---

|As filed with the Securties and Exchange Commission on June 27, 2003  
|----------------------------------------------------------------------
|UNITED STATES SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549
|                                                                      
|FORM 20-F                                                             
|                                                                      

|   | Registration Statement
pursuant to Section 12(b) or 12(g) of the Securities Exchange Act of
1934                                     
|-- | -------------------------------------------------------------------------------------------------------------------------------------
|OR
|   | Annual
Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
for the fiscal year ended: December 31, 2002    
|OR
|   | Transition Report pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934 for the transition period from_____ to _____

Commission file number: 1-14640-1

UNIBANCO-UNIÃO DE BANCOS BRASILEIROS S.A.
& UNIBANCO HOLDINGS S.A.(Exact name of Registrant as specified in its
charter)UNIBANCO-UNION OF BRAZILIAN BANKS S.A.
& UNIBANCO HOLDINGS S.A.(Translation of Registrant's names into English)

|Federative Republic of Brazil(Jurisdiction of incorporation or organization)
|----------------------------------------------------------------------------

|UNIBANCO-UNIÃO DE BANCOSBRASILEIROS S.A.Avenida Eusébio Matoso 89105423-901 São Paulo, SP                              | UNIBANCO HOLDINGS S.A.Avenida Eusébio Matoso 89122nd Floor05423-901 São Paulo, SP
|---------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------
|(Adress of principal executive offices)Securities registered or to be
registered pursuant to Section 12(b) of the Act:

|Title of each Class                                                                                                                                                                                                 | (Name of each exchange on which registered)
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------
|Global Depositary Shares, each representing 500 Units each Unit
consisting of one Unibanco Preferred Share and one Unibanco Holding Class B Preferred Share                                                         | The New York Stock Exchange                
|Unibanco Preferred Shares, without par value                                                                                                                                                                        | The New York Stock Exchange*               
|Unibanco Holding Class B Preferred Shares, without par value                                                                                                                                                        | The New York Stock Exchange*               
|                                                                                                                                                                                                                   
|Securities registered or to be registered pursuant to Section 12(b) of the Act:None.(Title of Class)Securities for which there is a reporting obligation pursuant
to Section 15(d) of the Act:None.(Title of Class)

Indicate the number of outstanding shares of each of the issuers classes of capital or common stock
as of the close of the period covered by the annual report.

| | 75,568,744,349 Unibanco Common Shares, no par value per share                    
| | ---------------------------------------------------------------------------------
| | 62,978,027,725 Unibanco Preferred Shares, no par value per share                 
| | 37,138,435,873 Unibanco Holdings Common Shares, no par value per share           
| | 3,843,541,338 Unibanco Holdings Class A Preferred Shares, no par value per share 
| | 42,426,331,767 Unibanco Holdings Class B Preferred Shares, no par value per share

---

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13
or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that
the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90
days:

Yes         
         No

Indicate by check mark which financial
statement item the registrant has elected to follow:

Item 17  
         Item 18

* Not for trading purposes, but only in connection with the registration of
Global Depositary Shares, pursuant to the requirements of the Securities and
Exchange Commission.

---



PART I

|ITEM 1.  | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS                            
|-------- | ---------------------------------------------------------------------------------
|ITEM 2.  | OFFER STATISTICS AND EXPECTED TIMETABLE                                          
|ITEM 3.  | KEY INFORMATION                                                                  
|         | Selected Financial Data                                                          
|         | Risk Factors                                                                     
|ITEM 4.  | INFORMATION ON THE COMPANY                                                       
|         | Overview                                                                         
|         | History and Development of the Company                                           
|         | Business Strategy                                                                
|         | Principal Business Activities                                                    
|         | The Brazilian Banking Industry; Regulation and Supervision                       
|         | Organizational Structure                                                         
|         | Property, Plant and Equipment                                                    
|ITEM 5.  | OPERATING AND FINANCIAL REVIEW AND PROSPECTS                                     
|         | Overview                                                                         
|         | Macroeconomic Factors Affecting Our Financial Condition and Results of Operations
|         | Operating Results                                                                
|ITEM 6.  | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES                                       
|         | Directors and Senior Management                                                  
|         | Compensation                                                                     
|         | Board Practices                                                                  
|         | Employees                                                                        
|         | Share Ownership                                                                  
|ITEM 7.  | MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS                                
|         | Major Shareholders                                                               
|         | Certain Relationships and Related Party Transactions                             
|ITEM 8.  | FINANCIAL INFORMATION                                                            
|         | Consolidated Statements and Other Financial Information                          
|         | Legal Proceedings                                                                
|         | Dividends                                                                        
|         | Significant Changes                                                              
|ITEM 9.  | THE OFFER AND LISTING                                                            
|         | Offer and Listing Details                                                        
|         | Markets                                                                          
|ITEM 10. | ADDITIONAL INFORMATION                                                           
|         | Memorandum and Articles of Association                                           
|         | Material Contracts                                                               
|         | Exchange Rates and Exchange Controls                                             
|         | Taxation                                                                         
|         | Documents on Display                                                             
|ITEM 11. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                       
|ITEM 12. | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES                           

PART II

|ITEM 13. | DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES                             
|-------- | ----------------------------------------------------------------------------
|ITEM 14. | MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
|ITEM 15. | CONTROLS AND PROCEDURES                                                     
|ITEM 16. | [RESERVED]                                                                  

PART III

|ITEM 17. | FINANCIAL STATEMENTS           
|-------- | -------------------------------
|ITEM 18. | FINANCIAL STATEMENTS           
|ITEM 19. | FINANCIAL STATEMENTS & EXHIBITS

NOTE ON JOINT FILING

This annual report on Form 20-F has
been jointly filed with the permission of the Securities and Exchange Commission by
UnibancoUnião de Bancos Brasileiros S.A. and our parent company, Unibanco
Holdings S.A. Unibanco Holdings holds 96.6% of our outstanding common shares and 16.2% of
our outstanding preferred shares as of June 25, 2003. Unibanco Holdings engages in no
activities other than holding shares in us.

FORWARD-LOOKING
STATEMENTS

This annual report contains
forward-looking statements relating to Unibancos business that are based on
managements current expectations, estimates and projections. Words such as
believes, expects, intends, plans,
projects, estimates, anticipates and similar
expressions are used to identify such forward-looking statements. These statements are not
guarantees of future performance and involve risks and uncertainties that are difficult to
predict. Further, certain forward-looking statements are based upon assumptions as to
future events that may not prove to be accurate. Therefore, actual outcomes and results
may differ materially from those expressed or implied in such forward-looking statements.

Factors that could cause actual
results to differ materially include, but are not limited to, those discussed under
Item 3. Key Information  Risk Factors as well as increases in defaults
by borrowers and other loan delinquencies; increases in the provision for loan losses;
deposit attrition, customer loss or revenue loss; changes in interest rates which may,
among other things, adversely affect margins; competition in the banking, financial
services, credit card services, insurance, asset management and related industries;
government regulation and tax matters; adverse legal or regulatory disputes or
proceedings; credit and other risks of lending and investment activities; and changes in
regional, national and international business and economic conditions and inflation. We do
not assume, and specifically disclaim, any obligation to update any forward-looking
statements, which speak only as of the date made.

PRESENTATION OF
FINANCIAL INFORMATION

All references in this annual report
to the real, reais, or R$ are to the Brazilian real, the official currency
of the Federative Republic of Brazil since July 1, 1994. All references to U.S. dollars,
dollars or US$ are to United States dollars.

On 16, 2003, 2002, the exchange rate
for reais into U.S. dollars was R$2.8508 to US$1.00, based on the commercial
selling rate as reported by the Central Bank of Brazil. The commercial rate was R$3.5333
to US$1.00 as of December 31, 2002.

Our audited consolidated financial
statements are included in Item 19 of this annual report. These financial statements
include the assets, liabilities, results of operations and cash flows of our subsidiaries,
as well as our branches outside Brazil. Unibanco Holdings, a corporation organized under
the laws of Brazil, controls us through its direct and indirect ownership, as of December
31, 2002 of 96.59% of our outstanding common shares. Unibanco Holdings substantial
asset is its 60.20% economic interest in Unibanco as of December 31, 2002. As a result, the
financial statements of Unibanco Holdings are similar to ours in all material respects,
except for the minority interest line of the balance sheet and income statement and the
financing activities section of the cash flow statement. References herein to our
consolidated financial statements also refer to the financial statements of Unibanco
Holdings.

Our audited consolidated  balance sheets as of December 31, 2001 and 2002 and consolidated  statements
of income,  changes in  stockholders  equity and cash flows for each of the  three-years  ended at December
31, 2002,  including the notes thereto,  included in this annual report are prepared in accordance with U.S.
GAAP.  For certain  purposes,  such as providing  reports to our Brazilian  stockholders,  filing  financial
statements with the Brazilian  Securities  Commission and determining  dividend payments and tax liabilities
in Brazil, we have prepared and will continue to be required to prepare  financial  statements in accordance
with applicable Brazilian accounting practices and the Brazilian Corporate Law.

Prior to June 30, 1997, Brazil was considered to be a hyperinflationary environment, having experienced
extremely high rates of inflation until then, which affected the comparability of financial performance on
a period-to-period basis. As measured by the general price index, or IGP-DI, published by the Fundação Getúlio
Vargas, a leading independent Brazilian economic research organization, the inflation
rate was 9.8% for 2000, 10.4% for 2001 and 26.4% for 2002.

Certain amounts (including
percentages and totals) appearing herein have been rounded.

Unless the context otherwise requires,  all references to loans include leases.  Certain industry data
presented  herein have been  derived  from sources  which we believe to be  reliable;  however,  we have not
independently  verified this data and we assume no responsibility for its accuracy or completeness.  Sources
include  Sistema do Banco  Central,  a database of  information  provided by financial  institutions  to the
Central  Bank  (SISBACEN);  Federação  Nacional  das  Empresas de Seguros  Privados e de  Capitalização  -
Fenaseg,   the  National  Federation  of  Private  Insurance  and  Capitalization   Companies   (Fenaseg);
Superintendência  de Seguros  Privados,  the  Brazilian  government  insurance  regulatory  body  (SUSEP);
Associação  Nacional de Bancos de  Investimento  e  Distribuidoras,  the National  Association of Investment
Banks and Security Dealers  (ANBID);  Fundação Getúlio Vargas, a leading  Brazilian  independent  economic
research  organization;  and  Associação de Empresas de Cartão de Crédito e Serviços,  the  Brazilian  Cards
Companies Association (ABECS).

PART I

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable

ITEM 3. KEY INFORMATION

SELECTED FINANCIAL DATA

Our selected  historical  financial  data as of and for the years ended  December  31, 2000,  2001 and
2002 have been  derived  from,  and should be read in  conjunction  with,  our audited  consolidated  financial
statements  included in this annual  report.  The  selected  financial  data for the years ended  December  31,
1998,  1999 and 2000 are derived from our  previously  published  audited  consolidated  financial  statements,
which are not  included  in this  annual  report.  Our  consolidated  financial  statements  for the year ended
December  31, 2000 has been audited by  PricewaterhouseCoopers  Auditores  Independentes,  whose 2000 report is
filed as part of this  annual  report.  Our  consolidated  financial  statements  as of and for the years ended
December  31, 2001 and 2002 have been  audited by  Deloitte  Touche  Tohmatsu  Auditores  Independentes,  whose
report is filed as part of this annual report.

Because the financial statements of
Unibanco are similar in all material respects to those of Unibanco Holdings except for
minority interest and the financing activities section of the cash flow statement,
separate selected financial data for Unibanco Holdings have not been presented.

The following selected financial data
should be read in conjunction with Presentation of Financial Information and
Item 5. Operating and Financial Review and Prospects.

|                                                    | For the Year Ended December 31,
|--------------------------------------------------- | -------------------------------
|                                                    |                                
|                                                    | 1998                           
|US GAAP:                                            | (in millions of R$)            
|Unibanco Consolidated Income Statement Data:       
|Net interest income                                 | R$2,589                        
|Provision for loan losses                           | (459)                          
|                                                    |                                
|Net interest income after provision for loan losses | 2,130                          
|Fee and commission income                           | 991                            
|Equity in results of unconsolidated companies (1)   | (22)                           
|Other non-interest income (2)                       | 1,828                          
|Operating expenses (3)                              | (2,419)                        
|Other non-interest expense (4)                      | (2,048)                        
|                                                    |                                
|Income before income taxes and minority interest    | 460                            
|Income taxes                                        | 16                             
|Minority interest                                   | (61)                           
|                                                    |                                
|Net income                                          | R$415                          
|                                                    |                                

|                                                      | For the Year Ended December 31,
|----------------------------------------------------- | -------------------------------
|                                                      |                                
|                                                      | 1998                           
|                                                      | (in R$, except per share data) 
|Unibanco Earnings and Dividends Information:          |                                
|Basic and diluted earnings per 1,000 shares:         
|Common                                                | R$3.99                         
|Preferred                                             | 4.39                           
|Distributed earnings (dividends) per 1,000 shares:   
|Common                                                | R$1.71                         
|Preferred                                             | 1.88                           
|Weighted average shares outstanding (in millions):   
|Common                                                | 49,722                         
|Preferred                                             | 49,398                         
|Unibanco Holdings Earnings and Dividends Information:
|Basic and diluted earnings per 1,000 shares:         
|Common                                                | R$4.15                         
|Class A Preferred                                     | 4.57                           
|Class B Preferred                                     | 4.15                           
|Distributed earnings (dividends) per 1,000 shares:   
|Common                                                | R$1.73                         
|Class A Preferred                                     | 1.90                           
|Class B Preferred                                     | 1.73                           
|Weighted average shares outstanding (in millions):   
|Common                                                | 26,758                         
|Class A Preferred                                     | 3,844                          
|Class B Preferred                                     | 27,873                         

|                                                 | As of December 31, 
|------------------------------------------------ | -------------------
|                                                 |                    
|                                                 | 1998               
|                                                 | (in millions of R$)
|Unibanco Consolidated Balance Sheet Data:        |                    
|Assets                                          
|Cash and due from banks                          | R$198              
|Interest-bearing deposits in other banks         | 1,047              
|Trading, available for sale and held to maturity | 6,169              
|Loans                                            | 12,884             
|Allowance for loan losses                        | (671)              
|Investments in unconsolidated companies          | 355                
|Goodwill and other intangibles, net              | 141                
|Total assets                                     | 28,516             
|Average assets                                   | 27,327             
|Liabilities and Stockholders Equity            
|Deposits                                         | R$7,347            
|Short-term borrowings                            | 4,163              
|Long-term debt                                   | 6,303              
|Stockholders equity                             | 3,023              
|Average liabilities                              | 24,414             
|Average stockholders equity                     | 2,913              

|                                                                            | As of and for the Year Ended December 31,
|--------------------------------------------------------------------------- | -----------------------------------------
|                                                                            |                                          
|                                                                            | 1998                                     
|Selected Consolidated Ratios:                                               |                                          
|Profitability and Performance                                              
|Net Interest margin (5)                                                     | 11.0%                                    
|Return on average assets (6)                                                | 1.5                                      
|Return on average equity (7)                                                | 14.2                                     
|Efficiency ratio (8)                                                        | 72.0                                     
|Liquidity                                                                  
|Loans as a percentage of total deposits                                     | 175.4                                    
|Capital                                                                    
|Total equity as a percentage of total assets                                | 10.6                                     
|Total capital to risk-weighted assets (9)                                   | 14.2                                     
|Asset Quality                                                              
|Allowance for loan losses as a percentage of total loans                    | 5.2                                      
|Nonperforming loans as a percentage of total loans (10)                     | 1.9                                      
|Allowance for loan losses as a percentage of total nonperforming loans (10) | 275.0                                    
|Net charge-offs as a percentage of average loans outstanding (11)           | 3.8                                      

|                                                   | For the Year Ended December 31,              
|-------------------------------------------------- | ---------------------------------------------
|                                                   |                                              
|                                                   | 1998                                         
|                                                   | (in millions of R$, except per share amounts)
|BRAZILIAN GAAP (12):                               |                                              
|Consolidated Income Statement Data:               
|Profit from financial intermediation               | R$2,385                                      
|Net income                                         | 454                                          
|Unibanco Earnings and Dividends Information:      
|Earnings per 1,000 shares:                        
|Common                                             | R$4.58                                       
|Preferred                                          | 4.58                                         
|Distributed earnings (dividends) per 1,000 shares:
|Common                                             | R$1.71                                       
|Preferred                                          | 1.88                                         

|                                          | For the Year Ended December 31,        
|----------------------------------------- | ---------------------------------------
|                                          |                                        
|                                          | 1998                                   
|                                          | (in millions of R$, except percentages)
|Consolidated Balance Sheet Data:          |                                        
|Total assets                              | R$31,727                               
|Total loans                               | 14,046                                 
|Total deposits                            | 7,542                                  
|Stockholders equity                      | 2,906                                  
|Selected Consolidated Ratios:            
|Return on average assets (13)             | 1.5%                                   
|Return on average equity (14)             | 16.4                                   
|Efficiency ratio (15)                     | 60.8                                   
|Total capital to risk weighted assets (9) | 14.2                                   

|_______ | ________________________                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1)     | For more information on our equity in results of unconsolidated companies, see
Item 5. Operating and Financial Review and Prospects  Operating
Results  Results of Operations for Year Ended December 31, 2002 compared
to Year Ended December 31, 2001  Non-Interest Income  Equity in
Results of Unconsolidated Companies,  Results of Operations
for Year Ended December 31, 2001 compared to Year Ended December 31, 2000 
Non-Interest Income  Equity in Results of Unconsolidated Companies,
and Note 11 to our consolidated financial statements.                                                                                        
|(2)     | Other non-interest income consists of trading income (expenses),
net gain on foreign
currency transactions, net gain on securities,
insurance and private retirement plan and pension investment contracts and other non-interest income.
For more information see Note 24 of our consolidated financial statements and
Item 5. Operating and Financial Review and Prospects  Operating
Results  Results of Operations for Year Ended December 31, 2002 Compared
to Year Ended December 31, 2001  Non-Interest Income and
Results of Operations for the Year Ended December 31, 2001 Compared to
Year Ended December 31, 2000  Non-Interest Income.
|(3)     | Operating expenses consist of salaries and benefits and administrative expenses.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|(4)     | Other non-interest expense consists of amortization of goodwill until December 31, 2001
and other intangibles, insurance private retirement plan and pension investment contracts and other non-interest expenses.                                                                                                                                                                                                                                                                                                                                                                                                                                         
|(5)     | Net interest income as a percentage of average interest-earning assets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|(6)     | Net income as a percentage of average total assets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|(7)     | Net income as a percentage of average stockholders equity.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|(8)     | Operating expenses as a percentage of the aggregate of net interest income, fee and commission
income, other non-interest income and other non-interest expense.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|(9)     | Based on Brazilian Central Bank guidelines. See Item 4. Information on the Company  The Brazilian
Banking Industry; Regulation and Supervision  Regulations Intended to Ensure the Safety and Soundness of
Financial Institutions and the Financial System  Capital Adequacy Guidelines.                                                                                                                                                                                                                                                                                                                                                              
|(10)    | Nonperforming loans consist of loans 60 days or more overdue. See Item 4. Information on the
Company - Risk Management - Loan Provisioning.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|(11)    | Charge-offs net of loan recoveries during the period as a percentage of average loans outstanding.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|(12)    | Our Brazilian financial statements are prepared in accordance with
the requirements of Brazilian Corporate Law and the regulation of the Central Bank and the Brazilian Securities and Exchange
Comission.                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|(13)    | Net income as a percentage of average total assets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|(14)    | Net income as a percentage of average stockholders equity.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|(15)    | Operating expenses as a percentage of the aggregate profit from financial intermediation and other
income.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

Risk Factors

Risks Relating to Brazil

Government intervention in
the economy could disrupt economic growth and harm our business

The  Brazilian  economy
 has  historically  been  characterized  by  frequent  and  sometimes  drastic
governmental  intervention.  The  Brazilian  governments  actions to  implement
 macroeconomic  policies  have involved,  among other things,  the imposition of wage,
price and capital controls,  freezing bank accounts and limiting exports.  These types of
actions have had negative effects on the Brazilian economy  generally,  which in  turn
 has had  negative  consequences  for us.  The  government  has  also  implemented
 measures  directly affecting  the  financial  services  industry,  such as imposing
 increased  regulatory  capital  requirements; increasing  reserve  requirements;
 imposing  lending limits and other credit  restrictions;  taxing  financial transactions
 and  increasing  the base  interest  rate.  These types of actions  have,  among  other
 effects, limited  our  ability  to  achieve  net  interest  income.  See Item 5.
 Operating  and  Financial  Review and Prospects   Macroeconomic  Factors  Affecting Our
 Financial  Condition and Results of Operations  Effects of Government Regulation on Our
Financial Condition and Results of Operations.

Government  intervention
 in the  Brazilian  economy,  either  at the  macroeconomic  level  or in the financial
 services  industry  directly,  is unpredictable and may increase our costs and restrict
our capacity to provide financial  services.  Government  intervention also may reduce
demand for our financial services and affect the ability of our customers to repay their
loans.  Moreover,  social  instability  and other  political or economic  developments
 resulting from the Brazilian  governments  imposition of new economic policies,  or the
Brazilian governments response to those developments, could also adversely affect our
operations.

Because  almost all of our
 operations  and customers are located in Brazil,  our financial  condition and results
of  operations,  particularly  in those  segments of the retail and corporate  markets,  are substantially  dependent on Brazils
economy and may be negatively affected as a result of the intervention by the Brazilian
government in the economy.

Further  devaluation  of
the real  against  the  dollar  could  harm our  ability to meet our
         dollar-denominated  or  dollar-indexed  obligations,  or otherwise  adversely
affect our operations by          affecting  the  ability  of  our  Brazilian  corporate
 borrowers  who  have   dollar-denominated   or          dollar-indexed loans from
meeting their repayment obligations to us

Our  financial  condition
and results of operations  have been  affected in recent  periods,  and will likely
 continue to be affected,  by the  devaluation of the real that has followed the
Brazilian  governments decision in January 1999 to allow the real to float freely.

The Central Bank has
periodically  devalued the Brazilian  currency during the last four decades.  The
exchange rate between the real and the US dollar has varied  significantly  in recent
years.  For example,  the US  dollar/real  exchange  rate  declined in value by 18.7%
from R$1.9554 per US dollar at December 31, 2000 to R$2.3204  at  December  31,  2001.
 During  the first six  months of 2002,  the US  dollar/real  exchange  rate declined  in
value by 22.6%,  to R$2.8444  per US dollar at June 30,  2002.  During the third  quarter
of 2002, the real was  devalued  further by 36.9%,  to R$3.8949 per US dollar at
 September  30,  2002.  At December 31, 2002,  the US  dollar/real  exchange  rate was
R$3.5333 per US dollar and on June 4th, 2003 the rate was quoted at R$2.9636 per US
dollar.

Devaluation  of the real
against the dollar and other  foreign  currencies  presents two main types of risk to us.
First, it could impair our ability to meet our  dollar-denominated  or dollar-indexed
 liabilities, by making it more costly for us to obtain the  necessary  foreign
 currencies to repay our  obligations.  As of December 31, 2002, we had R$15,202
 million of liabilities  denominated  in or indexed to foreign  currencies, of which
 substantially all were denominated in US dollars.  When the Brazilian currency is
devalued,  we incur losses on our  liabilities  denominated  in or indexed  to  foreign
 currencies,  and  experience  gains on our monetary assets denominated in or indexed to
foreign  currencies,  as the liabilities and assets are translated into  reais.  The
 volatility  of the real has not  significantly  affected  our  ability  to meet our
 foreign currency  obligations  because we have a policy of generally  matching our
assets and liabilities in or indexed to US dollars.  However, if a devaluation occurs
when the value of such liabilities  significantly  exceeds the value of such assets,
 including any financial  instruments  entered into for hedging purposes,  we could incur
significant  losses,  even if their value has not changed in their original  currency.
 Second,  devaluation of the real could also affect us by causing  economic  harm to our
 Brazilian  corporate  borrowers who have large dollar  denominated  or dollar  indexed
 liabilities.  This is in turn could make it more difficult for them to meet their
 repayment  obligations  on their  domestic  borrowings  from us, which could  adversely
 affect our operations, including by diminishing the value of our loan portfolio.

In addition,  our lending
and leasing  operations  depend  significantly  on our capacity to match the cost of
funds  indexed to the US dollar with the rates  charged to our  customers.  A
 significant  devaluation may affect our ability to attract customers on such terms or to
charge rates indexed to the US dollar.

If Brazil experiences
 substantial  inflation in the future, our results of operations may be
         negatively affected

Brazil has in the past
experienced  high rates of inflation,  with annual rates of inflation during
 the last ten  years  reaching  as high as  1,158% in 1992,  2,708%  in 1993 and  1,093%
 in 1994.  More recently,  Brazils rates of inflation were 20% in 1999, 9.8% in 2000,
 10.4% in 2001,  12.5% in 2002, and 5.1% in the first  quarter of 2003.  Inflation
 itself and  governmental  measures to combat  inflation  have in the past had
significant  negative effects on the Brazilian economy.  Inflation,  actions taken to
combat inflation and public  speculation  about possible future actions have also
contributed to economic  uncertainty in Brazil and  to  heightened  volatility  in  the
 Brazilian  securities  markets.  If  Brazil  experiences  substantial inflation in the
future,  our costs (if not  accompanied by an increase in interest rates) may increase
and our operating  and net  margins  may  decrease.  Inflationary  pressures  may also
 curtail  our  ability to access foreign  financial  markets and may lead to further
 government  intervention  in the  economy,  including  the introduction  of  government
 policies  that may  adversely  affect the overall  performance  of the  Brazilian
economy, which in turn could adversely affect our operations.

Brazils  economic  growth
can be harmed if the tax and the social  security  reforms are not          approved in
Congress, which in turn could adversely affect our business

On January 1, 2003,  Luis
Inácio Lula da Silva took office as the new  President of Brazil.  The new
administration is continuing most of the former administrations  economic and
administrative  policies,  among them  supporting the tax and the social  security
 constitutional  reforms.  Those reforms are considered  very important to balance  Brazils
 public  budget and allow the new  administration  to invest in  infrastructure,
education  and other  social  needs.  These  reforms are  expected  to be voted on in
Congress in the second half of 2003.  If the reforms are not  approved  in  Congress,  Brazils  economic
 growth may be harmed,  which in turn could have a negative impact on our business.

Imposition  of exchange
 controls  could  restrict  our access to the  international  capital          markets
and limit our ability to service our obligations that are denominated in foreign
currencies

The  purchase  and  sale
 of  foreign   currency  in  Brazil  is  subject  to  governmental   control.
Historically,  the Brazilian  government has implemented a number of polices  affecting
 exchange rates and the servicing of external debt by Brazilian  borrowers.  These
policies have included sudden devaluation,  periodic mini-devaluation  (with the
frequency of  adjustments  ranging from daily to monthly),  floating  exchange rate
systems, exchange controls and the creation of dual exchange rate markets.

The  Brazilian  government
 has not prevented the  remittance of proceeds to foreign  investors  since 1990  and has
 never  done so in  respect  of  securities  obligations.  See  Risks  Relating  to the
 Global Depositary  Shares and Units  Restrictions on Overseas  Remittances  could
 adversely  affect Holders of Units and GDSs.  However,  the  government  currently
 restricts  the  ability of  Brazilian  or foreign  persons or entities  to convert
 Brazilian  currency  into  foreign  currencies  other  than in  connection  with
 certain authorized  transactions  through the Central Bank,  which has, for instance,
 centralized  certain payments of principal  on  external  obligations.  The  Central
 Bank  has also  assumed  responsibility  for the  external obligations in connection
with the formal restructuring of Brazilian sovereign debt.

We cannot  be sure that
the  Brazilian  government  will not  institute  a more  restrictive  exchange control
 policy.  Such a policy  could  impede  our  access  to the  international  capital
 markets  by making non-Brazilian  lenders and  investors  reluctant to commit funds to
 Brazilian  borrowers.  Such a policy could also negatively  affect the ability of
Brazilian  debtors  (including us) to make payments outside of Brazil to meet their
obligations under foreign  currency-denominated  liabilities.  Many factors beyond our
control might affect the likelihood of the governments imposing exchange control
restrictions.  Among these factors are:

- the extent of Brazils foreign currency reserves;
- the availability of sufficient foreign exchange on the date a
payment is due;
- the size of Brazils debt service burden relative to the
economy as a whole;
- Brazils policy towards the International Monetary Fund; and
- political constraints to which Brazil may be subject.

Developments in other
emerging market economies may negatively  affect the Brazilian  economy and          our
ability to finance our operations

Historically,  adverse
 developments  in  the  economies  of  other  emerging   countries  have
significantly  affected  the  Brazilian  securities  markets and the  availability  of
credit in the  Brazilian economy,  from both  domestic and  international  sources of
capital.  Economic and market  conditions in other emerging countries,  especially
those in Latin America,  have at times resulted in considerable outflows of funds and
declines in the amount of foreign  investment in Brazil,  have caused Brazilian
 companies to face higher  costs of  raising  funds. Such economic and market conditions in emerging countries
 have  adversely  affected  the
 market  price  of  Brazilian  companies securities.  Such  events have  included  the
 devaluation  of the Mexican  peso in  December  1994,  the Asian economic  crisis of
1997,  the Russian  currency  crisis of 1998 and the 2002 economic and political  crisis
in Argentina.  Since the fourth quarter of 1997,  including during 2002, the
international  financial markets have experienced  significant volatility,  and a large
number of market indices,  including those in Brazil, have at times experienced
significant declines.

In the event of adverse
developments in emerging countries  the international  capital markets may not
 remain  open to  Brazilian  companies  and  prevailing  interest  rates  in these
 markets  may not be advantageous to us.  Decreased  foreign  investment in Brazil could
 negatively  affect growth and liquidity in the Brazilian economy, which in turn could
have a negative impact on our business.

Risks Relating to the
Brazilian Banking Industry

Changes in regulation may
negatively affect us

Brazilian banks and
insurance companies,  including our banking and insurance operations,  are subject to
 extensive  and  continuous  regulatory  review  by the  Brazilian  government.  We  have
 no  control  over government regulations, which govern all facets of our operations,
including the imposition of:

- minimum capital requirements;
- compulsory reserve requirements;
- lending limits and other credit restrictions; and
- accounting and statistical requirements.

The regulatory structure
governing Brazilian financial institutions, including banks,  broker-dealers,  leasing companies, and insurance companies
is continuously  evolving.  Existing laws and regulations could be amended,  the manner
in which laws and regulations are enforced or interpreted could change,  and new laws or
regulations  could be adopted.  Such changes could materially adversely affect our
operations and our revenues.

Changes  in  reserve  and
 compulsory   deposit   requirements  may  negatively   affect  our          profitability

The  Central  Bank has
 periodically  changed  the level of  reserves  and  compulsory  deposits  that financial
 institutions  in Brazil are  required to maintain  with the Central  Bank.  In September
 2001,  the Central  Bank  reimposed  reserve  requirements  that had been relaxed in the
recent  past.  During  2002,  the Central Bank  increased  certain  reserve  requirements
 and created an  additional  reserve  requirement.  The Central Bank may increase the
reserve  requirements  in the future or impose new reserve or compulsory  deposit
requirements.

In June 2002 the Central
Bank increased the rate of compulsory  deposit  requirements on time deposits in the form
of  government  securities  in an account  with the Central  Bank and saving  deposits in
a form of cash  deposits  from 10% to 15% and from 15% to 20%,  respectively,  and in
August 2002 the Central Bank created an additional reserve requirement of 3% on time
deposits and 5% on saving deposits.

In October 2002 the
Central Bank  increased the  additional  reserve  requirements  in cash deposit on time
 deposits to 8% and on saving  deposits to 10%. The Central Bank also  increased  the
 additional  reserve requirements on demand deposits to 8% in October 2002 from 3% in
August 2002.

These changes in
 compulsory  deposit  requirements  in 2002  contributed  to the increase in our time
deposits balance reserve requirement in the form of Brazilian  government  securities to
R$3,720 million, as of December  31,  2002 from  R$1,214  million as of December  31,
2001 and the  increase in our demand and savings deposits  balance reserve  requirement
to R$1,815  million,  as of December 31, 2002 from R$1,455 million as of December 31,
2001.  We measure  changes as a result of the  additional  reserve  requirements
 according to its impact on the balance of our demand,  savings and time deposits as a
whole. Our balance of demand,  savings and time deposits reserve  requirement  increased
to R$2,021 million as of December 31, 2002, due to the additional reserve  requirements.
 See Item 5:  Operating  and  Financial  Review and  Prospects  Effects of  Government
Regulation  on  our  Financial   Condition  and  Results  of  Operations    Reserve  and
 Compulsory   Deposit Requirements.

On January,  2003, the
Central Bank increased the reserve  requirement for demand deposits from 45% to 60%.

Historically,  the
 Central  Bank has used  reserve and  compulsory  deposit  requirements  to control
liquidity  as  part  of  monetary  policy.  An  increase  in  these  requirements,  or
 the  imposition  of new requirements,  could have a material  adverse  effect on us
because  the  monies  held as  compulsory  deposits generally do not yield the same
return as our other investments and deposits since:

- a portion of our compulsory deposits do not bear interest;
- we are obligated to hold some of our compulsory deposits in
Brazilian government securities; and
- we must use a portion of the deposits to finance both a federal
housing program and the rural sector.

Changes in tax regulation
may negatively affect our operations

To support its fiscal
 policies,  the federal  government  regularly  enacts  reforms to tax and other
assessment  regimes  which  affect  us  and  our  customers.  Such  reforms  include
 changes  in the  rate  of assessments  and,  occasionally,  enactment  of  temporary
 taxes,  the  proceeds  of which are  earmarked  for designated  governmental  purposes.
 The  effects of these  changes  and any other  changes  that  result  from enactment of
 additional  tax reforms have not been,  and cannot be,  quantified  and there can be no
assurance that these reforms will not, once  implemented,  have an adverse  effect upon
our business.  Furthermore,  such changes have produced  uncertainty in the financial
system,  increased the cost of borrowing and contributed to the increase in our
non-performing loan portfolio.

Changes in base  interest
 rates by the Central  Bank could  adversely  affect our results of          operations
and profitability

The Central Bank
 establishes  the base  interest  rate for the  Brazilian  banking  system,  and uses
changes in this rate as an  instrument  for managing  the  Brazilian  economy.  The base
 interest  rate is the benchmark  interest rate payable to holders of securities  issued
by the federal  government  and traded at the Sistema  Especial de Liquidação e Custódia  SELIC
 (Special  System for  Settlement  and  Custody).  In recent years, the base interest
rate has fluctuated,  reaching  approximately  45% in March 1999 and falling to 15.25% as
of January 17, 2001.  Because of economic  uncertainties,  the Central Bank increased the
base interest rate to 16.25% on April 18,  2001 and  subsequently  revised it upwards  in
 several  steps to 19% on July 18,  2001 where this rate remained  until the Central Bank
 decreased it to 18.75% on February 20, 2002, and to 18.50% on March 20,  2002.  In
February,  March and July 2002 the Central Bank  repeatedly  decreased  the base
 interest rate,  to a level of 18% as of July 17,  2002.  The Central Bank  reversed
 this trend by  increasing  the base interest  rate from 18% to 21% on October 14, 2002
and  increasing  it further to 22% on November  20, 2002 and to 25% on December 18, 2002,
reaching a high of 26.5% in February 19, 2003.

Although  typically  it
enables us to increase  margins,  increases  in the base  interest  rate could adversely
 affect  our  results  of  operations,  among  other  ways,  by  reducing  demand  for
our credit and investment  products,  increasing our cost of funds and increasing the
risk of customer  default.  Decreases in the base interest rate could  adversely  affect
our results of operations,  among other ways, by decreasing the interest income we earn
on our interest-earning assets and lowering margins.

The  increasingly
 competitive  environment in the Brazilian  financial  services  market may
         negatively affect our business prospects

We  face  significant
 competition  in all of our  principal  areas  of  operation  from  other  large
Brazilian and international banks and insurance  companies,  public and private.
 Brazilian  regulations impose very limited barriers to market entry and do not  differentiate
 between  local or foreign  commercial  and  investment banks and insurance  companies.
 As a result, the presence of foreign banks and insurance  companies in Brazil, some of
which have greater  resources than we do, has grown and  competition  both in the banking
and insurance sectors  generally and in markets for specific  products has  increased.
 The  privatization  of publicly owned banks has also made the Brazilian markets for
banking and other financial services more competitive.

The increased  competition
 may negatively  affect our business  results and prospects by, among other things:

- limiting our ability to increase our client base and expand our
operations;
- reducing our profit  margins on the  banking,  insurance,
 leasing and other  services and products we               offer; and
- increasing competition for investment opportunities.

Furthermore,  additional
 state-owned  banks and insurance  companies may be privatized in the future. The
 acquisition  of a bank  or  insurance  company  in a  privatization  process  or
 otherwise  by one of our competitors  would  generally  add to the  acquirors  market
 share,  and as a result  we may  face  increased competition  from the acquiror.
 Recently  Banco Itaú bought Banco  BBA-Creditanstalt  S.A., a wholesale  bank, and we
expect their merged  businesses to be significant  competition in the wholesale  sector.
 On January 13, 2003 Banco Bradesco S.A.  announced an agreement to acquire 99.99% of
Banco Bilbao Vizcaya  Argentaria  Brasil, S.A.  which it expects will expand its
 industrial  and  commercial  activities.  In April,  2003 ABN AMRO Bank announced  the
 acquisition  of 95% of Banco  Sudameris.  We expect that this  acquisition  will
 increase  the competition in the retail sector.

Risks Relating to Unibanco

The quality of our loan
portfolio may suffer due to a decline in Brazilian or  international  economic
         conditions

As of December 31, 2002,
our loan  portfolio was R$25,254  million,  compared to R$23,912  million as of December
 31,  2001.  Our  allowance  for loan losses was R$1,389  million,  representing  5.5% of
our total loans  portfolio as of December 31, 2002  compared to R$ 1,276  million,
 representing  5.3% of our total loans portfolio  as of  December  31,  2001.  See  Item
4.  Information  on the  Company  Risk  Management   Loan Provisioning  and Item 5.
 Operating  and Financial  Review and  Prospects  Results of  Operations  for Year Ended
December 31, 2002 Compared to Year Ended December 31, 2001.

We believe that our loan
loss  allowance  policy is adequate with respect to our  portfolio.  However, the quality
of our loan  portfolio  is subject to changes due to the  acquisitions  we make and is
dependent on domestic  and, to a lesser  extent,  international  economic  conditions.
 Our  acquisition  of  Fininvest  has affected  the quality of our loan  portfolio  by
 significantly  increasing  our  exposure to the lower  income segment  of the  retail
 market.  This  segment  generally  features a higher  volume of  transactions,  higher
margins and higher  default  rates than other  segments.  In  addition,  our  acquisition
 of a 50% interest in Investcred and in LuizaCred  increases our exposure to consumer
finance  customers,  who are traditionally from the lower income segment of the retail
market.  Adverse  changes  affecting any of the sectors to which we have significant
 lending  exposure,  political  events within and external to Brazil or the variability
of economic activity may have an adverse  impact on us.  Accordingly,  our historic loan
loss  experience  may not indicate future loss experience.

Our  securities  portfolio
is subject to market  fluctuations  due to changes in Brazilian or          international
economic conditions

Marketable  securities
 represent a material portion of our assets, and realized  investment gains and losses
have had and will  continue to have a  significant  impact on our results of  operations.
 The  amounts, which we record when  investments  in  securities  are sold or are marked
to market on all trading  securities, may  fluctuate  considerably  from period to
period.  The level of  fluctuation  depends,  primarily,  upon the market value of the
securities,  which in turn may vary considerably,  and our investment  policies.  We
cannot predict the amount of realized  gains or losses for any future  period,  and
 variations  from period to period have  no  practical  analytical  value  in  helping
 us to make  such a  prediction.  Gains  or  losses  on our investment  portfolio may not
continue to contribute to net income at levels  consistent with recent periods or at all,
and we may not  successfully  realize the appreciation or depreciation now existing in
our consolidated investment portfolio or any portion thereof.

Integration of businesses
in future acquisitions may increase our risks

In April 2000 we acquired
 Credibanco and in December 2000 we acquired Banco  Bandeirantes and the remaining 50% of
Fininvest we did not already own. These  transactions  resulted in the  acquisition of
aggregate loan assets of  approximately  R$3.0  billion and a total of  approximately
 3.7 million  new  customers.  We may engage in further acquisitions,  as we seek to
continue our growth in the consolidating  Brazilian financial services  industry.  The
 integration  of the  businesses we have  recently  acquired and may acquire in the
future entails significant risks, including the risks that:

- integrating new branch networks,  information systems,
personnel,  products and customer bases into                   our  existing  business
 may  place  unexpectedly   significant   demands  on  our  senior
                  management, information systems, back office operations and marketing
resources;
- our current  information  systems may be incompatible with the
information systems of the companies                   we acquire,  with the result that
we may be unable to integrate the acquired  systems at a                   reasonable
cost or in a timely manner;
- we may lose key employees and customers of the acquired
businesses;
- we may incur unexpected liabilities or contingencies relating
to the acquired businesses; and
- delays in the integration  process may cause us to incur
greater  operating  expenses than expected                   with respect to our acquired
businesses.

Risks Relating to the Global Depositary Shares and Units

Cancellation
 of Global  Depositary  Shares in exchange  for Units could  adversely  affect the public
         market and value of Global Depositary Shares and impose further restrictions on
Unit Holders

Under
the Global Depositary  Shares, or GDS Program,  GDS holders are entitled to cancel their
GDS and receive the underlying Units in Brazil.  In this case:

- if a  significant  number of GDSs are  cancelled,  the  public
 market  and  prices  for GDSs could be               adversely affected.
- the Units will be traded in the Brazilian  securities market.
 Therefore,  investors who choose to cancel               their  GDSs will be exposed to
higher  risks  than they would be in the U.S.  securities  market,
              especially with respect to liquidity of the Units and volatility of the
securities market; and
- the proceeds and gains related to the Units are earned by their
holders in Brazil.  Foreign  investors               may not be able to remit
the proceeds of the Units to investors outside Brazil (see  Restrictions on Overseas Remittances
could adversely affect Holders of Units and GDSs).

Cancellation of Units may
adversely affect the public market and value of Units and GDSs

Under Brazilian law, our
by-laws and the by-laws of Unibanco  Holdings,  holders of Units are entitled to present
their Units to us in Brazil for  cancellation and receive the underlying  Unibanco
 Holdings Class B Preferred  Shares and our preferred  shares.  If holders of Units were
to cancel a significant  number of Units and obtain  the  underlying  shares,  the
 public  market and prices for Units and the GDSs could be  adversely affected.

Restrictions on Overseas
Remittances could adversely affect Holders of Units and GDSs

Brazilian  law  provides
 that,  whenever  there is a  significant  imbalance  in Brazils  balance of payments or
reasons to foresee such an imbalance,  the Brazilian  Government may impose temporary
 restrictions on the  remittance  to  foreign  investors  of the  proceeds  of  their
 investment  in  Brazil,  as it did for approximately  six months in 1989 and early 1990,
 and on the  conversion  of Brazilian  currency  into foreign currencies.  In addition,
 the Brazilian government may impose temporary taxation on any overseas remittance of up
to 50% of  its  value.  Such  restrictions  could  hinder  or  prevent  foreign
 investors  from  converting dividends,  distributions  or the proceeds  from any sale of
Units into U.S.  dollars and  remitting  such U.S. dollars  abroad.  Holders of Units and
GDSs who  outside of Brazil could be adversely  affected by delays in, or refusals
to grant, any required  governmental  approvals for conversion of Brazilian  currency
 payments and remittances abroad in respect of the Units and GDSs.

Absence of Voting Rights
for the Units

In  accordance  with
 Brazilian  Corporation  Law,  our by-laws and the by-laws of Unibanco  Holdings, holders
of our  preferred  shares and  Unibanco  Holdings  Preferred  Shares have no voting
 rights  except in certain limited  circumstances;  therefore holders of Units,  except
in those cases, are generally not entitled to vote either at meetings of our shareholders
or at meetings of Unibanco Holdings shareholders.

Shares Eligible for Future
Sale may adversely affect the market value of our Units and GDSs

Certain  of our  principal
 shareholders  and of  Unibanco  Holdings  have  the  ability,  subject  to applicable
 Brazilian laws and regulations and applicable  securities  laws in the relevant
 jurisdictions,  to sell our preferred  shares,  Unibanco Holdings Common Shares and
Class A Preferred Shares. No prediction can be made as to the effect,  if any, that
future sales of the shares  represented by Units,  or the  availability of such  shares
 for  future  sales,  will have on the  market  prices of the  Units  and  GDSs.  Future
 sales of substantial  amounts of such shares, or the perception that such sales could
occur,  could adversely affect the market prices of the Units and GDSs.

Limitations on Exercise of
Preemptive Rights to Foreign Shareholders

Under  Brazilian
 Corporation  Law, except in the case of shares offered through a stock exchange or a
public offering,  a Brazilian company must offer its shareholders  preemptive  rights to
purchase,  by means of capital  subscription  in a private  placement,  a  sufficient
 number of shares  to  maintain  their  existing ownership  percentages  prior to the
offering and issuance of any new shares.  However,  the  participation  of foreign
investors in the capital of financial  institutions is subject to prior  authorization by
the Brazilian Government,  except for  participation in non-voting  capital,  once a
general  authorization  has already been granted  for  this  purpose.  Therefore,  in the
 event  voting  securities  are  being  offered,  our  foreign shareholders  could be
prevented from exercising their preemptive  rights.  In addition,  foreign  shareholders
may not be able to exercise  preemptive  rights with respect to our preferred shares or
Unibanco Holdings class B preferred  shares  represented by the Units,  or with respect
to any  securities  issued by us or by Unibanco Holdings as to which the holders of Units
have  preemptive  rights unless a  registration  statement  under the Securities  Act is
 effective  with  respect to the shares  relating  to such rights or an  exemption  from
the registration  requirements thereunder is available.  Unibanco Holdings and we are
under no obligation to file a registration  statement  with respect to such  preemptive
 rights and there can be no assurance  that  Unibanco Holdings or we will file any such
registration statement.

ITEM 4. INFORMATION ON THE COMPANY

OVERVIEW

Unibanco

Founded in 1924, Unibanco is
Brazils oldest private sector bank. From our longstanding position as one of the
nations leading wholesale banks, we have expanded our operations to become a full
service financial institution providing a wide range of financial products and services to
a diversified individual and corporate customer base throughout Brazil. Our businesses now
comprise Retail Banking, Wholesale Banking, Insurance and Wealth Management.

We are one of the largest private
sector financial institutions in Brazil and have grown substantially, both
through organic growth and acquisitions, since 1995.

As of December 31, 2002, on a consolidated basis, we had:

- R$72.0 billion in total assets;
- R$25.3 billion in loans;
- R$26.1 billion in total deposits; and
- R$6.2 billion in stockholders' equity.

Under Brazilian Corporate Law we are
the third largest private sector bank in Brazil in terms of assets, loans, deposits and
stockholders equity, according to the Central Bank.

Our consolidated net income for the
year ended December 31, 2002 was R$803 million, representing a return on average equity of
13.2% and a return on average assets of 1.3%.

Unibanco's equity securities have been publicly traded on the
São Paulo Stock Exchange (Bovespa) since 1968. In 1997, we became the first
Brazilian bank to list its equity securities on the New York Stock Exchange. As of
December 31, 2002, the total market value of our equity securities, based on the closing
price of our global depositary shares, was R$5,360 million.

Our Businesses

We have four core businesses:

Retail Banking

Through our Retail Banking business
we provide a wide variety of credit and non-credit products and services to individuals of
all income brackets and to companies with annual revenues up to R$40 million. We offer
traditional deposit, investment and credit products, and have developed a strong presence
in the consumer finance sector through our subsidiary Fininvest, our affiliate Banco
Dibens, and through our strategic partnership with Magazine Luiza, LuizaCred and our
strategic alliance with Ponto Frio, InvestCred. As of December 31, 2002 we had 5.6 million
retail banking customers and 7.6 million consumer finance customers. We believe we are
also one of Brazils largest credit card issuers in terms of cards issued, primarily
through our subsidiaries Fininvest and Credibanco, and our affiliate Credicard. Our loan
portfolio in Retail Banking (including insurance) was R$9.4 billion as of
December 31, 2002. In the first quarter of 2002 we transferred our annuities business from
Insurance to Retail Banking. This change was intended to achieve greater strategic
alignment within our business areas, as well as enhanced synergies and cost-effectiveness.
Our net income from Retail Banking was R$456 million in 2002.

Wholesale Banking

Through our market-leading Wholesale
Banking business we provide approximately 300 institutional investors and 2,700 large- and
middle-size companies with a broad array of products and services, including: general and
specialized corporate lending; capital markets and investment banking services; cash
management and payroll services; investment and brokerage services; project finance; and
mergers and acquisitions advice. Our loan portfolio in Wholesale Banking (including
private banking) was R$15.9 billion as of December 31, 2002. Our net income from
Wholesale Banking was R$149 million in 2002.

Insurance

In our Insurance business, we provide
insurance and pension plans, and related products and services, primarily through our
joint venture with AIG. According to December 2002 data released by the
Superintendência de Seguros Privados  SUSEP (Private Insurance Regulatory
Body), Agência  Nacional de Saúde  Suplementar  - ANS (National  Health  Agency) and
Associação  Nacional de Planos de
Previdência Privada - ANAPP (National Association of Private Pension Plans)
Unibancos insurance and pension fund companies, on a consolidated basis,
ranked fourth with a 6.3% market share (in terms of gross premiums written and pension
plans billings), regarding insurance and supplementary pension plans.

Unibanco AIG Seguros S.A.
(UASEG), owned jointly by Unibanco and AIG and controlled by Unibanco, provides
life, auto, health, property and casualty insurance coverage, as well as pensions and
retirement plans, to individuals and businesses. As part of the joint venture, we also
hold approximately 50% equity interests in several of AIGs Brazilian insurance
affiliates, which we refer to as the AIG Brasil companies. On a combined basis, UASEG and
the AIG Brasil companies were Brazils fifth largest insurance provider in
2002 in terms of gross premiums written, according to SUSEP. Our net income from Insurance was R$92
million in 2002.

Total insurance premiums and private
retirement plans billings (including premiums of UASEG and the AIG Brasil companies on a
combined basis under Brazilian corporate law) were R$2.5 billion for the year ended
December 31, 2002.

Wealth Management

In March 2002, we combined our private banking and asset management businesses
into a division we call Wealth Management. We conduct our asset management business primarily through
our subsidiary Unibanco Asset Management (UAM). UAM offers fixed income and equity mutual funds
to individual customers, and manages portfolios on behalf of corporations, pension funds and private banking
clients. The Wealth Management division coordinates the activities of UAM and Unibanco Private Bank.

We believe this revamped structure is better suited to explore natural synergies between the two
areas and promote better client service in these segments. Its focus is on investment
advice and the offer of various products and services, covering financial and
non-financial needs of clients throughout the wealth cycle, from wealth accumulation and
growth through capital preservation. UAM, dedicated to the administration of individual
and corporate financial assets, had R$18.4 billion in assets under
management as of December 31, 2002. Private Banking had R$10 billion in funds under management as of
December 31, 2002. Our net income from Wealth Management was R$106 million in 2002.

As of December 31, 2002, on a
consolidated basis, we had approximately:

- 5.6 million total retail banking customers;
- 7.6 million total consumer finance customers;
- 1,100 large corporate customers;
- 1,600 middle market corporate customers;
- 300 institutional investors;
- 4,600 private banking clients;
- 798 retail branches located in all major urban areas of Brazil;
- 442 corporate-site branches;
- 108 Fininvest branches;
- 74 in-store branches, a concept introduced in Brazil by
Unibanco;
- 6,992 ATMs;
- 900,000 customers using Internet banking services;
- 14.7 million credit card accounts (including private label
cards issued by Fininvest);
- more than 500,000 insurance policyholders (including UASEG and
the AIG Brasil companies on a combined basis); and
- 91,275,000 calls received by our call center in the full year
of 2002.

As of December 31, 2002 our
subsidiaries and affiliates held the following positions in the Brazilian financial
services market:

- largest aggregate number of credit cards issued in Brazil,
based on our estimates combining the portfolios of Credibanco  Cartão
Unibanco, Fininvest and our interest in Credicard;
- largest independent consumer finance company in terms of
credits (Fininvest) based on our estimates;
- second largest private sector pension fund manager in terms of
assets under management (UAM), according to ANBID;
- fourth largest private sector provider of retirement plans in
terms of technical (or statutorily)  required reserves (Prever),          according to
ANAPP;
- top  position in the fire  insurance  ranking,  according  to
the latest  industry  data,  released by SUSEP in December  2002 (UASEG);
- second largest private pension plans in terms of consolidated
 corporate sales in December 2002 (Unibanco AIG Previdência S.A.          ("Prever")),
according to ANAPP; and
- fifth largest insurance company in terms of gross premiums
written, according to SUSEP and ANS (UASEG and the AIG Brasil companies on a combined
basis).

The following diagram shows our
principal lines of business as well as certain information for each of these business
lines at and for the twelve months ended December 31, 2002.

Unibanco Holdings

Unibanco Holdings controls Unibanco through
its ownership, as of May 30, 2003, of 96.6% of our outstanding common shares and 16.2% of
our outstanding preferred shares, representing 59.0% of total economic ownership in all
classes of our issued capital stock. Unibanco Holdings assets consist exclusively of
its equity interest in Unibanco. Unibanco Holdings does not intend, on a permanent
basis, to conduct any activity other than holding shares in Unibanco.

HISTORY AND DEVELOPMENT
OF THE COMPANY

Each of Unibanco  União
de Bancos Brasileiros S.A. and Unibanco Holdings S.A. are corporations organized pursuant
to Brazilian Corporate Law (Lei das S.A.) and have an indeterminate duration.
Unibanco, which was formed as a result of the merger of Banco Moreira Salles S.A. and
Banco Agrícola Mercantil S.A., was incorporated in 1967 and Unibanco Holdings was
incorporated in 1994. Banco Moreira Salles S.A. began its banking business in 1924. The
registered offices of both Unibanco and Unibanco Holdings are located in São Paulo,
at Avenida Eusébio Matoso 891, SP-05423-901, Brazil, tel +55 11 3097 1313.

Consolidating Our
Competitive Position

We have built our competitive
position in the Brazilian financial services market through consistent organic growth and
carefully chosen strategic transactions. We believe that each of our four business areas
provides a solid platform for carefully managed future growth. Over the past three years,
in particular, we have significantly increased our scale by combining several strategic
acquisitions and alliances with an ongoing commitment to organic growth.

Traditional Retail and
Wholesale Banking

Banco Bandeirantes

In December 2000 we acquired Banco
Bandeirantes S.A., a São Paulo-based retail bank. Banco Bandeirantes brought Unibanco
assets of R$4.7 billion, under Brazilian Corporate Law, and furthered our strategy of
adding scale to our Retail Banking operations. The acquisition expanded our retail
customer base by 22%, increased our number of small business customers by 23%, and
strengthened our presence in key cities. For example, following the acquisition, 9% of
Unibancos branch network is located in northeastern Brazil, compared to 3% before
the acquisition.

Credibanco

In April 2000 we acquired Credibanco,
a small wholesale bank, that brought Unibanco R$1.8 billion in assets, under Brazilian Corporate
Law. Our purchase of Credibanco was an opportunistic acquisition in keeping with our
strategic goal of maintaining leading market positions in each of our Wholesale Banking
segments. In particular, the acquisition bolstered our project finance and BNDES
onlendings portfolio and staff expertise in the large corporate segment.

Investshop

In December 2001 Banco1.net entered
into a strategic alliance with Investshop Corretora de Títulos e Valores
Mobiliários, or Investshop, Brazils largest provider of financial services
through the Internet. As a result of this strategic alliance, Banco1.net account holders
started to have greater access to Investshop investment products. The integration of the
operational structures was concluded in April 2002. At the conclusion of this integration,
Bancol.net became the holder of 100% of the capital of Investshop and Investshop
Participações S.A., Investshops parent acquired an 8% participation
interest in Bancol.net. This strategic alliance expanded our presence in on-line banking.
We presently have a 55% interest in Bancol.net, Portugal Telecom has 27%, Investshop
Brazil has 8% and third party investors have 10%.

Consumer Finance

We have made a concentrated move into
the consumer finance sector, which we believe is one of the most rapidly growing segments
of the Brazilian retail financial services market. Achieving a strong presence in consumer
finance is central to our strategy of expanding scale in our retail business by reaching
into the lower income segment of the market, which generally features a higher volume of
transactions and higher spreads. Our participation in the consumer finance market is
designed to produce an immediate source of consumer lending activity and, as the Brazilian
economy grows, an eventual source of new retail banking customers.

Fininvest

In December 2000 we acquired the
remaining 50% of Fininvest that we did not already own. We believe that Fininvest is the
leading consumer credit company in Brazil servicing lower income individuals in terms of outstanding
credits.

Ponto Frio/InvestCred

In August, 2001 we announced a
strategic alliance with Globex S.A., the owner of the nationwide chain of Ponto Frio
household appliance stores. Pursuant to this transaction, we purchased a 50% interest in
Globexs subsidiary InvestCred, which provides consumer finance to Ponto Frios
customers.

Magazine Luiza/LuizaCred

In September, 2001 Fininvest
established a strategic partnership with Magazine Luiza, a well-known Brazilian chain of
department stores geographically well positioned in São Paulo state, western
Paraná state and southern Minas Gerais state. These three states combined
represent 49.3% of Brazils GDP according to IBGE (Brazilian Geography and Statistics
Institute). The partnership created a new company, LuizaCred, to provide financing to
Magazine Luiza customers.

Ford Credit Brazil

In January 2002 Unibanco-Rodobens,
our lay-away finance arm, and Ford Credit Brazil established a joint venture for the sale
of cars and the management of groups of the National Ford Consortium, a system for
financing goods on an instalment plan basis. Through this joint venture we intend to
increase our presence in the car finance sector.

Wealth Management

Unicorp

In April, 2002, the Brazilian Central
Bank approved the acquisition by our subsidiary, Unipart Participações Internacionais Ltd.,
of the remaining 24.5% that we did not already own, of the
total share capital of Unicorp Bank & Trust Ltd. (Unicorp), for US$36 million.
As a result of this transaction, Unibanco increased its shareholding in Unicorp to 100% of
Unicorps capital.

Organic Growth

In addition to engaging in strategic
transactions, we have maintained our historic focus on achieving organic growth. In
October 2000 we launched our ContAtiva initiative, which markets Unibancos retail
banking services to individuals with monthly income above R$1,000, who fit our traditional
retail banking customer profile. The initial goal of the ContAtiva program was to add 1.8
million new accounts by the end of 2003. We achieved this target in February 2003, well
ahead of schedule. Following the initial ContAtiva program, we launched ContAtiva2, aimed at attracting 3.6 million
new accounts over the coming five years.

BUSINESS STRATEGY

Guiding Principles

Our objective is to maintain and
enhance our position in the Brazilian market as a leading full service financial
institution. To achieve this objective, we have developed strategies tailored to each of
our business areas based on the Balanced Scorecard Methodology, which is designed to
translate strategy into operational terms. These specific business strategies in turn
reflect three institution-wide guiding principles: a commitment to maintaining competitive
scale; ongoing cost control; and the determination to attract and develop the skills of
potential top quality employees.

Commitment to Maintaining
Competitive Scale

The financial services market in
Brazil has been undergoing a period of consolidation. We believe that to maintain
competitive scale we must grow our customer base and expand our product and service
offerings in each of our core businesses. As described above, we seek to do this through
organic growth, acquisitions and strategic alliances.

Ongoing Cost Control

We realize that vigilant cost control
is essential to maintaining and improving our profitability. We conduct regular internal
reviews of our cost structure, and since 1995 have engaged in several reengineering
programs designed to increase our operating efficiency. These programs have related to
both ongoing operations and the integration of acquired businesses.

In 2001 we concluded our
Projeto 2000 e Único, a two-year initiative which enhanced
productivity, cut expenses and boosted fee income. The integration of Banco Bandeirantes
in 2001 achieved 42% annualized cost savings in the former Banco Bandeirantes operations,
above our original estimate of 35%. Since then, we have turned our attention to analyzing
and improving our firm-wide cost structure, as well as focusing on the maintenance of high
quality service levels. At the end of the fourth quarter of 2001 we established a program
to achieve additional cost savings and efficiency gains, managed by a dedicated team of senior executives of
the Unibanco financial group.

The first measures implemented as a
result of this new process were the combination of our Private Banking business and
Unibanco Asset Management in a new business area called Wealth Management, and the
transfer of our annuities business from Insurance to Retail Banking. This realignment of
business areas took effect in the second quarter of 2002. In addition, we have begun to
integrate the back office operations of Unibanco, Credibanco  Cartão Unibanco
and Fininvest, a process we expect to complete in 2003.

We also strive to reduce costs by
broadening our array of distribution channels for our products and services and by
enhancing our distribution network through the early adoption of cost-saving technologies.
We view this approach as especially important in Retail Banking, where our initiatives
include the installation of numerous 30 Hours automated service locations,
Internet banking initiatives, the expansion of our credit card business, and the
establishment of strategic alliances with nationally known retail stores. We believe the
implementation of technological advances improves our cost structure by minimizing the
number of transactions that take place in our traditional branch network, while at the
same time responding to our customers evolving needs. Technology is also important
to controlling costs in the customer service and back office functions that support our
distribution efforts.

Attracting and Developing
the Skills of Potential Top Quality Employees

We need highly qualified,
well-trained employees in order to compete successfully. The emphasis we place on employee
talent is reflected in the fact that since 1997 our human resources department, called
Unibanco Pessoas (Unibanco People), has reported directly to our board of directors.
Over the last five years, we have
introduced increasingly demanding hiring standards and have implemented a variety of tools
that identify and measure employee potential, performance and individual contribution to
the companys strategy, and that enable Unibanco to create professional development
programs. We believe our commitment to hiring and developing talented employees has
fostered a high quality work environment that has engendered a high degree of employee
satisfaction. In each year since 1997, we have commissioned an independent survey of our
employees. As measured by this survey, employee satisfaction has increased each year, from
69% in 1997 to 87% in 2002, bringing Unibanco into line with international benchmarks.

Retail Banking Strategy

Achieve Scale Through
Organic Growth and Strategic Transactions

We believe that our ability to
maintain our position as a leading full service Brazilian financial institution depends in
part on maintaining scale in our retail business. Our retail banking customer base grew
from 3.0 million in 1997 to 5.6 million in December 2002. We have emphasised scale
through organic growth initiatives such as our ContAtiva program described above. In
addition, we have identified locations for new points of sale in either high growth or
higher income areas, as well as several new cross-selling opportunities through our
subsidiaries and strategic partners.

Our strategy to increase scale has
also featured carefully chosen acquisitions and strategic alliances. Our December 2000
purchase of Banco Bandeirantes added over 700,000 retail clients to our total. Our
partnerships with retail chains Ponto Frio and Magazine Luiza comprise 473 new outlets
with particular access to lower middle-income consumers, whom we view as the retail market
segment with the greatest growth potential in terms of future demand for financial
products. Through our consumer finance brands Fininvest, InvestCred (Ponto Frio) and
LuizaCred (Magazine Luiza) we currently have a customer base of 7.6 million individuals,
and have obtained an opportunity to cross-market our retail banking products.

Develop a Lower Cost
Funding Mix by Growing Retail Banking Deposits

Our net interest income in Retail
Banking is partly a function of our cost of funds. Deposits relating to savings and
checking accounts are generally our least expensive source of funds. We intend to increase
the relative proportion of such deposits in our funding mix, in particular by marketing
these retail banking products to our growing customer base. As of December 31, 2002,
deposits relating to savings and checking accounts (core deposits) totalled R$6.9
billion in the retail banking portfolio, increasing 14% over the prior year. Unibanco
also improved its core deposits to total loans ratio in the retail sector from 66% as of
December 31, 2001 to 76% as of December 31, 2002. Total retail deposits increased by 27%,
as of December 31, 2002 compared to December
31, 2001, whereas the credit portfolio remained fairly stable.

Increase Average Number
of Products Per Client

We view scale not only in terms of
the size of our customer base, but also as a function of the number of products we are
able to sell per customer. Since it is generally less expensive to sell an additional
product to an existing customer than to acquire a new customer, improving our
product per client ratio has a positive impact on profitability. We believe that
continually developing and marketing tailored, innovative products to serve the needs of
specifically identified customer segments increases our ability to sell multiple products
per client. As of March 31, 1997, we had an average of 2.6 products outstanding per
client. This figure increased to 5.7 as of December 31, 2002. Our segmented approach to
product development and marketing has proved especially successful in our premier
Uni Class retail banking segment, where our product per client average was 6.8
as of December 31, 2002. We believe that our success in increasing our products per client
ratio has been, and in the future will continue to be, attributable in large part to our
Customer Relationship Management system, implemented by Unibanco over the past few years.
In early 2002, the concept of client DNA was introduced. Based on income-spending habits,
clients have been classified into 32 groups, or DNAs. This tool stands out for its
simplicity and analytical potential, permitting sophisticated person-to-person marketing
strategies, optimizing costs and correcting occasional pricing flaws.

Wholesale Banking Strategy

Maintain and Enhance Our
Leading Market Position in Brazilian Wholesale Banking

Our market-leading Wholesale Banking
business is strategically important to Unibanco not only because it has historically been
profitable but also because it has provided the financial and business platform from which
many of our other activities have evolved. We intend to differentiate ourselves from our
competitors and maintain our preeminence in the Brazilian Wholesale Banking market by:
preserving the financial capacity to be a reliable source of credit to our business
customers; further developing our leading position in the Brazilian debt and equity
capital markets; and emphasising our knowledge of and long-term commitment to the
Brazilian market generally. Among other indicators of our market leadership, as a
financial agent in the BNDES onlending segment, Unibanco disbursed R$1.3 billion in 2002,
with an 8.5% market share and ranked first among private sector banks in disbursements; in
Debt Capital Markets, Unibanco maintained its number one ranking, both in terms of
origination and distribution of securities. Unibanco also had the top position among
Brazilian banks in the Thomson Financial ranking in Mergers and Acquisitions.

Insurance Strategy

Focus on Offering High
Profitability Insurance Products

We believe that Brazilian economic
growth will present opportunities for the countrys insurance industry, as
Brazilians spending on insurance products currently lags that of many other
countries. We intend to take advantage of this growing market by using our sophisticated
product development capability to focus our insurance offerings on value-added products
that are more profitable than the relatively commoditised, market-standard product ranges
featured by many of our competitors. We believe that our Insurance business has the best
mix of products among the five largest insurers in Brazil. We also believe we are the
leader in the market for extended warranty insurance on consumer goods. In developing
insurance products for corporate clients, we have achieved leading market positions in a
variety of specialized areas, including fire, directors and officers (D&O), insurance
and coverage products for the petrochemical, engineering risks, aviation and marine
sectors. Our focus on developing and offering value-added insurance products is supported
by our joint venture with AIG, which gives Unibanco access to AIGs demonstrated expertise
in product development and reinsurance, as well as a valuable brand name.

Enhance Profitability in
Our Insurance Business through Cost Control and Underwriting Expertise

The profitability of our Insurance
business depends in part on our ability to minimize expenses and losses. We have taken
significant steps to reduce expenses in our Insurance operations, including in 2001 the
merger of several of the AIG Brasil companies, and the introduction of an Internet portal
to communicate with our brokerage force. Our effectiveness at controlling costs and making
sound underwriting decisions is reflected in our consolidated combined ratio, under
Brazilian Corporate Law, which for the year ended December 31, 2002 was 99.8%, compared to
107.2% for the Brazilian insurance industry as a whole, according to
SUSEP and ANS, the regulatory agencies for insurance, pension and health business. This
effectiveness is also reflected in a 2.6% reduction in administrative expenses when
compared to 2001 figures; total administrative expenses in 2002 represented 10.6% of
premiums written, compared to 13.8% in the previous year.

Wealth Management Strategy

Further Develop the
Strong Market Position of Unibanco Wealth Management

The Wealth Management divisions
focus is on investment advice and offering different products and services, covering
financial and non-financial needs of clients throughout the wealth cycle, from wealth
accumulation and growth through capital preservation. We seek to further develop our Asset
Management business and Private Banking by offering tailored and value-added products to
our corporate and institutional customers and by launching innovative products for private
banking clients and some Uni Class customers and a specialized financial advisory service.
For retail customers, we have developed a variety of fixed income and equity retail mutual
funds. Unibanco Asset Management is currently Brazils second largest private sector
pension fund manager, with a 9.4% market share as of December 31, 2002, according to
ANBID.

PRINCIPAL BUSINESS
ACTIVITIES

Retail Banking

Overview

Our Retail Banking business serves
individuals (excluding private banking customers) and companies with annual sales up to
R$40 million. Both individual and companies are segmented according to income. We have
segmented our retail customer base to enable Unibanco to offer differentiated products and
services to our clients, which has enhanced our competitiveness in the market. While we
traditionally have focused on the middle and upper income segments, we have begun to
market services to lower-income individuals. We believe this market segment will be a
significant source of future growth in our retail business. Those lower income individuals
are served through our consumer finance businesses, including Fininvest, InvestCred and
LuizaCred.

As of December 31, 2002, we had 5.6
million customers, comprising current accounts, savings account clients and retirees, an
8% increase compared to 5.2 million as of December 31, 2001. Including 3.5 million
customers from Fininvest, 1.1 million customers from LuizaCred and 3.0 million customers
from InvestCred, we had a total of 13.2 million retail customers as of December 31, 2002.
We also use our retail banking operations as a distribution channel for products and
services developed by our non-banking subsidiaries and affiliates  for example,
mutual funds and automobile and life insurance products.

The following table sets forth
information about Unibancos retail banking customer segments as of December 31, 2002
(excluding customers of Fininvest, InvestCred and LuizaCred).

|Segmentation       | Total Customers
|------------------ | ---------------
|                   |                
|Uni Class(1)(6)    | 445,369        
|Exclusivo(2)(6)    | 2,418,850      
|Especial(3)(6)     | 639,949        
|Small Companies(4) | 434,627        
|Savings Accounts   | 662,774        
|Retirees(5)        | 1,028,750      
|                   |                
|Total              | 5,630,319      
|                   |                

|_____ | ____________                                                                                            
|----- | --------------------------------------------------------------------------------------------------------
|(1)   | Individuals with monthly income of R$4,000 or greater.                                                  
|(2)   | Individuals with monthly income between R$1,300 and R$4,000.                                            
|(3)   | Individuals with monthly income between R$350 and R$1,300.                                              
|(4)   | Corporate customers with annual sales up to R$40 million.                                               
|(5)   | Generally lower income individuals who receive their
monthly government pension checks through Unibanco.
|(6)   | Includes Banco1.net.                                                                                    

The ContAtiva Organic
Growth Initiative

One of our objectives in our Retail
Banking business area is to continue to increase scale by adding new accounts. Through our
ContAtiva initiative, launched in October 2000, which targets households with monthly
income of R$1,000 or above, we added approximately 1.8 million new accounts by February
2003, well ahead of our original targeted schedule of the end of 2003. We have recently
launched ContAtiva2, aimed at attracting 3.6 million new accounts over the coming five
years. We have identified locations for new points of sale in either high growth or higher
income areas, as well as several new cross-selling opportunities through our subsidiaries
and strategic partners.

Acquisitions of Banco
Bandeirantes and Fininvest

The December 2000 acquisitions of
Banco Bandeirantes and the remaining 50% interest in Fininvest fit with our strategic
objective of adding scale.

Banco Bandeirantes introduced Unibanco to
700,000 account holders, expanding our client base by approximately 22%, and extended our
distribution network, reinforcing our share of strategic markets, such as São Paulo
and northeastern Brazil. In particular, the acquisition strengthened our presence in
northeastern Brazil where we now have 8% of our branches, compared to 3% before the
acquisition. Banco Bandeirantes customers included a large number of small businesses,
increasing the number of our small business customers by approximately 23%.

As of December 31, 2002,
Fininvest had approximately 3.5 million active accounts, comprised of approximately:
381,000 direct installment borrowers and 2,082,000 holders of private label credit cards; 382,000
holders of Visa and MasterCard credit cards; and 606,000 holders of Fininvest loan cards,
with which customers make installment purchases.

Additionally, as of December 31, 2002
Fininvest had 108 stores. Fininvest opened 6 new stores staffed by Fininvest personnel
during the year 2002.

Fininvest had more than 8,000
in-store presences as of December 31, 2002. These in-store presences (which are special
branches located inside large retailers, such as supermarkets) increase our contact with
potential customers and are therefore important points of sale. Independent Fininvest
branches are important primarily for brand recognition.

Cost-savings Initiatives

Unibanco believes that cost control is a critical condition for competitive
gains. Accordingly, it transformed occasional initiatives into a permanent
activity aimed at enhancing synergies and seeking cost-effectiveness, as well as project
evaluation. At the end of the fourth quarter of 2001 it established a program to achieve additional cost
savings and efficiency gains, managed by a dedicated team of senior executives of the
Unibanco financial group. Every department head contributed ideas to the program
conception, which is expected to result in R$493 million of cost savings, under
Brazilian Corporate Law, on a yearly basis, to be achieved by 2003. By December 31,
2002, we had reached R$300 million of cost savings, on a yearly basis, which
represents 61% of the total targeted amount.

Individuals

We provide our individual customers
with fee-based products and services, including use of ATMs, phone and personal computer
banking and fund transfers. We also make secured and unsecured personal loans in reais
with maturities ranging mostly from one to 36 months for short term overdraft
facilities, loans for consumer purchases, leasing and individual lines of credit.
Individuals are divided into three different segments: those earning more than R$4,000 per
month (Uni Class); those earning from R$1,301 to R$4,000 per month
(Exclusivo); and those earning from R$350 to R$1,300 per month (Especial).

In the Uni Class segment, we
believe we differentiate ourselves from competitors by providing our customers with:

- products and services tailored to the needs of customers from
the economic group comprising this segment;
- a specialized call center which we believe has higher quality
levels than are typical of our competitors call centers including dedicated
customer service representatives at our call center for this segment;
- some specialized branches which service only Uni Class
customers, called Espaço Uni Class; and
- a specialized team of account officers within our extensive
distribution network.

In the Exclusivo segment, we
believe we differentiate ourselves from competitors by providing an enhanced quality of
service to these clients that substantially reduces the time spent completing basic
banking transactions, such as withdrawals and payment of bills, as well as personalised
service inside the branch. In particular, we provide customers of this segment more
convenient banking through access to our 30 Hours services.

In the Especial segment, where
we face greater competition, we focus on retired individuals and employees of companies to
which we provide payroll services. We believe this is a segment with high growth
potential, especially because our existing role as a provider of payroll services should
let Unibanco take advantage of the relationships we have with companies in the wholesale
segment. We have implemented programs to give retired customers enhanced services, such as
personal appointments and pre-approved credit lines. As a result, these individuals, who
might otherwise only go to the bank to withdraw their monthly retirement funds, are now
using other products and services.

Small Companies

We serve approximately 435,000 small
companies, consisting primarily of retailers. For companies with annual sales between
R$500,000 to R$5 million (called Exclusivo), we offer products and services through
branch account officers dedicated to this segment inside our branch network. For companies
with annual sales ranging from R$5 to R$40 million (called Uni Class), which tend
to require customised products and services, we have created a group of account
representatives separated from our branch network.

Our loan portfolio for small
companies consists of loans with maturities of up to 90 days for unsecured loans, such as
overdrafts on checking accounts, six months for working capital loans, and three years for
lease financing. Loans to small companies totalled approximately R$2.3 billion, or
approximately 9% of our total loan portfolio, at December 31, 2002. Our retail
banking business also offers small companies various fee-based services, such as cash
management, payroll and receivables collection.

Distribution Channels

As of December 31, 2002, our retail
network, including the networks of Banco Bandeirantes and Fininvest, had a total of 1,422
points of sale throughout Brazil, including: branches; corporate-site branches, which are
special banking centers located in the premises of our company clients; and in-store
branches, which are special branches located inside large retailers, such as supermarkets.

Since 1991, we have made ongoing
efforts to develop technology-based systems that reduce our customers reliance on
labor-intensive branch transactions. As part of our effort to provide customers with
faster and more efficient modes to complete banking transactions, we introduced the
30 Hour concept in 1992. This is a service which is available to clients
during the six hours our branches are open for business daily and 24 hours a day through
other channels. The first service that we developed, our call center, began with
approximately half of all telephone banking transactions completed by speaking to a
computerized voice. Since 1998 nearly 85 percent of all telephone banking transactions
have been completed using the telephone keypad. As a result of 30 Hours
services, we have been able to provide our clients with increasingly convenient services
while improving our own cost structure, by transferring to electronic channels
transactions formerly conducted at branches.

Branches

The branch system serves as a
distribution network for all of the products and services offered to our retail customers.
Our 798 full-service branches accept deposits, disburse cash and offer the full range of
our retail banking products, such as checking accounts, consumer loans, automobile
financing, credit cards, loans to small-sized companies, leasing, insurance, asset
management services and payment of bills, such as for taxes and utilities.

Corporate-Site Branches

We offer retail banking services to
corporate customers and their employees through special banking branches located in the
premises of corporate customers. Our network consists of 442 corporate-site branches. In
the case of retail and smaller corporate customers, corporate-site branches may consist
solely of an automated branch. In the case of large corporate customers, corporate-site
branches consist of an average of four employees dedicated to serving the corporation and
its employees.

In-Store Banking

Our search for alternative
distribution channels led to our introduction in 1998 of in-store banking, at that time a
new concept in Brazil. By December 31, 2002, we had established 74 in-store branches. To
implement in-store banking, we formed partnerships with many of Brazils principal
retail chains, such as Carrefour, Pão de Açúcar, Sendas, Wal-Mart and
Sonae. Most of our on-site contracts are exclusive.

ATMs

We operate 6,992 ATMs for the use of
our customers. In addition to our proprietary network, we participate in the shared ATM
network operated by our affiliate, Tecnologia Bancária S.A. The ATM network of
Tecnologia Bancária is one of the largest in Brazil, with 3,121 machines throughout
the country, and serves clients of 29 banks. For a fee, customers of the banks associated
with Tecnologia Bancária can withdraw cash at our ATM network, thereby increasing
our revenue and optimizing capacity.

30 Hour
Branches

In 1992, Unibanco designed and began
installing 30 Hour branches, providing automated services on a 24/7 basis,
such as cash withdrawal, pre-printed chequebooks, account statements and investment
services. We have approximately 798 fully automated 30-Hour branches.

Phone

Over the last decade, Unibanco has
introduced innovations in distribution and remote banking, using the telephone initially as a
banking instrument before turning it into a sales tool. The original concept of a call
center has been transformed into contact centers, with Telefone 30 Horas functioning as a
relationship and sales platform. In 2002, we processed approximately 191 million phone
banking transactions as a result of 91 million calls received by our call center, an
average of approximately 7.6 million calls per month, as compared to an average of
approximately 3.1 million calls per month in 1995. Of the total calls received, 86% were
served electronically by a voice response system, while our approximately 650 trained operators handled
the other 14%. Telefone 30 Horas was chosen by users as the best financial call center in
the market, in a poll taken by IBOPE (Brazilian Statistical Public-Opinion Institute).
Unibanco received a 6.5 grade for service, out of a maximum grade of 7.

Internet Banking

We provide a variety of retail
banking services, including account opening, utility bill payment, wire transfers and
mutual funds, through our web site. Since April 2000, we also have offered a variety of
mobile 30 Hours services, enabling clients to access their banking information
from their cellular phones, palm-tops or PC-based e-mail. As of December 31, 2002, we had
900,000 registered users of our Internet Banking. In 2002, we processed approximately 72
million Internet transactions, an increase of 55.4% over the same period in 2001. Use of
our Internet banking services has continued to grow rapidly in 2002; customers accessed
our website a total of 43 million times. In 2002, we improved our Internet banking as a
sales tool, which will continue to grow in importance, by providing a much wider range of
products and services. In September 2002, the new Internet Banking version for small and
mid-size businesses went online and, at the end of 2002, we had 70,000 registered clients.
This initiative provides corporate access to new online products and services, enabling
for the gradual replacement of Micro 30 Horas, our previous PC-based banking program.

Banco1.net

We were one of the first Brazilian
banks to offer virtual banking service. The original services, which we introduced in 1995
under the name Banco1, allowed individuals to conduct virtually all of their
banking transactions without using a traditional branch office. Banco1 provided its
customers, generally individuals earning in excess of R$1,000 per month, with 24/7 banking
services by phone, fax and personal computer. Banco1 also offers motorcycle couriers who
deliver cash and cheque books within São Paulo and Rio de Janeiro, and non-banking
services such as shopping by catalogue for personal items, including airplane and theatre
tickets. In May 2000, we, together with PT Multimedia.com, controlled by Portugal Telecom,
transformed Banco1 into Banco1.net, Brazils first full-service E-bank and portal
focused on providing advisory services and financial guidance for individuals.

In December 2001 Banco1.net entered
into a strategic alliance with Investshop Corretora de Títulos e Valores
Mobiliários, or Investshop, Brazils largest provider of financial services
through the Internet. As a result of this strategic alliance, Banco1.net account holders
started to have greater access to Investshop investment products. The integration of the
operational structures was concluded in April 2002. At the conclusion of this integration,
Bancol.net became the holder of 100% of the capital of Investshop and Investshop
Participações S.A., Investshops parent acquired an 8% participation
interest in Bancol.net. This strategic alliance expanded our presence in on-line banking.
We presently have a 55% interest in Bancol.net, Portugal Telecom has 27%, Investshop
Brazil has 8% and third party investors have 10%.

As of December 31, 2002,
Banco1.net/Investshop.com had approximately 137,000 accounts (i.e. 108,000
deposit accounts and 29,000 investment/credit card accounts),  and R$399.0 million in mutual funds
under its distribution. Banco1.net stood at R$110.8 million of its own
assets in December 2002. Investshop.com is leading the online stock trading market in Brazil,
with over 19.4% of the market share, according to Bovespa. Our clients traded securities with a
value of R$1.7 billion during the year ended December 31, 2002.

Database Marketing

We are regular users of advanced
marketing concepts, such as customer relationship management and data mining. We are
equipped with software systems that generate information regarding the best products
available to satisfy customers needs based on their profile and the banks
historic relationship with them. We utilize these tools for customer segmentation and
cross selling. The system records important events in the database, such as the
acceptance, processing and rejection of checks, which supports our credit analysis. The
system also indicates profitability per customer and profitability per transaction.

Quality Service

As of December 31, 2002, we had
approximately 5.6 million banking clients compared to 5.2 million banking clients as of
December 31, 2001. The increase in the number of clients was accompanied by an effort
to enhance the quality of our services. We have retained an independent research center, Leadership21,
to measure customer satisfaction on a monthly basis. We have also undertaken special projects
designed to expand the availability of systems and equipment, as well as the professional
and technical capability of our back office areas. As a consequence, the measured level of
client satisfaction has increased recently from 75.7 for the full year of 1999 to 80.1 for
2002, according to a survey conducted by Leadership21.

Funding

Our extensive distribution network
and strong deposit base support our retail banking operations. Retail banking deposits
increased by 27% as of December 31, 2002 from December 31, 2001. Retail
banking is an important source of funding for Unibanco, as 47% of deposits as of December
31, 2002 were from retail customers.

Loans

Loans to retail customers are also an
important part of our retail banking operations. At December 31, 2002, retail loans,
including loans by our subsidiaries and affiliates, were 36% of our total loan portfolio.
Approximately 74.5% of retail loans were made to individuals, with the remainder to small
companies. To facilitate our retail lending, we have developed mathematical models for
credit and risk analysis that are designed to reduce the risk inherent in our retail loan
operations. Using these models we have pre-approved credit limits for 38% of our retail
customers, that totalled, as of December 31, 2002, approximately R$13.2 billion,
consisting of approximately R$8.3 billion in the form of overdraft facilities and personal
loans, and approximately R$4.9 billion in pre-approved credit cards limits. We believe we
are well positioned to expand our retail loan assets when Brazil experiences declining
interest rates and unemployment, which we expect will occur over the medium term. See
 Risk Management  Credit Overview  Retail Credit.

Credit Cards

Brazilians still predominantly use
credit cards as a means of payment rather than as a credit instrument, although this
situation has been changing over the past few years. The market for consumer credit has
grown as declining inflation in Brazil has led to increased consumer consumption and
increasing acceptance of credit cards by merchants. From 1995 to 2002, the number of
credit cards issued almost tripled according to ABECS  Brazilian Cards Companies
Association.

We believe we are among the largest
participants in the credit card business in Brazil. We offer Visa, MasterCard and Diners
Club credit card products to our customers through the following companies:

- Credibanco, our subsidiary which operates our Cartão
Unibanco credit card business;
- Credicard, in which we own a 33.3% stake; and
- Fininvest.

Credibanco has operated the
Cartão Unibanco credit card business since April 2001, when Cartão Unibanco,
which until that point had been a separate legal entity, was merged into Credibanco.
Beginning in the second quarter of 2001, the Cartão Unibanco operations have been
Credibancos sole business. Prior to April 2001, Credibanco was engaged in activities
other than credit cards. In April 2003, Credibanco changed its name from Credibanco 
Cartão Unibanco to Unicard Banco Múltiplo S.A.

All three of the Unibanco-associated
credit card companies employ modern credit review procedures. Each credit card application
is reviewed based on credit scoring and consumer behaviour scoring systems. Credibanco is
the most advanced of our associated credit card companies in data modelling, fraud
prevention, customer service quality and Internet developments. Our associated credit card
companies offer cardholders revolving lines of credit, requiring a minimum payment of the
outstanding account balance as well as credit in installments. The companies obtain
financing on behalf of cardholders from various financial institutions, including Unibanco. Our
associated credit card companies guarantee our credit exposure to credit cardholders.

As of December 31, 2002,
Cartão Unibanco had issued 3.9 million credit cards, making it one of the largest
issuers of credit cards in Brazil, with an approximate 9.4% market share, calculated based
on ABECS data regarding the total number of credit cards issued in Brazil. The majority of
Cartão Unibancos customers are Unibancos customers, but Cartão
Unibanco also aggressively markets co-branded credit cards to non-customers. We believe
that Cartão Unibanco is one of the largest distributors of co-branded credit cards
in Brazil, with 27% of its portfolio consisting of co-branded cards. For example,
Cartão Unibanco issues co-branded cards for Varig Airlines and some Brazilian
newspapers. During 2002, Cartão Unibanco had total billings of R$4.8 billion
and total fees of R$206 million.

We believe that Credicard is the
largest credit card issuer in Brazil in terms of number of cards issued. We have a
one-third interest in Credicard, as do Citibank N.A. and Banco Itaú S.A. Citibank
is responsible for the management of Credicard. Unibanco and its fellow shareholders
receive special dividends from Credicard that are based on the net profitability of
cardholders referred by each shareholder. As a result, our participation in the earnings
of Credicard varies from period to period. At December 31, 2002, Credicard had 6.7 million
cards issued. During 2002, Credicard Group had total billings of R$32.6 billion and total
fees of R$1.7 billion, under Brazilian Corporate Law. Cardholders include our customers
and customers of other banks, as well as direct customers of Credicard.

In May 2000, Credicard created
Orbitall, a services and commercial information processing company. Orbitall services
clients in the business to business, or B2B, market in the areas of credit and debit
cards, vouchers, and also direct consumer loans. Credicard transferred to Orbitall its
physical assets, client portfolio and the approximately 5,000 employees that worked in
Credicards processing departments. During 2002, Orbitall processed 15.7 million
cards, which corresponded to some 648 million transactions.

Redecard S.A. processes the credit
and debit card transactions in Brazil. Established in 1996, Redecard is responsible for
the capture and transmission of credit and debit card transactions of the MasterCard,
MasterCard Electronic, Maestro, Diners Club International and RedeShop
brands in Brazil. The company also provides some products and services for their
customers, such as renting to retailers machines used for the processing of debit and
credit transactions. Debit card use has been increasing in Brazil, and we believe Redecard
S.A. is one of the largest processor of debit card transactions in Brazil.

Fininvest distributes credit cards,
including private label cards, to low-income customers. At December 31, 2002 Fininvest had
approximately 2.4 million cards issued. During 2002, it financed a total volume of
R$1.1 billion in purchases and had total billings of R$3.4 billion and total fees of
R$157 million.

Consumer Finance

We provide consumer finance products
and services directly and through:

- Banco Dibens, in which we have a 51% voting interest;
- Fininvest;
- our own automobile financing portfolio;
- InvestCred, in which we acquired a 50% equity interest as
part of our joint venture with Globex in August 2001;
- LuizaCred, in which we share joint control with Magazine
Luiza; and
- Unibanco-Rodobens, which entered into a joint venture with
Ford Credit Brazil in January 2002.

At December 31, 2002, Fininvest loans had
an average maturity of three months, and primarily bore fixed rates of interest. At
December 31, 2002, Fininvest had total assets of R$2.0 billion. Its loan
portfolio stood at R$1.1 billion at December 31, 2002.

We have focused a significant portion
of our acquisition and joint venture activity on the consumer finance segment of the
retail market. These transactions have included the following:

- In March 1998 we acquired majority control of Banco Dibens,
a commercial bank based in São Paulo which focuses on the financing and leasing of
automobiles and trucks. The Verdi Group holds the remaining voting capital of Banco
Dibens. As of December 31, 2002, Banco Dibens had R$2.3 billion in total consolidated
assets, a loan portfolio of R$1.3 billion and stockholders equity of R$149 million.
Our acquisition of Banco Dibens reinforced our position in auto and truck finance.
- In August 2001 we announced a strategic alliance with
Globex S.A., the owner of the nationwide chain of Ponto Frio household appliance stores.
Pursuant to this transaction, we purchased a 50% interest in Globexs subsidiary
InvestCred, which provides consumer finance to Ponto Frio customers. At December 31,
2002, InvestCreds loan portfolio totalled R$588 million and the number of active
customers reached 3.0 million.
- In September 2001 Fininvest and Magazine Luiza, a
well-known Brazilian chain of department stores, announced a strategic partnership
creating and sharing control of a new company, LuizaCred, to provide financing to
Magazine Luiza customers. At December 31, 2002 LuizaCred had R$210 million in loans and
1.1 million active customers.
- In January 2002 Unibanco-Rodobens, our lay-away finance
arm, and Ford Credit Brazil established a joint venture for the sale of cars and the
management of groups of the National Ford Consortium, a system for financing goods on an
installment plan basis. Through this joint venture we intend to increase our presence in
the car finance sector. During 2002 the total volume of sales using the lay-away finance
program of Unibanco-Rodobens was R$500 million.

We use the equity  method,  rather  than  proportional  consolidation,  to  account  for our  interests  in
InvestCred, LuizaCred and Unibanco-Rodobens under USGAAP, because we do not have a majority of the voting
shares.

Savings and Annuities
Products. Our wholly owned subsidiary, Unibanco Companhia de
Capitalização, or Unibanco Capitalização, offers savings and
capitalization products. Unibanco Capitalizaçãos products consist
primarily of savings account-type products, which also provide incentives to depositors
through a special weekly lottery award. Unibanco Capitalizaçãos
business net income during 2002 amounted to R$76.5 million.

Mortgage Financing

Brazilian law requires banks to
provide a minimum level of housing financing. The minimum level must be at least equal to
65% of the banks savings deposits. However, banks may reduce their minimum lending
requirements with credits against the Fundo Nacional de Compensação de
Variações Salariais, or FCVS, the Brazilian government housing fund. Our
approach is to lend the minimum required amount. Since we offset a considerable amount of
credits against FCVS, at December 31, 2002, we had approximately R$714 million in
mortgage loans outstanding.

Wholesale Banking

Overview

Our Wholesale Banking business serves
mid- and large-sized corporations. Our large corporate customers include domestic and
multinational companies with annual sales of more than R$150 million. Middle market
customers have annual sales between R$40 million and R$150 million. We have designed our
Wholesale Banking operation to respond to the specific needs of our corporate clients by
offering a diversified portfolio of products and services, including working capital
loans, cash management, import and export financing, investment banking, corporate finance
and advisory services. Our Wholesale Banking business has a network of offices and
facilities from which we provide support to our clients operations both in Brazil
and abroad.

Large and Middle Market
Corporations

We maintained lending or service
relationships with approximately 2,700 mid- and large-sized companies in Brazil as of
December 31, 2002. Loans to large corporate customers stood at approximately R$14.6
 billion at December 31, 2002 (approximately 58% of our total loan portfolio).

In the middle market segment we had
approximately 1,600 customers at December 31, 2002. We view middle market companies as an
important segment of our customer base, because they generally concentrate a greater
portion of business with their principal banks, are more relationship oriented and have
less access than large companies to the local or international capital markets. Loans to
middle market corporations were approximately R$1.2 billion at December 31, 2002
(approximately 5% of our total loan portfolio).

A substantial portion of our loans to
middle market customers is fully collateralized. Loans to large corporate customers may be
collateralized following the guidelines of our internal credit rating system. Consistent
with customary lending practices in Brazil, our portfolio of loans to large and middle
market customers is predominantly short-term, i.e., up to 360 days.

We have adopted both sector and
regional coverage strategies to serve our wholesale clients. Certain industries, such as
infrastructure, automotive, retail and pulp & paper are assigned a specialised team of
account officers, which is led by a Sector Head. Japanese and German companies that have
operations or do business in Brazil and Brazilian companies with interests in Japan or
Germany are attended by our Japan and German Desks, due to Mizuho Financial Groups
(formerly the Dai-Ichi Kangyo Bank) and Commerzbank AGs direct and indirect equity
interests in Unibanco. As a result of our acquisition of Banco Bandeirantes from Caixa
Geral de Depósitos, a Portuguese bank, at the end of 2000 we created a Portuguese
Desk. We believe that our knowledge of the Brazilian financial market, combined with the
strong relationships that our bankers have with the most important companies in Brazil,
give Unibanco a competitive advantage.

Wholesale Network

Each of our corporate customers is
assigned a dedicated banker, who is responsible for the day-to-day relationship with the
customer. Through our centralized Business Centers  wholesale branches that are
located in the cities of São Paulo (two branches) and Rio de Janeiro (one branch)
 the account officers are responsible for attending to all our clients
operations throughout Brazil. These customers also benefit from our offices abroad.

Our international overseas network
consists of the following:

- branches in Nassau and the Cayman Islands;
- representative offices in London and New York;
- banking subsidiaries in Luxembourg, the Cayman Islands, and
Paraguay; and
- brokerage firms in London (Unibanco Securities Limited) and New
York (Unibanco Securities Inc.).

At the end of 2003 our representative
office in London will be transferred to Luxembourg. Our international subsidiaries and
branches obtain trade and general purpose funding for on-lending to our Brazilian clients,
either directly or through our head office. Our international network also supports our
clients operations abroad by providing capital markets and corporate finance
services. As deposit-takers, our offshore subsidiaries and branches offer demand and term
deposit facilities. Unibanco Cayman is particularly active in obtaining funding in the
Euro-dollar market for purposes of on-lending to our Brazilian clients. Unibanco Cayman is
also one of the issuers under our US$2 billion medium-term note programme, and it
maintains two US commercial paper programs and a trade note program, under all of which an
aggregate principal amount of approximately R$3.0 billion was outstanding at
December 31, 2002. Unibanco Cayman also establishes trade lines with correspondent
banks and plays an active role in the syndicated loan market as syndicate arranger, agent,
manager and participant.

Through our international network we
provide services to Brazilian companies that rely on capital markets as
a source of funding. We place a great emphasis on developing our capital markets services,
including underwriting and the distribution of securities and secondary trading, as well
as providing advisory services on the structuring of these transactions. In recent years
we participated in underwriting syndicates for several bond issues by major Brazilian
companies.

Our international assets increased by
32.7% to R$14.6 billion at December 31, 2002, from R$11.0 billion at December 31, 2001. Of
these assets:

- R$2.0 billion were credit operations directly provided to our
clients;
- R$8.3 billion were assets we borrowed for purposes of
on-lending to our Brazilian clients; and
- R$4.3 billion were other assets, including securities and
available funds abroad.

International Trade
Finance and Correspondent Banking

We provide import and export
financing and services to our corporate customers. At December 31, 2002, we had a
portfolio of US$2.1 billion of funding from 124 of our more than 350 correspondent banks,
(consisting of US$1.2 billion of export and import funding and US$0.9 billion of working
capital funding), as well as US$1.5 billion of medium- and long-term import financing
funded or insured by over 24 export credit agencies and multilateral agencies. Our
extensive network of correspondent banks and our own international operations help Unibanco to
provide our customers with foreign exchange and international trade support worldwide.

At December 31, 2002, we had
outstanding import and export financings, on a consolidated basis, of US$1.4 billion. Our
shares of the Brazilian export financing and import financing markets stood at 6.7% and
6.1%, respectively, according to the Central Bank. Our volume of foreign exchange
transactions totalled US$11.1 billion in 2002.

Corporate Finance and
Brokerage

We provide corporate finance services
to a diverse group of Brazilian companies. We have structured our operations to seek
synergies from our various product areas:

- the  account   managers  or  bankers  are  responsible   for
 developing  and  maintaining   strong          relationships with our corporate
customers;
- our equity and debt capital markets and our mergers and
acquisitions groups bring product expertise and innovation focused on the ever-changing
needs of Brazilian companies; and
- the brokerage and distribution groups are responsible for
understanding the needs of Brazilian and international investors in order to offer
suitable investment options.

We are one of the oldest investment
banking operations in the country. During 2001 and 2002, we continued to consolidate our
position as the largest private sector bank in origination and distribution of fixed
income securities  with a 19% market share in origination and 20% in distribution
for the year ended December 31, 2002 according to ANBID (Brazils National
Association of Investment Banks).

Our mergers and acquisitions advisory
team has also been active as a result of the continuing trend towards consolidation in
many Brazilian industries. It successfully completed 13 transactions over the course of
2002, the largest number of transactions completed that year, giving the bank the top
position among Brazilian banks in the Thomson Financial ranking. The transactions include
the Lafarge Group (sale of assets for the manufacturing of concrete in Brazil), CBD
(advisory services in connection with the acquisition of the Sé supermarket chain)
and Abril LS (sale of European media company stake).

Our Brazilian brokerage operation,
Unibanco Corretora de Valores Mobiliários S.A., or UCVM, offers equity and debt
securities and derivatives products, and provides trading services on Brazilian stock
exchanges for more than 95 institutional customers. UCVM provides research on over 100
listed companies. In 2002, UCVM ranked fourth in number of futures contracts negotiated
with the Brazilian futures and commodities exchange (the BM&F), with a
5.4% market share based on the value of contracts negotiated. To better serve our
clients corporate finance needs and strengthen our relationship with the
international investment community, we maintain securities brokerage and distribution
operations in Europe, through Unibanco Securities Limited, and the United States through
Unibanco Securities Inc.

Project Finance and
Privatization

Our project finance group is
responsible for structuring and financing infrastructure and industrial projects, such as
projects related to toll roads, ports, railroads, energy and telecommunications. Our
activities include advising our corporate customers about the economic and financial
feasibility of proposed projects, as well as project structuring and the extension of
related long-term financing. This combination of investment banking advisory services and
commercial lending represents an important source of revenue for Unibanco. During 2002, we
completed 15 project finance advisory mandates involving total investments of R$3.6
billion, of which R$2.5 billion were financed by loans and capital market placements.
Unibancos strength in project finance was reflected in the range of industries
covered, with mandates in transportation, logistics, power generation and transmission,
agribusiness, oil, gas and sewage treatment.

Unibanco ranked first in the ANBID
(National Association of Investment Banks and Security Dealers) project finance advice
roster, by volume of projects, in 2002. According to the Dealogic ProjectWare database,
used in various rankings, including those of Project Finance Magazine, Unibanco ranked
first in Brazil in project finance advice. The assessment is based upon the investment
value of assisted projects. Based on this same criteria Unibanco ranked second in South
America.

BNDES, the Brazilian development
bank, and its affiliates, provide special purpose funding to targeted groups of domestic
borrowers. In Brazil, funding from government sources is a method of providing long-term
loans with attractive interest rates to specific sectors of the economy targeted for
economic development. Loans from these funds are directed by government agencies through
private banks. We borrow funds from BNDES or Finame, the equipment financing subsidiary of
BNDES, and then we onlend these funds to the borrowers at a spread determined by Unibanco. The
onlending is at our risk, is largely real-denominated and is generally secured or
guaranteed, although this is not required. BNDES onlendings reached R$1.3 billion in 2002,
growing 23% compared to 2001, securing a 8.5% market share for Unibanco. The Wholesale
Bank also operated as an onlending agent for IFC (International Finance Corporation) and
DEG (Deutsche Investitions) in infrastructure projects valued at US$70 million and US$15
million, respectively.

