 71,933.87
40.2.7.30.00.00     BNDES ( National Economic Development Bank) 2,071,911.46
40.2.7.40.00.00     CEF (Federal Savings and Loans Bank) 56,004.47
40.2.7.50.00.00     FINAME (National Industrial Financing Authority) 722,230.61
40.2.8.00.00.00 FOREIGN ONLENDINGS 184,985.78
40.2.8.10.00.00     Foreign Onlendings 184,985.78
40.2.9.00.00.00 OTHER LIABILITIES 5,620,368.64
40.2.9.40.00.00     Taxes and Social Security 255,269.18
40.2.9.85.00.00     Subordinated Debt 1,573,937.83
40.2.9.87.00.00     Derivative Financial Instruments 77,015.62
40.2.9.90.00.00     Sundry 3,714,146.01
40.5.0.00.00.00 DEFERRED INCOME 26,345.68
40.5.1.00.00.00     Deferred Income 26,345.68
40.6.0.00.00.00 STOCKHOLDERS’ EQUITY 7,704,389.28
40.6.1.00.00.00     Capital 5,000,000.00
40.6.1.10.00.00         Local Residents 3,482,339.43
40.6.1.20.00.00         Foreign Residents 1,517,660.57
40.6.4.00.00.00     Capital Reserves 158,685.10
40.6.5.00.00.00     Revaluation Reserves 9,807.41
40.6.6.00.00.00     Revenue Reserves 2,683,578.90
40.6.7.00.00.00     Unrealized gains and losses-Marketable Securities and
      Derivative Financial Instruments (96,259.33)
40.6.9.00.00.00     Treasury Stocks (51,422.80)

7003 - STATEMENT OF INCOME

CODE DESCRIPTION From April 1, 2004
to June 30, 2004 		From January 1, 2004
to June 30, 2004
 
10.1.1.10.10.00 REVENUE FROM FINANCIAL INTERMEDIATION 2,272,544.66 4,299,079.60
10.1.1.10.10.11 Lending Operations 1,268,314.82 2,389,498.24
10.1.1.10.10.15 Marketable Securities 922,388.79 1,672,543.74
10.1.1.10.10.16 Derivative Financial Instruments (133,210.55) (84,712.82)
10.1.1.10.10.17 Foreign Exchange Transactions 117,500.03 133,694.64
10.1.1.10.10.19 Compulsory Deposits 97,551.57 188,055.80
10.1.1.10.20.00 EXPENSES ON FINANCIAL INTERMEDIATION (1,775,475.91) (3,119,561.30)
10.1.1.10.20.12 Deposits and Securities Sold (1,281,905.03) (2,343,808.20)
10.1.1.10.20.14 Borrowings and Onlendings (355,577.18) (533,092.60)
10.1.1.10.20.20 Provision for Lending, Leasing and Other
  Credits Losses (137,993.70) (242,660.50)
10.1.1.10.00.00 GROSS PROFIT FROM FINANCIAL INTERMEDIATION 497,068.75 1,179,518.29
10.1.1.20.00.00 OTHER OPERATING INCOME (EXPENSES) (215,380.42) (574,724.48)
10.1.1.20.21.00 Services Rendered 385,834.27 766,050.59
10.1.1.20.22.00 Salaries, Benefits, Training and Social Security (356,561.18) (689,007.86)
10.1.1.20.24.00 Other Administrative Expenses (389,289.47) (772,794.15)
10.1.1.20.26.00 Financial Transaction and Other Taxes (63,268.49) (126,805.89)
10.1.1.20.23.00 Equity in Results of Subsidiary and
  Associated Companies 268,971.54 468,701.08
10.1.1.20.25.00 Other Operating Income 152,590.62 180,703.88
10.1.1.20.32.00 Other Operating Expenses (213,657.71) (401,572.13)
10.1.1.00.00.00 OPERATING INCOME 281,688.33 604,793.81
10.1.2.00.00.00 NON-OPERATING INCOME (EXPENSES), NET (973.97) (13,520.00)
10.1.0.00.00.00 INCOME BEFORE TAXES AND PROFIT SHARING 280,714.36 591,273.82
10.2.0.00.00.00 INCOME TAX AND SOCIAL CONTRIBUTION 61,852.38 75,435.60
10.2.1.00.00.00 Provision for Income Tax 10,529.01 (301.16)
10.2.2.00.00.00 Provision for Social Contribution 2,822.68 (202.06)
10.2.3.00.00.00 Deferred Tax Asset 48,500.69 75,938.82
10.3.0.00.00.00 PROFIT SHARING (37,950.99) (85,948.46)
10.0.0.00.00.00 NET INCOME 304,615.75 580,760.96
20.0.0.00.00.00 INTEREST ON OWN CAPITAL (109,061.59) (240,008.58)
30.0.0.00.00.00 NET INCOME PER SHARE: 0.000002181882725 0.000004159838439

7004 - STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

CODE   CAPITAL CAPITAL RESERVE REVALUATION RESERVE ON SUBSIDIARIES REVENUE RESERVES
 UNREALIZED GAINS AND LOSSES- MARKETABLE SECURITIES AND DERIVATIVE FINANCIAL INSTRUMENTS RETAINED EARNINGS TREASURY STOCKS TOTAL
LEGAL STATUTORY OTHERS
 
                       
00.0.1.01.00.00 AT MARCH 31, 2004 3,690,601.81 158,472.50 10,013.39 326,948.57 3,073,084.62 250,000.00 (166,063.76) 147,251.87 (132,123.28) 7,358,185.72
00.0.1.02.00.00 PRIOR PERIODS ADJUSTMENTS -  -  -  -  -  -  -  137.87 -  137.87
00.0.1.25.00.00 UNREALIZED GAINS AND LOSSES ADJUSTMENTS -MARKETABLE SECURITIES AND DERIVATIVE FINANCIAL INSTRUMENTS -  -  -  -  -  -  69,804.43 -  -  69,804.43
00.0.1.05.00.00 CAPITAL INCREASE 1,309,398.19 -  -  -  (1.059.398,19) (250,000.00) -  -  -  - 
00.0.1.12.00.00 RESTATEMENT OF MEMBERSHIP CERTIFICATES -  212.60 -  -  -  -  -  -  -  212.60
00.0.1.06.00.00 OTHER EVENTS:
00.0.1.15.00.00 REVALUATION RESERVES IN SUBSIDIARY/ASSOCIATED COMPANY -  -  (205.98) -  -  -  -  -  -  (205.98)
00.0.1.17.00.00 OTHERS - - - - - - - 80,700.48 80,700.48
00.0.1.18.00.00 NET INCOME FOR THE PERIOD -  -  -  -  -  -  -  304,615.75 -  304,615.75
00.0.1.19.00.00 DESTINATIONS:
00.0.1.21.00.00 RESERVES -  -  -  29,038.79 313,905.11 -  -  (342,943.90) -  - 
00.0.1.23.00.00 INTEREST ON OWN CAPITAL -  -  -  -  -  -  -  (109,061.59) -  (109,061.59)
00.0.1.00.00.00 AT JUNE 30, 2004 5,000,000.00 158,685.10 9,807.41 355,987.36 2,327,591.54 -  (96,259.33) -  (51,422.80) 7,704,389.28
00.0.2.00.00.00 CHANGES IN THE PERIOD 1,309,398.19 212.60 (205.98) 29,038.79 (745,493.08) (250,000.00) 69,804.43 (147,251.87) 80,700.48 346,203.56
00.0.6.00.00.00 INTEREST ON OWN CAPITAL PER SHARE -  -  -  -  -  -  -  -  -  0.000000781179565

7005 - STATEMENT OF CHANGES IN FINANCIAL POSITION

CODE DESCRIPTION From April 1, 2004
to June 30,2004
 
10.0.0.00.00.00 FINANCIAL RESOURCES WERE PROVIDED BY 6,726,426.32
10.1.0.00.00.00 NET INCOME FOR THE PERIOD 38,174.21
10.2.0.00.00.00 CHANGES IN DEFERRED INCOME 13,998.26
10.5.0.00.00.00 THIRD PARTY FUNDS 6,674,253.85
10.5.1.00.00.00 Increase in Liabilities 6,344,736.62
10.5.1.01.00.00     Deposits 1,447,860.23
10.5.1.02.00.00     Funds Obtained in the Open Market 3,331,427.31
10.5.1.07.00.00     Interbank and Interdepartmental accounts 231,139.42
10.5.1.08.00.00     Borrowings and Onlendings 546,511.72
10.5.1.09.00.00     Other Liabilities 787,797.94
10.5.2.00.00.00 Decrease in Assets 35,899.23
10.5.2.02.00.00     Marketable Securities 35,899.23
10.5.3.00.00.00 Sale of Assets and Investments 37,858.00
10.5.3.02.00.00     Foreclosed Assets 20,061.00
10.5.3.03.00.00     Fixed Assets 12,269.00
10.5.3.05.00.00     Investments 5,528.00
10.5.4.00.00.00 Dividends Received from Subsidiary Companies 255,760.00
20.0.0.00.00.00 FINANCIAL RESOURCES WERE USED FOR 6,697,883.71
20.2.0.00.00.00 Dividends and Interest on Own Capital Proposed 109,061.59
20.4.0.00.00.00 INVESTMENTS IN 615,632.39
20.4.1.00.00.00     Investments in Subsidiary 589,373.80
20.4.2.00.00.00     Foreclosed Assets 5,288.00
20.4.3.00.00.00     Fixed Assets 13,787.94
20.4.5.00.00.00     Investments 7,182.65
20.5.0.00.00.00 DEFERRED CHARGES 20,346.21
20.6.0.00.00.00 INCREASE IN ASSETS 5,790,847.05
20.6.1.00.00.00     Interbank Investments 3,842,390.62
20.6.3.00.00.02     Interbank and Interdepartmental accounts 535,635.25
20.6.4.00.00.00     Lending Operations 900,940.95
20.6.6.00.00.00     Other Credits 499,166.50
20.6.7.00.00.00     Other Assets 12,713.73
20.7.0.00.00.00 DECREASE IN LIABILITIES 161,996.47
20.7.5.00.00.00     Mortgage Notes 161,996.47
30.0.0.00.00.00 INCREASE (DECREASE) IN CASH AND DUE FROM BANKS
  (10.0.0.00.00.00 – 20.0.0.00.00.00) 28,542.61
 
50.0.0.00.00.00 CASH AND DUE FROM BANKS AT BEGINNING OF THE PERIOD 786,311.72
60.0.0.00.00.00 CASH AND DUE FROM BANKS AT THE END OF THE PERIOD 814,854.33
70.0.0.00.00.00 INCREASE (DECREASE) IN CASH AND DUE FROM BANKS
  (= 30.0.0.00.00.00) 28,542.61

7006 - CONSOLIDATED BALANCE SHEET

CODE DESCRIPTION June 30, 2004 
 
10.0.0.00.00.00 TOTAL ASSETS 80,010,999.13
10.1.0.00.00.00 CURRENT ASSETS 57,749,851.86
10.1.1.00.00.00 CASH AND DUE FROM BANKS 1,038,977.24
10.1.2.00.00.00 SHORT-TERM INTERBANK INVESTMENTS 13,997,163.21
10.1.2.21.00.00     Securities Purchased Under Resale Agreements 10,359,392.34
10.1.2.22.00.00     Interbank Deposits 3,637,770.87
10.1.3.00.00.00 MARKETABLE SECURITIES 13,258,315.15
10.1.3.10.00.00     Own Portfolio 9,257,118.75
10.1.3.20.00.00     Subject to Repurchase Commitments 280,126.66
10.1.3.70.00.00     Pledged with Brazilian Central Bank 2,635,330.09
10.1.3.40.00.00     Pledged under Guarantees Rendered 784,100.05
10.1.3.85.00.00     Derivative Financial Instruments 301,639.60
10.1.4.00.00.00 INTERBANK ACCOUNTS 4,823,025.14
10.1.4.10.00.00     Payments and Receipts Pending Settlement 665,167.56
10.1.4.20.00.00     Compulsory Deposits 4,150,853.02
10.1.4.20.10.00         Brazilian Central Bank 4,149,231.86
10.1.4.20.40.00         National Housing System - SFH 1,621.16
10.1.4.80.00.00     Correspondent Banks 7,004.56
10.1.5.00.00.00 INTERDEPARTMENTAL ACCOUNTS 97,757.37
10.1.5.10.00.00     Third-party Funds in Transit 567.48
10.1.5.20.00.00     Internal Transfers of Funds 97,189.89
10.1.6.00.00.00 LENDING OPERATIONS 17,397,974.03
10.1.6.10.00.00     Lending Operations 18,612,865.95
10.1.6.10.10.00         Public Sector 295,698.26
10.1.6.10.20.00         Private Sector 18,317,167.69
10.1.6.90.00.00     Allowance for Lending Losses (1,214,891.92)
10.1.7.00.00.00 LEASING OPERATIONS 278,603.93
10.1.7.10.00.00     Leasing Operations 566,533.05
10.1.7.80.00.00     Unearned Leasing Income (283,319.30)
10.1.7.90.00.00     Allowance for Leasing Losses (4,609.82)
10.1.8.00.00.00 OTHER CREDITS 6,418,842.97
10.1.8.20.00.00     Foreign Exchange Portfolio 3,150,430.45
10.1.8.30.00.00     Income Receivable 121,883.59
10.1.8.40.00.00     Negotiation and Intermediation of Securities 115,026.62
10.1.8.70.00.00     Sundry 3,059,681.30
10.1.8.90.00.00     Allowance for Other Credits Losses (28,178.99)
10.1.9.00.00.00 OTHER ASSETS 439,192.82
10.1.9.40.00.00     Other Assets 194,116.52
10.1.9.70.00.00     Allowance for Other Assets Losses (54,775.49)
10.1.9.90.00.00     Prepaid Expenses 299,851.79
10.2.0.00.00.00 LONG-TERM ASSETS 18,749,668.03
10.2.2.00.00.00 INTERBANK INVESTMENTS 91,974.85
10.2.2.22.00.00     Interbank Deposits 91,974.85
10.2.3.00.00.00 MARKETABLE SECURITIES 5,687,253.38
10.2.3.10.00.00     Own Portfolio 3,581,961.20
10.2.3.20.00.00     Subject to Repurchase Commitments 1,355,124.83
10.2.3.70.00.00     Pledged with Brazilian Central Bank 313,163.89
10.2.3.40.00.00     Pledged under Guarantees Rendered 381,453.22
10.2.3.85.00.00     Derivative Financial Instruments 55,550.24
10.2.4.00.00.00 INTERBANK ACCOUNTS 44,438.36
10.2.4.20.00.00     Compulsory Deposits 44,438.36
10.2.4.20.40.00         National Housing System - SFH 44,438.36
10.2.6.00.00.00 LENDING OPERATIONS 7,658,560.31
10.2.6.10.00.00     Lending Operations 7,945,753.27
10.2.6.10.10.00         Public Sector 332,711.88
10.2.6.10.20.00         Private Sector 7,613,041.39
10.2.6.90.00.00     Allowance for Lending Losses (287,192.96)
10.2.7.00.00.00 LEASING OPERATIONS 246,960.98
10.2.7.10.00.00     Leasing Operations 535,296.06
10.2.7.10.20.00         Private Sector 535,296.06
10.2.7.80.00.00     Unearned Leasing Income (284,231.48)
10.2.7.90.00.00     Allowance for Leasing Losses (4,103.60)
10.2.8.00.00.00 OTHER CREDITS 4,956,904.65
10.2.8.10.00.00     Receivables on Guarantees Honored 1,734.09
10.2.8.20.00.0     Foreign Exchange Portfolio 462.80
10.2.8.30.00.00     Income Receivable 3,668.55
10.2.8.40.00.00     Negotiation and Intermediation of Securities 2,140.88
10.2.8.70.00.00     Sundry 4,955,095.09
10.2.8.90.00.00     Allowance for Other Credits Losses (6,196.76)
10.2.9.00.00.00 OTHER ASSETS 63,575.50
10.2.9.90.00.00     Prepaid Expenses 63,575.50
10.3.0.00.00.00 PERMANENT ASSETS 3,511,479.24
10.3.1.00.00.00 INVESTMENTS 1,849,593.46
10.3.1.20.00.00     Investments in Subsidiary and Associated Companies 1,682,733.45
10.3.1.20.10.00         Local 1,682,733.45
10.3.1.50.00.00     Other Investments 230,506.25
10.3.1.90.00.00     Allowance for Losses (63,646.24)
10.3.2.00.00.00 FIXED ASSETS 955,897.72
10.3.2.30.00.00     Land and buildings in use 652,203.31
10.3.2.40.00.00     Other Fixed Assets 1,328,025.04
10.3.2.90.00.00     Accumulated Depreciation (1,024,330.63)
10.3.3.00.00.00 LEASED FIXED ASSETS 331.68
10.3.3.20.00.00     Leased Assets 789.35
10.3.3.90.00.00     Accumulated Depreciation (457.67)
10.3.4.00.00.00 DEFERRED CHARGES 705,656.38
10.3.4.10.00.00     Organization and Expansion Costs 1,371,134.78
10.3.4.90.00.00     Accumulated Amortization (665,478.40)
40.0.0.00.00.00 TOTAL LIABILITIES 80,010,999.13
40.1.0.00.00.00 CURRENT LIABILITIES 48,128,238.02
40.1.1.00.00.00 DEPOSITS 21,202,344.94
40.1.1.10.00.00     Demand Deposits 2,953,415.17
40.1.1.20.00.00     Savings Deposits 5,971,098.55
40.1.1.30.00.00     Interbank Deposits 144,259.65
40.1.1.40.00.00     Time Deposits 12,133,571.57
40.1.2.00.00.00 SECURITIES SOLD UNDER REPURCHASE AGREEMENTS 10,153,762.15
40.1.2.10.00.00     Own Portfolio 1,603,233.50
40.1.2.20.00.00     Third Parties Portfolio 5,364,505.40
40.1.2.30.00.00     Unrestricted Portfolio 3,186,023.25
40.1.3.00.00.00 RESOURCES FROM SECURITIES ISSUED 1,904,760.49
40.1.3.30.00.00     Mortgage Notes 633,537.52
40.1.3.50.00.00     Securities Abroad 1,271,222.97
40.1.4.00.00.00 INTERBANK ACCOUNTS 595,579.05
40.1.4.10.00.00     Receipts and Payments Pending Settlement 585,393.92
40.1.4.40.00.00     Correspondent Banks 10,185.13
40.1.5.00.00.00 INTERDEPARTMENTAL ACCOUNTS 508,527.81
40.1.5.10.00.00     Third-Party Funds in Transit 508,342.19
40.1.5.20.00.00     Internal Transfer of Funds 185.62
40.1.6.00.00.00 BORROWINGS 3,905,134.04
40.1.6.10.00.00     Borrowings in Brazil - Governmental Agencies 349.02
40.1.6.20.00.00     Borrowings in Brazil - Other Institutions 190,022.39
40.1.6.30.00.00     Foreign Borrowings 3,714,762.63
40.1.7.00.00.00 ONLENDING IN BRAZIL - GOVERNMENTAL AGENCIES 1,773,748.69
40.1.7.10.00.00     National Treasury 4,070.84
40.1.7.30.00.00     BNDES ( National Economic Development Bank) 675,127.56
40.1.7.50.00.00     FINAME (National Industrial Financing Authority) 1,077,701.37
40.1.7.90.00.00     Other Institutions 16,848.92
40.1.8.00.00.00 FOREIGN ONLENDINGS 79,112.50
40.1.8.10.00.00     Foreign Onlendings 79,112.50
40.1.9.00.00.00 OTHER LIABILITIES 8,005,268.35
40.1.9.10.00.00     Collection of Taxes and Social Contributions 275,464.84
40.1.9.20.00.00     Foreign Exchange Portfolio 1,162,593.78
40.1.9.30.00.00     Social and Statutory 426,195.85
40.1.9.40.00.00     Taxes and Social Security 423,229.34
40.1.9.50.00.00     Negotiation and Intermediation of Securities 273,619.17
40.1.9.85.00.00     Subordinated Debt 12,364.99
40.1.9.87.00.00     Derivative Financial Instruments 188,421.65
40.1.9.90.00.00     Sundry 5,243,378.73
40.2.0.00.00.00 LONG-TERM LIABILITIES 23,316,404.09
40.2.1.00.00.00 DEPOSITS 8,126,022.89
40.2.1.30.00.00     Interbank Deposits 49,523.29
40.2.1.40.00.00     Time Deposits 8,076,499.60
40.2.3.00.00.00 RESOURCES FROM SECURITIES ISSUED 452,265.30
40.2.3.50.00.00     Securities Abroad 452,265.30
40.2.6.00.00.00 BORROWINGS 462,322.54
40.2.6.10.00.00     Borrowings in Brazil - Governmental Agencies 780.49
40.2.6.30.00.00     Foreign Borrowings 461,542.05
40.2.7.00.00.00 ONLENDING IN BRAZIL - GOVERNMENTAL AGENCIES 3,332,150.15
40.2.7.10.00.00     National Treasury 71,933.87
40.2.7.30.00.00     BNDES ( National Economic Development Bank) 2,116,303.31
40.2.7.40.00.00     CEF (Federal Savings and Loans Bank) 56,004.46
40.2.7.50.00.00     FINAME (National Industrial Financing Authority) 1,087,908.51
40.2.8.00.00.00 FOREIGN ONLENDINGS 184,985.78
40.1.8.10.00.00     Foreign Onlendings 184,985.78
40.2.9.00.00.00 OTHER LIABILITIES 10,758,657.43
40.2.9.40.00.00     Taxes and Social Security 1,011,105.46
40.2.9.85.00.00     Subordinated Debt 1,665,585.08
40.2.9.87.00.00     Derivative Financial Instruments 75,575.10
40.2.9.90.00.00     Sundry 8,006,391.79
40.5.0.00.00.00 DEFERRED INCOME 94,625.72
40.5.1.00.00.00     Deferred Income 94,625.72
40.9.0.00.00.00 MINORITY INTEREST 767,342.02
40.6.0.00.00.00 STOCKHOLDERS’ EQUITY 7,704,389.28
40.6.1.00.00.00     Capital 5,000,000.00
40.6.1.10.00.00         Local Residents 3,482,339.43
40.6.1.20.00.00         Foreign Residents 1,517,660.57
40.6.4.00.00.00     Capital Reserves 158,685.10
40.6.5.00.00.00     Revaluation Reserve 9,807.41
40.6.6.00.00.00     Revenue Reserves 2,683,578.90
40.6.7.00.00.00     Unrealized gains and losses-Marketable Securities and
      Derivative Financial Instruments (96,259.33)
40.6.9.00.00.00     Treasury Stocks (51,422.80)

7007 - CONSOLIDATED STATEMENT OF INCOME

CODE DESCRIPTION From April 1, 2004
to June 30, 2004 		From January 1, 2004
to June 30, 2004
 