Leasing

We participate in the Brazilian leasing market through two companies:

- Unibanco Leasing S.A. Arrendamento Mercantil, or Unibanco
Leasing; and
- Dibens Leasing S.A.  Arrendamento Mercantil, or Dibens
Leasing.

Unibanco Leasing seeks to develop
customized leasing products at competitive prices, mainly for the industrial, commercial
services, automobile and transportation sectors. It leases transportation vehicles,
industrial, electronic and office equipment and real estate to wholesale and retail
clients. As of December 31, 2002, Unibanco Leasing had R$369 million of leases
outstanding and, Dibens Leasing had R$160 million of leases outstanding.

Treasury, Trading and
Derivatives Activities

Our treasury unit conducts financial
transactions primarily for our corporate customers as well as for its own account. Our
treasury group:

- trades fixed income Brazilian government securities, derivative
financial instruments, and bank and corporate debt securities;
- prices loans and investment products for the Retail and
Wholesale Banking business units;
- engages in foreign currency trading transactions; and
- engages in derivative transactions, such as swaps for hedging
and arbitrage purposes.

Our treasury unit carries out both
domestic and international functions. Our domestic treasury unit works as a centralized
pool of liquidity for Unibanco. This department determines base rates and prices of investments.
Two important subdivisions of our domestic treasury unit are the local money market and
the foreign exchange desks. They carry out all our trading and arbitrage activities in the
domestic financial market. In addition, they manage all portfolios denominated in local
currency that are originated from our interbank and client transactions.

Our international treasury function
consists primarily of accessing offshore funding sources.

We carry out our trading and
positioning activities within clearly defined limits determined by our financial
committee, which establishes and reviews monthly the exposure limits. This committee
consists of members of our board of directors and our senior officers. Our risk management
unit monitors positions, ensures compliance with limits and makes recommendations to the
financial committee.

Cash Management

Our cash management unit advises our
clients and provides products relating to cost reduction, productivity increases and
better administrative control over their cash flows, in each case based on the particular
circumstances of each clients business. We also maintain, with fifteen other banks,
the Connexión America, which offers integrated cash-management services in Latin
America. At the end of 2002, some 80,000 customers were making use of Unibancos cash
management services, such as payments and credit, a 54% increase compared to 2001. The
volume of collections, accounts payable and payrolls in 2002 increased by 33% compared to
the previous year, to 144 million transactions.

Insurance and Related
Activities

Overview

In our Insurance business, we engage
in insurance and related activities mainly through our joint venture with AIG. This joint
venture consists of UASEG, which is owned equally by Unibanco and AIG and managed by Unibanco,
and several of AIGs Brazilian insurance affiliates, each of which is approximately
50% owned by AIG and 50% by Unibanco. We refer to these affiliates as the AIG Brasil
companies. According to SUSEP and ANAPP, in December 2002, Unibancos insurance,
pension and retirement plan companies combined with the AIG Brasil companies were the
fourth largest insurance provider in Brazil, based on gross premiums written and pension
plans billings.

Insurance

In October 1997, we acquired
approximately 50% of the equity of each of the AIG Brasil companies and AIG acquired
approximately 50% of the equity of UASEG. While AIG holds a slight majority of the total
equity of UASEG, we hold a majority of the voting shares and we have managerial control of
the company, subject to consultation with AIG on certain strategic issues. AIG has control
of the AIG Brasil companies, similarly subject to consultation with Unibanco on certain
strategic issues.

As a result of our partnership with
AIG, UASEG has launched several new products, including life insurance, extended warranty
insurance for consumer goods, and automobile products. In 2001, we completed the
consolidation of our systems and back office operations with those of AIG, in order to
increase efficiency and cost savings. During 2002, administrative expenses were 2.6% lower
than in the previous year. For the year ended December 31, 2002, administrative expenses
represented 10.6% of the total premiums written compared to 13.8% for the year ended
December 31, 2001.

As a result of our acquisition of
Banco Bandeirantes in December 2000, UASEG acquired two insurance companies that were
owned by Banco Bandeirantes. These companies were merged into UASEG on November 30, 2001.
As a result, UASEGs presence became stronger in strategic markets such as in
northeastern Brazil. After giving effect to the acquisition of Banco Bandeirantes
insurance operations the sales mix was changed, focusing on products with higher margin.
New products were launched for the insurance brokerage channel, and four new offices were
opened in northern and southern Brazil. UASEGs gross premiums written
in 2002, on an annualized basis, amounted to R$1.8 billion, representing a 27% increase
over the previous year.

UASEG has the exclusive right to
distribute insurance products through our branch network to our Retail and Wholesale
Banking customers. We believe that this distribution channel gives it a competitive
advantage over many insurance companies that are not affiliated with banks. Because
approximately half of UASEGs insurance premiums are generated through customers of
our branch network, the company benefits from significant cost savings and marketing
synergies. UASEG also markets its insurance products through approximately ten thousand
independent brokers and Unibancos call center, website and in-store branches. The
AIG Brasil insurance companies distribute their products through banks and financial
institutions, as well as through mass marketing programs to affiliated groups.

We believe that UASEG is
strategically positioned in the product segments that are most profitable and that have
the greatest growth potential, such as home insurance, individual life insurance and
personal accident insurance. Another noteworthy product is the warranty extension program
for household appliances, marketed by Garantech, our joint venture with Multibrás,
Brazils largest household appliances manufacturer. As of December 31, 2002,
1.6 million extended warranty contracts had been sold. We believe that UASEG is the leader
in the market for extended warranty insurance on consumer goods.

In developing insurance products for
corporate clients, we have achieved leading market positions in a variety of specialized
areas, including directors and officers (D&O) insurance and coverage products for the
petrochemical, aeronautics and international transport industries.

The following graph, based on
information by SUSEP, ANS (National Health Agency) and ANAPP (National Association of
Private Pension Plans), illustrates our 6.3% market share of total premiums for the year
ended December 31, 2002:

Market Share
Year ended December 31, 2002

___________________
Source: SUSEP, ANS and
ANAPP.

Although UASEG is a joint venture of
Unibanco and AIG, we hold a majority of the voting shares of UASEG and therefore control
the company. As a result, we consolidate the results of UASEG into our consolidated
financial statements. Each of the AIG Brasil companies is jointly owned by Unibanco and
AIG, but we do not control any of them since in no case do we have a majority of the
voting shares. Accordingly, under USGAAP, we do not consolidate the results of the AIG Brasil companies
into our consolidated financial statements. Instead, we account for the results of the AIG
Brasil companies under the equity method.

Set forth below is selected
financial information for our insurance operations for 2001 and 2002 under Brazilian Corporate Law.
Although we account for the results of UASEG and the AIG Brasil companies as discussed above, the
table below includes the combined results of 100% of UASEG and 100% of the AIG Brasil
companies. The back office operations of UASEG and the AIG Brasil companies were
consolidated in January 2001, and substantially all expenses of the combined insurance
operations, including those of AIG Brasil companies, are included in the financial
statements of UASEG. Accordingly, we believe that the financial results of our insurance
operations are more meaningfully considered on a combined basis. Our net income reflects
approximately 50% of the combined operations.

|                                          | For the year ended and as of December 31,
|----------------------------------------- | -----------------------------------------
|                                          |                                          
|                                          | 2001                                     
|                                          |                                          
|                                          | (in millions of R$, except percentages)  
|Selected results of operations data:      |                                          
|Gross premiums written                    | 1,413                                    
|Net premiums earned                       | 1,088                                    
|Underwriting gain (loss)                  | 228                                      
|Net income                                | 162                                      
|Operations ratios:                       
|Claim or loss ratio(1)                    | 61.6%                                    
|Expense ratio(2)                          | 37.1%                                    
|Combined ratio(3)                         | 98.7%                                    
|Selected balance sheet data:             
|Technical reserves and losses reserves    | 657                                      
|Shareholders' equity                      | 1,183                                    
|Return on average shareholders' equity(4) | 21.1%                                    

|_____ | ____________                                                                                                
|----- | ------------------------------------------------------------------------------------------------------------
|(1)   | The  ratio of  incurred  claims  losses  and loss  adjustment  expenses
to net
     premiums earned.        
|(2)   | The ratio of policy acquisition costs and other underwriting  expenses incurred
     to net premiums earned.
|(3)   | The sum of the loss ratio and the expense ratio.                                                            
|(4)   | Average  stockholders'  equity  excludes tax credits and goodwill.                                          

The following table shows the gross
premiums written by our insurance operations for 2001 and 2002. For the reasons described
above, we have presented the premiums written on a combined basis, including the
premiums of Unibanco AIG companies.

|           | For the year ended and as of December 31,
|---------- | -----------------------------------------
|           |                                          
|           | 2001                                     
|           |                                          
|           | R$ million                               
|Life (1)   | 349                                      
|Health (2) | 72                                       
|Auto       | 431                                      
|Fire       | 179                                      
|Others (3) | 382                                      
|Total      | 1,413                                    

|_____ | ____________                                                                                         
|----- | -----------------------------------------------------------------------------------------------------
|(1)   | The majority of the life insurance premiums underwritten
 by Unibanco consist of term life insurance.
|(2)   | Health insurance includes premium equivalents.                                                       
|(3)   | Includes property and casualty, aviation, marine,
financial lines, surety and personal property.     

UASEG reinsures a portion of the
risks that it underwrites, particularly large property and casualty risks, in excess of
the retention limits defined by Brazilian legislation. The risks that exceed the retention
limit must be assigned to IRB Brasil Resseguros S.A., formerly known as Instituto de
Resseguros do Brasil.

In 1999, the
Superintendência de Seguros Privados  SUSEP, the Brazilian insurance
regulatory body, established rules for recognition, over a maximum of two years, of losses
upon their occurrence and requiring reserves for claims incurred but not reported. The new
rules are expected to accelerate the consolidation process of the Brazilian insurance
industry, which we believe will favor highly capitalized companies such as UASEG.

UASEG ended 2002 among the leading  insurance  companies in Brazil
in terms of  underwriting  results.  UASEGs  combined  ratio reached 99.8% in 2002,
 compared to an estimated  average combined ratio for the insurance  market in Brazil of
 approximately  107.2% in 2002, based on data provided by  Superintendência
 de Seguros Privados  SUSEP (Private  Insurance  Regulatory Body). This result for 2002
is due to costs controls,  conservative underwriting practices,  regulation of claims,
increased productivity and a focus on a more profitable product mix.

Pension and Retirement Plans

Unibanco AIG Seguros e  Previdência  S.A.,  or Prever,  manages
 funds that  consist of pension and  retirement  contributions  made by institutional
 clients and  individuals.  Prever offers  retirement  plans with a guaranteed  minimum
rate of return.  According to the National  Association of Pension Funds  (ANAPP),
 Prever was the fourth largest  private  pension and retirement  plans fund manager in
Brazil in 2002 in terms of funds under  management.  In addition  Prever is one of the
largest fund managers in the  corporate  pension plan segment in terms of consolidated
 corporate sales, with sales of R$338 million.  Prever services  approximately 526,000
individual and 880  corporate  clients.  At December  31,  2002,  technical  reserves
 stood at R$2.0  billion,  an increase of 33.3%  compared to December 31, 2001.

In October 2000 Prever introduced the Prever Invest, an investment
 product that combines  profitability  with the fiscal benefits that the private
 retirement  plans offer.  Moreover,  its entire  investment  yield is transferred  back
into the fund. This product allows the client to choose between conservative, moderate
and aggressive plans, and the client is not required to make monthly deposits.

In 2002,  Prever  experienced  strong sales of two  products,  PGBL and VGBL plans,  to  Brazilian  private
pension plans.

- PGBL plans, Plano Gerador de Benefícios  Livres,  introduced in 1998, enable
customers to save for retirement with a tax deductible feature and may include insurance coverage
for death, accident or disability.  PGBL plans are suitable for higher income customers.
- VGBL plans,  Investir Seguro (VGBL - Vida  Gerador de Benefício  Livre) introduced at
the end of March 2002, combine life  insurance  with  investment,  enabling the
insured party to redeem the invested amount at any time, while still offering  coverage in case of death,
accident or disability. VGBL is not tax deductible for the investor.
We believe  that VGBL  will attract the segment of the
population with income around R$2,000 per month (approximately 12 million people).

In year 2002, total revenues of PGBL plans reached R$264
million, while VGBL plan revenues totalled R$91 million.

Wealth Management

Assets Under Management as of December 31, 2002

Our subsidiary,  Unibanco Asset Management,  is dedicated
exclusively to the management of third party funds. It provides a broad range of asset
 management  services,  including  fixed income and equity  mutual funds and fixed income
funds,  and markets  these  services through our Retail Banking and Wholesale Banking
operations.

As of December 31, 2002,  UAM had R$18.4  billion in assets under
 management  (including  R$479 million under the  management of Banco Dibens),  a
decrease of 8.4% compared to 2001.  This decrease was  primarily  the result of a general
 decline in the asset  management industry,  due to the economic  situation in 2002,
which resulted in reduced inflow of funds in the retail and institutional  segments. In
the institutional  segment,  the pension funds industry was ordered to pay approximately
R$10 billion in back taxes during the first semester of 2002, which strongly  affected
their investment  capabilities.  In May 2002, the Central Bank of Brazil  introduced mark
to market  rules for fund  portfolios.  In the current  market  environment,  this caused
an outflow of funds in the retail  segment  from mutual  funds to more  traditional
 investment  vehicles,  such as time and savings  accounts.  In the  private  sector
 pension  funds segment,  UAM had R$3.9 billion under management as of December 31, 2002,
 giving UAM the second largest Brazilian market share at 9.4%, according to ANBID.

UAM  generally  charges fees for its mutual  funds based on the
average net asset value of the funds,  which is  calculated  on a daily basis.  UAM also
manages  portfolios  for pension funds,  corporations,  private  banking  customers and
foreign  investors.  For these services,  UAM generally  negotiates fees that are based
on a percentage of assets under  management,  on investment  benchmarks and on
performance.  In 2002, asset management fees averaged approximately 1.3% per year. The
following  information,  which is the same under USGAAP and Brazilian  Corporate Law
sets forth the net assets of UAMs  principal  funds and number of such funds as of
December 31, 2001 and 2002.

|                          | Net Assets          | Number of Funds
|------------------------- | ------------------- | ---------------
|
|                          | 2001(1)             | 2002           
|                          | (in millions of R$)
|Mutual Funds:            
|Fixed Income              | 16,781              | 15,049         
|Equity                    | 626                 | 632            
|                          |                     |                
|Total                     | 17,407              | 15,681         
|Institutional Portfolios:
|Pension Funds             | 1,524               | 1,696          
|Insurance Companies       | 819                 | 635            
|                          |                     |                
|Total                     | 2,343               | 2,331          
|                         
|Individual Portfolios     | 105                 | 102            
|Foreign Funds             | 224                 | 270            
|                          |                     |                
|Total                     | 20,079              | 18,384         
|                          |                     |                

(1)  Excludes assets under management by Banco Dibens of  R$318
million in 2001.

UAM uses our branch  network as one of its  principal  distribution
 channels.  The  acquisition  of Banco  Bandeirantes  supports this strategy.  UAM has
also intensified its training of staff in our distribution  areas,  giving training
courses to teams in 202 branches and  corporate-site  branches  to ensure  that the best
 possible  investment  advice is  provided to our  clients.  In  addition,  UAM
intensified its efforts to sell products through the Internet.

UAM was rated AAA in March 2002, the highest  classification  in the
domestic scale, by the Atlantic Rating Risk Committee,  which is a Brazilian rating
agency.  The AAA rating is valid for 12 months and is only granted to companies that
provide  excellent  management of funds.  In  May 2000,  Standard & Poors rated  Unibanco
 Asset  Managements  long- and  short-term  counterparty  credit as brAA- and brA-1  respectively.
 Since July 2001,  UAM has held Standard & Poors AMP-1 rating (very sound) with
respect to its practices in managing  third-party  funds.  This is the highest of five
possible ratings.  In May 2003,  Unibanco was awarded the Top Manager 2003 prize in the
category Great Equity Managers, granted jointly by Standard & Poors and the newspaper
Valor Econômico.

UAM was the first fund  manager  company to provide  its clients
 with the  benefits of the new income tax  regulation  concerning  the remuneration  of
funds,  which  allows fund  holders to offset fund losses  against  fund gains among the
 different  funds held,  with respect to stock,  exchange rate and derivative  funds,
 thereby  optimizing the income tax paid (procedure  established by Provisional Measure
16/01 and by the Normative Instruction 119/02 of the Brazilian Tax Authorities).

Private Bank

Our private  banking unit targets high net worth  individuals  with
potential  investment  portfolios of over R$1 million.  Many of our private  banking
 clients are major  shareholders or senior  executives of our corporate  clients.
 Private banking had R$10 billion in funds under management from its 4,600 customers as
of December 31, 2002.

Risk Management

We  continuously  strive  to  improve  our  risk  management
 practices,  which  we have  integrated  into the  various  levels  of our organization.
 A separate  department  that is headed by our chief  financial  officer is responsible
 for  identifying,  measuring and managing  market,  credit and operational  risk
 institution-wide.  In addition,  some business  divisions,  due to their specific risk
exposures,  have dedicated risk management staff. The risk committee,  composed of senior
 management,  evaluates the risks involved in our activities and proposes risk management
policies accordingly.

Credit Overview

Our credit policy is designed to manage risk while  maintaining  the
 flexibility  required by market  conditions  and the needs of our customers.  We limit
our credit risk exposure by avoiding  concentration  on clients and  particular  sectors
that we believe have high risk factors.  We have various  approval levels for both retail
and wholesale  credit  applications.  Depending on the size and type of exposure and the
customers  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.  Our centralized  credit  decision-making
process is based on strict credit limits that are set by the wholesale and retail credit
 committees.  We pre-approve  credit limits to our customers for different types of
credit lines based on their creditworthiness and size.

Corporate Credit

We base each credit decision on the following factors:  financial
history,  cash flows,  quality of management,  relationship  history, market  conditions
 and other factors  relating to credit risk. We employ an internal  credit rating system
which ranks  companies from AA to H, within different levels, based on quantitative
 criteria,  such as recent financial data, and qualitative  aspects,  such as management
and succession  issues.  Although we only approve loans to borrowers with initial
 ratings of AA to C, our rating system goes up to H because  borrowers  financial
 situations can  deteriorate  after the loan is made. We consider  companies with a
credit rating of:

- AA and A to be very stable and with minimal credit risk and to be financially very
sound;
- B and C to be less stable and require close  monitoring  (loans
to companies  ranked B and C are usually  short-term,  require          significant
security and other credit support);
- D, E, F and G to be higher risks or potential  problems; and
- H to be poor credit risks (defaults) and fully
provisioned against.

We review  credit lines for  corporate  clients  every 60 to 360
days,  depending  on the  borrowers  rating and the  external  credit environment.  With
 companies  ranked B and C, we  generally  conduct  a credit  review  every 90 days.
 With  companies  ranked  A, we generally  conduct a credit  review  every 180 days and
with those ranked AA which have a credit line that  represents  less than 5% of our
 stockholders  equity,  every 360 days. As of December,  31, 2002,  approximately  93.9%
of our wholesale  loan  portfolio  ranked between  AA and C.
 See  Item 5.  Operating  and  Financial  Review  and  Prospects    Selected
 Statistical Information   Classification  of Loan  Portfolio for a table which
provides a breakdown of our corporate loan portfolio  according to Brazilian banking
practices.

Retail Credit

Credit  management in the retail banking  business,  which is
 characterized  by the  processing of a large volume of credit  requests, requires
 specialized  systems and  processes.  We use a wide range of  statistical  tools to
evaluate  retail credit  requests.  These tools,  which include  credit and behaviour
 scoring,  are backed by dedicated  systems that were developed by us as well as by
outside consultants. Our automated credit system is a special software program that
services loans at all stages from their inception.

A plan was implemented to provide to the credit and collections
 manager a group of macro and  microeconomic  indicators,  connected to the internal
 indicators,  and the actions to be taken in the strategy  according to the environment.
 This plan defines four different risk levels of those  indicators,  from a normal
economic  environment to a high  recession/inflation  scenario.  For each one of those
levels,  credit and collection  policies and strategies are  pre-determined  by the Chief
Compliance  Officer (CCO) to be used by the credit and collection  managers.  On a
monthly basis,  the CCO together with the Chief Executive  Officer (CEO) evaluates the
indicators and maintains or changes the risk level, as necessary, for the Retail segment.

In 2001 we  started a new  project,  called  Credit  and
 Collections  Factory,  with the main focus to  provide  unified  credit and collections
 operations,  systems and  platforms  for all the Retail  customers  managed by
 Credibanco - Cartão  Unibanco,  Fininvest, InvestCred,  Banco Dibens and LuizaCred.
 This project,  to be implemented in the fourth quarter of 2003,  will increase the
quality of risk  management in the Retail side, by providing  improved  platforms,
 systems and  strategies.  See Item 5. Operating and Financial Review and Prospects  Selected
 Statistical  Information Classification of Loan Portfolio for a table which
provides a breakdown of our retail loan portfolio according to Brazilian banking
practices.

Loan Provisioning

The  allowance  for loan  losses  is the  amount  that has been provided  for  probable  losses in the loan
portfolio.  The allowance is increased by  provisions  for loan losses and  recoveries
 of loans  previously charged-off  and is reduced by  charged-off  loans deemed  uncollectible.
Our evaluation of the adequacy of the allowance is based on regular reviews of individual  loans,
recent loss  experience,  current  economic conditions,  the risk  characteristics  of the  various
classifications  of  loans,  the fair  value of the underlying  collateral and other factors
directly  influencing the potential  collectibility  of loans. The allowance  for loan and
lease losses is  maintained  at a level that we believe to be  sufficient  to absorb
estimated probable credit losses inherent in the loan and lease portfolio.

As of December 31, 2002,  our  consolidated  allowance for loan
losses was R$1,389  million,  representing  5.5% of total  portfolio, compared to 5.3%
in 2001.  Also, as of December 31, 2002, our ratio of  non-performing  loans to total
loans was 3.9% and our ratio of allowance for loan losses to non-performing loans was
142.0% as compared with 4.2% and 127.3%, respectively, as of December 31, 2001.

The following table shows the quality of our loan portfolio for
2000, 2001 and 2002:

|                                                     | As of and for the Year EndedDecember 31,
|---------------------------------------------------- | ----------------------------------------
|                                                     | 2000                                    
|                                                     | (in millions of R$, except percentages) 
|                                                    
|Total loans                                          | R$20,314                                
|Nonperforming loans                                  | 867                                     
|As a percentage of total loans                       | 4.3%                                    
|Allowance for loan losses                            | 1,005                                   
|As a percentage of:                                 
|Total loan portfolios                                | 4.9%                                    
|Nonperforming loans                                  | 116%                                    
|Provision for loan losses recorded                   | 676                                     
|Loan charge-offs                                     | (732)                                   
|Recoveries                                           | 305                                     
|Net charge-offs                                      | (427)                                   
|Net charge-offs as a percentage of loans outstanding | 2.7%                                    

Market Risk

We believe we have a conservative  policy regarding  market risk
exposures.  The market risk exposure of our portfolio is independently supervised and
controlled. All financial and principal non-financial subsidiaries,  such as our credit
cards,  capitalisation,  private pension  funds and insurance  business are evaluated on
a daily basis.  Market risk  management is based on limits  established  by the financial
and risk committees.

We limit our market risk exposure by managing our currency,
 maturity,  and interest rate mismatches.  Securities,  derivatives,  loans and fundings
are analysed on a consolidated basis.  Derivatives play an important role in managing
asset and liability mismatches.

Exposure limits for our treasury unit are established considering
market volatilities,  scenario forecasts,  opportunity for profit and the funding needs
of the commercial  bank.  Trading and positioning  activities are conducted within clear
limits suggested 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.

Derivatives have been used in Brazil as the main market instrument
for trading  activities.  By trading in derivatives,  we are able to achieve a lower
credit risk exposure  than would be achieved with a position in the  corresponding  cash
 instruments.  The most common derivatives traded in the Brazilian market are interest
rate and foreign exchange futures and swaps.

Most of our swap portfolio,  by notional value,  has financial
 institutions as  counterparts.  Most of this portfolio is guaranteed by the BM&F. We
also trade with non-bank  counterparties,  most of which are customers of our commercial
 banking  operations.  Generally, these swaps have a time deposit as collateral.

Our securities  portfolio  consists mainly of Brazilian federal
 government bonds and notes. No state or municipal position was carried during 2002.
 Federal  securities  are the most liquid  assets held by Unibanco in Brazil and can be
converted to cash almost  instantly.  We also  have been  carrying  an  eurobond
 portfolio  of low risk  Brazilian  issuers.  This is a small  portfolio  when  compared
 to our government securities position.

The  instrument  durations  traded in Brazil are still  short when
 compared  to  international  standards.  Therefore,  the price risk associated with our
domestic  portfolio tends to be lower than that associated with our  international
 portfolio.  Progressively,  the Central Bank is lengthening maturities of government
liabilities.

We employ the value at risk, or VAR,  methodology for evaluating
our risks.  VAR is generally  defined as the potential  one-day loss in portfolio  value
from adverse market  movements and is based on probability  analysis.  We consider a
99.0%  confidence  level (2.33 standard  deviation) to calculate our VAR, and we
calculate  VAR for each  business  day.  Procedures  such as back testing are used to
ensure the models  precision  and  consistency.  The analysis  captures all financial
 assets and  liabilities,  including  derivative instruments.  We also make use of stress
 testing  evaluation,  based on  hypothetical  macroeconomic  scenarios,  in order to
 prevent strong adverse impacts on the results.  See Item 11. Quantitative and
Qualitative Disclosures About Market Risk.

Operational Risks

Operational risks are related to an institutions  unexpected
 losses,  due to its systems,  processes,  practices and control measures being incapable
of withstanding human error, damaged support  infrastructure,  fault modelling,  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, we 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  found in the corporate  intranet portal  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,  which is  ongoing,  allows
 controls to be improved, resulting in reduced risk exposure.

The collected data provide support for the monitoring and
 performance  evaluation of the 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 operational risk exposure, thereby
establishing the rational allocation of capital.

Management of Systems Risk

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,  we have  devoted substantial  resources to ensure the reliability and
stability of our computer and related  systems.  Our principal  computer  facility is
located in São Paulo.  We maintain a backup system near the main  facility to provide
 coverage in the case of system  failures.  We designed  this backup  system to operate
 automatically  if the main  system  malfunctions.  We also  prepare  and store  backup
 files recording all banking  activities.  We also conduct  periodic  testing to monitor
the proper  functioning of our backup  procedures and files.

Insurance Underwriting

Since the establishment of our joint venture with AIG, underwriters
from both companies formed a combined  underwriting process.  UASEG uses information from
insurance  applications to evaluate life insurance  proposals.  For certain applicants,
 a medical examination is required to better analyse the risk.  Property and casualty
 insurance  underwriters  and engineers  assess and evaluate risks prior to quotations
for property and casualty  coverages.  The evaluation of  underwriters  and engineers are
reviewed and  underwritten  at the head office of UASEG.  We draw on our specialized
 knowledge of industry  segments and catastrophe  control,  so that our  underwriting
decisions can take into consideration relevant account data and industry factors.

Funding

Our principal  source of funding is deposits from the Brazilian
 public,  including  individuals and businesses.  At December 31, 2002, our total
deposits were R$26.1 billion, representing 36% of our total liabilities.

We provide four types of deposit accounts:

- demand accounts, which do not bear interest;
- saving  accounts,  which earn  approximately  6% per annum (or
0.5% per month) plus the Taxa  Referencial,  an  interest  rate          established by
the Central Bank;
- time deposits, which earn interest; and
- interbank deposits from financial institutions, which earn the
interbank rate.

Savings  deposits  with banks in Brazil  typically  only pay
 interest  after funds have been left on deposit for at least one calendar month by
individuals  and 90 days by  corporations.  Interest  earned by individuals on all
savings  accounts is income tax free.  Time deposits  either pay a fixed  interest rate
or a floating  rate,  which is typically a percentage of the interbank  rate. The
breakdown between fixed and floating rate  deposits  varies from time to time,  depending
on the interest  rate  expectations  of the market.  At December 31, 2002, 92% of our
time deposits carried a floating interest rate and 8% carried a fixed rate of interest.

The following table sets forth our total deposits, by type and
source, as of December 31, 2000, 2001 and 2002:

|                 | As of December 31, 
|---------------- | -------------------
|                 | 2000               
|                 | (in millions of R$)
|From Customers:  |                    
|Demand deposits  | R$2,262            
|Time deposits    | 6,735              
|Savings deposits | 4,076              
|From Banks:      | 395                
|                 |                    
|Total            | R$13,468           
|                 |                    

The following table sets forth the mix of the retail and wholesale
 deposits at our domestic offices as of December 31,  2000, 2001 and 2002:

|             | As of December 31, 
|------------ | -------------------
|             | 2000               
|             | (in millions of R$)
|            
|Retail       | R$8,460            
|Wholesale(1) | 5,008              
|             |                    
|Total        | 13,468             
|             |                    

(1) Includes deposits from Wealth Management

Other Sources

Due to changes in the  macroeconomic  environment in Brazil,  in
2001 and 2002 our domestic  treasury unit played a very important role in  providing
 funding  to Unibanco,  facilitating  our  growth  strategy  of  developing  market
 segmentation  to permit  the  offering  of differentiated products and services.

We have obtained US  dollar-denominated  lines of credit with our
correspondent  banks to provide a source of trade finance funding for Brazilian
 companies.  As of December 31, 2002, our total import and export funding was
approximately R$4.1 billion,  compared to R$3.4 billion in December 31, 2001.

We borrow  foreign  currency in the  international  markets either
by borrowing  privately or issuing debt  securities for the specific purpose of onlending
such funds in Brazil to Brazilian  corporations  and financial  institutions.  These
 onlendings  take the form of loans  denominated  in  Brazilian  currency  indexed to the
US dollar.  We believe we are one of the most  active  Brazilian  financial institutions
in the Eurobond  market.  As of December 31, 2002, we had  approximately  R$2.2  billion
of securities  outstanding in the Eurobond market, compared to R$2.7 billion as of
December 31, 2001.

In 2002, we completed two long-term foreign currency funding
 operations.  In April 2002,  we issued subordinated debt in the amount of US$200
 million,  with an initial  interest  rate of 9.375% per annum (up to the fifth year) and
an interest rate of 11.7995% per annum from the sixth year to maturity.  In May 2002,  we
securitised  receivables in the amount of US$400 million with a seven-year term at a rate
of quarterly LIBOR plus 0.57%.

BNDES,  the Brazilian  national  development  bank, and its
affiliates  provide  special purpose funding to targeted groups of domestic private
 sector  borrowers.  BNDES  provides  this  funding  through  intermediary  banks.  We
borrow  funds from BNDES or Finame,  the equipment  financing  subsidiary of BNDES. We
participated as onlender in  BNDES-financed  transactions  valued at approximately  R$5.3
billion in 2002, R$4.4 billion in 2001 and R$3.3 billion in 2000.

Technology

Technology  is important to the  execution of several  components
 of our business  strategy.  In order to serve our  customers  needs effectively  and
increase our profits from  operations,  we have invested  heavily in new technology to
enable Unibanco to retain and enhance our  competitive  position in various  markets.  We
intend to continue to invest in  technology  as a means of enhancing the quality of our
 services  and  controlling  costs.  We believe  this  approach to  technology  provides
 Unibanco with a critical  edge over many of our competitors.

During 2002,  Unibanco  invested a total of R$131 million on
 technology,  under  Brazilian  Corporate  Law. Of this total  amount,  we invested:
 R$13  million on Cartão  Unibanco  projects;  R$42  million on our central  computer
 systems;  R$19  million on our website (including  Banco1.net);  R$33 million on our
management  information  system;  R$12 million on upgrading our ATMs and call center; and
R$12 million on implementing the new Brazilian payment system.

We also invested R$53 million on product development, aimed at
satisfying the growing demand from our customers.

We invested a further R$26 million on back-office  upgrading,
 business  support areas and  processing.  During the year, we started the process of
 resizing  our  operational  buildings  and  facilities  to prepare  them to meet the
 expected  growth of our client  base. Expenses relating thereto, including
infrastructure and equipment, amounted to R$53 million.

We have also installed a new security  system,  aimed at increasing
 security  levels at our  facilities  and reducing  robbery-related losses, at a cost of
R$16 million.

One important  aspect of our investments is geared towards
 providing  greater  availability  of our systems to customers.  Our current availability
 levels range from 99% to 100%.  We believe that the quality of our systems is
 equivalent  to those of the most  advanced international financial organizations.

Competition

Banking

The market for financial services in Brazil,  including banking,
 insurance and asset management,  is highly  competitive.  Since 1990, the banking
industry in Brazil  experienced a period of  consolidation.  A number of banks were
liquidated,  many important state banks were privatised and many  medium-sized  private
sector banks were also sold. As of December 31, 2002,  there were 143  multiple-service
banks, 23 commercial banks, 23 investment banks, and numerous savings and loan,
brokerage, leasing and other financial institutions.

The Brazilian  banking  industry has also faced  increasing  new
major  competition  from foreign banks in recent years.  Certain large United States
banks,  such as Citibank and BankBoston,  have long  established a presence in Brazil.
 Large foreign  financial  groups, such as BSCH (Banco Santander  Centro Hispano),  ABN AMRO
and HSBC, have gained entry into the Brazilian market through the acquisition of various
Brazilian financial institutions in the past years.

Banco  Bradesco  and Banco Itaú,  respectively,  are the two largest
 private  sector  banks in Brazil,  followed  by  Unibanco,  Banco Santander-Banespa,
 Banco ABN AMRO Real, Banco Safra and HSBC Bamerindus.  In November 2000, BSCH acquired
 Banespa,  the state bank of São Paulo. In January and February 2002 Banco
 Bradesco  acquired  Banco  Mercantil and Banco Cidade,  respectively,  increasing  the
gap in terms of assets between Unibanco and the larger banks. In  September  and
 December  2002 Banco Itaú  acquired  BBA  Creditanstalt (a  wholesale  bank) and Banco
Fiat, respectively.  On  January 13,  2003 Banco Bradesco S.A.  announced an agreement to
acquire  99.99% of Banco Bilbao Vizcaya  Argentaria Brasil S.A.  In April, 2003 the
acquisition of 95% of Banco Sudameris by ABN Amro Bank was announced.

We also face  competition  to a lesser  extent from public sector
banks,  some of which have a larger  distribution  network and larger customer base than
we do. Public sector banks,  the largest of which are Banco do Brasil S.A. and Caixa  Econômica
 Federal,  accounted for 40.0% of total  lending in the  Brazilian  banking  system as of
 December 31,  2002,  compared to 34.9% as of  December 31,  2001. Public-sector  banks
 operate  within the same legal and  regulatory  framework as the private  sector  banks.
 However,  a significant portion of public sector banks lending activity relates to
sectors,  such as residential  mortgage and agricultural  lending, on which private
sector banks tend not to focus.

See Risk Factors  Factors  Relating to the Brazilian  Banking
Industry  The  increasingly  competitive  environment in the Brazilian financial
services market may negatively affect our business prospects.

Insurance

The Brazilian  insurance  market is highly  competitive,  consisting
 of 93 insurance  groups of varying  sizes at year-end  2002.  Our primary  competitors
 are the Sul América  Group,  Banco  Bradesco,  Porto Seguro and Banco Itaú. For the year
ended December 31, 2002, these four  companies  together  accounted  for 54.4% of
premiums  (based on  information  provided by SUSEP)  written in the Brazilian insurance
 market.  UASEG and the AIG Brasil  companies,  on a combined basis, had a 6.0% share,
 without pension plans. See Insurance and Related  Activities - Insurance.  Although
 companies that operate  nationwide  underwrite  the majority of the business,  we also
face competition from local or regional  companies in various markets because of their
 relatively  cheaper cost structure or because their specialization  in certain  niches.  We
believe that the main  competitive  factors are  insurers  strength,  brand name
 recognition, quality of services and competitive rates.

The opening of the Brazilian  insurance market to foreign insurance
companies in June 1996 increased  competition.  A number of foreign companies have
entered into the Brazilian market, including the Hartford,  Nationwide,  Principal,
 Metropolitan Life, Prudential,  AXA and ING. Despite increased  competition,  we believe
that our joint venture with AIG has strengthened our  competitiveness as a leading
company in the Brazilian insurance market.

Credit Cards

The Brazilian  credit card market is highly  competitive,
 consisting of  approximately  41 credit card issuers of varying  sizes.  The primary
 competitors of Credibanco, Credicard and Fininvest are Banco Itaú,  Banco do Brasil,  Banco
Bradesco,  Santander and Banco ABN AMRO Real. We believe that the primary  competitive
 factors are price (interest  rate,  cardholder  fees and merchant  fees),  card
 distribution network, card acceptance and name recognition.

Co-branded  cards,  particularly  with companies that offer rewards,
 discounts or mileage  programs,  such as airline  companies,  are increasingly being
adopted by credit card companies to expand their client base.

Consumer  finance  companies,  while  targeting  different  economic
 segments of the population than banks generally do, are likely to continue expanding
their credit card activities.

Other  competition  for credit  cards  exists in the form of
 post-dated  checks,  a popular  means of term  payment in Brazil by which customers pay
for merchandise and services with future dated bank checks,  effectively  allowing
 payment over a longer term.  However, we believe  that  credit  cards will  gradually
 replace  post-dated  checks as the  primary  method of term  payment  because of their
convenience, safety and growing acceptance.

Asset Management

The asset management industry in Brazil is still in an early stage
of development  compared with international  markets,  with activity dominated by
commercial  banks offering  fixed-income  funds to retail bank  customers.  Our
 competition  in the sector  includes such traditional  competitors  as Banco do  Brasil,
 Banco  Itaú,  Banco  Bradesco,  HSBC,  Citibank,  CEF  (Caixa  Econômica  Federal)  and
BankBoston.  Recently,  competition has intensified in the  institutional  segment.  As a
result,  management fees in this segment have decreased  significantly,  while fees in
the retail mutual funds segment have remained stable.  Therefore,  a balanced
participation in the retail and institutional  segments will remain a critical success
factor during the expected  consolidation of the asset management industry.

In the institutional  segment,  UAM is seeking to increase assets
under management above the average for the industry.  We believe that UAM has several
competitive advantages, particularly its ability to offer a wide product range and a
strong brand.

In  addition,  UAM  has  differentiated  itself  due  to the
 quality  of its  investment  process,  which  includes  credit  analysis, macroeconomic
 and company  research,  asset  allocation  models and risk control.  Based on its
ranking in the market and economies of scale,  we believe that UAM is well placed to take
full  advantage of the  opportunities  that the  consolidation  of the industry will
bring.

THE BRAZILIAN BANKING INDUSTRY

General

The Brazilian  banking
 industry  consists of several types of  government-owned  and  privately-owned financial
 institutions,  including multiple service banks,  commercial banks, investment banks and
savings and loan  associations,  as well as other  institutions  authorized  to  operate
 by the  Central  Bank,  including brokerages  and leasing  companies.  As of December
31, 2002,  there were  approximately  143  multiple-service banks, 23 commercial banks,
23 investment banks, and numerous savings and loans,  brokerage,  leasing and other
financial institutions.

Government-owned  banking
 institutions  play an important  role in the  Brazilian  banking  industry. These
 institutions hold a significant  portion of the banking systems total deposits and
total assets and are the major  lenders  of  government  funds to  industry  and
 agriculture.  Certain  government-owned  financial institutions  have been  privatized
 during the last years and others have been  included in the  privatization programs
 established by the federal and state governments.  We expect that some of the remaining
 institutions will soon be part of the private  sector  although the principal  financial
 institutions  will remain owned by the government.

Principal Financial Institutions

Public
Sector

The
federal and state  governments  of Brazil control  several  commercial  banks and other
 financial institutions.  The primary purpose of these  institutions is to foster
economic  development,  primarily in the areas of agriculture and industry.  In addition,
state development banks act as regional development agencies.

The
three main public financial institutions controlled by the Brazilian government are:

- Banco do  Brasil,  which  provides a full range of  banking
 products  to both the public and  private               sectors.  Banco do Brasil is the
 largest  commercial  bank in Brazil and the  primary  financial               agent of
the Brazilian government;
- BNDES, a development  bank which  provides  medium- and
long-term  financing to the Brazilian  private               sector,  largely in the area
of industry.  BNDES  provides  funding both directly and  indirectly
              through onlending by other public and private sector financial
institutions; and
- Caixa Econômica  Federal,  which is involved  principally in
deposit-taking and provides financing for               housing and urban infrastructure.

Private Sector

The following are the most
important types of private sector financial institutions:

- multiple-service  banks,  such as Unibanco,  which are licensed
to provide a full range of  commercial               banking,  investment banking
(including  securities  underwriting and trading),  consumer finance               and
other services;
- commercial banks,  which are primarily engaged in wholesale and
retail banking.  They are particularly               active in taking demand and time
deposits and lending for working capital purposes; and
- investment  banks,   which  are  principally   engaged  in
 underwriting   securities  and  structured               transactions.

REGULATION AND SUPERVISION

Principal Regulatory Bodies

There are three principal
regulators in the Brazilian banking industry:

- the National Monetary Council (Conselho Monetário Nacional);
- the Central Bank (Banco Central); and
- the Securities Commission (Comissão de Valores Mobiliários).

We summarise below the
main functions and powers of each of these regulatory bodies:

National Monetary Council

| |  | establishes currency and credit policies                                                          |  | 
| | - | ------------------------------------------------------------------------------------------------- |  | 
| |  | controls lending and capital limits                                                               |  | 
| |  | approves monetary budgets                                                                         |  | 
| |  | establishes foreign exchange and interest rate policy                                             |  | 
| |  | oversees activities related to the stock exchange markets                                         |  | 
| |  | regulates the constitution and operation of financial institutions                                |  | 
| |  | grants authority to the Central Bank to issue currency and establishes reserve requirement levels |  | 
| |  | establishes general directives to the banking and financial markets                               |  | 



|Central Bank | Securities Commission
|------------ | ---------------------

| | implements the currency and credit policies established by the
National Monetary Council |  | implements the securities and exchange policies
established by the National Monetary Council
|- | ---------------------------------------------------------------------------------------- | - | --------------------------------------------------------------------------------------------

| | controls and supervises all public - and private-sector financial institutions by: |  | controls and supervises the Brazilian securities market by:
|- | ---------------------------------------------------------------------------------- | - | -----------------------------------------------------------

|» | having the power to authorise:  the  establishment  and operation of financial
        institutions
       capital increases by financial institutions
       the  establishment  of branches and facilities
        in Brazil and abroad
       mergers   and    acquisitions   of   financial
        institutions | » | having  the  power  to  approve,   suspend  and cancel:  the registration of public companies
  the  authorisation  for  brokers  and dealers to
 operate in the securities market
  public offerings of securities
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|» | establishing:  minimum capital requirements
  compulsory reserve requirements  operational limits | » | supervising the activities of:                                   public companies
                                stock exchanges
                                             commodities and futures exchanges
                                                                  market members
|- | ---------------------------------------------------------------------------------------------------- | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|» | requiring the submission of:   annual audited financial statements
       semi-annual audited financial statements
       quarterly revised financial statements
       monthly unaudited financial statements | » | requiring:  full  disclosure  of material  events  affecting
the market  annual  and   quarterly   reporting   by  public companies
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | - | -------------------------------------------------------------------------------------------------------------------------------------

|» | requiring full disclosure of:
       all credit transactions
       foreign exchange transactions
       export and import transactions
       any other related economic activity | » | imposing penalties
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ------------------

|» | imposing penalties |  | 
|- | ------------------ |  | 

Brazilian Financial System
Legal Reform - Amendment to the 1988 Brazilian Constitution

In May 2003,  an
 Amendment  to the  Brazilian  Constitution  (EC  40/03) was enacted to replace the
existing  restrictive  constitutional  provisions for a general permission to regulate
the Brazilian  financial system by specific  laws.  The EC 40/03 will allow a more
 concentrated  focus on the different  issues thereby leading to greater  efficiency  in
the  financial  system.  The  Brazilian  Congress  may now vote  several law proposals
regulating the financial system which depended on the enactment of such constitutional
amendment.

Principal Limitations and Restrictions on Activities

Restrictions on the
Extension of Credit

Financial  institutions
 may not grant  loans to, or  guarantee  transactions  of,  their  affiliates, except in
some limited circumstances.  For this purpose, the law defines an affiliate as:

- any company which holds more than 10% of the share capital of
the financial institution;
- any company in which the financial institution holds more than
10% of the share capital; or
- managers of the financial institution  (executive officers,
 directors and their family members);  any               company in which these  persons
hold more than 10% of the share capital or in which they are also               managers.

Moreover,  there are
 currently  certain  restrictions  imposed on  financial  institutions  to extend credit
to public-sector  entities,  such as government-owned  companies and governmental
 agencies, in addition to certain limits of indebtedness to which these entities are
subject.

Restrictions on Risk
Concentration

Brazilian law prohibits
 financial  institutions from concentrating  risks in only one person or group of related
persons.  The law prohibits a financial  institution  to extend credit to any person
or group of related persons in an aggregate amount  equivalent to 25% or more of its
adjusted  shareholders  equity.  This limitation applies to all transactions involving
extension of credit, including those involving:

- loans and advances;
- guarantees; and
- the underwriting, purchase and renegotiation of securities.

Restrictions on Investments

Financial institutions may
not:

- hold, on a  consolidated  basis,  permanent  assets in excess
of 50% of their  adjusted  shareholders              equity,  since December 31, 2002.
 This  restriction was fixed at 70% until June 30, 2002 when it               was reduced
to 60%. This  limitation was further  reduced to its current level of 50% on December
              31, 2002;
- own real property, other than real property for its own offices
and branches; and
- acquire  equity  investments in other  financial  institutions
 abroad,  without prior approval by the              Central Bank.

Repurchase Transactions

Repurchase  transactions
 executed in Brazil are subject to  operational  capital  limits based on the financial
 institutions  shareholders  equity,  as adjusted in accordance  with Central Bank
 regulations.  A financial  institution  may  only  hold  repurchase  transactions  in an
 amount  up to 30 times  its  adjusted shareholders  equity.  Within that limit,
 repurchase  operations  involving private securities may not exceed twice the amount of
 adjusted  shareholders  equity.  Limits on  repurchase  operations  involving
 securities backed by Brazilian  governmental  authorities  vary in  accordance  with the
type of security  involved in the transaction and the perceived risk of the issuer as
established by the Central Bank.

Foreign Currency Loans

Upon   registering   with
  the   Central   Bank,   financial    institutions   may   borrow   foreign
currency-denominated  funds in the international  markets for any reason  whatsoever
 without the prior written consent of the Central Bank,  including  on-lending  such
funds in Brazil to Brazilian  corporations  and other financial  institutions.  Banks
make those  on-lending  transactions  through  loans  denominated  in Brazilian currency
and indexed to the foreign currency in which the original loan was denominated.

The Central Bank may
 establish  limitations  on the term,  interest  rate and general  conditions  of
foreign-currency  loans. It frequently  changes these  limitations in accordance with the
economic  environment and the monetary policy of the Brazilian government.

Foreign Currency Position

Only those  institutions
 authorised  by the Central Bank to operate in the foreign  exchange  markets may
 purchase  and sell  foreign  currency in Brazil.  The Central  Bank imposes a limit on
the net exposure of Brazilian  financial  institutions and their affiliates to assets and
debt subject to foreign currency and gold fluctuation.  The limit is currently equivalent
to 30% of the institutions adjusted shareholders equity.

Management of Third Party
Assets

The  Securities
 Commission  supervises  the  management of third party assets.  Only  individuals  or
entities authorised by the Commission may act as managers of third party assets.

Financial  institutions
 must  segregate  the  management  of third  party  assets  from  their  other
activities.  These  institutions  must  appoint an  officer as the agent  responsible
 for the  management  and supervision of the third party assets.

The Central Bank,  except
in very specific  circumstances,  has  prohibited  those  institutions  that manage third
party assets and their  affiliated  companies from investing in fixed rate income funds
which they also manage.  The Securities  Commission  allows  investments in equity funds.
 There are some rules  regarding mutual funds  portfolio  diversification  and
 composition,  which aim to reduce  exposure to certain  types of risk.

Pursuant to a change
 introduced by the Central Bank in February  2002,  fund managers are required to mark
their  fixed-income  securities  to market and results in such funds  portfolio  assets
must be accounted for at their fair market value, instead of at their expected yield to
maturity, which was the former criteria.

Regulations  Intended to Ensure the Safety and  Soundness of
Financial  Institutions  and the Financial System

Internal Compliance
Procedures

All financial institutions
must establish internal policies and procedures to control:

- their activities;
- their financial, operational and management information
systems; and
- their compliance with all applicable regulations.

The board of  executive
 officers  of a financial  institution  is  responsible  for  implementing  an effective
structure of internal controls by defining  responsibilities  and control procedures and
establishing corresponding  goals at all levels of the  institution.  The board of
 executive  officers is also  responsible for verifying compliance with internal
procedures.

Either  an  internal
 audit  department,  which  reports  directly  to the board of  directors  of the
institution,  or the institutions  external auditors,  must be responsible for
monitoring the internal control system.

Independent Accountants
and Audit Committee

Regulation  enacted by CMN
on May 30th,  2003  established  new  requirements  in respect of financial institutions independent
accountants and created a mandatory Audit Committee.

All financial
 institutions  must be audited by independent  accountants.  The independent  accountant
can only be  hired if it is  registered  with the  Securities  Commission,  certified  in
 specialised  banking analysis  by the Federal  Board of  Accounting  (Conselho  Federal
de  Contabilidade)  and the  Institution  of Brazilian  Independent  Auditors  (Instituto
 dos  Auditores  Independentes  do Brasil) and if it meets several strict  requirements
 that  assure its  independence.  Moreover,  financial  institutions  must  replace
 their independent  accounting  firm at least  every five  consecutive  fiscal  years and
a former  accountant  can be rehired only after three  complete  fiscal  years since its
prior  service.  The  financial  institutions  must indicate  a  senior  manager  to be
 responsible  for  compliance  with  all  regulations  regarding  financial statements
and auditing.

In addition to the
auditing report, the independent accountants must report:

- an  evaluation  of the  financial  institutions  internal
 controls and risk  management  procedures,               including its electronic data
processing system, showing all deficiencies found.
- a description of the financial  institutions  non-compliance
 with applicable  regulation material to               the financial institutions
financial statements or activities.

All financial
 institutions with Reference Capital or consolidated  Reference Capital equal or greater
than R$200 millions must create,  until December 31st, 2003, an internal audit
 committee.  The audit committee must be created by the financial  institutions  bylaws
and shall be integrated by at least 3 individuals,  one of them specialised in accounting
and auditing.  All members must meet certain  requirements  that assure their
independence. The audit committee reports directly to the board of directors and its main
function is to:

- appoint the independent accountant to be elected by the board
of directors;
- supervise the independent accountants work;
- request the independent accountants replacement when it deems
necessary;
- review the financial statements for each semester, the
management and the audit reports;
- supervise accounting and auditing,  including their compliance
with internal procedures and applicable               regulation;
- evaluate the management compliance with the independent
accountants advises;
- receive and publish  information  regarding  non-compliance
 with  internal  procedures  or applicable               regulation;
- advice management regarding internal controls and procedures to
be adopted; and
- meet with  management,  independent  accountants and internal
 accountants to verify their  compliance               with the audit committee advises

The independent
 accountant and the audit committee must  immediately  communicate to the Central Bank
any event  that may  materially  adversely  affect  the  financial  institutions
 status,  including  material non-compliance with applicable regulation and any king of
fraud.

Capital Adequacy Guidelines

Brazilian  financial
 institutions must comply with guidelines similar to those of the Basle Accord on
risk-based  capital  adequacy.  The requirements  imposed by the Central Bank differ from
the Basle Accord in a few aspects.  Among other differences, the Central Bank:

- imposes a minimum  capital  requirement  of 11% in lieu of the
8% minimum  capital  requirement of the               Basle Accord;
- requires an additional  amount of capital with respect to
off-balance  sheet interest rate and foreign               currency swap operations; and
- assigns  different  risk weights to certain  assets and credit
 conversion  amounts,  including a risk               weighing of 300% on tax credits
relating to income and social contribution taxes.

Under the  Central  Bank
 regulation,  the net worth (or  Reference  Capital) of  Brazilian  financial
institutions  is  represented by the sum of Tier 1 and Tier 2 capital and is taken into
 consideration  for the purposes of defining their operational limits.

- Tier 1 capital  corresponds  to net worth plus  positive
 result  account  minus (1)  negative  result               account,  excluding
 revaluation  reserves,  contingency  reserves  and special  profit  reserves
              related to mandatory  dividends  not yet  distributed,  and (2) the amounts
 related to preferred               cumulative stock and preferred redeemable stock.
- Tier 2 capital  corresponds to revaluation  reserves,
 contingency  reserves,  special profit reserves               related to  mandatory
 dividends  not yet  distributed,  preferred  cumulative  stock,  preferred
              redeemable stock,  subordinated debt and hybrid  instruments.  The total
amount of Tier 2 capital               may not  exceed  the total  amount of Tier 1
 capital,  provided  that:  (i) the total  amount of               revaluation  reserves
in Tier 2 capital may not exceed 25.0% of the Reference  Capital;  (ii) the
              total  amount of  subordinated  debt in Tier 2 capital  plus the amount of
 preferred  redeemable               stock, in each case originally  maturing in less
than 10 years,  may not exceed 50.0% of the Tier               1 capital amount;  and
(iii) a 20.0% reduction shall be applied to the amount of the subordinated
              debt and  preferred  redeemable  stock in Tier 2 capital  every year for
the 5 years  immediately               preceding the respective maturity.

Brazilian  financial
 institutions  may  elect  to  calculate  their  Reference  Capital  on  either a
consolidated or unconsolidated basis.

Capital Structure

Financial  institutions
 must be organised as corporations.  As corporations,  they are subject to all the
provisions of Brazilian  Corporate Law and, if they are registered as public companies,
 to the supervision of the Securities Commission.

Financial  institutions
 may divide  their  capital  into  voting  and  non-voting  shares,  although, non-voting
shares may only represent up to 50% of their total capital.

Treatment of Overdue Debts

Under Central Bank
 regulations,  banks have to classify  their loans into 9 categories,  ranging from AA to
H, in  accordance  with their risk.  Risk  assessment  includes an  evaluation  of
borrower and guarantor (including  their financial  condition,  aggregate  indebtedness,
 cash flow,  management,  etc.) and the loans themselves  (including the nature and
purpose of the transaction,  nature of guaranties and their amount).  The regulations
specify, for each category of loans, a minimum provision, as follows:

|Loan Rank | Minimum Provision
|--------- | -----------------
|AA        |                 
|A         | 0.5%             
|B         | 1.0%             
|C         | 3.0%             
|D         | 10.0%            
|E         | 30.0%            
|F         | 50.0%            
|G         | 70.0%            
|H(1)      | 100.0%           

|(1) | Banks must write-off loans 6 months after they are ranked H.
|--- | ------------------------------------------------------------

In general, banks must
review the loan classifications annually.  However, banks must review loans:

- Semi-annually  in any case  where the  aggregate  amount of
loans  extended  to a single  borrower  or               economic group exceeds 5% of the
banks adjusted shareholders equity; and
- monthly in the case of loans that become past due.

For loans that are past
due, the regulations establish maximum classifications, as follows:

|Number of Days Loan is Past Due(1) | Minimum Classification
|---------------------------------- | ----------------------
|15 to 30 days                      | B                     
|31 to 60 days                      | C                     
|61 to 90 days                      | D                     
|91 to 120 days                     | E                     
|121 to 150 days                    | F                     
|151 to 180 days                    | G                     
|More than 180 days                 | H                     

|(1) | In the case of loans  with a  maturity  in  excess of 36  months,  the
     period is doubled.
|--- | ----------------------------------------------------------------------------------------------

Banks are required to
 determine,  on a monthly  basis,  whether any loans must be  reclassified  as a result
of these maximum classifications, and, if so, must adjust their provisions accordingly.

Finally,  banks have to
make their  lending and loan  ranking  policies  available to the Central Bank and to
their  independent  accountants.  They must also provide  information  relating to their
loan  portfolio along with their financial statements, including:

- breakdown of activities and nature of the borrower;
- maturities of the loans;
- amounts of rolled-over, written-off and recovered loans;
- loan portfolio diversification in accordance with the loan
classification; and
- overdue loans  divided between loans past due up to 15 days
and loans past due over 15 days.

Central Credit Risk System

Financial  institutions
 are  required to provide  information  to the  Central  Bank  concerning  the extension
of credit and guarantees rendered to clients.  The information is used to:

- strengthen the Central Banks supervisory capacity;
- make  information  concerning  debtors  available  to other
 financial  institutions  (however,  other               institutions can only access
information subject to clients authorisation); and
- prepare macroeconomic analyses.

If the aggregate amount of
a clients  transactions  exceeds  R$20,000.00,  the financial  institution must provide
the Central Bank with:

- the identity of such customer;
- a breakdown  of such  customers  transactions,  including  any
 guarantees  rendered by the bank with               respect to his obligations; and
- information  regarding the clients credit risk classification
based on the credit risk classification               policy described above.

For transactions below or
equal to R$20,000.00,  the financial  institution must only report the total amount of
transactions per client.

Anti-Money Laundering Law

According
to the Brazilian anti-money laundering law, financial institutions must:

- maintain up-to-date records regarding their customers;
- maintain records of any transactions involving financial
instruments,  securities,  precious metals or               any other asset convertible
into money, in excess of R$10,000.00;
- review transactions or proposals with characteristics which may
indicate the existence of a crime;
- keep records of operations with checks for a period of 5 years;
and
- communicate to the relevant authorities, within 24 hours, any
suspicious transaction.

In addition, the Brazilian
anti-money laundering law created the Financial Activity Control Council.

Anti-Tax Evasion Law

Under  legislation
 recently  enacted  by  Congress,  and  corresponding  regulations  adopted  by the
Brazilian  Government,  the Brazilian fiscal authority is now authorised to require
 financial  institutions to provide information  generally protected by bank secrecy
without judicial  authorisation,  as long as they have strong  circumstantial  evidence
that a customer has engaged in tax evasion.  Such evidence may be  represented by, among
others:

- declaration, by the customer, of  transactions with a value
lower that their market value;
- loans acquired from sources outside the financial system;
- transactions involving tax havens;
- expenses or investments which exceed the declared available
income;
- overseas  currency  remittances  through  non-resident
 accounts  (CC5) in  amounts  which  exceed the               declared available income;
and
- legal  entities  which have their  registration  with the
 General  Taxpayers  Registry  cancelled  or               declared null.

Other than in the
circumstances  described above,  information protected by bank secrecy laws can only be
furnished in compliance with a court order or an order by a Congress Inquiry Committee
(CPI).

Regulations Affecting
Liquidity in the Financial Market

Reserve Requirements

The  Central  Bank
 currently   imposes   several   compulsory   reserve   requirements  on  financial
institutions.  Financial  institutions  must deposit those  reserves  with the Central
 Bank.  The Central Bank uses reserve  requirements as a mechanism to control the
liquidity of the financial system.  Historically,  the reserves  imposed on demand
 deposits,  savings  deposits and time  deposits  accounted for  substantially  all
amounts  required to be deposited  with the Central Bank.  See Item 5.  Operating  and
 Financial  Review and Prospects   Macroeconomic  Factors  Affecting  Our  Financial
 Condition  and Result of Operations  Effect of Government  Regulation on Our Financial
 Condition and Results of Operations - Reserve and  Compulsory  Deposit Requirements.

Taxation of Financial Transactions

Temporary Contribution on
Financial Transactions (CPMF)

In  August  1996,  the
 Brazilian   government   imposed  the  Temporary   Contribution  on  Financial
Transactions  (Contribuição  Provisória sobre Movimentações  Financeiras  CPMF) at a
maximum rate of 0.25% and for a maximum  period of two years which ended in January
 1999.  In March 1999,  Constitutional  Amendment No. 21 extended the CPMF for another
 three years,  changing the maximum rate to 0.38% for the first twelve  months (which
 started  on June 17,  1999) and to 0.30% for the  following  period  (starting  on June
18,  2000).  In December 2000, a Constitutional  Amendment  created a special fund to
combat poverty,  which is to be funded by an additional 0.08% to the CPMF,  implemented
on June 18, 2001. In June 2002,  Constitutional  Amendment No. 37 extended  the  period
 for the  collection  of the  CPMF  until  December 31,  2004 at a rate  of  0.38%  until
December 31,  2003  and at a rate of  0.08%  from  January 1,  2004  until  December 31,
 2004.  The  Brazilian government  may change the  applicable  rate at any time,  subject
to the  limits  established  by the  Federal Constitution.

The CPMF is generally
 levied upon any debit to bank  accounts.  This creates an incentive for clients to
reduce transactions in the financial system and short-term investments.

Tax on Financial
Transactions (IOF)

The Tax on Financial
 Transactions (Imposto sobre Operações Financeiras  IOF) is  comprised  of four  different  types,  each  with
 different  rates depending on the kind of transaction.  At present, actual rates are
much lower than their legal limit.

Generally the IOF is
imposed upon the following transactions, at the following rates:



|Transaction | Maximum legal rate                        | Present rate
|----------- | ----------------------------------------- | ------------
|           | credit extended by                        | 1.5% per day
|            | financial institutions                    |             
|           | credit extended by non-financial entities |             
|           
|           | transactions relating to securities and   | 1.5% per day
|            | transactions involving                    |             
|            | gold as a financial                       |             
|            | asset                                     |             
|           
|           | insurance transactions                    | 25%         
|            | entered into by insurance companies       |             
|           
|           | foreign exchange                          | 25%         
|            | transactions                              |             
|            |                                           |             

|(1) | There are exceptions relating to real estate funds and to funds which invest in emerging companies (fundos de investimento em empresas emergentes).            
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | There are several exceptions which are taxed at 0%, including transactions by financial institutions, by portfolios of investment funds and by government entities.
|(3) | There are several exceptions which are taxed at 0%, including reinsurance transactions, export insurance and governmental insurance.                               

Regulations Affecting Our relationship with Our Clients

The  relationship  between
 financial  institutions  and their clients is regulated in general by laws applicable
 to  all  commercial  transactions,   specially  the  Brazilian  Civil  Code.  However,
  regulation established by CMN and the Central Bank address  specific  issues  relating
to banking  activity and contracts, complementing the general regulation.

The Consumer Defense Code
and the Banking Client Defense Code

In 1990,  the  Brazilian
 Consumer  Defense  Code was enacted to  establish  rigid rules to govern the
relationship  with between  product and service  providers and consumers and to protect
final  consumers.  Some banking  clients,  particularly  retail  clients,  have entered
into lawsuits  against  financial  institutions claiming the  application  of the
Brazilian  Consumer  Defense Code to banking  transactions,  but the superior courts have
not yet decided such issue. We understand that financial  institutions  are subject to
the specific regulation  of the National  Monetary  Council in relation to their
 clients.  In fact,  on July 26, 2001,  the National  Monetary  Council  enacted  the
 Banking  Client  Defense  Code in  order  to  specifically  regulate relationship
between financial institutions and their clients.

The New Civil Code

Law No. 10,406 dated
January 10, 2002,  instituted a new Brazilian  Civil Code (the New Civil Code), which
took  effect on January  11,  2003 and  replaced  the prior  Civil Code and great part of
the  Commercial Code. The New Civil Code is very  wide-ranging in application,  governing
 individuals,  corporations and other legal entities,  and has provisions which affect,
 among others,  contracts,  including  guarantees,  property, family and succession law.

Contractual  obligations
 and guarantees  entered into before January 11, 2003 will remain governed by the prior
 Civil Code  solely in  relation  to their  existence  and  validity;  although  the
 effects of such agreements  as of January 11, 2003 will be  governed by the New Civil
Code.  The changes  made by the New Civil Code will be both in scope and scale in Brazil,
 but are not expected to have a material  impact on our current business.

Bank Failure

Intervention,
Administrative Liquidation and Bankruptcy

The  Central  Bank may
 intervene  in  operations,  perform  administrative  liquidation  or,  in some
circumstances,  require the  bankruptcy of any  financial  institution  except those
 controlled by the federal government.  The Central Bank may intervene if there is a
material risk for  creditors and  liquidation  can be avoided.

Repayment of Creditors in
a Liquidation

In the  liquidation of a
financial  institution,  employees  wage and indemnities and tax claims have the highest
 priority  of any claims  against  the  bankrupt  estate.  The Credit  Insurance  Fund is
a deposit insurance  system which  guarantees a maximum amount of R$20,000 of deposit and
credit  instruments  held by an individual  against a financial  institution (or against
 financial  institutions of the same financial group). The Credit  Insurance  Fund is
funded  principally  by mandatory  contributions  from all  Brazilian  financial
institutions  that work with  customer  deposits.  The payment of unsecured  credit and
 customer  deposits not payable  under the Credit  Insurance  Fund is subject to the
prior  payment of all  secured  credits  and other credits to which specific laws may
grant special privileges.

Brazilian Payment and
Settlement System

In  December  1999 the
 Brazilian  government  released  new rules for the  settlement  of payments in Brazil,
 based on the guidelines  adopted by the Bank of  International  Settlements  (BIS).
 After a period of tests and gradual  implementation,  the  Brazilian  Payment and
 Settlement  System began  operations  in April 2002. However,  full  implementation is
expected to be gradual,  therefore allowing the entire system to adjust and minimising
 potential  settlement  risks. The Central Bank and CVM have the power to regulate and
supervise this  system.  According to these rules,  new clearing  houses will be created
and all clearing  houses will be required to adopt  procedures  in order to reduce the
 possibility  of  systemic  crisis and to reduce the risk currently  supported by the
Central  Bank.  The most  important  principles  of the new  Brazilian  payment and
settlement system are:

- There  will be two main  payment  and  settlement  systems:
 real time  gross  settlements,  using the               reserves  deposited  with the
Central Bank;  and deferred net  settlements,  through the clearing               houses;
- The clearing houses, with some exceptions, will be liable for
the payment orders they accept; and
- Bankruptcy laws do not affect the payment orders made through
the credits of clearing houses,  nor the               collateral  granted to secure
 those  orders.  However,  clearing  houses have  ordinary  credits               against
any participant under bankruptcy laws.

Foreign Investment and the Federal Constitution

Foreign Banks

The Federal  Constitution
 prohibits foreign financial  institutions from establishing new branches in Brazil,
 except  when duly  authorised  by the  Brazilian  government.  A foreign  financial
 institution  duly authorised  to operate in Brazil  through a branch or a  subsidiary
 is subject to the same rules,  regulations and requirements that are applicable to any
Brazilian financial institution.

Foreign Investment in
Brazilian Financial Institutions

The Federal  Constitution
 permits foreign  individuals or companies to invest in the voting shares of Brazilian
financial institutions only if they have specific authorisation from the Brazilian
government.

Foreign  investors
 without specific  authorisation may also acquire publicly traded non-voting shares of
Brazilian financial institutions or depositary receipts offered abroad representing
non-voting shares.

Supervision in Other Jurisdictions

We have branches,
 subsidiaries and  representative  offices in several other  jurisdictions,  such as New
York,  Miami,  London,  Luxembourg,  Paraguay,  Cayman  Islands and the Bahamas,
 including  some  entities acquired in connection with the acquisitions of Credibanco and
Banco Bandeirantes.

The Central Bank
 exercises  global  consolidated  supervision  over such branches,  subsidiaries  and
representative  offices.  Furthermore,  in most  cases,  we had to obtain  governmental
 approvals  from  local central banks and monetary  authorities in such  jurisdictions
 before commencing  business and in all cases we are subject to local authorities
supervision.

Insurance Market

Principal Regulatory
Entities

Two  regulatory  agencies
 oversee the Brazilian  insurance  system:  the National  Private  Insurance Council
 (Conselho   Nacional  de  Seguros  Privados    CNSP),  and  the  Private  Insurance
  Superintendency (Superintendência  de Seguros Privados  SUSEP).  The SUSEP is
responsible for implementing and supervising the CNSPs policy and ensuring compliance
with this policy by insurance companies and brokers.

Insurance

Insurance  companies
 require  government  approval to operate,  as well as specific approval from the SUSEP
for each of their products.  Insurance companies may sell policies only through qualified
brokers.

Insurance  companies must
set aside  reserves,  funds and  provisions in accordance  with the criteria established
by the CNSP. The  investments  backing up the reserves must be diversified.  A
substantial  portion of the assets in which  insurance  companies can invest in are
 securities.  As a result,  insurance  companies are major  investors in the  Brazilian
 financial  markets and are subject to a series of rules and  conditions imposed by the
CMN regarding the investment of technical reserves.

Insurance companies,
subject to certain specific exceptions, are prohibited from:

- acting as financial institutions by extending credit or issuing
guarantees;
- trading in securities; or
- investing outside of Brazil.

Insurance  companies  must
 operate  within  technical  limits  set forth by SUSEP  pursuant  to rules established
 by the CNSP.  The rules take into account the economic and  financial  situation of the
 insurance companies,  the technical  conditions of their  respective  portfolios and the
results of their operations with IRB (as defined below).

Reinsurance

IRB-Brasil  Resseguros  S.A.  IRB had a monopoly over the Brazilian  reinsurance  market from 1932
through 1996. In 1996, the monopoly was formally  eliminated.  However,  because  further  regulations  need
to be enacted in order to create a competitive  reinsurance market, IRB still is the reinsurance  monopolist
in Brazil.

All risks in excess of the
 companies  maximum  retention  limits  established  by the SUSEP  must be compulsorily
 reinsured or co-insured.  According to industry  practice,  insurance  companies also
voluntarily reinsure  or  co-insure  a portion of its  exposure, regardless of whether
they meet the maximum retention limits.  Reinsurance  is  mainly  used  to
 reduce  exposure  to  risk  that  the  insurance  companies  face, contributing to
maintain the operational capacity of such companies.

Reporting Requirements

Insurance  companies  must
file unaudited  monthly and audited  semiannual and annual reports with the SUSEP.

Liquidation

Insurance  companies  are
exempt from  ordinary  bankruptcy  procedures  and instead  follow a special procedure
 administered  by the SUSEP.  Liquidation  may be either  voluntary  or  compulsory.  The
Minister of Finance has the authority to institute compulsory liquidation.

Foreign Participation in
the Insurance Market

There is  currently  no
rule  restricting  foreign  investment  in  insurance  companies.  The  direct
participation  of  foreign  companies  (as well as those of private  Brazilian
 companies)  in the  reinsurance market is pending regulation by an implementing law.

Securities Market

The  Brazilian  securities
 market is  regulated  by the CMN and the  Securities  Commission.  Current regulations
impose several obligations on publicly traded corporations, such as:

- registration requirements;
- disclosure obligations;
- insider trading prohibitions;
- special qualification requirements for managers; and
- rules protecting minority shareholders.

On October 31, 2001 Law
No. 10,303  amended the  Corporate  Law,  granting new  protection to minority
shareholders and imposing new requirements on publicly traded corporations.

ORGANIZATIONAL STRUCTURE

The following chart sets
forth information about our significant subsidiaries, or Group:(1), (2)

|(1) | The percentages refer to the participation in total capital.                                                               
|--- | ---------------------------------------------------------------------------------------------------------------------------
|(2) | All corporations have been incorporated in Brazil unless otherwise noted.                                                  
|(3) | This percentage includes treasury shares. If excluded, the participation of Unibanco Holdings in Unibanco would be 60.202%.
|(4) | These corporations are mainly controlled by Unibanco Representação e Participações Ltda.                                   
|(5) | These corporations are mainly controlled by Unipart Participações Internacionais Ltd.                                      
|(6) | The total voting shares of this corporation was acquired on April 26, 2002.                                                
|(7) | Company resulting from the merge of Banco Credibanco S.A. into Banco Bandeirantes S.A.                                     

Property, Plant and Equipment

Our  principal  executive  offices are located in São Paulo,
 Brazil.  We own a portion of these offices and lease the  remainder.  The three main
offices, which we own, and the main activities carried on in each of them are:

- Unibanco Building (22,217 m2):  Head offices and main
administrative areas
- CAU (Unibanco Administrative Center  45,673 m2):  Data
Processing Center, Information Technology, Accounting, Human Resources
- Barão de Iguape Building (20,772 m2):  Back-offices and 30
Hours Telephone Center

We have also a number of other administrative offices, in the main
Brazilian cities, most of which are also leased.

Of our total branches,  32% are owned by our Group and 68% are
leased.  We lease most of our branches under renewable leases with terms averaging five
years.

ITEM 5. OPERATING AND
FINANCIAL REVIEW AND PROSPECTS

OVERVIEW

Founded in 1924, Unibanco is
Brazils oldest private sector bank. From our longstanding position as one of the
nations leading wholesale banks, we have expanded our operations to become a full
service financial institution providing a wide range of financial products and services to
a diversified individual and corporate customer base throughout Brazil. Our businesses now
comprise Retail Banking, Wholesale Banking, Insurance and Wealth Management.

Principal Revenues and
Expenses

The following classification of
revenues and expenses is based on our consolidated financial statements.

Revenues.
          We have four main sources of revenues:

- Interest income. We earn interest income from our
interest-earning assets, including our loans, securities and Central Bank compulsory
deposits.
- Fee and commission income. Historically, we have earned service
fee revenues from our Wholesale Banking activities, such as investment banking, corporate
and trade financing, brokerage, mergers and acquisitions and project finance. More
recently, due to strategic acquisitions and our growing presence in retail banking,
including the consumer finance and credit card sectors, we have increased fee revenues in
our retail business. Through our Wealth Management business, primarily Unibanco Asset
Management, we earn asset management fees, based principally on the amount of assets
under our management.
- Insurance premiums, private retirement plan and pension
investment contracts income.  Unibanco AIG Seguros receives premiums on the sale of life
insurance and other insurance products, as well as insurance and investment product fees
on life insurance. We also manage funds that consist of pension and retirement
contributions, investment contracts made by institutional clients and individuals through
Unibanco AIG Previdência S.A., or UASP.
- Non-interest income. We earn income relating to our equity in
our unconsolidated companies, primarily Credicard and Redecard S.A., as well as from our
foreign currency transactions and other non-interest income.

Expenses.
          Our main expenses, which include both cash and non-cash items, are:

- Interest expense. We incur interest expense on our
interest-bearing liabilities, such as deposits, short-term borrowings and long-term debt.
- Provisions for loan losses. We establish provisions for loan
losses based on the size of our loan portfolio and our expectations regarding the ability
of our customers to repay their loans.
- Non-interest expense. We incur expenses relating to salaries
and benefits; administrative expenses; insurance, private retirement plan and investment
contract expense; and other non-interest expenses.

Accounting for Results of
Unconsolidated Affiliates

In accordance with U.S. GAAP, our
equity in results of unconsolidated companies consists primarily of our proportionate
interest in the results of affiliated companies whose results of operations are not
consolidated. Under U.S. GAAP, we only consolidate the results of companies in which we
have a controlling interest (either through a majority voting interest, or through the
existence of other control factors). See Notes 2(j) and 11 to our audited consolidated
U.S. GAAP financial statements.

Our most significant interests in
unconsolidated companies during 2002 were:

- a 33.3% equity interest in Credicard, the largest issuer of
credit cards in Brazil; and
- a 31.9%  equity  interest  in  Redecard  S.A.,  Brazil's
 largest  processor  of debit  card transactions.

Prior to December 1, 2000, when we
acquired the remaining shares, we held a 49.7% equity interest in Fininvest and prior to
April 2002 when we acquired the remaining 24.5% of the voting shares, we held, a 75.5%
equity interest in Unicorp.

For additional information concerning
the contributions to our net income generated by unconsolidated companies, see
 Results of Operations for Year Ended December 31, 2002 Compared to Year Ended
December 31, 2001  Non-Interest Income and  Results of Operations
for Year Ended December 31, 2001 Compared to Year Ended December 31, 2000 
Non-Interest Income.

Strategic Transactions

In recent periods we have made
several acquisitions and investments designed to help solidify our position in the
Brazilian market as a leading full service financial institution. In particular, during
2000, we expanded our financial, insurance and credit card activities through three
acquisitions:

- 100% of Credibanco;
- 100% of Banco Bandeirantes; and
- the remaining 50% of Fininvest that we did not already own.

Although the impact of these
acquisitions on our assets and liabilities is fully reflected in our consolidated balance
sheet as of December 31, 2000, our results of operations for 2000 reflect only nine months
of results, in the case of Credibanco, and only one month of results in the case of Banco
Bandeirantes and Fininvest on a fully consolidated basis. The contributions of these
companies to our consolidated results of operations are fully reflected in 2001 and 2002.

Credibanco Acquisition. We
acquired Credibanco, a small wholesale bank, in April 2000 for R$108 million. Our purchase
of Credibanco was an opportunistic acquisition in keeping with our strategic goal of
maintaining leading market positions in each of our Wholesale Banking segments. We
accounted for the acquisition as a purchase and the results of operations of Credibanco
are included from the date of purchase in our consolidated financial statements. The
acquisition resulted in goodwill in the amount of R$41 million, which was being amortized
over 5 years up to December 31, 2001, at which time amortization, using the 5-year period,
ceased in accordance with SFAS 142. We adopted SFAS 142 effective January 1, 2002,
goodwill was tested for impairment at January 1st and at December 31, 2002 and
no impairment charges were recorded. See  Critical Accounting Policys and Estimates 
Impairment of long-lived assets, goodwill and other intangible assets for a
discussion of SFAS 142. We integrated Credibancos operations with ours during the
course of 2000. Credibanco has operated the Cartão Unibanco credit card business
since April 2001, when Cartão Unibanco, which until that point had been a separate
legal entity, was merged into Credibanco. Beginning in the second quarter of 2001, the
Cartão Unibanco operations have been Credibancos sole business. In April 2003
Credibanco was merged into Bandeirantes and after the approval of the Brazilian Central
Bank will change the name to Unicard Banco Múltiplo S.A.

Banco Bandeirantes
Acquisition. We acquired Banco Bandeirantes, which was primarily a retail bank, in
December 2000 from Caixa Geral de Depósitos in exchange for 17,533,606,262 shares
of Unibanco and our parent Unibanco Holdings S.A., which had a market value at the
acquisition date of R$1.1 billion. See Item 4. Information on the Company 
Principal Business Activities  Retail Banking  Acquisitions of Banco
Bandeirantes and Fininvest. As a result of the transaction, Caixa Geral de
Depósitos owns directly and indirectly a 12.25% equity interest in us. We accounted
for the acquisition as a purchase and the results of operations of Banco Bandeirantes are
included in our consolidated financial statements from December 1, 2000. The acquisition
resulted in goodwill in the amount of R$611 million, which was being amortized over 10
years up to December 31, 2001, at which time amortization, using the 10-year period,
ceased in accordance with SFAS 142. We also paid as a result of the acquisition R$450
million for a customer relationship intangible, which is being amortized over 5 years.
Goodwill was tested for impairment at January 1st and at December 31, 2002 and
no impairment charges were recorded, as well as, we evaluated the live of customer related
intangibles and no change was made regarding lives upon adoption of SFAS 142.

We substantially completed the
process of integrating Banco Bandeirantes in October 2001. This process involved the cost
reductions for the year ended December 31, 2001 equivalent to 42% of the total annualized
costs of Banco Bandeirantes prior to the acquisition, exceeding our initial projections of
35%; and the integration, conversion or closing of 523 points of sale, including
overlapping branches and corporate-site branches.

When we acquired Banco Bandeirantes,
for U.S. GAAP purposes, we estimated that the restructuring charges directly related to
the acquisition would total R$87 million, which we recorded as a liability and accrued as
part of goodwill on our consolidated balance sheet as of December31,2000. During 2001, we
completed the integration of Banco Bandeirantes into our operations, and utilized the
entire restructuring reserve. Additionally, we recorded in 2001, R$14 million of further
expenses relating to the integration of Banco Bandeirantes.

Our acquisition of Banco Bandeirantes
has increased the scale of our Retail Banking business. The increase in the number of
customers and volume of transactions has lowered our average cost of transactions. This
has resulted in cost reductions relative to the annualized costs of Banco Bandeirantes
prior to the acquisition. Through the increase in our customer base we also increased our
deposits, an important source of funding.

The acquisition of Banco Bandeirantes
has allowed us to expand our distribution network. Banco Bandeirantes had approximately
25% of its points of sale in the northeast of Brazil, a region in which we were interested
in expanding. In addition, approximately 50% of its points of sale were in southeast
Brazil, an important market in the retail banking business. Banco Bandeirantes also has
corporate-site branches in hospitals, private schools and universities, which we view as
potential areas of growth since these sites provide access to a large customer base.

Fininvest Acquisition. In
December 2000 we acquired from Icatú Group its 49.9% equity interest in Fininvest
for R$483 million. Fininvest is the leading consumer credit company in Brazil servicing
lower income individuals. See Item 4. Information on the Company  Principal
Business Activities  Retail Banking  Acquisitions of Banco Bandeirantes and
Fininvest. As a result of this transaction, we now own 100% of Fininvest. We
accounted for the acquisition as a purchase, and the results of operations of Fininvest
have been included in our consolidated financial statements since December 1, 2000. Prior
to November 30, 2000, we accounted for the results of Fininvest using the equity method.
The acquisition resulted in goodwill in the amount of R$405 million, which was being
amortized over 10 years, up to December 31, 2001, at which time amortization, using the
10-year period, ceased in accordance with SFAS 142. Goodwill was tested for impairment at
January 1st and at December 31, 2002 and no impairment charges were recorded.

We began the process of integrating
Fininvest in January 2001, which is ongoing. The integration process is being conducted in
a manner designed to preserve Fininvests strong brand name and enhance its strategic
positioning. Through Fininvest we intend to increase our market share in the lower income
segment.

Our acquisition of Fininvest has
affected the quality of our loan portfolio, since the acquisition has significantly
increased our exposure to the lower income segment of the retail market. This segment
generally features a higher volume of transactions, higher spreads and higher default
ratios than other segments. As economic conditions improve we expect to be able to
increase the volume of transactions in this market. We also expect to see greater back
office synergies through combining the back office activities of our retail finance
portfolios and credit card businesses.

Other Transactions. In
addition to the acquisitions described above, since January 1, 2000, we have engaged in a
number of other strategic transactions, including disposals:

- In February 2000 we sold our 10% stake in Zip.net to PT
Multimedia, a subsidiary of Portugal Telecom. Zip.net was the third largest generic
Internet portal in Brazil. The sale of our interest in Zip.net generated an after-tax
gain of R$36 million in 2000.
- In February 2000 we, together with our fellow shareholders,
sold Quatro/A Telemarketing & Centrais de Atendimento S/A, or Quatro/A, a leading
Brazilian telemarketing firm, to Attento Holding Telecomunicaciones S.A. We owned 45% of
the total capital of Quatro/A. This transaction generated an after-tax gain for Unibanco
of R$63 million in 2000.
- In May 2000 we and PT Multimedia entered into an alliance to
establish Banco1.net, Brazils first full-service e-bank and a portal focused on
providing advisory services and financial guidance for individuals. Portugal Telecom has
indirectly invested R$114 million in the form of subscription bonuses and capital
increases. The transaction resulted in R$93million after-tax gain for Unibanco in 2000.
In December 2001, Banco1.net entered into a strategic alliance with Investshop Corretora
de Títulos e Valores Mobiliários S.A., or Investshop, Brazils largest
provider of financial services through the Internet. As a result of this strategic
alliance, Banco1.net account holders started to have greater access to Investshop
investment products. The integration of the operational structures was concluded in April
2002. At the conclusion of the integration, Banco1.net became the holder of 100% of the
capital of Investshop and Investshop Participações S.A. Investshops
parent acquired an 8% participation interest in Banco1.net. We presently have a 55%
interest in Banco1.net, Portugal Telecom has 27%, Investshop Brazil has 8% and third
party investors have 10%. See Item 4. Information on the Company  Principal
Business Activities  Retail Banking  Banco1.net.
- In December 2000 we and Banco Bradesco S.A. signed an agreement
with PT Prime, a subsidiary of Portugal Telecom, through which we have outsourced our
telecommunications network to PT Prime. Under the agreement, PT Prime has become Unibancos
and Banco Bradescos main provider of management and administration services for
corporate telecommunications networks and systems, through a company named BUS Serviços
de Telecomunicação S.A., in which we and Banco Bradesco jointly held a 26%
interest. In June 2002 we obtained the required government approvals to transfer BUS to
PT Prime and we and Bradesco transferred our interest in Bus Serviços de
Telecomunicações S.A. to PT Prime. As a result of the outsourcing
transaction, we expect to recognize an after-tax gain amounting to R$188 million,
beginning in July 2001 and ending in June 2006. In 2001 and 2002, we recognized R$19
million and R$38 million of this R$188 million which was applied towards reducing our
expenses related to PT telecommunication Services. See Note 11-b to our audited
consolidated financial statements.
- In September 2001 Fininvest and Magazine Luiza, a well-known
Brazilian chain of department stores, announced a strategic partnership creating and
sharing control of a new company, LuizaCred, to provide financing to the customers of
Magazine Luiza. This partnership also gives us access to providing loans to the consumer
segment of the retail market. We paid R$43 million for our 50% interest in LuizaCred and
accounted for the acquisition as a purchase. The acquisition resulted in goodwill in the
amount of R$32 million (recorded as investments in unconsolidated companies), which is
subject to the provisions established by APB Opinion 18 The Equity Method of
Accountings for Investments in Common Stock. Goodwill was tested for impairment and
no impairment charges were recorded. . We do not consolidate this company since we do not
have a majority voting interest.
- In October 2001 we signed a strategic alliance with Globex
S.A., the owner of the nationwide chain of Ponto Frio household appliance stores.
Pursuant to this transaction, we purchased a 50% interest in Globexs subsidiary
Investcred, which provides consumer finance to Ponto Frio customers. We paid R$111
million for our 50% interest in Investcred and accounted for the acquisition as a
purchase. The acquisition resulted in goodwill in the amount of R$59 million, (recorded
as investments in unconsolidated companies) which is subject to the provisions
established by APB 18. Goodwill was tested for impairment and no impairment charges were
recorded. We do not consolidate this company, since we do not have a majority control
interest.
- In January 2002, Unibanco-Rodobens, our lay-away finance arm,
which is jointly controlled by us and Rodobens Administração e Promoções
Ltda., and Ford Credit Brazil established a joint venture for the sale of cars and the
management of groups of the National Ford Consortium, a system for financing goods on an
installment plan basis. Through this joint venture we intend to increase our presence in
the car finance sector.
- In April 2002 we acquired from Moreira Salles Group its 24.5%
equity interest in Unicorp, a private banking business, for US$36 million, equivalent to
R$85 million at the acquisition date, based on independent appaisal report. As a result
of this transaction, we now own 100% of Unicorp. We accounted for the acquisition as a
purchase, and the results of operations of Unicorp have been included in our consolidated
financial statements since April 1, 2002. Prior to March 31, 2002, we accounted for the
results of Unicorp using the equity method, since we did not have a controlling interest.
The acquisition resulted in goodwill in the amount of R$45 million at the date of the
acquisition, which is subject to the provisions stated in SFAS 141 and 142. Goodwill was
tested for impairment at December 31,2002 and no impairment charges were recorded.

Charges and Expenses

In recent periods, we have incurred
restructuring charges, and capital expenditures that have significantly affected our
results.

Restructuring Charges. At the
time of the Banco Bandeirantes acquisition in December 2000, we began to implement a
restructuring plan designed to improve operating efficiencies and fully integrate the
acquired branches and operations of Banco Bandeirantes, including information systems. The
plan involved a variety of expenditures principally related to branch consolidation,
systems integration and employee severance. At the time of the acquisition, we estimated
that the restructuring charges directly related to the acquisition would total R$87
million, which we recorded as a liability and accrued as part of goodwill on our
consolidated balance sheet as of December31, 2000. Through December31, 2000, we had not
utilized this restructuring reserve. During 2001, we completed the integration of Banco
Bandeirantes into our operations and utilized the entire restructuring reserve.
Additionally, we recorded in 2001, R$14 million of further expenses relating to the
integration of Banco Bandeirantes. In 2002 no restructuring charges was recorded.

Other restructuring charges.
Since 1995, we have been engaged in an ongoing reengineering program designed
to improve operational efficiencies and profitability. See Item 4. Information on
the Company  Business Strategy  Guiding Principals  Ongoing Cost
Control. During 2000 in connection of a comprehensive program of self-examinations,
that involved focusing all areas of the organization on our processes and structures, we
have expended other restructuring charges of R$45 million as incurred.

Capital Expenditures. We have
made, and expect to continue to make, capital expenditures related mainly to improvements
to our communications, computer, customer service and back office administrative systems.
Unlike the reengineering costs described above, costs incurred with these improvements are
being capitalized and depreciated in accordance with U.S. GAAP. We recorded R$487 million,
R$531 million and R$333 million of total capital expenditures in 2000, 2001 and 2002,
respectively.

MACROECONOMIC FACTORS
AFFECTING OUR FINANCIAL CONDITION AND RESULTS OF OPERATIONS

In addition to the changes to our
financial condition and results of operations as a consequence of our organic growth and
strategic transactions, we have been and will continue to be affected by Brazilian
macroeconomic trends. Since the majority of all our Retail Banking customers and an
overwhelming majority of our Wholesale Banking, Insurance and Wealth Management customers
are Brazilian, our financial condition and results of operations are highly dependent on
Brazilian economic conditions, including inflation and changes in interest rates. Changes
in the Brazilian economy that adversely affect our customers ability to repay their
loans or demand for our products and services could materially affect our financial
condition and results of operations. Moreover, since a significant amount of our assets
and liabilities are denominated in or indexed to foreign currencies, primarily the U.S.
dollar, we are also significantly affected by changes in the value of the real
relative to the U.S. dollar and other foreign currencies. External events, such as
developments in other emerging market economies, as well as internal events, such as
changes in government regulation affecting our business areas, also have an impact on our
financial condition and results of operations. For additional information related to
macroeconomic factors affecting our financial condition and result of operations, see
 Results of Operations for Year Ended December31, 2002 Compared to the Year
Ended December 31, 2001, and  Results of Operations for Year Ended
December 31, 2001 Compared to Year Ended December 31, 2000.

Brazilian Economic
Conditions

2000.    
          The year 2000 saw improvement in the economy compared to 1999, characterized by
          limited inflation, a resurgence of business activity and the ongoing process of
          controlling the fiscal deficit. Real GDP grew 4.5% during the year. Inflation
          fell to 9.8% and 6.0% in 2000, from 20.0% and 8.9% in 1999, as measured by the
          IGP-DI and IPCA, respectively. The Central Bank gradually reduced its base
          interest rate from 18.5% to 17.5% at June30, 2000 and further reduced it to
          16.5% at December31, 2000 and to 15.25% at January 17, 2001. The real
          lost 9.3% of its value against the U.S. dollar over the course of the year, and
          the exchange rate fell from R$1.789 per U.S. dollar at December 31, 1999 to
          R$1.9554 per U.S. dollar at December 31, 2000.

2001.    
          The growth of the Brazilian economy slowed in 2001, as the impact of the ongoing
          economic crisis in Argentina and lower levels of growth of the U.S. economy led
          the Central Bank to increase interest rates to control inflation. This increase
          in interest rates led to declines in investment and consumption in Brazil. The
          economic situation was exacerbated by the governments announcement in May
          2001 of measures designed to reduce the consumption of electricity in response
          to an electricity shortage. The measures paired with the Argentine crisis and
          declining economic growth in the United States, contributed to the reduction of
          GDP growth for 2001 to 1.5%. The real depreciated by 18.7% against the
          U.S. dollar from December31, 2000 to December31, 2001, as the exchange rate fell
          from R$1.9554 per U.S. dollar at December31, 2000 to R$2.3204 per U.S. dollar at
          December31, 2001. Concurrently with this devaluation, the Central Bank increased
          the base interest rate, from 15.25% per annum at January 17, 2001 to 16.25% per
          annum at April18, 2001, to 16.75% per annum at May23, 2001, to 18.25% per annum
          at June20, 2001 and to 19.0% per annum at July18, 2001. Inflation for 2001 was
          10.4% and 7.7% as measured by IGP-DI and IPCA, respectively. At the beginning of
          a rising interest rate cycle, we generally benefit in that rising interest rates
          afford us a greater spread on time deposits and savings accounts. Over the longe
          term, however, continually rising interest rates could reduce economic activity
          and demand for credit, which would have a negative impact on our business.

2002.    
          The economy deteriorated in 2002, primarily due to the political uncertainty
          relating to the presidential election. During 2002, the real/US dollar exchange
          rate fluctuated between a high of R$3.8949 per US dollar and a low of R$2.2709
          per US dollar. At December 31, 2002 the value of the real was R$3.5333 per US
          dollar. The Central Bank decreased the base interest rate in July 2002. However,
          in October the Central Bank began increasing the base interest rate to a high of
          25% in December 2002. Signs during the transition period that economic policy
          guidelines would remain the same led to a reduction in country risk already by
          the end of the year, from a peak around 2,400 bps in October to bout 1500 bps in
          December, followed by a similar movement from the return on domestic exchange
          rate linked bonds, which came from an average of 32% per annum in October to 25%
          per annum in December. Inflation for 2002 was 26.4% and 12.5%, as measured by
          the IGP-DI and IPCA, respectively. GDP for 2002 was 1.5%.

2003 to Date. Following the
installation of the new government, the financial crisis subsided, as the new government
maintained the main guidelines of economic policy of the old government. The stabilization
of the economy was partly due to the governments decision to increase the primary
surplus target from 3.75% to 4.25% of GDP, as well as to increase interest rates. The base
interest rate increased to a high of 26.5% in February 2003, a level maintained by the
Central Bank until the June meeting, when the overnight rate was reduced to 26%. The
government has advanced proposals to reform the tax and social security systems and these
have been well accepted, contributing to lowering the perception of risk surrounding
Brazil. Hence, the Brazilian EMBI+ spread reduced from 1500 bps in December to 780 bps in
May, while the return on exchange rate linked bonds came down to 6% per annum, from the
25% per annum level observed at the end of 2002. Despite these improvements, inflation
remains high, having reached 6.8%, as measured by the IPCA during the first five months of
the year, compared to 2.5% during a comparable period in 2002. GDP during the first
quarter of the year increased 2% over the same period in 2002. At June 16, 2003, the
exchange rate for reais into US dollars was R$2.8508 to US$1.00.

The following table shows, for the
dates and periods indicated, real GDP growth, the inflation rate and the average real
interest rate in Brazil.

|                                         | For the Year Ended December 31,
|---------------------------------------- | -------------------------------
|                                         | 2000                           
|Real GDP growth (1)                      | 4.5%                           
|Inflation rate (2)                       | 9.8                            
|Inflation rate (3)                       | 6.0                            
|Interbank deposit real interest rate (4) | 17.4%                          

___________________
(1) Source: Fundação Instituto Brasileiro de Geografia e
Estatistica (IBGE).
(2) Source: IGP-DI, as published by the Fundação Getulio Vargas.
(3) Source: IPCA, the Consumer Price Index published by IBGE.
(4) Source: Central
de Liquidação e Custodia de Titulos Privados.

Effects of Devaluation
and Interest Rates on Net Interest Income

The devaluation of the real
may affect our net interest income, because a significant amount of our financial
assets and liabilities are denominated in or indexed to foreign currencies, primarily the
U.S. dollar. When the real is devalued, as occurred in certain periods over the
last three years, we incur in losses on our liabilities denominated in or indexed to
foreign currencies, such as our U.S. dollar-denominated long-term debt and trade finance
credit lines, as the cost in reais of the related interest expense increases. At
the same time, we experience gains on our monetary assets denominated in or indexed to
foreign currencies, such as our dollar-indexed securities and loans, as the interest
income from such assets as measured in reais also increases because of the
devaluation of the real.

In addition, in periods of high
interest rates such as in, our interest income increases as interest rates on our
interest-earning assets increase. At the same time, our interest expense increases as
interest rates on our interest-bearing liabilities also rise. Changes in volumes of
interest-earning assets and interest-bearing liabilities also produce changes in interest
income and interest expense. For example, a decrease in our interest income attributable
to a decrease in interest rates may be offset by an increase in the volume of our
outstanding loans during a period.

The following table shows our foreign
currency-denominated and foreign currency-indexed assets and liabilities, including
derivative financial instruments, as of the dates indicated. The information below may not
reflects the net exposure at other times and may not represent the future impact on our
results, since the operations with final maturity in the following business day are not
subject to changes in foreign currency because they are settle using an exchange rate of
the previous day. Furthermore, we can change our exposure due to changes in market
conditions or managements decision.

|                                                         | As of December 31,                     
|-------------------------------------------------------- | ---------------------------------------
|                                                         | 2000                                   
|                                                         | (in millions of R$, except percentages)
|Assets                                                   |                                        
|Cash and due from banks                                  | R$88                                   
|Loans, securities and other assets                       | 11,950                                 
|Premises and equipment, net                              | 8                                      
|Investments in unconsolidated companies                  | 104                                    
|Nonperforming loans                                      | -                                      
|Allowance for loan losses                                | (92)                                   
|                                                         |                                        
|Total                                                    | R$12,058                               
|                                                         |                                        
|Percentage of total assets                               | 24.8%                                  
|Liabilities                                             
|Non-interest bearing deposits                            | R$85                                   
|Deposits, borrowings and other liabilities               | 9,393                                  
|                                                         |                                        
|Total                                                    | 9,478                                  
|                                                         |                                        
|Percentage of total liabilities and stockholders equity | 19.5%                                  
|Derivative financial instruments                        
|Swap contracts                                          
|Liabilities position, net                                | R$1,642                                
|Future contracts                                        
|Liabilities position, net                                | 760                                    
|Swap contracts with daily reset                         
|Asset position, net                                      | -                                      
|Option contracts                                        
|Sale commitments, net                                    | 51                                     
|                                                         |                                        
|Net Exposure                                             | R$127                                  
|                                                         |                                        

The balance of our foreign
currency-denominated and -indexed assets exceeded the balance of our foreign
currency-denominated and -indexed liabilities as of December 31, 2000, 2001 and 2002. The
excess of foreign currency-denominated and -indexed assets over foreign
currency-denominated and -indexed liabilities, led to net financial gains on our net
foreign currency asset position for those periods.

We have used swap and futures
contracts and certain other hedging contracts to minimize the potential impact of currency
devaluation and interest rate changes on our overall exposure. For more information on our
use of derivatives for risk management and protection purposes, see Item 4.
Information on the Company  Risk Management  Market Risk and Notes 2(e)
and 28 to our audited consolidated U.S. GAAP financial statements.

The following table shows how much of
our net interest income was attributable to changes in the average volume of
interest-earning assets and interest-bearing liabilities and changes in the average
interest rates, in each case for 2002 as compared to 2001, and 2001 as compared to 2000.

|                                                     | 2001/2000Increase (decrease) | 2002/2001Increase
|---------------------------------------------------- | ---------------------------- | -----------------
|                                                     | (in millions of R$)         
|Due to changes in average volume of interest-earning |                              |                  
|assets and interest-bearing liabilities              | R$1,168                      | R$1,163          
|Due to changes in average interest rates             | 297                          | (34)             
|                                                     |                              |                  
|Net change                                           | R$1,465                      | R$1,129          
|                                                     |                              |                  

Effects of Devaluation
and Interest Rates on Lending and Treasury Activities

In 2000 the economic conditions
improved slightly compared to 1999 and our provision for loan losses was R$676 million
from R$534 million in 1999, mainly due to the increase in our loan portfolio as a result
of organic growth and to a lesser extend due to the consolidation of Banco Bandeirantes
and Fininvest in December 2000. The Brazilian economy slowed in 2001 as the increase in
interest rates led to a decline in consumption. Our provision for loan increased to
R$1,100 million in 2001 from, primarily as a result of the consolidation of Fininvest.
Although Fininvests lower income segment requires higher provisions as a result of
higher default rates, this segment generally features a higher volume of transactions and
higher spreads. For the year ended December 31, 2002, our provision for loan losses
increased to R$1,291 million from R$1,100 million in 2001, due primarily to increases in
our individual loans and increasing allowance for losses on certain wholesale clients,
affected by the deterioration in economic conditions in Brazil.

Our balance of net loans outstanding
grew to R$23,865 million as of December 31, 2002 from R$22,636 million as of December 31,
2001 and R$19,309 million as of December 31, 2000. This was primarily due to our organic
growth in 2001 and the devaluation of the real which increased the value of our
foreign currency denominated or indexed loans in reais terms in 2001 and 2002,
despite a decrease in our balance loan indexed or denominated in foreign currency in US
dollar terms, in both years, due to the deterioration in economic conditions, which
decreased strongly the foreign lines.

Due to the devaluation of the
real in 2001 and 2002, which decreased our lending activities for US dollar 
indexed loans, and higher interest rates, which reduced demand for our domestic loans, we
had additional liquidity which we used to increase our investments in securities as a
whole (including trading securities and securities available for sale and held to
maturity). This liquidity was partially offset by the reimposition of the reserve
requirements on time deposits in September 2001 and increases in reserve requirements on
demand, saving and time deposits in 2002.