10.1.1.10.10.00 REVENUE FROM FINANCIAL INTERMEDIATION 3,111,881.73 5,787,190.46
10.1.1.10.10.11 Lending Operations 2,078,972.43 3,879,489.81
10.1.1.10.10.13 Leasing Operations 29,969.13 54,290.42
10.1.1.10.10.15 Marketable Securities 887,705.11 1,615,076.22
10.1.1.10.10.16 Derivative Financial Instruments (101,113.06) (85,832.36)
10.1.1.10.10.17 Foreign Exchange Transactions 118,266.52 135,086.45
10.1.1.10.10.19 Compulsory Deposits 98,081.60 189,079.92
10.1.1.10.20.00 EXPENSES ON FINANCIAL INTERMEDIATION (2,112,285.64) (3,706,692.43)
10.1.1.10.20.12 Deposits and Securities Sold (1,414,488.72) (2,496,387.65)
10.1.1.10.20.14 Borrowings and Onlendings (381,049.84) (580,865.97)
10.1.1.10.20.20 Provision for Lending, Leasing and Other
  Credits Losses (316,747.08) (629,438.81)
10.1.1.10.00.00 GROSS PROFIT FROM FINANCIAL INTERMEDIATION 999,596.09 2,080,498.03
10.1.1.20.00.00 OTHER OPERATING INCOME (EXPENSES) (598,887.19) (1,209,087.31)
10.1.1.20.21.00 Services Rendered 820,102.66 1,560,676.33
10.1.1.20.22.00 Salaries, Benefits, Training and Social Security (484,116.03) (943,127.62)
10.1.1.20.24.00 Other Administrative Expenses (758,094.75) (1,442,073.00)
10.1.1.20.26.00 Financial Transaction and Other Taxes (173,849.87) (330,841.56)
10.1.1.20.23.00 Equity in Results of Subsidiary and
  Associated Companies (1,081.33) 4,979.25
10.1.1.20.25.00 Other Operating Income 1,300,532.70 2,403,967.76
10.1.1.20.32.00 Other Operating Expenses (1,302,380.57) (2,462,668.47)
10.1.1.00.00.00 OPERATING INCOME 400,708.90 871,410.72
10.1.2.00.00.00 NON-OPERATING INCOME (EXPENSES), NET 18,490.84 6,314.72
10.1.0.00.00.00 INCOME BEFORE TAXES AND PROFIT SHARING 419,199.74 877,725.44
10.2.0.00.00.00 INCOME TAX AND SOCIAL CONTRIBUTION (18,839.89) (97,384.16)
10.2.1.00.00.00 Provision for income tax (65,302.15) (130,350.48)
10.2.2.00.00.00 Provision for social contribution (23,752.07) (45,538.55)
10.2.3.00.00.00 Deferred tax asset 70,214.33 78,504.87
10.3.0.00.00.00 PROFIT SHARING (56,842.70) (125,731.83)
40.0.0.00.00.00 MINORITY INTEREST (38,901.40) (73,848.49)
10.0.0.00.00.00 NET INCOME 343,517.15 654,609.45
20.0.0.00.00.00 INTEREST ON OWN CAPITAL (109,061.59) (240,008.58)
30.0.0.00.00.00 NET INCOME PER SHARE 0.000002181882725 0.000004159838439

7008 - CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

CODE   CAPITAL CAPITAL RESERVE REVALUATION RESERVE ON SUBSIDIARIES REVENUE RESERVES
 UNREALIZED GAINS AND LOSSES- MARKETABLE SECURITIES AND DERIVATIVE FINANCIAL INSTRUMENTS RETAINED EARNINGS TREASURY STOCKS TOTAL
LEGAL STATUTORY OTHERS
 
                       
00.0.1.01.00.00 AT MARCH 31, 2004 3,690,601.81 158,472.50 10,013.39 326,948.57 3,073,084.62 250,000.00 (166,063.76) 147,251.87 (132,123.28) 7,358,185.72
00.0.1.02.00.00 PRIOR PERIODS ADJUSTMENTS -  -  -  -  -  -  -  137.87 -  137.87
00.0.1.25.00.00 UNREALIZED GAINS AND LOSSES ADJUSTMENTS -MARKETABLE SECURITIES AND DERIVATIVE FINANCIAL INSTRUMENTS -  -  -  -  -  -  69,804.43 -  -  69,804.43
00.0.1.05.00.00 CAPITAL INCREASE 1,309,398.19 -  -  -  (1.059.398,19) (250,000.00) -  -  -  - 
00.0.1.12.00.00 RESTATEMENT OF MEMBERSHIP CERTIFICATES -  212.60 -  -  -  -  -  -  -  212.60
00.0.1.06.00.00 OTHER EVENTS:
00.0.1.15.00.00 REVALUATION RESERVES IN SUBSIDIARY/ASSOCIATED COMPANY -  -  (205.98) -  -  -  -  -  -  (205.98)
00.0.1.17.00.00 OTHERS - - - - - - - 80,700.48 80,700.48
00.0.1.18.00.00 NET INCOME FOR THE PERIOD -  -  -  -  -  -  -  304,615.75 -  304,615.75
00.0.1.19.00.00 DESTINATIONS:
00.0.1.21.00.00 RESERVES -  -  -  29,038.79 313,905.11 -  -  (342,943.90) -  - 
00.0.1.23.00.00 INTEREST ON OWN CAPITAL -  -  -  -  -  -  -  (109,061.59) -  (109,061.59)
00.0.1.00.00.00 AT JUNE 30, 2004 5,000,000.00 158,685.10 9,807.41 355,987.36 2,327,591.54 -  (96,259.33) -  (51,422.80) 7,704,389.28
00.0.2.00.00.00 CHANGES IN THE PERIOD 1,309,398.19 212.60 (205.98) 29,038.79 (745,493.08) (250,000.00) 69,804.43 (147,251.87) 80,700.48 346,203.56
00.0.6.00.00.00 INTEREST ON OWN CAPITAL PER SHARE -  -  -  -  -  -  -  -  -  0.000000781179565

7009 - CONSOLIDATED STATEMENT OF CHANGES IN FINANCIAL POSITION

CODE DESCRIPTION From April 1, 2004
to June 30, 2004
 
10.0.0.00.00.00 FINANCIAL RESOURCES WERE PROVIDED BY 9,516,669.02
10.1.0.00.00.00 ADJUSTED NET INCOME FOR THE PERIOD 434,209.08
10.2.0.00.00.00 CHANGES IN DEFERRED INCOME 14,363.73
10.5.0.00.00.00 THIRD PARTY FUNDS 9,068,096.21
10.5.1.00.00.00 Increase in Liabilities 8,387,655.50
10.5.1.01.00.00     Deposits 1,914,686.79
10.5.1.02.00.00     Funds Obtained in the Open Market 3,012,441.63
10.5.1.07.00.00     Interbank and Interdepartmental accounts 232,447.53
10.5.1.08.00.00     Borrowings and Onlendings 898,180.25
10.5.1.09.00.00     Other Liabilities 2,329,899.30
10.5.3.00.00.00 Sale of Assets and Investments 680,190.71
10.5.3.02.00.00     Foreclosed Assets 623,751.71
10.5.3.03.00.00     Fixed Assets 49,972.00
10.5.3.05.00.00     Investments 6,467.00
10.5.4.00.00.00 Dividends received from subsidiary and associated companies 250.00
20.0.0.00.00.00 FINANCIAL RESOURCES WERE USED FOR 9,412,599.83
20.2.0.00.00.00 DIVIDENDS AND INTEREST ON OWN CAPITAL PROPOSED / DISTRIBUTED 109,061.59
20.4.0.00.00.00 INVESTMENTS IN 428,527.32
20.4.1.00.00.00     Investments in Subsidiary 338,342.00
20.4.2.00.00.00     Foreclosed Assets 55,652.00
20.4.3.00.00.00     Fixed Assets 31,518.26
20.4.5.00.00.00     Investments 3,015.06
20.5.0.00.00.00 DEFERRED CHARGES 58,276.29
20.6.0.00.00.00 INCREASE IN ASSETS 8,654,887.26
20.6.1.00.00.00     Interbank Investments 3,591,311.69
20.6.2.00.00.00     Marketable Securities 930,557.22
20.6.3.00.00.02     Interbank and Interdepartmental accounts 535,030.29
20.6.4.00.00.00     Lending Operations 2,328,746.19
20.6.5.00.00.01     Leasing Operations 37,957.83
20.6.6.00.00.00     Other Credits 1,209,748.95
20.6.7.00.00.00     Other Assets 21,535.09
20.7.0.00.00.00 DECREASE IN LIABILITIES 161,847.37
20.7.5.00.00.00     Mortgage Notes 161,847.37
30.0.0.00.00.00 INCREASE (DECREASE) IN CASH AND DUE FROM BANKS
  (10.0.0.00.00.00 – 20.0.0.00.00.00) 104,069.19
 
50.0.0.00.00.00 CASH AND DUE FROM BANKS AT BEGINNING OF THE PERIOD 934,908.05
60.0.0.00.00.00 CASH AND DUE FROM BANKS AT THE END OF THE PERIOD 1,038,977.24
70.0.0.00.00.00 INCREASE (DECREASE) IN CASH AND DUE FROM BANKS
  (= 30.0.0.00.00.00) 104,069.19

7010 - FINANCIAL GROUP BALANCE SHEET
CODE DESCRIPTION June 30, 2004 
10.0.0.00.00.00 TOTAL ASSETS 72,189,933.83
10.1.0.00.00.00 CURRENT ASSETS 49,836,144.52
10.1.1.00.00.00 CASH AND DUE FROM BANKS 977,488.66
10.1.2.00.00.00 SHORT-TERM INTERBANK INVESTMENTS 13,740,171.63
10.1.2.21.00.00     Securities Purchased Under Resale Agreements 10,357,859.93
10.1.2.22.00.00     Interbank Deposits 3,382,311.70
10.1.3.00.00.00 MARKETABLE SECURITIES 8,069,193.60
10.1.3.10.00.00     Own Portfolio 4,052,698.22
10.1.3.20.00.00     Subject to Repurchase Commitments 280,126.66
10.1.3.70.00.00     Pledged with Brazilian Central Bank 2,660,450.23
10.1.3.40.00.00     Pledged under Guarantees Rendered 776,681.24
10.1.3.85.00.00     Derivative Financial Instruments 299,237.25
10.1.4.00.00.00 INTERBANK ACCOUNTS 4,825,546.22
10.1.4.10.00.00     Payments and Receipts Pending Settlement 670,124.68
10.1.4.20.00.00     Compulsory Deposits 4,151,007.85
10.1.4.20.10.00         Brazilian Central Bank 4,149,386.69
10.1.4.20.40.00         National Housing System - SFH 1,621.16
10.1.4.80.00.00     Correspondent Banks 4,413.69
10.1.5.00.00.00 INTERDEPARTMENTAL ACCOUNTS 97,729.89
10.1.5.10.00.00     Third-party Funds in Transit 567.48
10.1.5.20.00.00     Internal Transfers of Funds 97,162.41
10.1.6.00.00.00 LENDING OPERATIONS 15,856,444.40
10.1.6.10.00.00     Lending Operations 16,961,198.04
10.1.6.10.10.00         Public Sector 295,698.26
10.1.6.10.20.00         Private Sector 16,665,499.78
10.1.6.90.00.00     Allowance for Lending Losses (1,104,753.64)
10.1.7.00.00.00 LEASING OPERATIONS 8,066.81
10.1.7.10.00.00     Leasing Operations 295,792.44
10.1.7.10.20.00         Private Sector 295,792.44
10.1.7.80.00.00     Unearned Leasing Income (283,115.81)
10.1.7.90.00.00     Allowance for Leasing Losses (4,609.82)
10.1.8.00.00.00 OTHER CREDITS 5,947,761.53
10.1.8.20.00.00     Foreign Exchange Portfolio 3,150,430.45
10.1.8.30.00.00     Income Receivable 369,006.84
10.1.8.40.00.00     Negotiation and Intermediation of Securities 115,026.50
10.1.8.70.00.00     Sundry 2,372,368.43
10.1.8.90.00.00     Allowance for Other Credits Losses (59,070.69)
10.1.9.00.00.00 OTHER ASSETS 313,741.78
10.1.9.40.00.00     Other Assets 138,937.61
10.1.9.70.00.00     Allowance for Other Assets Losses (43,599.49)
10.1.9.90.00.00     Prepaid Expenses 218,403.66
10.2.0.00.00.00 LONG-TERM ASSETS 16,885,421.31
10.2.2.00.00.00 INTERBANK INVESTMENTS 91,974.85
10.2.2.22.00.00     Interbank Deposits 91,974.85
10.2.3.00.00.00 MARKETABLE SECURITIES 4,723,621.11
10.2.3.10.00.00     Own Portfolio 2,621,729.78
10.2.3.20.00.00     Subject to Repurchase Commitments 1,355,124.83
10.2.3.70.00.00     Pledged with Brazilian Central Bank 313,403.34
10.2.3.40.00.00     Pledged under Guarantees Rendered 378,022.76
10.2.3.85.00.00     Derivative Financial Instruments 55,340.40
10.2.4.00.00.00 INTERBANK ACCOUNTS 44,438.36
10.2.4.20.00.00     Compulsory Deposits 44,438.36
10.2.4.20.40.00         National Housing System - SFH 44,438.36
10.2.6.00.00.00 LENDING OPERATIONS 7,671,031.95
10.2.6.10.00.00     Lending Operations 7,958,224.91
10.2.6.10.10.00         Public Sector 332,711.88
10.2.6.10.20.00         Private Sector 7,625,513.03
10.2.6.90.00.00     Allowance for Lending Losses (287,192.96)
10.2.7.00.00.00 LEASING OPERATIONS (11,298.50)
10.2.7.10.00.00     Leasing Operations 276,806.97
10.2.7.10.20.00         Private Sector 276,806.97
10.2.7.80.00.00     Unearned Leasing Income (284,001.87)
10.2.7.90.00.00     Allowance for Leasing Losses (4,103.60)
10.2.8.00.00.00 OTHER CREDITS 4,302,078.23
10.2.8.10.00.00     Receivables on Guarantees Honored 1,734.09
10.2.8.20.00.00     Foreign Exchange Portfolio 462.80
10.2.8.30.00.00     Income Receivable 3,668.55
10.2.8.40.00.00     Negotiation and Intermediation of Securities 2,140.88
10.2.8.70.00.00     Sundry 4,300,268.67
10.2.8.90.00.00     Allowance for Other Credits Losses (6,196.76)
10.2.9.00.00.00 OTHER ASSETS 63,575.31
10.2.9.90.00.00     Prepaid Expenses 63,575.31
10.3.0.00.00.00 PERMANENT ASSETS 5,468,368.00
10.3.1.00.00.00 INVESTMENTS 2,895,490.39
10.3.1.20.00.00     Investments in Subsidiary and Associated Companies 2,420,779.11
10.3.1.20.10.00         Local Residents 2,125,333.20
10.3.1.20.20.00         Foreign residents 295,445.91
10.3.1.50.00.00     Other Investments 520,929.00
10.3.1.90.00.00     Allowance for Losses (46,217.72)
10.3.2.00.00.00 FIXED ASSETS 388,707.46
10.3.2.30.00.00     Land and buildings in use 186,543.21
10.3.2.40.00.00     Other Fixed Assets 825,953.19
10.3.2.90.00.00     Accumulated Depreciation (623,788.94)
10.3.3.00.00.00 LEASED FIXED ASSETS 882,242.45
10.3.3.20.00.00     Leased Assets 1,512,455.09
10.3.3.90.00.00     Accumulated depreciation (630,212.64)
10.3.4.00.00.00 DEFERRED CHARGES 1,301,927.70
10.3.4.10.00.00     Organization and Expansion Costs 1,977,680.05
10.3.4.90.00.00     Accumulated Amortization (675,752.35)
40.0.0.00.00.00 TOTAL LIABILITIES 72,189,933.83
40.1.0.00.00.00 CURRENT LIABILITIES 44,702,309.84
40.1.1.00.00.00 DEPOSITS 21,254,612.69
40.1.1.10.00.00     Demand Deposits 2,944,729.30
40.1.1.20.00.00     Savings Deposits 5,971,098.55
40.1.1.30.00.00     Interbank Deposits 159,475.81
40.1.1.40.00.00     Time Deposits 12,179,309.03
40.1.2.00.00.00 SECURITIES SOLD UNDER REPURCHASE AGREEMENTS 10,146,233.39
40.1.2.10.00.00     Own Portfolio 1,601,820.25
40.1.2.20.00.00     Third Parties Portfolio 5,359,924.28
40.1.2.30.00.00     Unrestricted Portfolio 3,184,488.86
40.1.3.00.00.00 RESOURCES FROM SECURITIES ISSUED 1,877,969.83
40.1.3.30.00.00     Mortgage Notes 617,976.00
40.1.3.50.00.00     Securities Abroad 1,259,993.83
40.1.4.00.00.00 INTERBANK ACCOUNTS 625,411.64
40.1.4.10.00.00     Receipts and Payments Pending Settlement 593,175.18
40.1.4.40.00.00     Correspondent Banks 32,236.46
40.1.5.00.00.00 INTERDEPARTMENTAL ACCOUNTS 508,496.31
40.1.5.10.00.00     Third-Party Funds in Transit 508,342.19
40.1.5.20.00.00     Internal Transfer of Funds 154.12
40.1.6.00.00.00 BORROWINGS 3,695,435.49
40.1.6.10.00.00     Borrowings in Brazil - Governmental Agencies 349.02
40.1.6.30.00.00     Foreign Borrowings 3,695,086.47
40.1.7.00.00.00 ONLENDING IN BRAZIL - GOVERNMENTAL AGENCIES 1,773,528.28
40.1.7.10.00.00     National Treasury 4,070.84
40.1.7.30.00.00     BNDES ( National Economic Development Bank) 675,127.56
40.1.7.40.00.00     CEF (Federal Savings and Loans Bank) 16,848.92
40.1.7.50.00.00     FINAME (National Industrial Financing Authority) 1,077,480.96
40.1.8.00.00.00 FOREIGN ONLENDING 79,112.50
40.1.8.10.00.00     Foreign Onlending 79,112.50
40.1.9.00.00.00 OTHER LIABILITIES 4,741,509.71
40.1.9.10.00.00     Collection of Taxes and Social Contributions 269,096.90
40.1.9.20.00.00     Foreign Exchange Portfolio 1,162,593.78
40.1.9.30.00.00     Social and Statutory 291,772.23
40.1.9.40.00.00     Taxes and Social Security 283,143.83
40.1.9.50.00.00     Negotiation and Intermediation of Securities 272,669.56
40.1.9.85.00.00     Subordinated Debt 12,364.99
40.1.9.87.00.00     Derivative Financial Instruments 187,800.87
40.1.9.90.00.00     Sundry 2,262,067.55
40.2.0.00.00.00 LONG-TERM LIABILITIES 19,515,998.49
40.2.1.00.00.00 DEPOSITS 8,360,868.66
40.2.1.30.00.00     Interbank Deposits 49,523.29
40.2.1.40.00.00     Time Deposits 8,311,345.37
40.2.3.00.00.00 RESOURCES FROM SECURITIES ISSUED 443,076.42
40.2.3.50.00.00     Securities Abroad 443,076.42
40.2.6.00.00.00 BORROWINGS 462,322.54
40.2.6.10.00.00     Borrowings in Brazil - Governmental Agencies 780.49
40.2.6.30.00.00     Foreign Borrowings 461,542.05
40.2.7.00.00.00 ONLENDING IN BRAZIL - GOVERNMENTAL AGENCIES 3,331,640.34
40.2.7.10.00.00     National Treasury 71,933.87
40.2.7.30.00.00     BNDES ( National Economic Development Bank) 2,116,303.31
40.2.7.40.00.00     CEF (Federal Savings and Loans Bank) 56,004.46
40.2.7.50.00.00     FINAME (National Industrial Financing Authority) 1,087,398.70
40.2.8.00.00.00 FOREIGN ONLENDINGS 184,985.78
40.2.8.10.00.00     Foreign Onlendings 184,985.78
40.2.9.00.00.00 OTHER LIABILITIES 6,733,104.75
40.2.9.40.00.00     Taxes and Social Security 623,969.54
40.2.9.85.00.00     Subordinated Debt 1,668,840.19
40.2.9.87.00.00     Derivative Financial Instruments 75,535.50
40.2.9.90.00.00     Sundry 4,364,759.52
40.5.0.00.00.00 DEFERRED INCOME 34,259.26
40.5.1.00.00.00     Deferred Income 34,259.26
40.6.0.00.00.00 STOCKHOLDERS’ EQUITY 7,937,366.24
40.6.1.00.00.00     Capital 5,159,038.65
40.6.1.10.00.00         Local Residents 3,640,446.84
40.6.1.20.00.00         Foreign Residents 1,518,591.81
40.6.2.00.00.00     (Capital to be realized) (1,250.00)
40.6.4.00.00.00     Capital Reserves 179,889.25
40.6.5.00.00.00     Revaluation Reserve on Subsidiaries 9,807.69
40.6.6.00.00.00     Revenue Reserves 2,699,457.78
40.6.7.00.00.00     Unrealized gains and losses-Marketable Securities and Derivative Financial
        Instruments 		(100,287.01)
40.6.8.00.00.00     Retained earnings 42,132.73
40.6.9.00.00.00     Treasury Stock (51,422.85)

7011 - FINANCIAL GROUP STATEMENT OF INCOME

CODE DESCRIPTION From April 1, 2004
to June 30, 2004  		From January 1, 2004
to June 30, 2004 
10.1.1.10.10.00 REVENUE FROM FINANCIAL INTERMEDIATION 2,975,004.90 5,606,932.52
10.1.1.10.10.11 Lending Operations 1,954,526.45 3,706,055.66
10.1.1.10.10.13 Leasing Operations 29,969.13 54,290.42
10.1.1.10.10.15 Marketable Securities 871,725.45 1,581,817.89
10.1.1.10.10.16 Derivative Financial Instruments (102,467.88) (64,301.46)
10.1.1.10.10.17 Foreign Exchange Transactions 123,170.15 139,990.09
10.1.1.10.10.19 Compulsory Deposits 98,081.60 189,079.92
10.1.1.10.20.00 EXPENSES ON FINANCIAL INTERMEDIATION (2,067,918.40) (3,648,664.90)
10.1.1.10.20.12 Deposits and Securities Sold (1,398,690.14) (2,482,886.83)
10.1.1.10.20.14 Borrowings and Onlendings (380,008.67) (574,961.48)
10.1.1.10.20.20 Provision for Lending, Leasing and Other Credits Losses (289,219.59) (590,816.59)
10.1.1.10.00.00 GROSS PROFIT FROM FINANCIAL INTERMEDIATION 907,086.50 1,958,267.62
10.1.1.20.00.00 OTHER OPERATING INCOME (EXPENSES) (553,322.13) (1,203,232.61)
10.1.1.20.21.00 Services Rendered 491,496.30 981,968.53
10.1.1.20.22.00 Salaries, Benefits, Training and Social Security (390,491.70) (751,242.57)
10.1.1.20.24.00 Other Administrative Expenses (559,304.50) (1,127,202.67)
10.1.1.20.26.00 Financial Transaction and Other Taxes (86,402.45) (173,337.38)
10.1.1.20.23.00 Equity in Results of Subsidiary and Associated Companies 168,321.63 244,861.59
10.1.1.20.25.00 Other Operating Income 57,249.92 101,967.85
10.1.1.20.32.00 Other Operating Expenses (234,191.33) (480,247.96)
10.1.1.00.00.00 OPERATING INCOME 353,764.37 755,035.01
10.1.2.00.00.00 NON-OPERATING INCOME (EXPENSES), NET (2,641.91) (16,954.81)
10.1.0.00.00.00 INCOME BEFORE TAXES AND PROFIT SHARING 351,122.46 738,080.20
10.2.0.00.00.00 INCOME TAX AND SOCIAL CONTRIBUTION 9,122.42 (32,553.89)
10.2.1.00.00.00 Provision for Income Tax (17,979.43) (54,779.45)
10.2.2.00.00.00 Provision for Social Contribution (8,134.89) (20,921.30)
10.2.3.00.00.00 Deferred Tax Asset 35,236.74 43,146.86
10.3.0.00.00.00 PROFIT SHARING (47,748.73) (104,746.63)
10.0.0.00.00.00 NET INCOME 312,496.15 600,779.68
20.0.0.00.00.00 INTEREST ON OWN CAPITAL (109,061.59) (240,008.58)
30.0.0.00.00.00 NET INCOME PER SHARE: 0.000002270859099 0.000004303227280

7012 - FINANCIAL GROUP STATEMENT OF CHANGES IN FINANCIAL POSITION

CODE DESCRIPTION From April 1, 2004
to June 30, 2004
10.0.0.00.00.00 FINANCIAL RESOURCES WERE PROVIDED BY 8,296,561.55
10.1.0.00.00.00 ADJUSTED NET INCOME FOR THE PERIOD 314,478.00
10.2.0.00.00.00 CHANGES IN DEFERRED INCOME 16,043.77
10.3.0.00.00.00 STOCKHOLDERS' FUNDS 162,265.86
10.3.3.00.00.00 Other (+/-) 162,265.86
10.5.0.00.00.00 THIRD PARTY FUNDS 7,803,773.92
10.5.1.00.00.00 Increase in Liabilities 7,206,014.20
10.5.1.01.00.00     Deposits 2,092,386.15
10.5.1.02.00.00     Funds Obtained in the Open Market 3,008,614.22
10.5.1.07.00.00     Interbank and Interdepartmental accounts 207,569.03
10.5.1.08.00.00     Borrowings and Onlendings 883,751.62
10.5.1.09.00.00     Other Liabilities 1,013,693.18
10.5.2.00.00.00 Decrease in Assets 817.83
10.5.2.05.00.00     Leasing Operations 817.83
10.5.3.00.00.00 Sale of Assets and Investments 94,616.81
10.5.3.02.00.00     Foreclosed Assets 28,907.13
10.5.3.03.00.00     Fixed Assets 12,300.87
10.5.3.04.00.00     Leased Fixed Assets 41,316.83
10.5.3.05.00.00     Investments 12,091.98
10.5.4.00.00.00 Dividends received from subsidiary and associated companies 502,325.08
20.0.0.00.00.00 FINANCIAL RESOURCES WERE USED FOR 8,220,241.34
20.2.0.00.00.00 DIVIDENDS AND INTEREST ON OWN CAPITAL PROPOSED/DISTRIBUTED 109,061.56
20.4.0.00.00.00 INVESTMENTS IN 921,558.77
20.4.1.00.00.00     Investments in subsidiaries 711,082.57
20.4.2.00.00.00     Foreclosed Assets 25,327.04
20.4.3.00.00.00     Fixed Assets 21,170.42
20.4.4.00.00.00     Leased Fixed Assets 113,524.19
20.4.5.00.00.00     Investments 50,454.55
20.5.0.00.00.00 DEFERRED CHARGES 46,152.94
20.6.0.00.00.00 INCREASE IN ASSETS 6,981,471.60
20.6.1.00.00.00     Interbank Investments 3,650,957.99
20.6.2.00.00.00     Marketable Securities 583,274.01
20.6.3.00.00.02     Interbank and Interdepartmental accounts 539,232.04
20.6.4.00.00.00     Lending Operations 1,579,020.00
20.6.6.00.00.00     Other Credits 610,874.71
20.6.7.00.00.00     Other Assets 18,112.85
20.7.0.00.00.00 DECREASE IN LIABILITIES 161,996.47
20.7.7.00.00.00     Mortgage Notes 161,996.47
30.0.0.00.00.00 INCREASE (DECREASE) IN CASH AND DUE FROM BANKS (10.0.0.00.00.00 – 20.0.0.00.00.00) 76,320.21
50.0.0.00.00.00 CASH AND DUE FROM BANKS AT BEGINNING OF THE PERIOD 901,168.48
60.0.0.00.00.00 CASH AND DUE FROM BANKS AT THE END OF THE PERIOD 977,488.66
70.0.0.00.00.00 INCREASE (DECREASE) IN CASH AND DUE FROM BANKS (= 30.0.0.00.00.00) 76,320.18

7013 - FINANCIAL ECONOMIC GROUP - CONEF

CONEF DESCRIPTION June 30, 2004 
10.0.0.00.00-3 CURRENT AND LONG-TERM ASSETS 75,953,166.68
10.1.0.00.00-2 AVAILABLE FUNDS 1,038,937.75
10.1.1.00.00-5 Cash 661,842.41
10.1.2.00.00-8 Bank Deposits 50,120.93
10.1.3.00.00-1 Free Reserves 962.04
10.1.5.00.00-7 Foreign Money Supply 326,012.37
10.1.5.10.00-4 FOREIGN BANK DEPOSITS 287,047.68
10.1.5.20.00-1 FOREIGN AVAILABLE FUNDS 38,964.69
10.2.0.00.00-1 SHORT-TERM INTERBANK INVESTMENTS 14,089,153.12
10.2.1.00.00-4 Securities Purchased Under Resale Agreements 10,359,407.39
10.2.1.10.00-1 RESALES TO LIQUIDATE - OWN PORTFOLIO 3,826,085.99
10.2.1.10.10-4 Federal Government Securities 3,826,070.94
10.2.1.10.90-8 Other 15.05
10.2.1.20.00-8 RESALES TO LIQUIDATE - THIRD PORTFOLIO 5,778,931.19
10.2.1.40.00-2 UNRESTRICIT PORTFOLIO COMMITMENTS RIGHTS 754,390.21
10.2.2.00.00-7 Interbank Deposits 3,550,030.09
10.2.2.10.00-4 INTERBANK DEPOSITS 3,550,030.09
10.2.6.00.00-9 Foreign Currency Investments 179,715.64
10.2.6.10.00-6 PRIOR NOTICE AND FIXED TIME 46,746.94
10.2.6.20.00-3 BRAZILIAN CENTRAL BANK - EXCESS OF POSITION 132,968.70
10.3.0.00.00-0 MARKETABLE SECURITIES 18,945,957.83
10.3.1.00.00-3 Marketable Securities 12,839,141.15
10.3.1.10.00-0 FIXED RATE SECURITIES 6,068,158.94
10.3.1.10.10-3 Federal Government Securities 3,382,266.86
10.3.1.10.30-9 Financial Institutions 504,485.46
10.3.1.10.62-2 Securities Certificates Receivables 124.60
10.3.1.10.90-7 Others 2,181,282.02
10.3.1.15.00-5 MUTUAL FUNDS 4,549,033.31
10.3.1.17.00-3 Floating Rate Securities - Technical Provisions Reserve 70,285.05
10.3.1.17.40-5 EQUITY FUNDS 70,285.05
10.3.1.20.00-7 Floating Rate Securities - Others 160,365.04
10.3.1.20.10-0 Listed Companies 66,607.38
10.3.1.20.20-3 Non-listed Companies 27,360.04
10.3.1.20.40-9 Equity Funds 66,397.62
10.3.1.85.00-4 FOREIGN MARKETABLE SECURITIES 1,991,298.81
10.3.1.85.10-7 Brazilian Sovereign Bonds 975,022.27
10.3.1.85.20-0 Securities of Foreign Governments 223,981.84
10.3.1.85.30-3 Brazilian State-Owned Companies 128,508.76
10.3.1.85.90-1 Others 663,785.94
10.3.2.00.00-6 SUBJECT TO COMMITMENTS 1,635,251.48
10.3.2.10.00-3 Subject to Repurchase Commitments 1,635,251.48
10.3.2.10.10-6 Federal Government Securities 1,505,065.81
10.3.2.10.90-0 Other 130,185.67
10.3.3.00.00-9 DERIVATIVE FINANCIAL INSTRUMENTS 357,517.94
10.3.3.10.00-6 Derivative Financial Instruments 19,138.06
10.3.3.15.00-1 Derivative Financial Instruments - Swap 338,379.88
10.3.4.00.00-2 Pledged With Brazilian Central Bank 2,948,493.99
10.3.4.10.00-9 PLEDGED WITH BRAZILIAN CENTRAL BANK 2,948,493.99
10.3.6.00.00-8 Pledged Under Guarantee Rendered 1,165,553.27
10.3.6.10.00-5 PLEDGED UNDER GUARANTEE RENDERED 1,165,553.27
10.3.6.10.10-8 Federal Government Securities 1,161,810.38
10.3.6.10.90-2 Other 3,742.89
10.4.0.00.00-9 INTERBANK ACCOUNTS 4,867,463.49
10.4.1.00.00-2 Check Clearing 665,167.56
10.4.2.00.00-5 Restricted Deposits 4,195,291.37
10.4.2.10.00-2 BRAZILIAN CENTRAL BANK 4,149,231.85
10.4.2.50.00-0 SFH - FAHBRE and FGTS DEPOSITS TO REIMBURSE 1,621.16
10.4.2.65.00-2 SFH - Salary Variations Compensation Fund 44,438.36
10.4.2.65.10-5 Novation Option 44,438.36
10.4.4.00.00-1 Correspondent Banks 7,004.56
10.5.0.00.00-8 INTERDEPARTMENTAL ACCOUNTS 97,757.37
10.6.0.00.00-7 LENDING AND LEASING OPERATIONS 23,742,861.92
10.6.1.00.00-0 Lending Operations 23,746,093.61
10.6.1.10.00-7 LOANS AND DISCOUNTED LOANS 13,496,250.04
10.6.1.20.00-4 FINANCING 9,827,364.92
10.6.1.30.00-1 AGRICULTURAL 847,899.69
10.6.1.40.00-8 REAL ESTATE LOANS 928,710.49
10.6.1.40.30-7 Habitational Loans 928,710.49
10.6.1.90.00-3 ALLOWANCE FOR LOAN LOSSES (1,354,131.53)
10.6.2.00.00-3 Leasing Operations (3,231.69)
10.6.2.10.00-0 LEASING OPERATIONS 5,481.73
10.6.2.90.00-6 ALLOWANCE FOR LEASING OPERATIONS LOSSES (8,713.42)
10.9.0.00.00-4 OTHER RECEIVABLES 13,171,035.20
10.9.1.00.00-7 Guarantees Honored 1,734.09
10.9.2.00.00-0 Foreign Exchange 3,150,893.26
10.9.2.06.00-4 UNSETTLED EXCHANGE PURCHASES 2,566,861.05
10.9.2.06.10-7 Export and Interbank Contracts 2,172,145.97
10.9.2.06.30-3 Financial Contracts 34,111.00
10.9.2.06.32-7 Financial Contracts 175,714.95
10.9.2.06.70-5 Interdepartmental and Arbitrage Contracts 184,889.13
10.9.2.13.00-4 UNSETTLED EXCHANGE PURCHASES - FLOATING 643.03
10.9.2.13.50-9 Financial 643.03
10.9.2.25.00-9 Rights on Foreign Exchange Sold 648,441.16
10.9.2.25.10-2 IMPORT AND FINANCIAL CONTRACTS 204,682.72
10.9.2.25.20-5 Interbank 34,269.79
10.9.2.25.22-9 Financial Contracts 235,771.52
10.9.2.25.60-7 Interdepartmental and Arbitrage Contracts 173,717.13
10.9.2.26.00-8 (-) CONTRACTS ADVANCES IN LOCAL CURRENCY (94,549.83)
10.9.2.33.00-8 RIGHTS ON FOREIGN EXCHANGE SOLD - FLOATING RATES 10,808.71
10.9.2.33.10-1 Import and Financial Contracts 6,758.20
10.9.2.33.40-0 Interbank 4,050.51
10.9.2.34.00-7 (-) CONTRACTS ADVANCES IN LOCAL CURRENCY - FLOATING RATES (6,898.69)
10.9.2.34.10-0 (-) Import and Financial Contracts (6,898.69)
10.9.2.50.00-5 INCOME RECEIVABLE OF CONTRACTED ADVANCES AND IMPORT CONTRACTS 25,587.83
10.9.3.00.00-3 INCOME RECEIVABLE 140,917.66
10.9.4.00.00-6 NEGOTIATION AND INTERMEDIATION OF SECURITIES 116,839.40
10.9.4.10.00-3 CASH – REGISTER AND LIQUIDATION 53,357.17
10.9.4.30.00-7 DEBTS TO LIQUIDATE 60,568.83
10.9.4.40.00-4 FINANCIAL ASSETS TRANSACTIONS AND COMMODITIES TO LIQUIDATE 203.04
10.9.4.53.00-8 INTERMEDIATION OF SWAP OPERATIONS 2,710.30
10.9.4.90.00-9 OTHER CREDITS BY NEGOTIATION OF INTERMEDIATION OF SECURITIES 0.06
10.9.5.00.00-9 Specific Credits 1,495,290.50
10.9.5.30.00-0 INSURANCE COMPANIES 613,088.45
10.9.5.30.10-3 Receivables of Insurance Operations 605,967.86
10.9.5.30.20-6 Notes and Credits Receivable 7,120.59
10.9.5.35.00-5 PRIVATE RETIREMENT COMPANIES 48.52
10.9.5.35.10-8 Notes and Income Receivable 48.52
10.9.5.45.00-2 CREDIT CARD COMPANIES 882,153.53
10.9.5.45.10-5 Notes and Credits Receivable 998,471.86
10.9.5.45.20-8 Provision for Credits Losses (116,318.33)
10.9.7.00.00-5 Other 7,967,934.73
10.9.7.25.00-4 FORECLOSED ASSETS 193,955.81
10.9.7.25.90-1 Other Assets 193,955.81
10.9.7.30.00-6 PROVISION FOR LOSSES (54,615.80)
10.9.7.30.90-3 Other Assets (54,615.80)
10.9.7.40.00-3 DEFERRED TAX AND SOCIAL CONTRIBUTION 2,802,850.51
10.9.7.40.10-6 Deferred Tax Circ 2746 - Report after Five Years 521,181.00
10.9.7.40.20-9 Deferred Tax Circ 2746 - Report up to Five Years 967,139.73
10.9.7.40.50-8 DEFERRED TAX 1,314,529.78
10.9.7.45.00-8 PREPAID TAXES 498,710.48
10.9.7.50.00-0 TAX RECOVERY 42,863.16
10.9.7.90.00-8 FOREIGN DEBTORS 29,602.04
10.9.7.95.00-3 LOCAL DEBTORS 4,454,568.53
10.9.8.00.00-8 Nonperforming Loans (66,042.75)
10.9.8.90.00-1 ALLOWANCE FOR LOAN LOSSES (66,042.75)
10.9.9.00.00-1 Prepaid Expenses 363,468.31
20.0.0.00.00-6 PERMANENT ASSETS 4,439,208.55
20.1.0.00.00-5 INVESTMENTS 1,064,846.93
20.1.2.00.00-1 Investments In Subsidiary Companies 49,221.26
20.1.2.10.00-8 INVESTMENTS IN SUBSIDIARY COMPANIES 49,221.26
20.1.2.10.90-5 Other 49,221.26
20.1.3.00.00-4 Fiscal Incentive Investments 6,926.71
20.1.4.00.00-7 Membership Certificates 35,602.06
20.1.4.10.00-4 MEMBERSHIP CERTIFICATES 35,634.39
20.1.4.10.10-7 Securities Exchanges and CETIP 35,239.02
20.1.4.10.90-1 Other 395.37
20.1.4.99.00-1 PROVISION FOR LOSSES (32.33)
20.1.5.00.00-0 Stocks And Quotas 38,503.32
20.1.5.10.00-7 STOCKS AND QUOTAS 41,176.25
20.1.5.10.10-0 Companies of Liquidation and Custody Pledged to Securities Exchange 8,246.81
20.1.5.10.20-3 Other 32,929.44
20.1.5.20.00-4 SHARES OF PRIVATE COMPANIES 496.96
20.1.5.99.00-4 PROVISION FOR LOSSES (3,169.89)
20.1.5.99.10-7 Companies of Liquidation and Custody Pledged to Securities Exchange (229.22)
20.1.5.99.20-0 Other (2,940.67)
20.1.9.00.00-2 OTHER INVESTMENTS 934,593.58
20.1.9.90.00-5 Other Investments 944,797.58
20.1.9.99.00-6 PROVISION FOR LOSSES (10,204.00)
20.2.0.00.00-4 PROPERTY AND EQUIPMENT 957,808.82
20.2.1.00.00-7 Storaged Furniture And Equipment 4,461.68
20.2.2.00.00-0 Property And Equipment In Process 660.65
20.2.3.00.00-3 Land And Buildings 490,833.32
20.2.3.10.00-0 LAND AND BUILDINGS 665,428.91
20.2.3.99.00-7 ACCUMULATED DEPRECIATION OF LAND AND BUILDINGS (174,595.59)
20.2.4.00.00-6 Furniture And Equipment 228,194.73
20.2.4.10.00-3 FURNITURE AND EQUIPMENT 554,896.55
20.2.4.99.00-0 ACCUMULATED DEPRECIATION OF FURNITURE AND EQUIPMENT (326,701.82)
20.2.8.00.00-8 Others 233,658.44
20.2.8.90.00-1 OTHER OPERATING ASSETS 760,260.57
20.2.8.99.00-2 ACCUMULATED DEPRECIATION OF OTHER OPERATING ASSETS (526,602.13)
20.3.0.00.00-3 LEASED ASSETS 882,242.45
20.4.0.00.00-2 DEFERRED CHARGES 1,534,310.35
20.4.1.00.00-5 Organization And Expansion Costs 2,449,723.45
20.4.1.10.00-2 LEASED LOSSES TO AMORTIZE 54,718.50
20.4.1.90.00-8 OTHERS ORGANIZATION AND EXPANSION COSTS 2,395,004.95
20.4.9.00.00-9 Accumulated Amortization (915,413.10)
20.4.9.10.00-6 LEASED LOSSES TO AMORTIZE (26,032.15)
20.4.9.90.00-2 OTHER (889,380.95)
30.0.0.00.00-9 OFF-BALANCE ITEMS 527,596,400.63
30.1.0.00.00-8 CO-OBLIGATION AND RISKS FOR GUARANTEES PROVIDED 3,624,018.03
30.1.1.00.00-1 Imported Credits Outstanding 142,915.98
30.1.3.00.00-7 Confirmed Exported Credits 17,534.77
30.1.4.00.00-0 Guarantees Provided 3,459,611.27
30.1.4.10.00-7 FINANCIAL INSTITUTIONS AUTHORIZED TO OPERATE BY BRAZILIAN CENTRAL BANK 118,070.86
30.1.4.90.00-3 Other 3,341,540.41
30.1.5.00.00-3 Co-Obligation For Credit Assignment 3,956.01
30.3.0.00.00-6 MARKETABLE SECURITIES 9,395,814.38
30.3.1.00.00-9 Securities Registered On Selic 6,848,496.52
30.3.2.00.00-2 Securities Non-Registered On Selic 2,547,317.86
30.4.0.00.00-5 CUSTODY 124,461,591.68
30.4.2.00.00-1 Amounts Guaranted by FGPC 13,662.78
30.4.4.00.00-7 Securities In Guarantee Of Rural Debts Renegotiation 3,985.44
30.4.8.00.00-9 Amounts Guaranted By Financial Institutions 125,746.98
30.4.9.00.00-2 Other 124,318,196.48
30.5.0.00.00-4 COLLECTION 13,631,577.93
30.6.0.00.00-3 NEGOTIATION AND INTERMEDIATION OF SECURITIES 39,350,709.62
30.6.1.00.00-6 Equity, Financial Assets And Commodities 37,833,018.63
30.6.3.00.00-2 Guarantees Honored And Other Guarantees On Stock Exchange 1,054,162.31
30.6.5.00.00-8 Credit Risk On Swap Contracts 463,528.68
30.6.5.10.00-5 CREDIT RISK ON SWAP CONTRACTS 212,573.57
30.6.5.20.00-2 RECEIVABLES UNDER SWAP CONTRACTS 229,637.11
30.6.5.30.00-9 PAYABLES UNDER SWAP CONTRACTS 21,318.00
30.8.0.00.00-1 CONTRACTS 31,231,351.81
30.9.0.00.00-0 CONTROL 305,901,337.18
30.9.4.00.00-2 Preferred Shares Redeemption non Elegible to Capital 7,964.53
30.9.7.00.00-1 Capital Required To Market Risk Covery 694,292.53
30.9.7.10.00-8 EXCHANGE RATE 582,348.28
30.9.7.20.00-5 INTEREST RATE 111,944.25
30.9.8.00.00-4 CONTROL 1,361,003.03
30.9.8.10.00-1 Total Exchange Exposure 1,183,333.93
30.9.8.90.00-7 Deferred Taxes from Depreciation Gains 177,669.10
30.9.8.90.10-0 Total Exchange Exposure 73,432.90
30.9.8.90.30-6 Deferred Taxes Excluded for Tier 1 Capital Purpose 104,236.20
30.9.9.00.00-7 Others Off-Balance Assets 303,838,077.09
39.9.9.99.99-4 TOTAL ASSETS 607,988,775.86
40.0.0.00.00-2 CURRENT AND LONG-TERM LIABILITIES 71,827,027.41
40.1.0.00.00-1 DEPOSITS 29,328,367.83
40.1.1.00.00-4 Demand Deposits 2,952,341.61
40.1.2.00.00-7 Saving Deposits 5,971,098.55
40.1.3.00.00-0 Interbank Deposits 193,782.94
40.1.5.00.00-6 Time Deposits 20,210,071.17
40.1.8.00.00-5 Foreign Deposits 1,073.56
40.2.0.00.00-0 FUNDS OBTAINED IN THE OPEN MARKET 10,153,762.15
40.2.1.00.00-3 Own Portfolio 1,603,233.50
40.2.2.00.00-6 Third Parties Portfolio 5,364,505.40
40.2.3.00.00-9 Unrestrict Portfolio 3,186,023.25
40.3.0.00.00-9 NOTES AND DEBENTURES 2,357,025.79
40.3.1.00.00-2 Mortgage Notes 633,537.52
40.3.3.00.00-8 Accounts Payable For Securities Abroad 1,723,488.27
40.4.0.00.00-8 INTERBANK ACCOUNTS 595,579.05
40.5.0.00.00-7 INTERDEPARTMENTAL ACCOUNTS 508,527.81
40.6.0.00.00-6 BORROWINGS AND ONLENDINGS 9,737,453.92
40.6.1.00.00-9 Borrowings 4,367,456.80
40.6.1.10.00-6 LOCAL BORROWINGS 191,152.13
40.6.1.20.00-3 FOREIGN BORROWINGS 4,176,304.67
40.6.2.00.00-2 Onlendings 5,369,997.12
40.6.2.10.00-9 LOCAL ONLENDINGS 5,105,898.84
40.6.2.20.00-6 FOREIGN ONLENDINGS 264,098.28
40.7.0.00.00-5 Derivative Financial Instruments 264,325.94
40.8.0.00.00-4 OTHER LIABILITIES 17,204,034.85
40.8.1.00.00-7 Collection Of Taxes And Social Contributions 293,910.30
40.8.2.00.00-0 Foreign Exchange Portfolio 1,162,593.78
40.8.3.00.00-3 Social And Statutory 425,694.84
40.8.3.10.00-0 DIVIDENDS PAYABLE 358,064.64
40.8.3.15.00-5 PROVISION FOR PROFIT SHARING 9,549.32
40.8.3.30.00-4 GRATUITY PAYABLE 58,080.88
40.8.4.00.00-6 TAXES AND SOCIAL SECURITY 1,417,326.03
40.8.4.10.00-3 INCOME TAX AND SOCIAL CONTRIBUTION 75,877.00
40.8.4.15.00-8 PROVISION FOR INCOME TAX AND SOCIAL CONTRIBUTION 215,525.10
40.8.4.20.00-0 TAXES PAYABLE 294,112.66
40.8.4.30.00-7 PROVISION FOR DEFERRED TAX 32,680.84
40.8.4.50.00-1 PROVISION FOR TAX CONTINGENCIES 799,130.43
40.8.5.00.00-9 Negotiation And Intermediation Of Securities 273,290.31
40.8.7.00.00-5 Specific Liabilities 6,006,133.01
40.8.7.30.00-6 INSURANCE COMPANIES 1,850,895.16
40.8.7.30.10-9 Non-Committed Technical Provisions 978,011.91
40.8.7.30.20-2 Committed Technical Provisions 601,805.11
40.8.7.30.30-5 Insurance and Reinsurance Companies Debt 271,078.14
40.8.7.35.00-1 PRIVATE RETIREMENT COMPANIES 3,166,965.15
40.8.7.35.10-4 Non-Committed Technical Provisions 3,166,789.19
40.8.7.35.30-0 Retirement Debt Transactions 175.96
40.8.7.40.00-3 CAPITALIZATION COMPANIES 319,108.45
40.8.7.40.10-6 Non-Committed Technical Provisions 273,631.72
40.8.7.40.20-9 Committed Technical Provisions 45,476.73
40.8.7.45.00-8 CREDIT CARD COMPANIES 669,164.25
40.8.7.45.10-1 Payable to Merchants - Credit Cards 669,164.25
40.8.9.00.00-1 Sundry 7,625,086.58
40.8.9.08.00-3 PREPAID RESIDUAL VALUE 381,800.52
40.8.9.90.00-4 OTHER LIABILITIES 7,243,286.06
40.9.0.00.00-3 HYBRID CAPITAL INSTRUMENTS AND SUBORDINATED DEBT 1,677,950.07
40.9.2.00.00-9 Subordinated Debt 1,596,887.46
40.9.2.10.00-6 MATURITY MORE THAN FIVE YEARS 1,503,153.66
40.9.2.50.00-4 MATURITY BETWEEN ONE AND TWO YEARS 93,733.80
40.9.3.00.00-2 Other Subordinated Debt 81,062.61
50.0.0.00.00-5 DEFERRED INCOME 93,617.12
60.0.0.00.00-8 STOCKHOLDERS' EQUITY 8,087,874.08
60.1.0.00.00-7 STOCKHOLDERS' EQUITY 8,087,874.08
60.1.1.00.00-0 Capital 5,634,119.14
60.1.1.10.00-7 CAPITAL 5,435,826.43
60.1.1.10.13-1 Common Shares - Local Residents 3,303,788.95
60.1.1.10.16-2 Non -Redemption Preferred Shares - Local Residents 595,129.64
60.1.1.10.17-9 Other Preferred Shares - Local Residents 1,765.20
60.1.1.10.23-4 Common Shares - Foreign Residents 14,451.88
60.1.1.10.26-5 Non -Redemption Preferred Shares - Foreign Residents 1,503,223.71
60.1.1.10.27-2 Other Preferred Shares - Foreign Residents 916.16
60.1.1.10.28-9 Quotas - Local Residents 16,550.89
60.1.1.20.00-4 CAPITAL INCREASE 198,292.71
60.1.1.20.13-8 Common Shares - Local Residents 198,292.70
60.1.1.20.16-9 Non -Redemption Preferred Shares - Local Residents 0.01
60.1.3.00.00-6 Capital Reserves 236,367.61
60.1.4.00.00-9 Revaluation Reserves 17,684.69
60.1.5.00.00-2 Revenue Reserves 2,380,336.90
60.1.5.10.00-9 LEGAL RESERVE 365,676.80
60.1.5.20.00-6 Statutory Reserve 2,014,658.48
60.1.5.80.00-8 Special Dividends Reserve 1.62
60.1.5.80.99-8 Other 1.62
60.1.6.00.00-5 Unrealized Gains And Losses - Marketable Securities (112,754.10)
60.1.8.00.00-1 Retained Earnings (16,434.44)
60.1.9.00.00-4 Treasury Stock (51,445.72)
70.0.0.00.00-1 REVENUES 12,416,254.02
70.1.0.00.00-0 REVENUE FROM FINANCIAL ACTIVITIES 10,161,050.62
70.2.0.00.00-9 REVENUE FROM NON-FINANCIAL ACTIVITIES 2,210,932.00
70.2.1.00.00-2 Insurance Companies 1,015,777.33
70.2.1.10.00-9 INSURANCE PREMIUMS 992,273.94
70.2.1.30.00-3 FINANCIAL REVENUES 23,503.39
70.2.2.00.00-5 PRIVATE RETIREMENT COMPANIES 595,277.17
70.2.2.10.00-2 CONTRIBUTION REVENUES 595,277.17
70.2.3.00.00-8 Capitalization Companies 150,801.81
70.2.3.10.00-5 CAPITALIZATION PREMIUMS 143,324.71
70.2.3.90.00-1 OTHER 7,477.10
70.2.4.00.00-1 Credit Card Companies 376,449.28
70.2.4.10.00-8 CREDIT CARD REVENUES 237,070.33
70.2.4.30.00-2 FINANCIAL REVENUES 139,378.95
70.2.9.00.00-6 Other Activities 72,626.41
70.2.9.10.00-3 SALES REVENUE OF GOODS AND SERVICES 72,626.41
70.3.0.00.00-8 NON-OPERATING INCOME FROM FINANCIAL ACTIVITIES 44,271.40
80.0.0.00.00-4 EXPENSES (12,032,397.40)
80.1.0.00.00-3 EXPENSES FROM FINANCIAL ACTIVITIES (9,944,919.66)
80.2.0.00.00-2 EXPENSES FROM NON-FINANCIAL ACTIVITIES (1,836,633.18)
80.2.1.00.00-5 Insurance Companies (799,598.92)
80.2.1.10.00-2 INSURANCE CLAIMS (472,925.96)
80.2.1.20.00-9 Selling and Other Insurance Expenses (143,219.07)
80.2.1.30.00-6 Financial expenses (16,337.43)
80.2.1.90.00-8 Others (167,116.46)
80.2.2.00.00-8 Private Retirement Companies (821,104.38)
80.2.2.10.00-5 PRIVATE RETIREMENT PLANS BENEFITS EXPENSES (252,771.49)
80.2.2.20.00-2 SELLING AND OTHER INSURANCE EXPENSES (2,165.28)
80.2.2.30.00-9 FINANCIAL EXPENSES (566,167.61)
80.2.3.00.00-1 CAPITALIZATION COMPANIES (109,296.04)
80.2.3.10.00-8 CAPITALIZATION PREMIUMS REDEMPTION EXPENSES (7,708.23)
80.2.3.20.00-5 SELLING AND OTHER CAPITALIZATION EXPENSES (4,736.31)
80.2.3.30.00-2 FINANCIAL EXPENSES (96,851.50)
80.2.4.00.00-4 Credit Card Companies (88,965.62)
80.2.4.30.00-5 ADMINISTRATIVE EXPENSES (88,965.62)
80.2.9.00.00-9 Other Activities (17,668.22)
80.2.9.10.00-6 SALES EXPENSES OF GOODS AND SERVICES (16,235.05)
80.2.9.20.00-3 SELLING EXPENSES (1,433.17)
80.3.0.00.00-1 NON-OPERATING EXPENSES FROM FINANCIAL ACTIVITIES (35,800.86)
80.9.0.00.00-5 INCOME BEFORE TAXES AND PROFIT SHARING (215,043.70)
80.9.4.00.00-7 INCOME TAX AND SOCIAL CONTRIBUTION (96,266.84)
80.9.4.10.00-4 INCOME TAX (71,398.72)
80.9.4.10.10-7 Financial Activities (71,398.72)
80.9.4.30.00-8 SOCIAL CONTRIBUTION (24,868.12)
80.9.4.30.10-1 Financial Activities (24,868.12)
80.9.7.00.00-6 PROFIT SHARING (118,776.86)
80.9.7.10.00-3 Profit Sharing (118,776.86)
80.9.7.10.10-6 Administrators (2,509.94)
80.9.7.10.20-9 Employees (116,266.92)
90.0.0.00.00-7 OFF-BALANCE ITEMS 527,596,400.63
99.9.9.99.99-2 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 607,988,775.86