As of December 31, 2002 our
securities portfolio increased to R$18,117 million compared to R$15,596 million as of
December 31, 2001 and R$9,160 million as of December 31, 2000. The increases were also
attributable to devaluation of the real in 2001 and 2002. See -Effects of
Government Regulation on our Financial Condition and Results of Operations  Reserve
and Compulsory Deposit Requirements.

Effects of Government
Regulation on Our Financial Condition and Results of Operations

Reserve and Compulsory Deposit
Requirement. The Central Bank imposes several compulsory reserve requirements on
financial institutions, as a mechanism to control the liquidity of the Brazilian financial
system. The compulsory reserve policy affects the balance of our interest-earning assets
by regulating our liquidity, and therefore our ability to offer loans and invest in
securities. The compulsory reserve policy affects the balance of our interest-bearing
liabilities because when the Central Bank reduces the reserve requirement on our deposits,
we have more liquidity and are able to offer more attractive interest rates on our deposit
products. Our ability to attract more deposits increases our interest-bearing liabilities
and consequently our interest expense. Therefore, by changing the reserve requirements,
the Central Bank is able to effect changes in the volumes of our interest-earning assets
and interest-bearing liabilities, and consequently our interest income and interest
expense.

In September 2001 the Central Bank
reimposed compulsory deposit requirements on time deposits, requiring financial
institutions to make deposits in the form of government securities in an account with the
Central Bank.

During 2002 the Central Bank
increased the rate of compulsory deposit requirements on time and savings deposits three
times.

In June 2002 the Central Bank
increased the rate of compulsory deposit requirements on time deposits in the form of
government securities in an account with the Central Bank and saving deposits in a form of
cash deposit from 10% to 15% and from 15% to 20%, respectively, and in August 2002 the
Central Bank created an additional reserve requirement of 3% on time deposits and 5% on
saving deposits.

In October 2002 the Central Bank
increased the additional reserve requirements in cash deposit on time deposits to 8% and
on saving deposits to 10%. The Central Bank also increased the additional reserve
requirements on demand deposits to 8% in October 2002 from 3% in August 2002.

These changes in compulsory deposit
requirements in 2001 and 2002 contributed to the increase in our time deposits balance
reserve requirement in the form of Brazilian government securities to R$3,720 million, as
of December 31, 2002 from R$1,214 million as of December 31, 2001 and the increase in our
demand and savings deposits balance reserve requirement to R$1,815 million, as of December
31, 2002 from R$1,455 million as of December 31, 2001. We measure changes as a result of
the additional reserve requirements according to its impact on the balance of our demand,
savings and time deposits as a whole. Our balance of demand, savings and time deposits
reserve requirement increased to R$2,021 million as of December 31, 2002, due to the
additional reserve requirements.

These changes in the reserve
requirements will have an effect on our liquidity and on our net interest income for
future period.

Capital Adequacy. In September
2001, the Central Bank also imposed higher capital requirements for banks foreign
currency position to reduce level of excess capital. This new regulation required us to
allocate more capital to cover our foreign currency asset and liability exposures.
Previously we had not needed to allocate capital, as the Central Bank only required such
allocation for foreign currency exposure exceeding 20% of adjusted capital. In September
2001, however, we had to allocate capital, as the Central Banks new regulation
required allocation of 50% of capital for foreign currency exposure exceeding 5% of
adjusted capital. In October 2002 this requirement was changed again to 100% allocation of
capital for foreign currency exposure exceeding 5% of adjusted capital. Furthermore, the
Central Bank reduced the maximum allowed foreign currency exposure from 60% to 30% of the
adjusted capital. The current position therefore is that for exposure from 0% to 5% of
adjusted capital, there is no requirement to allocate capital, between 5% and 30%, 100% of
capital must be allocated and exposure above 30% is not permitted and is subject to
penalties imposed by the Central Bank. We believe that these measures will not have a
significant effect on our results of operations because our capital levels exceed the new
increase requirements of the Central Bank.

Taxes

Income Tax. Our income tax
expense is made up of two components: the federal income tax and the social contribution.
For each of the years 2000, 2001 and 2002, the federal income tax was assessed at a rate
of 25% and the social contribution was 9%.

Other Taxes. In addition,
Brazilian regulations impose other taxation to banks. This rate remained the same for the
years 2000, 2001 and 2002. The contribution to Programa de Integração
Social, or PIS, relating to the Employees Profit Participation Program at a rate
of 0.65% on gross revenues. The contribution for Financiamentos de Securidade Social,
or COFINS, relating to tax for social security financing at a rate of 3% on Gross
revenues and the Contribuição Provisória sobre
Movimentações Financeiras, or CPMF a temporary tax on financial
transactions, at a rate of 0.38%. For a further discussion of CPMF, see Item 4.
Information on the Company  See Brazilian Banking Industry, Regulation and
Supervision-Regulations Affecting Liquidity in the Financial Market-Taxations of Financial
Transactions

Critical Accounting
Policies and Estimates

In preparing our consolidated
financial statements, we use estimates and assumptions to account for certain assets,
liabilities, revenues, expenses and other transactions in accordance with U.S. GAAP. The
consolidated financial statements include various estimates and assumptions, as the
adequacy of the allowance for loan losses, estimates of the fair value of certain
financial instruments, the amount of valuation allowance on deferred tax assets and the
selection of useful lives of certain assets. Actual results in future periods may differ
from those estimates and assumptions, and if these differences were significant enough,
our reported results of operations would be materially affected. We believe that among our
significant accounting policies detailed in Note 2 to our audited consolidated financial
statements, the following may involve the highest degree of management is judgment and
complexity.

Allowance for loan losses. We
assess the overall risks in our loan portfolio and establish and maintain a reserve for
probable losses. Our allowance for loan losses represents our estimate of probable losses
inherent in the portfolio. The process we use to determine the reserve involves numerous
estimates and judgments. We consider the frequency of default, risk ratings, and the loss
recovery rates, among other things in making this evaluation, as well as the size and
diversity of individual large credits. Changes in these estimates could have a direct
impact on the provision and could result in a change in the allowance.

Our large balance wholesale loans
have distinctive characteristics and therefore cannot be evaluated as a group but instead
are evaluated based on the risk characteristics of each individual borrower. We review
credit lines for large-balance loans every 60 to 180 days, depending on the
borrowers rating and the external credit environment. Small-balance loans such as
overdrafts, credit card, residential housing loans and consumer installment loans have
similar characteristics and are analyzed by using specialized systems and processes, since
retail loans are characterized by the processing of a large volume of credits. We use a
wide range of statistical tools to evaluate retail requests, which include credit and
behavior scoring. The allowance for credit losses attributed to loans is established using
a process that begins with estimates of probable loss inherent in the portfolio based upon
various analyses. These analyses consider the recent loss experience, current economic
conditions, the risk characteristics of the various categories of loans, the fair value of
the underlying collateral and other factors directly influencing the potential
collectibility of loans. We evaluate the adequacy of the allowance for the loan losses on
a monthly basis.

Within the allowance for credit
losses, when amounts are determined for specific loans, we measure impaired loans based on
(i)the discounted cash flow value of the loan at the loans stated rate; (ii)the
observable market price of the loan, if available; or (iii)the realizable value of the
underlying collateral for collateral-dependent loans. A valuation allowance is established
through the allowance for loan losses for the difference between the carrying value of the
impaired loan and its value determined as described above. We consider a loan to be
impaired when, based on current information and events, it is probable that we will be
unable to collect scheduled payments of principal and interest according to the
contractual terms of the loan agreements.

We believe that our allowance for
loan losses is adequate to the present economic environment, which has led to a
deterioration of asset quality, as borrowers are more likely to default on their loans.
Within each risk level for our loans the minimum allowance for credit risk level is
utilized as a general rule. However, based on our managements judgment and
experience, higher percentages are used within each level in order to more accurately
evaluate the risk of certain clients, operations or portfolios.

Valuation of Financial
Instruments. Our financial instruments include fixed rate and equity securities
derivatives and other financial instruments. We carry our investments at fair value if
they are considered to be available for sale or trading securities. For the majority of
our portfolios, fair value is determined based on externally quoted prices. We believe we
have a conservative policy regarding market risks exposures. The market risk exposure of
our portfolio is independently supervised and controlled. Changes in value of available
for sale securities are recognized as a component of stockholders equity, unless the
loss is not considered to be temporary. Impairment losses that are not considered
temporary are recognized in earnings. We conduct regular reviews to assess whether
other-than-temporary impairment exists.

Deterioration in economic conditions
could adversely affect these values. Changes in the fair value of trading assets and
liabilities, including our derivatives for trading purposes with our customers or which do
not qualify as hedges (primarily derivatives used to manage our overall exposure to
changes in interest rates and foreign currencies), are recognized in earnings.

Changes in the fair value of
derivatives designated as fair value hedge as well as the changes on the hedged items are
recognized in earnings. Changes in the fair value of derivatives designated as cash flow
hedges are recognized as a component of stockholders equity.

We determine fair value using quoted
market prices, if available. If quoted market prices are not available, for fixed rate
securities and derivatives, we used the quoted market price of comparable instruments, or
we discount the expected cash flows using market interest rates commensurate with the
credit quality and maturity of the investments.

Insurance policy and claims
reserves. Reserves for insurance claims are established based on historical
experience, claims in process of payment, estimated amounts of claims incurred but not yet
reported, and other factors relevant to the levels of reserves required. Reserves are
adjusted regularly based upon experience with the effects of changes in such estimated
reserves included in the results of operations in the period in which the estimated are
changes and include an estimated reserves for reported and unreported claims incurred,
recorded in Other liabilities.

Income taxes. In preparing the
consolidated financial statements we are required to estimate income taxes, which involves
an estimation of current tax expense together with an assessment of temporary differences
resulting from differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for income tax purposes. Our carrying
value of net deferred tax assets assumes that we will be able to generate sufficient
future taxable income based on estimates and assumptions. If these estimates and related
assumptions change in the future, we may be required to record valuation allowances
against our deferred tax assets resulting in additional income tax expense in the
consolidated statements of income. We evaluate the reliability of the deferred tax assets
frequently. During the year ended December 31, 2002 we recorded no valuation allowances
related to our net deferred tax assets. See Notes 2(q) and 18 to the our consolidated
financial statements.

Impairment of long-lived assets,
goodwill and other intangible assets. Our long-lived assets include premises and
equipment, goodwill and other intangible assets. Premises and equipment and intangible
assets with finite useful lives are amortized over their estimated useful lives. Useful
lives are based on our estimates of the period that the assets will generate revenue. If
circumstances and conditions indicate deterioration in the value of tangible or intangible
assets the book value would be adjusted and a loss would be recognized in current
operations.

We adopted Statement of Financial
Accounting Standards 142 (SFAS 142), Goodwill and Other Intangible Assets.
SFAS 142 establishes that goodwill and identified intangible assets with indefinite useful
lives are not subjected to amortization, but are tested for impairment on an annual basis.
We adopted the provisions of SFAS 142 relating to non amortization and amortization of
intangible assets on July 1, 2001 for all business combinations completed on or after the
aforementioned date, and adopted the remaining provisions of SFAS 142 on January 1, 2002.
In assessing the recoverability of goodwill and other intangible assets we must make
assumptions regarding estimated future cash flows and other factors to determine the fair
value of the respective assets. If these estimates or their related assumptions change in
the future, we may be required to record impairment charges for these assets not
previously recorded. Goodwill was tested for impairment at January 1st and at
December 31, 2002 and no impairment charges were recorded, as well, we evaluated the live
of customer related intangibles and no charge was made regarding lives upon adoption of
SFAS 142.

We adopted SFAS 144 Accounting
for the Impairment or Disposal of Long-Lived Assets on January 1, 2002 and did not
have a material impact on our consolidated financial statements.

Provisions for litigation.
Provisions for litigation are setup based on our legal counselors expectations
regarding the outcome of the contingencies and based on our best estimate of the amounts
that we would be required to pay. Therefore, such reserves are subject to a high degree of
judgment and actual outcome way vary from our estimates.

OPERATING RESULTS

Unibanco Holdings

Unibanco Holdings does not currently
conduct any activities other than holding common and preferred shares of Unibanco.
Therefore the results of operations of Unibanco Holdings are similar in all material
respects to ours, other than minority interest (R$3,210 million at December 31, 2002) and
financing activities, and are not discussed separately herein.

Results of Operations
for Year Ended December 31, 2002 Compared to Year Ended December 31, 2001

The following table shows the
principal components of our consolidated net income for 2001 and 2002.

|                                          | For the Year EndedDecember 31, |        
|----------------------------------------- | ------------------------------ | -------
|                                          | 2001                           | 2002   
|                                          | (in millions of R$)            |        
|Net interest income                       | R$4,173                        | R$5,302
|Provision for loan losses                 | (1,100)                        | (1,291)
|Non-interest income                       | 3,761                          | 3,216  
|Non-interest expense                      | (5,887)                        | (6,585)
|                                          |                                |        
|Income before taxes and minority interest | 947                            | 642    
|Income tax                                | (38)                           | 276    
|                                          |                                |        
|Income before minority interest           | 909                            | 918    
|Minority interest                         | (84)                           | (115)  
|                                          |                                |        
|Net income                                | R$825                          | R$803  
|                                          |                                |        

In a high volatil environment, net
income in 2002 decreased R$22 million or 2.7% compared to 2001. The foreign exchange and
liquidity crisis, reflected negatively on our results mainly on our trading operation.

Our non-interest income-trading
income (expenses) which includes the net loss on futures contracts, including the hedge of
investments abroad, which do not qualify for hedge accounting under SFAS 133
Accounting for Derivative Instruments an Hedging Activities and the net
realized and unrealized loss on trading securities and on swaps operations, was R$1,972
million, as compared to a R$120 million gain in 2001. This net loss on future contracts
and net realized and unrealized on trading securities and swaps operations contributed to
a decrease of 14.5% in our non-interest income. The provision for loan losses was also
affected by economic conditions and increased to R$1,291 million in 2002 from R$1,100
million in 2001. These decreases in our income were offset by an increase of 27.1% or
R$1,129 million in net interest income, R$905 million increase in foreign exchange gains
on investments abroad due to 52.3% of the devaluation of the real and R$314 million
decrease in income tax.

Net Interest Income

The following table shows the
principal components of our net interest income, before provision for loan losses, for
2001 and 2002.

|                    | For the Year EndedDecember 31, |        
|------------------- | ------------------------------ | -------
|                    | 2001                           | 2002   
|                    | (in millions of R$)            |        
|Interest income     | 9,713                          | 15,045 
|Interest expense    | (5,540)                        | (9,743)
|                    |                                |        
|Net interest income | R$4,173                        | R$5,302
|                    |                                |        

Net interest income increased by
R$1,129 million, or 27.1%, in 2002 compared to 2001 as a result of a R$5,332 million or
54.9% increase in interest income, primarily due to devaluation of the real in
2002, resulting in higher interest income on our dollar-indexed interest earnings
assets and the increase in Brazilian interest rates in 2002, resulting in higher interest
income from our domestic loans and securities. At the same time interest expense increased
R$4,203 million, or 75.9%, as a result of the same occurrences.

The difference between the rates of
increase in interest income, 54.9% and interest expenses, 75.9%, was largely due to
accounting treatments for foreign exchange gains on our overseas investments, which are
not recorded in interest income but rather were recorded as other non-interest income and
the net expenses on certain derivatives liabilities transactions in futures contracts
which are reset daily, reflecting the changes in interest rate and in exchange currency
together with the change in fair value, which are recorded in non-interest income as
trading income (expenses).

The following table shows how much of
the R$1,129 million increase in our net interest income was attributable to changes in the
average volume of interest-earning assets and interest-bearing liabilities and changes in
the average interest rates, including the effects of devaluation of the real, in each case
for 2002 as compared to 2001.

|                                                     | 2002/2001Increase (decrease)
|---------------------------------------------------- | ----------------------------
|                                                     | (in millions of R$)         
|Due to changes in average volume of interest-earning |                             
|assets and interest-bearing liabilities              | R$1,163                     
|Due to changes in average interest rates             | (34)                        
|                                                     |                             
|Net change                                           | R$1,129                     
|                                                     |                             

The average volume of
interest-earning assets and the average volume of interest-bearing liabilities increased
by 18.8% and 19.9%, respectively, in 2002 compared to 2001, resulting in an increase in
net interest income of R$1,163 million. The average interest rates on interest-earning
assets and interest-bearing liabilities increased by 30.3% and 47.1%, respectively, in
2002 compared to 2001, resulting in an decrease in net interest income of R$34 million.

Net interest margin is net interest
income as a percentage of average interest-earning assets. Our net interest margin
increased to 10.8% in 2002 from 10.1% in 2001. This increase in net interest margin was
due to the increase of 27.1% in our net interest income as discussed above, compared to a
11.8% increase in the average volume of our interest-earning assets, net of our
interest-bearing liabilities.

Interest Income. Interest
income for 2002 increased by R$5,332 million, or 54.9%, primarily attributable to the
increase in revenues in reais terms of our foreign currency indexed loans due to
devaluation of 52.3% of the real in 2002, as compared with 18.7% in 2001 and to a
lesser extent, as a result of the increase in interest rates in Brazil in 2002 which
resulted in higher interest income on our domestic loan and securities. The two factors
combined increased our average interest rates paid on our interest earning asset to 30.5%
per annum in 2002 from 23.4% per annum in 2001.

The following table shows the
principal components of our average interest-earning assets and the average interest rates
earned in 2001 and 2002.

|                                         | For the Year EndedDecember 31, |         
|---------------------------------------- | ------------------------------ | --------
|                                         | 2001                           | 2002    
|                                         | (in millions of R$)            |         
|Average interest-earning assets          |                                |         
|Interest-bearing deposits in other banks | R$1,838                        | R$2,280 
|Federal funds sold and securities       
|purchased under resale agreements        | 3,877                          | 3,771   
|Central Bank compulsory deposits         | 646                            | 871     
|Trading assets                           | 10,406                         | 8,001   
|Securities available for sale            | 2,153                          | 5,535   
|Securities held to maturity              | 742                            | 5,079   
|Loans                                    | 21,783                         | 23,708  
|Other interest-earning assets            | 42                             | 62      
|                                         |                                |         
|Total                                    | R$41,487                       | R$49,307
|                                         |                                |         
|Average interest rate earned:            | 23.4%                          | 30.5%   

The following table shows how much of
the R$5,332 million increase in our interest income was attributable to changes in the
average volume of interest-earning assets and changes in the average interest rates,
including the effects of devaluation of the real, in each case for 2002 as compared
to 2001.

|                                                            | 2002/2001Increase  
|----------------------------------------------------------- | -------------------
|                                                            | (in millions of R$)
|Due to changes in average volume of interest-earning assets | R$2,458            
|Due to changes in average interest rates                    | 2,874              
|Net change                                                  | R$5,332            

Interest income increased R$5,332
million, or 54.9 %, in 2002, primarily as a result of:

- R$1,837 million increase in interest income and fees on loans,
to R$8,514 million in 2002 from R$6,677 million in 2001; and
- R$1,154 million and R$3,057 million increase in interest income
on securities available for sale and securities held to maturity to R$1,500 million and
R$3,113 million, respectively, in 2002 from R$346 million and R$56 million in 2001,
respectively.
- R$146 million increase in interest income on federal funds
purchase under agreements to resell.
- Offset by a decrease of R$955 million in interest income on
trading assets

The increase in interest income on
loans was due to the increase in average interest rates to 35.9% per annum, in 2002 from
30.7% per annum in 2001, as a result of the devaluation of the real in 2002, since
approximately 27.7% of our loan portfolio is denominated in or indexed into US dollars;
and the increase in interest rates in Brazil during 2002 which resulted in higher interest
income on our domestic loans and also due to a 8.8% increase in average loans mainly as a
result of the devaluation of the real which increased average loans in reais
term.

The increase in interest income on
securities available for sale and securities held to maturity was primarily due to our
decision to increase our portfolios of securities available for sale and securities held
to maturity, including the reclassification of certain federal government securities
recorded as trading assets in 2001 which including, but not limited to the existence of
funding in currency, maturities and positive spread as parameters to define our financial
ability. As a consequence average balances of securities available for sale and securities
held to maturity increased to R$5,535 million and R$5,079 million, respectively, in 2002
from R$2,153 million and R$742 million, in 2001. The devaluation of the real also
increased both average balances in reais terms, as 37.4% and 99.7% of our portfolios of
securities available for sale and securities held to maturity are indexed in or
denominated into US dollars in December 31, 2002. The increase in interest income on
securities available for sale and held to maturity was also due to the increase in average
rates to 27.1% per annum and 61.3% per annum, respectively, in 2002 from 16.1% per annum
and 7.5% per annum in 2001; as a result of the devaluation of the real and the increase in
interest rates in Brazil in 2002.

The decrease of R$955 million in
interest income on trading assets was due to R$731 million of expense as a result of our
swaps and forwards operations in 2002 as compared to R$55 million of income in 2001,
attributable to the devaluation of the real in 2002, since a large part of swaps
operations are indexed into U.S. dollar. The decrease was also a consequence of our
decision to reclassify certain federal governments securities to securities available for
sale and securities held to maturity, as above. As a consequence the average interest rate
of trading assets decreased to 11.3% in 2002 from 17.9% in 2001.

The increase in interest income on
federal funds sold under agreements to resell was attributable mainly to the increase in
interest rates in Brazil in 2002, which increased our average interest rates of federal
funds sold and securities purchased under agreements to resell to 17.3% per annum, in 2002
from 13.1% per annum in 2001. This was partially offset by the slight decrease in the
corresponding average volume to R$3,771 million in 2002 from R$3,877 million in 2001, as a
result of market conditions.

Interest Expense. Interest
expense for 2002 increased 75.9% to R$9,743 million, primarily due to increase of 19.9% in
our average interest-bearing liabilities and due to an increase in average rates paid on
our interest-bearing liabilities (to 22.5% per annum in 2002 from 15.3% per annum in 2001)
mainly due to the devaluation of the real and the increase in interest rates in
2002, which increased our interest expense on our borrowings denominated in or indexed
into US dollars.

The following table shows the
principal components of our average interest-bearing liabilities and the average interest
rates we paid on those liabilities in 2001 and 2002.

|                                       | For the Year EndedDecember 31, |         
|-------------------------------------- | ------------------------------ | --------
|                                       | 2001                           | 2002    
|                                       | (in millions of R$)            |         
|Average interest-bearing liabilities   |                                |         
|Time deposits                          | R$8,263                        | R$13,799
|Savings deposits                       | 4,419                          | 5,284   
|Deposits from banks                    | 458                            | 296     
|Federal funds purchased and securities
|sold under repurchase agreements       | 8,175                          | 8,251   
|Short-term borrowings                  | 6,800                          | 6,133   
|Long-term debt                         | 8,013                          | 9,551   
|                                       |                                |         
|Total                                  | R$36,128                       | R$43,314
|                                       |                                |         
|Average interest rate paid:            | 15.3%                          | 22.5%   

The following table shows how much of
the R$4,203 million increase in our interest expense in 2002 was attributable to changes
in the average volume of interest-bearing liabilities and to changes in average interest
rates, including the effects of the devaluation of the real, in each case for 2002
as compared to 2001.

|                                                                 | 2002/2001Increase  
|---------------------------------------------------------------- | -------------------
|                                                                 | (in millions of R$)
|Due to changes in average volume of interest-bearing liabilities | R$1,295            
|Due to changes in average interest rates                         | 2,908              
|Net change                                                       | R$4,203            

Interest expense for 2002 increased
R$4,203 million, or 75.9%, mainly due to the following increases:

- R$2,015  million in  interest on  long-term  debt to R$3,557
 million in 2002 from  R$1,542               million in 2001;
- R$1,080 million and R$66 million in interest on time deposits
and saving deposits, respectively, to R$2,411 million and R$404 million respectively, in
2002 from R$1,331million and R$338 million respectively in 2001;
- R$922  million  in  interest  on  short-term  borrowings  to
 R$2,064  million in 2002 from               R$1,142 million in 2001; and

The R$2,015 million in interest
expense on long-term debt was mainly due to a R$1,695 million increase in interest on
international long-term debt. This increase was primarily due to the devaluation of the
real in 2002, which increased our average rates paid on our dollar-denominated
long-term debt, mainly our euronotes issued abroad, to 64.2% per annum in 2002 from 29.9%
per annum in 2001. The issuance of US$200 million of our step-up subordinated callable
notes in April 2002 and the issuance of US$400 million of notes issued under
securitization arrangements contributed to the increase in average balances of our
international long-term debt to R$4,099 million, in 2002 from R$3,136 million in 2001. The
increase in our average balance of dollar denominated long-term debt was offset by the
maturity of US$738 million of eurobonds issued abroad in 2002, which decreased our average
balances. Our interest expense on domestic long-term debt, mainly BNDES on lending
activities, also increased to R$925 million, in 2002 from R$605 million, in 2001 due to an
increase in our average balance of domestic long-term debt to R$5,452 million, in 2002
from R$4,877 million in 2001 mainly, due to our organic growth and to a lesser extent due
to the real devaluation, since part of our lines of credit from BNDES are indexed
to US dollars. The increase in average interest rates paid on our domestic long-term debt
to 17.0%, in 2002 from 12.4% in 2001 was attributable to the increase in interest rates in
Brazil and to the devaluation of the real, in 2002.

The R$1,080 million and R$66 million
increases in interest expense on time deposits and on savings deposits, respectively, was
due to our organic growth and the migration from asset management funds by the
introduction of the new mark to market rule for funds in May 2002. The introduction of
this new rule caused some customers to move their investments from funds under management
to more traditional investments such as savings and time deposits as investors reacted to
the volatility of the market. The average balances of time and savings deposits increased
to R$13,799 million and R$5,284 million, in 2002, respectively, from R$8,263 million and
R$4,419 million, in 2001. Our average interest rate on time deposits increased to 17.5%
per annum in 2002 from 16.1% per annum in 2001, due to the increase in interest rates in
Brazil, while our interest rates on savings deposits was 7.6% per annum in 2002 and 2001.

The R$922 million increase in
interest expense on short-term borrowings was due to an R$891 million increase in interest
expense on international short-time borrowings (mainly lines from foreign banks to export
and import financing), to R$2,022 million in 2002 from R$1,131 million in 2001 This
increase in interest expense on short-term borrowings was primarily due to the 52.3%
devaluation of the real against the US dollar which increased our averages paid on
our dollar-denominated short-term borrowings to 33.6% per annum in 2002 from 16.8% per
annum in 2001, offset a decrease of our average balance of international short-term
borrowings, which decreased to R$6,011, million in 2002, from R$6,745 million in 2001.
This decrease in our average balance of international short-term borrowings was mainly due
to a strong decline in the availability of this type of funding in 2002 due to the
deterioration in market conditions as a result of the Argentina crisis and the uncertainty
surrounding the change of the Brazilian government.

Provision for Loan Losses

The following table shows our
provision for loan losses and loan charge-offs and recoveries for 2001 and 2002. It also
shows our provision to loans ratio (expressed as a percentage of average loans).

|                                                                 | For the Year EndedDecember 31, |        
|---------------------------------------------------------------- | ------------------------------ | -------
|                                                                 | 2001                           | 2002   
|                                                                 | (in millions of R$)            |        
|Balance beginning of year                                        | 1,005                          | 1,276  
|Provision for loan losses                                        | 1,100                          | 1,291  
|Loan charge-offs                                                 | (1,298)                        | (1,529)
|Loan recoveries                                                  | 469                            | 351    
|Net charge-offs                                                  | (829)                          | (1,178)
|                                                                 |                                |        
|Balance, end of year                                             | R$1,276                        | R$1,389
|                                                                 |                                |        
|Provision to average loans ratio (including nonperforming loans) | 4.8%                           | 5.2%   

|                                            | For the Year Ended December 31, 2001
|------------------------------------------- | ------------------------------------
|                                            | Cartão Unibanco                     
|                                            | (in millions of R$)                 
|Balance beginning of year                   | R$38                                
|Provision for loan losses                   | 158                                 
|Loan charge-offs                            | (164)                               
|Loan recoveries                             | 37                                  
|Net charge-offs                             | (127)                               
|                                            |                                     
|Balance, end of year                        | R$69                                
|                                            |                                     
|Provision to average loans ratio (including
|nonperforming loans)                        | 20.7%                               

|                                            | For the Year Ended December 31, 2002
|------------------------------------------- | ------------------------------------
|                                            | Cartão Unibanco                     
|                                            | (in millions of R$)                 
|Balance beginning of year                   | R$69                                
|Provision for loan losses                   | 156                                 
|Loan charge-offs                            | (225)                               
|Loan recoveries                             | 78                                  
|Net charge-offs                             | (147)                               
|                                            |                                     
|Balance, end of year                        | R$78                                
|                                            |                                     
|Provision to average loans ratio (including
|nonperforming loans)                        | 18.0%                               

The 17.4% increase in our provision
for loan losses during 2002 was primarily attributable to an R$336 million increase in our
provision relating to Unibanco and others offset by a R$143 million decrease in our
provision relating to Fininvest. This increase in provision for Unibanco and others was a
consequence of the increase in loan portfolio in reais terms, mainly due to
devaluation of the real, which principally affected our wholesale banking portfolio
increasing balances and provision for losses in reais terms. The increase in provision was
also partially due to the economic crisis, which affected the economy, increasing interest
rates and unemployment, which negatively affected our retail and wholesale banking
customers. The decrease in provision for Fininvest was due to a decrease in
Fininvests loan portfolio due to a more restrictive credit granting policy as well
as a change in product mix to focus on products with lower credit risk.

Loan charge-offs increased 17.8%
compared to 2001, due to R$120 million increase in Unibanco and others portfolio, R$50
million in Fininvests portfolio and R$61 million in the balance of Cartão
Unibancos portfolio. The increase in all portfolios reflected the bad economic
environment in Brazil in 2002, which resulted in higher charge-offs, mainly in retail
banking.

The loan recoveries decreased 25.2%
due to a R$110 million decrease in loan recoveries in Unibanco and others and R$49 million
in Fininvest, offset by an increase in loan recoveries of R$41 million in Cartão
Unibanco. The decrease was again a consequence of Brazilian economic conditions, except
for Cartão Unibanco which showed improvements in its collections.

The following table shows our total
loans and allowance for loan losses of our loan portfolio, by category, as of December 31,
2001 and 2002.

|                     | As of December 31, 2001 | As of December 31, 2002 |          
|-------------------- | ----------------------- | ----------------------- | ---------
|Commercial:          | Total loans             | Total allowance         | Total net
|Industrial and other | R$11,981                | R$486                   | R$11,495 
|Import and export   
|financing            | 3,283                   | 36                      | 3,247    
|Real estate loans    | 495                     | 41                      | 454      
|Direct lease         | 793                     | 88                      | 705      
|Individuals:        
|Overdraft            | 1,046                   | 78                      | 968      
|Financing            | 3,515                   | 259                     | 3,256    
|Credit card          | 1,966                   | 225                     | 1,741    
|Agricultural         | 833                     | 63                      | 770      
|                     |                         |                         |          
|Total                | R$23,912                | R$1,276                 | R$22,636 
|                     |                         |                         |          

The allowance allocated to industrial
and other loans increased to 5.5% of our total loans for industrial and other loans as of
December 31, 2002, compared to 4.1% as of December 31, 2001, our industrial and other loan
portfolio also increased by 6.7% for the year. The increase in reais in the balance
of our industrial and other portfolio was mainly due to devaluation of the real,
that increased the value of outstanding loans indexed in US dollars and the risk of
non-recoverability of such amounts. The increase in allowance for loan losses also
reflects the economic crisis, which affect certain of our large customers.

The increase of 20.5% in reais
terms in the balance of our import and export financing even though in dollar terms
decreased 20.9% in 2002 was due to an environment characterized by scarce trade finance
line in Brazil. Allowance for loan losses improved slightly to 0.9% in 2002 from 1.1% in
2001 due to the devaluation of real, which improved the Brazilian exports.

The increase of 8.3% in the balance
of financing to individuals in 2002 and in related allowance for loan losses to 7.8% at
December in 2002 from 7.4% at December 2001, was primarily due to our organic growth in
the retail segment. Allowance for loan losses also increased due to economic crisis.

The decrease of 12.9% in the balance
of credit card loans as well as the reduction in the related allowance for loan losses was
a consequence of a more restrictive credit granting policy in 2002, which decreased credit
card loans provided by Fininvest and the related provision. This was offset by an increase
of 5.1% in the loan portfolio of Cartão Unibanco.

As of December 31, 2002 our
consolidated allowance for loan losses was R$1,389 million, representing 5.5% of our total
loans, compared to R$1,276 million, representing 5.3% of our consolidated loans, as of
December31, 2001. Our allowance for loan losses as of December 31, 2002 was 8.9% higher
than as of December 31, 2001, while our loan portfolio grew by 5.6% during the year. This
reflected the Brazilian economic environment in 2002 which increased the possibility of
default , offset by our efforts to improve the quality of our credit approval and credit
risk processes.

The following tables show, by risk
level, our consolidated loans, nonperforming loans and allowance for loan losses, as of
December 31, 2001 and 2002. The risk level classification was adopted by the Central Bank
for all Brazilian financial institutions. The minimum allowance for each level is utilized
by us as a general rule, however, based on our managements judgment and experience,
higher percentages are used in order to more accurately evaluate the risk of certain
clients, operations or portfolios.

See Item 4.Information on the
Company  Risk Management  Credit Overview.

|           | As of December 31, 2001
|---------- | -----------------------
|           | Fininvest              
|Risk level | Loans                  
|           |                        
|           | (in millions of R$)    
|AA         | R$61                   
|A          | 973                    
|B          | 111                    
|C          | 91                     
|D          | 12                     
|E          | 7                      
|F          | 4                      
|G          | 3                      
|H          | 10                     
|           |                        
|Total      | R$1,272                
|           |                        

|           | As of December 31, 2001
|---------- | -----------------------
|           | Unibanco and others    
|Risk level | Loans                  
|           |                        
|           | (in millions of R$)    
|AA         | R$10,188               
|A          | 4,681                  
|B          | 2,261                  
|C          | 2,854                  
|D          | 381                    
|E          | 110                    
|F          | 88                     
|G          | 136                    
|H          | 199                    
|           |                        
|Total      | R$20,898               
|           |                        

|           | As of December 31, 2002
|---------- | -----------------------
|           | Fininvest              
|Risk level | Loans                  
|           |                        
|           | (in millions of R$)    
|AA         | R$15                   
|A          | 824                    
|B          | 54                     
|C          | 41                     
|D          | 5                      
|E          | 3                      
|F          | 1                      
|G          | 1                      
|H          | 3                      
|           |                        
|Total      | R$947                  
|           |                        

|           | As of December 31, 2002
|---------- | -----------------------
|           | Unibanco and others    
|Risk level | Loans                  
|           |                        
|           | (in millions of R$)    
|AA         | R$8,897                
|A          | 5,462                  
|B          | 2,507                  
|C          | 4,425                  
|D          | 609                    
|E          | 197                    
|F          | 60                     
|G          | 162                    
|H          | 185                    
|           |                        
|Total      | R$22,504               
|           |                        

The allowance for loan losses for
Fininvest decreased to 8.8% of our total loans for Fininvest as of December 31, 2002 from
12.6% as of December 31, 2001, reflecting the effects of our more restrictive credit
granting policy in 2002. The actions also reflect the decrease in total loans and in
nonperforming loans. Our total loans for Fininvest within credit risk levels AA to C
decreased 24.4% to R$934 million as of December 31, 2002, compared to R$1,236 million as
of December 31, 2001, of wich R$150 million were nonperforming loans as of December 31,
2002, compared to R$277 million of December 31, 2001. Our loan portfolio for Fininvest
within credit risk levels AA to C was 85.1% of total loans as of December 31, 2002,
compared to 79.8% as of December 31, 2001.

Although the allowance for loan
losses for Cartão Unibanco increased to 8.5% of our total loans for Cartão
Unibanco as of December 31, 2002 compared to 7.9% as of December 31, 2001, Cartão
Unibancos aggregate credit portfolio increased 5.1% for the same year. Our total
loans for Cartão Unibanco within credit risk levels AA to C increased 4.7% to R$764
million as of December 31, 2002, compared to R$730 million as of December 31, 2001. Our
total loans for Cartão Unibanco within risk levels D to H increased 7.1% to R$151
million of which R$90 million were nonperforming loans as of December 31, 2002 compared to
R$141 million of which R$131 million were nonperforming loans as of December 31, 2001. Our
loan portfolio for Cartão Unibanco within risk levels AA to C was 83.5% as a
percentage of our total loans for Cartão Unibanco as of December 31, 2002, compared
to 83.8% as of December 31, 2001; whereas our loan portfolio for Cartão Unibanco
within risk levels D to H was 16.5% as a percentage of our total loans for Cartão
Unibanco as of December 31, 2002 (compared to 16.2% as of December 31, 2001). We
experienced a slight decrease in the overall quality of Cartão Unibanco s
aggregate portfolio.

The allowance for Unibanco and
others loan losses increased to 5.2% of our total loans for Unibanco and others as
of December 31, 2002, compared to 4.7% as of December 31, 2001. Our total loans for
Unibanco and others within risk levels AA to C increased 6.6% to R$21,305 million as of
December 31, 2002, compared to R$19,990 million as of December 31, 2001. Our total loans
for Unibanco and others within risk levels D to H increased 29.0% to R$1,937 million of
which R$724 million were nonperforming loans as of December 31, 2002, compared to R$1,502
million of which R$588 million were nonperforming loans as of December 31, 2001. Our loan
portfolio for Unibanco and others within risk levels AA to C was 91.7% as a percentage of
our total loans for Unibanco and others as of December 31, 2002, compared to 93.0% as of
December 31, 2001; whereas our loan portfolio for Unibanco and others within risk levels D
to H was 8.3% as a percentage of our total loans for Unibanco and others as of December
31, 2002, compared to 7.0% as of December 31, 2001. We experienced a slight decrease in
the overall quality of Unibanco and others aggregate portfolio, due to economic
conditions in Brazil in 2002.

Nonperforming loans of the overall
portfolio which comprises all loans 60 days or more overdue, when we stop the accrual of
interest, represented 3.9% of our loan portfolio as of December 31, 2002 compared to 4.2%
as of December 31, 2001, which showed an improvement in our loan portfolio, although this
was partially offset by the negative economic scenario in 2002. We believe that our
current allowance for loan losses is sufficient to cover probable loan losses. For
additional information on the Central Banks regulations and our policy relating to
allowances for nonperforming loans, see  Selected Statistical
Information and Item 4.Information on the Company  The Brazilian Banking
Industry; Regulation and Supervision.

Non-Interest Income

The following table shows the
principal components of our non-interest income for 2001 and 2002.

|                                                                    | For the Year Ended  |        
|------------------------------------------------------------------- | ------------------- | -------
|                                                                    | December 31,        |        
|                                                                    | 2001                | 2002   
|                                                                    | (in millions of R$) |        
|Fee and commission income                                           | R$1,653             | R$1,854
|Trading income (expenses)                                           | 120                 | (1,972)
|Net gain on securities                                              | 18                  | 49     
|Net gain on foreign currency transactions                           | 67                  | 96     
|Equity in results of unconsolidated companies                       | 235                 | 184    
|Insurance, private retirement plan and pension investment contracts | 1,046               | 1,291  
|Other non-interest income                                           | 622                 | 1,714  
|Total                                                               | R$3,761             | R$3,216

Non-interest income decreased 14.5%
in 2002, principally due to the following decreases:

- R$2,092 million decrease in trading income (expenses); and
- R$51 million decrease in equity in results of unconsolidated
companies;
- offset by following increases: R$1,092 million in othernon-interest
income; R$245 million in insurance, private retirement plan and pension investment
contracts and R$201 million in fee and commission income.

Fee and Commission Income. The
increase in fee and commission income was due to R$159 million or a 17.5% increase in
banking tariffs and other fees and commissions to R$1,069 million in 2002 from R$910
million in 2001, largely due to organic growth stemming from our ContAtiva initiative to
increase our retail banking customer base, and our success in cross-selling our products
and services. The ContAtiva initiative was designed to add 1.8 million new retail
customers by the end of 2003. We achieved this target in February 2003, well ahead of
schedule, which led to the launch of ContAtiva 2, aimed at attracting 3,6 million new
accounts over the coming five years. Growth in fee commission income was also driven by
credit card fees, which increased 9.1%or R$33 million as compared to 2001, largely due to
volume growth. We experienced only 1.6% increase in fees from assets under management as a
result of migration from assets management funds to time and savings deposits, by the
introduction of the new mark-to market rule for funds in May 2002, which decreased the
volume of our asset management funds.

Trading Income. Trading
income decreased to a loss of R$1,972 million in 2002 from a gain of R$120 million in
2001, affected by the unfavorable market conditions in 2002 as compared to more favorable
market conditions in 2001. As discussed above in 2002 the Brazilian market conditions were
affected strongly by the Argentina crisis and the uncertainly surrounding the change of
the Brazilian government, which caused a strong volatility in the market, a devaluation of
52.3% in the real, an increase in interest rates, which adversaly affected the fair
value of our securities indexed or denominated in US dollars. As a consequence the market
value of our trading assets, mainly indexed in US dollars decreased to an unrealized loss
of R$166 million in 2002 as compared with R$69 million of unrealized gain in 2001. For the
same reasons our derivatives operations in futures contracts, which are recorded as
non-interest income, since they not accrue income but rather are adjusted daily by
BM&F, as a result of changes in interest rates, foreign currency and market
conditions, are also affected resulting in a loss of R$1,698 million in 2002 as compared
to a loss of R$36 million in 2002. The loss of R$1,698 million includes R$794 million
related to our hedge of investments abroad as compared to a R$78 loss in 2001.

Net Gain on Foreign Currency
Transactions. The increase in net gain on foreign currency transactions to R$96
million in 2002 from R$67 million in 2001 reflected the fact that we were particularly
active in 2002 in conducting foreign currency transactions, mainly in U.S. dollars,
generating foreign exchange revenue.

Equity in Results of
Unconsolidated Companies. Equity in results of unconsolidated companies decreased to
R$184 million in 2002 from R$235 million in 2001, primarily due to the results of
Credicard, which decreased our equity in results of unconsolidated companies to R$123
million in 2002 from R$151 million in 2001. The decrease in Credicards results in
2002 was mainly due to the transfer of an important affiliated member who started to
manage its own portfolio. The acquisition of the remaining 24.5% interest in Unicorp which
results have been consolidated from April 2002 also decreased our equity in results of
unconsolidated companies by R$17 million, since we recognized only 3 months results of
Unicorp in 2002 as equity as compared with the entire year in 2001.

Insurance, Private Retirement
Plans and Pension Investment Contracts. In 2002, insurance premiums, private
retirement plan premiums and pension investment contracts increased 23.4% compared with
2001. This was primarily as result of the sales mix, which focused on products with a
higher margin, new product launches for the brokerage channel, as well as from the opening
of four new offices in the north and south regions of Brazil and the introduction of new
life insurance sales initiatives in the bank network. For more details of our insurance
segment see Note 31 to our audited consolidated U.S. GAAP financial statements and
Item 4. Information on the CompanyPrincipal Business Activities; Insurance and Related Activities.

Other non-interest Income.
Other non-interest income increased to R$1,714 million in 2002 from R$622 million in 2001,
mainly due to the increase of R$905 million in gain on our overseas investments due to the
impact of the devaluation of the real.

Non-Interest Expense

The following table shows the
principal components of our non-interest expense for 2001 and 2002.

|                                                                    | For the Year Ended  |        
|------------------------------------------------------------------- | ------------------- | -------
|                                                                    | December 31,        |        
|                                                                    | 2001                | 2002   
|                                                                    | (in millions of R$) |        
|Salaries and benefits                                               | R$1,716             | R$1,783
|Administrative expenses                                             | 2,134               | 2,202  
|Amortization of goodwill and other intangibles                      | 150                 | 90     
|Insurance, private retirement plan and pension investment contracts | 955                 | 1,306  
|Other non-interest expense                                          | 932                 | 1,204  
|Total                                                               | R$5,887             | 6,585  

Non-interest expense increased 11.9%
in 2002, primarily due to:

- a 36.8% increase in insurance and private retirement plan
expenses;
- a 29.2% increase in other non-interest expenses;
- a 3.9% increase in salaries and benefits;
- a 3.2% increase in administrative expenses; and
- offset by a 40.0 % decrease in amortization of goodwill and
other intangibles;

Salaries and benefits. In
2002, salaries and benefits increased 3.9% compared to 2001, despite the impact of salary
adjustments during the second half to 2001 and 2002, when salaries were increased. This
relatively small increase reflects the efficiency gain that resulted from the Bandeirantes
integration process, which offset the higher salaries in 2002.

Administrative expenses.
Administrative expenses increased 3.2% in 2002 compared to 2001, primarily due to an
increase in telephone, postal and power rates, as well as of data transmission and
transportation, and higher processing volumes.

Insurance, private retirement
plan, and pension investment contracts. The increase of 36.8% in insurance, private
retirement plan and pension investment contracts, to R$1,306 million in 2002 compared to
R$955 million in 2001, was a consequence of the 23.4 % growth of the related income in
insurance private retirement plan and pension investments contracts . As described above,
we had an increase in our insurance portfolio due to change in sales mix, new products,
launches for the brokerage channel and the opening of our new offices and integration of
new initiatives in the bank network.

Other non-interest expense.
The increase of 29.2% or R$272 million in other non-interest expenses in 2002 was due to
R$37 million increase in loss on foreclosed assets and premises and equipments, mainly on
sale through auctions of properties used as a branch and foreclosed assets in 2002, offset
by the increase in gain in the amount of R$67 million recorded in other non-interest
income. The increase was also due to R$54 million increase in expenses with civil
litigation; R$43 million increase in credit card selling expenses and R$33 million of
foreign exchange rate variation on other liabilities.

Income Tax

Income tax in Brazil comprises
federal income taxes and social contribution on earnings. We recorded income tax revenue
of R$276 million in 2002 from R$38 million expenses in 2001. The difference was mainly due
to impact of the devaluation of the real on our overseas investments. The
devaluation of the real decreased our income tax by R$308 million, since gains
obtained as a result of the devaluation are non-taxable. The decision to pay more
tax-deductible interest on stockholder equity, rather than paying dividends for
2002, compared to 2001 also decreased income tax in R$18 million. This was offset by a
R$92 million increase in our income tax due to changes in the rules of government as to
items to be included in taxable income. Our tax basis decreased R$254 million to R$458
million in 2002 from R$712 million in 2001. Simply applying the statutory tax rate of 34%
to the R$254 million decrease in our tax basis in 2002 as compared to 2001, we would have
experienced a decrease of R$86 million in our income tax, rather than the R$314 million
decrease we actually experienced which was mainly as a result of the factors above.

For more information regarding income
tax expense, see Note 18 to our audited consolidated U.S. GAAP financial statements.

Results of Operations
for Year Ended December 31, 2001 Compared to Year Ended December 31, 2000

The following table shows the
principal components of our consolidated net income for 2000 and 2001.

|                                          | For the Year Ended  |        
|----------------------------------------- | ------------------- | -------
|                                          | December 31,        |        
|                                          | 2000                | 2001   
|                                          | (in millions of R$) |        
|Net interest income                       | R$2,708             | R$4,173
|Provision for loan losses                 | (676)               | (1,100)
|Non-interest income                       | 2,967               | 3,761  
|Non-interest expense                      | (4,288)             | (5,887)
|Income before taxes and minority interest | 711                 | 947    
|Income tax                                | (14)                | (38)   
|Income before minority interest           | 697                 | 909    
|Minority interest                         | (69)                | (84)   
|Net income                                | R$628               | R$825  

Net income in 2001 increased by R$197
million, or 31.4%, compared to 2000 primarily due to an R$1,465 million, or 54.1%,
increase in our net interest income in 2001 compared to 2000 primarily due to the increase
in our loan portfolio. While non-interest income in 2001 increased by R$794 million, or
26.8%, compared to 2000, our provision for loan losses in 2001 increased by R$424 million,
or 62.7%, compared to 2000. The increase in our provision for loan losses in 2001 compared
to 2000 was mainly due to the consolidation of Fininvest in 2001 since the lower income
segment generally has a higher default ratio than other segments. Additionally, the
increase in net income was partially offset by an R$1,599 million, or 37.3%, increase in
non-interest expenses, in part due to an increase in salaries and benefits and
administrative expenses associated with the acquisition of Banco Bandeirantes and our
organic growth.

In 2001 our results were affected by
the inclusion of the operations of Banco Bandeirantes and Fininvest, which we acquired in
December 2000. In 2000 our results included only one month of operations of these
acquisitions. Prior to December 2000, we owned 49.7% of Fininvest and accounted for its
results as equity in unconsolidated companies.

Net Interest Income

The following table shows the
principal components of our net interest income, before provision for loan losses, for
2000 and 2001.

|                    | For the Year Ended  |        
|------------------- | ------------------- | -------
|                    | December 31,        |        
|                    | 2000                | 2001   
|                    | (in millions of R$) |        
|Interest income     | R$5,813             | R$9,713
|Interest expense    | (3,105)             | (5,540)
|Net interest income | R$2,708             | R$4,173

Net interest income increased by
R$1,465 million, or 54.1%, in 2001 compared to 2000, as a result of a R$3,900 million
increase in interest income, primarily due to the growth in our loan portfolio, mainly due
to our organic growth and the acquisition and consolidation of Banco Bandeirantes and
Fininvest in December 2000, the devaluation of the real in 2001, resulting in
higher interest income on our dollar-indexed interest-earning assets and the increase in
Brazilian interest rates in 2001, resulting in higher interest income from our domestic
loans. At the same time interest expense increased R$2,435 million as a result of the
acquisition and consolidation of Banco Bandeirantes and Fininvest in December 2000, the
devaluation of the real in 2001, which resulted in higher interest expense on our
international borrowings in 2001. The increase in Brazilian interest rates in 2001
compared to 2000 also resulted in increased interest expense on our domestic borrowings
and deposits.

The following table shows how much of
the R$1,465 million increase in our net interest income was attributable to changes in the
average volume of interest-earning assets and interest-bearing liabilities and changes in
the average interest rates, including the effects of devaluation of the real, in each case
for 2001 as compared to 2000.

|                                                     | 2001/2000          
|---------------------------------------------------- | -------------------
|                                                     | Increase           
|                                                     | (in millions of R$)
|Due to changes in average volume of interest-earning |                    
|assets and interest-bearing liabilities              | R$1,168            
|Due to changes in average interest rates             | 297                
|Net change                                           | R$1,465            

The average volume of
interest-earning assets and the average volume of interest-bearing liabilities increased
by 46.6% and 55.7%, respectively, in 2001 compared to 2000, resulting in an increase in
net interest income of R$1,168 million. The average interest rates on interest-earning
assets and interest-bearing liabilities increased by 14.1% and 14.2%, respectively, in
2001 compared to 2000, resulting in an increase in net interest income of R$297 million.

Net interest margin is net interest
income as a percentage of average interest-earning assets. Our net interest margin
increased to 10.1% in 2001 from 9.6% in 2000. This increase in net interest margin was due
to the increase of 54.1% in our net interest income as discussed above, compared to a 5.4%
increase in the average volume of our interest-earning assets, net of our interest-bearing
liabilities.

Interest Income. Interest
income for 2001 increased by R$3,900 million, or 67.1%, primarily due to an increase in
our interest-earning assets, due to our organic growth and acquisition and consolidation
of Banco Bandeirantes and Fininvest in December 2000 and an increase in our average
interest rates paid on our interest-earning assets (to 23.4% per annum in 2001 from 20.5%
per annum in 2000) as a result of the real devaluation of 18.7% against the U.S.
dollar and the increase in Brazilian interest rates in 2001.

The following table shows the
principal components of our average interest-earning assets and the average interest rates
earned in 2000 and 2001.

|                                                                     | For the Year Ended  |         
|-------------------------------------------------------------------- | ------------------- | --------
|                                                                     | December 31,        |         
|                                                                     | 2000                | 2001    
|                                                                     | (in millions of R$) |         
|Average interest-earning asset                                       |                     |         
|Interest-bearing deposits in other banks                             | R$965               | R$1,838 
|Federal funds sold and securities purchased under resale agreements. | 3,971               | 3,877   
|Central Bank compulsory deposits                                     | 446                 | 646     
|Trading assets                                                       | 5,735               | 10,406  
|Securities available for sale                                        | 1,114               | 2,153   
|Securities held to maturity                                          | 1,003               | 742     
|Loans                                                                | 15,029              | 21,783  
|Other interest-earning assets                                        | 31                  | 42      
|Total                                                                | R$28,294            | R$41,487
|Average interest rate earned:                                        | 20.5%               | 23.4%   

The following table shows how much of
the R$3,900 million increase in our interest income was attributable to changes in the
average volume of interest-earning assets and changes in the average interest rates,
including the effects of devaluation of the real, in each case for 2001 as compared
to 2000.

|                                                            | 2001/2000          
|----------------------------------------------------------- | -------------------
|                                                            | Increase           
|                                                            | (in millions of R$)
|Due to changes in average volume of interest-earning assets | R$3,095            
|Due to changes in average interest rates                    | 805                
|Net change                                                  | R$3,900            

Interest income increased R$3,900
million, or 67.1%, in 2001, primarily as a result of:

- a 72.4%  increase  in  interest  income on loans,  to R$6,677
 million in 2001 from  R$3,872               million in 2000;
- a 53.9% increase in interest income earned on federal funds
sold and securities purchased under agreements to resell and in trading assets, to
R$2,367 million in 2001 from R$1,538 million in 2000; and
- a 93.3% increase in interest in securities available for sale
to and R$346 million, in 2001 from R$179 million in 2000.

The increase in interest income on
loans was primarily due to a 44.9% increase in average loans as a result of our organic
growth and the acquisition and consolidation of Banco Bandeirantes and Fininvest in
December 2000. These acquisitions increased our loan portfolio by R$1,831 million and
R$967 million, respectively, as of the acquisition date. The increase in interest income
on loans was also due to the increase in average interest rates to 30.7% per annum in 2001
from 25.8% per annum in 2000; as a result of the devaluation of the real in 2001,
since approximately 27.2% of our loan portfolio is indexed in to U.S. dollars; and the
increase in interest rates in Brazil during 2001 which resulted in higher interest income
on our domestic loans.

Interest income on federal funds sold
and securities purchased under agreements to resell and on trading assets was attributable
to the increase in average balances, which together increase R$4,577 to R$14,283 million
in 2001 from R$9,706 million in 2000 as a result of higher liquidity in the market and to
a lesser extent together increase to 16.6% in 2001 from 15.8% in 2000.

The increase in interest income on
securities available for sale was due to an increase in. The increase in in the average
balance of our securities available for sale to R$2,153 million as of December 31, 2001
from R$1,114 million as of December 31, 2000, mainly due to an increase in corporate
debentures.

Interest Expense. Interest
expense for 2001 increased 78.4% to R$5,540 million, primarily due to an increase of 55.7%
in our average interest-bearing liabilities due to our organic growth and the acquisition
and consolidation of Banco Bandeirantes and Fininvest in December 2000 and due to an
increase in average rates paid on our interest-bearing liabilities (to 15.3% per annum in
2001 from 13.4% per annum in 2000) mainly due to the devaluation of the real in
2001.

The following table shows the
principal components of our average interest-bearing liabilities and the average interest
rates we paid on those liabilities in 2000 and 2001.

|                                                                        | For the Year Ended  |         
|----------------------------------------------------------------------- | ------------------- | --------
|                                                                        | December 31,        |         
|                                                                        | 2000                | 2001    
|                                                                        | (in millions of R$) |         
|Average interest-bearing liabilities                                    |                     |         
|Savings deposits                                                        | R$2,959             | R$4,419 
|Time deposits                                                           | 4,362               | 8,263   
|Deposits from banks                                                     | 219                 | 458     
|Federal funds purchased and securities sold under repurchase agreements | 3,966               | 8,175   
|Short-term borrowings                                                   | 4,516               | 6,800   
|Long-term debt                                                          | 7,188               | 8,013   
|                                                                        |                     |         
|Total                                                                   | R$23,210            | R$36,128
|                                                                        |                     |         
|Average interest rate paid:                                             | 13.4%               | 15.3%   

The following table shows how much of
the R$2,435 million increase in our interest expense in 2001 was attributable to changes
in the average volume of interest-bearing liabilities and to changes in average interest
rates, including the effects of the devaluation of the real, in each case for 2001
as compared to 2000.

|                                                                 | 2001/2000          
|---------------------------------------------------------------- | -------------------
|                                                                 | Increase           
|                                                                 | (in millions of R$)
|Due to changes in average volume of interest-bearing liabilities | R$1,927            
|Due to changes in average interest rates                         | 508                
|Net change                                                       | R$2,435            

Interest expense for 2001 increased
R$2,435 million, or 78.4%, mainly due to the following increases:

- 95.9% in interest on  short-term  borrowings  to R$1,142
 million in 2001 from R$583 million in 2000;
- 34.1% in interest  on  long-term  debt to R$1,542  million in
2001 from  R$1,150  million in 2000;
- 94.9% in interest on time  deposits to R$1,331  million in 2001
from R$683  million in 2000;and
- 45.1% in interest on savings deposits to R$338 million in 2001
from R$233 million in 2000.

The R$559 million increase in
interest expense on short-term borrowings was partially due to a R$551 million increase in
interest expense on international short-term borrowings, to R$1,131 million in 2001 from
R$580 million in 2000, which was primarily due to the 18.7% devaluation of the real
against the U.S. dollar which increased our averages rates paid on our dollar-denominated
short-term borrowings, particularly, our import and export financings, to 16.8% per annum
in 2001 from 12.9% per annum in 2000. To a lesser extent our balance of short-term
borrowings was also affected by an increase in the average balance of international
borrowings which increased to R$6,745 million in 2001, from R$4,494 million in 2000,
mainly due to the devaluation of the real primarily in the second and third
quarters of 2001.

The R$392 million increase in
interest expense on long-term debt was due to a R$466 million increase in interest on
international long-term debt. This increase was primarily due to the devaluation of the
real in 2001, which increased our average rates paid on our dollar-denominated
long-term debt, mainly our euronotes issued abroad, to 29.9% per annum in 2001 from 20.2%
per annum in 2000. The real devaluation also increased our average balances related
to international long-term debt to R$3,136 million in 2001 from R$2,336 million in 2000.
Our domestic long-term debt had a change in the portfolio mix, while our average balance
BNDES onlending activities increased R$961 million, or 33.4%, in 2001 compared to 2000,
the average balance of domestic debentures decreased R$823 million, or 69.7%, in 2001
compared to 2000. We repurchased our debentures in 2001, since the expectation of the
market was an increase in interest rates due to an increase in Brazilian interest rates in
2001. The interest rate of our debentures was reset periodically. The increase in BNDES
onlendings activities was mainly due our organic growth and a lesser extent due to the
acquisitions of Banco Bandeirantes and Credibanco, which increased our portfolio by R$327
million and R$353 million, respectively, at the acquisition dates. The increase in the
domestic onlending activities and decrease in domestic debentures decreased the average
rates paid on our domestic long-term debt to 12.4% per annum in 2001 from 14.0% per annum
in 2000, offset by the increase in interest rates in Brazil.

The R$648 million increase in
interest expense on time deposits was due to our organic growth and the introduction of
new time deposit products as well as the acquisition of Banco Bandeirantes and Fininvest
in December 2000. At the date of the acquisitions our time deposits increased R$1,392
million of which R$748 million was due to the Banco Bandeirantes acquisition and R$644
million was due to the Fininvest acquisition. As a result our average balance of time
deposits increased R$3,901 million, or 89.4%.

The R$105 million increase in
interest expense on saving deposits was due to a R$1,460 million, or 49.3%, increase in
the average balance of savings deposits in 2001, due to our organic growth as well as the
acquisition of Banco Bandeirantes which increased our saving deposits by R$1,005 million
as of the acquisition date.

Provision for Loan Losses

The following table shows our
provision for loan losses and loan charge-offs and recoveries for 2000 and 2001. It also
shows our provision to loans ratio (expressed as a percentage of average loans).

|                                                                 | For the Year Ended  |        
|---------------------------------------------------------------- | ------------------- | -------
|                                                                 | December 31,        |        
|                                                                 | 2000                | 2001   
|                                                                 | (in millions of R$) |        
|Balance beginning of year                                        | R$756               | R$1,005
|Provision for loan losses                                        | 676                 | 1,100  
|Loan charge-offs                                                 | (732)               | (1,298)
|Loan recoveries                                                  | 305                 | 469    
|Net charge-offs                                                  | (427)               | (829)  
|                                                                 |                     |        
|Balance, end of year                                             | R$1,005             | R$1,276
|Provision to average loans ratio (including nonperforming loans) | 4.3%                | 4.8%   

|                                 | For the Year Ended December 31, 2000
|-------------------------------- | ------------------------------------
|                                 |                                     
|                                 | Cartão Unibanco                     
|                                 | (in millions of R$)                 
|Balance beginning of year        | R$100                               
|Provision for loan losses        | 97                                  
|Loan charge-offs                 | (199)                               
|Loan recoveries                  | 40                                  
|Net charge-offs                  | (159)                               
|                                 |                                     
|Balance, end of year             | R$38                                
|Provision to average loans ratio
|(including nonperforming loans)  | 15.4%                               

|                                 | For the Year Ended December 31, 2001
|-------------------------------- | ------------------------------------
|                                 |                                     
|                                 | Cartão Unibanco                     
|                                 | (in millions of R$)                 
|Balance beginning of year        | R$38                                
|Provision for loan losses        | 158                                 
|Loan charge-offs                 | (164)                               
|Loan recoveries                  | 37                                  
|Net charge-offs                  | (127)                               
|                                 |                                     
|Balance, end of year             | R$69                                
|Provision to average loans ratio
|(including nonperforming loans)  | 20.7%                               

The 62.7% increase in our provision
for loan losses during 2001 was primarily attributable to a R$511 million increase in our
provision relating to Fininvest. In 2001, we consolidated Fininvest, while in 2000 only
the results of one month of December were consolidated. This increase in provision for
Fininvest was also due to a 34.8% increase in Fininvests loan portfolio as of
December 31, 2001 compared to December 31, 2000, and also resulted from economic
circumstances related to the lower income segment of the retail market and rising
unemployment levels that were experienced in 2001. Although the lower income segment
requires higher provisions as a result of higher default rates, this segment generally
features a higher volume of transactions and higher spreads. Our total provision included
a R$61 million increase for losses in Cartão Unibanco due to a 24.4% increase in
its portfolio. These increases, which amounted to R$572 million, were offset by a R$148
million decrease in provision for loan losses for our other portfolios, due to a general
improvement in their credit quality and occurred despite a 16.4% increase in the size of
these other portfolios.

Loan charge-offs increased 77.3% in
2001 compared to 2000, as a consequence of two main factors. First, the March 2000 change
in Brazilian banking practice for loan charge-offs, requiring loan charge-offs to be made
360 as opposed to 240 days after the due date, resulted in a 120-day period in 2000 during
which we took no charge-offs and reduced our loan charge-offs by R$476 million in 2000.
Second, we experienced an increase of R$566 million in loan charge-offs in 2001 due to an
increase of R$542 million relating to Fininvest for the reasons described above, as well
as Fininvests adoption of a shorter period for charge-offs (typically between 180
and 210 days), due to the relatively higher rate of default characteristics of the lower
income segment in which Fininvest operates. The remaining increase of R$24 million was a
consequence of a R$59 million increase in loan charge-offs for our other portfolios,
offset by a R$35 million decrease in loan charge-offs for Cartão Unibancos
portfolio (which adopts a shorter period for charge-offs).

Loan recoveries increased 53.8%
primarily due to the increase in loan charge-offs in 2001 compared to 2000.

The following table shows our total
loans and allowance for loan losses of our loan portfolio, by category, as of December 31,
2000 and 2001.

|                      | As of December 31, 2000 | As of December 31, 2001 |         
|--------------------- | ----------------------- | ----------------------- | --------
|                      | Total                   | Total                   | Total   
|                      | loans                   | allowance               | net     
|Commercial:          
|Industrial and other. | R$9,539                 | R$ 551                  | R$8,988 
|Import and export    
|financing             | 3,781                   | 34                      | 3,747   
|Real estate loans     | 507                     | 41                      | 466     
|Direct lease          | 904                     | 78                      | 826     
|Individuals:         
|Overdraft             | 786                     | 56                      | 730     
|Financing             | 2,627                   | 112                     | 2,515   
|Credit card           | 1,436                   | 96                      | 1,340   
|Agricultural          | 734                     | 37                      | 697     
|                      |                         |                         |         
|Total                 | R$20,314                | R$1,005                 | R$19,309
|                      |                         |                         |         

The allowance allocated to industrial
and other loans decreased to 4.1% of our total loans for industrial and other loans as of
December 31, 2001, compared to 5.8% as of December 31, 2000, although our industrial and
other loan portfolio increased by 25.6% for the year. This was due to the improvement in
the quality of our industrial and other loans. This decrease in the allowance for
industrial and other loans as a percentage of total loans in 2001 was offset by the
inclusion in 2000 of the loan portfolio of Banco Bandeirantes without provisions since the
loans acquired were recorded at fair value at the date of the acquisition, thereby
increasing our loan portfolio in 2000 relatively more, compared to the allowance for loan
losses.

The allowance allocated to individual
financing loans increased to 7.4% of our total individual financing loans as of December
31, 2001, from 4.3% as of December 31, 2000, and the allowance allocated to credit card
loans increased to 11.4% of our total credit card loans as of December 31, 2001, from 6.7%
as of December 31, 2000. These increases reflected increases of 33.8% and 36.9% in our
individual financing and credit card loan portfolios respectively, for the year.

The increases in total loans to
individuals for financing and credit cards and in the related allowance for loan losses
were significantly affected by the inclusion in 2000 of the loan portfolio of Fininvest
and to a lesser extent, by the inclusion of the loan portfolio of Banco Bandeirantes
without provisions, since the loans acquired were recorded at fair value at the dates of
the acquisitions. As described above the increase of 34.8% in Fininvests loan
portfolio as of December 31, 2001 compared to December 31, 2000 also contributed to the
increases, since the lower income segment requires higher provisions as a result of higher
default rates.

The allowance allocated to our direct
lease loans increased to 11.1% of our total direct lease loans as of December 31, 2001,
compared to 8.6% as of December 31, 2000. This increase in the allowance was offset by a
decrease of 12.3% in our direct lease loan portfolio for the same year. The allowance for
loan losses for direct leases was affected by the inclusion in 2000 of the loan portfolio
of Banco Bandeirantes, without provisions since the loans acquired were recorded at fair
value of the date of the acquisition. Additionally, Banco Bandeirantes customers
generally have lower credit ratings than Unibancos customers. The decrease in the
direct lease portfolios was due to the change in our portfolio mix to more individual
financing, including installment financing, mainly for personal automobiles.

As of December 31, 2001 our
consolidated allowance for loan losses was R$1,276 million, representing 5.3% of our total
loans, compared to R$1,005 million, representing 4.9% of our consolidated loans, as of
December31, 2000. Our allowance for loan losses as of December 31, 2001 was 27.0% higher
than as of December 31, 2000, while our loan portfolio grew by 17.7% during the year.

This reflected the general
improvement in the credit quality of our portfolio, offset by the impact of the inclusion
in 2000 of the loan portfolios of Banco Bandeirantes and Fininvest without provisions
since the loans acquired were recorded at fair value at the dates of the acquisitions,
which decreased our allowance for loan losses as a percentage of total loans as of
December 31, 2000.

The following tables show, by risk
level, our consolidated loans, nonperforming loans and allowance for loan losses, as of
December 31, 2000 and 2001. The risk level classification was adopted by the Central Bank
for all Brazilian financial institutions in March 2000. The minimum allowance for each
level is utilized by us as a general rule, however, based on our managements
judgment and experience, higher percentages are used in order to more accurately evaluate
the risk of certain clients, operations or portfolios.

See Item 4.Information on the
Company  Risk Management  Credit Overview.

|           | As of December 31, 2000
|---------- | -----------------------
|           | Fininvest              
|           |                        
|Risk level | Loans                  
|           | (in millions of R$)    
|AA         | R$77                   
|A          | 728                    
|B          | 125                    
|C          | 97                     
|D          | -                      
|E          | -                      
|F          | -                      
|G          | -                      
|H          | -                      
|           |                        
|Total      | R$1,027                
|           |                        

|           | As of December 31, 2000
|---------- | -----------------------
|           | Unibanco and others    
|           |                        
|Risk level | Loans                  
|           | (in millions of R$)    
|AA         | R$8,688                
|A          | 4,397                  
|B          | 1,925                  
|C          | 2,111                  
|D          | 318                    
|E          | 44                     
|F          | 76                     
|G          | 102                    
|H          | 139                    
|           |                        
|Total      | R$17,800               
|           |                        

|           | As of December 31, 2001
|---------- | -----------------------
|           | Fininvest              
|           |                        
|Risk level | Loans                  
|           | (in millions of R$)    
|AA         | R$61                   
|A          | 973                    
|B          | 111                    
|C          | 91                     
|D          | 12                     
|E          | 7                      
|F          | 4                      
|G          | 3                      
|H          | 10                     
|           |                        
|Total      | R$1,272                
|           |                        

|           | As of December 31, 2001
|---------- | -----------------------
|           | Unibanco and others    
|           |                        
|Risk level | Loans                  
|           | (in millions of R$)    
|AA         | R$10,188               
|A          | 4,681                  
|B          | 2,261                  
|C          | 2,854                  
|D          | 381                    
|E          | 110                    
|F          | 88                     
|G          | 136                    
|H          | 199                    
|           |                        
|Total      | R$20,898               
|           |                        

The allowance for loan losses for
Fininvest increased to 12.6% of our total loans for Fininvest as of December 31, 2001 from
4.5% as of December 31, 2000, mainly due to the inclusion in 2000 of the loan portfolios
of Fininvest without provisions since the loans acquired were recorded at fair value at
the date of acquisition which decreased our allowance for loan losses as a percentage of
total loans as of December 31, 2000. The increase in the allowance for loan losses for
Fininvest as a percentage of total loans of Fininvest also increased due to the 34.8%
increase in Fininvests loan portfolio as of December 31, 2001 compared to December
31, 2000, as well as to a decline in the quality of Fininvests portfolio. The
decline in the quality of Fininvests portfolio reflects the economic circumstances
related to the lower income segment of the retail market and rising unemployment levels
that were experienced in 2001. Our total loans for Fininvest within credit risk levels AA
through C increased 20.4% to R$1,236 million as of December 31, 2001, compared to R$1,027
million as of December 31, 2000. Total loans within credit risk levels D through H
increased 156.6% to R$313 of which R$277 million were nonperforming loans as of December
31, 2001, compared to R$122 million of which were nonperforming loans as of December 31,
2000. Our loan portfolio for Fininvest within credit risk levels AA to C was 79.8% as a
percentage of our total loans for Fininvest as of December 31, 2001, compared to 89.4% as
of December 31, 2000; whereas our loan portfolio for Fininvest within risk levels D to H
was 20.2% of our total loans for Fininvest as of December 31, 2001, compared to 10.6% as
of December 31, 2000. As previously described, all amounts are impacted by the inclusion
in 2000 of the loan portfolio of Fininvest without provisions since the loans acquired
were recorded at fair value at the date of the acquisition, which decreased our allowance
for loan losses as a percentage of our total loans (including nonperforming loans).

Although the allowance for loan
losses for Cartão Unibanco increased to 7.9% of our total loans for Cartão
Unibanco as of December 31, 2001 compared to 5.4% as of December 31, 2000, Cartão
Unibancos aggregate credit portfolio increased 24.4% for the same year. Our total
loans for Cartão Unibanco within credit risk levels AA to C increased 18.3% to
R$730 million as of December 31, 2001, compared to R$617 million as of December 31, 2000.
Our total loans for Cartão Unibanco within risk levels D to H increased 69.9% to
R$141 million of which R$131 million were nonperforming loans as of December 31, 2001
compared to R$83 million of which R$80 million were nonperforming loans as of December 31,
2000. Our loan portfolio for Cartão Unibanco within risk levels AA to C was 83.8%
as a percentage of our total loans for Cartão Unibanco as of December 31, 2001,
compared to 88.1% as of December 31, 2000; whereas our loan portfolio for Cartão
Unibanco within risk levels D to H was 16.2% as a percentage of our total loans for
Cartão Unibanco as of December 31, 2001 (compared to 11.9% as of December 31,
2000). We experienced a slight decrease in the overall quality of Cartão Unibanco
s aggregate portfolio.

As a result of the general
improvement in the ability of our borrowers to pay their obligations, the allowance for
Unibanco and others loan losses decreased to 4.7% of our total loans for Unibanco
and others as of December 31, 2001, compared to 5.0% as of December 31, 2000. Our total
loans for Unibanco and others within risk levels AA to C increased 16.8% to R$19,990
million as of December 31, 2001, compared to R$17,121 million as of December 31, 2000. Our
total loans for Unibanco and others within risk levels D to H increased 11.8% to R$1,502
million of which R$588 million were nonperforming loans as of December 31, 2001, compared
to R$1,344 million of which R$665 million were nonperforming loans as of December 31,
2000. Our loan portfolio for Unibanco and others within risk levels AA to C was 93.0% as a
percentage of our total loans for Unibanco and others as of December 31, 2001, compared to
92.7% as of December 31, 2000; whereas our loan portfolio for Unibanco and others within
risk levels D to H was 7.0% as a percentage of our total loans for Unibanco and others as
of December 31, 2001, compared to 7.3% as of December 31, 2000. We experienced a slight
increase in the overall quality of Unibanco and others aggregate portfolio, offset
by the impact of the inclusion in 2000 of the loan portfolio of Banco Bandeirantes without
provisions since the loans acquired were recorded at fair value at the date of the
acquisition, which decreased our allowance for loan losses as percentage of total loans as
of December 31, 2000.

Nonperforming loans of the overall
portfolio which comprises all loans 60 days or more overdue, when we stop the accrual of
interest, represented 4.2% of our loan portfolio as of December 31, 2001 compared to 4.3%
as of December 31, 2000, basically the same level, disregarding the effect of the
inclusion in 2000 of the loan portfolios of Banco Bandeirantes and Fininvest without
provisions since the loans acquired were recorded at fair value at the dates of the
acquisitions.

We believe that our current allowance
for loan losses is sufficient to cover probable loan losses. The modification in Brazilian
banking practice referred to above has no effect on income, stockholders equity or
the balance of net loans.

For additional information on the
Central Banks regulations and our policy relating to allowances for nonperforming
loans, see  Selected Statistical Information and Item
4.Information on the Company  The Brazilian Banking Industry; Regulation and
Supervision.

Non-Interest Income

The following table shows the
principal components of our non-interest income for 2000 and 2001.

|                                                                    | For the Year Ended  |         
|------------------------------------------------------------------- | ------------------- | --------
|                                                                    | December 31,        |         
|                                                                    | 2000                | 2001    
|                                                                    | (in millions of R$) |         
|Fee and commission income                                           | R$ 1,134            | R$ 1,653
|Trading income (expenses)                                           | 91                  | 120     
|Net gain on securities                                              | -                   | 18      
|Net gain on foreign currency transactions                           | 17                  | 67      
|Equity in results of unconsolidated companies                       | 164                 | 235     
|Insurance, private retirement plan and pension investment contracts | 794                 | 1,046   
|Other non-interest income                                           | 767                 | 622     
|                                                                    |                     |         
|Total                                                               | R$ 2,967            | R$ 3,761
|                                                                    |                     |         

Non-interest income increased 26.8%
in 2001, principally due to the following increases:

- 45.8% in fee and commission income;
- 43.3% in equity in results of unconsolidated companies; and
- 31.7% in insurance, private retirement plan and pension
investment contracts.

These increases were offset by an
18.9% decrease in other non-interest income.

Fee and Commission Income. The
increase in fee and commission income was due to a 41.5% increase in banking tariffs and
other fees and commissions to R$910 million in 2001 from R$643 million in 2000, largely
due to organic growth stemming from our ContAtiva initiative to increase our retail
banking customer base, and our success in cross-selling our products and services to
former customers of Banco Bandeirantes. Our ContAtiva initiative, which was launched in
October 2000, markets our new retail services to the same segments of the market as our
traditional customer base. The ContAtiva program is initially designed to add 1.8 million
new retail customers by the end of 2003; as of December 31, 2001, the program had already
yielded nearly 1.0 million new clients. Growth in fee and commission income was also
driven by credit card fees, which increased to R$362 million in 2001 from R$146 million in
2000, largely due to the launch of new products and volume growth, as a result of higher
cardholder purchases and cash advances. Asset management fees increased 15.7% due to a
shift in our asset management product mix towards products which generate higher fees,
such as fixed income mutual funds, and the inclusion of fees from the assets under
management acquired from Banco Bandeirantes.

Trading Income. Trading income
increased to R$120 million in 2001 from R$91 million in 2000. Trading income was affected
by the favorable market conditions and reflected the increase in the average balance of
trading assets to R$10,406 million as of December 31, 2001 from R$5,735 million as of
December 31, 2000.

Net Gain on Foreign Currency
Transactions. The increase in net gain on foreign currency transactions to R$67
million in 2001 from R$17 million in 2000 reflected the fact that we were particularly
active in 2001 in conducting foreign currency transactions, mainly in U.S. dollars,
generating foreign exchange revenue.

Equity in Results of
Unconsolidated Companies. Equity in results of unconsolidated companies increased to
R$235 million in 2001 from R$164 million in 2000, primarily due to the results of
Credicard, which increased our equity in results to R$151 million in 2001 from R$105
million in 2000. Credicards results improved in 2001 mainly due to the strategies
and policies it adopted to reduce loan and fraud losses, which had adversely affected its
performance in prior years. The increase to R$33 million in 2001 from R$19 million in 2000
in our equity in results of Redecard was primarily due to the growth in debit card
operations in Brazil.

Insurance, Private Retirement
Plans and Pension Investment Contracts. In 2001, insurance premiums, private
retirement plan premiums and pension investment contracts increased 31.7% compared with
2000 mainly due to an increase in net insurance premiums in 2001 which were R$1,008
million, a 33.5% increase from 2000, primarily due to our organic growth and the inclusion
of the portfolios of Trevo Seguradora S.A. and Trevo Banorte Seguradora S.A., previously
insurance subsidiaries of Banco Bandeirantes.

Other Non-interest Income.
Other non-interest income decreased to R$622 million in 2001 from R$767 million in 2000,
mainly due to our receipt of R$224 million in proceeds from several strategic transactions
we undertook in 2000. These transactions included the divestitures of our interest in
Quatro/A; the sale of a minority interest to Portugal Telecom in connection with
establishing our Banco1.net joint venture; and the divestiture of our interest in Zip.net.
See  Overview  Other Transactions. This increase was offset by the
increase of R$140 million in gain on our overseas investments due to the impact of the
devaluation of the real.

Non-Interest Expense

The following table shows the
principal components of our non-interest expense for 2000 and 2001.

|                                                                    | For the Year Ended  |         
|------------------------------------------------------------------- | ------------------- | --------
|                                                                    | December 31,        |         
|                                                                    | 2000                | 2001    
|                                                                    | (in millions of R$) |         
|Salaries and benefits                                               | R$ 1,234            | R$ 1,716
|Administrative expenses                                             | 1,524               | 2,134   
|Amortization of goodwill and other intangibles                      | 62                  | 150     
|Insurance, private retirement plan and pension investment contracts | 750                 | 955     
|Other                                                               | 718                 | 932     
|                                                                    |                     |         
|Total                                                               | R$ 4,288            | R$ 5,887
|                                                                    |                     |         

Non-interest expense increased 37.3%
in 2001, primarily due to:

- a 40.0% increase in administrative expenses;
- a 39.1% increase in salaries and benefits;
- a 27.3% increase in insurance and private retirement plan
expenses;
- a 141.9% increase in amortization of goodwill and other
intangibles; and
- a 29.8% increase in other non-interest expenses.

Salaries and benefits. In
2001, salaries and benefits increased 39.1% compared to 2000, mainly due to:

- a provision for our 2001 collective bargaining agreement, which
increased salaries by 5.5%;
- the collective  bargaining  agreement in September 2000,  which
 increased  salaries by 7.5%               and impacted results in 2001;
- our ContAtiva organic growth project; and
- the consolidation of Banco Bandeirantes and Fininvest personnel.

Administrative expenses.
Administrative expenses increased 40.0% in 2001 compared to 2000, primarily due to:

- higher  processing  volumes due to our organic  growth and an
increase in postal,  telephone               and data processing rates;
- the consolidation of Banco Bandeirantes and Fininvest; and
- higher telemarketing and marketing expenses due to higher
volumes and increased rates charged by the companies, which provide our telemarketing and
marketing services.

Insurance, private retirement
plan, and pension investment contracts. The increase of 27.3% in insurance, private
retirement plan and pension investment contracts, to R$955 million in 2001 compared to
R$750 million in 2000, was a consequence of the 31.7% growth of the related income in
insurance premiums. As described above, we had an increase in our insurance portfolio due
to our organic growth and, to a lesser extent, the inclusion of the insurance portfolio of
Banco Bandeirantes due to the acquisition in December 2000.

Other non-interest expense.
The increase of 29.8% in other non-interest expenses in 2001 was mainly due to an increase
of 49.3% in service, revenue and other taxes primarily related to increase in taxes on
revenues COFINS and to a lesser extend PIS, which together increased 69.7% in 2001
compared to 2000. The increase in other non-interest expenses was also due to the increase
in our revenues as a result of our organic growth and the consolidation of Banco
Bandeirantes and Fininvest in December 2000. The increase in other non-interest expenses
was also affected by the growth of 55.9% in other expenses which are generally in the
nature of recurring expenses related to the increased size of our retail business,
including our credit card business. See  Macroeconomic Factors Affecting Our
Financial Condition and Results of Operations  Taxes for a discussion of
COFINS and PIS.

Income Tax

Income tax in Brazil is comprised of
federal income taxes and social contribution on earnings. We experienced an increase in
our effective tax rate to 4.0% in 2001 from 2.0% in 2000. We had a R$24 million increase
in our income tax for 2001 compared to 2000, principally due to:

- R$61 million increase due to our decision to pay less
tax-deductible interest on stockholders equity, rather than paying dividends for
2001, compared to 2000; and
- R$26 million increase due to a higher non-taxable income
capital gain in 2001.

These increases were partially offset
by the R$58 million decrease in income tax due to the increase in exempt foreign source
income from subsidiaries; R$45 million decrease in income tax due to the increase in
non-taxable exchange gain on our overseas investments due to the devaluation of the
real.

Our tax basis increased $165 million
to R$712 million from R$547 million. Simply applying the statutory tax rate of 34% to the
R$165 million increase in our tax basis for 2001 from 2000, we would have experienced an
increase of R$56 million in our income tax, rather than the R$24 million increase we
actually experienced.

The payment of tax-deductible
interest on equity is an option for profit distribution rather than non-tax-deductible
dividends.

For more information regarding income
tax expense, see Note 18 to our audited consolidated U.S. GAAP financial statements.

Asset and Liability
Management

Our general policy on asset and
liability management is to:

- avoid  material  mismatches  between  assets and  liabilities
 with  respect to  maturities,               currencies and interest rates; and
- maximize net interest income and return on assets and equity in
light of interest rate, liquidity and foreign exchange risks and our internal risk
management policies.

Subject to these constraints, from
time to time we take mismatched positions as to interest rates or maturities, or in
certain limited circumstances, foreign currencies, when we believe such positions are
justified in view of market conditions and prospects.

The Central Bank requires us to
monitor our asset and liability position under guidelines established by it. Our financial
committee holds monthly meetings to:

- set funding policies;
- make decisions regarding the maturity structure of our assets
and liabilities;
- establish  overnight  and  intra-day  limits  for our  maturity
 mismatches,  interest  rate               positions and foreign currency positions; and
- set exposure limits for our treasury based on the inherent
risks related to the position and gaps which correspond to the volatility of the market.

In setting the policies and making
the decisions described above, our financial committee takes into account not only our
exposure limits for each market segment and product, but also volatilities and risk
correlations across different markets. It also considers the liquidity of the market,
institutional needs, gain possibilities and other potential risks. The financial committee
holds extraordinary meetings as needed in response to unexpected macroeconomic changes.

We also have a risk committee that
meets every month with members of our board of directors, senior executives and risk
management professionals. The main objective of the risk committee is to review policies
related to treasury, brokerage, products and custody, and to set policy limits, including
those for the trading desk. The risk and financial committees consult one another on
proposals and agree on them prior to implementation.

In addition, our senior management
receives daily information on open or mismatched positions. At the beginning of each day,
our cash committee analyzes position risks and gain and loss potential.

Liquidity Risk
Management and Funding

Overview

Liquidity risk is defined as the risk
of loss arising from our inability to meet our near-term and projected long-term funding
commitments.

Our asset and liability management
policy seeks to ensure that sufficient liquidity is available to honor withdrawals of
deposits and make repayments at maturity of other liabilities, to extend loans or other
forms of credit to our customers and to meet our own working capital needs. The minimum
amount of liquidity is determined by the reserve requirements established by the Central
Bank. In addition, the Central Bank requires financial institutions to deposit certain
funds with the Central Bank and to purchase and to hold Brazilian treasury securities.
Compulsory deposits increased to an average balance of R$3,284 million in 2002 from
R$1,758 million in 2001, primarily due to the Central Banks increasing the reserve
requirement on deposits in 2001 and 2002 and due to our organic growth in deposits, which
reserve in Central Bank are required (i.e. demand deposits, time deposits and saving
accounts). The increase by Central Bank in compulsory deposits decreased our liquidity and
our ability to offer loans and invest in securities. We meet the Central Banks
requirements by maintaining a proper balance between maturity distribution and diversity
of sources of funds. See -Effects of Government Regulation on Our Financial
Condition and Results of Operations  Reserve and Compulsory Deposit
Requirements.

Our treasury department is
responsible for managing our funding and liquidity positions, as well as for the execution
of our investment objectives. The treasury department covers any shortfall by taking in
additional deposits and/or borrowing from the interbank market. It seeks to maximize the
efficient use of our deposit base by investing any surplus into liquid investments in the
interbank market. Our treasury department works with exposure limits established by the
financial committee.

As of December 31, 2002, our
interest-earning assets with maturities within one year were sufficient to cover our
interest-bearing liabilities due for settlement over the same period. See 
Interest Rate Sensitivity.

The following table shows our average
deposits and borrowings for 2000, 2001 and 2002, in each case together with the average
interest rates paid thereon.

|                                                                        | For the Years Ended December 31,
|----------------------------------------------------------------------- | --------------------------------
|                                                                        | 2000                            
|                                                                        | Average balance                 
|                                                                        | (in millions of R$)             
|Deposits from banks                                                     | R$ 219                          
|Savings deposits                                                        | 2,959                           
|Time deposits                                                           | 4,362                           
|Federal funds purchased and securities sold under repurchase agreements | 3,966                           
|Short-term borrowings                                                   | 4,516                           
|Long-term debt                                                          | 7,188                           
|Non-interest-bearing liabilities                                        | 6,149                           
|Total liabilities                                                       | R$29,359                        

Our three principal sources of
funding are: deposits; lines of credit with foreign and domestic banks, including
short-term borrowings and long-term debt.

Deposits

Our most important source of funding
is our deposits, which represented approximately 40.1% of our total liabilities as of
December 31, 2002. Our deposits consist primarily of real-denominated
interest-bearing time and savings deposits and real-denominated
non-interest-bearing checking accounts.

We have experienced a high level of
liquidity in recent years due to our relatively low leverage. We have used our excess
liquidity to invest in short-term money market instruments and intend to continue to do so
in the future, subject to regulatory requirements and investment considerations.

We also intend to continue to broaden
our customer deposit base and further decrease the size of average deposits by attracting
new customers, thereby decreasing reliance on any particular group of depositors. We
believe that decreasing the average size of these new customer accounts has allowed us to
reduce interest expense on these new customer deposits.

Lines of Credit

Trade finance credit lines from
correspondent banks represent an important source of funding for us. Most of these trade
finance credit lines are denominated in U.S. dollars. We have historically funded our
foreign currency trade loans from foreign currency lines with correspondent banks. Under
our existing credit lines, as of December31, 2002, we had drawn short-term (mainly up to
360 days) funds totaling approximately R$4,121 million, a 22.7% increase in reais
terms (or 19.4% decrease in US dollars terms) from short-term funds drawn as of December
31, 2001, due to the devaluation of the real.

Medium- and Long-term Debt

Our medium- and long-term debt
obligations as of December 31, 2002 are summarized as follows:

|                                               |           | Payments due by period
|---------------------------------------------- | --------- | ----------------------
|Debt Obligations                               |           | Less than one         
|(in millions)                                  | Total     | year                  
|Euronotes                                      | R$ 2,186  | R$ 1,390              
|Local onlending                                | 5,332     | 1,816                 
|Mortgage indebtedness                          | 633       | 631                   
|Notes issued under securitization arrangements | 1,413     | -                     
|Subordinated debt                              | 932       | 11                    
|Other long-term obligations                    | 432       | 222                   
|Total debt obligations                         | R$ 10,928 | R$ 4,070              

We also seek to obtain funding through
the issuance of medium- and long-term fixed and floating rate securities, including our
existing medium-term note program. This program permits the issuance of up to US$2 billion
(or its equivalent in other currencies). As of December 31, 2002, we had outstanding
approximately R$2,186 million in such securities. We used the proceeds of these issuances
for general corporate lending purposes, principally onlending to our Brazilian clients.
The following notes issued under the program are currently outstanding.

|Month of Issue | Interest Rate        | Notes due on   | Aggregate Principal Amount             
|-------------- | -------------------- | -------------- | ---------------------------------------
|               |                      |                |                                        
|September 1997 | Fixed rate step-down | October 2003   | ITL 175 billion, which is equivalent to
|               | EURO fungible notes  |                | approximately US$101 million           
|July 2001      | 7.25%                | August 2003    | US$150 million                         
|February 2002  | 6.00%                | February 2004  | US$100 million                         
|January 2003   | 6.875                | January 2004   | US$100 million                         
|January 2003   | 6.75%                | August 2003    | EUR50 million                          
|February 2003  | 6.00%                | November 2003  | US$100 million                         
|March 2003     | 5.00%                | September 2003 | US$125 million                         
|April 2003     | 5.00%                | April 2004     | US$100 million                         
|May 2003       | 5.625                | November 2004  | US$75 million                          
|May 2003       | 5.375                | May 2004       | EUR75 million                          

We also borrow funds from BNDES and
then onlend these funds to our customers to invest primarily in premises and equipments.
As of December 31, 2002 and 2001, we had R$5,332 million and R$4,436 million,
respectively, in real-denominated credit lines outstanding with BNDES.

In April 2002, we issued US$200
million in step-up subordinated callable notes that will be considered Tier 2 capital for
regulatory purposes. The notes have a ten-year term, pay interest semi-annually and mature
on April 30, 2012. We have the option to call the notes, in whole but not in part on any
interest payment date, beginning on April 30, 2007. The notes bear a coupon of 9.375% per
annum until April 30, 2007 and thereafter 11.79% per annum. The notes have the benefit of
a political risk protection contract for currency inconvertibility or non-transferability
of funds provided to the trustee, to provide payment of interest in the event of our
inability to convert reais into U.S. dollars outside Brazil or control funds
deposited with the trustee, due to certain actions by the Brazilian government. Payment
under the political risk protection contract is limited to an amount which corresponds to
18 months interest on the notes. Moodys classified the issues risk as
A3.

In December 2002, we also issued
R$222 million in subordinated time deposits. The subordinated time deposits have a
ten-year term, pay a 102% of Brazilian Interbank interest rate and mature on December
2012. We have the option to call the time deposit in December 2007.

In May 2002, we entered into a
securitization transaction involving certain of our US dollar denominated electronic
remittance payment orders (DPRs), pursuant to which we sold such DPRs to UBB
Diversified Payment Rights Finance Company (the SPC). Backed by the DPRs, the
SPC issued a series of notes in an aggregate principal amount of US$400 million
corresponding to R$1,413 million. The full payment of principal of and interest on the
issued series of notes is guaranteed by a financial guaranty policy. We are not
responsible for the existence of the flow of DPRs. Nevertheless, upon the occurrence of
certain events which have a material adverse effect on the existence of the future flows
of the DPRs, we are required to pay to the SPC the repurchase price of the DPRs, the
proceeds of which will be used by the SPC to redeem any outstanding notes and are liable
for amounts relating to such notes. The transaction received the rating AAA
from S&P and Fitch and Aaa from Moodys.

As of December 31, 2002 and 2001, we
had R$10,928 million and R$7,847 million, respectively, in long-term debt outstanding.
During the twelve months ended December 31, 2003, R$4,070 million in long-term debt will
mature. We intend to refinance this debt through a combination of sources, in accordance
with market conditions. See Note 16 to our audited consolidated U.S. GAAP financial
statements.

Financial guarantees

As part of our lending operations, we
enter into various off-balance sheet credit instruments with our customers which are
summarized as follows:

|                                                | Contractual amounts
|----------------------------------------------- | -------------------
|                                                | As of December 31, 
|                                                |                    
|                                                | 2001               
|Co-obligation for credit assignment             | R$216              
|Guarantees                                      | 4,002              
|Standby letters of credit and letters of credit | 79                 

The carrying value of financial
guarantees are recorded in Other liabilities and amount R$10 million,
including the provision for probable losses in the amount of R$3 million.

Standby letters of credit and
guarantees are our conditional commitments to guarantee the performance of a customer to a
third party in borrowing arrangements. Other letters of credit are issued to support
transactions on behalf of customers.

In the ordinary course of our
business, we enter into contracts that contain indemnification provisions. These
provisions require us to make payments to another party in the event that certain events
occur. Many of these provisions call for us to indemnify the other party against loss in
the event that we fail to perform our obligations under the contract. These performance
guarantees are not subject to disclosure. Other types of indemnification agreements that
function as financial guarantees are considered to have remote risk of loss experience and
maximum exposure to loss is not possible to estimate due to the low risk nature of these
agreements.

At December 31, 2001 and 2002 we have
contractual amounts of R$14,806 million and R$11,207 million, respectively, of unfounded
commitments to extend credit for a specified time period to lend to a customer who has
complied with predetermined contractual conditions. These contracts have maturity less
than one year and can be renewed.

The maximum potential credit risk of
these contracts is equal to the contractual amounts shown above if the counterparty does
not perform under the respective contract. Generally, these contracts expire without being
drawn upon; therefore, the contractual amounts are not indicative of the actual credit
exposure or future cash flow requirements for such commitments. To mitigate credit risk,
we may require the counterparty to pledge collateral in the form of cash, securities or
other assets to support the extension of credit similar to the collateral required for our
lending operations.

Changes in Cash Flows

The following table shows the
principal variations in our cash flows during each of the three years indicated.

|                                                     | For the Year Ended 
|---------------------------------------------------- | -------------------
|                                                     | December 31,       
|                                                     | 2000               
|                                                     | (in millions of R$)
|Net cash provided by (used in) operating activities  | R$ 1,729           
|Net cash used in investing activities                | (2,787)            
|Net cash provided by financing activities            | 6,598              
|Net (decrease) increase in cash and cash equivalents | R$ 5,540           

2002

During 2002, our operating activities
provided R$7,200 million net cash, as follows:

- R$1,972 million provided by our net income adjusted by net-cash
items; and
- R$4,461 million provided by a decrease intrading assets resulting
primarily from the reimposition by the Central Bank of reserve requirements on demand,
savings and time deposits in cash.

During 2002, net cash used in our
investing activities was R$10,695 million net cash, as follows:

- R$5,455 million used in purchase of securities held to
maturity, offset R$870 million provided by proceeds from matured of securities held to
maturity
- R$2,385  million  increase  in  deposits  in cash  with
 Central  Bank,  due to new  reserve               requirements imposed;
- R$2,467 million increase in loans, due to our organic growth.
- R$1,792 million used in purchases of available for sale securities, net
of proceeds from sale;

During 2002, our financing activities
provided R$15,096 million net, cash as follows:

- R$6,213 million increase in short-term federal funds purchased
and securities sold under repurchase agreements since we acted as a dealer of the Central
Bank on December 31, 2002.
- R$6,117 million increase in deposits, mainly time deposits
mainly, as a result of the migration from asset management funds by the introduction of
the new mark to market rule for investment funds introduced in 2002.
- R$3,103 million increase in new borrowings under long-term
arrangements net of repayments, due to R$1,413 million increase in notes issued under
securitization arrangements, R$932 million increase due to the two issuance of
subordinated debt, R$896 million increase in local onlending (funds borrowed from BNDES)
due to our organic growth.

2001

During 2001, our operating activities
used R$2,897 million net cash, as follows:

- R$2,152 million provided by our net income adjusted by non-cash
items; and
- R$4,967 million increase in trading assets mainly as a result
of the reimposition by the Central Bank of reserve requirements on time deposits in the
form of government securities.

During 2001, net cash used in our
investing activities was R$6,631 million, as follows:

- R$4,259 million increase in loans, due to our organic growth;
- R$1,704  million  increase in purchases of  securities
 available for sale net of respective               sales or maturities of securities; and
- R$498 million was used buying data processing equipment,
leasehold improvements and development costs (mainly for computer systems and other
technology upgrades, designed to improve our operating efficiency).

During 2001, our financing activities
provided R$3,392 million net cash, as follows:

- R$4,853 million increase in our deposits primarily due to our
organic growth; and
- R$651 million increase in new borrowings under long-term
arrangements net of repayments, due to a R$1,117 million increase in local onlending
(funds borrowed from BNDES) due to our organic growth and a R$455 million increase in
euronotes issued abroad, mainly due to the devaluation of the real in 2001. These
increases in local onlending and euronotes issuance were offset by a R$1,046 million
decrease in debentures due in part to R$152 million of the debentures reaching maturity
and our repurchase of R$894 million of the debentures as a result of the expectation of
the market that interest rates will increase due to the increase in interest rates in
Brazil in 2001. The interest rate on our debentures was reset periodically.

The cash generated was partly offset
by a R$2,163 million decrease in federal funds purchased and securities sold under
repurchase agreements.

2000

During 2000, our operating activities
provided R$1,729 million net cash. This stemmed primarily from a R$818 million decrease in
year-end trading assets from 1999, relating to cash flow adjustments due to the Banco
Bandeirantes acquisition in 2000.

During 2000, our investing activities
used R$2,787 million net cash, as follows:

- R$2,535 million increase in wholesale and retail loans;
- R$1,063  million  was  used  in  our  acquisitions  of  Banco
 Bandeirantes,  Fininvest  and Credibanco; and
- R$316 million was used buying premises and equipment, mainly
designed to increase the efficiency of our operations, the services offered to our
customers and our productivity.

These uses of net cash in investing
activities were partly offset by inflows of R$342 million upon the sale of interests in
unconsolidated companies, mainly Quatro/A Zip.net and Volkswagen Leasing S.A. 
Arrendamento Mercantil, and inflows of R$811 million in proceeds which we received from
maturities of our held-to-maturity securities portfolio, net of purchases.

During 2000, our financing activities
provided R$6,598 million net cash, as follows:

- R$5,510  million in net  increase  in federal  funds  purchased
 and  securities  sold under               repurchase agreements;
- R$1,101  million  in  proceeds  from a private  offering  of
common and  preferred  stock in December 2000;
- R$1,001 million increase in our deposits; and
- R$621 million increase in short-term debt.

These were partly offset by a R$1,354 million
repayment of long-term debt, net of new borrowings.

Capital

Under Central Bank rules, we are
required to comply with Brazilian capital adequacy regulations, which currently require
banks to have total capital equal to or greater than 11% of risk-adjusted assets, similar
to the requirement imposed by the Basle Accord. See Item 4.Information on the
Company  The Brazilian Banking Industry; Regulation and Supervision for a
detailed discussion of capital adequacy requirements.

We currently measure our capital
compliance on a consolidated basis, since we believe this represents the most accurate
view of our ability to withstand losses from our direct and indirect operations. The
following table shows our capital positions as a percentage of total risk-adjusted assets,
as well as our minimum capital requirements under Brazilian law, as of December 31, 2000,
2001 and 2002.

|                            | As of December 31,                     
|--------------------------- | ---------------------------------------
|                            | Consolidated                           
|                            | Partial (1)                            
|                            | 2000                                   
|                            | (in millions of R$, except percentages)
|Tier 1                      | 16.46%                                 
|Tier 2                      | -                                      
|                            |                                        
|Total capital               | 16.46%                                 
|                            |                                        
|Our regulatory capital      | R$ 5,557                               
|Minimum regulatory capital 
|Required                    | 3,714                                  
|                            |                                        
|Excess over minimum        
|regulatory capital required | R$ 1,843                               
|                            |                                        

_________________________________
(1) Partial consolidation excludes non-financial subsidiaries.
(2) Full consolidation includes both financial and non-financial subsidiaries.

The following table shows the impact
of different factors on our Basle capital adequacy ratio: we have to allocate capital to
cover foreign currency exposure. Since October2002, the Central Bank requires an
allocation of capital in the amount representing 100% of foreign currency exposure when
the exposure exceeds 5% of adjusted capital. This was an increase from an allocation of
50% from December 2001 when the Central Bank reduced the limit of capital exposure on
foreign currency to 30% from the previous level. In December 31, 2002 Unibancos
foreign currency exposure was less than 5% of the adjusted capital.

The current position therefore is
that from exposure of 0% to 5% of adjusted capital, there is no requirement to allocate
capital, between 5% and 30%, 100% of capital must be allocated and exposure above 30% is
not permitted and is subject to penalties imposed by the Central Bank.

We believe that these measures will
not have a significant effect on our results of operations because our capital levels
exceed the new increased requirements of the Central Bank. See 
Macroeconomic Factors Affecting Our Financial Condition and Results of Operations 
Effects of Government Regulation on Our Financial Condition and Results of Operations
 Capital Adequacy.

|Basle Capital Adequacy Ratio Impacts Year Ended December 31, 2002
|-----------------------------------------------------------------
|Basle capital adequacy ratio at December 31, 2001                
|Decrease in risk weighted assets                                 
|Increase in adjusted equity                                      
|Increase in foreign exchange risk                                
|Basle capital adequacy ratio at December 31, 2002                

Our regulatory capital increased from
R$5,557 million as of December 31, 2000 to R$6,203 million as of December31, 2001 and to
R$7,561 million as of December 31, 2002 on a partial consolidation basis and from R$6,521
million as of December 31, 2000 to R$7,106 million as of December 31, 2001 and R$8,175
million as of December30, 2002 on a full consolidation basis. These increases reflects
mainly the net income for 2001 after the payments of dividends in the amount of R$649
million and, in respect of the year ended December31, 2002, reflects mainly the net income
for the period net of dividends paid related to the year in the amount of R$670 million
and the issue of subordinated debt in the amount of R$932 million, which was offset by
R$260 million of net unrealized losses on securities and derivatives financial instruments
due to the change in the Brazilian Corporate Law in 2002.

During 2000, 2001 and 2002, we
maintained a significant position in short-term, highly liquid instruments, which in
general have a zero or low risk rating, thereby eliminating or significantly reducing the
need to maintain capital against these assets. This approach reflected the restrictive
credit environment that prevailed in Brazil during the last years. If we intend to
significantly increase our loan portfolio, we would be required to maintain capital based
on the risk rating of such loan assets which, depending on the capital position at that
time, could reduce our level of capital compliance from that indicated above.

Additionally, the Central Bank limits
the amount of investments in consolidated subsidiaries not engaged in banking, leasing or
securities activities and in unconsolidated companies, premises and equipment and
intangible assets to 70% of stockholders equity on a consolidated basis. The Central
Bank also limits unconsolidated investments, premises and equipment and intangible assets
to 70% of stockholders equity on a full-consolidated basis. On June 30, 2002 and
December 31, 2002 this limit was reduced to 60% and 50%, respectively. As of December 31,
2000 our total investment was temporarily greater than 70% of our equity by approximately
R$544 million, only on the partial consolidation basis as a result of our 2000
acquisitions. As of February 2001, we are again in compliance with all indices. At
December 31, 2001 and 2002 our total investment in such assets was less than the Central
Bank limit.

Interest Rate Sensitivity

Management of interest rate
sensitivity is a key component of our asset and liability policy. Interest rate
sensitivity is the relationship between market interest rates and net interest revenue due
to the maturity or repricing characteristics of interest-earning assets and
interest-bearing liabilities. For any given period, the pricing structure is matched when
an equal amount of these assets or liabilities matures or reprices in that period. Any
mismatch of interest-earning assets and interest-bearing liabilities is known as a gap
position. A negative gap denotes liability sensitivity and normally means that a decline
in interest rates would have a positive effect on net interest income. Conversely, a
positive gap denotes asset sensitivity and normally means that an increase in interest
rates would have a positive effect on net interest income. These relationships are as of
one particular date only, and significant swings can occur daily as a result of both
market forces and management decisions.

Our interest rate sensitivity
strategy takes into account:

- rates of return;
- the underlying degree of risk; and
- liquidity requirements, including minimum regulatory cash
reserves, mandatory liquidity ratios, withdrawal and maturity of deposits, capital costs
and additional demand for funds.

We monitor our maturity mismatches
and positions and manage them within established limits. Management reviews our positions
at least weekly and changes positions promptly as market outlooks change.

The following table shows the
repricing of our interest-earning assets and interest-bearing liabilities as of December
31, 2002. The information at that date may not reflect interest rate gap positions at
other times. In addition, variations in interest rate sensitivity may exist within the
repricing periods presented due to differing repricing dates within the period. Variations
may also arise among the different currencies in which interest rate positions are held.

|                                                                    | December 31, 2002                     
|------------------------------------------------------------------- | --------------------------------------
|                                                                    | Up to                                 
|                                                                    | 30 days                               
|                                                                    | (in million of R$, except percentages)
|Deposits in other banks                                             | R$   2,007                            
|Federal funds sold and securities purchased under resale agreements | 13,561                                
|Central bank compulsory deposits                                    | 1,208                                 
|Trading                                                             | 5,299                                 
|Securities available for sale                                       | 671                                   
|Securities held to maturity                                         | 141                                   
|Loans                                                               | 5,783                                 
|Other                                                               | 38                                    
|Total interest-earning asset                                        | R$ 28,708                             
|                                                                    |                                       

|                                                                        | December 31, 2002                     
|----------------------------------------------------------------------- | --------------------------------------
|                                                                        | Up to                                 
|                                                                        | 30 days                               
|                                                                        | (in million of R$, except percentages)
|Deposits from banks                                                     | R$     8                              
|Savings deposits                                                        | 5,890                                 
|Time deposits                                                           | 2,687                                 
|Federal funds purchased and securities sold under repurchase agreements | 13,806                                
|Short-term borrowings                                                   | 555                                   
|Long-term debt                                                          | 304                                   
|Total interest-bearing liabilities                                      | R$ 23,250                             
|Asset/liability gap                                                     | 5,458                                 
|Cumulative gap                                                          | 5,458                                 
|Ratio of cumulative gap to cumulative total interest-earning assets     | 9.1%                                  

Exchange Rate Sensitivity

Most of our operations are
denominated in reais. Our policy is to avoid material exchange rate mismatches.
However, we traditionally have outstanding at any given time medium- and long-term debt
denominated in foreign currencies, principally the U.S. dollar (R$4,531 million as of
December 31, 2002). As of December 31, 2002, our consolidated net foreign currency
exposure was R$1,985 million or 24.4% of our regulatory capital (in a full consolidation)
and do not represents the foreign currency exposure under Central Bank guidelines, since
Central Banks allows to the banks certain deductions such operations with maturity in the
following day business and allocation of foreign capital, which reduce our net exposure in
foreign currency to less then 5% at December 31, 2002, as explained above in the capital
section. Consolidated net foreign currency exposure is the difference between total
foreign currency-indexed or -denominated assets and total foreign currency-indexed or
-denominated liabilities, including off-balance sheet financial instruments.

Our foreign currency position arises
primarily through our purchases and sales of foreign exchange (primarily U.S. dollars)
from Brazilian exporters and importers, from other financial institutions on the interbank
market, or on the spot and forward currency markets. The Central Bank regulates our
maximum open, short and long foreign currency positions.

We enter into short-term derivative
contracts with various counterparties to manage our overall exposure, as well as to assist
customers in managing their exposures. These transactions involve a variety of
derivatives, including interest rate swaps, currency swaps, futures and options. See Note
28 to our audited consolidated U.S. GAAP financial statements.

Foreign currency assets are largerly
denominated in reais but are indexed to foreign currencies, principally the US
dollar, and all liabilities are denominated in foreign currencies, principally the US
dollar. The majority of our foreign derivative financial instruments are denominated in
reais but are indexed to a foreign currency, principally the US dollar.

As of December 31, 2002, the
composition of our assets, liabilities, stockholders equity and derivative financial
instruments by currency and term was as shown below. The information below may not reflect
the net exposure at other times and may not represent the future impact on our results,
since the operations with final maturity in the following business day are not subject to
changes in foreign currency because they are settle using an exchange rate of the previous
day. Furthermore, we can change our exposure due to changes in market conditions or
managements decision.

|                                                         | As of December 31, 2002                
|-------------------------------------------------------- | ---------------------------------------
|                                                         | R$                                     
|                                                         | (in millions of R$, except percentages)
|Assets                                                   |                                        
|Cash and due from banks                                  | R$ 698                                 
|Loans, securities and other assets                       | 47,440                                 
|Less than one year                                       | 38,986                                 
|From one to three years                                  | 4,055                                  
|More than three years                                    | 4,399                                  
|Premises and equipment, net                              | 1,507                                  
|Investments in unconsolidated companies                  | 548                                    
|Goodwill and other intangibles, net                      | 1,079                                  
|Other intangibles, net                                   | 270                                    
|Nonperforming loans                                      | 958                                    
|Allowance for loan losses                                | (1,047)                                
|Total                                                    | R$ 51,453                              
|Percentage of total assets                               | 71.5%                                  
|Liabilities and Stockholders Equity                    
|Non-interest bearing deposits                            | R$ 2,457                               
|Deposits, borrowings and other liabilities               | 48,083                                 
|Less than one year                                       | 34,877                                 
|From one to three years                                  | 11,397                                 
|More than three years                                    | 1,809                                  
|Stockholders equity                                     | 6,245                                  
|Total                                                    | R$ 56,785                              
|Percentage of total liabilities and stockholders equity | 78.9%                                  

|                                 | Net exposure
|-------------------------------- | ------------
|Derivative financial instruments
|Swap contracts                  
|Assets position, net             | R$  1,828   
|Liabilities position, net        | -           
|Swap contracts with daily reset 
|Assets position, net             | -           
|Liabilities position, net        | 18          
|Future contracts                
|Assets position, net             | 5,019       
|Liabilities position, net        | -           
|Option contracts                
|Purchases , net                  | 2           

Capital Expenditures

During the period 2000 to 2002, we
made significant capital expenditures to automate our branch network. In addition, as a
result of our reengineering program, we made significant capital expenditures for computer
systems, communications equipment and other technology designed to increase the efficiency
of our operations, the services offered to our customers and our productivity.

The following table shows our capital
expenditures in 2000, 2001 and 2002.

|                                                | For the Year Ended December 31,
|----------------------------------------------- | -------------------------------
|                                                | 2000(1)                        
|                                                | (In millions of R$)            
|Land and buildings                              | R$ 119                         
|Furniture and equipment                         | 82                             
|Leasehold improvements                          | 54                             
|Data processing                                 | 102                            
|Software developed or obtained for internal use | 101                            
|Other                                           | 29                             
|Total                                           | R$ 487                         

__________________________
(1) Includes R$172 million related to
our acquisitions in 2000.

We expect that capital expenditures
in 2003 will not be substantially greater than historical expenditure levels and will
consist mainly of investments to continue the upgrade of our communications and computer
systems, customer service and back office administrative systems, as well as
Internet-related investments.

We anticipate that, in accordance
with our practice during recent years, our capital expenditures in 2003 will be funded
from our internal resources. No assurance can be given, however, that the capital
expenditures will be made and, if made, that such expenditures will be made in the amounts
currently expected.

SELECTED STATISTICAL
INFORMATION

The following information is included
for analytical purposes and should be read in connection with our U.S. GAAP Financial
Statements.

Average Consolidated
Balance Sheet and Interest Rate Data

The table below presents the average
consolidated balances for our interest-earning assets and interest-bearing liabilities,
the related interest income and expense amounts and the average yields and rates for each
period. The average balances were calculated from the month-end principal balances
together with the related accrued interest balances. See Note 2(b) to our U.S. GAAP
financial statements.

We have broken down certain
liabilities into domestic and international currencies. The domestic balances represent
liabilities denominated in reais while the international balances represent
liabilities denominated in currencies other than reais, primarily the U.S. dollar.
Asset balances were not broken out into domestic and international currencies, as
substantially all of our assets are denominated in reais.

All nonperforming loans are also nonaccrual loans and they have been excluded from Loans in the average
balance and included as non-interest-earning assets.

The accrual of interest on typical  Brazilian financial assets and liabilities
includes  nominal  interest rates and a monetary  correction
component.  Such monetary  correction may be related to an inflation index,  changes in foreign exchange rates (usually U.S. Dollar) or
other  floating  interest  rate.  The interest  rate and monetary  correction  are applied at the end of each month to the
principal balance of each  operation.  The  updated  value  becomes  the new basis for the  accrual of the next month's  interest  and  monetary
correction, and so forth, until settled. As a result, it is not practical  (and it would not reflect the actual return on our  investments)  to segregate  only
the interest rate component for purposes of showing our average  consolidated  balance sheet and interest rate data. On the other hand,
for prospective  financial  information we only  considered the interest rate  component,  as we cannot predict the effects of monetary
correction up to the maturity date.

Brazilian  tax law does not  currently  provide  income tax  exemptions  for  interest  earned on any
investment  securities.  Therefore,  interest  income  has not been  presented  on a  tax-equivalent  basis.
Additionally,  fees received for loans are included in interest  income on loans.  We do not consider  these
amounts to be significant.

|                                                                        | As of December 31,                     
|----------------------------------------------------------------------- | ---------------------------------------
|                                                                        |                                        
|                                                                        | 2000                                   
|                                                                        |                                        
|                                                                        | Average balance                        
|                                                                        |                                        
|                                                                        | (in millions of R$, except percentages)
|Interest-earning assets:                                                |                                        
|Interest-bearing deposits in other banks                                | R$965                                  
|Federal funds sold and securities purchased under resale agreements     | 3,971                                  
|Central Bank compulsory deposits                                        | 446                                    
|Trading assets                                                          | 5,735                                  
|Securities available for sale (1)                                       | 1,114                                  
|Securities held to maturity                                             | 1,003                                  
|Loans                                                                   | 15,029                                 
|Other interest-earning assets                                           | 31                                     
|                                                                        |                                        
|Total interest-earning assets                                           | 28,294                                 
|                                                                        |                                        
|Non-interest-earning assets:                                            |                                        
|Cash and due from banks                                                 | 395                                    
|Central Bank compulsory deposits                                        | 524                                    
|Nonperforming loans                                                     | 688                                    
|Allowance for loan losses                                               | (969)                                  
|Investments in unconsolidated companies                                 | 453                                    
|Premises and equipment                                                  | 1,355                                  
|Goodwill and other intangibles                                          | 197                                    
|Other assets                                                            | 2,843                                  
|                                                                        |                                        
|Total non-interest-earning assets                                       | 5,486                                  
|                                                                        |                                        
|Total assets                                                            | R$33,780                               
|                                                                        |                                        
|Interest-bearing liabilities:                                           |                                        
|Time deposits:                                                          |                                        
|Domestic                                                                | R$4,053                                
|International                                                           | 309                                    
|                                                                        |                                        
|Total                                                                   | 4,362                                  
|                                                                        |                                        
|Savings deposits:                                                      
|Domestic                                                                | 2,845                                  
|International                                                           | 114                                    
|                                                                        |                                        
|Total                                                                   | 2,959                                  
|                                                                        |                                        
|Deposits from banks:                                                   
|Domestic                                                                | 87                                     
|International                                                           | 132                                    
|                                                                        |                                        
|Total                                                                   | 219                                    
|                                                                        |                                        
|Federal funds purchased and securities sold under repurchase agreements | 3,966                                  
|                                                                        |                                        
|Short-term borrowings:                                                 
|Domestic                                                                | 22                                     
|International                                                           | 4,494                                  
|                                                                        |                                        
|Total                                                                   | 4,516                                  
|                                                                        |                                        
|Long-term debt:                                                        
|Domestic                                                                | 4,852                                  
|International                                                           | 2,336                                  
|                                                                        |                                        
|Total                                                                   | 7,188                                  
|                                                                        |                                        
|Total interest-bearing liabilites                                       | 23,210                                 
|                                                                        |                                        
|Non-interest-bearing liabilities:                                       |                                        
|Demand deposits:                                                       
|Domestic                                                                | 1,361                                  
|International                                                           | 60                                     
|                                                                        |                                        
|Total                                                                   | 1,421                                  
|                                                                        |                                        
|Other non-interest-bearing liabilities                                  | 4,728                                  
|                                                                        |                                        
|Total non-interest bearing liabilities                                  | 6,149                                  
|                                                                        |                                        
|Total liabilities                                                       | 29,359                                 
|                                                                        |                                        
|Stockholders equity                                                    | 4,421                                  
|                                                                        |                                        
|Total liabilities and stockholders equity                              | R$33,780                               
|                                                                        |                                        

|________ | ____________                                                                                   
|-------- | -----------------------------------------------------------------------------------------------
|(1)      | Securities classified as available for sale do not include the effect of
changes in fair value.

Changes in Interest
Income and Expenses  Volume and Rate Analysis

The following table shows the
allocation of the changes in our interest income and expense between average volume and
changes in the average yields/rates for 2001 compared to 2000 and to 2002. Volume and rate
variances have been calculated based on movements of average balances over the period and
changes in average interest yield/rates on interest-earning assets and interest-bearing
liabilities. The net change attributable to changes in both volume and rate has been
allocated to the change due to volume and the change due to rate on a proportional basis.

|                                                                        | 2001/2000                              | 2002/2001                             
|----------------------------------------------------------------------- | -------------------------------------- | --------------------------------------
|                                                                        |                                        |                                       
|                                                                        | Increase/(decrease) due to changes in: | Increase/(decrease) due to changes in:
|                                                                        |                                        |                                       
|                                                                        | Volume                                 | Yield/rate                            
|                                                                        |                                        |                                       
|                                                                        |                                        |                                       
|Interest-earning assets:                                                |                                        |                                       
|Interest-bearing deposits in other banks                                | R$89                                   | R$(6)                                 
|                                                                       
|                                                                       
|Federal funds sold and securities purchased under resale agreements     | (11)                                   | 65                                    
|Central Bank compulsory deposits                                        | 19                                     | 20                                    
|Trading assets                                                          | 838                                    | (63)                                  
|Securities available for sale                                           | 167                                    | -                                     
|Securities held to maturity                                             | (20)                                   | (7)                                   
|Loans                                                                   | 1,972                                  | 833                                   
|Other interest-earning assets                                           | 1                                      | 3                                     
|                                                                        |                                        |                                       
|Total interest-earning assets                                           | R$3,095                                | R$805                                 
|                                                                        |                                        |                                       
|Interest-bearing liabilities:                                          
|Time deposits:                                                          |                                        |                                       
|Domestic                                                                | R$634                                  | R$2                                   
|International                                                           | 1                                      | 11                                    
|                                                                        |                                        |                                       
|Total                                                                   | 635                                    | 13                                    
|                                                                        |                                        |                                       
|Savings deposits:                                                      
|Domestic                                                                | 112                                    | (7)                                   
|International                                                           | 1                                      | (1)                                   
|                                                                        |                                        |                                       
|Total                                                                   | 113                                    | (8)                                   
|                                                                        |                                        |                                       
|Deposits from banks:                                                   
|Domestic                                                                | 19                                     | 16                                    
|International                                                           | 6                                      | (6)                                   
|                                                                        |                                        |                                       
|Total                                                                   | 28                                     | 7                                     
|                                                                        |                                        |                                       
|Federal funds purchased and securities sold under repurchase agreements | 561                                    | 135                                   
|Short-term borrowings:                                                 
|Domestic                                                                | 6                                      | 2                                     
|International                                                           | 345                                    | 206                                   
|                                                                        |                                        |                                       
|Total                                                                   | 351                                    | 208                                   
|                                                                        |                                        |                                       
|Long-term debt:                                                        
|Domestic                                                                | 3                                      | (77)                                  
|International                                                           | 194                                    | 272                                   
|                                                                        |                                        |                                       
|Total.                                                                  | 205                                    | 187                                   
|                                                                        |                                        |                                       
|Total interest-bearing liabilities                                      | R$1,927                                | R$508                                 
|                                                                        |                                        |                                       

Net Interest Margin and
Spread

The following table shows our average
interest-earning assets, average interest-bearing liabilities, net interest income and the
comparative net interest margin and net interest spread for 2000, 2001 and 2002.

|                                                     | For the Year Ended December 31,        
|---------------------------------------------------- | ---------------------------------------
|                                                     |                                        
|                                                     | 2000                                   
|                                                     |                                        
|                                                     | (in millions of R$, except percentages)
|Total average interest-earning assets                | R$28,294                               
|Total average interest-bearing liabilities           | 23,210                                 
|Net interest income (1)                              | R$2,708                                
|Average yield on average interest-earning assets     | 20.5%                                  
|Average rate on average interest-bearing liabilities | 13.4                                   
|Net interest spread (2)                              | 7.1                                    
|Net interest margin (3)                              | 9.6%                                   

|________ | ____________                                                                                                                         
|-------- | -------------------------------------------------------------------------------------------------------------------------------------
|(1)      | Defined as total interest income less total interest expense.                                                                        
|(2)      | Defined as the differences between the average yield on interest-earning assets and the average rate on interest-bearing liabilities.
|(3)      | Defined as net interest income divided by average interest-earning assets.                                                           

Returns on Equity and Assets

The following table shows certain of our financial data for the periods indicated:

|                                                                     | For the Year Ended December 31,        
|-------------------------------------------------------------------- | ---------------------------------------
|                                                                     |                                        
|                                                                     | 2000                                   
|                                                                     |                                        
|                                                                     | (in millions of R$, except percentages)
|Net income                                                           | R$628                                  
|Average total assets                                                 | 33,780                                 
|Average stockholders' equity                                         | R$4,421                                
|Net income as a percentage of average total assets                   | 1.9%                                   
|Net income as a percentage of average stockholders' equity           | 14.2                                   
|Dividends payout ratio common and preferred (1)                      | 45.8                                   
|Average stockholders' equity as a percentage of average total assets | 13.1%                                  

|________ | ____________                                                           
|-------- | -----------------------------------------------------------------------
|(1)      | Defined as dividends declared per share divided by net income per share

Securities Portfolio

General

The  following  table  shows our  portfolio  of trading  assets,  securities  available  for sale and
securities  held to maturity as of December 31, 2000,  2001 and 2002. The amounts exclude our investments in
unconsolidated  companies  (see  Note  11 to  our  U.S.  GAAP  financial  statements).  Trading  assets  and
securities  available  for sale are  stated at fair  value and  securities  held to  maturity  are stated at
amortized cost. See Notes 2 (d), 2 (e), 2 (f), 6, 7,  8 and 28 to our U.S. GAAP Financial Statements.

|                                                            | As of December 31,                     
|----------------------------------------------------------- | ---------------------------------------
|                                                            |                                        
|                                                            | 2000                                   
|                                                            |                                        
|                                                            | (in millions of R$, except percentages)
|Trading assets:                                             |                                        
|Federal government securities (1)                           | R$4,766                                
|Securities of foreign governments                           | 7                                      
|Corporate debt securities                                   | 43                                     
|Bank debt securities                                        | 16                                     
|Mutual funds (2)                                            | 1,702                                  
|Derivative financial instruments                            | 405                                    
|                                                            |                                        
|Total                                                       | R$6,939                                
|                                                            |                                        
|Trading assets as a percentage of total assets              | 14.3%                                  
|Securities available for sale:                             
|Federal government securities                               | R$ -                                   
|Brazilian sovereign bonds (3)                               | 49                                     
|Corporate debt securities                                   | 1,129                                  
|Bank debt securities                                        | 112                                    
|Stocks                                                      | 72                                     
|Mutual funds                                                | -                                      
|                                                            |                                        
|Total                                                       | R$1,362                                
|                                                            |                                        
|Securities available for sale as a                         
|percentage of total assets                                  | 2.8%                                   
|Securities held to maturity:                               
|Federal government securities                               | R$ -                                   
|Brazilian sovereign bonds (3)                               | 111                                    
|Securities of foreign governments                           | -                                      
|Corporate debt securities                                   | 566                                    
|Bank debt securities                                        | 182                                    
|                                                            |                                        
|Total                                                       | R$859                                  
|                                                            |                                        
|Securities held to maturity as a percentage of total assets | 1.8%                                   

|________ | ____________                                                                                                                                                                                                                                                                             
|-------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1)      | Consists of domestic securities issued by the
Central Bank and the Brazilian Treasury, except for R$2 million, R$10 million and R$50 million, represented by Brady Bonds and Global Bonds issued by
the Brazilian government abroad as of December 31, 2000, 2001 and 2002, respectively.
|(2)      | The portfolios of mutual funds held by our insurance,
capitalization and private retirement companies are represented mainly by federal government securities.                                                                                                                           
|(3)      | Consists primarily of Brady Bonds and Global Bonds issued by Brazilian government abroad.                                                                                                                                                                                                

In 2002,  we decided to change  the  classification  of  federal  government  securities,  previously
classified as trading assets,  to securities  available for sale and to securities held to maturity,  in the
amount of R$1,156  million  and  R$1,178  million,  respectively.

We also  decided to buy  certain  federal
government  securities as securities  held to maturity using as parameters to define the financial  ability,
the  maturities,  interest rates (positive  spread) and currency of our liability  operations.

Maturity Distribution

The following table shows the maturity distribution and average yields as of December 31, 2002 for our
trading assets, securities available for sale and securities held to maturity. Brazilian tax law does not
currently provide income tax exemptions for interest earned on any investment securities. Therefore
interest income has not been presented on a tax-equivalent - basis.

|                                   | As of December 31,2002                 
|---------------------------------- | ---------------------------------------
|                                   |                                        
|                                   | Due in 1 year or less                  
|                                   |                                        
|                                   |                                        
|                                   | R$                                     
|                                   |                                        
|                                   | (in millions of R$, except percentages)
|Trading assets:                    |                                        
|Federal government securities      | R$2,527                                
|Securities of foreign governments. | 31                                     
|Corporate debt securities          | 23                                     
|Bank debt securities               | 28                                     
|Mutual funds (1)                   | 2,282                                  
|Derivative financial instruments   | 408                                    
|                                   |                                        
|Total (3)                          | R$5,299                                
|                                   |                                        
|Securities available for sale: (2)
|Federal government securities      | R$1,010                                
|Brazilian sovereign bonds          | 30                                     
|Corporate debt securities          | 650                                    
|Bank debt securities               | 74                                     
|Stocks (1)                         | 252                                    
|Mutual funds                       | 181                                    
|                                   |                                        
|Total (3)                          | R$2,197                                
|                                   |                                        
|Securities held to maturity:      
|Federal government securities      | R$1,531                                
|Brazilian sovereign bonds          | 66                                     
|Securities of foreign governments. | -                                      
|Corporate debt securities          | 125                                    
|                                   |                                        
|Total (3)                          | R$1,722                                
|                                   |                                        

|________ | ____________                                                                                                                                                                                                                               
|-------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1)      | Average yields are not shown as such yields are not meaningful. These securities have been
excluded from the calculation of the total yield.                                                                                               
|(2)      | Historical cost balances have been used to compute yield. The gross fair value adjustments in the amount
of R$345 million (loss) are reflected as a component of stockholders equity and was not included in the calculation of the yield.
|(3)      | These yields do not include the monetary correction component of our securities.                                                                                                                                                           

The following table presents our
securities portfolio by currency as of December 31, 2000, 2001 and 2002.

|                                    | At fair value       | At amortized cost             |                            
|----------------------------------- | ------------------- | ----------------------------- | ---------------------------
|                                    |                     |                               |                            
|                                    | Trading assets      | Securities available for sale | Securities held to maturity
|                                    |                     |                               |                            
|                                    | (in millions of R$)
|As of December 31, 2000             |                     |                               |                            
|Brazilian currency (reais)          | R$4,740             | R$1,109                       | R$ -                       
|Indexed by foreign currency (1)     | 2,033               | -                             | -                          
|Denominated in foreign currency (1) | 166                 | 253                           | 859                        
|                                   
|As of December 31, 2001            
|Brazilian currency (reais)          | R$5,977             | R$2,583                       | R$ -                       
|Indexed by foreign currency (1)     | 5,734               | -                             | -                          
|Denominated in foreign currency (1) | 92                  | 549                           | 661                        
|                                   
|As of December 31, 2002            
|Brazilian currency (reais)          | R$3,246             | R$3,877                       | R$19                       
|Indexed by foreign currency (1)     | 1,914               | 972                           | 5,893                      
|Denominated in foreign currency (1) | 139                 | 1,347                         | 710                        

|________ | ____________             
|-------- | -------------------------
|(1)      | Predominantly U.S. dollar

Central Bank Compulsory Deposits

We are required to maintain  certain  deposits with the Central Bank. The following shows the amounts
of these deposits at December 31, 2000, 2001 and 2002.

|                     | As of December 31,                     
|-------------------- | ---------------------------------------
|                     |                                        
|                     | 2000                                   
|                     |                                        
|                     | R$                                     
|                     |                                        
|                     | (in millions of R$, except percentages)
|Type of deposit:     |                                        
|Non-interest-earning | R$840                                  
|Interest-earning     | 580                                    
|                     |                                        
|Total                | R$1,420                                
|                     |                                        

At December 31, 2001 and 2002 we had also R$1,214 million and R$3,720 million, respectively, of federal
funding government securities, linked to the Central Bank in the form of compulsory deposits, recorded as
trading assets, securities available for sale and securities held to maturity.

Loans

The  following  table  shows our loan  portfolio  by category of the  borrowers  principal  business
sector by gross loans outstanding.  Substantially all of our loans are to borrowers  domiciled in Brazil and
are  denominated in reais.  Additionally,  approximately  half of our loan portfolio is indexed to Brazilian
base interest rates or in to  U.S. dollar.

|                                                       | As of December 31,  
|------------------------------------------------------ | --------------------
|                                                       |                     
|                                                       | 1998                
|                                                       |                     
|                                                       | (in millions of R$ )
|Type of loan:                                          |                     
|Commercial:                                           
|Industrial and other                                   | R$5,311             
|Import financing                                       | 1,294               
|Export financing                                       | 1,615               
|Real estate loans, primarily residential housing loans | 326                 
|Direct lease financing                                 | 922                 
|Individuals:                                          
|Overdraft                                              | 643                 
|Financing                                              | 1,429               
|Credit card                                            | 561                 
|Agricultural                                           | 539                 
|Nonperforming loans                                    | 244                 
|Allowance for loan losses                              | (671)               
|                                                       |                     
|Loans, net                                             | R$12,213            
|                                                       |                     

The loans categories shown above are
as follows:

Commercial  Commercial
loans include loans to corporate customers, including small businesses, as well as the
financing of imports for corporate customers. Additionally, we make advances to corporate
exporters under trade exchange contracts. Generally, these loans have short-to medium-term
maturities.

Real estate  Real estate
loans comprise primarily mortgage loans to individuals for residences, which generally
have long-term maturities, as well as mortgage loans to construction companies, which
generally have medium-term maturities.

Direct lease financing 
Direct lease contracts consist primarily of leases of equipment and automobiles to both
corporate and individual borrowers.

Individuals - Loans to individuals include lines of credit to individuals as a result of overdrafts on their
related deposit accounts under pre-approved credit limits. Additionally, we finance personal loans for various
needs and credit card for individuals.

Agricultural 
Agricultural loans represent loans to borrowers who operate in the agricultural business,
including farming, produce, livestock and forestry.

Nonperforming Loans

The following table shows  our nonperforming loans, together with certain asset quality ratios for the
years 1998 through 2002. We consider all loans 60 days or more overdue as nonperforming and subject to
review for impairment. Small-balance homogenous loans, such as overdrafts, credit card receivables,
residential housing loans and consumer installment loans, are aggregated for purposes of evaluating
impairment. Larger-balance loans are assessed based on the risk characteristics of each individual
borrower. We do not have any material restructured loans. Charge-off normally occurs if no payment is
received within 360 days.

Our subsidiary  Fininvest,  the results of which are consolidated as from December 2000, has the same
provisioning  policy as us but  adopts a shorter  period  for  charge-offs  (typically  between  180 and 210
days).  Fininvest  operates  in the lower  income  consumer  credit  market and has a high rate of  defaults
compensated  by the higher  interest  rates it  charges  to its  customers.  The same  charge-off  policy is
adopted with respect to our credit card activities.

|                                                                                                               | As of or for the Year Ended December 31,
|-------------------------------------------------------------------------------------------------------------- | ----------------------------------------
|                                                                                                               |                                         
|                                                                                                               | 1998                                    
|                                                                                                               |                                         
|                                                                                                               | (in millions of R$, except percentages) 
|Nonperforming loans                                                                                            | R$244                                   
|Foreclosed assets, net of reserves                                                                             | 158                                     
|                                                                                                               |                                         
|Total nonperforming loans and foreclosed assets                                                                | R$402                                   
|                                                                                                               |                                         
|Allowance for loan losses                                                                                      | 671                                     
|Total loans                                                                                                    | R$12,884                                
|Nonperforming loans as a percentage of total loans                                                             | 1.9 %                                   
|Nonperforming loans and foreclosed assets as a percentage of total loans                                       | 3.1                                     
|Allowance for loan losses as a percentage of total loans                                                       | 5.2                                     
|Allowance for loan losses as a percentage of nonperforming loans                                               | 275                                     
|Allowance for loan losses as a percentage of nonperforming loans and foreclosed assets                         | 167                                     
|Net charge-offs during the period as a percentage of average loans outstanding (including
nonperforming loans) | 3.7 %                                   

Credit Approval Process

For a discussion  of our  approval  process for retail and  wholesale  loans,  including  credit card
loans, see Item 4 - Information on the Company - Principal  Business  Activities - Risk Management - Credit
Overview.

Risks of the Loan Portfolio by Category

Credit Risk - Lending

For a  discussion  of credit  risk - lending,  see Item 4 -  Information  on the Company - Principal
Business Activities - Risk Management - Credit Overview.

Indexation

Substantially all of our loan portfolio is denominated in reais.
  However,  a part of the
portfolio is indexed to or denominated in foreign currencies,  primarily the U.S. dollar,  which at December
31, 2000, 2001 and 2002  represented,  29.0%,  27.2% and 27.7%,  respectively,  of our total loan portfolio.
Our main loan  transactions  denominated in or indexed to the U.S.  dollar consist of onlending of eurobonds
and export and import financing.

Maturity     and     Interest     Rate
Sensitivity of Loans

The   following    tables   show   the
maturity  distribution  of our loan portfolio
by  category  as  well as the  interest  rate
sensitivity   of  the   loan   portfolio   by
maturity distribution.

|                       | As of December 31,2002
|---------------------- | ----------------------
|                       |                       
|                       | Due in 1 month or less
|                       |                       
|                       | (in millions of R$)   
|Type of loan:          |                       
|Commercial:           
|Industrial and other   | R$2,702               
|Import financing       | 172                   
|Export financing       | 322                   
|Real estate loans      | 16                    
|Direct lease financing | 38                    
|Individuals:          
|Overdraft              | 856                   
|Financing              | 715                   
|Credit card            | 1,003                 
|Agricultural           | 35                    
|                       |                       
|Total                  | R$5,859               
|                       |                       

Credit card loans require minimum  payment,  which ranges from 15% to 20% and the remaining  balances
may be rolled-over at the customer's discretion.

|                                            | As of December 31, 2002
|------------------------------------------- | -----------------------
|                                            |                        
|                                            | Due in 1 month or less 
|                                            |                        
|                                            | (in millions of R$)    
|Loans to customers by maturity, subject to:
|Variable rates                              | R$1,381                
|Fixed rates                                 | 4,478                  
|                                            |                        
|Total                                       | R$5,859                
|                                            |                        

Foreign Country Loans
Outstanding

Cross-border outstanding loans in each foreign country account for less than 1% of total assets and are
not significant. Therefore, we do not believe such information is material to an understanding of the
risks associated with our loan portfolio. Additionally, our deposit base is primarily comprised of
Brazilian-based customers and the amount of deposits outside of Brazil is not considered significant (less
than 10% of total deposits).

Loans by Economic Activity

The following table shows our loans
by borrowers economic activity as of December 31, 2000, 2001 and 2002. The table
does not include nonperforming loans and contingent loans.

|                                              | As of December 31,                     
|--------------------------------------------- | ---------------------------------------
|                                              |                                        
|                                              | 2000                                   
|                                              |                                        
|                                              | Loan portfolio                         
|                                              |                                        
|                                              | (in millions of R$, except percentages)
|Manufacturing:                                |                                        
|Food, beverages and tobacco                   | R$836                                  
|Basic metal industries                        | 561                                    
|Electricity, gas and water                    | 617                                    
|Chemical and pharmaceutical                   | 781                                    
|Paper, pulp, paper and wood products          | 710                                    
|Automobile industry                           | 885                                    
|Extractive                                    | 205                                    
|Production of metal goods                     | 317                                    
|Petroleum                                     | 436                                    
|Textiles, clothing and leather goods          | 359                                    
|Electronic and communication equipment        | 277                                    
|Electric and electronic                       | 263                                    
|Production of machines and equipment          | 306                                    
|Rubber and plastic                            | 117                                    
|Other manufacturing industries                | 13                                     
|                                              |                                        
|Subtotal                                      | 6,683                                  
|                                              |                                        
|Retailers                                    
|Retail                                        | 1,420                                  
|Wholesale                                     | 764                                    
|Lodging and catering services                 | 90                                     
|                                              |                                        
|Subtotal                                      | 2,274                                  
|                                              |                                        
|Financial service                            
|Financial companies                           | 319                                    
|Insurance companies and private pension funds | 110                                    
|                                              |                                        
|Subtotal                                      | 429                                    
|                                              |                                        
|Residential construction loans                | 89                                     
|                                              |                                        
|Other services:                              
|Post office and telecommunications            | 734                                    
|Transportation                                | 563                                    
|Real estate services                          | 446                                    
|Construction                                  | 257                                    
|Cultural and sportive leisure activities      | 41                                     
|Health and social services                    | 140                                    
|Education                                     | 85                                     
|Associative activities                        | 241                                    
|Other                                         | 1,552                                  
|                                              |                                        
|Subtotal                                      | 4,059                                  
|                                              |                                        
|Agriculture, livestock, forestry and fishing  | 726                                    
|Individuals:                                 
|Consumer loans                                | 4,394                                  
|Residential mortgage loans                    | 377                                    
|Lease financing                               | 416                                    
|                                              |                                        
|Subtotal                                      | 5,187                                  
|                                              |                                        
|Total                                         | R$19,447                               
|                                              |                                        

Classification of Loan
Portfolio

The following  table shows the current  classification  of our loan portfolio by risk category,  with
AA  represents  minimum  credit risk and H represents  extremely  high credit risk. At December 31, 2001 and
2002,  approximately  91.8% and 91.1% of our loan  portfolio is classified in the  categories AA to C which
representing loans on full accrual status.

|As of December 31, 2001
|-----------------------
|                       
|Loans                  
|                       
|Risk level             
|                       
|(In millions of R$)    
|AA                     
|A                      
|B                      
|C                      
|D                      
|E                      
|F                      
|G                      
|H                      
|                       
|Total                  
|                       

|As of December 31, 2002
|-----------------------
|                       
|Loans                  
|                       
|Risk level             
|                       
|(In millions of R$)    
|AA                     
|A                      
|B                      
|C                      
|D                      
|E                      
|F                      
|G                      
|H                      
|                       
|Total                  
|                       

Allowance for Loan Losses

The following table shows activity in
the allowance for loan losses for 1998, 1999, 2000, 2001 and 2002.

|                                                                                                                        | As of or for the Year Ended December 31,
|----------------------------------------------------------------------------------------------------------------------- | ----------------------------------------
|                                                                                                                        |                                         
|                                                                                                                        | 1998                                    
|                                                                                                                        |                                         
|                                                                                                                        | (in millions of R$, except percentages) 
|Balance at beginning of period                                                                                          | R$ 656                                  
|Charge-offs:                                                                                                           
|Commercial:                                                                                                            
|Industrial and other                                                                                                    | (286)                                   
|Export financing                                                                                                        | (9)                                     
|Real estate loans                                                                                                       | (44)                                    
|Direct lease financing                                                                                                  | (10)                                    
|Individuals:                                                                                                           
|Overdraft                                                                                                               | (123)                                   
|Financing                                                                                                               | (175)                                   
|Credit card                                                                                                             | (205)                                   
|Agricultural                                                                                                            | (11)                                    
|                                                                                                                        |                                         
|Total charge-offs                                                                                                       | R$(863)                                 
|                                                                                                                        |                                         
|Recoveries:                                                                                                            
|Commercial:                                                                                                            
|Industrial and other                                                                                                    | R$177                                   
|Export financing                                                                                                        | -                                       
|Real estate                                                                                                             | 30                                      
|Direct lease financing                                                                                                  | 2                                       
|Individuals:                                                                                                           
|Overdraft                                                                                                               | 35                                      
|Financing                                                                                                               | 104                                     
|Credit card                                                                                                             | 62                                      
|Agricultural                                                                                                            | 9                                       
|                                                                                                                        |                                         
|Total recoveries                                                                                                        | R$419                                   
|                                                                                                                        |                                         
|Net charge-offs                                                                                                         | R$(444)                                 
|Provision for loan losses                                                                                               | 459                                     
|                                                                                                                        |                                         
|Balance at the end of period                                                                                            | R$ 671                                  
|                                                                                                                        |                                         
|Ratio of net charge-offs during the period to average
loans outstanding including nonperforming loans during the period | 3.7 %                                   

Based on information available
regarding our debtors, we believe that our aggregate allowance for loan losses is
sufficient to cover probable losses in our loan portfolio.

The  following  table shows our  provision  for loan losses,  loan  charge-offs  and loan  recoveries
included in result of operations for 2000, 2001 and 2002:

|                          | For the Year Ended December 31,         | % Change
|------------------------- | --------------------------------------- | --------
|                          |                                         |         
|                          | 2000                                    | 2001    
|                          |                                         |         
|                          | (in millions of R$, except percentages)
|Provision for loan losses | R$ 676                                  | R$1,100 
|Loan charge-offs          | (732)                                   | (1,298) 
|Loan recoveries           | 305                                     | 469     
|                          |                                         |         
|Net charge-offs           | R$ (427)                                | R$ (829)
|                          |                                         |         
|Provision to loans (1)    | 4.3 %                                   | 4.8 %   

|________ | ____________                                                                        
|-------- | ------------------------------------------------------------------------------------
|(1)      | Provision expressed as a percentage of average loans, including nonperforming loans.

For information regarding the
allowance for loan losses, provision for loan losses, loan charge-offs, loan recoveries
and nonperforming loans, see Item 5  Operating and Financial Review and
Prospects  Operating Results  Results of Operations for Year Ended December
31, 2002 Compared to Year Ended December 31, 2001 and  Results of Operations for
Year Ended December 31, 2001 Compared to Year Ended December 31, 2000".

Allocation of the
Allowance for Loan Losses

The following table shows our
allocation of the allowance for loan losses as of December 31, 1998, 1999, 2000, 2001 and
2002. The allocated amount of the allowance is expressed as a percentage of the related
loan amount with the corresponding percentage of the loan category to total loans.

|                                                       | As of December 31,                     
|------------------------------------------------------ | ---------------------------------------
|                                                       |                                        
|                                                       | 1998                                   
|                                                       |                                        
|                                                       | Allocated allowance                    
|                                                       |                                        
|                                                       | (in millions of R$, except percentages)
|Type of loan:                                          |                                        
|Commercial:                                           
|Industrial and other                                   | R$227                                  
|Import financing                                       | 15                                     
|Export financing                                       | 62                                     
|Real estate loans, primarily residential housing loans | 14                                     
|Direct lease financing                                 | 59                                     
|Individuals:                                          
|Overdraft                                              | 71                                     
|Financing                                              | 131                                    
|Credit card                                            | 92                                     
|Agricultural                                           | -                                      
|                                                       |                                        
|Total                                                  | R$671                                  
|                                                       |                                        

|                                                       | As of December 31,                     
|------------------------------------------------------ | ---------------------------------------
|                                                       |                                        
|                                                       | 2001                                   
|                                                       |                                        
|                                                       | Allocated allowance                    
|                                                       |                                        
|                                                       | (in millions of R$, except percentages)
|Type of loan:                                          |                                        
|Commercial:                                           
|Industrial and other                                   | R$486                                  
|Import financing                                       | 15                                     
|Export financing                                       | 21                                     
|Real estate loans, primarily residential housing loans | 41                                     
|Direct lease financing                                 | 88                                     
|Individuals:                                          
|Overdraft                                              | 78                                     
|Financing                                              | 259                                    
|Credit card                                            | 225                                    
|Agricultural                                           | 63                                     
|                                                       |                                        
|Total                                                  | R$1,276                                
|                                                       |                                        

Average Deposit Balances
and Interest Rates

The following table shows the average
balance of deposits together with the average interest rate paid for each period
presented.

|                                | As of or for the Year Ended December 31,
|------------------------------- | ----------------------------------------
|                                |                                         
|                                | 2000                                    
|                                |                                         
|                                | Average balance                         
|                                |                                         
|                                | (in millions of R$, except percentages) 
|Domestic deposits:              |                                         
|Non-interest-bearing deposits: 
|Demand deposits                 | R$1,361                                 
|Interest-bearing deposits:     
|Deposits from banks             | 87                                      
|Savings deposits                | 2,845                                   
|Time deposits                   | 4,053                                   
|                                |                                         
|Total interest-bearing deposits | 6,985                                   
|                                |                                         
|Total domestic deposits         | 8,346                                   
|                                |                                         
|International deposits: (1)    
|Non-interest-bearing deposits: 
|Demand deposits                 | 60                                      
|Interest-bearing deposits:     
|Deposits from banks             | 132                                     
|Savings deposits                | 114                                     
|Time deposits                   | 309                                     
|                                |                                         
|Total interest-bearing deposits | 555                                     
|                                |                                         
|Total international deposits    | 615                                     
|                                |                                         
|Total deposits                  | R$8,961                                 
|                                |                                         

|________ | ____________                                                      
|-------- | ------------------------------------------------------------------
|(1)      | Denominated in currencies other than reais, primarily U.S.
dollar.

Maturity of Deposits

The following table shows the
maturity distribution of our deposits at December 31, 2002.

|                                | As of December 31,2002 
|------------------------------- | -----------------------
|                                |                        
|                                | Due in 3 months or less
|                                |                        
|                                | (in millions of R$)    
|Domestic deposits:              |                        
|Non-interest-bearing deposits: 
|Demand deposits                 | R$2,457                
|Interest-bearing deposits:     
|Deposits from banks             | 10                     
|Savings deposits                | 5,659                  
|Time deposits                   | 4,299                  
|                                |                        
|Total interest-bearing deposits | 9,968                  
|                                |                        
|Total domestic deposits         | 12,425                 
|                                |                        
|International deposits: (1)    
|Non-interest-bearing deposits: 
|Demand deposits                 | R$790                  
|Interest-bearing deposits:     
|Deposits from banks             | 4                      
|Savings deposits                | 231                    
|Time deposits                   | 767                    
|                                |                        
|Total interest-bearing deposits | 1,002                  
|                                |                        
|Total international deposits    | 1,792                  
|                                |                        
|Total deposits                  | R$14,217               
|                                |                        

|________ | ____________                                                      
|-------- | ------------------------------------------------------------------
|(1)      | Denominated in currencies other than reais, primarily U.S.
dollar.

The following table shows the maturity
of outstanding deposits with balances in excess of US$100,000 (or its equivalent) issued
by us at December 31, 2002.

|                                             | Currency           
|-------------------------------------------- | -------------------
|                                             |                    
|                                             | Domestic           
|                                             |                    
|                                             | (in millions of R$)
|                                            
|Maturity within 3 months                     | R$4,186            
|Maturity after 3 months but within 6 months  | 676                
|Maturity after 6 months but within 12 months | 1,186              
|Maturity after 12 months                     | 6,981              
|                                             |                    
|Total deposits in excess of US$100,000       | R$13,029           
|                                             |                    

Capital

Specific regulatory capital
requirements are discussed in Item 4  Information on the Company  The
Brazilian Banking Industry; Regulation and Supervision.

Minimum Capital
Requirements

The  following  table shows our actual  capital as compared  to the minimum  capital  required by the
Central Bank rules and presented in accordance with accounting principles adopted in Brazil.

|                                                | As of December 31,       
|----------------------------------------------- | -------------------------
|                                                |                          
|                                                | Partial consolidation (1)
|                                                |                          
|                                                | (in millions of R$)      
|                                                | 2000                     
|                                                |                          
|Our regulatory capital                          | R$ 5,557                 
|Minimum regulatory capital required             | 3,714                    
|                                                |                          
|Excess over minimum regulatory capital required | R$ 1,843                 
|                                                |                          

|________ | ____________                                                              
|-------- | --------------------------------------------------------------------------
|(1)      | Partial consolidation excludes non-financial subsidiaries.                
|(2)      | Full consolidation includes both financial and non-financial subsidiaries.

For additional information on
capital  minimum capital requirements see Note 30 to our Consolidated financial
statements and Item 5  Operating and Financial Review and Prospects 
Capital.

Short-term Borrowings

The following table presents a
summary of the primary short-term borrowings for the periods indicated.

|                                                                         | As of or for the Year Ended December 31,
|------------------------------------------------------------------------ | ----------------------------------------
|                                                                         |                                         
|                                                                         | 2000                                    
|                                                                         |                                         
|                                                                         | (in millions of R$, except percentages) 
|Federal funds purchased and securities sold under repurchase agreements: |                                         
|Amount outstanding                                                       | R$ 9,752                                
|Maximum amount outstanding during the period                             | 9,752                                   
|Weighted average interest rate at period-end                             | 15.7 %                                  
|Average amount outstanding during period                                 | R$ 3,966                                
|Weighted average interest rate                                           | 11.0 %                                  
|Import and export financing:                                            
|Amount outstanding                                                       | R$ 3,319                                
|Maximum amount outstanding during the period                             | 3,319                                   
|Weighted average interest rate at period-end                             | 7.6 %                                   
|Average amount outstanding during period                                 | R$ 2,928                                
|Weighted average interest rate                                           | 15.6                                    
|Commercial paper:                                                       
|Amount outstanding                                                       | R$ 833                                  
|Maximum amount outstanding during the period                             | 833                                     
|Weighted average interest rate at period-end                             | 6.6 %                                   
|Average amount outstanding during period                                 | R$ 541                                  
|Weighted average interest rate                                           | 10.5 %                                  
|Other interbank borrowings:                                             
|Amount outstanding                                                       | R$ 1,575                                
|Maximum amount outstanding during the period                             | 1,575                                   
|Weighted average interest rate at period-end                             | 7.1 %                                   
|Average amount outstanding during period                                 | R$876                                   
|Weighted average interest rate                                           | 7.0 %                                   
|                                                                         |                                         
|Other                                                                    | R$ 119                                  
|                                                                         |                                         
|Total                                                                    | R$15,598                                
|                                                                         |                                         

ITEM 6.                                  DIRECTORS, SENIOR MANAGEMENT
AND EMPLOYEES

Directors and SENIOR MANAGEMENT

Unibanco

We are managed by our:

| | Board of Directors (Conselho de Administração), consisting of six
directors; and                                                                                          
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| | Board of Officers (Diretoria), consisting of twenty-one executive officers (which
compose the Board of Executive Officers), thirty-one officers and forty deputy officers.

The Board of Directors is our decision-making body.  It determines
our basic guidelines and policies by:

| | establishing our corporate strategy;                                
|- | --------------------------------------------------------------------
| 
| | reviewing our business plans; and                                   
| 
| | supervising and monitoring the activities of our executive officers.

The Board of Executive  Officers is elected by our Board of
Directors,  and is  responsible  for the management and supervision of our corporate
 activities.  It follows and ensures  compliance  with general  guidelines and policies
established by the General Shareholders  Meetings,  the Board of Directors and our
By-Law. The members of the Board of Officers have the exclusive power to act on our
behalf pursuant to our by-laws.

Our Board of Executive Officers has two Executive Presidents and one
Corporate Executive Officer.

The Executive President of the Retail Banking Group is responsible
for:

| | the retail network;         
|- | ----------------------------
| 
| | customer-site branches;     
| 
| | credit card operations;     
| 
| | retail credit;              
| 
| | consumer finance; and       
| 
| | retail operations generally.

The Executive President of the Wholesale Banking Group is
responsible for:

| | the corporate and middle market business units;        
|- | -------------------------------------------------------
| 
| | investment banking;                                    
| 
| | treasury and international operations;                 
| 
| | national and international securities distribution; and
| 
| | private banking.                                       

The Corporate Executive Officer is responsible for:

| | planning, controlling and risk management; and
|- | ----------------------------------------------
| 
| | market and investor relation;                 

In order to comply with  Circular  3.136  enacted by the Central
Bank on April 28, 2002,  on April 28, 2003 the Board of  Directors  elected our  existing
 Officers  and Deputy  Officers  as  statutory  officers.  As of the election,  all
 Officers  and Deputy  Officers,  as it happens  with our  Executive  Officers,  are
 personally responsible for the activities conducted by us pursuant to the banking
regulation in effect.

The Officers are  responsible  for management and  supervision of
the areas delegated by the Board of Executive Officers and for supervision and
 co-ordination  of the performance of the Deputy Officers that are under their direct
supervision.

The Deputy  Officers are  responsible  for  management and
 supervision of the areas  delegated by the Board of Executive Officers or by the
Officers.

Unibanco AIG Seguros and Unibanco  Asset  Management  are managed by
their  respective  Boards of Directors and Officers.

Except for the  Directors  and  Officers  elected on April 28,
 2003,  as per the  minutes of the  Shareholders Meeting and the minutes of the Board of
Directors  Meeting held on such date,  which are subject to the Central Bank  approval,
 the Central Bank has approved each of our  directors  and  executive  officers to serve
in his position, as prescribed by the regulations for financial institutions.

As of the date of this Annual Report, our directors and officers are:

|Directors                       | Position      | Date of Birth    
|------------------------------- | ------------- | -----------------
|                               
|Pedro Moreira Salles            | Chairman      | October 20, 1959 
|Gabriel Jorge Ferreira          | Vice Chairman | October 17, 1935 
|Pedro Sampaio Malan *           | Vice Chairman | February 19, 1943
|Israel Vainboim                 | Director      | June 1, 1944     
|Pedro Luiz Bodin de Moraes *    | Director      | July 13, 1956    
|Tomas Tomislav Antonin Zinner** | Director      | January 29, 1938 

|Executive Officers                         | Position                                           | Date of Birth     
|------------------------------------------ | -------------------------------------------------- | ------------------
|                                          
|Fernando Barreira Sotelino                 | Executive President of the Wholesale Banking Group | February 12, 1949 
|Joaquim Francisco de Castro Neto           | Executive President of the Retail Banking Group    | March 30, 1944    
|Adalberto de Moraes Schettert              | Executive Vice President                           | December 22, 1947 
|Celso Scaramuzza                           | Executive Vice President                           | December 12, 1952 
|César Augusto Sizenando Silva              | Executive Vice President                           | August 21, 1949   
|Geraldo Travaglia Filho ***                | Corporate Executive Officer                        | May 26, 1951      
|Álvaro Portinho de Sá Freire Júnior        | Executive Officer                                  | June 2, 1951      
|Armando Zara Pompeu                        | ExecutiveOfficer                                   | February 12, 1967 
|Carmine Gesu Rago                          | Executive Officer                                  | April 7, 1950     
|Edwin Rindt *                              | Executive Officer                                  | April 30, 1960    
|Elio Boccia                                | Executive Officer                                  | December 6, 1946  
|Jorge Benjamin Rosas                       | Executive Officer                                  | July 5, 1957      
|José Lucas Ferreira de Melo                | Executive Officer                                  | December 30, 1956 
|Koji Yamada                                | Executive Officer                                  | October 28, 1952  
|Manoel de Oliveira Franco                  | Executive Officer                                  | January 12, 1954  
|Orestes Alves de Almeida Prado             | Executive Officer                                  | September 14, 1945
|Osias Santana de Brito *                   | Executive Officer                                  | October 11, 1963  
|Paulo Antonio Gaspar                       | Executive Officer                                  | June 21, 1954     
|Rogerio Carvalho Braga                     | Executive Officer                                  | January 30, 1956  
|Sérgio Zappa                               | Executive Officer                                  | June 22, 1952     
|Tiago Jorge Rocha e Silva Mateus das Neves | Executive Officer                                  | April 23, 1969    

|Officers*                               | Position | Date of Birth     
|--------------------------------------- | -------- | ------------------
|                                       
|Adhemar Toshimassa Kajita               | Officer  | August 02, 1952   
|Angelo Celso Souza Lima de Vasconcellos | Officer  | October 10, 1950  
|Antonio Carlos Azevedo                  | Officer  | November 16, 1968 
|Antonio Carlos Azzi Junior              | Officer  | November 08, 1962 
|Claudio Coracini                        | Officer  | April 17, 1956    
|Eduardo Francisco de Castro             | Officer  | May 02, 1964      
|Eduardo Masset Lacombe                  | Officer  | January 30, 1946  
|Humberto Padula Filho                   | Officer  | June 11, 1966     
|João Antonio Camargo                    | Officer  | February 24, 1952 
|Jorge Luiz Cardoso Viana                | Officer  | November 22, 1951 
|José Fernando Trita                     | Officer  | January 04, 1959  
|Josmar Beltrami                         | Officer  | November 22, 1944 
|Luis Tadeu Mantovani Sassi              | Officer  | September 06, 1958
|Luiz Mauricio Lamenza de Moraes Jardim  | Officer  | February 12, 1964 
|Marcel Antonio Baumgartner              | Officer  | May 07, 1961      
|Marcelo da Silva Mitri                  | Officer  | March 10, 1965    
|Marcia Maria Freitas de Aguiar          | Officer  | July 09, 1966     
|Marcos Alberto da Silva Gomes           | Officer  | May 10, 1947      
|Marcos Braga Dainesi                    | Officer  | December 02, 1958 
|Nestor Theobaldo Breidenbach            | Officer  | September 10, 1941
|Nilton Sérgio Silveira Carvalho         | Officer  | January 01, 1957  
|Paulo Meirelles de Oliveira Santos      | Officer  | November 25, 1957 
|Reinaldo Pereira da Costa Rios          | Officer  | February 10, 1962 
|Ricardo Amand                           | Officer  | July 10, 1959     
|Ricardo Coutinho                        | Officer  | July 28, 1963     
|Rogério VasconcelosCosta                | Officer  | June 11, 1970     
|Romildo Gonçalves Valente               | Officer  | April 05, 1966    
|Rubem Rollemberg Henriques              | Officer  | July 20, 1959     
|Rubens dos Reis Cavalieri               | Officer  | December 25, 1964 
|Sandra Cristina Martinelli Silva Cahiza | Officer  | July 03, 1963     
|Tarcisio do Nascimento                  | Officer  | November 06, 1956 

|Deputy officers*                        | Position       | Date of Birth     
|--------------------------------------- | -------------- | ------------------
|Antonio José Castro Costa               | Deputy Officer | April 05, 1948    
|Antonio Massaharu Suenaga               | Deputy Officer | April 04, 1954    
|Carlos Ernesto Gomes Medeiros           | Deputy Officer | January 27, 1970  
|Celso Simão Issa                        | Deputy Officer | April 23, 1943    
|Claudia Leite Silva                     | Deputy Officer | January 03, 1969  
|Claudia Politanski                      | Deputy Officer | August 31, 1970   
|Daniel Salvador de Moraes Melo          | Deputy Officer | April 16, 1965    
|Danilo José Soares Kahil                | Deputy Officer | July 24, 1955     
|Eduardo Corsetti                        | Deputy Officer | October 26, 1968  
|Fernando Otavio Richter Guedes          | Deputy Officer | April 30, 1956    
|Francisco de Assis Crema                | Deputy Officer | October 04, 1949  
|Ibrahim José Jamhour                    | Deputy Officer | October 15, 1960  
|Iuri Garcia Zacharias                   | Deputy Officer | September 09, 1966
|Janio Francisco Ferrugem Gomes          | Deputy Officer | October 24, 1960  
|Jorge Luis Merege Correia               | Deputy Officer | October 24, 1958  
|Jorge Luiz Viegas Ramalho               | Deputy Officer | May 24, 1969      
|José Cristovão Martins                  | Deputy Officer | March 02, 1951    
|José Eraldo Raimundo                    | Deputy Officer | January 04, 1950  
|José Mario Bellesso                     | Deputy Officer | December 25, 1949 
|José Ramon do Amaral Gomez              | Deputy Officer | June 20, 1965     
|Julia Holland Reid                      | Deputy Officer | March 14, 1963    
|Ligia Maria Stoppa da Silva             | Deputy Officer | May 11, 1963      
|Marcelo Antonio Montes Vieira           | Deputy Officer | June 14, 1966     
|Marcelo Ariel Rosenhek                  | Deputy Officer | April 01, 1968    
|Marcelo Felberg                         | Deputy Officer | February 14, 1962 
|Marcelo Luis Orticelli                  | Deputy Officer | August 22, 1966   
|Marcelo Tonhazolo                       | Deputy Officer | December 17, 1965 
|Marcia Klinke dos Santos                | Deputy Officer | March 05, 1969    
|Marciana Emilia Barbosa                 | Deputy Officer | June 08, 1951     
|Marcos Eduardo Buckton de Almeida       | Deputy Officer | October 27, 1959  
|Maria Célia Furlani de Mendonça Camargo | Deputy Officer | November 13, 1957 
|Maria Eliene Dalvi                      | Deputy Officer | September 03, 1968
|Maria Luisa Ribeiro Mendes              | Deputy Officer | June 27, 1959     
|Martin Iperus Ruyter Hercules           | Deputy Officer | May 22, 1963      
|Max Marcelo Mustrangi                   | Deputy Officer | May 03, 1966      
|Nicolas Alfredo Wsevolojskoy            | Deputy Officer | March 04, 1973    
|Raquel Breidenbach Langhanz             | Deputy Officer | August 20, 1970   
|Ricardo dos Santos Andrade              | Deputy Officer | March 25, 1955    
|Rogério Cláudio Bacelar Scofano         | Deputy Officer | March 25 1955     
|Thomas Tuppy                            | Deputy Officer | August 16, 1960   

|*   | The election of these directors
 and officers, occurred on April 28, 2003, is still pending of approval by the Central Bank.                                                                                                                                          
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|**  | Until Central Bank approves the election of Mr. Malan as our Vice Chairman, Mr. Zinner shall
continue to act with full powers as Vice Chairman of our Board of Directors.                                                                                             
|*** | Notwithstanding the creation of the position of Corporate Executive Officer and the
election of Mr. Travaglia for such position is still pending Central Bank approval, Mr. Travaglia shall continue to act
with full powers to represent us as our Executive Officer.

The biographies of our directors and officers are summarized below:

Directors

Pedro Moreira  Salles  Mr. Moreira  Salles joined us in 1989 and
became  Chairman of our Board of Directors in 1997 after  serving as Vice  Chairman for
almost six years.  Mr. Moreira  Salles also serves as Chairman of the Board of Directors
of Unibanco  Holdings  S.A.,  Chairman of the Board of Directors of Unibanco AIG Seguros
and of  Fininvest.  Mr.  Moreira  Salles  is a member  of the Group of Fifty,  a Latin
 American  business  council sponsored by the Carnegie  Endowment for International
 Peace and the Inter-American  Dialogue,  in Washington, D.C. He holds BA in Economy and
History from the  University  of  California,  Los Angeles,  where he graduated Magna Cum
Laude.  He has attended the graduate  program in  International  Relations at Yale
University and the Management Program at Harvard University.

Gabriel Jorge Ferreira   Mr. Ferreira  joined us in 1957 and became
Vice Chairman of our Board of Directors in 1997,  after  serving as director  since 1983.
 He also serves as Vice  Chairman of the Board of  Directors  of Unibanco AIG Seguros,
 Director of Unibanco  Holdings and as President of the  Federation of Brazilian  Banking
Associations  (FEBRABAN)  since March 1991,  and as Chairman of the Board of Executive
 Officers of such entity since 1986.  He holds an  Accounting  degree from the
 Accounting  School of Barretos,  Brazil and a Law degree from University of São Paulo
(Universidade de São Paulo - USP).

Tomas  Tomislav  Antonin  Zinner  Mr. Zinner  joined us in 1965 as
the  investment  banking  director and is a member of our Board of Directors  since 1988.
 Throughout  his career in Unibanco,  he has held several  senior positions,  including
head of the international  area and senior credit officer,  and has been, until recently,
our president and chief  executive  officer.  He also serves as a member of the Boards of
Directors of Unibanco Holdings, Unibanco AIG Seguros,  Banco1.net,  Banco Fininvest,
Banco Dibens, CIBRASEC (Brazilian Securitization Company),  Unibanco Asset Management,
 the Brazilian  Association for Infrastructure  (ABDIB),  Confab (largest pipe industry
in Brazil),  and CP Participações.  Mr. Zinner also serves as Chairman of the Board of
The Nature Conservancy (TNC) in Brazil. He holds a BA from School of Economics of the
Federal  University,  Rio de Janeiro and a graduate degree from University of Chicago.

Israel  Vainboim   Mr. Vainboim  joined us in 1969 and has held
several  positions in the areas of investment, leasing  and  credit.  He became one of
our  directors  in 1988.  Mr. Vainboim  also  serves as a member of the Management
 Boards of Unibanco  Holdings,  Unibanco AIG  Seguros,  AIG-Life  Cia. de Seguros,  Souza
Cruz S.A., Alcoa Latin  America,  E-bit  Tecnologia  em Marketing  S.A.,  Connectmed  and
Itaparica  S.A.  Empreendimentos Turísticos.  Mr. Vainboim  serves as Vice President of
Unibanco Leasing and as a member of the Consulting Board of ANBID (Investment Banks
Association) and of ABEL (Brazilian  Association of Leasing Companies).  He received a BS
in  Mechanical  Engineering  from the  National  School of  Engineering,  Rio de  Janeiro
 and an MBA from Stanford University.

Pedro Luiz Bodin de Moraes  Mr. Bodin was elected as our  Director
on April 28,  2003.  He has been an officer of Icatu  Holding  S.A.  and from 1993 to
2002 was  officer  and  shareholder  of Banco  Icatu S.A. He was also officer of the
 Monetary  Politics of the Central Bank of Brazil  during the period of 1991 to 1992.
 Mr. Bodin is economist  with master  degree in Economy  from  Catholic  University
 (Pontifícia  Universidade  Católica PUC) of Rio de Janeiro and has a Ph.D. degree in
Economy from Massachusetts Institute of Technology (MIT).

Pedro  Sampaio  Malan  Mr. Malan was elected Vice  President of our
Board of Directors on April 28, 2003.  Mr. Malan was Ministry of Finance for 8 years,
 from 1998 to 2002,  Chairman of the Central Bank from 1993 to 1994, Special  Council and
Chief  Negotiator  for External  Debt Issues of the Ministry of Finance from 1991 to
1993, executive  officer  of  World  Bank  from  1986  to 1990  and  from  1992 to  1993,
 executive  officer  before Inter-American  Development  Bank from  1990 to 1992,
 officer  of the  Transnational  Companies  Center of the United  Nations  (UN) in New
York from 1983 to 1984 and officer of the  International  Department  of Economy and
Social Matters of UN, in New York,  from 1985 to 1986. He graduated in Electric
 Engineering in 1965 at PUC Politechnic School of Rio de Janeiro and has a Ph.D. degree
in Economy from Berkeley University, California.

Executive Officers

Fernando  Barreira  Sotelino  Mr. Sotelino  joined us in November
1991 as Executive Vice President and head of international and investment banking,
 coming from Citibank-Brazil  where he was managing director in charge of merger and
 acquisition,  privatization  and  investment  areas.  Mr. Sotelino  was  appointed as
our Executive President  of the  Wholesale  Banking  Group in March 1998.  He also
 serves as a director  of  Unibanco  Asset Management..  Prior to joining  us, he had
been head of Crocker  Banks  Project  Finance  Group  (from 1979 to 1986) in San
 Francisco,  California.  He was also  Associate  Professor  of  Economics  and Finance
of the MBA Program of Federal University of Rio de Janeiro from 1977 to 1978. He holds BS
in Civil  Engineering,  an MS in industrial  Engineering from Federal University of Rio
de Janeiro,  an MA in economics and an MBA from Stanford University, California.

Joaquim  Francisco de Castro Neto   Mr. Castro  Neto joined us in
1973 as manager of FINASUL and since then he has held several  senior  positions  and
became our  executive  officer in 1980. He was appointed our Executive President  of the
 Retail  Banking  Group in March  1998.  He also  serves  as a  director  of  Unibanco
 Asset Management.  Mr. Castro Neto holds a BA in management from Getúlio Vargas
 Foundation  (Fundação Getúlio Vargas - FGV) and has a  specialization  in Sales
 Management,  Marketing and Development of New Products at IMEDE - Lausanne, Switzerland.

Adalberto de Moraes  Schettert  Mr. Schettert  has been one of our
Vice Presidents  since 1992. He received BS in Engineering and BS in Administration, both
from Federal University of Rio Grande do Sul, Brazil.

Celso  Scaramuzza   Mr. Scaramuzza  joined us in 1979 and has been
one of our Executive Vice Presidents  since August 1997.  Prior to such  appointment,  he
served as one of our  executive  officers for three years.  Since January 1998, he has
been  responsible for our private banking sector,  both inshore and offshore.  He
received a BA in  administration  from the Armando Álvares  Penteado  Foundation  (Fundação
 Armando Álvares  Penteado FAAP) of São Paulo.

César  Augusto  Sizenando  Silva   Mr. Sizenando  Silva  joined us
in 1975 and since then he has held  several senior  positions  in the  areas of  Treasury
 and  Asset  Management.  He was  appointed  our  Executive  Vice President  in April
2002 after  serving as  Corporate  Vice  President  since March  1998.  He also serves as
a director  of  Unibanco  Asset  Management  and as a  member  of  the  consulting  board
 of  ADEVAL  (Brazilian Association  of  Securities  Underwriters).  Mr. Sizenando  has
served as a director  of ANBID for 9 years.  He received BS in Economics from Federal
University of Minas Gerais, Brazil.

Geraldo  Travaglia  Filho   Mr. Travaglia  joined us in 1979 and
has been one of our executive  officers since 1996.  Prior to his current  assignment,
 he was the executive  officer in charge of marketing and products for the retail banking
group from 1998 to 2000. He was  responsible  for the  integration of branches,  systems
and operations of Banco Nacional from 1996 to 1997,  conducted the  Reengineering
 program of Unibanco from 1994 to 1997 and was also our controller from 1989 to 1993. Mr.
Travaglia holds a BA degree in management from USP.

Álvaro  Portinho de Sá Freire  Junior  Mr. Freire  joined us, for
the second time, in 1998 and has been one of our  executive  officers  since then.  Prior
to 1998,  he had  already  worked  with us,  having  held  several positions  at
 securities  underwriting  and  leasing  areas.  He  also  worked  at the  World  Bank
 with  The International  Finance  Corporation  (IFC) for seven years,  at Citicorp
 Investment  Bank and at  Donaldson, Lufkin & Jenrette (DLJ) Securities  Corporation.  He
holds a degree in Economics from Federal University of Rio de Janeiro and a Master degree
in finance from Georgetown University of Washington.

Armando  Zara Pompeu   Mr. Pompeu  joined us in 1991 and has held
several  positions  in the  development  and project  areas.  He has been one of our
 executive  officers  since  August  2000 and is also  responsible  for marketing an
retail banking  products.  Mr. Pompeu  holds a degree in  administration  from
 Faculdades  Campos Salles and a Master degree in Marketing  from Superior  School of
Publicity and Marketing  (Escola  Superior de Propaganda e Marketing  ESPM).

Carmine  Gesu  Rago  Mr.  Rago  joined  us in 2002 and  since  then
has  been  one of our  executive  officers responsible for managing internal  auditing
for our group. Mr. Rago has been working at financial  institutions since 1974,
 beginning in 1977 his career as manager of  institutions  such as HSBC Bank,  ABN-AMRO
 Bank,  The Chase  Manhattan  Bank and The First National Bank of Boston,  serving in
Brazil and abroad as chief  financial officer  and chief  operating  officer.  Mr. Rago
holds a degree in  Business  Management  from IMES - Intituto Municipal de Ensino
Superior de São Caetano do Sul, and is a certified public accountant.

Edwin  Rindt  Mr.  Rindt  joined us in 2002 and is  presently  our
 officer  responsible  for our German  Desk operations.  He  initiated  his career in
Bank  Commerzbank  in 1988,  and from 1989 to 1995 he was manager for commercial
 relationship  of  Commerzbank  with  Latin-American  banks and is  presently
 responsible  for said operations  with  Central and  Oriental  Europe.  He  graduated
 in 1987 in Politic  Economy at  University  of Eberhard-Karls  in  Türbingen,  Germany
and holds an MA degree in  International  Studies  from  University  of Denver, Colorado.

Élio Boccia  Mr. Boccia  joined us in 1992 and has held several
 positions in the  development  and technology areas.  He has been one of our executive
 officers since 1996.  Mr. Boccia was elected  Technology  Personality 2000 in the
 Finance  Area,  after a  ballot  conducted  by the  newspaper  Informática  Hoje.  He
 holds BA in economics from São Luis University.

Jorge  Benjamin  Rosas   Mr. Rosas  joined  us in 1998 as
 President  of  Unibanco  Asset  Management.  He was appointed  our  executive  officer
in April 2002. He also serves as Vice  President of the  Investment  Banking National
 Association  (ANBID).  Prior to joining us,  Mr. Rosas  served as head and  partner of
Latin  America Investment  Bank and at Citibank  N.A. as head of Brazilian  Corporate
 Finance  Desk.  He holds a BS degree in Electrical  Engineering  from Buenos Aires
 Institute of  Technology,  an MS degree in Computer  Sciences  from Moore School of
Engineering and an MBA degree from Wharton School.

José  Lucas  Ferreira  de Melo   Mr. Ferreira  de Melo  joined  us
in 1999 and has  been one of our  executive officers  since  that  time.  Prior to
 joining  us, he  served  as a  Director  of CVM  (Brazilian  Securities Commission)  in
1992 and as a partner of Price  Waterhouse  Auditores  Independentes  until  1997.  He
holds an Accounting degree from University of Federal District.

Koji Yamada  Mr. Yamada  joined us in 2001 and has been one of our
executive  officer  since May 10,  2001. He also serves as a director of Unibanco
 Holdings  and an  representative  officer of Mizuho  Financial  Group in Brazil.  He
holds BA in economics from Osaka University, Japan.

Manoel de Oliveira  Franco  Mr. Franco  is  President  of Banco
Dibens S.A. and has been one of our  executive officers  since  January  2002.  He  held
 several   positions  such  as  Executive   Director  at  Banco  BMG, Vice-President
 Director at Finasa Crédito Financeiro e Investimento,  Director at Banco Mercantil de São
Paulo and  Assistant  Director  of Banco  Finasa de  Investimento.  Mr. Franco  holds a
BS degree in  Economics  from Federal University of Rio de Janeiro and an MBA degree from
 FGV of Rio de Janeiro.

Orestes  Alves de  Almeida  Prado  Mr.  Prado  joined us in August
 2002 and was  subsequently  elected as our executive  officer.  Before  joining  us, Mr.
 Prado has worked at  Citibank  and  ABN-AMRO  Bank.  He holds an administration degree
from Escola de Administração de Empresas de São Paulo.

Osias  Santana de Brito  Mr. Brito has been our  executive  officer
 responsible  for the planning and control areas since December 2002. He has been acting
in the financial  market during nineteen years,  both in national and international
banks. Such banking experience includes the areas of Technology,  Transactions,  Treasury
and Control. He holds a Ph.D. and a master degree in Finance from USP.

Paulo  Antonio  Gaspar  Mr. Gaspar  joined us in 1995 and has
served as an executive  officer  since April 30, 2001. Prior to joining us Mr. Gaspar
worked as key executive at American  Express,  Citibank N.A. and Credicard S.A. Mr. Gaspar
holds BS in Mathematics from PUC of São Paulo.

Rogério  Carvalho  Braga  Mr. Braga  joined us in 1987 as President
of Cambuhy  Citrus  Comercial  Exportadora S.A.  Prior to his  appointment  as  executive
 officer of Unibanco,  in April 2002,  he served as president of Unibanco  Capitalização
and as head of our Human Resources areas.  Mr. Braga holds a Law degree from the PUC of São
Paulo and a MBA from Pepperdine University.

Sérgio Zappa  Mr. Zappa  joined us in 1988 and was appointed as one
of our executive  officers in 1996.  Prior to joining  Unibanco,  Mr. Zappa  spent  seven
 years with the  International  Finance  Corporation   IFC  in Washington,  D.C.,
 initially in IFCs Latin American  Investment  Department and later in Capital Markets.
 He has also worked for the  Brazilian  National  Development  Bank  BNDES in Rio de
Janeiro from 1976 to 1981. He holds a BA  degree in  economics  from  Georgetown
 University  (1974)  and a master  degree  in  international management from Thunderbird
(1981).

Tiago  Jorge Rocha e Silva  Mateus das Neves   Mr. Neves  joined us
in 2000 as  responsible  for the  Regional Branch Network and he has been our executive
 officer since April 2002.  Mr. Neves holds an MBA from Dom Cabral Foundation  (Fundação
 Dom Cabral) and a BA in Political  and  Economic  International  Relations  from Minho
University  (Portugal),  supplemented by extension courses in Financial Institutions
 Administration  (Banking) at  FGV.

Officers

Adhemar  Toshimassa  Kajita  Mr. Kajita joined us in 1995, and
since 1997 is our officer  responsible  for our Project Finance and  Privatization
 areas.  Mr. Kajita  formerly worked in the Invesment  Banking area of Banco Itaú S.A.,
from 1977 to 1991. He graduated in aeronautic  Engineering at Aeronautic  Technology
Institute - ITA in 1975,  has  specialization  in  Business  Management  at FGV in São
Paulo  and  holds a Master  of  Business Administration  MBA degree from University of
Chicago.

Angelo Celso Souza Lima de Vasconcellos  Mr.  Vasconcellos  joined
us in 1981 and presently is our officer for the exchange  transactions  and rural credit
areas.  He graduated in 1973 in Business  Management at University of Economic, Business
Management and Accounting Studies of Belo Horizonte.

Antonio  Carlos  Azevedo  Mr. Azevedo joined Banco Nacional S.A. in
1979 and since 1997 is one of our officers responsible  for the  coordination  of a part
of our banking  branch  network.  He is graduated in Economics at Santana University,
with a master degree in Marketing from USP.

Antonio  Carlos  Azzi  Junior  Mr.  Azzi has been  working  with us
for 21  years.  He is one of our  officers responsible  for our banking  branch  network
since 1995,  has attended  several  business  banking  courses by PROBANC  (Programa  Avançado
de  Administração  Bancária)  and  presently  is  attending a course on  corporate
strategic planning at Associação Educacional Nove de Julho ( UNINOVE) in São Paulo.

Claudio  Coracini   Mr.  Coracini  joined  us in 1992 to work in
our  merge  and  acquisition  area and is our officer of the investment  area since 1995.
He graduated in 1978 in production  Engineering at USP  Polytechnic School and holds a
master degree in industrial Engineering from Stanford University, California (1980).

Eduardo  Francisco de Castro  Mr. Castro joined us ten years ago,
and has a solid  professional  experience in marketing,  reengineeringand  business
platform re-structuring.  Presently he is responsible for the definition and
 implementation  of quality and results  strategies  for the retail  banking  group,
 acting as Segment and Planning  Officer.  Mr. Castro is graduated in navy Engineering at
Navy School of Federal  University of Rio de Janeiro and holds a master degree in
Business  Management from FGV with extension at University of Chicago.  He is specialized
in Marketing at ESPM and in management of small companies at FGV.

Eduardo  Masset Lacombe  Mr.  Lacombe began his career as assistant
 manager of Brasil  Warrant in 1964.  From 1969 to 1971 he has acted as our
 representative  in Portugal (Lisboa and Porto), to act before Banco Português Atlântico.
 From 1972 to 1984 he was responsible for the management of several branches,  being
elected officer in 1991.  Since 1995 Mr. Lacombe is our private bank officer,
 responsible for the offices in the cities of Rio de Janeiro and Belo Horizonte.  He is
graduated in Business  Management at Brazilian Public  Management  Scholl of FGV, Rio de
Janeiro

Humberto  Padula Filho  Mr.  Padula  joined us in 1982,  and since
1996 he is one of our officers  responsible for the  management  of several  branches
 located in the city of Rio de Janeiro.  He is graduated in Marketing and Management at
Estácio de Sá University.

João  Antonio  Camargo  Mr.  Camargo  joined  us in 1968 and since
 1994 is our  officer  responsible  for the coordination of deputy  officers,  managers
and clerks of several  branches located in the States of São Paulo, Minas Gerais,  Paraná,
 Rio Grande do Sul and Santa Catarina.  He has attended several business banking courses
by PROBANC (Programa Avançado de Administração Bancária).

Jorge Luiz Cardoso Viana  Mr. Viana joined us in 1989 as manager of
products and  superintendent  of onlending transactions  of the funds of Banco Nacional
de  Desenvolvimento  Econômico e Social  BNDES. He is our officer responsible  for the
management of wholesale  banking group clients  portfolio since 1999. He began his
career in 1977 at Banco Regional de  Desenvolvimento  do Extremo  Sul and has acted as
project  analyst at Industrial Credit and Investment  Corporation of India  Bombay.  Mr.
Viana graduated in Agronomic  Engineering at Federal University of Pelotas,  Rio Grande
do Sul, in 1975.  He has a  post-graduation  degree in Regional  Planing and Development
from ONU/SEPLAN/IPEA/CENDEC.

José  Fernando  Trita  Mr.  Trita  joined us in 1984 to work in
 technology  and systems  development  for our products and  transactions.  From January
to November  1993,  Mr. Trita acted as manager of FD  Consulting  CO, returning  to work
with us at the end of that year as  systems  superintendent  until  2002,  and since then
as systems officer.  Mr. Trita is presently  responsible for our technology and
informatic  areas. He is graduated in Production  Engineering at Industrial  Engineering
 University,  and is specialized in Distributed Computing by MIT .

Josmar  Beltrami - Mr.  Beltrami  joined us on August  1962 and has
large  professional  experience  in matters related to our branches network.  He is
presently one of our officers  responsible for several branches located in the States of São
Paulo, Minas Gerais and Rio Grande do Sul. Mr. Beltrami  graduated in Business
 Management at São Judas Tadeu University in 1981.

Luis Tadeu  Mantovani  Sassi  Mr.  Sassi  joined us in 1982 as
manager of retail  banking  accounts.  On April 1984,  Mr. Sassi took the same  position
at Bozano,  Simonsen  Bank and returned to work with us in 1985 in the middle market
sector.  In 2000 Mr. Sassi was nominated deputy officer and is presently our officer
 responsible for the coordination of our branches  network.  He graduated in Economics at
PUC of Campinas in 1981, and holds an MBA from FGV in Rio de Janeiro.

Luiz  Maurício  Lamenza de Moraes  Jardim - Mr.  Jardim  began his
career at Banco  Nacional  S.A.  as economic analyst.  In 1995 he was promoted to
corporate  finance and capital market deputy officer and since 1997, he is our officer
for international  treasury area,  responsible for our international  debt placement.  He
graduated in Economy at Gay-Lussac High Studies Institute (Instituto Superior Gay-Lussac)
in 1986.

Marcel Antonio  Baumgartner  Mr. Baumgartner  joined us in 1986 and
since 2000 is our officer  responsible for credit  operations with  large-sized
 companies.  He has solid  experience in the financial  market,  including international
 transactions  involving  Commerzbank  through  Unibanco  German  Desk and has been
acting in the commercial and technical  financing  sectors since 1980. He graduated in
Business  Management at Atibaia School of Accounting Sciences and Business Management
 (Faculdade de Ciências  Administrativas e Contábeis de Atibaia) in 1993.

Marcelo da Silva Mitri - Mr.  Mitri  joined us in 1980 and is one of
our  officers  responsible  for our branch network in the city of São Paulo.  He is
graduated in Business  Management  Missionary  Foundation  of Superior Studies (Fundação
 Missioneira de Estudos Superiores) of the city of Santo Ângelo,  State of Rio Grande do
Sul. He holds a post graduation degree in Monetary Economy from Economy Regional
 Foundation  (Fundação Regional de Economia)  of the city of Santa Maria,  State of Rio
Grande do Sul and an MBA from Fundação Dom Cabral in Belo Horizonte, State of Minas
Gerais.

Marcia Maria  Freitas de Aguiar - Ms.  Aguiar  joined our legal
 department  in 1986.  She is our legal officer since 1998,  responsible  for legal
 consulting  for  transactions  of the wholesale and retail  banking group, capital
 market,  asset  management  and credit card,  as well as our  strategic  corporate
 transactions.  She graduated  in Law at  University  of the State of Rio de Janeiro  UERJ,
 in 1988 and holds a master  degree in Corporate Law from New York University School of
Law.

Marcos  Alberto da Silva Gomes - Mr.  Gomes joined us after being
 transferred  from Banco de  Investimento  do Brasil  S.A.,  in which he started  working
 in 1979.  Presently  he is one of our  officers,  responsible  for corporate  finance
 transactions  in the States of Minas  Gerais and  Espírito  Santo and in part of the
center west,  north and north east  regions of  Brazil.  He has 37 years of  professional
 experience  in the  credit, exchange,  marketing,  structured transactions and risk
management areas of financial  institutions.  Mr. Gomes is graduated in Business
 Management at Newton Paiva  University  (Faculdade  Newton Paiva) in the city of Belo
Horizonte, State of Minas Gerais, and holds an MBA from COPPEAD - Federal University of
Rio de Janeiro.

Marcos Braga Dainesi - Mr. Dainesi joined us in 2003 and is our
officer  responsible for the  restructuring  of our credit  portfolio.  He has been
acting in the  financial  market for 20 years.  During this period,  he has worked in
five national and  international  financial  institutions,  especially in risk and credit
 management areas. Mr. Dainesi is graduated in Engineering at USP.

Nestor  Theobaldo  Breidenbach  - Mr.  Breidenbach  joined  us in
1961 to  develop  activities  related  to our branches  network and is presently our
officer in Porto Alegre  responsible for several branches located in the State of Rio
Grande do Sul. He  graduated  in 1968 in  Accounting  Sciences  form Vale do Rio Sinos
 University (UNISINOS).

Nilton Sérgio  Silveira  Carvalho  Mr. Carvalho  joined us in 1981
as  productivity  analyst.  Since 2000, Mr. Carvalho is one of our officers  responsible
for banking security and services related to technology  processes development  and
 implementation.  He graduated  in Electric  Engineering  in 1978 and holds a post
 graduation degree in production Engineering from Industrial Engineering University.

Paulo  Meirelles de Oliveira  Santos - Mr.  Santos  joined  Unibanco
in 2002 and is our private  bank  officer, responsible for the  coordination of our
commercial  managers in São Paulo. He started working in the financial market in 1983,
 in banks such as Chase  Manhattan  Bank,  Delta  National  Bank and Trust Company of New
York, Banco Bozano  Simonsen S.A. and Banco  Santander  S.A. Mr.  Santos  graduated in
1981 in Civil  Engineering  at Militar Engineering  Institute - IME, in the city of Rio
de Janeiro,  and holds an MBA from American Graduate School of International Management.

Reinaldo Pereira da Costa Rios  Mr. Rios joined us in 1987,  having
occupied several  positions related to the bank transactions,  including leasing
operations.  Since 1997, he is our domestic treasury officer, responsible for the
pricing,  liquidity management,  (ALM), and for the rendering of services for our private
banking area. He graduated in economy at FAAP in 1983.

Ricardo  Amand  Mr.  Amand has been  working  with us for 20
 years,  and  since  2000 is one of our  officers responsible  for our  branch  network.
 Furthermore,  Mr.  Amand  was  responsible  for  creating  an area  for structured
 transactions in Brazil and abroad to Japanese  multinational  companies with offices in
Brazil.  He is graduated in Business Management and in economy at Faculdades
 Metropolitanas  Unidas  FMU and holds a post graduation in financing management and
control from FGV.

Ricardo  Coutinho  Mr.  Coutinho  joined  Unibanco 8 years ago.
 Since 2002,  he is one of our retail  banking officers  responsible  for retail  banking
 branches  in the city of São Paulo.  He is  graduated  in  Business Management  at
Faculdades  Associadas  Ipiranga FAI and,  besides  having an extension  course in
marketing at ESPM, holds an MBA from IBMEC and a post graduation  degree in marketing
 management from Methodist  University of High Studies.

Rogério  Vasconcelos  Costa - Mr. Costa has been one of our officers
for 32 years,  responsible  for our branch network in the State of Minas Gerais.  He has
 previously  worked in Shell Brasil de Petróleo S.A. in marketing and planning areas
before  joining Banco  Nacional,  where he has acted in the commercial  area for 6 years
Mr. Costa is  graduated  in  Business  Management  and holds a post  graduation  degree
in economy  and an MBA from Fundação Dom Cabral.

Romildo  Gonçalves  Valente  Mr.  Valente  began his career in the
 financial  market in 1997 at Banco Pactual S.A.  and joined us in 1998,  in the
 position of officer  responsible  for our credit card  transaction  area. Since 1999, he
is our officer for the cash and asset  management  products  area.  Mr.  Valente is
graduated in Electric  Engineering and has a specialization in Electronics at Militar
Engineering  Institute (IME). He holds an MBA in finance  Engineering  from MIT Sloan
School of Management  and a master  degree in computing  science from IME.

Rubem Rollemberg  Henriques - Mr. Henriques  joined us in 1996 to be
one of our regional  officers  responsible for several  branches  located in the city of
Rio de Janeiro.  Since December 2002, Mr. Henriques is one of our officers  responsible
for the management of several regional  offices,  branches and in-store  branches located
in the city of São Paulo,  in the State of Minas Gerais and in the Center-West  region of
Brazil.  He worked at Banco Nacional S.A. from 1986 to 1995 and was responsible for
marketing  strategy for banking  products.  He is graduated in Business Management and in
systems analysis at Guanabara Business Management University.

Rubens dos Reis  Cavalieri  Mr.  Cavalieri  joined us in 2002 and
is  presently  our officer of the merger and acquisitions  area.  He held many  positions
 at  Citigroup  for ten years and worked at Banco UBS Warburg S.A. from 2001 to 2002. Mr.
Cavalieri  graduated in aeronautical  Engineering and Mechanics at ITA in 1998 and holds
an MBA from California State University.

Sandra  Cristina  Martinelli  Silva Cahiza  Ms. Cahiza joined us in
1992, as officer  responsible  for several marketing activities,  including social
marketing,  press support,  events and promotion,  public relations and web marketing.
 She graduated in social communication,  with extension in public relations at Santos
University UNISANTOS,  in 1984,  holds a post  graduation  degree in publicity and
 marketing  from ESPM and an MBA degree from Fundação Dom Cabral.

Tarcisio do Nascimento  Mr.  Nascimento  joined us in 1972 and
since then held several positions in the branch network area.  Presently,  Mr.
 Nascimento  is one of our officers of the branch  network in the city of Rio de Janeiro.
He graduated in Business Management at Universidades da Região de Joinville in 1979.

Deputy Officers

Antonio  José Castro  Costa  Mr.  Costa  joined  Unibanco in 2001,
 when he became one of our deputy  officers responsible for the  coordination of several
 branches  located in the south of the State of Minas Gerais.  Mr. Costa began his career
in 1972 at Morada S.A.,  in which he held  several  positions  until 2001.  He graduated
in Economy at Augusto Mota University  (Universidade  Augusto Mota) in 1980 and attended
an Advanced  Marketing course at FGV in 1985.

Antonio  Massaharu  Suenaga  Mr.  Suenaga joined us in 1997 as
deputy  officer  responsible  for management of credit and for monitoring credit
 operations.  He contributes for the elaboration,  maintenance and enhancement of our
credit policy and for the  development of new credit  products and for  evaluation of
credit risks.  Mr. Suenaga graduated in Business Management at USP in 1976.

Carlos Ernesto Gomes Medeiros  Mr.  Medeiros  joined us in 2001 and
is our deputy officer  responsible for the budget and management  information  for our
credit  portfolio area. He gathered a large  experience  working in the Risk Management
sector for nine years. Mr. Medeiros  graduated in Law at Fluminense  Federal  University
in 1996 and in Electronic  Engineering in 1993 and has a master degree in management
 sciences,  both from Federal University of Rio de Janeiro.

Celso  Simão  Issa  Mr.  Issa  joined us in 1978,  and since 1991
is our deputy  officer  responsible  for the coordination of several  branches  located
in the city of Rio de Janeiro.  He has 45 years of experience in the national  financial
market. He graduated in Law at Gama Filho University  (Universidade  Gama Filho), in Rio
de Janeiro in 1980.

Cláudia Leite Silva  Ms. Silva joined  Nacional  Seguros S.A. in
1991 and was transferred to Unibanco in 1995, when became sales  marketing
 superintendent.  Presently Ms. Silva is our deputy  officer  responsible  for the
management and  coordination of our  administrative  branches  located in the countryside
of São Paulo, as well as for  the  implementation  and  execution  of  our  strategic
 growth  plans.  She  graduated  in  Mechanical Engineering  with  emphasis in
 Production  at PUC in 1991 and holds an MBA degree  from Dom Cabral  Foundation (Fundação
Dom Cabral).

Claudia  Politanski  Ms.  Politanski  joined us in 1991 and is
presently our deputy officer  responsible for the legal support regarding banking,
 capital market,  investments,  mergers and acquisitions and for the corporate work of
all our  companies.  She  graduated  in Law at USP in 1992 and holds an LLM degree from
 University  of Virginia.

Daniel  Salvador de Moraes Melo  Mr. Melo joined us in 1996 and
presently is our deputy  officer of management and  support of credit and charge  areas.
 He  graduated  in Law at USP in 1989 and has an MBA degree  from the same university.

Danilo José Soares  Kahil  Mr. Kahil joined us eight years ago to
work in the  consumer  financing  and leasing areas and is presently  our deputy  officer
for  individual  credit area.  He began his career in the financing sector in 1976 acting
in the planning,  data processing and statistics divisions,  as well as in the commercial
and investment areas of financial  institutions.  Mr. Kahil is graduated in Business
 Management at Fundação de Estudos Sociais of the State of Paraná, and has a
specialization  degree in Financing from Catholic  University of Business Management and
Economy.

Eduardo  Corsetti   Mr.  Corsetti  joined  Unibanco  in 1987 and
has  been  our  deputy  officer  since  2002, responsible  for the area of  corporate
 finance in Rio de  Janeiro.  He  graduated  in  economy  at  Mackenzie University  in
1991,  post  graduated  in  Finances  at IBMEC in 1996 and in  Business  Management  at
 Harvard Extension School in 1997.

Fernando  Otavio  Richter  Guedes  Mr.  Guedes  joined us in 1999
and holds  office as deputy  officer  in the commercial area for financing  portfolio
 products.  He has been acting in the financial  market since 1979. He graduated in
Business Management at Cândido Mendes School in 1978.

Francisco de Assis Crema  Mr. Crema is our deputy  officer
 responsible  for onlending  transactions  of BNDES funds  since 2000,  with a large
 experience  in project  finance.  Mr.  Crema  formerly  held for 20 years the position
of executive  officer of Banco Credibanco S.A. in charge of transaction and project
 financing.  He is graduated  in Economy  and  Accounting  Sciences  at  Faculdade  de
 Economia  São Luiz and is  specialized  in Finances.

Ibrahim  José  Jambour   Mr.  Jambour  joined  us in  1995  and in
 2000  became  our  deputy  officer  of the in-store-banking  unit,  responsible for
several retail banking branches located in the States of São Paulo and Paraná.
 Previously  to joining us, Mr.  Jambour  worked for Shell  Brasil S.A.  and Banco
 Nacional  S.A..  He graduated  in 1982 in  Mechanical  Engineering  at Federal
 University  of the State of Paraná and holds an MBA degree from Stanford University,
California.

Iuri Garcia  Zacharias  Mr.  Zacharias  joined Banco  Nacional S.A.
in 1987 and presently is one of our deputy officers,  responsible for the coordination of
several  branches located in the city of Rio de Janeiro.  He has 16 years of experience
in management,  budget,  planning and sales areas. He graduated in economic  sciences in
1989 at PUC of Salvador, post graduated in corporate management in 2000 at Fundação Dom
Cabral..

Janio  Francisco  Ferrugem  Gomes  Since 1999 Mr. Gomes has been
our deputy officer  responsible  for the cost control area. Mr. Gomes  initiated his
 activities in the financial  market in 1984, in the areas of credit and companies
 restructuring.  He graduated in Civil Engineering at FAAP in 1982, in Economy at PUC of São
Paulo in 1988 and holds an MBA degree from Fundação Dom Cabral.

Jorge Luis Merege  Correia  Mr.  Correia  joined us in 2001 and
since 2002 he is on of our deputy  officers of the  corporate  finance  area for the
 South  region  of  Brazil.  He has 21 years of  professional  experience acquired  in
six  different  financial  institutions,  in the  commercial  and  credit  areas.  Mr.
 Correia is graduated in Business Management and has extension course with emphasis in
corporate strategy.

Jorge  Luis  Viegas  Ramalho   Mr.  Ramalho  joined  Unibanco  in
2001,  as deputy  officer  for  systems  and electronic  channels  processes,
 responsible  for the Internet  products,  self-service  and call centers.  He initiated
his career in the financial  market in 1989 at Chase  Manhattan  Bank, and held several
 positions at other financial  institutions  before joining us. He is graduated in Data
 Processing  Technology at PUC of Rio de Janeiro and holds an MBA degree in Finances.

José Cristóvão  Martins  Mr.  Martins  joined us in 1974 and since
1997 he is our deputy  officer  responsible for the management of data  processing
 centers and  telecommunication  network.  He is graduated in Mechanical Engineering.

José  Eraldo  Raimundo  Mr.  Raimundo  joined us as our deputy
 officer and as  executive  officer of Unibanco Leasing  S.A.  Arrendamento  Mercantil.
 He has a  comprehensive  experience  in leasing  processes,  credit to consumer and
credit control. He is graduated in philosophy at FAFIGA  Faculdade de Filosofia de
Pernambuco.

José Mario  Bellesso  Mr.  Bellesso  joined us in 1993 as
 superintendent  responsible  for the  technological system  development  for us and our
 companies,  and  presently is our deputy  officer of this area.  He has 26 years of
experience in developing  technology  systems and facilities for the financial area,
 having worked at Comind,  BCN and  Banco  Bandeirantes  S.A.  He is  graduated  in
 computing  and  operational  Engineering  at Mackenzie University.

José Ramon do Amaral  Gomez  Mr.  Gomez  joined us on 1992 and has
held  several  positions,  such as regional manager for market  extension  and new
 businesses  superintendent  in the area of remote  banking,  as well as other offices at
Banco1.net.  Presently he coordinates  several branches in the city of São Paulo. Mr.
Gomez is graduated  in  Marketing  at  Alcântara  Machado  Integrated  School and holds
an MBA degree from  Fundação Dom Cabral.

Julia  Holland  Reid  Ms. Reid joined us in 1994 and since 1995 is
in charge of the Investor  Relations  area. She is a member of the management board of
the Brazilian  Institute of Investor  Relations and of the technical commission  of the
 Brazilian  Publicly  Held  Corporations  Association  (ABRASCA).  Ms. Reid is  graduated
in Economy at State College of New Jersey and holds an MBA degree from Fordham University
in New York.

Ligia Maria Stoppa da Silva  Ms. Silva joined us in 1994 as credit
 manager,  and she is presently  our credit officer,  responsible  for credit  evaluation
 and credit  control  processes for the  wholesale  banking group operations.  She began
her career in 1977 at Banco  Credifsul  S.A. and held the position of  underwriting  and
credit  manager in such bank.  Ms.  Silva  graduated  in  Business  Management  at FGV in
1978 and holds a post graduation degree in finances from the same institution.

Marcelo  Antonio  Montes  Vieira  Mr.  Vieira  joined us in 1985
and is presently  our deputy  officer for the branches  network located in the Federal
 District and in the States of Mato Grosso,  Mato Grosso do Sul, Goiás and Tocantins. He
is graduated in Business Management and external commerce at Faculdade Ítalo Brasileira.

Marcelo Ariel Rosenhek  Mr.  Rosenhek  joined us in 2000 and since
then he has been  responsible for analyzing new  businesses  and  accompanying  our
 results  and the  results of our  subsidiaries,  as well as  financial planning and
international  and domestic  treasury  control.  Presently Mr. Rosenhek is adjunct
director of the investment area, and initiated his  professional  career as assistant
 officer of Brasil Warrant  Administração de Bens e Empresas Ltda.. He graduated in Civil
 Engineering at USP Engineering  School and holds an MBA degree from Carnegie Mellon
University in 1993.

Marcelo  Felberg  From 1993 to 2000 Mr. Felberg worked in Great
Britain  representing  us and acting as one of the senior  managers of our subsidiary
 Unibanco  Securities  Ltd. He is presently our deputy officer for fixed rate
 transactions,  securities  negotiation  and other related banking  services.  Mr.
Felberg has 20 years of experience in the national and international  capital market and
corporate  finance areas,  working for several institutions  such as HSBC Markets
 Limited,  Midland  Bank,  Bank of America and Chase  Manhattan  Bank. He is graduated in
economy at PUC of Rio de Janeiro and has attended to an extension  course in corporate
 finance at London Business School.