7014 - NOTES TO THE QUARTERLY FINANCIAL INFORMATION

1. Operations

The operations activities of Unibanco - União de Bancos Brasileiros S.A. and its direct and indirect subsidiaries and jointly controlled companies in Brazil and abroad include, in addition to the financial activities of the Unibanco Conglomerate, other activities carried out by subsidiaries with specific objectives principally related to insurance, credit card operations, annuity product plans and private retirement plans.

2. Presentation of Financial Statements

The financial statements of Unibanco - União de Bancos Brasileiros S.A. and its foreign branches (Unibanco) are presented together with the consolidated financial statements of Unibanco and its direct and indirect subsidiaries, and its jointly controlled companies (Unibanco Consolidated), as shown in Note 9.

The consolidated financial statements have been prepared in accordance with consolidation principles determined by the Brazilian Securities Commission. Intercompany investments, balances, income and expenses, as well as unrealized intercompany gains and losses, were eliminated upon consolidation.

The financial statements of the subsidiaries Unibanco Leasing S.A. - Arrendamento Mercantil and Dibens Leasing S.A. – Arrendamento Mercantil were reclassified by means of off-book adjustments, in order to reflect their financial position and results of operations in the consolidation, in accordance with the financial method of accounting for leasing transactions.

In conformity with Instruction 247/96 issued by the Brazilian Securities Commission, assets, liabilities, revenues and expenses of jointly controlled companies have been included in the consolidated financial statements on a proportional basis.

3. Summary of Significant Accounting Policies

The accounting policies adopted by Unibanco and its subsidiary companies are in accordance with the requirements of Brazilian Corporate Law and the regulations of the National Monetary Council, the Brazilian Central Bank, the Brazilian Securities Commission and the Superintendency of Private Insurances.

(a) Determination of net income

Net income is determined on the accrual basis and considers:

  • income, expenses and monetary or exchange rate variations, at official rates or indices, pro rata temporis, on current and long-term assets and liabilities;

  • the effects of the provisions to adjust the assets to market or realizable values;

  • the adjustments to the technical reserves for insurance, annuity products and retirement plans;

  • the insurance premiums, as well their respective acquisition costs are recognized in earnings when the policy is issued and it is adjusted to the changes in technical provision of unearned premium and to the deferred acquisition costs over the related contract period;

  • the commission related to the policy issuance are deferred to earnings on a straight-line basis over a period of 12 months;

  • the effects of the adjustment of investments in subsidiary and associated companies to reflect the equity method of accounting;

  • the provision for federal income tax at the rate of 15% on taxable income, plus a specific surcharge of 10% on taxable income over established fiscal limits;

  • the provision for social contribution calculated at the rate of 9% on the adjusted income before income tax; and

  • tax credits calculated on temporary differences between book value and tax bases, and on tax loss carry-forwards.

(b) Current and long-term assets

These assets are stated at cost plus, when applicable, the related income and monetary and exchange rate variations, and less the related unearned income and/or allowances for losses, except for marketable securities, the derivative financial instruments and financial assets subject to hedge, which are presented, as stated in item (c).

The allowance for lending, leasing and other credit losses is set up in an amount considered sufficient to cover probable future losses. Management's analysis to establish the allowance required takes into account the economic environment, past experience, specific, and general portfolio risks, as well as the regulations of the Brazilian Central Bank.

(c) Marketable securities and derivative financial instruments

Marketable securities

Marketable securities are classified into three categories accounted for as follows:

  • Trading securities – acquired for trading purposes. They are stated at cost plus accrued interest and adjusted to their fair values. Unrealized gains and losses are recognized currently in earnings.

  • Securities available for sale – acquired as part of the strategy for the risk management of market risks. They are negotiated as a result of the changes in the interest rates, for changes in payment conditions or other factors. They are stated at cost plus accrued interest and adjusted to their fair value, with the related income recognized currently and unrealized gains and losses recorded as a separate component of stockholders’ equity, net of applicable taxes, in “Unrealized gains and losses – marketable securities and derivatives”. The realized gains and losses are recognized in earnings as a contra account in the stockholders’ equity item.

  • Securities held to maturity – marketable securities for which there is an intention and financial ability to hold them to maturity. They are held at cost plus accrued interest recognized currently in earnings.

Derivative financial instruments (assets and liabilities)

The derivative financial instruments are classified based on Unibanco’s intent for hedging or non-hedging purposes.

  • Derivative financial instruments designed to hedge or to modify characteristics of financial assets or liabilities and (i) which are highly correlated with respect to changes in fair value in relation to the fair value of the item being hedged, both at inception date and over the life of the contract; and (ii) are effective at reducing the risk associated with the exposure being hedged, are classified as hedges as follows:

-

Fair value hedge. The financial assets and liabilities and the corresponding derivative financial instruments are accounted for at fair value and any offsetting gains or losses recognized currently in earnings; and


-

Cash flow hedge. The effective hedge portion of financial assets and liabilities and the respective derivative financial instruments are accounted for at fair value and any unrealized gains and losses are recorded as a separate component of stockholders’ equity, net of applicable taxes, in “Unrealized gains and losses – marketable securities and derivatives”. The non-effective hedge portion, if any, is recognized currently in earnings.

  • Transactions involving derivative financial instruments to meet customer needs or for the bank’s own purposes that do not meet hedging accounting requirements established by the Brazilian Central Bank, primarily derivatives used to manage overall exposure, are accounted for at fair value with unrealized gains and losses recognized currently in earnings.

(d) Technical provision

The technical provisions are established in accordance to Resolution CNSP no. 89/02. In accordance with Resolution no. 61/01, an actuarial valuation is performed on an annual basis and reported to the Superintendency of Private Insurances (SUSEP) with the actuarial report.

The provision for unearned premiums is established at the amount of that portion of the insurance premiums retained, corresponding to the unexpired risk period, in accordance with the regulation of the Superintendency of Private Insurances.

The provision for insufficient premiums is established, when applicable, based on Technical Actuarial Note (NTA) reported to the Superintendency of Private Insurances.

The mathematical provisions related to the “Life Free Benefits Generation Program” (VGBL) comprise the amounts of the liabilities assumed under the form of survival insurance and are established based on the financial method determined in the contract under the responsibility of a legally qualified actuary registered with the Brazilian Institute of Actuaries (IBA). The mathematical provisions represent the present value of future benefits estimated based on actuarial methods and assumptions. The provision for benefits to be granted represents the participants whose benefits has not yet begun.

The financial expenses related to the technical provision are recorded as “Financial Expenses”.

The provision for payment of unsettled claims is established based on the estimated probable payments net of recoveries determined in accordance with claims reported up to the financial statement date and adjusted for price-level restatement in the legal standards.

The provision for claims incurred but not yet reported (IBNR) is established based on an actuarial determination of experienced losses and the methodology described in the Actuarial Note reported and approved by the Superintendency of Private Insurances.

(e) Permanent assets

Investments, fixed assets and deferred charges are stated at cost.

Investments in subsidiary and associated companies are accounted for using the equity method of accounting, as shown in Note 9. The effects in subsidiary and associated companies related to the valuation of marketable securities and derivatives, as mentioned above in item (c), are recognized by the controlling company so as to maintain the original record made by the subsidiary and associated companies.

Other investments consist, principally, of investments carried at cost adjusted when applicable by an allowance for losses, and membership certificates of stock and commodities exchange adjusted to book equity values.

Goodwill relating to the acquisition of subsidiaries is being amortized over periods not exceeding ten years, according to the expected period of benefit.

Depreciation of fixed assets is calculated on the straight-line method at the following annual rates: buildings in use - 4%; equipment in use - 10%; and communications, data processing, and transportation systems - 20%.

Deferred charges, composed substantially of leasehold improvements and software acquisition and development, are amortized over the term of the respective lease contracts or up to five years as from the beginning of their use.

(f) Current and long-term liabilities

These amounts include, when applicable, accrued interest and monetary and exchange rate variations, except for derivative financial instruments and liabilities subject to hedge, which are presented above in item (c).

4. Marketable Securities

(a) The balances as of June 30, 2004 can be summarized as follows:

Marketable Securities Unibanco Unibanco Consolidated
Trading assets 3,601,982 9,177,201
Available for sale 2,960,220 3,237,286
Held to maturity 4,924,671 6,173,892
Subtotal 11,486,873 18,588,379
Derivative financial instruments 381,968 357,190
Total 11,868,841 18,945,569
Current 6,920,919 13,258,316
Long-term 4,947,922 5,687,253

(b) Trading assets

    Unibanco Unibanco Consolidated
 
Issuer/Type of investment Amortized
cost 		Fair value Amortized
cost 		Fair value
Federal government 3,420,035 3,419,801 5,712,645 5,711,278
Financial treasury bills 48,672 48,222 1,186,674 1,186,309
Treasury bills 3,306,398 3,304,821 4,138,238 4,135,560
Central bank notes - - 2,828 2,828
Treasury notes 64,965 66,758 384,786 386,581
Other - - 119 -
Brazilian sovereign bonds 50,740 50,683 156,048 155,991
Bank debt securities - - 312,710 312,710
Eurobonds - - 35,347 35,347
Time deposits - - 277,363 277,363
Open mutual funds (1) 94,914 94,914 2,272,965 2,271,711
Debentures 9,846 9,866 77,401 146,188
Other 28,780 26,718 584,115 579,323
Total 3,604,315 3,601,982 9,115,884 9,177,201
____________________
(1)  

Open mutual funds are substantially held by investments in insurance, annuity products and private retirement companies, and their portfolios are represented principally by federal government securities.

Trading securities are classified as current assets, independent of their maturity dates, since these securities are actively and frequently traded.

(c) Securities available for sale

(i) By type:

  Unibanco Unibanco Consolidated
 
Issuer/Type of investment Amortized
cost 		Fair value
adjustment 		Fair value Amortized
cost 		Fair value
adjustment 		Fair value
Federal government 6,947 (1,624) 5,323 341,960 (280) 341,680
Financial treasury bills - - - 292,486 711 293,197
Treasury bills - - - 1,153 (10) 1,143
Central bank notes - - - 39,542 643 40,185
Other 6,947 (1,624) 5,323 8,779 (1,624) 7,155
Brazilian sovereign bonds - - - 32,351 (43) 32,308
Foreign government - - - 65,402 307 65,709
Corporate debt securities 1,948,534 (86,082) 1,862,452 2,199,301 (101,894) 2,097,407
Debentures 1,912,792 (80,429) 1,832,363 2,118,946 (91,747) 2,027,199
Eurobonds 18,251 - 18,251 30,341 (126) 30,215
Other 17,491 (5,653) 11,838 50,014 (10,021) 39,993
Bank debt securities 1,036,077 3,912 1,039,989 287,379 5,455 292,834
Eurobonds 808,274 - 808,274 28,105 1,543 29,648
Debentures - - - 1,661 - 1,661
Mortgage notes 115,980 3,912 119,892 115,980 3,912 119,892
Time deposits 111,759 - 111,759 141,633 - 141,633
Other 64 - 64 - - -
Marketable equity securities 44,268 (3,718) 40,550 114,124 (15,767) 98,357
Open mutual funds (1) 11,906 - 11,906 341,299 - 341,299
Total 3,047,732 (87,512) 2,960,220 3,349,465 (112,179) 3,237,286
____________________
(1)  

Open mutual funds are substantially held by investments in insurance, annuity products and private retirement companies, and their portfolios are represented principally by federal government securities.

(ii) By maturity:

  Unibanco Unibanco Consolidated
 
Maturity Amortized cost Fair value Amortized cost Fair value
Less than 3 months 482,321 464,034 262,521 244,000
Between 3 months and 1 year 485,550 486,156 475,792 476,593
Between 1 and 3 years 1,215,263 1,209,160 1,167,550 1,159,113
Between 3 and 5 years 403,842 414,172 478,006 488,291
Between 5 and 15 years 200,093 203,733 299,888 293,960
No stated maturity (1) 260,663 182,965 665,708 575,329
Total 3,047,732 2,960,220 3,349,465 3,237,286
____________________
(1)  

Refers to marketable equity securities and open mutual funds.

(d) Securities held to maturity

(i) By type:

  Unibanco Unibanco Consolidated
 
Issuer/Type of investment Amortized cost
 
Federal government 2,354,937 3,604,158
Financial treasury bills - 148,732
Treasury bills - 268
Central bank notes 419,943 900,634
Treasury notes 1,934,994 2,542,657
Other - 11,867
Brazilian sovereign bonds 2,152,253 2,152,253
Corporate debt securities 304,220 304,220
Eurobonds 304,220 304,220
Bank debt securities 113,261 113,261
Eurobonds 113,261 113,261
Total 4,924,671 6,173,892

The fair value of these securities was R$4,968,841 in Unibanco and R$6,277,173 in Unibanco Consolidated. The difference between the amortized cost and the fair value totaled R$44,170 in Unibanco and R$103,281 in Unibanco Consolidated and is represented mainly by bonds issued by the Brazilian federal government and the Brazilian sovereign bonds.

(ii) By maturity:

  Unibanco Unibanco Consolidated
 
Maturity Amortized cost
 
Less than 3 months 250,241 683,824
Between 3 months and 1 year 1,609,024 1,799,729
Between 1 and 3 years 1,229,630 1,447,887
Between 3 and 5 years 513,123 513,123
Between 5 and 15 years 1,110,774 1,110,774
More than 15 years 211,879 618,555
Total 4,924,671 6,173,892

(iii) Financial ability

Unibanco and its subsidiaries classified a portion of their portfolio as held to maturity using the maturities, interest rates (positive spread) and currency of their liability operations, as parameters to define financial ability to hold the securities to maturity.

(e) Fair value determination

The fair value of marketable securities was based on an internal valuation model, which uses the average rate for the last business day of the quarter as informed by Stock Exchanges, trade associations and external entities.

5. Lending and Leasing Operations Portfolio and Allowance for Losses

(a) Components of the lending and leasing operations portfolio by type and by maturity:

    Unibanco
  Unibanco Consolidated
By type
Discounted loans and notes 10,360,583 11,055,662
Financing 7,448,977 9,807,671
Agricultural 847,900 847,900
Real estate loans 928,710 928,710
Credit card - 3,918,676
Total lending operations 19,586,170 26,558,619
Leasing operations - 534,279
Advances on exchange contracts (1) 1,812,012 1,960,324
Total leasing operations and advances on exchange contracts 1,812,012 2,494,603
Guarantees honored 1,197 1,734
Other receivables (2) 256,972 692,300
Total other credits 258,169 694,034
Co-obligation on credit card customer financing (3) - 298,105
Total risk 21,656,351 30,045,361
By maturity
Past-due for more than 15 days (Note 5 (d)) 488,361 1,551,205
Falling due:
Less than 3 months (4) 7,741,361 12,483,768
Between 3 months and 1 year 6,228,433 7,683,028
Between 1 and 3 years 4,811,500 5,664,374
More than 3 years 2,386,696 2,662,986
Total risk 21,656,351 30,045,361
____________________
(1)  

Recorded in “Other liabilities” and “Foreing exchange portfolio”.

(2)  

Other receivables consist primarily of receivables from sale of assets and notes and credits receivable.

(3)  

Recorded as off-balance sheet items.

(4)  

Include 14 days past-due amounts.

(b) Components of lending, leasing and other credits by business activity:

  Unibanco Unibanco Consolidated
 
     % of    % of
  Value distribution Value distribution
Manufacturing 8,558,074 39.5 9,235,908 30.7
Retailers 2,735,814 12.6 3,057,865 10.2
Financial service 431,084 2.0 235,732 0.8
Residential construction loans 292,425 1.3 292,425 1.0
Other services 4,216,350 19.5 5,478,966 18.2
Agriculture, livestock, forestry and fishing 775,509 3.6 775,509 2.6
Individual 4,647,095 21.5 10,968,956 36.5
Total 21,656,351 100.0 30,045,361 100.0

(c) Concentration of lending, leasing and other credits:

  Unibanco Unibanco Consolidated
 
Largest clients Value  % of the total Value  % of the total
10 largest clients 2,751,890  12.7 2,702,640  9.0
50 following clients 4,916,862  22.7 4,957,616  16.5
100 following clients 3,327,270  15.4 3,408,022  11.3
Other clients 10,660,329  49.2 18,977,083  63.2
Total 21,656,351  100.0 30,045,361  100.0

(d) Components of lending, leasing and other credits and aloowance for losses by risk level:

    Unibanco
   
      Past-due credits        
     
       
Risk level % minimum allowance required Current credits Falling due installments Overdue installments (1) Total credits Distribution % Total allowance % effective allowance
AA -  10,577,318  -  -  10,577,318  48.8 10,043  - 
A 0.5 6,258,257  -  -  6,258,257  28.9 33,118  0.5
B 1.0 1,787,287  129,477  20,100  1,936,864  8.9 24,226  1.3
C 3.0 1,305,141  122,239  31,838  1,459,218  6.7 60,808  4.2
D 10.0 435,474  106,803  108,220  650,497  3.1 170,115  26.2
E 30.0 27,970  62,956  55,885  146,811  0.7 48,865  33.3
F 50.0 30,129  58,864  32,710  121,703  0.6 65,011  53.4
G 70.0 19,070  41,445  28,280  88,795  0.4 63,591  71.6
H 100.0 91,124  114,436  211,328  416,888  1.9 416,888  100.0
Total   20,531,770  636,220  488,361  21,656,351  100.0 892,665   
% of total risk                 4.1%  


    Unibanco Consolidated
   
      Past-due credits        
     
       
Risk level % minimum allowance required Current credits Falling due installments Overdue installments (1) Total credits Distribution % Total allowance % effective allowance
AA -  11,766,724  -  -  11,766,724  39.2 14,105  - 
A 0.5 11,336,830  -  -  11,336,830  37.7 86,972  0.8
B 1.0 1,956,338  181,360  286,966  2,424,664  8.1 44,721  1.8
C 3.0 1,736,037  161,527  174,038  2,071,602  7.0 122,377  5.9
D 10.0 474,168  126,851  283,289  884,308  2.9 211,408  23.9
E 30.0 246,991  70,734  154,058  471,783  1.6 151,584  32.1
F 50.0 50,305  64,496  138,144  252,945  0.8 133,144  52.6
G 70.0 30,807  45,057  116,165  192,029  0.6 136,388  71.0
H 100.0 118,588  127,343  398,545  644,476  2.1 644,476  100.0
Total   27,716,788  777,368  1,551,205  30,045,361  100.0 1,545,175   
% of total risk                 5.1%  
____________________
(1)

Include past-due for more than 15 days.