Marcelo  Luis  Orticelli   Mr.  Orticelli  has been  working  with
us for 15 years,  developing  planning  and controlling  activities as well as human
 resources  improvement  programs,  and presently is deputy officer of our human
 resources  area.  He is  graduated  in  Business  Management  at PUC of São Paulo and
holds a master degree from FGV in cooperation with University of Texas.

Marcelo  Tonhazolo  Mr.  Tonhazolo  joined us in 2000 and is
presently  deputy officer for our  communications channels and is responsible for
Internet,  call center,  telemarketing and self-services areas. He graduated in
Mathematics at USP in 1988.

Marcia Klinke dos Santos   Ms. Santos joined the Legal  Department
of Unibanco in 1991 and currently  heads the Legal  Compliance  Department of the Bank,
 holding the position of deputy  officer in charge of the Anti-Money Laundering  Program
of Unibanco  Conglomerate,  including  the  drafting  and  implementation  of policies
 and procedures  aimed at the prevention of financial  crimes and terrorism  financing
and the  coordination  of the Compliance  Committee.  Ms. Santos is also in charge of the
 Environmental  Management  System of the Bank with respect to  financing  facilities
 provided by Unibanco to its  corporate  clients  either  directly or through onlending
of resources  provided by  international  multilateral  agencies / international  Banks.
She was also responsible  for  putting  together  the  Ethics  Institutional  Manual  of
 Unibanco  and is in  charge of the coordination  of the Ethics  CommitteeMs  Santos
holds a law degree from the University of São Paulo Law School as well as a Masters  degree
in Comparative  Law from the  University of Miami Law School,  which was preceded by a
Masters Course in Corporate Law at the University of Manitoba School of Law (Winnipeg).

Marciana  Emilia Barbosa  Ms. Barbosa  joined us in 1983 and
presently is our deputy officer  responsible  for corporate  finance  transactions  in
Minas Gerais and Espírito  Santo  States,  center-west  region and part of north and
north-east regions of Brazil.  She gathered large experience in credit,  financing and
charging areas of financial institution and is graduated in Law.

Marcos  Eduardo  Buckton  de Almeida  Mr.  Almeida  joined us in
1995 as  officer  responsible  for the branch network. Since 2001 Mr. Almeida is our
deputy officer responsible for funds,  deposits,  savings as well as for the  development
of new products,  training,  communication,  marketing and investment  research.  From
2000 to 2001 Mr. Almeida was responsible for the management of internet banking,
 products,  marketing and quality.  He is graduated in Mechanical Engineering at
Instituto Militar de Engenharia in 1983.

Maria Celia Furlani de Mendonça  Camargo  Ms.  Camargo has been
occupying  management  positions for 12 years, and presently Ms. Camargo is one of our
officers,  responsible  for several  branches  located in the north and north-east
 regions of Brazil.  She has 27 years of experience in the banking area, 10 of which were
 dedicated to management of clients portfolios of the retail,  corporate and private
banking.  Ms. Camargo is graduated in accounting sciences and in Law and holds an MBA in
management of banking business.

Maria  Elieni  Dalvi  Ms.  Dalvi  initiated  her  career  in 1987
at  Banco  Nacional,  and has  held  several positions  in the  branches  network.  Since
 2002  she is one of our  deputy  officers,  responsible  for  the coordination  of
several  branches  located in the  capital  and in the  countryside  of the States of Espírito
Santo,  Rio de Janeiro and Minas  Gerais.  Ms.  Dalvi is graduated in  accounting
 sciences at Superior  Social Sciences Center of Vila Velha,  and holds an MBA degree in
finances from Brazilian  Institute of Capital Market  IBMEC, Rio de Janeiro, and in
corporate management from Fundação Dom Cabral.

Maria Luisa Ribeiro Mendes  Ms. Mendes joined us in 1997 as
 superintendent  of human resources area and since 2002 is our deputy officer for person
 planning and marketing for the wholesale  banking  group.  She initiated her career in
1991, as manager of strategic  plans for human  resources  activities  of Shell Brasil
S.A..  Ms. Mendes is graduated in psychology at Federal University of Rio de Janeiro.

Martin  Iperus  Ruyter  Hercules   Mr.  Hercules  joined  us in
 2001  and  presently  is our  deputy  officer responsible  for the  relationship  with
 Germany  companies  investing  in  Brazil.  He began  his  career  at Commerzbank  AG in
Germany  (Frankfurt),  Singapore  and India  (Bombay).  He has also  occupied  positions
 of manager of international  banks in the Middle East, credit analyst and officer for
 multinational  companies in Indonesia. Mr. Hercules is graduated in process Engineering
at Stuttgart University.

Max Marcelo  Mustrangi  Mr. Mustrangi joined us in 2003 and is the
officer  responsible for the costs planning area.  Before  joining  us,  he has  worked
 at  Procter  &  Gamble  for 8 years  and was  responsible  for the manufacture  and
supply chain areas.  He also worked at Natura during the year of 1998,  where was
 responsible for the  logistic  and  material  planning.  Mr.  Mustrangi  is  graduated
 in  production  Engineering  at USP Polytechnic  School,  with an extension degree in
Executive  Education from Kellogg School of the University of Northwestern. Presently, he
is to obtain an MBA degree from University of Michigan Business School.

Nicolas Alfredo  Wsevolojskoy  Mr.  Wsevolojskoy  began his career
in 1996 at Banco1.Net,  in the products and projects area. He participated in the
 implementation  of Internet  banking for individual  clients and, as our deputy
 officer,  coordinates  the creation of our email channel and the  development  of
Internet  banking for companies. Mr. Wsevolojskoy is graduated in Business Management at
FGV, and holds an MBA degree from MIT.

Raquel  Breidenbach  Langhanz   Ms.  Langhanz  joined  us in 1993
 as  accounts  manager  and  branch  network superintendent.  She is our deputy  officer
 since 2002,  and is in charge of several  branches  located in the countryside of the
States of São Paulo,  Minas Gerais and Goiás. She is graduated in social  communication
with specialization  in public relations at Universidade do Vale do Rio dos Sinos  USINOS,
 holds a post graduation degree in finances from PUC of the State of Rio Grande do Sul
and an MBA degree from Fundação Dom Cabral.

Ricardo dos Santos  Andrade  Mr.  Andrade  joined our legal
 department  in 1980 and is  presently  our deputy officer of the litigation  legal
 department and is in charge of our labor,  corporate and retail banking group
lawsuits.Mr. Andrade is graduated in Law at PUC of São Paulo.

Rogerio  Cláudio  Bacelar  Scofano   Mr.  Scofano  joined  us in
1989 and  participated  in the  creation  and implementation  of our  private  bank.  On
 February  1998 he became our  deputy  officer  responsible  for the institutional
 relationship  area,  which  represents  us  before  governmental  authorities.  Mr.
 Scofano  is graduated in Electric  Engineering at Federal University of Rio de Janeiro,
 holds an MBA degree from COPPEAD Federal  University  of Rio de Janeiro and a post
 graduation  degree in finances,  as  complementation  of the master degree from New York
University.

Tomas Tuppy  Mr.  Tuppy  joined us as manager of system
 development  in 1993 and has been our deputy  officer since 2002,  responsible  for
 information  technology  area. He has 20 years of experience in the  information
technology  area,  11 of which at  Rodhia  S.A.  Mr.  Tuppy is  graduated  in  Mechanical
 Engineering  at MauáEngineering  School,  is  specialized  in Business  Management at
FGV in São Paulo and holds an MBA degree from USP Business Management Institute
Foundation.

Each director is elected for a one-year term and may be reelected  upon
 expiration of his term. A director may not be reelected  after his  sixty-sixth
 birthday,  unless agreed by the Board of Directors.  The terms of the present members of
the Board of Directors expire on April 28, 2004.

At the Board of Directors  Meeting held on April 28, 2003,  the
Board  approved the  extension of the age limit in  relation  to Mr.  Gabriel  Jorge
 Ferreira,  who shall  remain on the Board  until the  appointment  of new directors at
the Shareholders Meeting to be held in April, 2004.

Members of the Board of Executive  Officers are elected for one-year
term and may be reelected upon  expiration of their terms.  An officer may not be
reelected  after his sixtieth  birthday,  unless this is approved by the Board of
Directors.  All current  members of the Board of Officers have been elected for a term
that expires on April 28, 2004.

Unibanco Holdings

Unibanco Holdings is managed by its:

- Board of Directors (Conselho de Administração), consisting of
nine directors; and
- Board of Officers (Diretoria), consisting of three officers.

The Board of Directors is Unibanco  Holdings  decision-making  body.
 It  determines  Unibanco  Holdings  basic guidelines and policies by:

| | establishing its corporate strategy;                                
|- | --------------------------------------------------------------------
| | reviewing its business plans; and                                   
| | supervising and monitoring the activities of its executive officers.

The Board of  Officers  is  elected  by the Board of  Directors,
 and is  responsible  for the  management  and supervision  of  Unibanco  Holdings
 corporate  activities.  It follows  and ensures  compliance  with  general guidelines
and policies established by the General Shareholders  Meetings,  the Board of Directors
and Unibanco Holdings  By-Laws.  The members of the Board of Officers have the exclusive
power to act on behalf of Unibanco Holdings pursuant to its by-laws.

As of the date of this annual report, the directors and officers of
Unibanco Holdings are:

|Directors                       | Position      | Date of Birth   
|------------------------------- | ------------- | ----------------
|Pedro Moreira Salles            | Vice Chairman | October 20, 1959
|Roberto Konder Bornhausen       | Chairman      | October 22, 1933
|Israel Vainboim                 | Director      | June 01, 1944   
|Tomas Tomislav Antonin Zinner   | Director      | January 29, 1938
|Gabriel Jorge Ferreira          | Director      | July 13, 1956   
|Arno Noellemburg                | Director      | July 11, 1943   
|Koji Yamada                     | Director      | October 28, 1952
|Guilherme Affonso Ferreira      | Director      | May 09, 1951    
|Carlos Alberto de Oliveira Cruz | Director      | July 13, 1940   

|Executive Officers          | Position            | Date of Birth    
|--------------------------- | ------------------- | -----------------
|Israel Vainboim             | Executive President | June 01, 1944    
|Geraldo Travaglia Filho     | Officer             | May 26, 1951     
|José Lucas Ferreira de Melo | Officer             | December 30, 1956

Each director is elected for a one-year  term and may be reelected
 upon  expiration of his term.  The terms of the present directors of Unibanco Holdings
expire on April, 2004.

The members of the Board of Officers of Unibanco  Holdings are
elected for a one-year  term.  The last Unibanco Holdings  shareholders  meeting  was
held on April  28,  2003 and all  members  of the  Board of  Officers  of Unibanco
Holdings were elected for a term that expires on April 28, 2004.

The  biographies  of those  directors  and  officers of Unibanco
 Holdings  who are not members of our Board of Directors or our Board of Officers are
summarized below:

Directors

Roberto Konder  Bornhausen  Mr.  Bornhausen  had been Chairman of
the Board of Directors of Unibanco  Holdings from  February 4, 1997 to April 28,  2003,
 having  served as Chairman of our Board of  Directors  from 1991 to 1996 and as a member
of our Board of  Executive  Officers  since 1973.  Mr.  Bornhausen  graduated in
Agronomic Engeneering from Rural University of Rio de Janeiro.

Arno Noellemburg  Mr.  Noellemburg has served as a director of
Unibanco  Holdings since February 17, 1995. Mr. Noellemburg studied at Soederblom
Gymnasium in Espelmkamp-Mittwald, Germany.

Guilherme  Affonso  Ferreira  Mr.  Ferreira has been a director of
Unibanco  Holdings since December 14, 1994. Mr.  Ferreira  also served as investment
 analyst in Banco  Noroeste,  and as president of several  copanies of Bahema Group. Mr.
Ferreira  graduated in Production  Engeneering  from Politechnic  School of University of
São Paulo and has a post graduation degree in Economics and Politics from Macalester
College, in Minneapolis.

Carlos  Alberto de Oliveira Cruz  Mr. Cruz has been a director of
Unibanco  Holdings  since December 28, 2000. Mr. Cruz also serves in Portugal as
 Vice-Chairman  of Caixa Geral de Depósitos  S.A.,  Vice-Chairman  of Caixa Banco de
Investimentos  S.A. and Chairman for the Specialized  Credit Area of Caixa Geral de Depósitos
Holdings S.A.

Compensation

Unibanco

Compensation of Directors and Officers

At the annual shareholders
meeting, our shareholders  establish the maximum aggregate  compensation of our directors
and executive  officers for the corresponding  year. In 2002, the maximum aggregate
 compensation for our Board of Directors and Board of Executive Officers was:

- R$800,000 per month for our directors as a group; and
- R$2,500,000 per month for our executive officers as a group.

For the year ended
 December  31,  2002,  all our  directors  and  executive  officers  as a group (23
persons  as of such  date)  actually  received,  for  services  provided  in all
 capacities  to us,  aggregate compensation  of  R$14.9  million.  The  directors  and
 executive  officers  of all our  companies,  including Unibanco,  received,  for
services provided in all capacities,  an aggregate compensation of R$26.2 million for the
year ended December 31, 2002.

For 2003,  the  maximum
 aggregate  compensation  for our Board of  Directors  and Board of  Executive Officers
shall be:

- R$800,000 per month for our directors as a group; and
- R$3,500,000 per month for our executive officers as a group.

Our directors  and
executive  officers may  participate  in the same pension plan  available to all of our
employees.  The total amount paid to provide  pension,  retirement and similar  benefits
for the year ended December 31, 2002 was R$3.4 million for all of our companies employees.

Directors and Officers Stock Option Plan

On October 31, 2001,  our
 shareholders  approved a stock option plan.  Through this stock option plan we are able
to offer to our managers the  opportunity to  participate in our capital,  allowing them
to benefit from increases in the value of our stock.

The stock  options  were
 granted to select  managers  for a price  based on the  market  price of our shares at
the date of grant. A special  committee was created to be  responsible  for managing the
stock option plan. Such committee is responsible for  establishing  the vesting period of
the stock options,  which shall be between  two  and  five  years,  as  well  as  other
 specific  characteristics  of  each  grant,  such  as the beneficiaries  and the  number
 and  amount  of  options.  This  committee  may not grant  options  in any year
representing  more  than  1% of  our  total  authorized  capital  and  there  may  not be
 outstanding  options representing, in the aggregate, more than 10% of our total
authorized capital.

The  objective of the
stock option plan is to foster high  performance,  long-term  commitment as well as
attract,  retain and motivate our  directors  and  officers.  As of March 31, 2003,
 684,850,000  Units were granted to 207 officers in form of option,  under the stock
option plan.  For the year ended December 31, 2002, we recognized as expenses related to
the stock option plan to elegible  participants,  including  directors and officers, the
aggregate compensation amount of R$9 million.

Unibanco Holdings

At the annual
 shareholders  meeting,  the shareholders of Unibanco  Holdings  established the maximum
aggregate compensation of directors and executive officers.

In 2002, the maximum
 aggregate  compensation  for Unibanco  Holdings Board of Directors and Board of
Executive Officer was:

- R$25,000 per month for the members of the Board of Directors of
Unibanco Holdings as a group; and
- R$75,000 per month for the members of the Board of Executive
Officers of Unibanco Holdings as a group.

In 2002,  all our
 directors  and  executive  officers as a group (13 persons as of December 31, 2002)
actually  received,  for  services in all  capacities  to Unibanco  Holdings,  aggregate
 compensation  of R$36 thousand. This amount also includes profitability related
discretionary bonuses.

For 2003, the maximum
 aggregate  compensation for Unibanco  Holdings Board of Directors and Board of
Executive Officers shall be:

- R$25,000,000 per month for the members of the Board of
Directors of Unibanco Holdings as a group; and
- R$75,000,000  per month for the members of the Board of
Executive  Officers of Unibanco  Holdings as a               group.

Affiliates and Subsidiaries

Unibanco Asset Management  Banco de Investimento S.A.

On August 26, 2002,
 Unibanco  Asset  Management  stock  purchase plan was cancelled and all preferred shares
held by executive officers and members of management under such plan were purchased by us.

Cartão Unibanco Ltda./Banco Credibanco S.A.

After the merger of Cartão
 Unibanco  into  Credibanco in April,  2001,  Cartão  Unibanco  quotas were substituted
by Credibanco  shares and consequently,  Cartão Unibancos stock purchase plan became
 Credibancos stock purchase plan.

On March 14, 2003
 Credibancos  stock  purchase  plan was  cancelled and all shares held by executive
officers and members of management under such plan were purchased by us.

BWU Vídeo Ltda.

As of December 31, 2002,
 executive  officers,  members of management of BWU Vídeo Ltda.  and Unibanco Representação
 e  Participações  Ltda. as fiduciary  agent of the quotas owned by some  directors
 collectively owned  approximately 0.35% of its quotas,  under a stock option plan.
 According to such stock option plan, the Board of Directors of BWU Vídeo Ltda.  may
grant to executive  officers and members of management the option to purchase up to
3.982% of the quotas issued by BWU Vídeo Ltda.

BOARD PRACTICES

The  information  set
forth in item 6.  Directors,  Senior  Management  and  Employees  Directors and Senior
Management is incorporated into this section by reference.

Our Directors and Senior
 Management have not entered into any service  contract with us or any of our
subsidiaries providing for benefits upon termination of employment.

Audit and Remunuration
Committees are not part of our corporate structure.

Employees

As of December 31, 2002,  Unibanco  and its  subsidiaries  had
26,739  employees, compared to 29,704 at December 31, 2001.  The reduction in the
number of employees was due to the restructuring within Fininvest.

As of May 31, 2002, the number of employees had decreased to 26,437.

|Area                      | Number of Employees
|------------------------- | -------------------
|Retail Branches           | 10,763             
|Corporate-Site Branches   | 1,038              
|Credit Card               | 636                
|Wholesale                 | 1,538              
|Insurance                 | 1,423              
|Unibanco Asset Management | 163                
|Banco 1.net               | 246                
|Banco Dibens              | 90                 
|Fininvest                 | 8,306              
|Others                    | 2,261              
|                          |                    
|Total                     | 26,437             
|                          |                    

The following table sets forth the number of Unibanco employees
grouped by title and region:

|Title          | Number of Employees | Region          | Number of Employees
|-------------- | ------------------- | --------------- | -------------------
|Director       | 166                 | North           | 120                
|Superintendent | 353                 | Northeast       | 1,609              
|Manager        | 2,004               | Center-East     | 749                
|Others(1)      | 23,914              | Southeast       | 21,497             
|               |                     | South           | 2,213              
|Total          | 26,437              | Foreign Offices | 249                
|               |                     |                 |                    
|               |                     | Total           | 26,437             
|               |                     |                 |                    

(1) Includes employees in foreign offices.

Approximately  40% of our  workforce  are members of a union.  We
believe that we have good  relations  with our  employees  and their unions.  Collective
 bargaining  agreements  with the unions  typically  have 12-month terms and are subject
to renewal in September of each year.

Attracting,  nurturing the  development  of skills and retaining
 talent are among  Unibancos  pre-eminent  strategic  objectives,  as formally
 incorporated in 2000 to the banks Balanced Scorecard process,  internally called PDG
(Painel de Gestão).  Unibanco People is committed to promote professional  growth,
 aligning the individual goals of its human talents and the banks strategic objectives
as a source of sustainable result leverage for the group.

Since  April  1996,  we have had a  profit  sharing  compensation
 plan for our  entire  workforce,  based  upon  predetermined  annual operational and
financial  performance  targets.  The Programa de Participação nos Resultados (Profit
sharing program) became even more attractive  and  aggressive  with  Unibancos
 alignment  with the PDG  taking  results of both the  company and the  individual  into
account. The entire work force is eligible to participate in this program.

Unibanco  offers its  outstanding  senior  managers the  opportunity
to become  shareholders.  Stock Option Program awards  exceptional performance and
contribution to the groups  development.  Up to December 31, 2002,  Unibanco granted
669,700,000 stock options, in the form of Unit. The term of the exercise is between
 January 21, 2005 and November 20, 2008, at an average  exercise price of R$91.18 per
1,000 stock options.

Unibanco also offers a Pension Fund Program to all employees.
 Participants  sponsor a PGBL, Plano Gerador de Benefícios  Livres. As of December 31,
2002, around 7,350 people had joined the program.

During 2000, we implemented several suggestions that arose from
employee  satisfaction  surveys, and instituted the Personnel Strategic Planning
 methodology,  a set of evaluation tools that allows  management to monitor the profile,
 career  development and potential of our  employees.  Our Portas  Abertas or Open
Doors  program allows  employees to have direct  contact with senior  management,  in
order to discuss ideas for development, improvement and motivation.

We also  emphasise  employee  training.  In 2002,  Unibanco
 directed  R$28.3  million to various  initiatives  intended to promote the acquisition
of technical and behavioral skills  ranging from specific programs to MBA courses in
Brazil and abroad.

At the postgraduate  levels, in 1999, we began our UBB Master
program in conjunction with the Dom Cabral  Foundation,  an executive MBA program
 tailor-made for our employees.  During the last four years, 140 executives have attended
this course.  MBA programs abroad are another  highlight  of our  commitment  to
 high-quality  training.  Candidates  selected by Unibanco  executives  undergo a
meticulous selection  process.  The program is focused on management  level  candidates
 and offers full 100%  sponsorship  in MBAs at the 10 best business  schools.  Since
1996, 28  professionals  have been sponsored in schools such as Wharton,  Kellogg,  MIT,
 Stanford,  Chicago, Michigan, and the London Business School. In 2002, total investment
in the program reached R$2.5 million.

Unibanco  conducts an institutional  award program to encourage and
recognize  employee  performance.  The highest honor is the Walther Moreira Salles Award,
 which  identifies and promotes five  categories of exceptional  projects and ideas
 presented by individuals and teams:  Innovation,  Integration/Teamwork,  Service
Excellence,  and Talent Management and Exchange. The third annual awarding received 164
submissions,  selected 24 finalists and chose five winners and two special achievement
nominees.  Each winning team was awarded 200 lots of shares (UBBR11).

Unibanco has been undertaking an Employee  Satisfaction Survey since
1997, conducted by external  consultants.  It has proven essential to assess the
 organizational  climate,  identifying areas in need of improvements and taking the
required actions to provide employees with concrete solutions, fostering a healthy
working environment that supports personal development.

SHARE OWNERSHIP

Equity Ownership of Directors and Officers

As of May 31, 2003,  apart from their direct  ownership  of our
capital  stock,  the members of our board of directors,  executive  officers and members
of our management also held indirectly  approximately  1.689% of our capital,  under a
stock  purchase plan which is sponsored  exclusively by E. Johnston  Representações  e
Participações S.A., or E. Johnston,  a company controlled by the Moreira Salles family.
 Under this plan, E. Johnston issues its preferred  shares to participants  who pay for
such shares with the dividends  received. The shares held under the plan will be
 repurchased  by E.  Johnston  upon  retirement,  death or  permanent incapacity of the
participants or upon the participants leaving Unibanco.

E. Johnston  preferred  shares have no voting rights,  but entitle
their owners to receive any  distribution made by us in proportion  to their  indirect
 ownership of our capital,  as well as to obtain any gains from the sale of the shares
provided certain conditions are met.

Since the  implementation  of our new directors and officers  stock
option plan in 2002, we no longer sell shares under the E. Johnston purchase plan.

ITEM 7.                            MAJOR SHAREHOLDERS AND RELATED
PARTY TRANSACTIONS

Major Shareholders

Unibanco

Each of our common  shares
 entitles  its  holder to one vote at any  shareholders  meeting.  Unibanco Holdings
controls us through its ownership of common shares representing 96.59% of our voting
interest.

The following table shows
the beneficial  ownership of our outstanding  common and preferred shares as of March 31,
 2003. We believe that only those  shareholders  mentioned in the table below hold more
than 5% of either class of our shares.

|                               | Unibanco Common Shares | Unibanco Preferred Shares
|------------------------------ | ---------------------- | -------------------------
|                               |                        |                          
|Shareholder                    | Number                 | % of Total               
|                               |                        |                          
|Unibanco Holdings              | 72,995,091,491         | 96.6                     
|                              
|Caixa Geral de Depósitos       | 364,157,814            | 0.5                      
|Commerzbank AG                 | 0                      |                         
|Mizuho Corporate Bank, Ltd.(2) | 0                      |                         
|Float(3)                       | 2,209,483,384          | 2.9                      
|Our Directors and Executive    | 11,660                 |                         
|Officers as a group           
|Treasury                       |                       |                         
|                               |                        |                          
|Total                          | 75,568,744,349         | 100.0                    
|                               |                        |                          

|(1) | Due to the merger of The Dai-Ichi Kangyo Bank Ltd., Fuji Bank and Industrial Bank of Japan into the Mizuho Financial Group.
|--- | ---------------------------------------------------------------------------------------------------------------------------
|(2) | Consisting of our floating shares in the market.                                                                           

Unibanco Holdings

Each of  Unibanco  Holdings  common
 shares  entitles  its  holder  to one  vote at any  shareholders meeting.  E. Johnston
 Representação e Participações  S.A. or E.J.S.A.  controls  Unibanco Holdings through its
ownership of common shares representing 66.72% of its voting interest.

As a result of the
 acquisition  of  Bandeirantes,  Caixa Geral de Depósitos,  through its  subsidiary Caixa
Brasil SGPS, S.A.  acquired an equity  participation in Unibanco  Holdings of 10.00% of
its common shares and 15.67% of its class B preferred shares (this  percentage  refers to
the sum of class B preferred shares and units). This participation,  together with its
direct  participation in our voting and non-voting capital shown in the table  above,
 results in a total  direct and  indirect  participation  of Caixa Geral de  Depósitos
 in 12.25% of our total  capital.  This is the only  significant  change in the
 ownership  of  Unibanco  Holdingsshares and our shares during the past three years.

The  following  table sets
forth the names of the  shareholders  that we know  beneficially  own 5% or more of
 outstanding  Unibanco  Holdings  common or  preferred  shares as of March 31,  2003 and
the number of Unibanco Holdings common and preferred shares owned by each such
shareholder.

|                               | Unibanco Holdings Common Shares
|------------------------------ | -------------------------------
|Shareholder                    | Number of Shares               
|                               |                                
|E. Johnston Rep. E Part, S.A   | 24,777,810,577                 
|Caixa Brasil SGPS, S.A         | 3,713,843,587                  
|Commerzbank AG                 | 3,335,935,602                  
|Mizuho Corporate Bank, Ltd.(1) | 2,287,912,752                  
|Bahema Participações S.A.(2)   | 1,426,891,332                  
|Sul America Group              | 616,522,004                    
|Instituto Unibanco             | 949,520,000                    
|                               |                                
|Others                         | 30,000,019                     
|                               |                                
|Total                          | 37,138,435,873                 
|                               |                                

|(1) | Due to the merger of The  Dai-Ichi  Kangyo  Bank
 Ltd.,  Fuji Bank and  Industrial  Bank of Japan into the Mizuho Financial Group.    
|--- | --------------------------------------------------------------------------------------------------------------------------------------
|(2) | 30,000,000 shares are in the  custody of Câmara Brasileira de
Liquidação e Custódia - CBLC (São Palo Stock Exchange's Clearing House).

|                               | Unibanco Holdings Preferred Shares
|------------------------------ | ----------------------------------
|
|                               |                                   
|E. Johnston Rep. E Part, S.A   |                                   
|Caixa Brasil SGPS, S.A         |                                   
|Commerzbank AG                 | 3,843,541,338                     
|Mizuho Corporate Bank Ltd.M(1) |                                   
|Bahema Alimentos e Part, Ltda  |                                   
|Sul America Group              |                                   
|Instituto Unibanco             |                                   
|Units                          |                                   
|Other                          |                                   
|                               |                                   
|                              
|                               |                                   
|                              
|                               |                                   
|Total                          | 3,843,541,338                     
|                               |                                   

|(1) | Due to the merger of The Dai-Ichi
Kangyo Bank Ltd., Fuji Bank and Industrial Bank of Japan into the Mizuho Financial Group.
|--- | ---------------------------------------------------------------------------------------------------------------------------

We estimate,  based on the  information  received by the Depositary,
 that 51,839,872 of our Global  Depositary Shares are held by approximately  4,450
beneficial owners and 143 record  (registered)  holders,  as of May 30, 2003.  Each of
our  Global  Depositary  Shares  represents  500 Units,  each Unit  consisting  of one
 Unibanco preferred  share and one  Unibanco  Holdings  class B  preferred  share.
 Therefore,  41.8% of our  outstanding preferred  shares and 57.9% of Unibanco  Holdings  outstanding
 class B preferred  share are held in the United States in the form of Global
Depositary Shares.

Related Party Transactions

Certain Relationships and Related Party Transactions

We summarize below all
material  transactions known to us between ourselves,  Unibanco Holdings or any of our
subsidiaries  and any of our directors,  statutory  officers or shareholders  which hold
more than 5% of any of our or Unibanco  Holdings  classes of shares,  or the family
 members of such  directors,  officers and shareholders.

Under Brazilian law,
financial  institutions may not grant loans or advances to affiliates,  statutory
officers,  directors  or their  family  members.  Therefore,  we have not made any loans
or  advances to any of those persons.  For this purpose,  affiliates  include companies
in which a financial  institution holds 10% or more of the  capital  stock  or  which
 hold  10% or more of a  financial  institutions  capital  stock.  This prohibition is
not applicable to Unibanco Holdings nor to any of our non-financial subsidiaries.

Distribution of Financial Products

Certain of our
 subsidiaries,  such as Unibanco  AIG Seguros  S.A.,  Unibanco  AIG  Previdência  S.A.,
Unibanco  Companhia de  Capitalização  S.A. and  Unibanco-Rodobens  Administradora  de
Consórcios  Ltda.,  have entered into  Distribution  Agreements  with us.  These
 agreements  govern the use of our branch  network as a distribution channel for
insurance products, pension plans, consortium quotas and other products.

Banco1.net,  an alliance
between  PT-Multimedia.com  and us to establish a bank and Internet financial portal in
Brazil,  entered  into a Services  Agreement  with us in  November  2001,  relating to
the use of our operational  structure and services by  Banco1.net.  We and our
 subsidiaries  have the right of first refusal, under market conditions, to distribute
our products through the Banco1.net Internet portal.

Loans

Mizuho  Corporate Bank
Ltd.,  Commerzbank and Caixa Geral de Depósitos,  financial  institutions  that are our
strategic  shareholders,  have, from time to time,  extended  trade-related  and general
purpose credit lines with us mainly for onlending  purposes.  On December 31, 2002, the
total amount  outstanding  under those credit lines was approximately R$1.364 million.

We believe that such loans
were made in the ordinary  course of business,  on  substantially  the same terms,
 including interest rates and collateral,  if applicable,  as those prevailing at the
time in the market for comparable transactions and did not involve more than the normal
risk of collectibility.

ITEM 8. FINANCIAL INFORMATION

Consolidated Statements and Other Financial Information

See Item 19

Legal Proceedings

We are a party to lawsuits
 and  administrative  proceedings  incidental  to the normal  course of our business.  We
believe that any potential  liabilities related to these lawsuits and administrative
 proceedings will not have a material  adverse  effect on our financial  condition or
results.  As of December 31, 2002, the total  contingency  with respect to civil lawsuits
 filed against us for which  Unibanco is potentially  liable was  R$256  million.  In
 addition,   we  are  party  to  (a) some  individual  law  suits  filed  by  minority
shareholders,  related to equity losses arising from corporate reorganizations
 associated with acquisitions of Brazilian  financial  institutions  by Unibanco;  and
 (b) together  with  certain  other  Brazilian  financial institutions,  to several class
actions relating to past (i) economic plans of the Brazilian  government;  (ii) the
 application  of compound  interest  rates by us for  periods  less than one year in our
 operations;  (iii) losses related to lease contracts  involving foreign exchange
 variations;  and (iv) the  constitutionality  of the law  establishing  a special
 credit  facility to financial  institutions,  known as PROER.  The lawsuits mentioned
 above  may  represent  in the  future  a  contingency  for us.  Nevertheless,  we have
 not made any provisions in respect of these lawsuits  because we cannot  predict the
amount  involved or the outcome of such actions.

Claims Related to Banco Nacional

Citizens  Action.  A
citizens  action (ação popular)  against Banco  Nacional,  the Central Bank and Unibanco
 claims  that the loans  granted  to Banco  Nacional  by the  Central  Bank  defrauded
 the  Brazilian treasury.  The  citizens  action seeks a judgment  declaring  all loans
to be null and void and  demanding the repayment  of the  amounts  disbursed  by the
 Brazilian  Treasury.  In June  1997,  the lower  court  of  appeal dismissed us from the
lawsuit.  The citizens  representatives  have filed appeals on various grounds with both
the Superior Court of Justice and the Federal Supreme Court.  These appeals are still to
be decided.

The press  released
 that former  controllers  of Banco  Nacional  S.A.  had filed  suits  against Central
Bank and Unibanco in connection  with the sale of assets and  liabilities  of Banco
 Nacional.  We have not  received  the service of process yet.  Considering  that we do
not know the content of those  lawsuits and that,  according  to the  news,  with
 respect  to the  merit,  those  lawsuits  shall  not  succeed  since the acquisition  of
 assets  and  assumption  of  operational  liabilities  of Banco  Nacional  by us
 occurred  in accordance  with  PROER,  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, we have not made any
provisions in respect of these lawsuits.

Attachment  Proceeding.
 Several  creditors  have filed claims  against  Banco  Nacional in connection with
events that  occurred  before we acquired  certain of its assets and  liabilities.  The
 creditors  allege that we should be held  responsible for Banco  Nacionals  actions,
 either because we are a successor of Banco Nacional in its civil and  commercial
 liabilities,  or because the transfer of Banco  Nacionals  assets to us was effected
when Banco Nacional was insolvent, and therefore the transfers defrauded the creditors.

The majority of the claims
in connection  with Banco  Nacional have been resolved in our favor.  As of December 31,
2002,  the remaining  claims  amounted to R$2 million.  We have  guaranteed  these claims
with our own funds. We consider the remaining  claims to be in the normal course of our
business and  consequently  have not made any provision for them.

Litigation Arising from Previous Government Economic Plans

Several of our clients,
 consumer  associations and those of other Brazilian banks have filed lawsuits against us
and other banks alleging that the amount they received upon  withdrawal of certain
 deposits did not include  the full  restatement  for  inflation  during the period in
which they  invested  their  money.  These disputes have arisen in connection  with
 anti-inflationary  plans  implemented by the government in 1989, 1990 and 1991.  The
Superior  Court of Justice has decided  disputes  arising from the  governments
 economic plans implemented  in 1990 and 1991 in favor of the banks,  and the  disputes
 arising from the plan  implemented  in 1989 against the banks.

We lost one of the
lawsuits  filed  against us in  connection  with the plan  implemented  in 1989 and have
 provisioned  for it. An adverse  decision in all of the lawsuits filed against us in
connection with this plan could mean that we have to pay  approximately  R$10.5 million.
 This adverse decision could form the basis of similar suits by our other clients.

Tax Litigation

We are involved in several
tax disputes,  including those relating to the  constitutional  validity of certain
 taxes.  As of December 31, 2002, we have  provisioned  R$756  million with respect to
tax  litigation. As part of its general  review of our banking  operations  relating to
fiscal year 2000,  the Central  Bank has requested  that we  establish a reserve
 relating to one of our pending tax  disputes.  Due to our  expectation that  we will
 achieve  a  favorable  outcome  in this  dispute,  we do not  believe  that  such a
 reserve  is appropriate  and continue to discuss  this matter with the Central  Bank.
 We believe  that we have  adequately provisioned  for our pending tax  disputes,  and we
believe that an  unfavorable  outcome in some or all of the pending tax disputes to which
we are party would not have a material adverse effect on our business.

Employee Litigation

Labour unions and former
 employees filed several  lawsuits  against us to seek  compensation for labor rights.  We
cannot assure that we will win these  lawsuits.  We usually enter into  settlement
 agreements with our former  employees.  During  2002,  we spent R$43  million in
 settlements  with former  employees  and with payments imposed by the labor courts.

After our  acquisition  of
 certain of Banco  Nacionals  assets and  liabilities,  several  dismissed employees  of
Banco  Nacional  have filed  labor-related  lawsuits  against  Unibanco.  Although  some
 similar lawsuits can still be filed against Unibanco,  Banco Nacional is obliged to
reimburse  Unibanco for any amounts for which Banco Nacional is responsible under such
lawsuits.

Based on the  average
 amount  of  settlements  and  court-imposed  payments  during  the  immediately
preceding 3 years, we have  provisioned  R$441 million with respect to all  labor-related
 lawsuits against us, including with respect to employees of Banco Bandeirantes and its
subsidiaries.

In addition,  several
 employees of Banco  Nacional who were  dismissed  prior to our  acquisition  of certain
of its assets and  liabilities  filed lawsuits  against Banco  Nacional.  Banco Nacional
is responsible for  these  lawsuits.  In some of these  cases,  plaintiffs  have  made
 attachments  to our  assets.  We filed third-party  motions against these  attachments
in which the court of appeal decided in favor of the plaintiffs in some of these motions.

Claims Related to Banco Bandeirantes

Minority  Shareholders  Claims.
 Certain former  minority  shareholders  of Banco  Bandeirantes  have initiated  or
 threatened  to  initiate  lawsuits  against  one or more of Banco  Bandeirantes,  Caixa
Geral de Depósitos  as  the  former  controlling  shareholder  of  Banco  Bandeirantes
 and  Unibanco.   Certain  former shareholders  of Banorte (a bank acquired by Banco
 Bandeirantes  before we acquired Banco  Bandeirantes)  have also initiated  lawsuits
against Banco  Bandeirantes and Banorte,  seeking the nullification of the acquisition of
Banorte by Banco Bandeirantes, which was duly approved by the Central Bank.

On December  17,  2002,  a
judge of the 10th Civil Court of Recife,  State of  Pernambuco,  decided in favor of the
 plaintiffs  and  declared  that the  acquisition  of Banorte by Banco  Bandeirantes  was
null and void.  However,  the  decision is not yet in effect,  and both Banorte and Banco
 Bandeirantes  will appeal and pursue any other legal  remedies they deem fit in order to
reverse the  unfavorable  outcome.  The Central Bank entered into the proceeding
 defending the legal validity and  effectiveness of its approval to the acquisition of
Banorte by Banco Bandeirantes.  As of the present date, Central Banks motion has not
been decided.

We believe,  from a
practical  point of view, it is impossible to unwind the acquisition of assets and
liabilities of Banorte by Banco  Bandeirantes,  which was consummated a long time ago.
 Therefore,  even if the present decision is upheld on appeal, it will need to be
enforced through the payment of damages.

In accordance  with the
agreement  between us and Caixa Geral de Depósitos  whereby we acquired  Banco
Bandeirantes,  Caixa Geral de Depósitos assumed full  responsibility  for such lawsuits.
 Therefore we have not provisioned for any possible losses relating to them.

Tax and General Litigation

There are also several  lawsuits in which Banco  Bandeirantes  is a
party in the normal course of business.  We believe that an  unfavorable  outcome for
Banco  Bandeirantes  in some or all of them would not have a material adverse effect on
our business.

DIVIDENDS

See Item 10. Additional  Information - Memorandum and Articles of
Association.  Brazilian law requires a dividend  distribution of at least 25% of net
income.  Unibanco  distributes  35% of net income after  setting  aside 5% as a legal
 reserve.  Unibanco and Unibanco Holdings pay out almost  identical  dividends per share
owing to a combination of three factors:  the number of shares comprised in the equity of
Unibanco Holdings,  excluding treasure stock, is equal to the number of Unibanco shares
held by Unibanco Holdings;  dividends received from Unibanco are Unibanco  Holdings sole
source of cash revenues;  and Unibanco  Holdings  distributes 100% of the dividends
received,  after setting aside legal reserves.  The payment of dividends of both
companies occurs twice a year,  usually in January and July.

SIGNIFICANT CHANGES

In 2003,  Unibanco  issued  seven  Eurobonds  in the  international
 market to date. A factor that stood out during this period was the decreasing cost of
these issues,  mirroring the perception of sovereign  risk. The funds  resulting from
these  operations will be used to finance the banks clients in Brazil and abroad.

- The first placement of Eurobonds,  in January 2003,  amounting
to US$100 million and maturing in January 2004, offers a 6.875%      coupon per year,
with half-yearly payments. The launch price was 99.881%, which generates a return to
investors of 7% per year;
- The second, in February 2003, totaling 50 million, or roughly
US$54 million,  has a 6-month term. It offers a coupon of 6.75%      per year which
 coupled with the launch price of 99.94%  generates a return to investors of 6.875% per
year,  or  equivalent to an      effective US dollar rate of some 5.5% per year;
- The third one also took place in February 2003. It amounted to
US$100  million,  had a 9-month term,  with payment falling due      on November 26,
2003.  This operation  offered a coupon of 6% p.a. The launch price was 99.95%,
 providing  investors with a 6.08%      return per year;
- The fourth  placement  was in March 2003.  It amounted to
US$125  million,  for a 6-month  term,  with payment  falling due on      September 17,
2003.  This  operation  offers a coupon of 5% p.a. The launch price was 99.94%,
 providing  investors  with a 5.125%      return per year;
- The fifth, in April 2003, totaled US$100 million. This
operation,  which has a 1-year term and a 99.76% launch price, provides      investors
with a 5.25% return per year and offers  investor 175 bps less than the operation  with a
similar term launched  earlier      in the year;
- The sixth,  which took place in early May 2003,  amounted to
US$75 million and had an 18-month  term.  The operation  offers a      coupon of 5.625%
per year. The launch price was 99.752%, which provides investors with a return of 5.80%
per year;
- The seventh, in May 2003,  amounted to 75 million, or roughly
US$86 million,  has a 1 year term. It offers a coupon of 5.375%      which  coupled to
its launch price of 99.76%  generates a return to investors of 5.625% per year, or
equivalent to an effective US      dollar rate of some 4.57% per year.

Unibanco, through UBB Finance Company,  launched  in June 2003 a new  securitization  transaction  in the amount of US$225  million.  UBB
Finance Company is a special purpose  company,  established  under the laws of the Cayman Islands,  with the
purpose of acquiring US dollar Payment Orders received and processed by Unibanco  through its  correspondent
banks,  and using them as an underlying  asset that guarantees note issuances in the  international  capital
markets.  The issuance  matures in July 15 2009,  pays quarterly  interest,  and begins to amortize in equal
and  consecutive  payments  starting  October  15 2004.  The notes were  placed  mainly  with  institutional
investors in Europe and in the USA.

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  Unibanco common shares,  3,033,185,661
 Unibanco  preferred shares, and 3,033,185,661  Unibanco Holdings Class B preferred
 shares,  to be maintained in treasury for subsequent sale or cancellation,  without
capital reduction.

Up to May 12, 2003,  228,000,000  Unibanco  preferred  shares,  167,225,000  Units and 372,900 GDS issued by
both Unibanco and Holdings were repurchased.  Through a Share Exchange  Agreement,  Unibanco assigned and
transferred to Holdings  353,675,000  Class B preferred shares issued by Holdings  acquired in the form of
Unit or GDS and  Holdings  assigned and  transferred  to Unibanco  353,675,000  preferred  shares  issued by
Unibanco.  Therefore,  Unibanco  recorded  935,350,000  preferred  shares at an average  price of R$46.16 as
treasury  stocks.  The minimum  and maximum  acquisition  prices  were R$ 33.76 and  R$54.15,  respectively.
Unibanco Holdings  recorded  353,675,000  preferred  shares  Class B, at an average  price of R$47.85 per thousand
shares as treasury stocks.

In June,  2003 Unibanco  announced that we have retained  Credit Suisse First Boston ("CSFB") as our adviser
in the  structuring of a public  conversion  offer,  exclusively  for the Brazilian  market.  The conversion
offer will enable the holders of preferred  shares  issued by Unibanco  ("UBB  Preferred  Shares" - Bovespa:
UBBR4) to convert them into Units (Bovespa:  UBBR11).  This will under the same terms of the 1997 conversion
offer  that  followed  the  global ADR offer  which  opened the  trading of Units in the NYSE in the form of
ADRs.  Therefore,  if the  conversion  offer is  successful,  there will be an increase in liquidity for the
Units in the  domestic  market and the  holders of UBB  Preferred  Shares  will  migrate to our most  liquid
security.  The holders of UBB  Preferred  Shares who decide to adhere to the  conversion  offer will receive
dividends which are up to 4.7% less than what they would have received if they had decided  otherwise.  Such
estimate is based on the payments of dividends  made in the last 5 fiscal  years.  The  consummation  of the
transaction  is subject  to the  approval  by and  consequent  registration  with the  Brazilian  Securities
Commission - CVM of the structure to be proposed by the companies  involved,  as well as its approval by the
boards of directors.

ITEM 9. THE OFFER AND LISTING

Offer and Listing Details

Our  preferred  shares are listed and traded on the São Paulo Stock
 Exchange  (Bolsa de Valores de São  Paulo).  The Class B Preferred Shares of Unibanco
 Holdings are not separately  traded,  but the Units, each consisting of one of our
preferred shares and one class B preferred  share of Unibanco  Holdings,  are listed and
traded on the São Paulo Stock  Exchange.  Our Global  Depositary  Shares,  each
representing  500 Units,  are traded on the New York Stock  Exchange.  Each Unit on the São
Paulo  Stock  Exchange is traded in lots of 1,000.

The table below sets forth,  for the indicated  period,  the high
and low closing prices of the Global  Depository  Shares,  or GDS, on the New York Stock
Exchange, in U.S. dollars, and Units on the São Paulo Stock Exchange, in reais:

|                              | New York Stock Exchange | São PauloStock Exchange
|----------------------------- | ----------------------- | -----------------------
|
|                              | High                    | Low                    
|Year ended December 31,      
|1999                          | 31.56                   | 9.18                   
|2000                          | 34.31                   | 21.94                  
|2001                          | 32.69                   | 13.40                  
|2002                          | 27.45                   | 6.31                   
|Year ended December 31, 2001:
|First quarter                 | 32.69                   | 19.50                  
|Second quarter                | 26.55                   | 19.75                  
|Third quarter                 | 25.55                   | 13.40                  
|Fourth quarter                | 23.03                   | 14.90                  
|Year ended December 31, 2002:
|First quarter                 | 25.02                   | 20.00                  
|Second quarter                | 27.45                   | 13.99                  
|Third quarter                 | 16.91                   | 7.10                   
|Fourth quarter                | 12.35                   | 6.31                   
|Month of:                    
|December 2002                 | 12.35                   | 8.48                   
|January 2003                  | 13.71                   | 10.01                  
|February 2003                 | 12.02                   | 10.70                  
|March 2003                    | 15.35                   | 11.79                  
|April 2003                    | 18.80                   | 14.99                  
|May 2003                      | 18.80                   | 16.30                  
|As at June 25, 2003           | 17.25                   | 16.71                  

Markets

Unibancos  common shares and preferred shares are traded on the
Bolsa de Valores de São Paulo.  The Units,  consisting of one preferred  share of
Unibanco  and one class B preferred  share of Unibanco  Holdings,  are traded in the
Bolsa de Valores de São Paulo. The GDS, each of which represents 500 Units, are traded on
the New York Stock Exchange.

ITEM 10.                                           ADDITIONAL INFORMATION

Memorandum and Articles of Association

SUMMARY OF THE BY-LAWS OF UNIBANCO  UNIÃO DE BANCOS BRASILEIROS
S.A. AND UNIBANCO HOLDINGS S.A.

We are a  financial
 institution  incorporated  under the laws of the  Federative  Republic of Brazil, duly
authorized to conduct business by the Central Bank of Brazil.

Unibanco Holdings is a
company incorporated under the laws of the Federative Republic of Brazil.

The information  herein
refers to Unibanco Holdings and our consolidated  by-laws dated April 28, 2003 which are
currently in effect.  Our by-laws are, however, subject to Central Bank approval.

OBJECTS AND PURPOSES

Unibanco

Our corporate  objective
and purpose is to perform those  operations  and services which are permitted to be
 performed by  financial  institutions  according to Brazilian  Law.  This  includes
 conducting  foreign exchange.  Our objectives  and purposes are specified in article 2
of our corporate  by-laws.  Accordingly,  we may also participate in other  companies,
 pursuant to the applicable  legal and statutory  provisions,  and we may not (i) acquire
 real  property  neither  intended for our own use,  except for the cases  permitted by
the law, nor (ii) issue debentures or partes beneficiárias.

Unibanco Holdings

Unibanco Holdings  objective
and purpose,  as outlined in article 2 of its by-laws, is to participate in the share
 capital  of other  companies.  Unibanco  Holdings  assets  consists  exclusively  of
its  equity interest in Unibanco.  It does not currently  intend,  on a permanent basis,
to conduct any other activity than holding Unibanco Common Shares and Preferred Shares.

DIRECTORS AND OFFICERS

Unibanco

We are managed by two
bodies: (i) a Board of Directors, and (ii) a Board of Officers.

Our Board of  Directors
 may be made up of between 4 (four)  and 7 (seven)  directors.  All  directors are also
our shareholders  elected at a Shareholders  Meeting,  with a 1 (one)-year term of
office. Even though pursuant to the Brazilian  Corporation  Law and our by-laws all
directors must also be  shareholders,  there is no provision in our by-laws specifying
the number of shares required for directors qualification.

Our Board of Directors
 ordinarily meets once each quarter and additionally  meets whenever  corporate interests
 so  require.  The  decisions  of our Board of  Directors  are taken by a majority  of
votes with the presence of at least half of its elected members.  In the event of a tie,
the Chairman,  in addition to his own vote,  is  entitled  to cast the tie  breaking
 vote.  If the  Chairman  is absent,  it is the  Vice-Chairmans incumbency to substitute
his absence.

Article  15 of our
 by-laws  specifies  that the age  limit  for  holding  an  office  in our Board of
Directors  is 65  (sixty-five  ) years.  However,  such  limit  may be  extended  at the
 Board  of  Directorsdiscretion.

Article 16 of our  by-laws
 lists the  exclusive  powers of our Board of  Directors.  Pursuant to this provision,
directors have the power to determine:

- the  remuneration  of each of the  members  of our Board of
 Directors  and of our Board of  Officers,               subject to the global amount
approved by shareholders at the Shareholders Meeting; and
- the  performance  bonus of each one of the  members  of our
 Board of  Directors  and of our  Board of               Officers.

Our Board of Officers may
be composed by up to 122 (hundred twenty two) members:

- 1 (one) Executive President of the Wholesale Banking Group;
- 1 (one) Executive President of the Retail Banking Group;
- 1 (one) Corporate Executive Officer;
- up to 16 (sixteen) Executive Vice Presidents;
- up to 16 (sixteen) Executive Officers;
- up to 50 (fifty) Officers; and
- up to 50 (fifty) Deputy Officers.

The  Executive  President
 of the  Wholesale  Banking  Group,  the  Executive  President of the Retail Banking
Group, the Corporate  Executive Officer,  the Executive Vice Presidents and the Executive
Officers form the Board of Executive  Officers,  which is responsible  for the
 management  and  supervision of our corporate activities.  It follows and ensures
compliance with general guidelines and policies  established by the General Shareholders
 Meetings,  the Board of Directors and our by-laws.  The members of the Board of Officers
have the exclusive power to act on our behalf in accordance with our by-laws.

All  members  of the Board
of  Officers  are  elected  at the  Board of  Directors  Meeting,  with a 1 (one)-year
term of office.

Article  20 of our
 by-laws  specifies  that the age  limit  for  holding  an  office  in our Board of
officers is 60 (sixty) years. However, such limit may be extended at the Board of
Directors discretion.

Under  Brazilian  law, the
 controlling  shareholders,  directors and officers may not take or receive loans or
advancements from financial  institutions in which they are shareholders,  directors or
officers.  The law also establishes that we may not grant loans or advancements to our
affiliates,  controlling  shareholders, officers,  directors  and their  respective
 family  members nor to companies in which these  persons hold more than 10% of the share
capital or hold managing position.

Unibanco Holdings

Unibanco  Holdings  is
also  managed  by two  bodies:  (i) a Board of  Directors,  and (ii) a Board of Officers.

The Board of Directors
 may be made up of between 5 (five) and 11 (eleven)  directors.  All  directors are also
shareholders of Unibanco  Holdings,  elected at a Shareholders  Meeting,  and have a 1
(one) year term of office.  Even though  pursuant to the  Brazilian  Corporation  Law and
the by-laws of Unibanco  Holdings all directors are required to be shareholders,  there
is no provision in Unibanco  Holdings by-laws specifying the number of shares required
for directors qualification.

Unibanco  Holdings  by-laws
 do not  specify  an age  limit  for  holding  an  office in the Board of Directors.

Article  16 of  Unibanco
 Holdings  by-laws  lists the  exclusive  powers of its Board of  Directors.
Specifically,  it outlines that the Board has the power to, among other things,
 determine the  remuneration of each of the  members of the Board of  Directors  and of
the Board of  Officers,  subject  to the global  amount approved by shareholders at the
Shareholders Meeting.

The Board of Directors
 shall  ordinarily  meet once each  semester and  additionally  meets  whenever corporate
 interests so require.  The decisions of the Board of Directors shall be taken by a
majority of votes with the presence of at least half of its elected  members.  In the
event of tie, the Chairman,  in addition to his own vote, is entitle to cast the tie
breaking  vote. If the Chairman is absent,  it is the Vice  Chairmans incumbency to
substitute its absence.

The Board of  Officers  is
made up of 3  (three)  members:  1 (one)  Executive  President  and 2 (two) Officers.
 All  members  are  elected by the Board of  Directors,  with 1  (one)-year  term
 mandate.  Unibanco Holdings by-laws do not specify an age limit for holding office in
the Board of Officers.

The Board of  Officers  is
 responsible  for the  management  and  supervision  of  Unibanco  Holdings corporate
 activities.  It follows and ensures compliance with general  guidelines and policies
 established by the General  Shareholders  Meetings,  the Board of Directors and Unibanco
Holdings by-laws. The members of the Board of Officers  have the  exclusive  power to
act on behalf of  Unibanco  Holdings  in  accordance  with its by-laws.

DESCRIPTION OF CAPITAL STOCK

General

Unibanco

As of March 31, 2003,  our
fully  subscribed  and paid in capital  stock is equal to  R$3,690,601,814, represented
by 140,885,833,318 registered shares with no par value.  Of these:

- 75,568,744,349 are common shares and
- 65,317,088,969 are preferred shares.

Unibanco Holdings

Unibanco  Holdings  fully  subscribed  and paid in capital  stock
is, as of March 31, 2003,  equal to R$1,863,449,959, represented by 84,330,476,296
registered shares with no par value, as follows:

- 37,138,435,873 common shares,
- 3,843,541,338 class A preferred shares, and
- 43,348,499,085 class B preferred shares.

Unibanco common shares

Our  common  shares
 entitle  their  holders  to vote at  shareholders  meetings  and to  receive  the
mandatory dividend, as provided by article 202 of Brazilian  Corporation Law. In
addition,  common shareholders are entitled to all rights  inherent to our capital
 stock,  including  the right to  participate,  on the same basis as our  preferred
 shareholders,  in capital  increases  resulting  from the  capitalization  of monetary
correction, reserves and profits.

Under Brazilian
 corporation  law, the majority of holders of common shares  representing at least 15%
(fifteen  percent)  of the  voting  capital  stock has the  right to elect or  dismiss a
member of the Board of Directors,  at a separate meeting,  in which the controlling
 shareholder cannot participate and vote; provided that those  shareholders hold the
minimum  percentage above described for at least 3 (three) months immediately before the
shareholders meeting. The same rule applies to Unibanco Holdings.

Unibanco preferred shares

While our preferred
 shares are not convertible  into common shares and are not entitled to any voting
rights,  they do, together with our common shares,  have all the rights arising from the
 participation  in our capital stock with the following advantages:

- participation  in the net profits of each fiscal year,  in an
amount which  ensures to each  preferred               share a yearly dividend 10% higher
than that distributed to each common share;
- priority  in the  return of  capital,  without a  premium,  in
the case of  liquidation,  based on the               portion of the capital stock
represented by these shares;
- the participation,  on an equal footing with common shares in
the capital increases resulting from the               capitalization of monetary
correction, reserves and profits;
- whenever  there is a proposal for (i) changing the rights and
 privileges of our  preferred  shares or               (ii) creating of a new class of
preferred  shares with superior  rights,  the majority of holders               of our
preferred shares,  voting separately as a class, in a special meeting, must approve any
of               these proposals.

Under Brazilian
 corporation  law, the majority of holders of preferred  shares  representing at least
10% (ten  percent) of the capital  stock has the right to elect or dismiss a member of
the Board of  Directors, at a separate meeting,  in which the controlling  shareholder
cannot participate and vote;  provided that those shareholders hold the minimum
 percentage above described for at least 3 (three) months  immediately before the
shareholders meeting. The same rules applies to Unibanco Holdings.

According to the Brazilian
 Corporation  Law, the holders of our preferred shares shall be entitled to vote in the
event we do not pay their minimum dividends for three  consecutive  fiscal years. In this
case, the voting right of the  preferred  shares shall remain until their  dividends  are
paid.  The same rule applies to Unibanco Holdings.

Unibanco Holdings common shares

Unibanco  Holdings  common
 shares  entitle  their  holders to vote at  shareholders  meetings and to receive,
 together  with the Unibanco  Holdings  preferred  shares,  dividends  equivalent  to
100% of Unibanco Holdings net cash profit.  In addition,  common  shareholders  are
entitled to all rights  inherent to Unibanco Holdings capital stock,  including the right
to participate,  on the same basis as the other shares of Unibanco Holdings, in capital
increases resulting from the capitalization of monetary correction, reserves and profits.

Unibanco Holdings preferred shares

As with our preferred
 shares,  the preferred  shares of Unibanco  Holdings are not entitled to voting rights
but do enjoy the following advantages:

Class A preferred shares:

- are convertible into class B preferred shares, at the holder
discretion;
- priority in the return of the capital,  without a premium,  in
the case of  liquidation,  based on the              portion of the capital stock
represented by this class of shares;
- participation  in the net profits of each fiscal year,  in an
amount  which  ensures to each class A              preferred share an yearly dividend
10% higher than that distributed to each common share; and
- participation,  on the same basis as the common shares,  in the
capital  increases  resulting from the               capitalization of monetary
correction, reserves and profits.

Class B Preferred Shares:

- priority in the  distribution  of a minimum  semiannual  of,
 whichever is higher,  (i) R$0.15 per one               thousand  shares;  or  (ii) 1.5%
of the net equity of the share,  resulting in a priority  annual               dividend
of 3% of the shares net equity;
- if there is a split or reverse  split of the Class B  Preferred
 Shares,  the  semiannual  mandatory               dividend will be adjusted in
accordance with the new number of shares of this class;
- priority in the return of  capital,  in the case of
 liquidation,  based on the portion of the capital               stock represented by
this class of shares; and
- participation,  on the same  basis as the common  shares,  in
the  distribution  of  dividends  and in               capital increases resulting from
the capitalization of monetary correction, reserves and profits.

Units

Pursuant  to  article  43
of the  Brazilian  Corporation  Law,  Units  are  defined  as share  deposit
certificates,  where each certificate  represents one of our preferred shares and one
class B preferred share of Unibanco  Holdings.  Units are kept in book entry form by us
(as registrars) in the name of their holders as from the date of the deposit of the
underlying shares.

Accordingly,  for each of
our  preferred  shares  deposited,  an equal  number of class B  preferred share of
Unibanco Holdings must also be deposited to form an Unit.

Only shares  that are not
 subject to liens or other  encumbrances  may be  deposited  with us for the issuance of
Units.

We provide the holder of
Units with  statements  related to the relevant  Units account as requested, at the end
of any month in which any transaction takes place and once per year if no transactions
happens.

This statement  contains
the date and place of issuance,  the indication  that it is a report on Units Certificado
 Escritural de Depósito de Ações,  the number and type of deposited shares,  the
declaration that the underlying  shares,  as well as their dividends and amounts
 corresponding  to redemption or  amortization, will only be made  available to the
holder of the Units or to whom such holder  indicates in writing;  the name and
 qualification  of the  holder,  the deposit fee charged by us, if  applicable,  and the
 addresses  of our shareholders service facilities.

Our by-laws and Unibanco
 Holdings  by-laws each  establish  specific  conditions  pertaining  to the Units.  The
 by-laws  specify  that a holder of a Unit is in fact a holder of one of our  preferred
 shares and one of the class B preferred shares of Unibanco Holding, entitled to all
the rights inherent to such shares.

Units holders rights

In exercising the rights
 conferred by the shares  underlying the Units,  the following rules shall be observed:

- The dividends and the amount of the redemption or amortization
 of the deposited  shares shall be paid               by us to the holders of the Units;
and
- Where as a result preemptive rights to shareholder
 subscription  having been granted to the capital ,               the following
procedures shall prevail:

| | 1. | If Unibanco Holdings and us simultaneously
carry out an increase in our capital by issuing shares that may be deposited for the issuance of new Units, the holder of the
Units may exercise the preemptive rights to which the shares represented by the Units
are entitled, and in this event:
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |    | 1.1                                                                                                                                                                                                                                                                                            
|
| |    | 1.2                                                                                                                                                                                                                                                                                            
|
| | 2. | if only one of the companies increases its capital, the holder of the Units may
exercise directly the preemptive right conferred by one of the shares represented by
the Units, and in this case, no Units will be issued.                                                                     

Transfer of Units

Transfer of the shares
 deposited  with us for the  issuance  of Units can only be effected  through a written
order of the holder of such Units.

The underlying  shares and
the relevant  dividends and redemption or  amortization  amounts may not be pledged,
 hypothecated  or  otherwise  subject  to any liens or other  encumbrances  which may
 jeopardize  the delivery of dividends and redemption or amortization amounts to the
holders of the Units.

Pledges or other liens to
which  Units are subject are marked down on the Units book entry  system and included in
the relevant account statement.

If holders of Units wish
to trade  their  Units on any  Brazilian  Stock  Exchange,  such  holders and their
 broker  agent  must  sign an  Order  of  Transference  of  Shares  kept in Book  Entry
 Form  (Ordem  de Transferência  de Ações  Escriturais - OT1). After receiving the order,
the broker agent must deposit the Units in the custody of the Stock  Exchange,  which
sends a Request of Transference of Shares kept in Book Entry Form (Pedido de  Transferência
 de Ações  Escriturais   PTAE) to us after the  negotiations.  When such  request is
received, the Units are finally transferred to our custody and registered in the name of
their new holder.

Cancellation of Units

In accordance with our and
Unibanco Holdings  by-laws,  the holder of a Unit may, at any time, cancel their Units
and become a direct holder of the underlying shares.  These shares are fully
transferable.  Our and Unibanco  Holdings  Board of Directors may  temporarily  suspend,
 at any time,  under specific  circumstances mentioned in our by-laws, the possibility of
canceling the Units.

Units that are subject to pledges, encumbrances or any other liens
cannot be cancelled.

Form and transfer

Since our shares,  the
shares of Unibanco  Holdings and the Units are registered in a book-entry form, their
 transfer  is  effected  by an entry  made in the books of the  registrar.  We act as
 registrars  of our shares, the shares of Unibanco Holdings and Units.

Any change in the
ownership of our shares,  the shares of Unibanco  Holdings and the Units can only be made
through book entries upon the  presentment  of a judicial order or written order from the
seller in proper form,  which is kept in our  files.  Such  entries  attribute  to the
buyer the  shares or Units  acquired  and withdraw from the seller the shares or Units
sold.

Shareholders meetings and voting rights

According to our by-laws
and Unibanco  Holdings  by-laws,  our Shareholders  Meetings and the ones of Unibanco
Holdings, are held ordinarily and extraordinarily.

The  extraordinary
 meetings  are held  whenever the  corporate  interests so require and the ordinary
meetings are held within the 4 (four)  months  following  the closing of the fiscal
 year,  for the purpose of, among other things:

- analyzing, discussing and voting our balance sheet; and
- deliberating  about the destination of our net profits obtained
during the fiscal year, as well as the               distribution of dividends.

The holders of our
preferred  shares and Unibanco  Holdings  Class A and Class B Preferred  Shares are
entitled to vote at the  extraordinary  meeting of the holders of each such class of
shares  whenever  there is any proposal to:

- change the rights, priorities, preferences or privileges of
theirs preferred shares, or
- create a new  class of  shares  with  right,  priority,
 preference  or  privilege  superior  to their               preferred shares.

According to the Brazilian
 Corporation Law, the General Shareholders  Meetings shall be called by the Board of
Directors or by the Directors. The General Meetings may also be convoked by:

- the Fiscal Committee, in circumstances specified by law;
- any  shareholder,  in the case where  managers do not convoke
the General  Meetings  within 60 (sixty)              days;
- shareholders  who represent at least 5% (five per cent) of the
capital stock,  in the case managers do               not attend within 8 (eight) days to
the convocation request; or
- shareholders  who  represent at least 5% (five per cent) of the
capital stock or 5% (five per cent) of               the shareholders  with no right to
vote, in the case managers do not attend within eight (8) days               to the
convocation request for installing the Fiscal Committee.

Our  General  Shareholders
 Meetings,  as well as the  ones of  Unibanco  Holdings,  are  convoked  by publishing,
 not less than fifteen  calendar days prior to the  scheduled  meeting date and not less
than three times,  a notice in the  Diário  Oficial  do Estado de São Paulo  and,  as
of April 28,  2003,  in the Valor Econômico,  both  newspapers  with  circulation  in
the city of São  Paulo.  We used to  publish in the Gazeta Mercantil  and this change to
Valor  Econômico  is pending of approval  of the Central  Bank.  This notice must contain
the agenda for the meeting  and, in the case of an  amendment  to the  by-laws,  an
 indication  of the subject matter.

Our General Shareholders
 Meetings,  as well as the ones of Unibanco Holdings,  take place in the head office of
the company.  In the event such  condition  can not be attended,  the press  releases
 shall  clearly indicate the place of the meeting, which shall be held in the same
location of our head office.

A General  Shareholders
 Meeting in which all the shareholders  participate will be considered  valid,
notwithstanding the requirements made by law for the convocation.

According to our and
Unibanco Holdings  by-laws,  our Shareholders  Meetings,  as well as the ones of
Unibanco  Holdings,  shall be held  and  presided  over by the  Chairman  of the  Board
 of  Directors.  In his absence,  the  Chairman may appoint any member of the Board of
Directors or of the Board of Officers to do this in his stead. The Chairman shall choose,
among the shareholders present, one or more secretaries.

Our  shareholders  may
be  represented at the General  Shareholders  Meeting by a proxy that meets the
conditions  imposed by law. The status of shareholder shall be proved,  if so required,
 by the presentation of a document evidencing his/her identity.

Preemptive rights

Each of Unibanco  Holdings
and our shareholder has a general  preemptive  right to subscribe to shares in the event
of any capital  increase in the  proportion  to his or her  shareholding.  A minimum
 period of 30 days following the  publication of the capital  increase  notice must be
allowed for the exercise of the right, which is transferable, either for consideration or
not, during this period.

Brazilian  Corporation Law
allows the Board of Directors of public  companies with authorized  capital to exclude or
shorten the preemptive right 30-day period in the following cases:

- offering of shares made on Stock Exchanges or through public
offerings; or
- exchange offer in takeover bids.

According to the Brazilian
Federal  Constitution,  until a special law regulating the participation of foreign
 investors in the capital of financial  institutions is passed,  the increase of the
 participation  of such  investors  in the voting  capital of  financial  institutions
 is subject to prior  authorization  by the Brazilian  Government.  Therefore,  in the
event that voting shares are being offered our foreign  shareholders may be prevented
 from  exercising  their  preemptive  rights.  The same applies to Unibanco  Holdings,
 as our controlling  shareholder,  considering  that its  shareholders  hold an indirect
 participation  in our capital stock.

Under  Brazilian
 Corporation  Law,  the sale of a Company  control  shall  only be  effective  if the
purchaser  make a public  offer of  acquisition  of  shares  with  voting  rights  that
are  owned by the other shareholders  of the Company,  guarantying at least 80% (eighty
per cent) of the price paid for the controlling block of shares.

Right of withdrawal and redemption

According to the Brazilian
 Corporation Law,  redemption consists of the payment to a shareholder of a shares
 value in order to take that share out of  circulation.  Such payment may or may not
reduce the capital stock of the Company,  and, in the case where the capital is
 maintained,  a new nominal value must be given to the remaining shares.

Our shares,  as well as
the shares of Unibanco Holdings and the Units are not redeemable.  However,  a dissenting
 shareholder  has the right to withdraw from the company through  redemption in cases
 prescribed by law at the shares book value.

Capital increases

Our Board of Directors may
 authorize,  regardless of an amendment to our by-laws,  capital  increases of up to
 95,195,526,716  new  shares,  due  regard  being  given  to the  limitations,  imposed
 by law.  Such limitations  impose a maximum  proportion of the number of non-voting
shares in relation to the total number of shares.

In fact, we, as a
financial  institution,  must respect the legal  requirement  that the number of our
non-voting shares may not be higher than 50% of the total shares representing our capital
stock.

The  authorized  capital
stock may only be changed by our  shareholders  in a  shareholders  meeting, through an
amendment in our by-laws.

Likewise,  the Board of
 Directors  of Unibanco  Holdings may decide to increase the number of shares, up to the
 limit of  180,000,000,000  shares,  being  60,000,000,000  common  shares,
 3,843,541,338  class Apreferred  shares and  116,156,458,662  class B preferred
 shares.  Each capital  increase may be authorized without  maintaining the existing
 proportion among the various types and classes of shares,  due respect being given to
the legal limitation that up to 2/3 of the capital stock may be represented by non-voting
shares.

Acquisition of our own shares

Subject  to  authorization
 by  our  Board  of  Directors  and  certain   limitations  and  conditions established
 by the CVM and by the  Brazilian  Corporation  Law, we and  Unibanco  Holdings may
acquire our own shares, to cancel or to keep in our treasury.

Approval by the Central Bank

The Central Bank must
approve  every  amendment in our  by-laws,  including  those  related to capital
increases.

Stock option to officers and employees

Within the limits of our
 authorized  capital  stock and in  accordance  with a plan  approved  at the shareholders  meeting,
 we may grant  options  to  purchase  our  shares to our  officers,  employees  and the
officers and employees of our subsidiaries. The same applies to Unibanco Holdings.

Dividend policy

Our by-laws contain the
following provisions with respect to dividends for each fiscal year:

- the distributable  amount for each fiscal year is equal to our
net profit less the legal,  contingency               and  unrealized  income  reserves
and  increased by reversals in prior years to  contingency  and               unrealized
income reserves;
- our  mandatory  dividend  is equal to 35% of the  distributable
 amount,  to the  extent  profits  are               available for distribution;
- to each preferred share we pay 110% of the dividend paid to
each common share;
- before the annual  shareholders  meeting,  our Board of
Directors may determine the payment of interim               dividends out of earnings
based on semiannual  balance sheets or earning reserves.  These interim
              payments may be off set against the mandatory dividend.

Unibanco  Holdings  by-laws
 contain the  following  rules with respect to dividends  for each fiscal year:

- the company  shall  distribute  as dividends the entirety of
the fiscal years profit which remains in               cash after the creation of the
legal reserve, when applicable;
- the company  must pay to each class A  preferred  share 110%
of the  dividend it pays to each common               share;
- class B preferred  shares receive a semiannual  minimum
 dividend of whichever is higher (i) R$ 0.15               per 1,000  shares or  (ii) 1.5%
 of the net equity of the share  resulting  in a priority  annual               dividend
of 3% of the shares net equity;
- before the annual  shareholders  meeting,  the Board of
Directors may determine the payment of interim               dividends out of earnings
based on semiannual  balance sheets or earning reserves.  These interim
              payments may be off set against the mandatory dividend.

We and Unibanco  Holdings
 intend to continue to  distribute  dividends at an annual rate equal to the mandatory
dividend.

Our and Unibanco  Holdings Board
of Directors  normally declare dividends during the first quarter of the following fiscal
year.  This declaration is ratified at the annual shareholders meetings.

The  dividends  authorized
 by our  Shareholders  Meetings or by our Board of Directors  shall be paid within 60
(sixty) days of the date they were declared  and, in any event,  within the fiscal year
in which they were declared.

The legal  action to claim
 dividends  shall  prescribe  within  three  years  from the date they were offered to
the  shareholder.  In the event such legal  action  prescribes,  we and  Unibanco
 Holdings  will be entitled to such the dividends.

Pursuant to  Brazilian
 Corporation  Law, we may suspend the  mandatory  distribution  if the Board of Directors
 determines  that  payments  of the  mandatory  distribution  would  be  inadvisable  in
 view of our financial condition.  The shareholders must ratify such determination at the
annual shareholders  meeting. Such determination  must be  reported  to the  CVM  within
 one  day of the  relevant  shareholders  meeting.  Under Brazilian  Corporation Law, a
mandatory  distribution that is suspended and not offset against losses in future years
must be paid as soon as our financial condition so permits. The same is applicable to
Unibanco Holdings.

Interest on capital stock

According to our by-laws,
 any interest  distributed to the shareholders,  up to the limit of the long term
 interest  rate (Taxa de Juros de Longo  Prazo - TJLP),  shall be taken into  account
for the purpose of calculating the amount of the mandatory  distribution,  as provided
for in paragraph 7 of Article 9 of Law 9249 of 12.26.95. The same is applicable to
Unibanco Holdings.

In any case,  the  payment
of interest on capital  stock is subject to  withholding  income tax at the rate of 15%.

DISCLOSURE OF OWNERSHIP INTEREST

Acquisition by the controlling shareholder

According to CVMs
regulations,  in the event that a controlling  shareholder effective or potentially
increases his  participation  in the capital stock of the company by 5%, such occurrence
must always be noticed to CVM,  the  Stock  Exchanges  and to the  over-the-counter
 market in which the  company  has its  securities negotiated. Unibancos notice must
contain the following information:

- name and qualification of the acquirer;
- quantity, price, species and/or class, in the case of acquired
shares;
- quantity, price and characteristics, in the case of other
acquired securities; and
- objectives of the acquirer.

When the controlling
 shareholder has already increased its equity  participation by 10% (ten percent) or more
of any class of share,  any  further  acquisition  of  shares  of each  class  must be
made by means of public offering registered with CVM.

For the purpose of these
regulations,  the potential increase of the controlling  shareholder capacity
participation (through option, convertible debenture, etc.) must also be taken into
account.

Acquisition by any other person or company

CVMs  regulations  also
 establish  that  in  the  case a  company,  an  individual,  or a  group  of
individuals,  acting together or representing  only one interest,  achieves a direct or
indirect  participation of 10% (ten percent) in the capital stock of the company,  such
event must be disclosed.  Such  obligation also applies to  individuals  or a group of
 individuals  that have a  participation  of 10% or more in the  capital stock of the
company and that increases their participation in 5% (five percent).

Material Contracts

ASSOCIATION AGREEMENT  MAGAZINE LUÍZA

Execution Date

September 10, 2001

Parties

Banco Fininvest S.A.Magazine Luíza S.A.MTG Administração e
Assessoria S/C Ltda. (MTG), as Intervening Party

Purpose

To establish a strategic
 partnership  between  Fininvest and Magazine  Luiza, a well-known  Brazilian chain of
 department  stores,  creating a jointly  held new company  (Financial  Company)  which
will provide consumer finance to Magazine Luiza customers.

Material provisions

The main provisions of the
Association Agreement are the following:

- Magazine  Luiza  grants to the  Financial  Company  exclusive
 rights to provide  consumer  finance to               Magazine Luiza customers.
- General conditions for financing Magazine Luiza customers.
- Activities and general principles for managing the Financial
Company.
- General provisions for the Financial Company shareholders
agreement to be executed.

Governing Law and Jurisdiction

The  agreement is governed
by the laws of Brazil and is subject to the  jurisdiction  of the Brazilian
                  courts.

INVESTCRED - SHAREHOLDERS AGREEMENT

Execution Date

November 1, 2001

Parties

Unibanco  União de Bancos Brasileiros S.A.Globex Utilidades S.A.
Wale S.A.  Distribuidora de Títulos e Valores Mobiliários (Wale), as intervening party
Ponto Frio Leasing S.A. (Ponto Frio Leasing), as intervening party

Purpose

Unibanco acquired 50% of
Banco Investcred S.A.  (Investcred) and, together with Globex,  which holds the  other
 50%  of  Investcred,  executed  the  Shareholders  Agreement  to  regulate  their
 relationship  as shareholders  of  Investcred,  which will  provide  consumer  finance
to  customers of Ponto Frio, a nationwide chain of household appliance stores.

Material Provisions

The main provisions of the
Shareholders Agreement are the following:

- Wale and Ponto Frio Leasing will be subsidiaries of Investcred.
- Each shareholder shall be entitled to appoint half of the
directors of Investcred.
- Investcred will be entitled to use the trademark  Unibanco.
- Disputes shall be solved by negotiations or by selling of the
relevant participating interest.
- Transfer restrictions on shares.

Material Ancillary Agreements

Association Agreement
between Unibanco and Globex dated October 26, 2001.

Governing Law and jurisdiction

The  agreement is governed
by the laws of Brazil and is subject to the  jurisdiction  of the Brazilian
         courts.

TRUST DEED  US$ 200,000,000.00 Step-Up Subordinated Callable Notes
due 2012

Execution Date

April 30, 2002

Parties

Issuer:  Unibanco  União de Bancos Brasileiros S.A., acting through
its Grand Cayman Branch.Trustee: The Bank of New York.

Purpose

Unibanco  issued
 US$200,000,000.00  Step-Up  Subordinated  Callable  Notes due 2012  constituted  by,
subject to, and having the benefit of, the Trust Deed.  The issuance  qualifies  as Tier
2 Capital  pursuant to the CMN Resolution No. 2837, of May 30, 2001.

Material Provisions

The main provisions of the
Trust Deed are the following:

- the notes are  subordinated  in accordance  with the CMN
Resolution No. 2837/01 and are subject to the               provisions therein
established.
- the notes are callable at any time for tax reasons  and, as
from April 30, 2007,  at the option of the               issuer.  In all cases the call
is subject to the Central  Banks  prior  approval,  although  the               Central
Bank has already granted its approval for a call in some restricted cases.
- in order to comply with CMN  Resolution  No.  2837/01,  payment
of  interest  and  principal  shall be               deferred in the cases established in
the referred resolution.
- the trustee,  on behalf of the  noteholders,  has the benefit
of a political risk  protection  against               currency inconvertibility provided
by Deutsche Bank AG London.

Material Ancillary Agreements

Agency  Agreement dated
April 30, 2002 executed by Unibanco,  as issuer,  and the Bank of New York, as Principal
Paying Agent, Registrar and Transfer Agent.

Political risk protection
 transaction  confirmation dated April 25, 2002 entered into by Unibanco and Deutsche
 Bank AG London,  which is  subject to the terms of the ISDA  Master  Agreement
 (Multicurrency  Cross Border).

Governing Law and Jurisdiction

The agreement is governed
by the laws of England and is subject to the  jurisdiction  of the courts of England and
New York.

SALE AGREEMENT  MT 100 SECURITIZATION

Execution Date

May 29, 2002

Parties

Unibanco-União de Bancos Brasilieros S.A.(Unibanco)UBB
Diversified Payment Rights Finance Company (SPC)

Purpose

Under this  agreement,  we
sold to the SPC,  through our Grand Cayman branch,  all existing and future rights in and
to (but none of the obligations  under) certain U.S.  dollar  denominated  electronic
 remittance payment orders accepted by us for the ultimate  benefit of a third party,
 which we refer to as the diversified payment rights.

Backed  by its  ownership
 of the  diversified  payment  rights,  the  SPC  will  issue  notes  in the
international  financial market in an aggregate amount of up to  US$1,000,000,000.00
 (one billion US dollars). On May 29, 2002,  the SPC issued a series of notes,  which we
refer to as the series 2002-1  notes,  in a total aggregate  principal amount of
 US$400,000,000  (four hundred million US dollars),  which is guaranteed by MBIA
Insurance  Corporation,  a financial  guarantor.  The proceeds of the series  2002-1
notes were remitted to the Grand Cayman  branch as initial  payment for the sale of the
 diversified  payment  rights.  The SPC will remit the proceeds of any additional  series
of notes it issues to the Grand Cayman branch as additional  payment for the sale of
diversified payment rights.

The term of the  Sale
 Agreement  began on May 29,  2002 and  continues  until  the date on which  all amounts
in connection  with any notes issued by the SPC relating to the  diversified  payment
 rights have been paid in full.

Ancillary Agreements

The main ancillary
agreements are as follows:

- Bill of Sale between Unibanco, through its Grand Cayman branch
and the SPC (Bill of Sale).
- Indenture  between the SPC and The Bank of New York Trust
Company  (Cayman)  Limited,  as Trustee (the               Indenture Trustee).
- Series 2002-1  Indenture  Supplement (the Indenture  Supplement),
 between the SPC and the Indenture               Trustee.
- Servicing Agreement (the Servicing Agreement) among the SPC,
Unibanco and the Indenture Trustee.
- Acknowledgement  Agreements (the Acknowledgement  Agreements)
among the SPC, Unibanco, the Indenture               Trustee and each of American Express
Bank Ltd., Bank of America N.A.,  Citibank,  N.A.,  Deutsche               Bank Trust
Company Americas, JP Morgan Chase Bank and The Bank of New York.
- Series 2002-1 Note Purchase Agreement,  among the SPC,
Unibanco,  MBIA Insurance Corporation (MBIA),               as Administrative Agent,
and Meridian Funding Company LLC (the Purchaser).
- Insurance and Reimbursement Agreement (the Insurance Agreement),
among MBIA, Unibanco and the SPC.
- Financial  Guaranty  Insurance  Policy,  issued by MBIA with
 respect to the Series  2002-1  Note (the               Policy)

Material Provisions

The material provisions of
the Agreement is as follows:

- We are required  redeem any outstanding  notes and are liable
for amounts  relating to such notes upon               the  occurrence of specific
 events which have a material  adverse effect on the existence of the
              future flows of diversified payment rights.
- Standard  representations,   warranties,  covenants  and
 related  indemnification  provisions  for  a               transaction of this nature.

Governing Law

The Agreement is governed
by the laws of New York and is subject to New York courts.

BUS SERVIÇOS DE TELECOMUNICAÇÕES S.A. - CLOSING AGREEMENT

Execution Date

June 28, 2002

Parties

Unibanco  União de Bancos Brasileiros S.A. (Unibanco) Banco
Bradesco S.A. (Bradesco)

União de Comércio Participações Ltda.PT Prime, S.G.P.S., S.A. (PT
Prime)Bus Serviços de Telecomunicações S.A. (BUS)Bus Holding S.A. (BUS Holding)
Primesys S.A. (Prymesis)Portugal Telecom S.A. (PT) (intervening party)

Purpose

On June 26, 2002,  ANATEL
 (Brazilian  National  Telecommunications  Agency)  approved the transfer of control of
BUS to PT or its affiliates.  As a consequence,  Primesys received the totality of BUS
common shares held by BUS Holdings,  representing  80,01% of BUS voting capital and
26,67% of BUS total shares.  As a result, Primesys  became the holder of 100% of the
capital of BUS, and  Unibanco and UCP became  holders of 100% of the capital of BUS
Holding.

Ancillary agreements

The main ancillary
 agreement is the Association  Agreement between Unibanco,  Bradesco,  PT Prime and as
intervening parties, PT, BUS, Bus Holding and Primesys.

Material Provisions

The main provisions of the
Closing Agreement are the following:

- Primesys declares that received from Bradesco,  UCP and
Unibanco (Banks) all shares representing the               capital  stock of BUS,  and,
 together  with PT Prime and PT grant to the Banks  irrevocable  and
              irreversible  release with  respect to the  obligations  assumed by the
Banks in the  Association               Agreement as amended thereafter.
- The Banks  declares  to have  received  from PT Prime the
 totality  of Amount in Escrow and Shares in               Escrow granting PT Prime,
 Primesys and PT irrevocable and  irreversible  release with respect to               the
obligations assumed by them in the Association Agreement as amended thereafter.

Governing Law and jurisdiction

The agreement is governed
by the laws of Brazil and is subject to Brazilian courts.

EXCHANGE RATES AND EXCHANGE CONTROLS

Only those  institutions
 authorized  by the Central Bank to operate in the foreign  exchange  markets may
purchase and sell foreign currency in Brazil.

There are two principal
foreign exchange markets in Brazil, each with its own specific regulation:

- the commercial rate exchange market, where most trade and
financial foreign-exchange  transactions are               effected,  including  those
 relating  to the  purchase  or sale of  shares  and the  payment  of
              dividends or interest with respect to shares; and
- the floating rate exchange market, where all other
foreign-exchange transactions are effected.

In both  markets,  rates
are  freely  negotiated,  but may be  strongly  influenced  by  Central  Bank
intervention.  From  the  introduction  of the real in July  1994  through  March  1995,
 the real  appreciated against the U.S.  dollar.  In March 1995, the Central Bank
introduced  exchange rate policies that  established a trading  band  within  which the
 real/U.S.  dollar  exchange  rate could  fluctuate,  allowing  the  gradual devaluation
 of the real against the U.S.  dollar.  In January 1999,  in response to increased
 pressure on the value of the real,  the  Central  Bank  allowed  the real to float
 freely,  and during  1999 and 2000 the real experienced  high  volatility  and suffered
a sharp decline  against the U.S.  dollar.  This decline  continued through the first
three quarters of 2001;  subsequently  the real regained some value against the dollar in
the fourth  quarter of 2001.  The real  declined  against  the dollar in the first
 semester  of 2002,  suffering a sharper decline during the second semester due mainly to
the  presidential  elections and  speculations  around the new  government.  Since the
 beginning of 2003 the real  regained  some value  against the dollar but as of June 2003
the rate was still very volatile.

The following  table sets
forth  information on the Central Banks  Commercial  Exchange Rate for U.S. dollars
(PTAX sale rate) for the periods and dates indicated.

The Commercial Rate for U.S. dollars
                                                  Reais per US$1.00

|Period  | Low    | High   | Average(1) | Period-End
|------- | ------ | ------ | ---------- | ----------
|        |        |        |            |           
|1995    | 0.8340 | 0.9726 | 0.9177     | 0.9725    
|1996    | 0.9725 | 1.0407 | 1.0049     | 1.0394    
|1997    | 1.0395 | 1.1164 | 1.0808     | 1.1164    
|1998    | 1.1165 | 1.2087 | 1.1611     | 1.2087    
|1999    | 1.2078 | 2.1647 | 1.8513     | 1.7890    
|2000    | 1.7234 | 1.9847 | 1.8348     | 1.9554    
|2001    | 1.9370 | 2.8007 | 2.3508     | 2.3204    
|2002    | 2.2650 | 3.9505 | 2.9316     | 3.5400    
|2003(2) | 2.9105 | 3.6650 | 3.3864     | 3.0375    

|Source: | The Central Bank                                                                  
|------- | ----------------------------------------------------------------------------------
|(1)     | Represents the average of the month-end exchange rates during the relevant period.
|(2)     | Through June 5th, 2003.                                                           

The Central Bank may
impose  temporary  restrictions on remittances of foreign capital abroad whenever there
exists,  or the Central Bank  foresees,  a  significant  imbalance in Brazils  balance
of payments.  For approximately  six  months  in 1989 and early  1990,  to  preserve
 Brazils  foreign  currency  reserves,  the Brazilian  government  froze all remittances
of dividends and invested capital that were owed to foreign equity investors  and held by
the Central Bank.  The Central Bank  subsequently  released  these amounts in accordance
with Brazilian  government  directives.  The Brazilian  government may take similar
measures in the future. See Item 3.  Key  Information  Risk Factors  Risks  Relating
to Brazil  Imposition of exchange  controls  could impede our access to the
 international  capital markets and limit our ability to service our obligations  that
are denominated in foreign currencies.

Restrictions on Foreign Investments and Overseas Remittances

In general,  when
 non-Brazilians  receive any distribution on their investments,  they can only remit
outside  Brazil  the  amounts  received  if their  investments  are  registered  with
 the  Central  Bank.  The Depositarys  interest in the Units is registered  as a foreign
 investment  with the Central  Bank.  With this registration,   the   Custodian   is
 able  (if  foreign   exchange   is   available)   to  convert   Brazilian
currency-denominated  distributions  into U.S. dollars and remit them abroad to the
Depositary for distribution to holders of GDSs.

GDSs holders may cancel
their GDSs and exchange  them for Units.  When holders of GDSs  exchange  GDSs for the
underlying Units, they are entitled to:

- sell the Units on the  Brazilian  Stock  Exchange and remit the
proceeds  abroad  within five business               days;
- freely convert the investment in the Units to foreign  direct
 investment in Brazil  provided that the               investor  registers  with the
Brazilian  Securities  Exchange  Commission  and the Central Bank -
              registration  with the Central  Bank must be done  within 30 days as from
the date they  withdraw               the Units from the Depositary  Receipt program,
 establishing a representative of its investments               in Brazil.

Any individual,
 corporation,  partnership entity,  resident or domiciled abroad may register with the
Brazilian  Securities  and Exchange  Commission  - CVM and the Central  Bank as a foreign
 investor and is then allowed to invest in any type of investment  available to Brazilian
 citizens in the  financial and  securities markets.

Holders  who do not comply
 with the  registration  rules  described  above may still  register  their investment,
 but the  registration  process will be subject to detailed  procedures  established by
the Central Bank and may take  longer  than five  business  days.  Holders  who do not
comply  with these rules may also be subject to certain monetary penalties.

Investments  registered
 with the Central  Bank may still be affected by changes in  Brazilian  law or
regulations and additional  restrictions  imposed in the future.  These  restrictions
could apply to holders of GDSs in the following cases:

- the disposition of underlying Units or underlying shares;
- the repatriation of the proceeds from any such disposition;
- the remittance abroad of distributions made by us or Unibanco
Holdings.

We do not know whether any
 restrictions  are likely to be imposed and, if imposed,  we cannot predict the duration
or impact of the restrictions.

TAXATION

Taxation of GDSs and Units  in Brazil

THE FOLLOWING  DISCUSSION  DESCRIBES THE MATERIAL  BRAZILIAN TAX
 CONSIDERATIONS  RELEVANT TO THE  ACQUISITION, OWNERSHIP AND DISPOSITION OF GDSs or UNITS.

General

We  describe  below  the
main  Brazilian  income  tax  consequences  deriving  from  the  acquisition, ownership
 and  disposition  of GDS or Units.  We have  considered  the tax laws and  regulations
 in effect in Brazil on the date of this annual report,  which are subject to change.  We
have also  considered that there is no income tax treaty between Brazil and the United
States.

This  description  does
not  contain  all tax  considerations  that may be  relevant  to a decision to acquire
Units or GDSs.  You should consult your own tax advisors as to the tax  consequences
 deriving from the acquisition,  ownership  and  disposition  of GDS or Units that may
apply to you,  including  the effect of any U.S. state or local or foreign tax laws.

With respect to the GDSs,
we have also based this  description  on  representations  of the Depositary of our GDS
 Programme  maintained  in the U.S.  and on the  assumption  that  each  obligation  in
the  Deposit Agreement and any related documents will be performed in accordance with its
terms.

Brazilian Tax
Considerations

General

Holders of GDSs or Units
are subject to Brazilian  taxes,  under certain  conditions,  in the event of receipt of
dividends or interest, as well as in capital gains.

CPMF

When  Unibanco  Holdings
 pays  dividends  or  interest,  such  payment is  subject  to the  Temporary
Contribution on Financial Transactions  CPMF.

Taxation of Dividends

If we or Unibanco
 Holdings pay dividends with respect to profits  accrued  before  December 31, 1995, such
payment will be subject to withholding income.

There is no  Brazilian
 income tax due on the payment of  dividends  by us or Unibanco  Holdings  with respect
to profits accruing after December 31, 1995.

Taxation of Stock Dividends

If we or Unibanco
 Holdings pay stock  dividends with respect to profits  accrued before  December 31,
1995, such payment will be subject to withholding income tax.

There is no  Brazilian
 income tax due on stock  dividends  with  respect to  profits  accruing  after December
31, 1995.

Taxation of Interest
Distribution

When  we or  Unibanco
 Holdings  pay  interest  accrued  at any  time,  such  payment  is  subject  to
withholding  income tax,  according to Brazilian law, at the rate of 15%. Brazil has
entered into a treaty with Japan  pursuant to which the rate of  withholding  tax due
upon the  distribution  of interest to  residents of Japan is 12.5%.  Currently,  this is
the only treaty in force in Brazil, which establishes a maximum income tax rate below 15%.

Taxation of Gains

If you sell your Units
realizing a gain over this sale, you will pay tax on gains at a rate of 20%.

Tax free transactions

There is no Brazilian tax
levied on:

- the exchange of GDSs for Units;
- exercise of preemptive rights relating to the shares underlying
the Units;
- sale or assignment by the Depositary for the Units  underlying
the GDSs of preemptive  rights relating               to the shares underlying the Units.

Taxation of Tax Haven
Residents

Under  Brazilian  law, a
tax haven is a country or state that does not tax income or that taxes income at a rate
 lower  than 20%.  If you are  resident  of a tax haven as defined  by  Brazilian  law,
 the same tax treatment  applicable to Brazilian residents will apply to you,
 independently of registration with the Central Bank or the Securities Exchange
Commission.

Assumptions regarding the
GDSs holders

We assume in our
description below that:

- you are not a Brazilian resident; and
- your investment in GDSs was made under our Depositary  Receipt
program and  consequently is registered               with the Central Bank.

Taxation of Gains

As a  non-Brazilian
 holder  of GDSs,  if you sell your  GDSs  outside  of  Brazil,  there  will be no
taxation in Brazil on the gains realized.

As holder of GDSs you may
cancel your GDSs  exchanging  them for Units.  However,  as a  non-Brazilian holder of
Units:

- you should  register  your  direct  investment  in Brazil  with
the  Central  Bank of Brazil  within a               specified time, in which case the
foreign currency amount of your investment  registered with the               Central
Bank will be  determined  based on the market value of the Units on the date you withdrew
              them from the program; and
- you  should  register  your  direct  investment  in  Brazil
 with the  Brazilian  Securities  Exchange               Commission - CVM.

If you register your
direct investments in Units:

- with the Central  Bank within a specified  time,  an eventual
 increase in value of the Units from the               date you acquired them abroad to
the date you withdrew them from the Depositary  Receipt  program               will be
exempt from taxation.
- with the  Brazilian  Securities  Exchange  Commission - CVM and
is not a tax haven  resident,  you are               exempt from the  payment of tax on
gains  realized on the sale of Units.  However,  this  current               preferential
treatment may be changed at any time.

If you do not register your direct investments in Units:

- with the Central Bank within the specified  time, the
difference,  in reais,  between the value of the               Units on the date of
registration  of the Units with the Central Bank for the Depositary  Receipt
              program and the value of  acquisition  of the GDSs  converted  into reais
will be considered as a               gain subject to Brazilian tax at a rate of 20%.
- with the Central Bank, you will not be able to enter into
foreign  exchange  transactions  to transfer               outside Brazil the proceeds of
your investment  (for further  discussion on this topic please see
 Item 10, Exchange Rates and Exchange Control).
- with the  Brazilian  Securities  Exchange  Commission,  and you
sell your Units in Brazil  realizing a               gain  over  this  sale,  you  will
pay tax on gains  at a rate of 20%.  The  taxable  gain is the               difference
 between  the  amount  in reais  realized  on the  sale of the  Units  and the  amount
              registered with the Central Bank converted into reais on the date of the
registration.

Holders of GDSs will be
subject to the following  additional  Brazilian  taxes if they exchange  their GDSs for
the underlying Units, therefore directly investing in Brazil:

- if you (i) exchange  your GDSs for Units and (ii) you do not
register your investment with the Central               Bank within the specified time,
the difference,  in reais,  between the value of the Units on the               date of
 registration  of the Units with the Central Bank for the Depositary  Receipt program and
              the value of  acquisition  of the GDSs  converted into reais will be
considered as a gain subject               to Brazilian tax.
- if you (i) exchange  your GDSs for Units;  (ii) you do not
register your investment with the Brazilian               Securities  Commission and (iii) you
sell your Units in Brazil and realize a gain over this sale,               you will pay a
tax on such gains.
- if you  (i) exchange  your GDSs for Units and (ii) you are a
tax haven  resident,  the same  treatment               applicable to Brazilian residents
will apply to you.

CPMF

The CPMF may be applicable
to the ownership,  acquisition  or disposition of Units.  If you sell Units in  Brazil,
 you will  receive  proceeds  in reais and will  have to enter  into a  foreign  currency
 exchange transaction to remit the proceeds  abroad.  The CPMF will be levied on the
reais amount of the transaction at a maximum rate of 0.38%.

The CPMF is also withheld,
 at the rates  specified  above, on the payment of dividends or interest by Unibanco
Holdings to holders of GDS under our Depositary Receipt program.

Other Brazilian Taxes

There are no other
Brazilian taxes  applicable to the ownership,  acquisition or disposition of GDS or Units
by a non-Brazilian holder.

DOCUMENTS ON DISPLAY

We are subject to the informational requirements of the Securities
Exchange Act of 1934, as amended, and to the Brazilian rules and regulations applicable
to Brazilian public companies and in accordance with these requirements, we file reports
and other information with the Securities and Exchange Commission and with the Brazilian
Securities Comission (Comissão de Valores Mobiliários - CVM).  These materials, including
this annual report and the exhibits hereto, may be read or copied at the SEC's public
reference room at 450 Fifth Street, N.W., Washington, D.C. 20549 and at the CVM at Rua 7
de setembro, 111 Rio de Janeiro, RJ 20159-900.  Please call the SEC at 1-800-SEC-0330 for
further information on the public reference room or the CVM at 0800-24-1616.  The SEC and
the CVM also maintain a web site at http://www.sec.gov or http://www.cvm.gov.br that
provides online access to reports, proxy statements and other information regarding
registrants that file electronically with the SEC and with the CVM.

Item 11. QUANTITATIVE AND
QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our main risks during 2002 were
concentrated on the interest rate risk of our foreign positions and equity in foreign
branches and subsidiaries. This is in line with our strategy of having a long position in foreign exchange,
due to the recent uncertainty over the Brazilian economy. We employ the value at
risk, or VAR, methodology for evaluating our risks. VAR is generally defined as the
potential one-day loss in portfolio value from adverse market movements and is based on
probability analysis. We consider a 99.0% confidence level (2.33 standard deviation) to
calculate our VAR, and we calculate VAR for each business day. Procedures such as backtesting
are used to ensure the models precision and consistency. The analysis
captures all financial assets and liabilities, including derivative instruments. We also
make use of stress testing evaluation, based on hypothetical macroeconomic scenarios, in
order to prevent strong adverse impacts on the results.

All arbitrage decisions take place at
our headquarters in São Paulo. These transactions are processed by independent back
offices in São Paulo. This segregation of duties helps to ensure the accuracy of
the information about our positions, and the centralization of arbitrage decisions allows
us to better appreciate and evaluate risks inherent in arbitrage transactions.

Our financial committee, which
consists of representatives from senior management, meets monthly. In this forum, the
position limits for our treasury unit are established. Aspects such as market
volatilities, liquidity, institutional needs and potential risks are also taken into
account in making these decisions. Extraordinary meetings of the financial committee are
held if unexpected changes in the macroeconomic environment arise that generate
opportunities and/or risks.

Our risk committee also meets every
month, with representatives of the board, business directors and risk management
professionals. The committees main objective is to review policies related to
treasury, brokerage, products, custody, etc. Limit policies are also defined in this
committee, including those for the trading desk. The risk and financial committees consult
one another on proposals and agree on them.

The treasury units cash
committee meets daily. The cash committee:

- discusses the macroeconomic environment;
- discusses positions taken and the related risks; and
- decides positions and exposures in accordance with policy
limits.

We have been gradually including the
companies we have acquired in our VAR calculation.

Backtesting and Stress
testing

We use backtesting analysis to verify
and control the efficiency of our VAR processes. Both the single and double tail
measurements of VAR against profit and losses work as an effective tool under normal
conditions. Non-regular market movements as those seen in 2002 Brazilian financial markets
are clearly defined as stress and are not aimed by the back test but incorporated in the
stress test. On regular basis scenarios for maintenance, quick worsening, large worsening
and enhancement of market conditions are conducted and revised.

Non-trading Activities

In order to be consistent, both
trading and non-trading activities are measured and controlled by the same tools and
methodologies. The positions assumed by the us with clients and hedged in the markets are
evaluated by VAR methodologies.

The following table sets forth the
VAR calculated on our overall risk portfolio during 2002 and 2001.

|                                            | Average             | Minimum | Maximum | At December 31,
|------------------------------------------- | ------------------- | ------- | ------- | ---------------
|                                            |                     |         |         |                
|                                            | (in millions of R$)
|2002                                       
|Interest rate risk on domestic position:   
|Fixed                                       | R$6.2               | R$2.0   | R$18.3  | R$2.9          
|Floating - IGPM indexed                     | 2.5                 | 0.1     | 8.7     | 7.3            
|Floating - TR indexed                       | 0.6                 | 0.2     | 1.0     | 0.3            
|Floating - US$ indexed                      | 18.5                | 2.9     | 67.6    | 6.7            
|Foreign exchange risk - US$                 | 12.40               | 0.01    | 89.5    | 5.7            
|Stock market                                | 4.3                 | 3.2     | 6.6     | 3.5            
|Interest rate risk on foreign position      | 126.5               | 32.5    | 199.9   | 90.1           
|Structured position:                       
|Equity of foreign branches and subsidiaries | 53.9                | 12.9    | 110.9   | 80.0           
|Consolidated risk                           | R$92.8              | R$21.9  | R$192.5 | R$96.6         

|                                            | Average             | Minimum | Maximum | At December 31,
|------------------------------------------- | ------------------- | ------- | ------- | ---------------
|                                            |                     |         |         |                
|2001                                        | (in millions of R$)
|                                           
|Interest rate risk on domestic position:   
|Fixed                                       | R$4.5               | R$1.6   | R$9.3   | R$5.4          
|Floating - IGPM indexed                     | 0.6                 | -       | 6.0     | 2.9            
|Floating - TR indexed                       | 0.5                 | -       | 1.8     | 0.8            
|Floating - US$ indexed                      | 6.3                 | 0.5     | 18.0    | 9.9            
|Foreign exchange risk - US$                 | 1.4                 | 0.1     | 6.8     | 3.7            
|Stock market                                | 6.9                 | 1.8     | 19.3    | 5.0            
|Interest rate risk on foreign position      | 27.9                | 17.3    | 41.7    | 31.2           
|Structured position:                       
|Equity of foreign branches and subsidiaries | 27.9                | 1.5     | 64.2    | 26.9           
|Consolidated risk                           | R$38.6              | R$18.4  | R$74.4  | R$48.1         

We calculate VAR on each business
day. The following table shows our VAR during 2002 and 2001, as measured by the percentage
of business days during the year on which VAR fell within the specified real levels.

|                    | % of business days on which VAR fell within specified levels
|------------------- | ------------------------------------------------------------
|                    |                                                             
|                    | 2001                                                        
|                    |                                                             
|(in millions of R$)
|up to R$20          | 1.6%                                                        
|over R$20 to R$40   | 54.9                                                        
|over R$40 to R$60   | 33.7                                                        
|over R$60 to R$80   | 9.8                                                         
|over R$80 to R$100  | -                                                           
|over R$100 to $120  | -                                                           
|over R$120 to $140  | -                                                           
|over R$140 to $160  | -                                                           
|over R$160 to $180  | -                                                           
|over R$180 to $200  | -                                                           
|                    |                                                             
|                    | 100.0%                                                      
|                    |                                                             

In Brazil the year 2002 was
absolutely characterized by an economical and political turmoil that stressed the
financial market to unexpected levels. As a consequence, very conservative statistical
models counting quite often on high confidence levels, presented justified large risk
numbers throughout the year in accordance with the huge volatility observed in the markets

For more information related to
market risk see Item 4  Information on the Company  Principal Business
Activities  Risk Management  Market Risk.

ITEM 12. DESCRIPTION OF
SECURITIES OTHER THAN EQUITY SECURITIES

Not applicable.

PART II

ITEM 13. DEFAULTS,
DIVIDEND ARREARAGES AND DELINQUENCIES

Not Applicable,

ITEM 14. MATERIAL
MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

Not Applicable.

ITEM 15. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

In accordance with the
rules of the Securities and Exchange Commission, we and Unibanco Holdings
maintain disclosure controls and procedures and, under the supervision and with
the participation of our and Unibanco Holdings management, including the
Chief Executive Officers and Chief Financial Officers, have evaluated the
effectiveness of the design and operation of these disclosure controls and
procedures within 90 days prior to the date of this report. Based on that
evaluation, our and Unibanco Holdings Chief Executive Officers and Chief
Financial Officers concluded that, as of the date of the evaluation, our and
Unibanco Holdings disclosure controls and procedures were adequate and
effective.

Change in Internal Controls

There were no significant
changes in our and Unibanco Holdings internal controls or in other factors
that could significantly affect these internal controls subsequent to the date
on which the Chief Executive Officers and the Chief Financial Officers completed their
evaluation of these controls until the date hereof.

ITEM 16. [RESERVED]

PART III

ITEM 17. FINANCIAL
STATEMENTS

We and Unibanco Holdings have
responded to Item 18 in lieu of responding to this item.

ITEM 18. FINANCIAL
STATEMENTS

Reference is made to Item 19 for a
list of all financial statements filed as part of this annual report.

ITEM 19. FINANCIAL
STATEMENTS & EXHIBITS

(a) Financial Statements

The  audited   consolidated   financial  statements  of  Unibanco
 Holdings  S.A.  and  subsidiary, Unibanco-União  de Bancos  Brasileiros  S.A. and
 subsidiaries  together with the reports of Deloitte Touche Tohmatsu  Auditores
 Independentes  as of December  31, 2001 and 2002 and for the years ended  December  31,
2001 and 2002 and of  PricewaterhouseCoopers  Auditores  Independentes  as of December
 31, 2000 and for the year ended  December 31, 2000 and Credicard  S.A.  Administradora
 de Cartões de Crédito,  together with the report of KPMG Auditores Independentes
thereon, filed as part of this annual reports are as follows:

|Independent auditors' report                                                                                    | F-1 
|--------------------------------------------------------------------------------------------------------------- | ----
|                                                                                                               
|Report of independent accountants                                                                               | F-2 
|                                                                                                               
|Unibanco Holdings S.A. and subsidiary                                                                          
|                                                                                                               
|Consolidated balance sheets as of December 31, 2001 and 2002                                                    | F-3 
|                                                                                                               
|Consolidated statements of income for the years ended December 31, 2000, 2001 and 2002                          | F-4 
|                                                                                                               
|Consolidated statements of changes in stockholders equity for the years ended
December 31, 2000, 2001 and 2002 | F-6 
|                                                                                                               
|Consolidated statements of cash flows for the years ended December 31, 2000,
2001 and 2002                      | F-7 
|                                                                                                               
|Unibanco - União de Bancos Brasileiros S.A. and subsidiaries                                                   
|                                                                                                               
|Consolidated balance sheets as of December 31, 2001 and 2002                                                    | F-8 
|                                                                                                               
|Consolidated statements of income for the years ended December 31, 1999, 2000 and 2001                          | F-9 
|                                                                                                               
|Consolidated statements of changes in stockholders equity for the years ended
December 31, 2000, 2001 and 2002 | F-11
|                                                                                                               
|Consolidated statements of cash flows for the years ended December 31, 2000,
2001 and 2002                      | F-12
|                                                                                                               
|Notes to the consolidated financial statements                                                                  | F-13
|                                                                                                               
|Credicard S.A. Administradora de Cartões de Crédito                                                            
|                                                                                                               
|Independent auditors report                                                                                    | F-62
|                                                                                                               
|Balance sheets as of December 31, 2001 and 2002                                                                 | F-63
|                                                                                                               
|Statements of earnings for the years ended December 31, 2001 and 2002                                           | F-64
|                                                                                                               
|Statements of changes in shareholders equity for the years ended December 31, 2001 and 2002                    | F-65
|                                                                                                               
|Statements of changes in financial position for the years ended December 31, 2001 and 2002                      | F-66
|                                                                                                               
|Notes to the financial statements                                                                               | F-67



(b)      Exhibits

- Articles of Association of Unibanco - União de Bancos
 Brasileiros  S.A., as amended and  consolidated          on April 28, 2003,
(English-language version).
- Articles of Association  of Unibanco  Holdings  S.A., as
amended and  consolidated  on April 28, 2003,          (English-language version)
- Closing Agreement (Acordo de Fechamento),  dated as of June 28,
2002, among Unibanco - União de Bancos          Brasileiros  S.A.,  Banco  Bradesco S.A.,
 União de Comércio  Participações  Ltda.,  PT Prime S.G.P.S.          S.A.,  Bus Serviços
de  Telecomunicações  S.A., Bus Holding S.A.,  Primesys S.A. and Portugal  Telecom
         S.A. together with its English-language version.
- List of our Subsidiaries.
- Certifications pursuant to 18 United States Code § 1350.

SIGNATURES

Pursuant to the  requirements  of Section 12 of the Securities  Exchange Act of 1934, the  registrants  certify that they meet
all of the  requirements  for  filing  on Form 20-F and have  duly  caused  this  annual  report  to be  signed on their  behalf by the
undersigned, thereunto duly authorized.

`UNIBANCO - UNIÃO DE BANCOS BRASILEIROS S.A.




                          By:  /s/ Fernando Barreira Sotelino
                               ___________________________________
                               Name:  Fernando Barreira Sotelino
                               Title: Executive President of the Wholesale Banking Group



                          By:  /s/ Geraldo Travaglia Filho
                               ___________________________________
                               Name:  Geraldo Travaglia Filho
                               Title: Executive Officer




                              UNIBANCO HOLDINGS S.A.



                          By:  /s/ Israel Vainboim
                               ___________________________________
                               Name:   Israel Vainboim
                               Title:  Executive President



                          By:  /s/ Geraldo Travaglia Filho
                               ___________________________________
                               Name:  Geraldo Travaglia Filho
                               Title: Officer


Dated:  June 27, 2003`



CERTIFICATION

I, Fernando Barreira Sotelino, certify that:

1. I have reviewed this annual report on Form 20-F of Unibanco - União de Bancos Brasileiros S.A.;

2. Based on my  knowledge,  this annual  report does not contain any untrue  statement  of a material  fact or omit to state a material
fact necessary to make the statements  made, in light of the  circumstances  under which such statements were made, not misleading with
respect to the period covered by this annual report;

3. Based  on my knowledge,  the financial statements,  and other financial information included in this annual report, fairly present in
all material  respects the  financial  condition,  results of operations  and cash flows of the  registrant as of, and for, the periods
presented in this annual report;

4. The  registrant's  other  certifying  officers and I are  responsible  for  establishing  and  maintaining  disclosure  controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

| | a. | designed  such  disclosure  controls and  procedures  to ensure that  material  information  relating to the  registrant,
              including its consolidated  subsidiaries,  is made known to us by others within those entities,  particularly  during the
              period in which this annual report is being prepared;
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | b. | evaluated the effectiveness of the registrant's  disclosure  controls and procedures as of a date within 90 days prior to
the filing date of this annual report (the "Evaluation Date"); and                                                                                                                                         
| | c. | presented in this annual report our conclusions about the  effectiveness of the disclosure  controls and procedures based
on our evaluation as of the Evaluation Date;                                                                                                                                                               

5. The registrant's other certifying officers and I have disclosed,  based on our most recent evaluation,  to the registrant's auditors
and the audit committee of registrant's board of directors (or persons performing the equivalent function):

| | a. | all  significant  deficiencies  in the  design or  operation  of  internal  controls  which  could  adversely  affect the
registrant's  ability to record,  process,  summarize and report  financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | b. | any fraud,  whether or not material,  that  involves  management  or other  employees who have a significant  role in the
registrant's internal controls; and                                                                                                                                                 

6. The  registrant's  other  certifying  officers and I have  indicated  in this annual  report  whether or not there were  significant
changes in internal controls or in other factors that could  significantly  affect internal controls subsequent to the date of our most
recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Dated:  June 27, 2003

`By: /s/ Fernando Barreira Sotelino
                               ___________________________________
                               Name:  Fernando Barreira Sotelino
                               Title: Executive President of the Wholesale Banking Group`



CERTIFICATION

I, Joaquim Francisco de Castro Neto, certify that:

1. I have reviewed this annual report on Form 20-F of Unibanco - União de Bancos Brasileiros S.A.;

2. Based on my  knowledge,  this annual  report does not contain any untrue  statement  of a material  fact or omit to state a material
fact necessary to make the statements  made, in light of the  circumstances  under which such statements were made, not misleading with
respect to the period covered by this annual report;

3. Based on my knowledge,  the financial statements,  and other financial information included in this annual report, fairly present in
all material  respects the  financial  condition,  results of operations  and cash flows of the  registrant as of, and for, the periods
presented in this annual report;

4. The  registrant's  other  certifying  officers and I are  responsible  for  establishing  and  maintaining  disclosure  controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

| | a. | designed  such  disclosure  controls and  procedures  to ensure that  material  information  relating to the  registrant,
including its consolidated  subsidiaries,  is made known to us by others within those entities,  particularly  during the
period in which this annual report is being prepared;
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | b. | evaluated the effectiveness of the registrant's  disclosure  controls and procedures as of a date within 90 days prior to
the filing date of this annual report (the "Evaluation Date"); and                                                                                                             
| | c. | presented in this annual report our conclusions about the  effectiveness of the disclosure  controls and procedures based
on our evaluation as of the Evaluation Date;                                                                                                                                   

5. The registrant's other certifying officers and I have disclosed,  based on our most recent evaluation,  to the registrant's auditors
and the audit committee of registrant's board of directors (or persons performing the equivalent function):

| | a. | all  significant  deficiencies  in the  design or  operation  of  internal  controls  which  could  adversely  affect the
registrant's  ability to record,  process,  summarize and report  financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | b. | any fraud,  whether or not material,  that  involves  management  or other  employees who have a significant  role in the
registrant's internal controls; and                                                                                                                                                 

6. The  registrant's  other  certifying  officers and I have  indicated  in this annual  report  whether or not there were  significant
changes in internal controls or in other factors that could  significantly  affect internal controls subsequent to the date of our most
recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Dated:  June 27, 2003

`By:  /s/ Joaquim Francisco de Castro Neto
                               ___________________________________
                               Name: Joaquim Francisco de Castro Neto
                               Title: Executive President of the Retail Banking Group`



CERTIFICATIONS

I, Geraldo Travaglia Filho, certify that:

1. I have reviewed this annual report on Form 20-F of Unibanco - União de Bancos Brasileiros S.A.;

2. Based on my  knowledge,  this annual  report does not contain any untrue  statement  of a material  fact or omit to state a material
fact necessary to make the statements  made, in light of the  circumstances  under which such statements were made, not misleading with
respect to the period covered by this annual report;

3. Based on my knowledge,  the financial statements,  and other financial information included in this annual report, fairly present in
all material  respects the  financial  condition,  results of operations  and cash flows of the  registrant as of, and for, the periods
presented in this annual report;

4. The  registrant's  other  certifying  officers and I are  responsible  for  establishing  and  maintaining  disclosure  controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

| | a. | designed  such  disclosure  controls and  procedures  to ensure that  material  information  relating to the  registrant,
              including its consolidated  subsidiaries,  is made known to us by others within those entities,  particularly  during the
              period in which this annual report is being prepared;
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | b. | evaluated the effectiveness of the registrant's  disclosure  controls and procedures as
of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and                                                                                                                                         
| | c. | presented in this annual report our conclusions about the  effectiveness of the disclosure  controls and procedures based
on our evaluation as of the Evaluation Date;                                                                                                                                                               

5. The registrant's other certifying officers and I have disclosed,  based on our most recent evaluation,  to the registrant's auditors
and the audit committee of registrant's board of directors (or persons performing the equivalent function):

| | a. | all  significant  deficiencies  in the  design or  operation  of  internal  controls  which  could  adversely  affect the
registrant's  ability to record,  process,  summarize and report  financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | b. | any fraud,  whether or not material,  that  involves  management  or other  employees who have a significant  role in the
registrant's internal controls; and                                                                                                                                                 

6. The  registrant's  other  certifying  officers and I have  indicated  in this annual  report  whether or not there were  significant
changes in internal controls or in other factors that could  significantly  affect internal controls subsequent to the date of our most
recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Dated:  June 27, 2003

`By: /s/ Geraldo Travaglia Filho
                               ___________________________________
                               Name: Geraldo Travaglia Filho
                               Title: Executive Officer as chief financial officer`



CERTIFICATION

I, Israel Vainboim, certify that:

1. I have reviewed this annual report on Form 20-F of Unibanco Holdings S.A.;

2. Based on my  knowledge,  this annual  report does not contain any untrue  statement  of a material  fact or omit to state a material
fact necessary to make the statements  made, in light of the  circumstances  under which such statements were made, not misleading with
respect to the period covered by this annual report;

3. Based on my knowledge,  the financial statements,  and other financial information included in this annual report, fairly present in
all material  respects the  financial  condition,  results of operations  and cash flows of the  registrant as of, and for, the periods
presented in this annual report;

4. The  registrant's  other  certifying  officers and I are  responsible  for  establishing  and  maintaining  disclosure  controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

| | a. | designed  such  disclosure  controls and  procedures  to ensure that  material  information  relating to the  registrant,
including its consolidated  subsidiaries,  is made known to us by others within those entities,  particularly  during the
period in which this annual report is being prepared;
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | b. | evaluated the effectiveness of the registrant's  disclosure  controls and procedures as of a date within 90 days prior to
the filing date of this annual report (the "Evaluation Date"); and                                                                                                             
| | c. | presented in this annual report our conclusions about the  effectiveness of the disclosure  controls and procedures based
on our evaluation as of the Evaluation Date;                                                                                                                                   

5. The registrant's other certifying officers and I have disclosed,  based on our most recent evaluation,  to the registrant's auditors
and the audit committee of registrant's board of directors (or persons performing the equivalent function):

| | a. | all  significant  deficiencies  in the  design or  operation  of  internal  controls  which  could  adversely  affect the
registrant's  ability to record,  process,  summarize and report  financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | b. | any fraud,  whether or not material,  that  involves  management  or other  employees who have a significant  role in the
registrant's internal controls; and                                                                                                                                                 

6. The  registrant's  other  certifying  officers and I have  indicated  in this annual  report  whether or not there were  significant
changes in internal controls or in other factors that could  significantly  affect internal controls subsequent to the date of our most
recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Dated:  June 27, 2003

`By: /s/ Israel Vainboim
                              ___________________________________
                               Name: Israel Vainboim
                               Title: Executive President`



CERTIFICATION

I, Geraldo Travaglia Filho, certify that:

1. I have reviewed this annual report on Form 20-F of Unibanco Holdings S.A.;

2. Based on my  knowledge,  this annual  report does not contain any untrue  statement  of a material  fact or omit to state a material
fact necessary to make the statements  made, in light of the  circumstances  under which such statements were made, not misleading with
respect to the period covered by this annual report;

3. Based on my knowledge,  the financial statements,  and other financial information included in this annual report, fairly present in
all material  respects the  financial  condition,  results of operations  and cash flows of the  registrant as of, and for, the periods
presented in this annual report;

4. The  registrant's  other  certifying  officers and I are  responsible  for  establishing  and  maintaining  disclosure  controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

| | a. | designed  such  disclosure  controls and  procedures  to ensure that  material  information  relating to the  registrant,
including its consolidated  subsidiaries,  is made known to us by others within those entities,  particularly  during the
period in which this annual report is being prepared;
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | b. | evaluated the effectiveness of the registrant's  disclosure  controls and procedures as of a date within 90 days prior to
the filing date of this annual report (the "Evaluation Date"); and                                                                                                             
| | c. | presented in this annual report our conclusions about the  effectiveness of the disclosure  controls and procedures based
on our evaluation as of the Evaluation Date;                                                                                                                                   

5. The registrant's other certifying officers and I have disclosed,  based on our most recent evaluation,  to the registrant's auditors
and the audit committee of registrant's board of directors (or persons performing the equivalent function):

| | a. | all  significant  deficiencies  in the  design or  operation  of  internal  controls  which  could  adversely  affect the
registrant's  ability to record,  process,  summarize and report  financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | b. | any fraud,  whether or not material,  that  involves  management  or other  employees who have a significant  role in the
registrant's internal controls; and                                                                                                                                                 

6. The  registrant's  other  certifying  officers and I have  indicated  in this annual  report  whether or not there were  significant
changes in internal controls or in other factors that could  significantly  affect internal controls subsequent to the date of our most
recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Dated:  June 27, 2003

`By: /s/ Geraldo Travaglia Filho
                           ___________________________________
                           Name: Geraldo Travaglia Filho
                           Title: Officer as chief financial officer`

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of
Unibanco Holdings S.A. and
Unibanco -União de Bancos Brasileiros S.A.

|1 | We have audited the accompanying  consolidated  balance sheets of Unibanco Holdings S.A.  (partially owned subsidiary of Moreira Salles
Group) and subsidiary,  (the Holdings) and Unibanco - União de Bancos  Brasileiros S.A. and subsidiaries  (the Bank) as of December
31, 2002 and 2001, and the related  consolidated  statements of income,  changes in  stockholders'  equity and cash flows for the years
then  ended.  These  consolidated  financial  statements  are the  responsibility  of the  Holdings'  and the  Bank's  management.  Our
responsibility is to express an opinion on these financial  statements based on our audits.  We did not audit the financial  statements
of Banco Fininvest S.A. and its  subsidiaries,  Banco1.net S.A.,  Unibanco AIG Seguros S.A. and its  subsidiaries,  Unibanco - União de
Bancos  Brasileiros  (Luxembourg)  S.A. and Unicorp Bank & Trust Ltd. as of December 31, 2001,  which  statements  which  reflected the
total assets,  interest income and net income of 13 percent, 15 percent and 36 percent,  respectively,  of the Holdings and 13 percent,
15 percent and 21 percent,  respectively,  of the Bank in 2001. Those statements were audited by other auditors whose reports have been
furnished to us and our opinion  insofar as it relates to the amounts  included for those  entities,  is based solely on the reports of
these auditors.
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
|2 | We conducted our audits in accordance with auditing standards generally accepted in the United States of
America. Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our audits and the reports of the
other auditors provide a reasonable basis for our opinion.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| 
|3 | In our  opinion,  based on our audits and on the reports of the other  auditors in 2001,  such  consolidated
financial statements present fairly, in all material respects,  the consolidated  financial position of both
the  Holdings  and the Bank as of  December  31,  2002  and  2001,  and the  consolidated  results  of their
operations  and their  cash  flows for the years  then  ended,  in  conformity  with  accounting  principles
generally accepted in the United States of America.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        



/s:/ Deloitte Touche TohmatsuAuditores Independentes June 23, 2003 São Paulo, Brazil



Report of Independent
Accountants

To the Board of Directors and
Stockholders of
Unibanco Holdings S.A. and of
Unibanco  União de Bancos
Brasileiros S.A.

In our opinion, the accompanying
consolidated statement of income, of cash flows and of changes in stockholders
equity present fairly, in all material respects, the results of the operations and the
cash flows of both Unibanco Holdings S.A and its subsidiary (the Company) and
of Unibanco  União de Bancos Brasileiros S.A. and its subsidiaries (the
Bank) for the year ended December 31, 2000 in conformity with accounting
principles generally accepted in the United States of America. These financial statements
are the responsibility of both the Companys and the Banks management; our
responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits of these statements in accordance with auditing standards
generally accepted in the United States of America, which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and evaluating
the overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

/s:/ PricewaterhouseCoopers
Auditores
Independentes

São Paulo, Brazil
April
2, 2001



Unibanco Holdings S.A. and Subsidiary
Consolidated Balance Sheets
(Expressed in millions of Brazilian Reais)

---

|                                                                        | As of December 31,
|----------------------------------------------------------------------- | ------------------
|                                                                        |                   
|                                                                        | 2001              
|                                                                        |                   
|Assets                                                                 
|Cash and due from banks                                                 | R$677             
|Interest-bearing deposits in other banks                                | 1,504             
|Federal funds sold and securities purchased under resale agreements     | 2,670             
|                                                                        |                   
|Cash and cash equivalents                                               | 4,851             
|Interest-bearing deposits in other banks                                | 339               
|Central Bank compulsory deposits                                        | 1,561             
|Trading assets, at fair value                                           | 11,803            
|Securities available for sale, at fair value                            | 3,132             
|Securities held to maturity, at cost                                    | 661               
|Loans                                                                   | 23,912            
|Allowance for loan losses                                               | (1,276)           
|                                                                        |                   
|Net loans                                                               | 22,636            
|Investments in unconsolidated companies                                 | 892               
|Premises and equipment, net                                             | 1,755             
|Goodwill, net                                                           | 1,012             
|Other intangible, net                                                   | 360               
|Other assets                                                            | 4,381             
|                                                                        |                   
|Total Assets                                                            | R$53,383          
|                                                                        |                   
|Liabilities                                                            
|Deposits from customers:                                               
|Demand deposits                                                         | R$2,003           
|Time deposits                                                           | 10,849            
|Savings deposits                                                        | 5,115             
|Deposits from banks                                                     | 579               
|                                                                        |                   
|Total deposits                                                          | 18,546            
|Federal funds purchased and securities sold under repurchase agreements | 7,587             
|Short-term borrowings                                                   | 6,241             
|Long-term debt                                                          | 7,847             
|Other liabilities                                                       | 6,538             
|                                                                        |                   
|Total Liabilities                                                       | 46,759            
|                                                                        |                   
|Commitments and contingent liabilities (Notes 28 and 29)                | -                 
|                                                                        |                   
|Minority interest in consolidated subsidiaries                          | 3,038             
|                                                                        |                   
|Stockholders' Equity                                                   
|Preferred stock "A"(Note 19)                                            | 143               
|Preferred stock "B"(Note 19)                                            | 970               
|Common stock(Note 19)                                                   | 819               
|Additional paid in capital                                              | -                 
|Treasury stock, at cost                                                 | (40)              
|Capital reserves                                                        | 479               
|Appropriated retained earnings                                          | 1,437             
|Accumulated other comprehensive losses                                  | (33)              
|Unappropriated retained earnings                                        | (189)             
|                                                                        |                   
|Total Stockholders' Equity                                              | 3,586             
|                                                                        |                   
|Total Liabilities and Stockholders' Equity                              | R$53,383          
|                                                                        |                   

The accompanying notes are an integral part of these consolidated
financial statements



Unibanco Holdings S.A. and Subsidiary
Consolidated Statement of
Income
(Expressed in millions of Brazilian Reais)

---

|                                                                                       | For the Year Ended December 31,
|-------------------------------------------------------------------------------------- | -------------------------------
|                                                                                       |                                
|                                                                                       | 2000                           
|                                                                                       |                                
|Interest Income                                                                       
|Interest and fees on loans                                                             | R$3,872                        
|Interest on federal funds sold and securities purchased under agreements to resell     | 452                            
|Interest on securities :                                                              
|Trading                                                                                | 1,086                          
|Available for sale                                                                     | 179                            
|Held to maturity                                                                       | 83                             
|Interest on deposits in other banks                                                    | 104                            
|Interest on Central Bank compulsory deposits                                           | 35                             
|Interest on other assets                                                               | 2                              
|                                                                                       |                                
|Total interest income                                                                  | 5,813                          
|                                                                                       |                                
|Interest Expense                                                                      
|Interest on deposits :                                                                
|From banks                                                                             | 18                             
|From customers :                                                                      
|Savings deposits                                                                       | 233                            
|Time deposits                                                                          | 683                            
|Interest on federal funds purchased and securities sold under agreements to repurchase | 438                            
|Interest on short-term borrowings                                                      | 583                            
|Interest on long-term debt                                                             | 1,150                          
|                                                                                       |                                
|Total interest expense                                                                 | 3,105                          
|                                                                                       |                                
|Net Interest Income                                                                    | 2,708                          
|Provision for loan losses                                                              | 676                            
|                                                                                       |                                
|Net Interest Income After Provision for Loan Losses                                    | 2,032                          
|                                                                                       |                                
|Non Interest Income                                                                   
|Fee and commission income                                                              | 1,134                          
|Trading income (expenses)                                                              | 91                             
|Net gain on securities                                                                 | -                              
|Net gain on foreign currency transactions                                              | 17                             
|Equity in results of unconsolidated companies                                          | 164                            
|Insurance, private retirement plan and pension investment contracts                    | 794                            
|Other non-interest income                                                              | 767                            
|                                                                                       |                                
|Total non-interest income                                                              | 2,967                          
|                                                                                       |                                
|Non Interest Expense                                                                  
|Salaries and benefits                                                                  | 1,234                          
|Administrative expenses                                                                | 1,524                          
|Amortization of goodwill and other intangibles                                         | 61                             
|Insurance, private retirement plan and pension investment contracts                    | 750                            
|Other non-interest expense                                                             | 718                            
|                                                                                       |                                
|Total non-interest expense                                                             | 4,287                          
|                                                                                       |                                
|Income Before Income Taxes and Minority Interest                                       | 712                            
|                                                                                       |                                
|Income Taxes                                                                          
|Current                                                                                | (150)                          
|Deferred                                                                               | 136                            
|                                                                                       |                                
|Total income taxes                                                                     | (14)                           
|                                                                                       |                                
|Income Before Minority Interest                                                        | 698                            
|Minority Interest                                                                      | (331)                          
|                                                                                       |                                
|Net Income                                                                             | R$367                          
|                                                                                       |                                

|                                                                      | For the Year Ended December 31,
|--------------------------------------------------------------------- | -------------------------------
|                                                                      |                                
|                                                                      | 2000                           
|                                                                      |                                
|Earnings per 1,000 shares                                             |                                
|Distributed earnings (dividends)                                     
|. Common                                                              | R$2.14                         
|. Preferred "A"                                                       | 2.36                           
|. Preferred "B"                                                       | 2.14                           
|Undistributed earnings                                               
|. Common                                                              | 2.81                           
|. Preferred "A"                                                       | 3.09                           
|. Preferred "B"                                                       | 2.81                           
|Basic and diluted earnings per share                                 
|. Common                                                              | 4.95                           
|. Preferred "A"                                                       | 5.45                           
|. Preferred "B"                                                       | R$4.95                         
|Weighted average shares outstanding (in millions) - Basic and diluted
|. Common                                                              | 33,475                         
|. Preferred "A"                                                       | 3,844                          
|. Preferred "B"                                                       | 36,450                         

The accompanying notes are an integral part of these consolidated
financial statements



Unibanco Holdings S.A. and Subsidiary
Consolidated Statement of
Changes in Stockholders' Equity
(Expressed in millions of Brazilian Reais, except for
number of shares)

---

|                                                              |                  | For the Year Ended December 31,
|------------------------------------------------------------- | ---------------- | -------------------------------
|                                                              |                  |                                
|                                                              | Number of shares | 2000                           
|                                                              |                  |                                
|Capital                                                      
|Preferred shares "A" - balance beginning and end of year      | 3,843,541,338    | R$143                          
|Preferred shares "B" - balance beginning of year              | 36,357,835,701   | 697                            
|Stock issued in private offering                              | 232,663,384      | -                              
|Stock issued in private offering                              | 6,758,000,000    | 262                            
|                                                              |                  |                                
|Balance end of year                                           | 43,348,499,085   | 959                            
|                                                              |                  |                                
|Common shares - balance beginning of year                     | 33,424,592,286   | 675                            
|Stock issued in private offering                              | 3,713,843,587    | 144                            
|                                                              |                  |                                
|Balance end of year                                           | 37,138,435,873   | 819                            
|                                                              |                  |                                
|Additional paid in capital - balance beginning of year        |                  | -                              
|Stock compensation plan                                       |                  | -                              
|                                                              |                  |                                
|Balance end of year                                           |                  | -                              
|                                                              |                  |                                
|Treasury stock, at cost balance beginning of year             | -                | -                              
|Purchase of own stock in a buy-back program                   | 922,147,249      | -                              
|Purchase of own stock                                         | 20,069           | -                              
|                                                              |                  |                                
|Balance end of year                                           | 922,167,318      | -                              
|                                                              |                  |                                
|Capital reserves - balance beginning of year                  |                  | 227                            
|Premium on stock issued                                       |                  | 252                            
|                                                              |                  |                                
|Balance end of year                                           |                  | 479                            
|                                                              |                  |                                
|Appropriated retained earnings                               
|Legal reserve - balance beginning of year                     |                  | 54                             
|Transfer from retained earnings                               |                  | 22                             
|                                                              |                  |                                
|Balance end of year                                           |                  | 76                             
|                                                              |                  |                                
|Unrealized income reserve  balance beginning of year         |                  | 697                            
|Transfer from retained earnings                               |                  | 244                            
|                                                              |                  |                                
|Balance end of year                                           |                  | 941                            
|                                                              |                  |                                
|Special dividends reserve  balance beginning and end of year |                  | 37                             
|                                                              |                  |                                
|Total appropriated retained earnings                          |                  | 1,054                          
|                                                              |                  |                                
|Accumulated other comprehensive losses                       
|Securities available for sale  balance beginning of year     |                  | (25)                           
|Securities available for sale, net of applicable taxes        |                  | 4                              
|                                                              |                  |                                
|Balance end of year                                           |                  | (21)                           
|                                                              |                  |                                
|Cash flow hedges, net of applicable taxes                     |                  | -                              
|                                                              |                  |                                
|Balance end of year                                           |                  | -                              
|                                                              |                  |                                
|Total accumulated other comprehensive losses                  |                  | (21)                           
|                                                              |                  |                                
|Unappropriated retained earnings  balance beginning of year  |                  | (45)                           
|                                                              |                  |                                
|Net income for the year                                       |                  | 367                            
|Dividends - Preferred shares class "A"                        |                  | (9)                            
|Dividends - Preferred shares class "B"                        |                  | (78)                           
|Dividends - Common shares                                     |                  | (72)                           
|Transfer to reserves                                          |                  | (266)                          
|                                                              |                  |                                
|Balance end of year                                           |                  | (103)                          
|                                                              |                  |                                
|Total Stockholders' Equity                                    |                  | R$3,330                        
|                                                              |                  |                                

The accompanying notes are an integral part of these consolidated
financial statements



Unibanco Holdings S.A. and Subsidiary
Consolidated Statement of Cash
Flows
(Expressed in millions of Brazilian Reais)

---

|                                                                                                   | For the Year Ended December 31,
|-------------------------------------------------------------------------------------------------- | -------------------------------
|                                                                                                   |                                
|                                                                                                   | 2000                           
|                                                                                                   |                                
|Operating activities                                                                              
|Net income                                                                                         | R$367                          
|Provision for loan losses                                                                          | 676                            
|Provision for insurance and private retirement claims                                              | 56                             
|Depreciation                                                                                       | 224                            
|Amortization of goodwill and other intangibles                                                     | 61                             
|Loss (gain) on unconsolidated companies                                                            | (202)                          
|Loss on foreclosed assets                                                                          | 49                             
|Loss on securities                                                                                 | -                              
|Loss (gain) on sales of premises and equipment                                                     | 1                              
|Deferred tax benefits                                                                              | (136)                          
|Equity in results of unconsolidated companies                                                      | (164)                          
|Stock-based compensation expenses                                                                  | -                              
|Minority interest of consolidated subsidiaries                                                     | 331                            
|Changes in assets and liabilities                                                                 
|Trading assets (increase) decrease                                                                 | 818                            
|Other assets increase                                                                              | (79)                           
|Other liabilities increase (decrease)                                                              | (267)                          
|                                                                                                   |                                
|Net cash provided by (used in) operating activities                                                | 1,735                          
|                                                                                                   |                                
|Investing activities                                                                              
|Net increase in deposits with banks                                                                | -                              
|Net (increase) decrease in Central Bank compulsory deposits                                        | 89                             
|Purchases of available for sale securities                                                         | (1,534)                        
|Proceeds from sales of available for sale securities                                               | 1,397                          
|Purchases of securities held to maturity                                                           | (588)                          
|Proceeds from matured and called securities held to maturity                                       | 1,399                          
|Net increase in loans                                                                              | (2,535)                        
|Acquisition of companies                                                                           | (1,063)                        
|Acquisition of minority interest                                                                   | -                              
|Purchases of premises and equipment                                                                | (316)                          
|Proceeds from sale of premises and equipment                                                       | 42                             
|Proceeds from sale of foreclosed assets                                                            | 27                             
|Purchases of unconsolidated companies                                                              | (112)                          
|Proceeds from sale of unconsolidated companies                                                     | 342                            
|Dividends received from unconsolidated companies                                                   | 85                             
|Minority interest of consolidated subsidiaries                                                     | 297                            
|                                                                                                   |                                
|Net cash used in investing activities                                                              | (2,470)                        
|                                                                                                   |                                
|Financing activities                                                                              
|Net increase in deposits                                                                           | 995                            
|Net increase (decrease) in federal funds purchased and securities sold under repurchase agreements | 5,510                          
|Net increase in short-term borrowings                                                              | 621                            
|Borrowings under long-term debt arrangements                                                       | 3,663                          
|Repayment of long-term debt                                                                        | (5,017)                        
|Purchase of own stocks                                                                             | -                              
|Proceeds from sale of common and preferred stock                                                   | 658                            
|Cash dividends paid                                                                                | (155)                          
|                                                                                                   |                                
|Net cash provided by financing activities                                                          | 6,275                          
|                                                                                                   |                                
|Net increase (decrease) in cash and cash equivalents                                               | 5,540                          
|Cash and cash equivalents at beginning of year                                                     | 5,447                          
|                                                                                                   |                                
|Cash and cash equivalents at end of year                                                           | R$10,987                       
|                                                                                                   |                                
|Supplemental:                                                                                     
|Cash paid for interest (Note 2(b))                                                                 | R$3,066                        
|Cash paid for income taxes                                                                         | 74                             
|Stock issued in exchange for purchased of minority interest                                        | -                              
|Loans transferred to foreclosed assets                                                             | 69                             
|Securities transferred from trading to available for sale                                          | -                              
|Securities transferred from trading to held to maturity                                            | -                              
|Dividends declared but not paid                                                                    | 77                             

The accompanying notes are an integral part of these consolidated
financial statements



Unibanco  União de Bancos Brasileiros S.A. and SubsidiariesConsolidated Balance Sheets
(Expressed in millions of Brazilian Reais)

---

|                                                                        | As of December 31,
|----------------------------------------------------------------------- | ------------------
|                                                                        |                   
|                                                                        | 2001              
|                                                                        |                   
|Assets                                                                 
|Cash and due from banks                                                 | R$677             
|Interest-bearing deposits in other banks                                | 1,504             
|Federal funds sold and securities purchased under resale agreements     | 2,670             
|                                                                        |                   
|Cash and cash equivalents                                               | 4,851             
|Interest-bearing deposits in other banks                                | 339               
|Central Bank compulsory deposits                                        | 1,561             
|Trading assets, at fair value                                           | 11,803            
|Securities available for sale, at fair value                            | 3,132             
|Securities held to maturity, at cost                                    | 661               
|Loans                                                                   | 23,912            
|Allowance for loan losses                                               | (1,276)           
|                                                                        |                   
|Net loans                                                               | 22,636            
|Investments in unconsolidated companies                                 | 892               
|Premises and equipment, net                                             | 1,755             
|Goodwill, net                                                           | 1,012             
|Other intangible, net                                                   | 360               
|Other assets                                                            | 4,380             
|                                                                        |                   
|Total Assets                                                            | R$53,382          
|                                                                        |                   
|Liabilities                                                            
|Deposits from customers:                                               
|Demand deposits                                                         | R$2,003           
|Time deposits                                                           | 10,858            
|Savings deposits                                                        | 5,115             
|Deposits from banks                                                     | 579               
|                                                                        |                   
|Total deposits                                                          | 18,555            
|Federal funds purchased and securities sold under repurchase agreements | 7,587             
|Short-term borrowings                                                   | 6,240             
|Long-term debt                                                          | 7,847             
|Other liabilities                                                       | 6,531             
|                                                                        |                   
|Total Liabilities                                                       | 46,760            
|                                                                        |                   
|Commitments and contingent liabilities (Notes 28 and 29)                | -                 
|Minority interest in consolidated subsidiaries                          | 667               
|                                                                        |                   
|Stockholders' Equity                                                   
|Preferred stock(Note 19)                                                | 1,549             
|Common stock(Note 19)                                                   | 2,142             
|Additional paid in capital                                              | -                 
|Treasury stock, at cost                                                 | (88)              
|Capital reserves                                                        | 295               
|Appropriated retained earnings                                          | 288               
|Accumulated other comprehensive losses                                  | (54)              
|Unappropriated retained earnings                                        | 1,823             
|                                                                        |                   
|Total Stockholders' Equity                                              | 5,955             
|                                                                        |                   
|Total Liabilities and Stockholders' Equity                              | R$53,382          
|                                                                        |                   

The accompanying notes are an integral part of these consolidated
financial statements



Unibanco - União de Bancos Brasileiros S.A. and Subsidiaries
Consolidated Statement of Income
(Expressed in millions of Brazilian Reais)

---

|                                                                                       | For the Year Ended December 31,
|-------------------------------------------------------------------------------------- | -------------------------------
|                                                                                       |                                
|                                                                                       | 2000                           
|                                                                                       |                                
|Interest Income                                                                       
|Interest and fees on loans                                                             | R$3,872                        
|Interest on federal funds sold and securities purchased under agreements to resell     | 452                            
|Interest on securities :                                                              
|Trading                                                                                | 1,086                          
|Available for sale                                                                     | 179                            
|Held to maturity                                                                       | 83                             
|Interest on deposits in other banks                                                    | 104                            
|Interest on Central Bank compulsory deposits                                           | 35                             
|Interest on other assets                                                               | 2                              
|                                                                                       |                                
|Total interest income                                                                  | 5,813                          
|                                                                                       |                                
|Interest Expense                                                                      
|Interest on deposits :                                                                
|From banks                                                                             | 18                             
|From customers :                                                                      
|Savings deposits                                                                       | 233                            
|Time deposits                                                                          | 683                            
|Interest on federal funds purchased and securities sold under agreements to repurchase | 438                            
|Interest on short-term borrowings                                                      | 583                            
|Interest on long-term debt                                                             | 1,150                          
|                                                                                       |                                
|Total interest expense                                                                 | 3,105                          
|                                                                                       |                                
|Net Interest Income                                                                    | 2,708                          
|Provision for loan losses                                                              | 676                            
|                                                                                       |                                
|Net Interest Income After Provision for Loan Losses                                    | 2,032                          
|                                                                                       |                                
|Non Interest Income                                                                   
|Fee and commission income                                                              | 1,134                          
|Trading income (expenses)                                                              | 91                             
|Net gain on securities                                                                 | -                              
|Net gain on foreign currency transactions                                              | 17                             
|Equity in results of unconsolidated companies                                          | 164                            
|Insurance, private retirement plan and pension investment contracts                    | 794                            
|Other non-interest income                                                              | 767                            
|                                                                                       |                                
|Total non-interest income                                                              | 2,967                          
|                                                                                       |                                
|Non Interest Expense                                                                  
|Salaries and benefits                                                                  | 1,234                          
|Administrative expenses                                                                | 1,524                          
|Amortization of goodwill and other intangibles                                         | 62                             
|Insurance, private retirement plan and pension investment contracts                    | 750                            
|Other non-interest expense                                                             | 718                            
|                                                                                       |                                
|Total non-interest expense                                                             | 4,288                          
|                                                                                       |                                
|Income Before Income Taxes and Minority Interest                                       | 711                            
|                                                                                       |                                
|Income Taxes                                                                          
|Current                                                                                | (149)                          
|Deferred                                                                               | 135                            
|                                                                                       |                                
|Total income taxes                                                                     | (14)                           
|                                                                                       |                                
|Income Before Minority Interest                                                        | 697                            
|Minority Interest                                                                      | (69)                           
|                                                                                       |                                
|Net Income                                                                             | R$628                          
|                                                                                       |                                

|                                                                      | For the Year Ended December 31,
|--------------------------------------------------------------------- | -------------------------------
|                                                                      |                                
|                                                                      | 2000                           
|                                                                      |                                
|Earnings per 1,000 shares                                            
|Distributed earnings (dividends)                                     
|. Common                                                              | R$2.23                         
|. Preferred                                                           | 2.46                           
|Undistributed earnings                                               
|. Common                                                              | 2.64                           
|. Preferred                                                           | 2.90                           
|Basic and diluted earnings per share                                 
|. Common                                                              | 4.87                           
|. Preferred                                                           | R$5.36                         
|Weighted average shares outstanding (in millions) - Basic and diluted
|. Common                                                              | 65,057                         
|. Preferred                                                           | 57,976                         

The accompanying notes are an integral part of these consolidated
financial statements



Unibanco  União de Bancos Brasileiros S.A. and Subsidiaries
Consolidated Statement of Changes in Stockholders Equity
(Expressed in millions of Brazilian Reais, except for number of shares)

---

|                                                                        |                  | For the Year Ended December 31,
|----------------------------------------------------------------------- | ---------------- | -------------------------------
|                                                                        |                  |                                
|                                                                        | Number of shares | 2000                           
|                                                                        |                  |                                
|Capital                                                                 |                  |                                
|Preferred shares - balance beginning of year                            | 58,207,281,836   | R$1,056                        
|Stock issued in private subscription                                    | 6,877,143,749    | 351                            
|Stock issued in private subscription                                    | 232,663,384      | -                              
|Transfer from reserves and retained earnings                            | -                | -                              
|                                                                        |                  |                                
|Balance end of year                                                     | 65,317,088,969   | 1,407                          
|                                                                        |                  |                                
|Common shares - balance beginning of year                               | 64,912,281,836   | 1,268                          
|Stock issued in private subscription                                    | 10,656,462,513   | 711                            
|Transfer from reserves                                                  | -                | -                              
|                                                                        |                  |                                
|Balance end of year                                                     | 75,568,744,349   | 1,979                          
|                                                                        |                  |                                
|Additional paid in capital  balance beginning of year                  |                  | -                              
|Stock compensation plan                                                 |                  | -                              
|                                                                        |                  |                                
|Balance end of year                                                     |                  | -                              
|                                                                        |                  |                                
|Treasury stock, at cost                                                
|Preferred shares - balance beginning of year                            | 324,523,855      | (5)                            
|Purchase of own stock in a buy-back program                             | 1,973,097,251    | -                              
|Purchase of own stock in a buy-back program                             | 41,440,138       | -                              
|                                                                        |                  |                                
|Balance end of year                                                     | 2,339,061,244    | (5)                            
|                                                                        |                  |                                
|Capital reserves                                                       
|Share premium  balance beginning of year                               |                  | 222                            
|Premium on stock issued                                                 |                  | 39                             
|                                                                        |                  |                                
|Balance end of year                                                     |                  | 261                            
|                                                                        |                  |                                
|Treasury stock sold  balance beginning and end of year                 |                  | 13                             
|                                                                        |                  |                                
|Fiscal incentive investment reserve  balance beginning and end of year |                  | 21                             
|                                                                        |                  |                                
|Total capital reserves                                                  |                  | 295                            
|                                                                        |                  |                                
|Appropriated retained earnings                                         
|Legal reserve - balance beginning of year                               |                  | 153                            
|Transfer from retained earnings                                         |                  | 37                             
|Transfer to capital stock                                               |                  | -                              
|                                                                        |                  |                                
|Balance end of year                                                     |                  | 190                            
|                                                                        |                  |                                
|Special dividends reserve  balance beginning and end of year           |                  | 64                             
|                                                                        |                  |                                
|Total appropriated retained earnings                                    |                  | 254                            
|                                                                        |                  |                                
|Accumulated other comprehensive losses                                 
|Securities available for sale  balance beginning of year               |                  | (41)                           
|Securities available for sale, net of applicable taxes                  |                  | 6                              
|                                                                        |                  |                                
|Balance end of year                                                     |                  | (35)                           
|                                                                        |                  |                                
|Cash flow hedges, net of applicable taxes                               |                  | -                              
|                                                                        |                  |                                
|Balance end of year                                                     |                  | -                              
|                                                                        |                  |                                
|Total accumulated other comprehensive losses                            |                  | (35)                           
|                                                                        |                  |                                
|Unappropriated retained earnings  balance beginning of year            |                  | 1,353                          
|Net income for the year                                                 |                  | 628                            
|Dividends - Preferred shares                                            |                  | (142)                          
|Dividends - Common shares                                               |                  | (145)                          
|Transfer to capital                                                     |                  | -                              
|Transfer to reserves                                                    |                  | (37)                           
|                                                                        |                  |                                
|Balance end of year                                                     |                  | 1,657                          
|                                                                        |                  |                                
|Total Stockholders' Equity                                              |                  | R$5,552                        
|                                                                        |                  |                                

The accompanying notes are an integral part of these consolidated
financial statements



Unibanco  União de Bancos Brasileiros S.A. and SubsidiariesConsolidated Statement of Cash Flows
(Expressed in millions of Brazilian Reais)

---

|                                                                                                   | For the Year Ended December 31,
|-------------------------------------------------------------------------------------------------- | -------------------------------
|                                                                                                   |                                
|                                                                                                   | 2000                           
|                                                                                                   |                                
|Operating activities                                                                              
|Net income                                                                                         | R$628                          
|Provision for loan losses                                                                          | 676                            
|Provision for insurance and private retirement claims                                              | 56                             
|Depreciation                                                                                       | 224                            
|Amortization of goodwill and other intangibles                                                     | 62                             
|Loss (gain) on unconsolidated companies                                                            | (202)                          
|Loss on foreclosed assets                                                                          | 49                             
|Loss on securities                                                                                 | -                              
|Loss (gain) on sales of premises and equipment                                                     | 1                              
|Deferred tax benefits                                                                              | (135)                          
|Equity in results of unconsolidated companies                                                      | (164)                          
|Stock-based compensation expenses                                                                  | -                              
|Minority interest of consolidated subsidiaries                                                     | 69                             
|Changes in assets and liabilities                                                                 
|Trading assets (increase) decrease                                                                 | 818                            
|Other assets decrease                                                                              | (75)                           
|Other liabilities increase (decrease)                                                              | (278)                          
|                                                                                                   |                                
|Net cash provided by (used in) operating activities                                                | 1,729                          
|                                                                                                   |                                
|Investing activities                                                                              
|Net increase in deposits with banks                                                                | -                              
|Net (increase) decrease in Central Bank compulsory deposits                                        | 89                             
|Purchases of available for sale securities                                                         | (1,534)                        
|Proceeds from sales of available for sale securities                                               | 1,397                          
|Purchases of securities held to maturity                                                           | (588)                          
|Proceeds from matured and called securities held to maturity                                       | 1,399                          
|Net increase in loans                                                                              | (2,535)                        
|Acquisition of companies                                                                           | (1,063)                        
|Acquisition of minority interest                                                                   | -                              
|Purchases of premises and equipment                                                                | (316)                          
|Proceeds from sale of premises and equipment                                                       | 42                             
|Proceeds from sale of foreclosed assets                                                            | 27                             
|Purchases of unconsolidated companies                                                              | (112)                          
|Proceeds from sale of unconsolidated companies                                                     | 342                            
|Dividends received from unconsolidated companies                                                   | 85                             
|Minority interest of consolidated subsidiaries                                                     | (20)                           
|Net cash used in investing activities                                                              | (2,787)                        
|Financing activities                                                                              
|Net increase in deposits                                                                           | 1,001                          
|Net increase (decrease) in federal funds purchased and securities sold under repurchase agreements | 5,510                          
|Net increase in short-term borrowings                                                              | 621                            
|Borrowings under long-term debt arrangements                                                       | 3,663                          
|Repayment of long-term debt                                                                        | (5,017)                        
|Proceeds from sale of common and preferred stock                                                   | 1,101                          
|Purchase of own stocks                                                                             | -                              
|Cash dividends paid                                                                                | (281)                          
|Net cash provided by financing activities                                                          | 6,598                          
|Net increase (decrease) in cash and cash equivalents                                               | 5,540                          
|Cash and cash equivalents at beginning of year                                                     | 5,447                          
|Cash and cash equivalents at end of year                                                           | R$10,987                       
|Supplemental:                                                                                     
|Cash paid for interest (Note 2(b))                                                                 | R$3,066                        
|Cash paid for income taxes                                                                         | 74                             
|Stock issued in exchange for purchased minority interest                                           | -                              
|Loans transferred to foreclosed assets                                                             | 69                             
|Securities transferred from trading to available for sale                                          | -                              
|Securities transferred from trading to held to Maturity                                            | -                              
|Dividends declared but not paid                                                                    | 133                            

The accompanying notes are an integral part of these consolidated
financial statements



Unibanco Holdings S.A. and Subsidiary and
Unibanco  União de Bancos Brasileiros S.A. and SubsidiariesNotes to the Consolidated Financial Statements
(Expressed in millions of Brazilian Reais, unless otherwise indicated)

---

Note 1  Basis of
Presentation

Unibanco Holdings S.A.
(Holdings) is a limited liability company formed under the laws of the
Federative Republic of Brazil. The activities of Holdings are conducted exclusively
through its subsidiary Unibanco  União de Bancos Brasileiros S.A.
(Unibanco or the Bank), which is a multiple service bank under
Brazilian banking regulations, headquartered in São Paulo, Brazil. At December 31,
2001 and 2002, Holdings held 96.59% and 15.94%, of Unibancos common (voting) and
preferred (nonvoting) shares, respectively. The preferred shares of Unibanco confer
dividend rights 10% greater than those of the common shares.

Unibanco is a full-service financial
institution providing, directly and indirectly through its subsidiaries, a wide variety of
credit and non-credit products and services to all segments of the Brazilian domestic
market and to a lesser extent through its offices, branches and subsidiaries in Nassau
(Bahamas); Grand Cayman (Cayman Islands); New York, New York (USA); Asuncion (Paraguay);
Luxembourg (Luxembourg) and London (England).

These Notes to the consolidated
financial statements cover both Unibanco and Holdings, and generally are applicable to
both companies; however, when a particular Note is only applicable to Unibanco or Holdings
individually (such as Note 19 which deals with stockholders equity and matters
relating to the by  laws) we have highlighted this fact.

We are organized under four main
lines of business: retail banking, wholesale banking, insurance and wealth management
(comprising asset management and private banking). Our retail banking products and
services are designed to service individuals and small businesses and include a wide
variety of credit and non-credit products and services, such as overdraft loans, consumer
finance, credit cards and a number of deposit accounts. Our wholesale banking business
involves a variety of credit products and, increasingly, the provision of fee-based
non-credit products and services to large and middle market companies in Brazil, such as
cash management, investment banking and receivables collection. We conduct our insurance
and savings-related products business through our subsidiaries providing life, auto,
property and casualty insurance coverage to individuals and businesses, as well as pension
and retirement plans, and savings and annuities products. Our subsidiary Unibanco Asset
Management  Banco de Investimentos S.A., offers, manages and administers a wide
variety of investment funds and assets of corporations, private bank customers, foreign
investors and individuals. See Note 31 with respect to segment information.

The consolidated financial statements
of Holdings include the accounts of Holdings and its majority-owned subsidiary, Unibanco.
The consolidated financial statements of Unibanco include the accounts of Unibanco and its
majority-owned subsidiaries. Such financial statements have
been prepared in accordance with accounting principles generally accepted in the United
States of America (U.S. GAAP). All material intercompany accounts and
transactions have been eliminated in consolidation.

The primary subsidiaries of Unibanco
as of December 31, 2002 are:

|                                                         | Ownership interest            
|-------------------------------------------------------- | ------------------------------
|                                                         |                               
|Direct and indirect subsidiary companies                 | Activity                      
|                                                         |                               
|. Unibanco AIG Seguros S.A.                              | insurance                     
|Unibanco AIG Previdência S.A.                            | pension and retirement plans  
|Unibanco AIG Saúde Seguradora S.A.                       | insurance                     
|. Unibanco Representação e Participações Ltda.           | holding                       
|Unibanco Companhia de Capitalização                      | savings and annuities products
|Administradora e Corretora de Seguros Unibanco Ltda.     | insurance broker              
|. Banco Credibanco S.A.                                  | credit card                   
|. Banco Fininvest S.A.                                   | bank and credit card          
|. Banco Dibens S.A.                                      | bank                          
|Dibens Leasing S.A. - Arrendamento Mercantil             | leasing                       
|. Banco1.net S.A.                                        | bank                          
|. Unibanco Leasing S.A. - Arrendamento Mercantil         | leasing                       
|. Unibanco Asset Management - Banco de Investimento S.A. | asset management              
|. Unibanco Corretora de Valores Mobiliários S.A.         | security broker               
|. Unipart Participações Internacionais Ltd.              | holding                       
|Unibanco - União de Bancos Brasileiros (Luxembourg) S.A. | bank                          
|Unibanco Cayman Bank Ltd.                                | bank                          
|Unicorp Bank & Trust Ltd.                                | private bank                  
|Interbanco S.A.                                          | bank                          
|Unibanco Securities Inc.                                 | security broker               
|Unibanco Securities Ltd.                                 | security broker               

For a description of Unibancos investments
in unconsolidated companies, see Notes 2 (j) and 11.

Note 2 
Significant Accounting Policies

In preparing our consolidated
financial statements, we use estimates and assumptions to account for certain assets,
liabilities, revenues, expenses and other transactions in accordance with U.S. GAAP. The
consolidated financial statements include various estimates and assumptions, including the
adequacy of the allowance for loan losses, estimates of the fair value of certain
financial instruments, the amount of valuation allowances on deferred tax assets, the
amount of insurance reserves, and the selection of useful lives of certain assets. Actual
results in future periods could differ from those estimates.

These consolidated financial
statements differ from our statutory consolidated financial statements as filed with the
applicable Brazilian authorities primarily as a result of preparing such consolidated
financial statements in accordance with U.S. GAAP.

(a)
          Cash and cash equivalents

For purposes of the  statements  of cash flows,  cash and cash  equivalents  include cash and due from
banks,  interest-bearing  deposits in other  banks and federal  funds sold and  securities  purchased  under
resale agreements with original maturities within three months or less.

In order to improve  the  presentation  of the
financial  statements  we  reclassified  the amount of
R$5,101 in  2001 from Federal  funds sold and  securities  purchased  under resale  agreements to Trading
assets, for comparative purposes to conform to the current year presentation.

(b)
          Presentation of interest-earning assets and interest-bearing liabilities

Interest-earning assets and
interest-bearing liabilities are presented in the consolidated balance sheet at the
principal amount outstanding plus accrued interest and monetary correction adjustments.
Such presentation is required since accrued interest and monetary correction adjustments
are added to the outstanding principal each period for substantially all of such assets
and liabilities.

The  accrual of interest on typical  Brazilian  financial  assets and  liabilities  includes  nominal
interest  rates  and a  monetary  correction  component.  Such  monetary  correction  may be  related  to an
inflation index,  changes in foreign  exchange rates (usually U.S. Dollar) or other floating  interest rate.
The interest rate and monetary  correction are applied at the end of each month to the principal  balance of
each  operation.  The updated value  becomes the new basis for the accrual of the next months  interest and
monetary  correction,  and so forth,  until  settled.  As a result,  it is not  practical  (and it would not
reflect the actual return on our  investments)  to segregate  only the interest rate  component for purposes
of  showing  our  average  consolidated  balance  sheet and  interest  rate  data.  On the other  hand,  for
prospective financial  information we only considered the interest rate component,  as we cannot predict the
effects of monetary correction up to the maturity date.

The total interest and monetary
correction accrued on the outstanding principal of assets and liabilities was R$1,170 and
R$880 at December 31, 2001 and R$1,797 and R$1,563 at December 31, 2002, respectively.

(c)
          Securities purchased under resale agreements and securities sold under
          repurchase agreements

We enter into very short-term
purchases of securities under resale agreements and sales of securities under repurchase
agreements of substantially identical securities. The amounts advanced under resale
agreements and the amounts borrowed under repurchase agreements are accounted for as
short-term secured borrowings and are carried on the balance sheet together with accrued
interest. Generally, our policy is to obtain control or take possession of the securities
purchased under resale agreements and we do not account for the securities underlying such
agreements as securities in the consolidated balance sheets. On the other hand, the
securities underlying the repurchase agreements remain in the securities accounts. We
closely monitor the market value of the underlying securities collateralizing the resale
agreements in order to limit our credit risk with counterparties.

(d) Trading assets

Securities classified as trading in
accordance with Statement of Financial Accounting Standards (SFAS) 115,
Accounting for Investments in Debt and Equity Securities, are carried at fair
value and recorded in trading assets as of their trade date. Realized and unrealized gains
(losses) on trading securities are recognized currently in Non-interest income
 trading income (expense).

(e)
          Derivative instruments and hedging activities

We use a variety of derivatives,  such as forwards, futures, swaps
and options, as part of our overall asset and liability risk  management.  As required by
SFAS 133  Accounting  for Derivative  Instruments and Hedging  Activities,  as amended,
 we recognize  all  derivatives  on the balance sheet as either assets or liabilities,
 at fair value, based on quoted market prices, when available.  If quoted market prices
are not available, fair values are based on quoted prices for instruments with similar
characteristics.

The  accounting  for changes in fair value of a derivative
 instrument  depends on whether it has been designated  and  qualifies  as part of a
hedging  relationship.  Derivatives  not  designated  as hedges are recorded  as  trading
 assets or  liabilities  and the gain or loss is  recognized  in current  earnings  in trading
income (expenses) in non-interest income.

For those  derivatives that are designated and qualify as hedging
 instruments,  we formally  document the  relationships  between  the  hedging
 instruments  and  hedged  items,  as well as its risk  management objective  and
 strategy  before  undertaking  the  hedge.  We  assess  at the  inception  of the  hedge
and thereafter,  whether the  derivative  used in our hedging  transaction  is expected
to be or has been highly effective  in  offsetting  changes  in the fair  value or
 estimated  cash  flows of the  hedged  items.  We discontinue  hedge  accounting
 prospectively  when it is determined that a derivative is not expected to be or has  ceased
 to be  highly  effective  as a  hedge,  the  derivative  expires  or  is  sold,  or
 management discontinues the derivatives hedge  designation.  In those  circumstances,
 amounts included in accumulated other  comprehensive  losses  regarding a cash flow
hedge are  recognized  in earnings to match the earnings recognition pattern of the
hedged item.

The  adoption  of SFAS 133 in  January  1,  2001 did not have a
impact in our  consolidated  financial statements,  since prior to the  implementation
 date and during 2001, we accounted for all our  derivatives at fair  value and as other
 than  hedging  instruments,  with  realized  and  unrealized  gains and  losses
recognized in current operations.

For derivatives  that are designated as fair value hedges,  the gain
or loss on derivatives as well as the loss or gain on the hedged items are  recognized
 in current  earnings.  For  derivatives  designated as cash flow hedges,  the effective
 portions of the gain or loss on derivatives are reported as a component of Accumulated
 other  comprehensive  losses and  recognized in earnings in the same period or periods
during which  the  hedged  transaction  affects  earnings.  Any  remaining  gain or loss
on  these  derivatives  is recognized  in  current  earnings.  A highly  effective
 hedging  relationship  is one in  which we  achieve offsetting  changes in fair value or
cash flows for the risk being  hedged.  We did not discontinue any cash flow or fair value hedges
in 2002.  There are no components of the change in fair value of the derivatives  that
are excluded in assessing hedge effectiveness.

In 2002,  we  entered  into  swaps to hedge our  exposure  to
 changes  in the fair  value of  certain interest-bearing  liabilities due to both,
 foreign exchange and interest rate risks. These derivatives were designated as fair
value hedges.  We also entered into future  contracts to minimize the variability in cash
flows of  interest-bearing  liabilities  caused  by  interest  rate  fluctuations.  These
 derivatives  were designated as cash flow hedges.

Financial  derivatives  involve, to varying degrees,  interest rate,
market and credit risk. We manage these  risks as part of our  asset  and  liability
 management  process  and  through  credit  policies  and procedures.  We seek to
minimize  counterparty  credit risk by entering into transactions with only a select
number of  high-quality  institutions.  A large part of our  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.  We believe the credit risk  associated  with these types of instruments
is minimal.  For swap contracts,  which are negotiated in a Clearing House for Custody
and Financial Settlement of Securities or in an over-the-counter  transaction,  we
analyze the credit risk and recorded provision for probable losses.

(f)
          Available for sale and held to maturity securities

We classify securities in accordance
with SFAS 115. These classifications are determined based on our intent with respect to
the securities on the date of purchase (trade date). Gains and losses on the sale of
securities are recognized on a specific identification basis on the applicable trade date.

Generally, we classify debt and
equity securities as available for sale based on current economic conditions, including
interest rates. Securities available for sale are recorded at fair value with unrealized
gains and losses recorded as a separate component of stockholders equity, net of
applicable taxes (losses of R$54 and R$214 at December 31, 2001 and 2002,
respectively). Securities available for sale are used as part of our overall interest rate
risk management strategy and may be sold in response to changes in interest rates, changes
in prepayment risk and other factors.

Debt securities for which we have the
intent and ability to hold to maturity are classified as held to maturity and recorded at
amortized cost.

Declines in the fair value of
available for sale and held to maturity securities below their cost that are deemed to be
other-than-temporary are reflected in earnings as realized losses.

(g) Loans

Loans are stated at principal plus accrued  interest  receivable,  and local  currency  indexation (as
explained in Note 2 (b)).  Interest  income is recorded on an accrual  basis and are added to the principal
amount of the loan each period.  The accrual of interest income and monetary  correction are generally  discontinued on
all loans that are not  considered  collectible  as to principal or interest,  unless the collection of both
principal  and  interest is assured by  collateral,  guarantees  or other  security and is in the process of
collection.  Such  nonaccrual  loans are  considered  nonperforming  loans and are subject to the procedures
described in Note 2 (i). Loan origination fees and costs are not material to the financial  statements  and,  therefore,
they are recognized in the net income as incurred.

Direct lease financing is carried at the aggregate of lease payments plus estimated  residual value of
the leased property, less unearned income. Lease financing income is recognized over the term of the lease.

(h)
          Allowance for loan losses

The allowance for loan losses is the
amount that has been provided for probable losses in the loan portfolio. The allowance is
increased by provisions for loan losses and recoveries of loans previously charged-off and
is reduced by charged-off loans deemed uncollectible. Our evaluation of the adequacy of
the allowance is based on regular reviews of individual loans, recent loss experience,
current economic conditions, the risk characteristics of the various classifications of
loans, the fair value of the underlying collateral and other factors directly influencing
the potential collectibility of loans. The allowance for loan losses is maintained at a level that we believe to be sufficient to
absorb estimated probable credit losses inherent in the loan portfolio.

(i)
          Nonperforming and impaired loans

We consider certain loans as impaired
(except for smaller homogeneous loans) when in our judgment all amounts due, including
accrued interest, are no longer considered collectible in accordance with the loans
 contractual terms, as defined in SFAS 114,
Accounting for Impairment of a Loan by a Creditor, as amended by SFAS 118
Accounting by Creditors for Impairment of a Loan Income Recognition and
Disclosures. We consider all loans 60 days or more overdue as nonperforming and
those of larger balance nature are subject to specific review for impairment. We then
measure impaired loans based on (i) the present value of the loans expected cash
flows; (ii) the observable market value of the loan; or (iii) the realizable value of the
underlying collateral for collateral-dependent loans. A valuation allowance is established
through the allowance for loan losses for the difference between the carrying value of the
impaired loan and its value determined as described above. Loans are charged-off against
the allowance when the loan is not collected or is considered permanently impaired.
Charge-off normally occurs if no payment is received within 360 days from its due date.
The
allowance is adjusted in future periods for changes in the estimated probable losses
inherent in the portfolio. Interest collections including indexation readjustments, received in each
period on non-accrual loans are included in interest income on loans. Such amounts are not considered significant.

Our subsidiary Fininvest, has the
same provisioning policy as us but adopts a shorter period for charge-offs (typically
between 180 and 210 days). Fininvest operates in the lower income consumer credit market
and has a high rate of defaults compensated by the higher interest rates it charges to its
customers. The same charge-off policy is adopted with respect to our credit card
activities.

Small-balance homogenous loans, such
as overdrafts, credit card, residential housing loans and consumer installment loans are
aggregated for the purpose of measuring impairment. The assessment of the adequacy of the
allowance for loan losses for small-balance homogenous loans includes consideration of
factors such as economic conditions, portfolio risk characteristics and prior loss
experience among others.

The balance of nonperforming loans
and the allowance for impaired loans is disclosed in Note 9.

(j)
          Investments in unconsolidated companies

Investments in unconsolidated
companies, where we own between 20% and 50% of voting capital, are accounted for using the
equity method of accounting. Under this method our share of results of the investee, as
reported under U.S. GAAP, is recognized in the statements of income in one amount as
Equity in results of unconsolidated companies, and dividends are credited when
declared to the Investments in unconsolidated companies account in the balance
sheets.

Investments in companies of less than
20% with no readily determinable market value are recorded at cost (unless we have the
ability to exercise significant influence over the operations of the investee in which
case we use the equity method) and dividends are recognized in income when received. See
Note 11.

(k)
          Premises and equipment

Premises and equipment are recorded
at cost. Depreciation is computed on the straight-line method at the following annual
rates: buildings  4%, furniture and equipment  10% and data processing
equipment and vehicles  20%. Leasehold improvements are amortized over the shorter
of the useful life of the improvement or the maturity of the lease contract, generally
between 5 and 10 years. Expenditures for maintenance and repairs are charged to
non-interest expense as incurred.

We assess impairment in accordance
with the requirements of SFAS 144 Accounting for the Impairment or Disproval of
Long-Lived Assets when events and circumstances indicate that such impairment may
exist. No such impairment has been identified through December 31, 2002.

(l)
          Costs of software developed or obtained for internal use

We adopt Statement of Position
(SOP) 98-1 Accounting for the Cost of Software Developed or Obtained for
Internal Use and accordingly we capitalize certain costs associated with internally
developed internal-use software. Amortization is computed on the straight-line method over
no more than five years.

In accordance with SOP 98-1, we
capitalize all costs related with software developed or obtained for internal use, except
the costs related with the planning and production stage, which are expensed.

(m)
          Goodwill and other intangibles

Prior to December 31, 2001 goodwill
on acquisitions was being amortized over no more than 10 years, representing the expected
beneficial life of the operations acquired, using the straight-line method or
proportionally to the expected benefited.

Effective  January 1, 2002, we implemented  SFAS 142 Goodwill and Other  Intangible  Assets,
which  changed  the  accounting  for  goodwill  from the  amortization  of  goodwill  to an  impairment-only
approach.

In accordance with SFAS 141 Business  Combination and SFAS 142, the net assets of companies acquired
in purchased  transactions are recorded at fair value at the date of acquisition.  The historical cost basis
of individual  assets and liabilities are adjusted to reflect their fair value.  Identified  intangibles are
amortized on straight-line  basis, over the period benefited.  Goodwill is not amortized but is reviewed for
potential  impairment on annual basis at the reporting  unit level.  The  impairment  test compares the fair
value of the reporting unit with the carrying  amount of the net assets  (including  goodwill).  If the fair
value of the  reporting  unit  exceeds  the  carrying  amount of the net assets  (including  goodwill),  the
goodwill is considered  not impaired;  however,  if the carrying  amount of the net assets  exceeds its fair
value,  an additional  procedure  must be performed.  That  additional  procedure  compares the implied fair
value of the  reporting  units  goodwill  with the carrying  amount of that  goodwill.  Impairment  loss is
recorded to the extend that the carrying amount of goodwill  exceeds its implied fair value.  Fair value was
determined  by using  discounted  cash flow  methodology,  and no  impairment  adjustment  was  necessary at
January 1st or December 31, 2002.

Other intangible assets are evaluated
for impairment if events and circumstances indicate a possible impairment. Such evaluation
of other intangible assets is based on undiscounted cash flow projections. At December 31,
2002, intangible assets included in our consolidated balance sheet consist of the
customer relationship intangibles of Banco Bandeirantes S.A.("Bandeirantes")
that are being amortized over 5 years.

(n)
          Foreclosed assets, including real estate

Assets received upon foreclosure of
loans or in lieu of foreclosure, including real estate, are initially recorded the lower
of (a) fair value minus estimated costs to sell, or (b) the carrying value of the loan;
with initial differences recorded as a charge to the allowance for loan losses. Subsequent
decreases in the fair value of the asset are recorded as a valuation allowance with a
corresponding charge to non-interest expense. Net costs of maintaining such assets are
expensed as incurred. In accordance with Brazilian banking regulations, we are required to
dispose of such assets within one year of foreclosure.

(o)
          Transfer of financial assets

Transfer of financial assets are
accounted for as sales, when control over the assets has been surrendered. Control over
transferred assets is deemed to be surrendered when (1) the assets has been isolated from
us (2) the transfer obtains the right (free of condition that constrain it from taking
advantage of that right) to pledge or exchange the transferred assets and (3) we do not
maintain effective control over the transferred assets through agreements to repurchase
them before their maturity. Transfer of financial assets that do not meet these requirements
 are accounted for as secured borrowings (see 2 (c) and (p)).

(p)
          Special purpose company (SPC)

Special Purpose Companies are
broadly defined as legal entities structured for a particular purpose. The UBB Diversified Payments Rights Finance Company ("SPC"),
incorporated in the Cayman Islands as an exempted liability company, conducts
securitization arrangements related to our future flow of eletronic remittance payment orders
 (see Note 16). This SPC does not meet the criteria for a
Qualifying Special Purpose Company, as defined in SFAS 140 Accounting for Transfers
and Servicing of Financial Assets and Extinguishments of Liabilities and in
accordance with Emerging Issues Task Force Topic D-14 "Transactions Involving Special Purpose Entities",
 is required to be consolidated. General factors to be considered in making
this determination include whether the majority owner (or owners) o the SPC is independent
of us, has made a substantive capital investment in the SPC, has control of the SPC, or
possesses the substantive risks and rewards of ownership of the SPC.

In response to demands to strengthen
existing accounting guidance regarding the consolidation of SPCs and other off-balance
sheet entities, in January 2003 the FASB issued Interpretation 46 Consolidation of
Variable Interest Entities, an interpretation of ARB 51 which provides a new
framework for identifying variable interest entities (VIEs) and determining when a company
should include the assets, liabilities, non-controlling interests and results of
activities of a VIE in consolidated financial statement. FIN 46 is effective immediately
for VIEs created after January 31, 2003 and is effective beginning in the third quarter of
2003 for VIEs created prior to issuance of the interpretation. We believe that the
adoption of FIN 46 will not have a significant impact on our consolidated financial
position and results of operations.

(q) Income taxes

We account for income taxes in
accordance with SFAS 109, Accounting for Income Taxes. SFAS 109 is an asset
and liability approach, which requires the recognition of deferred tax assets and
liabilities for temporary differences between the amounts included in the financial
statements and tax returns. In estimating future tax consequences, SFAS 109 generally
considers all expected future events other than enactments of changes in the tax law or
rates. Changes in tax law and rates are reflected in the period in which they are enacted.
If, after considering future tax consequences, we believe that the carrying value of any
deferred tax asset is more likely than not unrealizable, then we establish a
valuation allowance equal to that amount.

(r)
          Insurance premiums, deferred acquisition costs, reserves for insurance claims,
          private retirement plan benefits and pension investment contracts

Insurance Premiums  Our
insurance contracts are considered short-duration insurance contracts. Premiums from short
duration insurance contracts for life and accident insurance business, are recognized when
due and for property and casualty, are recognized over the related contract period.
Insurance premiums are included as Non interest income.- Insurance, private
retirement plan and pension investment contracts.

Deferred acquisition costs  The
costs that vary with and are related to the production of new insurance business are
deferred to the extent that such costs are deemed recoverable from future profits. Such
costs include mainly commissions, costs of policy insurance and variable field office
expenses and are amortized over the expected life of the contracts in proportion to the
premium income. Deferred acquisition costs are subject to recoverability testing at the
end of each accounting period and, if not recoverable, are charged to expense.

Insurance policy and claims reserves
 Reserves for insurance claims are established based on historical experience,
claims in process of payment, estimated amounts of claims incurred but not yet reported,
and other factors relevant to the levels of reserves required. Reserves are adjusted
regularly based upon experience with the effects of changes in such estimated reserves
included in the results of operations in the period in which the estimated are changes and
include an estimated reserves for reported and unreported claims incurred, recorded in "Other liabilities".

Reserves for private retirement plan
benefits are established based on actuarial calculations.

Pension investment contracts 
Certain products offered by us, such as pension investment contracts and funds where the
investment risk is for the account of policyholders, are considered investment contracts
in accordance with the requirements of SFAS 97, Accounting and Reporting by
Insurance Enterprises for Certain Long Duration Contracts and for Realized Gains and
Losses from Sale of Investments. During the accumulation phase of the pension
investment contracts and funds where the investment risk is for the account of
policyholder, in which the policyholders have agreed to the insurance terms of the plan,
the contracts are treated as an investment contract. During the annuity phase the contract
is treated as an insurance contract with mortality risk. Funds related to pension
investment contracts and funds where the investment risk is for the account of
policyholder are equal to the account value. Account values are not actuarially
determined. Rather, account values are increased by the deposits received and interest
credited (based on contract provisions) and are reduced by withdrawals and administrative
expenses charged to the policyholders. The interest credited is included in changes in
Non interest expense  Insurance, private retirement plan and pension
investment contracts . The  securities  related to these pension  investment  contracts are
classified as trading  assets
and securities available for sale, in the Consolidated Financial Statements.

(s) Fee income

We earn fee income from investment
management, credit card, investment banking and certain commercial banking services. Such
fees are typically recognized when the service is performed (investment and commercial
banking) or deferred and recognized over the life of the contract (investment management
and credit card).

(t)
          Translation of foreign currency operations into reais

The functional currency used for
foreign operations is the Brazilian Real. Assets and liabilities of foreign operations,
substantially all of which are monetary in nature, are translated into Brazilian reais
at the respective period-end exchange rates and revenues and expenses are translated
at a weighted average of exchange rates during the period. Other transactions denominated
in foreign currencies are translated into Brazilian reais at the transaction date.
Foreign exchange transaction gains and losses on foreign operations are recognized
currently in interest income and interest expense, respectively.

(u) Employee benefits

(i) Pension plan

We do not maintain defined-benefit
private pension plans or other postretirement benefit plans for our employees, except for
a very minor and fully funded plan covering 2 employees in December 2002.
However, we are required to make employer contributions to the Brazilian
Government pension, welfare benefit and redundancy plans which are expensed as incurred.
Such contributions totaled R$216, R$317 and R$319 in 2000, 2001 and 2002,
respectively. In addition, we make contributions to a defined-contribution plan for our
employees at their election. The contributions to the plan were not material in any of the
reported periods. A substantial portion of our employees belong to an union and are subject
to a collective bargaining agreement with the Bank.

(ii)
          Stock  based compensation

We established a stock  based
employee compensation plan in 2001 which is described more fully in Note 25. We account
for this plan in accordance with SFAS 123 Accounting for Stock Based
Compensation. Under SFAS 123, the stock options were recorded as an expense over the vesting period
 based on
the fair value accounting calculated using a Black-Scholes model.

(v) Restructuring charges

Generally, we expense costs
associated with restructuring plans when incurred. However, if a formal detailed plan has
been adopted and approved by management and communicated to employees, the costs are
accrued in the period in which the plan is formalized and the costs can be estimated.
Restructuring charges typically include employee-related costs and incremental costs for
which no future benefit can be derived as a direct result of the restructuring activities.

Qualifying restructuring charges
relating to major acquisitions are accrued at the time of the acquisition and included in
the determination of the total purchase price (see Note 20).

(w)
          Earnings per share

In accordance with normal Brazilian
practice, we have presented earnings per share (EPS) per one thousand shares in order to
avoid undue rounding, and because Holdings and Unibancos shares are traded in
lots of 1,000 on the Brazilian stock exchanges.

In calculating EPS, Unibanco and
Holdings have adopted the two class method. This method is an earnings allocation formula
that determines earnings per share for each class of common shares and preferred shares
according to dividends declared and participation rights to undistributed earnings. Under
this method, net income is first reduced by the amount of dividends declared in the
current period for each class of share, the remaining earnings are then allocated to
common share and preferred share to the extent each security may share in earnings. The
total earnings allocated to each share (i.e. actual dividends declared and the amount
allocated for the participation feature) is then divided by the number of weighted average
shares outstanding.

Diluted earnings purchase is based on
the same adjusted net income as in the basic EPS and the weighted  average number of
shares outstanding is increased by the number of shares that would be issued assuming the
exercise of stock options. Basic and diluted earnings per share are the same in 2000 and
2001 since no stock options, convertible securities or other stock equivalents were
outstanding for the years. In 2002 we issued a stock options convertible securities and calculated the
 diluted earnings but the dilution was not meaningful.

HOLDINGS

Earnings per share are presented
based on the three classes of stock issued by Holdings. All classes, common and preferred,
participate in dividends on substantially the same basis, except that class A
preferred stockholders are entitled to dividends per share ten percent (10%) higher than
common and class B preferred stockholders (see Note 19). Earnings per share
are computed on the distributed (dividends) and undistributed earnings of Holdings after
giving effect to the 10% preference, without regard to whether the earnings will
ultimately be fully distributed. Weighted average shares are computed based on the periods
for which the shares are outstanding.

UNIBANCO

Earnings per share are presented
based on the two classes of stock issued by Unibanco. Both classes, common and preferred,
participate in dividends on substantially the same basis, except that preferred
stockholders are entitled to dividends per share ten percent (10%) higher than common
stockholders (see Note 19). Earnings per share are computed based on the distributed
(dividends) and undistributed earnings of the Bank after giving effect to the 10%
preference, without regard to whether the earnings will ultimately be fully distributed.
Weighted average shares are computed based on the periods for which the shares are
outstanding.

(y)
          Recently issued accounting pronouncements

SFAS 145 Rescission of FASB
Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13 and Technical
Corrections is effective for fiscal years beginning after May 15, 2002. This
statement, among other aspects, rescinds the requirement to classify a gain or loss upon
the extinguishment of debt as an extraordinary item on the income statement. It also
requires lessees to account for certain modifications to lease agreements in a manner
consistent with sale-leaseback transaction accounting. The adoption of SFAS 145 will not
have an impact on our consolidated financial position or results of operation.

SFAS 146 Accounting for Costs
Associated with Exit or Disposal Activities was issued during June 2002 and
basically requires that a liability for a cost associated with an exit or disposal
activity must be recognized and measured initially at fair value only when the liability
is incurred. The provisions of this statement are effective for exit or disposal
activities that are initiated after December 31, 2002, with early application encouraged.
We believe that the adoption of SFAS 146 will not have a significant impact on our
consolidated financial position and results of operations.

In October 2002, the FASB issued SFAS 147 Acquisitions of Certain
Financial Institutions. This statement clarified that, only if certain criteria are met,
an acquisition of a less-than-whole financial institution (such as a branch acquisition)
should be accounted for as a business combination. In addition, SFAS 147 amends SFAS 144
to include in its scope long-term customer-relationship intangible assets of financial
institutions such as depositor-and-borrower-relationship intangible assets. As a result,
those intangible assets are subject to the same undiscounted cash flow recoverability
test and impairment loss recognition and measurement provisions that SFAS 144 requires
for other long-lived assets that are held and used by a company. SFAS 147 became
effective October 1, 2002 and did not have a material impact on our consolidated
financial statements.

SFAS 149 Amendment of Statement
133 on Derivative Instruments and Hedging Activities, issued during March 2003,
amends and clarifies financial accounting and reporting for derivative instruments,
including certain derivative instruments embedded in other contracts and for hedging
activities under FASB Statement No. 133, Accounting for Derivative Instruments and
Hedging Activities. This statement is effective for contracts entered or modified
after June 20, 2003 and for hedging relationships designated after June 30, 2003. In
addition, except some specific transactions, all provisions of this statement should be
applied prospectively. We believe that the adoption of SFAS 149 will not have a
significant impact on our consolidated financial position and results of operations.

SFAS 150 Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity was issued
during May, 2003 and requires that an issuer classify some financial instrument with
characteristics of both liabilities and equity as a liability (or asset in some
circumstances). This statement is effective for financial instruments entered into or
modified after May 31, 2003. We believe that the adoption of SFAS 150 will not have a
significant impact on our consolidated financial position and results of operations.

FASB Interpretation 45
Guarantors Accounting and Disclosure Requirements for Guarantees, (FIN
45) was issued in November 2002. FIN 45 requires that a liability be recognized at the
inception of certain guarantees for the fair value of the obligation, including the
ongoing obligation to stand ready to perform over the term of the guarantee. This new
accounting is effective for certain guarantees issued or modified after December 31, 2002.
We believe that the adoption of FIN 45 will not have a significant impact on our
consolidated financial position and results of operations.

FASB Interpretation 46
Consolidation of Variable Interest Entities, an interpretation of ARB 51" (FIN
46) was issued in January 2003. FIN 46 provides a new framework for identifying variable
interest entities (VIEs) and determining when a company should include the assets,
liabilities, noncontrolling interests and results of activities of a VIE in consolidated
financial statement. FIN 46 is effective immediately for VIEs created after January 31,
2003 and is effective beginning in the third quarter of 2003 for VIEs created prior to
issuance of the interpretation. We believe that the adoption of FIN 46 will not have a
significant impact on our consolidated financial position and results of operations.

Note 3  Acquisitions, Goodwill and Other Intangibles

(i) 2000 Acquisitions

In April 2000 we acquired a 100% of a
small wholesale bank, Banco Credibanco S.A. and its subsidiary companies
(Credibanco) and in December 2000 we acquired a 100% of Bandeirantes and its
subsidiary companies from Caixa Geral de Depósitos and minority shareholders of
Bandeirantes in exchange for 17,533,606,262 shares of Unibanco and Holdings valued at
R$1,101. In December 2000 we also acquired the remaining 49.9% of interest in Fininvest
and its subsidiary companies.

The acquisitions were accounted for
as a purchase and the results of the companies were included in our consolidated financial
statements only as from the date of purchase. Prior to November 30, 2000, we accounted for
the results of Fininvest using the equity method.

The combined cash flows for the
purchases is set forth below:

|                                           | Credibanco | Fininvest | Bandeirantes | Total  
|------------------------------------------ | ---------- | --------- | ------------ | -------
|                                           |            |           |              |        
|Fair value of assets acquired              | R$1,785    | R$704     | R$4,692      | R$7,181
|Less: Fair value of liabilities assumed    | 1,718      | 626       | 4,652        | 6,996  
|Goodwill                                   | 41         | 405       | 611          | 1,057  
|Other intangibles (customer relationship)  | -          | -         | 450          | 450    
|                                           |            |           |              |        
|Cash paid or stock issued for the purchase | 108        | 483       | 1,101        | 1,692  
|Cash and cash equivalents acquired         | (170)      | (22)      | (437)        | (629)  
|                                           |            |           |              |        
|Net cash (received) paid                   | R$(62)     | R$461     | R$664        | R$1,063
|                                           |            |           |              |        

(ii) 2001 Acquisitions

In September 2001, our subsidiary
Fininvest and Magazine Luiza, a well-known Brazilian chain of department stores,
established an association through the creation of a new company of credit, financing and
investment, through 50% of participation for Fininvest and 50% for Magazine Luiza. We paid
R$43 for our 50% interest in the new company. The operation resulted in goodwill in the
amount of R$32, based on an appraisal report and in October 2001, we signed an Association
Agreement with Globex, controlling company of Ponto Frio retail chain whereby we acquired
50% of interest in Globexs subsidiary Investcred. We paid R$111 for our 50% interest
in Investcred. The acquisition resulted in goodwill in the amount of R$59, based on an
appraisal report.

We accounted for the acquisition of
our interest in the two joint ventures following the purchase method and allocating the
purchase price based on the tangible and intangible assets acquired and liabilities
assumed, following the provisions of APB 18 The Equity Method of Accounting for
Investments in Common Shares and the guidance provided in SFAS 141 as it relates to
equity method investees not being consolidated.

(iii)  2002 Acquisitions

In April 2002, we acquired from Moreira Salles Group the remaining
 24.5% that we did not already own, of the total  capital of the  Unicorp  Bank & Trust
Ltd. (a private  banking  business),  for US$36  million equivalent of R$85,  including
 goodwill of R$45 at the date of the  acquisition.  The acquisition was based on
independent  appraisal report and was accounted  following the purchase method and
provided a net cash of R$53.  As a result of this  transaction,  Unibanco owns 100% of
Unicorps  capital.  Prior to April 2002, we accounted for Unicorps results using the
equity method, since we do not had a majority control interest.

(iv)  Goodwill and other intangibles

SFAS 141 and SFAS 142  were issued in July 2001. SFAS 141 requires that all business combinations
initiated after June 30, 2001, to be accounted for using the purchase method and establishes specific
criteria for the recognition of intangible assets separately from goodwill. SFAS 142 establishes that
goodwill and identified intangible assets with indefinitive useful lives are not subject to amortization
but are tested for impairment on an annual basis. Goodwill and intangible assets with indefinite useful
lives acquired in purchase business combinations completed before July 1, 2001, were subject to
amortization through December 31, 2001, at which time amortization ceases. We adopted SFAS 141 and the
provisions of SFAS 142 relating to non-amortization and amortization of intangible assets on July 1, 2001
for all business combinations completed on or after the afore mentioned date. As a result of adopting SFAS
142, we reassessed the useful lives and classification of identifiable intangible assets, represented by
customer relationship, and determined that they continue to be adequate, with a remaining useful live of 3
years, at December 31, 2002. Fair value was determined by using discounted cash flow methodology, and no
impairment adjustment was necessary at January 1st or December 31, 2002, for the goodwills recorded. The
changes in goodwill and other intangible net during 2002 were as follows:

|                           | Goodwill       | Customer relationship intangible |                 
|-------------------------- | -------------- | -------------------------------- | ----------------
|                           |                |                                  |                 
|                           | Retail banking | Wholesale banking                | Wealthmanagement
|                           |                |                                  |                 
|Balance, beginning of year | R$969          | R$40                             | R$-             
|Acquisition                | -              | -                                | 67              
|Amortization               | -              | -                                | -               
|                           |                |                                  |                 
|Balance, end of year       | R$969          | R$40                             | R$67            
|                           |                |                                  |                 

The following  table  presents a  reconciliation  of reported net income and earnings per share to the
pro-forma  amounts  adjusted for the exclusion of goodwill  amortization,  net of related income tax effects
for 2000 and 2001:

|                                                  | Holdings                          | Unibanco
|------------------------------------------------- | --------------------------------- | --------
|                                                  |                                   |         
|                                                  | Pro-forma Year ended December 31,
|                                                  |                                  
|                                                  | 2000                              | 2001    
|                                                  |                                   |         
|Net income:                                      
|Reported net income                               | R$367                             | R$485   
|Add back goodwill amortization, net of applicable
|tax benefit                                       | 2                                 | 24      
|                                                  |                                   |         
|Adjusted net income                               | 369                               | 509     
|                                                  |                                   |         
|Basic earnings per share:                        
|Reported earnings per share                      
|Common shares                                     | R$4.95                            | R$5.75  
|Preferred shares                                  | -                                 | -       
|Preferred shares "A"                              | 5.45                              | 6.33    
|Preferred shares "B"                              | 4.95                              | 5.75    
|Add back impact of goodwill amortization         
|Common shares                                     | R$0.03                            | R$0.28  
|Preferred shares                                  | -                                 | -       
|Preferred shares "A"                              | 0.03                              | 0.31    
|Preferred shares "B"                              | 0.03                              | 0.28    
|Adjusted earnings per share                      
|Common shares                                     | R$4.98                            | R$6.03  
|Preferred shares                                  | -                                 | -       
|Preferred shares A                              | 5.48                              | 6.64    
|Preferred shares "B"                              | 4.98                              | 6.03    

Note 4  Related Party Transactions

The Moreira  Salles Group owns 66.72% of Holdings  common  voting
stock at December 31, 2001 and 2002, respectively,  and therefore  indirectly controls
96.59% of the Banks voting stock at December 31, 2001 and 2002,  respectively.
 Transactions with companies within the Moreira Salles Group and our own affiliates are
limited to banking  transactions  in the normal  course of business at  prevailing
 market terms for similar transactions.

At December 31, 2001 and 2002, the  Commerzbank AG owns 11.44% of
the capital of Holdings and 1.75% of the capital of Unibanco;  the Misuho  Financial
Group owns 2.71% of the capital of Holdings and 3.11% of the capital of Unibanco ; and
the Caixa  Geral de  Depósitos  owns  12.42% of the  capital of Holdings  and owns 4.8%
of the capital of  Unibanco . These  stockholders  have from time to time  extended
 trade-related  and general  purpose credit lines to Unibanco,  the aggregate
 outstanding  amount of which at December 31, 2001 and 2002 was approximately R$894 and
R$1,364, respectively.

In April 2002, we acquired from Moreira Salles Group the remaining  24.5% of Unicorp Bank & Trust Ltd.
for US$36  million  equivalent  of R$85,  including  goodwill  of R$45 at the date of the  acquisition.  The
acquisition was based on independent appraisal report. (See Note 3).

We have made certain transactions
with unconsolidated related parties, that we believe were made in the ordinary course of
business, on substantially the same terms, including interest rates and collateral,
applicable to those prevailing at the time in the market for comparable transactions and
did not involve more than the normal risk of collectibility. As of December 31, 2000, 2001
and 2002, we had the following transactions with these related parties:

|Company                                                    | 2001  | 2002
|---------------------------------------------------------- | ----- | ----
|                                                           |       |     
|Assets                                                     |       |     
|Interest-bearing deposits with banks                      
|Unicorp Bank & Trust Ltd. (c)                              | 57    | -   
|Banco Investcred Unibanco S.A                              | 164   | 229 
|FMX S.A. Soc. de Crédito, Financiamento e Investimento (a) | 77    | 183 
|                                                           |       |     
|Total                                                      | 298   | 412 
|                                                           |       |     
|Other assets                                               | 34    | 72  
|                                                           |       |     
|Total assets                                               | 332   | 484 
|                                                           |       |     
|Liabilities                                               
|Deposits                                                  
|Bus Holding S.A.                                           | 213   | -   
|Unicorp Bank & Trust Ltd. (c)                              | 693   | -   
|                                                           |       |     
|Total                                                      | 906   | -   
|                                                           |       |     
|Long-term debt                                            
|Unicorp Bank & Trust Ltd. (c)                              | 114   | -   
|                                                           |       |     
|Other liabilities                                         
|Redecard S.A. (b)                                          | 141   | 194 
|Other                                                      | 60    | 54  
|                                                           |       |     
|Total                                                      | 201   | 248 
|                                                           |       |     
|Total liabilities                                          | 1,221 | 248 
|                                                           |       |     

|Company                                                    | 2000 | 2001 | 2002
|---------------------------------------------------------- | ---- | ---- | ----
|                                                           |      |      |     
|Interest income                                           
|Interest on deposits in other banks                       
|Banco Investcred Unibanco S.A                              | -    | 3    | 35  
|FMX S.A. Soc. de Crédito, Financiamento e Investimento (a) | -    | 4    | 23  
|Interest on securities                                    
|Trading income                                            
|Banco Investcred Unibanco S.A                              | -    | -    | 29  
|FMX S.A. Soc. de Crédito, Financiamento e Investimento (a) | -    | -    | 2   
|Deposits                                                  
|Bus Holding S.A.                                           | 1    | 18   | -   
|Unicorp Bank & Trust Ltd. (c)                              | 10   | 27   | 3   
|Long term-debt                                             |      |      |     
|Unicorp Bank & Trust Ltd. (c)                              | 27   | 9    | 6   
|Other interest expenses                                    | -    | 4    | 9   
|Non interest income                                        |      |      |     
|Others                                                     | 11   | 25   | 12  
|Non interest expense                                      
|Administrative expenses                                   
|Interchange Serviços S.A.                                  | 11   | 15   | 15  
|Tecnologia Bancária S.A.                                   | 14   | 15   | 18  
|Bus Serviços de Telecomunicações S.A.                      | 1    | 25   | 35  
|Other non interest expenses                                | 4    | 12   | 9   

|________________
|----------------
|(a)             
|(b)             
|(c)             

We  contribute  on a regular  basis to  Instituto  Unibanco,
 Instituto  Assistencial  Pedro Di Perna, Instituto João Moreira Salles and Instituto
 Moreira  Salles,  trusts created by the Bank for the benefit of its employees and to
further our desire to contribute to cultural and civic activities.  Contributions  made
by Unibanco to these  trusts  totaled  R$7,  R$7 and R$2 in 2000,  2001 and 2002,
 respectively.  In December 2001, Holdings acquired  232,663,384  preferred shares of
Unibanco from Instituto Unibanco at the fair value of R$11.

Unibanco has made no loans to the executive  officers and directors
of Holdings or Unibanco since this practice is prohibited for all Brazilian banks by the
Central Bank of Brazil (the Central Bank).

Note 5 - Central Bank Compulsory Deposits

The Central Bank requires financial  institutions,  including
Unibanco,  to deposit certain funds with the Central Bank. The following table presents a
summary of the current compulsory  deposit  requirements by type and the amounts of such
deposits:

|                     | As of December 31,
|-------------------- | ------------------
|Type of deposits     | 2001              
|Non-interest earning | R$746             
|Interest-earning     | 815               
|                     |                   
|Total                | R$1,561           
|                     |                   

At  December  31,  2001 and
2002 we had also  R$1,214  and  R$3,720
 of  federal  funding  government securities,  linked to Central Bank in a form of
compulsory deposits,  recorded as trading assets, securities available for sale and
securities held to maturity.

In order to improve the  presentation  of the  financial  statements,  we  reclassified  the amount of
R$1,214 in 2001, from Central Bank compulsory  deposits to trading assets,  for comparative  purposes to
conform to the current year presentation.

Note 6 - Trading Assets

Trading assets, stated at fair value, are presented in the following
table:

|                                  | As of December 31,
|--------------------------------- | ------------------
|                                  | 2001              
|Federal government securities (a) | R$9,399           
|Securities of foreign governments | 18                
|Corporate debt securities         | 31                
|Bank debt securities              | 29                
|Mutual funds (b)                  | 1,914             
|Derivative financial instruments:
|Swaps                             | 412               
|                                  |                   
|Total                             | R$11,803          
|                                  |                   

|(a) | Include R$846 in 2001 and R$307 in 2002 linked to margin guarantees, mainly to the Brazilian
Futures and Commodities Exchange (BM&F); R$1,214 in 2001 and R$382 in 2002 linked to Central Bank as
of compulsory deposits and R$5,600 in 2001 and R$646 in 2002 subject to repurchase commitments.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(b) | The portfolios of mutual funds held by our insurance, capitalization and private retirement companies
are represented mainly by federal government securities.                                                                                                                                     

Net trading income in 2000, 2001 and 2002, included in non interest income was as follows:

|                                                               | For the year ended December 31,
|-------------------------------------------------------------- | -------------------------------
|                                                               | 2000                           
|Realized gains on securities                                   | R$109                          
|Realized losses on securities                                  | (44)                           
|Realized gains or (losses) on derivatives                      | (33)                           
|Net unrealized gains or (losses) on securities and derivatives | 59                             
|                                                               |                                
|Net                                                            | R$91                           
|                                                               |                                

In 2002 we  decided  to  change  the  classification  of  federal  government  securities,  previously
classified as trading  assets,  to securities  available for sale and  securities  held to maturity,  in the
amount of R$1,156 and R$1,178,  respectively.

Note 7 - Securities Available for Sale

The amortized cost and fair value of securities available for sale
were as follows:

|                                  | Amortizedcost | Grossunrealizedgains | Grossunrealizedlosses | Fairvalue
|--------------------------------- | ------------- | -------------------- | --------------------- | ---------
|December 31, 2001                
|Brazilian sovereign bonds         | R$253         | R$2                  | R$1                   | R$254    
|State and municipal securities    | 6             | -                    | 6                     | -        
|Corporate debt securities         | 2,637         | 27                   | 111                   | 2,553    
|Bank debt securities              | 156           | 6                    | 1                     | 161      
|Stocks                            | 164           | 16                   | 16                    | 164      
|                                  |               |                      |                       |          
|Total                             | R$3,216       | R$51                 | R$135                 | R$3,132  
|                                  |               |                      |                       |          
|December 31, 2002                
|Federal government securities (a) | R$1,978       | R$5                  | R$160                 | R$1,823  
|Brazilian sovereign bonds         | 858           | -                    | 132                   | 726      
|Corporate debt securities         | 2,939         | 3                    | 35                    | 2,907    
|Bank debt securities              | 333           | -                    | 17                    | 316      
|Stocks                            | 252           | 22                   | 31                    | 243      
|Mutual funds                      | 181           | -                    | -                     | 181      
|                                  |               |                      |                       |          
|Total                             | R$6,541       | R$30                 | R$375                 | R$6,196  
|                                  |               |                      |                       |          

|(a) | In 2002 include R$442 linked to margin guarantees, mainly to the BM&F; R$10 linked to Central Bank as
compulsory deposits and R$613 subject to repurchase commitments.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------

At December 31, 2001 and 2002,  we held no securities of a single
issuer or related group of companies whose fair value exceeded 10% of our stockholders equity.

Proceeds  from sales of  investment  securities  available  for sale
were  R$1,397,  R$1,469  and R$2,033 , in 2000, 2001 and 2002, respectively.

At December 31, 2002 we recognized other  than-temporary  losses in our securities  available for sale
in the amount of R$98, recorded as Non interest income gain (loss) on securities.