The allowance for lending, leasing and other credit losses is recorded in accordance with Resolution 2682 of the Brazilian National Monetary Council. The minimum allowance for each level is used as a general rule; however, based on the judgment and experience of management, higher percentages are used within each level in order to assess the risk of certain clients, operations or portfolios more accurately.

(e)The balance of renegotiated transactions with clients as established in Resolution 2682 of the Brazilian National Monetary Council totaled R$541,345 in Unibanco and R$726,365 in Unibanco Consolidated. These transactions relate to active portfolio and credits written off , and were recognized with the intention to maintain the risk assessment and the provision for losses existing prior to renegotiation. These transactions will have a lower risk classification only after the collection of a significant portion of the renegotiated debt. For such lower risk reclassification, the minimum collection percentage established is 25%.

(f) Changes in the allowance for credit losses during the period:

  Unibanco Unibanco Consolidated
Balance at the beginning of the period 879,489  1,395,855 
Provision for loan losses 137,994  316,747 
Balance of acquired company -  144,949 
Loan charge-offs (124,818) (312,376)
Balance at the end of the period 892,665  1,545,175 
 
Loan recoveries (1) 37,966  73,763 
____________________
(1)

Loan recoveries were recorded as revenue from “Lending operations” and “Leasing operations”.

6. Foreign Exchange Portfolio

(a) Balance sheet

  Unibanco Unibanco Consolidated
Assets - Other credits    
Unsettled exchange purchases 2,409,005  2,567,504 
Rights on foreign exchange sold 653,298  659,250 
(-) Received advances (101,163) (101,448)
Income receivable from advances on exchange contracts 22,502  25,587 
Total 2,983,642  3,150,893 
 
Liabilities - Other liabilities
Unsettled exchange sales 663,550  669,521 
Obligations for foreign exchange purchased 2,320,331  2,471,411 
(-) Advances on exchange contracts (1,812,012) (1,960,324)
Other (18,019) (18,014)
Total 1,153,850  1,162,594 
 
Off-balance sheet
Import credits outstanding 127,448  142,916 
Confirmed export credits 15,398  16,375 

(b) Statement of income

  Unibanco Unibanco Consolidated
Income from foreign exchange transactions 1,162,606  1,582,757 
Expenses from foreign exchange transactions (1,028,911) (1,447,671)
Net gain on foreign exchange transactions 133,695  135,086 
Adjustments:
Income from foreign currency financing (1) 85,179  99,602 
Income from foreign short-term investments (2) 13,182  13,232 
Expenses from obligations with foreign bankers (3) (184,767) (210,306)
Total adjustments (86,406) (97,472)
Adjusted net gain on foreign exchange transactions 47,289  37,614 
____________________
Registered

as follows:

(1)

“Lending operations”
(2)

“Revenue from marketable securities”
(3)

“Borrowings and onlendings”

7. Other Credits

  Unibanco Unibanco Consolidated
Sundry    
Deferred tax (Note 17 (a)) 1,362,417  2,801,242 
Escrow deposits for civil and labor suits 998,504  1,934,233 
Insurance premium receivable -  642,639 
Prepaid taxes 201,146  527,269 
Government retirement benefit advances 240,247  240,247 
Notes and credits receivable 176,779  220,584 
Receivables from purchase of assets 57,691  158,529 
Receivables from credit card operations -  122,046 
Salary advances and other 40,376  39,388 
Accounts receivable from subsidiaries 15,953  - 
Other 575,746  1,328,599 
Total 3,668,859  8,014,776 
Short-term 946,082  3,059,681 
Long-term 2,722,777  4,955,095 

8. Foreign Branches

As mentioned in Note 2, the financial statements of foreign branches (Grand Cayman and Nassau) are consolidated with those of Unibanco.

The balances of these branches can be summarized as follows:

  US$ thousand R$ thousand
Current assets 2,835,082  8,810,018 
Long-term assets 1,670,173  5,190,062 
Permanent assets 73  228 
Total assets 4,505,328  14,000,308 
 
Current liabilities 2,631,307  8,176,786 
Long-term liabilities 1,620,278  5,035,014 
Deferred income 810  2,517 
Branch equity 252,933  785,991 
Total liabilities 4,505,328  14,000,308 
Net income for the quarter 22,171  79,245 

9. Investments

(a) Investments in subsidiary and associated companies

Results of investments in subsidiary and associated companies were recorded as “Equity in the results of subsidiary and associated companies” in the statement of income. The foreign branches’ and subsidiary companies’ exchange gains in the amount of R$124,885 in Unibanco and R$105,151 in Unibanco Consolidated, were recognized as “Other operating income”. The investments in subsidiary and associated companies and the major transactions relating to investments in subsidiary and associated companies, were as follows:

  Number of shares or quotas (in thousands) Percentage holding (%)        
 
       
  Common  Preferred  Unibanco Unibanco Consolidated Adjusted stockholders equity  Adjusted net income(loss) Equity in results adjustments Investments value
Investments of Unibanco
    Subsidiary companies
Unibanco AIG Seguros S.A. 345,014  188,793  49.707 49.707 1,294,027  72,671  36,333  643,224 
Unipart Participações Internacionais Ltd. 1,302  -  100.000 100.000 1,011,302  21,518  19,941  1,011,302 
Unicard Banco Múltiplo S.A. (1) 117,629,258  101,832,650  100.000 100.000 950,091  551  5,975  803,964 
Banco Fininvest S.A. 4  1  99.920 99.920 480,656  47,326  46,799  480,269 
Unibanco Companhia de Capitalização (7) 4,194  -  99.992 99.992 356,517  44,940  21,737  356,487 
Unibanco Empreendimentos e Participações Ltda. (7) 201,112  -  47.797 100.000 222,645  12,726  5,048  106,418 
Banco Dibens S.A. 4,518,078  -  51.001 51.001 199,126  1,575  2,487  101,556 
Unibanco Leasing S.A. – Arrendamento Mercantil 265  -  99.999 99.999 147,882  11,433  11,433  147,881 
Estrel Participações S.A. (3) and (7) 44,546  89,093  100.000 100.000 144,674  4,435  3,981  144,674 
Banco BNL do Brasil S.A. (4) 2,769,089  2,769,390  99.965 99.965 140,177  47,086  47,070  140,114 
Unibanco Empreendimentos Ltda. (7) 150,489  -  16.126 100.000 122,948  1,138  55  19,826 
Unibanco Corretora de Valores Mobiliários S.A. 40,467  40,467  99.999 100.000 84,326  519  2,023  84,326 
Interbanco S.A. 19,000  -  99.996 99.999 75,943  7,154  8,329  75,940 
BWU Representação e
Participações Ltda. (7) 		13,785  35,841  60.000 60.000 67,357  3,158  1,113  40,414 
Banco1.net S.A. 34,078  -  65.934 65.934 50,270  (292) (855) 33,538 
Unibanco Asset Management – Banco de Investimento S.A. (5) 1,468  1,468  99.999 99.999 23,527  4,149  4,172  23,527 
Unibanco Serviços de Investimento
Ltda. (5) 		100  -  99.999 100.000 8,256  7,586  7,589  8,256 
Companhia Hipotecária Unibanco – Rodobens (6) 3,250  -  50.000 50.000 4,177  45  63  2,088 
Unibanco Representação e Participações Ltda. (7) -  -  -  -  -  (13,835) 5,332  - 
Others                   7,760  232,665 
    Jointly controlled companies (i)
Credicard S.A.- Administradora de Cartões de Crédito 12,938  -  33.333 33.333 282,525  65,712  21,904  94,175 
Serasa S.A. 364  349  19.045 19.120 147,684  14,626  2,008  28,127 
Tecnologia Bancária S.A. 762,278  -  19.051 21.432 131,240  3,233  511  25,002 
Redecard S.A. (8) 200  400  31.943 31.943 49,120  32,494  10,380  15,690 
Cibrasec – Companhia Brasileira de Securitização 8  -  12.499 12.499 54,155  2,328  291  6,769 
Interchange Serviços S.A. 75,000,000  -  25.000 25.000 32,143  1,795  348  8,036 
Banco Investcred Unibanco S.A. (3) -  -  -  -  -  (15,220) -  - 
Goodwill on acquisition of controlled companies                   -  1,228,251 
Others                   (3,389) 12,389 
Total                   268,971  5,874,908 
Investments of
Unibanco Consolidated
    Associated companies
AIG Brasil Companhia de Seguros 54,214  -  -  49.999 83,149  2,035  1,018  41,573 
Goodwill on acquisition of controlled companies                   -  1,633,512 
Others                   (2,100) 7,648 
Total                   (1,082) 1,682,733 


    Percentage holding (%) Adjusted stockholders equity Adjusted net income (loss) 
   
  Number of shares or quotas Unibanco Consolidated
 
Main direct and indirect subsidiary companies invested by: Common Preferred
Unipart Participações Internacionais Ltd. (i)
    Unibanco Cayman Bank Ltd. 13,252  - 100.000 407,395  30,022 
    Unibanco União de Bancos Brasileiros (Luxembourg) S.A. 200  - 99.999 205,201  6,807 
    Unibanco Securities Ltd. 17,770  - 100.000 53,909  (2,461)
    Unicorp Bank & Trust Ltd. 1,750  3,250 100.000 38,354  8,476 
Unibanco AIG Seguros S.A. (i)
    Unibanco AIG Previdência S.A. 465  - 99.999 167,815  13,930 
    Unibanco AIG Saúde Seguradora S.A. 20,000  - 99.999 41,652  512 
    Phenix Participações Ltda. 93,992  - 99.999 46,828  13,739 
Banco Fininvest S.A.
    Creditec - Crédito, Financiamento e Investimento S.A. (2) 28,700  - 100.000 14,604  4,500 
Conabinu Participações Ltda. e Unipart Participações Internacionais Ltd.
    Hipercard Administradora de Cartões de Crédito Ltda. (10) 7  - 100.000 222,644  20,000 
Estrel Participações S.A.
    Banco Investcred Unibanco S.A. (3) 95  - 49.997 171,405  23,180 
Bib Cash Management Ltda.
    Orbitall Serviços e Processamento de Informações Comerciais Ltda. (9) 17,333  - 33.333 169,986  12,438 
____________________
(i)

The percentage shown in the Unibanco Consolidated column refers to the parent companies' percentage holding.

(1)

The difference between the net income (loss) and the equity results and the stockholders equity and the investment value was mainly due to the gains to be realized on sale of companies to other related party companies. The gains to be realized are being recognized in accordance with the amortization of goodwill on acquired companies.

(2)

In November 2003, Unibanco, through its subsidiary Banco Fininvest, signed a purchase and sale agreement to acquire Creditec – Crédito Financiamento e Investimento S.A., for approximately R$47 million.

(3)

The Extraordinary Shareholders’ meeting held on February 26, 2004, approved the capital increase in Estrel Participações S.A. in the amount of R$135,838 subscribed by Unibanco and paid through the assignment and transference of 95,284 common share of Banco Investcred Unibanco S.A. for its book value.

(4)

Unibanco acquired, based on May 31, 2004 balance sheet data, the total capital of Banco BNL do Brasil S.A. and its subsidiaries companies from Banca Nazionale del Lavoro S.p.A. ("BNL") resulting in a negative goodwill of R$12,241. As a consequence, BNL received 1,000,000,000 Units. Thus, after the approval from the Brazilian Central Bank of the transaction, BNL will own, directly and indirectly, 1.43% of Unibanco's capital.

 

The BNL do Brasil had a credit portfolio of R$698.5 million, in addition a credit card and a consumer credit portfolio that included 107 thousand clients and 96 thousand cards issued.

 

The transaction also included the creation of an Italian Desk at Unibanco, which will allow BNL and Unibanco to offer business opportunities to Italian companies in Brazil.

(5)

On March 15, 2004, Unibanco Asset Management – Banco de Investimento S.A. distributed dividends in the amount of R$18,120 to its shareholder Unibanco, giving its investment in Unibanco Serviços de Investimento Ltda.

(6)

On March 8, 2004, through the Private Instrument of Change in the articles of association of Unibanco Distribuidora de Títulos e Valores Mobiliários Ltda. the change was approved in the legal form of the limited liability commercial company to a limited liability corporation of private capital and also the change in the company name of Unibanco Distribuidora de Títulos e Valores Mobiliários Ltda. to Companhia Hipotecária Unibanco – Rodobens. Such changes are subject to the approval of the Brazilian Central Bank.

(7)

The Extraordinary shareholder’s meeting held on April 30, 2004 approved the merger of the total interest in Unipart – Unibanco Representação e Participações Ltda., at its book value. Through this transaction, Unipart and its subsidiaries became directly controlled by Unibanco.

(8)

In February 2004, Unibanco – União de Bancos Brasileiros S.A. acquired from its subsidiary Unibanco Representação e Participações Ltda., 199,990 common shares and 400,000 preferred shares of Redecard S.A. at its book value.

(9)

On April 30, 2004, Unibanco increased the capital of its subsidiary Bib Cash Management Ltda., by transferring 17.333.333 common shares of Orbitall Serviços e Processamento Ltda. at their book value of R$57,829 at March 31, 2004.

(10)

On March 1st, 2004, Unibanco acquired from the Dutch Group Ahold, through its subsidiaries Conabinu Participações Ltda. and Unipart Participações Internacionais Ltd., the total capital of Hipercard Administradora de Cartões de Crédito Ltda., for the amount of R$628 million resulting in a goodwill of R$296,331 to be amortized in accordance with the expected period of benefit.

(b) Goodwill on acquisition of companies

The goodwill relating to the acquisition of companies is being amortized up to ten years, according to the expected period of benefit, with the amortization for the period being recognized in “Other operating expenses”. The goodwill balance shown in the consolidated financial statements and the amount amortized were as follows:

  Balance to be amortized Amortization during the quarter
Bandeirantes 809,674  15,320 
Fininvest 335,825  6,538 
Hipercard 288,415  7,916 
Other 199,598  6,058 
Total 1,633,512 35,832

10. Resources from Securities Issued

Resources from securities issued are represented mainly by mortgage notes issued in Brazil and euronotes issued abroad.

(a) Mortgage notes are adjusted using the Referencial Rate (TR), plus average interest of 14.87% per annum, and are payable up to June 28, 2005.

(b) The euronotes in the amount of R$1,405,905 in Unibanco and R$1,681,469 in Unibanco Consolidated mature up to April 15, 2014 and are subject to an average interest rate of 3.33% per annum in Unibanco and 4.69% per annum in Unibanco Consolidated.

(c) The other issues totaled R$42,019 in Unibanco and in Unibanco Consolidated with maturities up to May 27, 2009 and an average interest rate of 9.80% per annum.

11. Borrowings and Onlendings

Foreign borrowings consist principally of short-term credit lines for refinancing of foreign exchange transactions, imports and exports.

Onlendings in Brazil – governmental agencies are payable up to 2025, with interest rates established by operational policies of BNDES (National Economic Development Bank).

Foreign onlendings, consisting of long-term credit lines for project and trade financing, are payable up to December 15, 2011, with an average interest rate of 4.53% per annum.

12. Fiscal, Labor and Civil Litigations

Unibanco and its subsidiaries are parties to various legal actions, principally tax litigation, civil litigation and labor claims. The provision for probable future losses is recorded considering the probability of loss in the lawsuits based on the opinion of external legal counsels. Provisions recorded and respective changes in the period were as follows:

  Unibanco Unibanco Consolidated
Balance at the beginning of the period 939,958  1,943,449 
Balance of acquired company/incorporated 16,450  90,843 
Provision charged 121,065  159,502 
Payments (55,137) (91,200)
Balance at the end of the period 1,022,156 2,102,594

(a) Tax litigation

Unibanco and its subsidiaries are involved in several tax suits, including those relating to the constitutionality of certain taxes, and the probable liability is fully provided, until the accrued liability is settled or reversed based on the legal counsel’s opinion that the probability of losses is remote. The provision for tax litigation was R$200,565 in Unibanco and R$799,313 in Unibanco Consolidated recorded in Long-term liabilities – Other Liabilities – Taxes and Social Security.

Some subsidiary companies are involved in tax suits related to the Social Contribution applicable to their income, as they do not have or did not have, for a period, any employees. They are based on legal actions and on the favorable opinion of legal counsels.

(b) Labor litigation

Labor unions and former employees have filed several lawsuits against Unibanco and its subsidiaries to seek compensation for labor rights. Unibanco cannot assure that it will win these lawsuits and, based on this, the contingency amount is recorded as provision, based on the average of payments made. The provision for labor litigation was R$533,156 in Unibanco and R$803,622 in Unibanco Consolidated.

Several dismissed employees of Banco Nacional have filed labor-related lawsuits against Banco Nacional and Unibanco after Unibanco’s acquisition of certain of Banco Nacional’s assets and liabilities. Banco Nacional is responsible for these lawsuits and is reimbursing Unibanco at the end of the lawsuits, for any amounts spent under such lawsuits. Additionally, in the cases, in which attachments have been made to assets which have since been transferred to Unibanco, the Bank has filed third-party motions against these attachments.

(c) Civil litigation

Unibanco and its subsidiaries were party to other actions and claims including certain claims together with other Brazilian financial institutions relating, mainly, to (i) past economic plans of the Brazilian government; (ii) the application of compound interest rates for periods less than one year in their operations; (iii) losses related to lease contracts involving foreign exchange variations; (iv) the constitutionality of the law establishing a special credit facility to financial institutions, known as “PROER”; and (v) personal and moral injury. Those actions and claims are recorded in accordance with the probability of loss in each type of claim. The provision related to civil litigation amounted to R$288,435 in Unibanco and R$499,659 in Unibanco Consolidated.

(d) Claims (Bandeirantes and Nacional)

Certain former shareholders of Banorte (a bank acquired by Bandeirantes before Unibanco became the controlling shareholder of Bandeirantes) have filed lawsuits against Bandeirantes and the Brazilian Central Bank, seeking to terminate the Brazilian Central Bank intervention in Banorte before its acquisition by Bandeirantes. In accordance with the Agreement between Unibanco and Caixa Geral de Depósitos for the acquisition of a controlling interest in Bandeirantes, Caixa Geral de Depósitos assumed full responsibility for such lawsuits. Therefore it is not necessary to record provisions for this purpose.

The former controllers of Banco Nacional S.A. filed suits against the Brazilian Central Bank and Unibanco in connection with the sale of assets and liabilities of Banco Nacional. Unibanco considers, based on the opinion of external legal counsel, these suits untenable, since the acquisition of assets and assumption of operational liabilities of Banco Nacional by Unibanco occurred in accordance with PROER (Program for the Strengthening of the National Financial System) a program implemented by law with the purpose of preserving the resources of depositors and maintaining the trust of Brazilians in the financial institutions of the National Financial System. Management considers that there is no need to record any provisions in this case.

13. Other Liabilities

(a) Subordinated debt

  Issue Maturity Remuneration
per annum 		Unibanco Unibanco Consolidated
Step-up subordinated
    callable notes (1) April 2002 April 2012 9.375% 625,713  618,845 
Step-up subordinated
    callable notes (2) December 2003 December 2013 7.375% 620,403  625,713 
Step-up subordinated
    callable notes (3) April 2001 April 2006 2.45% -  93,733 
Subordinated time
    deposits (4) December 2002 December 2012 102% of CDI (5) 339,659  339,659 
Total       1,585,775  1,677,950 
___________________
(1)

The debt can be integrally redeemed in April 2007 or in each subsequent interest payment. The interest rate from the fifth year will be 11.7995% per annum.
(2)

The debt can be integrally redeemed in December 2008 or in each subsequent interest payment. The interest rate from the fifth year will be 9.375% per annum.
(3)

The debt can not be redeemed prior to its final maturity. The interest rate from the fifth year will be 2.45% per annum.
(4)

Subordinated time deposits can be redeemed from December 2007.
(5)

The Brazilian interbank interest rate.

(b) Sundry

  Unibanco Unibanco Consolidated
Technical provisions for insurance, annuity products and retirement plans -  5,062,523 
Sale of rights of receipt of future flow of payment orders abroad (1) 3,191,465  3,191,465 
Payable to merchants - credit card -  2,352,349 
Provision for labor and civil litigation 821,591  1,303,281 
Provisions for payroll and administrative expenses 163,423  426,279 
Payable related to insurance companies -  385,454 
Payable for official agreement 243,036  243,036 
Accounts payable for purchase of assets 45,245  45,956 
Debt assumption contracts 111,570  - 
Amounts payable to associated company 6,208  - 
Other 253,068  239,427 
Total 4,835,606  13,249,770 
Short-term 1,121,460  5,243,379 
Long-term 3,714,146  8,006,391 
____________________
(1)

Amount related to the sale of rights of receipt of future flow of payment orders receivable from overseas correspondent banks, in the amounts of US$817,000 thousand and of Y$25,000,000 thousand, bearing three-month Libor plus rates between 0.50% and 4.25% per annum, or fixed rate of 6.15% per annum, payable quarterly and with beginning maturity in April 2009 and final maturity in October 2013.

14. Employee Benefits

(a) Free benefits generation program

Up to June 30, 2004, Unibanco’s employees could opt to a “Free Benefits Generation Program” (PGBL), a system whereby the participant accumulates financial resources during his/her career, through contributions paid by the employee and the Company where he/she works. These contributions are invested in an Exclusive Financial Investment Fund (FIFE). The program is based on defined contributions and is managed by Unibanco AIG Previdência S.A. and Unibanco Asset Management – Banco de Investimento S.A. responsible for the financial management of the FIFE funds.

Additionally, Unibanco and a portion of its employees contributed to a defined contribution pension plan administered by Trevo – Instituto Bandeirantes de Seguridade Social, for the primary purpose of supplementing the retirement benefits provided by the government retirement plans, substantially through a defined contribution plan.

As from July 1st, 2004, the employee's "Free Benefits Generation Program " was redesigned in order to offer to the employees of Unibanco more coverage and flexible benefits. The new program is a closed private entity through Trevo IBSS and is called Intelligent Future and introduces many improvements, such as the opportunity to contribute with higher percentages, which vary between ages, than under the previous plan; the possibility to retire as from 50 years old; as well four different choices to take advantage of the benefits in the case the employee opts for early retirement.

During the quarter ended June 30, 2004, the company sponsor contributions totaled R$1,399 in Unibanco and R$3,369 in Unibanco Consolidated.

(b) Stock option program

Unibanco has a stock option program intended to foster the long-term commitment of the Company’s executives to the highest performance standards, as well as attract, retain and motivate new talents. Pursuant to this program, Unibanco’s executives can be granted stock or unit options that can be exercised between 3 to 6 years. The option rights are limited to 1% of the authorized capital per year and the amount granted is limited to 10% of the authorized capital, as a whole.

On June 30, 2004, the stock options granted and not exercised was 1,094,812,000 Units. The stock options have an exercise period between January 21, 2005 and April 13, 2010 and an average price of R$95.42 per 1,000 stock options.

15. Stockholders’ Equity

(a) Capital

Subscribed and paid-in capital is comprised of shares without par value, as follows:

  Outstanding shares Treasury stocks Total 
Common 75,565,816,851  -  75,565,816,851 
Preferred 64,045,605,223  1,274,411,244  65,320,016,467 
Total 139,611,422,074 1,274,411,244 140,885,833,318

On April 30, 2004, the Extraordinary Shareholders Meeting approved the capital increase to R$5,000,000 through transfer from retained earnings, approved by the Brazilian Central Bank on June 16, 2004.

Preferred shares carry no voting rights but have priority over common stocks in the reimbursement of capital in the case of liquidation, up to the amount of capital represented by such preferred shares, and are entitled to receive a 10% greater dividend per share than that distributed to common stockholders.

Each Share Deposit Certificate (Unit) is represented by a preferred share issued by Unibanco and by a Class “B” preferred share issued by Unibanco Holdings S.A. (Holdings) and is traded in the Brazilian market.

Each Global Depositary Share (GDS) is represented by 500 Units, and is traded in the international market.

Unibanco and Unibanco Holdings have begun the initial procedures to be effective the reverse stock split of their common and preferred shares, including Units. Thus, as from August 30, 2004, the reverse stock split will be done in the ratio of 100 shares to 1 share. In the same date, the Global Depositary Receipts (“GDRs”) traded in the international market will represent 5 Units instead of the current 500 Units, without change in the number of GDRs issued or in its per share value.

The reverse stock split aims to provide more efficiency in controlling and in the relationship with shareholders, and operational cost reduction, as well as being one more step in the quest for increasing share liquidity.

(b) Dividends and interest on capital

The mandatory dividend represents at least 35% of the Bank’s annual net income, adjusted for transfers to the legal reserve.

On July 23, 2004, the Board of Directors approved the payment of interest on capital to the shareholders, in anticipation of the mandatory dividends for the year of 2004, in the amount of R$240,009, being R$1.6562 (R$1.4078 net of applicable tax) per 1,000 common shares and R$1.8218 (R$1.5485 net of applicable tax) per 1,000 preferred shares outstanding in that time. The interest on capital was calculated in accordance of article 9 of Law no. 9249/95, with tax benefit of R$81,603. The payment of the interest on capital was made from August 2, 2004 and represents, net of applicable tax, 37.0% of net income for the period after recognition of legal reserve.

The Units had interest on capital of R$3.2701 (R$2.7796 net of applicable tax) being R$1.4483 (R$1.2311 net of applicable tax) from Unibanco Holdings and R$1.8218 (R$1.5485 net of applicable tax) from Unibanco. The GDS had interest on capital of R$1.63505 (R$1.3898 net of applicable tax).

(c) Capital reserves

These reserves are substantially represented by share premium reserve.

(d) Treasury stock and Buy-back program

The Board of Directors of Unibanco and Unibanco Holdings in the meeting held on February 12, 2003 authorized for a period of three months the acquisition at market prices of up to 256,178,254 common shares, 3,033,185,661 preferred shares Unibanco and 3,033,185,661 Unibanco Holdings Class B preferred shares, to be maintained in treasury for subsequent sale or cancellation without capital reduction.

228,000,000 preferred shares issued by Unibanco, 167,225,000 Units and 372,900 GDSs issued by Unibanco and Unibanco Holding were repurchased. Through the “Share Exchange Agreement”, Unibanco assigned and transferred to Unibanco Holdings 353,675,000 Class B preferred shares issued by Unibanco Holdings acquired in the form of Units and GDS and Unibanco Holdings transferred to Unibanco 353,675,000 preferred shares issued by Unibanco. Therefore, Unibanco recorded 935,350,000 preferred shares as treasury stock at an average price of R$46.16 per thousand shares. The minimum and maximum acquisition prices were R$33.76 and R$54.15, respectively.

As mentioned in Note 9, Unibanco and Unibanco Holdings exchanged 1,000,000,000 Units for the total capital of Banco BNL do Brasil S.A. from Banca Nazionale del Lavoro SpA, which became the holder of 1.43% of Unibanco’s capital. The exchange was approved by the Brazilian Securities Commission (CVM) on June 23, 2004 and is subject to the approval of the Brazilian Central Bank.

(e) Statutory reserves

The balance is summarized as follows:

    
i) Foreign exchange risk reserve – calculated based on 2% of the net income
for the year after the legal deductions up to a limit of 20% of capital stock 86,239 
 
ii) Operating margin reserve – calculated based on 90% of the net income for
the year after the legal deductions up to a limit of 80% of capital stock 2,177,455 
 
Total 2,263,694 

(f) Retained earnings reserve

This reserve represents the appropriation based on the capital budget determined by the management for the purposes of investment plans or acquisitions in the financial sector.

(g) Changes in stockholders’ equity

  Unibanco Unibanco Consolidated
Net income 304,616  304,616 
Adjustments to net income (266,441) 129,594 
Depreciation and amortization 53,384  98,474 
Amortization of goodwill on acquisition of subsidiary companies 28,811  35,832 
Exchange gain on foreign investments (68,762) - 
Provision for losses on investments -  - 
Equity in results of subsidiary and associated companies (268,971) 1,082 
Reversal of provision of foreclosed assets (10,903) (5,794)
Adjusted net income 38,175  434,210 

(h) Conversion Program

As from November 2003, a Conversion Program will be maintained during two years allowing holders of Unibanco preferred shares and Unibanco Holdings preferred class "B" shares as of the date of the Exchange Offer Announcement (September 15th, 2003) to convert their pairs of preferred shares into Units. Up to June 30, 2004, 43 million preferred shares were converted into Units.

The average daily financial volume of Units negotiated in the Brazilian market increased by 103.97% in the first six-month of 2004 compared to the same period of 2003, and the corresponding Unit value increase by 31.80%.

16. Other Operating Income and Expenses

(a) Other operating income

  Unibanco Unibanco Consolidated
Insurance, annuity products and retirement plans premiums -  901,635 
Financial results from insurance, pension plans and annuity products -  205,675 
Foreign branches’ and subsidiary companies’ exchange gains 117,471  97,379 
Dividends/retained earnings received from other investments,
    principally consortium 5,466  42,091 
Monetary correction of income receivable 14,763  21,503 
Interest on judicial deposits 4,215  10,574 
Monetary correction of prepaid taxes 1,378  1,378 
Reversal of provision for fiscal contingencies and others -  (4,626)
Other 9,298  24,923 
Total 152,591  1,300,532 

(b) Other operating expenses

  Unibanco Unibanco Consolidated
Changes in technical provision for insurance, annuity products and retirement plans -  309,790 
Insurance claims -  249,926 
Interest and monetary correction on technical provision for insurance, pension plans
    and annuity products -  160,040 
Private retirement plans benefits expenses -  105,283 
Provision for labor and civil litigations 80,662  104,471 
Credit card selling expenses -  86,931 
Insurance and private retirement plans selling and other expenses -  69,438 
Insurance expenses -  37,637 
Amortization of goodwill on subsidiaries acquired 28,811  35,832 
Expenses related to the sale of rights of receipt of future flow of payment order
    (Note 13 (b)) 31,131  31,131 
Expense related to checks and billing, net 21,546  27,842 
Exchange rate variation on other liabilities (2,136) (2,136)
Other 53,644  86,195 
Total 213,658  1,302,380 

17. Income Tax and Social Contribution

Deferred income tax and social contribution, calculated on tax losses and negative basis of social contribution carry-forward are recorded in “Other credits – sundry” and provisions not currently deductible are recorded in “Other credits – sundry” or in “Other liabilities – taxes and social security”, according to their nature.

Deferred income tax losses and negative basis of social contribution carry-forward are realized in accordance with the existing taxable income, and income tax on temporary differences are realized when using or reversing the provision.

(a) Deferred tax assets

             Unibanco 
 
  March 31, 2004  Constitution Realization Balance of Acquired Companies June 30, 2004
Allowance for lending losses 350,584  129,406  130,204  -  349,786 
Other provisions not currently deductible 368,102  38,689  26,565  8,809  389,035 
Tax loss and negative basis of social contribution carry-forwards 255,060  37,175  -  -  292,235 
Social contribution carry-forwards (Provisional Measure 2158-35) 283,720  846  -  -  284,566 
Subtotal 1,257,466  206,116  156,769  8,809  1,315,622 
Adjustment at fair value of marketable securities available for sale and derivative financial instruments 52,175  -  5,380  -  46,796 
Net deferred tax assets 1,309,641  206,116  162,149  8,809  1,362,417 
Total assets 1,309,641          1,362,417 


           Unibanco Consolidated 
 
  March 31, 2004  Constitution Realization Balance of Acquired Companies June 30, 2004
Allowance for lending losses 492,644  151,533  143,206  41,747  542,718 
Other provisions not currently deductible 695,545  73,479  53,622  185,388  900,790 
Tax loss and negative basis of social contribution carry-forwards 701,993  57,896  15,849  71,812  815,852 
Social contribution carry-forwards (Provisional Measure 2158-35) 491,547  -  2,800  -  488,747 
Capital reduction on subsidiary company (54) 54  -  -  - 
Subtotal 2,381,675  282,962  215,477  298,947  2,748,107 
Adjustment at fair value of marketable securities available for sale and derivative financial instruments 65,880  1,278  14,023  -  53,135 
Deferred tax obligations (24,962) (8,068) (1,958) -  (31,072)
Net deferred tax assets 2,422,593  276,172  227,542  2,298,947  2,770,170 
Total assets 2,447,555           2,801,242 
Total liabilities 24,962           31,072 

Deferred tax assets recorded are determined at the tax rates in effect at each balance sheet date.

The expected realization of deferred taxes as of June 30, 2004 was as follows:

  Unibanco Unibanco Consolidated
 
Year Social contribution
(MP 2.158-35) 		Other Total Social contribution
(MP 2.158-35) 		Other Total
2004 -  94,507  94,507  10,053  321,430  331,483 
2005 10,721  440,167  450,888  27,172  727,031  754,203 
2006 18,166  383,233  401,399  38,523  601,850  640,373 
2007 27,808  108,350  136,158  51,115  259,977  311,092 
2008 42,044  4,799  46,843  67,853  121,922  189,775 
2009 thereafter 185,827  -  185,827  294,031  227,150  521,181 
Total 284,566  1,031,056  1,315,622  488,747  2,259,360  2,748,107 

The present value of deferred taxes, calculated using the average rate of funding, net of tax effects, totaled R$1,135,029 in Unibanco and R$2,102,924 in Unibanco Consolidated.

(b) Income tax and social contribution income (expenses)

  Unibanco Unibanco
Consolidated
Income before income tax and social contribution, net of profit sharing 505,325  751,993 
Income tax and social contribution expenses at a rate of 25% and 9%, respectively (171,810) (255,678)
Adjustments to derive effective tax rate:
    Equity in the results of subsidiary and associated companies and exchange rate
    variation on subsidiaries abroad		 201,819  37,445 
    Interest on own capital paid or (received), net 69,520  91,326 
    Deferred tax credits of prior periods -  15,234 
    Permanent differences (net) (24,093) 14,289 
Income tax and social contribution for the quarter 75,436  (97,384)

18. Commitments and Guarantees

  Unibanco  Unibanco
Consolidated
Co-obligation and risks for guarantees provided 3,494,876  3,269,449 
Assets under management (mainly mutual investment funds) 26,787,727  30,502,856 
Lease commitments 8,719  8,719 

19. Related-Party Transactions (Unibanco)

 
Assets  
Cash and due from banks 133 
Interbank investments 2,592,273 
Marketable securities and derivative financial instruments 842,620 
Interbank accounts 891 
Lending operations 235,921 
Other credits
    Income receivable
        Dividends and interest on capital 200,817 
        Negotiation and intermediation of securities 206,054 
        Sundry 9,903 
 
Liabilities
Deposits 1,542,171 
Securities sold under repurchase agreements 449,274 
Resources from securities issued
. Securities abroad 52,308 
Interbank accounts 16,306 
Borrowings 162,366 
Derivative financial instruments 85,819 
Other liabilities
    Social and statutory 217,512 
    Negotiation and intermediation of securities 197 
    Subordinated debt 1,559 
    Sundry 115,934 
 
Revenues
Lending operations 1,665 
Marketable securities 109,217 
Derivative financial instruments (51,478)
Services rendered 43,347 
Other operating income 2,121 
 
Expenses
Deposits and securities sold 42,397 
Borrowings and onlendings 1,072 
Other administrative expenses 10,146 
Other operating expenses 728 

The amounts shown above reflect transactions between Unibanco and its subsidiary companies, and have been eliminated on consolidation. Transactions with unconsolidated related parties are limited to normal banking transactions and are not material in the operational context of Unibanco.

Related-party transactions undertaken made at average market rates in effect at the respective transaction dates, considering the absence of risk.

Services rendered relate basically to services offered by Unibanco to the group companies according to the terms of contractual agreements, through utilization of physical assets and personnel related to credit card, leasing, annuity products plans, insurance operations and brokerage.

Other administrative expenses relate mainly to the payment of rents based on the fair value of the buildings according to the lease contracts.

20. Financial Instruments

(a) Purposes and use policies

Unibanco uses derivative financial instruments to manage its own overall exposures or to assist its clients, in market risks, foreign exchange rates and interest rate (hedge). In addition, Unibanco enters into derivative contracts for trading purposes to take advantage of market opportunities in order to aggregate value in its results.

Unibanco manages financial derivative risks as part of its asset and liability management process and through credit policies and procedures. The counterparty credit risks are minimized by entering into transactions with only a select number of high-quality institutions.

A large part of the derivatives are negotiated on the Brazilian Futures and Commodities Exchange (“BM&F”). Exchange-traded instruments conform to standard terms and are subject to policies set by the BM&F, including counterpart approval, daily margin requirements and security deposit requirements. For the remaining derivative financial instruments, which are negotiated in a Clearing House for Custody and Financial Settlement of Securities or in an over-the-counter transaction, the counterparty credit risks are analyzed.

Interest rate and currency term and futures contracts represent future commitments to purchase or sell financial instruments at specific terms and at specified dates. The notional amounts represent the face value of the corresponding instrument at the date of the operations’ liquidation. The credit risks associated with the future and forward contracts are minimized due to daily cash settlements and margin account deposits. Future and forward contracts are subject to the risk of fluctuation in interest rates or the value of the underlying instruments.

Swap contracts represent future commitments to exchange currencies or index for a contractual period and terms. The notional amount represents the basis on which the cash flows are determined. The risks associated with swaps relate to the potential inability of the counterparts to meet contractual conditions and the risk associated with changes in market conditions due to fluctuation in interest rates and the exchange rate of currencies.

Options are contracts which: (i) transfer, modify, or reduce interest rate risk, or (ii) allow the Bank to purchase or sell financial instruments in exchange for the payment or receipt of a premium at inception of the contract. As a purchaser of options, Unibanco pays a premium and, as a writer of options, receives a premium in exchange for bearing the risk of movements in future interest rates on market prices for the underlying financial instruments. The credit and market risks are limited to the extent of premiums paid on purchased options and the risk associated with the changes in market conditions could influence written options.

(b) Hedge policies

Derivative financial instruments can be used as part of asset and liability risk management and can be used on a global basis to hedge Unibanco’s net position undertaken in certain markets or related to specific assets and liabilities attributed to a particular risk.

The derivative financial instruments that are designated and qualify as hedging instruments of specific assets and liabilities have been highly correlated with respect to changes in the hedged items, allowing an assessment of the high effectiveness of the hedge during the period that the hedge is designated.

The derivative financial instruments designed to hedge may: (i) secure an expected future cash flow attributed to a particular asset or liability (cash flow hedge) or (ii) reduce the exposure to changes in the fair value of an asset or liability (fair value hedge).

(c) Strategy and management risk

Unibanco continuously strives to improve its risk management practices, which are integrated into the various levels of the organization. A separate division is responsible for identifying, measuring and managing market, credit and operational risk on an institutional-wide basis. In addition, each business division has dedicated risk management staff.

Credit risk

The credit policy is designed to manage risk while maintaining flexibility required by market conditions and the needs of customers. The credit limits exposure goals are to avoid the concentration in clients and particular sectors that Unibanco believes have high risk factors. The credit policy has various approval levels for both retail and wholesale customers. Depending on the size and type of exposure and the customers prior credit history, approval levels range from the branch general manager or account manager to the retail or wholesale credit committees, which are composed of members of senior management. The centralized credit decision-making process is based on strict credit limits that are set by the wholesale and retail committees. The pre-approved credit limit to customers for different types of credit lines is based on their creditworthiness and size.

Corporate Credit: The decision on each credit is based on the following factors: financial history, cash flows, quality of management, relationship history market conditions and other factors relating to credit risk. An internal credit rating system is employed, which ranks companies in categories based on quantitative criteria and qualitative aspects. The lines of credit are reviewed every 60 to 180 days, depending on the borrower’s rating and the external credit environment.

Retail Credit: Credit management in the retail banking business is characterized by the processing of a large volume of credit requests, which requires specialized systems and processes. A wide range of statistical tools to evaluate retail credit requests is utilized. These tools, which include credit behavior scoring, are backed by dedicated systems. The automated credit system is a special software program that services loans at all stages from their inception. The collections scoring is used for determination of which collection method or combination of collection methods is the most efficient. Stricter standards for originating and managing this loan portfolio are imposed, including restrictions on increases in credit limits and restrictions on renewals of overdraft facilities.

Market Risk

The policy regarding market risk exposure is conservative. Market risk exposure of the portfolios is independently supervised and controlled. Market risk management is based on limits established by the financial and risk committees. The market risk exposure is limited by managing the currency, maturity and interest rate mismatches. Securities, derivative financial instruments, loans and funding are analyzed on a consolidated basis. Derivative financial instruments play an important role in managing asset and liability mismatches. Exposure limits for the treasury unit are established considering market volatility, scenario forecasts, opportunity for profit and the funding needs of commercial bank. Trading and positioning activities are conducted within clear limits by the risk committee and ratified by the financial committee. These limits and policies are reviewed monthly or when a new threat or opportunity arises.

The value at risk methodology is used to evaluate the market risk. Stress tests are also applied using macroeconomic scenarios simulated by our risk management and macroeconomic team, in order to minimize the risk of loss in the portfolio and to analyze the effects of changes in the financial market of portfolio.

Unibanco manages its risk exposure on a centralized basis by having all risks and mismatches passed to its treasury unit. All treasury activities, including those for foreign branches, are closely monitored from the offices in São Paulo. Trading limits and strategies are defined by head office, and all trading positions are consolidated in centralized databases.

Liquidity Risk

The liquidity risk is related to the management of the gap on assets and liabilities financial cash flow which results in the financial capacity of the institution by taking additional funds and honor positions.

The liquidity contingency and planning policies are defined by the financial committees and are reported to the decision markers and are controlled by independent areas on a daily bases. The liquidity is evaluated in a similar methodology as the market risk, considering the different impacts of the exchange rates and macroeconomic scenarios and stress tests to simulate the changes in the availability and costs of funds in the financial market. Maturity, exchange rates, financial instruments and different markets are daily analyzed in order to assure the compliance of the established limits. Those limits and policies are periodically reviewed and the strategies are defined in order to assure a conservative monitor of the liquidity risk.

Operating risks

Operating risks are related to an institution’s unexpected losses, due to its systems, practices and control measures being incapable of withstanding human error, damaged support infrastructure, faulty modeling, services or products, and to business environment changes or other adverse market conditions.

To meet the requirements of international market practices and the internal regulations of the Brazilian financial market, Unibanco created an internal control structure. This features a listing of risks and controls to standardize language and facilities risk and control understanding by all staff members. It also includes an internal controls system, which is accessible from all group areas. Periodic evaluations are held where area managers and their staff identify their main activities and inherent risks, and assess the effectiveness of current controls. This process allows controls to be improved, resulting in reduced risk exposure.

The collected data provide support for the monitoring and performance evaluation of the business units, identifying those areas with greater risk potential. This structure is the basis for the identification of indicators and the implementation of a database to quantify operating risk exposure.

As banking operations diversify and the volume of transactions involving computers and telecommunications networks increases, the importance of information technology and the potential impact of systems failures have grown. Accordingly, the bank has devoted substantial resources to ensure the reliability and stability of its computer and related systems. The principal computer facility is located in São Paulo and a backup system is maintained. This backup system is designed to operate automatically if the main system malfunctions. Additionally, backup procedures and files are monitored periodically.

(d) Financial instruments recorded in the financial statements compared to fair values are as follows:

  Unibanco Unibanco Consolidated
 
  Book value  Fair value  Book value  Fair value 
Assets
Interbank deposits 5,833,785  5,834,572  3,550,030  3,550,818 
Marketable securities 11,486,873  11,531,043  18,588,379  18,691,660 
Lending operations 18,718,574  18,785,079  25,096,496  25,153,348 
Derivatives, net 87,204  87,204  93,193  93,193 
 
Liabilities
Interbank deposits 579,650  581,074  193,783  194,078 
Time deposits 18,802,989  18,808,982  20,210,071  20,216,313 
Mortgage notes 617,976  622,522  633,538  638,083 
Resources from securities issued abroad 1,447,925  1,452,654  1,723,488  1,733,899 
Subordinated debt 1,585,775  1,556,306  1,677,950  1,648,770 
Other liabilities (Note 13 (b)) 3,191,465  2,753,178  3,191,465  2,753,178 
Treasury stocks 51,423  76,987  51,423  76,987 

The fair value of marketable securities was based on an internal valuation model, based on the average rate for the last business day of the quarter, as informed by Stock Exchanges, trade associations and external entities.

The fair value of interbank deposits, lending operations, interbank deposits payable, time deposits and mortgage notes, was based on the average rate practiced by Unibanco on the last business day of the quarter, for similar operations.

The fair value of resources from securities issued abroad and subordinated debt was based on the average quoted prices in effect on the correspondent markets on the last business day of the quarter for similar operations.

The fair value of derivatives was based on an internal valuation model, based on the average rate for the last business day of the quarter for operations with similar maturities and indices, as informed by Futures and Commodities Exchange - BM&F and trade associations.

The fair value of other liabilities related to sale of rights of receipt of future flow of payment orders abroad was computed considering the value that could be obtained in the corresponding market.

The fair value of treasury stocks was based on Units price at June 30, 2004 in the São Paulo Stock Exchange.

(e) The current notional and fair values of derivative financial instruments recorded in memorandum accounts except for the option contracts, for which the notional exposure represents the premium paid/received and the exposure at fair value represents the amounts recorded in assets and liabilities accounts, are as follows:

  Unibanco Unibanco Consolidated
 
  Notional
exposure (1) 		Exposure at
fair value
(1) and (2) 		Notional
exposure (1) 		Exposure at
fair value
(1) and (2)
Futures contracts 888,630  888,630  2,162,253  2,162,253 
    Currencies (557,340) (557,340) (531,031) (531,031)
    Interbank interest rate 1,066,355  1,066,355  2,479,979  2,479,979 
    Exchange coupon 374,448  374,448  210,076  210,076 
    Index 5,167  5,167  3,229  3,229 
 
Forward contracts 26,846  44,954  26,023  44,131 
    Currencies (57,127) (39,035) 3,470  21,561 
    Fixed interest rate 83,973  83,989  22,553  22,570 
 
Swap contracts 86,237  69,946  94,231  76,911 
    Currencies (3,624,240) (3,614,634) (2,897,289) (2,887,642)
    Interbank interest rate 1,326,199  1,324,653  1,578,547  1,575,990 
    Fixed interest rate 837,128  840,010  (134,109) (131,221)
    Other 1,547,150  1,519,917  1,547,082  1,519,784 
 
Swap contracts with daily reset 796,937  796,937  919,101  919,101 
    Currencies 796,937  796,937  919,101  919,101 
 
Option contracts
Purchased option -  -  39  39 
Sale -  -  39  39 
    United States of America treasury bills -  -  39  39 
Sale option -  -  78  192 
Purchase -  -  78  192 
    United States of America treasury bills -  -  78  192 
____________________
(1)

Include the net balance of short position (long position).
(2)

For option contracts the exposure at fair value refers to the respective premium.