Gross gains and losses realized on the sale of securities available
for sale were as follows:

|       | For the year ended December 31,
|------ | -------------------------------
|       | 2000                           
|Gains  | R$30                           
|Losses | 30                             
|       |                                
|Net    | R$-                            
|       |                                

The amortized cost and fair value of available for sale securities,
 by contractual maturity,  were as follows:

|                                       | As of December 31,
|-------------------------------------- | ------------------
|                                       | 2001              
|                                       | Amortizedcost     
|Due in one year or less                | R$352             
|Due after one year through five years  | 1,671             
|Due after five years through ten years | 928               
|Due after ten years                    | 48                
|No stated maturity                     | 217               
|                                       |                   
|Total                                  | R$3,216           
|                                       |                   

Note 8 - Securities Held to Maturity

The amortized cost and fair value of securities held to maturity
were as follows:

|                                  | Amortizedcost | Grossunrealized gains | Grossunrealized losses | Fairvalue
|--------------------------------- | ------------- | --------------------- | ---------------------- | ---------
|December 31, 2001                 |               |                       |                        |          
|Brazilian sovereign bonds         | R$107         | R$-                   | R$4                    | R$103    
|Corporate debt securities         | 467           | 11                    | 18                     | 460      
|Bank debt securities              | 87            | 2                     | 2                      | 87       
|                                  |               |                       |                        |          
|Total                             | R$661         | R$13                  | R$24                   | R$650    
|                                  |               |                       |                        |          
|December 31, 2002                
|Federal government securities (a) | R$5,912       | R$ -                  | R$882                  | R$5,030  
|Brazilian sovereign bonds         | 305           | -                     | 43                     | 262      
|Securities of foreign governments | 1             | -                     | -                      | 1        
|Corporate debt securities         | 404           | -                     | 89                     | 315      
|                                  |               |                       |                        |          
|Total                             | R$6,622       | R$-                   | R$1,014                | R$5,608  
|                                  |               |                       |                        |          

|(a) | In 2002 include R$1,134 linked to margin guarantees, mainly to the BM&F; R$3,328 linked to Central
Bank as compulsory deposits and R$737 subject to repurchase agreements.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The amortized cost and fair value of securities  held to maturity,
 by contractual  maturity,  were as follows:

|                                       | As of December 31,
|-------------------------------------- | ------------------
|                                       | 2001              
|                                       | Amortizedcost     
|Due in one year or less                | R$296             
|Due after one year through five years  | 275               
|Due after five years through ten years | 77                
|Due after ten years                    | 13                
|                                       |                   
|Total                                  | R$661             
|                                       |                   

At December 31, 2001 and 2002
we held no  securities  of a single issuer or related group of companies whose amortized
cost or fair value exceeded 10% of our stockholders equity.

In 2001 we wrote down R$19 of securities for an other-than-temporary impairment and recorded as Non
interest income - net gain (loss) on securities.

Note 9 - Loans

|                                                       | As of December 31,
|------------------------------------------------------ | ------------------
|                                                       | 2001              
|Commercial:                                           
|Industrial and other                                   | R$11,783          
|Import financing                                       | 1,306             
|Export financing                                       | 1,968             
|Real estate loans, primarily residential housing loans | 494               
|Direct lease financing (a)                             | 722               
|Individuals:                                          
|Overdraft                                              | 960               
|Financing                                              | 3,075             
|Credit card                                            | 1,777             
|Agricultural                                           | 825               
|Nonperforming loans                                    | 1,002             
|                                                       |                   
|Total loans                                            | R$23,912          
|                                                       |                   

|(a) | The total lease payments to be received
amounted to R$1,078 and R$666 as of December 31, 2001 and 2002, respectively.
|--- | ---------------------------------------------------------------------------------------------------------------------

Most of our business  activities are with customers located in
Brazil. The Bank has a diversified loan portfolio with concentration no higher than 10%
in any economic sector.

Net Investments in Direct Leasing Financing

The following lists the components of the net investment in direct
leasing financing:

|                                                | As of December31, 2002
|----------------------------------------------- | ----------------------
|Total minimum lease payments to be received     | R$666                 
|Less: Unearned income                           | (127)                 
|Net Investments in direct leasing financing (a) | R$539                 

|(a) | Includes nonperforming leases.
|--- | ------------------------------

The following is a schedule by years of
total minimum lease payments to be received as of December 31, 2002:

|Overdue Payments | R$9  
|---------------- | -----
|2003             | 340  
|2004             | 158  
|2005             | 51   
|2006             | 80   
|2007             | 14   
|Thereafter       | 14   
|                 |      
|Total            | R$666
|                 |      

Our nonperforming loans by classification and valuation allowance
for impaired loans were as follows:

|                                                       | As of December 31,
|------------------------------------------------------ | ------------------
|
|                                                       | Nonperformingloans
|Industrial and other                                   | R$198             
|Import and export financing                            | 9                 
|Real estate loans, primarily residential housing loans | 1                 
|Direct lease financing                                 | 71                
|Individuals                                            | 715               
|Agricultural                                           | 8                 
|                                                       |                   
|Total                                                  | R$1,002           
|                                                       |                   

All impaired loans have a valuation  allowance recorded under SFAS 114 for large balance loans or SFAS
5 "Accounting for Contingencies" for small and homogenous loans.

The  impact on  interest  income as a result of  nonperforming
 loans  subject to  impairment  was not material for any of the periods  presented.  We
do not have any material  commitments to advance  additional funds to these borrowers.

The average balances of nonperforming loans subject to impairment
were as follows:

|                                                             | For the year ended December 31,
|------------------------------------------------------------ | -------------------------------
|                                                             | 2000                           
|Average balance of nonperforming loans subject to impairment | R$688                          

We did not  recognize any interest  income  during the period that
the above loans were  nonperforming and  subject  to  impairment.  For the year ended
 December  31,  2001 and 2002 we do not have any  material restructured troubled loans.

Note 10 - Allowance for Loan Losses

The following represents an analysis of changes in the allowance for
loan losses:

|                           | For the year ended December 31,
|-------------------------- | -------------------------------
|                           | 2000                           
|Balance, beginning of year | R$756                          
|Provision for loan losses  | 676                            
|Loan charge-offs           | (732)                          
|Loan recoveries            | 305                            
|Net charge-offs            | (427)                          
|                           |                                
|Balance, end of year       | R$1,005                        
|                           |                                

Note 11 - Investments in Unconsolidated Companies

|                                                                | As of or for the year ended December 31, 2002 | Investment | Equity income (loss)
|--------------------------------------------------------------- | --------------------------------------------- | ---------- | --------------------
|
|
|
|Retail banking                                                  |                                               |            |                     
|Credicard S.A - Administradora de Cartões de Crédito           
|(g)                                                             | 33.333%                                       | 33.333%    | R$294               
|Redecard S.A.                                                   | 31.943                                        | 31.942     | 31                  
|Serasa - Centralização de Serviços de Bancos S.A. (d)           | 19.120                                        | 16.411     | 151                 
|Cibrasec  Companhia Brasileira de Securitização (d)            | 12.499                                        | 12.499     | 28                  
|Tecnologia Bancária S.A                                         | 21.432                                        | 21.432     | 113                 
|Unibanco Rodobens Administradora de Consórcios Ltda.            | 50.000                                        | 50.000     | 23                  
|FMX S.A. Sociedade de Crédito, Financiamento e Investimento (e) | 49.998                                        | 49.997     | 29                  
|Banco Investcred Unibanco S.A. (e)                              | 49.997                                        | 49.997     | 117                 
|BUS Holding S.A. (b)                                            | -                                             | -          | -                   
|Banco Fininvest S.A. (c)                                        | 99.920                                        | 100.000    | -                   
|Goodwill paid on acquisition of investments (e)                 |                                               |            |                     
|Others                                                          |                                               |            |                     
|Total                                                           |                                               |            |                     
|Wholesale banking                                              
|Interchange Serviços S.A.                                       | 25.000                                        | 25.000     | 27                  
|Others                                                          |                                               |            |                     
|Total                                                           |                                               |            |                     
|Insurance                                                      
|AIG Brasil Companhia de                                        
|Seguros (g)                                                     | 49.999                                        | 49.999     | 77                  
|Others                                                          |                                               |            |                     
|Total                                                           |                                               |            |                     
|Weath management                                               
|Unicorp Bank & Trust                                           
|Ltd. (f)                                                        | 100.000%                                      | 100.000%   | -                   
|Total                                                           |                                               |            |                     
|Total of investments in unconsolidated companies                |                                               |            | 747                 
|Non-marketable investments, at cost                             |                                               |            |                     
|                                                                |                                               |            |                     
|Total                                                           |                                               |            |                     
|                                                                |                                               |            |                     

|(a) | Amounts derived from the Brazilian GAAP financial statements adjusted to U.S. GAAP, when
applicable. There are no material restrictions upon the ability of such companies to remit funds to
Unibanco. Additionally, there are no significant differences between our investment and our
proportionate share of the investees equity.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(b) | In December 2000, we and Banco Bradesco S.A. (Bradesco), a major Brazilian private bank, entered into
an association through BUS-Serviços de Telecomunicações S.A. (BUS), a subsidiary company of BUS
Holdings S.A. (BUS Holding). The association became effective upon we and Bradesco outsourcing our
telecommunications network to PT Prime SGPS S.A. (PT Prime), a subsidiary company of Portugal Telecom
(PT). Under the agreement, PT Prime became Unibancos and Bradescos main provider of management and
administration services for our corporate telecommunications network and systems. PT invested
approximately R$560 in BUS, of which R$196 correspond to our ownership share of BUS Holding. BUS is
licensed to provide specialized circuit and network services in Brazil. We and Bradesco have assigned
to BUS the assets that form the respective telecommunication networks.
The transfer of the control of BUS to PT Prime was subject to approval by ANATEL (Brazilian National
Telecomunications Agency). The parties had initially established that is such approval was not granted
within 180 days from the date of the filing of application, with ANATEL, then the parties could undo
the transaction. On December 27, 2000, the parties entered into an amendment establishing new
provisions in the event ANATEL does not approve the transaction. However, the parties agreed on June
29, 2001 that the transaction was irrevocable and PT received direct equity participation in BUSs
capital of 19.9% of common shares and 10.0% preferred shares. In February 2002 ANATEL authorized us
to reduce our voting interest in BUS Holding to 50.0% without change in our total interest. As a
consequence we increased our interest in preferred shares from 0% to 2.908%. In 2002, we
obtained the required government approvals to transfer BUS to PT Prime and BUS was settled.For U.S. GAAP accounting purposes, the transaction was not reflected in our financial statements as of
December 31, 2000, as the sale was subjected to regulatory approval, except for the book value of our
transferred assets in the amount of R$16. Due to our agreement signed on June 29, 2001 since July 2001
BUS became the operator of our and Bradescos respective corporate telecommunications networks and as
a result R$19 and R$38 of the R$188 expected gain on the transaction was recognized during 2001and
2002, respectivelly, recorded as a reduction of the fees for services provided by PT to us, in
Non-interest expense - administrative expenses. The remaining R$131 being recognized in income
over the term of the related service contract on a straight-line basis, which will expire in June
2006.
|   
|(c) | Prior to November 30, 2000 we accounted for the results of Fininvest using the equity method.
Beginning in December 2000, the results of Fininvest have been included in our consolidated financial
statements (see Note 3).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   
|(d) | Companies in which we own less than 20% of voting shares but exercise significant influence over their
operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   
|(e) | See Note 3. FMX S.A. Sociedade de Crédito, Financiamento e Investimento will change its name to
Luizacred S.A.  Sociedade de Crédito, Financiamento e Investimento after the approval of the Central
Bank.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   
|(f) | In April 2002 we acquired the remaining 24.5% of voting shares of Unicorp Bank & Trust Ltd.. As a
consequence we consolidated Unicorp as from April 2002 (see Note 3).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   
|(g) | Information about the financial position and results of Credicard, presented in accordance with U.S.
GAAP, is as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

|                     | As of December 31, 2001
|-------------------- | -----------------------
|                     | BrazilianGAAP          
|Balance sheet:      
|Total assets         | R$3,402                
|Total liabilities    | 3,105                  
|Stockholders' equity | 297                    
|Our participation    |                        
|                     |                        
|Investment           |                        
|                     |                        

|                     | As of December 31, 2002
|-------------------- | -----------------------
|                     | BrazilianGAAP          
|Balance sheet:      
|Total assets         | R$2,986                
|Total liabilities    | 2,668                  
|Stockholders' equity | 318                    
|Our participation    |                        
|                     |                        
|Investment           |                        
|                     |                        

|                          | For the year ended of December 31, 2000
|------------------------- | ---------------------------------------
|                          | BrazilianGAAP                          
|Statements of operations: |                                        
|Operating revenues        | R$2,164                                
|Operating expenses        | (1,663)                                
|                          |                                        
|Income before income tax  | 501                                    
|Income tax                | (180)                                  
|                          |                                        
|Net income                | R$321                                  
|                          |                                        
|Our participation (a)     |                                        
|                          |                                        
|Equity income             |                                        
|                          |                                        

|                          | For the year ended of December 31, 2001
|------------------------- | ---------------------------------------
|                          | BrazilianGAAP                          
|Statements of operations: |                                        
|Operating revenues        | R$2,440                                
|Operating expenses        | (1,845)                                
|                          |                                        
|Income before income tax  | 595                                    
|Income tax                | (189)                                  
|                          |                                        
|Net income                | R$406                                  
|                          |                                        
|Our participation (a)     |                                        
|                          |                                        
|Equity income             |                                        
|                          |                                        

|                          | For the year ended of December 31, 2002
|------------------------- | ---------------------------------------
|                          | BrazilianGAAP                          
|Statements of operations: |                                        
|Operating revenues        | R$2,315                                
|Operating expenses        | (1,744)                                
|                          |                                        
|Income before income tax  | 571                                    
|Income tax                | (177)                                  
|                          |                                        
|Net income                | R$394                                  
|                          |                                        
|Our participation (a)     |                                        
|                          |                                        
|Equity income             |                                        
|                          |                                        

|(a) | Our participation in the results of Credicard is not necessarily the same
in each period due to the effects of applying a formula for calculating earnings to be attributed to each stockholder based
principally on the volume of credit card operations.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Note 12 - Premises and Equipment

|                                                         | Estimated    | As of December 31,
|-------------------------------------------------------- | ------------ | ------------------
|
|                                                         | life (years) | 2001              
|                                                         |              |                   
|Land                                                     | -            | R$343             
|Buildings                                                | 25           | 641               
|Furniture and equipment                                  | 10           | 246               
|Leasehold improvements                                   | 5-10         | 425               
|Data processing equipment                                | 5            | 787               
|Costs of software developed or obtained for internal use | 5            | 352               
|Vehicles                                                 | 5            | 2                 
|Others                                                   | -            | 82                
|                                                         |              |                   
|Total                                                    |              | 2,878             
|Less: Accumulated depreciation                           |              | 1,123             
|                                                         |              |                   
|Premises and equipment, net                              |              | R$1,755           
|                                                         |              |                   

Depreciation expense was R$224, R$258 and R$259 in 2000, 2001 and
2002, respectively,  including R$36, R$24 and R$12  related  to  depreciation  expense  on
assets  under  capital  leases  in 2000,  2001 and 2002, respectively.

We have  entered into leasing  agreements,  mainly  related to data
 processing  equipment,  which are accounted for as capital leases.  Under this
accounting  method both an asset and an obligation are recorded in the  financial
 statements  and  the  asset  is  depreciated  in a  manner  consistent  with  our
 normal depreciation policy for owned assets.

During  2002 we sold many  properties  used as  branches  and,  subsequently,  we rented  them for the
purpose  of  continuing  our  operations.  These  sales  was  recorded  pursuant  to  SFAS 13 and  SFAS  98,
Accounting for leasing and SFAS 28 Accounting for sales subject to rental contracts.

The  transactions  were  classified as  sale-leasebacks  involving  operating  leases and therefore we
recorded the sale, removing all property from the balance sheet.

The sales in which we incurred  in gains were  recognized  depending
 on whether we provided or not an extended  minimum lease period  guarantee to the buyer,
 which was not  considered to be under normal market conditions  (usually such  contracts
 guarantee a minimum  period of 5 years).  For those  contracts that we considered  not
to be under  normal  conditions  due to the extended  minimum  lease  period  guarantee,
 we deferred the gains in the amount of R$23 in proportion  to the related gross rental
 charges to expense over the lease terms for the next 5 years.  Gains and losses for the
other  contracts  were directly  recorded in current earnings. Minimum lease payments for
these contracts are disclosed in Note 29.

Note 13 - Other Assets

|                                                       | As of December 31,
|------------------------------------------------------ | ------------------
|                                                       | 2001              
|Deferred tax assets, net (see Note 18)                 | R$1,601           
|Prepaid taxes                                          | 865               
|Foreclosed assets, net                                 | 129               
|Insurance premiums receivable                          | 40                
|Restricted escrow deposits for contingencies (Note 29) | 784               
|Negotiation and intermediation of securities           | 104               
|Income receivable                                      | 97                
|Prepaid expenses                                       | 170               
|Retirement government benefit advances                 | 39                
|Others                                                 | 551               
|                                                       |                   
|Total                                                  | R$4,380           
|                                                       |                   

For comparison  purposes we reclassified  R$296 in restricted
 escrow deposits at December 31, 2001 represented by Federal Government Securities for Trading Assets.

Note 14  Time Deposits

The following table shows the maturity of outstanding deposits with balances issued by us at December 31,
2001 and 2002.

|                                             | 2001   | 2002  
|-------------------------------------------- | ------ | ------
|Maturity within 3 months                     | 2,840  | 5,066 
|Maturity after 3 months but within 6 months  | 1,548  | 720   
|Maturity after 6 months but within 12 months | 1,210  | 1,356 
|Maturity after 12 months but within 5 years  | 5,260  | 9,712 
|Total deposits                               | 10,858 | 16,854

Note 15 - Federal Funds Purchased, Securities Sold Under Repurchase
Agreements and Short-term Borrowings

Financial  data of our federal  funds  purchased,  securities  sold under  repurchase  agreements  and
short-term borrowings, were as follows:

|                                                                         | As of December 31,
|------------------------------------------------------------------------ | ------------------
|                                                                         | 2001              
|Federal funds purchased, securities sold under repurchase agreements and |                   
|short-term borrowings                                                    | R$7,587           
|Import and export financings                                             | 3,359             
|Commercial paper                                                         | 808               
|Other interbank borrowings                                               | 1,812             
|Others                                                                   | 261               
|Total                                                                    | R$13,827          

Import and export financings represent credit lines open for financing imports and exports of Brazilian
companies, typically denominated in foreign currency. We then make corresponding extensions of credit to
exporters/importers denominated in Brazilian reais with payments made to us (in the case of exports) or
paid by us (in the case of imports) in foreign currency.

The average interest rates  applicable to short-term  borrowings
were 4.1% p.a. and 3.7% p.a. for import and export  financings,  2.2% p.a.  and 2.2% p.a.
 for  commercial  paper and 3.9% p.a.  and 2.7% p.a. for other interbank borrowings in
2001 and 2002, respectively.

The following table presents the federal funds purchased,  securities sold under repurchase agreements
and short-term borrowings by maturities.

|                                                                         | 2001     | 2002    
|------------------------------------------------------------------------ | -------- | --------
|Federal funds purchased and securities sold under repurchase agreements:
|Due in 1 month or less                                                   | R$7,587  | R$13,806
|Short-term borrowings:                                                  
|Due in 1 month or less                                                   | 976      | 555     
|Due in between 1 and 3 months                                            | 1,346    | 820     
|Due in between 3 and 6 months                                            | 1,402    | 2,836   
|Due after 6 months                                                       | 2,516    | 2,094   
|                                                                         |          |         
|Total                                                                    | R$13,827 | R$20,111
|                                                                         |          |         

Note 16 - Long-term Debt

The composition of long-term debt is as follows:

|                                               | As of December 31,
|---------------------------------------------- | ------------------
|                                               | 2001              
|Local onlendings                               | R$4,436           
|Euronotes                                      | 2,693             
|Notes issued under securitization arrangements | -                 
|Subordinated debt                              | -                 
|Mortgage indebtedness                          | 461               
|Interbank onlendings                           | 37                
|Foreign onlendings                             | 36                
|Obligations under capital leases               | 42                
|Others                                         | 142               
|                                               |                   
|Total                                          | R$7,847           
|                                               |                   

Local onlendings

Local onlendings  represent amounts borrowed from Brazilian
 agencies for loans to Brazilian  entities to invest primarily in premises and equipment.
 These amounts are due in monthly  installments  through 2018 and bear fixed  interest
 between 1% p.a. and 2.5% p.a., in 2001 and 2002,  plus variable  interest based on the
TJLP  (Long-term  interest  rate  determined  by the Brazilian  Central Bank on a
quarterly  basis,  not inflation-adjusted),  US dollar or the BNDES basket of
 currencies.  The borrowings are primarily from BNDES (National  Economic and Social
 Development Bank) and FINAME (National  Industrial Finance Authority) in the form of
credit lines.

Euronotes

|                  | Orignal |      |        | Carrying amount
(net of repurchases)
as of December 31
|----------------- | ------- | ---- | ------ | ------------------------------------------------------
|
|Maturity date (a)
|                  |         |      |        |                                                       
|January 04, 2002  | 1       | US$  | 7.25%  | R$23                                                  
|January 07, 2002  | 2       | US$  | 7.88%  | 46                                                    
|January 15, 2002  | 0.1     | US$  | 2.50%  | 70                                                    
|January 15, 2002  | 0.8     | US$  | 5.50%  | 12                                                    
|February 05, 2002 | 0.3     | US$  | 3.25%  | 19                                                    
|February 08, 2002 | 1       | US$  | 5.13%  | 23                                                    
|February 20, 2002 | 1       | US$  | 6.40%  | 12                                                    
|February 26, 2002 | 0.6     | US$  | 5.00%  | 19                                                    
|February 28, 2002 | 0.6     | US$  | 4.99%  | 46                                                    
|March 16, 2002    | 2       | US$  | 9.00%  | 83                                                    
|April 26, 2002    | 2       | US$  | 8.88%  | 225                                                   
|May 07, 2002      | 0.9     | US$  | 5.44%  | 23                                                    
|May 14, 2002      | 0.6     | US$  | 3.40%  | 14                                                    
|May 31, 2002      | 0.6     | US$  | 3.75%  | 23                                                    
|June 07, 2002     | 0.6     | US$  | 3.75%  | 12                                                    
|June 21, 2002     | 0.6     | US$  | 3.63%  | 12                                                    
|August 29, 2002   | 1       | US$  | 5.05%  | 24                                                    
|August 30, 2002   | 2       | US$  | 8.75%  | 350                                                   
|October 18, 2002  | 1.5     | US$  | 7.00%  | 326                                                   
|December 03, 2002 | 1.1     | US$  | 5.25%  | 44                                                    
|December 12, 2002 | 1       | US$  | 4.63%  | 22                                                    
|February 18, 2003 | 1       | US$  | 4.25%  | -                                                     
|March 30, 2003    | 2       | US$  | 7.25%  | 208                                                   
|June 06, 2003     | 0.6     | US$  | 4.69%  | -                                                     
|August 26, 2003   | 2.1     | US$  | 7.25%  | 252                                                   
|October 17, 2003  | 6       | EURO | 7.00%  | 219                                                   
|February 15, 2004 | 2       | US$  | 6.00%  | -                                                     
|February 26, 2004 | 3       | US$  | 8.50%  | 24                                                    
|December 12, 2004 | 8       | US$  | 10.25% | 231                                                   
|December 23, 2004 | 8       | US$  | 10.00% | 8                                                     
|December 24, 2007 | 5       | US$  | 6.50%  | -                                                     
|April 15, 2014    | 13      | US$  | 8.0%   | 54                                                    
|Others            |         |      |        | 269                                                   
|                  |         |      |        |                                                       
|Total             |         |      |        | R$2,693                                               
|                  |         |      |        |                                                       

|(a) | Maturity date and original term in years, consider, when applicable, the investor put rights.
|--- | ---------------------------------------------------------------------------------------------

Notes issued under securitization arrangements

Notes  issued  under  securitization  arrangements  involving  certain  of our US  dollar  denominated
electronic  remittance  payment  orders  (DPRs)  pursuant  to which we sold such  DPRs to UBB  Diversified
Payment Rights Finance Company,  a special purpose company.  Backed by the DPRs, the special purpose company
issued a series of notes in an aggregate  principal amount of US$400 million  corresponding to R$1,413 as of
December 31, 2002.  The full payment of principal  and interest on the issued  series of notes is guaranteed
by a  financial  guaranty  policy.  We  are  not  responsible  for  the  existence  of  the  flow  of  DPRs.
Nevertheless,  upon the occurrence of certain events,  which have a material adverse effect on the existence
of the future flows of the DPRs,  we are required to pay to the SPC the  repurchase  price of the DPRs,  the
proceeds  of which  will be used by the SPC to redeem  any  outstanding  notes and are  liable  for  amounts
relating to such notes.  The notes bear  interest at (3 - month) Libor plus 0.57% per annum,  payable  quarterly
and the principal will be payable quarterly,from October 2004 to July 2009.

Subordinated debt

|                                       
|---------------------------------------
|                                       
|Step-up subordinated callable notes (1)
|Subordinated time deposits (2)         
|                                       
|Total                                  
|                                       

|(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 11.79% per annum.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Subordinated time deposits can be redeemed from December 2007.                                                                                           
|(3) | The Brazilian interbank interest rate.                                                                                                                   

Maturity of long-term debt

|           | As of December 31,
|---------- | ------------------
|           | 2001              
|2002       | R$3,588           
|2003       | 1,383             
|2004       | 1,006             
|2005       | 454               
|2006       | 450               
|2007       | 375               
|Thereafter | 591               
|           |                   
|Total      | R$7,847           
|           |                   

Mortgage indebtedness

Mortgage indebtedness  represents borrowings with original terms
generally between 6 and 24 months and bears interest of TRF-R (Floating  Reference Rate
 established  daily by the Central Bank) plus 6.0% p.a. to 13.7% p.a. in 2001 and 6.0%
p.a. to 20.0% p.a. in 2002.  These  instruments  are regularly  rolled  forward for
periods of more than one year, and are entirely collateralized by housing loans.

Foreign onlendings

Foreign onlendings,  consisting of long-term credit lines for
project and trade finances,  are payable up to March 15, 2010, with an average interest
rate of 4.8% per annum.

Note 17 - Other Liabilities

|                                                                     | As of December 31,
|-------------------------------------------------------------------- | ------------------
|                                                                     | 2001              
|Pension investment contracts (of pension fund management subsidiary) | R$1,333           
|Insurance claims reserve                                             | 633               
|Retirement plan reserve (of pension fund management subsidiary)      | 148               
|Provision for litigations (see Note 29)                              | 1,396             
|Income taxes and other taxes payable                                 | 268               
|Payable to merchants - credit card                                   | 412               
|Derivatives liability (see Note 28):                                
|Swaps                                                                | 112               
|Forward contracts                                                    | 31                
|Foreign exchange portfolio                                           | 124               
|Social and statutory                                                 | 309               
|Collection of third-party taxes, social contributions and other      | 286               
|Employee related liabilities                                         | 152               
|Accounts pending settlement                                          | 104               
|Others                                                               | 1,223             
|                                                                     |                   
|Total                                                                | R$6,531           
|                                                                     |                   

Note 18 - Income Taxes

Under the Brazilian  Income Tax Law,  Holdings,  Unibanco and our
subsidiaries are treated as separate taxable entities and are required to file a separate
tax return.

HOLDINGS

Dividends received and equity in Unibancos  undistributed earnings
are not subject to Brazilian federal income tax and social contribution.

UNIBANCO

Income taxes in Brazil  comprise  federal  income tax and social
 contribution,  which is an  additional federal tax.  The tax rates  applicable  to
financial  institutions  for the three years  presented  were as follows:

|Federal income tax      | 25.0%
|----------------------- | -----
|Social contribution (a) | 9.0  
|                        |      
|Composite               | 34.0%
|                        |      

|(a) | The enacted rate was 8% for 2000 and 2001. Provisional measures,
which are issued by the president but are not considered enacted until approved by the
Congress, established rate of 9%. In September 2001, a constitutional amendment
converted the provisional measures into enacted Law.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The amounts  reported as income tax expense in the consolidated
 financial  statements are reconciled to the statutory rates as follows:

|                                                           | For the year ended December 31,
|---------------------------------------------------------- | -------------------------------
|                                                           | 2000                           
|Income before income taxes                                 | R$711                          
|Less: Equity in results of unconsolidated companies        | 164                            
|                                                           |                                
|Tax basis                                                  | 547                            
|                                                           |                                
|Tax expense at statutory rates                             | (186)                          
|                                                           |                                
|Adjustments to derive effective tax rate:                 
|Exempt foreign source income from subsidiaries (a)         | 34                             
|Tax benefit on interest attributed to stockholders' equity | 65                             
|Other permanent differences                                | (9)                            
|Effect of changes in tax laws and rates on deferred tax    | (1)                            
|Non-taxable capital gains                                  | 32                             
|Non-taxable exchange gain on foreign assets                | 51                             
|                                                           |                                
|Income tax expense                                         | R$(14)                         
|                                                           |                                

|(a) | Beginning January 1, 2002 all income of subsidiaries abroad are taxable.
|--- | ------------------------------------------------------------------------

The payment of  tax-deductible  interest on equity was introduced as
from January 1, 1996 as an option for  profit  distributions,  which  were  previously
 permitted  only  in  the  form  of  non-tax-deductible dividends.  In 2001 we opted to
 distribute  substantially  all amounts  declared  in the form of  dividends rather than
interest on equity.

The major components of the deferred tax accounts in the
consolidated balance sheet are as follows:

|                                                                           | As of December 31,
|-------------------------------------------------------------------------- | ------------------
|                                                                           | 2001              
|Provisions for credits losses                                              | R$675             
|Other provisions not currently deductible                                  | 342               
|Tax benefit on reorganization of subsidiaries                              | 276               
|Tax losses carryforwards                                                   | 358               
|Fair value adjustments on securities and derivatives financial instruments | 12                
|Other temporary differences, mainly expenses recognized under US GAAP     
|in advance of recognition under Brazilian GAAP and for tax purposes        | 107               
|                                                                           |                   
|Deferred tax assets                                                        | 1,770             
|                                                                           |                   
|Effect of differences between indexes used for price-level                
|restatement purposes for tax and U.S. GAAP purposes,                      
|mainly relating to premises and equipment                                  | 25                
|Temporary differences relative to leasing depreciation                     | 135               
|Others                                                                     | 9                 
|                                                                           |                   
|Deferred tax liabilities                                                   | 169               
|                                                                           |                   
|Net deferred tax asset, included in other assets                           | R$1,601           
|                                                                           |                   

The tax losses  carryforwards
have no expiration date, but are  subject to a  limitation  of 30% of
taxable  income for the year.  No  valuation  allowances  have been created for these tax
losses  carryforwards,  since we currently believe the realization of these future tax
benefits to be more likely than not.

Note 19 - Stockholders Equity, Shareholders and Board of Directors Meetings

HOLDINGS

At December 31, 2000,  2001 and 2002, the capital of Holdings
 comprises the following  shares,  without par value:

|                                      | As of December 31,
|------------------------------------- | ------------------
|                                      | 2000              
|Voting common shares                  | 37,138,435,873    
|Non-voting class "A" preferred shares | 3,843,541,338     
|Non-voting class "B" preferred shares | 43,115,835,701    
|                                      |                   
|Total shares                          | 84,097,812,912    
|                                      |                   

At  December  31,  2001 and 2002,  Holdings  is  authorized  to
issue,  without  change in the  by-laws, 60,000,000,000   voting  common   shares,
  3,843,541,338   non-voting   class  A  preferred   shares  and 116,156,458,662
non-voting class B preferred shares.

The preferred  shares have priority over common  shareholders in the
liquidation of capital equal to the amount of capital stock  represented by such
preferred  shares.  All  stockholders are entitled to receive a total  dividend  equal to
the cash earnings of Holdings  each year  adjusted for the holding  period of such stock.
 The common and class B  preferred  holders share equally in the payment of dividends
and the class A  preferred  shares have a  guaranteed  dividend  10% greater per share
than the  dividends  per share on common and  preferred  class B stock.  Holders of
class B  preferred  shares are  entitled  to receive a semi-annual minimum dividend of
R$0.15 per 1,000 class B preferred shares.

The shares of Holdings and Unibanco are traded also in a form of
Share Deposit  Certificate  (Unit) or Global  Depositary  Share (GDS).  Each Unit is
represented by a preferred  share issued by Unibanco and by a class  B  preferred
 share  issued  by  Holdings  and is  traded  in the  Brazilian  Market.  Each  GDS is
represented by 500 Units and is traded in the international market.

On  December  28,  2000,  in  connection  with our
 acquisition  of  Bandeirantes  (Note  3),  a Extraordinary  Shareholders  Meeting
 approved  an  increase  of the  capital of R$406  through the issue of 3,713,843,587
 voting common shares and  6,758,000,000  non-voting  class B preferred shares in book
entry form with no par value.

Through the payment of the capital increase,  Holdings received
shares of Caixa Brasil Associação S.A. which had a 7.445% interest in Unibanco,
 representing an indirect  interest of Holdings in Unibanco and the constitution of an
additional stock premium in the amount of R$252.

On October 31, 2001 the  Extraordinary  Shareholders  Meeting
 approved a further issue of 232,663,384 class B  preferred  shares  with no par value
for R$11.  The  proceeds  were used to  acquire  232,663,384 shares of Unibanco from
Instituto Unibanco. See Note 4.

In accordance  with  Brazilian law and Holdings  by-laws,  certain
 amounts of retained  earnings are appropriated as follows:

Legal  reserve  - this  reserve  is  required  for  all  Brazilian
 corporations  and  represents  the appropriation  of 5% of the net income in the
statutory  accounting  records up to a limit of 20% of capital stock.

Unrealized income reserve - represents the amount of undistributed
earnings of Unibanco to Holdings.

Special  dividends  reserves - represents the amount of
 undistributed  earnings of Unibanco for 1993, which is not subject to withholding
 taxes,  and such earnings for 1989 to 1992,  for which the  withholding taxes have been
paid.

There are no  unappropriated  retained earnings in Holdings  statutory
 accounts at December 31, 2001 and 2002.

UNIBANCO

At December 31, 2000, 2001 and 2002, the Banks capital  comprises
the following  shares,  without par value:

|                            | As of December 31,
|--------------------------- | ------------------
|                            | 2000              
|Voting common shares        | 75,568,744,349    
|Non-voting preferred shares | 65,084,425,585    
|                            |                   
|Total shares                | 140,653,169,934   
|                            |                   

At  December  31,  2001  and  2002,  we are  authorized  to  issue
 without  change  in  the  by-laws, 95,195,526,716 additional shares in the form of
common or preferred shares.

Preferred  shares  carry  no  voting  rights  but  have  priority
 over  common  shareholders  in  the reimbursement  of  capital in the case of
 liquidation,  up to the  amount of  capital  represented  by such preferred  shares,
 and the right to receive a priority dividend per share 10% greater than that distributed
per share to common  shareholders.  All stockholders are entitled to receive, in total, a
mandatory dividend of at least 35% of the Banks  annual net income as stated in the
 statutory  accounting  records,  adjusted for prior transfers to and from reserves.

On December 11, 2000 as a  consequence  of our  association  with
Caixa Geral de  Depósitos  (CGD) and Bandeirantes (Note 3), an agreement was made
relative to:

|(i)  | shares of Caixa Brasil Participações S.A.
(CBP), controlling company of Bandeirantes; and
|---- | -----------------------------------------------------------------------------------------
|    
|(ii) | shares of minority shareholders of Bandeirantes.                                         

In order to calculate the exchange value of the shares of CBP, a
company indirectly  controlled by CGD and owner of  98.11% of the  capital  of
 Bandeirantes  and other  financial  assets of CGD do  Brasil,  the Bandeirantes shares
were valued based on the method of future cash flows discounted to present value.

The  quantities  of our shares  issued in the exchange  were
 determined  based on the average  quoted market prices for our common shares and Units,
 during the week prior to the business  proposal made to CGD. For each 9,115.2923  shares
of CBP and Bandeirantes,  we issued 1,000 shares,  comprised by 607.77357 common shares
 and  392.22643  preferred  shares,  to the  shareholders  of CBP and the  minority
 shareholders  of Bandeirantes.

The share exchange was approved in the following Extraordinary
Shareholders Meetings:

|(i)  | CBP  on  December  27,  2000,  when our  capital  was  increased  by R$1,044  through the issue of
           17,229,843,587  shares with no par value,  being  10,471,843,587  common shares and 6,758,000,000
           preferred shares; and            
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    
|(ii) | Minority  shareholders  of  Bandeirantes  on December 28, 2000,  when our capital was increased by
           R$18,  through the issue of 303,762,675 shares with no par value, being 184,618,926 common shares
           and 119,143,749 preferred shares.

In  connection  with the exchange of shares we recorded an
 additional  stock premium in the amount of R$39 based on the average quoted market
prices of our Units during the week prior to the date of issue.

On October  31,  2001 the  Extraordinary  Shareholders  Meeting
 approved a capital  increase  of R$2, represented  by  232,663,384  preferred  shares
 with no par  value.  The  meeting  also  approved a capital increase  of R$302 using
part of the legal  reserves  balance and part of the  retained  earnings  balance
without change in the number of shares.

Appropriated  retained  earnings  -  Brazilian  law  and  the
 Bank's  by-laws  require  that  certain appropriations  be made from  retained  earnings
 to reserve  accounts on an annual  basis.  The purpose and basis of appropriation to
such reserves are described below:

Legal  reserve - this reserve is a requirement  for all  Brazilian
 corporations  and  represents  the appropriation  of 5% of the net income in the
statutory  accounting  records up to a limit of 20% of capital stock.

Special  dividends  reserves - represents the amount of
 undistributed  earnings of Unibanco for 1993, which is not subject to withholding
 taxes,  and such earnings for 1989 to 1992,  for which the  withholding taxes have been
paid. A withholding  tax of 15% is payable upon  distribution of profits earned from
January 1, 1994 through  December 31, 1995. No  withholding  tax is payable on the
 distribution  of profits  earned after December 31, 1995.

Fiscal incentive  investment reserve - the fiscal incentive
 investment reserve results from an option to designate a portion of income tax otherwise
 payable for  investment in  government-approved  development funds or projects and is
recorded in the year following that in which the taxable income was earned.

Unappropriated  retained earnings in the Banks statutory  accounts
at December 31, 2001 and 2002 were R$2,018 and R$2,719, respectively.

TREASURY STOCK AND BUY-BACK PROGRAM - HOLDINGS AND UNIBANCO

|(i)   | Through  the  Share  Exchange  Agreement  signed  on  August  31,  2001,  Unibanco  assigned  and
           transferred to Holdings,  24,397,249  class B preferred  shares issued by Holdings and acquired
           through a prior repurchase  program in the form of Units,  and Holdings  assigned and transferred
           to Unibanco  the same  quantity  of  preferred  shares  issued by Unibanco. The shares  exchanged  were
           recorded in Unibanco and in Holdings as treasury stocks;                                 
|----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     
|(ii)  | On September 20, 2001  Unibancos  Board of Directors and Holdings  Board of Directors  authorized
           for a period of three months,  the  acquisition at market prices of up to 220,948,544 of Unibanco
           common shares,  4,597,425,824 of Unibancos preferred shares and 4,236,225,772 of Holdings class
           B preferred  shares,  to be maintained in treasury for subsequent sale or cancellation  without
           capital reduction. The acquisition can be made through the acquisition of shares, Units or GDS.
|     
|(iii) | On December 27, 2001 Unibancos  Board of Directors and Holdings  Board of Directors  approved the
           renewing of buy-back  program,  with the following limits: up to 257,364,326 of Unibancos common
           shares and up to 3,177,019,267 of Unibancos preferred shares, and up to 3,438,618,826  Holdings
           class B preferred shares.                                                                                                                                                                                 

Up to December 31, 2001,  153,200,000 of Unibancos  preferred
shares,  46,500,000 Units and 1,702,500 GDS issued by Unibanco and Holdings  were
 repurchased.  Through the Share  Exchange  Agreement,  Unibanco assigned and
transferred to Holdings  897,750,000  class B preferred  shares issued by Holdings,
 acquired in the form of Units and GDS and  Holdings  assigned  and  transferred  to
 Unibanco  897,750,000  preferred shares  issued by  Unibanco,  at an average  price of
R$43.15  per  thousand  shares,  as  treasury  stocks. Therefore,  Unibanco  recorded
 1,948,700,000  preferred  shares at an average price of R$37.10 per thousand shares as
treasury stocks.  The minimum and maximum  acquisition prices were R$34.87 per thousand
shares and R$55.91 per thousand shares,  respectively.  Holdings recorded 897,750,000
preferred shares class B, at an average price of R$43.15 per thousand shares, as
treasury stocks.

In 2002,  41,400,000  preferred
shares  issued by Unibanco  were
 repurchased  at an average price of R$52.67. The minimum and maximum acquisition prices
were R$52.30 and R$53.53.

The fair value of treasury stocks at December 31, 2002, based
on the Unit price at December 31, 2002 in São Paulo Stock Exchange was R$37 in Holdings and R$93 in Unibanco.

Note 20  Restructuring Charges

In connection with the  Bandeirantes  acquisition  (see Note 3), we
implemented a restructuring  plan to improve  operating  efficiencies  and to fully
 integrate the acquired  branches and  operations,  including systems  integration.  The
plan involved a number of strategic  decisions,  including the closing of certain branch
 locations,  a  reduction  of  operating  expenses  and  a  reduction  in  combined
 workforce.   The restructuring charges also includes certain  restructuring  matters to
improve operations,  each of which is discussed below.

a) Restructuring charges directly related to the Bandeirantes
acquisition.

We estimated that the restructuring  charges directly related to the
acquisition of Bandeirantes would total approximately  R$87. These charges mainly
comprised costs associated with employee severance,  systems integration  and branch
 consolidation  and were accrued and included in the purchase price of  Bandeirantes as
 additional  goodwill.  Through  December 31, 2000, we have not utilized the
 Bandeirantes  restructuring liabilities.  During  2001 we  utilized  the entire
 restructuring  liabilities,  since the  integration  of Bandeirantes  was  concluded.
 Additionally  we  have  expensed  in  2001  R$14  as  incurred.  In  2002  no
restructuring charges was recorded.

b) Other restructuring charges

During the year ended December 31, 2000 in connection of a
comprehensive  program of self-examination, that involved  focusing all areas of the
 organization  on our processes  and  structures,  we have expensed other  restructuring
 charges of R$45 as incurred,  since no formal plan of restructuring  had been adopted.
See Note 2 (v) and 24.

Note 21 - Fee and Commission Income

|                                              | For the year ended December 31,
|--------------------------------------------- | -------------------------------
|                                              | 2000                           
|Asset management fees                         | R$217                          
|Credit card fees                              | 146                            
|Collection fees                               | 128                            
|Banking tariffs and other fees and comissions | 643                            
|                                              |                                
|Total                                         | R$1,134                        
|                                              |                                

Note 22  Insurance, Private Retirement Plan and Pension Investment
Contracts

(a) Income

|                                    | For the year ended December 31,
|----------------------------------- | -------------------------------
|                                    | 2000                           
|Insurance premiums                  | R$755                          
|Pension investment contracts income | 27                             
|Private retirement plan premiums    | 12                             
|                                    |                                
|Total                               | R$794                          
|                                    |                                

(b) Expenses

|                                                    | For the year ended December 31,
|--------------------------------------------------- | -------------------------------
|                                                    | 2000                           
|Adjustment to insurance reserves for claims         | R$42                           
|Adjustment to private retirement plans for benefits | 14                             
|Adjustment to pension investment contracts          | 112                            
|Insurance claims incurred                           | 447                            
|Private retirement plans benefits expenses          | 34                             
|Acquisition costs and other                         | 101                            
|                                                    |                                
|Total                                               | R$750                          
|                                                    |                                

Note 23- Administrative Expenses

|                                                  | For the year ended December 31,
|------------------------------------------------- | -------------------------------
|                                                  | 2000                           
|Net occupancy expenses for premises and equipment | R$463                          
|External administrative services                  | 502                            
|Technology expenses                               | 82                             
|Communication expenses                            | 121                            
|Banking and brokerage fees                        | 100                            
|Supplies                                          | 32                             
|Advertising and publicity                         | 121                            
|Other                                             | 103                            
|                                                  |                                
|Total                                             | R$1,524                        
|                                                  |                                

Note 24 - Other Non-Interest Income and Expense

|                                                                                           | For the year ended December 31,
|------------------------------------------------------------------------------------------ | -------------------------------
|                                                                                           | 2000                           
|Other non-interest income:                                                                 |                                
|Gain on sale of foreclosed assets, investments                                            
|and premises and equipment (a)                                                             | R$268                          
|Provision for losses on foreclosed assets and unconsolidated investment no longer required | 25                             
|Capital gain on partial sale of Banco1 business (b)                                        | 93                             
|Gain on foreign investments (c)                                                            | 142                            
|Provisions for litigation no longer required                                               | 17                             
|Premium bond income                                                                        | 45                             
|Monetary correction of restricted escrow deposits                                          | 22                             
|Others                                                                                     | 155                            
|                                                                                           |                                
|Total                                                                                      | R$767                          
|                                                                                           |                                

|                                                                                      | For the year ended December 31,
|------------------------------------------------------------------------------------- | -------------------------------
|                                                                                      | 2000                           
|Other non-interest expense:                                                           |                                
|Loss on sale foreclosed assets, unconsolidated investments and premises and equipment | R$33                           
|Provision for losses on foreclosed assets and unconsolidated investments              | 81                             
|Uninsured losses of branch network                                                    | 12                             
|National financing system contributions                                               | 25                             
|Restructuring charges (d)                                                             | 45                             
|Civil litigation expenses                                                             | 34                             
|Service, revenue and other taxes (including tax litigation)                           | 296                            
|Statutory profit sharing                                                              | 6                              
|Foreign exchange rate variation on other liabilities                                  | -                              
|Credit card selling expenses                                                          | 35                             
|Others                                                                                | 151                            
|                                                                                      |                                
|Total                                                                                 | R$718                          
|                                                                                      |                                

|(a) | In 2000 includes R$138 gain on sale of unconsolidated companies being: R$95 pre tax gain on sale
of Quatro/A Telemarketing & Centrais de Atendimento S.A.; R$36 pre tax gain on exchange of
our investment in Zip.Net S.A.; and R$7 pre tax gain on sale of our minority interest in Volkswagen
Leasing S.A.  Arrendamento Mercantil.                                                                                                                                                  
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(b) | In September 2000 the Brazilian government authorities authorized our joint venture with PT
Multimedia.com, controlled by Portugal Telecom. Through this association Banco1.net S.A., our
indirect controlled company was created and PT Multimedia.com invested indirectly in Banco1.net S.A.
an amount of R$93 as subscription bonus. The investment made by PT Multimedia.com generated a gain of
R$93.                                                                              
|   
|(c) | During 2000, 2001 and 2002 the Real devalued against the US dollar 9.3%, 18.7% and 52.3%
respectively, (R$1.9554=US$1.00 at December 31, 2000, R$2.3204=US$1.00 at December 31, 2001 and
R$3.5333=US$1.00 at December 31, 2002).                                                                                                                                                                                                                                                        
|   
|(d) | We continue to implement our overall restructuring plans in 2000. These activities are a part of
our plan to improve the overall efficiency of our operations by improving technology, consolidating
existing branches and other integration activities. The related costs are expensed as incurred. The
2000 amount does not include the restructuring charges related with the Bandeirantes acquisition,
while the 2001 amount is entirely related with the Bandeirantes integration.

Note 25  Stock-based Compensation

The Extraordinary  Shareholders  Meeting held on October 31, 2001,
approved the stock option program, denominated  Performance.   The  objective  of  Performance  is
 to  foster  the  executives  long-term commitment  to the highest  performance
 standards,  as well as attract,  retain and  motivate  new talents. Pursuant to the  Performance  program,
 our  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.

The stock options were recorded on the basis of fair value based
accounting  method calculated using a Black-Scholes model using the following assumptions
in 2002:

| | measurement date = grant date;              
|- | --------------------------------------------
| | weighted historic volatility of 56.2%;      
| | expected dividend yield of 4.7% per year;   
| | annual risk-free interest rate of 26.4%; and
| | expected average lives of 4.5 years.        

As a result we recognized as expense R$9 during the year ended
December 31, 2002.

Changes in options are summarized in the following table as of year
ended December 31, 2002.

|                                   | Quantity of options(in thousands of Units) | Wheighted averageexercise price | Wheighted averagefair value at grant date
|---------------------------------- | ------------------------------------------ | ------------------------------- | -----------------------------------------
|Balance, beginning of year         | -                                          | -                               | -                                        
|Options granted in a form of Unit  | 669,700                                    | R$91.18                         | R$59,12                                  
|                                   |                                            |                                 |                                          
|Balance, end of year               | 669,700                                    | R$91.18                         | R$59,12                                  
|                                   |                                            |                                 |                                          
|Options exercisable as of year-end | -                                          | -                               | -                                        
|                                   |                                            |                                 |                                          

The main conditions of the options outstanding as of December 31,
2002 are as follows:

|Exercise price | Quantity of options (in thousands of Units) | Weighted averageremainingcontractual life
|-------------- | ------------------------------------------- | -----------------------------------------
|R$93.10        | 603,300                                     | 4.1                                      
|109.10         | 3,400                                       | 4.3                                      
|84.00          | 10,000                                      | 4.6                                      
|70.48          | 18,000                                      | 4.6                                      
|R$69.04        | 35,000                                      | 4.9                                      
|               |                                             |                                          
|               | 669,700                                     |                                          
|               |                                             |                                          

Note 26 - Comprehensive Income

HOLDINGS

|                                                             | For the year ended December 31,
|------------------------------------------------------------ | -------------------------------
|                                                             | 2000                           
|Net income reported in statement of income                   | R$367                          
|                                                             |                                
|Unrealized holding gains (losses) arising during the period:
|Unrealized gains (losses) on securities available for sale   | 6                              
|Unrealized losses on cash flow hedging instruments           | -                              
|                                                             |                                
|Other comprehensive income (loss) before tax                 | 6                              
|Income tax related to items of other comprehensive income    | (2)                            
|                                                             |                                
|Other comprehensive income (loss), net of tax                | 4                              
|                                                             |                                
|Comprehensive income                                         | R$371                          
|                                                             |                                

Accumulated other comprehensive loss is as follows:

|                      | For the year ended December 31,
|--------------------- | -------------------------------
|                      | 2000                           
|Beginning balance     | R$(25)                         
|Current period change | 4                              
|                      |                                
|Ending balance        | R$(21)                         
|                      |                                

UNIBANCO

|                                                                 | For the year ended December 31,
|---------------------------------------------------------------- | -------------------------------
|                                                                 | 2000                           
|Net income reported in statement of income                       | R$628                          
|                                                                 |                                
|Unrealized holding gains (losses) arising during the period:    
|Unrealized gains (losses) on securities available for sale       | 10                             
|Unrealized losses on cash flow hedging instruments               | -                              
|                                                                 |                                
|Other comprehensive income before tax                            | 10                             
|Income tax related to items of other comprehensive income (loss) | (4)                            
|                                                                 |                                
|Other comprehensive income(loss), net of tax                     | 6                              
|                                                                 |                                
|Comprehensive income                                             | R$634                          
|                                                                 |                                

Accumulated other comprehensive income (loss) is as follows:

|                      | For the year ended December 31,
|--------------------- | -------------------------------
|                      | 2000                           
|Beginning balance     | R$(41)                         
|Current period change | 6                              
|                      |                                
|Ending balance        | R$(35)                         
|                      |                                

Note 27 - Fair Value of Financial Instruments

SFAS 107, Disclosures about Fair Value of Financial  Instruments,
 requires disclosure of fair value information  about  financial  instruments,  whether
or not required to be  recognized  in the  consolidated balance  sheet,  for which it is
 practicable  to  estimate  such fair  value.  SFAS 107 defines a financial instrument as
cash,  evidence of ownership  interest in an entity or a contractual  obligation or right
that will be settled with another financial instrument.

In cases where  quoted  market  prices are not  available,  fair
values are based on  estimates  using discounted cash flow or other  valuation
 techniques.  Those  techniques are  significantly  affected by the assumptions  used,
 including  the discount rate and  estimates of future cash flows.  Fair value  estimates
derived through those techniques  cannot be substantiated by comparison to independent
 markets and, in many cases,  could  not be  realized  in  immediate  settlement  of the
 instrument.  SFAS 107  excludes  certain financial  instruments  and all  non-financial
 instruments,  including  intangibles,  from  its  disclosure requirements.  Accordingly,
 the  aggregate  fair value amounts  presented do not  represent the  underlying value of
the Bank.

The  following  table  summarizes  the  carrying  amount and fair
value  estimates  for our  financial instruments:

|                                                | As of December 31,
|----------------------------------------------- | ------------------
|
|                                                | Carryingamount    
|Assets                                         
|Cash, due from banks and short-term investments | R$5,190           
|Central Bank compulsory deposits                | 1,561             
|Trading assets, including derivatives           | 11,803            
|Securities available for sale                   | 3,132             
|Securities held to maturity                     | 661               
|Gross loans, excluding leases                   | 23,190            
|Liabilities                                    
|Deposits                                        | 18,555            
|Federal funds purchased and securities         
|sold under repurchase agreements                | 7,587             
|Short-term borrowings                           | 6,240             
|Long-term debt                                  | 7,847             
|Derivatives liabilities (a)                     | 143               

|(a) | Recorded as other liabilities. See Note 17.
|--- | -------------------------------------------

We have reviewed the outstanding  portion of commitments to extend
credit as well as standby and other letters of credit,  and have  determined  that the
 difference  between the amounts  committed  and the fair value of such financial
instruments is not material.

Fair value estimates, methods and assumptions are set forth below
for our financial instruments.

Financial assets

Cash, due from banks and short-term investments and Central Bank
compulsory deposits

The carrying amounts reported in the consolidated  balance sheet for
cash, due from banks and short-term investments and Central Bank  compulsory  deposits
 approximate  their fair values.  Short-term  investments include:  interest-bearing
 deposits in other  banks,  federal  funds sold and  securities  purchased  under resale
 agreements,  all of which generally have original  maturities of less than 90 days,
except for R$339 in 2001 and R$352 in 2002 of interest-bearing deposits in other banks with original maturities
higher than three months.

Trading assets, including derivatives

Fair values for  trading  assets,  which also are the amounts
 recognized  in the  consolidated  balance sheet,  are based on quoted market prices when
 available or quoted market prices of comparable  instruments (see Note 6). The fair
value of  derivatives  are based on the  average  rate in effect on the market on the
last business day of the year for operations  with similar  maturities and indices,  as
informed by BM&F and trade associations, including the derivatives recorded as Other
liabilities.

Securities available for sale

Fair  values  for  securities  available  for  sale,  which  also
 are  the  amounts  recognized  in the consolidated  balance sheet, are based on quoted
market prices, when available.  If quoted market prices are not  available,  fair values
are based on quoted  market  prices of  comparable  securities.  See Note 7 for further
details regarding the amortized cost and fair values of securities available for sale.

Securities held to maturity

Held to maturity  securities  are carried at amortized  cost.  Fair
values are based on quoted  market prices of comparable  securities.  See Note 8 for
further  details  regarding  the  amortized  cost and fair values of held to maturity
securities.

Loans

Fair  values  for  loans  are   estimated  by  groups  of  loans
 with  similar   financial  and  risk characteristics.  Loans are segregated by type,
 including  commercial and industrial,  real estate,  credit card and other consumer
loans, agricultural,  import and export financing and international.  Each loan type is
further  segmented into fixed and variable rate interest terms and by corresponding
 credit categories in order to estimate their fair value.

The fair values for performing  loans are calculated by discounting
 scheduled  principal and interest cash flows  through  maturity  using  market  discount
 rates and yield  curves that  reflect the credit and interest rate risk inherent in the
loan type at each reporting date. The fair values for impaired loans are based on discounting estimated cash flows using a rate commensurate
with the risk associated with the estimated cash flows, the loan's quoted rate, if available, or the value
of any underlying collateral. Assumptions regarding cash flows and discount rates are determined using
available market information and specific borrower information.

Financial liabilities

Deposits

The carrying  amounts  reported in the  consolidated  balance sheet
for deposits from banks (interbank deposits) approximate their fair values.

The fair values  disclosed for demand deposits  (non-interest
 bearing  checking  accounts and savings accounts)  are, by SFAS 107  definition,  equal
to the amount  payable on demand at the reporting date (i.e. their carrying amounts).

Fair values for time  deposits are estimated  using a discounted
 cash flow  calculation  that applies interest rates offered by us on  certificates  at
each  reporting date to an estimate of aggregate  expected maturities for those deposits.

Short-term borrowings

The carrying  amounts of federal funds  purchased and  securities
 sold under  repurchase  agreements, import and export financing and other short-term
borrowings approximate their fair values.

The fair value for  variable-rate  and fixed-rate  commercial  paper
are estimated  using a discounted cash flow calculation based on market interest rates
for similar instruments.

Long-term debt

The fair value for  variable-rate  and  fixed-rate  Euronotes and
 subordinated  debt was based on the average  quoted  prices in effect on the
 correspondent  markets on the last  business day of the year,  for similar  instruments.

The fair value for mortgage  indebtedness  are estimated using a discounted cash flow
calculation based on market interest rates for similar instruments.

The fair value of Notes issued under  securitization  arrangements
was computed  considering the value that could be obtained in corresponding market.

The carrying  amounts of other long-term debt  instruments
 approximate  their fair values since these bear floating rates comparable to those being
currently presents in the market.

Derivatives

The fair value of derivatives  is included with trading  assets and
other  liabilities as described in Note 2 (d) and (e) and as  presented  in Notes 6 and
17. See Note 28 for the  notional  value and  estimated fair value of our derivative
financial instruments.

Off-balance sheet financial instruments

The fair value of  commitments to extend credit is estimated  based
on the fees  currently  charged to enter into similar  agreements,  taking into account
the remaining  terms of the  agreements and the present credit quality of the
 counterparties.  The fair value of standby and commercial  letters of credit is based on
fees  currently  charged for similar  agreements or on the estimated  cost to terminate
the agreements or otherwise settle the obligations with the counterparties.

Note 28  Derivatives and Off-Balance Sheet Financial Instruments

Risk Management

We  continuously  strive to improve our risk management  practices,
 which we have integrated into the various levels of our  organization.  A separate
 department that is headed by our chief  financial  officer is  responsible   for
  identifying,   measuring  and  managing   market,   credit  and   operational   risk
institution-wide.  In  addition,  some  business  divisions,  due to their  specific
 risk  exposures,  have dedicated risk management  staff.  The risk committee,  composed
of senior  management,  evaluates the risks involved in our activities and proposes risk
management policies accordingly.

Credit Risk

Our credit  policy is designed to manage risk while  maintaining
 the  flexibility  required by market conditions and the needs of our customers.  We
limit our credit risk exposure by avoiding  concentration  on clients and  particular
 sectors that we believe have high risk  factors.  We have various  approval  levels for
both retail and  wholesale  credit  applications.  Depending  on the size and type of
 exposure  and the customers  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.  Our centralized
 credit  decision-making  process is based on strict credit limits that are set by the
wholesale and retail credit  committees.  We pre-approve  credit limits to our customers
for different types of credit lines based on their creditworthiness and size.

Corporate Credit. We base each credit decision on the following
factors:  financial history, cash flows, quality of management, relationship history,
market conditions and other factors relating to credit risk. We employ an internal credit
rating system, which ranks companies based on quantitative criteria, such as recent
financial data, and qualitative aspects, such as management and succession issues. We
review credit lines for corporate clients every 60 to 360 days, depending on the borrowers
rating and the external credit environment.

Retail Credit. Credit management in the retail banking business,
which is characterized by the processing of a large volume of credit requests, requires
specialized systems and processes.  We use a wide range of statistical tools to evaluate
retail credit requests.  These tools, which include credit and behavior scoring, are
backed by dedicated systems that were developed by us as well as by outside consultants.
Our automated credit system is a special software program that services loans at all
stages from their inception.

Market Risk

We believe we have a conservative policy regarding market risk
exposures.  The market risk exposure of our  portfolio  is  independently  supervised
 and  controlled.  Market risk  management  is based on limits established by the
financial and risk committees.

We limit our market risk exposure by managing our currency,
 maturity,  and interest rate  mismatches. Securities,  derivatives,  loans and fundings
 are analysed on a  consolidated  basis.  Derivatives  play an important role in managing
asset and liability mismatches.

Exposure  limits for our treasury  unit are  established
 considering  market  volatilities,  scenario forecasts,  opportunity  for profit and the
funding needs of the commercial  bank.  Trading and  positioning activities are conducted
 within clear limits  suggested 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.

We employ the value at risk, or VAR,  methodology for evaluating
our risks.  Procedures such as back testing are used to ensure the models  precision
 and  consistency.  The analysis  captures  all  financial assets and liabilities,
 including  derivative  instruments.  We also make use of stress testing evaluation,
based on hypothetical macroeconomic scenarios, in order to prevent strong adverse impacts
on the results.

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 monitores from the  offices in São
Paulo.  Trading  limits and  strategies  are defined by head office and all trading
positions are consolidated in centralized databases.

Derivatives

We use a variety of derivatives, such as forwards, futures, swaps and options,
as part of our overall asset and liability risk management. As required by SFAS 133, all these transactions are recorded at fair value as either
assets or liabilities and are designated as hedging or non-hedging transactions.

The following table presents the contract/notional at fair value and credit risk
amounts at December 31, 2001 and 2002 of derivative positions held for trading and hedging purposes.

|                                | As of December 31,                
|------------------------------- | ----------------------------------
|                                | 2001                              
|                                | Contract/Notionalat fair value (1)
|Interest rates:                 |                                   
|Swap contracts                  | R$3,495                           
|Swap contracts with daily reset | -                                 
|Future contracts                | (3,481)                           
|Forward contracts               | (31)                              
|Foreign currency:              
|Swap contracts                  | (3,195)                           
|Swap contracts with daily reset | -                                 
|Future contracts                | (948)                             
|Exchange coupon:               
|Future contracts                | (534)                             
|Equity securities:             
|Option contracts                | R$1                               
|                                |                                   
|Total derivative assets         |                                   

____________________
(1) Includes both long and short
positions, net.

Non-hedging transactions

Interest  rate and currency  swaps are  contracts  in which a series
of interest  rate cash flows of a single  currency  or  interest or  principal  payments
 in two  different  currencies  are  exchanged  for a contractual  period.  The notional
amount  represents the basis on which the cash flows are determined.  The original
 maturity  on these  contracts  at  December  31,  2002  ranges  from 2 days to 6 years.
 The risks associated with swaps relate to the potential  inability or unwillingness of
the  counterparties  to perform according  to the  contractual  terms and the risk
 associated  with  changes in market  conditions,  due to movements in interest rates and
the exchange rate of currencies.  The total credit exposure  associated with interest
rate and currency  swaps totaled  receivables in the amounts of R$412 and R$408 that are
classified as Trading assets at December 31, 2001 and 2002, respectively.
 Additionally,  we have liabilities related to other  interest rate and currency  swaps
in the amounts of R$112 and R$467 that are  classified as Other liabilities  at
December 31, 2001 and 2002,  respectively.  At December 31, 2002 the provision for
probable losses related to credit risk in the swaps was R$1.

Interest rate and currency  futures and interest rate forward
 contracts are contracts for the delayed delivery of an instrument at a specified price
or yield.  The notional  amounts  represent the face value of the underlying  instrument
for which daily cash  settlements of the price  movements are made for the future
contracts.  The forward  contracts  which have monthly cash  settlements  and the amount
of  liabilities  we provided for is R$31 at December 31, 2001.  Maturities of these
 contracts at December 31, 2002 range from 2 days to 3 years.  The credit risk
 associated  with future and forwards  contracts is minimized due to daily or monthly
cash settlements.

Options are contracts  which (i) transfer,  modify,  or reduce
interest rate risk, or (ii) allow us to purchase or sell an equity  security in exchange
for the payment of a premium at inception of the  contract. As a  purchaser  of options,
 we pay a premium  and as the writer of options,  receive a premium in exchange for
 bearing  the risk of  unfavorable  movements  in  future  interest  rates  and  market
 prices  for the underlying  equity  security.  We have one  contract  with  original
 maturity of 5 years.  We had no credit exposure associated with purchased equity
securities option in 2001 and 2002.

Hedging transactions

At December 31, 2001 we did not have  derivatives  designated  as
hedges.  At December  31,  2002,  we designated  several swap  contracts  indexed to US
dollar with  notional  amounts of R$106,  as hedge of the changes in fair value of part
of our time deposits in US dollar due to both,  foreign  exchange and interest rate
 risks.  The hedged  time  deposits  were also  adjusted  to market  value  with  changes
in fair value reported in current earnings.

At  December  31, 2002 we also  designated  future  contracts
 indexed to the  Brazilian  benchmark interest rate with  notional at fair value of
R$1,021 as hedge of the  variability  in expected  future cash flows  associated  with
the interest  expenses on part of our time deposits  indexed to Brazilian  interbank
interest  rate.  During  the next  twelve  months we expect to  reclassify  to  earnings
 R$22 of pretax net losses,  or R$15  after  tax,  on cash flow hedge  derivatives
 currently  reported  in  accumulated  other comprehensive  losses in the pretax
 amount of R$30. If at any time,  we determine  that these  derivatives are not  expected
to be or have  ceased to be highly  effective  as a hedge,  the  derivative  expires or
is sold, or we discontinue the  derivatives  hedge  designation we will discontinue the
hedge  accounting.  In those  circumstances,  amounts included in Accumulated  other
 comprehensive  losses will be recognized in earnings.  Otherwise,  the amounts included
in Accumulated other  comprehensive  losses will be recognized in  earnings  as changes
in the  expected  cash flows from the hedged  interest  expenses  on time  deposits occur.

For the year ended December 31, 2002, we recognized no gain or loss
regarding the  ineffectiveness  of our cash flow or fair value hedges.

The carrying value, represented by fair value, of all the
derivatives described above and are included in trading account assets and in other
liability - derivative liability as summarized in Notes 6 and 17.

Financial guarantees

As part of our lending  operations,  we enter into various
off-balance sheet credit instruments with our customers which are summarized as follows:

|                                                      | Contractual amounts
|----------------------------------------------------- | -------------------
|                                                      | As of December 31, 
|                                                      | 2001               
|Co-obligation for credit assignment                   | R$216              
|Guarantees                                            | 4,002              
|Standby letters of credit and other letters of credit | 79                 

The carrying value of financial guarantees are recorded in "Other
liabilities" and amount R$10, including the provision for probable losses in the amount
of R$3.

Standby letters of credit and guarantees are our conditional
 commitments to guarantee the performance of a customer  to a third party in  borrowing
 arrangements.  Other  letters of credit are issued to support transactions on behalf of
customers.

In the  ordinary  course  of our  business,  we enter  into
 contracts  that  contain  indemnification provisions.  These provisions  require us to
make payments to another party in the event that certain events occur.  Many of these
 provisions call for us to indemnify the other party against loss in the event that we
fail to perform  our  obligations  under the  contract.  These  performance  guarantees
 are not  subject to disclosure.  Other types of indemnification  agreements that
function as financial guarantees are considered to have  remote risk of loss  experience
 is  negligible  and  maximum  exposure to loss is not  possible to estimate due to the
pervasive, yet low risk, nature of these agreements.

At December  31, 2001 and 2002 we have  contractual  amounts of
R$14,806 and  R$11,207,  respectively, of unfounded  commitments  to
extend credit for a specified  time period to lend to a customer  who has
 complied  with  predetermined  contractual  conditions.  These  contracts  have maturity
less than one year and can be renewed.

The maximum  potential credit risk of these contracts is equal to
the contractual  amounts shown above if the  counterparty  does not perform under the respective
contract.  Generally,  these contracts expire without being drawn upon;  therefore,  the
contractual  amounts are not indicative of the actual credit exposure or future cash flow
 requirements  for such  commitments.  To mitigate credit risk, we may require the
counterparty to pledge  collateral  in the form of cash,  securities  or other  assets to
support  the  extension  of credit similar to the collateral required for our lending
operations.

Note 29 - Commitments and Contingent Liabilities

Assets under management

We manage a number of investment funds which are available to
institutional  investors and the general public.  These assets in the amount of R$20,397
 and  R$18,384 at December 31, 2001 and 2002,  respectively, are not included in our
consolidated  balance sheet.  Fees are generally  charged monthly,  at average rates of
1.3% per year (for 2002, 2001 and 2000) of the market value of the assets under
management. We do not guarantee minimum returns on such funds.

Litigation

We and our subsidiaries are defendants in several legal actions,
mainly relating to income taxes, indirect taxes and labor claims. Based on the advice of
our external legal counsel, we believe that an unfavorable outcome in any or all of these
actions will not have a material effect on our financial condition or results of
operations.

The changes in the provision for probable losses in 2000, 2001 and 2002 were as follows:

|                                          | As of December 31,
|----------------------------------------- | ------------------
|                                          | 2000              
|Balance, beginning of year                | R$821             
|Provisions of acquired companies          | 411               
|Provision charged                         | 209               
|Payments                                  | (158)             
|Reversal of provisions no longer required | (17)              
|                                          |                   
|Balance, end of year (Note 17)            | R$1,266           
|                                          |                   

Other commitments

We lease many  properties  under  standard  real estate  leases that
can be canceled at our option and include renewal options and escalation  clauses.
 Rescission of real estate leases did not involve  material penalties  in 2000 and 2001
and were R$28 in 2002.  Expenses  of real  estate  leases  were R$89,  R$114 and R$118,
 in 2000,  2001 and  2002,  respectively.  The  following  table set  forth  the real
 estate  leases commitments:

|2003       | R$114
|---------- | -----
|2004       | 97   
|2005       | 75   
|2006       | 55   
|2007       | 38   
|Thereafter | 105  
|           |      
|Total      | R$484
|           |      

Our monthly amount of rental  payments with no stated  maturity in
renew process and under  litigation is R$2.

Note 30 - Regulatory Matters

We are subject to regulation by the Central Bank,  which
 promulgates  various  regulations  regarding currency and credit  policies for
 financial  institutions  operating in Brazil.  Additionally,  the Central Bank
determines minimum capital  requirements,  lending limits,  accounting practices and
compulsory deposit requirements (see Note 5). Failure to meet these requirements is subject to penalties imposed by Central Bank.

The Central Bank requires banks to comply with  regulations,  which
currently are similar to the Basle Accord as regards capital adequacy, except for the 11%
capital minimum requirement.

In accordance  with Central Bank rules,  banks are required to
calculate  compliance  with the minimum requirement on either a partial  consolidated
 basis  (considering  only the  institutions  regulated by the Central  Bank,  including
 investments  and branches  abroad or full  consolidated  basis  (considering  all
institutions owned by the banks,  including  insurance,  savings and annuities products,
 private retirement and credit card  companies).  The minimum  capital ratio  requirement
in Brazil is 11%. The following  table sets forth the capital ratios:

|                                     | As of December 31,
|------------------------------------ | ------------------
|
|                                     | 2001              
|In accordance with Brazilian Central
|Bank requirements                   
|Tier I Capital                       | 13.71%            
|Tier II Capital                      | 0.01              
|                                     |                   
|Total Capital                        | 13.72%            
|                                     |                   

|(a) | Partial consolidation excludes non-financial subsidiaries.                
|--- | --------------------------------------------------------------------------
|(b) | Full consolidation includes both financial and non-financial subsidiaries.

Currently,  the Central Bank does not limit the amount of  dividends
 which may be paid subject to the capital  requirements  set forth above.  As of each
reporting  date, we were in compliance  with all capital requirements imposed by the
Central Bank.

Additionally,  the Central Bank limits the amount of  investments
 in  consolidated  subsidiaries  not engaged in  banking,  leasing  or  securities
 activities  and in  unconsolidated  companies,  premises  and equipment and intangible
 assets to 70% of  stockholders  equity on a consolidated  basis. The Central Bank also
 limits  unconsolidated   investments,   premises  and  equipment  and  intangible
 assets  to  70%  of stockholders  equity on a full  consolidated  basis. On June 30,
2002 and December 31, 2002 this limit was reduced to 60% and 50%,  respectively.  At
December 31, 2001 and 2002 our total  investment in such assets was less than the Central
Bank limit.

Note 31 - Segment Information

We operate  principally  in the retail  banking,  wholesale
 banking,  insurance and asset  management industries. See further details in Note 1.

The following  table presents a summary of our  operations for the
year ended December 31, 2000,  2001 and 2002, by segment,  in accordance with SFAS 131 Disclosures
 about Segments of an Enterprise and Related Information.

In order to improve the  presentation,  prior periods amounts
 relating to our private banking and our savings and annuities  products were
 reclassified from wholesale banking and insurance to wealth management and retail
banking,  respectively,  for comparative  purposes to conform to the current period
presentation, due to change in our business segment.

|                                 | For the year ended December 31, 2000
|-------------------------------- | ------------------------------------
|                                 | Retailbanking                       
|                                 |                                     
|Net interest income              | R$1,724                             
|Provision for loan losses        | (505)                               
|Insurance and private           
|retirement plan premiums         | -                                   
|Equity in earnings of           
|unconsolidated companies         | 143                                 
|Fee and commission income        | 841                                 
|Other non-interest income        | 779                                 
|Salaries and benefits and       
|administrative expense           | (2,155)                             
|Insurance and private           
|retirement plan expenses         | -                                   
|Other non-interest expense       | (552)                               
|                                 |                                     
|Income before taxes and minority
|interest.                        | 275                                 
|Income taxes                     | 12                                  
|Minority interest                | 5                                   
|                                 |                                     
|Net income                       | R$292                               
|                                 |                                     

|                           | For the year ended December 31, 2001
|-------------------------- | ------------------------------------
|                           | Retailbanking                       
|                           |                                     
|Net interest income        | R$3,251                             
|Provision for loan losses  | (1,034)                             
|Insurance and private     
|retirement plan premiums   | -                                   
|Equity in earnings of     
|unconsolidated companies   | 209                                 
|Fee and commission income  | 1,258                               
|Other non-interest income  | 562 (a)                             
|Salaries and benefits and 
|administrative expense     | (3,221)                             
|Insurance and private     
|retirement plan expenses   | (1)                                 
|Other non-interest expense | (711)                               
|                           |                                     
|Income before taxes       
|and minority interest      | 313                                 
|Income taxes               | (2)                                 
|Minority interest          | (9)                                 
|                           |                                     
|Net income                 | R$302                               
|                           |                                     
|Identifiable assets        | R$22,859                            
|                           |                                     

|(a) | Includes R$282 of exchange gains on net foreign assets
abroad, allocated between the retail and wholesale banking segments base on the net interest
(after provision for loan losses) of each segment.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                           | For the year ended December 31, 2002
|-------------------------- | ------------------------------------
|                           | Retailbanking                       
|                           |                                     
|Net interest income        | R$3,214                             
|Provision for loan losses  | (1,030)                             
|Insurance and private     
|retirement plan premiums   | -                                   
|Equity in earnings of     
|unconsolidated companies   | 194                                 
|Fee and commission income  | 1,330                               
|Other non-interest income  | 878                                 
|Salaries and benefits and 
|administrative expense     | (3,315)                             
|Insurance and private     
|retirement plan expenses   | -                                   
|Other non-interest expense | (891)                               
|                           |                                     
|Income before taxes       
|and minority interest      | 380                                 
|Income taxes               | 78                                  
|Minority interest          | (2)                                 
|                           |                                     
|Net income                 | R$456                               
|                           |                                     
|Identifiable assets        | R$23,889                            
|                           |                                     

Our operations are primarily carried out in Brazil;  however, we
have operations in the United States, the United  Kingdom,  the Bahamas,  Grand Cayman,
 Luxembourg and Paraguay,  none of which are  individually material to Unibanco and its
subsidiaries as a whole.

Note 32 - Parent Company Financial Information

Condensed financial information of Holdings, the Parent Company, is
presented below:

|                                           | As of December 31,
|------------------------------------------ | ------------------
|Balance sheet:                             | 2001              
|Interest-bearing deposits with banks       | R$9               
|Investment in Unibanco                     | 3,584             
|Dividends receivable                       | 100               
|Other assets                               | 1                 
|                                           |                   
|Total assets                               | R$3,694           
|                                           |                   
|Short-term borrowings                      | R$1               
|Dividends payable                          | 100               
|Other liabilities                          | 7                 
|Stockholders' equity                       | 3,586             
|                                           |                   
|Total liabilities and stockholders' equity | R$3,694           
|                                           |                   

|                                                | For the year ended December 31,
|----------------------------------------------- | -------------------------------
|Statement of income:                            | 2000                           
|Interest on deposits in banks                   | R$-                            
|Dividends from Unibanco                         | 167                            
|Equity in undistributed earnings of Unibanco    | 204                            
|Amortization of negative goodwill               | 1                              
|Non-interest expense                            | 5                              
|                                                |                                
|Net income                                      | R$367                          
|                                                |                                
|Statement of cash flows:                       
|Operating activities:                          
|Net income                                      | R$367                          
|Less - Equity in earnings of Unibanco           | 371                            
|Amortization of negative goodwill               | 1                              
|Change in assets and liabilities               
|Other assets                                    | (8)                            
|Other liabilities                               | 12                             
|                                                |                                
|Net cash provided by operating activities       | (1)                            
|                                                |                                
|Investing activities:                          
|Cash dividends received                         | 163                            
|Cash dividends paid                             | (155)                          
|Purchase of additional investment in Unibanco   | (658)                          
|                                                |                                
|Net cash used in investing activities           | (650)                          
|                                                |                                
|Financing activities:                          
|Proceeds from the issuance of stock             | 658                            
|                                                |                                
|Net increase (decrease) in short-term borrowing | -                              
|                                                |                                
|Net cash provided by financing activities       | 658                            
|Net increase in cash and cash equivalents       | 7                              
|Cash and cash equivalents at beginning of year  | -                              
|                                                |                                
|Cash and cash equivalents at end of year        | 7                              
|                                                |                                

Note 33 - Subsequent Events

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

Up to May 12, 2003,  228,000,000  Unibanco preferred shares,  167,225,000 Units and 372,900 GDS issued
by both Unibanco and Holdings were  repurchased.  Through a Share Exchange  Agreement,  Unibanco assigned
and transferred to Holdings  353,675,000  Class B preferred shares issued by Holdings acquired in the form
of Unit or GDS and Holdings  assigned and  transferred to Unibanco  353,675,000  preferred  shares issued by
Unibanco.  Therefore,  Unibanco  recorded  935,350,000  preferred  shares at an average  price of R$46.16 as
treasury  stocks.  The minimum  and maximum  acquisition  prices  were R$ 33.76 and  R$54.15,  respectively.
Holdings  recorded  353,675,000  preferred  shares  Class B, at an average  price of R$47.85 per  thousand
shares as treasury stocks.

(b) On April 28, 2003 the Holdings  General  meeting,  permitted the
conversion of Class A preferred shares into Class B preferred shares,  the latter
regarded as equities enjoying greater  liquidity,  since they are  included in the Units.
 The ratio of  conversion  of Class A  preferred  shares into Class Bpreferred
shares will be one-to-one, at the stockholders discretion.

(c) In June,  2003 we  announced  that we have  retained
Credit Suisse First Boston as our adviser in the
structuring of a public  conversion offer,  exclusively for the Brazilian market.  The conversion offer will
enable the holders of  preferred  shares  issued by Unibanco to convert them into Units under the same terms
of the 1997  conversion  offer that  followed  the global ADR offer which opened the trading of Units in the
NYSE in the form of ADRs.  Therefore,  if the conversion  offer is successful,  there will be an increase in
liquidity  for the Units in the  domestic  market and the holders of  preferred  shares will  migrate to our
most liquid  security.  The holders of preferred  shares who decide to adhere to the  conversion  offer will
receive  dividends  which  are up to 4.7%  less  than what they  would  have  received  if they had  decided
otherwise.  Such  estimate  is based on the  payments  of  dividends  made in the last 5 fiscal  years.  The
consummation  of the  transaction  is  subject  to the  approval  by and  consequent  registration  with the
Brazilian  Securities  Commission - CVM of the structure to be proposed by the companies  involved,  as well
as its approval by the boards of directors.



Credicard S.A.
Administradora de Cartões
de Crédito

(A free translation of the original report in Portuguese containing
financial statements prepared in accordance with
accounting practices adopted in Brazil.)



Independent
auditors report

The Administrative
Council and Shareholders
Credicard S.A. Administradora de Cartões de
Crédito
São Paulo  SP

We have examined the balance sheets
of Credicard S.A. Administradora de Cartões de Crédito as of December 31,
2002 and 2001 and the related statements of earnings, changes in shareholders equity
and changes in financial position for the years then ended, which are the responsibility
of its management. Our responsibility is to express an opinion on these financial
statements.

Our examinations were conducted in
accordance with auditing standards applied in Brazil and included: (a) planning of the
audit work, considering the materiality of the balances, the volume of transactions and
the accounting systems and internal accounting controls of the Company; (b) verification,
on a test basis, of the evidence and records which support the amounts and accounting
information which is disclosed; and (c) evaluation of the most significant accounting
policies and estimates adopted by Company management, as well as the presentation of the
financial statements taken as a whole.

In our opinion, the aforementioned
financial statements present fairly, in all material respects, the financial position of
Credicard S.A. Administradora de Cartões de Crédito as of December 31, 2002
and 2001, and the results of its operations, changes in its shareholders equity and
changes in its financial position for the years then ended, in accordance with accounting
practices adopted in Brazil.

January 31, 2003

/s:/ KPMG Auditores
Independentes
CRC 2SP014428/O-6

|Original signed in Portuguese |                             
|----------------------------- | ----------------------------
|Jose Marcelo Bessan           | Giuseppe Masi               
|Accountant CRC 1SP129705/O-0  | Accountant CRC 1SP176273/O-7



Credicard S.A. Administradora de Cartões de Crédito

Balance sheets

December 31, 2002 and 2001

(In thousands of Reais)

|Assets                                        | 2002      | 2001     
|--------------------------------------------- | --------- | ---------
|                                             
|Current                                       | 2,544,895 | 2,978,523
|                                              |           |          
|Cash and cash equivalents                     | 2,063     | 8,035    
|Short-term investments                        | -         | 344,249  
|Accounts receivable from cardholders          | 2,422,272 | 2,503,814
|Income tax withheld                           | 7,764     | 15,936   
|Other accounts receivable                     | 116,448   | 108,148  
|Doubtful receivables                          | 300,763   | 439,134  
|Allowance for doubtful receivables            | (318,911) | (450,403)
|Prepaid expenses                              | 14,496    | 9,610    
|                                             
|Long-Term                                     | 285,033   | 307,684  
|                                              |           |          
|Deferred income and social contribution taxes | 285,033   | 307,541  
|Other                                         | -         | 143      
|                                             
|Permanent                                     | 155,941   | 116,271  
|                                              |           |          
|Fixed assets                                  | 78,536    | 68,990   
|Investments in subsidiaries                   | 25,833    | 1,654    
|Other investments                             | 7,662     | 7,658    
|Deferred charges                              | 43,910    | 37,969   
|                                              |           |          
|                                              | 2,985,869 | 3,402,478
|                                              |           |          
|Liabilities                                   | 2002      | 2001     
|                                             
|Current                                       | 2,317,006 | 2,795,366
|                                              |           |          
|Accounts payable - Acquirers                  | 1,789,911 | 2,212,941
|Labor obligations                             | 23,869    | 22,046   
|Taxes payable                                 | 30,736    | 52,464   
|Prepaid membership fees                       | 217,253   | 226,832  
|Borrowings                                    | 31,679    | 32,233   
|Other accounts payable                        | 223,558   | 248,850  
|                                             
|Long-term                                     | 350,740   | 309,820  
|                                              |           |          
|Provision for tax risks and                  
|other contingent liabilities                  | 350,740   | 309,820  
|                                             
|Shareholders' equity                          | 318,123   | 297,292  
|Capital stock                                 | 191,000   | 191,000  
|Capital reserve                               | 41,738    | 23,749   
|Revenue reserve                               | 38,200    | 21,200   
|Retained earnings                             | 47,185    | 61,343   
|                                              |           |          
|                                              | 2,985,869 | 3,402,478
|                                              |           |          

See the accompanying notes to the financial statements.



Credicard S.A. Administradora de Cartões de Crédito

Statements of earnings

Years ended December 31, 2002 and 2001

(In thousands of Reais, except net income per share)

|                                                    | 2002      | 2001     
|--------------------------------------------------- | --------- | ---------
|Gross operating revenue                            
|Operating income                                    | 2,355,627 | 2,374,726
|Service tax                                         | (48,044)  | (49,148) 
|COFINS tax                                          | (75,220)  | (73,674) 
|Net financial income deducted of financial expenses
|of R$ 123,160 in 2002 and R$ 69,967 in 2001         | 51,120    | 50,931   
|                                                    |           |          
|                                                    | 2,283,483 | 2,302,835
|                                                    |           |          
|Operating (revenue) expenses                       
|Administrative and general                          | 1,401,463 | 1,267,169
|Depreciation and amortization                       | 47,734    | 43,825   
|Allowance for doubtful receivables                  | 309,084   | 394,511  
|Equity in the income (losses) of subsidiaries       | (13,878)  | (1,203)  
|                                                    |           |          
|                                                    | 1,744,403 | 1,704,302
|                                                    |           |          
|Operating income                                    | 539,080   | 598,533  
|                                                   
|Non operating results                               | 31,733    | (3,090)  
|                                                    |           |          
|Income before income and                           
|social contribution taxes                           | 570,813   | 595,443  
|                                                    |           |          
|Social contribution tax                             | (43,318)  | (56,382) 
|                                                   
|Income tax                                          | (133,766) | (132,671)
|                                                    |           |          
|Net income for the year                             | 393,729   | 406,390  
|                                                    |           |          
|Net income per share - R$                           | 10.14     | 10.47    
|                                                    |           |          

See the accompanying notes to the financial statements.



Credicard S.A. Administradora de Cartões de Crédito

Statements of changes in shareholders' equity

Years ended December 31, 2002 and 2001

(In  thousands of Reais)

|                                  | Capital reserve | Revenue reserve 
|--------------------------------- | --------------- | ----------------
|                                  |                 |                 
|                                  | Capitalstock    | Fiscalincentives
|                                 
|Balances at January 1st           | 191,000         | 23,749          
|                                 
|Fiscal incentives                 | -               | 17,989          
|                                 
|Distribution of interim dividends | -               | -               
|                                 
|Net income for the year           | -               | -               
|                                 
|Prior-year adjustments           
|(Note 10g)                        | -               | -               
|                                 
|Distributions:                   
|Legal reserve                     | -               | -               
|Distribution of dividends         | -               | -               
|                                  |                 |                 
|Balances at December 31st         | 191,000         | 41,738          
|                                  |                 |                 

See the accompanying notes to the financial statements.



Credicard S.A. Administradora de Cartões de Crédito

Statements of changes in financial position

Years ended December 31, 2002 and 2001

(In thousands of Reais)

|                                                  | 2002      | 2001   
|------------------------------------------------- | --------- | -------
|Sources of funds                                 
|From operations                                  
|Net income for the year                           | 393,729   | 406,390
|Revenue (expenses) not affecting working capital:
|Equity in the income (loss) of subsidiaries       | (13,878)  | (1,203)
|Depreciation and amortization                     | 47,734    | 43,825 
|Provision for losses with tax incentives          | 17,989    | 17,304 
|Prior-year adjustment                             | 18,226    | -      
|Increase in long-term liabilities                 | 40,920    | 589    
|Results on sale of fixed assets                   | (30,590)  | 464    
|                                                  |           |        
|                                                  | 474,130   | 467,369
|Dividends received from subsidiaries              | -         | 1,165  
|                                                 
|From third parties                               
|Disposal of fixed assets                          | 23,851    | 210    
|Decrease in long-term assets                      | 22,651    | -      
|                                                  |           |        
|                                                  | 46,502    | 210    
|                                                  |           |        
|                                                  | 520,632   | 468,744
|                                                  |           |        
|Application of funds                             
|Investments in                                   
|Fixed assets                                      | 48,133    | 22,208 
|Deferred charges                                  | 8,349     | 28,140 
|Investments                                       | 10,305    | 28     
|                                                  |           |        
|                                                  | 66,787    | 50,376 
|Dividends distributed                             | 409,113   | 360,100
|                                                  |           |        
|Increase in long-term assets                      | -         | 46,923 
|                                                  | 475,900   | 457,399
|                                                  |           |        
|Increase in net working capital                   | 44,732    | 11,345 
|                                                  |           |        
|Changes in net working capital                   
|Current assets                                    | (433,628) | 126,936
|Current liabilities                               | (478,360) | 115,591
|                                                  |           |        
|Net working capital                               | 44,732    | 11,345 
|                                                  |           |        

See the accompanying notes to the financial statements.



Credicard S.A.
Administradora de Cartões de Crédito

Notes to the financial statements
Years ended December 31, 2002 and 2001
(In thousands of Reais)

1   Operations

The Company issues and administers
both its own and third parties credit cards, obtains financing from financial
institutions in the name of and on the part of cardholders and concedes guarantees to
cardholders.

Credicard S.A. has started a process
to segregate the processing and issuance and card management businesses, resulting the
units of Issuance and Management of Cards (Credicard) and Services and Processing of
Commercial Information (Orbitall).

2   Description of
significant accounting policies

The financial statements were
prepared in accordance with the accounting practices derived from the Brazilian
Corporation Law.

a. Recognition of revenues

Income and expenses are allocated to
the statement of earnings on the accrual basis.

Annual cardholder fees are recorded
under the caption Prepaid membership fees in the current liabilities upon
billing and are allocated to the statement of earnings over the service period.

Remuneration for guarantees provided
is allocated daily to the statement of earnings on a pro rata basis, over the
terms of the operations.

The income tax of the year was
calculated at the rate of 15%, plus surtaxes provided for in current law. The social
contribution tax was calculated at the rate of 9%. The provision for these taxes
considering the applicable portion of tax incentives is shown under Taxes
payable, deducted by the amounts prepaid during the period.

Tax credits arising from temporary
differences related to additions to book income, basically Allowance for Doubtful
Receivables and Provision for Tax, Civil and Labor Contingencies, will be deductible in
future years are recognized in the amount considered recoverable and stated under
Long-term assets. Management expects that such tax credits will be fully
utilized with profits to be generated in the next 3 years.

b. Accounts receivable
from cardholders

Accounts receivable from cardholders
represent purchases made by cardholders, and mature in an average of 30 days. Contractual
charges are added to bills not paid on time, until the date they are transferred to
Doubtful receivable, which occurs on average in 71 days after the maturity
date. Purchases made abroad are restated according to the foreign exchange U.S. dollar
floating rate prevailing on the balance sheet date.

c. Doubtful receivables

Doubtful receivables represent
balances of defaulting cardholders. There are collection lawsuits in process for recovery
of these receivables.

d. Allowance for doubtful
receivables

The allowance is established in an
amount considered sufficient to absorb future losses on collection of account receivable
from cardholders. The criteria used consider the application of the historic real
percentage of losses of the portfolio in each band of delay and on the balance to fall
due.

e. Permanent

Fixed assets and deferred charges are
recorded at purchase cost, adjusted for monetary correction up to December 31, 1995, less
accumulated depreciation and amortization, calculated by using the straight-line method at
rates which take into account the estimated useful lives of the assets.

Investments in subsidiaries are
valued by using the equity method. Other investments are stated at cost, adjusted for
monetary correction up to December 31, 1995.

f. Accounts payable 
Acquirers

Accounts payable 
Acquirers account refers to amounts payable to Redecard S.A. (Company owned by the
same shareholders of Credicard, responsible for the relationship with establishments) and
other acquirers for transactions carried out by cardholders with the network of
establishments.

g. Borrowings

Borrowings are stated at principal,
plus contractual charges up to the financial statement closing date. These charges are
shown as financial expenses.

3   Other accounts
receivables

Other accounts receivables are
composed primarily of accounts receivable transferred to Caixa Econômica Federal of
R$ 44,461 (Note 10f); services rendered of R$ 39,078 (R$ 39,558 in 2001); judicial
deposits of R$ 11,083 (R$ 10,722 in 2001); accounts receivable from licensed third parties
in the amount of R$ 394 (R$ 24,721 in 2001) and marketing funds of R$ 75 (R$ 10,999 in
2001).

4   Fixed assets

|                         | Annualdepreciationrate% | 2002      | 2001     
|------------------------ | ----------------------- | --------- | ---------
|                         |                         |           |          
|Furniture and fixtures   | 10                      | 16,315    | 15,203   
|Facilities               | 10                      | 9,090     | 8,624    
|Equipment                | 10, 20 and 40           | 223,462   | 199,083  
|Vehicles                 | 20                      | 1,093     | 1,163    
|Trademarks and patents   | -                       | 157       | 140      
|Leasehold improvements   | (*)                     | 23,977    | 23,512   
|                         |                         |           |          
|Total                    |                         | 274,094   | 247,725  
|                         |                         |           |          
|Accumulated depreciation |                         | (195,558) | (178,735)
|                         |                         |           |          
|                         |                         | 78,536    | 68,990   
|                         |                         |           |          

(*) In accordance with the terms of the respective rental contracts.

5   Investments in
subsidiaries

The investments in subsidiaries are
as follows:

|                          | Orbitall Serviços e
Processamento de Informações Comerciais Ltda. | CredicardComercial eImportadora Ltda. | Total   
|------------------------- | ----------------------------------------------------------------- | ------------------------------------- | --------
|                          |                                                                   |                                       |         
|                          | 2002                                                              | 2001                                  | 2002    
|Position of subsidiaries:
|Capital                   | 11,600                                                            | 1,100                                 | 98      
|Net income for the period | 13,884                                                            | 1,773                                 | (6)     
|Shareholders' equity      | 25,495                                                            | 1,310                                 | 338     
|Number of quotas          | 1,099,635                                                         | 1,099,635                             | 98,000  
|                         
|Investment position:     
|Percentage of ownership   | 100%                                                              | 100%                                  | 99.9969%
|Equity pick-up            | 13,884                                                            | 1,173                                 | (6)     
|Book value of investments | 25,495                                                            | 1,310                                 | 338     

(i) On April 2002, Credicard increased Orbitalls capital through the
          transference of fixed assets of R$ 8,193 and investment in cash of R$ 2,107.

6   Borrowings

|           | Balances at12/31/02 | AverageInterestrates         | Maturity | Guarantees | Balances at12/31/01
|---------- | ------------------- | ---------------------------- | -------- | ---------- | -------------------
|           |                     |                              |          |            |                    
|Foreign   
|borrowings | 31,679              | 15% p.a. +exchange variation | 2/24/03  | -          | 32,233             

7   Other accounts payable

|                                 | 2002    | 2001   
|-------------------------------- | ------- | -------
|                                 |         |        
|Accounts payable                 | 12,607  | 24,527 
|Employees' participation program | 42,126  | 35,356 
|Insurance premium payable        | 12,506  | 9,773  
|Other sales expenses             | 19,421  | 22,502 
|Technological operations         | 37,863  | 49,072 
|Commissions to associated banks  | 12,917  | 13,403 
|Sales incentive plan             | 47,677  | 36,340 
|Interest payable - Card holders  | 11,257  | 37,578 
|Other                            | 27,184  | 20,299 
|                                 |         |        
|                                 | 223,558 | 248,850
|                                 |         |        

8   Capital stock

Share capital is represented by
38,813,332 common nominative shares with no par value.

The minimum compulsory dividend corresponds
to 1% of net income for the year, after deduction of the legal reserve. Dividends are
entered on the books when distributed and are proposed by the administrative bodies or
decided on by the shareholders.

9   Transactions with
related parties

Transactions with related parties are
dealt in length and market conditions. Income with services rendered to third parties
include the effective income incurred during the year and an estimate for December 2002:

|                  | Accountsreceivable | Accounts payable | Service fee revenues | Loan contracts/Foreign borrowings
|----------------- | ------------------ | ---------------- | -------------------- | ---------------------------------
|                  |                    |                  |                      |                                  
|                  | 2002               | 2001             | 2002                 | 2001                             
|Credicard        
|Comercial e      
|Importadora Ltda. | -                  | -                | -                    | -                                
|                 
|Redecard S.A.     | 4,900              | 6,180            | 1,396,234            | 1,809,628                        
|                 
|FNC Comércio e   
|Participações    
|Ltda.             | -                  | -                | -                    | -                                
|                 
|Itaucard         
|Financeira S.A.   | 14,589             | 28,638           | -                    | -                                
|                 
|Orbitall Serv. e 
|Process. de      
|Informações      
|Comerciais Ltda.  | 2,599              | 170              | -                    | -                                
|                 
|Citibank NA       | -                  | -                | -                    | -                                
|Citibank S.A.     | 1,415              | 909              | -                    | -                                

10   Other information

a.
          The expense with the provision for doubtful credits can be summarized as
          follows:

|                                     | 2002      | 2001     
|------------------------------------ | --------- | ---------
|                                     |           |          
|Written-off credits                  | 438,640   | 380,093  
|Constitution/(reversal) of provision | (131,492) | 121,162  
|Credit right cession (Note 10f)      | 91,484    | -        
|Other expenses with credit           | 26,753    | 29,339   
|Credit recovery                      | (116,301) | (136,083)
|                                     |           |          
|                                     | 309,084   | 394,511  
|                                     |           |          

b.
          Guarantees pledged to cardholders to associated financial institutions
          associated to the system amounted to R$ 737,871 (R$ 1,056,141 in 2001).

c.
          Tax, labor and civil litigation are provisioned based on external lawyers
          opinion, in the amount considered sufficient to cover expected losses. These
          provisions are classified as long-term liabilities.

d.
          The non operating results is composed, mainly, of income in the disposal of
          permanent assets  R$ 282 (R$ 776 in 2001), profit in the disposal of
          trademarks and patents of R$ 23,569, reversal of provision for losses with
          assets  R$ 7,329 (expense of R$ 3,566 in 2001) and other income  R$
          553 (R$ 813 in 2001).

e.
          In 2002, Instituto Credicard developed Jovens Escolhas em Rede com o
          Futuro, an educational program focused on the formation of young people,
          performed jointly with 13 NGOs (Non Governmental Organization) from the states
          of Bahia, São Paulo and Rio de Janeiro. Besides, the Institute supported
          the following projects: a) Guias Mirins de Olinda in Olinda, state of Pernambuco
          and b) Banco na Escola, voluntary program in São Paulo. The total amount
          invested by Credicard for the year was R$ 1,290 (R$ 1,290 in 2001).

f.
          During the last quarter of 2002, Credicard transferred  the transactions
          corresponding to the cards base sold by   Caixa Econômica Federal
          (Caixa). The assets  and liabilities assumed  by Caixa, due  to this transfer,
          amounted  to R$363,117, as well as R$ 183,465 in guarantees provided to the
          cardholders to the financial institutions associated to the system.

g.
          Prior-year adjustments: In 2002, Credicard obtained favorable decision in an
          order of return of the Withholding Tax on Net Income  ILL, paid from 1989
          to 1992. This tax was considered unconstitutional by the Federal Supreme Court,
          in 1995, and the Federal Senate suspended its liability through Resolution
          82/96.

The tax credit corresponding to the
original amount monetarily corrected, in the amount of R$ 18,226, was accounted for directly
to credit of the Retained earnings account, since, during the year that the
respective events occurred, the ILL was discounted in the Retained earnings
account, without passing through income accounts.

h.
          As of December 31, 2002, the Company did not have any position traded on the
          derivative markets.

EXHIBITS

UNIBANCO 
UNIÃO DE BANCOS BRASILEIROS S.A.

CORPORATE BY-LAWS

CHAPTER I

Name, Head Office,
Purpose and Term

Article 1:  UNIBANCO-UNIAO  DE BANCOS  BRASILEIROS  S.A.,  with head  offices and legal venue in the City of
                      Sao Paulo, State of Sao Paulo,  hereinafter referred to as UNIBANCO, shall be governed
                      by these corporate by-laws and by the applicable legal provisions.

Article 2: UNIBANCO is
incorporated for the purpose of engaging in any lawful activity or service, including
currency exchange transactions, in which commercial banks may engage. UNIBANCO may also
participate in other companies, pursuant to the applicable legal and statutory provisions.

Sole Paragraph: UNIBANCO
shall not:

a)
          acquire real property not intended for its own use, except in the cases
          permitted by law or regulations.

b)
          issue debentures or founder shares (partes  beneficiárias).

Article 3: UNIBANCO shall
exist for an indefinite period of time.

CHAPTER II

Capital Stock and
Shares

Article 4: The capital stock
of UNIBANCO is R$ 3,690,601,814.44 (three billion, six hundred and ninety million, six
hundred and one thousand, eight hundred and fourteen reais and forty-four cents) divided
into 140,885,833,318 (one hundred and forty billion, eight hundred and eighty-five
million, eight hundred and thirty-three thousand, three hundred and eighteen) registered
shares, with no par value, of which 75,568,744,349 (seventy-five billion, five hundred and
sixty-eight million, seven hundred and forty-four thousand, three hundred and forty-nine)
are common shares and 65,317,088,969 (sixty-five billion, three hundred and seventeen,
eighty-eight thousand, nine hundred and sixty-nine ) are preferred shares.