The notional exposure of the option contracts recorded in memorandum accounts, amounted to R$30,733 due to purchase commitments and R$30,985 due to sale commitments.

On June 30, 2004, there were future transactions of R$1,929,415 in Unibanco and R$3,225,210 in Unibanco Consolidated and swap contracts in the amount of R$1,543,484 in Unibanco and R$1,975,789 in Unibanco Consolidated and forward transactions of R$842,572 in Unibanco and Unibanco Consolidated, accounted for at fair value and recognized as cash flow hedges with exposure to the US dollar and yen fluctuations and indexed to interbank interest rate (CDI) and IGPM (Market General Price Index), net of applicable taxes and minority interest, during the period, in the amount of R$75,976 in Unibanco and R$90,984 in Unibanco Consolidated, which were recorded in “Unrealized gains or losses – marketable securities and derivatives”. The hedges as of June 30, 2004, were in accordance with the standards established by the Brazilian Central Bank.

During the first quarter of 2004, certain swap contracts prior classified as fair value hedge to face exposures of securities available for sale in the amount of R$184,618 were no longer classified as hedge due to the low effectiveness achieved of the hedges which was attributed to the change in the fair value of the hedge items and the derivative financial instruments designed to hedge being outwith the percentages of limits allowed by the Brazilian Central Bank. The adjustment on securities available for sale due to the low effectiveness achieved of the hedges was recorded as a charge to income, during the period, in the amount of R$8,829.

On June 30, 2004, there were swap contracts in the amount of R$40,360 in Unibanco Consolidated accounted for at fair value and recognized as fair value hedge to face exposures to the US dollar against market risk exposures. The adjustment to fair value of the corresponding hedged item resulted in an adjustment, net of applicable taxes, of R$1,115, recorded as a debit in the income of the period and as a charge under Marketable Securities. The hedges as of June 30, 2004, were in accordance with the standards established by Brazilian Central Bank.

On June 30, 2004, there were swap contracts in the amount of R$452,027 in Unibanco and in Unibanco Consolidated accounted for hedges to face exposures to the US dollar of securities held to maturity in accordance with Circular 3129 of the Brazilian Central Bank and as a consequence not recorded at fair value. The hedges as of June 30, 2004, were in accordance with the standards established by the Brazilian Central Bank.

The transactions shown above do not represent Unibanco’s total exposure to market, currency and interest rate risks since they only consider the values of derivative financial instruments.

The swap transactions associated with funding and/or asset operations are recorded at current notional value adjusted in accordance with the index variation occurred (“carrying amount”), and are not adjusted to the fair value.

(f) Fair value distributed by trade location

  Unibanco Unibanco Consolidated
 
Exposure at fair value BM&F  CETIP/ Over the counter Total BM&F  CETIP/ Over the counter Total
Future contracts 888,630  -  888,630  2,162,253  -  2,162,253 
Forward contracts -  44,954  44,954  -  44,131  44,131 
Swap contracts (228,520) 298,466  69,946  (230,467) 307,378  76,911 
Swap contracts with daily reset 796,937  -  796,937  919,101  -  919,101 
Option contracts
    Purchased position -  -  -  -  39  39 
    Sale position -  -  -  -  192  192 

The amounts pledged to guarantee BM&F transactions were R$382,343 in Unibanco and R$461,415 in Unibanco Consolidated and are represented by federal government securities.

(g) The maturities and types of derivative financial instruments recorded in balance sheet accounts are as follows:

  Unibanco Unibanco Consolidated
Assets    
Less than 3 months 45,860  40,850 
Between 3 months and 1 year 280,657  260,790 
Between 1 and 3 years 49,381  49,480 
More than 3 years 6,070  6,070 
Total 381,968  357,190 
 
Liabilities
Less than 3 months 33,823  17,695 
Between 3 months and 1 year 183,925  170,727 
Between 1 and 3 years 73,032  71,591 
More than 3 years 3,984  3,984 
Total 294,764  263,997 


  Unibanco Unibanco Consolidated
Assets    
Swap contracts 362,374  338,380 
Forward contracts 19,594  18,771 
Option contracts – premiums received -  39 
Total 381,968  357,190 
 
Liabilities
Swap contracts 292,428  261,469 
Forward contracts 2,336  2,336 
Option contracts – premiums paid -  192 
Total 294,764  263,997 

(h) The maturities of derivative financial instruments recorded in memorandum accounts, except the option contracts whose balance represents the amounts recorded in asset and liability accounts, are as follows:

  Unibanco
 
Exposure at fair value Less than
3 months 		Between
3 months
and 1 year 		Between
1 and 3
years 		More than 3
years 		Total
Future contracts (354,951) 837,868  385,836  19,877  888,630 
Forward contracts (216,456) (470,477) 62,140  669,747  44,954 
Swap contracts 7,500  83,945  (23,585) 2,086  69,946 
Swap contracts with daily reset 590,083  206,854  -  -  796,937 


  Unibanco Consolidated
 
Exposure at fair value Less than
3 months 		Between
3 months
and 1 year 		Between
1 and 3
years 		More than 3
years 		Total
Future contracts (426,680) 1,792,493  776,563  19,877  2,162,253 
Forward contracts (217,279) (470,477) 62,140  669,747  44,131 
Swap contracts 19,594  77,276  (22,045) 2,086  76,911 
Swap contracts with daily reset 590,083  284,032  44,986  -  919,101 
Option contracts
    Purchased position 39  -  -  -  39 
    Sale position 192  -  -  -  192 

21. Other Information

(a) Assets leased to third parties, in the amount of R$882,242, net of depreciation, are committed for sale to the lessees, at their option, at the end of the respective contracts for R$475,831 and the residual value received in advance from these lessees amounts to R$381,801, classified as a reduction of leasing operations. Assets leased from third parties are not material.

(b) Unibanco and its subsidiaries insure their properties and equipment to the extent considered necessary to cover possible losses, taking into account the nature of the activity. At June 30, 2004, the insurance coverage on properties and other assets in use totaled R$507,538 in Unibanco and R$1,006,154 in Unibanco Consolidated.



* * *

7015 - INVESTMENTS IN SUBSIDIARY COMPANIES

Item Name CNPJ Principal Activity Type of Company Number of Shares or quotas %Capital Investment in Controlled Company
01  Unibanco AIG Seguros S.A. 33,166,158/0001-95 Insurance Company Financial Instituituion 533,807,125  49.707
02  Unipart Participações Internacionais Ltd. 521,028  Holding Non-Financial Instituituion 1,302,031  100.000
03  Unicard Banco Múltiplo S.A. 61,071,387/0001-61 Bank Financial Instituituion 219,461,907,711  100.000
04  Unibanco Companhia de Capitalização 61,054,128/0001-22 Annuity Products Non-Financial Instituituion 4,194,129  99.992
05  Banco Fininvest S.A. 33,098,518/0001-69 Bank Financial Instituituion 4,965  99.920
06  Banco Dibens S.A. 61,199,881/0001-06 Bank Financial Instituituion 4,518,078,478  51.001
07  Unibanco Leasing S.A. Arrendamento Mercantil 44,071,785/0001-69 Leasing Financial Instituituion 264,919  99.999
08  Unibanco Corretora de Valores Mobiliários S.A. 33,764,366/0001-96 Security Broker Financial Instituituion 80,934,844  99.999
09  Interbanco S.A. 670,849  Bank Financial Instituituion 18,999,793  99.996
10  Banco1.net S.A. 03,012,230/0001-69 Bank Financial Instituituion 34,077,757  65.934
11  Unibanco Asset Management Banco de Investimento S.A. 59,608,174/0001-84 Asset Management Financial Instituituion 2,936,805 99.999
12  Credicard S.A. Administradora de Cartões de Crédito 34,098,442/0001-34 Credit Card Non-Financial Instituituion 12,937,771 33.333
13  Cibrasec - Cia. Brasileira de Securitização 02,105,040/0001-23 Securitization Non-Financial Instituituion 7,500  12.499
14  Estrel Participações S.A. 04,661,624/0001-00 Service Render Non-Financial Instituituion 133,638,702  100.000
15  Unibanco Serviços de Investimento Ltda. 01,538,145/0001-03 Service Render Non-Financial Instituituion 100,000  99.999
16  Companhia Hipotecária Unibanco - Rodobens 02,868,100/0001-60 Mortgage Company Financial Instituituion 3,250,000  50.000
17  Redecard S.A. 01,425,787/0001-04 Credit Card Non-Financial Instituituion 599,990  31.943
18  Unibanco Empreendimentos e Participações Ltda. 60,938,552/0001-77 Service Render Non-Financial Instituituion 201,111,880  47.797
19  Unibanco Empreendimentos Ltda. 35,765,817/0001-35 Service Render Non-Financial Instituituion 150,488,716  16.126
20  Banco BNL do Brasil S.A. 00,086,413/0001-30 Bank Financial Instituituion 5,538,478,783  99.965
21  BWU Representação e Participações Ltda. 00,018,517/0001-08 Service Render Non-Financial Instituituion 49,626,272  60.000
22  Serasa S.A. 62,173,620/0001-80 Service Render Non-Financial Instituituion 712,545  19.045
23  Tecnologia Bancária S.A. 51,427,102/0001-29 Service Render Non-Financial Instituituion 762,277,905  19.051
24  Interchange Serviços S.A. 66,649,955/0001-82 Service Render Non-Financial Instituituion 74,999,999,998  25.000

7016 - MARKETABLE SECURITIES

Code Description No stated maturity Up to 3 months 3 months to 1 year 1-3 years 3-5 years 5-15 years More than 15 years Fair Value Book Value
00.0.0.01.01.00 National Treasury Securities -  3,666,549.32 1,570,881.20 593,720.70 407,630.02 1,112,629.66 211,642.93 7,559,358.67 7,563,053.83
00.0.0.01.02.00 Brazilian Central Bank Securities -  26,897.82 31,635.28 361,409.83 -  -  -  461,588.40 419,942.93
00.0.0.01.05.00 CDB -  -  -  8,977.26 5,372.87 97,408.93 -  111,759.06 111,759.06
00.0.0.01.07.00 Mortgage Notes -  -  -  119,891.91 -  -  -  119,891.91 119,891.91
00.0.0.01.08.00 Debentures 130,508.44 222,163.80 316,648.32 686,429.32 385,470.60 101,009.28 1,842,229.75 1,842,229.76
00.0.0.01.09.00 Listed Companies Equity Securities 13,190.53 -  -  -  -  -  -  13,190.53 13,190.53
00.0.0.01.10.00 Non-listed Companies Equity Securities 27,360.04 -  -  -  -  -  -  27,360.04 27,360.04
00.0.0.01.11.00 Other 106,819.60 351,592.96 456,671.63 717,741.75 134,891.67 3,459.43 236.17 1,777,633.73 1,771,413.21
00.0.0.01.00.00 TOTAL 277,878.61 4,267,203.90 2,375,836.43 2,488,170.77 933,365.16 1,314,507.30 211,879.10 11,913,012.09 11,868,841.27

7017 - MARKETABLE SECURITIES

Code Description No stated maturity Up to 3 months 3 months to 1 year 1-3 years  3-5 years  5-15 years  More than 15 years
00.0.0.01.01.00 Own Portfolio 277,878.61 2,608,547.83 604,482.44 1,541,755.43 656,280.79 625,796.19 28,165.79
00.0.0.01.02.00 Subject to Repurchase Commitments -  167,295.17 66,506.65 211,686.26 271,014.14 688,711.11 183,713.31
00.0.0.01.03.00 Derivatives -  45,861.03 280,656.41 49,380.55 6,070.23 -  - 
00.0.0.01.04.00 Pledged with BrazilianCentral Bank -  1,345,629.90 1,130,107.08 312,924.48 -  -  - 
00.0.0.01.06.00 Pledged under Guarantees Rendered -  99,869.97 294,083.85 372,424.05 -  -  - 
00.0.0.01.00.00 Total 277,878.61 4,267,203.90 2,375,836.43 2,488,170.77 933,365.16 1,314,507.30 211,879.10

7018 - CONCENTRATION OF MARKETABLE SECURITIES, LENDING OPERATIONS PORTFOLIO AND DEPOSITS

    Private Securities Lending Operations Portfolio Deposits
   
Code Description Amount % on the total Amount  % on the total Allowance for loan losses Amount  % on the
00.0.0.01.01.00 10 largest
  borrowers/clients 2,291,029.74 65.39 2,751,889.84 12.71 4,868.33 4,218,534.25 15.25
00.0.0.01.02.00 Next 50 largest
  borrowers/clients 1,212,846.55 34.61 4,916,862.44 22.70 148,559.61 5,551,863.46 20.07
00.0.0.01.03.00 Next 100 largest
  borrowers/clients -  -  3,327,269.73 15.37 200,130.37 2,839,044.31 10.26
00.0.0.01.04.00 Other -  -  10,660,329.47 49.22 539,107.07 15,052,163.35 54.42
00.0.0.01.00.00 Total 3,503,876.29 100.00 21,656,351.48 100.00 892,665.38 27,661,605.37 100.00

7019 - MATURITY OF LENDING OPERATIONS PORTFOLIO

    Credits in arrears over 15 days Falling due porfolio
   
Code Description Up to 3 months 3 months to 1 year 1-3 years 3-5 years 5-15 years More than 15 years
00.1.1.00.00.00 Public Sector -  -  -  -  -  -  - 
00.1.1.02.01.00 Manufacturing -  85,075.13 210,623.13 104,450.34 87,212.98 141,048.56 - 
00.1.4.00.00.00 Private Sector 488,361.22 7,656,308.38 6,017,580.58 4,707,049.87 1,298,347.31 846,012.20 14,075.08
00.1.4.01.00.00 Agricultural 7,585.54 284,523.43 397,406.76 73,916.20 26,484.51 43,908.17 14,075.08
00.1.4.02.00.00 Manufacturing 222,620.40 2,778,274.48 2,399,323.32 1,880,881.00 640,069.92 300,712.54 - 
00.1.4.03.00.00 Trade 25,948.51 1,948,944.86 419,115.71 249,597.13 75,056.84 17,151.53 - 
00.1.4.04.00.00 Financial Services 190.92 384,820.85 32,162.99 7,940.09 5,936.27 33.52 - 
00.1.4.05.00.00 Other Services 59,025.57 515,373.01 1,395,411.32 1,660,973.79 404,727.16 180,839.30 - 
00.1.4.06.00.00 Individuals 166,804.96 1,711,513.19 1,300,284.91 672,796.82 17,195.15 421.73 - 
00.1.4.07.00.00 Residential Construction loans 6,185.32 32,858.56 73,875.57 160,944.84 128,877.46 302,945.41 - 
00.1.5.00.00.00 Foreign Clients -  11.50 195.20 -  -  -  - 
00.1.0.00.00.00 Total 488,361.22 7,741,395.01 6,228,398.91 4,811,500.21 1,385,560.29 987,060.76 14,075.08

7020 - FLOW OF LENDING OPERATIONS PORTFOLIO

    Contracted  Amortized  Loan Charge- Loan  Renegotiated
Code Description Credits  Credits  Offs  Recoveries Credits
00.1.4.00.00.00 Private Sector 13,704,304.87 12,728,582.12 124,817.00 37,966.45 101,358.11
00.1.4.01.00.00 Agricultural 298,644.34 289,278.99 -  -  -
00.1.4.02.00.00 Manufacturing 4,930,592.98 4,712,216.44 65,784.91 3,624.71 6200.45
00.1.4.03.00.00 Trade 2,534,805.60 2,516,156.12 2,445.94 5,287.69 9845.08
00.1.4.04.00.00 Financial Services 136,220.46 35,343.47 1,186.37 48.77 186.24
00.1.4.05.00.00 Other Services 3,738,768.18 3,254,309.00 3,388.32 2,312.01 19142.88
00.1.4.06.00.00 Individuals 1,908,747.72 1,789,350.08 40,208.14 23,013.24 63438.13
00.1.4.07.00.00 Residential Construction Loans 156,525.59 131,928.02 11,803.32 3,680.03 2545.33
00.1.5.00.00.00 Foreign Clients 254.48 174.57 -  -  -
00.1.0.00.00.00 Total 13,704,559.35 12,728,756.69 124,817.00 37,966.45 101,358.11

7021 - GEOGRAPHICAL DISTRIBUTION OF LENDING OPERATIONS PORTFOLIO AND DEPOSITS

Demand Deposits Time Deposits
Private Sector Private Sector
Code Description Private companies Individuals Private companies Individuals
00.0.1.01.00.00 Local 2,101,393.52  140,828.52  13,951,838.17  3,827,997.29 
00.0.1.01.01.00 The North 18,756.37  1,428.17  46,320.28  38,312.62 
00.0.1.01.02.00 The Northeast 94,176.72  5,438.24  583,931.35  303,165.72 
00.0.1.01.03.00 The Southeast 1,767,683.06  116,348.11  12,435,296.94  3,044,801.08 
00.0.1.01.04.00 The Middle-west 56,969.79  4,338.39  188,794.67  76,761.10 
00.0.1.01.05.00 The South 163,807.58  13,275.61  697,494.93  364,956.77 
00.0.1.02.00.00 Abroad 677,153.27  -  786,969.80  236,183.64 
00.0.1.00.00.00 Total 2,778,546.79  140,828.52  14,738,807.97  4,064,180.93 
 
Savings Deposits Lending Operation Portfolio
Private Sector
Code Description Private companies Individuals
00.0.1.01.00.00 Local 46,458.50  5,313,132.76  19,410,942.06 
00.0.1.01.01.00 The North 426.81  34,936.02  88,409.17 
00.0.1.01.02.00 The Northeast 1,099.17  152,124.84  839,394.49 
00.0.1.01.03.00 The Southeast 37,584.37  4,710,479.23  16,035,452.34 
00.0.1.01.04.00 The Middle-west 407.20  88,781.37  499,025.21 
00.0.1.01.05.00 The South 6,940.95  326,811.30  1,948,660.85 
00.0.1.02.00.00 Abroad -  -  2,245,409.42 
00.0.1.00.00.00 Total 46,458.50  5,313,132.76  21,656,351.48 

7022 - RISK LEVEL OF LENDING OPERATIONS PORTFOLIO

Amounts by Risk Level
Code Description AA A B C D
00.0.0.01.01.00 Hot-money 4,021.13  8,191.65  5,523.28  264.27  - 
00.0.0.01.02.00 Loans 2,971,014.81  2,044,017.68  581,165.27  745,249.59  562,124.50 
00.0.0.01.03.00 Discounted Loans,
      Notes and Bills 105,915.78  178,005.13  53,678.72  18,646.73  1,323.49 
00.0.0.01.04.00 Overdraft Loans 368,565.73  230,121.87  141,705.79  27,933.88  660.07 
00.0.0.01.05.00 Individual Loans 313,901.79  363,354.96  71,995.57  17,897.21  5,529.55 
00.0.0.01.06.00 Individual Financing 197,221.76  754,126.01  64,565.21  45,635.17  18,170.99 
00.0.0.01.07.00 Advances on Exchange
      Contracts (before export) 549,692.07  398,092.37  168,231.09  12,244.30  170.52 
00.0.0.01.08.00 Advances on Exchange
      Contracts (after export) 499,939.19  158,729.88  34,886.79  10,158.49  300.31 
00.0.0.01.09.00 Vendor 295,571.43  78,696.49  18,133.87  3,911.37  130.53 
00.0.0.01.10.00 Purchase Financing 145,845.14  245,218.17  66,781.74  38,807.82  248.80 
00.0.0.01.11.00 Agricultural 455,803.70  223,072.54  70,227.44  20,900.94  28,070.24 
00.0.0.01.12.00 Real Estate Loans 836,439.34  3,396.68  52,342.69  15,401.92  8,276.56 
00.0.0.01.15.00 Other Financing 3,751,985.03  1,571,314.97  580,436.47  390,059.78  24,381.67 
00.0.0.01.19.00 Other Loans 81,401.04  1,919.03  27,190.08  112,107.01  1,109.89 
00.0.0.01.00.00 Total 10,577,317.94  6,258,257.43  1,936,864.01  1,459,218.48  650,497.12 

Amounts by Risk Level Total
Guaranteed
Code Description E F G H Total
00.0.0.01.01.00 Hot-money -  82.83  -  -  18,083.16  - 
00.0.0.01.02.00 Loans 123,786.74  98,949.73  67,529.02  308,885.85  7,502,723.19  731,641.54 
00.0.0.01.03.00 Discounted Loans,
      Notes and Bills 454.53  6,542.10  171.52  1,480.71  366,218.71  125,966.04 
00.0.0.01.04.00 Overdraft Loans 80.94  130.50  -  66.01  769,264.79  - 
00.0.0.01.05.00 Individual Loans 3,584.50  4,573.43  3,563.69  20,271.13  804,671.83  - 
00.0.0.01.06.00 Individual
      Financing 8,883.12  7,030.29  4,872.18  8,578.87  1,109,083.60  1,101,465.11 
00.0.0.01.07.00 Advances on
      Exchange Contracts
      (before export) -  -  2,068.79  -  1,130,499.14  54,881.27 
00.0.0.01.08.00 Advances on
      Exchange Contracts
      (after export) 0.04  -  -  -  704,014.70  34,177.14 
00.0.0.01.09.00 Vendor -  190.55  49.11  4,533.80  401,217.15  - 
00.0.0.01.10.00 Purchase Financing -  0.75  -  -  496,902.42  - 
00.0.0.01.11.00 Agricultural 840.88  -  5,132.23  43,851.72  847,899.69  754,712.00 
00.0.0.01.12.00 Real Estate Loans 4,392.13  3,042.42  2,311.10  14,818.06  940,420.90  932,846.43 
00.0.0.01.15.00 Other Financing 3,955.11  807.30  536.22  6,208.53  6,329,685.08  4,251,557.80 
00.0.0.01.19.00 Other Loans 832.55  353.49  2,560.87  8,193.16  235,667.12  57,691.11 
00.0.0.01.00.00 Total 146,810.54  121,703.39  88,794.73  416,887.84  21,656,351.48  8,044,938.44 

7023 - LENDING OPERATIONS PORTFOLIO BY INDEX

Code Description Fixed Rate Interbank
Deposit Interest
Rate 		Floating
Reference
Rate/Basic
Financial Rate 		Dollar Other
00.0.0.01.01.00 Lending Operations 7,301,748.58  3,051,481.69  1,144,435.60  4,406,985.03  3,681,519.63 
00.0.0.01.03.00 Other 97,896.89  102,949.02  4,615.29  1,835,731.59  28,988.16 
00.0.0.01.00.00 Total 7,399,645.47  3,154,430.71  1,149,050.89  6,242,716.62  3,710,507.79 

7024 - CREDIT ASSIGNMENT

Financial Institutions Securitization Companies
Code Description Related
Parties 		Non-Related
Parties 		Related
Parties 		Non-Related
Parties
00.0.0.01.01.00 Assignment of loan without co-obligation -  -  -  4,012.63
00.0.0.01.02.00 Assignment of loan without co-obligation -  -  -  23,803.13
00.0.0.01.00.00 Total -  -  -  23,803.13

7025 - LENDING OPERATIONS PORTFOLIO BY AMOUNT AND RISK LEVEL

AA A B
Code Description Quantity
(by thousand) 		Amount Quantity
(by thousand) 		Amount Quantity
(by thousand) 		Amount
00.0.0.01.01.00 Up to R$ 10,000.00 990.47  787,492.84  2361.02  1,854,786.32  396.34  327,144.35 
00.0.0.01.02.00 From R$ 10,000.00 to R$ 20,000.00 14.92  206,014.40  31.19  423,798.94  5.71  79,341.78 
00.0.0.01.03.00 From R$ 20,000.00 to R$ 50,000.00 12.48  408,136.09  9.13  262,980.54  2.73  86,513.28 
00.0.0.01.04.00 From R$ 50,000.00 to R$ 100,000.00 6.21  428,950.79  1.64  117,861.58  1.07  76,591.11 
00.0.0.01.05.00 From R$ 100,000.00 to R$ 500,000.00 4.18  838,849.29  1.99  426,105.28  1.05  223,680.02 
00.0.0.01.06.00 Over to R$ 500,000.00 1.9  7,907,874.53  0.91  3,172,724.77  0.42  1,143,593.47 
00.0.0.01.00.00 Total 1,030.16  10,577,317.94  2,405.88  6,258,257.43  407.32  1,936,864.01 

C D E
Code Description Quantity
(by thousand) 		Amount Quantity
(by thousand) 		Amount Quantity
(by thousand) 		Amount
00.0.0.01.01.00 Up to R$ 10,000.00 196.38  190,035.78  68.81  104,813.36  38.43  60,194.26 
00.0.0.01.02.00 From R$ 10,000.00 to R$ 20,000.00 3.37  46,075.63  2.32  31,857.45  1.18  16,364.06 
00.0.0.01.03.00 From R$ 20,000.00 to R$ 50,000.00 1.25  37,555.99  0.91  26,480.35  0.48  13,928.82 
00.0.0.01.04.00 From R$ 50,000.00 to R$ 100,000.00 0.36  25,153.32  0.21  14,509.26  0.1  7,161.93 
00.0.0.01.05.00 From R$ 100,000.00 to R$ 500,000.00 0.29  61,726.07  0.15  27,730.29  0.05  8,955.69 
00.0.0.01.06.00 Over to R$ 500,000.00 0.16  1,098,671.69  0.05  445,106.41  0.01  40,205.78 
00.0.0.01.00.00 Total 201.81  1,459,218.48  72.45  650,497.12  40.25  146,810.54 

F G H
Code Description Quantity
(by thousand) 		Amount Quantity
(by thousand) 		Amount Quantity
(by thousand) 		Amount
00.0.0.01.01.00 Up to R$ 10,000.00 42.38  59,694.61  31.53  45,373.00  109.49  108,727.47 
00.0.0.01.02.00 From R$ 10,000.00 to R$ 20,000.00 1.06  14,571.28  0.77  10,515.92  1.39  19,212.59 
00.0.0.01.03.00 From R$ 20,000.00 to R$ 50,000.00 0.48  14,324.08  0.28  8,017.93  0.59  17,409.33 
00.0.0.01.04.00 From R$ 50,000.00 to R$ 100,000.00 0.11  6,792.48  0.07  4,717.07  0.17  11,911.78 
00.0.0.01.05.00 From R$ 100,000.00 to R$ 500,000.00 0.06  9,783.71  0.03  5,409.07  0.13  25,542.12 
00.0.0.01.06.00 Over to R$ 500,000.00 0.01  16,537.23  0.01  14,761.74  0.06  234,084.55 
00.0.0.01.00.00 Total 44.10  121,703.39  32.69  88,794.73  111.83  416,887.84 

7026 - FIXED ASSETS

Code Description Prior Quarter Additions Reductions Quarter
00.0.1.01.00.00 Furniture and Equipment 3,033.72  1,427.97  -  4,461.69 
00.0.1.02.00.00 Property and Equipment in process 48.48  143.07  -  191.55 
00.0.1.03.00.00 Land and Buildings in Use 115,029.29  6,625.73  14,368.78  107,286.24 
00.0.1.03.01.00 Land and Buildings 115,029.29  6,625.73  14,368.78  107,286.24 
00.0.1.04.00.00 Furniture and Equipment 69,626.21  2,278.90  5,413.18  66,491.93 
00.0.1.05.00.00 Other 179,997.35  3,312.27  13,452.04  169,857.58 
00.0.1.00.00.00 Total 367,735.05  13,787.94  33,234.00  348,288.99 

7027 - FUNDING BY MATURITY

Maturity
Code Description No stated maturity Up to 3 months 3 months to 1 year 1-3 years 3-5 years 5-15 years
00.0.1.01.00.00 Deposits 8,278,966.57  3,908,855.26  7,469,029.33  7,937,778.34  60,507.05  6,468.82 
00.0.1.01.01.00 Demand Deposits 2,918,301.74 
00.0.1.01.02.00 Time Deposits -  3,852,493.88  6,990,752.42  7,892,766.73  60,507.05  6,468.82 
00.0.1.01.03.00 Savings Deposits 5,359,591.26  -  -  -  -  - 
00.0.1.01.04.00 Interbank Deposits -  56,361.38  478,276.91  45,011.61  -  - 
00.0.1.01.05.00 Foreign Deposits 1,073.57  -  -  -  -  - 
00.0.1.02.00.00 Securities Sold Under
  Repurchase Agreements -  10,491,447.50  64,547.66  -  -  - 
00.0.1.03.00.00 Local Borrowings -  88.62  260.40  347.20  318.26  115.03 
00.0.1.04.00.00 Foreign Borrowings -  1,585,933.22  1,901,156.03  509,246.11  20,541.04  12,174.63 
00.0.1.05.00.00 Local Onlendings -  276,932.55  1,124,700.12  1,598,228.98  772,148.52  551,702.90 
00.0.1.06.00.00 Foreign Onlending -  10,701.97  62,218.58  103,082.68  74,136.59  7,766.51 
00.0.1.08.00.00 Subordinated Debt - - 11,837.28 1,573,937.83
00.0.1.00.00.00 Total 8,278,966.57  16,273,959.12  10,633,749.40  10,148,683.31  927,651.46  2,152,165.72 

7028 – OPERATIONAL LIMITS

Unibanco Unibanco Financial Group Unibanco Financial Economic Group
Code Description Required Situation Excess /
Deficiency 		Required Situation Excess /
Deficiency 		Required Situation Excess /
Deficiency
00.0.0.01.0.0 Required
  Stockholders’
  Equity Compatible
  with the Degree of
  Risk of Assets
  (Brazil index) -  -  -  6,170,835.83  9,385,910.48  3,215,074.65  6,809,556.56  9,881,430.39  3,071,873.83 
00.0.0.01.01.00 Credit Risk -  -  -  5,476,428.39  -  -  6,115,264.03  -  - 
00.0.0.01.02.00 Exchange Rate Market Risk -  -  -  582,348.28  -  -  582,348.28  -  - 
00.0.0.01.03.00 Interest Rate Market Risk -  -  -  112,059.16  -  -  111,944.25  -  - 
00.0.0.02.00.00 Fixed Assets Ratio -  -  -  4,671,884.27  4,515,297.27  156,587.00  4,919,086.89  3,575,103.15  1,343,983.74 
00.0.0.03.00.00 Minimum Regulatory
  Stockholders' Equity
  Required 790,280.00  8,946,356.31  8,156,076.31  -  -  -  -  -  - 
00.0.0.04.00.00 Minimum Regulatory
  Capital Required 790,280.00  5,000,000.00  4,209,720.00  -  -  -  -  -  - 

7029 - MAIN BRANCHES FINANCIAL INFORMATION

Item Branch Code Branch Name Assets Liabilities Net Income (Loss) for the Period
      (+/-)
 
1  5385500     Patriarca 52,710,669.92  53,168,920.82  (189,492.62)
2  80026000     Cayman 7,847,724.02  7,813,115.66  34,608.36 
3  80085500     Nassau 6,152,584.13  6,107,946.93  44,637.20 
4  8902700     Business Center Paulista 1,872,054.74  1,956,380.99  (43,370.70)
5  9631700     Business Center Rio 728,873.44  756,029.74  (12,741.12)
6  9607400     Business Center Santo Amaro 517,076.81  539,313.86  (10,762.92)
7  5733800     Carijós 362,575.43  379,491.22  (8,118.62)
8  14198300     Santos Dumont 321,821.42  338,397.69  (8,410.61)
9  12250400     São Bernardo do Campo 272,233.48  275,318.55  (1,938.14)
10  14465600     Marechal - Curitiba 215,949.05  218,798.47  (2,849.42)

7030 - CHARGES AND TAXES

Code Description Total
00.0.0.01.01.00 Social Security 70,860.25 
00.0.0.01.02.00 Private Retirement 955.87 
00.0.0.01.03.00 FGTS (Government Severance Indemnity Fund for Employees) 19,178.71 
00.0.0.01.05.00 Compensation for Hired Employees 5,835.62 
00.0.0.01.06.00 Labor Insurance Claims Premiums 2,197.39 
00.0.0.01.07.00 Other Employees Benefits 51,186.09 
00.0.0.01.00.00 TOTAL CHARGES 150,213.93 
00.0.0.02.01.00 IOF (Tax on Financial Operations) 63,471.80 
00.0.0.02.02.00 Income Taxes 242,638.05 
00.0.0.02.03.00 CPMF (Tax on Financial Debts on Demand Accounts) 319,081.17 
00.0.0.02.04.00 PIS/PASEP (Employee’s Profit Participation Program) 6,423.81 
00.0.0.02.05.00 Taxes for Social Security Financing 39,531.14 
00.0.0.02.06.00 ISS (Municipal Services Tax) 18,474.79 
00.0.0.02.07.00 Other 8,849.53 
00.0.0.02.00.00 TOTAL TAXES 698,470.29 

7031 – CORRESPONDENT BANKS TRANSACTIONS

For the Reference Quarter
Code Description Quantity (by thousand) Transaction
00.0.0.01.01.00 Demand Deposits 407,993.00  2,432,118.26 
00.0.0.01.06.00 Collections 46,838.00  119,712.03 
00.0.0.01.00.00 Total 454,831.00  2,551,830.29 

7032 - CHANGES ON CLIENT DEMAND ACCOUNTS BY CHECK AND ELECTRONIC TRANSACTIONS

Code Description Quantity (in Unit) Transaction
00.0.1.01.00.00 Clearing Check 28,452,687  13,697,610.55 
00.0.1.01.01.00     Conventional System 55,353  29,308.59 
00.0.1.01.02.00     Electronic System 28,397,334  13,668,301.96 
00.0.1.02.00.00 Electronic Draft 90,413  42,319.64 
00.0.1.03.00.00 Electronic Transfers 174,889  531,102.90 
00.0.1.04.00.00 Electronic Collection 15,951,297  13,282,244.47 
00.0.1.00.00.00 Total 44,669,286  27,553,277.56 

7033 – REPORT OF INDEPENDENT ACCOUNTANTS ON THE LIMITED REVIEW

To the Management and Stockholders
Unibanco – União de Bancos Brasileiros S.A.

1

We have carried out a limited review of the accompanying individual and consolidated balance sheets (IFT) of Unibanco – União de Bancos Brasileiros S.A., for the quarter ended June 30, 2004, and of the related statements of income, of changes in stockholders’ equity and of changes in financial position, as well as the accounting information in the notes to the financial statements (exhibits 7002 to 7009 and 7014). These financial statements are the responsibility of the Bank’s management.

2

Our review was carried out in conformity with specific standards established by the Institute of Independent Auditors of Brazil (IBRACON), in conjunction with the Federal Accounting Council (CFC), and mainly comprised: (a) inquires of and discussions with management responsible for the accounting, financial and operating areas of the Bank with regard to the main criteria adopted for the preparation of the quarterly information and (b) a review of the significant information and of the subsequent events which have, or could have, significant effects on the Bank’s financial position and its operations.

3

Based on our limited review, we are not aware of any significant adjustments which should be made to the quarterly information referred to above in order that such information be stated in conformity with accounting practices adopted in Brazil applicable to the preparation of quarterly information, consistent with the Brazilian Central Bank regulations.

4

The Quarterly Information (IFT) also includes accounting information presented in order to provide supplementary information on the Bank, required by the Brazilian Central Bank, on the combined financial statements referred to as “Financial Conglomerate” and “Economic-Financial Consolidated (CONEF)”, comprising the combined balance sheet as of June 30, 2004 of the Financial Conglomerate and Economic-Financial Consolidated (CONEF) and the combined statements of income and of changes in financial position of the Financial Conglomerate for the quarter then ended (exhibits 7010 to 7013). These combined financial statements have been submitted to the same review procedures described in paragraph 2 and, based on our review, we are not aware of any significant adjustments which should be made for these financial statements to be presented in conformity with the standards issued by the Brazilian Central Bank.

5

The limited review of the Quarterly Financial Information (IFT) was carried out with the purpose of issuing a report on the overall financial statements referred in paragraph 1. Exhibits 7016 to 7023, 7025 to 7032, 7034 to 7036, 7038 to 7039, which are part of this IFT, are being presented to provide supplementary information on the Bank, required by the Brazilian Central Bank, and are not required as a part of the financial statements. The accounting information included in these exhibits has been submitted to the same audit procedures described in paragraph 2 and, based on the adoption of these limited review procedures, we are not aware of any significant adjustments which should be made for this accounting information to be presented in conformity with the overall financial information referred to in paragraph 1.

São Paulo, August 6, 2004

PricewaterhouseCoopers
Auditores Independentes
CRC 2SP000160/O-5

Paulo Sergio Miron
Contador CRC 1SP173647/O-5

7034 - PROVISIONS

Code Description Prior Quarter Additions Reductions Reference
Quarter
00.0.0.01.00.00 ASSETS 904,748.04  150,967.36  132,266.13  923,449.27 
00.0.0.01.06.00 Lending Operations 856,204.41  143,657.91  132,266.13  867,596.19 
00.0.0.01.08.00 Other Credits 23,284.44  1,784.75  -  25,069.19 
00.0.0.01.09.00 Investments 25,259.19  5,524.70  -  30,783.89 
00.0.0.04.00.00 LIABILITIES 939,958.06  213,840.97  131,642.69  1,022,156.34 
00.0.0.04.03.00 Labor Contingencies 492,799.90  87,272.98  46,916.49  533,156.39 
00.0.0.04.04.00 Other Civil Contingencies 290,424.45  6,180.39  8,169.54  288,435.30 
00.0.0.04.05.00 Other Contingencies 156,733.71  120,387.60  76,556.66  200,564.65 

7035 - CAPITAL

Code Description Number of Shares (thousand)
00.0.1.00.00.00 Shares 140,885,833.32 
00.0.1.01.00.00 Capital 139,611,422.08 
00.0.1.01.01.00 Common Shares - Local Residents 75,189,846.56 
00.0.1.01.02.00 Common Shares - Foreign Residents 375,970.29 
00.0.1.01.03.00 Preferred Shares - Local Residents 18,525,896.74 
00.0.1.01.04.00 Preferred Shares - Foreign Residents 45,519,708.49 
00.0.1.02.00.00 Treasury Shares 1,274,411.24 
00.0.1.02.02.00 Preferred Shares 1,274,411.24 

7036 - CASH DIVIDENDS PAID

Item Approval Date Kind of
Remuneration 		Beginning of
Payment 		Share Remuneration per
Share/Quota
1  July 23, 2004  2  August 2, 2004  1  0.000001443266209 
2  July 23, 2004  2  August 2, 2004  2  0.000001702873907 

7037 - CHANGES ON CAPITAL IN THE REFERENCE PERIOD

Item Change Date Capital Change Amount Shares Amount
1 April 30, 2004 5,000,000 1,309,398.19 Merger of reserves

7038 - COMMITMENTS AND GUARANTEES

Code Description Prior Quarter Additions Reductions Reference Quarter
00.0.0.01.00.00 Guarantees Provided 3,281,271.63  551,736.13  484,934.42  3,348,073.34 
00.0.0.01.01.00 Financial Institutions Authorized to
Operate by Brazilian Central Bank 		114,167.43  7,143.90  3,240.47  118,070.86 
00.0.0.01.02.00 Individuals and Non-Financial
Companies 		588,205.38  199,892.50  131,222.97  656,874.91 
00.0.0.01.03.00 Other 2,578,898.82  344,699.73  350,470.98  2,573,127.57 
00.0.0.02.00.00 Co-Obligation for Credit Assignment 3,926.57  4,012.63  3,983.19  3,956.01 
00.0.0.02.01.00 Financial Institutions Authorize to
Operate by Brazilian Central Bank 		3,926.57  4,012.63  3,983.19  3,956.01 

7039 - ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCY

Code Description Head Office and
Local Branches 		Foreign Branches Total
00.0.0.01.00.00 ASSETS 2,638,114.38  8,843,075.95  11,481,190.33 
00.0.0.01.01.00 Cash And Due From Banks 229,109.04  87,451.98  316,561.02 
00.0.0.01.02.00 Marketable Securities -  6,482,114.86  6,482,114.86 
00.0.0.01.03.00 Lending Operations -  2,144,179.49  2,144,179.49 
00.0.0.01.04.00 Other Credits 2,409,005.34  129,329.62  2,538,334.96 
 
00.0.0.04.00.00 LIABILITIES 3,504,437.99  7,528,568.26  11,033,006.25 
00.0.0.04.01.00 Deposits 1,073.57  1,720,648.78  1,721,722.35 
00.0.0.04.02.00 Other Funding 1,033,310.30  2,833,409.43  3,866,719.73 
00.0.0.04.03.00 Borrowings 2,470,054.12  1,728,394.17  4,198,448.29 
00.0.0.04.07.00 Subordinated Debt -  1,246,115.88  1,246,115.88 

By Currency
Code Description Dollar Euro Pound Swiss
Franc 		Yen Other
00.0.0.01.00.00 ASSETS 10,948,106.09  278,066.77  9,058.07  4,273.34  227,729.90  13,956.16 
00.0.0.01.01.00 Cash And Due From Banks 218,637.12  72,384.43  7,586.27  4,273.34  574.28  13,105.58 
00.0.0.01.02.00 Marketable Securities 6,405,409.99  76,704.87  -  -  -  - 
00.0.0.01.03.00 Lending Operations 1,913,207.06  4,387.41  -  -  226,585.02  - 
00.0.0.01.04.00 Other Credits 2,410,851.92  124,590.06  1,471.80  -  570.60  850.58 
 
00.0.0.04.00.00 LIABILITIES 10,464,120.16  516,553.32  5,204.82  18,700.95  4,044.51  24,382.49 
00.0.0.04.01.00 Deposits 1,703,434.26  18,287.74  -  -  -  0.35 
00.0.0.04.02.00 Other Funding 3,468,828.13  384,447.13  4,676.31  2,406.87  389.18  5,972.11 
00.0.0.04.03.00 Borrowings 4,045,741.89  113,818.45  528.51  16,294.08  3,655.33  18,410.03 
00.0.0.04.07.00 Subordinated Debt 1,246,115.88  -  -  -  -  - 

7040 - COMMENTS ON PERFORMANCE AND PROSPECTS

Net Income and Stockholders’ Equity

The first half of 2004 net income rose to R$581 million. In the second quarter of 2004, Unibanco’s net income amounted R$305 million. Stockholders’ equity in June 2004 stood at R$7,704 million.

In August 2004, Unibanco paid out R$204 million in net interest on capital stock.

The investments acquired this semester, Hipercard and BNL, were consolidated in the second quarter of 2004. As a consequence, and for purposes of a better comparison, ROAE, ROAA, earnings per share, and financial margin were calculated based on monthly averages.

Assets

Unibanco’s consolidated total assets reached R$80,011 million on June 30th, 2004.

Securities Portfolio

The sale of securities classified as available for sale generated gains before taxes of R$5 million in the first half of 2004.

Trading securities are acquired with the purpose of being actively and frequently traded. Unrealized gains and losses due to market value adjustments are recognized in the income statement.

Securities available for sale can be traded as a result of interest rate fluctuations, changes in payment conditions or other factors. Securities available for sale are adjusted at market value, recorded in a separate stockholders’ equity account.

Unibanco classifies as held to maturity those securities which it has the intention and the financial capability to keep in the portfolio until maturity. They are accounted for at their acquisition cost plus accrued interest.

The market value of such securities stood at R$6,277 million on June 30th, 2004. The weighted average spread of this portfolio, funded by third parties, was 5.2% per annum in June 2004.

Loan Portfolio

Consolidated loan portfolio stood at R$30,045 million in June 2004. Credit card companies, consumer finance portfolio, and small, micro and medium companies loans posted greater growth.

Balance and Changes in Allowance for Loan Losses

At the end of June 2004, the balance for the consolidated allowance for loan losses totaled R$1,545 million, representing 5.1% of the portfolio.

Whereas the portfolio expanded by 9.9% during the quarter, the provision required during this period dropped by 17.8%. This improvement in credit quality is also reflected on the ratio that measures net write-off vs. total risk.

Funding

On June 30, 2004, Unibanco’s overall funding reached R$93,712 million, including R$30,503 million in investment funds and assets under management. Total local and foreign funding stood at R$63,209 million by the end of June 2004.

Assets under management and investment funds managed by UAM – Unibanco Asset Management, ended June 2004 with R$30,503 million in assets.

Funding in foreign currency totaled R$16,077 million at the end of June 2004.

Unibanco issued a US$100 million Eurobond in January 2004. The 18-month transaction matures on August 10th, 2005, and offers a 3% coupon per annum and semi-annual payments. The launch price was 99.927%, providing investors with a 3.05% yield per annum.

In May 2004, Unibanco completed a new securities issue, through a program of securitization of payment orders, to a total of US$ 200 million. The Notes have a seven-year term and pay interest on a quarterly basis; they mature on April 15th, 2011. Amortization will take place in equal and consecutive payments starting on July 15th, 2007. The issue’s duration is five years and it offers a U.S. dollar coupon of 0.50% a year over the U.S. quarterly Libor rate.

Capital Adequacy and Fixed Assets Ratios

The BIS ratio stood at 16.7%, above the minimum required by the Brazilian Central Bank of 11%.

In June 2004, the Fixed Asset ratio stood at 48.3%.

Results

Net income in the first half of 2004 stood at R$581 million. In the second quarter of 2004, Unibanco reached a net income of R$305 million.

Investments abroad totaled R$1.9 billion at the end of June 2004. During the course of the first half of 2004, these investments abroad were reduced by dividends payments.

During the second quarter of 2004, these investments were almost 100% hedged, reducing the effect of exchange rate fluctuation in the quarter. Income tax and social contribution expenses are impacted by the non-deductibility of the exchange rate fluctuation.

Fees from Services Rendered

In the first half of 2004, total fees amounted to R$1,561 million. In the second quarter of 2004, total fees reached R$820 million.

In the first half of 2004, banking fees reached R$809 million. Fee revenues from the credit card business reached R$565 million in the first half of 2004. Revenues from credit cards reached R$321 million in the second quarter of 2004, influenced by the consolidation of HiperCard in this quarter.

Fee revenues from assets under management reached R$187 million in the first half of 2004. During the same period, the volume of assets under management increased 32.5%.

Fee revenues over administrative and personnel expenses (recurrent revenues and expenses) increased from 65.4% in the first half of 2004.

Personnel and Administrative Expenses

Excluding the acquisitions, total personnel expenses grew R$110 million.

At the Multiple Bank, in the first half of 2004 personnel expenses presented an R$100 million. The increase of R$23 million (6.9%) in the second quarter of 2004 is explained by the seasonal effect of employees’ vacations.

Personnel expenses in the bank’s subsidiaries, excluding the effect of the acquisitions, presented a growth of only R$10 million in the first half of 2004, even considering the average wage increase of 12.0% as a result of the collective agreements of last year.

In the second quarter of 2004, personnel expenses in the bank’s subsidiaries, not considering the acquisitions, dropped by R$8 million, mostly influenced by the external administrative services of a call center in Credicard.

In the first half of 2004, the subtotal of other administrative expenses presented an increase of R$66 million. The expenses posted a growth of 6.2% in the second quarter of 2004.

The Multiple Bank was impacted by R$29 million (3.8%) in 1H04 due to the adjustment of the public utilities tariffs, rental and software maintenance contracts, lease agreements, mailing expenses, larger expenses with marketing campaigns and the external administrative services in Credicard.

In the second quarter of 2004, the increase of R$42 million (6.2%) in the subtotal, is explained by the increase in marketing campaigns and in Credicard expenses, as mentioned above.

 

 

 
SIGNATURE
 
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: August 23, 2004

 
UNIBANCO - UNIÃO DE BANCOS BRASILEIROS S.A.
 
 
  By:   /s/ José Lucas Ferreira de Melo
 
      José Lucas Ferreira de Melo  
      Investor Relations Officer