First Paragraph: UNIBANCO may
issue, without amendment to these by-laws, up to 95,195,526,716 (ninety-five billion, one
hundred and ninety-five million, five hundred and twenty-six thousand, seven hundred and
sixteen) additional common or preferred shares, subject to the following rules:

a)
          the Board of Directors shall have the power to determine the issuance of shares
          and/or subscription warrants and on conditions thereof;

b)
          the issuance of common or preferred shares may be conducted without maintaining
          proportion between those two types of shares; and

c)
          the issuance of preferred shares shall be subject to the limits established by
          law.

Second Paragraph:  The
issuance of shares or subscription warrants to be sold in the Stock Exchanges or for
public subscription, , as well as for the acquisition of control through the swap of
shares in a public offer, if previously authorized by the competent authorities, may be
carried out with a reduction of the term for the exercise of preemptive rights, or with
the exclusion of such rights, at the discretion of the Board of Directors, which may,
furthermore, grant to the shareholders priority in the subscription of shares of one or
both types.

Third Paragraph: UNIBANCO may,
upon authorization by the Board of Directors, purchase its own shares to be cancelled or
maintained in treasury for subsequent sale, in accordance with the applicable legal and
statutory provisions.

Fourth Paragraph: Without any
impairment of rights and restrictions set forth in this Article, all the shares of
UNIBANCO shall be in book-entry form and shall remain in deposit accounts in the name of
their holders, without the issuance of share certificates, in accordance with Articles 34
and 35 of Law No. 6,404, of December 15, 1976, and the shareholders may be required to pay
the fees mentioned in Article 35, Third Paragraph, of the aforementioned law.

Fifth Paragraph: Within the
limits of the authorized capital and in accordance with a plan approved by the General
Shareholders Meeting, UNIBANCO may grant stock options to its managers and employees, as
well as to the managers and employees of the companies controlled by it..

Article 5: The preferred
shares are not entitled to voting rights, are not convertible into common shares, and are
not subject to Article 111, First Paragraph, of Law No. 6,404 of December 15, 1976 and
shall be entitled to the following advantages:

a)
          participation in the net profits of each fiscal year, in an amount that shall
          ensure to each preferred share an yearly dividend 10% (ten percent) higher than
          the one distributed to each common share;

b)
          priority in the reimbursement of capital, in case the company is liquidated, up
          to the amount represented by such shares in the capital stock;

c)
          participation, under the same conditions as the common shares, in capital
          increases resulting from the capitalization of monetary restatement, reserves
          and profits,.

Article 6: UNIBANCO may, upon
notice to the Stock Exchanges where its shares are traded and upon publication of
announcements, suspend the transfer of shares for periods not longer than 15 (fifteen)
days each, and not to exceed 90 days in the aggregate during a year.

Article 7: UNIBANCO may,
pursuant to these by-laws and in accordance with the applicable regulations, issue Share
Deposit Certificates, hereinafter referred to as UNITS, which represent preferred shares
with no voting rights, deposited at UNIBANCO, and issued by:

a)
          UNIBANCO;

b)
          UNIBANCO HOLDINGS S.A., a publicly held company, with head offices in the City
          of São Paulo, capital of the State of São Paulo, registered under
          Corporate Taxpayers Enrollment (CNPJ) aunder No. 00.022.034/0001-87,
          hereinafter referred to as HOLDINGS.

First Paragraph: For the
purposes of this article, each deposited preferred share issued by UNIBANCO shall
correspond to a concomitant deposit of one class B preferred share issued by
HOLDINGS.

Second Paragraph: Only shares
which are free of any burdens, liens or any type of encumbrance that may preclude the free
delivery thereof to the holders of the UNITS may be deposited for conversion into UNITS.

Article 8: The shareholders of
UNIBANCO may, pursuant to Articles 9, 10 and 11 of these by-laws, convert their shares
into UNITS, according to the terms and conditions established by its Board of Directors,
set forth in a notice to the shareholders which shall inform the shareholders about the
conversion procedures.

Article 9: From the issue date
of the Units, the shares represented by such UNITS:

a)
          shall be registered in a deposit account linked to the UNITS, and their
          ownership may only be transferred upon the transfer of the corresponding UNITS,
          by written authorization from the holder thereof;

b)
          shall have the related income, as well as any amount received in the case of
          redemption or amortization delivered to the holder of the UNITS;

c)
          shall not have their income and their respective redemption or amortization
          values pledged, encumbered or given as collateral under any other guise by
          holders of UNITS, nor shall be object of a pledge, attachment, confiscation,
          search or seizure or any other encumbrance that may preclude their delivery to
          the holders of the UNITS.

Article 10: UNITS shall be in
book-entry form and shall be kept by UNIBANCO in an account maintained in the name of
their holder; and:

a)
          the transfer of UNITS shall be performed by a record in UNIBANCOs
          registry, to the debit of the transferors UNITS account and to the credit
          of the transferees UNITS account, upon receipt of a written order from the
          transferor, or upon a court authorization or order, in an appropriate document
          that shall remain with UNIBANCO;

b)
          the pledging, usufruct, trust, chattel mortgage and any other provisions,
          burdens, liens or charges that may encumber UNITS shall be recorded in
          UNIBANCOs books and shall be stated in the UNITS account statements;

c)
          whenever so requested, UNIBANCO shall supply the holders of the UNITS with a
          statement of their UNITS account at the end of each month in which such
          account has any activity and, even if no activity occurs, a statement shall be
          provided at least once a year;

d)
          the statement shall include the place and the date of issuance, UNIBANCOs
          name, an indication that it is a statement of a UNITS (Registered Share
          Deposit Certificate)account, the specification of the shares deposited, a
          statement that the shares deposited, their income and the amount received in the
          case of redemption or amortization shall only be delivered to the holder of the
          UNITS account or upon an order in writing from said holder, the name and
          identification of the holder of the UNITS account, the price charged by
          UNIBANCO for the deposit, if applicable, and the places where the holders of the
          UNITS can obtain assistance;

e)
          upon a written order by the holder of the UNIT ́s account to the Stock
          Exchange broker by which the UNITS are negotiated, UNIBANCO shall block the
          UNITS specified in the order, being thus authorized to transfer them to the
          purchaser as soon as the Stock Exchange informs it that the UNITS have been
          sold;

f)
          notwithstanding the provisions of items g and h below,
          the holders of UNITS shall be entitled, at any time, to request their
          cancellation to UNIBANCO and the delivery of the registered shares that they
          represent, by means of the transfer of said shares to the share deposit accounts
          maintained by UNIBANCO in the holders name;

g)
          the Board of Directors of UNIBANCO may, at any time, suspend the cancellation of
          the UNITS for a specified period of time, subject to the following
          circumstances:

I  an announcement by HOLDINGS
or by UNIBANCO stating that they intend to grant UNIBANCO shareholders the option of
converting their shares into UNITS, inwhich case the suspension period shall not exceed 90
(ninety) days;

II  the beginning of a public
offering for the primary or secondary distribution of the UNITS, either in the
international or in the domestic market, in which case the suspension period shall not
exceed 30 (thirty) days.

h)
          UNITS with burdens, liens, or encumbrances upon them, as per item b
          of this article, may not be the object of a cancellation request;

i)
          once the UNITS are cancelled, the holder of the shares they represent may
          dispose of those shares and the restrictions mentioned in items a
          and c of Article 9 shall not apply.

Article 11: In the exercise of
the rights conferred by the shares represented by UNITS, the following rules shall be
complied with:

a)
          the dividends and the redemption or amortization proceeds from shares issued by
          UNIBANCO shall be paid by UNIBANCO to the holder of the UNITS;

b)
          the dividends and the redemption or amortization proceeds from shares issued by
          HOLDINGS delivered to UNIBANCO as depositary of the shares, shall be paid by
          UNIBANCO to the holder of the UNITS;

c)
          only the holder of the UNITS shall exercise the right to participate in the
          Shareholders Meetings of UNIBANCO and HOLDINGS and therein exercise all
          rights attributed to the shareholders of such companies by the property of the
          shares represented by the UNITS;

d)
          If the shares of UNIBANCO or HOLDINGS are split, cancelled or combined or if new
          shares of UNIBANCO or HOLDINGS are issued while the UNITS are in existence, the
          following rules shall apply:

I  In the event that there is a
change in the number of shares represented by UNITS, as a result of share splits or
through the capitalization of profits or reserves carried out by UNIBANCO and by HOLDINGS,
UNIBANCO shall register the deposit of the new shares issued and shall issue new UNITS
registering them in the account of the respective holders, in such a way as to reflect the
new number of shares held by the holders of the UNITS, always maintaining the proportion
of one (01) UNIBANCO preferred share to one (01) HOLDINGS class B preferred
share, represented by UNITS. In the event that there is a share split carried out
exclusively by either UNIBANCO or HOLDINGS, or if the share split is carried out by both
companies using different ratios, then UNIBANCO shall register, in the name of the holder
of the split shares, the deposit of as many shares as can make up UNITS, with due regard
to the ratio mentioned in First and Second Paragraphs of Article 7, and shall deliver the
remaining shares issued to the holder of the UNITS represented by the split shares.

II  In the event that there is
an alteration in the number of shares represented by UNITS, as a result of share
combination or cancellation, carried out by UNIBANCO and by UNIBANCO HOLDINGS, then
UNIBANCO shall debit the UNITS deposit accounts of the holders of the cancelled shares,
automatically canceling the UNITS, in a number sufficient to reflect the new number of
shares held by the holders of the UNITS, always keeping the proportion of 1 (one) UNIBANCO
preferred share to 1 (one) HOLDINGS class B preferred share represented by a
UNIT. In the event of a combination or cancellation of shares carried out exclusively by
either UNIBANCO or HOLDINGS, or if the combination or cancellation is carried out by both
companies using different ratios, then UNIBANCO shall cancel the UNITS representing the
cancelled shares, delivering the UNIBANCO or the HOLDINGS shares that have not been
cancelled to the respective holders, as the case may be.

III  in the capital increases
resulting from share subscription, in which preemptive rights have been granted, the
following procedures shall apply:

1st)
          if UNIBANCO and HOLDINGS simultaneously carry out a capital increase by issuing
          shares that may be converted into new UNITS, holders of UNITS may exercise the
          preemptive rights to which the shares represented by the UNITS are entitled, in
          which case:

I  if the shareholder
subscribes the shares of both companies, then new UNITS shall be issued to him,
corresponding to the shares subscribed, in accordance with the proportion mentioned in
First Paragraph of Article 7, unless such shareholder provides instructions to the
contrary, as provided for in item II below;

II  if the shareholder chooses
to subscribe shares of both companies without the creation of UNITS, or only shares from
one of the companies, he may do so by informing such intention to the issuers in the share
subscription form;

2nd)
          if only one of the companies increases its capital, UNIT holders may exercise
          the preemptive right conferred by one of the shares represented by the UNITS
          directly, and in such case no new UNITS will be issued .

CHAPTER III

General Shareholders
Meeting

Article 12 The general
shareholders ́ meeting shall be held ordinarily within the four (4) months
immediately following the end of the fiscal year, for the purposes established in law, and
extraordinarily, whenever corporate interests so require.

First Paragraph  A
shareholder may be represented at a Shareholders Meetings by an attorney-in-fact which
fulfills the conditions prescribed by law. The filing of the respective power of attorney
with UNIBANCO may be required.

Second Paragraph: The status
of shareholder must be proven, if so requested, by presentation of a proper identity
document.

Article 13:  The Shareholders
Meetings, called at least fifteen (15) days in advance, according to the law, shall be
installed and chaired by the Chairman of the Board of Directors, who may appoint in his
stead any member of the Board of Director or of the Board of Officers, which shall choose,
among the shareholders present, one or more secretaries.

First  Paragraph:  Each  common  share is  entitled  to one  vote in the  Shareholders
                                  Meetings.

Second Paragraph: In order to
be binding upon UNIBANCO, shareholders agreements regarding the purchase and sale of
shares, the preference on the acquisition of shares, and the exercise of voting rights or
the control of UNIBANCO must be previously approved by the Central Bank of Brazil and
filed at UNIBANCOs head office, in accordance with the applicable rules established
by the Board of Directors. UNIBANCO may request the shareholders clarifications in order
to properly fulfill its obligations.

CHAPTER IV

Management

Article 14: UNIBANCO shall be
managed by the following bodies:

a)
          the Board of Directors;

b)
          the Board of Officers.

SECTION I

The Board of Directors

Article 15: The Board of
Directors shall have a minimum of four (4) and a maximum of seven (7) Directors, all of
them shareholders of UNIBANCO, elected by the Shareholders Meeting for a one (1) year
term.

First Paragraph: The Board of
Directors shall have one Chairman and a maximum of two (2) Vice-Chairmen, chosen by the
Board of Directors, as described in Second Paragraph of Article 18.

Second Paragraph: The age
limit for a member of the Board of Directors shall be sixty-five (65) years of age. Such
limit may, however, be extended by the Board of Directors.

Article 16: It is incumbent
upon the Board of Directors on an exclusive basis to:

a)
          determine the general directions for the conduct of business and to establish
          the basic policies and guidelines for UNIBANCO;

b)
          call Shareholders Meetings;

c)
          submit to the Shareholders Meetings proposals for:

I  capital increase or
reduction;

II  mergers, amalgamations or
spin-offs;

III  amendments to the
by-laws;

d)
          decide upon the following matters:

I - partnerships or joint
ventures involving UNIBANCO, including participation in shareholders agreements;

II -acquisition, disposal, increase
or reduction of its participation in controlled or affiliated companies;

III - acquisition of
controlling interests in other companies, in accordance with applicable legal provisions;

IV- investment of resources resulting
from tax incentives;

V  results and investment
budgets and the respective action plans submitted pursuant to sub-item II of the Sole
Paragraph of Article 22;

e)
          upon proposal by the Board of Executive Officers:

I  examine and deliberate on
the semiannual balance sheets and decide upon the distribution and investment of profits,
in accordance with Article 36;

II decide upon the annual
report to shareholders, the Board of Officers accounts and the Financial Statements
of each fiscal year to be submitted to the Shareholders Meeting;

f)
          establish the compensation of each of the members of the Board of Directors and
          the Board of Officers, whithin the global amount approved by the
          Shareholders Meeting;

g)
          establish the bonus of each of the members of the Board of Directors and of the
          Board of Officers, subject to the provisions of item c of the First
          Paragraph of Article 36;

h)
          appoint a replacement for the Executive President  Retail Banking Group
          and the Executive President  Wholesale Banking Group, in the cases
          mentioned in item a, sub-item I of Article 26, and of any of the
          members of the Board of Officers, in the cases mentioned in item b
          of said article, as well as of the members of the Board of Directors, in the
          case mentioned in item b, sub-item III of Article 19;

i)
          authorize, whenever it deems necessary, the representation of UNIBANCO by a sole
          member of the Board of Officers or by an attorney-in-fact, provided that such
          resolution specifies the powers granted.

j)
          elect and remove the members of the Board of Officers as well as to determine
          their duties and responsibilities in accordance with their respective areas of
          work;

l)
          supervise the management by the Board of Executive Officers, examine, at any
          time, UNIBANCOs books and documents, request information on agreements
          executed or about to be executed, as well as about any other acts;

m)
          supervise and provide guidance to the performance of the Board of Executive
          Officers;

n)
          appoint and remove the independent auditors;

o)
          decide upon the purchase of shares issued by UNIBANCO, subject to the Third
          Paragraph of Article 4th;

p)
          decide upon the creation of committees to deal with specific matters within the
          authority of the Board of Directors and/or of the Board of Officers;

q)
          decide upon the acts provided for in the First and Second Paragraphs of Article
          4th;

r)
          bring under its authority specific matters of interest to UNIBANCO and decide
          upon the cases not provided for herein;

s)
          establish the term and other conditions for the conversion of UNIBANCOs
          shares into UNITS, as per Article 8 of these by-laws;

t)
          establish rules for the filing of shareholders agreements, in accordance with
          the Second Paragraph of Article 13 of these by-laws.

Sole Paragraph:  The Board of
Directors may assign special functions, on a permanent or transitory basis, to any of its
members or to the members of the Board of Officers, under the denomination it deems
appropriate, provided that such functions do not conflict with the exclusive duties
established herein.

Article 17: It is incumbent
upon the Chairman of the Board of Directors to:

a)
          chair the meetings of the Board of Directors, with authority to appoint any of
          the members of said Board to do so in his stead;

b)
          appoint, under the circumstances provided for in item a, sub-item
          II, and item b, sub-item II of Article 19, the replacements for the
          Vice-Chairmen of the Board of Directors;

c)
          chair the Shareholders Meetings, with authority to appoint any of the members of
          the Board of Directors or of the Board of Executive Officers to do so in his
          stead.

Sole Paragraph: It is
incumbent upon the Vice-Chairmen of the Board of Directors to replace the Chairman in his
absences, vacations, leaves, occasional impediments or in the event of a vacancy.

Article 18: The Board of
Directors shall meet ordinarily on a quarterly basis and, extraordinarily, whenever
corporate interests so require.

First Paragraph: The meetings
of the Board of Directors may be called by the Chairman or by the Vice-Chairmen,
individually, or by any two members of the Board of Directors jointly.

Second Paragraph The decisions
of the Board of Directors shall be taken by a majority of votes in the presence of at
least half of its elected members. The Chairman shall be entitled, in addition to his own
vote, to the casting vote in case of a tie.

Third Paragraph The minutes of
the meetings shall be recorded in the appropriate Book of Minutes of Meetings of the Board
of Directors.

Article 19 Except in the cases
to which the law establishes special procedures, the replacement of the members of the
Board of Directors shall be as follows:

a)
          in case of temporary replacement:

I  the Chairman of the Board of
Directors shall be replaced by the Vice-Chairman appointed by him;

II  the Vice-Chairmen shall be
replaced by any other Director appointed by the Chairman of the Board of Directors;

III all other Directors by a
replacement appointed by the Board of Directors;

b)
          in case of replacement due to a vacancy:

I  the Chairman of the Board of
Directors shall be replaced by the Vice-Chairman appointed by the Board of Directors;

II  the Vice-Chairmen shall be
replaced by a Director appointed by the Chairman of the Board of Directors;

III  all other Directors by a
replacement appointed by the Board of Directors;

c)
          if a majority or all positions on the Board of Directors are vacant, a
          Shareholders Meeting shall be called to hold a new election.

Sole Paragraph  The
replacement appointed in accordance with item b, sub-item III of this article
shall remain in office until the next Shareholders Meeting, which shall elect a new member
to fill the vacant position for the remainder of the term of office of the replaced
member.

SECTION II

The Board of Officers

Article 20: The Board of
Officers shall comprise a maximum of one hundred and twenty two (122) members, resident in
the Country, shareholders or not, elected by the Board of Directors, with a term of office
of one (1) year, eligible for reelection, being:

a)
          one (1) Executive President  Wholesale Banking Group;

b)
          one (1) Executive President  Retail Banking Group;

c)
          one (1) Corporate Executive Officer;

d)
          up to three (16) Vice Presidents;

e)
          up to fifty (16) Executive Officers;

f)
          up to fifty (50) Officers; and

g)
          up to fifty (50) Adjunct Officers;

First Paragraph: 
The Executive President  Wholesale Banking Group, The Executive

President  Retail Banking
Group, the Corporate Executive Officer, the Vice Presidents and the Executive Officers
shall compose the Board ofExecutive Officers

Second Paragraph:  The
age limit for holding a position in the Board of Officers shall be sixty (60) years of
age. The Board of Directors may extend such limit, according to the nature of the relevant
area of work.

Article 21: It is incumbent
upon the Board of Executive Officers the management and administration of the
companys business. The Board of Executive Officers may carry out all transactions
and perform all acts related to UNIBANCOs objectives, and their responsibilities
are:

a)
          to order the preparation of semiannual balance sheets and propose their approval
          to the Board of Directors, together with the proposal for the distribution and
          application of profits, subject to Article 36;

b)
          to submit to the Board of Directors for approval the Annual Report to the
          Shareholders and the Financial Statements of each fiscal year, for further
          presentation to the Shareholders Meeting;

c)
          to authorize the opening, change of address and closing of branches or
          facilities, including those abroad;

d)
          to comply with and ensure compliance with the resolutions of the Shareholders
          Meeting, of the Board of Directors and with the by-laws;

e)
          the overseeing, supervision and guidance of the Officers and of the Adjunct
          Officers.

Article 22: It is incumbent
upon the Executive President  Wholesale Banking Group and the Executive President
 Retail Banking Group and the Corporate Executive Officer:

a)
          to the Executive President  Wholesale Banking Group, on an exclusive
          basis:

I  the operational and
administrative management of the activities of the wholesale, corporate and investment
bank, including, furthermore, the treasury, the offices abroad, and the domestic and
international distribution;

II  coordinating the activities
of the Executive Officers under his direct supervision, including inter-area decisions and
follow-up of their respective performance;

III  reaching decisions within his authority;

IV  the appointment of
replacements for the Executive Officers under his supervision in those cases set forth in
sub-item II of item a of Article 26;

b)
          to the Executive President  Retail Banking Group, on an exclusive basis:

I  the operational and
administrative management of the activities of the retail bank, comprising the branch
network and other facilities, the administrative support, including systems and other
activities pertaining to a commercial bank;

II  coordinating the activities
of the Executive Officers under his direct supervision, including inter-area decisions and
follow-up of their respective performance;

III  reaching decisions within his authority;

IV  the appointment of
replacements for the Executive Officers under his supervision in those cases set forth in
sub-item II of item a of Article 26;

c)
          to the Corporate Executive Officer, individually:

I  performing the activities of
planning, controlling and risk management;

II  coordinating the activities of
the Officers under his direct supervision, including inter-area decisions and follow-up of
their performance, as well as market and investor relations;

III     to  decide  upon  matters   within  his/her incumbency;

IV  the appointment of
replacements for the Officers under his supervision in those cases set forth in sub item
II of item a of Article 26.

Sole Paragraph: In accordance
with the policies, directives and parameters established by the Board of Directors, it is
jointly incumbent upon the Executive President  Wholesale Banking Group, the
Executive President  Retail Banking Group and the Corporate Executive Officer:

I       to    approve     and     change     UNIBANCO's
                                                             administrative structure and
internal rules;

II  to submit to the approval
of the Board of Directors the results and investment budgets and the respective business
plans as well as to implement the decisions taken;

III     to  establish  operational  and  administrative
                                                             limits of authority;

IV  to oversee the development
of the members of management, following up on their professional performance and
development.

Article 23: It is incumbent
upon the Vice-Presidents and upon the Executive Officers the operational and
administrative management of the areas assigned to them by the Board of Directors and by
the Presidency of the Board of Executive Officers, as applicable.

Article 24: It is incumbent
upon the Officers:

I  the management and
supervision of the areas which shall be assigned to them by the Board of Executive
Officers;

II  the supervision and
coordination of the performance of the Adjunct Officers which are under their direct
supervision.

Article 25: It is incumbent
upon the Adjunct Officers the management and supervision of the areas which shall be
assigned to them by the Executive Board of Officers or by the Officers.

Article 26:  The replacement of the members of the Board of Officers shall be carried out as follows:

a)
          in the cases of temporary replacement:

I  the replacements of the
Executive President  Wholesale Banking Group, Executive President  Retail
Banking Group and Corporate Executive Officer shall be appointed by the Board of
Directors, as set forth in item h of Article 16;

II  the duties of the
Vice-Presidents, of the Executive Officers, of the Officers and of the Adjunct Officers
shall be performed by a replacement appointed from among the elected Officers, as
specified in sub-item IV of items a, b and c of
Article 22.

b)
          in cases of replacement due to a vacancy concerning any of the Officers, the
          replacement shall be appointed by the Board of Directors, as specified in item
          h of Article 16.

Article 27: The meetings of
the Board of Officers shall be called and chaired by any of the Executive Presidents, who
may jointly appoint to chair it in their stead any member of the Board of Executive
Officers.

First Paragraph: The members of the Board of  Directors  may
attend the  meetings of the Board of Officers.

Second Paragraph: The
decisions of the Board of Officers shall be taken by majority vote of the Board of
Executive Officers in the presence of at least half of its members, except with respect to
the issues specified in item c of Article 21, which may be decided upon with
the presence of at least three (3) members. The Chairman of the meeting shall be entitled,
in addition to its own vote, to the casting vote in case of a tie.

Article 28:  UNIBANCO  shall be  represented  by the  members  of
the  Board of  Officers  as stated in this                       Article, except as
established in item "i" of Article 16.

First Paragraph: The
following shall require the joint signatures of two members of the Board of Officers, one
of them being necessarily an Executive Officer:

a)
          acts resulting in the encumbrance or disposal of real property or other assets,
          the placement of collateral or guarantees, the settlement or waiver of rights,
          the undertaking of obligations, the execution of agreements, as well as those
          acts which result in liability for UNIBANCO or release third parties from
          liabilities towards UNIBANCO;

b)
          the appointment of attorneys-in-fact, except as provided in item i
          of Article 16.

Second Paragraph: UNIBANCO may
be represented severally by any of the members of the Board of Officers, or by an
attorney-in-fact with specific powers, in acts related to:

a)
          receipt of summonses or rendering of personal depositions in court;

b)
          receipt of subpoenas and delivery of statements out of court.

Third Paragraph: The acts
mentioned in item a of the First Paragraph of this article may also be
performed by any member of the Board of Executive Officers jointly with an
attorney-in-fact, or jointly by two attorneys-in-fact, provided that the power of attorney
specifies the limits and extension of the powers granted as well as the term for the
appointment.

Fourth  Paragraph:  UNIBANCO may appoint  attorneys-in-fact  to
represent it severally                                   as follows:

a)
          by executing powers of attorney with an ad judicia clause, without
          term, including the powers to perform acts of resignation, waiver, settlement,
          receipt and acquittal;

b)
          in acts specifically determined in the applicable power of attorney, except for
          those mentioned in item a of the First Paragraph of this article;

c)
          cases in which the attorney-in-fact is a legal entity.

SECTION III

Provisions Applying to
Both the Board of Directors and the Board of Officers

Article 29: The
Shareholders Meeting and the Board of Directors may, respectively, abstain from electing
Directors and members of the Board of Officers, whenever the lower limits set forth in
Article 15 for the Board of Directors and in the applicable law for the Board of Officers
have been fulfilled.

Article 30: The holding
of a position in the Board of Directors and on the Board of Officers shall not require the
placement of bond.

Article 31: As soon as
their election is approved by the Central Bank of Brazil, the members of the Board of
Directors and the members of the Board of Officers shall be invested in theis positions by
having their respective terms of office recorded in the Book of Minutes of the Meetings of
the Board of Directors and of the Board of Officers, respectively, which terms of office
shall also be recorded in the cases of replacement specified in Articles 19 and 25.

Sole Paragraph  If the
term of office is not executed within thirty (30) days of the date of approval by the
Central Bank of Brazil, the appointment shall become void, except if a justification is
accepted by the administrative body for which the individual was elected.

Article 32: The members
of the Board of Directors and of the Board of Officers shall remain in their positions,
after the expiration of their term, until their successors are vested in office.

Article 33: The
Shareholders Meeting shall establish the compensation for the Board of Directors and for
the Board of Officers, in accordance with item f of Article 16.

CHAPTER V

The Audit Board

Article 34:- UNIBANCO
shall have an Audit Board that shall be comprised of at least three (3) and at most five
(5) permanent members and an equal number of alternates, with duties as set forth in law.

First Paragraph: The Audit
Board shall only operate in those fiscal years in which the shareholders, in accordance
with the provisions of law, request its institution..

Second Paragraph: The
Shareholders Meeting at which the institution of the Audit Board is requested shall elect
its members and determine theircompensation.

Third Paragraph: The term of
office of the members of the Audit Board shall end at the Annual Shareholders Meeting
following its institution.

CHAPTER VI

Fiscal Year, Financial
Statements, Reserves and Dividends

Article 35  The fiscal
year shall begin on the 1st day of January and shall end on December
31st of each year.

Article 36:  On the last
day of each calendar semester the following financial statements shall be prepared, in
accordance with the applicable legal provisions:

a)
          balance sheet;

b)
          statement of accumulated losses and profits;

c)
          income statement for the fiscal year;

d)
          statement of origin and investment of funds.

First Paragraph: The following
shall be deducted from the results of the fiscal year:

a)
          accumulatated losses, if any, in the form set forth at law;

b)
          the provision for income taxes and the Social Contribution on Net Profit;

c)
          up to 10% (ten percent) of the result remaining after the deductions referred to
          in items a and b of this paragraph, as profit sharing
          for the Board of Directors and the Board of Officers, in compliance with legal
          limitations, and in accordance with the Second Paragraph of this article.

Second Paragraph:  The
compensation provided in item c of the First Paragraph of this article shall
be determined and paid to the administrators by decision of the Board of Directors,
subject to ratification by the Shareholders Meeting and in accordance with the relevant
legal provisions.

Third Paragraph:
UNIBANCOs results, after the deductions referred to in the First Paragraph of this
article, comprise the net profit of the fiscal year that, by decision of the Board of
Directors, having heard the Audit Board, if in operation, shall be allocated as follows,
subject to ratification by the Shareholders Meeting:

a)
          5% (five percent) for the creation of a Legal Reserve, which shall not exceed
          20% (twenty percent) of the corporate capital;

b)
          establishment of the Reserves for Unrealized Profits in those fiscal years in
          which the amount of the mandatory dividends exceeds the realized portion of the
          fiscal years net profit, pursuant to the provisions of Articles 197 and
          202, III, of Law no. 6,404, of Dec. 15, 1976, as modified by Law no. 10,303, of
          Oct. 31, 2001;

c)
          establishment of Reserves for Contingencies, as permitted by law;

d)
          35% (thirty-five percent) in accordance with the Fourth and Sixth Paragraphs of
          this Article, as mandatory dividends, calculated based on the net profit of the
          fiscal year, reduced or increased by the following amounts:

I  the quota for the
establishment of the reserve provided for in item a of this paragraph;

II  unrealized profits,
transferred to the reserve provided for in item b of this paragraph;

III  the amount for the
establishment of the reserve for contingencies mentioned in item c of this
paragraph and the reversal of the reserves set up in previous fiscal years.

e)
          establishment of the following statutory reserves taken from the net profit
          remaining after the deductions provided for in items a through
          d of this paragraph:

I  2% (two percent for the
establishment of a Currency Exchange Risk Reserve, up to the limit of 20% (twenty percent
) of the corporate capital;

II  90% (ninety percent) for
the establishment of a reserve designed to ensure that UNIBANCO has adequate operating
margins, up to a maximum of 80% (eighty percent) of the corporate capital.

f)
          the balance shall be disposed of in accordance with the resolutions of the
          Shareholders Meeting, in accordance with the applicable legal provisions.

Fourth Paragraph: It shall be
attributed to each preferred share an amount at least 10% (ten percent) higher than the
amount attributed to each common share in the distribution of dividends mentioned in item
d of Third Paragraph of this article.

Fifth Paragraph: The payment
of dividends which are authorized by the Shareholders Meeting or by the Board of Directors
shall occur within sixty (60) days of the date on which they were declared and, in any
event, within the same fiscal year in which they are declared.

Sixth Paragraph:  The
company may declare, by decision of the Board of Directors, after the Audit Board, if in
operation, is heard, during the fiscal year and before the subsequent Annual Shareholders
Meeting, interim dividends, which may constitute a partial or full advance of the
mandatory dividends, to be taken from:

a)
          profits ascertained in a semiannual balance sheet, and

b)
          retained profits or Profit Reserves verified in the former annual or semiannual
          balance sheet.

Seventh Paragraph: For the
purpose of calculating the amount of the mandatory dividends to be distributed, any
interest distributed to the shareholders shall be considered, up to the limit of the LONG
TERM INTEREST RATE (TAXA DE JUROS DE LONGO PRAZO  TJLP), as provided in the Seventh
Paragraph of Article 9 of Law no. 9,249 of December 16, 1995, including those paid to the
account of profits or reserves mentioned in the Sixth Paragraph of this article.

CHAPTER VII

Liquidation

Article 37: UNIBANCO
shall enter into liquidation in the cases determined by law or by decision of the
Shareholders Meeting, which shall establish the form of liquidation and shall appoint the
liquidators and the Audit Board, if the institution thereof is requested, to operate
during the liquidation period.

CHAPTER VIII

General Provisions

Article 38: Any shareholder
who does not pay the amounts due for subscribed shares, in accordance with the conditions
set out in the subscription form or, if any of them remains negligent, when called upon to
do so by the Board of Executive Officers, shall be considered in arrears and shall be
subject to the payment of interest at the rate of 1% (one percent) per month in addition
to monetary restatement calculated in accordance with the prevailing official rates,
notwithstanding the utilization by UNIBANCO of all remedies available at law for the
satisfaction of its credit.

Article 39: The
reimbursement amount for the shares in the cases in which it is assured by law shall be
equal to the net worth of the shares, ascertained on the basis of the balance sheet
prepared in the manner prescribed in law.

CHAPTER IX

Transitory Provisions

Article 40: The company shall
keep in its accounting records, as a Special Dividends Reserve, the amount of
R$63.897.529,90 (sixty-three million, eight hundred and ninety-seven thousand, five
hundred and twenty-nine reaiss and ninety centavos), which, on Dec. 31,
1996, corresponded to 77,105,743.8181 UFIRs (Fiscal Reference Unit), to be transferred
from the Legal Reserve referred to in sub-item II of item e of the Third
Paragraph of Article 36, said amount being made up of the profits ascertained in the
fiscal years of 1989 to 1993 and based upon the tax regimen set forth in Article 35 of Law
No.7,713 of Dec. 22, 1988 and Article 75 of Law 8, 383, of Dec. 30, 1991.

Dividends

Sole Paragraph: The Special
Dividends Reserve mentioned in this article shall be reduced by an amount equal to the
dividends distributed by UNIBANCO from this Reserve or as a result of its
capitalization.

São Paulo, April
28, 2003

UNIBANCO HOLDINGS S.A.

CORPORATE BY-LAWS

CHAPTER I

Name, Head Office, Purpose and Term

Article 1:        UNIBANCO HOLDINGS S.A., hereinafter referred to as
HOLDINGS,  shall be governed by these corporate by-laws and by the applicable legal
provisions.

Article 2:   HOLDINGS is incorporated for the purpose of holding
share participation in other companies.

Article 3:        HOLDINGS has its head offices and legal venue in
the City of São Paulo, State of São Paulo.

Article 4:        HOLDINGS shall exist for an indefinite period of
time.

CHAPTER II

Capital Stock and Shares

Article 5:        The capital stock of HOLDINGS is R$
 1,863,449,958.72  (one  billion,  eight hundred and  sixty-three  million,  four hundred
and forty-nine  thousand,  nine hundred and fifty-eight reais and seventy-two cents)
divided into  84,330,476,296  (eighty-four billion,  three hundred and thirty million,
four hundred and seventy-six thousand,  two hundred and ninety-six) registered shares,
with no par value,  of which  37,138,435,873  (thirty-seven  billion,  one hundred and
 thirty-eight  million,  four hundred and thirty-five thousand,  eight hundred and
seventy-three) are common shares,  3,843,541,338  (three billion,  eight hundred and
forty-three  million, five hundred and forty-one  thousand,  three hundred and
thirty-eight) are class A preferred shares and  43,348,499,085  (forty-three billion,
three hundred and forty-eight million, four hundred and ninety-nine thousand and
eighty-five) are class B preferred shares.

First Paragraph: HOLDINGS may issue, without amendments to these
by-laws, up to 180,000,000,000 (one hundred and eighty billion) additional shares,
considering that up to 60,000,000,000 (sixty billion) shall be common shares, up to
3,843,541,338 (three billion, eight hundred and forty-three million, five hundred and
forty-one thousand, three hundred and thirty-eight) shall be class A preferred shares
and up to 116,156,458,662 (one hundred and sixteen billion, one hundred and fifty-six
million, four hundred and fifty-eight thousand, six hundred and sixty-two) shall be class
B preferred shares. The issuance of new shares may be conducted without maintaining the
existing proportion between the types and classes of shares.

Second Paragraph: It  shall be  incumbent  upon  the  Board  of
 Directors,  within  the  limits  of the authorized  capital,  to decide on the  issuance
 of new  shares  and to set forth the conditions said shares shall be subject to.

Third Paragraph: HOLDINGS may issue subscription  warrants (bônus
de subscrição) within the limits of the authorized  capital and upon decision of the
Board of Directors,  but it shall not issue founder shares (partes beneficiárias).

Fourth Paragraph: The issuance of shares or the  issuance of
 subscription  warrants for stock  exchange trading,  for public  subscription  or for
 exchange  for shares in a public offer for control  acquisition,  may be  carried  out
 with a  reduction  of  the  deadline  for exercising  preemptive rights, or with the
exclusion of such rights, at the discretion of the Board of Directors, which may,
furthermore,  grant the shareholders priority in the subscription of shares of one or
more kinds or classes.

Fifth Paragraph:           Within the limits of the authorized
 capital and in accordance with a plan approved by the General  Shareholders  Meeting,
 HOLDINGS may grant the option to purchase shares to its own officers or employees or to
individuals  rendering services to the company, as well as to people  who  perform  these
 activities  at  UNIBANCO  - UNIÃO DE BANCOS BRASILEIROS  S.A.,  a publicly  held Company
the head offices of which are in the city of  São   Paulo,   capital   of  the  state  of
 São   Paulo,   CNPJ  (Tax  Roll  No.) 33.700.394/0001-40, hereinafter referred to as
UNIBANCO;

Sixth Paragraph:           Preferred  shares  are not  entitled  to
voting  rights and shall be  entitled  to the following advantages:

I   class  A  preferred  shares  shall be  converted  at any time
 into  class  Bpreferred  shares,  in the  proportion of one (1) class B preferred
 shares for each class A preferred shares, at the discretion of the shareholder,  and
shall also have:

a.  priority  in the  reimbursement  of  capital,  without  premium,
 in case the company is  liquidated,  up to the amount  represented by such share class
in the capital stock;

b.  participation  in the net  profits of each  fiscal  year,  in an
amount  that shall ensure to each  preferred  share an yearly  dividend 10% (ten
 percent) higher than the one distributed to each common share;

c.       participation,  under the same conditions as the common
shares,  in capital  increases  resulting from the  capitalization  of monetary
restatement, reserves and profits;

d.       the right to be converted into class B preferred  shares
in the in the proportion of one (1) class B preferred  shares for each  class A  preferred
 shares,  exclusively,  at the  discretion  of the shareholder.

II  class B  preferred  shares:  the right to  participate  in
the  dividends to be distributed,  corresponding  to one hundred  percent  (100%) of the
net profit of the fiscal year realized in cash,  calculated as per Article 202 of Law no.
6,404 of Dec. 15, 1976,  with the wording  provided by Law no. 10,303 of Oct. 31, 2001,
and Article 35 of these by-laws, in accordance with the following criteria:

a.       (i) priority in the  distribution of the semi-annual
 minimum  dividend of R$0.15 (fifteen cents) for each lot of one thousand (1,000) shares;
or (ii) priority  semi-annual  dividends of 1.5% of the net worth of the  share,
 resulting  in a  priority  annual  dividend  of three percent (3%) of the shares net
worth, whichever is greater;

b.       should class B preferred shares be split or combined,
 the dividend mentioned in item a(i) shall be adjusted in accordance with the resulting
number of shares in that class;

c.       should  HOLDINGS be  liquidated,  priority in the
 reimbursement  of  capital,  up to the amount of that  portion of the share capital
represented by this class of shares;

d.       participation,  under the same condition as common shares,
in capital increases  resulting from the capitalization of monetary restatement,
 reserves  and  profits,  as  well  as in the  distribution  of dividends,  provided
 that  distribution  of  dividends as set forth in item a be guaranteed to common
shares.

Seventh Paragraph:         Preferred  shares  with no voting  rights
or subject to  restrictions  regarding  such rights  shall  observe  the limit of 2/3
(two  thirds)  of the total  number of shares issued.

Eighth Paragraph:          HOLDINGS  shall be allowed  to  maintain
 all its  shares,  or one or more  classes of shares, in deposit accounts,  on behalf of
their holders,  in an authorized  Financial Institution  it may appoint,  upon the
 submission  and  cancellation  of  outstanding certificates,  due consideration  having
been given to the rules in force at the time. In this case,  HOLDINGS is allowed to
charge  shareholders  for the cost of  services, subject to the limits established by the
Securities and Exchange Commission.

Ninth Paragraph:           HOLDINGS  may,  upon  notice to the Stock
 Exchanges  where its  shares are traded and publication  of notices,  suspend the
transfer of shares for periods of no longer than fifteen (15) days each;  furthermore,
 the sum of said periods shall not exceed ninety (90) days per year.

Article 6:        UNIBANCO may,  pursuant to these  by-laws and in
 accordance  with the  applicable  regulations,  issue Share Deposit Certificates,
 hereinafter  referred to as UNITS, which represent  preferred shares with no voting
rights,  deposited at UNIBANCO,  and issued by:

a) HOLDINGS; and

b) UNIBANCO.

First Paragraph:           For the purposes of this Article,  each
deposited  preferred share issued by UNIBANCO, shall  correspond to a concomitant
 deposit of one class B preferred share issued by HOLDINGS,  in such a way that each
UNIT shall  always be backed by an equal  number of preferred shares of both issuers.

Second Paragraph:          Only shares which as are free of any
burdens,  liens or any type of  encumbrance  that may  preclude the free  delivery
 thereof to the holders of the UNITS may be deposited for the conversion into UNITS.

Article 7:        The  shareholders of UNIBANCO may,  pursuant to
Articles 8, 9, 10 and 11 of these by-laws,  convert their shares into UNITS,  according
to the terms and conditions  established by its Board of Directors,  set forth in a
notice to the shareholders  which shall inform the shareholders about the conversion
procedures.

Article 8:        From the issue date of the UNITS, the shares
represented by such UNITS:

a)   shall be registered in a deposit  account  linked to the UNITS,
 and their  ownership may only be transferred upon the transfer of the corresponding
UNITS by written authorization from the holder thereof;

b)   shall have the related  income,  as well as any amount
 received in the case of  redemption  or  amortization delivered to the holder of the
UNITS;

c)       shall not have their income and their respective redemption
or amortization values pledged,  encumbered or given as collateral under any  other
 guise by  holders  of UNITS,  nor shall be object of a pledge,  attachment,
 confiscation, search or seizure or any other encumbrance that may preclude their
delivery to the holders of the UNITS.

Article 9:        UNITS  shall be in  book-entry  form and shall be
kept by  UNIBANCO  in an  account  maintained  in the name of their holder, and:

a)   the  transfer  of  UNITS  shall  be  performed  by a  record
 in  UNIBANCO ́s  registry,  to the  debit of the transferors  UNITS account and to the
credit of the  transferees  UNITS account,  upon receipt of a written order from the
transferor,  or upon a court  authorization  or order,  in an appropriate  document that
shall remain with UNIBANCO;

b)   the pledging,  usufruct,  trust,  chattel mortgage and any
other provisions,  burdens,  liens or charges that may  encumber  UNITS  shall be
 recorded  in  UNIBANCOs  books and shall be  stated  in the  UNITS  account statements;

c)   whenever so  requested,  UNIBANCO  shall supply  holders of
UNITS with a statement of their UNITS  account at the end of each month in which such
account has any activity  and,  even if no activity  occurs,  a statement shall be
provided at least once a year;

d)   the statement shall include the place and the date of issuance,
 UNIBANCOs  name, an indication that it is a statement  of  UNITS  (Registered  Share
 Deposit  Certificate)  account,  the  specification  of the  shares deposited,  a
statement  declaring  that the shares  deposited,  their income and the amount  received
in the case of  redemption  or  amortization  shall only be delivered to the holder of
the UNITS  account or upon an order in writing  from said  holder,  the name and
 identification  of the holder of the UNITS  account,  the price charged by UNIBANCO for
the deposit,  if applicable,  and the places where the holders of the UNITS can obtain
assistance;

e)   upon a written  order by the holder of the UNIT ́s  account  to
the Stock  Exchange  broker by which the UNITS are  negotiated,  UNIBANCO shall block the
UNITS  specified in the order,  being thus  authorized to transfer them to the purchaser
as soon as the Stock Exchange informs it that the UNITS have been sold;

f)   notwithstanding  the  provisions  of items g and h below,
 the holder of UNITS shall be entitled,  at any time,  to request  their  cancellation
 to  UNIBANCO  and the  delivery  of the  registered  shares that they represent,  by
means of transfer of said shares to the shares deposit accounts  maintained by UNIBANCO
in the holders name;

g)   the Board of  Directors  of UNIBANCO  may, at any time,
 suspend  the  cancellation  of UNITS for a specified period of time, subject to the
following circumstances:

I        An  announcement  by  HOLDINGS  or  by  UNIBANCO  stating
 that  they  intend  to  grant  UNIBANCO ́s shareholders the option of converting  their
shares into UNITS, in which case the suspension  period shall not exceed ninety (90) days;

II       The beginning of a public  offering for the primary or
secondary  distribution  of UNITS,  either in the  international or in the domestic
market,  in which case the suspension  period shall not exceed thirty (30) days.

h)   UNITS subject to burdens,  liens, or  encumbrances as per item b of
this Article,  may not be the object of a cancellation request;

i)   once UNITS have been  cancelled,  the holder of the shares they
 represent may freely dispose of said shares, and the restrictions mentioned in item c of
Article 8 shall cease to apply.

Article 10:       In the exercise of the rights  conferred by the
shares  represented by UNITS,  the following  rules shall be complied with:

a)       the dividends and the redemption  value or  amortization
 proceeds from shares issued by UNIBANCO shall be paid by UNIBANCO to
                          the holder of the UNITS;

b)   the dividends and the redemption value or amortization
 proceeds from shares issued by HOLDINGS  delivered to                           UNIBANCO
as depositary of the shares, shall be paid by UNIBANCO to the holder of the UNITS;

c)   only the holder of the UNITS shall exercise the right to
participate  in  Shareholders  Meetings of UNIBANCO                           and
HOLDINGS and therein  exercise all rights  attributed to the shareholders of such
companies by the shares                           represented by the UNITS;

d)   if the shares of UNIBANCO or  HOLDINGS  are split,  cancelled
 or  combined,  or if new shares of UNIBANCO or                           HOLDINGS are
issued while the UNITS are in existence, the following rules shall apply:

I        In the event that there is a change in the number of shares
 represented  by the UNITS,  as a result of share splits or through the  capitalization
 of profits or reserves,  carried out by UNIBANCO and by HOLDINGS,  UNIBANCO  shall
 register the deposit of the new shares issued and shall  register the new UNITS in the
account of the  respective  holders,  in such a way as to reflect the new number of
shares held by the holders of the UNITS,  always  maintaining  the  proportion  of one
(01) UNIBANCO preferred share to one (01) HOLDINGS class B preferred  share,
 represented by UNITS. In the event that there is a share split carried out exclusively
by either UNIBANCO or HOLDINGS,  or if the share split is carried out by both companies
using different ratios, then UNIBANCO shall register,  in the name of the holders of the
split  shares,  the deposit of as many shares as can make up UNITS,  with due regard to
the ratio  mentioned in First  Paragraph of Article 6, and shall deliver the remaining
shares issued to the holders of the UNITS represented by the split shares.

II       In the event that there is an alteration in the number of
shares  represented by UNITS,  as a result of share combination or cancellation,  carried
out by UNIBANCO and by HOLDINGS,  then UNIBANCO shall debit the UNITS deposit  accounts
of the holders of the cancelled  shares,  automatically  canceling the UNITS,  in a
number  sufficient  to reflect  the new number of shares held by the holders of the
UNITS,  always keeping the proportion of one (1) UNIBANCO  preferred share to one (1)
HOLDINGS class B preferred  share  represented by a UNIT. In the event of a combination
or cancellation of shares carried out  exclusively by either  UNIBANCO or HOLDINGS,  or
if the  combination or cancellation is carried  out by both  companies  using  different
 ratios,  then  UNIBANCO  shall  cancel  the UNITS representing  the cancelled  shares,
 delivering  the UNIBANCO or the HOLDINGS  shares that have not been cancelled to the
respective holders, as the case may be.

III  In  capital  increases  resulting  from  share  subscription,
 in  which  preemptive  rights  have  been granted, the following procedures shall apply:

1) if HOLDINGS and UNIBANCO  simultaneously  carry out a capital
increase by issuing shares that may be converted  into new UNITS,  holders of UNITS may
exercise the  preemptive  rights to which the shares represented by the UNITS are
entitled, in which case:

I       if the shareholder subscribes the shares of both companies,
 then new UNITS shall be issued to him,  corresponding  to the  shares  subscribed,  in
 accordance  with the proportion  mentioned  in First  Paragraph  of Article 6,  unless
 such  shareholder provides instruction to the contrary, as provided for in item II below;

II      if the  shareholder  chooses  to  subscribe  shares of both
 companies  without  the creation  of  UNITS,  or only  shares  from  one of the
 companies,  he may do so by informing such intention to the issuers in the share
subscription form;

2)     if only one of the companies  increase its capital,  UNIT
holders may exercise the preemptive right conferred by one of the shares  represented by
the UNITS directly,  and in such case no new UNITS will be issued.

Article 11:  Requests for  conversion,  insofar as they apply to
HOLDINGS,  shall be fulfilled  through the  subscription  of class Bpreferred  shares,
 to be paid up upon  delivery of the  preferred or common  UNIBANCO  shares,  due
 consideration  being given to the provisions of First Paragraph of this Article.

First Paragraph:           In the event of conversion of UNIBANCO
 common  shares,  HOLDINGS shall deliver to the interested  party,  in addition to the
class B preferred  shares issued by HOLDINGS, preferred  shares  issued by  UNIBANCO,
 which are a part of  HOLDINGS'  assets,  in a number sufficient to make up UNITS;
furthermore,  the Board of Directors may establish criteria  for a partial  fulfillment
 of the  requests  made by the  shareholders,  by creating  waiting lists,  through
pro-rata  distributions,  or both, the conversion of common shares into UNITS being
 contingent  upon the total number of preferred  shares issued by UNIBANCO and received
by HOLDINGS as a result of the  conversion  into UNITS of preferred shares issued by
UNIBANCO.

Second Paragraph:          The  subscription  price of the shares
issued by HOLDINGS for the purpose of complying with  requests  for  conversion  shall be
 equivalent  to the book value of the shares issued by UNIBANCO.

CHAPTER III

General Shareholders Meeting

Article 12: The General Shareholders  Meeting shall be held
ordinarily within the four (4) months immediately  following the end of the fiscal year,
for the purposes established in law, and extraordinarily, whenever corporate interests so
require.

First Paragraph:           A  shareholder   may  be   represented
 at  a  General   Shareholder   Meeting  by  an attorney-in-fact  which fulfills the
 conditions  prescribed by law. The filing of the respective power of attorney with
HOLDINGS may be required.

Second Paragraph:          The status of  shareholder  must be
proven,  if so  requested,  by  presentation  of a proper identity document.

Article 13:       The Shareholders Meeting, called at least fifteen
(15) days in advance,  according to the law, shall be installed and chaired by the
 Chairman of the Board of  Directors,  who may appoint in his stead any member of the
Board of Directors or of the Board of Executive Officers, which shall choose, among the
shareholders present, one or more secretaries.

First Paragraph:           Each common share is entitled to one vote
in the Shareholders Meetings.

Second Paragraph:          In order to be binding upon HOLDINGS,
 shareholders agreements regarding the purchase and sale of shares,  the preference on
the acquisition of shares,  and the exercise of voting  rights or the control of HOLDINGS
 must be  previously  filed at HOLDINGS head office,  in  accordance  with  the
 applicable  rules  established  by  the  Board  of Directors.  HOLDINGS may request the
shareholders  clarifications in order to properly fulfill their obligations.

Third Paragraph:           It is  incumbent  upon the  Chairman  of
the  General  Shareholders'  Meeting,  upon a request submitted by interested
 shareholders,  to declare the nullity of a vote given against an express  provision of a
 shareholders'  agreement  filed at HOLDINGS'  head office,  whenever said vote
establishes this penalty in relation to  non-compliance of commitments undertaken or to
ensure the specific execution of said commitments.

CHAPTER IV

Management

Article 14: HOLDINGS shall be managed by the following bodies:

a) a Board of Directors;

b) a Board of Executive Officers.

SECTION I

The Board of Directors

Article 15: The Board of  Directors  shall be composed  of a minimum
of five (5) and a maximum of eleven (11)  Directors,  shareholders of HOLDINGS, elected
by the General Shareholders Meeting, with a one (1) year term of office.

Sole Paragraph:            The Board of Directors shall have a
Chairman and a Vice-Chairman,  chosen by the Board in the form set forth in the Second
Paragraph of Article 18.

Article 16: It is incumbent upon the Board of Directors on an
exclusive basis to:

a)   determine  the general  directions  for the conduct of business
 and to  establish  the basic  policies  and guidelines for HOLDINGS and its subsidiaries;

b)   call Shareholders Meetings;

c)   submit to the General Shareholders Meetings proposals for:

I   capital increase or reduction;

II   mergers, amalgamations or spin-offs;

III   amendment to the by-laws;

d)   decide upon the following matters:

I       partnerships  or  jointventures   involving  HOLDINGS,
  including  participation  in  shareholders' agreements;

II      acquisition,  disposal,  increase or reduction in
 controlled or  affiliated  companies,  as well as their merger, amalgamation or spin-off;

III     acquisition  of  controlling  interests in other  companies,
 in accordance  with  applicable  legal provisions;

IV      to examine semiannual balance sheets and decide upon the
distribution and investment of profits,  in compliance with the provisions of Article 35;

V        to decide upon the annual report to the  shareholders,  the
Board of Executive  Officers  accounts and the Financial Statements of each fiscal year
to be submitted to the Shareholders Meeting;

e)   determine  the  remuneration  of each of the members of the
Board of Directors and of the Board of Executive Officers, up to the global amount
approved by the Shareholders Meeting;

f)   appoint  substitutes  for the members of the Board of
 Directors  and for any of the members of the Board of Executive Officers in the cases
provided for herein;

g)   authorize,  whenever  deemed  necessary,  the  representation
 of  HOLDINGS by a sole member of the Board of Executive  Officers or by an attorney,
 provided that the  respective  power of attorney  indicates the acts that shall be
practiced;

h) to elect and remove from office the members of the Board of
Executive  Officers as well as to determine  their duties;

i)   supervise  the actions of the Board of Executive  Officers;  to
examine,  at any time,  HOLDINGS  books and documents;  to request  information on
contracts entered into or about to be entered into with HOLDINGS,  as well as any other
acts;

j)   supervise and provide guidance to the Board of Executive
Officers;

l)   appoint and dismiss independent auditors;

m)   decide upon the purchase of shares issued by HOLDINGS;

n)   bring under its  authority  specific  matters of interest to
HOLDINGS and decide upon the cases not provided                            for herein;

o)   decide upon the creation of  committees to deal with  specific
 matters  within the authority of the Board of Directors and/or of the Board of Executive
Officers.

Article 17: It is incumbent upon the Chairman of the Board of
Directors to:

a) chair the meetings of the Board of Directors;

b) appoint,  in the cases  provided for by these  by-laws,  a
substitute  for the  Vice-Chairman  of the Board of Directors;

c) chair the  Shareholders  Meetings,  with  authority to appoint
any member of the Board of Directors or of the Board of Executive Officers to do so in
his stead;

d) provide  guidance  to the  Corporate  President  regarding  the
rights of  partner  as  provided  for in Firth Paragraph of Article 26.

Sole Paragraph:            It is incumbent on the  Vice-Chairman of
the Board of Director to replace the Chairman in his  absences,  vacations,  leaves,
 occasional  impediments  or in the  event of a vacancy.

Article 18: The Board of Directors shall meet ordinarily once every
six months and,  extraordinarily,  whenever corporate  interests so require.

First Paragraph:           The  Board  of  Directors   meetings
 may  be  called  by  the  Chairman  or  by  the Vice-Chairman, severally, or by any two
members of said Board jointly.

Second Paragraph:          The  decisions of the Board of Directors
 shall be taken by majority of votes with the presence of at least half of its elected
members.  The Chairman shall be entitled,  in addition to his own vote, to the casting
vote in case of a tie.

Third Paragraph:           The minutes of the meetings  shall be
recorded in the  appropriate  Book of Minutes of the Board of Directors Meetings.

Article 19: Except in the cases where the law calls for a special
 procedure,  the replacement of the members of the Board of Directors shall be carried
out as follows:

a) in the cases of temporary replacement:

I  the Chairman of the Board of Directors shall be replaced by the
Vice-Chairman;

II  the  Vice-Chairman  shall be replaced by any other board member
 appointed by the Chairman of the Board of Directors;

b) in the case of replacement due to a vacancy:

I  the Chairman of the Board of Directors shall be replaced by the
Vice-Chairman;

II  the  Vice-Chairman  shall be replaced by any other board member
 appointed by the Chairman of the Board of Directors;

III  all other Board members shall be replaced by a substitute
appointed by the Board of Directors;

c)   If a majority or all positions on the Board of Directors
 become vacant,  a  Shareholders  Meeting shall be called to hold a new election;

Sole Paragraph:            The person  replaced as per item b,
 sub-section III of this Article shall remain in office until the next Shareholders  Meeting,
which shall fill the vacant position for the remainder of the term of office of the
replaced Board of Directors member.

SECTION II

The Board of Executive Officers

Article 20: The Board of Executive  Officers shall comprise three
(3) members,  residents in Brazil,  shareholders  or not,  elected by the Board of
Directors, with a one (1) year term of office, reelection being permitted, composed by:

a) One (1) Corporate President;

b) Two (2) Officers;

Article 21: It is incumbent upon the Board of Executive  Officers
the  management  and  administration  of the company's  busines,  The Board of  Executive
 Officers  they may carry out all  transactions  and perform all acts related to  HOLDINGS  objectives,
 and their responsibilities are:

a)       to cause  semiannual  balance  sheets to be prepared and to
propose their  approval by the Board of Directors  together with a proposal for the
distribution and utilization of profits, subject to the provisions of Article 34;

b)   to submit to the approval of the Board of Directors  the Annual
 Report to  Shareholders  and the  Financial Statements of each fiscal year, so that they
may then be presented to the Shareholders Meeting;

c)   to comply with and ensure  compliance with the  deliberations
of the Shareholders  Meeting,  of the Board of Directors and of these by-laws;

Article 22: It is incumbent upon HOLDINGS Corporate President to:

I -  call and chair the meetings of the Board of Executive Officers;

II - provide  guidance to the management and operation of the
company's  businesses,  supervising the work of the    Board of Executive Officers;

III -coordinate the actions of the Officers;

IV - appoint the substitutes of the Officers in those cases provided
for in these by-laws.

Article 23: It is incumbent on the Board of Executive  Officers to
manage and to direct the company's  business according to the duties specifically
assigned to them by the Board of Directors.

Article 24: The replacement of the members of the Board of Executive
Officers shall be carried out as follows:

a) in the cases of temporary  replacement,  the substitute of the
HOLDINGS Corporate President shall be appointed by the Board of Directors;

b)  in the cases of  replacement  due to a vacancy in relation  to
any of the  members of the Board of  Executive Officers, the substitute shall be elected
by the Board of Directors.

Article 25: The Board of Executive Officers shall meet whenever
called to do so by the HOLDINGS Corporate President.

First Paragraph:           The  members  of the  Board of  Directors
 may  attend  the  meetings  of the Board of Executive Officers.

Second Paragraph:          The  decisions  of the Board of
 Directors  shall be taken by a majority of votes with he presence of at least half of
its elected  members.  The Corporate  President shall be entitled, in addition to his own
vote, to the casting vote in case of a tie.

Third Paragraph:           The minutes of the meetings  shall be
drawn up in the  appropriate  Book of Minutes of the Board of Executive Officers Meetings.

Article 26: The active and passive representation of HOLDINGS shall
be exercised by the members of the Board of Executive Officers.

First Paragraph:           The  following  shall  require  the joint
 signatures  of two  members of the Board of Executive Officers:

a)   acts  resulting  in  encumbrance  or disposal of real  property
 or of goods and  chattels,  the provision  of  collateral  or fide  jussio  guarantees,
 settlement  or waiver of rights,  the assumption of  obligations,  and the execution of
agreements,  as well as those acts that create responsibilities for HOLDINGS or release
third parties from liabilities in relation to it;

b)   the  appointment  of proxies,  due  consideration  being given
to the  provisions of item g of Article 16.

Second Paragraph:          UNIBANCO may be represented  severally by
any of the members of the Board of Executive Officers or by proxies with specific powers
in acts related to:

a)   receipt of initial summonses or rendering of personal
depositions in court;

b)   receipt of legal notices and rendering of statements out of
court.

Third Paragraph:           The acts  anticipated  in item  a of
First  Paragraph  of this  Article  may also be performed by any member of the Board of
Executive  Officers  together  with a proxy or jointly by two proxies,  provided an
appropriate  document  specifies the limits,  the extension of their powers and the
duration of the proxy.

Fourth Paragraph:          The Board of Officers shall  constitute
 attorneys to solely  represent the Company in the following events:

a)   powers of attorney  with ad judicia  clause for an
 undetermined  term,  including the acts of waiving, renouncing, settlements, receiving
and acquittal; and

b)   when the Grantee is a Corporation.

Fifth Paragraph:           HOLDINGS  shall  be  represented  in  the
 General  Shareholders'  Meetings,  Partners Meetings and in the  statutory  bodies of
the  corporate  entities in which it holds a stake or is a partner by the Corporate
President,  who may appoint any of the HOLDINGS Officers or a proxy to do so in his
stead,  to act jointly in pairs or  severally,  as provided for in the respective proxy
letter.

SECTION III

Provisions Applying to Both the Board of Directors and the Board of
Executive Officers

Article 27: The  Shareholders  Meeting and the Board of Directors
 may abstain  from  electing  Directors  and members of the Board of Executive Officers,
whenever the minimum limits established herein have been fulfilled.

Article 28: Holding  an office on the Board of  Directors  and on
the Board of Executive  Officers  shall not require the pledging of a bond.

Article 29: The  members  of the Board of  Directors  and of the
Board of  Executive  Officers  shall be vested in their  offices  upon signing an
 instrument  of  investiture  drawn up in the Book of Minutes of the Meetings of the
Board of Directors  and of the Board of Executive Officers.

Article 30: The  members of the Board of  Directors  and of the
Board of  Executive  Officers  shall  remain in office after the end of their terms until
their substitutes take office.

Article  31: The  General  Shareholders'  Meeting  shall  determine
 the  remuneration  of the Board of  Directors  and of the Board of Executive Officers.

CHAPTER V

The Audit Committee

Article 32:  HOLDINGS shall have an Audit  Committee made up of at
least three (3) and at most five (5) permanent  members and an equal number of
alternates, with duties as set forth in the law.

First Paragraph:           The  Audit  Committee  shall  only
 function  in  those  fiscal  years  in  which  the shareholders  request the
 installation of said  committee,  due  consideration  being given to legal provisions.

Second Paragraph:          The  Shareholders  Meeting  at which
 the  installation  of the  Audit  Committee  is requested shall elect its members and
determine their remuneration.

Third Paragraph:           The term of  office of the  members  of
the Audit  Committee  shall end at the  Annual Shareholders Meeting following their
investiture.

CHAPTER VI

The Fiscal Year, Financial Statements and Use of Profit

Article 33: The fiscal year shall end on December 31st of each year
and the respective  Financial  Statements shall be submitted to the Annual Shareholders'
Meeting.

Article 34: On the last day of each calendar half-year the period's
 Financial  Statements shall be prepared,  due consideration  being given to legal
provisions.

Sole Paragraph:            From the results of the fiscal year, five
percent (5%) shall  mandatorily be allocated to a legal  reserve,  which shall not exceed
twenty  percent  (20%) of the  registered capital,  due  consideration  being  given to
the  provisions  of First  Paragraph  of Article 193 of Law 6,404, of Dec. 15, 1976.

Article 35:  HOLDINGS shall  distribute in the form of dividends,
 every fiscal year, one hundred percent (100%) of the realized profit of the fiscal year
in cash,  remaining  after the  establishment  of the legal  reserve  described in the
sole  paragraph of Article 34 herein and/or of the  unrealized  profit reserve that is
the subject of Article 197 of law no. 6,404,  of Dec. 15, 1976,  with the text provided
by Law no. 10,303, of Oct. 31, 2001, whenever applicable.

Sole Paragraph:            In order to calculate the amount of
dividends  distributed,  any interest  distributed to the shareholders,  up to the limit
of the LONG TERM INTEREST RATE (TAXA DE JUROS DE LONGO PRAZO - TJLP) shall be taken into
account,  as provided for in Seventh Paragraph of Article 9 of law 9,249 of Dec. 26, 1995.

Article 36:       HOLDINGS may,  through a decision of the Board of
Directors,  draw up quarterly or monthly balance sheets and, during the fiscal year and
before the next Annual  Shareholders  Meeting,  having heard the Audit  Committee,  if
installed,  declare interim dividends, among other reasons as a partial or total advance
on the mandatory dividend, to be taken from:

a) profit ascertained in a semi-annual balance sheet, and

b) retained  profits or from Profit  Reserves  that were to be found
in the last annual or  semi-annual balance sheet.

CHAPTER VII

Liquidation

Article 37:  HOLDINGS shall enter into liquidation in the cases
determined by law or by decision of the  Shareholders  Meeting,  which shall establish
the form of liquidation and shall elect the liquidators and the Audit Committee,  if the
installation  thereof has been requested, to operate during the liquidation period.

CHAPTER VIII

General Provisions

Article 38:  Shareholders  failing to pay up  installments  on
shares  subscribed,  as per the conditions  set out in the  subscription bulletin  or,
 should said  bulletin  omit this  information,  when called upon to do so by the Board
of Executive  Officers,  shall be considered  in arrears  and shall be subject to the
 payment of  interest  at the rate of one  percent  (1%) per month in  addition  to
monetary  correction  calculated  in  accordance  with the indices  established  by the
Board of  Directors,  without  prejudice to the utilization by HOLDINGS of all legal
remedies available for it to recover its credit.

Article 39:  The  reimbursement  value of the shares in the cases
 guaranteed  by law shall be equal to the equity value of the shares, ascertained on the
basis of the balance sheet drawn up as provided for in the law.

CHAPTER IX

Transitory Provisions

Article  40:  HOLDINGS  shall keep in its  accounting  records,  as
a Special  Reserve  for  Dividends,  the amount of  R$36,603,225.60 (thirty-six  million,
 six hundred and three thousand,  two hundred and twenty-five reais and sixty cents),
 which on December 31, 1996 corresponded  to  44,169,452.8780  (forty-four  million,  one
hundred and  sixty-nine  thousand,  four hundred and  fifty-two and eight hundred and
 seventy-eight  thousandths)  UFIRs (Fiscal  Reference  Units),  said quantity being made
up of the profits  ascertained in HOLDINGS'  subsidiaries  during the fiscal years from
1989 to 1993 and based upon the fiscal  regime set forth in Article 35 of law No. 7,713
of Dec. 22, 1988 and Article 75 of law 8,383, of Dec. 30, 1991 and in the CST Declaratory
Act n(Degree) 49 of Sep. 23, 1994.

Sole Paragraph:            The Special Reserve for Dividends
 referred to in this Article shall be reduced by the dividends  distributed by the
company from the account of said Reserve or by virtue of their capitalization.

CLOSING AGREEMENT

This Closing Agreement (Closing  Agreement) is executed on June
28, 2002, among,  hereinafter jointly referred to as Parties:

UNIBANCO - UNIÃO DE BANCOS  BRASILEIROS  S.A., a financial
 institution with head offices in the City of São Paulo, State of São  Paulo,  at Av.  Eusébio
 Matoso,  n.  891,  enrolled  in the  CNPJ/MF  under  n.  33.700.394/0001-40, represented
herein in accordance with its bylaws (hereinafter referred to as UNIBANCO).

BANCO BRADESCO S.A., a financial  institution  with head offices at
Cidade de Deus, Vila Iara, in the  Municipality of  Osasco,  State of São  Paulo,
 enrolled  in the  CNPJ/MF  under n.  60.746,948/0001-12,  represented  herein in
accordance with its bylaws (hereinafter  referred to as BRADESCO),  jointly with its
subsidiary UNIÃO DE COMÉRCIO PARTICIPAÇÕES  LTDA., a limited  liability  partnership with
head offices at Cidade de Deus,  without number,  Vila Yara,  Municipality  of  Osasco,
 State of São Paulo,  enrolled  in the  CNPJ/MF  under  number  33.344.557/0001-07
(hereinafter referred to as UCP and, jointly with BRADESCO and UNIBANCO, simply BANKS),,

PT PRIME,  S.G.P.S.,  S.A.,  company  organized  and existing in
 accordance  with the laws of Portugal,  with head offices at Rua de Entrecampos,  n. 28,
Freguesia de Alvalade,  Lisbon,  Portugal,  represented herein in accordance with its
bylaws (hereinafter referred to as PT PRIME),

BUS SERVIÇOS DE  TELECOMUNICAÇÕES  S.A., company with head offices
in the City of São Paulo, State of São Paulo, at Av.  João  Moreira  Salles,  n.  130,
 Block A,  level 1,  enrolled  in the  CNPJ/MF  under n.  59.335.976/0001-68, represented
herein by its officers in accordance with its bylaws (hereinafter referred to as BUS),

BUS  HOLDING  S.A.,  share  corporation  with head  offices  in the
City of São Paulo,  State of São Paulo,  at Av. Eusébio Matoso, n. 891, enrolled in the
CNPJ/MF under n. 04.251.727/0001-47,  represented herein by its officers in accordance
with its bylaws (hereinafter referred to as BUS HOLDING);

PRIMESYS S.A.,  current  denomination of PRIMESYS LTDA.,  share
company with head offices in the City of São Paulo, State of São Paulo,  at Rua  Cubatão,
 n. 320,  4th floor,  enrolled  in the CNPJ/MF  under n.  03.994.551/0001-06, represented
herein by its officers in accordance with its bylaws (hereinafter referred to as PRIMESYS),

and further, as intervening and concurring party

PORTUGAL  TELECOM  S.A.,  company  incorporated  and existing in
 accordance  with the laws of Portugal,  with head offices at Av. Fontes Pereira de Melo,
n. 40, Lisbon,  Portugal,  represented  herein in accordance with its bylaws (hereinafter
referred to as PT).

PREMISES

|(1)  | WHEREAS on December 13, 2000 the Parties and the intervening and
concurring party executed the Association Agreement (Association Agreement), pursuant to which PT
PRIME acquired, on December 27, 2000, subscription rights securities issued by BUS HOLDING which granted PT
PRIME or their owner the right to subscribe its registered class B preferred shares in an amount equivalent
to 8.0% of the share capital of BUS HOLDING;                                                                                                                                                                                                                                                                                                                                                                                        
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2)  | WHEREAS on December 27, 2000 the Parties and the intervening and concurring party
executed an Amendment to the Association Agreement (Fisrt Amendment), pursuant to which they decided to
modify some of the terms of the Association Agreement, specially the escrow deposit structure originally
agreed to;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|(3)  | WHEREAS the Parties, the Banco Espirito Santo S.A. and UNIBANCO itself, the two
latter acting as depositaries (Depositaries) executed on December 27, 2000, Escrow Deposit Agreements
(Escrow Agreements) pursuant to which the BANKS deposited the Initial Amount in Escrow and the Shares
in Escrow into the Escrow Accounts maintained with the Depositaries;                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|(4)  | WHEREAS on February 1st, 2001, PT PRIME enforced its subscription rights granted by
the subscription rights securities through the subscription of 86.956 (eighty six thousand, nine hundred
and fifty six) class B preferred shares issued by BUS HOLDING and the BANKS deposited the Additional
Escrow Amount in the Escrow Accounts;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|(5)  | WHEREAS, pursuant to Section 1.6 of the Association Agreement, PT PRIME
contributed in a capital increase of PRIMESYS, all of its class B preferred shares issued by BUS
HOLDING;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|(6)  | WHEREAS the Association Agreement provided for the prior authorization to the transfer
of control of BUS by the National Telecommunications Agency (ANATEL) as a condition for the
conclusion of the operations and the closing of the deal which is the object of the Association Agreement,
pursuant to Section V of the aforementioned Association Agreement;                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|(7)  | WHEREAS the prior authorization request for the transfer of control of BUS was
filed with ANATEL onFebruary 1st, 2001, under process n. 53500.003069/1998, but the required
authorization was not issued within the term of 180 days, in accordance with Section 1.4 of the Association
Agreement;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|(8)  | WHEREAS none of the Parties was interested in terminating the agreement by
reason of the lack of approval from ANATEL, as permitted by Section 1.4 of the Association Agreement;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|(9)  | WHEREAS the Parties executed, on June 29, 2001, the Second Amendment to the
Association Agreement (Second Amendment), providing, among other issues: (i) the conversion of part of
the common shares issued by BUS into preferred shares; (ii) the partial redemption of the shares
issued by BUS HOLDING, with the delivery to PRIMESYS of all the preferred shares and part of the common
shares issued by BUS; (iii) the obligation by the BANKS to redeem, after the appropriate approval of the
transfer of control of BUS by ANATEL, the balance of the shares issues by BUS HOLDING held by
PRIMESYS through the delivery to PRIMESYS of the balance of registered common shares issued by BUS held
by BUS HOLDING and; (iv) the non-termination of the agreement and the release of the amounts maintained
in escrow; and
|(10) | WHEREAS, finally, a new prior authorization request for the transfer of control of
BUS was filed with ANATEL in the files of process n. 53500.001226/2001 (attached to Process
n. 53500.003069/1998), on April 25th, 2002, being duly approved in accordance with the 214th Meeting of
the Board of Directors of ANATEL, held on June 26, 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    



THEREFORE,  the Parties and the  intervening  and  concurring  party
RESOLVE to execute this Closing  Agreement (it being  understood that the terms not
defined in this Closing  Agreement shall have the same meanings applied in the
Association  Agreement,  in the First Amendment or in the Second Amendment),  to reflect
the legal actions taken on the date hereof for the closing of the transaction,  with the
formal transfer of control of BUS to PRIMESYS,  under the following terms and conditions:

SECTION I - REDEMPTION OF THE BALANCE OF SHARES OF BUS HOLDING,
TRANSFER OF CONTROL OF BUS

|1.1.   | - | It was held, on the date hereof, the Special General Shareholders ́ Meeting of BUS HOLDING, which deliberated, as proposed by the Board of Directors, the reduction of the share capital of BUS HOLDING, through the redemption and cancellation of 23.191 (twenty three thousand, one hundred and ninety one) class B preferred shares issued by BUS HOLDING and owned by PRIMESYS, with the delivery to PRIMESYS of all common shares issued by BUS and owned by BUS HOLDING, equivalent to 80.01% of the voting capital and 26.67% of the total capital of BUS, so that after such redemption PRIMESYS became the holder of 100% of the voting and total capital of BUS and UNIBANCO and UCP became together the owners of 100% of the voting and total capital of BUS HOLDING.
|------ | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1.1.1. | - | The transfer by the BANKS to PRIMESYS of the share issued by BUS is being, at this time, formalized by the execution of the respective Instrument of Transfer of Registered Shares of BUS and the corresponding record in the Registered Shares Registry.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|1.2.   | - | In view of the transfer of control of BUS in accordance with Section 1.1 above, it was held, on the date hereof, the Special General Shareholders ́ Meeting of BUS, with the purpose of (i) changing the address of the head offices of BUSand (ii) accepting the resignation of the current Officers of the company and electing the new Officers of the company.                                                                                                                                                                                                                                                                                                                                                                                                                  
|1.3.   | - | The Parties declare and recognize that the shareholders agreement governing the relationship between PRIMESYS and BUS HOLDING as shareholders of BUS and the relationship among PRIMESYS and the BANKS as shareholders of BUS HOLDING, as provided in Section IV of the Second Amendment is rightfully terminated in an irrevocable manner, so that the aforementioned shareholders ́ agreement becomes void of any force, enforceability or effect as of the date hereof.                                                                                                                                                                                                                                                                                                          

SECTION II - MUTUAL RELEASE

|2.     | - | PRIMESYS declares it has received from the BANKS, on the date hereof, the balance of the shares
representing the share capital of BUS in the terms described above, granting, together with PT PRIME and
PT to the BANKS the fullest, broadest and irrevocable release from all obligations undertaken by the BANKS
in the Association Agreement, in the First Amendment and the Second Amendment, specially with respect to
Section II of the Second Amendment, so that it has no further claim, for any reason or pretext, in or out
of court, except as provided in Section 2.1 below. The BANKS, in turn, declare that they have received
from PT PRIME, upon the execution of the Second Amendment, the total Escrow Amount and all the Escrow
Shares, with respect to which the grant to PT PRIME, PRIMESYS and PT the fullest, broadest and irrevocable
release with respect to the obligations undertaken by PT PRIME, PRIMESYS and PT in the Association
Agreement, First Amendment and Second Amendment, so that it has no further claim, for any reason or
pretext, in or out of court.
|------ | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2.1.   | - | It is expressly agreed among the Parties that this release shall not extend to the representations and
warranties given by the Parties pursuant to Section III of the Association Agreement (as modified by
Sections 7.2 and 7.3 of the Second Amendment), including the contingent liabilities associated with them,
whether disclosed or undisclosed until this moment, which shall remain in full force and effect.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|2.2.   | - | The Parties agree that it shall be deemed undertook, until the date hereof, the responsibility: (i) by
the BANKS with respect to the insurance of the assets that comprise their respective telecommunication
networks pursuant to Sections 3.1.11 and 3.2.7 of the Association Agreement (as modified by Section 7.2 of
the Second Amendment); and (ii) by PRIMESYS, in accordance with Section 3.3 of the Association Agreement
(as modified by Section 7.3 of the Second Amendment).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|2.2.1. | - | The Parties declare and recognize that as of the date hereof the BANKS are not required to obtain
and/or renew, as applicable, the insurance policies for the assets referred to in Section 2.2 and in
accordance with the terms of the Association Agreement and of the Second Amendment.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|2.3.   | - | It is further established that this release shall not extend to the Services Agreement between BUS and
BRADESCO or to the Services Agreement between BUS and UNIBANCO, both executed on June 29, 2001 (Services
Agreements), which shall remain in force only in accordance with their terms and conditions.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

SECTION III - SUSPENSIVE CONDITION

|3. | - | The Parties recognize that the suspensive condition provided in Section 21.19 of the Services Agreements
has been fulfilled, and therefore Sub-Sections 12.4(d) and 20.4(d) of the Services Agreements will come
into force as of the date hereof.
|-- | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

SECTION IV - LEASE OF PREMISES

|4. | - | The Parties recognize that they have not reached a satisfactory agreement with respect to the execution of
lease or sublease agreements with respect to the use of the premises on which the backbone nodes of the
BANKS ́ networks are located, as determined by Section VI of the Second Amendment, in view of which they
hereby covenant to execute such agreements in mutually satisfactory terms, within 90 (ninety) days of the
date hereof.
|-- | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

SECTION V - GENERAL PROVISIONS

|5.1.   | - | Irrevocability. This Closing Agreement is executed in an irrevocable manner, binding the parties and their
successors, at any title.                                                                                                                                                                                                                                                                                                                                                                                                                                             
|------ | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|5.2.   | - | Communications and Public Statements. All communications or public statements with respect to this Closing
Agreement and the actions provided for herein shall be coordinated among and previously approved by the
Parties.                                                                                                                                                                                                                                                                                                                                                      
|5.2.1. | - | The Parties undertake to forward to ANATEL, within the applicable legal term, all documents and
information required by the regulations in force, or as requested by the aforementioned agency.                                                                                                                                                                                                                                                                                                                                                                                  
|5.3.   | - | Specific Enforcement. Any Party shall be entitled to request in court specific enforcement of this Closing
Agreement or of any provision contained herein, in accordance with the applicable provisions of the Code
of Civil Process, including, without limitation, articles 461, 632 and 639 through 643.                                                                                                                                                                                                                                                                      
|5.4.   | - | Governing Law and Jurisdiction. This Closing Agreement shall be governed by the Brazilian law, and any
dispute among the Parties, arising out of or as a consequence of it shall be resolved in the Central Court
of the City of São Paulo, State of São Paulo, with the exclusion of jurisdiction by any other court,
however privileged, unless the Parties decide to submit their issues to arbitration, in which case it
shall be conducted in the City of São Paulo, in Portuguese language, in accordance with the rules of the
International Chamber of Commerce of Paris.
|5.5.   | - | Assignment and Obligations of Parties and Successors. The rights and obligations of the Parties may not be
assigned or transferred, in whole or in part, except with the prior written consent of the other parties.
In any case, the terms and conditions of this Closing Agreement shall benefit and bind the Parties and
their respective successors and assignees.                                                                                                                                                                                                           

IN WITNESS WHEREOF,  the parties execute this instrument in 5
counterparts,  of identical  content and form and for one single purpose, in the presence
of the two witnesses named below.

São Paulo, June 28th, 2002

PARTIES:

UNIBANCO - UNIÃO DE BANCOS BRASILEIROS S.A.

____________________________________________________________
                  Elio Boccia                Jose Lucas Ferreira de Melo
                  Executive Officer          Executive Officer

BANCO BRADESCO S.A.

____________________________________________________________

UNIÃO DE COMÉRCIO E PARTICIPAÇÕES LTDA.

____________________________________________________________

PT PRIME, S.G.P.S., S.A.

____________________________________________________________

BUS SERVIÇOS DE TELECOMUNICAÇÕES S.A.

____________________________________________________________
Elio Boccia          Jose Lucas Ferreira de Melo 
Officer              Officer

BUS HOLDING S.A.

____________________________________________________________
Elio Boccia          Jose Lucas Ferreira de Melo 
Officer              Officer

PRIMESYS S.A.

____________________________________________________________

INTERVENING AND CONCURRING PARTY:

PORTUGAL TELECOM S.A.

____________________________________________________________

Witnesses:

1. __________________________
   Name: Ricardo P. de Oliveira Jr.
   RG: 07681145-4

2. __________________________
   Name: Edigar Bernardo dos Santos
   RG 1304919

List of Subsidiaries

UNIBANCO  UNIÃO DE BANCOS
                       BRASILEIROS S.A.

|ADMINISTRADORA E CORRETORA DE SEGUROS UNIBANCO LTDA.                                                                              | Brazil         
|--------------------------------------------------------------------------------------------------------------------------------- | ---------------
|AIG BRASIL COMPANHIA DE SEGUROS                                                                                                   | Brazil         
|AMAPOLA REPRESENTAÇÃO E PARTICIPAÇÕES LTDA.                                                                                       | Brazil         
|BANAGRO BANDEIRANTES AGRO-PECUÁRIA LTDA.                                                                                          | Brazil         
|BANCO 1.NET S.A.                                                                                                                  | Brazil         
|BANCO BANDEIRANTES S.A. (UNICARD BANCO MÚLTIPLO S.A.)8                                                                            | Brazil         
|BANCO CREDIBANCO S.A. 9                                                                                                           | Brazil         
|BANCO DIBENS S.A.                                                                                                                 | Brazil         
|BANCO FININVEST S.A.                                                                                                              | Brazil         
|BANCO INVESTCRED UNIBANCO S.A.                                                                                                    | Brazil         
|BANCO SURINVEST S.A.                                                                                                              | Uruguay        
|BANDEIRANTES ADMINISTRADORA DE CARTÕES DE CRÉDITO E ASSESSORIA LTDA.1                                                             | Brazil         
|BANDEIRANTES PROCESSAMENTO DE DADOS LTDA. 2                                                                                       | Brazil         
|BIB CASH MANAGEMENT LTDA.                                                                                                         | Brazil         
|BUS HOLDING S.A.3                                                                                                                 | Brazil         
|BWU REPRESENTAÇÃO E PARTICIPAÇÕES LTDA.                                                                                           | Brazil         
|BWU VÍDEO LTDA.                                                                                                                   | Brazil         
|CIBRASEC  COMPANHIA BRASILEIRA DE SECURITIZAÇÃO                                                                                  | Brazil         
|CIBRASEC  DISTRIBUIDORA DE TÍTULOS E VALORES MOBILIÁRIOS                                                                         | Brazil         
|CNF CONSÓRCIO NACIONAL LTDA.                                                                                                      | Brazil         
|COMPANHIA DE INVESTIMENTOS PARTICIPAR 9                                                                                           | Brazil         
|CORPORACIÓN INTERAMERICANA PARA EL FINANCIAMIENTO DE INFRAESTRUCTURA S.A.                                                         | Costa Rica     
|CRED 1 SERVIÇOS FINANCEIROS LTDA 4                                                                                                | Brazil         
|CREDICARD COMERCIAL IMPORTADORA LTDA.                                                                                             | Brazil         
|CREDICARD S.A. ADMINISTRADORA DE CARTÕES DE CRÉDITO                                                                               | Brazil         
|DIBENS LEASING S.A.  ARRENDAMENTO MERCANTIL                                                                                      | Brazil         
|DIBENS S.A. DISTRIBUIDORA DE TÍTULOS E VALORES MOBILIÁRIOS                                                                        | Brazil         
|ECARD DO BRASIL LTDA. 1                                                                                                           | Brazil         
|E-PLATFORM VENTURE PARTNERS EMPREENDIMENTOS E PARTICIPAÇÕES S.A.                                                                  | Brazil         
|E-REDE DO BRASIL LTDA. 1                                                                                                          | Brazil         
|ESTREL ADMINISTRADORA E CORRETAGEM DE SEGUROS LTDA. 5                                                                             | Brazil         
|ESTREL ADMINISTRAÇÃO E PARTICIPAÇÕES S.A.                                                                                         | Brazil         
|ESTREL ADMINISTRAÇÃO S.A.                                                                                                         | Brazil         
|ESTREL ESTUDOS, REPRESENTAÇÕES E ADMINISTRAÇÃO LTDA.                                                                              | Brazil         
|ESTREL PARTICIPAÇÕES S.A.                                                                                                         | Brazil         
|ESTREL S.A.                                                                                                                       | Brazil         
|ESTREL SERVIÇOS ADMINISTRATIVOS S.A.                                                                                              | Brazil         
|FINANSERV SERVIÇOS ADMINISTRATIVOS LTDA.                                                                                          | Brazil         
|FININVEST  CORRETORA DE SEGUROS LTDA. 4                                                                                          | Brazil         
|FININTRUST CIA. SECURITIZADORA DE CRÉDITOS FINANCEIROS 6                                                                          | Brazil         
|FININVEST S.A.  NEGÓCIOS DE VAREJO                                                                                               | Brazil         
|FMX PARTICIPAÇÕES S.A.                                                                                                            | Brazil         
|FMX S.A. SOCIEDADE DE CRÉDITO, FINANCIAMENTO E INVESTIMENTO (LUIZACRED S.A. SOCIEDADE DE CRÉDITO, FINANCIAMENTO E INVESTIMENTO)10 | Brazil         
|FORTALEZA S.A. EMPREENDIMENTOS IMOBILIÁRIOS                                                                                       | Brazil         
|GARANTECH GARANTIA SERVIÇOS SC LTDA.                                                                                              | Brazil         
|INTERBANCO S.A.                                                                                                                   | Paraguay       
|INTERCHANGE SERVIÇOS S.A.                                                                                                         | Brazil         
|INVESTSHOP CORRETORA DE VALORES MOBILIÁRIOS E CÂMBIO S.A.                                                                         | Brazil         
|INVESTSHOP PARTICIPAÇÕES S.A.                                                                                                     | Brazil         
|LAC - LUIZA ADMINISTRADORA DE CARTÕES DE CRÉDITO S.A.                                                                             | Brazil         
|LATOSOL EMPREENDIMENTOS E PARTICIPAÇÕES S.A.                                                                                      | Brazil         
|MARCEP CONSULTORIA, ESTUDOS E PLANEJAMENTO LTDA.                                                                                  | Brazil         
|MARCEP INTERNATIONAL TRADE FINANCE LTD.                                                                                           | Cayman Islands 
|MEGBENS ADMINISTRAÇÃO DE BENS LTDA.                                                                                               | Brazil         
|MELHORAMENTOS DE SÃO PAULO  URBANIZAÇÃO LTDA.                                                                                    | Brazil         
|MICROINVEST S.A.  SOCIEDADE DE CRÉDITO AO MICROEMPREENDEDOR                                                                      | Brazil         
|NET ONE CORRETORA DE SEGUROS LTDA.                                                                                                | Brazil         
|NORINVEST BANK                                                                                                                    | Cayman Islands 
|NUPEN PARTICIPAÇÃO EMPREENDIMENTOS E NEGÓCIOS LTDA.                                                                               | Brazil         
|OCEÂNICA HOSPITAL SISTEMAS DE ADMINISTRAÇÃO S.A.                                                                                  | Brazil         
|ORBITALL SERVIÇOS E PROCESSAMENTO DE INFORMAÇÕES COMERCIAIS LTDA.                                                                 | Brazil         
|PAC  PRESTADORA DE SERVIÇOS LTDA.                                                                                                | Brazil         
|PONTO FRIO LEASING S.A. ARRENDAMENTO MERCANTIL                                                                                    | Brazil         
|PREVERCONSULT LTDA.  SERVIÇOS E CONSULTORIA EM PREVIDÊNCIA                                                                       | Brazil         
|REDECARD S.A.                                                                                                                     | Brazil         
|RESORTS INVESTMENTS LTD.                                                                                                          | Cayman Islands 
|ROSEFIELD FINANCE LTD.                                                                                                            | Cayman Islands 
|SCP  FORTALEZA S.A. EMPREENDIMENTOS IMOBILIÁRIOS                                                                                 | Brazil         
|SERASA S.A                                                                                                                        | Brazil         
|SURINVEST INTERNATIONAL LIMITED                                                                                                   | Cayman Islands 
|TBNET COMÉRCIO, LOCAÇÃO E ADMINISTRAÇÃO LTDA.                                                                                     | Brazil         
|TECNOLOGIA BANCÁRIA S.A.                                                                                                          | Brazil         
|TRADECOM BRASIL S.A.                                                                                                              | Brazil         
|TRADECOM ARGENTINA S.A.                                                                                                           | Argentina      
|TRADECOM INTERNATIONAL N.V.                                                                                                       | The Netherlands
|TRADECOM URUGUAY S.A.                                                                                                             | Uruguay        
|TULIPA ADMINISTRAÇÃO S.A.                                                                                                         | Brazil         
|TULIPA ADMINISTRAÇÃO E PARTICIPAÇÕES S.A.                                                                                         | Brazil         
|TULIPA ESTUDOS E PARTICIPAÇÕES S.A.                                                                                               | Brazil         
|TULIPA SERVIÇOS ADMINISTRATIVOS S.A.                                                                                              | Brazil         
|TULIPA S.A.                                                                                                                       | Brazil         
|UBB HOLDING COMPANY, INC.                                                                                                         | Delaware  USA 
|UBT FIDUCIARY LTD.                                                                                                                | Cayman Islands 
|UBT FINANCE S.A.                                                                                                                  | Switzerland    
|UBT INVESTMENTS LTD.                                                                                                              | Cayman Islands 
|UNI-INVESTMENT INTERNATIONAL CORP.                                                                                                | Cayman Islands 
|UNIPART PARTICIPAÇÕES INTERNACIONAIS LTD.                                                                                         | Cayman Islands 
|UNIPART B2B INVESTMENTS S.L.                                                                                                      | Spain          
|UNIBANCO AIG PREVIDÊNCIA S.A.                                                                                                     | Brazil         
|UNIBANCO AIG SAÚDE SEGURADORA S.A.                                                                                                | Brazil         
|UNIBANCO AIG SEGUROS S.A                                                                                                          | Brazil         
|UNIBANCO AIG WARRANTY LTDA.                                                                                                       | Brazil         
|UNIBANCO ASSET MANAGEMENT  BANCO DE INVESTIMENTO S.A.                                                                            | Brazil         
|UNIBANCO CASH MANAGEMENT E FACTORING LTDA. 7                                                                                      | Brazil         
|UNIBANCO CAYMAN BANK LTD.                                                                                                         | Cayman Islands 
|UNIBANCO COMPANHIA DE CAPITALIZAÇÃO                                                                                               | Brazil         
|UNIBANCO CORRETORA DE VALORES MOBILIÁRIOS S.A.                                                                                    | Brazil         
|UNIBANCO DISTRIBUIDORA DE TÍTS. E VALS. MOBILIÁRIOS LTDA.                                                                         | Brazil         
|UNIBANCO EMPREENDIMENTOS E PARTICIPAÇÕES LTDA.                                                                                    | Brazil         
|UNIBANCO EMPREENDIMENTOS LTDA.                                                                                                    | Brazil         
|UNIBANCO LEASING S.A.  ARRENDAMENTO MERCANTIL                                                                                    | Brazil         
|UNIBANCO NEGÓCIOS IMOBILIÁRIOS LTDA.                                                                                              | Brazil         
|UNIBANCO REPRESENTAÇÃO E PARTICIPAÇÕES LTDA.                                                                                      | Brazil         
|UNIBANCO RODOBENS ADMINISTRADORA DE CONSÓRCIOS LTDA.                                                                              | Brazil         
|UNIBANCO SAÚDE LTDA.                                                                                                              | Brazil         
|UNIBANCO SECURITIES INC.                                                                                                          | New York  USA 
|UNIBANCO SECURITIES LTD.                                                                                                          | England        
|UNIBANCO SERVIÇOS DE INVESTIMENTO LTDA.                                                                                           | Brazil         
|UNIBANCO UNIÃO DE BANCOS BRASILEIROS (LUXEMBOURG) S.A.                                                                            | Luxembourg     
|UNICORP BANK & TRUST LTD.                                                                                                         | Cayman Islands 
|VIDA NETWORK SAÚDE LTDA.                                                                                                          | Brazil         
|WALE S.A. DISTRIBUIDORA DE TÍTULOS E VALORES MOBILIÁRIOS                                                                          | Brazil         

1 Bandeirantes  Administradora  de Cartões de Crédito e Assessoria
Ltda. and Ecard do Brasil Ltda.,  E-Rede do Brasil Ltda. were merged into Banco
 Credibanco  S.A. on January 31,  2003,  but the  approval of such merge is still
 pending  approval of the Central  Bank of Brazil.

2 This  company was merged into  Administradora  e Corretora de
Seguros  Unibanco  Ltda.  on January 31,  2003,  but the merge is still pending filing
with the Registrar of Companies in Brazil.

3 This company was  extinguished  on November 11, 2002,  but the
 termination  act is pending filing with the Registrar of Companies in Brazil.

4 Cred 1 Serviços  Financeiros  Ltda. and Fininvest - Corretora de
Seguros Ltda. were merged into Fininvest S.A.  Negócios de Varejo on May 31, 2002, but
the merge is still pending filing with the Registrar of Companies in Brazil.

5 This company was merged into  Administradora  e Corretora de
Seguros  Unibanco  Ltda. on September  30, 2002,  but the merge is still pending filing
with the Registrar of Companies in Brazil.

6 New  denomination of Fininvest  Participações  Ltda.  since
November 12, 2001. This company was merged into Fininvest S.A.  Negócios de Varejo on
March 31, 2003, but the merge is still pending filing with the Registrar of Companies in
Brazil.

7 This company was merged into Unibanco  Representação e  Participações
 Ltda. on March 28, 2002, but the merge is still pending filing with the Registrar of
Companies in Brazil.

8 The  denomination  of this company is Unicard Banco Múltiplo S.A.
since April 30, 2003, but such change is still pending  approval of the Central Bank of
Brazil.

9 Banco Credibanco S.A. and Companhia de Investimentos  Participar
were merged into Banco  Bandeirantes S.A., which is presently called Unicard Banco Múltiplo
S.A., on April 30, 2003, but the merge is still pending approval of the Central Bank of
Brazil.

10 The denomination of this company is Luizacred S.A.  Sociedade de
Crédito,  Financiamento e Investimento since December 30, 2002, but such change is still
pending approval of the Central Bank of Brazil.

CERTIFICATIONPursuant to 18
United States Code § 1350

The undersigned hereby
certifies that to his knowledge the Form 20-F of Unibanco  União de Bancos Brasileiros
S.A. (the Company) filed with the Securities and Exchange Commission on the date hereof
fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange
Act of 1934 and that the information contained in such report fairly presents, in all
material respects, the financial condition and results of operations of the Company.

| | /s/ Fernando Barreira Sotelino______________________________
| | ------------------------------------------------------------
| | Name: Fernando Barreira Sotelino                            
| | Title: Executive President of the Wholesale Banking Group   
| | Date: June 27, 2003                                         

A signed original of this written  statement  required by Section
906, or other document  authenticating,  acknowledging,  or otherwise adopting the
signature  that appears in typed form within the  electronic  version of this written
 statement  required by Section 906, has been provided to Unibanco  União de Bancos
 Brasileiros  S.A. and will be retained by Unibanco  União de Bancos  Brasileiros S.A.
and furnished to the Securities and Exchange Commission or its staff upon request.



CERTIFICATION
                                     Pursuant to 18 United States Code § 1350

The undersigned hereby
certifies that to his knowledge the Form 20-F of Unibanco  União de Bancos Brasileiros
S.A. (the Company) filed with the Securities and Exchange Commission on the date hereof
fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange
Act of 1934 and that the information contained in such report fairly presents, in all
material respects, the financial condition and results of operations of the Company.

| | /s/ Joaquim Francisco de Castro Neto______________________________
| | ------------------------------------------------------------------
| | Name: Joaquim Francisco de Castro Neto                            
| | Title: Executive President of the Retail Banking Group            
| | Date: June 27, 2003                                               

A signed original of this written  statement  required by Section
906, or other document  authenticating,  acknowledging,  or otherwise adopting the
signature  that appears in typed form within the  electronic  version of this written
 statement  required by Section 906, has been provided to Unibanco  União de Bancos
 Brasileiros  S.A. and will be retained by Unibanco  União de Bancos  Brasileiros S.A.
and furnished to the Securities and Exchange Commission or its staff upon request.



CERTIFICATION
                                     Pursuant to 18 United States Code § 1350

The undersigned hereby
certifies that to his knowledge the Form 20-F of Unibanco  União de Bancos Brasileiros
S.A. (the Company) filed with the Securities and Exchange Commission on the date hereof
fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange
Act of 1934 and that the information contained in such report fairly presents, in all
material respects, the financial condition and results of operations of the Company.

| | /s/ Geraldo Travaglia Filho______________________________
| | ---------------------------------------------------------
| | Name: Geraldo Travaglia Filho                            
| | Title: Executive Officer as chief financial officer      
| | Date: June 27, 2003                                      

A signed original of this written  statement  required by Section
906, or other document  authenticating,  acknowledging,  or otherwise adopting the
signature  that appears in typed form within the  electronic  version of this written
 statement  required by Section 906, has been provided to Unibanco  União de Bancos
 Brasileiros  S.A. and will be retained by Unibanco  União de Bancos  Brasileiros S.A.
and furnished to the Securities and Exchange Commission or its staff upon request.



CERTIFICATION
                                     Pursuant to 18 United States Code § 1350

The undersigned hereby
certifies that to his knowledge the Form 20-F of Unibanco Holdings S.A. (the Company)
filed with the Securities and Exchange Commission on the date hereof fully complies with
the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and
that the information contained in such report fairly presents, in all material respects,
the financial condition and results of operations of the Company.

| | /s/ Israel Vainboim______________________________
| | -------------------------------------------------
| | Name: Israel Vainboim                            
| | Title: Executive President                       
| | Date: June 27, 2003                              

A signed original of this written  statement  required by Section
906, or other document  authenticating,  acknowledging,  or otherwise adopting the
signature  that appears in typed form within the  electronic  version of this written
 statement  required by Section 906, has been provided to Unibanco Holdings S.A. and
will be retained by Unibanco Holdings S.A.
and furnished to the Securities and Exchange Commission or its staff upon request.



CERTIFICATION
                                     Pursuant to 18 United States Code § 1350

The undersigned hereby
certifies that to his knowledge the Form 20-F of Unibanco Holdings S.A. (the Company)
filed with the Securities and Exchange Commission on the date hereof fully complies with
the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and
that the information contained in such report fairly presents, in all material respects,
the financial condition and results of operations of the Company.

| | /s/ Geraldo Travaglia Filho______________________________
| | ---------------------------------------------------------
| | Name: Geraldo Travaglia Filho                            
| | Title: Officer as chief financial officer                
| | Date: June 27, 2003                                      

A signed original of this written  statement  required by Section
906, or other document  authenticating,  acknowledging,  or otherwise adopting the
signature  that appears in typed form within the  electronic  version of this written
 statement  required by Section 906, has been provided to Unibanco Holdings S.A.
and will be retained by Unibanco Holdings S.A.
and furnished to the Securities and Exchange Commission or its staff upon request.